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)
522 Fifth Avenue, New York, New York 10036
(Address of principal executive offices) (Zip code)
Ronald Robison
522 Fifth Avenue, New York, New York 10036
(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: 3/31/08
Item 1. Reports to Shareholders.
The Fund's semi-annual report transmitted to shareholders pursuant to Rule 30e-1
under the Investment Company Act of 1940 is as follows:
Welcome, Shareholder
In this report, you'll learn about how your investment in Van Kampen
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, 2008.
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 3/31/08
INSURED TAX FREE INCOME
<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
W/O 4.75% W/O 4.00% W/O 1.00%
AVERAGE ANNUAL SALES SALES SALES SALES SALES SALES W/O SALES
TOTAL RETURNS CHARGES CHARGE CHARGES CHARGE CHARGES CHARGE CHARGES
Since Inception 6.79% 6.57% 3.89% 3.89% 3.62% 3.62% -0.07%
10-year 3.57 3.07 2.93 2.93 2.76 2.76 --
5-year 1.85 0.86 1.08 0.83 1.08 1.08 --
1-year -6.61 -11.04 -7.33 -10.91 -7.33 -8.23 -6.37
6-month -4.65 -9.16 -5.02 -8.75 -5.03 -5.96 -4.53
- -----------------------------------------------------------------------------------------------
SEC 30-Day Yield 4.68% 4.17% 4.18% 5.16%
</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, (iii) qualified state tuition plan (529 plan) accounts,
(iv) institutional clients with assets of at least $1 million and (v) certain
Van Kampen investment companies. 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. Periods less than one year are not annualized.
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, 2008
MARKET CONDITIONS
The financial markets experienced significant volatility throughout the six-
month reporting period as many large banks and financial firms began writing
down mortgage-related losses, and liquidity and credit availability became even
more restricted. At the same time, the pace of economic growth began to slow,
with gross domestic product (GDP) growth measuring an anemic 0.6 percent for the
fourth quarter of 2007. As weaker economic data was released in the first
quarter of 2008, fears of recession grew and consumer confidence waned,
prompting investors to continue to seek out the relative safety of high-quality
Treasury securities over other sectors of the fixed income market.
The municipal bond market faced additional headwinds as various monoline bond
insurers experienced credit quality downgrades and the auction rate and variable
rate markets deteriorated. As a result, the municipal market underperformed
Treasuries for the overall period, with municipal bond prices reaching
historically attractive levels relative to Treasury bonds in the first quarter
of 2008. While yields on short-dated municipal securities declined, yields on
intermediate- and long-dated securities rose, leading to the steepest yield
curve in the past four years as the spread between one-year and 30-year
maturities reached 343 basis points. After a record year for new municipal bond
issuance in 2007, the amount of new issues coming to market in the first quarter
of 2008 declined by roughly 25 percent due in large part to a substantial drop
in refunding issuance. Insured bond issuance declined dramatically in the first
quarter, from approximately 50 percent to 25 percent of total new-issue supply.
The Federal Reserve (the "Fed") took various steps to ease the liquidity crisis
and boost the economy during the period. Not only did the Fed reduce the target
federal funds rate from 4.75 percent to 2.25 percent by the end of the period,
but in an unprecedented move, it granted primary brokerage firms access to its
discount window and loosened its collateral requirements, extending loans of
Treasury securities in exchange for lower quality, less liquid securities.
Finally, in the biggest headline event, the Fed arranged and supported JP Morgan
Chase's purchase of Bear Stearns, which was viewed by many as necessary to avoid
serious market repercussions had the firm failed.
2
PERFORMANCE ANALYSIS
All share classes of Van Kampen Insured Tax Free Income Fund underperformed the
Lehman Brothers Municipal Bond Index for the six months ended March 31, 2008,
assuming no deduction of applicable sales charges.
TOTAL RETURNS FOR THE SIX-MONTH PERIOD ENDED MARCH 31, 2008
<Table>
<Caption>
- -------------------------------------------------------------------
LEHMAN BROTHERS
MUNICIPAL BOND
CLASS A CLASS B CLASS C CLASS I INDEX
-4.65% -5.02% -5.03% -4.53% 0.75%
- -------------------------------------------------------------------
</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.
Although the municipal bond market rebounded in the last month of the reporting
period and outperformed Treasuries, it was a difficult period overall,
particularly for the insured sector as the credit downgrades of various monoline
insurers put considerable pressure on prices. Rising rates in the intermediate
and long maturity portions of the yield curve also hurt the performance of these
more interest-rate sensitive securities. Given that the benchmark Lehman
Brothers Municipal Bond Index contains no insured bonds, the Fund's approximate
85 percent allocation to insured securities was a primary contributor to its
relative underperformance.
The Fund's holdings in tobacco, health care, and housing bonds also detracted
from performance. These positions were held primarily in the form of inverse
floating-rate securities* which are uninsured but still investment-grade issues.
Although these higher yielding securities served to enhance the Fund's income
and diversification, spread widening in all three sectors hurt their
performance.
We continued to favor longer maturity bonds in an effort to capture higher
yields, which resulted in a longer duration (a measure of interest-rate
sensitivity) for the portfolio. To reduce that duration somewhat, we used a
Treasury futures hedge for much of the period. Unfortunately, rising rates on
the long end of the curve coupled with the Treasury market rally caused this
positioning to detract from performance. We did, however, unwind the hedge,
investing the proceeds in auction rate securities for their favorable yields.
Holdings in other sectors, however, contributed positively to performance.
Specifically, pre-refunded, health care, public power, and water and sewer bonds
were additive to returns.
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.
3
<Table>
<Caption>
SUMMARY OF INVESTMENTS BY STATE CLASSIFICATION AS OF 3/31/08
California 26.2%
Illinois 14.6
Texas 10.6
Florida 9.0
Washington 7.5
Georgia 5.8
New Jersey 4.7
Colorado 4.1
Massachusetts 3.1
Pennsylvania 3.0
Virginia 2.5
Louisiana 2.2
Nebraska 2.2
Alaska 2.1
South Carolina 2.0
Arizona 1.9
New York 1.7
Indiana 1.6
Alabama 1.4
Tennessee 1.4
Nevada 1.2
North Dakota 1.2
Oklahoma 1.1
South Dakota 1.1
Arkansas 1.0
North Carolina 0.8
Missouri 0.7
Maryland 0.7
Rhode Island 0.4
District of Columbia 0.4
Idaho 0.4
Connecticut 0.3
Iowa 0.3
Michigan 0.3
Puerto Rico 0.3
West Virginia 0.2
Mississippi 0.1
Montana 0.1
Utah 0.1
-----
Total Investments 118.3
Liability for Floating Rate Note Obligations (19.9)
-----
Total Net Investments 98.4
Other Assets in Excess of Liabilities 1.6
-----
Net Assets 100.0%
</Table>
<Table>
(continued on next page)
</Table>
4
<Table>
RATINGS ALLOCATIONS AS OF 3/31/08
(continued from previous page)
AAA/Aaa 63.3%
AA/Aa 14.6
A/A 11.1
BBB/Baa 8.4
NR 2.6
TOP FIVE SECTORS AS OF 3/31/08
Hospital 17.6%
Airports 12.0
Single-Family Housing 10.2
Wholesale Electric 10.0
Public Education 8.5
</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.
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 email 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 P.O.
Box 219286, Kansas City, MO 64105. 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 10/1/07 - 3/31/08.
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*
-------------------------------------------------
10/1/07 3/31/08 10/1/07-3/31/08
Class A
Actual..................................... $1,000.00 $ 953.51 $9.08
Hypothetical............................... 1,000.00 1,015.70 9.37
(5% annual return before expenses)
Class B
Actual..................................... 1,000.00 949.79 12.72
Hypothetical............................... 1,000.00 1,011.95 13.13
(5% annual return before expenses)
Class C
Actual..................................... 1,000.00 949.75 12.72
Hypothetical............................... 1,000.00 1,011.95 13.13
(5% annual return before expenses)
Class I
Actual..................................... 1,000.00 954.72 7.87
Hypothetical............................... 1,000.00 1,016.95 8.12
(5% annual return before expenses)
</Table>
* Expenses are equal to the Fund's annualized expense ratio of 1.86%, 2.61%,
2.61% and 1.61% for Class A, B, C and I Shares, respectively, multiplied by
the average account value over the period, multiplied by 183/366 (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*
-------------------------------------------------
10/1/07 3/31/08 10/1/07-3/31/08
Class A
Actual..................................... $1,000.00 $ 953.51 $4.35
Hypothetical............................... 1,000.00 1,020.55 4.50
(5% annual return before expenses)
Class B
Actual..................................... 1,000.00 949.79 8.04
Hypothetical............................... 1,000.00 1,016.75 8.32
(5% annual return before expenses)
Class C
Actual..................................... 1,000.00 949.75 8.04
Hypothetical............................... 1,000.00 1,016.75 8.32
(5% annual return before expenses)
Class I
Actual..................................... 1,000.00 954.72 3.18
Hypothetical............................... 1,000.00 1,021.75 3.29
(5% annual return before expenses)
</Table>
* Expenses are equal to the Fund's annualized expense ratio of 0.89%, 1.65%,
1.65% and 0.65% for Class A, B, C and I Shares, respectively, multiplied by
the average account value over the period, multiplied by 183/366 (to reflect
the one-half year period). Assumes all dividends and distributions were
reinvested.
9
VAN KAMPEN INSURED TAX FREE INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED)
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- -------------------------------------------------------------------------------------------
MUNICIPAL BONDS 118.3%
ALABAMA 1.4%
$ 4,485 Alabama St Brd Ed Rev Athens St Univ (MBIA
Insd) (a).................................... 5.000% 09/01/27 $ 4,534,514
1,095 Birmingham, AL Wtrwks & Swr Brd Rev Ser A
(FGIC Insd).................................. 5.000 01/01/21 1,129,109
3,670 Houston Cnty, AL Hlthcare Auth Ser A (AMBAC
Insd)........................................ 5.250 10/01/30 3,677,010
3,120 Huntsville, AL Hlthcare Auth Ser A (MBIA
Insd) (Prerefunded @ 5/14/12)................ 5.400 06/01/22 3,461,921
--------------
12,802,554
--------------
ALASKA 2.1%
1,500 Alaska St Hsg Fin Corp Gen Hsg Ser A (FGIC
Insd)........................................ 5.000 12/01/30 1,458,270
6,525 Alaska St Intl Arpt Rev Rfdg Ser B (MBIA
Insd) (b).................................... 5.000 10/01/24 6,601,627
9,570 Alaska St Intl Arpt Rev Rfdg Ser D (MBIA
Insd) (b).................................... 5.000 10/01/24 9,682,387
1,215 Anchorage, AK Wtr Rev Rfdg (AMBAC Insd)...... 6.000 09/01/19 1,267,719
210 Anchorage, AK Wtr Rev Rfdg (AMBAC Insd)
(Prerefunded @ 9/01/09)...................... 6.000 09/01/19 224,173
--------------
19,234,176
--------------
ARIZONA 1.9%
2,000 Arizona Hlth Fac Auth Rev Catholic Hlthcare
West Ser D (AMBAC Insd) (c) (d).............. 6.900 07/01/35 2,000,000
1,225 Arizona St Univ Ctf Partn Resh Infrastructure
Proj (AMBAC Insd)............................ 5.250 09/01/24 1,257,119
2,800 Goodyear, AZ Mcdowell Rd Coml Corridor Impt
Dist (AMBAC Insd)............................ 5.250 01/01/32 2,825,172
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 4,447,950
1,900 Pima Cnty, AZ Indl Dev Auth AZ Charter Sch
Proj Ser O................................... 5.000 07/01/26 1,614,924
1,750 Pima Cnty, AZ Indl Dev Auth AZ Charter Sch
Proj Ser O................................... 5.250 07/01/31 1,484,718
385 Pima Cnty, AZ Indl Dev Auth Indl Rev Lease
Oblig Irvington Proj Tucson Elec Pwr Co Rfdg
Ser A (FSA Insd)............................. 7.250 07/15/10 397,266
4,000 Salt Verde Finl Corp Gas Rev AZ Sr........... 5.250 12/01/28 3,669,160
--------------
17,696,309
--------------
ARKANSAS 1.0%
2,500 Arkansas St Dev Fin Auth Rev St Agy Fac
Donaghey Plaza Proj (FSA Insd)............... 5.000 06/01/29 2,513,000
6,265 Little Rock, AR Sch Dist Rfdg Ser B (FSA
Insd)........................................ 5.500 02/01/25 6,430,271
--------------
8,943,271
--------------
</Table>
10 See Notes to Financial Statements
VAN KAMPEN INSURED TAX FREE INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- -------------------------------------------------------------------------------------------
CALIFORNIA 26.2%
$ 1,625 Anaheim, CA Redev Agy Tax Allocation Rfdg
Merged Redev Proj Area Ser A (FSA Insd)...... 5.000% 02/01/31 $ 1,626,137
4,000 Bay Area Govt Assn CA Rev Tax Alloc CA Redev
Pool Ser A (XLCA Insd)....................... 5.250 09/01/35 3,886,640
3,205 Bell, CA Cmnty Hsg Auth Lease Rev Rfdg (AMBAC
Insd)........................................ 5.000 10/01/30 3,137,214
3,310 Bell, CA Cmnty Hsg Auth Lease Rev Rfdg (AMBAC
Insd)........................................ 5.000 10/01/36 3,202,624
3,500 California Ed Fac Auth Rev Occidental College
Ser A (MBIA Insd)............................ 5.000 10/01/36 3,502,170
10,000 California Hsg Fin Agy Rev Home Mtg Ser E
(AMT) (b).................................... 4.800 08/01/37 8,582,450
2,500 California Hsg Fin Agy Rev Home Mtg Ser E
(FGIC Insd) (AMT)............................ 5.000 02/01/24 2,402,000
10,935 California Hsg Fin Agy Rev Home Mtg Ser G
(AMT) (b).................................... 5.050 02/01/29 10,398,801
4,900 California Hsg Fin Agy Rev Ser J (AMT)....... 5.050 08/01/27 4,559,205
12,085 California St Dept Vet Affairs Home Pur Rev
Ser A (AMT) (b).............................. 4.950 12/01/37 10,763,267
4,500 California St Dept Vet Affairs Home Pur Rev
Ser B (AMT).................................. 5.150 12/01/27 4,275,495
5,000 California St Var Purp (b)................... 5.000 06/01/37 4,887,150
8,800 California Stwide Cmnty Dev Auth Rev Insd Ser
D (FSA Insd) (c) (d)......................... 5.640 04/01/32 8,800,000
3,320 California Stwide Cmnty Dev Auth Rev Mtg
Ridgecrest Rgl Ser A (MBIA Insd)............. 5.000 02/01/37 3,245,400
2,980 California Stwide Cmnty Dev Auth Wtr &
Wastewtr Rev Pooled Fin Pgm Ser C (FSA Insd)
(a).......................................... 5.000 10/01/29 3,004,674
4,000 California Stwide Cmnty Dev Auth Wtr &
Wastewtr Rev Pooled Fin Pgm Ser C (FSA
Insd)........................................ 5.250 10/01/34 4,058,120
1,095 California Stwide Cmnty Dev Auth Wtr &
Wastewtr Rev Pooled Fin Ser 2004A (FSA
Insd)........................................ 5.000 10/01/29 1,104,067
3,920 California Stwide Cmnty Dev Auth Wtr &
Wastewtr Rev Pooled Fin Ser 2004A (FSA
Insd)........................................ 5.250 10/01/24 4,098,948
4,615 California Stwide Cmnty Dev Auth Wtr &
Wastewtr Rev Ser D (FSA Insd) (a)............ 5.000 10/01/26 4,710,438
7,430 Capistrano, CA Uni Sch Dist (FGIC Insd)
(a).......................................... 5.000 09/01/25 7,369,966
7,995 Capistrano, CA Uni Sch Dist (FGIC Insd)
(a).......................................... 5.000 09/01/26 7,881,151
5,600 Capistrano, CA Uni Sch Dist (FGIC Insd)...... 5.000 09/01/27 5,504,184
3,500 Capistrano, CA Uni Sch Dist (FGIC Insd)...... 5.000 09/01/29 3,405,675
5,000 Chino Vly Uni Sch Dist CA Election 2002 Ser C
(MBIA Insd).................................. 5.250 08/01/30 5,106,350
425 Earlimart, CA Elem Sch Dist Ser 1 (AMBAC
Insd)........................................ 6.700 08/01/21 529,431
17,500 Golden St Tob Sec Corp CA Tob Settlement Rev
Ser A-1 (b).................................. 5.750 06/01/47 15,510,074
</Table>
See Notes to Financial Statements 11
VAN KAMPEN INSURED TAX FREE INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- -------------------------------------------------------------------------------------------
CALIFORNIA (CONTINUED)
$ 265 Golden West Sch Fin Auth CA Rev Rfdg Ser A
(MBIA Insd) (a).............................. 5.750% 08/01/19 $ 305,291
7,000 Hawthorne, CA Cmnty Redev Agy Tax Alloc Proj
Area No 2 (XLCA Insd)........................ 5.250 09/01/36 7,013,860
690 Jurupa, CA Univ Sch Dist Election 2001 (FGIC
Insd)........................................ 5.000 08/01/26 693,478
3,360 Loma Linda, CA Redev Agy Tax Alloc Ser A
(XLCA Insd).................................. 5.250 07/01/30 3,355,330
7,450 Los Angeles, CA Muni Impt Corp Lease Rev
Police Headquarters Fac Ser A (FGIC Insd).... 4.250 01/01/37 6,226,710
10,000 Merced, CA Irr Dist Rev Ctf Partn Elec Sys
Proj (XLCA Insd)............................. 5.250 09/01/36 9,926,500
4,000 Murrieta Vy, CA Uni Sch Dist Pub Fin Auth Spl
Tax Rev Ser A (AGL Insd)..................... 4.750 09/01/36 3,831,440
3,000 Oxnard, CA Fin Auth Headworks Proj (AMBAC
Insd)........................................ 5.000 06/01/36 2,977,380
5,000 Palm Springs, CA Fin Lease Rev Convention Ctr
Proj Ser A (MBIA Insd)....................... 5.500 11/01/29 5,172,500
10,925 Palomar Pomerado Hlthcare Dist CA Ctf Partn
Ser C (FSA Insd) (c) (d)..................... 7.090 11/01/36 10,925,000
4,000 Port Oakland, CA Rfdg Inter Lien Ser A (MBIA
Insd) (AMT).................................. 5.000 11/01/29 3,710,800
10,000 Poway, CA Uni Sch Dist Spl Tax Cmnty Fac Dist
No 6-4S Ranch (AMBAC Insd)................... 5.000 09/01/35 9,694,900
1,140 Rohnert Park, CA Swr Sys Rev Ctf Partn Spl
Term (AMBAC Insd)............................ 5.000 06/01/30 1,136,888
5,140 San Marcos, CA Pub Fac Auth Rev Tax Increment
Pass-Thru Ser A Rfdg (AMBAC Insd)............ 5.000 10/01/31 5,042,494
2,785 Santa Monica, CA Cmnty College Rfdg Ser A
(AMBAC Insd)................................. 5.000 02/01/27 2,757,985
1,435 Sierra Kings, CA Hlthcare Dist Election 2006
(Radian Insd)................................ 5.000 08/01/37 1,340,878
5,380 South Orange Cnty, CA Pub Fin Auth Spl Tax
Rev Ladera Ranch Ser A (AMBAC Insd).......... 5.000 08/15/27 5,327,007
2,000 South Tahoe, CA Jt Pwr Fin Redev Proj Area No
1 Rfdg Ser A (AMBAC Insd).................... 5.000 10/01/35 1,938,980
2,625 Stockton, CA Port Dist Port Rev Ser A (MBIA
Insd)........................................ 4.500 07/01/32 2,363,182
10,005 Tobacco Sec Auth Southn CA Tob Settlement Ser
A1 (b)....................................... 5.125 06/01/46 7,991,350
10,000 University CA Regts Ser A (b)................ 4.500 05/15/47 8,913,250
2,000 Vallecitos Wtr Dist Wtr Ser A (FSA Insd)..... 5.000 07/01/35 2,005,720
</Table>
12 See Notes to Financial Statements
VAN KAMPEN INSURED TAX FREE INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- -------------------------------------------------------------------------------------------
CALIFORNIA (CONTINUED)
$ 700 Vallejo City, CA Uni Sch Rfdg Ser A (MBIA
Insd)........................................ 5.900% 08/01/25 $ 721,077
4,440 Washington, CA Uni Sch Dist Yolo Cnty Partn
New High Sch Proj (AMBAC Insd)............... 5.000 08/01/30 4,346,138
--------------
243,269,769
--------------
COLORADO 4.1%
3,500 Arkansas River Pwr Auth CO Pwr Rev Impt (XLCA
Insd)........................................ 5.000 10/01/43 3,173,310
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 3,756,010
2,500 Colorado Ed & Cultural Fac Auth Rev Charter
Sch Bromley Sch Proj Rfdg (XLCA Insd)........ 5.250 09/15/32 2,513,725
1,000 Colorado Ed & Cultural Fac Auth Rev Charter
Sch Woodrow Wilson Sch Proj Rfdg Ser A (XLCA
Insd)........................................ 5.250 12/01/34 1,003,680
2,770 Colorado Ed & Cultural Fac Auth Rev Rfdg
Charter Sch Challenge Proj Rfdg (CIFG
Insd)........................................ 5.000 06/01/37 2,631,362
1,500 Colorado Hlth Fac Auth Rev Hosp Valley View
Assn Proj.................................... 5.125 05/15/37 1,301,805
2,000 Compark Business Campus Met Dist Co Rfdg &
Impt Ser A (Radian Insd)..................... 5.600 12/01/34 1,997,080
2,095 Conservatory Met Dist CO Arapahoe Cnty Rfdg &
Impt Ltd Tax Conv Unltd (Radian Insd)........ 5.125 12/01/37 1,917,805
10,580 Denver, CO Convention Ctr Hotel Auth Rev Rfdg
(XLCA Insd).................................. 5.000 12/01/35 9,459,895
11,220 Southlands Met Dist No 1 CO Rfdg & Impt
(Radian Insd)................................ 5.250 12/01/34 10,604,583
--------------
38,359,255
--------------
CONNECTICUT 0.3%
1,000 Connecticut St Hlth & Ed Fac Auth Rev Hosp
For Spl Care Ser C (Radian Insd)............. 5.250 07/01/32 986,420
1,600 Connecticut St Hsg Fin Auth Hsg Mtg Fin Pg
Subser B (AMBAC Insd) (AMT).................. 5.050 11/15/33 1,463,680
--------------
2,450,100
--------------
DISTRICT OF COLUMBIA 0.4%
4,000 Metropolitan Washington DC Arpt Ser A (FSA
Insd) (AMT).................................. 5.000 10/01/32 3,657,320
--------------
FLORIDA 9.0%
140 Escambia Cnty, FL Hlth Fac Auth Rev (AMBAC
Insd)........................................ 5.950 07/01/20 147,722
1,765 Florida Hsg Fin Corp Rev Ser 6 (AMT)......... 4.550 07/01/26 1,594,007
35 Florida Hsg Fin Corp Rev Ser 6 (AMT) (b)..... 4.550 07/01/26 30,147
3,500 Florida Hsg Fin Corp Rev Ser 6 (AMT) (b)..... 4.625 07/01/31 3,014,694
2,500 Florida Hsg Fin Corp Rev Ser 6 (AMT) (b)..... 4.700 07/01/37 2,153,353
</Table>
See Notes to Financial Statements 13
VAN KAMPEN INSURED TAX FREE INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- -------------------------------------------------------------------------------------------
FLORIDA (CONTINUED)
$ 1,000 Florida Intergovnmtl Fin Ser C1 (AMBAC
Insd)........................................ 5.125% 02/01/31 $ 993,940
575 Florida Muni Ln Council Rev Ser B (MBIA
Insd)........................................ 5.750 11/01/14 616,360
1,185 Florida St Brd Ed Cap Outlay Pub Ed Ser C
(FGIC Insd).................................. 5.000 06/01/23 1,204,955
2,750 Florida St Brd Ed Lottery Rev Ser B (FGIC
Insd)........................................ 5.250 07/01/13 2,793,092
750 Florida St Brd of Regt Hsg Rev (MBIA Insd)... 5.750 07/01/14 798,480
1,900 Fort Myers, FL Impt Rev Rfdg (MBIA Insd)..... 4.450 12/01/35 1,716,802
1,340 Gulf Breeze, FL Rev Loc Govt (FGIC Insd)..... 5.150 12/01/20 1,393,654
500 Gulf Breeze, FL Rev Loc Govt (FGIC Insd)..... 5.650 12/01/20 517,365
5,000 Halifax Hosp Med Ctr FL Hosp Rev Ser B-1 (FSA
Insd) (c) (d)................................ 7.000 06/01/46 5,000,000
4,000 Halifax Hosp Med Ctr FL Hosp Rev Ser B-2 (FSA
Insd) (c) (d)................................ 7.280 06/01/46 4,000,000
2,000 Highlands Cnty, FL Hlth Fac Auth Rev Hosp
Adventist Hlth Ser F (FSA Insd) (c) (d)...... 5.500 11/15/35 2,000,000
11,000 Highlands Cnty, FL Hlth Fac Auth Rev Hosp
Adventist Hlth Sys Ser B (AGL Insd) (c)
(d).......................................... 6.140 11/15/37 11,000,000
800 Hillsborough Cnty, FL Indl Dev Auth Pollutn
Ctl Rev Hillsborough Cnty Rfdg (AMBAC
Insd)........................................ 5.000 12/01/34 792,440
1,000 Indian River Cnty, FL Hosp Rev Rfdg (FSA
Insd)........................................ 6.100 10/01/18 1,012,140
1,000 Key West, FL Util Brd Elec Rev Cap Apprec Ser
D (AMBAC Insd) (e)........................... * 10/01/13 801,540
16,100 Miami-Dade Cnty, FL Aviation Rev Miami Intl
Arpt Ser A (CIFG Insd) (AMT)................. 5.000 10/01/38 14,330,449
1,000 Orlando, FL Cmnty Redev Agy Tax Rep Drive
Unvl Blvd Rfdg (AMBAC Insd).................. 5.125 04/01/20 1,034,000
2,200 Palm Beach Cnty, FL Hlth Fac Auth Rev
Waterford Proj............................... 5.250 11/15/17 2,159,828
750 Polk Cnty, FL Sch Brd Ctf Partn Master Lease
Ser A (FSA Insd)............................. 5.500 01/01/16 806,220
1,000 Port Saint Lucie, FL Spl Assmt Rev Util Svc
Area No 3 & 4A (MBIA Insd)................... 5.000 10/01/18 1,015,730
535 Saint Johns Cnty, FL Indl Dev Auth
Professional Golf Proj Rfdg (MBIA Insd)...... 5.250 09/01/12 575,558
1,000 Saint Lucie Cnty, FL Sch Brd Ctf Ser A (FSA
Insd)........................................ 5.000 07/01/21 1,033,140
2,125 Santa Rosa Bay Brdg Auth FL Rev Cap Apprec
(MBIA Insd).................................. * 07/01/18 1,302,880
500 Seminole Tribe FL Spl Oblig Rev Ser A (f).... 5.250 10/01/27 452,180
500 Seminole Tribe FL Spl Oblig Rev Ser A (f).... 5.750 10/01/22 490,140
4,000 Sunrise, FL Util Sys Rev Rfdg (AMBAC Insd)... 5.200 10/01/22 4,250,520
8,825 Tallahassee, FL Hlth Fac Rev Tallahassee Mem
Regl Med Rfdg Ser A (MBIA Insd).............. 6.625 12/01/13 8,853,417
1,000 Village Ctr Cmnty Dev Dist FL Ser A (MBIA
Insd)........................................ 5.200 11/01/25 1,012,960
</Table>
14 See Notes to Financial Statements
VAN KAMPEN INSURED TAX FREE INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- -------------------------------------------------------------------------------------------
FLORIDA (CONTINUED)
$ 3,735 Volusia Cnty, FL Ed Fac Auth Rev Ed Fac Embry
Riddle Rfdg Ser B (AMBAC Insd)............... 5.250% 10/15/19 $ 3,803,052
1,000 Volusia Cnty, FL Ed Fac Auth Rev Ed Fac Embry
Riddle Rfdg Ser B (AMBAC Insd)............... 5.250 10/15/22 1,020,090
--------------
83,720,855
--------------
GEORGIA 5.8%
1,370 Atlanta, GA Tax Allocation Rfdg Atlantic Sta
Proj (AGL Insd).............................. 5.250 12/01/21 1,426,937
1,000 Atlanta, GA Tax Allocation Rfdg Atlantic Sta
Proj (AGL Insd).............................. 5.250 12/01/22 1,034,410
4,390 Bleckley-Cochran, GA Dev Auth Student Hsg Fac
Rev MGC Real Estate Fndtn Ser A (CIFG
Insd)........................................ 5.000 07/01/25 4,397,595
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 11,052,616
14,530 Georgia Muni Elec Auth Pwr Rev 2005 Ser Y
(AMBAC Insd)................................. 6.400 01/01/13 16,136,728
160 Georgia Muni Elec Auth Pwr Rev 2005 Ser Y
(AMBAC Insd) (Prerefunded @ 1/01/11)......... 6.400 01/01/13 176,499
9,445 Georgia Muni Elec Auth Pwr Rev 2005 Ser Y
(MBIA Insd).................................. 6.500 01/01/17 10,908,219
145 Georgia Muni Elec Auth Pwr Rev 2005 Ser Y
(MBIA Insd) (Prerefunded @ 1/01/14).......... 6.500 01/01/17 170,732
860 Georgia Muni Elec Auth Pwr Rev Ser Y (AMBAC
Insd) (e).................................... 6.400 01/01/13 952,261
410 Georgia Muni Elec Auth Pwr Rev Ser Y (MBIA
Insd)........................................ 6.500 01/01/17 475,387
1,000 Georgia St Hsg & Fin Auth Rev Single Family
Mtg Ser D-2 (AMT)............................ 5.250 12/01/37 927,800
4,000 Gwinnett Cnty, GA Hosp Auth Rev Antic Ctf
Gwinnett Hosp Sys Proj Ser E (FSA Insd) (c)
(d).......................................... 7.000 07/01/34 4,000,000
2,500 Gwinnett Cnty, GA Hosp Auth Rev Antic Ctf
Gwinnett Hosp Sys Proj Ser F (FSA Insd) (c)
(d).......................................... 5.890 07/01/42 2,500,000
--------------
54,159,184
--------------
IDAHO 0.4%
3,750 Idaho Hsg & Fin Assn Single Family Mtg Rev
Class III Ser G-1 (AMT)...................... 5.125 01/01/29 3,659,400
--------------
ILLINOIS 14.6%
1,000 Bartlett, IL Tax Increment Rev Rfdg Sr Lien
Quarry Redev Proj............................ 5.600 01/01/23 950,310
5,010 Bourbonnais, IL Indl Proj Rev Olivet Nazarene
Univ Proj (Radian Insd)...................... 5.125 11/01/37 4,640,563
1,500 Chicago, IL Brd Ed Cap Apprec Sch Reform Ser
A (FGIC Insd)................................ * 12/01/19 839,250
1,020 Chicago, IL Brd Ed Cap Apprec Sch Reform Ser
A (FGIC Insd)................................ * 12/01/25 378,553
</Table>
See Notes to Financial Statements 15
VAN KAMPEN INSURED TAX FREE INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (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 $ 1,591,777
5,925 Chicago, IL Midway Arpt Rev Second Lien Rfdg
Ser B (AMBAC Insd) (a)....................... 5.000% 01/01/21 6,064,237
6,220 Chicago, IL Midway Arpt Rev Second Lien Rfdg
Ser B (AMBAC Insd) (a)....................... 5.000 01/01/22 6,337,247
1,000 Chicago, IL O'Hare Intl Arpt Rev Gen Arpt
Third Lien Rfdg Ser A (MBIA Insd)............ 5.000 01/01/29 971,010
5,000 Chicago, IL O'Hare Intl Arpt Rev Gen Arpt
Third Lien Rfdg Ser E (CIFG Insd)............ 5.000 01/01/34 4,783,400
2,840 Chicago, IL O'Hare Intl Arpt Rev Gen Arpt
Third Lien Rfdg Ser E (CIFG Insd) (a)........ 5.250 01/01/21 2,901,912
3,120 Chicago, IL O'Hare Intl Arpt Rev Gen Arpt
Third Lien Rfdg Ser E (CIFG Insd)............ 5.250 01/01/23 3,159,874
1,430 Chicago, IL O'Hare Intl Arpt Rev Gen Arpt
Third Lien Rfdg Ser E (CIFG Insd)............ 5.250 01/01/24 1,441,869
6,000 Chicago, IL O'Hare Intl Arpt Rev Gen Arpt
Third Lien Ser A (MBIA Insd) (b)............. 5.250 01/01/24 6,070,695
1,525 Chicago, IL O'Hare Intl Arpt Rev Gen Arpt
Third Lien Ser A (MBIA Insd) (b)............. 5.250 01/01/25 1,542,968
3,855 Chicago, IL O'Hare Intl Arpt Rev Gen Arpt
Third Lien Ser A (MBIA Insd) (b)............. 5.250 01/01/26 3,900,422
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 18,218,288
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 20,649,200
615 Chicago, IL Pk Dist Ser C (FGIC Insd)........ 5.500 01/01/19 642,146
145 Chicago, IL Proj Rfdg Ser A (AMBAC Insd)..... 5.625 01/01/39 147,864
3,230 Chicago, IL Proj Rfdg Ser A (FGIC Insd)...... 5.375 01/01/34 3,244,955
1,305 Chicago, IL Proj Rfdg Ser A (MBIA Insd)...... 5.500 01/01/38 1,322,944
50 Chicago, IL Proj Rfdg Ser A (MBIA Insd)
(Prerefunded @ 1/01/11)...................... 5.500 01/01/38 54,406
4,975 Chicago, IL Single Family Mtg Rev Coll Ser I
(GNMA Collateralized) (AMT).................. 5.300 06/01/43 5,032,909
345 Cook Cnty, IL Sch Dist No 100 Berwyn South
Cap Apprec (FSA Insd) (a).................... 8.100 12/01/16 458,070
290 Cook Cnty, IL Sch Dist No 100 Berwyn South
Cap Apprec (FSA Insd) (a).................... 8.200 12/01/14 373,891
2,605 Cook Cnty, IL Sch Dist No 122 Oak Lawn Cap
Apprec (FGIC Insd) (a)....................... * 12/01/17 1,664,282
2,995 Cook Cnty, IL Sch Dist No 122 Oak Lawn Cap
Apprec (FGIC Insd) (a)....................... * 12/01/18 1,798,258
4,210 Cook Cnty, IL Sch Dist No 122 Oak Lawn Cap
Apprec (FGIC Insd) (a)....................... * 12/01/19 2,363,536
4,050 Cook Cnty, IL Sch Dist No 122 Oak Lawn Cap
Apprec (FGIC Insd)........................... * 12/01/20 2,129,490
</Table>
16 See Notes to Financial Statements
VAN KAMPEN INSURED TAX FREE INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- -------------------------------------------------------------------------------------------
ILLINOIS (CONTINUED)
$ 3,000 Du Page Cnty, IL Cmnty High Sch (FSA Insd)... 5.600% 01/01/22 $ 3,201,030
540 Grundy, Kendall & Will Cntys, IL (AMBAC
Insd)........................................ 5.500 05/01/20 563,976
340 Grundy, Kendall & Will Cntys, IL (AMBAC
Insd)........................................ 5.500 05/01/21 352,645
3,000 Huntley, IL Spl Svc Area No 10 Spl Tax Rfdg
(AGL Insd)................................... 5.100 03/01/29 3,004,140
2,000 Illinois Dev Fin Auth Rev Sch Dist Pgm
Rockford Sch 205 (FSA Insd).................. 6.650 02/01/11 2,215,740
2,150 Illinois Fin Auth Rev Carle Fndtn Subser A-4
(FGIC Insd) (c) (d).......................... 7.499 02/15/35 2,150,000
1,000 Illinois Fin Auth Rev IL Fin Auth Roosevelt
Univ......................................... 5.400 04/01/27 949,130
580 Illinois Hsg Dev Auth Multi Fam Rev Ser K.... 4.600 07/01/23 557,206
2,000 Illinois Med Dist (MBIA Insd)................ 5.250 06/01/32 2,004,300
1,200 Lake Cnty, IL Cmnty Cons Sch Dist No 50
Woodland Cap Apprec Ser B (FGIC Insd)........ * 12/01/14 911,472
6,790 Lake Cnty, IL Cmnty Unit Sch Dist No 60
Waukegan Cap Apprec Ser A (FSA Insd)......... * 12/01/17 4,437,537
3,000 McHenry & Kane Cnty, IL Cmnty Cons Sch Dist
No 158 Cap Apprec (FGIC Insd)................ * 01/01/17 1,974,180
4,000 McHenry & Kane Cnty, IL Cmnty Cons Sch Dist
No 158 Cap Apprec (FGIC Insd)................ * 01/01/18 2,473,760
1,330 McHenry Cnty, IL Cmnty High Sch Dist No 154
Cap Apprec (FGIC Insd)....................... * 01/01/16 942,039
6,000 Metropolitan Pier & Expo Auth IL Dedicated St
Tax Rev McCormick Pl Expn Ser A (MBIA
Insd)........................................ 5.250 06/15/42 6,035,040
--------------
135,446,521
--------------
INDIANA 1.6%
470 Indiana Bd Bk Spl Pgm Ser A (AMBAC Insd)
(e).......................................... 9.750 08/01/09 497,805
3,500 Indiana Muni Pwr Agy Pwr Supply Ser A (MBIA
Insd)........................................ 5.000 01/01/37 3,411,170
3,590 Indiana Muni Pwr Agy Pwr Supply Ser A (MBIA
Insd)........................................ 5.000 01/01/42 3,478,818
500 Plainfield, IN Cmnty High Sch Bldg Corp First
Mtg (FGIC Insd).............................. 5.000 01/15/30 493,430
5,200 Reid Hosp & Hlthcare Svc Inc Richmond IN Hosp
Auth Reid Proj Ser B (FSA Insd) (c) (d)...... 5.640 01/01/45 5,200,000
1,725 Reid Hosp & Hlthcare Svc Inc Richmond IN Hosp
Auth Hosp Proj Ser C (FSA Insd) (c) (d)...... 5.540 01/01/45 1,725,000
--------------
14,806,223
--------------
IOWA 0.3%
2,375 Iowa Fin Auth Hosp Fac Rev Trinity Regl Hosp
Proj (FSA Insd).............................. 5.750 07/01/17 2,428,960
--------------
</Table>
See Notes to Financial Statements 17
VAN KAMPEN INSURED TAX FREE INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- -------------------------------------------------------------------------------------------
LOUISIANA 2.2%
$ 3,075 Calcasieu Parish, LA Mem Hosp Svc Dist Hosp
Rev Lake Charles Mem Hosp Proj Ser A (Connie
Lee Insd).................................... 6.375% 12/01/12 $ 3,325,090
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 6,620,405
7,500 Lafayette, LA Util Rev (MBIA Insd)........... 5.250 11/01/24 7,730,925
2,500 Louisiana St Gas & Fuels Tax Rev Ser A (XLCA
Insd)........................................ 5.000 05/01/28 2,503,175
140 New Orleans, LA Home Mtg Auth Single Family
Mtg Rev Ser 1985 (MBIA Insd)................. * 09/15/16 58,097
--------------
20,237,692
--------------
MARYLAND 0.4%
1,255 Maryland St Cmnty Dev Admin Dept Hsg & Cmnty
Dev Ser P (AMT) (b).......................... 4.450 09/01/21 1,143,883
1,000 Maryland St Cmnty Dev Admin Dept Hsg & Cmnty
Dev Ser P (AMT) (b).......................... 4.550 09/01/26 911,461
1,350 Maryland St Cmnty Dev Admin Dept Hsg & Cmnty
Dev Ser P (AMT) (b).......................... 4.625 09/01/31 1,230,472
675 Maryland St Cmnty Dev Admin Dept Hsg & Cmnty
Dev Ser P (AMT) (b).......................... 4.700 03/01/37 615,236
--------------
3,901,052
--------------
MASSACHUSETTS 3.1%
2,350 Massachusetts Muni Whsl Elec Co Nuclear Mix
Ser 1-A (MBIA Insd).......................... 5.250 07/01/13 2,531,491
175 Massachusetts Muni Whsl Elec Co Proj No. 6-A
Ser A (MBIA Insd)............................ 5.250 07/01/16 185,799
3,300 Massachusetts St Hlth & Ed Fac Auth Rev
Caregroup Ser C-2 (AMBAC Insd) (c) (d)....... 7.500 07/01/25 3,300,000
12,000 Massachusetts St Hlth & Ed Fac Auth Rev
Partners Hlthcare Sys Ser F-2 (FSA Insd) (c)
(d).......................................... 4.490 07/01/40 12,000,000
2,065 Massachusetts St Hsg Fin Agy Hsg Rev Single
Family Hsg Ser 126 (AMT) (b)................. 4.625 06/01/32 1,805,634
3,000 Massachusetts St Hsg Fin Agy Hsg Ser A
(AMT)........................................ 5.200 12/01/37 2,762,190
1,745 Massachusetts St Hsg Fin Agy Hsg Ser C
(AMT)........................................ 5.100 12/01/27 1,643,633
5,000 Massachusetts St Wtr Pollutn Abatement Tr
Pool Pgm Ser 12 (b).......................... 4.375 08/01/31 4,524,275
--------------
28,753,022
--------------
MICHIGAN 0.3%
75 Chippewa Valley, MI Sch Bldg & Site (FSA
Insd)........................................ 5.000 05/01/20 79,035
3,000 Michigan Tob Settlement Fin Auth Tob
Settlement Asset Sr Ser A.................... 6.000 06/01/48 2,750,940
--------------
2,829,975
--------------
</Table>
18 See Notes to Financial Statements
VAN KAMPEN INSURED TAX FREE INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- -------------------------------------------------------------------------------------------
MISSISSIPPI 0.1%
$ 1,000 Harrison Cnty, MS Wastewtr Mgmt & Solid
Wastewtr Treatment Fac Rfdg Ser A (FGIC Insd)
(e).......................................... 8.500% 02/01/13 $ 1,245,430
--------------
MISSOURI 0.6%
220 Mehlville, MO Sch Dist No R-9 Ctf Partn Ser A
(FSA Insd)................................... 5.500 03/01/16 235,334
230 Mehlville, MO Sch Dist No R-9 Ctf Partn Ser A
(FSA Insd)................................... 5.500 03/01/17 245,500
2,750 Springfield, MO Pub Bldg Corp Leasehold Rev
Springfield Branson Arpt Ser B (AMBAC Insd)
(AMT) (b).................................... 4.550 07/01/29 2,294,465
3,350 Springfield, MO Pub Bldg Corp Leasehold Rev
Springfield Branson Aprt Ser B (AMBAC Insd)
(AMT) (b).................................... 4.600 07/01/36 2,795,076
--------------
5,570,375
--------------
MONTANA 0.1%
1,000 Montana St Brd Hsg Single Family Mtg Ser D
(AMT)........................................ 5.100 12/01/27 941,910
--------------
NEBRASKA 2.2%
15.570 Nebraska Pub Pwr Dist Rev Gen Ser B (FSA
Insd) (b).................................... 5.000 01/01/37 15,533,153
3,620 Saunders Cnty, NE (FSA Insd) (a)............. 5.000 11/01/35 3,571,818
2,000 Washington Cnty, NE Wastewtr & Solid Waste
Disp Fac Rev Cargill Inc Proj (AMT).......... 4.850 04/01/35 1,810,460
--------------
20,915,431
--------------
NEVADA 1.2%
3,045 Clark Cnty, NV Arpt Rev Sub Lien Ser A-1
(FGIC Insd) (AMT)............................ 5.500 07/01/20 3,094,572
3,000 Clark Cnty, NV Arpt Rev Sub Lien Ser A-1
(FGIC Insd) (AMT)............................ 5.500 07/01/21 3,031,290
4,000 Clark Cnty, NV Arpt Rev Sub Lien Ser A-1
(FGIC Insd) (AMT)............................ 5.500 07/01/22 4,024,840
935 Reno, NV Cap Impt Rev (FGIC Insd)............ 5.125 06/01/26 941,031
--------------
11,091,733
--------------
NEW JERSEY 4.7%
2,500 New Jersey St Hsg & Mtg Fin Agy Rev Single
Family Hsg Ser U (AMT)....................... 4.900 10/01/27 2,274,600
12,430 Tobacco Settlement Fin Corp NJ Ser A-1 (b)... 4.750 06/01/34 9,854,069
40,000 Tobacco Settlement Fin Corp NJ Ser A-1 (b)... 5.000 06/01/41 32,054,200
--------------
44,182,869
--------------
</Table>
See Notes to Financial Statements 19
VAN KAMPEN INSURED TAX FREE INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- -------------------------------------------------------------------------------------------
NEW YORK 1.7%
$ 5,470 New York City Hlth & Hosp Hlth Sys Ser A (FSA
Insd)........................................ 5.000% 02/15/21 $ 5,636,452
2,360 New York City, NY City Hsg Dev Corp Ser B-1
(AMT)........................................ 5.125 11/01/32 2,204,641
5,000 New York City, NY Indl Dev Agy Civic Fac Rev
Polytechnic Univ Proj (ACA Insd) (b)......... 5.250 11/01/27 4,215,650
3,105 New York St Dorm Auth Rev Insd Brooklyn Law
Sch Ser B (XLCA Insd) (a).................... 5.375 07/01/21 3,201,286
1,000 New York St Mtg Agy Homeowner Mtg Rev
(AMT)........................................ 5.125 10/01/37 917,010
--------------
16,175,039
--------------
NORTH CAROLINA 0.8%
7,000 Charlotte-Mecklenburg Hosp Auth NC Hlthcare
Sys Rev Ser J (FSA Insd) (c) (d)............. 5.050 01/15/46 7,000,000
--------------
NORTH DAKOTA 1.2%
5,000 Mercer Cnty, ND Pollutn Ctl Rev Antelope Vly
Station Rfdg (AMBAC Insd).................... 7.200 06/30/13 5,619,300
5,000 Oliver Cnty, ND Pollutn Ctl Rev Square Butte
Elec Coop Rfdg Ser A (AMBAC Insd)............ 5.300 01/01/27 5,040,250
675 Ward Cnty, ND Hlthcare Fac Rev Trinity
Obligated Group.............................. 5.125 07/01/25 634,081
--------------
11,293,631
--------------
OKLAHOMA 1.1%
1,000 Chickasaw Nation, OK Hlth Sys (f)............ 6.250 12/01/32 991,820
1,480 Jenks, OK Aquarium Auth Rev Rfdg (MBIA
Insd)........................................ 5.250 07/01/33 1,500,646
4,320 McAlester, OK Pub Wks Auth Util Cap Apprec
Ser A (FSA Insd)............................. * 02/01/30 1,218,931
2,400 Oklahoma City, OK Pub Ppty Auth Hotel Tax Rev
(FGIC Insd).................................. 5.250 10/01/29 2,435,640
2,000 Oklahoma Colleges Brd Regt Stad Univ Cent OK
Ser B (AMBAC Insd)........................... 5.500 06/01/24 2,083,780
2,000 Tulsa, OK Cmnty College Rev (AMBAC Insd)..... 5.500 07/01/22 2,119,840
--------------
10,350,657
--------------
PENNSYLVANIA 3.0%
5,000 Allegheny Cnty, PA Hosp Dev Auth Rev Insd
Hlth Sys Ser A (MBIA Insd) (Prerefunded @
11/15/10).................................... 6.500 11/15/30 5,585,850
4,875 Allegheny Cnty, PA Hosp Dev Auth Rev
Pittsburgh Mercy Hlth Sys Inc (AMBAC Insd)
(e).......................................... 5.625 08/15/26 5,301,514
500 Allegheny Cnty, PA San Auth Swr (FGIC
Insd)........................................ 5.000 12/01/37 488,625
500 Dauphin Cnty, PA Gen Auth Hlth Sys Rev
Pinnacle Hlth Sys Proj (FSA Insd) (c) (d).... 7.000 05/15/29 500,000
250 Harrisburg, PA Auth Res Gtd Sub Ser D-2 (FSA
Insd)........................................ 5.000 12/01/33 268,713
3,000 Lycoming Cnty, PA Auth College Rev PA College
of Technology (AMBAC Insd)................... 5.350 07/01/26 3,030,270
</Table>
20 See Notes to Financial Statements
VAN KAMPEN INSURED TAX FREE INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- -------------------------------------------------------------------------------------------
PENNSYLVANIA (CONTINUED)
$ 1,800 Pennsylvania Hsg Fin Agy Single Family Mtg
Rev Ser 96-A (AMT) (b)....................... 4.600% 10/01/27 $ 1,543,580
2,500 Pennsylvania Hsg Fin Agy Single Family Mtg
Rev Ser 96-A (AMT) (b)....................... 4.650 10/01/31 2,143,861
4,700 Pennsylvania Hsg Fin Agy Single Family Mtg
Rev Ser 96-A (AMT) (b)....................... 4.700 10/01/37 4,030,459
4,555 Philadelphia, PA Gas Wks Rev 1998 Gen
Ordinance 4th Ser (FSA Insd)................. 5.250 08/01/21 4,722,533
--------------
27,615,405
--------------
RHODE ISLAND 0.1%
1,075 Rhode Island Hsg & Mtg Fin Corp Homeownership
Oppty Ser 57-B (AMT)......................... 5.350 10/01/37 1,015,284
--------------
SOUTH CAROLINA 2.0%
5,170 Easley, SC Util Rev Impt & Rfdg (FSA Insd)
(Prerefunded @ 12/01/15)..................... 5.000 12/01/34 5,624,546
3,000 Kershaw Cnty, SC Pub Sch Fndtn Installment
Pwr Rev Dist Proj (CIFG Insd)................ 5.000 12/01/30 2,829,000
3,800 Scago Ed & Fac Corp for Cherokee Cnty SC Proj
Ser B (FSA Insd)............................. 5.000 12/01/30 3,759,074
6,500 South Carolina Jobs Econ Dev Auth Indl Rev
Elec & Gas Co Proj Ser A (AMBAC Insd)........ 5.200 11/01/27 6,557,655
--------------
18,770,275
--------------
SOUTH DAKOTA 1.1%
5,205 South Dakota St Lease Rev Tr Ctf Ser A (FSA
Insd)........................................ 6.625 09/01/12 5,713,372
4,000 South Dakota St Lease Rev Tr Ctf Ser A (FSA
Insd)........................................ 6.700 09/01/17 4,915,880
--------------
10,629,252
--------------
TENNESSEE 1.4%
13,000 Knox Cnty, TN Hlth Ed & Hsg Fac Brd Hosp Rev
Covenant Hlth Subser B-2 (AGL Insd) (c)
(d).......................................... 6.250 01/01/46 13,000,000
--------------
TEXAS 10.6%
620 Alamo, TX Cmnty College Dist Combined Fee
Rfdg (FSA Insd).............................. 5.000 11/01/22 641,743
5,250 Bell Cnty, TX Hlth Fac Dev Corp Rev Hosp
Scott White Mem Ser A-2 (FSA Insd) (c) (d)... 4.490 09/01/41 5,250,000
12,000 Bell Cnty, TX Hlth Fac Dev Corp Rev Hosp
Scott White Mem Ser C (FSA Insd) (c) (d)..... 4.900 09/01/46 12,000,000
5,000 Brazos Riv Auth TX Rev Houston Ind Inc Proj
Ser C (AMBAC Insd)........................... 5.125 05/01/19 5,104,700
4,000 Dallas Fort Worth, TX Intl Arpt Rev Impt Ser
B (FSA Insd) (AMT) (b)....................... 5.375 11/01/21 4,061,140
</Table>
See Notes to Financial Statements 21
VAN KAMPEN INSURED TAX FREE INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- -------------------------------------------------------------------------------------------
TEXAS (CONTINUED)
$ 6,110 Dallas Fort Worth, TX Intl Arpt Rev Impt Ser
B (FSA Insd) (AMT) (b)....................... 5.500% 11/01/19 $ 6,332,343
9,125 Harris Cnty, TX Hlth Fac Dev Corp Hosp Rev
Baylor College Med Ser A-4 (AMBAC Insd) (c)
(d).......................................... 8.480 11/15/47 9,125,000
8,975 Harris Cnty, TX Hlth Fac Dev Corp Rev
Christus Hlth Ser A-3 (FSA Insd) (c) (d)..... 6.140 07/01/31 8,975,000
2,525 Harris Cnty, TX Hlth Fac Dev Corp Rev
Christus Hlth Ser A-4 (FSA Insd) (c) (d)..... 6.800 07/01/31 2,525,000
22,500 Houston, TX Util Sys Rev First Lien Rfdg Ser
A (FGIC Insd)................................ 5.250 05/15/23 22,946,625
750 Laredo, TX Cmnty College Dist Unrefunded
Balance Bldg & Rfdg (AMBAC Insd)............. 5.300 08/01/26 755,663
2,500 North TX Twy Auth Rev Rfdg Sys First Tier Ser
A (g)........................................ 5.625 01/01/33 2,504,400
2,750 Nueces Riv Auth TX Wtr Supply Rev Fac Corpus
Christi Proj Rfdg (FSA Insd)................. 5.000 07/15/25 2,805,330
2,000 Nueces Riv Auth TX Wtr Supply Rev Fac Corpus
Christi Proj Rfdg (FSA Insd)................. 5.000 03/01/27 2,025,440
1,750 Tarrant Cnty, TX Hlth Fac Dev Corp Hlth Sys
Rev Ser B (FGIC Insd) (e).................... 5.000 09/01/15 1,879,762
1,000 Texas St Dept Hsg & Cmnty Affairs Single
Family Rev Ser B (GNMA Collateralized)
(AMT)........................................ 5.250 09/01/32 943,530
1,000 Texas St Dept Hsg & Cmnty Affairs Single
Family Rev Ser B (GNMA Collateralized)
(AMT)........................................ 5.300 09/01/39 937,620
10,000 Texas St Tpk Auth Cent TX Tpk First Tier Ser
A (AMBAC Insd)............................... 5.500 08/15/39 10,208,500
--------------
99,021,796
--------------
UTAH 0.1%
520 Provo, UT Elec Rev 1984 Rfdg Ser A (AMBAC
Insd) (e).................................... 10.375 09/15/15 658,996
--------------
VIRGINIA 2.5%
3,500 Roanoke, VA Indl Dev Auth Hosp Rev Carilion
Hlth Sys Ser A-1 (FSA Insd) (c) (d).......... 6.380 07/01/36 3,500,000
3,150 Virginia St Hsg Auth Dev Auth Rental Hsg Ser
D (AMT) (b).................................. 4.500 07/01/29 2,735,171
3,650 Virginia St Hsg Auth Dev Auth Rental Hsg Ser
D (AMT) (b).................................. 4.600 07/01/33 3,159,999
5,835 Virginia St Hsg Auth Dev Auth Rental Hsg Ser
D (AMT) (b).................................. 4.650 01/01/39 4,934,998
9,950 Virginia St Hsg Dev Auth Comwlth Mtg Ser B
(AMT) (b).................................... 4.850 01/01/36 8,793,680
--------------
23,123,848
--------------
</Table>
22 See Notes to Financial Statements
VAN KAMPEN INSURED TAX FREE INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- -------------------------------------------------------------------------------------------
WASHINGTON 7.5%
$ 4,115 Chelan Cnty, WA Sch Dist No 246 (FSA Insd)... 5.000% 12/01/21 $ 4,246,392
11,340 Energy Northwest WA Elec Rev Columbia
Generating Rfdg Ser A (FSA Insd)............. 5.500 07/01/17 12,280,993
4,500 Energy Northwest WA Elec Rev Proj No 3 Rfdg
Ser A (FSA Insd)............................. 5.500 07/01/17 4,866,120
14,500 Energy Northwest WA Elec Rev Proj No 3 Rfdg
Ser A (FSA Insd)............................. 5.500 07/01/18 15,376,670
5,000 Energy Northwest WA Elec Rev Proj No 3 Rfdg
Ser B (FSA Insd)............................. 6.000 07/01/16 5,565,550
1,365 Energy Northwest WA Wind Proj (AMBAC Insd)... 5.000 07/01/23 1,380,506
1,215 Fife, WA Wtr & Swr Rev (MBIA Insd) (a)....... 5.000 04/01/24 1,229,434
1,160 Fife, WA Wtr & Swr Rev (MBIA Insd) (a)....... 5.000 04/01/29 1,160,592
1,600 Fife, WA Wtr & Swr Rev (MBIA Insd)........... 5.125 04/01/24 1,602,768
1,025 King Cnty, WA Hsg Auth Cap Fd Pgm Rev Egis
Hsg Pgm (FSA Insd) (AMT)..................... 5.300 06/01/23 1,015,447
5,115 Lynnwood, WA Pub Fac Dist Rev Convention Ctr
(AMBAC Insd)................................. 5.000 12/01/34 5,062,622
145 Snohomish Cnty, WA Pub Util 1 (FSA Insd)..... 5.000 12/01/24 147,342
2,565 Snohomish Cnty, WA Pub Util 1 (FSA Insd)..... 5.500 12/01/23 2,722,671
3,000 Spokane, WA Pub Fac Dist Hotel (MBIA Insd)... 5.250 09/01/33 3,027,570
2,000 Spokane, WA Pub Fac Dist Hotel (MBIA Insd)... 5.750 12/01/25 2,129,040
2,420 Spokane, WA Pub Fac Dist Hotel (MBIA Insd)... 5.750 12/01/26 2,557,529
5,000 Washington St Hlthcare Fac Auth Rev
Providence Hlth Ser D (FSA Insd) (g)......... 5.250 10/01/33 5,075,700
--------------
69,446,946
--------------
WEST VIRGINIA 0.2%
1,530 West Virginia Econ Dev Auth Lease Rev
Correctional Juvenile & Pub Ser A (MBIA
Insd)........................................ 5.500 06/01/19 1,626,834
--------------
PUERTO RICO 0.3%
3,000 Puerto Rico Indl Tourist Ed Med &
Environmental Ctl Fac Hosp Aux (MBIA Insd)... 6.250 07/01/16 3,008,730
--------------
TOTAL LONG-TERM INVESTMENTS 117.6%
(Cost $1,123,903,860)................................................... 1,093,040,079
TOTAL SHORT-TERM INVESTMENTS 0.7%
(Cost $6,365,000)....................................................... 6,365,000
--------------
TOTAL INVESTMENTS 118.3%
(Cost $1,130,268,860)................................................... 1,099,405,079
</Table>
See Notes to Financial Statements 23
VAN KAMPEN INSURED TAX FREE INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION VALUE
- -------------------------------------------------------------------------------------------
LIABILITY FOR FLOATING RATE NOTE OBLIGATIONS RELATED TO SECURITIES HELD (19.9%)
(Cost ($184,920,000))
$(184,920) Notes with interest rates ranging from 2.15% to 3.10% at March
31, 2008 and contractual maturities of collateral ranging from
2019 to 2047 (See Note 1) (h).................................. $ (184,920,000)
--------------
TOTAL NET INVESTMENTS 98.4%
(Cost $945,348,860)..................................................... 914,485,079
OTHER ASSETS IN EXCESS OF LIABILITIES 1.6%............................... 15,358,788
--------------
NET ASSETS 100.0%........................................................ $ 929,843,867
==============
</Table>
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 1H and 6B.
(c) Variable Rate Coupon
(d) Security includes a feature allowing the Fund an option on any interest rate
payment date to offer the security for sale at par. The sale is contingent
upon market conditions.
(e) Escrowed to Maturity
(f) 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.
(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, 2008.
24 See Notes to Financial Statements
VAN KAMPEN INSURED TAX FREE INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
ACA--American Capital Access
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.
See Notes to Financial Statements 25
VAN KAMPEN INSURED TAX FREE INCOME FUND
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
March 31, 2008 (Unaudited)
<Table>
ASSETS:
Total Investments (Cost $1,130,268,860)..................... $1,099,405,079
Cash........................................................ 599,893
Receivables:
Interest.................................................. 13,379,365
Investments Sold.......................................... 12,188,894
Fund Shares Sold.......................................... 414,326
Other....................................................... 300,703
--------------
Total Assets............................................ 1,126,288,260
--------------
LIABILITIES:
Payables:
Floating Rate Note Obligations............................ 184,920,000
Investments Purchased..................................... 7,445,850
Fund Shares Repurchased................................... 2,114,931
Income Distributions...................................... 639,361
Investment Advisory Fee................................... 404,435
Distributor and Affiliates................................ 299,952
Trustees' Deferred Compensation and Retirement Plans........ 391,024
Accrued Expenses............................................ 228,840
--------------
Total Liabilities....................................... 196,444,393
--------------
NET ASSETS.................................................. $ 929,843,867
==============
NET ASSETS CONSIST OF:
Capital (Par value of $.01 per share with an unlimited
number of shares authorized).............................. $ 987,615,303
Accumulated Undistributed Net Investment Income............. 3,473,337
Accumulated Net Realized Loss............................... (30,380,992)
Net Unrealized Depreciation................................. (30,863,781)
--------------
NET ASSETS.................................................. $ 929,843,867
==============
MAXIMUM OFFERING PRICE PER SHARE:
Class A Shares:
Net asset value and redemption price per share (Based on
net assets of $886,139,981 and 53,613,834 shares of
beneficial interest issued and outstanding)............. $ 16.53
Maximum sales charge (4.75%* of offering price)......... 0.82
--------------
Maximum offering price to public........................ $ 17.35
==============
Class B Shares:
Net asset value and offering price per share (Based on
net assets of $24,949,137 and 1,511,335 shares of
beneficial interest issued and outstanding)............. $ 16.51
==============
Class C Shares:
Net asset value and offering price per share (Based on
net assets of $17,795,345 and 1,079,086 shares of
beneficial interest issued and outstanding)............. $ 16.49
==============
Class I Shares:
Net asset value and offering price per share (Based on
net assets of $959,404 and 58,048 shares of beneficial
interest issued and outstanding)........................ $ 16.53
==============
</Table>
* On sales of $100,000 or more, the sales charge will be reduced.
26 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, 2008 (Unaudited)
<Table>
INVESTMENT INCOME:
Interest.................................................... $ 31,382,867
------------
EXPENSES:
Interest and Residual Trust Expenses........................ 4,769,629
Investment Advisory Fee..................................... 2,534,195
Distribution (12b-1) and Service Fees
Class A................................................... 1,161,598
Class B................................................... 138,860
Class C................................................... 91,894
Transfer Agent Fees......................................... 299,986
Accounting and Administrative Expenses...................... 100,071
Professional Fees........................................... 65,414
Custody..................................................... 64,511
Reports to Shareholders..................................... 46,962
Registration Fees........................................... 38,181
Trustees' Fees and Related Expenses......................... 19,461
Other....................................................... 31,599
------------
Total Expenses.......................................... 9,362,361
Less Credits Earned on Cash Balances.................... 34,185
------------
Net Expenses............................................ 9,328,176
------------
NET INVESTMENT INCOME....................................... $ 22,054,691
============
REALIZED AND UNREALIZED GAIN/LOSS:
Realized Gain/Loss:
Investments............................................... $(14,665,563)
Futures................................................... (11,852,005)
------------
Net Realized Loss........................................... (26,517,568)
------------
Unrealized Appreciation/Depreciation:
Beginning of the Period................................... 11,207,932
End of the Period......................................... (30,863,781)
------------
Net Unrealized Depreciation During the Period............... (42,071,713)
------------
NET REALIZED AND UNREALIZED LOSS............................ $(68,589,281)
============
NET DECREASE IN NET ASSETS FROM OPERATIONS.................. $(46,534,590)
============
</Table>
See Notes to Financial Statements 27
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, 2008 SEPTEMBER 30, 2007
--------------------------------------
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income................................ $ 22,054,691 $ 43,645,112
Net Realized Loss.................................... (26,517,568) (5,564,246)
Net Unrealized Depreciation During the Period........ (42,071,713) (44,531,309)
-------------- --------------
Change in Net Assets from Operations................. (46,534,590) (6,450,443)
-------------- --------------
Distributions from Net Investment Income:
Class A Shares..................................... (20,359,964) (40,174,291)
Class B Shares..................................... (494,693) (1,163,640)
Class C Shares..................................... (329,143) (610,672)
Class I Shares..................................... (23,541) (88,748)
-------------- --------------
(21,207,341) (42,037,351)
-------------- --------------
Distributions from Net Realized Gain:
Class A Shares..................................... -0- (3,149,919)
Class B Shares..................................... -0- (122,192)
Class C Shares..................................... -0- (59,328)
Class I Shares..................................... -0- (7,068)
-------------- --------------
-0- (3,338,507)
-------------- --------------
Total Distributions.................................. (21,207,341) (45,375,858)
-------------- --------------
NET CHANGE IN NET ASSETS FROM INVESTMENT
ACTIVITIES......................................... (67,741,931) (51,826,301)
-------------- --------------
FROM CAPITAL TRANSACTIONS:
Proceeds from Shares Sold............................ 32,647,439 61,750,099
Net Asset Value of Shares Issued Through Dividend
Reinvestment....................................... 17,159,925 36,270,893
Cost of Shares Repurchased........................... (85,561,048) (155,459,171)
-------------- --------------
NET CHANGE IN NET ASSETS FROM CAPITAL TRANSACTIONS... (35,753,684) (57,438,179)
-------------- --------------
TOTAL DECREASE IN NET ASSETS......................... (103,495,615) (109,264,480)
NET ASSETS:
Beginning of the Period.............................. 1,033,339,482 1,142,603,962
-------------- --------------
End of the Period (Including accumulated
undistributed net investment income of $3,473,337
and $2,625,987, respectively)...................... $ 929,843,867 $1,033,339,482
============== ==============
</Table>
28 See Notes to Financial Statements
VAN KAMPEN INSURED TAX FREE INCOME FUND
FINANCIAL STATEMENTS continued
Statement of Cash Flows
For the Six Months Ended March 31, 2008 (Unaudited)
<Table>
CHANGE IN NET ASSETS FROM OPERATIONS........................ $ (46,534,590)
-------------
Adjustments to Reconcile the Change in Net Assets from
Operations to Net Cash Provided by Operating Activities:
Purchases of Investments.................................. (290,184,906)
Proceeds from Sales....................................... 380,644,653
Net Purchases of Short-Term Investments................... 42,360,000
Amortization of Premium................................... 886,277
Accretion of Discount..................................... (746,278)
Net Realized Loss on Investments.......................... 14,665,563
Net Change in Unrealized Appreciation on Investments...... 40,373,455
Decrease in Interest Receivables and Other Assets......... 158,981
Increase in Receivable for Investments Sold............... (12,188,894)
Decrease in Accrued Expenses and Other Payables........... (33,083)
Decrease in Investments Purchased Payable................. (12,724,045)
-------------
Total Adjustments....................................... 163,211,723
-------------
NET CASH PROVIDED BY OPERATING ACTIVITIES................... 116,677,133
-------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from Shares Sold................................. 32,409,543
Repurchased Shares........................................ (86,000,463)
Dividends Paid............................................ (4,065,283)
Proceeds from and Repayments of Floating Rate Note
Obligations............................................. (59,805,000)
-------------
NET CASH USED FOR FINANCING ACTIVITIES...................... (117,461,203)
-------------
Net Change in Cash.......................................... (784,070)
Cash at the Beginning of the Period......................... 1,383,963
-------------
CASH AT THE END OF THE PERIOD............................... $ 599,893
=============
Supplemental Disclosures of Cash Flow Information
Cash Paid During the Year for Interest.................... $ 4,769,629
=============
</Table>
See Notes to Financial Statements 29
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, ------------------------------------------------------
2008 2007 2006 2005 2004 2003
-------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF
THE PERIOD................. $17.72 $18.59 $ 18.87 $ 19.07 $ 19.27 $ 19.65
------ ------ -------- -------- -------- --------
Net Investment Income...... 0.39(a) 0.74(a) 0.72(a) 0.72 0.76 0.77
Net Realized and Unrealized
Gain/Loss................ (1.21) (0.84) 0.09 (0.01) 0.02 (0.23)
------ ------ -------- -------- -------- --------
Total from Investment
Operations................. (0.82) (0.10) 0.81 0.71 0.78 0.54
------ ------ -------- -------- -------- --------
Less:
Distributions from Net
Investment Income........ 0.37 0.71 0.71 0.74 0.75 0.74
Distributions from Net
Realized Gain............ -0- 0.06 0.38 0.17 0.23 0.18
------ ------ -------- -------- -------- --------
Total Distributions.......... 0.37 0.77 1.09 0.91 0.98 0.92
------ ------ -------- -------- -------- --------
NET ASSET VALUE, END OF THE
PERIOD..................... $16.53 $17.72 $ 18.59 $ 18.87 $ 19.07 $ 19.27
====== ====== ======== ======== ======== ========
Total Return (b)............. -4.65%* -0.63% 4.49% 3.77% 4.22% 2.90%
Net Assets at End of the
Period (In millions)....... $886.1 $983.3 $1,075.9 $1,114.2 $1,137.2 $1,209.9
Ratio of Expenses to Average
Net Assets................. 1.86% 1.54% 1.00% 0.94% 0.89% 0.86%
Ratio of Net Investment
Income to Average Net
Assets..................... 4.49% 4.02% 3.87% 3.81% 3.99% 4.02%
Portfolio Turnover........... 25%* 51% 45% 65% 39% 58%
SUPPLEMENTAL RATIO:
Ratio of Expenses to Average
Net Assets (Excluding
Interest and Residual Trust
Expenses).................. 0.89% 0.88% 0.88% 0.88% 0.87% 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.
30 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 B SHARES MARCH 31, ----------------------------------------------
2008 2007 2006 2005 2004 2003
-----------------------------------------------------------
NET ASSET VALUE, BEGINNING OF THE
PERIOD........................... $17.70 $18.57 $18.85 $19.05 $19.24 $19.63
------ ------ ------ ------ ------ ------
Net Investment Income............ 0.32(a) 0.60(a) 0.58(a) 0.59 0.62 0.63
Net Realized and Unrealized
Gain/Loss...................... (1.20) (0.84) 0.09 (0.02) 0.02 (0.24)
------ ------ ------ ------ ------ ------
Total from Investment Operations... (0.88) (0.24) 0.67 0.57 0.64 0.39
------ ------ ------ ------ ------ ------
Less:
Distributions from Net Investment
Income......................... 0.31 0.57 0.57 0.60 0.60 0.60
Distributions from Net Realized
Gain........................... -0- 0.06 0.38 0.17 0.23 0.18
------ ------ ------ ------ ------ ------
Total Distributions................ 0.31 0.63 0.95 0.77 0.83 0.78
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF THE
PERIOD........................... $16.51 $17.70 $18.57 $18.85 $19.05 $19.24
====== ====== ====== ====== ====== ======
Total Return (b)................... -5.02%* -1.38% 3.71% 3.04% 3.43% 2.08%
Net Assets at End of the Period (In
millions)........................ $ 24.9 $ 30.0 $ 43.0 $ 56.2 $66. 4 $ 82.6
Ratio of Expenses to Average Net
Assets........................... 2.61% 2.29% 1.75% 1.70% 1.65% 1.62%
Ratio of Net Investment Income to
Average Net Assets............... 3.74% 3.25% 3.11% 3.05% 3.23% 3.26%
Portfolio Turnover................. 25%* 51% 45% 65% 39% 58%
SUPPLEMENTAL RATIO:
Ratio of Expenses to Average Net
Assets (Excluding Interest and
Residual Trust Expenses)......... 1.65% 1.63% 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.
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 C SHARES MARCH 31, ----------------------------------------------
2008 2007 2006 2005 2004 2003
-----------------------------------------------------------
NET ASSET VALUE, BEGINNING OF THE
PERIOD........................... $17.68 $18.55 $18.84 $19.04 $19.23 $19.62
------ ------ ------ ------ ------ ------
Net Investment Income............ 0.32(a) 0.60(a) 0.58(a) 0.58 0.62 0.63
Net Realized and Unrealized
Gain/Loss...................... (1.20) (0.84) 0.08 (0.01) 0.02 (0.24)
------ ------ ------ ------ ------ ------
Total from Investment Operations... (0.88) (0.24) 0.66 0.57 0.64 0.39
------ ------ ------ ------ ------ ------
Less:
Distributions from Net Investment
Income......................... 0.31 0.57 0.57 0.60 0.60 0.60
Distributions from Net Realized
Gain........................... -0- 0.06 0.38 0.17 0.23 0.18
------ ------ ------ ------ ------ ------
Total Distributions................ 0.31 0.63 0.95 0.77 0.83 0.78
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF THE
PERIOD........................... $16.49 $17.68 $18.55 $18.84 $19.04 $19.23
====== ====== ====== ====== ====== ======
Total Return (b)................... -5.03%* -1.38% 3.66% 3.04% 3.43% 2.08%
Net Assets at End of the Period (In
millions)........................ $ 17.8 $ 19.0 $ 21.3 $ 21.7 $ 19.9 $ 24.1
Ratio of Expenses to Average Net
Assets........................... 2.61% 2.29% 1.75% 1.70% 1.65% 1.62%
Ratio of Net Investment Income to
Average Net Assets............... 3.75% 3.26% 3.11% 3.05% 3.23% 3.25%
Portfolio Turnover................. 25%* 51% 45% 65% 39% 58%
SUPPLEMENTAL RATIO:
Ratio of Expenses to Average Net
Assets (Excluding Interest and
Residual Trust Expenses)......... 1.65% 1.63% 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.
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>
AUGUST 12, 2005
SIX MONTHS YEAR ENDED (COMMENCEMENT OF
ENDED SEPTEMBER 30, OPERATIONS) TO
CLASS I SHARES MARCH 31, ----------------- SEPTEMBER 30,
2008 2007 2006 2005
-------------------------------------------------
NET ASSET VALUE, BEGINNING OF THE PERIOD... $ 17.72 $ 18.59 $18.87 $18.93
------- ------- ------ ------
Net Investment Income.................... 0.41(a) 0.78(a) 0.75(a) 0.10
Net Realized and Unrealized Gain/Loss.... (1.20) (0.84) 0.10 (0.06)
------- ------- ------ ------
Total from Investment Operations........... (0.79) (0.06) 0.85 0.04
------- ------- ------ ------
Less:
Distributions from Net Investment
Income................................. 0.40 0.75 0.75 0.10
Distributions from Net Realized Gain..... -0- 0.06 0.38 -0-
------- ------- ------ ------
Total Distributions........................ 0.40 0.81 1.13 0.10
------- ------- ------ ------
NET ASSET VALUE, END OF THE PERIOD......... $ 16.53 $ 17.72 $18.59 $18.87
======= ======= ====== ======
Total Return (b)........................... -4.53%* -0.38% 4.75% 0.20%*
Net Assets at End of the Period (In
millions)................................ $ 1.0 $ 1.1 $ 2.4 $ 1.9
Ratio of Expenses to Average Net Assets.... 1.61% 1.29% 0.75% 0.70%
Ratio of Net Investment Income to Average
Net Assets............................... 4.74% 4.23% 4.11% 4.06%
Portfolio Turnover......................... 25%* 51% 45% 65%
SUPPLEMENTAL RATIO:
Ratio of Expenses to Average Net Assets
(Excluding Interest and Residual Trust
Expenses)................................ 0.65% 0.63% 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.
See Notes to Financial Statements 33
VAN KAMPEN INSURED TAX FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2008 (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 with 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 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 obtained 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, 2008, the Fund had $7,445,850 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.
34
VAN KAMPEN INSURED TAX FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2008 (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 adopted the provisions of the Financial Accounting Standards Board ("FASB")
Interpretation No. 48 ("FIN 48") Accounting for Uncertainty in Income Taxes on
March 31, 2008. FIN 48 sets forth a minimum threshold for financial statement
recognition of the benefit of a tax position taken or expected to be taken in a
tax return. The implementation of FIN 48 did not result in any unrecognized tax
benefits in the accompanying financial statements. If applicable, the Fund
recognizes interest accrued related to unrecognized tax benefits in "Interest
Expense" and penalties in "Other" expenses on the Statement of Operations. The
Fund files tax returns with the U.S. Internal Revenue Service, New York and
various states. Generally, each of the tax years in the four year period ended
September 30, 2007, remains subject to examination by taxing authorities.
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, 2007, the Fund had an accumulated capital loss
carryforward for tax purposes of $210,390 which will expire on September 30,
2015.
At March 31, 2008, the cost and related gross unrealized appreciation and
depreciation were as follows:
<Table>
Cost of investments for tax purposes........................ $925,203,016
============
Gross tax unrealized appreciation........................... $ 20,778,666
Gross tax unrealized depreciation........................... (31,496,603)
------------
Net tax unrealized depreciation on investments.............. $(10,717,937)
============
</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,
2007:
<Table>
Distributions paid from:
Ordinary income........................................... $ 368,719
Tax exempt income......................................... 41,829,550
Long-term capital gain.................................... 3,333,429
-----------
$45,531,698
===========
</Table>
As of September 30, 2007, the components of distributable earnings on a tax
basis were as follows:
<Table>
Undistributed ordinary income............................... $ 35,181
Undistributed tax-exempt income............................. 3,433,086
</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.
35
VAN KAMPEN INSURED TAX FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2008 (UNAUDITED) continued
F. 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.
G. CREDITS EARNED ON CASH BALANCES During the six months ended March 31, 2008,
the Fund's custody fee was reduced by $34,185 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
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 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, 2008, Fund investments with a value of $253,622,928 are held
by the dealer trusts and serve as collateral for the $184,920,000 in floating
rate notes outstanding at that date. Contractual maturities of the floating rate
notes and interest rates in effect at March 31, 2008 are presented on the
Portfolio of Investments. The average floating rate notes outstanding and
average interest and fee rate related to residual interests during the six
months ended March 31, 2008 were $214,900,714 and 4.44%, respectively.
36
VAN KAMPEN INSURED TAX FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2008 (UNAUDITED) continued
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.......................................... 0.525%
Next $500 million........................................... 0.500%
Next $500 million........................................... 0.475%
Over $1.5 billion........................................... 0.450%
</Table>
For the six months ended March 31, 2008, the Fund recognized expenses of
approximately $18,600 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,
2008, the Fund recognized expenses of approximately $48,700 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, 2008, the Fund recognized expenses of approximately $166,600
representing transfer agency fees paid to VKIS and its affiliates. The 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 $272,637 are included in
"Other" assets on the Statement of Assets and Liabilities at March 31, 2008.
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, 2008, Van Kampen, as Distributor for the
Fund, received commissions on sales of the Fund's Class A Shares of
approximately $46,600 and
37
VAN KAMPEN INSURED TAX FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2008 (UNAUDITED) continued
contingent deferred sales charge (CDSC) on redeemed shares of approximately
$28,200. Sales charges do not represent expenses of the Fund.
3. CAPITAL TRANSACTIONS
For the six months ended March 31, 2008 and the year ended September 30, 2007,
transactions were as follows:
<Table>
<Caption>
FOR THE FOR THE
SIX MONTHS ENDED YEAR ENDED
MARCH 31, 2008 SEPTEMBER 30, 2007
-------------------------- ---------------------------
SHARES VALUE SHARES VALUE
Sales:
Class A.......................... 1,667,388 $ 28,875,856 3,029,192 $ 55,440,204
Class B.......................... 59,832 1,028,889 119,180 2,169,642
Class C.......................... 157,549 2,730,000 202,348 3,648,363
Class I.......................... 729 12,694 26,658 491,890
---------- ------------ ---------- -------------
Total Sales........................ 1,885,498 $ 32,647,439 3,377,378 $ 61,750,099
========== ============ ========== =============
Dividend Reinvestment:
Class A.......................... 970,650 $ 16,555,369 1,901,728 $ 34,806,744
Class B.......................... 20,778 353,965 48,204 882,182
Class C.......................... 13,364 227,233 26,612 486,151
Class I.......................... 1,369 23,358 5,217 95,816
---------- ------------ ---------- -------------
Total Dividend Reinvestment........ 1,006,161 $ 17,159,925 1,981,761 $ 36,270,893
========== ============ ========== =============
Repurchases:
Class A.......................... (4,507,412) $(78,085,656) (7,320,562) $(133,746,892)
Class B.......................... (264,767) (4,563,296) (788,918) (14,359,946)
Class C.......................... (165,149) (2,832,914) (301,386) (5,496,161)
Class I.......................... (4,569) (79,182) (102,322) (1,856,172)
---------- ------------ ---------- -------------
Total Repurchases.................. (4,941,897) $(85,561,048) (8,513,188) $(155,459,171)
========== ============ ========== =============
</Table>
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 and allocated on a pro rata basis to
each class of shares. For the six months ended March 31, 2008, the Fund received
redemption fees of approximately $1,400, 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 $290,184,906 and $380,644,653,
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.
38
VAN KAMPEN INSURED TAX FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2008 (UNAUDITED) continued
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 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 this instance, 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 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, 2008,
were as follows:
<Table>
<Caption>
CONTRACTS
Outstanding at September 30, 2007........................... 1,926
Futures Opened.............................................. 2,029
Futures Closed.............................................. (3,955)
------
Outstanding at March 31, 2008............................... 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.
39
VAN KAMPEN INSURED TAX FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2008 (UNAUDITED) continued
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
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 $719,900 and $56,000
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.
40
VAN KAMPEN INSURED TAX FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2008 (UNAUDITED) continued
9. ACCOUNTING PRONOUNCEMENT
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. As of March 31, 2008, the Adviser does not believe the adoption of
SFAS 157 will impact the amounts reported in the financial statements, however,
additional disclosures will be required about the inputs used to develop the
measurements of fair value and the effect of certain measurements reported on
the Statement of Operations for a fiscal period.
41
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
KEVIN KLINGERT
Vice President
AMY R. DOBERMAN
Vice President
STEFANIE V. CHANG
Vice President and Secretary
JOHN L. SULLIVAN
Chief Compliance Officer
STUART N. SCHULDT
Chief Financial Officer and Treasurer
INVESTMENT ADVISER
VAN KAMPEN ASSET MANAGEMENT
522 Fifth Avenue
New York, New York 10036
DISTRIBUTOR
VAN KAMPEN FUNDS INC.
522 Fifth Avenue
New York, New York 10036
SHAREHOLDER SERVICING AGENT
VAN KAMPEN INVESTOR SERVICES INC.
P.O. Box 219286
Kansas City, Missouri 64121-9286
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.
42
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
agreements with
(continued on back)
Van Kampen Insured 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.
522 Fifth Avenue
New York, New York 10036
www.vankampen.com
Copyright (C)2008 Van Kampen Funds Inc.
All rights reserved. Member FINRA/SIPC.
32, 332, 532, 632
TFINSAN 5/08
(VAN KAMPEN INVESTMENTS LOGO) IU08-02902P-Y03/08
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, 2008.
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
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 3/31/08
<Table>
<Caption>
A SHARES B SHARES C SHARES I SHARES
6/28/85 4/30/93 8/13/93 since 12/19/07
- ----------------------------------------------------------------------------------------------
W/ MAX W/MAX W/ MAX
W/O 4.75% W/O 4.00% W/O 1.00% W/O
AVERAGE ANNUAL SALES SALES SALES SALES SALES SALES SALES
TOTAL RETURNS CHARGES CHARGES CHARGES CHARGES CHARGES CHARGES CHARGES
Since Inception 5.98% 5.76% 4.19% 4.19% 3.88% 3.88% -2.97%
10-year 3.42 2.92 2.80 2.80 2.72 2.72 --
5-year 3.97 2.95 3.21 2.96 3.19 3.19 --
1-year -7.76 -12.14 -8.39 -11.89 -8.40 -9.28 --
6-month -5.38 -9.90 -5.66 -9.35 -5.70 -6.62 --
- ----------------------------------------------------------------------------------------------
30 day SEC Yield 5.55% 5.08% 5.08% 6.05%
</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. 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, (iii) qualified state tuition plan
(529 plan) accounts, (iv) institutional clients with assets of at least $1
million and (v) certain Van Kampen investment companies. 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. Periods less than one year are
not annualized. 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, 2008
MARKET CONDITIONS
The financial markets experienced significant volatility throughout the
six-month reporting period, as many large banks and financial firms began
writing down mortgage-related losses, and liquidity and credit availability
became even more restricted. At the same time, the pace of economic growth began
to slow, with gross domestic product (GDP) growth measuring an anemic 0.6
percent for the fourth quarter of 2007. As weaker economic data was released in
the first quarter of 2008, fears of recession grew and consumer confidence
waned, prompting investors to continue to seek out the relative safety of high
quality Treasury securities over other sectors of the fixed income market.
The municipal bond market faced additional headwinds as various monoline bond
insurers experienced credit rating downgrades and the auction rate and variable
rate markets deteriorated. As a result, the municipal market underperformed
Treasuries for the overall period, with municipal bond prices reaching
historically attractive levels relative to Treasury bonds in the first quarter
of 2008. While yields on short-dated municipal securities declined, yields on
intermediate- and long-dated securities rose, leading to the steepest yield
curve in the past four years as the spread between one-year and 30-year
maturities reached 343 basis points. After a record year for new municipal bond
issuance in 2007, the amount of new issues coming to market in the first quarter
of 2008 declined by roughly 25 percent, due in large part to a substantial drop
in refunding issuance.
The Federal Reserve (the "Fed") took various steps to ease the liquidity crisis
and boost the economy during the period. Not only did the Federal Open Market
Committee reduce the target federal funds rate from 4.75 percent to 2.25 percent
by the end of the period, but in an unprecedented move, the Fed granted primary
brokerage firms access to its discount window and loosened its collateral
requirements, extending loans of Treasury securities in exchange for lower
quality, less liquid securities. Finally, in the biggest headline event, the Fed
arranged and supported JP Morgan Chase's purchase of Bear Stearns, which was
viewed by many as necessary to avoid serious market repercussions had the firm
failed.
2
PERFORMANCE ANALYSIS
Class A, B and C shares classes of Van Kampen Strategic Municipal Income Fund
underperformed the Lehman Brothers Municipal Bond Index for the six months ended
March 31, 2008, assuming no deduction of applicable sales charges.
TOTAL RETURNS FOR THE SIX-MONTH PERIOD ENDED MARCH 31, 2008
<Table>
<Caption>
- ------------------------------------------------------------------------
LEHMAN BROTHERS
CLASS A CLASS B CLASS C CLASS I MUNICIPAL BOND INDEX
-5.38% -5.66% -5.70% N/A 0.75%
- ------------------------------------------------------------------------
</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.
Although the municipal market rebounded in the last month of the reporting
period and outperformed Treasuries, it was an extremely difficult period
overall, particularly for higher-yielding, lower-rated bonds as the market-wide
flight to quality put considerable pressure on their prices. The Fund invests
approximately 50 percent of its assets in lower- and non-rated securities,
whereas the Lehman Brothers Municipal Bond Index is comprised entirely of
investment-grade issues. As such, the Fund's allocation to high yield bonds was
the primary reason for its relative underperformance.
Holdings in various sectors also detracted from relative performance. In
particular, the Fund's allocations to health care, life care, and special tax
district bonds held back returns as spreads in the sectors moved considerably
wider for the period. Additionally, spread widening in the tobacco sector
hindered performance, though to a lesser extent given the Fund's relatively
small allocation to these securities. The Fund's holdings in inverse
floating-rate securities*, some of which had exposure to the insured municipal
market, also held back returns. Inverse floating-rate securities offer the
benefit of higher yields but are also highly sensitive to interest rate changes.
As such, the rise in municipal interest rates during the period, coupled with
the downgrading of various monoline bond insurers, hurt the performance of these
securities. We did, however, trim the Fund's allocation here, which helped to
reduce volatility in the portfolio and to manage shareholder cash flows.
The Fund's holdings in pre-refunded bonds, however, were additive to returns for
the period. These short-maturity securities performed well as declining yields
on the front end of the curve boosted prices.
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.
3
<Table>
<Caption>
RATINGS ALLOCATION AS OF 3/31/08
AAA/Aaa 10.0%
AA/Aa 1.7
A/A 6.7
BBB/Baa 8.8
BB/Ba 3.6
B/B 0.4
Non-Rated 68.8
<Caption>
TOP FIVE SECTORS AS OF 3/31/08
Hospital 20.7%
Special Tax Districts 18.9
Life Care 17.4
Master Tobacco Settlement 5.6
Assisted Living 3.7
<Caption>
SUMMARY OF INVESTMENTS BY STATE CLASSIFICATION AS OF 3/31/08
Florida 14.8%
Illinois 9.9
California 8.6
Texas 8.0
Minnesota 6.5
Pennsylvania 5.5
Ohio 5.2
New York 4.6
Tennessee 4.1
Virginia 3.2
Colorado 3.0
Missouri 3.0
Arizona 2.9
Michigan 2.7
Maryland 2.4
New Jersey 1.9
Massachusetts 1.8
Georgia 1.8
Oklahoma 1.5
Indiana 1.4
Iowa 1.3
South Carolina 1.3
Alabama 1.2
Washington 1.1
Wisconsin 1.1
Louisiana 0.9
Oregon 0.7
Nevada 0.7
New Mexico 0.6
Idaho 0.5
South Dakota 0.5
Connecticut 0.5
Hawaii 0.4
Kansas 0.3
Rhode Island 0.3
</Table>
<Table>
(continued on next page)
</Table>
4
<Table>
<Caption>
SUMMARY OF INVESTMENTS BY STATE CLASSIFICATION AS OF 3/31/08
(continued from previous page)
Alaska 0.3
New Hampshire 0.3
District of Columbia 0.3
Wyoming 0.3
Mississippi 0.3
Vermont 0.3
U.S. Virgin Islands 0.3
Utah 0.2
Montana 0.2
Delaware 0.2
North Carolina 0.2
West Virginia 0.2
North Dakota 0.1
Puerto Rico 0.0*
-----
Total Long-Term Investments 107.4
Short-Term Investments 0.7
-----
Total Investments 108.1
Liability for Floating Rate Note Obligations Related to
Securities Held (7.2)
-----
Net Investment 100.9
Liabilities in Excess of Other Assets (0.9)
-----
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 are as a percentage
of long-term investments. Sectors are as a percentage of total 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.
Ratings allocation based upon ratings as issued by Standard and 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 email 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 P.O.
Box 219286, Kansas City, MO 64121-9286. 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 10/1/07 - 3/31/08.
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*
-------------------------------------------------
10/1/07 3/31/08 10/1/07-3/31/08
Class A
Actual..................................... $1,000.00 $ 946.22 $ 6.71
Hypothetical............................... 1,000.00 1,018.10 6.96
(5% annual return before expenses)
Class B
Actual..................................... 1,000.00 943.36 10.35
Hypothetical............................... 1,000.00 1,014.35 10.73
(5% annual return before expenses)
Class C
Actual..................................... 1,000.00 943.03 10.35
Hypothetical............................... 1,000.00 1,014.35 10.73
(5% annual return before expenses)
Class I
Actual..................................... 1,000.00 970.27 2.97
Hypothetical............................... 1,000.00 1,019.25 5.81
(5% annual return before expenses)
</Table>
* Expenses are equal to the Fund's annualized expense ratio of 1.38%, 2.13%,
2.13% and 1.15% for Class A, B, C and I Shares, respectively, multiplied by
the average account value over the period, multiplied by 183/366 (to reflect
the one-half year period) except for Class I Shares actual information which
reflects the period from Commencement of Operations through March 31, 2008.
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*
-------------------------------------------------
10/1/07 3/31/08 10/1/07-3/31/08
Class A
Actual..................................... $1,000.00 $ 946.22 $4.09
Hypothetical............................... 1,000.00 1,020.80 4.24
(5% annual return before expenses)
Class B
Actual..................................... 1,000.00 943.36 7.72
Hypothetical............................... 1,000.00 1,017.05 8.02
(5% annual return before expenses)
Class C
Actual..................................... 1,000.00 943.03 7.72
Hypothetical............................... 1,000.00 1,017.05 8.02
(5% annual return before expenses)
Class I
Actual..................................... 1,000.00 970.27 1.58
Hypothetical............................... 1,000.00 1,021.95 3.08
(5% annual return before expenses)
</Table>
* Expenses are equal to the Fund's annualized expense ratio of 0.84%, 1.59%,
1.59% and 0.61%, for Class A, B, C and I Shares, respectively, multiplied by
the average account value over the period, multiplied by 183/366 (to reflect
the one-half year period) except for Class I Shares actual information which
reflects the period from Commencement of Operations through March 31, 2008.
Assumes all dividends and distributions were reinvested.
9
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED)
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------
MUNICIPAL BONDS 107.4%
ALABAMA 1.2%
$ 1,500 Alexander City, AL Spl Care Fac Fin Auth
Med Fac Rev Russell Hosp Corp Ser A....... 5.750% 12/01/36 $ 1,392,900
1,000 Butler, AL Indl Dev Brd Solid Waste Disp
Rev Rfdg GA Pacific Corp Proj (AMT)....... 5.750 09/01/28 813,580
1,500 Colbert Cnty Northwest Auth Hlthcare
Fac....................................... 5.750 06/01/27 1,418,340
5,000 Healthcare Auth for Baptist Hlth AL Ars
Ser B (a) (n)............................. 6.750 11/15/37 5,000,000
1,000 Huntsville Redstone Vlg, AL Spl Care Fac
Fin Auth Redstone Vlg Proj................ 5.500 01/01/28 868,040
3,785 Huntsville Redstone Vlg, AL Spl Care Fac
Fin Auth Redstone Vlg Proj................ 5.500 01/01/43 3,138,257
250 Huntsville Redstone Vlg, AL Spl Care Fac
Fin Auth Ser A (Prerefunded @ 12/01/12)... 8.250 12/01/32 309,042
2,500 Huntsville/Carlton Cove, AL Carlton Cove
Inc Proj Ser A (b)........................ 7.000/4.375 11/15/17 1,187,275
3 Mobile, AL Indl Dev Brd Solid Waste Disp
Rev Mobile Energy Svc Co Proj Rfdg........ 6.950 01/01/20 288
1,395 Valley, AL Spl Care Fac Fin Auth Rev
Lanier Mem Hosp Ser A..................... 5.600 11/01/16 1,401,947
1,750 Valley, AL Spl Care Fac Fin Auth Rev
Lanier Mem Hosp Ser A..................... 5.650 11/01/22 1,676,343
--------------
17,206,012
--------------
ALASKA 0.3%
1,000 Alaska Indl Dev & Expt Auth Williams Lynxs
AK Cargoport (AMT) (Acquired 05/17/01,
$1,000,000) (c)........................... 7.800 05/01/14 1,038,490
3,670 Juneau, AK City & Borough Rev Saint Ann's
Care Ctr Proj............................. 6.875 12/01/25 3,614,289
--------------
4,652,779
--------------
ARIZONA 2.9%
1,000 Arizona Hlth Fac Auth Rev Terraces Proj
Ser A (Prerefunded @ 11/15/13)............ 7.500 11/15/23 1,175,920
1,250 Arizona Hlth Fac Auth Rev Terraces Proj
Ser A (Prerefunded @ 11/15/13)............ 7.750 11/15/33 1,538,425
5,525 Cochise Cnty, AZ Indl Dev Sierra Vista
Cmnty Hosp Rfdg Ser A..................... 6.750 12/01/26 5,555,664
500 Flagstaff, AZ Indl Dev Auth Rev Living
Cmnty Northn Cmnty Proj (Prerefunded @
3/01/13).................................. 6.300 09/01/38 519,045
2,700 Flagstaff, AZ Indl Dev Auth Rev Rfdg Sr
Living Cmnty Northn AZ.................... 5.700 07/01/42 2,289,357
970 Flagstaff, AZ Indl Dev Auth Rev Sr Living
Cmnty Northn AZ Proj (Prerefunded @
3/01/13).................................. 7.500 03/01/35 1,179,142
4,000 Maricopa Cnty, AZ Hlth Fac Rev Catholic
Hlthcare West Ser A....................... 5.500 07/01/26 4,051,280
</Table>
10 See Notes to Financial Statements
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------
ARIZONA (CONTINUED)
$ 1,500 Peoria, AZ Indl Dev Auth Rev Sierra Winds
Life Rfdg Ser A........................... 6.375% 08/15/29 $ 1,497,255
2,525 Pima Cnty, AZ Indl Dev Auth Ed Rev Fac
Choice Ed & Dev Corp Proj................. 6.250 06/01/26 2,407,613
1,590 Pima Cnty, AZ Indl Dev Auth Ed Rev Fac PLC
Charter Schs Proj......................... 6.500 04/01/26 1,548,135
2,805 Pima Cnty, AZ Indl Dev Auth Ed Rev Fac PLC
Charter Schs Proj......................... 6.750 04/01/36 2,744,664
4,225 Pima Cnty, AZ Indl Dev Auth Ed Rev Fac
Premier & Air Co.......................... 7.000 09/01/35 3,760,081
1,865 Pima Cnty, AZ Indl Dev Auth Ed Rev
Milestones Charter Sch Proj............... 6.750 11/01/33 1,717,572
800 Pima Cnty, AZ Indl Dev Auth Fac Skyline
Tech High Sch Proj........................ 7.500 02/01/34 738,136
6,000 Pima Cnty, AZ Indl Dev Auth Lease Rev
Constellation Schs Proj................... 7.000 01/01/38 5,586,780
1,000 Pima Cnty, AZ Indl Dev Auth Rev La Posada
at Pk Ctr Ser A........................... 7.000 05/15/27 1,006,890
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)
(c)....................................... 5.600 12/01/22 1,757,280
775 Red Hawk Canyon Cmnty Fac Dist No 2 AZ
Dist Assmt Rev Ser A...................... 6.500 12/01/12 828,599
1,995 Tucson, AZ Multi-Family Rev Hsg Catalina
Asstd Living Ser A (AMT).................. 6.500 07/01/31 1,536,429
--------------
41,438,267
--------------
CALIFORNIA 8.6%
1,000 ABAG Fin Auth Nonprofit Corp
CA Amern Baptist Homes Rfdg Ser A......... 5.850 10/01/27 995,860
1,000 Beaumont, CA Fin Auth Loc Agy Ser A....... 5.600 09/01/25 935,870
2,000 Beaumont, CA Fin Auth Loc Agy Ser A....... 5.650 09/01/30 1,821,940
2,000 Beaumont, CA Fin Auth Loc Agy Ser A....... 5.700 09/01/35 1,803,620
1,000 Beaumont, CA Fin Auth Loc Agy Ser D....... 5.800 09/01/35 915,050
1,000 Blythe, CA Redev Agy Proj................. 5.750 05/01/34 911,550
10,000 California Hlth Fac Fin Auth Rev Rfdg
Cedars Sinai Med Ctr...................... 5.000 11/15/34 9,391,000
1,000 California Statewide Cmnty Dev Auth Elder
Care Alliance Ser A
(Prerefunded @ 11/15/12).................. 8.250 11/15/32 1,231,180
915 California Statewide Cmnty Dev Auth Multi-
Family Rev Hsg Heritage Pointe Sr Apt Ser
QQ (AMT) (Prerefunded @ 4/01/08) (Acquired
02/19/02, Cost $912,713) (c).............. 7.500 10/01/26 942,450
2,500 California Statewide Cmnty Dev Auth Rev CA
Baptist Univ Ser A........................ 5.500 11/01/38 2,314,200
</Table>
See Notes to Financial Statements 11
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------
CALIFORNIA (CONTINUED)
$ 1,000 California Statewide Cmnty Dev Auth San
Francisco Art Institute (Acquired
07/05/02, Cost $1,000,000) (c)............ 7.375% 04/01/32 $ 1,021,300
4,000 California Statewide Cmntys Dev Auth Rev
Ars Insd Ser D (FSA Insd) (a) (n)......... 5.640 04/01/32 4,000,000
1,720 California Statewide Cmntys Dev Auth Rev
Lancer Ed Student Hsg Proj................ 5.625 06/01/33 1,586,425
2,735 California Statewide Cmntys Dev Auth Spl
Tax Cmnty Fac Dist 2007-1 Orinda.......... 6.000 09/01/29 2,609,764
1,000 Chino, CA Cmnty Fac Dist No 03 Impt
Area 1.................................... 5.700 09/01/29 934,490
1,500 Corona-Norco, CA Univ Sch Dist Pub Fin
Auth Spl Tax Rev Ser A.................... 5.800 09/01/35 1,372,575
1,435 Fairfield, CA Cmnty Fac Dist Spl Tax No
2007-1 Fairfield Commons (d).............. 6.500 09/01/23 1,430,064
1,530 Fairfield, CA Cmnty Fac Dist Spl Tax No
2007-1 Fairfield Commons (d).............. 6.875 09/01/38 1,516,766
2,000 Fontana, CA Spl Tax Cmnty Fac Dist No 22
Sierra Hills.............................. 6.000 09/01/34 1,870,840
2,300 Foothill/Eastern Tran Corridor Agy CA Toll
Rd Rev (MBIA Insd)........................ * 01/15/18 1,369,742
30,000 Golden St Tob Securitization Corp CA Tob
Settlement Rev Enhanced Asset Bk Ser A.... 5.000 06/01/45 26,897,100
1,750 Huntington Beach, CA Cmnty No 2003 1
Huntington Ctr............................ 5.800 09/01/23 1,758,732
2,000 Indio, CA Redev Agy Tax Alloc Sub Merged
Proj Area Ser B........................... 6.375 08/15/33 1,997,320
495 Indio, CA Redev Agy Tax Alloc Sub Merged
Proj Area Ser B........................... 6.500 08/15/34 497,896
1,000 Jurupa, CA Cmnty Svc Dist Spl Cmnty Fac
Dist No 4 Ser A........................... 5.700 09/01/34 904,340
2,500 Lake Elsinore, CA Spl Tax Cmnty Fac Dist 2
Area AA................................... 5.450 09/01/36 2,163,025
1,000 Lee Lake Wtr Dist CA Cmnty Fac Dist No 1
Spl Tax Sycamore Creek.................... 6.000 09/01/33 944,660
1,365 Millbrae, CA Residential Fac Rev Magnolia
of Millbrae Proj Ser A (AMT).............. 7.375 09/01/27 1,389,843
1,000 Murrieta, CA Cmnty Fac Dist No 2 the Oaks
Impt Area A............................... 5.900 09/01/27 944,270
1,000 Murrieta, CA Cmnty Fac Dist No 2 the Oaks
Impt Area A............................... 6.000 09/01/34 930,670
1,000 Murrieta, CA Cmnty Fac Dist No 2 the Oaks
Impt Area B............................... 6.000 09/01/27 955,290
3,000 Northstar Cmnty Svc Dist CA Spl Tax Cmnty
Fac Dist No 1............................. 5.450 09/01/28 2,762,400
</Table>
12 See Notes to Financial Statements
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------
CALIFORNIA (CONTINUED)
$ 1,000 Palmdale, CA Spl Tax Cmnty Fac 03-1
Anaverde A................................ 5.350% 09/01/30 $ 874,240
1,100 Palmdale, CA Spl Tax Cmnty Fac 03-1
Anaverde A................................ 5.400 09/01/35 947,881
1,000 Perris, CA Cmnty Fac Dist Spl Tax No 01-2
Ser A..................................... 6.375 09/01/32 999,930
2,500 Quechan Indian Tribe Ft Yuma Indian
Reservation CA & Govt Proj................ 7.000 12/01/27 2,441,850
2,000 Rancho Cordova Cmnty Fac Dist CA Spl Tax
No 2003 1 Sunridge Anatolia............... 5.500 09/01/37 1,740,220
2,000 Riverside, CA Univ Sch Dist Tax Cmnty Fac
Dist 15 Impt Area 1....................... 5.550 09/01/30 1,796,560
2,535 Sacramento Cnty, CA Spl Tax Cmnty Fac Dist
No 05-2 Ser A............................. 6.000 09/01/37 2,377,399
6,000 San Jose, CA Multi-Family Hsg Rev Helzer
Courts Apt Proj Ser A (AMT)............... 6.400 12/01/41 5,460,660
2,000 San Marcos, CA Pub Fac Auth Spl Tax Rev
Ser A..................................... 5.650 09/01/36 1,893,780
5,700 Silicon Vly Tob Securitization Auth CA Tob
Settlement Rev Cap Apprec Turbo Santa
Clara Ser A............................... * 06/01/36 762,660
4,645 Silicon Vly Tob Securitization Auth CA Tob
Settlement Rev Cap Apprec Turbo Santa
Clara Ser A............................... * 06/01/41 434,911
9,000 Silicon Vly Tob Securitization Auth CA Tob
Settlement Rev Cap Apprec Turbo Santa
Clara Ser A............................... * 06/01/47 546,930
22,500 Silicon Vly Tob Securitization Auth CA Tob
Settlement Rev Cap Apprec Turbo Santa
Clara Ser C............................... * 06/01/56 495,675
7,500 Silicon Vly Tob Securitization Auth CA Tob
Settlement Rev Cap Apprec Turbo Santa
Clara Ser D............................... * 06/01/56 131,100
3,000 Temecula, CA Pub Fin Auth Spl Tax
Roripaugh Cmnty Fac Dist 03-2............. 5.500 09/01/36 2,182,110
35,000 Tobacco Securitization Auth Southn CA Tob
Settlement Cabs First Sub................. * 06/01/46 2,284,450
27,200 Tobacco Securitization Auth Southn CA Tob
Settlement Cabs Second Sub................ * 06/01/46 1,619,488
47,000 Tobacco Securitization Auth Southn CA Tob
Settlement Cabs Third Sub................. * 06/01/46 2,286,550
1,000 Upland, CA Cmnty Fac Dist 2003 San Antonio
Impt Ser 1A............................... 5.900 09/01/24 1,007,990
1,500 Upland, CA Cmnty Fac Dist 2003 San Antonio
Impt Ser 1A............................... 6.000 09/01/34 1,496,955
1,885 Vallejo, CA Ctf Partn Touro Univ.......... 7.250 06/01/16 1,960,136
</Table>
See Notes to Financial Statements 13
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------
CALIFORNIA (CONTINUED)
$ 905 Vallejo, CA Pub Fin Auth Loc Hiddenbrooke
Impt Dist Ser A........................... 5.800% 09/01/31 $ 837,958
1,000 Woodland, CA Spl Tax Cmnty Fac Dist 1
Spring Lake............................... 6.250 09/01/34 980,310
1,800 Yuba City, CA Redev Agy Tax Proj Ser A.... 6.000 09/01/31 1,709,982
3,000 Yuba City, CA Redev Agy Tax Proj Ser A.... 6.000 09/01/39 2,809,440
--------------
121,199,397
--------------
COLORADO 3.0%
1,060 Beacon Pt Metro Dist CO Ser A............. 6.125 12/01/25 929,238
1,005 Beacon Pt Metro Dist CO Ser A............. 6.250 12/01/35 855,627
1,000 Bromley Pk Metro Dist CO No 2 Ser B
(Prerefunded @ 12/01/12).................. 8.050 12/01/32 1,229,810
1,000 Castle Oaks Metro Dist CO Ltd Tax......... 6.000 12/01/25 879,620
1,500 Castle Oaks Metro Dist CO Ltd Tax......... 6.125 12/01/35 1,241,955
1,700 Colorado Ed & Cultural Fac Auth Rev
Charter Sch Brighton Sch Proj............. 6.000 11/01/36 1,320,781
795 Colorado Ed & Cultural Fac Auth Rev
Charter Sch Frontier Academy
(Prerefunded @ 6/01/11)................... 7.250 06/01/20 878,698
980 Colorado Hlth Fac Auth Hlth & Residential
Care Fac Volunteers of Amer Care Ser A.... 5.300 07/01/37 805,442
3,000 Colorado Hlth Fac Auth Rev Amern Baptist
Home Ser A................................ 5.900 08/01/37 2,638,230
1,410 Confluence Metro Dist Colo Tax............ 5.400 12/01/27 1,232,143
1,000 Confluence Metro Dist Colo Tax............ 5.450 12/01/34 857,060
2,000 Copperleaf Metro Dist No 2 CO............. 5.950 12/01/36 1,629,540
2,500 Elk Vly, CO Pub Impt Fee Ser A............ 7.300 09/01/22 2,566,500
1,150 High Plains Metro Dist CO Ser A........... 6.125 12/01/25 970,198
2,250 High Plains Metro Dist CO Ser A........... 6.250 12/01/35 1,842,345
565 Lafayette, CO Indl Dev Rev Rocky Mtn Instr
Proj Ser A (e)............................ 6.750 10/01/14 472,086
1,880 Lafayette, CO Indl Dev Rev Rocky Mtn Instr
Proj Ser A (AMT).......................... 7.000 10/01/18 1,533,403
4,405 Lake Creek Affordable Hsg Corp Hsg Proj
Rfdg Ser A................................ 6.250 12/01/23 4,463,146
2,225 Lincoln Pk, CO Metro Dist Rfdg & Impt..... 6.125 12/01/30 2,212,629
1,665 Lincoln Pk, CO Metro Dist Rfdg & Impt..... 6.200 12/01/37 1,641,490
2,000 Montezuma Cnty, CO Hosp Dist Hlth Fac
Enterprise Hosp Rfdg...................... 5.900 10/01/37 1,770,040
500 Neu Towne, CO Metro Dist (b).............. 7.250/1.800 12/01/34 305,000
3,500 Northwest CO Metro Dist No 3 Ltd Tax...... 6.125 12/01/25 3,121,965
1,000 Serenity Ridge, CO Metro Dist No 2 (b).... 7.500/3.750 12/01/34 753,950
1,555 Skyland Metro Dist CO Gunnison Cnty
Rfdg...................................... 6.750 12/01/22 1,561,251
1,000 Southlands Metro Dist No 1 CO (Prerefunded
@ 12/01/14)............................... 7.000 12/01/24 1,212,800
</Table>
14 See Notes to Financial Statements
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------
COLORADO (CONTINUED)
$ 3,500 Tallgrass Met Dist CO Rfdg & Impt......... 5.250% 12/01/37 $ 2,802,275
1,000 Vista Ridge Met Dist CO Rfdg Ltd Tax
Sub Ser B................................. 6.625 12/01/40 919,180
--------------
42,646,402
--------------
CONNECTICUT 0.5%
1,500 Connecticut St Dev Auth Indl Afco Cargo
Bdlg LLC Proj (AMT)....................... 8.000 04/01/30 1,551,270
3,500 Mohegan Tribe Indians CT Pub Impt Priority
Dist (f).................................. 5.250 01/01/33 2,917,950
2,000 Mohegan Tribe Indians CT Pub Impt Priority
Dist (Acquired 09/27/01, Cost $1,955,120)
(c)....................................... 6.250 01/01/31 1,918,120
--------------
6,387,340
--------------
DELAWARE 0.2%
850 Sussex Cnty, DE Rev Adj First Mtg Cadbury
Lewes Ser A............................... 5.900 01/01/26 783,301
1,000 Sussex Cnty, DE Rev Adj First Mtg Cadbury
Lewes Ser A............................... 6.000 01/01/35 897,950
1,040 Wilmington, DE Multi-Family Rent Rev Hsg
Electra Arms Sr Assoc Proj (AMT).......... 6.250 06/01/28 972,743
--------------
2,653,994
--------------
DISTRICT OF COLUMBIA 0.3%
85 District of Columbia Prerefunded Rfdg Ser
A1 (MBIA Insd) (g)........................ 6.500 06/01/10 92,471
1,000 District of Columbia Rev Methodist Home
Issue..................................... 6.000 01/01/29 921,490
13,940 District of Columbia Tob Settlement Fin
Corp Ser A................................ * 06/15/46 849,225
17,500 District of Columbia Tob Settlement Fin
Corp Ser B................................ * 06/15/46 983,150
67,660 District of Columbia Tob Settlement Fin
Corp Ser C................................ * 06/15/55 1,608,278
--------------
4,454,614
--------------
FLORIDA 14.8%
4,500 Alachua Cnty, FL Indl Dev Rev North FL
Retirement Vlg............................ 5.875 11/15/42 3,968,325
970 Anthem Pk Cmnty Dev Dist FL Cap
Impt Rev.................................. 5.800 05/01/36 825,121
2,000 Bainebridge Cmnty Dev Dist FL Spl Assmt... 5.500 05/01/38 1,597,180
2,500 Bartram Pk Cmnty Dev Dist FL Assmt........ 5.400 05/01/37 1,968,525
1,350 Bay Laurel Ctr Cmnty Dev Dist FL Spl Assmt
Candler................................... 5.450 05/01/37 1,071,225
1,500 Beacon Lakes, FL Cmnty Dev FL Spl Assmt
Ser A..................................... 6.000 05/01/38 1,286,970
1,500 Beacon Lakes, FL Cmnty Dev FL Spl Assmt
Sub Ser B................................. 6.200 05/01/38 1,289,550
</Table>
See Notes to Financial Statements 15
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------
FLORIDA (CONTINUED)
$ 1,320 Beeline Cmnty Dev Dist FL Spl Assmt Ser
A......................................... 7.000% 05/01/37 $ 1,343,364
1,000 Bellalago Ed Fac Benefits Ser A........... 6.000 05/01/33 885,180
955 Bellalago Ed Fac Benefits Ser B........... 5.800 05/01/34 819,944
4,205 Bloomingdale, FL Cmnty Dev Dist Spl Assmt
Rev....................................... 5.875 05/01/36 3,770,708
970 Bluewaters Cmnty Dev Dist of FL........... 6.000 05/01/35 917,348
1,780 Boca Raton, FL Hsg Auth Mtg Hsg First Lien
Banyan Pl Sr Apts Rfdg (Acquired 03/23/06,
Cost $1,811,556) (c)...................... 5.800 10/01/26 1,569,871
2,350 Boca Raton, FL Hsg Auth Mtg Hsg First Lien
Banyan Pl Sr Apts Rfdg (Acquired 03/23/06,
Cost $2,317,265) (c)...................... 5.900 10/01/36 2,061,584
2,500 Bonnet Creek Resort Cmnty Dev............. 7.500 05/01/34 2,568,025
20,000 Brevard Cnty, FL Hlth Fac Auth Hlthcare
Fac Rev Hlth First Inc Proj............... 5.000 04/01/34 18,341,400
2,000 Brevard Cnty, FL Hlth Fac Auth Residential
Care Fac Rev Buena Vida Estates Inc. ..... 6.750 01/01/37 1,953,880
775 Caribe Palm Cmnty Dev Dist FL Spl Assmt
Ser A..................................... 5.850 05/01/35 726,578
3,000 City Ctr Cmnty Dev Dist FL Spl Assmt
Rev Ser A................................. 6.000 05/01/38 2,657,610
810 City Ctr Cmnty Dev Dist FL Spl Assmt
Rev Ser A................................. 6.125 05/01/36 732,037
910 Escambia Cnty, FL Rev ICF/MR Pensacola
Care Dev Ctr.............................. 10.250 07/01/11 916,597
2,135 Escambia Cnty, FL Rev ICF/MR Pensacola
Care Dev Ctr Ser A........................ 10.250 07/01/11 2,150,479
5,000 Fiddlers Creek Cmnty Dev Dist............. 6.000 05/01/38 4,322,700
2,485 Florida Hsg Fin Corp Multi-Family Hsg
Whistlers Cove Apt Proj (AMT)............. 6.500 01/01/39 2,335,975
3,585 Florida Hsg Fin Corp Rev Hsg Beacon Hill
Apt Ser C (AMT)........................... 6.610 07/01/38 3,593,783
6,950 Florida Hsg Fin Corp Rev Hsg Cypress Trace
Apt Ser G (AMT)........................... 6.600 07/01/38 6,838,661
4,690 Florida Hsg Fin Corp Rev Hsg Westchase Apt
Ser B (AMT)............................... 6.610 07/01/38 4,569,561
2,450 Gramercy Farms Cmnty Dev Dist FL Spl Assmt
Ser A1.................................... 5.250 05/01/39 1,868,444
2,100 Gramercy Farms Cmnty Dev Dist FL Spl Assmt
Ser B..................................... 5.100 05/01/14 1,901,550
4,000 Grand Bay at Doral Cmnty Dev Dist FL
Ser B..................................... 6.000 05/01/17 3,694,960
19,750 Halifax Hosp Med Ctr FL Hosp Rev Rfdg &
Impt Ser A (h)............................ 5.375 06/01/46 17,703,258
2,445 Hammock Bay Cmnty Dev Dist FL Spl Assmt
Rev Ser A................................. 6.125 05/01/35 2,366,467
</Table>
16 See Notes to Financial Statements
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------
FLORIDA (CONTINUED)
$ 1,435 Harbour Isles Cmnty Dev Dist of FL........ 6.125% 05/01/35 $ 1,252,942
1,450 Hawks Pt Cmnty Dev Dist FL Spl Assmt
Hawk's Point Cmnty Dev A.................. 5.300 05/01/39 1,114,804
280 Heritage Harbor Cmnty Dev Dist FL
Rev Rec................................... 7.750 05/01/23 280,669
745 Heritage Harbor Cmnty Dev Dist FL Rev Spl
Assmt Ser A............................... 6.700 05/01/19 745,484
1,950 Highlands, FL Cmnty Dev Dist Spl Assmt.... 5.550 05/01/36 1,541,923
3,500 Hillsborough Cnty, FL Hsg Fin Hsg Clipper
Cove Apt Proj Ser A (AMT)................. 7.375 07/01/40 3,592,750
960 Islands at Doral III Cmnty 2004 Ser A..... 5.900 05/01/35 756,854
1,000 Islands at Doral NE Cmnty Dev............. 6.250 05/01/34 989,150
2,200 Jacksonville, FL Econ Dev Commn Hlthcare
Fac Rev Rfdg FL Proton Therapy Inst A
(Acquired 08/09/07, Cost $2,224,420)
(c)....................................... 6.250 09/01/27 2,122,076
1,510 Kendall Breeze West Cmnty Dev Dist FL Spl
Assmt (e)................................. 5.875 05/01/34 1,366,731
1,920 Keys Cove Cmnty Dev Dist FL Assmt Rev..... 5.875 05/01/35 1,818,067
2,855 Keys Cove Cmnty Dev Dist II FL............ 5.500 05/01/36 2,294,820
1,000 Lakeside Landings Cmnty Dev Dist FL Spl
Assmt Ser A............................... 5.500 05/01/38 795,510
2,000 Lakeside Landings Cmnty Dev Dist FL Spl
Assmt Ser B............................... 5.250 05/01/13 1,850,300
4,000 Landmark at Doral Cmnty Dev Dist FL Spl
Assmt Ser A............................... 5.500 05/01/38 2,917,160
2,475 Landmark at Doral Cmnty Dev Dist FL Spl
Assmt Ser B............................... 5.200 05/01/15 2,121,298
2,000 Lee Cnty, FL Indl Dev Auth Hlthcare Fac
Rev Cypress Cove Hlthpk Ser A............. 6.750 10/01/32 2,032,500
1,500 Lee Cnty, FL Indl Dev Auth Indl Dev Rev
Lee Charter Fndtn Ser A................... 5.250 06/15/27 1,253,295
1,500 Lee Cnty, FL Indl Dev Auth Indl Dev Rev
Lee Charter Fndtn Ser A................... 5.375 06/15/37 1,202,205
3,360 Leon Cnty, FL Ed Fac Auth Rev Southgate
Residence Hall Rfdg Ser A................. 6.750 09/01/28 3,377,942
1,220 Lexington Cmnty Dev Dist FL............... 6.125 05/01/34 1,173,896
2,330 Meadow Woods Cmnty Dev Dist FL Ser A...... 6.050 05/01/35 2,003,870
1,000 Miami Beach, FL Hlth Fac Auth Hosp Rev Mt
Sinai Med Ctr FL Proj..................... 5.375 11/15/28 860,950
2,500 Miami Beach, FL Hlth Fac Auth Hosp Rev
Rfdg Mt Sinai Med Ctr FL (Acquired
04/26/04, Cost $2,411,600) (c)............ 6.750 11/15/29 2,507,000
2,970 Midtown Miami, FL Cmnty Dev FL Spl Assmt
Rev Ser A................................. 6.000 05/01/24 2,765,634
1,465 Midtown Miami, FL Cmnty Dev FL Spl Assmt
Rev Ser A................................. 6.250 05/01/37 1,369,482
</Table>
See Notes to Financial Statements 17
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------
FLORIDA (CONTINUED)
$ 890 Miromar Lakes Cmnty Dev Dist Rfdg Ser B... 7.250% 05/01/12 $ 929,863
860 Northern Palm Beach Cnty Impt Dist FL Impt
Wtr Ctl & Impt Unit Dev No 16 Rfdg........ 7.500 08/01/24 875,652
1,705 Oak Creek Cmnty Dev Dist FL Spl Assmt..... 5.800 05/01/35 1,536,785
1,000 Orange Cnty, FL Hlth Fac Auth Rev Hosp
Adventist Hlth Sys (Prerefunded @
11/15/10)................................. 6.375 11/15/20 1,104,670
2,000 Orange Cnty, FL Hlth Fac Auth Rev
Westminster Cmnty Care.................... 6.600 04/01/24 2,016,340
960 Overoaks, FL Cmnty Dev Dist Cap Impt Rev
Ser A..................................... 6.125 05/01/35 840,365
4,935 Palm Coast Pk Cmnty Dev Dist FL Spl Assmt
Rev....................................... 5.700 05/01/37 4,004,999
955 Parklands Lee Cmnty Dev Dist FL Spl Assmt
Ser A..................................... 5.800 05/01/35 834,804
965 Pine Island Cmnty Dev Dist FL Spl Assmt... 5.750 05/01/35 889,952
3,000 Pinellas Cnty, FL Hlth Fac Auth Oaks of
Clearwtr Proj............................. 6.250 06/01/34 3,018,120
1,870 Reunion East Cmnty Dev Dist FL Spl
Assmt..................................... 5.800 05/01/36 1,555,167
1,975 Reunion West Cmnty Dev Dist FL Spl Assmt.. 6.250 05/01/36 1,748,290
940 Saddlebrook, FL Cmnty Ser A............... 6.900 05/01/33 959,120
1,600 Saint John's Cnty, FL Indl Dev Auth
Hlthcare Glenmoor Proj Ser A.............. 5.375 01/01/40 1,316,176
470 Saint John's Cnty, FL Indl Dev Auth
Hlthcare Glenmoor Saint John's Proj Ser A
(Prerefunded @ 1/01/10)................... 8.000 01/01/17 518,960
4,500 Saint John's Cnty, FL Indl Dev Auth
Hlthcare Glenmoor Saint John's Proj Ser A
(Prerefunded @ 1/01/10)................... 8.000 01/01/30 5,013,315
2,550 Sarasota Natl Cmnty Dev Dist FL Spl
Assmt..................................... 5.300 05/01/39 1,935,169
1,925 Silver Palms Cmnty Dev Dist (e)........... 5.900 05/01/34 1,750,479
1,500 Six Mile Creek Cmnty Dev Dist FL Cap
Impt Rev.................................. 5.875 05/01/38 1,168,860
1,300 South Dade Venture Cmnty Dev.............. 6.125 05/01/34 1,255,657
1,460 South Vlg Cmnty Dev Dist FL Cap Impt Rev
Ser A..................................... 5.700 05/01/35 1,237,803
1,000 Split Pine Cmnty Dev Dist FL Spl Assmt
Ser A..................................... 5.250 05/01/39 802,140
35 Stoneybrook West Cmnty Dev Dist FL Spl
Assmt Rev Ser B........................... 6.450 05/01/10 34,981
2,000 Sweetwater Creek Cmnty Dev Dist FL Cap
Impt Rev Ser A............................ 5.500 05/01/38 1,521,880
3,945 Tisons Landing Cmnty Dev Dist FL Spl Assmt
Ser A..................................... 5.625 05/01/37 3,173,950
4,160 Tolomato Cmnty Dev Dist FL Spl Assmt...... 6.650 05/01/40 4,086,659
1,465 Town Ctr at Palm Coast Cmnty Dev Dist FL
Cap Impt Rev.............................. 6.000 05/01/36 1,259,680
</Table>
18 See Notes to Financial Statements
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------
FLORIDA (CONTINUED)
$ 2,475 Treeline Presv Cmnty Dev Dist FL Spl Assmt
Ser A..................................... 6.800% 05/01/39 $ 2,304,968
3,790 Turnbull Creek Cmnty Dev Dist FL
Spl Assmt................................. 5.250 05/01/37 2,852,240
1,440 Turnbull Creek Cmnty Dev Dist FL
Spl Assmt................................. 5.800 05/01/35 1,191,557
1,497 University Square Cmnty Dev Dist FL Cap
Impt Rev (Acquired 10/07/99, Cost
$1,497,000) (c)........................... 6.750 05/01/20 1,523,662
1,970 West Vlgs Impt Dist FL Rev Spl Assmt Unit
of Dev No 3............................... 5.500 05/01/37 1,575,192
3,000 West Vlgs Impt Dist FL Rev West Vlg Imp
Dist...................................... 5.500 05/01/38 2,377,350
2,000 Winter Garden Vlg at Fowler Groves Cmnty
Dev Dist FL Spl........................... 5.650 05/01/37 1,702,220
920 World Comm Cmnty Dev Dist Ser A1.......... 6.250 05/01/22 875,739
1,650 World Comm Cmnty Dev Dist Ser A2.......... 6.125 05/01/35 1,476,535
--------------
207,993,471
--------------
GEORGIA 1.8%
1,680 Atlanta, GA Tax Alloc Atlantic Sta Proj
(Prerefunded @ 12/01/11).................. 7.750 12/01/14 1,901,004
3,675 Atlanta, GA Tax Alloc Princeton Lakes Proj
(Acquired 03/10/06, 04/11/07, 04/12/07,
Cost $3,717,165) (c)...................... 5.500 01/01/31 3,271,044
2,245 Atlanta, GA Urban Residential Fin Auth
Multi-Family Rev John Eagan Proj Ser A
(AMT)..................................... 6.750 07/01/30 2,251,870
1,000 Effingham Cnty, GA Dev Auth Solfort James
Proj (AMT)................................ 5.625 07/01/18 874,230
1,800 Fulton Cnty, GA Residential Care
Canterbury Court Proj Ser A............... 6.000 02/15/22 1,720,764
650 Fulton Cnty, GA Residential Care
Canterbury Crt Proj Ser A................. 6.125 02/15/34 600,925
3,500 Fulton Cnty, GA Residential Care Sr Lien
RHA Asstd Living Ser A.................... 7.000 07/01/29 3,444,420
1,950 Gwinnett Cnty, GA Hosp Auth Rev Antic Ctfs
Ars Gwinnett Hosp Sys Proj Ser E
(FSA Insd) (a) (n)........................ 7.000 07/01/34 1,950,000
1,000 Private Colleges & Univ Auth GA Mercer Hsg
Corp Proj Ser A........................... 6.000 06/01/21 1,030,670
2,930 Renaissance on Peachtree Unit Invt Tr Ctf
GA Custody Ctfs........................... 6.000 10/01/25 2,420,151
2,500 Rockdale Cnty, GA Dev Auth Proj Rev Visy
Paper Proj Ser A (AMT).................... 6.125 01/01/34 2,320,125
</Table>
See Notes to Financial Statements 19
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------
GEORGIA (CONTINUED)
$ 1,245 Savannah, GA Econ Dev Auth Rev First Mtg
Marshes of Skidaway A..................... 6.250% 01/01/12 $ 1,205,571
2,245 Savannah, GA Econ Dev Auth Rev First Mtg
Marshes of Skidaway A..................... 6.850 01/01/19 2,205,420
--------------
25,196,194
--------------
HAWAII 0.4%
2,500 Hawaii St Dept Budget & Fin Spl Purp Rev
Kahala Nui Proj Ser A..................... 8.000 11/15/33 2,729,250
2,825 Kuakini, HI Hlth Sys Spl Purp Rev Ser A... 6.375 07/01/32 2,864,946
--------------
5,594,196
--------------
IDAHO 0.5%
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)
(c)....................................... 7.500 11/01/24 1,928,753
2,505 Idaho Hlth Fac Auth Rev Rfdg Vly Vista
Care Corp................................. 6.125 11/15/37 2,278,623
3,000 Idaho Hlth Fac Auth Rev Rfdg Vly Vista
Care Ser A................................ 7.875 11/15/29 3,316,410
--------------
7,523,786
--------------
ILLINOIS 9.9%
2,300 Annawan, IL Tax Increment Rev Patriot
Renewable Fuels LLC Proj.................. 5.625 01/01/18 2,118,760
1,590 Bolingbrook, IL Cap Apprec Ser B (MBIA
Insd) (Prerefunded @ 1/01/09) (e)......... * 01/01/29 530,233
4,000 Bolingbrook, IL Sales Tax
Rev Bolingbrook (i)....................... 0.000/6.250 01/01/24 3,918,000
1,976 Bolingbrook, IL Spl Svc Area No 01 -1
(Prerefunded @ 7/01/11)................... 7.375 07/01/31 2,247,404
1,486 Bolingbrook, IL Spl Svc Area No 1 Spl Tax
Augusta Vlg Proj (Prerefunded @ 3/01/32)
(Acquired 11/13/02, Cost $1,486,000)
(c)....................................... 6.750 03/01/32 1,673,548
1,665 Bolingbrook, IL Spl Svc Area No 1 Spl Tax
Augusta Vlg Proj Ser 2004 (Prerefunded @
3/01/12).................................. 6.250 03/01/32 1,845,136
2,000 Bolingbrook, IL Spl Svc Area No 1 Spl Tax
Forest City Tax Proj (i).................. 0.000/5.900 03/01/27 1,934,660
1,874 Bolingbrook, IL Spl Svc Area No 3 Spl Tax
Lakewood Ridge Proj (Prerefunded @
3/01/11).................................. 7.050 03/01/31 2,092,190
910 Bolingbrook, IL Unrefunded Balance Cap
Apprec Ser B (MBIA Insd) (e).............. * 01/01/29 271,753
735 Cary, IL Spl Tax Svc Area No 1 Cambridge
Ser A (Prerefunded @ 3/01/10)............. 7.625 03/01/30 816,335
1,750 Chicago, IL Increment Alloc Rev Diversey
Narragansett Proj Nt...................... 7.460 02/15/26 1,779,190
</Table>
20 See Notes to Financial Statements
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------
ILLINOIS (CONTINUED)
$15,500 Chicago, IL O'Hare Intl Arpt Rev Rfdg Gen
Airport Third Lein Ser A2 (FSA Insd)
(AMT) (h)................................. 5.750% 01/01/19 $ 16,215,170
50 Chicago, IL Proj Rfdg Ser A (MBIA Insd)
(Prerefunded @ 1/01/11)................... 5.500 01/01/38 54,406
4,000 Chicago, IL Spl Assmt Lakeshore East
Proj...................................... 6.625 12/01/22 4,044,520
600 Chicago, IL Tax Increment Alloc Read
Dunning Ser B (ACA Insd).................. 7.250 01/01/14 606,834
1,925 Chicago, IL Tax Increment Alloc Sub Cent
Rev Loop Ser A (ACA Insd)................. 6.500 12/01/08 1,962,537
3,446 Cortland, IL Spl Tax Rev Sheaffer Sys Proj
(Acquired 05/02/06, Cost $3,446,000)
(c)....................................... 5.500 03/01/17 3,244,443
2,000 Deerfield, IL Ed Fac Chicagoland Jewish
High Sch Proj............................. 6.000 05/01/41 1,873,540
811 Gilberts, IL Spl Svc Area No 9 Spl Tax Big
Timber Proj (e) (g)....................... 7.375 03/01/11 876,488
1,245 Gilberts, IL Spl Svc Area No 9 Spl Tax Big
Timber Proj (Prerefunded @ 3/01/11)....... 7.750 03/01/27 1,440,477
1,500 Godfrey, IL Rev Utd Methodist Vlg Ser A... 5.875 11/15/29 1,103,550
1,270 Hampshire, IL Spl Svc Area No 16 Spl Tax
Crown Dev Proj Prairie Ridge Proj Ser A... 6.000 03/01/46 1,060,755
2,085 Hampshire, IL Spl Svc Area No 17 Spl Tax
Crown Dev Proj Oakstead Ser A............. 6.000 03/01/45 1,743,269
2,730 Hampshire, IL Spl Svc Area No 19 Spl Tax
Crown Dev Prairie Ridge East Ser A........ 6.000 03/01/46 2,280,205
2,700 Hoopeston, IL Hosp Cap Impt Rev Hoopeston
Cmnty Mem Hosp Impt & Rfdg................ 6.550 11/15/29 2,486,376
1,480 Huntley, IL Increment Alloc Rev Huntley
Redev Proj Ser A.......................... 8.500 12/01/15 1,486,512
2,000 Illinois Fin Auth Rev Central Baptist
Vlg....................................... 5.375 11/15/39 1,610,620
6,000 Illinois Fin Auth Rev Clare at Wtr Tower
Proj Ser A................................ 6.125 05/15/38 5,447,880
4,500 Illinois Fin Auth Rev Clare Oaks Proj Ser
A......................................... 6.000 11/15/39 3,952,800
1,310 Illinois Fin Auth Rev Cmnty Fac Clinic
Altgeld Proj.............................. 8.000 11/15/16 1,312,057
1,000 Illinois Fin Auth Rev Friendship Vlg
Schaumburg A.............................. 5.375 02/15/25 892,440
2,000 Illinois Fin Auth Rev Friendship Vlg
Schaumburg A.............................. 5.625 02/15/37 1,693,760
3,000 Illinois Fin Auth Rev Landing at Plymouth
Pl Proj Ser A............................. 6.000 05/15/37 2,698,860
3,300 Illinois Fin Auth Rev Luther Oaks Proj Ser
A......................................... 6.000 08/15/26 3,089,031
2,000 Illinois Fin Auth Rev Luther Oaks Proj Ser
A......................................... 6.000 08/15/39 1,804,080
1,000 Illinois Fin Auth Rev Montgomery Place
Proj...................................... 5.500 05/15/26 882,230
3,000 Illinois Fin Auth Rev Northwestern Mem
Hosp Ser A (Prerefunded @ 8/15/14)........ 5.500 08/15/43 3,399,030
</Table>
See Notes to Financial Statements 21
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------
ILLINOIS (CONTINUED)
$ 4,850 Illinois Fin Auth Rev Rfdg Christian Homes
Inc Ser A................................. 5.750% 05/15/26 $ 4,353,797
2,500 Illinois Fin Auth Rev Rfdg Fairview Oblig
Group Ser A............................... 6.250 08/15/35 2,366,975
1,500 Illinois Fin Auth Rev Three Crowns Pk
Plaza Ser A............................... 5.875 02/15/38 1,319,700
2,500 Illinois Hlth Fac Auth Rev Decatur
Mem Hosp.................................. 5.750 10/01/24 2,546,675
650 Illinois Hlth Fac Auth Rev Loyola Univ
Hlth Sys Ser A (Prerefunded @ 7/01/11).... 6.000 07/01/21 714,896
1,200 Illinois Hlth Fac Auth Rev Lutheran Sr
Ministries Oblig Ser A
(Prerefunded @ 8/15/11)................... 7.375 08/15/31 1,385,736
250 Illinois Hlth Fac Auth Rev Rfdg Ser A..... 6.200 08/15/23 241,412
1,125 Illinois Hlth Fac Auth Rev Rfdg Ser A..... 6.400 08/15/33 1,077,514
400 Illinois Hlth Fac Auth Rev Silver Cross... 5.500 08/15/19 407,292
80 Lake, Cook, Kane & McHenry Cntys, IL Cmnty
Unit Sch Dist No 22 (FGIC Insd)........... 5.750 12/01/19 83,989
2,172 Manhattan, IL No 04-1 Brookstone
Springs Proj.............................. 6.100 03/01/35 2,019,243
981 Minooka, IL Spl Assmt Impt Lakewood Trails
Unit 2 Proj............................... 6.375 03/01/34 968,688
1,180 Montgomery, IL Spl Assmt Impt Lakewood
Creek Proj (Prerefunded @ 3/01/11)........ 7.750 03/01/30 1,358,050
2,973 Pingree Grove, IL Spl Svc Area No 2 Spl
Tax Cambridge Lakes Proj Ser 05-2......... 6.000 03/01/35 2,685,927
2,247 Pingree Grove, IL Spl Svc Area No 7 Spl
Tax Cambridge Lakes Proj Ser 06-1......... 6.000 03/01/36 2,001,650
1,600 Pingree Grove Vlg, IL Rev Cambridge Lakes
Learning Ctr.............................. 6.000 06/01/36 1,419,312
1,961 Plano, IL Spl Svc Area No 1 Lakewood
Springs Proj Ser A........................ 6.200 03/01/34 1,893,542
1,815 Plano, IL Spl Svc Area No 6 Spl Tax
Lakewood Springs Club Proj................ 5.800 03/01/37 1,569,249
1,370 Quad Cities Reg Econ Dev Auth IL Multi-
Family Hsg Heritage Woods Moline Slf Proj
(AMT)..................................... 6.000 12/01/41 1,136,716
2,095 Regional Tran Auth IL Ser B (AMBAC
Insd)..................................... 8.000 06/01/17 2,721,196
920 Sterling, IL Rev Hoosier Care Proj Ser
A......................................... 7.125 06/01/34 918,786
4,000 Upper IL Riv Vy Dev Auth Multi-Family Hsg
Rev Living Springs Mchenry Slf Proj
(AMT)..................................... 6.100 12/01/41 3,347,040
1,921 Volo Vlg, IL Spl Svc Area No 3 Symphony
Meadows Proj Ser 1........................ 6.000 03/01/36 1,711,246
3,135 Wheeling, IL Tax Increment Rev N
Milwaukee/Lake Cook TIF Proj.............. 6.000 01/01/25 2,858,399
</Table>
22 See Notes to Financial Statements
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------
ILLINOIS (CONTINUED)
$ 2,500 Will Kankakee Regl Dev Auth IL
Multi-Family Hsg Rev Sr Estates Supportive
Living (AMT).............................. 7.000% 12/01/42 $ 2,344,500
1,405 Yorkville, IL Utd City Business Dist Rev
Storm Wtr Impt Proj....................... 6.000 01/01/26 1,235,459
385 Yorkville, IL Utd City Business Dist Rev
Storm Wtr Impt Proj....................... 6.000 01/01/27 337,279
5,597 Yorkville, IL Utd City Spl Svc Area Spl
Tax No 2004-107 Raintree Vlg IL Proj...... 6.250 03/01/35 5,228,494
1,550 Yorkville, IL Utd City Spl Svc Area Spl
Tax No 2006-113 Cannonball/Beecher........ 5.750 03/01/28 1,347,152
1,923 Yorkville, IL Utd City Spl Svc Area Spl
Tax No 4 104 MPI Grade Res Proj........... 6.375 03/01/34 1,820,562
--------------
139,909,555
--------------
INDIANA 1.4%
675 Crawfordsville, IN Redev Cmnty Redev Dist
Tax Increment Rev (Acquired 10/15/97, Cost
$675,000) (c) (e)......................... 7.000 02/01/12 682,898
1,845 Indiana Hlth Fac Fin Auth Rev Hoosier Care
Proj Ser A................................ 7.125 06/01/34 1,826,827
6,500 Indiana Hlth Fac Hosp Rev Cmnty Fndtn
Northwest IN Ser A........................ 6.000 03/01/34 6,349,395
2,000 Petersburg, IN Pollutn Ctl Rev IN Pwr & Lt
(AMT)..................................... 6.375 11/01/29 2,033,100
1,785 Portage, IN Spl Impt Dist Rev Marina
Shores Proj............................... 6.375 03/01/35 1,392,978
265 Saint Joseph Cnty, IN Econ Dev Rev Holy
Cross Vlg Notre Dame Proj A............... 5.700 05/15/28 236,059
230 Saint Joseph Cnty, IN Econ Dev Rev Holy
Cross Vlg Notre Dame Proj A............... 6.000 05/15/26 215,402
470 Saint Joseph Cnty, IN Econ Dev Rev Holy
Cross Vlg Notre Dame Proj A............... 6.000 05/15/38 419,033
4,000 Vigo Cnty, IN Hosp Auth Rev Union
Hosp Inc (f).............................. 5.700 09/01/37 3,517,760
2,000 Vigo Cnty, IN Hosp Auth Rev Union
Hosp Inc (f).............................. 5.750 09/01/42 1,757,680
1,500 Vigo Cnty, IN Hosp Auth Rev Union
Hosp Inc (f).............................. 5.800 09/01/47 1,314,705
--------------
19,745,837
--------------
IOWA 1.3%
1,000 Bremer Cnty, IA Retirement Fac Rev Bartels
Lutheran Ser A............................ 5.375 11/15/27 846,020
3,635 Des Moines Iowa Multi-family Hsg Rev Rfdg
Luther Pk Apts Inc Ser A (Acquired
04/05/07, Cost $3,635,000) (c) (e)........ 5.300 12/01/36 2,960,453
2,000 Estherville, IA Hosp Rev Avera Holy
Family Proj............................... 6.250 07/01/26 2,064,900
</Table>
See Notes to Financial Statements 23
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------
IOWA (CONTINUED)
$ 365 Evansdale, IA Hlthcare Westn Home Proj
(e)....................................... 6.000% 11/01/26 $ 339,695
3,305 Evansdale, IA Hlthcare Westn Home Proj Ser
A (e)..................................... 6.000 11/01/26 3,075,864
500 Iowa Fin Auth Retirement Cmnty Friendship
Haven Proj Ser A.......................... 5.750 11/15/19 469,890
500 Iowa Fin Auth Retirement Cmnty Friendship
Haven Proj Ser A.......................... 6.000 11/15/24 472,595
800 Iowa Fin Auth Retirement Cmnty Friendship
Haven Proj Ser A.......................... 6.125 11/15/32 740,296
350 Iowa Fin Auth Sr Hsg Rev Rfdg Bethany Life
Cmnty Proj A.............................. 5.450 11/01/26 305,952
1,000 Iowa Fin Auth Sr Hsg Rev Rfdg Bethany Life
Cmnty Proj A.............................. 5.550 11/01/41 832,400
2,250 Iowa Fin Auth Sr Living Fac Rev Deerfield
Ret Cmnty Inc Ser A....................... 5.500 11/15/37 1,850,850
2,300 Jefferson Cnty, IA Hosp Rev Jefferson Cnty
Hosp Proj Ser C........................... 5.950 08/01/37 2,052,152
1,000 Polk Cnty, IA Hlthcare Fac Rev Luther Pk
Hlth Ctr Inc Proj......................... 6.150 10/01/36 919,920
2,000 Pottawattamie Cnty Iowa Rev Rfdg Christian
Homes Inc Ser E........................... 5.750 05/15/31 1,736,980
--------------
18,667,967
--------------
KANSAS 0.3%
1,000 Olathe, KS Sr Living Fac Rev Catholic Care
Campus Inc Ser A.......................... 6.000 11/15/26 930,570
1,000 Olathe, KS Sr Living Fac Rev Catholic Care
Campus Inc Ser A.......................... 6.000 11/15/38 885,240
1,500 Overland Pk, KS Dev Corp Rev First Tier
Overland Pk Ser A
(Prerefunded @ 1/01/11)................... 7.375 01/01/32 1,682,955
1,570 Overland Pk, KS Trans Dev Dist Spl Assmt
Grass Creek Proj.......................... 5.125 09/01/28 1,351,566
--------------
4,850,331
--------------
LOUISIANA 0.9%
3,572 Lakeshore Vlg Master Cmnty Dev Dist LA Spl
Assmt..................................... 5.250 07/01/17 3,177,080
1,800 Louisiana Loc Govt Environment Fac Cmnty
Dev Auth Rev Hlthcare Saint James Place
Rfdg Ser A (Prerefunded @ 11/01/09)....... 7.000 11/01/29 1,963,602
1,500 Louisiana Pub Fac Auth Rev Progressive
Hlthcare.................................. 6.375 10/01/20 1,424,775
1,000 Louisiana Pub Fac Auth Rev Progressive
Hlthcare.................................. 6.375 10/01/28 927,080
</Table>
24 See Notes to Financial Statements
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------
LOUISIANA (CONTINUED)
$ 2,717 Louisiana St Univ & Agric & Mechanical
College Univ Rev Master Agreement
(Acquired 11/30/98, Cost $2,717,412)
(c)....................................... 5.750% 10/30/18 $ 2,667,710
2,500 Saint John Baptist Parish, LA Rev Marathon
Oil Corp Ser A............................ 5.125 06/01/37 2,208,000
--------------
12,368,247
--------------
MARYLAND 2.4%
1,000 Baltimore Cnty, MD Mtg Rev Shelter Elder
Care Ser A (Prerefunded @ 11/01/09)....... 7.250 11/01/29 1,094,750
3,500 Brunswick, MD Spl Oblg Brunswick Crossing
Spl Taxing................................ 5.500 07/01/36 2,866,150
4,000 Frederick Cnty, MD Spl Oblig Urbana Cmnty
Dev Auth Ser A............................ 5.950 07/01/30 3,713,840
985 Frederick Cnty, MD Spl Oblig Urbana Cmnty
Dev Auth Ser B............................ 6.250 07/01/30 923,733
1,160 Maryland St Econ Dev Corp MD Golf Course
Sys (Prerefunded @ 6/01/11)............... 8.250 06/01/28 1,348,662
1,500 Maryland St Econ Dev Corp Sr Lien Proj
Chesapeake Bay Ser B...................... 5.250 12/01/31 1,233,495
1,540 Maryland St Hlth & Higher Ed Calvert
Hlth Sys.................................. 5.500 07/01/36 1,544,297
14,255 Maryland St Hlth & Higher Ed Fac Auth Rev
Medstar Hlth.............................. 5.250 05/15/46 12,580,465
2,000 Maryland St Hlth & Higher Ed Fac Auth Rev
Washington Cnty Hosp...................... 6.000 01/01/43 1,958,900
1,500 Maryland St Hlth & Higher Edl Fac Auth Rev
Washington Christian Academy.............. 5.500 07/01/38 1,220,895
3,000 Montgomery Cnty, MD Econ Dev Editorial
Proj In Ed Ser A (Acquired 09/28/98,
Cost $3,000,000) (c)...................... 6.400 09/01/28 2,348,370
1,000 Westminster, MD Econ Dev Carroll Lutheran
Vlg Ser A................................. 6.000 05/01/24 982,250
1,500 Westminster, MD Econ Dev Carroll Lutheran
Vlg Ser A................................. 6.250 05/01/34 1,472,475
--------------
33,288,282
--------------
MASSACHUSETTS 1.8%
1,000 Massachusetts St Dev Fin Agy Briarwood Ser
B (Prerefunded @ 12/01/10)................ 8.000 12/01/22 1,146,360
250 Massachusetts St Dev Fin Agy Rev Evergreen
Ctr Inc................................... 5.000 01/01/24 219,400
500 Massachusetts St Dev Fin Agy Rev Evergreen
Ctr Inc................................... 5.500 01/01/35 429,610
1,835 Massachusetts St Dev Fin Agy Rev Hillcrest
Ed Ctr Inc................................ 6.375 07/01/29 1,739,892
2,845 Massachusetts St Dev Fin Agy Rev Hlthcare
Fac Alliance Ser A........................ 7.100 07/01/32 2,855,555
</Table>
See Notes to Financial Statements 25
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------
MASSACHUSETTS (CONTINUED)
$ 1,000 Massachusetts St Dev Fin Agy Rev MCHSP
Human Svc Providers Ser A (Prerefunded @
7/01/10).................................. 8.000% 07/01/20 $ 1,125,820
3,515 Massachusetts St Dev Fin Agy Rev New
England Ctr For Children.................. 6.000 11/01/19 3,433,206
4,960 Massachusetts St Dev Fin Agy Rev Rfdg
First Mtg Reeds Accd Invt................. 5.750 10/01/31 4,185,049
3,100 Massachusetts St Hlth & Ed Fac Auth Rev
Civic Invt Ser B (Prerefunded @
12/15/12)................................. 9.150 12/15/23 3,934,644
842 Massachusetts St Hlth & Ed Fac Auth Rev
Nichols College Issue Ser C............... 6.000 10/01/17 867,782
1,000 Massachusetts St Hlth & Ed Fac Auth Rev
Northn Berkshire Hlth Ser B............... 6.250 07/01/24 986,350
465 Massachusetts St Indl Fin Agy Rev First
Mtg GF/Pilgrim Inc Proj................... 6.500 10/01/15 426,591
2,000 Massachusetts St Indl Fin Agy Rev First
Mtg GF/Pilgrim Inc Proj................... 6.750 10/01/28 1,708,300
2,200 Massachusetts St Indl Fin Agy Rev Swr Fac
Res Ctl Composting (AMT) (Acquired
08/10/89, Cost $2,200,000) (c)............ 9.250 06/01/10 2,216,654
--------------
25,275,213
--------------
MICHIGAN 2.7%
2,500 Chelsea, MI Econ Dev Corp Rev Utd
Methodist Retirement Rfdg................. 5.400 11/15/27 2,386,925
775 East Lansing MI Econ Dev Corp Ltd Oblig
Rev First Mtg Burcham Hills B1............ 5.250 07/01/37 631,176
1,000 Gaylord, MI Hosp Fin Auth Ltd Oblig Rev
Otsego Mem Hosp Rfdg...................... 6.500 01/01/31 968,190
2,000 Kent Hosp Fin Auth MI Rev Metro Hosp Proj
Ser A..................................... 6.250 07/01/40 2,004,380
1,595 Meridian, MI Econ Dev Corp Ltd Oblig Rev
Rfdg First Mtg Burcham Hills A1........... 5.250 07/01/26 1,441,944
2,410 Michigan St Hosp Fin Auth Rev Hosp Pontiac
Osteopathic Rfdg Ser A.................... 6.000 02/01/14 2,412,217
1,500 Michigan St Hosp Fin Auth Rev Hosp Pontiac
Osteopathic Rfdg Ser A.................... 6.000 02/01/24 1,500,150
2,000 Michigan St Hosp Fin Auth Rev Presbyterian
Vlg Rfdg.................................. 5.500 11/15/35 1,698,540
13,375 Michigan St Hosp Fin Auth Rev Rfdg Henry
Ford Hlth Sys A (h)....................... 5.250 11/15/46 12,543,299
1,500 Michigan St Hosp Fin Auth Rev Rfdg
Presbyterian Vlg.......................... 5.250 11/15/25 1,296,375
</Table>
26 See Notes to Financial Statements
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------
MICHIGAN (CONTINUED)
$ 8,500 Michigan Tob Settlement Fin Auth Tob
Settlement Asset Sr Ser A................. 6.000% 06/01/48 $ 7,794,330
5,120 Wenonah Pk Ppty Inc Bay City Hotel Rev
Bd........................................ 7.500 04/01/33 3,182,182
--------------
37,859,708
--------------
MINNESOTA 6.5%
2,000 Aitkin, MN Hlth Fac Rev Riverwood Hlthcare
Ctr Proj (Prerefunded @ 2/01/11).......... 7.750 02/01/31 2,277,460
700 Aitkin, MN Hlthcare Fac Rev Rfdg Riverwood
Hlthcare Ctr.............................. 5.500 02/01/24 664,139
2,540 Aitkin, MN Hlthcare Fac Rev Rfdg Riverwood
Hlthcare Ctr.............................. 5.600 02/01/32 2,292,706
1,000 Cambridge, MN Hsg & Hlthcare Fac Rev
Grandview West Proj Ser B................. 6.000 10/01/33 943,460
2,000 Carlton, MN Hlth & Hsg Fac Inter Faith
Social Svc Inc Proj (Prerefunded @
4/01/10).................................. 7.500 04/01/19 2,204,320
2,000 Carlton, MN Hlth & Hsg Fac Inter Faith
Social Svc Inc Proj (Prerefunded @
4/01/10).................................. 7.750 04/01/29 2,233,480
2,700 Carlton, MN Hlthcare & Hsg Fac Rev Rfdg
Inter Faith Care Ctr Proj................. 5.700 04/01/36 2,427,273
1,500 Columbia Heights, MN Multi-Family &
Hlthcare Fac Rev Rfdg Crest View Corp Proj
A......................................... 5.700 07/01/42 1,355,685
2,000 Crookston,MN Hlthcare Fac Rev Rfdg
Riverview Hlth Proj....................... 5.300 05/01/32 1,732,180
2,000 Cuyuna, MN Sr Hsg Rev Crosby Sr Svcs Proj
Ser B..................................... 6.100 10/01/47 1,844,220
2,250 Cuyuna Range Hosp Dist MN Hlth Fac Gross
Rev....................................... 5.500 06/01/35 2,147,692
675 Duluth, MN Econ Dev Auth Hlthcare Fac Rev
Saint Luke's Hosp......................... 6.000 06/15/12 689,607
1,500 Duluth, MN Econ Dev Auth Hlthcare Fac Rev
Saint Luke's Hosp......................... 7.250 06/15/32 1,552,950
2,000 Glencoe, MN Hlthcare Fac Rev (Prerefunded
@ 4/01/11)................................ 7.500 04/01/31 2,275,600
6,695 Minneapolis & Saint Paul MN Metro Arpts
Commn Arpt Rev Sub Ser B (AMBAC Insd)
(AMT) (h)................................. 5.000 01/01/21 6,587,294
7,385 Minneapolis & Saint Paul MN Metro Arpts
Commn Arpt Rev Sub Ser B (AMBAC Insd)
(AMT) (h)................................. 5.000 01/01/23 7,266,194
3,000 Minneapolis, MN Hsg & Hlthcare Fac Rev
Rfdg Providence Proj Ser A................ 5.750 10/01/37 2,686,530
1,400 Minneapolis, MN Student Hsg Rev Riverton
Cmnty Hsg Proj Ser A...................... 5.600 08/01/26 1,246,658
3,100 Minneapolis, MN Student Hsg Rev Riverton
Cmnty Hsg Proj Ser A...................... 5.700 08/01/40 2,651,988
</Table>
See Notes to Financial Statements 27
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------
MINNESOTA (CONTINUED)
$ 1,000 Minneapolis, MN Tax Increment Rev Ivy
Tower Proj................................ 5.700% 02/01/29 $ 909,180
900 Minnesota Agric & Econ Dev Brd Rev
Hlthcare Benedictine Proj Ser A........... 5.500 08/01/23 848,763
875 Minnesota Agric & Econ Dev Brd Rev
Hlthcare Benedictine Proj Ser A........... 5.750 02/01/30 813,356
3,770 Moorhead, MN Sr Hsg Rev Sheyenne Crossing
Proj...................................... 5.650 04/01/41 3,353,415
875 New Ulm, MN Econ Dev Auth Hsg Fac Rev Rfdg
HADC Ridgeway Proj Ser A
(GTY AGMT)................................ 5.750 06/01/28 822,290
2,150 New Ulm, MN Econ Dev Auth Hsg Fac Rev Rfdg
HADC Ridgeway Proj Ser A
(GTY AGMT)................................ 6.000 06/01/41 2,027,816
3,000 North Oaks, MN Sr Hsg Rev Presbyterian
Homes North Oaks.......................... 6.500 10/01/47 3,011,580
850 Northwest, MN Multi-Cnty Hsg & Redev Auth
Govt Hsg Rev Pooled Hsg Prog Rfdg......... 5.250 07/01/26 729,606
2,340 Northwest, MN Multi-Cnty Hsg & Redev Auth
Govt Hsg Rev Pooled Hsg Prog Rfdg......... 5.450 07/01/41 1,929,400
2,500 Northwest, MN Multi-Cnty Hsg & Redev Auth
Govt Hsg Rev Pooled Hsg Prog Rfdg Ser A... 6.250 07/01/40 2,325,475
1,500 Oakdale, MN Rev Sr Hsg Oak Meadows Proj
Rfdg...................................... 6.250 04/01/34 1,459,650
2,450 Oronoco, MN Multi-Family Hsg Rev Wedum
Shorewood Campus Proj Rfdg................ 5.400 06/01/41 2,144,191
1,350 Park Rapids, MN Hsg Hlth Fac Cdl Homes LLC
Proj...................................... 5.400 08/01/36 1,169,451
1,100 Pine City, MN Lease Rev Lakes Intl
Language Academy Ser A.................... 6.250 05/01/35 994,818
2,000 Prior Lake, MN Sr Hsg Rev Shepards Path
Ser B..................................... 5.700 08/01/36 1,843,420
2,000 Prior Lake, MN Sr Hsg Rev Shepards Path
Ser B..................................... 5.750 08/01/41 1,840,800
1,425 Ramsey, MN Lease Rev Pact Charter Sch Proj
Ser A..................................... 6.750 12/01/33 1,433,251
1,500 Saint Cloud, MN Hsg & Redev Auth Sterling
Heights Apt Proj (AMT).................... 7.550 04/01/39 1,448,790
2,355 Saint Louis Pk, MN Rev Roitenberg Family
Asstd Proj Rfdg........................... 5.700 08/15/41 2,111,823
1,000 Saint Paul, MN Hsg & Redev Auth Higher
Ground Academy Rfdg
Ser A..................................... 6.625 12/01/23 1,010,540
400 Saint Paul, MN Hsg & Redev Auth Hmong
Academy Proj Ser A........................ 5.750 09/01/26 364,636
</Table>
28 See Notes to Financial Statements
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------
MINNESOTA (CONTINUED)
$ 2,185 Saint Paul, MN Hsg & Redev Auth Lease Rev
Hope Cmnty Academy Proj................... 6.250% 12/01/33 $ 2,038,539
1,000 Saint Paul, MN Hsg & Redev Cmnty of Peace
Academy Proj Ser A
(Prerefunded @ 12/01/10).................. 7.875 12/01/30 1,152,620
1,250 Saint Paul, MN Port Auth Lease Rev
Hltheast Midway Campus 03 Ser A........... 5.875 05/01/30 1,189,600
700 Saint Paul, MN Port Auth Lease Rev
Hltheast Midway Campus 03 Ser B........... 6.000 05/01/30 677,929
2,000 Saint Paul, MN Hsg & Redev Auth Lse Rev
Hmong Academy Proj Ser A.................. 6.000 09/01/36 1,812,500
1,000 Saint Paul, MN Hsg & Redev Auth Rfdg
Marian Ctr Proj A......................... 5.300 11/01/30 841,520
3,340 Saint Paul, MN Hsg & Redev Auth Rfdg
Marian Ctr Proj A......................... 5.375 05/01/43 2,723,803
1,000 Vadnais Heights, MN Lease Rev Agric & Food
Sciences Ser A............................ 6.375 12/01/24 934,300
1,000 Vadnais Heights, MN Lease Rev Agric & Food
Sciences Ser A............................ 6.600 12/01/34 911,090
1,450 Winona, MN Hlthcare Winona Hlth Ser A..... 6.000 07/01/34 1,469,416
--------------
91,423,004
--------------
MISSISSIPPI 0.3%
615 Mississippi Biss Fin Corp Rev Bldg Ser
2004 (AMT)................................ 7.250 07/01/34 617,774
1,800 Mississippi Home Corp Rev Grove Apts Proj
Ser 1 (AMT)............................... 6.250 04/01/37 1,562,868
2,000 Mississippi Home Corp Rev Kirkwood Apts
Proj (AMT)................................ 6.800 11/01/37 1,885,020
--------------
4,065,662
--------------
MISSOURI 3.0%
1,455 Branson Hills Infrastructure Fac Cmnty
Impt Dist MO Spl Ser A.................... 5.500 04/01/22 1,342,048
1,500 Branson Hills Infrastructure Fac Cmnty
Impt Dist MO Spl Ser A.................... 5.500 04/01/27 1,316,175
4,750 Branson, MO Regl Arpt Transn Dev Dist Arpt
Rev Ser B (AMT)........................... 6.000 07/01/37 4,096,163
1,500 Carthage, MO Hosp Rev..................... 5.875 04/01/30 1,351,950
8,500 Carthage, MO Hosp Rev..................... 6.000 04/01/38 7,580,215
1,250 Cole Cnty, MO Indl Dev Auth Sr Living Fac
Rev Lutheran Sr Svc Heisinger Proj........ 5.500 02/01/35 1,200,812
960 Fenton, MO Tax Increment Rev & Impt
Gravois Bluffs Proj Rfdg (Prerefunded @
10/01/11)................................. 7.000 10/01/21 1,102,426
910 Fenton, MO Tax Increment Rev & Impt
Gravois Bluffs Proj Rfdg (Prerefunded @
10/01/12)................................. 6.125 10/01/21 1,028,054
</Table>
See Notes to Financial Statements 29
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------
MISSOURI (CONTINUED)
$ 1,205 Ferguson, MO Tax Increment Rev Crossings
at Halls Ferry Proj....................... 5.000% 04/01/17 $ 1,140,978
2,000 Kansas City, MO Indl Dev Auth First Mtg
Bishop Spencer Ser A...................... 6.250 01/01/24 1,944,200
1,500 Kansas City, MO Indl Dev Auth First Mtg
Bishop Spencer Ser A...................... 6.500 01/01/35 1,450,950
960 Kansas City, MO Indl Dev Auth Multi-Family
Hsg Rev Brentwood Manor Apt Proj Ser B
(AMT)..................................... 7.250 10/15/38 966,768
3,000 Kansas City, MO Indl Dev Plaza Lib Proj... 5.900 03/01/24 2,804,880
1,710 Kansas City, MO Multi-Family Hsg Rev
Northwoods Apts Proj Ser A (AMT).......... 6.450 05/01/40 1,710,308
2,220 Nevada, MO Hosp Rev Nevada Regl Med Ctr
(Prerefunded @ 10/01/11).................. 6.750 10/01/22 2,537,371
2,750 Saint Joseph, MO Indl Dev Auth Hlthcare
Rev Living Cmnty Saint Joseph Proj........ 7.000 08/15/32 2,577,327
1,270 Saint Louis Cnty, MO Indl Dev Auth Sr
Living Fac Rev Saint Andrews Res for Srs
Ser A..................................... 6.375 12/01/30 1,205,802
1,630 Saint Louis Cnty, MO Indl Dev Auth Sr
Living Fac Rev Saint Andrews Res for Srs
Ser A..................................... 6.375 12/01/41 1,525,452
4,615 Saline Cnty, MO Indl Dev Auth Hlth Fac Rev
(Acquired 01/12/99, Cost $4,526,310)
(c)....................................... 6.500 12/01/28 4,631,799
--------------
41,513,678
--------------
MONTANA 0.2%
1,000 Montana Fac Fin Auth Rev Sr Living Saint
Johns Lutheran Ser A...................... 6.000 05/15/25 946,250
2,000 Montana Fac Fin Auth Rev Sr Living Saint
Johns Lutheran Ser A...................... 6.125 05/15/36 1,881,480
--------------
2,827,730
--------------
NEVADA 0.7%
2,400 Director St NV Dept Business & Industry
Las Vegas Monorail Proj Second Tier....... 7.375 01/01/40 829,944
3,000 Henderson, NV Hlthcare Fac Rev Catholic
Hlthcare West Ser A....................... 5.625 07/01/24 3,074,250
975 Las Vegas, NV Loc Impt Bds Spl Impt Dist
No 607.................................... 6.000 06/01/19 919,269
5,425 Reno, NV Redev Agy Tax Alloc
Sub Lien Ser C............................ 5.400 06/01/27 4,518,591
--------------
9,342,054
--------------
</Table>
30 See Notes to Financial Statements
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------
NEW HAMPSHIRE 0.3%
$ 1,500 New Hampshire Hlth & Ed Fac Auth Rev
Hlthcare Sys Covenant Hlth................ 5.500% 07/01/34 $ 1,479,360
1,690 New Hampshire Hlth & Ed Fac Auth Rev
Huntington at Nashua Ser A................ 6.875 05/01/33 1,731,219
1,500 New Hampshire Hlth & Ed Fac Speare Mem
Hosp...................................... 5.875 07/01/34 1,439,850
--------------
4,650,429
--------------
NEW JERSEY 1.9%
1,000 Middlesex Cnty, NJ Pollutn Ctl
Amerada Rfdg.............................. 6.050 09/15/34 990,850
1,285 New Jersey Econ Dev Auth Econ Dev Rev
Kullman Assoc Proj Ser A (AMT)............ 6.125 06/01/18 1,100,281
2,500 New Jersey Econ Dev Auth Econ Dev Rev Utd
Methodist Homes Ser A1.................... 6.000 07/01/18 2,491,225
2,000 New Jersey Econ Dev Auth First Mtg
Franciscan Oaks Proj...................... 5.700 10/01/17 1,969,080
750 New Jersey Econ Dev Auth First Mtg
Seashore Gardens Proj..................... 5.300 11/01/26 648,083
900 New Jersey Econ Dev Auth First Mtg
Seashore Gardens Proj..................... 5.375 11/01/36 750,501
1,000 New Jersey Econ Dev Auth Retirement Cmnty
Rev Ser A (Prerefunded @ 11/15/08)........ 8.125 11/15/18 1,036,830
1,000 New Jersey Econ Dev Auth Retirement Cmnty
Rev Ser A (Prerefunded @ 11/15/10)........ 8.000 11/15/15 1,148,080
1,440 New Jersey Econ Dev Auth Retirement Cmnty
Rev Ser A (Prerefunded @ 11/15/10)........ 8.125 11/15/23 1,657,584
710 New Jersey Econ Dev Auth Rev First Mtg
Lions Gate Proj A......................... 5.750 01/01/25 643,622
1,230 New Jersey Econ Dev Auth Rev First Mtg
Lions Gate Proj A......................... 5.875 01/01/37 1,078,366
2,000 New Jersey Econ Dev Auth Rev Sr Living Fac
Esplanade Bear (AMT)...................... 7.000 06/01/39 1,443,200
1,500 New Jersey Econ Dev Auth Rev Unrefunded
Bal Sr Mtg Arbor Ser A.................... 6.000 05/15/28 1,413,930
3,500 New Jersey Econ Dev Auth Utd Methodist
Homes NJ Oblig............................ 5.750 07/01/29 3,241,140
900 New Jersey Hlthcare Fac Fin Auth Rev
Avalon at Hillsborough Ser A (AMT)........ 6.375 07/01/25 851,787
575 New Jersey Hlthcare Fac Fin Auth Rev
Avalon at Hillsborough Ser A (AMT)........ 6.625 07/01/35 541,869
8,840 New Jersey Hlthcare Fac Fin Auth Rev Cap
Apprec Saint Barnabas Hlth Ser B.......... * 07/01/35 1,395,659
2,780 New Jersey Hlthcare Fac Fin Auth Rev Cap
Apprec Saint Barnabas Hlth Ser B.......... * 07/01/36 409,049
595 New Jersey Hlthcare Fac Fin Auth Rev
Raritan Bay Med Ctr Issue Rfdg............ 7.250 07/01/14 594,994
</Table>
See Notes to Financial Statements 31
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------
NEW JERSEY (CONTINUED)
$ 4,740 New Jersey Hlthcare Fac Fin Auth Rev Saint
Barnabas Hlthcare Sys Ser B............... * 07/01/34 $ 804,899
3,000 New Jersey Hlthcare Fac Fin Inst Inc
Cherry Hill Proj.......................... 8.000% 07/01/27 3,006,630
--------------
27,217,659
--------------
NEW MEXICO 0.6%
3,960 Albuquerque, NM Retirement Fac Rev La Vida
Llena Proj Rfdg Ser B..................... 6.600 12/15/28 3,943,130
1,505 Cabezon Pub Impt Dist NM Spl
Leverage Rev.............................. 6.000 09/01/24 1,435,770
976 New Mexico Hsg Auth Region lll Sr
Brentwood Gardens Apt Ser A (AMT)......... 6.850 12/01/31 1,001,874
2,000 New Mexico St Hosp Equip Ln Council Hosp
Rev Rehoboth Proj Rfdg Ser A.............. 5.250 08/15/26 1,670,040
750 Ventana West Pub Impt Dist NM............. 6.875 08/01/33 762,188
--------------
8,813,002
--------------
NEW YORK 4.6%
1,000 Brookhaven, NY Indl Dev Agy Mem Hosp Med
Ctr Inc Ser A (Prerefunded @ 11/15/10).... 8.125 11/15/20 1,142,840
1,400 Brookhaven, NY Indl Dev Agy Sr Residential
Hsg Rev Woodcrest Estates Fac
Ser A (AMT)............................... 6.375 12/01/37 1,395,212
3,245 Dutchess Cnty, NY Indl Dev Agy Saint
Francis Hosp Rfdg Ser A................... 7.500 03/01/29 3,433,729
1,690 Monroe Cnty, NY Indl Dev Agy Woodland Vlg
Proj (Prerefunded @ 11/15/10)............. 8.000 11/15/15 1,896,434
7,000 New York City Indl Dev Agy Rev Liberty 7
World Trade Ctr Ser A..................... 6.250 03/01/15 7,080,500
15,400 New York City Indl Dev Agy Rev Liberty 7
World Trade Ctr Ser A..................... 6.500 03/01/35 15,503,334
17,780 New York, NY City Indl Dev Agy Rev Liberty
7 World Trade Ctr Ser A (h)............... 6.250 03/01/15 17,984,381
2,500 New York St Energy Resh & Dev
Reg Ribs (j) (k).......................... 8.601 04/01/20 2,609,450
2,770 Suffolk Cnty, NY Indl Dev Agy Civic Fac
Rev Eastn Long Isl Hosp Assoc Ser A
(Prerefunded @ 1/01/12)................... 7.750 01/01/22 3,187,771
1,000 Suffolk Cnty, NY Indl Dev Agy Civic Fac
Rev Gurwin Jewish Phase II................ 6.700 05/01/39 1,018,690
1,445 Suffolk Cnty, NY Indl Dev Agy Cont Care
Retirement Peconic Landing Ser A.......... 8.000 10/01/20 1,538,361
4,000 Suffolk Cnty, NY Indl Dev Agy Medford
Hamlet Asstd Living Proj (AMT)............ 6.375 01/01/39 3,699,520
1,000 Syracuse, NY Indl Dev Agy Rev First Mtg
Jewish Home Ser A......................... 7.375 03/01/31 1,030,580
</Table>
32 See Notes to Financial Statements
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------
NEW YORK (CONTINUED)
$ 2,315 Utica, NY Indl Dev Agy Civic Utica College
Civic Fac................................. 6.750% 12/01/21 $ 2,431,630
1,000 Westchester Cnty, NY Indl Dev Hebrew Hosp
Sr Hsg Inc Ser A (Prerefunded @
7/01/10).................................. 7.375 07/01/30 1,120,510
--------------
65,072,942
--------------
NORTH CAROLINA 0.2%
2,600 North Carolina Med Care Commn Retirement
Fac Rev First Mtg Ser A 05................ 5.500 10/01/35 2,328,248
--------------
NORTH DAKOTA 0.1%
1,820 Traill Cnty, ND Hlthcare Rev Hillsboro
Med Ctr................................... 5.500 05/01/42 1,490,216
--------------
OHIO 5.2%
7,200 Adams Cnty Hosp Fac Impt Rev Adams Cnty
Hosp Proj................................. 6.500 09/01/36 6,068,088
5,000 Athens Cnty, OH Hosp Fac Rev Impt
O'Bleness Mem Rfdg Ser A.................. 7.125 11/15/33 5,131,700
1,000 Buckeye, OH Tob Settlement Fin Auth Asset
Bkd Sr Turbo Ser A-2...................... 5.750 06/01/34 892,380
16,000 Buckeye, OH Tob Settlement Fin Auth Asset
Bkd Sr Turbo Ser A-2...................... 5.875 06/01/30 14,903,360
15,000 Buckeye, OH Tob Settlement Fin Auth Asset
Bkd Sr Turbo Ser A-2...................... 5.875 06/01/47 13,274,400
2,000 Buckeye, OH Tob Settlement Fin Auth Asset
Bkd Sr Turbo Ser A-2...................... 6.000 06/01/42 1,830,200
3,000 Cleveland-Cuyahoga Cnty, OH Spl Assmt/ Tax
Increment................................. 7.000 12/01/18 3,184,620
2,000 Cuyahoga Cnty, OH Hlthcare & Indpt Living
Fac Rev Eliza Jennings Sr Care Ser A...... 6.000 05/15/37 1,799,240
1,000 Cuyahoga Cnty, OH Hlthcare Fac Franciscan
Cnty OH Inc Proj Ser C.................... 6.250 05/15/32 976,200
1,760 Dayton, OH Spl Fac Rev Air Fght Cargo Day
LLC Proj (AMT)............................ 6.300 04/01/22 1,631,942
7,510 Erie Cnty, OH Hosp Fac Rev Firelands Regl
Med Ctr Ser A............................. 5.625 08/15/32 7,524,945
5,955 Franklin Cnty, OH Hlthcare Fac Rev Impt
Lutheran Sr City Proj Rfdg (e)............ 6.125 12/15/28 5,353,069
3,000 Franklin Cnty, OH Hosp Rev Rfdg Childrens
Hosp (AMBAC Insd) (a)..................... 8.000 11/01/25 3,000,000
1,500 Lucas Cnty, OH Hlthcare & Impt Sunset
Retirement Rfdg........................... 6.500 08/15/20 1,551,750
750 Lucas Cnty, OH Port Auth Rev Saint Mary
Woods Proj Ser A.......................... 6.000 05/15/24 681,825
</Table>
See Notes to Financial Statements 33
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------
OHIO (CONTINUED)
$ 1,000 Lucas Cnty, OH Port Auth Rev Saint Mary
Woods Proj Ser A.......................... 6.000% 05/15/34 $ 886,380
4,340 Norwood, OH Tax Increment Rev Fin
Cornerstone at Norwood.................... 6.200 12/01/31 3,913,595
--------------
72,603,694
--------------
OKLAHOMA 1.5%
1,000 Citizen Potawatomi Nation, OK Ser A....... 6.500 09/01/16 1,038,090
330 Langston, OK Econ Dev Langston Cmnty Dev
Corp Proj Ser A (g)....................... 7.000 08/01/10 348,114
1,000 Langston, OK Econ Dev Langston Cmnty Dev
Corp Proj Ser A (Prerefunded @ 8/01/10)... 7.625 08/01/20 1,133,330
750 Langston, OK Economic Dev Langston Cmnty
Dev Corp Proj Ser A
(Prerefunded @ 8/01/10)................... 7.400 08/01/17 846,195
2,000 Oklahoma Cnty, OK Fin Auth Rev Epworth
Villa Proj Rfdg........................... 6.000 04/01/18 1,913,860
750 Oklahoma Cnty, OK Fin Auth Rev Epworth
Villa Proj Rfdg Ser A..................... 5.700 04/01/25 679,012
1,250 Oklahoma Cnty, OK Fin Auth Rev Epworth
Villa Proj Rfdg Ser A..................... 5.875 04/01/30 1,120,062
1,000 Oklahoma Cnty, OK Fin Auth Rev Epworth
Villa Proj Rfdg Ser A..................... 7.000 04/01/25 1,006,630
5,500 Oklahoma Cnty, OK Fin Auth Rev Retirement
Fac Concordia Ser A....................... 6.000 11/15/38 4,900,555
1,500 Oklahoma Cnty, OK Fin Auth Rev Retirement
Fac Concordia Ser A....................... 6.125 11/15/25 1,408,485
4,000 Oklahoma Dev Fin Auth Rev Hillcrest
Hlthcare Sys Rfdg Ser A (Prerefunded @
8/15/09).................................. 5.625 08/15/19 4,223,840
1,065 Oklahoma Dev Fin Auth Rev Hillcrest
Hlthcare Sys Rfdg Ser A (Prerefunded @
8/15/09).................................. 5.750 08/15/12 1,126,387
1,000 Oklahoma Dev Fin Auth Rev Hillcrest
Hlthcare Sys Rfdg Ser A (Prerefunded @
8/15/09).................................. 5.750 08/15/15 1,057,640
--------------
20,802,200
--------------
OREGON 0.7%
2,145 Clatsop Care Ctr Hlth Dist OR Rev Sr
Hsg....................................... 6.875 08/01/28 2,145,172
2,400 Multnomah Cnty, OR Hosp Fac Auth Rev
Terwilliger Plaza Proj Rfdg (Acquired
12/27/05, Cost $2,344,512) (c)............ 6.500 12/01/29 2,327,928
</Table>
34 See Notes to Financial Statements
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------
OREGON (CONTINUED)
$ 4,898 Oregon St Hlth Hsg Ed & Cultural Fac Auth
Saint Anthony Vlg Hsg Ser A (AMT)......... 7.250% 06/01/28 $ 4,995,009
910 Oregon St Hlth Hsg Ed Auth OR Baptist
Retirement Homes Ser A.................... 8.000 11/15/26 910,719
--------------
10,378,828
--------------
PENNSYLVANIA 5.5%
15,500 Allegheny Cnty, PA Hosp Dev Auth Rev Hlth
Sys West PA Ser A (d)..................... 5.375 11/15/40 12,540,430
1,840 Allegheny Cnty, PA Hosp Dev Hlth Sys Ser B
(Prerefunded @ 11/15/10).................. 9.250 11/15/15 2,130,389
2,000 Allegheny Cnty, PA Hosp Dev Hlth Sys Ser B
(Prerefunded @ 11/15/10).................. 9.250 11/15/22 2,368,060
2,000 Allegheny Cnty, PA Hosp Dev Hlth Sys Ser B
(Prerefunded @ 11/15/10).................. 9.250 11/15/30 2,368,060
1,500 Allegheny Cnty, PA Redev Auth Pittsburgh
Mills Proj................................ 5.600 07/01/23 1,419,660
1,500 Berks Cnty, PA Indl Dev Auth First Mtg Rev
Rfdg One Douglassville Proj A (AMT)....... 6.125 11/01/34 1,363,395
1,500 Bucks Cnty, PA Indl Dev Auth Retirement
Cmnty Rev Ann's Choice Inc Fac Ser A...... 6.125 01/01/25 1,469,865
1,250 Bucks Cnty, PA Indl Dev Auth Retirement
Cmnty Rev Ann's Choice Inc Fac Ser A...... 6.250 01/01/35 1,214,312
1,000 Bucks Cnty, PA Indl Dev Auth Rev First Mtg
Hlthcare Fac Chandler..................... 6.200 05/01/19 966,780
1,800 Bucks Cnty, PA Indl Dev Auth Rev First Mtg
Hlthcare Fac Chandler..................... 6.300 05/01/29 1,691,604
1,500 Chester Cnty, PA Hlth & Ed Fac Chester
Cnty Hosp Ser A........................... 6.750 07/01/31 1,540,335
3,000 Dauphin Cnty, PA Gen Auth Rev Office & Pkg
Riverfront Office......................... 6.000 01/01/25 2,596,710
1,000 Fulton Cnty, PA Indl Dev Auth Hosp Rev
Fulton Cnty Med Ctr Proj.................. 5.875 07/01/31 918,520
1,900 Fulton Cnty, PA Indl Dev Auth Hosp Rev
Fulton Cnty Med Ctr Proj.................. 5.900 07/01/40 1,693,394
1,000 Harrisburg, PA Auth Univ Rev Harrisburg
Univ of Science Ser A..................... 5.400 09/01/16 1,002,970
3,050 Harrisburg, PA Auth Univ Rev Harrisburg
Univ of Science Ser B..................... 6.000 09/01/36 2,781,905
2,200 Indiana Cnty, PA Indl Dev Auth PSEG Pwr
LLC Proj Rfdg (AMT)....................... 5.850 06/01/27 2,096,138
1,000 Lancaster Cnty, PA Hosp Auth Rev Hlth Ctr
Saint Anne's Home......................... 6.625 04/01/28 1,001,970
1,200 Lehigh Cnty, PA Gen Purp Auth First Mtg
Bible Fellowship Church................... 7.625 11/01/21 1,270,008
3,000 Lehigh Cnty, PA Gen Purp Auth Rev Good
Shepherd Grp Ser A........................ 5.500 11/01/24 3,074,670
</Table>
See Notes to Financial Statements 35
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------
PENNSYLVANIA (CONTINUED)
$ 3,585 Lehigh Cnty, PA Gen Purp Auth Rev
Kidspeace Oblig Grp (e)................... 6.200% 11/01/14 $ 3,366,351
5,500 Lehigh Cnty, PA Gen Purp Auth Rev
Kidspeace Oblig Grp Rfdg.................. 6.000 11/01/23 5,024,140
1,000 Lehigh Cnty, PA Indl Dev Auth Hlth Fac Rev
Lifepath Inc Proj......................... 6.100 06/01/18 927,310
4,180 Montgomery Cnty, PA Higher Ed & Hlth Auth
Rev Rfdg & Impt Montgomery................ 6.875 04/01/36 4,144,094
1,085 Montgomery Cnty, PA Indl Dev Auth Rev Mtg
Whitemarsh Cont Care...................... 6.000 02/01/21 1,029,567
4,500 Montgomery Cnty, PA Indl Dev Auth Rev Mtg
Whitemarsh Cont Care...................... 6.250 02/01/35 4,131,450
1,340 Northeastern, PA Hosp & Ed Auth
Hlthcare Rev.............................. 7.125 10/01/29 1,349,447
1,665 Northeastern, PA Hosp & Ed Auth Hlthcare
Rev Oakwood Ter Proj (e) (f).............. 6.500 10/01/32 1,570,894
1,500 Pennsylvania Econ Dev Fin Auth Reliant
Energy Ser A (AMT) (a).................... 6.750 12/01/36 1,503,030
3,000 Pennsylvania Econ Dev Fin Auth Reliant
Energy Seward Ser A (AMT) (a)............. 6.750 12/01/36 3,006,060
980 Pennsylvania St Higher Ed Student Assn Inc
Proj Ser A................................ 6.750 09/01/32 1,006,362
2,150 Philadelphia, PA Auth Indl Dev Rev Coml
Dev Rfdg (AMT)............................ 7.750 12/01/17 2,152,172
1,455 Philadelphia, PA Hosp & Higher Ed Fac Auth
Rev Centralized Comp Human Svc Ser A...... 6.125 01/01/13 1,387,488
1,500 Westmoreland Cnty, PA Indl Dev Hlthcare
Fac Redstone Ser B (Prerefunded @
11/15/10)................................. 8.000 11/15/23 1,708,110
--------------
77,815,650
--------------
RHODE ISLAND 0.3%
1,825 Rhode Island St Econ Dev Corp Rev Oblig
Providence Pl............................. 7.250 07/01/20 1,842,575
3,000 Tobacco Settlement Fin Corp RI Asset Bkd
Ser A..................................... 6.000 06/01/23 2,939,520
--------------
4,782,095
--------------
SOUTH CAROLINA 1.3%
2,500 Lancaster Cnty, SC Assmt Rev Edenmoor Impt
Dist Ser B (Acquired 05/19/06, Cost
$2,500,000) (c)........................... 5.750 12/01/37 2,072,425
1,700 Lancaster Cnty, SC Assmt Rev Sun City
Carolina Lakes Impt....................... 5.450 12/01/37 1,358,997
1,000 Myrtle Beach, SC Tax Increment Myrtle
Beach Air Force Base Ser A................ 5.250 11/01/26 848,000
1,250 Myrtle Beach, SC Tax Increment Myrtle
Beach Air Force Base Ser A................ 5.300 11/01/35 1,008,263
</Table>
36 See Notes to Financial Statements
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------
SOUTH CAROLINA (CONTINUED)
$ 3,000 South Carolina Jobs Econ Dev Auth Econ Dev
Rev Westminster Impt & Rfdg............... 5.375% 11/15/30 $ 2,460,420
2,250 South Carolina Jobs Econ Dev Auth Hlth Fac
Rev First Rfdg First Mtg Wesley Commons... 5.300 10/01/36 1,835,910
800 South Carolina Jobs Econ Dev Auth Rev
Woodlands at Furman Proj Ser A............ 6.000 11/15/27 742,984
2,000 South Carolina Jobs Econ Dev Auth Rev
Woodlands at Furman Proj Ser A............ 6.000 11/15/37 1,800,720
1,000 South Carolina Jobs Econ Dev Episcopal
Home Still Proj Ser A..................... 6.000 05/15/17 981,710
2,000 South Carolina Jobs Econ Dev First Mtg
Westley Com Proj (Prerefunded @
10/01/10)................................. 7.750 10/01/24 2,292,900
3,000 Tobacco Settlement Rev Mgmt Auth SC Tob
Settlement Rev Ser B...................... 6.375 05/15/28 2,998,050
--------------
18,400,379
--------------
SOUTH DAKOTA 0.5%
1,010 Keystone, SD Econ Dev Rev Wtr Quality Mgmt
Corp A (AMT).............................. 6.000 12/15/18 940,057
1,750 Sioux Falls, SD Hlth Fac Rev Rfdg Dow
Rummel Vlg Proj........................... 5.000 11/15/33 1,376,305
4,045 Sioux Falls, SD Multi-Family Rev Rfdg Hsg
Inn on Westport Proj A1 (Acquired
08/04/06, Cost $4,045,000) (c)............ 6.000 03/01/40 3,515,105
1,025 Sioux Falls, SD Multi-Family Rev Rfdg Hsg
Inn on Westport Sub B (Acquired 08/04/06,
Cost $1,025,000) (c) (e).................. 7.500 03/01/40 938,234
--------------
6,769,701
--------------
TENNESSEE 4.1%
1,675 Blount Cnty, TN Hlth & Ed Fac Brd Rev Rfdg
Asbury Inc. Ser A......................... 5.125 04/01/23 1,482,090
3,000 Elizabethton, TN Hlth & Ed Fac Brd Rev
Rfdg & Impt Hosp Ser B (MBIA-IBC Insd)
(Prerefunded @ 7/01/12)................... 7.750 07/01/29 3,447,540
1,000 Johnson City, TN Hlth & Ed Fac Brd Hosp
Rev First Mtg MTN St Hlth Rfdg Ser A
(Prerefunded @ 7/01/12)................... 7.500 07/01/33 1,202,210
3,570 Johnson City, TN Hlth & Ed Fac Brd Hosp
Rev First Mtg MTN St Hlth Ser A........... 5.500 07/01/36 3,323,563
1,000 Johnson City, TN Hlth & Ed Fac Brd
Retirement Fac Rev Appalachian Christian
Vlg Proj Ser A............................ 6.250 02/15/32 941,580
2,230 Memphis, TN Hlth Ed & Hsg Fac Brd Multi-
Family Hsg Rev Hilldale Apt Proj (AMT).... 6.700 11/01/37 2,175,253
1,750 Shelby Cnty, TN Hlth & Ed Germantown Vlg
Ser A..................................... 7.000 12/01/23 1,664,495
</Table>
See Notes to Financial Statements 37
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------
TENNESSEE (CONTINUED)
$ 2,500 Shelby Cnty, TN Hlth & Ed Germantown Vlg
Ser A..................................... 7.250% 12/01/34 $ 2,406,850
1,000 Shelby Cnty, TN Hlth Ed & Hsg Fac Brd Rev
Trezevant Manor Proj Ser A................ 5.625 09/01/26 943,600
4,500 Shelby Cnty, TN Hlth Ed & Hsg Fac Brd Rev
Trezevant Manor Proj Ser A................ 5.750 09/01/37 4,187,205
800 Shelby Cnty, TN Hlth Ed Hsg Vlg
at Germantown............................. 6.250 12/01/34 658,904
5,700 Sullivan Cnty, TN Hlth Ed & Hsg Fac Brd
Hosp Rev Wellmont Hlth Sys Proj Ser C
(h)....................................... 5.250 09/01/36 4,994,169
4,700 Sullivan Cnty, TN Hlth Ed & Hsg First Mtg
Fac Brd Rev Inc Proj (e).................. 8.410 11/01/19 4,845,747
24,000 Tennessee Energy Acqusn Corp Gas Rev Ser A
(h)....................................... 5.250 09/01/22 22,923,568
2,515 Trenton, TN Hlth & Ed Fac Brd Rev Inc Proj
Ser A (Acquired 06/08/89, Cost $2,515,000)
(c) (e)................................... 10.000 11/01/19 2,298,056
1,160 Trenton, TN Hlth & Ed Fac Brd Rev Inc Proj
Ser B (Acquired 06/08/89, Cost $1,160,000)
(c) (e) (l)............................... 10.000 11/01/20 12
--------------
57,494,842
--------------
TEXAS 8.0%
155 Abia Dev Corp TX Arpt Fac Rev Austin Belly
Port Dev LLC Proj Ser A (AMT)............. 6.250 10/01/08 154,654
3,000 Abia Dev Corp TX Arpt Fac Rev Austin Belly
Port Dev LLC Proj Ser A (AMT)............. 6.500 10/01/23 2,824,410
2,000 Angelina & Neches Riv Auth TX Indl Dev
Corp Environmental Aspen Pwr LLC Proj
Ser A (AMT)............................... 6.500 11/01/29 1,648,820
1,000 Atlanta, TX Hosp Auth Fac Rev............. 6.700 08/01/19 1,004,340
2,035 Atlanta, TX Hosp Auth Fac Rev............. 6.750 08/01/29 2,036,852
990 Austin-Bergstorm Landhost Enterprises Inc
TX Arpt Hotel Sr Ser A.................... 6.750 04/01/27 707,830
955 Bexar Cnty, TX Hsg Fin Corp Multi-Family
Hsg Rev Woodland Ridge Apt Proj Ser A
(AMT)..................................... 7.000 01/01/39 970,853
735 Comal Cnty, TX Hlth Fac Dev Hlthcare Sys
McKenna Mem Proj Ser A (Prerefunded @
2/01/13).................................. 6.250 02/01/32 837,437
1,825 Dallas Cnty, TX Flood Ctl Dist No 1 Cap
Apprec Rfdg (Acquired 08/28/89,
Cost $660,829) (c) (e).................... * 08/01/11 1,534,715
3,445 Dallas Cnty, TX Flood Ctl Dist No 1
Rfdg...................................... 7.250 04/01/32 3,419,851
5,000 Dallas, TX Performing Arts Cultural Fac
Corp Cultural Ars Dallas Ctr Fndtn Proj
Ser A (MBIA Insd) (a) (n)................. 8.750 09/01/41 5,000,000
</Table>
38 See Notes to Financial Statements
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------
TEXAS (CONTINUED)
$ 2,500 Decatur, TX Hosp Auth Hosp Wise Regl Hlth
Sys Ser A................................. 7.000% 09/01/25 $ 2,536,450
3,500 Decatur, TX Hosp Auth Hosp Wise Regl Hlth
Sys Ser A................................. 7.125 09/01/34 3,582,670
1,500 Grand Prairie, TX Hsg Fin Corp Indpt Sr
Living Ctr Rev (b)........................ 7.500/3.750 07/01/17 1,338,165
3,000 Grand Prairie, TX Hsg Fin Corp Indpt Sr
Living Ctr Rev (b)........................ 7.750/2.580 01/01/34 2,493,630
5,675 Harris Cnty, TX Hlth Fac Dev Corp Hosp Rev
Ars Baylor College Med Ser A-2 (AMBAC
Insd) (a) (n)............................. 10.120 11/15/47 5,675,000
2,000 Harris Cnty, TX Hlth Fac Dev Corp Hosp Rev
Stars Mem Hermann Hlthcare Ser B-2 (AMBAC
Insd) (a)................................. 11.500 12/01/35 2,000,000
2,500 Harris Cnty, TX Hlth Fac Dev Corp Med Fac
Rev Ars Baylor College of Med Ser B (AMBAC
Insd) (a) (n)............................. 10.320 11/15/35 2,500,000
3,050 Harris Cnty, TX Hlth Fac Dev Corp Rev Ars
Christus Hlth Ser A-3 (FSA Insd) (a)
(n)....................................... 6.140 07/01/31 3,050,000
3,000 Houston, TX Hlth Fac Dev Corp Buckingham
Sr Living Cmnty Ser A (Prerefunded @
2/15/14).................................. 7.125 02/15/34 3,655,980
7,500 Lower CO River Auth TX Rev Rfdg Ser A (FSA
Insd) (h)................................. 5.875 05/15/14 7,848,188
17,760 Lower CO River Auth TX Rev Rfdg Ser A (FSA
Insd) (h)................................. 5.875 05/15/16 18,584,508
1,000 Lubbock, TX Hlth Fac Dev Corp Rev Dev Rfdg
First Mtg Carillon Proj A................. 6.500 07/01/26 970,290
10,000 Lubbock, TX Hlth Fac Dev Corp Rev Dev Rfdg
First Mtg Carillon Proj A................. 6.625 07/01/36 9,761,800
2,500 Lufkin, TX Hlth Fac Dev Corp Hlth Sys Rev
Mem Hlth Sys East TX...................... 5.500 02/15/37 2,247,475
2,210 Meadow Parc Dev Inc TX Multi-Family Rev
Hsg Meadow Parc Apt Proj.................. 6.500 12/01/30 2,210,376
2,500 Metropolitan Hlth Fac Dev Corp TX Wilson N
Jones Mem Hosp Proj....................... 7.250 01/01/31 2,523,875
1,500 Midlothian, TX Dev Auth Tax Increment
Contract Rev (Acquired 12/02/04, Cost
$1,150,000) (c)........................... 6.200 11/15/29 1,449,855
2,000 Midlothian, TX Dev Auth Tax Increment
Contract Rev (Prerefunded @ 5/15/11)...... 7.875 11/15/26 2,330,120
1,000 Richardson, TX Hosp Auth Rev Baylor &
Richardson Impt Rfdg...................... 5.625 12/01/28 953,550
2,500 Tarrant Cnty, TX Cultural Ed Fac Fin Corp
Retirement Fac Northwest Sr Hsg Edgemere
Proj Ser A................................ 6.000 11/15/36 2,373,975
</Table>
See Notes to Financial Statements 39
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------
TEXAS (CONTINUED)
$ 900 Texas St Dept Hsg & Cmnty Affairs Home Mtg
Rev (GNMA Collateralized) (AMT)........... 6.900% 07/02/24 $ 934,668
1,675 Texas St Pub Fin Auth Sch Excellence Ed
Proj Ser A (Acquired 12/02/04,
Cost $1,654,197) (c)...................... 7.000 12/01/34 1,703,693
1,500 Texas St Student Hsg Corp MSU Proj
Midwestern St Univ........................ 6.500 09/01/34 1,513,560
2,950 Tomball, TX Hosp Auth Rev Hosp Tomball
Regl Hosp................................. 6.000 07/01/29 2,942,655
1,000 Travis Cnty, TX Hlth Fac Dev Corp
Retirement Fac Rev Querencia Barton Creek
Proj...................................... 5.500 11/15/25 882,060
2,950 Travis Cnty, TX Hlth Fac Dev Corp
Retirement Fac Rev Querencia Barton Creek
Proj...................................... 5.650 11/15/35 2,577,297
905 Wichita Cnty, TX Hlth Fac Rolling Meadows
Fac Rfdg Ser A............................ 6.250 01/01/28 874,556
2,500 Woodhill Pub Fac Corp TX Hsg-Woodhill Apt
Proj...................................... 7.500 12/01/29 2,324,775
--------------
111,978,933
--------------
UTAH 0.2%
1,000 Hildale, UT Elec Rev Gas Turbine Elec Fac
Proj (l).................................. 7.800 09/01/15 240,000
585 Hildale, UT Elec Rev Gas Turbine Elec Fac
Proj (l).................................. 7.800 09/01/25 140,400
1,165 Hildale, UT Elec Rev Gas Turbine Elec Fac
Proj (l).................................. 8.000 09/01/20 279,600
2,315 Utah St Hsg Fin Agy Rev RHA Cmnty Svc Proj
Ser A..................................... 6.875 07/01/27 2,245,110
--------------
2,905,110
--------------
VERMONT 0.3%
2,750 Vermont Econ Dev Auth Mtg Rev Wake Robin
Corp Proj Ser A........................... 5.375 05/01/36 2,266,083
1,000 Vermont Ed & Hlth Bldg Fin Agy Rev
Bennington College Proj................... 6.625 10/01/29 1,004,230
525 Vermont Ed & Hlth Bldg Fin Agy Rev VT
Council Dev Mental Hlth Ser A............. 6.000 12/15/09 543,511
--------------
3,813,824
--------------
VIRGINIA 3.2%
4,000 Albemarle Cnty, VA Indl Dev Auth Ed Fac
Rev Covenant Sch Inc Ser A................ 7.750 07/15/32 4,267,800
5,000 Celebrate, VA South Cmnty Dev Celebrate VA
South Proj................................ 6.250 03/01/37 4,252,500
1,500 Farms New Kent, VA Cmnty Dev Ser B........ 5.450 03/01/36 1,081,065
1,500 Farms New Kent, VA Cmnty Dev Ser C........ 5.800 03/01/36 1,132,890
2,500 Henrico Cnty, VA Econ Dev Auth Residential
Care Fac Rev Utd Methodist Rfdg Ser A..... 6.500 06/01/22 2,550,275
</Table>
40 See Notes to Financial Statements
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------
VIRGINIA (CONTINUED)
$ 1,000 New Port Cmnty Dev Auth VA Spl Assmt...... 5.500% 09/01/26 $ 819,630
2,500 New Port Cmnty Dev Auth VA Spl Assmt...... 5.600 09/01/36 1,929,650
4,000 Peninsula Ports Auth VA Rfdg Residential
Care Fac Rev VA Baptist Homes Ser C....... 5.400 12/01/33 3,353,240
1,500 Peninsula Town Ctr Cmnty Dev Auth VA Spl
Oblig..................................... 6.350 09/01/28 1,353,495
1,250 Peninsula Town Ctr Cmnty Dev Auth VA Spl
Oblig..................................... 6.450 09/01/37 1,083,787
4,000 Roanoke Cnty, VA Indl Dev Auth Glebe Inc
Ser A..................................... 6.300 07/01/35 2,703,600
17,620 Tobacco Settlement Fin Corp VA Asset Bkd
(Prerefunded @ 6/01/15) (h)............... 5.625 06/01/37 19,804,439
1,700 Virginia Small Business Fin Auth Rev Indl
Dev SIL Clean Wtr Proj (AMT) (l).......... 7.250 11/01/24 55,250
--------------
44,387,621
--------------
WASHINGTON 1.1%
2,000 Kalispel Tribe Indians Priority Dist WA
Rev....................................... 6.750 01/01/38 1,913,960
1,000 King Cnty, WA Pub Hosp Dist No 004
Snoqualmie Vly Hosp....................... 7.250 12/01/15 1,028,160
8,830 Tobacco Settlement Auth WA Tob Settlement
Rev....................................... 6.625 06/01/32 8,865,232
1,000 Washington St Hsg Fin Commn Nonprofit Rev
Skyline at First Hill Proj Ser A.......... 5.625 01/01/27 893,910
4,000 Washington St Hsg Fin Commn Nonprofit Rev
Skyline at First Hill Proj Ser A.......... 5.625 01/01/38 3,400,640
--------------
16,101,902
--------------
WEST VIRGINIA 0.2%
2,250 Harrison Cnty, WV Cnty Commn Solid Waste
Disp Rev Rfdg Allegheny Energy
Ser D (AMT)............................... 5.500 10/15/37 2,070,450
--------------
WISCONSIN 1.1%
800 Baldwin, WI Hosp Rev Mtg Ser A............ 6.125 12/01/18 768,776
1,000 Baldwin, WI Hosp Rev Mtg Ser A............ 6.375 12/01/28 963,800
1,730 Milwaukee, WI Rev Sr Air Cargo (AMT)...... 6.500 01/01/25 1,740,985
1,000 Waukesha, WI Redev Auth Hsg Rfdg Sr
Kirkland Crossings Proj................... 5.500 07/01/31 931,140
1,500 Waukesha, WI Redev Auth Hsg Sr Kirkland
Crossings Proj Rfdg....................... 5.600 07/01/41 1,387,365
750 Wisconsin Hlth & Ed Fac Eastcastle Pl
Inc Proj.................................. 6.000 12/01/24 690,983
2,000 Wisconsin St Hlth & Ed Fac Auth Rev
Newcastle Place Inc. Ser A................ 6.150 12/01/37 1,825,680
1,000 Wisconsin St Hlth & Ed Fac Auth Rev
Oakwood Vlg Proj Ser A.................... 7.625 08/15/30 1,061,430
</Table>
See Notes to Financial Statements 41
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------
WISCONSIN (CONTINUED)
$ 1,500 Wisconsin St Hlth & Ed Fac Beaver Dam
Cmnty Hosp Inc Ser A...................... 6.750% 08/15/34 $ 1,526,580
1,000 Wisconsin St Hlth & Ed Fac Divine Savior
Hlthcare Ser C (Prerefunded @ 5/01/12).... 7.500 05/01/32 1,160,920
2,000 Wisconsin St Hlth & Ed Fac Fort Hlthcare
Inc Proj.................................. 6.100 05/01/34 1,982,860
1,500 Wisconsin St Hlth & Ed Fac Southwest Hlth
Ctr Ser A................................. 6.125 04/01/24 1,460,535
--------------
15,501,054
--------------
WYOMING 0.3%
3,000 Sweetwater Cnty, WY Solid Waste Disp Rev
FMC Corp Proj Rfdg (AMT).................. 5.600 12/01/35 2,724,480
1,500 Teton Cnty, WY Hosp Dist Hosp Saint Johns
Med Ctr................................... 6.750 12/01/27 1,489,335
--------------
4,213,815
--------------
PUERTO RICO 0.0%
75 Puerto Rico Pub Bldgs Auth Rev Govt Fac-I
(Comwth Gtd) (Prerefunded @ 7/01/14)...... 5.250 07/01/33 83,217
--------------
U.S. VIRGIN ISLANDS 0.3%
2,500 Northern Mariana Islands Ser A
(Prerefunded @ 6/01/10)................... 7.375 06/01/30 2,764,025
1,000 Virgin Islands Pub Fin Auth Refinery Fac
Rev Sr Sec Hovensa Refinery (AMT)......... 5.875 07/01/22 975,420
--------------
3,739,445
--------------
TOTAL LONG-TERM INVESTMENTS 107.4%
(Cost $1,613,264,446).................................................... 1,511,498,976
--------------
TOTAL SHORT-TERM INVESTMENTS 0.7%
(Cost $9,485,000)........................................................ 9,485,000
TOTAL INVESTMENTS 108.1%
(Cost $1,622,749,446).................................................... $1,520,983,976
</Table>
42 See Notes to Financial Statements
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
DESCRIPTION VALUE
- ------------------------------------------------------------------------------------------------
LIABILITY FOR FLOATING RATE NOTE OBLIGATIONS RELATED TO SECURITIES HELD (7.2%)
(Cost ($101,600,000))
(101,600) Notes with interest rates ranging from
2.22% to 4.00% at March 31, 2008 and
contractual maturities of collateral
ranging from 2014 to 2046 (See note 1)
(m)....................................... $ (101,600,000)
--------------
TOTAL NET INVESTMENTS 100.9%
(Cost $1,521,149,446)........................................................ 1,419,383,976
LIABILITIES IN EXCESS OF OTHER ASSETS (0.9%).................................. (12,859,307)
--------------
NET ASSETS 100.0%............................................................. $1,406,524,669
==============
</Table>
Percentages are calculated as a percentage of net assets.
* Zero coupon bond
(a) Variable Rate Coupon
(b) Interest is accruing at less than the stated coupon. Coupon is shown as
stated coupon/actual coupon.
(c) 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 4.1% of net assets.
(d) Security purchased on a when-issued or delayed delivery basis.
(e) The Fund owns 100% of the outstanding bond issuance.
(f) 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.
(g) Escrowed to Maturity
(h) Underlying security related to Inverse Floaters entered into by the Fund.
See Note 1.
(i) Security is a "step-up" bond where the coupon increases or steps up at a
predetermined date.
(j) Inverse Floating Rate
(k) Floating Rate Coupon
(l) Non-income producing security.
(m) Floating rate notes. The interest rates shown reflect the rates in the
effect at March 31, 2008.
See Notes to Financial Statements 43
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
(n) Security includes a feature allowing the Fund an option on any interest rate
payment date to offer the security for sale at par. The sale is contingent
upon market conditions.
ACA--American Capital Access
AMBAC--AMBAC Indemnity Corp.
AMT--Alternative Minimum Tax
Comwth--Commonwealth of Puerto Rico
FGIC--Financial Guaranty Insurance Co.
FSA--Financial Security Assurance Inc.
GNMA--Government National Mortgage Association
GTY AGMT--Guarantee Agreement
MBIA--Municipal Bond Investors Assurance Corp.
MBIA-IBC--MBIA Insured Bond Certificates
44 See Notes to Financial Statements
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
March 31, 2008 (Unaudited)
<Table>
ASSETS:
Total Investments (Cost $1,622,749,446)..................... $1,520,983,976
Cash........................................................ 476,329
Receivables:
Investments Sold.......................................... 31,337,883
Interest.................................................. 27,712,414
Fund Shares Sold.......................................... 1,526,923
Other....................................................... 240,263
--------------
Total Assets.......................................... 1,582,277,788
--------------
LIABILITIES:
Payables:
Floating Rate Note Obligations............................ 101,600,000
Investments Purchased..................................... 67,692,724
Fund Shares Repurchased................................... 3,103,594
Income Distributions...................................... 1,640,032
Investment Advisory Fee................................... 558,372
Distributor and Affiliates................................ 527,795
Trustees' Deferred Compensation and Retirement Plans........ 304,390
Accrued Expenses............................................ 326,212
--------------
Total Liabilities..................................... 175,753,119
--------------
NET ASSETS.................................................. $1,406,524,669
==============
NET ASSETS CONSIST OF:
Capital (Par value of $0.01 per share with an unlimited
number of shares authorized).............................. $1,646,460,915
Accumulated Undistributed Net Investment Income............. 1,722,210
Net Unrealized Depreciation................................. (101,765,470)
Accumulated Net Realized Loss............................... (139,892,986)
--------------
NET ASSETS.................................................. $1,406,524,669
==============
MAXIMUM OFFERING PRICE PER SHARE:
Class A Shares:
Net asset value and redemption price per share (Based on
net assets of $1,162,402,777 and 97,559,641 shares of
beneficial interest issued and outstanding)............. $ 11.91
Maximum sales charge (4.75%* of offering price)......... 0.59
--------------
Maximum offering price to public........................ $ 12.50
==============
Class B Shares:
Net asset value and offering price per share (Based on
net assets of $79,359,218 and 6,664,863 shares of
beneficial interest issued and outstanding)............. $ 11.91
==============
Class C Shares:
Net asset value and offering price per share (Based on
net assets of $164,231,046 and 13,673,427 shares of
beneficial interest issued and outstanding)............. $ 12.01
==============
Class I Shares:
Net asset value and offering price per share (Based on
net assets of $531,628 and 44,665 shares of beneficial
interest issued
and outstanding)........................................ $ 11.90
==============
</Table>
* On sales of $100,000 or more, the sales charge will be reduced.
See Notes to Financial Statements 45
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
FINANCIAL STATEMENTS continued
STATEMENT OF OPERATIONS
For the Six Months Ended March 31, 2008 (Unaudited)
<Table>
INVESTMENT INCOME:
Interest.................................................... $ 51,220,679
-------------
EXPENSES:
Interest and Residual Trust Expenses........................ 3,958,030
Investment Advisory Fee..................................... 3,426,589
Distribution (12b-1) and Service Fees
Class A................................................... 1,509,003
Class B................................................... 430,413
Class C................................................... 847,189
Transfer Agent Fees......................................... 339,507
Accounting and Administrative Expenses...................... 146,332
Custody..................................................... 140,474
Reports to Shareholders..................................... 89,885
Professional Fees........................................... 82,903
Registration Fees........................................... 57,324
Trustees' Fees and Related Expenses......................... 25,962
Other....................................................... 37,255
-------------
Total Expenses.......................................... 11,090,866
Less Credits Earned on Cash Balances.................... 15,894
-------------
Net Expenses............................................ 11,074,972
-------------
NET INVESTMENT INCOME....................................... $ 40,145,707
=============
REALIZED AND UNREALIZED GAIN/LOSS:
Realized Gain/Loss:
Investments............................................... $ (10,273,120)
Futures................................................... (3,279,765)
-------------
Net Realized Loss........................................... (13,552,885)
-------------
Unrealized Appreciation/Depreciation:
Beginning of the Period................................... 6,828,549
End of the Period......................................... (101,765,470)
-------------
Net Unrealized Depreciation During the Period............... (108,594,019)
-------------
NET REALIZED AND UNREALIZED LOSS............................ $(122,146,904)
=============
NET DECREASE IN NET ASSETS FROM OPERATIONS.................. $ (82,001,197)
=============
</Table>
46 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 SIX FOR THE
MONTHS ENDED YEAR ENDED
MARCH 31, 2008 SEPTEMBER 30, 2007
------------------------------------
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income................................. $ 40,145,707 $ 81,520,408
Net Realized Loss..................................... (13,552,885) (10,249,973)
Net Unrealized Depreciation During the Period......... (108,594,019) (66,824,924)
-------------- --------------
Change in Net Assets from Operations.................. (82,001,197) 4,445,511
-------------- --------------
Distributions from Net Investment Income:
Class A Shares...................................... (33,150,444) (69,372,970)
Class B Shares...................................... (2,030,603) (4,750,158)
Class C Shares...................................... (3,959,653) (8,315,260)
Class I Shares...................................... (9,099) -0-
-------------- --------------
Total Distributions................................... (39,149,799) (82,438,388)
-------------- --------------
NET CHANGE IN NET ASSETS FROM INVESTMENT ACTIVITIES... (121,150,996) (77,992,877)
-------------- --------------
FROM CAPITAL TRANSACTIONS:
Proceeds from Shares Sold............................. 238,763,002 204,818,983
Net Asset Value of Shares Issued Through Dividend
Reinvestment........................................ 27,810,292 56,452,751
Cost of Shares Repurchased............................ (245,959,827) (332,787,775)
-------------- --------------
NET CHANGE IN NET ASSETS FROM CAPITAL TRANSACTIONS.... 20,613,467 (71,516,041)
-------------- --------------
TOTAL DECREASE IN NET ASSETS.......................... (100,537,529) (149,508,918)
NET ASSETS:
Beginning of the Period............................... 1,507,062,198 1,656,571,116
-------------- --------------
End of the Period (Including accumulated undistributed
net investment income of $1,722,210 and $726,302,
respectively)....................................... $1,406,524,669 $1,507,062,198
============== ==============
</Table>
See Notes to Financial Statements 47
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
FINANCIAL STATEMENTS continued
Statement of Cash Flows
For the Period Ended March 31, 2008 (Unaudited)
<Table>
CHANGE IN NET ASSETS FROM OPERATIONS........................ $ (82,001,197)
-------------
ADJUSTMENTS TO RECONCILE THE CHANGE IN NET ASSETS FROM
OPERATIONS TO NET CASH PROVIDED BY OPERATING ACTIVITIES:
Purchases of Investments.................................. (156,952,387)
Proceeds from Sales of Investments........................ 254,322,602
Net Purchases of Short-Term Investments................... (5,885,000)
Amortization of Premium................................... 841,582
Accretion of Discount..................................... (1,148,675)
Net Realized Loss on Investments.......................... 10,273,120
Net Change in Unrealized Depreciation on Investments...... 107,375,039
Increase in Interest Receivables and Other Assets......... (1,593,845)
Increase in Receivable for Investments Sold............... (24,468,843)
Increase in Accrued Expenses and Other Payables........... 76,807
Increase in Investments Purchased Payable................. 57,295,584
Change in Custodian Bank Payable.......................... (3,322,352)
-------------
Total Adjustments....................................... 236,813,632
-------------
NET CASH PROVIDED BY OPERATING ACTIVITIES................... 154,812,435
-------------
CASH FLOWS FROM FINANCING ACTIVITIES........................
Proceeds from Shares Sold................................. 240,435,411
Repurchased Shares........................................ (246,338,719)
Dividends Paid (net of reinvested dividends of
$27,810,292)............................................ (11,622,798)
Proceeds from and Repayments of Floating Rate Note
Obligations............................................. (136,810,000)
-------------
Net Cash Provided by Financing Activities............... (154,336,106)
-------------
NET INCREASE IN CASH........................................ 476,329
Cash at the Beginning of the Period......................... --
-------------
CASH AT THE END OF THE PERIOD............................... $ 476,329
=============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash Paid During the period for Interest.................... $ 3,958,030
=============
</Table>
48 See Notes to Financial Statements
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>
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
CLASS A SHARES MARCH 31, ----------------------------------------------------
2008 2007 2006 2005 2004 2003
-----------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF
THE PERIOD................... $ 12.94 $ 13.59 $ 13.23 $ 13.00 $13.03 $13.21
-------- -------- -------- -------- ------ ------
Net Investment Income........ 0.35(a) 0.69(a) 0.71(a) 0.72(a) 0.74(a) 0.79
Net Realized and Unrealized
Gain/Loss.................. (1.04) (0.64) 0.37 0.27 -0- (0.25)
-------- -------- -------- -------- ------ ------
Total from Investment
Operations................... (0.69) 0.05 1.08 0.99 0.74 0.54
-------- -------- -------- -------- ------ ------
Less:
Distributions from Net
Investment Income.......... 0.34 0.70 0.72 0.76 0.77 0.72
-------- -------- -------- -------- ------ ------
NET ASSET VALUE, END OF THE
PERIOD....................... $ 11.91 $ 12.94 $ 13.59 $ 13.23 $13.00 $13.03
======== ======== ======== ======== ====== ======
Total Return (b)............... -5.38%* 0.26% 8.41% 7.75% 5.87% 4.21%
Net Assets at End of the Period
(In millions)................ $1,162.4 $1,245.4 $1,338.7 $1,267.3 $766.1 $560.9
Ratio of Expenses to Average
Net Assets................... 1.38% 1.73% 1.39% 1.04% 0.99% 0.92%
Ratio of Net Investment Income
to Average Net Assets........ 5.60% 5.11% 5.34% 5.41% 5.74% 6.07%
Portfolio Turnover............. 10%* 28% 48% 34% 10% 14%
SUPPLEMENTAL RATIO:
Ratio of Expenses to Average
Net Assets (Excluding
Interest and Residual Trust
Expenses).................... 0.84% 0.82% 0.84% 0.86% 0.91% 0.89%
</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 49
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>
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
CLASS B SHARES MARCH 31, ------------------------------------------
2008 2007 2006 2005 2004 2003
-------------------------------------------------------
NET ASSET VALUE, BEGINNING OF THE
PERIOD............................. $12.93 $13.58 $13.22 $12.99 $13.02 $13.20
------ ------ ------ ------ ------ ------
Net Investment Income (a).......... 0.30 0.59 0.61 0.62 0.65 0.69
Net Realized and Unrealized
Gain/Loss........................ (1.03) (0.65) 0.37 0.27 (0.01) (0.25)
------ ------ ------ ------ ------ ------
Total from Investment Operations..... (0.73) (0.06) 0.98 0.89 0.64 0.44
------ ------ ------ ------ ------ ------
Less:Distributions from Net
Investment Income.................. 0.29 0.59 0.62 0.66 0.67 0.62
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF THE PERIOD... $11.91 $12.93 $13.58 $13.22 $12.99 $13.02
====== ====== ====== ====== ====== ======
Total Return (b)..................... -5.66%* -0.49% 7.54% 7.04% 5.07% 3.42%
Net Assets at End of the Period (In
millions).......................... $ 79.4 $ 91.4 $120.0 $144.9 $123.8 $115.6
Ratio of Expenses to Average Net
Assets............................. 2.13% 2.48% 2.14% 1.79% 1.75% 1.67%
Ratio of Net Investment Income to
Average Net Assets................. 4.85% 4.35% 4.58% 4.67% 5.00% 5.32%
Portfolio Turnover................... 10%* 28% 48% 34% 10% 14%
SUPPLEMENTAL RATIO:
Ratio of Expenses to Average Net
Assets (Excluding Interest and
Residual Trust Expenses)........... 1.59% 1.57% 1.59% 1.61% 1.67% 1.64%
</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.
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>
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
CLASS C SHARES MARCH 31, ------------------------------------------
2008 2007 2006 2005 2004 2003
-------------------------------------------------------
NET ASSET VALUE, BEGINNING OF THE
PERIOD............................ $13.04 $13.69 $13.32 $13.09 $13.11 $13.20
------ ------ ------ ------ ------ ------
Net Investment Income (a)......... 0.31 0.59 0.61 0.62 0.64 0.79
Net Realized and Unrealized
Gain/Loss....................... (1.05) (0.65) 0.38 0.27 0.01 (0.26)
------ ------ ------ ------ ------ ------
Total from Investment Operations.... (0.74) (0.06) 0.99 0.89 0.65 0.53
------ ------ ------ ------ ------ ------
Less: Distributions from Net
Investment Income................. 0.29 0.59 0.62 0.66 0.67 0.62
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF THE
PERIOD............................ $12.01 $13.04 $13.69 $13.32 $13.09 $13.11
====== ====== ====== ====== ====== ======
Total Return (b).................... -5.70%* -0.49% 7.55% 6.98% 5.10%(d) 4.10%(c)
Net Assets at End of the Period (In
millions)......................... $164.2 $170.3 $198.0 $200.0 $ 84.0 $ 34.3
Ratio of Expenses to Average Net
Assets............................ 2.13% 2.48% 2.14% 1.80% 1.73% 1.67%
Ratio of Net Investment Income to
Average Net Assets................ 4.85% 4.35% 4.59% 4.62% 4.94%(d) 6.00%(c)
Portfolio Turnover.................. 10%* 28% 48% 34% 10% 14%
SUPPLEMENTAL RATIO:
Ratio of Expenses to Average Net
Assets (Excluding Interest and
Residual Trust Expenses).......... 1.59% 1.57% 1.59% 1.62% 1.65% 1.64%
</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)
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>
DECEMBER 19, 2007
(COMMENCEMENT OF
CLASS I SHARES OPERATIONS) TO
MARCH 31, 2008
-----------------
NET ASSET VALUE, BEGINNING OF THE PERIOD.................... $12.46
------
Net Investment Income (a)................................. 0.20
Net Realized and Unrealized Gain/Loss..................... -0.58
------
Total from Investment Operations............................ -0.38
------
Less: Distributions from Net Investment Income............ 0.18
------
NET ASSET VALUE, END OF THE PERIOD.......................... $11.90
======
Total Return (b)............................................ -2.97%*
Net Assets at End of the Period (In millions)............... $ 0.5
Ratio of Expenses to Average Net Assets..................... 1.15%
Ratio of Net Investment Income to Average Net Assets........ 6.09%
Portfolio Turnover.......................................... 10%*
SUPPLEMENTAL RATIO:
Ratio of Expenses to Average Net Assets (Excluding Interest
and Residual Trust Expenses).............................. 0.61%
</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 on Fund shares.
52 See Notes to Financial Statements
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2008 (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.
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, 2008, the Fund had $22,343,635 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.
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
53
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2008 (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 adopted
the provisions of the Financial Accounting Standards Board ("FASB")
Interpretation No. 48 ("FIN 48") Accounting for Uncertainty in Income Taxes on
March 31, 2008. FIN 48 sets forth a minimum threshold for financial statement
recognition of the benefit of a tax position taken or expected to be taken in a
tax return. The implementation of FIN 48 did not result in any unrecognized tax
benefits in the accompanying financial statements. If applicable, the Fund
recognizes interest accrued related to unrecognized tax benefits in "Interest
Expense" and penalties in "Other" expenses on the Statement of Operations. The
Fund files tax returns with the U.S. Internal Revenue Service and various
states. Generally, each of the tax years in the four year period ended September
30, 2007, remains subject to examination by taxing authorities.
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, 2007, the Fund had an accumulated capital loss
carryforward for tax purposes of $121,633,269, 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
6,419,495 ......................................................... September 30, 2015
</Table>
At March 31, 2008, the cost and related gross unrealized appreciation and
depreciation are as follows:
<Table>
Cost of investments for tax purposes........................ $1,503,554,674
==============
Gross tax unrealized appreciation........................... $ 28,643,307
Gross tax unrealized depreciation........................... (112,814,005)
--------------
Net tax unrealized depreciation on investments.............. $ (84,170,698)
==============
</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, which are included in ordinary
income for tax purposes.
54
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2008 (UNAUDITED) continued
The tax character of distributions paid during the year ended September 30,
2007 were as follows:
<Table>
Distributions paid from:
Ordinary income........................................... $ 195,125
Tax-exempt income......................................... 82,599,666
-----------
$82,794,791
===========
</Table>
As of September 30, 2007, the components of distributable earnings on a tax
basis were as follows:
<Table>
Undistributed ordinary income............................... $ 20,904
Undistributed tax-exempt income............................. 3,680,322
</Table>
F. CREDIT EARNED ON CASH BALANCES During the six months ended March 31, 2008,
the Fund's custody fee was reduced by $15,894 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, 2008, Fund investments with a value of $152,454,469 are held
by the dealer trusts and serve as collateral for the $101,600,000 in floating
rate notes outstanding at that date. Contractual maturities of the floating rate
notes and interest rates in effect at March 31, 2008 are presented on the
Portfolio of Investments. The average floating rate notes outstanding and
average annual interest and fee rate related to residual interests during the
fiscal six months ended March 31, 2008 were $208,418,571 and 3.80%,
respectively.
55
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2008 (UNAUDITED) continued
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, 2008, the Fund recognized expenses of
approximately $23,400 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,
2008, the Fund recognized expenses of approximately $68,900 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" 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, 2008, the Fund recognized expenses of approximately $138,000
representing transfer agency fees paid to VKIS and its affiliates. 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 approximately $187,600
are included in "Other" assets on the Statement of Assets and Liabilities at
March 31, 2008. 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, 2008, Van Kampen, as Distributor for the
Fund, received commissions on sales of the Fund's Class A Shares of
approximately $230,300 and contingent deferred sales charge (CDSC) on redeemed
shares of approximately $144,700. Sales charges do not represent expenses of the
Fund.
56
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2008 (UNAUDITED) continued
3. CAPITAL TRANSACTIONS
For the six months ended March 31, 2008 and year ended September 30, 2007,
transactions were as follows:
<Table>
<Caption>
FOR THE FOR THE
SIX MONTHS ENDED YEAR ENDED
MARCH 31, 2008 SEPTEMBER 30, 2007
---------------------------- ----------------------------
SHARES VALUE SHARES VALUE
Sales:
Class A....................... 15,265,921 $ 191,445,668 13,359,816 $ 179,556,041
Class B....................... 363,000 4,542,883 254,573 3,420,137
Class C....................... 3,329,496 42,188,636 1,619,525 21,842,805
Class I....................... 47,116 585,815 -0- -0-
----------- ------------- ----------- -------------
Total Sales..................... 19,005,533 $ 238,763,002 15,233,914 $ 204,818,983
=========== ============= =========== =============
Dividend Reinvestment:
Class A....................... 1,951,200 $ 24,055,297 3,620,350 $ 48,736,241
Class B....................... 122,325 1,507,240 244,599 3,293,023
Class C....................... 180,346 2,238,827 325,970 4,423,487
Class I....................... 741 8,928 -0- -0-
----------- ------------- ----------- -------------
Total Dividend Reinvestment..... 2,254,612 $ 27,810,292 4,190,919 $ 56,452,751
=========== ============= =========== =============
Repurchases:
Class A....................... (15,884,346) $(198,535,428) (19,239,544) $(257,128,757)
Class B....................... (886,309) (11,008,752) (2,264,108) (30,483,079)
Class C....................... (2,890,071) (36,378,433) (3,350,119) (45,175,939)
Class I....................... (3,192) (37,214) -0- -0-
----------- ------------- ----------- -------------
Total Repurchases............... (19,663,918) $(245,959,827) (24,853,771) $(332,787,775)
=========== ============= =========== =============
</Table>
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 30 days of purchase. The redemption
fee is paid directly to the Fund and allocated on pro rata basis to each class
of shares. For the six months ended March 31, 2008, the Fund received redemption
fees of approximately $25,800, 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 $156,952,387 and 254,322,602,
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,
57
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2008 (UNAUDITED) continued
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
counterparties 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, 2008, are as
follows:
<Table>
<Caption>
CONTRACTS
Outstanding at September 30, 2007........................... 810
Futures Opened.............................................. 498
Futures Closed.............................................. (1,308)
------
Outstanding at March 31, 2008............................... -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.
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,
58
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2008 (UNAUDITED) continued
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 $1,623,000 and $200,500
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 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. As of March 31, 2008, the Adviser does not believe the adoption of
SFAS 157 will impact the amounts reported in the financial statements, however,
additional disclosures will be required about the inputs used to develop the
measurements of fair value and the effect of certain measurements reported on
the Statement of Operations for a fiscal period.
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
KEVIN KLINGERT
Vice President
AMY R. DOBERMAN
Vice President
STEFANIE V. CHANG
Vice President and Secretary
JOHN L. SULLIVAN
Chief Compliance Officer
STUART N. SCHULDT
Chief Financial Officer and Treasurer
INVESTMENT ADVISER
VAN KAMPEN ASSET MANAGEMENT
522 Fifth Avenue
New York, New York 10036
DISTRIBUTOR
VAN KAMPEN FUNDS INC.
522 Fifth Avenue
New York, New York 10036
SHAREHOLDER SERVICING AGENT
VAN KAMPEN INVESTOR SERVICES INC.
P.O. Box 219286
Kansas City, Missouri 64121-9286
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.
522 Fifth Avenue
New York, New York 10036
www.vankampen.com
Copyright (C)2008 Van Kampen Funds Inc.
All rights reserved. Member FINRA/SIPC.
39, 339, 539
STMISAN 5/08
(VAN KAMPEN INVESTMENTS LOGO) IU08-02798P-Y03/08
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, 2008.
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 3/31/08
<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
W/O 4.75% W/O 4.00% W/O 1.00% W/O
AVERAGE ANNUAL SALES SALES SALES SALES SALES SALES SALES
TOTAL RETURNS CHARGES CHARGE CHARGES CHARGE CHARGES CHARGE CHARGES
Since Inception 6.26% 6.03% 4.21% 4.21% 3.90% 3.90% 1.00%
10-year 3.93 3.43 3.52 3.52 3.19 3.19 -
5-year 2.41 1.42 2.38 2.12 1.68 1.68 -
1-year -3.65 -8.23 -3.64 -7.35 -4.40 -5.32 -3.46
6-month -2.29 -6.93 -2.25 -6.08 -2.66 -3.62 -2.17
- ----------------------------------------------------------------------------------------
30-Day SEC Yield 4.28% 4.49% 3.90% 4.74%
</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, (iii)
qualified state tuition plan (529 plan) accounts, (iv) institutional clients
with assets of at least $1 million and (v) certain Van Kampen investment
companies. 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, 2008
MARKET CONDITIONS
The financial markets experienced significant volatility throughout the
six-month reporting period as many large banks and financial firms began writing
down mortgage-related losses, and liquidity and credit availability became even
more restricted. At the same time, the pace of economic growth began to slow,
with gross domestic product (GDP) growth measuring an anemic 0.6 percent for the
fourth quarter of 2007. As weaker economic data was released in the first
quarter of 2008, fears of recession grew and consumer confidence waned,
prompting investors to continue to seek the relative safety of high-quality
Treasury securities over other sectors of the fixed income market.
The municipal bond market faced additional headwinds as various monoline bond
insurers experienced credit quality downgrades and the auction rate and variable
rate markets deteriorated. As a result, the municipal market underperformed
Treasuries for the overall period, with municipal bond prices reaching
historically attractive levels relative to Treasury bonds in the first quarter
of 2008. While yields on short-dated municipal securities declined, yields on
intermediate- and long-dated securities rose, leading to the steepest yield
curve in the past four years as the spread between one-year and 30-year
maturities reached 343 basis points. After a record year for new municipal bond
issuance in 2007, the amount of new issues coming to market in the first quarter
of 2008 declined by roughly 25 percent due in large part to a substantial drop
in refunding issuance. Insured bond issuance declined dramatically in the first
quarter, from approximately 50 percent to 25 percent of total new-issue supply.
Although issuance by the State of California declined as well, it remained the
largest issuer of municipal bonds in the country.
The Federal Reserve (the "Fed") took various steps to ease the liquidity crisis
and boost the economy during the period. Not only did the Fed reduce the target
federal funds rate from 4.75 percent to 2.25 percent by the end of the period,
but in an unprecedented move, it granted primary brokerage firms access to its
discount window and loosened its collateral requirements, extending loans of
Treasury securities in exchange for lower quality, less liquid securities.
Finally, in the biggest headline event, the Fed arranged and supported JP Morgan
Chase's purchase of Bear Stearns, which was viewed by many as necessary to avoid
serious market repercussions had the firm failed.
PERFORMANCE ANALYSIS
All share classes of Van Kampen California Insured Tax Free Fund underperformed
the Lehman Brothers California Insured Municipal Bond Index and the Lehman
Brothers Municipal Bond Index for the six months ended March 31, 2008, assuming
no deduction of applicable sales charges.
2
TOTAL RETURNS FOR THE SIX-MONTH PERIOD ENDED MARCH 31, 2008
<Table>
<Caption>
- ----------------------------------------------------------------------------------------
LEHMAN BROTHERS
CALIFORNIA INSURED LEHMAN BROTHERS
MUNICIPAL BOND MUNICIPAL BOND
CLASS A CLASS B CLASS C CLASS I INDEX INDEX
-2.29% -2.25% -2.66% -2.17% -0.53% 0.75%
- ----------------------------------------------------------------------------------------
</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.
Although the municipal bond market rebounded in the last month of the reporting
period and outperformed Treasuries, it was a difficult period overall,
particularly for the insured sector as the credit downgrades of various monoline
insurers put considerable pressure on prices. Rising rates in the intermediate
and long maturity portions of the yield curve also hurt the performance of these
more interest-rate sensitive securities. Furthermore, the State of California
has been particularly hard hit by the ongoing deterioration in the residential
housing market. As a result, spreads in the housing sector widened dramatically
during the period, negatively impacting its performance. Spreads in the tobacco
and health care sectors also widened considerably. As a result, the Fund's
holdings in these three sectors were the primary detractors from performance.
These positions were held mainly in the form of inverse floating-rate
securities,* which are uninsured but still investment grade issues, and did
serve to enhance the Fund's income and diversification during the period.
We continued to favor longer maturity bonds in an effort to capture higher
yields, which resulted in a longer duration (a measure of interest-rate
sensitivity) for the portfolio. To reduce that duration somewhat, we used a
Treasury futures hedge for much of the period. Unfortunately, rising rates on
the long end of the curve coupled with the Treasury market rally caused this
positioning to detract from performance. We did, however, unwind the hedge,
investing the proceeds in auction rate securities for their favorable yields.
Holdings in other sectors, however, contributed positively to performance. In
particular, transportation (airport), industrial development revenue and
pollution control revenue bonds were additive to returns.
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.
3
<Table>
<Caption>
TOP FIVE SECTORS AS OF 3/31/08
Tax Allocation 26.4%
Public Education 12.8
Public Buildings 11.2
Hospital 9.4
Higher Education 8.1
<Caption>
RATINGS ALLOCATIONS AS OF 3/31/08
AAA/Aaa 66.2%
AA/Aa 12.3
A/A 10.5
BBB/Baa 10.2
Non-Rated 0.8
</Table>
Subject to change daily. Provided for informational purposes only and should not
be deemed as a recommendation to buy or sell the securities mentioned or
securities in the 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.
4
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 email 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.
5
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 P.O.
Box 219286, Kansas City, MO 64121-9286. 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.
6
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 10/1/07 - 3/31/08.
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*
-------------------------------------------------
10/1/07 3/31/08 10/1/07-3/31/08
Class A
Actual..................................... $1,000.00 $ 977.13 $ 7.51
Hypothetical............................... 1,000.00 1,017.40 7.67
(5% annual return before expenses)
Class B
Actual..................................... 1,000.00 977.50 7.56
Hypothetical............................... 1,000.00 1,017.35 7.72
(5% annual return before expenses)
Class C
Actual..................................... 1,000.00 973.39 11.10
Hypothetical............................... 1,000.00 1,013.75 11.33
(5% annual return before expenses)
Class I
Actual..................................... 1,000.00 978.34 6.28
Hypothetical............................... 1,000.00 1,018.65 6.41
(5% annual return before expenses)
</Table>
* Expenses are equal to the Fund's annualized expense ratio of 1.52%, 1.53%,
2.25% and 1.27%, for Class A, B, C and I Shares, respectively, multiplied by
the average account value over the period, multiplied by 183/366 (to reflect
the one-half year period). The expense ratios for Class B and C Shares
reflect actual 12b-1 fees of less than 1%.
Assumes all dividends and distributions were reinvested.
7
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*
-------------------------------------------------
10/1/07 3/31/08 10/1/07-3/31/08
Class A
Actual..................................... $1,000.00 $ 977.13 $4.60
Hypothetical............................... 1,000.00 1,020.35 4.70
(5% annual return before expenses)
Class B
Actual..................................... 1,000.00 977.50 4.60
Hypothetical............................... 1,000.00 1,020.35 4.70
(5% annual return before expenses)
Class C
Actual..................................... 1,000.00 973.39 8.19
Hypothetical............................... 1,000.00 1,016.70 8.37
(5% annual return before expenses)
Class I
Actual..................................... 1,000.00 978.34 3.36
Hypothetical............................... 1,000.00 1,021.60 3.44
(5% annual return before expenses)
</Table>
* Expenses are equal to the Fund's annualized expense ratio of 0.93%, 0.93%,
1.66% and 0.68%, for Class A, B, C and I Shares, respectively, multiplied by
the average account value over the period, multiplied by 183/366 (to reflect
the one-half year period). The expense ratios for Class B and C Shares
reflect actual 12b-1 fees of less than 1%.
Assumes all dividends and distributions were reinvested.
8
VAN KAMPEN CALIFORNIA INSURED TAX FREE FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED)
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------
MUNICIPAL BONDS 112.8%
CALIFORNIA 112.3%
$ 1,925 Alhambra, CA City Elem Sch Dist Cap Apprec Ser A
(FSA Insd) (a).................................. * 09/01/20 $ 1,060,444
2,365 Apple Valley, CA Pub Fin Town Hall Annex Proj
Ser A (AMBAC Insd).............................. 5.000% 09/01/27 2,353,270
1,430 Bay Area Govt Assn CA Lease Rev Cap Proj Ser A
(AMBAC Insd) (a)................................ 5.250 07/01/17 1,527,283
2,735 Bay Area Govt Assn CA Lease West Sacramento Ser
A (XLCA Insd) (a)............................... 5.000 09/01/29 2,688,997
1,000 Bonita, CA Uni Sch Dist Election 2004 Ser A
(MBIA Insd)..................................... 5.000 08/01/28 1,009,120
1,070 Bonita, CA Uni Sch Dist Election 2004 Ser A
(MBIA Insd)..................................... 5.250 08/01/24 1,101,843
1,850 Brea & Olinda, CA Uni Sch Dist Rfdg Ser A (FSA
Insd) (a)....................................... 5.500 08/01/18 1,967,697
1,745 Byron Bethany JT Pwrs Auth CA Lease Rev Admin
Bldg Proj Ser A (CIFG Insd) (a)................. 4.625 10/01/32 1,782,832
2,165 California Ed Fac Auth Rev Univ Pacific (MBIA
Insd)........................................... 5.875 11/01/20 2,283,469
10,000 California Hlth Fac Fin Auth Rev Sutter Hlth Ser
A (b)........................................... 5.000 11/15/42 9,375,900
2,125 California Hlth Facs Fin Auth Rev Ars Insd Hlth
Fac Catholic Ser C (AMBAC Insd) (c) (e)......... 7.110 07/01/32 2,125,000
3,000 California Hlth Facs Fin Auth Rev Ars Insd Hlth
Fac Catholic Ser D (AMBAC Insd) (c) (e)......... 7.110 07/01/25 3,000,000
2,000 California Mobilehome Pk Fin Auth Rev Union City
Tropics Rfdg Ser A.............................. 4.500 12/15/36 1,590,300
1,050 California Spl Dist Assn Fin Corp Ctf Partn Pgm
Ser DD (FSA Insd) (a)........................... 5.625 01/01/27 1,061,865
5,000 California St Dept Wtr Res Pwr Supply Rev Ser A
(MBIA-IBC Insd) (b)............................. 5.375 05/01/21 5,540,475
945 California St (FGIC Insd)....................... 6.250 09/01/12 1,040,388
1,000 California St Univ Rev & Colleges Systemwide Ser
A (AMBAC Insd).................................. 5.375 11/01/18 1,052,110
3,175 California St Rfdg (FGIC Insd).................. 5.000 02/01/23 3,184,303
5,000 California St Var Purp (b)...................... 5.000 06/01/37 4,887,150
1,000 California Statewide Cmnty Dev Auth Rev CA
Statewide Inland Regl Ctr Proj.................. 5.375 12/01/37 901,680
1,000 California Statewide Cmntys Dev Auth Rev Ars
Insd Hlth Fac Catholic Ser D (FSA Insd) (c)
(e)............................................. 6.500 07/01/41 1,000,000
1,250 California Statewide Cmntys Dev Auth Rev Ars
Insd Ser D (FSA Insd) (c) (e)................... 5.640 04/01/32 1,250,000
1,000 California Statewide Cmntys Dev Auth Rev Sutter
Hlth Ser A...................................... 5.000 11/15/43 935,020
1,900 California Statewide Cmntys Dev Auth Wtr Rev Ser
A (FSA Insd).................................... 5.000 10/01/26 1,938,912
</Table>
See Notes to Financial Statements 9
VAN KAMPEN CALIFORNIA INSURED TAX FREE FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------
CALIFORNIA (CONTINUED)
$ 2,000 Castaic Lake Wtr Agy CA Ctf Partn Wtr Sys Impt
Proj Rfdg Ser A (MBIA Insd)..................... 7.000% 08/01/12 $ 2,301,900
3,000 Castaic Lake Wtr Agy CA Rev Ctf Partn Ser A
(MBIA Insd)..................................... 5.250 08/01/23 3,092,400
100 Cerritos, CA Cmnty College Election 2004 Ser A
(MBIA Insd)..................................... 5.000 08/01/26 101,402
125 Cerritos, CA Cmnty College Election 2004 Ser A
(MBIA Insd)..................................... 5.000 08/01/28 125,936
1,160 Coachella, CA Fin Auth Tax Proj 1 & 2 Rfdg Ser A
(XLCA Insd) (a)................................. 5.250 12/01/30 1,135,837
3,400 Contra Costa, CA Cmnty College Election 2002
(MBIA Insd)..................................... 5.000 08/01/29 3,425,466
1,150 Corona, CA Redev Agy Tax Alloc Temescal Canyon
Proj Area Ser A (AGL Insd)...................... 4.375 11/01/26 1,083,426
2,400 Dinuba, CA Redev Agy Tax Alloc Merged City Redev
Proj No 2 Rfdg (AMBAC Insd)..................... 5.000 09/01/34 2,390,832
2,870 Dinuba, CA Redev Agy Tax Alloc Merged City Redev
Proj No 2 Rfdg (AMBAC Insd)..................... 5.000 09/01/36 2,776,897
1,200 Fairfield, CA Cmnty Facs Dist Spl Tax No 3 North
Cordelia Gen Impt (d)........................... 6.000 09/01/32 1,228,860
2,330 Fairfield, CA Ctfs Partn Fairfield Wtr Fin Ser A
(XLCA Insd)..................................... 5.000 04/01/42 2,235,961
1,280 Fillmore, CA Uni Sch Dist Election 2004 Ser A
(FSA Insd)...................................... 5.000 08/01/27 1,300,326
1,480 Fontana, CA Redev Agy Tax Alloc Dwntwn Redev
Proj Rfdg (MBIA Insd)........................... 5.000 09/01/21 1,510,000
1,735 Fortuna, CA Pub Fin Auth Rev Escrow (AGL
Insd)........................................... 5.000 11/01/38 1,726,845
650 Fresno, CA Jt Pwrs Fin Auth Ser A (FSA Insd).... 5.000 06/01/17 688,421
590 Fresno, CA Uni Sch Dist Rfdg Ser C (MBIA Insd)
(a)............................................. 5.900 08/01/17 635,005
630 Fresno, CA Uni Sch Dist Rfdg Ser C (MBIA Insd)
(a)............................................. 5.900 08/01/18 680,293
675 Fresno, CA Uni Sch Dist Rfdg Ser C (MBIA Insd)
(a)............................................. 5.900 08/01/19 732,807
720 Fresno, CA Uni Sch Dist Rfdg Ser C (MBIA Insd)
(a)............................................. 5.900 08/01/20 785,650
2,000 Glendale, CA Redev Agy Tax Ctr Glendale Redev
Proj (MBIA Insd)................................ 5.250 12/01/20 2,069,480
2,425 Glendora, CA Pub Fin Auth Tax Alloc Proj No 1
Ser A (MBIA Insd)............................... 5.000 09/01/24 2,448,935
2,000 Golden St Tob Securitization Corp CA Tob
Settlement Rev Asset Bkd Sr Ser A1.............. 5.750 06/01/47 1,772,560
5,000 Golden St Tob Securitization Corp CA Tob
Settlement Rev Asset Bkd Sr Ser A1 (b).......... 5.125 06/01/47 4,046,050
7,000 Golden St Tob Securitization Corp CA Tob
Settlement Rev Asset Bkd Sr Ser A1 (b).......... 5.750 06/01/47 6,204,030
</Table>
10 See Notes to Financial Statements
VAN KAMPEN CALIFORNIA INSURED TAX FREE FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------
CALIFORNIA (CONTINUED)
$ 2,230 Hanford, CA High Sch Dist Election 1998 Ser C
(MBIA Insd) (a)................................. 5.700% 08/01/28 $ 2,457,148
2,275 Hawaiian Gardens, CA Redev Agy Proj No 1 Tax
Alloc Ser A (AMBAC Insd)........................ 5.000 12/01/25 2,272,202
3,000 Hesperia, CA Pub Fin Auth Rev Redev & Hsg Proj
Ser A (XLCA Insd)............................... 5.000 09/01/31 2,818,710
2,500 Huntington Beach, CA High Election 2004 (FSA
Insd)........................................... 5.000 08/01/26 2,535,050
2,000 Imperial Irr Dist CA Ctf Partn Elec Sys Proj
(FSA Insd)...................................... 5.250 11/01/23 2,073,260
1,950 Imperial Irr Dist CA Ctf Partn Wtr Sys Proj
(AMBAC Insd) (a)................................ 5.000 07/01/19 1,990,560
2,000 Inglewood, CA Redev Agy Tax Alloc Merged Redev
Proj Rfdg Ser A (AMBAC Insd).................... 5.250 05/01/23 2,108,500
1,715 Irvine, CA Pub Fac & Infrastructure Ser B (AMBAC
Insd) (a)....................................... 5.000 09/02/23 1,735,940
2,000 La Canada, CA Uni Sch Dist Election 2004 Ser A
(MBIA Insd)..................................... 5.500 08/01/28 2,082,180
2,000 La Quinta, CA Fin Auth Loc Ser A (AMBAC Insd)... 5.250 09/01/24 2,056,900
2,000 La Quinta, CA Redev Agy Tax Alloc Redev Proj
Area No 1 (AMBAC Insd).......................... 5.000 09/01/22 2,052,880
1,000 Livermore-Amador Vly Wtr Mgmt Agy CA Swr Rev Ser
A (AMBAC Insd).................................. 5.250 08/01/16 1,061,260
1,000 Lodi, CA Wastewater Sys Rev Ser A (FSA Insd).... 5.000 10/01/37 995,410
1,545 Long Beach, CA Bd Fin Auth Pub Lease Safety Fac
Proj (AMBAC Insd) (a)........................... 5.250 11/01/20 1,616,858
2,000 Long Beach, CA Cmnty College Dist 2002 Election
Ser B (FGIC Insd)............................... 5.000 05/01/25 2,036,920
1,975 Los Angeles, CA Ctf Partn Real Ppty Pgm Ser T
(MBIA Insd) (a)................................. 5.000 02/01/19 2,033,460
2,000 Los Angeles, CA Dept Wtr & Pwr Sys Ser C (MBIA
Insd)........................................... 5.000 07/01/26 2,022,300
1,165 Los Angeles, CA Mtg Rev FHA Sec 8 Asstd Proj
Rfdg Ser A (MBIA Insd).......................... 6.100 07/01/25 1,165,850
1,375 Los Angeles, CA Spl Assmt Landscaping & Dist No
96 Ser 1 (AMBAC Insd) (a)....................... 5.000 03/01/21 1,405,085
1,000 Los Angeles Cnty, CA Ctf Partn Disney Pkg Proj
Rfdg (AMBAC Insd)............................... 4.750 03/01/23 988,380
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 1,011,220
1,265 Los Angeles Cnty, CA Sch Regionalized Business
Svcs Ctf Partn Cap Apprec Pooled Fin Ser A
(AMBAC Insd).................................... * 08/01/24 529,807
1,000 Lynwood, CA Uni Sch Dist 2002 Election Ser A
(FSA Insd)...................................... 5.000 08/01/27 1,006,440
</Table>
See Notes to Financial Statements 11
VAN KAMPEN CALIFORNIA INSURED TAX FREE FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------
CALIFORNIA (CONTINUED)
$ 1,500 Modesto, CA Irr Rect Ctf Partn Cap Impt Ser A
(FSA Insd)...................................... 5.250% 07/01/18 $ 1,568,580
1,105 Monrovia, CA Fin Auth Lease Rev Hillside
Wilderness Preserve (AMBAC Insd)................ 5.000 12/01/20 1,142,559
2,000 Montclair, CA Redev Agy Tax Redev Proj No V Rfdg
(MBIA Insd)..................................... 5.000 10/01/20 2,056,320
1,000 Morongo Band Of Mission Indians CA Enterprise
Rev Indians Enterprise Casino Ser B (g)......... 5.500 03/01/18 1,000,000
1,000 Morongo Band Of Mission Indians CA Enterprise
Rev Indians Enterprise Casino Ser B (g)......... 6.500 03/01/28 1,000,000
1,570 Mountain View, CA Shoreline Tax Alloc Ser A
(MBIA Insd) (a)................................. 5.250 08/01/16 1,659,411
1,105 National City, CA Cmnty Dev Commn Tax Alloc
Redev Proj Rfdg Ser B (AMBAC Insd).............. 5.250 08/01/32 1,111,851
1,000 Novato, CA Uni Sch Dist (FSA Insd).............. 5.000 08/01/28 1,011,290
3,915 Oak Grove, CA Sch Dist 1995 Election (FGIC
Insd)........................................... 5.250 08/01/25 3,970,828
1,300 Oceanside, CA Ctf Partn Rfdg Ser A (AMBAC
Insd)........................................... 5.200 04/01/23 1,323,452
1,145 Pacifica, CA Wastewtr Rev Rfdg (AMBAC Insd)..... 5.000 10/01/25 1,166,618
1,200 Palm Desert, CA Fin Auth Tax Alloc Rev Proj Area
No 4 Rfdg Ser A (MBIA Insd)..................... 5.000 10/01/29 1,176,756
1,340 Palm Springs, CA Fin Lease Rev Convention Ctr
Proj Rfdg Ser A (MBIA Insd)..................... 5.250 11/01/19 1,402,632
3,000 Palomar Pomerado Hlthcare Dist CA Ctf Partn Ser
B (FSA Insd) (c) (e)............................ 8.880 11/01/36 3,000,000
1,000 Palomar Pomerado Hlthcare Dist CA Ctf Partn Ser
C (FSA Insd) (c) (e)............................ 7.090 11/01/36 1,000,000
1,045 Panama-Buena Vista Uni Sch Dist CA Ctf Partn Sch
Constr Proj (MBIA Insd)......................... 5.000 09/01/30 1,042,158
2,020 Pomona, CA Pub Fin Auth Rev Merged Redev Proj
Ser AD (MBIA Insd) (a).......................... 5.000 02/01/15 2,112,455
1,110 Pomona, CA Pub Fin Auth Rev Merged Redev Proj
Ser AD (MBIA Insd) (a).......................... 5.000 02/01/16 1,160,805
1,000 Pomona, CA Pub Fin Auth Rev Sub Merged Redev
Proj............................................ 5.125 02/01/33 881,240
1,430 Pomona, CA Pub Fin Auth Rev Swr Proj Ser BA
(AMBAC Insd).................................... 4.500 12/01/46 1,275,560
1,360 Port Hueneme, CA Ctf Partn Cap Impt Pgm Rfdg
(MBIA Insd)..................................... 6.000 04/01/19 1,566,747
1,055 Poway, CA Redev Agy Tax Alloc Paguay Redev Proj
(AMBAC Insd) (a)................................ 5.375 06/15/20 1,113,732
3,000 Rancho Cucamonga, CA Redev Agy Rancho Redev Proj
(MBIA Insd)..................................... 5.375 09/01/25 3,079,770
1,000 Rancho Cucamonga, CA Redev Agy Tax Alloc Rancho
Redev Hsg Set Aside Ser A (MBIA Insd)........... 5.000 09/01/34 989,830
</Table>
12 See Notes to Financial Statements
VAN KAMPEN CALIFORNIA INSURED TAX FREE FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------
CALIFORNIA (CONTINUED)
$ 2,000 Rancho Mirage, CA Jt Pwrs Fin Auth Rev
Eisenhower Med Ctr Ser A........................ 5.000% 07/01/47 $ 1,776,440
860 Redding, CA Elec Sys Rev Ctf Partn (MBIA Insd)
(f) (h)......................................... 8.983 07/01/22 1,154,498
1,400 Redding, CA Redev Agy Tax Alloc Canby Hilltop
Cypress Redev Ser A (MBIA Insd)................. 5.000 09/01/23 1,421,826
3,775 Riverside, CA Lease Rev Ctf Partn Galleria at
Tyler Pub Impt (FGIC Insd)...................... 5.000 09/01/36 3,663,411
3,775 Riverside Cnty, CA Ctf Partn Historic Courthouse
Proj Ser B (FGIC Insd) (a)...................... 5.000 11/01/27 3,803,275
6,375 Rohnert Pk, CA Cmnty Dev Commn Tax Alloc Rev Hsg
Redev Proj Ser H (FGIC Insd) (a)................ 4.375 08/01/30 5,672,985
2,160 Roseville, CA Jt Uni High Sch Election 2004 Ser
A (FGIC Insd) (a)............................... 5.000 08/01/26 2,182,032
70 Sacramento, CA City Fin Auth Rev Cap Impt (AMBAC
Insd)........................................... 5.000 12/01/33 68,412
2,000 Sacramento Cnty, CA Pub Fin Auth Tax Alloc Rev
Mather/McClellan Merged Proj Ser A (AGL Insd)... 5.000 12/01/38 1,990,540
2,000 Sacramento Cnty, CA San Dist Fin Auth Rev
Sacramento Regl Cnty San (FGIC Insd)............ 5.000 12/01/29 2,010,520
2,535 San Diego, CA Pub Fac Fin Auth Rev Pooled Fin
Southcrest Ser B (Radian Insd).................. 5.250 10/01/27 2,516,672
2,000 San Francisco, CA City & Cnty Second Ser Issue
26B (FGIC Insd)................................. 5.000 05/01/22 2,035,360
1,000 San Leandro, CA Jt Proj Area Fin (MBIA Insd).... 5.100 12/01/26 1,008,600
1,340 Sanger, CA Uni Sch Dist Ctf Cap Impt Prog (FSA
Insd) (a)....................................... 5.000 03/01/25 1,357,045
2,000 Santa Fe Springs, CA Cmnty Dev Comm Tax Alloc
Rfdg Ser A (MBIA Insd) (a)...................... 5.375 09/01/20 2,080,340
2,065 Santa Fe Springs, CA Cmnty Dev Comm Tax Alloc
Rfdg Ser A (MBIA Insd).......................... 5.375 09/01/21 2,144,854
2,450 Santa Monica, CA Cmnty College Rfdg Ser A (AMBAC
Insd) (a)....................................... 5.250 02/01/23 2,497,848
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 1,453,328
1,000 Shasta, CA Jt Pwr Fin Auth Cnty Admin Bldg Proj
Ser A (MBIA Insd)............................... 5.250 04/01/22 1,026,050
1,340 Soledad, CA Redev Agy Tax Alloc Soledad Redev
Proj Ser A (XLCA Insd).......................... 5.000 12/01/32 1,292,068
1,000 South Gate, CA Pub Fin Auth South Gate Redev
Proj No 1 (XLCA Insd)........................... 5.750 09/01/22 1,040,130
2,365 Southern CA Logistics Arpt Auth................. 5.375 12/01/22 2,297,101
1,250 Southern CA Logistics Arpt Auth (a)............. 6.100 12/01/37 1,214,038
2,000 Southern CA Logistics Arpt Auth................. 6.150 12/01/43 1,944,940
2,150 Temecula, CA Redev Agy Tax Alloc Rev Temecula
Redev Proj No 1 (MBIA Insd)..................... 5.125 08/01/27 2,156,643
</Table>
See Notes to Financial Statements 13
VAN KAMPEN CALIFORNIA INSURED TAX FREE FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------
CALIFORNIA (CONTINUED)
$ 5,000 Tobacco Sec Auth Southn CA Tob Settlement Ser A1
(b)............................................. 5.125% 06/01/46 $ 3,993,175
2,500 Turlock, CA Pub Fin Auth Tax Alloc Rev (FSA
Insd)........................................... 5.000 09/01/36 2,488,625
10,000 University CA Regts Ser A (MBIA Insd) (b)....... 4.500 05/15/47 8,913,250
1,340 Vallejo City, CA Uni Sch Dist Rfdg Ser A (MBIA
Insd)........................................... 5.900 02/01/20 1,458,523
3,170 Washington, CA Uni Sch Dist New High Sch Proj
(AMBAC Insd).................................... 5.125 08/01/37 3,120,136
3,655 Woodland, CA Fin Auth Wastewater Rev Second Sr
Lien (MBIA Insd) (a)............................ 5.000 03/01/30 3,671,813
------------
249,480,769
------------
VIRGIN ISLANDS 0.5%
1,200 Virgin Islands Wtr & Pwr Auth Ser A............. 5.000 07/01/26 1,163,580
------------
TOTAL LONG-TERM INVESTMENTS 112.8%
(Cost $255,854,203)........................................................ 250,644,349
TOTAL SHORT-TERM INVESTMENTS 2.3%
(Cost $5,185,000).......................................................... 5,185,000
------------
TOTAL INVESTMENTS 115.1%
(Cost $261,039,203)........................................................ 255,829,349
LIABILITY FOR FLOATING RATE NOTE OBLIGATIONS RELATED TO SECURITIES
HELD (14.7%)
(Cost ($32,750,000))
(32,750) Note with interest rates ranging from 2.22% to 2.28% at March 31,
2008 and contractual maturities of collateral ranging from 2021 to
2047 (See Note 1) (i)............................................. (32,750,000)
------------
TOTAL NET INVESTMENTS 100.4%
(Cost $228,289,203)........................................................ 223,079,349
LIABILITIES IN EXCESS OF OTHER ASSETS (0.4%)................................ (859,260)
------------
NET ASSETS 100.0%........................................................... $222,220,089
============
</Table>
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 Note 1.
(c) Variable Rate Coupon
14 See Notes to Financial Statements
VAN KAMPEN CALIFORNIA INSURED TAX FREE FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
(d) Security purchased on a when-issued or delayed delivery basis.
(e) Security includes a feature allowing the Fund an option on any interest rate
payment date to offer the security for sale at par. The sale is contingent
upon market conditions.
(f) Inverse Floating Rate
(g) 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.
(h) Escrowed to Maturity
(i) Floating rate notes. The interest rates shown reflect the rates in effect at
March 31, 2008.
AGL--Assured Guaranty Ltd.
AMBAC--AMBAC Indemnity Corp.
CIFG--CDC IXIS Financial Guaranty
FGIC--Financial Guaranty Insurance Co.
FSA--Financial Security Assurance Inc.
MBIA--Municipal Bond Investors Assurance Corp.
MBIA-IBC--MBIA Insured Bond Certificates
Radian--Radian Asset Assurance
XLCA--XL Capital Assurance Inc.
See Notes to Financial Statements 15
VAN KAMPEN CALIFORNIA INSURED TAX FREE FUND
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
March 31, 2008 (Unaudited)
<Table>
ASSETS:
Total Investments (Cost $261,039,203)....................... $255,829,349
Cash........................................................ 108,759
Receivables:
Interest.................................................. 2,922,329
Fund Shares Sold.......................................... 87,953
Other....................................................... 160,239
------------
Total Assets............................................ 259,108,629
------------
LIABILITIES:
Floating Rate Note Obligations.............................. 32,750,000
Payables:
Investments Purchased..................................... 3,228,233
Income Distributions...................................... 222,367
Fund Shares Repurchased................................... 182,211
Investment Advisory Fee................................... 88,871
Distributor and Affiliates................................ 36,710
Trustees' Deferred Compensation and Retirement Plans........ 241,616
Accrued Expenses............................................ 138,532
------------
Total Liabilities....................................... 36,888,540
------------
NET ASSETS.................................................. $222,220,089
============
NET ASSETS CONSIST OF:
Capital (Par value of $0.01 per share with an unlimited
number of shares authorized).............................. $227,574,842
Accumulated Undistributed Net Investment Income............. 940,856
Accumulated Net Realized Loss............................... (1,085,755)
Net Unrealized Depreciation................................. (5,209,854)
------------
NET ASSETS.................................................. $222,220,089
============
MAXIMUM OFFERING PRICE PER SHARE:
Class A Shares:
Net asset value and redemption price per share (Based on
net assets of $192,426,429 and 11,279,038 shares of
beneficial interest issued and outstanding)............. $ 17.06
Maximum sales charge (4.75%* of offering price)......... 0.85
------------
Maximum offering price to public........................ $ 17.91
============
Class B Shares:
Net asset value and offering price per share (Based on
net assets of $14,282,285 and 823,407 shares of
beneficial interest issued and outstanding)............. $ 17.35
============
Class C Shares:
Net asset value and offering price per share (Based on
net assets of $11,831,108 and 693,038 shares of
beneficial interest issued and outstanding)............. $ 17.07
============
Class I Shares:
Net asset value and offering price per share (Based on
net assets of $3,680,267 and 215,792 shares of
beneficial interest issued and outstanding)............. $ 17.05
============
</Table>
* On sales of $100,000 or more, the sales charge will be reduced.
16 See Notes to Financial Statements
VAN KAMPEN CALIFORNIA INSURED TAX FREE FUND
FINANCIAL STATEMENTS continued
Statement of Operations
For the Six Months Ended March 31, 2008 (Unaudited)
<Table>
INVESTMENT INCOME:
Interest.................................................... $ 6,711,773
------------
EXPENSES:
Interest and Residual Trust Expense......................... 670,536
Investment Advisory Fee..................................... 534,028
Distribution (12b-1) and Service Fees
Class A................................................... 243,359
Class B................................................... 20,202
Class C................................................... 52,644
Transfer Agent Fees......................................... 58,375
Professional Fees........................................... 47,742
Accounting and Administrative Expenses...................... 45,725
Custody..................................................... 29,710
Reports to Shareholders..................................... 22,239
Trustees' Fees and Related Expenses......................... 13,558
Registration Fees........................................... 680
Other....................................................... 18,711
------------
Total Expenses.......................................... 1,757,509
Less Credits Earned on Cash Balances.................... 3,773
------------
Net Expenses............................................ 1,753,736
------------
NET INVESTMENT INCOME....................................... $ 4,958,037
============
REALIZED AND UNREALIZED GAIN/LOSS:
Realized Gain/Loss:
Investments............................................... $ (41,441)
Futures................................................... (730,576)
------------
Net Realized Loss........................................... (772,017)
------------
Unrealized Appreciation/Depreciation:
Beginning of the Period................................... 4,169,761
End of the Period:
Investments............................................. (5,209,854)
------------
Net Unrealized Depreciation During the Period............... (9,379,615)
------------
NET REALIZED AND UNREALIZED LOSS............................ $(10,151,632)
============
NET DECREASE IN NET ASSETS FROM OPERATIONS.................. $ (5,193,595)
============
</Table>
See Notes to Financial Statements 17
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, 2008 SEPTEMBER 30, 2007
--------------------------------------
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income................................ $ 4,958,037 $ 8,894,538
Net Realized Loss.................................... (772,017) (255,145)
Net Unrealized Depreciation During the Period........ (9,379,615) (8,346,809)
------------ ------------
Change in Net Assets from Operations................. (5,193,595) 292,584
------------ ------------
Distributions from Net Investment Income:
Class A Shares..................................... (4,064,404) (7,471,118)
Class B Shares..................................... (330,470) (824,873)
Class C Shares..................................... (184,661) (328,345)
Class I Shares..................................... (84,943) (161,601)
------------ ------------
(4,664,478) (8,785,937)
------------ ------------
Distributions from Net Realized Gain:
Class A Shares..................................... -0- (785,151)
Class B Shares..................................... -0- (94,337)
Class C Shares..................................... -0- (40,739)
Class I Shares..................................... -0- (15,774)
------------ ------------
-0- (936,001)
------------ ------------
Total Distributions.................................. (4,664,478) (9,721,938)
------------ ------------
NET CHANGE IN NET ASSETS FROM INVESTMENT
ACTIVITIES......................................... (9,858,073) (9,429,354)
------------ ------------
FROM CAPITAL TRANSACTIONS:
Proceeds from Shares Sold............................ 28,662,182 45,950,720
Net Asset Value of Shares Issued Through Dividend
Reinvestment....................................... 3,306,367 6,991,136
Cost of Shares Repurchased........................... (25,841,291) (46,667,483)
------------ ------------
NET CHANGE IN NET ASSETS FROM CAPITAL TRANSACTIONS... 6,127,258 6,274,373
------------ ------------
TOTAL DECREASE IN NET ASSETS......................... (3,730,815) (3,154,981)
NET ASSETS:
Beginning of the Period.............................. 225,950,904 229,105,885
------------ ------------
End of the Period (Including accumulated
undistributed net investment income of $940,856 and
$647,297, respectively)............................ $222,220,089 $225,950,904
============ ============
</Table>
18 See Notes to Financial Statements
VAN KAMPEN CALIFORNIA INSURED TAX FREE FUND
FINANCIAL STATEMENTS continued
Statement of Cash Flows
For the Six Months Ended March 31, 2008 (Unaudited)
<Table>
CHANGE IN NET ASSETS FROM OPERATIONS........................ $ (5,193,595)
------------
Adjustments to Reconcile the Change in Net Assets from
Operations to
Net Cash Provided by Operating Activities:
Purchases of Investments.................................. (47,381,054)
Proceeds from Sales/Maturities of Investments............. 28,344,743
Net Purchases of Short-Term Investments................... 5,215,000
Amortization of Premium................................... 199,829
Accretion of Discount..................................... (364,734)
Net Realized Gain on Investments.......................... 41,441
Net Change in Unrealized Depreciation on Investments...... 9,315,102
Increase in Interest Receivables and Other Assets......... (334,197)
Decrease in Receivable for Investments Sold............... 1,638,888
Increase in Accrued Expenses and Other Payables........... 31,660
Increase in Investments Purchased Payable................. 1,590,513
------------
Total Adjustments....................................... (1,702,809)
------------
NET CASH PROVIDED BY OPERATING ACTIVITIES................... (6,896,404)
------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from Shares Sold................................. 28,684,176
Repurchased Shares........................................ (25,993,843)
Dividends Paid (net of reinvested dividends of
$3,306,367)............................................. (1,347,471)
Proceeds from Floating Rate Note Obligations.............. 5,220,000
------------
NET CASH PROVIDED BY FINANCING ACTIVITIES................. 6,562,862
------------
NET DECREASE IN CASH........................................ (333,542)
Cash at the Beginning of the Period......................... 442,301
------------
Cash at the End of the Period............................... $ 108,759
============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash Paid During the Year for Interest...................... $ 670,536
============
</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, ----------------------------------------------
2008 2007 2006 2005 2004 2003
------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF THE
PERIOD........................... $ 17.83 $18.57 $18.80 $18.93 $18.84 $19.45
------- ------ ------ ------ ------ ------
Net Investment Income............ 0.39(a) 0.72(a) 0.71(a) 0.72 0.75 0.74
Net Realized and Unrealized
Gain/Loss...................... (0.79) (0.68) 0.03 0.01 0.06 (0.44)
------- ------ ------ ------ ------ ------
Total from Investment Operations... (0.40) 0.04 0.74 0.73 0.81 0.30
------- ------ ------ ------ ------ ------
Less:
Distributions from Net Investment
Income......................... 0.37 0.71 0.73 0.74 0.72 0.75
Distributions from Net Realized
Gain........................... -0- 0.07 0.24 0.12 -0- 0.16
------- ------ ------ ------ ------ ------
Total Distributions................ 0.37 0.78 0.97 0.86 0.72 0.91
------- ------ ------ ------ ------ ------
NET ASSET VALUE, END OF THE
PERIOD........................... $ 17.06 $17.83 $18.57 $18.80 $18.93 $18.84
======= ====== ====== ====== ====== ======
Total Return (b)................... -2.29%* 0.15% 4.14% 3.96% 4.42% 1.67%
Net Assets at End of the Period (In
millions)........................ $ 192.4 $194.2 $190.0 $188.0 $183.0 $195.4
Ratio of Expenses to Average Net
Assets........................... 1.52% 1.16% 0.91% 0.92% 0.89% 0.87%
Ratio of Net Investment Income to
Average Net Assets............... 4.41% 3.91% 3.86% 3.83% 4.00% 3.93%
Portfolio Turnover................. 11%* 37% 31% 25% 16% 25%
SUPPLEMENTAL RATIO:
Ratio of Expenses to Average Net
Assets (Excluding Interest and
Residual Trust Expenses)......... 0.93% 0.93% 0.91% 0.92% 0.89% 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, ----------------------------------------------
2008 2007 2006 2005 2004 2003
------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF THE
PERIOD........................... $ 18.12 $18.86 $19.07 $19.03 $18.82 $19.44
------- ------ ------ ------ ------ ------
Net Investment Income............ 0.40(a) 0.73(a) 0.77(a) 0.79 0.72 0.60
Net Realized and Unrealized
Gain/Loss...................... (0.80) (0.69) 0.02 (0.03) 0.07 (0.45)
------- ------ ------ ------ ------ ------
Total from Investment Operations... (0.40) 0.04 0.79 0.76 0.79 0.15
------- ------ ------ ------ ------ ------
Less:
Distributions from Net Investment
Income......................... 0.37 0.71 0.76 0.60 0.58 0.61
Distributions from Net Realized
Gain........................... -0- 0.07 0.24 0.12 -0- 0.16
------- ------ ------ ------ ------ ------
Total Distributions................ 0.37 0.78 1.00 0.72 0.58 0.77
------- ------ ------ ------ ------ ------
NET ASSET VALUE, END OF THE
PERIOD........................... $ 17.35 $18.12 $18.86 $19.07 $19.03 $18.82
======= ====== ====== ====== ====== ======
Total Return (b)................... -2.25%(c)* 0.10%(c) 4.40%(c) 4.10%(c) 4.29%(c) 0.87%
Net Assets at End of the Period (In
millions)........................ $ 14.3 $ 17.2 $ 25.3 $ 33.7 $ 41.1 $ 49.8
Ratio of Expenses to Average Net
Assets........................... 1.53%(c) 1.17%(c) 0.69%(c) 0.81%(c) 1.09%(c) 1.62%
Ratio of Net Investment Income to
Average Net Assets............... 4.41%(c) 3.90%(c) 4.08%(c) 3.96%(c) 3.80%(c) 3.18%
Portfolio Turnover................. 11%* 37% 31% 25% 16% 25%
SUPPLEMENTAL RATIO:
Ratio of Expenses to Average Net
Assets (Excluding Interest and
Residual Trust Expenses)......... 0.93%(c) 0.93%(c) 0.69%(c) 0.81%(c) 1.09%(c) 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 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) 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, ----------------------------------------------
2008 2007 2006 2005 2004 2003
------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF THE
PERIOD......................... $ 17.84 $18.58 $18.81 $18.93 $18.82 $19.43
------- ------ ------ ------ ------ ------
Net Investment Income.......... 0.33(a) 0.58(a) 0.57(a) 0.59 0.61 0.61
Net Realized and Unrealized
Gain/Loss.................... (0.80) (0.68) 0.03 0.01 0.08 (0.45)
------- ------ ------ ------ ------ ------
Total from Investment
Operations..................... (0.47) (0.10) 0.60 0.60 0.69 0.16
------- ------ ------ ------ ------ ------
Less:
Distributions from Net
Investment Income............ 0.30 0.57 0.59 0.60 0.58 0.61
Distributions from Net Realized
Gain......................... -0- 0.07 0.24 0.12 -0- 0.16
------- ------ ------ ------ ------ ------
Total Distributions.............. 0.30 0.64 0.83 0.72 0.58 0.77
------- ------ ------ ------ ------ ------
NET ASSET VALUE, END OF THE
PERIOD......................... $ 17.07 $17.84 $18.58 $18.81 $18.93 $18.82
======= ====== ====== ====== ====== ======
Total Return (b)................. -2.66%(d)* -0.57%(d) 3.36% 3.26%(d) 3.75%(d) 0.92%(c)
Net Assets at End of the Period
(In millions).................. $ 11.8 $ 10.7 $ 9.9 $ 12.0 $ 12.6 $ 18.1
Ratio of Expenses to Average Net
Assets......................... 2.25%(d) 1.88%(d) 1.66% 1.61%(d) 1.59%(d) 1.62%
Ratio of Net Investment Income to
Average Net Assets............. 3.71%(d) 3.19%(d) 3.11% 3.15%(d) 3.30%(d) 3.20%(c)
Portfolio Turnover............... 11%* 37% 31% 25% 16% 25%
SUPPLEMENTAL RATIO:
Ratio of Expenses to Average Net
Assets (Excluding Interest and
Residual Trust Expenses)....... 1.66%(d) 1.65%(d) 1.66% 1.61%(d) 1.59%(d) 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 .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>
SIX MONTHS AUGUST 12, 2005
ENDED YEAR ENDED (COMMENCEMENT OF
CLASS I SHARES MARCH 31, SEPTEMBER 30, OPERATIONS) TO
2008 2007 2006 SEPTEMBER 30, 2005
----------------------------------------------------
NET ASSET VALUE, BEGINNING OF THE
PERIOD.................................. $ 17.82 $18.57 $18.80 $18.87
Net Investment Income................... 0.41(a) 0.76(a) 0.74(a) 0.09
------- ------ ------ ------
Net Realized and Unrealized Gain/Loss... (0.79) (0.69) 0.05 (0.06)
------- ------ ------ ------
Total from Investment Operations.......... (0.38) 0.07 0.79 0.03
------- ------ ------ ------
Less:
Distributions from Net Investment
Income................................ 0.39 0.75 0.78 0.10
Distributions from Net Realized Gain.... -0- 0.07 0.24 -0-
------- ------ ------ ------
Total Distributions....................... 0.39 0.82 1.02 0.10
------- ------ ------ ------
NET ASSET VALUE, END OF THE PERIOD........ $ 17.05 $17.82 $18.57 $18.80
======= ====== ====== ======
Total Return (b).......................... -2.17%* 0.35% 4.40% 0.17%*
Net Assets at End of the Period (In
millions)............................... $ 3.7 $ 3.9 $ 3.9 $ 2.6
Ratio of Expenses to Average Net Assets... 1.27% 0.91% 0.66% 0.73%
Ratio of Net Investment Income to Average
Net Assets.............................. 4.66% 4.16% 4.11% 4.03%
Portfolio Turnover........................ 11%* 37% 31% 25%*
SUPPLEMENTAL RATIO:
Ratio of Expenses to Average Net Assets
(Excluding Interest and Residual Trust
Expenses)............................... 0.68% 0.68% 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, 2008 (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 obtained 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, 2008, the Fund had $1,227,900 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, 2008 (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 adopted the provisions of the Financial Accounting Standards Board ("FASB")
Interpretation No. 48 ("FIN 48") Accounting for Uncertainty in Income Taxes on
March 31, 2008. FIN 48 sets forth a minimum threshold for financial statement
recognition of the benefit of a tax position taken or expected to be taken in a
tax return. The implementation of FIN 48 did not result in any unrecognized tax
benefits in the accompanying financial statements. If applicable, the Fund
recognizes interest accrued related to unrecognized tax benefits in "Interest
Expense" and penalties in "Other" expenses on the Statement of Operations. The
Fund files tax returns with the U.S. Internal Revenue Service and various
states. Generally, each of the tax years in the four year period ended September
30, 2007, remains subject to examination by taxing authorities.
At March 31, 2008, the cost and related gross unrealized appreciation and
depreciation were as follows:
<Table>
Cost of investments for tax purposes........................ $224,071,158
============
Gross tax unrealized appreciation........................... $ 4,568,321
Gross tax unrealized depreciation........................... (5,560,130)
------------
Net tax unrealized depreciation on investments.............. $ (991,809)
============
</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,
2007 was as follows:
<Table>
Distributions paid from:
Ordinary income........................................... $ 70,484
Tax exempt income......................................... 8,771,483
Long-term capital gain.................................... 866,832
----------
$9,708,799
==========
</Table>
As of September 30, 2007, the components of distributable earnings on a tax
basis were as follows:
<Table>
Undistributed ordinary income............................... $ 1,112
Undistributed tax-exempt income............................. 853,475
Undistributed long-term capital gain........................ -0-
</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. 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
25
VAN KAMPEN CALIFORNIA INSURED TAX FREE FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2008 (UNAUDITED) continued
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" in 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, 2008, Fund
investments with a value of $42,960,030 are held by the dealer trusts and serve
as collateral for the $32,750,000 in floating rate notes outstanding at that
date. Contractual maturities of the floating rate notes and interest rates in
effect at March 31, 2008 are presented on the Portfolio of Investments. The
average floating rate notes outstanding and average annual interest and fee rate
related to residual interests during the six months ended March 31, 2008 were
$36,164,286 and 3.71%, respectively.
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. CREDITS EARNED ON CASH BALANCES During the six months ended March 31, 2008,
the Fund's custody fee was reduced by $3,773 as a result of credits earned on
cash balances.
26
VAN KAMPEN CALIFORNIA INSURED TAX FREE FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2008 (UNAUDITED) continued
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, 2008, the Fund recognized expenses of
approximately $12,000 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,
2008, the Fund recognized expenses of approximately $26,600 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 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, 2008, the Fund recognized expenses of approximately $21,800
representing transfer agency fees paid to VKIS and its affiliates. The 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 $140,690 are included in
"Other" assets on the Statement of Assets and Liabilities at March 31, 2008.
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, 2008, Van Kampen, as Distributor for the
Fund, received commissions on sales of the Fund's Class A Shares of
approximately $29,800 and
27
VAN KAMPEN CALIFORNIA INSURED TAX FREE FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2008 (UNAUDITED) continued
contingent deferred sales charge (CDSC) on redeemed shares of approximately
$4,900. Sales charges do not represent expenses of the Fund.
3. CAPITAL TRANSACTIONS
For the six months ended March 31, 2008 and the year ended September 30, 2007,
transactions were as follows:
<Table>
<Caption>
FOR THE FOR THE
SIX MONTHS ENDED YEAR ENDED
MARCH 31, 2008 SEPTEMBER 30, 2007
-------------------------- --------------------------
SHARES VALUE SHARES VALUE
Sales:
Class A............................ 1,356,075 $ 23,756,258 2,286,579 $ 41,753,037
Class B............................ 26,832 484,856 46,367 859,170
Class C............................ 229,356 4,040,480 146,193 2,686,456
Class I............................ 21,515 380,588 35,591 652,057
---------- ------------ ---------- ------------
Total Sales.......................... 1,633,778 $ 28,662,182 2,514,730 $ 45,950,720
========== ============ ========== ============
Dividend Reinvestment:
Class A............................ 163,746 $ 2,851,200 323,583 $ 5,922,642
Class B............................ 13,796 244,480 34,865 649,311
Class C............................ 7,237 125,920 13,208 241,808
Class I............................ 4,869 84,767 9,695 177,375
---------- ------------ ---------- ------------
Total Dividend Reinvestment.......... 189,648 $ 3,306,367 381,351 $ 6,991,136
========== ============ ========== ============
Repurchases:
Class A............................ (1,135,536) $(19,898,253) (1,945,511) $(35,463,292)
Class B............................ (166,421) (2,977,465) (471,233) (8,732,613)
Class C............................ (141,098) (2,485,808) (97,048) (1,775,435)
Class I............................ (27,269) (479,765) (38,170) (696,143)
---------- ------------ ---------- ------------
Total Repurchases.................... (1,470,324) $(25,841,291) (2,551,962) $(46,667,483)
========== ============ ========== ============
</Table>
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 and allocated on a pro rata basis to
each class of shares. For the six months ended March 31, 2008, 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 $47,381,054 and $28,344,743,
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
28
VAN KAMPEN CALIFORNIA INSURED TAX FREE FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2008 (UNAUDITED) continued
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. Risks may arise as a result of the potential
inability of the counterparties 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 futures on U.S. Treasury Notes 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, 2008,
were as follows:
<Table>
<Caption>
CONTRACTS
Outstanding at September 30, 2007........................... 73
Futures Opened.............................................. 206
Futures Closed.............................................. (279)
----
Outstanding at March 31, 2008............................... -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
29
VAN KAMPEN CALIFORNIA INSURED TAX FREE FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2008 (UNAUDITED) continued
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 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
for segregating purposes, if any, 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 for Class B and
Class C Shares. 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 PRONOUNCEMENT
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
30
VAN KAMPEN CALIFORNIA INSURED TAX FREE FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2008 (UNAUDITED) continued
November 15, 2007. SFAS 157 defines fair value, establishes a framework for
measuring fair value and expands disclosures about fair value measurements. As
of March 31, 2008, the Adviser does not believe the adoption of SFAS 157 will
impact the amounts reported in the financial statements, however, additional
disclosures will be required about the inputs used to develop the measurements
of fair value and the effect of certain measurements reported on the Statement
of Operations for a fiscal period.
31
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
KEVIN KLINGERT
Vice President
AMY R. DOBERMAN
Vice President
STEFANIE V. CHANG
Vice President and Secretary
JOHN L. SULLIVAN
Chief Compliance Officer
STUART N. SCHULDT
Chief Financial Officer and Treasurer
INVESTMENT ADVISER
VAN KAMPEN ASSET MANAGEMENT
522 Fifth Avenue
New York, New York 10036
DISTRIBUTOR
VAN KAMPEN FUNDS INC.
522 Fifth Avenue
New York, New York 10036
SHAREHOLDER SERVICING AGENT
VAN KAMPEN INVESTOR SERVICES INC.
P.O. Box 219286
Kansas City, Missouri 64121-9286
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.
32
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.
522 Fifth Avenue
New York, New York 10036
www.vankampen.com
Copyright (C)2008 Van Kampen Funds Inc.
All rights reserved. Member FINRA/SIPC.
41, 341, 541, 641
CAISAN 5/08
(VAN KAMPEN INVESTMENTS LOGO) IU08-02760P-Y03/08
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, 2008.
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 3/31/08
<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 SALES SALES W/O SALES SALES W/O SALES SALES W/O SALES
TOTAL RETURNS CHARGES CHARGE CHARGES CHARGE CHARGES CHARGE CHARGES
Since Inception 5.28% 4.99% 4.07% 4.07% 3.48% 3.48% 1.39%
10-year 3.33 2.83 2.70 2.70 2.55 2.55 --
5-year 2.62 1.62 1.85 1.60 1.86 1.86 --
1-year -4.53 -9.09 -5.20 -8.85 -5.21 -6.12 -4.22
6-month -3.52 -8.09 -3.90 -7.66 -3.83 -4.78 -3.39
- ---------------------------------------------------------------------------------------------------
30-Day SEC Yield 4.84% 4.35% 4.33% 5.33%
</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, (iii)
qualified state tuition plan (529 plan) accounts, (iv) institutional clients
with assets of at least $1 million and (v) certain Van Kampen investment
companies. 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. Periods of
less than a year are not annualized. 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, 2008
MARKET CONDITIONS
The financial markets experienced significant volatility throughout the
six-month reporting period as many large banks and financial firms began writing
down mortgage-related losses, and liquidity and credit availability became even
more restricted. At the same time, the pace of economic growth began to slow,
with gross domestic product (GDP) growth measuring an anemic 0.6 percent for the
fourth quarter of 2007. As weaker economic data was released in the first
quarter of 2008, fears of recession grew and consumer confidence waned,
prompting investors to continue to seek out the relative safety of high quality
Treasury securities over other sectors of the fixed income market.
The municipal bond market faced additional headwinds as various monoline bond
insurers experienced credit quality downgrades and the auction rate and variable
rate markets deteriorated. As a result, the municipal market underperformed
Treasuries for the overall period, with municipal bond prices reaching the
cheapest levels ever relative to Treasury bonds in the first quarter of 2008.
While yields on short-dated municipal securities declined, yields on
intermediate- and long-dated securities rose, leading to the steepest yield
curve in the past four years as the spread between one-year and 30-year
maturities reached 343 basis points. After a record year for new municipal bond
issuance in 2007, the amount of new issues coming to market in the first quarter
of 2008 declined by roughly 25 percent due in large part to a substantial drop
in refunding issuance.
The Federal Reserve (the "Fed") took various steps to ease the liquidity crisis
and boost the economy during the period. Not only did the Fed reduce the target
federal funds rate from 4.75 percent to 2.25 percent by the end of the period,
but in an unprecedented move, it granted primary brokerage firms access to its
discount window and loosened its collateral requirements, extending loans of
Treasury securities in exchange for lower quality, less liquid securities.
Finally, in the biggest headline event, the Fed arranged and supported JP Morgan
Chase's purchase of Bear Stearns, which was viewed by many as necessary to avoid
serious market repercussions had the firm failed.
2
PERFORMANCE ANALYSIS
All share classes of Van Kampen Municipal Income Fund underperformed the Lehman
Brothers Municipal Bond Index for the six months ended March 31, 2008, assuming
no deduction of applicable sales charges.
TOTAL RETURNS FOR THE SIX-MONTH PERIOD ENDED MARCH 31, 2008
<Table>
<Caption>
- ------------------------------------------------------------------------
LEHMAN BROTHERS
CLASS A CLASS B CLASS C CLASS I MUNICIPAL BOND INDEX
-3.52% -3.90% -3.83% -3.39% 0.75%
- ------------------------------------------------------------------------
</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.
Although the municipal market rebounded in the last month of the reporting
period and outperformed Treasuries, it was an extremely difficult period
overall, particularly for higher yielding, lower rated bonds as the
flight-to-quality put considerable pressure on prices. The Fund maintained an
allocation to double-B and non-rated bonds throughout the reporting period
whereas the benchmark Lehman Brother Municipal Bond Index contains only
investment grade issues. As such, the Fund's overweight to lower rated, higher
yielding securities was a primary contributor to its relative underperformance.
The Fund's yield curve positioning also hindered performance as it was
overweighted on the long end of the curve, which underperformed the shorter end
of the curve for the period. The negative impact was amplified by holdings in
longer maturity inverse floating-rate securities,* which are highly sensitive to
interest rate changes. However, these securities did serve to enhance the Fund's
income and diversification during the period. Additionally, the emphasis on the
long end of the curve led to a longer duration (a measure of interest-rate
sensitivity) for the Fund, which we lowered somewhat through the use of a
Treasury futures hedge. However, the Fund still maintained a slightly longer
duration, which detracted from performance as rates on the intermediate and long
end of the curve rose. At the same time, the Treasury market rally hurt the
performance of the hedge.
Conversely, an overweight to pre-refunded bonds was additive to performance.
These are high quality, shorter maturity issues which benefited as the short end
of the curve outpaced the long end during the period. The Fund's overweight to
higher yielding municipal auction rate securities, which have low durations (a
measure of interest-rate sensitivity) was also beneficial to performance.
*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.
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.
3
<Table>
<Caption>
RATINGS ALLOCATION AS OF 3/31/08
AAA/Aaa 44.6%
AA/Aa 11.7
A/A 8.7
BBB/Baa 15.6
BB/Ba 1.1
B/B 0.4
Non-Rated 17.9
<Caption>
TOP FIVE SECTORS AS OF 3/31/08
Hospital 21.7%
Life Care 9.5
Single-Family 7.8
Wholesale Electric 7.3
General Purpose 5.9
<Caption>
SUMMARY OF INVESTMENTS BY STATE CLASSIFICATION AS OF 3/31/08
Texas 15.3%
California 15.0
Illinois 9.6
Florida 8.5
New York 7.8
New Jersey 6.4
Colorado 5.0
Massachusetts 4.2
Missouri 4.0
Ohio 3.3
Arizona 3.0
Wisconsin 2.7
Michigan 2.3
Virginia 2.3
Utah 2.2
Nevada 2.0
District of Columbia 2.0
Maryland 1.9
Indiana 1.8
Alabama 1.8
Minnesota 1.5
Iowa 1.4
South Dakota 1.3
Tennessee 1.3
North Carolina 1.2
Washington 1.2
Kansas 1.1
Oregon 1.0
Pennsylvania 0.8
South Carolina 0.6
Idaho 0.6
Oklahoma 0.6
Georgia 0.5
Connecticut 0.5
North Dakota 0.5
</Table>
<Table>
(continued on next page)
</Table>
4
<Table>
<Caption>
SUMMARY OF INVESTMENTS BY STATE CLASSIFICATION AS OF 3/31/08
(continued from previous page)
Louisiana 0.4%
New Hampshire 0.4
West Virginia 0.3
Vermont 0.3
Rhode Island 0.3
Alaska 0.3
Delaware 0.1
-----
Total Long-Term Investments 117.3
Total Short-Term Investment 0.1
-----
Total Investments 117.4
Liability for Floating Rate Note Obligations Related to
Securities Held (17.5)
-----
Total Net Investments 99.9
Other Assets in Excess of Liabilities 0.1
-----
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. Ratings allocation based upon ratings as issued by Standard
and 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 email 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 P.O.
Box 219286, Kansas City, MO 64121-9286. 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 10/1/07 - 3/31/08.
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*
-------------------------------------------------
10/1/07 3/31/08 10/1/07-3/31/08
Class A
Actual..................................... $1,000.00 $ 964.79 $ 7.42
Hypothetical............................... 1,000.00 1,017.45 7.62
(5% annual return before expenses)
Class B
Actual..................................... 1,000.00 961.04 11.08
Hypothetical............................... 1,000.00 1,013.70 11.38
(5% annual return before expenses)
Class C
Actual..................................... 1,000.00 961.67 11.08
Hypothetical............................... 1,000.00 1,013.70 11.38
(5% annual return before expenses)
Class I
Actual..................................... 1,000.00 966.06 6.19
Hypothetical............................... 1,000.00 1,018.70 6.36
(5% annual return before expenses)
</Table>
* Expenses are equal to the Fund's annualized expense ratio of 1.51%, 2.26%,
2.26% and 1.26% for Class A, B, C and I Shares, respectively, multiplied by
the average account value over the period, multiplied by 183/366 (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*
-------------------------------------------------
10/1/07 3/31/08 10/1/07-3/31/08
Class A
Actual..................................... $1,000.00 $ 964.79 $4.27
Hypothetical............................... 1,000.00 1,020.65 4.39
(5% annual return before expenses)
Class B
Actual..................................... 1,000.00 961.04 7.99
Hypothetical............................... 1,000.00 1,016.85 8.22
(5% annual return before expenses)
Class C
Actual..................................... 1,000.00 961.67 7.99
Hypothetical............................... 1,000.00 1,016.85 8.22
(5% annual return before expenses)
Class I
Actual..................................... 1,000.00 966.06 3.05
Hypothetical............................... 1,000.00 1,021.90 3.13
(5% annual return before expenses)
</Table>
* Expenses are equal to the Fund's annualized expense ratio of 0.87%, 1.63%,
1.63% and 0.62% for Class A, B, C and I Shares, respectively, multiplied by
the average account value over the period, multiplied by 183/366 (to reflect
the one-half year period).
Assumes all dividends and distributions were reinvested.
9
VAN KAMPEN MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED)
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- -----------------------------------------------------------------------------------------------
MUNICIPAL BONDS 117.3%
ALABAMA 1.8%
$ 2,000 Birmingham Baptist Med Ctr AL Spl Care Fac
Fin Auth Rev Baptist Hlth Sys Inc Ser A.... 5.000% 11/15/30 $ 1,710,020
2,000 Hlthcare Auth for Baptist Hlth AL Ser B
(AGL) (a) (m).............................. 6.750 11/15/37 2,000,000
900 Huntsville Redstone Vlg, AL Spl Care Fac
Fin Auth Redstone Vlg Proj................. 5.500 01/01/43 746,217
1,000 Jefferson Cnty, AL Ltd Oblig Sch Wt Ser
A.......................................... 5.000 01/01/24 901,760
3 Mobile, AL Indl Dev Brd Solid Waste Disp
Rev Mobile Energy Svc Co Proj Rfdg......... 6.950 01/01/20 288
2,250 Montgomery Cnty, AL Pub Bldg Wt Fac Proj
(MBIA Insd)................................ 5.000 03/01/31 2,246,850
3,425 University AL at Birmingham Hosp Rev Ser A
(AMBAC Insd) (b)........................... 5.000 09/01/36 3,368,827
-------------
10,973,962
-------------
ALASKA 0.3%
2,000 Northern Tob Sec Corp Rev Bkd Ser A........ 5,000 06/01/46 1,560,160
-------------
ARIZONA 3.0%
1,900 Arizona Hlth Fac Auth Rev Catholic Hlthcare
West Ser D (AMBAC Insd) (a) (m)............ 6.900 07/01/35 1,900,000
1,000 Flagstaff, AZ Indl Dev Auth Rev Sr Living
Cmnty Northn AZ Rfdg....................... 5.700 07/01/42 847,910
7,000 Glendale, AZ Indl Dev Auth Rfdg............ 5.000 12/01/35 6,119,610
5,000 Phoenix, AZ Civic Impt Corp Sr Lien Ser B
(FGIC Insd) (AMT).......................... 5.250 07/01/32 4,662,350
1,600 Pima Cnty, AZ Indl Dev Auth Wtr & Waste Wtr
Rev Global Wtr Resh LLC Proj (AMT)......... 6.550 12/01/37 1,475,440
1,000 Salt Verde Fin Corp Gas Rev AZ Sr.......... 5.250 12/01/20 985,750
2,750 University of AZ Med Ctr Corp.............. 5.000 07/01/35 2,412,905
-------------
18,403,965
-------------
CALIFORNIA 15.0%
4,870 Anaheim, CA Pub Fin Auth Lease Rev Cap
Apprec Sub Pub Impt Proj Ser C (FSA
Insd)...................................... * 09/01/20 2,653,712
5,000 Anaheim, CA Redev Agy Tax Alloc Rfdg Merged
Redev Proj Area Ser A (FSA Insd) (b)....... 5.000 02/01/31 5,000,625
1,875 California Cnty, CA Tob Agy Tob Sec Sonoma
Cnty Corp Rfdg............................. 5.250 06/01/45 1,554,431
2,000 California Cnty, CA Tob Sec Agy Tob LA Cnty
Sec (d).................................... 0/5.250 06/01/21 1,568,000
6,690 California Hsg Fin Agy Rev Home Mtg Ser I
(AMT) (b).................................. 4.800 08/01/36 5,871,466
10,000 California Infrastructure & Econ Dev Bk Rev
Bay Area Toll Brdg First Lien A (FSA Insd)
(Prerefunded @ 7/01/13) (b)................ 5.250 07/01/20 11,149,250
</Table>
10 See Notes to Financial Statements
VAN KAMPEN MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- -----------------------------------------------------------------------------------------------
CALIFORNIA (CONTINUED)
$ 13,155 California St Dept Wtr Res Pwr Supply Rev
Ser A (MBIA Insd) (b)...................... 5.250% 05/01/20 $ 14,513,461
3,500 California St Pub Wks Brd Lease Rev Dept
Corrections Ser C.......................... 5.250 06/01/28 3,517,430
1,750 California Statewide Cmnty Dev Auth Rev
Insd Ser D (FSA Insd) (a) (m).............. 5.640 04/01/32 1,750,000
1,250 California Statewide Cmnty Dev Auth Rev CA
Baptist Univ Ser A......................... 5.500 11/01/38 1,157,100
1,350 California Statewide Cmnty Dev Auth Rev
Daughters of Charity Hlth Ser A............ 5.000 07/01/39 1,143,666
1,600 California Statewide Cmnty Dev Auth Rev
Kaiser Permanente Ser B.................... 5.000 03/01/41 1,473,168
2,250 California Statewide Cmnty Dev Auth Rev
Windrush Sch............................... 5.500 07/01/37 1,950,345
1,000 California Statewide Cmnty Rev Front Porch
Cmnty & Svc Ser A (e)...................... 5.125 04/01/37 881,670
3,000 Foothill/Eastern Corridor Agy CA Toll Rd
Rev Cap Apprec Rfdg (MBIA Insd)............ * 01/15/17 1,897,860
21,000 Foothill/Eastern Corridor Agy CA Toll Rd
Rev Cap Apprec Rfdg........................ * 01/15/24 8,113,140
15,000 Foothill/Eastern Corridor Agy CA Toll Rd
Rev Cap Apprec Rfdg........................ * 01/15/30 3,911,550
8,000 Golden St Tob Securitization Ser A-1....... 5.750 06/01/47 7,090,240
2,000 Hesperia, CA Pub Fin Auth Rev Redev & Hsg
Proj Ser A (XLCA Insd)..................... 5.000 09/01/37 1,849,480
3,000 Palomar Pomerado Hlthcare Dist CA Ctf Partn
Ser C (FSA Insd) (a)....................... 7.090 11/01/36 3,000,000
1,650 Quechan Indian Tribe Ft Yuma Indian
Reservation CA & Govt Proj................. 7.000 12/01/27 1,611,621
1,500 Southern CA Pub Pwr Auth Nat Gas Proj No 1
Ser A...................................... 5.250 11/01/21 1,493,880
5,000 Tobacco Sec Auth Southn CA Tob Settlement
Sr Ser A-1................................. 5.000 06/01/37 4,068,750
1,600 Turlock, CA Hlth Fac Rev Emanuel Med Ctr
Inc........................................ 5.375 10/15/34 1,440,656
5,000 West Contra Costa CA Uni Election of 2002
Ser B (FSA Insd)........................... 5.000 08/01/26 5,036,450
-------------
93,697,951
-------------
COLORADO 5.0%
2,840 Adams Cnty, CO Single Family Mtg Rev Ser A
(f) (g).................................... 8.875 08/01/10 3,247,994
5,000 Arapahoe Cnty, CO Wtr & Waste Proj Ser A
(MBIA Insd)................................ 5.125 12/01/32 4,996,150
5,000 Colorado Ed & Cultural Fac Auth Rev Impt
Charter Sch Peak to Peak Rfdg (XLCA
Insd)...................................... 5.250 08/15/34 5,015,800
</Table>
See Notes to Financial Statements 11
VAN KAMPEN MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- -----------------------------------------------------------------------------------------------
COLORADO (CONTINUED)
$ 3,000 Colorado Hlth Fac Auth Rev Amern Baptist
Home Ser A................................. 5.900% 08/01/37 $ 2,638,230
3,000 Colorado Hlth Fac Auth Rev Covenant
Retirement Cmnty Inc....................... 5.000 12/01/35 2,488,590
1,000 Colorado Hlth Fac Auth Rev Evangelical
Lutheran Ser A............................. 5.250 06/01/34 932,690
6,000 Denver, CO City & Cnty Justice Sys (b)..... 5.000 08/01/24 6,230,310
1,500 Denver, CO City & Cnty Justice Sys (b)..... 5.000 08/01/25 1,557,578
2,000 Lincoln Pk, CO Met Dist Rfdg & Impt........ 6.200 12/01/37 1,971,760
500 Montezuma Cnty, CO Hosp Dist Hlth Fac
Enterprise Hosp Rfdg....................... 5.900 10/01/37 442,510
1,830 North Range Metro Dist No 2 CO Ltd Tax..... 5.500 12/15/27 1,578,064
-------------
31,099,676
-------------
CONNECTICUT 0.5%
1,000 Connecticut St Dev Auth Hlth Fac Rev
Alzheimers Res Ctr Conn Inc Proj (Acquired
7/16/2007, Cost $1,000,000) (c)............ 5.500 08/15/27 863,490
575 Connecticut St Dev Auth Solid Waste Disp
Fac Rev PSEG Pwr LLC Proj Ser A (AMT)...... 5.750 11/01/37 554,024
1,500 Connecticut St Hlth & Ed Fac Auth Rev Hosp
for Spl Care Ser C (Radian Insd)........... 5.250 07/01/37 1,466,970
-------------
2,884,484
-------------
DELAWARE 0.1%
630 New Castle Cnty, DE Rev Newark Charter Sch
Inc Proj................................... 5.000 09/01/22 566,647
-------------
DISTRICT OF COLUMBIA 2.0%
5,150 District Columbia Tax Incrmnt Gallery Place
Proj (FSA Insd)............................ 5.250 07/01/27 5,221,945
4,000 District Columbia Wtr & Swr Auth Pub Util
Rev Sub Lien (FGIC Insd) (FSA Insd) (b).... 5.500 10/01/41 4,137,560
3,000 Metropolitan Washington DC Arpt Auth Sys
Ser A (FGIC Insd) (AMT).................... 5.250 10/01/32 2,841,840
-------------
12,201,345
-------------
FLORIDA 8.5%
1,000 Alachua Cnty, FL Indl Dev Rev North FL
Retirement Vlg............................. 5.250 11/15/17 943,610
1,000 Alachua Cnty, FL Indl Dev Rev North FL
Retirement Vlg............................. 5.875 11/15/36 890,590
5,000 Broward Cnty, FL Arpt Sys Rev Ser J-I
(AMBAC Insd) (AMT)......................... 5.250 10/01/26 4,873,000
1,100 Capital Tr Agy FL Rev Ft Lauderdale Proj
(AMT)...................................... 5.750 01/01/32 1,004,696
570 Escambia Cnty, FL Hlth Fac Auth Rev (AMBAC
Insd)...................................... 5.950 07/01/20 601,441
</Table>
12 See Notes to Financial Statements
VAN KAMPEN MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- -----------------------------------------------------------------------------------------------
FLORIDA (CONTINUED)
$ 2,465 Fiddlers Creek Cmnty Dev Dist No 1 FL Spl
Assmt Rev.................................. 6.000% 05/01/38 $ 2,131,091
1,305 Florida St Tpk Auth Rev Rfdg Dept Trans Ser
A (b)...................................... 5.000 07/01/26 1,311,159
1,325 Florida St Tpk Auth Rev Rfdg Dept Trans Ser
A (b)...................................... 5.000 07/01/27 1,331,254
1,440 Florida St Tpk Auth Rev Rfdg Dept Trans Ser
A (b)...................................... 5.000 07/01/28 1,446,796
2,500 Florida St Tpk Auth Rev Rfdg Dept Trans Ser
A (b)...................................... 5.000 07/01/32 2,511,799
5,000 Grand Bay At Doral Cmnty Dev Dist FL Ser
B.......................................... 6.000 05/01/17 4,618,700
2,000 Halifax Hosp Med Ctr FL Hosp Ser B-2 (FSA
Insd) (a) (m).............................. 7.280 06/01/46 2,000,000
1,000 Halifax Hosp Med Ctr FL Hosp Rev Impt Rfdg
Ser A...................................... 5.250 06/01/26 951,580
3,000 Highlands Cnty, FL Hlth Fac Rev Hosp
Adventist Hlth Sys Ser B (AGL Insd) (a)
(m)........................................ 6.140 11/15/37 3,000,000
1,000 Main Str Cmnty Dev Dist FL Ser B........... 6.900 05/01/17 994,400
6,000 Miami Dade Cnty, FL Hlth Fac Auth Hosp Rev
Miami Childrens Hosp Proj A (MBIA Insd)
(a)........................................ 6.000 08/01/46 6,000,000
5,000 Miami Dade Cnty, FL Hlth Fac Auth Hosp Rev
Miami Childrens Hosp Proj B3 (MBIA Insd)
(a) (m).................................... 6.740 08/01/34 5,000,000
4,000 Miami Dade Cnty, FL Hlth Fac Auth Hosp Rev
Miami Childrens Hosp Proj B4 (MBIA Insd)
(a) (m).................................... 5.740 08/01/42 4,000,000
1,750 Orange Cnty, FL Hlth Fac Auth Rev First Mtg
Orlando Lutheran Tower..................... 5.500 07/01/38 1,468,250
595 Orange Cnty, FL Tourist Dev Tax Rev (AMBAC
Insd) (f).................................. 6.000 10/01/16 599,284
800 Palm Beach Cnty, FL Hlth Fac Auth Rev
Waterford Proj............................. 5.875 11/15/37 742,960
500 Reunion East Cmnty Dev Dist FL Spl Assmt... 5.800 05/01/36 415,820
1,675 Sarasota Cnty, FL Hlth Fac Auth Retirement
Fac Rev Vlg on the Isle Proj Rfdg.......... 5.500 01/01/27 1,519,192
3,000 Seminole Tribe, FL Spl Oblig Rev Ser A
(e)........................................ 5.250 10/01/27 2,713,080
400 Tolomato Cmnty Dev Dist FL Spl Assmt....... 6.550 05/01/27 394,196
1,225 Tolomato Cmnty Dev Dist FL Spl Assmt....... 6.650 05/01/40 1,203,403
-------------
52,666,301
-------------
</Table>
See Notes to Financial Statements 13
VAN KAMPEN MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- -----------------------------------------------------------------------------------------------
GEORGIA 0.5%
$ 2,000 Atlanta, GA Tax Allocation Eastside Proj
Ser B...................................... 5.600% 01/01/30 $ 1,795,380
1,100 Gwinnett Cnty, GA Hosp Auth Rev Antic Ctf
Gwinnett Hosp Sys Proj Ser E (FSA Insd)
(a)........................................ 7.000 07/01/34 1,100,000
-------------
2,895,380
-------------
IDAHO 0.6%
675 Idaho Hlth Fac Auth Rev Vly Vista Care Corp
Rfdg....................................... 6.125 11/15/27 629,424
3,750 Idaho Hsg & Fin Assn Single Family Mtg Rev
Ser E-1 AMT)............................... 4.900 07/01/38 3,275,775
-------------
3,905,199
-------------
ILLINOIS 9.6%
1,250 Bartlett, IL Tax Increment Rev Sr Lien
Quarry Redev Proj Rfdg..................... 5.600 01/01/23 1,187,887
1,500 Bolingbrook, IL Sales Tax Rev Bolingbrook
(d)........................................ 0/6.250 01/01/24 1,469,250
500 Chicago, IL Increment Alloc Rev Diversey
Narragansett Proj (Acquired 08/01/06, Cost
$533,660) (c).............................. 7.460 02/15/26 508,340
3,000 Chicago, IL Lakefront Millennium Pkg Fac
(MBIA Insd) (Prerefunded @ 1/01/12)........ 5.650 01/01/19 3,351,120
1,000 Chicago, IL Met Wtr Reclamation Capital
Impt Bonds (f)............................. 7.000 01/01/11 1,070,200
8,050 Chicago, IL O'Hare Intl Arpt Rev Gen Arpt
Third Lien C-2 Rfdg (XLCA Insd) (AMT)...... 5.250 01/01/34 7,440,776
3,000 Chicago, IL O'Hare Intl Arpt Rev Ser A (FSA
Insd) (b).................................. 5.000 01/01/33 2,987,145
1,200 Chicago, IL Proj Rfdg Ser C (FGIC Insd)
(g)........................................ 5.750 01/01/16 1,280,544
10 Chicago, IL Single Family Mtg Rev Ser A
(GNMA Collateralized) (AMT)................ 7.000 09/01/27 10,332
805 Chicago, IL Tax Increment Alloc Santn Drain
& Ship Canal Ser A......................... 7.750 01/01/14 814,499
1,000 Gilberts, IL Spl Svc Area No 19 Spl Tax Ser
1.......................................... 5.375 03/01/16 825,260
3,000 Hampshire, IL Spl Svc Area No 17 Spl Tax
Crown Dev Proj Oakstead Ser A.............. 6.000 03/01/45 2,508,300
1,115 Huntley, IL Increment Alloc Rev Huntley
Redev Proj Ser A........................... 8.500 12/01/15 1,119,906
1,000 Illinois Fin Auth Rev Advocate Hlthcare Ser
A-2 (AMBAC Insd) (a) (m)................... 7.090 11/01/30 1,000,000
6,000 Illinois Fin Auth Rev Advocate Hlthcare Ser
B-3 (AMBAC Insd) (a) (m)................... 6.500 11/01/38 6,000,000
1,700 Illinois Fin Auth Rev Carle Fndtn Ser A-4
(FGIC Insd) (a)............................ 5.950 02/15/35 1,700,000
</Table>
14 See Notes to Financial Statements
VAN KAMPEN MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- -----------------------------------------------------------------------------------------------
ILLINOIS (CONTINUED)
$ 1,500 Illinois Fin Auth Rev Christian Homes Inc
Rfdg Ser A................................. 5.750% 05/15/31 $ 1,312,095
1,000 Illinois Fin Auth Rev Kewanee Hosp Proj.... 5.100 08/15/31 809,380
1,000 Illinois Fin Auth Rev Rfdg Advocate Hlth
Ser B-3 (AMBAC Insd) (a)................... 6.490 11/01/22 1,000,000
1,000 Illinois Fin Auth Rev Rfdg Fairview Oblig
Grp Ser A.................................. 5.500 08/15/18 954,670
250 Illinois Fin Auth Rev Rfdg Fairview Oblig
Grp Ser A.................................. 6.000 08/15/22 238,752
1,500 Illinois Fin Auth Rev Rfdg Fairview Oblig
Grp Ser A.................................. 6.125 08/15/28 1,411,080
1,000 Illinois Fin Auth Rev Sherman Hlth Sys 2007
Ser A...................................... 5.500 08/01/37 923,540
5,000 Illinois St Ser 1 (FSA Insd)............... 5.250 12/01/21 5,284,100
1,500 Metropolitan Pier & Expo Auth IL Dedicated
St Tax McCormick Pl Expn Proj A Rfdg....... 5.500 06/15/27 1,500,315
9,250 Metropolitan Pier & Expo Auth IL Dedicated
St Tax Rev Cap Apprec McCormick Rfdg (MBIA
Insd) (d).................................. 0/5.400 06/15/19 8,058,230
1,785 Pingree Grove Village, IL Spl Svc Area No 1
Spl Tax Cambridge Lakes Proj Ser 05........ 5.250 03/01/15 1,726,166
1,500 Plano, IL Spl Svc Area No 6 Spl Tax
Lakewood Springs Club Proj................. 5.800 03/01/37 1,296,900
549 Volo Vlg, IL Spl Svc Area No 3 Symphony
Meadows Proj Ser 1......................... 6.000 03/01/36 489,055
425 Will-Kankakee Regl Dev Auth IL Multi-Family
Hsg Rev Sr Estates Supportive Living
(AMT)...................................... 7.000 12/01/42 398,565
991 Yorkville, IL Utd City Spl Svc Area Spl Tax
No 2004-107 Raintree Vlg IL Proj........... 6.250 03/01/35 925,753
-------------
59,602,160
-------------
INDIANA 1.8%
4,350 Indiana Hlth & Ed Fac Fin Cmnty Fndtn
Northwest IN............................... 5.500 03/01/37 3,765,578
1,845 Indiana Hlth Fac Fin Auth Rev Hoosier Care
Proj Ser A................................. 7.125 06/01/34 1,826,827
550 Indianapolis, IN Loc Pub Impt Ser D........ 6.750 02/01/14 621,670
1,325 Reid Hosp & Hlthcare Svc Inc Richmond IN
Hosp Auth Reid Hosp Proj Ser B (FSA Insd)
(a)........................................ 5.640 01/01/45 1,325,000
1,500 Reid Hosp & Hlthcare Svc Inc Richmond IN
Hosp Auth Reid Hosp Proj Ser C (FSA Insd)
(a)........................................ 5.540 01/01/45 1,500,000
140 Saint Joseph Cnty, IN Redev Dist Tax
Increment Rev Ser B (g).................... * 06/30/11 109,467
140 Saint Joseph Cnty, IN Redev Dist Tax
Increment Rev Ser B (g).................... * 06/30/12 101,388
</Table>
See Notes to Financial Statements 15
VAN KAMPEN MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- -----------------------------------------------------------------------------------------------
INDIANA (CONTINUED)
$ 135 Saint Joseph Cnty, IN Redev Dist Tax
Increment Rev Ser B (g).................... * 06/30/13 $ 90,549
130 Saint Joseph Cnty, IN Redev Dist Tax
Increment Rev Ser B (g).................... * 06/30/14 80,761
130 Saint Joseph Cnty, IN Redev Dist Tax
Increment Rev Ser B (g).................... * 06/30/15 74,802
135 Saint Joseph Cnty, IN Redev Dist Tax
Increment Rev Ser B (g).................... * 06/30/16 71,947
225 Saint Joseph Cnty, IN Redev Dist Tax
Increment Rev Ser B (g).................... * 06/30/17 111,060
1,500 Vigo Cnty, IN Hosp Auth Rev Union Hosp Inc
(e)........................................ 5.500% 09/01/27 1,339,575
-------------
11,018,624
-------------
IOWA 1.4%
1,125 Coralville, IA Ctf Partn Ser D............. 5.250 06/01/26 1,130,107
1,100 Iowa Fin Auth Hlthcare Fac Rev Madrid Home
Proj....................................... 5.750 11/15/24 1,000,703
2,400 Iowa Fin Auth Hosp Fac Rev Trinity Regl
Hosp Proj (FSA Insd)....................... 5.750 07/01/17 2,454,528
1,000 Jefferson Cnty, IA Hosp Rev Jefferson Cnty
Hosp Proj Ser C............................ 5.950 08/01/37 892,240
225 Sibley, IA Hlthcare Fac Rev Osceola Cmnty
Hosp Proj.................................. 6.000 12/01/37 204,930
1,000 Tobacco Settlement Auth IA Tob Settlement
Rev Ser C.................................. 5.375 06/01/38 850,800
2,500 Tobacco Settlement Auth IA Tob Settlement
Rev Ser C.................................. 5.625 06/01/46 2,167,575
-------------
8,700,883
-------------
KANSAS 1.1%
1,000 Burlington, KS Environmental Impt Rev KC
Rfdg Pwr LT B Rmkt (XLCA Insd) (k)......... 5.000 12/01/23 997,800
1,100 Labette Cnty, KS Hosp Rev Rfdg & Impt Ser
A.......................................... 5.750 09/01/37 1,031,932
3,000 Lenexa, KS Hlthcare Fac Rev Rfdg & Impt.... 5.500 05/15/39 2,486,130
1,600 Manhattan, KS Hlthcare Fac Rev Meadowlark
Hills Retirement Ser A..................... 5.000 05/15/24 1,384,608
1,000 Manhattan, KS Hlthcare Fac Rev Meadowlark
Hills Retirement Ser A..................... 5.000 05/15/36 806,800
400 Manhattan, KS Hlthcare Fac Rev Meadowlark
Hills Retirement Ser B..................... 5.125 05/15/42 323,284
-------------
7,030,554
-------------
</Table>
16 See Notes to Financial Statements
VAN KAMPEN MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- -----------------------------------------------------------------------------------------------
LOUISIANA 0.4%
$ 500 Colonial Pinnacle Cmnty Dev Dist Dev (k)... 6.750% 05/01/23 $ 494,195
1,375 Lakeshore Vlg Master Cmnty Dev Dist LA Spl
Assmt...................................... 5.250 07/01/17 1,222,980
1,000 Rapides Fin Auth LA Rev Cleco Pwr Proj
(AMT)...................................... 5.250 11/01/37 998,580
-------------
2,715,755
-------------
MARYLAND 1.9%
4,500 Gaithersburg, MD Econ Dev Rev Asbury MD
Oblig Group A.............................. 5.125 01/01/36 3,905,280
2,000 Howard Cnty, MD Retirement Cmnty Vantage
House Fac Rfdg Ser B....................... 5.250 04/01/37 1,591,760
5,605 Maryland St Cmnty Dev Admin Dept Hsg &
Cmnty Dev Ser H (AMT)...................... 5.050 09/01/32 5,176,161
1,250 Prince Georges Cnty, MD Spl Oblig Natl
Harbor Proj................................ 5.200 07/01/34 1,024,263
-------------
11,697,464
-------------
MASSACHUSETTS 4.2%
2,400 Massachusetts St Dev Fin Agy Rev Linden
Ponds Inc Fac Ser A........................ 5.750 11/15/35 2,082,312
400 Massachusetts St Hlth & Ed Fac Auth Rev Ser
G (MBIA Insd).............................. 5.000 07/01/13 400,660
2,000 Massachusetts St Hlth & Ed Fac Auth Rev
Univ MA Mem Issue Ser D.................... 5.000 07/01/33 1,718,260
5,000 Massachusetts St Hlth & Edl Fac Auth Rev
Caregroup Ser C-1 (AMBAC Insd) (a) (m)..... 6.000 07/01/25 5,000,000
2,000 Massachusetts St Hlth & Edl Fac Auth Rev
Caregroup Ser C-2 (AMBAC Insd) (a) (m)..... 7.500 07/01/25 2,000,000
1,500 Massachusetts St Hsg Fin Agy Hsg Rev Single
Family Ser 130 (AMT)....................... 5.000 12/01/37 1,352,415
2,650 Massachusetts St Indl Fin Agy Rev First Mtg
Reeds Landing Proj (Prerefunded @
10/01/08).................................. 7.450 10/01/28 2,792,199
10,000 Massachusetts St Rites PA 1290 (FSA Insd)
(b)........................................ 5.000 03/01/24 11,051,200
-------------
26,397,046
-------------
MICHIGAN 2.3%
650 Kent Hosp Fin Auth MI Rev Spectrum Hlth Ser
A (k)...................................... 5.250 01/15/47 672,880
375 Kent Hosp Fin Auth MI Rev Spectrum Hlth Ser
A (k)...................................... 5.500 01/15/47 393,101
5,000 Michigan St Strategic Fd Detroit Edison Co
Proj Rfdg Ser C (XLCA Insd) (AMT).......... 5.450 12/15/32 4,802,950
1,775 Michigan St Strategic Fd Solid Genesee Pwr
Stad Proj Rfdg (AMT)....................... 7.500 01/01/21 1,679,807
</Table>
See Notes to Financial Statements 17
VAN KAMPEN MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- -----------------------------------------------------------------------------------------------
MICHIGAN (CONTINUED)
$ 2,000 Michigan Tob Settlement Fin Auth Tob
Settlement Asset Sr Ser A.................. 6.000% 06/01/48 $ 1,833,960
5,000 Western Townships MI Util Rfdg Ser A (MBIA
Insd)...................................... 5.250 01/01/16 5,171,100
-------------
14,553,798
-------------
MINNESOTA 1.5%
450 Chisago, MN Hlthcare Fac Rev CDL Homes LLC
Proj....................................... 6.000 08/01/42 427,149
1,000 Columbia Heights, MN Multi-Family &
Hlthcare Fac Rev Crest View Corp Proj A
Rfdg Ser A................................. 5.700 07/01/42 903,790
1,000 Dakota Cnty, MN Cmnty Dev Agy Multi-Family
Hsg Rev Commons Marice Proj Rfdg Ser A..... 5.000 05/01/42 793,560
380 Duluth, MN Hsg & Redev Auth Hlthcare & Hsg
Rev Benedictine Hlth Ctr Proj.............. 5.700 11/01/22 364,124
750 Duluth, MN Hsg & Redev Auth Hlthcare & Hsg
Rev Benedictine Hlth Ctr Proj.............. 5.875 11/01/33 703,208
550 Inver Grove Heights, MN Presbyterian Homes
Care Rfdg.................................. 5.500 10/01/33 505,928
1,000 Meeker Cnty, MN Gross Rev Hosp Fac Mem Hosp
Proj....................................... 5.750 11/01/37 916,590
2,000 Minneapolis, MN Hsg & Hlthcare Fac Rev
Providence Proj Rfdg Ser A................. 5.625 10/01/27 1,817,340
150 North Oaks, MN Sr Hsg Rev Presbyterian
Homes North Oaks........................... 6.000 10/01/27 145,069
425 North Oaks, MN Sr Hsg Rev Presbyterian
Homes North Oaks........................... 6.000 10/01/33 403,512
125 North Oaks, MN Sr Hsg Rev Presbyterian
Homes North Oaks........................... 6.125 10/01/39 119,554
2,000 Saint Paul, MN Hsg & Redev Auth Hlthcare
Fac Rev Hlth Partners Oblig Grp Proj....... 5.250 05/15/36 1,770,160
675 Saint Paul, MN Hsg & Redev Auth Hosp Rev
Hlth East Proj............................. 6.000 11/15/35 633,116
-------------
9,503,100
-------------
MISSOURI 4.0%
1,000 Carthage, MO Hosp Rev...................... 5.750 04/01/22 914,990
1,000 Carthage, MO Hosp Rev...................... 5.875 04/01/30 901,300
3,000 Kansas City, MO Indl Dev Auth Plaza Lib
Proj....................................... 6.000 03/01/16 3,054,270
500 Kansas City, MO Tax Increment Fin Comm
Kansas City MO Maincor Proj Ser A.......... 5.250 03/01/18 480,000
700 Maryland Heights, MO Tax Increment Rev
South Heights Proj Rfdg Ser A.............. 5.500 09/01/18 681,849
2,275 Missouri Jt Muni Elec Util Comnty Pwr Proj
Rev Plum Point Proj (MBIA Insd)............ 5.000 01/01/26 2,258,961
</Table>
18 See Notes to Financial Statements
VAN KAMPEN MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (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 $ 1,135,428
3,325 Raytown, MO Annual Raytown Live Redev Plan
Proj 1..................................... 5.125 12/01/31 3,238,051
1,300 Saint Louis Cnty, MO Indl Dev Auth Hlth Fac
Rev Ranken Jordan Proj Rfdg................ 5.000 11/15/35 1,039,259
1,000 Saint Louis Cnty, MO Indl Dev Auth Sr
Living Fac Rev Friendship Vlg West Cnty Ser
A.......................................... 5.375 09/01/21 931,130
3,000 Saint Louis Cnty, MO Indl Dev Auth Sr
Living Fac Rev Friendship Vlg West Cnty Ser
A.......................................... 5.500 09/01/28 2,734,260
500 Saint Louis Cnty, MO Indl Dev Auth Sr
Living Fac Rev Saint Andrews Res for Srs
Ser A...................................... 6.375 12/01/30 474,725
1,250 Saint Louis Cnty, MO Indl Dev Auth Sr
Living Fac Rev Saint Andrews Res for Srs
Ser A...................................... 6.375 12/01/41 1,169,825
450 Saint Louis, MO Indl Dev Auth Tax Increment
& Cmnty Impt Dist Loughborough Commons
Rfdg....................................... 5.750 11/01/27 421,146
300 Saint Louis, MO Tax Increment Rev Scullin
Redev Area Ser A........................... 10.000 08/01/10 325,164
2,745 Springfield, MO Pub Bldg Corp Leasehold Rev
(AMBAC Insd) (AMT) (b)..................... 4.550 07/01/29 2,290,293
3,355 Springfield, MO Pub Bldg Corp Leasehold Rev
(AMBAC Insd) (AMT) (b)..................... 4.600 07/01/36 2,799,248
-------------
24,849,899
-------------
NEVADA 2.0%
5,300 Clark Cnty, NV Indl Dev Rev Southwest Gas
Corp Proj Ser A (FGIC Insd) (AMT).......... 4.750 09/01/36 4,184,509
655 Mesquite, NV Spl Impt Dist No 07-01 Loc
Impt-Anthem at Mesquite.................... 5.850 08/01/18 638,363
560 Mesquite, NV Spl Impt Dist No 07-01 Loc
Impt-Anthem at Mesquite.................... 6.000 08/01/27 502,998
5,000 Reno, NV Hosp Rev Washoe Med Ctr Proj Ser C
(FSA Insd) (a)............................. 7.000 06/01/39 5,000,000
2,490 Reno, NV Hosp Rev Renown Regl Med Ctr Proj
Ser A (b).................................. 5.250 06/01/37 2,297,513
-------------
12,623,383
-------------
NEW HAMPSHIRE 0.4%
700 New Hampshire Higher Ed & Hlth Fac Auth Rev
(g)........................................ 8.800 06/01/09 699,160
330 New Hampshire Higher Ed & Hlth Fac Auth Rev
Daniel Webster College Issue Rfdg (g)...... 6.100 07/01/09 334,320
</Table>
See Notes to Financial Statements 19
VAN KAMPEN MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- -----------------------------------------------------------------------------------------------
NEW HAMPSHIRE (CONTINUED)
$ 585 New Hampshire St Business Fin Auth Elec Fac
Rev Plymouth Cogeneration (AMT) (Acquired
6/29/93, Cost $572,582) (c)................ 7.750% 06/01/14 $ 586,410
1,000 New Hampshire St Business Fin Auth Rev
Alice Peck Day Hlth Sys Ser A (Prerefunded
@ 10/01/09)................................ 6.875 10/01/19 1,086,560
-------------
2,706,450
-------------
NEW JERSEY 6.4%
375 Burlington Cnty, NJ Bridge Cmnty Econ Dev
Rev The Evergreens Proj.................... 5.625 01/01/38 329,430
3,250 Landis, NJ Sew Auth Swr Rev (FGIC Insd)
(i)........................................ 7.170 09/19/19 3,923,628
3,305 Middlesex Cnty, NJ Util Auth Swr Rev Rfdg
Ser A (MBIA Insd).......................... 6.250 08/15/10 3,449,825
2,000 New Jersey Econ Dev Auth Cig Tax........... 5.750 06/15/34 1,908,800
750 New Jersey Econ Dev Auth Retirement Cmnty
Rev Seabrook Vlg Inc Fac Rfdg.............. 5.250 11/15/26 657,615
1,000 New Jersey Hlthcare Fac Fin Auth Rev Saint
Peter Univ Hosp Oblig...................... 5.750 07/01/37 961,630
565 New Jersey St Tpk Auth Tpk Rev Ser C (MBIA
Insd)...................................... 6.500 01/01/16 659,270
2,725 New Jersey St Tpk Auth Tpk Rev Ser C (MBIA
Insd) (f).................................. 6.500 01/01/16 3,135,930
5,710 New Jersey St Trans Corp Ctf Fed Trans
Admin Gnt Ser A (AMBAC Insd)............... 5.750 09/15/10 5,951,590
10,000 New Jersey St Trans Corp Ctf Fed Trans
Admin Gnt Ser B (AMBAC Insd) (Prerefunded @
9/15/10)................................... 6.000 09/15/15 10,860,100
2,000 Tobacco Settlement Fin Corp NJ Ser A1...... 4.750 06/01/34 1,585,520
8,000 Tobacco Settlement Fin Corp NJ Ser A1
(b)........................................ 5.000 06/01/41 6,410,840
-------------
39,834,178
-------------
NEW YORK 7.8%
5,000 Metropolitan Trans Auth NY Rev Ser B (FGIC
Insd)...................................... 5.250 11/15/18 5,300,050
5,000 New York City Hsg Dev Multi-Family Rev Hsg
Ser K (AMT)................................ 5.000 11/01/37 4,541,850
2,500 New York City Indl Dev Agy Civic Fac Rev
Polytechnic Univ Proj (ACA Insd)........... 5.250 11/01/37 2,070,375
3,000 New York City Indl Dev Agy Rev Liberty 7
World Trade Ctr Ser A...................... 6.250 03/01/15 3,034,500
2,300 New York City Indl Dev Agy Spl Fac Rev
Amern Air JFK Intl Arpt (AMT).............. 7.625 08/01/25 2,344,045
2,845 New York City Ser B (MBIA Insd)............ 5.875 08/01/15 3,048,076
10,000 New York City Ser C (MBIA Insd) (b)........ 5.000 06/15/27 10,156,500
10,000 New York City Transitional Fin Auth Future
Tax Secd Ser C (AMBAC Insd) (b)............ 5.250 08/01/19 10,433,600
</Table>
20 See Notes to Financial Statements
VAN KAMPEN MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- -----------------------------------------------------------------------------------------------
NEW YORK (CONTINUED)
$ 750 New York Liberty Dev Corp Rev Natl Sports
Museum Proj Ser A (Acquired 8/07/06, Cost
$750,000) (c).............................. 6.125% 02/15/19 $ 720,915
2,500 New York St Energy Resh & Dev Auth Gas Fac
Rev (i).................................... 8.601 04/01/20 2,609,450
3,000 New York St Energy Resh & Dev Auth Gas Fac
Rev Brooklyn Union Gas Ser B (AMT) (i)..... 9.894 07/01/26 3,093,270
1,300 Seneca Nation Indians Cap Impt Auth NY Spl
Oblig Ser A (e)............................ 5.000 12/01/23 1,146,730
-------------
48,499,361
-------------
NORTH CAROLINA 1.2%
3,900 Charlotte Mecklenburg Hosp Auth NC Hlthcare
Sys Rev Carolinas Ser J (FSA Insd) (a)..... 5.050 01/15/46 3,900,000
1,100 North Carolina Med Care Commn Hlthcare Fac
Rev First Mtg Salemtowne Proj Rfdg......... 5.100 10/01/30 947,210
2,000 North Carolina Med Care Commn Retirement
Fac Rev First Mtg Forest at Duke Rfdg...... 5.125 09/01/27 1,848,220
1,000 North Carolina Med Care Commn Retirement
Fac Rev First Mtg Southminster Proj Ser
A.......................................... 5.625 10/01/27 975,170
-------------
7,670,600
-------------
NORTH DAKOTA 0.5%
1,000 Grand Forks, ND Sr Hsg Rev 4000 Vly Square
Proj Rfdg.................................. 5.200 12/01/26 845,880
1,125 Ward Cnty, ND Hlthcare Fac Rev Trinity
Obligated Group Rfdg....................... 5.125 07/01/25 1,056,803
1,000 Ward Cnty, ND Hlthcare Fac Rev Trinity
Obligated Group Rfdg....................... 5.125 07/01/29 905,610
-------------
2,808,293
-------------
OHIO 3.3%
3,340 Adams Cnty Hosp Fac Impt Rev Adams Cnty
Hosp Proj.................................. 6.250 09/01/20 3,007,436
1,000 Akron Bath Copley OH Jt Twp Hosp Dist Rev
Akron Gen Hlth Sys Ser B (AMBAC Insd)
(a)........................................ 6.890 01/01/36 1,000,000
6,000 Buckeye, OH Tob Settlement Fin Auth Sr
Turbo Ser A-2.............................. 5.875 06/01/30 5,588,760
2,000 Buckeye, OH Tob Settlement Fin Auth Sr
Turbo Ser A-2.............................. 5.875 06/01/47 1,769,920
500 Cuyahoga Cnty, OH Hlthcare Indpt Living Fac
Rev Eliza Jennings Sr Care Ser A........... 5.750 05/15/27 450,905
6,000 Hamilton Cnty, OH Hlthcare Rev Life
Enriching Cmnty Proj Rfdg Ser A............ 5.000 01/01/37 5,278,740
</Table>
See Notes to Financial Statements 21
VAN KAMPEN MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- -----------------------------------------------------------------------------------------------
OHIO (CONTINUED)
$ 3,000 Ohio St Higher Ed Fac Commn Rev Hosp Univ
Hosp Hlth Sys Inc Ser A.................... 5.250% 01/15/46 $ 2,718,450
1,000 Tuscarawas Cnty, OH Hosp Fac Rev Twin City
Hosp Proj.................................. 6.100 11/01/22 915,000
-------------
20,729,211
-------------
OKLAHOMA 0.6%
1,050 Chickasaw Nation, OK Hlth Sys (e).......... 6.250 12/01/32 1,041,411
2,250 Oklahoma City, OK Pub Ppty Auth Hotel Tax
Rev (FGIC Insd)............................ 5.250 10/01/29 2,283,412
210 Oklahoma Hsg Fin Agy Single Family Rev Mtg
(GNMA Collateralized) (AMT)................ 7.997 08/01/18 226,695
-------------
3,551,518
-------------
OREGON 1.0%
5,000 Oregon Hlth Sciences Univ Insd Ser A (MBIA
Insd)...................................... 5.250 07/01/22 5,173,550
1,000 Port Morrow, OR Pollutn Ctl Portland
Rfdg....................................... 5.200 05/01/33 1,014,740
-------------
6,188,290
-------------
PENNSYLVANIA 0.8%
2,000 Allegheny Cnty, PA Hosp Dev Auth Rev Hlth
Sys West PA Ser A.......................... 5.000 11/15/28 1,614,160
500 Dauphin Cnty, PA Gen Auth Hlth Sys Rev
Pinnacle Hlth Sys Proj (FSA Insd) (a)...... 7.000 05/15/29 500,000
1,000 Montgomery Cnty, PA Higher Ed & Hlth Hosp
Rev Abington Mem Hosp Ser A (AMBAC Insd)
(a)........................................ 5.000 06/01/24 1,000,000
1,885 Montgomery Cnty, PA Indl Dev Auth Rev Mtg
Whitemarsh Continuing Care Proj............ 6.250 02/01/35 1,730,618
-------------
4,844,778
-------------
RHODE ISLAND 0.3%
1,075 Rhode Island Hsg & Mtg Fin Corp
Homeownership Oppty Ser 57-B (AMT)......... 5.350 10/01/37 1,015,284
710 Rhode Island St Econ Dev Corp Rev (g)...... 7.250 07/01/10 717,043
-------------
1,732,327
-------------
SOUTH CAROLINA 0.6%
700 Piedmont Muni Pwr Agy SC Elec Rev Rfdg..... 5.000 01/01/25 664,153
500 South Carolina Jobs Econ Dev Auth Hlth Fac
Rev First Mtg Wesley Commons Rfdg.......... 5.125 10/01/26 416,495
500 South Carolina Jobs Econ Dev Auth Hlthcare
Fac Rev First Mtg Lutheran Homes Rfdg...... 5.000 05/01/12 491,930
500 South Carolina Jobs Econ Dev Auth Hlthcare
Fac Rev First Mtg Lutheran Homes Rfdg...... 5.125 05/01/13 489,635
200 South Carolina Jobs Econ Dev Auth Hlthcare
Mtg Lutheran Homes Rfdg Fac Rev First...... 5.000 05/01/15 188,972
</Table>
22 See Notes to Financial Statements
VAN KAMPEN MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- -----------------------------------------------------------------------------------------------
SOUTH CAROLINA (CONTINUED)
$ 1,000 South Carolina Jobs Econ Dev Auth Hlthcare
Mtg Lutheran Homes Rfdg Fac Rev First...... 5.625% 05/01/42 $ 820,350
1,000 South Carolina Jobs Econ Dev Auth Rev
Woodlands at Furman Proj Ser A............. 6.000 11/15/27 928,730
-------------
4,000,265
-------------
SOUTH DAKOTA 1.3%
8,040 South Dakota Hsg Dev Auth Homeownership Mtg
Ser E (AMT) (b)............................ 8.371 05/01/36 6,806,543
1,250 South Dakota St Hlth & Ed Fac Auth Rev
Sioux Vly Hosp & Hlth Sys A................ 5.250 11/01/34 1,201,488
-------------
8,008,031
-------------
TENNESSEE 1.3%
1,000 Chattanooga, TN Hlth Ed & Hsg Fac Brd Rev
CDFI Phase I LLC Proj Rfdg Ser A........... 5.000 10/01/25 876,330
4,000 Elizabethton, TN Hlth & Ed Fac Brd Rev Rfdg
Ser B (MBIA Insd) (Prerefunded @
7/01/12)................................... 7.750 07/01/29 4,596,720
1,000 Johnson City, TN Hlth & Ed Fac Brd Hosp Rev
First Mtg Mtn St Hlth Ser A................ 5.500 07/01/36 930,970
2,000 Sullivan Cnty, TN Hlth Ed & Hsg Fac Brd
Hosp Rev Wellmont Hlth Sys Proj Ser C...... 5.250 09/01/36 1,752,300
-------------
8,156,320
-------------
TEXAS 15.3%
450 Angelina & Neches Riv Auth TX Indl Dev Corp
Environmental Aspen Pwr LLC Proj Ser A
(AMT)...................................... 6.500 11/01/29 370,984
1,550 Bell Cnty, TX Hlth Fac Dev Corp Rev Hosp
Scott White Mem Ser A-2 (FSA Insd) (a)..... 4.490 09/01/41 1,550,000
500 Bexar Cnty, TX Hlth Fac Dev Corp Hosp Rev
Saint Luke's Lutheran Hosp (f)............. 7.000 05/01/21 631,395
5,000 Dallas, TX Performing Arts Cultural Fac
Corp Cultural Dallas Ctr Fndtn Proj Ser A
(MBIA Insd) (a)............................ 8.750 09/01/41 5,000,000
5,000 Dallas-Fort Worth, TX Intl Arpt Rev Jt Impt
& Rfdg Ser A (FGIC Insd) (AMT)............. 5.500 11/01/31 4,808,250
500 Dallas-Fort Worth, TX Intl Arpt Rev Jt Ser
C (MBIA Insd) (AMT) (k).................... 5.750 11/01/18 500,420
1,000 Dallas-Fort Worth, TX Intl Arpt Rev Jt Ser
C (MBIA Insd) (AMT) (k).................... 6.000 11/01/23 1,001,280
2,000 Harris Cnty, TX Hlth Fac Dev Corp Hosp Rev
Baylor College Med Ser A-1 (AMBAC Insd)
(a)........................................ 8.110 11/15/47 2,000,000
4,975 Harris Cnty, TX Hlth Fac Dev Corp Hosp Rev
Baylor College Med Ser A-4 (AMBAC Insd)
(a)........................................ 8.480 11/15/47 4,975,000
</Table>
See Notes to Financial Statements 23
VAN KAMPEN MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- -----------------------------------------------------------------------------------------------
TEXAS (CONTINUED)
$ 2,100 Harris Cnty, TX Hlth Fac Dev Corp Hosp Rev
Stars Mem Hermann Hlthcare Ser B-2 (AMBAC
Insd) (a).................................. 11.500% 12/01/35 $ 2,100,000
2,450 Harris Cnty, TX Hlth Fac Dev Corp Rev
Christus Hlth Ser A-3 (FSA Insd) (a)....... 6.140 07/01/31 2,450,000
3,000 Harris Cnty-Houston, TX Sports Auth Spl Rev
Jr Lien Rfdg Ser B (MBIA Insd)............. 5.250 11/15/40 2,994,240
10,000 Houston, TX Hotel Occupancy Tax Convention
& Entmt Ser B (AMBAC Insd)................. 5.750 09/01/14 10,669,500
15,000 Lower CO Riv Auth TX Rev Rfdg Ser A (FSA
Insd) (b).................................. 5.875 05/15/14 15,696,375
12,500 Lower CO Riv Auth TX Rev Rfdg Ser A (FSA
Insd) (b).................................. 5.875 05/15/15 13,080,313
6,500 Lower CO Riv Auth TX Rev Rfdg Ser A (FSA
Insd) (b).................................. 5.875 05/15/16 6,802,510
1,250 Lufkin, TX Hlth Fac Dev Corp Hlth Sys Rev
Mem Hlth Sys East TX....................... 5.500 02/15/37 1,123,737
2,000 Metropolitan Hlth Fac Dev Corp TX Wilson N
Jones Mem Hosp Proj........................ 7.200 01/01/21 2,022,700
1,000 North TX Twy Auth Rev Rfdg Sys First Tier
Ser A (k).................................. 5.625 01/01/33 1,001,760
2,000 North TX Twy Auth Rev Rfdg Sys First Tier
Ser A (k).................................. 6.000 01/01/23 2,117,840
500 Tarrant Cnty, TX Cultural Ed Fac Fin Corp
Buckner Retirement Svc Inc Proj............ 5.000 11/15/17 498,085
2,200 Tarrant Cnty, TX Cultural Ed Fac Fin Corp
Retirement CC Young Mem Hom Proj........... 5.750 02/15/25 1,989,438
1,500 Tarrant Cnty, TX Cultural Ed Fac Fin Corp
Retirement CC Young Mem Hom Proj........... 5.750 02/15/29 1,332,465
1,750 Tarrant Cnty, TX Cultural Ed Fac Fin Corp
Retirement Fac Buckingham Sr Living Cmnty
Inc........................................ 5.750 11/15/37 1,510,968
5,000 Tarrant Cnty, TX Cultural Ed Fac Fin Corp
Retirement Fac Buckner Retirement Svc Inc
Proj....................................... 5.250 11/15/37 4,395,700
875 Texas St Dept Hsg & Cmnty Affairs Home Mtg
Rev Coll Rfdg Ser C-2 (GNMA Collateralized)
(AMT) (i).................................. 9.790 07/02/24 942,384
4,000 Texas St Trans Commn Mobility Fd (b)....... 5.000 04/01/28 4,066,140
-------------
95,631,484
-------------
UTAH 2.2%
1,340 Hildale, UT Elec Rev Gas Turbine Elec Fac
Proj (j)................................... 7.800 09/01/15 321,600
1,000 Hildale, UT Elec Rev Gas Turbine Elec Fac
Proj (j)................................... 7.800 09/01/25 240,000
</Table>
24 See Notes to Financial Statements
VAN KAMPEN MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- -----------------------------------------------------------------------------------------------
UTAH (CONTINUED)
$ 1,000 Hildale, UT Elec Rev Gas Turbine Elec Fac
Proj (j)................................... 8.000% 09/01/20 $ 240,000
11,000 Salt Lake City, UT Hosp Rev IHC Hosp Inc
Rfdg....................................... 6.150 02/15/12 11,956,120
600 Utah St Charter Sch Fin Auth Charter Sch
Rev Channing Hall Ser A (e)................ 5.750 07/15/22 566,718
600 Utah St Charter Sch Fin Auth Charter Sch
Rev Summit Academy Ser A................... 5.800 06/15/38 544,458
-------------
13,868,896
-------------
VERMONT 0.3%
1,000 Vermont Econ Dev Auth Mtg Rev Wake Robin
Corp Proj Ser A............................ 5.375 05/01/36 824,030
1,000 Vermont Ed & Hlth Bldg Fin Agy Rev
Bennington College Proj.................... 6.625 10/01/29 1,004,230
-------------
1,828,260
-------------
VIRGINIA 2.3%
900 Farms New Kent VA Cmnty Dev Auth Spl Assmt
Ser A...................................... 5.125 03/01/36 623,547
1,300 Lexington, VA Indl Dev Auth Residential
Care Fac Rev Mtg Kendal at Lexington Ser
A.......................................... 5.500 01/01/37 1,132,404
725 Norfolk, VA Econ Dev Auth Hosp Fac Rev
Sentara Hlthcare Ser B (FSA Insd) (a)...... 4.490 11/01/34 725,000
1,000 Peninsula Town Ctr Cmnty Dev Auth VA Spl
Oblig...................................... 6.450 09/01/37 867,030
1,000 Roanoke, VA Indl Dev Auth Hosp Rev Carilion
Hlth Sys Ser A-1 (FSA Insd) (a)............ 6.380 07/01/36 1,000,000
5,840 Virginia St Hsg Auth Dev Auth Rental Hsg
Ser D (AMT) (b)............................ 4.650 01/01/39 4,939,998
4,000 Virginia St Hsg Auth Dev Auth Ser B (AMT)
(b)........................................ 4.850 01/01/36 3,534,680
1,750 White Oak Vlg Shops VA Cmnty Dev Auth Spl
Assmt Rev.................................. 5.300 03/01/17 1,689,065
-------------
14,511,724
-------------
WASHINGTON 1.2%
950 Kalispel Tribe Indians Priority Dist WA
Rev........................................ 6.625 01/01/28 901,370
1,440 Skagit Cnty, WA Pub Hosp Dist No 001 Rev
Skagit Vly Hosp............................ 5.750 12/01/32 1,365,480
1,000 Washington St Hlthcare Fac Auth Rev
Multicare Hlth Sys Ser B (FSA Insd) (a).... 8.120 08/15/41 1,000,000
5,000 Washington St Hsg Fin Commn Single Family
Prog Ser 2-A (GNMA Collateralized) (AMT)... 4.700 12/01/38 4,123,150
-------------
7,390,000
-------------
</Table>
See Notes to Financial Statements 25
VAN KAMPEN MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- -----------------------------------------------------------------------------------------------
WEST VIRGINIA 0.3%
$ 1,000 Harrison Cnty, W VA Cnty Commn Solid Waste
Disp Rev Allegheny Energy Rfdg Ser D
(AMT)...................................... 5.500% 10/15/37 $ 920,200
250 Ohio Cnty, W VA Cnty Commn Tax Increment
Rev Fort Henry Centre Fin Dist Ser A....... 5.850 06/01/34 233,672
1,000 Pleasants Cnty, VA Pollutn Ctl Rev Cnty
Comm Allegheny Rfdg Ser F.................. 5.250 10/15/37 933,340
-------------
2,087,212
-------------
WISCONSIN 2.7%
4,000 Wisconsin Hsg & Econ Dev Auth Home
Ownership Rev Ser A (b).................... 4.800 03/01/38 3,446,000
6,000 Wisconsin Hsg & Econ Dev Auth Home
Ownership Rev Ser C (AMT) (b).............. 5.125 09/01/28 5,611,320
8,000 Wisconsin Hsg & Econ Dev Auth Home
Ownership Rev Ser C (AMT) (b).............. 5.200 03/01/38 7,481,760
-------------
16,539,080
-------------
TOTAL LONG-TERM INVESTMENTS 117.3%
(Cost $758,954,547)........................................................... 730,134,014
SHORT TERM INVESTMENT 0.1%
(Cost $800,000)............................................................... 800,000
-------------
TOTAL INVESTMENTS 117.4%
(Cost $759,754,547)........................................................... 730,934,014
LIABILITY FOR FLOATING RATE NOTE OBLIGATIONS RELATED TO SECURITIES HELD (17.5%)
(Cost ($108,890,000))
(108,890,000) Notes with interest rates ranging from 2.20% to 3.10% at March
31, 2008 and contractual maturities of collateral ranging from
2014 to 2041 (See Note 1) (l).................................... (108,890,000)
-------------
TOTAL NET INVESTMENTS 99.9%
(Cost $650,864,547)........................................................... 622,044,014
OTHER ASSETS IN EXCESS OF LIABILITIES 0.1%..................................... 763,507
-------------
NET ASSETS 100.0%.............................................................. $ 622,807,521
=============
</Table>
Percentages are calculated as a percentage of net assets.
* Zero coupon bond
(a) Variable Rate Coupon
26 See Notes to Financial Statements
VAN KAMPEN MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
(b) Underlying security related to Inverse Floaters entered into by the Fund.
See Notes 1 and 6.B.
(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 0.4% of net assets.
(d) Security is a "step-up" bond where the coupon increases or steps up at a
predetermined date.
(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
(g) The Fund owns 100% of the outstanding bond issuance.
(i) Inverse Floating Rate
(j) Non-income producing security.
(k) Security purchased on a when-issued or delayed delivery basis.
(l) Floating Rate Notes. The interest rates shown reflect rates in effect at
March 31, 2008.
(m) Security includes a feature allowing the Fund an option on any interest rate
payment date to offer the security for sale at par. The sale is contingent
upon market conditions.
ACA--American Capital Access
AGL--Assured Guaranty Ltd.
AMBAC--AMBAC Indemnity Corp.
AMT--Alternative Minimum Tax
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.
See Notes to Financial Statements 27
VAN KAMPEN MUNICIPAL INCOME FUND
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
March 31, 2008 (Unaudited)
<Table>
ASSETS:
Total Investments (Cost $759,754,547)....................... $730,934,014
Cash........................................................ 45,838
Receivables:
Interest.................................................. 8,739,252
Investments Sold.......................................... 6,266,200
Fund Shares Sold.......................................... 762,760
Other....................................................... 221,027
------------
Total Assets............................................ 746,969,091
------------
LIABILITIES:
Floating Rate Note Obligations.............................. 108,890,000
Payables:
Investments Purchased..................................... 12,341,575
Fund Shares Repurchased................................... 1,437,372
Income Distributions...................................... 546,370
Investment Advisory Fee................................... 258,690
Distributor and Affiliates................................ 195,180
Trustees' Deferred Compensation and Retirement Plans........ 304,546
Accrued Expenses............................................ 187,837
------------
Total Liabilities....................................... 124,161,570
------------
NET ASSETS.................................................. $622,807,521
============
NET ASSETS CONSIST OF:
Capital (Par value of $.01 per share with an unlimited
number of shares authorized).............................. $683,074,535
Accumulated Undistributed Net Investment Income............. 3,743,173
Net Unrealized Depreciation................................. (28,820,533)
Accumulated Net Realized Loss............................... (35,189,654)
------------
NET ASSETS.................................................. $622,807,521
============
MAXIMUM OFFERING PRICE PER SHARE:
Class A Shares:
Net asset value and redemption price per share (Based on
net assets of $583,986,963 and 43,388,649 shares of
beneficial interest issued and outstanding)............. $ 13.46
Maximum sales charge (4.75% * of offering price)........ 0.67
------------
Maximum offering price to public........................ $ 14.13
============
Class B Shares:
Net asset value and offering price per share (Based on
net assets of $18,304,125 and 1,361,853 shares of
beneficial interest issued and outstanding)............. $ 13.44
============
Class C Shares:
Net asset value and offering price per share (Based on
net assets of $20,206,048 and 1,505,846 shares of
beneficial interest issued and outstanding)............. $ 13.42
============
Class I Shares:
Net asset value and offering price per share (Based on
net assets of $310,385 and 23,062 shares of beneficial
interest issued and outstanding)........................ $ 13.46
============
</Table>
* On sales of $100,000 or more, the sales charge will be reduced.
28 See Notes to Financial Statements
VAN KAMPEN MUNICIPAL INCOME FUND
FINANCIAL STATEMENTS continued
Statement of Operations
For the Six Months Ended March 31, 2008 (Unaudited)
<Table>
INVESTMENT INCOME:
Interest.................................................... $ 20,434,584
Dividends................................................... 359
------------
Total Income............................................ 20,434,943
------------
EXPENSES:
Interest and Residual Trust Expenses........................ 2,041,426
Investment Advisory Fee..................................... 1,576,801
Distribution (12b-1) and Service Fees
Class A................................................. 754,414
Class B................................................. 98,289
Class C................................................. 96,251
Transfer Agent Fees......................................... 184,292
Accounting and Administrative Expenses...................... 78,534
Professional Fees........................................... 59,204
Custody..................................................... 33,130
Registration Fees........................................... 30,907
Reports to Shareholders..................................... 24,205
Trustees' Fees and Related Expenses......................... 15,228
Other....................................................... 14,531
------------
Total Expenses.......................................... 5,007,212
Less Credits Earned on Cash Balances.................... 14,239
------------
Net Expenses............................................ 4,992,973
------------
NET INVESTMENT INCOME....................................... $ 15,441,970
============
REALIZED AND UNREALIZED GAIN/LOSS:
Realized Gain/Loss:
Investments............................................... $ 2,694,225
Futures................................................... (1,159,860)
------------
Net Realized Gain........................................... 1,534,365
------------
Unrealized Appreciation/Depreciation:
Beginning of the Period................................... 10,834,798
End of the Period......................................... (28,820,533)
------------
Net Unrealized Depreciation During the Period............... (39,655,331)
------------
NET REALIZED AND UNREALIZED LOSS............................ $(38,120,966)
============
NET DECREASE IN NET ASSETS FROM OPERATIONS.................. $(22,678,996)
============
</Table>
See Notes to Financial Statements 29
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, 2008 SEPTEMBER 30, 2007
--------------------------------------
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income................................ $ 15,441,970 $ 27,914,832
Net Realized Gain/Loss............................... 1,534,365 (4,540,254)
Net Unrealized Depreciation During the Period........ (39,655,331) (19,599,518)
------------ -------------
Change in Net Assets from Operations................. (22,678,996) 3,775,060
------------ -------------
Distributions from Net Investment Income:
Class A Shares..................................... (14,384,938) (27,862,124)
Class B Shares..................................... (392,152) (951,197)
Class C Shares..................................... (387,412) (595,050)
Class I Shares..................................... (9,562) (53,788)
------------ -------------
Total Distributions.................................. (15,174,064) (29,462,159)
------------ -------------
NET CHANGE IN NET ASSETS FROM INVESTMENT
ACTIVITIES......................................... (37,853,060) (25,687,099)
------------ -------------
FROM CAPITAL TRANSACTIONS:
Proceeds from Shares Sold............................ 56,984,578 128,071,880
Net Asset Value of Shares Issued Through Dividend
Reinvestment....................................... 11,570,334 21,913,353
Cost of Shares Repurchased........................... (72,551,611) (118,477,242)
------------ -------------
NET CHANGE IN NET ASSETS FROM CAPITAL TRANSACTIONS... (3,996,699) 31,507,991
------------ -------------
TOTAL INCREASE/DECREASE IN NET ASSETS................ (41,849,759) 5,820,892
NET ASSETS:
Beginning of the Period.............................. 664,657,280 658,836,388
------------ -------------
End of the Period (Including accumulated
undistributed net investment income of $3,743,173
and $3,475,267, respectively)...................... $622,807,521 $ 664,657,280
============ =============
</Table>
30 See Notes to Financial Statements
VAN KAMPEN MUNICIPAL INCOME FUND
FINANCIAL STATEMENTS continued
Statement of Cash Flows
For the Six Months Ended March 31, 2008 (Unaudited)
<Table>
CHANGE IN NET ASSETS FROM OPERATIONS........................ $ (22,678,996)
-------------
ADJUSTMENTS TO RECONCILE THE CHANGE IN NET ASSETS FROM
OPERATIONS TO NET CASH PROVIDED BY OPERATING ACTIVITIES:
Purchases of Investments.................................. (176,415,575)
Proceeds from Sales/Maturities of Investments............. 168,570,186
Net Purchases of Short-Term Investments................... (800,000)
Amortization of Premium................................... 693,199
Accretion of Discount..................................... (819,502)
Net Realized Gain on Investments.......................... (2,694,225)
Net Change in Unrealized Depreciation on Investments...... 39,445,510
Decrease in Interest Receivables and Other Assets......... 231,384
Increase in Receivable for Investments Sold............... (6,216,200)
Decrease in Accrued Expenses and Other Payables........... (50,119)
Increase in Investments Purchased Payable................. 9,832,863
-------------
Total Adjustments....................................... 31,777,521
-------------
NET CASH PROVIDED BY OPERATING ACTIVITIES................... 9,098,525
-------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from Shares Sold................................. 57,164,412
Repurchased Shares........................................ (72,845,238)
Dividends Paid (net of reinvested dividends of
$11,570,334)............................................ (3,675,781)
Proceeds from Floating Rate Note Obligations.............. 11,840,000
Change in Custodian Bank Payable.......................... (1,536,080)
-------------
Net Cash Provided by Financing Activities................... (9,052,687)
-------------
NET INCREASE IN CASH........................................ 45,838
Cash at the Beginning of the Period......................... 0
-------------
CASH AT THE END OF THE PERIOD............................... $ 45,838
=============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash Paid During the Period for Interest.................... $ 2,041,426
=============
</Table>
See Notes to Financial Statements 31
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, ----------------------------------------------
2008 2007 2006 2005 2004 2003
-----------------------------------------------------------
NET ASSET VALUE, BEGINNING OF THE
PERIOD............................ $14.29 $14.84 $14.71 $14.81 $14.84 $15.03
------ ------ ------ ------ ------ ------
Net Investment Income (a)......... .34 .62 .64 .64 .66 .67
Net Realized and Unrealized
Gain/Loss....................... (.84) (.52) .14 (.09) (.05) (.19)
------ ------ ------ ------ ------ ------
Total from Investment Operations.... (.50) .10 .78 .55 .61 .48
Less Distributions from Net
Investment Income................. .33 .65 .65 .65 .64 .67
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF THE
PERIOD............................ $13.46 $14.29 $14.84 $14.71 $14.81 $14.84
====== ====== ====== ====== ====== ======
Total Return (b).................... -3.52%* .66% 5.46% 3.78% 4.20% 3.31%
Net Assets at End of the Period (In
millions)......................... $584.0 $625.9 $613.6 $587.6 $609.4 $658.5
Ratio of Expenses to Average Net
Assets............................ 1.51% 1.28% 1.11% 1.04% .98% .92%
Ratio of Net Investment Income to
Average Net Assets................ 4.83% 4.21% 4.40% 4.35% 4.46% 4.53%
Portfolio Turnover.................. 23%* 28% 16% 30% 11% 43%
SUPPLEMENTAL RATIO:
Ratio of Expenses to Average Net
Assets (Excluding Interest and
Residual Trust Expenses).......... .87% .87% .89% .88% .89% .88%
</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.
32 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 B SHARES MARCH 31, ----------------------------------------------
2008 2007 2006 2005 2004 2003
-----------------------------------------------------------
NET ASSET VALUE, BEGINNING OF THE
PERIOD............................ $14.27 $14.82 $14.69 $14.79 $14.82 $15.02
------ ------ ------ ------ ------ ------
Net Investment Income (a)......... .29 .51 .53 .53 .55 .56
Net Realized and Unrealized
Gain/Loss....................... (.84) (.52) .14 (.09) (.05) (.20)
------ ------ ------ ------ ------ ------
Total from Investment Operations.... (.55) (.01) .67 .44 .50 .36
Less Distributions from Net
Investment Income................. .28 .54 .54 .54 .53 .56
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF THE
PERIOD............................ $13.44 $14.27 $14.82 $14.69 $14.79 $14.82
====== ====== ====== ====== ====== ======
Total Return (b).................... -3.90%* -.09% 4.69% 3.03% 3.41% 2.48%
Net Assets at End of the Period (In
millions)......................... $ 18.3 $ 20.9 $ 29.6 $ 38.1 $ 48.8 $ 58.4
Ratio of Expenses to Average Net
Assets............................ 2.26% 2.03% 1.86% 1.79% 1.73% 1.67%
Ratio of Net Investment Income to
Average Net Assets................ 4.07% 3.45% 3.64% 3.60% 3.71% 3.78%
Portfolio Turnover.................. 23%* 28% 16% 30% 11% 43%
SUPPLEMENTAL RATIO:
Ratio of Expenses to Average Net
Assets (Excluding Interest and
Residual Trust Expenses).......... 1.63% 1.62% 1.64% 1.63% 1.64% 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.
See Notes to Financial Statements 33
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, ----------------------------------------------
2008 2007 2006 2005 2004 2003
-----------------------------------------------------------
NET ASSET VALUE, BEGINNING OF THE
PERIOD............................ $14.24 $14.79 $14.67 $14.77 $14.80 $15.00
------ ------ ------ ------ ------ ------
Net Investment Income (a)......... .29 .50 .53 .53 .55 .56
Net Realized and Unrealized
Gain/Loss....................... (.83) (.51) .13 (.09) (.05) (.20)
------ ------ ------ ------ ------ ------
Total from Investment Operations.... (.54) (.01) .66 .44 .50 .36
Less Distributions from Net
Investment Income................. .28 .54 .54 .54 .53 .56
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF THE
PERIOD............................ $13.42 $14.24 $14.79 $14.67 $14.77 $14.80
====== ====== ====== ====== ====== ======
Total Return (b).................... -3.83%* -.10% 4.62% 3.03% 3.43% 2.48%
Net Assets at End of the Period (In
millions)......................... $ 20.2 $ 17.4 $ 14.3 $ 12.5 $ 13.7 $ 17.0
Ratio of Expenses to Average Net
Assets............................ 2.26% 2.04% 1.86% 1.79% 1.73% 1.67%
Ratio of Net Investment Income to
Average Net Assets................ 4.11% 3.46% 3.65% 3.60% 3.71% 3.78%
Portfolio Turnover.................. 23%* 28% 16% 30% 11% 43%
SUPPLEMENTAL RATIO:
Ratio of Expenses to Average Net
Assets (Excluding Interest and
Residual Trust Expenses).......... 1.63% 1.62% 1.64% 1.63% 1.64% 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.
34 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>
AUGUST 12, 2005
SIX MONTHS YEAR ENDED (COMMENCEMENT OF
ENDED SEPTEMBER 30, OPERATIONS) TO
CLASS I SHARES MARCH 31, ---------------- SEPTEMBER 30,
2008 2007 2006 2005
------------------------------------------------
NET ASSET VALUE, BEGINNING OF THE PERIOD..... $14.29 $14.83 $14.71 $14.71
------ ------ ------ ------
Net Investment Income (a).................. .36 .65 .68 .09
Net Realized and Unrealized Gain/Loss...... (.84) (.50) .13 -0-**
------ ------ ------ ------
Total from Investment Operations............. (.48) .15 .81 .09
Less Distributions from Net Investment
Income..................................... .35 .69 .69 .09
------ ------ ------ ------
NET ASSET VALUE, END OF THE PERIOD........... $13.46 $14.29 $14.83 $14.71
====== ====== ====== ======
Total Return (b)............................. -3.39%* .98% 5.65% .60%*
Net Assets at End of the Period (In
millions).................................. $ 0.3 $ 0.4 $ 1.4 $ 1.3
Ratio of Expenses to Average Net Assets...... 1.26% 1.03% .86% .82%
Ratio of Net Investment Income to Average Net
Assets..................................... 5.06% 4.42% 4.67% 4.56%
Portfolio Turnover........................... 23%* 28% 16% 30%
SUPPLEMENTAL RATIO:
Ratio of Expenses to Average Net Assets
(Excluding Interest and Residual Trust
Expenses).................................. .62% .62% .64% .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.
See Notes to Financial Statements 35
VAN KAMPEN MUNICIPAL INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2008 (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.
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, 2008, the Fund had $7,118,129 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.
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
36
VAN KAMPEN MUNICIPAL INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2008 (UNAUDITED) continued
provision for federal income taxes is required. The Fund adopted the provisions
of the Financial Accounting Standards Board ("FASB") Interpretation No. 48 ("FIN
48") Accounting for Uncertainty in Income Taxes on March 31, 2008. FIN 48 sets
forth a minimum threshold for financial statement recognition of the benefit of
a tax position taken or expected to be taken in a tax return. The implementation
of FIN 48 did not result in any unrecognized tax benefits in the accompanying
financial statements. If applicable, the Fund recognizes interest accrued
related to unrecognized tax benefits in "Interest Expense" and penalties in
"Other" expenses on the Statement of Operations. The Fund files tax returns with
the U.S. Internal Revenue Service, New York and various states. Generally, each
of the tax years in the four year period ended September 30, 2007, remains
subject to examination by taxing authorities
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, 2007, the Fund had an accumulated capital loss
carryforward for tax purposes of $32,062,970, 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
10,905,393 .......................................................... September 30, 2015
</Table>
At March 31, 2008, the cost and related gross unrealized appreciation and
depreciation are as follows:
<Table>
Cost of investments for tax purposes........................ $648,091,224
============
Gross tax unrealized appreciation........................... 12,172,826
Gross tax unrealized depreciation........................... (38,220,036)
------------
Net tax unrealized depreciation investments................. $(26,047,210)
============
</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,
2007 were as follows:
<Table>
Distributions paid from:
Ordinary income........................................... $ 35,564
Tax-exempt income......................................... 29,485,531
-----------
$29,521,095
===========
</Table>
37
VAN KAMPEN MUNICIPAL INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2008 (UNAUDITED) continued
As of September 30, 2007, the components of distributable earnings on a tax
basis were as follows:
<Table>
Undistributed ordinary income............................... $ 8,822
Undistributed tax-exempt income............................. 5,695,373
</Table>
F. CREDITS EARNED ON CASH BALANCES During the six months ended March 31, 2008,
the Fund's custody fee was reduced by $14,239 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" in 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, 2008, Fund investments with a value of $178,322,063 are held
by the dealer trusts and serve as collateral for the $108,890,000 in floating
rate notes outstanding at that date. Contractual maturities of the floating rate
notes and interest rates in effect at March 31, 2008 are presented on the
Portfolio of Investments. The average floating rate notes outstanding and
average annual interest and fee rate related to residual interests during the
six months ended March 31, 2008 were $114,345,000 and 3.57%, respectively.
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>
38
VAN KAMPEN MUNICIPAL INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2008 (UNAUDITED) continued
For the six months ended March 31, 2008, the Fund recognized expenses of
approximately $9,900 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,
2008, the Fund recognized expenses of approximately $42,400 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, 2008, the Fund recognized expenses of approximately $86,400
representing transfer agency fees paid to VKIS and its affiliates. The 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 $195,610 are included in
"Other" assets on the Statements of Assets and Liabilities at March 31, 2008.
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, 2008, Van Kampen as Distributor for the
Fund, received commissions on sales of the Fund's Class A Shares of
approximately $55,000 and contingent deferred sales charge (CDSC) on redeemed
shares of approximately $23,000. Sales charges do not represent expenses of the
Fund.
At March 31, 2008, Morgan Stanley Investment Management, Inc., an affiliate
of the Adviser, owned 710 shares of Class I Shares.
39
VAN KAMPEN MUNICIPAL INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2008 (UNAUDITED) continued
3. CAPITAL TRANSACTIONS
For the six months ended March 31, 2008 and the year ended September 30, 2007,
transactions were as follows:
<Table>
<Caption>
FOR THE FOR THE
SIX MONTHS ENDED YEAR ENDED
MARCH 31, 2008 SEPTEMBER 30, 2007
-------------------------- ---------------------------
SHARES VALUE SHARES VALUE
Sales:
Class A.......................... 3,444,271 $ 47,947,004 7,958,556 $ 116,581,855
Class B.......................... 109,949 1,535,961 232,994 3,415,117
Class C.......................... 536,311 7,491,611 529,298 7,705,059
Class I.......................... 710 10,002 25,014 369,849
---------- ------------ ---------- -------------
Total Sales........................ 4,091,241 $ 56,984,578 8,745,862 $ 128,071,880
========== ============ ========== =============
Dividend Reinvestment:
Class A.......................... 795,327 $ 11,007,588 1,420,178 $ 20,771,004
Class B.......................... 20,529 283,739 45,058 659,229
Class C.......................... 19,581 269,643 29,448 429,344
Class I.......................... 676 9,364 3,660 53,776
---------- ------------ ---------- -------------
Total Dividend Reinvestment........ 836,113 $ 11,570,334 1,498,344 $ 21,913,353
========== ============ ========== =============
Repurchases:
Class A.......................... (4,666,051) $(65,404,244) (6,919,500) $(100,953,481)
Class B.......................... (236,676) (3,319,569) (805,247) (11,759,781)
Class C.......................... (271,047) (3,749,028) (302,403) (4,386,869)
Class I.......................... (5,768) (78,770) (94,713) (1,377,111)
---------- ------------ ---------- -------------
Total Repurchases.................. (5,179,542) $(72,551,611) (8,121,863) $(118,477,242)
========== ============ ========== =============
</Table>
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 and allocated on a pro rata basis to
each class of shares. For the six months ended March 31, 2008, the Fund received
redemption fees of approximately $3,700, 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 $176,415,575 and $168,570,186,
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
40
VAN KAMPEN MUNICIPAL INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2008 (UNAUDITED) continued
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. 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, 2008,
were as follows:
<Table>
<Caption>
CONTRACTS
Outstanding at September 30, 2007........................... 238
Futures Opened.............................................. 190
Futures Closed.............................................. (428)
----
Outstanding at March 31, 2008............................... 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 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
41
VAN KAMPEN MUNICIPAL INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2008 (UNAUDITED) continued
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 $2,486,900 and $233,200
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 PRONOUNCEMENT
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. As of March 31, 2008, the Adviser does not believe the adoption of
SFAS 157 will impact the amounts reported in the financial statements, however,
additional disclosures will be required about the inputs used to develop the
measurements of fair value and the effect of certain measurements reported on
the Statement of Operations for a fiscal period.
42
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
KEVIN KLINGERT
Vice President
AMY R. DOBERMAN
Vice President
STEFANIE V. CHANG
Vice President and Secretary
JOHN L. SULLIVAN
Chief Compliance Officer
STUART N. SCHULDT
Chief Financial Officer and Treasurer
INVESTMENT ADVISER
VAN KAMPEN ASSET MANAGEMENT
522 Fifth Avenue
New York, New York 10036
DISTRIBUTOR
VAN KAMPEN FUNDS INC.
522 Fifth Avenue
New York, New York 10036
SHAREHOLDER SERVICING AGENT
VAN KAMPEN INVESTOR SERVICES INC.
P.O. Box 219286
Kansas City, Missouri 64121-9286
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 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.
522 Fifth Avenue
New York, New York 10036
www.vankampen.com
Copyright (C)2008 Van Kampen Funds Inc.
All rights reserved. Member FINRA/SIPC.
49, 349, 549, 649
MIFSAN 5/08
(VAN KAMPEN INVESTMENTS LOGO) IU08-02785P-Y03/08
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, 2008.
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 3/31/08
<Table>
<Caption>
A SHARES B SHARES C SHARES I SHARES
since since since since
5/28/93 5/28/93 10/19/93 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 CHARGES CHARGES CHARGES CHARGES CHARGES CHARGES
Since Inception 4.96% 4.61% 4.55% 4.55% 4.03% 4.03% 3.06%
10-year 4.10 3.59 3.66 3.66 3.35 3.35 --
5-year 3.29 2.30 3.15 2.88 2.55 2.55 --
1-year 1.57 -3.24 1.65 -2.28 0.93 -0.06 1.93
6-months 0.49 -4.30 0.58 -3.37 0.21 -0.78 0.62
- -----------------------------------------------------------------------------------------------------
SEC 30-Day Yield 4.18% 4.41% 3.66% 4.64%
- -----------------------------------------------------------------------------------------------------
Unsubsidized
SEC 30-Day Yield 4.09% 4.31% 3.56% 4.54%
</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 reflects 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, (iii)
qualified state tuition plan (529 plan) accounts, (iv) institutional clients
with assets of at least $1 million and (v) certain Van Kampen investment
companies. 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. Periods of
less than one year are not annualized. 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 30-day yield is a calculation for
determining the amount of portfolio income, excluding non-income items as
prescribed by the SEC. The unsubsidized SEC 30-day 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, 2008
MARKET CONDITIONS
The financial markets experienced significant volatility throughout the six-
month reporting period as many large banks and financial firms began writing
down mortgage-related losses, and liquidity and credit availability became even
more restricted. At the same time, the pace of economic growth began to slow,
with gross domestic product (GDP) growth measuring an anemic 0.6 percent for the
fourth quarter of 2007. As weaker economic data was released in the first
quarter of 2008, fears of recession grew and consumer confidence waned,
prompting investors to continue to seek out the relative safety of high quality
Treasury securities over other sectors of the fixed income market.
The municipal bond market faced additional headwinds as various monoline bond
insurers experienced credit quality downgrades and the auction rate and variable
rate markets deteriorated. As a result, the municipal market underperformed
Treasuries for the overall period, with municipal bond prices reaching the
cheapest levels ever relative to Treasury bonds in the first quarter of 2008.
While yields on short-dated municipal securities declined, yields on
intermediate- and long-dated securities rose, leading to the steepest yield
curve in the past four years as the spread between one-year and 30-year
maturities reached 343 basis points. After a record year for new municipal bond
issuance in 2007, the amount of new issues coming to market in the first quarter
of 2008 declined by roughly 25 percent due in large part to a substantial drop
in refunding issuance.
The Federal Reserve (the "Fed") took various steps to ease the liquidity crisis
and boost the economy during the period. Not only did the Fed reduce the target
federal funds rate from 4.75 percent to 2.25 percent by the end of the period,
but in an unprecedented move, it granted primary brokerage firms access to its
discount window and loosened its collateral requirements, extending loans of
Treasury securities in exchange for lower quality, less liquid securities.
Finally, in the biggest headline event, the Fed arranged and supported JP Morgan
Chase's purchase of Bear Stearns, which was viewed by many as necessary to avoid
serious market repercussions had the firm failed.
2
PERFORMANCE ANALYSIS
All share classes of Van Kampen Intermediate Term Municipal Income Fund
underperformed the Lehman Brothers Municipal Bond Index for the six months ended
March 31, 2008, assuming no deduction of applicable sales charges.
TOTAL RETURNS FOR THE SIX-MONTH PERIOD ENDED MARCH 31, 2008
<Table>
<Caption>
- -------------------------------------------------------------------
LEHMAN BROTHERS
MUNICIPAL
CLASS A CLASS B CLASS C CLASS I BOND INDEX
0.49% 0.58% 0.21% 0.62% 0.75%
- -------------------------------------------------------------------
</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.
Although the municipal market rebounded in the last month of the reporting
period and outperformed Treasuries, it was an extremely difficult period
overall, particularly for higher yielding, lower-rated bonds as the
flight-to-quality put considerable pressure on prices. The Fund maintained an
allocation to double-B and non-rated bonds throughout the reporting period
whereas the Lehman Brother Municipal Bond Index contains only investment grade
issues. As such, the Fund's overweight to lower rated, higher yielding
securities was a primary contributor to its relative underperformance.
The Fund's yield curve positioning also hindered performance. The Fund was
underweighted in the three-year portion of the curve and overweighted in the
10-year portion of the curve. Over the course of the reporting period, Fed
easing pushed yields on the front end of the yield curve lower while yields on
10-year maturities rose slightly. As a result, the 10-year segment of the curve
underperformed and the Fund's greater relative exposure here held back returns.
Conversely, positions in higher yielding municipal auction rate securities with
low durations (a measure of interest-rate sensitivity) were additive to
performance for the period, as was the Fund's overall shorter duration.
Underweighted positions in housing and tobacco bonds were also beneficial as
spread widening in the sectors hurt their performance.
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.
3
<Table>
<Caption>
RATINGS ALLOCATION AS OF 3/31/08
AAA/Aaa 48.0%
AA/Aa 8.9
A/A 11.1
BBB/Baa 12.5
Non-Rated 19.5
<Caption>
TOP FIVE SECTORS AS OF 3/31/08
Hospital 19.6%
Public Education 9.8
Life Care 7.1
General Purpose 7.0
Retail Electric 6.7
<Caption>
SUMMARY OF INVESTMENTS BY STATE CLASSIFICATION AS OF 3/31/08
Florida 10.5%
Pennsylvania 7.9
California 7.5
Texas 7.2
Missouri 5.7
Illinois 5.4
Colorado 4.9
Ohio 4.7
Alabama 4.1
Indiana 4.0
New Jersey 3.8
Maryland 3.4
North Carolina 3.0
Michigan 2.9
New York 2.8
Washington 2.8
Kansas 2.3
South Carolina 2.3
Tennessee 2.2
New Mexico 2.1
Louisiana 1.5
Georgia 1.4
Nebraska 1.4
South Dakota 1.4
Kentucky 1.2
Arizona 1.1
Virginia 1.1
Massachusetts 0.9
Oregon 0.9
Arkansas 0.8
Minnesota 0.6
</Table>
<Table>
(continued on next page)
</Table>
4
<Table>
<Caption>
SUMMARY OF INVESTMENTS BY STATE CLASSIFICATION AS OF 3/31/08
(continued from previous page)
Iowa 0.4
Oklahoma 0.4
Wisconsin 0.4
North Dakota 0.4
Delaware 0.4
West Virginia 0.2
Utah 0.1
Connecticut 0.1
-----
Total Investments 104.2
Liability for Floating Rate Note Obligations (1.6)
-----
Total Net Investments 102.6
Liabilities in Excess of Other Assets (2.6)
-----
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.
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 email 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 P.O.
Box 219286, Kansas City, MO 64105. 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 10/1/07 - 3/31/08.
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*
-----------------------------------------------------
10/1/07 3/31/08 10/1/07-3/31/08
Class A
Actual................................. $1,000.00 $1,004.92 $5.06
Hypothetical........................... 1,000.00 1,019.95 5.10
(5% annual return before expenses)
Class B
Actual................................. 1,000.00 1,005.80 5.11
Hypothetical........................... 1,000.00 1,019.90 5.15
(5% annual return before expenses)
Class C
Actual................................. 1,000.00 1,002.11 8.81
Hypothetical........................... 1,000.00 1,016.20 8.87
(5% annual return before expenses)
Class I
Actual................................. 1,000.00 1,006.18 3.81
Hypothetical........................... 1,000.00 1,021.20 3.84
(5% annual return before expenses)
</Table>
* Expenses are equal to the Fund's annualized expense ratio of 1.01%, 1.02%,
1.76% and 0.76% for Class A, B, C and I Shares, respectively, multiplied by
the average account value over the period, multiplied by 183/366 (to reflect
the one-half year period). These expense ratios reflect an expense waiver.
The expense ratio for Class B Shares reflects actual 12b-1 fees of less than
1%.
Assumes all dividends and distributions were reinvested.
8
The following table show 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*
-------------------------------------------------
10/1/07 3/31/08 10/1/07-3/31/08
Class A
Actual..................................... $1,000.00 $1,004.92 $5.01
Hypothetical............................... 1,000.00 1,020.00 5.05
(5% annual return before expenses)
Class B
Actual..................................... 1,000.00 1,005.80 5.06
Hypothetical............................... 1,000.00 1,019.95 5.10
(5% annual return before expenses)
Class C
Actual..................................... 1,000.00 1,002.11 8.76
Hypothetical............................... 1,000.00 1,016.25 8.82
(5% annual return before expenses)
Class I
Actual..................................... 1,000.00 1,006.18 3.76
Hypothetical............................... 1,000.00 1,021.25 3.79
(5% annual return before expenses)
</Table>
* Expenses are equal to the Fund's annualized expense ratio of 1.00%, 1.01%,
1.75% and 0.75% for Class A, B, C and I Shares, respectively, multiplied by
the average account value over the period, multiplied by 183/366 (to reflect
the one-half year period). These expense ratios reflect an expense waiver.
The expense ratio for Class B Shares reflects actual 12b-1 fees of less than
1%.
Assumes all dividends and distributions were reinvested.
9
VAN KAMPEN INTERMEDIATE TERM MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED)
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- -------------------------------------------------------------------------------------------
MUNICIPAL BONDS 102.6%
ALABAMA 4.1%
$1,260 Dothan Houston Cnty, AL Arpt Auth (MBIA Insd)
(AMT) (a)....................................... 5.400% 12/01/15 $ 1,313,790
1,000 Hlthcare Auth for Baptist Hlth AL Ser B (AGL
Insd) (b) (h)................................... 6.750 11/15/37 1,000,000
1,000 Jefferson Cnty, AL Pub Bldg Auth Lease Rev Wts
(AMBAC Insd).................................... 5.125 04/01/21 924,340
1,500 Montgomery Cnty, AL Pub Bldg Auth Rev Wts Fac
Proj (MBIA Insd) (a)............................ 5.000 03/01/23 1,542,390
------------
4,780,520
------------
ARIZONA 1.1%
1,000 Arizona St Univ Rev Sys Rfdg (AMBAC Insd)....... 5.000 07/01/20 1,041,240
290 Pima Cnty, AZ Indl Dev Auth Indl Rev Lease Oblig
Irvington Proj Tucson Rfdg Ser A (FSA Insd)..... 7.250 07/15/10 299,239
------------
1,340,479
------------
ARKANSAS 0.8%
950 University of AR Rev UALR Cap Impt Ser B (FSA
Insd)........................................... 4.500 12/01/19 982,680
------------
CALIFORNIA 7.5%
1,090 California Ed Fac Auth Rev Occidental College
Ser A (MBIA Insd) (a)........................... 5.000 10/01/20 1,136,347
1,000 California St (AMBAC Insd) (a).................. 6.400 09/01/08 1,019,680
1,500 California St Dept Wtr Res Pwr Ser A (AMBAC
Insd) (Prerefunded @ 5/01/12)................... 5.375 05/01/18 1,662,150
1,000 Carlsbad, CA Spl Tax Non Escrow Cmnty
Fac 3 Impt 2.................................... 5.700 09/01/22 957,420
500 Morongo Band of Mission Indians CA Enterprise
Rev Indians Enterprise Casino Ser B (Acquired
03/31/2008, Cost $500,000) (c).................. 5.500 03/01/18 500,000
1,000 Palomar Pomerado Hlthcare Dist CA Ctf Partn Ser
C (FSA Insd) (b) (h)............................ 7.090 11/01/36 1,000,000
565 Perris, CA Pub Fin Auth Rev Tax Alloc (a)....... 4.750 10/01/13 566,356
500 Quechan Indian Tribe Ft Yuma Indian Res CA Govt
Proj............................................ 6.625 12/01/17 489,255
1,100 Santa Clara, CA Elec Rev Sub Ser A (MBIA
Insd)........................................... 5.250 07/01/20 1,145,628
250 Southern CA Pub Pwr Auth Nat Gas Proj
No 1 Ser A...................................... 5.250 11/01/21 248,980
------------
8,725,816
------------
COLORADO 4.9%
500 Colorado Hlth Fac Auth Rev Christian Living
Cmnty Proj Ser A................................ 5.250 01/01/15 479,920
1,560 Colorado Springs, CO Util Rev Sys Sub Lien
Impt Ser A...................................... 5.000 11/15/19 1,628,437
</Table>
10 See Notes to Financial Statements
VAN KAMPEN INTERMEDIATE TERM MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- -------------------------------------------------------------------------------------------
COLORADO (CONTINUED)
$1,000 Denver, CO City & Cnty Arpt Rev Rfdg Ser D (FSA
Insd) (AMT)..................................... 5.500% 11/15/12 $ 1,061,670
2,000 Denver, CO City & Cnty Justice Sys (d).......... 5.000 08/01/24 2,076,770
500 Denver, CO City & Cnty Justice Sys (d).......... 5.000 08/01/25 519,192
------------
5,765,989
------------
CONNECTICUT 0.1%
115 New Haven, CT Indl Fac Rev Adj Govt Ctr Thermal
Energies (AMT).................................. 7.250 07/01/09 115,777
------------
DELAWARE 0.4%
500 New Castle Cnty, DE Rev Newark Charter Sch Inc
Proj............................................ 5.000 09/01/22 449,720
------------
FLORIDA 8.9%
1,000 Brevard Cnty, FL Sch Brd Ctf Rfdg Ser B
(FGIC Insd)..................................... 5.000 07/01/20 1,015,370
1,000 Broward Cnty, FL Arpt Sys Rev Rfdg Ser E (MBIA
Insd) (AMT)..................................... 5.375 10/01/13 1,016,270
2,000 Halifax, FL Hosp Med Ctr Hosp Rev Ser B-2 (FSA
Insd) (b) (h)................................... 7.280 06/01/46 2,000,000
500 Halifax, FL Hosp Med Ctr Hosp Rev & Impt Rfdg
Ser A........................................... 5.250 06/01/19 502,930
500 Hillsborough Cnty, FL Indl Dev Auth Pollutn Ctl
Rev Ida Rfdg (AMBAC Insd)....................... 5.000 12/01/34 495,275
250 Landmark at Doral Cmnty Dev Dist FL Spl Assmt
Ser B........................................... 5.200 05/01/15 214,272
250 Main St Cmnty Dev Dist FL Cap Impt Ser B........ 6.900 05/01/17 248,600
1,000 Miami Dade Cnty, FL Hlth Fac Auth Hosp Rev Miami
Childrens Hosp Proj A (MBIA Insd) (b) (h)....... 6.000 08/01/46 1,000,000
500 Orange Cnty, FL Hlth Fac Auth Rfdg Hlth Care
Orlando Lutheran................................ 5.375 07/01/20 457,280
1,500 Orange Cnty, FL Sch Brd Ctf Ser A (AMBAC
Insd)........................................... 5.250 08/01/14 1,600,365
500 Saint Johns Cnty, FL Indl Dev Auth Hlthcare
Glenmoor Proj Ser A............................. 5.000 01/01/16 462,745
750 Seminole Tribe, FL Spl Oblig Rev Ser A (e)...... 5.750 10/01/22 735,210
670 Tolomato Cmnty Dev Dist FL Spl Assmt............ 6.450 05/01/23 661,384
------------
10,409,701
------------
GEORGIA 1.4%
1,000 Atlanta, GA Tax Alloc Atlantic Sta Proj Rfdg
(AGL Insd)...................................... 5.250 12/01/17 1,086,300
80 Forsyth Cnty, GA Hosp Auth Rev Antic Ctf GA
Baptist Hlthcare Sys Proj (f)................... 6.000 10/01/08 81,402
500 Gwinnett Cnty, GA Hosp Auth Rev Antic Ctf
Gwinnett Hosp Sys Proj Ser E (FSA Insd) (b)
(h)............................................. 7.000 07/01/34 500,000
------------
1,667,702
------------
</Table>
See Notes to Financial Statements 11
VAN KAMPEN INTERMEDIATE TERM MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- -------------------------------------------------------------------------------------------
ILLINOIS 5.4%
$ 545 Clay Cnty, IL Hosp Rev
(Prerefunded @ 12/01/08) (a).................... 5.500% 12/01/10 $ 568,043
500 Hodgkins, IL Tax Increment Rev Sr Lien Rfdg..... 5.000 01/01/14 519,695
31 Huntley, IL Spl Svc Area No 7 Spl Tax (f)....... 6.000 03/01/09 32,011
1,197 Huntley, IL Spl Svc Area No 7 Spl Tax Rfdg (AGL
Insd) (a)....................................... 4.600 03/01/17 1,246,280
125 Illinois Fin Auth Rev Carle Fndtn Ser A-4 (FGIC
Insd) (b) (h)................................... 5.950 02/15/35 125,000
500 Illinois Fin Auth Rev Landing at Plymouth Pl
Proj Ser A...................................... 5.250 05/15/14 482,970
750 Illinois Fin Auth Rev Rfdg Fairview Oblig Group
Ser A........................................... 6.000 08/15/22 716,257
1,000 Illinois Fin Auth Rev Advocate Hlthcare Ser B-2
(AMBAC Insd) (b) (h)............................ 6.490 11/01/38 1,000,000
400 Lincolnshire, IL Spl Svc Area Sedgebrook Proj... 5.000 03/01/11 395,768
213 Pingree Grove Village, IL Spl Svc Area No 1 Spl
Tax Cambridge Lakes Proj Ser 05................. 5.250 03/01/15 205,980
1,000 Round Lake Beach, IL Tax Increment Rev.......... 4.650 12/15/13 1,009,440
------------
6,301,444
------------
INDIANA 4.0%
1,000 Allen Cnty, IN Juvenile Just Ctr First Mtg
(AMBAC Insd).................................... 5.500 01/01/18 1,061,210
1,000 Carmel Cnty, IN Redev Auth Opt Income Tax Lease
Rent Rev (MBIA Insd)............................ 5.000 07/01/22 1,034,070
830 Hobart, IN Bldg Corp First Mtg (FGIC Insd)
(a)............................................. 5.500 07/15/13 920,802
250 Reid Hosp & Hlthcare Svc Inc Richmond, IN Hosp
Auth Reid Hosp Proj Ser B (FSA Insd) (b) (h).... 5.640 01/01/45 250,000
1,000 Reid Hosp & Hlthcare Svc Inc Richmond, IN Hosp
Auth Reid Hosp Proj Ser C (FSA Insd) (b) (h).... 5.540 01/01/45 1,000,000
400 Saint Joseph Cnty, IN Econ Dev Rev Holy Cross
Vlg Notre Dame Proj Ser A....................... 5.750 05/15/13 399,180
------------
4,665,262
------------
IOWA 0.4%
500 Coralville, IA Ctf Partn Ser D.................. 5.250 06/01/22 509,270
------------
KANSAS 2.3%
1,000 Burlington, KS Environmental Impt Rev KC Rfdg
Pwr Lt Ser B (XLCA Insd) (b) (g)................ 5.000 12/01/23 997,800
500 Kansas St Dev Fin Auth Hlth Fac Rev Hays Med Ctr
Inc Ser L....................................... 5.250 11/15/16 527,640
1,000 Shawnee Cnty, KS Sch Dist 501 Topeka
(Prerefunded @ 2/01/12)......................... 5.000 02/01/20 1,077,590
120 Wyandotte Cnty, KS City KS Univ Brd of Public
Util Office Bldg Complex Proj (MBIA Insd)....... 5.000 05/01/11 126,594
------------
2,729,624
------------
</Table>
12 See Notes to Financial Statements
VAN KAMPEN INTERMEDIATE TERM MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- -------------------------------------------------------------------------------------------
KENTUCKY 1.2%
$ 310 Kentucky Hsg Corp Hsg Rev Ser A (AMT)........... 5.000% 01/01/23 $ 302,086
1,000 Louisville & Jefferson Cnty, KY Ser C
(FSA Insd) (AMT)................................ 5.500 07/01/17 1,089,840
------------
1,391,926
------------
LOUISIANA 1.5%
250 Colonial Pinnacle Cmnty Dev Dist Dev (g)........ 6.750 05/01/23 247,098
598 Lakeshore Vlg Master Cmnty Dev Dist LA
Spl Assmt....................................... 5.250 07/01/17 531,885
1,000 Rapides Fin Auth LA Rev Cleco Pwr Proj (AMT).... 5.250 11/01/37 998,580
------------
1,777,563
------------
MARYLAND 3.4%
1,000 Baltimore, MD Convention Ctr Hotel Rev Ser A
(XLCA Insd)..................................... 5.250 09/01/22 1,000,630
1,000 Maryland St Econ Dev Corp Student Hsg Rev Univ
MD College Pk Proj Rfdg (CIFG Insd)............. 5.000 06/01/13 1,053,120
625 Maryland St Econ Dev Corp Univ MD College Pk
Proj (f)........................................ 5.750 06/01/13 708,906
250 Maryland St Hlth & Higher Ed Fac Auth Rev
Washington Cnty Hosp............................ 5.250 01/01/23 239,095
500 Maryland St Hlth & Higher King Farm Presbyterian
Cmnty Ser B..................................... 5.000 01/01/17 476,600
500 Prince Georges Cnty, MD Spl Oblig Natl
Harbor Proj..................................... 4.700 07/01/15 481,660
------------
3,960,011
------------
MASSACHUSETTS 0.9%
1,000 Massachusetts St Hlth & Ed Fac Auth Rev
Caregroup Ser C-2 (AMBAC Insd) (b) (h).......... 7.500 07/01/25 1,000,000
25 Massachusetts St Indl Fin Agy Rev Gtr Lynn
Mental Hlth (Acquired 06/24/98, Cost $25,000)
(c) (f)......................................... 6.200 06/01/08 25,170
------------
1,025,170
------------
MICHIGAN 2.9%
1,000 Brighton, MI Area Sch Dist Rfdg (a)............. 5.250 05/01/18 1,060,020
1,000 Brighton, MI Area Sch Dist Rfdg................. 5.250 05/01/20 1,060,020
1,000 Kent Hosp Fin Auth MI Rev Spectrum Hlth
Ser A (g)....................................... 5.500 01/15/47 1,048,270
250 Michigan St Strategic Fd Ltd Oblig United Waste
Sys Proj (AMT).................................. 5.200 04/01/10 256,220
------------
3,424,530
------------
MINNESOTA 0.6%
250 Duluth, MN Hsg & Redev Auth Hlthcare & Hsg Rev
Benedictine Hlth Ctr Proj....................... 5.500 11/01/17 244,443
430 Inver Grove Heights, MN Presbyterian Homes Care
Rfdg............................................ 5.000 10/01/16 415,982
------------
660,425
------------
</Table>
See Notes to Financial Statements 13
VAN KAMPEN INTERMEDIATE TERM MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- -------------------------------------------------------------------------------------------
MISSOURI 5.7%
$ 500 Fenton, MO Tax Increment Rev Gravois Bluffs
Redev Proj Rfdg................................. 5.000% 04/01/13 $ 525,345
610 Ferguson, MO Tax Increment Rev Crossing at Halls
Ferry Rfdg (a).................................. 5.500 04/01/14 616,978
1,350 Kansas City, MO Indl Dev Auth Plaza Lib Proj.... 6.000 03/01/16 1,374,421
1,000 Macon, MO Ctf Partn (MBIA Insd)................. 5.250 08/01/17 1,026,640
250 Maryland Heights, MO Tax Increment Rev South
Heights Proj Rfdg Ser A......................... 5.500 09/01/18 243,518
500 Raytown, MO Annual Raytown Live Redev
Plan Proj 1..................................... 5.000 12/01/16 524,335
2,000 Saint Charles, MO Ctf Partn Ser B............... 5.500 05/01/18 2,091,740
250 Saint Louis Cnty, MO Indl Dev Auth Sr Living Fac
Rev Friendship Vlg West Cnty Ser A.............. 5.250 09/01/17 237,768
------------
6,640,745
------------
NEBRASKA 1.4%
1,500 University of NE Fac Corp Defd Maint
(AMBAC Insd).................................... 5.000 07/15/17 1,627,215
------------
NEW JERSEY 3.8%
1,500 New Jersey Econ Dev Auth Rev Cig Tax............ 5.500 06/15/16 1,525,605
1,000 New Jersey Hlthcare Fac Fin Auth Rev Saint
Clare's Hosp Inc Rfdg Ser A (Radian Insd)....... 5.250 07/01/20 1,025,600
455 Rahway, NJ Ctf Partn (MBIA Insd)................ 5.500 02/15/16 479,188
565 Rahway, NJ Ctf Partn (MBIA Insd)................ 5.600 02/15/17 596,227
920 Tobacco Settlement Fin Corp NJ Ser 1A........... 4.500 06/01/23 834,946
------------
4,461,566
------------
NEW MEXICO 2.1%
1,000 Jicarilla, NM Apache Nation Rev Ser A (Acquired
10/23/03, Cost $1,020,380) (c).................. 5.500 09/01/23 1,026,010
1,310 New Mexico Fin Auth Rev Sr Lien Pub Proj
Revolving Fd Ser B (MBIA Insd).................. 5.000 06/01/17 1,419,320
------------
2,445,330
------------
NEW YORK 2.8%
500 Albany, NY Indl Dev Agy Civic Fac Rev Saint
Peters Hosp Proj Ser A.......................... 5.750 11/15/22 515,995
110 Brookhaven, NY Indl Dev Agy Sr Residential Hsg
Rev Woodcrest Estates Fac Ser A (AMT)........... 5.875 12/01/09 112,000
1,000 Long Island Pwr Auth NY Elec Gen Ser C
(Prerefunded @ 9/01/13)......................... 5.500 09/01/17 1,126,870
230 Madison Cnty, NY Indl Dev Agy Civic Fac Rev
Oneida Hlth Sys Inc Proj Ser A.................. 4.500 02/01/17 219,167
</Table>
14 See Notes to Financial Statements
VAN KAMPEN INTERMEDIATE TERM MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- -------------------------------------------------------------------------------------------
NEW YORK (CONTINUED)
$ 500 New York City Indl Dev Agy Rev Liberty 7 World
Trade Ctr Ser A................................. 6.250% 03/01/15 $ 505,750
780 New York City Indl Dev Agy Spl Fac Rev Term One
Group Assn Proj (AMT)........................... 5.000 01/01/10 798,314
5 Niagara Falls, NY Pub Impt (MBIA Insd).......... 6.900 03/01/20 5,008
------------
3,283,104
------------
NORTH CAROLINA 3.0%
1,000 Charlotte Mecklenburg Hosp Auth NC Hlthcare Sys
Rev Carolinas Ser J (FSA Insd) (b) (h).......... 5.050 01/15/46 1,000,000
630 North Carolina Eastn Muni Pwr Agy Pwr Sys Rev
Ser D........................................... 6.450 01/01/14 660,574
500 North Carolina Med Care Commn Hlthcare Fac Rev
Rfdg First Mtg Salemtowne (a)................... 5.000 10/01/15 507,335
250 North Carolina Med Care Commn Retirement Fac Rev
First Mtg Southminster Proj Ser A............... 5.300 10/01/19 247,562
1,000 North Carolina Muni Pwr Agy Ser A (MBIA Insd)... 5.250 01/01/19 1,042,320
------------
3,457,791
------------
NORTH DAKOTA 0.4%
500 Grand Forks, ND Sr Hsg Rev 4000 Vly Square Proj
Rfdg............................................ 5.000 12/01/16 452,545
------------
OHIO 4.7%
500 Adams Cnty Hosp Fac Impt Rev Adams Cnty Hosp
Proj............................................ 6.250 09/01/20 450,215
500 Athens Cnty, OH Hosp Fac Rev & Impt O' Bleness
Mem Rfdg Ser A.................................. 6.250 11/15/13 505,020
2,300 Buckeye, OH Tob Settlement Fin Auth Asset Bkd Sr
Turbo Ser A2.................................... 5.125 06/01/24 2,152,087
1,370 Cleveland, OH Non Tax Rev Cleveland Stad Proj
Rfdg (AMBAC Insd)............................... 5.125 12/01/20 1,424,594
185 Dayton, OH Spl Fac Rev Afco Cargo Day LLC Proj
(AMT) (a)....................................... 6.000 04/01/09 183,576
750 Ohio Muni Elec Generation Agy Jt Venture 5 Ctf
Ben Int Rfdg (AMBAC Insd)....................... 5.000 02/15/21 764,280
------------
5,479,772
------------
OKLAHOMA 0.4%
500 Chickasaw Nation, OK Hlth Sys (e)............... 5.375 12/01/17 494,140
------------
OREGON 0.9%
1,000 Port Morrow, OR Pollutn Ctl Portland Gen
Rfdg Ser A...................................... 5.200 05/01/33 1,014,740
------------
</Table>
See Notes to Financial Statements 15
VAN KAMPEN INTERMEDIATE TERM MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- -------------------------------------------------------------------------------------------
PENNSYLVANIA 7.9%
$ 500 Allegheny Cnty, PA Indl Dev Auth Lease Rev
Residential Res Inc Proj........................ 5.000% 09/01/21 $ 481,290
250 Allegheny Cnty, PA Redev Auth Rev Pittsburgh
Mills Proj...................................... 5.100 07/01/14 250,895
1,120 Canon McMillan Sch Dist PA Rfdg Ser A
(MBIA Insd)..................................... 5.000 12/15/15 1,205,008
250 Lancaster Cnty, PA Hosp Auth Rev Brethren Vlg
Proj Ser A...................................... 5.200 07/01/12 253,620
500 Monroe Cnty, PA Hosp Auth Rev Hosp Pocono Med
Ctr............................................. 5.000 01/01/17 501,370
1,000 Montgomery Cnty, PA Higher Ed & Hlth Hosp Rev
Abington Mem Hosp Ser A (AMBAC Insd) (b) (h).... 5.000 06/01/24 1,000,000
500 Montgomery Cnty, PA Indl Dev Auth Rev Mtg
Whitemarsh Cont Care Proj....................... 6.000 02/01/21 474,455
900 Philadelphia, PA Gas Wks Rev Ser 3 (FSA Insd)... 5.000 08/01/10 949,401
750 Philadelphia, PA Gas Wks Rev Ser 18 (AGL
Insd)........................................... 5.250 08/01/18 797,940
2,000 Philadelphia, PA Redev Auth Rev Neighborhood
Trans Ser A (FGIC Insd)......................... 5.500 04/15/16 2,147,920
1,090 Wilson, PA Area Sch Dist (FGIC Insd)............ 5.125 03/15/17 1,166,605
------------
9,228,504
------------
SOUTH CAROLINA 2.3%
1,000 Kershaw Cnty, SC Pub Sch Fndtn Installment Pwr
Rev Kershaw Cnty Sch Dist Proj (CIFG Insd)...... 5.000 12/01/22 989,690
1,065 Lexington, SC Wtr & Swr Rev & Impt Comb Rfdg Ser
A (MBIA Insd) (a)............................... 5.000 04/01/14 1,110,476
500 South Carolina Jobs Econ Dev Auth Hlthcare Fac
Rev First Mtg Lutheran Homes Rfdg............... 5.000 05/01/12 491,930
135 South Carolina Jobs Econ Dev Auth Hlthcare Fac
Rev First Mtg Lutheran Homes Rfdg............... 5.125 05/01/13 132,201
------------
2,724,297
------------
SOUTH DAKOTA 1.4%
1,515 Minnehaha Cnty, SD Ctf Ltd Tax (FSA Insd)....... 5.000 12/01/18 1,597,734
------------
TENNESSEE 2.2%
415 Chattanooga, TN Hlth Ed Hsg Fac CDFI Phase I LLC
Proj Rfdg Ser A................................. 5.000 10/01/15 414,871
700 Franklin, TN Spl Sch Dist Cap Apprec (FSA
Insd)........................................... * 06/01/15 525,028
1,000 Gatlinburg, TN Pub Bldg Auth Rfdg (AMBAC
Insd)........................................... 5.750 12/01/11 1,104,390
500 Shelby Cnty, TN Hlth Ed & Hsg Fac Brd Rev
Trezevant Manor Proj Ser A...................... 5.250 09/01/16 486,070
------------
2,530,359
------------
</Table>
16 See Notes to Financial Statements
VAN KAMPEN INTERMEDIATE TERM MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- -------------------------------------------------------------------------------------------
TEXAS 7.2%
$ 240 Dallas Cnty, TX Flood Ctl Dist Rfdg............. 6.750% 04/01/16 $ 246,326
1,000 Dallas, TX Performing Arts Cultural Fac Corp
Cultural Dallas Ctr Fndtn Proj Ser A (MBIA Insd)
(b) (h)......................................... 8.750 09/01/41 1,000,000
500 Dallas-Fort Worth, TX Intl Arpt Rev Jt Ser C
(MBIA Insd) (AMT) (g)........................... 5.750 11/01/18 500,420
500 Dallas-Fort Worth, TX Intl Arpt Rev Jt Ser C
(MBIA Insd) (AMT) (g)........................... 6.000 11/01/23 500,640
1,000 Harris Cnty, TX Hlth Fac Dev Corp Hosp Rev
Baylor College Med Ser A-1 (AMBAC Insd) (b)
(h)............................................. 8.110 11/15/47 1,000,000
525 Harris Cnty, TX Hlth Fac Dev Corp Hosp Rev
Baylor College Med Ser A-4 (AMBAC Insd) (b)
(h)............................................. 8.480 11/15/47 525,000
1,000 Harris Cnty, TX Hlth Fac Dev Corp Hosp Rev Stars
Mem Hermann Hlthcare Ser B-2 (AMBAC Insd) (b)
(h)............................................. 11.500 12/01/35 1,000,000
500 Harris Cnty, TX Hlth Fac Dev Corp Rev Christus
Hlth Ser A-3 (FSA Insd) (b) (h)................. 6.140 07/01/31 500,000
500 Hidalgo Cnty, TX Hlth Svc Mission Hosp Inc
Proj............................................ 5.000 08/15/13 505,600
350 Hidalgo Cnty, TX Hlth Svc Mission Hosp Inc
Proj............................................ 5.000 08/15/19 331,643
250 Lufkin, TX Hlth Fac Dev Corp Hlth Sys Rev Mem
East Texas...................................... 5.125 02/15/22 235,643
500 Mesquite, TX Hlth Fac Dev Retirement Christian
Care............................................ 5.000 02/15/15 495,390
1,000 North TX Twy Auth Rev Rfdg Sys First
Tier Ser A (g).................................. 6.000 01/01/23 1,058,920
500 Tarrant Cnty, TX Cultural Ed Fac Fin Corp
Buckner Retirement Svc Inc Proj................. 5.000 11/15/17 498,085
------------
8,397,667
------------
UTAH 0.1%
150 Utah St Charter Sch Fin Auth Charter Sch Rev
Channing Hall Ser A (e)......................... 5.750 07/15/22 141,680
------------
VIRGINIA 1.1%
1,000 Tobacco Settlement Fin Corp VA Asset Bkd........ 5.250 06/01/19 1,058,260
250 White Oak Vlg Shops VA Cmnty Dev Auth Spl Assmt
Rev............................................. 5.300 03/01/17 241,295
------------
1,299,555
------------
WASHINGTON 2.8%
200 Kalispel Tribe Indians Priority Distr WA Rev.... 6.200 01/01/16 194,294
1,000 Klickitat Cnty, WA Pub Util Dist No 001 Elec Rev
Rfdg Ser B (FGIC Insd).......................... 5.250 12/01/22 1,032,250
2,000 Washington St Hlthcare Fac Auth Rev Multicare
Hlth Sys Ser B (FSA Insd) (b) (h)............... 8.120 08/15/41 2,000,000
------------
3,226,544
------------
</Table>
See Notes to Financial Statements 17
VAN KAMPEN INTERMEDIATE TERM MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- -------------------------------------------------------------------------------------------
WEST VIRGINIA 0.2%
$ 250 Ohio Cnty, VA Cnty Commn Tax Increment Rev Fort
Henry Ctr Fin Dist Ser A........................ 5.625% 06/01/22 $ 244,728
------------
WISCONSIN 0.4%
500 Wisconsin St Hlth & Ed Fac Beaver Dam Cmnty Hosp
Inc Ser A....................................... 5.500 08/15/14 487,270
------------
TOTAL LONG-TERM INVESTMENTS 102.6%
(Cost $119,651,071)....................................................... 119,918,895
SHORT-TERM INVESTMENTS 1.6%
(Cost $1,900,000)......................................................... 1,900,000
------------
TOTAL INVESTMENTS 104.2%
(Cost $121,551,071)....................................................... 121,818,895
LIABILITY FOR FLOATING RATE NOTE OBLIGATIONS RELATED TO SECURITIES
HELD (1.6%)
(Cost ($1,875,000))
(1,875) Notes with interest rate of 2.65% at March 31, 2008 and
contractual maturities of collateral ranging from 2024 to 2025
(See Note 1) (i).................................................. (1,875,000)
------------
TOTAL NET INVESTMENTS 102.6%
(Cost $119,676,071)....................................................... 119,943,895
LIABILITIES IN EXCESS OF OTHER ASSETS (2.6%)............................... (3,041,073)
------------
NET ASSETS 100.0%.......................................................... $116,902,822
============
</Table>
Percentages are calculated as a percentage of net assets.
* Zero coupon bond
(a) The Fund owns 100% of the outstanding bond issuance.
(b) Variable Rate Coupon
(c) 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 1.3% of net assets.
(d) Underlying security related to Inverse Floaters entered into by the Trust.
See Note 1.
(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
18 See Notes to Financial Statements
VAN KAMPEN INTERMEDIATE TERM MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
(g) Security purchased on a when-issued or delayed delivery basis.
(h) Security includes a feature allowing the Fund an option on any interest rate
payment date to offer the security for sale at par. The sale is contingent
upon market conditions.
(i) Floating rate notes. The interest rates shown reflect the rates in effect at
March 31, 2008.
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.
See Notes to Financial Statements 19
VAN KAMPEN INTERMEDIATE TERM MUNICIPAL INCOME FUND
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
March 31, 2008 (Unaudited)
<Table>
ASSETS:
Total Investments (Cost $121,551,071)....................... $121,818,895
Cash........................................................ 1,220,512
Receivables:
Interest.................................................. 1,414,375
Investments Sold.......................................... 182,026
Other....................................................... 156,334
------------
Total Assets............................................ 124,792,142
------------
LIABILITIES:
Payables:
Investments Purchased..................................... 4,833,586
Floating Rate Note Obligations............................ 1,875,000
Fund Shares Repurchased................................... 721,322
Income Distributions...................................... 76,355
Investment Advisory Fee................................... 38,417
Distributor and Affiliates................................ 19,696
Trustees' Deferred Compensation and Retirement Plans........ 230,397
Accrued Expenses............................................ 94,547
------------
Total Liabilities....................................... 7,889,320
------------
NET ASSETS.................................................. $116,902,822
============
NET ASSETS CONSIST OF:
Capital (Par value of $0.01 per share with an unlimited
number of shares authorized).............................. $116,239,916
Accumulated Undistributed Net Investment Income............. 320,641
Net Unrealized Appreciation................................. 267,824
Accumulated Net Realized Gain............................... 74,441
------------
NET ASSETS.................................................. $116,902,822
============
MAXIMUM OFFERING PRICE PER SHARE:
Class A Shares:
Net asset value and redemption price per share (Based on
net assets of $92,395,641 and 8,838,388 shares of
beneficial interest issued and outstanding)............. $ 10.45
Maximum sales charge (4.75%* of offering price)......... 0.52
------------
Maximum offering price to public........................ $ 10.97
============
Class B Shares:
Net asset value and offering price per share (Based on
net assets of $10,149,830 and 957,854 shares of
beneficial interest issued and outstanding)............. $ 10.60
============
Class C Shares:
Net asset value and offering price per share (Based on
net assets of $13,825,208 and 1,324,185 shares of
beneficial interest issued and outstanding)............. $ 10.44
============
Class I Shares:
Net asset value and offering price per share (Based on
net assets of $532,143 and 50,924 shares of beneficial
interest issued and outstanding)........................ $ 10.45
============
</Table>
* On sales of $100,000 or more, the sales charge will be reduced.
20 See Notes to Financial Statements
VAN KAMPEN INTERMEDIATE TERM MUNICIPAL INCOME FUND
FINANCIAL STATEMENTS continued
Statement of Operations
For the Six Months Ended March 31, 2008 (Unaudited)
<Table>
INVESTMENT INCOME:
Interest.................................................... $ 2,590,339
-----------
EXPENSES:
Investment Advisory Fee..................................... 276,970
Distribution (12b-1) and Service Fees
Class A................................................... 108,180
Class B................................................... 13,346
Class C................................................... 66,346
Transfer Agent Fees......................................... 37,714
Accounting and Administrative Expenses...................... 36,357
Professional Fees........................................... 30,740
Registration Fees........................................... 29,903
Reports to Shareholders..................................... 22,410
Trustees' Fees and Related Expenses......................... 12,874
Custody..................................................... 6,795
Interest and Residual Trust Expenses........................ 5,403
Other....................................................... 19,503
-----------
Total Expenses.......................................... 666,541
Expense Reduction....................................... 55,394
Less Credits Earned on Cash Balances.................... 683
-----------
Net Expenses............................................ 610,464
-----------
NET INVESTMENT INCOME....................................... $ 1,979,875
===========
REALIZED AND UNREALIZED GAIN/LOSS:
Net Realized Gain........................................... $ 170,710
-----------
Unrealized Appreciation/Depreciation:
Beginning of the Period................................... 1,892,489
End of the Period......................................... 267,824
-----------
Net Unrealized Depreciation During the Period............... (1,624,665)
-----------
NET REALIZED AND UNREALIZED LOSS............................ $(1,453,955)
===========
NET INCREASE IN NET ASSETS FROM OPERATIONS.................. $ 525,920
===========
</Table>
See Notes to Financial Statements 21
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, 2008 SEPTEMBER 30, 2007
--------------------------------------
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income................................ $ 1,979,875 $ 3,726,472
Net Realized Gain/Loss............................... 170,710 (102,179)
Net Unrealized Depreciation During the Period........ (1,624,665) (947,962)
------------ ------------
Change in Net Assets from Operations................. 525,920 2,676,331
------------ ------------
Distributions from Net Investment Income:
Class A Shares..................................... (1,576,862) (2,770,289)
Class B Shares..................................... (191,405) (441,554)
Class C Shares..................................... (191,841) (373,168)
Class I Shares..................................... (5,866) (33,145)
------------ ------------
Total Distributions.................................. (1,965,974) (3,618,156)
------------ ------------
NET CHANGE IN NET ASSETS FROM INVESTMENT
ACTIVITIES......................................... (1,440,054) (941,825)
------------ ------------
FROM CAPITAL TRANSACTIONS:
Proceeds from Shares Sold............................ 29,745,533 26,136,611
Net Asset Value of Shares Issued Through Dividend
Reinvestment....................................... 1,494,946 2,714,649
Cost of Shares Repurchased........................... (18,641,813) (31,830,839)
------------ ------------
NET CHANGE IN NET ASSETS FROM CAPITAL TRANSACTIONS... 12,598,666 (2,979,579)
------------ ------------
TOTAL INCREASE/DECREASE IN NET ASSETS................ 11,158,612 (3,921,404)
NET ASSETS:
Beginning of the Period.............................. 105,744,210 109,665,614
------------ ------------
End of the Period (Including accumulated
undistributed net investment income of $320,641 and
$306,740, respectively)............................ $116,902,822 $105,744,210
============ ============
</Table>
22 See Notes to Financial Statements
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 MAR. 31, ------------------------------------------------------
2008 2007 2006 2005 2004 2003
----------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF
THE PERIOD.................... $10.59 $10.68 $10.69 $10.72 $10.76 $10.86
------ ------ ------ ------ ------ ------
Net Investment Income......... 0.19(a) 0.38(a) 0.37(a) 0.36 0.37 0.38
Net Realized and Unrealized
Gain/Loss................... (0.14) (0.10) 0.04 (0.01) 0.04 (0.03)
------ ------ ------ ------ ------ ------
Total from
Investment Operations......... 0.05 0.28 0.41 0.35 0.41 0.35
------ ------ ------ ------ ------ ------
Less:
Distributions from Net
Investment Income........... 0.19 0.37 0.37 0.37 0.37 0.40
Distributions from Net
Realized Gain............... -0- -0- 0.05 0.01 0.08 0.05
------ ------ ------ ------ ------ ------
Total Distributions............. 0.19 0.37 0.42 0.38 0.45 0.45
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF
THE PERIOD.................... $10.45 $10.59 $10.68 $10.69 $10.72 $10.76
====== ====== ====== ====== ====== ======
Total Return* (b)............... 0.49%** 2.63% 3.91% 3.31% 3.84% 3.33%
Net Assets at End of the Period
(In millions)................. $ 92.4 $ 81.4 $ 79.4 $ 88.2 $ 76.5 $ 70.1
Ratio of Expenses to Average Net
Assets*....................... 1.01% 0.98% 0.99% 0.99% 0.93% 0.84%
Ratio of Net Investment Income
to Average Net Assets*........ 3.67% 3.54% 3.46% 3.32% 3.50% 3.55%
Portfolio Turnover.............. 21%** 11% 21% 34% 60% 35%
SUPPLEMENTAL RATIO:
Ratio of Expenses to Average Net
Assets (Excluding Interest and
Residual Trust Expenses)*..... 1.00% 0.98% 0.99% 0.99% 0.93% 0.84%
* 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................. 1.11% 1.08% 1.09% 1.09% 1.03% 1.04%
Ratio of Net Investment
Income to Average Net
Assets..................... 3.57% 3.44% 3.36% 3.22% 3.40% 3.35%
SUPPLEMENTAL RATIO:
Ratio of Expenses to Average Net
Assets (Excluding Interest and
Residual Trust Expenses)...... 1.10% 1.08% 1.09% 1.09% 1.03% 1.04%
</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 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 23
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 MAR. 31, ------------------------------------------------------
2008 2007 2006 2005 2004 2003
----------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF THE
PERIOD.............................. $10.73 $10.82 $10.82 $10.75 $10.78 $10.84
------ ------ ------ ------ ------ ------
Net Investment Income............... 0.20(a) 0.38(a) 0.39(a) 0.40 0.30 0.32
Net Realized and Unrealized
Gain/Loss......................... (0.14) (0.10) 0.04 (0.03) 0.04 (0.01)
------ ------ ------ ------ ------ ------
Total from Investment Operations..... 0.06 0.28 0.43 0.37 0.34 0.31
------ ------ ------ ------ ------ ------
Less:
Distributions from Net Investment
Income............................ 0.19 0.37 0.38 0.29 0.29 0.32
Distributions from Net
Realized Gain..................... -0- -0- 0.05 0.01 0.08 0.05
------ ------ ------ ------ ------ ------
Total Distributions.................. 0.19 0.37 0.43 0.30 0.37 0.37
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF THE PERIOD... $10.60 $10.73 $10.82 $10.82 $10.75 $10.78
====== ====== ====== ====== ====== ======
Total Return* (b).................... 0.58%(d)** 2.59%(d) 4.13%(d) 3.47%(d) 3.15%(d) 2.96%(c)
Net Assets at End of the Period (In
millions)........................... $ 10.1 $ 11.1 $ 14.6 $ 16.9 $ 20.3 $ 23.9
Ratio of Expenses to Average Net
Assets*............................. 1.02%(d) 0.98%(d) 0.78%(d) 0.82%(d) 1.67%(d) 1.59%
Ratio of Net Investment Income to
Average Net Assets*................. 3.65%(d) 3.55%(d) 3.67%(d) 3.51%(d) 2.76%(d) 3.08%(c)
Portfolio Turnover................... 21%** 11% 21% 34% 60% 35%
SUPPLEMENTAL RATIO:
Ratio of Expenses to Average Net
Assets (Excluding Interest and
Residual Trust Expenses)*........... 1.01%(d) 0.98%(d) 0.78%(d) 0.82%(d) 1.67%(d) 1.59%
* 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........................... 1.12%(d) 1.08%(d) 0.88%(d) 0.92%(d) 1.77%(d) 1.79%
Ratio of Net Investment Income to
Average Net Assets............... 3.55%(d) 3.45%(d) 3.57%(d) 3.41%(d) 2.66%(d) 2.88%(c)
SUPPLEMENTAL RATIO:
Ratio of Expenses to Average Net
Assets (Excluding Interest and
Residual Trust Expenses)............ 1.11%(d) 1.08%(d) 0.88%(d) 0.92%(d) 1.77%(d) 1.79%
</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 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).
24 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 C SHARES MAR. 31, ----------------------------------------------
2008 2007 2006 2005 2004 2003
------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF
THE PERIOD................................. $10.57 $10.66 $10.68 $10.70 $10.73 $10.82
------ ------ ------ ------ ------ ------
Net Investment Income...................... 0.15(a) 0.30(a) 0.29(a) 0.29 0.30 0.30
Net Realized and Unrealized
Gain/Loss................................ (0.13) (0.10) 0.03 (0.01) 0.04 (0.02)
------ ------ ------ ------ ------ ------
Total from Investment Operations............ 0.02 0.20 0.32 0.28 0.34 0.28
------ ------ ------ ------ ------ ------
Less:
Distributions from Net Investment Income... 0.15 0.29 0.29 0.29 0.29 0.32
Distributions from Net
Realized Gain............................ -0- -0- 0.05 0.01 0.08 0.05
------ ------ ------ ------ ------ ------
Total Distributions......................... 0.15 0.29 0.34 0.30 0.37 0.37
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF THE PERIOD.......... $10.44 $10.57 $10.66 $10.68 $10.70 $10.73
====== ====== ====== ====== ====== ======
Total Return* (b)........................... 0.21%** 1.88%(d) 3.04% 2.64%(d) 3.17%(d) 2.69%(c)
Net Assets at End of the Period (In
millions).................................. $ 13.8 $13.0 $14.7 $16.5 $18.1 $21.4
Ratio of Expenses to Average
Net Assets*................................ 1.76% 1.72%(d) 1.74% 1.64%(d) 1.66%(d) 1.59%
Ratio of Net Investment Income to Average
Net Assets*................................ 2.91% 2.81%(d) 2.71% 2.69%(d) 2.77%(d) 2.84%(c)
Portfolio Turnover.......................... 21%** 11% 21% 34% 60% 35%
SUPPLEMENTAL RATIO:
Ratio of Expenses to Average Net Assets
(Excluding Interest and Residual Trust
Expenses)*................................. 1.75% 1.72%(d) 1.74% 1.64%(d) 1.66%(d) 1.59%
* 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... 1.86% 1.82%(d) 1.84% 1.74%(d) 1.76%(d) 1.79%
Ratio of Net Investment Income to Average
Net Assets.............................. 2.81% 2.71%(d) 2.61% 2.59%(d) 2.67%(d) 2.64%(c)
SUPPLEMENTAL RATIO:
Ratio of Expenses to Average Net Assets
(Excluding Interest and Residual Trust
Expenses).................................. 1.85% 2.71%(d) 2.61% 2.59%(d) 2.67%(d) 2.64%(c)
</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).
See Notes to Financial Statements 25
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 YEAR ENDED AUGUST 12, 2005
ENDED SEPTEMBER 30, (COMMENCEMENT OF
CLASS I SHARES MARCH 31, ---------------- OPERATIONS) TO
2008 2007 2006 SEPTEMBER 30, 2005
----------------------------------------------------
NET ASSET VALUE, BEGINNING OF THE
PERIOD.................................. $10.59 $10.67 $10.69 $10.70
------ ------ ------ ------
Net Investment Income................... 0.21(a) 0.40(a) 0.39(a) 0.05
Net Realized and Unrealized Gain/Loss... (0.14) (0.09) 0.03 (0.01)
------ ------ ------ ------
Total from Investment Operations.......... 0.07 0.31 0.42 0.04
------ ------ ------ ------
Less:
Distributions from Net Investment
Income................................ 0.21 0.39 0.39 0.05
Distributions from Net Realized Gain.... -0- -0- 0.05 -0-
------ ------ ------ ------
Total Distributions....................... 0.21 0.39 0.44 0.05
------ ------ ------ ------
NET ASSET VALUE, END OF THE PERIOD........ $10.45 $10.59 $10.67 $10.69
====== ====== ====== ======
Total Return* (b)......................... 0.62%** 2.98% 4.08% 0.38%**
Net Assets at End of the Period
(In millions)........................... $ 0.5 $ 0.2 $ 0.9 $ 0.6
Ratio of Expenses to Average Net
Assets*................................. 0.76% 0.72% 0.72% 0.77%
Ratio of Net Investment Income to Average
Net Assets*............................. 3.98% 3.79% 3.73% 3.59%
Portfolio Turnover........................ 21%** 11% 21% 34%
SUPPLEMENTAL RATIO:
Ratio of Expenses to Average Net Assets
(Excluding Interest and Residual Trust
Expenses)*.............................. 0.75% 0.72% 0.72% 0.77%
* 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............................... 0.86% 0.82% 0.82% 0.87%
Ratio of Net Investment Income to
Average Net Assets................... 3.88% 3.69% 3.63% 3.49%
SUPPLEMENTAL RATIO:
Ratio of Expenses to Average Net Assets
(Excluding Interest and Residual Trust
Expenses)............................... 0.85% 0.82% 0.82% 0.87%
</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 on Fund shares.
26 See Notes to Financial Statements
VAN KAMPEN INTERMEDIATE TERM MUNICIPAL INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2008 (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 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, 2008, the Fund had $4,333,510 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.
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
27
VAN KAMPEN INTERMEDIATE TERM MUNICIPAL INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2008 (UNAUDITED) continued
provision for federal income taxes is required. The Fund adopted the provisions
of the Financial Accounting Standards Board ("FASB") Interpretation No. 48 ("FIN
48") Accounting for Uncertainty in Income Taxes on March 31, 2008. FIN 48 sets
forth a minimum threshold for financial statement recognition of the benefit of
a tax position taken or expected to be taken in a tax return. The implementation
of FIN 48 did not result in any unrecognized tax benefits in the accompanying
financial statements. If applicable, the Fund recognizes interest accrued
related to unrecognized tax benefits in "Interest Expense" and penalties in
"Other" expenses on the Statement of Operations. The Fund files tax returns with
the U.S. Internal Revenue Service, New York and various states. Generally, each
of the tax years in the four year period ended September 30, 2007, remains
subject to examination by taxing authorities.
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, 2007, the Fund had an accumulated capital loss
carryforward for tax purposes of $54,717, which will expire on September 30,
2015.
At March 31, 2008, the cost and related gross unrealized appreciation and
depreciation were as follows:
<Table>
Cost of investments for tax purposes........................ $119,644,190
============
Gross tax unrealized appreciation........................... $ 1,640,513
Gross tax unrealized depreciation........................... (1,340,808)
------------
Net tax unrealized appreciation on investments.............. $ 299,705
============
</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,
2007 was as follows.
<Table>
Distributions paid from:
Ordinary income........................................... $ 336
Tax-exempt income......................................... 3,627,442
Long-term capital gain.................................... -0-
----------
$3,627,778
==========
</Table>
As of September 30, 2007, the components of distributable earnings on a tax
basis were as follows:
<Table>
Undistributed ordinary income............................... $ 976
Undistributed tax-exempt income............................. 568,118
</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.
28
VAN KAMPEN INTERMEDIATE TERM MUNICIPAL INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2008 (UNAUDITED) continued
F. CREDITS EARNED ON CASH BALANCES During the six months ended March 31, 2008,
the Fund's custody fee was reduced by $683 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, 2008, Fund investments with a value of $2,595,962 are held by
the dealer trusts and serve as collateral for the $1,875,000 in floating rate
notes outstanding at that date. Contractual maturities of the floating rate
notes and interest rates in effect at March 31, 2008 are presented on the
Portfolio of Investments. The average floating rate notes outstanding and
average annual interest and fee rate related to residual interests during the
six months ended March 31, 2008 were $535,714 and 2.02%, respectively.
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, 2008, the Adviser voluntarily waived
$55,400 of its investment advisory fees. This represents .10% of its average
daily net assets for the period. This waiver is voluntary and can be
discontinued at any time.
For the six months ended March 31, 2008, the Fund recognized expenses of
approximately $4,700 representing legal services provided by Skadden, Arps,
Slate, Meagher &
29
VAN KAMPEN INTERMEDIATE TERM MUNICIPAL INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2008 (UNAUDITED) continued
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,
2008, the Fund recognized expenses of approximately $26,600 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 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, 2008, the Fund recognized expenses of approximately $16,000
representing transfer agency fees paid to VKIS and its affiliates. The 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 $132,421 are included in
"Other" assets on the Statements of Assets and Liabilities at March 31, 2008.
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, 2008, Van Kampen, as Distributor for the
Fund, received commissions on sales of the Fund's Class A Shares of
approximately $11,100 and contingent deferred sales charge (CDSC) on redeemed
shares of approximately $8,500. Sales charges do not represent expenses of the
Fund.
At March 31, 2008, Morgan Stanley Investment Management, Inc., an affiliate
of the Adviser, owned 951 shares of Class I Shares.
30
VAN KAMPEN INTERMEDIATE TERM MUNICIPAL INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2008 (UNAUDITED) continued
3. CAPITAL TRANSACTIONS
For the six months ended March 31, 2008 and the year ended September 30, 2007,
transactions were as follows:
<Table>
<Caption>
FOR THE FOR THE
SIX MONTHS ENDED YEAR ENDED
MARCH 31, 2008 SEPTEMBER 30, 2007
-------------------------- --------------------------
SHARES VALUE SHARES VALUE
Sales:
Class A........................... 2,352,598 $ 24,846,364 2,069,571 $ 21,969,724
Class B........................... 96,551 1,031,202 87,996 948,261
Class C........................... 326,208 3,454,041 258,040 2,730,716
Class I........................... 39,388 413,926 45,869 487,910
---------- ------------ ---------- ------------
Total Sales......................... 2,814,745 $ 29,745,533 2,461,476 $ 26,136,611
========== ============ ========== ============
Dividend Reinvestment:
Class A........................... 120,309 $ 1,265,736 207,569 $ 2,204,540
Class B........................... 11,350 121,053 24,258 261,159
Class C........................... 9,749 102,446 20,340 215,805
Class I........................... 544 5,711 3,120 33,145
---------- ------------ ---------- ------------
Total Dividend Reinvestment......... 141,952 $ 1,494,946 255,287 $ 2,714,649
========== ============ ========== ============
Repurchases:
Class A........................... (1,323,293) $(13,981,869) (2,027,021) $(21,501,383)
Class B........................... (185,100) (1,983,716) (429,923) (4,619,061)
Class C........................... (242,286) (2,561,576) (427,744) (4,534,247)
Class I........................... (10,866) (114,652) (111,522) (1,176,148)
---------- ------------ ---------- ------------
Total Repurchases................... (1,761,545) $(18,641,813) (2,996,210) $(31,830,839)
========== ============ ========== ============
</Table>
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 and allocated on a pro rata basis to
each class of shares. For the six months ended March 31, 2008, the Fund received
redemption fees of approximately $15,600 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 $40,576,101 and $23,187,599,
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
31
VAN KAMPEN INTERMEDIATE TERM MUNICIPAL INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2008 (UNAUDITED) continued
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. 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 contracts on U.S. Treasury
Securities 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. There were no futures
transactions entered into during the six months ended March 31, 2008.
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. DISTRIBUTIONS 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.
32
VAN KAMPEN INTERMEDIATE TERM MUNICIPAL INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2008 (UNAUDITED) continued
The amount of distribution expenses incurred by the Distributor and not yet
reimbursed ("unreimbursed receivable") was approximately $0 and $200 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 PRONOUNCEMENT
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. As of March 31, 2008, the Adviser does not believe the adoption of
SFAS 157 will impact the amounts reported in the financial statements, however,
additional disclosures will be required about the inputs used to develop the
measurements of fair value and the effect of certain measurements reported on
the Statement of Operations for a fiscal period.
33
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
KEVIN KLINGERT
Vice President
AMY R. DOBERMAN
Vice President
STEFANIE V. CHANG
Vice President and Secretary
JOHN L. SULLIVAN
Chief Compliance Officer
STUART N. SCHULDT
Chief Financial Officer and Treasurer
INVESTMENT ADVISER
VAN KAMPEN ASSET MANAGEMENT
522 Fifth Avenue
New York, New York 10036
DISTRIBUTOR
VAN KAMPEN FUNDS INC.
522 Fifth Avenue
New York, New York 10036
SHAREHOLDER SERVICING AGENT
VAN KAMPEN INVESTOR SERVICES INC.
P.O. Box 219286
Kansas City, Missouri 64121-9286
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.
34
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.
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 Intermediate Term 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.
522 Fifth Avenue
New York, New York 10036
www.vankampen.com
Copyright (C)2008 Van Kampen Funds Inc.
All rights reserved. Member FINRA/SIPC.
138, 338, 538, 638
INFSAN 5/08
(VAN KAMPEN INVESTMENTS LOGO) IU08-02876P-Y03/08
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, 2008.
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 3/31/08
<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 5.58% 5.21% 5.13% 5.13% 5.02% 5.02%
10-year 4.53 4.02 3.90 3.90 3.76 3.76
5-year 3.36 2.36 2.75 2.50 2.58 2.58
1-year -2.31 -6.95 -2.21 -5.95 -3.06 -3.99
6-month -1.76 -6.44 -1.65 -5.49 -2.14 -3.10
- ---------------------------------------------------------------------------------------------
30-Day SEC
Subsidized Yield 4.30% 4.53% 3.77%
30-Day SEC Yield 4.06% 4.28% 3.52%
</Table>
PAST PERFORMANCE 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. Periods less than one year are not
annualized. 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, 2008
MARKET CONDITIONS
The financial markets experienced significant volatility throughout the six-
month reporting period as many large banks and financial firms began writing
down mortgage-related losses, and liquidity and credit availability became even
more restricted. At the same time, the pace of economic growth began to slow,
with gross domestic product (GDP) growth measuring an anemic 0.6 percent for the
fourth quarter of 2007. As weaker economic data was released in the first
quarter of 2008, fears of recession grew and consumer confidence waned,
prompting investors to continue to seek the relative safety of high-quality
Treasury securities over other sectors of the fixed income market.
The municipal bond market faced additional headwinds as various monoline bond
insurers experienced credit quality downgrades and the auction rate and variable
rate markets deteriorated. As a result, the municipal market underperformed
Treasuries for the overall period, with municipal bond prices reaching
historically attractive levels relative to Treasury bonds in the first quarter
of 2008. While yields on short-dated municipal securities declined, yields on
intermediate- and long-dated securities rose, leading to the steepest yield
curve in the past four years as the spread between one-year and 30-year
maturities reached 343 basis points. After a record year for new municipal bond
issuance in 2007, the amount of new issues coming to market in the first quarter
of 2008 declined by roughly 25 percent due in large part to a substantial drop
in refunding issuance. Although issuance by the State of New York declined as
well, it remained one of the largest issuers of municipal bonds in the country.
The Federal Reserve (the "Fed") took various steps to ease the liquidity crisis
and boost the economy during the period. Not only did the Fed reduce the target
federal funds rate from 4.75 percent to 2.25 percent by the end of the period,
but in an unprecedented move, it granted primary brokerage firms access to its
discount window and loosened its collateral requirements, extending loans of
Treasury securities in exchange for lower quality, less liquid securities.
Finally, in the biggest headline event, the Fed facilitated JPMorgan Chase's
purchase of Bear Stearns, which was viewed by many as necessary to avoid serious
market repercussions had the firm failed.
2
PERFORMANCE ANALYSIS
All share classes of Van Kampen New York Tax Free Income Fund underperformed the
Lehman Brothers New York Municipal Bond Index and the Lehman Brothers Municipal
Bond Index for the six months ended March 31, 2008, assuming no deduction of
applicable sales charges.
TOTAL RETURNS FOR THE SIX-MONTH PERIOD ENDED MARCH 31, 2008
<Table>
<Caption>
- ---------------------------------------------------------------------------
LEHMAN BROTHERS
NEW YORK LEHMAN BROTHERS
MUNICIPAL BOND MUNICIPAL BOND
CLASS A CLASS B CLASS C INDEX INDEX
-1.76% -1.65% -2.14% 1.25% 0.75%
- ---------------------------------------------------------------------------
</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.
Various factors contributed to the Fund's performance during the period. The
primary detractors from performance were holdings in the health care, housing
and tobacco sectors. Although credit spreads in all sectors of the municipal
market widened during the period, these three sectors experienced greater
widening than most and the Fund's overweights there versus the Lehman Brothers
New York Municipal Bond Index and the Lehman Brothers Municipal Bond Index
hindered relative returns. Additionally, some of these positions were held in
the form of inverse floating-rate securities*, which are highly sensitive to
interest rate changes and therefore, amplified the negative impact of spread
widening. The inverse floaters did, however, serve to enhance the Fund's income
and diversification during the period. The Fund's overweight allocation to
industrial development revenue/pollution control revenue bonds also held back
performance, as did security selection within the sector.
Over the course of the period, we sought to enhance the Fund's yield by
maintaining an emphasis on higher-yielding, lower-rated bonds and bonds with
longer maturities. In particular, the Fund was overweighted BBB and non-rated
bonds, which held back returns as the higher-quality segment of the market
outperformed. The Fund's focus on bonds with maturities of 25 years or more also
hindered performance as rates on the long end of the curve moved higher during
the period.
Other investments, however, had a positive effect on relative performance.
Strong security selection as well as an underweight in insured bonds was
beneficial as the credit downgrades of various monoline bond insurers put
pressure on prices in the sector. An overweight to pre-refunded bonds was
additive to performance as well. These high-quality, shorter-maturity issues
3
benefited as the short end of the curve outpaced the long end during the
reporting 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.
* 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>
RATINGS ALLOCATION AS OF 3/31/08
AAA/Aaa 24.7%
AA/Aa 30.6
A/A 10.6
BBB/Baa 19.2
BB/Ba 4.9
B/B 1.0
Non-Rated 9.0
<Caption>
TOP 5 SECTORS AS OF 3/31/08
Hospital 18.5%
General Purpose 13.3
Higher Education 7.4
Master Tobacco Settlement 6.9
Water & Sewer 6.9
</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 as a
percentage of total investments. Top Five 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 email
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
P.O. Box 219286, Kansas City, MO 64121-9286 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 10/1/07 - 3/31/08.
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 costs of
investing in the Fund and other funds. To do so, compare this 5% hypothetical
example with the 5% hypothetical examples that appear in the shareholder reports
of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any 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*
-------------------------------------------------
10/1/07 3/31/08 10/1/07-3/31/08
Class A
Actual..................................... $1,000.00 $ 982.37 $4.66
Hypothetical............................... 1,000.00 1,020.30 4.75
(5% annual return before expenses)
Class B
Actual..................................... 1,000.00 983.48 6.05
Hypothetical............................... 1,000.00 1,018.90 6.16
(5% annual return before expenses)
Class C
Actual..................................... 1,000.00 978.61 8.36
Hypothetical............................... 1,000.00 1,016.55 8.52
(5% annual return before expenses)
</Table>
* Expenses are equal to the Fund's annualized expense ratio of 0.94%, 1.22%
and 1.69% for Class A, B and C Shares, respectively, multiplied by the
average account value over the period, multiplied by 183/366 (to reflect the
one-half year period). These expense ratios reflect an expense waiver. The
expense ratio for Class B Shares reflects actual 12b-1 fees of less than 1%.
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*
-------------------------------------------------
10/1/07 3/31/08 10/1/07-3/31/08
Class A
Actual..................................... $1,000.00 $ 982.37 $3.72
Hypothetical............................... 1,000.00 1,021.25 3.79
(5% annual return before expenses)
Class B
Actual..................................... 1,000.00 983.48 5.11
Hypothetical............................... 1,000.00 1,019.85 5.20
(5% annual return before expenses)
Class C
Actual..................................... 1,000.00 978.61 7.42
Hypothetical............................... 1,000.00 1,017.50 7.57
(5% annual return before expenses)
</Table>
* Expenses are equal to the Fund's annualized expense ratio of 0.75%, 1.03%
and 1.50% for Class A, B and C Shares, respectively, multiplied by the
average account value over the period, multiplied by 183/366 (to reflect the
one-half year period). These expense ratios reflect an expense waiver. The
expense ratio for Class B Shares reflects actual 12b-1 fees of less than 1%.
Assumes all dividends and distributions were reinvested.
9
VAN KAMPEN NEW YORK TAX FREE INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED)
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------
MUNICIPAL BONDS 102.5%
NEW YORK 101.6%
$ 2,000 Albany, NY Indl Dev Agy Civic Fac Rev Albany
Law Sch Univ Ser A............................. 5.000% 07/01/31 $ 1,784,100
600 Albany, NY Indl Dev Agy Civic Fac Rev Saint
Peters Hosp Proj Ser A......................... 5.250 11/15/32 556,242
400 Albany, NY Indl Dev Agy Civic Fac Rev Saint
Peters Hosp Proj Ser D......................... 5.750 11/15/27 405,280
1,290 Albany, NY Indl Dev Agy Indl Dev Rev Albany
College of Pharmacy Ser A...................... 5.625 12/01/34 1,217,747
395 Dutchess Cnty, NY Indl Dev Agy Civic Fac Rev
Elant Fishkill Inc Ser A....................... 5.250 01/01/37 328,190
1,000 East Rochester, NY Hsg Auth Rev Sr Living
Woodland Vlg Proj Rfdg......................... 5.500 08/01/33 869,260
1,250 Erie Cnty, NY Indl Dev Agy Sch Fac Rev City of
Buffalo Proj (FSA Insd)........................ 5.750 05/01/21 1,348,462
1,250 Erie Cnty, NY Indl Dev Agy Sch Fac Rev City of
Buffalo Proj (FSA Insd)........................ 5.750 05/01/22 1,340,862
1,000 Erie Cnty, NY Tob Asset Sec Corp Ser A......... 5.000 06/01/45 873,020
1,530 Hempstead Town, NY Indl Dev Adelphi Univ Civic
Fac............................................ 5.000 10/01/35 1,492,714
1,250 Hempstead Town, NY Indl Dev Adelphi Univ Civic
Fac............................................ 5.750 06/01/22 1,303,850
1,290 Islip, NY Res Recovery Agy Res 1985 Fac Ser E
(FSA Insd) (AMT)............................... 5.750 07/01/22 1,358,538
1,000 Livingston Cnty, NY Indl Dev Agy Civic Fac Rev
Nicholas H Noyes Mem Hosp...................... 6.000 07/01/30 952,200
1,500 Long Island Pwr Auth NY Elec Sys Rev Gen Ser
B.............................................. 5.000 12/01/35 1,471,245
1,000 Metropolitan Trans Auth NY Rev Rfdg Ser A
(AMBAC Insd)................................... 5.500 11/15/19 1,061,170
1,500 Metropolitan Trans Auth NY Rev Ser A........... 5.000 11/15/23 1,526,205
1,000 Metropolitan Trans Auth NY Svc Contract Rfdg
Ser A.......................................... 5.125 01/01/29 1,001,620
1,000 Monroe Cnty, NY Indl Dev Agy Nazareth College
Rochester Proj (MBIA Insd)..................... 5.250 10/01/21 1,043,120
1,320 Montgomery Cnty, NY Indl Dev Agy Lease Rev HFM
Boces Ser A (XLCA Insd)........................ 5.000 07/01/34 1,277,734
2,000 Nassau Cnty, NY Indl Dev Agy Continuing Care
Retirement Amsterdam at Harborside Ser A....... 6.700 01/01/43 1,970,820
1,000 Nassau Cnty, NY Interim Fin Auth Sales Tax Secd
Ser B (AMBAC Insd) (a) (g)..................... 6.000 11/15/24 1,000,000
1,500 New York City Hlth & Hosp Corp Rev Hlth Sys Ser
A (FSA Insd)................................... 5.500 02/15/18 1,595,670
1,000 New York City Hlth & Hosp Corp Rev Hlth Sys Ser
A (FSA Insd)................................... 5.500 02/15/19 1,063,780
</Table>
10 See Notes to Financial Statements
VAN KAMPEN NEW YORK TAX FREE INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------
NEW YORK (CONTINUED)
$ 2,000 New York City Hsg Dev Corp Multi-Family Hsg Rev
Ser B1 (AMT)................................... 5.150% 11/01/37 $ 1,867,820
1,000 New York City Hsg Dev Corp Multi-Family Hsg Rev
Ser E1 (AMT)................................... 5.350 11/01/37 945,690
1,000 New York City Hsg Dev Corp Multi-Family Hsg Rev
Ser J1......................................... 4.850 05/01/36 927,710
2,500 New York City Hsg Dev Corp Multi-Family Hsg Rev
Ser L (AMT).................................... 5.050 11/01/39 2,276,675
1,000 New York City Hsg Dev Corp Ser A (AMT)......... 5.500 11/01/34 975,410
445 New York City Indl Dev Agy Civic Fac Rev Cmnty
Res Developmentally Disabled................... 7.500 08/01/26 446,188
500 New York City Indl Dev Agy Civic Fac Rev
College of New Rochelle Proj................... 5.750 09/01/17 510,605
1,245 New York City Indl Dev Agy Civic Fac Rev Ctr
for Nursing Ser B.............................. 5.375 08/01/27 1,069,331
1,405 New York City Indl Dev Agy Fac Rev Royal
Charter-NY Presbyterian (FSA Insd)............. 5.375 12/15/16 1,544,840
500 New York City Indl Dev Agy Rev Liberty 7 World
Trade Ctr Ser A................................ 6.250 03/01/15 505,750
500 New York City Indl Dev Agy Rev Liberty 7 World
Trade Ctr Ser A................................ 6.500 03/01/35 503,355
1,125 New York City Indl Dev Agy Rev Liberty
Iac/Interactive Corp........................... 5.000 09/01/35 959,681
1,500 New York City Indl Dev Agy Spl Fac Rev JetBlue
Airways Corp Proj (AMT)........................ 5.125 05/15/30 1,141,095
2,000 New York City Indl Dev Agy Spl Fac Rev Term One
Group Assn Proj (AMT) (b)...................... 5.500 01/01/19 2,048,515
1,000 New York City Muni Fin Auth Wtr & Swr Sys Rev
2nd Gen Fiscal 2008 Ser CC 3 (MBIA Insd) (a)
(g)............................................ 4.250 06/15/22 1,000,000
1,400 New York City Muni Fin Auth Wtr & Swr Sys Rev
Ser B.......................................... 5.000 06/15/36 1,393,602
4,000 New York City Muni Fin Auth Wtr & Swr Sys Rev
Ser D (b)...................................... 5.000 06/15/37 3,981,500
500 New York City Muni Wtr Fin Ser B............... 6.000 06/15/33 539,395
2,500 New York City Ser A............................ 5.500 08/01/20 2,667,350
1,500 New York City Ser G............................ 5.000 08/01/24 1,521,255
2,390 New York City Ser G............................ 5.000 12/01/28 2,395,210
1,500 New York City Ser J............................ 5.000 03/01/24 1,519,185
1,000 New York City Transitional Cultural Res Rev
Amern Museum Nat History Rfdg Ser A (MBIA
Insd).......................................... 5.000 07/01/44 991,640
1,025 New York City Transitional Future Tax Secd Ser
B.............................................. 5.500 02/01/15 1,102,234
1,335 New York City Transitional Future Tax Secd Ser
C (AMBAC Insd)................................. 5.250 08/01/21 1,390,896
</Table>
See Notes to Financial Statements 11
VAN KAMPEN NEW YORK TAX FREE INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------
NEW YORK (CONTINUED)
$ 2,475 New York Cnty Tob Tr IV Settlement Pass Thru
Ser A.......................................... 5.000% 06/01/45 $ 2,159,041
1,000 New York Convention Ctr Dev Corp NY Rev Hotel
Unit Fee Secd (AMBAC Insd)..................... 5.000 11/15/44 984,410
750 New York Liberty Dev Corp Rev Natl Sports
Museum Proj Ser A (Acquired 08/07/06, Cost
$750,000) (d).................................. 6.125 02/15/19 720,915
2,000 New York St Dorm Auth Rev Catholic Hlth L I
Oblig Group.................................... 5.000 07/01/27 1,911,720
1,000 New York St Dorm Auth Rev City Univ Cons Third
Ser 1 (FGIC Insd).............................. 5.250 07/01/25 1,014,180
1,230 New York St Dorm Auth Rev City Univ Rfdg Ser D
(FSA Insd)..................................... 5.750 07/01/12 1,322,385
650 New York St Dorm Auth Rev City Univ Sys Cons
Ser A.......................................... 5.625 07/01/16 720,954
1,000 New York St Dorm Auth Rev City Univ Sys Cons
Ser B.......................................... 6.000 07/01/14 1,098,490
1,890 New York St Dorm Auth Rev Dept Ed (c).......... 5.250 07/01/21 1,979,454
1,000 New York St Dorm Auth Rev Insd Brooklyn Law Sch
Ser B (XLCA Insd).............................. 5.375 07/01/23 1,032,370
1,040 New York St Dorm Auth Rev Insd NY St Rehab Assn
Ser A (AMBAC Insd) (c)......................... 5.500 07/01/15 1,129,617
1,200 New York St Dorm Auth Rev Miriam Osborn Mem
Home Ser B (ACA Insd).......................... 6.375 07/01/29 1,202,052
2,000 New York St Dorm Auth Rev Mtg Montefiore Hosp
(FGIC Insd).................................... 5.000 08/01/33 1,968,800
1,000 New York St Dorm Auth Rev Non St Supported Debt
L I Jewish (b)................................. 5.000 11/01/26 949,185
1,000 New York St Dorm Auth Rev Non St Supported Debt
L I Jewish (b)................................. 5.000 11/01/34 949,185
2,000 New York St Dorm Auth Rev Non St Supported Debt
Mt Sinai NYU Hlth Ser C........................ 5.500 07/01/26 1,999,880
1,500 New York St Dorm Auth Rev Non St Supported Debt
NYU Hosp Ctr Ser A............................. 5.000 07/01/20 1,438,185
3,000 New York St Dorm Auth Rev Non St Supported Debt
NYU Hosp Ctr Ser A............................. 5.000 07/01/36 2,548,920
2,000 New York St Dorm Auth Rev Non St Supported Debt
Providence Rest (ACA Insd)..................... 5.250 07/01/25 1,758,800
750 New York St Dorm Auth Rev Nursing Home Menorah
Campus (FHA Gtd)............................... 5.950 02/01/17 759,630
1,000 New York St Dorm Auth Rev Secd Hosp North Gen
Hosp Rfdg...................................... 5.750 02/15/18 1,081,550
365 New York St Dorm Auth Rev St Supported Debt
2007 Mental Ser B (MBIA Insd).................. 5.250 08/15/31 365,646
500 New York St Energy Resh & Dev Auth Gas Fac Rev
Brooklyn Union Gas Ser B (AMT) (e)............. 9.894 07/01/26 515,545
</Table>
12 See Notes to Financial Statements
VAN KAMPEN NEW YORK TAX FREE INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (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 $ 1,057,850
2,280 New York St Loc Govt Assistance Corp Rfdg Ser
E.............................................. 6.000 04/01/14 2,520,084
620 New York St Mtg Agy Rev Ser 82 (AMT)........... 5.650 04/01/30 648,241
890 New York St Mtg Agy Rev Ser 101 (AMT).......... 5.400 04/01/32 862,098
500 New York St Urban Dev Corp Rev Correctional Fac
Rfdg Ser A..................................... 5.500 01/01/14 545,390
220 Oneida Cnty, NY Indl Dev Agy Civic Fac Saint
Elizabeth Med Ser A............................ 5.875 12/01/29 207,720
850 Port Auth NY & NJ Spl Oblig Rev Var Versatile
Structure (FSA Insd) (AMT) (a) (g)............. 4.000 10/01/35 850,000
1,000 Rensselaer Cnty, NY Indl Dev Agy Indl Dev Rev
Franciscan Heights LP Proj Ser A (AMT) (LOC:
JPMorgan Chase Bank)........................... 5.375 12/01/36 994,850
1,000 Rockland Cnty, NY Solid Waste Ser B (AMBAC
Insd) (AMT).................................... 5.000 12/15/23 979,690
1,000 Seneca Nation Indians Cap Impt Auth NY Spl
Oblig Ser A (f)................................ 5.000 12/01/23 882,100
1,475 Suffolk Cnty, NY Indl Dev Agy Civic Fac Rev
Eastrn Long Island Hosp Assn (f)............... 5.375 01/01/27 1,272,851
825 Suffolk Cnty, NY Indl Dev Agy Civic Fac Rev
Family Svc League Suffolk Cnty (LOC: Fleet
National Bank)................................. 5.000 11/01/34 818,128
250 Syracuse, NY Indl Dev Agy Rev First Mtg Jewish
Home Ser A..................................... 7.375 03/01/21 258,595
2,000 Tobacco Settlement Fin Corp NY Ser B........... 5.500 06/01/22 2,066,940
325 Triborough Brdg & Tunl Auth NY Rev Gen Purp Ser
A.............................................. 5.000 01/01/32 325,306
2,000 Triborough Brdg & Tunl Auth NY Rev Gen Purp Ser
A.............................................. 5.250 01/01/18 2,094,300
1,090 Tsasc, Inc NY Ser 1............................ 5.000 06/01/34 975,942
2,500 Tsasc, Inc NY Ser 1............................ 5.125 06/01/42 2,247,025
1,000 Ulster Cnty, NY Res Recovery Agy Solid Waste
Sys Rev Rfdg (AMBAC Insd)...................... 5.250 03/01/18 1,050,250
160 Upper Mohawk Vly Regl Wtr Fin Auth NY Wtr Sys
Rev (AMBAC Insd)............................... 5.750 04/01/20 168,054
310 Utica, NY Indl Dev Agy Civic Fac Rev Utica
College Proj Ser A............................. 5.750 08/01/28 291,757
1,000 Warren & Washington Cnty, NY Indl Dev Agy Civic
Fac Rev Glens Falls Hosp Proj Ser A (FSA
Insd).......................................... 5.000 12/01/35 991,050
500 Westchester Cnty, NY Indl Dev Agy Mtg Kendal on
Hudson Proj Ser A.............................. 6.375 01/01/24 505,330
</Table>
See Notes to Financial Statements 13
VAN KAMPEN NEW YORK TAX FREE INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (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 $ 1,782,420
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 1,109,820
------------
116,183,466
------------
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 1,066,750
------------
TOTAL LONG-TERM INVESTMENTS 102.5%
(Cost $120,244,342)........................................................ 117,250,216
SHORT-TERM INVESTMENT 1.0%
(Cost $1,200,000).......................................................... 1,200,000
------------
TOTAL INVESTMENTS 103.5%
(Cost $121,444,342)........................................................ 118,450,216
LIABILITY FOR FLOATING RATE NOTE OBLIGATIONS RELATED TO SECURITIES HELD (5.2%)
(Cost ($6,000,000))
(6,000) Notes with interest rates ranging from 2.26% to 2.36% at March 31,
2008 and contractual maturities of collateral ranging from 2019 to
2037 (See Note 1) (h)............................................. (6,000,000)
------------
TOTAL NET INVESTMENTS 98.3%
(Cost $115,444,342)........................................................ 112,450,216
OTHER ASSETS IN EXCESS OF LIABILITIES 1.7%.................................. 1,986,103
------------
NET ASSETS 100.0%........................................................... $114,436,319
============
</Table>
Percentages are calculated as a percentage of net assets.
(a) Variable Rate Coupon
(b) Underlying security related to Inverse Floaters entered into by the Fund.
See Note 1.
(c) The Fund owns 100% of the outstanding bond issuance.
(d) 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.
(e) Inverse Floating Rate. The interest rates shown reflect the rates in effect
at March 31, 2008.
14 See Notes to Financial Statements
VAN KAMPEN NEW YORK TAX FREE INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2008 (UNAUDITED) continued
(f) 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.
(g) Security includes a feature allowing the Fund an option on any interest rate
payment date to offer the security for sale at par. The sale is contingent
upon market conditions.
(h) Floating rate notes. The interest rates shown reflect the rates in effect at
March 31, 2008.
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, 2008 (Unaudited)
<Table>
ASSETS:
Total Investments (Cost $121,444,342)....................... $118,450,216
Cash........................................................ 440,614
Receivables:
Interest.................................................. 1,747,031
Fund Shares Sold.......................................... 258,481
Investments Sold.......................................... 150,000
Due from Distributor...................................... 12,280
Other....................................................... 104,084
------------
Total Assets............................................ 121,162,706
------------
LIABILITIES:
Payables:
Floating Rate Note Obligations............................ 6,000,000
Fund Shares Repurchased................................... 271,849
Income Distributions...................................... 149,676
Investment Advisory Fee................................... 21,401
Distributor and Affiliates................................ 11,926
Trustees' Deferred Compensation and Retirement Plans........ 176,368
Accrued Expenses............................................ 95,167
------------
Total Liabilities....................................... 6,726,387
------------
NET ASSETS.................................................. $114,436,319
============
NET ASSETS CONSIST OF:
Capital (Par value of $0.01 per share with an unlimited
number of shares authorized).............................. $117,276,696
Accumulated Undistributed Net Investment Income............. 255,172
Accumulated Net Realized Loss............................... (101,423)
Net Unrealized Depreciation................................. (2,994,126)
------------
NET ASSETS.................................................. $114,436,319
============
MAXIMUM OFFERING PRICE PER SHARE:
Class A Shares:
Net asset value and redemption price per share (Based on
net assets of $76,427,297 and 4,974,364 shares of
beneficial interest issued and outstanding)............. $ 15.36
Maximum sales charge (4.75%* of offering price)......... 0.77
------------
Maximum offering price to public........................ $ 16.13
============
Class B Shares:
Net asset value and offering price per share (Based on
net assets of $18,369,354 and 1,198,914 shares of
beneficial interest issued and outstanding)............. $ 15.32
============
Class C Shares:
Net asset value and offering price per share (Based on
net assets of $19,639,668 and 1,280,148 shares of
beneficial interest issued and outstanding)............. $ 15.34
============
</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, 2008 (Unaudited)
<Table>
INVESTMENT INCOME:
Interest.................................................... $ 3,087,036
-----------
EXPENSES:
Investment Advisory Fee..................................... 276,997
Distribution (12b-1) and Service Fees
Class A................................................... 98,870
Class B................................................... 5,379
Class C................................................... 95,711
Interest and Residual Trust Expenses........................ 113,920
Professional Fees........................................... 30,037
Accounting and Administrative Expenses...................... 29,266
Transfer Agent Fees......................................... 28,590
Reports to Shareholders..................................... 23,702
Custody..................................................... 19,483
Trustees' Fees and Related Expenses......................... 12,261
Registration Fees........................................... 11,029
Other....................................................... 9,864
-----------
Total Expenses.......................................... 755,109
Expense Reduction....................................... 147,339
Less Credits Earned on Cash Balances.................... 1,218
-----------
Net Expenses............................................ 606,552
-----------
NET INVESTMENT INCOME....................................... $ 2,480,484
===========
REALIZED AND UNREALIZED GAIN/LOSS:
Net Realized Loss........................................... $ (157,788)
-----------
Unrealized Appreciation/Depreciation:
Beginning of the Period................................... 1,489,643
End of the Period......................................... (2,994,126)
-----------
Net Unrealized Depreciation During the Period............... (4,483,769)
-----------
NET REALIZED AND UNREALIZED LOSS............................ $(4,641,557)
===========
NET DECREASE IN NET ASSETS FROM OPERATIONS.................. $(2,161,073)
===========
</Table>
See Notes to Financial Statements 17
VAN KAMPEN NEW YORK TAX FREE INCOME FUND
FINANCIAL STATEMENTS continued
Statements of Changes in Net Assets
For the Six Months Ended March 31, 2008 (Unaudited)
<Table>
<Caption>
FOR THE FOR THE
SIX MONTHS ENDED YEAR ENDED
MARCH 31, 2008 SEPTEMBER 30, 2007
--------------------------------------
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income................................ $ 2,480,484 $ 4,849,974
Net Realized Gain/Loss............................... (157,788) 246,559
Net Unrealized Depreciation During the Period........ (4,483,769) (3,665,365)
------------ ------------
Change in Net Assets from Operations................. (2,161,073) 1,431,168
------------ ------------
Distributions from Net Investment Income:
Class A Shares..................................... (1,760,493) (3,319,285)
Class B Shares..................................... (461,569) (945,559)
Class C Shares..................................... (354,265) (620,061)
------------ ------------
(2,576,327) (4,884,905)
------------ ------------
Distributions from Net Realized Gain:
Class A Shares..................................... (94,724) (112,999)
Class B Shares..................................... (22,820) (41,402)
Class C Shares..................................... (24,133) (26,599)
------------ ------------
(141,677) (181,000)
------------ ------------
Total Distributions.................................. (2,718,004) (5,065,905)
------------ ------------
NET CHANGE IN NET ASSETS FROM INVESTMENT
ACTIVITIES......................................... (4,879,077) (3,634,737)
------------ ------------
FROM CAPITAL TRANSACTIONS:
Proceeds from Shares Sold............................ 12,545,571 31,644,946
Net Asset Value of Shares Issued Through Dividend
Reinvestment....................................... 1,950,048 3,695,428
Cost of Shares Repurchased........................... (16,865,016) (29,862,385)
------------ ------------
NET CHANGE IN NET ASSETS FROM CAPITAL TRANSACTIONS... (2,369,397) 5,477,989
------------ ------------
TOTAL INCREASE/DECREASE IN NET ASSETS................ (7,248,474) 1,843,252
NET ASSETS:
Beginning of the Period.............................. 121,684,793 119,841,541
------------ ------------
End of the Period (Including accumulated
undistributed net investment income of $255,172 and
$351,015, respectively)............................ $114,436,319 $121,684,793
============ ============
</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, ----------------------------------------------
2008 2007 2006 2005 2004 2003
------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF THE
PERIOD........................... $16.01 $16.47 $16.67 $16.60 $16.40 $16.49
------ ------ ------ ------ ------ ------
Net Investment Income............ 0.34(a) 0.67(a) 0.66(a) 0.64 0.65 0.69
Net Realized and Unrealized
Gain/Loss...................... (0.62) (0.43) 0.11 0.06 0.17 (0.10)
------ ------ ------ ------ ------ ------
Total from Investment Operations... (0.28) 0.24 0.77 0.70 0.82 0.59
------ ------ ------ ------ ------ ------
Less:
Distributions from Net Investment
Income......................... 0.35 0.68 0.65 0.63 0.62 0.68
Distributions from Net Realized
Gain........................... 0.02 0.02 0.32 -0- -0- -0-
------ ------ ------ ------ ------ ------
Total Distributions................ 0.37 0.70 0.97 0.63 0.62 0.68
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF THE
PERIOD........................... $15.36 $16.01 $16.47 $16.67 $16.60 $16.40
====== ====== ====== ====== ====== ======
Total Return* (b).................. -1.76%** 1.34% 4.96% 4.29% 5.13% 3.69%
Net Assets at End of the Period (In
millions)........................ $ 76.4 $ 82.3 $ 73.8 $ 67.8 $ 62.2 $ 63.6
Ratio of Expenses to Average Net
Assets*.......................... 0.94% 0.81% 0.73% 0.76% 0.76% 0.55%
Ratio of Net Investment Income to
Average Net Assets*.............. 4.30% 4.12% 4.05% 3.87% 3.94% 4.19%
Portfolio Turnover................. 12%** 13% 30% 41% 15% 27%
SUPPLEMENTAL RATIO:
Ratio of Expenses to Average Net
Assets (Excluding Interest and
Residual Trust Expenses)*........ 0.75% 0.72% 0.73% 0.76% 0.76% 0.55%
* 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........................ 1.19% 1.06% 0.98% 1.01% 1.09% 1.06%
Ratio of Net Investment Income
to Average Net Assets......... 4.05% 3.87% 3.80% 3.62% 3.60% 3.68%
SUPPLEMENTAL RATIO:
Ratio of Expenses to Average Net
Assets (Excluding Interest and
Residual Trust Expenses)......... 1.00% 0.97% 0.98% 1.01% 1.09% 1.06%
</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 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 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, ----------------------------------------------
2008 2007 2006 2005 2004 2003
------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF THE
PERIOD........................... $15.97 $16.43 $16.63 $16.58 $16.38 $16.47
------ ------ ------ ------ ------ ------
Net Investment Income............ 0.35(a) 0.60(a) 0.54(a) 0.52 0.52 0.56
Net Realized and Unrealized
Gain/Loss...................... (0.61) (0.43) 0.11 0.04 0.18 (0.09)
------ ------ ------ ------ ------ ------
Total from Investment Operations... (0.26) 0.17 0.65 0.56 0.70 0.47
------ ------ ------ ------ ------ ------
Less:
Distributions from Net Investment
Income......................... 0.37 0.61 0.53 0.51 0.50 0.56
Distributions from Net Realized
Gain........................... 0.02 0.02 0.32 -0- -0- -0-
------ ------ ------ ------ ------ ------
Total Distributions................ 0.39 0.63 0.85 0.51 0.50 0.56
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF THE
PERIOD........................... $15.32 $15.97 $16.43 $16.63 $16.58 $16.38
====== ====== ====== ====== ====== ======
Total Return* (b).................. -1.65%(c)** 0.95%(c) 4.18% 3.40% 4.36% 2.93%
Net Assets at End of the Period (In
millions)........................ $ 18.4 $ 20.5 $ 28.6 $ 33.9 $ 38.6 $ 40.5
Ratio of Expenses to Average Net
Assets*.......................... 1.22%(c) 1.23%(c) 1.48% 1.51% 1.51% 1.29%
Ratio of Net Investment Income to
Average Net Assets*.............. 4.49%(c) 3.69%(c) 3.30% 3.12% 3.19% 3.45%
Portfolio Turnover................. 12%** 13% 30% 41% 15% 27%
SUPPLEMENTAL RATIO:
Ratio of Expenses to Average Net
Assets (Excluding Interest and
Residual Trust Expenses)*........ 1.03%(c) 1.14%(c) 1.48% 1.51% 1.51% 1.29%
* 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........................ 1.47%(c) 1.48%(c) 1.73% 1.76% 1.84% 1.80%
Ratio of Net Investment Income
to Average Net Assets......... 4.24%(c) 3.44%(c) 3.05% 2.87% 2.85% 2.94%
SUPPLEMENTAL RATIO:
Ratio of Expenses to Average Net
Assets (Excluding Interest and
Residual Trust Expenses)......... 1.28%(c) 1.39%(c) 1.73% 1.76% 1.84% 1.80%
</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) 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).
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, ----------------------------------------------
2008 2007 2006 2005 2004 2003
------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF THE
PERIOD......................... $15.99 $16.45 $16.65 $16.59 $16.39 $16.48
------ ------ ------ ------ ------ ------
Net Investment Income.......... 0.28(a) 0.55(a) 0.54(a) 0.52 0.52 0.56
Net Realized and Unrealized
Gain/Loss.................... (0.62) (0.43) 0.11 0.05 0.18 (0.09)
------ ------ ------ ------ ------ ------
Total from Investment
Operations..................... (0.34) 0.12 0.65 0.57 0.70 0.47
------ ------ ------ ------ ------ ------
Less:
Distributions from Net
Investment Income............ 0.29 0.56 0.53 0.51 0.50 0.56
Distributions from Net Realized
Gain......................... 0.02 0.02 0.32 -0- -0- -0-
------ ------ ------ ------ ------ ------
Total Distributions.............. 0.31 0.58 0.85 0.51 0.50 0.56
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF THE
PERIOD......................... $15.34 $15.99 $16.45 $16.65 $16.59 $16.39
====== ====== ====== ====== ====== ======
Total Return* (b)................ -2.14%** 0.66%(d) 4.14%(d) 3.46%(d) 4.36% 2.92%(c)
Net Assets at End of the Period
(In millions).................. $ 19.6 $ 18.9 $ 17.4 $ 18.1 $ 17.5 $ 17.7
Ratio of Expenses to Average Net
Assets*........................ 1.69% 1.55%(d) 1.46%(d) 1.47%(d) 1.51% 1.30%
Ratio of Net Investment Income to
Average Net Assets*............ 3.55% 3.37%(d) 3.32%(d) 3.14%(d) 3.19% 3.45%(c)
Portfolio Turnover............... 12%** 13% 30% 41% 15% 27%
SUPPLEMENTAL RATIO:
Ratio of Expenses to Average Net
Assets (Excluding Interest and
Residual Trust Expenses)*...... 1.50% 1.46%(d) 1.46%(d) 1.47%(d) 1.51% 1.30%
* 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.................. 1.94% 1.80%(d) 1.71%(d) 1.72%(d) 1.84% 1.81%
Ratio of Net Investment Income
to Average Net Assets....... 3.30% 3.12%(d) 3.10%(d) 2.89%(d) 2.85% 2.94%(c)
SUPPLEMENTAL RATIO:
Ratio of Expenses to Average Net
Assets (Excluding Interest and
Residual Trust Expenses)....... 1.75% 1.71%(d) 1.71%(d) 1.72%(d) 1.84% 1.81%
</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).
See Notes to Financial Statements 21
VAN KAMPEN NEW YORK TAX FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2008 (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 primarily 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, 2008, 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, 2008, 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, 2008 (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 adopted the provisions of the Financial Accounting Standards Board ("FASB")
Interpretation No. 48 ("FIN 48") Accounting for Uncertainty in Income Taxes on
March 31, 2008. FIN 48 sets forth a minimum threshold for financial statement
recognition of the benefit of a tax position taken or expected to be taken in a
tax return. The implementation of FIN 48 did not result in any unrecognized tax
benefits in the accompanying financial statements. If applicable, the Fund
recognizes interest accrued related to unrecognized tax benefits in "Interest
Expense" and penalties in "Other" expenses on the Statement of Operations. The
Fund files tax returns with the U.S. Internal Revenue Service, New York and
various states. Generally, each of the tax years in the four year period ended
September 30, 2007, remains subject to examination by taxing authorities.
At March 31, 2008, the cost and related gross unrealized appreciation and
depreciation were as follows:
<Table>
Cost of investments for tax purposes........................ $115,223,628
============
Gross tax unrealized appreciation........................... $ 1,812,433
Gross tax unrealized depreciation........................... (4,585,845)
------------
Net tax unrealized depreciation on investments.............. $ (2,773,412)
============
</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,
2007 was as follows:
<Table>
Distributions paid from:
Ordinary income........................................... $ 7,504
Tax-exempt income......................................... 4,864,884
Long-term capital gain.................................... 181,000
----------
$5,053,388
==========
</Table>
As of September 30, 2007, the components of distributable earnings on a tax
basis were as follows:
<Table>
Undistributed ordinary income............................... $ 598
Undistributed tax-exempt income............................. 615,974
Undistributed long-term capital gain........................ 141,267
</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.
23
VAN KAMPEN NEW YORK TAX FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2008 (UNAUDITED) continued
F. CREDITS EARNED ON CASH BALANCES During the six months ended March 31, 2008,
the Fund's custody fee was reduced by $1,218 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 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 (g) 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, 2008, Fund investments with a value of $7,928,385 are held by
the dealer trusts and serve as collateral for the $6,000,000 in floating rate
notes outstanding at that date. Contractual maturities of the floating rate
notes and interest rates in effect at March 31, 2008 are presented on the
Portfolio of Investments. The average floating rate notes outstanding and
average annual interest and fee rate related to residual interests during the
six months ended March 31, 2008 were $3,857,143 and 5.91%, respectively.
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, 2008, the Adviser voluntarily waived
$147,300 of its investment advisory fees. This represents .25% of its average
daily net assets for the period. This waiver is voluntary and can be
discontinued at any time.
For the six months ended March 31, 2008, the Fund recognized expenses of
approximately $9,200 representing legal services provided by Skadden, Arps,
Slate, Meagher &
24
VAN KAMPEN NEW YORK TAX FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2008 (UNAUDITED) continued
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,
2008, the Fund recognized expenses of approximately $17,700 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, 2008, the Fund recognized expenses of approximately $13,800
representing transfer agency fees paid to VKIS and its affiliates. The 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 $82,508 are included in
"Other" assets on the Statement of Assets and Liabilities at March 31, 2008.
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, 2008, Van Kampen, as Distributor for the
Fund, received commissions on sales of the Fund's Class A Shares of
approximately $14,100 and contingent deferred sales charge (CDSC) on redeemed
shares of approximately $18,800. Sales charges do not represent expenses of the
Fund.
25
VAN KAMPEN NEW YORK TAX FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2008 (UNAUDITED) continued
3. CAPITAL TRANSACTIONS
For the six months ended March 31, 2008 and the year ended September 30, 2007,
transactions were as follows:
<Table>
<Caption>
FOR THE FOR THE
SIX MONTHS ENDED YEAR ENDED
MARCH 31, 2008 SEPTEMBER 30, 2007
-------------------------- --------------------------
SHARES VALUE SHARES VALUE
Sales:
Class A............................ 541,288 $ 8,588,590 1,535,307 $ 25,062,602
Class B............................ 42,448 672,272 96,750 1,586,178
Class C............................ 207,682 3,284,709 306,654 4,996,166
---------- ------------ ---------- ------------
Total Sales.......................... 791,418 $ 12,545,571 1,938,711 $ 31,644,946
========== ============ ========== ============
Dividend Reinvestment:
Class A............................ 85,208 $ 1,335,298 156,432 $ 2,553,492
Class B............................ 23,080 361,185 43,499 708,551
Class C............................ 16,210 253,565 26,581 433,385
---------- ------------ ---------- ------------
Total Dividend Reinvestment.......... 124,498 $ 1,950,048 226,512 $ 3,695,428
========== ============ ========== ============
Repurchases:
Class A............................ (788,957) $(12,482,454) (1,037,755) $(16,785,256)
Class B............................ (150,645) (2,381,074) (597,695) (9,710,635)
Class C............................ (126,420) (2,001,488) (207,771) (3,366,494)
---------- ------------ ---------- ------------
Total Repurchases.................... (1,066,022) $(16,865,016) (1,843,221) $(29,862,385)
========== ============ ========== ============
</Table>
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 and allocated on a pro rata basis to
each class of shares. For the six months ended March 31, 2008, 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 $14,160,188 and $14,613,124,
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, 2008 (UNAUDITED) continued
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 different types of derivative financial instruments
used by the Fund.
A. FUTURES CONTRACTS The Fund may invest 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 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.
There were no futures transactions entered into during the six months ended
March 31, 2008.
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 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
27
VAN KAMPEN NEW YORK TAX FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2008 (UNAUDITED) continued
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 $10,800 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 PRONOUNCEMENT
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. As of March 31, 2008, the Adviser does not believe the adoption of
SFAS 157 will impact the amounts reported in the financial statements, however,
additional disclosures will be required about the inputs used to develop the
measurements of fair value and the effect of certain measurements reported on
the Statement of Operations for a fiscal period.
28
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
KEVIN KLINGERT
Vice President
AMY R. DOBERMAN
Vice President
STEFANIE V. CHANG
Vice President and Secretary
JOHN L. SULLIVAN
Chief Compliance Officer
STUART N. SCHULDT
Chief Financial Officer and Treasurer
INVESTMENT ADVISER
VAN KAMPEN ASSET MANAGEMENT
522 Fifth Avenue
New York, New York 10036
DISTRIBUTOR
VAN KAMPEN FUNDS INC.
522 Fifth Avenue
New York, New York 10036
SHAREHOLDER SERVICING AGENT
VAN KAMPEN INVESTOR SERVICES INC.
P.O. Box 219286
Kansas City, Missouri 64121-9286
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.
29
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.
522 Fifth Avenue
New York, New York 10036
www.vankampen.com
Copyright (C)2008 Van Kampen Funds Inc.
All rights reserved. Member FINRA/SIPC.
235, 325, 425
NYTFSAN 5/08
(VAN KAMPEN INVESTMENTS LOGO) IU08-02845P-Y03/08
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 20, 2008
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 20, 2008
By: /s/ Stuart N. Schuldt
---------------------------------
Name: Stuart N. Schuldt
Title: Principal Financial Officer
Date: May 20, 2008