N-CSRS 1 c95567nvcsrs.txt SEMIANNUAL REPORT 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 811-6736 Van Kampen Advantage Municipal Income Trust -------------------------------------------------------------------------------- (Exact name of registrant as specified in charter) 1221 Avenue of the Americas, New York, New York 10020 -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) Ronald Robison 1221 Avenue of the Americas, New York, New York 10020 -------------------------------------------------------------------------------- (Name and address of agent for service) Registrant's telephone number, including area code: 212-762-4000 Date of fiscal year end: 10/31 Date of reporting period: 4/30/05 Item 1. Report to Shareholders The Trust's semi-annual report transmitted to shareholders pursuant to Rule 30e-1 under the Investment Company Act of 1940 is as follows: Welcome, Shareholder In this report, you'll learn about how your investment in Van Kampen Advantage Municipal Income Trust performed during the semiannual period. The portfolio management team will provide an overview of the market conditions and discuss some of the factors that affected investment performance during the reporting period. In addition, this report includes the trust's financial statements and a list of trust investments as of April 30, 2005. MARKET FORECASTS PROVIDED IN THIS REPORT MAY NOT NECESSARILY COME TO PASS. THERE IS NO ASSURANCE THAT THE TRUST WILL ACHIEVE ITS INVESTMENT OBJECTIVE. TRUSTS ARE SUBJECT TO MARKET RISK, WHICH IS THE POSSIBILITY THAT THE MARKET VALUES OF SECURITIES OWNED BY THE TRUST WILL DECLINE AND THAT THE VALUE OF TRUST SHARES MAY THEREFORE BE LESS THAN WHAT YOU PAID FOR THEM. ACCORDINGLY, YOU CAN LOSE MONEY INVESTING IN THIS TRUST. INCOME MAY SUBJECT CERTAIN INDIVIDUALS TO THE FEDERAL ALTERNATIVE MINIMUM TAX (AMT).
--------------------------------------------------------------------------------------- NOT FDIC INSURED OFFER NO BANK GUARANTEE MAY LOSE VALUE --------------------------------------------------------------------------------------- NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY NOT A DEPOSIT ---------------------------------------------------------------------------------------
Performance Summary as of 4/30/05
ADVANTAGE MUNICIPAL INCOME TRUST SYMBOL: VKA ------------------------------------------------------------ AVERAGE ANNUAL BASED ON BASED ON TOTAL RETURNS NAV MARKET PRICE Since Inception (9/25/92) 7.69% 6.45% 10-year 7.88 6.95 5-year 9.56 10.22 1-year 10.54 7.22 6-month 3.09 -1.03 ------------------------------------------------------------
PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE RESULTS, AND CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE FIGURES SHOWN. FOR THE MOST RECENT MONTH-END PERFORMANCE FIGURES, PLEASE VISIT VANKAMPEN.COM OR SPEAK WITH YOUR FINANCIAL ADVISOR. INVESTMENT RETURNS, NET ASSET VALUE (NAV) AND COMMON SHARE MARKET PRICE WILL FLUCTUATE AND TRUST SHARES, WHEN SOLD, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. NAV per share is determined by dividing the value of the trust's portfolio securities, cash and other assets, less all liabilities, by the total number of common shares outstanding. The common share market price is the price the market is willing to pay for shares of the trust at a given time. Common share market price is influenced by a range of factors, including supply and demand and market conditions. Total return assumes an investment at the beginning of the period, reinvestment of all distributions for the period in accordance with the trust's dividend reinvestment plan, and sale of all shares at the end of the period. The Lehman Brothers Municipal Bond Index is a broad-based statistical composite of municipal bonds. The index does not include any expenses, fees or sales charges, which would lower performance. The index is unmanaged and should not be considered an investment. It is not possible to invest directly in an index. 1 Trust Report FOR THE 6-MONTH PERIOD ENDED APRIL 30, 2005 Van Kampen Advantage Municipal Income Trust is managed by the Adviser's Municipal Fixed Income team.(1) Current members include Dennis Pietrzak and John Reynoldson, Executive Directors of the Adviser; and Robert Wimmel, Vice President of the Adviser. MARKET CONDITIONS The six-month period ended April 30, 2005, was characterized by continued short-term interest rate increases. As crude oil prices reached record highs, the prospect of rising inflation also cast a shadow. The Federal Open Market Committee (the "Fed") raised the federal funds target rate 100 basis points during the period through a series of four "measured" 0.25 percent tightenings to 2.75 percent by the end of April. Although rates in the short and intermediate areas of the yield curve shifted upward as the Fed tightened, long- term interest rates fell as buyers did not seem deterred by the prospect of rising inflation. As a result, the yield curve (the difference between short and longer-term yields) flattened and the long end of the municipal market handily outperformed the shorter end. The municipal market in total posted positive returns during the period, though it was not uniformly strong. In contrast to the strong showing by longer-term bonds, shorter-term municipals were hampered by the Fed's tightening and turned in a flat to slightly negative showing. Within the investment-grade segment of the market, yield differentials between BBB-rated and AAA-rated municipal securities were slightly wider, though BBB-rated securities still outperformed high grades due to their higher coupons, while securities rated below investment grade strongly outperformed as investors sought out their higher yields. The Fed's interest rate hikes did not appear to dampen investors' appetites for municipal bonds, as net inflows into municipal bond funds topped $290 million during the period. The supply of new issues was modest during the closing months of 2004 (the first two months of the period) before soaring in the opening months of 2005 as long-term issuers rushed to bring securities to market in anticipation of additional interest rate increases in the near term. (1)Team members may change without notice at any time. 2 PERFORMANCE ANALYSIS The trust's return can be calculated based upon either the market price or the net asset value (NAV) of its shares. NAV per share is determined by dividing the value of the trust's portfolio securities, cash and other assets, less all liabilities, by the total number of common shares outstanding, while market price reflects the supply and demand for the shares. As a result, the two returns can differ, as they did during the reporting period. On an NAV basis, the trust outperformed its benchmark index, the Lehman Brothers Municipal Bond Index. On a market price basis, the trust underperformed its benchmark. (See table below.) TOTAL RETURNS FOR THE SIX-MONTH PERIOD ENDED APRIL 30, 2005
---------------------------------------------------------- BASED ON BASED ON LEHMAN BROTHERS NAV MARKET PRICE MUNICIPAL BOND INDEX 3.09% -1.03% 1.93% ----------------------------------------------------------
PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE RESULTS, AND CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE FIGURES SHOWN. INVESTMENT RETURN, NET ASSET VALUE AND COMMON SHARE MARKET PRICE WILL FLUCTUATE AND TRUST SHARES, WHEN SOLD, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. SEE PERFORMANCE SUMMARY FOR ADDITIONAL PERFORMANCE INFORMATION AND INDEX DEFINITION. The trust uses leverage to enhance its dividend to common shareholders. The trust borrows money at short-term rates through the issuance of preferred shares. The proceeds are reinvested in longer-term securities, taking advantage of the difference between short- and longer-term rates. The Fed's policy of raising interest rates throughout the period made the trust's borrowing activity more expensive. These expenses, however, were more than offset by the positive performance of the bonds held by the trust. One of our key strategies in managing the trust during the period was to position it for rising interest rates. This approach was largely the result of our analysis of interest rates, which remained relatively low by historical standards even after rising from their multi-decade lows earlier. First, we kept the trust's duration (a measure of interest-rate sensitivity) below that of its benchmark. Second, to limit the trust's exposure to areas of the market that would be most likely susceptible to rising rates, we trimmed the trust's shorter-maturity bonds. We reinvested the proceeds from those sales into bonds with premium coupons and maturities between 25 and 30 years. In addition to offering relatively attractive income streams, these securities positioned the trust to benefit from any future flattening of the yield curve. Throughout the reporting period, we remained focused on keeping the portfolio's credit quality high. At the close of the period, 86 percent of the bonds in the portfolio were rated AA or higher. However, as high-yield spreads have continued to tighten, lower quality bonds tended to perform better. Additionally, due to our concerns about the long-term merits of tobacco bonds, 3 we did not include them in the portfolio. This decision prevented the trust from participating in the short-term rebound experienced by tobacco and other lower-rated bonds during the period. Much of our relative-value trading activity was focused on selling issues that had been pre-refunded. We kept the trust well diversified across the major sectors of the municipal bond market. The top three sector exposures at the end of the period were general purpose, health care and public building. There is no guarantee the security sectors mentioned will continue to perform well or be held by the trust in the future. 4
RATINGS ALLOCATION AS OF 4/30/05 AAA/Aaa 73.0% AA/Aa 12.8 A/A 8.0 BBB/Baa 5.7 BB/Ba 0.2 B/B 0.3 TOP 5 SECTORS AS OF 4/30/05 General Purpose 11.9% Health Care 11.7 Public Building 10.3 Public Education 10.3 Higher Education 10.2 SUMMARY OF INVESTMENTS BY STATE CLASSIFICATION AS OF 4/30/05 New York 11.1% Illinois 10.5 California 9.9 New Jersey 7.8 Texas 7.3 Washington 5.4 Pennsylvania 4.1 Georgia 4.0 North Carolina 3.3 Oklahoma 2.5 Puerto Rico 2.5 Oregon 2.5 Ohio 2.3 Arizona 2.2 Nevada 2.2 South Carolina 2.1 Indiana 2.1 Louisiana 1.9 Alabama 1.7 Massachusetts 1.6 Colorado 1.5 Connecticut 1.4 District of Columbia 1.3 Florida 0.9 Maryland 0.9 Minnesota 0.8 Mississippi 0.7 New Mexico 0.7 Wisconsin 0.6 Tennessee 0.6 Missouri 0.6 Nebraska 0.5 South Dakota 0.5 Utah 0.5 New Hampshire 0.4 Michigan 0.3 Wyoming 0.2 North Dakota 0.2 Alaska 0.2 West Virginia 0.2 ----- Total Investments 100.0%
Subject to change daily. Provided for informational purposes only and should not be deemed as a recommendation to buy or sell the securities mentioned or securities in the sectors shown above. Ratings and summary of investments by state classification are as a percentage of total investment. Sectors are as a percentage of long-term investment. 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 trust provides a complete schedule of portfolio holdings in its semiannual and annual reports within 60 days of the end of the trust's second and fourth fiscal quarters by filing the schedule electronically with the Securities and Exchange Commission (SEC). The semiannual reports are filed on Form N-CSRS and the annual reports are filed on Form N-CSR. Van Kampen also delivers the semiannual and annual reports to trust shareholders, and makes these reports available on its public Web site, www.vankampen.com. In addition to the semiannual and annual reports that Van Kampen delivers to shareholders and makes available through the Van Kampen public Web site, each trust files a complete schedule of portfolio holdings with the SEC for the trust's first and third fiscal quarters on Form N-Q. Van Kampen does not deliver the reports for the first and third fiscal quarters to shareholders, nor are the reports posted to the Van Kampen public Web site. You may, however, obtain the Form N-Q filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's Web site, http://www.sec.gov. You may also review and copy them at the SEC's Public Reference Room in Washington, DC. Information on the operation of the SEC's Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's e-mail address (publicinfo@sec.gov) or by writing the Public Reference section of the SEC, Washington, DC 20549-0102. You may obtain copies of a trust's fiscal quarter filings by contacting Van Kampen Client Relations at 1-800-847-2424. PROXY VOTING POLICIES AND PROCEDURES AND PROXY VOTING RECORD The trust's policies and procedures with respect to the voting of proxies relating to the trust's portfolio securities and information on how the trust voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30 is available without charge, upon request, by visiting our Web site at www.vankampen.com. This information is also available on the Securities and Exchange Commission's Web site at http://www.sec.gov. 6 VAN KAMPEN ADVANTAGE MUNICIPAL INCOME TRUST PORTFOLIO OF INVESTMENTS -- APRIL 30, 2005 (UNAUDITED)
PAR AMOUNT (000) DESCRIPTION COUPON MATURITY VALUE --------------------------------------------------------------------------------------------- MUNICIPAL BONDS 158.4% ALABAMA 2.6% $1,000 Alabama Bldg Renovation Fin Auth Rev Rfdg (AMBAC Insd)................................ 5.625% 09/01/24 $ 1,104,570 1,550 Birmingham, AL Arpt Auth Arpt Rev Rfdg (AMT) (AMBAC Insd) (a)............................ 5.500 07/01/14 1,651,881 2,250 Jefferson Cnty, AL Ltd Oblig Sch Wt Ser A....................................... 5.250 01/01/23 2,404,912 1,000 Jefferson Cnty, AL Ltd Oblig Sch Wt Ser A....................................... 5.000 01/01/24 1,043,540 2,000 Montgomery, AL Wt (AMBAC Insd).............. 5.250 05/01/20 2,183,880 ------------- 8,388,783 ------------- ALASKA 0.3% 1,000 Alaska St Hsg Fin Corp Gen Hsg Ser A (FGIC Insd)....................................... 5.250 12/01/41 1,057,050 ------------- ARIZONA 3.5% 1,425 Arizona Cap Fac Fin Corp Student Hsg Rev AZ St Univ Proj................................ 6.250 09/01/32 1,522,114 2,500 Arizona Sch Fac Brd Rev St Sch Impt......... 5.500 07/01/17 2,786,275 2,900 Arizona Tourism & Sports Auth Multi Purp Stad Fac Ser A (MBIA Insd).................. 5.375 07/01/22 3,213,838 2,875 Phoenix, AZ Civic Impt Corp Arpt Rev Jr Lien (AMT) (FGIC Insd)........................... 5.375 07/01/29 2,927,756 720 Pima Cnty, AZ Indl Dev Auth Indl Rev Lease Oblig Irvington Proj Tucson Ser A Rfdg (FSA Insd)....................................... 7.250 07/15/10 753,696 ------------- 11,203,679 ------------- CALIFORNIA 15.6% 2,630 Anaheim, CA Pub Fin Auth Lease Rev Cap Apprec Sub Pub Impt Proj C (FSA Insd)....... * 09/01/20 1,297,826 2,400 Bay Area Govt Assn CA Rev Tax Alloc CA Redev Pool Ser A (XLCA Insd)...................... 5.250 09/01/29 2,561,328 2,500 California Ed Fac Auth Rev Pomona College Ser A....................................... 5.000 07/01/45 2,616,575 4,500 California St (AMBAC Insd).................. 5.125 10/01/27 4,712,130 5,770 California St............................... 5.000 02/01/33 5,961,737 5,500 California St Dept Wtr Res Pwr Ser A (AMBAC Insd)....................................... 5.500 05/01/16 6,193,935 2,000 California St Dept Wtr Res Pwr Ser A........ 5.750 05/01/17 2,244,740 5,000 California Statewide Cmntys Dev Auth Rev Daughters of Charity Hlth Ser A............. 5.250 07/01/30 5,211,800 5,000 Foothill/Eastern Corridor Agy CA Toll Rd Rev Cap Apprec Rfdg............................. * 01/15/25 1,591,350 3,185 Imperial Irr Dist CA Rev Elec Sys Proj (FSA Insd) (a)................................... 5.250 11/01/18 3,490,091 1,600 Long Beach, CA Bd Fin Auth Rev Redev Hsg & Gas Util Fin Ser A1 (AMBAC Insd)............ 5.000 08/01/40 1,665,568 3,000 Los Angeles, CA Uni Sch Dist Ser A (FSA Insd).................................. 5.250 07/01/19 3,320,730
See Notes to Financial Statements 7 VAN KAMPEN ADVANTAGE MUNICIPAL INCOME TRUST PORTFOLIO OF INVESTMENTS -- APRIL 30, 2005 (UNAUDITED) continued
PAR AMOUNT (000) DESCRIPTION COUPON MATURITY VALUE --------------------------------------------------------------------------------------------- CALIFORNIA (CONTINUED) $7,500 San Jose, CA Fin Auth Lease Rev Civic Ctr Proj Ser B (AMBAC Insd)..................... 5.000% 06/01/32 $ 7,780,950 1,600 Turlock, CA Hlth Fac Rev Ctf Partn Emanuel Med Ctr Inc................................. 5.375 10/15/34 1,640,624 ------------- 50,289,384 ------------- COLORADO 2.3% 3,000 Colorado Hlth Fac Auth Rev Catholic Hlth Initiatives Ser A (Escrowed to Maturity).... 5.500 03/01/32 3,349,980 2,000 La Plata Cnty, CO Sch Dist 9 (MBIA Insd) (a)............................. 5.250 11/01/19 2,198,100 1,740 Weld & Adams Cntys, CO Sch Dist No. 003 (FSA Insd) (a).............................. 5.000 12/15/23 1,867,037 ------------- 7,415,117 ------------- CONNECTICUT 2.1% 2,040 Bridgeport, CT Ser A (MBIA Insd) (a)........ 5.250 08/15/21 2,223,947 3,250 Connecticut St Spl Oblig Pkg Rev Bradley Intl Arpt Ser A (AMT) (ACA Insd)............ 6.600 07/01/24 3,528,492 1,000 Hartford, CT Pkg Sys Rev Ser A (Prerefunded @ 07/01/10).................... 6.400 07/01/20 1,148,540 ------------- 6,900,979 ------------- DISTRICT OF COLUMBIA 2.1% 2,500 District Columbia Rev Gonzaga College (FSA Insd)....................................... 5.250 07/01/32 2,650,800 3,850 Metropolitan Washington DC Arpt Auth Sys Ser A (AMT) (FGIC Insd)......................... 5.250 10/01/32 4,017,513 ------------- 6,668,313 ------------- FLORIDA 1.5% 2,000 Escambia Cnty, FL Hlth Fac Auth Rev (AMBAC Insd)....................................... 5.950 07/01/20 2,031,020 2,500 Miami-Dade Cnty, FL Aviation Rev Miami Intl Arpt (AMT) (FGIC Insd)...................... 5.375 10/01/32 2,634,550 ------------- 4,665,570 ------------- GEORGIA 6.3% 1,000 Atlanta, GA Arpt Rev Ser B (AMT) (FGIC Insd)....................................... 5.625 01/01/30 1,059,450 5,160 Atlanta, GA Wtr & Wastewtr Rev (FSA Insd)... 5.000 11/01/20 5,542,304 2,000 Clayton Cnty & Clayton Cnty GA Wtr Auth Wtr & Swr Rev................................... 5.000 05/01/21 2,159,300 3,770 Monroe Cnty, GA Dev Auth Pollutn Ctl Rev Oglethorpe Pwr Corp Scherer Ser A........... 6.800 01/01/12 4,456,366 2,895 Municipal Elec Auth GA Combustion Turbine Proj Ser A (MBIA Insd)...................... 5.250 11/01/19 3,041,429 2,500 Municipal Elec Auth GA Combustion Turbine Proj Ser A (MBIA Insd)...................... 5.250 11/01/21 2,722,875 105 Municipal Elec Auth GA Combustion Turbine Proj Ser A (Prerefunded @ 11/01/07) (MBIA Insd)....................................... 5.250 11/01/19 110,927 1,000 Oconee Cnty, GA Indl Dev Auth Rev Oiit Proj (XLCA Insd)................................. 5.250 07/01/25 1,065,530 ------------- 20,158,181 -------------
8 See Notes to Financial Statements VAN KAMPEN ADVANTAGE MUNICIPAL INCOME TRUST PORTFOLIO OF INVESTMENTS -- APRIL 30, 2005 (UNAUDITED) continued
PAR AMOUNT (000) DESCRIPTION COUPON MATURITY VALUE --------------------------------------------------------------------------------------------- ILLINOIS 16.7% $3,750 Bolingbrook, IL Cap Apprec Ser B (MBIA Insd)....................................... * 01/01/30 $ 984,262 2,000 Chicago, IL Brd of Ed (Prerefunded @ 12/01/10) (FGIC Insd)........ 5.500% 12/01/31 2,235,280 3,150 Chicago, IL O'Hare Intl Arpt Rev Gen Arpt Third Lien Ser A Rfdg (AMT) (MBIA Insd)..... 5.375 01/01/32 3,298,649 1,895 Chicago, IL Pk Dist Hbr Fac Rev (Prerefunded @ 01/01/11).................... 5.875 01/01/16 2,155,430 2,500 Chicago, IL Pk Dist Ser C (FGIC Insd)....... 5.500 01/01/19 2,759,925 4,500 Cook Cnty, IL Cap Impt Ser A (FGIC Insd).... 5.000 11/15/23 4,778,910 1,620 Cook Cnty, IL Cmnty High Sch Dist No. 219 Niles Twp (FSA Insd)........................ * 12/01/11 1,262,272 2,260 Cook Cnty, IL Cmnty High Sch Dist No. 219 Niles Twp (FSA Insd)........................ * 12/01/12 1,672,942 2,235 Cook Cnty, IL Cmnty High Sch Dist No. 219 Niles Twp (FSA Insd)........................ * 12/01/13 1,571,920 3,110 Du Page Cnty, IL Trans Rev (Prerefunded @ 07/01/11) (FSA Insd)........................ 5.750 01/01/17 3,536,848 3,000 Illinois Fin Auth Rev Northwestern Mem Hosp Ser A....................................... 5.500 08/15/43 3,216,900 1,925 Kendall, Kane & Will Cntys, IL Cmnty Unit Sch Dist No. 308 Ser B (FGIC Insd).......... 5.250 10/01/21 2,094,901 2,135 Mc Henry Cnty, IL Cmnty High Sch Dist No. 154 Cap Apprec (FGIC Insd) (a).............. * 01/01/14 1,488,842 1,440 Mc Henry Cnty, IL Cmnty High Sch Dist No. 154 Cap Apprec (FGIC Insd).................. * 01/01/17 852,696 1,250 Metropolitan Pier & Expo Auth IL Dedicated St Tax Rev McCormick Pl Expn Proj (FGIC Insd)....................................... 5.375 12/15/18 1,360,875 1,000 Metropolitan Pier & Expo Auth IL Dedicated St Tax Rev McCormick Pl Expn Proj Rfdg (FGIC Insd)....................................... 5.500 12/15/24 1,093,690 6,000 Metropolitan Pier & Expo Auth IL Dedicated St Tax Rev McCormick Pl Expn Ser A (MBIA Insd)....................................... 5.250 06/15/42 6,444,660 5,000 Regional Tran Auth IL Ser B (AMBAC Insd)................................ 8.000 06/01/17 6,893,250 5,000 University IL Univ Rev Auxiliary Fas Ser A Rfdg (AMBAC Insd)........................... 5.000 04/01/30 5,152,100 1,150 Will Cnty, IL Cmnty Sch Dist 365U Vly View Ser B (FSA Insd)............................ * 11/01/15 732,493 ------------- 53,586,845 ------------- INDIANA 3.4% 1,000 Allen Cnty, IN Juvenile Justice Ctr First Mtg (AMBAC Insd)............................ 5.500 01/01/18 1,108,640 4,120 Indiana Hlth Fac Fin Auth Hosp Rev Cmnty Hosp Proj Ser A (AMBAC Insd) (b)............ 5.000 05/01/35 4,271,039 2,000 Indiana Hlth Fac Fin Auth Hosp Rev Columbus Regl Hosp Rfdg (FSA Insd)................... 7.000 08/15/15 2,441,280 1,500 Indiana St Dev Fin Auth Rev Exempt Fac Conv Rfdg (AMT).................................. 5.950 08/01/30 1,544,160
See Notes to Financial Statements 9 VAN KAMPEN ADVANTAGE MUNICIPAL INCOME TRUST PORTFOLIO OF INVESTMENTS -- APRIL 30, 2005 (UNAUDITED) continued
PAR AMOUNT (000) DESCRIPTION COUPON MATURITY VALUE --------------------------------------------------------------------------------------------- INDIANA (CONTINUED) $1,220 North Adams, IN Cmnty Sch Cap Apprec First Mtg (FSA Insd) (a).......................... * 07/15/16 $ 744,029 1,230 North Adams, IN Cmnty Sch Cap Apprec First Mtg (FSA Insd) (a).......................... * 01/15/17 725,749 ------------- 10,834,897 ------------- LOUISIANA 3.0% 2,500 Lafayette, LA Utils Rev (MBIA Insd)......... 5.250% 11/01/23 2,730,200 300 Louisiana Hsg Fin Agy Mtg Rev Single Family Access Pgm Ser B (AMT) (GNMA Collateralized)....................... 8.000 03/01/25 304,833 3,000 Louisiana St Energy & Pwr Auth Pwr Proj Rev Rfdg (FSA Insd)............................. 5.750 01/01/12 3,416,580 3,000 Saint Charles Parish, LA Environmental Impt Rev LA Pwr & Lt Co Ser A (AMT) (AMBAC Insd).................... 6.875 07/01/24 3,029,610 ------------- 9,481,223 ------------- MARYLAND 1.4% 1,000 Maryland St Econ Dev Corp Univ MD College Pk Proj........................................ 5.625 06/01/35 1,037,010 1,000 Maryland St Hlth & Higher Ed Fac Auth Rev Medstar Hlth Rfdg........................... 5.375 08/15/24 1,034,290 2,360 Northeast, MD Waste Disp Auth Rfdg (AMT) (AMBAC Insd)................................ 5.500 04/01/16 2,575,657 ------------- 4,646,957 ------------- MASSACHUSETTS 2.5% 3,955 Massachusetts Bay Trans Auth Gen Trans Sys Ser A Rfdg.................................. 5.500 03/01/12 4,383,247 2,400 Massachusetts St Dev Fin Agy Rev Clg Pharmacy & Allied Hlth Ser D................ 5.000 07/01/35 2,494,944 1,000 Massachusetts St Hlth & Ed Fac Auth Rev Saint Mem Med Ctr Ser A..................... 6.000 10/01/23 1,004,060 ------------- 7,882,251 ------------- MICHIGAN 0.5% 1,500 Kent Hosp Fin Auth MI Rev Met Hosp Proj Ser A......................... 6.250 07/01/40 1,641,810 ------------- MINNESOTA 1.3% 3,875 Saint Paul, MN Port Auth Lease Rev Office Bldg at Cedar Str (a)....................... 5.250 12/01/19 4,289,315 ------------- MISSISSIPPI 1.2% 2,000 Mississippi Bus Fin Corp MS Pollutn Ctl Rev Sys Energy Res Inc Proj..................... 5.875 04/01/22 2,025,100 1,000 Mississippi Bus Fin Corp MS Pollutn Ctl Rev Sys Energy Res Inc Proj Rfdg................ 5.900 05/01/22 1,013,840 680 Mississippi Home Corp Single Family Rev Mtg Access Pgm Ser B (AMT) (GNMA Collateralized)....................... 7.900 03/01/25 689,180 ------------- 3,728,120 -------------
10 See Notes to Financial Statements VAN KAMPEN ADVANTAGE MUNICIPAL INCOME TRUST PORTFOLIO OF INVESTMENTS -- APRIL 30, 2005 (UNAUDITED) continued
PAR AMOUNT (000) DESCRIPTION COUPON MATURITY VALUE --------------------------------------------------------------------------------------------- MISSOURI 0.9% $1,345 Kansas City, MO Met Cmnty Colleges Bldg Corp Rev Leasehold Jr College Impt & Rfdg (FGIC Insd)....................................... 5.500% 07/01/17 $ 1,491,121 1,210 Saint Louis, MO Arpt Rev Cap Impt Pgm Ser A (MBIA Insd)................................. 5.375 07/01/18 1,326,608 ------------- 2,817,729 ------------- NEBRASKA 0.8% 2,500 Nebraska Pub Pwr Dist Rev Gen Ser A (AMBAC Insd)....................................... 5.000 01/01/35 2,616,725 ------------- NEVADA 3.4% 7,500 Clark Cnty, NV Arpt Rev Sub Lien Ser A-2 (FGIC Insd)................................. 5.000 07/01/36 7,793,100 3,000 Clark Cnty, NV Indl Dev Rev Southwest Gas Corp Proj Ser A (AMT) (AMBAC Insd).......... 5.250 07/01/34 3,147,360 ------------- 10,940,460 ------------- NEW HAMPSHIRE 0.7% 1,155 New Hampshire Hlth & Ed Fac Auth Rev Derryfield Sch.............................. 7.000 07/01/30 1,224,496 1,000 New Hampshire St Bus Fin Auth Wtr Fac Rev Pennichuck Wtrwks Inc (AMT) (AMBAC Insd).... 6.300 05/01/22 1,078,830 ------------- 2,303,326 ------------- NEW JERSEY 12.3% 2,700 New Jersey Econ Dev Auth Rev Cigarette Tax......................................... 5.750 06/15/29 2,896,884 3,000 New Jersey Econ Dev Auth Rev Motor Vehicle Sur Rev Ser A (MBIA Insd)................... 5.000 07/01/23 3,200,970 4,000 New Jersey Econ Dev Auth Rev Sch Fac Constr Ser I....................................... 5.000 09/01/22 4,225,880 10,000 New Jersey Econ Dev Auth St Contract Econ Recovery (MBIA Insd)........................ 5.900 03/15/21 12,104,600 8,000 New Jersey Econ Dev Auth Wtr Fac Rev NJ Amer Wtr Co Inc Proj Ser A (AMT) (FGIC Insd)..... 6.875 11/01/34 8,185,760 5,000 New Jersey St Ed Fac Auth Higher Ed Cap Impt Ser A (AMBAC Insd).......................... 5.250 09/01/21 5,436,900 3,110 Newark, NJ Hsg Auth Port Auth Newark Marine Terminal (MBIA Insd)........................ 5.250 01/01/20 3,391,144 ------------- 39,442,138 ------------- NEW MEXICO 1.1% 2,020 University NM Univ Rev Sub Lien Ser A Rfdg (a).............................. 5.250 06/01/20 2,191,316 1,125 University NM Univ Rev Sub Lien Ser A Rfdg.................................. 5.250 06/01/21 1,220,411 ------------- 3,411,727 ------------- NEW YORK 17.6% 170 Broome Cnty, NY Ctf Partn (MBIA Insd)....... 5.250 04/01/15 172,032 1,300 New York City Indl Dev Civic YMCA Gtr NY Proj........................................ 5.800 08/01/16 1,375,790 6,000 New York City Muni Wtr Fin Auth Wtr & Swr Sys Rev Ser D............................... 5.000 06/15/39 6,255,960 3,500 New York City Ser E......................... 5.000 11/01/20 3,761,590 2,225 New York City Ser F......................... 6.000 08/01/11 2,336,272
See Notes to Financial Statements 11 VAN KAMPEN ADVANTAGE MUNICIPAL INCOME TRUST PORTFOLIO OF INVESTMENTS -- APRIL 30, 2005 (UNAUDITED) continued
PAR AMOUNT (000) DESCRIPTION COUPON MATURITY VALUE --------------------------------------------------------------------------------------------- NEW YORK (CONTINUED) $2,500 New York City Ser H......................... 5.750% 03/15/12 $ 2,795,425 5,000 New York City Transitional Fin Auth Rev Future Tax Secd Ser A Rfdg (c).............. 5.500/14.000 11/01/26 5,562,750 2,525 New York St Dorm Auth Lease Rev Muni Hlth Fac Impt Pgm Ser A (FSA Insd)............... 5.500 05/15/25 2,680,212 1,625 New York St Dorm Auth Lease Rev St Univ Dorm Fac Ser A (Prerefunded @ 07/01/10).......... 6.000 07/01/14 1,866,166 1,135 New York St Dorm Auth Rev City Univ Secd Ser B (Escrowed to Maturity).................... 5.375 07/01/07 1,196,006 3,915 New York St Dorm Auth Rev City Univ Secd Ser B (a)....................................... 5.375 07/01/07 4,106,013 3,100 New York St Dorm Auth Rev City Univ Sys Cons Ser A....................................... 5.625 07/01/16 3,545,904 2,600 New York St Dorm Auth Rev Cons City Univ Sys Second Gen Ser A............................ 5.750 07/01/13 2,939,118 3,650 New York St Dorm Auth Rev FHA Montefiore Hosp (FGIC Insd)............................ 5.000 08/01/33 3,817,535 2,535 New York St Dorm Auth Rev Mental Hlth Ser B....................................... 5.750 08/15/11 2,687,506 15 New York St Dorm Auth Rev Mental Hlth Ser B (Prerefunded @ 02/15/07).................... 5.750 08/15/11 16,039 110 New York St Dorm Auth Rev Mental Hlth Ser D (FSA Insd) (a).............................. 5.875 02/15/14 123,168 1,350 New York St Dorm Auth Rev Ser B............. 7.500 05/15/11 1,531,670 650 New York St Dorm Auth Rev Ser B (Prerefunded @ 05/15/09).................... 7.500 05/15/11 766,974 5,000 New York St Dorm Auth Rev St Univ Ed Fac Ser A........................................... 5.500 05/15/08 5,355,900 1,320 New York St Mtg Agy Rev Homeowner Mtg Ser 82 (AMT)....................................... 5.650 04/01/30 1,358,135 2,160 New York St Twy Auth Svc Contract Rev Loc Hwy & Brdg.................................. 5.500 04/01/16 2,408,724 ------------- 56,658,889 ------------- NORTH CAROLINA 5.3% 11,000 North Carolina Muni Pwr Agy No 1 Catawba Elec Rev Rfdg (MBIA Insd)................... 6.000 01/01/12 12,654,950 4,000 North Carolina Muni Pwr Agy Ser A (MBIA Insd)........................... 5.250 01/01/19 4,360,400 ------------- 17,015,350 ------------- NORTH DAKOTA 0.3% 1,050 North Dakota St Hsg Fin Agy Rev Hsg Fin Pgm Home Mtg Fin Ser B (AMT) (MBIA Insd)........ 5.500 07/01/29 1,080,576 ------------- OHIO 3.6% 2,335 Cleveland, OH Muni Sch Dist (FSA Insd)...... 5.250 12/01/18 2,574,384 1,000 Cleveland, OH Muni Sch Dist (FSA Insd)...... 5.250 12/01/24 1,085,780 1,000 Cleveland-Cuyahoga Cnty, OH Port Auth Rev Student Hsg Euclid Ave Fenn Proj (AMBAC Insd)....................................... 5.000 08/01/28 1,055,200 1,000 Cuyahoga Cnty, OH Hosp Fac Rev Canton Inc Proj........................................ 7.500 01/01/30 1,124,720
12 See Notes to Financial Statements VAN KAMPEN ADVANTAGE MUNICIPAL INCOME TRUST PORTFOLIO OF INVESTMENTS -- APRIL 30, 2005 (UNAUDITED) continued
PAR AMOUNT (000) DESCRIPTION COUPON MATURITY VALUE --------------------------------------------------------------------------------------------- OHIO (CONTINUED) $2,000 Lorain Cnty, OH Hosp Rev Catholic Hlthcare........................... 5.375% 10/01/30 $ 2,093,260 2,450 Lorain Cnty, OH Hosp Rev Catholic Hlthcare Ser A Impt & Rfdg......... 5.250 10/01/33 2,534,991 1,000 Marion Cnty, OH Hosp Rev Cmnty Hosp Impt & Rfdg........................................ 6.375 05/15/11 1,045,030 ------------- 11,513,365 ------------- OKLAHOMA 4.0% 3,410 Jenks, OK Aquarium Auth Rev Rfdg (MBIA Insd) (a)............................. 5.250 07/01/24 3,714,206 1,475 Jenks, OK Aquarium Auth Rev Rfdg (MBIA Insd)................................. 5.250 07/01/33 1,599,520 1,100 Oklahoma City, OK Indl & Cultural Fac Tr Rev Dist Heating & Cooling Trigen (AMT) (LOC: Societe Generale)........................... 6.750 09/15/17 1,103,410 1,250 Oklahoma City, OK Pub Ppty Auth Hotel Tax Rev (FGIC Insd)............................. 5.250 10/01/29 1,356,300 1,065 Oklahoma Dev Fin Auth Lease Rev OK Council Law Enforcement (MBIA Insd) (a)............. 5.500 06/01/17 1,186,698 1,120 Oklahoma Dev Fin Auth Lease Rev OK Council Law Enforcement (MBIA Insd) (a)............. 5.500 06/01/18 1,246,504 1,185 Oklahoma Dev Fin Auth Lease Rev OK Council Law Enforcement (MBIA Insd) (a)............. 5.500 06/01/19 1,318,846 1,250 Tulsa Cnty, OK Pub Fac Auth Cap Impt Rev (AMBAC Insd)................................ 6.250 11/01/22 1,425,913 ------------- 12,951,397 ------------- OREGON 3.9% 2,500 Oregon Hlth Sciences Univ Insd Ser A (MBIA Insd)....................................... 5.250 07/01/22 2,735,675 5,000 Oregon St Dept Admin Ser C Rfdg (MBIA Insd)....................................... 5.250 11/01/18 5,453,500 4,000 Portland, OR Swr Sys Rev Ser A (FGIC Insd)................................. 5.750 08/01/18 4,461,320 ------------- 12,650,495 ------------- PENNSYLVANIA 6.5% 2,650 Central Dauphin, PA Sch Dist (FSA Insd)..... 5.000 12/01/19 2,858,767 2,210 Chartiers Valley, PA Sch Dist Ser A (FSA Insd) (a).............................. 5.250 10/15/19 2,437,497 700 Harrisburg, PA Cap Apprec Ser D Rfdg (AMBAC Insd)....................................... * 03/15/14 484,582 1,830 Harrisburg, PA Cap Apprec Ser D Rfdg (AMBAC Insd) (a)................................... * 09/15/14 1,236,202 2,750 Hempfield, PA Area Sch Dist Westmoreland Cnty Ser A (FGIC Insd)...................... 5.250 03/15/19 3,024,395 2,515 Hempfield, PA Area Sch Dist Westmoreland Cnty Ser A (FGIC Insd)...................... 5.250 03/15/20 2,761,797 3,090 Philadelphia, PA Gas Wks Rev 1975 Gen Ordinance 17th Ser (FSA Insd)............... 5.375 07/01/19 3,381,263
See Notes to Financial Statements 13 VAN KAMPEN ADVANTAGE MUNICIPAL INCOME TRUST PORTFOLIO OF INVESTMENTS -- APRIL 30, 2005 (UNAUDITED) continued
PAR AMOUNT (000) DESCRIPTION COUPON MATURITY VALUE --------------------------------------------------------------------------------------------- PENNSYLVANIA (CONTINUED) $2,440 Philadelphia, PA Sch Dist Ser A (FSA Insd).................................. 5.750% 02/01/11 $ 2,746,537 2,000 Radnor Twp, PA Sch Dist (Prerefunded @ 03/15/07).................... 5.750 03/15/26 2,105,580 ------------- 21,036,620 ------------- SOUTH CAROLINA 3.4% 1,385 Easley, SC Util Rev (Prerefunded @ 12/01/12) (FSA Insd) (a).............................. 5.250 12/01/20 1,556,255 2,500 Easley, SC Util Rev Impt & Rfdg (FSA Insd).................................. 5.000 12/01/34 2,637,700 2,500 South Carolina Jobs Econ Dev Auth Indl Rev Elec & Gas Co Proj Ser A (AMBAC Insd)....... 5.200 11/01/27 2,680,125 3,750 South Carolina Jobs Econ Dev Auth Indl Rev Elec & Gas Co Proj Ser B (AMT) (AMBAC Insd)....................................... 5.450 11/01/32 3,989,025 ------------- 10,863,105 ------------- SOUTH DAKOTA 0.8% 2,500 South Dakota St Hlth & Ed Fac Auth Rev Sioux Vly Hosp & Hlth Sys Ser A................... 5.250 11/01/34 2,592,600 ------------- TENNESSEE 1.0% 1,000 Elizabethton, TN Hlth & Ed Fac Brd Rev Hosp First Mtg Ser B Impt & Rfdg................. 8.000 07/01/33 1,192,170 1,500 Elizabethton, TN Hlth & Ed Fac Brd Rev Hosp Ser B Impt & Rfdg (MBIA Insd)............... 7.750 07/01/29 1,894,440 ------------- 3,086,610 ------------- TEXAS 11.6% 2,350 Austin, TX Ctf Oblig (MBIA Insd) (a)........ 5.375 09/01/20 2,566,106 4,000 Dallas-Fort Worth, TX Intl Arpt Rev Jt Ser A (AMT) (FSA Insd)............................ 5.500 11/01/21 4,343,360 2,500 Dallas-Fort Worth, TX Intl Arpt Rev Jt Ser A (AMT) (FGIC Insd)........................... 5.750 11/01/30 2,692,625 2,000 Harris Cnty, TX Hlth Fac Dev Mem Hermann Hlthcare Ser A.............................. 6.375 06/01/29 2,208,440 5,000 Houston, TX Arpt Sys Rev Sub Lien Ser A (AMT) (FSA Insd)............................ 5.125 07/01/32 5,142,200 6,000 Houston, TX Util Sys Rev First Lien Ser A Rfdg (FSA Insd)............................. 5.250 05/15/21 6,504,180 515 Little Elm, TX Indpt Sch Dist (PSF Gtd) (a)............................... 6.750 08/15/29 520,572 2,185 Lower CO Riv Auth TX Transmission Contract Rev Svc Corp Proj Rfdg (FGIC Insd).......... 5.000 05/15/25 2,274,694 2,000 Lower CO Riv Auth TX Transmission Contract Rev Svc Corp Proj Rfdg (FGIC Insd).......... 5.000 05/15/33 2,056,520 1,000 Matagorda Cnty, TX Navig Dist No 1 Rev Coll Centerpoint Energy Proj Rfdg................ 5.600 03/01/27 1,043,500 1,500 Metropolitan Hlth Fac Dev Corp TX Wilson N Jones Mem Hosp Proj......................... 7.250 01/01/31 1,529,580
14 See Notes to Financial Statements VAN KAMPEN ADVANTAGE MUNICIPAL INCOME TRUST PORTFOLIO OF INVESTMENTS -- APRIL 30, 2005 (UNAUDITED) continued
PAR AMOUNT (000) DESCRIPTION COUPON MATURITY VALUE --------------------------------------------------------------------------------------------- TEXAS (CONTINUED) $5,000 North Cent TX Hlth Fac Dev Hosp Childrens Med Ctr Dallas (AMBAC Insd)................. 5.250% 08/15/32 $ 5,305,900 1,000 Trinity Riv Auth TX Rev Tarrant Cnty Wtr Proj Impt & Rfdg (MBIA Insd)................ 5.500 02/01/21 1,111,790 ------------- 37,299,467 ------------- UTAH 0.8% 2,380 Mountain Regl Wtr Spl Svc Dist Rfdg (MBIA Insd)....................................... 5.000 12/15/33 2,487,576 ------------- WASHINGTON 8.6% 3,750 Chelan Cnty, WA Pub Util Dist No. 001 Cons Rev Chelan Hydro Ser A (AMT) (MBIA Insd).... 5.600 01/01/36 4,021,013 2,500 Energy Northwest WA Elec Rev Proj No 3 Ser A Rfdg (FSA Insd)............................. 5.500 07/01/18 2,764,775 5,000 Energy Northwest WA Elec Rev Proj No 3 Ser B Rfdg (FSA Insd)............................. 6.000 07/01/16 5,730,200 1,400 King Cnty, WA Hsg Auth Hsg Rev Pooled Sr Ser A Rfdg...................................... 6.700 03/01/15 1,430,058 2,120 Seattle, WA Muni Lt & Pwr Rev............... 5.625 12/01/17 2,293,692 3,000 Spokane, WA Pub Fac Dist Hotel Motel & Sales Use Tax (MBIA Insd)......................... 5.250 09/01/33 3,196,530 4,750 Tacoma, WA Elec Sys Rev Ser A Rfdg (FSA Insd)....................................... 5.750 01/01/14 5,366,978 1,500 Tacoma, WA Elec Sys Rev Ser B Rfdg (FSA Insd)....................................... 5.500 01/01/12 1,681,320 1,000 Thurston & Pierce Cntys, WA (FSA Insd)...... 5.000 12/01/20 1,076,650 ------------- 27,561,216 ------------- WEST VIRGINIA 0.3% 920 West Virginia St Hsg Dev Fd Ser A........... 5.550 05/01/17 930,074 ------------- WISCONSIN 1.0% 3,000 Wisconsin St Hlth & Ed Fac Wheaton Franciscan Svc Rfdg......................... 5.750 08/15/30 3,193,080 ------------- WYOMING 0.3% 1,000 University WY Univ Rev Fac Impt (FSA Insd).................................. 5.500 06/01/18 1,106,360 ------------- PUERTO RICO 3.9% 10,000 Puerto Rico Comwlth Hwy & Tran Auth Hwy Rev Ser Y Rfdg (FSA Insd) (d)................... 6.250 07/01/21 12,694,300 ------------- TOTAL INVESTMENTS 158.4% (Cost $475,034,518)......................................................... 509,091,659 OTHER ASSETS IN EXCESS OF LIABILITIES 0.8%................................... 2,480,993 PREFERRED SHARES (INCLUDING ACCRUED DISTRIBUTIONS) (59.2%)................... (190,166,546) ------------- NET ASSETS APPLICABLE TO COMMON SHARES 100.0%................................ $ 321,406,106 =============
See Notes to Financial Statements 15 VAN KAMPEN ADVANTAGE MUNICIPAL INCOME TRUST PORTFOLIO OF INVESTMENTS -- APRIL 30, 2005 (UNAUDITED) continued Percentages are calculated as a percentage of net assets applicable to common shares. * Zero coupon bond (a) The Trust owns 100% of the bond issuance. (b) Security purchased on a when-issued or delayed delivery basis. (c) Security is a "step-up" bond where the coupon increases or steps up at a predetermined date. (d) All or a portion of this security has been physically segregated in connection with open futures contracts. ACA--American Capital Access AMBAC--AMBAC Indemnity Corp. AMT--Alternative Minimum Tax FGIC--Financial Guaranty Insurance Co. FSA--Financial Security Assurance Inc. LOC--Letter of Credit MBIA--Municipal Bond Investors Assurance Corp. PSF--Public School Fund XLCA--XL Capital Assurance Inc. 16 See Notes to Financial Statements VAN KAMPEN ADVANTAGE MUNICIPAL INCOME TRUST FINANCIAL STATEMENTS Statement of Assets and Liabilities April 30, 2005 (Unaudited) ASSETS: Total Investments (Cost $475,034,518)....................... $509,091,659 Receivables: Interest.................................................. 7,938,035 Variation Margin on Futures............................... 281,750 Investments Sold.......................................... 40,329 Other....................................................... 1,450 ------------ Total Assets............................................ 517,353,223 ------------ LIABILITIES: Payables: Investments Purchased..................................... 4,191,317 Custodian Bank............................................ 856,954 Investment Advisory Fee................................... 229,628 Income Distributions--Common Shares....................... 70,531 Other Affiliates.......................................... 19,695 Trustees' Deferred Compensation and Retirement Plans........ 310,682 Accrued Expenses............................................ 101,764 ------------ Total Liabilities....................................... 5,780,571 Preferred Shares (including accrued distributions).......... 190,166,546 ------------ NET ASSETS APPLICABLE TO COMMON SHARES...................... $321,406,106 ============ NET ASSET VALUE PER COMMON SHARE ($321,406,106 divided by 19,106,785 shares outstanding)............................ $ 16.82 ============ NET ASSETS CONSIST OF: Common Shares ($.01 par value with an unlimited number of shares authorized, 19,106,785 shares issued and outstanding).............................................. $ 191,068 Paid in Surplus............................................. 282,026,345 Net Unrealized Appreciation................................. 33,098,337 Accumulated Net Realized Gain............................... 3,873,153 Accumulated Undistributed Net Investment Income............. 2,217,203 ------------ NET ASSETS APPLICABLE TO COMMON SHARES...................... $321,406,106 ============ PREFERRED SHARES ($.01 par value, authorized 100,000,000 shares, 7,600 issued with liquidation preference of $25,000 per share)........................................ $190,000,000 ============ NET ASSETS INCLUDING PREFERRED SHARES....................... $511,406,106 ============
See Notes to Financial Statements 17 VAN KAMPEN ADVANTAGE MUNICIPAL INCOME TRUST FINANCIAL STATEMENTS continued Statement of Operations For the Six Months Ended April 30, 2005 (Unaudited) INVESTMENT INCOME: Interest.................................................... $12,462,045 ----------- EXPENSES: Investment Advisory Fee..................................... 1,392,468 Preferred Share Maintenance................................. 260,318 Trustees' Fees and Related Expenses......................... 33,379 Legal....................................................... 27,660 Custody..................................................... 21,192 Other....................................................... 119,314 ----------- Total Expenses.......................................... 1,854,331 ----------- NET INVESTMENT INCOME....................................... $10,607,714 =========== REALIZED AND UNREALIZED GAIN/LOSS: Realized Gain/Loss: Investments............................................... $ 3,670,170 Futures................................................... 706,254 ----------- Net Realized Gain........................................... 4,376,424 ----------- Unrealized Appreciation/Depreciation: Beginning of the Period................................... 37,776,060 ----------- End of the Period: Investments............................................. 34,057,141 Futures................................................. (958,804) ----------- 33,098,337 ----------- Net Unrealized Depreciation During the Period............... (4,677,723) ----------- NET REALIZED AND UNREALIZED LOSS............................ $ (301,299) =========== DISTRIBUTIONS TO PREFERRED SHAREHOLDERS..................... $(1,772,694) =========== NET INCREASE IN NET ASSETS APPLICABLE TO COMMON SHARES FROM OPERATIONS................................................ $ 8,533,721 ===========
18 See Notes to Financial Statements VAN KAMPEN ADVANTAGE MUNICIPAL INCOME TRUST FINANCIAL STATEMENTS continued Statements of Changes in Net Assets (Unaudited)
FOR THE FOR THE SIX MONTHS ENDED YEAR ENDED APRIL 30, 2005 OCTOBER 31, 2004 ----------------------------------- FROM INVESTMENT ACTIVITIES: Operations: Net Investment Income...................................... $ 10,607,714 $ 21,512,269 Net Realized Gain/Loss..................................... 4,376,424 (1,701,351) Net Unrealized Appreciation/Depreciation During the Period................................................... (4,677,723) 6,650,012 Distributions to Preferred Shareholders: Net Investment Income.................................... (1,772,694) (2,037,718) Net Realized Gain........................................ -0- (134,843) ------------ ------------ Change in Net Assets Applicable to Common Shares from Operations............................................... 8,533,721 24,288,369 Distributions to Common Shareholders: Net Investment Income.................................... (9,457,370) (20,099,497) Net Realized Gain........................................ -0- (1,407,980) ------------ ------------ NET CHANGE IN NET ASSETS APPLICABLE TO COMMON SHARES FROM INVESTMENT ACTIVITIES.................................... (923,649) 2,780,892 NET ASSETS APPLICABLE TO COMMON SHARES: Beginning of the Period.................................... 322,329,755 319,548,863 ------------ ------------ End of the Period (Including accumulated undistributed net investment income of $2,217,203 and $2,839,553, respectively)............................................ $321,406,106 $322,329,755 ============ ============
See Notes to Financial Statements 19 VAN KAMPEN ADVANTAGE MUNICIPAL INCOME TRUST FINANCIAL HIGHLIGHTS (UNAUDITED) THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE COMMON SHARE OF THE TRUST OUTSTANDING THROUGHOUT THE PERIODS INDICATED.
SIX MONTHS ENDED APRIL 30, ------------------ 2005 2004 2003 ------------------------------- NET ASSET VALUE, BEGINNING OF THE PERIOD.................... $ 16.87 $ 16.72 $ 16.77 ------- ------- ------- Net Investment Income..................................... .56 1.13 1.17 Net Realized and Unrealized Gain/Loss..................... (.02) .26 (.01) Common Share Equivalent of Distributions Paid to Preferred Shareholders: Net Investment Income................................... (.09) (.11) (.10) Net Realized Gain....................................... -0- (.01) -0- ------- ------- ------- Total from Investment Operations............................ .45 1.27 1.06 Distributions Paid to Common Shareholders: Net Investment Income................................... (.50) (1.05) (1.11) Net Realized Gain....................................... -0- (.07) -0- ------- ------- ------- NET ASSET VALUE, END OF THE PERIOD.......................... $ 16.82 $ 16.87 $ 16.72 ======= ======= ======= Common Share Market Price at End of the Period.............. $ 14.55 $ 15.20 $ 16.20 Total Return (b)............................................ -1.03%* 0.81% 12.30% Net Assets Applicable to Common Shares at End of the Period (In millions)............................................. $ 321.4 $ 322.3 $ 319.5 Ratio of Expenses to Average Net Assets Applicable to Common Shares (c)................................................ 1.17% 1.31% 1.32% Ratio of Net Investment Income to Average Net Assets Applicable to Common Shares (c)........................... 6.67% 6.75% 6.99% Portfolio Turnover.......................................... 16%* 28% 27% SUPPLEMENTAL RATIOS: Ratio of Expenses to Average Net Assets Including Preferred Shares (c)................................................ .73% .82% .83% Ratio of Net Investment Income to Average Net Assets Applicable to Common Shares (d)........................... 5.56% 6.11% 6.37% SENIOR SECURITIES: Total Preferred Shares Outstanding.......................... 7,600 7,600 7,600 Asset Coverage Per Preferred Share (e)...................... $67,312 $67,420 $67,049 Involuntary Liquidating Preference Per Preferred Share...... $25,000 $25,000 $25,000 Average Market Value Per Preferred Share.................... $25,000 $25,000 $25,000
* Non-Annualized (a)As required, effective November 1, 2001, the Trust has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began accreting market discount on fixed income securities. The effect of this change for the year ended October 31, 2002 was to increase net investment income per share by $.02, decrease net realized and unrealized gains and losses by $.02 and increase the ratio of net investment income to average net assets applicable to common shares by .11%. Per share, ratios, and supplemental data for periods prior to October 31, 2002 have not been restated to reflect this change in presentation. (b)Total return assumes an investment at the common share market price at the beginning of the period indicated, reinvestment of all distributions for the period in accordance with the Trust's dividend reinvestment plan, and sale of all shares at the closing common share market price at the end of the period indicated. (c)Ratios do not reflect the effect of dividend payments to preferred shareholders. (d)Ratios reflect the effect of dividend payments to preferred shareholders. (e)Calculated by subtracting the Trust's total liabilities (not including the preferred shares) from the Trust's total assets and dividing this by the number of preferred shares outstanding. 20 See Notes to Financial Statements
Year Ended October 31, ----------------------------------------------------------------------------------------- 2002 (a) 2001 2000 1999 1998 1997 1996 1995 ----------------------------------------------------------------------------------------- $ 16.80 $ 15.52 $ 14.87 $ 16.93 $ 16.35 $ 15.68 $ 15.61 $ 13.99 ------- ------- -------- -------- -------- -------- -------- -------- 1.21 1.23 1.24 1.22 1.25 1.26 1.29 1.33 (.05) 1.18 .68 (2.06) .59 .72 .16 1.70 (.14) (.34) (.40) (.32) (.35) (.35) (.36) (.39) -0- -0- -0- -0- -0- -0- -0- -0- ------- ------- -------- -------- -------- -------- -------- -------- 1.02 2.07 1.52 (1.16) 1.49 1.63 1.09 2.64 (1.05) (.79) (.87) (.90) (.91) (.96) (1.02) (1.02) -0- -0- -0- -0- -0- -0- -0- -0- ------- ------- -------- -------- -------- -------- -------- -------- $ 16.77 $ 16.80 $ 15.52 $ 14.87 $ 16.93 $ 16.35 $ 15.68 $ 15.61 ======= ======= ======== ======== ======== ======== ======== ======== $ 15.46 $ 14.35 $12.9375 $12.9375 $15.8125 $15.0625 $ 14.75 $ 14.375 15.28% 17.27% 6.86% -13.16% 11.33% 8.96% 9.88% 21.06% $ 320.4 $ 320.9 $ 296.5 $ 284.1 $ 323.4 $ 312.5 $ 299.7 $ 298.3 1.46% 1.61% 1.75% 1.66% 1.64% 1.66% 1.72% 1.72% 7.26% 7.56% 8.34% 7.55% 7.48% 7.99% 8.31% 8.94% 40% 32% 26% 33% 30% 49% 37% 79% .91% 1.00% 1.05% 1.03% 1.03% 1.02% 1.05% 1.03% 6.40% 5.44% 5.61% 5.56% 5.35% 5.76% 5.99% 6.31% 7,600 7,600 7,600 7,600 3,800 3,800 3,800 3,800 $67,170 $67,225 $ 64,014 $ 62,388 $135,105 $132,234 $128,865 $128,498 $25,000 $25,000 $ 25,000 $ 25,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $25,000 $25,000 $ 25,000 $ 25,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000
See Notes to Financial Statements 21 VAN KAMPEN ADVANTAGE MUNICIPAL INCOME TRUST NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2005 (UNAUDITED) 1. SIGNIFICANT ACCOUNTING POLICIES Van Kampen Advantage Municipal Income Trust (the "Trust") is registered as a diversified, closed-end management investment company under the Investment Company Act of 1940, as amended. The Trust's investment objective is to seek to provide a high level of current income exempt from federal income tax, consistent with preservation of capital. In normal market conditions, the Trust will invest substantially all of its net assets in municipal securities rated investment grade at the time of investment. The Trust commenced investment operations on September 25, 1992. The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. A. SECURITY VALUATION Municipal bonds are valued by independent pricing services or dealers using the mean of the bid and asked prices or, in the absence of market quotations, at fair value based upon yield data relating to municipal bonds with similar characteristics and general market conditions. Securities which are not valued by independent pricing services or dealers are valued at fair value using procedures established in good faith by the Board of Trustees. 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. The Trust may purchase and sell securities on a "when-issued" or "delayed delivery" basis, with settlement to occur at a later date. The value of the security so purchased is subject to market fluctuations during this period. The Trust will segregate assets with the custodian having an aggregate value at least equal to the amount of the when-issued or delayed delivery purchase commitments until payment is made. At April 30, 2005, there were $4,191,317 of when-issued or delayed delivery purchase commitments. C. INVESTMENT INCOME Interest income is recorded on an accrual basis. Bond premium is amortized and discount is accreted over the expected life of each applicable security. D. FEDERAL INCOME TAXES It is the Trust's policy to comply with the requirements of Subchapter M of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its taxable income to its shareholders. Therefore, no provision for federal income taxes is required. The Trust intends to utilize provisions of the federal income tax laws which allow it to carry a realized capital loss forward for eight years following the year of the loss and offset such losses against any future realized capital gains. At October 31, 2004, the Trust had an accumulated capital loss carryforward for tax purposes of $741,936 which will expire on October 31, 2012. 22 VAN KAMPEN ADVANTAGE MUNICIPAL INCOME TRUST NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2005 (UNAUDITED) continued At April 30, 2005, the cost and related gross unrealized appreciation and depreciation are as follows: Cost of investments for tax purposes........................ $474,267,072 ============ Gross tax unrealized appreciation........................... $ 34,966,963 Gross tax unrealized depreciation........................... (124,376) ------------ Net tax unrealized appreciation on investments.............. $ 34,824,587 ============
E. DISTRIBUTION OF INCOME AND GAINS The Trust declares and pays monthly dividends from net investment income to common shareholders. Net realized gains, if any, are distributed annually on a pro rata basis to common and preferred shareholders. Distributions from net realized gains for book purposes may include short-term capital gains, which are included as ordinary income for tax purposes. The tax character of distributions paid during the year ended October 31, 2004 was as follows: Distributions paid from: Ordinary income........................................... $ 427,997 Long-term capital gain.................................... 1,542,823 ---------- $1,970,820 ==========
As of October 31, 2004, the components of distributable earnings on a tax basis were as follows: Undistributed ordinary income............................... $325,308
Net realized gains or losses differ for financial reporting and tax purposes primarily as a result of the deferral of losses relating to wash sale transactions. 2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES Under the terms of the Trust's Investment Advisory Agreement, Van Kampen Asset Management (the "Adviser") provides investment advice and facilities to the Trust for an annual fee payable monthly of .55% of the average daily net assets of the Trust. Effective November 1, 2004, the investment advisory fee was reduced from .60% to .55%. For the six months ended April 30, 2005, the Trust recognized expenses of approximately $10,700 representing legal services provided by Skadden, Arps, Slate, Meagher & Flom LLP, of which a trustee of the Trust is a partner of such firm and he and his law firm provide legal services as legal counsel to the Trust. Under separate Accounting Services and Legal Services agreements, the Adviser provides accounting and legal services to the Trust. The Adviser allocates the cost of such services to each trust. For the six months ended April 30, 2005, the Trust recognized expenses of approximately $28,000 representing Van Kampen Investments Inc.'s or its affiliates' (collectively "Van Kampen") cost of providing accounting and legal services to the Trust, which are reported as part of "Other" and "Legal" expenses, respectively, on the Statement of Operations. 23 VAN KAMPEN ADVANTAGE MUNICIPAL INCOME TRUST NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2005 (UNAUDITED) continued Certain officers and trustees of the Trust are also officers and directors of Van Kampen. The Trust does not compensate its officers or trustees who are also officers of Van Kampen. The Trust provides deferred compensation and retirement plans for its trustees who are not officers of Van Kampen. Under the deferred compensation plan, trustees may elect to defer all or a portion of their compensation to a later date. Benefits under the retirement plan are payable upon retirement for a ten-year period and are based upon each trustee's years of service to the Trust. The maximum annual benefit per trustee under the plan is $2,500. 3. INVESTMENT TRANSACTIONS During the period, the cost of purchases and proceeds from sales of investments, excluding short-term investments, were $86,995,444 and $82,932,475, respectively. 4. DERIVATIVE FINANCIAL INSTRUMENTS A derivative financial instrument in very general terms refers to a security whose value is "derived" from the value of an underlying asset, reference rate or index. The Trust may invest up to 15% of its net assets in "inverse floating rate obligations." The inverse floating rate obligations in which the Trust may invest are typically created through a division of a fixed-rate municipal obligation into two separate instruments, a short-term obligation and a long-term obligation. The interest rate on the short-term obligation is set at periodic auctions. The interest rate on the long-term obligation which the Trust may purchase is the rate the issuer would have paid on the fixed-income obligation, (i) plus the difference between such fixed rate and the rate on the short-term obligation, if the short-term rate is lower than the fixed rate; or (ii) minus such difference if the interest rate on the short-term obligation is higher than the fixed rate. These securities have varying degrees of liquidity and the market value of such securities generally will fluctuate in response to changes in market rates of interest to a greater extent than the value of an equal principal amount of a fixed rate security having similar credit quality, redemption provisions and maturity. These securities tend to underperform the market for fixed rate bonds in a rising interest rate environment, but tend to outperform the market for fixed rate bonds when interest rates decline or remain relatively stable. Although volatile, inverse floating rate obligations typically offer the potential for yields exceeding the yields available on fixed rate bonds with comparable credit quality, coupon, call provisions and maturity. These securities usually permit the investor to convert the floating rate security counterpart to a fixed rate (normally adjusted downward), and this optional conversion feature may provide a partial hedge against rising rates if exercised at an opportune time. In order to seek to manage the interest rate exposure of the Trust's portfolio in a changing interest rate environment, the Trust may purchase or sell financial futures contracts or engage in transactions involving interest rate swaps, caps, floors or collars. The Trust expects to enter into these transactions primarily as a hedge against anticipated interest rate or fixed-income market changes, for duration management or for risk management purposes, but may also enter into these transactions to generate additional income. All of the Trust's portfolio holdings, including derivative instruments, are marked to market each day with the change in value reflected in the 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 24 VAN KAMPEN ADVANTAGE MUNICIPAL INCOME TRUST NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2005 (UNAUDITED) continued until the disposal of the security underlying the futures contract. Risks may arise as a result of the potential inability of the counterparties to meet the terms of their contracts. During the period, the Trust invested in futures contracts, a type of derivative. A futures contract is an agreement involving the delivery of a particular asset on a specified future date at an agreed upon price. The Trust generally invests in exchange traded futures contracts on U.S. Treasury Bonds and Notes and typically closes the contract prior to the delivery date. Upon entering into futures contracts, the Trust maintains, in a segregated account with its custodian, an amount of cash or liquid securities with a value equal to a percentage of the contract amount with either a future 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 April 30, 2005, were as follows:
CONTRACTS Outstanding at October 31, 2004............................. 448 Futures Opened.............................................. 2,258 Futures Closed.............................................. (1,579) ------ Outstanding at April 30, 2005............................... 1,127 ======
The futures contracts outstanding as of April 30, 2005, and the descriptions and unrealized appreciation/depreciation are as follows:
UNREALIZED APPRECIATION/ CONTRACTS DEPRECIATION SHORT CONTRACTS: U.S. Treasury Notes 5-Year Futures June 2005 (Current Notional Value of $108,453 per contract).................. 1,127 $(958,804) ===== =========
5. PREFERRED SHARES The Trust has outstanding 7,600 Auction Preferred Shares ("APS") in four series. Series A, B and C each contain 2,000 shares while Series D contains 1,600 shares. Dividends are cumulative and the dividend rate is reset every 28 days through an auction process. The average rate in effect on April 30, 2005 was 2.558%. During the six months ended April 30, 2005, the rates ranged from 1.450% to 2.950%. The Trust pays annual fees equivalent to .25% of the preferred share liquidation value for the remarketing efforts associated with the preferred auctions. These fees are included as a component of "Preferred Share Maintenance" expense on the Statement of Operations. The APS are redeemable at the option of the Trust in whole or in part at the liquidation value of $25,000 per share plus accumulated and unpaid dividends. The Trust is subject to 25 VAN KAMPEN ADVANTAGE MUNICIPAL INCOME TRUST NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2005 (UNAUDITED) continued certain asset coverage tests and the APS are subject to mandatory redemption if the tests are not met. 6. INDEMNIFICATIONS The Trust enters into contracts that contain a variety of indemnifications. The Trust's maximum exposure under these arrangements is unknown. However, the Trust has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote. 26 VAN KAMPEN ADVANTAGE MUNICIPAL INCOME TRUST BOARD OF TRUSTEES, OFFICERS AND IMPORTANT ADDRESSES BOARD OF TRUSTEES DAVID C. ARCH JERRY D. CHOATE ROD DAMMEYER LINDA HUTTON HEAGY R. CRAIG KENNEDY HOWARD J KERR MITCHELL M. MERIN* JACK E. NELSON RICHARD F. POWERS, III* HUGO F. SONNENSCHEIN WAYNE W. WHALEN* - Chairman SUZANNE H. WOOLSEY OFFICERS MITCHELL M. MERIN President and Chief Executive Officer RONALD E. ROBISON Executive Vice President and Principal Executive Officer JOSEPH J. MCALINDEN Executive Vice President and Chief Investment Officer AMY R. DOBERMAN Vice President STEFANIE V. CHANG Vice President and Secretary JOHN L. SULLIVAN Chief Compliance Officer JAMES W. GARRETT Chief Financial Officer and Treasurer INVESTMENT ADVISER VAN KAMPEN ASSET MANAGEMENT 1221 Avenue of the Americas New York, New York 10020 CUSTODIAN STATE STREET BANK AND TRUST COMPANY 225 Franklin Street P.O. Box 1713 Boston, Massachusetts 02110 TRANSFER AGENT EQUISERVE TRUST COMPANY, N. A. P.O. Box 43011 Providence, Rhode Island 02940-3011 LEGAL COUNSEL SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP 333 West Wacker Drive Chicago, Illinois 60606 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM DELOITTE & TOUCHE LLP 180 North Stetson Avenue Chicago, Illinois 60601 * "Interested persons" of the Trust, as defined in the Investment Company Act of 1940, as amended. 27 VAN KAMPEN AN IMPORTANT NOTICE CONCERNING OUR U.S. PRIVACY POLICY We are required by federal law to provide you with a copy of our Privacy Policy annually. The following Policy applies to current and former individual clients of Van Kampen Investments Inc., Van Kampen Asset Management, Van Kampen Advisors Inc., Van Kampen Funds Inc., Van Kampen Investor Services Inc. and Van Kampen Exchange Corp., as well as current and former individual investors in Van Kampen mutual funds, unit investment trusts, and related companies. This Policy is not applicable to partnerships, corporations, trusts or other non-individual clients or account holders, nor is this Policy applicable to individuals who are either beneficiaries of a trust for which we serve as trustee or participants in an employee benefit plan administered or advised by us. This Policy is, however, applicable to individuals who select us to be a custodian of securities or assets in individual retirement accounts, 401(k) accounts, 529 Educational Savings Accounts, accounts subject to the Uniform Gifts to Minors Act, or similar accounts. Please note that we may amend this Policy at any time, and will inform you of any changes to this Policy as required by law. WE RESPECT YOUR PRIVACY We appreciate that you have provided us with your personal financial information. We strive to maintain the privacy of such information while we help you achieve your financial objectives. This Policy describes what non-public personal information we collect about you, why we collect it, and when we may share it with others. We hope this Policy will help you understand how we collect and share non-public personal information that we gather about you. Throughout this Policy, we refer to the non-public information that personally identifies you or your accounts as "personal information." 1. WHAT PERSONAL INFORMATION DO WE COLLECT ABOUT YOU? To serve you better and manage our business, it is important that we collect and maintain accurate information about you. We may obtain this information from applications and other forms you submit to us, from your dealings with us, from consumer reporting agencies, from our Web sites and from third parties and other sources. For example: -- We may collect information such as your name, address, e-mail address, telephone/fax numbers, assets, income and investment objectives through applications and other forms you submit to us. -- We may obtain information about account balances, your use of account(s) and the types of products and services you prefer to receive from us through your dealings and transactions with us and other sources. -- We may obtain information about your creditworthiness and credit history from consumer reporting agencies. -- We may collect background information from and through third-party vendors to verify representations you have made and to comply with various regulatory requirements. -- If you interact with us through our public and private Web sites, we may collect information that you provide directly through online communications (such as an e-mail address). We may also collect information about your Internet service provider, your domain name, your computer's operating system and Web browser, your use of our Web sites and your product and service preferences, through the use (continued on back) VAN KAMPEN AN IMPORTANT NOTICE CONCERNING OUR U.S. PRIVACY POLICY continued of "cookies." "Cookies" recognize your computer each time you return to one of our sites, and help to improve our sites' content and personalize your experience on our sites by, for example, suggesting offerings that may interest you. Please consult the Terms of Use of these sites for more details on our use of cookies. 2. WHEN DO WE DISCLOSE PERSONAL INFORMATION WE COLLECT ABOUT YOU? To provide you with the products and services you request, to serve you better and to manage our business, we may disclose personal information we collect about you to our affiliated companies and to non-affiliated third parties as required or permitted by law. A. INFORMATION WE DISCLOSE TO OUR AFFILIATED COMPANIES. We do not disclose personal information that we collect about you to our affiliated companies except to enable them to provide services on our behalf or as otherwise required or permitted by law. B. INFORMATION WE DISCLOSE TO THIRD PARTIES. We do not disclose personal information that we collect about you to non-affiliated third parties except to enable them to provide services on our behalf, to perform joint marketing agreements with other financial institutions, or as otherwise required or permitted by law. For example, some instances where we may disclose information about you to non-affiliated third parties include: for servicing and processing transactions, to offer our own products and services, to protect against fraud, for institutional risk control, to respond to judicial process or to perform services on our behalf. When we share personal information with these companies, they are required to limit their use of personal information to the particular purpose for which it was shared and they are not allowed to share personal information with others except to fulfill that limited purpose. 3. HOW DO WE PROTECT THE SECURITY AND CONFIDENTIALITY OF PERSONAL INFORMATION WE COLLECT ABOUT YOU? We maintain physical, electronic and procedural security measures to help safeguard the personal information we collect about you. We have internal policies governing the proper handling of client information. Third parties that provide support or marketing services on our behalf may also receive personal information, and we require them to adhere to confidentiality standards with respect to such information. Van Kampen Funds Inc. 1 Parkview Plaza, P.O. Box 5555 Oakbrook Terrace, IL 60181-5555 www.vankampen.com Copyright (C)2005 Van Kampen Funds Inc. All rights reserved. Member NASD/SIPC. VKA SAR 6/05 RN05-01312P-Y04/05 (VAN KAMPEN INVESTMENTS LOGO) Item 2. Code of Ethics. Not applicable for semi-annual reports. Item 3. Audit Committee Financial Expert. Not applicable for semi-annual reports. Item 4. Principal Accountant Fees and Services. Not applicable for semi-annual reports. Item 5. Audit Committee of Listed Registrants. Not applicable for semi-annual reports. Item 6. Schedule of Investments. Please refer to Item #1. Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. Not applicable. Item 8. Portfolio Managers of Closed-End Management Investment Companies. Not applicable. Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. Not applicable. Item 10. Submission of Matters to a Vote of Security Holders. Not applicable. Item 11. Controls and Procedures (a) The Trust's principal executive officer and principal financial officer have concluded that the Trust's disclosure controls and procedures are sufficient to ensure that information required to be disclosed by the Trust in this Form N-CSR was recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, based upon such officers' evaluation of these controls and procedures as of a date within 90 days of the filing date of the report. (b) There were no changes in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. Item 12. Exhibits. (a) Code of Ethics -- Not applicable for semi-annual reports. (b)(1) A certification for the Principal Executive Officer of the registrant is attached hereto as part of EX-99.CERT. (b)(2) A certification for the Principal Financial Officer of the registrant is attached hereto as part of EX-99.CERT. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (Registrant) Van Kampen Advantage Municipal Income Trust By: /s/ Ronald E. Robison ---------------------- Name: Ronald E. Robison Title: Principal Executive Officer Date: June 16, 2005 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By: /s/ Ronald E. Robison --------------------- Name: Ronald E. Robison Title: Principal Executive Officer Date: June 16, 2005 By: /s/ James W. Garrett -------------------- Name: James W. Garrett Title: Principal Financial Officer Date: June 16, 2005