UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-6567
Van Kampen Municipal Opportunity 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: 10/31/05
Item 1. Report to Shareholders
The Trust's 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
Municipal Opportunity Trust performed during the annual 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 October 31, 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 10/31/05
MUNICIPAL OPPORTUNITY TRUST
SYMBOL: VMO
---------------------------------------------------------
AVERAGE ANNUAL BASED ON BASED ON
TOTAL RETURNS NAV MARKET PRICE
Since Inception (4/24/92) 7.91% 6.76%
10-year 7.66 7.78
5-year 8.40 9.13
1-year 4.17 0.55
---------------------------------------------------------
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 and preferred shares, 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 12-MONTH PERIOD ENDED OCTOBER 31, 2005
Van Kampen Municipal Opportunity Trust is managed by the Adviser's Municipal
Fixed Income team.(1) Current members include Dennis Pietrzak, Executive
Director; Robert Wimmel, Vice President; and John Reynoldson, Executive
Director.
MARKET CONDITIONS
During the 12-month period ended October 31, 2005, the economy grew at a good
pace, with reasonable gains in employment and sustained strength in consumer
spending. Although oil prices soared, core inflation (which excludes food and
energy) remained relatively benign. Continuing with the course it began in June
of 2004, the Federal Open Market Committee (the Fed) raised the federal funds
target rate eight times during the period. Through a "measured pace" of 25 basis
point increments, the Fed brought the rate to 3.75 percent at the end of the
reporting period. While the yields of short- and intermediate-term bonds moved
upward in concert with the Fed's actions, the yields of long-term bonds ended
the period virtually unchanged. As a result, the yield curve (which charts the
difference between short-term and long-term rates) flattened.
Against this backdrop, total returns across the municipal bond market varied
dramatically, with long maturity bonds outperforming short-term issues by a wide
margin. As investors sought income in an environment of historically low rates,
BBB rated and non-rated bonds significantly outperformed high grade debt, and
credit spreads tightened markedly. Strong and steady flows of new cash into high
yield municipal funds added to the demand for lower rated issues.
Sectors with a preponderance of lower rated credits performed with particular
strength. Tobacco revenue bonds were by far the best performing sector,
supported by overall spread tightening as well as by increasing investor
confidence regarding the extent of tobacco companies' future litigation risk.
Health care bonds (hospitals and long-term care facilities) also fared well,
boosted by strong investor demand.
Municipal bond issuance remained robust in 2005, with $336 billion of debt
brought to market in the first 10 months of the year, a pace on track to beat
the record issuance of 2003. Refunding activity represented a good portion of
this activity, as issuers sought to refinance higher cost debt at low prevailing
interest rates. Bonds backed by insurance dominated issuance and increased their
market penetration to nearly 60 percent.
(1)Team members may change without notice from time to 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 and preferred shares, 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.
TOTAL RETURNS FOR THE 12-MONTH PERIOD ENDED OCTOBER 31, 2005
----------------------------------------------------------
BASED ON BASED ON LEHMAN BROTHERS
NAV MARKET PRICE MUNICIPAL BOND INDEX
4.17% 0.55% 2.54%
----------------------------------------------------------
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.
Throughout the period, we followed our long-standing practice of trading between
liquid, high quality securities which our analysis identified as compelling
total return opportunities. Our strategy involves buying these bonds when we
believe they are attractively valued, and selling them when they reach our
return targets. We then invest the proceeds into bonds with greater potential
for future total return.
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, thereby tempering its benefits.
We sought to position the trust for rising rates, a strategy which proved
beneficial during the period. To limit the trust's exposure to bonds that would
be most vulnerable to rising short-term rates, we sold shorter-term bonds. Pre-
refunded issues also figured prominently among our sales. As refinancing
activity surged, we sold many bonds which had appreciated significantly during
the time the trust had held them. We re-deployed these assets, as well as
proceeds from bonds that had been called, into the 20- to 40-year segment of the
market. We generally favored bonds with premium (above-market) coupons and more
defensive interest rate characteristics. As the yield curve continued to
flatten, these longer-maturity bonds contributed strong performance.
Additionally, we kept the overall duration of the trust defensively positioned.
(Duration is a measure of interest rate sensitivity.)
3
At the end of the period, bonds rated AA or higher accounted for 76 percent of
holdings. Within the context of our quality focused approach, we sought
opportunities to enhance the trust's yield. For example, after thorough
research, we initiated a stake in long-term investment-grade tobacco revenue
bonds. Overall, we increased the trust's exposure to BBB rated securities by 7
percentage points to nearly 10 percent at the end of the period. Meanwhile,
exposure to AAA rated securities declined from 80 percent to 70 percent at the
end of the reporting period.
The trust remained well diversified across the major sectors of the municipal
market. At the close of the period, the largest sector representations were
hospital, airport, wholesale electric, general purpose and higher education.
There is no guarantee that any sectors mentioned will continue to perform well
or that securities in such sectors will be held by the Trust in the future.
CHANGES IN INVESTMENT POLICIES
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 recently approved a change in its investment policies to allow the
Trust to invest up to 15% of its net assets in "inverse floating rate
obligations." Floating rate obligations bear rates of interest that are adjusted
periodically to reflect changes in market rates of interest. Inverse floating
rate obligations have rates that vary inversely with changes in market rates of
interest. 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.
4
RATINGS ALLOCATION AS OF 10/31/05
AAA/Aaa 69.9%
AA/Aa 6.0
A/A 12.6
BBB/Baa 9.8
B/B 0.4
NR 1.3
-----
100.0%
TOP 5 SECTORS AS OF 10/31/05
Hospital 16.2%
Airport 13.2
Wholesale Electric 13.1
General Purpose 10.3
Higher Education 6.6
SUMMARY OF INVESTMENTS BY STATE CLASSIFICATION AS OF 10/31/05
California 14.8%
Texas 11.7
New Jersey 9.6
New York 8.5
Washington 5.7
North Carolina 4.9
Pennsylvania 4.4
Massachusetts 3.6
Nevada 3.1
Georgia 2.6
Indiana 2.2
Illinois 2.0
West Virginia 2.0
Michigan 1.9
Florida 1.8
Missouri 1.7
Colorado 1.7
Oklahoma 1.7
Connecticut 1.4
Ohio 1.3
South Carolina 1.3
District of Columbia 1.3
Louisiana 1.2
Maryland 1.2
Alabama 1.2
Arizona 1.0
Kentucky 0.9
Minnesota 0.8
Oregon 0.7
Vermont 0.6
Tennessee 0.6
Iowa 0.5
Virginia 0.5
Wisconsin 0.4
South Dakota 0.4
(continued on next page)
5
SUMMARY OF INVESTMENTS BY STATE CLASSIFICATION AS OF 10/31/05
(continued from previous page)
Puerto Rico 0.3
Mississippi 0.2
New Hampshire 0.2
North Dakota 0.1
-----
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 investments. Sectors are as a
percentage of long-term investments. Securities are classified by sectors that
represent broad groupings of related industries. Van Kampen is a wholly owned
subsidiary of a global securities firm which is engaged in a wide range of
financial services including, for example, securities trading and brokerage
activities, investment banking, research and analysis, financing and financial
advisory services. Rating allocations based upon ratings as issued by Standard
and Poor's and Moody's, respectively.
6
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 (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 (800) 847-2424.
7
PROXY VOTING POLICY AND PROCEDURES AND PROXY VOTING RECORD
You may obtain a copy of the Trust'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 trust voted proxies relating
to portfolio securities during the most recent twelve-month period ended
June 30 by visiting our Web site at www.vankampen.com. This information
is also available on the Securities and Exchange Commission's Web site at
http://www.sec.gov.
8
Investment Advisory Agreement Approval
Both the Investment Company Act of 1940 and the terms of the Fund's investment
advisory agreement require that the investment advisory agreement between the
Fund and its investment adviser be approved annually both by a majority of the
Board of Trustees and by a majority of the independent trustees voting
separately.
On May 25, 2005, the Board of Trustees, and the independent trustees voting
separately, determined that the terms of the investment advisory agreement are
fair and reasonable and approved the continuance of the investment advisory
contract as being in the best interests of the Fund and its shareholders. In
making its determination, the Board of Trustees considered materials that were
specifically prepared by the investment adviser at the request of the Board and
Fund counsel, and by an independent provider of investment company data
contracted to assist the Board, relating to the contract review process. The
Board also considered information received periodically about the portfolio,
performance, the investment strategy, portfolio management team and fees and
expenses of the Fund. Finally, the Board considered materials it had received in
approving a change in the advisory fee rate effective November 1, 2004 and
materials it had received in approving a reorganization of the Fund. The Board
of Trustees considered the contract over a period of several months and the
non-management trustees held sessions both with the investment adviser and
separate from the investment adviser in reviewing and considering the contract.
In approving the investment advisory agreement, the Board of Trustees
considered, among other things, the nature, extent and quality of the services
provided by the investment adviser, the performance, fees and expenses of the
Fund compared to other similar funds and other products, the investment
adviser's expenses in providing the services and the profitability of the
investment adviser and its affiliated companies. The Board of Trustees
considered the extent to which any economies of scale experienced by the
investment adviser are shared with the Fund's shareholders, and the propriety of
breakpoints in the Fund's investment advisory fee schedule. The Board of
Trustees considered comparative advisory fees of the Fund and other investment
companies and/or other products at different asset levels, and considered the
trends in the industry. The Board of Trustees evaluated other benefits the
investment adviser and its affiliates derive from their relationship with the
Fund. The Board of Trustees reviewed information about the foregoing factors and
considered changes, if any, in such information since its previous approval. The
Board of Trustees discussed the financial strength of the investment adviser and
its affiliated companies and the capability of the personnel of the investment
adviser, and specifically the strength and background of its portfolio
management personnel. The Board of Trustees reviewed the statutory and
regulatory requirements for approval and disclosure of investment advisory
agreements. The Board of Trustees, including the independent trustees, evaluated
all of the foregoing and does not believe any single factor or group of
9
factors control or dominate the review process, and, after considering all
factors together, has determined, in the exercise of its business judgment, that
approval of the investment advisory agreement is in the best interests of the
Fund and its shareholders. The following summary provides more detail on certain
matters considered but does not detail all matters considered.
Nature, Extent and Quality of the Services Provided. On a regular basis, the
Board of Trustees considers the roles and responsibilities of the investment
adviser as a whole and for those specific portfolio management, support and
trading functions servicing the Fund. The trustees discuss with the investment
adviser the resources available and used in managing the Fund. The trustees also
discuss certain other services which are provided on a cost-reimbursement basis
by the investment adviser or its affiliates to the Van Kampen funds including
certain accounting, administrative and legal services. The Board has determined
that the nature, extent and quality of the services provided by the investment
adviser support its decision to approve the investment advisory contract.
Performance, Fees and Expenses of the Fund. On a regular basis, the Board of
Trustees reviews the performance, fees and expenses of the Fund compared to its
peers and to appropriate benchmarks. In addition, the Board spends more focused
time on the performance of the Fund and other funds in the Van Kampen complex,
paying specific attention to underperforming funds. The trustees discuss with
the investment adviser the performance goals and the actual results achieved in
managing the Fund. When considering a fund's performance, the trustees and the
investment adviser place emphasis on trends and longer-term returns (focusing on
one-year, three-year and five-year performance with special attention to
three-year performance) and, when a fund's weighted performance is under the
fund's benchmark, they discuss the causes and where necessary seek to make
specific changes to investment strategy or investment personnel. The Fund
discloses more information about its performance elsewhere in this report. The
trustees discuss with the investment adviser the level of advisory fees for this
Fund relative to comparable funds and other products advised by the adviser and
others in the marketplace. The trustees review not only the advisory fees but
other fees and expenses (whether paid to the adviser, its affiliates or others)
and the Fund's overall expense ratio. The Board has determined that the
performance, fees and expenses of the Fund support its decision to approve the
investment advisory contract.
Investment Adviser's Expenses in Providing the Service and Profitability. At
least annually, the trustees review the investment adviser's expenses in
providing services to the Fund and other funds advised by the investment adviser
and the profitability of the investment adviser. These profitability reports are
put together by the investment adviser with the oversight of a special ad hoc
committee of the Board. The trustees discuss with the investment adviser its
revenues and expenses, including among other things, revenues for advisory
services, portfolio management-related expenses, revenue sharing arrangement
10
costs and allocated expenses both on an aggregate basis and per fund. The Board
has determined that the analysis of the investment adviser's expenses and
profitability support its decision to approve the investment advisory contract.
Economies of Scale. On a regular basis, the Board of Trustees considers the size
of the Fund and how that relates to the Fund's expense ratio and particularly
the Fund's advisory fee rate. In conjunction with its review of the investment
adviser's profitability, the trustees discuss with the investment adviser how
more (or less) assets can affect the efficiency or effectiveness of managing the
Fund's portfolio and whether the advisory fee level is appropriate relative to
current asset levels and/or whether the advisory fee structure reflects
economies of scale as asset levels change. The Board has determined that its
review of the actual and potential economies of scale of the Fund support its
decision to approve the investment advisory contract.
Other Benefits of the Relationship. On a regular basis, the Board of Trustees
considers other benefits to the investment adviser and its affiliates derived
from its relationship with the Fund and other funds advised by the investment
adviser. These benefits include, among other things, fees for transfer agency
services provided to the funds, in certain cases research received by the
adviser generated from commission dollars spent on funds' portfolio trading, and
in certain cases distribution or service related fees related to funds' sales.
The trustees review with the investment adviser each of these arrangements and
the reasonableness of its costs relative to the services performed. The Board
has determined that the other benefits received by the investment adviser or its
affiliates support its decision to approve the investment advisory contract.
11
VAN KAMPEN MUNICIPAL OPPORTUNITY TRUST
PORTFOLIO OF INVESTMENTS -- OCTOBER 31, 2005
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
---------------------------------------------------------------------------------------------
MUNICIPAL BONDS 157.7%
ALABAMA 1.8%
$ 2,000 Jefferson Cnty, AL Ltd Oblig Sch Wt Ser A....... 5.250% 01/01/23 $ 2,093,080
2,375 Marshall Cnty, AL Hlthcare Ser C................ 6.000 01/01/32 2,517,120
5 Mobile, AL Indl Dev Brd Solid Waste Disp Rev
Mobile Energy Svc Co Proj Rfdg.................. 6.950 01/01/20 471
-------------
4,610,671
-------------
ARIZONA 1.6%
1,500 Maricopa Cnty, AZ Stad Dist Rfdg (AMBAC Insd)... 5.375 06/01/19 1,625,055
2,500 University Med Ctr Corp AZ Hosp Rev (a)......... 5.000 07/01/35 2,481,100
-------------
4,106,155
-------------
CALIFORNIA 23.3%
1,050 California Cnty, CA Tob Securitization Agy Asset
Bkd Merced Cnty Ser A Rfdg...................... 5.125 06/01/38 1,014,478
2,000 California Cnty, CA Tob Securitization Agy Asset
Bkd Sonoma Cnty Corp Rfdg....................... 5.125 06/01/38 1,932,340
2,000 California Edl Fac Auth Rev Occidental College
Ser A (MBIA Insd)............................... 5.000 10/01/30 2,076,780
2,500 California Edl Fac Auth Rev Pomona College Ser
A............................................... 5.000 07/01/45 2,567,350
7,500 California Hlth Fac Fin Auth Rev Cedars Sinai
Med Ctr Rfdg.................................... 5.000 11/15/34 7,560,525
1,000 California Pollutn Ctl Fin Auth Solid Waste Disp
Rev Waste Mgmt Inc Proj Ser B (AMT)............. 5.000 07/01/27 985,620
30 California Rural Home Mtg Fin Auth Single Family
Mtg Rev Ser C (AMT) (GNMA Collateralized)....... 7.800 02/01/28 30,369
5,500 California St Dept Wtr Res Pwr Ser A
(Prerefunded @ 05/01/12) (AMBAC Insd)........... 5.500 05/01/16 6,082,450
2,000 California St Dept Wtr Res Pwr Ser A
(Prerefunded @ 05/01/12)........................ 5.750 05/01/17 2,200,200
3,500 California St Pub Wks Brd Lease Rev Dept
Corrections Ser C............................... 5.250 06/01/28 3,655,610
2,000 California St Pub Wks Brd Lease Rev Dept Mental
Hlth Coalinga Ser A............................. 5.000 06/01/25 2,068,320
1,250 California Statewide Cmntys Dev Auth Rev
Daughters of Charity Hlth Ser A................. 5.250 07/01/30 1,269,325
2,500 California Statewide Cmntys Dev Auth Rev Hlth
Fac Adventist Hlth Ser A........................ 5.000 03/01/30 2,502,600
1,500 California Statewide Cmntys Dev Auth Rev Hlth
Fac Adventist Hlth Ser A........................ 5.000 03/01/35 1,500,120
4,000 Foothill/Eastern Corridor Agy CA Toll Rd Rev
Conv Cap Apprec Sr Lien Ser A (Escrowed to
Maturity)....................................... 7.050 01/01/10 4,575,040
8,250 Golden St Tob Securitization Corp CA Tobacco
Settlement Rev Enhanced Asset Bkd Ser A......... 5.000 06/01/45 8,277,720
1,600 Long Beach, CA Bd Fin Auth Rev Redev Hsg & Gas
Util Fin Ser A1 (AMBAC Insd).................... 5.000 08/01/40 1,621,328
12 See Notes to Financial Statements
VAN KAMPEN MUNICIPAL OPPORTUNITY TRUST
PORTFOLIO OF INVESTMENTS -- OCTOBER 31, 2005 continued
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
---------------------------------------------------------------------------------------------
CALIFORNIA (CONTINUED)
$ 1,500 Los Angeles Cnty, CA Metro Tran Auth Sales Tax
Rev Prop C Second Tier Sr Ser A Rfdg (AMBAC
Insd)........................................... 5.000% 07/01/23 $ 1,548,180
7,500 San Jose, CA Fin Auth Lease Rev Civic Ctr Proj
Ser B (AMBAC Insd).............................. 5.000 06/01/32 7,656,075
-------------
59,124,430
-------------
COLORADO 2.7%
1,250 Colorado Hlth Fac Auth Rev Covenant Retirement
Cmntys Inc...................................... 5.000 12/01/35 1,219,550
1,000 Colorado Hlth Fac Auth Rev Hosp Portercare
Adventist Hlth (Prerefunded @ 11/15/11)......... 6.500 11/15/31 1,155,350
1,000 Colorado Hsg Fin Auth Multi-Family Hsg Ins Mtg
Ser B2 (AMT) (FHA Gtd).......................... 5.800 10/01/28 1,024,490
101 Colorado Hsg Fin Auth Single Family Pgm Sr Ser
A2 (AMT)........................................ 7.250 05/01/27 102,712
60 Colorado Hsg Fin Auth Single Family Pgm Sr Ser
C1 (AMT)........................................ 7.550 11/01/27 61,079
1,000 Denver, CO City & Cnty Arpt Rev Ser B (AMT)
(MBIA Insd)..................................... 6.250 11/15/07 1,047,460
1,005 Greeley, CO Multi-Family Rev Hsg Mtg Creek Stone
(AMT) (FHA Gtd)................................. 5.950 07/01/28 1,032,788
1,000 Highlands Ranch Metro Dist No 2 CO Rfdg (FSA
Insd)........................................... 6.500 06/15/11 1,141,880
-------------
6,785,309
-------------
CONNECTICUT 2.1%
3,250 Connecticut St Spl Oblig Pkg Rev Bradley Intl
Arpt Ser A (AMT) (ACA Insd)..................... 6.600 07/01/24 3,525,275
1,000 Mashantucket Western Pequot Tribe CT Spl Rev Ser
A, 144A--Private Placement (b).................. 6.400 09/01/11 1,039,420
840 Mashantucket Western Pequot Tribe CT Spl Rev Ser
A, 144A--Private Placement (Escrowed to
Maturity) (b)................................... 6.500 09/01/06 864,007
-------------
5,428,702
-------------
DISTRICT OF COLUMBIA 2.0%
5,000 Metropolitan Washington DC Arpt Auth Sys Ser A
(AMT) (FGIC Insd)............................... 5.250 10/01/32 5,139,800
-------------
FLORIDA 2.8%
230 Escambia Cnty, FL Hlth Fac Auth Rev FL Hlthcare
Fac Ln VHA Pgm (AMBAC Insd)..................... 5.950 07/01/20 244,994
1,000 Highlands Cnty, FL Hlth Fac Auth Rev Hosp
Adventist Hlth Ser D............................ 5.000 11/15/35 1,005,470
1,000 Lakeland, FL Hosp Sys Rev Lakeland Regl Hlth
Sys............................................. 5.500 11/15/32 1,035,750
See Notes to Financial Statements 13
VAN KAMPEN MUNICIPAL OPPORTUNITY TRUST
PORTFOLIO OF INVESTMENTS -- OCTOBER 31, 2005 continued
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
---------------------------------------------------------------------------------------------
FLORIDA (CONTINUED)
$ 2,100 Miami-Dade Cnty, FL Aviation Miami Intl Arpt
(AMT) (FGIC Insd)............................... 5.375% 10/01/27 $ 2,189,586
215 North Broward, FL Hosp Dist Rev Impt............ 6.000 01/15/31 227,758
2,160 North Broward, FL Hosp Dist Rev Impt
(Prerefunded @ 01/15/11)........................ 6.000 01/15/31 2,412,288
-------------
7,115,846
-------------
GEORGIA 4.1%
1,677 Fulton Cnty, GA Lease Rev (Acquired 12/23/1994,
Cost $1,676,876) (c)............................ 7.250 06/15/10 1,726,830
7,000 Georgia Muni Elec Auth Pwr Rev Ser A (MBIA
Insd)........................................... 6.500 01/01/20 8,591,240
-------------
10,318,070
-------------
ILLINOIS 3.2%
35 Chicago, IL Single Family Mtg Rev Ser A (AMT)
(GNMA Collateralized)........................... 7.000 09/01/27 35,135
20 Chicago, IL Single Family Mtg Rev Ser B (AMT)
(GNMA Collateralized)........................... 7.625 09/01/27 20,250
3,000 Illinois Fin Auth Rev Northwestern Mem Hosp Ser
A............................................... 5.500 08/15/43 3,155,490
3,630 Kendall, Kane & Will Cntys, IL Cmnty Sch Dist
308 Ser B (FGIC Insd) (d)....................... 5.250 10/01/20 3,899,419
1,000 Metropolitan Pier & Expo Auth IL Dedicated St
Tax Rev McCormick Pl Expn Proj Rfdg (FGIC
Insd)........................................... 5.500 12/15/24 1,077,980
-------------
8,188,274
-------------
INDIANA 3.5%
3,270 Allen Cnty, IN War Mem Coliseum Ser A (AMBAC
Insd) (d)....................................... 5.500 11/01/16 3,575,647
4,120 Indiana Hlth Fac Fin Auth Hosp Rev Cmnty Proj
Ser A (AMBAC Insd).............................. 5.000 05/01/35 4,220,198
1,000 Indiana St Dev Fin Auth Rev Exempt Fac Conv Rfdg
(AMT)........................................... 5.950 08/01/30 1,021,980
-------------
8,817,825
-------------
IOWA 0.8%
1,890 Des Moines, IA Pub Pkg Sys Rev Ser A (FGIC Insd)
(d)............................................. 5.750 06/01/17 2,055,640
-------------
KENTUCKY 1.4%
1,475 Kenton Cnty, KY Arpt Brd Rev Cincinnati/Northn
KY Intl Arpt Ser A Rfdg (AMT) (MBIA Insd)....... 6.200 03/01/08 1,560,550
1,995 Kentucky Hsg Corp Hsg Rev Ser F (AMT) (FNMA
Collateralized)................................. 5.450 01/01/32 2,040,366
-------------
3,600,916
-------------
14 See Notes to Financial Statements
VAN KAMPEN MUNICIPAL OPPORTUNITY TRUST
PORTFOLIO OF INVESTMENTS -- OCTOBER 31, 2005 continued
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
---------------------------------------------------------------------------------------------
LOUISIANA 1.8%
$ 2,500 Lafayette, LA Utils Rev (MBIA Insd)............. 5.250% 11/01/23 $ 2,646,050
1,980 Louisiana Hsg Fin Agy Rev Azalea Estates Ser A
Rfdg (AMT) (GNMA Collateralized)................ 5.375 10/20/39 2,026,510
-------------
4,672,560
-------------
MARYLAND 1.8%
1,050 Maryland St Econ Dev Corp Student Hsg Rev Univ
MD College Pk Proj.............................. 5.625 06/01/35 1,090,950
1,000 Maryland St Hlth & Higher Ed Fac Auth Rev
Medstar Hlth Rfdg............................... 5.375 08/15/24 1,041,490
2,350 Northeast, MD Waste Disp Auth Rfdg (AMT) (AMBAC
Insd)........................................... 5.500 04/01/16 2,517,343
-------------
4,649,783
-------------
MASSACHUSETTS 5.6%
2,400 Massachusetts St Dev Fin Agy Rev College
Pharmacy & Allied Hlth Ser D.................... 5.000 07/01/35 2,429,208
3,000 Massachusetts St Dev Fin Agy Semass Sys Ser A
(MBIA Insd)..................................... 5.625 01/01/16 3,259,140
1,000 Massachusetts St Hlth & Ed Fac Auth Rev Part
Hlthcare Sys Ser C.............................. 5.750 07/01/32 1,088,710
4,500 Massachusetts St Hlth & Ed Fac Auth Rev Univ of
MA Mem Issue Ser D.............................. 5.000 07/01/33 4,436,640
3,000 Massachusetts St Wtr Res Auth Gen Ser J (FSA
Insd)........................................... 5.000 08/01/32 3,073,110
-------------
14,286,808
-------------
MICHIGAN 3.0%
3,505 Detroit, MI Wtr Supply Sys Ser B (MBIA Insd)
(d)............................................. 5.250 07/01/18 3,772,467
1,500 Kent Hosp Fin Auth MI Rev Metro Hosp Proj Ser
A............................................... 6.250 07/01/40 1,617,165
2,000 Michigan St Ctf Part (Prerefunded @ 06/01/10)
(AMBAC Insd).................................... 5.500 06/01/27 2,133,220
-------------
7,522,852
-------------
MINNESOTA 1.3%
10 Chaska, MN Elec Rev Ser A....................... 6.100 10/01/30 10,931
990 Chaska, MN Elec Rev Ser A (Prerefunded @
10/01/10)....................................... 6.100 10/01/30 1,100,821
2,000 Saint Paul, MN Hsg & Redev Auth Hosp Rev Hlth
East Proj....................................... 6.000 11/15/35 2,136,760
-------------
3,248,512
-------------
MISSISSIPPI 0.4%
795 Mississippi Home Corp Single Family Rev Mtg Ser
C (AMT) (GNMA Collateralized)................... 7.600 06/01/29 803,713
325 Mississippi Home Corp Single Family Rev Mtg Ser
F (AMT) (GNMA Collateralized)................... 7.550 12/01/27 329,618
-------------
1,133,331
-------------
See Notes to Financial Statements 15
VAN KAMPEN MUNICIPAL OPPORTUNITY TRUST
PORTFOLIO OF INVESTMENTS -- OCTOBER 31, 2005 continued
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
---------------------------------------------------------------------------------------------
MISSOURI 2.7%
$ 2,150 Cape Girardeau Cnty, MO Indl Southeast MO Hosp
Assoc........................................... 5.500% 06/01/22 $ 2,216,263
1,375 Missouri St Hlth & Ed Fac Auth Rev Sr Living Fac
Lutheran Ser A.................................. 5.375 02/01/35 1,409,320
25 Saint Louis Cnty, MO Single Family Mtg Rev (MBIA
Insd)........................................... 6.900 04/01/16 25,412
3,000 Sikeston, MO Elec Rev Rfdg (MBIA Insd) (e)...... 6.200 06/01/10 3,283,380
-------------
6,934,375
-------------
NEVADA 4.9%
7,500 Clark Cnty, NV Arpt Rev Sub Lien Ser A-2 (FGIC
Insd)........................................... 5.000 07/01/36 7,676,925
3,000 Clark Cnty, NV Indl Dev Rev Southwest Gas Corp
Proj Ser A (AMT) (AMBAC Insd)................... 5.250 07/01/34 3,094,590
1,500 Reno, NV Sr Lien Retrac Reno Trans Proj (AMBAC
Insd)........................................... 5.125 06/01/32 1,543,380
-------------
12,314,895
-------------
NEW HAMPSHIRE 0.4%
845 New Hampshire Hlth & Ed Fac Univ Sys of NH
(AMBAC Insd).................................... 5.500 07/01/15 925,799
-------------
NEW JERSEY 15.1%
2,000 Garden St Preservation Tr NJ Ser A (FSA Insd)... 5.250 11/01/18 2,158,360
2,000 New Jersey Econ Dev Auth Cigarette Tax.......... 5.750 06/15/34 2,093,200
5,000 New Jersey Econ Dev Auth Mtr Veh Rev Ser A (MBIA
Insd)........................................... 5.000 07/01/22 5,248,850
20,000 New Jersey Econ Dev Auth St Contract Econ
Recovery (MBIA Insd)............................ 5.900 03/15/21 23,484,600
5,000 New Jersey St Ed Fac Auth Higher Ed Cap Impt Ser
A (AMBAC Insd).................................. 5.250 09/01/21 5,367,100
-------------
38,352,110
-------------
NEW YORK 13.4%
1,000 Erie Cnty, NY Tob Securitization Corp Asset Bkd
Ser A........................................... 5.000 06/01/38 961,890
6,000 New York City Muni Wtr Fin Auth Wtr & Swr Sys
Rev Ser D....................................... 5.000 06/15/39 6,148,920
6,000 New York City Ser A............................. 7.000 08/01/07 6,251,340
4,750 New York Cnty Tob Tr IV Settlement Pass Thru Ser
A............................................... 5.000 06/01/42 4,524,280
500 New York St Dorm Auth Rev Mental Hlth Ser A..... 5.750 08/15/12 523,495
5 New York St Dorm Auth Rev Mental Hlth Svcs Fac
Ser A (Prerefunded @ 02/15/07).................. 5.750 08/15/12 5,261
1,445 New York St Dorm Auth Rev Secd Hosp North Gen
Hosp Rfdg (MBIA Insd)........................... 5.750 02/15/17 1,610,178
2,040 New York St Dorm Auth Rev Secd Hosp North Gen
Hosp Rfdg....................................... 5.750 02/15/18 2,237,309
16 See Notes to Financial Statements
VAN KAMPEN MUNICIPAL OPPORTUNITY TRUST
PORTFOLIO OF INVESTMENTS -- OCTOBER 31, 2005 continued
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
---------------------------------------------------------------------------------------------
NEW YORK (CONTINUED)
$ 1,500 New York St Dorm Auth Rev Upstate Cmnty Colleges
Ser B........................................... 5.250% 07/01/20 $ 1,589,295
1,000 New York St Dorm Auth Rev Upstate Cmnty Colleges
Ser B........................................... 5.250 07/01/21 1,058,050
3,780 New York St Mtg Agy Rev Ser 101 (AMT)........... 5.400 04/01/32 3,867,923
4,000 Port Auth NY & NJ Spl Oblig Rev Spl Proj JFK
Intl Arpt Terminal 6 (AMT) (MBIA Insd).......... 5.750 12/01/22 4,237,200
1,000 Westchester, NY Tob Asset Securitization Corp... 5.125 06/01/38 990,570
-------------
34,005,711
-------------
NORTH CAROLINA 7.8%
2,500 North Carolina Cap Fac Fin Agy Rev Duke Univ
Proj Ser A...................................... 5.000 10/01/41 2,561,800
1,500 North Carolina Eastn Muni Pwr Agy Pwr Sys Rev
Ser D........................................... 6.700 01/01/19 1,654,785
11,000 North Carolina Muni Pwr Agy No 1 Catawba Elec
Rev Rfdg (MBIA Insd)............................ 6.000 01/01/12 12,341,120
3,000 North Carolina Muni Pwr Agy Ser A (MBIA Insd)... 5.250 01/01/19 3,204,510
-------------
19,762,215
-------------
NORTH DAKOTA 0.2%
435 North Dakota St Hsg Fin Agy Ser C (AMT)......... 5.550 07/01/29 441,690
-------------
OHIO 2.1%
500 Cuyahoga Cnty, OH Hosp Fac Rev Canton Inc
Proj............................................ 7.500 01/01/30 556,370
3,000 Lucas Cnty, OH Hosp Rev Promedica Hlthcare Oblig
Rfdg (MBIA Insd)................................ 6.000 11/15/07 3,143,160
1,500 Mahoning Cnty, OH Hosp Fac Forum Hlth Oblig
Group Ser A..................................... 6.000 11/15/32 1,592,655
-------------
5,292,185
-------------
OKLAHOMA 2.6%
4,770 McAlester, OK Pub Wks Auth Util Cap Apprec (FSA
Insd)........................................... * 02/01/34 1,174,851
1,000 Oklahoma City, OK Pub Ppty Auth Hotel Tax Rev
(FGIC Insd)..................................... 5.250 10/01/29 1,065,610
1,000 Tulsa Cnty, OK Pub Fac Auth Cap Impt Rev
(Prerefunded @ 11/01/09) (AMBAC Insd)........... 6.250 11/01/22 1,110,490
3,140 Tulsa, OK Indl Auth Hosp Rev Hillcrest Med Cent
Proj Rfdg (Escrowed to Maturity) (Connie Lee
Insd) (d)....................................... 6.250 06/01/08 3,366,520
-------------
6,717,471
-------------
OREGON 1.1%
2,500 Oregon Hlth Sciences Univ Insd Ser A (MBIA
Insd)........................................... 5.250 07/01/22 2,678,425
-------------
See Notes to Financial Statements 17
VAN KAMPEN MUNICIPAL OPPORTUNITY TRUST
PORTFOLIO OF INVESTMENTS -- OCTOBER 31, 2005 continued
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
---------------------------------------------------------------------------------------------
PENNSYLVANIA 6.9%
$ 2,295 Allegheny Vly, PA Sch Dist Ser A (MBIA Insd).... 5.000% 11/01/24 $ 2,393,823
1,750 Harrisburg, PA Auth Res Gtd Sub Ser D-2 (FSA
Insd)........................................... 5.000 12/01/33 1,862,577
4,000 Hempfield, PA Area Sch Dist Westmoreland Cnty
Ser A (FGIC Insd)............................... 5.250 03/15/20 4,309,760
3,000 Susquehanna Area Regl Arpt Auth PA Ser A (AMT)
(AMBAC Insd).................................... 5.375 01/01/21 3,155,910
5,415 Susquehanna Area Regl Arpt Auth PA Ser A (AMT)
(AMBAC Insd) (d)................................ 5.375 01/01/22 5,682,880
-------------
17,404,950
-------------
SOUTH CAROLINA 2.1%
2,500 Easley, SC Util Rev Impt & Comb Rfdg (FSA
Insd)........................................... 5.000 12/01/34 2,582,925
2,500 South Carolina Jobs Econ Dev Auth Indl Rev Elec
& Gas Co Proj Ser A (AMBAC Insd)................ 5.200 11/01/27 2,644,375
-------------
5,227,300
-------------
SOUTH DAKOTA 0.6%
1,375 Deadwood, SD Ctfs Partn (ACA Insd).............. 6.375 11/01/20 1,460,154
-------------
TENNESSEE 0.9%
1,000 Elizabethton, TN Hlth & Ed Fac Brd Rev Hosp
First Mtg Ser B Impt & Rfdg..................... 8.000 07/01/33 1,182,560
1,000 Johnson City, TN Hlth & Ed Fac Brd Hosp Rev
First Mtg Mtn St Hlth Ser A Rfdg (MBIA Insd).... 7.500 07/01/25 1,229,990
-------------
2,412,550
-------------
TEXAS 18.4%
20 Austin, TX Utility Sys Rev Comb Rfdg (Escrowed
to Maturity) (AMBAC Insd)....................... 6.500 11/15/05 20,028
2,545 Dallas Cnty, TX Cmnty College Fin Sys (AMBAC
Insd) (d)....................................... 5.375 02/15/17 2,704,699
1,500 Dallas-Fort Worth, TX Intl Arpt Rev Jt Ser A
(AMT) (FGIC Insd)............................... 5.750 11/01/30 1,591,875
4,000 Dallas-Fort Worth, TX Intl Arpt Rev Jt Ser A
(AMT) (FSA Insd)................................ 5.500 11/01/21 4,270,960
5,500 Dallas-Fort Worth, TX Intl Arpt Rev Jt Ser A
Impt & Rfdg (AMT) (FGIC Insd) (e)............... 5.500 11/01/31 5,735,015
2,000 Houston, TX Arpt Sys Rev Sub Lien (FSA Insd).... 5.500 07/01/20 2,170,260
3,000 Houston, TX Arpt Sys Rev Sub Lien Ser A (AMT)
(FSA Insd)...................................... 5.625 07/01/30 3,181,230
5,000 Houston, TX Arpt Sys Rev Sub Lien Ser A (AMT)
(FSA Insd)...................................... 5.125 07/01/32 5,069,800
6,000 Houston, TX Util Sys Rev First Lien Ser A Rfdg
(FSA Insd)...................................... 5.250 05/15/21 6,410,280
2,185 Lower CO Riv Auth TX LCRA Svcs Corp Proj Rfdg
(FGIC Insd)..................................... 5.000 05/15/24 2,243,383
18 See Notes to Financial Statements
VAN KAMPEN MUNICIPAL OPPORTUNITY TRUST
PORTFOLIO OF INVESTMENTS -- OCTOBER 31, 2005 continued
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
---------------------------------------------------------------------------------------------
TEXAS (CONTINUED)
$ 2,000 Lower CO Riv Auth TX LCRA Svcs Corp Proj Rfdg
(FGIC Insd)..................................... 5.000% 05/15/33 $ 2,034,280
1,500 Metropolitan Hlth Fac Dev Corp TX Wilson N Jones
Mem Hosp Proj................................... 7.250 01/01/31 1,546,395
1,870 Midlothian, TX Indpt Sch Dist Sch Bldg Rfdg (PSF
Gld)............................................ 5.000 02/15/25 1,939,508
5,000 North Cent TX Hlth Fac Dev Hosp Childrens Med
Ctr Dallas (AMBAC Insd)......................... 5.250 08/15/32 5,198,450
2,360 University of TX Univ Rev Fin Sys Ser B......... 5.250 08/15/20 2,532,752
-------------
46,648,915
-------------
VERMONT 1.0%
2,500 University VT & ST Agric College (MBIA Insd).... 5.000 10/01/40 2,565,800
-------------
VIRGINIA 0.8%
2,000 Tobacco Settlement Fin Corp VA Asset Bkd........ 5.500 06/01/26 2,048,520
-------------
WASHINGTON 9.1%
9,850 Bellevue, WA Convention Cent Auth Spl Oblig Rev
Comp Int Rfdg (MBIA Insd)....................... * 02/01/25 3,785,453
3,750 Chelan Cnty, WA Pub Util Dist No 001 Cons Rev
Chelan Hydro Ser A (AMT) (MBIA Insd)............ 5.600 01/01/36 3,977,025
5,000 Energy Northwest WA Elec Rev Columbia Generating
Ser A Rfdg (FSA Insd)........................... 5.500 07/01/16 5,441,500
2,000 Port Seattle, WA Rev Inter Lien Ser A Rfdg (MBIA
Insd)........................................... 5.000 03/01/28 2,066,940
2,000 Port Seattle, WA Rev Inter Lien Ser A Rfdg (MBIA
Insd)........................................... 5.000 03/01/30 2,059,260
2,000 Port Seattle, WA Rev Ser B (AMT) (MBIA Insd).... 5.625 02/01/24 2,123,640
5,125 Washington St Pub Pwr Supply Sys Nuclear Proj No
3 Rev Ser C Rfdg (MBIA Insd) (d)................ * 07/01/14 3,508,677
-------------
22,962,495
-------------
WEST VIRGINIA 3.2%
8,000 Harrison Cnty, WV Cmnty Solid Waste Disp Rev
West Penn Pwr Co Proj Ser A (AMT) (MBIA Insd)... 6.875 04/15/22 8,022,640
-------------
WISCONSIN 0.7%
1,500 Southeast WI Professional Baseball Pk Dist Sales
Tax Rev Ser A Rfdg (MBIA Insd).................. 5.500 12/15/20 1,695,855
-------------
See Notes to Financial Statements 19
VAN KAMPEN MUNICIPAL OPPORTUNITY TRUST
PORTFOLIO OF INVESTMENTS -- OCTOBER 31, 2005 continued
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
---------------------------------------------------------------------------------------------
PUERTO RICO 0.5%
$ 1,250 Puerto Rico Comwlth Hwy & Trans Auth Rev Ser K.. 5.000% 07/01/45 $ 1,250,863
-------------
TOTAL INVESTMENTS 157.7%
(Cost $380,406,990)........................................................ 399,930,402
OTHER ASSETS IN EXCESS OF LIABILITIES 1.5%.................................. 3,912,824
PREFERRED SHARES (INCLUDING ACCRUED DISTRIBUTIONS) (59.2%).................. (150,170,142)
-------------
NET ASSETS APPLICABLE TO COMMON SHARES 100.0%............................... $ 253,673,084
=============
Percentages are calculated as a percentage of net assets applicable to common
shares.
* Zero coupon bond
(a) Security purchased on a when-issued or delayed delivery basis.
(b) 144A securities are those which are exempt from registration under Rule 144A
of the Securities Act of 1933, as amended. These securities may only be
resold in transactions exempt from registration which are normally those
transactions with qualified institutional buyers.
(c) These 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 0.7% of net
assets applicable to common shares.
(d) The Trust owns 100% of the bond issuance.
(e) All or a portion of these securities have been physically segregated in
connection with open futures contracts.
ACA--American Capital Access
AMBAC--AMBAC Indemnity Corp.
AMT--Alternative Minimum Tax
Connie Lee--Connie Lee Insurance Co.
FGIC--Financial Guaranty Insurance Co.
FHA--Federal Housing Administration
FNMA--Federal National Mortgage Association
FSA--Financial Security Assurance Inc.
GNMA--Government National Mortgage Association
MBIA--Municipal Bond Investors Assurance Corp.
PSF--Public School Fund
20 See Notes to Financial Statements
VAN KAMPEN MUNICIPAL OPPORTUNITY TRUST
PORTFOLIO OF INVESTMENTS -- OCTOBER 31, 2005 continued
FUTURES CONTRACTS OUTSTANDING AS OF OCTOBER 31, 2005:
UNREALIZED
APPRECIATION/
CONTRACTS DEPRECIATION
SHORT CONTRACTS
U.S. Treasury Notes 5-Year Futures December 2005 (Current
Notional Value of $105,891 per contract).................. 1,227 $1,718,621
===== ==========
See Notes to Financial Statements 21
VAN KAMPEN MUNICIPAL OPPORTUNITY TRUST
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
October 31, 2005
ASSETS:
Total Investments (Cost $380,406,990)....................... $399,930,402
Cash........................................................ 884,682
Receivables:
Interest.................................................. 6,109,748
Investments Sold.......................................... 116,384
Other....................................................... 11,190
------------
Total Assets............................................ 407,052,406
------------
LIABILITIES:
Payables:
Investments Purchased..................................... 2,488,350
Investment Advisory Fee................................... 189,339
Income Distributions--Common Shares....................... 49,560
Other Affiliates.......................................... 21,254
Variation Margin on Futures............................... 19,172
Trustees' Deferred Compensation and Retirement Plans........ 317,651
Accrued Expenses............................................ 123,854
------------
Total Liabilities....................................... 3,209,180
Preferred Shares (including accrued distributions).......... 150,170,142
------------
NET ASSETS APPLICABLE TO COMMON SHARES...................... $253,673,084
============
NET ASSET VALUE PER COMMON SHARE ($253,673,084 divided by
15,357,684 shares outstanding)............................ $ 16.52
============
NET ASSETS CONSIST OF:
Common Shares ($.01 par value with an unlimited number of
shares authorized, 15,357,684 shares issued and
outstanding).............................................. $ 153,577
Paid in Surplus............................................. 226,763,756
Net Unrealized Appreciation................................. 21,242,033
Accumulated Net Realized Gain............................... 4,893,490
Accumulated Undistributed Net Investment Income............. 620,228
------------
NET ASSETS APPLICABLE TO COMMON SHARES...................... $253,673,084
------------
PREFERRED SHARES ($.01 par value, authorized 100,000,000
shares, 6,000 issued with liquidation preference of
$25,000 per share)........................................ $150,000,000
============
NET ASSETS INCLUDING PREFERRED SHARES....................... $403,673,084
============
22 See Notes to Financial Statements
VAN KAMPEN MUNICIPAL OPPORTUNITY TRUST
FINANCIAL STATEMENTS continued
Statement of Operations
For the Year Ended October 31, 2005
INVESTMENT INCOME:
Interest.................................................... $ 20,284,677
------------
EXPENSES:
Investment Advisory Fee..................................... 2,246,855
Preferred Share Maintenance................................. 398,852
Legal....................................................... 75,200
Trustees' Fees and Related Expenses......................... 66,498
Custody..................................................... 47,919
Other....................................................... 211,952
------------
Total Expenses.......................................... 3,047,276
------------
NET INVESTMENT INCOME....................................... $ 17,237,401
============
REALIZED AND UNREALIZED GAIN/LOSS:
Realized Gain/Loss:
Investments............................................... $ 5,052,527
Futures................................................... 102,834
------------
Net Realized Gain........................................... 5,155,361
------------
Unrealized Appreciation/Depreciation:
Beginning of the Period................................... 31,576,864
------------
End of the Period:
Investments............................................. 19,523,412
Futures................................................. 1,718,621
------------
21,242,033
------------
Net Unrealized Depreciation During the Period............... (10,334,831)
------------
NET REALIZED AND UNREALIZED LOSS............................ $ (5,179,470)
============
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS..................... $ (3,356,327)
============
NET INCREASE IN NET ASSETS APPLICABLE TO COMMON SHARES FROM
OPERATIONS................................................ $ 8,701,604
============
See Notes to Financial Statements 23
VAN KAMPEN MUNICIPAL OPPORTUNITY TRUST
FINANCIAL STATEMENTS continued
Statements of Changes in Net Assets
FOR THE FOR THE
YEAR ENDED YEAR ENDED
OCTOBER 31, 2005 OCTOBER 31, 2004
------------------------------------
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income................................... $ 17,237,401 $ 17,351,540
Net Realized Gain/Loss.................................. 5,155,361 (2,096,470)
Net Unrealized Appreciation/Depreciation During the
Period................................................ (10,334,831) 5,600,393
Distributions to Preferred Shareholders:
Net Investment Income................................. (3,356,327) (1,527,703)
Net Realized Gain..................................... -0- (321,388)
------------- -------------
Change in Net Assets Applicable to Common Shares from
Operations............................................ 8,701,604 19,006,372
Distributions to Common Shareholders:
Net Investment Income................................. (14,450,796) (16,600,321)
Net Realized Gain..................................... -0- (4,376,481)
------------- -------------
NET CHANGE IN NET ASSETS APPLICABLE TO COMMON SHARES
FROM INVESTMENT ACTIVITIES............................ (5,749,192) (1,970,430)
------------- -------------
FROM CAPITAL TRANSACTIONS:
Value of Common Shares Issued Through Dividend
Reinvestment.......................................... -0- 81,435
------------- -------------
TOTAL DECREASE IN NET ASSETS APPLICABLE TO COMMON
SHARES................................................ (5,749,192) (1,888,995)
NET ASSETS APPLICABLE TO COMMON SHARES:
Beginning of the Period................................. 259,422,276 261,311,271
------------- -------------
End of the Period (Including accumulated undistributed
net investment income of $620,228 and $1,189,973,
respectively)......................................... $ 253,673,084 $ 259,422,276
============= =============
24 See Notes to Financial Statements
VAN KAMPEN MUNICIPAL OPPORTUNITY TRUST
FINANCIAL HIGHLIGHTS
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE COMMON SHARE OF THE
TRUST OUTSTANDING THROUGHOUT THE PERIODS INDICATED.
YEAR ENDED OCTOBER 31,
------------------------------------------------
2005 2004 2003 2002 (a) 2001
------------------------------------------------
NET ASSET VALUE, BEGINNING OF THE PERIOD... $ 16.89 $ 17.02 $ 17.48 $ 17.59 $ 16.29
------- ------- ------- ------- -------
Net Investment Income.................... 1.12 1.13 1.19 1.23 1.26
Net Realized and Unrealized Gain/Loss.... (.33) .23 .09 .15 1.29
Common Share Equivalent of
Distributions Paid to Preferred
Shareholders:
Net Investment Income................ (.22) (.10) (.08) (.09) (.32)
Net Realized Gain.................... -0- (.02) (.04) (.08) (.01)
------- ------- ------- ------- -------
Total from Investment Operations........... .57 1.24 1.16 1.21 2.22
Distributions Paid to Common Shareholders:
Net Investment Income................ (.94) (1.08) (1.16) (1.08) (.92)
Net Realized Gain.................... -0- (.29) (.46) (.24) -0-
------- ------- ------- ------- -------
NET ASSET VALUE, END OF THE PERIOD......... $ 16.52 $ 16.89 $ 17.02 $ 17.48 $ 17.59
======= ======= ======= ======= =======
Common Share Market Price at End of the
Period................................... $ 14.35 $ 15.20 $ 16.65 $ 16.04 $ 15.65
Total Return (b)........................... 0.55% -0.60% 14.53% 11.36% 21.42%
Net Assets Applicable to Common Shares at
End of the Period (In millions).......... $ 253.7 $ 259.4 $ 261.3 $ 268.3 $ 270.0
Ratio of Expenses to Average Net Assets
Applicable to
Commons Shares (c)....................... 1.18% 1.30% 1.28% 1.42% 1.58%
Ratio of Net Investment Income to Average
Net Assets Applicable to Common Shares
(c)...................................... 6.67% 6.74% 6.90% 7.17% 7.40%
Portfolio Turnover......................... 32% 28% 36% 43% 34%
SUPPLEMENTAL RATIOS:
Ratio of Expenses to Average Net Assets
Including
Preferred Shares (c)..................... .75% .82% .81% .91% 1.00%
Ratio of Net Investment Income to Average
Net Assets Applicable to Common Shares
(d)...................................... 5.37% 6.15% 6.43% 6.61% 5.54%
SENIOR SECURITIES:
Total Preferred Shares Outstanding......... 6,000 6,000 6,000 6,000 6,000
Asset Coverage Per Preferred Share (e)..... $67,307 $68,253 $68,560 $69,736 $70,006
Involuntary Liquidating Preference Per
Preferred Share.......................... $25,000 $25,000 $25,000 $25,000 $25,000
Average Market Value Per Preferred Share... $25,000 $25,000 $25,000 $25,000 $25,000
(a)As required, effective November 1, 2001, the Trust has adopted the provisions
of the AICPA Audit and Accounting Guide for Investment Companies and began
accreting market discount on fixed income securities. The effect of this
change for the year ended October 31, 2002 was to increase net investment
income per share by $.01, decrease net realized and unrealized gains and
losses per share by $.01 and increase the ratio of net investment income to
average net assets applicable to common shares by .03%. 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.
See Notes to Financial Statements 25
VAN KAMPEN MUNICIPAL OPPORTUNITY TRUST
NOTES TO FINANCIAL STATEMENTS -- OCTOBER 31, 2005
1. SIGNIFICANT ACCOUNTING POLICIES
Van Kampen Municipal Opportunity 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 provide
a high level of current income exempt from federal income tax, consistent with
preservation of capital. The Trust commenced investment operations on April 24,
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 October 31, 2005, the Trust had $2,488,350 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 these losses against any future realized capital
gains. During the current fiscal year, the Trust utilized capital losses carried
forward of $694,750.
26
VAN KAMPEN MUNICIPAL OPPORTUNITY TRUST
NOTES TO FINANCIAL STATEMENTS -- OCTOBER 31, 2005 continued
At October 31, 2005, the cost and related gross unrealized appreciation and
depreciation are as follows:
Cost of investments for tax purposes........................ $380,230,096
============
Gross tax unrealized appreciation........................... $ 21,290,561
Gross tax unrealized depreciation........................... (1,590,255)
------------
Net tax unrealized appreciation on investments.............. $ 19,700,306
============
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 years ended October 31,
2005 and 2004 was as follows:
DISTRIBUTIONS PAID FROM: 2005 2004
Ordinary income............................................. $371 $1,281,469
Long-term capital gain...................................... -0- 3,842,711
---- ----------
$371 $5,124,180
==== ==========
Due to inherent differences in the recognition of income, expenses and
realized gains/ losses under accounting principles generally accepted in the
United States of America and federal income tax purposes, permanent differences
between financial and tax basis reporting for the 2005 fiscal year have been
identified and appropriately reclassified. A permanent difference of $23
relating to book to tax accretion differences was reclassified from accumulated
undistributed net investment income to accumulated net realized gain.
As of October 31, 2005, the components of distributable earnings on a tax
basis were as follows:
Undistributed ordinary income............................... $ 477,111
Undistributed long-term capital gain........................ 6,136,620
Net realized gains or losses may differ for financial reporting and tax
purposes primarily as a result of the deferral of losses relating to wash sale
transactions and gains or losses recognized for tax purposes on open futures
transactions on October 31, 2005.
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") will provide 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 year ended October 31, 2005, the Trust recognized expenses of
approximately $32,100 representing legal services provided by Skadden, Arps,
Slate, Meagher & Flom LLP,
27
VAN KAMPEN MUNICIPAL OPPORTUNITY TRUST
NOTES TO FINANCIAL STATEMENTS -- OCTOBER 31, 2005 continued
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 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 Trust. The costs of
these services are allocated to each trust. For the year ended October 31, 2005,
the Trust recognized expenses of approximately $70,900 representing Van Kampen
Investment Inc.'s or its affiliates' (collectively "Van Kampen") cost of
providing accounting and legal services to the Trust, 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 "Legal" expenses on the Statement of Operations. Services provided
pursuant to the Accounting Services and CCO Employment agreement are reported as
part of "Other" expenses on the Statement of Operations.
Certain officers and trustees of the Trust are also officers and directors
of Van Kampen. The Trust does not compensate its officers or trustees who are
also officers of Van Kampen.
The Trust provides deferred compensation and retirement plans for its
trustees who are not officers of Van Kampen. Under the deferred compensation
plan, trustees may elect to defer all or a portion of their compensation to a
later date. Benefits under the retirement plan are payable upon retirement for a
ten-year period and are based upon each trustee's years of service to the Trust.
The maximum annual benefit per trustee under the plan is $2,500.
3. CAPITAL TRANSACTIONS
At October 31, 2005 and 2004, paid in surplus related to common shares
aggregated $226,763,756 and $226,763,756, respectively.
Transactions in common shares were as follows:
YEAR ENDED YEAR ENDED
OCTOBER 31, 2005 OCTOBER 31, 2004
Beginning Shares........................................ 15,357,684 15,352,891
Shares Issued Through Dividend Reinvestment............. -0- 4,793
---------- ----------
Ending Shares........................................... 15,357,684 15,357,684
========== ==========
4. INVESTMENT TRANSACTIONS
During the period, the cost of purchases and proceeds from sales of investments,
excluding short-term investments, were $133,067,817 and $131,062,563,
respectively.
5. 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.
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 and 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
28
VAN KAMPEN MUNICIPAL OPPORTUNITY TRUST
NOTES TO FINANCIAL STATEMENTS -- OCTOBER 31, 2005 continued
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
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.
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. These
contracts are generally used to manage the Trust's effective maturity and
duration. Upon entering into futures contracts, the Trust maintains 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 year ended October 31, 2005, were
as follows:
CONTRACTS
Outstanding at October 31, 2004............................. 601
Futures Opened.............................................. 3,681
Futures Closed.............................................. (3,055)
------
Outstanding at October 31, 2005............................. 1,227
======
6. PREFERRED SHARES
The Trust has outstanding 6,000 Auction Preferred Shares ("APS") in two series
of 3,000 shares each. Dividends are cumulative and the dividend rate on each
series is currently reset every 28 days through an auction process. The average
rate in effect on October 31, 2005 was 2.675%. During the year ended October 31,
2005, the rates ranged from 1.550% to 2.850%.
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 certain asset coverage tests and the APS are subject to
mandatory redemption if the tests are not met.
7. 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.
29
VAN KAMPEN MUNICIPAL OPPORTUNITY TRUST
NOTES TO FINANCIAL STATEMENTS -- OCTOBER 31, 2005 continued
8. TRUST MERGER
On June 30, 2005, the Trustees of Van Kampen Advantage Municipal Income Trust
("Target Trust") announced its intention to merge the Target Trust into Van
Kampen Municipal Opportunity Trust ("Acquiring Trust"). The Trustees of each of
the trusts have approved in principal an agreement and plan of reorganization
between the trusts providing for a transfer of assets and liabilities of the
Target Trust to the Acquiring Trust in exchange for shares of beneficial
interest of the Acquiring Trust (the "Reorganization"). The Reorganization is
subject to approval by the shareholders of the Target Trust. The issuance of
additional common shares is subject to the approval of the Acquiring Trust.
30
VAN KAMPEN MUNICIPAL OPPORTUNITY TRUST
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees and Shareholders of Van Kampen Municipal Opportunity
Trust:
We have audited the accompanying statement of assets and liabilities of Van
Kampen Municipal Opportunity Trust (the "Trust"), including the portfolio of
investments, as of October 31, 2005, the related statement of operations for the
year then ended, the statements of changes in net assets for each of the two
years in the period then ended, and the financial highlights for each of the
five years in the period then ended. These financial statements and financial
highlights are the responsibility of the Trust's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material misstatement.
The Trust is not required to have, nor were we engaged to perform, an audit of
its internal control over financial reporting. Our audits included consideration
of internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Trust's internal control over
financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. Our procedures included confirmation
of securities owned as of October 31, 2005, by correspondence with the Trust's
custodian and brokers; where replies were not received from brokers, we
performed other auditing procedures. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of Van
Kampen Municipal Opportunity Trust as of October 31, 2005, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended and the financial highlights for each of
the five years in the period then ended, in conformity with accounting
principles generally accepted in the United States of America.
DELOITTE & TOUCHE LLP
Chicago, Illinois
December 20, 2005
31
VAN KAMPEN MUNICIPAL OPPORTUNITY TRUST
DIVIDEND REINVESTMENT PLAN
The Trust offers a dividend reinvestment plan (the "Plan") pursuant to which
Common Shareholders may elect to have dividends and capital gains distributions
reinvested in Common Shares of the Trust. The Trust declares dividends out of
net investment income, and will distribute annually net realized capital gains,
if any. Common Shareholders may join or withdraw from the Plan at any time.
If you decide to participate in the Plan, EquiServe Trust Company, N.A., as
your Plan Agent, will automatically invest your dividends and capital gains
distributions in Common Shares of the Trust for your account.
HOW TO PARTICIPATE
If you wish to participate and your shares are held in your own name, call
1-800-341-2929 for more information and a Plan brochure. If your shares are held
in the name of a brokerage firm, bank, or other nominee, you should contact your
nominee to see if it would participate in the Plan on your behalf. If you wish
to participate in the Plan, but your brokerage firm, bank or nominee is unable
to participate on your behalf, you should request that your shares be
re-registered in your own name which will enable your participation in the Plan.
HOW THE PLAN WORKS
Participants in the Plan will receive the equivalent in Common Shares valued
on the valuation date, generally at the lower of market price or net asset
value, except as specified below. The valuation date will be the dividend or
distribution payment date or, if that date is not a trading day on the national
securities exchange or market system on which the Common Shares are listed for
trading, the next preceding trading day. If the market price per Common Share on
the valuation date equals or exceeds net asset value per Common Share on that
date, the Trust will issue new Common Shares to participants valued at the
higher of net asset value or 95% of the market price on the valuation date. In
the foregoing situation, the Trust will not issue Common Shares under the Plan
below net asset value. If net asset value per Common Share on the valuation date
exceeds the market price per Common Share on that date, or if the Board of
Trustees should declare a dividend or capital gains distribution payable to the
Common Shareholders only in cash, participants in the Plan will be deemed to
have elected to receive Common Shares from the Trust valued at the market price
on that date. Accordingly, in this circumstance, the Plan Agent will, as agent
for the participants, buy the Trust's Common Shares in the open market for the
participants' accounts on or shortly after the payment date. If, before the Plan
Agent has completed its purchases, the market price exceeds the net asset value
per share of the Common Shares, the average per share purchase price paid by the
Plan Agent may exceed the net asset value
32
VAN KAMPEN MUNICIPAL OPPORTUNITY TRUST
DIVIDEND REINVESTMENT PLAN continued
of the Trust's Common Shares, resulting in the acquisition of fewer Common
Shares than if the dividend or distribution had been paid in Common Shares
issued by the Trust. All reinvestments are in full and fractional Common Shares
and are carried to three decimal places.
Experience under the Plan may indicate that changes are desirable.
Accordingly, the Trust reserves the right to amend or terminate the Plan as
applied to any dividend or distribution paid subsequent to written notice of the
changes sent to all Common Shareholders of the Trust at least 90 days before the
record date for the dividend or distribution. The Plan also may be amended or
terminated by the Plan Agent by at least 90 days written notice to all Common
Shareholders of the Trust.
COSTS OF THE PLAN
The Plan Agent's fees for the handling of the reinvestment of dividends and
distributions will be paid by the Trust. However, each participant will pay a
pro rata share of brokerage commissions incurred with respect to the Plan
Agent's open market purchases in connection with the reinvestment of dividends
and distributions. No other charges will be made to participants for reinvesting
dividends or capital gains distributions, except for certain brokerage
commissions, as described above.
TAX IMPLICATIONS
You will receive tax information annually for your personal records and to
help you prepare your federal income tax return. The automatic reinvestment of
dividends and capital gains distributions does not relieve you of any income tax
which may be payable on dividends or distributions.
RIGHT TO WITHDRAW
Plan participants may withdraw at any time by calling 1-800-341-2929 or by
writing EquiServe Trust Company, N.A., c/o Computershare Investor Services, P.O.
Box 43010, Providence, Rhode Island 02940-3010. If you withdraw, you will
receive, without charge, a share certificate issued in your name for all full
Common Shares credited to your account under the Plan and a cash payment will be
made for any fractional Common Share credited to your account under the Plan.
You may again elect to participate in the Plan at any time by calling
1-800-341-2929 or writing to the Trust at:
Van Kampen Funds Inc.
Attn: Closed-End Funds
2800 Post Oak Blvd.
Houston, TX 77056
33
VAN KAMPEN MUNICIPAL OPPORTUNITY 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
JACK E. NELSON
HUGO F. SONNENSCHEIN
WAYNE W. WHALEN* - Chairman
SUZANNE H. WOOLSEY
OFFICERS
RONALD E. ROBISON
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
PHILLIP G. GOFF
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.
c/o Computershare Investor Services
P.O. Box 43010
Providence, Rhode Island 02940-3010
LEGAL COUNSEL
SKADDEN, ARPS, SLATE,
MEAGHER & FLOM LLP
333 West Wacker Drive
Chicago, Illinois 60606
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
DELOITTE & TOUCHE LLP
111 South Wacker Dr.
Chicago, Illinois 60606-4301
For federal income tax purposes, the following information is furnished with
respect to the distributions paid by the Trust during its taxable year ended
October 31, 2005. The Trust designated 100.0% of the income distributions as a
tax-exempt income distribution. In January, the Trust provides tax information
to shareholders for the preceding calendar year.
* "Interested persons" of the Trust, as defined in the Investment Company Act
of 1940, as amended.
34
VAN KAMPEN MUNICIPAL OPPORTUNITY TRUST
RESULTS OF SHAREHOLDER VOTES
The Annual Meeting of Shareholders of the Trust was held on October 28, 2005,
where shareholders voted on the election of trustees.
With regard to the election of the following trustees by common shareholders of
the Trust:
# OF SHARES
--------------------------------
IN FAVOR WITHHELD
------------------------------------------------------------------------------------------
David C. Arch........................................... 13,646,466 212,344
Jerry D. Choate......................................... 13,613,849 244,961
Howard J Kerr........................................... 13,614,715 244,096
Suzanne H. Woolsey...................................... 13,643,494 215,317
The other trustees of the Trust whose terms did not expire in 2005 are Rod
Dammeyer, Linda Hutton Heagy, R. Craig Kennedy, Jack E. Nelson, Hugo F.
Sonnenschein and Wayne W. Whalen.
A shareholder meeting has been called for January 11, 2006 to approve the
issuance of additional common shares of the Trust.
35
VAN KAMPEN MUNICIPAL OPPORTUNITY TRUST
TRUSTEES AND OFFICERS INFORMATION
The business and affairs of the Fund are managed under the direction of the
Fund's Board of Trustees and the Fund's officers appointed by the Board of
Trustees. The tables below list the trustees and executive officers of the Fund
and their principal occupations during the last five years, other directorships
held by trustees and their affiliations, if any, with Van Kampen Investments
Inc. ("Van Kampen Investments"), Van Kampen Asset Management (the "Adviser"),
Van Kampen Funds Inc. (the "Distributor"), Van Kampen Advisors Inc., Van Kampen
Exchange Corp. and Van Kampen Investor Services Inc. ("Investor Services"). The
term "Fund Complex" includes each of the investment companies advised by the
Adviser as of the date of this Annual Report. Trustees of the Funds generally
serve three year terms or until their successors are duly elected and qualified.
Officers are annually elected by the trustees.
INDEPENDENT TRUSTEES:
NUMBER OF
TERM OF FUNDS IN
OFFICE AND FUND
POSITION(S) LENGTH OF COMPLEX
NAME, AGE AND ADDRESS HELD WITH TIME PRINCIPAL OCCUPATION(S) OVERSEEN OTHER DIRECTORSHIPS
OF INDEPENDENT TRUSTEE FUND SERVED DURING PAST 5 YEARS BY TRUSTEE HELD BY TRUSTEE
David C. Arch (60) Trustee Trustee Chairman and Chief 72 Trustee/Director/Managing
Blistex Inc. since 1992 Executive Officer of General Partner of funds
1800 Swift Drive Blistex Inc., a consumer in the Fund Complex.
Oak Brook, IL 60523 health care products
manufacturer. Director of
the Heartland Alliance, a
nonprofit organization
serving human needs based
in Chicago. Director of
St. Vincent de Paul
Center, a Chicago based
day care facility serving
the children of low
income families. Board
member of the Illinois
Manufacturers'
Association.
Jerry D. Choate (67) Trustee Trustee Prior to January 1999, 70 Trustee/Director/Managing
33971 Selva Road since 2003 Chairman and Chief General Partner of funds
Suite 130 Executive Officer of the in the Fund Complex.
Dana Point, CA 92629 Allstate Corporation Director of Amgen Inc., a
("Allstate") and Allstate biotechnological company,
Insurance Company. Prior and Director of Valero
to January 1995, Energy Corporation, an
President and Chief independent refining
Executive Officer of company.
Allstate. Prior to August
1994, various management
positions at Allstate.
36
VAN KAMPEN MUNICIPAL OPPORTUNITY TRUST
TRUSTEE AND OFFICERS INFORMATION continued
NUMBER OF
TERM OF FUNDS IN
OFFICE AND FUND
POSITION(S) LENGTH OF COMPLEX
NAME, AGE AND ADDRESS HELD WITH TIME PRINCIPAL OCCUPATION(S) OVERSEEN OTHER DIRECTORSHIPS
OF INDEPENDENT TRUSTEE FUND SERVED DURING PAST 5 YEARS BY TRUSTEE HELD BY TRUSTEE
Rod Dammeyer (65) Trustee Trustee President of CAC, L.L.C., 72 Trustee/Director/Managing
CAC, L.L.C. since 1992 a private company General Partner of funds
4350 LaJolla Village Drive offering capital in the Fund Complex.
Suite 980 investment and management Director of Stericycle,
San Diego, CA 92122-6223 advisory services. Prior Inc., Ventana Medical
to February 2001, Vice Systems, Inc., and GATX
Chairman and Director of Corporation, and Trustee
Anixter International, of The Scripps Research
Inc., a global Institute. Prior to
distributor of wire, January 2005, Trustee of
cable and communications the University of Chicago
connectivity products. Hospitals and Health
Prior to July 2000, Systems. Prior to April
Managing Partner of 2004, Director of
Equity Group Corporate TheraSense, Inc. Prior to
Investment (EGI), a January 2004, Director of
company that makes TeleTech Holdings Inc.
private investments in and Arris Group, Inc.
other companies. Prior to May 2002,
Director of Peregrine
Systems Inc. Prior to
February 2001, Director
of IMC Global Inc. Prior
to July 2000, Director of
Allied Riser
Communications Corp.,
Matria Healthcare Inc.,
Transmedia Networks,
Inc., CNA Surety, Corp.
and Grupo Azcarero Mexico
(GAM).
37
VAN KAMPEN MUNICIPAL OPPORTUNITY TRUST
TRUSTEE AND OFFICERS INFORMATION continued
NUMBER OF
TERM OF FUNDS IN
OFFICE AND FUND
POSITION(S) LENGTH OF COMPLEX
NAME, AGE AND ADDRESS HELD WITH TIME PRINCIPAL OCCUPATION(S) OVERSEEN OTHER DIRECTORSHIPS
OF INDEPENDENT TRUSTEE FUND SERVED DURING PAST 5 YEARS BY TRUSTEE HELD BY TRUSTEE
Linda Hutton Heagy (57) Trustee Trustee Managing Partner of 70 Trustee/Director/Managing
Heidrick & Struggles since 2003 Heidrick & Struggles, an General Partner of funds
233 South Wacker Drive executive search firm. in the Fund Complex.
Suite 7000 Trustee on the University
Chicago, IL 60606 of Chicago Hospitals
Board, Vice Chair of the
Board of the YMCA of
Metropolitan Chicago and
a member of the Women's
Board of the University
of Chicago. Prior to
1997, Partner of Ray &
Berndtson, Inc., an
executive recruiting
firm. Prior to 1996,
Trustee of The
International House
Board, a fellowship and
housing organization for
international graduate
students. Prior to 1995,
Executive Vice President
of ABN AMRO, N.A., a bank
holding company. Prior to
1990, Executive Vice
President of The Exchange
National Bank.
R. Craig Kennedy (53) Trustee Trustee Director and President of 70 Trustee/Director/Managing
1744 R Street, NW since 2003 the German Marshall Fund General Partner of funds
Washington, DC 20009 of the United States, an in the Fund Complex.
independent U.S.
foundation created to
deepen understanding,
promote collaboration and
stimulate exchanges of
practical experience
between Americans and
Europeans. Formerly,
advisor to the Dennis
Trading Group Inc., a
managed futures and
option company that
invests money for
individuals and
institutions. Prior to
1992, President and Chief
Executive Officer,
Director and member of
the Investment Committee
of the Joyce Foundation,
a private foundation.
Howard J Kerr (70) Trustee Trustee Prior to 1998, President 72 Trustee/Director/Managing
14 Huron Trace since 1992 and Chief Executive General Partner of funds
Galena, IL 61036 Officer of Pocklington in the Fund Complex.
Corporation, Inc., an Director of the Lake
investment holding Forest Bank & Trust.
company. Director of the
Marrow Foundation.
38
VAN KAMPEN MUNICIPAL OPPORTUNITY TRUST
TRUSTEE AND OFFICERS INFORMATION continued
NUMBER OF
TERM OF FUNDS IN
OFFICE AND FUND
POSITION(S) LENGTH OF COMPLEX
NAME, AGE AND ADDRESS HELD WITH TIME PRINCIPAL OCCUPATION(S) OVERSEEN OTHER DIRECTORSHIPS
OF INDEPENDENT TRUSTEE FUND SERVED DURING PAST 5 YEARS BY TRUSTEE HELD BY TRUSTEE
Jack E. Nelson (69) Trustee Trustee President of Nelson 70 Trustee/Director/Managing
423 Country Club Drive since 2003 Investment Planning General Partner of funds
Winter Park, FL 32789 Services, Inc., a in the Fund Complex.
financial planning
company and registered
investment adviser in the
State of Florida.
President of Nelson Ivest
Brokerage Services Inc.,
a member of the NASD,
Securities Investors
Protection Corp. and the
Municipal Securities
Rulemaking Board.
President of Nelson Sales
and Services Corporation,
a marketing and services
company to support
affiliated companies.
Hugo F. Sonnenschein (65) Trustee Trustee President Emeritus and 72 Trustee/Director/Managing
1126 E. 59th Street since 1994 Honorary Trustee of the General Partner of funds
Chicago, IL 60637 University of Chicago and in the Fund Complex.
the Adam Smith Director of Winston
Distinguished Service Laboratories, Inc.
Professor in the
Department of Economics
at the University of
Chicago. Prior to July
2000, President of the
University of Chicago.
Trustee of the University
of Rochester and a member
of its investment
committee. Member of the
National Academy of
Sciences, the American
Philosophical Society and
a fellow of the American
Academy of Arts and
Sciences.
Suzanne H. Woolsey, Ph.D. Trustee Trustee Chief Communications 70 Trustee/Director/Managing
(63) since 2003 Officer of the National General Partner of funds
815 Cumberstone Road Academy of in the Fund Complex.
Harwood, MD 20776 Sciences/National Director of Fluor Corp.,
Research Council, an an engineering,
independent, federally procurement and
chartered policy construction
institution, from 2001 to organization, since
November 2003 and Chief January 2004 and Director
Operating Officer from of Neurogen Corporation,
1993 to 2001. Director of a pharmaceutical company,
the Institute for Defense since January 1998.
Analyses, a federally
funded research and
development center,
Director of the German
Marshall Fund of the
United States, Director
of the Rocky Mountain
Institute and Trustee of
Colorado College. Prior
to 1993, Executive
Director of the
Commission on Behavioral
and Social Sciences and
Education at the National
Academy of
Sciences/National
Research Council. From
1980 through 1989,
Partner of Coopers &
Lybrand.
39
VAN KAMPEN MUNICIPAL OPPORTUNITY TRUST
TRUSTEE AND OFFICERS INFORMATION continued
INTERESTED TRUSTEE:*
NUMBER OF
TERM OF FUNDS IN
OFFICE AND FUND
POSITION(S) LENGTH OF COMPLEX
NAME, AGE AND ADDRESS HELD WITH TIME PRINCIPAL OCCUPATION(S) OVERSEEN OTHER DIRECTORSHIPS
OF INTERESTED TRUSTEE FUND SERVED DURING PAST 5 YEARS BY TRUSTEE HELD BY TRUSTEE
Wayne W. Whalen* (66) Trustee Trustee Partner in the law firm 72 Trustee/Director/Managing
333 West Wacker Drive since 1992 of Skadden, Arps, Slate, General Partner of funds
Chicago, IL 60606 Meagher & Flom LLP, legal in the Fund Complex.
counsel to funds in the Director of the Abraham
Fund Complex. Lincoln Presidential
Library Foundation.
* Mr. Whalen is an "interested person" (within the meaning of Section 2(a)(19)
of the 1940 Act) of certain funds in the Fund Complex by reason of he and
his firm currently providing legal services as legal counsel to such funds
in the Fund Complex.
40
VAN KAMPEN MUNICIPAL OPPORTUNITY TRUST
TRUSTEE AND OFFICERS INFORMATION continued
OFFICERS:
TERM OF
OFFICE AND
POSITION(S) LENGTH OF
NAME, AGE AND HELD WITH TIME PRINCIPAL OCCUPATION(S)
ADDRESS OF OFFICER FUND SERVED DURING PAST 5 YEARS
Ronald E. Robison (66) President and Officer President of funds in the Fund Complex since September 2005
1221 Avenue of the Americas Principal Executive since 2003 and Principal Executive Officer of funds in the Fund Complex
New York, NY 10020 Officer since May 2003. Managing Director of Morgan Stanley and
Morgan Stanley & Co. Incorporated. Managing Director and
Director of Morgan Stanley Investment Management Inc. Chief
Administrative Officer, Managing Director and Director of
Morgan Stanley Investment Advisors Inc. and Morgan Stanley
Services Company Inc. Managing Director and Director of
Morgan Stanley Distributors Inc. and Morgan Stanley
Distribution Inc. Chief Executive Officer and Director of
Morgan Stanley Trust. Executive Vice President and Principal
Executive Officer of the Institutional and Retail Morgan
Stanley Funds. Director of Morgan Stanley SICAV. Previously
Chief Global Operations Officer of Morgan Stanley Investment
Management Inc. and Executive Vice President of funds in the
Fund Complex from May 2003 to September 2005.
Joseph J. McAlinden (62) Executive Vice Officer Managing Director and Chief Investment Officer of Morgan
1221 Avenue of the Americas President and Chief since 2002 Stanley Investment Advisors Inc., and Morgan Stanley
New York, NY 10020 Investment Officer Investment Management Inc. and Director of Morgan Stanley
Trust for over 5 years. Executive Vice President and Chief
Investment Officer of funds in the Fund Complex. Managing
Director and Chief Investment Officer of Van Kampen
Investments, the Adviser and Van Kampen Advisors Inc. since
December 2002.
Amy R. Doberman (43) Vice President Officer Managing Director and General Counsel, U.S. Investment
1221 Avenue of the Americas since 2004 Management; Managing Director of Morgan Stanley Investment
New York, NY 10020 Management Inc., Morgan Stanley Investment Advisers Inc. and
the Adviser. Vice President of the Morgan Stanley
Institutional and Retail Funds since July 2004 and Vice
President of funds in the Fund Complex since August 2004.
Previously, Managing Director and General Counsel of
Americas, UBS Global Asset Management from July 2000 to July
2004 and General Counsel of Aeltus Investment Management,
Inc. from January 1997 to July 2000.
Stefanie V. Chang (39) Vice President Officer Executive Director of Morgan Stanley Investment Management
1221 Avenue of the Americas and Secretary since 2003 Inc. Vice President and Secretary of funds in the Fund
New York, NY 10020 Complex.
41
VAN KAMPEN MUNICIPAL OPPORTUNITY TRUST
TRUSTEE AND OFFICERS INFORMATION continued
TERM OF
OFFICE AND
POSITION(S) LENGTH OF
NAME, AGE AND HELD WITH TIME PRINCIPAL OCCUPATION(S)
ADDRESS OF OFFICER FUND SERVED DURING PAST 5 YEARS
John L. Sullivan (50) Chief Compliance Officer Chief Compliance Officer of funds in the Fund Complex since
1 Parkview Plaza Officer since 1996 August 2004. Prior to August 2004, Director and Managing
Oakbrook Terrace, IL 60181 Director of Van Kampen Investments, the Adviser, Van Kampen
Advisors Inc. and certain other subsidiaries of Van Kampen
Investments, Vice President, Chief Financial Officer and
Treasurer of funds in the Fund Complex and head of Fund
Accounting for Morgan Stanley Investment Management Inc.
Prior to December 2002, Executive Director of Van Kampen
Investments, the Adviser and Van Kampen Advisors Inc.
Phillip G. Goff (42) Chief Financial Officer Officer Executive Director of Morgan Stanley Investment Management
1 Parkview Plaza and Treasurer since 2005 Inc. since June 2005. Chief Financial Officer and Treasurer
Oakbrook Terrace, IL 60181 of funds in the Fund Complex since August 2005. Prior to
June 2005, Vice President and Chief Financial Officer of
Enterprise Capital Management, Inc., an investment holding
company.
In accordance with Section 303A.12(a) of the New York Stock Exchange Listed
Company Manual, the Trust's Chief Executive Officer has certified to the New
York Stock Exchange that, as of July 18, 2005, he was not aware of any violation
by the Trust of NYSE corporate governance listing standards.
The certifications by the Fund's principal executive officer and principal
financial officer required by Rule 30a-2 under the 1940 Act were filed with the
Trust's report to the SEC on Form N-CSR and are available on the Securities and
Exchange Commission's web site at http://www.sec.gov.
42
Van Kampen Municipal Opportunity Trust
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 Opportunity Trust
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 Opportunity Trust
An Important Notice Concerning Our U.S. Privacy Policy continued
other financial institutions, or as otherwise required or permitted by law.
For example, some instances where we may disclose information about you to
non-affiliated third parties include: for servicing and processing
transactions, to offer our own products and services, to protect against
fraud, for institutional risk control, to respond to judicial process or to
perform services on our behalf. When we share personal information with
these companies, they are required to limit their use of personal
information to the particular purpose for which it was shared and they are
not allowed to share personal information with others except to fulfill that
limited purpose.
3. HOW DO WE PROTECT THE SECURITY AND CONFIDENTIALITY OF PERSONAL
INFORMATION WE COLLECT ABOUT YOU?
We maintain physical, electronic and procedural security measures to help
safeguard the personal information we collect about you. We have internal
policies governing the proper handling of client information. Third parties
that provide support or marketing services on our behalf may also receive
personal information, and we require them to adhere to confidentiality
standards with respect to such information.
Van Kampen Funds Inc.
1 Parkview Plaza
P.O. Box 5555
Oakbrook Terrace, IL 60181-5555
www.vankampen.com
Copyright (C)2005 Van Kampen Funds Inc. All rights reserved.
Member NASD/SIPC.
VMO ANR 1/06
(VAN KAMPEN INVESTMENTS SHINE LOGO) RN05-03015P-Y10/05
Item 2. Code of Ethics.
(a) The Trust has adopted a code of ethics (the "Code of Ethics") that applies
to its principal executive officer, principal financial officer, principal
accounting officer or controller, or persons performing similar functions,
regardless of whether these individuals are employed by the Trust or a third
party.
(b) No information need be disclosed pursuant to this paragraph.
(c) The Trust has amended its Code of Ethics during the period covered by the
shareholder report presented in Item 1 hereto to delete from the end of the
following paragraph on page 2 of the Code the phrase "to the detriment of the
Fund.":
"Each Covered Officer must not use his personal influence or personal
relationship improperly to influence investment decisions or financial reporting
by the Fund whereby the Covered Officer would benefit personally (directly or
indirectly)."
Further, due to personnel changes at the Adviser, the list of Covered Officers
set forth in Exhibit B and the General Counsel designee to whom questions about
the application of the Code should be referred in Exhibit C were amended during
the period. Exhibit B was then amended again in March 2005 and a third time in
August 2005 and a fourth time in September 2005. All four editions of Exhibit B
are attached. Additionally, Exhibit B was amended to remove Mitchell M. Merin as
a covered officer.
(d) Not applicable.
(e) Not applicable.
(f)
(1) The Trust's Code of Ethics is attached hereto as Exhibit 12A.
(2) Not applicable.
(3) Not applicable.
Item 3. Audit Committee Financial Expert.
The Trust's Board of Trustees has determined that it has two "audit committee
financial experts" serving on its audit committee, each of whom are
"independent" Trustees : Jerry Choate and R. Craig Kennedy. Under applicable
securities laws, a person who is determined to be an audit committee financial
expert will not be deemed an "expert" for any purpose, including without
limitation for the purposes of Section 11 of the Securities Act of 1933, as a
result of being designated or identified as an audit committee financial expert.
The designation or identification of a person as an audit committee financial
expert does not impose on such person any duties, obligations, or liabilities
that are greater than the duties, obligations, and liabilities imposed on such
person as a member of the audit committee and Board of Trustees in the absence
of such designation or identification.
Item 4. Principal Accountant Fees and Services.
(a)(b)(c)(d) and (g). Based on fees billed for the periods shown:
REGISTRANT COVERED ENTITIES(1)
2005
AUDIT FEES................................ $ 32,350 N/A
NON-AUDIT FEES
AUDIT-RELATED FEES...................... $ 400 $ 321,000(2)
TAX FEES................................ $ 1,600(3) $ 0
ALL OTHER FEES.......................... $ 0 $ 0
TOTAL NON-AUDIT FEES...................... $ 2,000 $ 321,000
TOTAL..................................... $ 34,350 $ 321,000
REGISTRANT COVERED ENTITIES(1)
2004
AUDIT FEES................................ $ 29,480 N/A
NON-AUDIT FEES
AUDIT-RELATED FEES...................... $ 370 $ 198,000(2)
TAX FEES................................ $ 1,550(3) $ 0
ALL OTHER FEES.......................... $ 0 $ 0
TOTAL NON-AUDIT FEES...................... $ 1,920 $ 198,000
TOTAL..................................... $ 31,400 $ 198,000
N/A- Not applicable, as not required by Item 4.
(1) Covered Entities include the Adviser (excluding sub-advisors) and any
entity controlling, controlled by or under common control with the Adviser
that provides ongoing services to the Registrant.
(2) Audit-Related Fees represent assurance and related services provided that
are reasonably related to the performance of the audit of the financial
statements of the Covered Entities' and funds advised by the Adviser or
its affiliates, specifically attestation services provided in connection
with a SAS 70 Report.
(3) Tax Fees represent tax advice and compliance services provided in
connection with the review of the Registrant's tax.
(e)(1) The audit committee's pre-approval policies and procedures are as
follows:
JOINT AUDIT COMMITTEE
AUDIT AND NON-AUDIT SERVICES
PRE-APPROVAL POLICY AND PROCEDURES
OF THE
VAN KAMPEN FUNDS
AS ADOPTED JULY 23, 2003 AND AMENDED MAY 26, 2004(1)
1. STATEMENT OF PRINCIPLES
The Audit Committee of the Board is required to review and, in its sole
discretion, pre-approve all Covered Services to be provided by the Independent
Auditors to the Fund and Covered Entities in order to assure that services
performed by the Independent Auditors do not impair the auditor's independence
from the Fund.(2)
The SEC has issued rules specifying the types of services that an
independent auditor may not provide to its audit client, as well as the audit
committee's administration of the engagement of the independent auditor. The
SEC's rules establish two different approaches to pre-approving services, which
the SEC considers to be equally valid. Proposed services either: may be
pre-approved without consideration of specific case-by-case services by the
Audit Committee ("general pre-approval"); or require the specific pre-approval
of the Audit Committee ("specific pre-approval"). The Audit Committee believes
that the combination of these two approaches in this Policy will result in an
effective and efficient procedure to pre-approve services performed by the
Independent Auditors. As set forth in this Policy, unless a type of service has
received general pre-approval, it will require specific pre-approval by the
Audit Committee (or by any member of the Audit Committee to which pre-approval
authority has been delegated) if it is to be provided by the Independent
Auditors. Any proposed services exceeding pre-approved cost levels or budgeted
amounts will also require specific pre-approval by the Audit Committee.
For both types of pre-approval, the Audit Committee will consider whether
such services are consistent with the SEC's rules on auditor independence. The
Audit Committee will also consider whether the Independent Auditors are best
positioned to provide the most effective and efficient services, for reasons
such as its familiarity with the Fund's business, people, culture, accounting
systems, risk profile and other factors, and whether the service might enhance
the Fund's ability to manage or control risk or improve audit quality. All such
factors will be considered as a whole, and no one factor should necessarily be
determinative.
The Audit Committee is also mindful of the relationship between fees for
audit and non-audit services in deciding whether to pre-approve any such
services and may determine for each fiscal year, the appropriate ratio between
the total amount of fees for Audit, Audit-related and Tax services for the Fund
(including any Audit-related or Tax service fees for Covered Entities that were
subject to pre-approval), and the total amount of fees for certain permissible
non-audit services classified as All Other services for the Fund (including any
such services for Covered Entities subject to pre-approval).
The appendices to this Policy describe the Audit, Audit-related, Tax and
All Other services that have the general pre-approval of the Audit Committee.
The term of any general pre-approval is 12 months from the date of pre-approval,
unless the Audit Committee considers and provides a different period and states
otherwise. The Audit Committee will annually review and pre-approve the services
that may be provided by the Independent Auditors without obtaining specific
pre-approval
--------------
(1) This Joint Audit Committee Audit and Non-Audit Services Pre-Approval
Policy and Procedures (the "Policy"), amended as of the date above,
supercedes and replaces all prior versions that may have been amended from
time to time.
(2) Terms used in this Policy and not otherwise defined herein shall have the
meanings as defined in the Joint Audit Committee Charter.
from the Audit Committee. The Audit Committee will add to or subtract from the
list of general pre-approved services from time to time, based on subsequent
determinations.
The purpose of this Policy is to set forth the policy and procedures by
which the Audit Committee intends to fulfill its responsibilities. It does not
delegate the Audit Committee's responsibilities to pre-approve services
performed by the Independent Auditors to management.
The Fund's Independent Auditors have reviewed this Policy and believes
that implementation of the Policy will not adversely affect the Independent
Auditors' independence.
2. DELEGATION
As provided in the Act and the SEC's rules, the Audit Committee may
delegate either type of pre-approval authority to one or more of its members.
The member to whom such authority is delegated must report, for informational
purposes only, any pre-approval decisions to the Audit Committee at its next
scheduled meeting.
3. AUDIT SERVICES
The annual Audit services engagement terms and fees are subject to the
specific pre-approval of the Audit Committee. Audit services include the annual
financial statement audit and other procedures required to be performed by the
Independent Auditors to be able to form an opinion on the Fund's financial
statements. These other procedures include information systems and procedural
reviews and testing performed in order to understand and place reliance on the
systems of internal control, and consultations relating to the audit. The Audit
Committee will monitor the Audit services engagement as necessary, but no less
than on a quarterly basis, and will also approve, if necessary, any changes in
terms, conditions and fees resulting from changes in audit scope, Fund structure
or other items.
In addition to the annual Audit services engagement approved by the Audit
Committee, the Audit Committee may grant general pre-approval to other Audit
services, which are those services that only the Independent Auditors reasonably
can provide. Other Audit services may include statutory audits and services
associated with SEC registration statements (on Forms N-1A, N-2, N-3, N-4,
etc.), periodic reports and other documents filed with the SEC or other
documents issued in connection with securities offerings.
The Audit Committee has pre-approved the Audit services in Appendix B.1.
All other Audit services not listed in Appendix B.1 must be specifically
pre-approved by the Audit Committee (or by any member of the Audit Committee to
which pre-approval has been delegated).
4. AUDIT-RELATED SERVICES
Audit-related services are assurance and related services that are
reasonably related to the performance of the audit or review of the Fund's
financial statements or, to the extent they are Covered Services, the Covered
Entities' financial statements, or that are traditionally performed by the
Independent Auditors. Because the Audit Committee believes that the provision of
Audit-related services does not impair the independence of the auditor and is
consistent with the SEC's rules on auditor independence, the Audit Committee may
grant general pre-approval to Audit-related services. Audit-related services
include, among others, accounting consultations related to accounting, financial
reporting or disclosure matters not classified as "Audit services"; assistance
with understanding and implementing new accounting and financial reporting
guidance from rulemaking authorities; agreed-upon or expanded audit procedures
related to accounting and/or billing records required to respond to or comply
with financial, accounting or regulatory reporting matters; and assistance with
internal control reporting requirements under Forms N-SAR and/or N-CSR.
The Audit Committee has pre-approved the Audit-related services in
Appendix B.2. All other Audit-related services not listed in Appendix B.2 must
be specifically pre-approved by the Audit Committee (or by any member of the
Audit Committee to which pre-approval has been delegated).
5. TAX SERVICES
The Audit Committee believes that the Independent Auditors can provide Tax
services to the Fund and, to the extent they are Covered Services, the Covered
Entities, such as tax compliance, tax planning and tax advice without impairing
the auditor's independence, and the SEC has stated that the Independent Auditors
may provide such services. Hence, the Audit Committee believes it may grant
general pre-approval to those Tax services that have historically been provided
by the Independent Auditors, that the Audit Committee has reviewed and believes
would not impair the independence of the Independent Auditors, and that are
consistent with the SEC's rules on auditor independence. The Audit Committee
will not permit the retention of the Independent Auditors in connection with a
transaction initially recommended by the Independent Auditors, the sole business
purpose of which may be tax avoidance and the tax treatment of which may not be
supported in the Internal Revenue Code and related regulations. The Audit
Committee will consult with Director of Tax or outside counsel to determine that
the tax planning and reporting positions are consistent with this policy.
Pursuant to the preceding paragraph, the Audit Committee has pre-approved
the Tax Services in Appendix B.3. All Tax services involving large and complex
transactions not listed in Appendix B.3 must be specifically pre-approved by the
Audit Committee (or by any member of the Audit Committee to which pre-approval
has been delegated), including tax services proposed to be provided by the
Independent Auditors to any executive officer or trustee/director/managing
general partner of the Fund, in his or her individual capacity, where such
services are paid for by the Fund (generally applicable only to internally
managed investment companies).
6. ALL OTHER SERVICES
The Audit Committee believes, based on the SEC's rules prohibiting the
Independent Auditors from providing specific non-audit services, that other
types of non-audit services are permitted. Accordingly, the Audit Committee
believes it may grant general pre-approval to those permissible non-audit
services classified as All Other services that it believes are routine and
recurring services, would not impair the independence of the auditor and are
consistent with the SEC's rules on auditor independence.
The Audit Committee has pre-approved the All Other services in Appendix
B.4. Permissible All Other services not listed in Appendix B.4 must be
specifically pre-approved by the Audit Committee (or by any member of the Audit
Committee to which pre-approval has been delegated).
A list of the SEC's prohibited non-audit services is attached to this
policy as Appendix B.5. The SEC's rules and relevant guidance should be
consulted to determine the precise definitions of these services and the
applicability of exceptions to certain of the prohibitions.
7. PRE-APPROVAL FEE LEVELS OR BUDGETED AMOUNTS
Pre-approval fee levels or budgeted amounts for all services to be
provided by the Independent Auditors will be established annually by the Audit
Committee. Any proposed services exceeding these levels or amounts will require
specific pre-approval by the Audit Committee. The Audit Committee is mindful of
the overall relationship of fees for audit and non-audit services in determining
whether to pre-approve any such services. For each fiscal year, the Audit
Committee may determine the appropriate ratio between the total amount of fees
for Audit, Audit-related, and Tax services for the Fund (including any
Audit-related or Tax services fees for Covered Entities subject to
pre-approval), and the total amount of fees for certain permissible non-audit
services classified as All Other services for the Fund (including any such
services for Covered Entities subject to pre-approval).
8. PROCEDURES
All requests or applications for services to be provided by the
Independent Auditors that do not require specific approval by the Audit
Committee will be submitted to the Fund's Chief Financial Officer and must
include a detailed description of the services to be rendered. The Fund's Chief
Financial Officer will determine whether such services are included within the
list of services that have received the general pre-approval of the Audit
Committee. The Audit Committee will be informed on a timely basis of any such
services rendered by the Independent Auditors. Requests or applications to
provide services that require specific approval by the Audit Committee will be
submitted to the Audit Committee by both the Independent Auditors and the Fund's
Chief Financial Officer, and must include a joint statement as to whether, in
their view, the request or application is consistent with the SEC's rules on
auditor independence.
The Audit Committee has designated the Fund's Chief Financial Officer to
monitor the performance of all services provided by the Independent Auditors and
to determine whether such services are in compliance with this Policy. The
Fund's Chief Financial Officer will report to the Audit Committee on a periodic
basis on the results of its monitoring. A sample report is included as Appendix
B.7. Both the Fund's Chief Financial Officer and management will immediately
report to the chairman of the Audit Committee any breach of this Policy that
comes to the attention of the Fund's Chief Financial Officer or any member of
management.
9. ADDITIONAL REQUIREMENTS
The Audit Committee has determined to take additional measures on an
annual basis to meet its responsibility to oversee the work of the Independent
Auditors and to assure the auditor's independence from the Fund, such as
reviewing a formal written statement from the Independent Auditors delineating
all relationships between the Independent Auditors and the Fund, consistent with
Independence Standards Board No. 1, and discussing with the Independent Auditors
its methods and procedures for ensuring independence.
10. COVERED ENTITIES
Covered Entities include the Fund's investment adviser(s) and any entity
controlling, controlled by or under common control with the Fund's investment
adviser(s) that provides ongoing services to the Fund(s). Beginning with
non-audit service contracts entered into on or after May 6, 2003, the Fund's
audit committee must pre-approve non-audit services provided not only to the
Fund but also to the Covered Entities if the engagements relate directly to the
operations and financial reporting of the Fund. This list of Covered Entities
would include:
- Van Kampen Investments Inc.
- Van Kampen Asset Management
- Van Kampen Advisors Inc.
- Van Kampen Funds Inc.
- Van Kampen Investor Services Inc.
- Morgan Stanley Investment Management Inc.
- Morgan Stanley Trust Company
- Morgan Stanley Investment Management Ltd.
- Morgan Stanley Investment Management Company
- Morgan Stanley Asset & Investment Trust Management Company Ltd.
(e)(2) Beginning with non-audit service contracts entered into on or after May
6, 2003, the audit committee also is required to pre-approve services to Covered
Entities to the extent that the services
are determined to have a direct impact on the operations or financial reporting
of the Registrant. 100% of such services were pre-approved by the audit
committee pursuant to the Audit Committee's pre-approval policies and procedures
(included herein).
(f) Not applicable.
(g) See table above.
(h) The audit committee of the Board of Trustees has considered whether the
provision of services other than audit services performed by the auditors to the
Registrant and Covered Entities is compatible with maintaining the auditors'
independence in performing audit services.
Item 5. Audit Committee of Listed Registrants.
(a) The Trust has a separately-designated standing audit committee established
in accordance with Section 3(a)(58)(A) of the Exchange Act whose members are: R.
Craig Kennedy, Jerry Choate and Rod Dammeyer.
(b) Not applicable.
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.
The Trust invests in exclusively non-voting securities and therefore this item
is not applicable to the Trust.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Applicable only for reports covering fiscal years on or after December 31, 2005.
Item 9. Purchase 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) The Code of Ethics for Principal Executive and Senior Financial Officers is
attached hereto.
(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 Municipal Opportunity Trust
By: /s/ Ronald E. Robison
-------------------------
Name: Ronald E. Robison
Title: Principal Executive Officer
Date: December 19, 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: December 19, 2005
By: /s/ Phillip G. Goff
-----------------------------
Name: Phillip G. Goff
Title: Principal Financial Officer
Date: December 19, 2005