UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSRS
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-7868
Van Kampen Advantage Municipal Income Trust II
--------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
1221 Avenue of the Americas, New York, New York 10020
--------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
Ronald Robison
1221 Avenue of the Americas, New York, New York 10020
--------------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: 212-762-4000
Date of fiscal year end: 10/31
Date of reporting period: 4/30/06
Item 1. Reports to Shareholders.
The Trust's semiannual report transmitted to shareholders pursuant to Rule 30e-1
under the Investment Company Act of 1940 is as follows:
Welcome, Shareholder
In this report, you'll learn about how your investment in Van Kampen
Advantage Municipal Income Trust II performed during the semiannual
period. The portfolio management team will provide an overview of the
market conditions and discuss some of the factors that affected
investment performance during the reporting period. In addition, this
report includes the trust's financial statements and a list of trust
investments as of April 30, 2006.
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 THE TRUST SHARES MAY THEREFORE BE LESS THAN WHAT YOU
PAID FOR THEM. ACCORDINGLY, YOU CAN LOSE MONEY INVESTING IN THIS TRUST.
INCOME MAY SUBJECT CERTAIN INDIVIDUALS TO THE FEDERAL ALTERNATIVE MINIMUM
TAX (AMT).
---------------------------------------------------------------------------------------
NOT FDIC INSURED OFFER NO BANK GUARANTEE MAY LOSE VALUE
---------------------------------------------------------------------------------------
NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY NOT A DEPOSIT
---------------------------------------------------------------------------------------
Performance Summary as of 4/30/06
ADVANTAGE MUNICIPAL INCOME TRUST II
SYMBOL: VKI
------------------------------------------------------------
AVERAGE ANNUAL BASED ON BASED ON
TOTAL RETURN NAV MARKET PRICE
Since Inception (8/27/93) 6.39% 5.52%
10-year 7.81 8.62
5-year 7.91 8.93
1-year 3.81 4.30
6-month 2.67 3.93
------------------------------------------------------------
PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH IS NO GUARANTEE OF
FUTURE RESULTS, AND CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE FIGURES
SHOWN. 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 SIX-MONTH PERIOD ENDED APRIL 30, 2006
MARKET CONDITIONS
The economy continued to grow during the six-month period ended April 30, 2006,
demonstrating some resiliency in the face of rising oil and other commodity
prices, the Gulf Coast hurricanes, and emerging weakness in the housing market.
This expansion was more modest in the final months of 2005, but gained
considerable momentum in the first quarter.
Against the backdrop of growth and good employment data, the Federal Open Market
Committee (the "Fed") continued raising the federal funds target rate during the
period, implementing four additional increases of 25 basis points each. These
moves brought the target rate to 4.75 percent. The final hike of the period
represented the fifteenth consecutive increase--the longest stretch of increases
in 25 years. As the period came to a close, market observers speculated about
the Fed's near-term intentions, given the central bank's view that although
longer-term inflation currently appeared contained, commodity prices could
amplify inflationary pressures.
Returns across the municipal bond market varied significantly. As investors
sought income opportunities, lower rated bonds outpaced investment-grade bonds
by a wide margin. Long-term bonds earned the best returns, broadly speaking,
while bonds in the three-to-seven year range posted the most muted gains.
Municipal bond issuance was robust during the final months of 2005. (In fact,
2005 marked a record high for municipal bond volume.) The tide changed in 2006,
however. As rising rates discouraged issuers from refinancing debt, national
municipal issuance dropped by approximately 25 percent in the first four months
of the year versus the same period in 2005. While supply ebbed, the market's
appetite for municipal bonds remained strong, with particularly heavy demand
from high yield municipal bond funds.
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 both an NAV basis and a market price basis, the trust outperformed
its benchmark index, the Lehman Brothers Municipal Bond Index.
TOTAL RETURNS FOR THE SIX-MONTH PERIOD ENDED APRIL 30, 2006
--------------------------------------------------------------------
BASED ON BASED ON LEHMAN BROTHERS MUNICIPAL
NAV MARKET PRICE BOND INDEX
2.67% 3.93% 1.56%
--------------------------------------------------------------------
Performance data quoted represents past performance, which is no guarantee of
future results, and current performance may be lower or higher than the figures
shown. Investment return, net asset value and common share market price will
fluctuate and trust shares, when sold, may be worth more or less than their
original cost. See Performance Summary for additional performance information
and index definition.
The trust uses leverage to enhance its dividend to common shareholders. The
trust borrows money at short-term rates through the issuance of preferred
shares. The proceeds are reinvested in longer-term securities, taking advantage
of the difference between short- and longer-term rates. The Fed's policy of
raising interest rates throughout the period made the trust's borrowing activity
more expensive, which reduced the benefits of the trust's leverage activities.
Following our long-standing "relative value" discipline, we favored high quality
bonds with good liquidity. (Liquid securities are those for which there is a
robust market of purchasers and sellers.) Based on our in-depth proprietary
research, we purchased bonds we believed to be attractively valued, and then
sold them when they reached our return targets. We then invested the proceeds
into bonds which we believed offered greater future total return prospects.
Accordingly, we pared exposure to the uppermost credit tiers, and added to the
trust's stake in higher-yielding investment-grade credits. Issues rated BBB
represented 13 percent of the trust's long-term holdings at the close of the
period. This decision served the trust well. As interest rates remained
relatively low and investors sought income, the market continued to reward
higher yielding credits.
Our analysis had suggested that interest rates would continue to rise, with the
yields of short-term bonds advancing more rapidly than those of long-term
issues. Our sales focused on shorter maturity, pre-refunded bonds and on
intermediate-term issues. We invested in longer maturity bonds, employing
hedging strategies to mitigate interest rate volatility. Overall, we kept the
trust's
3
duration (a measure of interest rate sensitivity) shorter than that of the
Lehman benchmark.
The trust remained well diversified across the major sectors municipal market,
with a continued emphasis on essential services. As of the close of the period,
hospitals, public education, and general purpose bonds represented the trust's
largest sector weightings. Issues rated AA or higher represented approximately
76 percent of bonds at the close of the reporting period.
During the reporting period, Van Kampen Municipal Opportunity Trust II and Van
Kampen Value Municipal Income Trust were reorganized into Van Kampen Advantage
Municipal Income Trust II.
VKI's procedure for reinvesting all dividends and distributions in common shares
is through purchases in the open market. This method helps support the market
value of the Fund's shares. In addition, we would like to remind you that the
Trustees have approved a procedure whereby the Fund may, when appropriate,
purchase shares in the open market or in privately negotiated transactions at a
price not above market value or net asset value, whichever is lower at the time
of purchase.
There is no guarantee that any sectors mentioned will continue to perform as
discussed herein or that securities in such sectors will be held by the trust in
the future.
4
RATINGS ALLOCATION AS OF 4/30/06
AAA/Aaa 66.1%
AA/Aa 9.5
A/A 8.0
BBB/Baa 13.4
BB/Ba 0.2
B/B 0.3
Non-Rated 2.5
TOP FIVE SECTORS AS OF 4/30/06
Hospital 16.1%
Public Education 10.3
General Purpose 10.0
Airports 8.4
Public Buildings 7.0
SUMMARY OF INVESTMENTS BY STATE CLASSIFICATION AS OF 4/30/06
California 15.4%
Texas 8.4
Illinois 8.1
New York 6.8
Arizona 4.2
New Jersey 4.1
Florida 3.5
Missouri 3.4
Massachusetts 3.4
Louisiana 3.3
Tennessee 2.9
Puerto Rico 2.8
Colorado 2.7
Nevada 2.6
Georgia 2.6
Washington 2.5
Michigan 2.4
South Carolina 2.2
Ohio 1.9
Oregon 1.9
Indiana 1.8
Maryland 1.5
Hawaii 1.1
West Virginia 1.0
Alabama 1.0
Virginia 0.8
Pennsylvania 0.8
Kansas 0.7
Connecticut 0.7
Mississippi 0.7
Minnesota 0.6
District of Columbia 0.5
Wisconsin 0.4
Oklahoma 0.4
Nebraska 0.4
(continued on next page)
5
SUMMARY OF INVESTMENTS BY STATE CLASSIFICATION AS OF 4/30/06
(continued from previous page)
Iowa 0.4
North Carolina 0.3
New Hampshire 0.3
Arkansas 0.3
Utah 0.3
South Dakota 0.2
Montana 0.2
Wyoming 0.2
New Mexico 0.1
Alaska 0.1
Kentucky 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. The semiannual reports and the
annual reports are filed electronically with the Securities and Exchange
Commission (SEC) on Form N-CSRS and Form N-CSR, respectively. Van Kampen
also delivers the semiannual and annual reports to 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 without charge by visiting our Web site at www.vankampen.com.
This information is also available on the Securities and Exchange
Commission's Web site at http://www.sec.gov.
8
VAN KAMPEN ADVANTAGE MUNICIPAL INCOME TRUST II
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2006 (UNAUDITED)
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
----------------------------------------------------------------------------------------------
MUNICIPAL BONDS 162.5%
ALABAMA 1.6%
$ 2,000 Birmingham Baptist Med Ctr AL Spl Care Fac
Fin Auth Rev Baptist Hlth Sys Ser A....... 5.875% 11/15/24 $ 2,098,340
3,000 Birmingham Baptist Med Ctr AL Spl Care Fac
Fin Auth Rev Baptist Hlth Sys Ser A....... 5.000 11/15/30 2,927,400
4,000 Jefferson Cnty, AL Ltd Oblig Sch Wt Ser
A......................................... 5.250 01/01/23 4,189,960
4 Mobile, AL Indl Dev Brd Solid Waste Disp
Rev Mobile Energy Svc Co Proj Rfdg........ 6.950 01/01/20 353
1,000 Valley, AL Spl Care Fac Fin Auth Rev
Lanier Mem Hosp Ser A..................... 5.600 11/01/16 1,016,450
-------------
10,232,503
-------------
ALASKA 0.2%
1,000 Alaska St Hsg Fin Corp Gen Hsg Ser A (FGIC
Insd)..................................... 5.250 12/01/41 1,040,980
-------------
ARIZONA 6.8%
5,000 Arizona Sch Fac Brd Ctf Ser B (Prerefunded
@ 09/01/13) (FGIC Insd)................... 5.250 09/01/18 5,406,500
3,000 Arizona St Transn Brd Hwy Rev Ser B....... 5.250 07/01/19 3,186,360
2,235 Arizona Tourism & Sports Auth Tax Rev
Multipurp Stad Fac Ser A (MBIA Insd)...... 5.375 07/01/21 2,385,393
5,250 Arizona Tourism & Sports Auth Tax Rev
Multipurp Stad Fac Ser A (MBIA Insd)...... 5.375 07/01/23 5,603,272
5,000 Glendale, AZ Indl Dev Auth John C Lincoln
Hlth Ser B Rfdg........................... 5.000 12/01/37 4,956,600
4,500 Maricopa Cnty, AZ Hosp Rev Sun Hlth
Corp...................................... 5.000 04/01/35 4,465,125
2,000 Phoenix, AZ Civic Impt Corp Arpt Rev Jr
Lien (AMT) (FGIC Insd).................... 5.375 07/01/29 2,027,920
2,575 Pima Cnty, AZ Indl Dev Auth Indl Rev Lease
Oblig Irvington Proj Tucson Ser A Rfdg
(FSA Insd)................................ 7.250 07/15/10 2,591,119
2,685 South Campus Group LLC AZ Std Hsg Rev AZ
St Univ South Campus Proj (MBIA Insd)..... 5.625 09/01/35 2,911,695
1,300 Tempe, AZ Excise Tax Rev Rfdg............. 5.250 07/01/18 1,386,632
9,000 University Med Ctr Corp AZ Hosp Rev....... 5.000 07/01/35 8,887,680
-------------
43,808,296
-------------
ARKANSAS 0.5%
1,930 Arkansas St Cap Apprec College Svg........ * 06/01/16 1,236,860
2,000 Arkansas St Dev Fin Auth Rev St Agy Fac
Donaghey Plaza Proj (FSA Insd)............ 5.000 06/01/34 2,051,420
-------------
3,288,280
-------------
See Notes to Financial Statements 9
VAN KAMPEN ADVANTAGE MUNICIPAL INCOME TRUST II
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2006 (UNAUDITED) continued
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
----------------------------------------------------------------------------------------------
CALIFORNIA 25.0%
$ 6,000 Anaheim, CA Pub Fin Auth Lease Rev Cap
Apprec Sub Pub Impt Proj Ser C (FSA
Insd)..................................... * 09/01/19 $ 3,194,820
7,195 Anaheim, CA Pub Fin Auth Lease Rev Cap
Apprec Sub Pub Impt Proj Ser C (FSA
Insd)..................................... * 09/01/21 3,444,246
1,300 Anaheim, CA Pub Fin Auth Lease Rev Pub
Impt Proj Ser C (FSA Insd)................ 6.000% 09/01/16 1,476,800
2,095 Bay Area Govt Assn CA Rev Tax Alloc CA
Redev Pool Ser A (XLCA Insd).............. 5.250 09/01/35 2,206,873
3,000 California Cnty, CA Tob Securitization Agy
Tob LA Cnty Sec (a)....................... 0/5.250 06/01/21 2,338,350
2,000 California Cnty, CA Tob Securitization Agy
Tob Sonoma Cnty Corp Rfdg................. 5.125 06/01/38 1,950,700
2,050 California Cnty, CA Tob Securitization Agy
Tob Merced Cnty Ser A Rfdg................ 5.125 06/01/38 1,999,467
1,000 California Cnty, CA Tob Securitization Agy
Tob Merced Cnty Ser A Rfdg................ 5.250 06/01/45 986,050
6,750 California Ed Fac Auth Rev Pepperdine Univ
Ser A Rfdg (FGIC Insd).................... 5.000 09/01/33 6,928,402
5,500 California Hlth Fac Fin Auth Rev Cedars
Sinai Med Ctr Rfdg........................ 5.000 11/15/34 5,537,620
3,000 California Pollutn Ctl Fin Auth Solid
Waste Disp Rev Waste Mgmt Inc Proj Ser C
(AMT)..................................... 5.125 11/01/23 3,067,560
1,000 California St (AMBAC Insd)................ 5.125 10/01/27 1,024,140
10,000 California St (Prerefunded @ 03/01/10)
(MBIA Insd) (b)........................... 5.500 03/01/17 10,749,600
2,000 California St Dept Wtr Res Pwr Ser A
(Prerefunded @ 05/01/12).................. 6.000 05/01/15 2,256,300
3,000 California St Dept Wtr Res Pwr Ser A
(Prerefunded @ 05/01/12).................. 5.875 05/01/16 3,365,310
2,345 California St Dept Wtr Res Pwr Ser A
(Prerefunded @ 05/01/12) (XLCA Insd)...... 5.375 05/01/17 2,568,643
5,000 California St Pub Wks Brd Dept Gen Svc Cap
East End Ser A (AMBAC Insd)............... 5.125 12/01/21 5,212,550
6,000 California St Pub Wks Brd Lease Rev Dept
of Corrections St Prisons Ser A Rfdg
(AMBAC Insd).............................. 5.250 12/01/13 6,523,500
4,000 California St Pub Wks Brd Lease Rev Dept
of Corrections St Prisons Ser A Rfdg
(AMBAC Insd).............................. 5.000 12/01/19 4,209,040
5,000 California St Pub Wks Brd Lease Rev Dept
of Mental Hlth Coalinga Ser A............. 5.000 06/01/24 5,131,950
4,600 California St Pub Wks Brd Lease Rev Var
Univ CA Proj Ser A Rfdg................... 5.500 06/01/10 4,861,234
5,905 California St Pub Wks Brd Lease Rev Var
Univ CA Proj Ser A Rfdg................... 5.500 06/01/14 6,410,763
5,000 California St Rfdg........................ 5.000 02/01/19 5,139,300
10 See Notes to Financial Statements
VAN KAMPEN ADVANTAGE MUNICIPAL INCOME TRUST II
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2006 (UNAUDITED) continued
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
----------------------------------------------------------------------------------------------
CALIFORNIA (CONTINUED)
$ 6,500 California Statewide Cmnty Dev Auth Rev
Daughters of Charity Hlth Ser A........... 5.250% 07/01/30 $ 6,610,760
1,000 California Statewide Cmnty Dev Auth Rev
Daughters of Charity Hlth Ser A........... 5.250 07/01/35 1,015,790
4,000 California Statewide Cmnty Dev Auth Rev
Hlth Fac Adventist Hlth Ser A............. 5.000 03/01/30 4,018,200
2,000 Florin, CA Res Consv Dist Cap Impt Elk
Grove Wtr Svc Ser A (MBIA Insd)........... 5.000 09/01/33 2,055,260
5,000 Foothill/Eastern Corridor Agy CA Toll Rd
Rev Cap Apprec Rfdg (MBIA Insd)........... * 01/15/18 2,750,550
30,000 Foothill/Eastern Corridor Agy CA Toll Rd
Rev Ser A Rfdg............................ * 01/15/22 12,264,000
3,350 Imperial Irr Dist CA Ctf Part Elec Sys
Proj (FSA Insd) (b)....................... 5.250 11/01/19 3,555,690
3,950 Los Angeles, CA Dept Wtr & Pwr Ser A (FGIC
Insd)..................................... 5.125 07/01/40 4,056,926
5,000 Los Angeles, CA Uni Sch Dist Ser A (FSA
Insd)..................................... 5.250 07/01/20 5,311,200
5,500 Port Oakland, CA Ser L (AMT) (FGIC
Insd)..................................... 5.000 11/01/32 5,571,555
9,000 Riverside Cnty, CA Asset Leasing Corp
Leasehold Rev Riverside Cnty Hosp Proj
(MBIA Insd)............................... * 06/01/21 4,315,590
13,880 San Joaquin Hills, CA Transn Corridor Agy
Toll Rd Rev Cap Apprec Ser A Rfdg (MBIA
Insd)..................................... * 01/15/28 4,759,868
4,200 Tobacco Securitization Auth Northn CA Tob
Settlement Rev Ser A1..................... 5.375 06/01/38 4,229,820
4,300 Tobacco Securitization Auth Northn CA Tob
Settlement Rev Ser A1..................... 5.500 06/01/45 4,350,353
2,720 Washington, CA Uni Sch Dist Yolo Cnty
Election 2004 Ser A (FGIC Insd) (b)....... 5.250 08/01/19 2,895,522
3,070 Washington, CA Uni Sch Dist Yolo Cnty
Election 2004 Ser A (FGIC Insd) (b)....... 5.250 08/01/20 3,261,783
-------------
161,606,085
-------------
COLORADO 4.4%
4,340 Adams & Arapahoe Cntys, CO Jt Sch Dist Ser
A (FSA Insd).............................. 5.250 12/01/18 4,631,388
1,945 Colorado Ed & Cultural Charter Sch
Pinnacle Impt & Rfdg (XLCA Insd).......... 5.250 06/01/23 2,045,304
3,000 Colorado Hlth Fac Auth Rev Catholic Hlth
Initiatives Ser A (Escrowed to
Maturity)................................. 5.500 03/01/32 3,228,150
4,250 Colorado Hlth Fac Auth Rev Covenant
Retirement Cmnty Inc...................... 5.000 12/01/35 4,150,337
2,700 Colorado Hlth Fac Auth Rev Hlth Fac
Evangelical Lutheran...................... 5.000 06/01/35 2,674,539
See Notes to Financial Statements 11
VAN KAMPEN ADVANTAGE MUNICIPAL INCOME TRUST II
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2006 (UNAUDITED) continued
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
----------------------------------------------------------------------------------------------
COLORADO (CONTINUED)
$ 2,250 Colorado Hlth Fac Auth Rev Hosp Portercare
Adventist Hlth (Prerefunded @ 11/15/11)... 6.500% 11/15/31 $ 2,558,587
80 Colorado Hsg Fin Auth Single Family Pgm Sr
Ser A2 (AMT).............................. 7.250 05/01/27 82,066
49 Colorado Hsg Fin Auth Single Family Pgm Sr
Ser B1 (AMT).............................. 7.650 11/01/26 49,333
1,500 Denver, CO City & Cnty Arpt Rev Ser D
(AMT)..................................... 7.750 11/15/13 1,695,150
6,160 E-470 Pub Hwy Auth CO Rev Sr Ser A (MBIA
Insd)..................................... 5.000 09/01/21 6,302,666
1,000 Park Creek Metro Dist CO Rev Sr Ltd Tax
Ppty Tax Rfdg............................. 5.500 12/01/30 1,023,280
-------------
28,440,800
-------------
CONNECTICUT 1.1%
5,000 Connecticut St Ser C (FGIC Insd).......... 5.000 04/01/22 5,224,250
1,010 Mashantucket Western Pequot Tribe CT Spl
Rev Ser A, 144A--Private Placement (c).... 6.400 09/01/11 1,036,866
990 Mashantucket Western Pequot Tribe CT Spl
Rev Ser A, 144A--Private Placement
(Prerefunded @ 09/01/07) (c).............. 6.400 09/01/11 1,034,540
-------------
7,295,656
-------------
DISTRICT OF COLUMBIA 0.8%
5,000 Metropolitan Washington DC Arpt Auth Sys
Ser A (AMT) (FGIC Insd)................... 5.250 10/01/32 5,146,600
-------------
FLORIDA 5.7%
2,500 Dade Cnty, FL Wtr & Swr Sys Rev (FGIC
Insd)..................................... 5.250 10/01/21 2,570,275
570 Escambia Cnty, FL Hlth Fac Auth Rev (AMBAC
Insd)..................................... 5.950 07/01/20 598,528
1,000 Highlands Cnty, FL Hlth Fac Auth Rev Hosp
Adventist Hlth Ser D...................... 5.000 11/15/35 1,004,950
3,980 Jacksonville, FL Port Auth (AMT) (MBIA
Insd)..................................... 5.700 11/01/30 4,213,984
2,780 Jacksonville, FL Port Auth (Prerefunded @
11/01/10) (AMT) (MBIA Insd)............... 5.700 11/01/30 2,973,432
5,000 Jea, FL Wtr & Swr Sys Rev Ser C........... 5.000 10/01/41 5,019,500
3,000 Lake Cnty, FL Sch Brd Ctf Part
(Prerefunded @ 07/01/12) (AMBAC Insd)..... 5.375 07/01/17 3,246,570
11,500 Miami-Dade Cnty, FL Aviation Rev Miami
Intl Arpt (AMT) (FGIC Insd)............... 5.375 10/01/32 11,973,570
5,000 Ocoee, FL Wtr & Swr Sys Rev Impt & Rfdg
(AMBAC Insd).............................. 5.125 10/01/33 5,187,250
-------------
36,788,059
-------------
12 See Notes to Financial Statements
VAN KAMPEN ADVANTAGE MUNICIPAL INCOME TRUST II
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2006 (UNAUDITED) continued
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
----------------------------------------------------------------------------------------------
GEORGIA 3.9%
$ 2,000 Atlanta, GA Wtr & Wastewtr Rev (FSA
Insd)..................................... 5.000% 11/01/21 $ 2,082,240
5,000 Clayton Cnty & Clayton Cnty GA Wtr Auth
Wtr & Swr Rev............................. 5.000 05/01/20 5,230,600
5,000 Georgia Muni Elec Auth Pwr Rev Ser B
(Escrowed to Maturity) (FGIC Insd)........ 5.700 01/01/19 5,612,050
2,000 Georgia St Rd & Twy Auth Rev.............. 5.000 10/01/19 2,095,240
2,210 Marietta, GA Dev Auth Rev First Mtg Life
College Ser B (FSA Insd) (b).............. 5.375 09/01/09 2,249,183
6,740 Municipal Elec Auth GA Comb Turbine Proj
Ser A (MBIA Insd)......................... 5.250 11/01/20 7,129,100
1,000 Richmond Cnty, GA Dev Auth ASU Jaguar
Student Hsg LLC Ser A..................... 5.250 02/01/35 1,013,590
-------------
25,412,003
-------------
HAWAII 1.7%
10,430 Hawaii St Dept Budget & Fin Spl Purp Rev
Hawaiian Elec Co Inc Ser A (AMT) (MBIA
Insd)..................................... 5.650 10/01/27 11,179,813
-------------
ILLINOIS 13.2%
3,750 Bolingbrook, IL Cap Apprec Ser B (MBIA
Insd)..................................... * 01/01/32 918,150
1,710 Bolingbrook, IL Cap Apprec Ser C Rfdg
(MBIA Insd) (b)........................... * 01/01/29 559,273
6,000 Chicago, IL Lakefront Millenium Pkg Fac
(MBIA Insd) (a)........................... 0/5.750 01/01/29 6,465,240
13,100 Chicago, IL O'Hare Intl Arpt Rev Rols RR
II 494-1 (Acquired 12/16/05 to 02/17/06,
Cost $15,005,492) (Inverse Floating Rate)
(MBIA Insd) (d)........................... 6.586 01/01/24 14,757,805
1,500 Chicago, IL O'Hare Intl Arpt Rev Rols RR
II R 522 (Acquired 02/24/06, Cost
$1,772,100) (Inverse Floating Rate) (FGIC
Insd) (d)................................. 6.586 01/01/23 1,692,885
90 Chicago, IL Single Family Mtg Rev Ser A
(AMT) (GNMA Collateralized)............... 7.000 09/01/27 90,347
5 Chicago, IL Single Family Mtg Rev Ser B
(AMT) (GNMA Collateralized)............... 7.625 09/01/27 5,018
3,345 Cook Cnty, IL Sch Dist No. 100 Berwyn
South Ser D (FSA Insd).................... 5.500 12/01/23 3,635,680
4,500 Cook Cnty, IL Ser A (Prerefunded @
05/15/11) (FGIC Insd)..................... 5.500 11/15/31 4,855,770
1,000 Illinois Dev Fin Auth Rev Cmnty Rehab
Providers Fac Ser A....................... 7.375 07/01/25 1,085,290
1,500 Illinois Fin Auth Rev IL Inst of
Technology Ser A.......................... 5.000 04/01/31 1,513,380
2,500 Illinois Fin Auth Rev Northwestern Mem
Hosp Ser A................................ 5.500 08/15/43 2,633,975
See Notes to Financial Statements 13
VAN KAMPEN ADVANTAGE MUNICIPAL INCOME TRUST II
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2006 (UNAUDITED) continued
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
----------------------------------------------------------------------------------------------
ILLINOIS (CONTINUED)
$ 1,335 Illinois Fin Auth Solid Waste Rev Disp
Waste Mgmt Inc Proj Ser A (AMT)........... 5.050% 08/01/29 $ 1,316,911
1,325 Illinois Fin Auth Student Hsg Rev MJH Ed
Assistance IV Sr Ser A.................... 5.125 06/01/35 1,328,418
3,180 Illinois Hlth Fac Auth Rev Children's Mem
Hosp (MBIA Insd).......................... 6.250 08/15/13 3,522,232
1,485 Illinois Hlth Fac Auth Rev Evangelical
Hosp Ser A Rfdg (FSA Insd)................ 6.750 04/15/17 1,738,593
825 Illinois Hlth Fac Auth Rev Evangelical
Hosp Ser C (FSA Insd)..................... 6.750 04/15/17 965,885
1,000 Illinois Hlth Fac Auth Rev Highland Pk
Hosp Proj Ser A (Prerefunded @ 10/01/07)
(MBIA Insd)............................... 5.750 10/01/17 1,047,080
8,000 Illinois St First Ser (FSA Insd).......... 5.250 12/01/19 8,491,280
3,400 Illinois St First Ser (FSA Insd).......... 5.250 04/01/27 3,576,868
2,070 Northern IL Univ Ctf Part Hoffman Estates
Ctr Proj (FSA Insd)....................... 5.400 09/01/16 2,221,690
200 Peoria, Moline & Freeport, IL Coll Mtg Ser
A (AMT) (GNMA Collateralized)............. 7.600 04/01/27 202,556
5,000 Regional Trans Auth IL Ser A (AMBAC
Insd)..................................... 8.000 06/01/17 6,530,550
5,005 Will Cnty, IL Cmnty Sch Dist (FGIC
Insd)..................................... 5.000 01/01/23 5,210,155
10,000 Will Cnty, IL Sch Dist No. 122 Ser B Rfdg
(FGIC Insd)............................... 5.250 11/01/20 10,534,200
-------------
84,899,231
-------------
INDIANA 3.0%
2,805 Dekalb Eastn High Sch Bldg Corp Ind First
Mtg (FSA Insd)............................ 6.000 01/15/18 3,086,426
4,000 East Chicago, IN Elementary Sch Bldg Corp
First Mtg Ser A........................... 6.250 07/05/08 4,142,880
1,660 Indiana Hlth & Ed Fac Fin Auth Hosp Rev
Clarian Hlth Oblig Ser A.................. 5.000 02/15/36 1,669,462
3,000 Indiana Hlth Fac Fin Auth Hosp Rev
Columbus Regl Hosp Rfdg (FSA Insd)........ 7.000 08/15/15 3,473,910
1,500 Indiana St Dev Fin Auth Rev Exempt Fac
Conv Rfdg (AMT)........................... 5.950 08/01/30 1,527,675
2,000 Petersburg, IN Pollutn Ctl Rev IN Pwr & Lt
(AMT)..................................... 5.950 12/01/29 2,117,580
2,850 Southwest Parke Cmnty Sch Bldg First Mtg
(FGIC Insd) (b)........................... 5.250 07/15/21 3,032,457
-------------
19,050,390
-------------
14 See Notes to Financial Statements
VAN KAMPEN ADVANTAGE MUNICIPAL INCOME TRUST II
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2006 (UNAUDITED) continued
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
----------------------------------------------------------------------------------------------
IOWA 0.6%
$ 1,500 Tobacco Settlement Auth IA Tob Settlement
Rev Ser C................................. 5.375% 06/01/38 $ 1,499,925
2,500 Tobacco Settlement Auth IA Tob Settlement
Rev Ser C................................. 5.500 06/01/42 2,522,100
-------------
4,022,025
-------------
KANSAS 1.2%
3,430 Kansas St Dev Fin Auth Rev KS Proj Ser N
(AMBAC Insd) (b).......................... 5.250 10/01/20 3,605,033
3,615 Kansas St Dev Fin Auth Rev KS Proj Ser N
(AMBAC Insd) (b).......................... 5.250 10/01/21 3,811,078
-------------
7,416,111
-------------
KENTUCKY 0.1%
500 Mount Sterling, KY Lease Rev KY League
Cities Fdg Ser B.......................... 6.100 03/01/18 571,645
-------------
LOUISIANA 5.3%
5,000 Lafayette, LA Util Rev (MBIA Insd)........ 5.250 11/01/21 5,319,000
2,500 Louisiana Loc Govt Environment Fac Pkg Fac
Corp Garage Proj Ser A (AMBAC Insd)....... 5.375 10/01/31 2,625,400
5,970 Louisiana Loc Govt Environment Southeastn
LA Student Hsg Ser A (MBIA Insd) (b)...... 5.250 08/01/24 6,286,111
1,400 Louisiana Pub Fac Auth Rev Hlth Fac Glen
Retirement Ser A.......................... 6.700 12/01/25 1,416,058
8,065 Louisiana St Office Fac Corp LA St Cap
Complex Pgm (MBIA Insd) (b)............... 5.000 11/01/20 8,311,708
6,000 New Orleans, LA Rfdg (MBIA Insd).......... 5.125 09/01/21 6,186,840
4,000 New Orleans, LA Rfdg (FGIC Insd).......... 5.500 12/01/21 4,284,200
-------------
34,429,317
-------------
MARYLAND 2.4%
1,500 Baltimore, MD Convention Ctr Hotel Rev
Drivers Ser 1251 (Acquired 02/06/06, Cost
$1,765,635) (Inverse Floating Rate) (XLCA
Insd) (d)................................. 6.368 03/01/14 1,708,455
5,000 Maryland St Econ Dev Corp MD Aviation
Admin Fac (AMT) (FSA Insd)................ 5.375 06/01/20 5,291,850
1,000 Maryland St Econ Dev Corp Student Hsg Rev
Univ MD College Pk Proj (Prerefunded @
06/01/13)................................. 5.625 06/01/35 1,092,660
2,000 Maryland St Hlth & Higher Ed Fac Auth Rev
MD Inst College of Art.................... 5.000 06/01/40 1,948,800
1,200 Maryland St Hlth & Higher Ed Fac Auth Rev
Uni Hosp Cecil Cnty Issue................. 5.000 07/01/40 1,206,060
4,000 Maryland St Trans Auth Arpt Baltimore/WA
Intl Arpt Ser B (AMT) (AMBAC Insd)........ 5.125 03/01/24 4,152,360
-------------
15,400,185
-------------
See Notes to Financial Statements 15
VAN KAMPEN ADVANTAGE MUNICIPAL INCOME TRUST II
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2006 (UNAUDITED) continued
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
----------------------------------------------------------------------------------------------
MASSACHUSETTS 5.5%
$ 1,200 Massachusetts Bay Tran Auth MA Gen Tran
Sys Ser A Rfdg............................ 6.250% 03/01/12 $ 1,343,652
3,500 Massachusetts Bay Trans Auth MA Sales Tax
Rev Ser A................................. 5.000 07/01/35 3,583,895
2,500 Massachusetts Bay Trans Auth Ser A
(Prerefunded @ 07/01/12).................. 5.000 07/01/32 2,654,425
2,000 Massachusetts Muni Whsl Elec Co Proj No
6-A (MBIA Insd)........................... 5.250 07/01/16 2,136,300
3,600 Massachusetts St Dev Fin Agy Rev Boston
Univ Ser T-1 (AMBAC Insd)................. 5.000 10/01/35 3,702,060
2,500 Massachusetts St Dev Fin Agy Rev Western
New England Ser A......................... 5.000 09/01/33 2,556,975
1,750 Massachusetts St Hlth & Ed Fac Auth Rev
Hlthcare Sys Covenant Hlth................ 6.000 07/01/31 1,847,282
2,000 Massachusetts St Hlth & Ed Fac Auth Rev
Saint Mem Med Ctr Ser A................... 6.000 10/01/23 2,001,380
5,450 Massachusetts St Hlth & Ed Fac Auth Rev
Univ MA Mem Issue Ser D................... 5.000 07/01/33 5,405,582
925 Massachusetts St Indl Fin Agy Wtr
Treatment Amern Hingham (AMT)............. 6.900 12/01/29 942,825
925 Massachusetts St Indl Fin Agy Wtr
Treatment Amern Hingham (AMT)............. 6.950 12/01/35 943,139
2,995 Massachusetts St Wtr Pollutn Abatement Tr
Pool Pgm Bds Ser 10....................... 5.000 08/01/21 3,129,715
5,000 Massachusetts St Wtr Res Auth Gen Ser J
(FSA Insd)................................ 5.000 08/01/32 5,111,450
-------------
35,358,680
-------------
MICHIGAN 4.0%
3,000 Detroit, MI City Sch Dist Sch Bldg & Site
Impt Ser A (Prerefunded @ 05/01/13) (FGIC
Insd)..................................... 5.375 05/01/24 3,258,540
3,185 Detroit, MI Wtr Supply Sys Rev Sr Lien Ser
A (MBIA Insd) (b)......................... 5.250 07/01/20 3,379,795
2,790 Detroit, MI Wtr Supply Sys Rev Sr Lien Ser
C Rfdg (MBIA Insd) (b).................... 5.250 07/01/19 2,966,328
2,000 Grand Rapids, MI Wtr Supply (FGIC Insd)... 5.750 01/01/15 2,161,040
4,000 Kent Hosp Fin Auth MI Rev Metro Hosp Proj
Ser A..................................... 6.000 07/01/35 4,263,240
1,480 Michigan St Hsg Dev Auth Multi-Family Rev
Ltd Oblig Ser A Rfdg (GNMA
Collateralized)........................... 6.600 04/01/30 1,528,662
2,075 South Lyon, MI Cmnty Sch Bldg & Site (FGIC
Insd)..................................... 5.250 05/01/18 2,208,879
16 See Notes to Financial Statements
VAN KAMPEN ADVANTAGE MUNICIPAL INCOME TRUST II
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2006 (UNAUDITED) continued
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
----------------------------------------------------------------------------------------------
MICHIGAN (CONTINUED)
$ 2,285 Taylor, MI Bldg Auth (AMBAC Insd) (b)..... 6.000% 03/01/13 $ 2,556,755
3,090 Troy, MI Downtown Dev Auth Dev Rfdg (MBIA
Insd)..................................... 5.500 11/01/15 3,336,582
-------------
25,659,821
-------------
MINNESOTA 1.0%
1,065 Duluth, MN Econ Dev Auth Hlthcare Fac Rev
Benedictine Hlth Sys Saint Mary's......... 5.250 02/15/33 1,082,274
1,175 Maple Grove, MN Hlthcare Fac Rev North Mem
Hlthcare.................................. 5.000 09/01/35 1,185,845
2,200 Saint Paul, MN Hsg & Redev Auth Hosp Rev
Hlth East Proj............................ 6.000 11/15/30 2,357,564
1,000 Saint Paul, MN Hsg & Redev Auth Hosp Rev
Hlth East Proj............................ 6.000 11/15/35 1,070,920
1,000 Stillwater, MN Hlthcare Rev Hlth Sys Oblig
Group..................................... 5.000 06/01/25 1,009,780
-------------
6,706,383
-------------
MISSISSIPPI 1.1%
1,900 Mississippi Dev Bk Spl Oblig Cap Proj &
Equip Acquisition Ser A2 (AMBAC Insd)..... 5.000 07/01/24 2,003,626
1,550 Mississippi Dev Bk Spl Oblig Madison Cnty
Hosp Proj (Prerefunded @ 07/01/09)........ 6.400 07/01/29 1,694,181
2,595 Mississippi Dev Bk Spl Oblig MS Ltd Oblig
Hosp Impt (MBIA Insd) (b)................. 5.250 07/01/32 2,680,894
555 Mississippi Home Corp Single Family Rev
Mtg Ser C (AMT) (GNMA Collateralized)..... 7.600 06/01/29 569,336
-------------
6,948,037
-------------
MISSOURI 5.6%
2,000 Cape Girardeau Cnty, MO Indl Dev Auth
Hlthcare Fac Rev Southeast MO Hosp Assoc.. 5.625 06/01/27 2,048,500
1,250 Cole Cnty, MO Indl Dev Auth Sr Living Fac
Rev Lutheran Sr Svc Heisinger Proj........ 5.500 02/01/35 1,286,437
2,000 Curators Univ MO Sys Fac Rev Ser B Rfdg
(b)....................................... 5.000 11/01/20 2,083,160
2,500 Missouri St Dev Fin Brd Infrastructure Fac
Rev Crackerneck Creek Proj Ser C.......... 5.000 03/01/26 2,534,650
2,195 Missouri St Hlth & Ed Fac Rev Univ MO
Columbia Arena Proj (b)................... 5.000 11/01/16 2,312,872
4,500 North Kansas City, MO Sch Dist No. 74 MO
Direct Deposit Impt & Rfdg................ 5.000 03/01/25 4,674,015
4,000 Platte Cnty, MO Indl Dev Auth Trans Rev... 4.500 12/01/24 3,933,040
2,500 Platte Cnty, MO Neighborhood Impt
Parkville Ser B (MBIA Insd)............... 5.000 02/01/25 2,592,225
1,500 Saint Louis Cnty, MO Mtg Rev Ctf Rcpt Ser
H (AMT) (Escrowed to Maturity)............ 5.400 07/01/18 1,598,550
See Notes to Financial Statements 17
VAN KAMPEN ADVANTAGE MUNICIPAL INCOME TRUST II
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2006 (UNAUDITED) continued
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
----------------------------------------------------------------------------------------------
MISSOURI (CONTINUED)
$ 9,855 Saint Louis, MO Arpt Rev Arpt Dev Pgm Ser
A (Prerefunded @ 07/01/11) (MBIA Insd).... 5.250% 07/01/31 $ 10,536,769
2,380 Saint Louis, MO Arpt Rev Cap Impt Pgm Ser
A (MBIA Insd) (b)......................... 5.375 07/01/19 2,530,583
-------------
36,130,801
-------------
MONTANA 0.4%
2,300 Forsyth, MT Pollutn Ctl Rev Northwestn
Corp Colstrip Rfdg (AMBAC Insd) (e)....... 4.650 08/01/23 2,307,866
-------------
NEBRASKA 0.7%
4,260 University NE Univ Rev Lincoln Student
Fees & Fac Ser B.......................... 5.000 07/01/23 4,374,637
-------------
NEVADA 4.2%
8,000 Clark Cnty, NV Arpt Rev Sub Lien Ser A-2
(FGIC Insd)............................... 5.000 07/01/36 8,158,080
2,000 Clark Cnty, NV Econ Dev Rev Alexander
Dawson Sch Proj........................... 5.375 05/15/33 2,063,800
7,000 Clark Cnty, NV Indl Dev Rev Southwest Gas
Corp Proj Ser A (AMT) (AMBAC Insd)........ 5.250 07/01/34 7,251,160
4,375 Las Vegas Vly, NV Wtr Dist Ser B Rfdg
(MBIA Insd)............................... 5.000 06/01/27 4,487,131
85 Nevada Hsg Div Single Family Pgm Mezz Ser
B (AMT) (FHA/VA Gtd)...................... 6.550 10/01/12 85,800
5,000 Reno, NV Lien Trans Proj (Prerefunded @
06/01/12) (AMBAC Insd).................... 5.250 06/01/41 5,367,700
-------------
27,413,671
-------------
NEW HAMPSHIRE 0.6%
1,000 New Hampshire Hlth & Ed Fac Auth Rev
Derryfield Sch............................ 7.000 07/01/30 1,059,000
1,400 New Hampshire Hlth & Ed Fac Hlthcare Sys
Covenant Hlth............................. 5.500 07/01/34 1,449,532
1,000 New Hampshire St Bus Fin Auth Wtr Fac Rev
Pennichuck Wtrwks Inc (AMT) (AMBAC Insd).. 6.300 05/01/22 1,042,840
-------------
3,551,372
-------------
NEW JERSEY 6.6%
1,900 New Jersey Econ Dev Auth Rev Cig Tax...... 5.750 06/15/29 2,009,079
1,000 New Jersey Econ Dev Auth Rev Cig Tax...... 5.500 06/15/31 1,036,720
5,000 New Jersey Econ Dev Auth Rev Sch Fac
Constr Ser I (Prerefunded @ 09/01/14)..... 5.000 09/01/23 5,332,400
2,210 New Jersey Econ Dev Auth Wtr Fac Rev NJ
Amern Wtr Co Inc Ser B (AMT) (FGIC
Insd)..................................... 5.375 05/01/32 2,282,886
4,350 New Jersey Econ Dev Wtr NJ Amern Wtr Co
Inc Ser A (AMT) (FGIC Insd)............... 5.250 07/01/38 4,463,492
18 See Notes to Financial Statements
VAN KAMPEN ADVANTAGE MUNICIPAL INCOME TRUST II
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2006 (UNAUDITED) continued
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
----------------------------------------------------------------------------------------------
NEW JERSEY (CONTINUED)
$ 1,000 New Jersey Hlthcare Fac Fin Auth Rev Cap
Hlth Sys Oblig Grp Ser A.................. 5.375% 07/01/33 $ 1,021,390
2,500 New Jersey Hlthcare Fac Fin Auth Rev Gen
Hosp Ctr at Passaic (Escrowed to Maturity)
(FSA Insd)................................ 6.750 07/01/19 3,009,900
10,000 New Jersey St Ed Fac Auth Higher Ed Cap
Impt Ser A (AMBAC Insd)................... 5.250 09/01/20 10,633,100
2,000 New Jersey St Tpk Auth Tpk Rev Ser C-1
(AMBAC Insd).............................. 5.000 01/01/35 2,047,420
10,750 Salem Cnty, NJ Indl Pollutn Ctl Fin Auth
Rev Pollutn Ctl Pub Svc Elec & Gas Ser A
(AMT) (MBIA Insd)......................... 5.450 02/01/32 10,906,198
-------------
42,742,585
-------------
NEW MEXICO 0.2%
1,500 Jicarilla, NM Apache Nation Rev Adj Ser A
(Acquired 10/23/03, Cost $1,514,910)
(d)....................................... 5.000 09/01/18 1,526,310
-------------
NEW YORK 11.1%
1,000 Erie Cnty, NY Tob Asset Securitization
Corp Ser A................................ 5.000 06/01/38 965,120
7,000 Metropolitan Trans Auth NY Rev Ser A Rfdg
(FGIC Insd)............................... 5.250 11/15/31 7,373,380
5,000 Metropolitan Trans Auth NY Svc Contract
Ser A Rfdg (AMBAC Insd)................... 5.000 07/01/30 5,125,600
1,500 Nassau Cnty, NY Tob Settlement Corp Ser
A-3....................................... 5.000 06/01/35 1,456,290
3,500 Nassau Cnty, NY Tob Settlement Corp Ser
A-3....................................... 5.125 06/01/46 3,401,265
3,250 New York City Hlth & Hosp Corp Rev Hlth
Sys Ser A (AMBAC Insd).................... 5.000 02/15/11 3,415,458
5,000 New York City Ser H (MBIA Insd)........... 5.250 03/15/14 5,332,350
5,000 New York City Sub Ser F-1................. 5.000 09/01/25 5,144,450
6,000 New York City Transitional Fin Auth Rev
Future Tax Sec Ser A Rfdg (a)............. 5.500/14.000 11/01/26 6,452,340
8,240 New York City Transitional Fin Auth Rev
Future Tax Sec Ser C Rfdg (AMBAC Insd).... 5.250 08/01/18 8,789,278
7,575 New York St Dorm Auth Rev City Univ Sys
Cons Ser A................................ 5.625 07/01/16 8,333,636
1,520 New York St Dorm Auth Rev Insd John T
Mather Mem Hosp (Connie Lee Insd) (b)..... 6.500 07/01/09 1,639,442
3,845 New York St Dorm Auth Rev Secd Hosp Gen
Hosp Rfdg................................. 5.750 02/15/20 4,188,051
See Notes to Financial Statements 19
VAN KAMPEN ADVANTAGE MUNICIPAL INCOME TRUST II
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2006 (UNAUDITED) continued
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
----------------------------------------------------------------------------------------------
NEW YORK (CONTINUED)
$ 2,310 New York St Med Care Fac Fin Agy Rev Saint
Peter's Hosp Proj Ser A (AMBAC Insd)...... 5.375% 11/01/13 $ 2,312,749
5,000 New York St Urban Dev Corp Rev St
Fac Rfdg.................................. 5.700 04/01/20 5,621,150
2,150 Westchester, Tob Asset Securitization Corp
NY........................................ 5.125 06/01/38 2,103,517
-------------
71,654,076
-------------
NORTH CAROLINA 0.6%
1,950 Forsyth Cnty, NC Ctf Partn (b)............ 5.000 02/01/24 2,009,826
1,500 North Carolina Eastn Muni Pwr Agy Pwr Sys
Rev Ser D................................. 6.700 01/01/19 1,632,555
-------------
3,642,381
-------------
OHIO 3.0%
3,000 Cincinnati, OH City Sch Dist Sch Impt (FSA
Insd)..................................... 5.250 06/01/18 3,195,090
3,150 Cuyahoga Cnty, OH Hosp Fac Rev Canton Inc
Proj...................................... 7.500 01/01/30 3,471,867
1,000 Dayton, OH Arpt Rev James M Cox Dayton Ser
C Rfdg (AMT) (Radian Insd)................ 5.250 12/01/27 1,021,600
3,540 Franklin Cnty, OH Hosp Rev Doctor's Hosp
Proj Impt & Rfdg (Escrowed to Maturity)... 5.875 12/01/23 3,847,661
5,130 Muskingum Cnty, OH Hosp Fac Rev Bethesda
Care Sys Impt & Rfdg (Connie Lee Insd)
(b)....................................... 6.250 12/01/10 5,300,265
785 Pickerington, OH Loc Sch Dist Cap Apprec
Sch Fac Contract (FGIC Insd).............. * 12/01/11 631,234
1,160 Toledo Lucas Cnty, OH Port Auth Dev Rev
Northwest OH Bd Fd Ser C (AMT) (b)........ 6.600 11/15/15 1,244,808
685 Toledo Lucas Cnty, OH Port Auth Northwest
Bd Fd Ser A (AMT)......................... 6.000 05/15/11 712,571
-------------
19,425,096
-------------
OKLAHOMA 0.7%
1,500 Jenks, OK Aquarium Auth Rev First Mtg
(Prerefunded @ 07/01/10) (MBIA Insd)...... 6.100 07/01/30 1,647,510
2,755 Tulsa Cnty, OK Pub Fac Auth Cap Impt Rev
(Prerefunded @ 11/01/09) (AMBAC Insd)..... 6.250 11/01/22 3,027,993
-------------
4,675,503
-------------
20 See Notes to Financial Statements
VAN KAMPEN ADVANTAGE MUNICIPAL INCOME TRUST II
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2006 (UNAUDITED) continued
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
----------------------------------------------------------------------------------------------
OREGON 3.0%
$ 2,010 Emerald Peoples Util Dist OR Rfdg (FGIC
Insd) (b)................................. 7.350% 11/01/09 $ 2,243,060
2,060 Multnomah Cnty, OR Sch Dist No. 007
Reynolds (MBIA Insd)...................... 5.000 06/01/30 2,116,918
5,000 Oregon Hlth Sciences Univ Insd Ser A (MBIA
Insd)..................................... 5.250 07/01/22 5,293,600
5,000 Oregon St Dept Admin Ser C Rfdg (MBIA
Insd)..................................... 5.250 11/01/18 5,293,900
570 Oregon St Vets Welfare Ser 76A............ 6.050 10/01/28 574,560
3,580 Yamhill Cnty, OR Sch Dist No. 029J Newburg
(Prerefunded @ 06/15/12) (MBIA Insd)...... 5.250 06/15/21 3,848,572
-------------
19,370,610
-------------
PENNSYLVANIA 1.3%
4,535 Pennsylvania St Higher Ed Fac Auth Rev
UPMC Hlth Sys Ser A....................... 6.250 01/15/17 4,948,501
1,905 Pennsylvania St Higher Ed Fac Auth Rev
UPMC Hlth Sys Ser A....................... 6.250 01/15/18 2,075,288
1,370 Philadelphia, PA Hosp & Higher Ed Fac Auth
Rev Cmnty College Ser B Rfdg (MBIA Insd)
(b)....................................... 6.500 05/01/08 1,440,733
-------------
8,464,522
-------------
SOUTH CAROLINA 3.6%
6,250 Charleston Ed Excellence Fin Corp SC Rev
Rols RR II R 471 (Acquired 12/06/05, Cost
$6,834,905) (Inverse Floating Rate) (d)... 6.586 12/01/26 6,864,000
3,115 Greenville, SC Impt & Rfdg (MBIA Insd)
(b)....................................... 5.250 04/01/21 3,310,747
1,000 Newberry Invtg in Newberry Cnty Sch Dist
Proj...................................... 5.000 12/01/30 991,700
1,015 Rock Hill, SC Util Sys Rev Comb Ser C Rfdg
(FSA Insd) (b)............................ 5.000 01/01/11 1,067,161
6,500 South Carolina Jobs Econ Dev Auth Indl Rev
Elec & Gas Co Proj Ser A (AMBAC Insd)..... 5.200 11/01/27 6,841,445
3,750 South Carolina Jobs Econ Dev Auth Indl Rev
Elec & Gas Co Proj Ser B (AMT) (AMBAC
Insd)..................................... 5.450 11/01/32 3,928,800
-------------
23,003,853
-------------
SOUTH DAKOTA 0.4%
1,375 Deadwood, SD Ctf Partn (ACA Insd)......... 6.375 11/01/20 1,482,869
1,000 South Dakota St Hlth & Ed Fac Auth Rev
Childrens Care Hosp Rfdg.................. 6.125 11/01/29 1,050,610
-------------
2,533,479
-------------
See Notes to Financial Statements 21
VAN KAMPEN ADVANTAGE MUNICIPAL INCOME TRUST II
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2006 (UNAUDITED) continued
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
----------------------------------------------------------------------------------------------
TENNESSEE 4.7%
$ 2,130 Chattanooga, TN Hlth Ed & Hsg Fac Brd Rev
CDFI Phase I LLC Proj Ser A Rfdg.......... 5.000% 10/01/25 $ 2,082,032
2,595 Chattanooga, TN Hlth Ed & Hsg Fac Brd Rev
CDFI Phase I LLC Proj Ser A Rfdg.......... 5.125 10/01/35 2,533,265
1,270 Elizabethton, TN Hlth & Ed Fac Brd Rev
Hosp First Mtg Ser B Impt & Rfdg.......... 8.000 07/01/33 1,488,186
7,050 Hallsdale Powell Util Dist Knox Cnty TN
Wtr & Swr Rev Impt Ser B (FGIC Insd)...... 5.000 04/01/34 7,221,668
12,525 Johnson City, TN Hlth & Ed Fac Brd Hosp
Rev Cap Apprec First Mtg Ser A Rfdg (MBIA
Insd)..................................... * 07/01/26 4,661,054
6,500 Johnson City, TN Hlth & Ed Fac Brd Hosp
Rev First Mtg Mtn St Hlth Ser A........... 5.500 07/01/36 6,737,835
4,800 Johnson City, TN Hlth & Ed Fac Brd Hosp
Rev First Mtg Mtn St Hlth Ser A Rfdg (MBIA
Insd)..................................... 7.500 07/01/25 5,847,312
-------------
30,571,352
-------------
TEXAS 13.6%
2,335 Beaumont, TX Wtrwks & Swr Sys (Prerefunded
@ 09/01/10) (FGIC Insd)................... 6.250 09/01/14 2,565,278
2,000 Brazos Cnty, TX Hlth Fac Dev Oblig Grp.... 5.375 01/01/32 2,063,900
3,565 Brazos Riv Auth TX Pollutn Ctl Rev Adj TXU
Elec Co Proj Ser C Rfdg (AMT)............. 5.750 05/01/36 3,780,433
795 Brownsville, TX Util Sys Rev (Escrowed to
Maturity)................................. 7.375 01/01/10 855,110
8,000 Dallas-Fort Worth, TX Intl Arpt Rev Jt Ser
A Impt & Rfdg (AMT) (FGIC Insd)........... 5.500 11/01/31 8,370,160
2,345 Denton Cnty, TX Perm Impt (Prerefunded @
07/15/10) (b)............................. 5.500 07/15/19 2,502,959
2,145 Granbury, TX Indpt Sch Dist Rfdg (PSF
Gtd)...................................... 5.000 08/01/29 2,204,867
1,000 Harris Cnty, TX Hlth Fac Dev Mem Hermann
Hlthcare Ser A (Prerefunded @ 06/01/11)... 6.375 06/01/29 1,122,700
5,000 Harris Cnty, TX Sr Lien Toll Rd Rfdg (FSA
Insd)..................................... 5.125 08/15/32 5,139,000
2,760 Houston, TX Arpt Sys Rev (Escrowed to
Maturity)................................. 9.500 07/01/10 3,096,886
4,655 Houston, TX Arpt Sys Rev Sub Lien (FSA
Insd)..................................... 5.500 07/01/15 5,001,798
3,000 Houston, TX Arpt Sys Rev Sub Lien Ser A
(AMT) (FSA Insd).......................... 5.625 07/01/30 3,156,090
5,000 Houston, TX Util Sys Rev Comb First Lien
Ser A (FSA Insd).......................... 5.250 05/15/20 5,287,000
3,920 Lower Colorado Riv Auth TX Transmission
Contract Rev LCRA Svc Corp Proj (FGIC
Insd)..................................... 5.000 05/15/33 3,973,077
22 See Notes to Financial Statements
VAN KAMPEN ADVANTAGE MUNICIPAL INCOME TRUST II
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2006 (UNAUDITED) continued
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
----------------------------------------------------------------------------------------------
TEXAS (CONTINUED)
$ 5,000 Matagorda Cnty, TX Navig Dist No. 1 Rev
Houston Lt Rfdg (AMT) (AMBAC Insd)........ 5.125% 11/01/28 $ 5,260,350
1,500 Mesquite, TX Hlth Fac Dev Corp Retirement
Fac Christian Care Ctr.................... 5.625 02/15/35 1,527,450
2,000 Mesquite, TX Hlth Fac Dev Corp Retirement
Fac Christian Care Ctr Ser A (Prerefunded
@ 02/15/10)............................... 7.625 02/15/28 2,273,520
3,500 Metropolitan Hlth Fac Dev Corp TX Wilson N
Jones Mem Hosp Proj....................... 7.250 01/01/31 3,606,470
3,645 Midlothian, TX Ind Sch Dist Sch Bldg Rfdg
(PSF Gtd) (b)............................. 5.000 02/15/27 3,750,596
3,325 North Central, TX Hlth Fac Dev Corp Rev
Hosp Baylor Hlthcare Sys Proj Ser A....... 5.125 05/15/29 3,366,895
3,000 Prosper, TX Indpt Sch Dist (PSF Gtd)...... 5.500 08/15/33 3,182,130
5,055 San Antonio, TX Elec & Gas Rev Sys Rfdg... 5.375 02/01/16 5,410,872
1,990 Stafford, TX Econ Dev Corp (FGIC Insd)
(b)....................................... 6.000 09/01/19 2,260,182
3,960 Stafford, TX Econ Dev Corp (FGIC Insd).... 5.500 09/01/30 4,301,550
3,510 Texas St Wtr Fin Assistance............... 5.500 08/01/35 3,668,020
-------------
87,727,293
-------------
UTAH 0.4%
4,950 Intermountain Pwr Agy UT Pwr Supply Rev
Ser A Rfdg (Escrowed to Maturity) (FGIC
Insd)..................................... * 07/01/17 2,898,176
-------------
VIRGINIA 1.4%
2,000 Fairfax Cnty, VA Ctf Partn................ 5.300 04/15/23 2,115,940
1,130 Richmond, VA Indl Dev Auth Govt Fac Rev Bd
(AMBAC Insd).............................. 5.000 07/15/14 1,201,303
675 Richmond, VA Indl Dev Auth Govt Fac Rev Bd
(AMBAC Insd).............................. 5.000 07/15/16 715,689
1,465 Richmond, VA Indl Dev Auth Govt Fac Rev Bd
(AMBAC Insd).............................. 5.000 07/15/17 1,551,376
1,520 Tobacco Settlement Fin Corp VA............ 5.500 06/01/26 1,556,495
1,660 Tobacco Settlement Fin Corp VA............ 5.625 06/01/37 1,697,831
-------------
8,838,634
-------------
WASHINGTON 4.1%
5,000 Clark Cnty, WA Sch Dist 114 (FSA Insd).... 5.250 06/01/19 5,299,400
1,370 King Cnty, WA Ser B (Prerefunded @
12/01/07)................................. 5.900 12/01/14 1,442,596
3,630 King Cnty, WA Ser B Rfdg (Prerefunded @
12/01/07)................................. 5.900 12/01/14 3,822,354
2,245 King Cnty, WA Ser B (Prerefunded @
12/01/07)................................. 6.625 12/01/15 2,388,747
700 Quinault Indian Nation, WA Quinault Beach
Ser A Impt & Rfdg (ACA Insd).............. 5.800 12/01/15 726,502
See Notes to Financial Statements 23
VAN KAMPEN ADVANTAGE MUNICIPAL INCOME TRUST II
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2006 (UNAUDITED) continued
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
----------------------------------------------------------------------------------------------
WASHINGTON (CONTINUED)
$ 3,000 Spokane, WA Pub Fac Dist Hotel Motel &
Sales Use Tax (MBIA Insd)................. 5.250% 09/01/33 $ 3,148,140
4,000 Washington St Pub Pwr Supply Ser A Rfdg
(FGIC Insd)............................... 7.000 07/01/08 4,264,920
5,000 Washington St Pub Pwr Supply Ser A Rfdg
(Prerefunded @ 07/01/06) (AMBAC Insd)..... 5.700 07/01/09 5,116,550
-------------
26,209,209
-------------
WEST VIRGINIA 1.6%
6,420 Harrison Cnty, WV Cnty Cmnty Solid Waste
Disp Rev West PA Pwr Co Ser C (AMT) (AMBAC
Insd)..................................... 6.750 08/01/24 6,469,691
3,750 West Virginia Univ Rev Impt Univ Proj Ser
C (FGIC Insd)............................. 5.000 10/01/34 3,860,250
-------------
10,329,941
-------------
WISCONSIN 0.7%
1,715 Wisconsin St Hlth & Ed Fac Auth Rev Bellin
Mem Hosp (AMBAC Insd)..................... 6.625 02/15/08 1,773,224
2,675 Wisconsin St Hlth & Ed Fac FH Hlthcare Dev
Inc Proj (Prerefunded @ 11/15/09)......... 6.250 11/15/28 2,907,431
-------------
4,680,655
-------------
WYOMING 0.3%
2,000 Sweetwater Cnty, WY Solid Waste Disp Rev
FMC Corp Proj Rfdg (AMT).................. 5.600 12/01/35 2,089,360
-------------
PUERTO RICO 4.6%
21,000 Puerto Rico Comwlth Hwy & Tran Auth Hwy
Rev Ser Y Rfdg (FSA Insd) (f)............. 6.250 07/01/21 25,331,670
4,000 Puerto Rico Pub Bldgs Auth Gtd Pub Ed &
Hlth Fac Ser M Rfdg (MBIA Insd)........... 5.600 07/01/08 4,158,480
-------------
29,490,150
-------------
TOTAL LONG-TERM INVESTMENTS 162.5%
(Cost $1,005,674,202)....................................................... 1,048,352,432
SHORT-TERM INVESTMENT 0.2%
(Cost $1,600,000)........................................................... 1,600,000
-------------
TOTAL INVESTMENTS 162.7%
(Cost $1,007,274,202)....................................................... 1,049,952,432
OTHER ASSETS IN EXCESS OF LIABILITIES 2.4%................................... 15,750,470
PREFERRED SHARES (INCLUDING ACCRUED DISTRIBUTIONS) (65.1%)................... (420,395,728)
-------------
NET ASSETS APPLICABLE TO COMMON SHARES 100.0%................................ $ 645,307,174
=============
24 See Notes to Financial Statements
VAN KAMPEN ADVANTAGE MUNICIPAL INCOME TRUST II
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2006 (UNAUDITED) continued
Percentages are calculated as a percentage of net assets applicable to common
shares.
* Zero coupon bond
(a) Security is a "step-up" bond where the coupon increases or steps up at a
predetermined date.
(b) The Trust owns 100% of the outstanding bond issuance.
(c) 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.
(d) 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 4.1% of net
assets applicable to common shares.
(e) Security purchased on a when-issued or delayed delivery basis.
(f) All or a portion of this security has been physically segregated in
connection with open futures contracts.
ACA--American Capital Access
AMBAC--AMBAC Indemnity Corp.
AMT--Alternative Minimum Tax
Connie Lee--Connie Lee Insurance Co.
FGIC--Financial Guaranty Insurance Co.
FHA/VA--Federal Housing Administration/Department of Veterans Affairs
FSA--Financial Security Assurance Inc.
GNMA--Government National Mortgage Association
MBIA--Municipal Bond Investors Assurance Corp.
PSF--Public School Fund
Radian--Radian Asset Assurance
XLCA--XL Capital Assurance Inc.
FUTURES CONTRACTS OUTSTANDING AS OF APRIL 30, 2006:
UNREALIZED
APPRECIATION/
CONTRACTS DEPRECIATION
SHORT CONTRACTS:
U.S. Treasury Notes 5-Year Futures June 2006 (Current
Notional Value of $104,156)............................... 1,219 $1,001,868
===== ==========
See Notes to Financial Statements 25
VAN KAMPEN ADVANTAGE MUNICIPAL INCOME TRUST II
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2006 (UNAUDITED) continued
SWAP AGREEMENTS OUTSTANDING AS OF APRIL 30, 2006:
INTEREST RATE SWAPS
PAY/
RECEIVE NOTIONAL UNREALIZED
FLOATING FIXED EXPIRATION AMOUNT APPRECIATION/
COUNTERPARTY FLOATING RATE INDEX RATE RATE DATE (000) DEPRECIATION
JP Morgan Chase Bank,
N.A. ............... USD-BMA Municipal
Swap Index Receive 4.375% 07/11/26 $14,720 $ 15,024
JP Morgan Chase Bank,
N.A. ............... USD-BMA Municipal
Swap Index Receive 4.137 06/28/26 25,020 724,412
--------
$739,436
========
26 See Notes to Financial Statements
VAN KAMPEN ADVANTAGE MUNICIPAL INCOME TRUST II
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
April 30, 2006 (Unaudited)
ASSETS:
Total Investments (Cost $1,007,274,202)..................... $1,049,952,432
Cash........................................................ 2,404,388
Receivables:
Interest.................................................. 16,670,840
Investments Sold.......................................... 170,233
Swap Contracts.............................................. 739,436
Other....................................................... 5,365
--------------
Total Assets............................................ 1,069,942,694
--------------
LIABILITIES:
Payables:
Investments Purchased..................................... 2,300,000
Investment Advisory Fee................................... 482,573
Variation Margin on Futures............................... 190,469
Income Distributions--Common Shares....................... 83,932
Other Affiliates.......................................... 34,050
Trustees' Deferred Compensation and Retirement Plans........ 1,028,280
Accrued Expenses............................................ 120,488
--------------
Total Liabilities....................................... 4,239,792
Preferred Shares (including accrued distributions).......... 420,395,728
--------------
NET ASSETS APPLICABLE TO COMMON SHARES...................... $ 645,307,174
==============
NET ASSET VALUE PER COMMON SHARE ($645,307,174 divided by
45,104,827 shares outstanding)............................ $ 14.31
==============
NET ASSETS CONSIST OF:
Common Shares ($.01 par value with an unlimited number of
shares authorized, 45,104,827 shares issued and
outstanding).............................................. $ 451,048
Paid in Surplus............................................. 596,841,830
Net Unrealized Appreciation................................. 44,419,534
Accumulated Net Realized Gain............................... 2,576,111
Accumulated Undistributed Net Investment Income............. 1,018,651
--------------
NET ASSETS APPLICABLE TO COMMON SHARES...................... $ 645,307,174
==============
PREFERRED SHARES ($.01 par value, authorized 100,000,000
shares, 16,800 issued with liquidation preference of
$25,000 per share)........................................ $ 420,000,000
==============
NET ASSETS INCLUDING PREFERRED SHARES....................... $1,065,307,174
==============
See Notes to Financial Statements 27
VAN KAMPEN ADVANTAGE MUNICIPAL INCOME TRUST II
FINANCIAL STATEMENTS continued
Statement of Operations
For the Six Months Ended April 30, 2006 (Unaudited)
INVESTMENT INCOME:
Interest.................................................... $ 15,883,194
------------
EXPENSES:
Investment Advisory Fee..................................... 1,768,534
Preferred Share Maintenance................................. 361,970
Merger Costs................................................ 231,680
Trustees' Fees and Related Expenses......................... 54,355
Custody..................................................... 28,103
Legal....................................................... 27,023
Other....................................................... 153,515
------------
Total Expenses.......................................... 2,625,180
------------
NET INVESTMENT INCOME....................................... $ 13,258,014
============
REALIZED AND UNREALIZED GAIN/LOSS:
Realized Gain/Loss:
Investments............................................... $ 518,304
Futures................................................... 3,004,556
------------
Net Realized Gain........................................... 3,522,860
------------
Unrealized Appreciation/Depreciation During the Period:
Investments............................................... (11,141,057)
Futures................................................... (232,623)
Swap Contracts............................................ 739,436
------------
Net Unrealized Depreciation During the Period............... (10,634,244)
------------
NET REALIZED AND UNREALIZED LOSS............................ $ (7,111,384)
============
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS..................... $ (4,003,996)
============
NET INCREASE IN NET ASSETS APPLICABLE TO COMMON SHARES FROM
OPERATIONS................................................ $ 2,142,634
============
28 See Notes to Financial Statements
VAN KAMPEN ADVANTAGE MUNICIPAL INCOME TRUST II
FINANCIAL STATEMENTS continued
Statements of Changes in Net Assets (Unaudited)
FOR THE FOR THE
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 2006 OCTOBER 31, 2005
------------------------------------
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income................................... $ 13,258,014 $ 8,251,681
Net Realized Gain....................................... 3,522,860 2,536,969
Net Unrealized Depreciation During the Period........... (10,634,244) (3,710,738)
Distributions to Preferred Shareholders:
Net Investment Income................................. (3,481,447) (1,682,853)
Net Realized Gain..................................... (522,549) -0-
------------ ------------
Change in Net Assets Applicable to Common Shares from
Operations............................................ 2,142,634 5,395,059
Distributions to Common Shareholders:
Net Investment Income................................. (10,104,604) (7,321,085)
Net Realized Gain..................................... (2,120,006) -0-
------------ ------------
NET CHANGE IN NET ASSETS APPLICABLE TO COMMON SHARES
FROM INVESTMENT ACTIVITIES............................ (10,081,976) (1,926,026)
FROM CAPITAL TRANSACTIONS:
Proceeds from Common Shares Acquired Through Merger..... 535,839,011 -0-
------------ ------------
TOTAL INCREASE/DECREASE IN NET ASSETS APPLICABLE TO
COMMON SHARES......................................... 525,757,035 (1,926,026)
NET ASSETS APPLICABLE TO COMMON SHARES:
Beginning of the Period................................. 119,550,139 121,476,165
------------ ------------
End of the Period (Including accumulated undistributed
net investment income of $1,018,651 and $571,973,
respectively)......................................... $645,307,174 $119,550,139
============ ============
See Notes to Financial Statements 29
VAN KAMPEN ADVANTAGE MUNICIPAL INCOME TRUST II
FINANCIAL HIGHLIGHTS (UNAUDITED)
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE COMMON SHARE OF THE
TRUST OUTSTANDING THROUGHOUT THE PERIODS INDICATED.
SIX MONTHS
ENDED YEAR ENDED OCTOBER 31,
APRIL 30, -------------------------------------------------
2006 2005 2004 2003 2002 (f) 2001
--------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF THE PERIOD...... $ 14.62 $ 14.86 $ 14.69 $ 14.87 $ 14.77 $ 13.46
------- ------- ------- ------- --------- -------
Net Investment Income........................ .49(a) 1.01 1.05 1.08 1.10 1.12
Net Realized and Unrealized Gain/Loss........ -0-* (.14) .18 (.16) .10 1.23
Common Share Equivalent of Distributions Paid
to Preferred Shareholders:
Net Investment Income...................... (.09) (.21) (.10) (.10) (.14) (.32)
Net Realized Gain.......................... (.06) -0- -0- -0- -0- -0-
------- ------- ------- ------- --------- -------
Total from Investment Operations.............. .34 .66 1.13 .82 1.06 2.03
Distributions Paid to Common Shareholders:
Net Investment Income........................ (.39) (.90) (.96) (1.00) (.96) (.72)
Net Realized Gain............................ (.26) -0- -0- -0- -0- -0-
------- ------- ------- ------- --------- -------
NET ASSET VALUE, END OF THE PERIOD............ $ 14.31 $ 14.62 $ 14.86 $ 14.69 $ 14.87 $ 14.77
======= ======= ======= ======= ========= =======
Common Share Market Price at End of the
Period....................................... $ 12.96 $ 13.08 $ 14.70 $ 13.90 $ 13.98 $ 12.95
Total Return (b).............................. 3.93%** -5.06% 13.05% 6.57% 15.64% 18.05%
Net Assets Applicable to Common Shares at End
of the Period (In millions).................. $ 645.3 $ 119.6 $ 121.5 $ 120.0 $ 121.4 $ 120.6
Ratio of Expenses to Average Net Assets
Applicable to Common Shares (c).............. 1.34% 1.33% 1.46% 1.48% 1.58% 1.76%
Ratio of Net Investment Income to Average Net
Assets Applicable to Common Shares (c)....... 6.79% 6.78% 7.14% 7.23% 7.55% 7.89%
Portfolio Turnover............................ 10%** 29% 29% 26% 45% 38%
SUPPLEMENTAL RATIOS:
Ratio of Expenses to Average Net Assets
Including Preferred Shares (c)............... .82% .80% .88% .89% .95% 1.04%
Ratio of Net Investment Income to Average Net
Assets Applicable to Common Shares (d)....... 5.01% 5.40% 6.44% 6.57% 6.59% 5.66%
SENIOR SECURITIES:
Total Preferred Shares Outstanding............ 16,800 3,200 3,200 3,200 3,200 3,200
Asset Coverage Per Preferred Share (e)........ $63,435 $62,369 $62,967 $62,499 $ 62,954 $62,695
Involuntary Liquidating Preference Per
Preferred Share.............................. $25,000 $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 $25,000
* Amount is less than $.01.
** Non-Annualized
(a) Based on average shares outstanding.
(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.
(f) As required, effective November 1, 2001, the Trust has adopted the
provisions of the AICPA Audit and Accounting Guide for Investment Companies
and began accreting market discount on fixed income securities. The effect
of this change for the year ended October 31, 2002 was to increase net
investment income per share by $.02, decrease net realized and unrealized
gains and losses per share by $.02 and increase the ratio of net investment
income to average net assets applicable to common shares by .17%. Per share,
ratios, and supplemental data for periods prior to October 31, 2002 have not
been restated to reflect this change in presentation.
30 See Notes to Financial Statements
VAN KAMPEN ADVANTAGE MUNICIPAL INCOME TRUST II
NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2006 (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES
Van Kampen Advantage Municipal Income Trust II (the Trust) is registered as a
diversified, closed-end management investment company under the Investment
Company Act of 1940 (the "1940 Act"), as amended. The Trust's investment
objective is to seek to provide a high level of current income exempt from
federal income tax, consistent with preservation of capital. The Trust will
invest substantially all of its assets in municipal securities rated investment
grade at the time of investment. The Trust commenced investment operations on
August 27, 1993.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements. The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
A. SECURITY VALUATION Municipal bonds are valued by independent pricing services
or dealers using the mean of the bid and asked prices or, in the absence of
market quotations, at fair value based upon yield data relating to municipal
bonds with similar characteristics and general market conditions. Securities
which are not valued by independent pricing services or dealers are valued at
fair value using procedures established in good faith by the Board of Trustees.
Futures contracts are valued at the settlement price established each day on the
exchange on which they are traded. Short-term securities with remaining
maturities of 60 days or less are valued at amortized cost, which approximates
market value.
B. SECURITY TRANSACTIONS Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis. The
Trust may purchase and sell securities on a "when-issued" or "delayed delivery"
basis with settlement to occur at a later date. The value of the security so
purchased is subject to market fluctuations during this period. The Trust will
segregate assets with the custodian having an aggregate value at least equal to
the amount of the when-issued or delayed delivery purchase commitments until
payment is made. At April 30, 2006, the Trust had $2,300,000 of when-issued or
delayed delivery purchase commitment.
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 fiscal year ended October 31, 2005, the Trust utilized capital
losses carried forward of $1,168,555.
31
VAN KAMPEN ADVANTAGE MUNICIPAL INCOME TRUST II
NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2006 (UNAUDITED) continued
At April 30, 2006, the cost and related gross unrealized appreciation and
depreciation are as follows:
Cost of investments for tax purposes........................ $1,006,373,577
==============
Gross tax unrealized appreciation........................... $ 46,000,868
Gross tax unrealized depreciation........................... (2,422,013)
--------------
Net tax unrealized appreciation on investments.............. $ 43,578,855
==============
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 and a portion of futures gains, which are
included as ordinary income for tax purposes.
The tax character of distributions paid during the year ended October 31,
2005 was as follows:
Distributions paid from:
Ordinary income........................................... $ 370,024
Tax-exempt income......................................... 8,613,831
Long-term capital gain.................................... -0-
----------
$8,983,855
==========
As of October 31, 2005, the components of distributable earnings on a tax
basis were as follows:
Undistributed ordinary income............................... $ 259,200
Undistributed tax-exempt income............................. 535,805
Undistributed long-term capital gain........................ 2,641,806
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 sales
transactions.
2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of the Trust's Investment Advisory Agreement, Van Kampen Asset
Management (the "Adviser") 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.
For the six months ended April 30, 2006, the Trust recognized expenses of
approximately $11,500 representing legal services provided by Skadden, Arps,
Slate, Meagher & Flom LLP, of which a trustee of the Trust is a partner of such
firm and he and his law firm provide legal services as legal counsel to the
Trust.
Under separate 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 six months ended April 30,
2006, the Trust recognized expenses of approximately $30,300, representing Van
Kampen Investments Inc.'s or its affiliates' (collectively "Van Kampen") cost of
providing accounting and legal services to the Trust, as
32
VAN KAMPEN ADVANTAGE MUNICIPAL INCOME TRUST II
NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2006 (UNAUDITED) continued
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
For the six months ended April 30, 2006 and for the year ended October 31, 2005,
transactions in common shares were as follows:
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 2006 OCTOBER 31, 2005
Beginning Shares........................................ 8,175,881 8,175,881
Shares Issued Through Merger............................ 36,928,946 -0-
---------- ---------
Ending Shares........................................... 45,104,827 8,175,881
========== =========
On January 27, 2006 the Trust acquired all of the assets and liabilities of
Van Kampen Municipal Opportunity Trust II (ticker symbol VOT) and Van Kampen
Value Municipal Income Trust (ticker symbol VKV) through a tax free
reorganization approved by VOT and VKV shareholders on January 11, 2006. The
Trust issued 36,928,946 common shares with a net asset value of $535,839,011 and
13,600 Auction Preferred Shares (APS) with a liquidation value of $340,000,000
in exchange for VOT's and VKV's net assets. The shares of VOT were converted
into Trust shares at a ratio of 1.025341 to 1 and 1 to 1, for common shares and
APS, respectively. The shares of VKV were converted into Trust shares at a ratio
of 1.059290 to 1 and 1 to 1, for common shares and APS, respectively. Net
unrealized appreciation of VOT and VKV as of January 27, 2006 was $15,400,172
and $31,522,823, respectively. The Trust assumed VOT's and VKV's book to tax
accretion differences, which resulted in a $774,715 increase to accumulated
undistributed net investment income and a corresponding decrease to net
unrealized appreciation. Combined net assets applicable to common shares on the
day of the reorganization were $654,455,555 and combined net assets including
preferred shares were $1,074,455,555. The Trust incurred merger expenses of
$231,680, which represent costs related to the preparation, printing and
distribution of the Proxy Statement/Prospectus, Reorganization Agreement and
registration statements as well as legal, audit and filing fees.
4. INVESTMENT TRANSACTIONS
During the period, the cost of purchases and proceeds from sales of investments,
excluding short-term investments, were $72,385,629 and $69,391,744,
respectively.
33
VAN KAMPEN ADVANTAGE MUNICIPAL INCOME TRUST II
NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2006 (UNAUDITED) continued
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 or collars. The Trust expects to enter into these
transactions primarily as a hedge against anticipated interest rate or
fixed-income market changes, for duration management or for risk management
purposes, but may also enter into these transactions to generate additional
income. All of the Trust's portfolio holdings, including derivative instruments,
are marked to market each day with the change in value reflected in the
unrealized appreciation/depreciation. Upon disposition, a realized gain or loss
is recognized accordingly, except when taking delivery of a security underlying
a futures contract. In this instance, the recognition of gain or loss is
postponed until the disposal of the security underlying the futures contract.
Risks may arise as a result of the potential inability of the counterparties to
meet the terms of their contracts.
Summarized below are the specific types of derivative financial instruments
used by the Trust.
A. FUTURES CONTRACTS A futures contract is an arrangement 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
securities 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 futures commission merchant pursuant to the rules and
regulations promulgated under the 1940 Act, as amended, or with its custodian in
an account in the broker's name. This amount is known as initial margin. During
the period the futures contract is open, payments are received from or made to
the broker based upon changes in the value of the contract (the variation
margin). The risk of loss associated with a futures contract is in excess of the
variation margin reflected on the Statement of Assets and Liabilities.
Transactions in futures contracts for the six months ended April 30, 2006
were as follows:
CONTRACTS
Outstanding at October 31, 2005............................. 692
Futures Opened.............................................. 5,855
Futures Closed.............................................. (5,328)
------
Outstanding at April 30, 2006............................... 1,219
======
B. INTEREST RATE SWAPS The Trust may enter into interest rate swaps primarily to
preserve a return or spread on a particular investment or portion of its
portfolio, as a duration management technique or to protect against any increase
in the price of securities the Trust anticipates purchasing at a later date.
Interest rate swaps are contractual agreements to exchange periodic interest
payment streams calculated on a predetermined notional principal amount.
Interest rate swaps generally involve one party paying a fixed interest rate and
the
34
VAN KAMPEN ADVANTAGE MUNICIPAL INCOME TRUST II
NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2006 (UNAUDITED) continued
other paying a variable rate. The Trust will usually enter into swaps on a net
basis, i.e., the two payment streams are netted out in a cash settlement on the
payment date or dates specified in the instrument, with the Trust receiving or
paying, as the case may be, only the net amount of the two payments. The Trust
accrues the net amount with respect to each swap on a daily basis. This net
amount is recorded within unrealized appreciation/ depreciation on swap
contracts. Upon cash settlement of the periodic payments, the net amount is
recorded as realized gain/loss on swap contracts on the Statement of Operations.
Risks may arise as a result of the potential inability of the counterparties to
meet the terms of their contracts. If there is a default by the counterparty,
the Trust will have contractual remedies pursuant to the agreements related to
the transaction.
C. INDEXED SECURITY An inverse floating rate security is one where the coupon is
inversely indexed to a short-term floating interest rate multiplied by a
specific factor. As the floating rate rises, the coupon is reduced. Conversely,
as the floating rate declines, the coupon is increased. The price of these
securities may be more volatile than the price of a comparable fixed rate
security. These instruments are typically used by the Trust to enhance the yield
of the portfolio. These instruments are identified in the portfolio of
investments.
6. PREFERRED SHARES
As of April 30, 2006, the Trust has outstanding 16,800 APS. Series A, Series B,
Series C and Series D each contain 1,600 shares, Series E contains 1,400 shares,
Series F, Series G, Series H and Series I each contain 2,000 shares and Series J
contains 1,000 shares. Dividends are cumulative and the dividend rates are
generally reset every 7 days for Series A, Series B, Series C, Series D, Series
E, Series F and Series J, while Series G, Series H, and Series I are generally
reset every 28 days through an auction process. The average rate in effect on
April 30, 2006 was 3.486%. During the six months ended April 30, 2006, the rates
ranged from 2.000% to 5.375%.
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.
35
VAN KAMPEN ADVANTAGE MUNICIPAL INCOME TRUST II
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
36
VAN KAMPEN ADVANTAGE MUNICIPAL INCOME TRUST II
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
37
VAN KAMPEN ADVANTAGE MUNICIPAL INCOME TRUST II
BOARD OF TRUSTEES, OFFICERS AND IMPORTANT ADDRESSES
BOARD OF TRUSTEES
DAVID C. ARCH
JERRY D. CHOATE
ROD DAMMEYER
LINDA HUTTON HEAGY
R. CRAIG KENNEDY
HOWARD J KERR
JACK E. NELSON
HUGO F. SONNENSCHEIN
WAYNE W. WHALEN* - Chairman
SUZANNE H. WOOLSEY
OFFICERS
RONALD E. ROBISON
President and Principal Executive Officer
DENNIS SHEA
Vice President
J. DAVID GERMANY
Vice President
AMY R. DOBERMAN
Vice President
STEFANIE V. CHANG
Vice President and Secretary
JOHN L. SULLIVAN
Chief Compliance Officer
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
One Lincoln Street
Boston, Massachusetts 02111
TRANSFER AGENT
COMPUTERSHARE 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 Drive
Chicago, Illinois 60606
* "Interested persons" of the Trust, as defined in the Investment Company Act
of 1940, as amended.
38
VAN KAMPEN ADVANTAGE MUNICIPAL INCOME TRUST II
RESULTS OF SHAREHOLDER VOTES
With regard to the approval of the issuance of additional common shares of the
Trust, a meeting was held on January 11, 2006, and the results of the votes from
the common shareholders is as follows:
# OF SHARES
--------------------------------------
IN FAVOR AGAINST WITHHELD
--------------------------------------
3,629,772 300,271 195,017
39
Van Kampen Advantage Municipal Income Trust II
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 Advantage Municipal Income Trust II
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 Advantage Municipal Income Trust II
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)2006 Van Kampen Funds Inc. All rights reserved.
Member NASD/SIPC.
VKI SAR 6/06
(VAN KAMPEN INVESTMENTS SHINE LOGO) RN06-01541P-Y04/06
Item 2. Code of Ethics.
Not applicable for semi-annual reports.
Item 3. Audit Committee Financial Expert.
Not applicable for semi-annual reports.
Item 4. Principal Accountant Fees and Services.
Not applicable for semi-annual reports.
Item 5. Audit Committee of Listed Registrants.
Not applicable for semi-annual reports.
Item 6. Schedule of Investments.
Please refer to Item #1.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.
Not applicable for semi-annual reports.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable for semi-annual reports.
Item 9. Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
Not applicable.
Item 11. Controls and Procedures
(a) The Trust's principal executive officer and principal financial officer have
concluded that the Trust's disclosure controls and procedures are sufficient to
ensure that information required to be disclosed by the Trust in this Form
N-CSRS was recorded, processed, summarized and reported within the time periods
specified in the Securities and Exchange Commission's rules and forms, based
upon such officers' evaluation of these controls and procedures as of a date
within 90 days of the filing date of the report.
(b) There were no changes in the registrant's internal control over financial
reporting that occurred during the second fiscal quarter of the period covered
by this report that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial reporting.
Item 12. Exhibits.
(1) Code of Ethics - Not applicable for semi-annual reports.
(2)(a) A certification for the Principal Executive Officer of the registrant is
attached hereto as part of EX-99.CERT.
(2)(b) A certification for the Principal Financial Officer of the registrant is
attached hereto as part of EX-99.CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Van Kampen Advantage Municipal Income Trust II
By: /s/ Ronald E. Robison
-----------------------------
Name: Ronald E. Robison
Title: Principal Executive Officer
Date: June 20, 2006
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed by the following
persons on behalf of the registrant and in the capacities and on the dates
indicated.
By: /s/ Ronald E. Robison
-----------------------------
Name: Ronald E. Robison
Title: Principal Executive Officer
Date: June 20, 2006
By: /s/ Phillip G. Goff
-----------------------------
Name: Phillip G. Goff
Title: Principal Financial Officer
Date: June 20, 2006