VAN KAMPEN MERRITT MUNICIPAL TRUST, N-30D, 1995-04-28

VAN KAMPEN MERRITT MUNICIPAL TRUST
N-30D, 1995-04-28

Previous: VAN KAMPEN MERRITT MUNICIPAL TRUST, NSAR-A, 1995-04-28

Next: VAN KAMPEN MERRITT NEW YORK QUALITY MUNICIPAL TRUST, NSAR-A, 1995-04-28

Page: 1

<TABLE>
Table of Contents
<CAPTION>
<S> <C>
Letter to Shareholders ................ 1
Performance Results ................... 3
Portfolio of Investments .............. 4
Statement of Assets and Liabilities ... 13
Statement of Operations ............... 14
Statement of Changes in Net Assets .... 15
Financial Highlights .................. 16
Notes to Financial Statements ......... 17
</TABLE>

Letter to Shareholders

March 27, 1995

Dear Shareholder:

During the six-month period covered by this report, September 1, 1994
through February 28, 1995, we saw the close of a challenging and
difficult year in the financial markets -- and the beginning of a new
year, with renewed optimism and strength on many fronts.

(PHOTOGRAPH INSERTED HERE)
Dennis J. McDonnell and Don G. Powell

Market Overview

In an effort to moderate economic growth and keep inflation under control,
the Federal Reserve Board (the "Fed") has raised the federal funds rate
(the rate banks charge each other for overnight loans) seven times over a
12-month period. As a result, the fed funds rate doubled from 3 percent to 6
percent, its highest level in three years. Intermediate and long-term interest
rates quickly followed the Fed's lead and moved significantly higher as well.
The yield on 30-year Treasury securities, for example, began 1994 at 6.35
percent and increased to a high of 8.16 percent, before retreating to 7.89
percent at the end of the year. However, since yields and prices move in
opposite directions, this had a negative impact on prices of fixed-income
securities, including municipal bonds.

Stock market investors did not fare much better during this rising interest
rate environment, despite the robust economy and stronger corporate earnings.
Concerned that higher interest rates and the prospect for continued rate hikes
might altogether extinguish the prolonged economic expansion, the equity market
sputtered for most of 1994. The S&P 500 Index, for example, produced a 1.36
percent total return for 1994, while the average price change for the year for
all stocks listed on the New York Stock Exchange was down 20 percent.

In contrast, 1995 began more positively, as the bond market got a boost from
growing sentiment that the Fed appeared to have stabilized economic growth while
keeping inflation under control, and that it may be near the end of its
tightening cycle. Subsequently, the Bond Buyer's Municipal Index rose to 90.97
at the end of February -- an increase of more than 12 percent from its low of
80.81 in November.

The stock market responded in late February with the Dow Jones Industrial
Average breaking through the 4000 mark, setting a new record high and raising
expectations for a stronger market in 1995. At the same time, almost all other
major stock indexes rose, including the S&P 500 Index, the New York Stock
Exchange Composite Index, and the Nasdaq Composite Index.

Additionally, the Van Kampen American Capital Index of Investor Intentions for
February reached 233 -- an increase of 17 percent over January's level of 200 --
its largest monthly increase since February 1994. The index, computed from an
independently conducted survey and published by Van Kampen American Capital,
measures the investment climate (investors' confidence) by asking 1,000
investors about what they intend to do with their money over the next 60-90
days. A total of 45.6 percent of investors said the next 60-90 days would be a
"good" time to invest.

(Continued on page two)

Performance

At its current annualized dividend level of $1.116 per common share, the Trust
provides a current distribution rate of 7.50 percent <F3> based upon the closing
price of $14.875 per share on February 28, 1995. For shareholders who purchased
the Trust at its initial offering price of $15 per share, their current
distribution rate is 7.44 percent <F3>. At these distribution rates, the Trust
provides investors in the 36 percent federal income tax bracket with a yield
equivalent to a taxable investment earning 11.72 percent <F4> and 11.63 percent
<F4>, respectively.

The Trust's closing stock price of $14.875 per share for the period ended
February 28, 1995, is up significantly from its six-month low of $12.125 per
share on November 16, 1994, reflecting a stronger municipal market at the start
of 1995. Moreover, the Trust generated a six-month total return of 3.95 percent
<F2>, based on net asset value, for the period ended February 28, 1995.

Outlook

To date, the Fed appears to have been relatively successful in engineering the
"soft landing" that it has labored to promote over the last 12 months. Inflation
appears to be under control and, while the nation's current pace of economic
growth exceeds the Fed's target rate of 2.5 percent, such a goal appears
achievable and reasonable. Moreover, there are no pressing signs that suggest
that the Fed has over-corrected to this point and will drive the economy into
premature recession.

Regarding the municipal market, we remain optimistic about the current supply
and demand relationship. With much of the refinancing by municipal issuers
behind us, we expect new issue supply to remain low in 1995 and demand for
municipals to grow as confidence in the economy increases. As confidence is
renewed, we believe many investors will begin to move off the sidelines and
into domestic markets in pursuit of high credit quality and stable income.
Additionally, we believe the Trust will continue to provide shareholders with
long-term value, as we seek to maintain a high level of current income and
consistent dividends over time.

Corporate News

As you may have already noticed, we have adopted a new design for our
shareholder reports that begins to reflect our new identity as Van Kampen
American Capital. Going forward, we will continue to look for new ways to
improve upon the presentation of information in your Trust's report. In
addition, we have developed a new corporate ad campaign introducing Van Kampen
American Capital. Full page ads appeared in The Wall Street Journal in February
- -- watch for more advertising throughout the year.

We look forward to communicating with you on a regular basis, providing
information about your Trust's performance, new investment opportunities, and
our newly created company. We appreciate your continued confidence in your Trust
and Van Kampen American Capital.

Sincerely,

Dennis J. McDonnell
President
Van Kampen American Capital
Investment Advisory Corp.

Don G. Powell
Chief Executive Officer
Van Kampen American Capital
Investment Advisory Corp.

<TABLE>
Performance Results for the Period Ended February 28, 1995
Van Kampen Merritt Municipal Trust
(NYSE Ticker Symbol-VKQ)
<CAPTION>
<S> <C>
Total Returns
Six-month total return based on market price<F1> .................................. 3.12%
Six-month total return based on NAV<F2> ........................................... 3.95%
Distribution Rates
Distribution rate as a % of initial offer stock price<F3> ......................... 7.44%
Taxable-equivalent distribution rate as a % of initial offer stock price<F4> ...... 11.63%
Distribution rate as a % of 02/28/95 closing stock price<F3> ...................... 7.50%
Taxable-equivalent distribution rate as a % of 02/28/95 closing stock price<F4> ... 11.72%
Share Valuations
Net asset value as of 02/28/95 .................................................... $ 15.58
Preferred share (Series A) rate as of 02/28/95 ................................... 4.20%
Preferred share (Series B) rate as of 02/28/95 ................................... 4.03%
Preferred share (Series C) rate as of 02/28/95 ................................... 3.80%
Preferred share (Series D) rate as of 02/28/95 ................................... 4.10%
Closing common stock price as of 02/28/95 ........................................ $ 14.875
High common stock price (02/27/95) ................................................ $ 15.125
Low common stock price (11/16/94) ................................................ $ 12.125

<FN>
<F1> Total return based on market price assumes an investment at the 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 stock price at the
end of the period indicated.
<F2> Total return based on Net Asset Value (NAV) assumes an investment at the
beginning of the period indicated, reinvestment of all distributions for the
period, and sale of all shares at the end of the period, all at net asset value.
<F3> Distribution rate represents the monthly annualized distributions of the
Trust at the end of February 1995,
and not the earnings of the Trust.
<F4> The taxable-equivalent distribution rate is calculated assuming a 36%
federal income tax bracket.
<F5> See "Notes to Financial Statements" footnote #5, for more information
concerning Preferred Share reset periods.

A portion of the interest income may be taxable for those investors subject to
the alternative minimum tax (AMT).

Past performance does not guarantee future results. Investment return, stock
price and net asset value will fluctuate with market conditions. Trust shares,
when sold, may be worth more or less than their original cost.
</FN>
</TABLE>

<TABLE>
Portfolio of Investments
February 28,1995 (Unaudited)
- ---------------------------------------------------------------------------------------------------
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Municipal Bonds
Alabama 0.6%
$ 5,000 Birmingham, AL North Med Clinic Brd Rev Ser A
Carraway Methodist Hosp <F3> ......................... 7.500% 07/01/15 $ 5,110,450
------------
California 6.5%
2,000 California Hlth Fac Fin Auth Rev Kaiser
Permanente Med Cent ................................... 5.450 10/01/13 1,823,340
19,900 California St Rev Antic Wts Ser C .................... 5.750 04/25/96 20,120,094
8,500 Castaic Union Sch Dist Cap Apprec Ser A (FGIC Insd) ... * 05/01/18 2,023,425
7,775 Delano, CA Ctfs Partn Ser A .......................... 9.250 01/01/22 8,495,898
5,695 Sacramento, CA City Fin Auth Rev
Comb Proj B (MBIA Insd) ............................... * 11/01/14 1,703,204
20,000 San Diego, CA Indl Dev Rev San Diego Gas & Elec
Ser A (Embedded Cap) (MBIA Insd) ...................... 6.100 09/01/18 17,174,200
5,835 University CA Rev Multi Purp
Proj Ser C Rfdg (AMBAC Insd) ......................... 5.000 09/01/14 5,120,621
------------
56,460,782
------------
Colorado 9.9%
5,000 Boulder Cnty, CO Rev Natl Cent
Atmosphere Rfdg & Impt ................................ 6.900 12/01/07 5,357,500
8,500 Boulder Cnty, CO Rev Natl Cent
Atmosphere Rfdg & Impt ................................ 7.000 12/01/13 8,944,720
2,525 Colorado Hsg Fin Auth Single Family
Pgm Sr Gtd Mtg Ln D3 ................................. 7.200 08/01/23 2,605,093
10,000 Denver, CO City & Cnty Arpt Rev Ser A ................ 8.250 11/15/12 10,610,000
12,800 Denver, CO City & Cnty Arpt Rev Ser A ................ 8.500 11/15/23 13,687,168
8,535 Denver, CO City & Cnty Arpt Rev Ser A ................ 8.000 11/15/25 8,891,336
33,525 Meridian Metro Dist CO Peninsular &
Oriental Steam Navig Co Rfdg .......................... 7.500 12/01/11 35,453,694
------------
85,549,511
------------
Connecticut 0.9%
7,140 Connecticut St Hlth & Edl Fac Auth Rev
Nursing Home Proj AHF/Hartford ....................... 7.125 11/01/24 7,488,289
------------
Delaware 0.5%
2,000 Delaware St Econ Dev Auth Rev Exempt
Fac Delmarva Pwr & Lt Co ............................. 7.500 10/01/17 2,117,720
2,460 Delaware St Hsg Auth Rev Sr
Home Mtg Ser B Subser B2 ............................. 7.200 12/01/21 2,541,770
------------
4,659,490
------------
Florida 2.6%
4,245 Emerald Coast, FL Hsg Corp Hsg Rev Ser A 1991 .......... 9.500 01/01/22 4,245,000
5,000 Florida St Div Bond Fin Dept Genl Svcs Rev
Environmental Preservation 2000 Ser A (MBIA Insd) ...... 4.750 07/01/10 4,494,450
</TABLE>

4 See Notes to Financial Statements

<TABLE>
Portfolio of Investments (Continued)
February 28,1995 (Unaudited)
- -----------------------------------------------------------------------------------------------------------------
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Florida (Continued)
$ 4,765 Florida St Muni Pwr Agy Rev All Requirements
Pwr Supply Proj (AMBAC Insd) ............................. 5.100% 10/01/25 $ 4,179,096
1,000 Hillsborough Cnty, FL Indl Dev Auth Indl Dev
Rev Univ Cmnty Hosp (MBIA Insd) ......................... 5.750 08/15/14 985,580
7,900 Sarasota Cnty, FL Hlth Fac Auth Rev
Hlthcare Kobernick/Meadow Park ........................... 10.000 07/01/22 8,400,702
------------
22,304,828
------------
Georgia 0.6%
5,438 Cobb Cnty, GA Dev Auth Rev Grantor Tr
Ctfs Franklin Forest Ser A ............................... 8.000 06/01/22 5,655,000
------------
Hawaii 1.5%
13,000 Hawaii St Arpt Sys Rev Ser 2 ............................. 7.000 07/01/18 13,344,630
------------
Illinois 12.2%
5,000 Bedford Park, IL Tax Increment Rev Sr
Lien Bedford City Sq Proj ................................ 9.250 02/01/12 5,357,850
2,500 Chicago, IL O'Hare Intl Arpt Spl Fac Rev
American Airls Inc Proj Rfdg ............................. 8.250 12/01/24 2,742,150
8,000 Chicago, IL O'Hare Intl Arpt Spl Fac Rev
Intl Terminal (MBIA Insd) ............................... 6.750 01/01/18 8,245,760
7,475 Chicago, IL O'Hare Intl Arpt Spl Fac Rev
United Airls Inc ......................................... 8.400 05/01/04 8,118,597
10,600 Chicago, IL O'Hare Intl Arpt Spl Fac Rev
United Airls Inc ......................................... 8.500 05/01/18 11,279,778
4,705 Chicago, IL O'Hare Intl Arpt Spl Fac Rev
United Airls Inc Ser A .................................. 8.400 05/01/18 4,990,452
4,740 Chicago, IL O'Hare Intl Arpt Spl Fac Rev
United Airls Inc Ser B .................................. 8.950 05/01/18 5,191,912
4,800 Hodgkins, IL Tax Increment ............................... 9.500 12/01/09 5,280,000
2,500 Illinois Hlth Fac Auth Rev
Evangelical Hosp Ser C Rfdg .............................. 6.750 04/15/12 2,557,800
7,750 Illinois Hlth Fac Auth Rev
Fairview Oblig Group Proj A ............................. 9.500 10/01/22 8,271,187
4,850 Illinois Hlth Fac Auth Rev Hinsdale Hosp Ser B Rfdg ..... 9.000 11/15/15 5,480,064
1,500 Illinois Hlth Fac Auth Rev
Sarah Bush Lincoln Hlth Cent ............................ 7.250 05/15/12 1,531,035
10,000 Illinois Hlth Fac Auth Rev Servantcor Ser A
Var Rate Cpn (Prerefunded @ 08/15/01) .................... 8.000 08/15/21 11,627,700
2,000 Illinois Hsg Dev Auth Rev <F2> .......................... 7.125 08/01/26 2,080,560
6,000 Metropolitan Pier & Expo Auth IL Dedicated St Tax Rev
McCormick Place Expansion Ser A (FGIC Insd) ............. * 06/15/10 2,347,320
60 Roselle, IL Multi Family Hsg Rev Waterbury
Apts Ser A Rfdg (GNMA Collateralized) ................... 6.500 01/01/96 60,535
65 Roselle, IL Multi Family Hsg Rev Waterbury
Apts Ser A Rfdg (GNMA Collateralized) ................... 6.500 01/01/97 66,106
</TABLE>

5 See Notes to Financial Statements

<TABLE>
Portfolio of Investments (Continued)
February 28,1995 (Unaudited)
- -------------------------------------------------------------------------------------
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Illinois (Continued)
$ 70 Roselle, IL Multi Family Hsg Rev Waterbury
Apts Ser A Rfdg (GNMA Collateralized) ... 6.500% 01/01/98 $ 71,572
75 Roselle, IL Multi Family Hsg Rev Waterbury
Apts Ser A Rfdg (GNMA Collateralized) ... 6.500 01/01/99 76,907
80 Roselle, IL Multi Family Hsg Rev Waterbury
Apts Ser A Rfdg (GNMA Collateralized) ... 6.500 01/01/00 82,055
85 Roselle, IL Multi Family Hsg Rev Waterbury
Apts Ser A Rfdg (GNMA Collateralized) ... 6.500 01/01/01 87,396
90 Roselle, IL Multi Family Hsg Rev Waterbury
Apts Ser A Rfdg (GNMA Collateralized) ... 6.500 01/01/02 92,688
95 Roselle, IL Multi Family Hsg Rev Waterbury
Apts Ser A Rfdg (GNMA Collateralized) ... 6.500 01/01/03 97,927
100 Roselle, IL Multi Family Hsg Rev Waterbury
Apts Ser A Rfdg (GNMA Collateralized) ... 6.500 01/01/04 103,105
105 Roselle, IL Multi Family Hsg Rev Waterbury
Apts Ser A Rfdg (GNMA Collateralized) ... 6.500 01/01/05 108,219
4,260 Roselle, IL Multi Family Hsg Rev Waterbury
Apts Ser A Rfdg (GNMA Collateralized) ... 7.000 01/01/25 4,440,667
2,025 Southern IL Univ Rev Cap Apprec
Hsg & Aux Fac Sys A (MBIA Insd) .......... * 04/01/14 618,455
1,000 Southern IL Univ Rev Cap Apprec
Hsg & Aux Fac Sys A (MBIA Insd) .......... * 04/01/15 285,900
1,000 Southern IL Univ Rev Cap Apprec
Hsg & Aux Fac Sys A (MBIA Insd) .......... * 04/01/16 268,080
2,000 Southern IL Univ Rev Cap Apprec
Hsg & Aux Fac Sys A (MBIA Insd) .......... * 04/01/18 470,060
3,800 Winnebago & Boone Cntys, IL Sch Dist
No 205 (Cap Guar Insd) <F3> .............. 7.125 02/01/01 4,133,412
4,125 Winnebago & Boone Cntys, IL Sch Dist
No 205 (Cap Guar Insd) .................. 7.200 02/01/02 4,544,018
4,475 Winnebago & Boone Cntys, IL Sch Dist
No 205 (Cap Guar Insd) .................. 7.300 02/01/03 4,995,666
-----------
105,704,933
-----------
Indiana 0.5%
2,500 Indiana Bond Bank Spl Pgm Ser F .......... 7.150 08/01/15 2,626,025
2,000 Plymouth, IN Multi Sch Bldg Corp
First Mtg (AMBAC Insd) .................. 6.750 01/01/13 2,102,940
-----------
4,728,965
-----------
Kansas 2.5%
20,000 Burlington, KS Pollutn Ctl Rev Rfdg KS
Gas & Elec Co Proj (MBIA Insd) .......... 7.000 06/01/31 21,358,600
-----------
</TABLE>

6 See Notes to Financial Statements

<TABLE>
Portfolio of Investments (Continued)
February 28,1995 (Unaudited)
- ------------------------------------------------------------------------------------------------
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Kentucky 0.6%
$ 2,000 Ashland, KY Solid Waste Rev Ashland Oil Inc Proj ... 7.200% 10/01/20 $ 2,060,400
3,000 Kentucky Econ Dev Fin Auth Hosp Fac Rev Saint Claire
Med Cent Proj Rfdg (Connie Lee Insd) .............. 5.625 09/01/21 2,765,940
------------
4,826,340
------------
Louisiana 2.0%
825 East Baton Rouge, LA Mtg Fin Auth Single Family
Mtg Purchase Ser A Rfdg (GNMA Collateralized) ..... 7.100 10/01/24 859,081
9,585 East Baton Rouge, LA Mtg Fin Auth
Single Family Mtg Purchase Ser C Rfdg ............. 7.000 04/01/32 9,856,351
5,000 New Orleans, LA Rfdg (AMBAC Insd) ................. * 09/01/11 1,854,250
4,700 New Orleans, LA Rfdg (AMBAC Insd) ................. * 09/01/12 1,635,741
2,000 New Orleans, LA Rfdg (AMBAC Insd) ................. * 09/01/16 539,000
8,000 Orleans Parish, LA Sch Brd Rfdg (FGIC Insd) ........ * 02/01/15 2,274,880
------------
17,019,303
------------
Maryland 1.6%
139,445 Maryland St Cmnty Dev Admin Dept Hsg &
Cmnty Dev Single Family Rev Pgm 6 .................. * 04/01/30 10,713,559
3,500 Maryland St Hlth & Higher Edl Fac Auth Rev
Suburban Hosp Rfdg (AMBAC Insd) <F3> ............... 5.125 07/01/21 3,055,185
------------
13,768,744
------------
Massachusetts 0.8%
1,000 Billerica, MA Indl Rev Cabot Corp .................. 7.750 09/01/14 1,013,500
2,600 Massachusetts St Hlth & Edl Fac Auth
Rev Med Cent of Central MA ......................... 7.100 07/01/21 2,677,012
3,000 Massachusetts St Hlth & Edl Fac Auth Rev New England
Med Cent Hosp Ser G (Embedded Swap) (MBIA Insd) ... 3.100 07/01/13 2,317,440
1,375 Massachusetts St Hlth & Edl Fac Auth Rev
Winchester Hosp Ser D (Connie Lee Insd) ............ 5.750 07/01/14 1,304,215
------------
7,312,167
------------
Michigan 0.7%
2,000 Michigan Muni Bond Auth Rev Loc
Govt Ln Ser C-A (FSA Insd) ........................ * 06/15/13 661,380
5,000 Portage Lake, MI Wtr & Swr Auth Ser II ............. 7.625 10/01/20 5,286,700
------------
5,948,080
------------
Minnesota 0.6%
21,160 Southern MN Muni Pwr Agy Pwr Supply
Sys Rev Ser A (MBIA Insd) ......................... * 01/01/23 3,824,035
10,000 Southern MN Muni Pwr Agy Pwr Supply
Sys Rev Ser A (MBIA Insd) ......................... * 01/01/24 1,685,300
------------
5,509,335
------------
Missouri 0.5%
3,750 Hannibal, MO Indl Dev Auth Hlth Fac
Rev Hannibal Regl Hlthcare Sys Inc ................. 9.500 03/01/22 4,406,925
------------
</TABLE>

7 See Notes to Financial Statements

<TABLE>
Portfolio of Investments (Continued)
February 28,1995 (Unaudited)
- ---------------------------------------------------------------------------------------------
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Montana 0.8%
$ 3,000 Montana St Brd Invt Res Recovery Rev
Yellowstone Energy L P Proj ..................... 7.000% 12/31/19 $ 2,841,330
3,900 Montana St Coal Severance Tax
Broadwater Pwr Proj Ser A Rfdg ................. 6.875 12/01/17 4,095,624
------------
6,936,954
------------
Nevada 0.3%
1,000 Henderson, NV Loc Impt Dist No T-4 Ser A ........ 8.500 11/01/12 1,049,380
1,750 Nevada St Rfdg ................................. 4.375 08/01/03 1,586,655
----------
2,636,035
----------
New Jersey 4.9%
5,000 Camden Cnty, NJ Pollutn Ctl Fin Auth
Solid Waste Res Recovery Rev Ser B ................. 7.500 12/01/09 4,780,600
1,515 Eastern Camden Cnty, NJ Regl
Sch Dist Rfdg (FGIC Insd) .......................... * 03/01/99 1,228,423
1,000 Eastern Camden Cnty, NJ Regl
Sch Dist Rfdg (FGIC Insd) .......................... * 03/01/00 763,910
1,000 Eastern Camden Cnty, NJ Regl
Sch Dist Rfdg (FGIC Insd) .......................... * 03/01/02 681,360
1,000 Eastern Camden Cnty, NJ Regl
Sch Dist Rfdg (FGIC Insd) .......................... * 03/01/03 642,550
1,000 Eastern Camden Cnty, NJ Regl
Sch Dist Rfdg (FGIC Insd) .......................... * 03/01/04 605,370
1,460 Eastern Camden Cnty, NJ Regl
Sch Dist Rfdg (FGIC Insd) .......................... * 03/01/05 831,879
1,465 Eastern Camden Cnty, NJ Regl
Sch Dist Rfdg (FGIC Insd) .......................... * 03/01/06 784,888
1,615 Eastern Camden Cnty, NJ Regl
Sch Dist Rfdg (FGIC Insd) .......................... * 03/01/07 812,813
1,555 Eastern Camden Cnty, NJ Regl
Sch Dist Rfdg (FGIC Insd) .......................... * 03/01/08 734,473
25,000 New Jersey Econ Dev Auth St Contract
Econ Recovery (Embedded Cap) ...................... 5.900 09/15/21 25,310,750
5,000 Union Cnty, NJ Util Auth Solid Waste Rev Ser A .... 7.150 06/15/09 5,195,150
----------
42,372,166
----------
New Mexico 0.2%
1,292 Santa Fe, NM Single Family Mtg Rev Rfdg ............ 8.450 12/01/11 1,397,014
----------
New York 17.1%
2,965 Battery Park City Auth NY Rev Sr Ser A Rfdg ....... 4.750 11/01/19 2,352,579
4,000 Herkimer Cnty, NY Indl Dev Agy Indl Dev
Rev Burrows Paper Corp Recycling .................. 8.000 01/01/09 4,182,240
5,550 Metropolitan Tran Auth NY Svcs
Contract Commuter Fac Ser N Rfdg ................... 6.000 07/01/11 5,392,047
4,000 Metropolitan Tran Auth NY Svcs Contract Tran Fac ... 7.000 07/01/09 4,197,560
</TABLE>

8 See Notes to Financial Statements

<TABLE>
Portfolio of Investments (Continued)
February 28,1995 (Unaudited)
- -------------------------------------------------------------------------------------------------
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
New York (Continued)
$ 1,900 Metropolitan Tran Auth NY Svcs
Contract Tran Fac Ser N Rfdg ....................... 6.000% 07/01/11 $ 1,845,926
6,000 New York City Indl Dev Agy Spl Fac
Rev Terminal One Group Assn Proj ................... 6.000 01/01/19 5,638,260
6,000 New York City Indl Dev Agy Spl Fac Rev
Terminal One Group Assn Proj ....................... 6.125 01/01/24 5,670,720
1,500 New York City Ser A ................................ 7.750 08/15/12 1,605,120
20,000 New York City Ser A Rfdg ........................... 6.000 08/01/05 19,325,000
7,000 New York City Ser B ................................ 7.500 02/01/05 7,446,250
6,000 New York City Ser B ................................ 5.600 08/15/07 5,533,680
1,500 New York City Ser C ................................. 7.100 08/15/10 1,522,380
2,585 New York City Ser F ................................ 8.250 11/15/02 2,916,552
7,375 New York St Environmental Fac Corp Pollutn
Ctl Rev St Wtr Revolving Fund Ser E ................ 6.700 06/15/10 7,855,629
3,075 New York St Med Care Fac Fin Agy
Rev Mental Hlth Svcs Fac Ser A ..................... 5.250 08/15/23 2,579,310
10,735 New York St Med Care Fac Fin Agy
Rev Mental Hlth Svcs Fac Ser D ..................... 7.400 02/15/18 11,428,159
5,000 New York St Pwr Auth Rev & Genl Purp Ser CC Rfdg ... 5.125 01/01/10 4,601,300
10,000 New York St Urban Dev Corp Rev
Correctional Cap Fac Ser A Rfdg ..................... 5.500 01/01/08 9,360,200
5,000 New York St Urban Dev Corp Rev Correctional
Cap Fac Ser A Rfdg (FSA Insd) ...................... 6.500 01/01/11 5,348,250
5,360 New York St Urban Dev Corp Rev
Correctional Fac Ser A Rfdg ........................ 5.400 01/01/06 4,984,639
20,000 New York St Urban Dev Corp Rev St Fac .............. 7.500 04/01/11 21,387,200
3,000 Onondaga Cnty, NY Indl Dev Agy Sewer
Fac Rev Bristol - Meyers Squibb Co Proj ............. 5.750 03/02/24 2,751,630
11,000 Triborough Brdg & Tunl Auth NY
Rev Genl Purp Ser A Rfdg ............................ 5.000 01/01/15 9,651,950
-----------
147,576,581
-----------
North Carolina 2.6%
10,000 North Carolina Eastn Muni Pwr Agy Pwr Sys
Rev Ser B Rfdg (Embedded Cap) ......................... 7.250 01/01/14 9,456,100
13,300 North Carolina Muni Pwr Agy No 1
Catawba Elec Rev (Embedded Cap) ...................... 6.000 01/01/12 12,692,190
----------
22,148,290
----------
North Dakota 0.4%
3,460 Ward Cnty, ND Hlthcare Fac Rev
Saint Josephs Hosp Corp Proj Ser A .................... 7.500 11/01/15 3,226,588
----------
Ohio 0.8%
5,375 Franklin Cnty, Ohio Hosp Rev Holy Cross
Hlth Ser B Rfdg (MBIA Insd) .......................... 5.250 06/01/10 5,057,069
</TABLE>

9 See Notes to Financial Statements

<TABLE>
Portfolio of Investments (Continued)
See Notes to Financial Statements
February 28,1995 (Unaudited)
- -----------------------------------------------------------------------------------------------
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Ohio (Continued)
$ 250 Marion Cnty, OH Indl Dev Rev Kmart Corp Proj Rfdg ... 6.375% 02/01/02 $ 254,950
1,000 Ohio St Air Quality Dev Auth Rev JMG
Fdg Ltd Partnership Proj Rfdg (AMBAC Insd) ......... 6.375 04/01/29 1,019,210
210 Portage Cnty, OH Indl Dev Rev
Kmart Corp Proj Rfdg ................................ 6.350 12/01/00 214,429
250 Washington Cnty, OH Indl Dev Rev
Kmart Corp Proj Rfdg ................................ 6.400 03/15/03 251,390
-----------
6,797,048
-----------
Oklahoma 1.9%
4,610 Cleveland Cnty, OK Home Ln Auth
Single Family Mtg Rev Rfdg ......................... 8.000 08/01/12 4,978,754
1,240 Kay Cnty, OK Home Fin Auth Rev Single
Family Mtg Ser A Rfdg (AMBAC Insd) .................. 7.000 11/01/11 1,343,391
9,560 Oklahoma Hsg Fin Agy Single Family
Rev Mtg Class B (GNMA Collateralized) .............. 7.997 08/01/18 10,324,800
-----------
16,646,945
-----------
Pennsylvania 3.6%
3,250 Butler Cnty, PA Hosp Auth Hosp Rev Butler
Mem Hosp Ser A (FSA Insd) ........................... 5.250 07/01/12 3,012,295
10,000 Geisinger Auth PA Hlth Sys Muni
Cap Ser A (Embedded Cap) ............................ 5.450 07/01/22 9,984,900
9,000 Pennsylvania St 2nd Ser Rfdg & Projs ................ 4.750 06/15/97 8,970,300
10,000 Philadelphia, PA Wtr & Wastewtr Rev
Reg Fixed Airs (FGIC Insd) ......................... 5.650 06/15/12 9,553,400
-----------
31,520,895
-----------
Rhode Island 1.5%
2,450 Providence, RI Redev Agy Ctfs Partn Ser A .......... 8.000 09/01/24 2,522,349
3,470 Rhode Island Hsg & Mtg Fin Corp
Homeownership Oppty Ser 3B .......................... 8.050 04/01/22 3,703,843
4,750 Rhode Island Hsg & Mtg Fin Corp
Ser 8 (Inverse Fltg) ................................ 9.607 04/01/24 4,916,250
2,000 Rhode Island St Hlth & Edl Bldg Corp Rev
Higher Edl Fac Roger Williams (Connie Lee Insd) .... 7.250 11/15/24 2,165,820
----------
13,308,262
----------
Tennessee 0.8%
1,010 Campbell Cnty, TN Indl Dev Brd Indl
Dev Rev Kmart Corp Rfdg ............................ 6.400 04/15/08 1,021,534
1,500 Maury Cnty, TN Indl Dev Brd Pollutn Ctl Rev
Multi Modal Saturn Corp Proj Rfdg ................... 6.500 09/01/24 1,471,050
4,288 Shelby Cnty, TN Hlth Edl & Hsg Fac Brd Rev Multi
Family Mtg Rock Creek Plaza Rfdg (FHA Insd) ......... 7.375 01/20/27 4,554,526
----------
7,047,110
----------
</TABLE>

10 See Notes to Financial Statements

<TABLE>
Portfolio of Investments (Continued)
See Notes to Financial Statements
February 28,1995 (Unaudited)
- --------------------------------------------------------------------------------------------------
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Texas 7.7%
$ 9,055 Brazos Cnty, TX Hlth Fac Dev Corp Franciscan Svcs
Rev Saint Joseph Hosp & Hlth Cent Ser B Rfdg ........ 6.000% 01/01/19 $ 8,155,929
6,000 Brazos River Auth TX Pollutn Ctl Rev
Coll TX Util Elec Co Proj A (AMBAC Insd) ............. 6.750 04/01/22 6,167,520
7,750 Brazos River Auth TX Rev Coll Houston
Lt & Pwr Co Proj B Rfdg .............................. 8.250 05/01/15 8,386,430
1,000 Brazos, TX Higher Edl Auth Inc Student
Ln Rev Subser C2 Rfdg ................................ 7.100 11/01/04 1,053,470
15,000 Dallas-Fort Worth, TX Intl Arpt Fac Impt
Corp Rev American Airls Inc ......................... 7.500 11/01/25 15,162,750
3,600 Dallas-Fort Worth, TX Intl Arpt Fac Impt
Corp Rev Delta Airls Inc ............................ 7.625 11/01/21 3,671,352
3,405 Fort Worth, TX Hsg Fin Corp Home
Mtg Rev Ser A Rfdg ................................... 8.500 10/01/11 3,694,050
21,550 Texas St Pub Ppty Fin Corp Rev Mental
Hlth & Retardation Rfdg (Cap Guar Insd) .............. 5.250 09/01/08 20,305,919
----------
66,597,420
----------
Utah 1.1%
4,050 Bountiful, UT Hosp Rev South Davis Cmnty Hosp Proj ... 9.500 12/15/18 4,268,781
3,000 Salt Lake City, UT Hosp Rev IHC
Hosp Inc Rfdg (Embedded Cap) ......................... 5.500 02/15/17 2,706,330
2,175 Utah St Hsg Fin Agy Single Family Mtg Insd Ser E2 .... 7.150 07/01/24 2,240,685
----------
9,215,796
----------
Virginia 1.1%
1,500 Henrico Cnty, VA Indl Dev Auth Pub Fac
Lease Rev Henrico Cnty Regl Jail Proj ................ 6.500 08/01/10 1,578,375
1,500 Henrico Cnty, VA Indl Dev Auth Pub Fac Lease
Rev Henrico Cnty Regl Jail Proj ...................... 7.125 08/01/21 1,612,140
5,000 Roanoke, VA Indl Dev Auth Hosp Rev Roanoke Mem
Hosp Carilion Hlth Sys Ser B Rfdg (MBIA Insd) ....... 4.700 07/01/20 4,529,150
1,050 Virginia St Hsg Dev Auth Comwlth
Mtg Ser A Subser A1 ................................. * 07/01/29 75,380
2,000 West Point, VA Indl Dev Auth Solid Waste
Disp Rev Chesapeake Corp Proj Ser A .................. 6.375 03/01/19 1,906,880
----------
9,701,925
----------
Washington 0.1%
5,000 Bellevue, WA Convention Cent Auth Spl
Oblig Rev Rfdg (MBIA Insd) .......................... * 02/01/24 808,350
----------
West Virginia 0.8%
6,550 Harrison Cnty, WV Cnty Cmnty Solid Waste
Disp Rev Potomac Edison Co Ser A ..................... 6.875 04/15/22 6,707,397
----------
Wisconsin 1.8%
2,200 Janesville, WI Indl Dev Rev Simmons Mfg Co ............. 7.000 10/15/17 2,263,316
5,250 Wisconsin Hsg & Econ Dev Auth Hsg Rev Ser B ............ 7.050 11/01/22 5,394,690
</TABLE>

11 See Notes to Financial Statements

*Zero coupon bond

<FN>
<F1> At February 28, 1995, cost for federal income tax purposes is $798,934,709;
the aggregate gross unrealized appreciation is $38,888,955 and the aggregate gross
unrealized depreciation is $20,329,606, resulting in net unrealized appreciation including options and
futures transactions of $18,559,349.
<F2> Securities purchased on a when issued or delayed delivery basis.
<F3> Assets segregated as collateral for when issued or delayed delivery
purchase commitments, open option and open futures transactions.
</FN>
</TABLE>

The following table summarizes the portfolio composition at February 28, 1995,
based upon quality ratings issued by Standard & Poor's. For securities not rated
by Standard & Poor's, the Moody's rating is used.

<TABLE>
Portfolio Composition
<CAPTION>
<S> <C>
AAA ......... 26.5%
AA ......... 10.8
A .......... 30.9
BBB ........ 13.8
BB ......... 10.3
Non-Rated ... 7.7%
-------
100.0%
-------
</TABLE>

12 See Notes to Financial Statements

<TABLE>
Statement of Assets and Liabilities
February 28,1995 (Unaudited)
- ----------------------------------------------------------------------------------------------
<CAPTION>
<S> <C>
Assets:
Investments, at Market Value (Cost $798,934,709) (Note 1) .................... $ 815,970,734
Short-Term Investments (Note 1) .............................................. 28,600,000
Cash ........................................................................ 91,998
Receivables:
Investments Sold ............................................................. 44,138,936
Interest ..................................................................... 14,076,505
Options at Market Value (Net premiums paid of $357,615) (Note 4) ............. 140,625
Unamortized Organizational Expenses (Note 1) ................................ 15,760
Other ........................................................................ 11,464
--------------
Total Assets ................................................................. 903,046,022
--------------
Liabilities:
Payables:
Investments Purchased ........................................................ 34,985,484
Income Distributions - Common and Preferred Shares .......................... 1,080,466
Margin on Futures (Note 4) .................................................. 745,406
Investment Advisory Fee (Note 2) ............................................. 460,600
Administrative Fee (Note 2) ................................................. 131,600
Accrued Expenses ............................................................. 392,563
--------------
Total Liabilities ............................................................ 37,796,119
--------------
Net Assets ................................................................... $ 865,249,903
--------------
Net Assets Consist of:
Preferred Shares ($.01 par value, authorized 100,000,000 shares, 6,000 issued
with liquidation preference of $50,000 per share) (Note 5) ................... $ 300,000,000
--------------
Common Shares ($.01 par value with an unlimited number of shares authorized,
36,270,469 shares issued and outstanding) ................................... 362,705
Paid in Surplus ............................................................. 536,860,572
Net Unrealized Appreciation on Investments .................................. 18,559,349
Accumulated Net Realized Gain on Investments ................................. 5,184,664
Accumulated Undistributed Net Investment Income ............................. 4,282,613
--------------
Net Assets Applicable to Common Shares ....................................... 565,249,903
--------------
Net Assets ................................................................... $ 865,249,903
--------------
Net Asset Value Per Common Share ($565,249,903 divided
by 36,270,469 shares outstanding) ............................................ $ 15.58
--------------

</TABLE>

13 See Notes to Financial Statements

<TABLE>
Statement of Operations
For the Six Months Ended February 28,1995 (Unaudited)
- --------------------------------------------------------------------------------------------------------------
<CAPTION>
<S> <C>
Investment Income:
Interest ................................................................................... $ 28,538,314
----------------
Expenses:
Investment Advisory Fee (Note 2) .......................................................... 2,894,461
Administrative Fee (Note 2) ................................................................ 826,989
Preferred Share Maintenance (Note 5) ....................................................... 391,822
Legal (Note 2) ............................................................................ 27,150
Trustees Fees and Expenses (Note 2) ........................................................ 10,860
Amortization of Organizational Expenses (Note 1) .......................................... 4,954
Other ...................................................................................... 296,297
----------------
Total Expenses ............................................................................. 4,452,533
----------------
Net Investment Income ...................................................................... $ 24,085,781
----------------
Realized and Unrealized Gain/Loss on Investments:
Realized Gain/Loss on Investments:
Proceeds from Sales ........................................................................ $ 249,863,686
Cost of Securities Sold .................................................................... (243,785,711)
----------------
Net Realized Gain on Investments (Including realized loss on closed and expired option
transactions of $1,168,652 and realized gain on futures transactions of $6,314,391) ....... 6,077,975
----------------
Unrealized Appreciation/Depreciation on Investments:
Beginning of the Period ................................................................... 22,127,253
End of the Period (Including unrealized depreciation on open option transactions of $216,990
and unrealized appreciation on open futures transactions of $1,740,314) .................... 18,559,349
----------------
Net Unrealized Depreciation on Investments During the Period ............................... (3,567,904)
----------------
Net Realized and Unrealized Gain on Investments ............................................ $ 2,510,071
----------------
Net Increase in Net Assets from Operations ................................................. $ 26,595,852
----------------
</TABLE>

14 See Notes to Financial Statements

<TABLE>
Statement of Changes in Net Assets
For the Six Months Ended February 28,1995 and
the Year Ended August 31,1994 (Unaudited)
- ------------------------------------------------------------------------------------------------------
<CAPTION>
Six Months Ended Year Ended
February 28,1995 August 31,1994
<S> <C> <C>
From Investment Activities:
Operations:
Net Investment Income ............................................. $ 24,085,781 $ 48,873,784
Net Realized Gain on Investments .................................. 6,077,975 2,250,416
Net Unrealized Depreciation on Investments During the Period ..... (3,567,904) (53,912,962)
---------------- ---------------
Change in Net Assets from Operations ............................. 26,595,852 (2,788,762)
---------------- ---------------
Distributions from Net Investment Income:
Common Shares ..................................................... (20,238,557) (40,477,323)
Preferred Shares ................................................. (5,550,865) (10,171,759)
---------------- ---------------
Total Distributions .............................................. (25,789,422) (50,649,082)
---------------- ---------------
Net Change in Net Assets from Investment Activities ............... 806,430 (53,437,844)
Net Assets:
Beginning of the Period .......................................... 864,443,473 917,881,317
---------------- ---------------
End of the Period (Including undistributed net investment income of
$4,282,613 and $5,986,254, respectively) ......................... $ 865,249,903 $ 864,443,473
---------------- ---------------
</TABLE>

15 See Notes to Financial Statements

<TABLE>
Financial Highlights
The following schedule presents financial highlights for one common share of the
Trust outstanding throughout the periods indicated.(Unaudited)
- -----------------------------------------------------------------------------------------------
<CAPTION>
September 27,1991
Six Months Year Year (Commencement
Ended Ended Ended of Investment
February 28, August 31, August 31, Operations) to
1995 1994 1993 August 31,1992
<S> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period <F1> ............ $ 15.562 $ 17.035 $ 16.328 $ 14.808
------------ ----------- ---------- -----------------
Net Investment Income ............... .664 1.347 1.410 1.166
Net Realized and Unrealized
Gain/Loss on Investments ........... .069 (1.424) .780 1.370
------------ ----------- ---------- -----------------
Total from Investment Operations ... .733 (.077) 2.190 2.536
------------ ----------- ---------- -----------------
Less:
Distributions from Net
Investment Income:
Paid to Common Shareholders ......... .558 1.116 1.100 .811
Common Share Equivalent
of Distributions Paid to
Preferred Shareholders .............. .153 .280 .246 .205
Distributions from Net Realized
Gain on Investments:
Paid to Common Shareholders ......... -0- -0- .111 -0-
Common Share Equivalent of
Distributions Paid to
Preferred Shareholders .............. -0- -0- .026 -0-
------------ ----------- ---------- -----------------
Total Distributions ................. .711 1.396 1.483 1.016
------------ ----------- ---------- -----------------
Net Asset Value, End of Period ..... $ 15.584 $ 15.562 $ 17.035 $ 16.328
------------ ----------- ---------- -----------------
Market Price Per Share
at End of Period .................... $ 14.875 $ 15.000 $ 16.750 $ 16.125
Total Investment Return
at Market Price
(Non-Annualized) <F2> .............. 3.12% (3.94%) 11.90% 13.24%
Total Return at Net Asset Value
(Non-Annualized) <F3> .............. 3.95% (2.22%) 12.31% 14.64%
Net Assets at End of Period
(In millions) ....................... $ 865.2 $ 864.4 $ 917.9 $ 891.7
Ratio of Expenses to Average
Net Assets Applicable to
Common Shares (Annualized) .......... 1.64% 1.64% 1.59% 1.49%
Ratio of Expenses to Average
Net Assets (Annualized) ............ 1.06% 1.09% 1.06% 1.03%
Ratio of Net Investment Income to
Average Net Assets Applicable to
Common Shares (Annualized) <F4> ..... 6.83% 6.52% 7.08% 6.85%
Portfolio Turnover .................. 29.96% 46.85% 48.45% 99.51%

<FN>
<F1> Net asset value at September 27, 1991, is adjusted for common and preferred
share offering costs of $.192 per common share.
<F2> Total investment return at market price reflects the change in market value
of the common shares for the period indicated with reinvestment of dividends in
accordance with the Trust's dividend reinvestment plan.
<F3> Total return at net asset value (NAV) reflects the change in value of the
Trust's assets with reinvestment of dividends based upon NAV.
<F4> Net investment income is adjusted for common share equivalent of
distributions paid to preferred shareholders.
</FN>
</TABLE>

16 See Notes to Financial Statements

Notes to Financial Statements
February 28,1995 (Unaudited)
- --------------------------------------------------------------------------------

1. Significant Accounting Policies
Van Kampen Merritt Municipal Trust (the "Trust") is registered as a diversified
closed-end management investment company under the Investment Company Act of
1940, as amended. The Trust commenced investment operations on September 27,
1991.

The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements.

A. Security Valuation- Investments are stated at value using market quotations
or, if such valuations are not available, estimates obtained from yield data
relating to instruments or securities with similar characteristics in accordance
with procedures established in good faith by the Board of Trustees. Short-term
securities with remaining maturities of less than 60 days are valued at
amortized cost.

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
maintain, in a segregated account with its custodian, assets having an aggregate
value at least equal to the amount of the when issued or delayed delivery
purchase commitments until payment is made.

C. Investment Income- Interest income is recorded on an accrual basis. Bond
premium and original issue discount are amortized over the expected life of each
applicable security.

D. Organizational Expenses- The Trust has reimbursed Van Kampen American Capital
Distributors, Inc. or its affiliates ("VKAC") for costs incurred in connection
with the Trust's organization and initial registration in the amount of $50,000.
These costs are being amortized on a straight line basis over the 60 month
period ending September 26, 1996. Van Kampen American Capital Investment
Advisory Corp. (the "Adviser") has agreed that in the event any of the initial
shares of the Trust originally purchased by VKAC are redeemed during the
amortization period, the Trust will be reimbursed for any unamortized
organizational expenses in the same proportion as the number of shares redeemed
bears to the number of initial shares held at the time of redemption.

Notes to Financial Statements (Continued)
February 28,1995 (Unaudited)
- --------------------------------------------------------------------------------

E. Federal Income Taxes- It is the Trust's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute substantially all of its taxable income to its
shareholders. Therefore, no provision for federal income taxes is required.

The Trust intends to utilize provisions of the federal income tax laws which
allow it to carry a realized capital loss forward for eight years following the
year of the loss and offset such losses against any future realized capital
gains. At August 31, 1994, the Trust had an accumulated capital loss
carryforward for tax purposes of $893,311, which will expire on August 31, 2001.
Net realized gains or losses may differ for financial and tax reporting purposes
primarily as a result of post October 31 losses which are not recognized for tax
purposes until the first day of the following fiscal year.

F. Distribution of Income and Gains- The Trust declares and pays dividends from
net investment income to common shareholders monthly. Net realized gains, if
any, are distributed annually on a pro rata basis to common and preferred
shareholders. Distributions from net realized gains for book purposes may
include short-term capital gains, which are included as ordinary income for tax
purposes.

2. Investment Advisory Agreement and Other Transactions with Affiliates
Under the terms of the Trust's Investment Advisory Agreement, the Adviser will
provide investment advice and facilities to the Trust for an annual fee payable
monthly of .70% of the average net assets of the Trust. In addition, the Trust
will pay a monthly administrative fee to VKAC, the Trust's Administrator, at an
annual rate of .20% of the average net assets of the Trust. The administrative
services provided by the Administrator include record keeping and reporting
responsibilities with respect to the Trust's portfolio and preferred shares and
providing certain services to shareholders.

Certain legal expenses are paid to Skadden, Arps, Slate, Meagher & Flom,
counsel to the Trust, of which a trustee of the Trust is an affiliated person.

For the six months ended February 28, 1995, the Trust recognized expenses of
approximately $26,500 representing VKAC's cost of providing accounting and legal
services to the Trust.

Certain officers and trustees of the Trust are also officers and directors of
VKAC. The Trust does not compensate its officers or trustees who are officers of
VKAC.

Notes to Financial Statements (Continued)
February 28,1995 (Unaudited)
- --------------------------------------------------------------------------------

The Trust has implemented deferred compensation and retirement plans for its
Trustees. Under the deferred compensation plan, Trustees may elect to defer all
or a portion of their compensation to a later date. The retirement plan covers
those Trustees who are not officers of VKAC. The Trust's liability under the
deferred compensation and retirement plans at February 28, 1995, was
approximately $11,700.

At February 28, 1995, VKAC owned 6,700 common shares of the Trust.

3. Investment Transactions
Aggregate purchases and cost of sales of investment securities, excluding
short-term notes, for the six months ended February 28, 1995, were $244,264,045
and $243,785,711, respectively.

4. Derivative Financial Instruments
A derivative financial instrument in very general terms refers to a security
whose value is "derived" from the value of an underlying asset, reference rate
or index.

The Trust has a variety of reasons to use derivative instruments, such as to
attempt to protect the Trust against possible changes in the market value of its
portfolio and to manage the portfolio's effective yield, maturity and duration.
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 on investments. Upon disposition, a realized gain or
loss is recognized accordingly, except for exercised option contracts where the
recognition of gain or loss is postponed until the disposal of the security
underlying the option contract.

Summarized below are the specific types of derivative financial instruments
used by the Trust.

A. Option Contracts- An option contract gives the buyer the right, but not the
obligation to buy (call) or sell (put) an underlying item at a fixed exercise
price during a specified period. These contracts are generally used by the Trust
to manage the portfolio's effective maturity and duration.

Transactions in options for the six months ended February 28, 1995, were as
follows:

Contracts Premium

Outstanding at August 31, 1994 1,600 $ (883,247)
Options Written and Purchased (Net) 9,672 (1,742,191)
Options Terminated in Closing Transactions (Net) (3,850) 797,505
Options Expired (Net) (5,822) 1,588,916
Options Exercised (Net) (850) (118,598)
--------- --------------
Outstanding at February 28, 1995 750 $ (357,615)
--------- --------------

Notes to Financial Statements (Continued)
February 28,1995 (Unaudited)
- --------------------------------------------------------------------------------

The related futures contracts of the outstanding option transactions as of
February 28, 1995, and the description and market value is as follows:

<TABLE>
<CAPTION>
Exp.Month/ Market Value
Contracts Exercise Price of Option
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
April 1995 US Treasury Bond
Futures--Purchased Puts 750 Apr/101 $140,625
</TABLE>

B. Futures Contracts- A futures contract is an agreement involving the delivery
of a particular asset on a specified future date at an agreed upon price. The
Trust generally invests in futures on U.S. Treasury Bonds and the Municipal Bond
index and typically closes the contract prior to the delivery date. These
contracts are generally used to manage the portfolio's effective maturity and
duration.

The fluctuation in market value of the contracts is settled daily through a
cash margin account. Realized gains and losses are recognized when the contracts
are closed or expire.

Transactions in futures contracts for the six months ended February 28, 1995,
were as follows:

<TABLE>
<CAPTION>
Contracts
<S> <C>
Outstanding at August 31, 1994 ..... 1,950
Futures Opened .................... 26,402
Futures Closed ..................... (22,726)
---------
Outstanding at February 28, 1995 ... 5,626
---------
</TABLE>

Notes to Financial Statements (Continued)
February 28,1995 (Unaudited)
- --------------------------------------------------------------------------------

The futures contracts outstanding as of February 28, 1995, and the descriptions
and unrealized appreciation/depreciation are as follows:

<TABLE>
<CAPTION>
<S> <C> <C>
Unrealized
Appreciation/
Contracts Depreciation

US Treasury Bond Futures
Mar 1995-Sells to Open ............................. 2,285 $(7,198,576)
Municipal Bond Futures
Mar 1995-Sells to Open ............................. 841 (1,617,474)
5-Year US Treasury Note Futures
Mar 1995-Buys to Open .............................. 500 1,653,774
10-Year US Treasury Note Futures
Mar 1995-Buys to Open .............................. 2,000 8,902,590
--------- -------------
5,626 $ 1,740,314
--------- -------------
</TABLE>

C. Swap Transactions- These transactions are identified in the portfolio of
investments and represent an agreement between two parties to exchange a series
of cash flows at specified intervals. The cash flows can be indexed to various
indices such as interest rates. The difference in the cash flows is recorded as
increases or decreases in interest income.

D. Indexed Securities- These instruments are identified in the portfolio of
investments. The price of these securities may be more volatile than the price
of a comparable fixed rate security.

An Inverse Floating security is one where the coupon is inversely indexed to a
short-term floating interest rate multiplied by a specified factor. As the
floating rate rises, the coupon is reduced. Conversely, as the floating rate
declines, the coupon is increased. These instruments are typically used by the
Trust to enhance the yield of the portfolio.

An Embedded Cap security includes a cap strike level such that the coupon
payment may be supplemented by cap payments if the floating rate index upon
which the cap is based rises above the strike level. The Trust invests in these
instruments as a hedge against a rise in the short-term interest rates which it
pays on its preferred shares.

Notes to Financial Statements (Continued)
February 28,1995 (Unaudited)
- --------------------------------------------------------------------------------

An Embedded Swap security includes a swap component such that the fixed coupon
component of the underlying bond is adjusted by the difference between the
securities fixed swap rate and the floating swap index. As the floating rate
rises, the coupon is reduced. Conversely, as the floating rate declines, the
coupon is increased. These instruments are typically used by the Trust to
enhance the yield of the portfolio.

5. Preferred Shares
The Trust has outstanding 6,000 Auction Preferred Shares ("APS") in four series
of 1,500 shares each. Dividends are cumulative and the dividend rate is
periodically reset through an auction process. The dividend periods for Series
A, Series B and Series D are 7 days, 28 days and 28 days, respectively. Series C
is in a special dividend period of two years which expires in March 1995, at
which time it will revert back to a seven day period. The average rate in effect
on February 28, 1995, was 4.03%. During the six months ended February 28, 1995,
the rates ranged from 3.02% to 5.50%.

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.

The APS are redeemable at the option of the Trust in whole or in part at the
liquidation value of $50,000 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.

Funds Distributed by Van Kampen American Capital

GLOBAL AND
INTERNATIONAL
Govett Emerging Markets Fund
AC Global Equity Fund
Govett Global Government Income Fund
AC Global Government Securities
AC Global Managed Assets Fund
Govett International Equity Fund
Govett Latin America Fund
Govett Pacific Strategy Fund

EQUITY
Growth
AC Emerging Growth Fund
AC Enterprise Fund
AC Pace Fund
Govett Smaller Companies Fund
Growth & Income
VKM Balanced Fund
AC Comstock Fund
AC Equity Income Fund
AC Growth and Income Fund
VKM Growth and Income Fund
AC Harbor Fund
AC Real Estate Securities Fund
VKM Strategic Income Fund
VKM Utility Fund
AC Utilities Income Fund

FIXED INCOME
VKM Adjustable Rate U.S.
Government Fund
AC Corporate Bond Fund
AC Federal Mortgage Trust
AC Government Securities
VKM High Yield Fund
AC High Yield Investments
VKM Money Market Fund
VKM Prime Rate Income Trust
AC Reserve Fund
VKM Short-Term Global Income Fund
VKM U.S. Government Fund
AC U.S. Government Trust for Income

TAX-FREE
VKM California Insured Tax Free Fund
VKM Florida Insured Tax Free
Income Fund
VKM Insured Tax Free Income Fund
VKM Limited Term Municipal
Income Fund
AC Municipal Bond Fund
VKM Municipal Income Fund
VKM New Jersey Tax Free Income Fund
VKM New York Tax Free Income Fund
VKM Pennsylvania Tax Free Income Fund
AC Tax-Exempt Trust
-- High Yield Municipal Portfolio
-- Insured Municipal Portfolio
VKM Tax Free High Income Fund
VKM Tax Free Money Fund
AC Texas Municipal Securities

Ask your investment representative for a prospectus containing more complete
information, including sales charges and expenses. Please read it carefully
before you invest or send money. Or call us direct at 1-800-421-5666 weekdays
from 7:00 a.m. to 7:00 p.m. Central time.

Van Kampen Merritt Municipal Trust

Officers and Trustees

Don G. Powell*
Chairman and Trustee

Dennis J. McDonnell*
President and Trustee

David C. Arch
Trustee

Rod Dammeyer
Trustee

Howard J Kerr
Trustee

Theodore A. Myers
Trustee

Hugo F. Sonnenschein
Trustee

Wayne W. Whalen*
Trustee

Peter W. Hegel*
Vice President

Ronald A. Nyberg*
Vice President and Secretary

Edward C. Wood, III*
Vice President and Treasurer

Scott E. Martin*
Assistant Secretary

Weston B. Wetherell*
Assistant Secretary

John L. Sullivan*
Controller

Steven M. Hill*
Assistant Treasurer

Investment Adviser

Van Kampen American Capital Investment Advisory Corp.
One Parkview Plaza
Oakbrook Terrace, Illinois 60181

Custodian and Transfer Agent

State Street Bank
and Trust Company
225 Franklin Street
P.O. Box 1713
Boston, Massachusetts 02105

Legal Counsel

Skadden, Arps, Slate, Meagher & Flom
333 West Wacker Drive Chicago, Illinois 60606

Independent Auditors

KPMG Peat Marwick LLP
Peat Marwick Plaza
303 East Wacker Drive Chicago, Illinois 60601

* "Interested" persons of the Trust, as defined in the Investment Company Act of
1940.

SM denotes a service mark of Van Kampen American Capital Distributors, Inc.

This report is submitted for the general information of the shareholders of the
Trust. It is not authorized for distribution to prospective investors unless it
has been preceded or is accompanied by an effective prospectus of the Trust
which contains additional information on how to purchase shares, the sales
charge, and other pertinent data.