VAN KAMPEN MERRITT VALUE MUNICIPAL INCOME TRUST, N-30D, 1995-06-29

VAN KAMPEN MERRITT VALUE MUNICIPAL INCOME TRUST
N-30D, 1995-06-29

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Table of Contents

<TABLE>
<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>

Page 1:

Letter to Shareholders

June 16, 1995

Dear Shareholder:

During the six-month period covered by this report, November 1, 1994 through
April 30, 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.

Market Overview

Most of 1994 was a difficult period for fixed-income investors as the Federal
Reserve Board's crusade against inflation drove interest rates markedly higher.
The yield on 30-year Treasury securities, for example, climbed from 6.35 percent
as the year began to a high of 8.16 percent by early November. As interest rates
rose, fixed-income investments declined in value.

The fixed-income markets have rebounded considerably since late 1994, however,
with growing confidence that the Fed's inflation fighting initiatives have taken
hold. The yield on 30-year Treasury securities fell to 7.34 percent by the end
of April 1995 and to approximately 6.50 percent at the time of this writing.
This rate reversal has pushed bond prices back to February 1994 levels. Closed-
end municipal bond funds, in particular, have been among the greatest
beneficiaries in this rally, earning back virtually all of last year's losses
and posting attractive returns.

Performance Summary

The Trust achieved a six-month total return of 20.72 percent <F1>, based on
market price, for the period ended April 30, 1995. This robust performance can
be partially attributed to the Trust's leveraged capital structure, which has
helped it to more fully benefit from a fall in long- term interest rates over
the last six months. While leveraging adds certain financing risks and
volatility, it is designed, over time, to provide shareholders with enhanced
returns by taking advantage of the yield differential between long-term and
short-term interest rates.

Clearly, the Trust recovered from the difficult previous six-month period and
made significant price gains. The Trust's closing stock price, for example,
gained more than 16 percent from its $10.75 level on October 31, 1994, to $12.50
on April 30, 1995. As the graph on the following page shows, we've also seen the
Trust's net asset value rebound during the last six months.

Although intermediate- and long-term interest rates eased during this
reporting period, short-term interest rates have remained persistently high,
placing continued pressure on the Trust's preferred rates and common dividend.
The Trust was able, however, to sustain its annualized dividend level in this
environment at $0.912 per common share, which represents a tax-exempt
distribution rate of 7.30 percent <F3>, based on the closing stock price of
$12.50 per share on April 30, 1995. For shareholders in the 36 percent federal
income tax bracket, this distribution rate represents a yield equivalent to a
taxable investment earning 11.41 percent <F4>.

[Photo]
Dennis J. McDonnell and Don G. Powell

(Continued on page two)

Page: 2

Outlook

The outlook for fixed-income securities appears favorable. To date, inflation
remains under control, and recent economic data continues to suggest a slowdown
in the economy. First-quarter gross domestic product, for example, grew at an
annual rate of 2.8 percent, substantially lower than its fourth-quarter rate of
5.1 percent last year. Many analysts now expect GDP to grow at an annual rate
between 1 and 2 percent in the second half of this year. Should this scenario
play out, we suspect that the Fed is more likely to lower than raise short-term
rates, which wouldbe a positive development for all fixed-income investors.

Regarding the municipal market, we remain optimistic about the current supply-
and-demand dynamics. 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 be steady, if not strong. A decline in supply combined with steady demand
should lend price stability and price support to this market. We believe the
Trust will continue to provide shareholders with long-term value as we seek to
maintain a high level of current income over time.

[Graph]

Trust Rebounds in 1995

<TABLE>
COMPARISON OF NAV AND MARKET PRICE OF THE TRUST
<CAPTION>
Measurement Market
Period NAV Price
<S> <C> <C>
30-Apr-94 $13.91 12.625
31-May-94 $14.09 12.875
30-Jun-94 $13.84 12.875
31-Jul-94 $14.09 12.625
31-Aug-94 $14.04 12.375
30-Sep-94 $13.53 11.500
31-Oct-94 $12.90 10.750
30-Nov-94 $12.23 11.375
31-Dec-94 $12.82 11.000
31-Jan-95 $13.31 12.000
28-Feb-95 $14.00 12.375
31-Mar-95 $14.07 12.375
30-Apr-95 $13.87 12.500
</TABLE>

Corporate News

As you may have already noticed, we have adopted a new design for our
shareholder reports that reflects 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 advertising campaign introducing Van Kampen
American Capital. Full page ads appeared in The Wall Street Journal in the
first quarter of 1995 -- 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
investment with Van Kampen American Capital.

Sincerely,

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

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

Page: 3

<TABLE>
Performance Results for the Period Ended April 30, 1995
Van Kampen Merritt Value Municipal Income Trust
(NYSE Ticker Symbol VKV)

Total Returns

Six-month total return based on market price<F1> .................................. 20.72%
Six-month total return based on NAV<F2> ........................................... 11.24%

Distribution Rates

Distribution rate as a % of initial offer stock price<F3> ......................... 6.08%
Taxable-equivalent distribution rate as a % of initial offer stock price<F4> ...... 9.50%
Distribution rate as a % of 04/30/95 closing stock price<F3> ...................... 7.30%
Taxable-equivalent distribution rate as a % of 04/30/95 closing stock price<F4> ... 11.41%

Share Valuations

Net asset value as of 04/30/95 .................................................... $ 13.87
Preferred share (Series A) rate as of 04/30/95<F5> ................................ 4.340%
Preferred share (Series B) rate as of 04/30/95<F5> ................................ 4.150%
Preferred share (Series C) rate as of 04/30/95<F5> ................................ 4.100%
Preferred share (Series D) rate as of 04/30/95<F5> ................................ 4.089%
Preferred share (Series E) rate as of 04/30/95<F5> ................................ 4.750%
Closing common stock price as of 04/30/95 ........................................ $ 12.500
Six-month high common stock price (03/27/95) ..................................... $ 12.875
Six-month low common stock price (11/18/94) ...................................... $ 10.250

<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 April 1995, and not the earnings of the Trust.
<F4> The taxable-equivalent distribution rate is calculated assuming a 36%
federal 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 federal 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.
</TABLE>

Page: 4

<TABLE>
Portfolio of Investments
<CAPTION>
April 30,1995 (Unaudited)
- -----------------------------------------------------------------------------------------------
Par
Amount
(000) Description Coupon Maturity Market Value
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Municipal Bonds
Alabama 1.1%
$ 3,830 Birmingham, AL Spl Care Fac Fin Auth Hlthcare
Fac Rev Childrens Hosp Ser A (FGIC Insd) ......... 5.625% 06/01/13 $ 3,620,039
2,650 Huntsville, AL Hlth Care Auth Hlth Care
Fac Rev Ser A (MBIA Insd) ........................ 6.375 06/01/22 2,674,327
------------
6,294,366
------------
Alaska 0.2%
1,000 North Slope Borough, AK Ser B (Cap Guar Insd) .... 7.500 06/30/01 1,121,120
------------
Arizona 1.2%
6,000 Pima Cnty, AZ Indl Dev Auth Indl Rev Lease Oblig
Irvington Proj Tucson Ser A Rfdg (FSA Insd) ...... 7.250 07/15/10 6,578,820
------------
California 9.7%
2,500 California Pollutn Ctl Fin Auth Pollutn Ctl Rev
San Diego Gas & Elec Ser A (MBIA Insd) ........... 5.850 06/01/21 2,341,500
1,500 California St Pub Wks Brd Lease Rev Dept of
Correction Monterey Ser A (MBIA Insd) ............. 6.400 11/01/10 1,567,095
6,000 California St Pub Wks Brd Lease Rev Dept of
Corrections St Prisons Ser A Rfdg (AMBAC Insd) ... 5.250 12/01/13 5,468,160
2,000 California St Pub Wks Brd Lease Rev Dept of
Corrections St Prisons Ser A Rfdg (AMBAC Insd) ... 5.000 12/01/19 1,712,460
6,000 California Statewide Cmntys Dev Corp Ctfs Partn
Sharp Hlthcare Oblig Group (MBIA Insd) ............ 6.000 08/15/24 5,822,340
2,000 Fresno, CA Hlth Fac Rev Holy Cross Hlth
Sys Saint Agnes Med (MBIA Insd) ................... 6.625 06/01/21 2,073,700
1,250 Kings Cnty, CA Waste Mgmt Auth Solid Waste Rev ... 7.200 10/01/14 1,289,175
3,000 Los Angeles Cnty, CA Pub Wks Fin Auth Lease
Rev Multi Cap Fac Proj IV (MBIA Insd) ............ 5.250 12/01/16 2,663,130
1,000 Los Angeles, CA Cmnty Redev Agy Cmnty Redev
Fin Auth Rev Grand Cent Qualified Redev Ser A .... 5.900 12/01/13 947,060
2,000 Los Angeles, CA Convention & Exhibition Cent
Auth Lease Rev Ser A Rfdg (MBIA Insd) ............. 5.125 08/15/21 1,724,960
9,500 Los Angeles, CA Dept Wtr & Pwr Elec Plant
Rev Crossover Rfdg (FGIC Insd) ................... 5.375 09/01/23 8,470,580
2,145 Los Angeles, CA Wastewtr Sys Rev Ser A
Rfdg (MBIA Insd) ................................. 5.700 06/01/20 2,014,434
3,000 Los Angeles, CA Wastewtr Sys Rev Ser D
Rfdg (FGIC Insd) .................................. 5.200 11/01/21 2,615,490
12,500 Mount Diablo, CA Hosp Dist Rev Ser A
(Embedded Cap) (AMBAC Insd) ...................... 5.125 12/01/23 10,982,875
5,700 Sacramento, CA City Fin Auth Rev
Comb Proj B (MBIA Insd) ........................... * 11/01/15 1,597,368
2,000 Southern CA Pub Pwr Auth (FSA Insd) .............. 6.000 07/01/12 1,989,220
------------
53,279,547
------------
See Notes to Financial Statements

</TABLE>

Page: 5

<TABLE>
Portfolio of Investments (Continued)
<CAPTION>
April 30,1995 (Unaudited)
- -------------------------------------------------------------------------------------------------
Par
Amount
(000) Description Coupon Maturity Market Value
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Colorado 2.7%
$ 1,750 Denver, CO City & Cnty Arpt Rev Ser A .............. 6.900% 11/15/98 $ 1,796,620
1,250 Denver, CO City & Cnty Arpt Rev Ser A .............. 8.875 11/15/12 1,394,263
3,095 Denver, CO City & Cnty Arpt Rev Ser A .............. 8.500 11/15/23 3,346,004
6,000 Denver, CO City & Cnty Arpt Rev Ser C .............. 6.600 11/15/04 5,963,700
2,000 Meridian Metro Dist CO Peninsular &
Oriental Steam Navig Co Rfdg ........................ 7.500 12/01/11 2,112,200
------------
14,612,787
------------
Connecticut 1.8%
2,500 Connecticut St Hlth & Edl Fac Auth Rev
Nursing Home Pgm AHF/Hartford ....................... 7.125 11/01/14 2,673,350
3,000 Connecticut St Ser A ................................ 5.500 03/15/10 2,876,250
4,500 Connecticut St Ser A ................................ 5.650 03/15/12 4,357,080
------------
9,906,680
------------
District of Columbia 0.3%
2,000 Metropolitan WA, DC Arpts Auth Genl Arpt
Rev Ser A (MBIA Insd) .............................. 5.750 10/01/20 1,858,960
------------
Florida 5.5%
1,985 Bay Cnty, FL Sch Brd Ctfs Partn (AMBAC Insd) ........ 6.750 07/01/12 2,141,676
3,500 Citrus Cnty, FL Hosp Brd Rev Citrus
Mem Hosp Ser A Rfdg (FSA Insd) ..................... 6.500 08/15/12 3,671,185
2,590 Dade Cnty, FL Aviation Rev Amt Ser B (MBIA Insd) ... 5.750 10/01/15 2,467,389
2,000 Florida Hsg Fin Agy Rfdg Single Family
Mtg Ser A Rfdg (GNMA Collateralized) ............... 6.650 01/01/24 2,019,140
3,000 Hillsborough Cnty, FL Cap Impt Pgm Rev
Criminal Justice Fac Rfdg (FGIC Insd) ............... 5.250 08/01/16 2,731,410
3,000 Hillsborough Cnty, FL Indl Dev Auth Pollutn
Ctl Rev Tampa Elec Co Proj Ser 92 Rfdg ............. 8.000 05/01/22 3,502,410
2,945 Hillsborough Cnty, FL Sch Brd Ctfs
Partn (MBIA Insd) ................................... 6.000 07/01/12 2,973,331
1,300 Jacksonville, FL Hlth Fac Auth Hosp Rev
Baptist Med Cent Proj Ser A Rfdg (MBIA Insd) ........ 7.300 06/01/19 1,401,946
4,000 Orlando, FL Util Comm Wtr & Elec Rev Ser A
(Prerefunded @ 10/01/01) ........................... 6.500 10/01/20 4,368,120
5,000 Pinellas Cnty, FL Hsg Fin Auth Single Family Mtg
Rev Multi Cnty Pgm Ser A (GNMA Collateralized) ..... 6.700 02/01/28 5,043,800
------------
30,320,407
------------
See Notes to Financial Statements

</TABLE>

Page: 6

<TABLE>
Portfolio of Investments (Continued)
<CAPTION>
April 30,1995 (Unaudited)
- -----------------------------------------------------------------------------------------------------
Par
Amount
(000) Description Coupon Maturity Market Value
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Georgia 2.7%
$ 3,000 Burke Cnty, GA Dev Auth Pollutn Ctl Rev GA Pwr
Co Plant Vogtle Proj (MBIA Insd) ....................... 6.350% 05/01/19 $ 3,007,230
7,750 Fulton De Kalb, GA Hosp Auth Hosp
Rev Ctfs Rfdg (MBIA Insd) .............................. 5.500 01/01/20 7,086,367
5,000 Georgia Muni Elec Auth Pwr Rev
Ser B Rfdg (FGIC Insd) ................................. 5.700 01/01/19 4,762,700
------------
14,856,297
------------
Hawaii 0.4%
2,250 Hawaii St Arpts Sys Rev 3rd Ser Rfdg (AMBAC Insd) ....... 5.750 07/01/09 2,215,530
------------
Illinois 6.3%
3,500 Chicago, IL Cap Apprec (AMBAC Insd) ..................... * 01/01/17 787,745
10,000 Chicago, IL O'Hare Intl Arpt Spl Intl
Terminal Ser A (FGIC Insd) ............................. 6.500 01/01/18 10,078,700
1,000 Chicago, IL Park District ............................... 6.700 01/01/11 1,050,140
2,250 Illinois Hlth Fac Auth Rev Evangelical
Hosps Ser A Rfdg (FSA Insd) ............................ 6.750 04/15/17 2,330,910
1,250 Illinois Hlth Fac Auth Rev Evangelical
Hosps Ser C (FSA Insd) ................................. 6.750 04/15/17 1,294,950
1,200 Illinois Hlth Fac Auth Rev Lutheran Genl
Hlth Sys Ser A Rfdg (FSA Insd) .......................... 6.125 04/01/12 1,185,624
3,000 Illinois Hlth Fac Auth Rev OSF Hlthcare Sys Rfdg ........ 5.750 11/15/07 2,898,540
4,170 Illinois Hlth Fac Auth Rev Servantcor
Proj Ser A (Cap Guar Insd) ............................. 6.000 08/15/12 4,060,245
2,070 Northern IL Univ Ctfs Partn Hoffman
Estates Cent Proj (Cap Guar Insd) ....................... 5.400 09/01/16 1,870,742
5,000 Regional Tran Auth IL Ser A (AMBAC Insd) ............... 8.000 06/01/17 6,158,000
3,000 Sangamon Cnty, IL Sch Dist No 186
Springfield Sch (FGIC Insd) ............................ 6.500 03/01/08 3,207,660
------------
34,923,256
------------
Indiana 2.4%
12,750 Indiana Tran Fin Auth Hwy Rev Cap
Apprec Ser A (AMBAC Insd) .............................. * 06/01/17 3,224,985
5,500 Indiana Tran Fin Auth Hwy Rev Cap
Apprec Ser A (AMBAC Insd) .............................. * 06/01/18 1,301,410
5,500 Indianapolis, IN Gas Util Rev Ser A Rfdg (FGIC Insd) ... 5.375 06/01/21 4,897,090
2,500 La Porte Cnty, IN Hosp Auth Hosp Fac
Rev La Porte Hosp Inc Rfdg .............................. 6.000 03/01/23 2,120,175
2,000 Petersburg, IN Pollutn Ctl Rev Indianapolis
Pwr & Lt Ser A Rfdg .................................... 6.100 01/01/16 1,951,640
------------
13,495,300
------------
See Notes to Financial Statements

</TABLE>

Page: 7

<TABLE>
Portfolio of Investments (Continued)
<CAPTION>
April 30,1995 (Unaudited)
- ---------------------------------------------------------------------------------------------
Par
Amount
(000) Description Coupon Maturity Market Value
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Kentucky 2.8%
$ 9,900 Kenton Cnty, KY Arpt Brd Arpt Rev Spl Fac
Delta Airls Proj Ser A ........................ 7.500% 02/01/12 $ 10,114,533
3,500 Kenton Cnty, KY Arpt Brd Arpt Rev Spl Fac
Delta Airls Proj Ser A ........................ 7.500 02/01/20 3,582,705
1,750 Mount Sterling, KY Lease Rev KY
League Cities Fdg Ser A ....................... 6.100 03/01/18 1,681,155
-------------
15,378,393
-------------
Louisiana 1.8%
1,500 Louisiana Pub Fac Auth Hosp Rev Southern Baptist
Hosp Proj Rfdg (FSA Insd) ..................... 6.800 05/15/12 1,593,525
2,000 Louisiana St Ser A (AMBAC Insd) ............... 6.500 05/01/10 2,091,140
6,000 Saint Charles Parish, LA Solid Waste Disp Rev
LA Pwr & Lt Co Proj (FSA Insd) <F2> ............ 7.050 04/01/22 6,338,160
-------------
10,022,825
-------------
Maine 1.2%
3,000 Maine Edl Ln Marketing Corp Student
Ln Rev Ser A4 <F2> ............................. 5.950 11/01/03 3,029,850
1,630 Maine St Hsg Auth Mtg Purp Ser A6 ............. 6.350 11/15/22 1,558,622
2,000 Maine St Hsg Auth Mtg Purp Ser C2 ............. 6.875 11/15/23 2,029,100
-------------
6,617,572
-------------
Massachusetts 5.4%
2,000 Massachusetts St Hlth & Edl Fac Auth Rev
(AMBAC Insd) .................................. 7.100 07/01/21 2,155,800
3,000 Massachusetts St Hlth & Edl Fac Auth Rev North
Shore Med Cent Ser A (MBIA Insd) ............... 5.625 07/01/14 2,826,990
8,850 Massachusetts St Hsg Fin Agy Hsg Proj Ser A .... 6.375 04/01/21 8,722,471
14,500 Massachusetts St Wtr Res Auth Ser A
(Prerefunded @ 12/01/01) ...................... 6.500 12/01/19 15,899,975
-------------
29,605,236
-------------
Michigan 0.4%
1,250 Battle Creek, MI Downtown Dev Auth Tax
Increment Rev .................................. 7.600 05/01/16 1,317,687
3,985 Grand Rapids, MI Downtown Dev Auth Tax
Increment Rev Cap Apprec (MBIA Insd) ........... * 06/01/17 1,007,966
-------------
2,325,653
-------------
Nevada 2.9%
7,820 Clark Cnty, NV Arpt Sys Rfdg (MBIA Insd) ....... 5.300 07/01/13 7,082,027
5,750 Clark Cnty, NV Indl Dev Rev NV Pwr Co
Proj C Rfdg (AMBAC Insd) ...................... 7.200 10/01/22 6,261,232
2,675 Nevada Hsg Division Single Family
Pgm Mezz B (FHA Insd) ......................... 6.550 10/01/12 2,650,176
-------------
15,993,435
-------------
See Notes to Financial Statements

</TABLE>

Page: 8

<TABLE>
Portfolio of Investments (Continued)
<CAPTION>
April 30,1995 (Unaudited)
- -------------------------------------------------------------------------------------------------
Par
Amount
(000) Description Coupon Maturity Market Value
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
New Hampshire 1.3%
$ 8,000 New Hampshire St Tpk Sys Rev (MBIA Insd) ........... 5.250% 02/01/19 $ 7,115,200
------------
New Jersey 4.1%
1,000 Bordentown, NJ Swr Auth Rev Ser C (MBIA Insd) ...... 6.800 12/01/25 1,071,550
1,600 Middlesex Cnty, NJ Ctfs Partn (MBIA Insd) .......... 6.125 02/15/19 1,609,232
1,000 New Jersey Econ Dev Auth Econ Dev Rev
Manahawkin Convalescent Ser A Rfdg (FHA Insd) ...... 6.650 08/01/18 1,021,720
2,500 New Jersey Econ Dev Auth Mkt Transition
Fac Rev Sr Lien Ser A (MBIA Insd) .................. 5.800 07/01/09 2,473,600
2,290 New Jersey Hlthcare Fac Fin Auth Rev
Deborah Heart & Lung Cent .......................... 6.200 07/01/13 2,205,293
1,695 New Jersey Hlthcare Fac Fin Auth Rev
Genl Hosp Cent at Passaic (FSA Insd) ................ 6.000 07/01/06 1,764,885
2,500 New Jersey Hlthcare Fac Fin Auth Rev Genl
Hosp Cent at Passaic (FSA Insd) ..................... 6.750 07/01/19 2,657,075
2,250 New Jersey St Edl Fac Auth Rev Glassboro
St College Ser A (MBIA Insd) ....................... 6.700 07/01/21 2,375,865
6,750 Salem Cnty, NJ Indl Pollutn Ctl Fin Auth Rev
Pollutn Ctl Pub Svc Elec & Gas Ser A (MBIA Insd) ... 5.450 02/01/32 5,984,010
6,000 West New York, NJ Muni Util Auth Swr
Rev Rfdg (FGIC Insd) ............................... * 12/15/18 1,501,140
------------
22,664,370
------------
New York 11.6%
4,175 New York City Muni Wtr Fin Auth Wtr &
Swr Sys Rev Ser A .................................. 7.000 06/15/09 4,428,381
3,180 New York City Muni Wtr Fin Auth Wtr &
Swr Sys Rev Ser B (AMBAC Insd) ..................... 5.375 06/15/19 2,905,407
2,500 New York City Muni Wtr Fin Auth Wtr &
Swr Sys Rev Ser F (MBIA Insd) ....................... 5.500 06/15/15 2,354,825
4,000 New York City Muni Wtr Fin Auth Wtr &
Swr Sys Rev Ser F (MBIA Insd) ....................... 5.500 06/15/23 3,683,800
7,270 New York City Ser A Rfdg ........................... 7.000 08/01/04 7,623,176
5,700 New York City Ser E Rfdg ........................... 6.600 08/01/03 5,866,269
2,000 New York St Dorm Auth Rev City Univ 3rd
Genl Resources Ser 2 (MBIA Insd) ................... 6.250 07/01/19 2,019,220
7,500 New York St Dorm Auth Rev Cons City
Univ Sys Ser A ...................................... 5.750 07/01/13 6,957,075
1,000 New York St Dorm Auth Rev Court Fac Lease Ser A ..... 5.375 05/15/16 872,950

See Notes to Financial Statements

</TABLE>

Page: 9

<TABLE>
Portfolio of Investments (Continued)
<CAPTION>
April 30,1995 (Unaudited)
- ---------------------------------------------------------------------------------------------
Par
Amount
(000) Description Coupon Maturity Market Value
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
New York (Continued)
$ 4,000 New York St Dorm Auth Rev St Univ Edl
Fac Ser A Rfdg (AMBAC Insd) ..................... 5.500% 05/15/09 $ 3,904,360
5,215 New York St Dorm Auth Rev St Univ Edl
Fac Ser B Rfdg ................................. 7.375 05/15/14 5,560,494
2,310 New York St Med Care Fac Fin Agy Rev Saint
Peters Hosp Proj Ser A (AMBAC Insd) ............. 5.375 11/01/13 2,152,366
4,000 New York St Ser B Rfdg .......................... 6.375 08/15/00 4,254,720
3,000 New York St Twy Auth Hwy & Brdg Trust
Fund Ser B (FGIC Insd) .......................... 6.000 04/01/14 2,958,120
2,000 New York St Twy Auth Svc Contract Rev
Loc Hwy & Brdg (MBIA Insd) ..................... 5.750 04/01/13 1,941,160
4,000 New York St Urban Dev Corp Rev
Correctional Cap Fac Rfdg ....................... 5.500 01/01/15 3,563,080
3,130 New York St Urban Dev Corp Rev Correctional
Fac Ser A Rfdg ................................. 5.500 01/01/16 2,773,211
------------
63,818,614
------------
North Carolina 0.6%
3,250 North Carolina Eastn Muni Pwr
Agy Pwr Sys Rev Ser B Rfdg ..................... 6.000 01/01/13 3,054,383
------------
North Dakota 0.4%
2,000 Ward Cnty, ND Hlthcare Fac Rev Saint
Joseph's Hosp Corp Proj ......................... 8.875 11/15/24 2,146,540
------------
Ohio 3.0%
2,110 Cleveland Rock Glen Hsg Assistance Corp OH
Mtg Rev Ser A Rfdg (FHA Insd) ................... 6.750 01/15/25 2,155,492
1,500 Fairfield Cnty, OH Hosp Impt Rev
Lancaster Fairfield Hosp Rfdg (MBIA Insd) ....... 5.500 06/15/21 1,399,680
3,345 Franklin Cnty, OH Hosp Rev &
Impt Doctors Hosp Proj Rfdg ..................... 5.875 12/01/23 2,956,980
2,500 Ohio Muni Elec Generation Agy Jt
Venture 5 Ctfs (AMBAC Insd) .................... 5.375 02/15/24 2,270,950
1,000 Ohio St Higher Edl Fac Comm Rev
Higher Edl OH Wesleyan Univ (MBIA Insd) ........ 6.125 11/15/17 1,005,300
1,500 Ohio St Wtr Dev Auth Pollutn Ctl Fac
Rev PA Pwr Co Proj Rfdg (AMBAC Insd) ............ 6.150 08/01/23 1,502,235
4,500 Ohio St Wtr Dev Auth Rev Coll Wtr
Cincinnati Gas A Rfdg (MBIA Insd) .............. 5.450 01/01/24 4,122,675
1,200 Ohio Univ Genl Rcpts Athens Rfdg (FGIC Insd) ... 5.000 12/01/18 1,048,140
------------
16,461,452
------------
See Notes to Financial Statements

</TABLE>

Page: 10

<TABLE>
Portfolio of Investments (Continued)
<CAPTION>
April 30,1995 (Unaudited)
- --------------------------------------------------------------------------------------------------
Par
Amount
(000) Description Coupon Maturity Market Value
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Oklahoma 2.6%
$ 4,000 Enid, OK Muni Auth Sales Tax & Util
Rev Rfdg (FGIC Insd) ................................ 6.200% 02/01/12 $ 4,067,040
10,000 Tulsa, OK Muni Arpt Tran Rev American Airls Inc ...... 7.375 12/01/20 10,170,000
------------
14,237,040
------------
Pennsylvania 7.2%
3,000 Butler Cnty, PA Hosp Auth Hosp Rev Butler
Mem Hosp Ser A (FSA Insd) ............................ 5.250 07/01/16 2,708,700
3,730 Delaware Cnty, PA Auth Hlthcare Rev Mercy Hlth
Corp of Southeastn PA Ser A Rfdg (Connie Lee Insd) ... 5.375 11/15/23 3,279,864
1,700 Harrisburg, PA Auth Res Recovery Fac Rev Ser A ....... 5.875 09/01/21 1,576,733
1,000 Pennsylvania Hsg Fin Agy Single Family Mtg Ser 43 ... 7.500 10/01/25 1,076,340
8,000 Pennsylvania St 2nd Ser Rfdg & Projs ................. 4.750 06/15/97 8,017,200
3,000 Pennsylvania St Higher Edl Fac Auth
Rev Med College PA Ser A ............................ 7.250 03/01/11 3,171,960
9,450 Philadelphia, PA Gas Wks Rev 14th Ser (FSA Insd) .... 6.250 07/01/08 9,735,768
2,525 Philadelphia, PA Gas Wks Rev 14th
Ser Rfdg (FSA Insd) ................................. 6.375 07/01/26 2,557,699
1,250 Philadelphia, PA Gas Wks Rev 15th
Ser Subser 3 (FSA Insd) ............................. 5.250 08/01/24 1,099,562
800 Philadelphia, PA Hosps & Higher Ed Fac Auth
Rev Cmnty College Ser A (MBIA Insd) .................. 6.100 05/01/09 812,808
1,370 Philadelphia, PA Hosps & Higher Ed Fac Auth
Rev Cmnty College Ser B Rfdg (MBIA Insd) ............. 6.500 05/01/08 1,468,407
4,275 Ridley Park, PA Hosp Auth Rev Taylor Hosp Ser A ...... 6.000 12/01/05 3,971,646
------------
39,476,687
------------
Rhode Island 0.7%
3,000 Rhode Island Depositors Econ Protection
Corp Spl Oblig Ser B Rfdg (MBIA Insd) ................ 6.000 08/01/17 2,913,630
1,050 Rhode Island St Hlth & Edl Bldg Corp Rev
Higher Ed Fac Roger Williams (Connie Lee Insd) ....... 7.200 11/15/14 1,143,639
------------
4,057,269
------------
Tennessee 1.2%
1,250 Maury Cnty, TN Indl Dev Brd Pollutn Ctl
Rev Multi Modal Saturn Corp Proj Rfdg ................ 6.500 09/01/24 1,221,063
2,250 Tennessee Hsg Dev Agy Homeownership Proj T ........... 7.375 07/01/23 2,346,975
3,000 Tennessee Hsg Dev Agy Mtg Fin Ser A ................. 7.125 07/01/26 3,111,570
------------
6,679,608
------------
See Notes to Financial Statements

</TABLE>

Page: 11

<TABLE>
Portfolio of Investments (Continued)
<CAPTION>
April 30,1995 (Unaudited)
- -----------------------------------------------------------------------------------------------------
Par
Amount
(000) Description Coupon Maturity Market Value
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Texas 9.1%
$ 9,065 Alliance Arpt Auth Inc TX Spl Fac Rev
American Airls Inc Proj ................................. 7.500% 12/01/29 $ 9,260,713
5,350 Austin, TX Util Sys Rev Ser B Rfdg (MBIA Insd) .......... 5.250 05/15/18 4,775,784
12,000 Harris Cnty, TX Flood Ctl Dist Cap Apprec Ser B Rfdg ... * 10/01/06 5,607,360
2,250 Harris Cnty, TX Hlth Fac Dev Corp Hosp Rev
Hermann Hosp Proj (MBIA Insd) ........................... 6.375 10/01/24 2,268,923
7,450 Harris Cnty, TX Toll Rd Sr Lien Rfdg (FGIC Insd) ....... 5.000 08/15/16 6,495,506
3,000 Harris Cnty, TX Toll Rd Sub Lien Rev Rfdg ............... 6.750 08/01/14 3,200,760
1,275 Matagorda Cnty, TX Navigation District No 1 Rev
Houston Lt & Pwr Ser A Rfdg (AMBAC Insd) ............... 6.700 03/01/27 1,335,410
70,000 Texas Muni Pwr Agy Rev Cap Apprec
Rfdg (MBIA Insd) ....................................... * 09/01/17 17,432,100
------------
50,376,556
------------
Utah 0.2%
4,950 Intermountain Pwr Agy UT Pwr Supply
Rev Ser A Rfdg (FGIC Insd) .............................. * 07/01/17 1,224,333
------------
Virginia 1.8%
1,100 Augusta Cnty, VA Indl Dev Auth Hosp Rev
Augusta Hosp Corp Rfdg (AMBAC Insd) .................... 5.125 09/01/21 948,629
2,250 Fredericksburg, VA Indl Dev Auth Hosp Fac Rev
(Inverse Fltg) (FGIC Insd) ............................. 6.600 08/15/23 2,295,000
3,000 Isle Wight Cnty, VA Indl Dev Auth Solid Waste
Disposal Fac Rev Union Camp Corp Proj ................... 6.550 04/01/24 3,018,390
2,000 Loudoun Cnty, VA Ctfs Partn (FSA Insd) ................. 6.900 03/01/19 2,148,340
1,500 Virginia St Hsg Dev Auth Multi-Family Ser E Rfdg ....... 5.900 11/01/17 1,414,575
------------
9,824,934
------------
Washington 0.8%
4,000 Washington St Pub Pwr Supply Sys Nuclear
Proj No 1 Rev Ser A Rfdg ............................... 7.000 07/01/08 4,310,960
------------
West Virginia 2.5%
5,920 Harrison Cnty, WV Cnty Cmnty Solid Waste Disp
Rev West PA Pwr Co Ser C (AMBAC Insd) ................... 6.750 08/01/24 6,136,554
4,000 Marshall Cnty, WV Pollutn Ctl Rev OH
Pwr Co Proj Ser C Rfdg (MBIA Insd) ...................... 6.850 06/01/22 4,229,560
3,000 West Virginia St Wtr Dev Auth Wtr Dev Rev
Ln Prog II Ser A (FSA Insd) ............................. 6.750 11/01/33 3,126,750
600 West Virginia St Wtr Dev Auth Wtr Dev Rev
Ln Prog II Ser B II (FSA Insd) ......................... 5.875 11/01/33 563,232
------------
14,056,096
------------
See Notes to Financial Statements

</TABLE>

Page: 12

*Zero coupon bond

<FN>
<F1> At April 30, 1995, cost for federal income tax purposes is $543,290,787;
the aggregate gross unrealized appreciation is $8,741,021 and the aggregate
gross unrealized depreciation is $12,441,298, resulting in net unrealized
depreciation including futures transactions of $3,700,277.
<F2> Assets segregated as collateral for open futures transactions.
</TABLE>

The following table summarizes the portfolio composition at April 30, 1995,
based upon quality ratings issued by Standard & Poor's. For securities not rated
by Standard & Poor's, the Moody's rating is used.

Portfolio Composition by Credit Quality

<TABLE>
<CAPTION>
<S> <C>
AAA ... 63.4%
AA .... 9.8
A ..... 11.6
BBB ... 6.8
BB .... 8.4
-------
100.0%
-------

</TABLE>

See Notes to Financial Statements

Page: 13

Statement of Assets and Liabilities

<TABLE>
April 30,1995 (Unaudited)
- -------------------------------------------------------------------------------------------------------------
<CAPTION>
Assets:
<S> <C>
Investments, at Market Value (Cost $543,290,787) (Note 1) .................................... $ 543,366,626
Short-Term Investments (Note 1) .............................................................. 580,000
Receivables:
Interest ..................................................................................... 10,207,147
Investments Sold ............................................................................. 9,860,200
Unamortized Organizational Expenses (Note 1) ................................................ 23,217
Other ........................................................................................ 23,736
---------------
Total Assets ................................................................................. 564,060,926
---------------
Liabilities:
Payables:
Investments Purchased ........................................................................ 10,379,378
Custodian Bank ............................................................................... 996,584
Income Distributions - Common and Preferred Shares .......................................... 448,554
Investment Advisory Fee (Note 2) ............................................................. 298,693
Administrative Fee (Note 2) ................................................................. 91,906
Accrued Expenses ............................................................................. 243,267
---------------
Total Liabilities ............................................................................ 12,458,382
---------------
Net Assets ................................................................................... $ 551,602,544
---------------
Net Assets Consist of:
Preferred Shares ($.01 par value, authorized 100,000,000 shares, 4,500 issued with liquidation
preference of $50,000 per share) (Note 5) .................................................... $ 225,000,000
---------------
Common Shares ($.01 par value with an unlimited number of shares authorized,
23,555,115 shares issued and outstanding) ................................................... 235,551
Paid in Surplus ............................................................................. 348,118,080
Accumulated Undistributed Net Investment Income ............................................. 3,175,782
Net Unrealized Depreciation on Investments .................................................. (3,700,277)
Accumulated Net Realized Loss on Investments ................................................. (21,226,592)
---------------
Net Assets Applicable to Common Shares ....................................................... 326,602,544
---------------
Net Assets ................................................................................... $ 551,602,544
---------------
Net Asset Value Per Common Share($326,602,544 divided
by 23,555,115 shares outstanding) ............................................................ $ 13.87
---------------
See Notes to Financial Statements

</TABLE>

Page: 14

Statement of Operations

<TABLE>
For the Six Months Ended April 30,1995 (Unaudited)
- --------------------------------------------------------------------------------
<CAPTION>
Investment Income:
<S> <C>
Interest ....................................................... $ 17,021,078
----------------
Expenses:
Investment Advisory Fee (Note 2) .............................. 1,731,502
Administrative Fee (Note 2) .................................... 532,770
Preferred Share Maintenance (Note 5) ........................... 320,764
Legal (Note 2) ................................................ 26,274
Trustees Fees and Expenses (Note 2) ............................ 10,063
Amortization of Organizational Expenses (Note 1) .............. 3,966
Other .......................................................... 189,357
----------------
Total Expenses ................................................. 2,814,696
----------------
Net Investment Income .......................................... $ 14,206,382
----------------
Realized and Unrealized Gain/Loss on Investments:
Realized Gain/Loss on Investments:
Proceeds from Sales ............................................ $ 156,441,216
Cost of Securities Sold ........................................ (167,646,835)
----------------
Net Realized Loss on Investments (Including realized loss on
futures transactions of $1,351,405) ............................ (11,205,619)
----------------
Unrealized Appreciation/Depreciation on Investments:
Beginning of the Period ....................................... (38,623,711)
End of the Period (Including unrealized depreciation on
futures transactions of $3,776,116) ............................ (3,700,277)
----------------
Net Unrealized Appreciation on Investments During the Period ... 34,923,434
----------------
Net Realized and Unrealized Gain on Investments ................ $ 23,717,815
----------------
Net Increase in Net Assets from Operations ..................... $ 37,924,197
----------------
See Notes to Financial Statements

</TABLE>

Page: 15

Statement of Changes in Net Assets

<TABLE>
For the Six Months Ended April 30,1995 and the Year Ended October 31,1994
(Unaudited)
- -----------------------------------------------------------------------------------------------------
<CAPTION>
Six Months Ended Year Ended
April 30,1995 October 31,1994
<S> <C> <C>
From Investment Activities:
Operations:
Net Investment Income ............................................. $ 14,206,382 $ 27,723,563
Net Realized Loss on Investments .................................. (11,205,619) (10,020,973)
Net Unrealized Appreciation/Depreciation on Investments
During the Period ................................................ 34,923,434 (68,634,397)
---------------- ---------------
Change in Net Assets from Operations ............................. 37,924,197 (50,931,807)
---------------- ---------------
Distributions from Net Investment Income:
Common Shares ..................................................... (10,741,082) (21,482,198)
Preferred Shares ................................................. (4,472,521) (5,610,595)
---------------- ---------------

(15,213,603) (27,092,793)
---------------- ---------------
Distributions from Net Realized Gain on Investments:
Common Shares ..................................................... -0- (4,159,934)
Preferred Shares ................................................. -0- (855,632)
---------------- ---------------

-0- (5,015,566)
---------------- ---------------
Total Distributions .............................................. (15,213,603) (32,108,359)
---------------- ---------------
Net Change in Net Assets from Investment Activities ............... 22,710,594 (83,040,166)
Net Assets:
Beginning of the Period .......................................... 528,891,950 611,932,116
---------------- ---------------
End of the Period (Including undistributed net investment income of
$3,175,782 and $4,183,003, respectively) ......................... $ 551,602,544 $ 528,891,950
---------------- ---------------
See Notes to Financial Statements

</TABLE>

Page: 16

Financial Highlights

The following schedule presents financial highlights for one common share of the
Trust outstanding throughout the periods indicated.(Unaudited)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
March 26,1993
Six Months Year (Commencement
Ended Ended of Investment
April 30, October 31, Operations) to
1995 1994 October 31,1993
<S> <C> <C> <C>
Net Asset Value, Beginning of Period <F1> ............... $ 12.901 $ 16.427 $ 14.789
---------- ------------ ---------------
Net Investment Income .................................. .603 1.177 .639
Net Realized and Unrealized Gain/Loss
on Investments .......................................... 1.007 (3.340) 1.487
---------- ------------ ---------------
Total from Investment Operations ........................ 1.610 (2.163) 2.126
---------- ------------ ---------------
Less:
Distributions from Net Investment Income:
Paid to Common Shareholders ............................. .456 .912 .380
Common Share Equivalent of Distributions Paid
to Preferred Shareholders ............................... .190 .238 .108
Distributions from Net Realized Gain on Investments:
Paid to Common Shareholders ............................. -0- .177 -0-
Common Share Equivalent of Distributions Paid
to Preferred Shareholders ............................... -0- .036 -0-
---------- ------------ ---------------
Total Distributions ..................................... .646 1.363 .488
---------- ------------ ---------------
Net Asset Value, End of Period .......................... $ 13.865 $ 12.901 $ 16.427
---------- ------------ ---------------
Market Price Per Share at End of Period ................. $ 12.500 $ 10.750 $ 15.250
Total Investment Return at Market Price
(Non-Annualized) <F2> ................................... 20.72% (23.52%) 4.25%
Total Return at Net Asset Value
(Non-Annualized) <F3> ................................... 11.24% (15.48%) 12.14%
Net Assets at End of Period (In millions) .............. $ 551.6 $ 528.9 $ 611.9
Ratio of Expenses to Average Net Assets Applicable to
Common Shares (Annualized) .............................. 1.80% 1.70% 1.46%
Ratio of Expenses to Average Net Assets (Annualized) ... 1.05% 1.03% 1.00%
Ratio of Net Investment Income to Average Net Assets
Applicable to Common Shares (Annualized) <F4> ........... 6.21% 6.39% 5.59%
Portfolio Turnover ...................................... 27.66% 79.05% 65.72%

<FN>

<F1> Net asset value at March 26, 1993 is adjusted for common and preferred
share offering costs of $.211 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 the common share equivalent of
distributions paid to preferred shareholders.
</TABLE>

See Notes to Financial Statements

Page: 17

Notes to Financial Statements

April 30,1995 (Unaudited)
- --------------------------------------------------------------------------------

1. Significant Accounting Policies

Van Kampen Merritt Value Municipal Income Trust (the "Trust") is registered as a
diversified closed-end management investment company under the Investment
Company Act of 1940, as amended. The Trust commenced investment operations on
March 26, 1993.

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. At April 30, 1995, there were no
when issued or delayed delivery purchase commitments.

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 $40,000.
These costs are being amortized on a straight line basis over the 60 month
period ending March 25, 1998. 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.

Page: 18

Notes to Financial Statements (Continued)

April 30,1995 (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 October 31, 1994, the Trust had an accumulated capital loss
carryforward for tax purposes of $10,020,973, which will expire on October 31,
2002.

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 .65% 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 April 30, 1995, the Trust recognized expenses of
approximately $14,900 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.

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

Page: 19

Notes to Financial Statements (Continued)

April 30,1995 (Unaudited)
- --------------------------------------------------------------------------------

VKAC. The Trust's liability under the deferred compensation and retirement plans
at April 30, 1995, was approximately $13,200.

At April 30, 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 April 30, 1995 were $145,989,219 and
$167,646,835, 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.

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

A.Futures Contracts-A futures contract is an agreement involving the delivery of
a particular asset on a specified future date at an agreed upon price. The Trust
generally invests in futures on U.S. Treasury Bonds 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 April 30, 1995,
were as follows:

<TABLE>
<CAPTION>
Contracts
---------
<S> <C>
Outstanding at October 31, 1994 ... 1,350
Futures Opened .................... 2,600
Futures Closed .................... (2,650)
---------
Outstanding at April 30, 1995 ..... 1,300
---------

</TABLE>

Page: 20

Notes to Financial Statements (Continued)

April 30,1995 (Unaudited)
- --------------------------------------------------------------------------------

The futures contracts outstanding as of April 30, 1995, and the description and
unrealized depreciation are as follows:

<TABLE>
<CAPTION>
Unrealized
Contracts Depreciation
--------- ------------
<S> <C> <C>
U.S. Treasury Bond Futures
June 1995 - Sells to Open ... 1,300 $3,776,116
--------- ------------
</TABLE>

B. 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.

5. Preferred Shares

The Trust has outstanding 4,500 Auction Preferred Shares ("APS") in five series.
Series A, B, C and D each contain 1,000 shares and Series E contains 500 shares.
Dividends are cumulative and the dividend rate is periodically reset through an
auction process. The dividend period for Series A and E is seven days, and for
Series B, C and D is 28 days. The average rate in ef fect on April 30, 1995 was
4.234%. During the six months ended April 30, 1995, the rates ranged from 3.240%
to 6.375%.

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.

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.

Page: 21

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
VKM Short-Term Global Income Fund
VKM Strategic Income 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 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 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.

Page: 22

Van Kampen Merritt Value Municipal Income 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

Nicholas Dalmaso*
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.

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Van Kampen Merritt Value Municipal Income Trust

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Van Kampen Merritt Value Municipal Income Trust

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