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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
INVESTMENT COMPANIES
Investment Company Act file number 811-06537
Invesco Van Kampen Trust for Investment Grade New York Municipals
(Exact name of registrant as specified in charter)
| 1555 Peachtree Street, N.E., Atlanta, Georgia 30309 |
| (Address of principal executive offices) (Zip code) |
Colin Meadows 1555 Peachtree Street, N.E., Atlanta, Georgia 30309
Registrant’s telephone number, including area code: (713) 626-1919
Date of fiscal year end: 2/28
Date of reporting period: 2/29/12
Item 1. Reports to Stockholders.
 |
Annual Report to Shareholders
|
February 29, 2012 | |
Invesco
Van Kampen Trust for Investment Grade New York Municipals
NYSE:VTN
2 |
Performance Summary | |
2 |
Management Discussion | |
4 |
Additional Information | |
5 |
Dividend Reinvestment Plan | |
6 |
Schedule of Investments | |
11 |
Financial Statements | |
14 |
Notes to Financial Statements | |
20 |
Financial Highlights | |
22 |
Auditor’s Report | |
23 |
Tax Information | |
24 |
Supplemental Information | |
T-1 |
Trustees and Officers | |
Management’s Discussion of Trust Performance
Performance summary
This is the annual report of Invesco Van Kampen Trust for
Investment Grade New York Municipals for the fiscal year ended February 29, 2012. The Trust’s return can be calculated based on
either the market price or the net asset value (NAV) of its shares. NAV per share is determined by dividing the value of the Trust’s portfolio
securities, cash and other assets, less all liabilities and preferred shares, by the total number of common shares outstanding. Market price reflects the supply and demand for Trust shares. As a result, the two returns can differ, as they did during the reporting period. A main contributor to the Trust’s return on an NAV basis was its exposure to education bonds.
Performance
Total returns, 2/28/11 to 2/29/12
Trust at NAV |
24.64 | % | ||
Trust at Market Value |
28.25 | |||
Barclays New York Municipal Index▼ |
11.33 | |||
Market Price
Premium to NAV as of 2/29/12 |
3.21 | |||
| Source: | ▼Barclays via FactSet Research Systems Inc. |
The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher.
Investment return, net asset value and common share market price will fluctuate so that you may have a gain or loss when you sell shares. Please visit invesco.com/us for the most recent month-end
performance. Performance figures reflect Trust expenses, the reinvestment of distributions (if any) and changes
in net asset value (NAV) for performance based on NAV and changes in market price for performance based on market price.
Since the Trust is a closed-end management investment company, shares of the Trust may trade at a discount or premium from the NAV. This characteristic is separate and distinct from the risk that NAV could decrease as a result of investment activities and may be a greater risk to investors expecting to sell their shares after a short time.
The Trust cannot predict whether shares will trade at, above or below NAV. The Trust should not be viewed as a vehicle for
trading purposes. It is designed primarily for risk-tolerant long-term investors.
How we invest
We seek to provide investors with a high level of current income exempt from federal income tax, as well as New York state and New York City
income taxes, primarily through investment in a diversified portfolio of investment grade municipal securities.
We seek to achieve the Trust’s investment
objective by investing primarily in municipal securities that are rated investment grade by at least
one nationally recognized statistical rating organization and that are exempt from federal and/or New York income tax.
Municipal obligations include municipal bonds, municipal notes, municipal commercial paper and lease
obligations. The Trust also may
invest in non-investment grade and unrated securities that we
determine to be of comparable or higher quality. From time to time, we may invest in New
York municipal securities that pay interest that is subject to the federal alternative minimum tax.
We employ a bottom-up, research-driven approach to identify securities that have
attractive risk/reward characteristics for the sectors in which we invest. We also integrate macroeconomic analysis and forecasting into our evaluation and
ranking of various sectors and individual securities. Finally, we employ leverage in an effort to enhance the Trust’s income and total return.
| Sell decisions are based on: | ||
| n | A deterioration or likely deterioration of an individual issuer’s capacity to meet its debt obligations on a timely basis. | |
| n | A deterioration or likely deterioration of the broader fundamentals of a particular industry or sector. | |
| n | Opportunities in the secondary or primary market to exchange into a security with better relative value. |
Market conditions and your Trust
For the fiscal year ended February 29, 2012, the municipal market performed
strongly. The Barclays Municipal Bond Index returned 12.42%, outperforming other fixed income indexes such as the Barclays
U.S. Aggregate Index, which returned 8.37%; the Barclays U.S. Corporate High Yield Index, which returned 6.94%; the Barclays U.S.
Corporate Investment Grade Index, which returned 10.37%; and the Barclays U.S. Mortgage Backed Securities Index, which returned 6.44%.1
During 2011, credit fundamentals remained strong, and default rates continued their downward trend. In line with the drop exhibited from 2009 to 2010, the number of defaults in 2011 was muted and lower than 2010. Despite a few high profile bankruptcies such as Harrisburg, Pennsylvania, Jefferson County, Alabama and Central Falls, Rhode
Island, defaults came nowhere near the “hundreds of billions of
dollars” predicted by well-known analyst Meredith Whitney
at the end of 2010.2
In terms of municipal fund flows, Whitney's prediction raised concerns regarding the credit stability of municipalities and the heightened risk of unprecedented defaults in 2011. Retail investors, who already had been making withdrawals from municipal bond mutual funds, heeded Ms. Whitney's
warning and began to sell shares at a record pace.3 Money was withdrawn from municipal mutual funds for 29 straight weeks3,
but by the end of the third quarter of 2011, the tide
Portfolio Composition
By credit sector, based on total investments
Revenue Bonds |
85.0 | % | ||
General Obligation Bonds |
8.1 | |||
Pre-refunded Bonds |
2.4 | |||
Other |
4.5 | |||
Top Five Fixed Income Holdings
1. New York
(City of) Transitional Finance Authority |
5.8 | % | ||
2. New York (City of) Trust for Cultural Resources
(Lincoln Center) |
5.8 | |||
3. New York (City of) Municipal Water Finance Authority |
5.6 | |||
4. New York (City of) |
4.8 | |||
5. New York & New Jersey (States of) Port Authority |
4.8 | |||
| Total Net Assets | ||||||||
| Applicable to Common Shares | $237.8 million | |||||||
| Total Number of Holdings | 145 | |||||||
| The Trust’s holdings are subject to change, and there is no assurance that the Trust will continue to hold any particular security. | ||||||||
| 2 | Invesco Van Kampen Trust for Investment Grade New York Municipals |
had changed. This increase in demand in the
third quarter had a positive effect on municipal market performance during the reporting period.
New York continues to benefit
from a broad-based, wealthy economy with strong demographics and a highly-educated workforce. Challenges remain, however,
including the cyclical nature of the economy; the state’s dependence on the New York City-based financial services
industry; the state’s above-average dependence on income taxes; and high recurring expenditures due to the state’s generous
social service programs. The state’s pension system is well funded compared to other states.
The Trust’s exposure to the
15-year to 20-year part of the yield curve and the long end (20+ years) of the yield curve added to Trust returns as
municipal yields approached all-time lows3 during the reporting period. Some of our yield curve and duration positioning
was obtained through the use of inverse floating rate securities. Inverse floating rate securities are instruments
which have an inverse relationship to a referenced interest rate. Inverse floating rate securities can be a more
efficient means of managing duration, yield curve exposure and credit exposure. Also, they potentially can enhance yield.
Strong security selection among
highly rated bonds also added to the Trust’s performance for the reporting period.
At the sector level, our exposure to education, hospital,
industrial revenue, pollution control and leasing bonds contributed to returns for the reporting period.
Our allocation to transportation bonds detracted from returns.
One important factor impacting the
return of the Trust relative to its comparative index was the Trust’s use of structural leverage. The Trust uses leverage
because we believe that, over time, leveraging provides opportunities for additional income and total return for common
shareholders. However, use of leverage also can expose common shareholders to additional volatility. For example, if the
prices of securities held by a trust decline, the negative impact of these valuation changes on common share net asset value
and common shareholder total return is magnified by the use of leverage. Conversely, leverage may enhance common share
returns during periods when the prices of securities held by a trust generally are rising. Leverage made a positive
contribution to the performance of the Trust during the reporting period.
During the reporting period, the Trust achieved a
leveraged position through the use of tender option bonds and auction rate preferred shares.
As of the close of the reporting period, leverage accounted for 38% of the Trust’s total assets.
For more information about the Trust’s use of leverage, see the Notes to Financial Statements later in this report.
As stated earlier, the Trust
trades at a market price and also has an NAV. The market price of the Trust fluctuated between trading at a discount
and trading at a premium during the reporting period.
Thank you for investing in Invesco Van
Kampen Trust for Investment Grade New York Municipals and for sharing our long-term investment horizon.
1 Source: Lipper Inc.
2 Source: CBS News
3 Source: The Bond Buyer
2 Source: CBS News
3 Source: The Bond Buyer
The views and opinions expressed in management’s discussion of
Trust performance are those of Invesco Advisers, Inc. These views and opinions are subject to change at any time based on
factors such as market and economic conditions. These views and opinions may not be relied upon as investment advice or
recommendations, or as an offer for a particular security. The information is not a complete analysis of every aspect of
any market, country, industry, security or the Trust. Statements of fact are from sources considered reliable, but Invesco
Advisers, Inc. makes no representation or warranty as to their completeness or accuracy. Although historical performance is
no guarantee of future results, these insights may help you understand our investment management philosophy.
See important Trust and, if applicable, index disclosures later in this report.
Thomas Byron
Portfolio manager, is manager of Invesco Van Kampen Trust for Investment Grade
New York Municipals. He joined Invesco in 2010. Mr. Byron was associated with the Trust’s previous investment adviser or
its investment advisory affiliates in an investment capacity from 1981 to 2010 and began managing the Trust in 2011. He
earned a B.S. in finance from Marquette University and an M.B.A. in finance from DePaul University.
Robert Stryker
Chartered Financial Analyst, portfolio manager, is manager of
Invesco Van Kampen Trust for Investment Grade New York Municipals. He joined Invesco in 2010. Mr. Stryker was
associated with the Trust’s previous investment adviser or its investment advisory affiliates in an investment
capacity from 1994 to 2010 and began managing the Trust in 2007. He earned a B.S. in finance from the University of
Illinois, Chicago.
Julius Williams
Portfolio manager, is manager of Invesco Van Kampen Trust for Investment
Grade New York Municipals. He joined Invesco in 2010. Mr. Williams was associated with the Trust’s previous investment
adviser or its investment advisory affiliates in an investment capacity from 2000 to 2010 and began managing the
Trust in 2009. He earned a B.A. in economics and sociology, and a Master of Education degree in educational psychology
from the University of Virginia.
Robert Wimmel
Portfolio manager, is manager of Invesco Van Kampen Trust for Investment
Grade New York Municipals. He joined Invesco in 2010. Mr. Wimmel was associated with the Trust’s previous investment
adviser or its investment advisory affiliates in an investment capacity from 1996 to 2010 and began managing the
Trust in 2011. He earned a B.A. in anthropology from the University of Cincinnati and an M.A. in economics from the
University of Illinois, Chicago.
Effective March 1, 2012, after the close of the reporting period, Stephen Turman left the management team.
| 3 | Invesco Van Kampen Trust for Investment Grade New York Municipals |
Additional Information
| n | Unless otherwise stated, information presented in this report is as of February 29, 2012, and is based on total net assets applicable to common shares. | |
| n | Unless otherwise noted, all data provided by Invesco. | |
| n | To access your Trust’s reports, visit invesco.com/fundreports. |
About indexes used in this report
| n | The Barclays New York Municipal Index is an index of New York investment grade municipal bonds. | |
| n | The Barclays Municipal Bond Index is an unmanaged index considered representative of the tax-exempt bond market. | |
| n | The Barclays U.S. Aggregate Index is an unmanaged index considered representative of the US investment-grade, fixed-rate bond market. | |
| n | The Barclays U.S. Corporate High Yield Index is an unmanaged index that covers the universe of fixed-rate, noninvestment-grade debt. | |
| n | The Barclays U.S. Corporate Investment Grade Index is an unmanaged index considered representative of fixed-rate, investment-grade taxable bond debt. | |
| n | The Barclays U.S. Mortgage Backed Securities Index is an unmanaged index comprising 15- and 30-year fixed-rate securities backed by mortgage pools of Ginnie Mae, Freddie Mac and Fannie Mae. | |
| n | The Trust is not managed to track the performance of any particular index, including the index(es) defined here, and consequently, the performance of the Trust may deviate significantly from the performance of the index(es). | |
| n | A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects trust expenses; performance of a market index does not. |
Other information
| n | The Chartered Financial Analyst ® (CFA ® ) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis. | |
| n | The returns shown in management’s discussion of Trust performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Trust at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights. |
NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE
| NYSE Symbol | VTN |
| 4 | Invesco Van Kampen Trust for Investment Grade New York Municipals |
Dividend Reinvestment Plan
| The dividend reinvestment plan (the Plan) offers you a prompt and simple way to reinvest your dividends and capital gains distributions (Distributions) into additional shares of your Trust. Under the Plan, the money you earn from Distributions will be reinvested automatically in more shares of your Trust, allowing you to potentially increase your investment over time. |
Plan benefits
| n | Add to your account: You may increase the amount of shares in your Trust easily and automatically with the Plan. |
|
| n | Low transaction costs: Shareholders who participate in the Plan are able to buy shares at below-market prices when the Trust is trading at a premium to its net asset value (NAV). In addition, transaction costs are low because when new shares are issued by a Trust, there is no fee, and when shares are bought in blocks on the open market, the per share fee is shared among all Participants. |
|
| n | Convenience: You will receive a detailed account statement from Computershare Trust Company, N.A. (the Agent) which administers the Plan. The statement shows your total Distributions, date of investment, shares acquired, and price per share, as well as the total number of shares in your reinvestment account. You can also access your account via the Internet. To do this, please go to invesco.com/us. |
|
| n | Safekeeping: The Agent will hold the shares it has acquired for you in safekeeping. |
How to participate in the Plan
If you own shares in your own name, you can participate directly in the Plan.
If your shares are held in “street name” – in the name
of your brokerage firm, bank, or other financial institution –
you must instruct that entity to participate on your behalf. If they are unable to participate on your behalf, you may
request that they reregister your shares in your own name so that you may enroll in the Plan.
How to enroll
To enroll in the Plan, please read the Terms and Conditions in the Plan Brochure.
You can enroll in the Plan by visiting invesco.com/us, calling toll-free 800 341 2929 or notifying us in writing at Invesco
Closed-End Funds, Computershare Trust Company, N.A., P.O. Box 43078, Providence, RI 02940-3078. Please include your Trust
name and account number and ensure that all shareholders listed on the account sign these written instructions.
Your participation in the Plan will begin with the next Distribution payable after the Agent receives your authorization,
as long as they receive it before the “record date,” which is generally 10 business days before such Distributions are paid.
If your authorization arrives after such record date, your participation in the Plan will begin with the following Distributions.
How the Plan works
If you choose to participate in the Plan, your Distributions will be promptly reinvested for you, automatically increasing your reinvestment shares. If the Trust is trading at a share price that is equal to its NAV,
you’ll pay that amount for your reinvested shares. However, if the Trust is trading above or below NAV, the price is determined by one of two ways:
| 1. | Premium: If the Trust is trading at a premium – a market price that is higher than its NAV – you'll pay either the NAV or 95 percent of the market price, whichever is greater. When the Trust trades at a premium, you'll pay less for your reinvested shares than an investor purchasing shares on the stock exchange. Keep in mind, a portion of your price reduction may be taxable because you are receiving shares at less than market price. | |
| 2. | Discount: If the Trust is trading at a discount – a market price that is lower than NAV – you’ll pay the market price for your reinvested shares. |
Costs of the Plan
There is no direct charge to you for reinvesting Distributions because the Plan’s
fees are paid by your Trust. If your Trust is trading at or above its NAV, your new shares are issued directly by the Trust and there are no brokerage charges or fees. However, if your Trust is trading at a discount, the shares are purchased on the open market, and you will pay your portion of per share fees. These per share fees are typically less than the standard brokerage charges for individual transactions because shares are purchased for all Participants in blocks, resulting in lower fees for each individual Participant. Any service or per share fees are added to the purchase price. Per share fees include any applicable brokerage commissions the Agent is required to pay.
Tax implications
The automatic reinvestment
of Distributions does not relieve you of any income tax that may be
due on Distributions. You will receive tax information annually to
help you prepare your federal income tax return.
Invesco does not offer tax advice. The tax information contained herein is
general and is not exhaustive by nature. It was not intended or written to be used, and it cannot be used, by any taxpayer
for avoiding penalties that may be imposed on the taxpayer under U.S. federal tax laws. Federal and state tax laws are
complex and constantly changing. Shareholders should always consult a legal or tax adviser for information concerning
their individual situation.
How to withdraw from the Plan
You may withdraw from the Plan at any time by calling 800 341 2929, visiting
invesco.com/us or by writing to Invesco Closed-End Funds, Computershare Trust Company, N.A., P.O. Box 43078, Providence,
RI 02940-3078. Simply indicate that you would like to withdraw from the Plan, and be sure to include your Trust name and
account number. Also, ensure that all shareholders listed on the account have signed these written instructions. If you
withdraw, you have three options with regard to the shares held in
the Plan:
| 1. | If you opt to continue to hold your non-certificated whole shares (Investment Plan Book Shares), they will be held by the Agent electronically as Direct Registration Book-Shares (Book-Entry Shares) and fractional shares will be sold at the then-current market price. Proceeds will be sent via check to your address of record after deducting applicable fees. | |
| 2. | If you opt to sell your shares through the Agent, we will sell all full and fractional shares and send the proceeds via check to your address of record after deducting a $2.50 service fee and applicable per share fees. Per share fees include any applicable brokerage commissions the Agent is required to pay. | |
| 3. | You may sell your shares through your financial adviser through the Direct Registration System (DRS). DRS is a service within the securities industry that allows Trust shares to be held in your name in electronic format. You retain full ownership of your shares, without having to hold a share certificate. You should contact your financial adviser to learn more about any restrictions or fees that may apply. |
To obtain a complete
copy of the Dividend Reinvestment Plan, please call our Client
Services department at 800 341 2929 or visit invesco.com/us.
| 5 | Invesco Van Kampen Trust for Investment Grade New York Municipals |
Schedule
of Investments
February 29,
2012
|
Principal |
||||||||||||||||
|
Interest |
Maturity |
Amount |
||||||||||||||
| Rate | Date | (000) | Value | |||||||||||||
|
Municipal Obligations–161.84% |
||||||||||||||||
|
New York–148.94% |
||||||||||||||||
|
Albany (City of) Industrial Development Agency (St. Peter’s
Hospital); Series 2008 D, Civic Facility RB
|
5.75 | % | 11/15/27 | $ | 1,000 | $ | 1,103,790 | |||||||||
|
Albany Capital Resource Corp. (St. Peter’s Hospital);
Series 2011, RB
|
6.25 | % | 11/15/38 | 1,860 | 2,054,891 | |||||||||||
|
Battery Park City Authority; Series 2009 B, Sr. RB
|
5.00 | % | 11/01/34 | 3,200 | 3,796,992 | |||||||||||
|
Brooklyn Arena Local Development Corp. (Barclays Center);
|
||||||||||||||||
|
Series 2009, PILOT
CAB RB(a)
|
0.00 | % | 07/15/34 | 6,700 | 1,917,339 | |||||||||||
|
Series 2009, PILOT RB
|
6.25 | % | 07/15/40 | 825 | 891,413 | |||||||||||
|
Series 2009, PILOT RB
|
6.38 | % | 07/15/43 | 825 | 893,599 | |||||||||||
|
Chautauqua (County of) Industrial Development Agency (NRG
Energy, Inc.–Dunkirk Power LLC); Series 2009, Exempt
Facility RB
|
5.88 | % | 04/01/42 | 2,340 | 2,520,016 | |||||||||||
|
Dutchess (County of) Industrial Development Agency (Elant at
Fishkill, Inc.); Series 2007 A, Civic Facility RB
|
5.25 | % | 01/01/37 | 920 | 743,489 | |||||||||||
|
East Rochester (Village of) Housing Authority (Woodland Village,
Inc.); Series 2006, Ref. Senior Living RB
|
5.50 | % | 08/01/33 | 2,400 | 2,170,584 | |||||||||||
|
Erie (County of) Industrial Development Agency (City of Buffalo
School District);
|
||||||||||||||||
|
Series 2011 A, School
Facility RB(b)
|
5.25 | % | 05/01/28 | 2,500 | 2,886,200 | |||||||||||
|
Series 2011 A, School
Facility RB(b)
|
5.25 | % | 05/01/30 | 2,305 | 2,651,234 | |||||||||||
|
Essex (County of) Industrial Development Agency (International
Paper); Series 2005 A, Ref. Solid Waste
Disposal RB(c)
|
5.20 | % | 12/01/23 | 2,150 | 2,189,280 | |||||||||||
|
Hempstead (Town of) Industrial Development Agency (Adelphi
University); Series 2002, Civic
Facility RB(d)(e)
|
5.50 | % | 06/01/12 | 2,000 | 2,027,280 | |||||||||||
|
Hempstead Town Local Development Corp. (Molloy College);
Series 2009, RB
|
5.75 | % | 07/01/39 | 2,655 | 2,899,287 | |||||||||||
|
Hudson Yards Infrastructure Corp.; Series 2011 A, RB
|
5.75 | % | 02/15/47 | 1,695 | 1,918,554 | |||||||||||
|
Long Island Power Authority;
|
||||||||||||||||
|
Series 2006 E, Electric System General RB
|
5.00 | % | 12/01/17 | 1,975 | 2,303,146 | |||||||||||
|
Series 2009 A, Electric System General RB
|
6.25 | % | 04/01/33 | 1,860 | 2,234,176 | |||||||||||
|
Madison (County of) Industrial Development Agency (Morrisville
State College Foundation); Series 2005 A, Civic
Facility RB
(INS–CIFG)(f)
|
5.00 | % | 06/01/28 | 1,000 | 1,016,390 | |||||||||||
|
Madison (County of) Industrial Development Agency (Oneida Health
Systems, Inc.); Series 2007, Civic Facility RB
|
5.50 | % | 02/01/32 | 750 | 758,490 | |||||||||||
|
Metropolitan Transportation Authority;
|
||||||||||||||||
|
Series 2005 B, RB
(INS–BHAC)(b)(f)
|
5.00 | % | 11/15/31 | 10,000 | 11,176,000 | |||||||||||
|
Series 2009 B, Dedicated Tax Fund RB
|
5.25 | % | 11/15/27 | 1,535 | 1,776,609 | |||||||||||
|
Subseries 2011 B-2, Dedicated Tax Fund RB
|
5.00 | % | 11/15/32 | 1,000 | 1,139,770 | |||||||||||
|
Monroe County Industrial Development Corp. (Nazareth College of
Rochester); Series 2011, RB
|
5.50 | % | 10/01/41 | 700 | 758,821 | |||||||||||
|
Monroe County Industrial Development Corp. (University of
Rochester); Series 2011 A, RB
|
5.00 | % | 07/01/36 | 1,605 | 1,759,770 | |||||||||||
|
Nassau (County of) Industrial Development Agency (Amsterdam at
Harborside); Series 2007 A, Continuing Care Retirement
Community RB
|
6.70 | % | 01/01/43 | 5,000 | 3,922,100 | |||||||||||
|
New York & New Jersey (States of) Port Authority (JFK
International Air Terminal LLC);
|
||||||||||||||||
|
Series 1997, Special Obligation RB
(INS–NATL)(e)(f)
|
5.75 | % | 12/01/22 | 2,000 | 2,000,180 | |||||||||||
|
Series 1997 6, Special Obligation RB
(INS–NATL)(e)(f)
|
5.75 | % | 12/01/25 | 2,500 | 2,499,975 | |||||||||||
|
Series 2010, Special Obligation RB
|
6.00 | % | 12/01/42 | 1,540 | 1,723,014 | |||||||||||
|
New York & New Jersey (States of) Port Authority;
|
||||||||||||||||
|
One Hundred Fifty-Second Series 2008,
Consolidated RB(b)(c)
|
5.00 | % | 11/01/25 | 10,000 | 11,038,800 | |||||||||||
|
One Hundred Forty-Fourth Series 2006,
Consolidated RB(b)
|
5.00 | % | 10/01/35 | 10,000 | 11,331,000 | |||||||||||
|
New York (City of) Industrial Development Agency (7 World Trade
Center, LLC); Series 2005 B, Liberty RB
|
6.75 | % | 03/01/15 | 2,000 | 2,005,280 | |||||||||||
|
New York (City of) Industrial Development Agency
(IAC/InterActiveCorp); Series 2005, Liberty RB
|
5.00 | % | 09/01/35 | 3,440 | 3,443,818 | |||||||||||
|
New York (City of) Industrial Development Agency (New York Stock
Exchange); Series 2009 A, Ref. Special Facility RB
|
5.00 | % | 05/01/21 | 2,445 | 2,861,848 | |||||||||||
|
New York (City of) Industrial Development Agency (Polytechnic
University); Series 2007, Ref. Civic Facility RB
(INS–ACA)(f)
|
5.25 | % | 11/01/37 | 3,500 | 3,563,245 | |||||||||||
See accompanying Notes to Financial Statements which are an
integral part of the financial statements.
6 Invesco
Van Kampen Trust for Investment Grade New York
Municipals
|
Principal |
||||||||||||||||
|
Interest |
Maturity |
Amount |
||||||||||||||
| Rate | Date | (000) | Value | |||||||||||||
|
New York–(continued) |
||||||||||||||||
|
New York (City of) Industrial Development Agency (Queens
Baseball Stadium); Series 2006, PILOT RB
(INS–AMBAC)(f)
|
5.00 | % | 01/01/36 | $ | 2,000 | $ | 1,870,420 | |||||||||
|
New York (City of) Industrial Development Agency (Staten Island
University Hospital); Series 2001 B, Civic
Facility RB(d)(e)
|
6.38 | % | 07/01/12 | 1,670 | 1,704,886 | |||||||||||
|
New York (City of) Industrial Development Agency (Terminal One
Group Association, L.P.);
|
||||||||||||||||
|
Series 2005, Special
Facility RB(c)(d)(g)
|
5.50 | % | 01/01/19 | 3,710 | 4,041,674 | |||||||||||
|
Series 2005, Special
Facility RB(c)(d)(g)
|
5.50 | % | 01/01/20 | 3,000 | 3,244,440 | |||||||||||
|
Series 2005, Special
Facility RB(c)(d)(g)
|
5.50 | % | 01/01/21 | 4,000 | 4,310,920 | |||||||||||
|
New York (City of) Industrial Development Agency (YMCA of
Greater New York); Series 1997, Civic Facility RB
|
5.80 | % | 08/01/16 | 920 | 922,972 | |||||||||||
|
New York (City of) Municipal Water Finance Authority;
|
||||||||||||||||
|
Series 2005 C, Water & Sewer
System RB(b)
|
5.00 | % | 06/15/31 | 10,000 | 11,047,600 | |||||||||||
|
Series 2005 D, Water & Sewer
System RB(b)
|
5.00 | % | 06/15/37 | 12,000 | 13,218,120 | |||||||||||
|
Series 2007, VRD Second General Water & Sewer
System RB(h)
|
0.08 | % | 06/15/33 | 3,650 | 3,650,000 | |||||||||||
|
Series 2009 FF-2, Water & Sewer System RB
|
5.50 | % | 06/15/40 | 1,500 | 1,732,815 | |||||||||||
|
New York (City of) Transitional Finance Authority;
|
||||||||||||||||
|
Series 2008
S-1,
Building Aid RB
|
5.50 | % | 07/15/38 | 2,950 | 3,303,292 | |||||||||||
|
Series 2008
S-2,
Building Aid RB
|
6.00 | % | 07/15/33 | 1,350 | 1,588,167 | |||||||||||
|
Series 2009
S-3,
Building
Aid RB(b)
|
5.25 | % | 01/15/27 | 4,500 | 5,208,120 | |||||||||||
|
Series 2009
S-3,
Building
Aid RB(b)
|
5.25 | % | 01/15/39 | 2,000 | 2,200,020 | |||||||||||
|
Subseries 2011 D-1, Future Tax
Sec. RB(b)
|
5.00 | % | 11/01/33 | 12,000 | 13,821,840 | |||||||||||
|
Subseries 2011 E, Future Tax Sec. RB
|
5.00 | % | 11/01/24 | 1,135 | 1,373,815 | |||||||||||
|
New York (City of) Trust for Cultural Resources (American Museum
of Natural History); Series 2004 A, Ref. RB
(INS–NATL)(b)(f)
|
5.00 | % | 07/01/44 | 10,890 | 11,219,858 | |||||||||||
|
New York (City of) Trust for Cultural Resources (Carnegie Hall);
Series 2009 A, RB
|
5.00 | % | 12/01/39 | 1,500 | 1,608,900 | |||||||||||
|
New York (City of) Trust for Cultural Resources (Lincoln
Center); Series 2008
A-1, Ref.
VRD RB (LOC–Bank of
America N.A.)(h)
|
0.15 | % | 12/01/35 | 13,770 | 13,770,000 | |||||||||||
|
New York (City of) Trust for Cultural Resources (Museum of
Modern Art); Series 2008 1A, Ref. RB
|
5.00 | % | 04/01/31 | 1,550 | 1,725,724 | |||||||||||
|
New York (City of);
|
||||||||||||||||
|
Subseries 2008 F-1, Unlimited Tax GO Bonds
|
5.50 | % | 11/15/28 | 3,300 | 3,877,962 | |||||||||||
|
Subseries 2008 I-1, Unlimited Tax GO
Bonds(b)
|
5.00 | % | 02/01/26 | 10,000 | 11,340,400 | |||||||||||
|
Subseries 2008 L-1, Unlimited Tax GO
Bonds(b)
|
5.00 | % | 04/01/27 | 10,000 | 11,318,000 | |||||||||||
|
Subseries 2009 I-1, Unlimited Tax GO Bonds
|
5.25 | % | 04/01/32 | 4,000 | 4,627,440 | |||||||||||
|
New York (State of) Dormitory Authority (Brooklyn Law School);
Series 2003 B, RB
(INS–SGI)(f)
|
5.38 | % | 07/01/23 | 2,340 | 2,425,293 | |||||||||||
|
New York (State of) Dormitory Authority (Catholic Health
Services of Long Island–St. Francis Hospital);
Series 2004, RB
|
5.00 | % | 07/01/27 | 2,200 | 2,259,180 | |||||||||||
|
New York (State of) Dormitory Authority (City of New York);
Series 2005 A, Court Facilities Lease RB
(INS–AMBAC)(f)
|
5.50 | % | 05/15/30 | 1,750 | 2,230,637 | |||||||||||
|
New York (State of) Dormitory Authority (Convent of The Sacred
Heart); Series 2011, RB
(INS–AGM)(f)
|
5.75 | % | 11/01/40 | 1,255 | 1,458,260 | |||||||||||
|
New York (State of) Dormitory Authority (Cornell University);
Series 2010 A, RB
|
5.00 | % | 07/01/40 | 1,000 | 1,121,840 | |||||||||||
|
New York (State of) Dormitory Authority (Education);
Series 2008 B, State Personal Income Tax RB
|
5.75 | % | 03/15/36 | 2,150 | 2,522,143 | |||||||||||
|
New York (State of) Dormitory Authority (Fashion Institute of
Technology Student Housing Corp.); Series 2007, RB
(INS–NATL)(f)
|
5.25 | % | 07/01/28 | 1,655 | 1,880,990 | |||||||||||
|
New York (State of) Dormitory Authority (Fordham University);
|
||||||||||||||||
|
Series 2008 B, RB
(INS–AGC)(f)
|
5.00 | % | 07/01/33 | 915 | 992,647 | |||||||||||
|
Series 2011 A, RB
|
5.13 | % | 07/01/29 | 500 | 570,000 | |||||||||||
|
New York (State of) Dormitory Authority (General Purpose);
Series 2011 A, State Personal Income
Tax RB(b)
|
5.00 | % | 03/15/30 | 2,400 | 2,795,280 | |||||||||||
|
New York (State of) Dormitory Authority (Maimonides Medical
Center); Series 2004, Mortgage Hospital RB
(INS–NATL)(f)
|
5.00 | % | 08/01/33 | 1,950 | 2,098,629 | |||||||||||
|
New York (State of) Dormitory Authority (Manhattan College);
Series 2007 A, RB
(INS–Radian)(f)
|
5.00 | % | 07/01/41 | 2,315 | 2,331,020 | |||||||||||
|
New York (State of) Dormitory Authority (Memorial
Sloan-Kettering Cancer Center); Series 1998, RB
(INS–NATL)(f)
|
5.50 | % | 07/01/23 | 3,750 | 4,805,512 | |||||||||||
|
New York (State of) Dormitory Authority (Mount Sinai Hospital
Obligated Group); Series 2011 A, RB
|
5.00 | % | 07/01/31 | 1,695 | 1,810,243 | |||||||||||
See accompanying Notes to Financial Statements which are an
integral part of the financial statements.
7 Invesco
Van Kampen Trust for Investment Grade New York
Municipals
|
Principal |
||||||||||||||||
|
Interest |
Maturity |
Amount |
||||||||||||||
| Rate | Date | (000) | Value | |||||||||||||
|
New York–(continued) |
||||||||||||||||
|
New York (State of) Dormitory Authority (Mount Sinai School of
Medicine of New York University); Series 2009, RB
|
5.13 | % | 07/01/39 | $ | 1,750 | $ | 1,888,478 | |||||||||
|
New York (State of) Dormitory Authority (New York University);
|
||||||||||||||||
|
Series 2001 1, RB
(INS–AMBAC)(f)
|
5.50 | % | 07/01/31 | 2,000 | 2,607,660 | |||||||||||
|
Series 2001 1, RB
(INS–BHAC)(f)
|
5.50 | % | 07/01/31 | 830 | 1,085,540 | |||||||||||
|
New York (State of) Dormitory Authority (North Shore–Long
Island Jewish Obligated Group);
|
||||||||||||||||
|
Series 2009 A, RB
|
5.50 | % | 05/01/37 | 1,250 | 1,390,950 | |||||||||||
|
Subseries 2005 A, RB
|
5.00 | % | 11/01/26 | 2,125 | 2,285,671 | |||||||||||
|
New York (State of) Dormitory Authority (Orange Regional Medical
Center);
|
||||||||||||||||
|
Series 2008, RB
|
6.50 | % | 12/01/21 | 3,000 | 3,263,970 | |||||||||||
|
Series 2008, RB
|
6.13 | % | 12/01/29 | 1,000 | 1,035,740 | |||||||||||
|
New York (State of) Dormitory Authority (Pratt Institution);
Series 2009 C, Non State Supported Debt RB
(INS–AGC)(f)
|
5.13 | % | 07/01/39 | 600 | 645,888 | |||||||||||
|
New York (State of) Dormitory Authority (Rochester Institute of
Technology); Series 2010, RB
|
5.00 | % | 07/01/40 | 1,350 | 1,471,338 | |||||||||||
|
New York (State of) Dormitory Authority (Rockefeller
University); Series 2010 A, RB
|
5.00 | % | 07/01/41 | 1,500 | 1,682,760 | |||||||||||
|
New York (State of) Dormitory Authority (School Districts
Financing Program);
|
||||||||||||||||
|
Series 2008 D, RB
(INS–AGC)(f)
|
5.75 | % | 10/01/24 | 2,000 | 2,402,920 | |||||||||||
|
Series 2011 A, RB
|
5.00 | % | 10/01/25 | 950 | 1,108,147 | |||||||||||
|
New York (State of) Dormitory Authority (St. Joseph’s
College); Series 2010, RB
|
5.25 | % | 07/01/35 | 1,000 | 1,087,470 | |||||||||||
|
New York (State of) Dormitory Authority (State University
Educational Facilities);
|
||||||||||||||||
|
Series 1993 A, RB
(INS–NATL)(f)
|
5.25 | % | 05/15/15 | 3,600 | 3,974,904 | |||||||||||
|
Series 1993 B, RB
|
5.25 | % | 05/15/19 | 5,010 | 5,816,209 | |||||||||||
|
New York (State of) Dormitory Authority (The New School);
|
||||||||||||||||
|
Series 2010, RB
|
5.50 | % | 07/01/40 | 2,200 | 2,460,854 | |||||||||||
|
Series 2011, Ref. RB
|
5.00 | % | 07/01/31 | 1,400 | 1,551,284 | |||||||||||
|
New York (State of) Dormitory Authority (Vassar College);
Series 2007, RB
|
5.00 | % | 07/01/46 | 1,670 | 1,778,801 | |||||||||||
|
New York (State of) Dormitory Authority;
|
||||||||||||||||
|
Series 1993 A, Second General City University System
Consolidated RB
|
5.75 | % | 07/01/13 | 1,320 | 1,368,906 | |||||||||||
|
Series 1995 A, City University System Consolidated RB
|
5.63 | % | 07/01/16 | 3,000 | 3,392,730 | |||||||||||
|
Series 2007 A, Mental Health Services Facilities
Improvement RB
(INS–AGM)(f)
|
5.00 | % | 02/15/27 | 2,000 | 2,179,520 | |||||||||||
|
Series 2008 C, Mental Health Services Facilities
Improvement RB
(INS–AGM)(c)(f)
|
5.25 | % | 02/15/28 | 2,000 | 2,144,020 | |||||||||||
|
New York (State of) Mortgage Agency; Series 2007 145,
Homeowner
Mortgage RB(c)
|
5.05 | % | 10/01/29 | 1,555 | 1,593,098 | |||||||||||
|
New York (State of) Power Authority; Series 2011 A, RB
|
5.00 | % | 11/15/38 | 1,415 | 1,592,738 | |||||||||||
|
New York (State of) Thruway Authority; Series 2008 B,
Second General Highway & Bridge Trust Fund RB
|
5.00 | % | 04/01/27 | 1,000 | 1,147,380 | |||||||||||
|
New York (State of) Urban Development Corp. (Rensselaer
Polytechnic Institute–Center for Industrial Innovation);
Series 1995, Ref. RB
|
5.50 | % | 01/01/13 | 440 | 453,015 | |||||||||||
|
New York City Health & Hospital Corp.;
Series 2010 A, Health System RB
|
5.00 | % | 02/15/30 | 2,230 | 2,458,196 | |||||||||||
|
New York Liberty Development Corp. (4 World Trade Center);
Series 2011, Ref. Liberty RB
|
5.00 | % | 11/15/31 | 1,695 | 1,878,399 | |||||||||||
|
New York Liberty Development Corp. (Bank of America Tower at One
Bryant Park); Series 2010, Ref. Second Priority Liberty RB
|
6.38 | % | 07/15/49 | 2,230 | 2,425,972 | |||||||||||
|
New York State Environmental Facilities Corp. (2010 Master
Financing Program); Series 2010 C, RB
|
5.00 | % | 10/15/39 | 1,505 | 1,671,874 | |||||||||||
|
New York State Environmental Facilities Corp. (Municipal Water
Finance Authority); Series 2011 B, State Clean
Water & Drinking Water Revolving Funds RB
|
5.00 | % | 06/15/31 | 1,270 | 1,476,312 | |||||||||||
|
New York State Environmental Facilities Corp. (New York City
Municipal Water Finance Authority);
|
||||||||||||||||
|
Series 1994 A, State Water
PCR(e)
|
5.75 | % | 06/15/12 | 300 | 304,977 | |||||||||||
|
Series 1994 A, State Water
PCR(e)
|
5.75 | % | 06/15/12 | 500 | 508,295 | |||||||||||
|
Series 1994 A, State Water PCR
|
5.75 | % | 06/15/12 | 95 | 96,575 | |||||||||||
|
New York State Urban Development Corp.;
|
||||||||||||||||
|
Series 1993 A, Ref. Correctional Facilities RB
|
5.50 | % | 01/01/14 | 1,895 | 1,995,359 | |||||||||||
|
Series 2008 B, Ref. Service Contract RB
|
5.25 | % | 01/01/25 | 2,000 | 2,278,360 | |||||||||||
See accompanying Notes to Financial Statements which are an
integral part of the financial statements.
8 Invesco
Van Kampen Trust for Investment Grade New York
Municipals
|
Principal |
||||||||||||||||
|
Interest |
Maturity |
Amount |
||||||||||||||
| Rate | Date | (000) | Value | |||||||||||||
|
New York–(continued) |
||||||||||||||||
|
Niagara Frontier Transportation Authority (Buffalo Niagara
International Airport); Series 1999 A, Airport RB
(INS–NATL)(c)(f)
|
5.63 | % | 04/01/29 | $ | 3,570 | $ | 3,623,550 | |||||||||
|
Oneida (County of) Industrial Development Agency (St. Elizabeth
Medical Center Facility); Series 1999 B, Civic
Facility RB
|
6.00 | % | 12/01/19 | 1,180 | 1,180,779 | |||||||||||
|
Onondaga Civic Development Corp. (Le Moyne College);
Series 2010, RB
|
5.38 | % | 07/01/40 | 1,950 | 2,073,688 | |||||||||||
|
Rockland (County of) Solid Waste Management Authority;
Series 2003 B, RB
(INS–AMBAC)(e)(f)
|
5.13 | % | 12/15/28 | 1,000 | 1,020,020 | |||||||||||
|
Saratoga (County of) Industrial Development Agency (Saratoga
Hospital); Series 2007 B, Civic Facility RB
|
5.13 | % | 12/01/27 | 1,000 | 1,050,180 | |||||||||||
|
Seneca (County of) Industrial Development Agency (Seneca
Meadows, Inc.);
Series 2005, RB(c)(d)(g)(i)
|
6.63 | % | 10/01/13 | 1,500 | 1,516,470 | |||||||||||
|
Sodus Central School District; Series 2002, Ref. Unlimited
Tax GO
Bonds(c)(d)
|
5.13 | % | 06/15/12 | 1,250 | 1,265,188 | |||||||||||
|
Suffolk (County of) Industrial Development Agency (Eastern Long
Island Hospital Association); Series 2007, Civic
Facility RB(i)
|
5.38 | % | 01/01/27 | 1,950 | 1,751,529 | |||||||||||
|
Suffolk County Economic Development Corp. (Peconic Landing at
Southold, Inc.); Series 2010, Ref. RB
|
6.00 | % | 12/01/40 | 825 | 887,387 | |||||||||||
|
Tompkins (County of) Industrial Development Agency (Cornell
University); Series 2008 A, Civic Facility RB
|
5.00 | % | 07/01/37 | 750 | 844,290 | |||||||||||
|
Troy Capital Resource Corp. (Rensselaer Polytechnic Institute);
Series 2010 A, RB
|
5.00 | % | 09/01/30 | 2,000 | 2,178,340 | |||||||||||
|
TSASC, Inc.;
|
||||||||||||||||
|
Series 2006 1, Tobacco Settlement Asset-Backed RB
|
5.00 | % | 06/01/34 | 2,000 | 1,488,600 | |||||||||||
|
Series 2006 1, Tobacco Settlement Asset-Backed RB
|
5.13 | % | 06/01/42 | 1,660 | 1,193,523 | |||||||||||
|
United Nations Development Corp.; Series 2009 A, Ref.
RB
|
5.00 | % | 07/01/25 | 1,000 | 1,137,890 | |||||||||||
|
Westchester (County of) Industrial Development Agency (Kendal on
Hudson); Series 2003 A, Continuing Care Retirement
Community
Mortgage RB(d)(e)
|
6.50 | % | 01/01/13 | 3,000 | 3,158,730 | |||||||||||
|
Westchester Tobacco Asset Securitization Corp.;
Series 2005, Tobacco Settlement Asset-Backed RB
|
5.13 | % | 06/01/45 | 2,750 | 2,113,512 | |||||||||||
|
Yonkers Economic Development Corp. (Charter School of
Educational Excellence); Series 2010 A, Educational RB
|
6.25 | % | 10/15/40 | 1,200 | 1,208,628 | |||||||||||
| 354,202,053 | ||||||||||||||||
|
Puerto Rico–8.84% |
||||||||||||||||
|
Puerto Rico (Commonwealth of) Aqueduct & Sewer
Authority; Series 2012 A, Sr. Lien RB
|
5.13 | % | 07/01/37 | 2,000 | 2,002,400 | |||||||||||
|
Puerto Rico (Commonwealth of) Electric Power Authority;
|
||||||||||||||||
|
Series 2008 WW, RB
|
5.50 | % | 07/01/21 | 1,000 | 1,131,580 | |||||||||||
|
Series 2008 WW, RB
|
5.00 | % | 07/01/28 | 1,000 | 1,065,540 | |||||||||||
|
Series 2008 WW, RB
|
5.25 | % | 07/01/33 | 1,500 | 1,588,050 | |||||||||||
|
Series 2010 XX, RB
|
5.75 | % | 07/01/36 | 600 | 658,404 | |||||||||||
|
Puerto Rico (Commonwealth of) Infrastructure Financing
Authority; Series 2005 C, Ref. Special Tax RB
(INS–AMBAC)(f)
|
5.50 | % | 07/01/27 | 1,225 | 1,384,348 | |||||||||||
|
Puerto Rico (Commonwealth of) Public Buildings Authority;
Series 2004 I, Government
Facilities RB(d)(e)
|
5.25 | % | 07/01/14 | 75 | 83,134 | |||||||||||
|
Puerto Rico Sales Tax Financing Corp.;
|
||||||||||||||||
|
First Subseries 2009 A, RB
|
5.75 | % | 08/01/37 | 870 | 973,721 | |||||||||||
|
First Subseries 2009 A, RB
|
6.38 | % | 08/01/39 | 1,500 | 1,760,955 | |||||||||||
|
First Subseries 2010 A, RB
|
5.38 | % | 08/01/39 | 945 | 1,022,783 | |||||||||||
|
First Subseries 2010 C, RB
|
5.25 | % | 08/01/41 | 1,000 | 1,077,110 | |||||||||||
|
Series 2011 C, RB(b)
|
5.00 | % | 08/01/40 | 2,820 | 3,059,080 | |||||||||||
|
Series 2011 C, RB(b)
|
5.25 | % | 08/01/40 | 4,695 | 5,223,892 | |||||||||||
| 21,030,997 | ||||||||||||||||
|
Guam–2.71% |
||||||||||||||||
|
Guam (Territory of) (Section 30);
|
||||||||||||||||
|
Series 2009 A, Limited Obligation RB
|
5.63 | % | 12/01/29 | 750 | 802,387 | |||||||||||
|
Series 2009 A, Limited Obligation RB
|
5.75 | % | 12/01/34 | 500 | 532,580 | |||||||||||
|
Guam (Territory of) Power Authority; Series 2010 A, RB
|
5.50 | % | 10/01/40 | 820 | 832,284 | |||||||||||
|
Guam (Territory of) Waterworks Authority; Series 2010,
Water & Wastewater System RB
|
5.63 | % | 07/01/40 | 3,000 | 3,012,630 | |||||||||||
See accompanying Notes to Financial Statements which are an
integral part of the financial statements.
9 Invesco
Van Kampen Trust for Investment Grade New York
Municipals
|
Principal |
||||||||||||||||
|
Interest |
Maturity |
Amount |
||||||||||||||
| Rate | Date | (000) | Value | |||||||||||||
|
Guam–(continued) |
||||||||||||||||
|
Guam (Territory of); Series 2011 A, Business Privilege
Tax RB
|
5.25 | % | 01/01/36 | $ | 1,125 | $ | 1,251,461 | |||||||||
| 6,431,342 | ||||||||||||||||
|
Virgin Islands–1.35% |
||||||||||||||||
|
Virgin Islands (Government of) Public Finance Authority (Gross
Receipts Taxes Loan Note); Series 1999 A, RB
|
6.38 | % | 10/01/19 | 1,370 | 1,373,713 | |||||||||||
|
Virgin Islands (Government of) Public Finance Authority
(Matching Fund Loan Note–Diageo);
Series 2009 A, Sub. RB
|
6.63 | % | 10/01/29 | 1,600 | 1,831,936 | |||||||||||
| 3,205,649 | ||||||||||||||||
|
TOTAL
INVESTMENTS(j)–161.84%
(Cost $357,909,607)
|
384,870,041 | |||||||||||||||
|
FLOATING RATE NOTE OBLIGATIONS–(29.57)%
|
||||||||||||||||
|
Notes with interest rates ranging from 0.13% to 0.26% at
02/29/12,
and contractual maturities of collateral ranging from
11/01/25 to
07/01/44(k)(See
Note 1I)
|
(70,320,000 | ) | ||||||||||||||
|
OTHER ASSETS LESS LIABILITIES–0.05%
|
114,906 | |||||||||||||||
|
PREFERRED SHARES–(32.32)%
|
(76,850,000 | ) | ||||||||||||||
|
NET ASSETS APPLICABLE TO COMMON SHARES–100.00%
|
$ | 237,814,947 | ||||||||||||||
Investment Abbreviations:
|
ACA
|
– ACA Financial Guaranty Corp. | |
|
AGC
|
– Assured Guaranty Corp. | |
|
AGM
|
– Assured Guaranty Municipal Corp. | |
|
AMBAC
|
– American Municipal Bond Assurance Corp. | |
|
BHAC
|
– Berkshire Hathaway Assurance Corp. | |
|
CAB
|
– Capital Appreciation Bonds | |
|
CIFG
|
– CIFG Assurance North America, Inc. | |
|
GO
|
– General Obligation | |
|
INS
|
– Insurer | |
|
LOC
|
– Letter of Credit | |
|
NATL
|
– National Public Finance Guarantee Corp. | |
|
PCR
|
– Pollution Control Revenue Bonds | |
|
PILOT
|
– Payment-in-Lieu-of-Tax | |
|
Radian
|
– Radian Asset Assurance, Inc. | |
|
RB
|
– Revenue Bonds | |
|
Ref.
|
– Refunding | |
|
Sec.
|
– Secured | |
|
SGI
|
– Syncora Guarantee, Inc. | |
|
Sr.
|
– Senior | |
|
Sub.
|
– Subordinated | |
|
VRD
|
– Variable Rate Demand |
Notes to Schedule of Investments:
| (a) | Zero coupon bond issued at a discount. | |
| (b) | Underlying security related to Dealer Trusts entered into by the Trust. See Note 1I. | |
| (c) | Security subject to the alternative minimum tax. | |
| (d) | Security has an irrevocable call by the issuer or mandatory put by the holder. Maturity date reflects such call or put. | |
| (e) | Advance refunded; secured by an escrow fund of U.S. Government obligations or other highly rated collateral. | |
| (f) | Principal and/or interest payments are secured by the bond insurance company listed. | |
| (g) | Interest or dividend rate is redetermined periodically. Rate shown is the rate in effect on February 29, 2012. | |
| (h) | Demand security payable upon demand by the Trust at specified time intervals no greater than thirteen months. Interest rate is redetermined periodically. Rate shown is the rate in effect on February 29, 2012. | |
| (i) | Security purchased or received in a transaction exempt from registration under the Securities Act of 1933, as amended. The security may be resold pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The aggregate value of these securities at February 29, 2012 was $3,267,999, which represented 1.37% of the Trust’s Net Assets. | |
| (j) | This table provides a listing of those entities that have either issued, guaranteed, backed or otherwise enhanced the credit quality of more than 5% of the securities held in the portfolio. In instances where the entity has guaranteed, backed or otherwise enhanced the credit quality of a security, it is not primarily responsible for the issuer’s obligations but may be called upon to satisfy the issuer’s obligations. |
| Entities | Percentage | |||
|
National Public Finance Guarantee Corp.
|
8.3 | % | ||
| (k) | Floating rate note obligations related to securities held. The interest rates shown reflect the rates in effect at February 29, 2012. At February 29, 2012, the Trust’s investments with a value of $129,535,444 are held by Dealer Trusts and serve as collateral for the $70,320,000 in the floating rate note obligations outstanding at that date. |
See accompanying Notes to Financial Statements which are an
integral part of the financial statements.
10 Invesco
Van Kampen Trust for Investment Grade New York
Municipals
Statement
of Assets and Liabilities
February 29,
2012
|
Assets: |
||||
|
Investments, at value (Cost $357,909,607)
|
$ | 384,870,041 | ||
|
Receivable for:
|
||||
|
Interest
|
4,149,474 | |||
|
Fund expenses absorbed
|
7,541 | |||
|
Total assets
|
389,027,056 | |||
|
Liabilities: |
||||
|
Floating rate note obligations
|
70,320,000 | |||
|
Payable for:
|
||||
|
Amount due custodian
|
3,818,399 | |||
|
Dividends declared on preferred shares
|
6,405 | |||
|
Accrued other operating expenses
|
217,305 | |||
|
Total liabilities
|
74,362,109 | |||
|
Preferred shares ($0.01 par value, authorized
100,000,000 shares, 3,074 issued with liquidation
preference of $25,000 per share)
|
76,850,000 | |||
|
Net assets applicable to common shares
|
$ | 237,814,947 | ||
|
Net assets applicable to common shares consist of: |
||||
|
Shares of beneficial interest — common shares
|
$ | 233,702,334 | ||
|
Undistributed net investment income
|
5,432,122 | |||
|
Undistributed net realized gain (loss)
|
(28,279,943 | ) | ||
|
Unrealized appreciation
|
26,960,434 | |||
| $ | 237,814,947 | |||
|
Shares outstanding, $0.01 par value per common share, with an unlimited number of shares authorized: |
||||
|
Common shares outstanding
|
15,242,695 | |||
|
Net asset value per common share
|
$ | 15.60 | ||
|
Market value per common share
|
$ | 16.10 | ||
See accompanying Notes to Financial Statements which are an
integral part of the financial statements.
11 Invesco
Van Kampen Trust for Investment Grade New York
Municipals
Statement
of Operations
For
the year ended February 29, 2012
|
Investment income: |
||||
|
Interest
|
$ | 17,774,649 | ||
|
Expenses: |
||||
|
Advisory fees
|
1,986,120 | |||
|
Administrative services fees
|
80,361 | |||
|
Custodian fees
|
12,241 | |||
|
Interest, facilities and maintenance fees
|
596,754 | |||
|
Transfer agent fees
|
45,941 | |||
|
Trustees’ and officers’ fees and benefits
|
37,458 | |||
|
Professional services fees
|
263,675 | |||
|
Other
|
33,802 | |||
|
Total expenses
|
3,056,352 | |||
|
Less: Fees waived
|
(94,910 | ) | ||
|
Net expenses
|
2,961,442 | |||
|
Net investment income
|
14,813,207 | |||
|
Realized and unrealized gain (loss) from: |
||||
|
Net realized gain (loss) from investment securities
|
(1,177,421 | ) | ||
|
Change in net unrealized appreciation of investment securities
|
35,115,947 | |||
|
Net realized and unrealized gain
|
33,938,526 | |||
|
Net increase in net assets resulting from operations
|
48,751,733 | |||
|
Distributions to preferred shareholders from net investment
income
|
(174,977 | ) | ||
|
Net increase in net assets from operations applicable to common
shares
|
$ | 48,576,756 | ||
See accompanying Notes to Financial Statements which are an
integral part of the financial statements.
12 Invesco
Van Kampen Trust for Investment Grade New York
Municipals
Statement
of Changes in Net Assets
For
the year ended February 29, 2012, the period
November 1, 2010 to February 28, 2011 and the year
ended October 31, 2010
|
Year ended |
Four months
ended |
Year ended |
||||||||||
|
February 29, |
February 28, |
October 31, |
||||||||||
| 2012 | 2011 | 2010 | ||||||||||
|
Operations: |
||||||||||||
|
Net investment income
|
$ | 14,813,207 | $ | 5,293,681 | $ | 15,573,859 | ||||||
|
Net realized gain (loss)
|
(1,177,421 | ) | 442,171 | (551,101 | ) | |||||||
|
Change in net unrealized appreciation (depreciation)
|
35,115,947 | (24,688,721 | ) | 15,789,211 | ||||||||
|
Net increase (decrease) in net assets resulting from operations
|
48,751,733 | (18,952,869 | ) | 30,811,969 | ||||||||
|
Distributions to preferred shareholders from net investment
income
|
(174,977 | ) | (105,695 | ) | (235,168 | ) | ||||||
|
Net increase (decrease) in net assets from operations applicable
to common shares
|
48,576,756 | (19,058,564 | ) | 30,576,801 | ||||||||
|
Distributions to common shareholders from net investment income
|
(15,343,635 | ) | (5,105,451 | ) | (15,200,294 | ) | ||||||
|
Net increase (decrease) in net assets applicable to common shares
|
33,233,121 | (24,164,015 | ) | 15,376,507 | ||||||||
|
Share transactions–net: |
||||||||||||
|
Increase from transactions in common shares of beneficial
interest
|
555,362 | 203,084 | 559,268 | |||||||||
|
Net increase (decrease) in net assets
|
33,788,483 | (23,960,931 | ) | 15,935,775 | ||||||||
|
Net assets applicable to common shares: |
||||||||||||
|
Beginning of period
|
204,026,464 | 227,987,395 | 212,051,620 | |||||||||
|
End of period (includes undistributed net investment income of
$5,432,122, $6,286,447 and $6,328,895, respectively)
|
$ | 237,814,947 | $ | 204,026,464 | $ | 227,987,395 | ||||||
See accompanying Notes to Financial Statements which are an
integral part of the financial statements.
13 Invesco
Van Kampen Trust for Investment Grade New York
Municipals
Statement
of Cash Flows
For
the year ended February 29, 2012
|
Cash provided by operating activities: |
||||
|
Net increase in net assets resulting from operations applicable
to common shares
|
$ | 48,576,756 | ||
|
Adjustments to reconcile the change in net assets from operations applicable to common shares to net cash provided by operating activities: |
||||
|
Purchases of investments
|
(75,803,826 | ) | ||
|
Proceeds from sales of investments
|
75,521,272 | |||
|
Amortization of premium
|
813,979 | |||
|
Accretion of discount
|
(370,545 | ) | ||
|
Net realized loss from investment securities
|
1,177,421 | |||
|
Net change in unrealized appreciation on investments
|
(35,115,947 | ) | ||
|
Decrease in interest receivable and other assets
|
306,074 | |||
|
Increase in accrued expenses and other payables
|
41,611 | |||
|
Net cash provided by operating activities
|
15,146,795 | |||
|
Cash flows provided by (used in) financing activities: |
||||
|
Proceeds from redemptions of preferred shares
|
(10,150,000 | ) | ||
|
Dividends paid to common shareholders from net investment income
|
(14,797,224 | ) | ||
|
Increase in payable for amount due custodian
|
3,818,399 | |||
|
Proceeds from floating rate note obligations
|
5,485,000 | |||
|
Net cash provided by (used in) financing activities
|
(15,643,825 | ) | ||
|
Net increase (decrease) in cash
|
(497,030 | ) | ||
|
Cash at the beginning of the period
|
497,030 | |||
|
Cash at the end of the period
|
$ | — | ||
|
Supplemental disclosures of cash flow information |
||||
|
Cash paid during the period for interest, facilities and
maintenance fees
|
$ | 651,006 | ||
Notes
to Financial Statements
February 29,
2012
NOTE 1—Significant
Accounting Policies
Invesco Van Kampen Trust for Investment Grade New York
Municipals (the “Trust”), a Massachusetts business
trust, is registered under the Investment Company Act of 1940,
as amended (the “1940 Act”), as a diversified,
closed-end management investment company.
The Trust’s investment objective is to seek to
provide a high level of current income which is exempt from
federal as well as New York State and New York City income
taxes, consistent with preservation of capital. The Trust will
invest substantially all of its assets in New York municipal
securities rated investment grade at the time of investment but
may invest up to 20% of its assets in unrated securities which
are believed to be of comparable quality to those rated
investment grade.
The following is a summary of the significant
accounting policies followed by the Trust in the preparation of
its financial statements.
| A. | Security Valuations — Securities, including restricted securities, are valued according to the following policy. | |
| Securities are fair valued using an evaluated quote provided by an independent pricing service approved by the Board of Trustees. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices and may reflect appropriate factors such as institution-size trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, individual trading characteristics and other market data. Securities with a demand feature exercisable within one to seven days are valued at par. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and principal payments. | ||
| Securities for which market quotations either are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Some of the factors which may be considered in determining fair value are fundamental analytical data relating to the investment; the nature and duration of any restrictions on transferability or disposition; trading in similar securities by the same issuer or comparable companies; relevant political, economic or issuer specific news; and other relevant factors under the circumstances. |
14 Invesco
Van Kampen Trust for Investment Grade New York
Municipals
| Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments. | ||
| B. | Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. Bond premiums and discounts are amortized and/or accreted for financial reporting purposes. | |
| The Trust may periodically participate in litigation related to Trust investments. As such, the Trust may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held. | ||
| Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Trust’s net asset value and, accordingly, they reduce the Trust’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Trust and the investment adviser. | ||
| C. | Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted. | |
| D. | Distributions — The Trust declares and pays monthly dividends from net investment income to common shareholders. Distributions from net realized capital gain, if any, are generally paid annually and are distributed on a pro rata basis to common and preferred shareholders. The Trust may elect to treat a portion of the proceeds from redemptions as distributions for federal income tax purposes. | |
| E. | Federal Income Taxes — The Trust intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Trust’s taxable earnings to shareholders. As such, the Trust will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements. | |
| In addition, the Trust intends to invest in such municipal securities to allow it to qualify to pay shareholders “exempt dividends”, as defined in the Internal Revenue Code. | ||
| The Trust files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally, the Trust is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period. | ||
| F. | Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Trust monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print. | |
| G. | Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Trust. Additionally, in the normal course of business, the Trust enters into contracts, including the Trust’s servicing agreements that contain a variety of indemnification clauses. The Trust’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Trust that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote. | |
| H. | Cash and Cash Equivalents — For the purposes of the Statement of Cash Flows the Trust defines Cash and Cash Equivalents as cash (including foreign currency), money market funds and other investments held in lieu of cash and excludes investments made with cash collateral received. | |
| I. | Floating Rate Note Obligations — The Trust invests in inverse floating rate securities, such as Residual Interest Bonds (“RIBs”) or Tender Option Bonds (“TOBs”) for investment purposes and to enhance the yield of the Trust. Inverse floating rate investments tend to underperform the market for fixed rate bonds in a rising interest rate environment, but tend to outperform the market for fixed rate bonds when interest rates decline or remain relatively stable. Such transactions may be purchased in the secondary market without first owning the underlying bond or by the sale of fixed rate bonds by the Trust to special purpose trusts established by a broker dealer (“Dealer Trusts”) in exchange for cash and residual interests in the Dealer Trusts’ assets and cash flows, which are in the form of inverse floating rate securities. The Dealer Trusts finance the purchases of the fixed rate bonds by issuing floating rate notes to third parties and allowing the Trust to retain residual interest in the bonds. The floating rate notes issued by the Dealer Trusts have interest rates that reset weekly and the floating rate note holders have the option to tender their notes to the Dealer Trusts for redemption at par at each reset date. The residual interests held by the Trust (inverse floating rate investments) include the right of the Trust (1) to cause the holders of the floating rate notes to tender their notes at par at the next interest rate reset date, and (2) to transfer the municipal bond from the Dealer Trusts to the Trust, thereby collapsing the Dealer Trusts. |
15 Invesco
Van Kampen Trust for Investment Grade New York
Municipals
| TOBs are presently classified as private placement securities. Private placement securities are subject to restrictions on resale because they have not been registered under the Securities Act of 1933, as amended or are otherwise not readily marketable. As a result of the absence of a public trading market for these securities, they may be less liquid than publicly traded securities. Although these securities may be resold in privately negotiated transactions, the prices realized from these sales could be less than those originally paid by the Trust or less than what may be considered the fair value of such securities. | ||
| The Trust accounts for the transfer of bonds to the Dealer Trusts as secured borrowings, with the securities transferred remaining in the Trust’s investment assets, and the related floating rate notes reflected as Trust liabilities under the caption Floating rate note obligations on the Statement of Assets and Liabilities. The Trust records the interest income from the fixed rate bonds under the caption Interest and records the expenses related to floating rate obligations and any administrative expenses of the Dealer Trusts as a component of Interest, facilities and maintenance fees on the Statement of Operations. | ||
| The Trust generally invests in inverse floating rate securities that include embedded leverage, thus exposing the Trust to greater risks and increased costs. The primary risks associated with inverse floating rate securities are varying degrees of liquidity and the changes in the value of such securities in response to changes in market rates of interest to a greater extent than the value of an equal principal amount of a fixed rate security having similar credit quality, redemption provisions and maturity which may cause the Trust’s net asset value to be more volatile than if it had not invested in inverse floating rate securities. In certain instances, the short-term floating rate interests created by the special purpose trust may not be able to be sold to third parties or, in the case of holders tendering (or putting) such interests for repayment of principal, may not be able to be remarketed to third parties. In such cases, the special purpose trust holding the long-term fixed rate bonds may be collapsed. In the case of RIBs or TOBs created by the contribution of long-term fixed income bonds by the Trust, the Trust will then be required to repay the principal amount of the tendered securities. During times of market volatility, illiquidity or uncertainty, the Trust could be required to sell other portfolio holdings at a disadvantageous time to raise cash to meet that obligation. | ||
| J. | Interest, Facilities and Maintenance Fees — Interest, Facilities and Maintenance Fees include interest and related borrowing costs such as commitment fees and other expenses associated with lines of credit and interest and administrative expenses related to establishing and maintaining Auction Rate Preferred Shares and floating rate note obligations, if any. | |
| K. | Other Risks — The value of, payment of interest on, repayment of principal for and the ability to sell a municipal security may be affected by constitutional amendments, legislative enactments, executive orders, administrative regulations, voter initiatives and the economics of the regions in which the issuers are located. | |
| Since many municipal securities are issued to finance similar projects, especially those relating to education, health care, transportation and utilities, conditions in those sectors can affect the overall municipal securities market and a Trust’s investments in municipal securities. | ||
| There is some risk that a portion or all of the interest received from certain tax-free municipal securities could become taxable as a result of determinations by the Internal Revenue Service. |
NOTE 2—Advisory
Fees and Other Fees Paid to Affiliates
The Trust has entered into a master investment advisory
agreement with Invesco Advisers, Inc. (the “Adviser”
or “Invesco”). Under the terms of the investment
advisory agreement, the Trust pays an advisory fee to the
Adviser based on the annual rate 0.55% of the Trust’s
average daily managed assets including current preferred shares
and leverage entered into to retire preferred shares of the
Trust.
Under the terms of a master
sub-advisory
agreement between the Adviser and each of Invesco Asset
Management Deutschland GmbH, Invesco Asset Management Limited,
Invesco Asset Management (Japan) Limited, Invesco Australia
Limited, Invesco Hong Kong Limited, Invesco Senior Secured
Management, Inc. and Invesco Canada Ltd. (collectively, the
“Affiliated
Sub-Advisers”)
the Adviser, not the Trust, may pay 40% of the fees paid to the
Adviser to any such Affiliated
Sub-Adviser(s)
that provide(s) discretionary investment management services to
the Trust based on the percentage of assets allocated to such
Sub-Adviser(s).
The Adviser has contractually agreed, through at
least June 30, 2012, to waive advisory fees
and/or
reimburse expenses to the extent necessary to limit the
Trust’s expenses (excluding certain items discussed below)
to 1.02%. In determining the Adviser’s obligation to waive
advisory fees
and/or
reimburse expenses, the following expenses are not taken into
account, and could cause the Trust’s expenses to exceed the
limit reflected above: (1) interest, facilities and
maintenance fees; (2) taxes; (3) dividend expense on
short sales; (4) extraordinary or non-routine items,
including litigation expenses; and (5) expenses that the
Trust has incurred but did not actually pay because of an
expense offset arrangement. Unless the Board of Trustees and
Invesco mutually agree to amend or continue the fee waiver
agreement, it will terminate on June 30, 2012.
For the year ended February 29, 2012, the
Adviser waived advisory fees of $94,910.
The Trust has entered into a master administrative
services agreement with Invesco pursuant to which the Trust has
agreed to pay Invesco for certain administrative costs incurred
in providing accounting services to the Trust. For the year
ended February 29, 2012, expenses incurred under this
agreement are shown in the Statement of Operations as
administrative services fees.
Certain officers and trustees of the Trust are
officers and directors of Invesco.
NOTE 3—Additional
Valuation Information
GAAP defines fair value as the price that would be received to
sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date,
under current market conditions. GAAP establishes a hierarchy
that prioritizes the inputs to valuation methods giving the
highest priority to readily available unadjusted quoted prices
in an active market for identical assets (Level 1) and
the lowest priority to significant unobservable inputs
(Level 3) generally when market prices are not readily
available or are unreliable. Based on the valuation inputs, the
securities or other investments are tiered into one of three
levels. Changes in valuation methods may result in transfers in
or out of an investment’s assigned level:
| Level 1 — | Prices are determined using quoted prices in an active market for identical assets. |
16 Invesco
Van Kampen Trust for Investment Grade New York
Municipals
| Level 2 — | Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others. | |
| Level 3 — | Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Trust’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information. |
The following is a summary of the tiered valuation
input levels, as of February 29, 2012. The level assigned
to the securities valuations may not be an indication of the
risk or liquidity associated with investing in those securities.
Because of the inherent uncertainties of valuation, the values
reflected in the financial statements may materially differ from
the value received upon actual sale of those investments.
During the year ended February 29, 2012, there
were no significant transfers between investment levels.
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
|
Municipal Obligations
|
$ | — | $ | 384,870,041 | $ | — | $ | 384,870,041 | ||||||||
NOTE 4—Trustees’
and Officers’ Fees and Benefits
“Trustees’ and Officers’ Fees and Benefits”
include amounts accrued by the Trust to pay remuneration to
certain Trustees and Officers of the Trust.
During the year ended February 29, 2012, the
Trust paid legal fees of $64,202 for services rendered by
Skadden, Arps, Slate, Meagher & Flom LLP as counsel to
the Trust. A trustee of the Trust is of counsel with the firm.
NOTE 5—Cash
Balances and Borrowings
The Trust is permitted to temporarily carry a negative or
overdrawn balance in its account with State Street Bank and
Trust Company, the custodian bank. Such balances, if any at
period end, are shown in the Statement of Assets and Liabilities
under the payable caption amount due custodian. To
compensate the custodian bank for such overdrafts, the overdrawn
Trust may either (1) leave funds as a compensating balance
in the account so the custodian bank can be compensated by
earning the additional interest; or (2) compensate by
paying the custodian bank at a rate agreed upon by the custodian
bank and Invesco, not to exceed the contractually agreed upon
rate.
Inverse floating rate obligations resulting from the
transfer of bonds to Dealer Trusts are accounted for as secured
borrowings. The average floating rate notes outstanding and
average annual interest and fees related to inverse floating
rate note obligations during the year ended February 29,
2012 were $60,073,077 and 0.79%, respectively.
NOTE 6—Distributions
to Shareholders and Tax Components of Net Assets
Tax Character
of Distributions to Shareholders Paid During the Year Ended
February 29, 2012, the Period November 1, 2010 to
February 28, 2011 and the Year Ended October 31,
2010:
|
Year ended |
Four months
ended |
Year ended |
||||||||||
|
February 29, |
February 28, |
October 31, |
||||||||||
| 2012 | 2011 | 2010 | ||||||||||
|
Ordinary income
|
$ | — | $ | — | $ | 310,602 | ||||||
|
Tax-exempt income
|
15,518,612 | 5,211,146 | 15,124,860 | |||||||||
|
Total distributions
|
$ | 15,518,612 | $ | 5,211,146 | $ | 15,435,462 | ||||||
Tax Components
of Net Assets at Period-End:
| 2012 | ||||
|
Undistributed ordinary income
|
$ | 4,748,761 | ||
|
Net unrealized appreciation — investments
|
27,829,801 | |||
|
Post-October deferrals
|
(1,302,642 | ) | ||
|
Capital loss carryforward
|
(27,163,307 | ) | ||
|
Shares of beneficial interest-common shares
|
233,702,334 | |||
|
Total net assets
|
$ | 237,814,947 | ||
The difference between book-basis and tax-basis
unrealized appreciation (depreciation) is due to differences in
the timing of recognition of gains and losses on investments for
tax and book purposes. The Trust’s net unrealized
appreciation difference is attributable primarily to book/tax
accretion and amortization differences and TOBs.
Capital loss carryforward is calculated and reported
as of a specific date. Results of transactions and other
activity after that date may affect the amount of capital loss
carryforward actually available for the Trust to utilize. The
Regulated Investment Company Modernization Act of 2010 (the
“Act”) eliminated the eight-year carryover period for
capital losses that arise in taxable years beginning after its
enactment date of December 22, 2010. Consequently, these
capital
17 Invesco
Van Kampen Trust for Investment Grade New York
Municipals
losses can be carried forward for an unlimited period. However,
capital losses with an expiration period may not be used to
offset capital gains until all net capital losses without an
expiration date have been utilized. Additionally, post-enactment
capital loss carryovers will retain their character as either
short-term or long-term capital losses instead of as short-term
capital losses as under prior law. The ability to utilize
capital loss carryforward in the future may be limited under the
Internal Revenue Code and related regulations based on the
results of future transactions.
The Trust utilized $888,541 of capital loss
carryforward in the current period to offset net realized
capital gain for federal income tax purposes. The Trust has a
capital loss carryforward as of February 29, 2012, which
expires as follows:
| Capital Loss Carryforward* | ||||||||||||
| Expiration | Short-Term | Long-Term | Total | |||||||||
|
February 28, 2015
|
$ | 1,658,127 | $ | — | $ | 1,658,127 | ||||||
|
February 29, 2016
|
10,017,739 | — | 10,017,739 | |||||||||
|
February 28, 2017
|
15,077,563 | — | 15,077,563 | |||||||||
|
February 28, 2018
|
409,878 | — | 409,878 | |||||||||
| $ | 27,163,307 | $ | — | $ | 27,163,307 | |||||||
| * | Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code. |
NOTE 7—Investment
Securities
The aggregate amount of investment securities (other than
short-term securities, U.S. Treasury obligations and money
market funds, if any) purchased and sold by the Trust during the
year ended February 29, 2012 was $60,463,288 and
$75,519,613, respectively. Cost of investments on a tax basis
includes the adjustments for financial reporting purposes as of
the most recently completed Federal income tax reporting
period-end.
| Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis | ||||
|
Aggregate unrealized appreciation of investment securities
|
$ | 33,980,609 | ||
|
Aggregate unrealized (depreciation) of investment securities
|
(6,150,808 | ) | ||
|
Net unrealized appreciation of investment securities
|
$ | 27,829,801 | ||
|
Cost of investments for tax purposes is $357,040,240.
|
||||
NOTE 8—Reclassification
of Permanent Differences
Primarily as a result of differing book/tax treatment of taxable
income, on February 29, 2012, undistributed net investment
income was decreased by $148,920, undistributed net realized
gain (loss) was increased by $8,801 and shares of beneficial
interest was increased by $140,119. This reclassification had no
effect on the net assets of the Trust.
NOTE 9—Common
Shares of Beneficial Interest
Transactions in common shares of beneficial interest were as
follows:
|
Year ended |
Four months
ended |
Year ended |
||||||||||
|
February 29, |
February 28, |
October 31, |
||||||||||
| 2012 | 2011 | 2010 | ||||||||||
|
Beginning Shares
|
15,204,293 | 15,189,326 | 15,150,969 | |||||||||
|
Shares Issued Through Dividend Reinvestment
|
38,402 | 14,967 | 38,357 | |||||||||
|
Ending Shares
|
15,242,695 | 15,204,293 | 15,189,326 | |||||||||
The Trustees have approved share repurchases whereby
the Trust may, when appropriate, purchase shares in the open
market or in privately negotiated transactions at a price not
above market value or net asset value, whichever is lower at the
time of purchase.
NOTE 10—Preferred
Shares of Beneficial Interest
The Trust has issued Auction Rate Preferred Shares
(“preferred shares”) which have a liquidation value of
$25,000 per share plus the redemption premium, if any, plus
accumulated but unpaid dividends, whether or not declared,
thereon to the date of distribution. The Trust may redeem such
shares, in whole or in part, at the original purchase price of
$25,000 per share plus accumulated but unpaid dividends, whether
or not declared, thereon to the date of redemption.
Historically, the Trust paid annual fees equivalent
to 0.25% of the preferred share liquidation value for the
remarketing efforts associated with the preferred auction.
Effective March 16, 2009, the Trust decreased this amount
to 0.15% due to auction failures. In the future, if auctions no
longer fail, the Trust may return to an annual fee payment of
0.25% of the preferred share liquidation value. These fees are
included as a component of “Interest, facilities and
maintenance fees” expense on the Statement of Operations.
18 Invesco
Van Kampen Trust for Investment Grade New York
Municipals
Dividends, which are cumulative, are reset through
auction procedures.
|
Amount |
Range of |
|||||||||||||||||||
| Series | Shares+ | (000’s omitted)+ | Rate+ | Reset Date | Dividend Rates++ | |||||||||||||||
|
A
|
1,272 | $ | 31,800 | 0.229 | % | 03/08/2012 | 0.107-0.411 | % | ||||||||||||
|
B
|
954 | 23,850 | 0.122 | 03/13/12 | 0.033-0.243 | |||||||||||||||
|
C
|
848 | 21,200 | 0.244 | 03/01/12 | 0.107-0.411 | |||||||||||||||
| + | As of February 29, 2012. | |
| ++ | For the year ended February 29, 2012. |
Subsequent to February 29, 2012 and up through
April 5, 2012, the Trust paid dividends to preferred
shareholders at rates ranging from 0.110% to 0.331% in the
aggregate amount of $15,312.
The Trust is subject to certain restrictions
relating to the preferred shares. Failure to comply with these
restrictions could preclude the Trust from declaring any
distributions to common shareholders or purchasing common shares
and/or could
trigger the mandatory redemption of preferred shares at
liquidation value.
Beginning February 13, 2008 and continuing
through February 29, 2012, all series of preferred shares
of the Trust were not successfully remarketed. As a result, the
dividend rates of these preferred shares were reset to the
maximum applicable rate.
The preferred shares, which are entitled to one vote
per share, generally vote with the common shares but vote
separately as a class to elect two Trustees and on any matters
affecting the rights of the preferred shares.
The preferred shares are not listed on an exchange.
Investors in preferred shares may participate in auctions
through authorized broker-dealers; however, such broker-dealers
are not required to maintain a secondary market in preferred
shares, and there can be no assurance that a secondary market
will develop, or if it does develop, a secondary market may not
provide you with liquidity. When a preferred share auction
fails, investors may not be able to sell any or all of their
preferred shares and because of the nature of the market for
preferred shares, investors may receive less than the price paid
for their preferred shares if sold outside of the auction.
The Trust entered into additional floating rate note
and dealer trust obligations as an alternative form of leverage
in order to redeem a portion of its preferred shares.
Transactions in preferred shares were as follows:
| Series A | Series B | Series C | ||||||||||||||||||||||
| Shares | Value | Shares | Value | Shares | Value | |||||||||||||||||||
|
Outstanding at February 28, 2011
|
1,440 | $ | 36,000,000 | 1,080 | $ | 27,000,000 | 960 | $ | 24,000,000 | |||||||||||||||
|
Shares redeemed
|
(168 | ) | (4,200,000 | ) | (126 | ) | (3,150,000 | ) | (112 | ) | (2,800,000 | ) | ||||||||||||
|
Outstanding at February 29, 2012
|
1,272 | $ | 31,800,000 | 954 | $ | 23,850,000 | 848 | $ | 21,200,000 | |||||||||||||||
NOTE 11—Dividends
The Fund declared the following dividends from net
investment income subsequent to February 29, 2012:
| Declaration Date | Amount Per Share | Record Date | Payable Date | |||||||||
|
March 1, 2012
|
$ | 0.084 | March 14, 2012 | March 30, 2012 | ||||||||
|
April 2, 2012
|
$ | 0.084 | April 13, 2012 | April 30, 2012 | ||||||||
19 Invesco
Van Kampen Trust for Investment Grade New York
Municipals
NOTE 12—Financial
Highlights
The following schedule presents financial highlights for a share
of the Trust outstanding throughout the periods indicated.
|
Year ended |
Four months
ended |
|||||||||||||||||||||||||
|
February 29, |
February 28, |
Year ended October 31, | ||||||||||||||||||||||||
| 2012 | 2011 | 2010 | 2009 | 2008 | 2007 | |||||||||||||||||||||
|
Net asset value, beginning of period
|
$ | 13.42 | $ | 15.01 | $ | 14.00 | $ | 11.34 | $ | 15.80 | $ | 16.96 | ||||||||||||||
|
Net investment
income(a)
|
0.97 | 0.35 | 1.03 | 1.15 | 1.21 | 1.10 | ||||||||||||||||||||
|
Net realized gains (losses) on securities (both realized and
unrealized)
|
2.23 | (1.59 | ) | 1.00 | 2.41 | (4.59 | ) | (1.01 | ) | |||||||||||||||||
|
Distributions paid to preferred shareholders from:
|
||||||||||||||||||||||||||
|
Net investment income
|
(0.01 | ) | (0.01 | ) | (0.02 | ) | (0.04 | ) | (0.29 | ) | (0.32 | ) | ||||||||||||||
|
Net realized gain (losses)
|
— | — | — | — | — | (0.04 | ) | |||||||||||||||||||
|
Total income (loss) from investment operations
|
3.19 | (1.25 | ) | 2.01 | 3.52 | (3.67 | ) | (0.27 | ) | |||||||||||||||||
|
Less distributions to common shareholders from:
|
||||||||||||||||||||||||||
|
Net investment income
|
(1.01 | ) | (0.34 | ) | (1.00 | ) | (0.86 | ) | (0.79 | ) | (0.78 | ) | ||||||||||||||
|
Net realized gains
|
— | — | — | — | — | (0.11 | ) | |||||||||||||||||||
|
Net asset value, end of period
|
$ | 15.60 | $ | 13.42 | $ | 15.01 | $ | 14.00 | $ | 11.34 | $ | 15.80 | ||||||||||||||
|
Market value, end of period
|
$ | 16.10 | $ | 13.46 | $ | 15.46 | $ | 14.38 | $ | 10.80 | $ | 14.91 | ||||||||||||||
|
Total return at net asset
value(b)
|
24.64 | % | (8.36 | )% | 14.83 | % | ||||||||||||||||||||
|
Total return at market
value(c)
|
28.25 | % | (10.76 | )% | 15.14 | % | 43.22 | % | (23.21 | )% | 4.38 | % | ||||||||||||||
|
Net assets applicable to common shares, end of period (000s
omitted)
|
$ | 237,815 | $ | 204,026 | $ | 227,987 | $ | 212,052 | $ | 171,762 | $ | 243,701 | ||||||||||||||
|
Portfolio turnover
rate(d)
|
17 | % | 5 | % | 14 | % | 28 | % | 43 | % | 19 | % | ||||||||||||||
|
Ratios/supplemental data based on average net assets applicable to common shares: |
||||||||||||||||||||||||||
|
Ratio of expenses:
|
||||||||||||||||||||||||||
|
With fee waivers
and/or
expense
reimbursements(e)
|
1.36 | %(g) | 1.34 | %(h)(i) | 1.35 | % | 1.50 | % | 2.24 | % | 2.06 | % | ||||||||||||||
|
With fee waivers
and/or
expense reimbursements excluding interest, facilities and
maintenance
fees(e)(f)
|
1.08 | %(g) | 1.02 | %(h)(i) | 1.08 | % | 1.14 | % | 0.97 | % | 1.04 | % | ||||||||||||||
|
Without fee waivers
and/or
expense
reimbursements(e)
|
1.40 | %(g) | 1.34 | %(h)(i) | 1.45 | % | 1.68 | % | 2.41 | % | 2.21 | % | ||||||||||||||
|
Ratio of net investment income before preferred share dividends
|
6.77 | %(g) | 7.79 | %(i) | 7.07 | % | 9.12 | % | 8.19 | % | 6.71 | % | ||||||||||||||
|
Preferred share dividends
|
0.08 | %(g) | 0.15 | %(i) | ||||||||||||||||||||||
|
Ratio of net investment income after preferred share
dividends(f)
|
6.69 | %(g) | 7.64 | %(i) | 6.96 | % | 8.79 | % | 6.25 | % | 4.78 | % | ||||||||||||||
|
Senior securities: |
||||||||||||||||||||||||||
|
Total amount of preferred shares outstanding (000’s omitted)
|
76,850 | 87,000 | 87,000 | 99,500 | 116,000 | 145,000 | ||||||||||||||||||||
|
Asset coverage per preferred
shares(j)
|
$ | 102,363 | $ | 83,628 | $ | 90,514 | $ | 78,280 | $ | 62,029 | $ | 67,031 | ||||||||||||||
|
Liquidating preference per preferred share
|
$ | 25,000 | $ | 25,000 | $ | 25,000 | $ | 25,000 | $ | 25,000 | $ | 25,000 | ||||||||||||||
| (a) | Calculated using average shares outstanding. | |
| (b) | Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Not annualized for periods less than one year, if applicable. | |
| (c) | Total return assumes an investment at the common share market price at the beginning of the period indicated, reinvestment of all distributions for the period in accordance with the Trust’s dividend reinvestment plan, and sale of all shares at the closing common share market price at the end of the period indicated. Not annualized for periods less than one year, if applicable. | |
| (d) | Portfolio turnover is not annualized for periods less than one year, if applicable. | |
| Ratios do not reflect the effect of dividend payments to auction rate preferred shareholders; income ratios reflect income earned on investments made with assets attributable to auction rate preferred shares. | ||
| (e) | Ratios do not reflect the effect of dividend payments to preferred shareholders. | |
| (f) | For the years ended October 31, 2010, and prior, ratios do not exclude facilities and maintenance fees. | |
| (g) | Ratios are based on average net assets applicable to common shares (000’s omitted) of $218,963. | |
| (h) | Ratios include an adjustment for a change in accounting estimate for professional services fees during the period. Ratios excluding this adjustment would have been higher by 0.06%. | |
| (i) | Annualized. | |
| (j) | Calculated by subtracting the Trust’s total liabilities (not including the preferred shares) from the Trust’s total assets and dividing this by the number of preferred shares outstanding. |
20 Invesco
Van Kampen Trust for Investment Grade New York
Municipals
NOTE 13—Significant
Event
The Board of Trustees of the Trust (the “Board”)
approved the redomestication of the Trust, a Massachusetts
business trust, into a Delaware statutory trust pursuant to an
Agreement and Plan of Redomestication (the
“Redomestication”). The Board also approved an
Agreement and Plan of Merger pursuant to which Invesco New York
Quality Municipal Securities (the “Target Trust”)
would merge with and into the Trust in accordance with the
Delaware Statutory Trust Act (the “Merger”). As a
result of the Merger, all assets and liabilities of the Target
Fund will become assets and liabilities of the Trust and the
Target Fund’s shareholders will become shareholders of the
Trust. The Redomestication and the Agreement are subject to
shareholder approval.
In addition, the Board also approved a plan to
redeem all of the outstanding auction rate preferred shares at
their respective liquidation preferences. These redemptions are
anticipated to be funded with proceeds received from the
issuance of Variable Rate Munifund Term Preferred Shares
(“VMTPS”) and Tender Option Bonds (“TOBs”).
VMTPS are a variable rate form of preferred stock with a
mandatory redemption date. These redemptions and this issuance
of VMTPS are targeted to occur in the first half of 2012.
NOTE 14—Legal
Proceedings
Terms used in the Legal Proceedings Note are defined terms
solely for the purpose of this note.
Pending
Litigation and Regulatory Inquiries
The Trust received a shareholder demand letter dated
March 25, 2011, from one of the Trust’s shareholders,
alleging that the Board and the officers of the Trust breached
their fiduciary duty and duty of loyalty and wasted Trust assets
by causing the Trust to redeem Auction Rate Preferred Securities
(ARPS) at their liquidation value. Specifically, the shareholder
claims that the Board and officers had no obligation to provide
liquidity to the ARPS shareholders, the redemptions were
improperly motivated to benefit the prior adviser by preserving
business relationships with the ARPS holders, i.e.,
institutional investors, and the market value and fair value of
the ARPS were less than par at the time they were redeemed. The
letter alleges that the redemption of the ARPS occurred at the
expense of the Trust and its common shareholders. The letter
demands that: 1) the Board take action against the prior
adviser and trustees/officers to recover damages; 2) the
Board refrain from authorizing further redemptions or
repurchases of ARPS by the Trust at prices in excess of fair
value or market value at the time of the transaction; and
3) if the Trust does not commence appropriate action, the
shareholder will commence a shareholder derivative action on
behalf of the Trust. The Board formed a Special Litigation
Committee (“SLC”) to investigate these claims and to
make a recommendation to the Board regarding whether pursuit of
these claims is in the best interests of the Trusts. Upon
completion of its evaluation, the SLC recommended that the Board
reject the demands specified in the shareholder demand letters,
after which the Board announced on June 24, 2011, that it
had adopted the SLC’s recommendation and voted to reject
the demands. The Trust has accrued $150,284 in expenses relating
to these matters during the year ended February 29, 2012.
Management of Invesco and the Trust believe that the
outcome of the demand letter described above will have no
material adverse effect on the Trust or on the ability of
Invesco to provide ongoing services to the Trust.
21 Invesco
Van Kampen Trust for Investment Grade New York
Municipals
Report
of Independent Registered Public Accounting Firm
To the Board of Trustees and Shareholders of Invesco Van Kampen
Trust for Investment Grade New York Municipals:
In our opinion, the accompanying statement of assets and
liabilities, including the schedule of investments, and the
related statements of operations, of changes in net assets and
of cash flows and the financial highlights present fairly, in
all material respects, the financial position of Invesco Van
Kampen Trust for Investment Grade New York Municipals (hereafter
referred to as the “Trust”) at February 29, 2012,
the results of its operations and cash flows for the year then
ended, and the changes in its net assets and financial
highlights for the year then ended, the period ended
February 28, 2011 and the year ended October 31, 2010,
in conformity with accounting principles generally accepted in
the United States of America. These financial statements and
financial highlights (hereafter referred to as “financial
statements”) are the responsibility of the Trust’s
management. Our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our
audits of these financial statements in accordance with the
standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant
estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits,
which included confirmation of securities at February 29,
2012 by correspondence with the custodian and brokers, provide a
reasonable basis for our opinion. The financial highlights of
the Trust for the periods ended October 31, 2009 and prior
were audited by other independent auditors whose report dated
December 21, 2009 expressed an unqualified opinion on those
financial statements.
PRICEWATERHOUSECOOPERS LLP
April 23, 2012
Houston, Texas
22 Invesco
Van Kampen Trust for Investment Grade New York
Municipals
Tax
Information
Form 1099-DIV,
Form 1042-S
and other year-end tax information provide shareholders with
actual calendar year amounts that should be included in their
tax returns. Shareholders should consult their tax advisors.
The following distribution information is being
provided as required by the Internal Revenue Code or to meet a
specific state’s requirement.
The Trust designates the following amounts or, if
subsequently determined to be different, the maximum amount
allowable for its fiscal year ended February 29, 2012:
|
Federal and State Income
Tax
|
||||
|
Qualified Dividend Income*
|
0.00% | |||
|
Corporate Dividend Received Deduction*
|
0.00% | |||
|
Tax-Exempt Interest Dividends*
|
98.99% | |||
| * | The above percentages are based on ordinary income dividends paid to shareholders during the Trust’s fiscal year. |
23 Invesco
Van Kampen Trust for Investment Grade New York
Municipals
| Supplemental Information |
The disclosure concerning the investment objective, principal
investment strategies and principal risks of Invesco Van Kampen
Trust for Investment Grade New York Municipals (the
“Fund”) is being updated. The investment objective has
not changed; however the Board of Trustees of the Fund approved
a revised statement of the principal investment strategies for
the Fund. The revised disclosure of the investment objective,
principal investment strategies and associated principal risks
for the Fund is set forth below.
Investment
Objective
The investment objective of Invesco Van Kampen Trust for
Investment Grade New York Municipals (the “Fund”) is
to provide Common Shareholders with a high level of current
income exempt from federal as well as from New York State and
New York City income taxes, consistent with preservation of
capital.
The investment objective is fundamental and may not
be changed without approval of a majority of the Fund’s
outstanding voting securities, as defined in the Investment
Company Act of 1940, as amended (the “1940 Act”).
Principal
Investment Strategies of the Fund
Under normal market conditions, at least 80% of the Fund’s
total assets will be invested in municipal securities. The
policy stated in the foregoing sentence is a fundamental policy
of the Fund and may not be changed without approval of a
majority of the Fund’s outstanding voting securities, as
defined in the 1940 Act. Under normal market conditions, the
Fund’s investment adviser, Invesco Advisers, Inc. (the
“Adviser”), seeks to achieve the Fund’s
investment objective by investing at least 80% of the
Fund’s total assets in investment grade New York municipal
securities. Investment grade securities are: (i) securities
rated BBB- or higher by Standard & Poor’s
Financial Services LLC, a subsidiary of The McGraw-Hill
Companies, Inc. (“S&P”) or Baa3 or higher by
Moody’s Investors Service, Inc. (“Moody’s”)
or an equivalent rating by another nationally recognized
statistical rating organization (“NRSRO”);
(ii) comparably rated short-term securities; or
(iii) unrated municipal securities determined by the
Adviser to be of comparable quality at the time of purchase.
Under normal market conditions, the Fund may invest up to 20% of
its total assets in municipal securities rated below investment
grade or that are unrated but determined by the Adviser to be of
comparable quality at the time of purchase. Lower-grade
securities are commonly referred to as junk bonds and involve
greater risks than investments in higher-grade securities. The
Fund does not purchase securities that are in default or rated
in categories lower than B- by S&P or B3 by Moody’s or
unrated securities of comparable quality.
The foregoing percentage and rating limitations
apply at the time of acquisition of a security based on the last
previous determination of the Fund’s net asset value. Any
subsequent change in any rating by a rating service or change in
percentages resulting from market fluctuations or other changes
in the Fund’s total assets will not require elimination of
any security from the Fund’s portfolio.
The Fund may invest all or a substantial portion of
its total assets in New York municipal securities that may
subject certain investors to the federal alternative minimum tax
and, therefore, a substantial portion of the income produced by
the Fund may be taxable for such investors under the federal
alternative minimum tax. Accordingly, the Fund may not be a
suitable investment for investors who are already subject to the
federal alternative minimum tax or could become subject to the
federal alternative minimum tax as a result of an investment in
the Fund.
The Adviser buys and sells securities for the Fund
with a view towards seeking a high level of current income
exempt from federal income tax, as well as from New York State
and New York City income taxes, consistent with preservation of
capital, subject to reasonable credit risk. As a result, the
Fund will not necessarily invest in the highest yielding New
York municipal securities permitted by its investment policies
if the Adviser determines that market risks or credit risks
associated with such investments would subject the Fund’s
portfolio to undue risk. The potential realization of capital
gains or losses resulting from possible changes in interest
rates will not be a major consideration and frequency of
portfolio turnover generally will not be a limiting factor if
the Adviser considers it advantageous to purchase or sell
securities.
The Adviser employs a
bottom-up,
research-driven approach to identify securities that have
attractive risk/reward characteristics for the sectors in which
the Fund invests. The Adviser also integrates macroeconomic
analysis and forecasting into its evaluation and ranking of
various sectors and individual securities. Finally, the Fund
employs leverage in an effort to enhance the Fund’s income
and total return. Sell decisions are based on: (i) a
deterioration or likely deterioration of an individual
issuer’s capacity to meet its debt obligations on a timely
basis; (ii) a deterioration or likely deterioration of the
broader fundamentals of a particular industry or sector; and
(iii) opportunities in the secondary or primary market to
purchase a security with better relative value.
Municipal Securities. Municipal
securities are obligations issued by or on behalf of states,
territories or possessions of the United States, the District of
Columbia and their cities, counties, political subdivisions,
agencies and instrumentalities, the interest on which, in the
opinion of bond counsel or other counsel to the issuers of such
securities is, at the time of issuance, exempt from federal
income tax. New York municipal securities are municipal
securities the interest on which, in the opinion of bond counsel
or other counsel to the issuers of such securities is, at the
time of issuance, exempt from New York State and New York City
individual income tax. The Adviser does not conduct its own
analysis of the tax status of the interest paid by municipal
securities held by the Fund, but will rely on the opinion of
counsel to the issuer of each such instrument.
The issuers of municipal securities obtain funds for
various public purposes, including the construction of a wide
range of public facilities such as airports, highways, bridges,
schools, hospitals, housing, mass transportation, streets and
water and sewer works. Other public purposes for which municipal
securities may be issued include refunding outstanding
obligations, obtaining funds for general operating expenses and
obtaining funds to lend to other public institutions and
facilities. Certain types of municipal securities are issued to
obtain funding for privately operated facilities.
The yields of municipal securities depend on, among
other things, general money market conditions, general
conditions of the municipal securities market, size of a
particular offering, the maturity of the obligation and rating
of the issue. There is no limitation as to the maturity of the
municipal securities in which the Fund may invest. The ratings
of S&P and Moody’s represent their opinions of the
quality of the municipal securities they undertake to rate.
These ratings are general and are not absolute standards of
quality. Consequently, municipal securities with the same
maturity, coupon and rating may have different yields while
municipal securities of the same maturity and coupon with
different ratings may have the same yield.
The two principal classifications of municipal
securities are general obligation and revenue or special
delegation securities. General obligation securities are secured
by the issuer’s pledge of its faith, credit and taxing
power for the payment of principal and interest. Revenue
securities are usually payable only from the revenues derived
from a particular facility or class of facilities or, in some
cases, from the proceeds of a special excise tax or other
specific revenue source.
24 Invesco
Van Kampen Trust for Investment Grade New York
Municipals
Industrial development bonds are usually revenue securities, the
credit quality of which is normally directly related to the
credit standing of the industrial user involved.
Within these principal classifications of municipal
securities, there are a variety of types of municipal
securities, including:
| • | Variable rate securities, which bear rates of interest that are adjusted periodically according to formulae intended to reflect market rates of interest. | |
| • | Municipal notes, including tax, revenue and bond anticipation notes of short maturity, generally less than three years, which are issued to obtain temporary funds for various public purposes. | |
| • | Variable rate demand notes, which are obligations that contain a floating or variable interest rate adjustment formula and which are subject to a right of demand for payment of the principal balance plus accrued interest either at any time or at specified intervals. The interest rate on a variable rate demand note may be based on a known lending rate, such as a bank’s prime rate, and may be adjusted when such rate changes, or the interest rate may be a market rate that is adjusted at specified intervals. The adjustment formula maintains the value of the variable rate demand note at approximately the par value of such note at the adjustment date. | |
| • | Municipal leases, which are obligations issued by state and local governments or authorities to finance the acquisition of equipment and facilities. Certain municipal lease obligations may include non-appropriation clauses which provide that the municipality has no obligation to make lease or installment purchase payments in future years unless money is appropriated for such purpose on a yearly basis. | |
| • | Private activity bonds, which are issued by, or on behalf of, public authorities to finance privately operated facilities. | |
| • | Participation certificates, which are obligations issued by state or local governments or authorities to finance the acquisition of equipment and facilities. They may represent participations in a lease, an installment purchase contract or a conditional sales contract. | |
| • | Municipal securities that may not be backed by the faith, credit and taxing power of the issuer. | |
| • | Municipal securities that are privately placed and that may have restrictions on the Fund’s ability to resell, such as timing restrictions or requirements that the securities only be sold to qualified institutional investors. | |
| • | Municipal securities that are insured by financial insurance companies. |
Derivatives. The Fund may use derivative
instruments for a variety of purposes, including hedging and
risk management, and (other than for futures or swaps) for
portfolio management or to earn income. Derivatives are
financial instruments whose value is based on the value of
another underlying asset, interest rate, index or financial
instrument. Derivative instruments and techniques that the Fund
may use include:
Futures. A futures contract is a
standardized agreement between two parties to buy or sell a
specific quantity of an underlying instrument at a specific
price at a specific future time. The value of a futures contract
tends to increase and decrease in tandem with the value of the
underlying instrument. Futures contracts are bilateral
agreements, with both the purchaser and the seller equally
obligated to complete the transaction. Depending on the terms of
the particular contract, futures contracts are settled through
either physical delivery of the underlying instrument on the
settlement date or by payment of a cash settlement amount on the
settlement date.
Swaps. A swap contract is an agreement
between two parties pursuant to which the parties exchange
payments at specified dates on the basis of a specified notional
amount, with the payments calculated by reference to specified
securities, indexes, reference rates, currencies or other
instruments. Most swap agreements provide that when the period
payment dates for both parties are the same, the payments are
made on a net basis (i.e., the two payment streams are netted
out, with only the net amount paid by one party to the other).
The Fund’s obligations or rights under a swap contract
entered into on a net basis will generally be equal only to the
net amount to be paid or received under the agreement, based on
the relative values of the positions held by each counterparty.
Inverse Floating Rate Obligations. The
Fund may invest in inverse floating rate obligations. Inverse
floating rate obligations are variable rate debt instruments
that pay interest at rates that move in the opposite direction
of prevailing interest rates. Because the interest rate paid to
holders of such obligations is generally determined by
subtracting a variable or floating rate from a predetermined
amount, the interest rate paid to holders of such obligations
will decrease as such variable or floating rate increases and
increase as such variable or floating rate decreases. The
inverse floating rate obligations in which the Fund may invest
include derivative instruments such as residual interest bonds
(“RIBs”) or tender option bonds (“TOBs”).
Such instruments are typically created by a special purpose
trust that holds long-term fixed rate bonds and sells two
classes of beneficial interests: short-term floating rate
interests, which are sold to third party investors, and inverse
floating residual interests, which are purchased by the Fund.
The short-term floating rate interests have first priority on
the cash flow from the bond held by the special purpose trust
and the Fund (as holder of the inverse floating residual
interests) is paid the residual cash flow from the bond held by
the special purpose trust.
When-Issued and Delayed Delivery
Transactions. The Fund may purchase and sell securities
on a when-issued and delayed delivery basis, which means that
the Fund buys or sells a security with payment and delivery
taking place in the future. The payment obligation and the
interest rate are fixed at the time the Fund enters into the
commitment. No income accrues on such securities until the date
the Fund actually takes delivery of the securities.
Preferred Shares. The Fund uses leverage
in the form of Preferred Shares. Dividends on the Preferred
Shares will typically be comparable to the yields on investment
grade short-term municipal securities, although the assets
attributable to the Preferred Shares will generally be invested
in longer-term municipal securities, which typically have higher
yields than short-term municipal securities. Assuming such a
yield differential, this leveraged capital structure enables the
Fund to pay a potentially higher yield on the Common Shares than
similar investment companies that do not use leverage.
The Fund will generally maintain an asset coverage
of the value of the Fund’s total assets, less all
liabilities and indebtedness of the Fund not represented by the
Preferred Shares, of 200% of the aggregate liquidation value of
the Preferred Shares. The liquidation value of the Preferred
Shares is their aggregate original purchase price, plus any
accrued and unpaid dividends.
Portfolio Turnover. The Fund generally
will not engage in the trading of securities for the purpose of
realizing short-term profits, but it will adjust its portfolio
as it deems advisable in view of prevailing or anticipated
market conditions to accomplish the Fund’s investment
objective. For example, the Fund may sell portfolio securities
in anticipation of a movement in interest rates. Other than for
tax purposes, frequency of portfolio turnover will not be a
limiting factor if the Fund considers it advantageous to
purchase or sell securities. The Fund does not anticipate that
the annual portfolio turnover rate of the Fund will be in excess
of 100%. A high rate of portfolio turnover involves
correspondingly greater brokerage commission and transaction
expenses than a lower rate, which
25 Invesco
Van Kampen Trust for Investment Grade New York
Municipals
expenses must be borne by the Fund and the shareholders. High
portfolio turnover may also result in the realization of
substantial net short-term capital gains, and any distributions
resulting from such gains will be taxable at ordinary income
rates for federal income tax purposes.
Temporary Defensive Strategy. When
market conditions dictate a more defensive investment strategy,
the Fund may, on a temporary basis, hold cash or invest a
portion or all of its assets in high-quality, short-term
municipal securities. If such municipal securities are not
available or, in the judgment of the Adviser, do not afford
sufficient protection against adverse market conditions, the
Fund may invest in taxable instruments. Such taxable securities
may include securities issued or guaranteed by the
U.S. government, its agencies or instrumentalities; other
investment grade quality fixed income securities; prime
commercial paper; certificates of deposit; bankers’
acceptances and other obligations of domestic banks; repurchase
agreements; and money market funds (including money market funds
affiliated with the Adviser). In taking a defensive position,
the Fund would temporarily not be pursuing its principal
investment strategies and may not achieve its investment
objective.
Zero Coupon/PIK Bonds. The Fund may
invest in securities not producing immediate cash income,
including zero coupon securities or
pay-in-kind
(“PIK”) securities, when their effective yield over
comparable instruments producing cash income makes these
investments attractive. PIK securities are debt securities that
pay interest through the issuance of additional securities. Zero
coupon securities are debt securities that do not entitle the
holder to any periodic payment of interest prior to maturity or
a specified date when the securities begin paying current
interest. They are issued and traded at a discount from their
face amounts or par value, which discount varies depending on
the time remaining until cash payments begin, prevailing
interest rates, liquidity of the security and the perceived
credit quality of the issuer. The securities do not entitle the
holder to any periodic payments of interest prior to maturity,
which prevents any reinvestment of interest payments at
prevailing interest rates if prevailing interest rates rise. On
the other hand, because there are no periodic interest payments
to be reinvested prior to maturity, zero coupon securities
eliminate the reinvestment risk and may lock in a favorable rate
of return to maturity if interest rates drop. In addition, the
Fund would be required to distribute the income on these
instruments as it accrues, even though the Fund will not receive
all of the income on a current basis or in cash. Thus, the Fund
may have to sell other investments, including when it may not be
advisable to do so, to make income distributions to the Common
Shareholders.
Principal Risks
of Investing in the Fund
As with any fund investment, loss of money is a risk of
investing. An investment in the Fund is not a deposit in a bank
and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. As with
any managed fund, the Adviser may not be successful in selecting
the best-performing securities or investment techniques, and the
Fund’s performance may lag behind that of similar funds.
The risks associated with an investment in the Fund can increase
during times of significant market volatility.
Municipal Securities Risk. Under normal
market conditions, longer-term municipal securities generally
provide a higher yield than shorter-term municipal securities.
The Adviser may adjust the average maturity of the Fund’s
portfolio from time to time depending on its assessment of the
relative yields available on securities of different maturities
and its expectations of future changes in interest rates. The
yields of municipal securities may move differently and
adversely compared to the yields of the overall debt securities
markets. Certain kinds of municipal securities are subject to
specific risks that could cause a decline in the value of those
securities:
Lease Obligations. Certain lease
obligations contain non-appropriation clauses that provide that
the governmental issuer has no obligation to make future
payments under the lease or contract unless money is
appropriated for that purpose by the appropriate legislative
body on an annual or other periodic basis. Consequently,
continued lease payments on those lease obligations containing
non-appropriation clauses are dependent on future legislative
actions. If these legislative actions do not occur, the holders
of the lease obligation may experience difficulty in exercising
their rights, including disposition of the property.
Private Activity Bonds. The issuers of
private activity bonds in which the Fund may invest may be
negatively impacted by conditions affecting either the general
credit of the user of the private activity project or the
project itself. Conditions such as regulatory and environmental
restrictions and economic downturns may lower the need for these
facilities and the ability of users of the project to pay for
the facilities. Private activity bonds may also pay interest
subject to the alternative minimum tax.
In 2011, S&P lowered its long-term sovereign
credit rating on the U.S. to “AA+” from
“AAA” with a negative outlook. Following
S&P’s downgrade of the long-term sovereign credit
rating on the U.S., the major rating agencies have also placed
many municipalities on review for potential downgrades, which
could impact the market price, liquidity and volatility of the
municipal securities held by the Fund in its portfolio. If the
universe of municipal securities meeting the Fund’s ratings
and credit quality requirements shrinks, it may be more
difficult for the Fund to meet its investment objectives and the
Fund’s investments may become more concentrated in fewer
issues. Future downgrades by other rating agencies could have
significant adverse effects on the economy generally and could
result in significant adverse impacts on municipal issuers and
the Fund.
Many state and municipal governments that issue
securities are under significant economic and financial stress
and may not be able to satisfy their obligations. In response to
the national economic downturn, governmental cost burdens have
been and may continue to be reallocated among federal, state and
local governments. The ability of municipal issuers to make
timely payments of interest and principal may be diminished
during general economic downturns and as governmental cost
burdens are reallocated among federal, state and local
governments. Also, as a result of the downturn and related
unemployment, declining income and loss of property values, many
state and local governments have experienced significant
reductions in revenues and consequently difficulties meeting
ongoing expenses. As a result, certain of these state and local
governments may have difficulty paying or default in the payment
of principal or interest on their outstanding debt, may
experience ratings downgrades of their debt. The taxing power of
any governmental entity may be limited by provisions of state
constitutions or laws and an entity’s credit will depend on
many factors, including the entity’s tax base, the extent
to which the entity relies on federal or state aid, and other
factors which are beyond the entity’s control. In addition,
laws enacted in the future by Congress or state legislatures or
referenda could extend the time for payment of principal
and/or
interest, or impose other constraints on enforcement of such
obligations or on the ability of municipalities to levy taxes.
In addition, municipalities might seek protection
under the bankruptcy laws, thereby affecting the repayment of
their outstanding debt. Issuers of municipal securities might
seek protection under the bankruptcy laws. In the event of
bankruptcy of such an issuer, holders of municipal securities
could experience delays in collecting principal and interest and
such holders may not be able to collect all principal and
interest to which they are entitled. Certain provisions of the
U.S. Bankruptcy Code governing such bankruptcies are
unclear. Further, the application of state law to municipal
securities issuers could produce varying results
26 Invesco
Van Kampen Trust for Investment Grade New York
Municipals
among the states or among municipal securities issuers within a
state. These uncertainties could have a significant impact on
the prices of the municipal securities in which the Fund
invests. The value of municipal securities generally may be
affected by uncertainties in the municipal markets as a result
of legislation or litigation, including legislation or
litigation that changes the taxation of municipal securities or
the rights of municipal securities holders in the event of a
bankruptcy. To enforce its rights in the event of a default in
the payment of interest or repayment of principal, or both, the
Fund may take possession of and manage the assets securing the
issuer’s obligations on such securities, which may increase
the Fund’s operating expenses. Any income derived from the
Fund’s ownership or operation of such assets may not be
tax-exempt and could jeopardize the Fund’s status as a
regulated investment company under the Internal Revenue Code.
The U.S. economy may be in the process of
“deleveraging,” with individuals, companies and
municipalities reducing expenditures and paying down borrowings.
In such event, the number of municipal borrowers and the amount
of outstanding municipal securities may contract, potentially
without corresponding reductions in investor demand for
municipal securities. As a result, the Fund may have fewer
investment alternatives, may invest in securities that it
previously would have declined and may concentrate its
investments in a smaller number of issuers.
Insurance Risk. Financial insurance
guarantees that interest payments on a bond will be made on time
and that principal will be repaid when the bond matures. Insured
municipal obligations would generally be assigned a lower rating
if the rating were based primarily on the credit quality of the
issuer without regard to the insurance feature. If the
claims-paying ability of the insurer were downgraded, the
ratings on the municipal obligations it insures may also be
downgraded. Insurance does not protect the Fund against losses
caused by declines in a bond’s value due to a change in
market conditions.
Market Risk. Market risk is the
possibility that the market values of securities owned by the
Fund will decline. The net asset value of the Fund will change
with changes in the value of its portfolio securities, and the
value of the Fund’s investments can be expected to
fluctuate over time. The financial markets in general are
subject to volatility and may at times experience extreme
volatility and uncertainty, which may affect all investment
securities, including debt securities and derivative
instruments. Volatility may be greater during periods of general
economic uncertainty.
Interest Rate Risk. Because the Fund
invests primarily in fixed income municipal securities, the net
asset value of the Fund can be expected to change as general
levels of interest rates fluctuate. When interest rates decline,
the value of a portfolio invested in fixed income securities
generally can be expected to rise. Conversely, when interest
rates rise, the value of a portfolio invested in fixed income
securities generally can be expected to decline. The prices of
longer term municipal securities generally are more volatile
with respect to changes in interest rates than the prices of
shorter term municipal securities. These risks may be greater in
the current market environment because certain interest rates
are near historically low levels.
Credit Risk. Credit risk refers to an
issuer’s ability to make timely payments of interest and
principal when due. Municipal securities, like other debt
obligations, are subject to the credit risk of nonpayment. The
ability of issuers of municipal securities to make timely
payments of interest and principal may be adversely affected by
general economic downturns and as relative governmental cost
burdens are allocated and reallocated among federal, state and
local governmental units. Private activity bonds used to finance
projects, such as industrial development and pollution control,
may also be negatively impacted by the general credit of the
user of the project. Nonpayment would result in a reduction of
income to the Fund, and a potential decrease in the net asset
value of the Fund. The Adviser continuously monitors the issuers
of securities held in the Fund.
The Fund will rely on the Adviser’s judgment,
analysis and experience in evaluating the creditworthiness of an
issuer. In its analysis, the Adviser may consider the credit
ratings of NRSROs in evaluating securities, although the Adviser
does not rely primarily on these ratings. Credit ratings of
NRSROs evaluate only the safety of principal and interest
payments, not the market risk. In addition, ratings are general
and not absolute standards of quality, and the creditworthiness
of an issuer may decline significantly before an NRSRO lowers
the issuer’s rating. A rating downgrade does not require
the Fund to dispose of a security.
Medium-grade obligations (for example, bonds rated
BBB by S&P) possess speculative characteristics so that
changes in economic conditions or other circumstances are more
likely to lead to a weakened capacity of the issuer to make
principal and interest payments than in the case of higher-rated
securities. Securities rated below investment grade are
considered speculative by NRSROs with respect to the
issuer’s continuing ability to pay interest and principal.
Income Risk. The income you receive from
the Fund is based primarily on prevailing interest rates, which
can vary widely over the short and long term. If interest rates
decrease, your income from the Fund may decrease as well.
Call Risk. If interest rates fall, it is
possible that issuers of securities with high interest rates
will prepay or call their securities before their maturity
dates. In this event, the proceeds from the called securities
would likely be reinvested by the Fund in securities bearing the
new, lower interest rates, resulting in a possible decline in
the Fund’s income and distributions to shareholders.
Market Segment Risk. The Fund generally
considers investments in municipal securities issued by
governments or political subdivisions not to be subject to
industry concentration policies (because such issuers are not in
any industry). The Fund may, however, invest in municipal
securities issued by entities having similar characteristics.
For example, the issuers may be located in the same geographic
area or may pay their interest obligations from revenue of
similar projects, such as hospitals, airports, utility systems
and housing finance agencies. This may make the Fund’s
investments more susceptible to similar economic, political or
regulatory occurrences, which could increase the volatility of
the Fund’s net asset value. The Fund may invest more than
25% of its total assets in a segment of the municipal securities
market with similar characteristics if the Adviser determines
that the yields available from obligations in a particular
segment justify the additional risks of a larger investment in
that segment. The Fund may not, however, invest more than 25% of
its total assets in municipal securities, such as many private
activity bonds or industrial development revenue bonds, issued
for non-governmental entities that are in the same industry.
Tax Risk. To qualify for the favorable
U.S. federal income tax treatment generally accorded to
regulated investment companies, among other things, the Fund
must derive in each taxable year at least 90% of its gross
income from certain prescribed sources. If for any taxable year
the Fund does not qualify as a regulated investment company, all
of its taxable income (including its net capital gain) would be
subject to federal income tax at regular corporate rates without
any deduction for distributions to shareholders, and all
distributions from the Fund (including underlying distributions
attributable to tax exempt interest income) would be taxable to
shareholders as ordinary dividends to the extent of the
Fund’s current and accumulated earnings and profits.
The value of the Fund’s investments and its net
asset value may be adversely affected by changes in tax rates
and policies. Because interest income from municipal securities
is normally not subject to regular federal income taxation, the
attractiveness of municipal securities in relation to other
investment alternatives is affected by changes in federal income
tax rates or changes in the tax-exempt status of interest income
from municipal securities. Any proposed or actual changes in
such rates or exempt status, therefore, can significantly affect
the demand for and supply, liquidity and marketability of
municipal securities.
27 Invesco
Van Kampen Trust for Investment Grade New York
Municipals
This could in turn affect the Fund’s net asset value and
ability to acquire and dispose of municipal securities at
desirable yield and price levels. Additionally, the Fund may not
be a suitable investment for individual retirement accounts, for
other tax-exempt or tax-deferred accounts or for investors who
are not sensitive to the federal income tax consequences of
their investments.
The Fund may invest all or a substantial portion of
its total assets in municipal securities subject to the federal
alternative minimum tax. Accordingly, an investment in the Fund
could cause shareholders to be subject to (or result in an
increased liability under) the federal alternative minimum tax.
As a result, the Fund may not be a suitable investment for
investors who are already subject to the federal alternative
minimum tax or who could become subject to the federal
alternative minimum tax as a result of an investment in the Fund.
Subsequent to the Fund’s acquisition of a
municipal security, the security may be determined to pay, or to
have paid, taxable income. As a result, the treatment of
dividends previously paid or to be paid by the Fund as
“exempt-interest dividends” could be adversely
affected, subjecting the Fund’s shareholders to increased
federal income tax liabilities.
For federal income tax purposes, distributions of
ordinary taxable income (including any net short-term capital
gain) will be taxable to shareholders as ordinary income (and
not eligible for favorable taxation as “qualified dividend
income”), and capital gain dividends will be taxed at
long-term capital gain rates. In certain circumstances, the Fund
will make payments to holders of Preferred Shares to offset the
tax effects of a taxable distribution.
Generally, to the extent the Fund’s
distributions are derived from interest on municipal securities
of a particular state (and, in some cases qualifying obligations
of U.S. territories and possessions), its distributions are
exempt from the personal income tax of that state. In some
cases, the Fund’s shares may (to the extent applicable)
also be exempt from personal property taxes of such state.
However, some states require that the Fund meet certain
thresholds with respect to the portion of its portfolio
consisting of municipal securities of such state in order for
such exemption to apply.
Risks of Using Derivative Instruments. A
derivative instrument often has risks similar to its underlying
instrument and may have additional risks, including imperfect
correlation between the value of the derivative and the
underlying instrument or instrument being hedged, risks of
default by the other party to certain transactions,
magnification of losses incurred due to changes in the market
value of the securities, instruments, indices or interest rates
to which they relate, and risks that the derivatives may not be
liquid. The use of derivatives involves risks that are different
from, and potentially greater than, the risks associated with
other portfolio investments. Derivatives may involve the use of
highly specialized instruments that require investment
techniques and risk analyses different from those associated
with other portfolio investments. Certain derivative
transactions may give rise to a form of leverage. Leverage
associated with derivative transactions may cause the Fund to
liquidate portfolio positions when it may not be advantageous to
do so to satisfy its obligations or to meet earmarking or
segregation requirements, pursuant to applicable SEC rules and
regulations, or may cause the Fund to be more volatile than if
the Fund had not been leveraged. The Fund could suffer losses
related to its derivative positions as a result of unanticipated
market movements, which losses may potentially be unlimited.
Although the Adviser may seek to use derivatives to further the
Fund’s investment objective, the Fund is not required to
use derivatives and may choose not to do so and there is no
assurance that the use of derivatives will achieve this result.
Counterparty Risk. The Fund will be
subject to credit risk with respect to the counterparties to the
derivative transactions entered into by the Fund. If a
counterparty becomes bankrupt or otherwise fails to perform its
obligations under a derivative contract due to financial
difficulties, the Fund may experience significant delays in
obtaining any recovery under the derivative contract in
bankruptcy or other reorganization proceeding. The Fund may
obtain only a limited recovery or may obtain no recovery in such
circumstances.
Futures Risk. A decision as to whether,
when and how to use futures involves the exercise of skill and
judgment and even a well-conceived futures transaction may be
unsuccessful because of market behavior or unexpected events. In
addition to the derivatives risks discussed above, the prices of
futures can be highly volatile, using futures can lower total
return, and the potential loss from futures can exceed the
Fund’s initial investment in such contracts.
Swaps Risk. Swap agreements are not
entered into or traded on exchanges and there is no central
clearing or guaranty function for swaps. Therefore, swaps are
subject to credit risk or the risk of default or non-performance
by the counterparty. Swaps could result in losses if interest
rate or credit quality changes are not correctly anticipated by
the Fund or if the reference index, security or investments do
not perform as expected.
Tax Risk. The use of derivatives may
generate taxable income. In addition, the Fund’s use of
derivatives may be limited by the requirements for taxation as a
regulated investment company or the Fund’s intention to pay
dividends that are exempt from federal and New York State and
New York City income taxes. The tax treatment of derivatives may
be adversely affected by changes in legislation, regulations or
other legal authority, subjecting the Fund’s shareholders
to increased federal income tax liabilities.
Inverse Floating Rate Obligations
Risk. Like most other fixed-income securities, the
value of inverse floating rate obligations will decrease as
interest rates increase. They are more volatile, however, than
most other fixed-income securities because the coupon rate on an
inverse floating rate obligation typically changes at a multiple
of the change in the relevant index rate. Thus, any rise in the
index rate (as a consequence of an increase in interest rates)
causes a correspondingly greater drop in the coupon rate of an
inverse floating rate obligation while a drop in the index rate
causes a correspondingly greater increase in the coupon of an
inverse floating rate obligation. Some inverse floating rate
obligations may also increase or decrease substantially because
of changes in the rate of prepayments. Inverse floating rate
obligations tend to underperform the market for fixed rate bonds
in a rising interest rate environment, but tend to outperform
the market for fixed rate bonds when interest rates decline or
remain relatively stable. Inverse floating rate obligations have
varying degrees of liquidity.
The Fund generally invests in inverse floating rate
obligations that include embedded leverage, thus exposing the
Fund to greater risks and increased costs. The market value of
“leveraged” inverse floating rate obligations
generally will fluctuate in response to changes in market rates
of interest to a greater extent than the value of an unleveraged
investment. The extent of increases and decreases in the value
of inverse floating rate obligations generally will be larger
than changes in an equal principal amount of a fixed rate
security having similar credit quality, redemption provisions
and maturity, which may cause the Fund’s net asset value to
be more volatile than if it had not invested in inverse floating
rate obligations.
In certain instances, the short-term floating rate
interests created by a special purpose trust may not be able to
be sold to third parties or, in the case of holders tendering
(or putting) such interests for repayment of principal, may not
be able to be remarketed to third parties. In such cases, the
special purpose trust holding the long-term fixed rate bonds may
be collapsed. In the case of inverse floating rate obligations
created by the Fund, the Fund would then be
28 Invesco
Van Kampen Trust for Investment Grade New York
Municipals
required to repay the principal amount of the tendered
securities. During times of market volatility, illiquidity or
uncertainty, the Fund could be required to sell other portfolio
holdings at a disadvantageous time to raise cash to meet that
obligation.
The use of short-term floating rate obligations may
require the Fund to segregate or earmark cash or liquid assets
to cover its obligations. Securities so segregated or earmarked
will be unavailable for sale by the Fund (unless replaced by
other securities qualifying for segregation requirements), which
may limit the Fund’s flexibility and may require that the
Fund sell other portfolio investments at a time when it may be
disadvantageous to sell such assets.
Risks of Investing in Lower-Grade
Securities. Securities that are in the lower-grade
categories generally offer higher yields than are offered by
higher-grade securities of similar maturities, but they also
generally involve greater risks, such as greater credit risk,
market risk, volatility and liquidity risk. In addition, the
amount of available information about the financial condition of
certain lower-grade issuers may be less extensive than other
issuers, making the Fund more dependent on the Adviser’s
credit analysis than a fund investing only in higher-grade
securities. To minimize the risks involved in investing in
lower-grade securities, the Fund does not purchase securities
that are in default or rated in categories lower than B- by
S&P or B3 by Moody’s or unrated securities of
comparable quality.
Secondary market prices of lower-grade securities
generally are less sensitive than higher-grade securities to
changes in interest rates and are more sensitive to general
adverse economic changes or specific developments with respect
to the particular issuers. A significant increase in interest
rates or a general economic downturn may significantly affect
the ability of municipal issuers of lower-grade securities to
pay interest and to repay principal, or to obtain additional
financing, any of which could severely disrupt the market for
lower-grade municipal securities and adversely affect the market
value of such securities. Such events also could lead to a
higher incidence of default by issuers of lower-grade
securities. In addition, changes in credit risks, interest
rates, the credit markets or periods of general economic
uncertainty can be expected to result in increased volatility in
the price of the lower-grade securities and the net asset value
of the Fund. Adverse publicity and investor perceptions, whether
or not based on rational analysis, may affect the value,
volatility and liquidity of lower-grade securities.
In the event that an issuer of securities held by
the Fund experiences difficulties in the timely payment of
principal and interest and such issuer seeks to restructure the
terms of its borrowings, the Fund may incur additional expenses
and may determine to invest additional assets with respect to
such issuer or the project or projects to which the Fund’s
securities relate. Further, the Fund may incur additional
expenses to the extent that it is required to seek recovery upon
a default in the payment of interest or the repayment of
principal on its portfolio holdings and the Fund may be unable
to obtain full recovery on such amounts.
Investments in debt obligations that are at risk of
or in default present special tax issues for the Fund. Federal
income tax rules are not entirely clear about issues such as
when the Fund may cease to accrue interest, original issue
discount or market discount, when and to what extent deductions
may be taken for bad debts or worthless securities, how payments
received on obligations in default should be allocated between
principal and interest and whether certain exchanges of debt
obligations in a workout context are taxable. These and other
issues will be addressed by the Fund, in the event it invests in
or holds such securities, in order to seek to ensure that it
distributes sufficient income to preserve its status as a
regulated investment company.
Liquidity Risk. Liquidity relates to the
ability of a fund to sell a security in a timely manner at a
price which reflects the value of that security. The amount of
available information about the financial condition of municipal
securities issuers is generally less extensive than that for
corporate issuers with publicly traded securities, and the
market for municipal securities is generally considered to be
less liquid than the market for corporate debt obligations.
Certain municipal securities in which the Fund may invest, such
as special obligation bonds, lease obligations, participation
certificates and variable rate instruments, may be particularly
less liquid. To the extent the Fund owns or may acquire illiquid
or restricted securities, these securities may involve special
registration requirements, liabilities and costs, and liquidity
and valuation difficulties.
The effects of adverse publicity and investor
perceptions may be more pronounced for securities for which no
established retail market exists as compared with the effects on
securities for which such a market does exist. An economic
downturn or an increase in interest rates could severely disrupt
the market for such securities and adversely affect the value of
outstanding securities or the ability of the issuers to repay
principal and interest. Further, the Fund may have more
difficulty selling such securities in a timely manner and at
their stated value than would be the case for securities for
which an established retail market does exist.
The markets for lower-grade securities may be less
liquid than the markets for higher-grade securities. To the
extent that there is no established retail market for some of
the lower-grade securities in which the Fund may invest, trading
in such securities may be relatively inactive. Prices of
lower-grade securities may decline rapidly in the event a
significant number of holders decide to sell. Changes in
expectations regarding an individual issuer of lower-grade
securities generally could reduce market liquidity for such
securities and make their sale by the Fund at their current
valuation more difficult.
From time to time, the Fund’s investments may
include securities as to which the Fund, by itself or together
with other funds or accounts managed by the Adviser, holds a
major portion or all of an issue of municipal securities.
Because there may be relatively few potential purchasers for
such investments and, in some cases, there may be contractual
restrictions on resales, the Fund may find it more difficult to
sell such securities at a time when the Adviser believes it is
advisable to do so.
Preferred Shares Risk. The
Fund’s use of leverage through Preferred Shares may result
in higher volatility of the net asset value of the Common
Shares, and fluctuations in the dividend rates on the Preferred
Shares (which are expected to reflect yields on short term
municipal securities) may affect the yield to the Common
Shareholders. So long as the Fund is able to realize a higher
net return on its investment portfolio than the then current
dividend rate of the Preferred Shares, the effect of the
leverage provided by the Preferred Shares will be to cause the
Common Shareholders to realize a higher current rate of return
than if the Fund were not so leveraged. On the other hand, to
the extent that the then current dividend rate on the Preferred
Shares approaches the net return on the Fund’s investment
portfolio, the benefit of leverage to the Common Shareholders
will be reduced, and if the then current dividend rate on the
Preferred Shares were to exceed the net return on the
Fund’s portfolio, the Fund’s leveraged capital
structure would result in a lower rate of return to the Common
Shareholders than if the Fund were not so structured.
Similarly, because any decline in the net asset
value of the Fund’s investments will be borne entirely by
the Common Shareholders, the effect of leverage in a declining
market would result in a greater decrease in net asset value to
the Common Shareholders than if the Fund were not so leveraged.
Any such decrease would likely be reflected in a decline in the
market price for Common Shares. If the Fund’s current
investment income were not sufficient to meet dividend
29 Invesco
Van Kampen Trust for Investment Grade New York
Municipals
requirements on the Preferred Shares, the Fund might have to
liquidate certain of its investments in order to meet required
dividend payments, thereby reducing the net asset value
attributable to the Fund’s Common Shares.
The amount of Preferred Shares outstanding from time
to time may vary, depending on the Adviser’s analysis of
conditions in the municipal securities market and interest rate
movements. Management of the amount of outstanding Preferred
Shares places greater reliance on the ability of the Adviser to
predict trends in interest rates than if the Fund did not use
leverage. In the event the Adviser later determines that all or
a portion of such Preferred Shares should be reissued so as to
increase the amount of leverage, no assurance can be given that
the Fund will subsequently be able to reissue Preferred Shares
on terms
and/or with
dividend rates that are beneficial to the Common Shareholders.
Further, redemption and reissuance of the Preferred Shares, and
any related trading of the Fund’s portfolio securities,
results in increased transaction costs to the Fund and its
Common Shareholders. Because the Common Shareholders bear these
expenses, changes to the Fund’s outstanding leverage and
any losses resulting from related portfolio trading will have a
proportionately larger impact on the Common Shares’ net
asset value and market price.
In addition, the Fund is not permitted to declare
any cash dividend or other distribution on its Common Shares
unless, at the time of such declaration, the Fund has an asset
coverage of at least 200% (determined after deducting the amount
of such dividend or distribution). This prohibition on the
payment of dividends or other distributions might impair the
ability of the Fund to maintain its qualification as a regulated
investment company for federal income tax purposes. The Fund
intends, however, to the extent possible, to purchase or redeem
Preferred Shares from time to time to maintain an asset coverage
of the Preferred Shares of at least 200%.
If a determination were made by the IRS to treat the
Preferred Shares as debt rather than equity for
U.S. federal income tax purposes, the Common Shareholders
might be subject to increased federal income tax liabilities.
Unrated Securities Risk. Many
lower-grade securities are not listed for trading on any
national securities exchange, and many issuers of lower-grade
securities choose not to have a rating assigned to their
obligations by any NRSRO. As a result, the Fund’s portfolio
may consist of a higher portion of unlisted or unrated
securities as compared with an investment company that invests
solely in higher-grade, listed securities. Unrated securities
are usually not as attractive to as many buyers as are rated
securities, a factor which may make unrated securities less
marketable. These factors may limit the ability of the Fund to
sell such securities at their fair value. The Fund may be more
reliant on the Adviser’s judgment and analysis in
evaluating the creditworthiness of an issuer of unrated
securities.
When-Issued and Delayed Delivery
Risks. When-issued and delayed delivery transactions
are subject to market risk as the value or yield of a security
at delivery may be more or less than the purchase price or the
yield generally available on securities when delivery occurs. In
addition, the Fund is subject to counterparty risk because it
relies on the buyer or seller, as the case may be, to consummate
the transaction, and failure by the other party to complete the
transaction may result in the Fund missing the opportunity of
obtaining a price or yield considered to be advantageous.
Zero Coupon/PIK Bond Risk. Prices on
non-cash-paying instruments may be more sensitive to changes in
the issuer’s financial condition, fluctuations in interest
rates and market demand/supply imbalances than cash-paying
securities with similar credit ratings, and thus may be more
speculative than are securities that pay interest periodically
in cash. These securities may subject the Fund to greater market
risk than a fund that does not own these types of securities.
Special tax considerations are associated with investing in
non-cash-paying instruments, such as zero coupon or PIK
securities. The Adviser will weigh these concerns against the
expected total returns from such instruments.
Special Risk Considerations Regarding New York
Municipal Securities. The Fund invests substantially
all of its assets in a portfolio of New York municipal
securities. Because the Fund invests substantially all of its
assets in a portfolio of New York municipal securities, the Fund
is more susceptible to political, economic, regulatory or other
factors affecting issuers of New York municipal securities than
a fund which does not limit its investments to such issuers.
These risks include possible legislative, state constitutional
or regulatory amendments that may affect the ability of state
and local governments or regional governmental authorities to
raise money to pay principal and interest on their municipal
securities. Economic, fiscal and budgetary conditions throughout
the state may also influence the Fund’s performance.
30 Invesco
Van Kampen Trust for Investment Grade New York
Municipals
Trustees
and Officers
The address of each trustee and
officer is 1555 Peachtree, N.E., Atlanta, Georgia 30309.
Generally, each trustee serves for a three year term or until
his or her successor has been duly elected and qualified, and
each officer serves for a one year term or until his or her
successor has been duly elected and qualified. Column two below
includes length of time served with predecessor entities, if any.
|
Number of |
||||||||
|
Funds in |
||||||||
|
Fund Complex |
||||||||
|
Name, Year of
Birth and |
Trustee and/ |
Principal
Occupation(s) |
Overseen by |
Other
Directorship(s) |
||||
| Position(s) Held with the Fund | or Officer Since | During Past 5 Years | Trustee | Held by Trustee | ||||
|
Interested
Persons
|
||||||||
|
Colin Meadows — 1971
Trustee, President and Principal Executive Officer |
2010 | Chief Administrative Officer, Invesco Advisers, Inc., since 2006; Prior to 2006, Senior Vice President of business development and mergers and acquisitions at GE Consumer Finance; Prior to 2005, Senior Vice President of strategic planning and technology at Wells Fargo Bank; From 1996 to 2003, associate principal with McKinsey & Company, focusing on the financial services and venture capital industries, with emphasis in banking and asset management sectors. | 18 | None | ||||
|
Wayne W.
Whalen1 —
1939
Trustee and Chair |
1992 | Of Counsel, and prior to 2010, partner in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP, legal counsel to funds in the Fund Complex | 158 | Director of the Abraham Lincoln Presidential Library Foundation | ||||
|
Independent
Trustees
|
||||||||
|
David C. Arch — 1945
Trustee |
1992 | Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer. | 158 | Member of the Heartland Alliance Advisory Board, a nonprofit organization serving human needs based in Chicago. Board member of the Illinois Manufacturers’ Association. Member of the Board of Visitors, Institute for the Humanities, University of Michigan | ||||
|
Jerry D. Choate — 1938
Trustee |
2003 | From 1995 to 1999, Chairman and Chief Executive Officer of the Allstate Corporation (“Allstate”) and Allstate Insurance Company. From 1994 to 1995, President and Chief Executive Officer of Allstate. Prior to 1994, various management positions at Allstate. | 18 | Trustee/Director/Managing General Partner of funds in the Fund Complex. Director since 1998 and member of the governance and nominating committee, executive committee, compensation and management development committee and equity award committee, of Amgen Inc., a biotechnological company. Director since 1999 and member of the nominating and governance committee and compensation and executive committee, of Valero Energy Corporation, a crude oil refining and marketing company. Previously, from 2006 to 2007, Director and member of the compensation committee and audit committee, of H&R Block, a tax preparation services company. | ||||
|
Rodney F. Dammeyer — 1940
Trustee |
1992 |
Chairman of CAC, LLC, a private company offering capital investment and management advisory services.
Formerly: Prior to January 2004, Director of TeleTech Holdings Inc.; Prior to 2002, Director of Arris Group, Inc.; Prior to 2001, Managing Partner at Equity Group Corporate Investments. Prior to 1995, Vice Chairman of Anixter International. Prior to 1985, experience includes Senior Vice President and Chief Financial Officer of Household International, Inc, Executive Vice President and Chief Financial Officer of Northwest Industries, Inc. and Partner of Arthur Andersen & Co. |
158 | Director of Quidel Corporation and Stericycle, Inc. Prior to May 2008, Trustee of The Scripps Research Institute. Prior to February 2008, Director of Ventana Medical Systems, Inc. Prior to April 2007, Director of GATX Corporation. Prior to April 2004, Director of TheraSense, Inc. | ||||
|
Linda Hutton Heagy — 1948
Trustee |
2003 | Prior to June 2008, Managing Partner of Heidrick & Struggles, the second largest global executive search firm, and from 2001-2004, Regional Managing Director of U.S. operations at Heidrick & Struggles. Prior to 1997, Managing Partner of Ray & Berndtson, Inc., an executive recruiting firm. Prior to 1995, Executive Vice President of ABN AMRO, N.A., a bank holding company, with oversight for treasury management operations including all non-credit product pricing. Prior to 1990, experience includes Executive Vice President of The Exchange National Bank with oversight of treasury management including capital markets operations, Vice President of Northern Trust Company and an Associate at Price Waterhouse. | 18 | Trustee/Director/Managing General Partner of funds in the Fund Complex. Prior to 2010, Trustee on the University of Chicago Medical Center Board, Vice Chair of the Board of the YMCA of Metropolitan Chicago and a member of the Women’s Board of the University of Chicago. | ||||
|
R. Craig Kennedy — 1952
Trustee |
2003 | Director and President of the German Marshall Fund of the United States, an independent U.S. foundation created to deepen understanding, promote collaboration and stimulate exchanges of practical experience between Americans and Europeans. Formerly, advisor to the Dennis Trading Group Inc., a managed futures and option company that invests money for individuals and institutions. Prior to 1992, President and Chief Executive Officer, Director and member of the Investment Committee of the Joyce Foundation, a private foundation. | 18 | Trustee/Director/Managing General Partner of funds in the Fund Complex. Director of First Solar, Inc. | ||||
| 1 | Mr. Whalen is considered an “interested person” (within the meaning of Section 2(a)(19) of the 1940 Act) of certain Funds in the Fund Complex by reason of he and his firm currently providing legal services as legal counsel to such Funds in the Fund Complex. |
T-1 Invesco
Van Kampen Trust for Investment Grade New York
Municipals
Trustees
and
Officers—(continued)
The address of each trustee and
officer is 1555 Peachtree, N.E., Atlanta, Georgia 30309.
Generally, each trustee serves for a three year term or until
his or her successor has been duly elected and qualified, and
each officer serves for a one year term or until his or her
successor has been duly elected and qualified. Column two below
includes length of time served with predecessor entities, if any.
|
Number of |
||||||||
|
Funds in |
||||||||
|
Fund Complex |
||||||||
|
Name, Year of
Birth and |
Trustee and/ |
Principal
Occupation(s) |
Overseen by |
Other
Directorship(s) |
||||
| Position(s) Held with the Fund | or Officer Since | During Past 5 Years | Trustee | Held by Trustee | ||||
|
Independent
Trustees
|
||||||||
|
Howard J Kerr — 1935
Trustee |
1992 | Retired. Previous member of the City Council and Mayor of Lake Forest, Illinois from 1988 through 2002. Previous business experience from 1981 through 1996 includes President and Chief Executive Officer of Pocklington Corporation, Inc., an investment holding company, President and Chief Executive Officer of Grabill Aerospace, and President of Custom Technologies Corporation. United States Naval Officer from 1960 through 1981, with responsibilities including Commanding Officer of United States Navy destroyers and Commander of United States Navy Destroyer Squadron Thirty-Three, White House experience in 1973 through 1975 as military aide to Vice Presidents Agnew and Ford and Naval Aid to President Ford, and Military Fellow on the Council of Foreign Relations in 1978-through 1979. | 18 | Trustee/Director/Managing General Partner of funds in the Fund Complex. Director of the Lake Forest Bank & Trust. Director of the Marrow Foundation. | ||||
|
Jack E. Nelson — 1936
Trustee |
2003 | President of Nelson Investment Planning Services, Inc., a financial planning company and registered investment adviser in the State of Florida. President of Nelson Ivest Brokerage Services Inc., a member of the Financial Industry Regulatory Authority (“FINRA”), Securities Investors Protection Corp. and the Municipal Securities Rulemaking Board. President of Nelson Sales and Services Corporation, a marketing and services company to support affiliated companies. | 18 | Trustee/Director/Managing General Partner of funds in the Fund Complex. | ||||
|
Hugo F. Sonnenschein — 1940
Trustee |
1994 | Distinguished Service Professor and President Emeritus of the University of Chicago and the Adam Smith Distinguished Service Professor in the Department of Economics at the University of Chicago. Prior to July 2000, President of the University of Chicago. | 158 | Trustee of the University of Rochester and a member of its investment committee. Member of the National Academy of Sciences, the American Philosophical Society and a fellow of the American Academy of Arts and Sciences | ||||
|
Suzanne H. Woolsey, Ph.D. — 1941 Trustee
|
2003 | Chief Communications Officer of the National Academy of Sciences and Engineering and Institute of Medicine/National Research Council, an independent, federally chartered policy institution, from 2001 to November 2003 and Chief Operating Officer from 1993 to 2001. Executive Director of the Commission on Behavioral and Social Sciences and Education at the National Academy of Sciences/National Research Council from 1989 to 1993. Prior to 1980, experience includes Partner of Coopers & Lybrand (from 1980 to 1989), Associate Director of the US Office of Management and Budget (from 1977 to 1980) and Program Director of the Urban Institute (from 1975 to 1977). | 18 | Trustee/Director/Managing General Partner of funds in the Fund Complex. Independent Director and audit committee chairperson of Changing World Technologies, Inc., an energy manufacturing company, since July 2008. Independent Director and member of audit and governance committees of Fluor Corp., a global engineering, construction and management company, since January 2004. Director of Intelligent Medical Devices, Inc., a private company which develops symptom-based diagnostic tools for viral respiratory infections. Advisory Board member of ExactCost LLC, a private company providing activity-based costing for hospitals, laboratories, clinics, and physicians, since 2008. Chairperson of the Board of Trustees of the Institute for Defense Analyses, a federally funded research and development center, since 2000. Trustee from 1992 to 2000 and 2002 to present, current chairperson of the finance committee, current member of the audit committee, strategic growth committee and executive committee, and former Chairperson of the Board of Trustees (from 1997 to 1999), of the German Marshall Fund of the United States, a public foundation. Lead Independent Trustee of the Rocky Mountain Institute, a non-profit energy and environmental institute; Trustee since 2004. Chairperson of the Board of Trustees of the Colorado College; Trustee since 1995. Trustee of California Institute of Technology. Previously, Independent Director and member of audit committee and governance committee of Neutrogena Corporation from 1998 to 2006; and Independent Director of Arbros Communications from 2000 to 2002 | ||||
T-2 Invesco
Van Kampen Trust for Investment Grade New York
Municipals
Trustees
and
Officers—(continued)
The address of each trustee and
officer is 1555 Peachtree, N.E., Atlanta, Georgia 30309.
Generally, each trustee serves for a three year term or until
his or her successor has been duly elected and qualified, and
each officer serves for a one year term or until his or her
successor has been duly elected and qualified. Column two below
includes length of time served with predecessor entities, if any.
|
Number of |
||||||||
|
Funds in |
||||||||
|
Fund Complex |
||||||||
|
Name, Year of
Birth and |
Trustee and/ |
Principal
Occupation(s) |
Overseen by |
Other
Directorship(s) |
||||
| Position(s) Held with the Fund | or Officer Since | During Past 5 Years | Trustee | Held by Trustee | ||||
|
Other
Officers
|
||||||||
|
John M. Zerr — 1962
Senior Vice President, Chief Legal Officer and Secretary |
2010 | Director, Senior Vice President, Secretary and General Counsel, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.) and Van Kampen Exchange Corp.; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Senior Vice President and Secretary, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Vice President and Secretary, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.); Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The Invesco Funds; Manager, Invesco PowerShares Capital Management LLC; Director, Secretary and General Counsel, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Secretary and General Counsel, Van Kampen Funds Inc. and Chief Legal Officer, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust | N/A | N/A | ||||
| Formerly: Director and Secretary, Van Kampen Advisors Inc.; Director Vice President, Secretary and General Counsel Van Kampen Investor Services Inc.; Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; and Van Kampen Investments Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company) | ||||||||
|
Karen Dunn Kelley — 1960
Vice President |
2010 | Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.) and Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Invesco Mortgage Capital Inc.; Vice President, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); and President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only). | N/A | N/A | ||||
| Formerly: Senior Vice President, Van Kampen Investments Inc.; Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Advisers, Inc. and The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only) | ||||||||
|
Sheri Morris — 1964
Vice President, Principal Financial Officer and Treasurer |
2010 | Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser). | N/A | N/A | ||||
| Formerly: Treasurer, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust, Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The Invesco Funds and Assistant Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc. | ||||||||
T-3 Invesco
Van Kampen Trust for Investment Grade New York
Municipals
Trustees
and
Officers—(continued)
The address of each trustee and
officer is 1555 Peachtree, N.E., Atlanta, Georgia 30309.
Generally, each trustee serves for a three year term or until
his or her successor has been duly elected and qualified, and
each officer serves for a one year term or until his or her
successor has been duly elected and qualified. Column two below
includes length of time served with predecessor entities, if any.
|
Number of |
||||||||
|
Funds in |
||||||||
|
Fund Complex |
||||||||
|
Name, Year of
Birth and |
Trustee and/ |
Principal
Occupation(s) |
Overseen by |
Other
Directorship(s) |
||||
| Position(s) Held with the Fund | or Officer Since | During Past 5 Years | Trustee | Held by Trustee | ||||
|
Other
Officers
|
||||||||
|
Yinka Akinsola — 1977
Anti-Money Laundering Compliance Officer |
2012 | Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.), The Invesco Funds, Invesco Van Kampen Closed-End Funds, Van Kampen Funds Inc., PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust, and PowerShares Actively Managed Exchange-Traded Fund Trust | N/A | N/A | ||||
|
Valinda Arnett-Patton — 1959
Chief Compliance Officer |
2011 | Chief Compliance Officer, Invesco Van Kampen Closed-End Funds. | N/A | N/A | ||||
|
Office of the Fund 1555 Peachtree Street, N.E. Atlanta, GA 30309 |
Investment Adviser Invesco Advisers, Inc. 1555 Peachtree Street, N.E. Atlanta, GA 30309 |
Auditors PricewaterhouseCoopers LLP 1201 Louisiana Street, Suite 2900 Houston, TX 77002-5678 |
Custodian State Street Bank and Trust Company 225 Franklin Boston, MA 02110-2801 |
|||
|
Counsel to the Fund Skadden, Arps, Slate, Meagher & Flom LLP 155 North Wacker Drive Chicago, IL 60606 |
Transfer Agent Computershare Trust Company, N.A. P.O. Box 43078 Providence, RI 02940-3078 |
T-4 Invesco
Van Kampen Trust for Investment Grade New York
Municipals
Correspondence information
Send general correspondence to Computershare, P.O. Box 43078, Providence, RI 02940-3078.
Invesco privacy policy
You share personal and financial information with us that is necessary for your
transactions and your account records. We take very seriously the obligation to keep that information confidential and
private.
Invesco collects nonpublic personal
information about you from account applications or other forms you complete and from your transactions with us or our
affiliates. We do not disclose information about you or our former customers to service providers or other third parties
except to the extent necessary to service your account and in other limited circumstances as permitted by law. For example,
we use this information to facilitate the delivery of transaction confirmations, financial reports, prospectuses and
tax forms.
Even within Invesco, only people
involved in the servicing of your accounts and compliance monitoring have access to your information. To ensure the highest
level of confidentiality and security, Invesco maintains physical, electronic and procedural safeguards that meet or
exceed federal standards. Special measures, such as data encryption and authentication, apply to your communications with
us on our website. More detail is available to you at invesco.com/privacy.
Trust holdings and proxy voting information
The Trust provides a complete list of its holdings four times in each fiscal
year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Trust’s semiannual and annual
reports to shareholders. For the first and third quarters, the Trust files the lists with the Securities and Exchange
Commission (SEC) on Form N-Q. Shareholders can also look up the Trust’s Forms N-Q on the SEC website at sec.gov. Copies of
the Trust’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain
information on the operation of the Public Reference Room, including information about duplicating fee charges, by
calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov.
The SEC file number for the Trust is 811-06537.
A description of the policies and procedures that
the Trust uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request,
from our Client Services department at 800 341 2929 or at invesco.com/proxyguidelines. The information is also available on
the SEC website, sec.gov.
Information regarding how the Trust voted proxies
related to its portfolio securities during the 12 months ended June 30, 2011, is available at invesco.com/proxysearch. In
addition, this information is available on the SEC website at sec.gov.
|
 |
|
Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional
clients and does not sell securities. Invesco Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail
mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of
Invesco Ltd.
|
VK-CE-IGNYM-AR-1
|
Invesco Distributors, Inc. |
ITEM 2. CODE OF ETHICS.
As of the end of the period covered by this report, the Registrant had adopted a code
of ethics (the “Code”) that applies to the Registrant’s principal executive officer
(“PEO”) and principal financial officer (“PFO”). There were no amendments to the Code
during the period covered by the report. The Registrant did not grant any waivers,
including implicit waivers, from any provisions of the Code to the PEO or PFO during
the period covered by this report.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The Board of Trustees has determined that the Registrant has at least one audit committee
financial expert serving on its Audit Committee. The Audit Committee financial experts are
Jerry D. Choate, Linda Hutton Heagy and R. Craig Kennedy. Jerry D. Choate, Linda Hutton
Heagy and R. Craig Kennedy are “independent” within the meaning of that term as used in
Form N-CSR.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Fees Billed by PWC Related to the Registrant
PWC billed the Registrant aggregate fees for services rendered to the Registrant for the last
two fiscal years as follows:
| Percentage of Fees Billed | Percentage of Fees Billed | ||||||||||||||||||
| Applicable to Non-Audit | Applicable to Non-Audit | ||||||||||||||||||
| Fees Billed for | Services Provided for | Fees Billed for | Services Provided for | ||||||||||||||||
| Services Rendered | fiscal year end 2/29/2012 | Services Rendered | fiscal year end 2/28/2011 | ||||||||||||||||
| to the Registrant | Pursuant to Waiver of | to the Registrant | Pursuant to Waiver of | ||||||||||||||||
| for fiscal year end | Pre-Approval | for fiscal year end | Pre-Approval | ||||||||||||||||
| 2/29/2012 | Requirement(1) | 2/28/2011 | Requirement(1) | ||||||||||||||||
Audit Fees |
$ | 36,300 | N/A | $ | 19,250 | N/A | |||||||||||||
Audit-Related
Fees(2) |
$ | 5,000 | 0 | % | $ | 4,000 | 0 | % | |||||||||||
Tax Fees(3) |
$ | 5,900 | 0 | % | $ | 2,300 | 0 | % | |||||||||||
All Other Fees(4) |
$ | 0 | 0 | % | $ | 1,667 | 0 | % | |||||||||||
Total Fees |
$ | 47,200 | 0 | % | $ | 27,217 | 0 | % | |||||||||||
PWC billed the Registrant aggregate non-audit fees of $10,900 for the fiscal year ended February 29, 2012, and $7,967 for the fiscal year ended
February 28, 2011, for non-audit services rendered to the Registrant.
| (1) | With respect to the provision of non-audit services, the pre-approval requirement is waived pursuant to a de minimis exception if (i) such services were not recognized as non-audit services by the Registrant at the time of engagement, (ii) the aggregate amount of all such services provided is no more than 5% of the aggregate audit and non-audit fees paid by the Registrant to PWC during a fiscal year; and (iii) such services are promptly brought to the attention of the Registrant’s Audit Committee and approved by the Registrant’s Audit Committee prior to the completion of the audit. | |
| (2) | Audit-Related fees for the fiscal year end February 29, 2012 includes fees billed for agreed upon procedures related to auction rate preferred securities. Audit-Related fees for the fiscal year end February 28, 2011 includes fees billed for agreed upon procedures related to auction rate preferred securities. | |
| (3) | Tax fees for the fiscal year end February 29, 2012 includes fees billed for reviewing tax returns. Tax fees for the fiscal year end February 28, 2011 includes fees billed for reviewing tax returns. | |
| (4) | All Other fees for the fiscal year end February 28, 2011 includes fees billed for completing professional services related to benchmark analysis. |
Fees Billed by PWC Related to Invesco and Invesco Affiliates
PWC billed Invesco Advisers, Inc. (“Invesco”), the Registrant’s adviser, and any entity
controlling, controlled by or under common control with Invesco that provides ongoing services to
the Registrant (“Invesco Affiliates”) aggregate fees for pre-approved non-audit services rendered
to Invesco and Invesco Affiliates for the last two fiscal years as follows:
| Fees Billed for | Fees Billed for | |||||||||||||||
| Non-Audit Services | Non-Audit Services | |||||||||||||||
| Rendered to Invesco | Rendered to Invesco | |||||||||||||||
| and Invesco | and Invesco | |||||||||||||||
| Affiliates for | Percentage of Fees Billed | Affiliates for | Percentage of Fees Billed | |||||||||||||
| fiscal year end | Applicable to Non-Audit | fiscal year end | Applicable to Non-Audit | |||||||||||||
| 2/29/2012 That Were | Services Provided for | 2/28/2011 That Were | Services Provided for | |||||||||||||
| Required | fiscal year end 2/29/2012 | Required | fiscal year end 2/28/2011 | |||||||||||||
| to be Pre-Approved | Pursuant to Waiver of | to be Pre-Approved | Pursuant to Waiver of | |||||||||||||
| by the Registrant’s | Pre-Approval | by the Registrant’s | Pre-Approval | |||||||||||||
| Audit Committee | Requirement(1) | Audit Committee | Requirement(1) | |||||||||||||
Audit-Related Fees |
$ | 0 | 0 | % | $ | 0 | 0 | % | ||||||||
Tax Fees |
$ | 0 | 0 | % | $ | 0 | 0 | % | ||||||||
All Other Fees |
$ | 0 | 0 | % | $ | 0 | 0 | % | ||||||||
Total Fees(2) |
$ | 0 | 0 | % | $ | 0 | 0 | % | ||||||||
| (1) | With respect to the provision of non-audit services, the pre-approval requirement is waived pursuant to a de minimis exception if (i) such services were not recognized as non-audit services by the Registrant at the time of engagement, (ii) the aggregate amount of all such services provided is no more than 5% of the aggregate audit and non-audit fees paid by the Registrant, Invesco and Invesco Affiliates to PWC during a fiscal year; and (iii) such services are promptly brought to the attention of the Registrant’s Audit Committee and approved by the Registrant’s Audit Committee prior to the completion of the audit. | |
| (2) | Including the fees for services not required to be pre-approved by the registrant’s audit committee, PWC billed Invesco and Invesco Affiliates aggregate non-audit fees of $0 for the fiscal year ended February 29, 2012, and $0 for the fiscal year ended February 28, 2011, for non-audit services rendered to Invesco and Invesco Affiliates. | |
| The Audit Committee also has considered whether the provision of non-audit services that were rendered to Invesco and Invesco Affiliates that were not required to be pre-approved pursuant to SEC regulations, if any, is compatible with maintaining PWC’s independence. To the extent that such services were provided, the Audit Committee determined that the provision of such services is compatible with PWC maintaining independence with respect to the Registrant. |
PRE-APPROVAL OF AUDIT AND NON-AUDIT SERVICES
POLICIES AND PROCEDURES
As adopted by the Audit Committees of
the Invesco Funds (the “Funds”)
POLICIES AND PROCEDURES
As adopted by the Audit Committees of
the Invesco Funds (the “Funds”)
Statement of Principles
Under the Sarbanes-Oxley Act of 2002 and rules adopted by the Securities and Exchange
Commission (“SEC”) (“Rules”), the Audit Committees of the Funds’ (the “Audit Committees”) Board of
Trustees (the “Board”) are responsible for the appointment, compensation and oversight of the work
of independent accountants (an “Auditor”). As part of this responsibility and to assure that the
Auditor’s independence is not impaired, the Audit Committees pre-approve the audit and non-audit
services provided to the Funds by each Auditor, as well as all non-audit services provided by the
Auditor to the Funds’ investment adviser and to affiliates of the adviser that provide ongoing
services to the Funds (“Service Affiliates”) if the services directly impact the Funds’ operations
or financial reporting. The SEC Rules also specify the types of services that an Auditor may not
provide to its audit client. The following policies and procedures comply with the requirements
for pre-approval and provide a mechanism by which management of the Funds may request and secure
pre-approval of audit and non-audit services in an orderly manner with minimal disruption to normal
business operations.
Proposed services either may be pre-approved without consideration of specific case-by-case
services by the Audit Committees (“general pre-approval”) or require the specific pre-approval of
the Audit Committees (“specific pre-approval”). As set forth in these policies and procedures,
unless a type of service has received general pre-approval, it will require specific pre-approval
by the Audit Committees. Additionally, any fees exceeding 110% of estimated pre-approved fee
levels provided at the time the service was pre-approved will also require specific approval by the
Audit Committees before payment is made. The Audit Committees will also consider the impact of
additional fees on the Auditor’s independence when determining whether to approve any additional
fees for previously pre-approved services.
The Audit Committees will annually review and generally pre-approve the services that may be
provided by each Auditor without obtaining specific pre-approval from the Audit Committee generally
on an annual basis. The term of any general pre-approval runs from the date of such pre-approval
through September 30th of the following year, unless the Audit Committees consider a
different period and state otherwise. The Audit Committees will add to or subtract from the list
of general pre-approved services from time to time, based on subsequent determinations.
The purpose of these policies and procedures is to set forth the guidelines to assist the Audit
Committees in fulfilling their responsibilities.
Delegation
The Audit Committees may from time to time delegate pre-approval authority to one or more of
its members who are Independent Trustees. All decisions to pre-approve a service by a delegated
member shall be reported to the Audit Committees at the next quarterly meeting.
Audit Services
The annual audit services engagement terms will be subject to specific pre-approval of the
Audit Committees. Audit services include the annual financial statement audit and other procedures
such as tax provision work that is required to be performed by the independent auditor to be able
to form an opinion on the Funds’ financial statements. The Audit Committees will obtain, review
and consider sufficient information concerning the proposed Auditor to make a reasonable evaluation
of the Auditor’s qualifications and independence.
In addition to the annual Audit services engagement, the Audit Committees may grant either general
or specific pre-approval of other audit services, which are those services that only the
independent auditor reasonably can provide. Other Audit services may include services such as
issuing consents for the
inclusion of audited financial statements with SEC registration
statements, periodic reports and other documents filed with the SEC or other documents issued in
connection with securities offerings.
Non-Audit Services
The Audit Committees may provide either general or specific pre-approval of any non-audit
services to the Funds and its Service Affiliates if the Audit Committees believe that the provision
of the service will not impair the independence of the Auditor, is consistent with the SEC’s Rules
on auditor independence, and otherwise conforms to the Audit Committees’ general principles and
policies as set forth herein.
Audit-Related Services
“Audit-related services” are assurance and related services that are reasonably related to the
performance of the audit or review of the Fund’s financial statements or that are traditionally
performed by the independent auditor. Audit-related services include, among others, accounting
consultations related to accounting, financial reporting or disclosure matters not classified as
“Audit services”; assistance with understanding and implementing new accounting and financial
reporting guidance from rulemaking authorities; and agreed-upon procedures related to mergers,
compliance with ratings agency requirements and interfund lending activities.
Tax Services
“Tax services” include, but are not limited to, the review and signing of the Funds’ federal tax
returns, the review of required distributions by the Funds and consultations regarding tax matters
such as the tax treatment of new investments or the impact of new regulations. The Audit
Committees will scrutinize carefully the retention of the Auditor in connection with a transaction
initially recommended by the Auditor, the major business purpose of which may be tax avoidance or
the tax treatment of which may not be supported in the Internal Revenue Code and related
regulations. The Audit Committees will consult with the Funds’ Treasurer (or his or her designee)
and may consult with outside counsel or advisors as necessary to ensure the consistency of Tax
services rendered by the Auditor with the foregoing policy.
No Auditor shall represent any Fund or any Service Affiliate before a tax court, district court or
federal court of claims.
Under rules adopted by the Public Company Accounting Oversight Board and approved by the SEC, in
connection with seeking Audit Committees’ pre-approval of permissible Tax services, the Auditor
shall:
| 1. | Describe in writing to the Audit Committees, which writing may be in the form of the proposed engagement letter: |
| a. | The scope of the service, the fee structure for the engagement, and any side letter or amendment to the engagement letter, or any other agreement between the Auditor and the Fund, relating to the service; and | ||
| b. | Any compensation arrangement or other agreement, such as a referral agreement, a referral fee or fee-sharing arrangement, between the Auditor and any person (other than the Fund) with respect to the promoting, marketing, or recommending of a transaction covered by the service; |
| 2. | Discuss with the Audit Committees the potential effects of the services on the independence of the Auditor; and | ||
| 3. | Document the substance of its discussion with the Audit Committees. |
All Other Auditor Services
The Audit Committees may pre-approve non-audit services classified as “All other services” that are
not categorically prohibited by the SEC, as listed in Exhibit 1 to this policy.
Pre-Approval Fee Levels or Established Amounts
Pre-approval of estimated fees or established amounts for services to be provided by the
Auditor under general or specific pre-approval policies will be set periodically by the Audit
Committees. Any proposed fees exceeding 110% of the maximum estimated pre-approved fees or
established amounts for pre-approved audit and non-audit services will be reported to the Audit
Committees at the quarterly Audit Committees meeting and will require specific approval by the
Audit Committees before payment is made. The Audit Committees will always factor in the overall
relationship of fees for audit and non-audit services in determining whether to pre-approve any
such services and in determining whether to approve any additional fees exceeding 110% of the
maximum pre-approved fees or established amounts for previously pre-approved services.
Procedures
Generally on an annual basis, Invesco Advisers, Inc. (“Invesco”) will submit to the Audit
Committees for general pre-approval, a list of non-audit services that the Funds or Service
Affiliates of the Funds may request from the Auditor. The list will describe the non-audit
services in reasonable detail and will include an estimated range of fees and such other
information as the Audit Committee may request.
Each request for services to be provided by the Auditor under the general pre-approval of the Audit
Committees will be submitted to the Funds’ Treasurer (or his or her designee) and must include a
detailed description of the services to be rendered. The Treasurer or his or her designee will
ensure that such services are included within the list of services that have received the general
pre-approval of the Audit Committees. The Audit Committees will be informed at the next quarterly
scheduled Audit Committees meeting of any such services for which the Auditor rendered an invoice
and whether such services and fees had been pre-approved and if so, by what means.
Each request to provide services that require specific approval by the Audit Committees shall be
submitted to the Audit Committees jointly by the Fund’s Treasurer or his or her designee and the
Auditor, and must include a joint statement that, in their view, such request is consistent with
the policies and procedures and the SEC Rules.
Each request to provide tax services under either the general or specific pre-approval of the Audit
Committees will describe in writing: (i) the scope of the service, the fee structure for the
engagement, and any side letter or amendment to the engagement letter, or any other agreement
between the Auditor and the audit client, relating to the service; and (ii) any compensation
arrangement or other agreement between the Auditor and any person (other than the audit client)
with respect to the promoting, marketing, or recommending of a transaction covered by the service.
The Auditor will discuss with the Audit Committees the potential effects of the services on the
Auditor’s independence and will document the substance of the discussion.
Non-audit services pursuant to the de minimis exception provided by the SEC Rules will be promptly
brought to the attention of the Audit Committees for approval, including documentation that each of
the conditions for this exception, as set forth in the SEC Rules, has been satisfied.
On at least an annual basis, the Auditor will prepare a summary of all the services provided to any
entity in the investment company complex as defined in section 2-01(f)(14) of Regulation S-X in
sufficient detail as to the nature of the engagement and the fees associated with those services.
The Audit Committees have designated the Funds’ Treasurer to monitor the performance of all
services provided by the Auditor and to ensure such services are in compliance with these policies
and procedures. The Funds’ Treasurer will report to the Audit Committees on a periodic basis as to
the results of such monitoring. Both the Funds’ Treasurer and management of Invesco will
immediately report to the chairman of the Audit Committees any breach of these policies and
procedures that comes to the attention of the Funds’ Treasurer or senior management of Invesco.
Exhibit 1 to Pre-Approval of Audit and Non-Audit Services Policies and Procedures
Conditionally Prohibited Non-Audit Services (not prohibited if the Fund can reasonably conclude
that the results of the service would not be subject to audit procedures in connection with the
audit of the Fund’s financial statements)
| • | Bookkeeping or other services related to the accounting records or financial statements of the audit client | ||
| • | Financial information systems design and implementation | ||
| • | Appraisal or valuation services, fairness opinions, or contribution-in-kind reports | ||
| • | Actuarial services | ||
| • | Internal audit outsourcing services |
Categorically Prohibited Non-Audit Services
| • | Management functions | ||
| • | Human resources | ||
| • | Broker-dealer, investment adviser, or investment banking services | ||
| • | Legal services | ||
| • | Expert services unrelated to the audit | ||
| • | Any service or product provided for a contingent fee or a commission | ||
| • | Services related to marketing, planning, or opining in favor of the tax treatment of confidential transactions or aggressive tax position transactions, a significant purpose of which is tax avoidance | ||
| • | Tax services for persons in financial reporting oversight roles at the Fund | ||
| • | Any other service that the Public Company Oversight Board determines by regulation is impermissible. |
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
| (a) | The registrant has a separately-designed standing audit committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended. Members of the audit committee are: Jerry D. Choate, Linda Hutton Heagy and R. Craig Kennedy. | ||
| (a) | Not applicable. |
ITEM 6. SCHEDULE OF INVESTMENTS.
Investments in securities of unaffiliated issuers is included as part of the
reports to stockholders filed under Item 1 of this Form.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
I.2. PROXY POLICIES AND PROCEDURES — RETAIL
Applicable to
|
Retail Accounts | |
Risk Addressed by Policy
|
breach of fiduciary duty to client under Investment Advisers Act of 1940 by placing Invesco personal interests ahead of client best economic interests in voting proxies | |
Relevant Law and Other Sources
|
Investment Advisers Act of 1940 | |
Last Tested Date |
||
Policy/Procedure Owner
|
Advisory Compliance | |
Policy Approver
|
Fund Board | |
Approved/Adopted Date
|
January 1, 2010 |
The following policies and procedures apply to certain funds and other accounts managed by
Invesco Advisers, Inc. (“Invesco”).
A. POLICY STATEMENT
Introduction
Our Belief
The Invesco Funds Boards of Trustees and Invesco’s investment professionals expect a high standard
of corporate governance from the companies in our portfolios so that Invesco may fulfill its
fiduciary obligation to our fund shareholders and other account holders. Well governed companies
are characterized by a primary focus on the interests of shareholders, accountable boards of
directors, ample transparency in financial disclosure, performance-driven cultures and appropriate
consideration of all stakeholders. Invesco believes well governed companies create greater
shareholder wealth over the long term than poorly governed companies, so we endeavor to vote in a
manner that increases the value of our investments and fosters good governance within our portfolio
companies.
In determining how to vote proxy issues, Invesco considers the probable business consequences of
each issue and votes in a manner designed to protect and enhance fund shareholders’ and other
account holders’ interests. Our voting decisions are intended to enhance each company’s total
shareholder value over Invesco’s typical investment horizon.
Proxy voting is an integral part of Invesco’s investment process. We believe that the right to vote
proxies should be managed with the same care as all other elements of the investment process. The
objective of Invesco’s proxy-voting activity is to promote good governance and advance the economic
interests of our clients. At no time will Invesco exercise its voting power to advance its own
| January 2010 | I.2 — 1 |
commercial interests, to pursue a social or political cause that is unrelated to our clients’
economic interests, or to favor a particular client or business relationship to the detriment of
others.
B. OPERATING PROCEDURES AND RESPONSIBLE PARTIES
Proxy administration
The Invesco Retail Proxy Committee (the “Proxy Committee”) consists of members representing
Invesco’s Investments, Legal and Compliance departments. Invesco’s Proxy Voting Guidelines (the
“Guidelines”) are revised annually by the Proxy Committee, and are approved by the Invesco Funds
Boards of Trustees. The Proxy Committee implements the Guidelines and oversees proxy voting.
The Proxy Committee has retained outside experts to assist with the analysis and voting of proxy
issues. In addition to the advice offered by these experts, Invesco uses information gathered from
our own research, company managements, Invesco’s portfolio managers and outside shareholder groups
to reach our voting decisions.
Generally speaking, Invesco’s investment-research process leads us to invest in companies led by
management teams we believe have the ability to conceive and execute strategies to outperform their
competitors. We select companies for investment based in large part on our assessment of their
management teams’ ability to create shareholder wealth. Therefore, in formulating our proxy-voting
decisions, Invesco gives proper consideration to the recommendations of a company’s Board of
Directors.
Important principles underlying the Invesco Proxy Voting Guidelines
I. Accountability
Management teams of companies are accountable to their boards of directors, and directors of
publicly held companies are accountable to their shareholders. Invesco endeavors to vote the
proxies of its portfolio companies in a manner that will reinforce the notion of a board’s
accountability to its shareholders. Consequently, Invesco votes against any actions that would
impair the rights of shareholders or would reduce shareholders’ influence over the board or over
management.
The following are specific voting issues that illustrate how Invesco applies this principle of
accountability.
| • | Elections of directors. In uncontested director elections for companies that do not have a controlling shareholder, Invesco votes in favor of slates if they are comprised of at least a majority of independent directors and if the boards’ key committees are fully independent. Key committees include the Audit, Compensation and Governance or Nominating Committees. Invesco’s standard of independence excludes directors who, in addition to the directorship, have any material business or family relationships with the companies they serve. |
| January 2010 | I.2 — 2 |
| Contested director elections are evaluated on a case-by-case basis and are decided within the context of Invesco’s investment thesis on a company. |
| • | Director performance. Invesco withholds votes from directors who exhibit a lack of accountability to shareholders, either through their level of attendance at meetings or by enacting egregious corporate-governance or other policies. In cases of material financial restatements, accounting fraud, habitually late filings, adopting shareholder rights plan (“poison pills”) without shareholder approval, or other areas of poor performance, Invesco may withhold votes from some or all of a company’s directors. In situations where directors’ performance is a concern, Invesco may also support shareholder proposals to take corrective actions such as so-called “clawback” provisions. | ||
| • | Auditors and Audit Committee members. Invesco believes a company’s Audit Committee has a high degree of responsibility to shareholders in matters of financial disclosure, integrity of the financial statements and effectiveness of a company’s internal controls. Independence, experience and financial expertise are critical elements of a well-functioning Audit Committee. When electing directors who are members of a company’s Audit Committee, or when ratifying a company’s auditors, Invesco considers the past performance of the Committee and holds its members accountable for the quality of the company’s financial statements and reports. | ||
| • | Majority standard in director elections. The right to elect directors is the single most important mechanism shareholders have to promote accountability. Invesco supports the nascent effort to reform the U.S. convention of electing directors, and votes in favor of proposals to elect directors by a majority vote. | ||
| • | Classified boards. Invesco supports proposals to elect directors annually instead of electing them to staggered multi-year terms because annual elections increase a board’s level of accountability to its shareholders. | ||
| • | Supermajority voting requirements. Unless proscribed by law in the state of incorporation, Invesco votes against actions that would impose any supermajority voting requirement, and supports actions to dismantle existing supermajority requirements. | ||
| • | Responsiveness. Invesco withholds votes from directors who do not adequately respond to shareholder proposals that were approved by a majority of votes cast the prior year. | ||
| • | Cumulative voting. The practice of cumulative voting can enable minority shareholders to have representation on a company’s board. Invesco supports proposals to institute the practice of cumulative voting at companies whose overall corporate-governance standards indicate a particular need to protect the interests of minority shareholders. |
| January 2010 | I.2 — 3 |
| • | Shareholder access. On business matters with potential financial consequences, Invesco votes in favor of proposals that would increase shareholders’ opportunities to express their views to boards of directors, proposals that would lower barriers to shareholder action and proposals to promote the adoption of generally accepted best practices in corporate governance. |
II. Incentives
Invesco believes properly constructed compensation plans that include equity ownership are
effective in creating incentives that induce managements and employees of our portfolio companies
to create greater shareholder wealth. Invesco supports equity compensation plans that promote the
proper alignment of incentives, and votes against plans that are overly dilutive to existing
shareholders, plans that contain objectionable structural features, and plans that appear likely to
reduce the value of an account’s investment.
Following are specific voting issues that illustrate how Invesco evaluates incentive plans.
| • | Executive compensation. Invesco evaluates compensation plans for executives within the context of the company’s performance under the executives’ tenure. Invesco believes independent compensation committees are best positioned to craft executive-compensation plans that are suitable for their company-specific circumstances. We view the election of those independent compensation committee members as the appropriate mechanism for shareholders to express their approval or disapproval of a company’s compensation practices. Therefore, Invesco generally does not support shareholder proposals to limit or eliminate certain forms of executive compensation. In the interest of reinforcing the notion of a compensation committee’s accountability to shareholders, Invesco supports proposals requesting that companies subject each year’s compensation record to an advisory shareholder vote, or so-called “say on pay” proposals. | ||
| • | Equity-based compensation plans. When voting to approve or reject equity-based compensation plans, Invesco compares the total estimated cost of the plans, including stock options and restricted stock, against a carefully selected peer group and uses multiple performance metrics that help us determine whether the incentive structures in place are creating genuine shareholder wealth. Regardless of a plan’s estimated cost relative to its peer group, Invesco votes against plans that contain structural features that would impair the alignment of incentives between shareholders and management. Such features include the ability to reprice or reload options without shareholder approval, the ability to issue options below the stock’s current market price, or the ability to automatically replenish shares without shareholder approval. |
| January 2010 | I.2 — 4 | |
| • | Employee stock-purchase plans. Invesco supports employee stock-purchase plans that are reasonably designed to provide proper incentives to a broad base of employees, provided that the price at which employees may acquire stock is at most a 15 percent discount from the market price. | ||
| • | Severance agreements. Invesco generally votes in favor of proposals requiring advisory shareholder ratification of executives’ severance agreements. However, we oppose proposals requiring such agreements to be ratified by shareholders in advance of their adoption. |
III. Capitalization
Examples of management proposals related to a company’s capital structure include authorizing or
issuing additional equity capital, repurchasing outstanding stock, or enacting a stock split or
reverse stock split. On requests for additional capital stock, Invesco analyzes the company’s
stated reasons for the request. Except where the request could adversely affect the fund’s
ownership stake or voting rights, Invesco generally supports a board’s decisions on its needs for
additional capital stock. Some capitalization proposals require a case-by-case analysis within the
context of Invesco’s investment thesis on a company. Examples of such proposals include authorizing
common or preferred stock with special voting rights, or issuing additional stock in connection
with an acquisition.
IV. Mergers, Acquisitions and Other Corporate Actions
Issuers occasionally require shareholder approval to engage in certain corporate actions such as
mergers, acquisitions, name changes, dissolutions, reorganizations, divestitures and
reincorporations. Invesco analyzes these proposals within the context of our investment thesis on
the company, and determines its vote on a case-by-case basis.
V. Anti-Takeover Measures
Practices designed to protect a company from unsolicited bids can adversely affect shareholder
value and voting rights, and they create conflicts of interests among directors, management and
shareholders. Except under special issuer-specific circumstances, Invesco votes to reduce or
eliminate such measures. These measures include adopting or renewing “poison pills”, requiring
supermajority voting on certain corporate actions, classifying the election of directors instead of
electing each director to an annual term, or creating separate classes of common or preferred stock
with special voting rights. Invesco generally votes against management proposals to impose these
types of measures, and generally votes for shareholder proposals designed to reduce such measures.
Invesco supports shareholder proposals directing companies to subject their anti-takeover
provisions to a shareholder vote.
VI. Shareholder Proposals on Corporate Governance
Invesco generally votes for shareholder proposals that are designed to protect shareholder rights
if a company’s corporate-governance standards indicate that such additional protections are
warranted.
| January 2010 | I.2 — 5 |
VII. Shareholder Proposals on Social Responsibility
The potential costs and economic benefits of shareholder proposals seeking to amend a company’s
practices for social reasons are difficult to assess. Analyzing the costs and economic benefits of
these proposals is highly subjective and does not fit readily within our framework of voting to
create greater shareholder wealth
over Invesco’s typical investment horizon. Therefore, Invesco abstains from voting on shareholder
proposals deemed to be of a purely social, political or moral nature.
VIII. Routine Business Matters
Routine business matters rarely have a potentially material effect on the economic prospects of
fund holdings, so we generally support the board’s discretion on these items. However, Invesco
votes against proposals where there is insufficient information to make a decision about the nature
of the proposal. Similarly, Invesco votes against proposals to conduct other unidentified business
at shareholder meetings.
Summary
These Guidelines provide an important framework for making proxy-voting decisions, and should give
fund shareholders and other account holders insight into the factors driving Invesco’s decisions.
The Guidelines cannot address all potential proxy issues, however. Decisions on specific issues
must be made within the context of these Guidelines and within the context of the investment thesis
of the funds and other accounts that own the company’s stock. Where a different investment thesis
is held by portfolio managers who may hold stocks in common, Invesco may vote the shares held on a
fund-by-fund or account-by-account basis.
Exceptions
In certain circumstances, Invesco may refrain from voting where the economic cost of voting a
company’s proxy exceeds any anticipated benefits of that proxy proposal.
Share-lending programs
One reason that some portion of Invesco’s position in a particular security might not be voted is
the securities lending program. When securities are out on loan and earning fees for the lending
fund, they are transferred into the borrower’s name. Any proxies during the period of the loan are
voted by the borrower. The lending fund would have to terminate the loan to vote the company’s
proxy, an action that is not generally in the best economic interest of fund shareholders. However,
whenever Invesco determines that the benefit to shareholders or other account holders of voting a
particular proxy outweighs the revenue lost by terminating the loan, we recall the securities for
the purpose of voting the fund’s full position.
“Share-blocking”
Another example of a situation where Invesco may be unable to vote is in countries where the
exercise of voting rights requires the fund to submit to short-term trading restrictions, a
practice known as “share-blocking.” Invesco generally
| January 2010 | I.2 — 6 |
refrains from voting proxies in
share-blocking countries unless the portfolio manager determines that the benefit to fund
shareholders and other account holders of voting a specific proxy outweighs the fund’s or other
account’s temporary inability to sell the security.
International constraints
An additional concern that sometimes precludes our voting non-U.S. proxies is our inability to
receive proxy materials with enough time and enough information to make a voting decision. In the
great majority of instances, however, we are able to vote non-U.S. proxies successfully. It is
important to note that Invesco makes voting decisions for non-U.S. issuers using these Guidelines
as our framework, but also takes into account the corporate-governance standards, regulatory
environment and generally accepted best practices of the local market.
Exceptions to these Guidelines
Invesco retains the flexibility to accommodate company-specific situations where strictly adhering
to the Guidelines would lead to a vote that the Proxy Committee deems not to be in the best
interest of the funds’ shareholders and other account holders. In these situations, the Proxy
Committee will vote the proxy in the manner deemed to be in the best interest of the funds’
shareholders and other account holders, and will promptly inform the funds’ Boards of Trustees of
such vote and the circumstances surrounding it.
Resolving potential conflicts of interest
A potential conflict of interest arises when Invesco votes a proxy for an issuer with which it also
maintains a material business relationship. Examples could include issuers that are distributors of
Invesco’s products, or issuers that employ Invesco to manage portions of their retirement plans or
treasury accounts. Invesco reviews each proxy proposal to assess the extent, if any, to which there
may be a material conflict between the interests of the fund shareholders or other account holders
and Invesco.
Invesco takes reasonable measures to determine whether a potential conflict may exist. A potential
conflict is deemed to exist only if one or more of the Proxy Committee members actually knew or
should have known of the potential conflict.
If a material potential conflict is deemed to exist, Invesco may resolve the potential conflict in
one of the following ways: (1) if the proposal that gives rise to the potential conflict is
specifically addressed by the Guidelines, Invesco may vote the proxy in accordance with the
predetermined Guidelines; (2) Invesco may engage an independent third party to determine how the
proxy should be voted; or (3) Invesco may establish an ethical wall or other informational barrier
between the persons involved in the potential conflict and the persons making the proxy-voting
decision in order to insulate the potential conflict from the decision makers.
Because the Guidelines are pre-determined and crafted to be in the best economic interest of
shareholders and other account holders, applying the Guidelines to vote client proxies should, in
most instances, adequately resolve any potential conflict of
| January 2010 | I.2 — 7 |
interest. As an additional safeguard
against potential conflicts, persons from Invesco’s marketing, distribution and other
customer-facing functions are precluded from becoming members of the Proxy Committee.
On a quarterly basis, the Invesco Funds Boards of Trustees review a report from Invesco’s Internal
Compliance Controls Committee. The report contains a list of all known material business
relationships that Invesco maintains with publicly traded issuers. That list is cross-referenced
with the list of proxies voted over the period. If there are any instances where Invesco’s voting
pattern on the proxies of its material business partners is inconsistent with its voting pattern on
all other issuers, they are brought before the Trustees and explained by the Chairman of the Proxy
Committee.
Personal conflicts of interest. If any member of the Proxy Committee has a personal conflict of
interest with respect to a company or an issue presented for voting, that Proxy Committee member
will inform the Proxy Committee of such conflict and will abstain from voting on that company or
issue.
Funds of funds. Some Invesco Funds offering diversified asset allocation within one investment
vehicle own shares in other Invesco Funds. A potential conflict of interest could arise if an
underlying Invesco Fund has a shareholder meeting with any proxy issues to be voted on, because
Invesco’s asset-allocation funds or target-maturity funds may be large shareholders of the
underlying fund. In order to avoid any potential for a conflict, the asset-allocation funds and
target maturity funds vote their shares in the same proportion as the votes of the external
shareholders of the underlying fund.
C. RECORDKEEPING
Records are maintained in accordance with Invesco’s Recordkeeping Policy.
Policies and Vote Disclosure
A copy of these Guidelines and the voting record of each Invesco Fund are available on our web
site, www.invesco.com. In accordance with Securities and Exchange Commission regulations,
all funds file a record of all proxy-voting activity for the prior 12 months ending June 30th. That
filing is made on or before August 31st of each year.
| January 2010 | I.2 — 8 |
| ITEM 8. | PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. |
The following individuals are jointly and primarily responsible for the day-to-day management of
the Trust:
| • | Thomas Byron, Portfolio Manager, who has been responsible for the Trust since 2011 and has been associated with Invesco and/or its affiliates since 2010. From 1981 to 2010, Mr. Byron was associated with Morgan Stanley Investment Advisors Inc. in an investment management capacity. | ||
| • | Robert Stryker, Portfolio Manager, who has been responsible for the Trust since 2007 and has been with Invesco and/or its affiliates since 2010. From 1994 to 2010, Mr. Stryker was associated with Morgan Stanley Investment Advisors Inc. in an investment management capacity. | ||
| • | Julius Williams, Portfolio Manager, who has been responsible for the Trust since 2009 and has been associated with Invesco and/or its affiliates since 2010. From 2000 to 2010, Mr. Williams was associated with Morgan Stanley Investment Advisors Inc. or its investment advisory affiliates in an investment management capacity. | ||
| • | Robert Wimmel, Portfolio Manager, who has been responsible for the Trust since 2011 and has been associated with Invesco and/or its affiliates since 2010. From 1996 to 2010, Mr. Wimmel was associated with Morgan Stanley Investment Advisors Inc. in an investment management capacity. |
Portfolio Manager Fund Holdings and Information on Other Managed Accounts
Invesco’s portfolio managers develop investment models which are used in connection with the
management of certain Invesco Funds as well as other mutual funds for which Invesco or an affiliate
acts as sub-adviser, other pooled investment vehicles that are not registered mutual funds, and
other accounts managed for organizations and individuals. The ‘Investments’ chart reflects the
portfolio managers’ investments in the Funds that they manage. Accounts are grouped into three
categories: (i) investments made directly in the Fund, (ii) investments made in an Invesco pooled
investment vehicle with the same or similar objectives and strategies as the Fund, and (iii) any
investments made in any Invesco Fund or Invesco pooled investment vehicle. The ‘Assets Managed’
chart reflects information regarding accounts other than the Funds for which each portfolio manager
has day-to-day management responsibilities. Accounts are grouped into three categories: (i) other
registered investment companies, (ii) other pooled investment vehicles and (iii) other accounts.
To the extent that any of these accounts pay advisory fees that are based on account performance
(performance-based fees), information on those accounts is specifically broken out. In addition,
any assets denominated in foreign currencies have been converted into U.S. Dollars using the
exchange rates as of the applicable date.
Investments
The following information is as of February 29, 2012:
| Dollar Range of | Dollar Range of all | ||||||
| Investments in | Investments in | ||||||
| Dollar Range of | Invesco pooled | Funds and Invesco | |||||
| Investments in each | investment | pooled investment | |||||
| Portfolio Manager | Fund1 | vehicles2 | vehicles | ||||
| Invesco Van Kampen Trust for Investment Grade New York Municipals | |||||||
Thomas Byron |
None | N/A | $100,001-$500,000 | ||||
Robert Stryker |
None | N/A | $100,001-$500,000 | ||||
Julius Williams |
None | N/A | $50,001-$100,000 | ||||
Robert Wimmel |
None | N/A | $100,001-$500,000 | ||||
Assets Managed
The following information is as of February 29, 2012:
| Other Registered Investment | ||||||||||||
| Companies Managed (assets in | Other Pooled Investment Vehicles | Other Accounts Managed (assets in | ||||||||||
| millions) | Managed (assets in millions) | millions) | ||||||||||
| Portfolio Manager | Number of Accounts | Assets | Number of Accounts | Assets | Number of Accounts | Assets | ||||||
| Invesco Van Kampen Trust for Investment Grade New York Municipals | ||||||||||||
Thomas Byron |
30 | $14,254.8 | None | None | None | None | ||||||
Robert Stryker |
30 | $14,254.8 | None | None | None | None | ||||||
Julius Williams |
12 | $2,954.2 | None | None | None | None | ||||||
Robert Wimmel |
30 | $14,254.8 | None | None | None | None | ||||||
Potential Conflicts of Interest
Actual or apparent conflicts of interest may arise when a portfolio manager has day-to-day
management responsibilities with respect to more than one Fund or other account. More
specifically, portfolio managers who manage multiple Funds and/or other accounts may be presented
with one or more of the following potential conflicts:
| • | The management of multiple Funds and/or other accounts may result in a portfolio manager devoting unequal time and attention to the management of each Fund and/or other account. The Adviser and each Sub-Adviser seek to manage such competing interests for the time and attention of portfolio managers by having portfolio managers focus on a particular investment discipline. Most other accounts managed by a portfolio manager are managed using the same investment models that are used in connection with the management of the Funds. | |
| • | If a portfolio manager identifies a limited investment opportunity which may be suitable for more than one Fund or other account, a Fund may not be able to take full advantage of that opportunity due to an allocation of filled purchase or sale orders across all eligible Funds and other accounts. To deal with these situations, the Adviser, each Sub-Adviser and the Funds have adopted procedures for allocating portfolio transactions across multiple accounts. |
| 1 | This column reflects investments in a Fund’s shares beneficially owned by a portfolio manager (as determined in accordance with Rule 16a-1(a) (2) under the Securities Exchange Act of 1934, as amended). Beneficial ownership includes ownership by a portfolio manager’s immediate family members sharing the same household. | |
| 2 | This column reflects portfolio managers’ investments made either directly or through a deferred compensation or a similar plan in Invesco pooled investment vehicles with the same or similar objectives and strategies as the Fund as of the most recent fiscal year end of the Fund. |
| • | The Adviser and each Sub-Adviser determine which broker to use to execute each order for securities transactions for the Funds, consistent with its duty to seek best execution of the transaction. However, for certain other accounts (such as mutual funds for which Invesco or an affiliate acts as sub-adviser, other pooled investment vehicles that are not registered mutual funds, and other accounts managed for organizations and individuals), the Adviser and each Sub-Adviser may be limited by the client with respect to the selection of brokers or may be instructed to direct trades through a particular broker. In these cases, trades for a Fund in a particular security may be placed separately from, rather than aggregated with, such other accounts. Having separate transactions with respect to a security may temporarily affect the market price of the security or the execution of the transaction, or both, to the possible detriment of the Fund or other account(s) involved. | |
| • | Finally, the appearance of a conflict of interest may arise where the Adviser or Sub-Adviser has an incentive, such as a performance-based management fee, which relates to the management of one Fund or account but not all Funds and accounts for which a portfolio manager has day-to-day management responsibilities. |
The Adviser, each Sub-Adviser, and the Funds have adopted certain compliance procedures which
are designed to address these types of conflicts. However, there is no guarantee that such
procedures will detect each and every situation in which a conflict arises.
Description of Compensation Structure
For the Adviser and each affiliated Sub-Adviser
The Adviser and each Sub-Adviser seek to maintain a compensation program that is competitively
positioned to attract and retain high-caliber investment professionals. Portfolio managers receive
a base salary, an incentive bonus opportunity and an equity compensation opportunity. Portfolio
manager compensation is reviewed and may be modified each year as appropriate to reflect changes in
the market, as well as to adjust the factors used to determine bonuses to promote competitive Fund
performance. The Adviser and each Sub-Adviser evaluate competitive market compensation by reviewing
compensation survey results conducted by an independent third party of investment industry
compensation. Each portfolio manager’s compensation consists of the following three elements:
Base Salary. Each portfolio manager is paid a base salary. In setting the base salary, the
Adviser and each Sub-Adviser’s intention is to be competitive in light of the particular portfolio
manager’s experience and responsibilities.
Annual Bonus. The portfolio managers are eligible, along with other employees of the Adviser
and each Sub-Adviser, to participate in a discretionary year-end bonus pool. The Compensation
Committee of Invesco Ltd. reviews and approves the amount of the bonus pool available for the
Adviser and each of the Sub-Adviser’s investment centers. The Compensation Committee considers
investment performance and financial results in its review. In addition, while having no direct
impact on individual bonuses, assets under management are considered when determining the starting
bonus funding levels. Each portfolio manager is eligible to receive an annual cash bonus which is
based on quantitative (i.e. investment performance) and non-quantitative factors (which may
include, but are not limited to, individual performance, risk management and teamwork).
Each portfolio manager’s compensation is linked to the pre-tax investment performance of the
Funds/accounts managed by the portfolio manager as described in Table 1 below.
Table 1
| Sub-Adviser | Performance time period3 | |
Invesco 4 Invesco Australia4 Invesco Deutschland |
One-, Three- and Five-year performance against Fund peer group. | |
Invesco Advisors- Invesco Real Estate5
Invesco Senior Secured4,6 |
Not applicable | |
Invesco Canada4
|
One-year performance against Fund
peer group. Three- and Five-year performance against entire universe of Canadian funds. |
|
Invesco Hong Kong4
Invesco Asset Management |
One-, Three- and Five-year performance against Fund peer group. | |
Invesco Japan7
|
One-, Three- and Five-year performance against the appropriate Micropol benchmark. |
High investment performance (against applicable peer group and/or benchmarks) would deliver
compensation generally associated with top pay in the industry (determined by reference to the
third-party provided compensation survey information) and poor investment performance (versus
applicable peer group) would result in low bonus compared to the applicable peer group or no bonus
at all. These decisions are reviewed and approved collectively by senior leadership which has
responsibility for executing the compensation approach across the organization.
Equity-Based Compensation. Portfolio managers may be granted an annual deferral award that
allows them to select receipt of shares of certain Invesco Funds with a vesting period as well as
common shares and/or restricted shares of Invesco Ltd. stock from pools determined from time to
time by the Compensation Committee of Invesco Ltd.’s Board of Directors. Awards of equity-based
compensation typically vest over time, so as to create incentives to retain key talent.
Portfolio managers also participate in benefit plans and programs available generally to all
employees.
| ITEM 9. | PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. |
Not applicable.
| ITEM 10. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. |
None
| ITEM 11. | CONTROLS AND PROCEDURES. |
| (a) | As of March 21, 2012, an evaluation was performed under the supervision and with the participation of the officers of the Registrant, including the PEO and PFO, to assess the |
| 3 | Rolling time periods based on calendar year-end. | |
| 4 | Portfolio Managers may be granted an annual deferral award that vests on a pro-rata basis over a four year period and final payments are based on the performance of eligible Funds selected by the portfolio manager at the time the award is granted. | |
| 5 | Portfolio Managers for Invesco Global Real Estate Fund, Invesco Real Estate Fund, Invesco Global Real Estate Income Fund and Invesco V.I. Global Real Estate Fund base their bonus on new operating profits of the U.S. Real Estate Division of Invesco. | |
| 6 | Invesco Senior Secured’s bonus is based on annual measures of equity return and standard tests of collateralization performance. | |
| 7 | Portfolio Managers for Invesco Pacific Growth Fund’s compensation is based on the one-, three- and five-year performance against the appropriate Micropol benchmark. |
| effectiveness of the Registrant’s disclosure controls and procedures, as that term is defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “Act”), as amended. Based on that evaluation, the Registrant’s officers, including the PEO and PFO, concluded that, as of March 21, 2012, the Registrant’s disclosure controls and procedures were reasonably designed to ensure: (1) that information required to be disclosed by the Registrant on Form N-CSR is recorded, processed, summarized and reported within the time periods specified by the rules and forms of the Securities and Exchange Commission; and (2) that material information relating to the Registrant is made known to the PEO and PFO as appropriate to allow timely decisions regarding required disclosure. | ||
| (b) | There have been no changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting. |
| ITEM 12. | EXHIBITS. |
| 12(a)(1) | Code of Ethics. | |
| 12(a)(2) | Certifications of principal executive officer and principal financial officer as required by Rule 30a-2(a) under the Investment Company Act of 1940. | |
| 12(a)(3) | Not applicable. | |
| 12(b) | Certifications of principal executive officer and principal financial officer as required by Rule 30a-2(b) under the Investment Company Act of 1940. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act
of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Registrant: Invesco Van Kampen Trust for Investment Grade New York Municipals
| By: | /s/ Colin Meadows | |||
| Colin Meadows | ||||
| Principal Executive Officer | ||||
Date: May 4, 2012
Pursuant to the requirements of the Securities and Exchange Act of 1934 and the Investment Company
Act of 1940, this report has been signed below by the following persons on behalf of the Registrant
and in the capacities and on the dates indicated.
| By: | /s/ Colin Meadows | |||
| Colin Meadows | ||||
| Principal Executive Officer | ||||
Date: May 4, 2012
| By: | /s/ Sheri Morris | |||
| Sheri Morris | ||||
| Principal Financial Officer | ||||
Date: May 4, 2012
EXHIBIT INDEX
12(a)(1)
|
Code of Ethics. | |
12(a)(2)
|
Certifications of principal executive officer and principal Financial officer as required by Rule 30a-2(a) under the Investment Company Act of 1940. | |
12(a)(3)
|
Not applicable. | |
12(b)
|
Certifications of principal executive officer and principal financial officer as required by Rule 30a-2(b) under the Investment Company Act of 1940. |