UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-06434
Morgan Stanley Insured Municipal Trust
(Exact name of registrant as specified in charter)
522 Fifth Avenue, New York, New York 10036
(Address of principal executive offices) (Zip code)
Ronald E. Robison
522 Fifth Avenue, New York, New York 10036
(Name and address of agent for service)
Registrant's telephone number, including area code: 212-296-6990
Date of fiscal year end: October 31, 2008
Date of reporting period: April 30, 2008
Item 1 - Report to Shareholders
Welcome, Shareholder:
In this report, you'll learn about how your investment in Morgan Stanley Insured
Municipal Trust performed during the semiannual period. We will provide an
overview of the market conditions, and discuss some of the factors that affected
performance during the reporting period. In addition, this report includes the
Trust's financial statements and a list of Trust investments.
MARKET FORECASTS PROVIDED IN THIS REPORT MAY NOT NECESSARILY COME TO PASS. THERE
IS NO ASSURANCE THAT THE TRUST WILL ACHIEVE ITS INVESTMENT OBJECTIVE. THE TRUST
IS SUBJECT TO MARKET RISK, WHICH IS THE POSSIBILITY THAT MARKET VALUES OF
SECURITIES OWNED BY THE TRUST WILL DECLINE AND, THEREFORE, THE VALUE OF THE
TRUST'S SHARES MAY BE LESS THAN WHAT YOU PAID FOR THEM. ACCORDINGLY, YOU CAN
LOSE MONEY INVESTING IN THIS TRUST.
INCOME EARNED BY CERTAIN SECURITIES IN THE PORTFOLIO MAY BE SUBJECT TO THE
FEDERAL ALTERNATIVE MINIMUM TAX (AMT).
FUND REPORT
For the six months ended April 30, 2008
MARKET CONDITIONS
The six-month period under review was marked by disrupted credit markets,
recession fears, deterioration of the housing market, and markdowns in the
mortgage market as a result of forced selling. Although the fixed income market
saw some improvements in the last month of the period, many of the same concerns
and problems remained.
The Federal Reserve (the "Fed") stepped in several times during the period to
minimize the liquidity crisis. Not only did the Federal Open Market Committee
reduce the target federal funds rate several times, from 4.5 percent to 2.0
percent, but in an unprecedented move, the Fed granted primary Treasury dealers
(mostly brokerage firms) access to its discount window and loosened its
collateral requirements, extending loans of Treasury securities in exchange for
lower quality, less liquid securities. Finally, in what was most decidedly the
biggest headline event, the Fed arranged and supported JPMorgan Chase's purchase
of Bear Stearns, which was viewed by many as necessary to avoid serious market
repercussions had the firm failed.
The decline in short-term interest rates, coupled with the risk-averse
environment during the period pushed Treasury yields lower, especially on the
short end of the yield curve, causing the curve to steepen. The municipal yield
curve steepened as well, with the yield differential between one-year and 30-
year maturities reaching more than 300 basis points. Overall, municipal bonds
underperformed their taxable counterparts as credit rating downgrades of various
monoline bond insurers and the deterioration of the auction rate and variable
rate markets posed additional challenges for the sector. After a record year for
new municipal bond issuance in 2007, the amount of new issues coming to market
in the first four months of 2008 declined.
PERFORMANCE ANALYSIS
For the six-month period ended April 30, 2008, the net asset value (NAV) of
Morgan Stanley Insured Municipal Trust (IMT) decreased from $14.74 to $14.49 per
share. Based on this change plus reinvestment of tax-free dividends totaling
$0.33 per share and a long-term capital gain distribution of $0.019812 per
share, the Trust's total NAV return was 1.06 percent. IMT's value on the New
York Stock Exchange (NYSE) moved from $13.15 to $13.06 per share during the same
period. Based on this change plus reinvestment of dividends and distributions,
the Trust's total market return was 2.03 percent. IMT's NYSE market price was at
a 9.87 percent discount to its NAV. During the fiscal period, the Trust
purchased and retired 189,841 shares of common stock at a weighted average
market discount of 11.24 percent. Past performance is no guarantee of future
results.
Monthly dividends for the second quarter of 2008, declared in April, were
unchanged at $0.055 per share. The dividend reflects the current level of the
Trust's net investment income. IMT's level of undistributed net investment
income was $0.032 per share on April 30, 2008 versus $0.010 per share six months
earlier.(1)
Throughout the six-month period, the Trust maintained a lower interest rate
sensitivity (as measured by duration*), which was implemented through the use of
a U.S. Treasury futures hedge. This defensive positioning benefited performance
as it helped to minimize the price declines that resulted from rising
2
yields across the intermediate and long end of the municipal yield curve.
In terms of the Trust's sector positioning, an overweight in the hospital/life
care and tobacco sectors detracted from relative performance as spread widening
in those sectors hindered returns. Conversely, an overweight in the public
utility sector, particularly water and sewer bonds, benefited performance. The
flight to quality that took place during the period helped boost the performance
of the more solid infrastructure sectors such as utilities and the Trust's
holdings there enhanced returns.
The Trust's procedure for reinvesting all dividends and distributions in common
shares is through purchases in the open market. This method helps support the
market value of the Trust's shares. In addition, we would like to remind you
that the Trustees have approved a procedure 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. The Trust may also utilize procedures to reduce
or eliminate the amount of Auction Rate Preferred Shares (ARPS) outstanding,
including their purchase in the open market or in privately negotiated
transactions.
--------------------------------------------------------------------------------
PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH IS NO GUARANTEE OF
FUTURE RESULTS, AND CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE FIGURES
SHOWN. INVESTMENT RETURN, NET ASSET VALUE AND COMMON SHARE MARKET PRICE WILL
FLUCTUATE AND TRUST SHARES, WHEN SOLD, MAY BE WORTH MORE OR LESS THAN THEIR
ORIGINAL COST.
There is no guarantee that any sectors mentioned will continue to perform as
discussed herein or that securities in such sectors will be held by the Trust in
the future.
(1) Income earned by certain securities in the portfolio may be subject to the
federal alternative minimum tax (AMT).
* A measure of the sensitivity of a bond's price to changes in interest rates,
expressed in years. Each year of duration represents an expected 1 percent
change in the price of a bond for every 1 percent change in interest rates. The
longer a bond's duration, the greater the effect of interest-rate movements on
its price. Typically, trusts with shorter durations perform better in rising-
interest-rate environments, while trusts with longer durations perform better
when rates decline. Duration calculations are adjusted for leverage.
3
TOP FIVE SECTORS AS OF 04/30/08
General Obligation 19.3%
Other Revenue 13.4
Water & Sewer 12.0
Public Power 11.7
Transportation 11.5
LONG-TERM CREDIT ENHANCEMENTS AS
OF 04/30/08
MBIA 33.7%
FSA 25.3
FGIC 19.0
AMBAC 15.5
AGC 3.8
XLCA 2.2
PSF 0.5
SUMMARY OF INVESTMENTS BY STATE
CLASSIFICATION AS OF 04/30/2008
California 24.4%
Texas 21.7
Illinois 19.7
New York 16.6
Washington 9.8
South Carolina 7.1
Florida 6.2
Hawaii 6.1
Kentucky 5.6
Colorado 5.3
New Jersey 4.2
Pennsylvania 3.8
Alaska 3.7
Georgia 3.2
Minnesota 2.8
Iowa 2.7
Nevada 2.2
SUMMARY OF INVESTMENTS BY STATE
CLASSIFICATION AS OF 04/30/08
(CONTINUED)
District of Columbia 1.9%
Arizona 1.7
Michigan 1.6
Ohio 1.3
Virginia 1.3
Indiana 1.2
Maryland 1.0
Idaho 0.9
Louisiana 0.8
Missouri 0.8
North Carolina 0.8
Montana 0.7
Oregon 0.7
New Mexico 0.6
Connecticut 0.5
------
Total Long-Term Investments+ 160.9
Short-Term Investment 5.2
Liability for Floating Rate Note
Obligations (13.2)
Liabilities in Excess of Other
Assets (1.6)
Preferred Shares of Beneficial
Interest (51.3)
------
Net Assets Applicable to Common
Shareholders 100.0%
======
+ Does not include open long/short futures contracts with an underlying face
amount of $100,627,643 with unrealized appreciation of $170,760 and interest
rate swap contracts with unrealized depreciation of $93,994.
Subject to change daily. Provided for informational purposes only and should not
be deemed as a recommendation to buy or sell the securities mentioned or
securities in the sectors shown above. Top five sectors are as a percentage of
total investments. Long-term credit enhancements are as a percentage of long-
term investments. Summary of investments by state classification are as a
percentage of net assets applicable to common shareholders. Securities are
classified by sectors that represent broad groupings of related industries.
Morgan Stanley is a full-service securities firm engaged in securities trading
and brokerage activities, investment banking, research and analysis, financing
and financial advisory services.
4
FOR MORE INFORMATION ABOUT PORTFOLIO HOLDINGS
EACH MORGAN STANLEY TRUST PROVIDES A COMPLETE SCHEDULE OF PORTFOLIO HOLDINGS IN
ITS SEMIANNUAL AND ANNUAL REPORTS WITHIN 60 DAYS OF THE END OF THE TRUST'S
SECOND AND FOURTH FISCAL QUARTERS. THE SEMIANNUAL REPORTS AND THE ANNUAL REPORTS
ARE FILED ELECTRONICALLY WITH THE SECURITIES AND EXCHANGE COMMISSION (SEC) ON
FORM N-CSRS AND FORM N-CSR, RESPECTIVELY. MORGAN STANLEY ALSO DELIVERS THE
SEMIANNUAL AND ANNUAL REPORTS TO TRUST SHAREHOLDERS AND MAKES THESE REPORTS
AVAILABLE ON ITS PUBLIC WEB SITE, WWW.MORGANSTANLEY.COM. EACH MORGAN STANLEY
TRUST ALSO FILES A COMPLETE SCHEDULE OF PORTFOLIO HOLDINGS WITH THE SEC FOR THE
TRUST'S FIRST AND THIRD FISCAL QUARTERS ON FORM N-Q.
MORGAN STANLEY DOES NOT DELIVER THE REPORTS FOR THE FIRST AND THIRD FISCAL
QUARTERS TO SHAREHOLDERS, NOR ARE THE REPORTS POSTED TO THE MORGAN STANLEY
PUBLIC WEB SITE. YOU MAY, HOWEVER, OBTAIN THE FORM N-Q FILINGS (AS WELL AS THE
FORM N-CSR AND N-CSRS FILINGS) BY ACCESSING THE SEC'S WEB SITE,
HTTP://WWW.SEC.GOV. YOU MAY ALSO REVIEW AND COPY THEM AT THE SEC'S PUBLIC
REFERENCE ROOM IN WASHINGTON, DC. INFORMATION ON THE OPERATION OF THE SEC'S
PUBLIC REFERENCE ROOM MAY BE OBTAINED BY CALLING THE SEC AT (800) SEC-0330. YOU
CAN ALSO REQUEST COPIES OF THESE MATERIALS, UPON PAYMENT OF A DUPLICATING FEE,
BY ELECTRONIC REQUEST AT THE SEC'S E-MAIL ADDRESS (PUBLICINFO@SEC.GOV) OR BY
WRITING THE PUBLIC REFERENCE SECTION OF THE SEC, WASHINGTON, DC 20549-0102.
5
Morgan Stanley Insured Municipal Trust
PORTFOLIO OF INVESTMENTS - APRIL 30, 2008 (UNAUDITED)
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
------------------------------------------------------------------------------------------
Tax-Exempt Municipal Bonds (160.9%)
Alaska (3.7%)
$10,000 North Slope Borough, Alaska, Ser 2000 B
(MBIA Insd)............................ 0.00 % 06/30/10 $ 9,367,200
------------
Arizona (1.7%)
1,305 Arizona, Ser 2008 A (FSA Insd)........... 5.00 09/01/27 1,352,124
2,000 Arizona Board of Regents, Arizona State
University Ser 2004 COPs (AMBAC Insd).. 5.00 09/01/30 2,028,040
1,000 Phoenix Civic Improvement Corporation,
Arizona, Jr Lien Wastewater Ser 2004
(MBIA Insd)............................ 5.00 07/01/27 1,027,160
------------
4,407,324
------------
California (24.4%)
1,205 Alameda County Joint Powers Authority,
California, Ser 2008 A (FSA Insd)...... 5.00 12/01/24 1,269,685
945 Alvord Unified School District,
California, Ser 2007 A (FSA Insd) WI... 5.00 08/01/27 989,736
16,000 Anaheim Public Financing Authority,
California, Anaheim Electric Ser 2007-A
(MBIA Insd) (a)........................ 4.50 10/01/37 15,153,360
2,500 California Department of Water and Power
Supply, Ser 2008 H (FSA Insd).......... 5.00 05/01/22 2,672,525
2,500 California, Economic Recovery Ser 2004 A
(MBIA Insd)............................ 5.00 07/01/15 2,697,700
6,000 California, Refg Dtd 04/01/07 Ser 2007
(MBIA Insd)............................ 4.25 08/01/33 5,494,980
4,000 Eastern Municipal Water District, Water &
Sewer Refg Ser 2006 A COPs (MBIA
Insd).................................. 5.00 07/01/32 4,080,360
4,530 Fontana Unified School District,
California, Ser B (FSA Insd)........... 0.00 08/01/30 1,399,136
6,000 Golden State Tobacco Securitization
Corporation, Enhanced Asset Backed Ser
2005 A (FGIC Insd)..................... 5.00 06/01/38 5,747,880
2,000 Kern County Board of Education, Refg 2006
Ser A COPs (MBIA Insd)................. 5.00 06/01/31 2,023,780
3,000 Los Angeles, California, Ser 2004 A (MBIA
Insd).................................. 5.00 09/01/24 3,101,760
725 Oakland Joint Powers Financing Authority,
California, Oakland Administration
Buildings 2008 Ser B (AGC Insd) WI..... 5.00 08/01/23 767,289
500 Oakland Joint Powers Financing Authority,
California, Oakland Administration
Buildings 2008 Ser B (AGC Insd) WI..... 5.00 08/01/25 524,510
2,000 Sacramento County Sanitation District
Financing Authority, California,
Sacramento Regional Ser 2006 (FGIC
Insd).................................. 5.00 12/01/36 2,035,860
5,000 San Diego County Water Authority,
California, Ser 2004 A COPs (FSA
Insd).................................. 5.00 05/01/29 5,118,600
2,000 San Francisco City & County, City
Buildings Ser 2007 A COPs (FGIC Insd).. 4.50 09/01/37 1,823,940
1,000 University of California, Limited
Projects Ser 2005 B (FSA Insd)......... 5.00 05/15/30 1,023,520
See Notes to Financial Statements
6
Morgan Stanley Insured Municipal Trust
PORTFOLIO OF INVESTMENTS - APRIL 30, 2008 (UNAUDITED) continued
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
------------------------------------------------------------------------------------------
$ 3,120 University of California, Ser 2007 J (FSA
Insd) (a).............................. 4.50 % 05/15/31 $ 3,006,994
2,880 University of California, Ser 2007 J (FSA
Insd) (a).............................. 4.50 05/15/35 2,775,686
------------
61,707,301
------------
Colorado (5.3%)
2,000 Arkansas River Power Authority, Colorado,
Power Ser 2006 (XLCA Insd)............. 5.25 10/01/40 1,941,720
510 Colorado Health Facilities Authority, Ser
2006 ( FSA Insd)....................... 4.75 09/01/25 507,583
5,000 Denver City & County, Colorado, Airport
Refg Ser 2000 A (AMT) (AMBAC Insd)..... 6.00 11/15/18 5,110,050
6,500 Denver Convention Center Hotel Authority,
Colorado, Refg Ser 2006 (XLCA Insd).... 5.00 12/01/35 5,870,800
------------
13,430,153
------------
Connecticut (0.5%)
1,225 Connecticut Health and Educational
Facilities Authority, Quinnipiac
University Ser K-1 (MBIA Insd)......... 5.00 07/01/27 1,255,355
------------
District of Columbia (1.9%)
4,000 District of Columbia Ballpark, Ser 2006
B-1 (FGIC Insd)........................ 5.00 02/01/31 3,776,520
500 District of Columbia Water & Sewer
Authority, Ser 2008 A (AGC Insd)....... 5.00 10/01/28 514,305
625 District of Columbia Water & Sewer
Authority, Ser 2008 A (AGC Insd)....... 5.00 10/01/29 640,800
------------
4,931,625
------------
Florida (6.2%)
1,265 Mid-Bay Bridge Authority, Florida, Ser
2008 A (AGC Insd)...................... 5.00 10/01/27 1,274,146
2,155 Miami Dade County, Florida, Miami Int'l
Airport Refg Ser 2003 B (AMT) (MBIA
Insd).................................. 5.25 10/01/18 2,177,153
2,270 Miami Dade County, Florida, Miami Int'l
Airport Refg Ser 2003 B (AMT) (MBIA
Insd).................................. 5.25 10/01/19 2,288,092
10,000 Tampa Bay Water, Florida, Ser 2001 B
(FGIC Insd)............................ 5.00 10/01/31 10,071,400
------------
15,810,791
------------
Georgia (3.2%)
900 Fulton County Development Authority,
Georgia, Morehouse College Ser 2000
(AMBAC Insd)........................... 6.25 12/01/10(b) 992,214
5,000 Atlanta, Georgia, Airport Ser 2004 C (FSA
Insd).................................. 5.00 01/01/33 5,079,200
2,000 Atlanta, Georgia, Water & Wastewater Ser
1999 A (FGIC Insd)..................... 5.00 11/01/29 1,938,520
------------
8,009,934
------------
See Notes to Financial Statements
7
Morgan Stanley Insured Municipal Trust
PORTFOLIO OF INVESTMENTS - APRIL 30, 2008 (UNAUDITED) continued
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
------------------------------------------------------------------------------------------
Hawaii (6.1%)
$ 5,000 Hawaii, Airports Refg Ser 2001 (AMT)
(FGIC Insd)............................ 5.25 % 07/01/21 $ 4,978,450
5,000 Honolulu City & County, Hawaii, Ser 2003
A (MBIA Insd) (a)...................... 5.25 03/01/25 5,234,675
5,000 Honolulu City & County, Hawaii, Ser 2003
A (MBIA Insd) (a)...................... 5.25 03/01/26 5,194,700
------------
15,407,825
------------
Idaho (0.9%)
2,065 Idaho Housing and Finance Association,
Federal Highway Trust 2008 Ser A (AGC
Insd).................................. 5.25 07/15/25 2,199,204
------------
Illinois (19.7%)
3,000 Chicago, Illinois, O'Hare Int'l Airport,
Ser 2005 A (MBIA Insd)................. 5.25 01/01/25 3,064,320
2,000 Chicago, Illinois, O' Hare Int'l Airport
Third Lien Ser 2003 B-2 (AMT) (FSA
Insd).................................. 5.75 01/01/23 2,068,120
2,000 Chicago, Illinois, Refg 2001 A (MBIA
Insd).................................. 0.00 01/01/21(c) 1,869,780
2,000 Chicago, Illinois, Refg 2001 A (MBIA
Insd).................................. 0.00 01/01/22(c) 1,859,180
8,000 Chicago, Illinois, Refg Ser 1992 (AMBAC
Insd).................................. 6.25 01/01/11 8,423,520
1,370 Chicago, Illinois, Transit Authority Ser
2008 (AGC Insd)........................ 5.25 06/01/26 1,452,967
940 Chicago, Illinois, Second Lien Water Ser
2008 (AGC Insd)........................ 5.00 11/01/27 978,033
670 De Kalb County, Illinois, Community Unit
School District No. 428 (FSA Insd)..... 5.00 01/01/27 693,329
305 De Kalb County, Illinois, Community Unit
School District No. 428 (FSA Insd)..... 5.00 01/01/28 314,418
10,000 Illinois, Ser 2001 (MBIA Insd)........... 5.375 04/01/15 11,172,400
10,000 Illinois, Ser 2001 (MBIA Insd)........... 5.375 04/01/16 11,176,800
5,375 Kendall Kane & Will County, Illinois,
Community Unit School District No. 308
(FSA Insd) WI.......................... 0.00 02/01/27 2,082,759
4,000 Regional Transportation Authority,
Illinois, Refg Ser 1999 (FSA Insd)..... 5.75 06/01/21 4,661,360
------------
49,816,986
------------
Indiana (1.2%)
3,000 Indiana Health Facilities Financing
Authority, Community Health Ser 2005 A
(AMBAC Insd)........................... 5.00 05/01/35 3,000,000
------------
Iowa (2.7%)
3,600 Vision Iowa Ser 2001 (MBIA Insd)......... 5.50 02/15/19 4,033,728
2,500 Vision Iowa Ser 2001 (MBIA Insd)......... 5.50 02/15/20 2,779,700
------------
6,813,428
------------
See Notes to Financial Statements
8
Morgan Stanley Insured Municipal Trust
PORTFOLIO OF INVESTMENTS - APRIL 30, 2008 (UNAUDITED) continued
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
------------------------------------------------------------------------------------------
Kentucky (5.6%)
$10,000 Louisville & Jefferson County
Metropolitan Sewer District, Kentucky,
Ser 1999 A (FGIC Insd)................. 5.75 % 05/15/33 $ 10,345,400
3,800 Louisville Board of Water Works,
Kentucky, Water Ser 2000 (FSA Insd).... 5.50 11/15/25 3,955,990
------------
14,301,390
------------
Louisiana (0.8%)
2,000 Louisiana Public Facilities Authority,
Baton Rouge General Medical Center-FHA
Insured Mtge Ser 2004 (MBIA Insd)...... 5.25 07/01/33 2,030,360
------------
Maryland (1.0%)
2,500 Maryland Economic Development
Corporation, Maryland Aviation
Administration Ser 2003 (AMT) (FSA
Insd).................................. 5.375 06/01/22 2,534,800
------------
Michigan (1.6%)
850 Ferris State University, Michigan, Ser
2008 (FSA Insd)........................ 4.50 10/01/24 854,191
425 Ferris State University, Michigan, Ser
2008 (FSA Insd)........................ 4.50 10/01/25 426,742
1,190 Wayne State University, Michigan, Ser
2008 (FSA Insd)........................ 5.00 11/15/29 1,231,400
265 Wayne State University, Michigan, Ser
2008 (FSA Insd)........................ 5.00 01/15/30 273,546
1,125 Western Michigan University, Ser 2008
(FSA Insd)............................. 5.00 11/15/23 1,184,895
------------
3,970,774
------------
Minnesota (2.8%)
3,000 Brainerd Independent School District
#181, Minnesota, Ser 2002 A (FGIC
Insd).................................. 5.375 02/01/18 3,179,520
4,000 Minneapolis, Minnesota, Fairview Health
2005 Ser D (AMBAC Insd)................ 5.00 11/15/34 4,002,400
------------
7,181,920
------------
Missouri (0.8%)
2,000 Missouri Joint Municipal Electrical
Utility Commission, Plum Point Ser 2006
(MBIA Insd)............................ 5.00 01/01/25 2,018,880
------------
Montana (0.7%)
1,750 Montana Facility Finance Authority,
Benefits Health System (AGC Insd)...... 5.00 01/01/37 1,768,288
------------
See Notes to Financial Statements
9
Morgan Stanley Insured Municipal Trust
PORTFOLIO OF INVESTMENTS - APRIL 30, 2008 (UNAUDITED) continued
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
------------------------------------------------------------------------------------------
Nevada (2.2%)
$ 4,000 Clark County, Nevada, Transportation Impr
Ltd Tax Ser 06/01/92 B (AMBAC Insd).... 6.50 % 06/01/17 $ 4,834,400
1,500 Nevada Department of Business & Industry,
Las Vegas Monorail 1st Tier Ser 2000
(AMBAC Insd)........................... 0.00 01/01/21 636,255
------------
5,470,655
------------
New Jersey (4.2%)
510 New Jersey Educational Facilities
Authority, Rowan University Ser 2008 B
(AGC Insd)............................. 5.00 07/01/26 533,990
2,770 New Jersey Housing Mortgage Finance
Authority, Home Buyer Ser 2000 CC (AMT)
(MBIA Insd)............................ 5.875 10/01/31 2,836,757
2,000 New Jersey Transportation Trust Fund
Authority, Ser 2005 C (FGIC Insd)...... 5.25 06/15/20 2,136,320
5,000 New Jersey Turnpike Authority, Ser 2003 A
(AMBAC Insd)........................... 5.00 01/01/30 5,033,600
------------
10,540,667
------------
New Mexico (0.6%)
1,500 Albuquerque, New Mexico, Gross Receipts
Lodgers' Tax Refg Ser 2004 A (FSA
Insd).................................. 5.00 07/01/37 1,525,365
------------
New York (16.6%)
2,000 New York State Dormitory Authority,
Montefiore Hospital - FHA Insured Mtge
Ser 2004 (FGIC Insd)................... 5.00 08/01/29 2,005,520
1,000 New York City Industrial Development
Agency, New York, Queens Baseball
Stadium Ser 2006 (AMBAC Insd).......... 5.00 01/01/31 1,007,630
2,000 New York City Industrial Development
Agency, New York, Yankee Stadium Ser
2006 (FGIC Insd)....................... 5.00 03/01/46 1,908,240
5,000 New York State Energy Research &
Development Authority, Brooklyn Union
Gas Co 1996 Ser (MBIA Insd) (d)........ 5.50 01/01/21 5,022,300
1,000 Long Island Power Authority, New York,
Ser 2006 A (XLCA Insd)................. 5.00 12/01/26 1,013,230
6,805 Metropolitan Transportation Authority,
New York, State Service Contract Refg
Ser 2002 B (MBIA Insd)................. 5.50 07/01/20 7,245,488
10,000 Metropolitan Transportation Authority,
New York, Transportation Refg Ser 2002
A (AMBAC Insd)......................... 5.50 11/15/17 10,778,100
2,000 Metropolitan Transportation Authority,
New York, Transportation Refg Ser 2002
A (FGIC Insd).......................... 5.00 11/15/25 2,014,480
12,000 Hudson Yards Infrastructure Corporation,
New York, Ser 2006 A (MBIA Insd)....... 4.50 02/15/47 11,194,920
------------
42,189,908
------------
North Carolina (0.8%)
2,000 University of North Carolina at
Wilmington, Student Housing Ser 2005
COPs (FGIC Insd)....................... 5.00 06/01/36 1,984,980
------------
See Notes to Financial Statements
10
Morgan Stanley Insured Municipal Trust
PORTFOLIO OF INVESTMENTS - APRIL 30, 2008 (UNAUDITED) continued
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
------------------------------------------------------------------------------------------
Ohio (1.3%)
$ 1,965 Hamilton County, Ohio, Sales Tax 2000
(AMBAC Insd)........................... 5.25 % 12/01/32 $ 1,984,277
2,125 Cleveland, Ohio, Public Power System Ser
2008B-2 (MBIA Insd).................... 0.00 11/15/28 732,891
2,800 Cleveland, Ohio, Public Power System Ser
2008B-2 (MBIA Insd).................... 0.00 11/15/38 543,536
------------
3,260,704
------------
Oregon (0.7%)
1,685 Oregon Department of Administrative
Services, COPs Ser 2005 B (FGIC Insd).. 5.00 11/01/24 1,710,258
------------
Pennsylvania (3.8%)
1,500 Delaware County Industrial Development
Authority, Pennsylvania, Aqua Inc Ser A
2005 (AMT) (FGIC Insd)................. 5.00 11/01/37 1,378,875
4,000 Pennsylvania Turnpike Commission, Ser A
2004 (AMBAC Insd)...................... 5.00 12/01/34 4,078,480
4,000 Pennsylvania Turnpike Commission, Ser R
2001 (AMBAC Insd)...................... 5.00 12/01/26 4,099,640
------------
9,556,995
------------
South Carolina (7.1%)
1,000 Medical University Hospital Authority,
South Carolina, FHA Insured Mtge Ser
2004 A (MBIA Insd)..................... 5.25 02/15/25 1,032,330
2,000 South Carolina Public Service Authority,
Santee Cooper Ser 2003 A (AMBAC Insd).. 5.00 01/01/27 2,042,760
9,325 South Carolina Public Service Authority,
Ser 2002 B (FSA Insd).................. 5.375 01/01/17 9,968,145
5,000 Grand Strand Water & Sewer Authority,
South Carolina, Refg Ser 2001 (FSA
Insd).................................. 5.00 06/01/31 5,069,800
------------
18,113,035
------------
Texas (21.7%)
10,000 Austin, Texas, Water & Wastewater Refg
Ser 2001 A & B (FSA Insd) (a).......... 5.125 05/15/27 10,086,525
2,000 Austin, Texas, Water & Wastewater Ser
2004 A (AMBAC Insd).................... 5.00 11/15/27 2,023,300
800 Friendswood Independent School District,
Texas, Ser 2008 (PSF Insd) WI.......... 5.00 02/15/27 830,056
1,840 Harris County Health Facilities
Development Corp., Texas, Thermal
Utility Ser 2008 (AGC Insd)............ 5.00 11/15/27 1,888,521
1,000 Houston Community College System, Texas,
Senior Lien Fee Ser 2008 (FSA Insd)
WI..................................... 5.00 04/15/26 1,041,390
225 Houston Community College System, Texas,
Senior Lien Fee Ser 2008 (FSA Insd)
WI..................................... 4.50 04/15/27 222,451
3,615 Houston, Texas, Hotel Occupancy Ser B.... 0.00 09/01/27 1,251,911
15,000 Houston, Texas, Combined Utility First
Lien Refg 2004 Ser A (FGIC Insd)....... 5.25 05/15/23 15,350,100
1,270 Humble Independent School District,
Texas, Ser 2008 A (AGC Insd)........... 5.00 02/15/27 1,314,666
See Notes to Financial Statements
11
Morgan Stanley Insured Municipal Trust
PORTFOLIO OF INVESTMENTS - APRIL 30, 2008 (UNAUDITED) continued
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
------------------------------------------------------------------------------------------
$ 9,970 Lower Colorado River Authority, Texas,
Refg Ser 1999 A (FSA Insd)............. 5.875% 05/15/16 $ 10,388,341
6,700 North Texas Tollway Authority, Ser D (AGC
Insd).................................. 0.00 01/01/28 2,450,257
2,000 San Antonio, Texas, Water & Refg Ser 2002
(FSA Insd)............................. 5.50 05/15/18 2,135,120
2,500 San Antonio, Texas, Water & Refg Ser 2002
(FSA Insd)............................. 5.50 05/15/20 2,661,175
2,000 San Antonio, Texas, Water & Refg Ser 2002
A (FSA Insd)........................... 5.00 05/15/32 2,024,020
410 Victoria Independent School District,
Texas, Ser 2008 (PSF Insd)............. 5.00 02/15/24 428,044
815 Victoria Independent School District,
Texas, Ser 2008 (PSF Insd)............. 5.00 02/15/25 850,868
------------
54,946,745
------------
Virginia (1.3%)
3,000 Alexandria Industrial Development
Authority, Virginia, Institute for
Defense Analysis Ser 2000 A (AMBAC
Insd).................................. 5.90 10/01/10(b) 3,269,550
------------
Washington (9.8%)
3,000 Cowlitz County, Public Utility District #
1, Washington, Production Ser 2006
(MBIA Insd)............................ 5.00 09/01/31 3,036,510
10,000 Seattle, Washington, Light & Power Refg
Rev 2001 (FSA Insd).................... 5.125 03/01/26 10,285,000
4,010 Port of Seattle, Washington, Passenger
Facility Ser 1998 A (MBIA Insd) (a).... 5.00 12/01/23 4,044,560
2,500 Port of Seattle, Washington, Ser 2001 B
(AMT) (MBIA Insd)...................... 5.625 02/01/24 2,519,975
5,000 King County, Washington, Sewer Refg 2001
(FGIC Insd)............................ 5.00 01/01/31 5,049,700
------------
24,935,745
------------
Total Tax-Exempt Municipal Bonds (Cost $400,521,436)............ 407,468,145
------------
NUMBER OF
SHARES (000)
------------
Short-Term Investment (f) (5.2%)
Investment Company
13,136 Morgan Stanley Institutional Liquidity Tax-Exempt Portfolio -
Institutional Class (Cost $13,136,163)....................... 13,136,163
-----------
Total Investments (Cost $413,657,599).......................... 420,604,308
-----------
See Notes to Financial Statements
12
Morgan Stanley Insured Municipal Trust
PORTFOLIO OF INVESTMENTS - APRIL 30, 2008 (UNAUDITED) continued
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
--------------------------------------------------------------------------------------------------
Floating Rate Note and Dealer Trusts Obligations Related to Securities
Held (-13.2%)
$(33,260) Notes with interest rates ranging from 2.48% to 2.75% at April 30, 2008
and contractual maturities of collateral ranging from 12/01/23 to
10/01/37 (See Note 1D) (e) (Cost $(33,260,000))...................... $ (33,260,000)
-------------
Total Net Investments (Cost $380,397,599) (g) (h).............. 152.9% 387,344,308
Liabilities in Excess of Other Assets.......................... (1.6) (4,049,149)
Preferred Shares of Beneficial Interest........................ (51.3) (130,000,000)
------ -------------
Net Assets Applicable to Common Shareholders................... 100.0% $ 253,295,159
===== =============
----------
Note: The categories of investments are shown as a percentage of net assets
applicable to common shareholders.
AMT Alternative Minimum Tax.
COPs Certificates of Participation.
FHA Federal Housing Authority.
WI Security purchased on a when-issued basis.
(a) Underlying security related to inverse floater entered into by the
Trust (See Note 1D).
(b) Prerefunded to call date shown.
(c) Security is a "step-up" bond where the coupon increases on
predetermined future date.
(d) A portion of this security has been physically segregated in
connection with open futures contracts in the amount of $537,555.
(e) Floating rate note obligations related to securities held. The
interest rates shown reflect the rates in effect at April 30, 2008.
(f) See Note 3 to the financial statements regarding investments in
Morgan Stanley Institutional Liquidity Tax-Exempt Portfolio-
Institutional Class.
(g) Securities have been designated as collateral in an amount equal to
$89,253,108 in connection with open futures and swap contracts and
when-issued securities.
(h) The aggregate cost for federal income tax purposes approximates the
aggregate cost for book purposes. The aggregate gross unrealized
appreciation is $11,760,687 and the aggregate gross unrealized
depreciation is $4,813,978 resulting in net unrealized appreciation
of $6,946,709.
Bond Insurance:
---------------
AGC Assured Guaranty Corporation.
AMBAC AMBAC Assurance Corporation.
FGIC Financial Guaranty Insurance Company.
FSA Financial Security Assurance Inc.
MBIA Municipal Bond Investors Assurance Corporation.
PSF Texas Permanent School Fund Guarantee Program.
XLCA XL Capital Assurance Inc.
See Notes to Financial Statements
13
Morgan Stanley Insured Municipal Trust
PORTFOLIO OF INVESTMENTS - APRIL 30, 2008 (UNAUDITED) continued
FUTURES CONTRACTS OPEN AT APRIL 30, 2008:
UNREALIZED
NUMBER OF DESCRIPTION, DELIVERY UNDERLYING FACE APPRECIATION
CONTRACTS LONG/SHORT MONTH AND YEAR AMOUNT AT VALUE (DEPRECIATION)
-------------------------------------------------------------------------------------------
311 Long Swap Future 10 year $ 35,084,688 $ 35,313
June 2008
105 Long U.S. Treasury Notes 5 year 11,758,360 (82,383)
June 2008
26 Short U.S. Treasury Notes 2 year (5,529,875) 39,535
June 2008
128 Short U.S. Treasury Notes 10 year (14,824,000) 130,309
June 2008
286 Short U.S. Treasury Bonds 20 year (33,430,720) 47,986
June 2008
---------
Net Unrealized Appreciation............................. $ 170,760
=========
INTEREST RATE SWAP CONTRACTS OPEN AT APRIL 30, 2008:
NOTIONAL PAYMENTS PAYMENTS UNREALIZED
AMOUNT RECEIVED MADE TERMINATION APPRECIATION
COUNTERPARTY (000'S) BY TRUST BY TRUST DATE (DEPRECIATION)
--------------------------------------------------------------------------------------------------------------------------------
Bank of America N.A. $16,070 Fixed Rate 5.580% Floating Rate 0.000% @ February 28, 2018 $ 293,438
Bank of America N.A. 4,815 Fixed Rate 5.070 Floating Rate 0.000 @ April 14, 2018 (5,056)
Bank of America N.A. 4,775 Fixed Rate 4.982 Floating Rate 0.000 @ April 15, 2018 (20,150)
Bank of America N.A. 20,540 Floating Rate 0.000 @ Fixed Rate 5.990 February 28, 2023 (314,878)
Bank of America N.A. 6,160 Floating Rate 0.000 @ Fixed Rate 5.470 April 14, 2023 (4,066)
Bank of America N.A. 5,870 Floating Rate 0.000 @ Fixed Rate 5.380 April 15, 2023 10,860
JPMorgan Chase Bank N.A. 16,940 Fixed Rate 5.385 Floating Rate 0.000 @ February 14, 2018 192,608
JPMorgan Chase Bank N.A. 21,580 Floating Rate 0.000 @ Fixed Rate 5.831 February 14, 2023 (235,654)
Merrill Lynch & Co., Inc. 6,375 Fixed Rate 5.000 Floating Rate 0.000 @ April 15, 2018 (22,886)
Merrill Lynch & Co., Inc. 8,245 Floating Rate 0.000 @ Fixed Rate 5.395 April 15, 2023 11,790
---------
Net Unrealized Depreciation..................................................... $ (93,994)
=========
----------
@ Floating rate represents USD-3 months LIBOR.
See Notes to Financial Statements
14
Morgan Stanley Insured Municipal Trust
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
April 30, 2008 (unaudited)
Assets:
Investments in securities, at value (cost $400,521,436)........ $407,468,145
Investment in affiliate, at value (cost $13,136,163)........... 13,136,163
Unrealized appreciation on open swap contracts................. 508,696
Receivable for:
Interest.................................................... 5,511,020
Dividends from affiliate.................................... 27,979
Prepaid expenses and other assets.............................. 40,487
------------
Total Assets................................................ 426,692,490
------------
Liabilities:
Floating rate note and dealer trusts obligations............... 33,260,000
Unrealized depreciation on open swap contracts................. 602,690
Payable for:
Investments purchased....................................... 9,254,573
Investment advisory fee..................................... 90,636
Variation margin............................................ 27,968
Administration fee.......................................... 27,568
Transfer agent fee.......................................... 1,325
Accrued expenses and other payables............................ 132,571
------------
Total Liabilities........................................... 43,397,331
------------
Preferred shares of beneficial interest (at liquidation value)
(1,000,000 shares authorized of non-participating $.01 par
value, 2,600 shares outstanding)............................. 130,000,000
------------
Net Assets Applicable to Common Shareholders................ $253,295,159
============
Composition of Net Assets Applicable to Common Shareholders:
Common shares of beneficial interest (unlimited shares
authorized of $.01 par value, 17,484,372 shares
outstanding)................................................. $242,909,375
Net unrealized appreciation.................................... 7,023,475
Accumulated undistributed net investment income................ 567,369
Accumulated undistributed net realized gain.................... 2,794,940
------------
Net Assets Applicable to Common Shareholders................ $253,295,159
============
Net Asset Value Per Common Share
($253,295,159 divided by 17,484,372 common shares
outstanding)................................................. $14.49
======
See Notes to Financial Statements
15
Morgan Stanley Insured Municipal Trust
FINANCIAL STATEMENTS continued
Statement of Operations
For the six months ended April 30, 2008 (unaudited)
Net Investment Income:
Income
Interest........................................................ $ 9,928,861
Dividends from affiliate........................................ 130,310
-----------
Total Income................................................. 10,059,171
-----------
Expenses
Interest and residual trust expenses............................ 611,726
Investment advisory fee......................................... 520,298
Auction commission fees......................................... 161,354
Administration fee.............................................. 154,162
Custodian fees.................................................. 29,616
Professional fees............................................... 28,811
Shareholder reports and notices................................. 13,117
Auction agent fees.............................................. 10,227
Listing fees.................................................... 10,030
Transfer agent fees and expenses................................ 7,412
Trustees' fees and expenses..................................... 5,744
Other........................................................... 32,227
-----------
Total Expenses............................................... 1,584,724
Less: expense offset............................................ (3,407)
Less: rebate from Morgan Stanley affiliated cash sweep
(Note 3)...................................................... (5,960)
-----------
Net Expenses................................................. 1,575,357
-----------
Net Investment Income........................................ 8,483,814
-----------
Realized and Unrealized Gain (Loss):
Realized Gain on:
Investments..................................................... 2,818,358
Futures contracts............................................... 53,703
-----------
Net Realized Gain............................................ 2,872,061
-----------
Change in Unrealized Appreciation/Depreciation on:
Investments..................................................... (7,553,994)
Futures contracts............................................... 93,821
Swap contracts.................................................. (93,994)
-----------
Net Change in Unrealized Appreciation/Depreciation........... (7,554,167)
-----------
Net Loss..................................................... (4,682,106)
-----------
Dividends to preferred shareholders from net investment income.. (2,305,466)
-----------
Net Increase.................................................... $ 1,496,242
===========
See Notes to Financial Statements
16
Morgan Stanley Insured Municipal Trust
FINANCIAL STATEMENTS continued
Statements of Changes in Net Assets
FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED
APRIL 30, 2008 OCTOBER 31, 2007
-------------- ----------------
(unaudited)
Increase (Decrease) in Net Assets:
Operations:
Net investment income.............................. $ 8,483,814 $ 17,063,712
Net realized gain.................................. 2,872,061 117,173
Net change in unrealized
appreciation/depreciation........................ (7,554,167) (8,547,417)
Dividends to preferred shareholders from net
investment income................................ (2,305,466) (4,952,726)
------------ ------------
Net Increase.................................... 1,496,242 3,680,742
------------ ------------
Dividends and Distributions to Common Shareholders
from:
Net investment income.............................. (5,794,232) (12,747,730)
Net realized gain.................................. (349,424) (2,487,493)
------------ ------------
Total Dividends and Distributions............... (6,143,656) (15,235,223)
------------ ------------
Decrease from transactions in common shares of
beneficial interest.............................. (2,490,445) (3,891,951)
------------ ------------
Net Decrease.................................... (7,137,859) (15,446,432)
Net Assets Applicable to Common Shareholders:
Beginning of period................................ 260,433,018 275,879,450
------------ ------------
End of Period
(Including accumulated undistributed net investment
income of $567,369 and $183,253, respectively)..... $253,295,159 $260,433,018
============ ============
See Notes to Financial Statements
17
Morgan Stanley Insured Municipal Trust
NOTES TO FINANCIAL STATEMENTS - APRIL 30, 2008 (UNAUDITED)
1. Organization and Accounting Policies
Morgan Stanley Insured Municipal Trust (the "Trust") is registered under the
Investment Company Act of 1940, as amended, as a diversified, closed-end
management investment company. The Trust's investment objective is to provide
current income which is exempt from federal income taxes. The Trust was
organized as a Massachusetts business trust on October 3, 1991 and commenced
operations on February 28, 1992.
The following is a summary of significant accounting policies:
A. Valuation of Investments -- (1) portfolio securities are valued by an outside
independent pricing service approved by the Trustees. The pricing service uses
both a computerized grid matrix of tax-exempt securities and evaluations by its
staff, in each case based on information concerning market transactions and
quotations from dealers which reflect the mean between the last reported bid and
asked price. The portfolio securities are thus valued by reference to a
combination of transactions and quotations for the same or other securities
believed to be comparable in quality, coupon, maturity, type of issue, call
provisions, trading characteristics and other features deemed to be relevant.
The Trustees believe that timely and reliable market quotations are generally
not readily available for purposes of valuing tax-exempt securities and that the
valuations supplied by the pricing service are more likely to approximate the
fair value of such securities; (2) futures are valued at the latest sale price
on the commodities exchange on which they trade unless it is determined that
such price does not reflect their market value, in which case they will be
valued at their fair value as determined in good faith under procedures
established by and under the supervision of the Trustees; (3) interest rate
swaps are marked-to-market daily based upon quotations from market makers; (4)
investments in open-end mutual funds, including the Morgan Stanley Institutional
Liquidity Funds, are valued at the net asset value as of the close of each
business day; and (5) short-term debt securities having a maturity date of more
than sixty days at time of purchase are valued on a mark-to-market basis until
sixty days prior to maturity and thereafter at amortized cost based on their
value on the 61st day. Short-term debt securities having a maturity date of
sixty days or less at the time of purchase are valued at amortized cost.
B. Accounting for Investments -- Security transactions are accounted for on the
trade date (date the order to buy or sell is executed). Realized gains and
losses on security transactions are determined by the identified cost method.
Discounts are accreted and premiums are amortized over the life of the
respective securities and are included in interest income. Interest income is
accrued daily.
C. Futures Contracts -- A futures contract is an agreement between two parties
to buy and sell financial instruments or contracts based on financial indices at
a set price on a future date. Upon
18
Morgan Stanley Insured Municipal Trust
NOTES TO FINANCIAL STATEMENTS - APRIL 30, 2008 (UNAUDITED) continued
entering into such a contract, the Trust is required to pledge to the broker
cash, U.S. Government securities or other liquid portfolio securities equal to
the minimum initial margin requirements of the applicable futures exchange.
Pursuant to the contract, the Trust agrees to receive from or pay to the broker
an amount of cash equal to the daily fluctuation in the value of the contract.
Such receipts or payments known as variation margin are recorded by the Trust as
unrealized gains and losses. Upon closing of the contract, the Trust realizes a
gain or loss equal to the difference between the value of the contract at the
time it was opened and the value at the time it was closed.
D. Floating Rate Note and Dealer Trusts Obligations Related to Securities
Held -- The Trust enters into transactions in which it transfers to Dealer
Trusts ("Dealer Trusts"), fixed rate bonds in exchange for cash and residual
interests in the Dealer Trusts' assets and cash flows, which are in the form of
inverse floating rate investments. The Dealer Trusts fund 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 Trust enters into
shortfall agreements with the Dealer Trusts which commit the Trust to pay the
Dealer Trusts, in certain circumstances, the difference between the liquidation
value of the fixed rate bonds held by the Dealer Trusts and the liquidations
value of the floating rate notes held by third parties, as well as any
shortfalls in interest cash flows. 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. 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 and dealer trust obligations" on the Statement of Assets and
Liabilities. The Trust records the interest income from the fixed rate bonds
under the caption "Interest Income" and records the expenses related to floating
rate obligations and any administrative expenses of the Dealer Trusts under the
caption "Interest and residual trust expenses" in the Trust's statement of
Operations. The 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. At April 30,
2008, Trust investments with a value of $44,496,500 are held by the Dealer
Trusts and serve as collateral for the $33,260,000 in the floating rate note and
dealer trusts obligations outstanding at that date. Contractual maturities of
the floating rate note obligations and interest rates in effect at April 30,
2008 are presented in the Portfolio of Investments.
E. Interest Rate Swaps -- Interest rate swaps involve the exchange of
commitments to pay and receive interest based on a notional principal amount.
Net periodic interest payments to be received or paid are accrued daily and are
recorded as realized gains or losses in the Statement of
19
Morgan Stanley Insured Municipal Trust
NOTES TO FINANCIAL STATEMENTS - APRIL 30, 2008 (UNAUDITED) continued
Operations. The Trust may pay or receive cash to collateralize interest rate
swap contracts. This cash collateral is recorded as assets/liabilities on the
Trust's books. Any cash received may be invested in Morgan Stanley Institutional
Liquidity Funds.
F. Federal Income Tax Policy -- It is the Trust's policy to comply with the
requirements of Subchapter M of the Internal Revenue Code applicable to
regulated investment companies and to distribute substantially all of its
taxable and nontaxable income to its shareholders. Therefore, no provision for
federal income tax is required. The Trust files tax returns with the U.S.
Internal Revenue Service, New York State and New York City. The Trust adopted
the provisions of the Financial Accounting Standards Board ("FASB")
Interpretation No. 48 ("FIN 48") Accounting for Uncertainty in Income Taxes on
April 29, 2008. FIN 48 sets forth a minimum threshold for financial statement
recognition of the benefit of a tax position taken or expected to be taken in a
tax return. The implementation of FIN 48 did not result in any unrecognized tax
benefits in the accompanying financial statements. If applicable, the Trust
recognizes interest accrued related to unrecognized tax benefits in interest
expense and penalties in other expenses in the Statement of Operations. Each of
the tax years in the four year period ended April 30, 2008, remains subject to
examination by taxing authorities.
G. Dividends and Distributions to Shareholders -- Dividends and distributions to
shareholders are recorded on the ex-dividend date.
H. Use of Estimates -- The preparation of financial statements in accordance
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts and disclosures.
Actual results could differ from those estimates.
2. Investment Advisory/Administration Agreements
Pursuant to an Investment Advisory Agreement with Morgan Stanley Investment
Advisors Inc. (the "Investment Adviser"), the Trust pays the Investment Adviser
an advisory fee, calculated weekly and payable monthly, by applying the annual
rate of 0.27% to the Trust's average weekly net assets including preferred
shares.
Pursuant to an Administration Agreement with Morgan Stanley Services Company
Inc. (the "Administrator"), an affiliate of the Investment Adviser, the Trust
pays an administration fee, calculated weekly and payable monthly, by applying
the annual rate of 0.08% to the Trust's average weekly net assets including
preferred shares.
20
Morgan Stanley Insured Municipal Trust
NOTES TO FINANCIAL STATEMENTS - APRIL 30, 2008 (UNAUDITED) continued
Under an agreement between the Administrator and State Street Bank and Trust
Company ("State Street"), State Street provides certain administrative services
to the Trust. For such services, the Administrator pays State Street a portion
of the fee the Administrator receives from the Trust.
3. Security Transactions and Transactions with Affiliates
The Trust invests in Morgan Stanley Institutional Liquidity Tax-Exempt
Portfolio -- Institutional Class, an open-end management investment company
managed by the Investment Adviser. Investment advisory fees paid by the Trust
are reduced by an amount equal to the advisory and administrative service fees
paid by Morgan Stanley Institutional Liquidity Tax-Exempt
Portfolio -- Institutional Class with respect to assets invested by the Trust in
Morgan Stanley Institutional Liquidity Tax-Exempt Portfolio -- Institutional
Class. For the six months ended April 30, 2008, advisory fees paid were reduced
by $5,960 relating to the Trust's investment in Morgan Stanley Institutional
Liquidity Tax-Exempt Portfolio -- Institutional Class. Income distributions
earned by the Trust are recorded as dividends from affiliate in the Statement of
Operations and totaled $130,310 for the six months ended April 30, 2008. During
the six months ended April 30, 2008, cost of purchases and sales of investments
in Morgan Stanley Institutional Liquidity Tax-Exempt Portfolio -- Institutional
Class aggregated $46,176,889 and $39,577,461, respectively.
The cost of purchases and proceeds from sales of portfolio securities, excluding
short-term investments, for the six months ended April 30, 2008, aggregated
$36,021,143 and $41,483,361, respectively.
The Trust has an unfunded noncontributory defined benefit pension plan covering
certain independent Trustees of the Trust who will have served as independent
Trustees for at least five years at the time of retirement. Benefits under this
plan are based on factors which include years of service and compensation. The
Trustees voted to close the plan to new participants and eliminate the future
benefits growth due to increases to compensation after July 31, 2003. Aggregate
pension costs for the six months ended April 30, 2008, included in Trustees'
fees and expenses in the Statement of Operations amounted to $2,541. At April
30, 2008, the Trust had an accrued pension liability of $55,456 which is
included in accrued expenses in the Statement of Assets and Liabilities.
The Trust has an unfunded Deferred Compensation Plan (the "Compensation Plan")
which allows each independent Trustee to defer payment of all, or a portion, of
the fees he or she receives for serving on the Board of Trustees. Each eligible
Trustee generally may elect to have the deferred amounts credited with a return
equal to the total return on one or more of the Morgan Stanley funds that are
offered as investment options under the Compensation Plan.
Appreciation/depreciation and
21
Morgan Stanley Insured Municipal Trust
NOTES TO FINANCIAL STATEMENTS - APRIL 30, 2008 (UNAUDITED) continued
distributions received from these investments are recorded with an offsetting
increase/decrease in the deferred compensation obligation and do not affect the
net asset value of the Trust.
4. Preferred Shares of Beneficial Interest
The Trust is authorized to issue up to 1,000,000 non-participating preferred
shares of beneficial interest having a par value of $.01 per share, in one or
more series, with rights as determined by the Trustees, without approval of the
common shareholders. The Trust has issued Series TU and TH Auction Rate
Preferred Shares ("preferred shares") which have a liquidation value of $50,000
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 $50,000 per share plus accumulated but unpaid dividends, whether or not
declared, thereon to the date of redemption.
Dividends, which are cumulative, are reset through auction procedures.
AMOUNT RANGE OF
SERIES SHARES+ IN THOUSANDS+ RATE+ RESET DATE DIVIDEND RATES++
------ ------- ------------- ----- ---------- ----------------
TU 800 $40,000 2.82% 05/07/08 2.65% - 4.60%
TH 1,800 90,000 3.02 05/02/08 2.59 - 4.75
----------
+ As of April 30, 2008.
++ For the six months ended April 30, 2008.
Subsequent to April 30, 2008 and up through June 6, 2008, the Trust paid
dividends to Series TU and TH at rates ranging from 2.37% to 2.90%, in the
aggregate amount of $369,718.
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.
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.
22
Morgan Stanley Insured Municipal Trust
NOTES TO FINANCIAL STATEMENTS - APRIL 30, 2008 (UNAUDITED) continued
5. Common Shares of Beneficial Interest
Transactions in common shares of beneficial interest were as follows:
CAPITAL
PAID IN
PAR EXCESS OF
SHARES VALUE PAR VALUE
---------- -------- ------------
Balance, October 31, 2006........................ 17,953,838 $179,539 $249,112,232
Treasury shares purchased and retired (weighted
average discount 6.58%)+++..................... (279,625) (2,796) (3,889,155)
---------- -------- ------------
Balance, October 31, 2007........................ 17,674,213 176,743 245,223,077
Treasury shares purchased and retired (weighted
average discount 11.24%)+++.................... (189,841) (1,898) (2,488,547)
---------- -------- ------------
Balance, April 30, 2008.......................... 17,484,372 $174,845 $242,734,530
========== ======== ============
----------
+++ The Trustees have voted to retire the shares purchased.
6. Dividends to Common Shareholders
On April 8, 2008, the Trust declared the following dividends from net investment
income:
AMOUNT RECORD PAYABLE
PER SHARE DATE DATE
--------- ------------ -------------
$0.055 May 23, 2008 May 30, 2008
$0.055 June 20 2008 June 27, 2008
7. Expense Offset
The expense offset represents a reduction of the fees and expenses for interest
earned on cash balances maintained by the Trust with the transfer agent and
custodian.
8. Purposes of and Risks Relating to Certain Financial Instruments
The Trust may invest a portion of its assets in inverse floating rate
instruments, either through outright purchases of inverse floating rate
securities or through the transfer of bonds to a Dealer Trusts in exchange for
cash and residual interests in the Dealer Trusts (See Note 1D). These
investments are typically used by the Trust in seeking to enhance the yield of
the portfolio. These instruments typically involve greater risks than a fixed
rate municipal bond. In particular, these instruments are acquired through
leverage or may have leverage embedded in them and therefore involve many of the
risks associated with leverage. Leverage is a speculative technique that may
expose the Trust to greater risk and increased costs. Leverage may cause the
Trust's net asset value to be more volatile than if it had not been leveraged
because leverage tends to magnify the effect of any increases or decreases in
the value of the Trust's portfolio securities. The use of leverage may
23
Morgan Stanley Insured Municipal Trust
NOTES TO FINANCIAL STATEMENTS - APRIL 30, 2008 (UNAUDITED) continued
also cause the Trust to liquidate portfolio positions when it may not be
advantageous to do so in order to satisfy its obligations with respect to
inverse floating rate instruments.
To hedge against adverse interest rate changes, the Trust may invest in
financial futures contracts or municipal bond index futures contracts ("futures
contracts").
These futures contracts involve elements of market risk in excess of the amount
reflected in the Statement of Assets and Liabilities. The Trust bears the risk
of an unfavorable change in the value of the underlying securities. Risks may
also arise upon entering into these contracts from the potential inability of
the counterparties to meet the terms of their contracts.
The Trust may enter into interest rate swaps and may purchase or sell interest
rate caps, floors and collars. The Trust expects to enter into these
transactions primarily to manage interest rate risk, hedge portfolio positions
and preserve a return or spread on a particular investment or portion of its
portfolio. The Trust may also enter into these transactions to protect against
any increase in the price of securities the Trust anticipates purchasing at a
later date. Interest rate swap transactions are subject to market risk, risk of
default by the other party to the transaction, risk of imperfect correlation and
manager risk. Such risks may exceed the related amounts shown in the Statements
of Assets and Liabilities.
9. Federal Income Tax Status
The amount of dividends and distributions from net investment income and net
realized capital gains are determined in accordance with federal income tax
regulations which may differ from generally accepted accounting principles.
These "book/tax" differences are either considered temporary or permanent in
nature. To the extent these differences are permanent in nature, such amounts
are reclassified within the capital accounts based on their federal tax-basis
treatment; temporary differences do not require reclassification. Dividends and
distributions which exceed net investment income and net realized capital gains
for tax purposes are reported as distributions of paid-in-capital.
As of October 31, 2007, the Trust had temporary book/tax differences primarily
attributable to book amortization of discounts on debt securities and mark-to-
market of open futures contracts.
10. Accounting Pronouncements
On March 19, 2008, FASB released Statement of Financial Accounting Standards No.
161, "Disclosures about Derivative Instruments and Hedging Activities" ("FAS
161"). FAS 161 requires qualitative disclosures about objectives and strategies
for using derivatives, quantitative disclosures about fair value amounts of and
gains and losses on derivative instruments, and disclosures about
24
Morgan Stanley Insured Municipal Trust
NOTES TO FINANCIAL STATEMENTS - APRIL 30, 2008 (UNAUDITED) continued
credit- risk-related contingent features in derivative agreements. The
application of FAS 161 is required for fiscal years beginning after November 15,
2008 and interim periods within those fiscal years. At this time, management is
evaluating the implications of FAS 161 and its impact on the financial
statements has not yet been determined.
In September 2006, Statement of Financial Accounting Standards No. 157, Fair
Value Measurements (SFAS 157), was issued and is effective for fiscal years
beginning after November 15, 2007. SFAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. Management is currently evaluating the impact the adoption of SFAS
157 will have on the Trust's financial statement disclosures.
25
Morgan Stanley Insured Municipal Trust
FINANCIAL HIGHLIGHTS
Selected ratios and per share data for a common share of beneficial interest
outstanding throughout each period:
FOR THE SIX FOR THE YEAR ENDED OCTOBER 31,
MONTHS ENDED --------------------------------------------
APRIL 30, 2008 2007 2006 2005
-------------- -------- -------- --------
(unaudited)
Selected Per Share Data:
Net asset value, beginning of period......... $14.74 $15.37 $15.23 $15.49
--------- --------- --------- ---------
Income (loss) from investment operations:
Net investment income (1)................. 0.48 0.96 0.97 0.96
Net realized and unrealized gain (loss)... (0.27) (0.47) 0.30 (0.35)
Common share equivalent of dividends paid
to preferred shareholders(1)............... (0.13) (0.28) (0.24) (0.13)
--------- --------- --------- ---------
Total income from investment operations...... 0.08 0.21 1.03 0.48
--------- --------- --------- ---------
Less dividends and distributions from:
Net investment income..................... (0.33) (0.72) (0.80) (0.81)
Net realized gain......................... (0.02) (0.14) (0.13) --
--------- --------- --------- ---------
Total dividends and distributions............ (0.35) (0.86) (0.93) (0.81)
--------- --------- --------- ---------
Anti-dilutive effect of acquiring treasury
shares (1).................................. 0.02 0.02 0.04 0.07
--------- --------- --------- ---------
Net asset value, end of period............... $14.49 $14.74 $15.37 $15.23
========= ========= ========= =========
Market value, end of period.................. $13.06 $13.15 $14.26 $13.60
========= ========= ========= =========
Total Return (2)............................. 2.03 %(5) (2.08)% 11.91 % 3.86 %
Ratios to Average Net Assets of Common
Shareholders:
Total expenses (before expense offset)....... 1.23 %(6)(4) 1.41 %(3)(4) 0.91 %(3) 0.78 %(3)
Total expenses (before expense offset,
exclusive of interest and residual trust
expenses)................................... 0.75 %(6)(4) 0.76 %(3)(4) 0.74 %(3) 0.78 %(3)
Net investment income before preferred stock
dividends................................... 6.62 %(6)(4) 6.43 %(4) 6.43 % 6.24 %
Preferred stock dividends.................... 1.80 %(6) 1.87 % 1.56 % 0.87 %
Net investment income available to common
shareholders................................ 4.82 %(6)(4) 4.56 %(4) 4.87 % 5.37 %
Supplemental Data:
Net assets applicable to common shareholders,
end of period, in thousands................. $253,295 $260,433 $275,879 $282,471
Asset coverage on preferred shares at end of
period...................................... 295 % 300 % 312 % 317 %
Portfolio turnover rate...................... 10 %(5) 6 % 15 % 14 %
FOR THE YEAR ENDED OCTOBER
31,
--------------------------
2004 2003
-------- --------
Selected Per Share Data:
Net asset value, beginning of period......... $15.38 $15.50
--------- ---------
Income (loss) from investment operations:
Net investment income (1)................. 0.96 0.97
Net realized and unrealized gain (loss)... 0.16 0.14
Common share equivalent of dividends paid
to preferred shareholders(1)............... (0.11) (0.13)
--------- ---------
Total income from investment operations...... 1.01 0.98
--------- ---------
Less dividends and distributions from:
Net investment income..................... (0.87) (0.90)
Net realized gain......................... (0.08) (0.23)
--------- ---------
Total dividends and distributions............ (0.95) (1.13)
--------- ---------
Anti-dilutive effect of acquiring treasury
shares (1).................................. 0.05 0.03
--------- ---------
Net asset value, end of period............... $15.49 $15.38
========= =========
Market value, end of period.................. $13.88 $14.38
========= =========
Total Return (2)............................. 3.21 % 9.78 %
Ratios to Average Net Assets of Common
Shareholders:
Total expenses (before expense offset)....... 0.82 %(3) 0.80 %(3)
Total expenses (before expense offset,
exclusive of interest and residual trust
expenses)................................... 0.82 %(3) 0.80 %(3)
Net investment income before preferred stock
dividends................................... 6.34 % 6.26 %
Preferred stock dividends.................... 0.69 % 0.87 %
Net investment income available to common
shareholders................................ 5.65 % 5.39 %
Supplemental Data:
Net assets applicable to common shareholders,
end of period, in thousands................. $300,329 $309,296
Asset coverage on preferred shares at end of
period...................................... 331 % 338 %
Portfolio turnover rate...................... 14 % 11 %
----------
(1) The per share amounts were computed using an average number of common
shares outstanding during the period.
(2) Total return is based upon the current market value on the last day of
each period reported. Dividends and distributions are assumed to be
reinvested at the prices obtained under the Trust's dividend reinvestment
plan. Total return does not reflect brokerage commissions.
(3) Does not reflect the effect of expense offset of 0.01%.
(4) Reflects rebates of certain Trust expenses in connection with the
investments in Morgan Stanley Institutional Liquidity Tax-Exempt Portfolio
- Institutional Class during the period. As a result of such rebates, the
expenses as a percentage of its net assets had an effect of less than
0.005%.
(5) Not annualized.
(6) Annualized.
See Notes to Financial Statements
26
Morgan Stanley Insured Municipal Trust
REVISED INVESTMENT POLICY (UNAUDITED)
While the Trust's policy is to emphasize investments in municipal obligations
with longer-term maturities because generally longer-term obligations, while
more susceptible to market fluctuations resulting from changes in interest
rates, produce higher yields than short-term obligations, the Trust no longer
expects to maintain a specific average weighted maturity of its portfolio. As a
result of changes in the fixed-income and municipal marketplace, the Trust's
average portfolio maturity will vary depending upon market conditions and other
factors.
27
Morgan Stanley Insured Municipal Trust
MORGAN STANLEY INSURED MUNICIPAL TRUST
AN IMPORTANT NOTICE CONCERNING OUR U.S. PRIVACY POLICY (UNAUDITED)
We are required by federal law to provide you with a copy of our Privacy Policy
annually.
The following Policy applies to current and former individual investors in
Morgan Stanley Advisor closed end funds. This Policy is not applicable to
partnerships, corporations, trusts or other non-individual clients or account
holders. Please note that we may amend this Policy at any time, and will inform
you of any changes to this Policy as required by law.
WE RESPECT YOUR PRIVACY
We appreciate that you have provided us with your personal financial
information. We strive to maintain the privacy of such information while we help
you achieve your financial objectives. This Policy describes what non-public
personal information we collect about you, why we collect it, and when we may
share it with others. We hope this Policy will help you understand how we
collect and share non-public personal information that we gather about you.
Throughout this Policy, we refer to the non-public information that personally
identifies you or your accounts as "personal information."
1. WHAT PERSONAL INFORMATION DO WE COLLECT ABOUT YOU?
To serve you better and manage our business, it is important that we collect and
maintain accurate information about you. We may obtain this information from
applications and other forms you submit to us, from your dealings with us, from
consumer reporting agencies, from our Web sites and from third parties and other
sources.
FOR EXAMPLE:
- We may collect information such as your name, address, e-mail address,
telephone/fax numbers, assets, income and investment objectives through
applications and other forms you submit to us.
- We may obtain information about account balances, your use of account(s) and
the types of products and services you prefer to receive from us through your
dealings and transactions with us and other sources.
- We may obtain information about your creditworthiness and credit history from
consumer reporting agencies.
- We may collect background information from and through third-party vendors to
verify representations you have made and to comply with various regulatory
requirements.
- If you interact with us through our public and private Web sites, we may
collect information that you provide directly through online communications
(such as an e-mail address). We may also collect information about your
Internet service provider, your domain name, your computer's operating system
and Web browser, your use of our Web sites and your product and service
preferences,
28
Morgan Stanley Insured Municipal Trust
MORGAN STANLEY ADVISOR CLOSED END FUNDS
AN IMPORTANT NOTICE CONCERNING OUR U.S. PRIVACY POLICY (UNAUDITED) continued
through the use of "cookies." "Cookies" recognize your computer each time you
return to one of our sites, and help to improve our sites' content and
personalize your experience on our sites by, for example, suggesting offerings
that may interest you. Please consult the Terms of Use of these sites for more
details on our use of cookies.
2. WHEN DO WE DISCLOSE PERSONAL INFORMATION WE COLLECT ABOUT YOU?
To provide you with the products and services you request, to serve you better
and to manage our business, we may disclose personal information we collect
about you to our affiliated companies and to non-affiliated third parties as
required or permitted by law.
A. INFORMATION WE DISCLOSE TO OUR AFFILIATED COMPANIES. We do not disclose
personal information that we collect about you to our affiliated companies
except to enable them to provide services on our behalf or as otherwise required
or permitted by law.
B. INFORMATION WE DISCLOSE TO THIRD PARTIES. We do not disclose personal
information that we collect about you to non-affiliated third parties except to
enable them to provide services on our behalf, to perform joint marketing
agreements with other financial institutions, or as otherwise required or
permitted by law. For example, some instances where we may disclose information
about you to nonaffiliated third parties include: for servicing and processing
transactions, to offer our own products and services, to protect against fraud,
for institutional risk control, to respond to judicial process or to perform
services on our behalf. When we share personal information with these companies,
they are required to limit their use of personal information to the particular
purpose for which it was shared and they are not allowed to share personal
information with others except to fulfill that limited purpose.
3. HOW DO WE PROTECT THE SECURITY AND CONFIDENTIALITY OF PERSONAL INFORMATION WE
COLLECT ABOUT YOU?
We maintain physical, electronic and procedural security measures to help
safeguard the personal information we collect about you. We have internal
policies governing the proper handling of client information. Third parties that
provide support or marketing services on our behalf may also receive personal
information, and we require them to adhere to confidentiality standards with
respect to such information.
29
(This Page Intentionally Left Blank)
(This Page Intentionally Left Blank)
TRUSTEES
Frank L. Bowman
Michael Bozic
Kathleen A. Dennis
James F. Higgins
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Michael E. Nugent
W. Allen Reed
Fergus Reid
OFFICERS
Michael E. Nugent
Chairperson of the Board
Ronald E. Robison
President and Principal Executive Officer
Kevin Klingert
Vice President
Dennis F. Shea
Vice President
Amy R. Doberman
Vice President
Carsten Otto
Chief Compliance Officer
Stefanie V. Chang Yu
Vice President
Francis J. Smith
Treasurer and Chief Financial Officer
Mary E. Mullin
Secretary
TRANSFER AGENT
Computershare Trust Company, N.A.
P.O. Box 43078
Providence, RI 02940-3078
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Deloitte & Touche LLP
Two World Financial Center
New York, New York 10281
LEGAL COUNSEL
Clifford Chance US LLP
31 West 52nd Street
New York, New York 10019
COUNSEL TO THE INDEPENDENT TRUSTEES
Kramer Levin Naftalis & Frankel LLP
1177 Avenue of the Americas
New York, New York 10036
INVESTMENT ADVISER
Morgan Stanley Investment Advisors Inc.
522 Fifth Avenue
New York, New York 10036
The financial statements included herein have been taken from the records of the
Trust without examination by the independent auditors and accordingly they do
not express an opinion thereon.
(c) 2008 Morgan Stanley
[MORGAN STANLEY LOGO]
MORGAN STANLEY FUNDS
Morgan Stanley
Insured Municipal Trust
Semiannual Report
April 30, 2008
IMTSAN
IU08-03253P-Y04/08
Item 2. Code of Ethics.
Not applicable for semiannual reports.
Item 3. Audit Committee Financial Expert.
Not applicable for semiannual reports.
Item 4. Principal Accountant Fees and Services
Not applicable for semiannual reports.
Item 5. Audit Committee of Listed Registrants.
Not applicable for semiannual reports.
Item 6.
Refer to Item 1.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.
Not applicable for semiannual reports.
Item 8. Portfolio Managers of Closed-End Management Investment Companies
Applicable only to reports covering periods ending on or after December 31,
2005.
Item 9. Closed-End Fund Repurchases
REGISTRANT PURCHASE OF EQUITY SECURITIES
-----------------------------------------------------------------------------------------------------------
Period (a) Total (b) Average (c) Total (d) Maximum
Number of Price Paid Number of Number (or
Shares (or per Share Shares (or Approximate
Units) (or Unit) Units) Dollar Value)
Purchased Purchased as of Shares (or
Part of Publicly Units) that May
Announced Yet Be Purchased
Plans or Under the Plans
Programs or Programs
-----------------------------------------------------------------------------------------------------------
November 1, --
November 30, 2007 37,250 12.8086 N/A N/A
-----------------------------------------------------------------------------------------------------------
December 1, --
December 31, 2007 65,680 12.8300 N/A N/A
-----------------------------------------------------------------------------------------------------------
January 1, --
January 31, 2008 57,910 13.5332 N/A N/A
-----------------------------------------------------------------------------------------------------------
February 1 --
February 29, 2008 29,001 13.2835 N/A N/A
-----------------------------------------------------------------------------------------------------------
March 1 --
March 31, 2008 N/A N/A
-----------------------------------------------------------------------------------------------------------
April 1, --
April 30, 2008 N/A N/A
-----------------------------------------------------------------------------------------------------------
Total 189,841 13.1138 N/A N/A
-----------------------------------------------------------------------------------------------------------
Item 10. Submission of Matters to a Vote of Security Holders
Not applicable.
Item 11. Controls and Procedures
(a) The Trust's/Fund's principal executive officer and principal financial
officer have concluded that the Trust's/Fund's disclosure controls and
procedures are sufficient to ensure that information required to be disclosed by
the Trust/Fund in this Form N-CSR was recorded, processed, summarized and
reported within the time periods specified in the Securities and Exchange
Commission's rules and forms, based upon such officers' evaluation of these
controls and procedures as of a date within 90 days of the filing date of the
report.
2
(b) There were no changes in the registrant's internal control over financial
reporting that occurred during the second fiscal quarter of the period covered
by this report that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial reporting.
Item 12. Exhibits
(a) Code of Ethics - Not applicable for semiannual reports.
(b) A separate certification for each principal executive officer and principal
financial officer of the registrant are attached hereto as part of EX-99.CERT.
3
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.
Morgan Stanley Insured Municipal Trust
/s/ Ronald E. Robison
Ronald E. Robison
Principal Executive Officer
June 19, 2008
Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, this report has been signed by the following
persons on behalf of the registrant and in the capacities and on the dates
indicated.
/s/ Ronald E. Robison
Ronald E. Robison
Principal Executive Officer
June 19, 2008
/s/ Francis Smith
Francis Smith
Principal Financial Officer
June 19, 2008
4