The
Municipal
Fund
Accumulation
Program,
Inc.
Semi-Annual Report
June 30, 1994
This report is not authorized for use as an offer of sale or a
solicitation of an offer to buy shares of the Program unless
accompanied or preceded by the Program's current prospectus. Past
performance results shown in this report should not be considered
a representation of future performance. Investment return and
principal value of shares will fluctuate so that shares, when
redeemed, may be worth more or less than their original cost.
The Municipal Fund
Accumulation Program, Inc.
Box 9011
Princeton, NJ 08543-9011
<PAGE>
To Our Shareholders:
For the six months ended June 30, 1994, The Municipal Fund
Accumulation Program, Inc.'s net annualized yield was 5.78%. During
this period, the Program's per share net asset value declined from
$19.79 to $18.21, reflecting, in part, the generally disappointing
pattern of the municipal bond market during the first six months of
1994. Total investment return for the Program for the six months
ended June 30 was -5.44%, based on the change in per share net asset
value and assuming reinvestment of $0.516 per share income
dividends.
During 1993, The Municipal Fund Accumulation Program, Inc. exhibited
a steady overall growth. The Program's net assets rose 19.2% from
approximately $537 million to approximately $640 million. And, in
fact, the Program's net assets, as of January 31, 1994, approximated
$654 million. However, reflecting the generally unfavorable market
conditions in recent months, the net assets of the Fund declined. As
of June 30, 1994, the Fund's net assets were approximately $575
million.
The Municipal Market
Economic and political factors within the United States and
throughout the world are overwhelming and continue to evolve. The
challenges in today's environment for all surely are monumental.
Looking ahead, we face a serious period of uncertainty overall on
both the international and domestic fronts.
During most of 1993, the municipal market's overall performance was
impressive. In fact, the momentum in the municipal market was such
that municipal bond yields in October 1993 were at their lowest
levels in many years. The municipal market then turned negative for
a time in late October and basically continued this trend throughout
the early weeks of November. Economic data in the fourth quarter
suggested the economy was growing at a rapid pace. Consequently,
investors turned cautious and were reluctant to commit to the
market. However, the municipal market recovered in December as new-
issue municipal bond volume temporarily subsided. As of December 31,
1993, the Bond Buyer's Twenty Bond Index of General Obligation Bonds
was at 5.28% (close to the October 1993 low level of 5.20%).
Similarly, as of December 31, 1993, the Bond Buyer's Revenue Bond
Index was at 5.52% (relatively close to the October 1993 low level
of 5.41%).
<PAGE>
The market environment changed considerably in 1994 and investor
sentiment overall has been decidedly negative. The Federal Reserve
Board's decision to raise the target rate for Federal Funds during
the past four months, in four successive moves, from 3.00% to 4.25%,
is the real catalyst in the change in the interest rate environment.
Furthermore, the indications point to further increases in short-
term interest rates in succeeding months in 1994.
Early in 1994, the anticipation generally among investors was the
municipal market would be off to a glowing start in the new year.
Contributing to the optimism was the expectation sizable funds would
be available for investment in early January. Additionally, new-
issue volume was expected to decline as well. Furthermore, the
reality of higher tax rates for individuals and corporations
enhances the value of tax-exempt securities. The market was poised
for a strong "January rally," which in effect did not materialize.
With indicators continuing to suggest stronger-than-expected
economic growth, investors turned somewhat cautious early in the
month. Nonetheless, the market was relatively stable. Reflecting the
market activity during January, the Bond Buyer's Twenty Bond Index
of General Obligation Bonds declined 6 basis points (0.06%) from
5.34% at the beginning of the month to 5.28% at the end of the
month. Similarly, the Revenue Bond Index declined 6 basis points
from 5.56% at the beginning of January to 5.50% at month-end.
The Federal Reserve Board made a change in its interest rate policy
on February 4, 1994, raising the target rate for Federal Funds from
3.00% to 3.25%. Sentiment turned negative as investors began to
assess the possible results of strong economic growth and the
possibilities of accelerating inflation.
Unquestionably, the municipal market environment in the following
months was most assuredly pessimistic. The municipal bond market was
under considerable pressure and by early April 1994, municipal bond
yields were at their highest levels since November 1992. Reflecting
the negative bias overall in the municipal market, the Bond Buyer's
Twenty Bond Index of General Obligation Bonds rose 109 basis points
from 5.25% as of February 3, 1994 to 6.34% as of April 7, 1994.
Similarly, the Bond Buyer's Revenue Bond Index rose 106 basis points
from 5.49% as of February 3, 1994 to 6.55% as of April 7, 1994.
Subsequently, long-term interest rates retraced a portion of the
rise and by early June interest rates were around 35 basis points
lower in yield than they were in early April.
<PAGE>
The municipal bond market, however, turned negative again and
municipal bond yields on both general obligation bonds and revenue
bonds rose about 35 basis points during the last three weeks of
June. The market environment was uncertain as investors continued to
be cautious in the face of a possible further tightening in monetary
policy by the Federal Reserve Board, as well as concern with respect
to the probability of accelerating inflation. Furthermore, investors
were also concerned with respect to the problems relating to the US
dollar. Reflecting the trend of the market during this time, the
Bond Buyer's Twenty Bond Index of General Obligation Bonds was at
6.28% at the close of the month (some 32 basis points higher than
the June 9, 1994 level of 5.96%). Similarly, the Bond Buyer's
Revenue Bond Index registered 6.56% as of June 30, 1994 (some 36
basis points higher than the June 9, 1994 level of 6.20%).
New-issue municipal bond volume for the first six months of 1994 was
$89.2 billion, representing a decline of 40% over new-issue tax-
exempt bond volume of $149.1 billion during the first six months of
1993. Volume in each of the six months was consistently lower than
last year's level. In fact, June 1994 volume represented the
steepest decline of all -- down 56% to $13.6 billion from the $31.0
billion in June of 1993. Higher overall interest rates were
instrumental in dissuading issuers from coming into the market. The
decrease in new-issue volume was in the refunding issues: refundings
declined 66% from $78.0 billion in 1993 to $26.7 billion in 1994. In
total, refundings accounted for 30% of the six-month volume compared
with 52% in the previous year. There was an increase, however, in
new money financing of 18%, from $46.5 billion in 1993 to $54.9
billion in 1994. New-issue municipal bond volume for all of 1994 is
expected to be considerably less than the record volume of $290.9
billion set in 1993.
Looking ahead, the municipal market undoubtedly will be influenced
by the pattern of interest rates in general and by interest rate
trends in US Treasury securities in particular. We believe interest
rates will trend higher over the near term. Therefore, we believe
there is reason for investors to exercise caution in investment
decisions at this time. As a backdrop for this conclusion, if
economic growth in the United States continues, the possibility of
accelerating inflation in succeeding months is a real one, in our
opinion. As such, the bias for fixed-income securities generally is
towards higher interest rates rather than lower interest rates.
<PAGE>
Although we expect the municipal market to remain volatile in
upcoming months, municipal bond yields overall are relatively
attractive and represent reasonable returns for investors seeking
tax-exempt income. With respect to municipal bonds, the supply/
demand factor still suggests a relatively favorable performance for
municipal securities generally over the longer term. Furthermore,
the reality of higher tax rates for individuals and for corporations
enhances the value of tax-exempt securities and should impact the
market favorably over time as well. Good-quality municipal bonds
merit consideration for those investors to whom tax-advantaged
income is important. We hasten to add, however, municipal bond
yields may very well come under additional pressures as investors
assess future economic growth and inflation potentials in the
ensuing months.
Portfolio Strategy
The Municipal Fund Accumulation Program, Inc.'s primary objective is
to provide tax-exempt income through investment in a diversified
portfolio of good-quality state, municipal and public authority
bonds. Our focus is to provide tax-exempt income with a
concentration in good-quality obligations. The Program is
approximately 80% invested in securities rated Aaa/AAA or Aa/AA by
Moody's Investors Service, Inc. or Standard & Poor's Corporation
(S&P). The remaining 20% of the Portfolio is invested primarily in
securities rated A with a few issues in the Baa or BBB category as
rated by Moody's or S&P, respectively. In addition, there is one
entity in the non-rated category. Thus, the Program's portfolio is
widely diversified with 255 separate issues representing 32 states
and the Commonwealth of Puerto Rico.
With respect to the six-month period since our last report to
shareholders, the Program generally maintained a cautious investment
position. By way of background, municipal bond yields in January of
1994 were close to record lows. Furthermore, economic statistics
basically were still coming in strong; caution seemed warranted. As
a defensive measure, we invested some of the Fund's cash reserves in
prime quality prerefunded bonds. Additionally, we employed some cash
in good quality tax-exempt bonds we considered to be attractive for
inclusion in the Program.
<PAGE>
Notwithstanding some intermittent pauses along the way, municipal
bond yields during the first six months of 1994 rose to their
highest levels in several years. During this time, there was a
considerable outflow of cash generally by investors from mutual bond
funds. The Municipal Fund Accumulation Program, Inc. was no
exception. The Fund experienced redemptions as well; nonetheless,
the Fund's reserves were sufficient to cover the liquidations. We
would like to note that the issues we sold resulted in capital gains
for the Program.
The Municipal Fund Accumulation Program, Inc.'s main strategy is to
obtain a competitive yield while at the same time maintain a quality
portfolio. With 80% of the holdings in the AAA and AA categories and
with the Fund reflecting a net annualized yield of 5.78% over the
past 12 months, we believe we have achieved the Fund's primary
objective.
Investment Outlook
Looking ahead, we face an uncertain investment environment. The
domestic and international financial markets will be subject to
ever-changing developments. US interest rates over the near term
will continue to be volatile. Attention will be focused on the US
economy, the direction of which will influence the future trends of
the financial markets. Future policy moves by the Federal Reserve
Board will be closely monitored. At this time, the indication is the
Federal Reserve Board will move towards further tightening in
monetary policy in ensuing months. The Federal Reserve Board clearly
is giving the signal, the emphasis is anti-inflation.
It appears that the Federal Reserve Board will be vigilant and will
move conclusively in its effort to preclude a resurgence of
inflation in the future. Consequently, it's very possible the target
rate for Federal Funds by year-end could be higher than it is now,
and the Federal Reserve Board Discount Rate, as well, could be
higher. From a longer-term perspective, in our opinion, the bias for
interest rates in succeeding months will be more towards higher
interest rates than lower interest rates. We say this notwith-
standing the possibility of intermittent rallies from time to time.
<PAGE>
Most important, there is good overall investor demand for tax-exempt
securities. According to the most recent Federal Reserve Board Flow
of Funds Accounts, total municipal debt outstanding as of March 31,
1994, was approximately $1,270 billion. Through individual bond
purchases, tax-exempt mutual funds and bank personal trusts, retail
investors were reported to hold about 77% of the total municipal
debt. Furthermore, the reality of higher tax rates for individuals
and for corporations enhances the value of tax-exempt securities.
Although market volatility will continue, municipal bond yields are
relatively attractive and provide reasonable returns for investors
seeking tax-exempt income.
For The Municipal Fund Accumulation Program, Inc., we will continue
to look for suitable investments for inclusion in the Fund's
portfolio. In our opinion, the Program is positioned to take
advantage of changing market conditions. At some point, the market
environment will become more favorable. The Program is presently
fully invested and still has adequate reserves to cover any
contingencies which may develop. Our investment strategy is in
keeping with the Program's objective of seeking tax-exempt income
with an emphasis on good-quality holdings.
In Conclusion
Thank you for your continued interest in The Municipal Fund
Accumulation Program, Inc. We look forward to reviewing our outlook
and strategy with you again in our next report to shareholders.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Zita C. Millett)
Zita C. Millett
Vice President and Portfolio Manager
August 2, 1994
<PAGE>
<TABLE>
The Municipal Fund Accumulation Program, Inc.
Schedule of Investments as of June 30, 1994 (in Thousands)
<CAPTION>
S&P Moody's Face Value
State Rating Rating Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
Alabama-- AA A1 $ 2,000 City of Birmingham, Alabama, General Obligation Refunding Bonds,
0.4% Series 1988, 8% due 10/01/2015 $ 2,210
Alaska--0.1% A+ Aa1 690 Alaska Housing Finance Corporation, Insured Mortgage Program
Refunding Bonds, 1990 First Series, 7.80% due 12/01/2030 714
Arizona-- AA Aa 2,000 Salt River Project, Arizona, Agricultural Improvement and Power District,
2.1% Electric System Revenue Bonds, Series 1991-A, 6.50% due 1/01/2022 2,016
AA Aa 5,000 Salt River Project, Arizona, Agricultural Improvement and Power District,
Electric System Revenue Bonds, Series 1992-A, 5.50% due 1/01/2028 4,339
AA Aa 1,000 Salt River Project, Arizona, Agricultural Improvement and Power District,
Electric System Revenue Bonds, Series 1992-A, 6.20% due 1/01/2012 1,001
AA Aa 2,000 Salt River Project, Arizona, Agricultural Improvement and Power District,
Electric System Revenue Bonds, Series 1992-C, 6.25% due 1/01/2019 1,988
AA Aa 3,000 Salt River Project, Arizona, Agricultural Improvement and Power District,
Electric System Revenue Refunding Bonds, Series 1993-B, 5.25%
due 1/01/2019 2,576
<PAGE>
California-- AA Aa 765 California Department of Veterans' Affairs, Home Purchase Revenue
11.5% Bonds, Series 1984-A, 10.50% due 8/01/2010 788
AA Aa 1,500 California Department of Water Resources, Water System Revenue Bonds
(Central Valley Project), Series L, 5.50% due 12/01/2023 1,317
AA Aa 2,000 California Department of Water Resources, Water System Revenue
Bonds (Central Valley Project), Series L, 5.875% due 12/01/2025 1,848
AA- Aa 145 California Health Facilities Financing Authority, Stanford University
Hospital Revenue Bonds, Series 1991-A, 6.50% due 11/01/2020 145
A+ A1 1,000 Contra Costa Transportation Authority, California, Sales Tax Revenue
Bonds (Limited Tax Bonds), Series 1991-A, 6.875% due 3/01/2007 1,094
AA Aa 1,000 Los Angeles, California, Department of Water and Power, Electric Plant
Revenue Bonds, 7.125% due 5/15/2030 1,106
AA Aa 1,000 Los Angeles, California, Department of Water and Power, Electric Plant
Revenue Bonds, Second Issue, 6.75% due 12/15/2029 1,090
AA Aa 10,000 Los Angeles, California, Department of Water and Power, Electric Plant
Revenue Refunding Bonds, 5.375% due 9/01/2023 8,617
AAA Aaa 7,000 Los Angeles (City of), California, Wastewater System Revenue Refunding
Bonds, Series 1993-D, 5.20% due 11/01/2021 (d) 5,898
AAA Aaa 2,000 Los Angeles County, California, Certificates of Participation (Correctional
Facilities Project), 6.50% due 9/01/2013 (c) 2,052
AAA Aaa 1,000 Los Angeles County, California, Metropolitan Transportation Authority,
Sales Tax Revenue Refunding Bonds, Proposition A, Series A, 5%
due 7/01/2021 (d) 818
AAA Aaa 2,500 Los Angeles County, California, Transportation Commission Sales Tax
Revenue Bonds, Series 1991-A, 6.75% due 7/01/2018 (b)(d) 2,771
AAA Aaa 1,000 Los Angeles County, California, Transportation Commission Sales Tax
Revenue Refunding Bonds, Series 1988-A, 8% due 7/01/2018 (b) 1,131
AAA Aaa 1,125 M-S-R Public Power Agency, California, Revenue Bonds (San Juan
Project), Series B, 6.50% due 7/01/2017 (c) 1,140
AAA Aaa 1,250 M-S-R Public Power Agency, California, Revenue Bonds (San Juan
Project), Series D, 6.75% due 7/01/2020 (c) 1,326
AA Aa 5,000 Metropolitan Water District of Southern California, Water Revenue Bonds,
Issue of 1992, 5.50% due 7/01/2019 4,442
AAA Aaa 5,000 Metropolitan Water District of Southern California, Water Works, General
Obligation Bonds, Series G, 6.50% due 3/01/2012 5,316
AA Aa 2,000 Metropolitan Water District of Southern California, Water Works Revenue
Bonds, Issue of 1992, 5% due 7/01/2020 1,645
</TABLE>
<PAGE>
<TABLE>
The Municipal Fund Accumulation Program, Inc.
Schedule of Investments as of June 30, 1994 (continued) (in Thousands)
<CAPTION>
S&P Moody's Face Value
State Rating Rating Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
California A- A1 $ 2,000 San Diego (City of), California, Public Facilities Financing Authority,
(concluded) Sewer Revenue Bonds, Series 1993-A, 5.25% due 5/15/2020 $ 1,671
AA Aa 2,000 San Francisco, California, City and County Public Utility Commission, Water
Revenue Refunding Bonds, Series 1987, 8% due 11/01/2011 2,226
AA Aa 2,400 Southern California Public Power Authority, Power Project Revenue
Refunding Bonds (Palo Verde Project), Series 1993-A, 5% due 7/01/2015 2,039
AAA Aaa 8,000 Southern California Public Power Authority, Transmission Project, Subordi-
nated Revenue Refunding Bonds, Series 1993-A, 5% due 7/01/2022 (c) 6,523
A+ Aa 2,000 State of California, General Obligation Bonds, 6% due 5/01/2018 1,884
A+ Aa 5,000 State of California, General Obligation Bonds, 6.25% due 9/01/2012 5,010
A+ Aa 2,000 State of California, General Obligation Refunding Bonds, 5.15%
due 10/01/2019 1,661
A+ Aa 2,500 State of California, Various Purpose General Obligation Bonds, 6.25%
due 10/01/2019 2,592
Colorado-- AA Aa 2,940 Colorado Springs (City of), Colorado, Utilities System Revenue Refunding
0.5% Bonds, Series 1991-A, 6.50% due 11/15/2015 3,006
AA Aa 185 Colorado Springs (City of), Colorado, Utilities System Revenue Refunding
Bonds, Series 1991-A, 6.50% due 11/15/2015 (b) 202
Connecticut-- AA Aa 2,425 Connecticut Housing Finance Authority, Housing Mortgage Finance
2.7% Program Bonds, Series 1990-B, Sub-Series B-1, 7.55% due 11/15/2008 2,497
AA Aa 1,250 Connecticut Housing Finance Authority, Housing Mortgage Finance
Program Bonds, Series 1992-A, 5.85% due 11/15/2016 1,166
AA Aa 1,200 Connecticut Housing Finance Authority, Housing Mortgage Finance
Program Bonds, Series 1993-A, 6.20% due 5/15/2014 1,154
AA- A1 3,450 Connecticut State, Special Tax Obligation Revenue Bonds, Transportation
Infrastructure Purposes, Series 1991-A, 5.40% due 9/01/2009 3,226
AA- A1 4,000 Connecticut State, Special Tax Obligation Revenue Bonds, Transportation
Infrastructure Purposes, Series 1993-C, 5% due 10/01/2013 3,444
AA- A1 1,000 Connecticut State, Special Tax Obligation Revenue Refunding Bonds,
Transportation Infrastructure Purposes, Series 1993-A, 5.375%
due 9/01/2008 947
AA- Aa 2,000 State of Connecticut, General Obligation Refunding Bonds, Series 1993-A,
5.60% due 11/15/2010 1,901
AA- Aa 1,000 State of Connecticut, General Obligation Refunding Bonds, Series E,
5% due 3/15/2010 898
<PAGE>
Florida-- NR Aaa 1,000 Broward County, Florida, General Obligation Bonds (Environmentally
6.1% Sensitive Lands Project), Series 1989, 6.90% due 7/01/2009 (b) 1,076
A A 1,800 Broward County, Florida, Resource Recovery Revenue Bonds, Series 1984
(North Project), 7.95% due 12/01/2008 1,943
A A 885 Broward County, Florida, Resource Recovery Revenue Bonds, Series 1984
(South Project), 7.95% due 12/01/2008 955
AAA Aaa 1,000 Escambia County, Florida, Utility Authority, Utilities System Revenue Bonds,
Series 1985-A, 9.60% due 1/01/2015 (b)(c) 1,096
AAA Aaa 1,000 Florida Municipal Power Agency Revenue Bonds (Stanton Project),
Series 1991, 6% due 10/01/2015 (c) 980
AA Aa 2,400 Florida State Board of Education, Public Education Capital Outlay Bonds,
Series 1992-C, 5.875% due 6/01/2023 2,250
AA Aa 1,000 Florida State Board of Education, Public Education Capital Outlay Bonds,
Series 1992-C, 5.85% due 6/01/2018 944
</TABLE>
<TABLE>
The Municipal Fund Accumulation Program, Inc.
Schedule of Investments as of June 30, 1994 (continued) (in Thousands)
<CAPTION>
S&P Moody's Face Value
State Rating Rating Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
Florida AA Aa $ 1,000 Florida State Board of Education, Public Education Capital Outlay Bonds,
(concluded) Series B, 5.90% due 6/01/2012 $ 972
AA Aa 2,500 Florida State Board of Education, Public Education Capital Outlay
Refunding Bonds, Series 1989-A, 6% due 6/01/2025 2,388
AA Aa1 1,000 Jacksonville, Florida, Electric Authority Revenue Bonds (Saint John's
River Power Park System), Series 7, 8.875% due 10/01/2010 1,074
AA Aa1 10,000 Jacksonville, Florida, Electric Authority Revenue Refunding Bonds
(Saint John's River Power Park System), Issue 2, Series 1993-9, 5.25%
due 10/01/2021 8,548
AAA Aaa 1,000 Orange County, Florida, Tourist Development, Tax Revenue Refunding
Bonds, Series 1992-B, 6% due 10/01/2021 (e) 971
AA Aa1 2,000 Orlando, Florida, Utilities Commission, Water and Electric Subordinated
Revenue Bonds, 5.125% due 10/01/2019 1,702
AA- Aa 3,000 Orlando, Florida, Utilities Commission, Water and Electric Subordinated
Revenue Refunding Bonds, Series 1993-A, 5.25% due 10/01/2023 2,549
A+ A2 3,000 Saint Lucie County, Florida, Pollution Control Revenue Bonds (Florida
Power and Light Company Project), Series 1984, 11% due 10/01/2019 3,147
A+ A2 1,500 Saint Lucie County, Florida, Pollution Control Revenue Bonds (Florida
Power and Light Company Project), Series 1985, 10% due 4/01/2020 1,604
AAA Aaa 3,000 State of Florida, Department of Transportation, Turnpike Revenue
Refunding Bonds, Series A, 5% due 7/01/2019 (d) 2,522
<PAGE>
Georgia-- AA- A3 3,000 Development Authority of Burke County, Georgia, Pollution Control
3.5% Revenue Bonds (Oglethorpe Power Corporation/Vogtle Project),
Series 1985-B, 9.875% due 1/01/2010 3,147
AA- NR 1,000 Metropolitan Atlanta Rapid TRAN Authority, Georgia, Sales Tax Revenue
Bonds, Series J, 7.30% due 7/01/2000 (b) 1,100
A+ Aaa 3,250 Municipal Electric Authority of Georgia, General Power Revenue Bonds,
Series 1988-B, 8% due 1/01/2008 (b) 3,628
A+ A 1,000 Municipal Electric Authority of Georgia, Power Revenue Bonds, Series T,
6.50% due 1/01/2025 1,002
A+ A 1,000 Municipal Electric Authority of Georgia, Power Revenue Bonds, Series V,
6.60% due 1/01/2018 1,027
A+ A 4,750 Municipal Electric Authority of Georgia, Special Obligation Refunding
Bonds, Project 1, Fifth Crossover Series 1992, 6.50% due 1/01/2017 4,869
A+ A 3,000 Municipal Electric Authority of Georgia, Special Obligation Refunding
Bonds, Second Crossover Series 1988, 8.125% due 1/01/2017 3,331
AA+ Aaa 2,000 State of Georgia, General Obligation Bonds, Series 1992-B, 6.30%
due 3/01/2010 2,095
Illinois-- A+ A1 500 Chicago (City of), Illinois, Chicago-O'Hare International Airport Revenue
2.1% Bonds, Series 1984-A and B, 10.625% due 1/01/2015 530
A+ A1 6,000 Chicago (City of), Illinois, Chicago-O'Hare International Airport Revenue
Refunding Bonds, Senior Lien, Series 1993-A, 5% due 1/01/2016 4,989
AA Aa2 1,850 Illinois Development Finance Authority, Pollution Control Revenue
Refunding Bonds (Central Illinois Public Services Company Project),
Series 1990-B, 7.60% due 9/01/2013 1,994
A+ A1 5,000 Illinois Toll Highway Authority, Toll Highway Priority Revenue Bonds,
Series 1992-A, 6.375% due 1/01/2015 4,804
</TABLE>
<TABLE>
The Municipal Fund Accumulation Program, Inc.
Schedule of Investments as of June 30, 1994 (continued) (in Thousands)
<CAPTION>
S&P Moody's Face Value
State Rating Rating Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
Indiana-- A+ A1 $ 1,000 Indiana State Office Building Commission, Capital Complex Revenue
1.8% Bonds (State Office Building II Facility Refunding), Series 1990-D, 6.90%
due 7/01/2011 $ 1,052
A+ A1 1,000 Indiana State Office Building Commission, Correctional Facilities Program
Revenue Bonds, Series 1991, 6.375% due 7/01/2016 997
A+ A1 250 Indiana Transportation Finance Authority, Highway Revenue Bonds,
Series 1988-A, 8% due 6/01/2008 (b) 281
A+ A1 2,250 Indiana Transportation Finance Authority, Highway Revenue Bonds,
Series 1988-A, 8.125% due 6/01/2011 (b) 2,537
AA+ Aaa 5,000 Indianapolis, Indiana, Local Public Improvement Bond Bank (City
Guaranteed), Series A, 5.90% due 1/10/2014 4,772
AA- Aa2 1,000 Petersburg (City of), Indiana, Pollution Control Revenue Bonds
(Indianapolis Power and Light Company), Series 1985, 9.625%
due 9/01/2012 1,078
<PAGE>
Kentucky-- AA Aa2 2,000 Jefferson County, Kentucky, Pollution Control Revenue Bonds
2.2% (Louisville Gas and Electric Company Project), Series 1993-B, 5.625%
due 8/15/2019 1,838
AAA Aaa 1,250 Kentucky Housing Corporation, Housing Revenue Bonds (Federally
Insured or Guaranteed Mortgage Loans), Series 1993-B, 5.40%
due 7/01/2014 1,110
AAA Aaa 2,000 Kentucky Turnpike Authority, Economic Development Road Revenue
Refunding Bonds (Revitalization Projects), Series 1993, 5.50% due
7/01/2008 (e) 1,913
AAA NR 3,000 Kentucky Turnpike Authority, Economic Development Road Revenue
Bonds, Series 1987-A, 8.25% due 7/01/2007 (b) 3,342
A+ A 4,000 Kentucky Turnpike Authority, Resource Recovery Road Revenue
Bonds, Series 1987-A, 8% due 7/01/2003 4,422
Maryland-- AA- Aaa 2,000 Maryland Health and Higher Educational Facilities Authority Revenue
0.4% Bonds (The Johns Hopkins Hospital Issue), Series 1990, 7% due
7/01/2023 (b) 2,220
Massa- A+ A 1,000 Commonwealth of Massachusetts, General Obligation Bonds,
chusetts-- Consolidated Loan, Series 1984-B, 5.25% due 2/01/2008 923
1.7% A+ Aa 1,000 Massachusetts Health and Educational Facilities Authority Revenue Bonds
(Brigham and Womens' Hospital Issue), Series D, 6.75% due 7/01/2024 1,020
AAA Aaa 1,000 Massachusetts Housing Finance Agency, Housing Revenue Bonds,
Series 1984-B, 10.375% due 12/01/2009 (c) 1,065
AAA Aaa 1,000 Massachusetts Port Authority Revenue Bonds, Series 1982, 13% due
7/01/2013 (a) 1,661
A+ Aaa 4,000 Massachusetts State Consolidated Loan, Series B, 7.25% due 7/01/2005 (b) 4,375
Michigan-- AAA Aaa 1,000 Grand Rapids (City of), Michigan, Water Supply System Revenue
2.5% Bonds, Series 1990, 7.25% due 1/01/2020 (b)(d) 1,116
AAA Aaa 750 Grand Rapids (City of), Michigan, Water Supply System Revenue
Refunding Bonds, Series 1991, 6.50% due 1/01/2015 (d) 763
AA Aa 1,500 Michigan State Hospital Finance Authority, Hospital Revenue Bonds
(Henry Ford Health System), Series 1990-A, 7% due 7/01/2010 1,557
AA Aa 2,000 Michigan State Hospital Finance Authority, Hospital Revenue Refunding
Bonds (Henry Ford Health System), 5.75% due 9/01/2017 1,813
AAA Aaa 2,000 Michigan Strategic Fund, Limited Obligation Revenue Refunding Bonds
(The Detroit Edison Company Pollution Control Bonds Project),
Collateralized Series 1991-BB, 7% due 5/01/2021 (e) 2,183
AAA Aaa 1,000 Michigan Strategic Fund, Limited Obligation Revenue Refunding Bonds
(The Detroit Edison Company Pollution Control Bonds Project),
Collateralized Series 1991-CC, 6.95% due 9/01/2021 (d) 1,052
</TABLE>
<PAGE>
<TABLE>
The Municipal Fund Accumulation Program, Inc.
Schedule of Investments as of June 30, 1994 (continued) (in Thousands)
<CAPTION>
S&P Moody's Face Value
State Rating Rating Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
Michigan AAA Aaa $ 1,000 Michigan Strategic Fund, Limited Obligation Revenue Refunding Bonds
(concluded) (The Detroit Edison Company Pollution Control Bonds Project),
Collateralized Series 1991-DD, 6.875% due 12/01/2021 (d) $ 1,043
AA Aa 1,250 Royal Oak (City of), Michigan, Hospital Finance Authority, Hospital
Revenue Bonds (William Beaumont Hospital), Series D, 6.75%
due 1/01/2020 1,274
AAA Aaa 2,000 Saint Clair County, Michigan, Economic Development Corporation,
Pollution Control Revenue Refunding Bonds (Detroit Edison Company
Project), Collateralized Series 1992-DD, 6.05% due 8/01/2024 (e) 1,935
AA Aa1 2,000 University of Michigan, University Revenue Refunding Bonds,
Refunding-Hospital-Series A, 5.75% due 12/01/2012 1,869
Minnesota-- AA+ NR 750 Minnesota Public Facilities Authority, Water Pollution Control Revenue
2.0% Bonds, Series 1990-A, 7.10% due 3/01/2012 813
AAA Aaa 5,000 Southern Minnesota Municipal Power Agency Power Supply System
Revenue Bonds, Series A, 8.125% due 1/01/2018 (b) 5,602
AAA Aaa 1,600 Southern Minnesota Municipal Power Agency, Power Supply System
Revenue Bonds, Series 1984-B, 11% due 1/01/2016 (b) 1,707
A+ A1 2,000 Southern Minnesota Municipal Power Agency, Power Supply System
Revenue Bonds, Series 1989-A, 6% due 1/01/2013 1,929
A+ A1 2,000 Southern Minnesota Municipal Power Agency, Power Supply System
Revenue Refunding Bonds, Series A, 5.75% due 1/01/2018 1,871
Nebraska-- AA Aa 1,200 Omaha, Nebraska, Public Power District, Electric Revenue Bonds,
0.2% Series 1993-C, 5.50% due 2/01/2017 1,085
Nevada-- NR NR 2,000 Clark County, Nevada, School District, General Obligation, School
0.4% Improvement Bonds (Limited Tax), Series 1988-A, 8% due 3/01/2008 (b) 2,244
<PAGE>
New Jersey-- AA- Aa 2,500 New Jersey Economic Development Authority, Trenton Office Complex
5.3% Revenue Bonds, Series 1989, 6% due 6/15/2012 2,454
AAA Aaa 1,000 New Jersey Health Care Facilities Financing Authority Revenue Bonds
(Hackensack Medical Center), 6.625% due 7/01/2017 (d) 1,028
AA- A1 2,900 New Jersey Highway Authority (Garden State Parkway), Parkway
Revenue Refunding Bonds, Series 1992, 6% due 1/01/2016 2,825
AAA Aaa 175 New Jersey Housing and Mortgage Finance Agency, Home Buyer
Revenue Bonds, Series 1990-E, 7.65% due 10/01/2016 (c) 179
A+ NR 2,000 New Jersey Housing and Mortgage Finance Agency, Housing Revenue
Refunding Bonds, Series 1992-1, 6.60% due 11/01/2014 2,000
AA+ Aa1 1,000 New Jersey State, General Obligation Refunding Bonds, 6.30%
due 8/01/2007 1,043
AA+ Aa1 2,000 New Jersey State, General Obligation Refunding Bonds, Series D,
6% due 2/15/2011 2,004
AA+ Aa1 3,000 New Jersey State, General Obligation Refunding Bonds, Series D,
6% due 2/15/2013 2,958
A A 1,500 New Jersey Turnpike Authority, Turnpike Revenue Bonds, Series 1992-A,
6.20% due 1/01/2018 1,491
A A 10,000 New Jersey Turnpike Authority, Turnpike Revenue Bonds, Series C,
6.50% due 1/01/2016 10,475
A A 2,000 New Jersey Turnpike Authority, Turnpike Revenue Refunding Bonds,
Series 1991-A, 6.75% due 1/01/2008 2,097
AAA Aaa 1,030 New Jersey Turnpike Authority, Turnpike Revenue Refunding Bonds,
Series C, 6.25% due 1/01/2010 (e) 1,048
AA A1 1,000 Rutgers State University, New Jersey, Revenue Refunding Bonds (State
University of New Jersey), Series A, 6.50% due 5/01/2018 1,030
</TABLE>
<TABLE>
The Municipal Fund Accumulation Program, Inc.
Schedule of Investments as of June 30, 1994 (continued) (in Thousands)
<CAPTION>
S&P Moody's Face Value
State Rating Rating Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
New Jersey & AAA Aaa $ 1,250 Delaware River Port Authority, Revenue Refunding Bonds, Series 1989,
Pennsylvania-- 6.50% due 1/01/2008 (e) $ 1,279
0.4% AAA Aaa 1,100 Delaware River Port Authority, Revenue Refunding Bonds, Series 1989,
7.375% due 1/01/2007 (e) 1,208
New Mexico-- AA A1 1,000 Albuquerque (City of), New Mexico, Joint Water and Sewer System,
0.2% Revenue Refunding Bonds, Series 1984, 10.625% due 7/01/2002 1,036
<PAGE>
New York-- AA- Aa 975 Municipal Assistance Corporation for the City of New York Revenue
20.2% Bonds, Series 59, 6.50% due 7/01/2007 1,001
AA- Aa 1,000 Municipal Assistance Corporation for the City of New York Revenue
Bonds, Series 61, 6.875% due 7/01/2007 1,072
AA- Aa 2,000 Municipal Assistance Corporation for the City of New York Revenue
Bonds, Series 62, 6.75% due 7/01/2006 2,136
A- Aaa 3,000 New York (City of), New York, General Obligation Bonds, Series 1992-A,
8% due 8/15/2021 (b) 3,530
A- Baa1 1,500 New York (City of), New York, General Obligation Bonds, Series 1992-B,
7% due 2/01/2018 1,556
AAA Aaa 2,375 New York (City of), New York, General Obligation Bonds, Series 1992-C,
6.625% due 8/01/2012 (b)(c) 2,600
AAA Aaa 125 New York (City of), New York, General Obligation Bonds, Series 1992-C,
6.625% due 8/01/2012 (c) 129
A- Baa1 3,000 New York (City of), New York, General Obligation Bonds, Series 1992-C,
7.50% due 8/01/2020 3,279
A- Baa1 2,000 New York (City of), New York, General Obligation Bonds, Series 1992-D,
7.50% due 2/01/2016 2,172
A- Baa1 3,000 New York (City of), New York, General Obligation Bonds, Series D,
7.50% due 2/01/2019 3,268
AA Aa 1,000 New York State Dormitory Authority, Cornell University Revenue Bonds,
Series 1990-A, 7.375% due 7/01/2030 1,104
AAA Aaa 1,280 New York State Dormitory Authority, Fordham University Revenue Bonds,
Series 1990, 7.20% due 7/01/2015 (b)(e) 1,438
AAA Aaa 220 New York State Dormitory Authority, Fordham University Revenue Bonds,
Series 1990, 7.20% due 7/01/2015 (e) 238
AAA Aaa 1,395 New York State Dormitory Authority, New York University, Insured Revenue
Bonds, Series 1991, 6% due 7/01/2015 (d) 1,358
AAA Aa 1,000 New York State Dormitory Authority, Saint Vincent's Hospital and Medical
Center of New York, Mortgage Revenue Bonds, Series 1991, 7.40% due
8/01/2030 (f) 1,093
BBB+ NR 940 New York State Dormitory Authority, State University Educational Facilities
Revenue Bonds, Series 1990-C, 7% due 5/15/2018 (b) 1,045
BBB+ NR 1,060 New York State Dormitory Authority, State University Educational Facilities
Revenue Bonds, Series 1990-C, 7% due 5/15/2018 (b) 1,178
BBB+ Baa1 3,250 New York State Dormitory Authority, State University Educational Facilities
Revenue Bonds, Series 1990-B, 7% due 5/15/2016 3,407
A Aa 1,800 New York State Environmental Facilities Corporation, State Water Pollution
Control, Revolving Fund Revenue Bonds (New York City Municipal Water
Finance Authority Project), Series 1990-A, 7.50% due 6/15/2012 1,979
A Aa 1,425 New York State Environmental Facilities Corporation, State Water Pollution
Control, Revolving Fund Revenue Bonds (New York City Municipal Water
Finance Authority Project), Series 1991-A, 7% due 6/15/2012 1,517
AA- Aa 500 New York State Environmental Facilities Corporation, State Water Pollution
Control, Revolving Fund Revenue Bonds (Pooled Loan Issue), Series
1990-B, 7.50% due 3/15/2011 543
AAA Aaa 2,000 New York State Local Government Assistance Corporation Revenue
Bonds, Series 1991-B, 7% due 4/01/2021 (b) 2,205
</TABLE>
<PAGE>
<TABLE>
The Municipal Fund Accumulation Program, Inc.
Schedule of Investments as of June 30, 1994 (continued) (in Thousands)
<CAPTION>
S&P Moody's Face Value
State Rating Rating Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
New York AAA Aaa $ 5,000 New York State Local Government Assistance Corporation Revenue
(continued) Bonds, Series 1991-C, 7% due 4/01/2016 (b) $ 5,583
A A 5,000 New York State Local Government Assistance Corporation Revenue
Bonds, Series 1993-D, 5% due 4/01/2023 4,051
A Aaa 1,000 New York State Local Government Assistance Corporation Revenue
Bonds, Series B, 7.375% due 4/01/2012 (b) 1,138
A A 2,000 New York State Local Government Assistance Corporation Revenue
Bonds, Series 1992-A, 6.875% due 4/01/2019 2,109
A A 9,000 New York State Local Government Assistance Corporation Revenue
Bonds, Series A, 6.50% due 4/01/2020 9,070
A A 2,000 New York State Local Government Assistance Corporation Revenue
Refunding Bonds, Series 1993-E, 5.25% due 4/01/2016 1,747
AAA Aaa 1,515 New York State Medical Care Facilities Finance Agency, Mental Health
Services, Facilities Improvement Revenue Bonds, Series 1989-A, 7.80%
due 2/15/2019 (b) 1,711
BBB+ Baa1 640 New York State Medical Care Facilities Finance Agency, Mental Health
Services, Facilities Improvement Revenue Bonds, Series 1989-A, 7.80%
due 2/15/2019 714
AAA Aaa 925 New York State Medical Care Facilities Finance Agency, Mental Health
Services, Facilities Improvement Revenue Bonds, Series 1990-B, 7.875%
due 8/15/2020 (b) 1,070
BBB+ Baa1 975 New York State Medical Care Facilities Finance Agency, Mental Health
Services, Facilities Improvement Revenue Bonds, Series 1990-B, 7.875%
due 8/15/2020 1,074
AAA Aaa 840 New York State Medical Care Facilities Finance Agency, Mental Health
Services, Facilities Improvement Revenue Bonds, Series 1991-A, 7.75%
due 8/15/2011 (b) 970
BBB+ Baa1 160 New York State Medical Care Facilities Finance Agency, Mental Health
Services, Facilities Improvement Revenue Bonds, Series 1991-A, 7.75%
due 8/15/2011 175
AA- Aa 1,485 New York State Power Authority, General Purpose Revenue Bonds,
Series A, 6% due 1/01/2020 1,414
AA Aa 6,140 New York State Power Authority, General Purpose Revenue Bonds,
Series V, 8% due 1/01/2017 6,772
AA- Aa 2,500 New York State Power Authority, General Purpose Revenue
Refunding Bonds, Series CC, 5% due 1/01/2014 2,118
AA- Aa 10,000 New York State Power Authority, General Purpose Revenue
Refunding Bonds, Series CC, 5.25% due 1/01/2018 8,612
AA- Aa 1,750 New York State Power Authority, General Purpose Revenue
Refunding Bonds, Series Z, 6.50% due 1/01/2019 1,783
AA- Aa 2,000 New York State Power Authority, General Purpose Revenue
Refunding Bonds, Series W, 6.50% due 1/01/2008 2,105
AAA Aaa 1,000 Triborough Bridge and Tunnel Authority, General Purpose Revenue
Bonds, Series O, 7.70% due 1/01/2019 (b) 1,121
AAA Aaa 2,000 Triborough Bridge and Tunnel Authority, General Purpose Revenue
Bonds, Series R, 7.375% due 1/01/2016 (b) 2,241
<PAGE>
A+ Aaa 3,000 Triborough Bridge and Tunnel Authority, General Purpose Revenue
Bonds, Series S, 7% due 1/01/2021 (b) 3,330
A+ Aa 5,100 Triborough Bridge and Tunnel Authority, General Purpose Revenue
Bonds, Series X, 6.625% due 1/01/2012 5,369
A+ Aa 2,000 Triborough Bridge and Tunnel Authority General Purpose Revenue
Bonds, Series X, 6.50% due 1/01/2019 2,010
A+ Aa 5,000 Triborough Bridge and Tunnel Authority, General Purpose Revenue
Refunding Bonds, Series A, 5% due 1/01/2012 4,307
</TABLE>
<TABLE>
The Municipal Fund Accumulation Program, Inc.
Schedule of Investments as of June 30, 1994 (continued) (in Thousands)
<CAPTION>
S&P Moody's Face Value
State Rating Rating Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
New York A+ Aa $ 2,500 Triborough Bridge and Tunnel Authority, General Purpose Revenue
(concluded) Refunding Bonds, Series Y, 6% due 1/01/2012 $ 2,465
A- A1 3,125 Triborough Bridge and Tunnel Authority, Special Obligation Refunding
Bonds, Series 1991-B, 6.875% due 1/01/2015 3,267
New York & AA- A1 1,825 Port Authority of New York and New Jersey, Consolidated 78th Series A,
New Jersey-- 6.50% due 4/15/2011 1,913
1.9% AA- A1 1,750 Port Authority of New York and New Jersey, Consolidated Revenue Bonds
69th Series, 7.125% due 6/01/2025 1,906
AA- A1 4,000 Port Authority of New York and New Jersey, Consolidated Revenue Bonds
83rd Series, 6.375% due 10/15/2017 4,022
AA- A1 2,000 Port Authority of New York and New Jersey, Consolidated Revenue
Refunding Bonds 87th Series-Refunding, 5.25% due 7/15/2018 1,724
AA- A1 2,000 Port Authority of New York and New Jersey, Consolidated Revenue
Refunding Bonds, 87th Series, 5.25% due 7/15/2021 1,704
North AA Aa 2,000 Charlotte-Mecklenburg, North Carolina, Hospital Authority, Healthcare
Carolina-- System Revenue Bonds, 6.25% due 1/01/2020 1,985
2.6% A- A 1,000 North Carolina Eastern Municipal Power Agency, Power System Revenue
Refunding Bonds, Series 1989-A, 6.50% due 1/01/2024 981
A- Aaa 1,330 North Carolina Eastern Municipal Power Agency, Power System Revenue
Refunding Bonds, Series 1991-A, 6.50% due 1/01/2018 (a) 1,405
A- A 670 North Carolina Eastern Municipal Power Agency, Power System Revenue
Refunding Bonds, Series 1991-A, 6.50% due 1/01/2018 660
AAA Aaa 1,500 North Carolina Municipal Power Agency No. 1, Catawba Electric Revenue
Bonds, 6% due 1/01/2011 (c) 1,498
AAA Aaa 2,000 North Carolina Municipal Power Agency No. 1, Catawba Electric Revenue
Bonds, Series 1992, 5.75% due 1/01/2020 (c) 1,859
A A 6,975 North Carolina Municipal Power Agency No. 1, Catawba Electric Revenue
Bonds, Series 1992, 6.25% due 1/01/2017 6,851
<PAGE>
Ohio--4.3% AAA Aaa 1,750 Cleveland (City of), Ohio, Waterworks Improvement, First Mortgage
Revenue Bonds, Series F 1992-A, 6.50% due 1/01/2021 (b)(e) 1,898
AAA Aaa 8,650 Hamilton (City of), Ohio, Electric System Mortgage Revenue
Refunding Bonds, Series 1992-A, 6% due 10/15/2023 (d) 8,417
AAA Aaa 3,000 Hamilton (City of), Ohio, Electric System Revenue Bonds, Series 1988-B,
8% due 10/15/2022 (b)(d) 3,396
AAA Aaa 2,000 Ohio Building Authority, State Correctional Facilities, Revenue Refunding
Bonds, Series 1985-B, 9.75% due 9/01/2012 (b) 2,143
AAA Aaa 500 Ohio Building Authority, State Facilities Revenue Bonds (Columbus State
Office Building), Series 1985-A, 9.625% due 10/01/2005 (b) 548
AAA Aaa 2,150 Ohio State Water Development Authority, Pure Water Revenue Refunding
and Improvement Bonds, 6% due 12/01/2008 (e) 2,181
AAA NR 480 Ohio Water Development Authority, Revenue Refunding and Improvement
Bonds, Series R, 8% due 12/01/2018 536
AAA Aaa 2,210 Ohio Water Development Authority, Safe Water Refunding and
Improvement, Water Development Revenue Refunding Bonds,
Series 1985, 9.25% due 12/01/2012 (b)(e) 2,382
AAA Aaa 525 Ohio Water Development Authority, Water Development Revenue
Refunding and Improvement Bonds, Series 1985, 9.375% due
12/01/2018 (b)(e) 566
AAA Aaa 160 Ohio Water Development Authority, Water Development Revenue
Refunding and Improvement Bonds, Series 1985, 9.375% due
12/01/2018 (e) 172
AAA Aaa 2,000 Toledo, Ohio, Sewer System Mortgage Revenue Refunding Bonds,
Series 1988-B, 7.75% due 11/15/2017 (c) 2,241
</TABLE>
<TABLE>
The Municipal Fund Accumulation Program, Inc.
Schedule of Investments as of June 30, 1994 (continued) (in Thousands)
<CAPTION>
S&P Moody's Face Value
State Rating Rating Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
Oklahoma-- AAA Aaa $ 1,305 Oklahoma Municipal Power Authority, Power Supply System Revenue
0.5% Bonds, Series 1990-A, 6.25% due 1/01/2023 (c) $ 1,308
A+ A1 710 Oklahoma State Turnpike Authority, First Senior Revenue Bonds, Series 1989,
6% due 1/01/2022 678
A+ NR 1,290 Oklahoma State Turnpike Authority, First Senior Revenue Bonds, Series 1989,
6% due 1/01/2022 (a) 1,287
Pennsylvania-- AA- A1 2,000 Commonwealth of Pennsylvania, General Obligation Bonds, 3rd Series
1.6% 1991-A, 6.50% due 11/15/2011 2,056
AA- A1 3,000 Commonwealth of Pennsylvania, Pennsylvania General Obligation Bonds,
3rd Series 1991-A, 5.30% due 5/01/2006 2,890
AAA Aaa 2,000 Pennsylvania Turnpike Commission, Turnpike Revenue Bonds, Series
1989-K, 7.625% due 12/01/2009 (b) 2,275
AAA Aaa 2,000 Pennsylvania Turnpike Commission, Turnpike Revenue Refunding Bonds,
Series 1992-P, 6% due 12/01/2017 (e) 1,925
<PAGE>
Puerto Rico-- AAA NR 2,000 Commonwealth of Puerto Rico, Public Improvement Bonds of 1990
1.5% (General Obligation Bonds), 7.70% due 7/01/2020 (b) 2,299
AAA NR 2,000 Puerto Rico Commonwealth Highway and Transportation Authority,
Highway Revenue Bonds, Series S, 6.625% due 7/01/2018 (b) 2,194
A NR 160 Puerto Rico Highway and Transportation Authority, Highway Revenue
Bonds, Series T, 6.625% due 7/01/2018 (b) 176
A Baa1 840 Puerto Rico Highway and Transportation Authority, Highway Revenue
Bonds, Series T, 6.625% due 7/01/2018 861
AA NR 1,495 Puerto Rico Housing Finance Corporation, Multi-Family Mortgage
Revenue Bonds, Portfolio A, Series I, 7.50% due 4/01/2022 1,546
AAA Aaa 1,125 Puerto Rico Housing Finance Corporation, Single-Family Mortgage
Revenue Bonds, Series C, 6.85% due 10/15/2023 1,146
South AAA Aaa 2,000 North Charleston, South Carolina, Sewer District Revenue Refunding
Carolina--4.4% Bonds, Series 1992-A, 6% due 7/01/2018 (c) 1,924
AAA Aaa 3,000 Piedmont Municipal Power Agency, South Carolina, Electric Revenue
Refunding Bonds, Series 1991, 6.75% due 1/01/2019 (d) 3,195
AAA Aaa 1,000 Piedmont Municipal Power Agency, South Carolina, Electric Revenue
Refunding Bonds, Series 1991-A, 6.25% due 1/01/2021 (d) 1,000
AAA Aaa 1,675 Piedmont Municipal Power Agency, South Carolina, Electric Revenue
Refunding Bonds, Series 1991, 6.25% due 1/01/2018 (d) 1,649
AAA Aaa 1,000 Piedmont Municipal Power Agency, South Carolina, Electric Revenue
Refunding Bonds, Series 1991, 6.50% due 1/01/2014 (d) 1,033
AAA Aaa 2,600 Piedmont Municipal Power Agency, South Carolina, Electric Revenue
Bonds, Series 1984, 5.50% due 1/01/2010 2,467
AAA Aaa 2,600 Piedmont Municipal Power Agency, South Carolina, Special Optional
Redemption Defeased, 11% due 1/01/2025 (b) 2,774
AAA Aaa 12,500 South Carolina State Public Service Authority, Electric System Expansion
Revenue Refunding Bonds (Santee Cooper), Series 1993-A, 5.50%
due 7/01/2021 (c) 11,034
Tennessee-- AAA Aaa 1,000 Metropolitan Nashville Airport Authority, Tennessee, Airport Improvement
0.2% Revenue Refunding Bonds, Series 1991-C, 6.60% due 7/01/2015 (d) 1,025
Texas--7.1% AAA Aaa 2,000 Austin (City of), Texas, Combined Utility Systems Revenue Bonds, Series
1989-X, 6.25% due 11/15/2019 (c) 1,980
AAA Aaa 1,820 Austin (City of), Texas, Combined Utility Systems Revenue Refunding
Bonds, Series 1985-A, 10.25% due 11/15/2012 (b) 2,003
AAA Aaa 2,180 Austin (City of), Texas, Combined Utility Systems Revenue Refunding
Bonds, Series 1985-A, 10.25% due 11/15/2012 (b) 2,400
</TABLE>
<PAGE>
<TABLE>
The Municipal Fund Accumulation Program, Inc.
Schedule of Investments as of June 30, 1994 (continued) (in Thousands)
<CAPTION>
S&P Moody's Face Value
State Rating Rating Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
Texas A A $ 2,000 Austin (City of), Texas, Combined Utility Systems Revenue Refunding
(concluded) Bonds, Series 1986, 6% due 5/15/2015 $ 1,908
AAA Aaa 2,000 Austin (City of), Texas, Combined Utility Systems Revenue Refunding
Bonds, Series 1991, 6.50% due 5/15/2011 (e) 2,057
AAA Aaa 2,000 Austin (City of), Texas, Combined Utility Systems Revenue Refunding
Bonds, Series 1993-B, 5.25% due 5/15/2018 (c) 1,726
AAA Aaa 600 Austin (City of), Texas, Water, Sewer and Electric Revenue Refunding
Bonds, Series 1982, 14.25% due 11/15/2006 (b) 749
AA+ Aa1 1,000 Board of Regents of The University of Texas System, Permanent
University Fund Refunding Bonds, Series 1991, 6.50% due 7/01/2011 1,020
AA+ Aa1 1,000 Board of Regents of The University of Texas System, Permanent
University Fund Refunding Bonds, Series A, 6.25% due 7/01/2013 1,000
AAA Aaa 1,000 Dallas County, Texas, General Obligation Bonds, 6.50% due 8/15/2008 (g) 1,038
AAA NR 1,250 Harris County, Texas, Toll Road Unlimited Tax and Subordinate Lien,
Revenue Refunding Bonds, Series 1988, 8.125% due 8/01/2015 (b) 1,416
AAA Aaa 1,000 Houston (City of), Texas, Water and Sewer System Junior Lien, Revenue
Refunding Bonds, Series 1991-C, 6.375% due 12/01/2017 (e) 1,001
A A 1,000 Houston (City of), Texas, Water and Sewer System, Prior Lien, Revenue
Refunding Bonds, Series 1991-B, 6.75% due 12/01/2008 1,042
A A 1,000 Houston (City of), Texas, Water and Sewer System, Prior Lien, Revenue
Refunding Bonds, Series 1992-B, 6.375% due 12/01/2014 989
AAA Aaa 5,000 Lower Colorado River Authority of Texas, Junior Lien, Revenue Refunding
Bonds, Fifth Supplemental Series, 5.25% due 1/01/2015 (c) 4,390
AAA Aaa 5,000 Lower Colorado River Authority of Texas, Junior Lien, Revenue Refunding
Bonds Series 1992, 6% due 1/01/2017 (e) 4,815
AAA Aaa 250 Lower Colorado River Authority of Texas, Priority Revenue Refunding
Bonds, Series 1991-A, 6% due 1/01/2015 (e) 242
AAA Aaa 2,000 Lower Colorado River Authority of Texas, Priority Revenue Refunding
Bonds, Series 1991-B, 6% due 1/01/2015 (e) 1,938
AAA Aaa 3,000 San Antonio (City of), Texas, Water System Revenue Refunding Bonds,
6.50% due 5/15/2010 (c) 3,097
AAA Aaa 2,000 San Antonio (City of), Texas, Water System Revenue Refunding Bonds,
Series 1992, 6% due 5/15/2016 (c) 1,931
AA Aa 1,000 State of Texas, Veterans, Land General Obligation Refunding Bonds,
6.50% due 12/01/2021 1,010
AAA Aaa 2,000 Texas Municipal Power Agency Revenue Bonds, Series 1982, 14.625%
due 9/01/2012 (b) 2,489
AAA Aa 2,000 Texas Water Development Board, State Revolving Fund, Senior Lien,
Revenue Bonds, Series 1992, 6% due 7/15/2013 1,956
<PAGE>
Utah--2.3% AA Aa 5,000 Intermountain Power Agency, Utah, Power Supply Revenue Refunding
Bonds, Series 1993-A, 5.50% due 7/01/2020 4,405
AA Aa 5,500 Intermountain Power Agency, Utah, Power Supply Revenue Refunding
Bonds, Series 1985-G, 9.375% due 7/01/2018 5,880
AA Aa 1,000 Intermountain Power Agency, Utah, Power Supply Revenue Refunding
Bonds, Series 1987-D, 8.625% due 7/01/2021 1,105
AA Aa 2,000 Intermountain Power Agency, Utah, Power Supply Revenue Refunding
Bonds, Series A, 5% due 7/01/2023 1,626
</TABLE>
<TABLE>
The Municipal Fund Accumulation Program, Inc.
Schedule of Investments as of June 30, 1994 (concluded) (in Thousands)
<CAPTION>
S&P Moody's Face Value
State Rating Rating Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
Virginia-- AAA Aaa $ 2,750 Commonwealth Transportation Board, Commonwealth of Virginia,
1.3% Transportation Contract Revenue Bonds, Series 1988, 7.80% due
3/01/2016 (b) $ 3,062
AA Aa 1,500 Commonwealth Transportation Board, Commonwealth of Virginia,
Transportation Contract Revenue Bonds (Northern Virginia Transportation
District Program), Series 1993-C, 5.25% due 5/15/2019 1,295
AA+ Aa 2,000 Virginia Housing Development Authority, Commonwealth Mortgage Bonds,
Series 1988-B1 Issue, 7.80% due 7/01/2017 2,026
AA Aa 1,360 Virginia Public School Authority, School Financing Revenue Bonds (1987
Resolution), Series 1992-B, 5.75% due 1/01/2013 1,297
Washington-- AA Aa 2,000 Washington (State of), General Obligation Bonds, Series A, 6% due
1.5% 3/01/2016 1,918
AA Aa 2,000 Washington (State of), General Obligation Bonds, Series A, 6.75% due
2/01/2015 2,120
AA Aa 2,500 Washington (State of), General Obligation Bonds (Various Purpose),
Series 1993-B, 5.50% due 5/01/2018 2,252
AA Aa 2,000 Washington (State of), General Obligation Refunding Bonds, Series
R 92a, 6.25% due 9/01/2009 2,017
Wisconsin-- AA Aa 1,000 Wisconsin Housing and Economic Development Authority, Home
2.1% Ownership Revenue Bonds, Series 1992-1, 6.75% due 9/01/2015 1,009
AAA Aaa 2,000 Wisconsin Public Power Incorporated System, Power Supply System
Revenue Bonds, Series 1990-A, 7.40% due 7/01/2020 (b)(e) 2,262
AAA Aaa 3,750 Wisconsin Public Power Incorporated System, Power Supply System
Revenue Bonds, Series 1991-A, 6.875% due 7/01/2021 (b)(e) 4,165
AAA Aaa 2,500 Wisconsin Public Power Incorporated System, Power Supply System
Revenue Refunding Bonds, Series 1993-A, 5.25% due 7/01/2021 (e) 2,127
AA Aaa 2,000 Wisconsin (State of), General Obligation Bonds, Series 1992-A, 6.30%
due 5/01/2012 (b) 2,128
<PAGE>
Total Investments (Cost--$550,322)--97.6% 560,084
Other Assets Less Liabilities--2.4% 13,723
--------
Net Assets--100.0% $573,807
========
<FN>
(a) Escrowed to maturity.
(b) Prerefunded issues.
(c) MBIA Insured.
(d) FGIC Insured.
(e) AMBAC Insured.
(f) FHA Insured.
(g) Unlimited Tax.
See Notes to Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
The Municipal Fund Accumulation Program, Inc.
Statement of Assets and Liabilities As of June 30, 1994
<S> <C> <C>
Assets:
Investments, at value (identified cost--$550,321,873) (Note 1a) $560,084,243
Cash 3,404,155
Receivables:
Interest $ 13,685,136
Capital shares sold 1,704 13,686,840
------------
Prepaid registration fees and other assets (Note 1d) 9,358
------------
Total assets 577,184,596
------------
Liabilities:
Payables:
Securities purchased 2,187,120
Capital shares redeemed 618,721
Investment adviser (Note 2) 239,468 3,045,309
------------
Accrued expenses and other liabilities 332,270
------------
Total liabilities 3,377,579
------------
Net Assets $573,807,017
============
<PAGE>
Net Assets Consist of:
Common Stock, $0.01 par value, 50,000,000 shares authorized $ 315,065
Paid-in capital in excess of par 558,516,355
Undistributed investment income--net 1,300,170
Undistributed realized capital gains--net (Note 5) 3,913,057
Unrealized appreciation on investments--net 9,762,370
------------
Net Assets:
Equivalent to $18.21 per share based on 31,506,511 shares outstanding $573,807,017
============
</TABLE>
<TABLE>
<CAPTION>
The Municipal Fund Accumulation Program, Inc.
Statement of Operations For the Six Months Ended June 30, 1994
<S> <C> <C>
Investment Income (Note 1c):
Interest and amortization of premium and discount earned $ 18,915,279
Expenses:
Investment advisory fees (Note 2) $ 1,500,117
Transfer agent fees 899,449
Printing and shareholder reports 73,007
Accounting services (Note 2) 35,218
Registration fees (Note 1d) 30,187
Custodian fees 25,715
Professional fees 25,379
Pricing services 16,770
Directors' fees and expenses 7,826
Other 4,472
--------------
Total expenses 2,618,140
--------------
Investment income--net 16,297,139
--------------
Realized & Unrealized Gain (Loss) on Investments--Net (Notes 1c & 3):
Realized gain on investments--net 3,913,057
Change in unrealized appreciation on investments--net (54,668,090)
--------------
Net Decrease in Net Assets Resulting from Operations $ (34,457,894)
==============
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
For the Six For the Year
The Municipal Fund Accumulation Program, Inc. Months Ended Ended
Statements of Changes in Net Assets June 30, 1994 Dec. 31, 1993
Increase (Decrease) in Net Assets:
<S> <C> <C>
Operations:
Investment income--net $ 16,297,139 $ 32,704,233
Realized gain on investments--net 3,913,057 8,819,734
Change in unrealized appreciation on investments--net . (54,668,090) 24,407,096
------------- -------------
Net increase (decrease) in net assets resulting from operations (34,457,894) 65,931,063
------------- -------------
Dividends & Distributions to Shareholders (Note 1e):
Investment income--net (16,428,809) (32,611,400)
Realized gain on investments--net -- (8,089,293)
------------- -------------
Net decrease in net assets resulting from dividends and distributions to shareholders (16,428,809) (40,700,693)
------------- -------------
Capital Share Transactions (Note 4):
Net increase (decrease) in net assets derived from capital share transactions (14,894,585) 77,405,763
------------- -------------
Net Assets:
Total increase (decrease) in net assets (65,781,288) 102,636,133
Beginning of period 639,588,305 536,952,172
------------- -------------
End of period* $ 573,807,017 $ 639,588,305
============= =============
<FN>
*Undistributed investment income--net $ 1,300,170 $ 1,431,840
============= =============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
For the Six
The Municipal Fund Accumulation Program, Inc. Months Ended For the Year Ended December 31,
Financial Highlights June 30, 1994 1993 1992 1991 1990
The following per share data and ratios have been
derived from information provided in the financial
statements.
Increase (Decrease) in Net Asset Value:
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period $ 19.79 $ 18.93 $ 18.63 $ 17.83 $ 18.09
---------- ---------- ---------- ---------- ---------
Investment income--net .51 1.09 1.15 1.23 1.30
Realized and unrealized gain (loss) on
investments--net (1.58) 1.11 .30 .80 (.26)
---------- ---------- ---------- ---------- ---------
Total from investment operations (1.07) 2.20 1.45 2.03 1.04
---------- ---------- ---------- ---------- ---------
Less dividends and distributions:
Investment income--net (.51) (1.09) (1.15) (1.23) (1.30)
Realized gain on investments--net -- (.25) -- -- --
---------- ---------- ---------- ---------- ---------
Total dividends and distributions (.51) (1.34) (1.15) (1.23) (1.30)
---------- ---------- ---------- ---------- ---------
Net asset value, end of period $ 18.21 $ 19.79 $ 18.93 $ 18.63 $ 17.83
========== ========== ========== ========== =========
Total Investment Return:
Based on net asset value per share (5.44%)++ 11.99% 8.08% 11.83% 6.03%
========== ========== ========== ========== =========
Ratios to Average Net Assets:
Expenses .87%* .86% .88% .91% .97%
========== ========== ========== ========== =========
Investment income--net 5.43%* 5.52% 6.15% 6.76% 7.23%
========== ========== ========== ========== =========
Supplemental Data:
Net assets, end of period (in thousands) $ 573,807 $ 639,588 $ 536,952 $ 435,224 $ 359,291
========== ========== ========== ========== =========
Portfolio turnover 7% 23% 24% 36% 20%
========== ========== ========== ========== =========
<FN>
*Annualized.
++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
<PAGE>
The Municipal Fund Accumulation Program, Inc.
Notes to Financial Statements
1. Significant Accounting Policies:
The Municipal Fund Accumulation Program, Inc. (the "Program") is
registered under the Investment Company Act of 1940 as a
diversified, open-end management investment company. The following
is a summary of significant accounting policies followed by the
Program.
(a) Valuation of securities--Portfolio securities are valued by the
Program's pricing agent, Kenny S&P Evaluation Services. These values
are not necessarily bids or actual last sale prices, but are
estimates of the price at which the pricing agent believes the
Program could sell such portfolio securities. The Board of Directors
has examined the methods to be used by the Program's pricing agent
in estimating the value of portfolio securities and believes that
such methods will reasonably and fairly approximate the price at
which portfolio securities may be sold and will result in a good
faith determination of the fair value of such securities.
(b) Income taxes--It is the Program's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute substantially all of its
taxable income to its shareholders. Therefore, no Federal income tax
provision is required.
(c) Security transactions and investment income--Security
transactions are recorded on the dates the transactions are entered
into (the trade dates). Interest income (net of amortization of
premium and discount) is recognized on the accrual basis. Realized
gains and losses on security transactions are determined on the
identified cost basis.
(d) Prepaid registration fees--Prepaid registration fees are charged
to expense as the related shares are issued.
(e) Dividends and distributions to shareholders--Dividends from net
investment income are declared and paid monthly. Distributions of
capital gains are recorded on the ex-dividend dates.
2. Investment Advisory Agreement and Transactions with Affiliates:
The Program has entered into an Investment Advisory Agreement with
Fund Asset Management, L.P. ("FAM"). The general partner of FAM is
Princeton Services, Inc., an indirect wholly-owned subsidiary of
Merrill Lynch & Co. ("ML & Co."). The limited partners are ML & Co.
and Fund Asset Management, Inc. ("FAMI"), which is also an indirect
wholly-owned subsidiary of ML & Co.
<PAGE>
FAM is responsible for the management of the Program's portfolio and
provides the necessary personnel, facilities, equipment and certain
other services necessary to the operations of the Program. For such
services, the Program pays a monthly fee of 0.50%, on an annual
basis, of the value of the Program's average daily net assets. The
Investment Advisory Agreement obligates FAM to reimburse the Program
to the extent the Program's expenses (excluding interest, taxes,
brokerage fees and extraordinary items) exceed 2.5% of the Program's
first $30 million of average daily net assets, 2.0% of the next $70
million of average daily net assets, and 1.5% of the average daily
net assets in excess thereof. No fee payment will be made to the
Adviser during any fiscal year which would cause such expenses to
exceed the foregoing expense limitations applicable at the time of
such payment.
FAM has entered into an Administrative Agreement with Merrill Lynch,
Pierce, Fenner & Smith Inc. ("MLPF&S"), Prudential Securities, Inc.,
Dean Witter Reynolds Inc., and Smith Barney Shearson, Inc. (the
"Administrators"), whereby the Administrators perform certain
administrative duties on behalf of FAM.
The Administrators receive a monthly fee from FAM equal to 0.20%, on
an annual basis, of the Program's average daily net assets and have
agreed to reimburse FAM for a portion of the reimbursement of
expenses to the Program as described above, required to be made by
FAM.
Accounting services are provided to the Program by FAM at cost.
Certain officers and/or directors of the Program are officers and/or
directors of FAM, FAMI, MLPF&S, and/or ML & Co.
The Municipal Fund Accumulation Program, Inc.
Notes to Financial Statements (concluded)
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the six months ended June 30, 1994 were $42,695,015 and
$54,720,442, respectively.
Net realized and unrealized gains as of June 30, 1994 were as
follows:
Realized Unrealized
Gains Gains
Long-term securities $ 3,913,057 $ 9,762,370
----------- -----------
Total $ 3,913,057 $ 9,762,370
=========== ===========
<PAGE>
As of June 30, 1994, net unrealized appreciation for Federal income
tax purposes aggregated $9,762,370, of which $26,816,735 related to
appreciated securities and $17,054,365 related to depreciated
securities. The aggregate cost of investments at June 30, 1994 for
Federal income tax purposes was $550,321,873.
4. Capital Share Transactions:
Transactions in capital shares were as follows:
For the Six Months Ended Dollar
June 30, 1994 Shares Amount
Shares sold 3,678,145 $ 70,035,292
Shares issued to shareholders
in reinvestment of dividends 835,804 15,755,838
------------ ------------
Total issued 4,513,949 85,791,130
Shares redeemed (5,321,851) (100,685,715)
------------ ------------
Net decrease (807,902) $(14,894,585)
============ ============
For the Year Ended Dollar
December 31, 1993 Shares Amount
Shares sold 10,957,746 $215,246,276
Shares issued to shareholders
in reinvestment of dividends
and distributions 1,998,028 39,298,500
------------ ------------
Total issued 12,955,774 254,544,776
Shares redeemed (9,010,119) (177,139,013)
------------ ------------
Net increase 3,945,655 $ 77,405,763
============ ============
5. Capital Loss Carryforward:
As of December 31, 1993, expired capital loss carryforward in the
amount of $13,751,527 has been reclassified to paid-in capital in
excess of par.
<PAGE>
Officers and Directors
Arthur Zeikel--President and Director
Ronald W. Forbes--Director
Cynthia A. Montgomery--Director
Charles C. Reilly--Director
Kevin A. Ryan--Director
Richard R. West--Director
Terry K. Glenn--Executive Vice President
Vincent R. Giordano--Senior Vice President
Donald C. Burke--Vice President
Zita C. Millett--Vice President
Gerald M. Richard--Treasurer
Susan B. Baker--Secretary
Custodian and Transfer Agent
The Bank of New York
110 Washington Street
New York, NY 10286
