The
Municipal
Fund
Accumulation
Program,
Inc.
Annual Report
December 31, 1993
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 repre-
sentation 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
To Our Shareholders:
For the year ended December 31, 1993, The Municipal Fund
Accumulation Program, Inc.'s net yield was 5.59%. During this
period, the Program's per share net asset value rose from $18.93
to $19.79, reflecting the generally favorable pattern of the
municipal bond market during 1993. Total investment return for
The Municipal Fund Accumulation Program, Inc. for the 12-month
period ended December 31, 1993 was +11.99%, based on the change
in per share net asset value, and assuming reinvestment of $1.120
per share income dividends and $0.236 per share capital gains
distributions.
For the six months ended December 31, 1993, The Municipal Fund
Accumulation Program, Inc.'s net annualized yield was 5.31%.
Total return for the six-month period was +4.29%, based on a
change in per share net asset value from $19.74 to $19.79, and
assuming reinvestment of $0.553 per share income dividends and
$0.236 per share capital gains distribution.
<PAGE>
The Municipal Fund Accumulation Program, Inc. continues its
steady growth. During the year the Program's net assets rose
19.2%, from approximately $537 million to approximately $640
million. Total shares outstanding rose from approximately 28
million at the end of 1992 to approximately 32 million at
December 31, 1993.
The Municipal Market
Economic and financial developments within the United States and
throughout the world are overwhelming and continue to evolve. The
increasing globalization of the world's economies poses new and
difficult challenges for the US financial markets. 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. There were some intermittent pauses along the
way, culminating at times in lower municipal bond prices and
higher municipal bond yields. Nonetheless, by mid-October, the
momentum in the municipal market was such that municipal bond
yields declined to their lowest levels in many years. As of
October 14, 1993, the Bond Buyer's Twenty Bond Index of General
Obligation Bonds was at 5.20%, its low for the year and its
lowest level since February 14, 1974 when it was at 5.18%.
Similarly, the Bond Buyer's Revenue Bond Index was at 5.41%, its
low for the year and its lowest level since the Index was
initiated in September 1979.
With indicators suggesting stronger-than-expected economic
growth, investors became cautious and the municipal bond market
turned decidedly negative in late October and early November. As
a result, municipal bond prices declined and municipal bond
yields rose about 25 basis points--30 basis points (0.25%--
0.30%) during this period. As of November 23, 1993, the Bond
Buyer's Twenty Bond Index of General Obligation Bonds was at
5.49%, and the Bond Buyer's Revenue Bond Index was at 5.74%. The
negative sentiment prevailing in the market in November was
considerably different from the generally positive sentiment
prevailing in the market throughout the first ten months of 1993.
The municipal market recovered in December from this negative
investor sentiment as new issue municipal bond volume temporarily
subsided. Reflecting the improved trend in the market, the Bond
Buyer's Twenty Bond Index of General Obligation Bonds declined 21
basis points from 5.49% at the end of November to 5.28% as of
December 31. Similarly, the Bond Buyer's Revenue Bond Index
declined 22 basis points from 5.74% at the end of November to
5.52% as of December 31. By comparison, these indexes were at
6.17% and 6.40%, respectively, at year-end 1992.
New-issue municipal bond volume for 1993 was at an all-time
record of $290.9 billion, about 23.8% higher than the previous
record volume of $235.0 billion in 1992. The third-largest year
for new-issue volume was 1985 with $207 billion.
<PAGE>
The surge in new-issue volume in 1993 was focused essentially in
refunding issues, with refundings representing just about two-
thirds of total new-issue municipal bond volume for 1993.
Refundings increased 60.7% from $92.2 billion in 1992 to $148.2
billion in 1993. Unquestionably, generally lower overall interest
rates in 1993 encouraged many issuers to come into the market for
the purpose of refinancing at lower interest rates. New-money
financing declined 11.7% from $112.3 billion in 1992 to $99.2
billion in 1993.
The major focus of municipal financing continues to be on
education, with new financing for 1993 totaling $47.1 billion,
an increase of 18.6% from $39.7 billion during 1992. Other
categories of new municipal financing that registered strong
increases over last year's levels were utilities, healthcare,
transportation, electric power, public facilities, housing,
environmental, and industrial development.
California was the leading issuer of municipal securities in 1993
with $38.3 billion in financing, representing a 45.6% increase
from the State's volume of $26.3 billion in 1992. New York was
the next-largest issuer at $30.7 billion, an increase of 35.8%
from the $22.6 billion issued in 1992. Florida was third, rising
31.6% to $17.9 billion from $13.6 billion in 1992. Texas followed
at $16.4 billion, a 4.1% decrease from the $17.1 billion issued
in 1992. Pennsylvania ranked fifth in new-issue volume with $14.6
billion, an 18.7% increase from its 1992 total of $12.3 billion.
With respect to projections for new-issue volume for 1994, the
indication is that 1994 new-issue volume will be less than the
record new-issue volume achieved in 1993. The principal reason
for a decline in new-issue volume centers on the fact that
refundings, most probably, no longer will be a major factor in
the volume picture. However, there is still a fair amount of
infrastructure needs throughout the country.
Looking ahead, we expect the state of the economy to be in the
forefront of all policy decisions. Furthermore, the state of the
economy will influence the future trends of the financial
markets. Economic growth in the fourth quarter of 1993 was very
strong, and the consensus is that growth will continue but at a
more sustainable pace going into 1994. Furthermore, inflation,
which is presently running at its lowest rate in many years, is
expected to remain relatively favorable.
Any assessment of the economy has to take into account future
monetary policy. We expect the Federal Reserve Board to continue
to be particularly sensitive to both domestic and international
events. In our opinion, the Federal Reserve Board will continue
to implement its policy in line with economic fundamentals and
inflationary considerations.
<PAGE>
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 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.
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 81% invested in securities rated AAA or AA by
Moody's Investors Service, Inc. or Standard & Poor's Corporation.
The remaining 19% 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 Standard and Poor's, respectively.
Furthermore, the Fund's portfolio is widely diversified with 259
separate issues representing 32 states and the Commonwealth of
Puerto Rico.
The municipal market continues to be volatile, and market
activity has been brisk. For The Municipal Fund Accumulation
Program, Inc., we believe it is important to maintain a
consistency in tax-exempt income; consequently, the Program was
fully invested throughout most of the year.
During 1993, we generally invested cash reserves in good-quality
bonds with tax-exempt yields-to-maturity ranging from
approximately 5.20% to 6.40%. For the most part, these
represented new issues we considered attractive. In addition, we
sold some of the Program's holdings and, for the most part, were
in a position to realize capital gains. These strategies enabled
the Program to provide a total return of +11.99% for the fiscal
year.
Investment Outlook
In upcoming months, the municipal market will reflect its own
particular volatility and its own ongoing changes in value
relationships. Historically, municipal bond yields are at
relatively low levels. As such, the municipal market is bound to
reflect intermittent periods of consolidation, particularly in
periods of heavy supply. Furthermore, in the present economic
environment, we cannot envision municipal bond yields being
substantially lower than those which prevailed in mid-October of
1993, at least in the near term.
<PAGE>
However, and 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 September 30, 1993 was approximately
$1,240 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.
Given the factors that should favorably influence the municipal
market over time, we plan to continue investing the Program's
available funds selectively in good-quality tax-exempt
securities. We will continue to look for ways to improve the
Program's rate of return by making suitable bond swaps within the
portfolio. This strategy is in keeping with the Program's
objective of seeking tax-exempt income, with an emphasis on good-
quality holdings.
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
February 7, 1994
Officers and Directors
Arthur Zeikel--President and Director
Ronald W. Forbes--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
<PAGE>
Custodian and Transfer Agent
The Bank of New York
110 Washington Street
New York, NY 10286
The Municipal Fund Accumulation Program, Inc.
Total Return Based on a $10,000 Investment
GRAPHIC MATERIAL APPEARS HERE. SEE APPENDIX: ITEM 1.
The Municipal Fund Accumulation Program, Inc.
Important Tax Information
All of the net investment income distributions paid monthly by
The Municipal Fund Accumulation Program, Inc. during its taxable
year ended December 31, 1993, qualify as tax-exempt interest
dividends for Federal income tax purposes. Additionally, the
following summarizes the per share capital gain distributions
paid by the Program during the year.
Short-Term Long-Term
Record Date Payable Date Capital Gain Capital Gain
12/30/93 12/31/93 $.017001 $.236280
Please retain this information for your records.
<TABLE>
The Municipal Fund Accumulation Program, Inc.
Schedule of Investments as of December 31, 1993 (in Thousands)
<CAPTION>
S&P Moody's Face Value
Rating Rating Amount Issue (Note 1a)
<S> <S> <C> <S> <C>
Alabama--0.4%
AA A1 $ 2,000 City of Birmingham, Alabama, General Obigation Refunding Bonds, Series 1988,
8% due 10/01/2015 $ 2,307
Alaska--0.1%
A+ Aa1 690 Alaska Housing Finance Corporation, Insured Mortgage Program Refunding Bonds,
1990 First Series, 7.80% due 12/01/2030 734
<PAGE>
Arizona--2.1%
AA Aa 2,000 Salt River Project, Arizona, Agricultural Improvement and Power District,
Electric System Revenue Bonds, Series 1991-A, 6.50% due 1/01/2022 2,185
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 1,078
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 4,939
AA Aa 2,000 Salt River Project, Arizona, Agricultural Improvement and Power Di strict,
Electric System Revenue Bonds, Series 1992-C, 6.25% due 1/01/2019 2,168
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 2,959
California--12.3%
AA Aa 765 California Department of Veterans' Affairs, Home Purchase Revenue Bonds, Series 1984-A,
10.50% due 8/01/2010 792
AA Aa 1,500 California Department of Water Resources, Water System Revenue Bonds
(Central Valley Project), Series L, 5.50% due 12/01/2023 1,493
AA Aa 2,000 California Department of Water Resources, Water System Revenue
Bonds (Central Valley Project), Series L, 5.875% due 12/01/2025 2,056
AA- Aa 145 California Health Facilities Financing Authority, Stanford University Hospital
Revenue Bonds, Series 1991-A, 6.50% due 11/01/2020 156
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 1,153
AA Aa 1,000 Los Angeles, California, Department of Water and Power, Electric Plant
Revenue Bonds, 7.125% due 5/15/2030 1,167
AA Aa 1,000 Los Angeles, California, Department of Water and Power, Electric Plant
Revenue Bonds, Second Issue, 6.75% due 12/15/2029 1,145
AA Aa 10,000 Los Angeles, California, Department of Water and Power, Electric Plant
Revenue Refunding Bonds, 5.375% due 9/01/2023 9,817
AAA Aaa 7,000 Los Angeles (City of), California, Wastewater System Revenue Refunding
Bonds, Series 1993-D, 5.20% due 11/01/2021 (d) 6,824
AAA Aaa 2,000 Los Angeles County, California, Certificates of Participation (Correctional
Facilities Project), 6.50% due 9/01/2013 (c) 2,172
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) 953
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) 2,931
AAA Aaa 1,000 Los Angeles County, California, Transportation Commission Sales Tax
Revenue Refunding Bonds, Series 1988-A, 8% due 7/01/2018 (b) 1,186
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) 1,242
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) 1,511
AA Aa 5,000 Metropolitan Water District of Southern California, Water Revenue Bonds,
Issue of 1992, 5.50% due 7/01/2019 5,036
AAA Aaa 5,000 Metropolitan Water District of Southern California, Water Works, General
Obligation Bonds, Series G, 6.50% due 3/01/2012 5,552
AA Aa 2,000 Metropolitan Water District of Southern California, Water Works Revenue
Bonds, Issue of 1992, 5% due 7/01/2020 1,899
</TABLE>
<PAGE>
<TABLE>
The Municipal Fund Accumulation Program, Inc.
Schedule of Investments as of December 31, 1993 (continued) (in Thousands)
<CAPTION>
S&P Moody's Face Value
Rating Rating Amount Issue (Note 1a)
<S> <S> <C> <S> <C>
California (concluded)
A- A1 $ 2,000 San Diego (City of), California, Public Facilities Financing Authority, Sewer
Revenue Bonds, Series 1993-A, 5.25% due 5/15/2020 $ 1,920
AA Aa 2,000 San Francisco, California, City and County Public Utility Commission, Water
Revenue Refunding Bonds, Series 1987, 8% due 11/01/2011 2,318
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 2,296
AAA Aaa 8,000 Southern California Public Power Authority, Transmission Project Revenue
Refunding Subordinated Bonds, Series 1993-A, 5% due 7/01/2022 (c) 7,615
AA- Aa 3,750 Southern California Public Power Authority, Transmission Project Revenue
Refunding Subordinated Crossover Bonds (Southern Transmission Project),
5.50% due 7/01/2020 3,698
A+ Aa 5,000 State of California, General Obligation Bonds, 6.25% due 9/01/2012 5,577
A+ Aa 2,000 State of California, General Obligation Refunding Bonds, 5.15% due 10/01/2019 1,917
A+ Aa 2,500 State of California, Various Purpose General Obligation Bonds, 6.25% due 10/01/2019 2,863
AAA Aaa 2,000 University of California, Housing Revenue Bonds, Group A, Series X,
7.60% due 11/01/2018 (b)(c) 2,258
AAA Aaa 1,000 University of California Revenue Bonds, Series 1989-B, Multi-Purpose
Project, 6.75% due 9/01/2023 (b)(e) 1,151
Colorado--0.5%
AA Aa 3,125 Colorado Springs (City of), Colorado, Utilities System Revenue Refunding
Bonds, Series 1991-A, 6.50% due 11/15/2015 3,458
Connecticut--2.4%
AA Aa 3,000 Connecticut Housing Finance Authority, Housing Mortgage Finance
Program Bonds, Series 1990-B, Sub-Series B-1, 7.55% due 11/15/2008 3,291
AA Aa 1,250 Connecticut Housing Finance Authority, Housing Mortgage Finance
Program Bonds, Series 1992-A, 5.85% due 11/15/2016 1,283
AA Aa 1,200 Connecticut Housing Finance Authority, Housing Mortgage Finance
Program Bonds, Series 1993-A, 6.20% due 5/15/2014 1,273
AAA NR 1,400 Connecticut State, Special Tax Obligation Revenue Bonds, Transportation
Infrastructure Purposes, Series 1991-A, 6.75% due 6/01/2011 (b) 1,646
AA- A1 4,000 Connecticut State, Special Tax Obligation Revenue Bonds, Transportation
Infrastructure Purposes, Series 1993-C, 5% due 10/01/2013 3,926
AA- A1 1,000 Connecticut State, Special Tax Obligation Revenue Refunding Bonds, Transportation
Infrastructure Purposes, Series 1993-A, 5.375% due 9/01/2008 1,035
AA- Aa 1,000 State of Connecticut, General Obligation Refunding Bonds, Series E, 5% due 3/15/2010 992
AA- Aa 2,000 State of Connecticut, General Obligation Refunding Bonds, Series 1993-A,
5.60% due 11/15/2010 2,092
<PAGE>
Florida--6.3%
NR Aaa 1,000 Broward County, Florida, General Obligation Bonds (Environmentally
Sensitive Lands Project), Series 1989, 6.90% due 7/01/2009 (b) 1,121
A A 1,800 Broward County, Florida, Resource Recovery Revenue Bonds, Series 1984
(North Project), 7.95% due 12/01/2008 2,056
A A 885 Broward County, Florida, Resource Recovery Revenue Bonds, Series 1984
(South Project), 7.95% due 12/01/2008 1,011
AAA Aaa 1,000 Escambia County Utility Authority, Florida, Utilities System Revenue Bonds,
Series 1985-A, 9.60% due 1/01/2015 (b)(c) 1,139
AAA Aaa 1,000 Florida Municipal Power Agency, Revenue Refunding Bonds, (Stanton Project),
Series 1991, 6% due 10/01/2015 (c) 1,052
AAA Aaa 3,000 Florida Municipal Power Agency, Revenue Bonds, (Stanton II Project),
6% due 10/01/2027 (b)(e) 3,386
AA Aa 1,000 Florida State Board of Education, Public Education Capital Outlay Bonds,
Series 1992-C, 5.85% due 6/01/2018 1,044
</TABLE>
<TABLE>
The Municipal Fund Accumulation Program, Inc.
Schedule of Investments as of December 31, 1993 (continued) (in Thousands)
<CAPTION>
S&P Moody's Face Value
Rating Rating Amount Issue (Note 1a)
<S> <S> <C> <S> <C>
Florida (concluded)
AA Aa $ 2,400 Florida State Board of Education, Public Education Capital Outlay Bonds,
Series 1992-C, 5.875% due 6/01/2023 $ 2,507
AA Aa 2,500 Florida State Board of Education, Public Education Capital Outlay
Refunding Bonds, Series 1989-A, 6% due 6/01/2025 2,602
AA UR* 2,000 Jacksonville, Florida, Electric Authority, Bulk Power Supply System Revenue Bonds
(Scherer 4 Project), Issue One, Series 1991-A, 6.75% due 10/01/2021 (b) 2,322
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 1,109
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 9,770
AAA Aaa 1,000 Orange County, Florida, Tourist Development Tax Revenue Bonds,
Series 1992-B, 6% due 10/01/2021 (e) 1,058
AA- Aa 3,000 Orlando, Florida, Utilities Commission Water and Electric Subordinated
Revenue Refunding Bonds, Series 1993-A, 5.25% due 10/01/2023 2,938
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 3,263
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 1,639
AAA Aaa 2,000 State of Florida, Department of Transportation, Turnpike Revenue Bonds,
Series 1989-A, 7.60% due 7/01/2014 (b)(c) 2,367
<PAGE>
Georgia--4.2%
AAA Aa 2,000 Atlanta (City of), Georgia, Water and Sewage Revenue Bonds,
Series 1985, 9.50% due 1/01/2008 (b) 2,179
AA- A3 2,000 Development Authority of Burke County, Georgia, Pollution Control Revenue Bonds
(Oglethorpe Power Corporation/Vogtle Project), Series 1984, 10.625% due 1/01/2004 2,053
AA- A3 2,000 Development Authority of Burke County, Georgia, Pollution Control Revenue Bonds
(Oglethorpe Power Corporation/Vogtle Project), Series 1984-B, 10.50% due 1/01/2014 (b) 2,040
AA- A3 3,000 Development Authority of Burke County, Georgia, Pollution Control Revenue Bonds
(Oglethorpe Power Corporation/Vogtle Project), Series 1985-B, 9.875% due 1/01/2010 3,232
AA- Aaa 3,250 Municipal Electric Authority of Georgia, General Power Revenue Bonds,
Series 1988-B, 8% due 1/01/2008 (b) 3,798
AA- A1 1,000 Municipal Electric Authority of Georgia, Power Revenue Bonds, Series T,
6.50% due 1/01/2025 1,060
AA- A1 1,000 Municipal Electric Authority of Georgia, Power Revenue Bonds, Series V,
6.60% due 1/01/2018 1,164
AA- A1 4,750 Municipal Electric Authority of Georgia, Special Obligation Refunding
Bonds, Project 1, Fifth Crossover Series 1992, 6.50% due 1/01/2017 5,468
AA- A1 3,000 Municipal Electric Authority of Georgia, Special Obligation Refunding
Bonds, Second Crossover Series 1988, 8.125% due 1/01/2017 3,477
AA+ Aaa 2,000 State of Georgia, General Obligation Bonds, Series 1992-B, 6.30% due 3/01/2010 2,308
Illinois--1.8%
A+ A1 500 Chicago (City of), Illinois, Chicago-O'Hare International Airport Revenue
Bonds, Series 1984-A and B, 10.625% due 1/01/2015 549
A+ A1 500 Chicago (City of), Illinois, Chicago-O'Hare International Airport Revenue
Bonds, Series 1985-A, 8.50% due 1/01/2006 (b) 510
A+ A1 3,300 Chicago (City of), Illinois, Chicago-O'Hare International Airport Revenue
Refunding Bonds, Senior Lien, Series 1993-A, 5% due 1/01/2016 3,115
</TABLE>
<TABLE>
The Municipal Fund Accumulation Program, Inc.
Schedule of Investments as of December 31, 1993 (continued) (in Thousands)
<CAPTION>
S&P Moody's Face Value
Rating Rating Amount Issue (Note 1a)
<S> <S> <C> <S> <C>
Illinois (concluded)
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 $ 2,106
A+ A1 5,000 Illinois Toll Highway Authority, Toll Highway Priority Revenue Bonds,
Series 1992-A, 6.375% due 1/01/2015 5,405
Indiana--1.8%
A+ A1 1,000 Indiana State Office Building Commission, Capital Complex Revenue Bonds (State Office
Building II Facility Refunding), Series 1990-D, 6.90% due 7/01/2011 1,170
A+ A1 1,000 Indiana State Office Building Commission, Correctional Facilities Program
Revenue Bonds, Series 1991, 6.375% due 7/01/2016 1,087
A+ A1 250 Indiana Transportation Finance Authority, Highway Revenue Bonds,
Series 1988-A, 8% due 6/01/2008 (b) 295
A+ A1 2,250 Indiana Transportation Finance Authority, Highway Revenue Bonds,
Series 1988-A, 8.125% due 6/01/2011 (b) 2,665
AA+ Aaa 5,000 Indianapolis, Indiana, Local Public Improvement Bond Bank (City
Guaranteed), Series A, 5.90% due 1/10/2014 5,286
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 1,112
<PAGE>
Kentucky--2.5%
AA Aa2 2,000 Jefferson County, Kentucky, Pollution Control Revenue Bonds (Louisville Gas and
Electric Company Project), Series 1993-B, 5.625% due 8/15/2019 2,033
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 1,239
AAA NR 1,000 Kentucky Turnpike Authority, Economic Development Road Revenue
Bonds, Series 1986-A, 7.875% due 1/01/2004 (b) 1,124
AAA NR 3,000 Kentucky Turnpike Authority, Economic Development Road Revenue
Bonds, Series 1987-A, 8.25% due 7/01/2007 (b) 3,494
AAA Aaa 2,000 Kentucky Turnpike Authority, Economic Development Road Revenue Refunding Bonds
(Revitalization Projects), Series 1993, 5.50% due 7/01/2008 (e) 2,100
A+ A 4,000 Kentucky Turnpike Authority, Resource Recovery Road Revenue Bonds,
Series 1987-A, 8% due 7/01/2003 4,589
AAA Aaa 1,250 Kentucky Turnpike Authority, Toll Road Refunding Revenue Bonds, Series
1984-A, 10.75% due 7/01/2010 (b) 1,341
Louisiana--0.2%
NR Aa2 1,000 West Feliciana Parish, Louisiana, Pollution Control Revenue Bonds (Gulf Coast
Utilities Company Project) (Letter of Credit-Bankers' Trust Company), Series 1984-A,
10.625% due 5/01/2014 1,085
Maryland--0.4%
AA1 Aaa 2,000 Maryland Health and Higher Educational Facilities Authority Revenue Bonds (The John
Hopkins Hospital Issue), Series 1990, 7% due 7/01/2023 (b) 2,345
Massachusetts--1.0%
AAA Aaa 1,250 Commonwealth of Massachusetts, General Obligation Bonds, Consolidated Loan,
Series 1984-B, 10.75% due 6/01/2004 (b) 1,326
A+ A 1,000 Commonwealth of Massachusetts, General Obligation Refunding Bonds, Series 1993-A,
5.25% due 2/01/2008 1,008
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 1,107
AAA Aaa 1,000 Massachusetts Housing Finance Agency, Housing Revenue Bonds, Series 1984-B,
10.375% due 12/01/2009 (c) 1,073
AAA Aaa 1,000 Massachusetts Port Authority Revenue Bonds, Series 1982, 13% due 7/01/2013 (a) 1,746
</TABLE>
<PAGE>
<TABLE>
The Municipal Fund Accumulation Program, Inc.
Schedule of Investments as of December 31, 1993 (continued) (in Thousands)
<CAPTION>
S&P Moody's Face Value
Rating Rating Amount Issue (Note 1a)
<S> <S> <C> <S> <C>
Michigan--2.9%
AAA Aaa $ 1,000 Grand Rapids (City of), Michigan, Water Supply System Improvement
Revenue Bonds, Series 1990, 7.25% due 1/01/2020 (b)(d) $ 1,178
AAA Aaa 750 Grand Rapids (City of), Michigan, Water Supply System Revenue
Refunding Bonds, Series 1991, 6.50% due 1/01/2015 (d) 823
AA Aa 1,500 Michigan State Hospital Finance Authority, Hospital Revenue Bonds
(Henry Ford Health System), Series 1990-A, 7% due 7/01/2010 1,670
AA Aa 2,000 Michigan State Hospital Finance Authority, Hospital Revenue Refunding
Bonds (Henry Ford Health System), 5.75% due 9/01/2017 2,048
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) 2,484
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) 1,134
AAA Aaa 1,000 Michigan Strategic Fund, Limited Obligation Revenue Refunding Bonds (The Detroit
Edison Company Pollution Control Bonds Project), Collateralized Series 1991-DD,
6.875% due 12/01/2021 (d) 1,136
AA Aa 2,000 Regents of University of Michigan, Hospital Revenue Refunding Bonds,
Series 1993-A, 5.75% due 12/01/2012 2,041
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 1,385
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) 2,122
AAA Aaa 2,250 Wyandotte (City of), County of Wayne, State of Michigan, 1987 Electric Revenue
and Revenue Refunding Bonds, 7.875% due 10/01/2017 (b)(e) 2,609
Minnesota--2.0%
AA+ NR 750 Minnesota Public Utilities Authority, Water Pollution Control Revenue Bonds,
Series 1990-A, 7.10% due 3/01/2012 862
AAA Aaa 1,600 Southern Minnesota Municipal Power Agency, Power Supply System
Revenue Bonds, Series 1984-B, 11% due 1/01/2016 (b) 1,783
AAA Aaa 5,000 Southern Minnesota Municipal Power Agency, Power Supply System
Revenue Bonds, Series 1988-A, 8.125% due 1/01/2018 (b) 5,851
A+ A1 2,000 Southern Minnesota Municipal Power Agency, Power Supply System
Revenue Bonds, Series 1989-A, 6% due 1/01/2013 2,069
A+ A1 2,000 Southern Minnesota Municipal Power Agency, Power Supply System
Revenue Refunding Bonds, Series A, 5.75% due 1/01/2018 2,069
Nebraska--0.5%
AA NR 2,000 Omaha, Nebraska, Public Power District, Electric Revenue Bonds,
Series 1992-A, 6.50% due 2/01/2017 (b) 2,304
AA Aa 1,200 Omaha, Nebraska, Public Power District, Electric Revenue Bonds,
Series 1993-C, 5.50% due 2/01/2017 1,212
Nevada--0.4%
NR NR 2,000 Clark County School District, Nevada, General Obligation (Limited Tax),
School Improvement Bonds, Series 1988-A, 8% due 3/01/2008 (b) 2,344
<PAGE>
New Jersey--5.3%
AA- Aa 2,500 New Jersey Economic Development Authority, Trenton Office Complex
Revenue Bonds, Series 1989, 6% due 6/15/2012 2,637
AA+ Aa1 3,000 New Jersey General Obligation Refunding Bonds, Series D, 6% due 2/15/2013 3,229
AAA Aaa 1,000 New Jersey Health Care Facilities Financing Authority Revenue Bonds
(Hackensack Medical Center), 6.625% due 7/01/2017 (d) 1,118
AA- A1 2,900 New Jersey Highway Authority (Garden State Parkway), Parkway
Revenue Refunding Bonds, Series 1992, 6% due 1/01/2016 3,044
AAA Aaa 175 New Jersey Housing and Mortgage Finance Agency, Home Buyer
Revenue Bonds, Series 1990-E, 7.65% due 10/01/2016 (c) 183
</TABLE>
<TABLE>
The Municipal Fund Accumulation Program, Inc.
Schedule of Investments as of December 31, 1993 (continued) (in Thousands)
<CAPTION>
S&P Moody's Face Value
Rating Rating Amount Issue (Note 1a)
<S> <S> <C> <S> <C>
New Jersey (concluded)
A+ NR $ 2,000 New Jersey Housing and Mortgage Finance Agency, Housing Revenue
Refunding Bonds, Series 1992-1, 6.60% due 11/01/2014 $ 2,152
AA+ Aa1 1,000 New Jersey State General Obligation Bonds, 6.30% due 8/01/2007 1,113
AA+ Aa1 2,000 New Jersey State General Obligation Refunding Bonds, Series D, 6% due 2/15/2011 2,250
A A 1,500 New Jersey Turnpike Authority, Turnpike Revenue Bonds, Series 1992-A, 6.20% due 1/01/2018 1,612
A A 10,000 New Jersey Turnpike Authority, Turnpike Revenue Bonds, Series C, 6.50% due 1/01/2016 11,794
A A 2,000 New Jersey Turnpike Authority, Turnpike Revenue Refunding Bonds, Series 1991-A
6.75% due 1/01/2008 2,263
AAA Aaa 1,030 New Jersey Turnpike Authority, Turnpike Revenue Refunding Bonds, Series C,
6.25% due 1/01/2010 (e) 1,114
AA A1 1,000 Rutgers, The State University of New Jersey, General Obligation
Refunding Bonds, Series 1992-A, 6.50% due 5/01/2018 1,105
New Jersey & Pennsylvania--0.4%
AAA Aaa 1,100 Delaware River Port Authority, Revenue Refunding Bonds, Series 1989,
7.375% due 1/01/2007 (e) 1,262
AAA Aaa 1,250 Delaware River Port Authority, Revenue Refunding Bonds, Series 1989,
6.50% due 1/01/2008 (e) 1,341
New Mexico--0.3%
AA A1 1,000 Albuquerque (City of), New Mexico, Joint Water and Sewer System,
Revenue Bonds, Series 1990-A, 6% due 7/01/2015 1,035
AA A1 1,000 Albuquerque (City of), New Mexico, Joint Water and Sewer System,
Revenue Refunding Bonds, Series 1984, 10.625% due 7/01/2002 1,068
<PAGE>
New York--18.6%
AA- Aa 975 Municipal Assistance Corporation for the City of New York Revenue
Bonds, Series 59, 6.50% due 7/01/2007 1,047
AA- Aa 1,000 Municipal Assistance Corporation for the City of New York Revenue
Bonds, Series 61, 6.875% due 7/01/2007 1,103
AA- Aa 2,000 Municipal Assistance Corporation for the City of New York Revenue
Bonds, Series 62, 6.75% due 7/01/2006 2,198
A- Aaa 3,000 New York (City of), New York, General Obligation Bonds, Series 1992-A, 8% due 8/15/2021 (b) 3,754
A- Baa1 1,500 New York (City of), New York, General Obligation Bonds, Series 1992-B, 7% due 2/01/2018 1,678
AAA Aaa 2,500 New York (City of), New York, General Obligation Bonds, Series 1992-C,
6.625% due 8/01/2012 (c) 2,796
A- Baa1 3,000 New York (City of), New York, General Obligation Bonds, Series 1992-C,
7.50% due 8/01/2020 3,495
A- Baa1 2,000 New York (City of), New York, General Obligation Bonds, Series 1992-D,
7.50% due 2/01/2016 2,318
A- Baa1 3,000 New York (City of), New York, General Obligation Bonds, Series D, 7.50% due 2/01/2019 3,475
AA Aa 1,000 New York State Dormitory Authority, Cornell University Revenue Bonds,
Series 1990-A, 7.375% due 7/01/2030 1,170
AAA Aaa 1,500 New York State Dormitory Authority, Fordham University Revenue Bonds,
Series 1990, 7.20% due 7/01/2015 (e) 1,742
AAA Aaa 1,395 New York State Dormitory Authority, New York University, Insured
Revenue Bonds, Series 1991, 6% due 7/01/2015 (d) 1,512
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) 1,162
BBB+ Baa1 3,250 New York State Dormitory Authority, State University Educational Facilities Revenue
Bonds, Series 1990-B, 7% due 5/15/2016 3,694
</TABLE>
<PAGE>
<TABLE>
The Municipal Fund Accumulation Program, Inc.
Schedule of Investments as of December 31, 1993 (continued) (in Thousands)
<CAPTION>
S&P Moody's Face Value
Rating Rating Amount Issue (Note 1a)
<S> <S> <C> <S> <C>
New York (continued)
BBB+ Aaa $ 1,060 New York State Dormitory Authority, State University Educational Facilities
Revenue Bonds, Series 1990-C, 7% due 5/15/2018 $ 1,243
BBB+ Baa1 940 New York State Dormitory Authority, State University Educational Facilities
Revenue Bonds, Series 1990C, 7% due 5/15/2018 (b) 1,103
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 2,112
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 1,650
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 578
A A 9,000 New York State, Local Government Assistance Corporation, Revenue
Bonds, Series A, 6.50% due 4/01/2020 9,799
A Aaa 1,000 New York State, Local Government Assistance Corporation, Revenue
Bonds, Series B, 7.375% due 4/01/2012 (b) 1,206
AAA Aaa 2,000 New York State, Local Government Assistance Corporation, Revenue
Bonds, Series 1991-B, 7% due 4/01/2021 (b) 2,337
A A 5,000 New York State, Local Government Assistance Corporation, Revenue
Bonds, Series 1991-C, 7% due 4/01/2016 (b) 5,916
A A 2,000 New York State, Local Government Assistance Corporation, Revenue
Bonds, Series 1992-A, 6.875% due 4/01/2019 2,280
A A 1,000 New York State, Local Government Assistance Corporation, Revenue
Bonds, Series 1993-D, 5% due 4/01/2023 941
A A 2,000 New York State, Local Government Assistance Corporation, Revenue
Refunding Bonds, Series 1993-E, 5.25% due 4/01/2016 1,971
AA Aa 4,500 New York State Medical Care Facilities Finance Agency, Hospital and
Nursing Home, Mortgage Revenue Bonds, Series 1989-A, 7.25% due 2/15/2024 (f) 5,057
BBB+ Baa1 2,155 New York State Medical Care Facilities Finance Agency, Mental Health
Services, Facilities Improvement Revenue Bonds, Series 1989-A, 7.80% due 2/15/2019 2,456
BBB+ Baa1 1,985 New York State Medical Care Facilities Finance Agency, Mental Health Services, Facilities
Improvement Revenue Bonds, Series 1990-B, 7.875% due 8/15/2020 2,349
BBB+ Baa1 1,000 New York State Medical Care Facilities Finance Agency, Mental Health Services, Facilities
Improvement Revenue Bonds, Series 1991-A, 7.75% due 8/15/2011 1,215
AA Aa 6,140 New York State Power Authority, General Purpose Revenue Bonds,
Series V, 8% due 1/01/2017 7,052
AA- Aa 2,000 New York State Power Authority, General Purpose Revenue Bonds,
Series W, 6.50% due 1/01/2008 2,280
AA- Aa 1,750 New York State Power Authority, General Purpose Revenue Bonds,
Series Z, 6.50% due 1/01/2019 1,939
AA- Aa 8,000 New York State Power Authority, General Purpose and Revenue
Refunding Bonds, Series CC, 5.25% due 1/01/2018 7,989
AAA Aaa 1,000 Triborough Bridge and Tunnel Authority, General Purpose Revenue Bonds,
Series O, 7.70% due 1/01/2019 (b) 1,177
A+ Aaa 2,000 Triborough Bridge and Tunnel Authority, General Purpose Revenue Bonds,
Series R, 7.375% due 1/01/2016 (b) 2,361
A+ Aaa 3,000 Triborough Bridge and Tunnel Authority, General Purpose Revenue Bonds,
Series S, 7% due 1/01/2021(b) 3,525
</TABLE>
<PAGE>
<TABLE>
The Municipal Fund Accumulation Program, Inc.
Schedule of Investments as of December 31, 1993 (continued) (in Thousands)
<CAPTION>
S&P Moody's Face Value
Rating Rating Amount Issue (Note 1a)
<S> <S> <C> <S> <C>
New York (concluded)
A+ Aa $ 5,100 Triborough Bridge and Tunnel Authority, General Purpose Revenue Bonds, Series X,
6.625% due 1/01/2012 $ 6,009
A+ Aa 2,000 Triborough Bridge and Tunnel Authority, General Purpose Revenue
Bonds, Series X, 6.50% due 1/01/2019 2,177
A+ Aa 2,500 Triborough Bridge and Tunnel Authority, General Purpose Revenue
Bonds, Series Y, 6% due 1/01/2012 2,763
A+ Aa 5,000 Triborough Bridge and Tunnel Authority, General Purpose Revenue
Refunding Bonds, Series A, 5% due 1/01/2012 4,895
A- A1 3,125 Triborough Bridge and Tunnel Authority, Special Obligation Refunding
Bonds, Series 1991-B, 6.875% due 1/01/2015 3,574
New York & New Jersey--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 2,019
AA- A1 1,825 Port Authority of New York and New Jersey, Consolidated Revenue
Bonds, 78th Series A, 6.50% due 4/15/2011 2,022
AA- A1 4,000 Port Authority of New York and New Jersey, Consolidated Revenue
Bonds, 83rd Series, 6.375% due 10/15/2017 4,419
AA- A1 2,000 Port Authority of New York and New Jersey, Consolidated Revenue
Refunding Bonds, 87th Series, 5.25% due 7/15/2018 1,984
AA- A1 2,000 Port Authority of New York and New Jersey, Consolidated Revenue
Refunding Bonds, 87th Series, 5.25% due 7/15/2021 1,980
North Carolina--2.6%
AA Aa 2,000 Charlotte-Mecklenburg, North Carolina Hospital Authority, Healthcare
System Revenue Bonds, 6.25% due 1/01/2020 2,144
A- A 1,000 North Carolina Eastern Municipal Power Agency, Power System Revenue
Bonds, Series 1989-A, 6.50% due 1/01/2024 1,037
A- A 670 North Carolina Eastern Municipal Power Agency, Power System Revenue
Refunding Bonds, Series 1991-A, 6.50% due 1/01/2018 759
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) 1,581
AAA Aaa 1,500 North Carolina Municipal Power Agency No. 1, Catawba Electric Revenue
Bonds, 6% due 1/01/2011 (c) 1,648
A A 6,975 North Carolina Municipal Power Agency No. 1, Catawba Electric Revenue
Bonds, Series 1992, 6.25% due 1/01/2017 7,444
AAA Aaa 2,000 North Carolina Municipal Power Agency No. 1, Catawba Electric Revenue
Bonds, Series 1992, 5.75% due 1/01/2020 (c) 2,045
Ohio--4.1%
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) 2,027
AAA Aaa 8,650 Hamilton (City of), Ohio, Electric System Mortgage Revenue Refunding
Bonds, Series 1992-A, 6% due 10/15/2023 (d) 9,326
AAA Aaa 3,000 Hamilton (City of), Ohio, Electric System Revenue Bonds, Series 1988B,
8% due 10/15/2022 (b)(d) 3,575
AAA Aaa 2,000 Ohio Building Authority, State Correctional Facilities, Revenue Refunding
Bonds, Series 1985-B, 9.75% due 9/01/2012 (b) 2,213
AAA Aaa 500 Ohio Building Authority, State Facilities Revenue Bonds (Columbus State
Office Building), Series 1985-A, 9.625% due 10/01/2005 (b) 569
AAA Aaa 2,150 Ohio Water Development Authority, Pure Water Revenue Refunding and
Improvement Bonds, 6% due 12/01/2008 (e) 2,368
AAA NR 550 Ohio Water Development Authority, Revenue Refunding and Improvement
Bonds, Series R, 8% due 12/01/2018 625
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) 2,461
</TABLE>
<TABLE>
The Municipal Fund Accumulation Program, Inc.
Schedule of Investments as of December 31, 1993 (continued) (in Thousands)
<CAPTION>
S&P Moody's Face Value
Rating Rating Amount Issue (Note 1a)
<S> <S> <C> <S> <C>
Ohio (concluded)
AAA Aaa $ 175 Ohio Water Development Authority, Water Development Revenue
Refunding and Improvement Bonds, Series 1985, 9.375% due 12/01/2018 (e) $ 194
AAA Aaa 525 Ohio Water Development Authority, Water Development Revenue Refunding and
Improvement Bonds, Series 1985, 9.375% due 12/01/2018 (b)(e) 586
AAA Aaa 2,000 Toledo, Ohio, Sewer System Mortgage Revenue Refunding Bonds,
Series 1988-B, 7.75% due 11/15/2017 (c) 2,329
Oklahoma--0.6%
AAA Aaa 1,305 Oklahoma Municipal Power Authority, Power Supply System Revenue Bonds, Series 1990-A,
6.25% due 1/01/2023 (c) 1,418
A+ A1 710 Oklahoma Turnpike Authority, First Senior Revenue Bonds, Series 1989, 6% due 1/01/2022 739
A+ NR 1,290 Oklahoma Turnpike Authority, First Senior Revenue Bonds, Series 1989, 6% due 1/01/2022 (a) 1,503
Pennsylvania--1.0%
AA- A1 2,000 Commonwealth of Pennsylvania, General Obligation Bonds, 3rd
Series 1991-A, 6.50% due 11/15/2011 2,187
AAA Aaa 2,000 Pennsylvania Turnpike Commission, Turnpike Revenue Bonds, Series
1989-K, 7.625% due 12/01/2009 (b) 2,402
AAA Aaa 2,000 Pennsylvania Turnpike Commission, Turnpike Revenue Refunding Bonds,
Series 1992-P, 6% due 12/01/2017 (e) 2,123
<PAGE>
Puerto Rico--1.4%
AAA NR 2,000 Commonwealth of Puerto Rico, Public Improvement Bonds of 1990
(General Obligation Bonds), 7.70% due 7/01/2020 (b) 2,434
AAA NR 2,000 Puerto Rico Highway and Transportation Authority, Highway Revenue
Bonds, Series S, 6.625% due 7/01/2018 (b) 2,345
A NR 1,000 Puerto Rico Highway and Transportation Authority, Highway Revenue
Bonds, Series T, 6.625% due 7/01/2018 1,104
AA NR 1,495 Puerto Rico Housing Finance Corporation, Multi-Family Mortgage
Revenue Bonds, Portfolio A, Series I, 7.50% due 4/01/2022 1,606
AAA Aaa 1,125 Puerto Rico Housing Finance Corporation, Single-Family Mortgage
Revenue Bonds, Series C, 6.85% due 10/15/2023 1,218
South Carolina--4.9%
AAA Aaa 2,000 North Charleston, South Carolina, Sewer District Revenue
Refunding Bonds, Series 1992-A, 6% due 7/01/2018 (c) 2,095
AAA Aaa 2,600 Piedmont Municipal Power Agency, South Carolina, Electric Revenue
Bonds, Series 1984, 11% due 1/01/2025 (b) 2,898
AAA Aaa 1,675 Piedmont Municipal Power Agency, South Carolina, Electric Revenue
Refunding Bonds, Series 1991, 6.25% due 1/01/2018 (d) 1,778
AAA Aaa 3,000 Piedmont Municipal Power Agency, South Carolina, Electric Revenue
Refunding Bonds, Series 1991, 6.75% due 1/01/2019 (d) 3,622
AAA Aaa 1,000 Piedmont Municipal Power Agency, South Carolina, Electric Revenue
Refunding Bonds, Series 1991, 6.25% due 1/01/2021 (d) 1,145
AAA Aaa 1,000 Piedmont Municipal Power Agency, South Carolina, Electric Revenue
Refunding Bonds, Series 1991-A, 6.50% due 1/01/2014 (d) 1,169
AAA Aaa 1,000 South Carolina Public Service Authority Electric System Expansion Revenue Bonds (Santee
Cooper), Series 1991-D, 6.50% due 7/01/2024 (b)(e) 1,154
A+ UR* 4,200 South Carolina Public Service Authority, Electric System Expansion Revenue Bonds (Santee
Cooper), Series 1991-D, 6.625% due 7/01/2031 (b) 4,908
AAA Aaa 12,500 South Carolina Public Service Authority, Electric System Expansion Revenue Refunding
Bonds (Santee Cooper), Series 1993-A, 5.50% due 7/01/2021 (c) 12,551
Tennessee--0.3%
AAA Aaa 1,000 Metropolitan Nashville Airport Authority, Tennessee Airport Improvement
Revenue Refunding Bonds, Series 1991-C, 6.60% due 7/01/2015 (d) 1,110
A+ A1 875 Tennessee Housing Development Agency, Homeownership Program
Revenue Bonds, Series 1987-E, 8.50% due 7/01/2016 917
</TABLE>
<PAGE>
<TABLE>
The Municipal Fund Accumulation Program, Inc.
Schedule of Investments as of December 31, 1993 (continued) (in Thousands)
<CAPTION>
S&P Moody's Face Value
Rating Rating Amount Issue (Note 1a)
<S> <S> <C> <S> <C>
Texas--7.5%
AAA Aaa $ 2,000 Austin (City of), Texas, Combined Utility Systems Revenue Bonds, Series
1989-X, 6.25% due 11/15/2019 (c) $ 2,157
AAA Aaa 4,000 Austin (City of), Texas, Combined Utility Systems Revenue Refunding
Bonds, Series 1985-A, 10.25% due 11/15/2012 (b) 4,593
A A 2,000 Austin (City of), Texas, Combined Utility Systems Revenue Refunding
Bonds, Series 1986, 6% due 5/15/2015 2,030
AAA Aaa 2,000 Austin (City of), Texas, Combined Utility Systems Revenue Refunding
Bonds, Series 1991, 6.50% due 5/15/2011 (e) 2,202
AAA Aaa 2,000 Austin (City of), Texas, Combined Utility Systems Revenue Refunding
Bonds, Series 1993-B, 5.25% due 5/15/2018 (c) 1,970
AAA Aaa 600 Austin (City of), Texas, Water, Sewer and Electric Revenue Refunding
Bonds, Series 1982, 14.25% due 11/15/2006 (b) 796
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 1,094
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 1,077
AAA Aaa 2,000 Colorado River Municipal Water District, Water Transmission Facilities
Project, Texas, Series 1991-A, 6.625% due 1/01/2021 (b)(e) 2,262
AAA Aaa 1,000 Dallas County, Texas, General Obligation Bonds, 6.50% due 8/15/2008 (g) 1,095
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) 1,488
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) 1,092
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 1,128
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 1,088
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) 4,950
AAA Aaa 5,000 Lower Colorado River Authority of Texas, Junior Lien Revenue Refunding
Bonds, Series 1992, 6% due 1/01/2017 (e) 5,226
AAA Aaa 250 Lower Colorado River Authority of Texas, Priority Revenue Refunding
Bonds, Series 1991-A, 6% due 1/01/2015 (e) 260
AAA Aaa 2,000 Lower Colorado River Authority of Texas, Priority Revenue Refunding
Bonds, Series 1991-B, 6% due 1/01/2015 (e) 2,081
AAA Aaa 3,000 San Antonio (City of), Texas, Water System Revenue Refunding Bonds,
6.50% due 5/15/2010 (c) 3,329
AAA Aaa 2,000 San Antonio (City of), Texas, Water System Revenue Refunding Bonds,
Series 1992, 6% due 5/15/2016 (c) 2,100
AA Aa 1,000 State of Texas, Veterans Land General Obligation Refunding Bonds, 6.50% due 12/01/2021 1,086
AAA Aaa 2,000 Texas Municipal Power Agency Revenue Bonds, Series 1982, 14.625% due 9/01/2012 (b) 2,646
AAA Aa 2,000 Texas Water Development Board, State Revolving Fund, Senior Lien
Revenue Bonds, Series 1992, 6% due 7/15/2013 2,118
</TABLE>
<PAGE>
<TABLE>
The Municipal Fund Accumulation Program, Inc.
Schedule of Investments as of December 31, 1993 (concluded) (in Thousands)
<CAPTION>
S&P Moody's Face Value
Rating Rating Amount Issue (Note 1a)
<S> <S> <C> <S> <C>
Utah--2.2%
AA Aa $ 5,500 Intermountain Power Agency, Utah, Power Supply Revenue Refunding
Bonds, Series 1985-G, 9.375% due 7/01/2018 $ 6,067
AA Aa 1,000 Intermountain Power Agency, Utah, Power Supply Revenue Refunding
Bonds, Series 1987-D, 8.625% due 7/01/2021 1,154
AA Aa 5,000 Intermountain Power Agency, Utah, Power Supply Revenue Refunding
Bonds, Series 1993-A, 5.50% due 7/01/2020 4,972
AA Aa 2,000 Intermountain Power Agency, Utah, Power Supply Revenue Refunding
Bonds, Series A, 5% due 7/01/2023 1,880
Virginia--1.3%
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 1,473
AAA Aaa 2,750 Commonwealth Transportation Board, Commonwealth of Virginia, Transportation Contract
Revenue Bonds, Series 1988, 7.80% due 3/01/2016 (b) 3,198
AA+ Aa 2,000 Virginia Housing Development Authority, Commonwealth Mortgage Bonds, Series 1988-B1 Issue,
7.80% due 7/01/2017 2,177
AA Aa 1,360 Virginia Public School Authority, School Financing Revenue Bonds (1987
Resolution), Series 1992-B, 5.75% due 1/01/2013 1,420
Washington--1.1%
AA Aa 2,000 Washington (State of), General Obligation Bonds, Series A, 6% due 3/01/2016 (g) 2,067
AA Aa 2,500 Washington (State of), General Obligation Bonds (Various Purpose), Series 1993-B,
5.50% due 5/01/2018 2,537
AA Aa 2,000 Washington (State of), General Obligation Refunding Bonds, Series R-92A,
6.25% due 9/01/2009 2,143
Wisconsin--2.1%
A+ Aa 895 Wisconsin Housing and Economic Development Authority, Home
Ownership Revenue Bonds, Series 1987-A, 8.375% due 9/01/2017 895
AA Aa 1,000 Wisconsin Housing and Economic Development Authority, Home
Ownership Revenue Bonds, Series 1992-1, 6.75% due 9/01/2015 1,075
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) 2,396
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) 4,431
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) 2,443
AA Aaa 2,000 Wisconsin (State of), General Obligation Bonds, Series 1992-A, 6.30%
due 5/01/2012 (b) 2,271
Total Investments (Cost--$558,496)--97.4% 622,927
Other Assets Less Liabilities--2.6% 16,661
--------
Net Assets--100.0% $639,588
========
<PAGE>
<FN>
(a) Escrowed to maturity.
(b) Prerefunded issues.
(c) MBIA Insured.
(d) FGIC Insured.
(e) AMBAC Insured.
(f) FHA Insured.
(g) Unlimited Tax.
*Under Review.
Ratings of issues shown have not been audited by Deloitte & Touche.
See Notes to Financial Statements.
</TABLE>
<TABLE>
The Municipal Fund Accumulation Program, Inc.
Statement of Assets and Liabilities As of December 31, 1993
<CAPTION>
<S> <C> <C>
Assets:
Investments, at value (identified cost--$558,496,175) (Note 1a) $622,926,635
Cash 3,936,848
Interest receivable 14,099,780
Prepaid registration fees and other assets (Note 1d) 7,895
------------
Total assets 640,971,158
------------
Liabilities:
Payables:
Capital shares redeemed $ 473,624
Investment adviser (Note 2) 266,520
Distributions to shareholders (Note 1e) 237,836 977,980
------------
Accrued expenses and other liabilities 404,873
------------
Total liabilities 1,382,853
------------
Net Assets $639,588,305
============
Net Assets Consist of:
Common Stock, $.01 par value, 50,000,000 shares authorized $ 323,144
Paid-in capital in excess of par 573,402,861
Undistributed investment income--net 1,431,840
Unrealized appreciation on investments--net 64,430,460
------------
Net Assets:
Equivalent to $19.79 net asset value per share based on
32,314,413 shares outstanding $639,588,305
============
</TABLE>
<PAGE>
<TABLE>
The Municipal Fund Accumulation Program, Inc.
Statement of Operations
<CAPTION>
For the Year Ended December 31, 1993
<S> <C> <C>
Investment Income (Note 1c):
Interest and amortization of premium and discount earned $ 37,815,497
Expenses:
Investment advisory fees (Note 2) $ 2,960,370
Transfer agent fees 1,751,073
Printing and shareholder reports 122,446
Registration fees (Note 1d) 60,839
Accounting services (Note 2) 57,282
Custodian fees 51,823
Professional fees 51,490
Pricing services 34,808
Directors' fees and expenses 12,339
Other 8,794
------------
Total expenses 5,111,264
------------
Investment income--net 32,704,233
------------
Realized & Unrealized Gain on Investments--Net (Notes 1c & 3):
Realized gain on investments--net 8,819,734
Change in unrealized appreciation on investments--net 24,407,096
------------
Net Increase in Net Assets Resulting from Operations $ 65,931,063
============
See Notes to Financial Statements.
</TABLE>
<TABLE>
The Municipal Fund Accumulation Program, Inc.
Statements of Changes in Net Assets
<CAPTION>
For the Year Ended Dec. 31,
Increase (Decrease) in Net Assets: 1993 1992
<S> <C> <C>
Operations:
Investment income--net $ 32,704,233 $ 29,046,094
Realized gain on investments--net 8,819,734 4,505,955
Change in unrealized appreciation on investments--net 24,407,096 3,426,467
------------ ------------
Net increase in net assets resulting from operations 65,931,063 36,978,516
------------ ------------
Dividends & Distributions to Shareholders (Note 1e):
Investment income--net (32,611,400) (28,816,631)
Realized gain on investments--net (8,089,293) --
------------ ------------
Net decrease in net assets resulting from dividends and distributions to shareholders (40,700,693) (28,816,631)
------------ ------------
Capital Share Transactions (Note 4):
Net increase in net assets derived from capital share transactions 77,405,763 93,565,849
------------ ------------
Net Assets:
Total increase in net assets 102,636,133 101,727,734
Beginning of year 536,952,172 435,224,438
------------ ------------
End of year* $639,588,305 $536,952,172
============ ============
<FN>
*Undistributed investment income--net $ 1,431,840 $ 1,339,007
============ ============
</TABLE>
<TABLE>
The Municipal Fund Accumulation Program, Inc.
Financial Highlights
<CAPTION>
For the Year Ended December 31,
1993 1992 1991 1990 1989
The following per share data and ratios have been derived
from information provided in the financial statements.
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of year $ 18.93 $ 18.63 $ 17.83 $ 18.09 $ 17.76
-------- -------- -------- -------- --------
Investment income--net 1.09 1.15 1.23 1.30 1.31
Realized and unrealized gain (loss) on investments--net 1.11 .30 .80 (.26) .33
-------- -------- -------- -------- --------
Total from investment operations 2.20 1.45 2.03 1.04 1.64
-------- -------- -------- -------- --------
Less dividends and distributions:
Investment income--net (1.09) (1.15) (1.23) (1.30) (1.31)
Realized gain on investments--net (.25) -- -- -- --
-------- -------- -------- -------- --------
Total dividends and distributions (1.34) (1.15) (1.23) (1.30) (1.31)
-------- -------- -------- -------- --------
Net asset value, end of year $ 19.79 $ 18.93 $ 18.63 $ 17.83 $ 18.09
======== ======== ======== ======== ========
Total Investment Return:
Based on net asset value per share 11.99% 8.08% 11.83% 6.03% 9.61%
======== ======== ======== ======== ========
Ratios to Average Net Assets:
Expenses .86% .88% .91% .97% 1.04%
======== ======== ======== ======== ========
Investment income--net 5.52% 6.15% 6.76% 7.23% 7.25%
======== ======== ======== ======== ========
Supplemental Data:
Net assets, end of year (in thousands) $639,588 $536,952 $435,224 $359,291 $319,641
======== ======== ======== ======== ========
Portfolio turnover 23% 24% 36% 20% 41%
======== ======== ======== ======== ========
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 investment management 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 sales 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.
<PAGE>
2. Investment Advisory Agreement and Transactions with
Affiliates:
The Program has entered into an Investment Advisory Agreement
with Fund Asset Management, Inc. ("FAMI"), a wholly-owned
subsidiary of Merrill Lynch Investment Management, Inc. ("MLIM"),
which is an indirect, wholly-owned subsidiary of Merrill Lynch &
Co., Inc., whereby FAMI provides investment management and
certain other services to the Program. For its services, the
Program pays a monthly fee equal to 0.50%, on an annual basis, of
the value of the Program's average daily net assets. The
Investment Advisory Agreement obligates FAMI to reimburse the
Program to the extent that the Program's expenses (including
advisory fees, but 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% in excess of $30
million but not exceeding $100 million of average daily net
assets, and 1.5% of the average daily net assets in excess of
$100 million. 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 and any required reimbursements will be made promptly at
the end of such fiscal year.
Effective January 1, 1994, the investment advisory business of
FAMI reorganized from a corporation to a limited partnership.The
general partner of FAMI is Princeton Services, Inc., an indirect
wholly-owned subsidiary of Merrill Lynch & Co.
FAMI has entered into an Administrative Agreement with Merrill
Lynch, Pierce, Fenner & Smith Inc. ("MLPF&S"), Prudential
Securities, Inc., Dean Witter Reynolds, Inc. and Shearson Lehman
Brothers, Inc. (the "Administrators"), whereby the Administrators
perform certain administrative duties on behalf of FAMI.
The Administrators receive a monthly fee from FAMI equal to
0.20%, on an annual basis, of the Program's average daily net
assets and have agreed to reimburse FAMI for a portion of the
reimbursement of expenses to the Program, as described above,
required to be made by FAMI.
Accounting services are provided to the Program by FAMI at cost.
Certain officers and/or directors of the Program are officers
and/or directors of FAMI, MLIM, MLPF&S, and/or Merrill Lynch &
Co., Inc.
Notes to Financial Statements (concluded)
3. Investments:
Purchases and sales of investments, excluding shortterm
securities, for the year ended December 31, 1993 were
$196,466,137 and $132,906,322, respectively.
<PAGE>
Net realized and unrealized gains as of December 31, 1993 were as
follows:
Realized Unrealized
Gains Gains
Long-term investments $ 8,819,734 $64,430,460
----------- -----------
Total $ 8,819,734 $64,430,460
=========== ===========
As of December 31, 1993, net unrealized appreciation for Federal
income tax purposes aggregated $64,430,460, of which $64,578,524
related to appreciated securities and $148,064 related to
depreciated securities. The aggregate cost of investments at
December 31, 1993 for Federal income tax purposes was
$558,496,175.
4. Capital Share Transactions:
Transactions in capital shares were as follows:
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
=========== ============
For the Year Ended Dollar
December 31, 1992 Shares Amount
Shares sold 11,315,402 $211,365,455
Shares issued to shareholders
in reinvestment of dividends 1,496,530 27,883,080
----------- ------------
Total issued 12,811,932 239,248,535
Shares redeemed (7,799,800) (145,682,686)
----------- ------------
Net increase 5,012,132 $ 93,565,849
=========== ============
5. Capital Loss Carryforward:
Expired capital loss carryforward in the amount of $13,751,527
has been reclassified to paid-in capital in excess of par.
<PAGE>
<AUDIT-REPORT>
Independent Auditors' Report
The Board of Directors and Shareholders, The Municipal Fund
Accumulation Program, Inc.:
We have audited the accompanying statement of assets and
liabilities, including the schedule of investments, of The
Municipal Fund Accumulation Program, Inc. as of December 31,
1993, the related statements of operations for the year then
ended and changes in net assets for each of the years in the
two-year period then ended, and financial highlights for each
of the years in the five-year period then ended. These financial
statements and the financial highlights are the responsibility
of the Program's management. Our responsibility is to express
an opinion on these financial statements and the financial
highlights based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements and the financial highlights are free
of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements. Our procedures included confirmation of
securities owned at December 31, 1993 by correspondence with the
custodian. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements and financial highlights
present fairly, in all material respects, the financial position
of The Municipal Fund Accumulation Program, Inc. as of December 31,
1993, the results of its operations, the changes in its net assets,
and the financial highlights for the respective stated periods in
conformity with generally accepted accounting principles.
Deloitte & Touche
Princeton, New Jersey
February 4, 1994
</AUDIT-REPORT>
APPENDIX GRAPHIC AND IMAGE MATERIAL. ITEM 1.
Total Return Based on a $10,000 Investment
A line graph depicting the growth of an investment in the Program
compared to growth of an investment in the Lehman Brothers General
Municipal Bond Index. Beginning and ending values are:
12/83 12/93
The Municipal Fund Accumulation
Program, Inc.*++ $10,000 $25,963
Lehman Brothers General
Municipal Bond Index++++ $10,000 $28,830
<PAGE>
[FN]
*Assuming maximum transaction costs and other operating expenses,
including advisory fees.
++The Municipal Fund Investment Accumulation Program, Inc.
invests in long- and intermediate-term state, municipal and
public authority bonds (including private activity bonds),
the interest on which is exempt from Federal income tax.
++++This unmanaged Index consists of revenue bonds, general
obligation bonds and insured bonds.
Past performance is not predictive of future performance.
