MERRILL LYNCH
MUNICIPAL BOND
FUND, INC.
FUND LOGO
Semi-Annual Report
December 31, 1994
This report is not authorized for use as an offer of sale
or a solicitation of an offer to buy shares of the Fund
unless accompanied or preceded by the Fund'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.
Merrill Lynch
Municipal Bond
Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
<PAGE>
MERRILL LYNCH MUNICIPAL BOND FUND, INC.
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
Kenneth A. Jacob, Vice President
Gerald M. Richard, Treasurer
Mark B. Goldfus, Secretary
Custodian
The Bank of New York
90 Washington Street, 12th Floor
New York, New York 10286
Transfer Agent
Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, Florida 32246-6484
(800) 637-3863
TO OUR SHAREHOLDERS
Volatility in the US financial markets
continued during the December quarter,
largely prompted by concerns of increas-
ing inflationary pressures. The possi-
bility of continued monetary policy
tightening by the Federal Reserve Board
was predominant in the minds of
investors throughout most of the period.
Therefore, there was little surprise in
mid-November when the central bank
announced the sixth increase in short-
term interest rates in 1994. Early in the
period, the weakness of the US dollar in
foreign exchange markets prompted
declines in US stock and bond prices,
but some strengthening of the US
currency has occurred recently.
<PAGE>
The manufacturing sector was the
driving force behind the US economy
through the final quarter of the year,
making an important contribution to
the substantial increase in corporate
earnings. US companies have been
successful at containing labor costs,
which are an important component of
the inflation outlook. Although con-
sumer spending grew at a slower pace
than in previous economic recoveries,
purchases of vehicles and household
durable goods rose in the latter months
of 1994. Despite the relatively modest
rise in consumer spending, the personal
savings rate fell to an all-time annual
low in 1994.
In the weeks ahead, investors will
continue to assess economic data and
inflationary trends in order to gauge
whether further increases in short-term
interest rates are likely. The core
inflation rate rose less than 3% in 1994
following a 3% increase in 1993, the
best sustained inflation performance in
30 years. It is not likely that such
positive inflation results will be dupli-
cated in 1995. In addition, investor
interest in the new year will also be
focused on the progress that the new
Congress makes on both reducing spend-
ing and the Federal budget deficit and
passing tax cuts that promote savings
and investment. Legislative progress,
combined with continued indications
of moderate and sustainable levels of
economic growth, would be positive
for the US capital markets. However,
the lagged effects of higher interest
rates could slow the economy sharply
and with it, the growth of corporate
profits.
<PAGE>
The Municipal Market
During the three months ended
December 31, 1994, the tax-exempt bond
market continued to deteriorate amid
signs of a strong domestic economy and
a restrictive Federal Reserve Board. By
the end of the December quarter,
municipal revenue bond yields had
increased over 25 basis points (0.25%)
to 6.97%. Interest rate volatility
remained significant, with yields fluc-
tuating by as much as 10 basis points--15
basis points weekly. Long-term US
Treasury bonds also remained very
volatile during the December quarter.
By mid-November, US Treasury yields
had risen over 35 basis points to 8.15%
before declining to end the quarter
at 7.875%.
Tax-exempt bonds remained very attrac-
tive throughout the quarter. Over the
last three months, long-term municipal
bonds yielded as much as 90% of
comparable US Treasury bonds. Yield
ratios in excess of 85% are considered
historically attractive to long-term inves-
tors. Additionally, with taxable equiva-
lent yields in excess of 10% for taxpayers
in the 39% tax bracket throughout the
quarter, municipal bonds continued to
represent considerable value relative
to other investment alternatives.
<PAGE>
The municipal bond market's technical
position remained very positive through-
out the December quarter. Approxi-
mately $36 billion in long-term
municipal securities were issued during
the three months ended December 31,
1994. This represents a decline of over
48% versus the December 1993 quarter.
Similarly, $164 billion in long-term
tax-exempt bonds were issued during
1994, a 44% decline from 1993 annual
issuance levels. Also, estimates of net
cash available for reinvestment in early
1995, based on maturities, coupon
income, and advanced refunded matur-
ities, were in excess of $25 billion.
However, this combination of reduced
supply and sizable future demand has
not generated lower interest rates as
would normally be expected. Once
current uncertainties regarding the
strength and volatility of the current
economic expansion are resolved, and,
more importantly, when no further
interest rate increases by the Federal
Reserve Board can be expected, the
municipal bond market appears poised
to respond to its present favorable
position and recoup some of the
price deterioration suffered over the
last quarters.
Portfolio Strategy
The December quarter provided a period
of extreme price volatility in the fixed-
income markets because of the uncer-
tainty of contrasting economic signals
and a vacillating foreign exchange
picture for the US dollar. Merrill Lynch
Municipal Bond Fund, Inc.'s Insured and
National Portfolios each maintained
cash reserve positions between 7% and
10% of net assets during most of the
quarter. These reserve positions give
each Portfolio the ability to purchase
income-oriented long-term bonds when
they are attractively offered. As the
quarter was coming to its end, the
Portfolios selectively purchased secur-
ities as yields approached 6.75%--7.00%.
These securities should provide an
attractive level of tax-exempt income in
the months and years ahead.
<PAGE>
The Limited Maturity Portfolio contin-
ued to be defensively positioned during
the December quarter as the Federal
Reserve Board continued its restrictive
monetary policy by again raising short-
term interest rates in November 1994.
Both the Federal Funds rate and the
discount rate were increased 75 basis
points. As a result of this rising interest
rate environment and continued strong
economic data, we maintained the
average portfolio maturity at approxi-
mately 14 months, and the cash reserve
position at approximately 20% of net
assets throughout most of the quarter.
This strategy helped cushion the impact
on the Portfolio's net asset values
during this rapidly rising interest rate
environment.
In Conclusion
We appreciate your ongoing interest in
Merrill Lynch Municipal Bond Fund,
Inc., and we look forward to serving
your investment needs and objectives
in months and years to come.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Vincent R. Giordano)
Vincent R. Giordano
Senior Vice President and
Portfolio Manager
(Kenneth A. Jacob)
Kenneth A. Jacob
Vice President and
Portfolio Manager
February 9, 1995
<PAGE>
PERFORMANCE DATA
About Fund
Performance
Since October 21, 1994, investors have been able to purchase shares
of the Fund through the Merrill Lynch Select Pricing SM System,
which offers four pricing alternatives:
*Class A Shares incur a maximum initial sales charge (front-end
load) of 4% and bear no ongoing distribution or account mainte-
nance fees for Insured and National Portfolios. Limited Maturity
Portfolio incurs a maximum initial sales charge (front-end load) of
1% and bears no ongoing distribution or account maintenance fees.
*Class B Shares are subject to a maximum contingent deferred
sales charge of 4% if redeemed during the first year, decreasing 1%
each year thereafter to 0% after the fourth year for Insured and
National Portfolios. Limited Maturity Portfolio is subject to a maxi-
mum contingent deferred sales charge of 1% if redeemed within
one year of purchase. In addition, Insured and National Portfolios
are subject to a distribution fee of 0.50% and an account maintenance
fee of 0.25%. Limited Maturity Portfolio is subject to a distribution
fee of 0.20% and an account maintenance fee of 0.15%. All three
classes of shares automatically convert to Class D Shares after
10 years.
*Class C Shares are subject to a distribution fee of 0.55% and an
account maintenance fee of 0.25% for Insured and National Port-
folios. Limited Maturity Portfolio is subject to a distribution fee of
0.20% and an account maintenance fee of 0.15%. In addition, Class C
Shares are subject to a 1% contingent deferred sales charge if re-
deemed within one year of purchase.
*Class D Shares incur a maximum initial sales charge of 4% and
an account maintenance fee of 0.25% (but no distribution fee) for
Insured and National Portfolios. Limited Maturity Portfolio incurs
a maximum initial sales charge of 1% and an account maintenance
fee of 0.10% (but no distribution fee).
Performance data for the Fund's Class A Shares and Class B Shares
are presented in the "Performance Summary" and "Average Annual
Total Return" tables on pages 4, 5, 7 and 8. "Aggregate Total Return"
tables for Class C and D Shares are presented on page 5. Data for
all of the Fund's shares, including Class C and Class D Shares, are
presented in the "Recent Performance Results" table.
<PAGE>
The "Recent Performance Results" table on pages 6 and 7 shows
investment results before the deduction of any sales charges for
Class A and Class B Shares for the 12-month and 3-month periods
ended December 31, 1994 and for Class C and Class D Shares for
the period since inception through December 31, 1994. All data in
this table assume imposition of the actual total expenses incurred
by each class of shares during the relevant period.
None of the past results shown should be considered a representa-
tion 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. Dividends paid to each
class of shares will vary because of the different levels of account
maintenance, distribution and transfer agency fees applicable to
each class, which are deducted from the income available to be
paid to shareholders.
Average Annual
Total Return
Insured Portfolio
% Return Without % Return With
Class A Shares* Sales Charge Sales Charge**
Year Ended 12/31/94 -6.76% -10.49%
Five Years Ended 12/31/94 +6.61 + 5.74
Ten Years Ended 12/31/94 +8.99 + 8.54
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
% Return % Return
Class B Shares* Without CDSC With CDSC**
Year Ended 12/31/94 -7.36% -10.81%
Five Years Ended 12/31/94 +5.81 + 5.81
Inception (10/21/88) through 12/31/94 +6.26 + 6.26
[FN]
*Maximum contingent deferred sales charge is 4% and is reduced to 0%
after 4 years.
**Assuming payments of applicable contingent deferred sales charge.
<PAGE>
National Portfolio
% Return Without % Return With
Class A Shares* Sales Charge Sales Charge**
Year Ended 12/31/94 -6.55% -10.29%
Five Years Ended 12/31/94 +6.52 + 5.65
Ten Years Ended 12/31/94 +9.12 + 8.68
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
% Return % Return
Class B Shares* Without CDSC With CDSC**
Year Ended 12/31/94 -7.27% -10.70%
Five Years Ended 12/31/94 +5.70 + 5.70
Inception (10/21/88) through 12/31/94 +6.11 + 6.11
[FN]
*Maximum contingent deferred sales charge is 4% and is reduced to 0%
after 4 years.
**Assuming payment of applicable contingent deferred sales charge.
Limited Maturity Portfolio
% Return Without % Return With
Class A Shares* Sales Charge Sales Charge**
Year Ended 12/31/94 +1.35% +0.34%
Five Years Ended 12/31/94 +4.93 +4.72
Ten Years Ended 12/31/94 +5.48 +5.37
[FN]
*Maximum sales charge is 1%.
**Assuming maximum sales charge.
% Return % Return
Class B Shares* Without CDSC With CDSC**
Year Ended 12/31/94 +1.03% +0.05%
Inception (11/02/92) through 12/31/94 +2.78 +2.78
<PAGE>
[FN]
*Maximum contingent deferred sales charge is 1% and is reduced to 0%
after one year.
**Assuming payment of applicable contingent deferred sales charge.
Aggregate
Total Return
Insured Portfolio
% Return % Return
Class C Shares* Without CDSC With CDSC**
Inception (10/21/94) through 12/31/94 -0.41% -1.38%
[FN]
*Maximum contingent deferred sales charge is 1% and is reduced to 0%
after one year.
**Assuming payment of applicable contingent deferred sales charge.
% Return Without % Return With
Class D Shares* Sales Charge Sales Charge**
Inception (10/21/94) through 12/31/94 -0.30% -4.29%
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
National Portfolio
% Return % Return
Class C Shares* Without CDSC With CDSC**
Inception (10/21/94) through 12/31/94 -1.39% -2.35%
[FN]
*Maximum contingent deferred sales charge is 1% and is reduced to 0%
after one year.
**Assuming payment of applicable contingent deferred sales charge.
% Return Without % Return With
Class D Shares* Sales Charge Sales Charge**
Inception (10/21/94) through 12/31/94 -1.29% -5.24%
<PAGE>
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
Limited Maturity Portfolio
% Return % Return
Class C Shares* Without CDSC With CDSC**
Inception (10/21/94) through 12/31/94 +0.11% -0.88%
[FN]
*Maximum contingent deferred sales charge is 1% and is reduced to 0%
after one year.
**Assuming payment of applicable contingent deferred sales charge.
% Return Without % Return With
Class D Shares* Sales Charge Sales Charge**
Inception (10/21/94) through 12/31/94 +0.13% -0.87%
[FN]
*Maximum sales charge is 1%.
**Assuming maximum sales charge.
PERFORMANCE DATA (continued)
<TABLE>
Recent
Performance
Results*
<CAPTION>
<PAGE> 12 Month 3 Month Standardized
12/31/94 9/30/94++ 12/31/93 % Change % Change++ 30-day Yield
<S> <C> <C> <C> <C> <C> <C>
Insured Portfolio Class A Shares $7.43 $7.78 $ 8.60 -11.97%(1) -2.69%(1) 5.94%
Insured Portfolio Class B Shares 7.43 7.77 8.59 -11.86(1) -2.56(1) 5.42
Insured Portfolio Class C Shares 7.43 7.68 -- -- -1.42(1) 5.39
Insured Portfolio Class D Shares 7.43 7.68 -- -- -1.42(1) 5.28
National Portfolio Class A Shares 9.40 9.96 10.91 -11.93(2) -3.53(2) 6.43
National Portfolio Class B Shares 9.39 9.95 10.90 -11.94(2) -3.53(2) 5.92
National Portfolio Class C Shares 9.40 9.85 -- -- -2.45(2) 5.88
National Portfolio Class D Shares 9.40 9.85 -- -- -2.45(2) 6.18
Limited Maturity Portfolio Class A Shares 9.77 9.85 10.01 - 2.40 -0.81 3.92
Limited Maturity Portfolio Class B Shares 9.77 9.85 10.01 - 2.40 -0.81 3.60
Limited Maturity Portfolio Class C Shares 9.77 9.83 -- -- -0.61 3.80
Limited Maturity Portfolio Class D Shares 9.77 9.83 -- -- -0.61 3.83
Insured Portfolio Class A Shares--Total Return - 6.76(3) -1.24(4)
Insured Portfolio Class B Shares--Total Return - 7.36(5) -1.31(6)
Insured Portfolio Class C Shares--Total Return -- -0.41(7)
Insured Portfolio Class D Shares--Total Return -- -0.30(8)
National Portfolio Class A Shares--Total Return - 6.55(9) -1.99(10)
National Portfolio Class B Shares--Total Return - 7.27(11) -2.20(12)
National Portfolio Class C Shares--Total Return -- -1.39(13)
National Portfolio Class D Shares--Total Return -- -1.29(14)
Limited Maturity Portfolio Class A Shares--Total Return + 1.35(15) +0.12(16)
Limited Maturity Portfolio Class B Shares--Total Return + 1.03(17) +0.03(18)
Limited Maturity Portfolio Class C Shares--Total Return -- +0.11(19)
Limited Maturity Portfolio Class D Shares--Total Return -- +0.13(20)
<PAGE>
<FN>
*Investment results shown do not reflect any sales charges; results shown would be lower
if a sales charge was included.
++Investment results shown for Class C and Class D Shares are since inception (10/21/94).
(1)Percent change includes reinvestment of $0.141 per share capital gains distributions.
(2)Percent change includes reinvestment of $0.209 per share capital gains distributions.
(3)Percent change includes reinvestment of $0.454 per share ordinary income dividends and
$0.141 per share capital gains distributions.
(4)Percent change includes reinvestment of $0.121 per share ordinary income dividends and
$0.141 per share capital gains distributions.
(5)Percent change includes reinvestment of $0.394 per share ordinary income dividends and
$0.141 per share capital gains distributions.
(6)Percent change includes reinvestment of $0.105 per share ordinary income dividends and
$0.141 per share capital gains distributions.
(7)Percent change includes reinvestment of $0.076 per share ordinary income dividends and
$0.141 per share capital gains distributions.
(8)Percent change includes reinvestment of $0.084 per share ordinary income dividends and
$0.141 per share capital gains distributions.
(9)Percent change includes reinvestment of $0.599 per share ordinary income dividends and
$0.209 per share capital gains distributions.
(10)Percent change includes reinvestment of $0.161 per share ordinary income dividends and
$0.209 per share capital gains distributions.
(11)Percent change includes reinvestment of $0.522 per share ordinary income dividends and
$0.209 per share capital
gains distributions.
(12)Percent change includes reinvestment of $0.142 per share ordinary income dividends and
$0.209 per share capital gains distributions.
(13)Percent change includes reinvestment of $0.103 per share ordinary income dividends and
$0.209 per share capital gains distributions.
(14)Percent change includes reinvestment of $0.113 per share ordinary income dividends and
$0.209 per share capital gains distributions.
(15)Percent change includes reinvestment of $0.373 per share ordinary income dividends.
(16)Percent change includes reinvestment of $0.102 per share ordinary income dividends.
(17)Percent change includes reinvestment of $0.341 per share ordinary income dividends.
(18)Percent change includes reinvestment of $0.093 per share ordinary income dividends.
(19)Percent change includes reinvestment of $0.071 per share ordinary income dividends.
(20)Percent change includes reinvestment of $0.072 per share ordinary income dividends.
</TABLE>
<PAGE>
<TABLE>
Performance
Summary--
Class A Shares
<CAPTION>
1/1--12/31 Beginning/Ending Net Asset Value Dividends Paid* % Change**
Period Limited Limited Limited
Covered Insured National Maturity Insured National Maturity Insured National Maturity
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
10/77--12/77 $9.80/9.80 -- -- $ 0.09 -- -- + 0.94% -- --
1978 9.80/8.97 -- -- 0.48 -- -- - 3.69 -- --
1979++ 8.97/8.39 $ 9.60/ 9.60 $ 9.90/ 9.88 0.53 $ 0.11 $0.10 - 0.75 + 1.17% +0.86%
1980 8.39/6.86 9.60/ 8.54 9.88/ 9.74 0.60 0.79 0.64 - 11.44 - 3.00 +5.13
1981 6.86/5.66 8.54/ 7.34 9.74/ 9.78 0.65 0.90 0.77 - 8.51 - 3.82 +8.64
1982 5.66/6.81 7.34/ 8.71 9.78/ 9.89 0.67 0.93 0.80 + 33.96 +33.16 +9.67
1983 6.81/6.97 8.71/ 9.01 9.89/ 9.76 0.65 0.89 0.67 + 12.41 +14.04 +5.57
1984 6.97/6.88 9.01/ 8.96 9.76/ 9.74 0.66 0.90 0.67 + 8.49 +10.00 +6.91
1985 6.88/7.53 8.96/ 9.86 9.74/ 9.75 0.64 0.88 0.63 + 19.56 +20.76 +6.71
1986 7.53/8.18 9.86/10.67 9.75/ 9.90 0.61(1) 1.01(1) 0.56 + 17.24 +19.08 +7.47
1987 8.18/7.56 10.67/ 9.76 9.90/ 9.68 0.68(2) 0.86(2) 0.53(2) + 0.86 - 0.40 +3.18
1988 7.56/7.79 9.76/10.11 9.68/ 9.68 0.57 0.76 0.56 + 10.92 +11.71 +5.90
1989 7.79/7.94 10.11/10.25 9.68/ 9.74 0.57 0.75 0.59 + 9.49 + 9.11 +6.93
1990 7.94/7.86 10.25/10.09 9.74/ 9.72 0.61(3) 0.73 0.60 + 7.07 + 5.85 +6.11
1991 7.86/8.18 10.09/10.49 9.72/ 9.88 0.60(4) 0.82(4) 0.54 + 12.07 +12.58 +7.39
1992 8.18/8.27 10.49/10.55 9.88/ 9.97 0.63(5) 0.89(5) 0.45 + 9.06 + 9.37 +5.62
1993 8.27/8.60 10.55/10.91 9.97/10.01 0.71(6) 0.94(6) 0.38 + 12.85 +12.59 +4.30
1994 8.60/7.43 10.91/ 9.40 10.01/ 9.77 0.60(7) 0.81(7) 0.37 - 6.76 - 6.55 +1.35
------ ------ -----
Total $10.55 $12.97 $8.86
Cumulative total return as of 12/31/94: +201.31%** +277.44%** +143.10%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures assume reinvestment of all dividends and capital gains
distributions at net asset value on the payable date, and do not include
sales charges; results would be lower if sales charge was
included.
++For National and Limited Maturity Portfolios, period covered is from
11/30/79 to 12/31/79.
(1)Includes capital gains of $0.011 and $0.178 for the Insured and National
Portfolios, respectively.
(2)Includes capital gains of $0.098, $0.073 and $0.012 for the Insured,
National and Limited Maturity Portfolios, respectively.
(3)Includes capital gains of $0.064 for the Insured Portfolio.
(4)Includes capital gains of $0.058 and $0.060 for the Insured and National
Portfolios, respectively.
(5)Includes capital gains of $0.084 and $0.130 for the Insured and National
Portfolios, respectively.
(6)Includes capital gains of $0.181 and $0.157 for the Insured and National
Portfolios, respectively.
(7)Includes capital gains of $0.141 and $0.209 for the Insured and National
Portfolios, respectively.
</TABLE>
<PAGE>
PERFORMANCE DATA (concluded)
<TABLE>
Performance
Summary--
Class B Shares
<CAPTION>
1/1--12/31 Beginning/Ending Net Asset Value Dividends Paid* % Change**
Period Limited Limited Limited
Covered Insured National Maturity*** Insured National Maturity*** Insured National Maturity***
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
10/21/88--12/31/88 $7.81/7.78 $10.14/10.11 -- $ 0.11 $ 0.14 -- + 0.97% + 1.08% --
1989 7.78/7.94 10.11/10.25 -- 0.51 0.67 -- + 8.81 + 8.29 --
1990 7.94/7.86 10.25/10.09 -- 0.55(1) 0.66 -- + 6.28 + 5.05 --
1991 7.86/8.17 10.09/10.49 -- 0.54(2) 0.75(2) -- +11.10 +11.74 --
1992 8.17/8.27 10.49/10.55 $ 9.93/ 9.97 0.56(3) 0.81(3) $0.06 + 8.36 + 8.54 +1.05%
1993 8.27/8.59 10.55/10.90 9.97/10.01 0.64(4) 0.85(4) 0.35 +11.88 +11.65 +3.93
1994 8.59/7.43 10.90/ 9.39 10.01/ 9.77 0.53(5) 0.73(5) 0.34 - 7.36 - 7.27 +1.03
------ ------ -----
Total $ 3.44 $ 4.61 $0.75
Cumulative total return as of 12/31/94: +45.71%** +44.40%** +6.10%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures assume reinvestment of all dividends and capital gains
distributions at net asset value on the payable date, and do not include
sales charges; results would be lower if sales charge
was deducted.
***Commenced operations on 11/02/92.
(1)Includes capital gains of $0.064 for the Insured Portfolios.
(2)Includes capital gains of $0.058 and $0.060 for the Insured and National
Portfolios, respectively.
(3)Includes capital gains of $0.084 and $0.130 for the Insured and National
Portfolios, respectively.
(4)Includes capital gains of $0.181 and $0.157 for the Insured and National
Portfolios, respectively.
(5)Includes capital gains of $0.141 and $0.209 for the Insured and National
Portfolios, respectively.
</TABLE>
<PAGE>
Portfolio
Abbreviations
To simplify the listings of
Merrill Lynch Municipal
Bond Fund, Inc.'s portfolio
holdings in the Schedule
of Investments, we have
abbreviated the names
of many of the securities
according to the list
at right.
AMT Alternative Minimum Tax (subject to)
BAN Bond Anticipation Notes
COP Certificates of Participation
DATES Daily Adjustable Tax-Exempt Securities
EDA Economic Development Authority
GO General Obligation Bonds
HDA Housing Development Authority
HFA Housing Finance Agency
IDA Industrial Development Authority
IDR Industrial Development Revenue Bonds
PCR Pollution Control Revenue Bonds
RAN Revenue Anticipation Notes
RAW Revenue Anticipation Warrants
RIB Residual Interest Bonds
SAVRS Select Auction Variable Rate Securities
S/F Single-Family
TAN Tax Anticipation Notes
TRAN Tax Revenue Anticipation Notes
UPDATES Unit Priced Demand Adjustable
Tax-Exempt Securities
UT Unlimited Tax
VRDN Variable Rate Demand Notes
<TABLE>
SCHEDULE OF INVESTMENTS (in Thousands)
<CAPTION>
Municipal Bonds Insured Portfolio
S&P Moody's Face Value
STATE Ratings Ratings Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
Alabama--0.9% AAA Aaa $ 1,625 Alabama Water Pollution Control Authority, Revolving Fund Loan,
Series A, 6.75% due 8/15/2017(b) $ 1,642
Auburn University, Alabama, Revenue Refunding Bonds(e):
AAA Aaa 5,925 (Athletic Project), 5.25% due 4/01/2010 5,150
AAA Aaa 5,000 (General Fee), 5.25% due 6/01/2013 4,248
AAA Aaa 1,250 Mobile, Alabama, GO, Refunding and Capital Improvement Bonds,
10.875% due 11/01/2007(c) 1,663
AAA Aaa 7,465 Montgomery, Alabama, Baptist Medical Center, Special Care
Facilities Financing Authority Revenue Bonds, Series A,
5.75% due 1/01/2022(h) 6,477
<PAGE>
Alaska--0.7% Kenai Peninsula Borough, Alaska, GO(b):
AAA Aaa 6,450 8.40% due 1/01/2000 7,166
AAA Aaa 8,460 8.40% due 1/01/2001 9,525
Arizona--2.2% AAA Aaa 4,000 Arizona State Municipal Financing Program, COP, Series 34,
7.25% due 8/01/2009(g) 4,351
AAA Aaa 3,800 Maricopa County, Arizona, IDA, Health Facilities Revenue Bonds
(Saint Joseph's Care Center Project), Series A, 7.75%
due 7/01/2020(e) 4,065
Maricopa County, Arizona, IDA, Hospital Facilities Revenue Bonds
(Samaritan Health Services Hospital):
AAA Aaa 4,000 Refunding, Series A, 7% due 12/01/2013(e) 4,129
A1+ VMIG1 1,200 VRDN, Series B2, 4.10% due 12/01/2008(f) 1,200
AAA Aaa 7,000 Maricopa County, Arizona, Unified School District No. 97
Revenue Bonds (Deer Valley Project), 1986 Series E, 10%
due 7/01/2000 (h) 8,368
Mesa, Arizona, IDA, Health Care Facilities Revenue Bonds
(Western Health Network)(g):
AAA Aaa 10,000 Refunding, Series A-2, 7.625% due 1/01/2013 10,538
AAA Aaa 7,340 Series A-1, 7.625% due 1/01/2019 7,715
Phoenix, Arizona, Street and Highway User, Revenue Refunding Bonds,
Junior-Lien, Series A(h)(j)(k):
AAA Aaa 5,000 5.63% due 7/01/2012 1,578
AAA Aaa 5,000 5.63% due 7/01/2013 1,472
AAA Aaa 7,000 Tucson, Arizona, Refunding Bonds, 4.90% due 7/01/2013(h) 5,723
AAA Aaa 5,250 University of Arizona Medical Center Corporation, Hospital
Revenue Refunding Bonds, 5% due 7/01/2021(e) 4,112
California--7.6% AAA Aaa 5,000 Anaheim, California, Public Financing Authority Revenue Bonds,
2nd Series--Electric Utility, San Juan 4, 5.75% due 10/01/2022(h) 4,277
AAA Aaa 6,000 Anaheim, California, Public Financing Authority, Revenue Refunding
Bonds (Electric Utility Projects), 5.625% due 10/01/2022(e) 4,995
AAA Aaa 65,000 California State, RAW, Series C, 5.71% due 4/25/1996(h) 65,116
AAA Aaa 5,000 Contra Costa, California, Water District Water Revenue Refunding
Bonds, Series F, 5% due 10/01/2020(h) 3,872
AAA Aaa 12,000 Fresno, California, Sewer Revenue Bonds, Series A-1,
6.25% due 9/01/2014(b) 11,616
AAA Aaa 3,935 Los Angeles, California, Mortgage Revenue Refunding Bonds,
Series A, 6.30% due 1/01/2025(e) 3,601
AAA Aaa 2,415 Los Angeles, California, Regional Airports Improvement Corporation,
Lease Revenue Bonds (Los Angeles International Airport), AMT,
6.50% due 1/01/2012(h) 2,359
Los Angeles, California, Wastewater System Revenue Refunding Bonds(e):
AAA Aaa 5,000 Series A, 5.70% due 6/01/2001 4,451
AAA Aaa 12,825 Series A, 5.70% due 6/01/2020 11,129
AAA Aaa 5,000 Series C, 5.60% due 6/01/2015 4,362
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<CAPTION>
Municipal Bonds Insured Portfolio
S&P Moody's Face Value
STATE Ratings Ratings Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
California AAA Aaa $ 6,000 Los Angeles County, California, Transportation Commission,
(concluded) Sales Tax Revenue Bonds, Series A, 6.75% due 7/01/2001(a)(h) $ 6,401
AAA Aaa 17,600 Northern California Power Agency, Multiple Capital Facilities
Revenue Bonds, 5% due 8/01/2025(e) 17,206
AAA Aaa 12,500 San Diego, California, Sewer Revenue Bonds, Series A,
5.25% due 5/15/2020(b) 10,133
University of California, Revenue Bonds (Multiple Purpose Projects):
AAA Aaa 4,650 Refunding, Series C, 5% due 9/01/2012(b) 3,817
AAA Aaa 12,075 Refunding, Series C, 5.25% due 9/01/2016(b) 9,932
AAA Aaa 16,000 Refunding, Series C, 5% due 9/01/2023(b) 12,287
AAA Aaa 5,000 Series D, 6.375% due 9/01/2024(e) 4,779
Delaware--0.5% AAA Aaa 6,000 Delaware EDA, PCR, Refunding (Delmarva Power and Light Company),
Series B, 7.30% due 3/01/2014(e) 6,219
AAA Aaa 3,750 Delaware State Health Facilities Authority, Crossover Revenue
Refunding Bonds (Delaware Medical Center), 7% due 10/01/2015(e) 3,808
District of District of Columbia, Hospital Revenue Refunding Bonds
Columbia--0.7% (National Rehabilitation Hospital--Medlantic), Series A(e):
AAA Aaa 7,000 7.10% due 11/01/2011 7,162
AAA Aaa 9,250 7.125% due 11/01/2019 9,371
Florida--6.6% AAA Aaa 2,735 Altamonte Springs, Florida, Health Facilities Authority,
Hospital Revenue Bonds (Adventist Health/Sunbelt), Series A,
7% due 11/15/2014(b) 2,810
Florida Municipal Power Agency Revenue Bonds:
AAA Aaa 14,150 (All Requirements Power Supply Project), 5.10% due 10/01/2025(b) 11,215
AAA Aaa 4,500 Refunding (Saint Lucie Project), 5.25% due 10/01/2021(h) 3,693
AAA Aaa 5,000 Florida State Division, Board of Finance, Department of General
Services Revenue Bonds (Department of Natural Resource
Preservation), Series 2000-A, 6.75% due 7/01/2013(b) 5,094
Florida Turnpike Authority, Turnpike Revenue Bonds, Series A:
AAA Aaa 2,935 9.50% due 7/01/2001(b) 3,527
AAA Aaa 4,500 Refunding, 5% due 7/01/2015(h) 3,675
Jacksonville, Florida, Health Facilities Authority, Hospital
Revenue Refunding and Improvement Bonds
<PAGE> (Baptist Medical Center Project):
AAA Aaa 500 11.50% due 10/01/2012(c) 749
AAA Aaa 26,500 Series A, 7.30% due 6/01/2019(e) 27,497
AAA Aaa 8,750 Jacksonville, Florida, Port Authority Revenue Bonds, AMT,
7.875% due 11/01/2018(g) 9,182
AAA Aaa 20,000 Lee County, Florida, Hospital Board of Directors, Hospital
Revenue Bonds, 5% due 4/01/2020(e) 19,803
AAA Aaa 16,700 Martin County, Florida, PCR, Refunding (Florida Power and Light
Company Project), 7.30% due 7/01/2020(e) 17,463
AAA Aaa 11,585 Orange County, Florida, Health Facilities Authority, Revenue
Refunding Bonds (Pooled Hospital Loan), Series B,
7.875% due 12/01/2025(g) 12,164
AAA Aaa 3,950 Orange County, Florida, HFA, Mortgage Revenue Refunding Bonds,
Series A, 7.60% due 1/01/2024(h) 4,149
Palm Beach County, Florida, Criminal Justice Facilities,
Revenue Refunding Bonds(h):
AAA Aaa 5,000 5.375% due 6/01/2008 4,518
AAA Aaa 11,985 5.375% due 6/01/2009 10,766
AAA Aaa 4,935 5.375% due 6/01/2010 4,368
AAA Aaa 4,430 5.375% due 6/01/2011 3,899
AAA Aaa 3,500 Saint Lucie County, Florida, Sales Tax Revenue Refunding Bonds,
5% due 10/01/2023(h) 2,745
AAA Aaa 5,700 South Broward, Florida, Hospital District Revenue Bonds, SAVRS,
6.469% due 5/01/2021(b)(d) 5,658
AAA Aaa 5,000 Tampa, Florida, Revenue Bonds (Allegany Health System--Saint
Joseph's), 5.125% due 12/01/2023(e) 3,999
AAA Aaa 2,000 Tampa, Florida, Water and Sewer System Revenue Bonds, Sub-Lien,
Series A, 7.25% due 10/01/2016(b) 2,102
AAA Aaa 2,240 West Coast Regional Water Supply Authority, Florida, Capital
Improvement Revenue Bonds (Hillsborough County Project),
10.40% due 10/01/2010(a)(b) 3,049
Georgia--4.3% AAA Aaa 5,500 Chatham County, Georgia, School District, UT, 6.75%
due 8/01/2019(e) 5,541
AAA Aaa 5,000 Douglasville-Douglas County, Georgia, Water and Sewer Authority,
Water and Sewer Revenue Refunding Bonds, 5.625% due 6/01/2015(b) 4,437
Georgia Municipal Electric Authority, Power Revenue Bonds:
AAA Aaa 12,100 Refunding, Series Z, 5.50% due 1/01/2012(h) 10,724
AAA Aaa 20,000 Series EE, 7% due 1/01/2025(b) 20,825
Metropolitan Atlanta Rapid Transit Authority, Georgia, Sales
Tax Revenue Refunding Bonds(b):
AAA Aaa 3,990 Series A, 5.125% due 7/01/2019 3,214
AAA Aaa 10,500 Series A, 5.125% due 7/01/2020 8,426
AAA Aaa 18,605 Series P, 6% due 7/01/2013 17,536
AAA Aaa 28,165 Series P, 6.25% due 7/01/2020 26,790
AAA Aaa 9,000 Municipal Electric Authority, Georgia, Special Obligation Bonds
(Fifth Crossover Series, Project One), 6.40% due 1/01/2013(b) 8,915
<PAGE>
Hawaii--2.9% Hawaii County, Hawaii, Revenue Refunding and Improvement Bonds,
GO, UT, Series A(h):
AAA Aaa 1,000 5.60% due 5/01/2012 898
AAA Aaa 1,000 5.60% due 5/01/2013 895
Hawaii Department of Budget and Finance, Special Purpose Mortgage
Revenue Bonds (Hawaiian Electric Company, Inc.), AMT(e):
AAA Aaa 4,340 7.625% due 12/01/2018 4,539
AAA Aaa 5,000 Series C, 7.375% due 12/01/2020 5,167
AAA Aaa 4,500 Hawaii Harbor Capital Improvement Revenue Bonds, AMT,
7% due 7/01/2017(e) 4,544
Hawaii State Airport System Revenue Bonds:
AAA Aaa 21,795 AMT, 7.30% due 7/01/2020(b) 22,299
AAA Aaa 23,200 AMT, Second Series, 7.50% due 7/01/2020(h) 24,114
AAA Aaa 10,000 Refunding, Series 1993, 6.45% due 7/01/2013(e) 9,841
Illinois--5.7% AAA Aaa 25,000 Chicago, Illinois, Public Building Commission Revenue Bonds
(Community College District No. 508), Series B, 8.75%
due 1/01/2007(c)(g) 26,489
AAA Aaa 25,000 Chicago, Illinois, Public Building Commission Revenue Bonds,
Series A, 7.125% due 1/01/2015(c)(e) 26,417
AAA Aaa 27,000 Cook County, Illinois, GO, UT, Series A, 6.60% due 11/15/2022(e) 26,392
AAA Aaa 11,000 Evergreen Park, Illinois, Hospital Facility Revenue Refunding Bonds
(Little Company of Mary Hospital), 7.75% due 2/15/2009(e) 11,602
Illinois Health Facilities Authority Revenue Bonds:
AAA Aaa 3,250 (Elmhurst Memorial Hospital), 6.625% due 1/01/2022(h) 3,164
AAA Aaa 4,000 (Methodist Health Project), SAVRS, 4% due 5/01/2021(b)(d) 3,995
AAA Aaa 5,500 (Northern Illinois Medical Center), 7.875% due 9/01/2014(b) 5,754
AAA Aaa 20,000 (Rush-Presbyterian Saint Luke's Medical Center),
5% due 10/01/2024(e) 19,721
Metropolitan Pier and Exposition Authority, Illinois, Dedicated
State Tax Revenue Bonds, Series A(j):
AAA Aaa 7,000 5.65% due 6/15/2010(h)(k) 2,509
AAA Aaa 5,000 5.70% due 6/15/2011(h)(k) 1,674
AAA Aaa 6,600 6.50% due 6/15/2027(b) 6,333
AAA Aaa 3,025 Northwest Suburban Municipal Joint Action Water Agency, Illinois,
Water Supply System Revenue Refunding Bonds, Series A,
5.90% due 5/01/2015(e) 2,736
Indiana--1.2% AAA Aaa 6,725 Goshen-Chandler, Indiana, School Building Corporation, First
Mortgage Revenue Refunding Bonds, UT, 5.75% due 1/15/2010(e) 6,119
AAA Aaa 2,470 Indiana Employment Development Commission, Environmental
Revenue Bonds (Public Service Company of Indiana), AMT,
7.50% due 3/15/2015(e) 2,560
AAA Aaa 5,000 Indianapolis, Indiana, Gas Utility Revenue Bonds, Series A,
5.875% due 6/01/2024(b) 4,397
AAA Aaa 4,040 Indianapolis, Indiana, Local Public Improvement Bond Bank,
Series A, 7.90% due 2/01/2002(a)(g) 4,524
AAA Aaa 2,000 Jasper County, Indiana, PCR, Refunding (Collateral--Northern
Indiana Public Service), 7.10% due 7/01/2017(e) 2,038
AAA Aaa 3,830 Purdue University, Indiana, University Revenue Bonds (Purdue
University Dormitory System), Series B, 6% due 7/01/2001(a)(b) 3,945
AAA Aaa 3,550 Rockport, Indiana, PCR, Refunding (Indiana-Michigan Power),
Series B, 7.60% due 3/01/2016(h) 3,755
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<CAPTION>
Municipal Bonds Insured Portfolio
S&P Moody's Face Value
STATE Ratings Ratings Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
Iowa--0.4% AAA Aaa $ 5,000 Des Moines, Iowa, Parking Facilities Revenue Bonds, Series A,
7.25% due 7/01/2015(h) $ 5,130
Iowa Finance Authority, Hospital Facilities Revenue Refunding
Bonds (Allen Memorial Hospital), Series A(b):
AAA Aaa 3,500 5.50% due 2/15/2013 3,073
AAA Aaa 2,100 5.60% due 2/15/2020 1,792
Kansas--0.4% AAA Aaa 11,175 Kansas City, Kansas, Utility System Revenue Refunding and
Improvement Bonds, 6.375% due 9/01/2023(h) 10,894
Kentucky--0.7% AAA Aaa 4,500 Boone County, Kentucky, PCR, Refunding (Collateral--Cincinnati
Gas and Electric), Series A, 5.50% due 1/01/2024(e) 3,773
AAA Aaa 11,470 Kentucky Development Finance Authority, Hospital Revenue
Refunding and Improvement Bonds (Saint Elizabeth Medical Center),
Series A, 9% due 11/01/2000(h) 13,294
Louisiana--0.4% AAA Aaa 8,700 Louisiana Public Facilities Authority, Health and Education
Capital Facilities Revenue Bonds (Our Lady of the Lake Regional
Medical Center), Series C, 8.20% due 12/01/2015(g) 9,493
Maryland--1.2% AAA Aaa 23,500 Baltimore, Maryland, Revenue Refunding Bonds (Kidder Maryland
Water Projects), Series A, 5.65% due 7/01/2020(e) 20,350
Maryland Health and Higher Educational Facilities Authority
Revenue Bonds (University of Maryland Medical Systems)(h):
AAA Aaa 2,250 Series A, 7% due 7/01/2001(a) 2,436
AAA Aaa 4,400 Series B, 7% due 7/01/2022(c) 4,608
AAA Aaa 2,500 Maryland Health and Higher Educational Facilities Authority,
Revenue Refunding Bonds (Sinai Hospital Project),
5.25% due 7/01/2019(b) 2,046
<PAGE>
Massachusetts--3.2% AAA Aaa 3,175 Massachusetts Bay Transportation Authority, Massachusetts
General Transportation System Revenue Bonds, Series A,
7.10% due 3/01/1999(a)(g) 3,406
AAA Aaa 13,000 Massachusetts Bay Transportation Authority Revenue Bonds, COP,
Series A, 7.65% due 8/01/2015(i) 13,795
AAA Aaa 5,505 Massachusetts Educational Loan Authority Revenue Bonds, AMT,
Issue D, Series A, 7.25% due 1/01/2009(e) 5,676
AAA Aaa 3,250 Massachusetts Port Authority Revenue Bonds, 13% due 7/01/2013(c) 5,280
Massachusetts State Health and Educational Facilities Authority
Revenue Bonds:
A1+ VMIG1 900 (Capital Asset Program), VRDN, Series C, 5% due 7/01/2005(e)(f) 900
SP-1+ VMIG1 17,000 (Capital Asset Program), VRDN, Series D, 5% due 1/01/2035(e)(f) 17,000
AAA Aaa 6,200 (Saint Elizabeth Hospital), 5% due 8/15/2021(i) 6,146
AAA Aaa 19,755 Massachusetts State, HFA, Housing Revenue Refunding Bonds
(Insured Rental), AMT, Series A, 6.75% due 7/01/2028(b) 18,948
AAA Aaa 5,500 Massachusetts State Industrial Finance Agency Revenue Bonds
(Brandeis University), Series C, 6.80% due 10/01/2019(e) 5,532
AAA Aaa 4,500 Massachusetts State Turnpike Authority Turnpike Revenue Refunding
Bonds, Series A, 5.125% due 1/01/2023(h) 3,562
Michigan--4.6% AAA Aaa 10,500 Chippewa Valley, Michigan, Schools Revenue Refunding Bonds,
UT, Series Q, 5% due 5/01/2021(h) 8,261
AAA Aaa 10,000 Grand Rapids, Michigan, Water Supply Systems, Revenue Refunding
Bonds, 5.75% due 1/01/2018(h) 8,904
A-1 VMIG1 5,000 Michigan Higher Education Student Loan Authority, Revenue Bonds,
VRDN, AMT, Series XII-D, 5% due 10/01/2015(b)(f) 5,000
Michigan State Trunk Line, Series A(h):
AAA Aaa 14,365 5.75% due 11/15/2020 12,665
AAA Aaa 26,120 5.80% due 11/15/2024 23,038
Monroe County, Michigan, PCR (Detroit Edison Company Project), AMT:
AAA Aaa 16,500 Project 1, 7.65% due 9/01/2020(h) 17,305
AAA Aaa 13,255 Series CC, 7.50% due 12/01/2019(b) 13,765
AAA Aaa 9,745 Series I-B, 7.50% due 9/01/2019(b) 10,102
AAA Aaa 15,000 Western Michigan University Revenue Refunding Bonds, Series A,
6.50% due 7/15/2001(a)(b) 15,846
Mississippi--0.6% AAA Aaa 1,320 Harrison County, Mississippi, Wastewater Management District,
Revenue Refunding Bonds, Wastewater Treatment Facilities,
Series A, 8.50% due 2/01/2013(h) 1,575
AAA Aaa 13,000 Mississippi Hospital Equipment and Facilities Authority,
Revenue Refunding and Improvement Bonds (North Mississippi
Health Services), 5.75% due 5/15/2016(b) 11,459
Montana--0.2% AAA Aaa 5,600 Montana Health Facilities Authority, Hospital Facilities
Revenue Bonds (Deaconess Medical Center Project), SAVRS,
Series A, 5% due 2/15/2016(b)(d) 5,600
<PAGE>
Nevada--2.3% AAA Aaa 6,500 Clark County, Nevada, Airport Improvement Revenue Bonds, AMT,
8.125% due 7/01/2018(g) 6,886
Las Vegas, Nevada, Revenue Refunding Bonds (h):
AAA Aaa 1,500 6.50% due 10/01/2007 1,513
AAA Aaa 2,665 6.50% due 10/01/2008 2,691
AAA Aaa 45,000 Washoe County, Nevada, Water Facility Revenue Bonds
(Sierra Pacific Power), AMT, 6.65% due 6/01/2017(e) 44,226
New Jersey--3.8% AAA Aaa 3,350 Cape May County, New Jersey, Industrial Pollution Control
Financing Authority, Revenue Refunding Bonds (Atlantic City
Electric Company), Series A, 6.80% due 3/01/2021(e) 3,462
AAA Aaa 4,750 Jersey City, New Jersey, Sewer Authority Revenue Refunding Bonds,
6.25% due 1/01/2014(b) 4,626
AAA Aaa 20,000 New Jersey EDA, Natural Gas Facilities Revenue Refunding Bonds
(NUI Corp.), Series A, 6.35% due 10/01/2022(b) 19,291
AAA Aaa 11,525 New Jersey EDA, Revenue Bonds (Market Transition Facility),
Senior Lein, Series A, 5.80% due 7/01/2007(e) 11,157
AAA Aaa 5,000 New Jersey EDA, Water Facilities, Revenue Refunding Bonds
(Hackensack Water Company), Series A, 7% due 1/01/2019(b) 5,064
A-1 VMIG1 5,600 New Jersey Sports and Exposition Authority, State Contract
Revenue Bonds, VRDN, Series C, 5% due 9/01/2024(e)(f) 5,600
New Jersey State Housing and Mortgage Finance Agency Revenue Bonds
(Home Buyer), AMT(e):
AAA Aaa 7,065 Series B, 7.90% due 10/01/2022 7,331
AAA Aaa 12,845 Series D, 7.70% due 10/01/2029 13,181
AAA Aaa 23,890 Series M, 7% due 1/01/2026 24,095
New York--5.2% AAA Aaa 9,650 Metropolitan Transportation Authority, New York, Service Contract
Revenue Refunding Bonds (Transportation Facilities), Series L,
7.50% due 7/01/2017(b) 10,068
New York City, New York, GO, UT, Series I(b):
AAA Aaa 4,505 7.25% due 8/15/2013 4,726
AAA Aaa 2,645 7.25% due 8/15/2013 2,729
AAA Aaa 10,130 7.25% due 8/15/2016 10,423
AAA Aaa 6,010 New York City, New York, Health and Hospital Authority,
Local Government Revenue Refunding Bonds, Series A,
5.625% due 2/15/2013(b) 5,314
New York City, New York, Municipal Water Finance Authority,
Water and Sewer System Revenue Bonds:
AAA Aaa 50,000 5% due 6/15/2008(e) 43,943
AAA Aaa 1,090 Series A, 6.75% due 6/15/2014(h) 1,097
AAA Aaa 4,510 Series C, 6.20% due 6/15/2021(b) 4,248
AAA Aaa 11,000 Series F, 5.50% due 6/15/2023(e) 9,295
AAA Aaa 12,075 New York City, New York, Municipal Water Finance Authority,
Water and Sewer System Revenue Refunding Bonds, Series A,
5.75% due 6/15/2018(h) 10,701
New York State Medical Care Facilities Finance Agency Revenue Bonds
<PAGE> (Mental Health Services):
AAA Aaa 3,085 Series C, 7.375% due 8/15/2019(e) 3,203
AAA Aaa 11,500 Series D, 5.90% due 8/15/2022(b) 10,295
Niagara Falls, New York, Public Improvement Bonds, UT(e):
AAA Aaa 2,975 6.90% due 3/01/2023 2,991
AAA Aaa 3,190 6.90% due 3/01/2024 3,207
Suffolk County, New York, Water Authority, Waterworks Revenue
Refunding Bonds(b):
AAA Aaa 1,235 7.375% due 6/01/2012 1,291
AAA Aaa 7,345 Series C, 5.75% due 6/01/2013 6,743
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<CAPTION>
Municipal Bonds Insured Portfolio
S&P Moody's Face Value
STATE Ratings Ratings Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
Ohio--1.3% AAA Aaa $ 12,000 Clermont County, Ohio, Hospital Facilities Revenue Refunding Bonds
(Mercy Health Systems), Series A, 7.50% due 9/01/1999(a)(b) $ 13,104
AAA Aaa 12,000 Cleveland, Ohio, Public Power System Revenue Bonds (First
Mortgage), Series A, 7% due 11/15/2024(a) 12,310
AAA Aaa 6,700 Ohio Municipal Electric Generation Agency, Joint Ventures, COP,
5.375% due 2/15/2013(b) 5,839
AAA Aaa 3,500 Ohio State Air Quality Development Authority Revenue Refunding
Bonds (Cincinnati Gas and Electric), Series B, 5.45%
due 1/01/2024(e) 2,924
Oklahoma--1.4% AAA Aaa 7,500 Oklahoma Industrial Authority, Hospital Revenue Bonds (Baptist
Medical Center), Series A, 7% due 8/15/2014(b) 7,592
AAA Aaa 5,000 Tulsa, Oklahoma, Airports Improvement Trust, General Revenue Bonds,
7.50% due 6/01/2008(e) 5,242
AAA Aaa 21,560 Tulsa, Oklahoma, Industrial Authority Hospital Revenue Bonds
(Saint John's Medical Center, Inc.), 7.25% due 12/01/2009(e) 22,448
Oregon--0.2% AAA Aaa 4,000 Port Portland, Oregon, Portland International Airport, Airport
Revenue Bonds, AMT, Series 7-B, 7.10% due 7/01/2021(e) 4,079
<PAGE>
Pennsylvania--8.1% AAA Aaa 1,750 Allegheny County, Pennsylvania, Hospital Development Authority
Revenue Bonds (Mercy Hospital of Pittsburgh), 6.75%
due 4/01/2021(b) 1,741
AAA Aaa 6,900 Beaver County, Pennsylvania, Hospital Authority Revenue Bonds
(Medical Center of Beaver, Pennsylvania Incorporated), Series A,
6.25% due 7/01/2022(b) 6,447
AAA Aaa 3,365 Beaver County, Pennsylvania, IDA, PCR, Refunding (Ohio Edison
Company/Mansfield), Series A, 7% due 6/01/2021(h) 3,427
AAA Aaa 3,610 Berks County, Pennsylvania, Municipal Authority Hospital Revenue
Bonds (Reading Hospital Medical Center Project),
5.70% due 10/01/2014(e) 3,217
AAA Aaa 3,400 Monroeville, Pennsylvania, Hospital Authority, Hospital Revenue
Bonds (Forbes Health System), Series B, 7.35% due 10/01/2015(g) 3,492
AAA Aaa 3,000 Montgomery County, Pennsylvania, Higher Education and Health
Authority, Hospital Revenue Bonds (Abington Memorial Hospital),
5.125% due 6/01/2014(b) 2,463
Pennsylvania Higher Educational Assistance Agency,
Student Loan Revenue Bonds:
AAA Aaa 20,000 5% due 9/03/2026(b) 19,642
AAA Aaa 10,000 AMT, 3.52% due 9/03/2026(b) 9,821
AAA Aaa 16,000 AMT, 5% due 3/01/2020(e) 16,484
AAA Aaa 34,000 AMT, 6.172% due 3/01/2022(b) 30,625
Pennsylvania State Higher Educational Facilities Authority,
College and University Revenue Bonds:
AAA Aaa 1,500 (Bryn Mawr College), 6.50% due 12/01/2009(h) 1,502
AAA Aaa 4,250 (Temple University), First Series, 6.50% due 4/01/2021(e) 4,181
AAA Aaa 10,390 Pennsylvania Turnpike Commission, Turnpike Revenue Bonds, Series L,
6.25% due 6/01/2011(b) 10,160
Philadelphia, Pennsylvania, Airport Revenue Bonds, AMT(e):
AAA Aaa 8,150 7.75% due 6/15/2015 8,539
AAA Aaa 24,000 7.375% due 6/15/2018 24,510
AAA Aaa 5,000 Philadelphia, Pennsylvania, Gas Works Revenue Bonds,
12th Series B, 7% due 5/15/2020(c)(e) 5,282
AAA Aaa 5,750 Philadelphia, Pennsylvania, Parking Authority,
Airport Parking Revenue Bonds, 7.375% due 9/01/2018(b) 5,943
AAA Aaa 26,800 Philadelphia, Pennsylvania, Water and Wastewater Revenue Bonds,
5% due 6/15/2004(h) 24,684
Pittsburgh, Pennsylvania, Revenue Refunding Bonds, UT, Series A(b):
AAA Aaa 1,200 5.10% due 9/01/2005 1,091
AAA Aaa 1,000 5.20% due 9/01/2006 913
AAA Aaa 1,000 5.40% due 9/01/2008 902
Pittsburgh, Pennsylvania, Water and Sewer Authority, Water and
Sewer System Revenue Refunding Bonds, Series A(h):
AAA Aaa 5,000 6.50% due 9/01/2001(a) 5,285
AAA Aaa 9,000 4.75% due 9/01/2016 6,881
AAA Aaa 7,500 University Area Joint Authority, Pennsylvania, Sewer Revenue
Refunding Bonds, 4.75% due 11/01/2020(e) 5,618
<PAGE>
Rhode Island--3.4% Providence, Rhode Island, GO, UT(e):
AAA Aaa 1,540 6.75% due 1/15/2008 1,591
AAA Aaa 1,540 6.75% due 1/15/2009 1,585
AAA Aaa 1,540 6.75% due 1/15/2010 1,580
Rhode Island Depositors Economic Protection Corporation,
Special Obligation Bonds, Series A(i):
AAA Aaa 6,100 6.625% due 8/01/2002(a) 6,492
AAA Aaa 35,000 5.75% due 8/01/2019 30,357
AAA Aaa 16,520 5.50% due 8/01/2020 13,792
AAA Aaa 25,600 Rhode Island Health and Educational Building Corporation Revenue
Bonds (Rhode Island Hospital), 5% due 8/15/2021(h) 25,566
South Carolina--4.8% AAA Aaa 7,000 Charleston, South Carolina, Waterworks and Sewer Revenue
Refunding and Improvement Bonds, 6% due 1/01/2016(b) 6,452
AAA Aaa 5,000 Florence County, South Carolina, Hospital Revenue Bonds
(McLeod Regional Medical Center Project), 6.75% due 11/01/2020(h) 4,945
AAA Aaa 4,000 Georgetown County, South Carolina, Hospital Facilities Revenue
Refunding Bonds (Georgetown Memorial Hospital), Series B,
7.25% due 11/01/2017(b) 4,121
AAA Aaa 1,750 Greenville, South Carolina, Hospital System, Hospital Facilities
Revenue Bonds, Series A, 7.50% due 5/01/2016(h) 1,824
AAA Aaa 2,410 Myrtle Beach, South Carolina, Water and Sewer System Revenue Bonds,
5.25% due 3/01/2020(e) 1,955
AAA Aaa 3,500 Pickens and Richland Counties, South Carolina, Hospital Facilities
Revenue Bonds (Baptist Hospital), Series A, 7% due 8/01/2001(a)(b) 3,785
Piedmont Municipal Power Agency, South Carolina,
Electric Revenue Refunding Bonds:
AAA Aaa 9,150 6.25% due 1/01/2021(h) 8,657
AAA Aaa 7,000 6.30% due 1/01/2022(e) 6,562
AAA Aaa 20,750 Series A, 7.40% due 1/01/2018(b) 21,403
29,100 South Carolina Jobs, EDA, Hospital Facilities Revenue Bonds,
4% due 8/01/2021(b) 24,313
South Carolina State Public Service Authority, Revenue Bonds:
AAA Aaa 6,000 Refunding, Series A, 5.50% due 7/01/2011(e) 5,282
AAA Aaa 17,090 Refunding, Series A, 6.375% due 7/01/2021(b) 16,324
AAA Aaa 2,750 Refunding, Series C, 5% due 1/01/2014(b) 2,241
AAA Aaa 4,000 Series B, 6.10% due 7/01/2027(b) 3,654
Tennessee--0.2% AAA Aaa 1,905 Jackson, Tennessee, Water and Sewer System Revenue Bonds,
10.375% due 7/01/2012(b) 2,250
AAA Aaa 2,200 Knox County, Tennessee, Health, Educational and Housing Facilities
Board, Hospital Facilities Crossover Revenue Refunding Bonds
(Mercy Health Care System), Series A, 7.60% due 9/01/1999(a)(b) 2,411
<PAGE>
Texas--13.6% Austin, Texas, Utility System Revenue Bonds, Prior-Lien:
AAA Aaa 11,190 9.25% due 5/15/2004(a)(e) 13,776
AAA Aaa 14,825 Refunding, Series A, 6.20% due 11/15/2011(e) 4,892
Brazos River Authority, Texas, PCR
(Collateral--Texas Utilities Electric Company Project), AMT:
AAA Aaa 6,000 Refunding, 6.50% due 12/01/2027(b) 5,719
AAA Aaa 12,000 Series B, 6.625% due 6/01/2022(h) 11,652
Brazos River Authority, Texas, Revenue Refunding Bonds
(Collateral-Houston Light and Power Co.):
AAA Aaa 12,700 5.60% due 12/01/2017(e) 11,048
AAA Aaa 13,900 Series B, 7.20% due 12/01/2018(h) 14,240
AAA Aaa 20,000 Brownsville, Texas, Utility System Revenue Refunding Bonds,
6.25% due 9/01/2014(e) 19,275
A1+ VMIG1 1,300 Harris County, Texas, Health Facilities Development Corporation,
Special Facilities, Revenue Bonds (Texas Medical Center Project),
VRDN, 4% due 2/15/2022(e)(f) 1,300
AAA Aaa 5,000 Harris County, Texas, Hospital District Mortgage, Revenue
Refunding Bonds, 7.40% due 2/15/2010(b) 5,418
AAA Aaa 1,695 Harris County, Texas, Toll Road Revenue Bonds, Series A,
6.50% due 8/15/2011(h) 1,688
Harris County, Texas, Toll Road Senior Lien Revenue Bonds:
AAA Aaa 6,045 Refunding, 5.30% due 8/15/2013(b) 5,157
AAA Aaa 8,300 Refunding, 5.375% due 8/15/2020(h) 6,917
AAA Aaa 4,000 Refunding, 5.50% due 8/15/2021(h) 3,403
AAA Aaa 10,305 Refunding, Series A, 6.50% due 8/15/2002(a)(h) 10,903
AAA Aaa 15,250 Series A, 6.50% due 8/15/2002(a)(b) 16,135
AAA Aaa 2,750 Series A, 6.50% due 8/15/2017(b) 2,710
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in Thousands)
<CAPTION>
Municipal Bonds Insured Portfolio
S&P Moody's Face Value
STATE Ratings Ratings Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
Texas AAA Aaa $ 8,375 Houston, Texas, Water and Sewer System Revenue Bonds, Junior Lien,
(concluded) Series A, 6.375% due 12/01/2022(e) $ 8,063
Houston, Texas, Water and Sewer System, Revenue Refunding Bonds,
Junior Lien, Series C(b)(j):
AAA Aaa 12,700 5.70% due 12/01/2010(k) 4,470
AAA Aaa 45,960 5.70% due 12/01/2011(k) 15,123
AAA Aaa 53,850 5.78% due 12/01/2012(k) 16,534
AAA Aaa 18,400 5.75% due 12/01/2015 16,428
AAA Aaa 3,500 Houston, Texas, Water Conveyance System COP, Series J,
6.25% due 12/15/2013(b) 3,387
<PAGE> Lower Colorado River Authority, Texas, Revenue Refunding Bonds:
AAA Aaa 4,415 5.60% due 1/01/2009(c)(e)(j) 1,845
AAA Aaa 650 Series B, 7% due 1/01/2001(a)(b) 698
Matagorda County, Texas, Navigation District No. 1, PCR, AMT:
AAA Aaa 5,000 (Collateralized--Central Power and Light Company Project),
7.50% due 3/01/2020(b) 5,150
AAA Aaa 8,250 (Collateralized--Houston Light and Power), Series D,
7.60% due 10/01/2019(h) 8,538
Matagorda County, Texas, Navigational District No. 1,
Revenue Refunding Bonds (Houston Light and Power):
AAA Aaa 11,800 Series A, 6.70% due 3/01/2027(b) 11,830
AAA Aaa 26,305 Series C, 7.125% due 7/01/2019(h) 26,789
AAA Aaa 6,470 Series E, 7.20% due 12/01/2018(h) 6,614
AAA VMIG1 11,000 North Texas Higher Education Authority Incorporation,
Student Loan Revenue Bonds, VRDN, AMT, Series C,
5% due 4/01/2020(b)(f) 11,000
AAA Aaa 15,000 Southwest Higher Education Authority Incorporated, Texas,
Revenue Refunding Bonds (Southern Methodist University),
Series B, 6.25% due 10/01/2022(h) 13,939
Texas Municipal Power Agency, Revenue Refunding Bonds:
AAA Aaa 10,000 5.50% due 9/01/2010(e) 8,935
AAA Aaa 2,900 Series A, 6.75% due 9/01/2012(b) 2,938
Texas State Public Finance Authority, Building Revenue Capital
Appreciation Refunding Bonds(e)(j):
AAA Aaa 7,000 5.80% due 2/01/2009 2,805
AAA Aaa 2,890 6.10% due 2/01/2011 1,004
AAA Aaa 8,500 5.81% due 2/01/2012 2,757
Texas Turnpike Authority, Turnpike Revenue Refunding Bonds
(Dallas North Thruway)(b):
AAA Aaa 3,230 4.75% due 1/01/2011 2,626
AAA Aaa 2,085 4.75% due 1/01/2013 1,662
AAA Aaa 25,875 Trinity River Authority, Texas, Regional Wastewater System
Revenue Refunding Bonds, Series A, 5% due 8/01/2016(b) 20,791
Utah--2.2% AAA VMIG1 500 Emery County, Utah, PCR, Refunding (Pacificorp. Projects), VRDN,
5% due 11/01/2024(b)(f) 500
AAA Aaa 2,805 Salt Lake City, Utah, Hospital Revenue Bonds (Holy Cross Health
System Corporation--Holy Cross Hospital), 7.375% due 12/01/1996(a)(h) 2,963
AAA Aaa 28,000 Salt Lake City, Utah, Hospital Revenue Refunding Bonds
(IHC Hospital, Incorporated), 5% due 5/15/2020(b) 27,596
AA- Aa2 1,000 Uintah County, Utah, PCR (Desert Generation and Transmission
Cooperative--National Rural Utilities Company), Series 1984 F-2,
10.50% due 6/15/2001(a) 1,252
AAA Aaa 2,650 Utah Board of Regents, Student Loan Revenue Bonds, AMT, Series F,
7.45% due 11/01/2008(b) 2,771
A1+ VMIG1 3,100 Utah Board of Regents, Student Loan Revenue Bonds, VRDN, AMT,
Series C, 6.50% due 11/01/2013(b)(f) 3,100
A1+ VMIG1 11,300 Utah Board of Regents, Student Loan Revenue Bonds, VRDN,
Series B, 5% due 11/01/2000(b)(f) 11,300
Utah Municipal Power Agency, Electric System Revenue
Refunding Bonds, Series A(h):
AAA Aaa 3,120 5.50% due 7/01/2012 2,732
AAA Aaa 3,295 5.50% due 7/01/2013 2,879
<PAGE>
Vermont--0.8% AAA Aaa 18,950 Vermont, HFA, Revenue Bonds (Home Mortgage Purchase), AMT,
Series B, 7.60% due 12/01/2024(e) 19,741
Virginia--0.9% AAA Aaa 5,000 Danville, Virginia, IDA, Hospital Revenue Refunding Bonds
(Danville Regional Medical Center), 6.50% due 10/01/2019(h) 4,850
AAA Aaa 16,800 Prince William County, Virginia, Service Authority, Water and Sewer
System, Revenue Refunding Bonds, 5% due 7/01/2021(h) 13,143
AAA Aaa 5,000 Winchester, Virginia, IDA, Hospital Facilities Revenue
Refunding Bonds (Winchester Medical Center), SAVRS,
4.89% due 12/01/2014(b)(d) 5,000
Washington--4.9% AAA Aaa 33,535 Seattle, Washington, Municipal Light and Power Revenue Bonds,
6.625% due 7/01/2020(h) 33,229
Seattle, Washington, Municipality, Metropolitan Seattle,
Sewer Revenue Bonds:
AAA Aaa 3,865 Refunding, Series Z, 5.45% due 1/01/2022(b) 3,203
AAA Aaa 2,465 Series W, 6.25% due 1/01/2022(e) 2,301
AAA Aaa 4,485 Series W, 6.25% due 1/01/2023(e) 4,183
Seattle, Washington, Municipality, Metropolitan Seattle,
Sewer Revenue Refunding Bonds(h):
AAA Aaa 8,155 Series X, 5.30% due 1/01/2008 7,200
AAA Aaa 9,605 Series X, 5.375% due 1/01/2009 8,429
AAA Aaa 9,755 Series X, 5.40% due 1/01/2010 8,533
AAA Aaa 10,960 Series X, 5.40% due 1/01/2011 9,555
AAA Aaa 6,560 Series Y, 5.70% due 1/01/2015 5,790
AAA Aaa 3,315 Series Y, 5.70% due 1/01/2016 2,900
AAA Aaa 10,000 Seattle, Washington, Solid Waste Utility, Revenue Refunding Bonds,
Series A, 6.875% due 5/01/2009(g) 10,139
AAA Aaa 11,900 Tacoma, Washington, Sewer Revenue Bonds, 7.625% due 12/01/1998(a)(e) 12,762
AAA Aaa 3,250 University of Washington Revenue Bonds (Housing and Dining),
7% due 12/01/2021(e) 3,306
AAA Aaa 7,000 Washington Health Care Facilities Authority Revenue Bonds
(Southwest Washington Hospital--Vancouver), 7.125% due 10/01/2019(g) 7,086
D NR* 719 Washington Public Power Supply System, Generating Facilities
Revenue Bonds (Nuclear Project Numbers 4 and 5), Series D,
12.50% due 7/01/2010 719
AAA Aaa 5,750 Washington Public Power Supply System, Revenue Refunding Bonds
(Project No. 1), Series A, 6.25% due 7/01/2017(e) 5,413
West Virginia--1.1% AAA Aaa 9,270 Kanawha County, West Virginia, Building Commission Revenue
Refunding Bonds (Charleston Area Medical Center Inc.), Series A,
7.10% due 6/01/2013(e) 9,434
AAA Aaa 10,100 Putnam County, West Virginia, PCR, Refunding (Appalachian Power
Company Project), Series D, 5.45% due 6/01/2019(b) 8,444
AAA Aaa 5,600 West Virginia School Building Authority Revenue Bonds
(Capital Improvement), Series B, 6.75% due 7/01/2010(e) 5,633
AAA Aaa 5,000 West Virginia State Parkways Economic Development and Tourism
Authority, 5.80% due 5/15/2013(h) 4,543
<PAGE>
Wisconsin--0.9% AAA Aaa 7,000 Superior, Wisconsin, Limited Obligation Revenue Refunding Bonds
(Midwest Energy Resources), Series E, 6.90% due 8/01/2021(h) 7,154
Wisconsin Health and Educational Facilities Authority Revenue Bonds:
AAA Aaa 1,500 (Saint Luke's Medical Center Project), 7.10% due 8/15/2019(e) 1,523
AAA Aaa 5,750 (Waukesha Memorial Hospital), Series B, 7.25% due 8/15/2019(b) 5,894
AAA Aaa 6,500 Wisconsin Public Power System Incorporated, Power Supply System
Revenue Bonds, Series A, 6.875% due 7/01/2001(a)(b) 7,004
Total Investments (Cost--$2,487,700)--100.1% 2,444,913
Liabilities in Excess of Other Assets--(0.1)% (1,196)
----------
Net Assets--100.0% $2,443,717
==========
<FN>
(a)Prerefunded.
(b)AMBAC Insured.
(c)Escrowed to maturity.
(d)The interest rate is subject to change
periodically and inversely based upon the
prevailing market rate. The interest rate shown
is the rate in effect at December 31, 1994.
(e)MBIA Insured.
(f)The interest rate is subject to change
periodically based upon the prevailing market
rate. The interest rate shown is the rate in effect
at December 31, 1994.
(g)BIG Insured.
(h)FGIC Insured.
(i)FSA Insured.
(j)Principal only securities which are traded on
a discount basis and are amortized to maturity.
(k)The interest rate shown represents the yield to
maturity.
*Not Rated.
See Notes to Financial Statements.
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (in Thousands)
<CAPTION>
Municipal Bonds National Portfolio
<PAGE>
S&P Moody's Face Value
STATE Ratings Ratings Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
Alaska--4.2% Valdez, Alaska, Marine Terminal Revenue Refunding Bonds:
AA- A1 $ 6,000 (British Petroleum Pipeline), Series B, 7% due 12/01/2025 $ 5,947
AA- A1 33,835 (British Petroleum Pipeline), Series B, 5.50% due 10/01/2028 27,145
AA- A1 27,150 (Sohio Pipeline), 7.125% due 12/01/2025 27,147
Arizona--0.0% A1+ VMIG1 200 Maricopa County, Arizona, IDA, Hospital Facilities Revenue Bonds
(Samaritan Health Services Hospital), VRDN, Series B2,
4.10% due 12/01/2008(a) 200
California--3.2% AA Aa 17,535 California State, Department of Water Resources, Water System
SP-1+ MIG1++ Revenue Refunding Bonds (Central Valley Project), Series L, 5.875%
due 12/01/2025 15,189
7,400 California State, GO, RAN, Series A, 5% due 6/28/1995 7,411
NR* NR* 4,000 Long Beach, California, GO, Special Tax Community Facilities,
District No. 3, 6.375% due 9/01/2023 3,435
SP-1+ MIG1++ 18,000 Los Angeles County, California, Revenue Bonds, TRAN, UT,
4.50% due 6/30/1995 17,978
SP-1+ MIG1++ 5,000 Santa Clara County, California, TRAN, UT, 4.25% due 7/07/1995 4,950
Colorado--2.2% Denver, Colorado, City and County Airport Revenue Bonds, AMT:
BB Baa 5,000 Series A, 8% due 11/15/2017 4,847
BB Baa 3,000 Series A, 7.50% due 11/15/2023 2,769
BB Baa 8,570 Series A, 8% due 11/15/2025 8,358
BB Baa 1,310 Series B, 7.25% due 11/15/2007 1,255
BB Baa 3,000 Series B, 7.25% due 11/15/2023 2,701
BB Baa 5,650 Series C, 6.75% due 11/15/2022 4,838
BB Baa 7,840 Series D, 7.75% due 11/15/2021 7,499
Connecticut--0.7% AA+ Aa 1,000 Connecticut State Clean Water Fund Revenue Bonds, 5.80%
due 6/01/2016 905
AA Aa 5,000 Connecticut State, HFA, Housing Mortgage Finance Program, Series B,
6.30% due 5/15/2024 4,543
AA- A 4,550 Connecticut State Resource Recovery Authority Revenue Bonds
(American Refuse Fuel), AMT, Series A, 8% due 11/15/2015 4,790
Delaware--0.6% AAA NR* 7,500 Delaware State Health Facilities Authority Revenue Refunding Bonds
(Beebe Medical Center Project), 8.50% due 6/01/2000(k) 8,592
District of AA- A1 7,500 District of Columbia Revenue Bonds, SAVRS (Georgetown University),
Columbia--0.5% 5% due 4/01/2022(m) 6,965
<PAGE>
Florida--4.6% NR* Aaa 9,775 Florida HFA, Home Ownership Revenue Bonds, AMT, Series G1,
7.90% due 3/01/2022(g) 10,337
AA Aa 10,000 Florida State, Board of Education Capital Outlay, UT, Series E,
5.75% due 6/01/2019 8,909
AA- Aa2 5,000 Hillsborough County, Florida, IDA, PCR, Refunding
(Tampa Electric Company Project), Series 1991, 7.875% due 8/01/2021 5,388
AA Aa1 19,900 Jacksonville, Florida, Electric Authority Refunding Bonds
(Saint John's River Power Park System), Issue 2, Series 7,
5.50% due 10/01/2014 17,402
NR* NR* 2,700 Leesburg, Florida, Hospital Capital Improvement Revenue Bonds
(Leesburg Regional Medical Center Project), Series 1991-A,
7.50% due 7/01/2002(k) 3,015
AAA NR* 4,765 Orange County, Florida, HFA, Mortgage Revenue Bonds, AMT,
Series A, 8.375% due 3/01/2021(o) 5,044
A1 VMIG1 1,000 Saint Lucie County, Florida, PCR, Refunding
(Florida Power and Light Company Project), VRDN, 5% due 1/01/2026(a) 1,000
AA- Aa 5,000 Saint Petersburg, Florida, Public Utility, Revenue Bonds, GO,
5.60% due 10/01/2018 4,390
AAA Aaa 11,700 South Broward, Florida, Hospital District Revenue Bonds, SAVRS,
6.469% due 5/13/2021(m) 11,614
Georgia--4.0% AA Aa 20,000 Atlanta, Georgia, UT, Series A, 6.125% due 12/01/2023 18,513
AA- Aa 30,705 Atlanta, Georgia, Water and Sewer Revenue Refunding Bonds,
4.75% due 1/01/2023 22,689
AAA Aaa 16,000 Metropolitan Atlanta Rapid Transit Authority, Georgia,
Sales Tax Revenue Bonds, Second Indenture, Series A,
6.90% due 7/01/2020(f) 16,318
Idaho--0.2% AA NR* 2,445 Idaho Housing Agency, S/F Mortgage Revenue Bonds, AMT,
Series E, 7.875% due 7/01/2024(b) 2,539
Illinois--6.0% AA- Aa3 8,000 Chicago, Illinois, Gas Supply Revenue Bonds (Peoples Gas,
Light & Coke Company Project), AMT, Series A, 8.10% due 5/01/2020 8,727
Chicago, Illinois, O'Hare International Airport, Special Facilities
Revenue Bonds (United Airlines, Inc.):
BB Baa2 4,895 AMT, Series B, 8.95% due 5/01/2018 5,196
BB Baa2 14,330 Series 1984-B, 8.85% due 5/01/2018 15,283
AAA Aaa 5,015 Chicago, Illinois, Public Building Commission Revenue Bonds
(Community College District No. 508), Series B, 8.75%
due 1/01/2007(d)(i) 5,314
BBB NR* 3,000 Illinois Educational Facilities Authority, Revenue Refunding Bonds
(Columbia College), 6.875% due 12/01/2017 2,765
Illinois Health Facilities Authority Revenue Bonds:
AAA Aaa 3,000 (Methodist Health Project), 5% due 5/01/2021(c) 2,996
AAA Aaa 22,000 (Rush-Presbyterian Saint Luke's Medical Center),
6.80% due 10/01/2024(f) 21,693
Illinois Health Facilities Authority Revenue Refunding Bonds:
A+ A1 5,905 (OSF Healthcare Systems), 6% due 11/15/2023 4,985
BBB- NR* 2,625 (Saint Elizabeth's Hospital--Chicago), 7.75% due 7/01/2016 2,532
A+ Aa 11,500 Illinois Housing Development Authority, Residential Mortgage
Revenue Bonds, AMT, SAVRS, 4% due 2/01/2018(m) 10,982
NR* A1 4,000 Southwestern Illinois, Development Authority, Sewer Facilities
Revenue Bonds (Monsanto Company Project), AMT, 7.30% due 7/15/2015 4,055
<PAGE>
Indiana--0.7% NR* Baa1 3,500 Indiana Health Facilities Financing Authority, Hospital Revenue Bonds
(Riverview Hospital Project), 6.875% due 8/01/2017 3,124
A+ A1 2,000 Indiana Transportation Finance Authority, Highway Revenue Bonds,
Series A, 7.25% due 6/01/2015 2,112
A+ NR* 5,000 Indianapolis, Indiana, Local Public Improvement Refunding Bond Bank,
Series D, 6.75% due 2/01/2020 4,830
NR* Aa 1,500 Marion County, Indiana, Hospital Authority, Hospital Facility
Revenue Bonds (Daughters of Charity--Saint Vincent's Hospital
Project), 10.125% due 11/01/2015 1,590
Iowa--0.6% NR* NR* 9,000 Iowa Finance Authority, Health Care Facilities Revenue Bonds
(Mercy Health Initiatives Project), 9.95% due 7/01/2019 9,443
Kansas--1.6% AAA Aaa 24,000 Wichita, Kansas, Hospital Revenue Bonds, SAVRS, 5% due 10/01/2017(m) 23,154
Kentucky--0.8% NR* NR* 4,500 Perry County, Kentucky, Solid Waste Disposal Revenue Bonds
(TJ International Project), AMT, 7% due 6/01/2024 4,051
AA Aa2 6,345 Trimble County, Kentucky, PCR (Louisville Gas and Electric Company),
AMT, Series A, 7.625% due 11/01/2020 6,642
Louisiana--2.7% NR* Baa3 35,500 Lake Charles, Louisiana, Harbor and Terminal District Port Facilities,
Revenue Refunding Bonds (Trunkline LNG Company Project),
7.75% due 8/15/2022 36,008
BB- NR* 3,000 Port New Orleans, Louisiana, IDR, Refunding (Continental Grain
Company Project), 7.50% due 7/01/2013 2,890
Maine--0.2% AA- A1 3,815 Maine State, Housing Authority Mortgage Purchase, AMT, Series B-4,
6.90% due 11/15/2026 3,631
Maryland--0.5% AA- Aa 7,000 Maryland State Stadium Authority, Sports Facilities Lease Revenue
Bonds, AMT, Series D, 7.60% due 12/15/2019 7,322
Massachusetts--5.7% A+ A1 4,000 Massachusetts Bay Transportation Authority Refunding Bonds,
Series B, 6.20% due 3/01/2016 3,775
AAA Aaa 6,000 Massachusetts Bay Transportation Authority Revenue Bonds, Series B,
7.875% due 3/01/2001(k) 6,755
A+ A1 20,000 Massachusetts State, Consolidated Loans, UT, Series B,
9.25% due 7/01/2000 23,261
Massachusetts State, Health and Educational Facilities
Authority Revenue Bonds:
NR* NR* 9,520 (North Adams Regional Hospital), Series A, 9.625% due 12/01/2018 9,641
AAA Aaa 10,000 (Tufts University), 5.95% due 8/15/2018(e) 9,094
<PAGE> NR* Ba 12,350 Massachusetts State, Health and Educational Facilities Authority,
Revenue Refunding Bonds (New England Memorial Hospital),
Series B, 6.25% due 7/01/2023 9,375
Massachusetts State, HFA, Residential Development, Series C(h):
AAA Aaa 5,000 6.875% due 11/15/2011 5,032
AAA Aaa 7,500 6.90% due 11/15/2021 7,418
A-1 VMIG1 300 Massachusetts State, Industrial Finance Agency Revenue Refunding Bonds
(Showa Women's Institute Inc.), VRDN, 5% due 3/15/2004(a) 300
A A 6,985 Massachusetts State, Water Resources Authority, Series A,
5.75% due 12/01/2021 6,008
NR* NR* 3,000 Reading, Massachusetts, BAN, GO, 4.25% due 7/14/1995 2,991
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<CAPTION>
Municipal Bonds National Portfolio
S&P Moody's Face Value
STATE Ratings Ratings Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
Michigan--5.8% A+ A $ 1,000 Marquette, Michigan, City Hospital Finance Authority,
Revenue Refunding Bonds (Marquette General Hospital), Series C,
7.50% due 4/01/2019 $ 1,021
Michigan State Building Authority Revenue Bonds:
AA- A 3,000 Refunding, Series I, 6.25% due 10/01/2020 2,783
AA- A 14,000 Series II, 6.25% due 10/01/2020 12,988
Michigan State Hospital Finance Authority, Hospital Revenue Bonds
(Detroit Medical Center):
A- A 6,500 Refunding, Obligation Group, Series A, 6.50% due 8/15/2018 5,979
A- A 19,585 Refunding, Series B, 5.75% due 8/15/2013 16,677
A- A 3,500 Series A, 7.50% due 8/15/2011 3,614
Michigan State Trunk Line, GO, Series A:
AAA Aaa 7,365 5.67% due 10/01/2012(c)(j) 2,286
AA- A1 18,545 5.50% due 10/01/2021 15,530
BBB Baa1 9,350 Monroe County, Michigan, PCR (Detroit Edison Project), AMT,
Series A, 7.75% due 12/01/2019 9,752
Royal Oaks, Michigan, Hospital Financing Authority, Hospital Revenue
Refunding Bonds (William Beaumont Hospital), Series G:
AA Aa 3,250 5.50% due 11/15/2013 2,740
AA Aa 12,000 5.25% due 11/15/2019 9,470
Minnesota--1.2% AA+ Aa 6,110 Minnesota State, HFA, S/F Mortgage Bonds, AMT, Series A,
7.45% due 7/01/2022(b) 6,257
AAA NR* 9,220 Saint Paul, Minnesota, Housing and Redevelopment Authority,
S/F Mortgage Revenue Refunding Bonds, Series C,
6.95% due 12/01/2031(n) 9,063
A+ A 4,250 Southern Minnesota, Municipal Power Agency, Power Supply Systems,
Revenue Refunding Bonds, Series A, 4.75% due 1/01/2016 3,279
<PAGE>
Mississippi--1.2% BBB Baa 5,950 Lowndes County, Mississippi, Hospital Revenue Refunding Bonds
(Golden Triangle Medical Center), 8.50% due 2/01/2010 6,238
Medical Center Educational Building Corporation, Mississippi,
Revenue Bonds (University of Mississippi Medical Center Project):
A- NR* 1,000 5.65% due 12/01/2009 874
A- NR* 1,500 5.80% due 12/01/2014 1,267
A- NR* 5,000 5.90% due 12/01/2023 4,085
NR* Aaa 4,195 Mississippi Home Corporation, S/F Mortgage Revenue Bonds
(Access Program), AMT, Series A, 6.90% due 6/01/2024(o) 4,061
Missouri--1.0% NR* Baa1 6,150 Missouri State Health and Educational Facilities Authority,
Health Facilities Revenue Refunding Bonds (Jefferson Memorial
Hospital Association Project), 6% due 8/15/2023 4,860
A+ A1 4,000 Missouri State Regional Convention and Sports Complex Authority
Refunding Bonds, Series A, 5.60% due 8/15/2017 3,364
St. Louis County, Missouri, Regional Convention and Sports Complex
Authority Refunding Bonds, Series B:
BBB+ A 2,575 5.50% due 8/15/2013 2,195
BBB+ A 4,760 5.75% due 8/15/2021 3,937
Missouri & BBB+ NR* 11,400 Bi-State Development Agency, Missouri and Illinois, Metropolitan
Illinois--0.8% No. 5, Revenue Refunding Bonds (American Commonwealth),
7.75% due 6/01/2010 11,703
Nebraska--0.7% AAA Aaa 9,700 Nebraska Investment Finance Authority, S/F Mortgage Revenue Bonds,
AMT, SAVRS, 5% due 9/10/2030(m)(o) 9,954
New Hampshire--1.3% NR* Baa1 7,065 New Hampshire Higher Educational and Health Facilities Authority
Revenue Refunding Bonds (Saint Anselm College), 6.375% due 7/01/2023 6,113
A+ Aa 3,215 New Hampshire State, HFA, S/F Residential Mortgage Bonds, AMT,
7.90% due 2/01/2022 3,313
New Hampshire State, IDA, PCR (Public Service Co. of New Hampshire
Project), AMT:
BB+ Baa3 4,850 Series A, 7.65% due 5/01/2021 4,853
BB+ Baa3 6,500 Series C, 7.65% due 5/01/2021 6,503
New Jersey--5.0% New Jersey Building Authority, State Building Revenue
Refunding Bonds:
AA- Aa 15,000 5% due 6/15/2015 12,182
AA- Aa 10,000 5% due 6/15/2018 7,993
AAA Aaa 22,000 New Jersey EDA, Revenue Bonds (Market Transition Facility),
Senior Lien, Series A, 5.875% due 7/01/2011(f) 20,684
NR* NR* 6,700 New Jersey Health Care Facilities Financing Authority Revenue Bonds
(Riverwood Center Issue), Series A, 9.90% due 7/01/2021 7,229
A-1 VMIG1 15,400 New Jersey Sports and Exposition Authority, State Contract
Revenue Bonds, Series C, VRDN, 5% due 9/01/2024(a) 15,400
AA A 9,500 University Medicine and Dentistry of New Jersey, Revenue Bonds,
Series C, 7.20% due 12/01/2019 9,828
<PAGE>
New York--13.7% Metropolitan Transportation Authority, New York, Service Contract
Revenue Refunding Bonds (Commuter Facilities), Series 5:
BBB Baa1 2,145 6.90% due 7/01/2006 2,155
BBB Baa1 5,000 7% due 7/01/2012 5,013
New York City, New York, GO, UT:
A- Baa1 1,445 Series A, 8% due 8/15/2001(k) 1,640
A- Baa1 3,600 Series A, 7.75% due 8/15/2016 3,730
A- Baa1 4,065 Series A, 7.75% due 8/15/2017 4,211
A- Baa1 5,375 Series B, 8.25% due 6/01/2006 5,964
A- Baa1 2,700 Series B, 8.25% due 6/01/2007 2,998
A- Baa1 10,000 Series B, 7.75% due 2/01/2011 10,422
A- Baa1 4,500 Series B, 7.75% due 2/01/2012 4,684
A- Baa1 2,875 Series B, 7.75% due 2/01/2013 2,988
A- Baa1 1,650 Series B, 7.75% due 2/01/2014 1,714
A- Baa1 3,495 Series D, 8% due 8/01/2001(k) 3,975
A- Baa1 2,000 Series D, 7.70% due 2/01/2011 2,078
A- Aaa 6,580 Series F, 8.25% due 11/15/2001(k) 7,603
BBB Baa1 10,000 New York State Dormitory Authority Revenue Bonds
(City University Systems), Series A, Consolidated, 2nd General,
Series A, 5.75% due 7/01/2013 8,677
A1+ VMIG1 1,200 New York State Dormitory Authority Revenue Bonds (Cornell
University), Series B, VRDN, 5% due 7/01/2025(a) 1,200
New York State Dormitory Authority Revenue Bonds
(State University Educational Facilities):
BBB+ Baa1 7,500 Refunding, Series A, 5.50% due 5/15/2010 6,457
BBB+ Baa1 5,000 Refunding, Series A, 5.875% due 5/15/2011 4,488
BBB+ Baa1 5,725 Refunding, Series A, 5.50% due 5/15/2013 4,829
BBB+ Baa1 15,000 Refunding, Series B, 5.25% due 5/15/2011(k) 12,401
BBB+ Baa1 5,085 Refunding, Series B, 7.375% due 5/15/2014 5,187
BBB+ Baa1 5,000 Series A, 7.50% due 5/15/2013 5,272
BBB+ Baa1 6,000 Series A, 6.25% due 5/15/2017 5,432
New York State Energy Research and Development Authority,
Electric Facilities Revenue Bonds (Long Island Lighting), AMT:
BBB- Baa3 8,230 Series A, 7.15% due 9/01/2019 7,546
BB+ Ba1 2,000 Series A, 7.15% due 12/01/2020 1,831
BB+ Baa3 4,000 Series B, 7.15% due 2/01/2022 3,646
BB+ Ba1 10,250 New York State Energy Research and Development Authority,
Electric Facilities Revenue Bonds (Long Island Lighting), AMT,
Series A, 7.15% due 6/01/2020 9,391
A- A 4,500 New York State, GO, UT, 5.625% due 3/01/2013 3,978
New York State Local Government Assistance Corporation:
A A 5,000 Refunding, Series B, 5.375% due 4/01/2016 4,168
A A 6,000 Series A, 7% due 4/01/2012(k) 6,093
A A 10,000 Series A, 6.50% due 4/01/2020 9,650
A A 10,000 Series B, 6% due 4/01/2018 9,060
A A 5,000 Series D, 5.375% due 4/01/2014 4,194
New York State Power Authority General Purpose Revenue Refunding
Bonds, Series CC:
AA- Aa 4,550 5% due 1/01/2014 3,675
<PAGE> AA- Aa 10,500 5.25% due 1/01/2018 8,517
AAA Aaa 14,595 New York State, Urban Development Corporation,
Revenue Refunding Bonds (Correctional Capital Facilities), Series A,
6.50% due 1/01/2010(h) 14,720
New York & Port Authority of New York and New Jersey, Consolidated
New Jersey--0.7% Revenue Bonds:
AA- A1 8,000 91st Series, 5.20% due 11/15/2016 6,600
AA- A1 3,705 Refunding, 87th Series, 5.25% due 7/15/2014 3,078
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in Thousands)
<CAPTION>
Municipal Bonds National Portfolio
S&P Moody's Face Value
STATE Ratings Ratings Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
Ohio--4.0% AAA Aaa $ 12,000 Cleveland, Ohio, Public Power System Revenue Bonds, First Mortgage,
Series A, 7% due 11/15/2024(f) $ 12,310
A A1 3,610 Cuyahoga County, Ohio, Hospital Revenue Bonds
(Meridia Health System), 7.25% due 8/15/2019 3,643
Ohio HFA, S/F Mortgage Revenue Bonds, AMT(o):
AAA Aaa 21,800 RIB, Series B, 4% due 3/31/2031 21,240
AAA NR* 2,705 Series B, 8.25% due 12/15/2019 2,860
AAA NR* 4,955 Series C, 7.85% due 9/01/2021 5,168
BBB- Baa2 14,000 Ohio State Air Quality Development Authority, PCR, Refunding
(Ohio-Edison), Series A, 5.95% due 5/15/2029 11,250
Oregon--0.2% AA- Aa 1,030 Oregon State, PCR, UT, Series C, 5.625% due 6/01/2013 927
AAA Aaa 1,200 Polk County, Oregon, School District No. 002, GO, UT,
5.40% due 6/01/2012(h) 1,072
Pennsylvania--6.0% A1+ VMIG1 1,100 Allegheny County, Pennsylvania, Hospital Development Authority
Revenue Bonds (Presbyterian Health Center), VRDN, Series D,
5.20% due 3/01/2020(a)(f) 1,100
A-1 NR* 15,000 Emmaus, Pennsylvania, General Authority, Revenue Bonds
(Local Government), VRDN, Series H-4, 5.20% due 3/01/2024(a) 15,000
BB Ba 11,050 Pennsylvania Convention Center Authority Revenue Refunding Bonds,
Series A, 6.75% due 9/01/2019 10,009
AA Aa 17,600 Pennsylvania, HFA, Revenue Refunding Bonds, AMT, 4% due 10/03/2023 16,905
AAA Aaa 20,000 Pennsylvania State Higher Educational Assistance Agency,
Student Loan Revenue Bonds, AMT, 5% due 9/03/2026(c) 19,642
BBB Baa1 2,000 Philadelphia, Pennsylvania, Hospital and Higher Educational
<PAGE> Facilities Authority, Hospital Revenue Bonds (Frankford Hospital),
Series A, 6% due 6/01/2023 1,610
BBB+ Baa1 5,400 Philadelphia, Pennsylvania, Hospital and Higher Educational
Facilities Authority Revenue Bonds (Graduate Health Systems),
Series A, 6.25% due 7/01/2013 4,630
BBB Baa 7,335 Philadelphia, Pennsylvania, Water and Wastewater Revenue
Refunding Bonds, 5.75% due 6/15/2013 6,313
AAA Aaa 4,800 Pittsburgh, Pennsylvania Water and Sewer Authority, Water and Sewer
System Revenue Refunding Bonds, Series A, 6.75% due 9/01/2001(e)(k) 5,139
BBB Baa 5,650 Ridley Park, Pennsylvania, Hospital Authority, Revenue Refunding
Bonds (Taylor Hospital), Series A, 6.125% due 12/01/2020 4,493
AAA Aaa 2,500 York County, Pennsylvania, Hospital Authority Revenue Bonds
(York Hospital), 7% due 1/01/2001(c)(k) 2,691
Puerto Rico--0.8% A Baa1 5,000 Puerto Rico Commonwealth Highway and Transportation Authority,
Highway Revenue Bonds, Series W, 5.25% due 7/01/2020 4,001
Puerto Rico Commonwealth Highway and Transportation Authority,
Highway Revenue Refunding Bonds, Series X:
A Baa1 1,000 5.50% due 7/01/2015 849
A Baa1 6,000 5.25% due 7/01/2021 4,818
A Baa1 1,000 Puerto Rico Commonwealth Refunding Bonds, UT, 5.25% due 7/01/2018 809
Rhode Island--2.6% Rhode Island Depositors Economic Protection Corporation,
Special Obligation Bonds, Series A:
AAA Aaa 5,250 6.95% due 8/01/2002(k) 5,697
A- Baa1 5,500 Refunding, 5.75% due 8/01/2012 4,756
A- Baa1 30,000 Refunding, 6.25% due 8/01/20162 7,418
South Carolina--0.5% BBB- Baa 8,355 South Carolina Jobs, EDA, Economic Development Revenue Bonds
(Saint Francis Hospital--Franciscan Sisters), 7% due 7/01/2015 7,629
South Dakota--0.6% AA+ Aa1 9,085 South Dakota, HDA, Homeownership Mortgage, Series A,
7.15% due 5/01/2027 9,095
Tennessee--0.7% NR* NR* 10,000 Knox County, Tennessee, Health, Educational and Housing
Facilities Board, Hospital Facilities Revenue Bonds
(Baptist Health System of East Tennessee), 8.60% due 4/15/2016 10,310
Texas--8.5% A- NR* 13,500 Brazos County, Texas, Health Facility Development Corporation,
Franciscan Services Corporation, Revenue Refunding Bonds (Saint
Joseph Hospital and Health Center), Series B, 6% due 1/01/2013 11,929
Brazos River Authority, Texas, PCR
(Texas Utilities Electric Company Project), AMT:
BBB Baa 32,095 Series A, 8.25% due 1/01/2019 2,196
<PAGE> BBB Baa2 18,150 Series A, 7.875% due 3/01/2021 18,803
BBB Baa2 2,000 7.875% due 3/01/2017 2,049
A A2 12,350 Brazos River Authority, Texas, Revenue Refunding Bonds
(Houston Light and Power), Series 1989-A, 7.625% due 5/01/2019 12,767
BBB Baa1 5,000 Gulf Coast Waste Disposal Authority, Texas, Revenue Bonds
(Champion International Corporation), AMT, 7.45% due 5/01/2026 4,881
Harris County, Texas, Certificates of Obligation, Tax and
Revenue Bonds:
AA+ Aa 2,400 10% due 10/01/2000 2,897
AA+ Aa 2,400 10% due 10/01/2001 2,957
A1+ NR* 4,400 Harris County, Texas, Health Facilities Development Corporation,
Hospital Revenue Bonds (Methodist Hospital), VRDN,
5% due 12/01/2025(a)(b) 4,400
BBB- Baa 8,255 Jefferson County, Texas, Health Facilities Development Corporation,
Hospital Revenue Bonds (Baptist Healthcare System Project),
8.875% due 6/01/2021 8,723
AA Aa 24,000 North Central Texas, Health Facilities Development Corporation
Revenue Bonds (Baylor University Medical Center), Series A,
6.71% due 5/15/2016 22,962
AAA Aaa 13,685 Round Rock, Texas, Independent School District and
School Building Refunding Bonds, UT, 5.80% due 8/15/2011(f)(j)(l) 4,591
A+ Aa 9,350 Texas Housing Agency, Residential Development Mortgage Revenue Bonds,
Series A, 7.50% due 7/01/2015(o) 9,508
AA Aa 14,000 Texas State Veteran Housing Assistance, AMT, UT, Series A,
7% due 12/01/2025 13,824
BBB Baa2 2,000 West Side Calhoun County, Texas, Navigation District, Solid Waste
Disposal Revenue Bonds (Union Carbide Chemicals Project), AMT,
6.40% due 5/01/2023 1,734
Utah--1.3% AA Aa 7,535 Intermountain Power Agency, Utah, Power Supply Revenue Bonds,
Series B, 5.35% due 7/01/2004(j)(l) 4,180
A1+ VMIG1 2,100 Utah State Board Regents, Student Loan Revenue Bonds, VRDN,
Series B, 5% due 11/01/2000(a) 2,100
AA NR* 13,250 Weber County, Utah, Municipal Building Authority,
Lease Revenue Bonds, 7.50% due 12/15/2019 13,467
Virginia--0.9% AA- Aa 10,000 Fairfax County, Virginia, Water Authority, Revenue Refunding Bonds,
5.75% due 4/01/2029 8,658
AA+ Aa1 4,000 Virginia State HDA, Commonwealth Mortgage Revenue Bonds,
Series A, 7.15% due 1/01/2033 4,013
Washington--2.4% AAA NR* 14,425 Washington State Housing Finance Community, S/F Mortgage Revenue
Refunding Bonds, AMT, Series E, 7.10% due 7/01/2022(g) 14,477
Washington State Public Power Supply System, Revenue Refunding Bonds
(Nuclear Project #2), Series A:
AA Aa 16,470 5.80% due 7/01/2007 15,268
AA Aa 6,195 5.75% due 7/01/2012 5,426
<PAGE>
West Virginia--0.6% AA+ Aa1 8,400 West Virginia State, Housing Development Fund, Housing Finance,
Series D, 7.05% due 11/01/2024 8,316
Wisconsin--1.0% Wisconsin Housing and EDA, Housing Revenue Bonds:
A A1 5,400 Series B, 7.05% due 11/01/2022 5,360
A A1 5,105 Series C, 7% due 5/01/2015 5,082
AA Aa 4,925 Wisconsin Housing, EDA, Home Ownership, Revenue Bonds,
Series A, 7.10% due 3/01/2023 4,957
Total Investments (Cost--$1,513,633)--100.5% 1,461,846
Liabilities in Excess of Other Assets--(0.5)% (6,850)
----------
Net Assets--100.0% $1,454,996
==========
<FN>
(a)The interest rate is subject to change periodically based upon prevailing market
rates. The interest rate shown is the rate in effect at December 31, 1994.
(b)FHA Insured.
(c)AMBAC Insured.
(d)BIG Insured.
(e)FGIC Insured.
(f)MBIA Insured.
(g)GNMA/FNMA Collateralized.
(h)FSA Insured.
(i)Escrowed to Maturity.
(j)The interest rate shown represents the yield to maturity.
(k)Prerefunded.
(l)Principal only securities which are traded on a discount basis and are amortized
to maturity.
(m)The interest rate is subject to change periodically and inversely based upon
prevailing market rates. The interest rate shown is the rate in effect at
December 31, 1994.
(n)FNMA Insured.
(o)GNMA Insured.
++Represents the highest short-term rating issued by Moody's Investors Service, Inc.
*Not Rated.
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (in Thousands)
<CAPTION>
Municipal Bonds Limited Maturity Portfolio
S&P Moody's Face Value
STATE Ratings Ratings Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
Alabama--0.6% NR* Aa $ 5,050 Alabama State Public School and College Authority, Refunding Bonds,
3.70% due 12/01/1996 $ 4,858
Alaska--2.0% A+ Aa 1,700 Alaska State Housing Finance Corporation, GO, Series A,
4.20% due 12/01/1995 1,673
A1+ VMIG1 10,000 Alaska State Housing Finance Corporation, VRDN, Series A,
5% due 6/01/2029(b) 10,000
AAA Aaa 5,000 Anchorage, Alaska, GO, Refunding Bonds, UT, 4.85% due 7/01/1995(d) 5,005
Arizona--0.6% A1+ VMIG1 1,000 Maricopa County, Arizona, IDA, Hospital Facility Revenue Bonds
(Samaritan Health Services Hospital), VRDN, Series B2,
4.10% due 12/01/2008(b)(d) 1,000
A+ A1 3,000 Maricopa County, Arizona, Transportation Board,
Excise Tax Revenue Bonds, 7.10% due 7/01/1996 3,073
AA P1 800 Pinal County, Arizona, IDA, PCR (Magma Copper/Newmont Mining Corp.),
VRDN, 5% due 12/01/2009(b) 800
California--9.6% NR* VMIG1 5,850 California Higher Education Loan Authority, Student Loan Revenue
Refunding Bonds, Senior Lien, Series A-1, 3.90% due 7/01/1995 5,824
SP-1+ MIG1++ 7,500 California State, GO, RAN, Series A, 5% due 6/28/1995 7,511
SP-1+ MIG1++ 15,000 California State, GO, RAW, Series C, 5.75% due 4/25/1996 15,002
A A1 10,000 California State Various Purpose Bonds, GO, 4% due 10/01/1995 9,876
AA Aa 5,005 California Statewide Communities Development Authority, Revenue
Refunding Bonds, COP (Saint Joseph Health Systems), 4.10%
due 7/01/1997 4,773
NR* MIG1++ 30,000 Fresno County, California, TRAN, 4.25% due 7/13/1995 29,843
AA- Aa 1,100 San Diego County, California, Water Authority, Water Revenue
Refunding Bonds, COP, Series A, 4.10% due 5/01/1995 1,098
SP-1+ MIG1++ 4,000 Santa Clara County, California, TRAN, UT, 4.25% due 7/07/1995 3,960
Colorado--1.7% NR* NR* 10,000 Denver, Colorado, City and County Airport Revenue Bonds, Sub-series
B, 4.25% due 9/01/1995 9,941
AA Baa1 3,810 Jefferson County, Colorado, District No. R-001, Revenue Refunding
Bonds, Series A, 3.65% due 12/15/1996 3,649
<PAGE>
Connecticut--2.4% Connecticut State Economic Recovery Notes, GO, Series A:
AA- Aa 3,900 5.40% due 12/15/1995 3,911
AA- Aa 3,250 5.50% due 6/15/1996 3,268
AA- Aa 6,705 Connecticut State, GO, UT, Series B, 4.90% due 11/15/1995 6,692
NR* Aa3 3,940 Connecticut State Housing Mortgage Revenue Bonds (Chestnut Hill
Apartments), 4.60% due 4/01/1997 3,825
AAA Aaa 2,000 Stratford, Connecticut, GO, UT, 3.50% due 11/01/1996(f) 1,914
Delaware--0.2% AAA Aaa 1,500 Delaware State, Realty Transfer Tax Revenue Bonds (Land and Water
Conservation Trust Fund Program), 5.30% due 4/01/1995(f) 1,503
District of District of Columbia, General Fund Recovery Bonds:
Columbia--1.9% AAA Aaa 11,000 UT, Series C, 5.50% due 6/01/1995(f) 11,030
A1+ VMIG1 900 VRDN, Series B-2, 4.90% due 6/01/2003(b) 900
A1+ VMIG1 1,500 VRDN, Series B-3, 5% due 6/01/2003(b) 1,500
AAA Aaa 1,465 District of Columbia, GO, UT, Series B, 5.30% due 6/01/1995(d) 1,468
Florida--3.4% NR* VMIG1 3,000 Atlantic Beach, Florida, Revenue Refunding Bonds (Improvement--Fleet
Landing), VRDN, Series B, 5% due 10/01/2024(b) 3,000
A Aa 2,000 Dade County, Florida, Aviation Revenue Refunding Bonds, Series X,
4.10% due 10/01/1995 1,981
AAA Aaa 1,900 Dade County, Florida, Water System Revenue Refunding Bonds,
4% due 6/01/1995(f)(g) 1,895
AAA Aaa 5,000 Florida State Division, Board of Finance Revenue Bonds
(Department of Natural Resources Preservation 2000), Series A,
6.10% due 7/01/1995(c) 5,039
A+ A 3,860 Florida State, GO, COP (Construction Equipment Financing Program),
5.75% due 11/15/1995 3,884
AAA Aaa 2,375 Florida State Turnpike Authority, Turnpike Revenue Bonds, Series A,
5% due 7/01/1995(f) 2,380
AA Aaa 4,000 Jacksonville, Florida, Electric Authority Revenue Refunding Bonds
(Saint John's River Park Power), Issue II, Series 4,
6.90% due 10/01/1995(a) 4,115
A-1 VMIG1 2,800 Manatee County, Florida, PCR, Refunding (Florida Power & Light Co.,
Project), VRDN, 5% due 9/01/2024(b) 2,800
A-1 VMIG1 2,700 Martin County, Florida, PCR, Refunding (Florida Power & Light Co.,
Project), VRDN, 5% due 9/01/2024(b) 2,700
Georgia--0.8% AA Aa1 2,000 Gwinnett County, Georgia, COP (Water and Sewer), 7.60% due 8/01/1995 2,027
AAA Aaa 3,965 Metropolitan Atlanta, Georgia, Rapid Transit Authority, Sales Tax
Revenue Refunding Bonds, Series P, 4.75% due 7/01/1995(c) 3,969
<PAGE>
Illinois--5.3% Chicago, Illinois, Metropolitan Water Reclamation District, Greater
Chicago Revenue Refunding Bonds:
AA Aa 5,000 4% due 12/01/1996 4,844
AA Aa 3,100 UT, 4.10% due 12/01/1995 3,059
AA Aa 3,000 UT, 4.50% due 12/01/1996 2,942
A+ A1 2,580 Chicago, Illinois, O'Hare International Airport Revenue Bonds, AMT,
Series A, 4.40% due 1/01/1995 2,580
Chicago, Illinois, School Financing Authority:
AAA Aaa 5,000 7.25% due 6/01/1998 5,143
AAA Aaa 2,755 Refunding, Series A, 5% due 6/01/1995(f) 2,758
A1+ VMIG1 7,500 Chicago, Illinois, Tender Notes, Series A-1, 3.10% due 10/31/1995 7,341
AAA Aaa 3,750 Cook County, Illinois, High School District No. 205 Revenue Refunding
Bonds, UT (Thornton Township), 5% due 6/01/1995(f)(g) 3,756
AA Aaa 3,975 Illinois Educational Facilities Authority Revenue Bonds
(University of Chicago), 7% due 12/01/1996(a) 4,175
AA- Aa 3,000 Illinois State, GO, 5.50% due 6/01/1995 3,011
A A1 3,625 Illinois State Toll and Highway Authority, Revenue Refunding Bonds,
Series A, 3.70% due 1/01/1996 3,541
Indiana--2.3% NR* VMIG1 13,280 Indiana State, HFA, S/F Mortgage Revenue Bonds, Series D,
4.30% due 7/03/1995 13,240
AA- Aa 4,800 Purdue University, Indiana, University Revenue Bonds, Student Fees,
Series J, 4.15% due 7/01/1996 4,694
Kentucky--2.3% Daviess County, Kentucky, Solid Waste Disposal Facilities
Revenue Bonds (Scott Paper Co. Project), VRDN, AMT(b):
A1+ VMIG1 200 Series A, 5.10% due 12/01/2023 200
A1+ VMIG1 2,300 Series B, 5% due 5/01/2024 2,300
A+ A 13,000 Kentucky State Property and Building Community, Revenue Refunding
Bonds, Project No. 55, 3.60% due 9/01/1996 12,491
AAA Aaa 3,250 Kentucky State Turnpike Authority, Economic Development, Revenue
Refunding Bonds (Revitalization Projects), 4% due 7/01/1996(c) 3,176
Louisiana--1.2% A+ A1 3,610 Louisiana Public Facilities Authority Revenue Bonds
(Tulane University), Series B, 6.80% due 8/15/1996 3,690
A A3 5,410 Louisiana State Offshore Terminal Authority Revenue Refunding
Bonds (Deepwater Port), First Stage, Series B, 4.60% due 9/01/1995 5,399
Maine--0.7% AA+ Aa 5,255 Maine State General Purpose Bonds, GO, 4.10% due 9/01/1995 5,211
Maryland--0.6% A+ A1 4,535 Maryland State Transportation Authority Revenue Bonds,
6% due 7/01/1995 4,567
<PAGE>
Massachusetts--4.0% BBB+ NR* 3,660 Massachusetts State, COP, GO, 5.10% due 6/30/1996 3,612
Massachusetts State, GO, Series A, Dedicated Income Tax:
AAA Aaa 2,900 7% due 6/01/1995(f) 2,928
A+ A1 2,500 7.25% due 6/01/1996 2,572
AAA Aaa 5,000 7.25% due 6/01/1996(f) 5,128
Massachusetts State Health and Educational Facilities
Authority Revenue Bonds:
AAA NR* 4,590 (Melrose-Wakefield Hospital), Series A, 8.625% due 7/01/1996(a) 4,897
AAA Aaa 2,005 (New England Medical Center Hospitals), Series G,
3.80% due 7/01/1997(d) 1,905
A+ A1 6,720 Massachusetts State, HFA, Housing Projects, Revenue Refunding Bonds,
Series A, 3.90% due 4/01/1995 6,700
Massachusetts State Water Resource Authority, GO, Series A:
A A 1,690 6.70% due 4/01/1995 1,698
AAA Aaa 2,555 6.70% due 4/01/1995(g) 2,570
NR* NR* 995 South Hadley, Massachusetts, Industrial Revenue Bonds (South Hadley
Health Care), AMT, Series A, 5% due 12/01/1996 982
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<CAPTION>
Municipal Bonds Limited Maturity Portfolio
S&P Moody's Face Value
STATE Ratings Ratings Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
Michigan--2.0% NR* VMIG1 $ 1,000 Detroit, Michigan, Downtown Development Authority, Revenue Refund-
ing Bonds (Millender Center Project), VRDN, 5% due 12/01/2010(b) $ 1,000
SP-1 MIG1++ 5,075 Detroit, Michigan, GO, Notes, 3.80% due 7/01/1995 5,053
A1+ VMIG1 4,000 Grand Rapids, Michigan, Water Supply Systems Revenue Refunding
Bonds VRDN, 5% due 1/01/2020(b)(f) 4,000
AAA NR* 5,475 Michigan State, HFA, Revenue Bonds (Harper-Grace & Huron Valley
Hospitals), Series A, 10% due 10/01/1995(a) 5,778
NR* VMIG1 800 Michigan State Strategic Fund, Solid Waste Disposal Revenue Bonds
(Grayling Generating Project), VRDN, AMT, 3% due 1/01/2014(b) 800
Minnesota--2.8% AAA Aaa 3,225 Hennepin County, Minnesota, Capital Improvement Bonds, UT, Series B,
3.25% due 12/01/1995 3,154
AAA Aaa 1,600 Minneapolis and St. Paul, Minnesota, Metropolitan Airports Revenue
Bonds, AMT, UT, Series 8, 4.60% due 1/01/1995 1,600
AA+ NR* 1,650 Minnesota Public Facilities Authority, Water Pollution Control
Revenue Bonds, Series A, 4.70% due 3/01/1995 1,650
Minnesota State, HFA, S/F Mortgage:
A1+ VMIG1 4,755 AMT, Series U, 4.95% due 12/14/1995 4,746
A1+ VMIG1 7,265 AMT, Series V, 4.95% due 12/14/1995 7,265
A1+ VMIG1 4,105 Series T, 4.85% due 12/14/1995 4,095
<PAGE>
Mississippi--1.6% NR* P1 1,700 Jackson County, Mississippi, PCR, Refunding
(Chevron USA, Inc. Project), VRDN, 5% due 12/01/2016(b) 1,700
NR* P1 2,000 Jackson County, Mississippi, Port Facility Revenue Refunding Bonds
(Chevron USA, Inc. Project), VRDN, 5% due 6/01/2023(b) 2,000
A NR* 10,000 Mississippi Higher Education Assistance Corporation, Student Loan
Revenue Refunding Bonds, AMT, Series C, 5.40% due 1/01/1996 9,975
NR* P1 300 Perry County, Mississippi, PCR, Refunding (Leaf River Forest Project),
VRDN, 5% due 3/01/2002(b) 300
Missouri--1.7% SP-1+ NR* 14,500 Missouri State Environmental Improvement and Energy Resource
Authority, Water, PCR (State Revolving Fund Program), Series A,
3.90% due 9/01/1996 13,963
Nebraska--1.7% Nebraska Public Power District Revenue Bonds:
A+ A1 7,000 (Nuclear Facility), 4% due 7/01/1995 6,958
A+ A1 3,500 Refunding (Electric System), Series A, 4.50% due 1/01/1995 3,500
A+ A1 3,570 Refunding (Power Supply System), Series C, 3.50% due 1/01/1996 3,478
Nevada--0.9% AAA Aaa 7,000 Washoe County, Nevada, Airport Authority, Airport Systems Improvement
Revenue Bonds, AMT, Series A, 3.90% due 7/01/1995(d) 6,968
New Jersey--6.8% Camden County, New Jersey, Improvement Authority (Solid Waste
Disposal), Revenue Refunding Bonds (Landfill Project):
A- A1 1,125 3.55% due 7/01/1995 1,119
A- A1 2,000 4% due 7/01/1997 1,909
AA+ Aaa 4,500 Middlesex County, New Jersey, Refunding Bonds, UT, 3.60%
due 7/15/1996 4,363
AAA Aaa 3,820 Middlesex County, New Jersey, Utility Authority, Solid Waste System
Revenue Bonds, 5.20% due 12/01/1995(f) 3,817
AAA Aaa 9,000 New Jersey EDA, Market Transition Facility Revenue Bonds, Senior Lien,
Series A, 4.80% due 7/01/1998(d) 8,760
A+ NR* 3,765 New Jersey State Housing and Mortgage Finance Agency,
Revenue Refunding Bonds, Series 1, 4.50% due 11/01/1995 3,732
New Jersey State Transportation Trust Fund Authority Revenue Bonds
(Transportation Systems):
A+ Aa 5,505 Refunding, Series B, 3.20% due 6/15/1995 5,472
A+ Aa 20,000 Series A, 5% due 12/15/1997 19,751
A A 2,160 New Jersey State Turnpike Authority, Revenue Refunding Bonds,
Series A, 5.50% due 1/01/1996 2,163
AAA Aaa 3,265 Passaic Valley, New Jersey, Sewage Commissioners Revenue
Refunding Bonds, Series D, 5.70% due 12/01/1995(c) 3,282
New Mexico--0.3% AAA Aaa 2,500 New Mexico Education Loan Assistance Foundation, Student Loan
Revenue Bonds, AMT, Series A, 5.75% due 4/01/1996(c) 2,509
<PAGE>
New York--5.4% AAA Aaa 4,000 Albany County, New York, Revenue Refunding Bonds, UT,
3.30% due 10/01/1995(f) 3,932
New York City, New York, GO, UT:
A- Baa1 5,000 Refunding, Series A, 4.60% due 8/01/1995 4,956
A- Baa1 3,000 Series A, 7.20% due 3/15/1995(g) 3,018
A- Aaa 6,710 Series D, 6.40% due 2/01/1995(g) 6,710
A- Baa1 4,640 Series D, 6.40% due 2/01/1995 4,640
A1+ NR* 800 New York City, New York, IDA, Civic Facilities Revenue Bonds
(National Audobon Society), VRDN, 5% due 12/01/2014(b) 800
A1+ NR* 400 New York City, New York, IDA, IDR (Japan Airlines Company Ltd.
Project), VRDN, AMT, 4% due 11/01/2015(b) 400
SP-1+ MIG1++ 4,000 New York City, New York, TAN, UT, Series A, 5% due 2/15/1995 4,000
New York State Dormitory Authority Revenue Bonds:
A1+ VMIG1 7,000 (New York Public Library), Series B, 3.875% due 7/01/1995 6,959
NR* VMIG1 5,000 (Oxford University Press Inc.), VRDN, 5% due 7/01/2023(b) 5,000
A A 2,000 New York State Local Government Assistance Corporation Revenue Bonds,
Series A, 5% due 4/01/1995 2,001
A1+ VMIG1 800 Syracuse, New York, IDA, Civic Facility Revenue Bonds (Syracuse
University Project), VRDN, 5% due 3/01/2023(b) 800
North Carolina--1.2% NR* VMIG1 9,300 North Carolina Educational Facilities Finance Agency Revenue Bonds
(Bowman Grey School of Medicine Project), VRDN, 5% due 9/01/2020(b) 9,300
North Dakota--0.6% NR* Aa 5,000 North Dakota Student Loan Revenue Refunding Bonds, Series A,
5.40% due 7/01/1996 4,983
Ohio--7.5% Cincinnati, Ohio, City School District:
A+ NR* 2,500 RAN, 5.35% due 6/15/1996 2,492
A+ NR* 7,500 TAN, 5% due 6/01/1995 7,495
Cleveland, Ohio, City School District, RAN, UT(c):
AAA Aaa 3,000 4.20% due 6/01/1996 2,942
AAA Aaa 10,000 4.35% due 6/01/1997 9,721
AAA Aaa 2,700 Columbus, Ohio, Sewer Improvement Revenue Bonds (Waterworks Parks),
6.75% due 7/01/1995(g) 2,729
NR* NR* 2,000 Lucas County, Ohio, BAN, 5.75% due 11/30/1995 2,010
Ohio State Air Quality Development Authority, PCR, Refunding
(Ohio Edison Company), Series A:
A+ VMIG1 10,500 4.25% due 8/01/1996 10,240
A+ VMIG1 6,700 3.45% due 2/01/2015 6,545
Ohio State Public Facilities Commission, Higher Education Facilities:
A+ A1 3,300 Capital Facilities, Series II-A, 5.30% due 12/01/1996 3,303
AAA Aaa 1,995 Series II-A, 6.25% due 2/01/1996(c) 2,006
AAA Aaa 10,250 Trumbull County, Ohio, Hospital Revenue Bonds (Trumbull Memorial
Hospital Project), 9.625% due 11/01/1995(a)(f) 10,836
<PAGE>
Oklahoma--0.8% A+ Aa 6,370 Oklahoma County, Oklahoma, Independent School District No. 89, UT,
6.50% due 2/01/1998 6,554
Pennsylvania--0.9% AA- A1 4,225 Pennsylvania State, UT, Second Series, 4.70% due 7/01/1996 4,184
AAA Aaa 3,000 Pittsburgh, Pennsylvania, Water and Sewer Authority, Revenue
Refunding Bonds, Series A, 3.50% due 9/01/1996(f) 2,880
Puerto Rico--1.3% A Baa1 3,415 Puerto Rico Public Buildings Authority, Revenue Refunding Bonds,
Series J, 5.20% due 7/01/1995 3,421
BBB Baa 7,065 Puerto Rico, S/F Finance Housing Agency, Revenue Refunding Bonds,
3.75% due 12/01/1995 6,913
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<CAPTION>
Municipal Bonds Limited Maturity Portfolio
S&P Moody's Face Value
STATE Ratings Ratings Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
Rhode Island--1.3% AAA Aaa $ 4,180 Rhode Island Depositors Economic Protection Corporation,
Special Obligation Bonds, Series A, 5% due 8/01/1995(e) $ 4,173
NR* A 6,000 Rhode Island State, Student Loan Authority, Student Loan Revenue
Refunding Bonds, Series A, 5.70% due 12/01/1996 5,996
South Carolina--1.3% AA- A1 1,000 Charleston, South Carolina, Waterworks and Sewer Improvement Revenue
Refunding Bonds, 4.45% due 1/01/1995 1,000
NR* VMIG1 1,100 Orangeburg County, South Carolina, Solid Waste Disposal Facilities
Revenue Bonds (South Carolina Electric & Gas), VRDN, AMT,
5% due 10/01/2024(b) 1,100
AA- A1 4,000 South Carolina State Public Service Authority Revenue Refunding Bonds
(Electric Systems Expansion), Series A, 7.50% due 7/01/1996 4,121
A+ A1 5,170 South Carolina State Public Service Authority Revenue Refunding Bonds,
Series C, 3.80% due 1/01/1997 4,951
Texas--9.5% AAA Aaa 4,880 Austin, Texas, Utility System Revenue Refunding Bonds, Series A,
Prior Lien, 4.80% due 11/15/1995(d) 4,861
Brazos, Texas, Higher Education Authority Incorporated, Student Loan
Revenue Refunding Bonds, AMT:
NR* Aaa 2,200 Senior Lien, Series A-2, 5.45% due 6/01/1998 2,163
NR* Aaa 2,250 Series A-1, 5% due 12/01/1996 2,222
NR* Aa 2,000 Series C-1, 5% due 11/01/1995 1,989
NR* Aa 5,455 Series C-1, 5.60% due 11/01/1997 5,412
<PAGE> NR* A1 950 Fort Bend County, Texas, IDR, Corporate, Refunding (Frito Lay
Incorporated Project), 4% due 10/01/1996 923
NR* A1 3,650 Fort Bend County, Texas, PCR, Corporate, IDR, Refunding (Frito Lay
Incorporated Project), 4% due 10/01/1996 3,547
Harris County, Texas, Health Facilities Development Corporation,
Hospital Revenue Bonds, VRDN(b):
A1+ NR* 1,800 (Methodist Hospital), 5% due 12/01/2025 1,800
A1+ NR* 200 (Saint Luke's Episcopal Hospital), Series C, 5% due 2/15/2016 200
AAA Aaa 9,500 Houston, Texas, Water and Sewer System, Revenue Refunding Bonds,
Junior Lien, Series D, 5.55% due 12/01/1995 (f) 9,522
Panhandle-Plains, Texas, Higher Education Authority Incorporated,
Student Loan Revenue Refunding Bonds (Student Loan Marketing
Association):
NR* VMIG1 6,000 Series A, 3.65% due 3/01/1995 5,990
NR* Aaa 2,000 Series C, 3.95% due 9/01/1996 1,943
NR* Aaa 2,675 Series C, 4.15% due 9/01/1997 2,555
San Antonio, Texas, Electric and Gas Revenue Refunding Bonds,
Junior Lien, Series A:
AA Aa1 9,000 5.80% due 2/01/1995 9,000
AA Aa1 3,000 6% due 2/01/1996 3,021
Texas State Public Finance Authority Revenue Bonds, GO:
AA Aa 3,000 Series A, 6% due 10/01/1995 3,019
AA Aa 4,445 Series B, 8% due 10/01/1997 4,738
AAA Aaa 4,770 Texas State Public Property Finance Corporation, Revenue Refunding
Bonds (Mental and Health Retardation), 4.25% due 9/01/1995 4,723
SP-1+ MIG1++ 6,200 Texas State, TRAN, UT, 5% due 8/31/1995 6,211
AAA Aa 1,500 Texas Water Development Board Revenue Bonds
(State Revolving Fund--Senior Lien), 4.35% due 7/15/1995 1,491
Utah--3.9% NR* NR* 24,243 Carbon County, Utah, Solid Waste Disposal Revenue Refunding Bonds
(East Carbon Landfill Project), AMT, 6.04% due 5/01/1997 24,455
Intermountain Power Agency, Utah, Power Supply Revenue
Refunding Bonds:
AA Aa 1,250 Series A, 3.90% due 7/01/1996 1,220
AA Aa 4,250 Series B, 4.60% due 7/01/1995 4,246
AA- NR* 1,715 University of Utah, Revenue Refunding Bonds
(University Hospital Project), Series A, 5% due 5/15/1995 1,717
Virginia--2.1% AAA Aa2 1,500 Peninsula Ports Authority Virginia, Port Facility Revenue
Refunding Bonds (Shell Oil Company), UPDATES, Series A,
4.15% due 12/01/2005(b) 1,500
NR* Aaa 2,000 Virginia Education Loan Authority, Revenue Refunding Bonds
(Guaranteed Student Loan Program), Senior--Series E, 4.625%
due 3/01/1995 1,995
AAA Aaa 2,500 Virginia Port Authority Facilities, Revenue Refunding Bonds,
5% due 7/01/1995(c) 2,505
Virginia State Housing Development Authority, Commonwealth Mortgage
Revenue Bonds, AMT, Series B, Sub Series B-1:
AA+ Aa1 5,400 5.30% due 1/01/1995 5,400
AA+ Aa1 2,975 5.50% due 1/01/1996 2,974
AA Aa 1,500 Virginia State Public Building Authority, Building Revenue Bonds,
Series C, 3.95% due 8/01/1995 1,487
<PAGE>
Washington--5.2% Port Seattle, Washington, Revenue Refunding Bonds:
AA- A1 1,075 Series A, 4.25% due 4/01/1996 1,056
AA- A1 3,000 Series B, 4% due 11/01/1995 2,959
AA Aa 7,250 Washington State, GO, UT, Series R-93-B-1, 4.125% due 10/01/1997 6,957
Washington State Public Power Supply System, Revenue Refunding Bonds,
Series A:
AA Aa 8,000 (Nuclear Project No. 1) 4.20% due 7/01/1995 7,974
AA Aa 6,275 (Nuclear Project No. 2), 4.20% due 7/01/1995(g) 6,251
AA Aa 2,000 (Nuclear Project No. 2), 3.50% due 7/01/1996 1,916
AA Aa 4,890 (Nuclear Project No. 2), 3.75% due 7/01/1997 4,576
AAA Aaa 9,200 Washington State, Refunding, UT, Series 86-D, 8% due 9/01/1996(a) 9,615
Wisconsin--2.0% AA Aa 3,500 Milwaukee County, Wisconsin, Metropolitan Sewer District Revenue
Bonds, UT, Series A, 5.25% due 9/01/1995 3,500
NR* NR* 8,000 Waukensha, Wisconsin, School District, TRAN, 4.75% due 10/24/1995 7,984
Wisconsin Housing and EDA, Housing Revenue Refunding Bonds,
Series C:
A A1 2,200 3.60% due 11/01/1995 2,154
A A1 2,795 4.30% due 11/01/1997 2,649
Wyoming--0.3% Lincoln County, Wyoming, PCR (Exxon Project), DATES, VRDN,
Series B(b):
A1+ P1 1,800 5% due 11/01/2014 1,800
A1+ P1 900 5.10% due 11/01/2014 900
Total Investments (Cost--$818,971)--100.7% 809,888
Liabilities in Excess of Other Assets--(0.7%) (5,361)
---------
Net Assets--100.0% $ 804,527
=========
<FN>
(a)Prerefunded.
(b)The interest rate is subject to change periodically based upon the
prevailing market rate. The interest rate shown is the rate in effect at
December 31, 1994.
(c)AMBAC Insured.
(d)MBIA Insured.
(e)FSA Insured.
(f)FGIC Insured.
(g)Escrowed to maturity.
(h)The interest rate is subject to change periodically and inversely based
upon prevailing market rates. The interest rate shown is the rate in
effect at December 31, 1994.
++Highest short-term rating by Moody's Investors Service, Inc.
*Not Rated.
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF ASSETS AND LIABILITIES
<CAPTION>
Limited
Insured National Maturity
As of December 31, 1994 Portfolio Portfolio Portfolio
<S> <C> <C> <C> <C>
Assets: Investments, at value* (Note 1a) $2,444,912,563 $1,461,845,703 $809,887,905
Cash 433,069 47,412 577,762
Receivables:
Interest 45,744,439 27,239,002 11,854,124
Capital shares sold 2,850,227 1,815,512 724,600
Prepaid registration fees and other assets (Note 1e) 76,710 55,688 39,846
-------------- -------------- ------------
Total assets 2,494,017,008 1,491,003,317 823,084,237
Liabilities: Payables:
Dividends to shareholders (Note 1f) 31,934,743 20,995,599 1,443,584
Capital shares redeemed 11,531,082 8,761,927 12,140,630
Securities purchased 5,000,000 5,015,659 4,554,193
Investment adviser (Note 2) 796,889 632,683 250,105
Distributor (Note 2) 514,834 274,868 51,266
Accrued expenses and other liabilities 522,785 326,255 117,025
-------------- -------------- ------------
Total liabilities 50,300,333 36,006,991 18,556,803
Net Assets: Net assets $2,443,716,675 $1,454,996,326 $804,527,434
============== ============== ============
Net Assets Class A Common Stock, $0.10 par value++ $22,560,102 $ 11,091,123 $ 6,536,683
Consist of: Class B Common Stock, $0.10 par value++++ 10,134,641 4,277,522 1,605,184
Class C Common Stock, $0.10 par value+++ 19,212 15,516 13,708
Class D Common Stock, $0.10 par value+++++ 180,984 103,727 80,113
Paid-in capital in excess of par 2,506,538,624 1,555,735,110 811,843,411
Accumulated realized capital losses--net (Note 5) (52,929,833) (64,439,787) (6,468,522)
Unrealized depreciation on investments--net (42,787,055) (51,786,885) (9,083,143)
-------------- -------------- ------------
Net assets $2,443,716,675 $1,454,996,326 $804,527,434
============== ============== ============
<PAGE>
Net Asset Class A:
Value: Net assets $1,676,326,319 $1,042,031,353 $638,537,386
============== ============== ============
Shares outstanding 225,601,022 110,911,231 65,366,838
============== ============== ============
Net asset value and redemption price per share $ 7.43 $ 9.40 $ 9.77
============== ============== ============
Class B:
Net assets $ 752,513,580 $ 401,760,721 $156,825,209
============== ============== ============
Shares outstanding 101,346,414 42,775,225 16,051,844
============== ============== ============
Net asset value and redemption price per share $ 7.43 $ 9.39 $ 9.77
============== ============== ============
Class C:
Net assets $ 1,427,438 $ 1,457,962 $ 1,338,824
============== ============== ============
Shares outstanding 192,123 155,164 137,078
============== ============== ============
Net asset value and redemption price per share $ 7.43 $ 9.40 $ 9.77
============== ============== ============
Class D:
Net assets $ 13,449,338 $ 9,746,290 $ 7,826,015
============== ============== ============
Shares outstanding 1,809,838 1,037,270 801,133
============== ============== ============
Net asset value and redemption price per share $ 7.43 $ 9.40 $ 9.77
============== ============== ============
<FN>
*Identified cost $2,487,699,618 $1,513,632,588 $818,971,048
++Authorized shares--Class A 500,000,000 375,000,000 150,000,000
++++Authorized shares--Class B 375,000,000 375,000,000 150,000,000
+++Authorized shares--Class C 375,000,000 375,000,000 150,000,000
+++++Authorized shares--Class D 500,000,000 375,000,000 150,000,000
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENT OF OPERATIONS
<CAPTION>
<PAGE> Limited
Insured National Maturity
For the Six Months Ended December 31, 1994 Portfolio Portfolio Portfolio
<S> <S> <C> <C> <C>
Investment Interest and amortization of premium and discount earned $ 84,372,133 $ 52,903,524 $ 19,331,164
Income -------------- -------------- ------------
(Note 1d):
Expenses: Investment advisory fees (Note 2) 4,856,153 3,838,274 1,506,902
Distribution fees--Class B (Note 2) 3,126,059 1,661,882 273,887
Transfer agent fees--Class A (Note 2) 329,441 258,927 101,134
Transfer agent fees--Class B (Note 2) 181,085 118,525 29,486
Custodian fees 108,865 77,672 39,840
Accounting services (Note 2) 86,147 73,090 49,762
Printing and shareholder reports 89,800 53,516 27,325
Registration fees (Note 1e) 37,158 41,925 42,892
Professional fees 34,660 30,263 12,397
Pricing services 21,223 16,242 14,832
Portfolio insurance 16,196 8,468 2,344
Directors' fees and expenses 11,562 9,857 3,596
Account maintenance fees--Class D (Note 2) 1,412 2,668 729
Distribution fees--Class C (Note 2) 1,022 1,144 195
Other 4,682 5,630 --
-------------- -------------- ------------
Total expenses 8,905,465 6,198,083 2,105,321
-------------- -------------- ------------
Investment income--net 75,466,668 46,705,441 17,225,843
-------------- -------------- ------------
Realized & Realized loss on investments (52,929,371) (60,693,788) (1,274,753)
Unrealized Gain Change in unrealized appreciation/depreciation on
(Loss) on investments--net (55,102,989) (15,325,599) (7,695,549)
Investments--Net -------------- -------------- ------------
(Notes 1b, Net Increase (Decrease) in Net Assets
1d & 3): Resulting from Operations $ (32,565,692) $ (29,313,946) $ 8,255,541
============== ============== ============
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
Insured Portfolio National Portfolio Limited Maturity Portfolio
For the Six For the For the Six For the For the Six For the
Increase (Decrease) Months Ended Year Ended Months Ended Year Ended Months Ended Year Ended
in Net Assets: Dec. 31, 1994 June 30, 1994 Dec. 31, 1994 June 30, 1994 Dec. 31, 1994 June 30, 1994
<S> <C> <C> <C> <C> <C> <C> <C>
Operations: Investment income--net $ 75,466,668 $ 163,942,349 $ 46,705,441 $ 98,848,832 $ 17,225,843 $ 36,430,985
Realized gain (loss) on
investments--net (52,929,371) 80,935,129 (60,693,788) 62,008,845 (1,274,753) (968,336)
Change in unrealized
appreciation/deprecia-
tion on investments--net (55,102,989) (275,252,365) (15,325,599) (172,722,080) (7,695,549) (13,063,534)
-------------- -------------- ------------- -------------- ------------ ------------
Net increase (decrease)
in net assets resulting
from operations (32,565,692) (30,374,887) (29,313,946) (11,864,403) 8,255,541 22,399,115
-------------- -------------- ------------- -------------- ------------ ------------
Dividends & Investment income--net:
Distribu- Class A (54,388,789) (119,441,701) (35,013,271) (75,680,507) (14,464,308) (31,987,779)
tions to Class B (21,037,707) (44,500,648) (11,618,503) (23,168,325) (2,728,823) (4,443,206)
Shareholders Class C (6,803) -- (8,025) -- (4,885) --
(Note 1f): Class D (33,369) -- (65,642) -- (27,827) --
Realized gain on
investments--net:
Class A (31,614,511) (57,171,047) (23,097,818) (36,128,677) -- --
Class B (14,155,831) (24,972,443) (8,776,286) (12,798,152) -- --
Class C (23,608) -- (30,111) -- -- --
Class D (104,611) -- (194,503) -- -- --
-------------- -------------- ------------- -------------- ------------ ------------
Net decrease in net
assets resulting from
dividends and distri-
butions to shareholders (121,365,229) (246,085,839) (78,804,159) (147,775,661) (17,225,843) (36,430,985)
-------------- -------------- ------------- -------------- ------------ ------------
Capital Share Net increase (decrease)
Transactions in net assets derived
(Note 4): from capital share
transactions (210,286,665) (52,099,956) (99,235,469) 44,114,517 (122,179,033) 7,793,356
-------------- -------------- ------------- -------------- ------------ ------------
Net Assets: Total decrease in net
assets (364,217,586) (328,560,682) (207,353,574) (115,525,547) (131,149,335) (6,238,514)
Beginning of period 2,807,934,261 3,136,494,943 1,662,349,900 1,777,875,447 935,676,769 941,915,283
-------------- -------------- ------------- -------------- ------------ ------------
End of period $2,443,716,675 $2,807,934,261 $1,454,996,326 $1,662,349,900 $804,527,434 $935,676,769
============== ============== ============== ============== ============ ============
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
<CAPTION>
Insured Portfolio
Class A
The following per share data and ratios For the Six
have been derived from information provided Months
in the financial statements. Ended
Dec. 31, For the Year Ended June 30,
Increase (Decrease) in Net Asset Value: 1994 1994 1993 1992 1991
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 7.88 $ 8.64 $ 8.26 $ 7.92 $ 7.86
Operating ----------- ----------- ----------- ----------- -----------
Performance: Investment income--net .24 .47 .50 .52 .54
Realized and unrealized gain (loss) on
investments--net (.31) (.53) .49 .41 .12
----------- ----------- ----------- ----------- -----------
Total from investment operations (.07) (.06) .99 .93 .66
----------- ----------- ----------- ----------- -----------
Less dividends and distributions:
Investment income--net (.24) (.47) (.50) (.52) (.54)
Realized gain on investments--net (.14) (.23) (.11) (.07) (.06)
----------- ----------- ----------- ----------- -----------
Total dividends and distributions (.38) (.70) (.61) (.59) (.60)
----------- ----------- ----------- ----------- -----------
Net asset value, end of period $ 7.43 $ 7.88 $ 8.64 $ 8.26 $ 7.92
=========== =========== =========== =========== ===========
Total Investment Based on net asset value per share (1.00%)+++ (1.08%) 12.43% 12.11% 8.84%
Return:** =========== =========== =========== =========== ===========
Ratios to Average Expenses 42%* .42% .42% .44% .45%
Net Assets: =========== =========== =========== =========== ===========
Investment income--net 5.80%* 5.53% 5.94% 6.44% 6.90%
=========== =========== =========== =========== ===========
Supplemental Net assets, end of period (in thousands) $ 1,676,326 $ 1,941,741 $ 2,225,188 $ 2,062,591 $ 1,984,307
Data: =========== =========== =========== =========== ===========
Portfolio turnover 14.83% 28.34% 43.86% 22.50% 33.12%
=========== =========== =========== =========== ===========
<PAGE>
<CAPTION>
Insured Portfolio
Class B
The following per share data and ratios For the Six
have been derived from information provided Months
in the financial statements. Ended
Dec. 31, For the Year Ended June 30,
Increase (Decrease) in Net Asset Value: 1994 1994 1993 1992 1991
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 7.87 $ 8.63 $ 8.26 $ 7.92 $ 7.86
Operating ----------- ----------- ----------- ----------- -----------
Performance: Investment income--net .21 .40 .44 .46 .48
Realized and unrealized gain (loss) on
investments--net (.30) (.53) .48 .41 .12
----------- ----------- ----------- ----------- -----------
Total from investment operations (.09) (.13) .92 .87 .60
----------- ----------- ----------- ----------- -----------
Less dividends and distributions:
Investment income--net (.21) (.40) (.44) (.46) (.48)
Realized gain on investments--net (.14) (.23) (.11) (.07) (.06)
----------- ----------- ----------- ----------- -----------
Total dividends and distributions (.35) (.63) (.55) (.53) (.54)
----------- ----------- ----------- ----------- -----------
Net asset value, end of period $ 7.43 $ 7.87 $ 8.63 $ 8.26 $ 7.92
----------- ----------- ----------- ----------- -----------
Total Investment Based on net asset value per share (1.28%)+++ (1.81%) 11.45% 11.27% 8.02%
Return:** =========== =========== =========== =========== ===========
Ratios to Average Expenses, excluding distribution and
Net Assets: account maintenance fees .43%* .42% .43% .44% .45%
=========== =========== =========== =========== ===========
Expenses 1.18%* 1.17% 1.18% 1.19% 1.20%
=========== =========== =========== =========== ===========
Investment income--net 5.05%* 4.78% 5.17% 5.69% 6.13%
=========== =========== =========== =========== ===========
Supplemental Net assets, end of period
Data: (in thousands) $ 752,514 $ 866,193 $ 911,307 $ 706,016 $ 537,755
=========== =========== =========== =========== ===========
Portfolio turnover 14.83% 28.34% 43.86% 22.50% 33.12%
=========== =========== =========== =========== ===========
<FN>
*Annualized.
**Total investment returns exclude the effects of sales loads.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS (continued)
<CAPTION>
Insured Portfolio
The following per share data and ratios have been derived For the Period
from information provided in the financial statements. October 21, 1994++ to
December 31, 1994
Increase (Decrease) in Net Asset Value: Class C Class D
<S> <C> <C>
Per Share Net asset value, beginning of period $ 7.68 $ 7.68
Operating ----------- -----------
Performance: Investment income--net .08 .08
Realized and unrealized gain (loss) on investments--net (.11) (.11)
----------- -----------
Total from investment operations (.03) (.03)
----------- -----------
Less dividends and distributions:
Investment income--net (.08) (.08)
Realized gain on investments--net (.14) (.14)
----------- -----------
Total dividends and distributions (.22) (.22)
----------- -----------
Net asset value, end of period $ 7.43 $ 7.43
=========== ===========
Total Investment Based on net asset value per share (.41%)+++ (.30%)+++
Return:** =========== ===========
Ratios to Average Expenses, excluding distribution and account maintenance fees .45%* .43%*
Net Assets: =========== ===========
Expenses 1.25%* .68%*
=========== ===========
Investment income--net 5.32%* 5.91%*
=========== ===========
Supplemental Net assets, end of period (in thousands) $ 1,427 $ 13,449
Data: =========== ===========
Portfolio turnover 14.83% 14.83%
=========== ===========
<PAGE>
<CAPTION>
National Portfolio
Class A
The following per share data and ratios For the Six
have been derived from information provided Months
in the financial statements. Ended
Dec. 31, For the Year Ended June 30,
Increase (Decrease) in Net Asset Value: 1994 1994 1993 1992 1991
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 10.08 $ 11.02 $ 10.64 $ 10.17 $ 10.12
Operating ----------- ----------- ----------- ----------- -----------
Performance: Investment income--net .30 .62 .67 .71 .73
Realized and unrealized gain (loss) on
investments--net (.47) (.64) .57 .58 .05
----------- ----------- ----------- ----------- -----------
Total from investment operations (.17) (.02) 1.24 1.29 .78
----------- ----------- ----------- ----------- -----------
Less dividends and distributions:
Investment income--net (.30) (.62) (.67) (.71) (.73)
Realized gain on investments--net (.21) (.30) (.19) (.11) --
----------- ----------- ----------- ----------- -----------
Total dividends and distributions (.51) (.92) (.86) (.82) (.73)
----------- ----------- ----------- ----------- -----------
Net asset value, end of period $ 9.40 $ 10.08 $ 11.02 $ 10.64 $ 10.17
=========== =========== =========== =========== ===========
Total Investment Based on net asset value per share (1.74%)+++ (.47%) 12.21% 13.09% 7.94%
Return:** =========== =========== =========== =========== ===========
Ratios to Average Expenses .56%* .55% .55% .55% .55%
Net Assets: =========== =========== =========== =========== ===========
Investment income--net 6.00%* 5.72% 6.23% 6.80% 7.20%
=========== =========== =========== =========== ===========
Supplemental Net assets, end of period (in thousands) $ 1,042,031 $ 1,203,181 $ 1,353,805 $ 1,278,055 $ 1,255,820
Data: =========== =========== =========== =========== ===========
Portfolio turnover 34.26% 73.33% 65.43% 50.94% 75.25%
=========== =========== =========== =========== ===========
<PAGE>
<CAPTION>
National Portfolio
Class B
The following per share data and ratios For the Six
have been derived from information provided Months
in the financial statements. Ended
Dec. 31, For the Year Ended June 30,
Increase (Decrease) in Net Asset Value: 1994 1994 1993 1992 1991
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 10.07 $ 11.02 $ 10.63 $ 10.16 $ 10.11
Operating ----------- ----------- ----------- ----------- -----------
Performance: Investment income--net .26 .54 .59 .63 .65
Realized and unrealized gain (loss)
on investments--net (.47) (.65) .58 .58 .05
----------- ----------- ----------- ----------- -----------
Total from investment operations (.21) (.11) 1.17 1.21 .70
----------- ----------- ----------- ----------- -----------
Less dividends and distributions:
Investment income--net (.26) (.54) (.59) (.63) (.65)
Realized gain on investments--net (.21) (.30) (.19) (.11) --
----------- ----------- ----------- ----------- -----------
Total dividends and distributions (.47) (.84) (.78) (.74) (.65)
----------- ----------- ----------- ----------- -----------
Net asset value, end of period $ 9.39 $ 10.07 $ 11.02 $ 10.63 $ 10.16
=========== =========== =========== =========== ===========
Total Investment Based on net asset value per share (2.05%)+++ (1.39%) 11.47% 12.25% 7.14%
Return:** =========== =========== =========== =========== ===========
Ratios to Average Expenses, excluding distribution and
Net Assets: account maintenance fees .57%* .55% .56% .56% .56%
=========== =========== =========== =========== ===========
Expenses 1.32%* 1.30% 1.31% 1.31% 1.31%
=========== =========== =========== =========== ===========
Investment income--net 5.24%* 4.97% 5.46% 6.03% 6.43%
=========== =========== =========== =========== ===========
Supplemental Net assets, end of period (in thousands) $ 401,761 $ 459,169 $ 424,071 $ 286,375 $ 213,581
Data: =========== =========== =========== =========== ===========
Portfolio turnover 34.26% 73.33% 65.43% 50.94% 75.25%
=========== =========== =========== =========== ===========
<FN>
*Annualized.
**Total investment returns exclude the effects of sales loads.
++Commencement of Operations.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS (concluded)
<CAPTION>
National Portfolio
The following per share data and ratios have been derived For the Period
from information provided in the financial statements. October 21, 1994++ to
December 31, 1994
Increase (Decrease) in Net Asset Value: Class C Class D
Per Share
Operating
Performance: Net asset value, beginning of period $ 9.85 $ 9.85
Investment income--net .10 .11
Realized and unrealized gain (loss) on investments--net (.24) (.24)
Total from investment operations (.14) (.13)
Less dividends and distributions:
Investment income--net (.10) (.11)
Realized gain on investments--net (.21) (.21)
Total dividends and distributions (.31) (.32)
Net asset value, end of period $ 9.40 $ 9.40
Total Investment
Return:** Based on net asset value per share (1.39%)++++ (1.29%)++++
Ratios to Average
Net Assets: Expenses, excluding distribution and account maintenance fees .58%* .57%*
Expenses 1.38%* .82%*
Investment income--net 5.61%* 6.15%*
Supplemental
Data: Net assets, end of period (in thousands) $ 1,458 $ 9,746
Portfolio turnover 34.26% 34.26%
<CAPTION>
Limited Maturity Portfolio
Class A
The following per share data and ratios For the Six
have been derived from information provided Months
in the financial statements. Ended
Dec. 31, For the Year Ended June 30,
Increase (Decrease) in Net Asset Value: 1994 1994 1993 1992 1991
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 9.87 $ 10.01 $ 9.91 $ 9.75 $ 9.71
Operating ----------- ----------- ----------- ----------- -----------
Performance: Investment income--net .19 .37 .41 .50 .57
Realized and unrealized gain (loss)
on investments--net (.10) (.14) .10 .16 .04
<PAGE> ----------- ----------- ----------- ----------- -----------
Total from investment operations .09 .23 .51 .66 .61
----------- ----------- ----------- ----------- -----------
Less dividends:
Investment income--net (.19) (.37) (.41) (.50) (.57)
----------- ----------- ----------- ----------- -----------
Net asset value, end of period $ 9.77 $ 9.87 $ 10.01 $ 9.91 $ 9.75
=========== =========== =========== =========== ===========
Total Investment Based on net asset value per share .95%+++ 2.30% 5.28% 6.93% 6.45%
Return:** =========== =========== =========== =========== ===========
Ratios to Average Expenses .40%* .40% .41% .40% .40%
Net Assets: =========== =========== =========== =========== ===========
Investment income--net 3.84%* 3.68% 4.13% 5.02% 5.88%
=========== =========== =========== =========== ===========
Supplemental Net assets, end of period (in thousands) $ 638,537 $ 790,142 $ 846,736 $ 613,407 $ 350,549
Data: =========== =========== =========== =========== ===========
Portfolio turnover 10.00% 45.67% 65.43% 96.32% 93.06%
=========== =========== =========== =========== ===========
<CAPTION>
Limited Maturity Portfolio
Class B
The following per share data and ratios For the Six For the For the
have been derived from information Months Year Period For the Period
provided in the financial statements. Ended Ended Nov. 2, 1992++ October 21, 1994++
Dec. 31, June 30, to June 30, to December 31, 1994
Increase (Decrease) in Net Asset Value: 1994 1994 1993 Class C Class D
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 9.87 $ 10.01 $ 9.93 $ 9.83 $ 9.83
Operating ----------- ----------- ----------- ----------- -----------
Performance: Investment income--net .17 .33 .24 .07 .07
Realized and unrealized gain (loss)
on investments--net (.10) (.14) .08 (.06) (.06)
----------- ----------- ----------- ----------- -----------
Total from investment operations .07 .19 .32 .01 .01
----------- ----------- ----------- ----------- -----------
Less dividends:
Investment income--net (.17) (.33) (.24) (.07) (.07)
----------- ----------- ----------- ----------- -----------
Net asset value, end of period $ 9.77 $ 9.87 $ 10.01 $ 9.77 $ 9.77
=========== =========== =========== =========== ===========
Total Investment Based on net asset value per share .75%+++ 1.98% 3.26%+++ .11%+++ .13%+++
Return:** =========== =========== =========== =========== ===========
Ratios to Average Expenses, excluding distribution and
Net Assets: account maintenance fees .41%* .41% .41%* .44%* .41%*
=========== =========== =========== =========== ===========
Expenses .76%* .76% .76%* .59%* .51%*
=========== =========== =========== =========== ===========
Investment income--net 3.49%* 3.33% 3.60%* 3.76%* 3.82%*
=========== =========== =========== =========== ===========
Supplemental Net assets, end of period (in thousands) $ 156,825 $ 145,534 $ 95,179 $ 1,339 $ 7,826
Data: =========== =========== =========== =========== ===========
Portfolio turnover 10.00% 45.67% 65.43% 10.00% 10.00%
=========== =========== =========== =========== ===========
<FN>
*Annualized.
**Total investment returns exclude the effects of sales loads.
+++Aggregate total investment return.
++Commencement of Operations.
See Notes to Financial Statements.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
Merrill Lynch Municipal Bond Fund, Inc. (the "Fund") is registered
under the Investment Company Act of 1940 as a diversified, open-end
management investment company. These unaudited interim finan-
cial statements reflect all adjustments which are, in the opinon of
management, necessary to a fair statement of the results for the
interim period presented. All such adjustments are of a normal
recurring nature. The Fund's Portfolios offer four classes of shares
under the Merrill Lynch Select Pricing SM System. Shares of Class A
and Class D are sold with a front-end sales charge. Shares of Class B
and Class C may be subject to a contingent deferred sales charge. All
classes of shares have identical voting, dividend, liquidation and
other rights and the same terms and conditions, except that Class B,
Class C and Class D Shares bear certain expenses related to the
account maintenance of such shares, and Class B and Class C Shares
also bear certain expenses related to the distribution of such shares.
Each class has exclusive voting rights with respect to matters relating
to its account maintenance and distribution expenditures. The
following is a summary of significant accounting policies followed
by the Fund.
(a) Valuation of investments--Insured Portfolio: Where bonds in the
Portfolio have not been insured pursuant to policies obtained by the
issuer, the Fund has obtained insurance with respect to the payment
of interest and principal of each bond. Such insurance is valid as
long as the bonds are held by the Fund.
All Portfolios: Municipal bonds and money market securities are
traded primarily in the over-the-counter markets and are valued at
the most recent bid price or yield equivalent as obtained from dealers
that make markets in such securities. Positions in futures contracts
are valued at closing prices as of the close of such exchanges. Options,
which are traded on exchanges, are valued at their last sale price
as of the close of such exchanges or, lacking any sales, at the last
available bid price. Assets for which market quotations are not
readily available are valued at fair value on a consistent basis using
methods determined in good faith by the Fund's Board of Directors,
including valuations furnished by a pricing service retained by the
Fund, which may utilize a matrix system for valuations.
(b) Derivative financial instruments--The Fund may engage in
various portfolio strategies to seek to increase its return by hedging
its portfolio against adverse movements in the debt markets. Losses
may arise due to changes in the value of the contract or if the
counterparty does not perform under the contract.
* Financial futures contracts--The National and Limited Maturity
Portfolios ("the Portfolios") may purchase or sell interest rate
futures contracts and options on such futures contracts for the
purpose of hedging the market risk on existing securities or the
intended purchase of securities. Futures contracts are contracts for
delayed delivery of securities at a specific future date and at a
specific price or yield. Upon entering into a contract, the Portfolios
deposit and maintain as collateral such initial margin as required
by the exchange on which the transaction is effected. Pursuant to
the contract, the Portfolios agree to receive from or pay to the broker
an amount of cash equal to the daily fluctuation in value of the
contract. Such receipts or payments are known as variation margin
and are recorded by the Portfolios as unrealized gains or losses.
When the contract is closed, the Portfolios record a realized gain
or loss equal to the difference between the value of the contract
at the time it was opened and the value at the time it was closed.
(c) Income taxes--It is the Fund's policy to comply with the require-
ments of the Internal Revenue Code applicable to regulated invest-
ment companies and to distribute substantially all of its taxable
income to its shareholders. Therefore, no Federal income tax
provision is required.
<PAGE>
(d) Security transactions and investment income--Security trans-
actions are recorded on the dates the transactions are entered into
(the trade dates). Interest income is recognized on the accrual
basis. Discounts and market premiums are amortized into interest
income. Realized gains and losses on security transactions are deter-
mined on the identified cost basis.
(e) Prepaid registration fees--Prepaid registration fees are charged
to expense as the related shares are issued.
(f) Dividends and distributions--Dividends from net investment
income are declared daily and paid monthly. Distributions of capital
gains are recorded on the ex-dividend dates.
2. Investment Advisory Agreement and Transactions
with Affiliates:
The Fund has entered into an Investment Advisory Agreement
with Fund Asset Management, L.P. ("FAM"). The general partner of
FAM is Princeton Services, Inc. ("PSI"), an indirect wholly-owned
subsidiary of Merrill Lynch & Co., Inc. ("ML & Co."), which is the
limited partner. The Fund has also entered into a Distribution
Agreement and Distribution Plans with Merrill Lynch Funds
Distributor, Inc. ("MLFD" or "Distributor"), a wholly-owned sub-
sidiary of Merrill Lynch Group, Inc.
FAM is responsible for the management of the Fund's portfolios
and provides the necessary personnel, facilities, equipment and
certain other services necessary to the operation of the Fund. For
such services, FAM receives at the end of each month a fee with
respect to each Portfolio at the annual rates set forth below which
are based upon the average daily value of the Fund's net assets.
Rate of Advisory Fee
Aggregate of Average Daily Limited
Net Assets of the Three Insured National Maturity
Combined Portfolios Portfolio Portfolio Portfolio
Not exceeding $250 million .40 % .50 % .40 %
In excess of $250 million
but not exceeding $400 million .375 .475 .375
In excess of $400 million
but not exceeding $550 million .375 .475 .35
In excess of $550 million
but not exceeding $1.5 billion .375 .475 .325
In excess of $1.5 billion .35 .475 .325
<PAGE>
The Investment Advisory Agreement obligates FAM to reimburse
the Fund to the extent that the Fund's expenses (excluding interest,
taxes, distribution fees, brokerage fees and commissions and extra-
ordinary items) exceed 2.5% of the Fund's first $30 million of average
daily net assets, 2.0% of the Fund's 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 FAM with respect to any Portfolio
during any fiscal year which will cause the expenses of such Portfolio
to exceed the pro rata expense limitation applicable to such Portfolio
at the time of such payment.
Pursuant to the distribution plans ("the Distribution Plans") adopted
by the Fund in accordance with Rule 12b-1 under the Investment
Company Act of 1940, the Fund pays the Distributor ongoing account
maintenance and distribution fees. The Distributor voluntarily did
not collect any Class C distribution fees in the Limited Maturity
Portfolio until January 10, 1995. The fees are accrued daily and
paid monthly at annual rates based upon the average daily net
assets of the shares as follows:
Account Maintenance Fees Distribution Fees
Insured National Limited Insured National Limited
Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio
Class B .25% .25% .15% .50% .50% .20%
Class C .25% .25% .15% .55% .55% .20%
Class D .25% .25% .10% -- -- --
Pursuant to a sub-agreement with the Distributor, Merrill Lynch,
Pierce, Fenner & Smith Inc. ("MLPF&S"), a subsidiary of ML & Co.,
also provides account maintenance and distribution services to the
Fund. The ongoing account maintenance fee compensates the
Distributor and MLPF&S for providing account maintenance services
to Class B, Class C and Class D shareholders. The ongoing distribu-
tion fee compensates the Distributor and MLPF&S for providing
shareholder and distribution-related services to Class B and Class C
shareholders.
For the six months ended December 31, 1994, MLFD earned under-
writing discounts and MLPF&S earned dealer concessions on sales
of the Fund's Class A and Class D Shares as follows:
<PAGE>
Insured National Limited Maturity
Portfolio Portfolio Portfolio
Class A Shares:
MLFD $ 16,247 $ 13,417 $ 7,816
MLPF&S 161,996 130,295 55,464
Class D Shares:
MLFD 3,095 2,490 185
MLPF&S 26,295 18,678 3,059
MLPF&S received contingent deferred sales charges of $1,905,750
relating to transactions in Class B Shares, amounting to $1,134,503
$544,622 and $226,625 in the Insured, National and Limited
Maturity Portfolios, respectively, and $2,061 relating to transactions
in Class C Shares, amounting to $29 and $2,032 in the Insured and
Limited Maturity Portfolios, respectively.
Financial Data Services, Inc. ("FDS"), a wholly-owned subsidiary
of ML & Co., is the Fund's transfer agent.
Accounting services are provided to the Fund by FAM at cost.
Certain officers and/or directors of the Fund are officers and/or
directors of FAM, MLFD, FDS, PSI, MLPF&S, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the six months ended December 31, 1994, were as follows:
Purchases Sales
Insured Portfolio $359,152,104 $546,666,207
National Portfolio 493,515,857 506,375,476
Limited Maturity Portfolio 75,732,547 260,120,677
Net realized and unrealized losses as of December 31, 1994 were
as follows:
Realized Unrealized
Insured Portfolio Losses Losses
Long-term investments $(52,929,371) $(42,109,448)
Short-term investments -- (677,607)
------------ ------------
Total $(52,929,371) $(42,787,055)
============ ============
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
Realized Unrealized
National Portfolio Losses Losses
Long-term investments $(52,714,560) $(51,732,490)
Short-term investments (481,478) (54,395)
Financial future contracts (7,497,750) --
------------ ------------
Total $(60,693,788) $(51,786,885)
============ ============
Realized Unrealized
Limited Maturity Portfolio Losses Losses
Long-term investments $ (1,166,165) $ (8,597,523)
Short-term investments (108,588) (485,620)
------------ ------------
Total $ (1,274,753) $ (9,083,143)
============ ============
As of December 31, 1994, net unrealized appreciation/depreciation
for Federal income tax purposes were as follows:
Gross Gross Net
Unrealized Unrealized Unrealized
Appreciation Depreciation Depreciation
Insured Portfolio $52,924,554 $(95,711,609) $ (42,787,055)
National Portfolio 19,897,972 (71,684,857) (51,786,885)
Limited Maturity Portfolio 538,975 (9,622,118) (9,083,143)
The aggregate cost of investments at December 31, 1994 for Federal
income tax purposes was $2,487,699,618 for the Insured Portfolio,
$1,513,632,588 for the National Portfolio, and $818,971,048 for the
Limited Maturity Portfolio.
4. Capital Share Transactions:
Net increase (decrease) on net assets derived from capital share
transactions for the six months December 31, 1994 and the year
ended June 30, 1994 was $(210,286,665) and $(52,099,956),
respectively, for the Insured Portfolio; $(99,235,469) and $44,114,517,
respectively, for the National Portfolio and $(122,179,033) and
$7,793,356, respectively, for the Limited Maturity Portfolio.
<PAGE>
Transactions in capital shares for each class were as follows:
Insured Portfolio
Class A Shares for the Six Months Dollar
Ended December 31, 1994 Shares Amount
Shares sold 12,102,677 $ 93,473,833
Shares issued to shareholders in
reinvestment of dividends and
distributions 2,591,184 20,001,276
------------ -------------
Total issued 14,693,861 113,475,109
Shares redeemed (35,527,603) (272,240,723)
------------ -------------
Net decrease (20,833,742) $(158,765,614)
============ =============
Insured Portfolio
Class A Shares for the Year Dollar
Ended June 30, 1994 Shares Amount
Shares sold 33,131,876 $ 280,935,110
Shares issued to shareholders in
reinvestment of dividends and
distributions 9,445,296 80,198,475
------------ -------------
Total issued 42,577,172 361,133,585
Shares redeemed (53,818,184) (453,958,624)
------------ -------------
Net decrease (11,241,012) $ (92,825,039)
============ =============
Insured Portfolio
Class B Shares for the Six Months Dollar
Ended December 31, 1994 Shares Amount
Shares sold 8,741,451 $ 66,638,227
Shares issued to shareholders in
reinvestment of dividends and
distributions 1,168,556 9,008,862
------------ -------------
Total issued 9,910,007 75,647,089
Shares redeemed (18,574,743) (142,049,092)
------------ -------------
Net decrease (8,664,736) $ (66,402,003)
============ =============
<PAGE>
Insured Portfolio
Class B Shares for the Year Dollar
Ended June 30, 1994 Shares Amount
Shares sold 21,671,550 $ 184,351,353
Shares issued to shareholders in
reinvestment of dividends and
distributions 4,290,552 36,402,265
------------ -------------
Total issued 25,962,102 220,753,618
Shares redeemed (21,552,384) (180,028,535)
------------ -------------
Net increase 4,409,718 $ 40,725,083
============ =============
Insured Portfolio
Class C Shares for the Period Dollar
October 21, 1994++ to December 31, 1994 Shares Amount
Shares sold 202,260 $ 1,508,277
Shares issued to shareholders in
reinvestment of dividends and
distributions 146 1,054
------------ -------------
Total issued 202,406 1,509,331
Shares redeemed (10,283) (76,602)
------------ -------------
Net increase 192,123 $ 1,432,729
============ =============
[FN]
++Commencement of Operations.
Insured Portfolio
Class D Shares for the Period Dollar
October 21, 1994++ to December 31, 1994 Shares Amount
Shares sold 2,055,423 $ 15,282,618
Shares issued to shareholders in
reinvestment of dividends and
distributions 160 1,157
------------ -------------
Total issued 2,055,583 15,283,775
Shares redeemed (245,745) (1,835,552)
------------ -------------
Net increase 1,809,838 $ 13,448,223
============ =============
<PAGE>
[FN]
++Commencement of Operations.
National Portfolio
Class A Shares for the Six Months Dollar
Ended December 31, 1994 Shares Amount
Shares sold 2,529,048 $ 25,012,714
Shares issued to shareholders in
reinvestment of dividends and
distributions 3,095,773 29,798,313
------------ -------------
Total issued 5,624,821 54,811,027
Shares redeemed (14,124,427) (137,698,253)
------------ -------------
Net decrease (8,499,606) $ (82,887,226)
============ =============
National Portfolio
Class A Shares for the Year Dollar
Ended June 30, 1994 Shares Amount
Shares sold 8,490,083 $ 92,184,282
Shares issued to shareholders in
reinvestment of dividends and
distributions 5,189,718 56,058,472
------------ -------------
Total issued 13,679,801 148,242,754
Shares redeemed (17,141,264) (182,785,636)
------------ -------------
Net decrease (3,461,463) $ (34,542,882)
============ =============
National Portfolio
Class B Shares for the Six Months Dollar
Ended December 31, 1994 Shares Amount
Shares sold 4,509,969 $ 43,999,400
Shares issued to shareholders in
reinvestment of dividends and
distributions 1,107,106 10,631,219
------------ -------------
Total issued 5,617,075 54,630,619
Shares redeemed (8,425,261) (82,333,730)
------------ -------------
Net decrease (2,808,186) $ (27,703,111)
============ =============
<PAGE>
National Portfolio
Class B Shares for the Year Dollar
Ended June 30, 1994 Shares Amount
Shares sold 14,847,862 $ 161,270,898
Shares issued to shareholders in
reinvestment of dividends and
distributions 1,710,325 18,453,990
------------ -------------
Total issued 16,558,187 179,724,888
Shares redeemed (9,473,731) (101,067,489)
------------ -------------
Net increase 7,084,456 $ 78,657,399
============ =============
National Portfolio
Class C Shares for the Period Dollar
October 21, 1994++ to December 31, 1994 Shares Amount
Shares sold 175,071 $ 1,660,808
Shares issued to shareholders in
reinvestment of dividends and
distributions 2,023 19,010
------------ -------------
Total issued 177,094 1,679,818
Shares redeemed (21,930) (208,212)
------------ -------------
Net increase 155,164 $ 1,471,606
============ =============
[FN]
++Commencement of Operations.
NOTES TO FINANCIAL STATEMENTS (concluded)
National Portfolio
Class D Shares for the Period Dollar
October 21, 1994++ to December 31, 1994 Shares Amount
Shares sold 1,612,258 $ 15,334,320
Shares issued to shareholders in
reinvestment of dividends and
distributions 14,577 132,307
------------ -------------
Total issued 1,626,835 15,466,627
Shares redeemed (589,565) (5,583,365)
------------ -------------
Net increase 1,037,270 $ 9,883,262
============ =============
<PAGE>
[FN]
++Commencement of Operations.
Limited Maturity Portfolio
Class A Shares for the Six Months Dollar
Ended December 31, 1994 Shares Amount
Shares sold 4,068,657 $ 40,048,103
Shares issued to shareholders in
reinvestment of dividends 948,926 9,325,191
------------ -------------
Total issued 5,017,583 49,373,294
Shares redeemed (19,715,595) (193,595,791)
------------ -------------
Net decrease (14,698,012) $(144,222,497)
============ =============
Limited Maturity Portfolio
Class A Shares for the Year Dollar
Ended June 30, 1994 Shares Amount
Shares sold 37,619,639 $ 375,440,124
Shares issued to shareholders in
reinvestment of dividends and
distributions 1,983,800 19,748,994
------------ -------------
Total issued 39,603,439 395,189,118
Shares redeemed (44,144,662) (439,707,786)
------------ -------------
Net decrease (4,541,223) $ (44,518,668)
============ =============
Limited Maturity Portfolio
Class B Shares for the Six Months Dollar
Ended December 31, 1994 Shares Amount
Shares sold 6,171,696 $ 60,642,960
Shares issued to shareholders in
reinvestment of dividends 203,733 2,001,205
------------ -------------
Total issued 6,375,429 62,644,165
Shares redeemed (5,068,501) (49,783,332)
------------ -------------
Net increase 1,306,928 $ 12,860,833
============ =============
<PAGE>
Limited Maturity Portfolio
Class B Shares for the Year Dollar
Ended June 30, 1994 Shares Amount
Shares sold 10,622,252 $ 105,858,053
Shares issued to shareholders in
reinvestment of dividends and
distributions 284,833 2,836,330
------------ -------------
Total issued 10,907,085 108,694,383
Shares redeemed (5,671,375) (56,382,359)
------------ -------------
Net increase 5,235,710 $ 2,312,024
============ =============
Limited Portfolio
Class C Shares for the Period
October 21, 1994++ to Dollar
December 31, 1994 Shares Amount
Shares sold 158,212 $ 1,548,098
Shares issued to shareholders in
reinvestment of dividends 400 3,908
------------ -------------
Total issued 158,612 1,552,006
Shares redeemed (21,534) (210,399)
------------ -------------
Net increase 137,078 $ 1,341,607
============ =============
[FN]
++Commencement of Operations.
Limited Portfolio
Class D Shares for the Period
October 21, 1994++ to Dollar
December 31, 1994 Shares Amount
Shares sold 1,182,373 $ 11,569,137
Shares issued to shareholders in
reinvestment of dividends 1,658 16,205
------------ -------------
Total issued 1,184,031 11,585,342
Shares redeemed (382,898) (3,744,318)
------------ -------------
Net increase 801,133 $ 7,841,024
<PAGE>
[FN]
++Commencement of Operations.
5. Capital Loss Carryforward:
At June 30, 1994, the Fund had a net capital loss carryforward of
approximately $4,250,000 in the Limited Maturity Portfolio, of which
$1,416,000 expires in 1997, $2,787,000 expires in 1998, $22,000
expires in 1999 and $25,000 expires in 2002. These will be available
to offset like amounts of any future taxable gains.