MERRILL LYNCH
MUNICIPAL BOND
FUND, INC.
FUND LOGO
Quarterly Report
March 31, 1995
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
representaion 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
Increasing signs of slowing economic growth led to higher US stock
and bond prices during the March quarter. Although gross domestic
product (GDP) was reported to have increased at a revised 5.1% rate
during the final quarter of 1994, declines in other indicators such
as new home sales and durable goods orders registered thus far in
1995 have led investors to anticipate that the economy is losing
enough momentum to keep inflation under control and preclude further
significant monetary policy tightening by the Federal Reserve Board.
<PAGE>
However, as US stock and bond markets have risen, the value of the
US dollar reached new lows relative to the yen and the Deutschemark.
Persistent trade deficits and exports of capital from the United
States have kept the US currency in a decade-long decline relative
to the Japanese and German currencies. Over the longer term, since
the United States has the highest productivity among industrialized
nations and among the lowest labor costs, demand for US dollar-
denominated assets may improve. However, a reduction of the still-
widening US trade deficit may be necessary before the US dollar
appreciates substantially relative to the yen and the Deutschemark.
The first three months of 1995 were very positive for the US stock
and bond markets. Continued signs of a moderating expansion and well-
contained inflationary pressures would provide further assurance
that the peak in interest rates is behind us, creating a stronger
foundation for higher stock and bond prices. On the other hand,
indications of reaccelerating growth and further significant
monetary policy tightening by the Federal Reserve Board would be a
decided negative for the US financial markets.
The Municipal Market
During the three months ended March 31, 1995, the municipal bond
market rallied strongly, continuing the improvement it showed at the
end of 1994. During the quarter ended March 31, 1995, long-term tax-
exempt revenue bond yields, as measured by the Bond Buyer Revenue
Bond Index, declined almost 70 basis points (0.70%) to 6.29%. Bond
yields declined over 100 basis points from the highs experienced in
November 1994 and are now lower than they were a year ago. US
Treasury bond yields exhibited similar declines in recent months.
Thus far in 1995, the 30-year US Treasury bond yield has fallen
approximately 50 basis points to 7.43%.
Tax-exempt bond yields declined more than their taxable counterparts
so far in 1995 largely because of the dramatic decline in new
municipal bond issuance in recent quarters. During the March 31,
1995 quarter, less than $30 billion in new long-term municipal
securities were issued, representing a 45% decline in issuance
compared to the March 31, 1994 quarter. Similarly, over the past six
months, less than $75 billion in municipal bonds were issued, a
decline of approximately 50% versus the comparable period a year
ago. Issuance was particularly low during January and February with
monthly volume of less than $8 billion. These levels are the lowest
monthly totals since the mid-1980s.
Both institutional and individual investors saw significant cash
inflows in recent months. These cash flows were derived from regular
coupon payment, bond maturities and the proceeds from early bond
calls and redemptions. Investors received approximately $20 billion
in principal redemptions and coupon income during January 1995. With
monthly issuance in the $7 billion--$10 billion range, the current
supply/demand imbalance dominated the municipal market, and bond
prices have risen accordingly. The tax-exempt bond market's
technical position is likely to remain strong throughout most of
this year. We estimate that investor proceeds from all sources will
exceed $200 billion during 1995. Estimates of total bond issuance
for this year continue to be reduced with most estimates currently
in the $125 billion range. Investors should find it increasingly
difficult to replace existing holdings as they mature and reinvest
coupon income in such an environment.
<PAGE>
However, despite their strong technical position, municipal bonds
remain an attractive investment alternative. At current levels, long-
term municipal revenue bonds yield over 84% of the US Treasury
bond's yield. Municipal bond yields are usually considered
attractive whenever the yield ratio exceeds 82%. For example, to an
investor in the 39% Federal income tax bracket, municipal revenue
bonds currently yield in excess of 10% on a tax equivalent basis. As
municipal bonds become increasingly scarce during 1995 and beyond,
currently available tax-exempt bond yields should be attractive to
long-term investors.
Portfolio Strategy
Insured and National Portfolios
We consistently manage the Fund's Insured and National Portfolios to
seek to balance protection of net asset value with a generous
accrual of tax-exempt current income. Over the March quarter, the
very positive technical condition of the municipal marketplace
allowed municipal bond yields to decline, retracing to a halfway
point between the lows of June 1993 and highs of late 1994. The
Portfolios capitalized on this technical position by minimizing
their cash equivalent reserves and purchasing highly liquid, quality
revenue bonds with discounted coupons which will most fully
participate in a declining interest rate environment. Despite the
current positive tone of the municipal debt market, we are now
proceeding with a cautious approach to the future direction of
interest rates. As municipal bonds reach an overvalued relationship
compared to their taxable counterparts, investor demand will start
to recede, making it more difficult for continued price rises. Our
strategy is to sell securities in this overpriced category and
selectively replace them with higher couponed, "cushion" bonds.
These bonds provide high current return with less market price
volatility. Going forward, we will monitor the statistical releases
for the direction of the US economy, and consequently future
interest rate trends.
Limited Maturity Portfolio
On February 1, 1995, the Federal Reserve Board again tightened
monetary policy by raising both the Federal Funds and the discount
rates by 50 basis points to 6% and 5.25%, respectively. This marked
the seventh monetary tightening of the cycle which began on February
4, 1994 and doubled the Federal Funds rate from 3% to 6%. However,
despite this hike in the Federal Funds rate during the quarter,
interest rates on short-term securities fell dramatically over the
period as investors began to believe that the Federal Reserve Board
might have achieved the elusive "soft landing" of economic growth.
Therefore, interest rates on two-year US Treasury notes fell
approximately 85 basis points over the course of the quarter. The
Limited Maturity Portfolio became more aggressively positioned in
January as the higher interest rates seen in December 1994
represented excellent relative value on a historic basis. This was
accomplished by reducing the cash reserves of the Portfolio to
approximately 10% in January and increasing the average portfolio
maturity from approximately 11 months to about one and a half years
by February. Therefore, the Portfolio benefited from the drop in
yields and subsequent price appreciation from this more aggressive
investment position.
<PAGE>
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 the 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
April 26, 1995
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 maintenance
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.
<PAGE>
* 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 maximum
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
Portfolios. 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 redeemed within one year of purchase.
* Class D Shares incur a maximum 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--7. "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 on pages 8 and 9.
The "Recent Performance Results" table 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 March 31, 1995 and
for Class C and Class D Shares for the since inception and 3-month
periods ended March 31, 1995. 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 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. 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.
<PAGE>
Average Annual
Total Return
Insured Portfolio
% Return Without % Return With
Class A Shares* Sales Charge Sales Charge**
Year Ended 3/31/95 +7.18% +2.89%
Five Years Ended 3/31/95 +8.12 +7.24
Ten Years Ended 3/31/95 +9.36 +8.91
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
% Return % Return
Class B Shares* Without CDSC With CDSC**
Year Ended 3/31/95 +6.39% +2.40%
Five Years Ended 3/31/95 +7.33 +7.33
Inception (10/21/88) through 3/31/95 +7.18 +7.18
[FN]
*Maximum contingent deferred sales charge is 4% and is reduced to 0%
after 4 years.
**Assuming payment of applicable contingent deferred sales charge.
National Portfolio
% Return Without % Return With
Class A Shares* Sales Charge Sales Charge**
Year Ended 3/31/95 +6.37% +2.12%
Five Years Ended 3/31/95 +7.97 +7.09
Ten Years Ended 3/31/95 +9.46 +9.02
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
<PAGE>
% Return % Return
Class B Shares* Without CDSC With CDSC**
Year Ended 3/31/95 +5.59% +1.66%
Five Years Ended 3/31/95 +7.16 +7.16
Inception (10/21/88) through 3/31/95 +6.98 +6.98
[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 3/31/95 +3.42% +2.38%
Five Years Ended 3/31/95 +5.08 +4.87
Ten Years Ended 3/31/95 +5.46 +5.35
[FN]
*Maximum sales charge is 1%.
**Assuming maximum sales charge.
% Return % Return
Class B Shares* Without CDSC With CDSC**
Year Ended 3/31/95 +3.09% +2.09%
Inception (11/2/92) through 3/31/95 +3.23 +3.23
[FN]
*Maximum contingent deferred sales charge is 1% and is reduced to 0%
after 1 year.
**Assuming payment of applicable contingent deferred sales charge.
<PAGE>
Aggregate
Total Return
Insured Portfolio
% Return % Return
Class C Shares* Without CDSC With CDSC**
Inception (10/21/94) through 3/31/95 +6.86% +5.86%
[FN]
*Maximum contingent deferred sales charge is 1% and is reduced to 0%
after 1 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 3/31/95 +7.25% +2.96%
[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 3/31/95 +5.34% +4.34%
[FN]
*Maximum contingent deferred sales charge is 1% and is reduced to 0%
after 1 year.
**Assuming payment of applicable contingent deferred sales charge.
<PAGE>
% Return Without % Return With
Class D Shares* Sales Charge Sales Charge**
Inception (10/21/94) through 3/31/95 +5.58% +1.36%
[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 3/31/95 +1.77% +0.77%
[FN]
*Maximum contingent deferred sales charge is 1% and is reduced to 0%
after 1 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 3/31/95 +1.94% +0.92%
[FN]
*Maximum sales charge is 1%.
**Assuming maximum sales charge.
<PAGE>
PERFORMANCE DATA (continued)
<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
1/1/95--3/31/95 7.43/7.87 9.40/9.91 9.77/9.85 0.10 0.14 0.09 + 7.50 + 7.02 +1.83
------ ------ -----
Total $10.65 $13.11 $8.95
Cumulative total return as of 3/31/95: +223.90%** +303.82%**+147.56%**
<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 $0.065 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>
<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
1/1/95--3/31/95 7.43/7.87 9.39/9.91 9.77/9.85 0.09 0.12 0.08 + 7.31 + 6.95 + 1.75
----- ----- -----
Total $3.53 $4.73 $0.83
Cumulative total return as of 3/31/95: +56.35%** +54.41%** + 7.96%**
<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 Portfolio.
(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>
PERFORMANCE DATA (concluded)
<PAGE>
<TABLE>
Recent
Performance
Results*
<CAPTION>
12 Month 3 Month Standardized
3/31/95 12/31/94 3/31/94++ % Change++ % Change 30-Day Yield
<C> <C> <C> <C> <C> <C> <C>
Insured Portfolio Class A Shares $7.87 $ 7.43 $ 7.93 +1.12%(1) +5.92% 5.20%
Insured Portfolio Class B Shares 7.87 7.43 7.93 +1.12(1) +5.92 4.65%
Insured Portfolio Class C Shares 7.87 7.43 7.68 +4.42(1) +5.92 4.60%
Insured Portfolio Class D Shares 7.88 7.43 7.68 +4.55(1) +6.06 4.96%
National Portfolio Class A Shares 9.91 9.40 10.11 +0.20(2) +5.43 5.55%
National Portfolio Class B Shares 9.91 9.39 10.11 +0.20(2) +5.54 5.02%
National Portfolio Class C Shares 9.91 9.40 9.85 +2.84(2) +5.43 4.97%
National Portfolio Class D Shares 9.91 9.40 9.85 +2.84(2) +5.43 5.31%
Limited Maturity Portfolio Class A Shares 9.85 9.77 9.90 -0.51 +0.82 3.87%
Limited Maturity Portfolio Class B Shares 9.85 9.77 9.90 -0.51 +0.82 3.54%
Limited Maturity Portfolio Class C Shares 9.84 9.77 9.83 +0.10 +0.72 3.72%
Limited Maturity Portfolio Class D Shares 9.85 9.77 9.83 +0.20 +0.82 3.77%
Insured Portfolio Class A Shares--Total Return +7.18(3) +7.50(4)
Insured Portfolio Class B Shares--Total Return +6.39(5) +7.31(6)
Insured Portfolio Class C Shares--Total Return +6.86(7) +7.30(8)
Insured Portfolio Class D Shares--Total Return +7.25(9) +7.57(10)
National Portfolio Class A Shares--Total Return +6.37(11) +7.02(12)
National Portfolio Class B Shares--Total Return +5.59(13) +6.95(14)
National Portfolio Class C Shares--Total Return +5.34(15) +6.82(16)
National Portfolio Class D Shares--Total Return +5.58(17) +6.96(18)
Limited Maturity Portfolio Class A Shares--Total Return +3.42(19) +1.83(20)
Limited Maturity Portfolio Class B Shares--Total Return +3.09(21) +1.75(22)
Limited Maturity Portfolio Class C Shares--Total Return +1.77(23) +1.66(24)
Limited Maturity Portfolio Class D Shares--Total Return +1.94(25) +1.81(26)
<FN>
*Investment results shown do not reflect 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 $0.442 per share ordinary
income dividends and $0.141 per share capital gains distributions.
(4)Percent change includes reinvestment of $0.105 per share ordinary
income dividends.
(5)Percent change includes reinvestment of $0.384 per share ordinary
income dividends and $0.141 per share capital gains distributions.
(6)Percent change includes reinvestment of $0.091 per share ordinary
income dividends.
(7)Percent change includes reinvestment of $0.166 per share ordinary
income dividends and $0.141 per share capital gains distributions.
(8)Percent change includes reinvestment of $0.099 per share ordinary
income dividends.
(9)Percent change includes reinvestment of $0.185 per share ordinary
income dividends and $0.141 per share capital gains distributions.
(10)Percent change includes reinvestment of $0.100 per share
ordinary income dividends.
<PAGE>
(11)Percent change includes reinvestment of $0.582 per share
ordinary income dividends and $0.209 per share capital gains
distributions.
(12)Percent change includes reinvestment of $0.137 per share
ordinary income dividends.
(13)Percent change includes reinvestment of $0.508 per share
ordinary income dividends and $0.209 per share capital gains
distributions.
(14)Percent change includes reinvestment of $0.120 per share
ordinary income dividends.
(15)Percent change includes reinvestment of $0.222 per share
ordinary income dividends and $0.209 per share capital gains
distributions.
(16)Percent change includes reinvestment of $0.119 per share
ordinary income dividends.
(17)Percent change includes reinvestment of $0.244 per share
ordinary income dividends and $0.209 per share capital gains
distributions.
(18)Percent change includes reinvestment of $0.131 per share
ordinary income dividends.
(19)Percent change includes reinvestment of $0.371 per share
ordinary income dividends.
(20)Percent change includes reinvestment of $0.089 per share
ordinary income dividends.
(21)Percent change includes reinvestment of $0.339 per share
ordinary income dividends.
(22)Percent change includes reinvestment of $0.080 per share
ordinary income dividends.
(23)Percent change includes reinvestment of $0.152 per share
ordinary income dividends.
(24)Percent change includes reinvestment of $0.081 per share
ordinary income dividends.
(25)Percent change includes reinvestment of $0.159 per share
ordinary income dividends.
(26)Percent change includes reinvestment of $0.086 per share
ordinary income dividends.
</TABLE>
PORTFOLIO COMPOSITION
For the Quarter Ended March 31, 1995
Insured
Portfolio
Top Ten States*
Texas 14.85%
California 7.81
Pennsylvania 7.76
Florida 6.91
New York 5.71
Georgia 5.28
South Carolina 4.74
Illinois 3.71
Michigan 3.42
Rhode Island 3.22
-------
Total Top Ten 63.41
Total Others 36.59
-------
Total Portfolio 100.00%
=======
<PAGE>
Net assets as of March 31, 1995 were $2,568,783,008.
Quality Ratings*
(Based on Nationally Recognized Rating Services)
A pie chart illustrating the following percentages:
AAA/Aaa 94%
Other++ 6%
[FN]
*Based on total market value of the Portfolio as of March 31, 1995.
++Temporary investments in short-term municipal securities.
National
Portfolio
Top Ten States*
New York 13.16%
Texas 8.31
Florida 7.02
Michigan 5.88
Massachusetts 5.75
Georgia 4.71
Pennsylvania 4.43
Illinois 4.29
New Jersey 3.89
California 3.36
-------
Total Top Ten 60.80
Total Others 39.20
-------
Total Portfolio 100.00%
=======
Net assets as of March 31, 1995 were $1,523,035,927.
<PAGE>
Quality Ratings*
(Based on Nationally Recognized Rating Services)
A pie chart illustrating the following percentages:
AAA/Aaa 22%
AA/Aa 31%
A/A 15%
BBB/Baa 18%
BB/Ba 1%
Other++ 10%
NR+++ 3%
[FN]
*Based on total market value of the Portfolio as of March 31, 1995.
++Temporary investments in short-term municipal securities.
+++Not Rated.
Limited Maturity
Portfolio
Top Ten States*
California 10.18%
Ohio 9.69
Illinois 6.85
Texas 6.57
Washington 5.59
Massachusetts 5.16
New Jersey 4.27
Michigan 3.64
Utah 3.61
Wisconsin 2.95
-------
Total Top Ten 58.51
Total Others 41.49
-------
Total Portfolio 100.00%
=======
Net assets as of March 31, 1995 were $727,932,481.
<PAGE>
Quality Ratings*
(Based on Nationally Recognized Rating Services)
A pie chart illustrating the following percentages:
AA/Aaa 27%
AA/Aa 24%
A/A 22%
BBB/Baa 1%
Other++ 18%
NR+++ 8%
[FN]
*Based on total market value of the Portfolio as of March 31, 1995.
++Temporary investments in short-term municipal securities.
+++Not Rated.
