MUNIVEST
FUND, INC.
[GRAPHIC OMITTED]
STRATEGIC
Performance
Semi-Annual Report
February 28, 1998
<PAGE>
MUNIVEST FUND, INC.
The Benefits and Risks of Leveraging
MuniVest Fund, Inc. utilizes leveraging to seek to enhance the yield and net
asset value of its Common Stock. However, these objectives cannot be achieved in
all interest rate environments. To leverage, the Fund issues Preferred Stock,
which pays dividends at prevailing short-term interest rates, and invests the
proceeds in long-term municipal bonds. The interest earned on these investments
is paid to Common Stock shareholders in the form of dividends, and the value of
these portfolio holdings is reflected in the per share net asset value of the
Fund's Common Stock. However, in order to benefit Common Stock shareholders, the
yield curve must be positively sloped; that is, short-term interest rates must
be lower than long-term interest rates. At the same time, a period of generally
declining interest rates will benefit Common Stock shareholders. If either of
these conditions change, then the risks of leveraging will begin to outweigh the
benefits.
To illustrate these concepts, assume a fund's Common Stock capitalization of
$100 million and the issuance of Preferred Stock for an additional $50 million,
creating a total value of $150 million available for investment in long-term
municipal bonds. If prevailing short-term interest rates are approximately 3%
and long-term interest rates are approximately 6%, the yield curve has a
strongly positive slope. The fund pays dividends on the $50 million of Preferred
Stock based on the lower short-term interest rates. At the same time, the fund's
total portfolio of $150 million earns the income based on long-term interest
rates. Of course, increases in short-term interest rates would reduce (and even
eliminate) the dividends on the Common Stock.
In this case, the dividends paid to Preferred Stock share holders are
significantly lower than the income earned on the fund's long-term investments,
and therefore the Common Stock shareholders are the beneficiaries of the
incremental yield. However, if short-term interest rates rise, narrowing the
differential between short-term and long-term interest rates, the incremental
yield pick-up on the Common Stock will be reduced or eliminated completely. At
the same time, the market value on the fund's Common Stock (that is, its price
as listed on the New York Stock Exchange), may, as a result, decline.
Furthermore, if long-term interest rates rise, the Common Stock's net asset
value will reflect the full decline in the price of the portfolio's investments,
since the value of the fund's Preferred Stock does not fluctuate. In addition to
the decline in net asset value, the market value of the fund's Common Stock may
also decline.
Managed Dividend Policy
The Fund's dividend policy is to distribute substantially all of its net
investment income to its shareholders on a monthly basis. However, in order to
provide shareholders with a more consistent yield to the current trading price
of shares of Common Stock of the Fund, the Fund may at times pay out less than
the entire amount of net investment income earned in any particular month and
may at times in any particular month pay out such accumulated but undistributed
income in addition to net investment income earned in that month. As a result,
the dividends paid by the Fund for any particular month may be more or less than
the amount of net investment income earned by the Fund during such month. The
Fund's current accumulated but undistributed net investment income, if any, is
disclosed in the Statement of Assets, Liabilities and Capital, which comprises
part of the financial information included in this report.
<PAGE>
MuniVest Fund, Inc., February 28, 1998
TO OUR SHAREHOLDERS
For the six months ended February 28, 1998, the Common Stock of MuniVest Fund,
Inc. earned $0.295 per share income dividends, which included earned and unpaid
dividends of $0.045. This represents a net annualized yield of 5.88%, based on a
month-end per share net asset value of $10.11. Over the same period, the total
investment return on the Fund's Common Stock was +5.36%, based on a change in
per share net asset value from $9.89 to $10.11, and assuming reinvestment of
$0.300 per share income dividends.
For the six months ended February 28, 1998, the Fund's Preferred Stock had an
average yield as follows: Series A, 3.91%; Series B, 3.92%; Series C, 3.35%;
Series D, 3.32%; and Series E, 3.58%.
The Municipal Market Environment
During the six months ended February 28, 1998, bond yields declined to recent
historic lows. Prior to late October, the ongoing positive combination of
moderate economic growth and low inflation had allowed interest rates to
gradually move lower. More recently, however, the decline in interest rates was
driven more by the continued turmoil in Asian equity markets than by fundamental
concerns. A significant "flight to quality" has benefited the US Treasury bond
market, particularly longer-maturity US Treasury bonds, as foreign investors
have sought safe haven in the relative stability of US financial markets. Over
the six months ended February 28, 1998, US Treasury bond yields declined
approximately 70 basis points (0.70%) to 5.92%. Long-term municipal revenue
bonds, as measured by the Bond Buyer Revenue Bond Index, declined over 30 basis
points to end the February period at 5.36%. Tax-exempt bond yields have not been
at these levels since the mid-1970s.
Without the ability to benefit from the tax advantage inherent in municipal
bonds, foreign investors have not participated to any significant extent in the
tax-exempt market. Consequently, municipal bond yields have not declined as
dramatically as have taxable US Treasury securities. The increase in new
municipal bond issuance over the past six months has also prevented the
tax-exempt bond market from more closely mirroring the yield declines exhibited
by its taxable counterpart. Over the last six months, over $125 billion in new
long-term municipal bonds were underwritten, an increase of over 35% compared to
the same six-month period one year ago. As interest rates have continued to
decline in recent months, new tax-exempt bond issuance has remained strong. Over
$60 million in new long-term municipal securities were issued during the last
three months, an increase of over 40% compared to the same three-month period
ended February 28, 1997. During the past month, over $20 billion in new
long-term municipal securities were under written, representing an increase of
over 50% compared to the February 1997 level and the largest February issuance
ever.
In our opinion, the recent correction in world equity markets has enhanced the
near-term prospects for continued low, if not declining, interest rates in the
United States. It is likely that the recent correction will result in slower US
domestic growth in the coming months. This decline should be generated in part
by reduced US export growth. Going forward, Asian consumer demand for US
products is likely to decline in response to diminished Asian economic growth.
Perhaps more importantly, it is likely that, barring a dramatic and unexpected
resurgence in domestic growth and inflation, the Federal Reserve Board will be
unwilling to raise interest rates until the full impact of the recent Asian
market turmoil can be established.
All of these factors suggest that over the near term, interest rates, including
tax-exempt bond yields, are unlikely to rise by any appreciable amount. It is
probable that municipal bond yields will remain under some relative pressure
because of continued strong new-issue supply. However, the recent pace of
municipal bond issuance is likely to be unsustainable. Continued increases in
bond issuance will require lower and lower tax-exempt bond yields to generate
the economic savings necessary for additional municipal bond refinancings.
Preliminary estimates of 1998 total municipal bond issuance are presently in the
$200 billion--$225 billion range. These estimates suggest that recent supply
pressures are likely to abate somewhat next year, or at least exert only minimal
technical pressure during 1998. Additionally, municipal bond investors received
approximately $30 billion in January and February coupon payments, bond
maturities and proceeds from early redemptions, which should serve to intensify
investor demand in the near future. With tax-exempt bond yields at already
attractive yield ratios relative to US Treasury bonds (approximately 90% at the
end of February 1998), any further pressure on the municipal market may well
represent an attractive investment opportunity.
Portfolio Strategy
Over the six months ended February 28, 1998, we have gradually adopted a more
constructive strategy toward the tax-exempt bond market. Our earlier defensive
structure was established on concerns that the strong domestic economic growth
seen through mid-1997 would continue into 1998. We believed that such strength
would eventually cause the Federal Reserve Board (FRB) to raise interest rates
to ensure that excessive growth would not generate inflationary pressures.
However, as the Asian equity turmoil developed in late October 1997, and as US
inflation continued to decline, we began to adopt a more positive outlook. It is
likely that US economic growth in 1998 will slow as a result of the Asian
economic contraction. Additionally, until the Asian financial crisis is resolved
or US inflation surges, the FRB is likely to maintain a stable interest rate
environment.
We expect to maintain our current positive view regarding the municipal bond
market going forward in 1998. Should the Asian market correction intensify and
negatively impact US economic growth further, we will likely adopt a more
aggressive approach toward the municipal bond market, in anticipation that
interest rates will decline in response. Over the past six months, the Fund has
been essentially fully invested. While 1998 annual issuance is expected to be
similar to last year's volume, the majority of new underwritings are likely to
be dominated by retail-oriented bond structures. These structures usually
produce current-coupon issues, which are rarely attractively priced compared to
the Fund's existing holdings. Consequently, we expect the Fund to maintain its
fully invested position in order to seek to continue the enhancement of current
income to shareholders.
In Conclusion
We appreciate your ongoing interest in MuniVest Fund, Inc., and we look forward
to assisting you with your financial needs in the months and years ahead.
Sincerely,
/s/ Arthur Zeikel
Arthur Zeikel
President
/s/ Vincent R. Giordano
Vincent R. Giordano
Senior Vice President
/s/ Fred K. Stuebe
Fred K. Stuebe
Vice President and Portfolio Manager
March 27, 1998
Quality Profile
The quality ratings of securities in the Fund as of February 28, 1998 were as
follows:
- --------------------------------------------
Percent of
S&P Rating/Moody's Rating Net Assets
- --------------------------------------------
AAA/Aaa........................... 41.3%
AA/Aa ............................ 31.1
A/A............................... 14.3
BBB/Baa........................... 10.0
NR (Not Rated).................... 1.0
Other*............................ 5.8
- --------------------------------------------
*Temporary investments in short-term municipal securities.
2 & 3
<PAGE>
MuniVest Fund, Inc., February 28, 1998
PROXY RESULTS
During the six-month period ended February 28, 1998, MuniVest Fund, Inc. Common
Stock shareholders voted on the following proposals. The proposals were approved
at a shareholders' meeting on September 18, 1997. The description of each
proposal and number of shares voted are as follows:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
Shares Voted Shares Withheld
For From Voting
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. To elect the Fund's Board of Directors: Cynthia A. Montgomery 58,671,037 1,100,525
Charles C. Reilly 58,666,907 1,104,655
Kevin A. Ryan 58,673,707 1,097,855
Arthur Zeikel 58,647,349 1,124,213
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
Shares Voted Shares Voted Shares Voted
For Against Abstain
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
2. To ratify the selection of Deloitte & Touche LLP as the Fund's
independent auditors for the current fiscal year. 58,358,745 472,951 939,866
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
During the six-month period ended February 28, 1998, MuniVest Fund, Inc.
Preferred Stock (Series A, B, C, D and E) shareholders voted on the following
proposals. The proposals were approved at a shareholders' meeting on September
18, 1997. The description of each proposal and number of shares voted are as
follows:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
Shares Voted Shares Withheld
For From Voting
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. To elect the Fund's Board of Directors: Series A 1,806 0
Ronald W. Forbes and Richard R. West Series B 1,389 0
Series C 1,285 0
Series D 1,963 30
Series E 2,750 36
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
Shares Voted Shares Voted Shares Voted
For Against Abstain
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
2. To ratify the selection of Deloitte & Touche LLP as the Fund's
independent auditors for the current fiscal year. Series A 1,707 99 0
Series B 1,371 3 15
Series C 1,265 0 20
Series D 1,919 74 0
Series E 2,750 0 36
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
SCHEDULE OF INVESTMENTS (in Thousands)
<TABLE>
<CAPTION>
S&P Moody's Face Value
STATE Ratings Ratings Amount Issue (Note 1a)
====================================================================================================================================
<S> <C> <C> <C> <C> <C>
Alabama--6.0% AAA NR* $ 9,740 Alabama HFA, S/F Mortgage Revenue Bonds, Series A, 7.60%
due 10/01/2022 (d) $ 10,247
BBB Baa1 8,750 Courtland, Alabama, IDB, IDR, Refunding (Champion International
Corporation), Series A, 7.20% due 12/01/2013 9,778
Courtland, Alabama, IDB, Solid Waste Disposal Revenue Bonds
(Champion International Corporation Project), AMT:
BBB Baa1 5,000 7% due 6/01/2022 5,466
BBB Baa1 6,170 Series A, 6.375% due 3/01/2029 6,590
AAA Aaa 12,500 Jefferson County, Alabama, Sewer Revenue Bonds, RITR, Series 7,
6.52% due 2/01/2027 (f)(j) 12,922
AAA Aaa 5,000 Jefferson County, Alabama, Sewer Revenue Warrants, Series D,
5.75% due 2/01/2027 (f) 5,296
A1 VMIG1# 3,100 Parrish, Alabama, IDB, PCR, Refunding (Alabama Power Co.
Project), VRDN, 3.65% due 6/01/2015 (g) 3,100
====================================================================================================================================
Alaska--3.3% North Slope Boro, Alaska, GO, UT, Series B (c):
AAA Aaa 6,000 5.10%** due 1/01/2002 5,081
AAA Aaa 6,000 5.20%** due 1/01/2003 4,853
AA Aa3 17,250 Valdez, Alaska, Marine Terminal Revenue Refunding Bonds (Sohio
Pipeline--BP Oil), 7.125% due 12/01/2025 19,359
====================================================================================================================================
Arizona--0.4% A1+ P1 200 Maricopa County, Arizona, Pollution Control Corporation, PCR,
Refunding (Arizona Public Service Co.), VRDN, Series E, 3.65%
due 5/01/2029 (g) 200
AAA NR* 3,000 Phoenix, Arizona, Civic Improvement Corporation, Wastewater
System, Lease Revenue Bonds, 6.125% due 7/01/2003 (a) 3,337
====================================================================================================================================
California--1.4% California Pollution Control Financing Authority, PCR, Refunding
(Pacific Gas and Electric Co.), VRDN (g):
A1+ NR* 4,200 AMT, Series C, 3.65% due 11/01/2026 4,200
A1+ NR* 400 Series F, 3.60% due 11/01/2026 400
AA Aaa 7,000 California State Department of Water Resources Revenue Bonds
(Central Valley Project--Water Systems), Series P, 6.50%
due 6/01/2006 (a) 8,142
====================================================================================================================================
Colorado--3.3% NR* Aaa 5,000 Arapahoe County, Colorado, Capital Improvement Trust Fund,
Highway Revenue Bonds (SR-E-470 Project), Series B, 7% due
8/31/2005 (a) 5,975
Denver Colorado, City and County Airport Revenue Bonds:
BBB Aaa 1,720 AMT, Series C, 6.75% due 11/15/2002 (a) 1,940
BBB Baa1 9,850 AMT, Series C, 6.75% due 11/15/2013 10,756
BBB Baa1 1,485 AMT, Series C, 6.75% due 11/15/2022 1,612
AAA Baa1 5,490 Series A, 7.25% due 11/15/2002 (a) 6,302
AAA NR* 1,850 Series A, 7.25% due 11/15/2002 (a) 2,124
AAA NR* 820 El Paso County, Colorado, S/F Mortgage Revenue Bonds, AMT,
Series A, 8% due 9/01/2022 (d) 867
====================================================================================================================================
</TABLE>
Portfolio Abbreviations
================================================================================
To simplify the listings of MuniVest 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)
DATES Daily Adjustable Tax-Exempt Securities
GO General Obligation Bonds
HDA Housing Development Authority
HFA Housing Finance Agency
IDA Industrial Development Authority
IDB Industrial Development Board
IDR Industrial Development Revenue Bonds
INFLOS Inverse Floating Rate Municipal Bonds
M/F Multi-Family
PCR Pollution Control Revenue Bonds
RAN Revenue Anticipation Notes
RIB Residual Interest Bonds
RITR Residual Interest Trust Receipts
S/F Single-Family
UT Unlimited Tax
VRDN Variable Rate Demand Notes
4 & 5
<PAGE>
MuniVest Fund, Inc., February 28, 1998
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<TABLE>
<CAPTION>
S&P Moody's Face Value
STATE Ratings Ratings Amount Issue (Note 1a)
===================================================================================================================================
<S> <C> <C> <C> <C> <C>
Connecticut--0.0% A1+ VMIG1# $ 100 Connecticut State Development Authority, PCR, Refunding (Western
Massachusetts Electric Co.), VRDN, Series A, 3.15% due 9/01/2028 (g) $ 100
===================================================================================================================================
Delaware--0.5% AAA Aaa 3,630 Delaware Transportation Authority, Transportation System, Senior
Revenue Bonds, 7% due 7/01/2004 (a)(f) 4,240
===================================================================================================================================
Florida--3.5% NR* Aaa 8,270 Florida HFA, Home Ownership Revenue Bonds, AMT, Series G-1, 7.90%
due 3/01/2022 (d) 8,770
AA+ Aa2 19,785 Florida State Board of Education Capital Outlay (Public Education),
Series B, 4.50% due 6/01/2027 17,906
A1+ VMIG1# 100 Saint Lucie County, Florida, PCR, Refunding (Florida Power & Light
Company Project), VRDN, 3.60% due 1/01/2026 (g) 100
AAA Aaa 5,000 Tampa, Florida, Revenue Health System Bonds (Catholic Health),
Series A-3, 4.75% due 11/15/2028 4,642
===================================================================================================================================
Georgia--5.3% Burke County, Georgia, Development Authority, PCR (Georgia Power Company
Plant Vogtle Project), VRDN (g):
A1 VMIG1# 5,700 2nd Series, 3.65% due 4/01/2025 5,700
A+ VMIG1# 1,000 Refunding, 3rd Series, 3.65% due 9/01/2025 1,000
Georgia Municipal Electric Authority, Power Revenue Bonds:
A+ A3 12,940 Series Y, 6.50% due 1/01/2017 14,927
NR* NR* 4,850 UT, Series W, 6.60% due 1/01/2018 5,664
Georgia State, GO, Series F:
AAA Aaa 6,400 6.50% due 12/01/2006 7,449
AAA Aaa 5,000 6.50% due 12/01/2007 5,869
AA+ Aa 1,550 Georgia State, HFA, S/F Mortgage Revenue Bonds, AMT, Sub-Series
A-2, 6.55% due 12/01/2027 1,658
A A3 4,785 Monroe County, Georgia, Development Authority, PCR, Refunding
(Oglethorpe Power Scherer), Series A, 6.80% due 1/01/2011 5,641
===================================================================================================================================
Hawaii--1.6% Hawaii State Department of Budget and Finance, Special Purpose Mortgage
Revenue Bonds:
AA+ NR* 3,500 (Citizens Utility Company), AMT, Series 91-A, 6.66% due 11/01/2021 3,776
A A2 10,000 (Kapi'Olani Health Obligations), 6.25% due 7/01/2021 10,756
===================================================================================================================================
Idaho--0.6% NR* Aaa 4,745 Idaho Housing Agency, S/F Mortgage Revenue Bonds, AMT, Series E-2,
6.90% due 1/01/2027 5,076
===================================================================================================================================
Illinois--10.3% AAA Aaa 5,000 Chicago, Illinois, Board of Education (Chicago School Reform), UT,
5.75% due 12/01/2020 (h) 5,325
AAA Aaa 2,750 Chicago, Illinois, GO, UT, 5.25% due 1/01/2027 (f) 2,738
AAA Aaa 12,600 Chicago, Illinois, Sales Tax Revenue Bonds, 5.375% due 1/01/2027 (f) 12,770
Illinois Educational Facilities Authority Revenue Bonds (a):
NR* NR* 2,500 (Chicago Osteopathic Health System), 7.25% due 11/15/2019 3,109
A+ A1 2,000 Refunding (Loyola University--Chicago), Series A, 7.125% due 7/01/2001 2,222
Illinois HDA, Revenue Bonds (M/F Housing Program):
A+ A1 660 Refunding, Series A, 7.375% due 7/01/2017 719
A+ A1 7,000 Series 5, 6.75% due 9/01/2023 7,442
Illinois Health Facilities Authority Revenue Bonds:
NR* Baa1 2,650 (Holy Cross Hospital Project), 6.70% due 3/01/2014 2,898
NR* Baa1 2,205 (Ravenswood Hospital Medical Center), 6.85% due 6/01/2012 2,376
NR* Baa1 7,375 (Ravenswood Hospital Medical Center), 6.90% due 6/01/2022 7,969
AA A1 9,000 Refunding (Advocate Health Care), Series A, 5.875% due 8/15/2022 9,464
A1+ P1 1,900 Joliet, Illinois, Regional Port District, Marine Terminal Revenue
Refunding Bonds (Exxon Corporation), VRDN, 3.65% due 10/01/2024 (g) 1,900
BBB NR* 2,500 Lansing, Illinois, Tax Increment Revenue Refunding Bonds (Sales
Tax--Landings Redevelopment), 7% due 12/01/2008 2,791
Metropolitan Pier and Exposition Authority, Illinois, Dedicated State
Tax Revenue Refunding Bonds (McCormick Plant Expansion Project) (c):
AAA Aaa 20,000 Series A, 5.25%** due 12/15/2024 4,948
AAA Aaa 60,000 Series B, 5.096%** due 6/15/2028 12,268
Regional Transportation Authority, Illinois, Revenue Bonds:
AAA Aaa 3,500 Series A, 7.20% due 11/01/2020 (h) 4,463
AAA Aaa 4,000 UT, Series C, 7.75% due 6/01/2020 (f) 5,415
AAA Aaa 2,500 UT, Series C, 7.10% due 6/01/2025 (f) 2,881
===================================================================================================================================
Indiana--9.2% AAA NR* 5,250 Indiana Bond Bank Revenue Bonds (State Revolving Fund Program),
Series A, 6.75% due 2/01/2017 5,953
Indiana Health Facilities Financing Authority, Hospital Revenue
Refunding Bonds:
AA Aa3 10,250 (Clarian Health Partners Inc.), Series A, 6% due 2/15/2021 10,858
BBB+ NR* 3,000 (Hancock Memorial Hospital Health Services), 6.125% due 8/15/2017 3,188
NR* Aaa 5,290 Indiana State, HFA, S/F Mortgage Revenue Refunding Bonds, Series A,
6.80% due 1/01/2017 5,602
AA- Aa3 7,195 Indiana Transportation Finance Authority, Highway Revenue Bonds,
Series A, 6.80% due 12/01/2016 8,729
Indianapolis, Indiana, Local Public Improvement Bond Bank, Revenue
Refunding Bonds, Series D:
AA NR* 15,335 6.75% due 2/01/2014 18,599
AA NR* 20,350 6.75% due 2/01/2020 22,546
A1 VMIG1# 4,100 Jasper County, Indiana, PCR, Refunding (Northern Indiana Public
Service), VRDN, Series C, 3.65% due 4/01/2019 (g) 4,100
AA- Aa2 2,000 Purdue University, Indiana, University Revenue Bonds (Student Fee),
Series B, 6.70% due 1/01/2005 (a) 2,324
===================================================================================================================================
Iowa--0.4% NR* Aaa 2,975 Iowa Finance Authority, S/F Mortgage Revenue Bonds, AMT, Series A,
7.90% due 11/01/2022 (d) 3,151
===================================================================================================================================
Kentucky--0.5% AA- Aa3 3,900 Boone County, Kentucky, PCR, Refunding (Dayton Power & Light Co.),
Series A, 6.50% due 11/15/2022 4,261
===================================================================================================================================
Louisiana--1.5% A- A3 4,000 De Soto Parish, Louisiana, Environmental Improvement Revenue
Refunding Bonds (International Paper Co. Project), AMT, Series B,
6.55% due 4/01/2019 4,402
NR* A3 3,000 Lake Charles, Louisiana, Harbor and Terminal District, Port
Facilities Revenue Refunding Bonds (Trunkline Long Company Project),
7.75% due 8/15/2022 3,462
A+ A1 5,000 Louisiana Public Facilities Authority Revenue Bonds (Tulane
University), 6.625% due 11/15/2002 (a) 5,607
===================================================================================================================================
Massachusetts--7.7% AAA Aaa 2,035 Boston, Massachusetts, Water and Sewer Commission Revenue Bonds,
Series A, 9.25% due 1/01/2011 (e) 2,859
Massachusetts Bay Transportation Authority Revenue Bonds
(Massachusetts General Transportation Systems), Series A:
AAA Aaa 13,445 4.50% due 3/01/2026 (c) 12,120
AA- A1 3,010 Refunding, 7% due 3/01/2019 3,760
Massachusetts State, HFA (Residential Development) (b):
AAA Aaa 3,375 Series A, 6.90% due 11/15/2024 3,673
AAA Aaa 2,360 Series D, Section 8, 6.875% due 11/15/2021 2,543
AAA Aaa 7,300 Massachusetts State Health and Educational Facilities Authority
Revenue Bonds, 6.70% due 8/15/2021 (i) 7,957
A A2 30,000 Massachusetts State Water Resource Authority, Series A, 6.50%
due 7/15/2019 35,779
===================================================================================================================================
Michigan--3.2% AA+ NR* 9,865 Michigan State, HDA, S/F Mortgage Revenue Refunding Bonds, AMT,
Series D, 6.85% due 6/01/2026 10,553
</TABLE>
6 & 7
<PAGE>
MuniVest Fund, Inc., February 28, 1998
SCHEDULE OF INVESTMENTS (concluded) (in Thousands)
<TABLE>
<CAPTION>
S&P Moody's Face Value
STATE Ratings Ratings Amount Issue (Note 1a)
===================================================================================================================================
<S> <C> <C> <C> <C> <C>
Michigan Michigan State Hospital Finance Authority, Revenue Refunding Bonds:
(concluded) A A2 $ 3,250 (Detroit Medical Center Obligation Group), Series A, 6.25%
due 8/15/2013 $ 3,477
A A2 7,930 (Detroit Medical Center Obligation Group), Series A, 6.50% due
8/15/2018 8,626
NR* VMIG1# 100 (Mount Clemens Hospital), VRDN, 3.45% due 8/15/2015 (g) 100
Michigan State Strategic Fund, Limited Obligation Revenue Bonds:
AAA Aaa 3,000 Refunding (Detroit Edison Company Project), 6.875% due 12/01/2021 (f) 3,294
A1+ VMIG1# 200 (United Waste Systems Inc. Project), VRDN, AMT, 3.55% due 4/01/2010 (g) 200
AA- Aa3 2,265 Royal Oak, Michigan, Hospital Finance Authority, Revenue Refunding
Bonds (Beaumont Properties, Inc.), Series E, 6.625% due 1/01/2019 2,454
===================================================================================================================================
Minnesota--2.5% A1+ NR* 100 Beltrami County, Minnesota, Environmental Control Revenue Bonds
(Northwood Panelboard Co. Project), VRDN, AMT, 3.70% due 7/01/2025 (g) 100
Minnesota State, HFA, S/F Mortgage Revenue Bonds:
AA+ Aa2 3,425 AMT, Series L, 6.70% due 7/01/2020 3,641
AA+ Aa2 5,390 AMT, Series M, 6.70% due 7/01/2026 5,730
AA+ Aa2 4,005 Series H, 6.70% due 1/01/2018 4,292
AA+ Aa2 1,975 Series Q, 6.70% due 1/01/2017 2,107
BBB Baa1 5,700 Sartell, Minnesota, PCR, Refunding (Champion International Corp.),
6.95% due 10/01/2012 6,303
===================================================================================================================================
Mississippi--0.2% NR* Aa2 1,800 Jackson County, Mississippi, Individual Sewer Facilities Revenue
Bonds (Chevron USA, Inc. Project), VRDN, 3.70% due 12/15/2024 (g) 1,800
===================================================================================================================================
Nebraska--0.6% AAA NR* 5,100 Nebraska, Higher Education Loan Program, Inc. (Student Loan
Program), AMT, VRDN, Series C, 3.50% due 12/01/2016 (g) 5,100
===================================================================================================================================
Nevada--1.5% AAA Aaa 5,000 Clark County, Nevada, School District, GO, 6.75% due 12/15/2004 (a)(f) 5,775
AAA Aaa 3,090 Nevada Housing Division, S/F Program, AMT, Series E, 7% due 10/01/2019 3,321
Nevada State Housing Division, Housing Revenue Bonds, AMT:
AAA NR* 1,235 (Multi-Unit), Issue B, 7.45% due 10/01/2017 (b) 1,359
NR* Aa 2,275 (S/F Program), Series A, 6.55% due 10/01/2012 2,427
A1+ P1 700 Washoe County, Nevada, Water Facility Revenue Bonds (Sierra
Pacific Power Co. Project), VRDN, AMT, 3.70% due 12/01/2020 (g) 700
===================================================================================================================================
New Jersey--0.3% AAA Aaa 3,000 New Jersey State Housing and Mortgage Finance Agency Revenue Bonds
(Home Buyer), AMT, Series M, 6.95% due 10/01/2022 (c) 3,257
===================================================================================================================================
New Mexico--1.2% AAA Aaa 10,000 Farmington, New Mexico, PCR, Refunding (Southern California Edison
Company), Series A, 5.875% due 6/01/2023 (c) 10,583
===================================================================================================================================
New York--11.9% AAA Aaa 13,000 Metropolitan Transportation Authority of New York, Commuter
Facilities Revenue Bonds, RITR, Series 4, 6.77% due 7/01/2027 (j) 13,569
New York City, New York, GO, UT:
SP1+ MIG1# 1,700 RAN, Series A, 4.50% due 6/30/1998 1,705
BBB+ A3 3,750 Refunding, Series C, 5.875% due 2/01/2016 3,964
BBB+ A3 5,000 Refunding, Series F, 5.875% due 8/01/2024 5,265
BBB+ A3 430 Series B, 7% due 6/01/2016 467
BBB+ A3 2,800 Series B, 5.875% due 8/15/2016 2,958
BBB+ Aaa 685 Series B, Sub-Series B-1, 7% due 8/15/2004 (a) 797
BBB+ Aaa 4,000 Series B, Sub-Series B-1, 7.25% due 8/15/2004 (a) 4,713
BBB+ A3 815 Series B, Sub-Series B-1, 7% due 8/15/2016 941
BBB+ Aaa 960 Series D, 9.50% due 8/01/2001 (a) 1,140
BBB+ A3 550 Series D, 9.50% due 8/01/2002 645
BBB+ A3 2,150 Series D, 6% due 2/15/2020 2,270
A1+ VMIG1# 2,800 VRDN, Sub-Series A-10, 3.50% due 8/01/2017 (g) 2,800
New York City, New York, Municipal Water Finance Authority, Water
and Sewer System Revenue Bonds:
AAA Aaa 6,150 RITR, Series 10, 6.77% due 6/15/2026 (j) 6,365
AAA Aaa 11,540 Refunding, Fiscal 1997-Series A, 5.375% due 6/15/2026 (i) 11,729
A- A2 4,750 Series A, 5.50% due 6/15/2023 4,847
A- A2 6,000 Series B, 5.75% due 6/15/2026 6,329
New York City, New York, Transitional Finance Authority Revenue Bonds
(Future Tax Secured), Series B:
AA Aa3 6,905 4.75% due 11/15/2023 6,467
AA Aa3 5,000 4.50% due 11/15/2027 4,494
AAA Aaa 9,000 New York State Energy, Research and Development Authority,
Gas Facilities Revenue Bonds, RITR, Series 9, 7.02% due
1/01/2021 (c)(j) 9,675
NR* VMIG1# 400 New York State, HFA, Revenue Bonds (East 84th Street), VRDN, AMT,
Series A, 3.30% due 11/01/2028 (g) 400
AA- A1 2,750 Port Authority of New York and New Jersey, Consolidated Revenue
Bonds, 76th Series, AMT, 6.50% due 11/01/2026 2,961
Port Authority of New York and New Jersey, Special Obligation
Revenue Bonds (Versatile Structure Obligation), VRDN (g):
A1 VMIG1# 1,600 Refunding, Series 1R, AMT, 3.65% due 8/01/2028 1,600
A1+ VMIG1# 5,200 Series 3, 3.50% due 6/01/2020 5,200
NR* Aaa 5,050 United Nations Development Corp., New York, Revenue Refunding
Bonds, Senior Lien, Series A, 6% due 7/01/2003 (a) 5,590
===================================================================================================================================
Ohio--2.2% Ohio HFA, S/F Mortgage Revenue Bonds, AMT (d):
AAA Aaa 3,500 RIB, Series B-4, 9.831% due 3/31/2031(j) 3,942
AAA NR* 7,685 Series A, 7.65% due 3/01/2029 8,098
AAA NR* 3,300 Series C, 8.125% due 3/01/2020 3,464
AAA NR* 3,815 Series C, 7.85% due 9/01/2021 4,050
===================================================================================================================================
Pennsylvania--2.9% AA+ Aa 4,890 Pennsylvania HFA, S/F Mortgage Revenue Bonds, AMT, Series U,
7.80% due 10/01/2020 5,130
AAA Aaa 10,000 Pennsylvania State Higher Educational Assistance Agency, Student
Loan Revenue Bonds, AMT, RIB, 9.724% due 9/03/2026 (h)(j) 11,612
===================================================================================================================================
Rhode Island--1.5% AA+ A1 6,000 Rhode Island Housing and Mortgage Finance Corporation, INFLOS,
AMT, Series 8, 10.316% due 4/01/2024 (j) 6,802
AAA Aaa 6,000 Rhode Island State Health and Education Building Corporation
Revenue Bonds (Rhode Island Hospital), INFLOS, 6.85% due
8/15/2021 (e)(f)(j) 6,662
===================================================================================================================================
South Carolina--0.6% AAA Aaa 5,000 South Carolina State Public Service Authority Revenue Refunding
Bonds, Series A, 5.75% due 1/01/2022 (c) 5,296
===================================================================================================================================
Texas--11.4% AAA Aaa 3,040 Copperas Cove, Texas, Independent School District Revenue Bonds,
GO, UT, 6.90% due 8/15/2004 (a) 3,493
AA- Aa3 6,250 Guadalupe-Blanco River Authority, Texas, Sewage and Solid Waste
Disposal Facility Revenue Bonds (E.I. du Pont de Nemours and
Company Project), AMT, 6.40% due 4/01/2026 6,908
BBB Baa1 4,000 Gulf Coast, Texas, IDA, IDR, Refunding (Champion International
Corp.), 7.125% due 4/01/2010 4,435
</TABLE>
8 & 9
<PAGE>
MuniVest Fund, Inc., February 28, 1998
SCHEDULE OF INVESTMENTS (concluded) (in Thousands)
<TABLE>
<CAPTION>
S&P Moody's Face Value
STATE Ratings Ratings Amount Issue (Note 1a)
===================================================================================================================================
<S> <C> <C> <C> <C> <C>
Texas NR* VMIG1# $ 200 Gulf Coast, Texas, IDA, Solid Waste Disposal Revenue Bonds (CITGO
(concluded) Petroleum Corp. Project), VRDN, AMT, 3.75% due 5/01/2025 (g) $ 200
AA Aa2 2,400 Harris County, Texas, Certificates of Obligation, Tax and Revenue
Bonds, 10% due 10/01/2002 (e) 2,974
Harris County, Texas, Health Facilities Development Corporation,
Hospital Revenue Bonds:
AAA Aaa 1,485 (Hermann Hospital Project), 6.375% due 10/01/2004 (a)(c) 1,674
NR* A3 3,500 (Memorial Hospital Systems Project), Series A, 6.60% due 6/01/2004 (a) 3,987
NR* A3 2,500 (Memorial Hospital Systems Project), Series A, 6.625% due 6/01/2004 (a) 2,851
AA Aa3 5,500 Refunding (School Health Care Systems), Series B, 6.25% due 7/01/2027 6,581
AAA Aa3 5,290 (Saint Luke's Episcopal Hospital Project), Series A, 6.625% due
2/15/2012 (e) 5,731
AA Aa3 10,385 Harris County, Texas, Health Facilities Development Corporation
Revenue Bonds, RITR, Series 6, 7.445% due 12/01/2027 (j) 11,605
A1+ NR* 4,700 Harris County, Texas, Industrial Development Corporation, PCR (Exxon
Corporation Project), AMT, 3.70% due 8/15/2027 4,700
A1+ Aaa 6,000 Harris County, Texas, Industrial Development Corporation, PCR (Exxon
Project), DATES, Series 1984-A, 3.65% due 3/01/2024 (g) 6,000
AAA Aaa 6,000 Houston, Texas, Water and Sewer System Revenue Bonds, RITR, Series 5,
6.77% due 12/01/2027 (f)(j) 6,210
AAA Aaa 10,000 Keller, Texas, Independent School District Refunding Bonds, UT, 5% due
8/15/2030 9,657
AA Aa2 5,000 Lower Neches Valley Authority, Texas, Industrial Development Corporation,
Sewer Facilities Revenue Bonds (Mobil Oil Refining Corp. Project), AMT,
6.40% due 3/01/2030 5,437
A+ A2 2,500 Matagorda County, Texas, Port of Bay City Authority Revenue Bonds
(Hoechst Celanese Corp. Project), AMT, 6.50% due 5/01/2026 2,757
AA Aa 5,700 North Central Texas, Health Facility Development Corporation Revenue
Bonds (Baylor University Medical Center), INFLOS, Series A, 10.07% due
5/15/2001 (a)(j) 6,847
AAA Aaa 10,000 Tarrant County, Texas, Health Facilities Development Corporation,
Health System Revenue Refunding Bonds (Texas Health Resources System),
Series A, 5.25% due 2/15/2022 (c) 9,973
===================================================================================================================================
Virginia--2.1% Virginia State, HDA, Commonwealth Mortgage Revenue Bonds:
AA+ NR* 2,950 AMT, Series G, Sub-Series G-2, 6.65% due 1/01/2019 3,149
AA+ Aa1 10,000 Series H, 6.85% due 7/01/2014 10,773
AA+ Aa1 4,400 Series J, Sub-Series J-2, 6.75% due 7/01/2017 4,736
===================================================================================================================================
Washington--5.1% AA+ Aa1 6,955 King County, Washington, GO, Series B, 6.625% due 12/01/2015 8,028
Washington State Housing Finance Commission, S/F Mortgage Revenue
Refunding Bonds (d):
AAA NR* 7,030 Series A, 7.70% due 7/01/2016 7,466
AAA NR* 2,395 Series D, 6.95% due 7/01/2017 (b) 2,516
Washington State Public Power Supply System, Revenue Refunding Bonds
(Nuclear Project No. 1):
AA- Aa1 3,000 Series A, 7% due 7/01/2008 3,552
AA- Aa1 5,000 Series B, 7.25% due 7/01/2009 6,039
AA- Aa1 14,320 Series B, 7.125% due 7/01/2016 17,747
===================================================================================================================================
Wisconsin--0.5% NR* A3 4,000 Wisconsin State Health and Educational Facilities Authority,
Revenue Refunding Bonds (Saint Claire Hospital Project), 7% due
2/15/2011 4,349
===================================================================================================================================
Wyoming--1.3% BBB- Baa2 7,475 Sweetwater County, Wyoming, Solid Waste Disposal Revenue Bonds
(FMC Corp. Project), AMT, Series B, 6.90% due 9/01/2024 8,378
NR* P1 400 Uinta County, Wyoming, PCR, Refunding (Chevron USA Inc. Project),
VRDN, 3.60% due 8/15/2020 (g) 400
AA Aa2 2,500 Wyoming Community Development Authority, S/F Mortgage Revenue
Bonds, AMT, Series H, 7.10% due 6/01/2012 2,693
===================================================================================================================================
Total Investments (Cost--$862,820)--103.5% 923,984
Liabilities in Excess of Other Assets--(3.5%) (30,869)
--------
Net Assets--100.0% $893,115
========
===================================================================================================================================
(a) Prerefunded.
(b) FNMA Collateralized.
(c) MBIA Insured.
(d) GNMA Collateralized.
(e) Escrowed to maturity.
(f) FGIC Insured.
(g) The interest rate is subject to change periodically
based upon prevailing market rates. The interest
rate shown is the rate in effect at February 28,
1998.
(h) AMBAC Insured.
(i) FSA Insured.
(j) 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
February 28, 1998.
* Not Rated.
** Represents a zero coupon bond; the interest rate
shown is the effective yield at the time of purchase
by the Fund.
# Highest short-term rating by Moody's Investors
Service, Inc.
See Notes to Financial Statements.
STATEMENT OF ASSETS, LIABILITIES AND CAPITAL
As of February 28, 1998
===================================================================================================================================
Assets: Investments, at value (identified cost--$862,819,672) (Note 1a)......... $923,984,169
Cash.................................................................... 34,452
Receivables:
Interest.............................................................. $ 10,536,885
Securities sold....................................................... 7,270,201 17,807,086
------------
Prepaid expenses and other assets....................................... 18,726
------------
Total assets............................................................ 941,844,433
------------
===================================================================================================================================
Liabilities: Payables:
Securities purchased.................................................. 47,436,711
Dividends to shareholders (Note 1e)................................... 803,347
Investment adviser (Note 2)........................................... 344,019 48,584,077
------------
Accrued expenses and other liabilities.................................. 145,803
------------
Total liabilities....................................................... 48,729,880
------------
===================================================================================================================================
Net Assets: Net assets.............................................................. $893,114,553
============
===================================================================================================================================
Capital: Preferred Stock, par value $.025 per share; 10,000,000 shares authorized
(11,000 shares of AMPS* issued and outstanding, at $25,000 per share
liquidation preference) (Note 4)........................................ $275,000,000
Common Stock, par value $.10 per share; 150,000,000 shares authorized;
61,123,140 shares issued and outstanding (Note 4)....................... $ 6,112,314
Paid-in capital in excess of par........................................ 563,529,671
Undistributed investment income--net.................................... 6,171,158
Accumulated realized capital losses on investments--net (Note 5)........ (18,863,087)
Unrealized appreciation on investments--net............................. 61,164,497
------------
Total--Equivalent to $10.11 net asset value per share of Common Stock
(market price -- $10.00)................................................ 618,114,553
------------
Total capital........................................................... $893,114,553
============
===================================================================================================================================
</TABLE>
* Auction Market Preferred Stock.
See Notes to Financial Statements.
10 & 11
<PAGE>
MuniVest Fund, Inc., February 28, 1998
STATEMENT OF OPERATIONS
For the Six Months Ended February 28, 1998
<TABLE>
<CAPTION>
====================================================================================================================================
<S> <C> <C> <C>
Investment Interest and amortization of premium and discount earned................ $ 25,844,271
Income (Note 1d):
====================================================================================================================================
Expenses: Investment advisory fees (Note 2)....................................... $ 2,202,408
Commission fees (Note 4)................................................ 344,968
Transfer agent fees..................................................... 68,510
Accounting services (Note 2)............................................ 58,071
Professional fees....................................................... 42,311
Custodian fees.......................................................... 28,500
Printing and shareholder reports........................................ 24,315
Pricing fees............................................................ 13,645
Directors' fees and expenses............................................ 13,444
Listing fees............................................................ 12,446
Other................................................................... 13,452
------------
Total expenses.......................................................... 2,822,070
------------
Investment income--net.................................................. 23,022,201
------------
===================================================================================================================================
Realized & Realized gain on investments--net....................................... 7,881,540
Unrealized Gain on Change in unrealized appreciation on investments--net................... 5,957,643
Investments -- Net ------------
(Notes 1b,1d & 3): Net Increase in Net Assets Resulting from Operations.................... $ 36,861,384
============
===================================================================================================================================
</TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the Six For the
Months Ended Year Ended
February 28, August 31,
Increase (Decrease) in Net Assets: 1998 1997
===================================================================================================================================
<S> <C> <C>
Operations: Investment income--net.................................................. $ 23,022,201 $ 47,172,381
Realized gain on investments--net....................................... 7,881,540 3,274,718
Change in unrealized appreciation on investments--net................... 5,957,643 23,793,529
------------ ------------
Net increase in net assets resulting from operations.................... 36,861,384 74,240,628
------------ ------------
===================================================================================================================================
Dividends to Investment income--net:
Shareholders Common Stock.......................................................... (18,336,575) (37,720,129)
(Note 1e): Preferred Stock....................................................... (4,925,130) (9,545,790)
------------ ------------
Net decrease in net assets resulting from dividends to shareholders..... (23,261,705) (47,265,919)
------------ ------------
===================================================================================================================================
Net Assets: Total increase in net assets............................................ 13,599,679 26,974,709
Beginning of period..................................................... 879,514,874 852,540,165
------------ ------------
End of period*.......................................................... $893,114,553 $879,514,874
============ ============
====================================================================================================================================
*Undistributed investment income--net................................... $ 6,171,158 $ 6,410,662
============ ============
====================================================================================================================================
</TABLE>
FINANCIAL HIGHLIGHTS
The following per share data and ratios have been derived
from information provided in the financial statements.
<TABLE>
<CAPTION>
For the Six
Months Ended For the Year Ended August 31,
Increase (Decrease) in Net Asset February 28, --------------------------------------------------------
Value: 1998 1997 1996 1995 1994
===================================================================================================================================
<S> <C> <C> <C> <C> <C>
Per Share Operating Net asset value, beginning of period $ 9.89 $ 9.45 $ 9.51 $ 9.57 $ 10.65
Performance: --------- --------- ---------- ---------- ---------
Investment income--net ............. .38 .77 .79 .81 .84
Realized and unrealized gain (loss)
on investments--net ............... .22 .45 (.06) .10 (.78)
--------- --------- ---------- ---------- ---------
Total from investment operations ... .60 1.22 .73 .91 .06
--------- --------- ---------- ---------- ---------
Less dividends and distributions to
Common Stock shareholders:
Investment income--net ............ (.30) (.62) (.63) (.64) (.70)
Realized gain on investments--net . -- -- -- (.12) (.32)
In excess of realized gain on
investments--net .................. -- -- -- (.04 ) --
--------- --------- ---------- ---------- ---------
Total dividends and distributions to
Common Stock shareholders ......... (.30) (.62) (.63) (.80) (1.02)
--------- --------- ---------- ---------- ---------
Effect of Preferred Stock activity:
Dividends to Preferred Stock
shareholders from investment
income--net ....................... (.08) (.16) (.16) (.17) (.12)
--------- --------- ---------- ---------- ---------
Net asset value, end of period ..... $ 10.11 $ 9.89 $ 9.45 $ 9.51 $ 9.57
========= ========= ========== ========== =========
Market price per share, end of
period ............................ $ 10.00 $ 9.50 $ 9.125 $ 8.563 $ 8.50
========= ========= ========== ========== =========
===================================================================================================================================
Total Investment Based on market price per share .... 8.49%++ 11.25% 14.18% 10.88 (16.29%)
Return:** ========= ========= ========== ========== =========
Based on net asset value per share . 5.36%++ 11.84% 6.46% 9.38% (.44%)
========= ========= ========== ========== =========
===================================================================================================================================
Ratios to Average Expenses ........................... .64%* .64% .64% .66% .64%
Net Assets:*** ========= ========= ========== ========== =========
Investment income--net ............. 5.23%* 5.40% 5.57% 5.91% 5.76%
========= ========= ========== ========== =========
===================================================================================================================================
Supplemental Data: Net assets, net of Preferred Stock,
end of period (in thousands) ...... $ 618,115 $ 604,515 $ 577,540 $ 581,211 $ 584,680
========= ========= ========== ========== =========
Preferred Stock outstanding, end of
period (in thousands) ............. $ 275,000 $ 275,000 $ 275,000 $ 275,000 $ 275,000
========= ========= ========== ========== =========
Portfolio turnover ................. 59.17% 78.02% 69.87% 71.95% 100.92%
========= ========= ========== ========== =========
===================================================================================================================================
Leverage: Asset coverage per $1,000 .......... $ 3,248 $ 3,198 $ 3,100 $ 3,113 $ 3,126
========= ========= ========== ========== =========
===================================================================================================================================
Dividends Per Series A--Investment income--net ... $ 484 $ 872 $ 895 $ 922 $ 633
Share on Preferred ========= ========= ========== ========== =========
Stock Outstanding:# Series B--Investment
income--net ....................... $ 486 $ 871 $ 903 $ 946 $ 637
========= ========= ========== ========== =========
Series C--Investment income--net ... $ 415 $ 860 $ 900 $ 947 $ 644
========= ========= ========== ========== =========
Series D--Investment income--net ... $ 411 $ 868 $ 901 $ 1,014 $ 633
========= ========= ========== ========== =========
Series E--Investment income--net ... $ 444 $ 868 $ 895 $ 968 $ 626
========= ========= ========== ========== =========
===================================================================================================================================
</TABLE>
* Annualized.
** Total investment returns based on market value, which
can be significantly greater or lesser than the net
asset value, may result in substantially different
returns. Total investment returns exclude the effects
of sales loads.
*** Do not reflect the effect of dividends to Preferred
Stock shareholders.
# Dividends per share have been adjusted to reflect a
four-for-one stock split on December 1, 1994.
++ Aggregate total investment return.
See Notes to Financial Statements.
12 & 13
<PAGE>
MuniVest Fund, Inc., February 28, 1998
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
MuniVest Fund, Inc. (the "Fund") is registered under the Investment Company Act
of 1940 as a non-diversified, closed-end management investment company. These
unaudited financial statements reflect all adjustments which are, in the opinion
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 determines and makes available for publication the net asset value of its
Common Stock on a weekly basis. The Fund's Common Stock is listed on the
American Stock Exchange under the symbol MVF. The following is a summary of
significant accounting policies followed by the Fund.
(a) Valuation of investments--Municipal bonds are traded primarily in the
over-the-counter markets and are valued at the most recent bid price or yield
equivalent as obtained by the Fund's pricing service from dealers that make
markets in such securities. Financial futures contracts and options thereon,
which are traded on exchanges, are valued at their 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. Securities with remaining maturities of sixty
days or less are valued at amortized cost, which approximates market value.
Securities and assets for which market quotations are not readily available are
valued at fair value as determined in good faith by or under the direction of
the Board of Directors of the Fund, including valuations furnished by a pricing
service retained by the Fund, which may utilize a matrix system for valuations.
The procedures of the pricing service and its valuations are reviewed by the
officers of the Fund under the general supervision of the Board of Directors.
(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.
o Financial futures contracts--The Fund may purchase or sell financial 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
Fund deposits and maintains as collateral such initial margin as required by the
exchange on which the transaction is effected. Pursuant to the contract, the
Fund agrees 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 Fund as unrealized gains or losses.
When the contract is closed, the Fund records 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.
o Options--The Fund is authorized to write covered call options and purchase put
options. When the Fund writes an option, an amount equal to the premium received
by the Fund is reflected as an asset and an equivalent liability. The amount of
the liability is subsequently marked to market to reflect the current market
value of the option written.
When a security is purchased or sold through an exercise of an option, the
related premium paid (or received) is added to (or deducted from) the basis of
the security acquired or deducted from (or added to) the proceeds of the
security sold. When an option expires (or the Fund enters into a closing
transaction), the Fund realizes a gain or loss on the option to the extent of
the premiums received or paid (or gain or loss to the extent the cost of the
closing transaction exceeds the premium paid or received).
Written and purchased options are non-income producing investments.
(c) Income taxes--It is the Fund's policy to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all of its taxable income to its shareholders.
Therefore, no Federal income tax provision is required.
(d) Security transactions and investment income--Security transactions 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 determined on the identified cost basis.
(e) Dividends and distributions--Dividends from net investment income are
declared and paid monthly. Distributions of capital gains are recorded on the
ex-dividend dates.
2. Investment Advisory Agreement and Transactions with Affiliates:
The 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. ("ML &
Co."), which is the limited partner.
FAM is responsible for the management of the Fund's portfolio and provides the
necessary personnel, facilities, equipment and certain other services necessary
to the operations of the Fund. For such services, the Fund pays a monthly fee at
an annual rate of .50% of the Fund's average weekly net assets.
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, PSI, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities, for the six
months ended February 28, 1998 were $483,013,226 and $513,280,629, respectively.
Net realized gains (losses) for the six months ended February 28, 1998 and net
unrealized gains as of February 28, 1998 were as follows:
- --------------------------------------------------------------------------------
Realized Unrealized
Gains (Losses) Gains
- --------------------------------------------------------------------------------
Long-term investments ................... $ 12,443,042 $ 61,164,403
Short-term investments .................. -- 94
Financial futures contracts ............. (4,561,502) --
------------ ------------
Total ................................... $ 7,881,540 $ 61,164,497
============ ============
- --------------------------------------------------------------------------------
As of February 28, 1998, net unrealized appreciation for Federal income tax
purposes aggregated $61,164,497, of which $62,986,788 related to appreciated
securities and $1,822,291 related to depreciated securities. The aggregate cost
of investments at February 28, 1998 for Federal income tax purposes was
$862,819,672.
4. Capital Stock Transactions:
Common Stock
At February 28, 1998, the Fund had one class of shares of Common Stock, par
value $.10 per share, of which 150,000,000 shares were authorized. Shares issued
and outstanding during the six months ended February 28, 1998 and for the year
ended August 31, 1997 remained constant.
Preferred Stock
The Auction Market Preferred Stock ("AMPS") are shares of Preferred Stock of the
Fund that entitle their holders to receive cash dividends at an annual rate that
may vary for the successive dividend periods for each series. The Fund is
authorized to issue 10,000,000 shares of Preferred Stock having a par value of
$.025 per share. The yields in effect February 28, 1998 were as follows: Series
A, 3.40%; Series B, 3.50%; Series C, 3.399%; Series D, 3.39%; and Series E,
3.25%.
As of February 28, 1998, there were 11,000 AMPS shares issued and outstanding
with a liquidation preference of $25,000 per share.
The Fund pays commissions to certain broker-dealers at the end of each auction
at an annual rate of approximately one-quarter of 1% calculated on the proceeds
of each auction. For the six months ended February 28, 1998, Merrill Lynch,
Pierce, Fenner & Smith Inc., an affiliate of FAM, received $152,571 as
commissions.
5. Capital Loss Carryforward:
At August 31, 1997, the Fund had a net capital loss carryforward of
approximately $15,372,000, of which $5,290,000 expires in 2003 and $10,082,000
expires in 2004. This amount will be available to offset like amounts of any
future taxable gains.
6. Subsequent Event:
On March 9, 1998, the Fund's Board of Directors declared an ordinary income
dividend to Common Stock shareholders in the amount of $.045160 per share,
payable on March 30, 1998 to shareholders of record as of March 23, 1998.
14 & 15
<PAGE>
Officers and Directors
Arthur Zeikel, President and Director
Ronald W. Forbes, Director
Cynthia A. Montgomery, Director
Charles C. Reilly, Director
Kevin A. Ryan, Director
Richard R. West, Director
Terry K. Glenn, Executive Vice President
Vincent R. Giordano, Senior Vice President
Donald C. Burke, Vice President
Kenneth A. Jacob, Vice President
Fred K. Stuebe, Vice President
Gerald M. Richard, Treasurer
Patrick D. Sweeney, Secretary
Custodian
The Bank of New York
90 Washington Street
New York, NY 10286
ASE Symbol
MVF
Transfer Agents
Common Stock:
The Bank of New York
101 Barclay Street
New York, NY 10286
Preferred Stock:
IBJ Schroder Bank & Trust Company
One State Street
New York, NY 10004
This report, including the financial information herein, is transmitted to the
shareholders of MuniVest Fund, Inc. for their information. It is not a
prospectus, circular or representation intended for use in the purchase of
shares of the Fund or any securities mentioned in the report. Past performance
results shown in this report should not be considered a representation of future
performance. The Fund has leveraged its Common Stock by issuing Preferred Stock
to provide the Common Stock share holders with a potentially higher rate of
return. Leverage creates risks for Common Stock shareholders, including the
likelihood of greater volatility of net asset value and market price of shares
of the Common Stock, and the risk that fluctuations in the short-term dividend
rates of the Preferred Stock may affect the yield to Common Stock shareholders.
Statements and other information herein are as dated and are subject to change.
MuniVest Fund, Inc.
Box 9011
Princeton, NJ
08543-9011 #10787--2/98
[RECYCLE LOGO] Printed on post-consumer recycled paper
