MUNIVEST
FUND, INC.
[GRAPHIC OMITTED]
STRATEGIC
Performance
Annual Report
August 31, 1999
<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 shareholders 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 American 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.
As a part of its investment strategy, the Fund may invest in certain securities
whose potential income return is inversely related to changes in a floating
interest rate ("inverse floaters"). In general, interest rates on inverse
floaters will decrease when short-term interest rates increase and increase when
short-term interest rates decrease. Investments in inverse floaters may be
characterized as derivative securities and may subject the Fund to the risks of
reduced or eliminated interest payments and losses of invested principal. In
addition, inverse floaters have the effect of providing investment leverage and,
as a result, the market value of such securities will generally be more vola-
tile than that of fixed-rate, tax-exempt securities. To the extent the Fund
invests in inverse floaters, the market value of the Fund's portfolio and the
net asset value of the Fund's shares may also be more volatile than if the Fund
did not invest in such securities.
<PAGE>
MuniVest Fund, Inc., August 31, 1999
DEAR SHAREHOLDER
For the year ended August 31, 1999, the Common Stock of MuniVest Fund, Inc.
earned $0.589 per share income dividends, which included earned and unpaid
dividends of $0.048. This represents a net annualized yield of 6.44%, based on a
month-end per share net asset value of $9.15. Over the same period, the total
investment return on the Fund's Common Stock was -4.42%, based on a change in
per share net asset value from $10.20 to $9.15, and assuming reinvestment of
$0.592 per share income dividends and $0.029 per share capital gains
distributions.
For the six months ended August 31, 1999, the total investment return on the
Fund's Common Stock was -6.29%, based on a change in per share net asset value
from $10.06 to $9.15, and assuming reinvestment of $0.280 per share income
dividends.
For the six months ended August 31, 1999, the Fund's Preferred Stock had an
average yield as follows: Series A, 2.84%; Series B, 2.96%; Series C, 3.46%;
Series D, 3.30%; and Series E, 3.10%.
The Municipal Market Environment
During the six months ended August 31, 1999, long-term bond yields rose
significantly. Steady US economic growth combined with improvement in foreign
economies and inflation concerns put upward pressure on bond yields throughout
the period. Continued strong US employment growth, particularly the decline in
the US unemployment rate to 4.2% in early June, was among the reasons the
Federal Reserve Board cited for raising short-term interest rates in late June
and again in late August. US Treasury bond yields reacted by climbing above
6.25% by mid-August before improving somewhat to 6.06% by August 31, 1999.
During the last six months, yields on long-term US Treasury securities increased
approximately 50 basis points (0.50%).
Long-term tax-exempt bond yields also rose during the last six months. Until
early May, the municipal bond market had been able to withstand much of the
upward pressure on bond yields. However, investor concerns regarding ongoing US
economic strength and the fear of additional moves by the Federal Reserve Board
eventually pushed municipal bond yields higher throughout June, July and August.
During the period, yields on long-term tax-exempt revenue bonds rose almost 55
basis points to 5.83%, as measured by the Bond Buyer Revenue Bond Index.
While the tax-exempt market has slightly underperformed its taxable counterpart
in recent months, the technical conditions are helping to support municipal bond
prices.
During the last six months, more than $115 billion in long-term municipal bonds
was underwritten, a decrease of more than 20% compared to the same period a year
ago. During the past three months, almost $60 billion in municipal bonds was
underwritten. This quarterly issuance represents a decline of approximately 20%
compared to the same three-month period in 1998.
Recently, the supply of new municipal bonds slowed even further. Total issuance
in August 1999 of $14 billion was nearly 40% lower than August 1998 levels.
Additionally, in June and July, investors received more than $40 billion in
coupon income and proceeds from bond maturities and early bond redemptions.
These proceeds have generated significant retail investor interest, easily
absorbing the recent diminished supply.
The recent relative underperformance of the municipal bond market has generated
very attractive tax-exempt bond yield ratios, similar to those that were
available at the end of 1998. In December 1998, long-term, uninsured municipal
bond yields were higher than those of their taxable counterparts. Historically,
long-term tax-exempt bond yields have been approximately 82%-85% of long-term US
Treasury bond yields. Municipal bond yields rose at a faster rate in recent
months than US Treasury bond yields, causing the yield ratio to increase. At May
31, 1999, long-term municipal bond yields were approximately 92% of their
taxable counterparts. At August 31, 1999, long-term uninsured tax-exempt bond
yields were approximately 96% of US Treasury bonds. Current ratios, while lower
than those available at the end of 1998, still represent historically attractive
levels.
Looking ahead, it appears to us that long-term municipal bond yields will trade
in a relatively tight range near current levels. Strong US economic performance
is being balanced by nearly negligible inflation readings, as well as
improvements in productivity in both manufacturing and service industries. We
believe that future moves by the Federal Reserve Board have largely been
discounted by bond investors and are to a great extent reflected in present bond
yields.
Any improvement in bond prices is likely to be contingent upon weakening in both
US employment growth and consumer spending. The 100 basis point rise in US
Treasury bond yields seen thus far this year is likely to negatively affect US
economic growth. The US housing market will be among the first sectors likely to
be affected, as some declines have already been evidenced because of higher
mortgage rates. We believe it is also unrealistic to expect double-digit returns
in US equity markets to continue indefinitely. Much of the US consumer's wealth
is tied to recent stock market appreciation. Any slowing in these incredible
growth rates is likely to reduce consumer spending. We believe that these
factors suggest that the worst of the recent increase in bond yields has passed
and stable, if not slightly improving, bond prices may be expected.
Portfolio Strategy
During the six-month period ended August 31, 1999, the Fund remained essentially
fully invested. We continued to emphasize income-oriented issues rather than
those securities with the potential for high total returns. We viewed recent
increases in tax-exempt bond yields as an opportunity to add higher-yielding
securities to the Fund. As interest rates have not yet declined as we had
expected, we continued to maintain the neutral position we had adopted earlier
in the year.
Looking ahead, we expect to maintain our fully invested position in order to
seek to enhance shareholder income. Since we believe that tax-exempt bond yields
are likely to remain in a relatively narrow range, we do not foresee making any
significant changes to the current composition and structure of the portfolio.
Should the US economy or equity markets exhibit any significant weakness, we are
prepared to adopt a more aggressive posture in order to seek to enhance
portfolio appreciation.
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/ Terry K. Glenn
Terry K. Glenn
President
/s/ Vincent R. Giordano
Vincent R. Giordano
Senior Vice President
/s/ Fred K. Stuebe
Fred K. Stuebe
Vice President and Portfolio Manager
September 30, 1999
Quality Profile
The quality ratings of securities in the Fund as of August 31, 1999 were as
follows:
- --------------------------------------------------------------------------------
Percent of
S&P Rating/Moody's Rating Net Assets
- --------------------------------------------------------------------------------
AAA/Aaa ............................................................ 41.9%
AA/Aa .............................................................. 23.4
A/A ................................................................ 15.0
BBB/Baa ............................................................ 9.6
NR (Not Rated) ..................................................... 2.1
Other* ............................................................. 4.9
- --------------------------------------------------------------------------------
* Temporary investments in short-term municipal securities.
2 & 3
<PAGE>
MuniVest Fund, Inc., August 31, 1999
PROXY RESULTS
During the six-month period ended August 31, 1999, MuniVest Fund, Inc.'s Common
Stock shareholders voted on the following proposals. The proposals were approved
at a shareholders' meeting on May 26, 1999. 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: Terry K. Glenn 57,539,287 1,403,522
Cynthia A. Montgomery 57,447,435 1,495,374
Charles C. Reilly 57,405,032 1,537,777
Kevin A. Ryan 57,421,394 1,521,415
Arthur Zeikel 57,381,045 1,561,764
<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. 57,689,043 398,479 855,287
- --------------------------------------------------------------------------------------------------------------------------
3. To approve an amendment to the Articles Supplementary of the Fund. 26,115,166 2,187,201 1,506,038
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
During the six-month period ended August 31, 1999, MuniVest Fund, Inc.'s
Preferred Stock (Series A, B, C, D and E) shareholders voted on the following
proposals. The proposals were approved at a shareholders' meeting on May 26,
1999. 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: Ronald W. Forbes and Series A 1,929 0
Richard R. West as follows: Series B 1,733 8
Series C 1,544 76
Series D 1,757 5
Series E 2,714 51
- --------------------------------------------------------------------------------------------------------------------------
<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 Series A 1,696 218 14
independent auditors for the current fiscal year as follows: Series B 1,742 0 0
Series C 1,509 1 110
Series D 1,763 0 0
Series E 2,683 32 50
- --------------------------------------------------------------------------------------------------------------------------
3. To approve an amendment to the Articles Supplementary Series A 499 254 4
to the Fund as follows: Series B 528 106 0
Series C 319 316 76
Series D 418 227 14
Series E 531 17 51
- --------------------------------------------------------------------------------------------------------------------------
</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--4.7% BBB Baa1 $ 8,750 Courtland, Alabama, IDB, IDR, Refunding (Champion International
Corporation), Series A, 7.20% due 12/01/2013 $ 9,388
Courtland, Alabama, IDB, Solid Waste Disposal Revenue Bonds (Champion
International Corporation Project), AMT:
BBB Baa1 5,000 7% due 6/01/2022 5,267
BBB Baa1 6,170 Series A, 6.375% due 3/01/2029 6,274
AAA NR* 8,580 Jefferson County, Alabama, Sewer Revenue Bonds, RIB, Series 124, 7.14%
due 2/01/2036 (f)(j) 7,552
NR* Aaa 12,500 Jefferson County, Alabama, Sewer Revenue Refunding Bonds, RITR, Series 7,
7.02% due 2/01/2027 (f)(j) 11,312
===================================================================================================================================
Alaska--1.4% North Slope Boro, Alaska, GO, Series B (c):
AAA Aaa 6,000 5.10%** due 1/01/2002 5,408
AAA Aaa 6,000 5.20%** due 1/01/2003 5,151
Valdez, Alaska, Marine Terminal Revenue Refunding Bonds (Exxon Pipeline
Company Project), VRDN (g):
A1+ VMIG1+ 600 Series A, 3.15% due 12/01/2033 600
A1+ VMIG1+ 300 Series B, 3.15% due 12/01/2033 300
===================================================================================================================================
California--0.5% AAA Aaa 5,000 San Francisco, California, City and County Airport Commission,
International Airport Revenue Refunding Bonds, Second Series, Issue 16B,
5% due 5/01/2024 (i) 4,539
===================================================================================================================================
Colorado--3.7% NR* Aaa 7,500 Arapahoe County, Colorado, Capital Improvement Trust Fund, Highway
Revenue Bonds (SR-E-470 Project), 7% due 8/31/2005 (a) 8,614
Denver, Colorado, City and County Airport Revenue Bonds:
BBB+ Aaa 1,720 AMT, Series C, 6.75% due 11/15/2002 (a) 1,875
BBB+ Baa1 9,850 AMT, Series C, 6.75% due 11/15/2013 10,396
BBB+ Baa1 1,485 AMT, Series C, 6.75% due 11/15/2022 1,549
AAA Baa1 7,340 Series A, 7.25% due 11/15/2002 (a) 8,114
AAA NR* 470 El Paso County, Colorado, Local S/F Mortgage Revenue Bonds, AMT,
Series A, 8% due 9/01/2022 (d)(k) 486
===================================================================================================================================
</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.
ACES(SM) Adjustable Convertible Extendable Securities
AMT Alternative Minimum Tax (subject to)
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
RIB Residual Interest Bonds
RITR Residual Interest Trust Receipts
S/F Single-Family
VRDN Variable Rate Demand Notes
4 & 5
<PAGE>
MuniVest Fund, Inc., August 31, 1999
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>
District of
Columbia--1.2% District of Columbia, GO, Refunding, Series B (i):
AAA Aaa $ 5,000 5.50% due 6/01/2013 $ 4,995
AAA Aaa 5,000 5.50% due 6/01/2014 4,975
===================================================================================================================================
Florida--2.1% NR* Aaa 5,460 Florida HFA, Home Ownership Revenue Refunding Bonds, AMT, 7.90% due
3/01/2022 (d) 5,671
Lee County, Florida, Water and Sewer Revenue Bonds, Series A (h):
AAA Aaa 5,500 4.75% due 10/01/2023 4,775
AAA Aaa 4,650 5% due 10/01/2024 4,224
A1+ VMIG1+ 1,300 Manatee County, Florida, PCR, Refunding (Florida Power and Light Company
Project), VRDN, 3.15% due 9/01/2024 (g) 1,300
A1+ VMIG1+ 100 Saint Lucie County, Florida, PCR, Refunding (Florida Power and Light
Company Project), VRDN, 3.15% due 1/01/2026 (g) 100
AAA Aaa 2,000 Tampa Bay, Florida, Water Utility System Revenue Bonds, Series B, 4.75%
due 10/01/2027 (f) 1,711
===================================================================================================================================
Georgia--4.9% A1 VMIG1+ 1,400 Burke County, Georgia, Development Authority, PCR, Refunding (Georgia
Power Company Plant--Vogtle Project), VRDN, First Series, 3.25% due
4/01/2032 (g) 1,400
Georgia Municipal Electric Authority, Power Revenue Refunding Bonds
(Crossover):
A A3 4,850 Series W, 6.60% due 1/01/2018 5,330
A A3 12,940 Series Y, 6.50% due 1/01/2017 14,189
Georgia State, GO, Series F:
AAA Aaa 6,400 6.50% due 12/01/2006 7,125
AAA Aaa 5,000 6.50% due 12/01/2007 5,595
AAA Aa2 1,550 Georgia State Housing and Finance Authority, Revenue Refunding Bonds,
S/F Mortgage, AMT, Sub-Series A-2, 6.55% due 12/01/2027 (k) 1,594
A A3 4,785 Monroe County, Georgia, Development Authority, PCR, Refunding (Oglethorpe
Power Corporation--Scherer), Series A, 6.80% due 1/01/2011 5,333
===================================================================================================================================
Hawaii--2.7% A A 10,000 Hawaii State Department of Budget and Finance, Special Purpose Revenue
Bonds, 6.25% due 7/01/2021 10,272
AAA Aaa 15,500 Honolulu, Hawaii, City and County Wastewater System, Revenue Refunding
Bonds, Second Bond Resolution (Junior Series), 4.50% due 7/01/2028 (f) 12,509
===================================================================================================================================
Idaho--0.5% NR* Aaa 4,190 Idaho Housing Agency, S/F Mortgage Revenue Refunding Bonds, AMT, Series
E-2, 6.90% due 1/01/2027 4,379
===================================================================================================================================
Illinois--12.4% AAA Aaa 5,880 Chicago, Illinois, GO, Project and Refunding, 5.25% due 1/01/2020 (f) 5,523
AAA NR* 10,930 Chicago, Illinois, GO, Refunding, RIB, Series 126, 7.13% due 1/01/2034
(f)(j) 9,525
Chicago, Illinois, Sales Tax Revenue Bonds (f)(j):
AAA NR* 4,175 RIB, Series 92, 7.105% due 1/01/2030 3,659
NR* Aaa 6,950 RITR, Series 24, 7.02% due 1/01/2027 6,126
AAA Aaa 7,405 Chicago, Illinois, Water Revenue Refunding Bonds, 5.50% due 11/01/2022 (f) 7,141
AAA Aaa 5,300 Cook County, Illinois, GO, Refunding, Series B, 5.375% due 11/15/2018 (c) 5,094
AAA NR* 1,810 Illinois Development Finance Authority Revenue Bonds (Bradley University
Project), 5.375% due 8/01/2019 (h) 1,726
Illinois Educational Facilities Authority, Revenue Refunding Bonds:
NR* NR* 2,500 (Chicago Osteopathic Health System), 7.25% due 11/15/2019 (a) 2,945
AAA Aaa 6,300 (Loyola University), Series A, 5.70% due 7/01/2024 (h) 6,198
Illinois HDA, Revenue Refunding Bonds:
A+ A1 660 (M/F Housing), Series A, 7.375% due 7/01/2017 704
A+ A1 7,000 (M/F Program), Series 5, 6.75% due 9/01/2023 7,450
Illinois Health Facilities Authority Revenue Bonds:
NR* Baa1 2,650 (Holy Cross Hospital Project), 6.70% due 3/01/2014 2,818
A1+ VMIG1+ 500 (Northwestern Memorial Hospital), VRDN, 3.20% due 8/15/2025 (g) 500
NR* Baa1 2,205 (Ravenswood Hospital Medical Center), 6.85% due 6/01/2002 (a) 2,381
NR* Baa1 7,375 (Ravenswood Hospital Medical Center), 6.90% due 6/01/2002 (a) 7,972
AA A1 9,000 Illinois Health Facilities Authority, Revenue Refunding Bonds (Advocate
Health Care), Series A, 5.875% due 8/15/2022 8,938
AAA Aaa 2,000 Illinois State, GO, 5.375% due 2/01/2022 (f) 1,899
A1+ P1 1,900 Joliet, Illinois, Regional Port District, Marine Terminal Revenue
Refunding Bonds (Exxon Project), VRDN, 3.15% 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 2,674
AA- Aaa 5,960 Metropolitan Pier and Exposition Authority, Illinois, Dedicated State Tax
Revenue Bonds, 6.50% due 6/15/2003 (a) 6,495
Regional Transportation Authority, Illinois, Revenue Bonds:
AAA Aaa 3,500 Series A, 7.20% due 11/01/2020 (h) 4,169
AAA Aaa 2,500 Series C, 7.10% due 6/01/2004 (a)(f) 2,816
AAA Aaa 4,000 Series C, 7.75% due 6/01/2020 (f) 5,041
===================================================================================================================================
Indiana--8.8% AAA NR* 5,250 Indiana Bond Bank Revenue Bonds (State Revolving Fund Program), Series A,
6.75% due 2/01/2017 5,722
Indiana Health Facility Financing Authority, Hospital Revenue Refunding
Bonds:
AA Aa3 10,250 (Clarian Health Partners Inc.), Series A, 6% due 2/15/2021 10,382
BBB+ NR* 3,000 (Hancock Memorial Hospital Health Services), 6.125% due 8/15/2017 3,059
NR* Aaa 4,290 Indiana State, HFA, S/F Mortgage Revenue Refunding Bonds, Series A, 6.80%
due 1/01/2017 (k) 4,448
AA- Aa3 7,195 Indiana Transportation Finance Authority, Highway Revenue Bonds, Series A,
6.80% due 12/01/2016 8,215
Indianapolis, Indiana, Local Public Improvement Bond Bank Revenue
Refunding Bonds, Series D:
AA NR* 15,335 6.75% due 2/01/2014 17,257
AA NR* 20,350 6.75% due 2/01/2020 21,785
A1 VMIG1+ 800 Jasper County, Indiana, PCR, Refunding (Northern Indiana Public Service),
VRDN, Series C, 3.20% due 4/01/2019 (g) 800
AA Aa2 2,000 Purdue University, Indiana, University Revenue Bonds (Student Fee), Series
B, 6.70% due 1/01/2005 (a) 2,238
===================================================================================================================================
Iowa--0.3% NR* Aaa 2,170 Iowa Finance Authority, S/F Mortgage Revenue Bonds, AMT, Series A, 7.90%
due 11/01/2022 (d) 2,221
===================================================================================================================================
Louisiana--2.5% BBB+ 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 4,185
A1+ P1 7,300 East Baton Rouge Parish, Louisiana, PCR, Refunding (Exxon Project),
VRDN, 3.15% due 3/01/2022 (g) 7,300
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 3,314
A+ A1 5,000 Louisiana Public Facilities Authority Revenue Bonds (Tulane University),
6.625% due 11/15/2002 (a) 5,426
A1+ VMIG1+ 500 Louisiana State Offshore Terminal Authority, Deepwater Port Revenue
Refunding Bonds (1st Stage A--Loop Inc.), VRDN, 3.15% due 9/01/2008 (g) 500
===================================================================================================================================
</TABLE>
6 & 7
<PAGE>
MuniVest Fund, Inc., August 31, 1999
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>
Massachusetts--4.7% AAA Aaa $ 2,035 Boston, Massachusetts, Water and Sewer Commission Revenue Bonds, 9.25%
due 1/01/2011 (e) $ 2,706
AA- Aa3 3,010 Massachusetts Bay Transportation Authority, Revenue Refunding Bonds
(General Transportation System), Series A, 7% due 3/01/2019 3,506
A+ A1 30,000 Massachusetts State Water Resource Authority Revenue Bonds, Series A,
6.50% due 7/15/2019 33,199
===================================================================================================================================
Michigan--2.6% AAA Aaa 2,500 Coopersville Area, Michigan, Public Schools, GO, 5% due 5/01/2024 (c) 2,248
AA Aa2 2,500 Michigan State Building Authority, Revenue Refunding Bonds (Facilities
Program), Series 1, 4.75% due 10/15/2021 2,175
AA+ NR* 6,180 Michigan State, HDA, Revenue Refunding Bonds, AMT, Series D, 6.85% due
6/01/2026 (k) 6,420
Michigan State Hospital Finance Authority, Revenue Refunding Bonds:
NR* A1 2,500 (McLaren Health Care Corp.), Series A, 5% due 6/01/2028 2,097
NR* VMIG1+ 100 (Mount Clemens Hospital), VRDN, 3.20% due 8/15/2015 (g) 100
AAA Aaa 2,500 Michigan State Strategic Fund, Limited Obligation Revenue Refunding Bonds
(Detroit Edison Company), AMT, Series A, 5.55% due 9/01/2029 (c) 2,378
AAA Aaa 2,190 Montabella Community School District, Michigan, GO, 5.25%
due 5/01/2020 (f) 2,071
AAA Aaa 2,000 Muskegon Heights, Michigan, Public Schools, GO, 5% due 5/01/2024 (c) 1,799
AAA Aaa 2,500 Wayne State University, Michigan, University Revenue Refunding Bonds,
5.125% due 11/15/2029 (f) 2,280
===================================================================================================================================
Minnesota--2.2% Minnesota State, HFA, S/F Mortgage Revenue Bonds:
AA+ Aa2 2,895 AMT, Series L, 6.70% due 7/01/2020 2,994
AA+ Aa2 4,475 AMT, Series M, 6.70% due 7/01/2026 4,628
AA+ Aa2 3,250 Series H, 6.70% due 1/01/2018 3,389
AA+ NR* 7,500 Rochester, Minnesota, Health Care Facilities Revenue Bonds (Mayo
Foundation), Series A, 5.50% due 11/15/2027 7,280
===================================================================================================================================
Mississippi--0.1% NR* P1 600 Jackson County, Mississippi, PCR, Refunding (Chevron U.S.A. Inc. Project),
VRDN, 3.15% due 6/01/2023 (g) 600
===================================================================================================================================
Nevada--1.3% BBB+ Baa1 5,000 Henderson, Nevada, Health Care Facilities Revenue Bonds (Catholic
Healthcare West), 5.375% due 7/01/2026 4,284
Nevada Housing Division Revenue Bonds, AMT:
AAA Aa2 1,235 (Multi-Unit Housing), Issue B, 7.45% due 10/01/2017 (b) 1,344
AAA Aaa 2,730 (S/F Program), Senior Series E, 7% due 10/01/2019 (k) 2,861
NR* Aa2 1,945 (S/F Program), Series A, 6.55% due 10/01/2012 (k) 2,015
A1+ P1 700 Washoe County, Nevada, Water Facility Revenue Bonds (Sierra Pacific Power
Company Project), AMT, VRDN, 3.30% due 12/01/2020 (g) 700
===================================================================================================================================
New Jersey--0.3% AAA Aaa 2,000 New Jersey State Housing and Mortgage Finance Agency Revenue Bonds, Home
Buyer, AMT, Series M, 6.95% due 10/01/2022 (c) 2,138
===================================================================================================================================
New York--19.6% A1+ VMIG1+ 17,650 Long Island Power Authority, New York, Electric System Revenue Bonds,
VRDN, Sub-Series 5, 3.15% due 5/01/2033 (g) 17,650
AAA Aaa 17,385 Long Island Power Authority, New York, Electric System Revenue Refunding
Bonds, Series A, 5.50% due 12/01/2029 (c) 16,934
AAA Aaa 5,000 Metropolitan Transportation Authority, New York, Commuter Facilities
Revenue Refunding Bonds, Series B, 5.125% due 7/01/2024 (h) 4,608
AAA Aaa 18,615 Metropolitan Transportation Authority, New York, Dedicated Tax Fund
Revenue Bonds, Series A, 5% due 4/01/2023 (f) 16,868
New York City, New York, GO:
A- A3 2,800 Series B, 5.875% due 8/15/2016 2,846
A- A3 480 Series D, 6% due 2/15/2005 (a) 515
A- A3 1,670 Series D, 6% due 2/15/2020 1,694
AAA Aaa 4,450 Series I, 5% due 4/15/2024 (c) 4,024
AAA Aaa 7,500 Series J, 5.125% due 5/15/2029 (c) 6,855
New York City, New York, GO, Refunding:
A- A3 3,750 Series C, 5.875% due 2/01/2016 3,816
A- A3 5,000 Series F, 5.875% due 8/01/2024 4,990
A- A3 3,500 Series K, 5.375% due 8/01/2019 3,333
A A1 6,000 New York City, New York, Municipal Water Finance Authority, Water and
Sewer System Revenue Bonds, Series B, 5.75% due 6/15/2026 5,959
New York City, New York, Municipal Water Finance Authority, Water and
Sewer System, Revenue Refunding Bonds:
NR* Aaa 11,920 RITR, Series 10, 7.02% due 6/15/2026 (i)(j) 10,797
A A1 5,750 Series A, 5.50% due 6/15/2023 5,543
A1+ VMIG1+ 1,600 VRDN, Series A, 3.20% due 6/15/2025 (f)(g) 1,600
AA Aa3 17,000 New York City, New York, Transitional Finance Authority Revenue Bonds
(Future Tax Secured), Series C, 4.75% due 5/01/2023 14,677
New York State Dormitory Authority, Revenue Refunding Bonds:
AAA Aaa 6,500 (Consolidated City University System), Series 1, 5.125% due 7/01/2027
(c) 5,964
A- A3 5,000 (Mental Health Services Facilities), Series A, 5.75% due 8/15/2022 4,950
AAA A3 10,025 (Mental Health Services Facilities), Series C, 4.75% due 8/15/2022 (c) 8,687
AAA Aaa 4,000 (Mental Health Services Facilities Improvement), Series G, 4.50% due
8/15/2018 (h) 3,366
NR* NR* 9,000 New York State Energy Research and Development Authority, Gas Facilities
Revenue Bonds, RITR, Series 9, 7.32% due 1/01/2021 (c)(j) 8,579
AAA NR* 5,000 New York State Urban Development Corporation Revenue Bonds (Correctional
Capital Facilities--Service Contract), Series A, 5% due 1/01/2028 (i) 4,491
A1+ VMIG1+ 1,600 Port Authority of New York and New Jersey, Special Obligation Revenue
Refunding Bonds (Versatile Structure Obligation), VRDN, AMT, Series 1R,
3.15% due 8/01/2028 (g) 1,600
A+ Aa3 4,015 Triborough Bridge and Tunnel Authority, New York, Revenue Refunding
Bonds, Series A, 5.125% due 1/01/2022 3,701
===================================================================================================================================
North Carolina--0.3% NR* VMIG1+ 950 North Carolina Medical Care Commission, Hospital Revenue Bonds (Pooled
Financing Project), ACES, Series A, 3.15% due 10/01/2020 (g) 950
AAA Aaa 1,900 University of North Carolina, System Pool Revenue Bonds, Series B, 4.50%
due 10/01/2018 (c) 1,619
===================================================================================================================================
Ohio--1.1% A1+ VMIG1+ 800 Cuyahoga County, Ohio, Hospital Revenue Bonds (The Cleveland Clinic),
VRDN, Series D, 3.20% due 1/01/2026 (g) 800
AAA NR* 6,000 Ohio HFA, Mortgage Revenue Refunding Bonds (Residential), AMT, Series C,
5.75% due 9/01/2030 (d) 5,839
AAA Aaa 2,200 Ohio HFA, S/F Mortgage Revenue Bonds, AMT, RIB, Series B, 10.116% due
3/31/2031 (d)(j) 2,371
===================================================================================================================================
</TABLE>
8 & 9
<PAGE>
MuniVest Fund, Inc., August 31, 1999
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>
Pennsylvania--1.0% A1+ NR* $ 200 Pennsylvania State Higher Educational Facilities Authority, Revenue
Refunding Bonds (Carnegie Mellon University), VRDN, Series B, 3.15% due
11/01/2027 (g) $ 200
AAA Aaa 9,000 Pittsburgh and Allegheny County, Pennsylvania, Public Auditorium Revenue
Bonds (Hotel Room), 5% due 2/01/2024 (h) 8,098
===================================================================================================================================
Rhode Island--0.8% AA+ Aa2 6,000 Rhode Island Housing and Mortgage Finance Corporation, Revenue Refunding
Bonds, INFLOS, AMT, 10.571% due 4/01/2024 (j) 6,533
===================================================================================================================================
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) 4,962
===================================================================================================================================
Tennessee--1.2% AAA Aaa 11,500 Metropolitan Government, Nashville and Davidson County, Tennessee, Water
and Sewer Revenue Refunding Bonds, Series A, 4.75% due 1/01/2022 (f) 10,011
===================================================================================================================================
Texas--6.0% AAA Aaa 3,040 Copperas Cove, Texas, Independent School District, GO, 6.90% due
8/15/2004 (a) 3,363
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 6,385
BBB Baa1 4,000 Gulf Coast, Texas, IDA (Champion International Corp.), 7.125% due
4/01/2010 4,260
A1+ VMIG1+ 400 Gulf Coast Waste Disposal Authority, Texas, PCR, Refunding (Amoco Oil
Company Project), VRDN, 2.70% due 10/01/2017 (g) 400
BBB- Baa2 3,250 Gulf Coast Waste Disposal Authority, Texas, Revenue Refunding Bonds (USX
Corporation Projects), 5.50% due 9/01/2017 2,961
AA Aa1 2,400 Harris County, Texas, GO (Certificates of Obligation), 10% due
10/01/2002 (e) 2,781
Harris County, Texas, Health Facilities Development Corporation, Hospital
Revenue Bonds (a):
AAA Aaa 1,485 (Hermann Hospital Project), 6.375% due 10/01/2004 (c) 1,621
NR* NR* 3,500 (Memorial Hospital System Project), Series A, 6.60% due 6/01/2004 3,853
NR* NR* 2,500 (Memorial Hospital System Project), Series A, 6.625% due 6/01/2004 2,755
Harris County, Texas, Health Facilities Development Corporation, Revenue
Refunding Bonds (e):
NR* Aa3 10,385 RITR, Series 6, 7.695% due 12/01/2027 (j) 10,711
AA Aa3 5,500 (School Health Care System), Series B, 6.25% due 7/01/2027 5,888
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 5,171
===================================================================================================================================
Virginia--1.4% BBB- Baa3 10,000 Pocahontas Parkway Association, Virginia, Toll Road Revenue Bonds,
Senior-Series A, 5.50% due 8/15/2028 9,151
AA+ Aa1 2,980 Virginia State, HDA, M/F Housing Revenue Bonds, Series C, 5.30% due
11/01/2017 2,862
===================================================================================================================================
Washington--6.6% AA+ Aa1 6,955 King County, Washington, GO, Series B, 6.625% due 12/01/2015 7,659
King County, Washington, Sewer Revenue Bonds (f):
AAA Aaa 3,080 5.50% due 1/01/2018 3,027
AAA Aaa 3,255 5.50% due 1/01/2019 3,190
AAA Aaa 3,450 5.50% due 1/01/2020 3,367
AAA Aaa 3,620 5.50% due 1/01/2021 3,518
AAA Aaa 7,410 Snohomish County, Washington, Public Utility District Number 001,
Electric Revenue Refunding Bonds, 5.375% due 12/01/2024 (i) 6,995
NR* Aaa 1,540 Washington State Housing Finance Commission Revenue Bonds (S/F Program),
Series 3N, 5.25% due 12/01/2017 (b)(d)(l) 1,467
Washington State Public Power Supply System, Revenue Refunding Bonds
(Nuclear Project No. 1):
AA- Aa1 3,000 Series A, 7% due 7/01/2008 3,399
AA- Aa1 5,000 Series B, 7.25% due 7/01/2009 5,655
AA- Aa1 14,320 Series B, 7.125% due 7/01/2016 16,643
===================================================================================================================================
Wyoming--1.4% BBB- Baa2 7,475 Sweetwater County, Wyoming, Solid Waste Disposal Revenue Bonds (FMC Corp.
Project), AMT, Series B, 6.90% due 9/01/2024 7,766
A1+ NR* 1,600 Uinta County, Wyoming, PCR, Refunding (Amoco Project), VRDN, 3.15% due
7/01/2026 (g) 1,600
AA Aa2 2,500 Wyoming Community Development Authority Revenue Bonds, S/F Mortgage, AMT,
Series H, 7.10% due 6/01/2012 (k) 2,646
===================================================================================================================================
Total Investments (Cost--$812,461)--96.9% 810,584
Other Assets Less Liabilities--3.1% 25,789
--------
Net Assets--100.0% $836,373
========
===================================================================================================================================
</TABLE>
(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 August 31, 1999.
(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 August 31, 1999.
(k) FHA Insured.
(l) FHLMC Collateralized.
* 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.
Ratings of issues shown have not been audited by Deloitte & Touche LLP.
See Notes to Financial Statements.
10 & 11
<PAGE>
MuniVest Fund, Inc., August 31, 1999
STATEMENT OF ASSETS, LIABILITIES AND CAPITAL
<TABLE>
<CAPTION>
As of August 31, 1999
==================================================================================================================================
<S> <C> <C> <C>
Assets: Investments, at value (identified cost--$812,461,049) (Note 1a) ................. $810,583,962
Receivables:
Securities sold ............................................................... $ 26,500,442
Interest ...................................................................... 10,275,248 36,775,690
------------
Prepaid expenses and other assets ............................................... 20,984
------------
Total assets .................................................................... 847,380,636
------------
==================================================================================================================================
Liabilities: Payables:
Securities purchased .......................................................... 9,052,933
Custodian bank (Note 1f) ...................................................... 884,966
Dividends to shareholders (Note 1e) ........................................... 594,654
Investment adviser (Note 2) ................................................... 344,049 10,876,602
------------
Accrued expenses and other liabilities .......................................... 131,303
------------
Total liabilities ............................................................... 11,007,905
------------
==================================================================================================================================
Net Assets: Net assets ...................................................................... $836,372,731
============
==================================================================================================================================
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;
61,346,288 shares issued and outstanding (Note 4) ............................... $ 6,134,629
Paid-in capital in excess of par ................................................ 565,767,507
Undistributed investment income--net ............................................ 6,537,560
Accumulated realized capital losses on investments--net ......................... (13,326,441)
Accumulated distributions in excess of realized capital gains on
investments--net (Note 1e) ...................................................... (1,863,437)
Unrealized depreciation on investments--net ..................................... (1,877,087)
------------
Total--Equivalent to $9.15 net asset value per share of Common Stock (market
price--$8.6875) ................................................................. 561,372,731
------------
Total capital ................................................................... $836,372,731
============
==================================================================================================================================
</TABLE>
* Auction Market Preferred Stock.
See Notes to Financial Statements.
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
For the Year Ended August 31, 1999
==================================================================================================================================
<S> <C> <C> <C>
Investment Interest and amortization of premium and discount earned ........................ $ 49,955,298
Income (Note 1d):
==================================================================================================================================
Expenses: Investment advisory fees (Note 2) ............................................... $ 4,419,594
Commission fees (Note 4) ........................................................ 695,590
Transfer agent fees ............................................................. 194,851
Professional fees ............................................................... 80,920
Accounting services (Note 2) .................................................... 58,541
Custodian fees .................................................................. 57,792
Printing and shareholder reports ................................................ 47,764
Pricing fees .................................................................... 25,433
Directors' fees and expenses .................................................... 19,712
Listing fees .................................................................... 14,500
Other ........................................................................... 33,868
------------
Total expenses .................................................................. 5,648,565
------------
Investment income--net .......................................................... 44,306,733
------------
==================================================================================================================================
Realized & Unreal- Realized gain on investments--net ............................................... 5,143,958
ized Gain (Loss) on Change in unrealized appreciation/depreciation on investments--net .............. (67,514,851)
Investments--Net ------------
(Notes 1b, 1d & 3): Net Decrease in Net Assets Resulting from Operations ............................ $(18,064,160)
============
==================================================================================================================================
</TABLE>
See Notes to Financial Statements.
12 & 13
<PAGE>
MuniVest Fund, Inc., August 31, 1999
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the Year Ended August 31,
----------------------------
Increase (Decrease) in Net Assets: 1999 1998
===================================================================================================================================
<S> <C> <C> <C>
Operations: Investment income--net ......................................................... $ 44,306,733 $ 45,972,603
Realized gain on investments--net .............................................. 5,143,958 8,274,227
Change in unrealized appreciation/depreciation on investments--net ............. (67,514,851) 10,430,911
------------ ------------
Net increase (decrease) in net assets resulting from operations ................ (18,064,160) 64,677,741
------------ ------------
===================================================================================================================================
Dividends & Investment income--net:
Distributions to Common Stock ................................................................. (35,297,693) (36,155,315)
Shareholders Preferred Stock .............................................................. (8,932,120) (9,767,310)
(Note 1e): In excess of realized gain on investments--net, to Common Stock shareholders ... (1,863,437) --
------------ ------------
Net decrease in net assets resulting from dividends and distributions to
shareholders ................................................................... (46,093,250) (45,922,625)
------------ ------------
===================================================================================================================================
Capital Stock Value of shares issued to Common Stock shareholders in reinvestment of
Transactions dividends and distributions .................................................... 2,260,151 --
(Note 4): ------------ ------------
===================================================================================================================================
Net Assets: Total increase (decrease) in net assets ........................................ (61,897,259) 18,755,116
Beginning of year .............................................................. 898,269,990 879,514,874
------------ ------------
End of year* ................................................................... $836,372,731 $898,269,990
============ ============
===================================================================================================================================
*Undistributed investment income--net ........................................... $ 6,537,560 $ 6,460,640
============ ============
===================================================================================================================================
</TABLE>
See Notes to Financial Statements.
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
The following per share data and ratios have been derived
from information provided in the financial statements. For the Year Ended August 31,
-------------------------------------------------
Increase (Decrease) in Net Asset Value: 1999 1998 1997 1996 1995
===================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating Net asset value, beginning of year ........................ $ 10.20 $ 9.89 $ 9.45 $ 9.51 $ 9.57
Performance: -------- -------- -------- -------- --------
Investment income--net .................................... .73 .76 .77 .79 .81
Realized and unrealized gain (loss) on investments--net ... (1.02) .30 .45 (.06) .10
-------- -------- -------- -------- --------
Total from investment operations .......................... (.29) 1.06 1.22 .73 .91
-------- -------- -------- -------- --------
Less dividends and distributions to Common Stock
shareholders:
Investment income--net ................................... (.58) (.59) (.62) (.63) (.64)
Realized gain on investments--net ........................ -- -- -- -- (.12)
In excess of realized gain on investments--net ........... (.03) -- -- -- (.04)
-------- -------- -------- -------- --------
Total dividends and distributions to Common Stock
shareholders .............................................. (.61) (.59) (.62) (.63) (.80)
-------- -------- -------- -------- --------
Effect of Preferred Stock activity:
Dividends to Preferred Stock shareholders from investment
income--net .............................................. (.15) (.16) (.16) (.16) (.17)
-------- -------- -------- -------- --------
Net asset value, end of year .............................. $ 9.15 $ 10.20 $ 9.89 $ 9.45 $ 9.51
======== ======== ======== ======== ========
Market price per share, end of year ....................... $ 8.6875 $ 10.00 $ 9.50 $ 9.125 $ 8.563
======== ======== ======== ======== ========
===================================================================================================================================
Total Investment Based on market price per share ........................... (7.44%) 11.78% 11.25% 14.18% 10.88%
Return:* ======== ======== ======== ======== ========
Based on net asset value per share ........................ (4.42%) 9.52% 11.84% 6.46% 9.38%
======== ======== ======== ======== ========
===================================================================================================================================
Ratios Based on Total expenses** .......................................... .93% .93% .93% .94% .98%
Average Net Assets ======== ======== ======== ======== ========
Of Common Stock: Total investment income--net** ............................ 7.26% 7.55% 7.85% 8.10% 8.73%
======== ======== ======== ======== ========
Amount of dividends to Preferred Stock shareholders ....... 1.46% 1.60% 1.59% 1.67% 1.87%
======== ======== ======== ======== ========
Investment income--net, to Common Stock shareholders ...... 5.80% 5.95% 6.27% 6.44% 6.86%
======== ======== ======== ======== ========
===================================================================================================================================
Ratios Based on Total expenses ............................................ .64% .64% .64% .64% .66%
Total Average ======== ======== ======== ======== ========
Total Average Total investment income--net .............................. 5.01% 5.19% 5.40% 5.57% 5.91%
Net Assets:**+ ======== ======== ======== ======== ========
===================================================================================================================================
Ratios Based on Dividends to Preferred Stock shareholders ................. 3.25% 3.55% 3.47% 3.59% 3.84%
Average Net Assets ======== ======== ======== ======== ========
Of Preferred Stock:
===================================================================================================================================
Supplemental Data: Net assets, net of Preferred Stock, end of year (in
thousands) ................................................ $561,373 $623,270 $604,515 $577,540 $581,211
======== ======== ======== ======== ========
Preferred Stock outstanding, end of year (in thousands) ... $275,000 $275,000 $275,000 $275,000 $275,000
======== ======== ======== ======== ========
Portfolio turnover ........................................ 101.35% 102.77% 78.02% 69.87% 71.95%
======== ======== ======== ======== ========
===================================================================================================================================
Leverage: Asset coverage per $1,000 ................................. $ 3,041 $ 3,266 $ 3,198 $ 3,100 $ 3,113
======== ======== ======== ======== ========
===================================================================================================================================
Dividends Per Series A--Investment income--net .......................... $ 839 $ 890 $ 872 $ 895 $ 922
Share on Preferred ======== ======== ======== ======== ========
Stock Outstanding: Series B--Investment income--net .......................... $ 815 $ 902 $ 871 $ 903 $ 946
======== ======== ======== ======== ========
Series C--Investment income--net .......................... $ 820 $ 886 $ 860 $ 900 $ 947
======== ======== ======== ======== ========
Series D--Investment income--net .......................... $ 802 $ 880 $ 868 $ 901 $ 1,014
======== ======== ======== ======== ========
Series E--Investment income--net .......................... $ 793 $ 884 $ 868 $ 895 $ 968
======== ======== ======== ======== ========
===================================================================================================================================
</TABLE>
* 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 charges.
** Do not reflect the effect of dividends to Preferred Stock
shareholders.
+ Includes Common and Preferred Stock average net assets.
See Notes to Financial Statements.
14 & 15
<PAGE>
MuniVest Fund, Inc., August 31, 1999
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. The
Fund's financial statements are prepared in accordance with generally accepted
accounting principles, which may require the use of management accruals and
estimates. 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 written or purchased are valued at the last
sale price in the case of exchange-traded options. In the case of options traded
in the over-the-counter market, valuation is the last asked price (options
written) or the last bid price (options purchased). 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 transac-tions 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. Distributions in excess of realized capital gains are due
primarily to differing tax treatments for futures transactions and post-October
losses.
(f) Custodian Bank--The Fund recorded an amount payable to the Custodian Bank
reflecting an overnight overdraft which resulted from a failed trade which
settled the next day.
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, including
proceeds from the issuance of Preferred Stock.
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
year ended August 31, 1999 were $852,724,186 and $893,137,784, respectively.
Net realized gains for the year ended August 31, 1999 and net unrealized losses
as of August 31, 1999 were as follows:
- -------------------------------------------------------------------------------
Realized Unrealized
Gains Losses
- -------------------------------------------------------------------------------
Long-term investments ................................ $2,879,708 $(1,877,087)
Financial futures contracts .......................... 2,264,250 --
---------- -----------
Total ................................................ $5,143,958 $(1,877,087)
========== ===========
- --------------------------------------------------------------------------------
As of August 31, 1999, net unrealized depreciation for Federal income tax
purposes aggregated $1,877,392, of which $23,982,806 related to appreciated
securities and $25,860,198 related to depreciated securities. The aggregate cost
of investments at August 31, 1999 for Federal income tax purposes was
$812,461,354.
4. Capital Stock Transactions:
Common Stock
At August 31, 1999, 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 year ended August 31, 1999 increased by 223,148 as a
result of dividend and distribution reinvestment and for the year ended August
31, 1998 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. The yields in effect
August 31, 1999 were as follows: Series A, 3.20%; Series B, 3.348%; Series C,
3.50%; Series D, 3.495%; and Series E, 3.00%.
Shares issued and outstanding during the years ended August 31, 1999 and August
31, 1998 remained constant.
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 year ended August 31, 1999, Merrill Lynch, Pierce,
Fenner & Smith Incorporated, an affiliate of FAM, received $290,538 as
commissions.
5. Subsequent Event:
On September 8, 1999, the Fund's Board of Directors declared an ordinary income
dividend to Common Stock shareholders in the amount of $.048321 per share,
payable on September 29, 1999 to shareholders of record as of September 22,
1999.
16 & 17
<PAGE>
MuniVest Fund, Inc., August 31, 1999
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders, MuniVest Fund, Inc.
We have audited the accompanying statement of assets, liabilities and capital,
including the schedule of investments, of MuniVest Fund, Inc. as of August 31,
1999, the related statements of operations for the year then ended and changes
in net assets for each of the years in the two-year period then ended, and the
financial highlights for each of the years in the five-year period then ended.
These financial statements and the financial highlights are the responsibility
of the Fund's management. Our responsibility is to express an opinion on these
financial statements and the financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned at August
31, 1999 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of MuniVest Fund, Inc.
as of August 31, 1999, the results of its operations, the changes in its net
assets, and the financial highlights for the respective stated periods in
conformity with generally accepted accounting principles.
Deloitte & Touche LLP
Princeton, New Jersey
October 5, 1999
IMPORTANT TAX INFORMATION (unaudited)
All of the net investment income distributions paid by MuniVest Fund, Inc.
during its taxable year ended August 31, 1999 qualify as tax-exempt interest
dividends for Federal income tax purposes.
Additionally, the following table summarizes the taxable distributions paid by
the Fund during the year.
- --------------------------------------------------------------------------------
Payable Ordinary Long-Term
Date Income Capital Gains*
- --------------------------------------------------------------------------------
Common Stock Shareholders 12/07/98 $.001842 $.028583
- --------------------------------------------------------------------------------
* The entire distribution is subject to the 20% tax rate.
Please retain this information for your records.
YEAR 2000 ISSUES
Many computer systems were designed using only two digits to designate years.
These systems may not be able to distinguish the Year 2000 from the Year 1900
(commonly known as the "Year 2000 Problem"). The Fund could be adversely
affected if the computer systems used by the Fund's management or other Fund
service providers do not properly address this problem before January 1, 2000.
The Fund's management expects to have addressed this problem before then, and
does not anticipate that the services it provides will be adversely affected.
The Fund's other service providers have told the Fund's management that they
also expect to resolve the Year 2000 Problem, and the Fund's management will
continue to monitor the situation as the Year 2000 approaches. However, if the
problem has not been fully addressed, the Fund could be negatively affected. The
Year 2000 Problem could also have a negative impact on the securities in which
the Fund invests, and this could hurt the Fund's investment returns.
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.
OFFICERS AND DIRECTORS
Terry K. Glenn, President and Director
Ronald W. Forbes, Director
Cynthia A. Montgomery, Director
Charles C. Reilly, Director
Kevin A. Ryan, Director
Richard R. West, Director
Arthur Zeikel, Director
Vincent R. Giordano, Senior Vice President
Kenneth A. Jacob, Vice President
Fred K. Stuebe, Vice President
Donald C. Burke, Vice President and Treasurer
William E. Zitelli, 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 Whitehall Bank & Trust Company
One State Street
New York, NY 10004
18 & 19
<PAGE>
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 shareholders 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--8/99
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