MUNIVEST
FUND, INC.
[GRAPHIC OMITTED]
STRATEGIC
Performance
Annual Report
August 31, 2000
<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 pickup 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, income 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 volatile 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, 2000
DEAR SHAREHOLDER
For the year ended August 31, 2000, the Common Stock of MuniVest Fund, Inc.
earned $0.546 per share in income dividends, which included earned and unpaid
dividends of $0.044. This represents a net annualized yield of 6.02%, based on a
month-end per share net asset value of $9.07. Over the same period, the total
investment return on the Fund's Common Stock was +6.21%, based on a change in
per share net asset value from $9.15 to $9.07, and assuming reinvestment of
$0.550 per share income dividends.
For the six months ended August 31, 2000, the total investment return on the
Fund's Common Stock was +9.37%, based on a change in per share net asset value
from $8.58 to $9.07, and assuming reinvestment of $0.266 per share income
dividends.
For the six months ended August 31, 2000, the Fund's Preferred Stock had an
average yield as follows: Series A, 4.42%; Series B, 3.93%; Series C, 4.25%;
Series D, 4.46%; and Series E, 4.21%.
The Municipal Market Environment
During the six months ended August 31, 2000, US domestic economic growth
remained robust. After growing at a 4.2% annual rate in 1999, US domestic
economic growth expanded at a 4.8% rate during the first quarter of 2000 and at
a 5.2% rate during the second quarter. However, despite these significant growth
rates and the lowest unemployment rates since 1970, few price measure indicators
have shown any meaningful signs of future price pressures at the consumer level.
With few signs of any economic slowdown, the Federal Reserve Board continued to
raise short-term interest rates in February, March and May 2000. The Federal
Reserve Board cited both the continued growth of US employment and the continued
strength of US equity markets as reasons for attempting to moderate US economic
growth before inflationary price pressures can occur.
However, since then fixed-income markets have largely ignored strong economic
fundamentals and concentrated upon very positive technical supply factors.
Declining bond issuance--both current, and more importantly, expected future
issuance--helped push bond yields lower into mid-April 2000. In late January and
early February 2000, the US Treasury announced its intention to reduce the
amounts to be auctioned in the quarterly Treasury note and bond auctions.
Furthermore, budgetary surpluses allowed the US Treasury to repurchase
outstanding, higher-couponed Treasury issues, primarily in the 15-year and
longer maturity sector. Both these actions resulted in significant reduction in
the outstanding supply of longer-dated maturity US Treasury debt. Domestic and
international investors soon began to accumulate what was expected to become a
scarce commodity and bond prices quickly rose.
By mid-April 2000, US Treasury bond yields had declined nearly 50 basis points
(0.50%) to 5.67%. During the remainder of the period, US Treasury bond prices
were volatile as strong economic reports and investors' concerns of additional
moves by the Federal Reserve Board occasionally overshadowed the positive
technical position of the long-term US Treasury bond market. By mid-June,
long-term US Treasury bond yields rose to more than 6.00%.
Recently, a number of economic indicators have begun to suggest that the actions
taken by the Federal Reserve Board in 1999 and early 2000 have started to affect
US economic growth. Both new home sales and consumer spending have slowed,
suggesting that economic growth may subside into a 4%-4.5% range by late 2000.
In our opinion, this range of growth was targeted by the Federal Reserve Board
as being sustainable, given current productivity measures, without endangering
the present benign inflationary environment.
By June, investor focus returned to the dwindling supply of long-term US
Treasury securities and bond prices generally rose for the remainder of the
period. The decline in long-term US Treasury bond yields resulted in an inverted
yield curve as short-term and intermediate-term interest rates did not fall
proportionately to long-term interest rates as the Federal Reserve Board was
expected to continue to raise short-term interest rates. The current inversion
has had as much to do with debt reduction and Treasury buybacks as with investor
expectations of slower economic growth.
Tax-exempt bond yields have also declined in recent months. The decline has
largely been in response to the rally in US Treasury securities, as well as a
continued positive technical supply environment. States such as California and
Maryland have announced that their large current and anticipated future budget
surpluses will permit the cancellation or postponement of expected bond
issuance. Additionally, some issuers also have initiated tenders to repurchase
existing debt, reducing the supply of tax-exempt bonds in the secondary market
as well. Given the decline in available long-term US Treasury securities, some
investors who need longer maturity investment vehicles have begun to consider
long-term municipal bonds as potential substitutes. This has further
strengthened the overall positive technical position of the tax-exempt market.
During the last six months, long-term municipal revenue bond yields have
declined more than 50 basis points to 5.72%, their lowest level since late
August 1999, as measured by the Bond Buyer Revenue Bond Index.
August 2000 was one of the few months in recent years in which the tax-exempt
bond market outperformed its taxable counterpart. This has largely been a
reflection of the continuing reduction in new municipal bond issuance and a
moderate increase in investor demand. During the last six months, approximately
$100 billion in long-term tax-exempt bonds was issued, a decline of almost 15%
compared to the same period in 1999. During the last three months, more than $50
billion in new long-term municipal bonds was underwritten, a decline of nearly
10% compared to the same three-month period in 1999.
Recently, investor demand has been stronger, particularly among individual
retail investors. Investors received more than $45 billion in coupon payments,
bond maturities and the proceeds from early redemptions during June and July.
Traditional institutional investors, such as mutual funds, have not played a
major role during recent months as fund flows, although slowing, remained
negative. However, non-traditional buyers, hedge funds and arbitrageurs have
noticeably increased their activity as may be expected when tax-exempt bond
yield ratios exceed 100% of their taxable counterparts, as they have in recent
weeks. Property/casualty insurers, who were unprofitable for a number of years,
have also started to return to the tax-exempt bond market.
However, tax-exempt bond yields have generally declined throughout most of this
year. Much of the resulting price appreciation has been triggered by the
significant improvement in the long-term US Treasury market. While the technical
position of the municipal bond market has been very positive this year, it was
also positive for most of 1999 when tax-exempt bond yields rose dramatically.
From that perspective, it may be too early to become overly positive about the
extent to which the municipal bond market can continue to improve. The US
Treasury bond market has demonstrated on a number of occasions this year that
its positive technical backdrop can quickly be subordinated by resurgent
domestic economic growth.
Portfolio Strategy
During the six months ended August 31, 2000, the reduction in overall bond
issuance and declining bond yields limited portfolio activity. We attempted to
maintain the neutral market position we adopted late last year by adding some
interest rate-sensitive issues to the Fund. As tax-exempt bond yields declined
in recent months, the market value of many of the Fund's holdings appreciated to
such an extent that additional market gains were limited. Some of these issues
were sold to both capture recent gains to the Fund's net asset value and prevent
the Fund from developing an overtly defensive structure. The purchase of these
more aggressively structured securities
2 & 3
<PAGE>
MuniVest Fund, Inc., August 31, 2000
returned the Fund to a more neutral market position.
The Fund remained fully invested throughout the six-month period ended August
31, 2000. A strategy of significant cash reserves remains undesirable as it
reduces shareholder income and, given recent and expected future declines in
tax-exempt bond issuance, becomes problematic to quickly reinvest. We do not
expect any additional actions by the Federal Reserve Board until after the
Presidential election in November, at the earliest. Furthermore, recent signs of
a moderating US economy suggest that a significant and protracted increase in
fixed-income bond yields is unlikely before year-end. In such an environment, we
expect to remain fully invested and use any periods of volatility as
opportunities to seek to enhance the Fund's dividend yield.
The 125 basis point increase in short-term interest rates engineered by the
Federal Reserve Board during the past year resulted in an increase in the Fund's
borrowing cost in the 4%-4.125% range. However, despite this increase, the
tax-exempt yield curve remained steeply positive, generating a material income
benefit to the Fund's Common Stock shareholders from the leveraging of the
Preferred Stock. However, should the spread between short-term and long-term
tax-exempt interest rates narrow, the benefits of the leverage will decline and,
as a result, reduce the yield on the Fund's Common Stock. (For a complete
explanation of the benefits and risks of leveraging, see page 1 of this report
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/ Terry K. Glenn
Terry K. Glenn
President and Director
/s/ Vincent R. Giordano
Vincent R. Giordano
Senior Vice President
/s/ Fred K. Stuebe
Fred K. Stuebe
Vice President and
Portfolio Manager
September 29, 2000
PROXY RESULTS
During the six-month period ended August 31, 2000, MuniVest Fund, Inc.'s Common
Stock shareholders voted on the following proposals. The proposals were approved
at a shareholders' meeting on June 27, 2000. The description of each proposal
and number of shares voted are as follows:
<TABLE>
<CAPTION>
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Shares Voted Shares Voted
For Against
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. To elect the Fund's Board of Directors: Terry K. Glenn 58,077,931 797,578
Cynthia A. Montgomery 58,049,830 825,679
Charles C. Reilly 58,028,622 846,687
Kevin A. Ryan 58,073,494 802,015
Roscoe S. Suddarth 58,043,870 831,639
Arthur Zeikel 58,010,152 865,357
Edward D. Zinbarg 58,032,728 842,781
---------------------------------------------------------------------------------------------------------------------------
<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. 58,211,619 185,716 478,173
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</TABLE>
During the six-month period ended August 31, 2000, 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 June 27,
2000. 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 Directors: Ronald W. Forbes and Series A 1,971 28
Richard R. West as follows: Series B 1,971 26
Series C 1,912 57
Series D 1,853 141
Series E 2,754 22
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<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 1,990 4 5
independent auditors for the current fiscal year as follows: Series B 1,971 0 26
Series C 1,954 16 0
Series D 1,849 52 93
Series E 2,754 21 0
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</TABLE>
4 & 5
<PAGE>
MuniVest Fund, Inc., August 31, 2000
SCHEDULE OF INVESTMENTS (in Thousands)
<TABLE>
<CAPTION>
S&P Moody's Face
STATE Ratings Ratings Amount Issue Value
====================================================================================================================================
<S> <C> <C> <C> <C> <C>
Alabama--3.2% BBB+ Baa1 $ 8,750 Courtland, Alabama, IDB, IDR, Refunding (Champion International
Corporation), Series A, 7.20% due 12/01/2013 $ 9,147
Courtland, Alabama, IDB, Solid Waste Disposal Revenue Bonds
(Champion International Corporation Project), AMT:
BBB+ Baa1 5,000 7% due 6/01/2022 5,106
BBB+ Baa1 7,250 Series A, 6.50% due 9/01/2025 7,282
AAA Aaa 5,000 Jefferson County, Alabama, Sewer Revenue Bonds, Capital Improvement
Warrants, Series A, 5.375% due 2/01/2036 (f) 4,746
A1 VMIG1@ 400 West Jefferson, Alabama, IDB, PCR, Refunding (Alabama Power Company
Project), VRDN, 4.25% due 6/01/2028 (g) 400
====================================================================================================================================
Alaska--2.3% Anchorage, Alaska, Lease Revenue Bonds (Correctional Facility) (i):
AAA Aaa 3,575 6% due 2/01/2014 3,805
AAA Aaa 3,830 6% due 2/01/2016 4,032
North Slope Boro, Alaska, GO, Series B (c):
AAA Aaa 6,000 5.10%** due 1/01/2002 5,646
AAA Aaa 6,000 5.20%** due 1/01/2003 5,385
====================================================================================================================================
Arizona--0.2% A1+ P1 1,300 Maricopa County, Arizona, Pollution Control Corporation, PCR,
Refunding (Arizona Public Service Company), VRDN, Series A,
4.20% due 5/01/2029 (g) 1,300
====================================================================================================================================
Colorado--4.6% Arapahoe County, Colorado, School District Number 005, GO
(Cherry Creek):
AA Aa1 5,750 6% due 12/15/2013 6,190
AA Aa1 4,165 6% due 12/15/2014 4,458
Colorado HFA, Revenue Refunding Bonds (S/F Program), AMT,
Senior Series A-2:
NR* Aa2 2,500 6.60% due 5/01/2028 2,627
NR* Aa2 3,000 7.50% due 4/01/2031 3,449
Denver, Colorado, City and County Airport Revenue Bonds:
A Aaa 1,720 AMT, Series C, 6.75% due 11/15/2002 (a) 1,835
A A2 9,850 AMT, Series C, 6.75% due 11/15/2013 10,329
A A2 1,485 AMT, Series C, 6.75% due 11/15/2022 1,554
AAA A2 7,340 Series A, 7.25% due 11/15/2002 (a) 7,912
====================================================================================================================================
District of Columbia-- AAA Aaa 11,150 District of Columbia, GO, Refunding, Series A, 5.25% due
1.3% 6/01/2027 (c) 10,473
====================================================================================================================================
Florida--0.2% NR* VMIG1@ 1,300 Hillsborough County, Florida, IDA, PCR, Refunding (Tampa Electric
Company Project), VRDN, 4.25% due 9/01/2025 (g) 1,300
====================================================================================================================================
Georgia--5.0% A1 VMIG1@ 3,600 Burke County, Georgia, Development Authority, PCR, Refunding
(Georgia Power Company Plant--Vogtle Project), VRDN, 3rd
Series, 4.25% due 9/01/2025 (g) 3,600
Georgia Municipal Electric Authority, Power Revenue Refunding Bonds:
A A3 4,850 Series W, 6.60% due 1/01/2018 5,458
A A3 4,765 Series Y, 10% due 1/01/2010 6,546
Georgia State, GO, Series F:
AAA Aaa 6,400 6.50% due 12/01/2006 7,101
AAA Aaa 5,000 6.50% due 12/01/2007 5,606
AAA Aa2 980 Georgia State Housing and Finance Authority, Revenue Refunding Bonds,
S/F Mortgage, AMT, Sub-Series A-2, 6.55% due 12/01/2027 (k) 996
AAA Aaa 6,240 Metropolitan Atlanta, Georgia, Rapid Transit Authority, Sales Tax
Revenue Refunding Bonds (Second Indenture), Series A, 6.25%
due 7/01/2008 (c) 6,893
A A3 4,785 Monroe County, Georgia, Development Authority, PCR, Refunding
(Oglethorpe Power Corporation--Scherer), Series A, 6.80% due 1/01/2011 5,399
====================================================================================================================================
Hawaii--1.0% A A2 8,500 Hawaii State Department of Budget and Finance, Special Purpose Revenue
Bonds, 6.25% due 7/01/2021 8,557
====================================================================================================================================
Idaho--0.5% NR* Aaa 3,820 Idaho Housing Agency, S/F Mortgage Revenue Refunding Bonds, AMT,
Series E-2, 6.90% due 1/01/2027 3,938
====================================================================================================================================
Illinois--15.2% Chicago, Illinois, GO:
AAA Aaa 4,250 (Lakefront Millennium Parking Facilities), 5.125% due 1/01/2028 (c) 3,941
AAA Aaa 3,005 (Neighborhoods Alive 21 Program), Series A, 6% due 1/01/2016 (f) 3,181
Chicago, Illinois, GO, Project and Refunding (f):
AAA Aaa 3,000 5.25% due 1/01/2028 2,834
AAA Aaa 7,780 Series A, 5.375% due 1/01/2024 7,533
AAA Aaa 19,080 Series A, 5.375% due 1/01/2034 18,240
AAA Aaa 7,500 Chicago, Illinois, GO, Series A, 6.75% due 1/01/2035 (f) 8,394
AAA Aaa 2,500 Chicago, Illinois, Wastewater Transmission Revenue Bonds, Second Lien,
5.25% due 1/01/2028 (h) 2,355
AAA Aaa 5,000 Cook County, Illinois, Community High School District Number 219,
Niles Township, GO, 6% due 12/01/2017 (f) 5,286
NR* NR* 2,500 Illinois Educational Facilities Authority, Revenue Refunding Bonds
(Chicago Osteopathic Health System), 7.25% due 11/15/2019 (a) 2,979
Illinois HDA Revenue Refunding Bonds:
A+ A1 7,000 (M/F Housing), Series A, 7.375% due 7/01/2017 7,351
A+ A1 660 (M/F Program), Series 5, 6.75% due 9/01/2023 694
Illinois Health Facilities Authority Revenue Bonds:
NR* Baa1 2,650 (Holy Cross Hospital Project), 6.70% due 3/01/2014 2,422
NR* Baa1 2,205 (Ravenswood Hospital Medical Center), 6.85% due 6/01/2002 (a) 2,329
NR* Baa1 7,375 (Ravenswood Hospital Medical Center), 6.90% due 6/01/2002 (a) 7,794
AA A1 6,700 Illinois Health Facilities Authority, Revenue Refunding Bonds
(Advocate Health Care), Series A, 5.875% due 8/15/2022 6,503
AAA Aa2 4,000 Illinois State Sales Tax Revenue Bonds, 6.25% due 6/15/2015 4,325
====================================================================================================================================
</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)
COP Certificates of Participation
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
6 & 7
<PAGE>
MuniVest Fund, Inc., August 31, 2000
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<TABLE>
<CAPTION>
S&P Moody's Face
STATE Ratings Ratings Amount Issue Value
====================================================================================================================================
<S> <C> <C> <C> <C> <C>
Illinois AAA Aaa $ 5,500 Illinois State Sales Tax Revenue Refunding Bonds, Series Q,
(concluded) 6% due 6/15/2012 (c) $ 6,000
NR* Aaa 2,500 Kane Cook and Du Page Counties, Illinois, School District 46,
Elgin, GO, 6.375% due 1/01/2019 (i) 2,707
BBB NR* 2,500 Lansing, Illinois, Tax Increment Revenue Refunding Bonds
(Sales Tax--Landings Redevelopment), 7% due 12/01/2008 2,644
Mc Lean and Woodford Counties, Illinois, Community Unit, School
District Number 005, GO, Refunding (i):
NR* Aaa 5,000 6.25% due 12/01/2014 5,478
NR* Aaa 4,000 6.375% due 12/01/2016 4,380
AAA Aaa 1,500 Metropolitan Pier and Exposition Authority, Illinois, Dedicated
State Tax Revenue Refunding Bonds (McCormick Plant Expansion Project),
5.25% due 12/15/2028 (f) 1,420
Regional Transportation Authority, Illinois, Revenue Bonds:
AAA Aaa 3,500 Series A, 7.20% due 11/01/2020 (h) 4,211
AAA Aaa 2,500 Series C, 7.10% due 6/01/2004 (a)(f) 2,770
AAA Aaa 4,000 Series C, 7.75% due 6/01/2020 (f) 5,127
AAA Aaa 3,000 Will County, Illinois, Environmental Revenue Bonds (Mobil Oil
Refining Corporation Project), AMT, 6.40% due 4/01/2026 3,119
Will County, Illinois, School District Number 122, GO, Series A (i):
NR* Aaa 1,000 6.50% due 11/01/2013 1,113
NR* Aaa 1,375 6.50% due 11/01/2015 1,515
====================================================================================================================================
Indiana--8.4% AAA NR* 5,250 Indiana Bond Bank Revenue Bonds (State Revolving Fund Program),
Series A, 6.75% due 2/01/2017 5,742
AA Aa3 6,500 Indiana Health Facility Financing Authority, Hospital Revenue
Refunding Bonds (Clarian Health Partners Inc.), Series A, 6%
due 2/15/2021 6,568
BBB Baa1 1,900 Indiana State Development Finance Authority, Environmental Revenue
Refunding and Improvement Bonds (USX Corporation Project), 6.25%
due 7/15/2030 1,870
NR* Aaa 4,290 Indiana State, HFA, S/F Mortgage Revenue Refunding Bonds, Series A,
6.80% due 1/01/2017 (k) 4,394
AA Aa2 7,195 Indiana Transportation Finance Authority, Highway Revenue Bonds,
Series A, 6.80% due 12/01/2016 8,333
Indianapolis, Indiana, Local Public Improvement Bond Bank Revenue
Refunding Bonds, Series D:
AA NR* 15,335 6.75% due 2/01/2014 17,564
AA NR* 20,350 6.75% due 2/01/2020 21,564
A1+ VMIG1@ 1,500 Princeton, Indiana, PCR, Refunding (PSI Energy Incorporated Project),
VRDN, 4.20% due 4/01/2022 (g) 1,500
AA Aa2 2,000 Purdue University, Indiana, University Revenue Bonds (Student Fee),
Series B, 6.70% due 1/01/2005 (a) 2,222
====================================================================================================================================
Louisiana--2.2% BBB+ Baa1 4,000 De Soto Parish, Louisiana, Environmental Improvement Revenue
Refunding Bonds (International Paper Co. Project), AMT, Series B,
6.55% due 4/01/2019 4,046
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 3,221
AAA Aaa 10,000 Louisiana Local Government, Environmental Facilities, Community
Development Authority Revenue Bonds (Capital Projects and Equipment
Acquisition), Series A, 6.30% due 7/01/2030 (h) 11,087
====================================================================================================================================
Maine--0.5% AAA Aaa 4,115 Maine State Housing Authority, Mortgage Purchase Revenue Refunding
Bonds, AMT, Series B-2, 6.45% due 11/15/2026 (h) 4,261
====================================================================================================================================
Maryland--0.9% NR* Aa2 7,000 Maryland State Community Development Administration, Department of
Housing and Community Development Revenue Refunding Bonds
(S/F Program), AMT, Fifth Series, 6.75% due 4/01/2026 7,149
====================================================================================================================================
Massachusetts--7.0% AAA Aaa 2,035 Boston, Massachusetts, Water and Sewer Commission Revenue Bonds,
9.25% due 1/01/2011 (e) 2,713
AAA Aa1 11,925 Massachusetts Bay, Massachusetts, Transportation Authority Revenue
Refunding Bonds (Special Assessment), Series A, 5.25% due 7/01/2030 11,322
AA Aa2 3,010 Massachusetts Bay Transportation Authority, Revenue Refunding Bonds
(General Transportation System), Series A, 7% due 3/01/2019 3,547
AA- Aa3 2,775 Massachusetts State Port Authority Revenue Bonds, Series C, 6%
due 7/01/2014 2,983
A+ A1 30,000 Massachusetts State Water Resource Authority Revenue Bonds, Series A,
6.50% due 7/15/2019 34,027
Massachusetts State Water Resource Authority, Revenue Refunding Bonds,
Series A (f):
AAA Aaa 1,000 6% due 8/01/2014 1,079
AAA Aaa 2,480 6% due 8/01/2017 2,637
====================================================================================================================================
Michigan--2.3% AA+ NR* 4,915 Michigan State, HDA, Revenue Refunding Bonds, AMT, Series D, 6.85%
due 6/01/2026 (k) 5,016
Michigan State Hospital Finance Authority, Revenue Refunding Bonds:
AAA Aaa 3,000 (Ascension Health Credit), Series A, 6.125% due 11/15/2023 (c) 3,088
AA Aa2 4,340 (Ascension Health Credit), Series A, 6.125% due 11/15/2026 4,390
NR* A1 2,500 (McLaren Health Care Corp.), Series A, 5% due 6/01/2028 2,043
NR* VMIG1@ 100 (Mt. Clemens Hospital), VRDN, 4.20% due 8/15/2015 (g) 100
AAA Aaa 4,750 Michigan State Strategic Fund, Limited Obligation Revenue Refunding
Bonds (Detroit Edison Company), AMT, Series A, 5.55% due 9/01/2029 (c) 4,623
====================================================================================================================================
Minnesota--2.5% AAA Aaa 3,500 Minneapolis and Saint Paul, Minnesota, Metropolitan Airports
Commission, Airport Revenue Bonds, AMT, Series B, 5.25%
due 1/01/2022 (f) 3,319
Minnesota State, HFA, S/F Mortgage Revenue Bonds:
AA+ Aa1 2,565 AMT, Series L, 6.70% due 7/01/2020 2,662
AA+ Aa1 3,975 AMT, Series M, 6.70% due 7/01/2026 4,127
AA+ Aa1 2,865 Series H, 6.70% due 1/01/2018 2,947
NR* Aa1 6,190 Mounds View, Minnesota, Independent School District Number 621,
GO, Series A, 5.375% due 2/01/2024 6,057
NR* Aaa 1,405 Saint Cloud, Minnesota, Health Care Revenue Refunding Bonds (Saint
Cloud Hospital Obligation Group), Series A, 6.25% due 5/01/2017 (i) 1,510
====================================================================================================================================
Mississippi--0.2% NR* P1 1,400 Jackson County, Mississippi, PCR, Refunding (Chevron U.S.A. Inc.
Project), VRDN, 4.20% due 6/01/2023 (g) 1,400
====================================================================================================================================
Missouri--0.3% AAA NR* 2,500 Missouri State Housing Development Commission, S/F Mortgage Revenue
Bonds (Homeowner Loan), AMT, Series A, 7.50% due 3/01/2031 (b)(d) 2,773
====================================================================================================================================
Nebraska--0.2% AAA NR* 1,980 Nebraska Investment Finance Authority, S/F Housing Revenue Bonds,
AMT, Series C, 6.30% due 9/01/2028 (b)(d)(l) 2,015
====================================================================================================================================
Nevada--2.4% AA Aa2 1,600 Clark County, Nevada, Public Safety, GO, 6% due 3/01/2014 1,719
NR* Aaa 4,290 Clark County, Nevada, School District, GO, RIB, Series 378,
7.39% due 6/15/2015 (c)(j) 4,851
BBB+ Baa1 5,000 Henderson, Nevada, Health Care Facility Revenue Bonds (Catholic
Healthcare West--Saint Rose Dominican Hospital), 5.375% due 7/01/2026 4,091
</TABLE>
8 & 9
<PAGE>
MuniVest Fund, Inc., August 31, 2000
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<TABLE>
<CAPTION>
S&P Moody's Face
STATE Ratings Ratings Amount Issue Value
====================================================================================================================================
<S> <C> <C> <C> <C> <C>
Nevada AAA NR* $ 3,475 Nevada Housing Division, Multi-Unit Housing Revenue Bonds
(concluded) (Arville Electric Project), AMT, 6.60% due 10/01/2023 (b) $ 3,583
Nevada Housing Division Revenue Bonds:
AAA Aa2 1,235 (Multi-Unit Housing), AMT, Issue B, 7.45% due 10/01/2017 (b) 1,320
AAA Aaa 2,420 (S/F Program), AMT, Senior Series E, 7% due 10/01/2019 (k) 2,526
NR* Aa2 1,525 (S/F Program), AMT, Series A, 6.55% due 10/01/2012 (k) 1,560
A1+ P1 700 Washoe County, Nevada, Water Facility Revenue Bonds (Sierra
Pacific Power Company Project), VRDN, AMT, 4.35% due 12/01/2020 (g) 700
====================================================================================================================================
New Jersey--2.2% NR* Aa1 7,555 New Jersey State, GO, RIB, Series 316, 7.64% due 5/01/2013 (j) 8,870
AAA Aaa 2,000 New Jersey State Housing and Mortgage Finance Agency, Home Buyer
Revenue Bonds, AMT, Series M, 6.95% due 10/01/2022 (c) 2,107
AAA Aaa 6,500 New Jersey State Transit Corporation, COP (Federal Transit
Administration Grants), Series A, 6% due 9/15/2013 (h) 7,022
====================================================================================================================================
New Mexico--0.1% A1+ P1 800 Farmington, New Mexico, PCR, Refunding (Arizona Public Service
Company), VRDN, Series A, 4.25% due 5/01/2024 (g) 800
====================================================================================================================================
New York--11.3% A1+ VMIG1@ 2,300 Long Island Power Authority, New York, Electric System Revenue Bonds,
VRDN, Sub-Series 5, 4.15% due 5/01/2033 (g) 2,300
AAA Aaa 2,100 Metropolitan Transportation Authority, New York, Dedicated Tax Fund
Revenue Bonds, Series A, 6.125% due 4/01/2016 (f) 2,255
AAA Aaa 11,800 New York City, New York, City Municipal Water Finance Authority, Water
and Sewer System Revenue Bonds, Series A, 5.50% due 6/15/2032 (f) 11,582
NR* Aa3 6,750 New York City, New York, City Transitional Finance Authority Revenue
Bonds, RIB, Series 283, 7.96% due 11/15/2015 (j) 7,900
New York City, New York, GO:
A- A2 480 Series D, 6% due 2/15/2005 (a) 515
A- A2 5,540 Series I, 6.25% due 4/15/2017 5,841
A A2 1,255 Series I, 6.25% due 4/15/2027 1,309
New York City, New York, GO, Refunding:
AAA Aaa 8,000 Series A, 6.375% due 5/15/2014 (f) 8,886
AAA Aaa 2,800 Series D, 5.75% due 8/01/2009 (f) 3,012
AAA Aaa 4,000 Series H, 5.125% due 8/01/2025 (c) 3,756
AAA Aaa 10,775 New York State Dormitory Authority Revenue Bonds (City University
System--Consolidated Second Generation), Series A, 6.125% due
7/01/2013 (h) 11,861
New York State Dormitory Authority, Revenue Refunding Bonds:
BBB+ Baa1 4,500 (Mount Sinai Health), Series A, 6.75% due 7/01/2020 4,888
AAA NR* 11,875 RIB, Series 305, 7.46% due 5/15/2015 (c)(j) 13,607
A A3 11,000 (State University Educational Facilities), 5.125% due 5/15/2021 10,274
AAA Aaa 5,000 New York State Urban Development Corporation, Revenue Refunding
Bonds (Correctional Capital Facilities), Series A, 6.50%
due 1/01/2011 5,673
====================================================================================================================================
North Carolina--0.1% NR* VMIG1@ 550 North Carolina Medical Care Commission, Hospital Revenue Bonds
(Pooled Financing Project), ACES, Series A, 4.25% due 10/01/2020 (g) 550
====================================================================================================================================
Ohio--0.2% AAA Aaa 1,750 Ohio HFA, S/F Mortgage Revenue Bonds, AMT, RIB, Series B, 9.162%
due 3/31/2031 (d)(j) 1,842
====================================================================================================================================
Oregon--0.3% NR* Aaa 2,000 Portland, Oregon, Airport Way, Urban Renewal and Redevelopment Tax
Allocation Refunding Bonds, Series A, 6% due 6/15/2015 (h) 2,139
====================================================================================================================================
Pennsylvania--0.8% AAA Aaa 4,040 Allegheny County, Pennsylvania, Airport Authority, Airport Revenue
Refunding Bonds (Pittsburgh International Airport), AMT, 6% due
1/01/2013 (f) 4,272
AAA Aaa 2,440 Pennsylvania State Higher Education Assistance Agency Revenue Bonds,
Capital Acquisition, 6.125% due 12/15/2018 (c) 2,586
====================================================================================================================================
Rhode Island--0.8% AA+ Aa2 6,000 Rhode Island Housing and Mortgage Finance Corporation, Revenue
Refunding Bonds, INFLOS, AMT, 9.505% due 4/01/2024 (j) 6,390
====================================================================================================================================
South Carolina--1.1% AAA Aaa 5,500 Anderson County, South Carolina, School District Number 002, GO,
Series B, 5.125% due 3/01/2025 (c) 5,217
AAA Aaa 3,750 Clemson University, South Carolina, University Revenue Bonds, 6.25%
due 5/01/2014 (h) 4,087
====================================================================================================================================
Texas--14.5% AAA Aaa 2,400 Coastal Water Authority, Texas, Contract Revenue Refunding Bonds
(City of Houston Projects), 5% due 12/15/2025 (i) 2,200
AAA Aaa 3,040 Copperas Cove, Texas, Independent School District, GO, 6.90% due
8/15/2004 (a) 3,309
AAA Aaa 8,000 Cypress-Fairbanks, Texas, Independent School District, GO
(Schoolhouse), 5.25% due 2/15/2022 7,672
AA Aa2 5,000 Fort Worth, Texas, Certificates of Obligation, GO, 6.25% due 3/01/2021 5,180
AA NR* 3,000 Gregg County, Texas, Health Facilities Development Corporation,
Hospital Revenue Bonds (Good Shepherd Medical Center Project), 6.875%
due 10/01/2020 3,278
AA- Aa3 10,250 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 10,687
BBB+ Baa1 4,000 Gulf Coast, Texas, IDA (Champion International Corp.), Refunding,
7.125% due 4/01/2010 4,183
AA Aa1 2,400 Harris County, Texas, GO (Certificates of Obligation), 10% due
10/01/2002 (e) 2,658
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) 1,603
NR* NR* 3,500 (Memorial Hospital System Project), Series A, 6.60% due 6/01/2004 3,804
A1+ NR* 7,200 Harris County, Texas, Health Facilities Development Corporation,
Hospital Revenue Refunding Bonds (Methodist Hospital), VRDN, 4.30%
due 12/01/2025 (g) 7,200
Harris County, Texas, Health Facilities Development Corporation,
Revenue Refunding Bonds:
NR* Aa3 10,385 RITR, Series 6, 7.095% due 12/01/2027 (e)(j) 10,871
AAA Aa3 5,500 (School Health Care System), Series B, 6.25% due 7/01/2027 (e) 5,988
AAA Aaa 2,315 Houston, Texas, Water and Sewer System Revenue Bonds, Junior
Lien, Series C, 5.375% due 12/01/2027 (f) 2,227
Houston, Texas, Water and Sewer System Revenue Refunding Bonds,
Junior Lien (f):
AAA Aaa 3,000 Series A, 5.375% due 12/01/2027 2,886
AAA Aaa 15,500 Series B, 5.25% due 12/01/2023 14,818
AAA Aaa 3,125 Jefferson County, Texas, GO, 6.25% due 8/01/2016 (i) 3,369
AAA Aaa 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 5,178
AAA Aaa 2,030 Mansfield, Texas Independent School District, GO, Refunding, 6.625%
due 2/15/2015 2,252
NR* Aaa 5,225 Midway, Texas, Independent School District, GO, Refunding, 6.125%
due 8/15/2014 5,643
Pearland, Texas, Independent School District, GO:
AAA Aaa 1,510 6% due 2/15/2013 1,610
AAA Aaa 1,600 6% due 2/15/2014 1,699
AAA Aaa 1,500 6% due 2/15/2015 1,585
</TABLE>
10 & 11
<PAGE>
MuniVest Fund, Inc., August 31, 2000
SCHEDULE OF INVESTMENTS (concluded) (in Thousands)
<TABLE>
<CAPTION>
S&P Moody's Face
STATE Ratings Ratings Amount Issue Value
====================================================================================================================================
<S> <C> <C> <C> <C> <C>
Texas AAA Aaa $ 2,500 Texas United Independent School District, GO, 5.125% due 8/15/2026 $ 2,332
(concluded) AAA Aaa 4,605 Travis County, Texas, Health Facilities Development Corporation,
Revenue Refunding Bonds (Ascension Health Credit), Series A, 6.25%
due 11/15/2014 (c) 4,957
Ysleta, Texas, Independent School District, Public Facility
Corporation, School Facility Lease Revenue Bonds:
AAA Aaa 2,425 6% due 11/15/2012 2,602
AAA Aaa 1,000 6% due 11/15/2013 1,068
====================================================================================================================================
Washington--5.8% AA+ Aa1 7,955 King County, Washington, GO, Series B, 6.625% due 12/01/2015 8,900
AAA Aaa 2,230 Vancouver, Washington, Water and Sewer Revenue Bonds, 6% due
6/01/2014 (f) 2,370
AAA Aaa 8,100 Washington State, GO, Trust Receipts, Class R, Series 6, 5.77%
due 1/01/2014 (i) 9,059
NR* Aaa 1,535 Washington State Housing Finance Commission Revenue Bonds
(S/F Program), Series 3N, 5.25% due 12/01/2017 (b)(d)(l) 1,458
Washington State Public Power Supply System, Revenue Refunding Bonds
(Nuclear Project No. 1):
AA- Aa1 3,000 Series A, 7% due 7/01/2008 3,414
AAA Aa1 5,000 Series B, 7.25% due 7/01/2009 5,660
AA- Aa1 14,320 Series B, 7.125% due 7/01/2016 16,937
====================================================================================================================================
Wisconsin--0.2% AA Aa2 2,000 Wisconsin Housing and Economic Development Authority, Homeownership
Revenue Bonds, AMT, Series D, 6.45% due 9/01/2027 (k) 2,040
====================================================================================================================================
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 7,566
A1+ NR* 1,800 Unita County, Wyoming, PCR, Refunding (Amoco Project), VRDN, 4.20%
due 7/01/2026 (g) 1,800
AA Aa2 2,500 Wyoming Community Development Authority Revenue Bonds, S/F Mortgage,
AMT, Series H, 7.10% due 6/01/2012 (k) 2,614
====================================================================================================================================
Total Investments (Cost--$788,908)--99.2% 824,182
Other Assets Less Liabilities--0.8% 6,923
--------
Net Assets--100.0% $831,105
========
====================================================================================================================================
</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, 2000.
(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, 2000.
(k) FHA Insured.
(l) FHLMC Collateralized.
* Not Rated.
** Represents a zero coupon bond; the interest rate shown reflects 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.
STATEMENT OF ASSETS, LIABILITIES AND CAPITAL
<TABLE>
<CAPTION>
As of August 31, 2000
===================================================================================================================================
<S> <C> <C> <C>
Assets: Investments, at value (identified cost--$788,908,232) .............................. $ 824,182,217
Cash ............................................................................... 80,197
Receivables:
Interest ......................................................................... $ 11,576,521
Securities sold .................................................................. 8,791,376 20,367,897
-------------
Prepaid expenses and other assets .................................................. 14,347
-------------
Total assets ....................................................................... 844,644,658
-------------
===================================================================================================================================
Liabilities: Payables:
Securities purchased ............................................................. 12,335,810
Dividends to shareholders ........................................................ 655,830
Investment adviser ............................................................... 283,282 13,274,922
-------------
Accrued expenses and other liabilities ............................................. 264,739
-------------
Total liabilities .................................................................. 13,539,661
-------------
===================================================================================================================================
Net Assets: Net assets ......................................................................... $ 831,104,997
=============
===================================================================================================================================
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) $ 275,000,000
Common Stock, par value $.10 per share; 150,000,000 shares authorized; 61,346,288
shares issued and outstanding ...................................................... $ 6,134,629
Paid-in capital in excess of par ................................................... 565,767,485
Undistributed investment income--net ............................................... 4,683,945
Accumulated realized capital losses on investments--net ............................ (53,891,610)
Accumulated distributions in excess of realized capital gains on investments--net .. (1,863,437)
Unrealized appreciation on investments--net ........................................ 35,273,985
-------------
Total--Equivalent to $9.07 net asset value per share of Common Stock
(market price--$8.25) .............................................................. 556,104,997
-------------
Total capital ...................................................................... $ 831,104,997
=============
===================================================================================================================================
</TABLE>
* Auction Market Preferred Stock.
See Notes to Financial Statements.
12 & 13
<PAGE>
MuniVest Fund, Inc., August 31, 2000
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
For the Year Ended August 31, 2000
==========================================================================================================================
<S> <C> <C> <C>
Investment Interest and amortization of premium and discount earned ......... $ 48,263,981
Income:
==========================================================================================================================
Expenses: Investment advisory fees ......................................... $ 4,059,420
Commission fees .................................................. 695,610
Transfer agent fees .............................................. 242,846
Accounting services .............................................. 137,444
Professional fees ................................................ 91,159
Printing and shareholder reports ................................. 55,233
Custodian fees ................................................... 54,683
Pricing fees ..................................................... 28,185
Directors' fees and expenses ..................................... 22,288
Listing fees ..................................................... 19,333
Other ............................................................ 39,402
------------
Total expenses ................................................... 5,445,603
------------
Investment income--net ........................................... 42,818,378
------------
==========================================================================================================================
Realized & Unreal- Realized loss on investments--net ................................ (40,678,042)
ized Gain (Loss) on Change in unrealized appreciation/depreciation on investments--net 37,151,072
Investments--Net: ------------
Net Increase in Net Assets Resulting from Operations ............. $ 39,291,408
============
==========================================================================================================================
</TABLE>
See Notes to Financial Statements.
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the Year Ended August 31,
-----------------------------
Increase (Decrease) in Net Assets: 2000 1999
===================================================================================================================================
<S> <C> <C> <C>
Operations: Investment income--net ......................................................... $ 42,818,378 $ 44,306,733
Realized gain (loss) on investments--net ....................................... (40,678,042) 5,143,958
Change in unrealized appreciation/depreciation on investments--net ............. 37,151,072 (67,514,851)
------------- -------------
Net increase (decrease) in net assets resulting from operations ................ 39,291,408 (18,064,160)
------------- -------------
===================================================================================================================================
Dividends & Investment income--net:
Distributions to Common Stock ................................................................. (33,723,342) (35,297,693)
Shareholders: Preferred Stock .............................................................. (10,835,800) (8,932,120)
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 ................................................................... (44,559,142) (46,093,250)
------------- -------------
===================================================================================================================================
Capital Stock Value of shares issued to Common Stock shareholders in reinvestment of dividends
Transactions: and distributions .............................................................. -- 2,260,151
------------- -------------
===================================================================================================================================
Net Assets: Total decrease in net assets ................................................... (5,267,734) (61,897,259)
Beginning of year .............................................................. 836,372,731 898,269,990
------------- -------------
End of year* ................................................................... $ 831,104,997 $ 836,372,731
============= =============
===================================================================================================================================
*Undistributed investment income--net ........................................... $ 4,683,945 $ 6,537,560
============= =============
===================================================================================================================================
</TABLE>
See Notes to Financial Statements.
14 & 15
<PAGE>
MuniVest Fund, Inc., August 31, 2000
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: 2000 1999 1998 1997 1996
===================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of year .................... $ 9.15 $ 10.20 $ 9.89 $ 9.45 $ 9.51
Operating -------- -------- -------- -------- --------
Performance: Investment income--net ................................ .70 .73 .76 .77 .79
Realized and unrealized gain (loss) on investments--net (.05) (1.02) .30 .45 (.06)
-------- -------- -------- -------- --------
Total from investment operations ...................... .65 (.29) 1.06 1.22 .73
-------- -------- -------- -------- --------
Less dividends and distributions to Common Stock
shareholders:
Investment income--net .............................. (.55) (.58) (.59) (.62) (.63)
In excess of realized gain on investments--net ...... -- (.03) -- -- --
-------- -------- -------- -------- --------
Total dividends and distributions to Common Stock
shareholders .......................................... (.55) (.61) (.59) (.62) (.63)
-------- -------- -------- -------- --------
Effect of Preferred Stock activity:
Dividends to Preferred Stock shareholders from
investment income--net .............................. (.18) (.15) (.16) (.16) (.16)
-------- -------- -------- -------- --------
Net asset value, end of year .......................... $ 9.07 $ 9.15 $ 10.20 $ 9.89 $ 9.45
======== ======== ======== ======== ========
Market price per share, end of year ................... $ 8.25 $ 8.6875 $ 10.00 $ 9.50 $ 9.125
======== ======== ======== ======== ========
===================================================================================================================================
Total Investment Based on market price per share ....................... 1.75% (7.44%) 11.78% 11.25% 14.18%
Return:* ======== ======== ======== ======== ========
Based on net asset value per share .................... 6.21% (4.42%) 9.52% 11.84% 6.46%
======== ======== ======== ======== ========
===================================================================================================================================
Ratios Based on Total expenses** ...................................... 1.01% .93% .93% .93% .94%
Average Net ======== ======== ======== ======== ========
Assets Of Total investment income--net** ........................ 7.95% 7.26% 7.55% 7.85% 8.10%
Common Stock: ======== ======== ======== ======== ========
Amount of dividends to Preferred Stock shareholders ... 2.01% 1.46% 1.60% 1.59% 1.67%
======== ======== ======== ======== ========
Investment income--net, to Common Stock shareholders .. 5.94% 5.80% 5.95% 6.27% 6.44%
======== ======== ======== ======== ========
===================================================================================================================================
Ratios Based on Total expenses ........................................ .67% .64% .64% .64% .64%
Total Average ======== ======== ======== ======== ========
Net Assets:**+ Total investment income--net .......................... 5.26% 5.01% 5.19% 5.40% 5.57%
======== ======== ======== ======== ========
===================================================================================================================================
Ratios Based on Dividends to Preferred Stock shareholders ............. 3.93% 3.25% 3.55% 3.47% 3.59%
Average Net ======== ======== ======== ======== ========
Assets Of
Preferred Stock:
===================================================================================================================================
Supplemental Net assets, net of Preferred Stock, end of year
Data: (in thousands) ........................................ $556,105 $561,373 $623,270 $604,515 $577,540
======== ======== ======== ======== ========
Preferred Stock outstanding, end of year (in thousands) $275,000 $275,000 $275,000 $275,000 $275,000
======== ======== ======== ======== ========
Portfolio turnover .................................... 121.76% 101.35% 102.77% 78.02% 69.87%
======== ======== ======== ======== ========
===================================================================================================================================
Leverage: Asset coverage per $1,000 ............................. $ 3,022 $ 3,041 $ 3,266 $ 3,198 $ 3,100
======== ======== ======== ======== ========
===================================================================================================================================
Dividends Per Series A--Investment income--net ...................... $ 1,030 $ 839 $ 890 $ 872 $ 895
Share on ======== ======== ======== ======== ========
Preferred Series B--Investment income--net ...................... $ 991 $ 815 $ 902 $ 871 $ 903
Stock ======== ======== ======== ======== ========
Outstanding: Series C--Investment income--net ...................... $ 952 $ 820 $ 886 $ 860 $ 900
======== ======== ======== ======== ========
Series D--Investment income--net ...................... $ 978 $ 802 $ 880 $ 868 $ 901
======== ======== ======== ======== ========
Series E--Investment income--net ...................... $ 977 $ 793 $ 884 $ 868 $ 895
======== ======== ======== ======== ========
===================================================================================================================================
</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.
16 & 17
<PAGE>
MuniVest Fund, Inc., August 31, 2000
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 accounting
principles generally accepted in the United States of America, 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
investment strategies to increase or decrease the level of risk to which the
Fund is exposed more quickly and efficiently than transactions in other types of
instruments. 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. Distributions in excess of realized capital gains are due
primarily to differing tax treatments for post-October losses.
(f) Reclassification--Generally accepted accounting principles require that
certain components of net assets be adjusted to reflect permanent differences
between financial and tax reporting. Accordingly, the current year's permanent
book/tax differences of $112,851 have been reclassified between undistributed
net investment income and accumulated net realized capital losses and $22 has
been reclassified between paid-in capital in excess of par and accumulated net
realized capital losses. These reclassifications have no effect on net assets or
net asset value per share.
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
year ended August 31, 2000 were $977,270,248 and $941,844,105, respectively.
Net realized losses for the year ended August 31, 2000 and net unrealized gains
as of August 31, 2000 were as follows:
--------------------------------------------------------------------------------
Realized Unrealized
Losses Gains
--------------------------------------------------------------------------------
Long-term investments ............... $(40,678,042) $ 35,273,985
------------ ------------
Total ............................... $(40,678,042) $ 35,273,985
============ ============
--------------------------------------------------------------------------------
As of August 31, 2000, net unrealized appreciation for Federal income tax
purposes aggregated $35,273,985, of which $37,985,407 related to appreciated
securities and $2,711,422 related to depreciated securities. The aggregate cost
of investments at August 31, 2000 for Federal income tax purposes was
$788,908,232.
4. Capital Stock Transactions:
Common Stock
At August 31, 2000, 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, 2000 remained constant and for the
year ended August 31, 1999 increased by 223,148 as a result of dividend and
distribution reinvestment.
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
at August 31, 2000 were as follows: Series A, 4.25%; Series B, 4.32%; Series C,
4.10%; Series D, 4.10%; and Series E, 3.99%.
Shares issued and outstanding during the years ended August 31, 2000 and August
31, 1999 remained constant.
18 & 19
<PAGE>
MuniVest Fund, Inc., August 31, 2000
NOTES TO FINANCIAL STATEMENTS (concluded)
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, 2000, Merrill Lynch, Pierce,
Fenner & Smith Incorporated, an affiliate of FAM, received $273,974 as
commissions.
5. Capital Loss Carryforward:
At August 31, 2000, the Fund had a net capital loss carryforward of
approximately $18,052,000, all of which expires in 2008. This amount will be
available to offset like amounts of any future taxable gains.
6. Subsequent Event:
On September 7, 2000, the Fund's Board of Directors declared an ordinary income
dividend to Common Stock shareholders in the amount of $.044400 per share,
payable on September 28, 2000 to shareholders of record as of September 18,
2000.
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,
2000, 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 auditing standards generally accepted
in the United States of America. 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, 2000 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, 2000, the results of its operations, the changes in its net
assets, and the financial highlights for the respective stated periods in
conformity with accounting principles generally accepted in the United States of
America.
Deloitte & Touche LLP
Princeton, New Jersey
October 5, 2000
IMPORTANT TAX INFORMATION (unaudited)
All of the net investment income distributions paid by MuniVest Fund, Inc.
during its taxable year ended August 31, 2000 qualify as tax-exempt interest
dividends for Federal income tax purposes.
Additionally, there were no capital gains distributions paid by the Fund during
the year.
Please retain this information for your records.
MANAGED DIVIDEND POLICY
The Fund's dividend policy is to distribute all or a portion of its net
investment income to its shareholders on a monthly basis. 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.
20 & 21
<PAGE>
MuniVest Fund, Inc., August 31, 2000
QUALITY PROFILE (unaudited)
The quality ratings of securities in the Fund as of August 31, 2000 were as
follows:
--------------------------------------------------------------------------------
Percent of
S&P Rating/Moody's Rating Net Assets
--------------------------------------------------------------------------------
AAA/Aaa ......................................................... 50.1%
AA/Aa ........................................................... 25.4
A/A ............................................................. 12.5
BBB/Baa ......................................................... 7.6
NR (Not Rated) .................................................. 0.8
Other* .......................................................... 2.8
--------------------------------------------------------------------------------
* Temporary investments in short-term municipal securities.
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
Roscoe S. Suddarth, Director
Richard R. West, Director
Arthur Zeikel, Director
Edward D. Zinbarg, Director
Vincent R. Giordano, Senior Vice President
Kenneth A. Jacob, Vice President
Fred K. Stuebe, Vice President
Donald C. Burke, Vice President and Treasurer
Jodi M. Pinedo, Secretary
Custodian
The Bank of New York
90 Washington Street
New York, NY 10286
Transfer Agents
Common Stock:
The Bank of New York
101 Barclay Street
New York, NY 10286
Preferred Stock:
The Bank of New York
100 Church Street
New York, NY 10286
ASE Symbol
MVF
22 & 23
<PAGE>
MuniVest Fund, Inc. seeks to provide shareholders with as high a level of
current income exempt from Federal income taxes as is consistent with its
investment policies and prudent investment management by investing primarily in
a portfolio of long-term, investment-grade municipal obligations, the interest
on which is exempt from Federal income taxes in the opinion of bond counsel to
the issuer.
This report, including the financial information herein, is transmitted to
shareholders of MuniVest Fund, Inc. for their information. It is not a
prospectus. 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--8/00
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