MUNIYIELD
FUND, INC.
FUND LOGO
Semi-Annual Report
April 30, 1999
This report, including the financial information herein, is
transmitted to the shareholders of MuniYield 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.
MuniYield Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
Printed on post-consumer recycled paper
MuniYield Fund, Inc.
TO OUR SHAREHOLDERS
For the six months ended April 30, 1999, the Common Stock of
MuniYield Fund, Inc. earned $0.475 per share income dividends, which
included earned and unpaid dividends of $0.073. This represents a
net annualized yield of 6.24%, based on a month-end per share net
asset value of $15.36. Over the same period, the total investment
return on the Fund's Common Stock was +1.34%, based on a change in
per share net asset value from $16.27 to $15.36, and assuming
reinvestment of $0.629 per share ordinary income dividends and
$0.506 per share capital gains distributions.
For the six-month period ended April 30, 1999, the Fund's Auction
Market Preferred Stock had an average yield as follows: Series A,
4.45%; Series B, 4.50%; Series C, 3.58%; Series D, 3.61%; and Series
E, 3.88%.
The Municipal Market Environment
During the six months ended April 30, 1999, long-term bond yields
generally moved higher. From November 1998 through mid-January 1999,
long-term bond yields traded in a relatively narrow range. However,
during February, a number of economic indicators were released that
suggested that economic growth in the United States would likely
remain strong throughout most of 1999. Consequently, long-term US
Treasury bond yields rose more than 60 basis points (0.60%) to 5.70%
by early March. During the remainder of the six-month period, US
Treasury bond yields traded between 5.50% and 5.70% as the lack of
inflationary pressures offset much of the concerns generated by
continued strong economic growth. During most of the period, long-
term, uninsured tax-exempt bond yields exhibited far less volatility
and were largely stable. Also, long-term municipal bond yields rose
just 5 basis points to 5.29% at the end of April 1999, as measured
by the Bond Buyer Revenue Bond Index.
In recent months, the tax-exempt market was better able to withstand
much of the upward pressure on bond yields because of its stronger
technical position. While the continued positive inflationary
environment limited some of the recent increases in taxable bond
yields, a deteriorating supply/demand position helped push taxable
bond yields significantly higher than municipal bond yields. Much of
the US Treasury bond market's underperformance in recent months can
be attributed to the large amounts of taxable corporate issuance.
Large taxable corporate underwritings reduced the demand for US
Government securities in recent months, pushing US Treasury bond
yields higher.
On the other hand, the tax-exempt bond market enjoyed only limited
new-issue supply. During the six months ended April 30, 1999, more
than $123 billion in new long-term tax-exempt securities was
underwritten, a decline of 10% compared to the same period a year
ago. Municipalities issued less than $60 billion in long-term tax-
exempt securities during the three months ended April 30, 1999, a
decline of 25% compared to the April 30, 1998 quarter. More
recently, the rate of new tax-exempt issuance has declined even
further. During April 1999, just over $15 billion in long-term tax-
exempt securities was marketed, a decline of over 33% compared to
April 1998 levels. As municipal bond yields fell and stabilized in
recent quarters, the ability of municipalities to refinance existing
higher-couponed debt declined. This led to a significant decrease in
refunding issuance and an overall drop in new municipal bond supply.
When coupled with ongoing, moderate retail and institutional demand,
the tax-exempt bond market was able to avoid much of the yield
volatility exhibited by US Treasury securities.
Looking ahead, the expected combination of moderate economic growth
in the United States and continued negligible inflation suggests a
relatively stable interest rate environment. However, in recent
years, bond yields reached their annual peaks in early May and
declined for the remainder of the year. A meaningful decline in
fixed-income bond yields would require either evidence of a
significant slowdown in the US economy or the resumption of concerns
regarding renewed shocks to the world's economic system. Currently,
neither condition exists or seems likely in the immediate future. In
our opinion, this suggests a continuation of the narrow trading
ranges seen in recent months.
Portfolio Strategy
During the six-month period ended April 30, 1999, relative stability
within the municipal market enabled the Fund to weather the
volatility that characterized other fixed-income markets. Our
aggressive investment strategy last fall was designed to capitalize
on further declines in long-term interest rates. We changed our
strategy when these declines failed to materialize, and investors
began to expect that bond prices were unlikely to soon revisit the
highs of last fall. Reduced volume, in conjunction with vigorous
investor demand, suggested a continuation of the relative
outperformance experienced by the tax-exempt market. Given this
likely environment, we shifted our emphasis to seek to generate
income for the Fund.
MuniYield Fund, Inc.
April 30, 1999
In our last report to shareholders, we described the limited degree
to which credit spreads within the municipal market were impacted by
global financial market volatility. While a number of corporate-
related issues with international exposure did come under pressure,
the eventual stabilization of global markets, along with the
technical constraints of the tax-exempt marketplace, reversed much
of the damage. The one exception is the healthcare sector, which
continued to suffer from an increasingly unfavorable environment as
nonprofit hospitals face stiffer competition and more stringent
reimbursement standards. Consequently, we remained wary of this
sector, preferring instead to invest assets elsewhere until the
outlook in that sector improves.
For much of the six-month period ended April 30, 1999, the Fund
benefited from an ongoing shortage of product in the short-term tax-
exempt market. Tax-exempt money market funds experienced
unprecedented growth in an environment of declining supply as the
improved financial condition of many state and local municipalities
reduced the need for short-term funding. The resulting imbalance
between supply and demand drove short-term tax-exempt interest rates
to historically low levels relative to their taxable counterparts.
Thus, the Fund enjoyed very favorable borrowing costs in comparison
to what might be the case under more normal market conditions.
Short-term tax-exempt yields exhibited considerable volatility in
recent months. Interest rates paid to the Fund's Preferred Stock
shareholders traded below 3% in December 1998, reflecting heightened
investor demand at year-end. Current short-term interest rate levels
reflect tax season-related pressures, which we expect to abate soon.
During the six-month period ended April 30, 1999, leveraging
generated a significant incremental yield to the Fund's Common Stock
shareholders. Because we believe that the Federal Reserve Board's
monetary policy is likely to remain in a narrow range for the
remainder of the year, we expect short-term tax-exempt interest
rates to remain at, or slightly below, current levels. However,
should the spread between short-term and long-term interest rates
narrow, the benefits of the leverage will decline and, as a result,
reduce the yield to the Fund's Common Stock. (For a complete
explanation of the benefits and risks of leveraging, see page 4 of
this report to shareholders.)
In Conclusion
We appreciate your ongoing interest in MuniYield Fund, Inc., and we
look forward to serving your investment needs in the months and
years to come.
Sincerely,
(Terry K. Glenn)
Terry K. Glenn
President and Director
(Vincent R. Giordano)
Vincent R. Giordano
Senior Vice President
(Theodore R. Jaeckel Jr.)
Theodore R. Jaeckel Jr.
Vice President and Portfolio Manager
June 2, 1999
After more than 20 years of service, Arthur Zeikel recently retired
as Chairman of Merrill Lynch Asset Management, L.P. (MLAM). Mr.
Zeikel served as President of MLAM from 1977 to 1997 and as Chairman
since December 1997. Mr. Zeikel is one of the country's most
respected leaders in asset management and presided over the growth
of Merrill Lynch's asset management business. During his tenure,
client assets under management grew from $300 million to over $500
billion. Mr. Zeikel will remain on Merrill Lynch MuniYield Fund,
Inc.'s Board of Directors. We are pleased to announce that Terry K.
Glenn has been elected President and Director of the Fund. Mr. Glenn
has held the position of Executive Vice President of MLAM since
1983.
Mr. Zeikel's colleagues at MLAM join the Fund's Board of Directors
in wishing him well in his retirement from Merrill Lynch and are
pleased that he will continue as a member of the Fund's Board of
Directors.
MuniYield Fund, Inc.
April 30, 1999
PROXY RESULTS
During the six-month period ended April 30, 1999, MuniYield Fund,
Inc.'s Common Stock shareholders voted on the following proposals.
Proposals 1 and 2 were approved at a shareholders' meeting on April
21, 1999. The meeting was adjourned with respect to Proposal 3. The
description of each proposal and number of shares voted are as
follows:
<TABLE>
<CAPTION>
Shares Shares Withheld
Voted For From Voting
<S> <S> <C> <C>
1. To elect the Fund's Directors: Terry K. Glenn 36,840,956 526,390
Herbert I. London 36,824,783 542,563
Robert R. Martin 36,813,576 553,770
Andre F. Perold 36,824,829 542,517
Arthur Zeikel 36,817,801 549,545
<CAPTION>
Shares Shares Voted Shares Voted
Voted For Against Abstain
<S> <C> <C> <C>
2. To ratify the selection of Deloitte & Touche LLP as the Fund's
independent auditors. 36,685,632 218,304 463,410
3. To approve an amendment to the Articles Supplementary of the Fund. Adjourned Adjourned Adjourned
</TABLE>
During the six-month period ended April 30, 1999, MuniYield Fund
Inc.'s Preferred Stock shareholders (Series A, B, C, D and E) voted
on the following proposals. Proposals 1 and 2 were approved at a
shareholders' meeting on April 21, 1999. The meeting was adjourned
with respect to Proposal 3. The description of each proposal and
number of shares voted are as follows:
<TABLE>
<CAPTION>
Shares Shares Withheld
Voted For From Voting
<S> <C> <C> <C>
1. To elect the Portfolio's Board of Directors:
Terry K. Glenn, James H. Bodurtha,
Herbert I. London, Robert R. Martin,
Joseph L. May, Andre F. Perold, and
Arthur Zeikel as follows: Series A 1,783 0
Series B 1,601 0
Series C 1,659 0
Series D 1,484 0
Series E 2,732 0
<CAPTION>
Shares Shares Voted Shares Voted
Voted For Against Abstain
<S> <S> <C> <C> <C>
2. To select Deloitte & Touche LLP
as the Portfolio's independent
auditors as follows: Series A 1,783 0 0
Series B 1,601 0 0
Series C 1,659 0 0
Series D 1,472 0 0
Series E 2,732 0 0
3. To approve an amendment to the
Articles Supplementary of the Fund Series A, Series B, Series C,
as follows: Series D and Series E Adjourned Adjourned Adjourned
</TABLE>
MuniYield Fund, Inc.
April 30, 1999
THE BENEFITS AND RISKS OF LEVERAGING
MuniYield 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 of 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 of the fund's Common Stock (that is, its
price as listed on the New York Stock Exchange) may, as a result,
decline. Furthermore, if long-term interest rates rise, the Common
Stock's net asset value will reflect the full decline in the price
of the portfolio's investments, since the value of the fund's
Preferred Stock does not fluctuate. In addition to the decline in
net asset value, the market value of the fund's Common Stock may
also decline.
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 these securities.
MuniYield Fund, Inc.
April 30, 1999
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 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.
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.
MuniYield Fund, Inc.
April 30, 1999
PORTFOLIO ABBREVIATIONS
To simplify the listings of MuniYield Fund, Inc.'s portfolio
holdings in the Schedule of Investments, we have abbreviated the
names of many of the securities according to the list below and at
right.
AMT Alternative Minimum Tax (subject to)
COP Certificates of Participation
DATES Daily Adjustable Tax-Exempt Securities
EDA Economic Development Authority
GO General Obligation Bonds
HDA Housing Development Authority
HFA Housing Finance Agency
IDA Industrial Development Authority
IDR Industrial Development Revenue Bonds
PCR Pollution Control Revenue Bonds
RIB Residual Interest Bonds
RITR Residual Interest Trust Receipts
S/F Single-Family
VRDN Variable Rate Demand Notes
<TABLE>
SCHEDULE OF INVESTMENTS (in Thousands)
<CAPTION>
S&P Moody's Face Value
State Ratings Ratings Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
Alabama--0.6% AAA Aaa $ 5,000 Jefferson County, Alabama, Sewer Revenue Bonds, Capital
Improvement Warrants, Series A, 5.75% due 2/01/2038 (h) $ 5,329
Alaska--1.7% NR* NR* 10,050 Valdez, Alaska, Marine Terminal Revenue Refunding Bonds
(Amerada Hess Pipeline Corporation), 6.10% due 2/01/2024 10,476
Valdez, Alaska, Marine Terminal Revenue Refunding Bonds
(Exxon Pipeline Company Project), VRDN (a):
A1+ VMIG1++ 300 Series A, 4.05% due 12/01/2033 300
A1 VMIG1++ 3,100 Series C, 4.05% due 12/01/2033 3,100
Arizona--5.1% AAA Aaa 3,400 Arizona State Wastewater Management Authority, Wastewater
Treatment Financial Assistance Revenue Bonds, Series A, 5.60%
due 7/01/2012 (c) 3,650
Maricopa County, Arizona, Pollution Control Corporation, PCR,
Refunding (Public Service Company of New Mexico Project),
Series A:
BB+ Ba1 5,275 5.75% due 11/01/2022 5,279
BB+ Ba1 9,000 6.30% due 12/01/2026 9,452
NR* B1 5,300 Phoenix, Arizona, IDA, Airport Facility Revenue Refunding Bonds
(America West Airlines Inc.), AMT, 6.30% due 4/01/2023 5,525
B B2 18,500 Pima County, Arizona, IDA, Industrial Revenue Refunding Bonds
(Tucson Electric Power Company Project), Series B, 6% due
9/01/2029 18,548
Arkansas--0.3% NR* NR* 2,815 Little Rock, Arkansas, Capital Improvement Revenue Bonds
(Parks and Recreation Projects), Series A, 5.70% due 1/01/2018 2,824
California AAA Aaa 30,000 Alameda Corridor Transportation Authority, California, Revenue
- --4.8% Bonds, Series 1999-A, 5.27%** due 10/01/2035 (e) 4,406
Foothill/Eastern Corridor Agency, California, Toll Road Revenue
Bonds, Senior Lien, Series A:
BBB- Baa3 34,165 6.33%** due 1/01/2020 11,403
BBB- Baa3 20,245 6.24%** due 1/01/2021 6,367
BBB- Baa3 15,000 6.25%** due 1/01/2022 4,467
Foothill/Eastern Corridor Agency, California, Toll Road Revenue
Bonds, Series A (i):
AAA NR* 10,000 5.75%** due 1/01/2018 3,870
AAA NR* 10,000 5.791%** due 1/01/2020 3,454
AAA NR* 10,000 5.788%** due 1/01/2021 3,260
AAA NR* 10,000 5.783%** due 1/01/2022 3,092
</TABLE>
MuniYield Fund, Inc.
April 30, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<CAPTION>
S&P Moody's Face Value
State Ratings Ratings Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
Colorado--2.2% Denver, Colorado, City and County Airport Revenue Bonds, AMT,
Series D:
BBB+ Aaa $ 700 7.75% due 11/15/2001 (b) $ 781
BBB+ Baa1 8,000 7.75% due 11/15/2013 10,054
NR* NR* 5,000 Denver, Colorado, Urban Renewal Authority, Tax Increment
Revenue Bonds (Pavilions), AMT, 7.75% due 9/01/2016 5,730
Mountain Village Metropolitan District, Colorado, San Miguel
County, GO, Refunding:
NR* NR* 240 7.95% due 12/01/2002 (b) 275
NR* NR* 1,190 7.95% due 12/01/2003 1,281
Connecticut B+ Ba3 22,750 Connecticut State Development Authority, PCR, Refunding
- --3.1% (Connecticut Light & Power Company), Series A, 5.85% due
9/01/2028 22,928
NR* B1 2,445 New Haven, Connecticut, Facility Revenue Bonds (Hill Health
Corporation Project), 9.25% due 5/01/2017 2,671
Florida--1.7% NR* Aaa 10,000 Hillsborough County, Florida, School Board, COP, RITR,
Series 31, 6.32% due 7/01/2021 (k) 10,548
A1+ VMIG1++ 3,900 Saint Lucie County, Florida, PCR, Refunding (Florida Power and
Light Company Project), VRDN, 4% due 1/01/2026 (a) 3,900
Georgia--4.2% NR* Aaa 5,385 Atlanta, Georgia, Urban Residential Finance Authority, College
Facilities Revenue Bonds (Morris Brown College Project),
9.50% due 12/01/2001 (b) 6,288
Burke County, Georgia, Development Authority, PCR, Refunding
(Georgia Power Company Plant--Vogtle Project):
AAA Aaa 8,700 Second Series, 5.25% due 5/01/2034 (c) 8,645
A1 VMIG1++ 4,100 VRDN, Third Series, 4.25% due 9/01/2025 (a) 4,100
A+ NR* 2,030 Columbia County, Georgia, GO (Courthouse/Detention Center
Project), 5.625% due 2/01/2021 2,121
BBB- Baa2 12,700 Effingham County, Georgia, Development Authority, Solid Waste
Disposal Revenue Bonds (Fort James Project), AMT, 5.625% due
7/01/2018 12,735
A1 VMIG1++ 1,400 Putnam County, Georgia, Development Authority, PCR, Refunding
(Georgia Power Company Plant Project), VRDN, Second Series,
4.25% due 9/01/2029 (a) 1,400
Idaho--0.4% AA NR* 3,215 Idaho Housing Agency Revenue Refunding Bonds, S/F Mortgage,
AMT, Senior Series C-2, 7.15% due 7/01/2023 3,386
Illinois--4.0% NR* P1 800 Chicago, Illinois, O'Hare International Airport Revenue Bonds
(American Airlines), DATES, Series A, 4.25% due 12/01/2017 (a) 800
NR* Aaa 3,725 Chicago, Illinois, S/F Mortgage Revenue Bonds, AMT, Series B,
7.625% due 9/01/2027 (f)(g)(l) 4,247
AAA Aaa 3,260 Cook County, Illinois, GO, Refunding, Series B, 5.125% due
11/15/2012 (h) 3,353
BBB Baa3 4,750 East Chicago, Illinois, Industrial Solid Waste Disposal Revenue
Bonds (USG Corporation Project), AMT, 5.50% due 9/01/2028 4,641
BBB Baa1 2,750 Illinois Development Finance Authority, PCR, Refunding
(Illinois Power Company Project), Series A, 7.375% due 7/01/2021 3,173
NR* NR* 2,500 Illinois Educational Facilities Authority, Revenue Refunding
Bonds (Chicago Osteopathic Health System), 7.25% due
11/15/2019 (b) 3,155
Illinois Health Facilities Authority Revenue Bonds (b):
A+ A2 1,500 (Edward Hospital Association Project), 7% due 2/15/2002 1,655
NR* NR* 2,625 (Saint Elizabeth's Hospital--Chicago), 7.75% due 7/01/2004 3,111
BBB- NR* 8,000 Metropolitan Pier and Exposition Authority, Illinois, Hospitality
Facilities Revenue Bonds (McCormick Place Convention
Center), 7% due 7/01/2026 9,675
</TABLE>
MuniYield Fund, Inc.
April 30, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<CAPTION>
S&P Moody's Face Value
State Ratings Ratings Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
Indiana--0.7% NR* A2 $ 1,150 Indiana Health Facilities Financing Authority, Hospital Revenue
Refunding Bonds (Saint Anthony Medical Center), Series A, 7%
due 4/01/2002 (b) $ 1,270
BBB- Baa2 3,930 Indiana State Development Finance Authority, Environmental
Revenue Refunding and Improvement Bonds (USX Corporation
Project), 6.25% due 7/15/2030 4,172
Kentucky--0.6% BBB- Baa3 500 Kenton County, Kentucky, Airport Board, Airport Revenue Bonds
(Special Facilities--Delta Airlines Project), AMT, Series A,
6.125% due 2/01/2022 510
NR* NR* 4,000 Perry County, Kentucky, Solid Waste Disposal Revenue Bonds
(TJ International Project), AMT, 7% due 6/01/2024 4,336
Louisiana NR* A3 30,500 Lake Charles, Louisiana, Harbor and Terminal District, Port
- --6.5% Facilities Revenue Refunding Bonds (Trunkline Long Company
Project), 7.75% due 8/15/2022 34,416
B- NR* 20,000 Port New Orleans, Louisiana, IDR, Refunding (Continental
Grain Company Project), 6.50% due 1/01/2017 19,939
Maryland--0.9% NR* NR* 7,050 Maryland State Energy Financing Administration, Limited
Obligation Revenue Bonds (Cogeneration--AES Warrior Run),
AMT, 7.40% due 9/01/2019 7,602
Massachusetts-- BBB+ A3 2,500 Massachusetts State Development Finance Agency Revenue
2.2% Bonds (Boston University), Series P, 5.45% due 5/15/2059 2,496
A+ Aa3 5,970 Massachusetts State, HFA, S/F Housing Revenue Bonds, AMT,
Series 38, 7.20% due 12/01/2026 6,300
NR* Ba2 5,220 Massachusetts State Health and Educational Facilities Authority,
Revenue Refunding Bonds (Bay Cove Human Services Issue),
Series A, 5.90% due 4/01/2028 5,113
BBB NR* 4,350 Massachusetts State Industrial Financial Agency, Resource
Recovery Revenue Refunding Bonds (Ogden Haverhill Project),
AMT, Series A, 5.60% due 12/01/2019 4,353
Michigan--1.2% NR* NR* 10,000 Wayne Charter County, Michigan, Airport Revenue Bonds, AMT,
RIB, Series 68, 6.305% due 12/01/2017 (e)(k) 10,460
Minnesota--0.4% AA Aa2 3,350 Minnesota State, HFA, S/F Mortgage, AMT, Series A, 7.05% due
7/01/2022 3,484
Mississippi NR* VMIG1++ 2,000 Jackson County, Mississippi, PCR, Refunding (Chevron U.S.A.
- --2.8% Inc. Project), VRDN, 4.25% due 12/01/2016 (a) 2,000
A A2 18,000 Lowndes County, Mississippi, Solid Waste Disposal and PCR,
Refunding (Weyerhaeuser Company Project), Series A, 6.80%
due 4/01/2022 21,720
Missouri--1.6% AAA Aaa 7,445 Missouri State, GO, Fourth State Building, Series A, 5.75% due
8/01/2018 7,991
AAA NR* 5,020 Missouri State Housing Development Commission, S/F Mortgage
Revenue Bonds, Homeownership, AMT, Series B, 7.55% due
9/01/2027 (f)(g) 5,447
Nebraska--0.3% AAA Aaa 2,200 American Public Energy Agency, Nebraska, Gas Supply Revenue
Bonds (Nebraska Public Gas Agency Project), Series A, 5.25%
due 6/01/2009 (c) 2,325
New Jersey A1+ NR* 4,400 New Jersey EDA, Economic Development Revenue Refunding
- --1.6% Bonds (Foreign Trade Zone Project), VRDN, 4.05% due
12/01/2007 (a) 4,400
BBB- NR* 3,000 New Jersey EDA, Revenue Bonds, First Mortgage (Fellowship
Village Project), Series C, 5.50% due 1/01/2028 2,891
BB Ba2 6,000 New Jersey EDA, Special Facility Revenue Bonds (Continental
Airlines Inc. Project), AMT, 5.50% due 4/01/2028 5,969
</TABLE>
MuniYield Fund, Inc.
April 30, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<CAPTION>
S&P Moody's Face Value
State Ratings Ratings Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
New Mexico NR* Ba1 $ 13,500 Farmington, New Mexico, PCR, Refunding (Public Service
- --2.8% Company), Series A, 5.80% due 4/01/2022 $ 13,574
NR* Ba1 10,000 Farmington, New Mexico, PCR, Series B, 5.80% due 4/01/2022 10,055
New York AAA NR* 3,075 Dutchess County, New York, Resource Recovery Agency Revenue
- --13.2% Bonds (Solid Waste System--Forward), Series A, 5.25% due
1/01/2011 (e) 3,196
Long Island Power Authority, New York, Electric System
Revenue Bonds:
AAA Aaa 17,750 Series A, 5.50% due 12/01/2029 (e) 18,305
A1+ VMIG1++ 1,500 VRDN, Sub-Series 5, 4.25% due 5/01/2033 (a) 1,500
A1+ VMIG1++ 1,900 VRDN, Sub-Series 7, 4.10% due 4/01/2025 (a)(e) 1,900
NR* Aaa 5,595 Metropolitan Transportation Authority, New York, Commuter
Facilities Revenue Bonds, RITR, Series 9, 7.77% due 7/01/2026 (k) 7,122
AA Aa3 11,220 New York City, New York, City Transitional Finance Authority
Revenue Bonds, Future Tax Secured, Series B, 4.75% due
11/01/2017 10,831
New York City, New York, GO, Refunding, Series B (b):
A- A3 1,150 7.75% due 2/01/2002 1,284
A- A3 1,555 7.75% due 2/01/2002 1,739
New York City, New York, GO, Series C, Sub-Series C-1:
A- A3 60 7.50% due 8/01/2002 67
A- Aaa 325 7.50% due 8/01/2002 (b) 367
NR* A 5,500 New York City, New York, IDA, Special Facilities Revenue Bonds,
RITR, Series RI-6, 7.545% due 1/01/2024 (k) 6,159
A A1 16,200 New York City, New York, Municipal Water Finance Authority,
Water and Sewer System Revenue Refunding Bonds, Series B,
5.25% due 6/15/2029 16,234
AA NR* 3,000 New York State Dormitory Authority Revenue Bonds (Nursing
Home--Hebrew Home for the Aged), 6.125% due 2/01/2037 (d) 3,247
AAA Aaa 2,545 New York State Dormitory Authority, Revenue Refunding Bonds
(Hamilton College), 4.75% due 7/01/2017 (e) 2,469
NR* Aa 17,525 New York State Environmental Facilities Corporation, PCR,
RITR, Series RI-1, 7.195% due 6/15/2014 (k) 20,310
AA+ Aaa 1,700 New York State Environmental Facilities Corporation, PCR,
State Water, Revolver, Series E, 6.875% due 6/15/2010 1,837
Port Authority of New York and New Jersey, Consolidated
Revenue Bonds:
AA- A1 5,000 93rd Series, 6.125% due 6/01/2094 5,721
AAA Aaa 10,000 116th Series, 4.25% due 10/01/2026 (h) 8,712
North AAA Aaa 1,500 North Carolina Medical Care Commission, Hospital Revenue
Carolina--0.2% Refunding Bonds (Mission--Saint Joseph's Health System),
5.125% due 10/01/2028 (e) 1,483
Ohio--7.5% NR* A2 2,500 Butler County Hospital Facilities Revenue Refunding and
Improvement Bonds (Middletown Hospital), 5% due 11/15/2028 2,353
NR* Baa3 5,500 Franklin County, Ohio, Hospital Revenue Bonds (Doctors Ohio
Health Corp.), Series A, 5.60% due 12/01/2028 5,368
Hamilton County, Ohio, Sales Tax Revenue Bonds (Hamilton
County Football Project) (e):
AAA Aaa 5,000 Series A, 4.75% due 12/01/2027 4,695
AAA Aaa 5,000 Series B, 5% due 12/01/2018 4,969
AAA Aaa 5,000 Ohio State Air Quality Development Authority, Revenue Refunding
Bonds (Ohio Power Company), Series C, 5.15% due 5/01/2026 (c) 4,978
AA- Aa3 5,000 Ohio State Building Authority Revenue Bonds (State Facilities
Adult Correctional Building), Series A, 5% due 4/01/2017 4,994
</TABLE>
MuniYield Fund, Inc.
April 30, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<CAPTION>
S&P Moody's Face Value
State Ratings Ratings Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
Ohio Ohio State Solid Waste Disposal Revenue Bonds (USG
(concluded) Corporation Project), AMT:
BBB Baa3 $16,000 5.60% due 8/01/2032 $ 15,903
BBB Baa3 16,500 5.65% due 3/01/2033 16,512
A- NR* 1,000 Parma, Ohio, Hospital Improvement Revenue Refunding Bonds
(Parma Community General Hospital Association), 5.375% due
11/01/2029 995
AAA Aaa 2,405 Toledo, Ohio, Sewer System Revenue Refunding and Improvement
Bonds (Mortgage), 4.75% due 11/15/2017 (e) 2,333
Oklahoma--1.1% AAA NR* 3,250 Holdenville, Oklahoma, Industrial Authority, Correctional
Facility Revenue Bonds, 6.70% due 7/01/2006 (b)(j) 3,816
BBB- Baa1 5,050 Tulsa, Oklahoma, Municipal Airport Trust, Revenue Refunding
Bonds (American Airlines Project), 6.25% due 6/01/2020 5,323
Oregon--2.7% NR* NR* 4,550 Klamath Falls, Oregon, Electric Revenue Refunding Bonds
(Klamath Cogeneration Project), Senior Lien, 6% due 1/01/2025 4,580
AAA Aaa 14,000 Oregon Health Sciences University Revenue Refunding Bonds
(Capital Appreciation--Insured), Series A, 5.16%** due
7/01/2021 (e) 4,481
AAA Aaa 13,000 Portland, Oregon, Sewer System Revenue Refunding Bonds,
Series A, 5% due 6/01/2014 (h) 13,181
Pennsylvania A NR* 2,975 Berks County, Pennsylvania, Municipal Authority College
- --7.1% Revenue Refunding Bonds (Alvernia College Project), 6% due
11/15/2018 3,149
A1+ VMIG1++ 2,000 Geisinger Authority, Pennsylvania, Health System Revenue
Refunding Bonds (Penn State--Geisinger Health), VRDN,
Series B, 4.20% due 8/15/2028 (a) 2,000
NR* NR* 3,500 Lehigh County, Pennsylvania, General Purpose Authority
Revenue Bonds (Kidspeace Obligation Group), 6% due
11/01/2023 3,474
Pennsylvania Convention Center Authority, Revenue Refunding
Bonds, Series A:
BBB Baa 9,675 6.70% due 9/01/2014 10,739
BBB Baa 5,000 6.75% due 9/01/2019 5,551
NR* NR* 5,000 Pennsylvania Economic Development Financing Authority,
Exempt Facilities Revenue Bonds (National Gypsum Company),
AMT, Series A, 6.25% due 11/01/2027 5,050
AA+ Aa2 5,250 Pennsylvania, HFA, S/F Mortgage Revenue Bonds, AMT, Series 42,
6.85% due 4/01/2025 5,672
AAA Aaa 16,270 Pennsylvania State Higher Educational Facilities Authority,
Health Services Revenue Refunding Bonds (Allegheny Delaware
Valley Obligation), Series C, 5.875% due 11/15/2016 (e) 16,429
A1+ NR* 100 Pennsylvania State Higher Educational Facilities Authority,
Revenue Refunding Bonds (Carnegie Mellon University), VRDN,
Series B, 4.20% due 11/01/2027 (a) 100
Philadelphia, Pennsylvania, IDA, IDR, Refunding (Commercial
Development):
NR* NR* 3,650 (Days Inn), Series B, 6.50% due 10/01/2027 3,883
NR* NR* 3,000 (Doubletree), Series A, 6.50% due 10/01/2027 3,191
South Carolina A- A2 2,500 Richland County, South Carolina, PCR, Refunding (Union Camp
- --1.2% Corporation Project), Series C, 6.55% due 11/01/2020 2,726
NR* NR* 2,485 South Carolina Jobs, EDA, Health Facilities Revenue Refunding
Bonds (First Mortgage--Lutheran Homes), 5.70% due 5/01/2026 2,458
NR* Aaa 5,000 South Carolina State Housing Finance and Development
Authority, S/F Mortgage Revenue Bonds, 5% due 7/01/2034 4,934
</TABLE>
MuniYield Fund, Inc.
April 30, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<CAPTION>
S&P Moody's Face Value
State Ratings Ratings Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
South BBB Baa3 $ 900 South Dakota State Health and Educational Facilities Authority,
Dakota--0.1% Revenue Refunding Bonds (Prairie Lakes), 7.25% due 4/01/2022 $ 996
Tennessee--1.4% NR* NR* 3,000 Hardeman County, Tennessee, Correctional Facilities
Corporation Revenue Bonds, 7.75% due 8/01/2017 3,354
AA Aa3 8,100 Metropolitan Government, Nashville and Davidson County,
Tennessee, Electric Revenue Bonds, Series A, 5.20% due
5/15/2023 8,107
Texas--8.3% AA- Aa3 5,000 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 5,461
A1+ VMIG1++ 1,100 Gulf Coast Waste Disposal Authority, Texas, PCR, Refunding
(Amoco Oil Company Project), VRDN, 4.05% due 10/01/2017 (a) 1,100
AAA Aaa 5,500 Gulf Coast Waste Disposal Authority, Texas, Revenue Refunding
Bonds (Reliant Energy Inc. Project), 4.70% due 7/01/2011 (c) 5,480
A1+ NR* 100 Harris County, Texas, Health Facilities Development Corporation,
Hospital Revenue Refunding Bonds (Methodist Hospital), VRDN,
4.25% due 12/01/2025 (a) 100
Harris County, Texas, Health Facilities Development Corporation,
Medical Facilities Revenue Bonds (Baylor College Medical Project),
Series A (c):
AAA Aaa 1,565 5.375% due 11/15/2013 1,641
AAA Aaa 1,650 5.375% due 11/15/2014 1,726
Houston, Texas, Airport System Revenue Bonds (Special
Facilities--Continental Airlines), AMT:
BB Ba1 10,300 Series B, 6.125% due 7/15/2017 10,569
BB Ba1 9,200 Series C, 6.125% due 7/15/2027 9,410
BB Ba1 5,575 Series C, 5.70% due 7/15/2029 5,532
AA Aa3 2,500 Lubbock, Texas, Health Facilities Development Corporation
Revenue Refunding Bonds (Saint Joseph Health System), 5.25%
due 7/01/2015 2,525
NR* Aa1 7,500 San Antonio, Texas, Electric and Gas Revenue Refunding Bonds,
RIB, Series 77, 6.165% due 2/01/2016 (k) 7,933
AAA Aaa 18,500 Texas Technology, University Revenue Refunding and
Improvement Bonds, Financing System, Sixth Series, 5% due
2/15/2029 (c) 17,941
Utah--0.6% NR* NR* 3,900 Carbon County, Utah, Solid Waste Disposal Revenue Refunding
Bonds (Laidlaw Environmental), AMT, Series A, 7.45% due
7/01/2017 4,242
AAA NR* 880 Utah State, HFA, S/F Mortgage, AMT, Senior Series E-2, 7.15%
due 7/01/2024 (d) 923
Virginia--9.2% NR* NR* 7,030 Dulles Town Center Community Development Authority, Virginia,
Special Assessment Tax (Dulles Town Center Project), 6.25%
due 3/01/2026 7,190
AA Aa2 8,815 Fairfax County, Virginia, Water Authority, Revenue Refunding
Bonds, 6% due 4/01/2022 9,687
NR* NR* 8,650 Peninsula Ports Authority, Virginia, Revenue Refunding Bonds
(Port Facility--Zeigler Coal), 6.90% due 5/02/2022 8,650
NR* NR* 1,000 Pittsylvania County, Virginia, IDA, Revenue Bonds (Exempt-
Facility), AMT, Series A, 7.55% due 1/01/2019 1,089
Pocahontas Parkway Association, Virginia, Toll Road Revenue
Bonds:
BBB- Baa3 16,600 Senior Series A, 5.50% due 8/15/2028 16,361
BBB- Baa3 24,600 Senior Series B, 5.90%** due 8/15/2019 7,665
BBB- Baa3 48,400 Senior Series B, 5.90%** due 8/15/2030 7,863
BBB- Baa3 70,500 Senior Series B, 5.95%** due 8/15/2035 8,461
</TABLE>
MuniYield Fund, Inc.
April 30, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in Thousands)
<CAPTION>
S&P Moody's Face Value
State Ratings Ratings Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
Virginia AA Aa2 $5,000 Virginia Commonwealth Transportation Board, Transportation
(concluded) Revenue Refunding Bonds (U.S. Route 58 Corridor Program),
Series C, 5% due 5/15/2015 $ 5,043
AA+ Aa1 5,125 Virginia State, HDA, Commonwealth Mortgage, Series A, 7.10%
due 1/01/2025 5,285
Washington AAA Aaa 5,000 Central Puget Sound, Washington, Regional Transit Authority,
- --0.6% Sales Tax Revenue Bonds, 5.25% due 2/01/2021 (h) 5,158
West NR* NR* 3,000 Upshur County, West Virginia, Solid Waste Disposal Revenue
Virginia--0.4% Bonds (TJ International Project), AMT, 7% due 7/15/2025 3,306
Wisconsin--0.3% NR* A2 2,710 Wisconsin State Health and Educational Facilities Authority
Revenue Bonds (Mercy Hospital of Janesville Inc.), 6.60% due
8/15/2022 2,918
Total Investments (Cost--$831,314)--103.6% 868,314
Liabilities in Excess of Other Assets--(3.6%) (29,807)
--------
Net Assets--100.0% $838,507
========
<FN>
(a)The interest rate is subject to change periodically based upon
prevailing market rates. The interest rate shown is the rate in
effect at April 30, 1999.
(b)Prerefunded.
(c)AMBAC Insured.
(d)FHA Insured.
(e)MBIA Insured.
(f)FNMA Collateralized.
(g)GNMA Collateralized.
(h)FGIC Insured.
(i)FSA Insured.
(j)Connie Lee Insured.
(k)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 April 30, 1999.
(l)FHLMC Collateralized.
*Not Rated.
**Represents a zero coupon bond; the interest rate shown is the
effective yield at time of purchase by the Fund.
++Highest short-term rating by Moody's Investors Service, Inc.
See Notes to Financial Statements.
</TABLE>
QUALITY PROFILE
The quality ratings of securities in the Fund as of April 30, 1999
were as follows:
Percent of
S&P Rating/Moody's Rating Net Assets
AAA/Aaa 25.4%
AA/Aa 12.9
A/A 12.1
BBB/Baa 20.9
BB/Ba 11.7
B/B 5.5
NR (Not Rated) 11.9
Other* 3.2
[FN]
*Temporary investments in short-term municipal securities.
MuniYield Fund, Inc.
April 30, 1999
FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Statement of Assets, Liabilities and Capital as of April 30, 1999
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$831,313,774)
(Note 1a) $868,313,870
Cash 101,720
Receivables:
Interest $ 12,181,825
Securities sold 9,661,340 21,843,165
------------
Prepaid expenses and other assets 25,510
------------
Total assets 890,284,265
------------
Liabilities: Payables:
Securities purchased 51,397,177
Investment adviser (Note 2) 368,138 51,765,315
------------
Accrued expenses and other liabilities 12,191
------------
Total liabilities 51,777,506
------------
Net Assets: Net assets $838,506,759
============
Capital: Capital Stock (200,000,000 shares authorized) (Note 4):
Preferred Stock, par value $.05 per share (10,000 shares
of AMPS* issued and outstanding at $25,000 per share
liquidation preference) $250,000,000
Common Stock, par value $.10 per share (38,317,103 shares
issued and outstanding) $ 3,831,710
Paid-in capital in excess of par 538,873,283
Undistributed investment income--net 10,532,764
Accumulated realized capital losses on investments--net (1,731,094)
Unrealized appreciation on investments--net 37,000,096
------------
Total--Equivalent to $15.36 net asset value per share of
Common Stock (market price--$15.375) 588,506,759
------------
Total capital $838,506,759
============
<FN>
*Auction Market Preferred Stock.
See Notes to Financial Statements.
</TABLE>
MuniYield Fund, Inc.
April 30, 1999
FINANCIAL INFORMATION (continued)
<TABLE>
Statement of Operations
<CAPTION>
For the Six Months Ended
April 30, 1999
<S> <S> <C> <C>
Investment Income Interest and amortization of premium and discount earned $ 24,084,566
(Note 1d):
Expenses: Investment advisory fees (Note 2) $ 2,109,187
Commission fees (Note 4) 307,650
Transfer agent fees 59,576
Accounting services (Note 2) 46,052
Professional fees 39,000
Custodian fees 29,770
Printing and shareholder reports 20,652
Directors' fees and expenses 20,267
Listing fees 16,917
Pricing fees 9,518
Other 22,087
------------
Total expenses 2,680,676
------------
Investment income--net 21,403,890
------------
Realized & Realized gain on investments--net 8,742,793
Unrealized Gain Change in unrealized appreciation on investments--net (16,728,553)
(Loss) on ------------
Investments--Net Net Increase in Net Assets Resulting from Operations $ 13,418,130
(Notes 1b, ============
1d & 3):
See Notes to Financial Statements.
</TABLE>
MuniYield Fund, Inc.
April 30, 1999
FINANCIAL INFORMATION (continued)
<TABLE>
Statements of Changes in Net Assets
<CAPTION>
For the Six For the
Months Ended Year Ended
April 30, October 31,
Increase (Decrease) in Net Assets: 1999 1998
<S> <S> <C> <C>
Operations: Investment income--net $ 21,403,890 $ 44,789,520
Realized gain on investments--net 8,742,793 30,241,513
Change in unrealized appreciation on investments--net (16,728,553) (12,286,231)
------------ ------------
Net increase in net assets resulting from operations 13,418,130 62,744,802
------------ ------------
Dividends & Investment income--net:
Distributions to Common Stock (18,552,674) (36,306,077)
Shareholders Preferred Stock (2,244,394) (6,658,668)
(Note 1e): Realized gain on investments--net:
Common Stock (24,315,264) (9,726,657)
Preferred Stock (2,733,184) (3,428,543)
------------ ------------
Net decrease in net assets resulting from dividends and
distributions to shareholders (47,845,516) (56,119,945)
------------ ------------
Capital Stock Value of shares issued to Common Stock shareholders in
Transactions reinvestment of dividends and distributions 11,711,691 8,278,056
(Note 4): ------------ ------------
Net Assets: Total increase (decrease) in net assets (22,715,695) 14,902,913
Beginning of period 861,222,454 846,319,541
------------ ------------
End of period* $838,506,759 $861,222,454
============ ============
<FN>
*Undistributed investment income--net $ 10,532,764 $ 9,925,942
============ ============
See Notes to Financial Statements.
</TABLE>
MuniYield Fund, Inc.
April 30, 1999
FINANCIAL INFORMATION (concluded)
<TABLE>
Financial Highlights
<CAPTION>
For the
The following per share data and ratios have been derived Six Months
from information provided in the financial statements. Ended
April 30, For the Year Ended October 31,
Increase (Decrease) in Net Asset Value: 1999 1998 1997 1996 1995
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 16.27 $ 16.09 $ 15.68 $ 15.47 $ 14.35
Operating -------- -------- -------- -------- --------
Performance: Investment income--net .56 1.19 1.24 1.26 1.27
Realized and unrealized gain (loss) on
investments--net (.21) .49 .65 .23 1.34
-------- -------- -------- -------- --------
Total from investment operations .35 1.68 1.89 1.49 2.61
-------- -------- -------- -------- --------
Less dividends and distributions to Common
Stock shareholders:
Investment income--net (.49) (.97) (1.00) (1.04) (1.00)
Realized gain on investments--net (.65) (.26) (.22) -- (.22)
In excess of realized gain on
investments--net -- -- (.01) -- --
-------- -------- -------- -------- --------
Total dividends and distributions to Common
Stock shareholders (1.14) (1.23) (1.23) (1.04) (1.22)
-------- -------- -------- -------- --------
Effect of Preferred Stock activity:
Dividends and distributions to Preferred
Stock shareholders:
Investment income--net (.06) (.18) (.20) (.24) (.23)
Realized gain on investments--net (.06) (.09) (.05) -- (.04)
In excess of realized gain on
investments--net -- -- --++ -- --
-------- -------- -------- -------- --------
Total effect of Preferred Stock activity (.12) (.27) (.25) (.24) (.27)
-------- -------- -------- -------- --------
Net asset value, end of period $ 15.36 $ 16.27 $ 16.09 $ 15.68 $ 15.47
======== ======== ======== ======== ========
Market price per share, end of period $ 15.375 $ 16.875 $ 15.875 $ 14.875 $ 14.375
======== ======== ======== ======== ========
Total Investment Based on market price per share (2.20%)+++ 14.74% 15.56% 10.88% 29.76%
Return:** ======== ======== ======== ======== ========
Based on net asset value per share 1.34%+++ 9.15% 11.11% 8.61% 18.00%
======== ======== ======== ======== ========
Average Net Expenses .63%* .63% .64% .64% .66%
Assets:*** ======== ======== ======== ======== ========
Investment income--net 5.07%* 5.26% 5.48% 5.64% 5.91%
======== ======== ======== ======== ========
Supplemental Net assets, net of Preferred Stock, end
Data: of period (in thousands) $588,507 $611,222 $596,320 $581,124 $573,400
======== ======== ======== ======== ========
Preferred Stock outstanding, end of period
(in thousands) $250,000 $250,000 $250,000 $250,000 $250,000
======== ======== ======== ======== ========
Portfolio turnover 41.73% 91.63% 111.45% 96.74% 52.99%
======== ======== ======== ======== ========
Leverage: Asset coverage per $1,000 $ 3,354 $ 3,445 $ 3,385 $ 3,324 $ 3,294
======== ======== ======== ======== ========
Dividends Series A--Investment income--net $ 216 $ 694 $ 747 $ 894 $ 887
Per Share on ======== ======== ======== ======== ========
Preferred Stock Series B--Investment income--net $ 210 $ 687 $ 751 $ 897 $ 850
Outstanding: ======== ======== ======== ======== ========
Series C--Investment income--net $ 239 $ 643 $ 763 $ 998 $ 827
======== ======== ======== ======== ========
Series D--Investment income--net $ 248 $ 637 $ 762 $ 888 $ 897
======== ======== ======== ======== ========
Series E--Investment income--net $ 214 $ 656 $ 752 $ 875 $ 759
======== ======== ======== ======== ========
<FN>
*Annualized.
**Total investment returns based on market value, which can be
significantly greater or lesser than the net asset value, may result
in substantially different returns. Total investment returns exclude
the effects of sales loads.
***Do not reflect the effect of dividends to Preferred Stock
shareholders.
++Amount is less than $.01 per share.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
MuniYield Fund, Inc.
April 30, 1999
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
MuniYield 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. These
unaudited financial statements reflect all adjustments which are, in
the opinion of management, necessary to a fair statement of the
results for the interim period presented. All such adjustments are
of a normal recurring nature. The Fund determines and makes
available for publication the net asset value of its Common Stock on
a weekly basis. The Fund's Common Stock is listed on the New York
Stock Exchange under the symbol MYD. 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 price 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-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 their 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.
* 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.
* 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.
MuniYield Fund, Inc.
April 30, 1999
NOTES TO FINANCIAL STATEMENTS (concluded)
(e) Dividends and distributions--Dividends from net investment
income are declared and paid monthly. Distributions of capital gains
are recorded on the ex-dividend dates.
2. Investment Advisory Agreement and
Transactions with Affiliates:
The Fund has entered into an Investment Advisory Agreement with Fund
Asset Management, L.P. ("FAM"). The general partner of FAM is
Princeton Services, Inc. ("PSI"), an indirect wholly-owned
subsidiary of Merrill Lynch & Co., Inc. ("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 0.50% 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 six months ended April 30, 1999 were $382,716,603 and
$344,311,408, respectively.
Net realized gains for the six months ended April 30, 1999 and net
unrealized gains as of April 30, 1999 were as follows:
Realized Unrealized
Gains Gains
Long-term investments $8,742,793 $37,000,096
---------- -----------
Total $8,742,793 $37,000,096
========== ===========
As of April 30, 1999, net unrealized appreciation for Federal income
tax purposes aggregated $37,000,096, of which $38,854,164 related to
appreciated securities and $1,854,068 related to depreciated
securities. The aggregate cost of investments at April 30, 1999 for
Federal income tax purposes was $831,313,774.
4. Capital Stock Transactions:
The Fund is authorized to issue 200,000,000 shares of capital stock,
including Preferred Stock, par value $.10 per share, all of which
were initially classified as Common Stock. The Board of Directors is
authorized, however, to reclassify any unissued shares of capital
stock without approval of the holders of Common Stock.
Common Stock
Shares issued and outstanding during the six months ended April 30,
1999 and the year ended October 31, 1998, increased by 742,979 and
512,710, respectively, as a result of dividend reinvestment.
Preferred Stock
Auction Market Preferred Stock ("AMPS") are shares of Preferred
Stock of the Fund, with a par value of $.05 per share and a
liquidation preference of $25,000 per share, that entitle their
holders to receive cash dividends at an annual rate that may vary
for the successive dividend periods. The yields in effect at April
30, 1999 were as follows: Series A, 3.35%; Series B, 3.149%; Series
C, 3.15%, Series D, 3.10%; and Series E, 3.55%.
Shares issued and outstanding during the six months ended April 30,
1999 and the year ended October 31, 1998 remained constant.
The Fund pays commissions to certain broker-dealers at the end of
each auction at an annual rate ranging from 0.25% to 0.375%,
calculated on the proceeds of each auction. For the six months ended
April 30, 1999, Merrill Lynch, Pierce, Fenner & Smith Incorporated,
an affiliate of FAM, earned $120,674 as commissions.
5. Subsequent Event:
On May 6, 1999, the Fund's Board of Directors declared an ordinary
income dividend to Common Stock shareholders in the amount of
$.073463 per share, payable on May 27, 1999 to shareholders of
record as of May 21, 1999.
MuniYield Fund, Inc.
April 30, 1999
OFFICERS AND DIRECTORS
Terry K. Glenn, President and Director
James H. Bodurtha, Director
Herbert I. London, Director
Robert R. Martin, Director
Joseph L. May, Director
Andre F. Perold, Director
Arthur Zeikel, Director
Vincent R. Giordano, Senior Vice President
Kenneth A. Jacob, Vice President
Theodore R. Jaeckel Jr., Vice President
Donald C. Burke, Vice President and Treasurer
Alice A. Pellegrino, Secretary
Gerald M. Richard, Treasurer and Philip M. Mandel, Secretary of
MuniYield Fund, Inc. have recently retired. Their colleagues at
Merrill Lynch Asset Management, L.P. join the Fund's Board of
Directors in wishing Mr. Richard and Mr. Mandel well in their
retirements.
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:
IBJ Whitehall Bank & Trust Company
One State Street
New York, NY 10004
NYSE Symbol
MYD
