MUNIYIELD
FUND, INC.
FUND LOGO
Semi-Annual Report
April 30, 2000
MuniYield 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, in the
opinion of bond counsel to the issuer, is exempt from Federal income
taxes.
This report, including the financial information herein, is
transmitted to shareholders of MuniYield 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.
MuniYield Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
Printed on post-consumer recycled paper
MUNIYIELD FUND, INC.
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 such securities.
MuniYield Fund, Inc., April 30, 2000
TO OUR SHAREHOLDERS
For the six-month period ended April 30, 2000, the Common Stock of
MuniYield Fund, Inc. earned $0.436 per share income dividends, which
included earned and unpaid dividends of $0.071. This represents a
net annualized yield of 6.75%, based on a month-end per share net
asset value of $12.95. Over the same period, the total investment
return on the Fund's Common Stock was +1.71%, based on a change in
per share net asset value from $13.21 to $12.95, and assuming
reinvestment of $0.441 per share income dividends.
For the six-month period ended April 30, 2000, the Fund's Auction
Market Preferred Stock had an average yield as follows: Series A,
3.95%; Series B, 4.14%; Series C, 3.64%; Series D, 3.66%; and Series
E, 3.90%.
The Municipal Market Environment
Since October 1999 through mid-January 2000, fixed-income bond
yields rose steadily higher. US economic growth, in part intensified
by Year 2000 preparations, grew at a 7.3% rate in the fourth quarter
of 1999 and at a 4.2% annual rate for all of 1999. Initial estimates
for the first quarter of 2000 were reported at 5.4%. However,
despite these significant growth rates, no price measure indicator
has shown any considerable signs of future price pressures at the
consumer level, despite the lowest unemployment rates since January
1970. Given no signs of an economic slowdown, the Federal Reserve
Board continued to raise short-term interest rates in November 1999
and again in February and March 2000. In each instance, the Federal
Reserve Board cited both the continued growth of US employment and
the impressive strength of the US equity markets as reasons for
attempting to moderate US economic growth before inflationary price
increases are realized. By mid-January 2000, US Treasury bond yields
rose 60 basis points (0.60%) to 6.75%. Similarly, as measured by the
Bond Buyer Revenue Bond Index, long-term tax-exempt bond yields rose
approximately 20 basis points to 6.35%.
Since mid-January, fixed-income markets have largely ignored strong
economic fundamentals and concentrated on very positive technical
supply factors. Declining bond issuance, both current, and more
importantly, expected future issuance, helped push bond yields lower
from mid-January to mid-April 2000. In late January and early
February 2000, the US Treasury announced its intention to reduce the
number of issues to be auctioned in the quarterly Treasury note and
bond auctions. Furthermore, budgetary surpluses would allow the US
Treasury to repurchase outstanding, higher-couponed Treasury issues,
primarily in the 15-year and longer-term maturity sectors. Both
these actions would result in a significant reduction in the
outstanding supply of long-term US Treasury debt. Domestic and
international investors quickly 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 over 100
basis points to 5.67%. However, bond yields rose somewhat during the
last two weeks of the period as economic statistics were released,
indicating that the economic strength seen in late 1999 was
continuing into early 2000. The decline in long-term US Treasury
bond yields resulted in an inverted taxable yield curve as short-
term and intermediate-term interest rates have not fallen
proportionately since the Federal Reserve Board is expected to
continue to raise short-term interest rates. The current inversion
has had much more to do with debt reduction and Treasury buybacks
than with investor expectations of slower economic growth. Over the
last six months, long-term US Treasury bond yields have fallen
almost 20 basis points to close the six-month period ended April 30,
2000 at 5.96%.
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 have also initiated tenders to
repurchase existing debt, reducing the supply of tax-exempt bonds in
the secondary market as well. Since their recent peak in January
2000, long-term municipal bond yields declined over 25 basis points
to finish the six-month period ended April 30, 2000 at 6.07%. During
the last six months, municipal bond yields declined just 10 basis
points overall.
The relative underperfomance of the municipal bond market in recent
months has been especially disappointing given the strong technical
position the tax-exempt bond market enjoyed. The issuance of long-
term tax-exempt securities has dramatically declined. Over the last
year, $203 billion in new long-term municipal securities was issued,
a decline of almost 25% compared to the same period a year earlier.
For the six months ended April 30, 2000, approximately $90 billion
in new tax-exempt bonds was underwritten, a decline of more than 25%
compared to the same period in 1999. Although investors received
over $30 billion in coupon payments, bond maturities, and the
proceeds from early bond redemptions, coupled with the highest
municipal bond yields in three years, overall investor demand has
diminished. Long-term municipal bond mutual funds have seen
consistent outflows in recent months as the yields of individual
securities have risen faster than those of larger, more diverse
mutual funds. Over the last four months, tax-exempt mutual funds
have had net redemptions of more than $8 billion. Also, the demand
from property and casualty insurance companies has weakened as a
result of the losses and anticipated losses incurred from a series
of damaging storms across much of the eastern United States.
Additionally, many institutional investors who have in recent years
been attracted to the municipal bond market by historically
attractive tax-exempt bond yield ratios of over 90% found other
asset classes even more attractive. Even with a favorable supply
position, tax-exempt municipal bond yields have underperformed their
taxable counterparts.
Any significantly lower municipal bond yields are still likely to
require weaker US employment growth and consumer spending. The
actions taken in recent months by the Federal Reserve Board should
eventually slow US economic growth. The recent declines in US home
sales are perhaps the first sign that consumer spending is being
slowed by higher interest rates. Until further signs develop, it is
likely that the municipal bond market's current favorable technical
position will dampen significant tax-exempt interest rate volatility
and provide a stable environment for eventual improvement in
municipal bond prices.
Portfolio Strategy
As a result of significant volatility in the fixed-income market
during the six-month period ended April 30, 2000, we turned our
efforts toward reducing the Fund's sensitivity to interest rate
fluctuations. We sought to insulate the Fund from some of the market
volatility while still delivering an attractive and stable monthly
dividend income.
In order to do this, we kept our cash reserves to a minimum. By
keeping the Fund fully invested, we had to take other necessary
measures to achieve our investment goal. During recent months, we
began restructuring the Fund by shortening the average portfolio
maturity without significantly impacting the dividend stream. We
reduced many of the Fund's more interest rate-sensitive holdings.
Typically, these securities possess long maturity dates that were
issued in a lower interest rate environment and, consequently, trade
at steep discounts to their face value. The volatility inherent in
this structure rendered it unsuitable for our investment strategy
moving forward, and we reduced these holdings. We reinvested the
proceeds from these sales in bonds that are less prone to interest
rate volatility. By investing in bonds possessing maturities of 15
years - 20 years, we may be able to avoid much of the volatility
inherent in longer-dated bonds while still capturing approximately
90% of their yield.
MuniYield Fund, Inc., April 30, 2000
The high-yield sector of the tax-exempt market remained an integral
component of our investment strategy, particularly within our
efforts to insulate the Fund from market volatility without
sacrificing income. Credit spreads widened considerably in recent
months and presented an attractive opportunity to lock in favorable
yields on selected issues. Corporate-related debt continued to offer
good value, and we believe this sector still warrants a significant
allocation of the Fund's assets. We remained cautious with regard to
the healthcare industry as poor liquidity and adverse credit
fundamentals largely offset what appeared to be attractive
valuations.
The Fund's cost of borrowing increased somewhat in recent months as
short-term tax-exempt interest rates rose along with the adjustment
evident in the taxable market. Long-term tax-exempt interest rates
have actually declined modestly, causing the municipal yield curve
to flatten. While this flattening has reduced the incremental yield
enhancement resulting from leveraging the Fund's Common Stock, it is
important to note that in contrast to the inverted shape of the US
Treasury yield curve, the municipal yield curve remained positively
sloped. (For a complete explanation of the benefits and risks of
leveraging, see page 1 of this report to shareholders.) Historical
analysis of the municipal yield curve demonstrates this resiliency
throughout a number of economic cycles. Furthermore, a portion of
the recent adjustment in short-term interest rates is attributable
to seasonal tax-related factors and, based on historical experience,
should be regarded as temporary. Nonetheless, it is likely that the
Fund's borrowing costs will remain under pressure while the Federal
Reserve Board pursues its current monetary policy.
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
May 25, 2000
PROXY RESULTS
During the six-month period ended April 30, 2000, MuniYield Fund,
Inc.'s Common Stock shareholders voted on the following proposals.
The proposals were approved at a shareholders' meeting on April 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> <S> <C> <C>
1. To elect the Fund's Board of Directors: Terry K. Glenn 23,016,903 367,465
Herbert I. London 22,994,012 390,356
Andre F. Perold 22,994,194 390,174
Roberta Cooper Ramo 22,990,818 393,550
Arthur Zeikel 22,973,693 410,675
<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. 23,074,712 103,826 205,830
</TABLE>
During the six-month period ended April 30, 2000, MuniYield Fund,
Inc.'s Preferred Stock shareholders (Series A, B, C, D and E) voted
on the following proposals. The proposals were approved at a
shareholders' meeting on April 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> <S> <C> <C>
1. To elect the Portfolio's Board of Directors: Terry K. Glenn,
James H. Bodurtha, Herbert I. London, Joseph L. May,
Andre F. Perold, Roberta Cooper Ramo and Arthur Zeikel
as follows: Series A 1,694 0
Series B 810 9
Series C 1,286 1
Series D 994 4
Series E 2,281 0
<CAPTION>
Shares Voted Shares Voted Shares Voted
For Against Abstain
<S> <S> <C> <C> <C>
2. To select Deloitte & Touche LLP as the Fund's
independent auditors as follows: Series A 1,692 2 0
Series B 810 9 0
Series C 1,286 0 1
Series D 994 0 4
Series E 2,281 0 0
</TABLE>
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 at right.
AMT Alternative Minimum Tax
(subject to)
COP Certificates of Participation
EDA Economic Development Authority
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
PCR Pollution Control Revenue Bonds
RITR Residual Interest Trust Receipts
S/F Single-Family
VRDN Variable Rate Demand Notes
MuniYield Fund, Inc., April 30, 2000
<TABLE>
SCHEDULE OF INVESTMENTS (in Thousands)
<CAPTION>
S&P Moody's Face
STATE Ratings Ratings Amount Issue Value
<S> <S> <S> <C> <S> <C>
Alabama--0.8% A1 VMIG1++ $6,300 Columbia, Alabama, IDB, PCR, Refunding (Alabama Power
Company Project), VRDN, Series A, 5.40% due 5/01/2022 (a) $ 6,300
Alaska--0.7% NR* NR* 5,050 Valdez, Alaska, Marine Terminal Revenue Refunding Bonds
(Amerada Hess Pipeline Corporation), 6.10% due 2/01/2024 4,917
Arizona--6.7% Arizona Health Facilities Authority Revenue Bonds (Catholic
Healthcare West), Series A:
BBB+ Baa1 9,430 6.125% due 7/01/2009 9,259
BBB+ Baa1 6,390 6.625% due 7/01/2020 6,254
AAA Aaa 1,460 Arizona State Wastewater Management Authority, Wastewater
Treatment Financial Assistance Revenue Bonds, Series A, 5.60%
due 7/01/2006 (b)(c) 1,524
Maricopa County, Arizona, Pollution Control Corporation, PCR,
Refunding (Public Service Company of New Mexico Project),
Series A:
BBB- Baa3 5,475 5.75% due 11/01/2022 4,863
BBB- Baa3 9,000 6.30% due 12/01/2026 8,641
Phoenix, Arizona, IDA, Airport Facility Revenue Refunding
Bonds (America West Airlines Inc. Project), AMT:
NR* B1 8,000 6.25% due 6/01/2019 7,069
NR* B1 5,300 6.30% due 4/01/2023 4,666
Pima County, Arizona, IDA, Industrial Revenue Refunding Bonds
(Tucson Electric Power Company Project):
B+ Ba3 6,600 Series B, 6% due 9/01/2029 5,782
B+ Ba3 2,500 Series C, 6% due 9/01/2029 2,190
California AAA Aaa 8,900 California State University and Colleges, Student Union
--2.6% Revenue Bonds (Chico), Series B, 4.375% due 11/01/2028 (e) 6,908
BBB+ Baa1 5,000 California Statewide Communities Development Authority, COP
(Catholic Healthcare West), 6% due 7/01/2009 4,921
AAA Aaa 9,300 San Francisco, California, City and County Airport Commission,
International Airport Revenue Refunding Bonds, Second Series,
Issue 20, 4.50% due 5/01/2026 (e) 7,444
Colorado--2.6% Denver, Colorado, City and County Airport Revenue Bonds, AMT,
Series D:
BBB+ Aaa 700 7.75% due 11/15/2001 (b) 744
BBB+ Baa1 8,000 7.75% due 11/15/2013 9,221
NR* NR* 5,000 Denver, Colorado, Urban Renewal Authority, Tax Increment
Revenue Bonds (Pavilions), AMT, 7.75% due 9/01/2016 5,289
Metropolitan Football Stadium District, Colorado, Sales Tax
Revenue Bonds, Series A (e):
AAA Aaa 3,700 5.22%** due 1/01/2011 2,026
AAA Aaa 2,000 5.30%** due 1/01/2012 1,027
Mountain Village Metropolitan District, Colorado, San Miguel
County, GO, Refunding:
NR* NR* 240 7.95% due 12/01/2002 (b) 259
NR* NR* 945 7.95% due 12/01/2003 983
Connecticut BB+ Ba1 35,000 Connecticut State Development Authority, PCR, Refunding
--4.6% (Connecticut Light and Power Company), Series A, 5.85% due
9/01/2028 31,486
NR* B1 2,445 New Haven, Connecticut, Facility Revenue Bonds (Hill Health
Corporation Project), 9.25% due 5/01/2017 2,548
District of A1+ VMIG1++ 5,350 District of Columbia, GO (General Fund Recovery), VRDN, Series
Columbia--0.7% B-2, 6.10% due 6/01/2003 (a) 5,350
Florida--1.3% AAA Aaa 10,000 Hillsborough County, Florida, School Board, COP, Refunding
(Master Lease Program), Series A, 5.375% due 7/01/2021 (e) 9,392
Georgia--1.9% AAA Aaa 12,140 Atlanta, Georgia, Airport Revenue Refunding Bonds, Series A,
5.875% due 1/01/2016 (h) 12,391
BBB- Baa2 1,700 Effingham County, Georgia, Development Authority, Solid Waste
Disposal Revenue (Fort James Project), AMT, 5.625% due 7/01/2018 1,524
Idaho--0.4% AA NR* 2,655 Idaho Housing Agency, S/F Mortgage Revenue Refunding Bonds,
AMT, Senior Series C-2, 7.15% due 7/01/2023 2,709
Illinois--3.9% AAA Aaa 10,000 Chicago, Illinois, GO, Series A, 6.75% due 1/01/2035 (h) 10,781
NR* Aaa 2,760 Chicago, Illinois, S/F Mortgage Revenue Bonds, AMT, Series B,
7.625% due 9/01/2027 (f)(g)(l) 3,006
BBB+ Baa1 2,750 Illinois Development Finance Authority, PCR, Refunding
(Illinois Power Company Project), Series A, 7.375% due
7/01/2021 2,906
NR* NR* 2,500 Illinois Educational Facilities Authority, Revenue Refunding
Bonds (Chicago Osteopathic Health System), 7.25% due
11/15/2019 (b) 2,891
AAA Aaa 8,000 Metropolitan Pier and Exposition Authority, Illinois,
Hospitality Facilities Revenue Bonds (McCormick Place
Convention Center), 7% due 7/01/2026 (i) 9,156
Indiana--0.5% BBB+ Baa1 3,500 East Chicago, Indiana, Solid Waste Disposal Revenue Bonds
(USG Corporation Project), AMT, 6.375% due 8/01/2029 3,333
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 469
NR* NR* 4,000 Perry County, Kentucky, Solid Waste Disposal Revenue Bonds
(TJ International Project), AMT, 7% due 6/01/2024 4,071
Louisiana NR* A3 20,000 Lake Charles, Louisiana, Harbor and Terminal District, Port
--6.9% Facilities Revenue Refunding Bonds (Trunkline Long Company
Project), 7.75% due 8/15/2022 21,409
AAA Aaa 11,100 Louisiana State, GO, Series A, 6% due 5/15/2014 (e) 11,394
CC NR* 20,000 Port New Orleans, Louisiana, IDR, Refunding (Continental Grain
Company Project), 6.50% due 1/01/2017 18,850
Maryland--1.0% NR* NR* 7,050 Maryland State Energy Financing Administration, Limited
Obligation Revenue Bonds (Cogeneration--AES Warrior Run), AMT,
7.40% due 9/01/2019 7,185
Massachusetts BBB+ A3 2,500 Massachusetts State Development Finance Agency, Revenue
--2.4% Refunding Bonds (Boston University), Series P, 5.45% due
5/15/2059 2,114
A NR* 11,500 Massachusetts State Health and Educational Facilities
Authority Revenue Bonds (Schepens Eye Research Project),
Series A, 6.50% due 7/01/2028 11,672
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 4,137
</TABLE>
MuniYield Fund, Inc., April 30, 2000
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<CAPTION>
S&P Moody's Face
STATE Ratings Ratings Amount Issue Value
<S> <S> <S> <C> <S> <C>
Michigan BBB Ba1 $1,000 Michigan State Strategic Fund, Limited Obligation Revenue
--3.0% Bonds (Waste Management Inc. Project), AMT, 6.625% due
12/01/2012 $ 965
A1 VMIG1++ 2,800 Royal Oak, Michigan, Hospital Finance Authority, Hospital
Revenue Bonds (William Beaumont Hospital), VRDN, Series J,
5.40% due 1/01/2003 (a) 2,800
AAA Aaa 20,000 Wayne Charter County, Michigan, Airport Revenue Bonds
(Detroit Metropolitan-Wayne County Airport), AMT, Series A,
5.375% due 12/01/2016 (e) 18,857
Minnesota AA+ Aa2 2,465 Minnesota State, HFA, S/F Mortgage Revenue Bonds, AMT,
--0.3% Series A, 7.05% due 7/01/2022 2,497
Mississippi A A2 18,000 Lowndes County, Mississippi, Solid Waste Disposal and PCR,
--3.3% Refunding (Weyerhaeuser Company Project), Series A, 6.80%
due 4/01/2022 19,393
BBB- Ba1 5,650 Mississippi Business Finance Corporation, Mississippi, PCR,
Refunding (System Energy Resources Inc. Project), 5.90% due
5/01/2022 4,901
Missouri--0.6% AAA NR* 4,310 Missouri State Housing Development Commission, S/F Mortgage
Revenue Bonds, Homeownership, AMT, Series B, 7.55% due
9/01/2027 (f)(g) 4,508
Nevada--1.0% Clark County, Nevada, IDR, Refunding (Nevada Power Company
Project):
BBB NR* 3,500 AMT, Series B, 5.90% due 10/01/2030 3,029
BBB NR* 5,000 Series C, 5.50% due 10/01/2030 4,130
New Jersey BBB- NR* 3,000 New Jersey EDA, Revenue Bonds, First Mortgage (Fellowship
--4.2% Village Project), Series C, 5.50% due 1/01/2028 2,305
New Jersey EDA, Special Facility Revenue Bonds (Continental
Airlines Inc. Project), AMT:
BB Ba2 20,430 6.25% due 9/15/2019 18,959
BB Ba2 10,000 5.50% due 4/01/2028 8,006
BBB- Baa3 3,000 New Jersey Health Care Facilities Financing Authority, Revenue
Refunding Bonds (Saint Elizabeth Hospital Obligation Group),
6% due 7/01/2027 2,370
New NR* Baa3 14,500 Farmington, New Mexico, PCR, Series B, 5.80% due 4/01/2022 12,829
Mexico--1.7%
New York AAA Aaa 2,675 Dutchess County, New York, Resource Recovery Agency Revenue
--11.7% Bonds (Solid Waste System), Series A, 5.25% due 1/01/2011 (e) 2,634
AAA Aaa 5,000 Long Island Power Authority, New York, Electric System Revenue
Refunding Bonds, Series A, 5.25% due 12/01/2026 (c) 4,492
NR* Aaa 5,595 Metropolitan Transportation Authority, New York, Commuter
Facilities Revenue Bonds, RITR, Series 9, 6.10% due 7/01/2006
(b)(h)(k) 6,357
NR* A 5,500 New York City, New York, City IDA, Special Facilities Revenue
Bonds, RITR, AMT, Series RI-5, 6.495% due 1/01/2024 (k) 5,451
AAA Aaa 13,130 New York City, New York, City Municipal Water Finance Authority,
Water and Sewer System Revenue Refunding Bonds, Series D, 4.75%
due 6/15/2025 (e) 10,865
New York City, New York, City Transitional Finance Authority
Revenue Bonds, Future Tax Secured, Series B:
AA Aa3 6,805 6.25% due 11/15/2017 7,169
AA Aa3 6,405 6.25% due 11/15/2018 6,713
New York City, New York, GO, Refunding, Series B (b):
A- A3 1,555 7.75% due 2/01/2002 1,652
A- A3 1,150 7.75% due 2/01/2002 1,221
A- Aaa 385 New York City, New York, GO, Series C, Sub-Series C-1, 7.50%
due 8/01/2002 (b) 412
New York State Dormitory Authority, Revenue Refunding Bonds (e):
AAA Aaa 2,545 (Hamilton College), 4.75% due 7/01/2017 2,214
AAA Aaa 9,750 (State University Educational Facilities), Series A, 4.75%
due 5/15/2025 8,060
New York State Dormitory Authority, State University Educational
Facilities Revenue Refunding Bonds, Series 1989 (e):
AAA NR* 7,500 6% due 5/15/2015 7,800
AAA NR* 3,750 6% due 5/15/2016 3,883
NR* Aa1 17,525 New York State Environmental Facilities Corporation, PCR,
Refunding, RITR, Series RI-1, 6.095% due 6/15/2014 (k) 18,199
North BBB Baa3 4,750 North Carolina Eastern Municipal Power Agency, Power System
Carolina--0.6% Revenue Bonds, Series D, 6.75% due 1/01/2026 4,778
Ohio--3.7% NR* Baa3 5,500 Franklin County, Ohio, Hospital Revenue Bonds (Doctors of Ohio
Health Corp.), Series A, 5.60% due 12/01/2028 3,954
BBB+ Baa1 25,000 Ohio State Solid Waste Disposal Revenue Bonds (USG Corporation
Project), AMT, 5.60% due 8/01/2032 21,325
AAA Aaa 2,405 Toledo, Ohio, Sewer System Revenue Refunding & Improvement
Bonds, Mortgage, 4.75% due 11/15/2017 (e) 2,103
Oklahoma--0.5% AAA NR* 3,250 Holdenville, Oklahoma, Industrial Authority, Correctional
Facility Revenue Bonds, 6.70% due 7/01/2006 (b)(j) 3,525
Oregon--2.9% AAA Aaa 14,000 Oregon Health Sciences University Revenue Refunding Bonds,
Series A, 5.16%** due 7/01/2021 (e) 4,029
Oregon State Department of Administrative Services, COP,
Series A (c):
AAA Aaa 4,405 6% due 5/01/2015 4,574
AAA Aaa 3,500 6% due 5/01/2016 3,617
AAA Aaa 10,000 Portland, Oregon, Sewer System Revenue Refunding Bonds,
Series A, 5% due 6/01/2014 (h) 9,439
Pennsylvania A NR* 2,425 Berks County, Pennsylvania, Municipal Authority, College
--7.3% Revenue Refunding Bonds (Alvernia College Project), 6% due
11/15/2018 2,369
AAA Aaa 5,000 Lehigh County, Pennsylvania, IDA, PCR, Refunding (Pennsylvania
Power and Light Company Project), Series B, 6.40% due
9/01/2029 (e) 5,120
BBB Baa 9,675 Pennsylvania Convention Center Authority, Revenue Refunding
Bonds, Series A, 6.70% due 9/01/2014 9,980
NR* NR* 10,330 Pennsylvania Economic Development Financing Authority, Exempt
Facilities Revenue Bonds (National Gypsum Company), AMT,
Series A, 6.25% due 11/01/2027 9,390
AA+ Aa2 5,175 Pennsylvania HFA, S/F Mortgage Refunding Bonds, AMT, Series 42,
6.85% due 4/01/2025 5,331
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) 16,244
Philadelphia, Pennsylvania, Authority for IDR, Refunding,
Commercial Development:
NR* NR* 3,650 (Days Inn), Series B, 6.50% due 10/01/2027 3,462
NR* NR* 3,000 (Doubletree), Series A, 6.50% due 10/01/2027 2,846
</TABLE>
MuniYield Fund, Inc., April 30, 2000
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in Thousands)
<CAPTION>
S&P Moody's Face
STATE Ratings Ratings Amount Issue Value
<S> <S> <S> <C> <S> <C>
South BBB+ Baa1 $2,500 Richland County, South Carolina, PCR, Refunding (Union
Carolina--0.6% Camp Corporation Project), Series C, 6.55% due 11/01/2020 $ 2,494
NR* NR* 2,135 South Carolina Jobs EDA, Health Facilities Revenue Refunding
Bonds (First Mortgage-Lutheran Homes), 5.70% due 5/01/2026 1,695
South BBB+ Baa3 900 South Dakota State Health and Educational Facilities
Dakota--0.1% Authority, Revenue Refunding Bonds (Prairie Lakes), 7.25%
due 4/01/2022 910
Tennessee--2.8% Elizabethton, Tennessee, Health and Educational Facilities
Board, Hospital Revenue Refunding and Improvement Bonds,
First Mortgage, Series B (e):
AAA Aaa 2,005 6% due 7/01/2011 2,089
AAA Aaa 2,125 6% due 7/01/2012 2,211
AAA Aaa 2,255 6.25% due 7/01/2013 2,394
AAA Aaa 2,395 6.25% due 7/01/2014 2,539
NR* NR* 3,000 Hardeman County, Tennessee, Correctional Facilities Corporation
Revenue Bonds, 7.75% due 8/01/2017 3,067
Johnson City, Tennessee, Health and Educational Facilities
Board, Hospital Revenue Refunding Bonds, First Mortgage (Mountain
States Health), Series A (e):
AAA Aaa 1,960 6% due 7/01/2011 2,042
AAA Aaa 2,875 6% due 7/01/2012 2,991
AAA Aaa 3,465 6.25% due 7/01/2015 3,667
Texas--8.1% Gregg County, Texas, Health Facilities Development Corporation,
Hospital Revenue Bonds (Good Shepherd Medical Center Project):
AA NR* 3,000 6.875% due 10/01/2020 3,161
AA NR* 2,000 6.375% due 10/01/2025 2,006
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 5,095
A1+ NR* 100 Harris County, Texas, Health Facilities Development Corporation,
Hospital Revenue Refunding Bonds (Methodist Hospital), VRDN,
5.80% due 12/01/2025 (a) 100
Houston, Texas, Airport System Revenue Bonds (Special Facilities-
Continental Airlines), AMT:
BB Ba1 10,300 Series B, 6.125% due 7/15/2017 9,310
BB Ba1 9,700 Series C, 6.125% due 7/15/2027 8,462
Lower Colorado River Authority, Texas, PCR (Samsung Austin
Semiconductor), AMT:
BB Baa3 6,500 6.375% due 4/01/2027 6,014
BB Baa3 4,000 6.95% due 4/01/2030 3,970
AA Aa1 20,000 San Antonio, Texas, Electric and Gas Revenue Refunding Bonds,
Series A, 5.25% due 2/01/2015 19,070
San Antonio, Texas, Water Revenue Refunding Bonds:
AA- Aa3 1,000 5.875% due 5/15/2016 1,015
AA- Aa3 2,430 5.875% due 5/15/2017 2,457
Utah--0.5% NR* NR* 3,900 Carbon County, Utah, Solid Waste Disposal Revenue Refunding
Bonds (Laidlaw Environmental), AMT, Series A, 7.45% due
7/01/2017 3,507
AAA NR* 555 Utah State, HFA, S/F Mortgage Revenue Bonds, AMT, Senior-
Series E-2, 7.15% due 7/01/2024 (d) 565
Virginia--6.4% NR* NR* 7,030 Dulles Town Center, Virginia, Community Development Authority,
Special Assessment Tax (Dulles Town Center Project), 6.25%
due 3/01/2026 6,526
AA Aa2 10,515 Fairfax County, Virginia, Water Authority, Revenue Refunding
Bonds, 6% due 4/01/2022 10,659
NR* NR* 8,650 Peninsula Ports Authority, Virginia, Revenue Refunding Bonds
(Port Facility-Zeigler Coal), 6.90% due 5/02/2022 7,060
NR* NR* 1,000 Pittsylvania County, Virginia, IDA, Revenue Refunding Bonds,
Exempt-Facility, AMT, Series A, 7.55% due 1/01/2019 1,020
Pocahontas Parkway Association, Virginia, Toll Road Revenue
Bonds:
BBB- Baa3 16,600 Senior Series A, 5.50% due 8/15/2028 13,601
BBB- Baa3 9,100 Senior Series B, 5.90%** due 8/15/2019 2,337
BBB- Baa3 12,840 Senior Series B, 7.35%** due 8/15/2029 1,594
AA+ Aa1 5,125 Virginia State, HDA, Commonwealth Mortgage Revenue Bonds,
Series A, 7.10% due 1/01/2025 5,208
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 3,049
Wisconsin--0.3% AA NR* 2,760 Wisconsin State Health and Educational Facilities Authority
Revenue Bonds (Howard Young Medical Center Inc. Project),
5.125% due 8/15/2028 2,251
Total Investments (Cost--$743,593)--97.6% 727,954
Other Assets Less Liabilities--2.4% 18,181
--------
Net Assets--100.0% $746,135
========
(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, 2000.
(b)Prerefunded.
(c)AMBAC Insured.
(d)FHA Insured.
(e)MBIA Insured.
(f)FNMA Collateralized.
(g)GNMA Collateralized.
(h)FGIC Insured.
(i)Escrowed to maturity.
(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, 2000.
(l)FHLMC Collateralized.
*Not Rated.
**Represents a zero coupon bond; the interest rate shown is the
effective yield at the time of purchase by the Fund.
++Highest short-term rating by Moody's Investors Service, Inc.
See Notes to Financial Statements.
</TABLE>
MuniYield Fund, Inc., April 30, 2000
<TABLE>
STATEMENT OF ASSETS, LIABILITIES AND CAPITAL
<CAPTION>
As of April 30, 2000
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$743,592,522) $727,953,920
Cash 79,614
Receivables:
Interest $ 12,516,997
Securities sold 8,571,743 21,088,740
------------
Prepaid expenses and other assets 23,883
------------
Total assets 749,146,157
------------
Liabilities: Payables:
Securities purchased 2,008,024
Dividends to shareholders 602,882
Investment adviser 288,587 2,899,493
------------
Accrued expenses 111,362
------------
Total liabilities 3,010,855
------------
Net Assets: Net assets $746,135,302
============
Capital: Capital Stock (200,000,000 shares authorized):
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 9,296,901
Accumulated realized capital losses on investments--net (29,207,291)
Accumulated distributions in excess of realized capital
gains on investments--net (11,020,699)
Unrealized depreciation on investments--net (15,638,602)
------------
Total--Equivalent to $12.95 net asset value per share of
Common Stock (market price--$11.875) 496,135,302
------------
Total capital $746,135,302
============
*Auction Market Preferred Stock.
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENT OF OPERATIONS
<CAPTION>
For the Six Months Ended April 30, 2000
<S> <S> <C> <C>
Investment Interest and amortization of premium and discount earned $ 23,476,655
Income:
Expenses: Investment advisory fees $ 1,857,483
Commission fees 313,306
Transfer agent fees 84,042
Accounting services 51,030
Professional fees 45,659
Custodian fees 26,647
Directors' fees and expenses 22,263
Listing fees 20,361
Printing and shareholder reports 18,403
Pricing fees 8,750
Other 26,047
------------
Total expenses 2,473,991
------------
Investment income--net 21,002,664
------------
Realized & Realized loss on investments--net (29,207,291)
Unrealized Change in unrealized depreciation on investments--net 20,029,648
Gain (Loss) on ------------
Investments Net Increase in Net Assets Resulting from Operations $ 11,825,021
--Net: ============
See Notes to Financial Statements.
</TABLE>
MuniYield Fund, Inc., April 30, 2000
<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: 2000 1999
<S> <S> <C> <C>
Operations: Investment income--net $ 21,002,664 $ 42,576,230
Realized loss on investments--net (29,207,291) (545,814)
Change in unrealized appreciation/depreciation on
investments--net 20,029,648 (89,396,899)
------------ ------------
Net increase (decrease) in net assets resulting
from operations 11,825,021 (47,366,483)
------------ ------------
Dividends & Investment income--net:
Distributions to Common Stock (16,905,506) (36,119,916)
Shareholders: Preferred Stock (4,814,546) (6,368,964)
Realized gain on investments--net:
Common Stock -- (14,409,079)
Preferred Stock -- (1,619,668)
In excess of realized gain on investments--net:
Common Stock -- (9,906,186)
Preferred Stock -- (1,113,516)
------------ ------------
Net decrease in net assets resulting from dividends and
distributions to shareholders (21,720,052) (69,537,329)
------------ ------------
Capital Stock Value of shares issued to Common Stock shareholders
Transactions: in reinvestment of dividends and distributions -- 11,711,691
------------ ------------
Net Assets: Total decrease in net assets (9,895,031) (105,192,121)
Beginning of period 756,030,333 861,222,454
------------ ------------
End of period* $746,135,302 $756,030,333
============ ============
*Undistributed investment income--net $ 9,296,901 $ 10,014,289
============ ============
See Notes to Financial Statements.
</TABLE>
<TABLE>
FINANCIAL HIGHLIGHTS
<CAPTION>
The following per share data and ratios have been derived For the Six
from information provided in the financial statements. Months Ended
April 30, For the Year Ended October 31,
Increase (Decrease) in Net Asset Value: 2000 1999 1998 1997 1996
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 13.21 $ 16.27 $ 16.09 $ 15.68 $ 15.47
Operating -------- -------- -------- -------- --------
Performance: Investment income--net .55 1.12 1.19 1.24 1.26
Realized and unrealized gain (loss) on
investments--net (.24) (2.34) .49 .65 .23
-------- -------- -------- -------- --------
Total from investment operations .31 (1.22) 1.68 1.89 1.49
-------- -------- -------- -------- --------
Less dividends and distributions to Common
Stock shareholders:
Investment income--net (.44) (.95) (.97) (1.00) (1.04)
Realized gain on investments--net -- (.38) (.26) (.22) --
In excess of realized gain on investments
--net -- (.27) -- (.01) --
-------- -------- -------- -------- --------
Total dividends and distributions to Common
Stock shareholders (.44) (1.60) (1.23) (1.23) (1.04)
-------- -------- -------- -------- --------
Effect of Preferred Stock activity:
Dividends and distributions to Preferred
Stock shareholders:
Investment income--net (.13) (.17) (.18) (.20) (.24)
Realized gain on investments--net -- (.04) (.09) (.05) --
In excess of realized gain on invest-
ments--net -- (.03) -- --++++ --
-------- -------- -------- -------- --------
Total effect of Preferred Stock activity (.13) (.24) (.27) (.25) (.24)
-------- -------- -------- -------- --------
Net asset value, end of period $ 12.95 $ 13.21 $ 16.27 $ 16.09 $ 15.68
======== ======== ======== ======== ========
Market price per share, end of period $ 11.875 $ 12.875 $ 16.875 $ 15.875 $ 14.875
======== ======== ======== ======== ========
Total Investment Based on market price per share (4.30%)+++(15.35%) 14.74% 15.56% 10.88%
Return:** ======== ======== ======== ======== ========
Based on net asset value per share 1.71%+++ (9.92%) 9.15% 11.11% 8.61%
======== ======== ======== ======== ========
Ratios Based on Total expenses*** 1.00%* .93% .89% .91% .92%
Average Net ======== ======== ======== ======== ========
Assets of Total investment income--net*** 8.47%* 7.42% 7.43% 7.81% 8.06%
Common Stock: ======== ======== ======== ======== ========
Amount of dividends to Preferred Stock
shareholders 1.94%* 1.11% 1.10% 1.28% 1.57%
======== ======== ======== ======== ========
Investment income--net, to Common Stock
shareholders 6.53%* 6.31% 6.33% 6.53% 6.49%
======== ======== ======== ======== ========
Ratios Based on Total expenses .66%* .65% .63% .64% .64%
Total Average Net ======== ======== ======== ======== ========
Assets:***++ Total investment income--net 5.64%* 5.17% 5.26% 5.48% 5.64%
======== ======== ======== ======== ========
Ratios Based on Dividends to Preferred Stock shareholders 3.86%* 2.55% 2.66% 3.02% 3.63%
Average Net ======== ======== ======== ======== ========
Assets of
Preferred Stock:
Supplemental Net assets, net of Preferred Stock, end
Data: of period (in thousands) $496,135 $506,030 $611,222 $596,320 $581,124
======== ======== ======== ======== ========
Preferred Stock outstanding, end of period
(in thousands) $250,000 $250,000 $250,000 $250,000 $250,000
======== ======== ======== ======== ========
Portfolio turnover 50.35% 78.42% 91.63% 111.45% 96.74%
======== ======== ======== ======== ========
Leverage: Asset coverage per $1,000 $ 2,985 $ 3,024 $ 3,445 $ 3,385 $ 3,324
======== ======== ======== ======== ========
Dividends Series A--Investment income--net $ 492 $ 588 $ 694 $ 747 $ 894
Per Share on ======== ======== ======== ======== ========
Preferred Stock Series B--Investment income--net $ 516 $ 595 $ 687 $ 751 $ 897
Outstanding: ======== ======== ======== ======== ========
Series C--Investment income--net $ 454 $ 687 $ 643 $ 763 $ 998
======== ======== ======== ======== ========
Series D--Investment income--net $ 456 $ 694 $ 637 $ 762 $ 888
======== ======== ======== ======== ========
Series E--Investment income--net $ 487 $ 627 $ 656 $ 752 $ 875
======== ======== ======== ======== ========
*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 charges.
***Do not reflect the effect of dividends to Preferred Stock
shareholders.
++Includes Common and Preferred Stock average net assets.
++++Amount is less than $.01 per share.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
MuniYield Fund, Inc., April 30, 2000
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 accounting principles generally accepted in the
United States of America, 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-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 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 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.
* 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.
(e) Dividends and distributions--Dividends from net investment
income are declared and paid monthly. Distributions of capital gains
are recorded on the ex-dividend dates. Distributions in excess of
realized capital gains are due primarily to differing tax treatments
for futures transactions.
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 .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, 2000 were $368,663,632 and
$377,782,671, respectively.
Net realized losses for the six months ended April 30, 2000 and net
unrealized losses as of April 30, 2000 were as follows:
Realized Unrealized
Losses Losses
Long-term investments $(27,784,965) $(15,638,602)
Financial futures contracts (1,422,326) --
------------ ------------
Total $(29,207,291) $(15,638,602)
============ ============
As of April 30, 2000, net unrealized depreciation for Federal income
tax purposes aggregated $15,638,602, of which $12,495,843 related to
appreciated securities and $28,134,445 related to depreciated
securities. The aggregate cost of investments at April 30, 2000 for
Federal income tax purposes was $743,592,522.
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,
2000 remained constant and during the year ended October 31, 1999
increased by 742,979 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, 2000 were as follows: Series A, 3.85%; Series B, 4.10%; Series
C, 4.00%; Series D, 4.00%; and Series E, 4.60%.
Shares issued and outstanding during the six months ended April 30,
2000 and during the year ended October 31, 1999 remained constant.
The Fund pays commissions to certain broker-dealers at the end of
each auction at an annual rate ranging from .25% to .375%,
calculated on the proceeds of each auction. For the six months ended
April 30, 2000, Merrill Lynch, Pierce, Fenner & Smith Incorporated,
an affiliate of FAM, earned $129,733 as commissions.
5. Capital Loss Carryforward:
At October 31, 1999, the Fund had a net capital loss carryforward of
approximately $6,930,000, all of which expires in 2007. This amount
will be available to offset like amounts of any future taxable
gains.
6. Subsequent Event:
On May 5, 2000, the Fund's Board of Directors declared an ordinary
income dividend to Common Stock shareholders in the amount of
$.071400 per share, payable on May 30, 2000 to shareholders of
record as of May 16, 2000.
MuniYield Fund, Inc., April 30, 2000
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 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.
QUALITY PROFILE
The quality ratings of securities in the Fund as of April 30, 2000
were as follows:
Percent of
S&P Rating/Moody's Rating Net Assets
AAA/Aaa 28.6%
AA/Aa 12.5
A/A 8.7
BBB/Baa 20.5
BB/Ba 11.9
B/B 1.9
CC/Ca 2.5
NR (Not Rated) 9.0
Other++ 2.0
++Temporary investments in short-term municipal securities.
OFFICERS AND DIRECTORS
Terry K. Glenn, President and Director
James H. Bodurtha, Director
Herbert I. London, Director
Joseph L. May, Director
Andre F. Perold, Director
Roberta Cooper Ramo, 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
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
100Church Street
New York, NY 10286
NYSE Symbol
MYD
Robert R. Martin, Director of MuniYield Fund, Inc., has recently
retired. The Fund's Board of Directors wishes Mr. Martin well in his
retirement.
