MUNIYIELD
INSURED
FUND, INC.
FUND LOGO
Semi-Annual Report
April 30, 1998
This report, including the financial information herein, is
transmitted to the shareholders of MuniYield Insured 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 Insured
Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
Printed on post-consumer recycled paper
MuniYield Insured Fund, Inc.
TO OUR SHAREHOLDERS
For the six-month period ended April 30, 1998, the Common Stock of
MuniYield Insured Fund, Inc. earned $0.480 per share income
dividends, which included earned and unpaid dividends of $0.070.
This represents a net annualized yield of 6.19%, based on a month-
end per share net asset value of $15.62. Over the same period, the
total investment return on the Fund's Common Stock was +2.56%, based
on a change in per share net asset value from $15.84 to $15.62, and
assuming reinvestment of $0.484 per share income dividends and
$0.119 per share capital gains distributions.
The average yields of the Fund's Auction Market Preferred Stock for
the six-month period ended April 30, 1998 were: Series A, 3.89%;
Series B, 3.85%; Series C, 3.86%; Series D, 4.00%; Series E, 3.94%;
Series F, 4.37%; and Series G, 3.85%.
The Municipal Market Environment
During the six months ended April 30, 1998, bond yields generally
moved lower, and by mid-January 1998 had declined to recent historic
lows. Long-term US Treasury bond yields declined 20 basis points
(0.20%) during the same period and stood at 5.95% by April 30, 1998.
Similarly, long-term uninsured tax-exempt bond yields, as measured
by the Bond Buyer Revenue Bond Index, fell approximately 35 basis
points to 5.25%, a level not seen since the mid-1970s. While low
inflation has supported lower interest rates, much of the decline in
bond yields in late 1997 and early 1998 was driven more by the
turmoil in Asian financial markets than by domestic economic
fundamentals. Weak economic conditions in Asia were expected to
negatively impact US growth through reduced export demand.
Additionally, inflation in the United States was also expected to
decline in response to lower prices on goods imported from Asian
manufacturers.
However, in recent months, many investors have become increasingly
concerned that most of the downturn in Asia, especially in Japan,
has already occurred and any future deterioration will not be severe
enough to constrain US economic growth and inflationary pressures.
These concerns served to push interest rates higher in the latter
part of the period, causing fixed-income yields to retrace much of
their earlier gains.
Thus far in 1998, the municipal bond market has experienced
unexpectedly strong supply pressures. These supply pressures have
prevented tax-exempt bond yields from declining as much as US
Treasury bond yields. Over the last six months, more than $135
billion in new tax-exempt bonds were underwritten, an increase of
over 40% compared to the same period a year ago. During the last
three months, municipalities issued more than $72 billion in new
securities, an increase of over 60% compared to the same three-month
period in 1997. Additionally, corporate issuers have also viewed
current interest rate levels as an opportunity to issue significant
amounts of taxable securities. Thus far in 1998, more than $100
billion in investment-grade corporate bonds have been underwritten,
an increase of over 60% relative to the comparable period a year
ago. This sizeable corporate bond issuance has tended to support
generally higher fixed-income yields and reduce the demand for tax-
exempt bonds.
However, the recent pace of new municipal bond issuance is unlikely
to be maintained. Continued increases in bond issuance will require
lower and lower tax-exempt bond yields to generate the economic
savings necessary for additional municipal bond refinancing.
Preliminary estimates for 1998 total municipal bond issuance are
presently in the $200 billion--$225 billion range. These estimates
suggest that recent supply pressures are likely to abate later in
the year. Municipal bond investors received approximately $30
billion earlier this year in coupon payments, bond maturities and
proceeds from early redemptions. The demand generated by these
assets has helped offset the increase in supply seen thus far this
year. Furthermore, looking ahead, June and July have also tended to
be periods of strong investor demand as seasonal factors are likely
to generate strong income flows similar to those seen earlier this
year.
MuniYield Insured Fund, Inc.
April 30, 1998
It is also possible that at least some of the recent economic
strength seen in the United States will be reversed in the coming
months. A particularly mild winter has been partially responsible
for a strong housing sector, as well as other construction
industries. This recent strong trend may not be sustained and may
lead to weaker construction growth later this year. Additionally,
strong economic growth in 1997 and the increased use of electronic
tax filing have resulted in larger and earlier Federal and state
income tax refunds to many individuals. These refunds appear to have
supported strong consumer spending in recent months, but may be
borrowing against weaker spending later this year. In addition, the
continued impact of the Asian financial crisis on the US domestic
economy's future growth remains unclear. Barring a dramatic and
unexpected resurgence of domestic inflation, we do not believe that
the Federal Reserve Board will be willing to raise interest rates
until the full impact of the Asian situation can be established.
All these factors suggest that over the near term, tax-exempt as
well as taxable bond yields are unlikely to rise by any appreciable
amount. Recent supply pressures have caused municipal bond yield
ratios to rise relative to US Treasury bond yields. At April 30,
1998, long-term tax-exempt bond yields were at attractive yield
ratios relative to comparable US Treasury securities (over 90%), and
well in excess of their expected range of 85%--88%. Any further
pressure upon the municipal market may well represent a very
attractive investment opportunity.
Portfolio Strategy
During the six-month period ended April 30, 1998, we continued to
follow the portfolio strategy that we had adopted during the prior
six-month period. At that time, our outlook was constructive toward
the municipal market because we believed any risk was biased toward
lower rather than higher interest rates. Therefore, we followed a
more aggressive investment strategy. We have essentially maintained
a fully invested position since that time and have kept cash
reserves at a minimum to seek to enhance the Fund's dividend and
capital appreciation potential.
Looking ahead, we expect to remain fully invested during the next
several months. We will continue to monitor economic data for any
signs of inflationary pressure or economic downturn so that we can
modify our portfolio strategy in an effort to seek to preserve the
Fund's capital or enhance total return.
In Conclusion
We appreciate your ongoing interest in MuniYield Insured Fund, Inc.,
and we look forward to assisting you with your financial needs in
the months and years ahead.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Vincent R. Giordano)
Vincent R. Giordano
Senior Vice President
(William R. Bock)
William R. Bock
Vice President and Portfolio Manager
June 2, 1998
MuniYield Insured Fund, Inc.
April 30, 1998
PORTFOLIO INSURANCE
MuniYield Insured Fund, Inc. seeks to provide its shareholders with
the benefits of an insured municipal bond portfolio. Previously, the
Fund generally achieved this objective by limiting at least 80% of
portfolio investments to municipal bonds insured under policies
obtained by the issuer or another party, including the Fund itself,
and issued by insurance carriers with claims paying ability ratings
of AAA or its equivalent from at least two nationally recognized
rating agencies, such as Standard & Poor's Ratings Services, Moody's
Investors Service, Inc., or Fitch IBCA, Inc. In order to increase
the Fund's flexibility to obtain appropriate investments, the Fund
has modified its practice with respect to the ratings criteria it
applies to the carriers that provide insurance for the municipal
bonds in its portfolio. Currently, the Fund may also invest in
municipal bonds insured by, or may itself purchase an insurance
policy for all or a portion of its municipal bond portfolio from, an
insurance carrier with a claims paying ability rating of AAA or its
equivalent from at least one of such nationally recognized rating
agencies. There can be no assurance that insurance of the kind
described above will continue to be available to the Fund, and the
Fund has reserved its right to modify its criteria for portfolio
insurance, or discontinue its policy of maintaining an insured
portfolio if such insurance is no longer available or if the cost of
such insurance outweighs its benefits to the Fund. Although we
periodically review the financial condition of each insurer, there
can be no assurance that the insurers will be able to honor their
obligations under the circumstances of any claim thereunder.
QUALITY PROFILE
The quality ratings of securities in the Fund as of April 30, 1998
were as follows:
Percent of
S&P Rating/Moody's Rating Net Assets
AAA/Aaa 84.8%
AA/Aa 5.3
A/A 4.2
BBB/Baa 1.0
NR (Not Rated) 0.7
Other++ 5.9
[FN]
++Temporary investments in short-term municipal securities.
MuniYield Insured Fund, Inc.
April 30, 1998
THE BENEFITS AND RISKS OF LEVERAGING
MuniYield Insured Fund, Inc. utilizes leveraging to seek to enhance
the yield and net asset value of its Common Stock. However, these
objectives cannot be achieved in all interest rate environments. To
leverage, the Fund issues Preferred Stock, which pays dividends at
prevailing short-term interest rates, and invests the proceeds in
long-term municipal bonds. The interest earned on these investments
is paid to Common Stock shareholders in the form of dividends, and
the value of these portfolio holdings is reflected in the per share
net asset value of the Fund's Common Stock. However, in order to
benefit Common Stock shareholders, the yield curve must be
positively sloped; that is, short-term interest rates must be lower
than long-term interest rates. At the same time, a period of
generally declining interest rates will benefit Common Stock
shareholders. If either of these conditions change, then the risks
of leveraging will begin to outweigh the benefits.
To illustrate these concepts, assume a fund's Common Stock
capitalization of $100 million and the issuance of Preferred Stock
for an additional $50 million, creating a total value of $150
million available for investment in long-term municipal bonds. If
prevailing short-term interest rates are approximately 3% and long-
term interest rates are approximately 6%, the yield curve has a
strongly positive slope. The fund pays dividends on the $50 million
of Preferred Stock based on the lower short-term interest rates. At
the same time, the fund's total portfolio of $150 million earns the
income based on long-term interest rates. Of course, increases in
short-term interest rates would reduce (and even eliminate) the
dividends on the Common Stock.
In this case, the dividends paid to Preferred Stock shareholders are
significantly lower than the income earned on the fund's long-term
investments, and therefore the Common Stock shareholders are the
beneficiaries of the incremental yield. However, if short-term
interest rates rise, narrowing the differential between short-term
and long-term interest rates, the incremental yield pickup on the
Common Stock will be reduced or eliminated completely. At the same
time, the market value 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.
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.
MuniYield Insured Fund, Inc.
April 30, 1998
PORTFOLIO ABBREVIATIONS
To simplify the listings of MuniYield Insured Fund, Inc.'s portfolio
holdings in the Schedule of Investments, we have abbreviated the
names of many of the securities accordingto the list below and 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
IDR Industrial Development Revenue Bonds
M/F Multi-Family
PCR Pollution Control Revenue Bonds
RIB Residual Interest Bonds
RITR Residual Interest Trust Receipts
S/F Single-Family
TRAN Tax and Revenue Anticipation Notes
UT Unlimited Tax
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--0.5% AAA Aaa $ 6,000 Huntsville, Alabama, Health Care Authority, Health Care
Facilities Revenue Bonds, Series B, 6.625% due 6/01/2004 (d)(g) $ 6,784
Alaska--0.8% AAA Aaa 10,410 Alaska State Housing Finance Corporation, RITR, Series 2,
7.27% due 12/01/2024 (d)(f)(i)(j) 11,152
Arizona--0.5% A1+ P1 2,100 Maricopa County, Arizona, Pollution Control Corporation, PCR,
Refunding (Arizona Public Service Company), VRDN, Series E,
4.10% due 5/01/2029 (a) 2,100
NR* NR* 5,000 Mohave County, Arizona, IDA, IDR (North Star Steel Company
Project), AMT, 6.70% due 3/01/2020 5,456
California--18.2% Anaheim, California, Public Financing Authority, Lease Revenue
Bonds (Public Improvements Project), Senior Series A (e):
AAA Aaa 5,250 6% due 9/01/2024 5,848
AAA Aaa 17,000 5% due 3/01/2037 16,030
California HFA, Revenue Bonds, AMT:
A+ Aa2 3,750 RIB, 9.162% due 8/01/2023 (j) 4,252
AAA Aaa 1,595 Series E, 7% due 8/01/2026 (d) 1,682
California State, GO (b):
AAA Aaa 10,680 5.90% due 3/01/2005 (g) 11,676
AAA Aaa 405 5.90% due 3/01/2025 423
AAA Aaa 10,000 Refunding, 5.25% due 6/01/2021 9,868
California State Public Works Board, Lease Revenue Bonds:
A A2 12,755 (California State University), Series C, 5.40% due 10/01/2022 12,720
A Aaa 8,500 (Department of Corrections--Monterey County Soledad II),
Series A, 7% due 11/01/2004 (g) 9,866
A+ A 2,750 (Various California State University Projects), Series A, 6.375%
due 10/01/2004 (g) 3,079
Los Angeles, California, Harbor Department Revenue Bonds, AMT:
AAA Aaa 4,000 RITR, Series 7, 7.995% due 11/01/2026 (d)(j) 4,905
AAA Aaa 6,330 Series B, 6.625% due 8/01/2019 (b) 6,857
AAA Aaa 8,725 Series B, 6.625% due 8/01/2025 (b) 9,462
AAA Aaa 10,000 Los Angeles, California, Wastewater System Revenue Bonds,
Series A, 5% due 6/01/2028 (c) 9,508
AAA Aaa 15,000 Los Angeles County, California, Metropolitan Transportation
Authority, Sales Tax Revenue Bonds (Proposition A--First Tier),
Senior Series A, 6% due 7/01/2026 (d) 15,939
</TABLE>
MuniYield Insured Fund, Inc.
April 30, 1998
<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>
California AAA Aaa $19,430 Los Angeles County, California, Public Works Financing
(concluded) Authority, Lease Revenue Bonds (Multiple Capital Facilities
Project), Series V-B, 5.125% due 12/01/2029 (b) $ 18,709
AAA Aaa 5,000 Los Angeles County, California, Transportation Commission,
Sales Tax Revenue Refunding Bonds, Series B, 6.50% due
7/01/2015 (c) 5,373
AAA Aaa 2,190 Northern California Transmission Revenue Bonds (California--
Oregon Transmission Project), Series A, 6.50% due 5/01/2016 (d) 2,370
AAA Aaa 6,720 Port Oakland, California, Port Revenue Bonds, AMT, Series G,
5.50% due 11/01/2017 (d) 6,835
AAA Aaa 3,000 Sacramento, California, Municipal Utility District, Electric
Revenue Bonds, Series I, 6% due 1/01/2024 (d) 3,175
AAA Aaa 10,000 San Diego, California, Public Facilities Financing Authority,
Sewer Revenue Bonds, Series A, 5.25% due 5/15/2027 (c) 9,868
San Francisco, California, Bay Area Rapid Transit District,
Sales Tax Revenue Bonds (c):
AAA Aaa 5,615 5.50% due 7/01/2005 (g) 6,003
AAA Aaa 6,865 5.50% due 7/01/2020 6,941
San Francisco, California, City and County Airports Commission,
International Airport Revenue Bonds (International Airport),
Second Series:
AAA Aaa 6,000 AMT, Issue 6, 6.60% due 5/01/2024 (b) 6,513
AAA Aaa 2,500 Issue 8B, 6.10% due 5/01/2025 (c) 2,668
AAA Aaa 9,500 Issue 9B, 5.25% due 5/01/2020 (c) 9,378
AAA Aaa 5,000 San Francisco, California, City and County, COP (San
Francisco Courthouse Project), 5.875% due 4/01/2021 (e) 5,231
AAA Aaa 10,000 San Francisco, California, City and County Sewer Revenue
Bonds, Series A, 5.95% due 10/01/2025 (c) 10,481
AAA Aaa 10,125 San Joaquin Hills, California, Transportation Corridor Agency,
Toll Road Revenue Bonds, RITR, 6.12% due 1/15/2030 (d)(j) 9,695
San Jose, California, Redevelopment Agency, Tax Allocation
Refunding Bonds (Merged Area Redevelopment Project)(d):
AAA Aaa 6,895 5.60% due 8/01/2019 7,056
AAA Aaa 5,725 5.625% due 8/01/2025 5,861
AAA Aaa 8,000 Santa Clara, California, Electric Revenue Refunding Bonds,
Series A, 5% due 7/01/2027 (b) 7,611
AAA Aaa 2,000 Santa Clara County, California, Financing Authority, Lease
Revenue Bonds (VMC Facility Replacement Project), Series A,
6.75% due 11/15/2004 (b)(g) 2,297
Santa Rosa, California, Wastewater Revenue Refunding
Bonds (c):
AAA Aaa 3,000 Series A, 5.25% due 9/01/2016 3,042
AAA Aaa 3,295 Series B, 6.125% due 9/01/2017 3,517
Colorado--1.8% AAA Aaa 10,000 Colorado Public Highway Authority, Revenue Refunding Bonds
(E-470), Senior Series A, 4.75% due 9/01/2023 (d) 9,159
AAA Aa2 14,500 Colorado Springs, Colorado, Utilities Revenue Bonds, Series
A, 6.10% due 11/15/2005 (g) 15,999
AAA Aaa 105 Douglas County, Colorado, School District No. 1 (Douglas and
Elbert Counties Improvement), Series A, 6.50% due
12/15/2016 (d) 116
Connecticut AAA Aaa 9,695 Connecticut State, HFA (Housing Mortgage Finance Program),
- - --1.2% Series B, 6.75% due 11/15/2023 (d) 10,482
Connecticut State Health and Educational Facilities
Authority Revenue Bonds (Nursing Home Program):
AA- A1 5,000 (AHF/Hartford), 7.125% due 11/01/2024 5,689
AA- A1 1,035 (AHF/Windsor Project), 7.125% due 11/01/2024 1,178
</TABLE>
MuniYield Insured Fund, Inc.
April 30, 1998
<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>
Delaware--0.3% AAA Aaa $ 3,525 Delaware Transportation Authority, Transportation System
Revenue Bonds, 7% due 7/01/2004 (c)(g) $ 4,061
District of AAA Aaa 20,100 Metropolitan Washington, District of Columbia, Virginia
Columbia--1.6% Airports Authority, General Airport Revenue Bonds, AMT,
Series A, 6.625% due 10/01/2019 (d) 21,820
Florida--0.5% A1+ VMIG1++ 900 Dade County, Florida, Water and Sewer System Revenue Bonds,
VRDN, 4% due 10/05/2022 (a)(c) 900
AAA Aaa 5,000 Orange County, Florida, Tourist Development Tax Revenue
Bonds, Series B, 6.50% due 10/01/2002 (b)(g) 5,518
Georgia--1.5% AAA Aaa 10,000 Georgia Municipal Electric Authority, Power Revenue Bonds,
Series EE, 6.40% due 1/01/2023 (b) 10,938
AAA Aaa 6,500 Metropolitan Atlanta, Georgia, Rapid Transit Authority, Sales
Tax Revenue Bonds, Second Indenture, Series A, 6.90% due
7/01/2004 (d)(g) 7,449
AAA Aaa 2,000 Municipal Electric Authority, Georgia (Project One),
Sub-Series A, 6.50% due 1/01/2004 (b)(g) 2,236
Hawaii--2.1% Hawaii State Airports Systems Revenue Bonds, AMT, Second
Series (d):
AAA Aaa 6,000 7% due 7/01/2018 6,487
AAA Aaa 17,145 6.75% due 7/01/2021 18,411
AAA Aaa 5,000 Hawaii State, Series CR, 4.75% due 4/01/2018 (d) 4,647
Illinois--4.4% AAA Aaa 9,160 Chicago, Illinois, Midway Airport Revenue Bonds, AMT, Series
A, 6.25% due 1/01/2024 (d) 9,767
AAA Aaa 3,870 Chicago, Illinois, O'Hare International Airport, Special
Facilities Revenue Bonds (International Terminal), AMT, 6.75%
due 1/01/2018 (d) 4,179
AAA Aaa 10,000 Chicago, Illinois, Project and Refunding Bonds, UT, 5.25% due
1/01/2020 (c) 9,784
AAA Aaa 12,000 Chicago, Illinois, Public Building Commission, Building
Revenue Bonds, Series A, 6.50% due 1/01/2018 (d)(h) 12,442
AAA Aaa 6,000 Chicago, Illinois, Wastewater Transmission Revenue Bonds,
6.375% due 1/01/2005 (d)(g) 6,734
AAA Aaa 10,000 Chicago, Illinois, Water Revenue Refunding Bonds, 5.25% due
11/01/2027 (c) 9,722
AAA Aaa 3,000 Illinois Health Facilities Authority Revenue Bonds (Servantcor
Project), Series A, 6.375% due 8/15/2021 (e) 3,271
Metropolitan Pier and Exposition Authority, Illinois, Dedicated
State Tax Revenue Bonds (McCormick Place Expansion Project),
Series A (b):
AAA Aaa 5,000 6.50% due 6/15/2003 (g) 5,560
AAA Aaa 175 6.50% due 6/15/2027 191
Indiana--1.8% AAA Aaa 3,150 Hammond, Indiana, Multi-School Building Corporation, Refunding
(First Mortgage), 5.75% due 1/15/2017 (d) 3,287
AAA Aaa 2,400 Indiana State Vocational Technical College Building Facilities
Refunding Bonds (Student Fee), Series D, 6.50% due 7/01/2014 (b) 2,651
AAA Aaa 10,000 Indianapolis, Indiana, Economic Development Revenue Bonds
(Archdiocese of Indianapolis Education Facilities Project),
5.50% due 7/01/2026 (d) 10,116
AAA Aaa 5,000 Indianapolis, Indiana, Gas Utility Revenue Bonds, Series A,
6.20% due 6/01/2023 (c) 5,349
AA NR* 3,000 Indianapolis, Indiana, Local Public Improvement Bond Bank,
Refunding, Series D, 6.75% due 2/01/2020 3,306
</TABLE>
MuniYield Insured Fund, Inc.
April 30, 1998
<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>
Iowa--0.1% AAA Aaa $ 1,945 Iowa Financing Authority, S/F Mortgage, Refunding, Series F,
6.35% due 7/01/2009 (b) $ 2,046
Kansas--1.9% AAA Aaa 20,250 Burlington, Kansas, PCR, Refunding (Kansas Gas and Electric
Company Project), 7% due 6/01/2031 (d) 21,954
AAA Aaa 5,000 Kansas State Turnpike Authority, Turnpike Revenue Refunding
Bonds, 5.25% due 9/01/2017 (b) 4,988
Maryland--0.3% Maryland State Community Development Administration,
Department of Housing and Community Development:
NR* Aa 2,085 M/F Housing Revenue Bonds, Series C, 6.65% due 5/15/2025 2,218
NR* Aa2 1,985 S/F Program, AMT, Second Series, 6.55% due 4/01/2026 2,116
Massachusetts Massachusetts State Consolidation Loan, GO, UT, Series B (d):
- - --7.3% AAA Aaa 9,160 4.75% due 4/01/2017 8,584
AAA Aaa 9,595 4.75% due 4/01/2018 8,973
Massachusetts State Health and Educational Facilities
Authority Revenue Bonds:
AAA Aaa 5,000 (Massachusetts General Hospital), Series F, 6.25% due
7/01/2020 (b) 5,406
AAA Aaa 7,130 (New England Medical Center Hospitals), Series F, 6.625% due
7/01/2025 (c) 7,747
AAA Aaa 10,000 (Northeastern University), Series E, 6.55% due 10/01/2022 (d) 10,914
AAA Aaa 6,175 Massachusetts State Industrial Finance Agency Revenue Bonds
(Tufts University), Series H, 4.75% due 2/15/2028 (d) 5,617
AAA Aaa 45,000 Massachusetts State Turnpike Authority, Metropolitan Highway
System Revenue Bonds, Series A, 5% due 1/01/2037 (d) 42,226
AAA Aaa 3,250 Massachusetts State Turnpike Authority, Western Turnpike
Revenue Bonds, Series A, 5.55% due 1/01/2017 (d) 3,284
AAA Aaa 10,620 Massachusetts State Water Resource Authority, General Bonds,
Series A, 4.75% due 8/01/2027 (e) 9,581
Michigan--3.1% AAA Aaa 2,750 Caledonia, Michigan, Community Schools, Refunding, UT,
6.625% due 5/01/2014 (b) 2,992
AAA Aaa 21,750 Michigan State Strategic Fund, Limited Obligation Revenue
Refunding Bonds (Detroit Edison Company Pollution Project),
6.875% due 12/01/2021 (c) 23,624
Monroe County, Michigan, PCR (Detroit Edison Company),
AMT (d):
AAA Aaa 5,000 Series CC, 6.55% due 6/01/2024 5,417
AAA Aaa 8,500 Series I-B, 6.55% due 9/01/2024 9,232
A1+ VMIG1++ 1,600 Royal Oak, Michigan, Hospital Finance Authority, Hospital
Revenue Bonds (William Beaumont Hospital), VRDN, Series L,
4.15% due 1/01/2027 (a) 1,600
A1+ VMIG1++ 400 University of Michigan, University Hospital Revenue Bonds,
VRDN, Series A, 4.10% due 12/01/2027 (a) 400
Minnesota--1.5% A- Baa1 4,500 Minneapolis and St. Paul, Minnesota, Housing and
Redevelopment Authority, Health Care System Revenue Bonds
(Group Health Plan Inc. Project), 6.90% due 10/15/2022 4,914
Minnesota State, HFA, S/F Mortgage, AMT:
AA Aa2 3,590 Series H, 6.50% due 1/01/2026 3,767
AA Aa2 2,790 Series L, 6.70% due 7/01/2020 2,956
AA+ NR* 10,000 Rochester, Minnesota, Health Care Facilities Revenue Bonds
(Mayo Foundation), Series A, 5.50% due 11/15/2027 10,043
</TABLE>
MuniYield Insured Fund, Inc.
April 30, 1998
<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>
Mississippi AAA Aaa $ 3,930 Mississippi Hospital Equipment and Facilities Authority,
- - --0.3% Revenue Refunding Bonds (Mississippi Baptist Medical Center),
6.50% due 5/01/2011 (d) $ 4,330
Missouri--0.6% AAA Aaa 7,000 Kansas City, Missouri, Airport Revenue Bonds, General
Improvement, Series B, 6.875% due 9/01/2004 (e)(g) 7,985
Montana--0.4% BBB Baa2 2,040 Lewis & Clark County, Montana, Environmental Revenue
Refunding Bonds (Asarco Inc. Project), 5.60% due 1/01/2027 2,041
AAA Aaa 4,500 Montana State Health Facilities Authority Revenue Bonds
(Sisters of Charity Leavenworth), 5% due 12/01/2024 (d) 4,253
Nebraska--0.3% AAA Aaa 5,000 Nebraska Public Power District Revenue Bonds (Power Supply
System), Series A, 5.25% due 1/01/2022 (d) 4,920
Nevada--6.5% AAA Aaa 15,000 Clark County, Nevada, GO, School District, 6% due 6/15/2014 (c) 16,019
AAA Aaa 5,000 Humboldt County, Nevada, PCR, Refunding (Sierra Pacific
Project), 6.55% due 10/01/2013 (b) 5,424
AAA Aaa 16,775 Nevada State, RITR, Series 36, 6.22% due 11/01/2025 (c)(j) 17,173
AAA Aaa 27,350 Nevada State, Refunding (Municipal Bond Book Project
Nos. 65 and R-6), 4.75% due 5/15/2026 (d) 24,980
Washoe County, Nevada, Gas Facilities Revenue Bonds (Sierra
Pacific Power Company), AMT:
AAA Aaa 5,000 6.65% due 6/01/2017 (d) 5,433
AAA Aaa 15,000 6.65% due 12/01/2017 (b) 16,267
AAA Aaa 5,000 6.55% due 9/01/2020 (d) 5,432
New Jersey--0.4% AAA Aaa 5,000 New Jersey State Housing and Mortgage Finance Agency
Revenue Bonds (Home Buyer), AMT, Series K, 6.375% due
10/01/2026 (d) 5,332
New Mexico--1.3% AAA Aaa 10,000 Farmington, New Mexico, PCR, Refunding (Southern California
Edison Company), Series A, 5.875% due 6/01/2023 (d) 10,395
AAA Aaa 5,750 Gallup, New Mexico, PCR, Refunding (Plains Electric
Generation), 6.65% due 8/15/2017 (d) 6,263
NR* A 1,635 New Mexico Educational Assistance Foundation, Student Loan
Revenue Bonds, AMT, First Sub-Series A-2, 6.65% due 11/01/2025 1,760
New York--13.5% AAA Aaa 3,500 Metropolitan Transportation Authority, New York, Commuter
Facilities Revenue Bonds, RITR, Series 9, 7.72% due
7/01/2026 (j) 4,047
BBB+ Baa1 10,980 Metropolitan Transportation Authority, New York, Transit
Facilities Service Contract, Refunding, Series 5, 7% due
7/01/2012 11,914
AAA Aaa 5,000 New York City, New York, Cultural Resource Trust Revenue Bonds
(American Musuem of National History), Series A, 5.65% due
4/01/2027 (d) 5,127
AAA Aaa 6,180 New York City, New York, Educational Construction Fund
Revenue Bonds, Junior Sub-Lien, 5.50% due 4/01/2026 (b) 6,255
BBB+ A3 15,000 New York City, New York, GO, Series D, 5.25% due 8/01/2021 14,529
New York City, New York, Municipal Water Finance Authority,
Water and Sewer System Revenue Bonds:
AAA Aaa 25,830 RITR, Series RI-97-6, 6.995% due 6/15/2026 (d)(j) 27,638
A1+ VMIG1++ 17,770 VRDN, Series 93-C, 4.10% due 6/15/2022 (a)(c) 17,770
A1+ VMIG1++ 200 VRDN, Series C, 4.10% due 6/15/2023 (a)(c) 200
AA Aa3 14,000 New York City, New York, Transitional Finance Authority
Revenue Bonds (Future Tax Secured), Series A, 5% due
8/15/2027 13,258
</TABLE>
MuniYield Insured Fund, Inc.
April 30, 1998
<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 York New York State Dormitory Authority Revenue Bonds:
(concluded) AAA Aaa $10,000 (City University System), Consolidated Third Series
1, 5% due 7/01/2026 (c) $ 9,507
AAA Aaa 20,150 Refunding (New York and Presbyterian Hospitals), 4.75% due
8/01/2027 (b) 18,426
AAA Aaa 7,000 Refunding (Pace University), 5.70% due 7/01/2022 (d) 7,251
A- A3 7,595 Refunding (State University Educational Facilities), Series B,
7% due 5/15/2016 8,085
AAA Aaa 8,000 (State University Educational Facilities), Series A, 4.75%
due 5/15/2025 (d) 7,307
AAA Aaa 6,000 New York State Energy Research and Development Authority,
Gas Facilities Revenue Bonds, RITR, Series 9, 6.52% due
1/01/2021 (d)(j) 6,165
AAA Aaa 33,150 New York State Local Government Assistance Corporation,
Refunding, Series B, 4.875% due 4/01/2020 (d) 31,131
North Carolina AAA Aaa 7,500 North Carolina, Medical Care Commission, Hospital Revenue
- - --0.5% Refunding Bonds (Rex Healthcare), 5% due 6/01/2017 (b) 7,206
North Dakota--0.5% Grand Forks, North Dakota, Health Care Facilities Revenue
Bonds (d):
AAA Aaa 3,725 (Altru Health System Obligation Group), 5.60% due 8/15/2017 3,801
AAA Aaa 2,500 (United Hospital Obligated Group), 6.25% due 12/01/2024 2,724
Ohio--0.4% AAA Aaa 2,500 North Canton, Ohio School District Improvement, GO, UT, 6.70%
due 12/01/2004 (b)(g) 2,857
AAA Aaa 2,500 Ohio State Higher Educational Facilities Commission, Mortgage
Revenue Bonds (University of Dayton Project), 6.60% due
12/01/2017 (c) 2,769
Oregon--1.0% AA Aa2 9,000 Oregon State, Veterans Welfare, Series 77, 5.30% due 10/01/2029 8,972
AAA Aaa 5,000 Port of Portland, Oregon, International Airport Revenue Bonds
(Portland International Airport), AMT, Series 11, 5.625% due
7/01/2026 (c) 5,091
Pennsylvania A1+ P1 400 Beaver County, Pennsylvania, IDA, PCR, Refunding (Duquesne
- - --2.2% Light Company--Mansfield), VRDN, Series B, 4.05% due
8/01/2009 (a) 400
AAA Aaa 16,000 Montgomery County, Pennsylvania, IDA, PCR, Refunding
(Philadelphia Electric Company), Series B, 6.70% due
12/01/2021 (d) 17,315
AA+ Aa2 4,000 Pennsylvania, HFA, RIB, AMT, 8.293% due 4/01/2025 (j) 4,320
Pennsylvania State Higher Educational Facilities Authority,
Revenue Refunding Bonds (Carnegie Mellon University),
VRDN (a):
A1+ NR* 5,400 Series A, 4.15% due 11/01/2025 5,400
A1+ NR* 3,000 Series C, 4.15% due 11/01/2029 3,000
South Carolina AAA Aaa 10,000 Piedmont, South Carolina, Municipal Power Agency, Electric
- - --2.0% Revenue Refunding Bonds, 6.30% due 1/01/2003 (d)(g) 10,979
AAA Aaa 4,850 South Carolina State Public Service Authority, Revenue
Refunding Bonds, Series B, 5.875% due 1/01/2023 (c) 5,085
AAA Aaa 7,000 Spartanburg County, South Carolina, Hospital Facilities
Revenue Refunding Bonds (Spartanburg General Hospital
System), Series A, 6.625% due 4/15/2022 (e) 7,585
NR* NR* 4,200 Spartanburg County, South Carolina, Solid Waste Disposal
Facilities Revenue Bonds (BMW Project), AMT, 7.55% due
11/01/2024 4,828
</TABLE>
MuniYield Insured Fund, Inc.
April 30, 1998
<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>
Tennessee--0.7% AAA Aaa $ 3,820 Johnson City, Tennessee, Health and Educational Facilities
Board, Hospital Revenue Refunding and Improvement Bonds
(Johnson City Medical Center), 6.75% due 7/01/2016 (d) $ 4,126
A+ A1 4,900 Tennessee, HDA, Mortgage Finance, AMT, Series A, 6.90% due
7/01/2025 5,239
Texas--8.2% AAA Aaa 3,200 Bexar, Texas, Metropolitan Water District, Waterworks System
Revenue Refunding Bonds, 6.35% due 5/01/2025 (d) 3,524
Brazos River Authority, Texas, PCR (Texas Utilities Electric
Company Project), AMT (b):
AAA Aaa 11,500 Refunding, 6.50% due 12/01/2027 12,466
AAA Aaa 3,800 Series A, 6.75% due 4/01/2022 4,118
AAA Aaa 7,000 Brazos River Authority, Texas, Revenue Refunding Bonds
(Houston Light and Power), Series A, 6.70% due 3/01/2017 (b) 7,590
Harris County, Texas, Health Facilities Development
Corporation, Hospital Revenue Bonds:
A1+ NR* 27,100 (Methodist Hospital), VRDN, 4.15% due 12/01/2025 (a) 27,100
AAA Aaa 2,150 RITR, Series 12, 8.27% due 10/01/2004 (d)(g)(j) 2,628
AAA Aaa 7,675 RITR, Series 23, 6.02% due 6/01/2027 (e)(j) 7,243
A1+ NR* 2,000 (Saint Lukes Episcopal Hospital), VRDN, Series A, 4.15% due
2/15/2027 (a) 2,000
AAA Aaa 6,885 Houston, Texas, Airport System Revenue Bonds (Sub-Lien), AMT,
Series A, 6.75% due 7/01/2021 (c) 7,393
AAA Aaa 4,465 Houston, Texas, Water and Sewer System Revenue Bonds, Junior
Lien, Series A, 6.375% due 12/01/2022 (d) 4,852
Matagorda County, Texas, Navigation District No. 1, Revenue
Refunding Bonds (Houston Light and Power Company Project)(b):
AAA Aaa 11,795 Series A, 6.70% due 3/01/2027 12,789
A1+ VMIG1++ 2,500 VRDN, AMT, Series 1997, 4.20% due 11/01/2028 (a) 2,500
Sabine River Authority, Texas, PCR, Refunding (Texas Utilities
Electric Company Project):
AAA Aaa 1,500 6.55% due 10/01/2022 (c) 1,631
A1+ VMIG1++ 800 VRDN, Series A, 4.10% due 3/01/2026 (a)(b) 800
SP1+ MIG1++ 17,600 Texas State, TRAN, Series A, 4.75% due 8/31/1998 17,655
Utah--0.3% AAA Aaa 4,000 Salt Lake City, Utah, Airport Revenue Bonds, AMT, Series A,
6.125% due 12/01/2022 (c) 4,242
Virginia--2.3% AAA Aaa 5,540 Loudon County, Virginia, COP, 6.90% due 3/01/2019 (e) 6,180
AAA Aaa 6,900 Upper Occoquan, Virginia, Sewer Authority, Regional Sewer
Revenue Bonds, Series A, 4.75% due 7/01/2029 (d) 6,265
Virginia State, HDA, Commonwealth Mortgage:
AAA Aaa 9,000 AMT, Series A, Sub-Series A-4, 6.45% due 7/01/2028 (d) 9,585
AA+ Aa1 6,000 AMT, Series B, Sub-Series B-1, 6.375% due 7/01/2026 6,356
AA+ Aa1 3,500 Series J, Sub-Series J-2, 6.75% due 7/01/2017 3,755
Washington--8.7% AAA Aaa 6,595 Chelan County, Washington, Public Utility District No. 001,
Consolidated Revenue Refunding Bonds (Chelan Hydro), AMT,
Series B, 6.35% due 7/01/2026 (d) 7,189
Port Seattle, Washington, Revenue Bonds:
AAA Aaa 10,000 Series A, 5.50% due 10/01/2017 (c) 10,214
AAA Aaa 9,495 (Sub-Lien), Series C, 6.625% due 8/01/2017 (d) 10,347
Seattle, Washington, Metropolitan Seattle Municipality, Sewer
Revenue Bonds, Series W (d):
AAA Aaa 1,465 6.25% due 1/01/2021 1,576
AAA Aaa 1,750 6.25% due 1/01/2022 1,883
</TABLE>
MuniYield Insured Fund, Inc.
April 30, 1998
<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>
Washington AAA Aaa $ 5,000 Snohomish County, Washington, Public Utility District No. 001,
(concluded) Electric Revenue Bonds (Generation System), AMT, Series B,
5.80% due 1/01/2024 (d) $ 5,130
AAA Aaa 7,875 Spokane, Washington, Lease Revenue Refunding Bonds
(Financing--Multi-Purpose Arena Project), AMT, Series A,
6.60% due 1/01/2014 (b) 8,476
AAA Aaa 6,000 Tacoma, Washington, Refuse Utility Revenue Bonds, 7% due
12/01/2004 (b)(g) 6,951
AAA Aaa 8,705 Tacoma Washington, Solid Waste Utility, Revenue Refunding
Bonds, Series B, 5.50% due 12/01/2019 (b) 8,816
AAA Aaa 2,000 University of Washington Alumni Association, Lease Revenue
Bonds (University of Washington Medical Center--Roosevelt II),
6.25% due 8/15/2012 (e) 2,177
AAA Aaa 14,860 Washington State, GO, Series C, 5% due 1/01/2022 (c) 14,185
Washington State Health Care Facilities Authority Revenue Bonds:
A+ A1 8,300 (Children's Hospital and Medical Center), 6% due 10/01/2022 8,434
AAA Aaa 5,000 Refunding (Catholic Health Initiatives), Series A, 5.125% due
12/01/2021 (d) 4,773
AAA Aaa 2,500 (Virginia Mason Obligation Group of Seattle), 6.30% due
2/15/2017 (d) 2,687
Washington State Public Power Supply System, Revenue
Refunding Bonds:
AAA Aaa 13,095 (Nuclear Project No. 1), Series A, 6.25% due 7/01/2017 (d) 14,070
AAA Aaa 10,000 (Nuclear Project No. 1), Series B, 5.125% due 7/01/2017 (b) 9,743
AAA Aaa 4,800 (Nuclear Project No. 3), Series A, 5.25% due 7/01/2016 (e) 4,739
West AAA Aaa 4,425 Harrison County, West Virginia, County Commission, Solid
Virginia--0.4% Waste Disposal Revenue Bonds (Monongahela Power), AMT,
Series C, 6.75% due 8/01/2024 (b) 4,901
Wisconsin--2.0% AA Aa 2,000 Wisconsin, Housing and EDA, Home Ownership Revenue Bonds,
AMT, Series B, 6.75% due 9/01/2025 2,117
Wisconsin Public Power Inc., Power Supply System Revenue
Bonds, Series A (d):
AAA Aaa 5,000 6% due 7/01/2015 5,366
AAA Aaa 13,685 5.75% due 7/01/2023 14,174
Wisconsin State Health and Educational Facilities Authority,
Revenue Refunding Bonds (Wheaton--Franciscan Services)(d):
AAA Aaa 3,955 6.50% due 8/15/2011 4,237
AAA Aaa 2,000 6% due 8/15/2015 2,074
Total Investments (Cost--$1,352,278)--101.9% 1,425,524
Liabilities in Excess of Other Assets--(1.9%) (27,175)
----------
Net Assets--100.0% $1,398,349
==========
<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, 1998.
(b)AMBAC Insured.
(c)FGIC Insured.
(d)MBIA Insured.
(e)FSA Insured.
(f)FNMA Collateralized.
(g)Prerefunded.
(h)Escrowed to maturity.
(i)GNMA Collateralized.
(j)The interest rate is subject to change periodically and inversely
based upon prevailing market rates. The interest rate shown is the
rate in effect at April 30, 1998.
*Not Rated.
++Highest short-term rating by Moody's Investors Service, Inc.
See Notes to Financial Statements.
</TABLE>
MuniYield Insured Fund, Inc.
April 30, 1998
FINANCIAL INFORMATION
<TABLE>
Statement of Assets, Liabilities and Capital as of April 30, 1998
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$1,352,278,152)
(Note 1a) $1,425,524,132
Cash 112,389
Receivables:
Securities sold $ 32,132,529
Interest 22,997,266 55,129,795
--------------
Prepaid expenses and other assets 73,373
--------------
Total assets 1,480,839,689
--------------
Liabilities: Payables:
Securities purchased 80,748,624
Dividends to shareholders (Note 1f) 1,029,750
Investment adviser (Note 2) 582,026 82,360,400
--------------
Accrued expenses and other liabilities 129,891
--------------
Total liabilities 82,490,291
--------------
Net Assets: Net assets $1,398,349,398
==============
Capital: Capital Stock (200,000,000 shares authorized) (Note 4):
Preferred Stock, par value $.05 per share (17,600 shares
of AMPS* issued and outstanding at $25,000 per share
liquidation preference) $ 440,000,000
Common Stock, par value $.10 per share (61,351,136 shares
issued and outstanding) $ 6,135,114
Paid-in capital in excess of par 858,201,728
Undistributed investment income--net 11,844,466
Undistributed realized capital gains on investments--net 8,922,110
Unrealized appreciation on investments--net 73,245,980
--------------
Total--Equivalent to $15.62 net asset value per share of
Common Stock (market price--$14.875) 958,349,398
--------------
Total capital $1,398,349,398
==============
<FN>
*Auction Market Preferred Stock.
See Notes to Financial Statements.
</TABLE>
MuniYield Insured Fund, Inc.
April 30, 1998
FINANCIAL INFORMATION (continued)
<TABLE>
Statement of Operations
<CAPTION>
For the Six Months Ended
April 30, 1998
<S> <S> <C> <C>
Investment Income Interest and amortization of premium and discount earned $ 39,192,558
(Note 1d):
Expenses: Investment advisory fees (Note 2) $ 3,484,945
Commission fees (Note 4) 555,700
Accounting services (Note 2) 81,103
Transfer agent fees 77,687
Professional fees 51,774
Custodian fees 37,859
Directors' fees and expenses 36,576
Printing and shareholder reports 22,640
Listing fees 18,956
Pricing fees 12,333
Other 18,067
--------------
Total expenses 4,397,640
--------------
Investment income--net 34,794,918
--------------
Realized & Realized gain on investments--net 20,477,357
Unrealized Change in unrealized appreciation on investments--net (22,949,489)
Gain (Loss) --------------
on Investments Net Increase in Net Assets Resulting from Operations $ 32,322,786
- - --Net (Notes 1b, ==============
1d & 3):
See Notes to Financial Statements.
</TABLE>
MuniYield Insured Fund, Inc.
April 30, 1998
FINANCIAL INFORMATION (continued)
<TABLE>
Statements of Changes in Net Assets
<CAPTION>
For the Six For the
Months Ended Year Ended
Increase (Decrease) in Net Assets: April 30, 1998 Oct. 31, 1997
<S> <S> <C> <C>
Operations: Investment income--net $ 34,794,918 $ 67,509,823
Realized gain on investments--net 20,477,357 12,466,054
Change in unrealized appreciation on investments--net (22,949,489) 21,056,912
-------------- --------------
Net increase in net assets resulting from operations 32,322,786 101,032,789
-------------- --------------
Dividends & Investment income--net:
Distributions to Common Stock (27,278,985) (51,886,380)
Shareholders Preferred Stock (6,091,740) (13,590,316)
(Note 1f): Realized gain on investments--net:
Common Stock (9,753,910) (6,926,993)
Preferred Stock (2,462,754) (1,762,542)
-------------- --------------
Net decrease in net assets resulting from dividends and
distributions to shareholders (45,587,389) (74,166,231)
-------------- --------------
Capital Stock Proceeds from issuance of Common Stock resulting from
Transactions reorganization -- 243,897,323
(Notes 1e & 4): Offering costs from issuance of Common Stock resulting from
reorganization -- (622,402)
Proceeds from issuance of Preferred Stock resulting from
reorganization -- 120,000,000
-------------- --------------
Net increase in net assets derived from capital stock
transactions -- 363,274,921
-------------- --------------
Net Assets: Total increase (decrease) in net assets (13,264,603) 390,141,479
Beginning of period 1,411,614,001 1,021,472,522
-------------- --------------
End of period* $1,398,349,398 $1,411,614,001
============== ==============
<FN>
*Undistributed investment income--net $ 11,844,466 $ 10,420,273
============== ==============
See Notes to Financial Statements.
</TABLE>
MuniYield Insured Fund, Inc.
April 30, 1998
FINANCIAL INFORMATION (concluded)
<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: 1998 1997 1996 1995 1994
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 15.84 $ 15.52 $ 15.46 $ 13.85 $ 16.76
Operating -------- -------- -------- -------- --------
Performance: Investment income--net .57 1.15 1.18 1.20 1.20
Realized and unrealized gain (loss) on
investments--net (.05) .54 .15 1.66 (2.66)
-------- -------- -------- -------- --------
Total from investment operations .52 1.69 1.33 2.86 (1.46)
-------- -------- -------- -------- --------
Less dividends and distributions to Common
Stock shareholders:
Investment income--net (.44) (.92) (.91) (.92) (.98)
Realized gain on investments--net (.16) (.15) (.09) --++ (.26)
In excess of realized gain on
investments--net -- -- -- (.04) --
-------- -------- -------- -------- --------
Total dividends and distributions to Common
Stock shareholders (.60) (1.07) (1.00) (.96) (1.24)
-------- -------- -------- -------- --------
Capital charge resulting from the issuance
of Common Stock -- (.01) -- -- --
-------- -------- -------- -------- --------
Effect of Preferred Stock activity:++++
Dividends and distributions to Preferred
Stock shareholders:
Investment income--net (.10) (.25) (.24) (.28) (.17)
Realized gain on investments--net (.04) (.04) (.03) --++ (.04)
In excess of realized gain on
investments--net -- -- -- (.01) --
-------- -------- -------- -------- --------
Total effect of Preferred Stock activity (.14) (.29) (.27) (.29) (.21)
-------- -------- -------- -------- --------
Net asset value, end of period $ 15.62 $ 15.84 $ 15.52 $ 15.46 $ 13.85
======== ======== ======== ======== ========
Market price per share, end of period $ 14.875 $14.8125 $ 14.00 $ 13.625 $ 11.625
======== ======== ======== ======== ========
Total Investment Based on market price per share 4.44%+++ 13.92% 10.30% 26.09% (20.23%)
Return:** ======== ======== ======== ======== ========
Based on net asset value per share 2.56%+++ 9.89% 7.76% 20.09% (9.98%)
======== ======== ======== ======== ========
Ratios to Average Expenses .63%* .63% .64% .65% .66%
Net Assets:*** ======== ======== ======== ======== ========
Investment income--net 4.99%* 5.17% 5.22% 5.55% 5.35%
======== ======== ======== ======== ========
Supplemental Net assets, net of Preferred Stock, end
Data: of period (in thousands) $958,349 $971,614 $701,473 $698,512 $625,630
======== ======== ======== ======== ========
Preferred Stock outstanding, end of
period (in thousands) $440,000 $440,000 $320,000 $320,000 $320,000
======== ======== ======== ======== ========
Portfolio turnover 55.61% 98.91% 100.49% 59.71% 45.71%
======== ======== ======== ======== ========
Leverage: Asset coverage per $1,000 $ 3,178 $ 3,208 $ 3,192 $ 3,183 $ 2,955
======== ======== ======== ======== ========
Dividends Series A--Investment income--net $ 331 $ 808 $ 832 $ 1,043 $ 1,184
Per Share on ======== ======== ======== ======== ========
Preferred Stock Series B--Investment income--net $ 324 $ 813 $ 835 $ 1,043 $ 1,090
Outstanding:++++++ ======== ======== ======== ======== ========
Series C--Investment income--net $ 326 $ 812 $ 841 $ 1,042 $ 1,278
======== ======== ======== ======== ========
Series D--Investment income--net $ 347 $ 789 $ 865 $ 950 $ 1,144
======== ======== ======== ======== ========
Series E--Investment income--net $ 338 $ 797 $ 842 $ 933 $ 1,282
======== ======== ======== ======== ========
Series F--Investment income--net $ 408 $ 706 -- -- --
======== ======== ======== ======== ========
Series G--Investment income--net $ 350 $ 675 -- -- --
======== ======== ======== ======== ========
<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.
++++The Fund's Preferred Stock was issued on May 22,1992 (Series A,
B, C, D and E) and January 27, 1997 (Series F and G).
++++++Dividends per share have been adjusted to reflect a two-for-
one stock split that occurred on December 1, 1994.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
MuniYield Insured Fund, Inc.
April 30, 1998
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
MuniYield Insured Fund, Inc. (the "Fund") is registered under the
Investment Company Act of 1940 as a non-diversified, closed-end
management investment company. These unaudited financial statements
reflect all adjustments which are, in the opinion of management,
necessary to a fair statement of the results for the interim period
presented. All such adjustments are of a normal recurring nature.
The Fund determines and makes available for publication the net
asset value of its Common Stock on a weekly basis. The Fund's Common
Stock is listed on the New York Stock Exchange under the symbol MYI.
The following is a summary of significant accounting policies
followed by the Fund.
(a) Valuation of investments--Municipal bonds are traded primarily
in the over-the-counter markets and are valued at the most recent
bid price or yield equivalent as obtained by the Fund's pricing
service from dealers that make markets in such securities. Financial
futures contracts and options thereon, which are traded on
exchanges, are valued at their closing prices as of the close of
such exchanges. Options, which are traded on exchanges, are valued
at their last sale price as of the close of such exchanges or,
lacking any sales, at the last available bid price. Securities with
remaining maturities of sixty days or less are valued at amortized
cost, which approximates market value. Securities for which market
quotations are not readily available are valued at fair value as
determined in good faith by or under the direction of the Board of
Directors of the Fund, including valuations furnished by a pricing
service retained by the Fund, which may utilize a matrix system for
valuations. The procedures of the pricing service and its valuations
are reviewed by the officers of the Fund under the general
supervision of the Board of Directors.
(b) Derivative financial instruments--The Fund may engage in various
portfolio strategies to seek to increase its return by hedging its
portfolio against adverse movements in the debt markets. Losses may
arise due to changes in the value of the contract or if the
counterparty does not perform under the contract.
* 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 Insured Fund, Inc.
April 30, 1998
NOTES TO FINANCIAL STATEMENTS (concluded)
(e) Offering costs--Direct expenses relating to the issuance of
Common Stock resulting from the reorganization were charged to
capital.
(f) 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, 1998 were $761,252,369 and
$858,089,971,
respectively.
Net realized gains for the six months ended April 30, 1998 and
unrealized gains as of April 30, 1998 were as follows:
Realized Unrealized
Gains Gains
Long-term investments $ 20,474,140 $73,245,980
Short-term investments 3,217 --
------------ -----------
Total $ 20,477,357 $73,245,980
============ ===========
As of April 30, 1998, net unrealized appreciation for Federal income
tax purposes aggregated $73,245,980, of which $77,566,589 related to
appreciated securities and $4,320,609 related to depreciated
securities. The aggregate cost of investments at April 30, 1998 for
Federal income tax purposes was $1,352,278,152.
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,
1998 remained constant and during the year ended October 31, 1997
increased by 16,163,797 pursuant to a plan of reorganization.
Preferred Stock
Auction Market Preferred Stock ("AMPS") are shares of Preferred
Stock of the Fund that entitle their holders to receive cash
dividends at an annual rate that may vary for the successive
dividend periods. The yields in effect at April 30, 1998 were as
follows: Series A, 3.74%; Series B, 3.74%; Series C, 3.75%; Series
D, 3.57%; Series E, 3.70%; Series F, 3.67%; and Series G, 4.20%.
AMPS shares during the six months ended April 30, 1998 remained
constant and during the year ended October 31, 1997 increased by
4,800 pursuant to a plan of reorganization. As of April 30, 1998,
there were 17,600 AMPS shares authorized, issued and outstanding
with a liquidation preference of $25,000 per share.
The Fund pays commissions to certain broker-dealers at the end of
each auction at an annual rate ranging from 0.25% to 0.375%,
calculated on the proceeds of each auction. For the six months ended
April 30, 1998, Merrill Lynch, Pierce, Fenner & Smith Inc., an
affiliate of FAM, earned $222,050 as commissions.
5. Subsequent Event:
On May 7, 1998, the Fund's Board of Directors declared an ordinary
income dividend to Common Stock shareholders in the amount of
$.069877 per share, payable on May 28, 1998, to shareholders of
record as of May 21, 1998.
MuniYield Insured Fund, Inc.
April 30, 1998
OFFICERS AND DIRECTORS
Arthur Zeikel, President and Director
Joe Grills, Director
Walter Mintz, Director
Robert S. Salomon Jr., Director
Melvin R. Seiden, Director
Stephen B. Swensrud, Director
Terry K. Glenn, Executive Vice President
Vincent R. Giordano, Senior Vice President
William R. Bock, Vice President
Donald C. Burke, Vice President
Kenneth A. Jacob, Vice President
Gerald M. Richard, Treasurer
Patrick D. Sweeney, Secretary
Custodian
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
Transfer Agents
Common Stock:
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
Preferred Stock:
IBJ Schroder Bank & Trust Company
One State Street
New York, NY 10004
NYSE Symbol
MYI
