MUNIYIELD
INSURED
FUND, INC.
FUND LOGO
Semi-Annual Report
April 30, 1999
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 months ended April 30, 1999, the Common Stock of
MuniYield Insured Fund, Inc. earned $0.452 per share income
dividends, which included earned and unpaid dividends of $0.070.
This represents a net annualized yield of 5.89%, based on a month-
end per share net asset value of $15.49. Over the same period, the
total investment return on the Fund's Common Stock was +0.78%, based
on a change in per share net asset value from $16.28 to $15.49, and
assuming reinvestment of $0.648 per share ordinary income dividends
and $0.263 per share capital gains distributions.
The average yields of the Fund's Auction Market Preferred Stock for
the six-month period ended April 30, 1999 were: Series A, 3.36%;
Series B, 3.77%; Series C, 3.41%; Series D, 3.63%; Series E, 3.84%;
Series F, 4.26%; and Series G, 3.76%.
The Municipal Market Environment
During the six months ended April 30, 1999, long-term bond yields
generally moved higher. From November 1998 through mid-January 1999,
long-term bond yields traded in a relatively narrow range. However,
during February, a number of economic indicators were released that
suggested that economic growth in the United States would likely
remain strong throughout most of 1999. Consequently, long-term US
Treasury bond yields rose more than 60 basis points (0.60%) to 5.70%
by early March. During the remainder of the six-month period, US
Treasury bond yields traded between 5.50% and 5.70% as the lack of
inflationary pressures offset much of the concerns generated by
continued strong economic growth. During most of the period, long-
term, uninsured tax-exempt bond yields exhibited far less volatility
and were largely stable. Also, long-term municipal bond yields rose
just 5 basis points to 5.29% at the end of April 1999, as measured
by the Bond Buyer Revenue Bond Index.
In recent months, the tax-exempt market was better able to withstand
much of the upward pressure on bond yields because of its stronger
technical position. While the continued positive inflationary
environment limited some of the recent increases in taxable bond
yields, a deteriorating supply/demand position helped push taxable
bond yields significantly higher than municipal bond yields. Much of
the US Treasury bond market's underperformance in recent months can
be attributed to the large amounts of taxable corporate issuance.
Large taxable corporate underwritings reduced the demand for US
Government securities in recent months, pushing US Treasury bond
yields higher.
On the other hand, the tax-exempt bond market enjoyed only limited
new-issue supply. During the six months ended April 30, 1999, more
than $123 billion in new long-term tax-exempt securities was
underwritten, a decline of 10% compared to the same period a year
ago. Municipalities issued less than $60 billion in long-term tax-
exempt securities during the three months ended April 30, 1999, a
decline of 25% compared to the April 30, 1998 quarter. More
recently, the rate of new tax-exempt issuance has declined even
further. During April 1999, just over $15 billion in long-term tax-
exempt securities was marketed, a decline of over 33% compared to
April 1998 levels. As municipal bond yields fell and stabilized in
recent quarters, the ability of municipalities to refinance existing
higher-couponed debt declined. This led to a significant decrease in
refunding issuance and an overall drop in new municipal bond supply.
When coupled with ongoing, moderate retail and institutional demand,
the tax-exempt bond market was able to avoid much of the yield
volatility exhibited by US Treasury securities.
Looking ahead, the expected combination of moderate economic growth
in the United States and continued negligible inflation suggests a
relatively stable interest rate environment. However, in recent
years, bond yields reached their annual peaks in early May and
declined for the remainder of the year. A meaningful decline in
fixed-income bond yields would require either evidence of a
significant slowdown in the US economy or the resumption of concerns
regarding renewed shocks to the world's economic system. Currently,
neither condition exists or seems likely in the immediate future. In
our opinion, this suggests a continuation of the narrow trading
ranges seen in recent months.
MuniYield Insured Fund, Inc.
April 30, 1999
Portfolio Strategy
During the last several months, we adopted a neutral investment
strategy, since indicators pointed to a continuation of both benign
inflation and healthy domestic economic growth. These favorable
conditions led us to believe that long-term tax-exempt bond yields
would remain trading within a somewhat narrow range. Therefore, we
chose to focus on income-producing securities rather than on those
issues with the potential for capital gains. We believed that coupon
income could be the more significant segment for the Fund if the tax-
exempt bond market performed as anticipated. Keeping shareholder
income in mind, MuniYield Insured Fund, Inc. remained fully invested
for most of the past several months, and we expect to maintain this
position going forward.
Short-term tax-exempt yields exhibited considerable volatility in
recent months. Interest rates paid to the Fund's Preferred Stock
shareholders traded below 3% in December 1998, reflecting heightened
investor demand at year-end. Current short-term interest rate levels
reflect tax season-related pressures, which we expect to abate soon.
During the six-month period ended April 30, 1999, leveraging
generated a significant incremental yield to the Fund's Common Stock
shareholders. Because we believe that the Federal Reserve Board's
monetary policy is likely to remain in a narrow range for the
remainder of the year, we expect short-term tax-exempt interest
rates to remain at, or slightly below, current levels. However,
should the spread between short-term and long-term interest rates
narrow, the benefits of the leverage will decline and, as a result,
reduce the yield to the Fund's Common Stock. (For a complete
explanation of the benefits and risks of leveraging, see page 3 of
this report to shareholders.)
In Conclusion
We appreciate your ongoing interest in MuniYield Insured Fund, Inc.,
and we look forward to serving your investment needs in the months
and years ahead.
Sincerely,
(Terry K. Glenn)
Terry K. Glenn
President
(Vincent R. Giordano)
Vincent R. Giordano
Senior Vice President
(William R. Bock)
William R. Bock
Vice President and Portfolio Manager
June 10, 1999
After more than 20 years of service, Arthur Zeikel recently retired
as Chairman of Merrill Lynch Asset Management, L.P. (MLAM). Mr.
Zeikel served as President of MLAM from 1977 to 1997 and as Chairman
since December 1997. Mr. Zeikel is one of the country's most
respected leaders in asset management and presided over the growth
of Merrill Lynch's asset management business. During his tenure,
client assets under management grew from $300 million to over $500
billion. Mr. Zeikel will remain on MuniYield Insured Fund, Inc.'s
Board of Directors. We are pleased to announce that Terry K. Glenn
has been elected President and Director of the Fund. Mr. Glenn has
held the position of Executive Vice President of MLAM since 1983.
Mr. Zeikel's colleagues at MLAM join the Fund's Board of Directors
in wishing him well in his retirement from Merrill Lynch and are
pleased that he will continue as a member of the Fund's Board of
Directors.
MuniYield Insured Fund, Inc.
April 30, 1999
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.
As a part of its investment strategy, the Fund may invest in certain
securities whose potential income return is inversely related to
changes in a floating interest rate ("inverse floaters"). In
general, income on inverse floaters will decrease when short-term
interest rates increase and increase when short-term interest rates
decrease. Investments in inverse floaters may be characterized as
derivative securities and may subject the Fund to the risks of
reduced or eliminated interest payments and losses of invested
principal. In addition, inverse floaters have the effect of
providing investment leverage and, as a result, the market value of
such securities will generally be more volatile than that of fixed-
rate, tax-exempt securities. To the extent the Fund invests in
inverse floaters, the market value of the Fund's portfolio and the
net asset value of the Fund's shares may also be more volatile than
if the Fund did not invest in these securities.
MuniYield Insured Fund, Inc.
April 30, 1999
YEAR 2000 ISSUES
Many computer systems were designed using only two digits to
designate years. These systems may not be able to distinguish the
Year 2000 from the Year 1900 (commonly known as the "Year 2000
Problem"). The Fund could be adversely affected if the computer
systems used by the Fund's management or other Fund service
providers do not properly address this problem before January 1,
2000. The Fund's management expects to have addressed this problem
before then, and does not anticipate that the services it provides
will be adversely affected. The Fund's other service providers have
told the Fund's management that they also expect to resolve the Year
2000 Problem, and the Fund's management will continue to monitor the
situation as the Year 2000 approaches. However, if the problem has
not been fully addressed, the Fund could be negatively affected. The
Year 2000 Problem could also have a negative impact on the
securities in which the Fund invests, and this could hurt the Fund's
investment returns.
MANAGED DIVIDEND POLICY
The Fund's dividend policy is to distribute substantially all of its
net investment income to its shareholders on a monthly basis.
However, in order to provide shareholders with a more consistent
yield to the current trading price of shares of Common Stock of the
Fund, the Fund may at times pay out less than the entire amount of
net investment income earned in any particular month and may at
times in any 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, 1999
were as follows:
Percent of
S&P Rating/Moody's Rating Net Assets
AAA/Aaa 84.6%
AA/Aa 4.7
A/A 2.7
BBB/Baa 1.2
NR (Not Rated) 0.7
Other++ 6.4
[FN]
++Temporary investments in short-term municipal securities.
MuniYield Insured Fund, Inc.
April 30, 1999
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 according to 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
VRDN Variable Rate Demand Notes
<TABLE>
SCHEDULE OF INVESTMENTS (in Thousands)
<CAPTION>
S&P Moody's Face Value
State Ratings Ratings Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
Alabama--0.6% AAA NR* $ 8,425 Jefferson County, Alabama, Sewer Revenue Bonds, RIB,
Series 124, 6.39% due 2/01/2036 (b)(g) $ 8,743
Alaska--0.9% AAA Aaa 10,410 Alaska State Housing Finance Corporation, RITR, Series 2,
7.32% due 12/01/2024 (g) 11,415
A1+ VMIG1++ 1,100 Valdez, Alaska, Marine Terminal Revenue Refunding Bonds
(Exxon Pipeline Company Project), VRDN, Series C, 4.05% due
12/01/2033 (h) 1,100
Arizona--0.4% NR* NR* 5,000 Mohave County, Arizona, IDA, IDR (North Star Steel Company
Project), AMT, 6.70% due 3/01/2020 5,373
California AAA Aaa 26,425 Alameda Corridor Transportation Authority, California,
- --21.8% Revenue Bonds, Senior Lien, Series A, 4.75% due 10/01/2025 (e) 24,980
AAA Aaa 5,250 Anaheim, California, Public Financing Authority, Lease
Revenue Bonds (Public Improvements Project), Senior Series A,
6% due 9/01/2024 (d) 5,999
Beverly Hills, California, Public Financing Authority, Lease
Revenue Refunding Bonds, Series A (e):
AAA Aaa 3,000 5.125% due 6/01/2018 3,047
AAA Aaa 3,500 5.125% due 6/01/2019 3,543
AAA Aaa 3,500 5.125% due 6/01/2020 3,528
California HFA, Revenue Bonds, AMT:
AA- Aa2 3,750 RIB, Series B-2, 9.621% due 8/01/2023 (g) 4,275
AAA Aaa 1,595 Series E, 7% due 8/01/2026 (e) 1,693
California State, GO (a):
AAA NR* 10,535 5.90% due 3/01/2005 (f) 11,744
AAA Aaa 10,000 Refunding, 5.25% due 6/01/2021 10,173
California State, GO, Refunding (b):
AAA Aaa 13,170 4.75% due 2/01/2017 12,860
AAA Aaa 9,935 4.75% due 2/01/2020 9,566
California State Public Works Board, Lease Revenue Bonds:
A A2 12,755 (California State University), Series C, 5.40% due
10/01/2022 13,061
A Aaa 8,500 (Department of Corrections), Series A, 7% due 11/01/2004 (f) 10,010
AAA Aaa 15,000 East Bay, California, Municipal Utilities District, Water
System Revenue Bonds, 4.75% due 6/01/2028 (e) 14,143
Los Angeles, California, Harbor Department Revenue Bonds, AMT:
AAA Aaa 4,000 RITR, Series RI-7, 7.995% due 11/01/2026 (e)(g) 4,869
AAA Aaa 6,330 Series B, 6.625% due 8/01/2019 (a) 6,927
AAA Aaa 8,725 Series B, 6.625% due 8/01/2025 (a) 9,547
</TABLE>
MuniYield Insured Fund, Inc.
April 30, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<CAPTION>
S&P Moody's Face Value
State Ratings Ratings Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
California AAA Aaa $15,000 Los Angeles County, California, Metropolitan Transportation
(concluded) Authority, Sales Tax Revenue Bonds (Proposition A--First
Tier), Senior Series A, 6% due 7/01/2006 (e)(f) $ 17,036
AAA Aaa 15,000 Los Angeles County, California, Metropolitan Transportation
Authority, Sales Tax Revenue Refunding Bonds (Proposition A--
First Tier), Senior Series C, 5% due 7/01/2026 (a) 14,715
AAA NR* 9,715 Los Angeles County, California, Public Works Financing
Authority, Lease Revenue Bonds, RIB, Series 114, 6.085% due
12/01/2029 (a)(g) 9,670
AAA Aaa 5,000 Los Angeles County, California, Transportation Commission,
Sales Tax Revenue Refunding Bonds, Series B, 6.50% due
7/01/2015 (b) 5,369
AAA Aaa 2,190 Northern California Transmission Revenue Bonds (California--
Oregon Transmission Project), Series A, 6.50% due
5/01/2016 (e) 2,387
AAA Aaa 6,720 Port Oakland, California, Port Revenue Bonds, AMT, Series G,
5.50% due 11/01/2017 (e) 6,992
AAA Aaa 5,000 Roseville, California, Special Tax Refunding Bonds (Community
Facilities District 1--Northwest), 4.75% due 9/01/2020 (d) 4,755
AAA Aaa 3,000 Sacramento, California, Municipal Utility District, Electric
Revenue Bonds, Series I, 6% due 1/01/2024 (e) 3,243
AAA Aaa 10,000 San Diego, California, Public Facilities Financing Authority,
Sewer Revenue Bonds, Series A, 5.25% due 5/15/2027 (b) 10,172
AAA Aaa 6,865 San Francisco, California, Bay Area Rapid Transit District,
Sales Tax Revenue Bonds, 5.50% due 7/01/2020 (b) 7,145
San Francisco, California, City and County Airport Commission,
International Airport Revenue Bonds, Second Series:
AAA Aaa 6,000 AMT, Issue 6, 6.60% due 5/01/2024 (a) 6,652
AAA Aaa 9,500 Issue 9B, 5.25% due 5/01/2020 (b) 9,633
AAA Aaa 5,000 San Francisco, California, City and County, COP (San Francisco
Courthouse Project), 5.875% due 4/01/2021 (d) 5,374
AAA Aaa 10,000 San Francisco, California, City and County Sewer Revenue
Bonds, Series A, 5.95% due 10/01/2025 (b) 10,786
AAA Aaa 21,975 San Jose, California, Redevelopment Agency, Tax Allocation
Bonds (Merged Area Redevelopment Project), 4.75% due
8/01/2030 (a) 20,582
San Jose, California, Redevelopment Agency, Tax Allocation
Refunding Bonds (Merged Area Redevelopment Project) (e):
AAA Aaa 6,895 5.60% due 8/01/2019 7,337
AAA Aaa 5,725 5.625% due 8/01/2025 6,089
Santa Rosa, California, Wastewater Revenue Refunding
Bonds (b):
AAA Aaa 3,000 Series A, 5.25% due 9/01/2016 3,161
AAA Aaa 3,295 Series B, 6.125% due 9/01/2017 3,558
Colorado--1.2% E-470 Public Highway Authority, Colorado, Revenue Refunding
Bonds, Senior Series A (e):
AAA Aaa 10,000 4.75% due 9/01/2023 9,475
AAA Aaa 7,100 5% due 9/01/2026 6,934
Connecticut AAA Aaa 9,695 Connecticut State, HFA, Revenue Bonds (Housing Mortgage
- --1.2% Finance Program), Series B, 6.75% due 11/15/2023 (e) 10,497
Connecticut State Health and Educational Facilities Authority,
Revenue Refunding Bonds (f):
AA- A1 5,000 (Nursing Home Program--AHF/Hartford), 7.125% due
11/01/2004 5,851
AA- A1 1,035 (Nursing Home Program--AHF/Windsor Project), 7.125%
due 11/01/2004 1,211
</TABLE>
MuniYield Insured Fund, Inc.
April 30, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<CAPTION>
S&P Moody's Face Value
State Ratings Ratings Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
District of AAA Aaa $20,100 Metropolitan Washington D.C. Airports Authority, Virginia
Columbia--1.6% General Airport Revenue Bonds, AMT, Series A, 6.625% due
10/01/2019 (e) $ 22,033
Florida--1.1% AAA Aaa 5,000 Manatee County, Florida, School Board, COP, 6.125% due
7/01/2006 (e)(f) 5,705
A1+ VMIG1++ 200 Martin County, Florida, PCR, Refunding (Florida Power &
Light Co. Project), VRDN, 4% due 9/01/2024 (h) 200
AAA Aaa 10,000 Miami-Dade County, Florida, Water and Sewer Revenue Bonds,
GO, Series A, 5% due 10/01/2029 (b) 9,755
Georgia--0.8% AAA Aaa 10,000 Georgia Municipal Electric Authority, Power Revenue
Refunding Bonds, Series EE, 6.40% due 1/01/2023 (a) 11,061
Hawaii--1.8% Hawaii State Airports System Revenue Bonds, AMT, Second
Series (e):
AAA Aaa 6,000 7% due 7/01/2018 6,468
AAA Aaa 17,145 6.75% due 7/01/2021 18,395
Illinois--7.2% AAA Aaa 9,160 Chicago, Illinois, Midway Airport Revenue Bonds, AMT, Series A,
6.25% due 1/01/2024 (e) 9,972
AAA Aaa 3,870 Chicago, Illinois, O'Hare International Airport, Special Facility
Revenue Bonds (International Terminal), AMT, 6.75% due
1/01/2018 (e) 4,188
AAA Aaa 12,000 Chicago, Illinois, Public Building Commission, Mortgage
Revenue Bonds, Series A, 6.50% due 1/01/2018 (e)(i) 12,227
AAA NR* 5,000 Chicago, Illinois, Sales Tax Revenue Bonds, RIB, Series 92,
6.355% due 1/01/2030 (b)(g) 5,133
Cook County, Illinois, GO (Capital Improvement), Series A (b):
AAA Aaa 12,500 5% due 11/15/2023 12,071
AAA Aaa 24,750 5% due 11/15/2028 23,754
A1+ VMIG1++ 4,200 Illinois Development Finance Authority, Revenue Refunding
Bonds (Provena Health), VRDN, Series B, 4.25% due
5/01/2028 (e)(h) 4,200
Illinois Health Facilities Authority Revenue Bonds:
AAA Aaa 3,000 Refunding (Servantcor Project), Series A, 6.375% due
8/15/2006 (d)(f) 3,412
A1+ VMIG1++ 15,300 Refunding (University of Chicago Hospitals), VRDN, 4.25%
due 8/01/2026 (e)(h) 15,300
NR* VMIG1++ 10,000 (Resurrection Health Care System), VRDN, 4.20% due
5/01/2011 (h) 10,000
Indiana--1.6% AAA Aaa 3,150 Hammond, Indiana, Multi-School Building Corporation, Revenue
Refunding Bonds (First Mortgage), 5.75% due 1/15/2017 (e) 3,346
AAA Aaa 2,500 Indiana Municipal Power Agency, Power Supply System
Revenue Refunding Bonds, Series A, 5.30% due 1/01/2023 (e) 2,490
AAA Aaa 2,400 Indiana State Vocational Technical College, Building Facilities
Revenue Refunding Bonds (Student Fee), Series D, 6.50% due
7/01/2014 (a) 2,681
AAA Aaa 10,000 Indianapolis, Indiana, Economic Development Revenue Bonds
(Archdiocese of Indianapolis), 5.50% due 7/01/2026 (e) 10,304
AA NR* 3,000 Indianapolis, Indiana, Local Public Improvement Bond Bank
Revenue Bonds, Series D, 6.75% due 2/01/2020 3,289
Iowa--0.1% AAA Aaa 1,300 Iowa Financing Authority, S/F Mortgage Revenue Refunding
Bonds, Series F, 6.35% due 7/01/2009 (a) 1,370
Kansas--1.9% AAA Aaa 20,250 Burlington, Kansas, PCR, Refunding (Kansas Gas and Electric
Company Project), 7% due 6/01/2031 (e) 21,834
AAA Aaa 5,000 Kansas State Turnpike Authority, Turnpike Revenue Refunding
Bonds, 5.25% due 9/01/2017 (a) 5,072
</TABLE>
MuniYield Insured Fund, Inc.
April 30, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<CAPTION>
S&P Moody's Face Value
State Ratings Ratings Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
Louisiana--0.3% AAA Aa2 $ 4,500 Saint Charles Parish, Louisana, PCR (Shell Oil Company--Norco
Project), VRDN, AMT, 4.25% due 9/01/2023 (h) $ 4,500
Maryland--0.3% Maryland State Community Development Administration,
Department of Housing and Community Development, Revenue
Refunding Bonds:
NR* Aa3 2,085 (M/F Housing), Series C, 6.65% due 5/15/2025 (c)(j) 2,241
NR* Aa2 1,985 (S/F Program), AMT, Second Series, 6.55% due 4/01/2026 2,126
Massachusetts Massachusetts State Health and Educational Facilities Authority
- --3.8% Revenue Bonds:
AAA NR* 5,000 (Massachusettes General Hospital), Series F, 6.25% due
7/01/2003 (a)(f) 5,555
AAA Aaa 10,000 (Northeastern University), Series E, 6.55% due 10/01/2022 (e) 10,988
AAA Aaa 7,130 Massachusetts State Health and Higher Educational Facilities
Authority Revenue Bonds (New England Medical Center
Hospitals), Series F, 6.625% due 7/01/2025 (b) 7,789
AAA Aaa 27,030 Massachusetts State Turnpike Authority, Metropolitan Highway
System, Revenue Refunding Bonds, Senior Series A, 5% due
1/01/2037 (e) 25,711
AAA Aaa 2,985 Massachusetts State Turnpike Authority, Western Turnpike
Revenue Refunding Bonds, Series A, 5.55% due 1/01/2017 (e) 3,019
Michigan--3.4% AAA Aaa 2,750 Caledonia, Michigan, Community Schools, GO, Refunding,
6.625% due 5/01/2014 (a) 3,003
AAA Aaa 21,750 Michigan State Strategic Fund, Limited Obligation, Revenue
Refunding Bonds (Detroit Edison Company Pollution Project),
6.875% due 12/01/2021 (b) 23,617
Monroe County, Michigan, PCR (Detroit Edison Company
Project), AMT (e):
AAA Aaa 5,000 Series CC, 6.55% due 6/01/2024 5,495
AAA Aaa 8,500 Series I-B, 6.55% due 9/01/2024 9,379
A1+ VMIG1++ 3,700 University of Michigan, University Hospital Revenue Bonds,
VRDN, Series A, 4.25% due 12/01/2027 (h) 3,700
AAA Aaa 2,750 Wayne Charter County, Michigan, Airport Revenue Bonds
(Detroit Metropolitan Wayne County), AMT, Series A, 5% due
12/01/2022 (e) 2,650
Minnesota--1.9% BBB+ Baa1 4,500 Minneapolis and Saint Paul, Minnesota, Housing and
Redevelopment Authority, Health Care System, Revenue
Refunding Bonds (Group Health Plan Inc. Project), 6.90% due
10/15/2022 4,808
AAA Aaa 5,000 Minneapolis and Saint Paul, Minnesota, Metropolitian Airports
Commission, Airport Revenue Bonds, Series A, 5% due
1/01/2030 (a) 4,900
Minnesota State, HFA, S/F Mortgage Revenue Bonds, AMT:
AA+ Aa2 3,550 Series H, 6.50% due 1/01/2026 3,734
AA+ Aa2 2,680 Series L, 6.70% due 7/01/2020 2,846
AA+ NR* 10,000 Rochester, Minnesota, Health Care Facilities Revenue Bonds
(Mayo Foundation), Series A, 5.50% due 11/15/2027 10,437
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 (e) 4,389
Missouri--0.6% AAA Aaa 7,000 Kansas City, Missouri, Airport Revenue Bonds (General
Improvement), Series B, 6.875% due 9/01/2004 (d)(f) 8,047
Nevada--7.0% Clark County, Nevada, School District, GO (f):
AAA Aaa 15,000 6% due 6/15/2006 (b) 16,837
AAA Aaa 5,000 Series A, 5.75% due 6/15/2005 (e) 5,502
</TABLE>
MuniYield Insured Fund, Inc.
April 30, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<CAPTION>
S&P Moody's Face Value
State Ratings Ratings Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
Nevada AAA Aaa $ 5,000 Humboldt County, Nevada, PCR, Refunding (Sierra Pacific
(concluded) Project), 6.55% due 10/01/2013 (a) $ 5,443
AAA Aaa 6,300 Nevada State, GO (Municipal Bond Bank Projects 66 & 67),
Series A, 5% due 5/15/2028 (b) 6,121
AAA Aaa 20,000 Nevada State, GO, Refunding (Municipal Bond Bank Projects
65 & R-6), 4.75% due 5/15/2026 (e) 18,756
NR* Aaa 16,775 Nevada State, RITR, Series 36, 6.57% due 11/01/2025 (b)(g) 17,918
Washoe County, Nevada, Gas Facilities Revenue Bonds (Sierra
Pacific Power Company), AMT:
AAA Aaa 15,000 6.65% due 12/01/2017 (a) 16,434
AAA Aaa 5,000 6.55% due 9/01/2020 (e) 5,461
AAA Aaa 5,000 Washoe County, Nevada, Water Facility Revenue Bonds (Sierra
Pacific Power Company), AMT, 6.65% due 6/01/2017 (e) 5,495
New Jersey AA+ Aa1 6,250 New Jersey State, GO, 5% due 2/01/2007 6,586
- --0.8% AAA Aaa 4,000 New Jersey State Housing and Mortgage Finance Agency Revenue
Bonds (Home Buyer), AMT, Series K, 6.375% due 10/01/2026 (e) 4,279
New Mexico AAA A1 10,000 Farmington, New Mexico, PCR, Refunding (Southern California
- --0.9% Edison Company), Series A, 5.875% due 6/01/2023 (e) 10,691
NR* A 1,635 New Mexico Educational Assistance Foundation, Student Loan
Revenue Refunding Bonds (Student Loan Program), AMT, First
Sub-Series A-2, 6.65% due 11/01/2025 1,731
New York--11.7% A1+ VMIG1++ 4,000 Long Island Power Authority, New York, Electric System
Revenue Bonds, VRDN, Sub-Series 7, 4.10% due 4/01/2025 (e)(h) 4,000
AAA Aaa 7,000 Metropolitan Transportation Authority, New York, Commuter
Facilities Revenue Bonds, Series A, 6.10% due 7/01/2006 (b)(f) 7,962
BBB+ Baa1 10,980 Metropolitan Transportation Authority, New York, Revenue
Refunding Bonds (Transit Facilities Services Contract),
Series 5, 7% due 7/01/2012 11,867
AA Aa2 14,000 Municipal Assistance Corporation for City of New York, New York,
Revenue Refunding Bonds, Series O, 5.25% due 7/01/2008 14,965
AAA Aaa 6,180 New York City, New York, Educational Construction Fund
Revenue Bonds, Junior Sub-Lien, 5.50% due 4/01/2026 (a) 6,450
New York City, New York, Municipal Water Finance Authority,
Water and Sewer System Revenue Bonds:
AAA Aaa 25,830 RITR, Series FR-5, 7.095% due 6/15/2026 (e)(g) 29,640
AAA Aaa 11,500 Series A, 4.75% due 6/15/2031 (b) 10,695
AAA Aaa 5,000 New York City, New York, Trust Cultural Resources Revenue
Bonds (American Museum of Natural History), Series A, 5.65%
due 4/01/2027 (e) 5,294
New York State Dormitory Authority Revenue Bonds:
AAA Aaa 10,000 (City University System Consolidated Third), Series 1,
5% due 7/01/2026 (b) 9,753
A- A3 10,000 (Mental Health Services Facilities), Series B, 5% due 2/15/2024 9,668
AAA Aaa 10,150 Refunding (New York and Presbyterian Hospitals), 4.75% due
8/01/2027 (a)(c) 9,534
AAA Aaa 7,000 Refunding (Pace University), 5.70% due 7/01/2022 (e) 7,474
A- A3 7,595 Refunding (State University Educational Facilities),
Series B, 7% due 5/15/2016 8,002
AAA Aaa 10,000 (State University Educational Facilities), Series A, 4.75%
due 5/15/2025 (e) 9,416
AAA Aaa 6,000 New York State Energy Research and Development Authority,
Gas Facilities Revenue Bonds, RITR, Series 9, 6.57% due
1/01/2021 (e)(g) 6,511
AAA Aaa 13,715 New York State Urban Development Corporation Revenue
Bonds (Correctional Facilities Service Contract), Series B,
4.75% due 1/01/2028 (a) 12,877
</TABLE>
MuniYield Insured Fund, Inc.
April 30, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<CAPTION>
S&P Moody's Face Value
State Ratings Ratings Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
North AAA Aaa $ 2,500 Grand Forks, North Dakota, Health Care Facilities Revenue
Dakota--0.5% Bonds (United Hospital Obligated Group), 6.25% due
12/01/2024 (e) $ 2,778
AAA Aaa 3,725 Grand Forks, North Dakota, Health Care System Revenue Bonds
(Altru Health System Obligation Group), 5.60% due 8/15/2017 (e) 3,894
Ohio--0.2% AAA Aaa 2,500 Ohio State Higher Educational Facilities Commission, Mortgage
Revenue Bonds (University of Dayton Project), 6.60% due
12/01/2017 (b) 2,803
Oregon--1.2% AAA Aaa 10,500 Oregon State Department of Administrative Services, Lottery
Revenue Bonds (Education Projects), Series A, 5.25% due
4/01/2010 (d) 11,183
AAA Aaa 5,000 Port Portland, Oregon, Airport Revenue Bonds (Portland
International Airport), AMT, Series 11, 5.625% due 7/01/2026 (b) 5,205
Pennsylvania A1+ P1 400 Beaver County, Pennsylvania, IDA, PCR, Refunding (Duquesne-
- --1.3% Mansfield), VRDN, Series B, 3.90% due 8/01/2009 (h) 400
AAA Aaa 16,000 Montgomery County, Pennsylvania, IDA, PCR, Refunding,
Series B, 6.70% due 12/01/2021 (e) 17,285
A1+ NR* 200 Pennsylvania State Higher Educational Facilities Authority,
Revenue Refunding Bonds (Carnegie Mellon University), VRDN,
Series B, 4.20% due 11/01/2027 (h) 200
South AAA Aaa 4,850 South Carolina State Public Service Authority, Revenue
Carolina--1.2% Refunding Bonds, Series B, 5.875% due 1/01/2023 (b) 5,213
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 (d) 7,616
NR* NR* 4,200 Spartanburg County, South Carolina, Solid Waste Disposal
Facilities Revenue Bonds (BMW Project), AMT, 7.55% due
11/01/2024 4,751
Tennessee--0.7% AAA Aaa 3,820 Johnson City, Tennessee, Health and Educational Revenue
Refunding Bonds, 6.75% due 7/01/2016 (e) 4,113
A+ A1 4,900 Tennessee HDA, Mortgage Finance Revenue Bonds, AMT,
Series A, 6.90% due 7/01/2025 5,247
Texas--6.8% AAA Aaa 1,880 Bexar, Texas, Metropolitan Water District, Waterworks
System Revenue Refunding Bonds, 6.35% due 5/01/2025 (e) 2,101
AAA Aaa 11,500 Brazos River Authority, Texas, PCR, Refunding (Texas
Utilities Electric Company Project), AMT, 6.50% due
12/01/2027 (a) 12,537
AAA Aaa 3,800 Brazos River Authority, Texas, PCR (Texas Utilities Electric
Company Project), AMT, Series A, 6.75% due 4/01/2022 (a) 4,133
AAA Aaa 7,000 Brazos River Authority, Texas, Revenue Refunding Bonds
(Houston Light and Power), Series A, 6.70% due 3/01/2017 (a) 7,611
A1+ VMIG1++ 6,550 Gulf Coast Waste Disposal Authority, Texas, PCR, Refunding
(Exxon Project), VRDN, 4.20% due 6/01/2020 (h) 6,550
Harris County, Texas, Health Facilities Development
Corporation, Hospital Revenue Bonds:
A1+ NR* 1,500 (Methodist Hospital), VRDN, 4.25% due 12/01/2026 (h) 1,500
NR* Aaa 2,150 RITR, Series 12, 8.32% due 10/01/2024 (e)(g) 2,688
A1+ NR* 30,560 Harris County, Texas, Health Facilities Development
Corporation, Hospital Revenue Refunding Bonds (Methodist
Hospital), VRDN, 4.25% due 12/01/2025 (h) 30,560
A1+ VMIG1++ 1,700 Harris County, Texas, Industrial Development Corporation,
Revenue Refunding Bonds (Shell Oil Company Project),
VRDN, 4% due 4/01/2027 (h) 1,700
AAA Aaa 6,885 Houston, Texas, Airport System Revenue Bonds, Sub-Lien, AMT,
Series A, 6.75% due 7/01/2021 (b) 7,387
AAA Aaa 1,295 Houston, Texas, Water and Sewer System Revenue Bonds,
Series A, 6.375% due 12/01/2022 (e) 1,418
</TABLE>
MuniYield Insured Fund, Inc.
April 30, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<CAPTION>
S&P Moody's Face Value
State Ratings Ratings Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
Texas AAA Aaa $11,795 Matagorda County, Texas, Navigation District No. 1,
(concluded) Revenue Refunding Bonds (Houston Light and Power Company),
Series A, 6.70% due 3/01/2027 (a) $ 12,824
AAA Aaa 1,500 Sabine River Authority, Texas, PCR, Refunding (Texas
Utilities Electric Company Project), 6.55% due 10/01/2022 (b) 1,643
NR* VMIG1++ 2,200 Southwest Texas Higher Education Authority Incorporated,
Revenue Refunding Bonds (Southern Methodist University),
VRDN, 4.25% due 7/01/2015 (h) 2,200
Utah--1.3% A1 VMIG1++ 4,000 Emery County, Utah, PCR, Refunding (Pacificorp Projects),
VRDN, 4.25% due 11/01/2024 (a)(h) 4,000
AAA Aaa 4,000 Salt Lake City, Utah, Airport Revenue Bonds, AMT, Series A,
6.125% due 12/01/2022 (b) 4,307
AAA Aaa 11,000 Weber County, Utah, Hospital Revenue Bonds (INC Health
Services Inc.), 5% due 8/15/2030 (a) 10,498
Virginia--0.9% AAA Aaa 5,540 Loudoun County, Virginia, COP, 6.90% due 3/01/2019 (d) 6,237
AA+ Aa1 6,000 Virginia State, HDA, Commonwealth Mortgage Revenue Bonds,
AMT, Series B, Sub-Series B-1, 6.375% due 7/01/2026 6,409
Washington AAA Aaa 6,595 Chelan County, Washington, Public Utility District No. 001,
- --10.7% Consolidated Revenue Refunding Bonds (Chelan Hydro), AMT,
Series B, 6.35% due 7/01/2026 (e) 7,316
AAA Aaa 6,880 Grant County, Washington, Public Utility District No. 002,
Electric Revenue Bonds, Series G, 4.75% due 1/01/2017 (e) 6,617
AAA NR* 19,665 King County, Washington, GO, Refunding, RIB, Series 47,
6.135% due 1/01/2034 (e)(g) 19,600
AAA Aaa 10,000 Port Seattle, Washington, Revenue Bonds, Series A, 5.50% due
10/01/2017 (b) 10,433
AAA Aaa 12,500 Seattle, Washington, Water System Revenue Bonds, 5% due
10/01/2027 (b) 11,987
AAA Aaa 5,000 Snohomish County, Washington, Public Utility District No.
001, Electric Revenue Bonds (Generation System), AMT,
Series B, 5.80% due 1/01/2024 (e) 5,215
AAA Aaa 7,875 Spokane, Washington, Lease Revenue Refunding Bonds
(Financing--Multi-Purpose Arena Project), AMT, Series A,
6.60% due 1/01/2014 (a) 8,492
AAA Aaa 6,000 Tacoma, Washington, Refuse Utility Revenue Bonds, 7% due
12/01/2004 (a)(f) 7,019
AAA Aaa 8,705 Tacoma, Washington, Solid Waste Utility, Revenue Refunding
Bonds, Series B, 5.50% due 12/01/2019 (a) 9,008
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 (d) 2,204
Washington State, GO:
AAA Aaa 18,000 Series A, 4.50% due 7/01/2023 (d) 16,322
AAA Aaa 14,860 Series C, 5% due 1/01/2022 (b) 14,466
Washington State Health Care Facilities Authority Revenue Bonds:
NR* Aaa 10,000 Refunding (Children's Hospital and Regional Medical Center),
5% due 10/01/2028 (d) 9,555
AAA Aaa 2,500 (Virginia Mason Obligation Group--Seattle), 6.30% due
2/15/2017 (e) 2,717
Washington State Public Power Supply System, Revenue
Refunding Bonds, Series A:
AA Aaa 13,095 (Nuclear Project Number 1), 6.25% due 7/01/2017 (e) 14,182
AAA Aaa 4,800 (Nuclear Project Number 3), 5.25% due 7/01/2016 (d) 4,887
</TABLE>
MuniYield Insured Fund, Inc.
April 30, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in Thousands)
<CAPTION>
S&P Moody's Face Value
State Ratings Ratings Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
West AAA Aaa $ 4,425 Harrison County, West Virginia, County Commission for Solid
Virginia--0.3% Waste Disposal Revenue Bonds (Monongahela Power), AMT,
Series C, 6.75% due 8/01/2024 (a) $ 4,965
Wisconsin--2.0% AA Aa 1,910 Wisconsin Housing and EDA, Home Ownership Revenue
Refunding Bonds, AMT, Series B, 6.75% due 9/01/2025 2,029
Wisconsin Public Power Inc., Power Supply System Revenue
Bonds, Series A (e):
AAA Aaa 5,000 6% due 7/01/2015 5,453
AAA Aaa 13,685 5.75% due 7/01/2023 14,493
Wisconsin State Health and Educational Facilities Authority,
Revenue Refunding Bonds (Wheaton-Franciscan Services) (e):
AAA Aaa 3,955 6.50% due 8/15/2011 4,238
AAA Aaa 2,000 6% due 8/15/2015 2,115
Total Investments (Cost--$1,331,248)--100.3% 1,404,080
Liabilities in Excess of Other Assets--(0.3%) (4,247)
----------
Net Assets--100.0% $1,399,833
==========
<FN>
(a)AMBAC Insured.
(b)FGIC Insured.
(c)FHA Insured.
(d)FSA Insured.
(e)MBIAInsured.
(f)Prerefunded.
(g)The interest rate is subject to change periodically and inversely
based upon prevailing market rates. The interest rate shown is the
rate in effect at April 30, 1999.
(h)The interest rate is subject to change periodically based upon
prevailing market rates. The interest rate shown is the rate in
effect at April 30, 1999.
(i)Escrowed to maturity.
(j)GNMA Collateralized.
*Not Rated.
++Highest short-term rating by Moody's Investors Service, Inc.
See Notes to Financial Statements.
</TABLE>
MuniYield Insured Fund, Inc.
April 30, 1999
FINANCIAL INFORMATION
<TABLE>
Statement of Assets, Liabilities and Capital as of April 30, 1999
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$1,331,248,337) (Note 1a) $1,404,080,083
Cash 7,689
Receivables:
Interest $ 23,274,384
Securities sold 3,578,315 26,852,699
--------------
Prepaid expenses and other assets 43,195
--------------
Total assets 1,430,983,666
--------------
Liabilities: Payables:
Securities purchased 29,437,478
Dividends to shareholders (Note 1e) 1,026,663
Investment adviser (Note 2) 615,546 31,079,687
--------------
Accrued expenses and other liabilities 70,629
--------------
Total liabilities 31,150,316
--------------
Net Assets: Net assets $1,399,833,350
==============
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 (61,945,880 shares
issued and outstanding) $ 6,194,588
Paid-in capital in excess of par 867,524,336
Undistributed investment income--net 15,483,693
Accumulated realized capital losses on investments--net (2,201,013)
Unrealized appreciation on investments--net 72,831,746
--------------
Total--Equivalent to $15.49 net asset value per share of
Common Stock (market price--$15.125) 959,833,350
--------------
Total capital $1,399,833,350
==============
<FN>
*Auction Market Preferred Stock.
See Notes to Financial Statements.
</TABLE>
MuniYield Insured Fund, Inc.
April 30, 1999
FINANCIAL INFORMATION (continued)
<TABLE>
Statement of Operations
<CAPTION>
For the Six Months Ended
April 30, 1999
<S> <S> <C> <C>
Investment Income Interest and amortization of premium and discount earned $ 38,996,279
(Note 1d):
Expenses: Investment advisory fees (Note 2) $ 3,532,986
Commission fees (Note 4) 553,362
Transfer agent fees 100,964
Accounting services (Note 2) 84,091
Professional fees 53,237
Custodian fees 38,967
Directors' fees and expenses 37,313
Listing fees 26,123
Printing and shareholder reports 21,648
Pricing fees 11,929
Other 28,360
--------------
Total expenses 4,488,980
--------------
Investment income--net 34,507,299
--------------
Realized & Realized gain on investments--net 9,202,749
Unrealized Gain Change in unrealized appreciation on investments--net (27,778,104)
(Loss) on --------------
Investments--Net Net Increase in Net Assets Resulting from Operations $ 15,931,944
(Notes 1b, ==============
1d & 3):
See Notes to Financial Statements.
</TABLE>
MuniYield Insured Fund, Inc.
April 30, 1999
FINANCIAL INFORMATION (continued)
<TABLE>
Statements of Changes in Net Assets
<CAPTION>
For the Six For the
Months Ended Year Ended
April 30, October 31,
Increase (Decrease) in Net Assets: 1999 1998
<S> <S> <C> <C>
Operations: Investment income--net $ 34,507,299 $ 70,139,798
Realized gain on investments--net 9,202,749 33,595,958
Change in unrealized appreciation on investments--net (27,778,104) 4,414,381
-------------- --------------
Net increase in net assets resulting from operations 15,931,944 108,150,137
-------------- --------------
Dividends & Investment income--net:
Distributions to Common Stock (28,686,236) (53,785,988)
Shareholders Preferred Stock (4,477,704) (12,641,142)
(Note 1e): Realized gain on investments--net:
Common Stock (27,410,773) (9,753,911)
Preferred Stock (3,725,272) (4,763,788)
-------------- --------------
Net decrease in net assets resulting from dividends and
distributions to shareholders (64,299,985) (80,944,829)
-------------- --------------
Capital Stock Value of shares issued to Common Stock shareholders in
Transactions reinvestment of dividends and distributions 9,382,082 --
(Note 4): -------------- --------------
Net Assets: Total increase (decrease) in net assets (38,985,959) 27,205,308
Beginning of period 1,438,819,309 1,411,614,001
-------------- --------------
End of period* $1,399,833,350 $1,438,819,309
============== ==============
<FN>
*Undistributed investment income--net $ 15,483,693 $ 14,140,334
============== ==============
See Notes to Financial Statements.
</TABLE>
MuniYield Insured Fund, Inc.
April 30, 1999
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: 1999 1998 1997 1996 1995
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 16.28 $ 15.84 $ 15.52 $ 15.46 $ 13.85
Operating -------- -------- -------- -------- --------
Performance: Investment income--net .55 1.15 1.15 1.18 1.20
Realized and unrealized gain (loss) on
investments--net (.30) .62 .54 .15 1.66
-------- -------- -------- -------- --------
Total from investment operations .25 1.77 1.69 1.33 2.86
-------- -------- -------- -------- --------
Less dividends and distributions to Common
Stock shareholders:
Investment income--net (.46) (.88) (.92) (.91) (.92)
Realized gain on investments--net (.45) (.16) (.15) (.09) --++
In excess of realized gain on
investments--net -- -- -- -- (.04)
-------- -------- -------- -------- --------
Total dividends and distributions to Common
Stock shareholders (.91) (1.04) (1.07) (1.00) (.96)
-------- -------- -------- -------- --------
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 (.07) (.21) (.25) (.24) (.28)
Realized gain on investments--net (.06) (.08) (.04) (.03) --++
In excess of realized gain on
investments--net -- -- -- -- (.01)
-------- -------- -------- -------- --------
Total effect of Preferred Stock activity (.13) (.29) (.29) (.27) (.29)
-------- -------- -------- -------- --------
Net asset value, end of period $ 15.49 $ 16.28 $ 15.84 $ 15.52 $ 15.46
======== ======== ======== ======== ========
Market price per share, end of period $ 15.125 $ 16.00 $14.8125 $ 14.00 $ 13.625
======== ======== ======== ======== ========
Total Investment Based on market price per share .13%+++ 15.55% 13.92% 10.30% 26.09%
Return:** ======== ======== ======== ======== ========
Based on net asset value per share .78%+++ 9.95% 9.89% 7.76% 20.09%
======== ======== ======== ======== ========
Ratios to Average Expenses .63%* .63% .63% .64% .65%
Net Assets:*** ======== ======== ======== ======== ========
Investment income--net 4.88%* 4.94% 5.17% 5.22% 5.55%
======== ======== ======== ======== ========
Supplemental Net assets, net of Preferred Stock, end
Data: of period (in thousands) $959,833 $998,819 $971,614 $701,473 $698,512
======== ======== ======== ======== ========
Preferred Stock outstanding, end of period
(in thousands) $440,000 $440,000 $440,000 $320,000 $320,000
======== ======== ======== ======== ========
Portfolio turnover 48.92% 112.78% 98.91% 100.49% 59.71%
======== ======== ======== ======== ========
Leverage: Asset coverage per $1,000 $ 3,181 $ 3,270 $ 3,208 $ 3,192 $ 3,183
======== ======== ======== ======== ========
Dividends Series A--Investment income--net $ 302 $ 676 $ 808 $ 832 $ 1,043
Per Share on ======== ======== ======== ======== ========
Preferred Stock Series B--Investment income--net $ 223 $ 737 $ 813 $ 835 $ 1,043
Outstanding: ======== ======== ======== ======== ========
Series C--Investment income--net $ 309 $ 673 $ 812 $ 841 $ 1,042
======== ======== ======== ======== ========
Series D--Investment income--net $ 207 $ 728 $ 789 $ 865 $ 950
======== ======== ======== ======== ========
Series E--Investment income--net $ 230 $ 726 $ 797 $ 842 $ 933
======== ======== ======== ======== ========
Series F--Investment income--net $ 278 $ 750 $ 706 -- --
======== ======== ======== ======== ========
Series G--Investment income--net $ 250 $ 728 $ 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.
***Does 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).
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
MuniYield Insured Fund, Inc.
April 30, 1999
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. The Fund's financial statements are
prepared in accordance with generally accepted accounting principles
which may require the use of management accruals and estimates.
These unaudited financial statements reflect all adjustments which
are, in the opinion of management, necessary to a fair statement of
the results of 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 written or purchased are valued at the last
sale price in the case of exchange-traded options. In the case of
options traded in the over-the-counter market, valuation is the last
asked price (options written) or the last bid price (options
purchased). Securities with remaining maturities of sixty days or
less are valued at amortized cost, which approximates market value.
Securities and assets for which market quotations are not readily
available are valued at fair value as determined in good faith by or
under the direction of the Board of Directors of the Fund, including
valuations furnished by a pricing service retained by the Fund,
which may utilize a matrix system for valuations. The procedures of
the pricing service and its valuations are reviewed by the officers
of the Fund under the general supervision of the Board of Directors.
(b) Derivative financial instruments--The Fund may engage in various
portfolio strategies to seek to increase its return by hedging its
portfolio against adverse movements in the debt markets. Losses may
arise due to changes in the value of the contract or if the
counterparty does not perform under the contract.
* 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.
MuniYield Insured Fund, Inc.
April 30, 1999
NOTES TO FINANCIAL STATEMENTS (concluded)
(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.
2. Investment Advisory Agreement and
Transactions with Affiliates:
The Fund has entered into an Investment Advisory Agreement with Fund
Asset Management, L.P. ("FAM"). The general partner of FAM is
Princeton Services, Inc. ("PSI"), an indirect wholly-owned
subsidiary of Merrill Lynch & Co., Inc. ("ML & Co."), which is the
limited partner.
FAM is responsible for the management of the Fund's portfolio and
provides the necessary personnel, facilities, equipment and certain
other services necessary to the operations of the Fund. For such
services, the Fund pays a monthly fee at an annual rate of 0.50% of
the Fund's average weekly net assets, including proceeds from the
issuance of Preferred Stock.
Accounting services are provided to the Fund by FAM at cost.
Certain officers and/or directors of the Fund are officers and/or
directors of FAM, PSI, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the six months ended April 30, 1999 were $664,716,945 and
$728,442,847, respectively.
Net realized gains for the six months ended April 30, 1999 and net
unrealized gains as of April 30, 1999 were as follows:
Realized Unrealized
Gains Gains
Long-term investments $ 9,202,749 $ 72,831,746
----------- ------------
Total $ 9,202,749 $ 72,831,746
=========== ============
As of April 30, 1999, net unrealized appreciation for Federal income
tax purposes aggregated $72,831,746, of which $77,239,981 related to
appreciated securities and $4,408,235 related to depreciated
securities. The aggregate cost of investments at April 30, 1999 for
Federal income tax purposes was $1,331,248,337.
4. Capital Stock Transactions:
The Fund is authorized to issue 200,000,000 shares of capital stock,
including Preferred Stock, par value $.10 per share, all of which
were initially classified as Common Stock. The Board of Directors is
authorized, however, to reclassify any unissued shares of capital
stock without approval of the holders of Common Stock.
Common Stock
Shares issued and outstanding during the six months ended April 30,
1999 increased by 594,744 as a result of dividend reinvestment and
during the year ended October 31, 1998 remained constant.
Preferred Stock
Auction Market Preferred Stock ("AMPS") are shares of Preferred
Stock of the Fund, with a par value of $.05 per share and a
liquidation preference of $25,000 per share, that entitle their
holders to receive cash dividends at an annual rate that may vary
for the successive dividend periods. The yields in effect at April
30, 1999 were as follows: Series A, 3.15%; Series B, 3.15%; Series
C, 3.15%; Series D, 3.00%; Series E, 3.43%; Series F, 3.40%; and
Series G, 3.55%.
Shares issued and outstanding during the six months ended April 30,
1999 and the year ended October 31, 1998 remained constant.
The Fund pays commissions to certain broker-dealers at the end of
each auction at an annual rate ranging from 0.25% to 0.375%,
calculated on the proceeds of each auction. For the six months ended
April 30, 1999, Merrill Lynch, Pierce, Fenner & Smith Incorporated,
an affiliate of FAM, earned $162,551 as commissions.
5. Subsequent Event:
On May 6, 1999, the Fund's Board of Directors declared an ordinary
income dividend to Common Stock shareholders in the amount of
$.070293 per share, payable on May 27, 1999 to shareholders of
record as of May 21, 1999.
MuniYield Insured Fund, Inc.
April 30, 1999
OFFICERS AND DIRECTORS
Terry K. Glenn, President and Director
Joe Grills, Director
Walter Mintz, Director
Robert S. Salomon Jr., Director
Melvin R. Seiden, Director
Stephen B. Swensrud, Director
Arthur Zeikel, Director
Vincent R. Giordano, Senior Vice President
William R. Bock, Vice President
Kenneth A. Jacob, Vice President
Donald C. Burke, Vice President and Treasurer
Bradley J. Lucido, Secretary
Gerald M. Richard, Treasurer of Muni Yield Insured Fund, Inc. has
recently retired. His colleagues at Merrill Lynch Asset Management,
L.P. join the Fund's Board of Directors in wishing Mr. Richard well
in his retirement.
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 Whitehall Bank & Trust Company
One State Street
New York, NY 10004
NYSE Symbol
MYI
