MUNIYIELD
INSURED
FUND, INC.
FUND LOGO
Semi-Annual Report
April 30, 2000
MuniYield Insured Fund, Inc. seeks to provide shareholders with as
high a level of current income exempt from Federal income taxes as
is consistent with its investment policies and prudent investment
management by investing primarily in a portfolio of long-term,
investment-grade municipal obligations the interest on which, in the
opinion of bond counsel to the issuer, is exempt from Federal income
taxes.
This report, including the financial information herein, is
transmitted to shareholders of MuniYield Insured Fund, Inc. for
their information. It is not a prospectus. Past performance results
shown in this report should not be considered a representation of
future performance. The Fund has leveraged its Common Stock by
issuing Preferred Stock to provide the Common Stock shareholders
with a potentially higher rate of return. Leverage creates risks for
Common Stock shareholders, including the likelihood of greater
volatility of net asset value and market price of shares of the
Common Stock, and the risk that fluctuations in the short-term
dividend rates of the Preferred Stock may affect the yield to Common
Stock shareholders. Statements and other information herein are as
dated and are subject to change.
MuniYield Insured
Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
Printed on post-consumer recycled paper
MUNIYIELD INSURED FUND, INC.
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 of the Common Stock.
In this case, the dividends paid to Preferred Stock shareholders are
significantly lower than the income earned on the fund's long-term
investments, and therefore the Common Stock shareholders are the
beneficiaries of the incremental yield. However, if short-term
interest rates rise, narrowing the differential between short-term
and long-term interest rates, the incremental yield pickup on the
Common Stock will be reduced or eliminated completely. At the same
time, the market value of the fund's Common Stock (that is, its
price as listed on the New York Stock Exchange) may, as a result,
decline. Furthermore, if long-term interest rates rise, the Common
Stock's net asset value will reflect the full decline in the price
of the portfolio's investments, since the value of the fund's
Preferred Stock does not fluctuate. In addition to the decline in
net asset value, the market value of the fund's Common Stock may
also decline.
As a part of its investment strategy, the Fund may invest in certain
securities whose potential income return is inversely related to
changes in a floating interest rate ("inverse floaters"). In
general, income on inverse floaters will decrease when short-term
interest rates increase and increase when short-term interest rates
decrease. Investments in inverse floaters may be characterized as
derivative securities and may subject the Fund to the risks of
reduced or eliminated interest payments and losses of invested
principal. In addition, inverse floaters have the effect of
providing investment leverage and, as a result, the market value of
such securities will generally be more volatile than that of fixed-
rate, tax-exempt securities. To the extent the Fund invests in
inverse floaters, the market value of the Fund's portfolio and the
net asset value of the Fund's shares may also be more volatile than
if the Fund did not invest in such securities.
MuniYield Insured Fund, Inc., April 30, 2000
TO OUR SHAREHOLDERS
For the six months ended April 30, 2000, the Common Stock of
MuniYield Insured Fund, Inc. earned $0.424 per share income
dividends, which included earned and unpaid dividends of $0.070.
This represents a net annualized yield of 6.24%, based on a month-
end per share net asset value of $13.62. Over the same period, the
total investment return on the Fund's Common Stock was +3.39%, based
on a change in per share net asset value from $13.64 to $13.62, and
assuming reinvestment of $0.427 per share income dividends.
The average yields of the Fund's Auction Market Preferred Stock for
the six-month period ended April 30, 2000 were: Series A, 3.70%;
Series B, 3.70%; Series C, 3.79%; Series D, 3.35%; Series E, 3.95%;
Series F, 4.16%; and Series G, 3.85%.
The Municipal Market Environment
Since October 1999 through mid-January 2000, fixed-income bond
yields rose steadily higher. US economic growth, in part intensified
by Year 2000 preparations, grew at a 7.3% rate in the fourth quarter
of 1999 and at a 4.2% annual rate for all of 1999. Initial estimates
for the first quarter of 2000 were reported at 5.4%. However,
despite these significant growth rates, no price measure indicator
has shown any considerable signs of future price pressures at the
consumer level, despite the lowest unemployment rates since January
1970. Given no signs of an economic slowdown, the Federal Reserve
Board continued to raise short-term interest rates in November 1999
and again in February and March 2000. In each instance, the Federal
Reserve Board cited both the continued growth of US employment and
the impressive strength of the US equity markets as reasons for
attempting to moderate US economic growth before inflationary price
increases are realized. By mid-January 2000, US Treasury bond yields
rose 60 basis points (0.60%) to 6.75%. Similarly, as measured by the
Bond Buyer Revenue Bond Index, long-term tax-exempt bond yields rose
approximately 20 basis points to 6.35%.
Since mid-January, fixed-income markets have largely ignored strong
economic fundamentals and concentrated on very positive technical
supply factors. Declining bond issuance, both current, and more
importantly, expected future issuance, helped push bond yields lower
from mid-January to mid-April 2000. In late January and early
February 2000, the US Treasury announced its intention to reduce the
number of issues to be auctioned in the quarterly Treasury note and
bond auctions. Furthermore, budgetary surpluses would allow the US
Treasury to repurchase outstanding, higher-couponed Treasury issues,
primarily in the 15-year and longer-term maturity sectors. Both
these actions would result in a significant reduction in the
outstanding supply of long-term US Treasury debt. Domestic and
international investors quickly began to accumulate what was
expected to become a scarce commodity and bond prices quickly rose.
By mid-April 2000, US Treasury bond yields had declined over 100
basis points to 5.67%. However, bond yields rose somewhat during the
last two weeks of the period as economic statistics were released,
indicating that the economic strength seen in late 1999 was
continuing into early 2000. The decline in long-term US Treasury
bond yields resulted in an inverted taxable yield curve as short-
term and intermediate-term interest rates have not fallen
proportionately since the Federal Reserve Board is expected to
continue to raise short-term interest rates. The current inversion
has had much more to do with debt reduction and Treasury buybacks
than with investor expectations of slower economic growth. Over the
last six months, long-term US Treasury bond yields have fallen
almost 20 basis points to end the six-month period ended April 30,
2000 at 5.96%.
Tax-exempt bond yields have also declined in recent months. The
decline has largely been in response to the rally in US Treasury
securities, as well as a continued positive technical supply
environment. States such as California and Maryland have announced
that their large current and anticipated future budget surpluses
will permit the cancellation or postponement of expected bond
issuance. Additionally, some issuers have also initiated tenders to
repurchase existing debt, reducing the supply of tax-exempt bonds in
the secondary market as well. Since their recent peak in January
2000, long-term municipal bond yields declined over 25 basis points
to finish the six-month period ended April 30, 2000 at 6.07%. During
the last six months, municipal bond yields declined just 10 basis
points overall.
The relative underperfomance of the municipal bond market in recent
months has been especially disappointing given the strong technical
position the tax-exempt bond market enjoyed. The issuance of long-
term tax-exempt securities has dramatically declined. Over the last
year, $203 billion in new long-term municipal securities was issued,
a decline of almost 25% compared to the same period a year earlier.
For the six months ended April 30, 2000, approximately $90 billion
in new tax-exempt bonds was underwritten, a decline of more than 25%
compared to the same period in 1999. Although investors received
over $30 billion in coupon payments, bond maturities, and the
proceeds from early bond redemptions, coupled with the highest
municipal bond yields in three years, overall investor demand has
diminished. Long-term municipal bond mutual funds have seen
consistent outflows in recent months as the yields of individual
securities have risen faster than those of larger, more diverse
mutual funds. Over the last four months, tax-exempt mutual funds
have had net redemptions of more than $8 billion. Also, the demand
from property and casualty insurance companies has weakened as a
result of the losses and anticipated losses incurred from a series
of damaging storms across much of the eastern United States.
Additionally, many institutional investors who have in recent years
been attracted to the municipal bond market by historically
attractive tax-exempt bond yield ratios of over 90% found other
asset classes even more attractive. Even with a favorable supply
position, tax-exempt municipal bond yields have underperformed their
taxable counterparts.
Any significantly lower municipal bond yields are still likely to
require weaker US employment growth and consumer spending. The
actions taken in recent months by the Federal Reserve Board should
eventually slow US economic growth. The recent declines in US home
sales are perhaps the first sign that consumer spending is being
slowed by higher interest rates. Until further signs develop, it is
likely that the municipal bond market's current favorable technical
position will dampen significant tax-exempt interest rate volatility
and provide a stable environment for eventual improvement in
municipal bond prices.
Portfolio Strategy
During the six-month period ended April 30, 2000, we continued our
investment strategy of seeking to enhance the level of tax-exempt
income and to decrease the price volatility of the Fund. We focused
on purchasing premium couponed issues in the 11-year - 20-year
maturity range and the sale of long duration bonds. Because of the
steepness in the municipal bond market yield curve, these issues
represented 90% - 95% of the yield available on the long end of the
curve. This maturity sector also provided for greater protection
from any volatility the market has experienced recently. We were
prevented from fully reducing the Fund's duration because of a
scarcity of new issues coming to market that could be defensively
structured.
The Fund's cost of borrowing increased somewhat in recent months as
short-term tax-exempt interest rates rose along with the adjustment
evident in the taxable market. Long-term tax-exempt interest rates
have actually declined modestly, causing the municipal yield curve
to flatten. While this flattening has reduced the incremental yield
enhancement resulting from leveraging the Fund's Common Stock, it is
important to note that in contrast to the inverted shape of the
USTreasury yield curve, the municipal yield curve remained
positively sloped. (For a complete explanation of the benefits and
risks of leveraging, see page 1 of this report to shareholders.)
Looking ahead, we expect to maintain our fully invested position in
order to seek to enhance shareholder income. Because tax-exempt bond
yields are expected to remain in a narrow range, we do not
anticipate making any consequential changes to the Fund, and we will
continue to maintain our present investment strategy. If either the
US economy or equity markets display any major weakness, we may
adopt a more positive stance in order to enhance portfolio
appreciation.
Sincerely,
(Terry K. Glenn)
Terry K. Glenn
President and Director
(Vincent R. Giordano)
Vincent R. Giordano
Senior Vice President
(William R. Bock)
William R. Bock
Vice President and Portfolio Manager
May 30, 2000
MuniYield Insured Fund, Inc., April 30, 2000
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 at right.
AMT Alternative Minimum Tax
(subject to)
COP Certificates of Participation
DATES Daily Adjustable Tax-Exempt Securities
EDA Economic Development Authority
GO General Obligation Bonds
HDA Housing Development Authority
HFA Housing Finance Agency
IDA Industrial Development Authority
IDR Industrial Development Revenue Bonds
M/F Multi-Family
PCR Pollution Control Revenue Bonds
RIB Residual Interest Bonds
RITR Residual Interest Trust Receipts
S/F Single-Family
TRAN Tax Revenue Anticipation Notes
VRDN Variable Rate Demand Notes
<TABLE>
SCHEDULE OF INVESTMENTS (in Thousands)
<CAPTION>
S&P Moody's Face
STATE Ratings Ratings Amount Issue Value
<S> <S> <S> <C> <S> <C>
Alaska--1.8% AAA Aaa $ 3,695 Alaska Energy Authority, Power Revenue Refunding Bonds (Bradley
Lake), Fourth Series, 6% due 7/01/2018 (g) $ 3,845
AAA AAA 10,000 Alaska State Housing Finance Corporation Revenue Bonds, RITR,
Series 2, 6.62% due 6/01/2035 (i)(k) 9,863
NR* Aaa 10,410 Alaska State Housing Finance Corporation, Revenue Refunding
Bonds, RITR, Series 2, 6.22% due 12/01/2024 (d)(e)(h)(i)(k) 9,919
Arizona--0.7% NR* NR* 5,000 Mohave County, Arizona, IDA, IDR (North Star Steel Company
Project), AMT, 6.70% due 3/01/2020 5,053
AAA Aaa 3,800 Tempe, Arizona, Unified High School District Number 213, GO,
Refunding, 6.25% due 7/01/2004 (c) 3,987
California AAA Aaa 5,250 Anaheim, California, Public Financing Authority, Lease
--19.1% Revenue Bonds (Public Improvements Project), Senior-Series A,
6% due 9/01/2024 (g) 5,448
California HFA, Revenue Bonds, AMT:
A+ Aa2 3,750 RIB, Series B-2, 8.483% due 8/01/2023 (d)(k) 3,937
AAA Aaa 1,595 Series E, 7% due 8/01/2026 (i) 1,647
AAA Aaa 10,000 California State, GO, 5.25% due 6/01/2021 (a) 9,278
California State, GO, Refunding:
AA- Aa3 15,990 5.50% due 3/01/2017 15,833
AA- Aa3 10,000 5.50% due 3/01/2018 9,832
AAA Aaa 9,750 5% due 8/01/2024 (i) 8,568
AA- Aa3 10,000 5.50% due 9/01/2024 9,573
BBB+ Baa1 5,000 California Statewide Communities Development Authority, COP
(Catholic Healthcare West), 6.50% due 7/01/2020 4,922
AAA Aaa 15,000 Los Angeles, California, Department of Water and Power,
Electric Plant Revenue Bonds, 5.50% due 6/15/2029 (g) 14,309
Los Angeles, California, Department of Water and Power,
Electric Plant Revenue Refunding Bonds:
A+ Aa3 7,410 6.125% due 2/15/2019 7,530
A+ Aa3 10,000 6% due 2/15/2028 10,013
Los Angeles, California, Harbor Department Revenue Bonds, AMT:
NR* Aaa 4,000 RITR, Series RI-7, 6.845% due 11/01/2026 (i)(k) 4,185
AAA Aaa 6,330 Series B, 6.625% due 8/01/2019 (a) 6,646
AAA Aaa 8,725 Series B, 6.625% due 8/01/2025 (a) 9,160
AAA Aaa 12,525 Los Angeles, California, Unified School District, GO, Series
A, 5.40% due 7/01/2022 (c) 11,888
AAA Aaa 15,000 Los Angeles County, California, Metropolitan Transportation
Authority, Sales Tax Revenue Bonds, Proposition A--First Tier,
Senior Series A, 6% due 7/01/2006 (i)(j) 16,046
AAA Aaa 5,000 Los Angeles County, California, Transportation Commission,
Sales Tax Revenue Refunding Bonds, Series B, 6.50% due
7/01/2015 (c) 5,195
AAA Aaa 2,190 Northern California Transmission Revenue Bonds (California--
Oregon Transmission Project), Series A, 6.50% due 5/01/2016 (i) 2,290
AAA Aaa 12,000 Port Oakland, California, Revenue Bonds, AMT, Series K,
5.75% due 11/01/2021 (c) 11,854
AAA Aaa 3,000 Sacramento, California, Municipal Utility District, Electric
Revenue Bonds, Series I, 6% due 1/01/2024 (i) 3,024
AAA Aaa 20,000 San Francisco, California, Bay Area Rapid Transit District,
Sales Tax Revenue Refunding Bonds, 5% due 7/01/2028 (a) 17,380
San Francisco, California, City and County Airport Commission,
International Airport Revenue Bonds:
AAA Aaa 6,000 AMT, Second Series, Issue 6, 6.60% due 5/01/2024 (a) 6,344
AAA Aaa 9,735 AMT, Second Series, Issue 22, 5% due 5/01/2019 (a) 8,610
AAA Aaa 9,500 Second Series, Issue 9B, 5.25% due 5/01/2020 (c) 8,833
AAA Aaa 5,000 San Francisco, California, City and County, COP (San Francisco
Courthouse Project), 5.875% due 4/01/2021 (g) 5,021
AAA Aaa 10,000 San Francisco, California, City and County Sewer Revenue Bonds,
Series A, 5.95% due 10/01/2025 (c) 10,043
AAA Aaa 6,895 San Jose, California, Redevelopment Agency, Tax Allocation
Refunding Bonds (Merged Area Redevelopment Project), 5.60%
due 8/01/2019 (i) 6,830
AAA Aaa 6,000 San Mateo County, California, Joint Powers Authority, Lease
Revenue Refunding Bonds (Capital Projects Program), Series A,
4.75% due 7/15/2023 (g) 5,047
Santa Rosa, California, Wastewater Revenue Refunding Bonds (c):
AAA Aaa 3,000 Series A, 5.25% due 9/01/2016 2,935
AAA Aaa 3,295 Series B, 6.125% due 9/01/2017 3,366
Colorado--1.4% NR* Aaa 1,000 Colorado Health Facilities Authority, Hospital Revenue
Refunding Bonds (Poudre Valley Health Care), Series A, 5.75%
due 12/01/2023 (g) 976
AAA Aaa 10,000 Denver, Colorado, City and County Airport Revenue Refunding
Bonds, Series E, 5.25% due 11/15/2023 (i) 9,026
AAA Aaa 7,000 Douglas County, Colorado, School District No. RE1 (Douglas
and Elbert Counties Improvement), GO, Series A, 6.50% due
12/15/2004 (i)(j) 7,490
Connecticut AAA Aaa 7,695 Connecticut State, HFA, Revenue Bonds (Housing Mortgage Finance
--0.8% Program), Series B, 6.75% due 11/15/2023 (i) 8,047
AA- A1 2,000 Connecticut State Health and Educational Facilities Authority,
Revenue Refunding Bonds (Nursing Home Program--AHF/Hartford),
7.125% due 11/01/2004 (j) 2,197
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 (i) 20,848
</TABLE>
MuniYield Insured Fund, Inc., April 30, 2000
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<CAPTION>
S&P Moody's Face
STATE Ratings Ratings Amount Issue Value
<S> <S> <S> <C> <S> <C>
Florida--1.6% AAA Aaa $ 5,690 Florida State Division Bond Finance Department, General
Services Revenue Bonds (Environmental Protection-
Preservation 2000), Series B, 5.50% due 7/01/2008 (g) $ 5,836
AAA Aaa 7,350 Florida State Turnpike Authority, Turnpike Revenue Bonds
(Department of Transportation), Series A, 5.50% due
7/01/2021 (c) 7,074
NR* VMIG1++ 6,100 Jacksonville, Florida, Health Facilities Authority,
Hospital Revenue Refunding Bonds (Genesis Rehabilitation
Hospital), VRDN, 5.85% due 5/01/2021 (l) 6,100
A1+ VMIG1++ 150 Jacksonville, Florida, PCR, Refunding (Florida Power and
Light Co. Project), VRDN, 6.05% due 5/01/2029 (l) 150
A1+ VMIG1++ 900 Pinellas County, Florida, Health Facilities Authority,
Revenue Refunding Bonds (Pooled Hospital Loan Program),
DATES, 5.50% due 12/01/2015 (a)(l) 900
Georgia--2.3% Atlanta, Georgia, Airport Revenue Refunding Bonds,
Series A (c):
AAA Aaa 15,000 5.50% due 1/01/2021 14,408
AAA Aaa 5,000 5.50% due 1/01/2026 4,743
AAA Aaa 10,000 Georgia Municipal Electric Authority, Power Revenue
Refunding Bonds, Series EE, 6.40% due 1/01/2023 (a) 10,250
Hawaii--1.9% Hawaii State Airports System Revenue Bonds, AMT,
Second Series (i):
AAA Aaa 6,000 7% due 7/01/2018 6,242
AAA Aaa 17,145 6.75% due 7/01/2021 17,788
Illinois--6.5% AAA Aaa 20,000 Chicago, Illinois, Board of Education, GO (Chicago School
Reform Project), Series A, 5.25% due 12/01/2027 (a) 17,745
Chicago, Illinois, Midway Airport Revenue Bonds, AMT,
Series A (i):
AAA Aaa 6,810 6.25% due 1/01/2004 (j) 7,184
AAA Aaa 2,350 6.25% due 1/01/2024 2,369
AAA Aaa 3,870 Chicago, Illinois, O'Hare International Airport, Special
Facility Revenue Bonds (International Terminal), AMT,
6.75% due 1/01/2018 (i) 4,023
AAA Aaa 12,000 Chicago, Illinois, Public Building Commission, Mortgage
Revenue Bonds, Series A, 6.50% due 1/01/2018 (b)(i) 12,043
AAA Aaa 12,500 Cook County, Illinois, GO, Capital Improvement, Series A,
5% due 11/15/2028 (c) 10,638
A1 VMIG1++ 9,100 Illinois Health Facilities Authority, Revenue Refunding
Bonds (University of Chicago Hospitals), VRDN, 5.45% due
8/01/2026 (i)(l) 9,100
AAA Aaa 22,235 Metropolitan Pier and Exposition Authority, Illinois,
Dedicated State Tax Revenue Refunding Bonds (McCormick
Plant Expansion Project), 5.50% due 12/15/2024 (c) 21,003
Indiana--1.9% AAA Aaa 10,000 Indiana Health Facilities Financing Authority, Hospital
Revenue Bonds (Charity Obligation Group), 5.50% due
11/15/2024 (i) 9,241
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) 2,525
AAA Aaa 10,000 Indianapolis, Indiana, Economic Development Revenue Bonds
(Archdiocese of Indianapolis), 5.50% due 7/01/2026 (i) 9,368
AA NR* 3,000 Indianapolis, Indiana, Local Public Improvement Bond
Bank Revenue Refunding Bonds, Series D, 6.75% due 2/01/2020 3,154
Iowa--0.0% AAA Aaa 505 Iowa Financing Authority, S/F Mortgage Revenue Refunding
Bonds, Series F, 6.35% due 7/01/2009 (a)(f) 511
Kansas--2.0% AAA Aaa 20,250 Burlington, Kansas, PCR, Refunding (Kansas Gas and Electric
Company Project), 7% due 6/01/2031 (i) 21,062
AAA Aaa 5,000 Kansas State Turnpike Authority, Turnpike Revenue Refunding
Bonds, 5.25% due 9/01/2017 (a) 4,707
Maryland--0.3% NR* Aa3 2,085 Maryland State Community Development Administration, M/F
Housing Revenue Refunding Bonds (Department of Housing and
Community Development), Series C, 6.65% due 5/15/2025 (d)(h) 2,153
NR* Aa2 1,920 Maryland State Community Development Administration, S/F
Program Revenue Refunding Bonds (Department of Housing and
Community Development), AMT, 2nd Series, 6.55% due 4/01/2026 1,952
Massachusetts AAA Aaa 6,640 Boston, Massachusetts, Water and Sewer Commission Revenue
--2.5% Bonds, Senior Series D, 4.75% due 11/01/2022 (c) 5,543
AAA Aaa 10,000 Massachusetts State, HFA, Housing Development Revenue
Refunding Bonds, Series B, 5.40% due 12/01/2028 (i) 9,070
AAA Aaa 7,130 Massachusetts State Health and Educational Facilities
Authority Revenue Bonds (New England Medical Center
Hospitals), Series F, 6.625% due 7/01/2025 (c) 7,337
AAA Aaa 10,000 Massachusetts State Health and Educational Facilities
Authority, Revenue Refunding Bonds (Northeastern University),
Series E, 6.55% due 10/01/2022 (i) 10,492
Michigan--3.1% AAA Aaa 2,750 Caledonia, Michigan, Community Schools, GO, Refunding,
6.625% due 5/01/2014 (a) 2,881
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) 22,743
Monroe County, Michigan, PCR (Detroit Edison Company
Project), AMT (i):
AAA Aaa 5,000 Series CC, 6.55% due 6/01/2024 5,183
AAA Aaa 8,500 Series I-B, 6.55% due 9/01/2024 8,824
Minnesota BBB+ Baa1 4,500 Minneapolis and Saint Paul, Minnesota, Housing and
--0.5% Redevelopment Authority, Health Care System Revenue
Refunding Bonds (Group Health Plan Inc. Project),
6.90% due 10/15/2022 4,392
AA+ Aa2 2,190 Minnesota State, HFA, S/F Mortgage Revenue Bonds, AMT,
Series L, 6.70% due 7/01/2020 2,243
Missouri--0.8% AAA Aaa 7,000 Kansas City, Missouri, Airport Revenue Bonds, General
Improvement, Series B, 6.875% due 9/01/2004 (g)(j) 7,568
NR* Aaa 3,145 Missouri State Environmental Improvement and Energy Resource
Authority, Water Pollution Revenue Bonds (State Revolving
Funds Program), Series A, 5.75% due 7/01/2015 3,200
Nevada--6.4% AAA Aaa 7,975 Clark County, Nevada, Passenger Facilities Charge Revenue
Refunding Bonds (Las Vegas McCarran International), 4.75%
due 7/01/2022 (i) 6,624
Clark County, Nevada, School District, GO:
AAA Aaa 15,000 6% due 6/15/2006 (c)(j) 15,828
AAA Aaa 10,830 Series A, 5.50% due 6/15/2018 (i) 10,503
AAA Aaa 5,000 Humboldt County, Nevada, PCR, Refunding (Sierra Pacific
Project), 6.55% due 10/01/2013 (a) 5,228
AAA Aaa 3,000 Las Vegas New Convention and Visitors Authority Revenue
Bonds, 6% due 7/01/2019 (a) 3,041
NR* Aaa 16,775 Nevada State, GO, RITR, Series 36, 5.37% due 11/01/2025
(c)(k) 14,806
</TABLE>
MuniYield Insured Fund, Inc., April 30, 2000
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<CAPTION>
S&P Moody's Face
STATE Ratings Ratings Amount Issue Value
<S> <S> <S> <C> <S> <C>
Nevada Washoe County, Nevada, Gas Facilities Revenue Bonds (Sierra
(concluded) Pacific Power Company), AMT:
AAA Aaa $15,000 6.65% due 12/01/2017 (a) $ 15,736
AAA Aaa 5,000 6.55% due 9/01/2020 (i) 5,045
AAA Aaa 5,000 Washoe County, Nevada, Water Facility Revenue Bonds (Sierra
Pacific Power Company), AMT, 6.65% due 6/01/2017 (i) 5,255
New Jersey NR* A3 3,200 New Jersey Health Care Facilities Financing Authority Revenue
--2.5% Bonds (Hackensack University Medical Center), 6% due 1/01/2025 3,046
AAA Aaa 5,385 New Jersey State Transit Corporation, COP (Federal Transit
Administration Grants), Series A, 5.75% due 9/15/2011 (a) 5,554
AA Aa2 5,990 New Jersey State Transportation Trust Fund Authority,
Transportation System Revenue Bonds, Series A, 6% due 6/15/2016 6,168
AAA Aaa 2,000 New Jersey State Transportation Trust Fund Authority,
Transportation System Revenue Refunding Bonds, Series A, 6%
due 6/15/2004 (a) 2,076
AAA Aaa 14,750 New Jersey State Turnpike Authority, Turnpike Revenue
Refunding Bonds, Series A, 5.75% due 1/01/2017 (i) 14,879
New Mexico AAA Aaa 10,000 Farmington, New Mexico, PCR, Refunding (Southern California
--0.9% Edison Company), Series A, 5.875% due 6/01/2023 (i) 9,943
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 1,672
New York AAA Aaa 7,000 Metropolitan Transportation Authority, New York, Commuter
--10.4% Facilities Revenue Bonds, Series A, 6.10% due 7/01/2006 (c)(j) 7,469
Metropolitan Transportation Authority, New York, Commuter
Facilities Revenue Refunding Bonds, Series B:
AAA Aaa 12,500 5.125% due 7/01/2024 (a) 11,011
AAA Aaa 14,435 4.75% due 7/01/2026 (c) 11,935
AAA Aaa 10,000 Metropolitan Transportation Authority, New York, Dedicated
Tax Fund Revenue Bonds, Series A, 5% due 4/01/2029 (g) 8,574
AAA Aaa 10,000 Metropolitan Transportation Authority, New York, Transit
Facilities Revenue Bonds, Series A, 5.70% due 7/01/2017 (i) 9,988
AAA Aaa 15,740 Metropolitan Transportation Authority, New York, Transit
Facilities Revenue Refunding Bonds, Series B, 4.75% due
7/01/2026 (c) 13,014
AAA Aaa 25,830 New York City, New York, City Municipal Water Finance
Authority, Water and Sewer System Revenue Bonds, RITR,
Series FR-6, 5.945% due 6/15/2026 (i)(k) 24,732
AAA Aaa 6,180 New York City, New York, Educational Construction Fund
Revenue Bonds, Junior Sub-Lien, 5.50% due 4/01/2026 (a) 5,830
AAA NR* 10,000 New York City, New York, GO, Series F, 5.75% due 2/01/2015 (g) 10,092
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 (i) 4,818
New York State Dormitory Authority, Revenue Refunding Bonds:
BBB+ Baa1 5,000 (Mount Sinai Health), Series A, 6.625% due 7/01/2019 5,045
BBB+ Baa1 9,850 (Mount Sinai Health), Series A, 6.50% due 7/01/2025 9,682
AAA Aaa 6,000 (Pace University), 5.70% due 7/01/2022 (i) 5,852
NR* NR* 6,000 New York State Energy Research and Development Authority, Gas
Facilities Revenue Bonds, RITR, Series 9, 5.47% due
1/01/2021 (i)(k) 5,471
North AAA Aaa 2,500 Grand Forks, North Dakota, Health Care Facilities Revenue Bonds
Dakota--0.7% (United Hospital Obligated Group), 6.25% due 12/01/2024 (i) 2,528
NR* Aa3 6,720 North Dakota State Housing Finance Agency, Home Mortgage
Revenue Refunding Bonds (Housing Finance Program), AMT,
Series A, 6.40% due 7/01/2020 6,825
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 (c) 2,655
Oklahoma--0.9% AAA Aaa 12,000 Oklahoma State Industries Authority, Revenue Refunding Bonds
(Health System--Obligation Group), Series A, 5.75% due
8/15/2029 (i) 11,476
Oregon--0.3% AAA Aaa 3,140 Oregon State Department of Administrative Services, COP,
Series A, 6.25% due 5/01/2017 (a) 3,303
Pennsylvania AAA Aaa 12,000 Pennsylvania Intergovernmental Cooperative Authority, Special
--0.8% Tax Refunding Bonds (Philadelphia Funding Program), 4.75%
due 6/15/2023 (c) 9,940
South AAA Aaa 10,000 Piedmont Municipal Power Agency, South Carolina, Electric
Carolina--1.5% Revenue Refunding Bonds, Series A, 4.75% due 1/01/2025 (i) 8,179
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 (g) 7,194
NR* NR* 4,200 Spartanburg County, South Carolina, Solid Waste Disposal
Facilities Revenue Bonds (BMW Project), AMT, 7.55% due
11/01/2024 4,447
Tennessee--0.7% AAA Aaa 3,820 Johnson City, Tennessee, Health and Educational Revenue
Refunding Bonds, 6.75% due 7/01/2016 (i) 3,984
AA A1 4,490 Tennessee HDA, Mortgage Finance Revenue Bonds, AMT, Series A,
6.90% due 7/01/2025 4,584
Texas--7.7% AAA Aaa 1,880 Bexar, Texas, Metropolitan Water District, Waterworks System
Revenue Refunding Bonds, 6.35% due 5/01/2025 (i) 1,931
AAA Aaa 11,500 Brazos River Authority, Texas, PCR, Refunding (Texas Utilities
Electric Company Project), AMT, 6.50% due 12/01/2027 (a) 11,713
AAA Aaa 3,800 Brazos River Authority, Texas, PCR (Texas Utilities Electric
Company Project), AMT, Series A, 6.75% due 4/01/2022 (a) 3,972
AAA Aaa 7,000 Brazos River Authority, Texas, Revenue Refunding Bonds (Houston
Light and Power), Series A, 6.70% due 3/01/2017 (a) 7,309
BBB- Baa1 11,550 Dallas-Fort Worth, Texas, International Airport Facilities,
Improvement Corporation Revenue Bonds (American Airlines Inc.),
AMT, 6.375% due 5/01/2035 10,971
AA Aa1 1,000 Harris County, Texas, Certificates of Obligation, 4.50% due
10/01/2023 796
Harris County, Texas, Health Facilities Development Corporation,
Hospital Revenue Refunding Bonds (Methodist Hospital), VRDN (l):
A1+ NR* 9,500 5.80% due 12/01/2025 9,500
A1+ NR* 7,600 5.80% due 12/01/2026 7,600
AAA Aaa 6,885 Houston, Texas, Airport System Revenue Bonds, AMT, Sub-Lien,
Series A, 6.75% due 7/01/2021 (c) 7,143
</TABLE>
MuniYield Insured Fund, Inc., April 30, 2000
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in Thousands)
<CAPTION>
S&P Moody's Face
STATE Ratings Ratings Amount Issue Value
<S> <S> <S> <C> <S> <C>
Texas AAA Aaa $ 1,295 Houston, Texas, Water and Sewer System Revenue Bonds, Series A,
(concluded) 6.375% due 12/01/2022 (i) $ 1,357
AAA Aaa 6,000 Houston, Texas, Water and Sewer System Revenue Refunding Bonds,
Junior Lien, Series A, 6.20% due 12/01/2005 (i)(j) 6,338
AAA Aaa 11,795 Matagorda County, Texas, Navigation District Number 1, Revenue
Refunding Bonds (Houston Light and Power Company), Series A,
6.70% due 3/01/2027 (a) 12,305
AAA Aaa 1,500 Sabine River Authority, Texas, PCR, Refunding (Texas Utilities
Electric Company Project), 6.55% due 10/01/2022 (c) 1,527
SP1+ MIG1++ 7,000 Texas State, TRAN, Series A, 4.50% due 8/31/2000 7,002
AAAr Aaa 10,000 Travis County, Texas, Health Facilities Development
Corporation, Revenue Refunding Bonds, RITR, Series 4, 6.39%
due 11/15/2024 (a)(k) 9,530
Utah--0.7% AAA Aaa 5,200 Intermountain Power Agency, Utah, Power Supply Revenue
Refunding Bonds, Series A, 6% due 7/01/2008 (i) 5,446
AAA Aaa 4,000 Salt Lake City, Utah, Airport Revenue Bonds, AMT, Series A,
6.125% due 12/01/2022 (c) 4,008
Vermont--0.3% AAA Aaa 3,400 Vermont HFA, S/F Housing Revenue Bonds, AMT, Series 12B, 6.30%
due 11/01/2019 (g) 3,441
Virginia--0.8% AAA Aaa 5,540 Loudoun County, Virginia, COP, 6.90% due 3/01/2019 (g) 5,909
AA+ Aa1 4,330 Virginia State, HDA, Commonwealth Mortgage Revenue Bonds, AMT,
Series B, Sub-Series B-1, 6.375% due 7/01/2026 4,389
Washington AAA Aaa 6,595 Chelan County, Washington, Public Utility District No. 001,
--11.7% Consolidated Revenue Refunding Bonds (Chelan Hydro), AMT,
Series B, 6.35% due 7/01/2026 (i) 6,718
AA+ Aa1 10,550 Port Seattle, Washington, GO, AMT, Series B, 5.75% due
12/01/2025 10,087
AAA Aaa 20,000 Seattle, Washington, Drain and Wastewater Utility Revenue
Bonds, 5.75% due 11/01/2029 (i) 19,339
AAA Aaa 9,250 Seattle, Washington, Municipal Light and Power Revenue
Bonds, 6% due 10/01/2024 (i) 9,238
AAA Aaa 10,000 Seattle, Washington, Water System Revenue Bonds, 5.25% due
3/01/2024 (c) 9,008
AAA Aaa 5,000 Snohomish County, Washington, Public Utility District
Number 001, Electric Revenue Bonds (Generation System), AMT,
Series B, 5.80% due 1/01/2024 (i) 4,807
AAA Aaa 11,750 Snohomish County, Washington, Public Utility District Number
001, Electric Revenue Refunding Bonds, 5.375% due 12/01/2024 (g) 10,811
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) 8,184
AAA Aaa 8,705 Tacoma, Washington, Solid Waste Utility Revenue Refunding
Bonds, Series B, 5.50% due 12/01/2019 (a) 8,303
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 (g) 2,084
Washington State, GO:
AA+ Aa1 10,955 Series A & AT-6, 6.25% due 2/01/2011 11,773
AAA Aaa 10,235 Series B, 6% due 1/01/2015 (g) 10,537
AAA Aaa 5,695 Series B, 6% due 1/01/2017 (g) 5,824
AAA Aaa 14,860 Series C, 5% due 1/01/2022 (c) 13,005
AAA Aaa 2,500 Washington State Health Care Facilities Authority, Revenue R
efunding Bonds (Virginia Mason Obligation Group--Seattle),
6.30% due 2/15/2017 (i) 2,549
NR* Aaa 4,000 Washington State Housing Finance Commission Revenue Bonds
(S/F Program), AMT, Series 1A, 6.40% due 12/01/2019 (f) 4,051
AAA Aaa 13,095 Washington State Public Power Supply System, Revenue
Refunding Bonds (Nuclear Project Number 1), Series A, 6.25%
due 7/01/2017 (i) 13,314
West AAA Aaa 4,425 Harrison County, West Virginia, County Commission for
Virginia--0.4% Solid Waste Disposal Revenue Bonds (Monongahela Power),
AMT, Series C, 6.75% due 8/01/2024 (a) 4,702
Wisconsin AA Aa2 595 Wisconsin Housing and EDA, Home Ownership Revenue Refunding
--2.0% Bonds, AMT, Series B, 6.75% due 9/01/2025 603
Wisconsin Public Power Inc., Power Supply System Revenue Bonds,
Series A (i):
AAA Aaa 5,000 6% due 7/01/2015 5,126
AAA Aaa 13,685 5.75% due 7/01/2023 13,308
Wisconsin State Health and Educational Facilities Authority,
Revenue Refunding Bonds (Wheaton-Franciscan Services) (i):
AAA Aaa 3,955 6.50% due 8/15/2011 4,100
AAA Aaa 2,000 6% due 8/15/2015 2,009
Total Investments (Cost--$1,243,024)--97.7% 1,254,282
Other Assets Less Liabilities--2.3% 29,467
-----------
Net Assets--100.0% $ 1,283,749
===========
(a)AMBAC Insured.
(b)Escrowed to maturity.
(c)FGIC Insured.
(d)FHA Insured.
(e)FNMA Collateralized.
(f)FNMA/GNMA Collateralized.
(g)FSA Insured.
(h)GNMA Collateralized.
(i)MBIA Insured.
(j)Prerefunded.
(k)The interest rate is subject to change periodically and inversely
based upon prevailing market rates. The interest rate shown is the
rate in effect at April 30, 2000.
(l)The interest rate is subject to change periodically based upon
prevailing market rates. The interest rate shown is the rate in
effect at April 30, 2000.
*Not Rated.
++Highest short-term rating by Moody's Investors Service, Inc.
See Notes to Financial Statements.
</TABLE>
MuniYield Insured Fund, Inc., April 30, 2000
<TABLE>
STATEMENT OF ASSETS, LIABILITIES AND CAPITAL
<CAPTION>
As of April 30, 2000
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$1,243,023,635) $1,254,282,311
Cash 151,583
Receivables:
Securities sold $ 31,960,331
Interest 23,425,303 55,385,634
--------------
Prepaid expenses and other assets 41,614
--------------
Total assets 1,309,861,142
--------------
Liabilities: Payables:
Securities purchased 24,639,119
Dividends to shareholders 865,437
Investment adviser 497,453 26,002,009
--------------
Accrued expenses and other liabilities 110,022
--------------
Total liabilities 26,112,031
--------------
Net Assets: Net assets $1,283,749,111
==============
Capital: Capital Stock (200,000,000 shares authorized):
Preferred Stock, par value $.10 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 14,050,752
Accumulated realized capital losses on investments--net (25,448,422)
Accumulated distributions in excess of realized capital
gains--net (29,830,819)
Unrealized appreciation on investments--net 11,258,676
--------------
Total--Equivalent to $13.62 net asset value per share
of Common Stock (market price--$12.00) 843,749,111
--------------
Total capital $1,283,749,111
==============
*Auction Market Preferred Stock.
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENT OF OPERATIONS
<CAPTION>
For the Six Months Ended April 30, 2000
<S> <S> <C> <C>
Investment Interest and amortization of premium and discount earned $ 37,913,197
Income:
Expenses: Investment advisory fees $ 3,189,094
Commission fees 560,282
Transfer agent fees 102,699
Accounting services 82,845
Professional fees 53,713
Directors' fees and expenses 37,921
Custodian fees 35,521
Listing fees 30,725
Printing and shareholder reports 28,349
Pricing fees 11,734
Other 31,994
--------------
Total expenses 4,164,877
--------------
Investment income--net 33,748,320
--------------
Realized & Realized loss on investments--net (25,448,422)
Unrealized Change in unrealized appreciation/depreciation on
Gain (Loss) on investments--net 25,306,612
Investments--Net: --------------
Net Increase in Net Assets Resulting from Operations $ 33,606,510
==============
See Notes to Financial Statements.
</TABLE>
MuniYield Insured Fund, Inc., April 30, 2000
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
For the Six For the
Months Ended Year Ended
April 30, October 31,
Increase (Decrease) in Net Assets: 2000 1999
<S> <S> <C> <C>
Operations: Investment income--net $ 33,748,320 $ 68,300,367
Realized loss on investments--net (25,448,422) (18,426,435)
Change in unrealized appreciation/depreciation on
investments--net 25,306,612 (114,657,786)
-------------- --------------
Net increase (decrease) in net assets resulting from
operations 33,606,510 (64,783,854)
-------------- --------------
Dividends & Investment income--net:
Distributions to: Common Stock (26,450,891) (55,416,688)
Shareholders: Preferred Stock (8,350,982) (11,920,330)
Realized gain on investments--net:
Common Stock -- (1,149,610)
Preferred Stock -- (156,238)
In excess of realized gain on investments--net:
Common Stock -- (26,261,163)
Preferred Stock -- (3,569,034)
-------------- --------------
Net decrease in net assets resulting from dividends and
distributions to shareholders (34,801,873) (98,473,063)
-------------- --------------
Capital Stock Value of shares issued to Common Stock shareholders in
Transactions: reinvestment of dividends and distributions -- 9,382,082
-------------- --------------
Net Assets: Total decrease in net assets (1,195,363) (153,874,835)
Beginning of period 1,284,944,474 1,438,819,309
-------------- --------------
End of period* $1,283,749,111 $1,284,944,474
============== ==============
*Undistributed investment income--net $ 14,050,752 $ 15,104,305
============== ==============
See Notes to Financial Statements.
</TABLE>
<TABLE>
FINANCIAL HIGHLIGHTS
<CAPTION>
The following per share data and ratios have been derived For the Six
from information provided in the financial statements. Months Ended
April 30, For the Year Ended October 31,
Increase (Decrease) in Net Asset Value: 2000 1999 1998 1997 1996
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 13.64 $ 16.28 $ 15.84 $ 15.52 $ 15.46
Operating --------- --------- --------- --------- ---------
Performance: Investment income--net .55 1.10 1.15 1.15 1.18
Realized and unrealized gain (loss) on
investments--net (.01) (2.14) .62 .54 .15
--------- --------- --------- --------- ---------
Total from investment operations .54 (1.04) 1.77 1.69 1.33
--------- --------- --------- --------- ---------
Less dividends and distributions to
Common Stock shareholders:
Investment income--net (.43) (.90) (.88) (.92) (.91)
Realized gain on investments--net -- (.02) (.16) (.15) (.09)
In excess of realized gain on
investments--net -- (.43) -- -- --
--------- --------- --------- --------- ---------
Total dividends and distributions to
Common Stock shareholders (.43) (1.35) (1.04) (1.07) (1.00)
--------- --------- --------- --------- ---------
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 (.13) (.19) (.21) (.25) (.24)
Realized gain on investments--net -- --++ (.08) (.04) (.03)
In excess of realized gain on
investments--net -- (.06) -- -- --
--------- --------- --------- --------- ---------
Total effect of Preferred Stock activity (.13) (.25) (.29) (.29) (.27)
--------- --------- --------- --------- ---------
Net asset value, end of period $ 13.62 $ 13.64 $ 16.28 $ 15.84 $ 15.52
========= ========= ========= ========= =========
Market price per share, end of period $ 12.00 $ 12.875 $ 16.00 $ 14.8125 $ 14.00
========= ========= ========= ========= =========
Total Investment Based on market price per share (3.49%)+++ (12.04%) 15.55% 13.92% 10.30%
Return:** ========= ========= ========= ========= =========
Based on net asset value per share 3.39%+++ (8.42%) 9.95% 9.89% 7.76%
========= ========= ========= ========= =========
Ratios Based on Total expenses*** .99%* .94% .91% .95% 1.12%
Average Net ========= ========= ========= ========= =========
Assets of Total investment income--net*** 8.04%* 7.26% 7.10% 7.70% 9.14%
Common Stock: ========= ========= ========= ========= =========
Amount of dividends to Preferred Stock
shareholders 1.99%* 1.27% 1.28% 1.55% 1.85%
========= ========= ========= ========= =========
Investment income--net, to Common Stock
shareholders 6.05%* 5.99% 5.82% 6.15% 7.29%
========= ========= ========= ========= =========
Ratios Based on Total expenses .65%* .64% .63% .63% .64%
Total Average Net ========= ========= ========= ========= =========
Assets:***++++ Total investment income--net 5.28%* 4.95% 4.94% 5.17% 5.22%
========= ========= ========= ========= =========
Ratios Based on Dividends to Preferred Stock
Average Net shareholders 3.81%* 2.72% 2.87% 3.09% 2.45%
Assets of ========= ========= ========= ========= =========
Preferred
Stock:
Supplemental Net assets, net of Preferred Stock,
Data: end of period (in thousands) $ 843,749 $ 844,944 $ 998,819 $ 971,614 $ 701,473
========= ========= ========= ========= =========
Preferred Stock outstanding, end of
period (in thousands) $ 440,000 $ 440,000 $ 440,000 $ 440,000 $ 320,000
========= ========= ========= ========= =========
Portfolio turnover 50.29% 121.88% 112.78% 98.91% 100.49%
========= ========= ========= ========= =========
Leverage: Asset coverage per $1,000 $ 2,918 $ 2,920 $ 3,270 $ 3,208 $ 3,192
========= ========= ========= ========= =========
Dividends Series A--Investment income--net $ 461 $ 745 $ 676 $ 808 $ 832
Per Share on ========= ========= ========= ========= =========
Preferred Stock Series B--Investment income--net $ 461 $ 675 $ 737 $ 813 $ 835
Outstanding: ========= ========= ========= ========= =========
Series C--Investment income--net $ 472 $ 752 $ 673 $ 812 $ 841
========= ========= ========= ========= =========
Series D--Investment income--net $ 418 $ 637 $ 728 $ 789 $ 865
========= ========= ========= ========= =========
Series E--Investment income--net $ 492 $ 640 $ 726 $ 797 $ 842
========= ========= ========= ========= =========
Series F--Investment income--net $ 519 $ 664 $ 750 $ 706 --
========= ========= ========= ========= =========
Series G--Investment income--net $ 480 $ 661 $ 728 $ 675 --
========= ========= ========= ========= =========
*Annualized.
**Total investment returns based on market value, which can be
significantly greater or lesser than the net asset value, may result
in substantially different returns. Total investment returns exclude
the effects of sales charges.
***Do not reflect the effect of dividends to Preferred Stock
shareholders.
++Amount is less than $.01 per share.
++++Includes Common and Preferred Stock average net assets.
++++++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, 2000
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 accounting principles generally accepted
in the United States of America, which may require the use of
management accruals and estimates. These unaudited financial
statements reflect all adjustments, which are, in the opinion of
management, necessary to a fair statement of the results for the
interim period presented. All such adjustments are of a normal
recurring nature. The Fund determines and makes available for
publication the net asset value of its Common Stock on a weekly
basis. The Fund's Common Stock is listed on the New York Stock
Exchange under the symbol 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 investment strategies to increase or decrease the level of
risk to which the Fund is exposed more quickly and efficiently than
transactions in other types of instruments. Losses may arise due to
changes in the value of the contract or if the counterparty does not
perform under the contract.
* Financial futures contracts--The Fund may purchase or sell
financial futures contracts and options on such futures contracts
for the purpose of hedging the market risk on existing securities or
the intended purchase of securities. Futures contracts are contracts
for delayed delivery of securities at a specific future date and at
a specific price or yield. Upon entering into a contract, the Fund
deposits and maintains as collateral such initial margin as required
by the exchange on which the transaction is effected. Pursuant to
the contract, the Fund agrees to receive from or pay to the broker
an amount of cash equal to the daily fluctuation in value of the
contract. Such receipts or payments are known as variation margin
and are recorded by the Fund as unrealized gains or losses. When the
contract is closed, the Fund records a realized gain or loss equal
to the difference between the value of the contract at the time it
was opened and the value at the time it was closed.
* Options--The Fund is authorized to write covered call options and
purchase put options. When the Fund writes an option, an amount
equal to the premium received by the Fund is reflected as an asset
and an equivalent liability. The amount of the liability is
subsequently marked to market to reflect the current market value of
the option written.
When a security is purchased or sold through an exercise of an
option, the related premium paid (or received) is added to (or
deducted from) the basis of the security acquired, or deducted from
(or added to) the proceeds of the security sold. When an option
expires (or the Fund enters into a closing transaction), the Fund
realizes a gain or loss on the option to the extent of the premiums
received or paid (or gain or loss to the extent the cost of the
closing transaction exceeds the premium paid or received).
Written and purchased options are non-income producing investments.
(c) Income taxes--It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute substantially all of its
taxable income to its shareholders. Therefore, no Federal income tax
provision is required.
(d) Security transactions and investment income--Security
transactions are recorded on the dates the transactions are entered
into (the trade dates). Interest income is recognized on the accrual
basis. Discounts and market premiums are amortized into interest
income. Realized gains and losses on security transactions are
determined on the identified cost basis.
(e) Dividends and distributions--Dividends from net investment
income are declared and paid monthly. Distributions of capital gains
are recorded on the ex-dividend dates. Distributions in excess of
realized capital gains are due primarily to differing tax treatments
for futures transactions.
2. Investment Advisory Agreement and
Transactions with Affiliates:
The Fund has entered into an Investment Advisory Agreement with Fund
Asset Management, L.P. ("FAM"). The general partner of FAM is
Princeton Services, Inc. ("PSI"), an indirect wholly-owned
subsidiary of Merrill Lynch & Co., Inc. ("ML & Co."), which is the
limited partner.
FAM is responsible for the management of the Fund's portfolio and
provides the necessary personnel, facilities, equipment and certain
other services necessary to the operations of the Fund. For such
services, the Fund pays a monthly fee at an annual rate of .50% of
the Fund's average weekly net assets, including proceeds from the
issuance of Preferred Stock.
Accounting services are provided to the Fund by FAM at cost.
Certain officers and/or directors of the Fund are officers and/or
directors of FAM, PSI, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the six months ended April 30, 2000 were $607,045,969 and
$610,319,104, respectively.
Net realized losses for the six months ended April 30, 2000 and net
unrealized gains as of April 30, 2000 were as follows:
Realized Unrealized
Losses Gains
Long-term investments $(20,404,366) $11,258,676
Financial futures contracts (5,044,056) --
------------ -----------
Total $(25,448,422) $11,258,676
============ ===========
As of April 30, 2000, net unrealized appreciation for Federal income
tax purposes aggregated $11,258,676, of which $28,416,688 related to
appreciated securities and $17,158,012 related to depreciated
securities. The aggregate cost of investments at April 30, 2000 for
Federal income tax purposes was $1,243,023,635.
4. Capital Stock Transactions:
The Fund is authorized to issue 200,000,000 shares of capital stock,
including Preferred Stock, par value $.10 per share, all of which
were initially classified as Common Stock. The Board of Directors is
authorized, however, to reclassify any unissued shares of capital
stock without approval of the holders of Common Stock.
Common Stock
Shares issued and outstanding during the six months ended April 30,
2000 remained constant and during the year ended October 31, 1999
increased by 594,744 as a result of dividend reinvestment.
Preferred Stock
Auction Market Preferred Stock ("AMPS") are shares of Preferred
Stock of the Fund, with a par value of $.10 per share and a
liquidation preference of $25,000 per share, that entitle their
holders to receive cash dividends at an annual rate that may vary
for the successive dividend periods. The yields in effect at April
30, 2000 were as follows: Series A, 4.15%; Series B, 4.10%; Series
C, 4.10%; Series D, 3.95%; Series E, 4.40%; Series F, 4.25%; and
Series G, 4.60%.
Shares issued and outstanding during the six months ended April 30,
2000 and the year ended October 31, 1999 remained constant.
The Fund pays commissions to certain broker-dealers at the end of
each auction at an annual rate ranging from .25% to .375%,
calculated on the proceeds of each auction. For the six months ended
April 30, 2000, Merrill Lynch, Pierce, Fenner & Smith Incorporated,
an affiliate of FAM, earned $225,315 as commissions.
5. Capital Loss Carryforward:
At October 31, 1999, the Fund had a net capital loss carryforward of
approximately $24,114,000, all of which expires in 2007. This amount
will be available to offset like amounts of any future taxable
gains.
6. Subsequent Event:
On May 5, 2000, the Fund's Board of Directors declared an ordinary
income dividend to Common Stock shareholders in the amount of
$.070000 per share, payable on May 30, 2000 to shareholders of
record as of May 16, 2000.
MuniYield Insured Fund, Inc., April 30, 2000
MANAGED DIVIDEND POLICY
The Fund's dividend policy is to distribute all or a portion of its
net investment income to its shareholders on a monthly basis. In
order to provide shareholders with a more consistent yield to the
current trading price of shares of Common Stock of the Fund, the
Fund may at times pay out less than the entire amount of net
investment income earned in any particular month and may at times in
any month pay out such accumulated but undistributed income in
addition to net investment income earned in that month. As a result,
the dividends paid by the Fund for any particular month may be more
or less than the amount of net investment income earned by the Fund
during such month. The Fund's current accumulated but undistributed
net investment income, if any, is disclosed in the Statement of
Assets, Liabilities and Capital, which comprises part of the
Financial Information included in this report.
QUALITY PROFILE
The quality ratings of securities in the Fund as of April 30, 2000
were as follows:
Percent of
S&P Rating/Moody's Rating Net Assets
AAA/Aaa 81.4%
AA/Aa 8.9
A/A 0.4
BBB/Baa 2.7
NR (Not Rated) 1.2
Other++ 3.1
++Temporary investments in short-term municipal securities.
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
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:
The Bank of New York
100Church Street
New York, NY 10286
NYSE Symbol
MYI
