MUNIYIELD
QUALITY
FUND, INC.
FUND LOGO
Semi-Annual Report
April 30, 1995
Officers and Directors
Arthur Zeikel, President and Director
Herbert I. London, Director
Robert R. Martin, Director
Joseph L. May, Director
Andre F. Perold, Director
Terry K. Glenn, Executive Vice President
Donald C. Burke, Vice President
Vincent R. Giordano, Vice President
Kenneth A. Jacob, Vice President
Gerald M. Richard, Treasurer
Mark B. Goldfus, Secretary
Custodian
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
<PAGE>
Transfer Agents
Common Stock:
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
Preferred Stock:
IBJ Schroder Bank & Trust Company
One State Street
New York, NY 10004
NYSE Symbol
MQY
This report, including the financial information herein, is
transmitted to the shareholders of MuniYield Quality 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.
MuniYield
Quality Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
<PAGE>
MuniYield Quality Fund, Inc.
DEAR SHAREHOLDER
For the six months ended April 30, 1995, the Common Stock of
MuniYield Quality Fund, Inc. earned $0.455 per share income
dividends, which included earned and unpaid dividends of $0.071.
This represents a net annualized yield of 6.57%, based on a month-
end net asset value of $13.96 per share. Over the same period, the
total investment return on the Fund's Common Stock was +10.39%,
based on a change in per share net asset value from $13.16 to
$13.96, and assuming reinvestment of $0.465 per share income
dividends and $0.019 per share capital gains distributions.
The average yields of the Fund's Auction Market Preferred Stock for
the six months ended April 30, 1995 were as follows: Series A,
4.25%; Series B, 3.62%; Series C, 3.77%; and Series D, 3.67%.
The Environment
During the six months ended April 30, 1995, the perception that the
US economy was overheating and inflationary pressures were
increasing gave way to a more benign economic outlook. With more
signs of slowing growth, investors now appear to be forecasting a
"soft landing" for the US economy. Although gross domestic product
was reported to have increased at a revised 5.1% rate during the
final quarter of 1994, declines in other indicators such as new home
sales and durable goods orders registered thus far in 1995 have led
investors to anticipate that the economy is losing enough momentum
to keep inflation under control and preclude further significant
monetary policy tightening by the Federal Reserve Board. A further
indication of a slowing economy was the reported decline in the
Index of Leading Economic Indicators for March.
As US stock and bond markets have risen on more positive economic
news, the value of the US dollar has reached new lows relative to
the yen and the Deutschemark. Persistent trade deficits and exports
of capital from the United States have kept the US currency in a
decade-long decline relative to the Japanese and German currencies.
Over the longer term, since the United States has the highest
productivity among industrialized nations and among the lowest labor
costs, demand for US dollar-denominated assets may improve. However,
a reduction of the still-widening US trade deficit may be necessary
before the US dollar appreciates substantially relative to the yen
and the Deutschemark.
<PAGE>
The first months of 1995 have been very positive for the stock and
bond markets. Continued signs of a moderating expansion and well-
contained inflationary pressures would provide further assurance
that the peak in interest rates is behind us. On the other hand,
indications of reaccelerating growth and further significant
monetary policy tightening by the Federal Reserve Board would be a
decided negative for the US financial markets.
The Municipal Market
During the six-month period ended April 30, 1995, the tax-exempt
bond market gradually recouped much of the losses sustained during
1994. Signs of a weakening domestic economy and ongoing moderate
inflationary pressures have fostered an environment of declining
interest rates. Since October 31, 1994, A-rated, uninsured municipal
revenue bond yields, as measured by the Bond Buyer Revenue Bond
Index, have declined over 65 basis points (0.65%) to close the six-
month period ended April 30, 1995 at 6.29%. Tax-exempt bond yields
initially continued to climb in late 1994, reaching a high of 7.37%
in late Nov-ember 1994. Municipal bond yields have since declined
over 100 basis points from their recent highs and are presently
lower than they were a year ago. US Treasury bond yields have
experienced similar declines over the last six months to end the
April period at 7.34%.
Much of the recent improvement in the tax-exempt bond market,
however, has occurred over the last three months. During this most
recent quarter, municipal bond yields have fallen approximately 50
basis points, while US Treasury bond yields declined only 35 basis
points. Tax-exempt bond yields declined more than their taxable
counterparts in recent months, largely in response to the
significant decline in new bond issuance in recent quarters. Over
the last six months, less than $60 billion in new long-term
municipal securities were underwritten, a decline of nearly 45%
versus the comparable period a year earlier. Issuance was
particularly low this past January and February, with monthly volume
of less than $8 billion. These levels are the lowest monthly totals
since the mid-1980s.
To compound the municipal market's already strong technical posture,
both institutional and individual investors have seen significant
cash inflows in recent months. These assets were derived from
regular coupon payments, bond maturities and the proceeds from early
bond calls and redemptions. It has been estimated that investors
received over $20 billion in principal redemptions and coupon income
in January 1995 alone. With monthly issuance in the $10 billion
range thus far this year, the current supply/demand imbalance has
dominated the municipal market and bond prices have risen
accordingly. The tax-exempt bond market's technical position is
likely to remain very strong throughout most of 1995. Investors are
expected to receive almost $40 billion in principal and coupon
payments on July 1, 1995. Investor proceeds from all sources have
been estimated to exceed $200 billion for all of 1995. Estimates of
total new bond issuance for 1995 have continued to be lowered with
most estimates now in the $125 billion range. Investors should find
it increasingly difficult to replace existing holdings as they
mature and to reinvest coupon income in such an environment.
<PAGE>
The municipal bond market's outperformance thus far this year caused
the tax-exempt market to become temporarily expensive relative to
its taxable counterpart in late April. Investor concerns regarding
the international currency situation and the future impact of
proposed revisions to US taxation policies upon the tax advantage
inherent to municipal bonds have combined to cause tax-exempt bond
yields to increase marginally in recent weeks. Municipal bond yields
have risen approximately 15 basis points from their lows in mid-
April 1995. Long-term US Treasury bond yields have remained
essentially stable. Such an underperformance by the tax-exempt bond
market is likely to be limited in duration. The recent increase in
tax-exempt bond yields has already begun to attract institutional
investors since some municipal bonds yielding in excess of 85% of US
Treasury bond yields are again available. Also, concerns regarding
the implication for municipal bonds' tax advantage resulting from
various proposed tax law changes (for example, flat-tax, value-added
tax or national sales tax) are all likely to quickly recede as
investors realize that such, if any, changes are unlikely to be
enacted before late 1996 at the earliest. Long-term investors will
also recall 1986 when similar tax proposals were made and tax-exempt
bond yields initially rose and then quickly fell. Investors are
likely to view the current situation as an opportunity to purchase
very attractively priced tax-advantaged products. This should cause
municipal bond yields to quickly return to their more historic
relationship.
Portfolio Strategy
During the six months ended April 30, 1995, MuniYield Quality Fund,
Inc. fully participated in the fixed-income market rebound that
began in November 1994. Selective purchases of high-quality
performance-oriented securities enhanced the Fund's total return.
However, overall performance was dictated primarily by our portfolio
strategy which centered around maintaining an attractive and
competitive yield. Therefore, cash reserves were kept fairly low,
averaging close to 5% of net assets. Portfolio structure also
figures prominently in this income-oriented strategy. Issues bearing
large coupons provide not only an attractive current return but also
some protection from interest rate volatility. This insulating
quality becomes particularly valuable in the later stages of a
rising market. Given the Fund's potential for greater volatility as
a result of its use of leverage, we purchased these issues whenever
possible to seek to limit risk.
Leveraging continues to benefit Common Stock shareholders as the
municipal yield curve remains positively sloped. This allows the
Fund to generate an incrementally greater yield over what would
otherwise be available with conventional long-term tax-exempt
securities. However, should the spread between short-term and long-
term interest rates narrow, the benefits of leverage will diminish,
and the yield on the Fund's Common Stock will be reduced. (For a
complete explanation of the benefits and risks of leveraging, see
the information provided below.)
<PAGE>
In terms of net assets, the Fund rose in value dramatically,
recouping much of what was lost in 1994 as well as demonstrating the
volatility inherent in this leveraged product. In terms of market
price, the change is even more notable as these positive returns
were accentuated by a marked narrowing in the discount to net asset
value.
Looking ahead, we have grown somewhat cautious regarding the
market's wholesale acceptance of the successfully engineered soft
landing for the economy. Signs of renewed economic momentum may be
forthcoming and, to the extent that the implications may prove
troublesome for fixed-income markets, a more defensive approach may
by warranted in the months ahead.
In Conclusion
We appreciate your ongoing interest in MuniYield Quality Fund, Inc.,
and we look forward to serving your investment needs and objectives
in the months and years to come.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Vincent R. Giordano)
Vincent R. Giordano
Vice President and Portfolio Manager
June 5, 1995
<PAGE>
THE BENEFITS AND RISKS OF LEVERAGING
MuniYield Quality 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 pick-up on the
Common Stock will be reduced or eliminated completely. At the same
time, the market value on 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.
<PAGE>
PORTFOLIO ABBREVIATIONS
To simplify the listings of MuniYield Quality 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)
CP Commercial Paper
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
IDB Industrial Development Board
M/F Multi-Family
PCR Pollution Control Revenue Bonds
RIB Residual Interest Bonds
S/F Single-Family
TAN Tax Anticipation Notes
TRAN Tax Revenue Anticipation Notes
UT Unlimited Tax
VRDN Variable Rate Demand Notes
<TABLE>
SCHEDULE OF INVESTMENTS (in Thousands)
<CAPTION>
S&P Moody's Face Value
State Ratings Ratings Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
Alabama--0.6% BBB Baa1 $ 3,640 Courtland, Alabama, IDB, Solid Waste Disposal Revenue
Bonds (Champion International Corporation Project),
AMT, 7% due 6/01/2022 $ 3,686
Alaska--1.7% A- A 5,000 Alaska Industrial Development and Export Authority Revenue
Bonds (Revolving Fund), AMT, Series A, 6.50% due 4/01/2014 4,957
NR* NR* 6,000 Valdez, Alaska, Marine Terminal Revenue Refunding Bonds
(Amerada Hess Pipeline Corporation), 6.10% due 2/01/2024 5,396
Arizona--1.7% SP-1 MIG2 5,700 Maricopa County, Arizona, CP, TAN, UT, 5% due 7/28/1995 5,708
A1+ VMIG1++ 500 Maricopa County, Arizona, IDA, Hospital Facility Revenue Bonds
(Samaritan Health Service Hospital),VRDN, Series B-2,
4.90% due 12/01/2008 (a)(c) 500
A1+ VMIG1++ 3,600 Phoenix, Arizona, UT, VRDN, Series 1, 4.90% due 6/01/2018(a) 3,600
AA P1 700 Pinal County, Arizona, IDA, PCR (Magma Copper/Newmont
Mining Corporation), VRDN, 5% due 12/01/2009 (a) 700
Arkansas--0.4% AAA NR* 2,525 Arkansas State Development Finance Authority, S/F
Mortgage Revenue Bonds, AMT, Series A, 7.30% due
3/01/2013(h) 2,668
<PAGE>
California-- California State, Public Works Board, Lease Revenue
3.0% Bonds, Series A:
A- A 6,800 (Department of Corrections--Monterey County), 7%
due 11/01/2019 7,151
AAA Aaa 7,000 (Various Universities of California Projects), 6.60%
due 12/01/2002(i) 7,745
AAA Aaa 5,000 Southern California Public Power Authority, Power Project Revenue
Bonds (San Juan Unit 3), Series A, 5% due 1/01/2020(c) 4,235
Colorado--5.5% Colorado Health Facilities Authority, Hospital Revenue Bonds:
BBB+ Baa1 1,350 (P/SL Healthcare System Project), Series A, 6.875% due
2/15/2023 1,299
BBB- NR* 750 Refunding (National Jewish Center Immunization Project),
7.10% due 2/15/2022 726
BBB+ Baa1 4,550 (Swedish Medical Center Project), Series A, 6.80%
due 1/01/2023 4,338
NR* Aa 4,500 Colorado HFA, S/F Program, AMT, Series B-1, 7.90% due
12/01/2025 4,929
Denver, Colorado, City and County Airport Revenue Bonds, AMT:
BB Baa 10,000 Series B, 7.25% due 11/15/2023 9,999
BB Baa 5,000 Series D, 7.75% due 11/15/2013 5,463
BB Baa 7,250 Series D, 7.75% due 11/15/2021 7,566
</TABLE>
<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>
Connecticut-- A1 VMIG1++ $ 2,500 Connecticut State Economic Recovery Notes, VRDN, Series B,
0.4% 4.75% due 6/01/1996 (a) $ 2,500
Florida--4.1% NR* VMIG1++ 3,700 Atlantic Beach, Florida, Revenue Refunding and
Improvement Bonds (Fleet Landing), VRDN, Series B,
5.25% due 10/01/2024 (a) 3,700
A+ VMIG1++ 7,800 Dade County, Florida, IDA, Exempt Facilities Revenue
Refunding Bonds (Florida Power & Light Co.), VRDN,
4.90% due 6/01/2021 (a) 7,800
A1+ VMIG1++ 1,400 Hillsborough County, Florida, IDA, PCR, Refunding (Tampa
Electric Company), VRDN, 5% due 5/15/2018(a) 1,400
A1 VMIG1++ 1,000 Manatee County, Florida, PCR, Refunding (Florida Power
& Lighting Co. Project), VRDN, 5.25% due 9/01/2024 (a) 1,000
A+ A1 5,000 Orange County, Florida, Sales Tax Revenue Bonds, Series B,
5.375% due 1/01/2024 4,474
NR* Baa 3,405 Palm Bay, Florida, Lease Revenue Refunding Bonds
(Florida Education & Research Foundation Project), Series A,
<PAGE> 7% due 9/01/2024 3,367
NR* VMIG1++ 800 Palm Beach County, Florida, Water and Sewer Revenue Bonds,
VRDN, 5% due 10/01/2011 (a) 800
A1 VMIG1++ 400 Pinellas County, Florida, Health Facilities Authority, Revenue
Refunding Bonds (Pooled Hospital Loan Program), DATES, 5%
due 12/01/2015 (a) 400
BBB+ A 3,500 Saint John's County, Florida, IDA, Hospital Revenue
Bonds (Flagler Hospital Project), 6% due 8/01/2022 3,282
Georgia--2.2% AA+ Aa 8,515 Georgia State HFA, S/F Mortgage Revenue Bonds, AMT, Sub-Series
A-2, 6.55% due 12/01/2027 8,446
A+ A3 4,785 Monroe County, Georgia, Development Authority, PCR, Refunding
(Oglethorpe Power Scherer), Series A, 6.80% due 1/01/2011 5,099
Illinois--8.7% AAA Aaa 17,000 Chicago, Illinois, Metropolitan Housing Development Corporation,
Mortgage Revenue Refunding Bonds (Housing Development),
Series A, 6.85% due 7/01/2022 (b)(f) 17,487
BBB Baa2 21,000 Illinois Development Finance Authority, PCR, Refunding
(Illinois Power Company Project), Series A, 7.375% due 7/01/2021 22,047
A+ A1 7,500 Illinois HDA, M/F Program Bonds, Series 5, 6.75% due 9/01/2023 7,517
Illinois Health Facilities Authority Revenue Bonds (Mercy
Center for Health Care Services):
NR* A 1,300 6.625% due 10/01/2012 1,291
NR* A 2,330 6.65% due 10/01/2022 2,284
NR* A 3,750 Illinois Student Assistance Commission, Student Loan Revenue
Bonds, AMT, Sub-Series CC, 6.875% due 3/01/2015 3,775
Indiana--5.2% De Kalb County, Indiana, Redevelopment Authority (Mini-Mill
Local Public Improvement Project), Series A:
A NR* 3,000 6.50% due 1/15/2014 2,949
A NR* 3,220 6.625% due 1/15/2017 3,174
A NR* 2,500 Indiana Bond Bank, Revenue Guarantee (State Revolving Fund
Program), Series A, 6.875% due 2/01/2012 2,646
BBB Baa2 7,800 Indianapolis, Indiana, Airport Authority, Special
Facilities Revenue Bonds (Federal Express Corporation
Project), AMT, 7.10% due 1/15/2017 7,962
A+ NR* 15,000 Indianapolis, Indiana, Local Public Improvement Bond
Bank, Revenue Refunding Bonds, Series D, 6.75% due
2/01/2020 15,375
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<CAPTION>
S&P Moody's Face Value
State Ratings Ratings Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
Iowa--0.7% NR* A $ 4,070 Iowa Student Loan Liquidity Corporation, Student Loan
Revenue Bonds (Iowa Partnership), AMT, 6.60% due 7/01/2008 $ 4,202
<PAGE>
Kansas--0.7% AAA Aaa 4,000 Kansas City, Kansas, Utility System Revenue Refunding
and Improvement Bonds, 6.375% due 9/01/2023 (e) 4,089
Kentucky--4.3% NR* Baa1 5,000 Ashland, Kentucky, PCR, Refunding (Ashland Oil
Incorporated Project), 6.65% due 8/01/2009 5,051
AAA Aaa 5,000 Kentucky Housing Corporation Revenue Bonds, AMT,
Series B, 6.625% due 7/01/2026 (f) 5,013
AAA Aaa 6,570 Lexington-Fayette Urban County Government, Kentucky,
Governmental Project, Revenue Bonds (University of Kentucky
Alumni Association Inc. Project), 6.75% due 11/01/2020 (c) 7,015
NR* NR* 5,250 Perry County, Kentucky, Solid Waste Disposal Revenue Bonds
(TJ International Project), AMT, 7% due 6/01/2024 5,135
AA Aa2 5,000 Trimble County, Kentucky, PCR (Louisville Gas & Electric
Company), AMT, Series B, 6.55% due 11/01/2020 5,076
Louisiana--2.2% NR* Baa3 11,115 Lake Charles, Louisiana, Harbor and Terminal District,
Port Facilities Revenue Refunding Bonds (Trunkline Long
Company Project), 7.75% due 8/15/2022 11,963
BBB Baa2 2,000 Saint Charles Parish, Louisiana, Solid Waste Disposal Revenue
Bonds (Louisiana Power and Light Company Project), AMT,
Series A, 7% due 12/01/2022 2,004
Maine--1.0% BBB Baa1 6,380 Bucksport, Maine, Solid Waste Disposal Revenue Bonds
(Champion International Corporation Project), 6.25% due
5/01/2010 6,276
Maryland--0.5% AAA Aaa 1,315 Maryland State Health and Higher Educational Facilities
Authority, Revenue Refunding Bonds (Peninsula
Regional Medical Center Project), 5% due 7/01/2023 (c) 1,109
NR* VMIG1++ 100 Maryland State Health and Higher Educational Facilities
Authority Revenue Bonds (Pooled Loan Program), VRDN,
Series A, 4.50% due 4/01/2035 (a) 100
NR* Aaa 1,950 Prince Georges County, Maryland, Hospital Revenue Bonds
(Dimensions Health Corporation), 7% due 7/01/2002 (i) 2,196
Massachusetts-- Massachusetts Bay Transportation Authority, General
6.2% Transportation Systems, Revenue Refunding Bonds, Series A:
A+ A1 3,730 7% due 3/01/2011 4,116
A+ A1 3,550 7% due 3/01/2014 3,926
NR* Aaa 1,045 Massachusetts Municipal Wholesale Electric Company,
Power Supply System Revenue Bonds, Series B, 6.75% due
7/01/2002 (i) 1,161
Massachusetts State Health and Educational Facilities
Authority Revenue Bonds:
A A1 3,595 (Brigham & Women's Hospital), Series C, 7% due
6/01/2018 3,733
BBB Baa1 10,500 (Sisters of Providence Health System), Series A, 6.625% due
11/15/2022 9,721
AAA Aaa 3,000 Massachusetts State HFA, Residential Development, Series D,
6.80% due 11/15/2012 (j) 3,100
Massachusetts State HFA, S/F Housing Revenue Bonds:
A+ Aa 4,090 Series 33, 6.35% due 6/01/2017 4,061
A+ Aa 3,035 Series 37, 6.35% due 6/01/2017 3,013
AAA Aaa 5,000 Massachusetts State Water Resources Authority, Series A,
6.50% due 12/01/2001 (i) 5,474
</TABLE>
<PAGE>
<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>
Michigan--3.2% BBB Baa1 $11,150 Dickinson County, Michigan, Economic Development
Corporation, PCR, Refunding (Champion International
Corporation Project), 5.85% due 10/01/2018 $ 10,208
A1+ VMIG1++ 400 Grand Rapids, Michigan, Water Supply Systems, Revenue
Refunding Bonds, VRDN, 5.25% due 1/01/2020 (a)(e) 400
A- A 4,375 Michigan State Hospital Finance Authority, Revenue Refunding
Bonds (Detroit Medical Center Obligation Group), Series A,
6.50% due 8/15/2018 4,282
AA Aa 5,000 Royal Oak, Michigan, Hospital Finance Authority Revenue Bonds
(William Beaumont Hospital), Series D, 6.75% due 1/01/2020 5,129
Mississippi-- NR* P1 300 Jackson County, Mississippi, PCR, Refunding (Chevron USA, Inc.
0.1% Project), VRDN, 4.80% due 12/01/2016 (a) 300
NR* P1 700 Perry County, Mississippi, PCR, Refunding (Leaf River Forest
Project), VRDN, 4.85% due 3/01/2002 (a) 700
Missouri--0.6% AA- Aa3 4,000 Saint Louis, Missouri, Parking Facility Revenue Bonds, 6.625%
due 12/15/2021 4,069
Nevada--0.2% BBB+ NR* 1,000 Las Vegas, Nevada, Downtown Redevelopment Agency,
Tax Increment Revenue Bonds (Housing Project), Sub-Lien,
Series B, 6.10% due 6/15/2014 964
New Hampshire-- NR* Baa1 4,290 New Hampshire Higher Educational and Health Facilities Authority,
0.6% Revenue Refunding Bonds (Saint Anselm College), 6.20% due
7/01/2013 4,019
New Jersey-- AA- Aa 5,000 Ocean County, New Jersey, Utilities Authority, Wastewater
0.8% Revenue Refunding Bonds, Series A, 5.75% due 1/01/2018 4,834
New Mexico-- A A3 5,000 Lordsburg, New Mexico, PCR, Refunding (Phelps Dodge
0.8% Corporate Project), 6.50% due 4/01/2013 5,062
<PAGE>
New York--5.7% New York City, New York, GO, UT:
AAA Aaa 1,000 Refunding, Series C, 6% due 8/01/2012 (b) 991
A- Baa1 5,000 Series A, 7.75% due 8/15/2017 5,411
BBB+ Baa1 3,250 New York State Dormitory Authority, Educational Facilities
Revenue Bonds (State University), Series B, 5.75%
due 5/15/2024 2,945
A Aa 2,500 New York State Environmental Facilities Corporation, PCR
(State Water Revolving Fund), Series E, 6.50% due 6/15/2014 2,607
New York State Local Government Assistance Corporation
Revenue Bonds:
A A 6,250 Refunding, Series C, 5% due 4/01/2021 5,225
A A 13,450 Series A, 6.50% due 4/01/2020 13,699
BBB Baa1 5,000 New York State Urban Development Corporation, Revenue
Refunding Bonds (Correctional Capital Facilities), 5.75% due
1/01/2013 4,609
North Carolina A A2 9,500 Martin County, North Carolina, Industrial Facilities and
- --1.4% Pollution Control Financing Authority Revenue Bonds (Solid
Waste-Weyerhaeuser Company), AMT, 5.65% due 12/01/2023 8,445
Ohio--2.4% AA- Aa3 10,000 Ohio State Air Quality Development Authority, Revenue Refunding
Bonds (Coll-Dayton Power & Light Project), Series B, 6.40%
due 8/15/2027 10,117
AA- A1 5,000 Ohio State Turnpike Commission, Turnpike Revenue Bonds,
Series A, 5.75% due 2/15/2024 4,783
</TABLE>
<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>
Pennsylvania-- NR* A $ 1,450 Allegheny County, Pennsylvania, Hospital Development Authority,
2.7% Revenue Refunding Bonds (Health Facilities--South Hills
Health), 6% due 5/01/2020 $ 1,336
AA- A1 8,485 Pennsylvania State University, Second Refunding, 5.50% due
8/15/2016 7,939
A- Baa1 7,750 Philadelphia, Pennsylvania, Hospitals and Higher Education
Facilities Authority, Hospital Revenue Refunding Bonds (Temple
University Hospital), Series A, 6.625% due 11/15/2023 7,561
South Carolina A A1 12,000 Fairfield County, South Carolina, PCR (South Carolina
- --6.4% Electric and Gas Company), 6.50% due 9/01/2014 12,278
A- A1 8,000 Richland County, South Carolina, Solid Waste Disposal Facilities
Revenue Bonds (Union Camp Corporation Project), AMT, Series A,
6.75% due 5/01/2022 8,129
BBB- Baa 5,000 South Carolina Jobs, EDA, Economic Development Revenue Bonds
(Saint Francis Hospital--Franciscan Sisters), 7% due 7/01/2015 4,909
AAA Aaa 9,500 South Carolina State Public Service Authority Revenue Bonds
(Santee Cooper), Series D, 6.625% due 7/01/2002 (i) 10,487
NR* NR* 3,800 Spartanburg County, South Carolina, Solid Waste Disposal
Facilities Revenue Bonds (BMW Project), AMT, 7.55% due 11/01/2024 4,012
<PAGE>
South Dakota-- AA+ Aa1 5,500 South Dakota, HDA, Homeownership Mortgage Revenue Refunding
0.9% Bonds, Series A, 6.45% due 5/01/2022 5,493
Tennessee--0.4% BBB- Baa1 2,500 McMinn County, Tennessee, IDB, Solid Waste Revenue Bonds
(Recycling Facility--Calhoun Newsprint--Bowater), AMT, 7.40%
due 12/01/2022 2,576
Texas--9.0% BB+ Baa2 5,000 Alliance Airport Authority Incorporated, Texas, Special
Facilities Revenue Bonds (American Airlines Incorporated
Project), AMT, 7.50% due 12/01/2029 5,098
NR* Aaa 1,000 Bell County, Texas, Health Facilities Development Corporation
Revenue Bonds (Lutheran General Health Care System--Parkside
Medical Services Corporation), 6.50% due 7/01/2019 (k) 1,093
BBB Baa1 1,840 Gulf Coast Waste Disposal Authority, Texas, Revenue Bonds
(Champion International Corporation), AMT, 7.45% due 5/01/2026 1,933
A- A 5,000 Harris County, Texas, Health Facilities Development Corporation,
Hospital Revenue Bonds (Memorial Hospital Systems Project),
Series A, 6.60% due 6/01/2014 5,011
AA+ Aa 5,000 Harris County, Texas, Toll Road Sub-Lien, Revenue Refunding
Bonds, UT, 6.75% due 8/01/2014 5,324
NR* VMIG1++ 1,500 Port Arthur, Texas, Navigational District, PCR, Refunding
(Texaco Inc. Project), VRDN, 5% due 10/01/2024 (a) 1,500
AA Aa1 4,655 San Antonio, Texas, Electric and Gas Revenue Refunding Bonds,
Series A, 6.50% due 2/01/2012 4,795
NR* VMIG1++ 2,900 Southwest Texas, Higher Education Authority Incorporated,
Revenue Refunding Bonds (Southern Methodist University),
VRDN, 4.90% due 7/01/2015 (a) 2,900
A+ Aa 9,415 Texas Housing Agency, Residential Development Mortgage Revenue
Bonds, Series A, 7.50% due 7/01/2015 (h) 9,845
SP1+ MIG1++ 13,500 Texas State, CP, TRAN, UT, 5% due 8/31/1995 13,533
AA Aa 4,000 Texas State, Registered RIB, UT, Series B-1 and B-2, 7.573% due
9/30/2011 (g) 4,325
</TABLE>
<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>
Utah--2.4% AA Aa $15,000 Salt Lake City, Utah, Hospital Revenue Refunding Bonds (IHC
Hospitals Incorporated), 6.30% due 2/15/2015 $ 14,981
<PAGE>
Vermont--0.4% AAA Aaa 2,500 Vermont State Student Assistance Corporation, Educational
Loan Revenue Bonds (Financing Program), AMT, Series B, 6.70%
due 12/15/2012 (d) 2,574
Virginia--6.7% AA Aa 5,000 Hampton Roads Sanitation District, Virginia, Wastewater, Revenue
Refunding Bonds, Capital Improvement, 5% due 10/01/2023 4,208
Virginia State HDA, Commonwealth Mortgage Revenue Bonds:
AA+ Aa1 22,000 Series A, 7.15% due 1/01/2033 22,611
AA+ Aa1 5,000 Series B and Sub-Series B-1, 6.875% due 7/01/2011 5,257
AA Aa 10,000 Virginia State, Transportation Board, Transportation Contract
Revenue Refunding Bonds (Route 28 Project), 6.50% due 4/01/2018 10,306
Washington-- AA Aaa 6,250 Lewis County, Washington, Public Utility Revenue Bonds, District
3.5% No. 001 (Cowlitz Falls Hydroelectric Project), 7% due
10/01/2001 (i) 6,998
AA Aa 15,000 Washington State Public Power Supply System, Revenue Refunding
Bonds (Nuclear Project No. 2), Series A, 6.30% due 7/01/2012 14,882
West Virginia-- BBB+ A3 5,600 Putnam County, West Virginia, PCR, Refunding (Appalachian
0.9% Power Company Project), Series C, 6.60% due 7/01/2019 5,641
Wisconsin--0.8% A A1 3,800 Wisconsin Housing and EDA, Housing Revenue Bonds, AMT,
Series D, 7.20% due 11/01/2013 3,970
NR* A 1,100 Wisconsin State Health and Educational Facilities Authority
Revenue Bonds (Mercy Hospital of Janesville Incorporated),
6.60% due 8/15/2022 1,107
Puerto Rico-- A1+ VMIG1++ 700 Puerto Rico Commonwealth, Government Development Bank
0.1% Revenue Refunding Bonds, VRDN, 4.55% due 12/01/2015 (a) 700
Total Investments (Cost--$611,074 )--99.1% 619,086
Other Assets Less Liabilities--0.9% 5,684
--------
Net Assets--100.0% $624,770
========
<FN>
(a)The interest rate is subject to change periodically based upon
prevailing market rates. The interest rate shown is the rate in
effect at April 30, 1995.
(b)AMBAC Insured.
(c)MBIA Insured.
(d)FSA Insured.
(e)FGIC Insured.
(f)FHA Insured.
(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, 1995.
(h)GNMA Collateralized.
(i)Prerefunded.
(j)FNMA Collateralized.
(k)Escrowed to Maturity.
++Highest short-term rating by Moody's Investors Service, Inc.
*Not Rated.
See Notes to Financial Statements.
</TABLE>
<PAGE>
FINANCIAL INFORMATION
<TABLE>
Statement of Assets, Liabilities and Capital as of April 30, 1995
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$611,073,734) (Note 1a) $619,086,247
Cash 87,348
Interest receivable 11,596,146
Deferred organization expenses (Note 1e) 20,019
Prepaid expenses and other assets 117,405
------------
Total assets 630,907,165
------------
Liabilities: Payables:
Securities purchased $ 4,910,625
Dividends to shareholders (Note 1f) 870,709
Investment adviser (Note 2) 242,387 6,023,721
------------
Accrued expenses and other liabilities 113,653
------------
Total liabilities 6,137,374
------------
Net Assets: Net assets $624,769,791
============
Capital: Capital Stock (200,000,000 shares authorized) (Note 4):
Preferred Stock, par value $.10 per share (8,000 shares
of AMPS* issued and outstanding at $25,000 per share
liquidation preference) $200,000,000
Common Stock, par value $.10 per share (30,425,258 shares
issued and outstanding) $ 3,042,526
Paid-in capital in excess of par 423,867,420
Undistributed investment income--net 3,382,290
Accumulated realized capital losses on investments--net (13,534,958)
Unrealized appreciation on investments--net 8,012,513
------------
Total--Equivalent to $13.96 net asset value per share of
Common Stock (market price--$12.125) 424,769,791
------------
Total capital $624,769,791
============
<FN>
*Auction Market Preferred Stock.
<PAGE>
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (continued)
<TABLE>
Statement of Operations
<CAPTION>
For the Six Months Ended
April 30, 1995
<S> <S> <C> <C>
Investment Income Interest and amortization of premium and discount earned $19,424,686
(Note 1d):
Expenses: Investment advisory fees (Note 2) $ 1,489,648
Commission fees (Note 4) 253,225
Transfer agent fees 56,918
Accounting services (Note 2) 41,359
Professional fees 38,602
Printing and shareholder reports 32,890
Custodian fees 15,657
Amortization of organization expenses (Note 1e) 14,279
Listing fees 13,343
Directors' fees and expenses 11,177
Pricing fees 7,533
Other 7,385
-----------
Total expenses 1,982,016
-----------
Investment income--net 17,442,670
-----------
Realized & Realized loss on investments--net (13,456,072)
Unrealized Gain Change in unrealized appreciation/depreciation on investments--net 38,855,289
(Loss) on -----------
Investments--Net Net Increase in Net Assets Resulting from Operations $42,841,887
(Notes 1b, 1d & 3): ===========
</TABLE>
<PAGE>
<TABLE>
Statements of Changes in Net Assets
<CAPTION>
For the Six For the
Months Ended Year Ended
Increase (Decrease) in Net Assets: April 30, 1995 Oct. 31, 1994
<S> <S> <C> <C>
Operations: Investment income--net $ 17,442,670 $ 35,664,322
Realized gain (loss) on investments--net (13,456,072) 582,012
Change in unrealized appreciation/depreciation on
investments--net 38,855,289 (79,089,878)
------------ ------------
Net increase (decrease) in net assets resulting from operations 42,841,887 (42,843,544)
------------ ------------
Dividends & Investment income--net:
Distributions to Common Stock (14,137,583) (29,359,370)
Shareholders Preferred Stock (3,660,730) (4,942,790)
(Note 1f): Realized gain on investments--net:
Common Stock (569,287) (6,545,051)
Preferred Stock (91,580) (1,298,020)
------------ ------------
Net decrease in net assets resulting from dividends and
distributions to shareholders (18,459,180) (42,145,231)
------------ ------------
Net Assets: Total increase (decrease) in net assets 24,382,707 (84,988,775)
Beginning of period 600,387,084 685,375,859
------------ ------------
End of period* $624,769,791 $600,387,084
============ ============
<FN>
*Undistributed investment income--net $ 3,382,290 $ 3,737,933
============ ============
See Notes to Financial Statements.
</TABLE>
<PAGE>
FINANCIAL INFORMATION (concluded)
<TABLE>
Financial Highlights
<CAPTION>
For the
For the Period
The following per share data and ratios have been derived Six Months June 26,
from information provided in the financial statements. Ended For the Year Ended 1992++ to
April 30, October 31, Oct. 31,
Increase (Decrease) in Net Asset Value: 1995 1994 1993 1992
<S> <S> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 13.16 $ 15.95 $ 13.38 $ 14.18
Operating -------- -------- -------- --------
Performance: Investment income--net .57 1.16 1.18 .32
Realized and unrealized gain (loss) on
investments--net .83 (2.57) 2.58 (.75)
-------- -------- -------- --------
Total from investment operations 1.40 (1.41) 3.76 (.43)
-------- -------- -------- --------
Less dividends and distributions to Common
Stock shareholders:
Investment income--net (.46) (.96) (.99) (.20)
Realized gain on investments--net (.02) (.22) -- --
-------- -------- -------- --------
Total dividends and distributions to Common Stock
shareholders (.48) (1.18) (.99) (.20)
-------- -------- -------- --------
Capital charge resulting from issuance of
Common Stock -- -- -- (.01)
-------- -------- -------- --------
Effect of Preferred Stock activity:++++
Dividends and distributions to Preferred
Stock shareholders:
Investment income--net (.12) (.16) (.20) (.03)
Realized gain on investments--net --+++++ (.04) -- --
Capital charge resulting from issuance of
Preferred Stock -- -- -- (.13)
-------- -------- -------- --------
Total effect of Preferred Stock activity (.12) (.20) (.20) (.16)
-------- -------- -------- --------
Net asset value, end of period $ 13.96 $ 13.16 $ 15.95 $ 13.38
======== ======== ======== ========
Market price per share, end of period $ 12.125 $ 11.00 $ 15.25 $ 13.625
======== ======== ======== ========
Total Investment Based on market price per share 14.70%+++ (21.32%) 19.68% (7.83%)+++
Return:** ======== ======== ======== ========
Based on net asset value per share 10.39%+++ (10.00%) 27.46% (4.25%)+++
======== ======== ======== ========
<PAGE>
Ratios to Average Expenses, net of reimbursement .67%* .66% .60% .14%*
Net Assets:*** ======== ======== ======== ========
Expenses .67%* .66% .61% .59%*
======== ======== ======== ========
Investment income--net 5.87%* 5.50% 5.52% 5.71%*
======== ======== ======== ========
Supplemental Net assets, net of Preferred Stock, end of period
Data: (in thousands) $424,770 $400,387 $485,376 $403,538
======== ======== ======== ========
Preferred Stock outstanding, end of period
(in thousands) $200,000 $200,000 $200,000 $200,000
======== ======== ======== ========
Portfolio turnover 22.08% 42.31% 66.14% 10.12%
======== ======== ======== ========
Dividends Per Series A--Investment income--net $ 510 $ 571 $ 713 $ 94
Share on Series B--Investment income--net 432 627 685 97
Preferred Stock Series C--Investment income--net 452 577 747 100
Outstanding:++++++ Series D--Investment income--net 437 698 832 103
<FN>
*Annualized.
**Total investment returns based on market value, which can be
significantly greater or lesser than the net asset value,may result
in substantially different returns. Total investment returns exclude
the effects of sales loads.
***Do not reflect the effect of dividends to Preferred Stock
shareholders.
++Commencement of Operations.
++++The Fund's Preferred Stock was issued on September 16, 1992.
++++++Dividends per share have been adjusted to reflect a two-for-
one stock split.
+++Aggregate total investment return.
+++++Amount is less than $.01 per share.
See Notes to Financial Statements.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
MuniYield Quality Fund, Inc. (the "Fund") is registered under the
Investment Company Act of 1940 as a non-diversified, closed-end
management investment company. These unaudited financial statements
reflect all adjustments which are, in the opinion of management,
necessary to a fair statement of the results for the interim period
presented. All such adjustments are of a normal recurring nature.
The Fund determines and makes available for publication the net
asset value of its Common Stock on a weekly basis. The Fund's Common
Stock is listed on the New York Stock Exchange under the symbol MQY.
The following is a summary of significant accounting policies
followed by the Fund.
<PAGE>
(a) Valuation of investments--Municipal bonds are traded primarily
in the over-the-counter markets and are valued at the most recent
bid price or yield equivalent as obtained by the Fund's pricing
service from dealers that make markets in such securities. Financial
futures contracts and options thereon, which are traded on
exchanges, are valued at their closing prices as of the close of
such exchanges. Options, which are traded on exchanges, are valued
at their last sale price as of the close of such exchanges or,
lacking any sales, at the last available bid price. Securities with
remaining maturities of sixty days or less are valued at amortized
cost, which approximates market value. Securities for which market
quotations are not readily available are valued at their fair value
as determined in good faith by or under the direction of the Board
of Directors of the Fund.
(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
interest rate 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.
<PAGE>
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 secu-rity transactions are
determined on the identified cost basis.
(e) Deferred organization expenses--Deferred organization expenses
are amortized on a straight-line basis over a five-year period.
NOTES TO FINANCIAL STATEMENTS (concluded)
(f) Dividends and distributions--Dividends from net investment
income are declared and paid monthly. Distributions of capital gains
are recorded on the ex-dividend dates.
2. Investment Advisory Agreement and
Transactions with Affiliates:
The Fund has entered into an Investment Advisory Agreement with Fund
Asset Management, L.P. ("FAM"). The general partner of FAM is
Princeton Services, Inc. ("PSI"), an indirect wholly-owned
subsidiary of Merrill Lynch & Co., Inc. ("ML & Co."), which is the
limited partner.
FAM is responsible for the management of the Fund's portfolio and
provides the necessary personnel, facilities, equipment and certain
other services necessary to the operations of the Fund. For such
services, the Fund pays a monthly fee at an annual rate of 0.50% of
the Fund's average weekly net assets.
<PAGE>
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, Merrill Lynch, Pierce, Fenner & Smith Inc.
("MLPF&S"), and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the six months ended April 30, 1995 were $124,395,322 and
$164,132,330, respectively.
Net realized and unrealized gains (losses) as of April 30, 1995 were
as follows:
Unrealized
Realized Gains
Losses (Losses)
Long-term investments $ (6,729,974) $ 8,023,040
Short-term investments -- (10,527)
Financial futures contracts (6,726,098) --
----------- -----------
Total $(13,456,072) $ 8,012,513
=========== ===========
As of April 30, 1995, net unrealized appreciation for Federal income
tax purposes aggregated $8,012,513, of which $12,895,989 related to
appreciated securities and $4,883,476 related to depreciated
securities. The aggregate cost of investments at April 30, 1995 for
Federal income tax purposes was $611,073,734.
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
For the six months ended April 30, 1995, shares issued and
outstanding remained constant at 30,425,258. At April 30, 1995,
total paid-in capital amounted to $426,909,946.
Preferred Stock
Auction Market Preferred Stock ("AMPS") are shares of Preferred
Stock of the Fund that entitle their holders to receive cash
dividends at an annual rate that may vary for the successive
dividend periods. The yields in effect at April 30, 1995 were as
follows: Series A, 4.03%; Series B, 4.22%; Series C, 4.05%; and
Series D, 4.475%.
<PAGE>
A two-for-one stock split occurred on December 1, 1994. As a result,
at April 30, 1995, there were 8,000 AMPS shares authorized, issued
and outstanding with a liquidation preference of $25,000 per share,
plus accumulated and unpaid dividends of $120,526.
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, 1995, MLPF&S, an affiliate of FAM, earned $127,493 as
commissions.
5. Subsequent Event:
On May 9, 1995, the Fund's Board of Directors declared an ordinary
income dividend to Common Stock shareholders in the amount of
$0.070671 per share, payable on May 30, 1995 to shareholders of
record as of May 19, 1995.
PER SHARE INFORMATION
<TABLE>
Per Share Selected Quarterly Financial Data*
<CAPTION>
Dividends/Distributions
Net Realized Unrealized
Investment Gains Gains Net Investment Income Capital Gains
For the Quarter Income (Losses) (Losses) Common Preferred Common Preferred
<S> <C> <C> <C> <C> <C> <C> <C>
May 1, 1993 to July 31, 1993 $.30 $ .08 $ .25 $.25 $.05 -- --
August 1, 1993 to October 31, 1993 .29 .10 .58 .25 .05 -- --
November 1, 1993 to January 31, 1994 .30 .03 .13 .25 .01 $.22 $.04
February 1, 1994 to April 30, 1994 .28 .07 (1.97) .24 .05 -- --
May 1, 1994 to July 31, 1994 .29 (.09) .33 .23 .05 -- --
August 1, 1994 to October 31, 1994 .29 .01 (1.08) .24 .05 -- --
November 1, 1994 to January 31, 1995 .30 (.28) .68 .24 .05 .02 --++
February 1, 1995 to April 30, 1995 .27 (.16) .59 .22 .07 -- --
<CAPTION>
Net Asset Value Market Price**
For the Quarter High Low High Low Volume***
<C> <C> <C> <C> <C>
May 1, 1993 to July 31, 1993 $15.46 $14.84 $15.125 $14.25 2,767
August 1, 1993 to October 31, 1993 16.17 15.29 15.75 14.875 4,395
November 1, 1993 to January 31, 1994 15.96 15.44 15.50 14.00 3,394
February 1, 1994 to April 30, 1994 15.85 13.48 15.375 12.50 2,781
May 1, 1994 to July 31, 1994 14.61 13.67 13.125 12.50 3,406
August 1, 1994 to October 31, 1994 14.25 13.16 12.875 10.875 4,978
November 1, 1994 to January 31, 1995 13.53 12.18 12.25 10.125 8,159
February 1, 1995 to April 30, 1995 14.25 13.54 12.75 12.125 2,805
<PAGE>
<FN>
*Calculations are based upon shares of Common Stock outstanding at
the end of each quarter.
**As reported in the consolidated transaction reporting system.
***In thousands.
++Amount is less than .01 per share.
</TABLE>
