MUNIYIELD
NEW JERSEY
INSURED
FUND, INC.
FUND LOGO
Annual Report
October 31, 1994
This report, including the financial information herein, is
transmitted to the shareholders of MuniYield New Jersey Insured
Fund, Inc. for their information. It is not a prospectus, circular
or representation intended for use in the purchase of shares of the
Fund or any securities mentioned in the report. Past performance
results shown in this report should not be considered a
representation of future performance. The Fund has leveraged its
Common Stock by issuing Preferred Stock to provide the Common Stock
shareholders with a potentially higher rate of return. Leverage
creates risks for Common Stock shareholders, including the
likelihood of greater volatility of net asset value and market price
of shares of the Common Stock, and the risk that fluctuations in the
short-term dividend rates of the Preferred Stock may affect the
yield to Common Stock shareholders.
MuniYield
New Jersey
Insured Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
<PAGE>
MuniYield New Jersey Insured Fund, Inc.
TO OUR SHAREHOLDERS
For the year ended October 31, 1994, the Common Stock of MuniYield
New Jersey Insured Fund, Inc. earned $0.959 per share income
dividends, which includes earned and unpaid dividends of $0.075.
This represents a net annualized yield of 7.05%, based on a month-
end net asset value of $13.60 per share. Over the same period, the
total investment return on the Fund's Common Stock was -10.73%,
based on a change in per share net asset value from $16.30 to
$13.60, and assuming reinvestment of $0.964 per share income
dividends.
For the six-month period ended October 31, 1994, the total
investment return on the Fund's Common Stock was -2.77%, based on a
change in per share net asset value from $14.48 to $13.60, and
assuming reinvestment of $0.460 per share income dividends.
For the six-month period ended October 31, 1994, the Fund's Auction
Market Preferred Stock had an average yield of 2.89%.
The Environment
As discussed in our last report to shareholders, the Federal Reserve
Board moved to counteract inflationary pressures by tightening
monetary policy. This trend continued during the May--October
period. Despite the series of preemptive strikes against inflation
by the central bank, concerns of increasing inflationary pressures
continued to prompt volatility in the US capital markets during the
period. In addition, the weakness of the US dollar in foreign
exchange markets prolonged stock and bond market declines.
Ongoing strength in the manufacturing sector and better-than-
expected economic results continue to fuel speculation that the
Federal Reserve Board will continue to raise short-term interest
rates in the months ahead. However, although consumer spending is
increasing, it is doing so at a lower rate than has been the case in
recent economic recoveries. In the weeks ahead, investors will
continue to assess economic data and inflationary trends in order to
gauge whether further increases in short-term interest rates are
imminent. Continued indications of moderate and sustainable levels
of economic growth would be positive for the US capital markets. At
the same time, greater US dollar stability in foreign exchange
markets would help to dampen expectations of significantly higher
short-term interest rates.
<PAGE>
The Municipal Market
The long-term tax-exempt market continued to erode throughout the
three months ended October 31, 1994. As measured by the Bond Buyer
Revenue Bond Index, yields on A-rated municipal revenue bonds
maturing in 30 years rose by almost 50 basis points (0.50%) to 6.95%
during the October 31, 1994 quarter. This represents the highest
level in tax-exempt bond yields in over two years. US Treasury bonds
suffered even greater declines during the quarter as Treasury bond
yields rose approximately 60 basis points to end the quarter at
8.00%.
The tax-exempt bond market reacted negatively throughout the October
quarter to indications that, despite a series of interest rate
increases by the Federal Reserve Board, the strength of the domestic
economy seen in recent quarters has not yet been significantly
reduced. While inflationary pressures have remained well contained,
additional Federal Reserve Board actions have been expected both to
ensure that domestic economic growth is eventually confined to
current levels and to assure nervous financial markets of its anti-
inflationary intentions.
Fortunately, while the demand for tax-exempt bonds has declined
somewhat in recent months, new bond issuance has remained greatly
reduced. During the quarter ended October 31, 1994, only $32 billion
in long-term tax-exempt securities were issued, a decline of over
50% versus the October 31, 1993 quarter. Similarly, for the six
months ended October 31, 1994, only $75 billion in municipal
securities were underwritten, a decline of over 50% versus the
comparable period a year earlier. This reduction in issuance in
recent quarters has allowed the municipal bond market to react to
both the decline in investor demand and the rise in fixed-income
yields in a more orderly fashion than in similar situations in the
past, particularly during 1987.
Long-term tax-exempt revenue bonds currently yield approximately 7%,
or almost 11.5% on an after-tax equivalent basis, to an investor in
the 39.6% Federal income tax bracket. As inflation has only
marginally increased in the past year, real tax-exempt interest
rates have risen dramatically. The Federal Reserve Board appears
committed to maintaining inflation at or below its current levels.
Indeed, most forecasts expect inflation to remain in its present
range of 3%--4% throughout 1995 and, potentially, for the remainder
of the 1990s. Real after-tax equivalent interest rates exceeding 7%
represent historically attractive municipal investments for long-
term investors.
<PAGE>
Federal Reserve Board actions taken thus far have yet to fully
impact US domestic growth and expected additional actions should
promote only a modest economic expansion within a benign
inflationary context beginning sometime early in 1995. Within such
an environment, it is unlikely that tax-exempt interest rates will
remain at their current attractive levels. Tax-exempt bond issuance
is unlikely to return to the historic high levels seen in 1992 and
1993, while investor demand should return as markets stabilize. As
we have discussed in earlier reports, the total number of tax-exempt
bonds outstanding is scheduled to decline dramatically in 1994 and
1995 as a result of both regular bond maturities and early
redemptions. Investors seeking tax-advantaged issues are likely to
find it very difficult to obtain currently available tax-exempt
yields as the current supply/demand balance is unlikely to be
maintained in the coming quarters.
Portfolio Strategy
During the past 12 months, the municipal bond market was extremely
volatile. As measured by the Bond Buyer Revenue Bond Index, long-
term tax-exempt bond yields ranged from a low of 5.50% on January
31, 1994 to a high of 6.95% on October 28, 1994. At fiscal year-end
October 31, 1994, the Index was at its peak for the period and
reached its highest level in nearly two and one-half years. The
change in direction of long-term interest rates occurred because the
US economy heated up during the fourth quarter of 1993 and generated
momentum which carried forward throughout 1994. This led the Federal
Reserve Board to tighten monetary policy in February, in an attempt
to prevent an increase in inflationary pressures on the economy.
Prices of long-term fixed-income securities fell sharply in response
to the rapidly changing investment climate.
MuniYield New Jersey Insured Fund, Inc. altered its portfolio
strategy during the 12 months as investor psychology changed. We
entered the year with the Fund fully invested and took advantage of
the decline in interest rates through the start of 1994. As evidence
of a booming economy emerged early in 1994, however, we became
cautious on the market. Our strategy centered on raising cash
reserves to approximately 10% of net assets and restructuring the
portfolio's holdings to include a greater percentage of defensive
bonds. This entailed selling discount coupons and buying higher-
coupon bonds which are priced to call. As a result, we were able to
mute some of the Fund's volatility that occurred during this very
difficult period.
In Conclusion
We appreciate your ongoing interest in MuniYield New Jersey Insured
Fund, Inc., and we look forward to assisting you with your financial
needs in the months and years to come.
<PAGE>
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Vincent R. Giordano)
Vincent R. Giordano
Vice President and Portfolio Manager
December 7, 1994
THE BENEFITS AND RISKS OF LEVERAGING
MuniYield New Jersey 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.
<PAGE>
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. 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.
PORTFOLIO ABBREVIATIONS
To simplify the listings of MuniYield New Jersey 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.
ACES SM Adjustable Convertible Extendable Securities
AMT Alternative Minimum Tax (subject to)
COP Certificates of Participation
EDA Economic Development Authority
GO General Obligation Bonds
M/F Multi-Family
PCR Pollution Control Revenue Bonds
UT Unlimited Tax
VRDN Variable Rate Demand Notes
<TABLE>
SCHEDULE OF INVESTMENTS (in Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
New Jersey--100.4%
<S> <S> <C> <S> <C>
Atlantic City, New Jersey, Board of Education, UT, GO (d):
AAA Aaa $ 4,600 6.15% due 12/01/2013 $ 4,449
AAA Aaa 4,600 6.15% due 12/01/2014 4,440
AAA Aaa 3,750 6.15% due 12/01/2015 3,567
<PAGE>
AAA Aaa 6,000 Bergen County, New Jersey, Utilities Authority, Water PCR, Series A, 6.50% due
12/15/2012 (b) 6,000
AAA Aaa 5,000 Cape May County, New Jersey, Municipal Utilities Authority Refunding Bonds,
Series A, 6% due 1/01/2011 (c) 4,819
AAA Aaa 3,010 Carteret, New Jersey, Board of Education, COP, GO, 6.75% due 10/15/2019 (c) 3,049
AAA Aaa 2,800 Essex County, New Jersey, Improvement Authority Revenue Bonds (Irvington Township
School District), 6.625% due 10/01/2002 (f)(g) 2,999
AAA Aaa 8,130 Hoboken, Union City, Weehawken, New Jersey, Sewer Authority, Revenue Refunding
Bonds, 6.20% due 8/01/2019 (c) 7,660
A+ NR* 2,600 Hudson County, New Jersey, Improvement Authority, Essential Purpose Revenue Bonds,
6.625% due 8/01/2025 2,512
AAA Aaa 11,105 Hudson County, New Jersey, Refunding Bonds (Correctional Facilities), COP, 6.60%
due 12/01/2021 (c) 10,952
AAA Aaa 8,000 Mercer County, New Jersey, Improvement Authority, Revenue Refunding Bonds
(Solid Waste Resource Recovery Program), AMT, Series A, 6.70% due 4/01/2013 (b) 8,060
NR* NR* 5,750 Middlesex County, New Jersey, Pollution Control Authority, Revenue Refunding
Bonds, 6.875% due 12/01/2022 5,566
NR* NR* 200 Monmouth County, New Jersey, Improvement Authority Revenue Bonds (Pooled
Government Loan Program), ACES, 3.25% due 8/01/2016 (a) 200
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
New Jersey (continued)
<S> <S> <C> <S> <C>
New Jersey, EDA, Dock Facility Revenue Refunding Bonds (Bayonne International
Matex Tank Terminal Project), VRDN, Series A (a):
NR* VMIG1 $ 500 3.55% due 12/01/2027 $ 500
NR* VMIG1 1,100 3.60% due 12/01/2027 1,100
NR* P1 300 New Jersey, EDA, Economic Development Revenue Refunding Bonds (Dow Chemicals--
El Dorado Term), VRDN, Series A, 3.60% due 5/01/2001 (a) 300
AAA Aaa 5,000 New Jersey, EDA, Natural Gas Facilities, Revenue Refunding Bonds (Nui Corp.),
Series A, 6.35% due 10/01/2022 (d) 4,732
<PAGE>
AAA Aaa 4,500 New Jersey, EDA, Revenue Bonds (State Contract Economic Recovery), Series A,
6% due 3/15/2021 (f) 4,086
AAA Aaa 2,835 New Jersey, EDA, Revenue Refunding Bonds (RWJ Health Care Corporation), 6.50%
due 7/01/2024 (f) 2,751
New Jersey Health Care Facilities Financing Authority Revenue Bonds:
AAA Aaa 1,495 (Bayshore Community Hospital), Series A, 6.50% due 7/01/2015 (c) 1,458
AAA Aaa 6,355 (Holy Name Hospital), Series B, 6.75% due 7/01/2020 (d) 6,339
AAA Aaa 5,475 (Mercer Medical Center), 6.50% due 7/01/2021 (c) 5,339
AAA Aaa 2,500 (Newark Beth Israel Medical Center), 6% due 7/01/2024 (f) 2,261
AAA Aaa 1,185 Refunding (Hackensack Medical Center), 6.625% due 7/01/2017 (b) 1,177
AAA Aaa 4,000 Refunding (JFK Health Systems), 6.70% due 7/01/2021 (b) 4,002
New Jersey Sports and Exposition Authority, Convention Center, Luxury Tax
Revenue Refunding Bonds, Series A (c):
AAA Aaa 2,000 6.60% due 7/01/2015 1,994
AAA Aaa 8,700 6.25% due 7/01/2020 8,284
A1 VMIG1 700 New Jersey Sports and Exposition Authority, Revenue Bonds (State Contract),
VRDN, Series C, 3.25% due 9/01/2024 (a)(c) 700
AAA Aaa 2,000 New Jersey State Educational Facilities Authority Revenue Bonds (Montclair
State University), Series E, 6.50% due 7/01/2021 (d) 1,965
AAA Aaa 2,500 New Jersey State Highway Authority, General Revenue Bonds (Garden State
Parkway), 6.15% due 1/01/2007 (d) 2,500
New Jersey State Housing and Mortgage Finance Agency, Home Buyer Revenue Bonds,
AMT (c):
AAA Aaa 7,000 Series F-2, 6.30% due 4/01/2025 6,468
NR* NR* 4,000 Series M, 7% due 10/01/2026 3,975
A+ NR* 3,000 New Jersey State Housing and Mortgage Finance Agency, Housing Revenue Refunding
Bonds, Series A, 6.95% due 11/01/2013 3,014
AAA NR* 5,000 New Jersey State Housing and Mortgage Financing Agency, M/F Housing Revenue
Refunding Bonds (Presidential Plaza), 7% due 5/01/2030 (e) 4,942
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
New Jersey (continued)
<S> <S> <C> <S> <C>
AAA Aaa $ 5,350 New Jersey State Transportation Corporation, COP (Raymond Plaza East,
Incorporated), 6.50% due 10/01/2016 (f) $ 5,282
<PAGE>
New Jersey State Turnpike Authority, Revenue Refunding Bonds:
AAA Aaa 1,750 Series C, 6.50% due 1/01/2016 (c) 1,732
AAA VMIG1 5,100 VRDN, Series D, 3.15% due 1/01/2018 (a)(b) 5,100
AAA Aaa 5,000 New Jersey Wastewater Treatment Trust Loan, Insured Revenue Bonds, Series B,
6.25% due 5/01/2012 (c) 4,891
Passaic Valley, New Jersey, Water Commission, Water Supply Revenue Bonds,
Series A (b):
AAA Aaa 3,490 6.40% due 12/15/2002 (g) 3,689
AAA Aaa 510 6.40% due 12/15/2022 495
AAA Aaa 4,000 Port Authority of New York and New Jersey, Consolidated Revenue Bonds, AMT,
Series 96, 6.60% due 10/01/2023 (b) 3,894
Port Authority of New York and New Jersey, Special Obligation Revenue Bonds
(Versatile Structure Obligations), VRDN (a):
A1+ VMIG1 600 Series 1, 3.50% due 8/01/2028 600
A1+ VMIG1 1,100 Series 2, 3.55% due 5/01/2019 1,100
AAA Aaa 10,250 South Jersey Transportation Authority, New Jersey, Transportation System Revenue
Bonds, Series B, 6% due 11/01/2012 (c) 9,763
Total Investments (Cost--$172,586)--100.4% 168,706
Other Assets Less Liabilities--(0.4%) (596)
--------
Net Assets--100.0% $168,110
========
<FN>
*Not Rated.
(a)The interest rate is subject to change based upon the prevailing
market rate. The interest rate shown is the rate in effect at
October 31, 1994.
(b)FGIC Insured.
(c)MBIA Insured.
(d)AMBAC Insured.
(e)FHA Insured.
(f)FSA Insured.
(g)Prerefunded.
Ratings of issues shown have not been audited by Deloitte & Touche LLP.
See Notes to Financial Statements.
</TABLE>
<PAGE>
FINANCIAL INFORMATION
<TABLE>
Statement of Assets, Liabilities and Capital as of October 31, 1994
<CAPTION>
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$172,585,913) (Note 1a) $168,705,983
Cash 542,174
Interest receivable 3,289,655
Deferred organization expenses (Note 1e) 8,607
Prepaid expenses and other assets 4,342
------------
Total assets 172,550,761
------------
Liabilities: Payables:
Security purchased $ 3,994,000
Dividends to shareholders (Note 1g) 273,655
Investment adviser (Note 2) 72,522 4,340,177
------------
Accrued expenses and other liabilities 100,637
------------
Total liabilities 4,440,814
------------
Net Assets: Net assets $168,109,947
============
Capital: Capital Stock (200,000,000 shares authorized) (Note 4):
Preferred Stock, par value $.10 per share (1,120 shares of AMPS*
issued and outstanding at $50,000 per liquidation preference) $ 56,000,000
Common Stock, par value $.10 per share (8,241,167 shares issued
and outstanding) $ 824,117
Paid-in capital in excess of par 114,958,321
Undistributed investment income--net 723,890
Accumulated realized capital losses--net (Note 5) (516,451)
Unrealized depreciation on investments--net (3,879,930)
------------
Total--Equivalent to $13.60 net asset value per share of Common
Stock (market price--$11.25) 112,109,947
------------
Total capital $168,109,947
============
<FN>
*Auction Market Preferred Stock.
See Notes to Financial Statements.
</TABLE>
<PAGE>
FINANCIAL INFORMATION (continued)
<TABLE>
Statement of Operations
<CAPTION>
For the Year Ended
October 31, 1994
<S> <S> <C> <C>
Investment Interest and amortization of premium and discount earned $ 10,666,430
Income
(Note 1d):
Expenses: Investment advisory fees (Note 2) $ 902,371
Commission fees (Note 4) 198,870
Professional fees 79,301
Accounting services (Note 2) 42,393
Transfer agent fees 33,774
Printing and shareholder reports 26,595
Directors' fees and expenses 22,873
Listing fees 15,717
Custodian fees 11,051
Pricing fees 5,041
Amortization of organization expenses (Note 1e) 2,880
Other 21,377
------------
Total expenses 1,362,243
------------
Investment income--net 9,304,187
------------
Realized & Realized loss on investments--net (516,282)
Unrealized Loss Change in unrealized appreciation/depreciation on investments--net (21,388,370)
on Investments ------------
- --Net (Notes Net Decrease in Net Assets Resulting from Operations $(12,600,465)
1d & 3): ============
See Notes to Financial Statements.
</TABLE>
<PAGE>
FINANCIAL INFORMATION (continued)
<TABLE>
Statements of Changes in Net Asstes
<CAPTION>
For the Year Ended
October 31,
Increase (Decrease) in Net Assets: 1994 1993
<S> <S> <C> <C>
Operations: Investment income--net $ 9,304,187 $ 8,970,918
Realized gain (loss) on investments--net (516,282) 327,371
Change in unrealized appreciation/depreciation on investments--net (21,388,370) 17,508,440
------------ ------------
Net increase (decrease) in net assets resulting from operations (12,600,465) 26,806,729
------------ ------------
Dividends & Investment income--net:
Distributions to Common Stock (7,644,949) (6,979,864)
Shareholders Preferred Stock (1,584,553) (1,341,849)
(Note 1g): Realized gain on investments--net:
Common Stock (278,573) --
Preferred Stock (48,967) --
------------ ------------
Net decrease in net assets resulting from dividends and distributions
to shareholders (9,557,042) (8,321,713)
------------ ------------
Capital Stock Proceeds from issuance of Preferred Stock -- 56,000,000
Transactions Value of shares issued to Common Stock shareholders in reinvestment
(Notes 1e & 4): of dividends and distributions 712,910 3,534,930
Offering and underwriting costs from the issuance of Preferred Stock -- (1,131,405)
------------ ------------
Net increase in net assets derived from capital stock transactions 712,910 58,403,525
------------ ------------
Net Assets: Total increase (decrease) in net assets (21,444,597) 76,888,541
Beginning of year 189,554,544 112,666,003
------------ ------------
End of year* $168,109,947 $189,554,544
============ ============
*Undistributed investment income--net $ 723,890 $ 649,205
============ ============
See Notes to Financial Statements.
</TABLE>
<PAGE>
FINANCIAL INFORMATION (concluded)
<TABLE>
Financial Highlights
<CAPTION>
For the
Period
The following per share data and ratios have been derived October 30,
from information provided in the financial statements. For the Year Ended 1992++ to
October 31, October 31,
Increase (Decrease) in Net Asset Value: 1994 1993 1992
<S> <S> <C> <C> <C>
Per Share Net asset value, beginning of period $ 16.30 $ 14.14 $ 14.18
Operating ---------- ---------- ----------
Performance: Investment income--net 1.13 1.11 --
Realized and unrealized gain (loss) on investments--net (2.67) 2.21 --
---------- ---------- ----------
Total from investment operations (1.54) 3.32 --
---------- ---------- ----------
Less dividends and distributions to Common Stock
shareholders:
Investment income--net (.93) (.86) --
Realized gain on investments--net (.03) -- --
---------- ---------- ----------
Total dividends and distributions (.96) (.86) --
---------- ---------- ----------
Capital charge resulting from issuance of Common Stock -- -- (.04)
---------- ---------- ----------
Effect of Preferred Stock activity:++++
Dividends and distributions to Preferred Stock
shareholders:
Investment income--net (.19) (.17) --
Realized gain on investments--net (.01) -- --
Capital charge resulting from issuance of Preferred Stock -- (.13) --
---------- ---------- ----------
Total effect of Preferred Stock activity (.20) (.30) --
---------- ---------- ----------
Net asset value, end of period $ 13.60 $ 16.30 $ 14.14
========== ========== ==========
Market price per share, end of period $ 11.25 $ 16.50 $ 15.00
========== ========== ==========
Total Based on market price per share (27.06%) 16.25% 0.00%+++
Investment ========== ========== ==========
Return:* Based on net asset value per share (10.73%) 21.83% (0.28%)+++
========== ========== ==========
<PAGE>
Ratios to Expenses, net of reimbursement .75% .57% --
Average ========== ========== ==========
Net Assets:** Expenses .75% .72% --
========== ========== ==========
Investment income--net 5.14% 5.19% --
========== ========== ==========
Supplemental Net assets, net of Preferred Stock, end of period
Data: (in thousands) $ 112,110 $ 133,555 $ 112,666
========== ========== ==========
Preferred Stock outstanding, end of period (in thousands) $ 56,000 $ 56,000 $ --
========== ========== ==========
Portfolio turnover 21.47% 9.10% 0%
========== ========== ==========
Dividends Investment income--net $ 1,415 $ 1,198 $ --
Per Share
On Preferred
Stock
Outstanding:
<FN>
*Total investment returns based on market value, which can be significantly
greater or lesser than the net asset value, 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 November 30, 1992.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
MuniYield New Jersey 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 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 MJI. 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, 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) 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.
(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.
<PAGE>
(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) Deferred organization expenses and offering expenses--Deferred
organization expenses are amortized on a straight-line basis over a
five-year period. Direct expenses relating to the public offering of
the Common and Preferred Stock were charged to capital at the time
of issuance.
(f) Non-income producing investments--Written and purchased options
are non-income producing investments.
(g) 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"). Effective January 1, 1994, the
investment advisory business of FAM was reorganized from a
corporation to a limited partnership. Both prior to and after the
reorganization, ultimate control of FAM was vested with Merrill
Lynch & Co., Inc. ("ML & Co."). The general partner of FAM is
Princeton Services, Inc. ("PSI"), an indirect wholly-owned
subsidiary of ML & Co. The limited partners are ML & Co. and Fund
Asset Management, Inc. ("FAMI"), which is also indirect wholly-owned
subsidiary of ML & Co.
NOTES TO FIANCIAL STATEMENTS (concluded)
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.
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, FAMI, 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 year ended October 31, 1994 were $37,025,085 and
$40,283,693, respectively.
<PAGE>
Net realized and unrealized losses as of October 31, 1994 were as
follows:
Realized Unrealized
Losses Losses
Long-term investments $(516,266) $(3,879,930)
Short-term investments (16) --
--------- -----------
Total $(516,282) $(3,879,930)
========= ===========
As of October 31, 1994, net unrealized depreciation for Federal
income tax purposes aggregated $3,879,930, of which $388,164 related
to appreciated securities and $4,268,094 related to depreciated
securities. The aggregate cost of investments at October 31, 1994
for Federal income tax purposes was $172,585,913.
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 year ended October 31, 1994, shares issued and outstanding
increased by 46,073 to 8,241,167 as a result of dividend
reinvestment. At October 31, 1994, total paid-in capital amounted to
$115,782,438.
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 yield in effect at October 31, 1994 was 2.90%.
For the year ended October 31, 1994, there were 1,120 AMPS shares
authorized, issued and outstanding with a liquidation preference of
$50,000 per share, plus accumulated and unpaid dividends of $31,326.
Effective December 1, 1994, as a result of a two-for-one stock
split, there will be 2,240 AMPS shares with a liquidation preference
of $25,000 per share.
The Fund pays commissions to certain broker-dealers at the end of
each auction at an annual rate ranging from 0.25% to 0.375%,
calculated on the proceeds of each auction. For the year ended
October 31, 1994, MLPF&S, an affiliate of FAMI, earned $33,044 as
commissions.
<PAGE>
5. Capital Loss Carryforward:
As of October 31, 1994, the Fund had a capital loss carryforward of
approximately $516,000, all of which expires in 2002. This amount
will be available to offset like amounts of any future taxable
gains.
6. Subsequent Event:
On November 8, 1994, the Fund's Board of Directors declared an
ordinary income dividend to Common Stock shareholders in the amount
of $0.074527 per share, payable on November 29, 1994 to shareholders
of record as of November 18, 1994.
<AUDIT-REPORT>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders of
MuniYield New Jersey Insured Fund, Inc.:
We have audited the accompanying statement of assets, liabilities
and capital, including the schedule of investments, of MuniYield New
Jersey Insured Fund, Inc. as of October 31, 1994, the related
statements of operations for the year then ended and changes in net
assets for each of the years in the two-year period then ended, and
the financial highlights for each of the years in the two-year
period then ended and the period October 30, 1992 (commencement of
operations) to October 31, 1992. These financial statements and the
financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these
financial statements and the financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements and the financial highlights are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.
Our procedures included confirmation of securities owned at October
31, 1994 by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights
present fairly, in all material respects, the financial position of
MuniYield New Jersey Insured Fund, Inc. as of October 31, 1994, the
results of its operations, the changes in its net assets, and the
financial highlights for the respective stated periods in conformity
with generally accepted accounting principles.
<PAGE>
Deloitte & Touche LLP
Princeton, New Jersey
December 5, 1994
</AUDIT-REPORT>
IMPORTANT TAX INFORMATION (unaudited)
All of the net investment income distributions paid monthly by
MuniYield New Jersey Insured Fund, Inc. during its taxable year
ended October 31, 1994 qualify as tax-exempt interest dividends for
Federal income tax purposes. Additionally, the following table
summarizes the per share capital gains distributions paid by the
Fund during the year:
<TABLE>
Payable Short-Term Long-Term
Date Capital Gains Capital Gains
<S> <C> <C> <C>
Common Stock Shareholders 12/30/93 $ 0.033972 --
Preferred Stock Shareholders 12/01/93 $ 43.72 --
Please retain this information for your records.
</TABLE>
PER SHARE INFORMATION (UNAUDITED)
<TABLE>
Per Share Selected Quarterly Financial Data*
<CAPTION>
Net Realized Unrealized Dividends/Distributions
Investment Gains Gains Net Investment Income Capital Gains
For the Period Income (Losses) (Losses) Common Preferred Common Preferred
<S> <C> <C> <C> <C> <C> <C> <C>
October 30, 1992++ to January 31, 1993 $.25 $ .01 $ .59 $.13 $.04 -- --
February 1, 1993 to April 30, 1993 .29 -- .65 .25 .04 -- --
May 1, 1993 to July 31, 1993 .29 .01 .35 .24 .04 -- --
August 1, 1993 to October 31, 1993 .28 .03 .57 .24 .05 -- --
November 1, 1993 to January 31, 1994 .29 -- .17 .24 .04 $.03 $.01
February 1, 1994 to April 30, 1994 .28 (.02) (1.93) .23 .05 -- --
May 1, 1994 to July 31, 1994 .28 .03 2.28 .23 .05 -- --
August 1, 1994 to October 31, 1994 .28 (.08) (3.12) .23 .05 -- --
<PAGE>
<CAPTION>
Net Asset Value Market Price**
For the Period High Low High Low Volume***
<S> <C> <C> <C> <C> <C>
October 30, 1992++ to January 31, 1993 $14.68 $14.14 $15.375 $14.575 309
February 1, 1993 to April 30, 1993 15.80 14.67 16.50 15.125 914
May 1, 1993 to July 31, 1993 16.12 15.34 16.375 15.25 646
August 1, 1993 to October 31, 1993 16.64 15.70 17.00 15.875 801
November 1, 1993 to January 31, 1994 16.44 15.77 16.75 15.375 685
February 1, 1994 to April 30, 1994 16.39 14.21 16.875 13.75 745
May 1, 1994 to July 31, 1994 15.02 14.15 14.75 13.375 539
August 1, 1994 to October 31, 1994 14.70 13.60 14.125 11.375 909
<FN>
++Commencement of Operations.
*Calculations are based upon shares of Common Stock outstanding at
the end of each period.
**As reported in the consolidated transaction reporting system.
***In thousands.
</TABLE>
OFFICERS AND DIRECTORS
Arthur Zeikel, President and Director
Donald Cecil, Director
M. Coyler Crum, Director
Edward H. Meyer, Director
Jack B. Sunderland, Director
J. Thomas Touchton, 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
The Bank of New York
90 Washington Street
New York, New York 10286
Transfer Agents
Common Stock:
The Bank of New York
101 Barclay Street
New York, New York 10286
Preferred Stock:
IBJ Schroder Bank & Trust Company
One State Street
New York, New York 10004
NYSE Symbol
MJI
<PAGE>
