MuniYield New Jersey Insured Fund, Inc.
Semi-Annual
Report
April 30, 1994
Officers and Directors
Arthur Zeikel, President and Director
Donald Cecil, Director
M. Colyer 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
110 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>
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 represen-
tation of future performance. The Fund has lever-
aged 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 divi-
dend 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
MuniYield New Jersey Insured Fund, Inc.
TO OUR SHAREHOLDERS
For the six-month period ended April 30, 1994, the Common Stock
of MuniYield New Jersey Insured Fund, Inc. earned $0.502 per
share income dividends, which includes earned and unpaid divi-
dends of $0.078. This represents a net annualized yield of 7.00%,
based on a month-end per share net asset value of $14.48. Over
the same period, the total investment return on the Fund's Common
Stock was -8.19%, based on a change in per share net asset value
from $16.30 to $14.48, and assuming reinvestment of $0.504 per
share income dividends.
For the six-month period ended April 30, 1994, the Fund's Auc-
tion Market Preferred Stock had an average yield of 2.88%.
The Environment
Inflationary expectations and investor sentiment changed for the
worse during the three-month period ended April 30, 1994. Follow-
ing stronger-than-expected economic results through year-end
1993, the Federal Reserve Board broke with tradition on Febru-
ary 4, 1994 and publicly announced a modest 25 basis point
(0.25%) increase in short-term interest rates. At the March 22
meeting of the Federal Open Market Committee, the Federal Reserve
Board again raised the Federal Funds rate by 25 basis points,
followed by another 25 basis point increase on April 18.
<PAGE>
Rather than view the Federal Reserve Board's first tightening
move as a preemptive strike against inflation, fixed-income
investors focused on Chairman Greenspan's implicit promise of
further tightening should the rate of inflation accelerate, and
bond prices declined sharply. The setback in the bond market was
also reflected in greater stock market volatility. While the
second and third increases in the Federal Funds rate were less
of a surprise, investors remained concerned that interest rates
would trend upward sharply as the central bank aggressively
attempted to contain the inflationary pressures of an improving
economy. At the same time, highly leveraged investors were forced
to liquidate positions in the face of declining stock and bond
prices. Investor confidence was not restored with the announce-
ment of the surprisingly slow 2.6% gross domestic product growth
rate for the first calendar quarter of 1994. Instead, investors
focused on the higher-than-expected (but still moderate) broad
inflation measures and became concerned that business activity
was beginning to stagnate as inflationary pressures were in-
creasing.
The volatility in the US capital markets was mirrored in inter-
national markets during the period. Political and economic
developments, along with concerns of heightened global infla-
tionary pressures, led to a sell-off in most capital markets,
especially the emerging markets that had appreciated strongly
in 1993.
The Municipal Market
During the six months ended April 30, 1994, tax-exempt bond
yields exhibited considerable volatility as they rose to their
highest level in the past two years. As measured by the Bond
Buyer Revenue Bond Index, the yield on newly issued municipal
bonds maturing in 30 years rose over 90 basis points to 6.42%
by the end of April. Yields on seasoned municipal revenue bonds
rose by over 100 basis points in sympathy with the equally drama-
tic increase in long-term US Treasury bond yields. By the end
of April, yields on US Treasury securities rose by over 95 basis
points to approximately 7.30%.
<PAGE>
Long-term tax-exempt bond yields were essentially unchanged from
the end of October 1993 to the end of January 1994. However, on a
weekly basis, tax-exempt bond yields fluctuated by as much as 15
basis points as investors were unable to reconcile the rapid eco-
nomic growth seen late last year with continued low inflation.
Following the initial interest rate increase by the Federal Re-
serve Board in early February, municipal bond prices began to
erode in concert with taxable bond prices as investors began to
sell securities in anticipation of further interest rate in-
creases. This fear led investors to withdraw from the tax-exempt
market. From early February to the end of March, total assets
of all tax-exempt bond funds declined by $14 billion to $247
billion. This decline in investor demand, coupled with fears
that the robust economic recovery seen during the fourth quarter
of 1993 would continue well into 1994, helped push municipal bond
yields higher in February and March. Attracted by tax-exempt
yields in excess of 6.25%, investor demand returned in April,
allowing yields to decline approximately 15 basis points to end
the April period at approximately 6.40%.
A rise in tax-exempt bond yields the magnitude of that exper-
ienced over the past six months has not been seen since 1987
when municipal bond rates rose 250 basis points between March
and October of that year. It is very important to note that the
recent municipal bond price declines were largely the result of
consistent and insistent selling pressures over the last two
months. In 1987, the tax-exempt bond market was much more vol-
atile and, at times, chaotic as investors sought to liquidate
positions without concern for fundamental value. For the most
part, the recent price deterioration has been orderly, and the
municipal bond market's liquidity and integrity have not been
challenged or jeopardized.
To a large extent, the municipal bond market has continued to be
supported by its strong technical position. New-issue volume for
the last six months has been less than $105 billion. This rep-
resents a decline of approximately 20% versus the comparable
period a year ago. This decline was expected and has been dis-
cussed in previous shareholder reports. This reduced issuance
has minimized potential selling pressure in recent months since
institutional investors have been wary of selling appreciable
amounts of securities that they may be unable to replace later
this year at any price level. We expect this decline in issuance
to continue since we anticipate recent yield increases to sig-
nificantly impact future municipal bond issuance. Just as higher
mortgage rates slow home mortgage refinancings, the recent rise
in bond yields will prevent bond refinancings from becoming the
driving force in bond issuance in 1994 as they were in 1993.
<PAGE>
Despite recent price declines, tax-exempt securities remain among
the most attractive investment alternatives available. After the
recent yield increases, longer-term municipal securities yield
approximately 90% of comparable US Treasury yields. Purchasers
of these municipal bonds also accrue substantial after-tax yield
advantages. To investors in the 39% marginal Federal income tax
bracket, the purchase of a municipal bond yielding 6.50% repre-
sents an after-tax equivalent of 10.65%. With prevailing esti-
mates of 1994 inflation at no more than 3%--4%, real after-tax
rates in excess of 6.50% easily compensate longer-term investors
for much of the price volatility recently experienced.
Portfolio Strategy
During the six months ended April 30, 1994, the New Jersey sector
of the tax-exempt arena closely mirrored the volatility witnessed
in the municipal market in general. While New Jersey municipal
bonds remained a relatively scarce commodity throughout the
period, and as the outlook for fixed-income investments became
more uncertain and investors seemed to assume a more defensive
posture, these securities were repriced to reflect the rise in
yields witnessed throughout the municipal bond market. Further
aggravating this adjustment was the fact that New Jersey muni-
cipal bonds entered the period at relatively expensive levels
because of the formidable technical dynamic which has served as
the foundation for the trading of these securities throughout
much of the past year. While national issuance during the past
six months has experienced a decline of more than 19% as compared
to the same period of last year, New Jersey tax-exempt issuance
has contracted by more than 56%. Subsequently, as yields began
their adjustment during the period, New Jersey municipal bonds
began the process from some of the market's most aggressive
levels.
Portfolio decisions throughout the six months ended April 30,
1994 were guided by a decidedly conservative posture. While we
maintained a near fully invested stance throughout the April
period, the Fund's structure at the start of the period was less
aggressive than general market fundamentals may have warranted.
As the outlook for interest rates in general became more un-
certain, trading activity sought to capitalize on the oppor-
tunities inherent in such an environment by drawing down the
average portfolio maturity and shifting the portfolio's focus
away from principal volatility and more toward the generation
of tax-exempt income. Issues used to facilitate this objective
were those deemed to possess strong qualities of protection
from redemption prior to maturity and superior qualities of
creditworthiness relative to the universe of New Jersey tax-
exempt bonds.
<PAGE>
In Conclusion
We appreciate your ongoing interest in MuniYield New Jersey
Insured Fund, Inc., and we look forward to serving your in-
vestment 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
May 31, 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 Pre-
ferred 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 lever-
aging 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 share-
holders 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 Pre-
ferred 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.
AMT Alternative Minimum Tax (subject to)
COP Certificates of Participation
EDA Economic Development Authority
GO General Obligation Funds
M/F Multi-Family
PCR Pollution Control Revenue Bonds
UT Unlimited Tax
VRDN Variable Rate Demand Notes
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (in Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
New Jersey--98.3%
<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 $ 4,635
AAA Aaa 4,600 6.15% due 12/01/2014 4,628
AAA Aaa 3,750 6.15% due 12/01/2015 3,770
AAA Aaa 6,000 Bergen County, New Jersey, Utilities Authority, Water, PCR, Series A, 6.50% due
12/15/2012 (b) 6,174
AAA Aaa 5,000 Cape May County, New Jersey, Municipal Utilities Authority Refunding Bonds, Series
A, 6% due 1/01/2011 (c) 5,007
AAA NR 2,800 Essex County, New Jersey, Improvement Authority Revenue Bonds (Irvington Township
School District), 6.625% due 10/01/2002 (f)(g) 3,070
AAA Aaa 8,130 Hoboken, Union City, Weehawken, New Jersey, Sewer Authority, Revenue Refunding
Bonds, 6.20% due 8/01/2019 (c) 8,135
AAA Aaa 11,105 Hudson County, New Jersey, COP, Refunding Bonds (Correctional Facilities), 6.60% due
12/01/2021 (c) 11,483
A+ NR 2,850 Hudson County, New Jersey, Improvement Authority, Essential Purpose Revenue Bonds,
6.625% due 8/01/2025 2,954
AAA Aaa 8,500 Hudson County, New Jersey, Improvement Authority, Facility Lease Revenue Bonds
(Hudson County Lease Project), 6% due 12/01/2025 (b) 8,140
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) 8,432
NR NR 5,750 Middlesex County, New Jersey, Pollution Control Authority, Revenue Refunding Bonds,
6.875% due 12/01/2022 5,834
AA- Aa 4,485 New Jersey Building Authority, State Building Revenue Refunding Bonds, 5% due
6/15/2013 3,896
NR P1 200 New Jersey, EDA, Economic Development Revenue Refunding Bonds (Dow Chemicals--
El Dorado Term 1984), Series A, VRDN, 2.75% due 5/01/2001 (a) 200
AAA Aaa 5,000 New Jersey, EDA, Revenue Bonds (State Contract Economic Recovery), Series A, 6% due
3/15/2021 (f) 4,869
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
New Jersey (concluded)
<S> <S> <C> <S> <C>
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) $ 1,527
AAA Aaa 6,355 (Holy Name Hospital), Series B, 6.75% due 7/01/2020 (d) 6,535
AAA Aaa 5,475 (Mercer Medical Center), 6.50% due 7/01/2021 (c) 5,588
AAA Aaa 1,185 Refunding (Hackensack Medical Center), 6.625% due 7/01/2017 (b) 1,222
AAA Aaa 5,245 Refunding (Hackensack Medical Center), 6.25% due 7/01/2021 (b) 5,259
AAA Aaa 4,000 Refunding (JFK Health Systems), 6.70% due 7/01/2021 (b) 4,138
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 2,071
AAA Aaa 11,700 6.25% due 7/01/2020 11,795
New Jersey State Educational Facilities Authority Revenue Bonds (d):
AAA Aaa 2,000 (Montclair State College), Series E, 6.50% due 7/01/2021 2,047
AAA Aaa 1,500 Refunding (Rider College), Series D, 6.20% due 7/01/2017 1,508
AAA Aaa 10,900 New Jersey State Housing and Mortgage Financing Agency, Home Buyers Mortgage
Revenue Bonds, AMT, 6.30% due 4/01/2025 (c) 10,739
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) 5,197
AAA Aaa 5,350 New Jersey State Transportation Corporation, COP (Raymond Plaza East, Incorporated),
6.50% due 10/01/2016 (f) 5,544
NR VMIG1 2,400 New Jersey State Turnpike Authority, Turnpike Revenue Refunding Bonds, Series D,
VRDN, 3.15% due 1/01/2018 (a)(b) 2,400
New Jersey Wastewater Treatment Trust Loan, Insured Revenue Bonds:
AAA Aaa 2,040 4.80% due 3/01/2011 (d) 1,757
AAA Aaa 5,000 Series B, 6.25% due 5/01/2012 (c) 5,059
AAA Aaa 4,000 Passaic Valley, New Jersey, Sewerage Commissioners, Sewer System Refunding Bonds,
Series D, 5.875% due 12/01/2022 (d) 3,863
Passaic Valley, New Jersey, Water Commission, Water Supply Revenue Bonds, Series
A (b):
AAA Aaa 3,490 6.40% due 12/15/2002 (g) 3,778
AAA Aaa 510 6.40% due 12/15/2022 522
<PAGE>
AAA Aaa 10,250 South Jersey Transportation Authority, New Jersey, Transportation System Revenue
Bonds, Series B, 6% due 11/01/2012 (c) 10,250
Total Investments (Cost--$169,001)--98.3% 172,026
Other Assets Less Liabilities--1.7% 2,993
--------
Net Assets--100.0% $175,019
========
<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, 1994.
(b) FGIC Insured.
(c) MBIA Insured.
(d) AMBAC Insured.
(e) FHA Insured.
(f) FSA Insured.
(g) Prerefunded.
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION
<TABLE>
Statement of Assets, Liabilities and Capital as of April 30, 1994
<CAPTION>
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$169,000,478) (Note 1a) $172,026,034
Cash 80,538
Interest receivable 3,432,161
Deferred organization expenses (Note 1e) 28,186
Prepaid expenses 184,478
------------
Total assets 175,751,397
------------
Liabilities: Payables:
Dividends to shareholders (Note 1g) $ 451,369
Investment adviser (Note 2) 69,386 520,755
------------
Accrued expenses 211,339
------------
Total liabilities 732,094
------------
Net Assets: Net assets $175,019,303
============
<PAGE>
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 share liquidation preference) $ 56,000,000
Common Stock, par value $.10 per share (8,220,199 shares issued
and outstanding) $ 822,020
Paid-in capital in excess of par 114,659,106
Undistributed investment income--net 685,303
Accumulated realized capital losses--net (172,682)
Unrealized appreciation on investments--net 3,025,556
------------
Total--Equivalent to $14.48 net asset value per share of Common Stock
(market price--$14.125) 119,019,303
------------
Total capital $175,019,303
============
<FN>
* Auction Market Preferred Stock.
</TABLE>
<TABLE>
Statement of Operations
<CAPTION>
For the Six Months Ended April 30, 1994
<S> <S> <C> <C>
Investment Income Interest and amortization of premium and discount earned $ 5,361,578
(Note 1d):
Expenses: Investment advisory fees (Note 2) $ 459,685
Commission fees (Note 4) 96,404
Professional fees 40,338
Accounting services (Note 2) 21,510
Transfer agent fees 18,034
Printing and shareholder reports 11,894
Directors' fees and expenses 11,214
Listing fees 7,683
Custodian fees 5,972
Amortization of organization expenses (Note 1e) 3,454
Pricing fees 2,710
Other 9,857
------------
Total expenses 688,755
------------
Investment income--net 4,672,823
------------
Realized & Realized loss on investments--net (172,514)
Unrealized Loss on Change in unrealized appreciation on investments--net (14,482,884)
Investments--Net ------------
(Notes 1d & 3): Net Decrease in Net Assets Resulting from Operations $ (9,982,575)
============
See Notes to Financial Statements.
</TABLE>
<PAGE>
FINANCIAL INFORMATION (continued)
<TABLE>
Statements of Changes in Net Assets
<CAPTION>
For the Six For the Year
Months Ended Ended
Increase (Decrease) in Net Assets: April 30, 1994 Oct. 31, 1993
<S> <S> <C> <C>
Operations: Investment income--net $ 4,672,823 $ 8,970,918
Realized gain (loss) on investments--net (172,514) 327,371
Change in unrealized appreciation/depreciation on investments--net (14,482,884) 17,508,440
------------ ------------
Net increase (decrease) in net assets resulting from operations (9,982,575) 26,806,729
------------ ------------
Dividends & Investment income--net:
Distributions to Common Stock (3,860,027) (6,979,864)
Shareholders Preferred Stock (776,698) (1,341,849)
(Note 1g): Realized gain on investments--net:
Common Stock (278,573) --
Preferred Stock (48,966) --
------------ ------------
Net decrease in net assets resulting from dividends and distributions
to shareholders (4,964,264) (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 411,598 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 411,598 58,403,525
------------ ------------
Net Assets: Total increase (decrease) in net assets (14,535,241) 76,888,541
Beginning of period 189,554,544 112,666,003
------------ ------------
End of period* $175,019,303 $189,554,544
============ ============
<FN>
* Undistributed investment income $ 685,303 $ 649,205
============ ============
See Notes to Financial Statements.
</TABLE>
<PAGE>
FINANCIAL INFORMATION (concluded)
<TABLE>
Financial Highlights
<CAPTION>
For the
For the Six Period
The following per share data and ratios have been derived Months For the October 30,
from information provided in the financial statements. Ended Year Ended 1992++ to
April 30, 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 .56 1.11 --
Realized and unrealized gain (loss) on investments--net (1.78) 2.21 --
---------- ---------- ----------
Total from investment operations (1.22) 3.32 --
---------- ---------- ----------
Less dividends and distributions to Common Stock
shareholders:
Investment income--net (.47) (.86) --
Realized gain on investments--net (.03) -- --
---------- ---------- ----------
Total dividends and distributions to Common Stock
shareholders (.50) (.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 (.09) (.17) --
Realized gain on investments--net (.01) -- --
Capital charge resulting from issuance of Preferred Stock -- (.13) --
---------- ---------- ----------
Total effect of Preferred Stock activity (.10) (.30) --
---------- ---------- ----------
Net asset value, end of period $ 14.48 $ 16.30 $ 14.14
========== ========== ==========
Market price per share, end of period $ 14.125 $ 16.50 $ 15.00
========== ========== ==========
Total Investment Based on market value per share (11.53%)+++ 16.25% 0.00%+++
Return:** ========== ========== ==========
Based on net asset value per share (8.19%)+++ 21.83% (0.28%)+++
========== ========== ==========
<PAGE>
Ratios to Average Expenses, net of reimbursement .75%* .57% --%
Net Assets:*** ========== ========== ==========
Expenses .75%* .72% --%
========== ========== ==========
Investment income--net 5.07%* 5.19% --%
========== ========== ==========
Supplemental Net assets, net of Preferred Stock, end of period
Data: (in thousands) $ 119,019 $ 133,555 $ 112,666
========== ========== ==========
Preferred Stock outstanding, end of period (in thousands) $ 56,000 $ 56,000 $ --
========== ========== ==========
Portfolio turnover 3.76% 9.10% 0%
========== ========== ==========
Dividends Per Share Investment income--net $ 292 $ 1,198 $ --
On Preferred Stock
Outstanding:
<FN>
* Annualized.
** 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 reg-
istered under the Investment Company Act of 1940 as a non-di-
versified, 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 pol-
icies followed by the Fund.
(a) Valuation of investments--Municipal bonds are traded pri-
marily 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. Secur-
ities with remaining maturities of sixty days or less are val-
ued at amortized cost, which approximates market value. Secur-
ities 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 exist-
ing 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 re-
quirements 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 trans-
actions 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 and offering expenses--Deferred organ-
ization expenses are amortized on a straight-line basis over
a five-year period. Direct expenses relating to the public offer-
ing 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., an indirect wholly-owned subsidiary of
ML & Co. The limited partners are ML & Co. and Merrill Lynch
Investment Management, Inc. ("MLIM"), which is also an indirect
wholly-owned subsidiary of ML & Co.
NOTES TO FINANCIAL STATEMENTS (concluded)
FAM is responsible for the management of the Fund's portfolio and
provides the necessary personnel, facilities, equipment and cer-
tain 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, MLIM, Merrill Lynch, Pierce, Fenner & Smith
Inc. ("MLPF&S"), and/or ML & Co.
<PAGE>
3. Investments:
Purchases and sales of investments, excluding short-term
securities, for the six months ended April 30, 1994 were
$6,776,927 and $6,974,350, respectively.
Net realized and unrealized gains (losses) as of April 30, 1994
were as follows:
Realized Unrealized
Losses Gains
Long-term investments $ (172,514) $ 3,025,556
----------- -----------
Total $ (172,514) $ 3,025,556
=========== ===========
As of April 30, 1994, net unrealized appreciation for Federal
income tax purposes aggregated $3,025,556, of which $3,827,203
related to appreciated securities and $801,647 related to
depreciated securities. The aggregate cost of investments at
April 30, 1994 for Federal income tax purposes was $169,000,478.
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, 1994, shares issued and
outstanding increased by 25,105 to 8,220,199 as a result of
dividend reinvestment. At April 30, 1994, total paid-in capital
amounted to $115,481,126.
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 April 30, 1994 was
2.88%.
For the six months ended April 30, 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 $18,670.
The Fund pays commissions to certain broker-dealers at the end of
each auction at the annual rate of one-quarter of 1% calculated
on the proceeds of each auction.
<PAGE>
5. Subsequent Event:
On May 6, 1994, the Fund's Board of Directors declared an or-
dinary income dividend to Common Stock shareholders in the amount
of $.077985 per share, payable on May 27, 1994 to shareholders
of record as of May 17, 1994.
PER SHARE INFORMATION
<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 .27 (.02) (1.93) .23 .05 -- --
<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 14.22 16.875 13.75 745
<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>
