MUNIYIELD
NEW JERSEY
INSURED
FUND, INC.
FUND LOGO
Annual Report
October 31, 1996
Officers and Directors
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
Vincent R. Giordano, Senior Vice President
Donald C. Burke, Vice President
Kenneth A. Jacob, Vice President
William M. Petty, Vice President
Gerald M. Richard, Treasurer
Mark B. Goldfus, Secretary
<PAGE>
Custodian
The Bank of New York
90 Washington Street
New York, NY 10286
Transfer Agents
Common Stock:
The Bank of New York
101 Barclay Street
New York, NY 10286
Preferred Stock:
IBJ Schroder Bank & Trust Company
One State Street
New York, NY 10004
NYSE Symbol
MJI
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. Statements and other information
herein are as dated and are subject to change.
MuniYield
New Jersey
Insured Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
MuniYield New Jersey Insured Fund, Inc.
TO OUR SHAREHOLDERS
<PAGE>
For the year ended October 31, 1996, the Common Stock of MuniYield
New Jersey Insured Fund, Inc. earned $0.884 per share income
dividends, which included earned and unpaid dividends of $0.075.
This represents a net annualized yield of 5.85%, based on a
month-end net asset value of $15.10 per share. Over the same period,
the total investment return on the Fund's Common Stock was +6.09%,
based on a change in per share net asset value from $15.12 to
$15.10, and assuming reinvestment of $0.884 per share income
dividends.
For the six-month period ended October 31, 1996, the total
investment return on the Fund's Common Stock was +6.34%, based on a
change in per share net asset value from $14.63 to $15.10, and
assuming reinvestment of $0.439 per share income dividends.
For the six-month period ended October 31, 1996, the Fund's Auction
Market Preferred Stock had an average yield of 3.35%.
The Environment
Investor perceptions regarding the direction of the US economy
shifted over the course of the six-month period ended October 31,
1996. Throughout the summer months, concerns of an overheating
economy and spiraling inflation dominated the financial markets as
investors focused on the increasing possibility of monetary policy
tightening by the Federal Reserve Board. However, as it became
apparent that inflationary pressures were still under control--and
when the Federal Reserve Board did not tighten monetary policy at
its September 24 meeting--the investment outlook became more
positive. These developments, coupled with several economic data
releases that showed growth was at or below expectations, helped to
assuage investors' concerns about an overheating economy. Stock and
bond prices improved, with most broad-based stock market averages
reaching historic high levels. However, one factor potentially
overshadowing investor enthusiasm is the possibility that corporate
profits may have peaked for this economic cycle.
The US economy clearly has slowed from its strong growth rate during
the first half of 1996. Gross domestic product (GDP) growth is
slowing, labor-cost pressures are subsiding, consumer confidence is
easing, and commodity prices are dropping. Investors are also
anticipating that President Clinton's re-election, combined with
continued Republican majorities in the House of Representatives and
the Senate, will prove positive for the nation's budget deficit. As
1996 draws to a close, investors are likely to continue to focus on
the economy. Evidence of continued growth at a non-inflationary pace
would be positive for the US capital markets.
<PAGE>
The Municipal Market and 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 5.63% on
January 4, 1996 to a high of 6.34% on June 13, 1996. At year-end
October 31, 1996, the Index was roughly back to the levels at which
it began the period, having retraced the losses associated with a
surge in economic growth during the first six months of the calendar
year. The change in direction of long-term interest rates occurred
as a result of the slower economic pace exhibited during the third
quarter of 1996. The change of pace led investors to alter the
consensus view of future monetary policy from that of a tightening
to no change. Since August, prices of long-term, fixed-income
securities have risen modestly while short-term securities have
reacted more dramatically.
During the 12 months ended October 31, 1996, we sought to provide a
generous level of tax-exempt income for shareholders without
sacrificing the strong credit quality characteristics of the
portfolio. We ended the prior year constructive on the interest rate
environment and extended the duration of the portfolio by purchasing
securities which we believed could enhance the total return to the
shareholder in a period of declining interest rates. However, strong
job growth led an economic revival from February through July which
forced a major change in investor psychology. We shifted the
portfolio to a more defensive posture to protect the net asset value
as yields on long-term municipal bonds surged approximately 0.75%
between January and mid-June. Since peaking in June, interest rates
have declined somewhat as the economy has shown early signs of
cooling. We shifted to a more neutral posture once again. By
remaining fully invested during the period, we were able to provide
an attractive dividend while limiting interest rate risk.
For the 12-month period ended October 31, 1996, the Fund experienced
a 5.92% increase in cumulative total return versus an average
increase of 6.00% for all New Jersey tax-exempt closed-end leveraged
bond funds as reported by Lipper Analytical Services, Inc. The
Fund's Common Stock also produced a 5.85% yield for the 12-month
period ended October 31, 1996 as compared to the industry average of
5.63% as reported by Lipper Analytical Services, Inc.
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 ahead.
Sincerely,
<PAGE>
(Arthur Zeikel)
Arthur Zeikel
President
(Vincent R. Giordano)
Vincent R. Giordano
Senior Vice President
(William M. Petty)
William M. Petty
Vice President and Portfolio Manager
November 25, 1996
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.
<PAGE>
To illustrate these concepts, assume a fund's Common Stock
capitalization of $100 million and the issuance of Preferred Stock
for an additional $50 million, creating a total value of $150
million available for investment in long-term municipal bonds. If
prevailing short-term interest rates are approximately 3% and long-
term interest rates are approximately 6%, the yield curve has a
strongly positive slope. The fund pays dividends on the $50 million
of Preferred Stock based on the lower short-term interest rates. At
the same time, the fund's total portfolio of $150 million earns the
income based on long-term interest rates. Of course, increases in
short-term interest rates would reduce (and even eliminate) the
dividends on the Common Stock.
In this case, the dividends paid to Preferred Stock shareholders are
significantly lower than the income earned on the fund's long-term
investments, and therefore the Common Stock shareholders are the
beneficiaries of the incremental yield. However, if short-term
interest rates rise, narrowing the differential between short-term
and long-term interest rates, the incremental yield pickup on the
Common Stock will be reduced or eliminated completely. At the same
time, the market value of the fund's Common Stock (that is, its
price as listed on the New York Stock Exchange) may, as a result,
decline. Furthermore, if long-term interest rates rise, the Common
Stock's net asset value will reflect the full decline in the price
of the portfolio's investments, since the value of the fund's
Preferred Stock does not fluctuate. In addition to the decline in
net asset value, the market value of the fund's Common Stock may
also decline.
PROXY RESULTS
<TABLE>
During the six-month period ended October 31, 1996, MuniYield New
Jersey Insured Fund, Inc. Common Stock shareholders voted on the
following proposals. The proposals were approved at a special
shareholders' meeting on September 9, 1996. The description of each
proposal and number of shares voted are as follows:
<CAPTION>
Shares Shares Voted
Voted For Without Authority
<S> <S> <C> <C>
1.To elect the Fund's Board of Directors: Edward H. Meyer 7,949,843 148,814
Jack B. Sunderland 7,944,627 154,030
J. Thomas Touchton 7,944,627 154,030
Arthur Zeikel 7,946,543 152,114
<PAGE>
<CAPTION>
Shares Shares Voted Shares Voted
Voted For Against Abstain
<S> <C> <C> <C>
2.To ratify the selection of Deloitte &
Touche LLP as the Fund's independent
auditors for the current fiscal year. 7,907,240 113,049 78,368
<CAPTION>
During the six-month period ended October 31, 1996,
MuniYield NewJersey Insured Fund, Inc. Preferred Stock
shareholders voted on the following proposals. The
proposals were approved at a special shareholders'
meeting on September 6, 1996. The description of each
proposal and number of shares voted are as follows:
Shares Shares Voted
Voted For Without Authority
<S> <S> <C> <C>
1.To elect the Fund's Board of Directors: Donald Cecil 2,044 146
M. Colyer Crum 2,044 146
Edward H. Meyer 2,044 146
Jack B. Sunderland 2,044 146
J. Thomas Touchton 2,044 146
Arthur Zeikel 2,044 146
<CAPTION>
Shares Shares Voted Shares Voted
Voted For Against Abstain
<S> <C> <C> <C>
2.To ratify the selection of Deloitte &
Touche LLP as the Fund's independent
auditors for the current fiscal year. 2,121 0 69
</TABLE>
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 below and 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
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (In Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
New Jersey--93.6%
<S> <S> <C> <S> <C>
Atlantic City, New Jersey, School Board of Education, GO, UT (d):
AAA Aaa $ 4,600 6.15% due 12/01/2013 $ 4,807
AAA Aaa 2,000 6.15% due 12/01/2015 2,082
AAA Aaa 6,000 Bergen County, New Jersey, Utilities Authority, Water PCR, Series A, 6.50%
due 12/15/2012 (b) 6,515
AAA Aaa 4,875 Cape May County, New Jersey, Industrial Pollution Control Financing Authority
Revenue Bonds (Atlantic City Electric Company Project), AMT, Series A, 7.20%
due 11/01/2029 (c) 5,599
AAA Aaa 3,010 Carteret, New Jersey, Board of Education, COP, GO, 6.75% due 10/15/2019 (c) 3,367
Essex County, New Jersey, Improvement Authority Revenue Bonds:
AAA Aaa 2,800 (Irvington Township School District), 6.625% due 10/01/2002 (e)(f) 3,139
AAA Aaa 2,245 (Orange Township School District), UT, Series B, 6.95% due 7/01/2014 (c) 2,547
AAA Aaa 1,120 (Parking Facility), 6.20% due 7/01/2022 (c) 1,172
Highland Park, New Jersey, School District, GO, UT (c):
AAA Aaa 1,200 6.55% due 2/15/2023 1,320
AAA Aaa 1,250 6.55% due 2/15/2024 1,375
AAA Aaa 3,630 Hoboken, Union City, Weehawken, New Jersey, Sewer Authority, Revenue Refunding
Bonds, 6.20% due 8/01/2019 (c) 3,814
AAA Aaa 12,600 Hudson County, New Jersey, Refunding Bonds (Correctional Facilities), COP,
6.60% due 12/01/2021 (c) 13,618
AAA Aaa 4,750 Jersey City, New Jersey, Sewer Authority Revenue Refunding Bonds, 6.25% due
1/01/2014 (d) 5,159
NR* NR* 5,750 Middlesex County, New Jersey, Pollution Control Authority, Revenue Refunding
Bonds (Amerada Hess), 6.875% due 12/01/2022 6,013
NR* VMIG1++ 200 Monmouth County, New Jersey, Improvement Authority Revenue Bonds (Pooled
Government Loan Program), ACES, 3.25% due 8/01/2016 (a) 200
<PAGE>
AAA Aaa 2,305 New Jersey, EDA, Educational Testing Services Revenue Bonds, Series B,
6.125% due 5/15/2015 (c) 2,408
A+ A1 1,000 New Jersey, EDA, Lease Revenue Bonds (Riverview Office), Series A, 5.375% due
1/15/2016 979
AAA Aaa 4,500 New Jersey, EDA, Natural Gas Facilities, Revenue Refunding Bonds (NUI Corp.),
Series A, 6.35% due 10/01/2022 (d) 4,821
New Jersey, EDA, Revenue Bonds (e):
AAA Aaa 2,000 (Clara Maass Health Systems), 5% due 7/01/2025 1,835
AAA Aaa 1,150 (State Contract Economic Recovery), Series A, 6% due 3/15/2021 1,177
AAA Aaa 2,835 New Jersey, EDA, Revenue Refunding Bonds (RWJ Health Care Corporation),
6.50% due 7/01/2024 (e) 3,075
AAA Aaa 2,000 New Jersey, EDA, Water Facilities Revenue Bonds (American Water Company Inc.
Project), AMT, 6% due 5/01/2036 (b) 2,033
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) 1,576
AAA Aaa 6,355 (Holy Name Hospital), Series B, 6.75% due 7/01/2020 (d) 6,778
AAA Aaa 5,445 (Mercer Medical Center), 6.50% due 7/01/2021 (c) 5,837
AAA Aaa 1,800 Refunding (Berkeley Heights Convalescent Center), 5% due 7/01/2026 (d) 1,630
AAA Aaa 3,685 Refunding (Hackensack Medical Center), 6.625% due 7/01/2017 (b) 3,969
AAA Aaa 4,000 Refunding (JFK Health Systems), 6.70% due 7/01/2021 (b) 4,320
New Jersey Sports and Exposition Authority, Luxury Tax Revenue Refunding Bonds
(Convention Center), Series A (c):
AAA Aaa 2,000 6.60% due 7/01/2015 2,183
AAA Aaa 7,380 6.25% due 7/01/2020 7,778
</TABLE>
<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 State Educational Facilities Authority Revenue Bonds (d):
AAA Aaa $ 2,000 (Montclair State University), Series E, 6.50% due 7/01/2021 $ 2,140
AAA Aaa 1,750 Refunding (University of Medicine & Dentistry), Series B, 5.25% due 12/01/2021 1,675
AAA Aaa 4,000 New Jersey State Housing and Mortgage Finance Agency, Home Buyer Revenue Bonds,
AMT, Series M, 7% due 10/01/2026 (c) 4,265
<PAGE>
New Jersey State Housing and Mortgage Finance Agency, Housing Revenue
Refunding Bonds:
AAA NR* 3,850 M/F (Presidential Plaza), 7% due 5/01/2030 (g) 4,130
AAA Aaa 5,000 M/F, Series A, 6.05% due 11/01/2020 (d) 5,097
A+ NR* 2,000 Series A, 6.95% due 11/01/2013 2,127
AAA Aaa 5,350 New Jersey State Transportation Corporation, COP (Raymond Plaza East,
Incorporated), 6.50% due 10/01/2016 (e) 5,813
New Jersey State Transportation Trust Fund Authority Revenue Bonds
(Transportation System), Series A:
AAA Aaa 10,000 4.75% due 12/15/2016 (c) 9,015
AAA Aaa 2,000 Refunding, 6% due 6/15/2003 (d) 2,149
AAA Aaa 5,000 New Jersey Wastewater Treatment Trust, Loan Insured Revenue Bonds, Series B,
6.25% due 5/01/2012 (c) 5,300
AAA Aaa 2,000 North Hudson, New Jersey, Sewer Authority Revenue Bonds, 5.125% due
8/01/2022 (b) 1,879
AAA Aaa 3,490 Passaic Valley, New Jersey, Water Commission, Water Supply Revenue Bonds,
Series A, 6.40% due 12/15/2002 (b)(f) 3,882
Port Authority of New York and New Jersey, Consolidated Revenue Bonds, AMT (b):
AAA Aaa 3,500 96th Series, 6.60% due 10/01/2023 3,805
AAA Aaa 4,000 Refunding, 97th Series, UT, 6.65% due 1/15/2023 4,359
A1+ VMIG1++ 1,400 Port Authority of New York and New Jersey, Special Obligation Revenue Bonds
(Versatile Structure Obligation), VRDN, AMT, Series 1, 3.55% due 8/01/2028 (a) 1,400
AAA Aaa 1,180 South Brunswick Township, New Jersey, Board of Education, GO, UT, 6.40% due
8/01/2021 (b) 1,263
Puerto Rico--4.5%
A Baa1 8,400 Puerto Rico Commonwealth, Highway and Transportation Authority, Highway
Revenue Bonds, Series Y, 5.50% due 7/01/2026 8,033
Total Investments (Cost--$166,803)--98.1% 177,458
Other Assets Less Liabilities--1.9% 3,490
--------
Net Assets--100.0% $180,948
========
<PAGE>
<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 October 31, 1996.
(b)FGIC Insured.
(c)MBIA Insured.
(d)AMBAC Insured.
(e)FSA Insured.
(f)Prerefunded.
(g)FHA Insured.
*Not Rated.
++Highest short-term rating by Moody's Investors Service, Inc.
Ratings of issues shown have not been audited by Deloitte & Touche LLP.
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION
<TABLE>
Statement of Assets, Liabilities and Capital as of October 31, 1996
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$166,802,993) (Note 1a) $177,457,884
Cash 199,872
Interest receivable 3,675,196
Deferred organization expenses (Note 1e) 2,872
Prepaid expenses and other assets 7,101
------------
Total assets 181,342,925
------------
Liabilities: Payables:
Dividends to shareholders (Note 1f) $ 231,458
Investment adviser (Note 2) 76,330 307,788
------------
Accrued expenses and other liabilities 86,985
------------
Total liabilities 394,773
------------
Net Assets: Net assets $180,948,152
============
Capital: Capital Stock (200,000,000 shares authorized) (Note 4):
Preferred Stock, par value $.05 per share (2,240 shares
of AMPS* issued and outstanding at $25,000 per share
liquidation preference) $ 56,000,000
Common Stock, par value $.10 per share (8,273,404 shares
issued and outstanding) $ 827,340
Paid-in capital in excess of par 115,430,211
Undistributed investment income--net 811,790
Accumulated realized capital losses on investments--net (Note 5) (2,776,080)
Unrealized appreciation on investments--net 10,654,891
------------
Total--Equivalent to $15.10 net asset value per share of
Common Stock (market price--$14.75) 124,948,152
------------
Total capital $180,948,152
============
<PAGE>
<FN>
*Auction Market Preferred Stock.
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (continued)
<TABLE>
Statement of Operations
<CAPTION>
For the Year Ended
October 31, 1996
<S> <S> <C> <C>
Investment Income Interest and amortization of premium and discount earned $ 10,560,430
(Note 1d):
Expenses: Investment advisory fees (Note 2) $ 900,165
Commission fees (Note 4) 142,005
Professional fees 69,651
Accounting services (Note 2) 47,303
Transfer agent fees 41,360
Directors' fees and expenses 22,850
Printing and shareholder reports 21,767
Listing fees 16,194
Custodian fees 12,126
Pricing fees 7,893
Amortization of organization expenses (Note 1e) 2,872
Other 12,855
------------
Total expenses 1,297,041
------------
Investment income--net 9,263,389
------------
Realized & Realized loss on investments--net (1,107,727)
Unrealized Change in unrealized appreciation on investments--net 898,090
Gain (Loss) on ------------
Investments--Net Net Increase in Net Assets Resulting from Operations $ 9,053,752
(Notes 1b, 1d & 3): ============
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
Statements of Changes in Net Assets
<CAPTION>
For the Year Ended
October 31,
Increase (Decrease) in Net Assets: 1996 1995
<S> <S> <C> <C>
Operations: Investment income--net $ 9,263,389 $ 9,372,190
Realized loss on investments--net (1,107,727) (1,151,903)
Change in unrealized appreciation on investments--net 898,090 13,636,732
------------ ------------
Net increase in net assets resulting from operations 9,053,752 21,857,019
------------ ------------
Dividends to Investment income--net:
Shareholders Common Stock (7,293,937) (7,185,309)
(Note 1f): Preferred Stock (1,926,086) (2,142,347)
------------ ------------
Net decrease in net assets resulting from dividends to
shareholders (9,220,023) (9,327,656)
------------ ------------
Capital Stock Value of shares issued to Common Stock Shareholders in
Transactions reinvestment of dividends 475,113 --
(Note 4): ------------ ------------
Net increase in net assets derived from capital stock
transactions 475,113 --
------------ ------------
Net Assets: Total increase in net assets 308,842 12,529,363
Beginning of year 180,639,310 168,109,947
------------ ------------
End of year* $180,948,152 $180,639,310
============ ============
<FN>
*Undistributed investment income--net $ 811,790 $ 768,424
============ ============
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (concluded)
<PAGE>
<TABLE>
Financial Highlights
<CAPTION>
For the
Period
The following per share data and ratios have been derived Oct. 30,
from information provided in the financial statements. For the Year Ended 1992++ to
October 31, Oct. 31,
Increase (Decrease) in Net Asset Value: 1996 1995 1994 1993 1992
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 15.12 $ 13.60 $ 16.30 $ 14.14 $ 14.18
Operating -------- -------- -------- -------- --------
Performance: Investment income--net 1.12 1.13 1.13 1.11 --
Realized and unrealized gain (loss) on
investments--net (.03) 1.52 (2.67) 2.21 --
-------- -------- -------- -------- --------
Total from investment operations 1.09 2.65 (1.54) 3.32 --
-------- -------- -------- -------- --------
Less dividends and distributions to Common
Stock shareholders:
Investment income--net (.88) (.87) (.93) (.86) --
Realized gain on investments--net -- -- (.03) -- --
-------- -------- -------- -------- --------
Total dividends and distributions to Common
Stock shareholders (.88) (.87) (.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 (.23) (.26) (.19) (.17) --
Realized gain on investments--net -- -- (.01) -- --
Capital charge resulting from issuance
of Preferred Stock -- -- -- (.13) --
-------- -------- -------- -------- --------
Total effect of Preferred Stock activity (.23) (.26) (.20) (.30) --
-------- -------- -------- -------- --------
Net asset value, end of period $ 15.10 $ 15.12 $ 13.60 $ 16.30 $ 14.14
======== ======== ======== ======== ========
Market price per share, end of period $ 14.75 $ 14.125 $ 11.25 $ 16.50 $ 15.00
======== ======== ======== ======== ========
Total Investment Based on market price per share 10.93% 33.88% (27.05%) 16.25% .00%+++
Return:* ======== ======== ======== ======== ========
Based on net asset value per share 6.09% 18.55% (10.73%) 21.83% (.28%)+++
======== ======== ======== ======== ========
<PAGE>
Ratios to Average Expenses, net of reimbursement .72% .72% .75% .57% --
Net Assets:** ======== ======== ======== ======== ========
Expenses .72% .72% .75% .72% --
======== ======== ======== ======== ========
Investment income--net 5.13% 5.36% 5.14% 5.19% --
======== ======== ======== ======== ========
Supplemental Net assets, net of Preferred Stock, end
Data: of period (in thousands) $124,948 $124,639 $112,110 $133,555 $112,666
======== ======== ======== ======== ========
Preferred Stock outstanding, end of
period (in thousands) $ 56,000 $ 56,000 $ 56,000 $ 56,000 --
======== ======== ======== ======== ========
Portfolio turnover 37.08% 39.36% 21.47% 9.10% --
======== ======== ======== ======== ========
Leverage: Asset coverage per $1,000 $ 3,231 $ 3,226 $ 3,002 $ 3,385 --
======== ======== ======== ======== ========
Dividends Per Share Investment income--net $ 860 $ 956 $ 708 $ 599 --
On Preferred Stock ======== ======== ======== ======== ========
Outstanding:++++++
<FN>
*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 November 30, 1992.
++++++Dividends per share have been adjusted to reflect a two-for-
one stock split that occurred on December 1, 1994.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
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.
<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 and assets for
which market quotations are not readily available are valued at fair
value as determined in good faith by or under the direction of the
Board of Directors of the Fund, including valuations furnished by a
pricing service retained by the Fund, which may utilize a matrix
system for valuations. The procedures of the pricing service and its
valuations are reviewed by the officers of the Fund under the
general supervision of the Board of Directors.
(b) Derivative financial instruments -- The Fund may engage in
various portfolio strategies to seek to increase its return by
hedging its portfolio against adverse movements in the debt markets.
Losses may arise due to changes in the value of the contract or if
the counterparty does not perform under the contract.
* Financial futures contracts -- The Fund may purchase or sell
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. 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).
<PAGE>
Written and purchased options are non-income producing investments.
(c) Income taxes -- It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute substantially all of its
taxable income to its shareholders. Therefore, no Federal income tax
provision is required.
(d) Security transactions and investment income -- Security
transactions are recorded on the dates the transactions are entered
into (the trade dates). Interest income is recognized on the accrual
basis. Discounts and market premiums are amortized into interest
income. Realized gains and losses on security transactions are
determined on the identified cost basis.
NOTES TO FINANCIAL STATEMENTS (concluded)
(e) Deferred organization expenses -- Deferred organization expenses
are amortized on a straight-line basis over a five-year period.
(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.
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.
<PAGE>
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the year ended October 31, 1996 were $66,400,522 and
$63,865,405, respectively.
Net realized and unrealized gains (losses)as of October 31, 1996
were as follows:
Realized Unrealized
Gains (Losses) Gains
Long-term investments $ 712 $10,654,891
Short-term investments 6 --
Financial futures contracts (1,108,445) --
----------- -----------
Total $(1,107,727) $10,654,891
=========== ===========
As of October 31, 1996, net unrealized appreciation for Federal
income tax purposes aggregated $10,654,891, of which $10,661,934
related to appreciated securities and $7,043 related to depreciated
securities. The aggregate cost of investments at October 31, 1996
for Federal income tax purposes was $166,802,993.
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 holders of Common Stock.
Common Stock
For the year ended October 31, 1996, shares issued and outstanding
increased by 32,237 to 8,273,404. At October 31, 1996, total paid-in
capital amounted to $116,257,551.
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, 1996 was 3.05%.
As of October 31, 1996, there were 2,240 AMPS shares authorized,
issued and outstanding with a liquidation preference of $25,000 per
share.
<PAGE>
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, 1996, MLPF&S, an affiliate of FAM, earned $105,481 as
commissions.
5. Capital Loss Carryforward:
At October 31, 1996, the Fund had a net capital loss carryforward of
approximately $714,000, of which $284,000 expires in 2002 and
$430,000 expires in 2004. This amount will be available to offset
like amounts of any future taxable gains.
6. Subsequent Event:
On November 8, 1996, the Fund's Board of Directors declared an
ordinary income dividend to Common Stock shareholders in the amount
of $.074691 per share, payable on November 27, 1996 to shareholders
of record as of November 18, 1996.
<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, 1996, 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 four-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, 1996 by correspondence with the custodian. 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.
<PAGE>
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, 1996, 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.
Deloitte & Touche LLP
Princeton, New Jersey
December 3, 1996
</AUDIT-REPORT>
IMPORTANT TAX INFORMATION (UNAUDITED)
All of the net investment income distributions paid by MuniYield New
Jersey Insured Fund, Inc. during its taxable year ended October 31,
1996 qualify as tax-exempt interest dividends for Federal income tax
purposes. Additionally, there were no capital gains distributed by
the Fund during the year.
Please retain this information for your records
