MUNIYIELD
NEW JERSEY
INSURED
FUND, INC.
[FUND LOGO]
STRATEGIC
Performance
Semi-Annual Report
April 30, 1997
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 #16492 -- 4/97
MuniYield New Jersey Insured Fund, Inc.
TO OUR SHAREHOLDERS
For the six-month period ended April 30, 1997, the Common Stock of
MuniYield New Jersey Insured Fund, Inc. earned $0.445 per share income
dividends, which included earned and unpaid dividends of $0.073. This
represents a net annualized yield of 6.02%, based on a month-end per
share net asset value of $14.90. Over the same period, the total
investment return on the Fund's Common Stock was +1.65%, based on a
change in per share net asset value from $15.10 to $14.90, and assuming
reinvestment of $0.447 per share income dividends.
For the six-month period ended April 30, 1997, the Fund's Auction Market
Preferred Stock had an average yield of 2.85%.
The Municipal Market Environment
Long-term tax-exempt revenue bonds traded in a relatively narrow range
throughout much of the six months ended April 30, 1997. By mid-January
1997, municipal bond yields had risen to over 6% as investors reacted
negatively to reports of progressively stronger domestic economic
growth. However, a continued lack of any material inflationary pressures
allowed bond yields to decline to their prior levels by late February.
Bond yields rose again as investors became increasingly concerned that
the US domestic economic strength seen thus far in 1997 would continue
and that the increase in short-term interest rates administered by the
Federal Reserve Board (FRB) in late March would be the first in a series
of such moves designed to slow the US economy before any dormant
inflationary pressures were awakened. Long-term tax-exempt bond yields
rose approximately 15 basis points (0.15%) to almost 6.15% by mid-April.
Similarly, long-term US Treasury bond yields rose over 35 basis points
over the same period to 7.16%. However, in late April economic
indicators were released showing that despite considerable economic
growth, any inflationary pressures, particularly those associated with
wage increases, were well-contained and of no immediate concern. Fixed-
income bond prices staged a significant rally during the last week of
April with long-term US Treasury bond yields falling nearly 20 basis
points to end the month at 6.95%. Municipal bond yields, as measured by
the Bond Buyer Revenue Bond Index, declined nearly 15 basis points to
stand at 6.01% by April 30, 1997.
As in recent quarters, the relative stability of long-term tax-exempt
bond yields was supported by low levels of new municipal bond issuance.
Over the past six months, approximately $90 billion in long-term tax-
exempt bonds was underwritten, a decline of more than 6% versus the
corresponding period a year earlier. During the three months ended April
30, 1997, $41 billion in new long-term municipal bonds was issued, also
a 6% decline in issuance as compared to the three-month period ended
April 30, 1996. Overall investor demand has remained strong,
particularly from property and casualty insurance companies and
individual retail investors. In recent years, investor demand has
increased whenever tax-exempt bond yields have approached or exceeded
the 6% level as they have in the past few months.
Additionally, in recent months much of the new bond issuance was
dominated by a number of larger issues. These included $710 million in
New York City water bonds, $600 million in state of California bonds, $1
billion in New York City general obligation bonds, $435 million in Dade
County, Florida water and sewer revenue bonds, $450 million in Puerto
Rico Electric Authority issues, and $930 million in Port Authority of
New York and New Jersey issues. These bonds have typically been issued
in states with relatively high state income taxes and consequently
generally were underwritten at yields that were relatively unattractive
to residents in other states. This has exacerbated the general decline
in overall issuance in recent years, making the decrease in supply even
more dramatic for general market investors.
The present economic situation remains nearly ideal. The domestic
economy continues to grow steadily with little, if any, sign of a
resurgence in inflation. Recent economic growth generated considerable
unexpected tax revenues for the Federal government. Forecasts for the
1997 Federal fiscal deficit were reduced to under $100 billion, a level
not seen since the early 1980s. Such a reduced Federal deficit enhances
the prospect for a balanced Federal budget. All of these factors support
a scenario of steady, or even falling, interest rates in the coming
years. Present annual estimates of future municipal bond issuance remain
centered around $175 billion, indicating that the current relative
scarcity of tax-exempt bonds should continue for at least the remainder
of the year. Should interest rates begin to decline later this year,
either as the result of a balanced Federal budget or continued benign
inflation, investors are unlikely to be able to purchase long-term
municipal bonds at their currently attractive levels.
Portfolio Strategy
During the past six months, we generally maintained a cautious approach
toward the fixed-income market since powerful economic growth was
effectively neutralized by tame inflation reports. However, this strong
growth/low inflation scenario may have ended in late March as the FRB
decided to strike preemptively against a future rise in inflation by
tightening monetary policy.
Historically, once the FRB chooses to see economic growth slow down, it
is reasonable to expect several additional increases in short-term
interest rates over the following six months -- twelve months. This is
referred to as a tightening cycle, and long-term interest rates
typically rise along with short-term interest rates until the economic
growth falters. Although taxable yields could rise as high as 7.50% from
the current level of 6.90% during the tightening cycle, we expect the
impact on municipal bond yields to be muted in response to the
combination of scarce New Jersey supply and increasing retail investor
demand as municipal bonds yield 6% or higher.
The Fund is currently well-positioned for such a turn of events as a
substantial portion of its holdings are in bonds which traditionally
appeal to individual or retail investors and therefore are likely to
outperform other issues in a declining market. As tax-exempt interest
rates rise toward 6%, we are prepared to swap these retail bonds for
aggressively structured and higher-yielding securities. This will allow
us to more fully participate in the bond market rally we expect later
in the year should economic growth finally begin to falter as a result
of tighter monetary policy. If a Federal budget agreement which is deemed
to be credible by bond market investors is enacted, the decline in yields
could happen sooner than anticipated as further FRB tightenings may not
then be needed. Should this occur, we are prepared to quickly adopt a more
aggressive stance in the bond market. We would expect the Fund to benefit
from a sharp drop in interest rates as many of the portfolio's higher-coupon
bonds can be advance refunded, providing a boost to the Fund's total return.
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,
/S/ARTHUR ZEIKEL
Arthur Zeikel
President
/S/VINCENT R. GIORDANO
Vincent R. Giordano
Senior Vice President
/S/WILLIAM M. PETTY
William M. Petty
Vice President and Portfolio Manager
June 5, 1997
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. 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.
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 Bonds
M/F Multi-Family
PCR Pollution Control Revenue Bonds
RITR Residual Interest Trust Receipts
UT Unlimited Tax
VRDN Variable Rate Demand Notes
<TABLE>
<CAPTION>
MuniYield New Jersey Insured Fund, Inc. April 30, 1997
SCHEDULE OF INVESTMENTS (in Thousands)
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
<S> <C> <C> <C> <C>
New Jersey -- 96.1%
Atlantic City, New Jersey, Board of Education, GO, UT (d):
AAA Aaa $4,600 6.15% due 12/01/2013 $4,783
AAA Aaa 2,000 6.15% due 12/01/2015 2,071
AAA Aaa 6,000 Bergen County, New Jersey, Utilities Authority, Water PCR, Series A,
6.50% due 6/15/2002 (b)(f) 6,544
AAA Aaa 5,600 Brick Township, New Jersey, Municipal Utilities Authority, Revenue Refunding
Bonds, 5% due 12/01/2016 (b) 5,184
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) 5,415
AAA Aaa 3,010 Carteret, New Jersey, Board of Education, COP, GO, 6.75% due 10/15/2019 (c) 3,297
Essex County, New Jersey, Improvement Authority Revenue Bonds:
AAA Aaa 2,800 (Irvington Township School District), 6.625% due 10/01/2002 (e)(f) 3,080
AAA Aaa 2,245 (Orange Township School District), UT, Series B, 6.95% due 7/01/2014 (c) 2,503
AAA Aaa 1,120 (Parking Facility), 6.20% due 7/01/2022 (c) 1,160
AAA Aaa 2,450 Highland Park, New Jersey, School District, GO, UT, 6.55% due 2/15/2005 (c)(f) 2,726
AAA Aaa 3,630 Hoboken, Union City, Weehawken, New Jersey, Sewer Authority, Revenue Refunding
Bonds, 6.20% due 8/01/2019 (c) 3,767
AAA Aaa 7,600 Hudson County, New Jersey, COP, Refunding (Correctional Facilities), 6.60%
due 12/01/2021 (c) 8,144
AAA Aaa 4,750 Jersey City, New Jersey, Sewer Authority, Revenue Refunding Bonds, 6.25%
due 1/01/2014 (d) 5,108
NR* NR* 5,750 Middlesex County, New Jersey, Pollution Control Financing Authority, Revenue
Refunding Bonds (Amerada Hess), 6.875% due 12/01/2022 6,055
AAA Aaa 2,305 New Jersey, EDA, Educational Testing Services Revenue Bonds, Series B, 6.125%
due 5/15/2015 (c) 2,392
A+ A1 1,000 New Jersey, EDA, Lease Revenue Bonds (Riverview Office), Series A, 5.375% due
1/15/2016 950
AAA Aaa 4,500 New Jersey, EDA, Natural Gas Facilities, Revenue Refunding Bonds (NUI Corp.),
Series A, 6.35% due 10/01/2022 (d) 4,734
New Jersey, EDA, Revenue Bonds (e):
AAA Aaa 3,650 (Clara Maass Health Systems), 5% due 7/01/2025 3,284
AAA Aaa 1,150 (State Contract Economic Recovery), Series A, 6% due 3/15/2021 1,168
AAA Aaa 2,835 New Jersey, EDA, Revenue Refunding Bonds (RJW Health Care Corporation),
6.50% due 7/01/2024 (e) 3,020
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) 1,571
AAA Aaa 6,355 (Holy Name Hospital), Series B, 6.75% due 7/01/2000 (d)(f) 6,742
AAA Aaa 5,445 (Mercer Medical Center), 6.50% due 7/01/2021 (c) 5,788
BBB Baa2 1,200 Refunding (Englewood Hospital and Medical Center), 6.70% due 7/01/2015 1,262
AAA Aaa 3,685 Refunding (Hackensack Medical Center), 6.625% due 7/01/2017 (b) 3,935
AAA Aaa 3,000 Refunding (Holy Name Hospital), 6% due 7/01/2025 (d) 2,957
AAA Aaa 4,000 Refunding (JFK Health Systems Obligated Group), 6.70% due 7/01/2021 (b) 4,283
BBB Baa2 4,000 Refunding (Saint Elizabeth Hospital Obligated Group), 6% due 7/01/2027 3,946
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 2,160
AAA Aaa 8,630 6.25% due 7/01/2020 8,977
AAA Aaa 2,000 New Jersey State Educational Facilities Authority Revenue Bonds (Montclair State
University), Series E, 6.50% due 7/01/2021 (d) 2,121
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) 4,237
New Jersey State Housing and Mortgage Finance Agency, M/F Housing Revenue
Refunding Bonds:
AAA NR* 3,700 (Presidential Plaza), 7% due 5/01/2030 (g) 3,961
AAA Aaa 4,750 Series A, 6.05% due 11/01/2020 (d) 4,810
AAA Aaa 5,350 New Jersey State Transportation Corporation, COP (Raymond Plaza East,
Incorporated), 6.50% due 10/01/2016 (e) 5,726
New Jersey State Transportation Trust Fund Authority Revenue Bonds
(Transportation System), Series A (c):
AAA Aaa 4,250 4.75% due 12/15/2016 3,781
AAA Aaa 3,800 Refunding, Series A, 5% due 6/15/2015 3,530
AAA Aaa 5,000 New Jersey Wastewater Treatment Trust, Loan Insured Revenue Bonds, Series B,
6.25% due 5/01/2012 (c) 5,254
AAA Aaa 3,500 North Hudson, New Jersey, Sewer Authority Revenue Bonds, 5.125% due 8/01/2022 (b) 3,241
AAA Aaa 3,490 Passaic Valley, New Jersey, Water Commission, Water Supply Revenue Bonds,
Series A, 6.40% due 12/15/2002 (b)(f) 3,810
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 3,720
AAA Aaa 4,000 Refunding, 97th Series, UT, 6.65% due 1/15/2023 4,257
AAA Aaa 4,000 Port Authority of New York and New Jersey, RITR, AMT, 108th Series, 7.585%
due 1/15/2017 (e)(h) 4,080
Port Authority of New York and New Jersey, Special Obligation Revenue Bonds
(Versatile Structure Obligation), VRDN (a):
A1+ VMIG1+ 1,000 Series 2, 4.30% due 5/01/2019 1,000
A1+ VMIG1+ 900 Series 3, 4.20% due 6/01/2020 900
AAA Aaa 1,180 South Brunswick Township, New Jersey, Board of Education, GO, UT, 6.40%
due 8/01/2021 (b) 1,241
Puerto Rico -- 2.8%
A Baa1 5,400 Puerto Rico Commonwealth, Highway and Transportation Authority, Highway Revenue
Bonds, Series Y, 5.50% due 7/01/2026 5,072
Total Investments (Cost -- $169,668) -- 98.9% 177,747
Other Assets Less Liabilities -- 1.1% 1,916
--------
Net Assets -- 100.0% $179,663
========
(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, 1997.
(b) FGIC Insured.
(c) MBIA Insured.
(d) AMBAC Insured.
(e) FSA Insured.
(f) Prerefunded.
(g) FHA Insured.
(h) The interest rate is subject to change periodically and inversely
based upon prevailing market rates. The interest rate shown is
the rate in effect at April 30, 1997.
* Not Rated.
+ Highest short-term rating by Moody's Investors Services, Inc.
See Notes to Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL INFORMATION
Statement of Assets, Liabilities and Capital as of April 30, 1997
<S> <C> <C> <C>
Assets: Investments, at value (identified cost -- $169,668,356) (Note 1a) $177,747,146
Cash 75,546
Receivables:
Interest $3,425,504
Securities sold 148,500 3,574,004
------------
Deferred organization expenses (Note 1e) 2,872
Prepaid expenses and other assets 7,101
------------
Total assets 181,406,669
------------
Liabilities: Payables:
Securities purchased 1,405,248
Dividends to shareholders (Note 1f) 208,692
Investment adviser (Note 2) 73,285 1,687,225
------------
Accrued expenses and other liabilities 56,479
------------
Total liabilities 1,743,704
------------
Net Assets: Net assets $179,662,965
============
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 (8,300,861 shares issued
and outstanding) $830,086
Paid-in capital in excess of par 115,841,908
Undistributed investment income -- net 947,273
Accumulated realized capital losses on investments -- net (Note 5) (2,035,092)
Unrealized appreciation on investments -- net 8,078,790
------------
Total -- Equivalent to $14.90 net asset value per share of Common Stock
(market price -- $14.625) 123,662,965
------------
Total capital $179,662,965
============
* Auction Market Preferred Stock.
See Notes to Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of Operations
For the Six Months Ended
April 30, 1997
<S> <C> <C> <C>
Investment Income Interest and amortization of premium and discount earned $5,271,713
(Note 1d):
Expenses: Investment advisory fees (Note 2) $449,021
Commission fees (Note 4) 69,029
Professional fees 33,535
Accounting services (Note 2) 24,568
Transfer agent fees 18,605
Directors' fees and expenses 11,198
Printing and shareholder reports 9,991
Listing fees 8,059
Custodian fees 5,377
Pricing fees 3,425
Amortization of organization expenses (Note 1e) 1,423
Other 6,432
--------
Total expenses 640,663
-------------
Investment income -- net 4,631,050
-------------
Realized & Realized gain on investments -- net 740,988
Unrealized Change in unrealized appreciation on investments -- net (2,576,101)
Gain (Loss) on -------------
Investments -- Net Net Increase in Net Assets Resulting from Operations $2,795,937
(Notes 1b, 1d & 3): =============
See Notes to Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
Statements of Changes in Net Assets
For the Six For the Year
Months Ended Ended
April 30, October 31,
Increase (Decrease) in Net Assets: 1997 1996
<S> <C> <C> <C>
Operations: Investment income -- net $4,631,050 $9,263,389
Realized gain (loss) on investments -- net 740,988 (1,107,727)
Change in unrealized appreciation on investments -- net (2,576,101) 898,090
------------- -------------
Net increase in net assets resulting from operations 2,795,937 9,053,752
------------- -------------
Dividends to Investment income -- net:
Shareholders Common Stock (3,702,923) (7,293,937)
(Note 1f): Preferred Stock (792,644) (1,926,086)
------------- -------------
Net decrease in net assets resulting from dividends to shareholders (4,495,567) (9,220,023)
------------- -------------
Capital Stock Value of shares issued to Common Stock shareholders in reinvestment
Transactions of dividends 414,443 475,113
(Note 4): ------------- -------------
Net increase in net assets derived from capital stock transactions 414,443 475,113
------------- -------------
Net Assets: Total increase (decrease) in net assets (1,285,187) 308,842
Beginning of period 180,948,152 180,639,310
------------- -------------
End of period* $179,662,965 $180,948,152
============= =============
* Undistributed investment income -- net $947,273 $811,790
============= =============
See Notes to Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
Financial Highlights
For the
Six
The following per share data and ratios have been derived Months
from information provided in the financial statements. Ended For the Year Ended
April 30, October 31,
Increase (Decrease) in Net Asset Value: 1997 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $15.10 $15.12 $13.60 $16.30 $14.14
Operating --------- --------- --------- --------- ---------
Performance: Investment income -- net .56 1.12 1.13 1.13 1.11
Realized and unrealized gain (loss) on investments
-- net (.21) (.03) 1.52 (2.67) 2.21
--------- --------- --------- --------- ---------
Total from investment operations .35 1.09 2.65 (1.54) 3.32
--------- --------- --------- --------- ---------
Less dividends and distributions to Common
Stock shareholders:
Investment income -- net (.45) (.88) (.87) (.93) (.86)
Realized gain on investments -- net -- -- -- (.03) --
--------- --------- --------- --------- ---------
Total dividends and distributions to Common
Stock shareholders (.45) (.88) (.87) (.96) (.86)
--------- --------- --------- --------- ---------
Effect of Preferred Stock activity:
Dividends and distributions to Preferred
Stock shareholders:
Investment income -- net (.10) (.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 (.10) (.23) (.26) (.20) (.30)
--------- --------- --------- --------- ---------
Net asset value, end of period $14.90 $15.10 $15.12 $13.60 $16.30
========= ========= ========= ========= =========
Market price per share, end of period $14.625 $14.750 $14.125 $11.25 $16.50
========= ========= ========= ========= =========
Total Investment Based on market price per share 2.15%++++ 10.93% 33.88% (27.05%) 16.25%
Return:** ========= ========= ========= ========= =========
Based on net asset value per share 1.65%++++ 6.09% 18.55% (10.73%) 21.83%
========= ========= ========= ========= =========
Ratios to Average Expenses, net of reimbursement .71%* .72% .72% .75% .57%
Net Assets:*** ========= ========= ========= ========= =========
Expenses .71%* .72% .72% .75% .72%
========= ========= ========= ========= =========
Investment income -- net 5.16%* 5.13% 5.36% 5.14% 5.19%
========= ========= ========= ========= =========
Supplemental Net assets, net of Preferred Stock, end of period
Data: (in thousands) $123,663 $124,948 $124,639 $112,110 $133,555
========= ========= ========= ========= =========
Preferred Stock outstanding, end of period
(in thousands) $56,000 $56,000 $56,000 $56,000 $56,000
========= ========= ========= ========= =========
Portfolio turnover 14.56% 37.08% 39.36% 21.47% 9.10%
========= ========= ========= ========= =========
Leverage: Asset coverage per $1,000 $3,208 $3,231 $3,226 $3,002 $3,385
========= ========= ========= ========= =========
Dividends Per Share Investment income -- net $354 $860 $956 $708 $599
On Preferred Stock ========= ========= ========= ========= =========
Outstanding:+
* 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.
+ 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>
MuniYield New Jersey Insured Fund, Inc. April 30, 1997
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. These unaudited financial statements
reflect all adjustments which are, in the opinion of management,
necessary to a fair statement of the results for the interim period
presented. All such adjustments are of normal recurring nature. The Fund
determines and makes available for publication the net asset value of
its Common Stock on a weekly basis. The Fund's Common Stock is listed on
the New York Stock Exchange under the symbol 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 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.
[bullet] 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.
[bullet] Options -- The Fund is authorized to write covered call options
and purchase put options. When the Fund writes an option, an amount
equal to the premium received by the Fund is reflected as an asset and
an equivalent liability. The amount of the liability is subsequently
marked to market to reflect the current market value of the option
written. When a security is purchased or sold through an exercise of an
option, the related premium paid (or received) is added to (or deducted
from) the basis of the security acquired or deducted from (or added to)
the proceeds of the security sold. When an option expires (or the Fund
enters into a closing transaction), the Fund realizes a gain or loss on
the option to the extent of the premiums received or paid (or gain or
loss to the extent the cost of the closing transaction exceeds the
premium paid or received).
Written and purchased options are non-income producing investments.
(c) Income taxes -- It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute substantially all of its taxable
income to its shareholders. Therefore, no Federal income tax provision
is required.
(d) Security transactions and investment income -- Security transactions
are recorded on the dates the transactions are entered into (the trade
dates). Interest income is recognized on the accrual basis. Discounts
and market premiums are amortized into interest income. Realized gains
and losses on security transactions are determined on the identified
cost basis.
(e) 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, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities, for
the six months ended April 30, 1997 were $25,615,816 and $27,921,958,
respectively.
Net realized and unrealized gains as of April 30, 1997 were as follows:
Realized Unrealized
Gains Gains
Long-term investments $740,988 $8,078,790
----------- -----------
Total $740,988 $8,078,790
=========== ===========
As of April 30, 1997, net unrealized appreciation for Federal income tax
purposes aggregated $8,078,790, of which $8,253,000 related to
appreciated securities and $174,210 related to depreciated securities.
The aggregate cost of investments at April 30, 1997 for Federal income
tax purposes was $169,668,356.
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 auth-
orized, however, to reclassify any unissued shares of capital stock
without approval of holders of Common Stock.
Common Stock
For the six months ended April 30, 1997, shares issued and outstanding
increased by 27,457 to 8,300,861 as a result of dividend reinvestment.
At April 30, 1997, total paid-in capital amounted to $116,671,994.
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, 1997 was 4.15%.
As of April 30, 1997, there were 2,240 AMPS shares authorized, issued
and outstanding with a liquidation preference of $25,000 per share.
The Fund pays commissions to certain brokerdealers at the end of each
auction at an annual rate ranging from 0.25% to 0.375% calculated on
the proceeds of each auction. For the six months ended April 30, 1997,
Merrill Lynch, Pierce, Fenner & Smith Inc., an affiliate of FAM, earned
$57,451 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 May 9, 1997, the Fund's Board of Directors declared an ordinary
income dividend to Common Stock shareholders in the amount of $.072723
per share, payable on May 29, 1997 to shareholders of record as of May
19, 1997.
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
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
Patrick D. Sweeney, Secretary
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
