MUNIYIELD
NEW JERSEY
INSURED
FUND, INC.
FUND LOGO
Semi-Annual Report
April 30, 1998
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
Printed on post-consumer recycled paper
MuniYield New Jersey Insured Fund, Inc.
TO OUR SHAREHOLDERS
For the six months ended April 30, 1998, the Common Stock of
MuniYield New Jersey Insured Fund, Inc. earned $0.435 per share
income dividends, which included earned and unpaid dividends of
$0.070. This represents a net annualized yield of 5.69%, based on a
month-end per share net asset value of $15.41. Over the same period,
the total investment return on the Fund's Common Stock was +2.47%,
based on a change in per share net asset value from $15.49 to
$15.41, and assuming reinvestment of $0.443 per share income
dividends and $0.019 per share capital gains distributions.
For the six-month period ended April 30, 1998, the Fund's Auction
Market Preferred Stock had an average yield of 3.49%.
The Municipal Market Environment
During the six months ended April 30, 1998, bond yields generally
moved lower, and by mid-January 1998 had declined to recent historic
lows. Long-term US Treasury bond yields declined 20 basis points
(0.20%) during the same period and stood at 5.95% by April 30, 1998.
Similarly, long-term uninsured tax-exempt bond yields, as measured
by the Bond Buyer Revenue Bond Index, fell approximately 35 basis
points to 5.25%, a level not seen since the mid-1970s. While low
inflation has supported lower interest rates, much of the decline in
bond yields in late 1997 and early 1998 was driven more by the
turmoil in Asian financial markets than by domestic economic
fundamentals. Weak economic conditions in Asia were expected to
negatively impact US growth through reduced export demand.
Additionally, inflation in the United States was also expected to
decline in response to lower prices on goods imported from Asian
manufacturers.
However, in recent months, many investors have become increasingly
concerned that most of the downturn in Asia, especially in Japan,
has already occurred and any future deterioration will not be severe
enough to constrain US economic growth and inflationary pressures.
These concerns served to push interest rates higher in the latter
part of the period, causing fixed-income yields to retrace much of
their earlier gains.
Thus far in 1998, the municipal bond market has experienced
unexpectedly strong supply pressures. These supply pressures have
prevented tax-exempt bond yields from declining as much as US
Treasury bonds. Over the last six months, more than $135 billion in
new tax-exempt bonds were underwritten, an increase of over 40%
compared to the same period a year ago. During the last three
months, municipalities issued over $72 billion in new securities, an
increase of more than 60% compared to the same three-month period in
1997. Additionally, corporate issuers have also viewed current
interest rate levels as an opportunity to issue significant amounts
of taxable securities. Thus far in 1998, over $100 billion in
investment-grade corporate bonds have been underwritten, an increase
of more than 60% relative to the comparable period a year ago. This
sizeable corporate bond issuance has tended to support generally
higher fixed-income yields and reduce the demand for tax-exempt
bonds.
However, the recent pace of new municipal bond issuance is unlikely
to be maintained. Continued increases in bond issuance will require
lower and lower tax-exempt bond yields to generate the economic
savings necessary for additional municipal bond refinancings.
Preliminary estimates for 1998 total municipal bond issuance are
presently in the $200 billion--$225 billion range. These estimates
suggest that recent supply pressures are likely to abate later in
the year. Municipal bond investors received approximately $30
billion earlier this year in coupon payments, bond maturities and
proceeds from early redemptions. The demand generated by these
assets has helped offset the increase in supply seen thus far this
year. Furthermore, looking ahead, June and July have also tended to
be periods of strong investor demand as seasonal factors are likely
to generate strong income flows similar to those seen earlier this
year.
MuniYield New Jersey Insured Fund, Inc.
April 30, 1998
It is also possible that at least some of the recent economic
strength seen in the United States will be reversed in the coming
months. A particularly mild winter has been partially responsible
for a strong housing sector, as well as other construction
industries. This recent strong trend may not be sustained and may
lead to weaker construction growth later this year. Additionally,
strong economic growth in 1997 and the increased use of electronic
tax filing have resulted in larger and earlier Federal and state
income tax refunds to many individuals. These refunds appear to have
supported strong consumer spending in recent months, but may be
borrowing against weaker spending later this year. In addition, the
continued impact of the Asian financial crisis on the US domestic
economy's future growth remains unclear. Barring a dramatic and
unexpected resurgence of domestic inflation, we do not believe that
the Federal Reserve Board will be willing to raise interest rates
until the full impact of the Asian situation can be established.
All these factors suggest that over the near term, tax-exempt as
well as taxable bond yields are unlikely to rise by any appreciable
amount. Recent supply pressures have caused municipal bond yield
ratios to rise relative to US Treasury bond yields. At April 30,
1998, long-term tax-exempt bond yields were at attractive yield
ratios relative to comparable US Treasury securities (over 90%), and
well in excess of their expected range of 85%--88%. Any further
pressure upon the municipal market may well represent a very
attractive investment opportunity.
Portfolio Strategy
Given the volatile environment during the six months ended April 30,
1998, MuniYield New Jersey Insured Fund, Inc. benefited from our
relatively conservative strategy, motivated primarily by our efforts
to maintain a competitive dividend as well as to preserve the gains
we achieved. Our strategy to keep the Fund fully invested provided a
positive contribution to the overall performance of the Fund as
interest rates broadly declined through the latter part of 1997.
Since then, however, our conservative strategy has insulated the
Fund from much of the volatility experienced during the first
quarter of 1998.
The New Jersey economy continues to improve as the state
unemployment rate dropped to 5.1% as of March 31, 1998. Furthermore,
various measures of economic growth, including employment, new
business incorporations, per capita personal income and gross state
product continue to reflect an economy growing at a pace similar to
the nation.
Looking ahead, we anticipate little change in our position, barring
a further rise in long-term interest rates. In our opinion, such a
scenario would provide an opportunity to further pursue our strategy
to extend the portfolio's average call protection. Until recently,
we have been reluctant to explore this approach given the extent of
the bond market rally. With long-term municipal yields beginning to
approach more reasonable levels on both an absolute and a relative
basis, our positive long-term outlook for interest rates may well
warrant a more aggressive pursuit of this strategy.
MuniYield New Jersey Insured Fund, Inc.
April 30, 1998
Leverage continues to benefit the Fund's Common Stock shareholders
as the Fund's cost of borrowing, as reflected by short-term tax-
exempt interest rates, remains well below the yields available on
long-term municipal bonds. The proceeds of the borrowing can be
invested in these long-term bonds, thereby providing an incremental
yield advantage over an unleveraged tax-exempt investment. While
leverage creates opportunities for yield enhancement, it also
produces a higher degree of volatility. For this reason, we have
sought to maintain a relatively low duration as a means to limit
this inherent volatility until such time as the interest rate
outlook comes into full view. However, should the spread between
short-term and long-term interest rates narrow, the benefits of
leverage will decline, and as a result reduce the yield to the
Fund's Common Stock. (For a complete explanation of the benefits and
risks of leveraging, see page 4 of this report to shareholders.)
In Conclusion
We thank you for your continued investment 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,
(Arthur Zeikel)
Arthur Zeikel
President
(Vincent R. Giordano)
Vincent R. Giordano
Senior Vice President
(Theodore R. Jaeckel Jr.)
Theodore R. Jaeckel Jr.
Vice President and Portfolio Manager
May 29, 1998
Portfolio Insurance
MuniYield New Jersey Insured Fund, Inc. seeks to provide its
shareholders with the benefits of an insured municipal bond
portfolio. Previously, the Fund generally achieved this objective by
limiting at least 80% of portfolio investments to municipal bonds
insured under policies obtained by the issuer or another party,
including the Fund itself, and issued by insurance carriers with
claims paying ability ratings of AAA or its equivalent from at least
two nationally recognized rating agencies, such as Standard & Poor's
Ratings Services, Moody's Investors Service, Inc., or Fitch IBCA,
Inc. In order to increase the Fund's flexibility to obtain
appropriate investments, the Fund has modified its practice with
respect to the ratings criteria it applies to the carriers that
provide insurance for the municipal bonds in its portfolio.
Currently, the Fund may also invest in municipal bonds insured by,
or may itself purchase an insurance policy for all or a portion of
its municipal bond portfolio from, an insurance carrier with a
claims paying ability rating of AAA or its equivalent from at least
one of such nationally recognized rating agencies. There can be no
assurance that insurance of the kind described above will continue
to be available to the Fund, and the Fund has reserved its right to
modify its criteria for portfolio insurance, or discontinue its
policy of maintaining an insured portfolio if such insurance is no
longer available or if the cost of such insurance outweighs its
benefits to the Fund. Although we periodically review the financial
condition of each insurer, there can be no assurance that the
insurers will be able to honor their obligations under the
circumstances of any claim thereunder.
MuniYield New Jersey Insured Fund, Inc.
April 30, 1998
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.
MANAGED DIVIDEND POLICY
The Fund's dividend policy is to distribute substantially all of its
net investment income to its shareholders on a monthly basis.
However, in order to provide shareholders with a more consistent
yield to the current trading price of shares of Common Stock of the
Fund, the Fund may at times pay out less than the entire amount of
net investment income earned in any particular month and may at
times in any month pay out such accumulated but undistributed income
in addition to net investment income earned in that month. As a
result, the dividends paid by the Fund for any particular month may
be more or less than the amount of net investment income earned by
the Fund during such month. The Fund's current accumulated but
undistributed net investment income, if any, is disclosed in the
Statement of Assets, Liabilities and Capital, which comprises part
of the Financial Information included in this report.
MuniYield New Jersey Insured Fund, Inc.
April 30, 1998
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>
SCHEDULE OF INVESTMENTS (in Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
New Jersey--98.5%
<S> <S> <C> <S> <C>
Atlantic City, New Jersey, Board of Education, GO, UT:
AAA Aaa $4,600 6.15% due 12/01/2002 (d)(f) $ 5,019
AAA Aaa 2,000 6.15% due 12/01/2002 (d)(f) 2,182
AAA Aaa 6,000 Bergen County, New Jersey, Utilities Authority, Water PCR, Series A, 6.50% due
6/15/2002 (b)(f) 6,588
AA A1 1,135 Bernards Township, New Jersey, School District, Refunding, UT, 5.30% due
1/01/2020 1,136
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) 5,535
AAA Aaa 3,010 Carteret, New Jersey, Board of Education, COP, GO, 6.75% due 10/15/2019 (c) 3,359
East Orange, New Jersey, Board of Education, COP, GO (AGHLeasing Inc.) (e):
AAA Aaa 1,000 5.22%** due 8/01/2014 432
AAA Aaa 1,045 5.25%** due 2/01/2017 391
AAA Aaa 1,000 5.30%** due 2/01/2024 256
AAA Aaa 2,845 5.28%** due 8/01/2024 709
AAA Aaa 1,845 5.36%** due 8/01/2027 390
Essex County, New Jersey, Improvement Authority Revenue Bonds:
AAA Aaa 2,800 (Irvington Township School District), 6.625% due 10/01/2002 (e)(f) 3,102
AAA Aaa 2,245 (Orange Township School District), UT, Series B, 6.95% due 7/01/2014 (c) 2,567
AAA Aaa 1,120 (Parking Facility), 6.20% due 7/01/2022 (c) 1,192
AAA Aaa 2,450 Highland Park, New Jersey, School District, GO, UT, 6.55% due 2/15/2005 (c)(f) 2,779
AAA Aaa 3,630 Hoboken, Union City, Weehawken, New Jersey, Sewer Authority, Revenue
Refunding Bonds, 6.20% due 8/01/2019 (c) 3,912
AAA Aaa 7,600 Hudson County, New Jersey, COP, Refunding (Correctional Facilities), 6.60%
due 12/01/2021 (c) 8,184
AAA Aaa 4,750 Jersey City, New Jersey, Sewer Authority, Revenue Refunding Bonds, 6.25% due
1/01/2014 (d) 5,378
Metuchen, New Jersey, School District, GO, UT (b):
AAA Aaa 1,010 5.15% due 9/15/2020 991
AAA Aaa 1,065 5.20% due 9/15/2021 1,048
</TABLE>
MuniYield New Jersey Insured Fund, Inc.
April 30, 1998
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
New Jersey (continued)
<S> <S> <C> <S> <C>
NR* NR* $5,750 Middlesex County, New Jersey, Pollution Control Financing Authority,
Revenue Refunding Bonds (Amerada Hess), 6.875% due 12/01/2022 $ 6,269
AAA Aaa 1,735 Middlesex County, New Jersey, Utilities Authority, Sewer Revenue Refunding
Bonds, Series A, 5.25% due 12/01/2011 (b) 1,787
AAA Aaa 2,305 New Jersey EDA, Educational Testing Services Revenue Bonds, Series B,
6.125% due 5/15/2015 (c) 2,487
New Jersey EDA, First Mortgage Revenue Refunding Bonds (Fellowship Village),
Series A:
BBB- NR* 1,700 5.50% due 1/01/2018 1,660
BBB- NR* 2,000 5.50% due 1/01/2025 1,951
AAA Aaa 4,500 New Jersey EDA, Natural Gas Facilities Revenue Refunding Bonds (NUI Corp.),
Series A, 6.35% due 10/01/2022 (d) 4,942
New Jersey EDA, Revenue Bonds:
NR* Aaa 3,800 Refunding (Hillcrest Health Services System Project), 5.07%** due 1/01/2018 (d) 1,353
AAA Aaa 2,835 Refunding (RJW Health Care Corporation), 6.50% due 7/01/2024 (e) 3,124
AAA Aaa 1,150 (State Contract Economic Recovery), Series A, 6% due 3/15/2021 (e) 1,215
New Jersey EDA, Revenue Bonds (Saint Barnabas Project) (c):
NR* Aaa 5,195 5.60%** due 7/01/2020 1,612
NR* Aaa 6,665 5.60%** due 7/01/2021 1,964
AAA Aaa 2,500 New Jersey EDA, Water Facilities Revenue Bonds, RITR, AMT, Series 34, 6.32% due
5/01/2032 (b)(h) 2,462
A1+ Aaa 100 New Jersey EDA, Water Facilities Revenue Refunding Bonds (United Water of New
Jersey, Inc. Project), VRDN, AMT, Series A, 4% due 11/01/2026 (a)(d) 100
AAA Aaa 1,000 New Jersey Environmental Infrastructure Trust (Wastewater Treatment), 5% due
9/01/2017 982
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) 1,561
AAA Aaa 6,355 (Holy Name Hospital), Series B, 6.75% due 7/01/2000 (d)(f) 6,701
AAA Aaa 5,445 (Mercer Medical Center), 6.50% due 7/01/2021 (c) 5,832
BBB Baa2 1,200 Refunding (Englewood Hospital and Medical Center), 6.70% due 7/01/2015 1,313
AAA Aaa 3,685 Refunding (Hackensack Medical Center), 6.625% due 7/01/2017 (b) 3,961
BBB+ NR* 3,500 Refunding (Holy Name Hospital), 6% due 7/01/2025 3,632
AAA Aaa 4,000 Refunding (JFK Health Systems Obligation Group), 6.70% due 7/01/2021 (b) 4,308
BBB Baa2 4,000 Refunding (Saint Elizabeth Hospital Obligation Group), 6% due 7/01/2027 4,151
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 2,179
AAA Aaa 8,630 6.25% due 7/01/2020 9,307
AA+ Aaa 1,990 New Jersey State Educational Facilities Authority Revenue Bonds (Institute
Advances Study), Series G, 5% due 7/01/2018 1,953
AAA Aaa 3,860 New Jersey State Housing and Mortgage Finance Agency, Home Buyer Revenue
Bonds, AMT, Series M, 7% due 10/01/2026 (c) 4,182
</TABLE>
MuniYield New Jersey Insured Fund, Inc.
April 30, 1998
<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 Housing and Mortgage Finance Agency, M/F Housing Revenue
Refunding Bonds:
AAA NR* $3,700 (Presidential Plaza), 7% due 5/01/2030 (g) $ 4,002
AAA Aaa 4,750 Series A, 6.05% due 11/01/2020 (d) 5,006
AAA Aaa 5,350 New Jersey State Transportation Corporation, COP (Raymond Plaza East,
Incorporated), 6.50% due 10/01/2016 (e) 6,018
AAA Aaa 5,000 New Jersey Wastewater Treatment Trust, Loan Insured Revenue Bonds, Series B,
6.25% due 5/01/2002 (c)(f) 5,436
AAA Aaa 3,490 Passaic Valley, New Jersey, Water Commission, Water Supply Revenue Bonds,
Series A, 6.40% due 12/15/2002 (b)(f) 3,845
AAA Aaa 1,615 Perth Amboy, New Jersey, Board of Education, Refunding, UT, 5.25% due
8/01/2011 (c) 1,654
Port Authority of New York and New Jersey, Consolidated Revenue Bonds:
AA- A1 1,000 93rd Series, 6.125% due 6/01/1994 1,127
AAA Aaa 3,500 96th Series, AMT, 6.60% due 10/01/2023 (b) 3,822
AAA Aaa 4,000 Refunding, 97th Series, AMT, UT, 6.65% due 1/15/2023 (b) 4,343
AAA Aaa 4,000 Port Authority of New York and New Jersey, RITR, AMT, 108th Series, 7.285%
due 1/15/2017 (e)(h) 4,445
Port Authority of New York and New Jersey, Special Obligation Revenue Bonds
(Versatile Structure Obligation), VRDN (a):
A1+ VMIG1++ 1,200 Series 2, 4% due 5/01/2019 1,200
A1+ VMIG1++ 3,000 Series 5, 4.05% due 8/01/2024 3,000
AAA Aaa 1,180 South Brunswick Township, New Jersey, Board of Education, GO, UT, 6.40% due
8/01/2005 (b)(f) 1,318
A1+ P1 1,700 Union County, New Jersey, Industrial Pollution Control Financing Authority,
PCR, Refunding (Exxon Project), VRDN, 3.80% due 7/01/2033 (a) 1,700
Total Investments (Cost--$171,071)--98.5% 183,054
Other Assets Less Liabilities--1.5% 2,873
--------
Net Assets--100.0% $185,927
========
<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, 1998.
(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, 1998.
*Not Rated.
**Represents a zero coupon bond; the interest rate shown is the
effective yield at the time of purchase by the Fund.
++Highest short-term rating by Moody's Investors Service, Inc.
See Notes to Financial Statements.
</TABLE>
MuniYield New Jersey Insured Fund, Inc.
April 30, 1998
FINANCIAL INFORMATION
<TABLE>
Statement of Assets, Liabilities and Capital as of April 30, 1998
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$171,071,436) (Note 1a) $183,054,318
Cash 15,887
Interest receivable 3,202,921
Prepaid expenses and other assets 5,799
------------
Total assets 186,278,925
------------
Liabilities: Payables:
Dividends to shareholders (Note 1e) $ 228,077
Investment adviser (Note 2) 77,158 305,235
------------
Accrued expenses and other liabilities 46,748
------------
Total liabilities 351,983
------------
Net Assets: Net assets $185,926,942
============
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 (8,432,323 shares
issued and outstanding) $ 843,232
Paid-in capital in excess of par 117,873,551
Undistributed investment income--net 864,922
Accumulated realized capital losses on investments--net (1,637,645)
Unrealized appreciation on investments--net 11,982,882
------------
Total--Equivalent to $15.41 net asset value per share of
Common Stock (market price--$15.3125) 129,926,942
------------
Total capital $185,926,942
============
<FN>
*Auction Market Preferred Stock.
See Notes to Financial Statements.
</TABLE>
MuniYield New Jersey Insured Fund, Inc.
April 30, 1998
FINANCIAL INFORMATION (continued)
<TABLE>
Statement of Operations
<CAPTION>
For the Six Months Ended
April 30, 1998
<S> <S> <C> <C>
Investment Income Interest and amortization of premium and discount earned $ 5,233,986
(Note 1d):
Expenses: Investment advisory fees (Note 2) $ 460,267
Commission fees (Note 4) 68,118
Professional fees 36,491
Accounting services (Note 2) 31,220
Transfer agent fees 19,802
Directors' fees and expenses 12,321
Listing fees 7,934
Printing and shareholder reports 6,744
Custodian fees 6,041
Pricing fees 4,273
Other 7,426
------------
Total expenses 660,637
------------
Investment income--net 4,573,349
------------
Realized & Realized gain on investments--net 742,118
Unrealized Change in unrealized appreciation on investments--net (1,142,287)
Gain (Loss) on ------------
Investments--Net Net Increase in Net Assets Resulting from Operations $ 4,173,180
(Notes 1b, ============
1d & 3):
See Notes to Financial Statements.
</TABLE>
MuniYield New Jersey Insured Fund, Inc.
April 30, 1998
FINANCIAL INFORMATION (continued)
<TABLE>
Statements of Changes in Net Assets
<CAPTION>
For the Six For the
Months Ended Year Ended
Increase (Decrease) in Net Assets: April 30, 1998 Oct. 31, 1997
<S> <S> <C> <C>
Operations: Investment income--net $ 4,573,349 $ 9,390,341
Realized gain on investments--net 742,118 608,732
Change in unrealized appreciation on investments--net (1,142,287) 2,470,278
------------ ------------
Net increase in net assets resulting from operations 4,173,180 12,469,351
------------ ------------
Dividends & Investment income--net:
Distributions to Common Stock (3,714,005) (7,549,301)
Shareholders Preferred Stock (919,722) (1,727,530)
(Note 1e): Realized gain on investments--net:
Common Stock (173,350) --
Preferred Stock (39,065) --
------------ ------------
Net decrease in net assets resulting from dividends and
distributions to shareholders (4,846,142) (9,276,831)
------------ ------------
Capital Stock Value of shares issued to Common Stock shareholders in
Transactions reinvestment of dividends and distributions 832,192 1,627,040
(Note 4): ------------ ------------
Net increase in net assets derived from capital stock
transactions 832,192 1,627,040
------------ ------------
Net Assets: Total increase in net assets 159,230 4,819,560
Beginning of period 185,767,712 180,948,152
------------ ------------
End of period* $185,926,942 $185,767,712
============ ============
<FN>
*Undistributed investment income--net $ 864,922 $ 925,300
============ ============
See Notes to Financial Statements.
</TABLE>
MuniYield New Jersey Insured Fund, Inc.
April 30, 1998
FINANCIAL INFORMATION (concluded)
<TABLE>
Financial Highlights
<CAPTION>
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: 1998 1997 1996 1995 1994
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 15.49 $ 15.10 $ 15.12 $ 13.60 $ 16.30
Operating -------- -------- -------- -------- --------
Performance: Investment income--net .54 1.13 1.12 1.13 1.13
Realized and unrealized gain (loss) on
investments--net. (.05) .38 (.03) 1.52 (2.67)
-------- -------- -------- -------- --------
Total from investment operations .49 1.51 1.09 2.65 (1.54)
-------- -------- -------- -------- --------
Less dividends and distributions to Common
Stock shareholders:
Investment income--net (.44) (.91) (.88) (.87) (.93)
Realized gain on investments--net (.02) -- -- -- (.03)
-------- -------- -------- -------- --------
Total dividends and distributions to Common
Stock shareholders (.46) (.91) (.88) (.87) (.96)
-------- -------- -------- -------- --------
Effect of Preferred Stock activity:
Dividends and distributions to Preferred
Stock shareholders:
Investment income--net (.11) (.21) (.23) (.26) (.19)
Realized gain on investments--net --++ -- -- -- (.01)
-------- -------- -------- -------- --------
Total effect of Preferred Stock activity (.11) (.21) (.23) (.26) (.20)
-------- -------- -------- -------- --------
Net asset value, end of period $ 15.41 $ 15.49 $ 15.10 $ 15.12 $ 13.60
======== ======== ======== ======== ========
Market price per share, end of period $15.3125 $15.8125 $ 14.75 $ 14.125 $ 11.25
======== ======== ======== ======== ========
Total Based on market price per share (.26%)+++ 13.77% 10.93% 33.88% (27.05%)
Investment ======== ======== ======== ======== ========
Return:** Based on net asset value per share 2.47%+++ 8.87% 6.09% 18.55% (10.73%)
======== ======== ======== ======== ========
Ratios to Average Expenses .72%* .72% .72% .72% .75%
Net Assets:*** ======== ======== ======== ======== ========
Investment income--net 4.97%* 5.12% 5.13% 5.36% 5.14%
======== ======== ======== ======== ========
Supplemental Net assets, net of Preferred Stock, end of
Data: period (in thousands) $129,927 $129,768 $124,948 $124,639 $112,110
======== ======== ======== ======== ========
Preferred Stock outstanding, end of period
(in thousands) $ 56,000 $ 56,000 $ 56,000 $ 56,000 $ 56,000
======== ======== ======== ======== ========
Portfolio turnover 22.84% 26.16% 37.08% 39.36% 21.47%
======== ======== ======== ======== ========
Leverage: Asset coverage per $1,000 $ 3,320 $ 3,317 $ 3,231 $ 3,226 $ 3,002
======== ======== ======== ======== ========
Dividends Investment income--net $ 411 $ 771 $ 860 $ 956 $ 708
Per Share ======== ======== ======== ======== ========
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, 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.
++Amount is less than $.01 per share.
++++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, 1998
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 a normal
recurring nature. The Fund determines and makes available for
publication the net asset value of its Common Stock on a weekly
basis. The Fund's Common Stock is listed on the New York Stock
Exchange under the symbol 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.
* Financial futures contracts--The Fund may purchase or sell financial
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).
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.
MuniYield New Jersey Insured Fund, Inc.
April 30, 1998
(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) 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, including proceeds from the
issuance of Preferred Stock.
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, 1998 were $ 41,427,536 and
$42,460,556, respectively.
Net realized gains for the six months ended April 30, 1998 and net
unrealized gains as of April 30, 1998 were as follows:
Realized Unrealized
Gains Gains
Long-term investments $ 742,118 $11,982,882
---------- -----------
Total $ 742,118 $11,982,882
========== ===========
As of April 30, 1998, net unrealized appreciation for Federal income
tax purposes aggregated $11,982,882, of which $12,232,543 related to
appreciated securities and $249,661 related to depreciated
securities. The aggregate cost of investments at April 30, 1998 for
Federal income tax purposes was $171,071,436.
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
Shares issued and outstanding during the six months ended April 30,
1998 and the year ended October 31, 1997, increased by 53,127 and
105,792, respectively, as a result of dividend reinvestment.
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, 1998 was 3.69%.
As of April 30, 1998, 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 broker-dealers at the end of
each auction at an annual rate ranging from 0.25% to 0.375%,
calculated on the proceeds of each auction. For the six months ended
April 30, 1998, Merrill Lynch, Pierce, Fenner & Smith Inc., an
affiliate of FAM, earned $55,424 as commissions.
5. Subsequent Event:
On May 7, 1998, the Fund's Board of Directors declared an ordinary
income dividend to Common Stock shareholders in the amount of
$.069654 per share, payable on May 28, 1998 to shareholders of
record as of May 21, 1998.
MuniYield New Jersey Insured Fund, Inc.
April 30, 1998
QUALITY PROFILE
The quality ratings of securities in the Fund as of April 30, 1998
were as follows:
Percent of
S&P Rating/Moody's Rating Net Assets
AAA/Aaa 83.8%
AA/Aa 1.2
BBB/Baa 6.9
NR (Not Rated) 3.4
Other++ 3.2
[FN]
++Temporary investments in short-term securities.
MuniYield New Jersey Insured Fund, Inc.
April 30, 1998
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
Fred G. Weiss, Director
Terry K. Glenn, Executive Vice President
Vincent R. Giordano, Senior Vice President
Donald C. Burke, Vice President
Kenneth A. Jacob, Vice President
Theodore R. Jaeckel Jr., 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
