MUNIYIELD
FLORIDA
INSURED FUND
[FUND LOGO]
STRATEGIC
Performance
Semi-Annual Report
April 30, 1997
This report, including the financial information herein, is transmitted
to the shareholders of MuniYield Florida Insured Fund 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 Shares by issuing Preferred Shares
to provide the Common Shareholders with a potentially higher rate of
return. Leverage creates risks for Common Shareholders, including the
likelihood of greater volatility of net asset value and market price
of the Common Shares, and the risk that fluctuations in the short-term
dividend rates of the Preferred Shares may affect the yield to Common
Shareholders. Statements and other information herein are as dated and
are subject to change.
MuniYield
Florida
Insured Fund
Box 9011
Princeton, NJ
08543-9011 #16490 -- 4/97
MuniYield Florida Insured Fund
TO OUR SHAREHOLDERS
For the six-month period ended April 30, 1997, the Common Shares of
MuniYield Florida Insured Fund earned $0.543 per share income dividends,
which included earned and unpaid dividends of $0.068. This represents a
net annualized yield of 7.43%, based on a month-end per share net asset
value of $14.73. Over the same period, the total investment return on
the Fund's Common Shares was +1.17%, based on a change in per share net
asset value from $15.25 to $14.73, and assuming reinvestment of $0.547
per share income dividends and $0.124 per share capital gains
distributions.
The average yield of the Fund's Auction Market Preferred Shares for the
six-month period ended April 30, 1997 was 4.07%.
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 maintained a neutral-to-slightly
constructive investment strategy that concentrated on providing an
attractive level of tax-exempt income while seeking to preserve the
Fund's net asset value. The everchanging perception of the state of the
economy, and the need for further monetary policy tightening by the FRB,
caused large swings in interest rates over this time period.
We have strived to take advantage of market fluctuations to seek to
enhance the Fund's total return. We purchased interest rate-sensitive
bonds in the middle of January when tax-exempt interest rates increased
to attractive levels. However, we subsequently sold these issues after
the bond market rally in early February. Looking forward, we expect the
FRB to continue raising short-term interest rates, which is expected to
place negative pressure on long-term tax-exempt interest rates. We
anticipate maintaining a neutral portfolio strategy until there are
signs that the economy is slowing to below trend growth, thereby
reducing the threat of rising inflation.
The yield on the Fund's Auction Market Preferred Shares has been trading
within a narrow range between 3.25% -- 3.65%. Over the past few weeks,
the interest rate on the Preferred Shares has been greater than 4% in
response to pressures from seasonal corporate and individual tax
payments. This interest rate has started to decline but is expected to
return to normal levels shortly. Leverage continues to benefit the
Common Shareholders by significantly augmenting their yield. However,
should the spread between short-term and long-term tax-exempt interest
rates narrow, the benefits of leverage will decline and the yield on the
Fund's Common Shares will be reduced. (For a complete explanation of the
benefits and risks of leveraging, see page 3 of this report to
shareholders.)
In Conclusion
We appreciate your ongoing interest in MuniYield Florida Insured Fund,
and we look forward to serving your investment needs in the months and
years to come.
Sincerely,
/S/ARTHUR ZEIKEL
Arthur Zeikel
President
/S/VINCENT R. GIORDANO
Vincent R. Giordano
Senior Vice President
/S/ROBERT A. DIMELLA
Robert A. DiMella
Vice President and Portfolio Manager
June 2, 1997
THE BENEFITS AND RISKS OF LEVERAGING
MuniYield Florida Insured Fund utilizes leveraging to seek to enhance
the yield and net asset value of its Common Shares. However, these
objectives cannot be achieved in all interest rate environments. To
leverage, the Fund issues Preferred Shares, which pay 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 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 Shares. However, in order to benefit Common 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
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 Shares
capitalization of $100 million and the issuance of Preferred Shares 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 Shares
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 Shares.
In this case, the dividends paid to Preferred Shareholders are
significantly lower than the income earned on the fund's long-term
investments, and therefore the Common 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 Shares will be reduced
or eliminated completely. At the same time, the market value of the
fund's Common Shares (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 Shares' net asset value will reflect the full
decline in the price of the portfolio's investments, since the value of
the fund's Preferred Shares 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 Florida Insured Fund'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.
AMT Alternative Minimum Tax (subject to)
COP Certificates of Participation
DATES Daily Adjustable Tax-Exempt Securities
HFA Housing Finance Agency
IDA Industrial Development Authority
IDR Industrial Development Revenue Bonds
PCR Pollution Control Revenue Bonds
RIB Residual Interest Bonds
S/F Single-Family
UT Unlimited Tax
VRDN Variable Rate Demand Notes
<TABLE>
<CAPTION>
MuniYield Florida Insured Fund 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>
Florida -- 93.5%
AAA Aaa $5,000 Auburndale, Florida, Water and Sewer Revenue Refunding Bonds, 5.25% due
12/01/2025 (a) $4,651
Boynton Beach, Florida, Utility System, Revenue Refunding Bonds (b):
AAA Aaa 3,375 6.25% due 11/01/2020 3,497
AAA Aaa 700 6.25% due 11/01/2020 (h) 769
AAA Aaa 3,000 Brevard County, Florida, IDR (NUI Corporation Project), AMT, 6.40% due
10/01/2024 (a) 3,120
Citrus County, Florida, PCR, Refunding (Florida Power Corporation
-- Crystal River) (c):
AAA Aaa 2,100 Series A, 6.625% due 1/01/2027 2,245
AAA Aaa 5,750 Series B, 6.35% due 2/01/2022 6,004
Dade County, Florida, Aviation Revenue Bonds, AMT, Series B (c):
AAA Aaa 2,650 6.55% due 10/01/2013 2,825
AAA Aaa 12,715 6.60% due 10/01/2022 13,493
AAA Aaa 5,000 (Miami International Airport), 5.75% due 10/01/2012 5,019
AAA Aaa 4,500 Dade County, Florida, Health Facilities Authority, Hospital Revenue Bonds
(Baptist Hospital of Miami Project), Series A, 5.75% due 5/01/2021 (c)(h) 4,532
AA- VMIG1+ 1,300 Dade County, Florida, IDA, Exempt Facilities Revenue Refunding Bonds
(Florida Power and Light Co.), VRDN, 4.30% due 6/01/2021 (e) 1,300
AAA Aaa 14,000 Dade County, Florida, Seaport Revenue Bonds, UT, 6.50% due 10/01/2001 (a)(d) 15,091
Dade County, Florida, Special Obligation Refunding Bonds, Series B (a):
AAA Aaa 9,605 6.021%** due 10/01/2015 3,256
AAA Aaa 14,755 6.50%** due 10/01/2030 1,868
AAA Aaa 6,000 6.363%** due 10/01/2032 668
AAA Aaa 5,000 Escambia County, Florida, HFA, S/F Mortgage Revenue Refunding Bonds
(Multi-County Program), AMT, 7% due 4/01/2028 (f)(g) 5,270
BBB Baa1 2,500 Escambia County, Florida, PCR (Champion International Corporation Project),
AMT, 6.90% due 8/01/2022 2,650
AAA Aaa 1,150 Florida, HFA (Brittany Rosemont Apartments), AMT, Series C-1, 6.75% due
8/01/2014 (a) 1,218
NR* Aaa 1,860 Florida, HFA, Home Ownership Revenue Bonds, AMT, Series G1, 7.90% due
3/01/2022 (g) 1,953
AAA Aaa 10,000 Florida Ports Financing Commission Revenue Bonds (State Transportation Trust
Fund), AMT, 5.375% due 6/01/2027 (c) 9,317
Florida State Board of Education, Public Education Revenue Bonds (Capital
Outlay):
AA Aa2 3,000 Refunding, Series A, 7.25% due 6/01/2023 3,266
AAA Aaa 2,000 Series A, 6.75% due 6/01/2001 (d) 2,165
AAA Aaa 1,790 Florida State Division Board of Finance, Department of General Services
Revenue Bonds
(Department of Natural Resource Preservation), Series 2000 - A, 6.75% due
7/01/2013 (a) 1,928
AAA Aaa 10,000 Florida State Turnpike Authority, Turnpike Revenue Refunding Bonds, Series A,
5% due 7/01/2019 (b) 9,054
AAA Aaa 7,050 Hillsborough County, Florida, Capital Improvement Program, Revenue Refunding
Bonds
(County Center Project), Series B, 5.125% due 7/01/2022 (c) 6,502
AAA Aaa 1,000 Hillsborough County, Florida, IDA, Revenue Bonds (Allegany Health System -
J. Knox Village), 6.375% due 12/01/2012 (c) 1,051
AAA Aaa 5,000 Hillsborough County, Florida, School Board, COP (Master Lease Program),
5.25% due 7/01/2017 (c) 4,732
AAA Aaa 2,000 Jacksonville, Florida, Excise Taxes Revenue Refunding Bonds, 6.50% due
10/01/2013 (a) 2,155
Jacksonville, Florida, Health Facilities Authority, Hospital Revenue Bonds,
VRDN (e):
A1+ VMIG1+ 200 (Baptist Medical Center Project), 4.45% due 6/01/2008 (c) 200
NR* VMIG1+ 1,100 Refunding (Genesis Rehabilitation Hospital), 4.40% due 5/01/2021 1,100
AAA NR* 2,500 Lee County, Florida, HFA, S/F Mortgage Revenue Bonds (Multi-County Program),
AMT, Series A, Sub-Series 3, 7.45% due 9/01/2027 (f)(g) 2,749
A- A3 5,000 Leesburg, Florida, Hospital Revenue Refunding Bonds (Leesburg Regional Medical
Center Project), Series A, 6.125% due 7/01/2012 5,107
AAA Aaa 1,000 Marion County, Florida, Hospital District, Revenue Refunding Bonds (Monroe
Regional Medical Center), 6.25% due 10/01/2012 (b) 1,035
AAA Aaa 2,500 Miami, Florida, Sanitation Sewer System, UT, 6.50% due 1/01/2015 (b) 2,646
AAA Aaa 2,515 North Miami Beach, Florida, UT, 6.30% due 2/01/2024 (b) 2,628
Orange County, Florida, Tourist Development, Tax Revenue Bonds (a):
AAA Aaa 1,000 Refunding, Series A, 6.50% due 10/01/2010 1,080
AAA Aaa 7,815 Series B, 6.50% due 10/01/2019 8,392
AAA Aaa 1,500 Palm Beach County, Florida, Criminal Justice Facilities Revenue Bonds, 7.20%
due 6/01/2015 (b) 1,772
AAA Aaa 2,000 Palm Beach County, Florida, Solid Waste Authority, Revenue Refunding and
Improvement Bonds, 6.25% due 12/01/2008 (c) 2,133
A1 VMIG1+ 1,100 Pinellas County, Florida, Health Facilities Authority, Revenue Refunding Bonds
(Pooled Hospital Loan Program), DATES, 4.60% due 12/01/2015 (e) 1,100
AAA Aaa 4,060 Saint Petersburg, Florida, Health Facilities Authority Revenue Bonds
(Allegany Health System), Series A, 7% due 12/01/2015 (c) 4,412
AAA Aaa 4,920 Sarasota County, Florida, Utility System Revenue Bonds, 6.50% due 10/01/2004
(b)(d) 5,460
AAA Aaa 4,630 Seminole County, Florida, School Board, COP, Refunding, Series A, 5.25% due
7/01/2021 (c) 4,324
AAA Aaa 2,250 South Broward Hospital District, Florida, Revenue Bonds, RIB, Series C, 9.257%
due 5/01/2001 (a)(d)(i) 2,647
AAA Aaa 2,275 South Florida Water Management District, Special Obligation Land Aquisition
Bonds, 6% due 10/01/2015 (a) 2,330
AAA Aaa 2,700 Sumter County, Florida, Capital Improvement Revenue Refunding Bonds, 5% due
6/01/2024 (c) 2,407
Total Investments (Cost -- $165,324) -- 93.5% 171,121
Other Assets Less Liabilities -- 6.5% 11,872
--------
Net Assets -- 100.0% $182,993
========
(a) AMBAC Insured.
(b) FGIC Insured.
(c) MBIA Insured.
(d) Prerefunded.
(e) 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.
(f) FNMA Collateralized.
(g) GNMA Collateralized.
(h) Escrowed to Maturity.
(i) 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.
** 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>
<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 -- $165,323,912) (Note 1a) $171,121,388
Cash 92,690
Receivables:
Securities sold $9,613,624
Interest 2,374,711 11,988,335
------------
Deferred organization expenses (Note 1e) 7,863
Prepaid expenses and other assets 7,241
------------
Total assets 183,217,517
------------
Liabilities: Payables:
Dividends to shareholders (Note 1f) 87,718
Investment adviser (Note 2) 74,527 162,245
------------
Accrued expenses and other liabilities 62,288
------------
Total liabilities 224,533
------------
Net Assets: Net assets $182,992,984
============
Capital: Capital Shares (unlimited number of shares of beneficial interest
authorized) (Note 4):
Preferred Shares, par value $.05 per share (2,400 shares of AMPS*
issued and outstanding at $25,000 per share liquidation preference) $60,000,000
Common Shares, par value $.10 per share (8,350,463 shares issued
and outstanding) $835,046
Paid-in capital in excess of par 116,287,758
Undistributed investment income -- net 1,253,057
Accumulated realized capital losses on investments -- net (1,180,353)
Unrealized appreciation on investments -- net 5,797,476
------------
Total -- Equivalent to $14.73 net asset value per Common Share
(market price -- $14.125) 122,992,984
------------
Total capital $182,992,984
============
* Auction Market Preferred Shares.
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 $5,229,946
(Note 1d):
Expenses: Investment advisory fees (Note 2) $459,661
Commission fees (Note 4) 75,681
Professional fees 34,720
Accounting services (Note 2) 21,219
Transfer agent fees 17,514
Trustees' fees and expenses 11,243
Listing fees 8,224
Custodian fees 6,142
Printing and shareholder reports 4,347
Amortization of organization expenses (Note 1e) 3,908
Pricing fees 3,775
Other 8,680
----------
Total expenses 655,114
-----------
Investment income -- net 4,574,832
-----------
Realized & Realized gain on investments -- net 513,335
Unrealized Change in unrealized appreciation on investments -- net (2,602,690)
Gain (Loss) on -----------
Investments -- Net Net Increase in Net Assets Resulting from Operations $2,485,477
(Notes 1b, 1d & 3): ===========
See Notes to Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
Statements of Changes in Net Assets
For the Six For the
Months Ended Year Ended
Increase (Decrease) in Net Assets: April 30, 1997 Oct. 31, 1996
<S> <C> <C> <C>
Operations: Investment income -- net $4,574,832 $9,080,033
Realized gain on investments -- net 513,335 2,594,504
Change in unrealized appreciation/depreciation on investments -- net (2,602,690) (1,157,546)
------------ ------------
Net increase in net assets resulting from operations 2,485,477 10,516,991
------------ ------------
Dividends & Investment income -- net:
Distributions to Common Shares (3,602,231) (7,047,040)
Shareholders Preferred Shares (648,912) (1,997,712)
(Note 1f): Realized gain on investments -- net:
Common Shares (1,998,299) (540,567)
Preferred Shares (563,424) (168,552)
------------ ------------
Net decrease in net assets resulting from dividends and distributions
to shareholders (6,812,866) (9,753,871)
------------ ------------
Net Assets: Total increase (decrease) in net assets (4,327,389) 763,120
Beginning of period 187,320,373 186,557,253
------------ ------------
End of period* $182,992,984 $187,320,373
============ ============
* Undistributed investment income -- net $1,253,057 $929,368
============ ============
See Notes to Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
Financial Highlights
For the
The following per share data and ratios have been derived Six 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 $15.25 $15.16 $13.70 $16.56 $14.14
Operating -------- -------- -------- -------- --------
Performance: Investment income -- net .55 1.08 1.12 1.13 1.12
Realized and unrealized gain (loss)
on investments -- net (.25) .17 1.45 (2.70) 2.48
-------- -------- -------- -------- --------
Total from investment operations .30 1.25 2.57 (1.57) 3.60
-------- -------- -------- -------- --------
Less dividends and distributions to
Common Shareholders:
Investment income -- net (.43) (.84) (.84) (.91) (.85)
Realized gain on investments -- net (.24) (.06) -- (.15) --
-------- -------- -------- -------- --------
Total dividends and distributions to
Common Shareholders (.67) (.90) (.84) (1.06) (.85)
-------- -------- -------- -------- --------
Effect of Preferred Share activity:
Dividends and distributions to Preferred
Shareholders:
Investment income -- net (.08) (.24) (.27) (.20) (.19)
Realized gain on investments -- net (.07) (.02) -- (.03) --
Capital charge resulting from issuance of
Preferred Shares -- -- -- -- (.14)
-------- -------- -------- -------- --------
Total effect of Preferred Share activity (.15) (.26) (.27) (.23) (.33)
-------- -------- -------- -------- --------
Net asset value, end of period $14.73 $15.25 $15.16 $13.70 $16.56
======== ======== ======== ======== ========
Market price per share, end of period $14.125 $14.125 $13.50 $11.375 $16.875
======== ======== ======== ======== ========
Total Investment Based on market price per share 4.74%++++ 11.48% 26.46% (27.46%) 18.78%
Return:** ======== ======== ======== ======== ========
Based on net asset value per share 1.17%++++ 7.18% 17.91% (10.98%) 23.65%
======== ======== ======== ======== ========
Ratios to Expenses, net of reimbursement .71%* .73% .75% .75% .66%
Average
Net Assets:*** ======== ======== ======== ======== ========
Expenses .71%* .73% .75% .75% .72%
======== ======== ======== ======== ========
Investment income -- net 4.97%* 4.88% 5.18% 4.99% 5.09%
======== ======== ======== ======== ========
Supplemental Net assets, net of Preferred Shares,
Data: end of period (in thousands) $122,993 $127,320 $126,557 $114,441 $137,908
======== ======== ======== ======== ========
Preferred Shares outstanding, end of period
(in thousands) $60,000 $60,000 $60,000 $60,000 $60,000
======== ======== ======== ======== ========
Portfolio turnover 36.59% 156.11% 107.90% 51.81% 18.51%
======== ======== ======== ======== ========
Leverage: Asset coverage per $1,000 $3,050 $3,122 $3,109 $2,907 $3,298
======== ======== ======== ======== ========
Dividends Per
Share On Investment income -- net $270 $832 $925 $688 $662
Preferred ======== ======== ======== ======== ========
Shares
Outstanding:+
* 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 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 Florida Insured Fund April 30, 1997
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
MuniYield Florida Insured Fund (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 Shares on a weekly basis. The Fund's Common Shares are
listed on the New York Stock Exchange under the symbol MFT. 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 for which market quotations are not readily available are
valued at their fair value as determined in good faith by or under the
direction of the Board of Trustees 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 general
supervision of the Board of Trustees.
(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 trustees 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 $65,201,374 and $77,687,118,
respectively.
Net realized and unrealized gains as of April 30, 1997 were as follows:
Realized Unrealized
Gains Gains
Long-term investments $513,335 $5,797,476
---------- -----------
Total $513,335 $5,797,476
========== ===========
As of April 30, 1997, net unrealized appreciation for Federal income tax
purposes aggregated $5,797,476, of which $5,910,537 related to appre-
ciated securities and $113,061 related to depreciated securities. The
aggregate cost of investments at April 30, 1997 for Federal income tax
purposes was $165,323,912.
4. Capital Share Transactions:
The Fund is authorized to issue an unlimited number of capital shares,
including Preferred Shares, par value $.10 per share, all of which were
initially classified as Common Shares. The Board of Trustees is
authorized, however, to reclassify any unissued shares of capital
without approval of the holders of Common Shares.
Common Shares
For the six months ended April 30, 1997, shares issued and outstanding
remained constant at 8,350,463. At April 30, 1997, total paid-in capital
amounted to $117,122,804.
Preferred Shares
Auction Market Preferred Shares ("AMPS") are Preferred Shares 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 4.062%.
As of April 30, 1997, there were 2,400 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
$28,320 as commissions.
5. Subsequent Event:
On May 9, 1997, the Fund's Board of Trustees declared an ordinary income
dividend to Common Shareholders in the amount of $.067850 per share,
payable on May 29, 1997 to shareholders of record as of May 19, 1997.
OFFICERS AND TRUSTEES
Arthur Zeikel, President and Trustee
Donald Cecil, Trustee
M. Colyer Crum, Trustee
Edward H. Meyer, Trustee
Jack B. Sunderland, Trustee
J. Thomas Touchton, Trustee
Terry K. Glenn, Executive Vice President
Vincent R. Giordano, Senior Vice President
Donald C. Burke, Vice President
Robert A. DiMella, Vice President
Kenneth A. Jacob, 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 Shares:
The Bank of New York
101 Barclay Street
New York, NY 10286
Preferred Shares:
IBJ Schroder Bank & Trust Company
One State Street
New York, NY 10004
NYSE Symbol
MFT
