MUNIVEST
MICHIGAN
INSURED
FUND, INC.
FUND LOGO
Semi-Annual Report
April 30, 1995
This report, including the financial information herein, is
transmitted to the shareholders of MuniVest Michigan 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
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.
MuniVest Michigan
Insured Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
<PAGE>
MUNIVEST MICHIGAN INSURED FUND, INC.
The Benefits and
Risks of
Leveraging
MuniVest Michigan 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 on 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.
<PAGE>
DEAR SHAREHOLDER
For the six months ended April 30, 1995, the Common Stock of
MuniVest Michigan Insured Fund, Inc. earned $0.383 per share income
dividends, which included earned and unpaid dividends of $0.061.
This represents a net annualized yield of 5.99%, based on a month-
end net asset value of $12.90 per share. Over the same period, the
total investment return on the Fund's Common Stock was +12.78%,
based on a change in per share net asset value from $11.83 to
$12.90, and assuming reinvestment of $0.390 per share income
dividends.
The average yield of the Fund's Auction Market Preferred Stock for
the six months ended April 30, 1995 was 3.83%.
The Environment
During the six months ended April 30, 1995, the perception that the
US economy was overheating and inflationary pressures were
increasing gave way to a more benign economic outlook. With more
signs of slowing growth, investors now appear to be forecasting a
"soft landing" for the US economy. Although gross domestic product
was reported to have increased at a revised 5.1% rate during the
final quarter of 1994, declines in other indicators such as new home
sales and durable goods orders registered thus far in 1995 have led
investors to anticipate that the economy is losing enough momentum
to keep inflation under control and preclude further significant
monetary policy tightening by the Federal Reserve Board. A further
indication of a slowing economy was the reported decline in the
Index of Leading Economic Indicators for March.
As US stock and bond markets have risen on more positive economic
news, the value of the US dollar has reached new lows relative to
the yen and the Deutschemark. Persistent trade deficits and exports
of capital from the United States have kept the US currency in a
decade-long decline relative to the Japanese and German currencies.
Over the longer term, since the United States has the highest
productivity among industrialized nations and among the lowest labor
costs, demand for US dollar-denominated assets may improve. However,
a reduction of the still-widening US trade deficit may be necessary
before the US dollar appreciates substantially relative to the yen
and the Deutschemark.
The first months of 1995 have been very positive for the stock and
bond markets. Continued signs of a moderating expansion and well-
contained inflationary pressures would provide further assurance
that the peak in interest rates is behind us. On the other hand,
indications of reaccelerating growth and further significant
monetary policy tightening by the Federal Reserve Board would be a
decided negative for the US financial markets.
<PAGE>
The Municipal Market
During the six-month period ended April 30, 1995, the tax-exempt
bond market gradually recouped much of the losses sustained during
1994. Signs of a weakening domestic economy and ongoing moderate
inflationary pressures have fostered an environment of declining
interest rates. Since October 31, 1994, A-rated, uninsured municipal
revenue bond yields, as measured by the Bond Buyer Revenue Bond
Index, have declined over 65 basis points (0.65%) to close the six-
month period ended April 30, 1995 at 6.29%. Tax-exempt bond yields
initially continued to climb in late 1994, reaching a high of 7.37%
in late November 1994. Municipal bond yields have since declined
over 100 basis points from their recent highs and are presently
lower than they were a year ago. US Treasury bond yields have
experienced similar declines over the last six months to end the
April period at 7.34%.
Much of the recent improvement in the tax-exempt bond market,
however, has occurred over the last three months. During this most
recent quarter, municipal bond yields have fallen approximately 50
basis points, while US Treasury bond yields declined only 35 basis
points. Tax-exempt bond yields declined more than their taxable
counterparts in recent months, largely in response to the
significant decline in new bond issuance in recent quarters. Over
the last six months, less than $60 billion in new long-term
municipal securities were underwritten, a decline of nearly 45%
versus the comparable period a year earlier. Issuance was
particularly low this past January and February, with monthly volume
of less than $8 billion. These levels are the lowest monthly totals
since the mid-1980s. To compound the municipal market's already
strong technical posture, both institutional and individual
investors have seen significant cash inflows in recent months. These
assets were derived from regular coupon payments, bond maturities
and the proceeds from early bond calls and redemptions. It has been
estimated that investors received over $20 billion in principal
redemptions and coupon income in January 1995 alone. With monthly
issuance in the $10 billion range thus far this year, the current
supply/demand imbalance has dominated the municipal market and bond
prices have risen accordingly. The tax-exempt bond market's
technical position is likely to remain very strong throughout most
of 1995. Investors are expected to receive almost $40 billion in
principal and coupon payments on July 1, 1995. Investor proceeds
from all sources have been estimated to exceed $200 billion for all
of 1995. Estimates of total new bond issuance for 1995 have
continued to be lowered with most estimates now in the $125 billion
range. Investors should find it increasingly difficult to replace
existing holdings as they mature and to reinvest coupon income in
such an environment.
<PAGE>
The municipal bond market's outperformance thus far this year caused
the tax-exempt market to become temporarily expensive relative to
its taxable counterpart in late April. Investor concerns regarding
the international currency situation and the future impact of
proposed revisions to US taxation policies upon the tax advantage
inherent to municipal bonds have combined to cause tax-exempt bond
yields to increase marginally in recent weeks. Municipal bond yields
have risen approximately 15 basis points from their lows in mid-
April 1995. Long-term US Treasury bond yields have remained
essentially stable. Such an underperformance by the tax-exempt bond
market is likely to be limited in duration. The recent increase in
tax-exempt bond yields has already begun to attract institutional
investors since some municipal bonds yielding in excess of 85% of
US Treasury bond yields are again available. Also, concerns
regarding the implication for municipal bonds' tax advantage result-
ing from various proposed tax law changes (for example, flat-tax,
value-added tax or national sales tax) are all likely to quickly
recede as investors realize that such, if any, changes are unlikely
to be enacted before late 1996 at the earliest. Long-term investors
will also recall 1986 when similar tax proposals were made and tax-
exempt bond yields initially rose and then quickly fell. Investors
are likely to view the current situation as an opportunity to purchase
very attractively priced tax-advantaged products. This should cause
municipal bond yields to quickly return to their more historic
relationship.
Portfolio Strategy
We continued to maintain the constructive outlook toward the
municipal bond market that we adopted toward the end of 1994. We
reduced cash reserves to below 5% of net assets both to seek to
allow the Fund to fully participate in the recent bond market rally
and to enhance the Fund's current dividend payout. However, we
continued to emphasize the purchase of larger-coupon, more defensive
issues rather than those securities which are more interest-rate
sensitive. The Fund remains well-positioned to respond to the
interest rate declines seen in recent months, and the Fund's per
share net asset value increased accordingly during the six months
ended April 30, 1995. Looking forward, we have adopted a more
neutral posture regarding the direction of tax-exempt interest
rates. The strong technical structure within the Michigan municipal
bond market makes it unattractive to raise the Fund's cash reserves
to the levels held throughout much of 1994. Over the past six
months, approximately $1.8 billion in long-term municipal securities
were underwritten by Michigan municipalities. This represents a
decline of nearly 50% versus the comparable period a year ago. This
relative scarcity of attractively priced Michigan tax-exempt product
will prevent us from raising significant cash reserves in the near
future. We will focus on enhancing current income and preserving net
asset value until the direction of interest rates becomes clearer.
<PAGE>
Short-term tax-exempt bond interest rates rose into the 3.75%--4.25%
range over the past six months. The recent rise has largely been the
result of investor fears of inflationary pressures resulting from
the dramatic decline in the value of the US dollar and increases in
many crude raw materials. It is unclear whether the decline in the
US dollar or the rise in raw material prices, either together or in
combination, will be adequate to rekindle inflation since wage
pressures remain weak and the economy has significantly weakened
since late 1994. It is very important to note that, despite the
recent rise in short-term rates, the municipal bond yield curve
remained steeply positive. Therefore, the leverage of the Fund's
Preferred Stock continued to positively impact the yield paid to the
Fund's Common Stock shareholder. However, should the spread between
short-term and long-term municipal yields narrow, the benefits of
the leverage will diminish and, as a result, reduce the yield of the
Common Stock. (For a complete explanation of the benefits and risks
of leveraging, see page 1 of this report to shareholders.)
In Conclusion
We appreciate your interest in MuniVest Michigan Insured Fund, Inc.,
and we look forward to assisting you with your financial needs in
the months and years to come.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Vincent R. Giordano)
Vincent R. Giordano
Vice President and Portfolio Manager
May 23, 1995
<PAGE>
Portfolio
Abbreviations
To simplify the listings of MuniVest Michigan 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)
PCR Pollution Control Revenue Bonds
UT Unlimited Tax
VRDN Variable Rate Demand Notes
<TABLE>
SCHEDULE OF INVESTMENTS (in Thousands)
<CAPTION>
S&P Moody's Face Value
STATE Ratings Ratings Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
Michigan--95.7% AAA Aaa $ 1,000 Caledonia, Michigan, Community Schools, Refunding Bonds,
UT, 6.625% due 5/01/2014 (b) $ 1,045
NR* P1 600 Delta County, Michigan, Economic Development Corp., Environ-
mental Improvement Revenue Refunding Bonds (Mead Escambia
Paper), VRDN, Series C, 5.05% due 12/01/2023 (a) 600
AAA Aaa 3,250 Detroit, Michigan, Sewage Disposal Revenue Bonds, 6.625% due
7/01/2021 (c) 3,373
AAA Aaa 3,975 Detroit, Michigan, Sewage Disposal Revenue Refunding Bonds,
Series A, 5.70% due 7/01/2013 (c) 3,818
A1 NR* 100 Detroit, Michigan, Tax Increment Finance Authority Revenue
Bonds (Central Industrial Park Project), VRDN, 4.55% due
10/01/2010 (a) 100
Detroit, Michigan, Water Supply Systems, Revenue Refunding
Bonds (c):
AAA Aaa 1,000 6.50% due 7/01/2015 1,063
AAA Aaa 5,000 5% due 7/01/2023 4,223
BBB Baa1 4,750 Dickinson County, Michigan, Economic Development Corp., Solid
Waste Disposal Revenue Refunding Bonds (Champion Inter-
national), 6.55% due 3/01/2007 4,858
<PAGE>
AAA Aaa 3,000 Grand Haven, Michigan, Electric Revenue Refunding Bonds,
5.25% due 7/01/2013 (e) 2,734
Grand Ledge, Michigan, Public School District Revenue
Bonds, UT (e):
AAA Aaa 1,000 6.45% due 5/01/2014 1,034
AAA Aaa 8,000 6.60% due 5/01/2024 8,356
AAA Aaa 2,500 Grand Rapids, Michigan, Sanitation Sewer Systems, Improvement
Revenue Bonds, 6% due 1/01/2022 (e) 2,413
Grand Rapids, Michigan, Water Supply Systems Revenue
Refunding Bonds (c):
AAA Aaa 6,000 6.50% due 1/01/2015 6,204
A1+ VMIG1++ 300 VRDN, 5.40% due 1/01/2020 (a) 300
AAA Aaa 1,570 Grandville, Michigan, Public School District, Revenue
Refunding Bonds, UT, 6.60% due 5/01/2015 (c) 1,648
Inkster, Michigan, School District, Refunding Bonds, UT
(b):
AAA Aaa 1,665 5.50% due 5/01/2013 1,569
AAA Aaa 1,310 5.50% due 5/01/2019 1,205
AAA Aaa 1,785 Kalamazoo, Michigan, Hospital Finance Authority, Hospital
Facility Revenue Refunding Bonds (Borgess Medical Center),
Series A, 6.25% due 6/01/2014 (c) 1,843
AAA Aaa 2,000 Kent, Michigan, Hospital Finance Authority, Michigan Hospital
Facility Revenue Refunding Bonds (Butterworth Hospital),
Series A, 7.25% due 1/15/2013 (e) 2,296
AAA Aaa 1,425 Michigan Municipal Bond Authority Revenue Bonds (Local
Government Loan Program--Marquette Building), Series D,
6.75% due 5/01/2021 (b) 1,493
Michigan Municipal Bond Authority Revenue Bonds (Local
Government Loan Program), Series A:
AAA Aaa 2,500 6% due 12/01/2013 (c) 2,464
AAA Aaa 2,000 5.75% due 5/01/2014 (b) 1,928
AAA Aaa 2,000 6.125% due 12/01/2018 (c) 1,957
AAA Aaa 2,500 Michigan State Building Authority, Revenue Refunding Bonds,
Series I, 5.20% due 10/01/2010 (b) 2,305
Michigan State Hospital Finance Authority Revenue Refunding
Bonds:
A- A 3,250 (Detroit Medical Center Obligation Group), Series A,
6.25% due 8/15/2013 3,163
AAA Aaa 5,000 (Oakwood Hospital Obligation Group), Series A, 5.50%
due 11/01/2013 (c) 4,638
AAA Aaa 3,500 (Oakwood Hospital Obligation Group), Series A, 5.625%
due 11/01/2018 (c) 3,216
AAA Aaa 4,300 (Saint John Hospital), Series A, 5.75% due 5/15/2016 (b) 4,031
AAA Aaa 1,460 (Sparrow Obligation Group), 6.50% due 11/15/2011 (e) 1,507
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in Thousands)
<CAPTION>
S&P Moody's Face Value
STATE Ratings Ratings Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
Michigan Michigan State Housing Development Authority, Rental
(concluded) Housing Revenue Refunding Bonds, Series A:
AAA Aaa $ 5,000 5.875% due 10/01/2017 (b) $ 4,793
AAA Aaa 5,000 6.50% due 4/01/2023 (d) 5,056
Michigan State Strategic Fund, Limited Obligation Revenue
Refunding Bonds (Detroit Edison Co. Project):
AAA Aaa 3,630 Series BB, 7% due 5/01/2021 (b) 4,079
AAA Aaa 5,000 Series CC, 6.95% due 9/01/2021 (c) 5,316
NR* P1 6,000 Michigan State Strategic Fund, PCR, Refunding (Consumers
Power Project), Series A, VRDN, 5% due 4/15/2018 (a) 6,000
AAA Aaa 6,500 Monroe County, Michigan, Economic Development Corporation,
Limited Obligation Revenue Refunding Bonds (Detroit
Edison Co.), Series AA, 6.95% due 9/01/2022 (c) 7,277
Monroe County, Michigan, PCR (Detroit Edison Co. Project),
AMT:
AAA Aaa 2,500 (Monroe and Fermi Plants), Series 1, 7.65% due 9/01/2020 (c) 2,742
AAA Aaa 4,500 Series CC, 6.55% due 6/01/2024 (e) 4,576
AAA Aaa 1,500 Series I, 7.30% due 9/01/2019 (b) 1,634
AAA Aaa 2,600 Novi, Michigan, Community School District Revenue Bonds, UT,
6.125% due 5/01/2013 (c) 2,599
AA Aa 2,750 Royal Oak, Michigan, Hospital Finance Authority, Hospital
Revenue Bonds (William Beaumont Hospital), Series D, 6.75%
due 1/01/2020 2,821
NR* VMIG1++ 800 University of Michigan, University Hospital Revenue
Refunding Bonds, VRDN, Series A, 5.10% due 12/01/2019 (a) 800
AAA Aaa 1,500 Warren County, Michigan, Consolidated School District,
Revenue Refunding Bonds, UT, 5.50% due 5/01/2021 (e) 1,374
AAA Aaa 1,500 Waterford, Michigan, School District Revenue Bonds, UT,
6.25% due 6/01/2012 (c) 1,523
<PAGE>
AAA Aaa 8,500 Wayne State University, Michigan, Revenue Refunding Bonds,
5.65% due 11/15/2015 (b) 8,084
Western Michigan University, Revenue Refunding Bonds,
Series A (c):
AAA Aaa 1,620 5.50% due 7/15/2016 1,510
AAA Aaa 1,600 5% due 7/15/2021 1,362
AAA Aaa 2,230 Wyandotte, Michigan, City School District Refunding Bonds,
UT, 5.625% due 5/01/2013 (d) 2,113
Total Investments (Cost--$139,739)--95.7% 139,043
Other Assets Less Liabilities--4.3% 6,179
--------
Net Assets--100.0% $145,222
========
<FN>
(a)The interest rate is subject to change periodically based upon
the prevailing market rates. The interest rate shown is the rate in
effect at April 30, 1995.
(b)AMBAC Insured.
(c)FGIC Insured.
(d)FSA Insured.
(e)MBIA Insured.
*Not Rated.
++Highest short-term rating by Moody's Investors Service, Inc.
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENT OF ASSETS, LIABILITIES AND CAPITAL
<CAPTION>
As of April 30, 1995
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$139,739,433) (Note 1a) $139,043,282
Cash 74,508
Receivables:
Securities sold $ 3,552,208
Interest 2,851,639 6,403,847
------------
Deferred organization expenses (Note 1e) 18,982
Prepaid expenses and other assets 3,990
------------
Total assets 145,544,609
------------
<PAGE>
Liabilities: Payables:
Dividends to shareholders (Note 1f) 198,729
Investment adviser (Note 2) 56,572 255,301
------------
Accrued expenses and other liabilities 67,570
------------
Total liabilities 322,871
------------
Net Assets: Net assets $145,221,738
============
Capital: Capital Stock (200,000,000 shares authorized)(Note 4):
Preferred Stock, par value $.10 per share (2,000 shares of
AMPS* issued and outstanding at $25,000 per share liquidation
preference) $ 50,000,000
Common Stock, par value $.10 per share (7,379,969 shares
issued and outstanding) $ 737,997
Paid-in capital in excess of par 102,717,369
Undistributed investment income--net 451,751
Accumulated realized capital losses on investments--net (Note 5) (7,989,228)
Unrealized depreciation on investments--net (696,151)
------------
Total--Equivalent to $12.90 net asset value per share of Common
Stock (market price--$11.875) 95,221,738
------------
Total capital $145,221,738
============
<FN>
*Auction Market Preferred Stock.
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENT OF OPERATIONS
<CAPTION>
For the Six Months Ended April 30, 1995
<S> <S> <C> <C>
Investment Interest and amortization of premium and discount earned $ 4,318,127
Income (Note 1d):
<PAGE>
Expenses: Investment advisory fees (Note 2) $ 349,135
Commission fees (Note 4) 62,587
Professional fees 36,241
Printing and shareholder reports 20,034
Accounting services (Note 2) 19,668
Transfer agent fees 17,577
Directors' fees and expenses 11,200
Listing fees 9,504
Custodian fees 6,102
Pricing fees 3,645
Amortization of organization expenses (Note le) 1,786
Other 9,493
------------
Total expenses 546,972
------------
Investment income--net 3,771,155
------------
Realized & Realized loss on investments--net (3,415,418)
Unrealized Gain Change in unrealized appreciation /depreciation on
(Loss) on investments--net 11,377,094
Investments ------------
- --Net (Notes 1b, Net Increase in Net Assets Resulting from Operations $ 11,732,831
1d & 3): ============
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
For the Six For the
Months Ended Year Ended
Increase (Decrease) in Net Assets: April 30, 1995 Oct. 31, 1994
<S> <S> <C> <C>
Operations: Investment income--net $ 3,771,155 $ 7,353,055
Realized loss on investments--net (3,415,418) (4,573,803)
Change in unrealized appreciation/depreciation on investments
--net 11,377,094 (17,886,533)
------------ ------------
Net increase (decrease) in net assets resulting from operations 11,732,831 (15,107,281)
------------ ------------
Dividends & Investment income--net:
Distributions to Common Stock (2,874,808) (6,136,596)
Shareholders Preferred Stock (949,090) (1,229,220)
(Note 1f): Realized gain on investments--net:
Common Stock -- (3,152)
Preferred Stock -- (560)
------------ ------------
Net decrease in net assets resulting from dividends and
distributions to shareholders (3,823,898) (7,369,528)
------------ ------------
<PAGE>
Capital Stock Offering and underwriting costs resulting from the issuance
Transactions of Preferred Stock -- 27,285
(Notes 1e & 4): Value of shares issued to Common Stock shareholders in
reinvestment of dividends and distributions -- 1,115,631
------------ ------------
Net increase in net assets derived from capital stock transactions -- 1,142,916
------------ ------------
Net Assets: Total increase (decrease) in net assets 7,908,933 (21,333,893)
Beginning of period 137,312,805 158,646,698
------------ ------------
End of period* $145,221,738 $137,312,805
============ ============
<FN>
*Undistributed investment income--net $ 451,751 $ 504,494
============ ============
See Notes to Financial Statements.
</TABLE>
<TABLE>
FINANCIAL HIGHLIGHTS
<CAPTION>
For the
For the Six For the Period
The following per share data and ratios have been derived Months Year Apr. 30,
from information provided in the financial statements. Ended Ended 1993++ to
April 30, Oct. 31, Oct. 31,
Increase (Decrease) in Net Asset Value: 1995 1994 1993
<S> <S> <C> <C> <C>
Per Share Net asset value, beginning of period $ 11.83 $ 14.89 $ 14.18
Operating -------- -------- --------
Performance: Investment income--net .51 1.01 .47
Realized and unrealized gain (loss) on invest-
ments--net 1.08 (3.06) .80
-------- -------- --------
Total from investment operations 1.59 (2.05) 1.27
-------- -------- --------
Less dividends to Common Stock shareholders:
Investment income--net (.39) (.84) (.33)
-------- -------- --------
Capital charge resulting from issuance of Common Stock -- -- (.03)
-------- -------- --------
Effect of Preferred Stock activity++++:
Dividends to Preferred Stock shareholders:
Investment income--net (.13) (.17) (.07)
Capital charge resulting from issuance of
Preferred Stock -- -- (.13)
<PAGE> -------- -------- --------
Total effect of Preferred Stock activity (.13) (.17) (.20)
-------- -------- --------
Net asset value, end of period $ 12.90 $ 11.83 $ 14.89
======== ======== ========
Market price per share, end of period $ 11.875 $ 10.25 $ 15.125
======== ======== ========
Total Investment Based on market price per share 19.82%+++ (27.71%) 3.10%+++
Return:** ======== ======== ========
Based on net asset value per share 12.78%+++ (15.25%) 7.37%+++
======== ======== ========
Ratios to Average Expenses, net of reimbursement .79%* .76% .56%*
Net Assets:*** ======== ======== ========
Expenses .79%* .76% .78%*
======== ======== ========
Investment income--net 5.41%* 4.98% 4.67%*
======== ======== ========
Supplemental Net assets, net of Preferred Stock, end of
Data: period (in thousands) $ 95,222 $ 87,313 $108,647
======== ======== ========
Preferred Stock outstanding, end of period
(in thousands) $ 50,000 $ 50,000 $ 50,000
======== ======== ========
Portfolio turnover 27.09% 49.03% 15.34%
======== ======== ========
Dividends Per Investment income--net $ 475 $ 615 $ 255
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.
++Commencement of Operations.
++++The Fund's Preferred Stock was issued on June 1, 1993.
++++++Dividends per share have been adjusted to reflect a two-for-
one stock split.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
MuniVest Michigan 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 MVM. 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 fair value as
determined in good faith by or under the direction of the Board of
Directors of the Fund.
(b) Derivative financial instruments--The Fund may engage in various
portfolio strategies to seek to increase its return by hedging its
portfolio against adverse movements in the debt markets. Losses may
arise due to changes in the value of the contract or if the
counterparty does not perform under the contract.
* Financial futures contracts--The Fund may purchase or sell
interest rate futures contracts and options on such futures
contracts for the purpose of hedging the market risk on existing
securities or the intended purchase of securities. Futures contracts
are contracts for delayed delivery of securities at a specific
future date and at a specific price or yield. Upon entering into a
contract, the Fund deposits and maintains as collateral such initial
margin as required by the exchange on which the transaction is
effected. Pursuant to the contract, the Fund agrees to receive from
or pay to the broker an amount of cash equal to the daily
fluctuation in value of the contract. Such receipts or payments are
known as variation margin and are recorded by the Fund as unrealized
gains or losses. When the contract is closed, the Fund records a
realized gain or loss equal to the difference between the value of
the contract at the time it was opened and the value at the time it
was closed.
<PAGE>
* 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 and offering expenses--Deferred
organization expenses are amortized on a straight-line basis over a
five-year period. Direct expenses relating to the public offering of
the Fund's Common and Preferred Stock were charged to capital at the
time of issuance of the shares.
(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.
NOTES TO FINANCIAL STATEMENTS (concluded)
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.
<PAGE>
FAM is responsible for the management of the Fund's portfolio and
provides the necessary personnel, facilities, equipment and certain
other services necessary to the operations of the Fund. For such
services, the Fund pays a monthly fee at an annual rate of 0.50% of
the Fund's average weekly net assets.
Accounting services are provided to the Fund by FAM at cost.
Certain officers and/or directors of the Fund are officers and/or
directors of FAM, PSI, Merrill Lynch, Pierce, Fenner & Smith Inc.
("MLPF&S"), and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the six months ended April 30, 1995 were $35,650,653 and
$35,581,076, respectively.
Net realized and unrealized losses as of April 30, 1995 were as
follows:
Realized Unrealized
Losses Losses
Long-term investments $ (1,768,982) $ (696,151)
Financial futures contracts (1,646,436) --
------------ ------------
Total $ (3,415,418) $ (696,151)
============ ============
As of April 30, 1995, net unrealized depreciation for Federal income
tax purposes aggregated $696,151, of which $2,317,439 related to
appreciated securities and $3,013,590 related to depreciated
securities. The aggregate cost of investments at April 30, 1995 for
Federal income tax purposes was $139,739,433.
4. Capital Stock Transactions:
The Fund is authorized to issue 200,000,000 shares of capital stock,
including Preferred Stock, par value $.10 per share, all of which
were initially classified as Common Stock. The Board of Directors is
authorized, however, to reclassify any unissued shares of capital
stock without approval of holders of Common Stock.
Common Stock
For the six months ended April 30, 1995, shares issued and
outstanding remained constant at 7,379,969. At April 30, 1995, total
paid-in capital amounted to $103,455,367.
<PAGE>
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, 1995 was 4.225%.
A two-for-one stock split occurred on December 1, 1994. As a result,
at April 30, 1995, there were 2,000 AMPS 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 the annual rate ranging from 0.25% to 0.375%,
calculated on the proceeds of each auction. For the six months ended
April 30, 1995, MLPF&S, an affiliate of FAM, earned $60,236 as
commissions.
5. Capital Loss Carryforward:
At October 31, 1994, the Fund had a capital loss carryforward of
approximately $4,574,000, all of which expires in 2002. This amount
will be available to offset like amounts of any future taxable
gains.
6. Subsequent Event:
On May 9, 1995, the Fund's Board of Directors declared an ordinary
income dividend to Common Stock shareholders in the amount of
$0.061169 per share, payable on May 30, 1995, to shareholders of
record as of May 19, 1995.
PER SHARE INFORMATION
<TABLE>
Per Share Selected
Quarterly Financial
Data*
<CAPTION>
Net Realized Unrealized Dividends
Investment Gains Gains Net Investment Income
For the Quarter Income (Losses) (Losses) Common Preferred
<S> <C> <C> <C> <C> <C>
April 30, 1993++ to July 31, 1993 $.22 $(.02) $ .17 $.11 $.03
August 1, 1993 to October 31, 1993 .25 .02 .63 .22 .04
November 1, 1993 to January 31, 1994 .26 .02 .13 .21 .04
February 1, 1994 to April 30, 1994 .25 (.14) (2.05) .22 .04
May 1, 1994 to July 31, 1994 .25 (.15) .45 .21 .04
August 1, 1994 to October 31, 1994 .25 (.35) (.97) .20 .05
November 1, 1994 to January 31, 1995 .26 (.28) .92 .20 .06
February 1, 1995 to April 30, 1995 .25 (.18) .62 .19 .07
<PAGE>
<CAPTION>
Net Asset Value Market Price**
For the Quarter High Low High Low Volume***
<S> <C> <C> <C> <C> <C>
April 30, 1993++ to July 31, 1993 $14.53 $14.07 $15.50 $15.00 196
August 1, 1993 to October 31, 1993 15.16 14.25 15.50 15.00 434
November 1, 1993 to January 31, 1994 15.04 14.30 15.00 13.25 507
February 1, 1994 to April 30, 1994 14.99 12.27 15.00 12.125 414
May 1, 1994 to July 31, 1994 13.52 12.48 13.375 12.25 300
August 1, 1994 to October 31, 1994 13.16 11.83 13.00 10.125 816
November 1, 1994 to January 31, 1995 12.45 10.88 11.50 9.25 1,342
February 1, 1995 to April 30, 1995 13.29 12.48 12.25 11.375 503
<FN>
*Calculations are based upon Common Stock outstanding at the end of
each quarter.
**As reported in the consolidated transaction reporting system.
***In thousands.
++Commencement of Operations.
</TABLE>
OFFICERS AND DIRECTORS
Arthur Zeikel, President and Director
Donald Cecil, Director
M. Colyer Crum, Director
Edward H. Meyer, Director
Jack B. Sunderland, Director
J. Thomas Touchton, Director
Terry K. Glenn, Executive Vice President
Donald C. Burke, Vice President
Vincent R. Giordano, Vice President
Kenneth A. Jacob, Vice President
Gerald M. Richard, Treasurer
Mark B. Goldfus, Secretary
<PAGE>
Transfer Agents
Common Stock:
The Bank of New York
101 Barclay Street
New York, New York 10286
Preferred Stock:
IBJ Schroder Bank &Trust Company
One State Street
New York, New York 10004
Custodian
The Bank of New York
90 Washington Street
New York, New York 10286
NYSE Symbol
MVM
