MUNIVEST
MICHIGAN
INSURED
FUND, INC.
FUND LOGO
Semi-Annual Report
April 30, 1997
Officers and Directors
Arthur Zeikel, President and Director
Donald Cecil, Director
M. Colyer Crum, Director
Edward H. Meyer, Director
Jack B. Sunderland, Director
J. Thomas Touchton, Director
Terry K. Glenn, Executive Vice President
Vincent R. Giordano, Senior Vice President
Donald C. Burke, Vice President
Kenneth A. Jacob, Vice President
Fred K. Stuebe, Vice President
Gerald M. Richard, Treasurer
Patrick D. Sweeney, Secretary
<PAGE>
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
Custodian
The Bank of New York
90 Washington Street
New York, NY 10286
NYSE Symbol
MVM
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
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.
MuniVest Michigan
Insured Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
Printed on post-consumer recycled paper
MUNIVEST MICHIGAN INSURED FUND, INC.
<PAGE>
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 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.
<PAGE>
DEAR SHAREHOLDER
For the six-month period ended April 30, 1997, the Common Stock of
MuniVest Michigan Insured Fund, Inc. earned $0.390 per share income
dividends, which included earned and unpaid dividends of $0.063.
This represents a net annualized yield of 5.87%, based on a month-
end per share net asset value of $13.39. Over the same period, the
total investment return on the Fund's Common Stock was +1.24%, based
on a change in per share net asset value from $13.65 to $13.39, and
assuming reinvestment of $0.393 per share income dividends.
For the six-month period ended April 30, 1997, the Fund's Auction
Market Preferred Stock had an average yield of 3.21%.
The Municipal Market Environment
Long-term tax-exempt revenue bonds traded in a relatively narrow
range throughout much of the six-month period ended April 30, 1997.
By mid-January 1997, municipal bond yields rose 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 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 in 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.
<PAGE>
As in recent quarters, the relative stability of long-term tax-
exempt bond yields was supported by low levels of new municipal bond
issuance. During the six months ended April 30, 1997, approximately
$90 billion in long-term tax-exempt bonds was underwritten, a
decline of over 6% compared to 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 compared to the three-month period ended April 30, 1996.
Overall investor demand remained strong, particularly from property
and casualty insurance companies and individual retail investors. In
recent years, investor demand increased whenever tax-exempt bond
yields 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 were generally 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, signs 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 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
Over the six months ended April 30, 1997, we generally maintained
the neutral investment strategy adopted in late 1996. However, in
recent months, we became slightly more defensive given the FRB's
apparent intention to raise short-term interest rates further to
ensure that domestic growth slows and any potential inflationary
pressures are contained. We expect that domestic US growth will
eventually slow and interest rates will fall in response.
<PAGE>
In ordinary circumstances, FRB actions impact the economy only after
a considerable period of time, usually measured in quarters, not
months. The first action by the FRB was taken in late March, and we
expect the economy to begin to slow by the beginning of the fourth
quarter of 1997, at the earliest. However, prospects for material
progress on reducing the Federal budget deficit may significantly
alter historic patterns of FRB actions and their consequences.
Should meaningful Federal budget reduction legislation be enacted
quickly, interest rates could fall sooner. Under such a scenario, we
are prepared to quickly adopt a more aggressive approach to the tax-
exempt bond market in order to more fully participate in the bond
market rally.
However, until such legislation is enacted, we expect that tax-
exempt bond yields will trade in a relatively narrow range, with
perhaps a slight upward bias in yields. We will continue to purchase
higher-couponed, defensively oriented securities whenever they
become available. Cash reserves may be raised to seek to further
protect the Fund's principal, but probably not exceed 5% for any
significant period of time. The scarcity of attractively priced
municipal issues is expected to continue making reinvestment
difficult.
Short-term, tax-exempt interest rates also continued to trade in a
relatively narrow range during the April period, typically between
3.50%--3.75%. However, in recent weeks short-term interest rates
rose to above 4%, largely in response to seasonal corporate and
individual tax pressures. Historically, such pressures are short-
lived and interest rates usually begin to decline by mid-May.
However, throughout the six-month period ended April 30, 1997, the
leverage of the Fund's Preferred Stock was very favorable and
significantly augmented the yield paid to Common Stock shareholders.
However, should the spread between short-term and long-term tax-
exempt rates narrow, the benefits of the leverage will decline and
the yield on the Common Stock will be reduced. (For a complete
explana-tion of the benefits and risks of leveraging, see page 1 of
this report to shareholders.)
In Conclusion
We appreciate your ongoing interest in MuniVest Michigan Insured
Fund, Inc., and we look forward to assisting you with your financial
needs in the months and years ahead.
Sincerely,
<PAGE>
(Arthur Zeikel)
Arthur Zeikel
President
(Vincent R. Giordano)
Vincent R. Giordano
Senior Vice President
(Fred K. Stuebe)
Fred K. Stuebe
Vice President and Portfolio Manager
May 23, 1997
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 some of the securities according to the
list at right.
AMT Alternative Minimum Tax (subject to)
DATES Daily Adjustable Tax-Exempt Securities
HDA Housing Development Authority
PCR Pollution Control Revenue Bonds
UT Unlimited Tax
VRDN Variable Rate Demand Notes
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (in Thousands)
<CAPTION>
S&P Moody's Face Value
STATE Ratings Ratings Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
Michigan--99.9% AAA Aaa $ 1,000 Belding, Michigan, Area Schools, Refunding, UT, 6.05% due
5/01/2021 (c) $ 1,016
AAA Aaa 1,000 Caledonia, Michigan, Community Schools, Refunding, UT,
6.625% due 5/01/2014 (b) 1,078
AAA Aaa 1,625 Central Michigan University Revenue Bonds, 5.50% due
10/01/2026 (c) 1,554
AAA Aaa 1,000 Coldwater, Michigan, Community Schools, UT, 6.30% due
5/01/2023 (e) 1,043
Delta County, Michigan, Economic Development Corp.,
Environmental Improvement Revenue Bonds, DATES (Mead
Escanaba Paper) (a):
NR* P1 1,000 Series E, 4.40% due 12/01/2023 1,000
NR* P1 3,000 Series F, 4.40% due 12/01/2013 3,000
AAA Aaa 2,000 Detroit, Michigan, Distributable State Aid, 7.20% due
5/01/1999 (b)(f) 2,143
AAA Aaa 6,750 Detroit, Michigan, Sewage Disposal Revenue Bonds, 6.625%
due 7/01/2001 (c)(f) 7,334
BBB Baa1 4,750 Dickinson County, Michigan, Economic Development Corp.,
Solid Waste Disposal, Revenue Refunding Bonds (Champion
International), 6.55% due 3/01/2007 4,935
AAA Aaa 6,500 Eastern Michigan University Revenue Bonds, 5.50% due
6/01/2027 (c) 6,215
Grand Ledge, Michigan, Public Schools District, UT (e):
AAA Aaa 8,000 6.60% due 5/01/2004 (f) 8,882
AAA Aaa 1,000 6.45% due 5/01/2014 1,068
AAA Aaa 7,000 Grand Rapids, Michigan, Water Supply System, Revenue
Refunding Bonds, 6.50% due 1/01/2015 (c) 7,450
AAA Aaa 5,250 Grand Traverse County, Michigan, Hospital Finance Authority,
Hospital Revenue Refunding Bonds (Munson Healthcare), Series
A, 6.25% due 7/01/2022 (b) 5,418
AAA Aaa 1,570 Grandville, Michigan, Public Schools District, Refunding, UT,
6.60% due 5/01/2015 (c) 1,696
AAA Aaa 2,250 Greenville, Michigan, Public Schools Building, UT, 5.75% due
5/01/2019 (e) 2,214
<PAGE>
Kalamazoo, Michigan, Hospital Finance Authority, Hospital
Facility Revenue Refunding and Improvement Bonds (Bronson
Methodist) (e):
AAA Aaa 1,435 5.75% due 5/15/2016 1,419
AAA Aaa 1,000 5.875% due 5/15/2026 997
AAA Aaa 1,180 Series A, 6.375% due 5/15/2017 1,239
AAA Aaa 2,660 Kent, Michigan, Hospital Finance Authority, Health Care
Revenue Bonds (Butterworth Health Systems), Series A, 5.625%
due 1/15/2026 (e) 2,552
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) 2,313
AAA Aaa 3,235 Lincoln Park, Michigan, School District, UT, 7% due
5/01/2020 (c) 3,598
A1 VMIG1++ 500 Michigan Higher Education Student Loan Authority Revenue
Bonds, VRDN, AMT, Series XII-D, 4.60% due 10/01/2015 (a)(b) 500
Michigan Municipal Bond Authority Revenue Bonds (Local
Government Loan Program), Series A (c):
AAA Aaa 1,000 6% due 12/01/2013 1,030
AAA Aaa 2,000 6.125% due 12/01/2018 2,049
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) 1,532
AAA Aaa 3,000 Michigan State Building Authority, Facilities Program Revenue
Bonds, Series I, 6% due 10/01/2004 (b) 3,178
Michigan State, HDA, Rental Housing, Revenue Refunding Bonds,
Series A:
AAA Aaa 5,000 5.875% due 10/01/2017 (b) 4,979
AAA Aaa 5,000 6.50% due 4/01/2023 (d) 5,160
Michigan State Hospital Finance Authority Revenue Bonds (b):
AAA Aaa 4,000 (Mercy Health Services), Series Q, 5.375% due 8/15/2026 3,735
AAA Aaa 1,225 (Mercy Health Services), Series R, 5.375% due 8/15/2026 1,144
AAA Aaa 1,360 (Saint John Hospital and Medical Center), Series A, 5.25%
due 5/15/2026 1,248
Michigan State Hospital Finance Authority, Revenue Refunding
Bonds:
AAA Aaa 2,305 (Mercy Health Services), Series T, 6.50% due 8/15/2013 (e) 2,490
AAA Aaa 3,000 (Saint John Hospital), Series A, 6% due 5/15/2013 (b) 3,069
AAA Aaa 1,460 (Sparrow Obligated Group), 6.50% due 11/15/2011 (e) 1,536
<PAGE>
AAA Aaa 5,000 Michigan State Strategic Fund, Limited Obligation, Revenue
Refunding Bonds (Detroit Edison Co. Project), Series CC, 6.95%
due 9/01/2021 (c) 5,395
NR* P1 3,100 Michigan State Strategic Fund, PCR, Refunding (Consumers Power
Project), VRDN, Series A, 4.30% due 4/15/2018 (a) 3,100
AAA Aaa 6,500 Monroe County, Michigan, Economic Development Corp., Limited
Obligation, Revenue Refunding Bonds (Detroit Edison Co.
Project), Series AA, 6.95% due 9/01/2022 (c) 7,601
AAA Aaa 4,500 Monroe County, Michigan, PCR (Detroit Edison Co. Project),
AMT, Series CC, 6.55% due 6/01/2024 (e) 4,712
AAA Aaa 2,500 Monroe County, Michigan, PCR (Detroit Edison Co. Project--
Monroe and Fermi Plants), AMT, Series 1, 7.65% due 9/01/2020
(c) 2,724
AAA Aaa 2,000 Montrose, Michigan, School District, UT, 5.60% due 5/01/2026
(e) 1,944
AAA Aaa 2,500 Northview, Michigan, Public Schools District, Refunding, UT,
5.80% due 5/01/2021 (e) 2,487
AAA Aaa 2,600 Novi, Michigan, Community School District, UT, 6.125% due
5/01/2013 (c) 2,689
AAA Aaa 1,000 Oakland University, Michigan, General Revenue Bonds, 5.75%
due 5/15/2026 (e) 989
AAA Aaa 1,000 Reeths-Puffer, Michigan, School District, Refunding, UT, 6%
due 5/01/2025 (c) 1,011
Royal Oak, Michigan, Hospital Finance Authority, Hospital
Revenue Bonds (William Beaumont Hospital):
AA Aaa 2,750 Series D, 6.75% due 1/01/2001 (f) 2,980
A1 VMIG1++ 300 VRDN, Series J, 4.40% due 1/01/2003 (a) 300
AAA Aaa 2,400 Three Rivers, Michigan, Community Schools (Building and Site),
UT, 6% due 5/01/2023 (e) 2,429
AAA Aaa 1,990 Tri-County, Michigan, Area School District, Refunding, UT,
5.25% due 5/01/2020 (c) 1,835
</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 AAA Aaa $ 1,500 Waterford, Michigan, School District Revenue Bonds, UT,
(concluded) 6.25% due 6/01/2012 (c) $ 1,572
AAA Aaa 1,450 Wayne Charter County, Michigan, Airport Revenue Bonds
(Detroit Metropolitan Airport), Sub-Lien, Series A, 6.50%
due 12/01/2001 (e)(f) 1,577
AAA Aaa 2,000 Western Michigan University, General Revenue Bonds, 6.125%
due 11/15/2022 (c) 2,033
AAA Aaa 2,000 Western Michigan University, Revenue Refunding Bonds,
Series B, 6.50% due 7/15/2021 (b) 2,130
AAA Aaa 1,300 Ypsilanti, Michigan, School District, Refunding, UT, 5.75%
due 5/01/2020 (c) 1,287
Total Investments (Cost--$143,442)--99.9% 148,609
Other Assets Less Liabilities--0.1% 196
--------
Net Assets--100.0% $148,805
========
<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, 1997.
(b)AMBAC Insured.
(c)FGIC Insured.
(d)FSA Insured.
(e)MBIA Insured.
(f)Prerefunded.
*Not Rated.
++Highest short-term rating by Moody's Investors Service,
Inc.
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF ASSETS, LIABILITIES AND CAPITAL
<CAPTION>
As of April 30, 1997
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$143,442,137) (Note 1a) $148,608,510
Cash 36,772
Interest receivable 2,892,393
Deferred organization expenses (Note 1e) 5,392
Prepaid expenses and other assets 25,613
------------
Total assets 151,568,680
------------
Liabilities: Payables:
Securities purchased $ 2,488,318
Dividends to shareholders (Note 1f) 135,760
Investment adviser (Note 2) 60,726 2,684,804
------------
Accrued expenses and other liabilities 78,953
------------
Total liabilities 2,763,757
------------
Net Assets: Net assets $148,804,923
============
Capital: Capital Stock (200,000,000 shares authorized) (Note 4):
Preferred Stock, par value $.05 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 102,717,370
Undistributed investment income--net 497,499
Accumulated realized capital losses on investments--net (Note 5) (10,314,316)
Unrealized appreciation on investments--net 5,166,373
------------
Total--Equivalent to $13.39 net asset value per share of Common
Stock (market price--$12.625) 98,804,923
------------
Total capital $148,804,923
============
<FN>
*Auction Market Preferred Stock.
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF OPERATIONS
<CAPTION>
For the Six Months Ended April 30, 1997
<S> <S> <C> <C>
Investment Interest and amortization of premium and discount earned $ 4,261,563
Income (Note 1d):
Expenses: Investment advisory fees (Note 2) $ 372,928
Commission fees (Note 4) 62,679
Professional fees 36,124
Accounting services (Note 2) 18,628
Transfer agent fees 18,264
Printing and shareholder reports 13,737
Directors' fees and expenses 11,148
Listing fees 8,493
Custodian fees 5,447
Pricing fees 3,172
Amortization of organization expenses (Note 1e) 1,783
Other 7,240
------------
Total expenses 559,643
------------
Investment income--net 3,701,920
------------
Realized & Realized gain on investments--net 106,037
Unrealized Gain Change in unrealized appreciation on investments--net (2,008,816)
(Loss) on ------------
Investments--Net Net Increase in Net Assets Resulting from Operations $ 1,799,141
(Notes 1b, 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
April 30, October 31,
Increase (Decrease) in Net Assets: 1997 1996
<S> <S> <C> <C>
Operations: Investment income--net $ 3,701,920 $ 7,416,066
Realized gain (loss) on investments--net 106,037 (1,201,355)
Change in unrealized appreciation/depreciation on investments
--net (2,008,816) 1,183,894
------------ ------------
Net increase in net assets resulting from operations 1,799,141 7,398,605
------------ ------------
<PAGE>
Dividends to Investment income--net:
Shareholders Common Stock (2,900,379) (5,654,230)
(Note 1f): Preferred Stock (795,340) (1,771,460)
------------ ------------
Net decrease in net assets resulting from dividends to
shareholders (3,695,719) (7,425,690)
------------ ------------
Net Assets: Total decrease in net assets (1,896,578) (27,085)
Beginning of period 150,701,501 150,728,586
------------ ------------
End of period* $148,804,923 $150,701,501
============ ============
<FN>
*Undistributed investment income--net $ 497,499 $ 491,298
============ ============
See Notes to Financial Statements.
</TABLE>
<TABLE>
FINANCIAL HIGHLIGHTS
<CAPTION>
For the
The following per share data and ratios have For the Period
been derived from information provided in the Six Months Apr. 30,
financial statements Ended 1993++ to
April 30, For the Year Ended October 31, Oct. 31,
Increase (Decrease) in Net Asset Value: 1997 1996 1995 1994 1993
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 13.65 $ 13.65 $ 11.83 $ 14.89 $ 14.18
Operating -------- -------- -------- -------- --------
Performance: Investment income--net .50 1.01 1.01 1.01 .47
Realized and unrealized gain (loss) on
investments--net (.26) --+++++ 1.82 (3.06) .80
-------- -------- -------- -------- --------
Total from investment operations .24 1.01 2.83 (2.05) 1.27
-------- -------- -------- -------- --------
Less dividends to Common Stock shareholders:
Investment income--net (.39) (.77) (.76) (.84) (.33)
-------- -------- -------- -------- --------
Capital charge resulting from issuance of
Common Stock -- -- -- -- (.03)
-------- -------- -------- -------- --------
Effect of Preferred Stock activity:++++
Dividends to Preferred Stock shareholders:
Investment income--net (.11) (.24) (.25) (.17) (.07)
Capital charge resulting from issuance of
Preferred Stock -- -- -- -- (.13)
-------- -------- -------- -------- --------
Total effect of Preferred Stock activity (.11) (.24) (.25) (.17) (.20)
-------- -------- -------- -------- --------
Net asset value, end of period $ 13.39 $ 13.65 $ 13.65 $ 11.83 $ 14.89
======== ======== ======== ======== ========
Market price per share, end of period $ 12.625 $ 12.375 $ 12.25 $ 10.25 $ 15.125
======== ======== ======== ======== ========
<PAGE>
Total Investment Based on market price per share 5.29%+++ 7.40% 27.59% (27.71%) 3.10%+++
Return:** ======== ======== ======== ======== ========
Based on net asset value per share 1.24%+++ 6.32% 23.18% (15.25%) 7.37%+++
======== ======== ======== ======== ========
Ratios to Average Expenses, net of reimbursement .75%* .77% .77% .76% .56%*
Net Assets:*** ======== ======== ======== ======== ========
Expenses .75%* .77% .77% .76% .78%*
======== ======== ======== ======== ========
Investment income--net 4.96%* 4.91% 5.21% 4.98% 4.67%*
======== ======== ======== ======== ========
Supplemental Net assets, net of Preferred Stock, end
Data: of period (in thousands) $ 98,805 $100,702 $100,729 $ 87,313 $108,647
======== ======== ======== ======== ========
Preferred Stock outstanding, end of period
(in thousands) $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000
======== ======== ======== ======== ========
Portfolio turnover 13.45% 47.10% 53.85% 49.03% 15.34%
======== ======== ======== ======== ========
Leverage: Asset coverage per $1,000 $ 2,976 $ 3,014 $ 3,015 $ 2,746 $ 3,173
======== ======== ======== ======== ========
Dividends Investment income--net $ 398 $ 886 $ 939 $ 615 $ 255
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.
++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 that occurred on December 1, 1994.
+++Aggregate total investment return.
+++++Amount is less than $.01 per share.
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, 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.
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* Financial futures contracts--The Fund may purchase or sell
interest rate futures contracts and options on such futures
contracts for the purpose of hedging the market risk on existing
securities or the intended purchase of securities. Futures contracts
are contracts for delayed delivery of securities at a specific
future date and at a specific price or yield. Upon entering into a
contract, the Fund deposits and maintains as collateral such initial
margin as required by the exchange on which the transaction is
effected. Pursuant to the contract, the Fund agrees to receive from
or pay to the broker an amount of cash equal to the daily
fluctuation in value of the contract. Such receipts or payments are
known as variation margin and are recorded by the Fund as unrealized
gains or losses. When the contract is closed, the Fund records a
realized gain or loss equal to the difference between the value of
the contract at the time it was opened and the value at the time it
was closed.
* Options--The Fund is authorized to write covered call options and
purchase put options. When the Fund writes an option, an amount
equal to the premium received by the Fund is reflected as an asset
and an equivalent liability. The amount of the liability is
subsequently marked to market to reflect the current market value of
the option written.
When a security is purchased or sold through an exercise of an
option, the related premium paid (or received) is added to (or
deducted from) the basis of the security acquired or deducted from
(or added to) the proceeds of the security sold. When an option
expires (or the Fund enters into a closing transaction), the Fund
realizes a gain or loss on the option to the extent of the premiums
received or paid (or gain or loss to the extent the cost of the
closing transaction exceeds the premium paid or received).
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.
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(f) Dividends and distributions--Dividends from net investment
income are declared and paid monthly. Distributions of capital gains
are recorded on the ex-dividend dates.
2. Investment Advisory Agreement and Transactions
with Affiliates:
The Fund has entered into an Investment Advisory Agreement with Fund
Asset Management, L.P. ("FAM"). The general partner of FAM is
Princeton Services, Inc. ("PSI"), an indirect wholly-owned
subsidiary of Merrill Lynch & Co., Inc. ("ML & Co."), which is the
limited partner.
FAM is responsible for the management of the Fund's portfolio and
provides the necessary personnel, facilities, equipment and certain
other services necessary to the operations of the Fund. For such
services, the Fund pays a monthly fee at an annual rate of 0.50% of
the Fund's average weekly net assets.
Accounting services are provided to the Fund by FAM at cost.
Certain officers and/or directors of the Fund are officers and/or
directors of FAM, PSI, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the six months ended April 30, 1997 were $19,424,572 and
$21,513,312, respectively.
Net realized and unrealized gains as of April 30, 1997 were as
follows:
Realized Unrealized
Gains Gains
Long-term investments $ 106,037 $ 5,166,373
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Total $ 106,037 $ 5,166,373
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As of April 30, 1997, net unrealized appreciation for Federal income
tax purposes aggregated $5,166,373, of which $5,344,600 related to
appreciated securities and $178,227 related to depreciated
securities. The aggregate cost of investments at April 30, 1997 for
Federal income tax purposes was $143,442,137.
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.
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Common Stock
For the year ended April 30, 1997, shares issued and outstanding
remained constant at 7,379,969. At April 30, 1997, total paid-in
capital amounted to $103,455,367.
Preferred Stock
Auction Market Preferred Stock ("AMPS") are shares of Preferred
Stock of the Fund that entitle their holders to receive cash
dividends at an annual rate that may vary for the successive
dividend periods. The yield in effect at April 30, 1997 was 4.15%.
As of April 30, 1997, there were 2,000 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 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 $49,641 as commissions.
5. Capital Loss Carryforward:
At October 31, 1996, the Fund had a net capital loss carryforward of
approximately $8,383,000, of which $4,574,000 expires in 2002,
$3,063,000 expires in 2003 and $746,000 expires in 2004. This amount
will be available to offset like amounts of any future taxable
gains.
6. Subsequent Event:
On May 9, 1997, the Fund's Board of Directors declared an ordinary
income dividend to Common Stock shareholders in the amount of
$.062845 per share, payable on May 29, 1997 to shareholders of
record as of May 19, 1997.
