MUNIVEST
CALIFORNIA
INSURED
FUND, INC.
Semi-Annual Report April 30, 1994
This report, including the financial information herein,
is transmitted to the shareholders of MuniVest California
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 California
Insured Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
<PAGE>
MUNIVEST CALIFORNIA INSURED FUND, INC.
The Benefits and
Risks of
Leveraging
MuniVest California 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 prevail-
ing 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.
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
pick-up on the Common Stock will be reduced. At the same
time, the market value on the fund's Common Stock (that is, its
price as listed on the American 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>
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
Robert E. Putney, III, Assistant Secretary
Custodian
The Bank of New York
110 Washington Street
New York, New York 10286
ASE Symbol
MVC
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
<PAGE>
DEAR SHAREHOLDER
For the six-month period ended April 30, 1994, the Common Stock of
MuniVest California Insured Fund, Inc. earned $0.482 per share income divi-
dends, which includes earned and unpaid dividends of $0.068. This rep-
resents a net annualized yield of 7.63%, based on a month-end per
share net asset value of $12.74. Over the same period, the total investment
return on the Fund's Common Stock was -11.95%, based on a change in
per share net asset value from $15.01 to $12.74, and assuming reinvestment
of $0.490 per share income dividends.
For the six-month period ended April 30, 1994, the Fund's Auction Market
Preferred Stock had an average yield of 3.06%.
The Environment
Inflationary expectations and investor sentiment changed for the worse
during the three-month period ended April 30, 1994. Following stronger-
than-expected economic results through year-end 1993, the Federal
Reserve Board broke with tradition on February 4, 1994 and publicly
announced a modest 25 basis point (0.25%) increase in short-term interest
rates. At the March 22 meeting of the Federal Open Market Committee,
the Federal Reserve Board again raised the Federal Funds rate by 25
basis points, followed by another 25 basis point increase on April 18.
Rather than view the Federal Reserve Board's first tightening move as a
preemptive strike against inflation, fixed-income investors focused on
Chairman Greenspan's implicit promise of further tightening should
the rate of inflation accelerate, and bond prices declined sharply. The
setback in the bond market was also reflected in greater stock market
volatility. While the second and third increases in the Federal Funds rate
were less of a surprise, investors remained concerned that interest
rates would trend upward sharply as the central bank aggressively
attempted to contain the inflationary pressures of an improving economy. At
the same time, highly leveraged investors were forced to liquidate positions
in the face of declining stock and bond prices. Investor confidence was
not restored with the announcement of the surprisingly slow 2.6% gross
domestic product growth rate for the first calendar quarter of 1994. Instead,
investors focused on the higher-than-expected (but still moderate) broad
inflation measures and became concerned that business activity was
beginning to stagnate as inflationary pressures were increasing.
The volatility in the US capital markets was mirrored in international
markets during the period. Political and economic developments, along
with concerns of heightened global inflationary pressures led to a sell-off
in most capital markets, especially the emerging markets that had appre-
ciated strongly in 1993.
<PAGE>
The Municipal Market
During the six months ended April 30, 1994, tax-exempt bond yields ex-
hibited considerable volatility as they rose to their highest level in the
past two years. As measured by the Bond Buyer Revenue Bond Index, the yield
on newly issued municipal bonds maturing in 30 years rose over 90
basis points to 6.42% by the end of April. Yields on seasoned
municipal revenue bonds rose by over 100 basis points in sympathy
with the equally dramatic increase in long-term US Treasury bond yields. By
the end of April, yields on US Treasury securities rose by over 95 basis
points to approximately 7.30%.
Long-term tax-exempt bond yields were essentially unchanged from the
end of October 1993 to the end of January 1994. However, on a weekly
basis, tax-exempt bond yields fluctuated by as much as 15 basis points as
investors were unable to reconcile the rapid economic growth seen late last
year with continued low inflation. Following the initial interest rate in-
crease by the Federal Reserve Board in early February, municipal bond
prices began to erode in concert with taxable bond prices as investors
began to sell securities in anticipation of further interest rate increases.
This fear led investors to withdraw from the tax-exempt market. From early
February to the end of March, total assets of all tax-exempt bond funds
declined by $14 billion to $247 billion. This decline in investor demand,
coupled with fears that the robust economic recovery seen during the
fourth quarter of 1993 would continue well into 1994, helped push municipal
bond yields higher in February and March. Attracted by tax-exempt yields
in excess of 6.25%, investor demand returned in April, allowing yields to
decline approximately 15 basis points to end the April period at approxi-
mately 6.40%.
A rise in tax-exempt bond yields the magnitude of that experienced over
the past six months has not been seen since 1987 when municipal bond
rates rose 250 basis points between March and October of that year. It is
very important to note that the recent municipal bond price declines were
largely the result of consistent and insistent selling pressures over the
last two months. In 1987, the tax-exempt bond market was much more
volatile and, at times, chaotic as investors sought to liquidate positions
without concern for fundamental value. For the most part, the recent
price deterioration has been orderly, and the municipal bond market's
liquidity and integrity have not been challenged or jeopardized.
<PAGE>
To a large extent, the municipal bond market has continued to be sup-
ported by its strong technical position. New-issue volume for the last
six months has been less than $105 billion. This represents a decline of
approximately 20% versus the comparable period a year ago. This decline
was expected and has been discussed in previous shareholder reports. This
reduced issuance has minimized potential selling pressure in recent
months since institutional investors have been wary of selling appreciable
amounts of securities that they may be unable to replace later this year at
any price level. We expect this decline in issuance to continue since we
anticipate recent yield increases to significantly impact future municipal
bond issuance. Just as higher mortgage rates slow home mortgage refi-
nancings, the recent rise in bond yields will prevent bond refinancings
from becoming the driving force in bond issuance in 1994 as they were
in 1993.
Despite recent price declines, tax-exempt securities remain among the
most attractive investment alternatives available. After the recent yield
increases, longer-term municipal securities yielded approximately 90%
of comparable US Treasury yields. Purchasers of these municipal bonds
also accrue substantial after-tax yield advantages. To investors in the 39%
marginal Federal income tax bracket, the purchase of a municipal bond
yielding 6.50% represents an after-tax equivalent of 10.65%. With pre-
vailing estimates of 1994 inflation at no more than 3%--4%, real after-tax
rates in excess of 6.50% easily compensate longer-term investors
for much of the price volatility recently experienced.
Portfolio Strategy
MuniVest California Insured Fund, Inc. has witnessed relatively few
structural changes over the past six-month period. Because of historically
narrow credit quality spreads, the percentage of assets committed to
uninsured positions was slightly reduced. Currently, 88.5% of the
Fund's total assets are rated AAA with credit enhancement. We antici-
pate maintaining a fully invested position with the Fund to take advantage
of the technical conditions of diminished supply of California tax-exempt
issuance. We expect this to generate price gains for municipal bonds in the
months ahead.
We appreciate your ongoing interest in MuniVest California Insured Fund,
Inc., and we look forward to serving your investment needs and objectives
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 25, 1994
<PAGE>
Portfolio
Abbreviations
To simplify the listings of MuniVest California Insured
Fund, Inc.'s portfolio holdings in the Schedule of
Investments, we have abbreviated the names of many
of the securities according to the list at right.
AMT Alternative Minimum Tax (subject to)
COP Certificates of Participation
GO General Obligation Bonds
HFA Housing Finance Authority
INFLOS Inverse Floating Rate Municipal Bonds
LEVRRS Leveraged Reverse Rate Securities
RIB Residual Interest Bonds
VRDN Variable Rate Demand Notes
<TABLE>
SCHEDULE OF INVESTMENTS (in Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
California--100.4% AAA Aaa $ 3,000 Alameda County, California, COP (Santa Rita Jail Project),
Refunding, 5.70% due 12/01/2014 (d) $ 2,813
AAA Aaa 2,000 Brea, California, Redevelopment Agency, Tax Allocation Refunding
Bonds (Redevelopment Project), 5.50% due 8/01/2017 (d) 1,806
A- Baa1 3,750 Burbank, California, Redevelopment Agency, Tax Allocation
Refunding Bonds, Series A, 6% due 12/01/2023 3,445
California Health Facilities, Financing Authority Revenue Bonds:
AAA Aaa 1,000 (Catholic Health), Series A, 6% due 7/01/2013 (d) 981
A1+ VMIG1 1,600 (Catholic Health), VRDN, Series C, 3% due 7/01/2020 (a) (d) 1,600
AAA Aaa 2,500 LEVRRS, 7.706% due 7/01/2017 (b)(e) 1,906
AAA Aaa 2,175 (Scripps Memorial Hospital), Series A, 6.375% due 10/01/2022 (d) 2,195
A1+ VMIG1 200 (Sutter Health), VRDN, Series A, 2.85% due 3/01/2020 (a) 200
A+ Aa 2,000 California HFA Revenue Bonds, RIB, 9.621% due 8/01/2023 (e) 2,015
California State Public Works Board, Lease Revenue Bonds (Various
Community College Projects), Series A:
AAA Aaa 3,500 6% due 12/01/2012 3,427
AAA Aaa 4,200 6% due 12/01/2017 4,061
<PAGE>
AAA Aaa 500 California State University and Colleges, Student Union Revenue
Bonds (North Ridge), Series B, 6% due 11/01/2022 (d) 482
AAA Aaa 4,750 California State, Various Purpose, GO, 6% due 10/01/2021 (d) 4,577
AAA Aaa 1,500 California Statewide Community Development Authority, Revenue
Refunding Bonds, COP (Sutter Health), 6.125% due 8/15/2022 (b) 1,465
AAA Aaa 500 Contra Costa, California, Water District, Water Revenue Bonds,
Series E, 5.75% due 10/01/2018 (b) 466
AAA Aaa 1,250 Cucamonga, California, County Water District, COP (Water Facilities
Projects), 5.45% due 9/01/2023 (c) 1,110
AAA Aaa 2,150 Fairfield, California, Public Financing Authority, Revenue Refunding
Bonds, Series B, 5.80% due 4/01/2023 (d) 2,008
AAA Aaa 1,400 Folsom, California, Public Financing Authority, Revenue Refunding
Bonds, 6% due 10/01/2019 (b) 1,350
AAA Aaa 9,775 Glendale, California, Redevelopment Agency, Tax Allocation Revenue
Refunding Bonds (Central Glendale Redevelopment Project), 6%
due 12/01/2020 (b) 9,423
AAA Aaa 235 Industry, California, Refunding Bonds, 6% due 7/01/2021 (c) 227
AAA Aaa 2,365 Los Angeles, California, Community Redevelopment Agency, Tax
Allocation Bonds (Hollywood Redevelopment Project), Series B, 6%
due 7/01/2017 (d) 2,284
AAA Aaa 2,000 Los Angeles, California, Department of Water and Power, Electric
Plant Revenue Bonds, 6% due 8/15/2032 (d) 1,911
Los Angeles, California, Wastewater Systems, Revenue
Refunding Bonds (c):
AAA Aaa 2,750 Series A, 6% due 12/01/2018 2,654
AAA Aaa 2,850 Series D, 4.70% due 11/01/2019 2,266
Los Angeles County, California, COP (Correctional Facilities
Project) (d):
AAA Aaa 735 6.50% due 9/01/2013 746
AAA Aaa 2,000 6% due 9/01/2015 1,946
NR NR 1,000 Los Angeles County, California, COP (Marina Del Rey),
Series A, 6.25% due 7/01/2003 1,007
Los Angeles County, California, Metropolitan Transportation
Authority, Sales Tax Revenue Refunding Bonds (d):
AAA Aaa 6,000 (Proposition A), Series A, 5.625% due 7/01/2018 5,486
A1+ VMIG1 1,900 (Proposition C--Second Series), VRDN, Series A, 3% due 7/01/2020 (a) 1,900
<PAGE>
AAA Aaa 8,500 Los Angeles County, California, Transportation Commission Sales
Tax Revenue Bonds (Proposition C--Second Series), Series A, 6%
due 7/01/2023 (d) 8,172
M-S-R Public Power Agency, California, Revenue Bonds
(San Juan Project):
AAA Aaa 3,500 Refunding, Series F, 6% due 7/01/2020 (b) 3,370
AAA Aaa 1,000 Series E, 6% due 7/01/2022 (d) 962
AAA Aaa 1,000 Northern California Transmission Revenue Bonds, RIB, 7.774%
due 4/29/2024 (d) (e) 788
AAA Aaa 500 Oakland, California, GO, 6% due 6/15/2022 (c) 481
AAA Aaa 1,000 Oakland, California, Redevelopment Agency, Refunding Bonds, INFLOS,
9.081% due 9/01/2019 (d)(e) 914
AAA Aaa 5,000 Ontario, California, Redevelopment Financing Authority Revenue Bonds
(Ontario Redevelopment Project No. 1), 6% due 8/01/2015 (d) 4,865
A1 NR 300 Orange County, California, COP (Office and Courthouse Project), VRDN,
2.90% due 12/01/2015 (a) 300
AAA Aaa 900 Orange County, California, COP, Various Sanitation Districts, VRDN,
3% due 8/01/2013 (a)(b) 900
NR Baa 2,925 Pleasanton, California, Joint Powers Financing Authority, Revenue
Reassessment Bonds, Series A, 6.15% due 9/02/2012 2,704
AAA Aaa 1,000 Redding, California, Electrical Systems Revenue Bonds, COP, RIB,
8.56% due 6/01/2019 (c)(e) 847
AAA Aaa 4,000 Redding, California, Redevelopment Agency, Tax Allocation Notes,
Refunding Bonds (Canby-Hilltop-Cypress), Series D, 5% due 9/01/2023 3,285
AAA Aaa 5,000 Sacramento, California, Municipal Utilities District, Electric
Revenue Bonds, Series B, 6.375% due 8/15/2022 (d) 5,046
San Jose, California, Airport Revenue Refunding Bonds:
AAA Aaa 2,750 5.75% due 3/01/2016 (d) 2,590
AAA Aaa 2,000 AMT, 5.70% due 3/01/2018 (c) 1,855
AAA Aaa 3,500 Simi Valley, California, Public Financing Authority, Revenue
Refunding Bonds, 5.75% due 9/01/2023 (d) 3,244
AAA VMIG1 1,400 Southern California, Public Power Authority, Revenue Refunding Bonds
(Transmission Project), VRDN, 3.35% due 7/01/2019 (a)(b) 1,400
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
California AAA Aaa $ 5,000 Suisun City, California, Redevelopment Agency, Tax Allocation
(concluded) Refunding Bonds (Suisun City Redevelopment Project),
6% due 10/01/2018 (d) $ 4,832
University of California, Revenue Refunding Bonds (Multiple
Purpose Projects):
AAA Aaa 2,845 Series B, 6% due 9/01/2013 (d) 2,787
AAA Aaa 1,500 Series C, 5% due 9/01/2023 (b) 1,232
Total Investments (Cost--$124,271)--100.4% 116,331
Liabilities in Excess of Other Assets--(0.4)% (403)
--------
Net Assets--100.0% $115,928
========
<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, 1994.
(b) AMBAC Insured.
(c) FGIC Insured.
(d) MBIA Insured.
(e) 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, 1994.
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF ASSETS, LIABILITIES AND CAPITAL
<CAPTION>
As of April 30, 1994
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$124,270,718) (Note 1a) $116,330,488
Cash 45,075
Interest receivable 1,860,362
Deferred organization expenses (Note 1e) 28,723
Prepaid expenses 1,685
------------
Total assets 118,266,333
------------
Liabilities: Payables:
Securities purchased $ 2,010,000
Dividends to shareholders (Note 1g) 246,488
Investment adviser (Note 2) 39,800 2,296,288
------------
Accrued expenses 42,546
------------
Total liabilities 2,338,834
------------
Net Assets: Net assets $115,927,499
============
Capital: Capital Stock (200,000,000 shares authorized) (Note 4):
Preferred Stock, par value $.10 per share (800 shares of AMPS* issued and
outstanding at $50,000 per share liquidation preference) $ 40,000,000
Common Stock, par value $.10 per share (5,961,365 shares issued and outstanding) $ 596,137
Paid-in capital in excess of par 82,965,862
Undistributed investment income--net 451,564
Accumulated realized capital losses--net (145,834)
Unrealized depreciation on investments--net (7,940,230)
------------
Total--Equivalent to $12.74 net asset value per share of Common Stock
(market price--$12.00) 75,927,499
------------
Total capital $115,927,499
============
<FN>
*Auction Market Preferred Stock.
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF OPERATIONS
<CAPTION>
For the Six Months Ended April 30, 1994
<S> <S> <C> <C>
Investment Interest and amortization of premium and discount earned $ 3,513,917
Income
(Note 1d):
Expenses: Investment advisory fees (Note 2) $ 309,619
Commission fees (Note 4) 73,786
Professional fees 31,597
Accounting services (Note 2) 20,445
Transfer agent fees 11,441
Directors' fees and expenses 10,989
Printing and shareholder reports 10,863
Listing fees 7,038
Custodian fees 3,609
Amortization of organization expenses (Note 1e) 3,104
Pricing fees 2,598
Other 4,980
Total expenses before reimbursement 490,069
------------
Reimbursement of expenses (Note 2) (67,686)
------------
Total expenses after reimbursement 422,383
------------
Investment income--net 3,091,534
------------
Realized & Realized loss on investments--net (145,831)
Unrealized Change in unrealized appreciation/depreciation on investments--net (12,975,014)
Loss on ------------
Investments Net Decrease in Net Assets Resulting from Operations $(10,029,311)
- - --Net ============
(Notes 1d
& 3):
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
For the Six For the Period
Months Ended April 30, 1993++
Increase (Decrease) in Net Assets: April 30, 1994 to Oct. 31, 1993
<S> <S> <C> <C>
Operations: Investment income--net $ 3,091,534 $ 2,869,528
Realized gain (loss) on investments--net (145,831) 473,023
Change in unrealized appreciation/depreciation on investments--net (12,975,014) 5,034,784
------------ ------------
Net increase (decrease) in net assets resulting from operations (10,029,311) 8,377,335
------------ ------------
Dividends to Investment income--net:
Shareholders Common Stock (2,509,019) (2,026,175)
(Note 1g): Preferred Stock (592,752) (381,552)
Realized gain on investments--net:
Common Stock (410,130) --
Preferred Stock (62,896) --
------------ ------------
Net decrease in net assets resulting from dividends to shareholders (3,574,797) (2,407,727)
------------ ------------
Common & Net proceeds from issuance of Common Stock -- 83,636,531
Preferred Proceeds from issuance of Preferred Stock -- 40,000,000
Stock Offering and underwriting costs resulting from the issuance of Common Stock 34,413 (755,000)
Transactions Value of shares issued to Common Stock shareholders in reinvestment of dividends -- 546,050
(Notes 1e ------------ ------------
& 4): Net increase in net assets derived from stock transactions 34,413 123,427,581
------------ ------------
Net Assets: Total increase (decrease) in net assets (13,569,695) 129,397,189
Beginning of period 129,497,194 100,005
------------ ------------
End of period* $115,927,499 $129,497,194
============ ============
<FN>
*Undistributed investment income-net $ 451,564 $ 461,801
============ ============
++Commencement of Operations.
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
<CAPTION>
The following per share data and ratios have been derived
from information provided in the financial statements. For the Six For the Period
Months Ended April 30 1993++
Increase (Decrease) in Net Asset Value: April 30, 1994 to Oct. 31, 1993
<S> <S> <C> <C>
Per Share Net asset value, beginning of period $ 15.01 $ 14.18
Operating ----------- -----------
Performance: Investment income--net .52 .48
Realized and unrealized gain (loss) on investments--net (2.19) .91
----------- -----------
Total from investment operations (1.67) 1.39
----------- -----------
Less dividends to Common Stock shareholders:
Investment income--net (.42) (.34)
Realized gain on investments--net (.07) --
----------- -----------
Total dividends to Common Stock shareholders (.49) (.34)
----------- -----------
Capital charge resulting from issuance of Common Stock -- (.03)
----------- -----------
Effect of Preferred Stock activity:++++
Dividends to Preferred Stock shareholders:
Investment income--net (.10) (.06)
Realized gain on investments--net (.01) --
Capital charge resulting from issuance of Preferred Stock -- (.13)
----------- -----------
Total effect of Preferred Stock activity (.11) (.19)
----------- -----------
Net asset value, end of period $ 12.74 $ 15.01
=========== ===========
Market price per share, end of period $ 12.00 $ 14.75
=========== ===========
Total Based on market price per share (15.60%)+++ 0.64%+++
Investment =========== ===========
Return:** Based on net asset value per share (11.95%)+++ 8.34%+++
=========== ===========
<PAGE>
Ratios to Expenses, net of reimbursement .68%* .41%*
Average =========== ===========
Net Expenses .79%* .83%*
Assets:*** =========== ===========
Investment income--net 4.97%* 4.82%*
=========== ===========
Supplemental Net assets, net of Preferred Stock, end of period (in thousands) $ 75,927 $ 89,497
Data: =========== ===========
Preferred Stock outstanding, end of period (in thousands) $ 40,000 $ 40,000
=========== ===========
Portfolio turnover 20.12% 38.34%
=========== ===========
Dividends Investment income--net $ 741 $ 477
Per Share
on Preferred
Stock
Outstanding:
<FN>
++Commencement of Operations.
++++The Fund's Preferred Stock was issued on June 1, 1993.
+++Aggregate total investment return.
*Annualized.
**Total investment returns based on market value, which can be significantly
greater or lesser than the net asset value, result in substantially different
returns. Total investment returns exclude the effects of sales loads.
***Do not reflect the effect of dividends to Preferred Stock shareholders.
See Notes to Financial Statements.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
MuniVest California Insured Fund, Inc. (the "Fund") is registered
under the Investment Company Act of 1940 as a non-diversified,
closed-end management investment company. The following is a
summary of significant accounting policies followed by the Fund.
The Fund's Common Stock is listed on the American Stock Exchange
under the symbol MVC.
(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, 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. 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) 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.
(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.
<PAGE>
(d) Security transactions and investment income--Security trans-
actions 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 organiza-
tion expenses are amortized on a straight-line basis over a five-year
period beginning with the commencement of operations of the Fund.
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) Non-income producing investments--Written and purchased
options are non-income producing investments.
(g) 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). Effective January 1, 1994, the
investment advisory business of FAM was reorganized from a
corporation to a limited partnership. Both prior to and after the
reorganization, ultimate control of FAM was vested with Merrill
Lynch & Co., Inc. ("ML & Co."). The general partner of FAM is
Princeton Services, Inc., an indirect wholly-owned subsidiary of
ML & Co. The limited partners are ML & Co. and Merrill Lynch
Investment Management, Inc. ("MLIM"), which is also an indirect
wholly-owned subsidiary of ML & Co.
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. For the six months ended April
30, 1994, FAM earned fees of $309,619, of which $67,528 was volun-
tarily waived. FAM also reimbursed the Fund $158 for additional
expenses.
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, MLIM, Merrill Lynch, Pierce, Fenner & Smith Inc.
("MLPF&S"), and/or ML & Co.
<PAGE>
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the six months ended April 30, 1994 were $24,090,443 and
$28,431,577, respectively.
Net realized and unrealized losses as of April 30, 1994 were as follows:
Realized Unrealized
Losses Losses
Long-term investments $ (145,831) $(7,940,230)
----------- -----------
Total $ (145,831) $(7,940,230)
=========== ===========
As of April 30, 1994, net unrealized depreciation for Federal income
tax purposes aggregated $7,940,230, of which $31,409 related to
appreciated securities and $7,971,639 related to depreciated securities.
The aggregate cost of investments at April 30, 1994 for Federal
income tax purposes was $124,270,718.
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, 1994, shares issued and out-
standing remained constant at 5,961,365. At April 30, 1994, total paid-in
capital amounted to $83,561,999.
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, 1994 was 3.09%.
In connection with the offering of AMPS, the Fund reclassified 800
shares of unissued capital stock as AMPS. For the six months ended
April 30, 1994, there were 800 AMPS authorized, issued and
outstanding with a liquidation preference of $50,000 per share, plus
accumulated and unpaid dividends of $33,808.
The Fund pays commissions to certain broker-dealers at the end of
each auction at the annual rate of one-quarter of 1% calculated on the
proceeds of each auction. For the year ended April 30, 1994, MLPF&S,
an affiliate of MLIM, earned $90,998 as commissions.
5. Subsequent Event:
On May 6, 1994, the Fund's Board of Directors declared an ordinary
income dividend to Common Stock shareholders in the amount of
$.067835 per share, payable on May 27, 1994 to shareholders of record
as of May 17, 1994.
<PAGE>
PER SHARE INFORMATION
<TABLE>
Per Share Selected
Quarterly
Financial Data*
<CAPTION>
Net Realized Unrealized Dividends/Distributions
Investment Gains Gains Net Investment Income Capital Gains
For the Period Income (Losses) (Losses) Common Preferred Common Preferred
<S> <C> <C> <C> <C> <C> <C> <C>
April 30, 1993++ to July 31, 1993 $.22 $.03 $ .17 $.12 $.02 -- --
August 1, 1993 to October 31, 1993 .26 .05 .66 .22 .04 -- --
November 1, 1993 to January 31, 1994 .26 .06 -- .21 .05 $.07 $.01
February 1, 1994 to April 30, 1994 .26 (.08) (2.17) .21 .05 -- --
<CAPTION>
Net Asset Value Market Price**
For the Period High Low High Low Volume***
<S> <C> <C> <C> <C> <C>
April 30, 1993++ to July 31, 1993 $14.56 $14.12 $15.125 $12.375 382
August 1, 1993 to October 31, 1993 15.35 14.30 15.25 14.50 491
November 1, 1993 to January 31, 1994 15.00 14.28 15.00 13.25 436
February 1, 1994 to April 30, 1994 14.94 11.88 14.25 11.50 592
<FN>
++Commencement of Operations.
*Calculations are based upon Common Stock outstanding at the end of each period.
**As reported in the consolidated transaction reporting system.
***In thousands.
</TABLE>
