MUNIVEST
NEW JERSEY
FUND, INC.
[FUND LOGO]
STRATEGIC
Performance
Annual Report
October 31, 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
Theodore R. Jaeckel Jr., Vice President
Gerald M. Richard, Treasurer
Patrick D. Sweeney, Secretary
Custodian
The Bank of New York
90 Washington Street
New York, NY 10286
Transfer Agents
Common Stock:
The Bank of New York
101 Barclay Street
New York, NY 10286
Preferred Stock:
IBJ Schroder Bank & Trust Company
One State Street
New York, NY 10004
NYSE Symbol
MVJ
This report, including the financial information herein, is
transmitted to the shareholders of MuniVest New Jersey 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
New Jersey Fund, Inc.
Box 9011
Princeton, NJ
08543-9011 #16634 -- 10/97
[RECYCLE LOGO]
Printed on post-consumer recycled paper
MUNIVEST NEW JERSEY FUND, INC.
The Benefits and
Risks of
Leveraging
MuniVest New Jersey 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.
Important Tax
Information
(unaudited)
All of the net investment income distributions paid by MuniVest New
Jersey Fund, Inc. during its taxable year ended October 31, 1997
qualify as tax-exempt interest dividends for Federal income tax
purposes. Additionally, there were no capital gains distributed by the
Fund during the year.
Please retain this information for your records.
MuniVest New Jersey Fund, Inc., October 31, 1997
DEAR SHAREHOLDER
For the year ended October 31, 1997, the Common Stock of MuniVest New
Jersey Fund, Inc. earned $0.778 per share income dividends, which
included earned and unpaid dividends of $0.066. This represents a net
annualized yield of 5.49%, based on a month-end net asset value of
$14.18 per share. Over the same period, the total investment return on
the Fund's Common Stock was +9.19%, based on a change in per share net
asset value from $13.78 to $14.18, and assuming reinvestment of $0.777
per share income dividends.
For the six-month period ended October 31, 1997, the total investment
return on the Fund's Common Stock was +7.24%, based on a change in per
share net asset value from $13.61 to $14.18, and assuming reinvestment
of $0.390 per share income dividends.
For the six-month period ended October 31, 1997, the Fund's Auction
Market Preferred Stock had an average yield of 3.19%.
The Municipal Market Environment
Long-term interest rates generally declined during the six-month
period ended October 31, 1997. The general financial environment has
remained one of solid economic growth tempered by few or no
inflationary pressures. While economic growth has been conducive to
declining bond yields, it has remained strong enough to suggest that
the Federal Reserve Board (FRB) might find it necessary to raise
short-term interest rates. This would be intended to slow economic
growth and ensure that any incipient inflationary pressures would be
curtailed. There were investor concerns that the FRB would be forced
to raise interest rates prior to year-end, thus preventing an even
more dramatic decline in interest rates. Long-term tax-exempt revenue
bonds, as measured by the Bond Buyer Revenue Bond Index, declined over
50 basis points (0.50%) to end the six-month period ended October 31,
1997 at 5.60%.
Similarly, long-term US Treasury bond yields generally moved lower
during most of the six-month period ended October 31, 1997. However,
the turmoil in the world's equity markets during the last week in
October has resulted in a significant rally in the Treasury bond
market. The US Treasury bond market was the beneficiary of a flight to
quality mainly by foreign investors whose own domestic markets have
continued to be very volatile. Prior to the initial decline in Asian
equity markets, long-term US Treasury bond yields were essentially
unchanged. By the end of October, US Treasury bond yields declined 80
basis points to 6.15%, their lowest level of 1997.
The tax-exempt bond market's continued underperformance as compared to
its taxable counterpart has been largely in response to its ongoing
weakening technical position. As municipal bond yields have declined,
municipalities have hurriedly rushed to refinance outstanding higher-
couponed debt with new issues financed at present low rates. During
the last six months, over $118 billion in new long-term tax-exempt
issues were underwritten, an increase of over 25% versus the
comparable period a year ago. As interest rates have continued to
decline, these refinancings have intensified municipal bond issuance.
During the past three months, approximately $60 billion in new long-
term municipal securities were underwritten, an increase of over 34%
as compared to the October 31, 1996 quarter.
The recent trend toward larger and larger bond issues has also
continued.
However, issues of such magnitude usually must be attractively priced
to ensure adequate investor interest. Obviously, the yields of other
municipal bond issues are impacted by the yield premiums such large
issuers have been required to pay. Much of the municipal bond market's
recent underperformance can be traced to market pressures that these
large bond issuances have exerted.
In our opinion, the recent correction in world equity markets has
enhanced the near-term prospects for continued low, if not declining,
interest rates in the United States. It is likely that the recent
correction will result in slower US domestic growth in the coming
months. This decline is likely to be generated in part by reduced US
export growth. Additionally, some decline in consumer spending also
can be expected in response to reduced consumer confidence. Perhaps
more importantly, it is likely that barring a dramatic and unexpected
resurgence in domestic growth, the FRB may be unwilling to raise
interest rates until the full impact of the equity market's
corrections can be established.
All of these factors suggest that for at least the near term, interest
rates, including tax-exempt bond yields, are unlikely to rise by any
appreciable amount. It is probable that municipal bond yields will
remain under some pressure as a result of continued strong new-issue
supply. However, the recent pace of municipal bond issuance is likely
to be unsustainable. Continued increases in bond issuance will require
lower tax-exempt bond yields to generate the economic savings
necessary for additional municipal bond refinancing. With tax-exempt
bond yields at already attractive yield ratios relative to
US Treasury bonds (approximately 90% at the end of October), any
further pressure on the municipal market may represent an attractive
investment opportunity.
Portfolio Strategy
The Fund finished the 12-month period ended October 31, 1997 with a
stable and competitive dividend stream and a large core position in
high-quality, income-oriented securities. We invested over 86% of the
Fund's net assets in securities rated in the top two rating categories
by either Moody's Investors Service, Inc. or Standard & Poor's Ratings
Services. Our investment strategy was divided between seeking to
improve average call protection and employing a range-bound approach
to interest rate fluctuations, which entails reducing market exposure
during periods of strength and utilizing times of weakness as an
opportunity to lock in attractive yields.
New-issue volume in New Jersey for the 12 months ended October 31,
1997 totaled $8.18 billion, representing a sharp jump from the $5.89
billion issued the prior year. Included in this total are the $2.75
billion Federally taxable bonds issued to eliminate the state pension
system's unfunded obligations.
The New Jersey economy continued to exhibit signs of strength in line
with the growth evident on the national level. The unemployment rate
at the end of September 1997 was at 5.4%, sharply lower than the 6.2%
rate at the end of September 1996. Median family and household income
totals continued to exceed the national average by a significant
margin. In June, Governor Whitman signed a state budget for the fiscal
year starting July 1, 1997, which is a 5% increase over the previous
year's budget.
In our April shareholder report, we cited concern over FRB monetary
policy as justification for a more cautious investment outlook. Since
that time, the bond market was buffeted by shifting perceptions over
the sustainability of economic growth and the resurgence of inflation.
While the US economy consistently exhibited surprising strength and
durability at this late stage in the expansion, most inflationary
measures continue to demonstrate an economy operating without any
significant capacity constraints. These circumstances presented a
favorable backdrop for bonds and, as a result, we preferred to keep
the Fund fully invested. Recent evidence of continued solid economic
growth, accompanied by increasingly tight labor markets, suggest that
the need for a more restrictive monetary policy has risen. These
developments would usually cause us to become more cautious and
implement an investment strategy designed to preserve the gains
achieved thus far. However, the recent volatility in world equity
markets resulted in a flight to quality causing long-term interest
rates to decline to their lows of the year. Consequently, the risk of
a further monetary policy tightening has receded. In our view, until
the full impact of the world equity markets' correction can be
determined, our adoption of a more neutral positioning for the Fund
seems appropriate. We will continue to seek to provide and maintain
attractive dividends.
In Conclusion
We appreciate your ongoing interest in MuniVest New Jersey Fund, Inc.,
and we look forward to assisting you with your financial needs in the
months and years ahead.
Sincerely,
/S/ARTHUR ZEIKEL
Arthur Zeikel
President
/S/VINCENT R. GIORDANO
Vincent R. Giordano
Senior Vice President
/S/THEODORE R. JAECKEL JR.
Theodore R. Jaeckel Jr.
Vice President and Portfolio Manager
December 8, 1997
We are pleased to announce that Theodore R. Jaeckel Jr. is responsible
for the day-to-day management of MuniVest New Jersey Fund, Inc.
Mr. Jaeckel has been employed by Merrill Lynch Asset Management, L.P.
(an affiliate of the Fund's investment adviser) since 1991 as Vice
President and Portfolio Manager. Prior thereto, he was employed by
Chemical Bank as Vice President in their Tax-Exempt Bond Division.
<TABLE>
<CAPTION>
PROXY RESULTS
During the six-month period ended October 31, 1997, MuniVest New Jersey Fund, Inc. Common Stock shareholders voted on the
following proposals. The proposals were approved at a shareholders' meeting on September 11, 1997. The description of each
proposal and number of shares voted are as follows:
Shares Voted Shares Withheld
For From Voting
<S> <C> <C> <C>
1. To elect the Fund's Board of Directors: Edward H. Meyer 5,217,086 170,533
Jack B. Sunderland 5,217,489 170,130
J. Thomas Touchton 5,219,746 167,873
Arthur Zeikel 5,219,196 168,423
<CAPTION>
Shares Voted Shares Voted Shares Voted
For Against Abstain
<S> <C> <C> <C>
2. To ratify the selection of Ernst & Young LLP as the Fund's independent
auditors for the current fiscal year. 5,219,925 80,741 86,953
During the six-month period ended October 31, 1997, MuniVest New Jersey Fund, Inc. Preferred Stock shareholders voted on the
following proposals. The proposals were approved at a shareholders' meeting on September 11, 1997. The description of each
proposal and number of shares voted are as follows:
<CAPTION>
Shares Voted Shares Withheld
For From Voting
<S> <C> <C> <C>
1. To elect the Fund's Board of Directors: Donald Cecil 1,442 48
M. Colyer Crum 1,442 48
Edward H.Meyer 1,442 48
Jack B. Sunderland 1,442 48
J. Thomas Touchton 1,442 48
Arthur Zeikel 1,442 48
<CAPTION>
Shares Voted Shares Voted Shares Voted
For Against Abstain
<S> <C> <C> <C>
2. To ratify the selection of Ernst & Young LLP as the Fund's independent
auditors for the current fiscal year. 1,400 31 59
</TABLE>
<TABLE>
<CAPTION>
MuniVest New Jersey Fund, Inc. October 31, 1997
SCHEDULE OF INVESTMENTS (in Thousands)
S&P Moody's Face Value
STATE Ratings Ratings Amount Issue (Note 1a)
<S> <C> <C> <C> <C>
New Jersey -- 98.7% AAA Aaa $2,500 Atlantic City, New Jersey, Board of Education, Revenue
Bonds, UT, 6.125% due 12/01/2002 (d)(f) $2,753
AA NR* 1,000 Bernards Township, New Jersey, School District Refunding
Bonds, UT, 5.30% due 1/01/2019 1,002
AAA Aaa 2,500 Camden County, New Jersey, Improvement Authority, Lease
Revenue Bonds (County Guaranteed), 6.15% due 10/01/2014 (b) 2,691
AAA Aaa 1,815 Cape May County, New Jersey, Industrial Pollution Control
Financing Authority Revenue Bonds (Atlantic City Electric
Company Project), AMT, Series A, 7.20% due 11/01/2029 (b) 2,071
AAA Aaa 1,300 Highland Park, New Jersey, School District, GO, UT, 6.55% due
2/15/2005 (b)(f) 1,486
AA A3 3,200 Jersey City, New Jersey, School GO, UT, 6.65% due 2/15/2002
(f) 3,545
AAA Aaa 1,600 Middlesex County, New Jersey, COP, 6.125% due 2/15/2019 (b) 1,704
AAA Aaa 6,690 New Jersey Casino Reinvestment Development Authority, Parking
Fee Revenue Bonds, Series A, 5.25% due 10/01/2016 (e) 6,674
AAA Aaa 2,400 New Jersey EDA, Educational Testing Services Revenue Bonds,
Series B, 6.25% due 5/15/2025 (b) 2,624
New Jersey EDA, Natural Gas Facilities Revenue Refunding Bonds,
Series A (d):
AAA Aaa 3,900 (NUI Corp.), 6.35% due 10/01/2022 4,291
A1+ VMIG1+ 1,000 (New Jersey Natural Gas Co.), VRDN, 3.65% due 8/01/2030 (a) 1,000
New Jersey EDA, Revenue Bonds:
NR* Aa1 800 (400 International Drive Partners), VRDN, 3.45% due 9/01/2005
(a) 800
BBB- Baa2 1,900 (American Airlines Inc. Project), AMT, 7.10% due 11/01/2031 2,078
NR* A1 1,500 Refunding (Burlington Coat Factory), 6.125% due 9/01/2010 1,616
NR* Aaa 5,810 (Saint Barnabas Project), 5.625%** due 7/01/2022 (b) 1,557
NR* Aa1 4,500 New Jersey EDA, Solid Waste Disposal Facilities Revenue Bonds
(Garden State Paper Company), AMT, 7.125% due 4/01/2022 4,927
New Jersey EDA, Water Facilities Revenue Bonds, AMT:
AAA Aaa 2,000 (American Water Company Inc. Project), 6% due 5/01/2036 (c) 2,095
A1+ Aaa 1,600 Refunding (United Water of New Jersey, Inc. Project), VRDN,
Series A, 3.55% due 11/01/2026 (a)(d) 1,600
New Jersey Health Care Facilities Financing Authority Revenue
Bonds:
AAA Aaa 2,500 Refunding (Hackensack Medical Center), 6.625% due 7/01/2017 (c) 2,708
BBB+ NR* 3,000 Refunding (Holy Name Hospital), 6% due 7/01/2025 3,085
AAA Aaa 5,000 Refunding (Jersey Shore Medical Center), 6.75% due 7/01/2019
(d) 5,599
AAA Aaa 1,000 Refunding (Monmouth Medical Center), Series C, 6.25% due
7/01/2024 (e) 1,085
BBB Baa2 2,075 Refunding (Saint Elizabeth Hospital Obligation Group), 6% due
7/01/2027 2,135
NR* Baa1 4,200 (Southern Ocean County Hospital), Series A, 6.25% due 7/01/2023 4,369
AAA Aaa 2,000 New Jersey Sports and Exposition Authority, Luxury Tax Revenue
Refunding Bonds (Convention Center), Series A, 6.60% due
7/01/2015 (b) 2,206
A+ Aa 2,000 New Jersey Sports and Exposition Authority, State Contract
Revenue Bonds, Series A, 6% due 3/01/2021 2,094
AAA Aaa 2,000 New Jersey State Educational Facilities Authority Revenue Bonds
(Higher Education -- Princeton), Series C, 6.375% due 7/01/2022 2,199
AA+ Aa1 1,970 New Jersey State, GO, AMT, 7.05% due 7/15/2014 2,272
New Jersey State Housing and Mortgage Finance Agency, Home
Buyer Revenue Bonds, AMT (b):
AAA Aaa 2,895 Series M, 7% due 10/01/2026 3,135
AAA Aaa 2,000 Series U, 5.60% due 10/01/2012 2,042
AAA Aaa 5,150 New Jersey State Transportation Corporation, COP (Raymond Plaza
East, Incorporated), 6.50% due 10/01/2016 (e) 5,720
AAA Aaa 3,250 New Jersey State Transportation Trust Fund Authority, Refunding
(Transportation System), Series A, 5% due 6/15/2015 (b) 3,172
AAA VMIG1+ 1,700 New Jersey State Turnpike Authority, Turnpike Revenue Refunding
Bonds, VRDN, Series D, 3.25% due 1/01/2018 (a)(c) 1,700
New Jersey Wastewater Treatment Trust Loan Revenue Bonds:
AA NR* 2,250 6.875% due 6/15/2000 (f) 2,443
AA- Aa 1,865 Series A, 6.50% due 4/01/2014 2,070
AAA Aaa 2,000 North Hudson, New Jersey, Sewer Authority Revenue Bonds, 5.125%
due 8/01/2022 (c) 1,965
AAA Aaa 5,000 Passaic Valley, New Jersey, Sewer Commissioner's Refunding
Bonds (Sewer System), Series D, 5.875% due 12/01/2022 (d) 5,198
Port Authority of New York and New Jersey, Consolidated Revenue
Bonds:
AA- A1 5,000 72nd Series, 7.35% due 10/01/2002 (f) 5,719
AA- A1 1,500 76th Series, AMT, 6.50% due 11/01/2026 1,609
AA- A1 1,000 93rd Series, 6.125% due 6/01/2094 1,112
AAA Aaa 2,500 Port Authority of New York and New Jersey, Special Obligation
Revenue Bonds (JFK International Air Terminal Project), AMT,
Series 6, 3rd Installment, 5.75% due 12/01/2022 (b) 2,575
AAA Aaa 1,115 South Brunswick Township, New Jersey, Board of Education, GO,
UT, 6.40% due 8/01/2005 (c)(f) 1,255
A1+ P1 100 Union County, New Jersey, Industrial Pollution Control
Financing Authority, PCR, Refunding (Exxon Project), VRDN,
3.45% due 7/01/2033 (a) 100
AA- A3 1,750 University of Medicine and Dentistry, New Jersey, Series E,
6.50% due 12/01/2001(f) 1,928
---------
Total Investments (Cost -- $106,794) -- 98.7% 114,009
Other Assets Less Liabilities -- 1.3% 1,479
---------
Net Assets -- 100.0% $115,488
=========
(a) The interest rate is subject to change periodically based upon prevailing market rates. The interest rate
shown is the rate in effect at October 31, 1997.
(b) MBIA Insured.
(c) FGIC Insured.
(d) AMBAC Insured.
(e) FSA Insured.
(f) Prerefunded.
* Not Rated.
** Represents a zero coupon bond; the interest rate shown is the effective yield at the time of purchase by
the Fund.
+ Highest short-term rating by Moody's Investors Service, Inc.
Ratings of issues shown have not been audited by Ernst & Young LLP.
Portfolio
Abbreviations
To simplify the listings of MuniVest New Jersey Fund, Inc.'s portfolio
holdings in the Schedule of Investments, we have abbreviated the names
of the securities according to the list at right.
AMT Alternative Minimum Tax (subject to)
COP Certificates of Participation
GO General Obligation Bonds
EDA Economic Development Authority
PCR Pollution Control Revenue Bonds
UT Unlimited Tax
VRDN Variable Rate Demand Notes
See Notes to Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF ASSETS, LIABILITIES AND CAPITAL
As of October 31, 1997
<S> <C> <C> <C>
Assets: Investments, at value (identified cost -- $106,793,689) (Note 1a) $114,009,164
Cash 5,773
Interest receivable 1,705,400
Deferred organization expenses (Note 1e) 2,715
Prepaid expenses and other assets 7,504
-------------
Total assets 115,730,556
-------------
Liabilities: Payables:
Dividends to shareholders (Note 1f) $113,958
Investment adviser (Note 2) 52,097 166,055
-------------
Accrued expenses 76,925
-------------
Total liabilities 242,980
-------------
Net Assets: Net assets $115,487,576
=============
Capital: Capital Stock (200,000,000 shares authorized) (Note 4):
Preferred Stock, par value $.05 per share (1,500 shares of AMPS* issued
and outstanding at $25,000 per share liquidation preference) $37,500,000
Common Stock, par value $.10 per share (5,497,953 shares issued and
outstanding) $549,795
Paid-in capital in excess of par 76,520,088
Undistributed investment income -- net 451,760
Accumulated realized capital losses on investments -- net (Note 5) (6,749,542)
Unrealized appreciation on investments -- net 7,215,475
-------------
Total -- Equivalent to $14.18 net asset value per share of Common Stock
(market price -- $13.25) 77,987,576
-------------
Total capital $115,487,576
=============
* Auction Market Preferred Stock.
See Notes to Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
For the Year Ended October 31, 1997
<S> <C> <C> <C>
Investment Interest and amortization of premium and discount earned $6,474,772
Income (Note 1d):
Expenses: Investment advisory fees (Note 2) $573,363
Commission fees (Note 4) 95,145
Professional fees 81,811
Accounting services (Note 2) 67,134
Transfer agent fees 34,622
Printing and shareholder reports 28,568
Directors' fees and expenses 22,725
Listing fees 16,663
Custodian fees 9,296
Pricing fees 5,808
Amortization of organization expenses (Note 1e) 5,490
Other 15,013
---------
Total expenses 955,638
-----------
Investment income -- net 5,519,134
-----------
Realized & Realized gain on investments -- net 36,113
Unrealized Gain on Change in unrealized appreciation on investments -- net 2,137,716
Investments -- Net -----------
(Notes 1b, 1d & 3): Net Increase in Net Assets Resulting from Operations $7,692,963
===========
</TABLE>
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
For the Year Ended October 31,
Increase (Decrease) in Net Assets: 1997 1996
<S> <C> <C> <C>
Operations: Investment income -- net $5,519,134 $5,528,759
Realized gain on investments -- net 36,113 16,362
Change in unrealized appreciation on investments -- net 2,137,716 88,326
------------- -------------
Net increase in net assets resulting from operations 7,692,963 5,633,447
------------- -------------
Dividends to Investment income -- net:
Shareholders Common Stock (4,272,415) (4,288,887)
(Note 1f): Preferred Stock (1,207,695) (1,227,030)
------------- -------------
Net decrease in net assets resulting from dividends to shareholders (5,480,110) (5,515,917)
------------- -------------
Net Assets: Total increase in net assets 2,212,853 117,530
Beginning of year 113,274,723 113,157,193
------------- -------------
End of year* $115,487,576 $113,274,723
============= =============
* Undistributed investment income -- net $451,760 $412,736
============= =============
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
For the Period
The following per share data and ratios have been derived April 30,
from information provided in the financial statements. For the Year Ended 1993+ to
October 31, Oct. 31,
1997 1996 1995 1994 1993
Increase (Decrease) in Net Asset Value:
<S> <C> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $13.78 $13.76 $12.18 $14.89 $14.18
Operating --------- --------- --------- --------- ---------
Performance: Investment income -- net 1.00 1.01 1.02 1.00 .49
Realized and unrealized gain (loss) on
investments -- net .40 .01 1.58 (2.66) .81
--------- --------- --------- --------- ---------
Total from investment operations 1.40 1.02 2.60 (1.66) 1.30
--------- --------- --------- --------- ---------
Less dividends and distributions to Common
Stock shareholders:
Investment income -- net (.78) (.78) (.76) (.81) (.35)
Realized gain on investments -- net -- -- -- (.04) --
--------- --------- --------- --------- ---------
Total dividends and distributions to Common
Stock shareholders (.78) (.78) (.76) (.85) (.35)
--------- --------- --------- --------- ---------
Capital charge resulting from issuance of
Common Stock -- -- -- -- (.04)
--------- --------- --------- --------- ---------
Effect of Preferred Stock activity: ++
Dividends and distributions to Preferred Stock
shareholders:
Investment income -- net (.22) (.22) (.26) (.19) (.07)
Realized gain on investments -- net -- -- -- (.01) --
Capital charge resulting from issuance of
Preferred Stock -- -- -- -- (.13)
--------- --------- --------- --------- ---------
Total effect of Preferred Stock activity (.22) (.22) (.26) (.20) (.20)
--------- --------- --------- --------- ---------
Net asset value, end of period $14.18 $13.78 $13.76 $12.18 $14.89
========= ========= ========= ========= =========
Market price per share, end of period $13.25 $12.25 $12.00 $10.125 $15.00
========= ========= ========= ========= =========
Total Investment Based on market price per share 14.78% 8.67% 26.66% (27.74%) 2.38%++++
Return:** ========= ========= ========= ========= =========
Based on net asset value per share 9.19% 6.61% 20.74% (12.43%) 7.50%++++
========= ========= ========= ========= =========
Ratios to Average Expenses, net of reimbursement .83% .81% .84% .79% .48%*
Net Assets:*** ========= ========= ========= ========= =========
Expenses .83% .81% .84% .82% .84%*
========= ========= ========= ========= =========
Investment income -- net 4.82% 4.87% 5.20% 4.89% 4.85%*
========= ========= ========= ========= =========
Supplemental Net assets, net of Preferred Stock, end of
Data: period (in thousands) $77,988 $75,775 $75,657 $66,978 $81,637
========= ========= ========= ========= =========
Preferred Stock outstanding, end of period
(in thousands) $37,500 $37,500 $37,500 $37,500 $37,500
========= ========= ========= ========= =========
Portfolio turnover 39.77% 99.56% 62.45% 68.75% 20.15%
========= ========= ========= ========= =========
Leverage: Asset coverage per $1,000 $3,080 $3,021 $3,018 $2,786 $3,177
========= ========= ========= ========= =========
Dividends Per Share Investment income -- net $805 $818 $955 $696 $240
On Preferred Stock ========= ========= ========= ========= =========
Outstanding:+++
* Annualized.
** Total investment returns based on market value, which can be significantly
greater or lesser than the net asset value, may result in substantially
different returns. Total investment returns exclude the effects of sales loads.
*** Do not reflect the effect of dividends to Preferred 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.
See Notes to Financial Statements.
</TABLE>
MuniVest New Jersey Fund, Inc., October 31, 1997
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
MuniVest New Jersey Fund, Inc. (the "Fund") is registered under the
Investment Company Act of 1940 as a non-diversified, closed-end
management investment company. The Fund's Common Stock is listed on
the New York Stock Exchange under the symbol MVJ. The following is a
summary of significant accounting policies followed by the Fund.
(a) Valuation of investments -- Municipal bonds are traded primarily
in the over-the-counter markets and are valued at the most recent
bid price or yield equivalent as obtained by the Fund's pricing
service from dealers that make markets in such securities. Financial
futures contracts and options thereon, which are traded on exchanges,
are valued at their closing prices as of the close of such exchanges.
Options, which are traded on exchanges, are valued at their last sale
price as of the close of such exchanges or, lacking any sales, at the
last available bid price. Securities with remaining maturities of
sixty days or less are valued at amortized cost, which approximates
market value. Securities and assets for which market quotations are
not readily available are valued at fair value as determined in good
faith by or under the direction of the Board of Directors of the Fund,
including valuations furnished by a pricing service retained by the
Fund, which may utilize a matrix system for valuations. The procedures
of the pricing service and its valuations are reviewed by the officers
of the Fund under the general supervision of the Board of Directors.
(b) Derivative financial instruments -- The Fund may engage in various
portfolio strategies to seek to increase its return by hedging its
portfolio against adverse movements in the debt markets. Losses may
arise due to changes in the value of the contract or if the
counterparty does not perform under the contract.
[bullet] Financial futures contracts -- The Fund may purchase or sell
interest rate futures contracts and options on such futures contracts
for the purpose of hedging the market risk on existing securities or
the intended purchase of securities. Futures contracts are contracts
for delayed delivery of securities at a specific future date and at a
specific price or yield. Upon entering into a contract, the Fund
deposits and maintains as collateral such initial margin as required
by the exchange on which the transaction is effected. Pursuant to the
contract, the Fund agrees to receive from or pay to the broker an
amount of cash equal to the daily fluctuation in value of the
contract. Such receipts or payments are known as variation margin and
are recorded by the Fund as unrealized gains or losses. When the
contract is closed, the Fund records a realized gain or loss equal to
the difference between the value of the contract at the time it was
opened and the value at the time it was closed.
[bullet] Options -- The Fund is authorized to write covered call
options and purchase put options. When the Fund writes an option, an
amount equal to the premium received by the Fund is reflected as an
asset and an equivalent liability. The amount of the liability is
subsequently marked to market to reflect the current market value of
the option written. When a security is purchased or sold through
an exercise of an option, the related premium paid (or received)
is added to (or deducted from) the basis of the security acquired
or deducted from (or added to) the proceeds of the security sold. When
an option expires (or the Fund enters into a closing transaction), the
Fund realizes a gain or loss on the option to the extent of the
premiums received or paid (or gain or loss to the extent the cost of
the closing transaction exceeds the premium paid or received).
Written and purchased options are non-income producing investments.
(c) Income taxes -- It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute substantially all of its
taxable income to its shareholders. Therefore, no Federal income tax
provision is required.
(d) Security transactions and investment income -- Security
transactions are recorded on the dates the transactions are entered
into (the trade dates). Interest income is recognized on the accrual
basis. Discounts and market premiums are amortized into interest
income. Realized gains and losses on security transactions are
determined on the identified cost basis.
(e) Deferred organization expenses -- Deferred organization expenses
are amortized on a straight-line basis over a five-year period.
(f) Dividends and distributions -- Dividends from net investment
income are declared and paid monthly. Distributions of capital gains
are recorded on the ex-dividend dates.
2. Investment Advisory Agreement and Transactions with Affiliates:
The Fund has entered into an Investment Advisory Agreement with Fund
Asset Management, L.P. ("FAM"). The general partner of FAM is
Princeton Services, Inc. ("PSI"), an indirect wholly-owned subsidiary
of Merrill Lynch & Co., Inc. ("ML & Co."), which is the limited
partner.
FAM is responsible for the management of the Fund's portfolio and
provides the necessary personnel, facilities, equipment and certain
other services necessary to the operations of the Fund. For such
services, the Fund pays a monthly fee at an annual rate of 0.50% of
the Fund's average weekly net assets.
Accounting services are provided to the Fund by FAM at cost.
Certain officers and/or 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 year ended October 31, 1997 were $43,283,938 and $46,038,530,
respectively.
Net realized and unrealized gains (losses) as of October 31, 1997 were
as follows:
Realized Unrealized
Gains(Losses) Gains
Long-term investments $716,600 $7,215,475
Financial futures contracts (680,487) --
---------- ----------
Total $36,113 $7,215,475
========== ==========
As of October 31, 1997, net unrealized appreciation for Federal income
tax purposes aggregated $7,215,475, all of which related to
appreciated securities. The aggregate cost of investments at October
31, 1997 for Federal income tax purposes was $106,793,689.
4. Capital Stock Transactions:
The Fund is authorized to issue 200,000,000 shares of capital stock,
including Preferred Stock, par value $.10 per share, all of which
were initially classified as Common Stock. The Board of Directors is
authorized, however, to reclassify any unissued shares of capital
stock without approval of holders of Common Stock.
Common Stock
Shares issued and outstanding during the years ended October 31, 1997
and October 31, 1996 remained constant.
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 October 31, 1997 was 3.58%.
As of October 31, 1997, there were 1,500 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 year ended October 31, 1997,
Merrill Lynch, Pierce, Fenner & Smith Inc., an affiliate of FAM,
earned $76,077 as commissions.
5. Capital Loss Carryforward:
At October 31, 1997, the Fund had a net capital loss carryforward of
approximately $5,283,000, of which $2,953,000 expires in 2002 and
$2,330,000 expires in 2003. This amount will be available to offset
like amounts of any future taxable gains.
6. Subsequent Event:
On November 6, 1997, the Fund's Board of Directors declared an
ordinary income dividend to Common Stock shareholders in the amount of
$.065804 per share, payable on November 26, 1997 to shareholders of
record as of November 17, 1997.
REPORT OF INDEPENDENT AUDITORS
To the Shareholders and Board of Directors,
MuniVest New Jersey Fund, Inc.
We have audited the accompanying statement of assets, liabilities and
capital of MuniVest New Jersey Fund, Inc., including the schedule of
investments, as of October 31, 1997, and the related statement of
operations for the year then ended, the statements of changes in net
assets for each of the two years in the period then ended and
financial highlights for each of the periods indicated therein. These
financial statements and financial highlights are the responsibility
of the Fund's management. Our responsibility is to express an opinion
on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements and financial highlights.
Our procedures included confirmation of securities owned as of October
31, 1997 by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the
financial position of MuniVest New Jersey Fund, Inc. at October 31,
1997, the results of its operations for the year then ended, the
changes in its net assets for each of the two years in the period then
ended and financial highlights for each of the indicated periods, in
conformity with generally accepted accounting principles.
/S/Ernst & Young LLP
Princeton, New Jersey
December 1, 1997
