MUNIVEST
NEW JERSEY
FUND, INC.
Annual Report
October 31, 1998
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
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.
As a part of its investment strategy, the Fund may invest in certain
securities whose potential income return is inversely related to
changes in a floating interest rate ("inverse floaters"). In
general, interest rates on inverse floaters will decrease when short-
term interest rates increase and increase when short-term interest
rates decrease. Investments in inverse floaters may be characterized
as derivative securities and may subject the Fund to the risks of
reduced or eliminated interest payments and losses of invested
principal. In addition, inverse floaters have the effect of
providing investment leverage and, as a result, the market value of
such securities will generally be more volatile than that of fixed-
rate, tax-exempt securities. To the extent the Fund invests in
inverse floaters, the market value of the Fund's portfolio and the
net asset value of the Fund's shares may also be more volatile than
if the Fund did not invest in such securities.
MuniVest New Jersey Fund, Inc., October 31, 1998
DEAR SHAREHOLDER
For the year ended October 31, 1998, the Common Stock of MuniVest
New Jersey Fund, Inc. earned $0.771 per share income dividends,
which included earned and unpaid dividends of $0.066. This
represents a net annualized yield of 5.24%, based on a month-end per
share net asset value of $14.72. Over the same period, the total
investment return on the Fund's Common Stock was +9.63%, based on a
change in per share net asset value from $14.18 to $14.72, and
assuming reinvestment of $0.771 per share income dividends.
For the six-month period ended October 31, 1998, the total
investment return on the Fund's Common Stock was +6.56%, based on a
change in per share net asset value from $14.19 to $14.72, and
assuming reinvestment of $0.383 per share income dividends.
For the six-month period ended October 31, 1998, the Fund's Auction
Market Preferred Stock had an average yield of 3.40%.
The Municipal Market Environment
During the six months ended October 31, 1998, long-term bond yields
declined significantly. The near absence of any inflationary
pressures in the United States continued to support historic low
interest rates. Additionally, foreign economic factors have
continued to outweigh US domestic fundamentals, as they have for
much of 1998. The economic crisis that began in Asia over a year ago
has spread both to Russia and South America. However, economic
factors in these countries have begun to negatively impact US
growth. For example, employment in the US manufacturing sector
declined in recent months as a result of reduced demand for export
goods. Concern that the modest decline in US economic growth seen
thus far would spread and intensify led the Federal Reserve Board to
lower short-term interest rates in late September, in mid-October
and in mid-November. These actions were taken to offset the drag of
foreign economies on future US growth.
US Treasury bond yields continued to benefit from a strong "flight
to quality" as foreign investors were drawn to the relative safe
haven of US Government securities. Additionally, the sharp equity
market correction, which began at the end of August, triggered a
further flight into US Treasury securities. Long-term US Treasury
bond yields fell over 90 basis points (0.90%) to approximately 5% by
the end of September. This is the lowest level since the US Treasury
reintroduced 30-year maturity bond auctions in 1977.
By early October, worldwide investor confidence began to rise,
reducing the demand for the safety and liquidity of US Treasury
securities. Investor confidence was restored by the belief that
major world governments, as well as the International Monetary Fund,
would take the necessary action to support weak domestic economies
in Asia and Latin America. Additionally, rapid recovery in US and
world equity markets caused some investors to reallocate funds from
US debt instruments back to various world equity markets. US
Treasury securities yields rose for the remainder of the month to
end October at 5.15%. During the six-month period ended October 31,
1998, long-term Treasury security yields declined approximately 80
basis points.
During the past 12 months, the tax-exempt bond market has contended
with significant new-issue supply pressures. Over the past year,
more than $277 billion in new long-term tax-exempt bonds were
underwritten, an increase of almost 30% compared to the same period
a year ago. During the most recent six-month period, approximately
$140 billion in new long-term municipal bonds were underwritten,
representing an increase of more than 15% over the same six-month
period last year. This increased supply, coupled with the high
returns the US equity market generated for much of 1998, was one of
the major reasons municipal bond yields declined less than their
taxable counterparts during the period.
The continued increase in new bond issuance has required ever-lower
tax-exempt bond yields to generate the economic savings necessary
for additional municipal bond financings. Consequently, the pace of
new bond issuance has slowed in recent months. In fact, the trend
may be reversing. During the three months ended October 31, 1998,
just over $60 billion in new long-term municipal bonds were
underwritten, a decline of 4% compared to the same quarter a year
ago. During the month of October, there were less than $20 billion
in new municipal bond securities issued, a decline of over 10%
compared to October 1997. We will monitor this trend closely in the
coming months to determine if the supply pressures exerted thus far
in 1998 are abating and fostering a more balanced supply/demand
environment.
Throughout the six-month period ended October 31, 1998, municipal
bond yields followed a pattern that was similar to US Treasury
securities, although the yield declines were more muted. As measured
by the unmanaged Bond Buyer Revenue Bond Index, long-term, uninsured
tax-exempt revenue bond yields declined over 40 basis points to
5.09% by the end of September, their lowest level since the early
1970s. Municipal bond yields rose during October to end the period
at 5.24%. Over the past six months, long-term tax-exempt bond yields
declined almost 30 basis points.
Although municipal bond yields declined during the six-month period,
recent supply pressures and the absence of the safe haven status
enjoyed by US securities caused municipal bond yields to rise
relative to US Treasury bond yields. At October 31, 1998, long-term
tax-exempt bond yield spreads were attractive relative to US
Treasury securities of comparable maturities (over 100%), well in
excess of their historic range of 85%--88%. Tax-exempt bond yield
ratios have rarely exceeded 90% in the 1980s and 1990s.
Historically, yield spreads have been wider than these levels when
there have been potential changes in Federal tax codes that would
have adversely affected the tax-favored status of municipal bonds.
Currently, municipal bond investors find themselves in a unique
investment environment. Previous opportunities to purchase tax-
exempt bonds with yields exceeding that of comparable US Treasury
issues have been limited to relatively brief episodes and then
further limited to a few municipal credits undergoing specific
financial pressures. At present, almost the entire municipal bond
universe, across nearly all maturity and credit sectors, can be
purchased at yields greater than their taxable counterparts.
However, the current opportunity may quickly disappear should tax-
exempt bond supply pressures diminish or the safe-haven status of US
Treasury securities become less desirable. Under these conditions,
municipal bond ratios should quickly revert to more normal historic
percentages, certainly well below their presently attractive levels.
Portfolio Strategy
As a result of our efforts to move from a neutral to a more
constructive market strategy, the Fund generated a competitive
return for the six months ended October 31, 1998. The shift in our
outlook evolved early in the period as the prospect of escalating
global economic and financial market turmoil set the stage for
sharply lower interest rates.
Much of the activity reflecting this shift centered around a
reduction in the Fund's exposure to bonds possessing minimal call
protection. Most of these securities were issued in a higher-
interest rate environment and, consequently, we sold them at
substantial premiums to face value. We invested the proceeds from
these sales in high-quality issues that are well protected from
early redemption and are likely to perform well as interest rates
decline. Through these restructuring efforts, the Fund is better
positioned to withstand the likely onslaught of municipal bond
redemptions as issuers reap the benefits of refinancing outstanding
debt. We believe that this active approach to managing the Fund's
average call protection is likely to provide a more stable dividend
over time.
However, throughout the past six months, the technical constraints
of the New Jersey municipal market hampered our ability to carry out
our restructuring strategy in a timely manner. While new-issue
volume across the country rose more than 15% during the period as
compared to levels for the same six-month period a year ago, there
was a 25% decline in a similar measure of New Jersey issuance.
Furthermore, investor demand accelerated, thereby increasing
competition for an already shrinking supply of bonds.
Leverage continues to benefit the Fund's Common Stock shareholders,
as the Fund's cost of borrowing, as reflected by short-term tax-
exempt interest rates, remains well below the yields available on
long-term municipal bonds. In fact, borrowing costs actually
declined with the general move toward lower short-term interest
rates brought on by the recent shift toward easier monetary policy.
However, should the spread between short-term and long-term interest
rates narrow, the benefits of leverage will decline, and as a result
reduce the yield to the Fund's Common Stock. (For a complete
explanation of the benefits and risks of leveraging, see page 1 of
this report to shareholders.)
In Conclusion
We appreciate your 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,
(Arthur Zeikel)
Arthur Zeikel
President
(Vincent R. Giordano)
Vincent R. Giordano
Senior Vice President
(Theodore R. Jaeckel Jr.)
Theodore R. Jaeckel Jr.
Vice President and Portfolio Manager
December 2, 1998
MuniVest New Jersey Fund, Inc., October 31, 1998
PROXY RESULTS
During the six-month period ended October 31, 1998, MuniVest New
Jersey Fund, Inc. Common Stock shareholders voted on the following
proposals. The proposals were approved at a shareholders' meeting on
September 14, 1998. The description of each proposal and number of
shares voted are as follows:
<TABLE>
<CAPTION>
Shares Voted Shares Withheld
For From Voting
<S> <S> <C> <C>
1.To elect the Fund's Board of Directors: Edward H. Meyer 5,311,163 83,709
Jack B. Sunderland 5,311,163 83,709
J. Thomas Touchton 5,311,163 83,709
Fred G. Weiss 5,311,163 83,709
Arthur Zeikel 5,311,163 83,709
<CAPTION>
Shares Voted Shares Voted Shares Voted
For Against Abstain
<S> <C> <C> <C>
2.To select Ernst & Young LLP as the Fund's independent auditors. 5,282,767 76,228 39,537
</TABLE>
During the six-month period ended October 31, 1998, MuniVest New
Jersey Fund, Inc. Preferred Stock shareholders voted on the
following proposals. The proposals were approved at a shareholders'
meeting on September 14, 1998. The description of each proposal and
number of shares voted are as follows:
<TABLE>
<CAPTION>
Shares Voted Shares Withheld
For From Voting
<S> <S> <C> <C>
1.To elect the Fund's Board of Directors: Donald Cecil 1,259 49
M. Colyer Crum 1,259 49
Edward H. Meyer 1,259 49
Jack B. Sunderland 1,259 49
J. Thomas Touchton 1,259 49
Fred G. Weiss 1,259 49
Arthur Zeikel 1,259 49
<CAPTION>
Shares Voted Shares Voted Shares Voted
For Against Abstain
<S> <C> <C> <C>
2.To select Ernst & Young LLP as the Fund's independent auditors. 1,308 0 0
</TABLE>
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
RIB Residual Interests Bonds
RITR Residual Interest Trust Receipts
UT Unlimited Tax
VRDN Variable Rate Demand Notes
MuniVest New Jersey Fund, Inc., October 31, 1998
<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>
New Jersey--99.4% AAA Aaa $ 2,500 Camden County, New Jersey, Improvement Authority, Lease Revenue
Bonds (County Guaranteed), 6.15% due 10/01/2004 (d)(f) $ 2,834
AAA Aaa 1,000 Camden County, New Jersey, Municipal Utilities Authority,
Sewer Revenue Refunding Bonds, 5.20% due 7/15/2015 (b) 1,035
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 (d) 2,103
AAA Aaa 1,425 East Orange, New Jersey, Board of Education (AGH Leasing
Inc.), COP, 5.32%** due 8/01/2017 (c) 566
NR* Aaa 2,875 Hudson County, New Jersey, Improvement Authority, Facility
Lease Revenue Bonds, Residual Certificates, RIB, Series 34,
7.285% due 10/01/2024 (b)(e) 3,103
AA Aa3 3,200 Jersey City, New Jersey, School GO, UT, 6.65% due 2/15/2002 (f) 3,547
AAA Aaa 835 Metuchen, New Jersey, School District, GO, UT, 5.15% due
9/15/2019 (b) 847
AAA Aaa 1,600 Middlesex County, New Jersey, COP, 6.125% due 2/15/2004 (d)(f) 1,782
AAA Aaa 1,690 New Jersey Casino Reinvestment Development Authority,
Parking Fee Revenue Bonds, Series A, 5.25% due 10/01/2016 1,738
New Jersey EDA, First Mortgage Revenue Bonds:
NR* NR* 1,250 (Franciscan Oaks Project), 5.70% due 10/01/2017 1,253
NR* NR* 1,250 (Franciscan Oaks Project), 5.75% due 10/01/2023 1,253
BBB- NR* 2,000 Refunding (Fellowship Village), Series A, 5.50% due
1/01/2025 2,011
New Jersey EDA, Natural Gas Revenue Refunding Bonds (NUI
Corporation), Series A:
AAA Aaa 3,900 6.35% due 10/01/2022 (a) 4,385
AAA Aaa 1,000 AMT, 5.70% due 6/01/2032 (d) 1,058
New Jersey EDA, Revenue Bonds:
AAA Aaa 2,400 (Educational Testing Service), Series B, 6.25% due
5/15/2025 2,695
NR* Aa3 1,500 Refunding (Burlington Coat Factory), 6.125% due 9/01/2010 1,673
AAA Aaa 1,000 Refunding (Educational Testing Service), Series A,
4.75% due 5/15/2018 (d) 980
BBB- NR* 1,000 Refunding (United Methodist Homes), 5.125% due 7/01/2018 (d) 978
NR* Aaa 7,385 (Saint Barnabas), Series A, 5.625%** due 7/01/2022 (d) 2,267
NR* Aa1 4,500 New Jersey EDA, Solid Waste Disposal Facilities Revenue
Bonds (Garden State Paper Company), AMT, 7.125% due 4/01/2022 4,970
BB- Ba2 3,630 New Jersey EDA, Special Facility Revenue Bonds (Continental
Airlines Inc. Project), AMT, 5.50% due 4/01/2028 3,573
New Jersey EDA, Water Facilities Revenue Bonds, AMT:
AAA Aaa 2,000 (American Water Company Inc. Project), 6% due 5/01/2036 (b) 2,184
AAA Aaa 2,855 RITR, Series 34, 6.92% due 5/01/2032 (b)(e) 3,015
AAA Aaa 1,500 RITR, Series 35, 6.87% due 2/01/2038 (d)(e) 1,576
A1+ VMIG1++ 1,900 New Jersey EDA, Water Facilities Revenue Refunding Bonds
(United Water New Jersey Inc. Project), VRDN, Series A,
3.65% due 11/01/2026 (a)(g) 1,900
New Jersey Health Care Facilities Financing Authority
Revenue Bonds:
A- Baa1 3,135 Refunding (Capital Health System Obligation Group), 5.25%
due 7/01/2027 3,089
AAA Aaa 2,500 Refunding (Hackensack Medical Center), 6.625% due
7/01/2001 (b)(f) 2,735
BBB+ NR* 3,000 Refunding (Holy Name Hospital), 6% due 7/01/2025 3,165
AAA Aaa 5,000 Refunding (Jersey Shore Medical Center), 6.75% due
7/01/2019 (a) 5,689
AAA Aaa 1,000 Refunding (Monmouth Medical Center), Series C, 6.25%
due 7/01/2024 (c) 1,113
BBB Baa2 2,075 Refunding (Saint Elizabeth Hospital Obligation Group),
6% due 7/01/2027 2,200
NR* Baa1 4,200 (Southern Ocean County Hospital), Series A, 6.25% due
7/01/2023 4,466
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 (d) 2,210
A+ Aa2 2,000 New Jersey Sports and Exposition Authority, Revenue
Refunding Bonds (State Contract), Series A, 6% due 3/01/2021 2,113
New Jersey State Educational Facilities Authority
Revenue Bonds:
AAA Aaa 1,500 (Higher Education--Princeton University), Series C,
6.375% due 7/01/2002 (f) 1,664
AA+ Aaa 1,000 (Institute for Advanced Study), Series G, 5% due
7/01/2028 997
BBB Baa3 1,000 Refunding (Saint Peter's College), 5.375% due 7/01/2018 1,016
AA+ Aaa 1,000 New Jersey State Educational Facilities Authority, Revenue
Refunding Bonds (Institute for Advanced Study), Series F,
5% due 7/01/2018 1,005
AA+ Aa1 1,970 New Jersey State, GO, UT, AMT, 7.05% due 7/15/2014 2,312
NR* Aaa 2,675 New Jersey State Higher Education Assistance Authority,
Student Loan Revenue Bonds, RIB, Series 18, 6.935% due
6/01/2017 (e) 2,721
AAA Aaa 2,700 New Jersey State Housing and Mortgage Finance Agency,
Home Buyer Revenue Bonds, AMT, Series M, 7% due 10/01/2026 (d) 2,953
AAA Aaa 5,150 New Jersey State Transit Corporation, COP (Raymond Plaza
East, Incorporated), 6.50% due 10/01/2016 (c) 6,003
AA- Aa1 1,865 New Jersey Wastewater Treatment Trust Revenue Bonds,
Series A, 6.50% due 4/01/2004 (f) 2,127
AAA Aaa 5,000 Passaic Valley, New Jersey, Sewer Commissioner's Refunding
Bonds (Sewer System), Series D, 5.875% due 12/01/2022 (a) 5,435
Port Authority of New York and New Jersey, Consolidated
Revenue Bonds:
AA- A1 1,500 76th Series, AMT, 6.50% due 11/01/2026 1,605
AA- A1 1,000 93rd Series, 6.125% due 6/01/2094 1,173
AAA Aaa 1,000 104th Series, 3rd Installment, 4.75% due 1/15/2026 964
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 2,656
Port Authority of New York and New Jersey, Special
Obligation Revenue Refunding Bonds (Versatile Structure
Obligation), VRDN (g):
A1+ VMIG1++ 1,200 3.70% due 8/01/2024 1,200
A1+ VMIG1++ 1,100 Series 2, 3.70% due 5/01/2019 1,100
NR* P1 900 Series 4, 3.80% due 4/01/2024 900
AA- A3 1,750 University of Medicine and Dentistry, New Jersey, Revenue
Bonds, Series E, 6.50% due 12/01/2001 (f) 1,927
Total Investments (Cost--$109,905)--99.4% 117,864
Other Assets Less Liabilities--0.6% 698
--------
Net Assets--100.0% $118,562
========
<FN>
(a)AMBAC Insured.
(b)FGIC Insured.
(c)FSA 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 October 31, 1998.
(f)Prerefunded.
(g)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, 1998.
++Highest short-term rating by Moody's Investors Service, Inc.
*Not Rated.
**Represents a zero coupon bond; the interest rate shown is the
effective yield at the time of purchase by the Fund.
Ratings of issues shown have not been audited by Ernst & Young LLP.
See Notes to Financial Statements.
</TABLE>
MuniVest New Jersey Fund, Inc., October 31, 1998
<TABLE>
STATEMENT OF ASSETS, LIABILITIES AND CAPITAL
<CAPTION>
As of October 31, 1998
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$109,904,691) (Note 1a) $117,863,958
Cash 71,950
Interest receivable 1,722,984
Prepaid expenses and other assets 10,063
------------
Total assets 119,668,955
------------
Liabilities: Payables:
Securities purchased $ 983,563
Investment adviser (Note 2) 52,198 1,035,761
------------
Accrued expenses and other liabilities 71,047
------------
Total liabilities 1,106,808
------------
Net Assets: Net assets $118,562,147
============
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 (5,505,117 shares
issued and outstanding) $ 550,512
Paid-in capital in excess of par 76,624,760
Undistributed investment income--net 507,070
Accumulated realized capital losses on investments--net
(Note 5) (4,579,462)
Unrealized appreciation on investments--net 7,959,267
------------
Total--Equivalent to $14.72 net asset value per share of
Common Stock (market price--$14.875) 81,062,147
------------
Total capital $118,562,147
============
<FN>
*Auction Market Preferred Stock.
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENT OF OPERATIONS
<CAPTION>
For the Year Ended October 31, 1998
<S> <S> <C> <C>
Investment Interest and amortization of premium and discount earned $ 6,525,037
Income (Note 1d):
Expenses: Investment advisory fees (Note 2) $ 584,293
Commission fees (Note 4) 95,160
Professional fees 90,208
Accounting services (Note 2) 66,692
Directors' fees and expenses 26,147
Transfer agent fees 18,224
Listing fees 13,475
Printing and shareholder reports 11,981
Custodian fees 9,630
Pricing fees 6,431
Amortization of organization expenses (Note 1e) 2,715
Other 15,277
------------
Total expenses 940,233
------------
Investment income--net 5,584,804
------------
Realized & Realized gain on investments--net 2,170,081
Unrealized Gain on Change in unrealized appreciation on investments--net 743,792
Investments--Net ------------
(Notes 1b, Net Increase in Net Assets Resulting from Operations $ 8,498,677
1d & 3): ============
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
For the Year Ended
October 31,
Increase (Decrease) in Net Assets: 1998 1997
<S> <S> <C> <C>
Operations: Investment income--net $ 5,584,804 $ 5,519,134
Realized gain on investments--net 2,170,081 36,113
Change in unrealized appreciation on investments--net 743,792 2,137,716
------------ ------------
Net increase in net assets resulting from operations 8,498,677 7,692,963
------------ ------------
Dividends to Investment income--net:
Shareholders Common Stock (4,239,104) (4,272,415)
(Note 1f): Preferred Stock (1,290,390) (1,207,695)
------------ ------------
Net decrease in net assets resulting from dividends to
shareholders (5,529,494) (5,480,110)
------------ ------------
Capital Stock Value of shares issued to Common Stock shareholders in
Transactions reinvestment of dividends 105,388 --
(Note 4): ------------ ------------
Net Assets: Total increase in net assets 3,074,571 2,212,853
Beginning of year 115,487,576 113,274,723
------------ ------------
End of year* $118,562,147 $115,487,576
============ ============
<FN>
*Undistributed investment income--net $ 507,070 $ 451,760
============ ============
See Notes to Financial Statements.
</TABLE>
MuniVest New Jersey Fund, Inc., October 31, 1998
<TABLE>
FINANCIAL HIGHLIGHTS
<CAPTION>
The following per share data and ratios
have been derived from information provided
in the financial statements.
For the Year Ended October 31,
Increase (Decrease) in Net Asset Value: 1998 1997 1996 1995 1994
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of year $ 14.18 $ 13.78 $ 13.76 $ 12.18 $ 14.89
Operating --------- --------- --------- --------- ---------
Performance: Investment income--net 1.01 1.00 1.01 1.02 1.00
Realized and unrealized gain (loss) on
investments--net .53 .40 .01 1.58 (2.66)
--------- --------- --------- --------- ---------
Total from investment operations 1.54 1.40 1.02 2.60 (1.66)
--------- --------- --------- --------- ---------
Less dividends and distributions to Common
Stock shareholders:
Investment income--net (.77) (.78) (.78) (.76) (.81)
Realized gain on investments--net -- -- -- -- (.04)
--------- --------- --------- --------- ---------
Total dividends and distributions to
Common Stock shareholders (.77) (.78) (.78) (.76) (.85)
--------- --------- --------- --------- ---------
Effect of Preferred Stock activity:
Dividends and distributions to Preferred
Stock shareholders:
Investment income--net (.23) (.22) (.22) (.26) (.19)
Realized gain on investments--net -- -- -- -- (.01)
--------- --------- --------- --------- ---------
Total effect of Preferred Stock activity (.23) (.22) (.22) (.26) (.20)
--------- --------- --------- --------- ---------
Net asset value, end of year $ 14.72 $ 14.18 $ 13.78 $ 13.76 $ 12.18
========= ========= ========= ========= =========
Market price per share, end of year $ 14.875 $ 13.25 $ 12.25 $ 12.00 $ 10.125
========= ========= ========= ========= =========
Total Investment Based on market price per share 18.56% 14.78% 8.67% 26.66% (27.74%)
Return:* ========= ========= ========= ========= =========
Based on net asset value per share 9.63% 9.19% 6.61% 20.74% (12.43%)
========= ========= ========= ========= =========
Ratios to Average Expenses, net of reimbursement .81% .83% .81% .84% .79%
Net Assets:** ========= ========= ========= ========= =========
Expenses .81% .83% .81% .84% .82%
========= ========= ========= ========= =========
Investment income--net 4.78% 4.82% 4.87% 5.20% 4.89%
========= ========= ========= ========= =========
Supplemental Net assets, net of Preferred Stock, end
Data: of year (in thousands) $ 81,062 $ 77,988 $ 75,775 $ 75,657 $ 66,978
========= ========= ========= ========= =========
Preferred Stock outstanding, end of year
(in thousands) $ 37,500 $ 37,500 $ 37,500 $ 37,500 $ 37,500
========= ========= ========= ========= =========
Portfolio turnover 54.73% 39.77% 99.56% 62.45% 68.75%
========= ========= ========= ========= =========
Leverage: Asset coverage per $1,000 $ 3,162 $ 3,080 $ 3,021 $ 3,018 $ 2,786
========= ========= ========= ========= =========
Dividends Investment income--net $ 860 $ 805 $ 818 $ 955 $ 696
Per Share on ========= ========= ========= ========= =========
Preferred Stock
Outstanding:++
<FN>
*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.
++Dividends per share have been adjusted to reflect a two-for-one
stock split that occurred on December 1, 1994.
See Notes to Financial Statements.
</TABLE>
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 written or purchased are valued at the last
sale price in the case of exchange-traded options. In the case of
options traded in the over-the-counter market, valuation is the last
asked price (options written) or the last bid price (options
purchased). 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.
* Financial futures contracts--The Fund may purchase or sell
financial 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 period not exceeding
five years.
(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.
MuniVest New Jersey Fund, Inc., October 31, 1998
NOTES TO FINANCIAL STATEMENTS (concluded)
2. Investment Advisory Agreement and Transactions
with Affiliates:
The Fund has entered into an Investment Advisory Agreement with Fund
Asset Management, L.P. ("FAM"). The general partner of FAM is
Princeton Services, Inc. ("PSI"), an indirect wholly-owned
subsidiary of Merrill Lynch & Co., Inc. ("ML & Co."), which is the
limited partner.
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, including proceeds from the
issuance of Preferred Stock.
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, 1998 were $63,279,165 and
$62,265,934, respectively.
Net realized gains for the year ended October 31, 1998 and net
unrealized gains as of October 31, 1998 were as follows:
Realized Unrealized
Gains Gains
Long-term investments $ 2,170,081 $ 7,959,267
-------------- ------------
Total $ 2,170,081 $ 7,959,267
============== ============
As of October 31, 1998, net unrealized appreciation for Federal
income tax purposes aggregated $7,959,267, of which $7,999,457
related to appreciated securities and $40,190 related to depreciated
securities. The aggregate cost of investments at October 31, 1998
for Federal income tax purposes was $109,904,691.
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 year ended October 31, 1998
increased by 7,164 as a result of dividend reinvestment and during
the year ended October 31, 1997 remained constant.
Preferred Stock
Auction Market Preferred Stock ("AMPS") are shares of Preferred
Stock of the Fund, with a par value of $.05 per share and a
liquidation preference of $25,000 per share, 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, 1998 was 3.23%.
Shares issued and outstanding during the years ended October 31,
1998 and October 31, 1997 remained constant.
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, 1998, Merrill Lynch, Pierce, Fenner & Smith Inc., an
affiliate of FAM, earned $61,756 as commissions.
5. Capital Loss Carryforward:
At October 31, 1998, the Fund had a net capital loss carryforward of
approximately $3,113,000, of which $783,000 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 5, 1998, the Fund's Board of Directors declared an
ordinary income dividend to Common Stock shareholders in the amount
of $.066112 per share, payable on November 27, 1998 to shareholders
of record as of November 20, 1998.
<AUDIT-REPORT>
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, 1998, 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, 1998 by corresponding with the
custodian and brokers. 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,
1998, 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.
Ernst & Young LLP
Princeton, New Jersey
December 1, 1998
</AUDIT-REPORT>
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, 1998
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, 1998
MANAGED DIVIDEND POLICY (unaudited)
The Fund's dividend policy is to distribute substantially all of its
net investment income to its shareholders on a monthly basis.
However, in order to provide shareholders with a more consistent
yield to the current trading price of shares of Common Stock of the
Fund, the Fund may at times pay out less than the entire amount of
net investment income earned in any particular month and may at
times in any particular month pay out such accumulated but
undistributed income in addition to net investment income earned in
that month. As a result, the dividends paid by the Fund for any
particular month may be more or less than the amount of net
investment income earned by the Fund during such month. The Fund's
current accumulated but undistributed net investment income, if any,
is disclosed in the Statement of Assets, Liabilities and Capital,
which comprises part of the financial information included in this
report.
QUALITY PROFILE (unaudited)
The quality ratings of securities in the Fund as of October 31, 1998
were as follows:
Percent of
S&P Rating/Moody's Rating Net Assets
AAA/Aaa 57.6%
AA/Aa 18.1
A/A 2.6
BBB/Baa 11.7
BB/Ba 3.0
NR (Not Rated) 2.1
Other++ 4.3
[FN]
++Temporary investments in short-term municipal securities.
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
Fred G. Weiss, 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
