MUNIASSETS
FUND, INC.
FUND LOGO
Semi-Annual Report
November 30, 1995
This report, including the financial information herein, is
transmitted to the shareholders of MuniAssets 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. Statements and other information herein are as dated
and are subject to change.
<PAGE>
MuniAssets
Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
MuniAssets Fund, Inc.
<TABLE>
Per Share
Selected Quarterly
Financial Data*
<CAPTION>
Net Realized Unrealized Dividends / Distributions
Investment Gains Gains Net Investment Capital
For the Quarter Income (Losses) (Losses) Income Gains
<S> <C> <C> <C> <C> <C>
December 1, 1993 to February 28, 1994 $.22 $ .03 $(.01) $.22 --
March 1, 1994 to May 31, 1994 .22 (.12) (.78) .22 $.15
June 1, 1994 to August 31, 1994 .22 (.07) .16 .22 --
September 1, 1994 to November 30, 1994 .21 (.17) (.87) .21 --
December 1, 1994 to February 28, 1995 .22 (.19) 1.10 .22 --
March 1, 1995 to May 31, 1995 .22 (.13) .50 .20 --
June 1, 1995 to August 31, 1995 .22 (.03) .06 .24 --
September 1, 1995 to November 30, 1995 .22 -- .31 .22 --
<CAPTION>
Net Asset Value Market Price**
For the Quarter High Low High Low Volume***
<S> <C> <C> <C> <C> <C>
December 1, 1993 to February 28, 1994 $14.76 $14.25 $14.375 $13.25 620
March 1, 1994 to May 31, 1994 14.22 12.97 13.875 12.125 513
June 1, 1994 to August 31, 1994 13.78 13.19 12.875 11.75 448
September 1, 1994 to November 30, 1994 13.68 12.26 12.375 10.125 848
December 1, 1994 to February 28, 1995 13.37 12.50 12.25 10.875 637
March 1, 1995 to May 31, 1995 13.73 13.24 12.375 11.625 575
June 1, 1995 to August 31, 1995 13.87 13.40 12.25 11.625 1,015
September 1, 1995 to November 30, 1995 14.05 13.72 12.375 11.875 1,249
<PAGE>
<FN>
*Calculations are based upon shares of Common Stock outstanding at
the end of each quarter.
**As reported in the consolidated transaction reporting system.
***In thousands.
</TABLE>
DEAR SHAREHOLDER
For the six months ended November 30, 1995, MuniAssets Fund, Inc.
earned $0.438 per share income dividends, which included earned and
unpaid dividends of $0.073. This represents a net annualized yield
of 6.21%, based on a month-end net asset value of $14.05 per share.
Over the same period, the Fund's total investment return was +6.22%,
based on a change in per share net asset value from $13.73 to
$14.05, and assuming reinvestment of $0.456 per share income
dividends.
The Environment
The pace of US economic activity apparently changed during the six
months ended November 30, 1995. During the summer months, there was
strong evidence of a slowing economy, a trend that was reversed
during the third calendar quarter of 1995, when gross domestic
product growth rebounded to a 4.2% pace. However, recent economic
releases suggest that this rate of expansion has not been sustained.
A number of key measures of economic growth indicate that the
economy is losing momentum. Retail sales for November were soft,
reflecting continued caution on the part of debt-burdened consumers.
Home sales and housing starts both declined in October, despite
lower mortgage rates. At the same time, there has been an increase
in initial unemployment claims, along with weak job and income
growth. In response to this slowing in the economy, inflationary
pressures continue to be subdued. As a result of these trends, long-
term interest rates have fallen, bond prices have risen, and the US
stock market reached a new all-time high.
The strong stock and bond market rallies suggest that investors are
not only anticipating that a lackluster economy will lead the
Federal Reserve Board to resume its easing of monetary policy, but
also that the Clinton Administration and Congress will reach an
agreement in their current Federal budget deliberations. While the
probable direction of economic activity will continue to be the
primary focus of investors in the weeks ahead, a credible plan for
reducing the Federal budget deficit will also be an important factor
in the investment outlook.
<PAGE>
The Municipal Market
Tax-exempt bond yields continued to decline during the six-month
period ended November 30, 1995. As measured by the Bond Buyer
Revenue Bond Index, the yield on uninsured, long-term municipal
revenue bonds fell approximately 25 basis points (0.25%) to end the
November period at approximately 5.75%. While tax-exempt bond yields
have declined dramatically from their highs one year ago, municipal
bond yields have exhibited considerable yield volatility on a weekly
basis. In recent months, tax-exempt bond yields have fluctuated by
as much as 20 basis points on a week-to-week basis. US Treasury bond
yields have displayed similar volatility, but the extent of their
decline has been greater. By the end of November, long-term US
Treasury bond yields had declined almost 50 basis points to 6.13%.
Proposed Federal tax restructuring has continued to weigh heavily on
the tax-exempt bond market. Thus far in 1995, US Treasury bond
yields have declined approximately 175 basis points. Municipal bond
yields have fallen approximately 120 basis points as the uncertainty
surrounding any changes to the existing Federal income tax structure
has prevented the municipal bond market from rallying as strongly as
its taxable counterpart.
A general view of a moderately expanding domestic economy, supported
by a very favorable inflationary environment, allowed interest rates
to significantly decline from their recent highs in November 1994.
However, this decline was not a smooth downward curve. Conflicting
economic indicators were released during recent months that have
prevented a clear consensus regarding the near-term direction of
interest rates from being reached. The resultant uncertainty has
promoted more of a saw-toothed pattern as interest rate declines
were repeatedly interrupted by indications of stronger-than-expected
economic growth. As these concerns were overcome by subsequent
weaker economic releases, interest rate declines have resumed. These
periods of volatility are likely to continue for the remainder of
1995, or until proposed Federal budget deficit reduction packages
are resolved and any resultant responses by the Federal Reserve
Board have occurred. However, the municipal bond market's technical
position remained supportive throughout recent quarters.
Approximately $42 billion in long-term municipal securities were
issued during the three-month period ended November 30, 1995. While
this issuance is slightly above underwritings during the same three-
month period ended November 30, 1994, tax-exempt bond issuance over
the last 12 months remained approximately 20% below comparable 1994
levels. The municipal bond market should be able to maintain this
positive technical position well into 1996. Annual issuance for 1995
is now projected to be approximately $140 billion, significantly
less than last year's already low level of $162 billion. Projected
maturities and early redemptions for the remainder of 1995 and
throughout 1996 will lead to a continued decline in the total
outstanding municipal bond supply throughout 1996 and, perhaps, into
1998 should new bond issuance remain at historically low levels.
<PAGE>
Despite the municipal bond market's relative underperformance
compared to the US Treasury market thus far in 1995, the extent of
the tax-exempt bond market's rally was nonetheless quite impressive.
From their highs on November 30, 1994, municipal bond yields have
fallen approximately 160 basis points and municipal bond prices rose
accordingly. Most tax-exempt products recouped almost all of the
losses incurred in 1994 and are well on their way to posting double-
digit total returns for all of 1995. This relative underperformance
so far in 1995 provided long-term investors with the rare
opportunity to purchase tax-exempt securities at yield levels near
those of taxable securities.
Additionally, many of the factors that led to the relative
underperformance of the tax-exempt bond market thus far in 1995,
namely investor concern regarding Federal budget deficit reductions
and proposed changes in the Federal income tax structure, are
nearing resolution. The Federal budget reconciliation process has
already begun, and is expected to be essentially completed by year-
end. Recent public opinion polls suggest that the majority of
American taxpayers prefer the existing Federal income tax system
compared to proposed changes, such as the flat-tax or national sales
tax. In an upcoming election year, neither party is likely to
advocate a clearly unpopular position, particularly one that can be
expected to negatively impact the Federal budget deficit reduction
program through reduced tax revenues. As these factors are resolved,
we believe that much of the resistance that the municipal bond
market has met this year should dissipate. This should allow
municipal bond yields to decline from current levels in order to
return to more normal historic yield relationships.
Portfolio Strategy
Despite considerable interest rate volatility during the six months
ended November 30, 1995, MuniAssets Fund, Inc. generated an
attractive total return. The composition and structure of the
portfolio has changed very little during this period, with the one
exception being a steady increase in the Fund's exposure to the
healthcare sector. Currently, healthcare holdings constitute
approximately 25% of the Fund's net assets. To the extent that
prospective additions meet the stringent criteria adopted by our
credit analysts, we can expect to further increase this percentage
share in the months ahead.
Our portfolio strategy continues to reflect our efforts to generate
and maintain an attractive dividend by investing in lower and below
investment-grade tax-exempt municipal bonds. Over the last six
months, we purchased several issues yielding between 7.00%--7.75%.
We kept cash reserves well below 5% of net assets, reflecting what
has been an overall constructive market outlook.
<PAGE>
Looking ahead, a more circumspect approach to the market may be
warranted. Long-term interest rates declined dramatically this year,
and it appears that fixed-income investors have already discounted a
number of positive developments. Therefore, it seems appropriate to
adopt a somewhat cautious stance until clearer signs emerge with
regard to the economy, deficit reduction as well as incipient tax
reform. It appears that inflation, at least in the foreseeable
future, no longer constitutes a credible threat. Thus, we are
comfortable maintaining a fully invested posture despite our neutral
outlook.
In Conclusion
We appreciate your investment in MuniAssets 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
Vice President
(Theodore R. Jaeckel Jr.)
Theodore R. Jaeckel Jr.
Portfolio Manager
January 3, 1996
<PAGE>
We are pleased to announce that Theodore R. Jaeckel Jr. is
responsible for the day-to-day management of MuniAssets 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 from 1983 to 1991, becoming Vice President in the
Tax-Exempt Bond Division in 1983.
Portfolio
Abbreviations
To simplify the listings of MuniAssets Fund, Inc.'s portfolio
holdings in the Schedule of Investments, we have abbreviated the
names of many of the securities according to the list below and at
right.
AMT Alternative Minimum Tax (subject to)
COP Certificates of Participation
GO General Obligation Bonds
HFA Housing Finance Agency
IDA Industrial Development Authority
IDB Industrial Development Board
IDR Industrial Development Revenue Bonds
M/F Multi-Family
PCR Pollution Control Revenue Bonds
RIB Residual Interest Bonds
S/F Single-Family
UT Unlimited Tax
VRDN Variable Rate Demand Notes
<TABLE>
SCHEDULE OF INVESTMENTS (in Thousands)
<CAPTION>
S&P Moody's Face Value
STATE Ratings Ratings Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
Alabama--4.3% NR* B1 $ 1,000 Birmingham, Alabama, IDB, PCR (USG Interiors),
7.125% due 4/01/2002 $ 1,023
B+ NR* 1,420 Brewton, Alabama, IDB, PCR, Refunding (Container
Corporation American Project), 8% due 4/01/2009 1,553
BBB- Baa3 3,500 Mobile, Alabama, IDB, Solid Waste Disposal, Revenue
Refunding Bonds (Mobile Energy Services Co. Project),
6.95% due 1/01/2020 3,679
<PAGE>
Alaska--1.3% NR* NR* 2,000 Valdez, Alaska, Marine Terminal Revenue Refunding Bonds
(Amerada Hess Pipeline Corporation), 6.10% due 2/01/2024 1,942
Arizona--0.1% A1+ P1 100 Maricopa County, Arizona, Pollution Control Corp., PCR,
Refunding (Arizona Public Service Co.), VRDN, Series B,
3.70% due 5/01/2029 (a) 100
Arkansas--0.9% A1+ P1 200 Clark County, Arkansas, Solid Waste Disposal Revenue Bonds
(Reynolds Metals Co. Project), VRDN, AMT, 3.75% due
8/01/2022 (a) 200
A1+ Aaa 100 Little Rock, Arkansas, Health Facilities Board,
Hospital Revenue Bonds (Southwest Hospital), VRDN, 3.70%
due 10/01/2018 (a)(b) 100
NR* NR* 1,000 Pine Bluff, Arkansas, IDR, Refunding (Coltec Industries
Incorporated), 6.50% due 2/15/2009 1,008
California--4.6% NR* NR* 3,305 Long Beach, California, Redevelopment Agency, M/F Housing
Revenue Refunding Bonds (Pacific Court Apartments), AMT,
Issue B, 6.80% due 9/01/2013 2,665
AA Aa 2,000 Metropolitan Water District, Southern California, Waterworks
Revenue Bonds, RIB, 7.559% due 8/05/2022 (c) 2,005
NR* NR* 1,950 Pleasanton, California, Joint Powers Financing Authority,
Reassessment Subordinated Revenue Bonds, Series B, 6.60%
due 9/02/2008 2,024
Colorado--7.0% NR* Baa 2,500 Arapahoe County, Colorado, Capital Improvement Trust Fund,
Highway Revenue Bonds (SR-E-470 Project), Series B,
7% due 8/31/2026 2,695
Denver, Colorado, City and County Airport Revenue Bonds, AMT:
BBB Baa 1,000 Series A, 8% due 11/15/2025 1,123
BBB Baa 2,500 Series B, 7.25% due 11/15/2023 2,706
NR* NR* 3,460 Mountain Village Metropolitan District, Colorado, San Miguel
County Revenue Bonds, 7.40% due 12/15/2013 (d) 3,767
Connecticut--1.4% NR* NR* 1,920 Eastern Connecticut, State Regional Educational Service
Center Revenue Bonds, 6.50% due 5/15/2009 1,987
District of District of Columbia, COP:
Columbia--3.6% B- NR* 2,000 6.875% due 1/01/2003 2,032
B- NR* 3,130 7.30% due 1/01/2013 3,243
<PAGE>
Georgia--1.4% NR* NR* 2,000 Hancock County, Georgia, COP, 8.50% due 4/01/2015 (d) 2,115
Illinois--4.7% Illinois Health Facilities Authority Revenue Bonds:
BBB+ NR* 1,000 (Community Hospital of Ottawa Project), 6.75% due 8/15/2014 1,022
BBB+ NR* 2,000 (Community Hospital of Ottawa Project), 6.85% due 8/15/2024 2,055
A A 1,000 (Edward Hospital Association Project), 7% due 2/15/2022 1,064
NR* Baa1 1,150 (Holy Cross Hospital Project), 6.70% due 3/01/2014 1,164
BBB NR* 1,485 Refunding (Saint Elizabeth's Hospital of Chicago),
7.625% due 7/01/2010 1,583
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<CAPTION>
S&P Moody's Face Value
STATE Ratings Ratings Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
Indiana--6.0% BB Ba3 $ 1,000 East Chicago, Indiana, Economic Development Revenue
Bonds (U.S. Gypsum Company Project), 7.25% due 5/01/2014 $ 1,032
Indiana Health Facilities Finance Authority, Hospital
Revenue Bonds:
AA Aa 2,500 (Daughters of Charity--Saint Vincent Hospital and
Healthcare Center), 5.75% due 11/15/2022 2,466
NR* A 2,000 Refunding (Saint Anthony Medical Center), Series A, 7%
due 10/01/2017 2,148
BBB Baa2 2,850 Indianapolis, Indiana, Airport Authority, Special Facilities
Revenue Bonds (Federal Express Corporation Project),
AMT, 7.10% due 1/15/2017 3,070
Iowa--1.3% BB NR* 1,000 Des Moines County, Iowa, IDR, Refunding (U.S. Gypsum
Company Project), 7.20% due 11/01/2007 (d) 1,078
NR* NR* 800 Iowa Finance Authority, Health Care Facilities Revenue
Bonds (Mercy Health Initiatives Project), 9.95% due 7/01/2019 860
Louisiana--7.5% NR* Baa1 3,695 Lafourche Parish, Louisiana, Revenue Bonds (Hospital Service
District No. 003), 6% due 10/01/2012 3,614
NR* Baa2 1,700 Lake Charles, Louisiana, Harbor and Terminal District,
Port Facilities Revenue Refunding Bonds (Trunkline Long
Company Project), 7.75% due 8/15/2022 1,935
BB NR* 1,600 New Orleans, Louisiana, IDB, IDR, Refunding (U.S. Gypsum
Company Project), 7.20% due 10/01/2007 1,718
BB- NR* 3,500 Port New Orleans, Louisiana, IDR, Refunding (Continental
Grain Company Project), 7.50% due 7/01/2013 3,721
<PAGE>
Maryland--2.1% NR* NR* 3,000 Maryland State Energy Financing Administration, Limited
Obligation Revenue Bonds (Cogeneration--AES Warrior Run),
AMT, 7.40% due 9/01/2019 3,149
Massachusetts-- NR* NR* 1,000 Massachusetts State Health and Educational Facilities
8.0% Authority Revenue Bonds (New England Memorial Hospital
Project), Series C, 7% due 4/01/2014 934
Massachusetts State Industrial Finance Agency Revenue Bonds:
NR* B1 3,000 (Bay Cove Human Services Inc.), 8.375% due 4/01/2019 3,302
BB+ Ba1 1,935 (Vinfen Corporation), 7.10% due 11/15/2018 1,972
NR* NR* 1,000 Massachusetts State Industrial Finance Agency, Solid Waste
Disposal Revenue Bonds (Molten Metal Technology Project),
8.25% due 8/01/2014 1,048
NR* NR* 4,000 Massachusetts State Port Authority, Special Project
Revenue Bonds (Harborside Hyatt Project), AMT, 10%
due 3/01/2026 4,511
Michigan--6.2% Michigan State Hospital Finance Authority, Revenue
Refunding Bonds, Series A:
A A 2,900 (Detroit Medical Center Obligation Group), 6.50% due 8/15/2018 3,007
BBB Baa1 2,000 (Pontiac Osteopathic), 6% due 2/01/2014 1,882
BBB Baa1 1,500 (Pontiac Osteopathic), 6% due 2/01/2024 1,369
AA Aa 1,230 Royal Oak, Michigan, Hospital Finance Authority Revenue
Bonds (William Beaumont Hospital), Series D, 6.75%
due 1/01/2020 1,310
NR* NR* 1,500 Wayne Charter County, Michigan, Special Airport
Facilities, Revenue Refunding Bonds (Northwest Airlines,
Inc.), 6.75% due 12/01/2015 1,536
Minnesota--0.7% AA+ Aa 1,000 Minnesota State, HFA, S/F Mortgage Revenue Bonds,
Series Q, 6.70% due 1/01/2017 1,060
Missouri--3.4% NR* Ba3 700 Clay County, Missouri, IDA, IDR, Refunding (U.S. Gypsum
Corporate Project), 7.25% due 5/01/2014 724
BBB- NR* 1,555 Joplin, Missouri, IDA, Hospital Facilities, Revenue Refunding
and Improvement Bonds (Tri-State Osteopathic), 8.25% due
12/15/2014 1,670
NR* Baa 2,500 Missouri State Health and Educational Facilities
Authority, Health Facilities Revenue Bonds (Jefferson
Memorial Hospital Obligation Group), 6.80% due 5/15/2025 2,534
New Mexico--1.1% A1+ VMIG1++ 100 Albuquerque, New Mexico, Hospital Revenue Bonds (Sisters
of Charity at Saint Joseph's Church), VRDN, 3.90%
due 5/15/2022 (a) 100
BB Ba2 1,250 Farmington, New Mexico, PCR, Refunding (Public Service
Company--San Juan Project), Series A, 6.40% due 8/15/2023 1,244
A1+ P1 300 Hurley, New Mexico, PCR (Kennecott Santa Fe), VRDN,
3.80% due 12/01/2015 (a) 300
<PAGE>
New York--3.7% New York City, New York, GO, UT, Series B:
BBB+ Baa1 1,000 7% due 2/01/2016 1,075
BBB+ Baa1 1,155 Sub-Series B-1, 7.375% due 8/15/2013 1,307
BBB+ Baa1 1,000 Sub-Series B-1, 7% due 8/15/2016 1,091
BBB+ Baa1 1,800 Sub-Series B-1, 7.25% due 8/15/2019 1,999
Ohio--1.8% NR* Ba2 2,300 Ohio State, IDR, Refunding (Kroger Company), 8.65%
due 6/01/2011 2,592
Oregon--2.2% A-1 VMIG1++ 100 Medford, Oregon, Hospital Facilities Authority Revenue
Bonds (Gross-Rogue Valley Health Services), VRDN, 3.90%
due 10/01/2016 (a) 100
NR* NR* 1,000 Western Generation Agency, Oregon, Revenue Bonds (Wauna
Cogeneration Project), Series A, 7.125% due 1/01/2021 1,048
B+ NR* 2,000 Yamhill County, Oregon, PCR, Refunding (Smurfit Newsprint
Corporation Project), 8% due 12/01/2003 2,145
Pennsylvania-- BB+ Baa3 1,250 Allegheny County, Pennsylvania, IDA, Environmental
12.6% Improvement, Revenue Refunding Bonds (USX Corporation),
Series A, 6.70% due 12/01/2020 1,294
BB Ba2 1,500 Beaver County, Pennsylvania, IDA, PCR, Refunding
(Cleveland Electric), Series A, 7.75% due 7/15/2025 1,613
NR* NR* 1,275 Lehigh County, Pennsylvania, General Purpose Authority
Revenue Bonds (Wiley House Kids Peace), 8.75% due 11/01/2014 1,332
NR* Ba 1,500 Montgomery County, Pennsylvania, IDA, Revenue Bonds
(Pennsburg Nursing and Rehabilitation Center), 7.625%
due 7/01/2018 1,560
BBB NR* 3,735 Northeastern, Pennsylvania, Hospital and Educational
Authority, University Revenue Refunding Bonds (Wilkes
University), 5.625% due 10/01/2018 3,535
NR* NR* 3,000 Pennsylvania Economic Development Financing Authority,
Recycling Revenue Bonds (Ponderosa Fibres Project), AMT,
Series A, 9.25% due 1/01/2022 3,096
NR* NR* 4,000 Philadelphia, Pennsylvania, Authority for IDR, Refunding
(Commercial Development Philadelphia Airport), AMT,
7.75% due 12/01/2017 4,118
NR* NR* 2,000 Washington County, Pennsylvania, Hospital Authority,
Revenue Refunding Bonds (Canonsburg General Hospital
Project), 7.35% due 6/01/2013 1,878
Rhode Island-- West Warwick, Rhode Island, GO, UT, Series A:
1.2% NR* Ba 745 6.80% due 7/15/1998 764
NR* Ba 910 7.30% due 7/15/2008 990
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in Thousands)
<CAPTION>
S&P Moody's Face Value
STATE Ratings Ratings Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
Tennessee--1.8% NR* NR* $ 2,400 Knox County, Tennessee, Health, Educational and
Housing Facilities Board, Hospital Facilities Revenue
Bonds (Baptist Health Systems of East Tennessee),
8.60% due 4/15/2016 $ 2,570
Texas--2.8% BB Ba 3,500 Odessa, Texas, Junior College District, Revenue
Refunding Bonds, Series A, 8.125% due 12/01/2018 3,725
NR* VMIG1++ 400 Southwest Texas, Higher Education Authority Incorporated,
Revenue Refunding Bonds (Southern Methodist University),
VRDN, 3.70% due 7/01/2015 (a) 400
Vermont--5.0% BBB NR* 1,450 Swanton Village, Vermont, Electric System Revenue
Bonds, 6.70% due 12/01/2023 1,511
Vermont Educational and Health Buildings Financing Agency,
Revenue Refunding Bonds:
NR* NR* 3,065 (College of Saint Joseph's Project), 8.50% due 11/01/2024 3,285
NR* Baa 2,445 (Norwich University Project), 6% due 9/01/2013 2,474
Virginia--0.7% NR* NR* 1,000 Pittsylvania County, Virginia, IDA, Multi-trade Revenue
Bonds, AMT, Series A, 7.55% due 1/01/2019 1,072
Wyoming--0.7% BBB Baa2 1,000 Sweetwater County, Wyoming, Solid Waste Disposal
Revenue Bonds (FMC Corporation Project), AMT, Series A,
7% due 6/01/2024 1,049
Total Investments (Cost--$138,642)--98.1% 143,772
Other Assets Less Liabilities--1.9% 2,712
--------
Net Assets--100.0% $146,484
========
<PAGE>
<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 November 30, 1995.
(b)CGIC Insured.
(c)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 November 30, 1995.
(d)Bank Qualified.
*Not Rated.
++Highest short-term rating by Moody's Investors Service, Inc.
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENT OF ASSETS, LIABILITIES AND CAPITAL
<CAPTION>
As of November 30, 1995
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$138,642,154) (Note 1a) $143,771,927
Cash 77,515
Interest receivable 2,836,493
Deferred organization expenses (Note 1e) 46,679
Prepaid expenses and other assets 34,308
------------
Total assets 146,766,922
------------
Liabilities: Payables:
Dividends to shareholders (Note 1f) $ 150,980
Investment adviser (Note 2) 25,440 176,420
------------
Accrued expenses and other liabilities 106,465
------------
Total liabilities 282,885
------------
Net Assets: Net assets $146,484,037
============
<PAGE>
Capital: Common Stock, par value $.10 per share; 200,000,000 shares
authorized; 10,424,616 shares issued and outstanding (Note 4) $ 1,042,461
Paid-in capital in excess of par 148,526,411
Undistributed investment income--net 759,007
Accumulated realized capital losses on investments--net (Note 5) (8,973,615)
Unrealized appreciation on investments--net 5,129,773
------------
Total capital--Equivalent to $14.05 net asset value per share of Common Stock
(market price--$12.375) $146,484,037
============
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENT OF OPERATIONS
<CAPTION>
For the Six Months Ended November 30, 1995
<S> <S> <C> <C>
Investment Interest and amortization of premium and discount earned $ 4,858,469
Income (Note 1d):
Expenses: Investment advisory fees (Note 2) $ 394,505
Printing and shareholder reports 31,705
Professional fees 31,452
Transfer agent fees (Note 2) 23,302
Accounting services (Note 2) 18,225
Listing fees 13,669
Directors' fees and expenses 11,982
Amortization of organization expenses (Note 1e) 7,189
Custodian fees 6,827
Pricing fees 5,691
Other 7,615
------------
Total expenses before reimbursement 552,162
Reimbursement of expenses (Note 2) (249,461)
------------
Total expenses after reimbursement 302,701
------------
Investment income--net 4,555,768
------------
Realized & Realized loss on investments--net (298,998)
Unrealized Gain Change in unrealized appreciation on investments--net 3,810,781
(Loss) on ------------
Investments--Net Net Increase in Net Assets Resulting from Operations $ 8,067,551
(Notes 1b, 1d & 3): ============
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
For the Six For the
Months Ended Year Ended
November 30, May 31,
Increase (Decrease) in Net Assets: 1995 1995
<S> <S> <C> <C>
Operations: Investment income--net $ 4,555,768 $ 4,637,913
Realized loss on investments--net (298,998) (3,074,947)
Change in unrealized appreciation/depreciation on
investments--net 3,810,781 5,812,630
------------ ------------
Net increase in net assets resulting from operations 8,067,551 7,375,596
------------ ------------
Dividends to Investment income--net (4,752,968) (4,046,565)
Shareholders ------------ ------------
(Note 1f): Net decrease in net assets resulting from dividends to
shareholders (4,752,968) (4,046,565)
------------ ------------
Common Stock Net proceeds from issuance of Common Stock resulting
Transactions from reorganization -- 75,686,368
(Note 4): ------------ ------------
Net increase in net assets derived from capital stock
transactions -- 75,686,368
------------ ------------
Net Assets: Total increase in net assets 3,314,583 79,015,399
Beginning of period 143,169,454 64,154,055
------------ ------------
End of period* $146,484,037 $143,169,454
============ ============
<FN>
*Undistributed investment income--net $ 759,007 $ 956,207
============ ============
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
<CAPTION>
The following per share data and ratios For the For the For the Period
have been derived from information provided Six Months Year June 25,
in the financial statements. Ended Ended 1993++ to
Nov. 30, May 31, May 31,
Increase (Decrease) in Net Asset Value: 1995 1995 1994
<S> <S> <C> <C> <C>
Per Share Net asset value, beginning of period $ 13.73 $ 13.40 $ 14.18
Operating ------------ ------------ ------------
Performance: Investment income--net .44 .87 .81
Realized and unrealized gain (loss) on investments--net .34 .33 (.66)
------------ ------------ ------------
Total from investment operations .78 1.20 .15
------------ ------------ ------------
Less dividends and distributions:
Investment income--net (.46) (.85) (.74)
Realized gain on investments--net -- -- (.15)
------------ ------------ ------------
Total dividends and distributions (.46) (.85) (.89)
------------ ------------ ------------
Capital charge resulting from issuance
of Common Stock -- (.02) (.04)
------------ ------------ ------------
Net asset value, end of period $ 14.05 $ 13.73 $ 13.40
============ ============ ============
Market price per share, end of period $ 12.375 $ 11.875 $ 12.25
============ ============ ============
Total Investment Based on net asset value per share 6.22%+++ 9.93% .83%+++
Return:** ============ ============ ============
Based on market price per share 8.18%+++ 4.00% (12.87%)+++
============ ============ ============
Ratios to Average Expenses, net of reimbursement .42%* .50% .20%*
Net Assets: ============ ============ ============
Expenses .77%* .85% .85%*
============ ============ ============
Investment income--net 6.34%* 6.54% 6.12%*
============ ============ ============
Supplemental Net assets, end of period (in thousands) $ 146,484 $ 143,169 $ 64,154
Data: ============ ============ ============
Portfolio turnover 27.20% 55.51% 101.59%
============ ============ ============
<FN>
*Annualized.
**Total investment returns based on market value, which can be
significantly greater or lesser than the net asset value, may result
in substantially different returns. Total investment returns exclude
the effects of sales loads.
++Commencement of Operations.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
MuniAssets Fund, Inc. (the "Fund") is registered under the
Investment Company Act of 1940 as a non-diversified, closed-end
management investment company. These unaudited financial statements
reflect all adjustments which are, in the opinion of management,
necessary to a fair statement of the results for the interim period
presented. All such adjustments are of a normal recurring nature.
The Fund determines and makes available for publication the net
asset value of its Common Stock on a weekly basis. The Fund's Common
Stock is listed on the New York Stock Exchange under the symbol MUA.
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 last available
bid price in the over-the-counter market or on the basis of yield
equivalents as obtained by the Fund's pricing service from one or
more dealers that make markets in the 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. Short-term investments with a
remaining maturity 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.
<PAGE>
* Financial futures contracts--The Fund may purchase or sell interest
rate futures contracts and options on such futures contracts for the
purpose of hedging the market risk on existing securities or the
intended purchase of securities. Futures contracts are contracts for
delayed delivery of securities at a specific future date and at a
specific price or yield. Upon entering into a contract, the Fund
deposits and maintains as collateral such initial margin as required
by the exchange on which the transaction is effected. Pursuant to
the contract, the Fund agrees to receive from or pay to the broker
an amount of cash equal to the daily fluctuation in value of the
contract. Such receipts or payments are known as variation margin
and are recorded by the Fund as unrealized gains or losses. When the
contract is closed, the Fund records a realized gain or loss equal
to the difference between the value of the contract at the time it
was opened and the value at the time it was closed.
* Options--The Fund is authorized to write and purchase call and 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.
NOTES TO FINANCIAL STATEMENTS (concluded)
<PAGE>
(e) Deferred organization expenses--Deferred organization expenses
are charged to expense 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 of 0.55% based upon the
average weekly value of the Fund's net assets. For the six months
ended November 30, 1995, FAM earned fees of $394,505, of which
$249,461 was voluntarily waived
Accounting services are provided to the Fund by FAM at cost.
Certain officers and/or directors of the Fund are officers and/or
directors of FAM, PSI, Merrill Lynch, Pierce, Fenner & Smith Inc.,
and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the six months ended November 30, 1995 were $45,746,730 and
$37,183,670, respectively.
Net realized and unrealized gains (losses) as of November 30, 1995
were as follows:
Realized Unrealized
Losses Gains
Long-term investments $ (298,998) $ 5,129,773
---------- -----------
Total $ (298,998) $ 5,129,773
========== ===========
<PAGE>
As of November 30, 1995, net unrealized appreciation for Federal
income tax purposes aggregated $5,129,773, of which $6,126,738
related to appreciated securities and $996,965 related to
depreciated securities. The aggregate cost of investments at
November 30, 1995 for Federal income tax purposes was $138,642,154.
4. Common Stock Transactions:
At November 30, 1995, the Fund had one class of shares of Common
Stock, par value $.10 per share, of which 200,000,000 shares were
authorized. During the six months ended November 30, 1995 shares
issued and outstanding remained constant at 10,424,616. At November
30, 1995, total paid-in capital amounted to $149,568,872.
5. Capital Loss Carryforward:
At May 31, 1995, the Fund had a capital loss carryforward of
approximately $3,703,000, all of which expires in 2003. This amount
will be available to offset like amounts of any future taxable
gains.
6. Acquisition of MuniBond Income Fund, Inc.:
On April 24, 1995, MuniAssets Fund, Inc. acquired all the net assets
of MuniBond Income Fund, Inc., pursuant to a plan of reorganization.
The acquisition was accomplished by a tax-free exchange of 5,637,561
Common Stock shares of MuniAssets Fund, Inc. for 5,752,965 Common
Stock shares outstanding of MuniBond Income Fund, Inc. MuniBond
Income Fund, Inc.'s net assets on that date of $75,866,609,
including $993,804 of unrealized depreciation and $5,229,374 of
accumulated net realized capital losses, were combined with those of
MuniAssets Fund, Inc. The aggregate net assets of MuniAssets Fund,
Inc. immediately after the acquisition amounted to $140,292,594.
7. Subsequent Event:
On December 11, 1995, the Fund's Board of Directors declared an
ordinary income dividend to Common Stock shareholders in the amount
of $0.072809 payable on December 28, 1995 to shareholders of record
as of December 22, 1995.
<PAGE>
OFFICERS AND DIRECTORS
Arthur Zeikel, President and Director
Joe Grills, Director
Walter Mintz, Director
Melvin R. Seiden, Director
Stephen B. Swensrud, Director
Harry Woolf, Director
Terry K. Glenn, Executive Vice President
Vincent R. Giordano, Senior Vice President
Donald C. Burke, Vice President
Kenneth A. Jacob, Vice President
Gerald M. Richard, Treasurer
Mark B. Goldfus, Secretary
Custodian
The Bank of New York
90 Washington Street
New York, New York 10286
Transfer Agent
The Bank of New York
101 Barclay Street, 22W
New York, New York 10286
NYSE Symbol
MUA
