MUNIVEST
PENNSYLVANIA
INSURED
FUND
STRATEGIC
Performance
FUND LOGO
Annual Report
October 31, 1994
This report, including the financial information
herein, is transmitted to the shareholders of MuniVest
Pennsylvania Insured Fund 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 Shares by issuing
Preferred Shares to provide Common Shareholders with
a potentially higher rate of return. Leverage creates
risks for Common Shareholders, including the likelihood
of greater volatility of net asset value and market
price of the Common Shares, and the risk that
fluctuations in the short-term dividend rates of the
Preferred Shares may affect the yield to Common
Shareholders.
<PAGE>
MuniVest Pennsylvania
Insured Fund
Box 9011
Princeton, NJ
08543-9011
MUNIVEST PENNSYLVANIA INSURED FUND
The Benefits and
Risks of
Leveraging
MuniVest Pennsylvania Insured Fund utilizes leveraging to seek
to enhance the yield and net asset value of its Common Shares.
However, these objectives cannot be achieved in all interest rate
environments. To leverage, the Fund issues Preferred Shares,
which pay 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 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
Shares. However, in order to benefit Common 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
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 Share
capitalization of $100 million and the issuance of Preferred Shares
for an additional $50 million, creating a total value of $150 million
available for investment in long-term municipal bonds. If prevail-
ing short-term interest rates are approximately 3% and long-term
interest rates are approximately 6%, the yield curve has a strongly
positive slope. The fund pays dividends on the $50 million of
Preferred Shares 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.
<PAGE>
In this case, the dividends paid to Preferred Shareholders are
significantly lower than the income earned on the fund's long-
term investments, and therefore the Common Shareholders are
the beneficiaries of the incremental yield. However, if short-term
interest rates rise, narrowing the differential between short-
term and long-term interest rates, the incremental yield pick-up
on the Common Shares will be reduced. At the same time, the
market value of the fund's Common Shares (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 Shares'
net asset value will reflect the full decline in the price of the
portfolio's investments, since the value of the fund's Preferred
Shares does not fluctuate. In addition to the decline in net asset
value, the market value of the fund's Common Shares may also decline.
Officers and
Trustees
Arthur Zeikel, President and Trustee
Kenneth S. Axelson, Trustee
Herbert I. London, Trustee
Robert R. Martin, Trustee
Joseph L. May, Trustee
Andre F. Perold, Trustee
Terry K. Glenn, Executive Vice President
Donald C. Burke, Vice President
Vincent R. Giordano, Vice President
Kenneth A. Jacob, Vice President
Gerald M. Richard, Treasurer
Mark B. Goldfus, Secretary
Robert E. Putney, III, Assistant Secretary
Transfer Agent
Common Shares:
The Bank of New York
101 Barclay Street
New York, New York 10286
Preferred Shares:
IBJ Schroder Bank & Trust Company
One State Street
New York, New York 10004
Custodian
The Bank of New York
90 Washington Street
New York, New York 10286
NYSE Symbol
MVP
<PAGE>
DEAR SHAREHOLDER
For the year ended October 31, 1994, the
Common Shares of MuniVest Pennsylvania
Insured Fund earned $0.904 per share income
dividends, which includes earned and unpaid
dividends of $0.067 This represents a net
annualized yield of 7.86%, based on a month-
end net asset value of $11.54 per share.
Over the same period, the total investment
return on the Fund's Common Shares was
- -15.76%, based on a change in per share net
asset value from $14.70 to $11.54, and
assuming reinvestment of $0.919 per share
income dividends.
For the six-month period ended October
31, 1994, the total investment return on
the Fund's Common Shares was -3.56%,
based on a change in per share net asset
value from $12.39 to $11.54, and assuming
reinvestment of $0.417 per share income
dividends.
The average yield of the Fund's Auction
Market Preferred Shares for the six months
ended October 31, 1994 was 3.006%.
The Environment
As discussed in our last report to share-
holders, the Federal Reserve Board
moved to counteract inflationary pressures
by tightening monetary policy. This
trend continued during the May-October
period. Despite the series of preemptive
strikes against inflation by the
central bank, concerns of increasing
inflationary pressures continued to
prompt volatility in the US capital
markets during the period. In addition,
the weakness of the US dollar in foreign
exchange markets prolonged stock and
bond market declines.
<PAGE>
Ongoing strength in the manufacturing
sector and better-than-expected economic
results continue to fuel speculation
that the Federal Reserve Board will
continue to raise short-term interest
rates in the months ahead. However,
although consumer spending is increasing,
it is doing so at a lower rate than
has been the case in recent economic
recoveries. In the weeks ahead, investors
will continue to assess economic
data and inflationary trends in order
to gauge whether further increases in
short-term interest rates are imminent.
Continued indications of moderate and
sustainable levels of economic growth
would be positive for the US capital
markets. At the same time, greater US
dollar stability in foreign exchange
markets would help to dampen expect-
ations of significantly higher short-term
interest rates.
The Municipal Market
The long-term tax-exempt market
continued to erode throughout the three
months ended October 31, 1994. As
measured by the Bond Buyer Revenue
Bond Index, yields on A-rated municipal
revenue bonds maturing in 30 years rose
by almost 50 basis points (0.50%) to 6.95%
during the October 31, 1994 quarter.
This represents the highest level in tax-
exempt bond yields in over two years.
US Treasury bonds suffered even greater
declines during the quarter as Treasury
bond yields rose approximately 60 basis
points to end the quarter at 8.00%.
The tax-exempt bond market reacted
negatively throughout the October
quarter to indications that, despite a
series of interest rate increases by the
Federal Reserve Board, the strength of
the domestic economy seen in recent
quarters has not been significantly
reduced. While inflationary pressures
have remained well contained, additional
Federal Reserve Board actions have been
expected both to ensure that domestic
economic growth is eventually confined
to current levels and to assure nervous
financial markets of its anti-inflationary
intentions.
<PAGE>
Fortunately, while the demand for tax-
exempt bonds has declined somewhat
in recent months, new bond issuance
has remained greatly reduced. During
the quarter ended October 31, 1994, only
$32 billion in long-term tax-exempt
securities were issued, a decline of over
50% versus the October 31, 1993 quarter.
Similarly, for the six months ended
October 31, 1994, only $75 billion in
municipal securities were underwritten, a
decline of over 50% versus the comparable
period a year earlier. This reduction
in issuance in recent quarters has
allowed the municipal bond market to
react to both the decline in investor
demand and the rise in fixed-income
yields in a more orderly fashion than in
similar situations in the past, particularly
during 1987.
Long-term tax-exempt revenue bonds
currently yield approximately 7%, or
almost 11.5% on an after-tax equivalent
basis, to an investor in the 39.6% Federal
income tax bracket. As inflation has
only marginally increased in the past
year, real tax-exempt interest rates have
risen dramatically. The Federal Reserve
Board appears committed to maintain-
ing inflation at or below its current
levels. Indeed, most forecasts expect
inflation to remain in its present range
of 3%-4% throughout 1995 and, poten-
tially, for the remainder of the 1990s.
Real after-tax equivalent interest rates
exceeding 7% represent historically
attractive municipal investments for
long-term investors.
<PAGE>
Federal Reserve Board actions taken
thus far have yet to fully impact US
domestic growth and expected additional
actions should promote only a modest
economic expansion within a benign
inflationary context beginning sometime
early in 1995. Within such an environment,
it is unlikely that tax-exempt interest
rates will remain at their current
attractive levels. Tax-exempt bond
issuance is unlikely to return to the
historic high levels seen in 1992 and
1993, while investor demand should returna
s markets stabilize. As we have discussed in
earlier reports, the total number of tax-
exempt bonds outstanding is scheduled
to decline dramatically in 1994 and
1995 as a result of both regular bond
maturities and early redemptions.
Investors seeking tax-advantaged issues
are likely to find it very difficult to
obtain currently available tax-exempt
yields as the current supply/demand
balance is unlikely to be maintained in
the coming quarters.
Portfolio Strategy
During the past 12 months the municipal
bond market was extremely volatile.
As measured by the Bond Buyer Revenue
Bond Index, long-term tax-exempt
bond yields ranged from a low of 5.50%
on January 31, 1994 to a high of 6.95%
on October 28, 1994. At year-end October
31, 1994, the Index was at its peak
for the period and reached its highest
level in nearly two and one-half years. The
change in direction of long-term interest
rates occurred because the US economy
heated up during the fourth quarter of
1993 and generated momentum which
carried forward throughout 1994. This
led the Federal Reserve Board to tighten
monetary policy in February, in an
attempt to prevent an increase in
inflationary pressures on the economy.
Prices of long-term fixed-income securities
fell sharply in response to the rapidly
changing investment climate.
<PAGE>
MuniVest Pennsylvania Insured Fund
altered its portfolio strategy during the
past 12 months as market psychology
changed. We entered the year with the
Fund fully invested and took advantage
of the decline in interest rates through
the start of 1994. As evidence of a
booming economy emerged early in 1994,
however, we became cautious on the market.
Our strategy centered on raising cash
reserves to approximately 10% of net
assets and restructuring the portfolio's
holdings to include a greater percentage
of defensive bonds. This entailed sell-
ing discount coupons and buying higher
coupon bonds which are priced to call.
As a result, we were able to mute some
of the Fund's volatility that occurred
during the very difficult period.
In Conclusion
We appreciate your ongoing interest in
MuniVest Pennsylvania Insured Fund,
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 and Portfolio Manager
November 28, 1994
<PAGE>
Portfolio
Abbreviations
To simplify the listings of MuniVest Pennsylvania Insured Fund's
portfolio holdings in the Schedule of Investments, we have abbreviated
the names of many of the securities according to the list at right.
AMT Alternative Minimum Tax (subject to)
CP Commercial Paper
GO Government Obligation Bonds
IDA Industrial Development Authority
PCR Pollution Control Revenue Bonds
UT Unlimited Tax
VRDN Variable Rate Demand Notes
YCN Yield Curve 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>
Pennsylvania-- Allegheny County, Pennsylvania, Airport Revenue Refunding Bonds, AMT
96.3% (Pittsburgh International Airport):
AAA Aaa $ 2,190 Series A, 5.625% due 1/01/2016 (b) $ 1,879
AAA Aaa 5,000 Series B, 5.625% due 1/01/2019 (c) 4,219
NR* A1 500 Allegheny County, Pennsylvania, IDA, Revenue Refunding Bonds
(Commercial Development Parkway Center Project), VRDN, Series A,
3.65% due 5/01/2009 (a) 500
AAA Aaa 3,000 Allegheny County, Pennsylvania, Sanitation Authority,
Sewer Revenue Bonds, Series B, 6% due 12/01/2011 (b) 2,861
AAA Aaa 1,600 Altoona, Pennsylvania, City Authority Water, Revenue Bonds, Series A,
6.50% due 11/01/2019 (c) 1,561
AAA Aaa 2,940 Armstrong County, Pennsylvania, Hospital Authority Health Center,
Revenue Refunding Bonds (Canterbury Place Project), 6.50%
due 12/01/2021 (b) 2,828
AAA Aaa 1,400 Beaver County, Pennsylvania, IDA, PCR, Refunding (Ohio Edison
Company/Mansfield), Series A, 7% due 6/01/2021 (c) 1,426
AAA Aaa 2,550 Blair County, Pennsylvania, Hospital Authority Revenue Bonds
(Altoona Hospital Project), 6.375% due 7/01/2013 (d) 2,470
BBB+ Baa1 2,500 Delaware County, Pennsylvania, Hospital Authority Revenue Bonds
(Crozer-Chester), 6% due 12/15/2020 2,055
<PAGE>
A1 Aaa 1,200 Delaware County, Pennsylvania, IDA, PCR, Refunding (Philadelphia
Electric Company), CP, Series C, 2.75% due 11/10/1994 (c) 1,200
A1+ NR* 200 Geisinger Authority, Pennsylvania, Health Systems Revenue Bonds,
VRDN, Series B, 3.40% due 7/01/2022 (a) 200
AAA Aaa 2,000 Hampton Township, Pennsylvania, School District Revenue Bonds,
UT, 6.10% due 8/15/2015 (c) 1,887
AAA Aaa 3,000 Hollidaysburg, Pennsylvania, Area School District Improvement
Revenue Bonds, UT, 6.50% due 6/01/2020 (d) 2,941
AAA Aaa 3,280 Johnstown, Pennsylvania, Refunding Bonds, 6.45% due 10/01/2019 (c) 3,200
AAA Aaa 2,765 Lackawanna County, Pennsylvania, Revenue Refunding Bonds, UT, 6%
due 12/01/2011 (d) 2,634
AAA Aaa 1,000 Lancaster County, Pennsylvania, Hospital Authority, Revenue Refunding
Bonds (Lancaster General Hospital Project), 6.125% due 7/01/2012 (d) 955
AAA Aaa 3,395 Lehigh County, Pennsylvania, IDA, PCR, Refunding (Pennsylvania Power
& Light Company Project), Series A, 6.40% due 11/01/2021 (b) 3,273
AAA Aaa 4,000 North Allegheny, Pennsylvania, School District Refunding Bonds,
Series A, UT, 6.35% due 11/01/2012 (d) 3,932
AAA Aaa 2,000 North Penn, Pennsylvania, Water Authority Revenue Bonds, 6.20%
due 11/01/2022 (c) 1,881
Northeastern, Pennsylvania, Hospital and Educational Authority,
College Revenue Refunding Bonds:
BBB NR* 1,735 (King's College Project), Series B, 6% due 7/15/2018 1,517
BBB NR* 2,500 (Wilkes University), 5.625% due 10/01/2018 2,054
Pennsylvania State Higher Educational Assistance Agency
Revenue Bonds (Student Loan Revenue), AMT:
AAA Aaa 2,000 Series A, 7.05% due 10/01/2016 (d) 2,012
AAA Aaa 1,000 Series C, 6.40% due 3/01/2022 (d) 942
A1+ VMIG1 500 VRDN, Series B, 3.45% due 7/01/2018 (a) 500
AAA Aaa 3,500 Pennsylvania State IDA, Economic Revenue Bonds, 6%
due 1/01/2012 (d) 3,306
Pennsylvania State Turnpike Commission, Turnpike Revenue Bonds:
AAA Aaa 1,000 Series J, 7.20% due 12/01/2001 (c) (g) 1,105
AAA Aaa 3,000 Series L, 6.25% due 6/01/2011 (d) 2,942
BBB Baa1 2,505 Philadelphia, Pennsylvania, Gas Works Revenue Refunding Bonds,
14th Series A, 6.375% due 7/01/2014 2,314
BBB+ Baa1 1,000 Philadelphia, Pennsylvania, Hospitals and Higher Educational
Facilities Authority, Hospital Revenue Bonds (Graduate Health
Systems), Series B, 6.25% due 7/01/2018 852
<PAGE>
Pittsburgh, Pennsylvania, Water and Sewer Authority, Revenue
Refunding Bonds (Water and Sewer System) (c):
AAA Aaa 1,200 7.25% due 9/01/2014 (h) 1,302
AAA Aaa 2,500 Series A, 6.50% due 9/01/2013 2,492
BBB Baa 1,000 Ridley Park, Pennsylvania, Hospital Authority, Revenue Refunding
Bonds (Taylor Hospital), Series A, 6.125% due 12/01/2020 830
A1 NR* 1,600 Schuylkill County, Pennsylvania, IDA, Resource Recovery Revenue
Bonds (Northeastern Power Company), VRDN, 3.60% due 12/01/2011 (a) 1,600
BBB+ NR* 2,650 Sharon, Pennsylvania, Regional Health System Authority, Hospital
Revenue Bonds (Sharon Regional Health Systems Project), Series B,
6.875% due 12/01/2022 2,411
AAA Aaa 2,000 Solanco, Pennsylvania, School District Revenue Bonds, UT, 6.30%
due 2/15/2014 (c) 1,933
A1+ NR* 200 Washington County, Pennsylvania, Authority Lease Revenue Bonds
(Eye and Ear), VRDN, Series B-1, Subseries D, 3.45% due 12/15/2018 (a) 200
AAA Aaa 1,000 Wayne County, Pennsylvania, Hospital and Health Facilities Authority
Revenue Bonds, Country Guaranteed (Wayne Memorial Hospital Project),
6.375% due 7/01/2024 (b) 950
Puerto Rico--1.6% AAA Aaa 1,500 Commonwealth of Puerto Rico, GO, YCN, 8.32%
due 7/01/2020 (e) (f) 1,206
Total Investments (Cost--$77,920)--97.9% 72,370
Variation Margin on Financial Futures Contracts**--0.0% 5
Other Assets Less Liabilities--2.1% 1,515
--------
Net Assets--100.0% $ 73,890
========
<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 October 31, 1994.
(b)MBIA Insured.
(c)FGIC Insured.
(d)AMBAC Insured.
(e)FSA Insured.
(f)The interest rate is subject to change periodically and inversely to the
prevailing market rate. The interest rate shown is the rate in effect at
October 31, 1994.
(g)Prerefunded.
(h)As of October 31, 1994, a portion of this issue was held in connection with
open futures contracts.
*Not rated.
**Financial futures contracts sold as of October 31, 1994 were as follows:
<PAGE>
<CAPTION>
Value
Number of Expiration (Note 1a)
Contracts Issue Date (in Thousands)
<C> <S> <S> <C>
154 US Treasury Bonds December 1994 $(15,653)
Total Futures Contracts
(Total Contract Price--$15,871) $(15,653)
=========
Ratings of issues shown have not been audited by Deloitte & Touche LLP.
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENT OF ASSETS, LIABILITIES AND CAPITAL
<CAPTION>
As of October 31, 1994
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$77,920,190) (Note 1a) $ 72,370,322
Cash 90,173
Receivables:
Securities sold $ 1,732,058
Interest 1,453,790
Variation margin (Note 1b) 4,813 3,190,661
------------
Deferred organization expenses (Note 1e) 47,931
Prepaid expenses and other assets 14,587
------------
Total assets 75,713,674
------------
Liabilities: Payables:
Securities purchased 1,577,845
Dividends to shareholders (Note 1g) 121,656
Investment adviser (Note 2) 14,941 1,714,442
------------
Accrued expenses and other liabilities 109,199
------------
Total liabilities 1,823,641
------------
<PAGE>
Net Assets: Net assets $ 73,890,033
============
Capital: Capital Shares (unlimited number of shares authorized) (Note 4):
Preferred Shares, par value $.10 per share (550 shares of AMPS*
issued and outstanding at $50,000 per liquidation preference) $ 27,500,000
Common Shares, par value $.10 per share (4,019,033 shares issued and
outstanding) $ 401,903
Paid-in capital in excess of par 55,723,495
Undistributed investment income--net 288,233
Accumulated realized capital losses on investments--net (Note 5) (4,691,574)
Unrealized depreciation on investments--net (5,332,024)
------------
Total-Equivalent to $11.54 net asset value per Common Share
(market price--$10.875) 46,390,033
------------
Total capital $ 73,890,033
============
<FN>
*Auction Market Preferred Shares.
</TABLE>
<TABLE>
STATEMENT OF OPERATIONS
<CAPTION>
For the Year Ended October 31, 1994
<S> <S> <C> <C>
Investment Interest and amortization of premium and discount earned $ 4,598,700
Income
(Note 1d):
Expenses: Investment advisory fees (Note 2) $ 398,969
Professional fees 72,332
Printing and shareholder reports 44,445
Accounting services (Note 2) 40,883
Transfer agent fees 33,910
Trustees' fees and expenses 22,980
Listing fees 16,010
Amortization of organization expenses (Note 1e) 12,798
Commission fees (Note 4) 10,692
Custodian fees 7,315
Pricing fees 5,501
Other 18,277
------------
Total expenses before reimbursement 684,112
Reimbursement of expenses (Note 2) (274,748)
------------
Total expenses after reimbursement 409,364
------------
Investment income--net 4,189,336
------------
<PAGE>
Realized & Unreal- Realized loss on investments (4,691,570)
ized Loss on Change in unrealized appreciation/depreciation on investments--net (7,585,261)
Investments--Net ------------
(Notes 1d & 3): Net Decrease in Net Assets Resulting from Operations $ (8,087,495)
============
</TABLE>
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
For the For the Period
Year Ended July 30, 1993++
Increase (Decrease) in Net Assets: Oct. 31, 1994 to Oct. 31, 1993
<S> <S> <C> <C>
Operations: Investment income--net $ 4,189,336 $ 981,705
Realized gain (loss) on investments--net (4,691,570) 266,982
Change in unrealized appreciation/depreciation on investments--net (7,585,261) 2,253,237
------------ ------------
Net increase (decrease) in net assets resulting from operations (8,087,495) 3,501,924
------------ ------------
Dividends & Investment income--net:
Distributions to Common Shares (3,431,314) (528,319)
Shareholders Preferred Shares (792,473) (130,702)
(Note 1g): Realized gain on investments--net:
Common Shares (231,439) --
Preferred Shares (35,547) --
------------ ------------
Net decrease in net assets resulting from dividends and distributions
to shareholders (4,490,773) (659,021)
------------ ------------
Capital Share Net proceeds from issuance of Common Shares -- 55,292,685
Transactions Proceeds from issuance of Preferred Shares -- 27,500,000
(Notes 1e & 4): Offering and underwriting costs resulting from the issuance of Preferred Shares (12,965) (613,250)
Value of shares issued to Common Shareholders in reinvestment of dividends
and distributions 1,112,255 246,668
------------ ------------
Net increase in net assets derived from capital share transactions 1,099,290 82,426,103
------------ ------------
Net Assets: Total increase (decrease) in net assets (11,478,978) 85,269,006
Beginning of period 85,369,011 100,005
------------ ------------
End of period* $ 73,890,033 $ 85,369,011
============ ============
<FN>
*Undistributed investment income-net $ 288,233 $ 322,684
============ ============
++Commencement of Operations.
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
<CAPTION>
The following per share data and ratios have been derived
from information provided in the financial statements. For the For the Period
Year Ended July 30, 1993++
Increase (Decrease) in Net Asset Value: Oct. 31, 1994 to Oct. 31, 1993
<S> <S> <C> <C>
Per Share Net asset value, beginning of period $ 14.70 $ 14.18
Operating ------------ ------------
Performance: Investment income--net 1.05 .25
Realized and unrealized gain (loss) on investments--net (3.08) .64
------------ ------------
Total from investment operations (2.03) .89
------------ ------------
Less dividends and distributions to Common Shareholders:
Investment income--net (.86) (.13)
Realized gain on investments--net (.06) --
------------ ------------
Total dividends and distributions to Common Shareholders (.92) (.13)
------------ ------------
Capital charge resulting from issuance of Common Shares -- (.05)
------------ ------------
Effect of Preferred Share activity++++:
Dividends and distributions to Preferred Shareholders:
Investment income--net (.20) (.03)
Realized gain on investments--net (.01) --
Capital charge resulting from issuance of Preferred Shares -- (.16)
------------ ------------
Total effect of Preferred Share activity (.21) (.19)
------------ ------------
Net asset value, end of period $ 11.54 $ 14.70
============ ============
Market price per share, end of period $ 10.875 $ 15.00
============ ============
Total Based on market value per share (22.20%) 0.92%+++
Investment ============ ============
Return:** Based on net asset value per share (15.76%) 4.62%+++
============ ============
<PAGE>
Ratios to Average Expenses, net of reimbursement .51% .90%*
Net Assets:*** ============ ============
Expenses .86% .90%*
============ ============
Investment income--net 5.24% 5.27%*
============ ============
Supplemental Net assets, net of Preferred Shares, end of period (in thousands) $ 46,390 $ 57,869
Data: ============ ============
Preferred Shares outstanding, end of period (in thousands) $ 27,500 $ 27,500
============ ============
Portfolio turnover 93.00% 22.31%
============ ============
Dividends Per Investment income--net $ 1,441 $ 238
Share on Preferred
Shares Outstanding:
<FN>
++Commencement of Operations.
++++The Fund's Preferred Shares were issued on September 2, 1993.
+++Aggregate total investment return.
*Annualized.
**Total investment returns based on market value, which can be significantly
greater or lesser than the net asset value, result in substantially different
returns. Total investment returns exclude the effects of sales loads.
***Do not reflect the effect of dividends to Preferred Shareholders.
See Notes to Financial Statements.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
MuniVest Pennsylvania Insured Fund (the "Fund") is registered
under the Investment Company Act of 1940 as a non-diversified,
closed-end management investment company. The Fund's Common
Shares are listed on the New York Stock Exchange under the symbol
MVP. The following is a summary of significant accounting policies
followed by the Fund.
<PAGE>
(a) Valuation of investments--Municipal bonds are traded primarily
in the over-the-counter markets and are valued at the most recent bid
price or yield equivalent as obtained by the Fund's pricing service
from dealers that make markets in such securities. Financial futures
contracts, which are traded on exchanges, are valued at their closing
prices as of the close of such exchanges. Options, which are traded
on exchanges, are valued at their last sale price as of the close of
such exchanges or, lacking any sales, at the last available bid price.
Securities with remaining maturities of sixty days or less are valued
at amortized cost, which approximates market value. Secuities 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
Trustees of the Fund.
(b) Financial futures contracts--The Fund may purchase or sell
interest rate futures contracts and options on such futures contracts
for the purpose of hedging the market risk on existing securities or
the intended purchase of securities. Futures contracts are contracts
for delayed delivery of securities at a specific future date and at a
specific price or yield. Upon entering into a contract, the Fund
deposits and maintains as collateral such initial margin as required
by the exchange on which the transaction is effected. Pursuant to
the contract, the Fund agrees to receive from or pay to the broker an
amount of cash equal to the daily fluctuation in value of the contract.
Such receipts or payments are known as variation margin and are
recorded by the Fund as unrealized gains or losses. When the con-
tract is closed, the Fund records a realized gain or loss equal to the
difference between the value of the contract at the time it was
opened and the value at the time it was closed.
(c) Income taxes--It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute substantially all of its
taxable income to its shareholders. Therefore, no Federal income
tax provision is required.
(d) Security transactions and investment income--Security trans-
actions are recorded on the dates the transactions are entered into
(the trade dates). Interest income is recognized on the accrual basis.
Discounts and market premiums are amortized into interest income.
Realized gains and losses on security transactions are determined on
the identified cost basis.
(e) Deferred organization and offering expenses--Deferred organiza-
tion expenses are amortized on a straight-line basis over a five-year
period beginning with the commencement of operations of the Fund.
Direct expenses relating to the public offering of the Fund's Common
and Preferred Shares were charged to capital at the time of issuance
of the shares.
<PAGE>
(f) Non-income producing investments--Written and purchased
options are non-income producing investments.
(g) Dividends and distributions--Dividends from net investment
income are declared and paid monthly. Distributions of capital gains
are recorded on the ex-dividend dates.
2. Investment Advisory Agreement and Transactions with
Affiliates:
The Fund has entered into an Investment Advisory Agreement with
Fund Asset Management, L.P. ("FAM"). Effective January 1, 1994, the
investment advisory business of FAM was reorganized from a
corporation to a limited partnership. Both prior to and after the
reorganization, ultimate control of FAM was vested with Merrill
Lynch & Co., Inc. ("ML & Co."). The general partner of FAM is
Princeton Services, Inc. ("PSI"), an indirect wholly-owned subsidiary
of ML & Co. The limited partners are ML & Co. and Fund Asset
Management, Inc. ("FAMI"), which is also an indirect wholly-owned
subsidiary of ML & Co.
FAM is responsible for the management of the Fund's portfolio and
provides the necessary personnel, facilities, equipment and certain
other services necessary to the operations of the Fund. For such
services, the Fund pays a monthly fee at an annual rate of 0.50%
of the Fund's average weekly net assets. For the year ended October
31, 1994, FAM earned fees of $398,969, of which $274,748 was
voluntarily waived.
Accounting services are provided to the Fund by FAM at cost.
Certain officers and/or trustees of the Fund are officers and/or
directors of FAM, FAMI, PSI, Merrill Lynch, Pierce, Fenner &
Smith Inc. ("MLPF&S"), and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the year ended October 31, 1994 were $69,896,632 and
$71,326,483, respectively.
Net realized and unrealized gains (losses) as of October 31, 1994 were
as follows:
Realized Unrealized
Losses Gains (Losses)
Long-term investments $(4,591,376) $(5,549,868)
Financial futures contracts (100,194) 217,844
----------- -----------
Total $(4,691,570) $(5,332,024)
=========== ===========
<PAGE>
As of October 31, 1994, net unrealized depreciation for Federal
income tax purposes aggregated $5,549,868, all of which are related
to depreciated securities. The aggregate cost of investments at
October 31, 1994 for Federal income tax purposes was $77,920,190.
4. Capital Share Transactions:
At October 31, 1994, the Fund had one class of Common Shares, par
value $.10 per share, of which unlimited number of shares were
authorized. For the year ended October 31, 1994, shares issued and
outstanding increased by 81,865 to 4,019,033 as a result of dividend
reinvestment. At October 31, 1994, total paid-in capital amounted
to $56,125,398.
Preferred Shares
Auction Market Preferred Shares ("AMPS") are Preferred Shares 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, 1994 was 3.20%.
In connection with the offering of AMPS, the Fund reclassified
550 shares of unissued capital as AMPS. For the year ended October
31, 1994, there were 550 AMPS authorized, issued and outstanding
with a liquidation preference of $50,000 per share, plus accumulated
and unpaid dividends of $17,862. Effective December 1, 1994, as a
result of a two-for-one stock split, there will be 1,100 AMPS Shares
with a liquidation preference of $25,000 per share.
The Fund pays commissions to certain broker-dealers at the end of
each auction at the annual rate ranging from 0.25% to 0.375%
calculated on the proceeds of each auction. For the year ended October
31, 1994, MLPF&S, an affiliate of Merrill Lynch Investment
Management, Inc., earned $9,895 as commissions.
5. Capital Loss Carryforward:
At October 31, 1994, the Fund had a capital loss carryforward of
approximately $4,474,000, all of which expires in 2002. This amount
will be available to offset like amounts of any future taxable gains.
6. Subsequent Event:
On November 8, 1994, the Fund's Board of Trustees declared an ordinary
income dividend to Common Shareholders in the amount of $.067273
per share, payable on November 29, 1994 to shareholders of record
as of November 18, 1994.
<PAGE>
<AUDIT-REPORT>
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders,
MuniVest Pennsylvania Insured Fund:
We have audited the accompanying statement of assets, liabilities
and capital, including the schedule of investments, of MuniVest
Pennsylvania Insured Fund as of October 31, 1994, the related state-
ments of operations for the year then ended and changes in net
assets for the year then ended and the period July 30, 1993 (com-
mencement of operations) to October 31, 1993, and the financial
highlights for the year then ended and for the period July 30, 1993
(commencement of operations) to October 31, 1993. These financial
statements and the financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and the financial highlights based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and per-
form the audit to obtain reasonable assurance about whether the
financial statements and the financial highlights are free of mate-
rial misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities
owned at October 31, 1994 by correspondence with the custodian
and brokers. An audit also includes assessing the accounting prin-
ciples 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, such financial statements and financial highlights
present fairly, in all material respects, the financial position of
MuniVest Pennsylvania Insured Fund as of October 31, 1994, the
results of its operations, the changes in its net assets, and the
financial highlights for the respective stated periods in conformity
with generally accepted accounting principles.
Deloitte & Touche LLP
Princeton, New Jersey
December 6, 1994
</AUDIT-REPORT>
<PAGE>
<TABLE>
IMPORTANT TAX INFORMATION (unaudited)
All of the net investment income distributions paid monthly by
MuniVest Pennsylvania Insured Fund during its taxable year ended
October 31, 1994, qualify as tax-exempt interest dividends for
Federal income tax purposes. Additionally, the following table
summarizes the per share capital gain distributions paid by the
Fund during the year:
<CAPTION>
Payable Short-Term Long-Term
Date Capital Gains Capital Gains
<S> <C> <C> <C>
Common Shareholders 12/30/93 $ 0.058631 --
Preferred Shareholders--Series A 12/01/93 $64.63 --
Please retain this information for your records.
</TABLE>
<TABLE>
PER SHARE INFORMATION (unaudited)
Per Share
Selected Quarterly
Financial Data*
<CAPTION>
Net Realized Unrealized Dividends/Distributions
Investment Gains Gains Net Investment Income Capital Gains
For the Period Income (Losses) (Losses) Common Preferred Common Preferred
<S> <C> <C> <C> <C> <C> <C> <C>
July 30, 1993++ to October 31, 1993 $.25 $ .07 $ .57 $.13 $.03 -- --
November 1, 1993 to January 31, 1994 .27 .03 .13 .22 .05 $.06 $.01
February 1, 1994 to April 30, 1994 .26 (.46) (1.93) .22 .05 -- --
May 1, 1994 to July 31, 1994 .26 (.28) .54 .21 .05 -- --
August 1, 1994 to October 31, 1994 .26 (.46) (.65) .21 .05 -- --
<CAPTION>
Net Asset Value Market Price**
For the Period High Low High Low Volume***
<S> <C> <C> <C> <C> <C>
July 30, 1993++ to October 31, 1993 $15.04 $14.16 $15.375 $14.75 177
November 1, 1993 to January 31, 1994 14.80 14.06 15.50 14.375 175
February 1, 1994 to April 30, 1994 14.74 11.71 15.375 12.625 256
May 1, 1994 to July 31, 1994 13.04 12.03 13.25 11.875 274
August 1, 1994 to October 31, 1994 12.69 11.54 12.375 10.50 457
<PAGE>
<FN>
++Commencement of Operations.
*Calculations are based upon Common Shares outstanding at the end of the period.
**As reported in the consolidated transaction reporting system.
***In thousands.
</TABLE>
