MUNIVEST
PENNSYLVANIA
INSURED
FUND
FUND LOGO
Semi-Annual Report
April 30, 1998
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. Statements and other information herein are as dated
and are subject to change.
Officers and Trustees
Arthur Zeikel, President and Trustee
James H. Bodurtha, Trustee
Herbert I. London, Trustee
Robert R. Martin, Trustee
Joseph L. May, Trustee
Andre F. Perold, Trustee
Terry K. Glenn, Executive Vice President
Vincent R. Giordano, Senior Vice President
William R. Bock, Vice President
Donald C. Burke, Vice President
Kenneth A. Jacob, Vice President
Gerald M. Richard, Treasurer
Philip M. Mandel, Secretary
Transfer Agents
Common Shares:
The Bank of New York
101 Barclay Street
New York, NY 10286
Preferred Shares:
IBJ Schroder Bank &Trust Company
One State Street
New York, NY 10004
Custodian
The Bank of New York
90 Washington Street
New York, NY 10286
NYSE Symbol
MVP
MuniVest Pennsylvania
Insured Fund
Box 9011
Princeton, NJ
08543-9011
Printed on post-consumer recycled paper
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
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 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. Of course, increases in
short-term interest rates would reduce (and even eliminate) the
dividends on the Common Shares.
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 pickup on the
Common Shares will be reduced or eliminated completely. 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.
Managed Dividend
Policy
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 Common Shares 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.
MuniVest Pennsylvania Insured Fund, April 30, 1998
DEAR SHAREHOLDER
For the six-month period ended April 30, 1998, the Common Shares of
MuniVest Pennsylvania Insured Fund earned $0.351 per share income
dividends, which included earned and unpaid dividends of $0.057.
This represents a net annualized yield of 5.34%, based on a month-
end per share net asset value of $13.23. Over the same period, the
total investment return on the Fund's Common Shares was +2.44%,
based on a change in per share net asset value from $13.28 to
$13.23, and assuming reinvestment of $0.357 per share income
dividends.
For the six-month period ended April 30, 1998, the Fund's Auction
Market Preferred Shares had an average yield of 3.56%.
The Municipal Market
Environment
During the six months ended April 30, 1998, bond yields generally
moved lower, and by mid-January 1998 had declined to recent historic
lows. Long-term US Treasury bond yields declined 20 basis points
(0.20%) during the same period and stood at 5.95% by April 30, 1998.
Similarly, long-term uninsured tax-exempt bond yields, as measured
by the Bond Buyer Revenue Bond Index, fell approximately 35 basis
points to 5.25%, a level not seen since the mid-1970s. While low
inflation has supported lower interest rates, much of the decline in
bond yields in late 1997 and early 1998 was driven more by the
turmoil in Asian financial markets than by domestic economic
fundamentals. Weak economic conditions in Asia were expected to
negatively impact US growth through reduced export demand.
Additionally, inflation in the United States was also expected to
decline in response to lower prices on goods imported from Asian
manufacturers.
However, in recent months, many investors have become increasingly
concerned that most of the downturn in Asia, especially in Japan,
has already occurred and any future deterioration will not be severe
enough to constrain US economic growth and inflationary pressures.
These concerns served to push interest rates higher in the latter
part of the period, causing fixed-income yields to retrace much of
their earlier gains.
Thus far in 1998, the municipal bond market has experienced
unexpectedly strong supply pressures. These supply pressures have
prevented tax-exempt bond yields from declining as much as US
Treasury bond yields. Over the last six months, more than $135
billion in new tax-exempt bonds were underwritten, an increase of
over 40% compared to the same period a year ago. During the last
three months, municipalities issued over $72 billion in new
securities, an increase of more than 60% compared to the same three-
month period in 1997. Additionally, corporate issuers have also
viewed current interest rate levels as an opportunity to issue
significant amounts of taxable securities. Thus far in 1998, over
$100 billion in investment-grade corporate bonds have been
underwritten, an increase of more than 60% relative to the
comparable period a year ago. This sizeable corporate bond issuance
has tended to support generally higher fixed-income yields and
reduce the demand for tax-exempt bonds.
However, the recent pace of new municipal bond issuance is unlikely
to be maintained. Continued increases in bond issuance will require
lower and lower tax-exempt bond yields to generate the economic
savings necessary for additional municipal bond refinancing.
Preliminary estimates for 1998 total municipal bond issuance are
presently in the $200 billion--$225 billion range. These estimates
suggest that recent supply pressures are likely to abate later in
the year. Municipal bond investors received approximately $30
billion earlier this year in coupon payments, bond maturities and
proceeds from early redemptions. The demand generated by these
assets has helped offset the increase in supply seen thus far this
year. Furthermore, looking ahead, June and July have also tended to
be periods of strong investor demand as seasonal factors are likely
to generate strong income flows similar to those seen earlier this
year.
It is also possible that at least some of the recent economic
strength seen in the United States will be reversed in the coming
months. A particularly mild winter has been partially responsible
for a strong housing sector, as well as other construction
industries. This recent strong trend may not be sustained and may
lead to weaker construction growth later this year. Additionally,
strong economic growth in 1997 and the increased use of electronic
tax filing have resulted in larger and earlier Federal and state
income tax refunds to many individuals. These refunds appear to have
supported strong consumer spending in recent months, but may be
borrowing against weaker spending later this year. In addition, the
continued impact of the Asian financial crisis on the US domestic
economy's future growth remains unclear. Barring a dramatic and
unexpected resurgence of domestic inflation, we do not believe that
the Federal Reserve Board will be willing to raise interest rates
until the full impact of the Asian situation can be established.
All these factors suggest that over the near term, tax-exempt as
well as taxable bond yields are unlikely to rise by any appreciable
amount. Recent supply pressures have caused municipal bond yield
ratios to rise relative to US Treasury bond yields. At April 30,
1998, long-term tax-exempt bond yields were at attractive yield
ratios relative to comparable US Treasury securities (over 90%), and
well in excess of their expected range of 85%--88%. Any further
pressure upon the municipal market may well represent a very
attractive investment opportunity.
Portfolio Strategy
During the six-month period ended April 30, 1998, we continued to
follow the portfolio strategy that we had adopted during the prior
six-month period. At that time, our outlook was constructive toward
the municipal market because we believed any risk was biased toward
lower rather than higher interest rates. Therefore, we followed a
more aggressive investment strategy. We have essentially maintained
a fully invested position since that time and have kept cash
reserves at a minimum in an effort to enhance the Fund's dividend
and capital appreciation potential.
Looking ahead, we expect to remain fully invested during the next
several months. We will continue to monitor economic data for any
signs of inflationary pressure or economic downturn so that we can
modify our portfolio strategy in an effort to seek to preserve the
Fund's capital or enhance total return.
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
Senior Vice President
(William R. Bock)
William R. Bock
Vice President and Portfolio Manager
May 29, 1998
Quality
Profile
The quality ratings of securities in the Fund as of April 30, 1998
were as follows:
Percent of
S&P Rating/Moody's Rating Net Assets
AAA/Aaa 82.1%
AA/Aa 4.6
BBB/Baa 7.6
Other++ 6.6
[FN]
++Temporary investments in short-term municipal securities.
MuniVest Pennsylvania Insured Fund, April 30, 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>
Pennsylvania-- AAA Aaa $ 2,255 Allegheny County, Pennsylvania, Hospital Development
100.9% Authority, Health Center Revenue Refunding Bonds (UPMC
Health System), Series A, 4.50% due 8/01/2015 (b) $ 2,036
BBB- Baa3 1,670 Allegheny County, Pennsylvania, IDA, Revenue Refunding Bonds
(Environmental Improvement--USX Corporation), 5.60% due 9/01/2030 1,648
AAA Aaa 1,500 Allegheny County, Pennsylvania, Sanitation Authority, Sewer
Revenue Bonds, RITR, Series 20, 6.37% due 12/01/2024 (b)(g) 1,513
AAA Aaa 1,600 Altoona, Pennsylvania, City Authority, Water Revenue Bonds,
Series A, 6.50% due 11/01/2004 (c)(e) 1,809
AAA Aaa 2,550 Berks County, Pennsylvania, Refunding, Series 1995, 5.85%
due 11/15/2018 (c) 2,662
AAA Aaa 1,000 Bethlehem, Pennsylvania, Area School District, UT, 6% due
3/01/2006 (b)(e) 1,095
AAA Aaa 2,550 Blair County, Pennsylvania, Hospital Authority Revenue
Bonds (Altoona Hospital Project), 6.375% due 7/01/2013 (d) 2,744
AAA Aaa 1,000 Bucks County, Pennsylvania, IDA, Revenue Refunding Bonds
(Grand View Hospital), Series A, 5.25% due 7/01/2021 (d) 974
AAA Aaa 2,500 Butler, Pennsylvania, Area School District, Refunding, UT,
Series B, 4.75% due 10/01/2022 (c) 2,287
BBB+ NR* 1,500 Cumberland County, Pennsylvania, Municipal Authority Revenue
Bonds (Presbyterian Homes Inc. Project), 6% due 12/01/2026 1,560
Delaware County, Pennsylvania, IDA, PCR:
A1+ P1 2,300 (BP Oil Inc. Project), UPDATES, 4.15% due 12/01/2009 (a) 2,300
AAA Aaa 2,000 (Philadelphia Electric Company Project), Series A, 7.375%
due 4/01/2021 (d) 2,176
NR* Aaa 2,000 Delaware County, Pennsylvania, University Authority Revenue
Bonds (Villanova University), Series A, 5% due 12/01/2028 (b) 1,895
NR* Aaa 1,175 Franklin County, Pennsylvania, IDA, Hospital Revenue Refunding
Bonds (The Chambersburg Hospital), 5% due 7/01/2022 (d) 1,110
A1+ NR* 1,300 Geisinger, Pennsylvania, Health Systems Authority Revenue
Bonds, VRDN, Series B, 4.15% due 7/01/2022 (a) 1,300
AAA Aaa 1,750 Hampton Township, Pennsylvania, School District, GO, UT,
6.75% due 11/15/2004 (d)(e) 1,977
AAA Aaa 3,280 Johnstown, Pennsylvania, Refunding, UT, 6.45% due 10/01/2019 (c) 3,587
AAA Aaa 3,000 Lehigh County, Pennsylvania, General Purpose Authority Revenue
Bonds (Saint Luke's Hospital of Bethlehem), 6.25% due 7/01/2022 (d) 3,224
AAA Aaa 3,000 Lehigh County, Pennsylvania, IDA, PCR, Refunding (Pennsylvania
Power and Light Company Project), Series A, 6.40% due
11/01/2021 (b) 3,260
NR* Aaa 1,250 Lower Merion Township, Pennsylvania, School District, UT,
5% due 5/15/2023 1,193
AAA Aaa 3,000 Luzerne County, Pennsylvania, IDA, Exempt Facilities Revenue
Refunding Bonds (Pennsylvania Gas and Water Company Project),
AMT, Series A, 7% due 12/01/2017 (d) 3,376
AAA Aaa 3,000 North Penn, Pennsylvania, Water Authority, Water Revenue Bonds,
7% due 11/01/2004 (c)(e) 3,449
AAA Aaa 1,000 Northeastern, Pennsylvania, Hospital and Education Authority,
College Revenue Guaranteed Bonds (Luzerne County Community
College), 6.625% due 2/15/2005 (d)(e) 1,121
BBB Baa3 2,500 Pennsylvania Economic Development Financing Authority,
Wastewater Treatment Revenue Bonds (Sun Company Inc.--
R & M Project), AMT, Series A, 7.60% due 12/01/2024 2,905
Pennsylvania HFA, S/F Mortgage, AMT:
AA+ Aa2 1,000 Refunding, Series 60A, 5.85% due 10/01/2027 1,027
AA+ Aa 2,500 Series 39B, 6.875% due 10/01/2024 2,692
AAA Aaa 4,000 Pennsylvania State Higher Education Assistance Agency, Student
Loan Revenue Bonds, AMT, Series C, 7.15% due 9/01/2021 (d) 4,326
Philadelphia, Pennsylvania, Hospitals and Higher Education
Facilities Authority Revenue Bonds, Series A:
A1+ VMIG1++ 500 Hospital (Children's Hospital of Philadelphia Project),
VRDN, 4.15% due 3/01/2027 (a) 500
AAA Aaa 3,000 (Jefferson Health System), 5.125% due 5/15/2018 (d) 2,896
AAA Aaa 5,125 Philadelphia, Pennsylvania, Industrial Development Lease
Authority Revenue Bonds, Series A, 5.375% due 2/15/2027 (b) 5,135
Philadelphia, Pennsylvania, Water and Wastewater Revenue Bonds:
AAA Aaa 1,000 Refunding, 5% due 6/15/2019 (b) 957
AAA Aaa 2,000 Series A, 5% due 8/01/2017 (d) 1,926
AAA Aaa 4,000 Pittsburgh, Pennsylvania, Water and Sewer Authority, Water
and Sewer System Revenue Bonds, Series C, 5.05% due 9/01/2025 (f) 3,834
A1+ NR* 1,200 Schuylkill County, Pennsylvania, IDA, Resource Recovery Revenue
Refunding Bonds (Northeastern Power Company), VRDN, Series A,
4.10% due 12/01/2022 (a) 1,200
AAA Aaa 2,525 Southeastern, Pennsylvania, Transportation Authority Special
Revenue Bonds, 5.375% due 3/01/2022 (c) 2,530
AAA Aaa 3,375 University of Pittsburgh, Pennsylvania, Commonwealth System of
Higher Education (Pennsylvania University Capital Projects),
5.125% due 6/01/2027 (c) 3,259
Total Investments (Cost--$77,658)--100.9% 81,483
Liabilities in Excess of Other Assets--(0.9%) (722)
-------
Net Assets--100.0% $80,761
=======
<FN>
(a)The interest rate is subject to change periodically based upon
prevailing market rates. The interest rate shown is the rate in
effect at April 30, 1998.
(b)MBIA Insured.
(c)FGIC Insured.
(d)AMBAC Insured.
(e)Prerefunded.
(f)FSA Insured.
(g)The interest rate is subject to change periodically and inversely
based upon prevailing market rates. The interest rate shown is the
rate in effect at April 30, 1998.
*Not Rated.
++Highest short-term rating by Moody's Investors Service, Inc.
See Notes to Financial Statements.
</TABLE>
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 below and at right.
AMT Alternative Minimum Tax (subject to)
GO General Obligation Bonds
HFA Housing Finance Agency
IDA Industrial Development Authority
PCR Pollution Control Revenue Bonds
RITR Residual Interest Trust Receipts
S/F Single-Family
UPDATES Unit Priced Demand Adjustable Tax-Exempt Securities
UT Unlimited Tax
VRDN Variable Rate Demand Notes
MuniVest Pennsylvania Insured Fund, April 30, 1998
<TABLE>
STATEMENT OF ASSETS, LIABILITIES AND CAPITAL
<CAPTION>
As of April 30, 1998
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$77,658,274) (Note 1a) $ 81,482,836
Cash 59,941
Interest receivable 1,260,825
Deferred organization expenses (Note 1e) 9,502
Prepaid expenses and other assets 5,767
------------
Total assets 82,818,871
------------
Liabilities: Payables:
Securities purchased $ 1,908,964
Dividends to shareholders (Note 1f) 60,647
Investment adviser (Note 2) 33,580 2,003,191
------------
Accrued expenses and other liabilities 54,995
------------
Total liabilities 2,058,186
------------
Net Assets: Net assets $ 80,760,685
============
Capital: Capital Shares (unlimited number of shares authorized) (Note 4):
Preferred Shares, par value $.05 per share (1,100 shares of
AMPS* issued and outstanding at $25,000 per share liquidation
preference) $ 27,500,000
Common Shares, par value $.10 per share (4,024,856 shares
issued and outstanding) $ 402,486
Paid-in capital in excess of par 55,795,641
Undistributed investment income--net 256,478
Accumulated realized capital losses on investments--net (Note 5) (7,018,482)
Unrealized appreciation on investments--net 3,824,562
------------
Total--Equivalent to $13.23 net asset value per Common Share
(market price--$12.4375) 53,260,685
------------
Total capital $ 80,760,685
============
<FN>
*Auction Market Preferred Shares.
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENT OF OPERATIONS
For the Six Months Ended April 30, 1998
<S> <S> <C> <C>
Investment Interest and amortization of premium and discount earned $ 2,224,595
Income (Note 1d):
Expenses: Investment advisory fees (Note 2) $ 200,419
Professional fees 37,678
Commission fees (Note 4) 36,274
Accounting services (Note 2) 22,688
Transfer agent fees 15,752
Trustees' fees and expenses 11,898
Listing fees 8,405
Printing and shareholder reports 7,617
Custodian fees 3,655
Pricing fees 3,096
Amortization of organization expenses (Note 1e) 1,615
Other 7,408
------------
Total expenses 356,505
------------
Investment income--net 1,868,090
------------
Realized & Realized gain on investments--net 1,536,786
Unrealized Gain Change in unrealized appreciation on investments--net (1,685,201)
(Loss) on ------------
Investments--Net Net Increase in Net Assets Resulting from Operations $ 1,719,675
(Notes 1b, ============
1d & 3):
See Notes to Financial Statements.
</TABLE>
MuniVest Pennsylvania Insured Fund, April 30, 1998
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
For the Six For the Year
Months Ended Ended
April 30, October 31,
Increase (Decrease) in Net Assets: 1998 1997
<S> <S> <C> <C>
Operations: Investment income--net $ 1,868,090 $ 3,795,012
Realized gain on investments--net 1,536,786 480,878
Change in unrealized appreciation on investments--net (1,685,201) 1,891,454
------------ ------------
Net increase in net assets resulting from operations 1,719,675 6,167,344
------------ ------------
Dividends to Investment income--net:
Shareholders Common Shares (1,435,171) (2,840,678)
(Note 1f): Preferred Shares (479,820) (920,337)
------------ ------------
Net decrease in net assets resulting from dividends
to shareholders (1,914,991) (3,761,015)
------------ ------------
Net Assets: Total increase (decrease) in net assets (195,316) 2,406,329
Beginning of period 80,956,001 78,549,672
------------ ------------
End of period* $ 80,760,685 $ 80,956,001
------------ ------------
<FN>
*Undistributed investment income--net $ 256,478 $ 303,379
============ ============
See Notes to Financial Statements.
</TABLE>
<TABLE>
FINANCIAL HIGHLIGHTS
<CAPTION>
The following per share data and ratios For the Six
have been derived from information provided Months
in the financial statements. Ended
April 30, 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 period $ 13.28 $ 12.68 $ 12.91 $ 11.54 $ 14.70
Operating -------- -------- -------- -------- --------
Performance: Investment income--net .46 .95 .97 1.01 1.05
Realized and unrealized gain (loss) on
investments--net (.03) .59 (.23) 1.37 (3.08)
-------- -------- -------- -------- --------
Total from investment operations .43 1.54 .74 2.38 (2.03)
-------- -------- -------- -------- --------
Less dividends and distributions to Common
Shareholders:
Investment income--net (.36) (.71) (.73) (.75) (.86)
Realized gain on investments--net -- -- -- -- (.06)
-------- -------- -------- -------- --------
Total dividends and distributions to Common
Shareholders (.36) (.71) (.73) (.75) (.92)
-------- -------- -------- -------- --------
Effect of Preferred Share activity:
Dividends and distributions to Preferred
Shareholders:
Investment income--net (.12) (.23) (.24) (.26) (.20)
Realized gain on investments--net -- -- -- -- (.01)
-------- -------- -------- -------- --------
Total effect of Preferred Share activity (.12) (.23) (.24) (.26) (.21)
-------- -------- -------- -------- --------
Net asset value, end of period $ 13.23 $ 13.28 $ 12.68 $ 12.91 $ 11.54
======== ======== ======== ======== ========
Market price per share, end of period $12.4375 $ 12.25 $ 11.625 $ 11.875 $ 10.875
======== ======== ======== ======== ========
Total Investment Based on market price per share 4.40%+++ 11.80% 3.98% 16.58% (22.20%)
Return:** ======== ======== ======== ======== ========
Based on net asset value per share 2.44%+++ 11.12% 4.32% 19.44% (15.76%)
======== ======== ======== ======== ========
Ratios to Average Expenses, net of reimbursement .89%* .88% .90% .83% .51%
Net Assets:*** ======== ======== ======== ======== ========
Expenses .89%* .88% .90% .95% .86%
======== ======== ======== ======== ========
Investment income--net 4.66%* 4.77% 4.91% 5.33% 5.24%
======== ======== ======== ======== ========
Supplemental Net assets, net of Preferred Shares,
Data: end of period (in thousands) $ 53,261 $ 53,456 $ 51,050 $ 51,867 $ 46,390
======== ======== ======== ======== ========
Preferred Shares outstanding, end of
period (in thousands) $ 27,500 $ 27,500 $ 27,500 $ 27,500 $ 27,500
======== ======== ======== ======== ========
Portfolio turnover 35.51% 61.03% 113.65% 73.19% 93.00%
======== ======== ======== ======== ========
Leverage: Asset coverage per $1,000 $ 2,937 $ 2,944 $ 2,856 $ 2,886 $ 2,687
======== ======== ======== ======== ========
Dividends Investment income--net $ 436 $ 837 $ 879 $ 966 $ 721
Per Share on ======== ======== ======== ======== ========
Preferred Shares
Outstanding:++
<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.
***Do not reflect the effect of dividends to Preferred Shareholders.
++Dividends per share have been adjusted to reflect a two-for-one
stock split that occurred on December 1, 1994.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
MuniVest Pennsylvania Insured Fund, April 30, 1998
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. 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 Shares on a weekly basis. 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.
(a) Valuation of investments--Municipal bonds are traded primarily
in the over-the-counter markets and are valued at the most recent
bid price or yield equivalent as obtained by the Fund's pricing
service from dealers that make markets in such securities. Financial
futures contracts and options thereon, which are traded on
exchanges, are valued at their closing prices as of the close of
such exchanges. Options, which are traded on exchanges, are valued
at their last sale price as of the close of such exchanges or,
lacking any sales, at the last available bid price. Securities with
remaining maturities of sixty days or less are valued at amortized
cost, which approximates market value. Securities 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, 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 Trustees.
(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 five-year period.
(f) Dividends and distributions--Dividends from net investment
income are declared and paid monthly. Distributions of capital gains
are recorded on the ex-dividend dates.
2. Investment Advisory Agreement and Transactions
with Affiliates:
The Fund has entered into an Investment Advisory Agreement with Fund
Asset Management, L.P. ("FAM"). The general partner of FAM is
Princeton Services, Inc. ("PSI"), an indirect wholly-owned
subsidiary of Merrill Lynch & Co., Inc. ("ML & Co."), which is the
limited partner.
FAM is responsible for the management of the Fund's portfolio and
provides the necessary personnel, facilities, equipment and certain
other services necessary to the operations of the Fund. For such
services, the Fund pays a monthly fee at an annual rate of 0.50% of
the Fund's average weekly net assets, including proceeds from the
issuance of Preferred Shares.
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, PSI, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the six months ended April 30, 1998 were $27,396,092 and
$30,325,730, respectively.
Net realized gains for the six months ended April 30, 1998 and
unrealized gains as of April 30, 1998 were as follows:
Realized Unrealized
Gains Gains
Long-term investments $ 1,536,786 $ 3,824,562
------------- ------------
Total $ 1,536,786 $ 3,824,562
============= ============
As of April 30, 1998, net unrealized appreciation for Federal income
tax purposes aggregated $3,824,562, of which $4,257,153 related to
appreciated securities and $432,591 related to depreciated
securities. The aggregate cost of investments at April 30, 1998 for
Federal income tax purposes was $77,658,274.
4. Capital Shares Transactions:
The Fund is authorized to issue an unlimited number of shares of
beneficial interest, including Preferred Shares, par value $.10 per
share, all of which were initially classified as Common Shares. The
Board of Trustees is authorized, however, to reclassify any unissued
shares of capital without approval of the holders of Common Shares.
Common Shares
Shares issued and outstanding during the six months ended April 30,
1998 and the year ended October 31, 1997 remained constant.
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 April 30, 1998 was 4.10%.
As of April 30, 1998, there were 1,100 AMPS authorized, issued and
outstanding with a liquidation preference of $25,000 per share.
The Fund pays commissions to certain broker-dealers at the end of
each auction at an annual rate ranging from 0.25% to 0.375%,
calculated on the proceeds of each auction. For the six months ended
April 30, 1998, Merrill Lynch, Pierce, Fenner & Smith Inc., an
affiliate of FAM, earned $46,499 as commissions.
5. Capital Loss Carryforward:
At October 31, 1997, the Fund had a net capital loss carryforward of
approximately $8,129,000, of which $4,058,000 expires in 2002,
$3,117,000 expires in 2003 and $954,000 expires in 2004. This amount
will be available to offset like amounts of any future taxable
gains.
6. Subsequent Event:
On May 7, 1998, the Fund's Board of Trustees declared an ordinary
income dividend to Common Shareholders in the amount of $.056704 per
share, payable on May 28, 1998 to shareholders of record as of May
21, 1998.
