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<PAGE> PAGE 4
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SIGNATURE JULIAN SLUYTERS
TITLE TREASURER
<TABLE> <S> <C>
<ARTICLE> 6
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUL-31-1996
<PERIOD-END> JUL-31-1996
<INVESTMENTS-AT-COST> 82,195
<INVESTMENTS-AT-VALUE> 79,653
<RECEIVABLES> 1,255
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<OTHER-ITEMS-ASSETS> 70
<TOTAL-ASSETS> 80,988
<PAYABLE-FOR-SECURITIES> 1,000
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<TOTAL-LIABILITIES> 1,084
<SENIOR-EQUITY> 0
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<SHARES-COMMON-STOCK> 6,032
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<OVERDISTRIBUTION-NII> (1)
<ACCUMULATED-NET-GAINS> (8,028)
<OVERDISTRIBUTION-GAINS> 0
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<NET-ASSETS> 79,904
<DIVIDEND-INCOME> 7
<INTEREST-INCOME> 8,743
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<EXPENSES-NET> (981)
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<REALIZED-GAINS-CURRENT> 1,035
<APPREC-INCREASE-CURRENT> (2,049)
<NET-CHANGE-FROM-OPS> 6,755
<EQUALIZATION> 0
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<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
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<SHARES-REINVESTED> 0
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<ACCUMULATED-NII-PRIOR> 171
<ACCUMULATED-GAINS-PRIOR> (9,072)
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<GROSS-ADVISORY-FEES> 720
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<PER-SHARE-NAV-BEGIN> 13.44
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</TABLE>
Board of Directors
Managed High Yield Fund Inc.
In planning and performing our audit of the financial statements of
Managed High Yield Fund Inc. for the year ended July 31, 1996, we
considered its internal control structure, including procedures for
safeguarding securities, in order to determine our auditing procedures
for the purpose of expressing our opinion on the financial statements
and to comply with the requirements of Form N-SAR, not to provide
assurance on the internal control structure.
The management of Managed High Yield Fund Inc. is responsible for
establishing and maintaining an internal control structure. In
fulfilling this responsibility, estimates and judgments by management
are required to assess the expected benefits and related costs of internal
control structure policies and procedures. Two of the objectives of an
internal control structure are to provide management with reasonable, but
not absolute, assurance that assets are safeguarded against loss from
unauthorized use or disposition and that transactions are executed in
accordance with management's authorization and recorded properly to permit
preparation of financial statements in conformity with generally accepted
accounting principles.
Because of inherent limitations in any internal control structure, errors or
irregularities may occur and not be detected. Also, projection of any
evaluation of the structure to future periods is subject to the risk that it
may become inadequate because of changes in conditions or that the
effectiveness of the design and operation may deteriorate.
Our consideration of the internal control structure would not necessarily
disclose all matters in the internal control structure that might be material
weaknesses under standards established by the American Institute of Certified
Public Accountants. A material weakness is a condition in which the design or
operation of the specific internal control structure elements does not reduce
to a relatively low level the risk that errors or irregularities in amounts
that would be material in relation to the financial statements being audited
may occur and not be detected within a timely period by employees in the
normal course of performing their assigned functions. However, we noted no
matters involving the internal control structure, including procedures for
safeguarding securities, that we consider to be material weaknesses as defined
above as of July 31, 1996.
This report is intended solely for the information and use of management and
the Securities and Exchange Commission.
ERNST & YOUNG LLP
September 11, 1996
For period ending July 31, 1996 Attachment 77C
File Number 811-7804
Managed High Yield Fund, Inc.
A special meeting of shareholders was held on April 11, 1996, at which the
following proposals were approved:
To vote for or against the following changes to the Fund's fundamental
investment restrictions and policies:
Shares
Shares Voted Voted Shares
For Against Abstain
------------ ------- -------
Modification of Fundamental Restriction on
Portfolio Diversification: 2,328,083 45,634 159,257
Modification of Fundamental Restriction on
Concentration: 2,326,573 47,533 158,868
Modification of Fundamental Restriction on
Senior Securities and Borrowing: 2,327,730 45,620 159,624
Modification of Fundamental Restriction on
Making Loans: 2,321,525 47,413 164,036
Modification of Fundamental Restriction on
Underwriting Securities: 2,334,450 46,711 151,813
Modification of Fundamental Restriction on
Real Estate Investments: 2,331,734 43,481 157,759
Modification of Fundamental Restriction on
Investing in Commodities: 2,316,028 58,399 158,547
Elimination of Fundamental Restriction on
Pledging Portfolio Securities: 2,307,357 60,401 165,216
Elimination of Fundamental Restriction on
Margin Transactions: 2,301,912 61,005 170,057
Elimination of Fundamental Restriction on
Short Sales: 2,306,062 66,489 160,423
Elimination of Fundamental Restriction on
Investments in Oil, Gas and Mineral Leases
and Programs: 2,321,676 54,993 156,306
In addition to the item noted above, the Fund's shareholders elected
board members. Pursuant to Instruction 2 of Sub-Item 77C of Form N-SAR, it is
not necessary to provide in this exhibit details concerning shareholder action
on this proposal since there were no solicitations in opposition to the
registrant's nominees and all of the nominees were elected.
A more complete description of the proposal referred to above is hereby
incorporated by reference to the Fund's proxy materials relating to the Special
Meeting of Shareholders dated February 28, 1996. These Schedule 14A materials
were filed with the Securities and Exchange Commission via EDGAR on February
29, 1996; the accession code number was 0000950112-96-000633.
For period ending July 31, 1996 Attachment 77D
File Number 811-7804
Managed High Yield Fund, Inc.
At a meeting of the Fund's Board of Directors held on February 29, 1996,
the Board voted to permit the Fund to invest up to 35% of its net assets in
securities of foreign issuers, an increase from the then current limit of 25%,
with no more than 10% of its net assets in securities of foreign issuers that
are denominated in currencies other than the U.S. dollar.
For period ending July 31, 1996 Exhibit 77Q(2)
File Number 811-7804
Managed High Yield Fund Inc.
A Form 3 was filed late by the following officer as required by Section 16(a) of
the Exchange Act during the most recent or prior fiscal years.
Number of Number of Transactions Not
Name Position with Fund Late Reports* Reported on Timely Basis
---- ------------------ ------------ --------------------------
Gigi L. Capes Vice President & 1 0
Assistant Treasurer
- --------------
* Each report related solely to such person having been elected an officer of
the Fund.
