UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-5611
Name of Fund: MuniVest Fund, Inc.
Fund Address: P.O. Box 9011
Princeton, NJ 08543-9011
Name and address of agent for service: Terry K. Glenn, President, MuniVest Fund,
Inc., 800 Scudders Mill Road, Plainsboro, NJ 08536. Mailing address:
P.O. Box 9011, Princeton, NJ 08543-9011
Registrant's telephone number, including area code: (609) 282-2800
Date of fiscal year end: 08/31/03
Date of reporting period: 09/01/02 - 2/28/03
Item 1 - Attach shareholder report
[LOGO] Merrill Lynch Investment Managers
Semi-Annual Report
February 28, 2003
MuniVest
Fund, Inc.
www.mlim.ml.com
MUNIVEST FUND, INC.
The Benefits and
Risks of
Leveraging
MuniVest Fund, Inc. utilizes leveraging to seek to enhance the yield and net
asset value of its Common Stock. However, these objectives cannot be achieved in
all interest rate environments. To leverage, the Fund issues Preferred Stock,
which pays dividends at prevailing short-term interest rates, and invests the
proceeds in long-term municipal bonds. The interest earned on these investments
is paid to Common Stock shareholders in the form of dividends, and the value of
these portfolio holdings is reflected in the per share net asset value of the
Fund's Common Stock. However, in order to benefit Common Stock shareholders, the
yield curve must be positively sloped; that is, short-term interest rates must
be lower than long-term interest rates. At the same time, a period of generally
declining interest rates will benefit Common Stock shareholders. If either of
these conditions change, then the risks of leveraging will begin to outweigh the
benefits.
To illustrate these concepts, assume a fund's Common Stock capitalization of
$100 million and the issuance of Preferred Stock for an additional $50 million,
creating a total value of $150 million available for investment in long-term
municipal bonds. If prevailing short-term interest rates are approximately 3%
and long-term interest rates are approximately 6%, the yield curve has a
strongly positive slope. The fund pays dividends on the $50 million of Preferred
Stock based on the lower short-term interest rates. At the same time, the fund's
total portfolio of $150 million earns the income based on long-term interest
rates. Of course, increases in short-term interest rates would reduce (and even
eliminate) the dividends on the Common Stock.
In this case, the dividends paid to Preferred Stock shareholders are
significantly lower than the income earned on the fund's long-term investments,
and therefore the Common Stock shareholders are the beneficiaries of the
incremental yield. However, if short-term interest rates rise, narrowing the
differential between short-term and long-term interest rates, the incremental
yield pickup on the Common Stock will be reduced or eliminated completely. At
the same time, the market value of the fund's Common Stock (that is, its price
as listed on the American Stock Exchange), may, as a result, decline.
Furthermore, if long-term interest rates rise, the Common Stock's net asset
value will reflect the full decline in the price of the portfolio's investments,
since the value of the fund's Preferred Stock does not fluctuate. In addition to
the decline in net asset value, the market value of the fund's Common Stock may
also decline.
As a part of its investment strategy, the Fund may invest in certain securities
whose potential income return is inversely related to changes in a floating
interest rate ("inverse floaters"). In general, income on inverse floaters will
decrease when short-term interest rates increase and increase when short-term
interest rates decrease. Investments in inverse floaters may be characterized as
derivative securities and may subject the Fund to the risks of reduced or
eliminated interest payments and losses of invested principal. In addition,
inverse floaters have the effect of providing investment leverage and, as a
result, the market value of such securities will generally be more volatile than
that of fixed-rate, tax-exempt securities. To the extent the Fund invests in
inverse floaters, the market value of the Fund's portfolio and the net asset
value of the Fund's shares may also be more volatile than if the Fund did not
invest in such securities.
Swap Agreements
The Fund may also invest in swap agreements, which are over-the-counter
contracts in which one party agrees to make periodic payments based on the
change in market value of a specified bond, basket of bonds, or index in return
for periodic payments based on a fixed or variable interest rate or the change
in market value of a different bond, basket of bonds or index. Swap agreements
may be used to obtain exposure to a bond or market without owning or taking
physical custody of securities.
MuniVest Fund, Inc., February 28, 2003
DEAR SHAREHOLDER
For the six months ended February 28, 2003, the Common Stock of MuniVest Fund,
Inc. had a net annualized yield of 6.42%, based on a period-end per share net
asset value of $9.86 and $.314 per share income dividends. Over the same period,
the total investment return on the Fund's Common Stock was +4.60%, based on a
change in per share net asset value from $9.76 to $9.86, and assuming
reinvestment of $.311 per share ordinary income dividends.
For the six-month period ended February 28, 2003, the Fund's Preferred Stock had
an average yield as follows: Series A, 1.16%; Series B, 1.34%; Series C, 1.31%;
Series D, 1.42%; and Series E, 1.23%.
The Municipal Market Environment
During the six-month period ended February 28, 2003, long-term fixed income
interest rates continued to move lower. As they had in 2002, declining U.S.
equity markets and escalating worldwide political tensions easily overshadowed
the incipient U.S. economic recovery, allowing bond yields to fall to recent
historical lows. Economic releases, such as national employment and purchasing
manager surveys, were generally weak early in the period. Additionally, at its
August 2002 meeting, the Federal Reserve Board indicated that concerns about
future economic weakness outweighed those of rising inflation. This signaled
that the Federal Reserve Board was more likely to continue to lower short-term
interest rates to boost economic activity rather than to raise them to reduce
inflationary pressures. These factors combined to generate a very favorable
fixed income environment in September 2002. The dramatic decline in equity
values during September also helped trigger a significant fixed income rally as
investors sought the safe-haven status of U.S. Treasury issues. By the end of
September, U.S. Treasury bond yields fell to 4.65%.
Bolstered by an unexpected decline in the national unemployment rate to 5.6% in
early October, U.S. equity markets staged a strong rally throughout much of the
month. The Standard & Poor's 500 (S&P 500) Index rose over 8% for October,
triggered by stronger-than-expected earnings reports from a large number of
companies, such as General Electric Company, International Business Machines
Corporation and Microsoft Corporation. As they have throughout most of the
period, bond prices traded in an inverse relationship to equity prices.
Consequently, as stocks rallied, bond yields rose in October, despite generally
weak economic releases. During October, the U.S. housing sector remained quite
robust, but retail sales and industrial production slowed. Fixed income bond
yields remained under pressure in November as U.S. equity markets continued to
strengthen. During November, the S&P 500 Index rose an additional 5.5%. Equity
prices were supported by further signs of U.S. economic recovery, especially
improving labor market activity. By the end of the third quarter, gross domestic
product growth was 4%, well above the second quarter 2002 rate of 1.3%.
Financial conditions were also strengthened by a larger-than-expected reduction
in short-term interest rates by the Federal Reserve Board in early November. The
Federal Funds target rate was lowered 50 basis points (.50%) to 1.25%, its
lowest level since the 1960s. Recent action by the Federal Reserve Board was
largely viewed as being taken to bolster the sputtering U.S. economic recovery.
Rebounding U.S. equity markets and the prospects for a more substantial U.S.
economic recovery pushed long-term U.S. Treasury yield levels to 5.10% by late
November.
However, over the past three months, softer equity prices and renewed investor
concerns about U.S. military action against Iraq and nuclear tensions in North
Korea again pushed bond prices higher. Reacting to disappointing holiday sales
and corporate managements' attempts to scale back analysts' expectation of
future earnings, the S&P 500 Index declined more than 8% during the last three
months. Fearing a U.S./Iraq military confrontation in early 2003, investors
again sought the safety of U.S. Treasury obligations. During February, U.S.
Treasury bond yields declined more than 25 basis points to end the period at
4.67%. Over the last six months, U.S. Treasury bond yields fell more than 25
basis points.
For the six-month period ended February 28, 2003, tax-exempt bond prices also
continued to rise. In recent months, municipal bond yields have declined in
response to the positive fixed income environment engendered by falling equity
valuations. Price advances in tax-exempt issues, however, have not been able to
keep pace with U.S. Treasury bond price improvement as municipal bonds cannot
offer foreign investors the safe-haven status U.S. Treasury obligations enjoy in
periods of economic and political instability. Additionally, tax-exempt bond
issuance increased dramatically in the last half of 2002, removing some of the
positive technical support the municipal bond market enjoyed earlier in the
year. At February 28, 2003, long-term municipal bond yields, as measured by the
Bond Buyer Revenue Bond Index, stood at 5.10%, a decline of approximately 15
basis points during the last six months.
A number of factors combined to generate consistently strong demand for
municipal bonds throughout the six-month period ended February 28, 2003.
Declining U.S. equity markets supported continued positive demand for tax-exempt
products as investors sought the relative security of fixed income issues. Also,
with tax-exempt money market rates near 1%, the demand for longer maturity
municipal issues has increased as investors have opted to buy longer maturity
issues rather than remain in cash reserves. Additionally, investors renewed
approximately $30 billion in January 2003 from bond maturities, coupon income
and proceeds from early redemptions. However, these positive demand factors have
not been totally able to offset the increase in tax-exempt new-issue supply that
has resulted in the underperformance seen in recent months. This price
underperformance served to make municipal bonds a particularly attractive
purchase relative to their taxable counterparts. Throughout most of the yield
curve, municipal bonds have been available for purchase at yields near or
exceeding those of comparable U.S. Treasury issues. Compared to their recent
historical averages of 82% - 88% of U.S. Treasury yields, municipal bond yield
ratios in their current 95% - 105% range are likely to prove attractive to
long-term investors.
Declining U.S. equity markets and escalating geopolitical pressures have
resulted in reduced economic activity and consumer confidence. Consequently,
fixed income bond yields have continued to decline to recent historic lows and
to levels that may not be supported by economic fundamentals alone. It is
important to note that, despite all the negative factors impeding the growth of
U.S. businesses, the U.S. economy still grew at an approximate 2.5% rate for all
of 2002, twice that of 2001. Similar expansion is expected in early 2003.
However, until both Iraqi and North Korean conflicts are resolved, any
meaningful increase in interest rates is unlikely.
Some analysts expect that, upon resolution of these conflicts, U.S. business
conditions will quickly improve. Bond yields, especially U.S. Treasury
securities, which have enjoyed a significant safe-haven benefit, are also
expected to quickly rise. However, it is questionable to expect that even a
quick, positive closure to these hostilities would restore business and investor
confidence to the extent that U.S. economic growth would dramatically explode
and foster associated, large-scale interest rate increases. The resumption of
solid economic growth is likely to be a gradual process accompanied by equally
graduated increases in bond yields. Moderate economic growth, within the content
of negligible inflationary pressures, should not greatly endanger the positive
fixed income environment tax-exempt products are currently experiencing.
Portfolio Strategy
For the six months ended February 28, 2003, we maintained the Fund's neutral
market stance through the early part of February. We recently adopted a more
defensive position in response to historic low interest rate levels that are
similar to those reached in late 1993 and 1998. We do not anticipate a dramatic,
significant increase in bond yields in 2003. Given the sharp reversal in asset
valuation in the years following such low levels, however, we believed it
prudent to begin to preserve recent asset appreciation. We will continue to
monitor economic and political conditions in anticipation of stronger U.S.
business activity since we believe that stronger, persistent economic activity
would require an increasingly defensive stance.
We also continued to increase the Fund's income stream by adding lower-rated,
investment grade issues. The Fund maintained its high credit
2 & 3
MuniVest Fund, Inc., February 28, 2003
quality profile throughout the period. At the end of February 2003, 36.9% of the
Fund's assets were rated AAA and 62.1% of the assets were rated AA or better by
at least one of the major bond rating agencies. The recent addition of
higher-yielding issues has helped to raise the Fund's income stream to the
extent that we were able to increase the Fund's dividend payout twice in 2002
and once thus far in 2003.
During the period, the Fund's borrowing costs remained in the 1% - 1.5% range,
with interest rates presently below 1%. These very attractive funding levels, in
combination with the steep tax-exempt yield curve, generated a significant
income benefit to the Fund's Common Stock shareholders from the leveraging of
the Preferred Stock. We do not anticipate any material reduction in the Fund's
borrowing costs in 2003 as additional monetary policy easing by the Federal
Reserve Board is not expected. We anticipate the Fund's short-term borrowing
costs to remain in the 1% - 1.5% range for most of the year. However, should the
spread between short-term and long-term interest rates narrow, the benefits of
leverage will decline and, as a result, reduce the yield on the Fund's Common
Stock. (For a more complete explanation of the benefits and risks of leveraging,
see page 1 of this report to shareholders.)
In Conclusion
We appreciate your ongoing interest in MuniVest Fund, Inc., and we look forward
to assisting you with your financial needs in the months and years ahead.
Sincerely,
/s/ Terry K. Glenn
Terry K. Glenn
President and Director
/s/ Kenneth A. Jacob
Kenneth A. Jacob
Senior Vice President
/s/ John M. Loffredo
John M. Loffredo
Senior Vice President
/s/ Fred K. Stuebe
Fred K. Stuebe
Vice President and Portfolio Manager
March 24, 2003
PROXY RESULTS
During the six-month period ended February 28, 2003, MuniVest Fund, Inc.'s
Common Stock shareholders voted on the following proposal. The proposal was
approved at a shareholders' meeting on January 28, 2003. A description of the
proposal and number of shares voted are as follows:
- ---------------------------------------------------------------------------------------------------------
Shares Voted Shares Withheld
For From Voting
- ---------------------------------------------------------------------------------------------------------
1. To elect the Fund's Directors: Terry K. Glenn 57,432,504 1,458,483
Cynthia A. Montgomery 57,433,750 1,457,237
Charles C. Reilly 57,427,777 1,463,210
Kevin A. Ryan 57,406,035 1,484,952
Roscoe S. Suddarth 57,429,124 1,461,863
Edward D. Zinbarg 57,432,633 1,458,354
- ---------------------------------------------------------------------------------------------------------
During the six-month period ended February 28, 2003, MuniVest Fund, Inc.'s
Preferred Stock shareholders (Series A-E) voted on the following proposal. The
proposal was approved at a shareholders' meeting on January 28, 2003. A
description of the proposal and number of shares voted are as follows:
- ---------------------------------------------------------------------------------------------------------
Shares Voted Shares Withheld
For From Voting
- ---------------------------------------------------------------------------------------------------------
1. To elect the Fund's Directors: Ronald W. Forbes and Richard R. West 9,634 100
- ---------------------------------------------------------------------------------------------------------
4 & 5
MuniVest Fund, Inc., February 28, 2003
SCHEDULE OF INVESTMENTS (in Thousands)
S&P Moody's Face
STATE Ratings Ratings Amount Issue Value
====================================================================================================================================
Alabama--5.1% BBB Baa2 $ 8,750 Courtland, Alabama, IDB, IDR, Refunding (Champion International
Corporation), Series A, 7.20% due 12/01/2013 $ 9,031
Courtland, Alabama, IDB, Solid Waste Disposal Revenue Bonds
(Champion International Corporation Project), AMT:
BBB Baa2 5,000 7% due 6/01/2022 5,110
BBB Baa2 7,500 Series A, 6.50% due 9/01/2025 7,760
Huntsville, Alabama, Health Care Authority Revenue Bonds:
NR* A2 3,500 Series A, 5.75% due 6/01/2031 3,568
NR* A2 5,000 Series B, 5.75% due 6/01/2032 5,097
====================================================================================================================================
Alaska--1.4% Anchorage, Alaska, Lease Revenue Bonds (Correctional Facility) (i):
AAA Aaa 3,575 6% due 2/01/2014 4,132
AAA Aaa 3,830 6% due 2/01/2016 4,376
====================================================================================================================================
California--7.3% California State, Department of Water Resources, Power Supply
Revenue Bonds, Series A:
BBB+ A3 6,000 5.75% due 5/01/2017 6,565
BBB+ A3 9,585 5.375% due 5/01/2022 9,930
A A2 5,400 California State, GO, 5.25% due 4/01/2032 5,436
A- A3 5,800 California Statewide Communities Development Authority, Health
Facility Revenue Bonds (Memorial Health Services), Series A, 6%
due 10/01/2023 6,146
A A2 7,000 Chula Vista, California, IDR, Refunding (San Diego Gas &
Electric Co.), AMT, Series A, 6.75% due 3/01/2023 7,097
A A1 9,300 Golden State Tobacco Securitization Corporation, California,
Tobacco Settlement Revenue Bonds, Series 2003-A-1, 6.75%
due 6/01/2039 9,163
====================================================================================================================================
Colorado--2.7% Arapahoe County, Colorado, School District Number 005, GO
(Cherry Creek):
AA Aa1 5,750 6% due 12/15/2013 6,715
AA Aa1 4,165 6% due 12/15/2014 4,889
Colorado HFA, Revenue Refunding Bonds (S/F Program), AMT, Senior
Series A-2:
NR* Aa2 2,760 6.60% due 5/01/2028 2,935
NR* Aa2 1,450 7.50% due 4/01/2031 1,555
====================================================================================================================================
Connecticut--0.5% BBB- NR* 2,810 Mohegan Tribe Indians, Connecticut, Gaming Authority, Public
Improvement Revenue Refunding Bonds (Priority Distribution),
6.25% due 1/01/2031 2,920
====================================================================================================================================
Georgia--5.3% Georgia Municipal Electric Authority, Power Revenue Refunding Bonds:
A A2 250 Series W, 6.60% due 1/01/2018 (e) 318
A A2 4,600 Series W, 6.60% due 1/01/2018 5,732
A A2 4,515 Series Y, 10% due 1/01/2010 6,260
A A2 250 Series Y, 10% due 1/01/2010 (e) 353
Georgia State, GO, Series F:
AAA Aaa 6,400 6.50% due 12/01/2006 7,509
AAA Aaa 5,000 6.50% due 12/01/2007 5,981
A A3 4,785 Monroe County, Georgia, Development Authority, PCR, Refunding
(Oglethorpe Power Corporation--Scherer), Series A, 6.80%
due 1/01/2011 5,700
====================================================================================================================================
Idaho--0.7% NR* Aaa 2,275 Idaho Housing Agency, S/F Mortgage Revenue Refunding Bonds, AMT,
Series E-2, 6.90% due 1/01/2027 2,474
BB+ Ba3 2,250 Power County, Idaho, Industrial Development Corporation, Solid
Waste Disposal Revenue Bonds (FMC Corporation Project), AMT, 6.45%
due 8/01/2032 1,840
====================================================================================================================================
Illinois--17.5% Chicago, Illinois, GO, Series A (f):
AAA Aaa 7,500 6.75% due 7/01/2010 (a) 9,345
AAA Aaa 3,005 (Neighborhoods Alive 21 Program), 6% due 1/01/2016 3,477
AAA Aaa 5,000 Chicago, Illinois, O'Hare International Airport, General Airport
Revenue Refunding Bonds, Third Lien, AMT, Series A, 5.75%
due 1/01/2019 (c) 5,459
AAA NR* 7,000 Chicago, Illinois, O'Hare International Airport Revenue Refunding
Bonds, DRIVERS, AMT, Series 253, 10.04% due 1/01/2020 (c)(j) 8,190
AAA Aaa 670 Chicago, Illinois, S/F Mortgage Revenue Bonds, AMT, Series C, 7%
due 3/01/2032 (b)(d)(l) 710
AAA Aaa 5,000 Cook County, Illinois, Community High School District Number 219,
Niles Township, GO, 6% due 12/01/2017 (f) 5,806
BBB A1 10,000 Hodgkins, Illinois, Environmental Improvement Revenue Bonds (Metro
Biosolids Management LLC Project), AMT, 6% due 11/01/2023 10,348
BBB NR* 2,140 Illinois Development Finance Authority Revenue Bonds (Community
Rehabilitation Providers Facility), Series A, 6.50% due 7/01/2022 2,184
NR* NR* 2,500 Illinois Educational Facilities Authority, Revenue Refunding Bonds
(Chicago Osteopathic Health System), 7.25% due 11/15/2019 (a) 2,591
A+ A1 7,000 Illinois HDA, Revenue Refunding Bonds (M/F Program), Series 5,
6.75% due 9/01/2023 (m) 7,316
NR* Ba3 2,650 Illinois Health Facilities Authority Revenue Bonds (Holy Cross
Hospital Project), 6.70% due 3/01/2014 1,817
NR* Aaa 5,245 Kane and De Kalb Counties, Illinois, Community Unit School District
Number 302, GO, DRIVERS, Series 283, 10.06% due 2/01/2018 (f)(j) 6,785
NR* Aaa 2,500 Kane, Cook and Du Page Counties, Illinois, School District 46,
Elgin, GO, 6.375% due 1/01/2019 (i) 2,911
McLean and Woodford Counties, Illinois, Community Unit, School
District Number 005, GO, Refunding (i):
NR* Aaa 5,000 6.25% due 12/01/2014 5,991
NR* Aaa 4,000 6.375% due 12/01/2016 4,799
AAA NR* 9,275 Metropolitan Pier and Exposition Authority, Illinois, Dedicated
State Tax Revenue Refunding Bonds, DRIVERS, Series 269, 10.06%
due 6/15/2023 (c)(j) 11,450
Regional Transportation Authority, Illinois, Revenue Bonds:
AAA Aaa 3,500 Series A, 7.20% due 11/01/2020 (h) 4,680
AAA Aaa 4,000 Series C, 7.75% due 6/01/2020 (f) 5,632
AAA Aaa 3,000 Will County, Illinois, Environmental Revenue Bonds (Mobil Oil Refining
Corporation Project), AMT, 6.40% due 4/01/2026 3,358
Will County, Illinois, School District Number 122, GO, Series A (i):
NR* Aaa 1,000 6.50% due 11/01/2013 1,206
NR* Aaa 1,375 6.50% due 11/01/2015 1,653
====================================================================================================================================
Portfolio
Abbreviations
To simplify the listings of MuniVest Fund, Inc.'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)
COP Certificates of Participation
DRIVERS Derivative Inverse Tax-Exempt Receipts
EDA Economic Development Authority
GO General Obligation Bonds
HDA Housing Development Authority
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
RITR Residual Interest Trust Receipts
S/F Single-Family
VRDN Variable Rate Demand Notes
6 & 7
MuniVest Fund, Inc., February 28, 2003
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
S&P Moody's Face
STATE Ratings Ratings Amount Issue Value
====================================================================================================================================
Indiana--8.2% AAA Aaa $ 1,275 Ball State University, Indiana, University Revenue Bonds (Student
Fee), Series K, 5.75% due 7/01/2018 (f) $ 1,441
BBB A3 1,700 Fort Wayne, Indiana, PCR, Refunding (General Motors Corporation
Project), 6.20% due 10/15/2025 1,768
AAA NR* 5,250 Indiana Bond Bank Revenue Bonds (State Revolving Fund Program),
Series A, 6.75% due 2/01/2017 5,876
AA Aa3 6,500 Indiana Health Facility Financing Authority, Hospital Revenue
Refunding Bonds (Clarian Health Partners Inc.), Series A, 6%
due 2/15/2021 6,876
NR* Aaa 4,290 Indiana State, HFA, S/F Mortgage Revenue Refunding Bonds,
Series A, 6.80% due 1/01/2017 (k) 4,383
AA NR* 8,195 Indiana Transportation Finance Authority, Highway Revenue Bonds,
Series A, 6.80% due 12/01/2016 10,291
AA NR* 15,335 Indianapolis, Indiana, Local Public Improvement Bond Bank Revenue
Refunding Bonds, Series D, 6.75% due 2/01/2014 18,821
====================================================================================================================================
Kansas--1.1% NR* Aaa 3,835 Sedgwick and Shawnee Counties, Kansas, S/F Mortgage Revenue Bonds
(Mortgage-Backed Securities Program), AMT, Series A-4, 5.95%
due 12/01/2033 (b)(d) 4,159
BBB A3 2,350 Wyandotte County, Kansas, Kansas City Unified Government Revenue
Refunding Bonds (General Motors Corporation Project), 6%
due 6/01/2025 2,469
====================================================================================================================================
Louisiana--3.2% BBB Baa2 4,000 De Soto Parish, Louisiana, Environmental Improvement Revenue
Refunding Bonds (International Paper Co. Project), AMT, Series B,
6.55% due 4/01/2019 4,119
NR* Baa2 3,000 Lake Charles, Louisiana, Harbor and Terminal District, Port
Facilities Revenue Refunding Bonds (Trunkline Long Company Project)
7.75% due 8/15/2022 3,140
AAA Aaa 10,000 Louisiana Local Government, Environmental Facilities, Community
Development Authority Revenue Bonds (Capital Projects and Equipment
Acquisition), Series A, 6.30% due 7/01/2030 (h) 12,175
====================================================================================================================================
Maine--0.4% AAA Aaa 2,095 Maine State Housing Authority, Mortgage Purchase Revenue Refunding
Bonds, AMT, Series B-2, 6.45% due 11/15/2026 (h) 2,212
====================================================================================================================================
Maryland--0.9% NR* Aa2 5,050 Maryland State Community Development Administration, Department of
Housing and Community Development Revenue Refunding Bonds (S/F
Program), AMT, Fifth Series, 6.75% due 4/01/2026 5,227
====================================================================================================================================
Massachusetts--8.0% AAA Aaa 2,035 Boston, Massachusetts, Water and Sewer Commission Revenue Bonds,
9.25% due 1/01/2011 (e) 2,821
AA Aa2 3,010 Massachusetts Bay Transportation Authority, Revenue Refunding Bonds
(General Transportation System), Series A, 7% due 3/01/2019 3,887
AA Aa3 30,000 Massachusetts State Water Resource Authority Revenue Bonds, Series A,
6.50% due 7/15/2019 37,783
Massachusetts State Water Resource Authority, Revenue Refunding
Bonds, Series A (f):
AAA Aaa 1,000 6% due 8/01/2014 1,169
AAA Aaa 2,480 6% due 8/01/2017 2,875
====================================================================================================================================
Michigan--4.8% BBB Baa2 7,695 Delta County, Michigan, Economic Development Corporation,
Environmental Improvement Revenue Refunding Bonds (Mead
Westvaco-Escanaba), Series A, 6.25% due 4/15/2027 7,754
Michigan State Hospital Finance Authority, Revenue Refunding Bonds:
AAA Aaa 3,000 (Ascension Health Credit), Series A, 6.125% due 11/15/2023 (c) 3,341
AA Aa2 10,390 (Ascension Health Credit), Series A, 6.125% due 11/15/2026 11,539
BBB- Baa3 1,300 (Detroit Medical Center Obligation Group), Series A, 6.25%
due 8/15/2013 1,312
NR* A1 100 (Mount Clemens Hospital), VRDN, 1.10% due 8/15/2015 (g) 100
NR* Baa3 1,000 (Sinai Hospital), 6.70% due 1/01/2026 994
BBB Baa1 4,000 Michigan State Strategic Fund, Limited Obligation, Revenue Refunding
Bonds (Ford Motor Co. Project), Series A, 7.10% due 2/01/2006 4,254
====================================================================================================================================
Minnesota--2.3% NR* A3 7,235 Minneapolis, Minnesota, Health Care System Revenue Bonds (Allina
Health System), Series A, 5.75% due 11/15/2032 7,479
Minnesota State, HFA, S/F Mortgage Revenue Bonds:
AA+ Aa1 1,440 AMT, Series L, 6.70% due 7/01/2020 1,487
AA+ Aa1 2,060 AMT, Series M, 6.70% due 7/01/2026 2,126
AA+ Aa1 1,440 Series H, 6.70% due 1/01/2018 1,483
NR* Aaa 1,405 Saint Cloud, Minnesota, Health Care Revenue Refunding Bonds (Saint
Cloud Hospital Obligation Group), Series A, 6.25% due 5/01/2017 (i) 1,608
====================================================================================================================================
Mississippi--3.7% Lowndes County, Mississippi, Solid Waste Disposal and PCR, Refunding
(Weyerhaeuser Company Project):
BBB Baa2 3,650 Series A, 6.80% due 4/01/2022 4,192
BBB Baa2 4,000 Series B, 6.70% due 4/01/2022 4,547
BBB- Ba1 14,105 Mississippi Business Finance Corporation, Mississippi, PCR, Refunding
(System Energy Resources Inc. Project), 5.875% due 4/01/2022 13,618
====================================================================================================================================
Missouri--0.7% Missouri State Development Finance Board, Infrastructure Facilities
Revenue Bonds (Branson), Series A:
BBB+ Baa1 200 5.375% due 12/01/2027 201
BBB+ Baa1 2,600 5.50% due 12/01/2032 2,623
AAA NR* 1,500 Missouri State Housing Development Commission, S/F Mortgage Revenue
Bonds (Homeowner Loan), AMT, Series A, 7.50% due 3/01/2031 (b)(d) 1,616
====================================================================================================================================
Nebraska--0.3% AAA NR* 1,745 Nebraska Investment Finance Authority, S/F Housing Revenue Bonds,
AMT, Series C, 6.30% due 9/01/2028 (b)(d)(l) 1,829
====================================================================================================================================
Nevada--3.2% AAA Aaa 6,700 Clark County, Nevada, IDR (Power Company Project), AMT, Series A, 6.70%
due 6/01/2022 (f) 6,932
AA Aa2 1,600 Clark County, Nevada, Public Safety, GO, 6% due 3/01/2014 1,858
Nevada Housing Division Revenue Bonds (Multi-Unit Housing), AMT (b):
AAA NR* 3,475 (Arville Electric Project), 6.60% due 10/01/2023 3,655
AAA Aa2 1,235 Issue B, 7.45% due 10/01/2017 1,296
Nevada Housing Division Revenue Bonds (S/F Program), AMT (k):
AAA Aaa 1,460 Senior Series E, 7% due 10/01/2019 1,510
NR* Aa2 845 Series A, 6.55% due 10/01/2012 875
BBB Baa3 3,350 Nevada State Department of Business and Industry, Solid Waste Disposal
Revenue Bonds (Republic Services Inc. Project), AMT, 5.625%
due 12/01/2026 3,396
====================================================================================================================================
New Jersey--7.0% AAA Aaa 1,695 New Jersey State Housing and Mortgage Finance Agency, Home Buyer
Revenue Bonds, AMT, Series M, 6.95% due 10/01/2022 (c) 1,768
AAA Aaa 6,500 New Jersey State Transit Corporation, COP (Federal Transit
Administration Grants), Series A, 6% due 9/15/2009 (a)(h) 7,738
AAA Aaa 16,810 New Jersey State Transportation Trust Fund Authority, Transportation
System Revenue Refunding Bonds, Series B, 6% due 12/15/2011 (a)(c) 20,237
A A1 12,750 Tobacco Settlement Financing Corporation of New Jersey Revenue Bonds,
7% due 6/01/2041 12,664
====================================================================================================================================
8 & 9
MuniVest Fund, Inc., February 28, 2003
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
S&P Moody's Face
STATE Ratings Ratings Amount Issue Value
====================================================================================================================================
New York--10.6% AAA Aaa $ 2,100 Metropolitan Transportation Authority, New York, Dedicated Tax
Fund Revenue Bonds, Series A, 6.125% due 4/01/2010 (a)(f) $ 2,524
NR* Aa2 7,875 New York City, New York, City Transitional Finance Authority
Revenue Bonds, RIB, Series 283, 11.11% due 11/15/2018 (j) 10,982
A A2 1,655 New York City, New York, Fiscal Year 2003, GO, Series I, 5.75%
due 3/01/2021 1,768
AAA Aaa 8,000 New York City, New York, GO, Refunding, Series A, 6.375%
due 5/15/2014 (f) 9,500
New York City, New York, GO, Series I (o):
AAA Aaa 3,740 6.25% due 4/15/2017 4,309
AAA Aaa 1,150 6.25% due 4/15/2007 (a) 1,298
AAA Aaa 10,775 New York State Dormitory Authority Revenue Bonds (City University
System), Consolidated Second Generation, Series A, 6.125%
due 7/01/2013 (h) 12,673
New York State Dormitory Authority, Revenue Refunding Bonds:
BBB- Baa3 1,000 (Mount Sinai Health), Series A, 6.50% due 7/01/2025 1,059
AAAr NR* 11,875 RIB, Series 305, 10.07% due 5/15/2015 (c)(j) 15,818
AAA Aaa 3,500 New York State Urban Development Corporation, Revenue Refunding Bonds
(Correctional Capital Facilities), Series A, 6.50% due 1/01/2011 (i) 4,239
====================================================================================================================================
Oregon--1.1% NR* Aaa 2,000 Portland, Oregon, Airport Way, Urban Renewal and Redevelopment Tax
Allocation Refunding Bonds, Series A, 6% due 6/15/2015 (h) 2,327
NR* Aaa 3,305 Portland, Oregon, Sewer System Revenue Bonds, RIB, Series 386, 10.04%
due 8/01/2020 (f)(j) 4,568
====================================================================================================================================
Pennsylvania--3.1% AAA Aaa 4,040 Allegheny County, Pennsylvania, Airport Authority, Airport Revenue
Refunding Bonds (Pittsburgh International Airport), AMT, 6%
due 1/01/2013 (f) 4,550
AAA Aaa 2,440 Pennsylvania State Higher Education Assistance Agency Revenue Bonds,
Capital Acquisition, 6.125% due 12/15/2010 (a)(c) 2,946
A- NR* 7,700 Sayre, Pennsylvania, Health Care Facilities Authority Revenue Bonds
(Guthrie Health), Series A, 5.875% due 12/01/2031 7,959
Sayre, Pennsylvania, Health Care Facilities Authority, Revenue
Refunding Bonds (Guthrie Healthcare System), Series A:
A- NR* 2,000 6.25% due 12/01/2018 2,178
A- NR* 1,000 5.75% due 12/01/2021 1,038
====================================================================================================================================
Puerto Rico--0.9% BBB+ Baa3 5,000 Puerto Rico Public Finance Corporation, Commonwealth Appropriation
Revenue Bonds, Series E, 5.75% due 8/01/2030 5,438
====================================================================================================================================
South Carolina-- BBB+ Baa2 2,450 Medical University, South Carolina, Hospital Authority, Hospital
1.5% Facility Revenue Refunding Bonds, 6.50% due 8/15/2032 2,559
A- A3 6,250 South Carolina Jobs, EDA, Economic Development Revenue Refunding
Bonds (Bon Secours Health System Inc.), Series A, 5.625%
due 11/15/2030 6,326
====================================================================================================================================
Tennessee--0.6% BB+ Ba1 2,000 McMinn County, Tennessee, IDB, Solid Waste Revenue Bonds (Recycling
Facility--Calhoun Newsprint), AMT, 7.40% due 12/01/2022 1,934
BBB+ Baa1 1,500 Shelby County, Tennessee, Health, Educational and Housing Facility
Board, Hospital Revenue Refunding Bonds (Methodist Healthcare), 6.50%
due 9/01/2026 1,602
====================================================================================================================================
Texas--21.7% Austin, Texas, Convention Center Revenue Bonds (Convention
Enterprises Inc.):
BBB- Baa3 6,000 First Tier, Series A, 6.70% due 1/01/2028 6,263
BBB- Baa3 1,000 First Tier, Series A, 6.70% due 1/01/2032 1,040
A+ Aa3 6,500 Trust Certificates, Second Tier, Series B, 6% due 1/01/2023 7,035
Brazos River Authority, Texas, PCR, Refunding (Texas Utilities
Electric Company Project), AMT:
BBB Baa2 3,000 Series B, 5.40% due 5/01/2029 2,933
BBB Baa2 2,415 Series D, 4.25% due 5/01/2033 (g) 2,391
BBB Baa2 12,300 Brazos River Authority, Texas, PCR, Refunding (Utilities Electric
Company), AMT, Series B, 5.05% due 6/01/2030 11,992
A A3 11,460 Brazos River, Texas, Harbor Navigation District, Brazoria County
Environmental Revenue Refunding Bonds (Dow Chemical Company Project),
AMT, Series A-7, 6.625% due 5/15/2033 11,969
AA+ Aa1 5,000 Fort Worth, Texas, Certificates of Obligation, GO, 6.25%
due 3/01/2021 5,432
NR* Baa3 1,000 Grapevine, Texas, Industrial Development Corporation Revenue Bonds
(Air Cargo), AMT, 6.50% due 1/01/2024 972
AA NR* 3,000 Gregg County, Texas, Health Facilities Development Corporation,
Hospital Revenue Bonds (Good Shepherd Medical Center Project),
6.875% due 10/01/2020 3,517
AA- Aa3 10,250 Guadalupe-Blanco River Authority, Texas, Sewage and Solid Waste
Disposal Facility Revenue Bonds (E.I. du Pont de Nemours and
Company Project), AMT, 6.40% due 4/01/2026 10,944
BBB Baa2 4,000 Gulf Coast, Texas, IDA (Champion International Corp.), Refunding,
7.125% due 4/01/2010 4,089
BBB Baa2 3,000 Gulf Coast, Texas, Waste Disposal Authority, Revenue Refunding
Bonds (International Paper Company), AMT, Series A, 6.10%
due 8/01/2024 2,996
AAA Aaa 5,500 Harris County, Houston, Texas, Sports Authority, Revenue Refunding
Bonds, Senior Lien, Series G, 5.75% due 11/15/2020 (c) 6,163
NR* Aa3 10,385 Harris County, Texas, Health Facilities Development Corporation,
Revenue Refunding Bonds, RITR, Series 6, 9.775% due 12/01/2027 (e)(j) 13,559
NR* Baa3 1,590 Houston, Texas, Industrial Development Corporation Revenue Bonds
(Air Cargo), AMT, 6.375% due 1/01/2023 1,584
AAA Aaa 2,030 Mansfield, Texas, Independent School District, GO, Refunding, 6.625%
due 2/15/2015 2,423
NR* Aaa 5,225 Midway, Texas, Independent School District, GO, Refunding, 6.125%
due 8/15/2014 6,130
BBB Baa2 5,400 Port Corpus Christi, Texas, Revenue Refunding Bonds (Celanese
Project), Series A, 6.45% due 11/01/2030 5,505
BBB Baa2 5,000 Red River Authority, Texas, PCR, Refunding (Celanese Project),
AMT, Series B, 6.70% due 11/01/2030 5,136
NR* Aa1 6,250 San Antonio, Texas, Electric and Gas Revenue Bonds, RIB, Series
469x, 9.62% due 2/01/2014 (j) 8,314
NR* Baa3 1,750 Texas State Student Housing Corporation, Student Housing Revenue
Bonds (Midwestern State University Project), 6.50% due 9/01/2034 1,704
AAA Aaa 4,605 Travis County, Texas, Health Facilities Development Corporation,
Revenue Refunding Bonds (Ascension Health Credit), Series A, 6.25%
due 11/15/2014 (c) 5,301
AAA Aaa 3,425 Ysleta, Texas, Independent School District, Public Facility
Corporation, School Facility Lease Revenue Bonds, 6% due
11/15/2009 (a)(h) 4,093
====================================================================================================================================
Vermont--0.2% BBB+ NR* 1,000 Vermont Educational and Health Buildings Financing Agency,
Developmental and Mental Health Revenue Bonds (Howard Center for
Human Services), Series A, 6.375% due 6/15/2022 1,025
====================================================================================================================================
10 & 11
MuniVest Fund, Inc., February 28, 2003
SCHEDULE OF INVESTMENTS (concluded) (in Thousands)
S&P Moody's Face
STATE Ratings Ratings Amount Issue Value
===================================================================================================================================
Virgin Islands--1.3% BBB- Baa3 $ 8,000 Virgin Islands Government Refinery Facilities Revenue Bonds
(Hovensa Coker Project), AMT, 6.50% due 7/01/2021 $ 8,074
===================================================================================================================================
Virginia--1.7% BBB+ A3 1,425 Chesterfield County, Virginia, IDA, PCR (Virginia Electric and
Power Company), Series A, 5.875% due 6/01/2017 1,499
BBB Baa2 1,500 Isle of Wight County, Virginia, IDA, Solid Waste Disposal
Facilities Revenue Bonds (Union Camp Corporation Project), AMT, 6.55%
due 4/01/2024 1,529
BBB- Baa3 1,750 Mecklenburg County, Virginia, IDA, Exempt Facility Revenue Refunding
Bonds (UAE LP Project), 6.50% due 10/15/2017 1,748
AAA Aaa 5,175 Virginia State HDA, Commonwealth Mortgage Revenue Bonds, Series J,
Sub-Series J-1, 5.20% due 7/01/2019 (c) 5,407
===================================================================================================================================
Washington--12.2% Energy Northwest, Washington, Electric Revenue Refunding Bonds
DRIVERS (j):
AAA NR* 5,330 Series 248, 10.07% due 7/01/2018 (c) 6,718
AAA NR* 3,510 Series 255, 10.56% due 7/01/2018 (h) 4,583
AAA NR* 7,350 Series 256, 10.57% due 7/01/2017 (c) 9,772
AA+ Aa1 7,135 King County, Washington, GO, Series B, 6.625% due 12/01/2007 (a) 8,723
NR* NR* 2,500 Seattle, Washington, Housing Authority, Housing Revenue Bonds
(Replacement Housing Project), 6.125% due 12/01/2032 2,509
AAA Aaa 2,230 Vancouver, Washington, Water and Sewer Revenue Bonds, 6%
due 6/01/2014 (f) 2,583
AAA Aaa 8,100 Washington State, GO, Trust Receipts, Class R, Series 6, 10.517%
due 1/01/2014 (i)(j) 10,459
Washington State Public Power Supply System, Revenue Refunding
Bonds (Nuclear Project Number 1):
AA- Aa1 1,185 Series A, 7% due 7/01/2008 (e) 1,453
AA- Aa1 1,815 Series A, 7% due 7/01/2008 2,191
AA- Aa1 920 Series B, 7.25% due 7/01/2009 (e) 1,156
AA- Aa1 4,080 Series B, 7.25% due 7/01/2009 4,829
AA- Aa1 14,320 Series B, 7.125% due 7/01/2016 18,552
===================================================================================================================================
Wisconsin--1.9% NR* Baa3 1,595 Milwaukee, Wisconsin, Revenue Bonds (Air Cargo), AMT, 6.50%
due 1/01/2025 1,548
AA Aa2 425 Wisconsin Housing and Economic Development Authority,
Homeownership Revenue Bonds, AMT, Series D, 6.45%
due 9/01/2027 (k) 442
NR* Aa2 5,000 Wisconsin State Health and Educational Facilities Authority,
Mortgage Revenue Bonds (Hudson Memorial Hospital), 5.70%
due 1/15/2029 (k) 5,145
BBB+ NR* 4,540 Wisconsin State Health and Educational Facilities Authority
Revenue Bonds (Synergyhealth Inc.), 6% due 11/15/2032 4,540
===================================================================================================================================
Wyoming--1.9% Sweetwater County, Wyoming, Solid Waste Disposal Revenue Bonds
(FMC Corporation Project), AMT:
BB+ Ba3 5,425 Series A, 7% due 6/01/2024 4,859
BB+ Ba3 7,475 Series B, 6.90% due 9/01/2024 6,616
-----------------------------------------------------------------------------------------------------------
Total Municipal Bonds (Cost--$789,114)--143.0% 864,864
===================================================================================================================================
Shares
Held Short-Term Securities
===================================================================================================================================
9,558 Merrill Lynch Institutional Tax-Exempt Fund (n) 9,558
-----------------------------------------------------------------------------------------------------------
Total Short-Term Securities (Cost--$9,557)--1.6% 9,558
===================================================================================================================================
Total Investments (Cost--$798,671)--144.6% 874,422
Variation Margin on Financial Futures Contracts**--0.0% (258)
Other Assets Less Liabilities--0.9% 5,598
Preferred Stock at Redemption Value--(45.5%) (275,051)
----------
Net Assets Applicable to Common Stock--100.0% $ 604,711
==========
===================================================================================================================================
(a) Prerefunded.
(b) FNMA Collateralized.
(c) MBIA Insured.
(d) GNMA Collateralized.
(e) Escrowed to maturity.
(f) FGIC Insured.
(g) The interest rate is subject to change periodically based upon prevailing
market rates. The interest rate shown is the rate in effect at February
28, 2003.
(h) AMBAC Insured.
(i) FSA Insured.
(j) 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 February 28, 2003.
(k) FHA Insured.
(l) FHLMC Collateralized.
(m) All or a portion of security held as collateral in connection with open
financial futures contracts.
(n) Investments in companies considered to be an affiliate of the Fund (such
companies are defined as "Affiliated Companies" in Section 2(a)(3) of the
Investment Company Act of 1940) are as follows:
(in Thousands)
--------------------------------------------------------------------------
Net Dividend
Affiliate Activity Income
--------------------------------------------------------------------------
Merrill Lynch Institutional Tax-Exempt Fund (872) $ 84
--------------------------------------------------------------------------
(o) XL Capital Insured.
* Not Rated.
** Financial futures contracts sold as of February 28, 2003 were as follows:
(in Thousands)
--------------------------------------------------------------------------
Number of Expiration
Contracts Issue Date Value
--------------------------------------------------------------------------
635 U.S. Treasury Notes March 2003 $74,116
--------------------------------------------------------------------------
Total Financial Futures Contracts Sold
(Total Contract Price--$71,323) $74,116
=======
--------------------------------------------------------------------------
See Notes to Financial Statements.
Quality Profile
The quality ratings of securities in the Fund as of February 28, 2003 were as
follows:
- --------------------------------------------------------------------------------
Percent of
S&P Rating/Moody's Rating Total Investments
- --------------------------------------------------------------------------------
AAA/Aaa ......................................................... 36.9%
AA/Aa ........................................................... 25.2
A/A ............................................................. 16.7
BBB/Baa ......................................................... 17.5
BB/Ba ........................................................... 2.0
NR (Not Rated) .................................................. 1.7
- --------------------------------------------------------------------------------
12 & 13
MuniVest Fund, Inc., February 28, 2003
STATEMENT OF NET ASSETS
As of February 28, 2003
===================================================================================================================================
Assets: Investments, at value (identified cost--$798,671,155) ................. $ 874,422,296
Cash .................................................................. 57,077
Receivables:
Interest ............................................................ $ 12,956,691
Securities sold ..................................................... 9,784,799
Dividends ........................................................... 259 22,741,749
-------------
Prepaid expenses ...................................................... 59,539
-------------
Total assets .......................................................... 897,280,661
-------------
===================================================================================================================================
Liabilities: Payables:
Securities purchased ................................................ 16,399,314
Dividends to Common Stock shareholders .............................. 453,298
Investment adviser .................................................. 331,021
Variation margin .................................................... 257,969 17,441,602
-------------
Accrued expenses ...................................................... 77,764
-------------
Total liabilities ..................................................... 17,519,366
-------------
===================================================================================================================================
Preferred Stock: Preferred Stock, at redemption value, par value $.025 per share;
10,000,000 shares authorized (2,000 Series A shares, 2,000
Series B shares, 2,000 Series C shares, 2,000 Series D shares and 3,000
Series E shares of AMPS* issued and outstanding at $25,000 per share
liquidation preference) ............................................... 275,050,700
-------------
===================================================================================================================================
Net Assets Applicable Net assets applicable to Common Stock ................................. $ 604,710,595
To Common Stock: =============
===================================================================================================================================
Analysis of Net Common Stock, par value $.10 per share; 150,000,000 shares
Assets Applicable to authorized (61,346,288 shares issued and outstanding) ................. $ 6,134,629
Common Stock: Paid-in capital in excess of par ...................................... 565,202,625
Undistributed investment income--net .................................. $ 7,664,893
Accumulated realized capital losses on investments--net ............... (47,249,568)
Unrealized appreciation on investments--net ........................... 72,958,016
-------------
Total accumulated earnings--net ....................................... 33,373,341
-------------
Total--Equivalent to $9.86 net asset value per share of Common
Stock (market price--$8.91) ........................................... $ 604,710,595
=============
===================================================================================================================================
* Auction Market Preferred Stock.
See Notes to Financial Statements.
STATEMENT OF OPERATIONS
For the Six Months Ended February 28, 2003
===================================================================================================================================
Investment Interest .............................................................. $ 24,584,731
Income: Dividends ............................................................. 83,836
-------------
Total income .......................................................... 24,668,567
-------------
===================================================================================================================================
Expenses: Investment advisory fees .............................................. $ 2,162,902
Commission fees ....................................................... 348,298
Accounting services ................................................... 125,099
Transfer agent fees ................................................... 53,784
Professional fees ..................................................... 35,320
Printing and shareholder reports ...................................... 28,818
Custodian fees ........................................................ 21,831
Directors' fees and expenses .......................................... 18,400
Pricing fees .......................................................... 14,412
Listing fees .......................................................... 7,152
Other ................................................................. 18,607
-------------
Total expenses before reimbursement ................................... 2,834,623
Reimbursement of expenses ............................................. (15,121)
-------------
Total expenses after reimbursement .................................... 2,819,502
-------------
Investment income--net ................................................ 21,849,065
-------------
===================================================================================================================================
Realized & Unreal- Realized gain on investments--net ..................................... 2,180,037
ized Gain on Change in unrealized appreciation on investments--net ................. 2,697,848
Investments--Net: -------------
Total realized and unrealized gain on investments--net ................ 4,877,885
-------------
===================================================================================================================================
Dividends to Investment income--net ................................................ (1,753,840)
Preferred Stock -------------
Shareholders: Net Increase in Net Assets Resulting from Operations .................. $ 24,973,110
=============
===================================================================================================================================
See Notes to Financial Statements.
14 & 15
MuniVest Fund, Inc., February 28, 2003
STATEMENTS OF CHANGES IN NET ASSETS
For the Six For the
Months Ended Year Ended
February 28, August 31,
Increase (Decrease) in Net Assets: 2003 2002
=========================================================================================================================
Operations: Investment income--net ...................................... $ 21,849,065 $ 42,636,442
Realized gain (loss) on investments--net .................... 2,180,037 (1,245,383)
Change in unrealized appreciation on investments--net ....... 2,697,848 1,958,639
Dividends to Preferred Stock shareholders ................... (1,753,840) (4,354,450)
------------- -------------
Net increase in net assets resulting from operations ........ 24,973,110 38,995,248
------------- -------------
=========================================================================================================================
Dividends to Common Investment income--net ...................................... (19,078,696) (36,086,954)
Stock Shareholders: ------------- -------------
Net decrease in net assets resulting from dividends to Common
Stock shareholders .......................................... (19,078,696) (36,086,954)
------------- -------------
=========================================================================================================================
Net Assets Applicable Total increase in net assets applicable to Common Stock ..... 5,894,414 2,908,294
To Common Stock: Beginning of period ......................................... 598,816,181 595,907,887
------------- -------------
End of period* .............................................. $ 604,710,595 $ 598,816,181
============= =============
=========================================================================================================================
*Undistributed investment income--net ........................ $ 7,664,893 $ 6,648,364
============= =============
=========================================================================================================================
See Notes to Financial Statements.
FINANCIAL HIGHLIGHTS
The following per share data and ratios have been For the
derived from information provided in the financial Six Months
statements. Ended For the Year Ended August 31,
February 28, -----------------------------------------
Increase (Decrease) in Net Asset Value: 2003 2002 2001 2000 1999
==================================================================================================================================
Per Share Operating Net asset value, beginning of period ................. $ 9.76 $ 9.71 $ 9.07 $ 9.15 $ 10.20
Performance:++ -------- -------- -------- -------- --------
Investment income--net ............................... .36+ .69 .69 .70 .73
Realized and unrealized gain (loss) on
investments--net ..................................... .08 .02 .65 (.05) (1.02)
Dividends to Preferred Stock shareholders from
investment income--net ............................... (.03) (.07) (.16) (.18) (.15)
-------- -------- -------- -------- --------
Total from investment operations ..................... .41 .64 1.18 .47 (.44)
-------- -------- -------- -------- --------
Less dividends to Common Stock shareholders:
Investment income--net .............................. (.31) (.59) (.54) (.55) (.58)
In excess of realized gain on investments--net ...... -- -- -- -- (.03)
-------- -------- -------- -------- --------
Total dividends to Common Stock shareholders ......... (.31) (.59) (.54) (.55) (.61)
-------- -------- -------- -------- --------
Net asset value, end of period ....................... $ 9.86 $ 9.76 $ 9.71 $ 9.07 $ 9.15
======== ======== ======== ======== ========
Market price per share, end of period ................ $ 8.91 $ 9.11 $ 9.30 $ 8.25 $ 8.6875
======== ======== ======== ======== ========
==================================================================================================================================
Total Investment Based on market price per share ...................... 1.27%@ 4.55% 19.92% 1.75% (7.44%)
Return:** ======== ======== ======== ======== ========
Based on net asset value per share ................... 4.60%@ 7.28% 13.89% 6.21% (4.42%)
======== ======== ======== ======== ========
==================================================================================================================================
Ratios Based on Total expenses, net of reimbursement*** .............. .95%* .95% .98% 1.01% .93%
Average Net Assets ======== ======== ======== ======== ========
Of Common Stock: Total expenses*** .................................... .96%* .95% .98% 1.01% .93%
======== ======== ======== ======== ========
Total investment income--net*** ...................... 7.38%* 7.33% 7.37% 7.95% 7.26%
======== ======== ======== ======== ========
Amount of dividends to Preferred Stock shareholders .. .59%* .75% 1.70% 2.01% 1.46%
======== ======== ======== ======== ========
Investment income--net, to Common Stock shareholders . 6.79%* 6.58% 5.67% 5.94% 5.80%
======== ======== ======== ======== ========
==================================================================================================================================
Ratios Based on Total expenses, net of reimbursement ................. .65%* .65% .66% .67% .64%
Average Net Assets ======== ======== ======== ======== ========
Of Common & Total expenses ....................................... .66%* .65% .66% .67% .64%
Preferred Stock:*** ======== ======== ======== ======== ========
Total investment income--net ......................... 5.05%* 4.98% 4.98% 5.26% 5.01%
======== ======== ======== ======== ========
==================================================================================================================================
Ratios Based on Dividends to Preferred Stock shareholders ............ 1.29%* 1.59% 3.53% 3.93% 3.25%
Average Net Assets ======== ======== ======== ======== ========
Of Preferred Stock:
==================================================================================================================================
Supplemental Data: Net assets applicable to Common Stock, end of
period (in thousands) ................................ $604,711 $598,816 $595,908 $556,105 $561,373
======== ======== ======== ======== ========
Preferred Stock outstanding, end of period
(in thousands) ....................................... $275,000 $275,000 $275,000 $275,000 $275,000
======== ======== ======== ======== ========
Portfolio turnover ................................... 21.82% 74.00% 74.80% 121.76% 101.35%
======== ======== ======== ======== ========
==================================================================================================================================
Leverage: Asset coverage per $1,000 ............................ $ 3,199 $ 3,178 $ 3,167 $ 3,022 $ 3,041
======== ======== ======== ======== ========
==================================================================================================================================
Dividends Per Series A--Investment income--net ..................... $ 144 $ 388 $ 909 $ 1,030 $ 839
Share on Preferred ======== ======== ======== ======== ========
Stock Outstanding: Series B--Investment income--net ..................... $ 166 $ 394 $ 923 $ 991 $ 815
======== ======== ======== ======== ========
Series C--Investment income--net ..................... $ 163 $ 391 $ 906 $ 952 $ 820
======== ======== ======== ======== ========
Series D--Investment income--net ..................... $ 176 $ 445 $ 877 $ 978 $ 802
======== ======== ======== ======== ========
Series E--Investment income--net ..................... $ 153 $ 372 $ 851 $ 977 $ 793
======== ======== ======== ======== ========
==================================================================================================================================
* 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
charges.
*** Do not reflect the effect of dividends to Preferred Stock shareholders.
+ Based on average shares outstanding.
++ Certain prior year amounts have been reclassified to conform with current
year presentation.
@ Aggregate total investment return.
See Notes to Financial Statements.
16 & 17
MuniVest Fund, Inc., February 28, 2003
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
MuniVest Fund, Inc. (the "Fund") is registered under the Investment Company Act
of 1940 as a non-diversified, closed-end management investment company. The
Fund's financial statements are prepared in conformity with accounting
principles generally accepted in the United States of America, which may require
the use of management accruals and estimates. 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 American Stock Exchange
under the symbol MVF. The following is a summary of significant accounting
policies followed by the Fund.
(a) Valuation of investments -- Municipal bonds are traded primarily in the
over-the-counter markets and are valued at the most recent bid price or yield
equivalent as obtained by the Fund's pricing service from dealers that make
markets in such securities. Financial futures contracts and options thereon,
which are traded on exchanges, are valued at their closing prices as of the
close of such exchanges. Options written or purchased are valued at the last
sale price in the case of exchange-traded options. In the case of options traded
in the over-the-counter market, valuation is the last asked price (options
written) or the last bid price (options purchased). Securities with remaining
maturities of sixty days or less are valued at amortized cost, which
approximates market value. Securities and assets for which market quotations are
not readily available are valued at fair value as determined in good faith by or
under the direction of the Board of Directors of the Fund, including valuations
furnished by a pricing service retained by the Fund, which may utilize a matrix
system for valuations. The procedures of the pricing service and its valuations
are reviewed by the officers of the Fund under the general supervision of the
Board of Directors.
(b) Derivative financial instruments -- The Fund may engage in various portfolio
investment strategies to increase or decrease the level of risk to which the
Fund is exposed more quickly and efficiently than transactions in other types of
instruments. Losses may arise due to changes in the value of the contract or if
the counterparty does not perform under the contract.
o 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.
o 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.
o Forward interest rate swaps -- The Fund is authorized to enter into forward
interest rate swaps for the purpose of hedging the interest rate risk on
portfolio securities. In a forward interest rate swap, the Fund and the
counterparty agree to pay or receive interest on a specified notional contract
amount, commencing on a specified future effective date, unless terminated
earlier. The value of the agreement is determined by quoted fair values received
daily by the Fund from the counterparty. When the agreement is closed, the Fund
records a realized gain or loss in an amount equal to the value of the
agreement.
(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).
Realized gains and losses on security transactions are determined on the
identified cost basis. Dividend income is recorded on the ex-dividend dates.
Interest income is recognized on the accrual basis. The Fund amortizes all
premiums and discounts on debt securities.
(e) 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. ("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 .50% of the Fund's average weekly net assets, including assets
acquired from the sale of Preferred Stock.
For the six months ended February 28, 2003, FAM reimbursed the Fund in the
amount of $15,121.
For the six months ended February 28, 2003, the Fund reimbursed FAM $9,204 for
certain accounting services.
Certain officers and/or directors of the Fund are officers and/or directors of
FAM, PSI, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities, for the six
months ended February 28, 2003 were $186,992,389 and $184,863,745, respectively.
Net realized gains (losses) for the six months ended February 28, 2003 and net
unrealized gains (losses) as of February 28, 2003 were as follows:
- -------------------------------------------------------------------------------
Realized Unrealized
Gains (Losses) Gains (Losses)
- -------------------------------------------------------------------------------
Long-term investments .................. $ 4,205,746 $ 75,751,141
Financial futures contracts ............ (2,025,709) (2,793,125)
------------ ------------
Total .................................. $ 2,180,037 $ 72,958,016
============ ============
- -------------------------------------------------------------------------------
As of February 28, 2003, net unrealized appreciation for Federal income tax
purposes aggregated $75,756,372, of which $78,429,876 related to appreciated
securities and $2,673,504 related to depreciated securities. The aggregate cost
of investments at February 28, 2003 for Federal income tax purposes was
$798,665,924.
4. Stock Transactions:
Common Stock
At February 28, 2003, the Fund had one class of shares of Common Stock, par
value $.10 per share, of which 150,000,000 shares were authorized. Shares issued
and outstanding during the six months ended February 28, 2003 and for the year
ended August 31, 2002 remained constant.
Preferred Stock
The Auction Market Preferred Stock ("AMPS") are redeemable shares of Preferred
Stock of the Fund, with a par value of $.025 per share and a liquidation
preference of $25,000 per share plus accrued and unpaid dividends, that entitle
their holders to receive cash dividends at an annual rate that may vary for the
successive dividend periods for each series. The Fund is authorized to issue
10,000,000 shares of Preferred Stock. The yields in effect at February 28, 2003
18 & 19
MuniVest Fund, Inc., February 28, 2003
NOTES TO FINANCIAL STATEMENTS (concluded)
were as follows: Series A, .98%; Series B, 1.00%; Series C, .98%; Series D,
..98%; and Series E, .90%.
Shares issued and outstanding during the six months ended February 28, 2003 and
for the year ended August 31, 2002 remained constant.
The Fund pays commissions to certain broker-dealers at the end of each auction
at an annual rate ranging from .25% to .375%, calculated on the proceeds of each
auction. For the six months ended February 28, 2003, Merrill Lynch, Pierce,
Fenner & Smith Incorporated, an affiliate of FAM, received $128,966 as
commissions.
5. Capital Loss Carryforward:
On August 31, 2002, the Fund had a net capital loss carryforward of $33,685,408,
of which $16,005,525 expires in 2008 and $17,679,883 expires in 2009. This
amount will be available to offset like amounts of any future taxable gains.
6. Subsequent Event:
The Fund paid a tax-exempt income dividend to Common Stock shareholders in the
amount of $.053000 per share payable on March 28, 2003 to shareholders of record
as of March 17, 2003.
MANAGED DIVIDEND POLICY
The Fund's dividend policy is to distribute all or a portion of its net
investment income to its shareholders on a monthly basis. In order to provide
shareholders with a more consistent yield to the current trading price of shares
of Common Stock of the Fund, the Fund may at times pay out less than the entire
amount of net investment income earned in any particular month and may at times
in any particular month pay out such accumulated but undistributed income in
addition to net investment income earned in that month. As a result, the
dividends paid by the Fund for any particular month may be more or less than the
amount of net investment income earned by the Fund during such month. The Fund's
current accumulated but undistributed net investment income, if any, is
disclosed in the Statement of Net Assets, which comprises part of the financial
information included in this report.
20 & 21
MuniVest Fund, Inc., February 28, 2003
OFFICERS AND DIRECTORS
Terry K. Glenn, President and Director
Ronald W. Forbes, Director
Cynthia A. Montgomery, Director
Charles C. Reilly, Director
Kevin A. Ryan, Director
Roscoe S. Suddarth, Director
Richard R. West, Director
Edward D. Zinbarg, Director
Kenneth A. Jacob, Senior Vice President
John M. Loffredo, Senior Vice President
Fred K. Stuebe, Vice President
Donald C. Burke, Vice President and Treasurer
Brian D. Stewart, Secretary
Custodian
The Bank of New York
100 Church Street
New York, NY 10286
Transfer Agents
Common Stock:
The Bank of New York
101 Barclay Street
New York, NY 10286
Preferred Stock:
The Bank of New York
100 Church Street
New York, NY 10286
Amex Symbol
MVF
[LOGO] Merrill Lynch Investment Managers
[GRAPHICS OMITTED]
MuniVest Fund, Inc. seeks to provide shareholders with as high a level of
current income exempt from Federal income taxes as is consistent with its
investment policies and prudent investment management by investing primarily in
a portfolio of long-term, investment-grade municipal obligations, the interest
on which is exempt from Federal income taxes in the opinion of bond counsel to
the issuer.
This report, including the financial information herein, is transmitted to the
shareholders of MuniVest Fund, Inc. for their information. It is not a
prospectus, circular or representation intended for use in the purchase of
shares of the Fund or any securities mentioned in the report. Past performance
results shown in this report should not be considered a representation of future
performance. The Fund has leveraged its Common Stock and intends to remain
leveraged by issuing Preferred Stock to provide the Common Stock shareholders
with a potentially higher rate of return. Leverage creates risks for Common
Stock shareholders, including the likelihood of greater volatility of net asset
value and market price of shares of the Common Stock, and the risk that
fluctuations in the short-term dividend rates of the Preferred Stock may affect
the yield to Common Stock shareholders. Statements and other information herein
are as dated and are subject to change.
MuniVest Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
[RECYCLED LOGO] Printed on post-consumer recycled paper #10787--2/03
Item 2 - Did registrant adopt a code of ethics, as of the end of the period
covered by this report, that applies to the registrant's principal
executive officer, principal financial officer, principal accounting
officer or controller, or persons performing similar functions,
regardless of whether these individuals are employed by the registrant
or a third party? If not, why not? Briefly describe any amendments or
waivers that occurred during the period. State here if code of
ethics/amendments/waivers are on website and give website address-.
State here if fund will send code of ethics to shareholders without
charge upon request-- N/A (not answered until July 15, 2003 and only
annually for funds)
Item 3 - Did the registrant's board of directors determine that the registrant
either: (i) has at least one audit committee financial expert serving
on its audit committee; or (ii) does not have an audit committee
financial expert serving on its audit committee? If yes, disclose name
of financial expert and whether he/she is "independent," (fund may, but
is not required, to disclose name/independence of more than one
financial expert) If no, explain why not. -N/A (not answered until July
15, 2003 and only annually for funds)
Item 4 - Disclose annually only (not answered until December 15, 2003)
(a) Audit Fees - Disclose aggregate fees billed for each of the last
two fiscal years for professional services rendered by
the principal accountant for the audit of the
registrant's annual financial statements or services
that are normally provided by the accountant in
connection with statutory and regulatory filings or
engagements for those fiscal years. N/A.
(b) Audit-Related Fees - Disclose aggregate fees billed in each of the
last two fiscal years for assurance and
related services by the principal accountant
that are reasonably related to the performance
of the audit of the registrant's financial
statements and are not reported under
paragraph (a) of this Item. Registrants shall
describe the nature of the services comprising
the fees disclosed under this category. N/A.
(c) Tax Fees - Disclose aggregate fees billed in each of the last two
fiscal years for professional services rendered by the
principal accountant for tax compliance, tax advice, and
tax planning. Registrants shall describe the nature of
the services comprising the fees disclosed under this
category. N/A.
(d) All Other Fees - Disclose aggregate fees billed in each of the last
two fiscal years for products and services
provided by the principal accountant, other than
the services reported in paragraphs (a) through
(c) of this Item. Registrants shall describe the
nature of the services comprising the fees
disclosed under this category. N/A.
(e)(1) Disclose the audit committee's pre-approval policies and
procedures described in paragraph (c)(7) of Rule 2-01 of
Regulation S-X. N/A.
(e)(2) Disclose the percentage of services described in each of
paragraphs (b) through (d) of this Item that were approved by
the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule
2-01 of Regulation S-X. N/A.
(f) If greater than 50%, disclose the percentage of hours expended
on the principal accountant's engagement to audit the
registrant's financial statements for the most recent fiscal
year that were attributed to work performed by persons other
than the principal accountant's full-time, permanent
employees. N/A.
(g) Disclose the aggregate non-audit fees billed by the
registrant's accountant for services rendered to the
registrant, and rendered to the registrant's investment
adviser (not including any sub-adviser whose role is primarily
portfolio management and is subcontracted with or overseen by
another investment adviser), and any entity controlling,
controlled by, or under common control with the adviser that
provides ongoing services to the registrant for each of the
last two fiscal years of the registrant. N/A.
(h) Disclose whether the registrant's audit committee has
considered whether the provision of non-audit services that
were rendered to the registrant's investment adviser (not
including any subadviser whose role is primarily portfolio
management and is subcontracted with or overseen by another
investment adviser), and any entity controlling, controlled
by, or under common control with the investment adviser that
provides ongoing services to the registrant that were not
pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of
Regulation S-X is compatible with maintaining the principal
accountant's independence. N/A.
Items 5-6 - Reserved
Item 7 - For closed-end funds that contain voting securities in their portfolio,
describe the policies and procedures that it uses to determine how to
vote proxies relating to those portfolio securities. N/A (not answered
until July 1, 2003)
Item 8 -- Reserved
Item 9(a) - Disclose the conclusions of the registrant's principal executive
officer or officers and principal financial officer or officers, or
persons performing similar functions, about the effectiveness of the
registrant's disclosure controls and procedures (as defined in Rule
30a-2(c) under the Act (17 CFR 270.30a-2(c))) based on their
evaluation of these controls and procedures as of a date within 90
days of the filing date of the report that includes the disclosure
required by this paragraph. N/A (not answered until July 15, 2003
and only annually for funds)
Item 9(b) -- There were no significant changes in the registrant's internal
controls or in other factors that could significantly affect these
controls subsequent to the date of their evaluation, including any
corrective actions with regard to significant deficiencies and
material weaknesses.
Item 10 - Exhibits
10(a) - Attach code of ethics or amendments/waivers, unless code of ethics or
amendments/waivers is on website or offered to shareholders upon request
without charge. N/A.
10(b) - Attach certifications (4 in total pursuant to Sections 302 and 906 for
CEO/CFO). Attached hereto.
Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
MuniVest Fund, Inc.
By: /s/ Terry K. Glenn
------------------------
Terry K. Glenn,
President of
MuniVest Fund, Inc.
Date: April 21, 2003
Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, this report has been signed below by
the following persons on behalf of the registrant and in the capacities
and on the dates indicated.
By: /s/ Terry K. Glenn
------------------------
Terry K. Glenn,
President of
MuniVest Fund, Inc.
Date: April 21, 2003
By: /s/ Donald C. Burke
------------------------
Donald C. Burke,
Chief Financial Officer of
MuniVest Fund, Inc.
Date: April 21, 2003