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 811-05611
Name of Fund: MuniVest Fund, Inc.
Fund Address: P.O. Box 9011
Princeton, NJ 08543-9011
Name and address of agent for service: Robert C. Doll, Jr., Chief Executive
Officer, 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: 08/31/05
Date of reporting period: 09/01/04 - 08/31/05
Item 1 - Report to Stockholders
MuniVest Fund, Inc.
Annual Report
August 31, 2005
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,
net of dividends to Preferred Stock, 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 these securities. As of August 31, 2005, the percentage of the Fund's
total net assets invested in inverse floaters was 12.48%, before the deduction
of Preferred Stock.
Swap Agreements
The Fund may 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 or reduce exposure to a bond or market without owning or taking
physical custody of securities. Swap agreements involve the risk that the party
with whom the Fund has entered into the swap will default on its obligation to
pay the Fund and the risk that the Fund will not be able to meet its obligations
to pay the other party to the agreement.
2 MUNIVEST FUND, INC. AUGUST 31, 2005
A Letter From the President
Dear Shareholder
Amid what we've coined a "muddle through" year for the financial markets, the
major market benchmarks managed to post positive results for the current
reporting period:
Total Returns as of August 31, 2005 6-month 12-month
====================================================================================
U.S. equities (Standard & Poor's 500 Index) +2.33% +12.56%
------------------------------------------------------------------------------------
Small-cap U.S. equities (Russell 2000 Index) +5.75% +23.10%
------------------------------------------------------------------------------------
International equities (MSCI Europe Australasia Far East Index) +1.98% +23.58%
------------------------------------------------------------------------------------
Fixed income (Lehman Brothers Aggregate Bond Index) +2.85% + 4.15%
------------------------------------------------------------------------------------
Tax-exempt fixed income (Lehman Brothers Municipal Bond Index) +2.85% + 5.31%
------------------------------------------------------------------------------------
High yield bonds (Credit Suisse First Boston High Yield Index) +1.35% + 8.98%
------------------------------------------------------------------------------------
Since June 2004, the Federal Reserve Board (the Fed) has tirelessly advanced its
interest rate-hiking program, bringing the federal funds rate to 3.5% by August
31 (and to 3.75% on September 20). Economists and investors have struggled to
project the Fed's future moves, vacillating from expectations for an impending
end to monetary tightening to fears that the central bank may increase interest
rates more than is necessary to moderate economic growth and keep inflation in
check. Most recently, the devastation of Hurricane Katrina added a new element
of ambiguity in terms of its impact on the economy and Fed sentiment. Many now
believe the Fed will suspend its interest rate-hiking campaign at some point
this year.
Equity market returns over the past several months have reflected a degree of
investor uncertainty. After a strong finish to 2004, the S&P 500 Index posted
gains in four of the first eight months of 2005. Up to this point, strong
corporate earnings reports and low long-term bond yields have worked in favor of
equities. Factors that pose the greatest risks to stocks include record-high oil
prices, continued interest rate hikes and the possibility for disappointing
earnings for the remainder of the year.
Fixed income markets have fared relatively well in the face of monetary
tightening. As the short end of the yield curve moved in concert with Fed
interest rate hikes, long-term bond yields remained low, perpetuating the yield
curve flattening trend. Because bond prices move in the opposite direction of
yields, the result has been that longer-term bonds have outperformed short-term
bonds. At period end, the spread between two-year and 10-year Treasury yields
was just 18 basis points (.18%).
Financial markets are likely to face continued crosscurrents for the remainder
of 2005, particularly as the economy digests the impact of Hurricane Katrina.
Nevertheless, opportunities do exist and we encourage you to work with your
financial advisor to diversify your portfolio among a variety of asset types.
This can help to diffuse risk while also tapping into the potential benefits of
a broader range of investment alternatives. As always, we thank you for trusting
Merrill Lynch Investment Managers with your investment assets.
Sincerely,
/s/ Robert C. Doll, Jr.
Robert C. Doll, Jr.
President and Director
MUNIVEST FUND, INC. AUGUST 31, 2005 3
A Discussion With Your Fund's Portfolio Manager
Fund performance exceeded its comparable Lipper category average for the
period, benefiting from an above-average dividend yield and positive security
selection.
Describe the recent market environment relative to municipal bonds.
Over the past year, long-term bond yields generally declined as their prices,
which move in the opposite direction, increased. Most recently, the devastation
of Hurricane Katrina throughout the U.S. Gulf Coast prompted a strong rally in
bond prices. The resultant higher energy prices and expected declines in
consumer confidence and spending pushed longer-term interest rates lower as the
period came to a close.
The Federal Reserve Board (the Fed) continued to raise short-term interest rates
at each of its meetings during the period, lifting the federal funds target to
3.50% by period-end (and to 3.75% on September 20). As short-term interest rates
moved higher in concert with the Fed interest rate hikes and longer-term bond
yields declined, the yield curve continued to flatten. During the past 12
months, 30-year U.S. Treasury bond yields declined 68 basis points (.68%) to
4.25% and 10-year Treasury note yields fell 11 basis points to 4.02%. By
comparison, the two-year Treasury yield rose 143 basis points to 3.84%.
Tax-exempt bond yields exhibited a similar pattern during the year. The yield on
30-year revenue bonds, as measured by the Bond Buyer Revenue Bond Index, fell 26
basis points to 4.83%. According to Municipal Market Data, the yield on
AAA-rated issues maturing in 30 years declined 48 basis points to 4.22% while
the yield on AAA-rated bonds maturing in 10 years remained unchanged at 3.50%.
Declining tax-exempt bond yields continued to encourage municipalities to issue
new debt and refund outstanding, higher-couponed issues. Over the past year,
more than $384 billion in new long-term tax-exempt bonds was issued, an increase
of greater than 7.5% versus last year's total of $357 billion. In the past six
months, more than $217 billion in new municipal bonds was underwritten, an
increase of 16.3% versus the same period in 2004. During the first six months of
2005, the volume of refunding issues increased more than 50% compared to
underwritings during the first half of 2004. In August 2005, refunding issuance
increased 18% compared to August 2004 levels. The refunding issues have been
heavily weighted in the 10-year - 20-year maturity range, putting pressure on
intermediate tax-exempt bond yields while supporting longer-term bond prices.
Investor demand for municipal product has remained generally positive. The most
current statistics from the Investment Company Institute indicate that,
year-to-date through July 31, 2005, net new cash flows into long-term municipal
bond funds have exceeded $4.2 billion -- a significant improvement from the
$12.4 billion net outflow seen during the same period in 2004. Weekly figures
for August, as reported by AMG Data Service, pointed to continued positive
flows.
Notably, throughout much of the past six months, high yield tax-exempt bond
funds have been the principal target for the new cash inflows. During August,
these lower-rated/non-rated bond funds received an average of $150 million per
week. The need to invest these cash flows has led to strong demand for
lower-rated issues and a consequent narrowing of credit spreads. Additionally,
an increasing percentage of insured issuance has further reduced the
availability of lower-rated municipal securities, lending more support to higher
prices for these issues.
Municipal bond issues have underperformed their taxable counterparts in recent
months as U.S. Treasury bonds have enjoyed increased demand from foreign
governments, which are unable to benefit from the tax advantage inherent in
tax-exempt products. This underperformance, however, has resulted in attractive
tax-exempt bond yield ratios and, we believe, should continue to attract both
traditional and nontraditional investors to the municipal marketplace.
The communities shattered by Hurricane Katrina will require extensive
reconstruction. It is too early to estimate the amount of tax-exempt debt that
may be required to finance these efforts or to assess the overall impact on the
municipal market. However, much of the rebuilding is likely to be funded through
federal loans and grants, and the reconstruction will probably be spread over a
number of years. Consequently, any municipal bond issuance prompted by Katrina
is not likely to disrupt the tax-exempt market in the near future.
How did the Fund perform during the fiscal year in light of the existing market
conditions?
For the 12-month period ended August 31, 2005, the Common Stock of MuniVest
Fund, Inc. had net annualized yields of 6.57% and 6.62%, based on a year-end per
share net asset value of $10.23 and a per share market price of $10.15,
respectively, and $.672 per share income dividends.
4 MUNIVEST FUND, INC. AUGUST 31, 2005
Over the same period, the total investment return on the Fund's Common Stock was
+10.64%, based on a change in per share net asset value from $9.91 to $10.23,
and assuming reinvestment of all distributions.
The Fund's total return, based on net asset value, exceeded the +9.74% average
return of the Lipper General Municipal Debt Funds (Leveraged) category for the
12-month period. (Funds in this Lipper category invest primarily in municipal
debt issues rated in the top four credit-rating categories. These funds can be
leveraged via use of debt, preferred equity and/or reverse repurchase
agreements.) The Fund outperformed despite its generally defensive market
posture in an environment where long-term interest rates declined. Benefiting
performance was the Fund's above-average dividend yield, continued strong price
performance from its lower-rated holdings, and positive security selection.
Recently, performance also has been aided by the refunding of a large portion of
the Fund's tobacco-related holdings and significant price improvement in its
California bonds.
For the six-month period ended August 31, 2005, the total investment return on
the Fund's Common Stock was +4.91%, based on a change in per share net asset
value from $10.09 to $10.23, and assuming reinvestment of all distributions.
For a description of the Fund's total investment return based on a change in the
per share market value of the Fund's Common Stock (as measured by the trading
price of the Fund's shares on the American Stock Exchange), and assuming
reinvestment of dividends, please refer to the Financial Highlights section of
this report. As a closed-end fund, the Fund's shares may trade in the secondary
market at a premium or discount to the Fund's net asset value. As a result,
total investment returns based on changes in the market value of the Fund's
Common Stock can vary significantly from total investment returns based on
changes in the Fund's net asset value.
What changes were made to the portfolio during the period?
The demand for securities rated BBB and below has remained quite strong,
resulting in ongoing price appreciation for these issues. We expect the demand
for higher-yielding bonds to remain positive in the near term. However, given
the magnitude of the recent price appreciation, we intend to closely monitor
these lower-rated holdings and will look to increase the Fund's overall credit
quality profile should attractively priced, higher-rated securities become
available.
As the fiscal period progressed, we increased the portfolio's exposure to more
interest rate-sensitive issues and moved the Fund to a more neutral market
position. We made this shift as the Fed appears to be nearing the end of its
monetary tightening campaign, and it does not seem likely that long-term
interest rates will rise significantly.
For the six-month period ended August 31, 2005, the Fund's Auction Market
Preferred Stock (AMPS) had average yields as follows: Series A, 2.42%; Series B,
2.06%; Series C, 2.17%; Series D, 2.46%; Series E, 2.18%; and Series F, 2.28%.
Continued short-term interest rate increases by the Fed have boosted the Fund's
borrowing costs throughout the 12-month period. Although we believe the majority
of the Fed's actions have already occurred, additional interest rate hikes are
expected until at least year-end. Nevertheless, the Fund's borrowing costs have
remained historically very low, and the leveraging of Preferred Stock has
continued to generate an income benefit to the holders of Common Stock. 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. At the end of the period, the Fund's leverage amount, due
to AMPS, was 34.73% of total net assets. (For a more complete explanation of the
benefits and risks of leveraging, see page 2 of this report to shareholders.)
How would you characterize the Fund's position at the close of the period?
We ended the period with a more neutral posture in terms of interest rate risk.
The Fed is believed to be nearing the end of its current monetary tightening
cycle, and inflationary pressures remain well contained. In the aftermath of
Hurricane Katrina, U.S. economic growth will likely slow in the near term,
thereby supporting higher long-term bond prices in the months ahead. Amid these
conditions, we have positioned the Fund to perform well in stable to declining
interest rate environments. In addition, we intend to maintain the Fund's fully
invested stance in an effort to enhance shareholder income.
Fred K. Stuebe
Vice President and Portfolio Manager
September 20, 2005
MUNIVEST FUND, INC. AUGUST 31, 2005 5
Special Message to Shareholders
A Municipal Bonds Update in the Aftermath of Hurricane Katrina
Hurricane Katrina caused tremendous human suffering, and the total damage
estimates are currently ranging as high as $200 billion, making it the worst
natural disaster to hit the United States. Despite the widespread devastation
from the storm, we believe that there should be no long-term negative effect on
the credit ratings of state and local governments in Louisiana, Mississippi and
Alabama. It is our view that the affected states should recover with no major
long-term financial or economic damage. These states possess broad-based
economies outside of the areas suffering hurricane destruction, and, as
sovereign entities, maintain the exclusive right to collect a broad array of tax
revenues.
Given the extent of the damage from the hurricane, the local entities most
heavily affected, including New Orleans, Biloxi and Mobile, could possibly face
credit rating downgrades in the near term due to constrained financial
operations resulting from reduced economic activity and short-term cash flow
disruptions. However, we do not view any credit deterioration as a long-term
trend and believe these areas also will recover. Like states, these
municipalities retain strong revenue-raising abilities, particularly property
and sales taxes, and also can reduce expenses.
The region's recovery likely will be aided by an injection of revenues in the
form of federal emergency aid, private insurance and charitable contributions.
However, given the severity of the damage from Hurricane Katrina, it is
difficult to predict the length of recovery and the amount and timing of
additional federal aid or claims paid by private municipal bond insurers. Many
public entities have issued insured debt, for which private insurers guarantee
timely payment of principal and interest. This especially benefits holders of
bonds secured by more economically sensitive revenues, such as hotel and sales
taxes, which are expected to slow significantly in the short term. We do not
foresee any widespread or prolonged debt service defaults. The few defaults that
may occur should be temporary in nature, and we believe there will be a complete
recovery over a short period of time.
John M. Loffredo
Managing Director and Co-Chief Investment Officer
Municipal Products Group of Merrill Lynch Investment Managers
September 20, 2005
Portfolio Information as of August 31, 2005
--------------------------------------------------------------------------------
Quality Ratings by Percent of
S&P/Moody's Total Investments
--------------------------------------------------------------------------------
AAA/Aaa .............................................................. 33.3%
AA/Aa ................................................................ 15.0
A/A .................................................................. 22.4
BBB/Baa .............................................................. 25.3
BB/Ba ................................................................ 2.4
B/B .................................................................. 0.9
NR (Not Rated) ....................................................... 0.6
Other* ............................................................... 0.1
--------------------------------------------------------------------------------
* Includes portfolio holdings in variable rate demand notes.
6 MUNIVEST FUND, INC. AUGUST 31, 2005
Schedule of Investments (in Thousands)
Face
Amount Municipal Bonds Value
=========================================================================================================
Alabama--2.8%
$ 2,550 Camden, Alabama, IDB, Exempt Facilities Revenue
Bonds (Weyerhaeuser Company), Series A,
6.125% due 12/01/2024 $ 2,843
Huntsville, Alabama, Health Care Authority
Revenue Bonds:
3,500 Series A, 5.75% due 6/01/2031 3,741
5,000 Series B, 5.75% due 6/01/2032 5,388
5,000 Selma, Alabama, IDB, Environmental Improvement
Revenue Refunding Bonds (International Paper
Company Project), Series B, 5.50% due 5/01/2020 5,298
=========================================================================================================
Alaska--1.3%
7,405 Anchorage, Alaska, Lease Revenue Bonds (Correctional
Facility), 6% due 2/01/2010 (a)(i) 8,263
200 Valdez, Alaska, Marine Terminal Revenue Refunding
Bonds (BP Pipelines Inc. Project), VRDN, Series B,
2.35% due 7/01/2037 (l) 200
=========================================================================================================
Arizona--1.6%
4,375 Maricopa County, Arizona, IDA, Education Revenue
Bonds (Arizona Charter Schools Project 1), Series A,
6.75% due 7/01/2029 4,323
Pima County, Arizona, IDA, Education Revenue Bonds
(Arizona Charter Schools Project):
2,100 Series E, 7.25% due 7/01/2031 2,257
500 Series I, 6.10% due 7/01/2024 512
1,000 Series I, 6.30% due 7/01/2031 1,025
1,610 Pima County, Arizona, IDA, Education Revenue Refunding
Bonds (Arizona Charter Schools Project II), Series A,
6.75% due 7/01/2021 1,700
=========================================================================================================
California--21.6%
California State Public Works Board, Lease Revenue Bonds:
5,000 (Department of Corrections), Series C, 5.50%
due 6/01/2022 5,541
6,000 (Department of Corrections), Series C, 5.50%
due 6/01/2023 6,631
10,775 (Department of Mental Health--Coalinga
State Hospital), Series A, 5.125% due 6/01/2029 11,417
California State, Various Purpose, GO:
13,570 5.50% due 4/01/2030 15,335
16,250 5.50% due 11/01/2033 18,288
5,240 California Statewide Communities Development
Authority, Health Facility Revenue Bonds (Memorial
Health Services), Series A, 6% due 10/01/2023 5,887
Golden State Tobacco Securitization Corporation of
California, Tobacco Settlement Revenue Bonds:
10,725 Series A-3, 7.875% due 6/01/2042 13,478
3,750 Series A-4, 7.80% due 6/01/2042 4,694
1,425 Series A-5, 7.875% due 6/01/2042 1,791
13,900 Series B, 5.375% due 6/01/2010 (a) 15,230
8,850 Series B, 5.50% due 6/01/2013 (a) 10,044
20,000 Series B, 5.50% due 6/01/2013 (a)(f) 22,697
4,000 Golden State Tobacco Securitization Corporation of
California, Tobacco Settlement Revenue Refunding
Bonds, Series A, 5% due 6/01/2035 (f) 4,244
=========================================================================================================
Colorado--2.5%
9,915 Arapahoe County, Colorado, School District Number 005,
GO (Cherry Creek) 6% due 12/15/2009 (a) 11,003
Colorado HFA, Revenue Refunding Bonds (S/F Program),
AMT, Senior Series A-2:
1,040 6.60% due 5/01/2028 1,059
310 7.50% due 4/01/2031 322
3,000 Colorado Health Facilities Authority Revenue Bonds
(Lutheran Medical Center), Series A, 5.25%
due 6/01/2034 3,143
=========================================================================================================
Connecticut--0.5%
2,810 Mohegan Tribe Indians Gaming Authority, Connecticut,
Public Improvement Revenue Refunding Bonds
(Priority Distribution), 6.25% due 1/01/2031 3,035
=========================================================================================================
Florida--2.8%
6,000 Highlands County, Florida, Health Facilities Authority,
Hospital Revenue Bonds (Adventist Health System),
Series D, 5.375% due 11/15/2035 6,351
10,320 Orange County, Florida, Health Facilities Authority,
Hospital Revenue Bonds (Adventist Health System),
5.625% due 11/15/2032 11,115
=========================================================================================================
Georgia--2.9%
Georgia Municipal Electric Authority, Power Revenue
Refunding Bonds:
4,600 Series W, 6.60% due 1/01/2018 5,541
250 Series W, 6.60% due 1/01/2018 (e) 300
250 Series Y,10% due 1/01/2010 (e) 317
Milledgeville-Baldwin County, Georgia, Development
Authority Revenue Bonds (Georgia College and State
University Foundation):
4,390 5.50% due 9/01/2024 4,674
2,000 5.625% due 9/01/2030 2,128
4,785 Monroe County, Georgia, Development Authority, PCR,
Refunding (Oglethorpe Power Corporation--Scherer),
Series A, 6.80% due 1/01/2011 5,514
=========================================================================================================
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)
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
S/F Single-Family
VRDN Variable Rate Demand Notes
MUNIVEST FUND, INC. AUGUST 31, 2005 7
Schedule of Investments (continued) (in Thousands)
Face
Amount Municipal Bonds Value
=========================================================================================================
Idaho--0.1%
$ 815 Idaho Housing Agency, S/F Mortgage Revenue Refunding
Bonds, AMT, Series E-2, 6.90% due 1/01/2027 $ 822
=========================================================================================================
Illinois--17.3%
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) 5,473
Chicago, Illinois, O'Hare International Airport Revenue
Bonds, AMT:
11,200 3rd Lien, Series B-2, 6% due 1/01/2029 (n) 12,714
8,540 Series 368, DRIVERS, 9.168% due 7/01/2011 (c)(m) 10,927
7,000 Chicago, Illinois, O'Hare International Airport, Revenue
Refunding Bonds, DRIVERS, AMT, Series 253, 8.668%
due 1/01/2020 (c)(m) 8,325
120 Chicago, Illinois, S/F Mortgage Revenue Bonds, AMT,
Series C, 7% due 3/01/2032 (d)(k) 122
10,000 Hodgkins, Illinois, Environmental Improvement Revenue
Bonds (Metro Biosolids Management LLC Project),
AMT, 6% due 11/01/2023 10,648
2,140 Illinois Development Finance Authority Revenue Bonds
(Community Rehabilitation Providers Facilities),
Series A, 6.50% due 7/01/2022 2,318
1,365 Illinois Development Finance Authority, Revenue
Refunding Bonds (Community Rehabilitation Providers
Facilities), Series A, 6% due 7/01/2015 1,415
1,685 Illinois HDA, Revenue Refunding Bonds (M/F Program),
Series 5, 6.75% due 9/01/2023 1,707
600 Illinois State Finance Authority Revenue Bonds
(Northwestern University), VRDN, Sub-Series A, 2.48%
due 12/01/2034 (l) 600
5,245 Kane and De Kalb Counties, Illinois, Community Unit
School District Number 302, GO, DRIVERS, Series 283,
8.699% due 2/01/2018 (f)(m) 6,743
McLean and Woodford Counties, Illinois, Community
Unit, School District Number 005, GO, Refunding (i):
5,000 6.25% due 12/01/2014 5,782
4,000 6.375% due 12/01/2016 4,675
18,550 Metropolitan Pier and Exposition Authority, Illinois,
Dedicated State Tax Revenue Refunding Bonds
(McCormick Place Expansion Project), Series B, 5.75%
due 6/15/2023 (c) 21,066
Regional Transportation Authority, Illinois, Revenue Bonds:
3,500 Series A, 7.20% due 11/01/2020 (h) 4,489
4,000 Series C, 7.75% due 6/01/2020 (f) 5,664
3,000 Will County, Illinois, Environmental Revenue Bonds
(Mobil Oil Refining Corporation Project), AMT, 6.40%
due 4/01/2026 3,113
Will County, Illinois, School District Number 122
(New Lenox Elementary), GO Series A (i):
1,475 6.50% due 11/01/2010 (a) 1,704
505 6.50% due 11/01/2013 578
395 6.50% due 11/01/2015 452
=========================================================================================================
Indiana--6.5%
1,700 Fort Wayne, Indiana, PCR, Refunding (General Motors
Corporation Project), 6.20% due 10/15/2025 1,704
6,500 Indiana Health Facility Financing Authority, Hospital
Revenue Refunding Bonds (Clarian Health Partners
Inc.), Series A, 6% due 2/15/2021 6,822
4,290 Indiana State HFA, S/F Mortgage Revenue Refunding
Bonds, Series A, 6.80% due 1/01/2017 (j) 4,297
8,195 Indiana Transportation Finance Authority, Highway
Revenue Bonds, Series A, 6.80% due 12/01/2016 10,053
15,335 Indianapolis, Indiana, Local Public Improvement Bond,
Bank Revenue Refunding Bonds, Series D, 6.75%
due 2/01/2014 18,184
=========================================================================================================
Kansas--0.6%
3,805 Sedgwick and Shawnee Counties, Kansas, S/F
Mortgage Revenue Bonds (Mortgage-Backed
Securities Program), AMT, Series A-4, 5.95%
due 12/01/2033 (d) 3,972
=========================================================================================================
Louisiana--1.8%
10,575 Louisiana Local Government, Environmental
Facilities, Community Development Authority
Revenue Bonds (Capital Projects and Equipment
Acquisition), Series A, 6.30% due 7/01/2030 (h) 11,506
=========================================================================================================
Maine--0.3%
Portland, Maine, Housing Development Corporation,
Senior Living Revenue Bonds (Avesta Housing
Development Corporation Project), Series A:
775 5.70% due 8/01/2021 815
1,190 6% due 2/01/2034 1,253
=========================================================================================================
Maryland--0.2%
1,425 Maryland State Health and Higher Educational
Facilities Authority, Revenue Bonds (Union Hospital
of Cecil County), 5% due 7/01/2035 1,470
=========================================================================================================
Massachusetts--9.9%
2,035 Boston, Massachusetts, Water and Sewer
Commission Revenue Bonds, 9.25%
due 1/01/2011 (e) 2,575
3,010 Massachusetts Bay Transportation Authority, Revenue
Refunding Bonds (General Transportation System),
Series A, 7% due 3/01/2019 3,837
3,380 Massachusetts State Health and Educational
Facilities Authority, Revenue Bonds (University of
Massachusetts Memorial Healthcare), Series D,
5% due 7/01/2033 3,419
10,000 Massachusetts State School Building Authority,
Dedicated Sales Tax Revenue Bonds, DRIVERS,
Series 1052, 7.21% due 8/15/2013 (i)(m) 11,408
30,000 Massachusetts State Water Resource Authority
Revenue Bonds, Series A, 6.50% due 7/15/2019 36,689
3,480 Massachusetts State Water Resource Authority,
Revenue Refunding Bonds, Series A, 6%
due 8/01/2010 (a)(f) 3,940
=========================================================================================================
Michigan--3.4%
7,695 Delta County, Michigan, Economic Development
Corporation, Environmental Improvement Revenue
Refunding Bonds (Mead Westvaco-Escanaba),
Series A, 6.25% due 4/15/2012 (a) 8,974
Macomb County, Michigan, Hospital Finance
Authority, Hospital Revenue Bonds (Mount
Clemens General Hospital) Series B:
3,715 5.75% due 11/15/2025 3,763
5,250 5.875% due 11/15/2034 5,349
1,900 Michigan State Hospital Finance Authority, Hospital
Revenue Refunding Bonds (Crittenton Hospital),
Series A, 5.625% due 3/01/2027 2,038
Michigan State Hospital Finance Authority, Revenue
Refunding Bonds:
390 (Ascension Health Credit), Series A, 6.125%
due 11/15/2009 (a) 436
1,000 (Sinai Hospital), 6.70% due 1/01/2026 1,013
8 MUNIVEST FUND, INC. AUGUST 31, 2005
Schedule of Investments (continued) (in Thousands)
Face
Amount Municipal Bonds Value
=========================================================================================================
Minnesota--1.5%
$ 7,235 Minneapolis, Minnesota, Health Care System Revenue
Bonds (Allina Health System), Series A, 5.75%
due 11/15/2032 $ 7,790
1,405 Saint Cloud, Minnesota, Health Care Revenue Refunding
Bonds (Saint Cloud Hospital Obligation Group),
Series A, 6.25% due 5/01/2017 (i) 1,593
=========================================================================================================
Mississippi--4.9%
Lowndes County, Mississippi, Solid Waste Disposal and
PCR, Refunding (Weyerhaeuser Company Project):
3,710 Series A, 6.80% due 4/01/2022 4,559
4,000 Series B, 6.70% due 4/01/2022 4,918
20,705 Mississippi Business Finance Corporation, Mississippi,
PCR, Refunding (System Energy Resources Inc. Project),
5.875% due 4/01/2022 21,281
=========================================================================================================
Missouri--0.5%
2,600 Missouri State Development Finance Board, Infrastructure
Facilities Revenue Refunding Bonds (Branson), Series A,
5.50% due 12/01/2032 2,738
290 Missouri State Housing Development Commission,
S/F Mortgage Revenue Bonds (Homeowner Loan),
AMT, Series A, 7.50% due 3/01/2031 (d) 303
=========================================================================================================
Montana--1.0%
6,000 Forsyth, Montana, PCR, Refunding (Portland General
Electric Company), Series A, 5.20% due 5/01/2033 6,269
=========================================================================================================
Nebraska--0.1%
655 Nebraska Investment Finance Authority, S/F Housing
Revenue Bonds, AMT, Series C, 6.30%
due 9/01/2028 (d)(k) 662
=========================================================================================================
Nevada--1.9%
6,700 Clark County, Nevada, IDR (Power Company Project),
AMT, Series A, 6.70% due 6/01/2022 (f) 6,761
Nevada Housing Division, Multi-Unit Housing
Revenue Bonds:
3,475 (Arville Electric Project), AMT,
6.60% due 10/01/2023 (b) 3,573
1,235 Issue B, 7.45% due 10/01/2017 (b) 1,249
Nevada Housing Division Revenue Bonds (S/F Program)
AMT (j):
225 Senior Series E, 7% due 10/01/2019 228
60 Series A, 6.55% due 10/01/2012 60
=========================================================================================================
New Hampshire--0.5%
2,675 New Hampshire Health and Education Facilities
Authority, Revenue Refunding Bonds (Elliot Hospital),
Series B, 5.60% due 10/01/2022 2,870
=========================================================================================================
New Jersey--5.3%
New Jersey EDA, Cigarette Tax Revenue Bonds:
9,080 5.50% due 6/15/2024 9,644
2,885 5.75% due 6/15/2029 3,116
2,855 5.50% due 6/15/2031 3,018
6,695 5.75% due 6/15/2034 7,196
8,480 Tobacco Settlement Financing Corporation of New Jersey
Revenue Bonds, 7% due 6/01/2041 10,135
=========================================================================================================
New Mexico--0.5%
3,300 Farmington, New Mexico, PCR, Refunding (Public
Service Company--San Juan Project), Series A, 5.80%
due 4/01/2022 3,394
=========================================================================================================
New York--15.4%
1,250 Metropolitan Transportation Authority, New York,
Revenue Bonds, Series B, 5% due 11/15/2031 1,324
6,000 Metropolitan Transportation Authority, New York,
Revenue Refunding Bonds, Series A, 5.125%
due 11/15/2031 6,429
7,655 New York City, New York, City Municipal Water
Finance Authority, Water and Sewer System, Revenue
Refunding Bonds, Series B, 5% due 6/15/2036 8,104
7,875 New York City, New York, City Transitional Finance
Authority Revenue Bonds, RIB, Series 283,
5% due 5/15/2010 (m) 10,175
New York City, New York, GO:
4,415 Series A, 5% due 8/01/2030 4,664
1,500 Series D, 5% due 11/01/2027 1,583
7,150 Series F, 5.25% due 1/15/2033 7,626
20 Series I, 6.25% due 4/15/2017 (n) 21
1,510 Series I, 6.25% due 4/15/2007 (a)(n) 1,606
5,850 Series M, 5% due 4/01/2030 6,172
8,225 Series M, 5% due 4/01/2035 8,660
10,000 Series O, 5% due 6/01/2030 10,557
New York City, New York, GO, Refunding:
7,035 Series A, 6.375% due 5/15/2010 (a)(f) 8,095
965 Series A, 6.375% due 5/15/2014 (f) 1,102
4,000 Series G, 5% due 12/01/2033 4,206
New York State Dormitory Authority, Revenue
Refunding Bonds:
1,000 (Mount Sinai Health), Series A, 6.50%
due 7/01/2025 1,068
11,875 RIB, Series 305, 9.22% due 5/15/2015 (c)(m) 14,984
=========================================================================================================
North Carolina--0.6%
3,760 Gaston County, North Carolina, Industrial Facilities
and Pollution Control Financing Authority, Revenue
Bonds (National Gypsum Company Project), AMT,
5.75% due 8/01/2035 3,930
=========================================================================================================
Oregon--1.0%
2,000 Portland, Oregon, Airport Way, Urban Renewal and
Redevelopment Tax Allocation Refunding Bonds,
Series A, 6% due 6/15/2015 (h) 2,254
3,305 Portland, Oregon, Sewer System Revenue Bonds, RIB,
Series 386, 8.70% due 8/01/2020 (f)(m) 4,068
=========================================================================================================
Pennsylvania--4.0%
2,440 Pennsylvania State Higher Education Assistance
Agency Revenue Bonds, Capital Acquisition,
6.125% due 12/15/2010 (a)(c) 2,783
6,250 Pennsylvania State Higher Educational Facilities
Authority Revenue Bonds (University of
Pennsylvania Medical Center Health System),
Series A, 6% due 1/15/2031 6,899
Philadelphia, Pennsylvania, Authority for Industrial
Development, Senior Living Revenue Bonds:
1,000 (Arbor House Inc. Project), Series E,
6.10% due 7/01/2033 1,059
1,355 (Rieder House Project), Series A, 6.10%
due 7/01/2033 1,435
9,280 Sayre, Pennsylvania, Health Care Facilities Authority,
Revenue Bonds (Guthrie Healthcare System),
Series B, 7.125% due 12/01/2031 11,095
1,750 Sayre, Pennsylvania, Health Care Facilities Authority,
Revenue Refunding Bonds (Guthrie Healthcare
System), Series A, 6.25% due 12/01/2018 1,954
=========================================================================================================
MUNIVEST FUND, INC. AUGUST 31, 2005 9
Schedule of Investments (continued) (in Thousands)
Face
Amount Municipal Bonds Value
=========================================================================================================
South Carolina--1.9%
$ 3,500 Lexington County, South Carolina, Health Services
District Inc., Hospital Revenue Refunding and
Improvement Bonds, 5.50% due 11/01/2032 $ 3,715
2,450 Medical University Hospital Authority, South Carolina,
Hospital Facilities Revenue Refunding Bonds, 6.50%
due 8/15/2012 (a) 2,916
5,000 Richland County, South Carolina, Environmental
Improvement Revenue Refunding Bonds (International
Paper), AMT, 6.10% due 4/01/2023 5,409
=========================================================================================================
Tennessee--1.6%
300 Clarksville, Tennessee, Public Building Authority Revenue
Bonds, Pooled Financing (Tennessee Municipal Bond
Fund), VRDN, 2.35% due 7/01/2034 (l) 300
2,000 McMinn County, Tennessee, IDB, Solid Waste Revenue
Bonds (Recycling Facility--Calhoun Newsprint), AMT,
7.40% due 12/01/2022 2,028
6,500 Shelby County, Tennessee, Health, Educational and
Housing Facility Board, Hospital Revenue Refunding
Bonds (Methodist Healthcare) 6.50% due 9/01/2012 (a) 7,719
=========================================================================================================
Texas--19.0%
Austin, Texas, Convention Center Revenue Bonds
(Convention Enterprises Inc.), First Tier, Series A:
6,000 6.70% due 1/01/2028 6,474
1,290 6.70% due 1/01/2032 1,375
100 Bell County, Texas, Health Facilities Development
Corporation, Hospital Revenue Bonds (Scott & White
Memorial Hospital), VRDN, Series B-1, 2.36%
due 8/15/2029 (c)(l) 100
Brazos River Authority, Texas, PCR, Refunding, AMT:
3,000 (Texas Utilities Electric Company Project), Series B,
5.40% due 5/01/2029 3,043
3,055 (Texas Utility Company), Series A, 7.70%
due 4/01/2033 3,675
11,870 (Utilities Electric Company), Series B, 5.05%
due 6/01/2030 12,004
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 12,744
3,000 Gregg County, Texas, Health Facilities Development
Corporation, Hospital Revenue Bonds (Good Shepherd
Medical Center Project), 6.875% due 10/01/2020 (g) 3,443
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 10,610
8,000 Gulf Coast, Texas, Waste Disposal Authority, Revenue
Refunding Bonds (International Paper Company), AMT,
Series A, 6.10% due 8/01/2024 8,584
5,500 Harris County, Houston, Texas, Sports Authority,
Revenue Refunding Bonds, Senior Lien, Series G, 5.75%
due 11/15/2020 (c) 6,110
10,485 Harris County, Texas, Health Facilities Development
Corporation, Revenue Refunding Bonds, DRIVERS,
Series 1018, 8.688% due 7/01/2010 (m) 14,995
1,795 Houston, Texas, Industrial Development Corporation
Revenue Bonds (Air Cargo), AMT, 6.375%
due 1/01/2023 1,870
2,030 Mansfield, Texas, Independent School District, GO,
Refunding, 6.625% due 2/15/2015 2,309
9,355 Matagorda County, Texas, Navigation District Number 1,
Revenue Refunding Bonds (Centerpoint Energy Project),
5.60% due 3/01/2027 9,860
5,225 Midway, Texas, Independent School District, GO,
Refunding, 6.125% due 8/15/2014 5,871
2,700 Port Corpus Christi, Texas, Revenue Refunding Bonds
(Celanese Project), Series A, 6.45% due 11/01/2030 2,892
5,000 Red River Authority, Texas, PCR, Refunding (Celanese
Project), AMT, Series B, 6.70% due 11/01/2030 5,425
6,250 San Antonio, Texas, Electric and Gas Revenue Bonds,
RIB, Series 469x, 8.75% due 2/01/2014 (m) 7,581
=========================================================================================================
Vermont--0.2%
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 1,073
=========================================================================================================
Virginia--0.2%
1,425 Chesterfield County, Virginia, IDA, PCR (Virginia Electric
and Power Company), Series A, 5.875% due 6/01/2017 1,567
=========================================================================================================
Washington--8.2%
Energy Northwest, Washington, Electric Revenue
Refunding Bonds, DRIVERS (m):
5,330 Series 248, 8.699% due 7/01/2018 (c) 6,707
3,510 Series 255, 9.195% due 7/01/2018 (h) 4,545
7,350 Series 256, 9.198% due 7/01/2017 (c) 9,585
2,440 Seattle, Washington, Housing Authority Revenue Bonds
(Replacement Housing Project), 6.125% due 12/01/2032 2,452
8,100 Washington State, GO, Trust Receipts, Class R, Series 6,
9.071% due 1/01/2014 (i)(m) 9,928
14,320 Washington State Public Power Supply System, Revenue
Refunding Bonds (Nuclear Project Number 1), Series B,
7.125% due 7/01/2016 18,346
=========================================================================================================
Wisconsin--2.4%
4,260 Badger Tobacco Asset Securitization Corporation,
Wisconsin, Asset-Backed Revenue Bonds, 6.125%
due 6/01/2027 4,559
1,765 Milwaukee, Wisconsin, Revenue Bonds (Air Cargo),
AMT, 6.50% due 1/01/2025 1,871
5,000 Wisconsin State Health and Educational Facilities
Authority, Mortgage Revenue Bonds (Hudson
Memorial Hospital), 5.70% due 1/15/2029 (j) 5,367
3,040 Wisconsin State Health and Educational Facilities
Authority Revenue Bonds (Synergyhealth Inc.), 6%
due 11/15/2032 3,303
=========================================================================================================
Wyoming--2.1%
Sweetwater County, Wyoming, Solid Waste Disposal
Revenue Bonds (FMC Corporation Project), AMT:
5,425 Series A, 7% due 6/01/2024 5,485
7,475 Series B, 6.90% due 9/01/2024 7,557
=========================================================================================================
U.S. Virgin Islands--1.5%
8,000 Virgin Islands Government Refinery Facilities, Revenue
Refunding Bonds (Hovensa Coker Project), AMT,
6.50% due 7/01/2021 9,129
=========================================================================================================
Total Investments (Cost--$860,581*)--150.4% 943,919
Other Assets Less Liabilities--2.8% 17,643
Preferred Stock, at Redemption Value--(53.2%) (334,000)
-----------
Net Assets Applicable to Common Stock--100.0% $ 627,562
===========
10 MUNIVEST FUND, INC. AUGUST 31, 2005
Schedule of Investments (concluded) (in Thousands)
* The cost and unrealized appreciation (depreciation) of investments as of
August 31, 2005, as computed for federal income tax purposes, were as
follows:
--------------------------------------------------------------------------
Aggregate cost .............................................. $860,613
========
Gross unrealized appreciation ............................... $ 83,510
Gross unrealized depreciation ............................... (204)
--------
Net unrealized appreciation ................................. $ 83,306
========
(a) Prerefunded.
(b) FNMA Collateralized.
(c) MBIA Insured.
(d) FNMA/GNMA Collateralized.
(e) Escrowed to maturity.
(f) FGIC Insured.
(g) Radian Insured.
(h) AMBAC Insured.
(i) FSA Insured.
(j) FHA Insured.
(k) FHLMC Collateralized.
(l) Security may have a maturity of more than one year at time of issuance,
but has variable rate and demand features that qualify it as a short-term
security. The rate disclosed is that currently in effect. This rate
changes periodically based upon prevailing market rates.
(m) The rate disclosed is that currently in effect. This rate changes
periodically and inversely based upon prevailing market rates.
(n) XL Capital Insured.
Investments in companies considered to be an affiliate of the Fund, for
purposes of Section 2(a)(3) of the Investment Company Act of 1940, were as
follows:
--------------------------------------------------------------------------
Net Dividend
Affiliate Activity Income
--------------------------------------------------------------------------
Merrill Lynch Institutional
Tax-Exempt Fund (37,658) $ 96
--------------------------------------------------------------------------
Forward interest rate swaps outstanding as of August 31, 2005 were as
follows:
--------------------------------------------------------------------------
Notional Unrealized
Amount Depreciation
--------------------------------------------------------------------------
Pay a fixed rate of 3.647% and receive a
floating rate based on 1-week USD Bond
Market Association rate
Broker, JPMorgan Chase Bank
Expires October 2015 $43,500 $ (643)
Pay a fixed rate of 3.806% and receive a
floating rate based on 1-week USD Bond
Market Association rate
Broker, JPMorgan Chase Bank
Expires November 2015 $47,600 (1,277)
Pay a fixed rate of 3.931% and receive a
floating rate based on 1-week USD Bond
Market Association rate
Broker, JPMorgan Chase Bank
Expires September 2025 $ 7,000 (164)
--------------------------------------------------------------------------
Total $ (2,084)
=========
See Notes to Financial Statements.
MUNIVEST FUND, INC. AUGUST 31, 2005 11
Statement of Net Assets
As of August 31, 2005
=======================================================================================================================
Assets
-----------------------------------------------------------------------------------------------------------------------
Investments in unaffiliated securities, at value
(identified cost--$860,580,667) ............................ $ 943,918,975
Cash ........................................................ 40,113
Receivables:
Securities sold .......................................... $ 16,558,552
Interest ................................................. 13,266,160 29,824,712
-------------
Prepaid expenses and other assets ........................... 292,118
-------------
Total assets ................................................ 974,075,918
-------------
=======================================================================================================================
Liabilities
-----------------------------------------------------------------------------------------------------------------------
Unrealized depreciation on forward interest rate swaps ...... 2,083,744
Payables:
Securities purchased ..................................... 9,584,854
Dividends to Common Stock shareholders ................... 425,158
Investment adviser ....................................... 313,812
Other affiliates ......................................... 11,543 10,335,367
-------------
Accrued expenses ............................................ 94,349
-------------
Total liabilities ........................................... 12,513,460
-------------
=======================================================================================================================
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, 3,000 Series E Shares and 2,360 Series F Shares
of AMPS* issued and outstanding at $25,000 per share
liquidation preference) .................................... 334,000,000
-------------
=======================================================================================================================
Net Assets Applicable to Common Stock
-----------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common Stock ....................... $ 627,562,458
=============
=======================================================================================================================
Analysis of Net Assets Applicable to Common Stock
-----------------------------------------------------------------------------------------------------------------------
Common Stock, par value $.10 per share; 150,000,000 shares
authorized (61,346,288 shares issued and outstanding) ...... $ 6,134,629
Paid-in capital in excess of par ............................ 564,449,008
Undistributed investment income--net ........................ $ 8,602,079
Accumulated realized capital losses--net .................... (32,877,822)
Unrealized appreciation--net ................................ 81,254,564
-------------
Total accumulated earnings--net ............................. 56,978,821
-------------
Total--Equivalent to $10.23 net asset value per share of
Common Stock (market price--$10.15) ........................ $ 627,562,458
=============
* Auction Market Preferred Stock.
See Notes to Financial Statements.
12 MUNIVEST FUND, INC. AUGUST 31, 2005
Statement of Operations
For the Year Ended August 31, 2005
=======================================================================================================================
Investment Income
-----------------------------------------------------------------------------------------------------------------------
Interest .................................................... $ 51,749,156
Dividends from affiliates ................................... 96,058
-------------
Total income ................................................ 51,845,214
-------------
=======================================================================================================================
Expenses
-----------------------------------------------------------------------------------------------------------------------
Investment advisory fees .................................... $ 4,754,860
Commission fees ............................................. 855,018
Accounting services ......................................... 273,622
Transfer agent fees ......................................... 124,941
Professional fees ........................................... 54,332
Printing and shareholder reports ............................ 47,677
Custodian fees .............................................. 46,534
Directors' fees and expenses ................................ 33,530
Pricing fees ................................................ 32,480
Listing fees ................................................ 27,009
Other ....................................................... 46,947
-------------
Total expenses before reimbursement ......................... 6,296,950
Reimbursement of expenses ................................... (13,941)
-------------
Total expenses after reimbursement .......................... 6,283,009
-------------
Investment income--net ...................................... 45,562,205
-------------
=======================================================================================================================
Realized & Unrealized Gain (Loss)--Net
-----------------------------------------------------------------------------------------------------------------------
Realized gain (loss) on:
Investments--net ......................................... 9,238,687
Forward interest rate swaps and futures contracts--net ... (3,090,343) 6,148,344
-------------
Change in unrealized appreciation/depreciation on:
Investments--net ......................................... 16,074,829
Forward interest rate swaps--net ......................... (496,982) 15,577,847
-------------------------------
Total realized and unrealized gain--net ..................... 21,726,191
-------------
=======================================================================================================================
Dividends to Preferred Stock Shareholders
-----------------------------------------------------------------------------------------------------------------------
Investment income--net ...................................... (6,333,975)
-------------
Net Increase in Net Assets Resulting from Operations ........ $ 60,954,421
=============
See Notes to Financial Statements.
MUNIVEST FUND, INC. AUGUST 31, 2005 13
Statements of Changes in Net Assets
For the Year Ended
August 31,
-------------------------------
Increase (Decrease) in Net Assets: 2005 2004
=======================================================================================================================
Operations
-----------------------------------------------------------------------------------------------------------------------
Investment income--net ...................................... $ 45,562,205 $ 44,466,102
Realized gain--net .......................................... 6,148,344 2,139,538
Change in unrealized appreciation/depreciation--net ......... 15,577,847 19,875,698
Dividends to Preferred Stock shareholders ................... (6,333,975) (2,612,850)
-------------------------------
Net increase in net assets resulting from operations ........ 60,954,421 63,868,488
-------------------------------
=======================================================================================================================
Dividends to Common Stock Shareholders
-----------------------------------------------------------------------------------------------------------------------
Investment income--net ...................................... (41,224,706) (40,304,511)
-------------------------------
Net decrease in net assets resulting from dividends to Common
Stock shareholders ......................................... (41,224,706) (40,304,511)
-------------------------------
=======================================================================================================================
Capital Stock Transactions
-----------------------------------------------------------------------------------------------------------------------
Offering costs resulting from issuance of Preferred Stock ... (8,891) (744,726)
-------------------------------
Net decrease in net assets resulting from capital stock
transactions ............................................... (8,891) (744,726)
-------------------------------
=======================================================================================================================
Net Assets Applicable to Common Stock
-----------------------------------------------------------------------------------------------------------------------
Total increase in net assets applicable to Common Stock ..... 19,720,824 22,819,251
Beginning of year ........................................... 607,841,634 585,022,383
-------------------------------
End of year* ................................................ $ 627,562,458 $ 607,841,634
===============================
* Undistributed investment income--net ................... $ 8,602,079 $ 10,598,555
===============================
See Notes to Financial Statements.
Financial Highlights
For the Year Ended August 31,
The following per share data and ratios have been derived ------------------------------------------------------------
from information provided in the financial statements. 2005 2004 2003 2002 2001
=========================================================================================================================
Per Share Operating Performance
-------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year ..... $ 9.91 $ 9.54 $ 9.76 $ 9.71 $ 9.07
------------------------------------------------------------
Investment income--net ................. .74+ .72+ .72+ .69 .69
Realized and unrealized gain (loss)--net .35 .36 (.26) .02 .65
Less dividends to Preferred Stock
shareholders from investment
income--net ......................... (.10) (.04) (.05) (.07) (.16)
------------------------------------------------------------
Total from investment operations ....... .99 1.04 .41 .64 1.18
------------------------------------------------------------
Less dividends to Common Stock
shareholders from investment
income--net ......................... (.67) (.66) (.63) (.59) (.54)
------------------------------------------------------------
Offering costs resulting from the
issuance of Preferred Stock ......... --** (.01) -- -- --
------------------------------------------------------------
Net asset value, end of year ........... $ 10.23 $ 9.91 $ 9.54 $ 9.76 $ 9.71
============================================================
Market price per share, end of year .... $ 10.15 $ 9.30 $ 8.80 $ 9.11 $ 9.30
============================================================
=========================================================================================================================
Total Investment Return++
-------------------------------------------------------------------------------------------------------------------------
Based on net asset value per share ..... 10.64% 11.60% 4.79% 7.28% 13.89%
============================================================
Based on market price per share ........ 16.97% 13.53% 3.56% 4.55% 19.92%
============================================================
14 MUNIVEST FUND, INC. AUGUST 31, 2005
Financial Highlights (concluded)
For the Year Ended August 31,
The following per share data and ratios have been derived ------------------------------------------------------------
from information provided in the financial statements. 2005 2004 2003 2002 2001
=========================================================================================================================
Ratios Based on Average Net Assets of Common Stock
-------------------------------------------------------------------------------------------------------------------------
Total expenses, net of reimbursement* .. 1.02% .94% .95% .95% .98%
============================================================
Total expenses* ........................ 1.02% .95% .96% .95% .98%
============================================================
Total investment income--net* .......... 7.38% 7.37% 7.33% 7.33% 7.37%
============================================================
Amount of dividends to Preferred Stock
shareholders ........................ 1.02% .43% .50% .75% 1.70%
============================================================
Investment income--net, to Common Stock
shareholders ........................ 6.36% 6.94% 6.83% 6.58% 5.67%
============================================================
=========================================================================================================================
Ratios Based on Average Net Assets of Preferred Stock
-------------------------------------------------------------------------------------------------------------------------
Dividends to Preferred Stock
shareholders ........................ 1.90% .95% 1.11% 1.59% 3.53%
============================================================
=========================================================================================================================
Supplemental Data
-------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common Stock,
end of year (in thousands) .......... $627,562 $607,842 $585,022 $598,816 $595,908
============================================================
Preferred Stock outstanding, end of year
(in thousands) ...................... $334,000 $334,000 $275,000 $275,000 $275,000
============================================================
Portfolio turnover ..................... 59.14% 45.33% 44.30% 74.00% 74.80%
============================================================
=========================================================================================================================
Leverage
-------------------------------------------------------------------------------------------------------------------------
Asset coverage per $1,000 .............. $ 2,879 $ 2,820 $ 3,127 $ 3,178 $ 3,167
============================================================
=========================================================================================================================
Dividends Per Share on Preferred Stock Outstanding
-------------------------------------------------------------------------------------------------------------------------
Series A--Investment income--net ....... $ 477 $ 244 $ 266 $ 388 $ 909
============================================================
Series B--Investment income--net ....... $ 458 $ 238 $ 278 $ 394 $ 923
============================================================
Series C--Investment income--net ....... $ 485 $ 239 $ 269 $ 391 $ 906
============================================================
Series D--Investment income--net ....... $ 478 $ 242 $ 306 $ 445 $ 877
============================================================
Series E--Investment income--net ....... $ 464 $ 229 $ 269 $ 372 $ 851
============================================================
Series F***--Investment income--net .... $ 485 -- -- -- --
============================================================
* Do not reflect the effect of dividends to Preferred Stock shareholders.
** Amount is less than $(.01) per share.
*** Series F was issued on August 31, 2004.
+ Based on average shares outstanding.
++ 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.
See Notes to Financial Statements.
MUNIVEST FUND, INC. AUGUST 31, 2005 15
Notes to Financial Statements
1. Significant Accounting Policies:
MuniVest Fund, Inc. (the "Fund") is registered under the Investment Company Act
of 1940, as amended, as a non-diversified, closed-end management investment
company. The Fund's financial statements are prepared in conformity with U.S
generally accepted accounting principles, which may require the use of
management accruals and estimates. Actual results may differ from these
estimates. The Fund determines and makes available for publication the net asset
value of its Common Stock on a daily basis. The Fund's Common Stock shares are
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 ("OTC") markets and are valued at the last available bid price
in the OTC market or on the basis of values as obtained by a pricing service.
Pricing services use valuation matrixes that incorporate both dealer-supplied
valuations and valuation models. The procedures of the pricing service and its
valuations are reviewed by the officers of the Fund under the general direction
of the Board of Directors. Such valuations and procedures are reviewed
periodically by the Board of Directors of the Fund. 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 OTC market, valuation is the last asked price
(options written) or the last bid price (options purchased). Swap agreements are
valued by quoted fair values received daily by the Fund's pricing service.
Short-term investments with a remaining maturity of 60 days or less are valued
at amortized cost, which approximates market value, under which method the
investment is valued at cost and any premium or discount is amortized on a
straight line basis to maturity. Investments in open-end investment companies
are valued at their net asset value each business day. Securities and other
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.
(b) Derivative financial instruments -- The Fund may engage in various portfolio
investment strategies both to increase the return of the Fund and to hedge, or
protect its exposure to interest rate movements and movements in the securities
markets. 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. 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 may purchase and write call and put options. When the
Fund writes an option, an amount equal to the premium received by the Fund
is reflected as an asset and an equivalent liability. The amount of the
liability is subsequently marked-to-market to reflect the current market
value of the option written. When a security is purchased or sold through
an exercise of an option, the related premium paid (or received) is added
to (or deducted from) the basis of the security acquired or deducted from
(or added to) the proceeds of the security sold. When an option expires
(or the Fund enters into a closing transaction), the Fund realizes a gain
or loss on the option to the extent of the premiums received or paid (or
gain or loss to the extent the cost of the closing transaction exceeds the
premium paid or received).
Written and purchased options are non-income producing investments.
o Forward interest rate swaps -- The Fund may enter into forward interest
rate swaps. In a forward interest rate swap, the Fund and the counterparty
agree to make periodic net payments on a specified notional contract
amount, commencing on a specified future effective date, unless terminated
earlier. 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.
16 MUNIVEST FUND, INC. AUGUST 31, 2005
Notes to Financial Statements (continued)
(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.
(f) Offering costs -- Direct expenses relating to the public offering of the
Fund's Preferred Stock were charged to capital.
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 .50% of the Fund's average daily net assets, including assets
acquired from the sale of Preferred Stock. The Investment Adviser has agreed to
waive its management fee by the amount of management fees the Fund pays to FAM
indirectly through its investment in the Merrill Lynch Institutional Tax-Exempt
Fund. For the year ended August 31, 2005, FAM reimbursed the Fund in the amount
of $13,941.
In addition, Merrill Lynch, Pierce, Fenner & Smith Incorporated ("MLPF&S")
received $6,895 in commissions on the execution of portfolio security
transactions for the Fund for the year ended August 31, 2005.
For the year ended August 31, 2005, the Fund reimbursed FAM $21,532 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
year ended August 31, 2005, were $575,045,625 and $550,194,675 respectively.
4. Capital Stock Transactions:
Common Stock
At August 31, 2005, the Fund had one class of shares of Common Stock, par value
$.10 per share, of which 150,000,000 shares were authorized.
Preferred Stock
Auction Market Preferred Stock 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 August 31, 2005 were as
follows: Series A, 2.41%; Series B, 2.25%; Series C, 2.30%; Series D, 2.469%;
Series E, 2.40%; and Series F, 2.40%.
Shares issued and outstanding for the year ended August 31, 2005 remained
constant. During the year ended August 31, 2004, shares increased by 2,360
shares from the issuance of an additional series of Preferred Stock.
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 year ended August 31, 2005, MLPF&S received $396,709 as
commissions.
5. Distributions to Shareholders:
The Fund paid a tax-exempt income dividend to holders of Common Stock in the
amount of $.056000 per share on September 29, 2005 to shareholders of record on
September 14, 2005.
The tax character of distributions paid during the fiscal years ended August 31,
2005 and August 31, 2004 was as follows:
--------------------------------------------------------------------------------
8/31/2005 8/31/2004
--------------------------------------------------------------------------------
Distributions paid from:
Tax-exempt income .................... $47,558,681 $42,917,361
-------------------------------
Total distributions .................... $47,558,681 $42,917,361
===============================
MUNIVEST FUND, INC. AUGUST 31, 2005 17
Notes to Financial Statements (concluded)
As of August 31, 2005, the components of accumulated earnings on a tax basis
were as follows:
-----------------------------------------------------------------------------
Undistributed tax-exempt income--net .................... $ 8,560,779
Undistributed long-term capital gains--net .............. --
------------
Total undistributed earnings--net ....................... 8,560,779
Capital loss carryforward ............................... (20,303,047)*
Unrealized gains--net ................................... 68,721,089**
------------
Total accumulated earnings--net ......................... $ 56,978,821
============
* On August 31, 2005, the Fund had a net capital loss carryforward of
$20,303,047, of which $2,623,164 expires in 2008 and $17,679,883 expires
in 2009. This amount will be available to offset like amounts of any
future taxable gains.
** The difference between book-basis and tax-basis net unrealized gains is
attributable primarily to the tax deferral of losses on wash sales, the
tax deferral of losses on straddles, and the difference between book and
tax amortization methods for premiums and discounts on fixed income
securities.
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors of
MuniVest Fund, Inc.:
We have audited the accompanying statement of net assets, including the schedule
of investments, of MuniVest Fund, Inc. as of August 31, 2005, and the related
statement of operations for the year then ended, the statements of changes in
net assets for each of the two years in the period then ended, and the financial
highlights for each of the five years in the period then ended. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. The Fund
is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audits included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Fund's internal control over
financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. Our procedures included confirmation
of securities owned as of August 31, 2005, by correspondence with the custodian
and brokers; where replies were not received from brokers, we performed other
auditing procedures. We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
MuniVest Fund, Inc. as of August 31, 2005, the results of its operations for the
year then ended, the changes in its net assets for each of the two years in the
period then ended, and its financial highlights for each of the five years in
the period then ended, in conformity with U.S. generally accepted accounting
principles.
Deloitte & Touche LLP
Princeton, New Jersey
October 18, 2005
Important Tax Information (unaudited)
All of the net investment income distributions paid by MuniVest Fund, Inc.
during the taxable year ended August 31, 2005 qualify as tax-exempt interest
dividends for federal income tax purposes.
18 MUNIVEST FUND, INC. AUGUST 31, 2005
Automatic Dividend Reinvestment Plan
The following description of the Fund's Automatic Dividend Reinvestment Plan
(the "Plan") is sent to you annually as required by federal securities laws.
Pursuant to the Fund's Plan, unless a holder of Common Stock otherwise elects,
all dividend and capital gains distributions will be automatically reinvested by
The Bank of New York (the "Plan Agent"), as agent for shareholders in
administering the Plan, in additional shares of Common Stock of the Fund.
Holders of Common Stock who elect not to participate in the Plan will receive
all distributions in cash paid by check mailed directly to the shareholder of
record (or, if the shares are held in street or other nominee name then to such
nominee) by The Bank of New York, as dividend paying agent. Such participants
may elect not to participate in the Plan and to receive all distributions of
dividends and capital gains in cash by sending written instructions to The Bank
of New York, as dividend paying agent, at the address set forth below.
Participation in the Plan is completely voluntary and may be terminated or
resumed at any time without penalty by written notice if received by the Plan
Agent not less than ten days prior to any dividend record date; otherwise such
termination will be effective with respect to any subsequently declared dividend
or distribution.
Whenever the Fund declares an income dividend or capital gains distribution
(collectively referred to as "dividends") payable either in shares or in cash,
non-participants in the Plan will receive cash and participants in the Plan will
receive the equivalent in shares of Common Stock. The shares will be acquired by
the Plan Agent for the participant's account, depending upon the circumstances
described below, either (i) through receipt of additional unissued but
authorized shares of Common Stock from the Fund ("newly issued shares") or (ii)
by purchase of outstanding shares of Common Stock on the open market
("open-market purchases") on the American Stock Exchange or elsewhere. If, on
the payment date for the dividend, the net asset value per share of the Common
Stock is equal to or less than the market price per share of the Common Stock
plus estimated brokerage commissions (such conditions being referred to herein
as "market premium"), the Plan Agent will invest the dividend amount in newly
issued shares on behalf of the participant. The number of newly issued shares of
Common Stock to be credited to the participant's account will be determined by
dividing the dollar amount of the dividend by the net asset value per share on
the date the shares are issued, provided that the maximum discount from the then
current market price per share on the date of issuance may not exceed 5%. If, on
the dividend payment date, the net asset value per share is greater than the
market value (such condition being referred to herein as "market discount"), the
Plan Agent will invest the dividend amount in shares acquired on behalf of the
participant in open-market purchases.
In the event of a market discount on the dividend payment date, the Plan Agent
will have until the last business day before the next date on which the shares
trade on an "ex-dividend" basis or in no event more than 30 days after the
dividend payment date (the "last purchase date") to invest the dividend amount
in shares acquired in open-market purchases. It is contemplated that the Fund
will pay monthly income dividends. Therefore, the period during which
open-market purchases can be made will exist only from the payment date on the
dividend through the date before the next "ex-dividend" date, which typically
will be approximately 10 days. If, before the Plan Agent has completed its
open-market purchases, the market price of a share of Common Stock exceeds the
net asset value per share, the average per share purchase price paid by the Plan
Agent may exceed the net asset value of the Fund's shares, resulting in the
acquisitions of fewer shares than if the dividend had been paid in newly issued
shares on the dividend payment date. Because of the foregoing difficulty with
respect to open-market purchases, the Plan provides that if the Plan Agent is
unable to invest the full dividend amount in open-market purchases during the
purchase period or if the market discount shifts to a market premium during the
purchase period, the Plan Agent will cease making open-market purchases and will
invest the uninvested portion of the dividend amount in newly issued shares at
the close of business on the last purchase date determined by dividing the
uninvested portion of the dividend by the net asset value per share.
The Plan Agent maintains all shareholders' accounts in the Plan and furnishes
written confirmation of all transactions in the account, including information
needed by shareholders for tax records. Shares in the account of each Plan
participant will be held by the Plan Agent in non-certificated form in the name
of the participant, and each shareholder's proxy will include those shares
purchased or received pursuant to the Plan. The Plan Agent will forward all
proxy solicitation materials to participants and vote proxies for shares held
pursuant to the Plan in accordance with the instructions of the participants.
In the case of shareholders such as banks, brokers or nominees which hold shares
of others who are the beneficial owners, the Plan Agent will administer the Plan
on the basis of the number of shares certified from time to time by
MUNIVEST FUND, INC. AUGUST 31, 2005 19
Automatic Dividend Reinvestment Plan (concluded)
the record shareholders as representing the total amount registered in the
record shareholder's name and held for the account of beneficial owners who are
to participate in the Plan.
There will be no brokerage charges with respect to shares issued directly by the
Fund as a result of dividends or capital gains distributions payable either in
shares or in cash. However, each participant will pay a pro rata share of
brokerage commissions incurred with respect to the Plan Agent's open-market
purchases in connection with the reinvestment of dividends.
The automatic reinvestment of dividends and distributions will not relieve
participants of any federal, state or local income tax that may be payable (or
required to be withheld) on such dividends.
Shareholders participating in the Plan may receive benefits not available to
shareholders not participating in the Plan. If the market price plus commissions
of the Fund's shares is above the net asset value, participants in the Plan will
receive shares of the Fund at less than they could otherwise purchase them and
will have shares with a cash value greater than the value of any cash
distribution they would have received on their shares. If the market price plus
commissions is below the net asset value, participants will receive
distributions in shares with a net asset value greater than the value of any
cash distribution they would have received on their shares. However, there may
be insufficient shares available in the market to make distributions in shares
at prices below the net asset value. Also, since the Fund does not redeem
shares, the price on resale may be more or less than the net asset value.
The value of shares acquired pursuant to the Plan will generally be excluded
from gross income to the extent that the cash amount reinvested would be
excluded from gross income. If, when the Fund's shares are trading at a premium
over net asset value, the Fund issues shares pursuant to the Plan that have a
greater fair market value than the amount of cash reinvested, it is possible
that all or a portion of such discount (which may not exceed 5% of the fair
market value of the Fund's shares) could be viewed as a taxable distribution. If
the discount is viewed as a taxable distribution, it is also possible that the
taxable character of this discount would be allocable to all the shareholders,
including shareholders who do not participate in the Plan. Thus, shareholders
who do not participate in the Plan might be required to report as ordinary
income a portion of their distributions equal to their allocable share of the
discount.
Experience under the Plan may indicate that changes are desirable. Accordingly,
the Fund reserves the right to amend or terminate the Plan. There is no direct
service charge to participants in the Plan; however, the Fund reserves the right
to amend the Plan to include a service charge payable by the participants.
All correspondence concerning the Plan should be directed to the Plan Agent at
The Bank of New York, Church Street Station, P.O. Box 11258, New York, NY
10286-1258, Telephone: 800-432-8224.
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 stable level of dividend distributions, 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 MUNIVEST FUND, INC. AUGUST 31, 2005
Officers and Directors
Number of
Portfolios in Other Public
Position(s) Length of Fund Complex Directorships
Held with Time Overseen by Held by
Name Address & Age Fund Served Principal Occupation(s) During Past 5 Years Director Director
====================================================================================================================================
Interested Director
------------------------------------------------------------------------------------------------------------------------------------
Robert C. P.O. Box 9011 President 2005 to President of the MLIM/FAM-advised funds since 2005; 130 Funds None
Doll, Jr.* Princeton, NJ and present President of MLIM and FAM since 2001; Co-Head 175 Portfolios
08543-9011 Director (Americas Region) thereof from 2000 to 2001 and
Age: 51 Senior Vice President from 1999 to 2001; President
and Director of Princeton Services, Inc. ("Princeton
Services") since 2001; President of Princeton
Administrators, L.P. ("Princeton Administrators")
since 2001; Chief Investment Officer of Oppenheimer
Funds, Inc. in 1999 and Executive Vice President
thereof from 1991 to 1999.
------------------------------------------------------------------------------------------------------------------------
* Mr. Doll is a director, trustee or member of an advisory board of certain other investment companies for which MLIM or
FAM acts as investment adviser. Mr. Doll is an "interested person," as described in the Investment Company Act, of the
Fund based on his current positions with MLIM, FAM, Princeton Services and Princeton Administrators. Directors serve
until their resignation, removal or death, or until December 31 of the year in which they turn 72. As Fund President,
Mr. Doll serves at the pleasure of the Board of Directors.
====================================================================================================================================
Independent Directors*
------------------------------------------------------------------------------------------------------------------------------------
Ronald W. P.O. Box 9095 Director 1988 to Professor Emeritus of Finance, School of Business, 48 Funds None
Forbes** Princeton, NJ present State University of New York at Albany since 2000 48 Portfolios
08543-9095 and Professor thereof from 1989 to 2000; Interna-
Age: 64 tional Consultant, Urban Institute, Washington, D.C.
from 1995 to 1999.
------------------------------------------------------------------------------------------------------------------------------------
Cynthia A. P.O. Box 9095 Director 1993 to Professor, Harvard Business School since 1989; 48 Funds Newell
Montgomery Princeton, NJ present Associate Professor, J.L. Kellogg Graduate School of 48 Portfolios Rubbermaid,
08543-9095 Management, Northwestern University from 1985 to Inc.
Age: 53 1989; Associate Professor, Graduate School of (manu-
Business Administration, University of Michigan from facturing)
1979 to 1985; Director, Harvard Business School of
Publishing since 2005.
------------------------------------------------------------------------------------------------------------------------------------
Jean Margo P.O. Box 9095 Director 2004 to Self-employed consultant since 2001; Counsel of 48 Funds None
Reid Princeton, NJ present Alliance Capital Management (investment adviser) 48 Portfolios
08543-9095 in 2000; General Counsel, Director and Secretary of
Age: 60 Sanford C. Bernstein & Co., Inc. (investment adviser/
broker-dealer) from 1997 to 2000; Secretary,
Sanford C. Bernstein Fund, Inc. from 1994 to 2000;
Director and Secretary of SCB, Inc. since 1998;
Director and Secretary of SCB Partners, Inc. since
2000; Director of Covenant House from 2001 to 2004.
------------------------------------------------------------------------------------------------------------------------------------
Roscoe S. P.O. Box 9095 Director 2000 to President, Middle East Institute from 1995 to 2001; 48 Funds None
Suddarth Princeton, NJ present Foreign Service Officer, United States Foreign 48 Portfolios
08543-9095 Service from 1961 to 1995; Career Minister from 1989
Age: 70 to 1995; Deputy Inspector General, U.S. Department
of State, from 1991 to 1994; U.S. Ambassador to the
Hashemite Kingdom of Jordan from 1987 to 1990.
------------------------------------------------------------------------------------------------------------------------------------
Richard R. P.O. Box 9095 Director 1988 to Professor of Finance from 1984 to 1995, Dean from 48 Funds Bowne & Co.,
West Princeton, NJ present 1984 to 1993 and Dean Emeritus since 1995 of 48 Portfolios Inc.
08543-9095 New York University's Leonard N. Stern School of (financial
Age: 67 Business Administration. printers);
Vornado
Realty Trust
(real estate
company);
Alexander's,
Inc. (real
estate
company).
MUNIVEST FUND, INC. AUGUST 31, 2005 21
Officers and Directors (concluded)
Number of
Portfolios in Other Public
Position(s) Length of Fund Complex Directorships
Held with Time Overseen by Held by
Name Address & Age Fund Served Principal Occupation(s) During Past 5 Years Director Director
====================================================================================================================================
Independent Directors* (concluded)
------------------------------------------------------------------------------------------------------------------------------------
Edward D. P.O. Box 9095 Director 2000 to Self-employed financial consultant since 1994; 48 Funds None
Zinbarg Princeton, NJ present Executive Vice President of the Prudential Insurance 48 Portfolios
08543-9095 Company of America from 1988 to 1994; Former
Age: 70 Director of Prudential Reinsurance Company and
former Trustee of the Prudential Foundation.
------------------------------------------------------------------------------------------------------------------------
* Directors serve until their resignation, removal or death, or until December 31 of the year in which they turn 72.
** Chairman of the Board and the Audit Committee.
------------------------------------------------------------------------------------------------------------------------------------
Position(s) Length of
Held with Time
Name Address & Age Fund Served Principal Occupation(s) During Past 5 Years
====================================================================================================================================
Fund Officers*
------------------------------------------------------------------------------------------------------------------------------------
Donald C. P.O. Box 9011 Vice 1993 to First Vice President of MLIM and FAM since 1997 and Treasurer thereof since 1999;
Burke Princeton, NJ President present Senior Vice President and Treasurer of Princeton Services since 1999 and Director
08543-9011 and and since 2004; Vice President of FAM Distributors, Inc. ("FAMD") since 1999; Vice
Age: 45 Treasurer 1999 to President of MLIM and FAM from 1990 to 1997; Director of Taxation of MLIM from
present 1990 to 2001; Vice President, Treasurer and Secretary of the IQ Funds since 2004.
------------------------------------------------------------------------------------------------------------------------------------
Kenneth A. P.O. Box 9011 Senior 2002 to Managing Director of MLIM since 2000; Director (Municipal Tax-Exempt Fund
Jacob Princeton, NJ Vice present Management) of MLIM from 1997 to 2000.
08543-9011 President
Age: 54
------------------------------------------------------------------------------------------------------------------------------------
John M. P.O. Box 9011 Senior 2002 to Managing Director of MLIM since 2000; Director (Municipal Tax-Exempt Fund
Loffredo Princeton, NJ Vice present Management) of MLIM from 1997 to 2000.
08543-9011 President
Age: 41
------------------------------------------------------------------------------------------------------------------------------------
Fred K. P.O. Box 9011 Vice 1990 to Director (Municipal Tax-Exempt Fund Management) of MLIM since 2000; Vice President
Stuebe Princeton, NJ President present of MLIM from 1994 to 2000.
08543-9011
Age: 54
------------------------------------------------------------------------------------------------------------------------------------
Jeffrey P.O. Box 9011 Chief 2004 to Chief Compliance Officer of the MLIM/FAM-advised funds and First Vice President and
Hiller Princeton, Compliance present Chief Compliance Officer of MLIM (Americas Region) since 2004; Chief Compliance
NJ 08543-9011 Officer Officer of the IQ Funds since 2004; Global Director of Compliance at Morgan Stanley
Age: 54 Investment Management from 2002 to 2004; Managing Director and Global Director of
Compliance at Citigroup Asset Management from 2000 to 2002; Chief Compliance
Officer at Soros Fund Management in 2000; Chief Compliance Officer at Prudential
Financial from 1995 to 2000; Senior Counsel in the Commission's Division of
Enforcement in Washington, D.C. from 1990 to 1995.
------------------------------------------------------------------------------------------------------------------------------------
Alice A. P.O. Box 9011 Secretary 2004 to Director (Legal Advisory) of MLIM since 2002; Vice President of MLIM from 1999 to
Pellegrino Princeton, NJ present 2002; Attorney associated with MLIM since 1997; Secretary of MLIM, FAM, FAMD and
08543-9011 Princeton Services since 2004.
Age: 45
------------------------------------------------------------------------------------------------------------------------
* Officers of the Fund serve at the pleasure of the Board of Directors.
------------------------------------------------------------------------------------------------------------------------------------
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 -- 11 East
New York, NY 10286
Preferred Stock:
The Bank of New York
101 Barclay Street -- 7 West
New York, NY 10286
AMEX Symbol
MVF
22 MUNIVEST FUND, INC. AUGUST 31, 2005
Availability of Quarterly Schedule of Investments
The Fund files its complete schedule of portfolio holdings with the Securities
and Exchange Commission ("SEC") for the first and third quarters of each fiscal
year on Form N-Q. The Fund's Forms N-Q are available on the SEC's Web site at
http://www.sec.gov. The Fund's Forms N-Q may also be reviewed and copied at the
SEC's Public Reference Room in Washington, DC. Information on the operation of
the Public Reference Room may be obtained by calling 1-800-SEC-0330.
Electronic Delivery
The Fund offers electronic delivery of communications to its shareholders. In
order to receive this service, you must register your account and provide us
with e-mail information. To sign up for this service, simply access this Web
site at http://www.icsdelivery.com/live and follow the instructions. When you
visit this site, you will obtain a personal identification number (PIN). You
will need this PIN should you wish to update your e-mail address, choose to
discontinue this service and/or make any other changes to the service. This
service is not available for certain retirement accounts at this time.
MUNIVEST FUND, INC. AUGUST 31, 2005 23
[LOGO] Merrill Lynch Investment Managers
www.mlim.ml.com
--------------------------------------------------------------------------------
Mercury Advisors
A Division of Merrill Lynch Investment Managers
www.mercury.ml.com
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.
A description of the policies and procedures that the Fund uses to determine how
to vote proxies relating to portfolio securities is available (1) without
charge, upon request, by calling toll-free 1-800-MER-FUND (1-800-637-3863); (2)
at www.mutualfunds.ml.com; and (3) on the Securities and Exchange Commission's
Web site at http://www.sec.gov. Information about how the Fund voted proxies
relating to securities held in the Fund's portfolio during the most recent
12-month period ended June 30 is available (1) at www.mutualfunds.ml.com and (2)
on the Securities and Exchange Commission's Web site at http://www.sec.gov.
MuniVest Fund, Inc.
Box 9011
Princeton, NJ 08543-9011
#10787 -- 8/05
Item 2 - Code of Ethics - The registrant has adopted 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
and principal accounting officer, or persons performing similar
functions. A copy of the code of ethics is available without charge
upon request by calling toll-free 1-800-MER-FUND (1-800-637-3863).
Item 3 - Audit Committee Financial Expert - The registrant's board of directors
has determined that (i) the registrant has the following audit
committee financial experts serving on its audit committee and (ii)
each audit committee financial expert is independent: (1) Ronald W.
Forbes, (2) Richard R. West, and (3) Edward D. Zinbarg.
Item 4 - Principal Accountant Fees and Services
(a) Audit Fees - Fiscal Year Ending August 31, 2005 - $30,000
Fiscal Year Ending August 31, 2004 - $28,000
(b) Audit-Related Fees - Fiscal Year Ending August 31, 2005 - $16,400
Fiscal Year Ending August 31, 2004 - $3,000
The nature of the services include assurance and related services
reasonably related to the performance of the audit of financial
statements not included in Audit Fees.
(c) Tax Fees - Fiscal Year Ending August 31, 2005 - $7,000
Fiscal Year Ending August 31, 2004 - $5,610
The nature of the services include tax compliance, tax advice and tax
planning.
(d) All Other Fees - Fiscal Year Ending August 31, 2005 - $0
Fiscal Year Ending August 31, 2004 - $0
(e)(1) The registrant's audit committee (the "Committee") has adopted
policies and procedures with regard to the pre-approval of services.
Audit, audit-related and tax compliance services provided to the
registrant on an annual basis require specific pre-approval by the
Committee. The Committee also must approve other non-audit services
provided to the registrant and those non-audit services provided to the
registrant's affiliated service providers that relate directly to the
operations and the financial reporting of the registrant. Certain of
these non-audit services that the Committee believes are a) consistent
with the SEC's auditor independence rules and b) routine and recurring
services that will not impair the independence of the independent
accountants may be approved by the Committee without consideration on a
specific case-by-case basis ("general pre-approval"). However, such
services will only be deemed pre-approved provided that any individual
project does not exceed $5,000 attributable to the registrant or
$50,000 for all of the registrants the Committee oversees. Any proposed
services exceeding the pre-approved cost levels will require specific
pre-approval by the Committee, as will any other services not subject
to general pre-approval (e.g., unanticipated but permissible services).
The Committee is informed of each service approved subject to general
pre-approval at the next regularly scheduled in-person board meeting.
(e)(2) 0%
(f) Not Applicable
(g) Fiscal Year Ending August 31, 2005 - $7,377,027
Fiscal Year Ending August 31, 2004 - $14,913,836
(h) The registrant's audit committee has considered and determined that
the provision of non-audit services that were rendered to the
registrant's 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.
Regulation S-X Rule 2-01(c)(7)(ii) - $1,227,000, 0%
Item 5 - Audit Committee of Listed Registrants - The following individuals are
members of the registrant's separately-designated standing audit
committee established in accordance with Section 3(a)(58)(A) of the
Exchange Act (15 U.S.C. 78c(a)(58)(A)):
Ronald W. Forbes
Cynthia A. Montgomery
Jean Margo Reid
Kevin A. Ryan (retired as of December 31, 2004)
Roscoe S. Suddarth
Richard R. West
Edward D. Zinbarg
Item 6 - Schedule of Investments - Not Applicable
Item 7 - Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies -
Proxy Voting Policies and Procedures
Each Fund's Board of Directors/Trustees has delegated to Merrill Lynch
Investment Managers, L.P. and/or Fund Asset Management, L.P. (the
"Investment Adviser") authority to vote all proxies relating to the
Fund's portfolio securities. The Investment Adviser has adopted
policies and procedures ("Proxy Voting Procedures") with respect to the
voting of proxies related to the portfolio securities held in the
account of one or more of its clients, including a Fund. Pursuant to
these Proxy Voting Procedures, the Investment Adviser's primary
objective when voting proxies is to make proxy voting decisions solely
in the best interests of each Fund and its shareholders, and to act in
a manner that the Investment Adviser believes is most likely to enhance
the economic value of the securities held by the Fund. The Proxy Voting
Procedures are designed to ensure that the Investment Adviser considers
the interests of its clients, including the Funds, and not the
interests of the Investment Adviser, when voting proxies and that real
(or perceived) material conflicts that may arise between the Investment
Adviser's interest and those of the Investment Adviser's clients are
properly addressed and resolved.
In order to implement the Proxy Voting Procedures, the Investment
Adviser has formed a Proxy Voting Committee (the "Committee"). The
Committee is comprised of the Investment Adviser's Chief Investment
Officer (the "CIO"), one or more other senior investment professionals
appointed by the CIO, portfolio managers and investment analysts
appointed by the CIO and any other personnel the CIO deems appropriate.
The Committee will also include two non-voting representatives from the
Investment Adviser's Legal department appointed by the Investment
Adviser's General Counsel. The Committee's membership shall be limited
to full-time employees of the Investment Adviser. No person with any
investment banking, trading, retail brokerage or research
responsibilities for the Investment Adviser's affiliates may serve as a
member of the Committee or participate in its decision making (except
to the extent such person is asked by the Committee to present
information to the Committee, on the same basis as other interested
knowledgeable parties not affiliated with the Investment Adviser might
be asked to do so). The Committee determines how to vote the proxies of
all clients, including a Fund, that have delegated proxy voting
authority to the Investment Adviser and seeks to ensure that all votes
are consistent with the best interests of those clients and are free
from unwarranted and inappropriate influences. The Committee
establishes general proxy voting policies for the Investment Adviser
and is responsible for determining how those policies are applied to
specific proxy votes, in light of each issuer's unique structure,
management, strategic options and, in certain circumstances, probable
economic and other anticipated consequences of alternate actions. In so
doing, the Committee may determine to vote a particular proxy in a
manner contrary to its generally stated policies. In addition, the
Committee will be responsible for ensuring that all reporting and
recordkeeping requirements related to proxy voting are fulfilled.
The Committee may determine that the subject matter of a recurring
proxy issue is not suitable for general voting policies and requires a
case-by-case determination. In such cases, the Committee may elect not
to adopt a specific voting policy applicable to that issue. The
Investment Adviser believes that certain proxy voting issues require
investment analysis - such as approval of mergers and other significant
corporate transactions - akin to investment decisions, and are,
therefore, not suitable for general guidelines. The Committee may elect
to adopt a common position for the Investment Adviser on certain proxy
votes that are akin to investment decisions, or determine to permit the
portfolio manager to make individual decisions on how best to maximize
economic value for a Fund (similar to normal buy/sell investment
decisions made by such portfolio managers). While it is expected that
the Investment Adviser will generally seek to vote proxies over which
the Investment Adviser exercises voting authority in a uniform manner
for all the Investment Adviser's clients, the Committee, in conjunction
with a Fund's portfolio manager, may determine that the Fund's specific
circumstances require that its proxies be voted differently.
To assist the Investment Adviser in voting proxies, the Committee has
retained Institutional Shareholder Services ("ISS"). ISS is an
independent adviser that specializes in providing a variety of
fiduciary-level proxy-related services to institutional investment
managers, plan sponsors, custodians, consultants, and other
institutional investors. The services provided to the Investment
Adviser by ISS include in-depth research, voting recommendations
(although the Investment Adviser is not obligated to follow such
recommendations), vote execution, and recordkeeping. ISS will also
assist the Fund in fulfilling its reporting and recordkeeping
obligations under the Investment Company Act.
The Investment Adviser's Proxy Voting Procedures also address special
circumstances that can arise in connection with proxy voting. For
instance, under the Proxy Voting Procedures, the Investment Adviser
generally will not seek to vote proxies related to portfolio securities
that are on loan, although it may do so under certain circumstances. In
addition, the Investment Adviser will vote proxies related to
securities of foreign issuers only on a best efforts basis and may
elect not to vote at all in certain countries where the Committee
determines that the costs associated with voting generally outweigh the
benefits. The Committee may at any time override these general policies
if it determines that such action is in the best interests of a Fund.
From time to time, the Investment Adviser may be required to vote proxies in
respect of an issuer where an affiliate of the Investment Adviser (each, an
"Affiliate"), or a money management or other client of the Investment Adviser
(each, a "Client") is involved. The Proxy Voting Procedures and the Investment
Adviser's adherence to those procedures are designed to address such conflicts
of interest. The Committee intends to strictly adhere to the Proxy Voting
Procedures in all proxy matters, including matters involving Affiliates and
Clients. If, however, an issue representing a non-routine matter that is
material to an Affiliate or a widely known Client is involved such that the
Committee does not reasonably believe it is able to follow its guidelines (or if
the particular proxy matter is not addressed by the guidelines) and vote
impartially, the Committee may, in its discretion for the purposes of ensuring
that an independent determination is reached, retain an independent fiduciary to
advise the Committee on how to vote or to cast votes on behalf of the Investment
Adviser's clients.
In the event that the Committee determines not to retain an independent
fiduciary, or it does not follow the advice of such an independent
fiduciary, the powers of the Committee shall pass to a subcommittee,
appointed by the CIO (with advice from the Secretary of the Committee),
consisting solely of Committee members selected by the CIO. The CIO
shall appoint to the subcommittee, where appropriate, only persons
whose job responsibilities do not include contact with the Client and
whose job evaluations would not be affected by the Investment Adviser's
relationship with the Client (or failure to retain such relationship).
The subcommittee shall determine whether and how to vote all proxies on
behalf of the Investment Adviser's clients or, if the proxy matter is,
in their judgment, akin to an investment decision, to defer to the
applicable portfolio managers, provided that, if the subcommittee
determines to alter the Investment Adviser's normal voting guidelines
or, on matters where the Investment Adviser's policy is case-by-case,
does not follow the voting recommendation of any proxy voting service
or other independent fiduciary that may be retained to provide research
or advice to the Investment Adviser on that matter, no proxies relating
to the Client may be voted unless the Secretary, or in the Secretary's
absence, the Assistant Secretary of the Committee concurs that the
subcommittee's determination is consistent with the Investment
Adviser's fiduciary duties
In addition to the general principles outlined above, the Investment
Adviser has adopted voting guidelines with respect to certain recurring
proxy issues that are not expected to involve unusual circumstances.
These policies are guidelines only, and the Investment Adviser may
elect to vote differently from the recommendation set forth in a voting
guideline if the Committee determines that it is in a Fund's best
interest to do so. In addition, the guidelines may be reviewed at any
time upon the request of a Committee member and may be amended or
deleted upon the vote of a majority of Committee members present at a
Committee meeting at which there is a quorum.
The Investment Adviser has adopted specific voting guidelines with
respect to the following proxy issues:
o Proposals related to the composition of the Board of Directors of issuers
other than investment companies. As a general matter, the Committee
believes that a company's Board of Directors (rather than shareholders) is
most likely to have access to important, nonpublic information regarding a
company's business and prospects, and is therefore best-positioned to set
corporate policy and oversee management. The Committee, therefore,
believes that the foundation of good corporate governance is the election
of qualified, independent corporate directors who are likely to diligently
represent the interests of shareholders and oversee management of the
corporation in a manner that will seek to maximize shareholder value over
time. In individual cases, the Committee may look at a nominee's history
of representing shareholder interests as a director of other companies or
other factors, to the extent the Committee deems relevant.
o Proposals related to the selection of an issuer's independent auditors. As
a general matter, the Committee believes that corporate auditors have a
responsibility to represent the interests of shareholders and provide an
independent view on the propriety of financial reporting decisions of
corporate management. While the Committee will generally defer to a
corporation's choice of auditor, in individual cases, the Committee may
look at an auditors' history of representing shareholder interests as
auditor of other companies, to the extent the Committee deems relevant.
o Proposals related to management compensation and employee benefits. As a
general matter, the Committee favors disclosure of an issuer's
compensation and benefit policies and opposes excessive compensation, but
believes that compensation matters are normally best determined by an
issuer's board of directors, rather than shareholders. Proposals to
"micro-manage" an issuer's compensation practices or to set arbitrary
restrictions on compensation or benefits will, therefore, generally not be
supported.
o Proposals related to requests, principally from management, for approval
of amendments that would alter an issuer's capital structure. As a general
matter, the Committee will support requests that enhance the rights of
common shareholders and oppose requests that appear to be unreasonably
dilutive.
o Proposals related to requests for approval of amendments to an issuer's
charter or by-laws. As a general matter, the Committee opposes poison pill
provisions.
o Routine proposals related to requests regarding the formalities of
corporate meetings.
o Proposals related to proxy issues associated solely with holdings of
investment company shares. As with other types of companies, the Committee
believes that a fund's Board of Directors (rather than its shareholders)
is best-positioned to set fund policy and oversee management. However, the
Committee opposes granting Boards of Directors authority over certain
matters, such as changes to a fund's investment objective, that the
Investment Company Act envisions will be approved directly by
shareholders.
o Proposals related to limiting corporate conduct in some manner that
relates to the shareholder's environmental or social concerns. The
Committee generally believes that annual shareholder meetings are
inappropriate forums for discussion of larger social issues, and opposes
shareholder resolutions "micromanaging" corporate conduct or requesting
release of information that would not help a shareholder evaluate an
investment in the corporation as an economic matter. While the Committee
is generally supportive of proposals to require corporate disclosure of
matters that seem relevant and material to the economic interests of
shareholders, the Committee is generally not supportive of proposals to
require disclosure of corporate matters for other purposes.
Item 8 - Portfolio Managers of Closed-End Management Investment Companies - Not
Applicable at this time
Item 9 - Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers - Not Applicable
Item 10 - Submission of Matters to a Vote of Security Holders - Not Applicable
Item 11 - Controls and Procedures
11(a) - The registrant's certifying officers have reasonably designed such
disclosure controls and procedures to ensure material information
relating to the registrant is made known to us by others particularly
during the period in which this report is being prepared. The
registrant's certifying officers have determined that the registrant's
disclosure controls and procedures are effective based on our evaluation
of these controls and procedures as of a date within 90 days prior to
the filing date of this report.
11(b) - There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the Act (17 CFR
270.30a-3(d)) that occurred during the second fiscal half-year of the
period covered by this report that has materially affected, or is
reasonably likely to materially affect, the registrant's internal
control over financial reporting.
Item 12 - Exhibits attached hereto
12(a)(1) - Code of Ethics - See Item 2
12(a)(2) - Certifications - Attached hereto
12(a)(3) - Not Applicable
12(b) - Certifications - 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/ Robert C. Doll, Jr.
-----------------------
Robert C. Doll, Jr.,
Chief Executive Officer of
MuniVest Fund, Inc.
Date: October 19, 2005
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/ Robert C. Doll, Jr.
-----------------------
Robert C. Doll, Jr.,
Chief Executive Officer of
MuniVest Fund, Inc.
Date: October 19, 2005
By: /s/ Donald C. Burke
-----------------------
Donald C. Burke,
Chief Financial Officer of
MuniVest Fund, Inc.
Date: October 19, 2005