UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSRS
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-06540
Name of Fund: MuniYield Insured 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, MuniYield Insured 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: 10/31/06
Date of reporting period: 11/01/05 - 04/30/06
Item 1 - Report to Stockholders
Semi-Annual Report
April 30, 2006
MuniYield Insured Fund, Inc.
(BULL LOGO) Merrill Lynch Investment Managers
www.mlim.ml.com
Mercury Advisors
A Division of Merrill Lynch Investment Managers
www.mercury.ml.com
MuniYield Insured 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, in the opinion of bond counsel to the issuer, is exempt
from federal income taxes.
This report, including the financial information herein, is transmitted to
shareholders of MuniYield Insured Fund, Inc. for their information. It is not
a prospectus. 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 1-800-637-3863; (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.
MuniYield Insured Fund, Inc.
Box 9011
Princeton, NJ 08543-9011
(GO PAPERLESS LOGO)
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MuniYield Insured Fund, Inc.
Announcement to Shareholders
On February 15, 2006, BlackRock, Inc. ("BlackRock") and Merrill Lynch & Co.,
Inc. ("Merrill Lynch") entered into an agreement to contribute Merrill Lynch's
investment management business, Merrill Lynch Investment Managers, L.P. and
certain affiliates (including Fund Asset Management, L.P. and Merrill Lynch
Investment Managers International Limited), to BlackRock to create a new
independent company that will be one of the world's largest asset management
firms with over $1 trillion in assets under management (based on combined
assets under management as of March 31, 2006). The transaction is expected to
close in the third quarter of 2006, at which time the new company will operate
under the BlackRock name. The Fund's Board of Directors has approved a new
investment advisory agreement with BlackRock Advisors, Inc. or its successor
("BlackRock Advisors") on substantially the same terms and for the same
advisory fee as the current investment advisory agreement with the Investment
Adviser. If the new agreement is approved by the Fund's shareholders,
BlackRock Advisors is expected to become the Fund's investment adviser upon
the closing of the transaction between Merrill Lynch and BlackRock.
Proxy Results
During the six-month period ended April 30, 2006, MuniYield Insured Fund,
Inc.'s Common Stock shareholders voted on the following proposal. The proposal
was approved at a shareholders' meeting on April 27, 2006. A description of
the proposal and number of shares voted are as follows:
Shares Voted Shares Withheld
For From Voting
1. To elect the Fund's Directors: Robert C. Doll, Jr. 64,110,701 1,268,085
Kenneth A. Froot 64,120,536 1,258,250
Joe Grills 64,105,134 1,273,652
Herbert I. London 64,116,684 1,262,102
Roberta Cooper Ramo 64,126,233 1,252,553
During the six-month period ended April 30, 2006, MuniYield Insured Fund,
Inc.'s Preferred Stock shareholders (Series A - I) voted on the following
proposal. The proposal was approved at a shareholders' meeting on April 27,
2006. A description of the proposal and number of shares voted are as follows:
Shares Voted Shares Withheld
For From Voting
1. To elect the Fund's Board of Directors: Robert C. Doll, Jr. 20,982 423
James H. Bodurtha 20,983 422
Kenneth A. Froot 20,983 422
Joe Grills 20,981 424
Herbert I. London 20,981 424
Roberta Cooper Ramo 20,983 422
Robert S. Salomon, Jr. 20,981 424
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.
MUNIYIELD INSURED FUND, INC. APRIL 30, 2006
A Letter From the President
Dear Shareholder
You may be aware that changes are on the horizon at Merrill Lynch Investment
Managers ("MLIM"). On February 15, 2006, Merrill Lynch announced plans to
combine the firm's investment advisory business, including MLIM, with another
highly regarded investment manager - BlackRock, Inc. ("BlackRock").
We believe this merger of asset management strength will benefit our
investors. MLIM is a leading investment management organization with over
$576 billion in assets under management globally and 2,757 employees in
17 countries. It offers over 100 investment strategies in vehicles ranging
from mutual funds to institutional portfolios. BlackRock is one of the
largest publicly traded investment management firms in the United States
with $463.1 billion in assets under management and 1,839 employees. It
manages assets on behalf of institutional and individual investors worldwide
through a variety of equity, fixed income, liquidity and alternative
investment products.
At the completion of the transaction, which is expected in the third quarter
of this year, the resultant firm will be a top-10 investment manager worldwide
with over $1 trillion in assets under management.* The combined company will
provide a wider selection of high-quality investment solutions across a
range of asset classes and investment styles. MLIM and BlackRock possess
complementary capabilities that together create a well-rounded organization
uniting some of the finest money managers in the industry. At the same time,
the firms share similar values and beliefs - they are focused on delivering
excellence on behalf of clients, and both make investment performance their
single most important mission. In short, the merger only reinforces our
commitment to shareholders.
Most of MLIM's investment products - including mutual funds, separately
managed accounts, annuities and variable insurance funds - eventually will
carry the "BlackRock" name. As a shareholder in one or more MLIM-advised
mutual funds, you will receive a proxy package in the coming weeks in
connection with this transaction. After you receive this information, should
you have any questions or concerns, do not hesitate to contact your financial
advisor.
As always, we thank you for entrusting us with your investment assets, and we
look forward to continuing to serve your investment needs with even greater
strength and scale as the new BlackRock.
Sincerely,
(Robert C. Doll, Jr.)
Robert C. Doll, Jr.
President and Chief Investment Officer
Merrill Lynch Investment Managers
* $1.039 trillion in assets under management as of March 31, 2006.
Data, including assets under management, are as of March 31, 2006.
MUNIYIELD INSURED FUND, INC. APRIL 30, 2006
A Discussion With Your Fund's Portfolio Manager
The Fund continued to provide shareholders with an above-average level of
income and posted a total return for the period that outpaced that of its
comparable Lipper category average.
Describe the recent market environment relative to municipal bonds.
Long-term bond yields rose sharply during the six-month period, with much of
the increase occurring in March and April 2006. Bond prices, which move
opposite of yields, declined. Bond prices were pressured as investors focused
on solid economic growth, both globally and in the United States, and renewed
inflationary pressures deriving from rising commodity prices.
The Federal Reserve Board (the Fed) continued to raise short-term interest
rates at each of its meetings during the period, bringing the federal funds
target rate to 4.75% at period-end (and to 5% shortly after on May 10). In
response, the yield curve continued to flatten, with short-term interest
rates rising more than longer-term interest rates. Over the past six months,
30-year U.S. Treasury bond yields rose 41 basis points (.41%) to 5.17% and
10-year U.S. Treasury note yields rose 50 basis points to 5.07%, the highest
level since May 2002.
While the municipal yield curve also flattened during the period, a
significant decline in new issuance allowed municipal bond prices to improve
slightly or decline much less than their taxable counterparts. As measured by
Municipal Market Data, yields on AAA-rated issues maturing in 30 years fell
six basis points to 4.53% while AAA-rated issues maturing in 10 years saw
their yields rise 16 basis points to 4.08%.
For the most part, the recent outperformance of the tax-exempt market has been
fostered by a dramatic decline in new bond issuance so far in 2006. In 2005,
more than $408 billion in new long-term tax-exempt bonds was underwritten, a
new annual record and an increase of more than 13% compared to 2004. Over the
past six months, $170 billion in long-term municipal bonds was issued, a
decline of 8.6% versus the same period a year earlier.
The tax-exempt market has continued to enjoy strong investor demand. As
reported by the Investment Company Institute, long-term municipal bond funds
received net new monies of $5.0 billion in 2005 - a sharp reversal from the
$3.7 billion outflow in 2004. During the first quarter of 2006, tax-exempt
mutual funds received over $9.3 billion, slightly higher than the $8.9 billion
inflow during the same period in 2005. Recent statistics from AMG Data
Services indicate that, thus far in 2006, average weekly cash flows into
long-term municipal bond funds averaged over $300 million, a significant
improvement from the weekly average of $65 million in December 2005.
Looking ahead, the fundamentals for the tax-exempt bond market appear
favorable, and continued positive cash flows are anticipated. Given their
attractive yields relative to comparable U.S. Treasury bonds, and the
prospects for reduced issuance in 2006, we believe municipal bonds could enjoy
solid results in the coming months.
How did the Fund perform during the period in light of the existing market
conditions?
For the six-month period ended April 30, 2006, the Common Stock of MuniYield
Insured Fund, Inc. had net annualized yields of 5.64% and 5.85%, based on a
period-end per share net asset value of $14.85 and a per share market price of
$14.31, respectively, and $.415 per share income dividends. Over the same
period, the total investment return on the Fund's Common Stock was +2.28%,
based on a change in per share net asset value from $15.27 to $14.85, and
assuming reinvestment of all distributions.
The Fund's total return, based on net asset value, exceeded the +1.94% average
return of the Lipper Insured Municipal Debt Funds (Leveraged) category for the
six-month period. (Funds in this Lipper category invest primarily in municipal
debt issues insured as to timely payment. These funds can be leveraged via use
of debt, preferred equity and/or reverse repurchase agreements.)
The Fund's outperformance can be attributed to a few factors, including
positive security selection, favorable timing and our focus on the long end of
the municipal yield curve. Furthermore, the Fund's slightly longer maturity
compared to its peers proved advantageous, as it allowed the portfolio to
maintain an above-average yield, which added to incremental total return. As
the yield curve continued to flatten considerably over the six-month period,
long-term bonds outperformed short-term issues, and our focus on this sector
of the curve enhanced Fund results.
MUNIYIELD INSURED FUND, INC. APRIL 30, 2006
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 New York 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?
We maintained our focus on protecting the Fund's net asset value and providing
shareholders with an above-average level of income. To that end, we continued
to target additional yield for the portfolio by investing in longer-dated
bonds.
The recent slowdown in new bond issuance has led to a narrowing of credit
spreads between municipal bonds issued by high-tax states and those issued by
low-tax states. For that reason, we pursued a more beneficial strategy of
purchasing high-quality bonds issued by the high-tax states as opposed to
bonds issued by low-tax states. Because of the relatively high income taxes
imposed by these states, their securities typically meet with strong retail
demand, which in turn creates a solid technical market, leading to better
liquidity. We participated in these transactions in such high-tax states as
California, New York and New Jersey. We also continued to sell short-maturity
prerefunded bonds to capture their market appreciation and avoid the negative
price amortization associated with shorter-maturity issues. We used the
proceeds from our sales to purchase premium-couponed issues in the 25-year -
30-year maturity range.
Importantly, the Fund continued to be fully invested throughout the period,
consistent with our goal of maintaining an attractive level of income.
For the six-month period ended April 30, 2006, the Fund's Auction Market
Preferred Stock (AMPS) had average yields of 2.53% for Series A, 2.47% for
Series B, 2.37% for Series C, 2.68% for Series D, 2.41% for Series E, 2.53%
for Series F, 2.26% for Series G, 2.36% for Series H and 2.28% for Series I.
The Fed's interest rate hikes continue to have a material impact on the Fund's
borrowing costs. The Fed raised the short-term interest rate target 100 basis
points during the six-month period (and 25 basis points more on May 10). We
would expect additional increases in the cost of funds to be more limited as
the Fed nears a pause in its monetary tightening campaign. Despite the
interest rate increases during the period, the tax-exempt yield curve
maintained a positive slope, allowing us to borrow at a lower rate than where
we invest. This continued to generate an income benefit to the holders of
Common Stock from the leveraging of Preferred Stock. However, should the
spread between short-term and long-term interest rates narrow, the benefits of
leveraging 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 36.32% of total net assets, before the deduction of Preferred Stock.
(For a more complete explanation of the benefits and risks of leveraging, see
page 6 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 fully invested portfolio and a positive stance on
interest rate risk. We maintain a favorable outlook for the municipal market,
based on declining issuance and increasing demand on the part of high net
worth investors, U.S. subsidiaries of foreign banks and larger U.S. banking
corporations that have merged and are seeking tax-exempt income.
After 16 consecutive interest rate hikes, we believe the Fed is prepared to
pause in order to assess the impact that its measured monetary tightening
campaign has had on economic growth and inflation. However, if there are
additional rate increases, we would expect the municipal yield curve to
steepen in the short term, particularly relative to the very flat U.S.
Treasury yield curve, which should continue to provide attractive
opportunities on the long end.
Against this backdrop, we intend to continue to look for maturities in the
25-year area and to favor a neutral to slightly long portfolio duration, which
we believe offers the benefit of incremental yield. We remain committed to
our strategy of investing in high-quality bonds issued by high-tax states.
Ultimately, we expect that above-average yields will provide competitive Fund
returns over time.
William R. Bock
Vice President and Portfolio Manager
May 16, 2006
MUNIYIELD INSURED FUND, INC. APRIL 30, 2006
The Benefits and Risks of Leveraging
MuniYield Insured 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.
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 New York Stock Exchange) may, as a
result, decline. Furthermore, if long-term interest rates rise, the Common
Stock's net asset value will reflect the full decline in the price of the
portfolio's investments, since the value of the fund's Preferred Stock does
not fluctuate. In addition to the decline in net asset value, the market value
of the fund's Common Stock may also decline.
As a part of its investment strategy, the Fund may invest in certain
securities whose potential income return is inversely related to changes in a
floating interest rate ("inverse floaters"). In general, income on inverse
floaters will decrease when short-term interest rates increase and increase
when short-term interest rates decrease. Investments in inverse floaters may
be characterized as derivative securities and may subject the Fund to the
risks of reduced or eliminated interest payments and losses of invested
principal. In addition, inverse floaters have the effect of providing
investment leverage and, as a result, the market value of such securities will
generally be more volatile than that of fixed rate, tax-exempt securities. To
the extent the Fund invests in inverse floaters, the market value of the
Fund's portfolio and the net asset value of the Fund's shares may also be more
volatile than if the Fund did not invest in such securities. As of April 30,
2006, the percentage of the Fund's total net assets invested in inverse
floaters was 12.22%, 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 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.
MUNIYIELD INSURED FUND, INC. APRIL 30, 2006
Portfolio Information as of April 30, 2006
Percent of
Quality Ratings by Total
S&P/Moody's Investments
AAA/Aaa 83.6%
AA/Aa 3.4
A/A 8.3
BBB/Baa 1.6
NR (Not Rated) 2.8
Other* 0.3
* Includes portfolio holdings in variable rate demand notes.
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.
Officers & Directors
Robert C. Doll, Jr., President and Director
James H. Bodurtha, Director
Kenneth A. Froot, Director
Joe Grills, Director
Herbert I. London, Director
Roberta Cooper Ramo, Director
Robert S. Salomon, Jr., Director
Donald C. Burke, Vice President and Treasurer
Kenneth A. Jacob, Senior Vice President
John M. Loffredo, Senior Vice President
William R. Bock, Vice President
Jeffrey Hiller, Chief Compliance Officer
Alice A. Pellegrino, Secretary
Custodian
State Street Bank and Trust Company
P.O. Box 351
Boston, MA 02101
Transfer Agents
Common Stock:
Computershare Trust Company, N.A.
P.O. Box 43010
Providence, RI 02940-3010
1-800-426-5523
Preferred Stock:
The Bank of New York
101 Barclay Street - 7 West
New York, NY 10286
NYSE Symbol
MYI
Effective January 1, 2006, Stephen B. Swensrud retired as Director of
MuniYield Insured Fund, Inc. The Fund's Board of Directors wishes Mr. Swensrud
well in his retirement.
MUNIYIELD INSURED FUND, INC. APRIL 30, 2006
Schedule of Investments (In Thousands)
Face
Amount Municipal Bonds Value
Alaska--0.4%
$ 3,695 Alaska Energy Authority, Power Revenue
Refunding Bonds (Bradley Lake), Fourth Series,
6% due 7/01/2018 (g) $ 4,217
Arizona--2.2%
21,355 Downtown Phoenix Hotel Corporation, Arizona,
Revenue Bonds, Senior Series A, 5%
due 7/01/2036 (c) 21,847
California--36.0%
10,000 Alameda Corridor Transportation Authority,
California, Capital Appreciation Revenue
Refunding Bonds, Subordinate Lien, Series A,
5.40% due 10/01/2012 (a)(l) 7,624
5,000 Antioch, California, Public Finance Authority, Lease
Revenue Refunding Bonds (Municipal Facilities
Project), Series A, 5.50% due 1/01/2032 (b) 5,312
10,000 California Infrastructure and Economic Development
Bank, Bay Area Toll Bridges Revenue Bonds,
First Lien, Series A, 5% due 7/01/2025 (c)(i) 10,785
California State, GO, DRIVERS (b)(j):
7,450 Series 556, 6.878% due 11/01/2011 8,610
6,450 Series 557, 6.878% due 4/01/2012 7,453
California State Public Works Board, Lease
Revenue Bonds:
5,500 (Department of Corrections), Series C, 5.25%
due 6/01/2028 5,702
3,755 (Department of General Services), Series D,
5.25% due 6/01/2028 3,892
5,250 (Department of Mental Health--Coalinga
State Hospital), Series A, 5.125% due 6/01/2029 5,380
12,000 California State, Various Purpose, GO, 5.25%
due 11/01/2029 12,529
32,000 California State, Various Purpose, GO, Refunding,
5% due 6/01/2034 (d) 32,775
7,740 California Statewide Communities Development
Authority, Health Facility Revenue Bonds (Memorial
Health Services), Series A, 6% due 10/01/2023 8,405
4,205 California Statewide Communities Development
Authority, Water Revenue Bonds (Pooled Financing
Program), Series C, 5.25% due 10/01/2034 (g) 4,411
4,500 Coronado, California, Community Development
Agency, Tax Allocation Bonds (Coronado Community
Development Project), 5% due 9/01/2035 (a) 4,611
7,500 Desert Sands, California, Unified School District,
GO (Election of 2001), 5% due 6/01/2029 (g) 7,731
5,800 Fairfield-Suisun, California, Unified School District,
GO (Election of 2002), 5.50% due 8/01/2028 (b) 6,292
5,015 Gavilan, California, Joint Community College District,
GO, DRIVERS, Series 587-Z, 6.878%
due 8/01/2012 (a)(j) 5,865
Face
Amount Municipal Bonds Value
California (concluded)
$30,000 Golden State Tobacco Securitization Corporation
of California, Tobacco Settlement Revenue
Refunding Bonds, Series A, 5% due 6/01/2035 (c) $ 30,659
13,155 Huntington Beach, California, Union High School
District, GO (Election of 2004), 5%
due 8/01/2029 (g) 13,567
1,000 Long Beach, California, Harbor Revenue Refunding
Bonds, AMT, Series B, 5.20% due 5/15/2027 (b) 1,035
1,000 Los Angeles, California, Department of Water and
Power, Waterworks Revenue Bonds, Sub-Series A-1,
5% due 7/01/2040 (a) 1,028
5,000 Los Angeles, California, Harbor Department Revenue
Bonds, RITR, AMT, Series RI-7, 8.255%
due 11/01/2026 (b)(j) 5,221
41,050 Los Angeles, California, Unified School District, GO,
Series A, 5% due 1/01/2028 (b) 42,427
Los Angeles, California, Water and Power Revenue
Bonds (Power System) (g):
12,775 Series B, 5% due 7/01/2035 13,107
27,000 Sub-Series A-1, 5% due 7/01/2035 (a) 27,860
12,000 Metropolitan Water District of Southern California,
Waterworks Revenue Bonds, Series A, 5%
due 7/01/2035 (g) 12,410
4,730 Port of Oakland, California, DRIVERS, AMT,
Series 839Z, 6.609% due 11/01/2010 (c)(j) 5,207
145 Port of Oakland, California, Revenue Bonds, AMT,
Series K, 5.75% due 11/01/2021 (c) 153
7,000 Port of Oakland, California, Trust Receipts, Revenue
Bonds, AMT, Class R, Series K, 7.39%
due 11/01/2021 (c)(j) 7,797
10,000 Riverside County, California, Public Financing
Authority, Tax Allocation Revenue Bonds
(Redevelopment Projects), 5% due 10/01/2035 (e) 10,213
7,090 San Diego, California, Unified School District, GO
(Election of 1998), Series F, 5% due 7/01/2029 (g) 7,310
12,290 Simi Valley, California, Unified School District, GO
(Election of 2004), Series B, 5% due 8/01/2030 (c) 12,713
8,310 Stockton, California, Public Financing Authority,
Lease Revenue Bonds (Parking & Capital Projects),
5.25% due 9/01/2034 (c) 8,735
10,000 Tustin, California, Unified School District, Senior
Lien Special Tax Bonds (Community Facilities
District Number 97-1), Series A, 5%
due 9/01/2032 (g) 10,214
12,515 University of California Revenue Bonds, Series G,
4.75% due 5/15/2035 (c) 12,495
Portfolio Abbreviations
To simplify the listings of MuniYield Insured 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
IDR Industrial Development Revenue Bonds
PCR Pollution Control Revenue Bonds
RIB Residual Interest Bonds
RITR Residual Interest Trust Receipts
S/F Single-Family
VRDN Variable Rate Demand Notes
MUNIYIELD INSURED FUND, INC. APRIL 30, 2006
Schedule of Investments (continued) (In Thousands)
Face
Amount Municipal Bonds Value
Colorado--1.2%
$ 1,690 Arkansas River Power Authority, Colorado, Power
Improvement Revenue Bonds, 5.25%
due 10/01/2032 (e) $ 1,793
10,000 Denver, Colorado, Convention Center Hotel
Authority, Senior Revenue Refunding Bonds,
5% due 12/01/2030 (e) 10,297
Florida--2.4%
5,375 Miami-Dade County, Florida, Aviation Revenue
Bonds, RIB, AMT, Series 1054-X, 6.65%
due 10/01/2025 (c)(j) 5,888
1,000 Miami-Dade County, Florida, Aviation Revenue
Refunding Bonds (Miami International Airport),
AMT, 5.375% due 10/01/2027 (c) 1,042
Orange County, Florida, Health Facilities Authority,
Hospital Revenue Bonds (Adventist Health System):
5,000 5.625% due 11/15/2032 5,272
7,895 Series B, 4.75% due 11/15/2036 7,647
3,900 Sarasota County, Florida, Public Hospital Board,
Hospital Revenue Bonds (Sarasota Memorial
Hospital), VRDN, Series A, 3.70%
due 7/01/2037 (a)(h) 3,900
Georgia--4.1%
Atlanta, Georgia, Airport General Revenue
Refunding Bonds (g):
26,500 AMT, Series A, 5.125% due 1/01/2030 27,127
12,500 Series B, 5.25% due 1/01/2033 13,126
1,000 Cobb County, Georgia, Development Authority
Revenue Bonds (KSU Town Point Real Estate
Foundation, LLC Project), Series A, 5%
due 7/15/2026 (d) 1,035
Hawaii--0.2%
2,000 Hawaii State, GO, Series CX, 5.50% due 2/01/2021 (g) 2,137
Illinois--9.0%
Chicago, Illinois, O'Hare International Airport Revenue
Bonds, AMT:
13,115 DRIVERS, Series 368, 7.837% due 7/01/2011 (b)(j) 15,840
8,600 DRIVERS, Series 369, 7.837% due 7/01/2011 (e)(j) 10,351
16,685 Third Lien, Series B-2, 5.25% due 1/01/2027 (b) 17,183
Chicago, Illinois, O'Hare International Airport, Revenue
Refunding Bonds, AMT:
8,200 DRIVERS, Series 653-Z, 6.338%
due 1/01/2012 (g)(j) 8,615
1,500 Third Lien, Series C-2, 5.25% due 1/01/2034 (e) 1,538
5,000 Cook County, Illinois, GO, Refunding, Series A, 4.75%
due 11/15/2031 5,012
Illinois State, GO (a):
5,000 5% due 4/01/2028 5,167
12,600 5% due 4/01/2030 13,012
6,035 McLean and Woodford Counties, Illinois, Community
Unit, School District Number 005, GO, Refunding,
6.375% due 12/01/2016 (g) 6,789
4,800 Metropolitan Pier and Exposition Authority, Illinois,
Dedicated State Tax Revenue Refunding Bonds
(McCormick Place Expansion Project), Series B,
5.75% due 6/15/2023 (b) 5,244
1,000 Regional Transportation Authority, Illinois, Revenue
Bonds, Series C, 7.75% due 6/01/2020 (c) 1,336
Face
Amount Municipal Bonds Value
Indiana--5.7%
$ 2,250 Indiana Health Facilities Financing Authority, Hospital
Revenue Bonds (Deaconess Hospital Obligated
Group), Series A, 5.375% due 3/01/2034 (a) $ 2,368
Indiana Transportation Finance Authority, Highway
Revenue Bonds, Series A:
3,000 5.25% due 6/01/2026 (c) 3,173
3,750 5% due 6/01/2028 (g) 3,844
14,000 5.25% due 6/01/2028 (c) 14,783
20,000 5.25% due 6/01/2029 (c) 21,104
2,705 Indianapolis, Indiana, Local Public Improvement Bond
Bank, Revenue Bonds (Waterworks Project), Series A,
5.125% due 7/01/2027 (b) 2,790
Indianapolis, Indiana, Local Public Improvement Bond
Bank, Revenue Refunding Bonds (Indianapolis
Airport Authority Project), AMT, Series B (b):
2,000 5.25% due 1/01/2028 2,088
6,525 5.25% due 1/01/2030 6,801
Iowa--1.9%
19,000 Des Moines, Iowa, Metropolitan Wastewater
Reclamation Authority, Sewer Revenue Bonds,
Series B, 5% due 6/01/2034 (b) 19,508
Louisiana--3.5%
3,750 Louisiana Local Government, Environmental Facilities,
Community Development Authority Revenue Bonds
(Capital Projects and Equipment Acquisition),
Series A, 6.30% due 7/01/2030 (a) 4,153
6,615 Louisiana Public Facilities Authority, Hospital Revenue
Bonds (Franciscan Missionaries of Our Lady Health
System, Inc.), Series A, 5.25% due 8/15/2036 6,722
7,500 Louisiana Public Facilities Authority, Revenue
Refunding Bonds, DRIVERS, Series 1025,
6.368% due 7/01/2012 (b)(j) 8,126
11,900 Louisiana State, Gas and Fuels Tax Revenue Bonds,
Series A, 5% due 5/01/2022 (c) 12,310
3,545 New Orleans, Louisiana, GO (Public Improvements),
5% due 10/01/2033 (b) 3,590
Maryland--1.3%
12,500 Maryland State Health and Higher Educational
Facilities Authority, Revenue Refunding Bonds
(Peninsula Regional Medical Center), 5%
due 7/01/2036 12,618
Massachusetts--6.4%
2,500 Massachusetts State, HFA, Housing Development
Revenue Refunding Bonds, Series B, 5.40%
due 12/01/2028 (b) 2,540
15,000 Massachusetts State, HFA, Rental Housing Mortgage
Revenue Bonds, AMT, Series A, 5.15%
due 7/01/2026 (g) 14,951
7,550 Massachusetts State Port Authority Revenue Bonds,
Series A, 5% due 7/01/2033 (b) 7,737
16,675 Massachusetts State School Building Authority,
Dedicated Sales Tax Revenue Bonds, Series A, 5%
due 8/15/2030 (g) 17,276
Massachusetts State Special Obligation Dedicated
Tax Revenue Bonds (c)(f):
10,160 5.25% due 1/01/2014 10,894
10,000 5.75% due 1/01/2014 11,049
MUNIYIELD INSURED FUND, INC. APRIL 30, 2006
Schedule of Investments (continued) (In Thousands)
Face
Amount Municipal Bonds Value
Michigan--2.8%
Michigan State Strategic Fund, Limited Obligation
Revenue Refunding Bonds, DRIVERS, AMT (e)(j):
$ 2,500 Series 857Z, 7.138% due 3/01/2010 $ 2,762
4,000 Series 858Z, 6.838% due 12/01/2011 4,457
20,000 Wayne County, Michigan, Airport Authority Revenue
Bonds (Detroit Metropolitan Wayne County Airport),
AMT, 5% due 12/01/2029 (b) 20,288
Minnesota--0.5%
5,000 Rochester, Minnesota, Health Care Facilities Revenue
Bonds (Mayo Clinic), 5% due 11/15/2036 5,119
Missouri--0.0%
160 Missouri State Housing Development Commission,
S/F Mortgage Revenue Bonds (Homeowner Loan),
AMT, Series C-1, 7.15% due 3/01/2032 (k) 165
Nebraska--1.8%
10,435 Nebraska Public Power District Revenue Bonds,
Series A, 5% due 1/01/2035 (a) 10,693
6,780 Omaha Convention Hotel Corporation, Nebraska,
Convention Center Revenue Bonds, First Tier,
Series A, 5.125% due 4/01/2032 (a) 6,962
Nevada--7.7%
25,000 Clark County, Nevada, Airport System Subordinate
Lien Revenue Bonds, Series A-2, 5%
due 7/01/2030 (c) 25,554
6,337 Clark County, Nevada, IDR, RIB, AMT, Series 1181,
6.40% due 7/01/2034 (a)(j) 6,770
6,000 Henderson, Nevada, Health Care Facilities Revenue
Bonds (Catholic Healthcare West), Series A, 5.625%
due 7/01/2024 6,319
5,000 Humboldt County, Nevada, PCR, Refunding (Sierra
Pacific Project), 6.55% due 10/01/2013 (a) 5,144
1,165 Reno, Nevada, Capital Improvement Revenue Bonds,
5.50% due 6/01/2019 (c) 1,247
Washoe County, Nevada, Gas Facilities Revenue Bonds
(Sierra Pacific Power Company), AMT:
15,000 6.65% due 12/01/2017 (a) 15,035
5,000 6.55% due 9/01/2020 (b) 5,104
6,550 Washoe County, Nevada, Water and Sewer, GO, 5%
due 1/01/2031 (b) 6,747
5,000 Washoe County, Nevada, Water Facility Revenue Bonds
(Sierra Pacific Power Company), AMT, 6.65%
due 6/01/2017 (b) 5,177
New Jersey--5.9%
16,000 Garden State Preservation Trust of New Jersey, Open
Space and Farmland Preservation Revenue Bonds,
Series A, 5.75% due 11/01/2028 (g) 18,737
New Jersey EDA, Cigarette Tax Revenue Bonds:
3,060 5.75% due 6/15/2029 3,232
2,610 5.50% due 6/15/2031 2,703
14,135 5.75% due 6/15/2034 14,854
14,830 New Jersey EDA, Revenue Bonds, DRIVERS,
Series 785-Z, 6.391% due 7/01/2012 (b)(j) 16,575
Newark, New Jersey, Housing Authority, Port
Authority--Port Newark Marine Terminal
Additional Rent-Backed Revenue Bonds (City of
Newark Redevelopment Projects) (b):
1,500 5.50% due 1/01/2027 1,613
1,380 5.50% due 1/01/2028 1,484
Face
Amount Municipal Bonds Value
New Mexico--0.2%
$ 1,605 New Mexico Educational Assistance Foundation,
Student Loan Revenue Refunding Bonds (Student
Loan Program), AMT, First Sub-Series A-2, 6.65%
due 11/01/2025 $ 1,620
485 New Mexico Mortgage Finance Authority, S/F
Mortgage Revenue Bonds, AMT, Series C-2,
6.95% due 9/01/2031 (k) 489
New York--26.7%
10,250 Long Island Power Authority, New York, Electric
System Revenue Bonds, Series A, 5.10%
due 9/01/2029 10,577
12,500 Metropolitan Transportation Authority, New York,
Commuter Facilities Revenue Refunding Bonds,
Series B, 5.125% due 7/01/2024 (a)(i) 12,940
11,395 Metropolitan Transportation Authority, New York,
Revenue Refunding Bonds, Series A, 5%
due 11/15/2030 (g) 11,671
11,250 Metropolitan Transportation Authority, New York,
Transportation Revenue Refunding Bonds, Series F,
5% due 11/15/2030 11,517
65,000 New York City, New York, City Municipal Water
Finance Authority, Water and Sewer System,
Revenue Refunding Bonds, Series B, 5%
due 6/15/2036 (g) 66,878
New York City, New York, GO:
1,880 Series B, 5.875% due 8/01/2016 (b) 2,044
10,000 Series J, 5.25% due 5/15/2024 10,508
1,000 Series J, 5.25% due 5/15/2025 1,054
20,000 Series M, 5% due 4/01/2030 (m) 20,624
7,200 Series O, 5% due 6/01/2030 7,356
6,000 New York City, New York, GO, Sub-Series C-1, 5.25%
due 8/15/2026 6,313
8,055 New York City, New York, Sales Tax Asset Receivable
Corporation Revenue Bonds, Series A, 5%
due 10/15/2032 (a) 8,336
31,000 New York Liberty Development Corporation, Revenue
Bonds (Goldman Sachs Headquarters), 5.25%
due 10/01/2035 33,442
11,865 New York State Dormitory Authority, Supported
Debt Revenue Bonds (Mental Health Services
Facilities Improvement), Series E, 5%
due 2/15/2035 12,110
10,000 New York State Mortgage Agency Revenue Bonds,
AMT, Series 109, 4.90% due 10/01/2028 9,957
10,000 New York State Thruway Authority, General
Revenue Refunding Bonds, Series G, 5%
due 1/01/2028 (g) 10,357
6,645 New York State Urban Development Corporation,
Personal Income Tax Revenue Bonds, Series B,
5% due 3/15/2030 (g) 6,861
19,500 Port Authority of New York and New Jersey,
Consolidated Revenue Bonds, AMT, One
Hundred Thirty-Seventh Series, 5.125%
due 7/15/2030 (g) 20,147
3,740 Yonkers, New York, GO, Series A, 5%
due 9/01/2031 (a) 3,877
MUNIYIELD INSURED FUND, INC. APRIL 30, 2006
Schedule of Investments (continued) (In Thousands)
Face
Amount Municipal Bonds Value
Oklahoma--0.5%
$ 4,340 Oklahoma State IDR, Refunding, DRIVERS, Series 455,
7.37% due 2/15/2008 (b)(j) $ 4,892
300 Oklahoma State Industries Authority, Revenue
Refunding Bonds (Integris Baptist), VRDN, Series B,
3.62% due 8/15/2029 (b)(h) 300
Pennsylvania--4.4%
10,215 Commonwealth Financing Authority, Pennsylvania,
Revenue Bonds, Series A, 5% due 6/01/2025 (g) 10,650
7,800 Pennsylvania State Turnpike Commission, Turnpike
Revenue Bonds, DRIVERS, Series 460-Z, 6.868%
due 6/01/2012 (a)(j) 9,144
Philadelphia, Pennsylvania, School District, GO,
Series D (c):
12,115 5.125% due 6/01/2034 12,503
6,000 5.25% due 6/01/2034 6,302
5,000 Sayre, Pennsylvania, Health Care Facilities Authority,
Revenue Bonds (Guthrie Healthcare System),
Series B, 7.125% due 12/01/2031 5,856
South Carolina--2.9%
Charleston Educational Excellence Financing
Corporation, South Carolina, Revenue Bonds
(Charleston County School District) (m):
3,895 5.25% due 12/01/2028 4,105
3,465 5.25% due 12/01/2029 3,649
1,160 5.25% due 12/01/2030 1,221
1,325 South Carolina Housing Finance and Development
Authority, Mortgage Revenue Refunding Bonds, AMT,
Series A-2, 6.35% due 7/01/2019 (g) 1,389
18,030 South Carolina Transportation Infrastructure Bank
Revenue Bonds, Series A, 5% due 10/01/2029 (a) 18,477
Tennessee--1.0%
Tennessee HDA, Revenue Bonds (Homeownership
Program), AMT, Series 2B:
1,795 6.05% due 7/01/2012 1,800
2,250 6.15% due 7/01/2014 2,257
Tennessee HDA, Revenue Refunding Bonds
(Homeownership Program), AMT, Series A (g):
3,535 5.25% due 7/01/2022 3,617
2,505 5.35% due 1/01/2026 2,563
Texas--10.3%
1,880 Bexar, Texas, Metropolitan Water District, Waterworks
System Revenue Refunding Bonds, 6.35%
due 5/01/2025 (b) 1,903
1,000 Dallas-Fort Worth, Texas, International Airport,
Joint Revenue Bonds, AMT, Series A, 5%
due 11/01/2035 (g) 1,002
10,500 Dallas-Fort Worth, Texas, International Airport Revenue
Bonds, DRIVERS, AMT, Series 353, 6.838%
due 5/01/2011 (b)(j) 11,688
7,500 Dallas-Fort Worth, Texas, International Airport Revenue
Refunding Bonds, DRIVERS, AMT, Series 336Z,
7.098% due 11/01/2026 (c)(j) 8,375
Harris County, Houston, Texas Sports Authority, Revenue
Refunding Bonds, Senior Lien, Series G (b):
1,665 5.75% due 11/15/2019 1,796
3,500 5.75% due 11/15/2020 3,775
10,000 5.25% due 11/15/2030 10,359
Face
Amount Municipal Bonds Value
Texas--(concluded)
$15,000 Houston, Texas, Airport System Revenue
Refunding Bonds, RIB, Series 845X, 6.93%
due 7/01/2030 (g)(j) $ 16,654
5,450 Houston, Texas, Independent School District, GO, 5%
due 2/15/2030 (g) 5,580
15,000 North Texas Municipal Water District, Texas, Water
System Revenue Bonds, 5% due 9/01/2031 (b) 15,476
4,825 Texas State Department of Housing and Community
Affairs, S/F Mortgage Revenue Bonds, AMT, Series A,
5.45% due 9/01/2023 (b)(k) 4,969
10,000 Texas State Turnpike Authority, Central Texas Turnpike
System Revenue Bonds, First Tier, Series A, 5.50%
due 8/15/2039 (a) 10,724
10,000 University of Texas, Financing System Revenue
Refunding Bonds, Series B, 5% due 8/15/2031 10,316
Vermont--0.1%
640 Vermont HFA, S/F Housing Revenue Bonds, AMT,
Series 12B, 6.30% due 11/01/2019 (g) 652
Virginia--0.3%
2,500 Halifax County, Virginia, IDA, Exempt Facility Revenue
Refunding Bonds (Old Dominion Electric Cooperative
Project), AMT, 5.625% due 6/01/2028 (a) 2,689
Washington--15.2%
Bellevue, Washington, GO, Refunding (b):
2,545 5.25% due 12/01/2026 2,693
2,455 5.25% due 12/01/2027 2,593
2,850 5.25% due 12/01/2028 3,011
3,000 5.25% due 12/01/2029 3,167
17,600 5% due 12/01/2034 18,032
18,150 Central Puget Sound Regional Transportation Authority,
Washington, Sales and Use Tax Revenue Bonds,
Series A, 5% due 11/01/2030 (a) 18,667
3,030 Chelan County, Washington, Public Utility District
Number 001, Consolidated Revenue Bonds
(Chelan Hydro System), AMT, Series A, 5.45%
due 7/01/2037 (a) 3,169
Chelan County, Washington, Public Utility District
Number 001, Consolidated Revenue Refunding Bonds
(Chelan Hydro System), AMT (b):
6,595 Series B, 6.35% due 7/01/2026 6,905
6,000 Series C, 5.65% due 7/01/2032 6,385
3,500 Port of Seattle, Washington, Revenue Bonds, Series A,
5.50% due 2/01/2026 (b) 3,691
9,783 Port of Seattle, Washington, Revenue Refunding Bonds,
RIB, AMT, Series 1169, 6.30% due 7/01/2029 (b)(j) 10,279
10,000 Radford Court Properties, Washington, Student
Housing Revenue Bonds, 5.75%
due 6/01/2032 (b) 10,755
1,720 Seattle, Washington, Drain and Wastewater Utility
Revenue Bonds, 5.75% due 11/01/2029 (b) 1,836
7,380 Seattle, Washington, Water System Revenue Bonds,
5% due 9/01/2034 (b) 7,556
Skagit County, Washington, Public Hospital District,
GO, Series A (b):
4,945 5.25% due 12/01/2025 5,236
5,450 5.25% due 12/01/2026 5,766
MUNIYIELD INSURED FUND, INC. APRIL 30, 2006
Schedule of Investments (concluded) (In Thousands)
Face
Amount Municipal Bonds Value
Washington (concluded)
$ 7,250 Tacoma, Washington, Solid Waste Utility Revenue
Refunding Bonds, Series B, 5.50%
due 12/01/2019 (a) $ 7,494
5,280 Washington State EDA, Lease Revenue Bonds
(Washington Biomedical Research Properties II),
5% due 6/01/2034 (b) 5,405
7,000 Washington State Health Care Facilities Authority
Revenue Bonds (Providence Health System),
Series A, 5.25% due 10/01/2021 (b) 7,270
Washington State, GO:
10,000 DRIVERS, Series 438Z, 7.118%
due 1/01/2009 (b)(j) 11,205
10,075 Series D, 5% due 1/01/2030 (a) 10,418
Face
Amount Municipal Bonds Value
West Virginia--0.6%
$ 5,925 Harrison County, West Virginia, County Commission
for Solid Waste Disposal Revenue Bonds
(Monongahela Power), AMT, Series C, 6.75%
due 8/01/2024 (a) $ 5,971
Wisconsin--0.4%
3,395 Wisconsin State Health and Educational Facilities
Authority Revenue Bonds (Synergyhealth Inc.),
6% due 11/15/2032 3,631
Total Investments (Cost--$1,519,089*)--155.6% 1,554,605
Other Assets Less Liabilities--1.5% 15,158
Preferred Stock, at Redemption Value--(57.1%) (570,518)
-----------
Net Assets Applicable to Common Stock--100.0% $ 999,245
===========
* The cost and unrealized appreciation (depreciation) of investments
as of April 30, 2006, as computed for federal income tax purposes,
were as follows:
Aggregate cost $ 1,519,262
===============
Gross unrealized appreciation $ 39,957
Gross unrealized depreciation (4,614)
---------------
Net unrealized appreciation $ 35,343
===============
(a) AMBAC Insured.
(b) MBIA Insured.
(c) FGIC Insured.
(d) CIFG Insured.
(e) XL Capital Insured.
(f) Prerefunded.
(g) FSA Insured.
(h) 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.
(i) Escrowed to maturity.
(j) The rate disclosed is that currently in effect. This rate changes
periodically and inversely based upon prevailing market rates.
(k) FNMA/GNMA Collateralized.
(l) Represents a step-up bond; the interest rate shown is the effective
yield at the time of purchase by the Fund.
(m) Assured Guaranty Insured.
o 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 -- $30
o Forward interest rate swaps outstanding as of April 30, 2006
were as follows:
Unrealized
Notional Appreciation
Amount (Depreciation)
Pay a fixed rate of 4.119% and receive
a floating rate based on a 1-week Bond
Market Association rate
Broker, Morgan Stanley
Capital Services, Inc.
Expires June 2026 $ 3,750,000 $107,381
Pay a fixed rate of 4.2225% and receive
a floating rate based on a 1-week Bond
Market Association rate
Broker, Morgan Stanley
Capital Services, Inc.
Expires June 2026 $ 2,500,000 41,298
Pay a fixed rate of 4.0775% and receive
a floating rate based on a 1-week Bond
Market Association rate
Broker, Morgan Stanley
Capital Services, Inc.
Expires June 2026 $ 3,750,000 125,865
Pay a fixed rate of 4.371% and receive
a floating rate based on 1-week Bond
Market Association rate
Broker, JPMorgan Chase Bank
Expires July 2026 $119,000,000 (102,459)
Pay a fixed rate of 4.417% and receive
a floating rate based on 1-week Bond
Market Association rate
Broker, Morgan Stanley
Capital Services, Inc.
Expires July 2026 $ 1,250,000 (7,265)
Pay a fixed rate of 4.26% and receive a
floating rate based on a 1-week Bond
Market Association rate
Broker, Morgan Stanley
Capital Services, Inc.
Expires July 2026 $ 1,250,000 15,481
--------
Total $180,301
========
See Notes to Financial Statements.
MUNIYIELD INSURED FUND, INC. APRIL 30, 2006
Statement of Net Assets
As of April 30, 2006
Assets
Investments in unaffiliated securities, at value (cost--$1,519,089,136) $ 1,554,605,445
Unrealized appreciation on forward interest rate swaps 290,025
Cash 16,750
Receivables:
Securities sold $ 80,622,482
Interest 25,922,400 106,544,882
---------------
Prepaid expenses 30,264
---------------
Total assets 1,661,487,366
---------------
Liabilities
Unrealized depreciation on forward interest rate swaps 109,724
Payables:
Securities purchased 90,246,949
Investment adviser 602,485
Dividends to Common Stock shareholders 535,815
Other affiliates 19,267 91,404,516
---------------
Accrued expenses and other liabilities 209,581
---------------
Total liabilities 91,723,821
---------------
Preferred Stock
Preferred Stock, at redemption value, par value $.10 per share
(2,200 Series A Shares, 2,200 Series B Shares, 2,200 Series C Shares,
2,200 Series D Shares, 4,000 Series E Shares, 2,400 Series F Shares,
2,400 Series G Shares, 2,600 Series H Shares and 2,600 Series I Shares
of AMPS* authorized, issued and outstanding at $25,000 per share
liquidation preference) 570,518,118
---------------
Net Assets Applicable to Common Stock
Net assets applicable to Common Stock $ 999,245,427
===============
Analysis of Net Assets Applicable to Common Stock
Common Stock, par value $.10 per share (67,303,125 shares issued and outstanding) $ 6,730,313
Paid-in capital in excess of par 943,024,420
Undistributed investment income--net $ 6,720,377
Undistributed realized capital gains--net 7,073,707
Unrealized appreciation--net 35,696,610
---------------
Total accumulated earnings--net 49,490,694
---------------
Total--Equivalent to $14.85 net asset value per share of Common Stock
(market price--$14.31) $ 999,245,427
===============
* Auction Market Preferred Stock.
See Notes to Financial Statements.
MUNIYIELD INSURED FUND, INC. APRIL 30, 2006
Statement of Operations
For the Six Months Ended April 30, 2006
Investment Income
Interest $ 38,131,580
Dividends from affiliates 30,490
---------------
Total income 38,162,070
---------------
Expenses
Investment advisory fees $ 3,933,355
Commission fees 741,208
Accounting services 192,884
Transfer agent fees 93,944
Professional fees 45,216
Custodian fees 39,436
Printing and shareholder reports 28,453
Directors' fees and expenses 27,938
Listing fees 21,141
Pricing fees 18,286
Other 53,521
---------------
Total expenses before reimbursement 5,195,382
Reimbursement of expenses (1,720)
---------------
Total expenses after reimbursement 5,193,662
---------------
Investment income--net 32,968,408
---------------
Realized & Unrealized Gain (Loss)--Net
Realized gain on:
Investments--net 9,131,424
Forward interest rate swaps--net 1,180,576 10,312,000
---------------
Change in unrealized appreciation/depreciation on:
Investments--net (10,040,127)
Forward interest rate swaps--net (1,085,056) (11,125,183)
--------------- ---------------
Total realized and unrealized loss--net (813,183)
---------------
Dividends & Distributions to Preferred Stock Shareholders
Investment income--net (6,859,458)
Realized gain--net (2,997,462)
---------------
Total dividends and distributions to Preferred Stock shareholders (9,856,920)
---------------
Net Increase in Net Assets Resulting from Operations $ 22,298,305
===============
See Notes to Financial Statements.
MUNIYIELD INSURED FUND, INC. APRIL 30, 2006
Statements of Changes in Net Assets
For the Six For the
Months Ended Year Ended
April 30, October 31,
Increase (Decrease) in Net Assets: 2006 2005
Operations
Investment income--net $ 32,968,408 $ 69,818,702
Realized gain--net 10,312,000 28,419,498
Change in unrealized appreciation/depreciation--net (11,125,183) (42,239,480)
Dividends and distributions to Preferred Stock shareholders (9,856,920) (12,432,230)
--------------- ---------------
Net increase in net assets resulting from operations 22,298,305 43,566,490
--------------- ---------------
Dividends & Distributions to Common Stock Shareholders
Investment income--net (28,401,919) (64,072,574)
Realized gains--net (22,672,674) (953,820)
--------------- ---------------
Net decrease in net assets resulting from dividends and distributions to
Common Stock shareholders (51,074,593) (65,026,394)
--------------- ---------------
Stock Transactions
Adjustment of offering costs resulting from issuance of Preferred Stock -- 58,387
--------------- ---------------
Net increase in net assets resulting from stock transactions -- 58,387
--------------- ---------------
Net Assets Applicable to Common Stock
Total decrease in net assets applicable to Common Stock (28,776,288) (21,401,517)
Beginning of period 1,028,021,715 1,049,423,232
--------------- ---------------
End of period* $ 999,245,427 $ 1,028,021,715
=============== ===============
* Undistributed investment income--net $ 6,720,377 $ 9,013,346
=============== ===============
See Notes to Financial Statements.
MUNIYIELD INSURED FUND, INC. APRIL 30, 2006
Financial Highlights
For the Six
Months Ended
The following per share data and ratios have been derived April 30, For the Year Ended October 31,
from information provided in the financial statements. 2006 2005 2004 2003 2002
Per Share Operating Performance
Net asset value, beginning of period $ 15.27 $ 15.59 $ 15.36 $ 15.15 $ 15.18
----------- ---------- ---------- ---------- ----------
Investment income--net .49+++ 1.04+++ 1.04+++ 1.08+++ 1.07
Realized and unrealized gain (loss)--net --++ (.22) .25 .16 (.04)
Dividends and distributions to Preferred Stock
shareholders:
Investment income--net (.10) (.16) (.07) (.08) (.11)
Realized gain--net (.05) (.02) -- -- --++
----------- ---------- ---------- ---------- ----------
Total from investment operations .34 .64 1.22 1.16 .92
----------- ---------- ---------- ---------- ----------
Less dividends and distributions to Common Stock
shareholders:
Investment income--net (.42) (.95) (.97) (.95) (.95)
Realized gain--net (.34) (.01) -- -- --++
----------- ---------- ---------- ---------- ----------
Total dividends and distributions to Common Stock
shareholders (.76) (.96) (.97) (.95) (.95)
----------- ---------- ---------- ---------- ----------
Offering costs resulting from the issuance of
Preferred Stock -- -- (.02) -- --
----------- ---------- ---------- ---------- ----------
Adjustment of offering costs resulting from the
issuance of Preferred Stock -- --*** -- -- --
----------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 14.85 $ 15.27 $ 15.59 $ 15.36 $ 15.15
=========== ========== ========== ========== ==========
Market price per share, end of period $ 14.31 $ 14.70 $ 14.57 $ 14.51 $ 14.31
=========== ========== ========== ========== ==========
Total Investment Return*
Based on net asset value per share 2.28%+++++ 4.54% 8.52% 8.18% 6.52%
=========== ========== ========== ========== ==========
Based on market price per share 2.39%+++++ 7.69% 7.36% 8.19% 1.42%
=========== ========== ========== ========== ==========
Ratios Based on Average Net Assets of Common Stock
Total expenses, net of reimbursement** 1.03%++++++ 1.01% .95% .94% .97%
=========== ========== ========== ========== ==========
Total expenses** 1.03%++++++ 1.01% .95% .95% .97%
=========== ========== ========== ========== ==========
Total investment income--net** 6.54%++++++ 6.62% 6.77% 6.99% 7.16%
=========== ========== ========== ========== ==========
Amount of dividends to Preferred Stock shareholders 1.36%++++++ 1.05% .51% .49% .73%
=========== ========== ========== ========== ==========
Investment income--net, to Common Stock
shareholders 5.18%++++++ 5.57% 6.26% 6.50% 6.43%
=========== ========== ========== ========== ==========
MUNIYIELD INSURED FUND, INC. APRIL 30, 2006
Financial Highlights (concluded)
For the Six
Months Ended
The following per share data and ratios have been derived April 30, For the Year Ended October 31,
from information provided in the financial statements. 2006 2005 2004 2003 2002
Ratios Based on Average Net Assets of Preferred Stock
Dividends to Preferred Stock shareholders 2.43%++++++ 1.94% 1.08% 1.06% 1.53%
=========== ========== ========== ========== ==========
Supplemental Data
Net assets applicable to Common Stock, end of period
(in thousands) $ 999,245 $1,028,022 $1,049,423 $ 953,662 $ 940,852
=========== ========== ========== ========== ==========
Preferred Stock outstanding, end of period
(in thousands) $ 570,000 $ 570,000 $ 570,000 $ 440,000 $ 440,000
=========== ========== ========== ========== ==========
Portfolio turnover 58.33% 123.85% 144.40% 114.05% 97.34%
=========== ========== ========== ========== ==========
Leverage
Asset coverage per $1,000 $ 2,753 $ 2,804 $ 2,841 $ 3,167 $ 3,138
=========== ========== ========== ========== ==========
Dividends Per Share on Preferred Stock Outstanding
Series A--Investment income--net $ 314 $ 478 $ 272 $ 270 $ 364
=========== ========== ========== ========== ==========
Series B--Investment income--net $ 306 $ 481 $ 283 $ 273 $ 364
=========== ========== ========== ========== ==========
Series C--Investment income--net $ 294 $ 502 $ 251 $ 268 $ 360
=========== ========== ========== ========== ==========
Series D--Investment income--net $ 332 $ 474 $ 264 $ 247 $ 348
=========== ========== ========== ========== ==========
Series E--Investment income--net $ 299 $ 471 $ 259 $ 240 $ 352
=========== ========== ========== ========== ==========
Series F--Investment income--net $ 314 $ 481 $ 271 $ 274 $ 359
=========== ========== ========== ========== ==========
Series G--Investment income--net $ 280 $ 487 $ 269 $ 304 $ 545
=========== ========== ========== ========== ==========
Series H++++--Investment income--net $ 293 $ 493 $ 63 -- --
=========== ========== ========== ========== ==========
Series I++++--Investment income--net $ 283 $ 498 $ 65 -- --
=========== ========== ========== ========== ==========
* Total investment returns based on market value, which can be significantly greater or lesser
than the net asset value, may result in substantially different returns. Total investment
returns exclude the effects of sales charges.
** Do not reflect the effect of dividends to Preferred Stock shareholders.
*** Amount is less than $.01 per share.
++ Amount is less than $(.01) per share.
++++ Series H and Series I were issued on August 23, 2004.
++++++ Annualized.
+++ Based on average shares outstanding.
+++++ Aggregate total investment return.
See Notes to Financial Statements.
MUNIYIELD INSURED FUND, INC. APRIL 30, 2006
Notes to Financial Statements
1. Significant Accounting Policies:
MuniYield Insured 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. These unaudited financial statements reflect all adjustments, which
are, in the opinion of management, necessary to present a fair statement of
the results for the interim period. All such adjustments are of a normal,
recurring nature. The Fund determines and makes available for publication the
net asset value of its Common Stock on a daily basis. The Fund's Common Stock
shares are listed on the New York Stock Exchange under the symbol MYI. 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 based upon quoted fair values received daily by the
Fund from a 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.
* 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.
* Options--The Fund may write covered call options and purchase put options.
When the Fund writes an option, an amount equal to the premium received by the
Fund is reflected as an asset and an equivalent liability. The amount of the
liability is subsequently marked-to-market to reflect the current market value
of the option written. When a security is purchased or sold through an
exercise of an option, the related premium paid (or received) is added to (or
deducted from) the basis of the security acquired, or deducted from (or added
to) the proceeds of the security sold. When an option expires (or the Fund
enters into a closing transaction), the Fund realizes a gain or loss on the
option to the extent of the premiums received or paid (or gain or loss to the
extent the cost of the closing transaction exceeds the premium paid or
received).
Written and purchased options are non-income producing investments.
* 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.
MUNIYIELD INSURED FUND, INC. APRIL 30, 2006
Notes to Financial Statements (concluded)
(c) Income taxes--It is the Fund's policy to comply with the requirements of
the Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all of its taxable income to its shareholders.
Therefore, no federal income tax provision is required.
(d) Security transactions and investment income--Security transactions are
recorded on the dates the transactions are entered into (the trade dates).
Realized gains and losses on security transactions are determined on the
identified cost basis. Dividend income is recorded on the ex-dividend dates.
Interest income is recognized on the accrual basis. The Fund amortizes all
premiums and discounts on debt securities.
(e) Dividends and distributions--Dividends from net investment income are
declared and paid monthly. Distributions of capital gains are recorded on the
ex-dividend dates.
(f) Offering costs--Direct expenses relating to the public offering of the
Fund's Preferred Stock were charged to capital. Any adjustments to estimates
of offering costs were recorded back 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 weekly net assets,
including proceeds from the issuance of Preferred Stock. The Investment
Adviser has agreed to reimburse its management fee by the amount of the
management fees the Fund pays to FAM indirectly through its investment in the
Merrill Lynch Institutional Tax-Exempt Fund. For the six months ended April
30, 2006, FAM reimbursed the Fund in the amount of $1,720.
For the six months ended April 30, 2006, the Fund reimbursed FAM $17,062 for
certain accounting services.
Certain officers and/or directors of the Fund are officers and/or directors of
FAM, PSI, and/or ML & Co.
In February 2006, ML & Co. and BlackRock, Inc. entered into an agreement to
contribute ML & Co.'s investment management business, including FAM, to the
investment management business of BlackRock, Inc. The transaction is expected
to close in the third quarter of 2006.
3. Investments:
Purchases and sales of investments, excluding short-term securities, for the
six months ended April 30, 2006 were $917,120,322 and $936,694,762,
respectively.
4. Capital Stock Transactions:
The Fund is authorized to issue 200,000,000 shares of stock, including
Preferred Stock, par value $.10 per share, all of which were initially
classified as Common Stock. The Board of Directors is authorized, however, to
reclassify any unissued shares of capital stock without approval of the
holders of Common Stock.
Preferred Stock
Auction Market Preferred Stock are redeemable shares of Preferred Stock of the
Fund, with a par value of $.10 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. The yields in effect at April 30, 2006 were as
follows: Series A, 3.27%; Series B, 3.40%; Series C, 3.50%; Series D, 3.70%;
Series E, 3.70%; Series F, 3.70%; Series G, 3.70%; Series H, 3.60%; and
Series I, 3.775%.
The Fund pays commissions to certain broker-dealers at the end of each auction
at an annual rate ranging from .25% to .375%, calculated on the proceeds of
each auction. For the six months ended April 30, 2006, Merrill Lynch, Pierce,
Fenner & Smith, Incorporated, an affiliate of FAM, earned $343,632 as
commissions.
5. Subsequent Event:
The Fund paid a tax-exempt income dividend to holders of Common Stock in the
amount of .068000 per share on May 30, 2006 to shareholders of record on
May 15, 2006.
MUNIYIELD INSURED FUND, INC. APRIL 30, 2006
Item 2 - Code of Ethics - Not Applicable to this semi-annual report
Item 3 - Audit Committee Financial Expert - Not Applicable to this semi-
annual report
Item 4 - Principal Accountant Fees and Services - Not Applicable to this
semi-annual report
Item 5 - Audit Committee of Listed Registrants - Not Applicable to this semi-
annual report
Item 6 - Schedule of Investments - Not Applicable
Item 7 - Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies - Not Applicable to this semi-
annual report
Item 8 - Portfolio Managers of Closed-End Management Investment Companies -
Not Applicable to this semi-annual report
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 last 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 - Not Applicable to this semi-annual report
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.
MuniYield Insured Fund, Inc.
By: /s/ Robert C. Doll, Jr.
---------------------------
Robert C. Doll, Jr.,
Chief Executive Officer of
MuniYield Insured Fund, Inc.
Date: June 22, 2006
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
MuniYield Insured Fund, Inc.
Date: June 22, 2006
By: /s/ Donald C. Burke
---------------------------
Donald C. Burke,
Chief Financial Officer of
MuniYield Insured Fund, Inc.
Date: June 22, 2006