-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KvnzvRfG0vnhjFYS1FPfibrZD/MQ93v4Mzz7togbhYO8DzgkIRwqC9Resfny2wcX cTE9zWxSG00hUHusaozPDg== 0000900092-96-000094.txt : 19960513 0000900092-96-000094.hdr.sgml : 19960513 ACCESSION NUMBER: 0000900092-96-000094 CONFORMED SUBMISSION TYPE: N-30B-2 PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960510 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MERRILL LYNCH MUNICIPAL BOND FUND INC CENTRAL INDEX KEY: 0000225635 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 132896246 STATE OF INCORPORATION: NJ FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: N-30B-2 SEC ACT: 1940 Act SEC FILE NUMBER: 811-02688 FILM NUMBER: 96559776 BUSINESS ADDRESS: STREET 1: P O BOX 9011 CITY: PRINCETON STATE: NJ ZIP: 08543 BUSINESS PHONE: 6092822026 FORMER COMPANY: FORMER CONFORMED NAME: ONE LIBERTY MUNICIPAL BOND FUND INC DATE OF NAME CHANGE: 19780622 N-30B-2 1 QUARTERLY REPORT MERRILL LYNCH MUNICIPAL BOND FUND, INC. FUND LOGO Quarterly Report March 31, 1996 This report is not authorized for use as an offer of sale or a solicitation of an offer to buy shares of the Fund unless accompanied or preceded by the Fund's current prospectus. Past performance results shown in this report should not be considered a representation of future performance. Investment return and principal value of shares will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Statements and other information herein are as dated and are subject to change. Merrill Lynch Municipal Bond Fund, Inc. Box 9011 Princeton, NJ 08543-9011 MERRILL LYNCH MUNICIPAL BOND FUND, INC. Officers and Directors Arthur Zeikel, President and Director Ronald W. Forbes, Director Cynthia A. Montgomery, Director Charles C. Reilly, Director Kevin A. Ryan, Director Richard R. West, Director Terry K. Glenn, Executive Vice President Vincent R. Giordano, Senior Vice President Donald C. Burke, Vice President Kenneth A. Jacob, Vice President Gerald M. Richard, Treasurer Mark B. Goldfus, Secretary Custodian The Bank of New York 90 Washington Street, 12th Floor New York, New York 10286 Transfer Agent Merrill Lynch Financial Data Services, Inc. 4800 Deer Lake Drive East Jacksonville, Florida 32246-6484 (800) 637-3863 DEAR SHAREHOLDER As 1995 ended and into the first two months of 1996, it appeared that the US economy was losing momentum. Lackluster retail sales, increases in initial unemployment claims (along with weak job and income growth), and evidence of slowing in the manufacturing sector all suggested that the rate of economic growth was slowing, with some forecasters even suggesting the possibility of an imminent recession. With inflationary pressures well subdued, these signs of economic weakness led the Federal Reserve Board to lower short-term interest rates at its January Federal Open Market Committee meeting. However, investor perceptions regarding the rate of future economic growth changed dramatically with the report of stronger-than- expected employment data for February and March. As a result, the consensus outlook regarding the direction of business activity shifted from expectations of weakness to anticipation of a revival in growth of the economy. Long-term interest rates rose, and the Federal Reserve Board left monetary policy on hold. Investors are likely to continue to focus on the probable direction of economic activity and Federal Reserve Board monetary policy in the weeks ahead. At this time, inflationary pressures do not seem to be building and the manufacturing sector is still relatively weak, which suggest that the economy is not on the verge of overheating. Nevertheless, it is likely that any further indication of stronger economic activity in the weeks ahead may add to investor concerns that accelerating economic activity could lead to higher interest rates. The Municipal Market Tax-exempt bond yields rose for the three months ended March 31, 1996. Long-term municipal bond yields were little changed in January and early February. However, by late February yields began to rise somewhat as investors began to see signs of emerging domestic growth. The surge in US employment reported in early March appeared to confirm investors' earlier concerns, and yields rose rapidly for the remainder of the March quarter. As measured by the Bond Buyer Revenue Bond Index, tax-exempt revenue bond yields rose approximately 45 basis points (0.45%) to end the quarter at 6.15%. However, the increase in taxable bond yields was more substantial. Long-term US Treasury bond rates rose over 70 basis points to finish the period at 6.67%. The March quarter saw the municipal market reverse the trend seen throughout much of 1995 and significantly outperform US Treasury securities. The municipal bond market's recent outperformance was largely the result of two principal factors. First, and perhaps more importantly, much of the earlier concern regarding proposed changes in Federal income tax codes and their effect on the tax treatment of tax-exempt bond income has dissipated. As the negative revenue impact of the various proposals, such as the flat tax, became apparent, the likelihood of immediate tax reform quickly diminished. When the Kemp Commission dealing with Federal income tax reform released its findings early in 1996, the obvious need for reform was highlighted. However, no specific recommendations of a flat tax, value-added tax or any other specific reform were made. Consequently, fears of losing the favored tax treatment of municipal bond income declined even further. As a percentage of Treasury bond yields, tax-exempt bond yield ratios quickly declined from 95% to approximately 90%. This allowed the municipal bond market to maintain much of the gains made since early 1995. The second major factor leading to the municipal bond market's recent improvement was the return of a more favorable technical environment. Over the past three months, approximately $90 billion in municipal securities were underwritten, an increase of approximately 35% versus the comparable period a year earlier. However, much of this increase was biased by recent underwritings dedicated toward refinancing. Municipal issuers sought to refinance their existing higher-couponed debt as tax-exempt bond yields approached their recent historic lows. Over the past three months such refundings were estimated to represent at least 50% of total issuance. However, at the same time investors continue to receive significant amounts of assets derived from coupon income, bond maturities and proceeds from early redemptions. In January and February investors received approximately $35 billion in such assets, nearly equal to the total amount of bonds issued during the quarter ended March 31, 1996. These cash flows helped maintain individual retail investor demand during recent months. Additionally, major institutional investors, such as certain insurance companies whose underwriting profits were cyclically high, demonstrated significant ongoing interest in the tax-exempt bond market, particularly on higher-quality securities. Individual and institutional investor demand was strong enough during the quarter ended March 31, 1996 to absorb the relative increase in bond issuance. Looking ahead, we believe the municipal bond market is likely to continue to outperform the US Treasury bond market. Investor demand should remain adequate to absorb new bond issuance. In addition, it is unlikely that the rapid pace of issuance seen thus far in 1996 will be maintained. The recent rise in yields made further bond refinancings economically unfeasible. Since these refinancings were the driving force of recent bond issuance, as the amount of these refundings decline, overall issuance should decline. This should allow the current demand/supply balance to be easily maintained. Additionally, as a percentage of Treasury bond yields, long-term municipal bond yields remain historically attractive. With long- term, tax-exempt revenue bonds yielding approximately 90% of their taxable counterparts, should taxable interest rates resume their decline, municipal bond yields are poised to decline further. Portfolio Strategy Insured Portfolio and National Portfolio During the quarter ended March 31, 1996, we structured the Insured Portfolio and the National Portfolio to seek to generate an above- industry average current yield, while maintaining a lower level of sensitivity to the generally rising direction of interest rates. Cash equivalent reserve levels in the National Portfolio were raised to approximately 8% of total assets, and a large portion of assets committed to longer maturities currently have coupons structured for income rather than expectations of dramatic price appreciation. The Insured Portfolio maintained its holdings of prerefunded bonds totaling 12% of net assets. Prerefunded bonds generally provide higher levels of income than cash equivalents but are not as price sensitive to interest rate movements as long-term bonds. This more defensive investment strategy served both Portfolios well during the recent rise in long-term interest rates. However, the market's recent volatility creates opportunities. Therefore, we are monitoring the US economic backdrop and the overall valuation of municipal rates, looking for a re-entry point at which time we would take a more aggressive approach. We are seeking higher-yielding investment opportunities for the National Portfolio within the credit limits detailed by the Fund's prospectus. Limited Maturity Portfolio We used a somewhat aggressive investment strategy for the Limited Maturity Portfolio during the March quarter as the Federal Reserve Board continued its move to a more neutral monetary policy. The Federal Funds rate was cut by 25 basis points in January 1996, the third monetary easing move of such magnitude in the current cycle. However, unlike previous quarters, we focused our Portfolio investments on higher-coupon securities which hold their value better in periods of interest rate volatility while offering a higher level of current income. This strategy benefited the Fund during the period of rising interest rates in late February and March. However, the Fund was still adversely affected during this time although the short maturity of the Fund's portfolio helped it relative to longer-term fixed income funds. As always, credit quality and diversity remain paramount to the Fund. Sincerely, (Arthur Zeikel) Arthur Zeikel President (Vincent R. Giordano) Vincent R. Giordano Senior Vice President (Kenneth A. Jacob) Kenneth A. Jacob Portfolio Manager (Peter J. Hayes) Peter J. Hayes Portfolio Manager April 24, 1996 PERFORMANCE DATA About Fund Performance Investors are able to purchase shares of the Fund through the Merrill Lynch Select Pricing SM System, which offers four pricing alternatives: * Class A Shares incur a maximum initial sales charge (front-end load) of 4% and bear no ongoing distribution or account maintenance fees for Insured and National Portfolios. Limited Maturity Portfolio incurs a maximum initial sales charge (front-end load) of 1% and bears no ongoing distribution or account maintenance fees. * Class B Shares are subject to a maximum contingent deferred sales charge of 4% if redeemed during the first year, decreasing 1% each year thereafter to 0% after the fourth year for Insured and National Portfolios. Limited Maturity Portfolio is subject to a maximum contingent deferred sales charge of 1% if redeemed within one year of purchase. In addition, Insured and National Portfolios are subject to a distribution fee of 0.50% and an account maintenance fee of 0.25%. Limited Maturity Portfolio is subject to a distribution fee of 0.20% and an account maintenance fee of 0.15%. All three classes of shares automatically convert to Class D Shares after 10 years. * Class C Shares are subject to a distribution fee of 0.55% and an account maintenance fee of 0.25% for Insured and National Portfolios. Limited Maturity Portfolio is subject to a distribution fee of 0.20% and an account maintenance fee of 0.15%. In addition, Class C Shares are subject to a 1% contingent deferred sales charge if redeemed within one year of purchase. * Class D Shares incur a maximum initial sales charge of 4% and an account maintenance fee of 0.25% (but no distribution fee) for Insured and National Portfolios. Limited Maturity Portfolio incurs a maximum initial sales charge of 1% and an account maintenance fee of 0.10% (but no distribution fee). None of the past results shown should be considered a representation of future performance. Investment return and principal value of shares will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Dividends paid to each class of shares will vary because of the different levels of account maintenance, distribution and transfer agency fees applicable to each class, which are deducted from the income available to be paid to shareholders. Average Annual Total Returns Insured Portfolio % Return Without % Return With Class A Shares* Sales Charge Sales Charge** Year Ended 3/31/96 +7.03% +2.74% Five Years Ended 3/31/96 +7.70 +6.82 Ten Years Ended 3/31/96 +7.62 +7.18 [FN] *Maximum sales charge is 4%. **Assuming maximum sales charge. % Return % Return Class B Shares* Without CDSC With CDSC** Year Ended 3/31/96 +6.09% +2.09% Five Years Ended 3/31/96 +6.87 +6.87 Inception (10/21/88) through 3/31/96 +7.03 +7.03 [FN] *Maximum contingent deferred sales charge is 4% and is reduced to 0% after 4 years. **Assuming payment of applicable contingent deferred sales charge. % Return % Return Class C Shares* Without CDSC With CDSC** Year Ended 3/31/96 +6.17% +5.17% Inception (10/21/94) through 3/31/96 +9.13 +9.13 [FN] *Maximum contingent deferred sales charge is 1% and is reduced to 0% after 1 year. **Assuming payment of applicable contingent deferred sales charge. % Return Without % Return With Class D Shares* Sales Charge Sales Charge** Year Ended 3/31/96 +6.63% +2.36% Inception (10/21/94) through 3/31/96 +9.74 +6.68 [FN] *Maximum sales charge is 4%. **Assuming maximum sales charge. National Portfolio % Return Without % Return With Class A Shares* Sales Charge Sales Charge** Year Ended 3/31/96 +8.48% +4.14% Five Years Ended 3/31/96 +8.10 +7.22 Ten Years Ended 3/31/96 +7.70 +7.26 [FN] *Maximum sales charge is 4%. **Assuming maximum sales charge. % Return % Return Class B Shares* Without CDSC With CDSC** Year Ended 3/31/96 +7.56% +3.56% Five Years Ended 3/31/96 +7.29 +7.29 Inception (10/21/88) through 3/31/96 +7.05 +7.05 [FN] *Maximum contingent deferred sales charge is 4% and is reduced to 0% after 4 years. **Assuming payments of applicable contingent deferred sales charge. % Return % Return Class C Shares* Without CDSC With CDSC** Year Ended 3/31/96 +7.61% +6.61% Inception (10/21/94) through 3/31/96 +9.07 +9.07 [FN] *Maximum contingent deferred sales charge is 1% and is reduced to 0% after 1 year. **Assuming payment of applicable contingent deferred sales charge. % Return Without % Return With Class D Shares* Sales Charge Sales Charge** Year Ended 3/31/96 +8.21% +3.88% Inception (10/21/94) through 3/31/96 +9.66 +6.61 [FN] *Maximum sales charge is 4%. **Assuming maximum sales charge. Limited Maturity Portfolio % Return Without % Return With Class A Shares* Sales Charge Sales Charge** Year Ended 3/31/96 +4.83% +3.78% Five Years Ended 3/31/96 +4.70 +4.49 Ten Years Ended 3/31/96 +5.19 +5.08 [FN] *Maximum sales charge is 1%. **Assuming maximum sales charge. % Return % Return Class B Shares* Without CDSC With CDSC** Year Ended 3/31/96 +4.45% +3.45% Inception (11/2/92) through 3/31/96 +3.58 +3.58 [FN] *Maximum contingent deferred sales charge is 1% and is reduced to 0% after 1 year. **Assuming payment of applicable contingent deferred sales charge. % Return % Return Class C Shares* Without CDSC With CDSC** Year Ended 3/31/96 +4.29% +3.29% Inception (10/21/94) through 3/31/96 +4.21 +4.21 [FN] *Maximum contingent deferred sales charge is 1% and is reduced to 0% after 1 year. **Assuming payment of applicable contingent deferred sales charge. % Return Without % Return With Class D Shares* Sales Charge Sales Charge** Year Ended 3/31/96 +4.62% +3.57% Inception (10/21/94) through 3/31/96 +4.56 +3.83 [FN] *Maximum sales charge is 1%. **Assuming maximum sales charge. PERFORMANCE DATA (continued) Performance Summary-- Class A Shares
1/1-12/31 Beginning/Ending Net Asset Value Dividends Paid* % Change** Period Limited Limited Limited Covered Insured National Maturity Insured National Maturity Insured National Maturity 10/21/77--12/31/77 $9.80/9.80 -- -- $ 0.09 -- -- + 0.94% -- -- 1978 9.80/8.97 -- -- 0.48 -- -- - 3.69 -- -- 1979++ 8.97/8.39 $ 9.60/9.60 $ 9.90/9.88 0.53 $ 0.11 $0.10 - 0.77 + 1.17% +0.86% 1980 8.39/6.86 9.60/8.54 9.88/9.74 0.60 0.79 0.64 -11.46 - 3.00 +5.14 1981 6.86/5.66 8.54/7.34 9.74/9.78 0.65 0.90 0.77 - 8.49 - 3.82 +8.64 1982 5.66/6.81 7.34/8.71 9.78/9.89 0.67 0.93 0.80 +33.96 +33.16 +9.67 1983 6.81/6.97 8.71/9.01 9.89/9.76 0.65 0.89 0.67 +12.20 +14.04 +5.57 1984 6.97/6.88 9.01/8.96 9.76/9.74 0.65 0.90 0.67 + 8.49 +10.00 +6.91 1985 6.88/7.53 8.96/9.86 9.74/9.75 0.64 0.88 0.63 +19.56 +20.76 +6.71 1986 7.53/8.18 9.86/10.67 9.75/9.90 0.61(1) 1.01(1) 0.56 +17.24 +19.08 +7.47 1987 8.18/7.56 10.67/9.76 9.90/9.68 0.68(2) 0.86(2) 0.53(2) + 0.86 - 0.40 +3.18 1988 7.56/7.79 9.76/10.11 9.68/9.68 0.57 0.76 0.56 +10.92 +11.71 +5.90 1989 7.79/7.94 10.11/10.25 9.68/9.74 0.57 0.75 0.59 + 9.49 + 9.11 +6.93 1990 7.94/7.86 10.25/10.09 9.74/9.72 0.61(3) 0.73 0.60 + 7.07 + 5.85 +6.11 1991 7.86/8.18 10.09/10.49 9.72/9.88 0.60(4) 0.82(4) 0.54 +12.07 +12.58 +7.39 1992 8.18/8.27 10.49/10.55 9.88/9.97 0.63(5) 0.89(5) 0.45 + 9.04 + 9.35 +5.62 1993 8.27/8.60 10.55/10.91 9.97/10.01 0.71(6) 0.94(6) 0.38 +12.85 +12.59 +4.30 1994 8.60/7.43 10.91/9.40 10.01/9.77 0.60(7) 0.81(7) 0.37 - 6.76 - 6.55 +1.35 1995 7.43/8.25 9.40/10.44 9.77/9.98 0.45 0.60 0.38 +17.43 +17.83 +6.13 1/1/96--3/31/96 8.25/7.97 10.44/10.14 9.98/9.94 0.10 0.14 0.09 - 2.03 - 1.47 +0.58 ------ ------ ----- Total $11.09 $13.71 $9.33 Cumulative total return as of 3/31/96: +246.61%** +338.06%** +159.51%** *Figures may include short-term capital gains distributions. **Figures assume reinvestment of all dividends and capital gains distributions at net asset value on the payable date, and do not include sales charges; results would be lower if sales charge was included. ++For National and Limited Maturity Portfolios, period covered is from 11/02/79 to 12/31/79. (1)Includes capital gains of $0.011 and $0.178 for the Insured and National Portfolios, respectively. (2)Includes capital gains of $0.098, $0.073 and $0.012 for the Insured, National and Limited Maturity Portfolios, respectively. (3)Includes capital gains of $0.064 for the Insured Portfolio. (4)Includes capital gains of $0.058 and $0.060 for the Insured and National Portfolios, respectively. (5)Includes capital gains of $0.084 and $0.130 for the Insured and National Portfolios, respectively. (6)Includes capital gains of $0.181 and $0.157 for the Insured and National Portfolios, respectively. (7)Includes capital gains of $0.141 and $0.209 for the Insured and National Portfolios, respectively.
Performance Summary-- Class B Shares
1/1-12/31 Beginning/Ending Net Asset Value Dividends Paid* % Change** Period Limited Limited Limited Covered Insured National Maturity Insured National Maturity Insured National Maturity 10/21/88--12/31/88 $7.81/7.78 $10.14/10.11 -- $0.11 $0.14 -- + 0.97% + 1.08% -- 1989 7.78/7.94 10.11/10.25 -- 0.51 0.67 -- + 8.81 + 8.29 -- 1990 7.94/7.86 10.25/10.09 -- 0.55(1) 0.66 -- + 6.28 + 5.05 -- 1991 7.86/8.17 10.09/10.49 -- 0.54(2) 0.75(2) -- +11.10 +11.74 -- 1992 8.17/8.27 10.49/10.55 $ 9.93/9.97 0.56(3) 0.81(3) $0.06 + 8.35 + 8.53 +1.05% 1993 8.27/8.59 10.55/10.90 9.97/10.01 0.64(4) 0.85(4) 0.35 +11.88 +11.65 +3.93 1994 8.59/7.43 10.90/9.39 10.01/9.77 0.53(5) 0.73(5) 0.34 - 7.36 - 7.27 +1.03 1995 7.43/8.24 9.39/10.44 9.77/9.98 0.39 0.52 0.34 +16.41 +17.07 +5.75 1/1/96--3/31/96 8.24/7.96 10.44/10.13 9.98/9.94 0.09 0.12 0.08 - 2.20 - 1.74 +0.50 ----- ----- ----- Total $3.92 $5.25 $1.17 Cumulative total return as of 3/31/96: +65.87%** +66.08%** +12.76%** *Figures may include short-term capital gains distributions. **Figures assume reinvestment of all dividends and capital gains distributions at net asset value on the payable date, and do not reflect deduction of any sales charges; results would be lower if sales charge was deducted. ***Limited Maturity Portfolio commenced operations on 11/02/92. (1)Includes capital gains of $0.064 for the Insured Portfolio. (2)Includes capital gains of $0.058 and $0.060 for the Insured and National Portfolios, respectively. (3)Includes capital gains of $0.084 and $0.130 for the Insured and National Portfolios, respectively. (4)Includes capital gains of $0.181 and $0.157 for the Insured and National Portfolios, respectively. (5)Includes capital gains of $0.141 and $0.209 for the Insured and National Portfolios, respectively.
Performance Summary-- Class C Shares
1/1-12/31 Beginning/Ending Net Asset Value Dividends Paid* % Change** Period Limited Limited Limited Covered Insured National Maturity Insured National Maturity Insured National Maturity 10/21/94--12/31/94 $7.68/7.43 $ 9.85/9.40 $ 9.83/9.77 $0.22(1) $0.31(1) $0.07 - 0.41% - 1.39% +0.11% 1995 7.43/8.25 9.40/10.44 9.77/10.00 0.38 0.52 0.34 +16.50 +16.89 +5.92 1/1/96--3/31/96 8.25/7.97 10.44/10.14 10.00/9.92 0.09 0.12 0.08 - 2.21 - 1.66 +0.08 ----- ----- ----- Total $0.69 $0.95 $0.49 Cumulative total return as of 3/31/96: +13.45%** +13.36%** +6.13%** *Figures may include short-term capital gains distributions. **Figures assume reinvestment of all dividends and capital gains distributions at net asset value on the payable date, and do not reflect deduction of any sales charges; results would be lower if sales charge was deducted. (1)Includes capital gains of $0.141 and $0.209 for the Insured and National Portfolios, respectively.
PERFORMANCE DATA (concluded) Performance Summary-- Class D Shares
1/1-12/31 Beginning/Ending Net Asset Value Dividends Paid* % Change** Period Limited Limited Limited Covered Insured National Maturity Insured National Maturity Insured National Maturity 10/21/94--12/31/94 $7.68/7.43 $ 9.85/9.40 $9.83/9.77 $0.23(1) $0.32(1) $0.07 - 0.30% - 1.29% +0.13% 1995 7.43/8.25 9.40/10.45 9.77/9.98 0.43 0.57 0.37 +17.14 +17.65 +6.03 1/1/96--3/31/96 8.25/7.97 10.45/10.14 9.98/9.94 0.10 0.13 0.09 - 2.09 - 1.62 +0.46 ----- ----- ----- Total $0.76 $1.02 $0.53 Cumulative total return as of 3/31/96: +14.36%** + 8.21%** +6.65%** *Figures may include short-term capital gains distributions. **Figures assume reinvestment of all dividends and capital gains distributions at net asset value on the payable date, and do not include sales charges; results would be lower if sales charge was included. (1)Includes capital gains of $0.141 and $0.209 for the Insured and National Portfolios, respectively.
Recent Performance Results*
12 Month 3 Month Standardized 3/31/96 12/31/95 3/31/95 % Change % Change 30-Day Yield Insured Portfolio Class A Shares $ 7.97 $ 8.25 $7.87 +1.27% -3.39% 4.86% Insured Portfolio Class B Shares 7.96 8.24 7.87 +1.14 -3.40 4.30 Insured Portfolio Class C Shares 7.97 8.25 7.87 +1.27 -3.39 4.25 Insured Portfolio Class D Shares 7.97 8.25 7.88 +1.14 -3.39 4.62 National Portfolio Class A Shares 10.14 10.44 9.91 +2.32 -2.87 5.07 National Portfolio Class B Shares 10.13 10.44 9.91 +2.22 -2.97 4.51 National Portfolio Class C Shares 10.14 10.44 9.91 +2.32 -2.87 4.46 National Portfolio Class D Shares 10.14 10.45 9.91 +2.32 -2.97 4.83 Limited Maturity Portfolio Class A Shares 9.94 9.98 9.85 +0.91 -0.40 3.56 Limited Maturity Portfolio Class B Shares 9.94 9.98 9.85 +0.91 -0.40 3.24 Limited Maturity Portfolio Class C Shares 9.92 10.00 9.84 +0.81 -0.80 3.17 Limited Maturity Portfolio Class D Shares 9.94 9.98 9.85 +0.91 -0.40 3.46 Insured Portfolio Class A Shares--Total Return +7.03(1) -2.03(2) Insured Portfolio Class B Shares--Total Return +6.09(3) -2.20(4) Insured Portfolio Class C Shares--Total Return +6.17(5) -2.21(6) Insured Portfolio Class D Shares--Total Return +6.63(7) -2.09(8) National Portfolio Class A Shares--Total Return +8.48(9) -1.47(10) National Portfolio Class B Shares--Total Return +7.56(11) -1.74(12) National Portfolio Class C Shares--Total Return +7.61(13) -1.66(14) National Portfolio Class D Shares--Total Return +8.21(15) -1.62(16) Limited Maturity Portfolio Class A Shares--Total Return +4.83(17) +0.58(18) Limited Maturity Portfolio Class B Shares--Total Return +4.45(19) +0.50(20) Limited Maturity Portfolio Class C Shares--Total Return +4.29(21) +0.08(22) Limited Maturity Portfolio Class D Shares--Total Return +4.62(23) +0.46(24) *Investment results shown do not reflect sales charges; results shown would be lower if a sales charge was included. (1)Percent change includes reinvestment of $0.446 per share ordinary income dividends. (2)Percent change includes reinvestment of $0.104 per share ordinary income dividends. (3)Percent change includes reinvestment of $0.385 per share ordinary income dividends. (4)Percent change includes reinvestment of $0.090 per share ordinary income dividends. (5)Percent change includes reinvestment of $0.381 per share ordinary income dividends. (6)Percent change includes reinvestment of $0.089 per share ordinary income dividends. (7)Percent change includes reinvestment of $0.426 per share ordinary income dividends. (8)Percent change includes reinvestment of $0.099 per share ordinary income dividends. (9)Percent change includes reinvestment of $0.596 per share ordinary income dividends. (10)Percent change includes reinvestment of $0.138 per share ordinary income dividends. (11)Percent change includes reinvestment of $0.519 per share ordinary income dividends. (12)Percent change includes reinvestment of $0.119 per share ordinary income dividends. (13)Percent change includes reinvestment of $0.514 per share ordinary income dividends. (14)Percent change includes reinvestment of $0.118 per share ordinary income dividends. (15)Percent change includes reinvestment of $0.571 per share ordinary income dividends. (16)Percent change includes reinvestment of $0.132 per share ordinary income dividends. (17)Percent change includes reinvestment of $0.379 per share ordinary income dividends. (18)Percent change includes reinvestment of $0.088 per share ordinary income dividends. (19)Percent change includes reinvestment of $0.343 per share ordinary income dividends. (20)Percent change includes reinvestment of $0.080 per share ordinary income dividends. (21)Percent change includes reinvestment of $0.337 per share ordinary income dividends. (22)Percent change includes reinvestment of $0.078 per share ordinary income dividends. (23)Percent change includes reinvestment of $0.369 per share ordinary income dividends. (24)Percent change includes reinvestment of $0.086 per share ordinary income dividends.
PORTFOLIO COMPOSITION For the Quarter Ended March 31, 1996 Insured Portfolio Top Ten States* Texas 17.06% Pennsylvania 8.88 Illinois 6.53 Massachusetts 5.87 Florida 4.93 Georgia 4.12 New York 4.00 West Virginia 3.55 Utah 3.52 New Jersey 3.48 ------- Total Top Ten 61.94 Total Others 38.06 ------- Total Portfolio 100.00% ======= Net assets as of March 31, 1996 were $2,421,772,231. Quality Ratings* (Based on Nationally Recognized Rating Services) A pie chart illustrating the following percentages: AAA/Aaa 96% Other++ 4% [FN] *Based on total market value of the Portfolio as of March 31, 1996. ++Temporary investments in short-term municipal securities. National Portfolio Top Ten States* New York 14.71% Texas 11.22 Massachusetts 7.59 California 4.89 Illinois 4.82 Pennsylvania 4.45 Georgia 3.74 Colorado 3.64 Indiana 3.51 Michigan 3.45 ------- Total Top Ten 62.02 Total Others 37.98 ------- Total Portfolio 100.00% ======= Net assets as of March 31, 1996 were $1,457,579,399. Quality Ratings* (Based on Nationally Recognized Rating Services) A pie chart illustrating the following percentages: AAA/Aaa 33% AA/Aa 20% A/A 12% BBB/Baa 21% BB/Ba 2% B/B 1% Other++ 7% NR+++ 4% [FN] *Based on total market value of the Portfolio as of March 31, 1996. ++Temporary investments in short-term municipal securities. +++Not Rated. Limited Maturity Portfolio Top Ten States* Illinois 12.14% Ohio 10.32 Utah 10.00 Georgia 7.94 Michigan 5.91 Massachusetts 5.78 Texas 5.41 Connecticut 5.06 Washington 4.75 New York 3.96 ------- Total Top Ten 71.27 Total Others 28.73 ------- Total Portfolio 100.00% ======= Net assets as of March 31, 1996 were $534,828,279. Quality Ratings* (Based on Nationally Recognized Rating Services) A pie chart illustrating the following percentages: MIG1++/SP-1 2% AAA/Aaa 31% AA/Aa 30% A/A 20% BBB/Baa 4% Other++++ 6% NR+++ 7% [FN] *Based on total market value of the Portfolio as of March 31, 1996. ++Temporary investments in short-term municipal securities. +++Not Rated. *Based on total market value of the Portfolio as of March 31, 1996. ++Highest short-term rating by Moody's Investors Service, Inc. ++++Temporary investments in short-term municipal securities. +++Not Rated. -----END PRIVACY-ENHANCED MESSAGE-----