MERRILL LYNCH
GLOBAL VALUE
FUND, INC.
FUND LOGO
Annual Report
December 31, 1997
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
Global Value Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
Printed on post-consumer recycled paper
<PAGE>
MERRILL LYNCH GLOBAL VALUE FUND, INC.
Worldwide
Investments
As of 12/31/97
Percent of
Ten Largest Industries Net Assets
Financial Services 13.1%
Food & Household Products 10.9
Insurance 9.7
Beverages &Tobacco 9.3
Health & Personal Care 7.6
Electronic Components, Instruments 6.2
Telecommunications 4.2
Transportation--Airlines 4.2
Broadcasting & Publishing 4.1
Appliances & Household Durables 3.3
Country of Percent of
Ten Largest Equity Holdings Origin Net Assets
Nestle S.A. (Registered) Switzerland 5.7%
Cadbury Schweppes PLC United Kingdom 5.7
ING Groep N.V. Netherlands 4.8
Federal National Mortgage
Association United States 4.7
Lattice Semiconductor
Corporation United States 4.4
Lufthansa AG Germany 4.2
CBS Corporation United States 4.1
Diageo PLC United Kingdom 3.6
Morgan (J.P.) & Co., Inc. United States 3.6
Houston Industries Inc. United States 3.3
Important Tax
Information
<PAGE>
<TABLE>
The following information summarizes all per share distributions
paid by Merrill Lynch Global Value Fund, Inc. during its taxable
year ended December 31, 1997.
<CAPTION>
Qualifying Domestic Foreign Source Non-Qualifying Domestic Total Foreign Taxes
Record Date Payable Date Ordinary Income Income Ordinary Income Ordinary Income Paid or Withheld
<S> <C> <C> <C> <C> <C> <C>
Class A Shares:
12/17/97 12/26/97 $.043749 $.122244 $.385334 $.551327 $.017930
Class B Shares:
12/17/97 12/26/97 $.037138 $.103771 $.327104 $.468013 $.017930
Class C Shares:
12/17/97 12/26/97 $.037180 $.103891 $.327483 $.468554 $.017930
Class D Shares:
12/17/97 12/26/97 $.042086 $.117600 $.370694 $.530380 $.017930
</TABLE>
The qualifying domestic ordinary income qualifies for the dividends
received deduction for corporations.
The foreign taxes paid or withheld represent taxes incurred by the
Fund on dividends received by the Fund from foreign sources. Foreign
taxes paid or withheld should be included as foreign source income
with an offsetting deduction from gross income or as a credit for
taxes paid to foreign governments. You should consult your tax
adviser regarding the appropriate treatment of foreign taxes paid.
Please retain this information for your records.
Merrill Lynch Global Value Fund, Inc., December 31, 1997
DEAR SHAREHOLDER
Fiscal Year in Review
Merrill Lynch Global Value Fund, Inc. changed its fiscal year-end
from October 31 to December 31. Therefore, we are providing you with
this December 31, 1997 annual report to shareholders. For the fiscal
year ended December 31, 1997, total returns for Merrill Lynch Global
Value Fund, Inc.'s Class A, Class B, Class C and Class D Shares were
+24.01%, +22.80%, +22.80% and +23.71%, respectively, outperforming
the +15.76% total return for the unmanaged Morgan Stanley Capital
International (MSCI) World Index. (Fund results do not reflect sales
charges, and would be lower if sales charges were included. Complete
performance information, including average annual total returns, can
be found on pages 4--6 of this report to shareholders.)
<PAGE>
We are pleased with the Fund's performance in its first fiscal year,
especially considering that we spent the first six months of the
Fund's operations getting fully invested while many stock markets
were appreciating substantially. During the fiscal year, we had a
relatively light weighting in US stocks (averaging about 29.5% of
net assets as compared to a 45% benchmark weighting). In retrospect,
it would have been advantageous to have a greater weighting in this
strong stock market. On the other hand, we were underweighted in the
lackluster Japanese stock market, which enhanced performance.
However, the key contributor to the Fund's relative outperformance
was stock selection. By this we mean that the Fund's market
weightings had a net neutral influence on performance and that
holding a somewhat greater-than-normal cash position for much of the
fiscal year was a net negative. Therefore, all of the Fund's
outperformance relative to the MSCI World Index was a function of
stock selection.
Portfolio Matters
Merrill Lynch Global Value Fund performed very well since we last
reported to you. For the period from October 31, 1997 to December
31, 1997, the Fund's Class A, Class B, Class C and Class D Shares
had total returns of +6.19%, +6.14%, +6.14% and +6.20%,
respectively, compared to a +2.98% return for the MSCI World Index.
We made few significant changes to the portfolio over the past two
months. We eliminated our position in Mercury Asset Management Group
PLC, which was acquired by Merrill Lynch & Co., Inc., and
established a position in ING Groep N.V., a Dutch financial services
company. We also eliminated the Fund's position in the German
industrial company Siemens AG, and purchased shares of Lattice
Semiconductor Corporation in the United States. As a result of these
transactions, the portfolio's geographic allocations have changed
slightly. The Fund remains relatively concentrated in its
investments, although less so than as of October 31, 1997.
As the Fund's new fiscal year begins, we would like to re-emphasize
an important point that we made in our first two reports to
shareholders. Over the past 15 years (and especially over the past
five years), stock market investors have become accustomed to total
returns that were much higher than the long-term average returns for
common stocks. In our view, the total returns provided by common
stocks in recent years are unsustainable. US companies are not
increasing their value at a rate of 20% per year, yet the US stock
market has provided annual returns of about 20% over the past five
years.
Historically, long-term annual total returns on US stocks have
ranged from six percentage points to seven percentage points greater
than the rate of inflation. If the rate of inflation is 2%--3% per
year, we might expect annual stock market returns that are closer to
10% than 20%. Therefore, we believe that it is important that
investor expectations for common stock returns should be moderated.
<PAGE>
This does not imply that we are bearish. Furthermore, we hope that
we can provide value-added investment returns to our shareholders
through stock selection. There are many reasons for optimism
regarding the investment climate over the longer term, such as
greater economic progress worldwide, the increasing value of
intellectual capital, and the growing distribution of wealth to less-
developed nations, notwithstanding the negative wealth effect of the
recent Asian financial crisis. However, we are aware that these
factors do not guarantee that stock prices will always rise.
Over the long term, there should be a positive relationship between
the value of companies and their share prices. However, there are
times when valuations and share prices become disconnected, and
prices are much higher (or lower) than values warrant. Since we have
been in a protracted period of rising stock prices, we believe that
it is appropriate to remind shareholders that equities historically
have provided annual total investment returns that are lower than we
have experienced in recent years.
In Conclusion
We thank you for your investment in Merrill Lynch Global Value Fund,
Inc., and we look forward to serving your financial needs throughout
the Fund's new fiscal year and beyond.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Stephen I. Silverman)
Stephen I. Silverman
Senior Vice President and
Portfolio Manager
February 10, 1998
<PAGE>
Officers and
Directors
Arthur Zeikel, President and Director
Donald Cecil, Director
Edward H. Meyer, Director
Charles C. Reilly, Director
Richard R. West, Director
Edward D. Zinbarg, Director
Terry K. Glenn, Executive Vice President
Norman R. Harvey, Executive Vice President
Stephen I. Silverman, Senior Vice President and
Portfolio Manager
Donald C. Burke, Vice President
Gerald M. Richard, Treasurer
Barbara G. Fraser, Secretary
Custodian
Brown Brothers Harriman & Co.
40 Water Street
Boston, MA 02109
Transfer Agent
Merrill Lynch Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 637-3863
Merrill Lynch Global Value Fund, Inc., December 31, 1997
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 5.25% and bear no ongoing distribution or account
maintenance fees. Class A Shares are available only to eligible
investors.
* 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. In addition, Class B
Shares are subject to a distribution fee of 0.75% and an account
maintenance fee of 0.25%. These shares automatically convert to
Class D Shares after approximately 8 years. (There is no initial
sales charge for automatic share conversions.)
<PAGE>
* Class C Shares are subject to a distribution fee of 0.75% and an
account maintenance fee of 0.25%. 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 5.25% and
an account maintenance fee of 0.25% (but no distribution fee).
None of the past results shown should be considered a representation
of future performance. Figures shown in the "Aggregate Total Return"
tables assume reinvesment of all dividends and capital gains
distributions at net asset value on the ex-dividend date. 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.
Total Return
Based on a $10,000
Investment
A line graph depicting the growth of an investment in the Fund's
Class A Shares and Class B Shares compared to growth of an
investment in the Morgan Stanley Capital International World Index.
Beginning and ending values are:
11/01/96** 12/97
ML Global Value Fund, Inc.++--
Class A Shares* $ 9,475 $11,964
ML Global Value Fund, Inc.++--
Class B Shares* $10,000 $12,183
Morgan Stanley Capital International
World Index++++ $10,000 $12,024
A line graph depicting the growth of an investment in the Fund's
Class C Shares and Class D Shares compared to growth of an
investment in the Morgan Stanley Capital International World Index.
Beginning and ending values are:
11/01/96** 12/97
<PAGE>
ML Global Value Fund, Inc.++--
Class C Shares* $10,000 $12,484
ML Global Value Fund, Inc.++--
Class D Shares* $ 9,475 $11,930
Morgan Stanley Capital International
World Index++++ $10,000 $12,024
[FN]
*Assuming maximum sales charge, transaction costs and other
operating expenses, including advisory fees.
**Commencement of operations.
++ML Global Value Fund, Inc. invests primarily in equity securities
of issuers located in various foreign countries and the United
States.
++++This unmanaged market capitilization-weighted Index is comprised
of a representative sampling of large-, medium-, and small-
capitalization companies in 22 countries, including the United
States. Performance data is from October 31, 1996.
Average Annual
Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 12/31/97 +24.01% +17.50%
Inception (11/01/96) through 12/31/97 +22.18 +16.65
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 12/31/97 +22.80% +18.80%
Inception (11/01/96) through 12/31/97 +20.98 +18.48
[FN]
*Maximum contingent deferred sales charge is 4% and is reduced to 0%
after 4 years.
**Assuming payment of applicable contingent deferred sales charge.
<PAGE>
% Return % Return
Without CDSC With CDSC**
Class C Shares*
Year Ended 12/31/97 +22.80% +21.80%
Inception (11/01/96) through 12/31/97 +20.99 +20.99%
[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
Sales Charge Sales Charge**
Class D Shares*
Year Ended 12/31/97 +23.71% +17.21%
Inception (11/01/96) through 12/31/97 +21.88 +16.37
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
<TABLE>
Recent
Performance
Results*
<CAPTION>
Total Return
Net Asset Value 3 Month 12 Month
12/31/97 9/30/97 12/31/96 % Change % Change
<S> <C> <C> <C> <C> <C>
ML Global Value Fund, Inc. Class A Shares $12.01 $12.38 $10.13 +1.48%(1) +24.01%(1)
ML Global Value Fund, Inc. Class B Shares 11.97 12.28 10.13 +1.30(2) +22.80(2)
ML Global Value Fund, Inc. Class C Shares 11.97 12.28 10.13 +1.30(3) +22.80(3)
ML Global Value Fund, Inc. Class D Shares 12.00 12.35 10.13 +1.47(4) +23.71(4)
<FN>
*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 $0.551 per share ordinary
income dividends.
(2)Percent change includes reinvestment of $0.468 per share ordinary
income dividends.
(3)Percent change includes reinvestment of $0.469 per share ordinary
income dividends.
(4)Percent change includes reinvestment of $0.530 per share ordinary
income dividends.
</TABLE>
<PAGE>
Merrill Lynch Global Value Fund, Inc., December 31, 1997
PERFORMANCE DATA (concluded)
<TABLE>
Performance
Summary--
Class A Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<C> <C> <C> <C> <C> <C>
11/01/96--12/31/96 $10.00 $10.13 -- $0.051 + 1.82%
1997 10.13 12.01 -- 0.551 +24.01
------
Total $0.602
Cumulative total return as of 12/31/97: +26.27%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures do not include sales charge; results would be lower if
sales charge was included.
</TABLE>
<TABLE>
Performance
Summary--
Class B Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<C> <C> <C> <C> <C> <C>
11/01/96--12/31/96 $10.00 $10.13 -- $0.035 + 1.66%
1997 10.13 11.97 -- 0.468 +22.80
------
Total $0.503
Cumulative total return as of 12/31/97: +24.83%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures do not reflect deduction of any sales charge; results
would be lower if sales charge was deducted.
</TABLE>
<PAGE>
<TABLE>
Performance
Summary--
Class C Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<C> <C> <C> <C> <C> <C>
11/01/96--12/31/96 $10.00 $10.13 -- $0.035 + 1.66%
1997 10.13 11.97 -- 0.469 +22.80
------
Total $0.504
Cumulative total return as of 12/31/97: +24.84%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures do not reflect deduction of any sales charge; results
would be lower if sales charge was deducted.
</TABLE>
<TABLE>
Performance
Summary--
Class D Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<C> <C> <C> <C> <C> <C>
11/01/96--12/31/96 $10.00 $10.13 -- $0.047 + 1.78%
1997 10.13 12.00 -- 0.530 +23.71
------
Total $0.577
Cumulative total return as of 12/31/97: +25.91%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures do not include sales charge; results would be lower if
sales charge was included.
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (in US dollars)
<CAPTION>
NORTH Shares Value Percent of
AMERICA Industries Held Investments Cost (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C>
Canada Trans- 1,150,000 Canadian National Railway
portation-- Company $ 54,035,092 $ 54,337,500 3.0%
Road & Rail
Total Investments in Canada 54,035,092 54,337,500 3.0
United States Broadcasting 2,529,600 CBS Corporation (a) 44,671,094 74,465,100 4.1
& Publishing
Electrical & 72,100 Central & South West
Electronics Corporation 1,807,373 1,951,206 0.1
Electronic 1,661,200 ++Lattice Semiconductor
Components, Corporation 86,510,974 78,699,350 4.4
Instruments
Financial 1,485,000 Federal National Mortgage
Services Association 58,560,791 84,737,812 4.7
570,000 Morgan (J.P.) & Co., Inc. 62,920,976 64,338,750 3.6
-------------- -------------- ------
121,481,767 149,076,562 8.3
Food & 7,200 ++Ralston-Ralston Purina Group 672,795 669,150 0.0
Household 366,300 Wrigley (Wm.) Jr. Company
Products (Class B) 25,168,429 29,143,744 1.6
-------------- -------------- ------
25,841,224 29,812,894 1.6
Health & 1,144,000 Baxter International, Inc. 61,537,393 57,700,500 3.2
Personal Care
Insurance 247,100 Chubb Corporation 18,640,971 18,686,937 1.0
1,380,000 Horace Mann Educators Corp. 25,535,781 39,243,750 2.2
-------------- -------------- ------
44,176,752 57,930,687 3.2
Merchandising 2,414,000 American Stores Company 60,081,759 49,637,875 2.8
Telecommuni- 841,200 ++Teleport Communications
cations Group Inc. (Class A) 39,424,614 46,160,850 2.5
226,800 ++Teligent, Inc. (Class A) 5,214,200 5,499,900 0.3
-------------- -------------- ------
44,638,814 51,660,750 2.8
<PAGE>
Utilities-- 2,202,100 Houston Industries Inc. 49,617,722 58,768,544 3.3
Electric & Gas
Total Investments in the
United States 540,364,872 609,703,468 33.8
Total Investments in
North America 594,399,964 664,040,968 36.8
PACIFIC
BASIN/ASIA
Australia Leisure & 11,705,286 Village Roadshow Limited
Tourism (Preferred) (Class A) 30,548,199 24,049,165 1.3
Real Estate 1,677,500 Lend Lease Corporation Ltd. 31,375,054 32,761,575 1.8
Total Investments in Australia 61,923,253 56,810,740 3.1
Japan Appliances & 1,690,000 Matsushita Electric
Household Industrial Co., Ltd. 28,894,269 24,782,342 1.3
Durables 400,000 Sony Corporation 36,894,499 35,623,800 2.0
-------------- -------------- ------
65,788,768 60,406,142 3.3
Automobiles 101,000 Suzuki Motor Corporation 862,124 915,010 0.1
</TABLE>
Merrill Lynch Global Value Fund, Inc., December 31, 1997
<TABLE>
SCHEDULE OF INVESTMENTS (in US dollars)
<CAPTION>
PACIFIC BASIN/ Shares Value Percent of
ASIA (concluded) Industries Held Investments Cost (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C>
Japan Construction & 932,400 Chudenko Corporation $ 22,844,840 $ 20,401,843 1.1%
(concluded) Housing 795,000 Kinden Corporation 9,753,962 8,484,069 0.5
-------------- -------------- ------
32,598,802 28,885,912 1.6
Data 2,166,000 Canon Inc. 51,626,097 50,553,858 2.8
Processing &
Reproduction
<PAGE>
Electronic 1,276,000 Murata Manufacturing
Components, Company, Ltd. 39,076,429 32,132,668 1.8
Instruments
Health & 1,097,000 Sankyo Company, Limited 26,165,419 24,845,681 1.4
Personal Care
Insurance 3,197,000 Dai-Tokyo Fire & Marine
Insurance Co., Ltd. 12,962,391 10,996,207 0.6
784,000 Nichido Fire & Marine
Insurance Co., Ltd. 4,117,378 4,093,052 0.2
1,300,000 Sumitomo Marine & Fire
Insurance Co., Ltd. 10,316,345 6,886,756 0.4
850,000 Tokio Marine & Fire
Insurance Co., Ltd. 10,618,405 9,658,349 0.5
-------------- -------------- ------
38,014,519 31,634,364 1.7
Machinery & 2,855,000 Mitsubishi Heavy
Engineering Industries, Ltd. 14,616,187 11,924,146 0.7
Total Investments in Japan 268,748,345 241,297,781 13.4
Total Investments in the
Pacific Basin/Asia 330,671,598 298,108,521 16.5
WESTERN EUROPE
Denmark Telecommuni- 342,900 Tele Danmark A/S 20,849,363 21,272,954 1.2
cations
Total Investments in Denmark 20,849,363 21,272,954 1.2
France Food & 302,000 Groupe Danone S.A. 43,350,953 53,937,531 3.0
Household 275,000 Groupe Danone S.A. (ADR)* 8,525,000 9,831,250 0.6
Products
Total Investments in France 51,875,953 63,768,781 3.6
Germany Trans- 3,957,200 Lufthansa AG 66,424,269 75,896,931 4.2
portation--
Airlines
Total Investments in Germany 66,424,269 75,896,931 4.2
Ireland Banking 3,800,000 Allied Irish Banks PLC 29,461,508 36,245,015 2.0
9,500 Allied Irish Banks PLC (ADR)* 482,133 551,000 0.0
Total Investments in Ireland 29,943,641 36,796,015 2.0
<PAGE>
Italy Banking 1,610,000 Istituto Mobiliare Italiano
S.p.A. (Ordinary) 16,269,348 19,110,332 1.1
Insurance 2,002,000 Assicurazioni Generali S.p.A. 43,076,815 49,167,364 2.7
Total Investments in Italy 59,346,163 68,277,696 3.8
Netherlands Financial 2,065,500 ING Groep N.V. 88,449,393 86,996,301 4.8
Services
Telecommuni- 79,550 Koninklijke PTT Nederland N.V. 2,898,301 3,319,161 0.2
cations
Total Investments in the
Netherlands 91,347,694 90,315,462 5.0
Switzerland Food & 68,800 Nestle S.A. (Registered) 76,406,314 103,188,215 5.7
Household
Products
Health & 33,000 Novartis AG (Registered) 38,585,999 53,586,845 3.0
Personal Care
Insurance 81,000 Zurich Insurance Group 23,711,108 38,626,927 2.1
Total Investments in
Switzerland 138,703,421 195,401,987 10.8
United Kingdom Beverages & 10,100,000 Cadbury Schweppes PLC 91,146,039 101,775,049 5.7
Tobacco 7,103,100 Diageo PLC (b) 55,258,352 65,275,980 3.6
Total Investments in the
United Kingdom 146,404,391 167,051,029 9.3
Total Investments in
Western Europe 604,894,895 718,780,855 39.9
SHORT-TERM Face
SECURITIES Amount Issue
Commercial $20,000,000 CIT Group Holdings, Inc.
Paper** (The), 6.75% due 1/02/1998 19,996,250 19,996,250 1.1
80,637,000 General Motors Acceptance
Corp., 6.75% due 1/02/1998 80,621,881 80,621,881 4.5
Total Investments in
Short-Term Securities 100,618,131 100,618,131 5.6
Total Investments $1,630,584,588 1,781,548,475 98.8
==============
Unrealized Appreciation on Forward Foreign Exchange Contracts++++ 26,135,116 1.4
Liabilities in Excess of Other Assets (4,183,171) (0.2)
-------------- ------
Net Assets $1,803,500,420 100.0%
============== ======
<PAGE>
<FN>
*American Depositary Receipts (ADR).
**Commercial Paper is traded on a discount basis; the interest rate
shown is the discount rate paid at the time of purchase by the Fund.
(a)Formerly known as Westinghouse Electric Corporation.
(b)Formerly known as Guinness PLC.
++Non-income producing security.
++++Forward foreign exchange contracts as of December 31, 1997 were
as follows:
Unrealized
Appreciation
Foreign Expiration (Depreciation)
Currency Purchased Date (Note 1c)
Chf 58,164,706 January 1998 $ (613,905)
DM 86,345,427 January 1998 (1,384,248)
Frf 25,039,501 January 1998 (138,606)
Pound Sterling 125,179,232 January 1998 (898,090)
Lit 17,526,100,000 October 1998 (49,009)
YEN 4,914,943,198 January 1998 (5,016,076)
------------
Total (US$ Commitment--$353,431,584) (8,099,934)
============
Foreign Currency Sold
Chf 218,010,166 January 1998 $ 7,274,618
Chf 16,625,000 August 1998 94,033
Chf 367,200 December 1998 5,009
DM 205,746,631 January 1998 5,910,791
Frf 371,183,000 January 1998 6,617,603
Pound Sterling 138,698,880 January 1998 (4,800,529)
Lit 97,882,627,500 October 1998 1,124,076
Nlg 52,295,661 January 1998 2,487,360
Nlg 123,706,663 December 1998 638,191
YEN 19,609,079,681 January 1998 14,681,154
YEN 2,137,785,214 December 1998 202,744
Total (US$ Commitment--$911,043,902) 34,235,050
------------
Total Unrealized Appreciation on
Forward Foreign Exchange Contracts--Net $ 26,135,116
============
See Notes to Financial Statements.
</TABLE>
<PAGE>
Merrill Lynch Global Value Fund, Inc., December 31, 1997
<TABLE>
STATEMENT OF ASSETS AND LIABILITIES
<CAPTION>
As of December 31, 1997
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$1,630,584,588)
(Note 1a) $1,781,548,475
Unrealized appreciation on forward foreign exchange
contracts (Note 1d) 26,135,116
Cash 693
Foreign cash (Note 1c) 2,031,504
Receivables:
Capital shares sold $ 5,648,368
Securities sold 5,319,374
Dividends 2,713,885 13,681,627
--------------
Deferred organization expenses (Note 1g) 150,678
Prepaid registration fees and other assets (Note 1g) 90,504
--------------
Total assets 1,823,638,597
--------------
Liabilities: Payables:
Securities purchased 14,556,803
Capital shares redeemed 1,730,686
Distributor (Note 2) 1,381,461
Investment adviser (Note 2) 1,204,789 18,873,739
--------------
Accrued expenses 1,264,438
--------------
Total liabilities 20,138,177
--------------
Net Assets: Net assets $1,803,500,420
==============
Net Assets Class A Shares of Common Stock, $0.10 par value, 100,000,000
Consist of: shares authorized $ 525,111
Class B Shares of Common Stock, $0.10 par value, 300,000,000
shares authorized 10,462,413
Class C Shares of Common Stock, $0.10 par value, 100,000,000
shares authorized 1,918,918
Class D Shares of Common Stock, $0.10 par value, 100,000,000
shares authorized 2,157,062
Paid-in capital in excess of par 1,550,328,488
Undistributed investment income--net 1,800,224
Undistributed realized capital gains on investments and
foreign currency transations--net 59,267,361
Unrealized appreciation on investments and foreign
currency transactions--net 177,040,843
--------------
Net assets $1,803,500,420
==============
<PAGE>
Net Asset Class A--Based on net assets of $63,075,336 and 5,251,108
Value: shares outstanding $ 12.01
==============
Class B--Based on net assets of $1,251,956,493 and 104,624,133
shares outstanding $ 11.97
==============
Class C--Based on net assets of $229,600,929 and 19,189,181
shares outstanding $ 11.97
==============
Class D--Based on net assets of $258,867,662 and 21,570,616
shares outstanding $ 12.00
==============
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENTS OF OPERATIONS
<CAPTION>
For the Period For the
Nov. 1, 1997 to Year Ended
Dec. 31, 1997 Oct. 31, 1997++
<S> <S> <C> <C>
Investment Dividends* $ 3,746,985 $ 27,596,209
Income Interest and discount earned 609,344 9,902,447
(Notes 1e & 1f): ------------ ------------
Total income 4,356,329 37,498,656
------------ ------------
Expenses: Investment advisory fees (Note 2) 2,189,146 9,957,530
Account maintenance and distribution fees--Class B (Note 2) 2,035,049 9,355,347
Account maintenance and distribution fees--Class C (Note 2) 373,926 1,696,508
Transfer agent fees--Class B (Note 2) 239,981 1,047,174
Custodian fees 169,266 513,563
Account maintenance fees--Class D (Note 2) 102,950 484,472
Professional fees 49,759 38,989
Transfer agent fees--Class C (Note 2) 45,232 193,464
Transfer agent fees--Class D (Note 2) 40,355 178,244
Registration fees (Note 1g) 29,331 739,842
Printing and shareholder reports 26,336 161,582
Directors' fees and expenses 22,284 37,950
Accounting services (Note 2) 16,901 191,495
Transfer agent fees--Class A (Note 2) 9,615 25,932
Amortization of organization expenses--net (Note 1g) 6,551 39,307
Pricing fees 1,244 6,367
Other 3,285 8,724
------------ ------------
Total expenses 5,361,211 24,676,490
------------ ------------
Investment income (loss)--net (1,004,882) 12,822,166
------------ ------------
<PAGE>
Realized & Realized gain (loss) from:
Unrealized Gain Investments--net 59,267,498 63,319,496
(Loss) on Foreign currency transactions--net (1,471,392) 1,202,141
Investments & Change in unrealized appreciation/depreciation on:
Foreign Currency Investments--net 18,317,620 132,646,267
Transactions--Net Foreign currency transactions--net 27,761,065 (1,684,109)
(Notes 1c, 1d, ------------ ------------
1f & 3): Net realized and unrealized gain on investments
and foreign currency transactions 103,874,791 195,483,795
------------ ------------
Net Increase in Net Assets Resulting from Operations $102,869,909 $208,305,961
============ ============
<FN>
*Net of foreign withholding tax $ 18,335 $ 2,588,136
============ ============
++The Fund commenced operations on November 1, 1996.
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Global Value Fund, Inc., December 31, 1997
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
For the Period For the
Nov. 1, 1997 to Year Ended
Dec. 31, Oct. 31,
Increase (Decrease) in Net Assets: 1997 1997++
<S> <S> <C> <C>
Operations: Investment income (loss)--net $ (1,004,882) $ 12,822,166
Realized gain on investments and foreign
currency transactions--net 57,796,106 64,521,637
Changes in unrealized appreciation/depreciation
on investments and foreign currency
transactions--net 46,078,685 130,962,158
-------------- --------------
Net increase in net assets resulting from operations 102,869,909 208,305,961
-------------- --------------
Dividends & Investment income--net:
Distributions to Class A (549,581) (72,233)
Shareholders Class B (2,957,634) (2,571,571)
(Note 1h): Class C (551,700) (463,638)
Class D (1,860,239) (721,214)
Realized gain on investments--net:
Class A (2,139,606) --
Class B (44,190,132) --
Class C (8,093,819) --
Class D (8,896,075) --
-------------- --------------
Net decrease in net assets resulting from dividends
and distributions to shareholders (69,238,786) (3,828,656)
-------------- --------------
<PAGE>
Capital Share Net increase in net assets derived from capital
Transactions share transactions 81,836,169 1,483,455,823
(Note 4): -------------- --------------
Net Assets: Total increase in net assets 115,467,292 1,687,933,128
Beginning of period 1,688,033,128 100,000
-------------- --------------
End of period* $1,803,500,420 $1,688,033,128
============== ==============
<FN>
*Undistributed investment income--net (Note 1i) $ 1,800,224 $ 10,195,652
============== ==============
++The Fund commenced operations on November 1, 1996.
See Notes to Financial Statements.
</TABLE>
<TABLE>
FINANCIAL HIGHLIGHTS
<CAPTION>
Class A++++ Class B++++
The following per share data and For the For the For the For the
ratios have been derived from information Period Year Period Year
provided in the financial statements. Nov. 1, 1997 Ended Nov. 1, 1997 Ended
to Dec. 31, Oct. 31, to Dec. 31, Oct. 31,
Increase (Decrease) in Net Asset Value: 1997 1997++ 1997 1997++
<S> <S> <C> <C> <C> <C>
Per Share Net asset value, beginning of period. $ 11.83 $ 10.00 $ 11.72 $ 10.00
Operating ---------- ---------- ---------- ----------
Performance: Investment income (loss)--net .01 .17 (.01) .09
Realized and unrealized gain on investments
and foreign currency transactions--net .72 1.71 .73 1.67
---------- ---------- ---------- ----------
Total from investment operations .73 1.88 .72 1.76
---------- ---------- ---------- ----------
Less dividends and distributions:
Investment income--net (.11) (.05) (.03) (.04)
Realized gain on investments--net (.44) -- (.44) --
---------- ---------- ---------- ----------
Total dividends and distributions (.55) (.05) (.47) (.04)
---------- ---------- ---------- ----------
Net asset value, end of period $ 12.01 $ 11.83 $ 11.97 $ 11.72
========== ========== ========== ==========
Total Investment Based on net asset value per share 6.19%+++ 18.91% 6.14%+++ 17.62%
Return:** ========== ========== ========== ==========
Ratios to Average Expenses .96%* .97% 1.98%* 1.99%
Net Assets: ========== ========== ========== ==========
Investment income (loss)--net .54%* 1.88% (.49%)* .84%
========== ========== ========== ==========
<PAGE>
Supplemental Net assets, end of period (in thousands) $ 63,075 $ 53,776 $1,251,956 $1,179,125
Data: ========== ========== ========== ==========
Portfolio turnover 24.49% 77.65% 24.49% 77.65%
========== ========== ========== ==========
Average commission rate paid++++++ $ .0391 $ .0351 $ .0391 $ .0351
========== ========== ========== ==========
<FN>
*Annualized.
**Total investment returns exclude the effects of sales loads.
+++Aggregate total investment return.
See Notes to Financial Statements.
++The Fund commenced operations on November 1, 1996.
++++Based on average shares outstanding.
++++++Includes commissions paid in foreign currencies, which have
been converted into US dollars using the prevailing exchange rate on
the date of the transaction. Such conversions may significantly
affect the rate shown.
</TABLE>
Merrill Lynch Global Value Fund, Inc., December 31, 1997
<TABLE>
FINANCIAL HIGHLIGHTS (concluded)
<CAPTION>
Class C++++ Class D++++
The following per share data and For the For the For the For the
ratios have been derived from information Period Year Period Year
provided in the financial statements. Nov. 1, 1997 Ended Nov. 1, 1997 Ended
to Dec. 31, Oct. 31, to Dec. 31, Oct. 31,
Increase (Decrease) in Net Asset Value: 1997 1997++ 1997 1997++
<S> <S> <C> <C> <C> <C>
Per Share Net asset value, beginning of period. $ 11.72 $ 10.00 $ 11.80 $ 10.00
Operating -------- -------- -------- --------
Performance: Investment income (loss)--net (.01) .09 .01 .18
Realized and unrealized gain on
investments and foreign currency
transactions--net 73 1.67 .72 1.67
-------- -------- -------- --------
Total from investment operations .72 1.76 .73 1.85
-------- -------- -------- --------
Less dividends and distributions:
Investment income--net (.03) (.04) (.09) (.05)
Realized gain on investments--net (.44) -- (.44) --
-------- -------- -------- --------
Total dividends and distributions (.47) (.04) (.53) (.05)
-------- -------- -------- --------
Net asset value, end of period $ 11.97 $ 11.72 $ 12.00 $ 11.80
======== ======== ======== ========
<PAGE>
Total Investment Based on net asset value per share 6.14%+++ 17.62% 6.20%+++ 18.56%
Return:** ======== ======== ======== ========
Ratios to Average Expenses 1.98%* 1.99% 1.21%* 1.22%
Net Assets: ======== ======== ======== ========
Investment income (loss)--net (.49%)* .83% .28%* 1.62%
======== ======== ======== ========
Supplemental Net assets, end of period (in thousands) $229,601 $217,341 $258,868 $237,791
Data: ======== ======== ======== ========
Portfolio turnover 24.49% 77.65% 24.49% 77.65%
======== ======== ======== ========
Average commission rate paid++++++ $ .0391 $ .0351 $ .0391 $ .0351
======== ======== ======== ========
<FN>
*Annualized.
**Total investment returns exclude the effects of sales loads.
+++Aggregate total investment return.
See Notes to Financial Statements.
++The Fund commenced operations on November 1, 1996.
++++Based on average shares outstanding.
++++++Includes commissions paid in foreign currencies, which have
been converted into US dollars using the prevailing exchange rate on
the date of the transaction. Such conversions may significantly
affect the rate shown.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
Merrill Lynch Global Value Fund, Inc. (the "Fund") is registered
under the Investment Company Act of 1940 as a non-diversified, open-
end management investment company. Prior to commencement of
operations on November 1, 1996, the Fund had no operations other
than those relating to organizational matters and the issue of
10,000 capital shares of the Fund to Merrill Lynch Asset Management,
L.P. ("MLAM") for $100,000. The Fund has changed its fiscal year end
from October 31 to December 31. The Fund offers four classes of
shares under the Merrill Lynch Select Pricing SM System. Shares of
Class A and Class D are sold with a front-end sales charge. Shares
of Class B and Class C may be subject to a contingent deferred sales
charge. All classes of shares have identical voting, dividend,
liquidation and other rights and the same terms and conditions,
except that Class B, Class C and Class D Shares bear certain
expenses related to the account maintenance of such shares, and
Class B and Class C Shares also bear certain expenses related to the
distribution of such shares. Each class has exclusive voting rights
with respect to matters relating to its account maintenance and
distribution expenditures. The following is a summary of significant
accounting policies followed by the Fund.
<PAGE>
(a) Valuation of securities--Portfolio securities which are traded
on stock exchanges are valued at the last sale price on the exchange
on which such securities are traded, as of the close of business on
the day the securities are being valued or, lacking any sales, at
the last available bid price. Securities traded in the over-the-
counter market are valued at the last available bid price prior to
the time of valuation. In cases where securities are traded on more
than one exchange, the securities are valued on the exchange
designated by or under the authority of the Board of Directors as
the primary market. Securities which are traded both in the over-the-
counter market and on a stock exchange are valued according to the
broadest and most representative market. Options written are valued
at the last sale price in the case of exchange-traded options or, in
the case of options traded in the over-the-counter market, the last
asked price. Options purchased are valued at the last sale price in
the case of exchange-traded options or, in the case of options
traded in the over-the-counter market, the last bid price. Short-
term securities are valued at amortized cost, which approximates
market value. Other investments, including financial futures
contracts and related options, are stated at market value.
Securities and assets for which market quotations are not readily
available are valued at their fair value as determined in good faith
by or under the direction of the Fund's Board of Directors.
(b) Repurchase agreements--The Fund invests in US Government
securities pursuant to repurchase agreements with a member bank of
the Federal Reserve System or a primary dealer in US Government
securities. Under such agreements, the bank or primary dealer agrees
to repurchase the security at a mutually agreed upon time and price.
The Fund takes possession of the underlying securities, marks to
market such securities and, if necessary, receives additions to such
securities daily to ensure that the contract is fully
collateralized.
(c) Foreign currency transactions--Transactions denominated in
foreign currencies are recorded at the exchange rate prevailing when
recognized. Assets and liabilities denominated in foreign currencies
are valued at the exchange rate at the end of the period. Foreign
currency transactions are the result of settling (realized) or
valuing (unrealized) assets or liabilities expressed in foreign
currencies into US dollars. Realized and unrealized gains or losses
from investments include the effects of foreign exchange rates on
investments.
(d) Derivative financial instruments--The Fund may engage in various
portfolio strategies to seek to increase its return by hedging its
portfolio against adverse movements in the equity and currency
markets. Losses may arise due to changes in the value of the
contract or if the counterparty does not perform under the contract.
* Options--The Fund is authorized to write and purchase call and put
options. When the Fund writes an option, an amount equal to the
premium received by the Fund is reflected as an asset and an
equivalent liability. The amount of the liability is subsequently
marked to market to reflect the current market value of the option
written.
<PAGE>
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 foreign exchange contracts--The Fund is authorized to
enter into forward foreign exchange contracts as a hedge against
either specific transactions or portfolio positions. Such contracts
are not entered on the Fund's records. However, the effect on
operations is recorded from the date the Fund enters into such
contracts. Premium or discount is amortized over the life of the
contracts.
Merrill Lynch Global Value Fund, Inc., December 31, 1997
NOTES TO FINANCIAL STATEMENTS (continued)
* Foreign currency options and futures--The Fund may also purchase
or sell listed or over-the-counter foreign currency options, foreign
currency futures and related options on foreign currency futures as
a short or long hedge against possible variations in foreign
exchange rates. Such transactions may be effected with respect to
hedges on non-US dollar denominated securities owned by the Fund,
sold by the Fund but not yet delivered, or committed or anticipated
to be purchased by the Fund.
* Financial futures contracts--The Fund may purchase or sell
interest rate futures contracts and options on such futures
contracts for the purpose of hedging the market risk on existing
securities or the intended purchase of securities. Futures contracts
are contracts for delayed delivery of securities at a specific
future date and at a specific price or yield. Upon entering into a
contract, the Fund deposits and maintains as collateral such initial
margin as required by the exchange on which the transaction is
effected. Pursuant to the contract, the Fund agrees to receive from
or pay to the broker an amount of cash equal to the daily
fluctuation in value of the contract. Such receipts or payments are
known as variation margin and are recorded by the Fund as unrealized
gains or losses. When the contract is closed, the Fund records a
realized gain or loss equal to the difference between the value of
the contract at the time it was opened and the value at the time it
was closed.
<PAGE>
(e) 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. Under the applicable foreign tax law, a
withholding tax may be imposed on interest, dividends, and capital
gains at various rates.
(f) Security transactions and investment income--Security
transactions are recorded on the dates the transactions are entered
into (the trade dates). Dividend income is recorded on the ex-
dividend dates. Dividends from foreign securities where the ex-
dividend date may have passed are subsequently recorded when the
Fund has determined the ex-dividend date. Interest income (including
amortization of discount) is recognized on the accrual basis.
Realized gains and losses on security transactions are determined on
the identified cost basis.
(g) Deferred organization expenses and prepaid registration fees--
Deferred organization expenses are charged to expense on a straight-
line basis over a five-year period. Prepaid registration fees are
charged to expense as the related shares are issued.
(h) Dividends and distributions--Dividends and distributions paid by
the Fund are recorded on the ex-dividend dates.
(i) Reclassification--Generally accepted accounting principles
require that certain components of net assets be adjusted to reflect
permanent differences between financial and tax reporting.
Accordingly, current year's permanent book/tax differences of
$1,471,392 have been reclassified between undistributed net realized
capital gains and undistributed net investment income. These
reclassifications have no effect on net assets or net asset values
per share.
2. Investment Advisory Agreement and Transactions
with Affiliates:
The Fund has entered into an Investment Advisory Agreement with
MLAM. The general partner of MLAM is Princeton Services, Inc.
("PSI"), an indirect wholly-owned subsidiary of Merrill Lynch & Co.,
Inc. ("ML & Co."), which is the limited partner. The Fund has also
entered into a Distribution Agreement and Distribution Plans with
Merrill Lynch Funds Distributor, Inc. ("MLFD" or "Distributor"), a
wholly-owned subsidiary of Merrill Lynch Group, Inc.
MLAM 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 of 0.75%, on an annual basis,
of the average daily value of the Fund's net assets.
<PAGE>
Pursuant to the Distribution Plans adopted by the Fund in accordance
with Rule 12b-1 under the Investment Company Act of 1940, the Fund
pays the Distributor ongoing account maintenance and distribution
fees. The fees are accrued daily and paid monthly at annual rates
based upon the average daily net assets of the shares as follows:
Account Distribution
Maintenance Fee Fee
Class B 0.25% 0.75%
Class C 0.25% 0.75%
Class D 0.25% --
Pursuant to a sub-agreement with the Distributor, Merrill Lynch,
Pierce, Fenner & Smith Inc. ("MLPF&S"), a subsidiary of ML & Co.,
also provides account maintenance and distribution services to the
Fund. The ongoing account maintenance fee compensates the
Distributor and MLPF&S for providing account maintenance services to
Class B, Class C and Class D shareholders. The ongoing distribu-tion
fee compensates the Distributor and MLPF&S for providing shareholder
and distribution-related services to Class B and Class C
shareholders.
For the period November 1, 1997 to December 31, 1997, MLFD earned
underwriting discounts and direct commissions and MLPF&S earned
dealer concessions on sales of the Fund's Class A and Class D Shares
as follows:
MLFD MLPF&S
Class A $ 3 $ 139
Class D $4,932 $73,767
For the period November 1, 1997 to December 31, 1997, MLPF&S
received contingent deferred sales charges of $398,297 and $9,766
relating to transactions in Class B and Class C Shares,
respectively.
In addition, MLPF&S received $406,084 in commissions on the
execution of portfolio security transactions for the Fund for the
period November 1, 1997 to December 31, 1997.
Merrill Lynch Financial Data Services, Inc. ("MLFDS"), a wholly-
owned subsidiary of ML & Co., is the Fund's transfer agent.
Accounting services are provided to the Fund by MLAM at cost.
Certain officers and/or directors of the Fund are officers and/or
directors of MLAM, PSI, MLFDS, MLFD, and/or ML & Co.
<PAGE>
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the period November 1, 1997 to December 31, 1997 were
$392,163,634 and $404,263,836, respectively.
Net realized and unrealized gains (losses) as of December 31, 1997
were as follows:
Realized Unrealized
Gains (Losses) Gains (Losses)
Long-term investments $ 59,267,498 $ 150,963,887
Forward foreign exchange contracts -- 26,135,116
Foreign currency transactions (1,471,392) (58,160)
------------ ------------
Total $ 57,796,106 $177,040,843
============ ============
As of December 31, 1997, net unrealized appreciation for Federal
income tax purposes aggregated $148,122,904, of which $205,674,525
related to appreciated securities and $57,551,621 related to
depreciated securities. The aggregate cost of investments at
December 31, 1997 for Federal income tax purposes was
$1,633,425,571.
4. Capital Share Transactions:
Net increase in net assets derived from capital share transactions
was $81,836,169 and $1,483,455,823 for the period November 1, 1997
to December 31, 1997 and for the year ended October 31, 1997,
respectively.
Transactions in capital shares for each class were as follows:
Class A Shares for the Period Dollar
November 1, 1997 to December 31, 1997 Shares Amount
Shares sold 751,738 $ 9,068,512
Shares issued to shareholders in
reinvestment of dividends and
distributions 114,753 1,374,743
------------ --------------
Total issued 866,491 10,443,255
Shares redeemed (162,478) (1,970,638)
------------ --------------
Net increase 704,013 $ 8,472,617
============ ==============
<PAGE>
Class A Shares for the Period Dollar
November 1, 1996++ to October 31, 1997 Shares Amount
Shares sold 5,152,431 $ 57,303,237
Shares issued to shareholders in
reinvestment of dividends 6,207 62,009
------------ --------------
Total issued 5,158,638 57,365,246
Shares redeemed (614,043) (6,856,145)
------------ --------------
Net increase 4,544,595 $ 50,509,101
============ ==============
[FN]
++Prior to November 1, 1996 (commencement of operations), the Fund
issued 2,500 shares to MLAM for $25,000.
Class B Shares for the Period Dollar
November 1, 1997 to December 31, 1997 Shares Amount
Shares sold 3,154,767 $ 38,080,734
Shares issued to shareholders in
reinvestment of dividends and
distributions 3,339,542 39,874,138
------------ --------------
Total issued 6,494,309 77,954,872
Automatic conversion of shares (82,508) (986,113)
Shares redeemed (2,355,726) (28,418,784)
------------ --------------
Net increase 4,056,075 $ 48,549,975
============ ==============
Class B Shares for the Period Dollar
November 1, 1996++ to October 31, 1997 Shares Amount
Shares sold 109,016,851 $1,127,788,851
Shares issued to shareholders in
reinvestment of dividends 211,285 2,110,732
------------ --------------
Total issued 109,228,136 1,129,899,583
Automatic conversion of shares (207,246) (2,300,318)
Shares redeemed (8,455,332) (92,416,446)
------------ --------------
Net increase 100,565,558 $1,035,182,819
============ ==============
<PAGE>
[FN]
++Prior to November 1, 1996 (commencement of operations), the Fund
issued 2,500 shares to MLAM for $25,000.
Merrill Lynch Global Value Fund, Inc., December 31, 1997
NOTES TO FINANCIAL STATEMENTS (concluded)
Class C Shares for the Period Dollar
November 1, 1997 to December 31, 1997 Shares Amount
Shares sold 571,308 $ 6,886,306
Shares issued to shareholders in
reinvestment of dividends and
distributions 629,854 7,520,456
------------ --------------
Total issued 1,201,162 14,406,762
Shares redeemed (549,914) (6,625,250)
------------ --------------
Net increase 651,248 $ 7,781,512
============ ==============
Class C Shares for the Period Dollar
November 1, 1996++ to October 31, 1997 Shares Amount
Shares sold 20,686,388 $ 214,642,345
Shares issued to shareholders in
reinvestment of dividends 39,137 390,984
------------ --------------
Total issued 20,725,525 215,033,329
Shares redeemed (2,190,092) (23,679,275)
------------ --------------
Net increase 18,535,433 $ 191,354,054
============ ==============
[FN]
++Prior to November 1, 1996 (commencement of operations), the Fund
issued 2,500 shares to MLAM for $25,000.
Class D Shares for the Period Dollar
November 1, 1997 to December 31, 1997 Shares Amount
Shares sold 1,489,446 $ 18,112,269
Automatic conversion of shares 81,951 986,113
Shares issued to shareholders in
reinvestment of dividends and
distributions 783,234 9,375,306
------------ --------------
Total issued 2,354,631 28,473,688
Shares redeemed (933,276) (11,441,623)
------------ --------------
Net increase 1,421,355 $ 17,032,065
============ ==============
<PAGE>
Class D Shares for the Period Dollar
November 1, 1996++ to October 31, 1997 Shares Amount
Shares sold 22,812,954 $ 235,349,723
Automatic conversion of shares 206,573 2,300,318
Shares issued to shareholders in
reinvestment of dividends 62,231 621,693
------------ --------------
Total issued 23,081,758 238,271,734
Shares redeemed (2,934,997) (31,861,885)
------------ --------------
Net increase 20,146,761 $ 206,409,849
============ ==============
[FN]
++Prior to November 1, 1996 (commencement of operations), the Fund
issued 2,500 shares to MLAM for $25,000.
5. Commitments:
At December 31, 1997, the Fund had entered into foreign exchange
contracts, in addition to the contracts listed on the Schedule of
Investments, under which it had agreed to purchase foreign currency
with an approximate value of $10,058,000.
<AUDIT-REPORT>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders,
Merrill Lynch Global Value Fund, Inc.:
We have audited the accompanying statement of assets and
liabilities, including the schedule of investments, of Merrill Lynch
Global Value Fund, Inc. as of December 31, 1997, the related
statements of operations for the period November 1, 1997 to December
31, 1997 and for the year ended October 31, 1997 and changes in net
assets and the financial highlights for the period November 1, 1997
to December 31, 1997 and for the year ended October 31, 1997. These
financial statements and the financial highlights are the
responsibility of the Fund's management. Our responsibility is to
express an opinion on these financial statements and the financial
highlights based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements and the financial highlights are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.
Our procedures included confirmation of securities owned at December
31, 1997 by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
<PAGE>
In our opinion, such financial statements and financial highlights
present fairly, in all material respects, the financial position of
Merrill Lynch Global Value Fund, Inc. as of December 31, 1997, the
results of its operations, the changes in its net assets, and the
financial highlights for the respective stated periods in conformity
with generally accepted accounting principles.
Deloitte & Touche LLP
Princeton, New Jersey
February 10, 1998
</AUDIT-REPORT>
PORTFOLIO CHANGES (unaudited)
For the Period November 1, 1997 to December 31, 1997
Additions
Canadian National Railway Company
Central & South West Corporation
Chubb Corporation
Groupe Danone S.A. (ADR)
ING Groep N.V.
Lattice Semiconductor Corporation
Murata Manufacturing Company, Ltd.
Ralston-Ralston Purina Group
Sankyo Company, Limited
Tele Danmark A/S
Teligent, Inc. (Class A)
*Toyo Seikan Kaisha, Ltd.
Deletions
Mercury Asset Management Group PLC
Siemens AG
*Toyo Seikan Kaisha, Ltd.
United Utilities PLC
Washington Mutual, Inc.
[FN]
*Added and deleted in the same quarter.
