MERRILL LYNCH
GLOBAL VALUE
FUND, INC.
FUND LOGO
Annual Report
December 31, 1998
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
MERRILL LYNCH GLOBAL VALUE FUND, INC.
Worldwide
Investments
As of 12/31/98
Percent of
Ten Largest Industries Net Assets
Utilities--Electric & Gas 17.2%
Food & Household Products 16.2
Insurance 10.7
Telecommunications 8.8
Banking 8.0
Electronic Components & Instruments 5.0
Financial Services 4.5
Chemicals 4.2
Beverages 3.5
Energy Equipment & Services 2.7
Country of Percent of
Ten Largest Equity Holdings Origin Net Assets
Cadbury Schweppes PLC United Kingdom 5.8%
MCI WorldCom Inc. United States 5.7
Berkshire Hathaway Inc.
(Class A) United States 5.1
The AES Corporation United States 4.8
Federal National Mortgage
Association United States 4.5
Nestle S.A. (Registered
Shares) Switzerland 4.4
Monsanto Company United States 4.2
Sara Lee Corporation United States 3.6
Diageo PLC United Kingdom 3.5
Berliner Kraft-und Licht
(Bewag) AG Germany 3.3
Merrill Lynch Global Value Fund, Inc., December 31, 1998
DEAR SHAREHOLDER
Fiscal Year in Review
Merrill Lynch Global Value Fund, Inc.'s Class A, Class B, Class C
and Class D Shares had total returns of +27.10%, +25.76%, +25.73%
and +26.72%, respectively, for the year ended December 31, 1998,
outperforming the +24.34% total return for the unmanaged Morgan
Stanley Capital International (MSCI) World Index. The primary reason
for the Fund's outperformance relative to the Index was stock
selection, with holdings such as Cadbury Schweppes PLC and MCI
WorldCom Inc. providing especially strong returns. (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 and 5 of this report to
shareholders.)
"Growth" Outperforms "Value"
Although stock selection was the key to the Fund's relative
outperformance for the fiscal year, it was also the reason for the
Fund's relative underperformance relative to the MSCI World Index
during the quarter ended December 31, 1998. For the three-month
period, the Fund's Class A, Class B, Class C and Class D Shares had
total returns of +13.46%, +13.22%, +13.20% and +13.40%,
respectively, compared to a +21.11% return for the MSCI World Index.
This underperformance was attributable to the types of stocks that
garnered the greatest investor interest during the period; that is,
the much-publicized preference for "growth" over "value."
Although we define value quite broadly--many of the stocks that we
own do not meet the traditional value criteria of low price/book
value ratios or high dividend yields--our stocks nevertheless
underperformed growth issues. We are generally willing to invest in
a company if our conservative assessment of its future cash flows
suggests that its shares are worth more than their current price.
However, we will generally avoid buying a stock that requires us to
make generous assumptions regarding future cash flows in order to
justify our purchase. Although these generous cash flow assumptions
may prove to be correct--ultimately proving that the stock was
undervalued--we believe that such a stock is outside the realm of
our broad definition of value. When a great company's stock is
valued like it is a great business, we will generally either not
purchase its shares or sell its shares if we already own them. We
believe that we, like other value-oriented investors, must focus on
what the famed value investor Benjamin Graham called a "margin of
safety."
MCI WorldCom Inc. is a good example of such a company. This was one
of our largest positions during 1998 and, as noted at the beginning
of this letter to shareholders, it was also one of our strongest
performers. We still believe that the company has the potential to
be one of the winners (and perhaps the biggest winner) in the
dynamic and lucrative telecommunications business. By mid-October
1998, the stock had already appreciated approximately 64.5% year to
date, and we decided to sell a six-month call option that was 20%
above the then-current market price. The strike price of this option
was about double the price of MCI WorldCom common stock at the
beginning of 1998. We were paid an 8.8% premium to sell the call.
Since we believe that an 8.8% return in six months is highly
satisfactory in and of itself, we chose to lock it in by selling the
call. In addition, we would also benefit from the first 20% that the
stock appreciates above its spot price, up to the strike price of
the call.
With the uncertainty prevailing throughout the world's stock markets
in mid-October, this defensive strategy seemed appropriate. However,
as central banks began to ease monetary policies worldwide,
investors enthusiastically began purchasing stocks once again. With
its great earnings growth prospects, MCI WorldCom's shares
appreciated much beyond the 20% needed to reach the call option's
strike price. Unfortunately, the Fund did not participate in the
incremental appreciation; we gave up this opportunity and instead
earned the 8.8% premium on the call option.
Our experience with MCI WorldCom illustrates an important aspect of
our investment approach. In an effort to increase our margin of
safety we chose to sell the call option on MCI WorldCom stock.
Similarly, as stock prices of many great growth companies continue
to appreciate, we believe that we must maintain this margin of
safety and avoid a strategy that focuses on companies that must
continue to generate superior levels of economic value creation in
order to justify their valuations. Of course, their earnings may
continue to rise and justify the "value" inherent in their current
share prices. However, in our view, a value-oriented fund like ours
cannot invest in companies on the expectation that all the
optimistic prospects will actually develop, thereby justifying their
high share valuations. The margin of safety that we seek is that we
only require reasonably good business results to justify our
purchase of a company's shares.
We do not intend to imply that given the Fund's investment
guidelines and our investment approach there is nothing we could
have done in the past few months to enhance the Fund's performance.
For example, Ford Motor Company, which is not a Fund holding, is a
value stock in the most traditional sense that appreciated more than
100% during 1998. In addition, there are other companies whose
shares we could have purchased during the September--October period
of stock market weakness that have subsequently provided superior
investment results. However, although such undervalued investments
were available in 1998, the September--October window of
opportunity was too short-lived for us to take advantage of them.
The shift in investor sentiment that occurred during the final
quarter of 1998 was an unprecedented reversal from bearish to
bullish. Overall, the overwhelming investor favorites during the
year generally were growth companies. Also favored were companies
that exceeded analysts' earnings growth expectations, technology
companies and large-capitalization companies.
Changes to Portfolio Holdings
After the close of the fiscal year we shifted our investment
strategy somewhat. We concluded that the business environment facing
many manufacturers of packaged branded goods would become more
challenging, and we therefore expect that some of our holdings in
this area may have only modest longer-term appreciation potential,
at best. We sold some holdings for which we expect more limited
upside potential and greater downside risk over the longer term, and
added some new names to the portfolio. In future reports to
shareholders, we will discuss our new positions in detail. In
general, we believe that they have much greater long-term
appreciation potential than the positions that they replaced.
However, with the greater long-term potential also comes increased
near-term downside risk. Nevertheless, we believe that this shift in
investment strategy was warranted given the more limited prospects
that we perceived for some of our holdings.
In Conclusion
We thank you for your investment in Merrill Lynch Global Value Fund,
Inc., and we look forward to serving your investment 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 18, 1999
Officers and
Directors
Arthur Zeikel, President and Director
Donald Cecil, Director
Roland M. Machold, 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, Treasurer
Barbara G. Fraser, Secretary
Custodian
Brown Brothers Harriman & Co.
40 Water Street
Boston, MA 02109
Transfer Agent
Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 637-3863
Merrill Lynch Global Value Fund, Inc., December 31, 1998
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.)
* 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 "Recent Performance
Results" and "Average Annual Total Return" tables assume
reinvestment 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** 12/98
ML Global Value Fund, Inc.++--
Class A Shares* $ 9,475 $15,206
ML Global Value Fund, Inc.++--
Class B Shares* $10,000 $15,498
Morgan Stanley Capital International
World Index++++ $10,000 $14,951
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** 12/98
ML Global Value Fund, Inc.++--
Class C Shares* $10,000 $15,697
ML Global Value Fund, Inc.++--
Class D Shares* $ 9,475 $15,118
Morgan Stanley Capital
International World Index++++ $10,000 $14,951
[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. The starting date for the Index in each of the graphs is
from 10/31/96.
Average Annual
Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 12/31/98 +27.10% +20.43%
Inception (11/01/96) through 12/31/98 +24.43 +21.37
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 12/31/98 +25.76% +21.76%
Inception (11/01/96) through 12/31/98 +23.17 +22.44
[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
Without CDSC With CDSC**
Class C Shares*
Year Ended 12/31/98 +25.73% +24.73%
Inception (11/01/96) through 12/31/98 +23.16 +23.16
[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 12/31/98 +26.72% +20.07%
Inception (11/01/96) through 12/31/98 +24.10 +21.04
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
<TABLE>
Recent
Performance
Results*
<CAPTION>
12 Month 3 Month Since Inception
Total Return Total Return Total Return
<S> <C> <C> <C>
ML Global Value Fund, Inc. Class A Shares +27.10% +13.46% +60.49%
ML Global Value Fund, Inc. Class B Shares +25.76 +13.22 +56.98
ML Global Value Fund, Inc. Class C Shares +25.73 +13.20 +56.97
ML Global Value Fund, Inc. Class D Shares +26.72 +13.40 +59.56
<FN>
*Investment results shown do not reflect sales charges; results
shown would be lower if a sales charge was included. Total
investment returns are based on changes in net asset values for the
periods shown, and assume reinvestment of all dividends and capital
gains distributions at net asset value on the ex-dividend date. The
Fund commenced operations on 11/01/96.
</TABLE>
Merrill Lynch Global Value Fund, Inc., December 31, 1998
<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 Transportation-- 1,521,600 Canadian National Railway Company $ 74,424,143 $ 78,933,000 2.7%
Road & Rail
Total Investments in Canada 74,424,143 78,933,000 2.7
United Banking 1,764,400 Washington Mutual, Inc. 64,231,625 67,378,025 2.3
States
Chemicals 2,654,800 Monsanto Company 110,720,475 126,103,000 4.2
Electrical 686,200 ++ADC Telecommunications, Inc. 18,293,130 23,673,900 0.8
& Electronics
Electronic 2,070,700 ++Lattice Semiconductor
Components & Corporation (a) 104,996,064 94,993,362 3.2
Instruments
Energy 1,716,000 Schlumberger Limited 130,814,706 79,150,500 2.7
Equipment &
Services
Financial 1,827,400 Federal National Mortgage Association 79,099,130 135,227,600 4.5
Services
Food & Household 3,810,000 Sara Lee Corporation 102,969,085 107,394,375 3.6
Products
Health & Personal 441,400 Baxter International Inc. 23,343,513 28,387,537 0.9
Care
Insurance 2,160 Berkshire Hathaway Inc.
(Class A) (b) 133,124,596 151,200,000 5.1
16 Berkshire Hathaway Inc.
(Class B) (b) 33,136 38,775 0.0
662,400 Horace Mann Educators Corporation 12,488,729 18,878,400 0.6
-------------- -------------- ------
145,646,461 170,117,175 5.7
Recreation/Other 2,959,800 Mattel, Inc. 72,347,176 67,520,438 2.3
Consumer Goods
Telecommunications 2,740,000 Frontier Corporation 86,947,753 93,160,000 3.1
2,361,514 ++MCI WorldCom Inc. 85,053,371 169,438,629 5.7
-------------- -------------- ------
172,001,124 262,598,629 8.8
Utilities-- 3,007,400 ++The AES Corporation 97,611,738 142,475,575 4.8
Electric & Gas 1,225,950 Columbia Energy Group 63,217,999 70,798,612 2.4
1,397,000 K N Energy, Inc. 78,302,281 50,815,875 1.7
1,830,000 Unicom Corporation 57,049,442 70,569,375 2.3
-------------- -------------- ------
296,181,460 334,659,437 11.2
Total Investments in the
United States 1,320,643,949 1,497,203,978 50.2
Total Investments in North
America 1,395,068,092 1,576,136,978 52.9
PACIFIC
BASIN
Australia Leisure & 360,000 Village Roadshow Ltd. (Convertible
Tourism Preferred)++++ 18,000,000 11,520,000 0.4
11,800,652 Village Roadshow Ltd. (Preferred)
(Class A) 30,727,549 14,764,173 0.5
-------------- -------------- ------
48,727,549 26,284,173 0.9
Real Estate 3,459,616 Lend Lease Corporation Ltd. 32,485,526 46,679,215 1.5
Total Investments in Australia 81,213,075 72,963,388 2.4
Japan Appliances & 953,000 Matsushita Electric Industrial
Household Durables Company, Ltd. 17,443,427 16,896,204 0.5
400,000 Sony Corporation 36,894,499 29,197,339 1.0
-------------- -------------- ------
54,337,926 46,093,543 1.5
Construction 1,073,400 Chudenko Corporation 25,974,605 22,943,627 0.8
& Housing 788,000 Kinden Corporation 9,663,415 12,006,953 0.4
-------------- -------------- ------
35,638,020 34,950,580 1.2
Data Processing 2,166,000 Canon, Inc. 51,626,097 46,393,703 1.6
& Reproduction
Electronic 1,276,000 Murata Manufacturing Co., Ltd. 39,076,429 53,077,073 1.8
Components
& Instruments
Insurance 3,438,000 Dai-Tokyo Fire & Marine Insurance
Co., Ltd. 13,781,868 12,196,896 0.4
784,000 Nichido Fire & Marine Insurance
Co., Ltd. 4,117,378 3,859,157 0.1
4,411,000 Sumitomo Marine & Fire Insurance
Co., Ltd. 30,544,736 28,011,317 0.9
850,000 Tokio Marine & Fire Insurance
Co., Ltd. 10,618,405 10,177,384 0.4
-------------- -------------- ------
59,062,387 54,244,754 1.8
Miscellaneous 10,000 Toyo Seikan Kaisha, Ltd. 106,000 170,111 0.0
Materials &
Commodities
Total Investments in Japan 239,846,859 234,929,764 7.9
Total Investments in the
Pacific Basin 321,059,934 307,893,152 10.3
WESTERN
EUROPE
Denmark Banking 622,200 Den Danske Bank Group 83,576,491 83,618,516 2.8
Total Investments in Denmark 83,576,491 83,618,516 2.8
France Food & Household 209,300 Groupe Danone S.A. 30,175,687 59,920,912 2.0
Products 179,300 Groupe Danone S.A. (ADR)* 5,558,300 10,085,625 0.4
Total Investments in France 35,733,987 70,006,537 2.4
Germany Transportation 3,120,200 Lufthansa AG 54,760,129 68,921,585 2.3
--Airlines
Utilities-- 3,621,300 Berliner Kraft-und Licht (Bewag) AG 79,992,542 97,814,226 3.3
Electric & Gas
Total Investments in Germany 134,752,671 166,735,811 5.6
</TABLE>
Merrill Lynch Global Value Fund, Inc., December 31, 1998
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<CAPTION>
WESTERN EUROPE Shares Value Percent of
(concluded) Industries Held Investments Cost (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C>
Ireland Banking 4,800,000 Allied Irish Banks PLC $ 41,920,503 $ 85,576,474 2.9%
9,500 Allied Irish Banks PLC (ADR)* 482,133 1,048,563 0.0
Total Investments in Ireland 42,402,636 86,625,037 2.9
Italy Insurance 2,407,900 Alleanza Assicurazioni 32,145,222 34,013,590 1.1
Total Investments in Italy 32,145,222 34,013,590 1.1
Switzerland Food & Household 60,800 Nestle S.A. (Registered Shares) 67,899,128 132,453,188 4.4
Products
Total Investments in Switzerland 67,899,128 132,453,188 4.4
United Beverages 9,174,278 Diageo PLC 82,325,988 104,362,954 3.5
Kingdom
Food & Household 10,100,000 Cadbury Schweppes PLC 91,146,039 172,172,428 5.8
Products
Insurance 4,192,900 ++Allied Zurich PLC 58,567,387 62,514,845 2.1
Utilities-- 9,449,573 National Power PLC 89,490,280 81,406,730 2.7
Electric & Gas
Total Investments in the
United Kingdom 321,529,694 420,456,957 14.1
Total Investments in Western
Europe 718,039,829 993,909,636 33.3
SHORT-TERM Face
SECURITIES Amount Issue
Commercial $124,138,000 General Electric Capital Corp., 5%
Paper** due 1/04/1999 124,086,276 124,086,276 4.2
Total Investments in Short-Term
Securities 124,086,276 124,086,276 4.2
OPTIONS Nominal Value Premiums
PURCHASED Covered by Options Paid
Currency Put 176,640,000 Japanese Yen, expiring August 1999
Options Purchased at YEN 150 7,604,352 335,616 0.0
Total Options Purchased 7,604,352 335,616 0.0
Total Investments 2,565,858,483 3,002,361,658 100.7
OPTIONS Premiums
WRITTEN Received
Call Options 1,118,988 Federal National Mortgage Association,
Written expiring April 1999 at $79.20 (2,450,584) (3,390,534) (0.1)
2,361,514 MCI WorldCom Inc., expiring April
1999 at $57.36 (7,686,728) (38,563,523) (1.3)
Total Options Written (10,137,312) (41,954,057) (1.4)
Total Investments, Net of Options Written $2,555,721,171 2,960,407,601 99.3
==============
Unrealized Depreciation on Forward Foreign Exchange Contracts--Net++++++ (3,402,769) (0.1)
Other Assets Less Liabilities 24,802,464 0.8
-------------- ------
Net Assets $2,981,807,296 100.0%
============== ======
<FN>
*American Depositary Receipts (ADR).
**Commercial Paper is traded on a discount basis; the interest rate
shown reflects the discount rate paid at the time of purchase by the
Fund.
(a)Investment in companies 5% or more of whose outstanding
securities are held by the Fund (such companies are defined as
"Affiliated Companies" in section 2(a)(3) of the Investment Company
Act of 1940) are as follows:
Net Share Net Dividend
Industry Affiliate Activity Cost Income
Electronic Lattice 409,500 $18,485,090 ++
Components & Semiconductor
Instruments Corporation
++Non-income producing security.
(b)Acquired General Re Corporation for .0035 Class A Shares or .105
Class B Shares.
++Non-income producing security.
++++The security may be offered and sold to "qualified institutional
buyers" under Rule 144A of the Securities Act of 1933.
++++++Forward foreign exchange contracts as of December 31, 1998
were as follows:
Unrealized
Appreciation
Expiration (Depreciation)
Foreign Currency Sold Date (Note 1d)
Chf 43,726,686 September 1999 $ 705,933
Dkr 482,520,640 September 1999 435,678
Pound 143,464,739 September 1999 (808,706)
Sterling
YEN 11,024,865,351 September 1999 (3,735,674)
Total Unrealized Depreciation on
Forward Foreign Exchange Contracts--Net
(US$ Commitment--$444,635,128) $ (3,402,769)
============
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Global Value Fund, Inc., December 31, 1998
<TABLE>
STATEMENT OF ASSETS AND LIABILITIES
<CAPTION>
As of December 31, 1998
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$2,558,254,131)
(Note 1a) $3,002,026,042
Put options purchased, at value (cost--$7,604,352)
(Notes 1a & 1d) 335,616
Cash 78,969
Foreign cash (Note 1c) 3,625,752
Receivables:
Securities sold $ 15,421,779
Capital shares sold 9,402,596
Dividends 4,616,573 29,440,948
--------------
Deferred organization expenses (Note 1g) 57,761
Prepaid registration fees and other assets (Note 1g) 137,050
--------------
Total assets 3,035,702,138
--------------
Liabilities: Call options written, at value (premiums received--$10,137,312)
(Notes 1a & 1d) 41,954,057
Unrealized depreciation on forward foreign exchange contracts
(Note 1d) 3,402,769
Payables:
Capital shares redeemed 3,768,989
Distributor (Note 2) 1,998,873
Investment adviser (Note 2) 1,818,222 7,586,084
--------------
Accrued expenses 951,932
--------------
Total liabilities 53,894,842
--------------
Net Assets: Net assets $2,981,807,296
==============
Net Assets Class A Shares of Common Stock, $0.10 par value, 100,000,000
Consist of: shares authorized $ 1,484,904
Class B Shares of Common Stock, $0.10 par value, 300,000,000
shares authorized 14,611,576
Class C Shares of Common Stock, $0.10 par value, 100,000,000
shares authorized 2,668,096
Class D Shares of Common Stock, $0.10 par value, 100,000,000
shares authorized 3,127,901
Paid-in capital in excess of par 2,481,421,741
Undistributed investment income--net 11,760,176
Undistributed realized capital gains on investments and foreign
currency transactions--net 65,400,469
Unrealized appreciation on investments and foreign currency
transactions--net 401,332,433
--------------
Net assets $2,981,807,296
==============
Net Asset Class A--Based on net assets of $202,979,606 and 14,849,041 shares
Value: outstanding $ 13.67
==============
Class B--Based on net assets of $1,988,580,348 and 146,115,764 shares
outstanding $ 13.61
==============
Class C--Based on net assets of $363,133,765 and 26,680,958 shares
outstanding $ 13.61
==============
Class D--Based on net assets of $427,113,577 and 31,279,014 shares
outstanding $ 13.65
==============
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENT OF OPERATIONS
<CAPTION>
For the Year Ended December 31, 1998
<S> <S> <C> <C>
Investment Dividends (net of $2,482,812 foreign withholding tax) $ 50,714,661
Income Interest and discount earned 7,125,942
(Notes 1e & 1f): ------------
Total income 57,840,603
------------
Expenses: Investment advisory fees (Note 2) $ 18,489,427
Account maintenance and distribution fees--Class B (Note 2) 16,617,667
Account maintenance and distribution fees--Class C (Note 2) 3,086,129
Transfer agent fees--Class B (Note 2) 1,709,022
Account maintenance fees--Class D (Note 2) 875,415
Custodian fees 772,102
Registration fees (Note 1g) 343,640
Transfer agent fees--Class C (Note 2) 327,218
Transfer agent fees--Class D (Note 2) 296,164
Printing and shareholder reports 181,624
Transfer agent fees--Class A (Note 2) 123,599
Accounting services (Note 2) 114,224
Professional fees 99,305
Amortization of organization expenses--net (Note 1g) 92,917
Directors' fees and expenses 18,200
Pricing fees 4,476
Other 26,830
------------
Total expenses 43,177,959
------------
Investment income--net 14,662,644
------------
Realized & Realized gain from:
Unrealized Gain Investments--net 240,988,670
(Loss) on Foreign currency transactions--net 32,126,166 273,114,836
Investments & ------------
Foreign Currency Change in unrealized appreciation/depreciation on:
Transactions--Net Investments--net 260,991,279
(Notes 1c, 1d, Foreign currency transactions--net (36,699,689) 224,291,590
1f & 3): ------------ ------------
Net realized and unrealized gain on investments and
foreign currency transactions 497,406,426
------------
Net Increase in Net Assets Resulting from Operations $512,069,070
============
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Global Value Fund, Inc., December 31, 1998
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
For the For the Period For the
Year Ended Nov. 1, 1997 to Year Ended
Dec. 31, Dec. 31, Oct. 31,
Increase (Decrease) in Net Assets: 1998 1997 1997++
<S> <S> <C> <C> <C>
Operations: Investment income (loss)--net $ 14,662,644 $ (1,004,882) $ 12,822,166
Realized gain on investments and foreign
currency transactions--net 273,114,836 57,796,106 64,521,637
Change in unrealized appreciation/depreciation on
investments and foreign currency transactions--net 224,291,590 46,078,685 130,962,158
-------------- -------------- --------------
Net increase in net assets resulting from
operations 512,069,070 102,869,909 208,305,961
-------------- -------------- --------------
Dividends & Investment income--net:
Distributions to Class A (1,613,920) (549,581) (72,233)
Shareholders Class B (9,798,677) (2,957,634) (2,571,571)
(Note 1h): Class C (1,789,955) (551,700) (463,638)
Class D (3,260,316) (1,860,239) (721,214)
In excess of investment income--net:
Class A (2,417,667) -- --
Class B (14,678,505) -- --
Class C (2,681,369) -- --
Class D (4,883,982) -- --
Realized gain on investments--net:
Class A (15,004,582) (2,139,606) --
Class B (154,619,783) (44,190,132) --
Class C (28,383,994) (8,093,819) --
Class D (32,551,670) (8,896,075) --
-------------- -------------- --------------
Net decrease in net assets resulting from
dividends and distributions to shareholders (271,684,420) (69,238,786) (3,828,656)
-------------- -------------- --------------
Capital Share Net increase in net assets derived from capital
Transactions share transactions 937,922,226 81,836,169 1,483,455,823
(Note 4): -------------- -------------- --------------
Net Assets: Total increase in net assets 1,178,306,876 115,467,292 1,687,933,128
Beginning of period 1,803,500,420 1,688,033,128 100,000
-------------- -------------- --------------
End of period* $2,981,807,296 $1,803,500,420 $1,688,033,128
============== ============== ==============
<FN>
*Undistributed investment income--net
(Note 1i) $ 11,760,176 $ 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++++
The following per share data and ratios For the For the For the
have been derived from information provided Year Period Year
in the financial statements. Ended Nov. 1, 1997 Ended
Dec. 31, to Dec. 31, Oct. 31,
Increase (Decrease) in Net Asset Value: 1998 1997 1997++
<S> <S> <C> <C> <C>
Per Share Net asset value, beginning of period. $ 12.01 $ 11.83 $ 10.00
Operating ---------- ---------- ----------
Performance: Investment income--net .18 .01 .17
Realized and unrealized gain on investments and
foreign currency transactions--net 3.00 .72 1.71
---------- ---------- ----------
Total from investment operations 3.18 .73 1.88
---------- ---------- ----------
Less dividends and distributions:
Investment income--net (.14) (.11) (.05)
In excess of investment income--net (.20) -- --
Realized gain on investments--net (1.18) (.44) --
---------- ---------- ----------
Total dividends and distributions (1.52) (.55) (.05)
---------- ---------- ----------
Net asset value, end of period $ 13.67 $ 12.01 $ 11.83
========== ========== ==========
Total Investment Based on net asset value per share 27.10% 6.19%+++ 18.91%
Return:** ========== ========== ==========
Ratios to Average Expenses .90% .96%* .97%
Net Assets: ========== ========== ==========
Investment income--net 1.32% .54%* 1.88%
========== ========== ==========
Supplemental Net assets, end of period (in thousands) $ 202,980 $ 63,075 $ 53,776
Data: ========== ========== ==========
Portfolio turnover 44.94% 24.49% 77.65%
========== ========== ==========
<FN>
*Annualized.
**Total investment returns exclude the effects of sales loads.
++The Fund commenced operations on November 1, 1996.
++++Based on average shares outstanding.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Global Value Fund, Inc., December 31, 1998
<TABLE>
FINANCIAL HIGHLIGHTS (continued)
<CAPTION>
Class B++++
The following per share data and ratios For the For the For the
have been derived from information provided Year Period Year
in the financial statements. Ended Nov. 1, 1997 Ended
Dec. 31, to Dec. 31, Oct. 31,
Increase (Decrease) in Net Asset Value: 1998 1997 1997++
<S> <S> <C> <C> <C>
Per Share Net asset value, beginning of period. $ 11.97 $ 11.72 $ 10.00
Operating ---------- ---------- ----------
Performance: Investment income (loss)--net .06 (.01) .09
Realized and unrealized gain on investments and
foreign currency transactions--net 2.96 .73 1.67
---------- ---------- ----------
Total from investment operations 3.02 .72 1.76
---------- ---------- ----------
Less dividends and distributions:
Investment income--net (.08) (.03) (.04)
In excess of investment income--net (.12) -- --
Realized gain on investments--net (1.18) (.44) --
---------- ---------- ----------
Total dividends and distributions (1.38) (.47) (.04)
---------- ---------- ----------
Net asset value, end of period $ 13.61 $ 11.97 $ 11.72
========== ========== ==========
Total Investment Based on net asset value per share 25.76% 6.14%+++ 17.62%
Return:** ========== ========== ==========
Ratios to Average Expenses 1.92% 1.98%* 1.99%
Net Assets: ========== ========== ==========
Investment income (loss)--net .44% (.49%)* .84%
========== ========== ==========
Supplemental Net assets, end of period (in thousands) $1,988,580 $1,251,956 $1,179,125
Data: ========== ========== ==========
Portfolio turnover 44.94% 24.49% 77.65%
========== ========== ==========
<FN>
*Annualized.
**Total investment returns exclude the effects of sales loads.
++The Fund commenced operations on November 1, 1996.
++++Based on average shares outstanding.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
<TABLE>
FINANCIAL HIGHLIGHTS (continued)
<CAPTION>
Class C++++
The following per share data and ratios For the For the For the
have been derived from information provided Year Period Year
in the financial statements. Ended Nov. 1, 1997 Ended
Dec. 31, to Dec. 31, Oct. 31,
Increase (Decrease) in Net Asset Value: 1998 1997 1997++
<S> <S> <C> <C> <C>
Per Share Net asset value, beginning of period. $ 11.97 $ 11.72 $ 10.00
Operating ---------- ---------- ----------
Performance: Investment income (loss)--net .06 (.01) .09
Realized and unrealized gain on investments and
foreign currency transactions--net 2.96 .73 1.67
---------- ---------- ----------
Total from investment operations 3.02 .72 1.76
---------- ---------- ----------
Less dividends and distributions:
Investment income--net (.08) (.03) (.04)
In excess of investment income--net (.12) -- --
Realized gain on investments--net (1.18) (.44) --
---------- ---------- ----------
Total dividends and distributions (1.38) (.47) (.04)
---------- ---------- ----------
Net asset value, end of period $ 13.61 $ 11.97 $ 11.72
========== ========== ==========
Total Investment Based on net asset value per share 25.73% 6.14%+++ 17.62%
Return:** ========== ========== ==========
Ratios to Average Expenses 1.92% 1.98%* 1.99%
Net Assets: ========== ========== ==========
Investment income (loss)--net .43% (.49%)* .83%
========== ========== ==========
Supplemental Net assets, end of period (in thousands) $ 363,134 $ 229,601 $ 217,341
Data: ========== ========== ==========
Portfolio turnover 44.94% 24.49% 77.65%
========== ========== ==========
<FN>
*Annualized.
**Total investment returns exclude the effects of sales loads.
++The Fund commenced operations on November 1, 1996.
++++Based on average shares outstanding.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Global Value Fund, Inc., December 31, 1998
<TABLE>
FINANCIAL HIGHLIGHTS (concluded)
<CAPTION>
Class D++++
The following per share data and ratios For the For the For the
have been derived from information provided Year Period Year
in the financial statements. Ended Nov. 1, 1997 Ended
Dec. 31, to Dec. 31, Oct. 31,
Increase (Decrease) in Net Asset Value: 1998 1997 1997++
<S> <S> <C> <C> <C>
Per Share Net asset value, beginning of period. $ 12.00 $ 11.80 $ 10.00
Operating ---------- ---------- ----------
Performance: Investment income--net .16 .01 .18
Realized and unrealized gain on investments and
foreign currency transactions--net 2.98 .72 1.67
---------- ---------- ----------
Total from investment operations 3.14 .73 1.85
---------- ---------- ----------
Less dividends and distributions:
Investment income--net (.12) (.09) (.05)
In excess of investment income--net (.19) -- --
Realized gain on investments--net (1.18) (.44) --
---------- ---------- ----------
Total dividends and distributions (1.49) (.53) (.05)
---------- ---------- ----------
Net asset value, end of period $ 13.65 $ 12.00 $ 11.80
========== ========== ==========
Total Investment Based on net asset value per share 26.72% 6.20%+++ 18.56%
Return:** ========== ========== ==========
Ratios to Average Expenses 1.15% 1.21%* 1.22%
Net Assets: ========== ========== ==========
Investment income--net 1.19% .28%* 1.62%
========== ========== ==========
Supplemental Net assets, end of period (in thousands) $ 427,113 $ 258,868 $ 237,791
Data: ========== ========== ==========
Portfolio turnover 44.94% 24.49% 77.65%
========== ========== ==========
<FN>
*Annualized.
**Total investment returns exclude the effects of sales loads.
++The Fund commenced operations on November 1, 1996.
++++Based on average shares outstanding.
+++Aggregate total investment return.
See Notes to Financial Statements.
</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. The Fund's financial statements
are prepared in accordance with generally accepted accounting
principles which may require the use of management accruals and
estimates. 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.
(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 or
purchased are valued at the last sale price in the case of exchange-
traded options. In the case of options traded in the over-the-
counter market, valuation is the last asked price (options written)
or the last bid price (options purchased). 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. Under such agreements,
the counterparty 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.
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.
* 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.
Merrill Lynch Global Value Fund, Inc., December 31, 1998
NOTES TO FINANCIAL STATEMENTS (continued)
* Financial futures contracts--The Fund may purchase or sell
financial futures contracts and options on such futures contracts
for the purpose of hedging the market risk on existing securities or
the intended purchase of securities. Futures contracts are contracts
for delayed delivery of securities at a specific future date and at
a specific price or yield. Upon entering into a contract, the Fund
deposits and maintains as collateral such initial margin as required
by the exchange on which the transaction is effected. Pursuant to
the contract, the Fund agrees to receive from or pay to the broker
an amount of cash equal to the daily fluctuation in value of the
contract. Such receipts or payments are known as variation margin
and are recorded by the Fund as unrealized gains or losses. When the
contract is closed, the Fund records a realized gain or loss equal
to the difference between the value of the contract at the time it
was opened and the value at the time it was closed.
(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 period not exceeding five years. 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. Distributions in
excess of net investment income are due primarily to differing tax
treatments for foreign currency transactions.
(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
$36,421,699 have been reclassified between undistributed net
realized capital gains and undistributed net investment income.
These reclassifications have no effect on net assets or net assets
values per share.
2. Investment Advisory Agreement and Transactions
with Affiliates:
The Fund has entered into an Investment Advisory Agreement with
Merrill Lynch Asset Management, L.P. ("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 ("MLFD" or "Distributor"), a division of Princeton Funds
Distributor, Inc. ("PFD"), which is 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.
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
Maintenance Distribution
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 Incorporated ("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 distribution fee compensates the Distributor and MLPF&S
for providing shareholder and distribution-related services to Class
B and Class C shareholders.
For the year ended December 31, 1998, 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 $ 456 $ 7,029
Class D $66,544 $946,710
For the year ended December 31, 1998, MLPF&S received contingent
deferred sales charges of $3,532,554 and $74,482 relating to
transactions in Class B and Class C Shares, respectively.
In addition, MLPF&S received $194,091 in commissions on the
execution of portfolio security transactions for the Fund for the
year ended December 31, 1998.
Financial Data Services, Inc. ("FDS"), 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, FDS, PFD, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the year ended December 31, 1998 were $1,702,176,608 and
$1,038,940,179, respectively.
Net realized gains (losses) for the year ended December 31, 1998 and
net unrealized gains (losses) as of December 31, 1998 were as
follows:
Realized Unrealized
Gains (Losses) Gains (Losses)
Investments:
Long-term $240,964,990 $443,771,911
Options written 23,680 (31,816,745)
------------ ------------
Total investments 240,988,670 411,955,166
------------ ------------
Currency transactions:
Options purchased (7,683,000) (7,268,736)
Options written 20,799,360 --
Foreign currency transactions 16,292,681 48,772
Forward foreign exchange
contracts 2,717,125 (3,402,769)
------------ ------------
Total currency transactions 32,126,166 (10,622,733)
------------ ------------
Total $273,114,836 $401,332,433
============ ============
Transactions in call options written for the year ended December 31,
1998 were as follows:
Par Value
Covered by Premiums
Written Options Received
Outstanding call options
written at beginning of year -- --
Options written 3,665,502 $ 10,540,242
Options expired (185,000) (402,930)
------------ --------------
Outstanding call options
written at end of year 3,480,502 $ 10,137,312
============ ==============
Transactions in put options written for the year ended December 31,
1998 were as follows:
Par Value
Covered by Premiums
Written Options Received
Outstanding put options
written at beginning of year -- --
Options written 176,640,000 $ 20,799,360
Options closed (176,640,000) (20,799,360)
------------ --------------
Outstanding put options
written at end of year -- $ --
============ ==============
As of December 31, 1998, net unrealized appreciation for Federal
income tax purposes aggregated $411,955,166, of which $589,604,277
related to appreciated securities and $177,649,111 related to
depreciated securities. The aggregate cost of investments, net of
premiums received for options written at December 31, 1998 for
Federal income tax purposes was $2,548,116,819.
4. Capital Share Transactions:
Net increase in net assets derived from capital share transactions
were $937,922,226, $81,836,169 and $1,483,455,823 for the year ended
December 31, 1998, for the period November 1, 1997 to December 31,
1997 and for the year ended October 31, 1997, respectively.
Merrill Lynch Global Value Fund, Inc., December 31, 1998
NOTES TO FINANCIAL STATEMENTS (concluded)
Transactions in capital shares for each class were as follows:
Class A Shares for the Year Dollar
Ended December 31, 1998 Shares Amount
Shares sold 11,594,216 $ 157,632,070
Shares issued to shareholders
in reinvestment of dividends
and distributions 700,153 9,347,636
------------ --------------
Total issued 12,294,369 166,979,706
Shares redeemed (2,696,436) (36,354,264)
------------ --------------
Net increase 9,597,933 $ 130,625,442
============ ==============
Class A Shares for the Period
November 1, 1997 to Dollar
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
============ ==============
Class A Shares for the Period
November 1, 1996++ to Dollar
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 Year Dollar
Ended December 31, 1998 Shares Amount
Shares sold 52,086,564 $ 711,124,670
Shares issued to shareholders
in reinvestment of dividends
and distributions 11,614,251 154,732,397
------------ --------------
Total issued 63,700,815 865,857,067
Automatic conversion of shares (837,665) (11,201,223)
Shares redeemed (21,371,519) (284,576,009)
------------ --------------
Net increase 41,491,631 $ 570,079,835
============ ==============
Class B Shares for the Period
November 1, 1997 to Dollar
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
November 1, 1996++ to Dollar
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
============ ==============
[FN]
++Prior to November 1, 1996 (commencement of operations), the Fund
issued 2,500 shares to MLAM for $25,000.
Class C Shares for the Year Dollar
Ended December 31, 1998 Shares Amount
Shares sold 10,104,124 $ 138,079,120
Shares issued to shareholders
in reinvestment of dividends
and distributions 2,149,018 28,640,687
------------ --------------
Total issued 12,253,142 166,719,807
Shares redeemed (4,761,365) (63,354,025)
------------ --------------
Net increase 7,491,777 $ 103,365,782
============ ==============
Class C Shares for the Period
November 1, 1997 to Dollar
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
November 1, 1996++ to Dollar
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 Year Dollar
Ended December 31, 1998 Shares Amount
Shares sold 12,280,913 $ 167,684,549
Automatic conversion of shares 832,238 11,201,223
Shares issued to shareholders
in reinvestment of dividends
and distributions 2,707,655 36,169,410
------------ --------------
Total issued 15,820,806 215,055,182
Shares redeemed (6,112,408) (81,204,015)
------------ --------------
Net increase 9,708,398 $ 133,851,167
============ ==============
Class D Shares for the Period
November 1, 1997 to Dollar
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
============ ==============
Class D Shares for the Period
November 1, 1996++ to Dollar
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.
<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, 1998, the related
statements of operations for the year then ended and changes in net
assets and the financial highlights for the year then ended and 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, 1998 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.
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, 1998, 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 22, 1999
</AUDIT-REPORT>
Merrill Lynch Global Value Fund, Inc., December 31, 1998
IMPORTANT TAX INFORMATION (unaudited)
The following information summarizes all per share distributions
paid by Merrill Lynch Global Value Fund, Inc. during its taxable
year ended December 31, 1998.
<TABLE>
<CAPTION>
Qualifying Domestic Non-Qualifying Total Long-Term
Record Date Payable Date Ordinary Income Ordinary Income Ordinary Income Capital Gains*
<S> <C> <C> <C> <C> <C>
Class A Shares:
5/12/98 5/20/98 $.014561 $.338666 $.353227 $.154075
12/16/98 12/24/98 $.087335 $.714732 $.802067 $.215352
Class B Shares:
5/12/98 5/20/98 $.013836 $.321810 $.335646 $.154075
12/16/98 12/24/98 $.073784 $.603837 $.677621 $.215352
Class C Shares:
5/12/98 5/20/98 $.013842 $.321951 $.335793 $.154075
12/16/98 12/24/98 $.073522 $.601688 $.675210 $.215352
Class D Shares:
5/12/98 5/20/98 $.014388 $.334650 $.349038 $.154075
12/16/98 12/24/98 $.084019 $.687594 $.771613 $.215352
<FN>
*All long-term capital gains distributions are subject to the 20%
tax rate.
The qualifying domestic ordinary income qualifies for the dividends
received deduction for corporations.
Please retain this information for your records.
</TABLE>
PORTFOLIO CHANGES (unaudited)
For the Quarter Ended December 31, 1998
Additions
Alleanza Assicurazioni
Allied Zurich PLC
Monsanto Company
Washington Mutual, Inc.
Deletions
American Stores Company
Houston Industries Incorporated
ING Groep N.V.
