MERRILL LYNCH
GLOBAL GROWTH
FUND, INC.
FUND LOGO
Semi-Annual Report
February 28, 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.
<PAGE>
Merrill Lynch
Global Growth Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
Printed on post-consumer recycled paper
MERRILL LYNCH GLOBAL GROWTH FUND, INC.
Officers and
Directors
Arthur Zeikel, President and Director
Donald Cecil, Director
M. Coyler Crum, Director
Edward H. Meyer, Director
Jack B. Sunderland, Director
J. Thomas Touchton, Director
Fred G. Weiss, Director
Terry K. Glenn, Executive Vice President
Norman R. Harvey, Senior Vice President
Donald C. Burke, Vice President
Lawrence R. Fuller, Vice President and
Portfolio Manager
Gerald M. Richard, Treasurer
Philip M. Mandel, Secretary
Custodian
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02101
Transfer Agent
Merrill Lynch Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 637-3863
Merrill Lynch Global Growth Fund, Inc., February 28, 1998
DEAR SHAREHOLDER
<PAGE>
We are pleased to provide you with the first shareholder report for
Merrill Lynch Global Growth Fund, Inc. The Fund seeks long-term
growth of capital by investing in a diversified portfolio of equity
securities of issuers located in various foreign countries and the
United States. In this and future reports to shareholders, we will
provide information on the Fund's performance, discuss our
investment strategies, and highlight some of the Fund's holdings.
Merrill Lynch Global Growth Fund, Inc. commenced operations on
October 31, 1997. Since inception through February 28, 1998, the
Fund's Class A, Class B, Class C and Class D Shares had total
returns of +12.20%, +11.80%, +11.80% and +12.10%, respectively.
(Investment results shown do not reflect sales charges, and would be
lower if sales charges were included. Complete performance
information, including aggregate total returns, can be found on
pages 4 and 5 of this report to shareholders.)
The Fund's performance reflects our overweighting of banking and
finance, insurance and financial service companies in western Europe
and Canada, as well as our limiting the Fund's weighting in Asian
stock markets, including Japan. A negative factor for the Fund
during this initial investment period was the decline in stock
prices of a few of the portfolio's US companies in the tele-
communications equipment, computer, computer software and oil
service industries. The prospective earnings of companies in these
industries have been perceived to be particularly vulnerable to the
recessions developing in major Asian countries, including Japan.
The Environment
The start-up of the Fund occurred during a very volatile period for
the world's developing stock markets. Merrill Lynch Global Growth
Fund, Inc. is focused on equity investments in primarily large-
capitalization growth companies in the developed equity markets.
However, the steep declines in currency values and local stock
markets in the emerging markets of Asia also affected the developed
stock markets of Europe and North America. Investor concerns have
related to the potential declines in earnings for global companies,
which have significant product and/or service markets in Asia. We
recognized the possibility of a slowdown in real business activity
around the world as a result of governmental austerity programs in
the major Asian countries. However, we believed the stock price
declines experienced in October and November of 1997 in most of the
developed countries' equity markets represented an opportunity to
invest the proceeds of the record $1.2 billion initial public
offering of the Fund at relatively attractive valuations.
Quarterly earnings reports released in early 1998 for the fourth
quarter of 1997 have helped to reduce the concerns regarding the
negative effects of the developing Asian crisis on individual
companies. In recent weeks, officials at the International Monetary
Fund, in addition to central bankers, commercial bankers and
investment bankers from developed countries, have cooperated with
government officials and business executives in the Asian countries
in an effort to develop solutions to that region's financial
liquidity problems. We believe that investors will view this as
positive.
<PAGE>
Investment Strategy
Our investment focus is on medium-to-large-capitalization companies
around the world, where we anticipate above-average growth in
earnings. As of February 28, 1998, a majority of the companies in
the Fund were foreign-based companies, representing over 65% of net
assets. Our current investment strategy with respect to industry
allocations reflects the potential of a global slowdown in real
economic growth during 1998, accompanied by declining rates of
inflation and lower interest rates. Consequently, the portfolio's
two largest industry sector allocations are banking/ financial and
insurance.
The Fund also has exposure to what we believe will continue to be
relatively high-growth capital investment sectors. We believe that
selected communications equipment companies will continue to
experience above-average growth in earnings despite the foregone
sales in some Asian markets. The Fund's primary investments in this
sector are represented by Northern Telecom Ltd., Telefonaktiebologet
LM Ericsson (Class B), Nokia oyj and Lucent Technologies, Inc. Major
telecommunications companies in the United States, Europe and Latin
America seem to be continuing substantial capital investment
programs in new cellular as well as wireline telecommunication
switch infrastructure. These telecommunications equipment
investments relate to government programs to increase competition
under global deregulation as well as to corporate programs to
develop global infrastructures of new networked computer business
application programs. In our opinion, two of the top ten equity
investments in the Fund, SAP AG and Baan Company, N.V., are among
the leading software companies providing the consulting and systems
integration for the implementation of globally networked business
applications for some of the largest corporate organizations in the
world.
We have sold only two of the initial investments in the Fund. We
eliminated Oracle Corporation at a capital loss after the company's
management reported what was a surprisingly unsatisfactory
operational result. Oracle Corporation appears to be losing business
and market share to Microsoft Corporation at the low-end of the
relational database market. Also, Oracle Corporation appears to be
growing at a substantially slower rate than the leading companies,
such as SAP AG and Baan Company, N.V., in business applications
software for networked operational systems. We also eliminated, at a
modest capital loss, Assurances Generales de France, which is being
acquired in stages by Allianz AG in an agreement which, in our
opinion, would significantly limit future investment returns.
<PAGE>
In Conclusion
We thank you for subscribing to the initial public offering of
Merrill Lynch Global Growth Fund, Inc. and your subsequent support.
It was a record equity fund public offering for the US mutual fund
industry. We have a positive outlook for potential equity investment
returns, and we look forward to serving your investment needs in the
months and years ahead.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Lawrence R. Fuller)
Lawrence R. Fuller
Vice President and
Portfolio Manager
March 31, 1998
Merrill Lynch Global Growth Fund, Inc., February 28, 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.
<PAGE>
* 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 "Aggregate 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.
<TABLE>
Recent
Performance
Results*
<CAPTION>
3 Month Since Inception
Total Return Total Return
<S> <C> <C>
ML Global Growth Fund, Inc. Class A Shares +14.37% +12.20%
ML Global Growth Fund, Inc. Class B Shares +14.08 +11.80
ML Global Growth Fund, Inc. Class C Shares +14.08 +11.80
ML Global Growth Fund, Inc. Class D Shares +14.27 +12.10
<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's inception date is October 31, 1997.
</TABLE>
<PAGE>
Aggregate
Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Inception (10/31/97) through 12/31/97 +0.10% -5.16%
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Inception (10/31/97) through 12/31/97 -0.10% -4.10%
[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*
Inception (10/31/97) through 12/31/97 -0.10% -1.10%
[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*
Inception (10/31/97) through 12/31/97 +0.10% -5.16%
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
<PAGE>
PORTFOLIO INFORMATION
Worldwide
Investments as of
February 28, 1998
Percent of
Ten Largest Industries Net Assets
Banking & Financial 20.3%
Insurance 10.9
Communications Equipment 7.5
Pharmaceuticals 6.4
Software--Computer 5.8
Retail 5.8
Telecommunications 4.6
Electronics 2.9
Computers 2.8
Electrical Equipment 2.5
Country of Percent of
Ten Largest Equity Holdings Origin Net Assets
SAP AG (Systeme, Anwendungen,
Produkte in der Datenverar-
beitung)(Preferred) Germany 3.0%
Baan Company, N.V. Netherlands 2.1
Novartis AG (Registered Shares) Switzerland 2.0
National Westminster Bank PLC
(Ordinary) United Kingdom 1.8
Nippon Telegraph & Telephone
Corp. Japan 1.8
Lloyds TSB Group PLC United Kingdom 1.8
Northern Telecom Ltd. Canada 1.7
Barclays PLC United Kingdom 1.7
Nokia oyj (Class A) Finland 1.6
Dresdner Bank AG Germany 1.6
<PAGE>
Merrill Lynch Global Growth Fund, Inc., February 28, 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 Banking & Financial 380,000 Bank of Montreal $ 17,744,280 $ 20,298,004 1.3%
575,000 Canadian Imperial Bank
of Commerce 18,142,347 18,307,211 1.2
500,000 National Bank of Canada 7,419,127 8,328,648 0.6
300,000 Royal Bank of Canada 16,480,599 17,563,958 1.1
-------------- -------------- ------
59,786,353 64,497,821 4.2
Communications 350,000 ++Newbridge Networks Corp. 16,697,365 8,203,894 0.6
Equipment 500,000 Northern Telecom Ltd. 23,928,428 26,637,616 1.7
-------------- -------------- ------
40,625,793 34,841,510 2.3
Total Investments
in Canada 100,412,146 99,339,331 6.5
United States Advertising 85,000 Interpublic Group of
Companies, Inc. 4,101,446 4,632,500 0.3
Banking & Financial 154,000 Banc One Corp. 7,522,284 8,701,000 0.6
50,000 BankAmerica Corp. 3,492,072 3,875,000 0.3
132,000 Citicorp 17,428,427 17,490,000 1.1
145,000 Mellon Bank Corp. 8,033,775 9,035,313 0.6
180,000 State Street Corp. 10,395,954 11,126,250 0.7
-------------- -------------- ------
46,872,512 50,227,563 3.3
Beverages 40,000 The Coca-Cola Company 2,321,880 2,747,500 0.2
Broadcasting--Radio & 45,000 ++Clear Channel
Television Communications, Inc. 3,785,427 4,078,125 0.3
Communications 135,000 ++Cisco Systems, Inc. 7,735,941 8,893,125 0.6
Equipment 440,000 ++FORE Systems, Inc. 7,553,744 7,040,000 0.5
90,000 Lucent Technologies, Inc. 7,704,135 9,753,750 0.6
-------------- -------------- ------
22,993,820 25,686,875 1.7
Computers 700,000 Compaq Computer Corp. 23,821,910 22,443,750 1.4
20,000 ++Dell Computer Corporation 2,492,500 2,796,250 0.2
45,000 Hewlett-Packard Co. 2,922,777 3,015,000 0.2
-------------- -------------- ------
29,237,187 28,255,000 1.8
<PAGE>
Cosmetics 110,000 The Gillette Company 10,104,061 11,866,250 0.8
20,000 International Flavors
& Fragrances, Inc. 968,044 920,000 0.0
-------------- -------------- ------
11,072,105 12,786,250 0.8
Electrical Equipment 35,000 Emerson Electric Co. 1,975,075 2,233,438 0.1
260,000 General Electric Co. 18,067,322 20,215,000 1.3
10,000 Honeywell, Inc. 710,689 792,500 0.1
-------------- -------------- ------
20,753,086 23,240,938 1.5
Electronics 227,000 Intel Corporation 17,179,260 20,344,875 1.3
35,000 Texas Instruments Inc. 2,003,866 2,025,625 0.1
-------------- -------------- ------
19,183,126 22,370,500 1.4
Energy 150,000 El Paso Natural Gas Co. 9,480,786 9,956,250 0.7
75,000 Enron Corp. 2,883,465 3,525,000 0.2
-------------- -------------- ------
12,364,251 13,481,250 0.9
Entertainment 35,000 ++Viacom, Inc. (Class B) 1,088,787 1,680,000 0.1
130,000 The Walt Disney Company 11,960,634 14,551,875 1.0
-------------- -------------- ------
13,049,421 16,231,875 1.1
Financial Services 40,000 American Express Company 3,224,880 3,602,500 0.2
70,000 Federal National
Mortgage Association 3,823,246 4,466,875 0.3
100,000 Morgan Stanley, Dean
Witter, Discover & Co. 6,021,422 6,968,750 0.5
400,000 Travelers Group, Inc. 19,984,610 22,300,000 1.5
-------------- -------------- ------
33,054,158 37,338,125 2.5
Food Merchandising 100,000 Albertsons, Inc. 3,854,535 4,681,250 0.3
105,000 ++Fred Meyer, Inc. 3,288,884 4,665,938 0.3
-------------- -------------- ------
7,143,419 9,347,188 0.6
Foods 40,000 ConAgra, Inc. 1,360,116 1,200,000 0.1
35,000 Wrigley (Wm.) Jr. Company
(Class B) 2,610,412 2,673,125 0.2
-------------- -------------- ------
3,970,528 3,873,125 0.3
Home Furnishings 164,500 Ethan Allen Interiors,
Inc. 7,659,087 9,170,875 0.6
<PAGE>
Hotels 25,000 Marriott International,
Inc. 1,702,250 1,893,750 0.1
Household Products 35,000 Colgate-Palmolive Co. 2,288,342 2,841,563 0.2
20,000 Kimberly-Clark Corp. 1,056,650 1,113,750 0.1
60,000 Procter & Gamble Company 4,312,704 5,096,250 0.3
-------------- -------------- ------
7,657,696 9,051,563 0.6
Information Processing 155,000 First Data Corp. 4,599,284 5,270,000 0.3
Insurance 10,000 Aetna Inc. 737,856 873,750 0.0
150,000 American International
Group, Inc. 15,884,252 18,028,125 1.2
-------------- -------------- ------
16,622,108 18,901,875 1.2
Medical Technology 150,000 ++Boston Scientific Corp. 7,648,860 8,962,500 0.6
90,000 Guidant Corporation 5,835,558 6,564,375 0.4
25,000 Johnson & Johnson 1,503,390 1,887,500 0.1
-------------- -------------- ------
14,987,808 17,414,375 1.1
Oil Services 190,000 Baker Hughes, Inc. 9,059,363 7,778,125 0.5
250,000 Diamond Offshore
Drilling, Inc. 15,343,835 11,328,125 0.7
140,000 Schlumberger Ltd. 13,083,952 10,552,500 0.7
-------------- -------------- ------
37,487,150 29,658,750 1.9
Pharmaceuticals 25,000 Amgen, Inc. 1,328,783 1,328,125 0.1
120,000 Bristol-Myers Squibb Co. 11,138,426 12,022,500 0.8
140,000 Merck & Co., Inc. 13,482,770 17,858,750 1.1
100,000 Pfizer Inc. 7,279,046 8,850,000 0.6
-------------- -------------- ------
33,229,025 40,059,375 2.6
</TABLE>
Merrill Lynch Global Growth Fund, Inc., February 28, 1998
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
NORTH AMERICA Shares Value Percent of
(concluded) Industries Held Investments Cost (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C>
United States Photography 30,000 Eastman Kodak Co. $ 1,880,844 $ 1,968,750 0.1%
(concluded)
Pollution Control 20,000 Waste Management, Inc. 505,400 500,000 0.0
Restaurants 30,000 McDonald's Corporation 1,391,850 1,642,500 0.1
Retail 420,000 Wal-Mart Stores, Inc. 15,286,530 19,451,250 1.3
Semiconductor 60,000 ++Applied Materials, Inc. 2,061,564 2,208,750 0.1
Software--Computer 40,000 ++Microsoft Corporation 2,672,322 3,390,000 0.2
180,000 ++PeopleSoft, Inc. 7,340,062 8,032,500 0.5
-------------- -------------- ------
10,012,384 11,422,500 0.7
Specialty Retailing 80,000 CVS Corporation 5,197,738 5,925,000 0.4
100,000 The Gap, Inc. 4,014,457 4,468,750 0.3
435,000 ++Staples, Inc. 7,849,691 9,189,375 0.6
165,000 Walgreen Co. 4,931,108 6,053,438 0.4
-------------- -------------- ------
21,992,994 25,636,563 1.7
Telecommunications 110,000 Sprint Corporation 6,630,434 7,260,000 0.5
Toys 200,000 Mattel, Inc. 7,823,472 8,462,500 0.6
Travel & Lodging 60,000 Carnival Corp. (Class A) 2,997,084 3,532,500 0.2
Total Investments in
the United States 424,429,330 467,802,690 30.4
Total Investments in
North America 524,841,476 567,142,021 36.9
PACIFIC
BASIN
Japan Automobiles 480,000 Honda Motor Co., Ltd. 17,468,820 16,627,824 1.1
500,000 Toyota Motor Corp. 13,656,899 13,832,739 0.9
-------------- -------------- ------
31,125,719 30,460,563 2.0
<PAGE>
Computers 700,000 Fujitsu Ltd. 7,951,104 7,879,509 0.5
700,000 NEC Corporation 7,957,519 7,824,019 0.5
-------------- -------------- ------
15,908,623 15,703,528 1.0
Leisure 140,000 Sony Corp. 12,422,680 12,651,605 0.8
Office Equipment 200,000 Canon, Inc. 4,706,266 4,581,847 0.3
Photography 300,000 Fuji Photo Film Co., Ltd. 11,929,829 11,771,700 0.8
Retail 250,000 Ito-Yokado Co., Ltd. 13,794,985 13,674,197 0.9
Telecommunications 3,000 Nippon Telegraph &
Telephone Corp. 26,362,868 27,586,206 1.8
Total Investments in the
Pacific Basin 116,250,970 116,429,646 7.6
WESTERN
EUROPE
Denmark Telecommunications 70,000 Tele-Denmark A.S. 4,531,731 4,533,561 0.3
Total Investments
in Denmark 4,531,731 4,533,561 0.3
Finland Communications 250,000 Nokia oyj (Class A) 21,791,192 25,029,500 1.6
Equipment
Total Investments
in Finland 21,791,192 25,029,500 1.6
France Communications 50,000 Alcatel Alsthom Cie
Equipment Generale d'Electricite S.A. 6,141,367 6,507,806 0.4
Cosmetics 10,000 L'OREAL 3,739,626 4,506,163 0.3
Electronics 100,000 ++SGS-Thomson
Microelectronics N.V. 7,121,888 7,666,393 0.5
Foods 15,000 Promodes S.A. 6,249,958 6,692,687 0.4
Information Processing 180,000 Cap Gemini S.A. 15,395,411 20,706,656 1.4
Insurance 165,000 Axa-UAP 11,694,023 15,971,241 1.0
Retail 20,000 Carrefour S.A. 11,290,715 12,009,860 0.8
Total Investments
in France 61,632,988 74,060,806 4.8
<PAGE>
Germany Apparel 50,000 Adidas AG 7,026,333 7,826,279 0.5
Automobiles 40,000 Daimler-Benz AG 2,783,283 3,276,014 0.2
Banking & Financial 600,000 Commerzbank AG 21,297,933 21,726,190 1.4
335,000 Deutsche Bank AG 21,864,670 23,014,633 1.5
525,000 Dresdner Bank AG 22,202,477 23,813,657 1.6
-------------- -------------- ------
65,365,080 68,554,480 4.5
Chemicals 150,000 BASF AG 5,213,865 5,460,483 0.4
150,000 Bayer AG 5,341,904 6,324,405 0.4
140,000 Hoechst AG 5,771,079 5,424,383 0.3
-------------- -------------- ------
16,326,848 17,209,271 1.1
Electronics 250,000 Siemens AG 16,074,487 15,383,873 1.0
Insurance 65,000 Allianz AG 17,121,210 20,473,710 1.3
Multi-Industry 50,000 VEBA AG 2,887,107 3,355,104 0.2
Retail 180,000 Metro AG 7,700,813 8,184,524 0.6
Software--Computer 110,000 SAP AG (Systeme,
Anwendungen, Produkte
in der Datenverarbeitung)
(Preferred) 34,118,327 45,348,325 3.0
Total Investments
in Germany 169,403,488 189,611,580 12.4
Ireland Banking & Financial 1,300,000 Allied Irish Banks PLC 13,137,895 16,880,163 1.1
Total Investments
in Ireland 13,137,895 16,880,163 1.1
Italy Insurance 464,000 Assicurazioni Generali
S.p.A. 11,016,623 13,259,367 0.8
3,750,000 Istituto Nazionale delle
Assicurazioni S.p.A. (INA) 7,008,593 10,191,813 0.7
Total Investments
in Italy 18,025,216 23,451,180 1.5
</TABLE>
Merrill Lynch Global Growth Fund, Inc., February 28, 1998
<PAGE>
<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>
Netherlands Food Merchandising 300,000 Koninklijke Ahold N.V. $ 8,057,506 $ 9,182,476 0.6%
Household Products 200,000 Unilever N.V. 11,380,224 12,878,936 0.8
60,000 Unilever N.V. (NY
Registered Shares) 3,751,836 3,858,750 0.3
-------------- -------------- ------
15,132,060 16,737,686 1.1
Insurance 70,000 AEGON N.V. 5,669,294 7,974,770 0.5
235,000 ING Groep N.V. 10,003,319 12,444,015 0.8
-------------- -------------- ------
15,672,613 20,418,785 1.3
Leisure 35,000 Philips Electronics N.V. 2,809,946 2,721,005 0.2
50,000 Polygram N.V. 2,816,709 2,593,878 0.2
-------------- -------------- ------
5,626,655 5,314,883 0.4
Software--Computer 720,000 ++Baan Company, N.V. 26,223,931 32,564,052 2.1
Total Investments in
the Netherlands 70,712,765 84,217,882 5.5
Spain Banking & Financial 200,000 Banco Bilbao Vizcaya, S.A. 5,505,054 9,141,743 0.6
175,000 Banco Santander, S.A. 4,941,976 8,101,430 0.5
Total Investments
in Spain 10,447,030 17,243,173 1.1
Sweden Communications 500,000 Telefonaktiebolaget LM
Equipment Ericsson (Class B) 22,955,241 22,746,304 1.5
Total Investments
in Sweden 22,955,241 22,746,304 1.5
Switzerland Foods 7,000 Nestle S.A. (Registered) 10,009,777 12,271,487 0.8
Insurance 20,000 Zuerich Versicherungs-
Gesellschaft
(Registered Shares) 8,709,180 10,914,052 0.7
<PAGE>
Pharmaceuticals 17,000 Novartis AG (Registered
Shares) 26,865,087 31,042,974 2.0
Total Investments in
Switzerland 45,584,044 54,228,513 3.5
United Kingdom Banking & Financial 875,000 Barclays PLC 22,582,208 25,969,482 1.7
400,000 HSBC Holdings PLC 11,097,646 12,279,773 0.8
1,800,000 Lloyds TSB Group PLC 22,830,755 27,066,830 1.8
1,500,000 National Westminster
Bank PLC (Ordinary) 22,162,632 27,614,682 1.8
-------------- -------------- ------
78,673,241 92,930,767 6.1
Broadcast--Media 1,000,000 British Sky Broadcasting
Group PLC 6,087,391 6,465,636 0.4
Chemicals 365,000 Imperial Chemical
Industries PLC 5,501,341 6,656,520 0.4
Electrical Equipment 750,000 Siebe PLC 14,965,916 15,510,123 1.0
Household Products 750,000 Unilever PLC 5,692,608 6,786,450 0.4
Information Processing 1,039,999 Reuters Group PLC 13,444,894 10,462,804 0.7
Insurance 1,000,000 Commercial Union PLC 14,287,623 18,064,296 1.2
2,500,000 Guardian Royal Exchange
PLC 13,253,258 18,775,845 1.2
1,800,000 Royal & Sun Alliance
Insurance Group PLC 17,885,194 22,906,120 1.5
-------------- -------------- ------
45,426,075 59,746,261 3.9
Pharmaceuticals 265,000 Glaxo Wellcome PLC 5,881,443 7,411,626 0.5
575,000 SmithKline Beecham PLC 5,491,124 7,189,524 0.5
300,000 Zeneca Group PLC 11,066,411 13,029,984 0.8
-------------- -------------- ------
22,438,978 27,631,134 1.8
Publishing 750,000 Pearson PLC 10,169,178 11,166,795 0.7
Retail 750,000 Boots Company PLC 11,223,919 11,259,337 0.7
1,320,000 J Sainsbury PLC 11,275,003 10,228,537 0.7
1,400,000 Tesco PLC 11,323,155 11,896,441 0.8
-------------- -------------- ------
33,822,077 33,384,315 2.2
Telecommunications 600,000 ++COLT Telecom Group PLC 7,164,771 13,126,919 0.8
2,000,000 Vodafone Group PLC 11,380,920 17,768,160 1.2
-------------- -------------- ------
18,545,691 30,895,079 2.0
<PAGE>
Total Investments in
the United Kingdom 254,767,390 301,635,884 19.6
Total Investments in
Western Europe 692,988,980 813,638,546 52.9
SHORT-TERM Face
SECURITIES Amount Issue
Commercial Paper* $49,660,000 General Motors
Acceptance Corp., 5.69%
due 3/02/1998 49,644,302 49,644,302 3.2
Total Investments in
Short-Term Securities 49,644,302 49,644,302 3.2
Total Investments $1,383,725,728 1,546,854,515 100.6
--------------
Liabilities in Excess of Other Assets (9,486,627) (0.6)
-------------- ------
Net Assets $1,537,367,888 100.0%
============== ======
<FN>
*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.
++Non-income producing security.
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Global Growth Fund, Inc., February 28, 1998
<TABLE>
STATEMENT OF ASSETS AND LIABILITIES
<CAPTION>
As of February 28, 1998
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$1,383,725,728) (Note 1a) $1,546,854,515
Foreign cash (Note 1b) 5,937,000
Receivables:
Capital shares sold $ 6,077,361
Dividends 1,269,937 7,347,298
--------------
Deferred organization expenses (Note 1f) 134,583
Prepaid registration fees and other assets (Note 1f) 426,917
--------------
Total assets 1,560,700,313
--------------
<PAGE>
Liabilities: Payables:
Securities purchased 19,291,724
Capital shares redeemed 1,546,936
Distributor (Note 2) 984,573
Investment adviser (Note 2) 840,495 22,663,728
--------------
Accrued expenses and other liabilities 668,697
--------------
Total liabilities 23,332,425
--------------
Net Assets: Net assets $1,537,367,888
==============
Net Assets Class A Shares of Common Stock, $0.10 par value,
Consist of: 100,000,000 shares authorized $ 357,108
Class B Shares of Common Stock, $0.10 par value,
300,000,000 shares authorized 9,697,050
Class C Shares of Common Stock, $0.10 par value,
100,000,000 shares authorized 1,933,981
Class D Shares of Common Stock, $0.10 par value,
100,000,000 shares authorized 1,751,586
Paid-in capital in excess of par 1,361,381,122
Undistributed investment income--net 254,797
Accumulated realized capital losses on investments and
foreign currency transactions--net (1,069,748)
Unrealized appreciation on investments and foreign
currency transactions--net 163,061,992
--------------
Net assets $1,537,367,888
==============
Net Asset Class A--Based on net assets of $40,076,341 and
Value: 3,571,077 shares outstanding $ 11.22
==============
Class B--Based on net assets of $1,084,580,104 and
96,970,497 shares outstanding $ 11.18
==============
Class C--Based on net assets of $216,305,485 and
19,339,810 shares outstanding $ 11.18
==============
Class D--Based on net assets of $196,405,958 and
17,515,861 shares outstanding $ 11.21
==============
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF OPERATIONS
<CAPTION>
For the Period October 31, 1997++ to February 28, 1998
<S> <S> <C> <C>
Investment Dividends (net of $288,956 foreign withholding tax) $ 4,871,279
Income Interest and discount earned 3,507,011
(Notes 1d & 1e): ------------
Total income 8,378,290
------------
Expenses: Investment advisory fees (Note 2) 3,299,323
Account maintenance and distribution fees--Class B (Note 2) 3,096,359
Account maintenance and distribution fees--Class C (Note 2) 623,740
Transfer agent fees--Class B (Note 2) 337,312
Registration fees (Note 1f) 257,755
Account maintenance fees--Class D (Note 2) 142,432
Custodian fees 104,466
Transfer agent fees--Class C (Note 2) 70,517
Transfer agent fees--Class D (Note 2) 50,793
Printing and shareholder reports 47,706
Accounting services (Note 2) 44,921
Directors' fees and expenses 16,506
Transfer agent fees--Class A (Note 2) 9,750
Professional fees 9,402
Amortization of organization expenses--net (Note 1f) 9,373
Pricing fees 1,741
Other 1,397
------------
Total expenses 8,123,493
------------
Investment income--net 254,797
------------
Realized & Realized gain (loss) from:
Unrealized Gain Investments--net $ 152,240
(Loss) on Foreign currency transactions--net (1,221,988) (1,069,748)
Investments & ------------
Foreign Currency Unrealized appreciation/depreciation on:
Transactions--Net Investments--net 163,128,787
(Notes 1b, 1c, Foreign currency transactions--net (66,795) 163,061,992
1e & 3): ------------ ------------
Net realized and unrealized gain on investments
and foreign currency transactions 161,992,244
------------
Net Increase in Net Assets Resulting from Operations $162,247,041
============
<FN>
++Commencement of operations.
See Notes to Financial Statements.
</TABLE>
<PAGE>
Merrill Lynch Global Growth Fund, Inc., February 28, 1998
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<CAPTION>
For the Period
October 31, 1997++ to
Increase (Decrease) in Net Assets: February 28, 1998
<S> <S> <C>
Operations: Investment income--net $ 254,797
Realized loss on investments and foreign currency transactions--net (1,069,748)
Unrealized appreciation on investments and foreign currency transactions--net 163,061,992
--------------
Net increase in net assets resulting from operations 162,247,041
--------------
Capital Share Net increase in net assets derived from capital share transactions 1,375,020,847
Transactions --------------
(Note 4):
Net Assets: Total increase in net assets 1,537,267,888
Beginning of period 100,000
--------------
End of period* $1,537,367,888
==============
<FN>
*Undistributed investment income--net $ 254,797
==============
++Commencement of operations.
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
<CAPTION>
The following per share data and ratios
have been derived from information
provided in the financial statements. For the Period
October 31, 1997++ to February 28, 1998
Increase (Decrease) in Net Asset Value: Class A Class B Class C Class D
<S> <S> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 10.00 $ 10.00 $ 10.00 $ 10.00
Operating ---------- ---------- ---------- ----------
Performance: Investment income--net .03 .00++++ .00++++ .02
Realized and unrealized gain on
investments and foreign currency
transactions--net 1.19 1.18 1.18 1.19
---------- ---------- ---------- ----------
Total from investment operations 1.22 1.18 1.18 1.21
---------- ---------- ---------- ----------
Net asset value, end of period $ 11.22 $ 11.18 $ 11.18 $ 11.21
========== ========== ========== ==========
Total Investment Based on net asset value per share 12.20%+++ 11.80%+++ 11.80%+++ 12.10%+++
Return:** ========== ========== ========== ==========
Ratios to Average Expenses .95%* 1.97%* 1.98%* 1.20%*
Net Assets: ========== ========== ========== ==========
Investment income (loss)--net .96%* (.07%)* (.07%)* .70%*
========== ========== ========== ==========
Supplemental Net assets, end of period (in thousands) $ 40,076 $1,084,580 $ 216,306 $ 196,406
Data: ========== ========== ========== ==========
Portfolio turnover 14.61% 14.61% 14.61% 14.61%
========== ========== ========== ==========
Average commission rate paid++++++ $ .0257 $ .0257 $ .0257 $ .0257
========== ========== ========== ==========
<FN>
*Annualized.
**Total investment return excludes the effects of sales loads.
+++Aggregate total investment return.
See Notes to Financial Statements.
++Commencement of operations.
++++Amount is less than $(.01) per share.
++++++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>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
Merrill Lynch Global Growth Fund, Inc. (the "Fund") is registered
under the Investment Company Act of 1940 as a diversified, open-end
management investment company. Prior to commencement of operations
on October 31, 1997, 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. These unaudited financial statements reflect all
adjustments which are, in the opinion of management, necessary to a
fair statement of the results for the interim period presented. All
such adjustments are of a normal recurring nature. 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 investments--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 futures contracts and
related options, are stated at market value. Securities and assets
for which market quotations are not available are valued at fair
value as determined in good faith by or under the direction of the
Fund's Board of Directors.
<PAGE>
Merrill Lynch Global Growth Fund, Inc., February 28, 1998
NOTES TO FINANCIAL STATEMENTS (continued)
(b) 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.
(c) 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. Premium or discount is amortized over the life of the
contracts.
<PAGE>
* 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
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.
(d) 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.
(e) 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.
(f) 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.
(g) Dividends and distributions--Dividends and distributions paid by
the Fund are recorded on the ex-dividend dates.
<PAGE>
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.
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 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 distribution
fee compensates the Distributor and MLPF&S for providing shareholder
and distribution-related services to Class B and Class C
shareholders.
For the period October 31, 1997 to February 28, 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 $ 1 $ 20
Class D $30,242 $5,403,546
<PAGE>
For the period October 31, 1997 to February 28, 1998, MLPF&S
received contingent deferred sales charges of $411,085 and $43,181
relating to transactions in Class B and Class C Shares,
respectively.
In addition, MLPF&S received $40,473 in commissions on the execution
of portfolio security transactions for the Fund for the period
October 31, 1997 to February 28, 1998.
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.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the period October 31, 1997 to February 28, 1998 were
$1,487,740,656 and $153,811,470, respectively.
Net realized gains (losses) for the period October 31, 1997 to
February 28, 1998 and net unrealized gains (losses) as of February
28, 1998 were as follows:
Realized Unrealized
Gains Gains
(Losses) (Losses)
Long-term investments $ 152,240 $163,128,787
Foreign currency transactions (1,221,988) (66,795)
----------- ------------
Total $(1,069,748) $163,061,992
=========== ============
As of February 28, 1998, net unrealized appreciation for Federal
income tax purposes aggregated $163,128,787, of which $188,592,782
related to appreciated securities and $25,463,995 related to
depreciated securities. At February 28, 1998, the aggregate cost of
investments for Federal income tax purposes was $1,383,725,728.
Merrill Lynch Global Growth Fund, Inc., February 28, 1998
NOTES TO FINANCIAL STATEMENTS (concluded)
<PAGE>
4. Capital Share Transactions:
Net increase in net assets derived from capital share transactions
was $1,375,020,847 for the period October 31, 1997 to February 28,
1998.
Transactions in capital shares for each class were as follows:
Class A Shares for the Period Dollar
October 31, 1997++ to February 28, 1998 Shares Amount
Shares sold 3,871,610 $ 39,000,585
Shares redeemed (303,033) (3,105,440)
------------ -------------
Net increase 3,568,577 $ 35,895,145
============ =============
[FN]
++Prior to October 31, 1997 (commencement of operations), the Fund
issued 2,500 shares to MLAM for $25,000.
Class B Shares for the Period Dollar
October 31, 1997++ to February 28, 1998 Shares Amount
Shares sold 100,914,200 $1,009,957,399
Automatic conversion of shares (45,127) (444,445)
Shares redeemed (3,901,076) (39,278,253)
------------ --------------
Net increase 96,967,997 $ 970,234,701
============ ==============
[FN]
++Prior to October 31, 1997 (commencement of operations), the Fund
issued 2,500 shares to MLAM for $25,000.
Class C Shares for the Period Dollar
October 31, 1997++ to February 28, 1998 Shares Amount
Shares sold 20,516,032 $ 205,431,092
Shares redeemed (1,178,722) (11,919,392)
------------ -------------
Net increase 19,337,310 $ 193,511,700
============ =============
[FN]
++Prior to October 31, 1997 (commencement of operations), the Fund
issued 2,500 shares to MLAM for $25,000.
<PAGE>
Class D Shares for the Period Dollar
October 31, 1997++ to February 28, 1998 Shares Amount
Shares sold 18,955,365 $ 189,856,729
Automatic conversion of shares 45,078 444,445
------------ -------------
Total issued 19,000,443 190,301,174
Shares redeemed (1,487,082) (14,921,873)
------------ -------------
Net increase 17,513,361 $ 175,379,301
============ =============
[FN]
++Prior to October 31, 1997 (commencement of operations), the Fund
issued 2,500 shares to MLAM for $25,000.
5. Commitments:
At February 28, 1998, the Fund had entered into foreign exchange
contracts under which it had agreed to purchase foreign currency
with an approximate value of $14,941,000.
