MERRILL LYNCH
GLOBAL GROWTH
FUND, INC.
FUND LOGO
Semi-Annual Report
February 28, 1999
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 Growth Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
Printed on post-consumer recycled paper
MERRILL LYNCH GLOBAL GROWTH FUND, INC.
Worldwide
Investments as of
February 28, 1999
Percent of
Ten Largest Industries Net Assets
Banking & Financial 17.4%
Telecommunications 15.5
Insurance 10.3
Pharmaceuticals 9.4
Retail Stores 4.5
Specialty Retailing 4.1
Communications Equipment 3.6
Software--Computer 2.7
Household Products 2.6
Computers 2.3
Country of Percent of
Ten Largest Equity Holdings Origin Net Assets
Cisco Systems, Inc. United States 2.9%
COLT Telecom Group PLC United Kingdom 2.4
Pfizer Inc. United States 2.2
Vodafone Group PLC United Kingdom 2.1
General Electric Company United States 1.9
Bristol-Myers Squibb Company United States 1.8
AEGON NV Netherlands 1.8
SAP AG (Systeme, Anwendungen,
Produkte in der Datenverar-
beitung)(Preferred) Germany 1.8
National Westminster Bank PLC United Kingdom 1.8
Lloyds TSB Group PLC United Kingdom 1.5
Officers and
Directors
Terry K. Glenn, President and Director
Donald Cecil, Director
M. Colyer Crum, Director
Edward H. Meyer, Director
Jack B. Sunderland, Director
J. Thomas Touchton, Director
Fred G. Weiss, Director
Arthur Zeikel, Director
Lawrence R. Fuller, Senior Vice President and
Portfolio Manager
Donald C. Burke, Vice President and Treasurer
Philip M. Mandel, Secretary
Gerald M. Richard, Treasurer and Norman R. Harvey, Senior Vice
President of Merrill Lynch Global Growth Fund, Inc. have recently
retired. Their colleagues at Merrill Lynch Asset Management, L.P.
join the Fund's Board of Directors in wishing Mr. Richard and Mr.
Harvey well in their retirements.
Custodian
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02101
Transfer Agent
Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 637-3863
Merrill Lynch Global Growth Fund, Inc., February 28, 1999
DEAR SHAREHOLDER
For the quarter ended February 28, 1999, total returns for Merrill
Lynch Global Growth Fund, Inc.'s Class A, Class B, Class C and Class
D Shares were +7.89%, +7.65%, +7.61% and +7.80%, respectively. The
unmanaged Morgan Stanley Capital International (MSCI) World Stock
Index for the same three-month period had a total return of +4.29%.
(Results shown do not reflect sales charges and would be lower if
sales charges were included.)
The Fund's outperformance relative to the unmanaged MSCI World Stock
Index during the quarter ended February 28, 1999 reflected positive
investment returns on equity investments in the telecommunications,
retailing and banking industries. Also, among the top ten equity
holdings in the Fund at the end of the February quarter, seven had
positive returns that were well in excess of the total investment
return for the unmanaged MSCI World Stock Index. For the 12 months
ended February 28, 1999, Merrill Lynch Global Growth Fund, Inc.'s
Class A, Class B, Class C and Class D Shares had total returns of
+19.05%, +17.85%, +17.82% and +18.77%, respectively, compared to a
+12.71% return for the unmanaged MSCI World Stock Index.
During the February quarter, a majority of the Fund's individual
stock investments appreciated more than the total return for the
MSCI World Stock Index. The top two industry allocations and
principal contributors to the positive returns of the Fund during
the quarter were banking and financial (17.5% of net assets) and
telecommunications (15.5%).
The Environment
As we had anticipated at the beginning of the February quarter, the
US economy appears to have experienced the strongest absolute and
relative real economic growth among the leading industrialized
nations at the start of 1999. US corporate profits were above year-
ago levels in the fourth quarter of 1998. Although the recent
increase in US long-term interest rates appears to be reducing the
volume of residential mortgage financing and may decrease the level
of consumer spending on housing and related appliances, the growth
in real and nominal consumer spending during the remainder of 1999
may continue to be the strongest part of the US economy.
The recent economic reports for the United Kingdom and the leading
countries of Western Europe support our view that it is increasingly
likely that these economies will slide into a recession during the
first half of 1999. The official government reports from Germany
show that its economy experienced an absolute decline in business
activity during the fourth quarter of 1998. The apparent
continuation of declining export shipments to Asia and the related
increases in manufacturing unemployment is hurting the overall
European economies more significantly than the US economy. The real
growth in consumer spending in the United States and market share
gains by producers of basic materials, technology components and
transportation vehicles in Asia have been reflected in recoveries in
business activity for exportproducers in many Asian countries. How-
ever, there does not appear to be a general recovery in consumer
spending in the major Asian economies. In Latin America, the
implementation of government spending cuts and collected tax
increases in Brazil has a good chance of reducing levels of business
activity in the major economies in the region.
Our expectations for a slowdown in the rates of real growth in the
United States and the other major economies around the world, at
least during the first half of 1999, led us to continue with a
strategy that focuses on the banking and financial,
telecommunications, insurance and pharmaceutical industries. The
total weighting in these industries was equal to over 50% of net
assets at the end of the February quarter. In our opinion, we could
have a prolonged manufacturing recession in the United States and
Europe comparable to the one experienced during the early 1980s.
However, we believe that there are many attractive investment
opportunities among companies in industries where proprietary and
branded products and services make the investment outlook
attractive. Relatively low inflation and interest rates in the
United States, along with continued growth in employment in the
service sectors, creates an opportunity for higher corporate
profits. A continuation of easier money policies by the central
banks around the world, combined with more stimulative fiscal
policies in the form of individual income tax reductions, would
create an attractive secular outlook for equities, in our opinion.
Investment Strategy
Throughout the February quarter, we remained focused on companies
and industries whose earnings will continue to increase during a
major slowdown in the overall rate of growth in real and nominal
business activity in the major industrialized economies. During the
February quarter, we eliminated three investment holdings. We sold
our investment in Federated Department Stores, Inc. when its
management announced the decision to acquire Fingerhut Companies,
Inc. We do not believe that this strategic action will provide any
improvement in gross margins or enhance the marketing strategies of
Federated's operations. Momentum Business Applications, Inc., a
computer software research and development organization, was created
by PeopleSoft, Inc. and distributed to its shareholders. We sold the
shares on the basis of our appraisal of the valuation. We also sold
Reuters Group PLC because of an increase in valuation as the shares
appreciated, apparently on the basis of the organization's
involvement in Internet commerce.
During the quarter ended February 28, 1999, we added several new
companies to the Fund. We purchased shares of Minnesota Mining and
Manufacturing Company (3M) because of its attractive valuation
relative to the prospects for an acceleration in growth of earnings
and improved rates-of-return as a result of a major corporate-wide
restructuring. We added Safeway Inc. because of its potential for
continued above-average growth in earnings and improved operational
returns from on-going restructuring of operations. We bought Energis
PLC for its potential above-average growth in cash flow and related
returns as the company's management proceeds to aggressively develop
their telecommunications businesses. We also added to our holdings
shares of T. Rowe Price Associates, Inc., one of the leading US
asset management organizations, to the Fund for what we believe are
attractive above-average growth prospects for earnings. The addition
of Sprint Corporation PCS Group was the result of a distribution of
shares in the wireless communications business to Sprint
shareholders. We believe that the growth prospects for Sprint PCS in
their wireless telecommunications business are excellent. We added
to the holdings created by the distribution shortly after the shares
started to trade publicly. We also added The TJX Companies, Inc., a
US-based discount retailer, to the Fund because of its attractive
valuation and the prospect for above-average earnings growth as a
result of management's restructuring of the retail formats of the
organization.
During the February quarter, we significantly reduced the Fund's
investment weighting in several of the largest holdings in the
technology sector and retailing industry in the United States as a
result of relatively high stock valuations. We shifted the proceeds
into companies within the banking, telecommunications and
pharmaceutical industries.
In Conclusion
We continue to believe that the US equity market will produce the
best relative investment performance among the major global stock
markets during 1999. We remain committed to our strategy of
maintaining relatively modest cash reserves for the Fund. In our
opinion, the turbulent investment environment is likely to persist.
Looking ahead, we will focus our investments on the larger, higher-
quality companies that we believe possess above-average earnings
potential and cash flow growth.
Sincerely,
(Terry K. Glenn)
Terry K. Glenn
President and Director
(Lawrence R. Fuller)
Lawrence R. Fuller
Senior Vice President and
Portfolio Manager
March 31, 1999
After more than 20 years of service, Arthur Zeikel recently retired
as Chairman of Merrill Lynch Asset Management, L.P. (MLAM). Mr.
Zeikel served as President of MLAM from 1977 to 1997 and as Chairman
since December 1997. Mr. Zeikel is one of the country's most
respected leaders in asset management and presided over the growth
of Merrill Lynch's asset management business. During his tenure,
client assets under management grew from $300 million to over $500
billion. Mr. Zeikel will remain on Merrill Lynch Global Growth Fund,
Inc.'s Board of Directors. We are pleased to announce that Terry K.
Glenn has been elected President and Director of the Fund. Mr. Glenn
has held the position of Executive Vice President of MLAM since
1983.
Mr. Zeikel's colleagues at MLAM join the Fund's Board of Directors
in wishing him well in his retirement from Merrill Lynch and are
pleased that he will continue as a member of the Fund's Board of
Directors.
Merrill Lynch Global Growth Fund, Inc., February 28, 1999
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.
<TABLE>
Recent
Performance
Results*
<CAPTION>
3 Month 12 Month Since Inception
Total Return Total Return Total Return
<S> <C> <C> <C>
ML Global Growth Fund, Inc. Class A Shares +7.89% +19.05% +33.57%
ML Global Growth Fund, Inc. Class B Shares +7.65 +17.85 +31.76
ML Global Growth Fund, Inc. Class C Shares +7.61 +17.82 +31.72
ML Global Growth Fund, Inc. Class D Shares +7.80 +18.77 +33.14
<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 10/31/97.
</TABLE>
Average Annual
Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 12/31/98 +32.31% +25.37%
Inception (10/31/97) through 12/31/98 +27.22 +21.48
[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 +31.08% +27.08%
Inception (10/31/97) through 12/31/98 +25.99 +23.51
[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 +31.04% +30.04%
Inception (10/31/97) through 12/31/98 +25.96 +25.96
[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 +31.98% +25.05%
Inception (10/31/97) through 12/31/98 +26.95 +21.22
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
<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 $ 15,691,542 0.7%
1,000,000 Canadian Imperial
Bank of Commerce 28,768,815 23,582,090 1.0
500,000 National Bank of Canada 7,419,127 6,965,174 0.3
300,000 Royal Bank of Canada 16,480,599 14,527,363 0.6
-------------- -------------- ------
70,412,821 60,766,169 2.6
Communications 25,000 ++Newbridge Networks
Equipment Corporation 972,021 607,794 0.0
20,000 Northern Telecom Ltd. 957,137 1,164,842 0.1
-------------- -------------- ------
1,929,158 1,772,636 0.1
Telecommunications 350,000 ++MetroNet Communications
Corp. 'B' 10,722,390 15,181,250 0.6
Total Investments in Canada 83,064,369 77,720,055 3.3
United Advertising 135,000 The Interpublic Group of
States Companies, Inc. 7,857,120 10,099,687 0.4
Banking & 550,000 Bank One Corporation 27,513,635 29,562,500 1.2
Financial 500,000 BankAmerica Corporation 33,706,442 32,656,250 1.4
465,000 Citigroup Inc. 26,194,525 27,318,750 1.2
300,000 Mellon Bank Corporation 18,553,318 20,287,500 0.9
155,100 State Street Corporation 8,959,526 11,894,231 0.5
-------------- -------------- ------
114,927,446 121,719,231 5.2
Beverages 275,000 The Coca-Cola Company 22,543,677 17,582,812 0.8
Broadcast--Media 300,000 ++Infinity Broadcasting Corp.
(Class A) 6,563,160 7,125,000 0.3
Broadcasting--Radio & 150,000 ++CBS Corporation 3,783,358 5,531,250 0.2
Television 230,000 ++Chancellor Media Corporation 10,540,018 10,062,500 0.4
290,000 ++Clear Channel
Communications, Inc. 12,790,695 17,400,000 0.8
-------------- -------------- ------
27,114,071 32,993,750 1.4
</TABLE>
Merrill Lynch Global Growth Fund, Inc., February 28, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
NORTH AMERICA Shares Value Percent of
(continued) Industries Held Investments Cost (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C>
United Chemicals 420,000 E.I. du Pont de Nemours
States and Company $ 26,874,407 $ 21,551,250 0.9%
(continued)
Communications 705,000 ++Cisco Systems, Inc. 31,682,031 68,957,812 2.9
Equipment 50,000 ++FORE Systems, Inc. 858,380 725,000 0.1
30,000 Lucent Technologies Inc. 1,284,023 3,046,875 0.1
-------------- -------------- ------
33,824,434 72,729,687 3.1
Computers 449,000 Compaq Computer Corporation 15,798,075 15,827,250 0.7
50,000 ++Dell Computer Corporation 2,533,570 4,003,125 0.2
120,000 International Business
Machines Corporation 22,477,500 20,400,000 0.9
50,000 ++Network Appliance, Inc. 1,614,858 2,100,000 0.1
-------------- -------------- ------
42,424,003 42,330,375 1.9
Cosmetics 110,000 The Gillette Company 5,031,796 5,898,750 0.3
20,000 International Flavors &
Fragrances Inc. 968,044 823,750 0.0
-------------- -------------- ------
5,999,840 6,722,500 0.3
Diversified 300,000 Minnesota Mining and
Manufacturing Company(3M) 23,030,109 22,218,750 0.9
Electrical Equipment 35,000 Emerson Electric Co. 1,975,074 2,010,312 0.1
452,000 General Electric Company 35,500,835 45,341,250 1.9
10,000 Honeywell Inc. 710,689 699,375 0.0
-------------- -------------- ------
38,186,598 48,050,937 2.0
Electronics 85,000 Intel Corporation 7,378,145 10,194,687 0.4
10,000 Texas Instruments
Incorporated 599,435 891,875 0.0
-------------- -------------- ------
7,977,580 11,086,562 0.4
Energy 250,000 El Paso Energy Corporation 8,705,541 9,109,375 0.4
30,000 Enron Corporation 1,153,386 1,950,000 0.1
-------------- -------------- ------
9,858,927 11,059,375 0.5
Entertainment 35,000 ++Viacom, Inc. (Class B) 1,088,787 3,093,125 0.1
450,000 The Walt Disney Company 14,343,318 15,834,375 0.7
-------------- -------------- ------
15,432,105 18,927,500 0.8
Financial Services 40,000 American Express Company 3,224,880 4,340,000 0.2
80,000 Federal Home Loan Mortgage
Association 4,690,648 4,710,000 0.2
300,000 Federal National Mortgage
Association 19,692,653 21,000,000 0.9
100,000 Franklin Resources, Inc. 5,500,811 3,181,250 0.1
100,000 Morgan Stanley Dean
Witter & Co. 6,021,422 9,050,000 0.4
30,000 T. Rowe Price
Associates, Inc. 1,129,449 920,625 0.0
-------------- -------------- ------
40,259,863 43,201,875 1.8
Food Merchandising 40,000 Albertson's, Inc. 1,564,107 2,280,000 0.1
50,000 ++Fred Meyer, Inc. 1,566,135 3,212,500 0.1
65,000 ++Safeway Inc. 3,562,982 3,753,750 0.2
-------------- -------------- ------
6,693,224 9,246,250 0.4
Foods 40,000 ConAgra, Inc. 1,360,116 1,205,000 0.1
35,000 Wm. Wrigley Jr. Company 2,610,412 3,255,000 0.1
-------------- -------------- ------
3,970,528 4,460,000 0.2
Home Furnishings 175,000 Ethan Allen Interiors, Inc. 8,275,521 7,875,000 0.3
Hotels 125,000 Marriott International,
Inc. (Class A) 4,268,224 4,500,000 0.2
Household Products 20,000 Colgate-Palmolive Company 1,307,624 1,697,500 0.1
230,000 Kimberly-Clark Corporation 11,691,857 10,867,500 0.5
160,000 The Procter & Gamble Company 12,828,674 14,320,000 0.6
-------------- -------------- ------
25,828,155 26,885,000 1.2
Information Processing 260,000 ++America Online, Inc. 7,573,834 23,123,750 1.0
155,000 First Data Corporation 4,599,284 5,928,750 0.3
-------------- -------------- ------
12,173,118 29,052,500 1.3
Insurance 100,000 Aetna Inc. 8,245,785 7,406,250 0.3
140,000 American International
Group, Inc. 9,992,181 15,951,250 0.7
-------------- -------------- ------
18,237,966 23,357,500 1.0
Medical Technology 181,900 ++Boston Scientific
Corporation 4,705,934 4,820,350 0.2
40,000 Guidant Corporation 1,258,388 2,280,000 0.1
25,000 Johnson & Johnson 1,503,390 2,134,375 0.1
-------------- -------------- ------
7,467,712 9,234,725 0.4
Oil Services 50,000 Baker Hughes Incorporated 2,319,315 900,000 0.0
25,000 Diamond Offshore
Drilling, Inc. 998,688 517,187 0.0
18,000 Schlumberger Limited 1,682,222 874,125 0.0
-------------- -------------- ------
5,000,225 2,291,312 0.0
Pharmaceuticals 25,000 ++Amgen Inc. 1,328,783 3,121,875 0.1
340,000 Bristol-Myers Squibb Company 38,970,523 42,818,750 1.8
300,000 Merck & Co., Inc. 14,783,287 24,525,000 1.0
400,000 Pfizer Inc. 37,659,850 52,775,000 2.2
-------------- -------------- ------
92,742,443 123,240,625 5.1
Photography 13,000 Eastman Kodak Company 815,032 860,437 0.0
Pollution Control 14,500 Waste Management, Inc. 505,400 708,688 0.0
Publishing 140,000 Gannett Co., Inc. 9,998,409 8,890,000 0.4
Restaurants 50,000 McDonald's Corporation 2,743,040 4,250,000 0.2
Retail Stores 100,000 The TJX Companies, Inc. 2,973,210 2,856,250 0.1
250,000 Wal-Mart Stores, Inc. 15,201,661 21,593,750 0.9
-------------- -------------- ------
18,174,871 24,450,000 1.0
Semiconductors 60,000 ++Applied Materials, Inc. 1,820,628 3,337,500 0.2
Software--Computer 120,000 ++Microsoft Corporation 12,796,116 18,007,500 0.8
175,000 ++PeopleSoft, Inc. 7,408,555 3,303,125 0.1
-------------- -------------- ------
20,204,671 21,310,625 0.9
</TABLE>
Merrill Lynch Global Growth Fund, Inc., February 28, 1999
<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 Specialty Retailing 100,000 ++Abercrombie & Fitch Co.
States (Class A) $ 5,070,389 $ 7,600,000 0.3%
(concluded) 400,000 CVS Corporation 14,726,207 21,200,000 0.9
90,000 The Gap, Inc. 3,913,752 5,821,875 0.2
252,800 Lowe's Companies, Inc. 12,845,503 14,994,200 0.6
754,100 ++Staples, Inc. 13,615,190 22,104,556 0.9
50,000 ++Tommy Hilfiger Corporation 2,700,735 3,453,125 0.2
730,000 Walgreen Co. 17,805,449 23,360,000 1.0
-------------- -------------- ------
70,677,225 98,533,756 4.1
Telecommunications 390,000 ++AT&T Corp. 30,129,442 32,028,750 1.4
145,000 Ameritech Corporation 8,281,556 9,479,375 0.4
500,000 GTE Corporation 28,881,847 32,437,500 1.4
325,000 ++MCI WorldCom Inc. 15,203,420 26,812,500 1.1
45,000 ++Nextel Communications,
Inc. (Class A) 1,019,049 1,352,813 0.1
425,000 ++Sprint Corp. (PCS Group) 7,340,803 13,600,000 0.6
390,000 Sprint Corporation 23,856,129 33,466,875 1.4
-------------- -------------- ------
114,712,246 149,177,813 6.4
Toys 200,000 Mattel, Inc. 7,823,472 5,275,000 0.2
Travel & Lodging 370,000 Carnival Corporation 12,306,515 16,465,000 0.7
Total Investments in the
United States 867,311,965 1,060,801,022 44.9
Total Investments in
North America 950,376,334 1,138,521,077 48.2
PACIFIC
BASIN
Australia Telecommunications 3,000,000 ++Cable & Wireless Optus
Limited 6,302,269 6,590,772 0.3
Total Investments in
Australia 6,302,269 6,590,772 0.3
Japan Automobiles 480,000 Honda Motor Co., Ltd. 17,468,820 18,492,666 0.8
500,000 Toyota Motor Corporation 13,656,899 13,066,936 0.5
-------------- -------------- ------
31,125,719 31,559,602 1.3
Computers 700,000 Fujitsu Limited 7,951,104 8,733,772 0.4
Leisure 20,000 Sony Corporation 1,813,988 1,514,079 0.1
Office Equipment 25,000 Canon, Inc. 561,859 535,323 0.0
Photography 50,000 Fuji Photo Film 1,994,128 1,837,801 0.1
Retail 250,000 Ito-Yokado Co., Ltd. 13,794,985 14,584,387 0.6
Telecommunications 3,000 Nippon Telegraph & Telephone
Corporation (NTT) 26,362,868 24,734,446 1.0
Total Investments in Japan 83,604,651 83,499,410 3.5
Total Investments in the
Pacific Basin 89,906,920 90,090,182 3.8
WESTERN
EUROPE
Denmark Telecommunications 150,000 TeleDanmark A/S 'B' 11,610,765 18,031,455 0.8
Total Investments in Denmark 11,610,765 18,031,455 0.8
Finland Communications 60,000 Nokia Oyj 'A' 2,745,757 8,176,767 0.3
Equipment
Total Investments in Finland 2,745,757 8,176,767 0.3
France Broadcasting & 10,000 Societe Television
Publishing Francaise 1 1,820,322 1,789,251 0.1
Cosmetics 5,000 L'Oreal SA 1,869,813 3,073,560 0.1
Electrical Equipment 25,000 ++Alstom 852,037 683,318 0.0
Electronics 25,000 ++STMicroelectronics NV 2,254,859 2,226,959 0.1
Foods 20,000 Danone 4,591,628 4,981,363 0.2
5,000 Promodes SA 2,986,130 3,186,074 0.1
-------------- -------------- ------
7,577,758 8,167,437 0.3
Information Processing 50,000 Cap Gemini SA 4,425,728 8,644,388 0.4
Insurance 172,000 Axa 12,635,306 22,429,963 1.0
Pharmaceuticals 50,000 Rhone-Poulenc SA 2,419,376 2,291,449 0.1
Retail Stores 15,000 Carrefour SA 9,213,261 10,686,110 0.4
Total Investments in France 43,068,460 59,992,435 2.5
Germany Apparel 50,000 Adidas-Salomon AG 8,340,102 4,785,972 0.2
Automobiles 201,000 DaimlerChrysler AG 19,112,541 18,787,300 0.8
Banking & Financial 600,000 Commerzbank AG 21,297,933 16,860,672 0.7
350,000 Deutsche Bank AG 23,047,332 18,268,472 0.8
525,000 Dresdner Bank AG 22,202,477 18,268,472 0.8
-------------- -------------- ------
66,547,742 53,397,616 2.3
Chemicals 150,000 BASF AG 5,213,865 5,194,865 0.2
150,000 Bayer AG 5,341,904 5,310,124 0.2
300,000 Hoechst AG 14,182,600 14,143,865 0.6
-------------- -------------- ------
24,738,369 24,648,854 1.0
Electronics 300,000 Siemens AG 20,165,738 18,935,325 0.8
Insurance 70,000 Allianz AG (Registered
Shares) 18,352,298 21,215,248 0.9
Multi-Industry 80,000 Mannesmann AG 7,163,790 10,739,897 0.5
175,000 VEBA AG 11,173,578 9,335,939 0.4
-------------- -------------- ------
18,337,368 20,075,836 0.9
Retail Stores 250,000 Metro AG 11,962,548 17,672,970 0.7
Software--Computer 110,000 SAP AG (Systeme,
Anwendungen, Produkte in
der Datenverarbeitung)
(Preferred) 34,118,327 41,536,968 1.8
Total Investments in Germany 221,675,033 221,056,089 9.4
</TABLE>
Merrill Lynch Global Growth Fund, Inc., February 28, 1999
<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 & Financial 1,300,000 Allied Irish Banks PLC $ 13,137,895 $ 22,530,919 1.0%
Telecommunications 100,000 ++Esat Telecom Group
PLC (ADR)* 3,206,252 4,637,500 0.2
Total Investments in Ireland 16,344,147 27,168,419 1.2
Italy Banking & Financial 4,500,000 ++Banca di Roma 7,569,237 6,520,338 0.3
2,000,000 Unicredito Italiano SpA 9,830,384 10,515,966 0.4
-------------- -------------- ------
17,399,621 17,036,304 0.7
Insurance 550,000 Assicurazioni Generali 13,942,232 21,251,472 0.9
4,000,000 SpA Istituto Nazionale
delle Assicurazioni
SpA (INA) 6,507,926 9,703,668 0.4
-------------- -------------- ------
20,450,158 30,955,140 1.3
Real Estate 3,750,000 ++Unione Immobiliare SpA (a) 1,077,689 2,078,769 0.1
Investment Trust
Total Investments in Italy 38,927,468 50,070,213 2.1
Netherlands Household Products 250,000 Unilever NV 'A' 15,001,154 18,029,723 0.7
120,000 Unilever NV (NY Registered
Shares) 8,031,036 8,692,500 0.4
-------------- -------------- ------
23,032,190 26,722,223 1.1
Insurance 400,000 AEGON NV 21,905,046 41,756,508 1.8
300,000 ING Groep NV 13,600,442 16,794,810 0.7
-------------- -------------- ------
35,505,488 58,551,318 2.5
Leisure 30,000 Koninklijke (Royal)
Philips Electronics NV 2,942,792 2,091,119 0.1
Retail Stores 600,000 Koninklijke Ahold NV 17,678,413 23,051,700 1.0
Software--Computer 60,000 ++Baan Company, NV 2,240,629 572,999 0.0
Telecommunications 187,500 ++Equant NV 6,773,837 13,522,292 0.6
Total Investments in
the Netherlands 88,173,349 124,511,651 5.3
Spain Banking & Financial 600,000 Banco Bilbao Vizcaya, SA 10,292,072 8,884,784 0.4
275,000 Banco Santander, SA 6,347,551 5,463,802 0.2
Total Investments in Spain 16,639,623 14,348,586 0.6
Sweden Communications 50,000 Telefonaktiebolaget LM
Equipment Ericsson 'B' 998,239 1,322,203 0.1
Total Investments in Sweden 998,239 1,322,203 0.1
Switzerland Foods 12,000 Nestle SA (Registered
Shares) 20,005,700 22,653,230 1.0
Insurance 31,000 Zurich Allied AG 15,191,232 20,583,932 0.9
Pharmaceuticals 18,000 Novartis AG (Registered
Shares) 28,480,812 31,581,999 1.3
Total Investments in
Switzerland 63,677,744 74,819,161 3.2
United Banking & Financial 1,200,000 Barclays PLC 30,747,245 32,023,186 1.4
Kingdom 250,000 HSBC Holdings PLC 7,588,742 7,288,190 0.3
2,500,000 Lloyds TSB Group PLC 32,526,945 35,820,253 1.5
2,000,000 National Westminster
Bank PLC 32,517,060 41,390,512 1.8
-------------- -------------- ------
103,379,992 116,522,141 5.0
Broadcast--Media 1,300,000 British Sky Broadcasting
Group PLC ("BSkyB") 8,212,658 11,937,014 0.5
Chemicals 50,000 Imperial Chemical
Industries PLC 753,608 436,891 0.0
Electrical Equipment 150,000 BTR Siebe PLC 752,323 632,511 0.0
Household Products 750,000 Unilever PLC 5,692,608 7,208,100 0.3
Insurance 1,200,000 CGU PLC 17,278,173 17,674,261 0.7
2,500,000 Guardian Royal
Exchange PLC 14,020,735 14,165,919 0.6
4,000,000 Royal & Sun Alliance
Insurance Group PLC 36,932,864 33,797,980 1.4
-------------- -------------- ------
68,231,772 65,638,160 2.7
Pharmaceuticals 1,000,000 Glaxo Wellcome PLC 28,387,082 31,891,838 1.4
1,000,000 SmithKline Beecham PLC 11,359,894 14,079,822 0.6
500,000 Zeneca Group PLC 19,556,084 20,791,364 0.9
-------------- -------------- ------
59,303,060 66,763,024 2.9
Publishing 250,000 Pearson PLC 3,653,585 5,494,174 0.2
Retail Stores 750,000 Boots Company PLC 11,223,919 12,043,534 0.5
100,000 J Sainsbury PLC 847,793 577,449 0.0
1,499,200 Somerfield PLC 9,606,795 8,981,305 0.4
4,200,000 Tesco PLC 11,323,155 11,907,781 0.5
-------------- -------------- ------
33,001,662 33,510,069 1.4
Telecommunications 3,000,000 ++COLT Telecom Group PLC 13,265,802 55,622,505 2.4
1,250,000 Cable & Wireless PLC 16,911,329 17,089,204 0.7
400,000 ++Energis PLC 11,754,886 9,578,764 0.4
2,750,000 Vodafone Group PLC 21,969,857 50,436,678 2.1
-------------- -------------- ------
63,901,874 132,727,151 5.6
Total Investments in the
United Kingdom 346,883,142 440,869,235 18.6
Total Investments in
Western Europe 850,743,727 1,040,366,214 44.1
SHORT-TERM Face
SECURITIES Amount Issue
Commercial Paper** $51,000,000 Associates First Capital,
4.85% due 3/01/1999 50,986,258 50,986,258 2.1
58,762,000 General Motors Acceptance
Corp., 4.88% due 3/01/1999 58,746,069 58,746,069 2.5
Total Investments in
Short-Term Securities 109,732,327 109,732,327 4.6
Total Investments $2,000,759,308 2,378,709,800 100.7
==============
Liabilities in Excess of Other Assets (17,129,188) (0.7)
-------------- ------
Net Assets $2,361,580,612 100.0%
============== ======
<FN>
*American Depositary Receipts (ADR).
**Commercial Paper is traded on a discount basis; the interest rates
shown reflect the discount rates paid at the time of purchase by the
Fund.
++Non-income producing security.
(a)Unione Immobiliare SpA was a distribution from Istituto Nazionale
della Assicurazioni SpA (INA).
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Global Growth Fund, Inc., February 28, 1999
<TABLE>
STATEMENT OF ASSETS AND LIABILITIES
<CAPTION>
As of February 28, 1999
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$2,000,759,308) (Note 1a) $2,378,709,800
Foreign cash (Note 1b) 518,673
Cash 942,005
Receivables:
Capital shares sold $ 6,182,461
Dividends 4,162,075 10,344,536
-------------
Deferred organization expenses (Note 1f) 92,828
Prepaid registration fees and other assets (Note 1f) 258,492
--------------
Total assets 2,390,866,334
--------------
Liabilities: Payables:
Securities purchased 21,228,901
Capital shares redeemed 4,441,313
Distributor (Note 2) 1,550,420
Investment adviser (Note 2) 1,332,405 28,553,039
-------------
Accrued expenses and other liabilities 732,683
--------------
Total liabilities 29,285,722
--------------
Net Assets: Net assets $2,361,580,612
==============
Net Assets Class A Shares of Common Stock, $0.10 par value,
Consist of: 100,000,000 shares authorized $ 854,412
Class B Shares of Common Stock, $0.10 par value,
300,000,000 shares authorized 12,751,433
Class C Shares of Common Stock, $0.10 par value,
100,000,000 shares authorized 2,377,808
Class D Shares of Common Stock, $0.10 par value,
100,000,000 shares authorized 2,195,846
Paid-in capital in excess of par 1,916,869,374
Accumulated investment loss--net (10,407,686)
Undistributed realized capital gains on investments and
foreign currency transactions--net 59,081,522
Unrealized appreciation on investments and foreign currency
transactions--net 377,857,903
--------------
Net assets $2,361,580,612
==============
Net Asset Class A--Based on net assets of $111,637,453 and 8,544,122
shares outstanding $ 13.07
==============
Value: Class B--Based on net assets of $1,654,831,204 and 127,514,330
shares outstanding $ 12.98
==============
Class C--Based on net assets of $308,657,028 and 23,778,079
shares outstanding $ 12.98
==============
Class D--Based on net assets of $286,454,927 and 21,958,459
shares outstanding $ 13.05
==============
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENT OF OPERATIONS
<CAPTION>
For the Six Months Ended February 28, 1999
<S> <S> <C> <C>
Investment Dividends (net of $443,072 foreign withholding tax) $ 7,907,090
Income Interest and discount earned 1,369,065
(Notes 1d & 1e): Other 82,187
------------
Total income 9,358,342
------------
Expenses: Investment advisory fees (Note 2) $ 7,425,666
Account maintenance and distribution fees--Class B (Note 2) 7,005,279
Account maintenance and distribution fees--Class C (Note 2) 1,352,518
Transfer agent fees--Class B (Note 2) 786,382
Account maintenance fees--Class D (Note 2) 296,655
Custodian fees 220,302
Transfer agent fees--Class C (Note 2) 161,525
Transfer agent fees--Class D (Note 2) 108,978
Printing and shareholder reports 99,358
Accounting services (Note 2) 63,874
Professional fees 50,070
Registration fees (Note 1f) 42,882
Transfer agent fees--Class A (Note 2) 40,777
Directors' fees and expenses 23,814
Amortization of organization expenses--net (Note 1f) 10,733
Pricing fees 2,782
Other 27,065
-------------
Total expenses 17,718,660
------------
Investment loss--net (8,360,318)
------------
Realized & Realized gain from:
Unrealized Gain Investments--net 58,742,987
(Loss) on Foreign currency transactions--net 374,723 59,117,710
Investments & -------------
Foreign Currency Change in unrealized appreciation/depreciation on:
Transactions--Net Investments--net 361,634,075
(Notes 1b, 1c, Foreign currency transactions--net (386,563) 361,247,512
1e & 3): ------------- ------------
Net realized and unrealized gain on investments and
foreign currency transactions 420,365,222
------------
Net Increase in Net Assets Resulting from Operations $412,004,904
============
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Global Growth Fund, Inc., February 28, 1999
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<CAPTION>
For the Six For the Period
Months Ended October 31, 1997++
February 28, to August 31,
Increase (Decrease) in Net Assets: 1999 1998
<S> <S> <C> <C>
Operations: Investment income (loss)--net $ (8,360,318) $ 2,377,734
Realized gain on investments and foreign
currency transactions--net 59,117,710 27,724,171
Change in unrealized appreciation/depreciation on
investments and foreign currency transactions--net 361,247,512 16,610,391
-------------- --------------
Net increase in net assets resulting from operations 412,004,904 46,712,296
-------------- --------------
Dividends & Investment income--net:
Distributions to Class A (637,843) --
Shareholders Class B (442,017) --
(Note 1g): Class C -- --
Class D (1,298,285) --
Realized gain on investments--net:
Class A (1,299,337) --
Class B (20,963,417) --
Class C (4,032,145) --
Class D (3,512,417) --
-------------- --------------
Net decrease in net assets resulting from dividends and
distributions to shareholders (32,185,461) --
-------------- --------------
Capital Share Net increase in net assets derived from capital
Transactions share transactions 178,625,457 1,756,323,416
(Note 4): -------------- --------------
Net Assets: Total increase in net assets 558,444,900 1,803,035,712
Beginning of period 1,803,135,712 100,000
-------------- --------------
End of period* $2,361,580,612 $1,803,135,712
============== ==============
<FN>
*Undistributed (accumulated) investment income (loss)--net $ (10,407,686) $ 330,777
============== ==============
++Commencement of operations.
See Notes to Financial Statements.
</TABLE>
<TABLE>
FINANCIAL HIGHLIGHTS
<CAPTION>
Class A Class B
The following per share data and ratios have been derived For the Six For the Period For the Six For the Period
from information provided in the financial statements. Months Ended Oct. 31, 1997++ Months Ended Oct. 31, 1997++
February 28, to August 31, February 28, to August 31,
Increase (Decrease) in Net Assets: 1999+++++ 1998 1999+++++ 1998
<S> <S> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 10.78 $ 10.00 $ 10.68 $ 10.00
Operating ----------- ----------- ----------- -----------
Performance: Investment income (loss)--net --++++ .06 (.06) --++++
Realized and unrealized gain on
investments and foreign currency
transactions--net 2.56 .72 2.54 .68
----------- ----------- ----------- -----------
Total from investment operations 2.56 .78 2.48 .68
----------- ----------- ----------- -----------
Less dividends and distributions:
Investment income--net (.09) -- --++++ --
Realized gain on investments--net (.18) -- (.18) --
----------- ----------- ----------- -----------
Total dividends and distributions (.27) -- (.18) --
----------- ----------- ----------- -----------
Net asset value, end of period $ 13.07 $ 10.78 $ 12.98 $ 10.68
=========== =========== =========== ===========
Total Investment Based on net asset value per share 23.91%+++ 7.80%+++ 23.37%+++ 6.80%+++
Return:** =========== =========== =========== ===========
Ratios to Average Expenses .89%* .98%* 1.91%* 1.99%*
Net Assets: =========== =========== =========== ===========
Investment income (loss)--net .06%* 1.00%* (.97%)* .05%*
=========== =========== =========== ===========
Supplemental Net assets, end of period (in thousands) $ 111,638 $ 80,525 $ 1,654,831 $ 1,261,129
Data: =========== =========== =========== ===========
Portfolio turnover 20.41% 29.67% 20.41% 29.67%
=========== =========== =========== ===========
<CAPTION>
Class C Class D
The following per share data and ratios have been derived For the Six For the Period For the Six For the Period
from information provided in the financial statements. Months Ended Oct. 31, 1997++ Months Ended Oct. 31, 1997++
February 28, to August 31, February 28, to August 31,
Increase (Decrease) in Net Assets: 1999+++++ 1998 1999+++++ 1998
<S> <S> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 10.68 $ 10.00 $ 10.75 $ 10.00
Operating ----------- ----------- ----------- -----------
Performance: Investment income (loss)--net (.06) --++++ (.01) .07
Realized and unrealized gain on
investments and foreign currency
transactions--net 2.54 .68 2.56 .68
----------- ----------- ----------- -----------
Total from investment operations 2.48 .68 2.55 .75
----------- ----------- ----------- -----------
Less dividends and distributions:
Investment income--net -- -- (.07) --
Realized gain on investments--net (.18) -- (.18) --
----------- ----------- ----------- -----------
Total dividends and distributions (.18) -- (.25) --
----------- ----------- ----------- -----------
Net asset value, end of period $ 12.98 $ 10.68 $ 13.05 $ 10.75
=========== =========== =========== ===========
Total Investment Based on net asset value per share 23.33%+++ 6.80%+++ 23.85%+++ 7.50%+++
Return:** =========== =========== =========== ===========
Ratios to Average Expenses 1.92%* 1.99%* 1.14%* 1.22%*
Net Assets: =========== =========== =========== ===========
Investment income (loss)--net (.99%)* .04%* (.20%)* .82%*
=========== =========== =========== ===========
Supplemental Net assets, end of period (in thousands) $ 308,657 $ 249,208 $ 286,455 $ 212,274
Data: =========== =========== =========== ===========
Portfolio turnover 20.41% 29.67% 20.41% 29.67%
=========== =========== =========== ===========
<FN>
*Annualized.
**Total investment returns exclude the effects of sales loads.
++Commencement of operations.
++++Amount is less than $.01 per share.
+++Aggregate total investment return.
+++++Based on average shares outstanding.
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Global Growth Fund, Inc., February 28, 1999
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. The Fund's financial statements are
prepared in accordance with generally accepted accounting principles
which may require the use of management accruals and estimates.
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 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 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.
(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.
* 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 contacts 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 period not exceeding five years. 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.
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 the "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 based upon the average daily
value of the Fund's net assets at an annual rate of 0.75% of the
average daily net assets not exceeding $1.5 billion and 0.725% of
the average daily net assets in excess of $1.5 billion.
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 six months ended February 28, 1999, 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 $ 128 $ 1,642
Class D $12,857 $180,412
For the six months ended February 28, 1999, MLPF&S received
contingent deferred sales charges of $2,205,591 and $102,322
relating to transactions in Class B and Class C Shares,
respectively.
Merrill Lynch Global Growth Fund, Inc., February 28, 1999
NOTES TO FINANCIAL STATEMENTS (concluded)
In addition, MLPF&S received $90,305 in commissions on the execution
of portfolio security transactions for the Fund for the six months
ended February 28, 1999.
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 six months ended February 28, 1999 were $490,229,092 and
$406,115,403, respectively.
Net realized gains for the six months ended February 28, 1999
and net unrealized gains (losses) as of February 28, 1999 were
as follows:
Unrealized
Realized Gains
Gains (Losses)
Long-term investments $58,742,987 $377,950,492
Foreign currency transactions 374,723 (92,589)
----------- ------------
Total $59,117,710 $377,857,903
=========== ============
As of February 28, 1999, net unrealized appreciation for Federal
income tax purposes aggregated $377,950,492, of which $454,334,044
related to appreciated securities and $76,383,552 related to
depreciated securities. At February 28, 1999, the aggregate cost of
investments for Federal income tax purposes was $2,000,759,308.
4. Capital Share Transactions:
Net increase in net assets derived from capital share transactions
was $178,625,457 and $1,756,323,416 for the six months ended
February 28, 1999 and for the period October 31, 1997 to August 31,
1998.
Transactions in capital shares for each class were as follows:
Class A Shares for the Six Months Dollar
Ended February 28, 1999 Shares Amount
Shares sold 2,696,090 $ 33,895,408
Shares issued to shareholders in
reinvestment of dividends and
distributions 133,514 1,615,513
------------ -------------
Total issued 2,829,604 35,510,921
Shares redeemed (1,757,671) (20,512,738)
------------ -------------
Net increase 1,071,933 $ 14,998,183
============ =============
Class A Shares for the Period Dollar
October 31, 1997++ to August 31, 1998 Shares Amount
Shares sold 8,733,319 $ 98,620,470
Shares redeemed (1,263,630) (14,666,307)
------------ -------------
Net increase 7,469,689 $ 83,954,163
============ =============
[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 Six Months Dollar
Ended February 28, 1999 Shares Amount
Shares sold 20,833,660 $ 260,149,806
Shares issued to shareholders in
reinvestment of dividends and
distributions 1,533,976 18,484,413
------------ -------------
Total issued 22,367,636 278,634,219
Automatic conversion of shares (272,003) (3,281,727)
Shares redeemed (12,613,529) (148,809,770)
------------ -------------
Net increase 9,482,104 $ 126,542,722
============ =============
Class B Shares for the Period Dollar
October 31, 1997++ to August 31, 1998 Shares Amount
Shares sold 129,773,552 $1,359,632,710
Automatic conversion of shares (286,218) (3,336,866)
Shares redeemed (11,457,608) (129,196,050)
------------ --------------
Net increase 118,029,726 $1,227,099,794
============ ==============
[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 Six Months Dollar
Ended February 28, 1999 Shares Amount
Shares sold 3,441,204 $ 42,600,721
Shares issued to shareholders in
reinvestment of distributions 291,560 3,513,302
------------ -------------
Total issued 3,732,764 46,114,023
Shares redeemed (3,279,485) (38,881,685)
------------ -------------
Net increase 453,279 $ 7,232,338
============ =============
Class C Shares for the Period Dollar
October 31, 1997++ to August 31, 1998 Shares Amount
Shares sold 26,547,559 $ 278,291,914
Shares redeemed (3,225,259) (35,955,631)
------------ -------------
Net increase 23,322,300 $ 242,336,283
============ =============
[FN]
++Prior to October 31, 1997 (commencement of operations), the Fund
issued 2,500 shares to MLAM for $25,000.
Class D Shares for the Six Months Dollar
Ended February 28, 1999 Shares Amount
Shares sold 5,112,548 $ 63,930,592
Automatic conversion of shares 270,305 3,281,727
Shares issued to shareholders in
reinvestment of dividends and
distributions 350,785 4,240,989
------------ -------------
Total issued 5,733,638 71,453,308
Shares redeemed (3,514,880) (41,601,094)
------------ -------------
Net increase 2,218,758 $ 29,852,214
============ =============
Class D Shares for the Period Dollar
October 31, 1997++ to August 31, 1998 Shares Amount
Shares sold 24,442,157 $ 256,423,360
Automatic conversion of shares 284,885 3,336,866
------------ -------------
Total issued 24,727,042 259,760,226
Shares redeemed (4,989,841) (56,827,050)
------------ -------------
Net increase 19,737,201 $ 202,933,176
============ =============
[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, 1999, the Fund had entered into foreign exchange
contracts under which it had agreed to purchase foreign currency
with an approximate value of $3,860,000.
PORTFOLIO CHANGES
For the Quarter Ended February 28, 1999
Additions
Ameritech Corporation
Cable & Wireless Optus Limited
Energis PLC
Infinity Broadcasting Corp. (Class A)
International Business Machines Corporation
Lowe's Companies, Inc.
Minnesota Mining and Manufacturing Company (3M)
*Momentum Business Applications, Inc. (Class A)
Nextel Communications, Inc. (Class A)
Safeway Inc.
T. Rowe Price Associates, Inc.
The TJX Companies, Inc.
Deletions
Ascend Communications, Inc.
Federated Department Stores, Inc.
*Momentum Business Applications, Inc. (Class A)
Reuters Group PLC
The Seagram Company Ltd.
[FN]
*Added and deleted in the same quarter.
