MERRILL LYNCH
GLOBAL
TECHNOLOGY
FUND, INC.
FUND LOGO
Semi-Annual Report
September 30, 1999
This report is not authorized for use as an offer of sale or
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 Technology Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
Printed on post-consumer recycled paper
MERRILL LYNCH GLOBAL TECHNOLOGY FUND, INC.
Portfolio
Information
As of 9/30/99
Ten Largest Industries Percent of
Represented in the Portfolio Net Assets
Semiconductors 17.3%
Software 15.3
Contract Manufacturers 10.8
Telecommunications Equipment 10.1
Computer Systems 8.8
Internet 7.8
Technology Services 6.5
Semiconductor Equipment 5.5
Telecommunications 3.8
Data Communications 2.7
Ten Largest Holdings Percent of
Represented in the Portfolio Net Assets
Flextronics International Ltd. 4.1%
Microsoft Corporation 3.9
Xilinx, Inc. 3.7
America Online, Inc. 3.6
EMC Corporation 3.3
Cisco Systems, Inc. 2.7
Compuware Corporation 2.7
Synopsys, Inc. 2.7
VERITAS Software Corporation 2.7
Nokia Oyj `A' (ADR) 2.6
Merrill Lynch Global Technology Fund, Inc., September 30, 1999
DEAR SHAREHOLDER
Merrill Lynch Global Technology Fund, Inc.'s Class A, Class B, Class
C and Class D Shares had total returns of +5.62%, +5.35%, +5.35% and
+5.57%, respectively, for the quarter ended September 30, 1999.
(Results shown do not reflect sales charges and would be lower if
sales charges were included. Complete performance information can be
found on pages 4 and 5 of this report to shareholders.) We fared
relatively well in the September quarter compared to our peer group,
and the Fund's return for Class A Shares was within 1.33 percentage
points of the average of the 113 funds that comprise the Lipper
Science and Technology group.
It was again a relatively strong period for the technology sector
and our investors as the Fund's Class A Shares outperformed the
unmanaged Standard & Poor's 500 Index total return of -6.24% by
11.86 percentage points. As in the June quarter, we believe that
technology offers investors the greatest growth potential of any
sector. Performance of these products and services and their impact
on worldwide home and office productivity continue to increase,
while competition and economies of scale exert pressure to reduce
prices. We believe the fundamentals are still strong, although we
caution that share valuations remain extremely volatile.
As in previous reports to shareholders, we provide a candid
description of what we did wrong and right during the quarter. We
generally compare our industry and stock selections to those in the
unmanaged Merrill Lynch 100 Technology Index (MLO), which is
publicly available on a daily basis. For the quarter ended September
30, 1999, the MLO returned +5.90%, which was in line with our
performance.
On an industry level, we benefited from holding at least a MLO
weight in the top four (of the 17 total) industries in the Index.
These industries included computer systems, contract manufacturers,
semiconductors and software. We also benefited from owning
relatively large positions in a few stocks that outperformed the
MLO. These included EMC Corporation (computer systems), Flextronics
International Ltd. (contract manufacturer), Xilinx, Inc.
(semiconductors), Legato Systems, Inc. (software) and VERITAS
Software Corporation (software).
The industries that were detrimental to Fund performance during the
September quarter were distribution, medical device technology and
telecommunications. We have since eliminated our only distributor,
Ingram Micro Inc., in response to intense pricing pressure in its
industry. We continue to hold relatively small positions (less than
1% of total assets) in each of two medical device technology
leaders, Medtronic, Inc. and Guidant Corporation. Although we own
both stocks, the telecommunications portion of our portfolio
underperformed the MLO during the September quarter because we were
underweighted in QUALCOMM Incorporated, which returned +31.8%, and
overweighted in MCI WorldCom Inc., which dropped 16.5%. We continue
to hold both securities, and took advantage of the weakness in MCI
WorldCom's shares by adding 170,500 shares to our position during
the quarter.
Investment Outlook
We continue to divide the outlook for the technology sector into
three distinct periods:
* A potentially relatively weak span through the first quarter of
2000 as investors grapple with possible interest rate hikes (in
addition to the increases in June and August 1999) and a possible
Year 2000 (Y2K)-related technology spending slowdown.
* A recovery in the second quarter of 2000 as we prepare for a
resurgence in technology spending as resources formerly deployed for
Y2K-related preparation are redeployed toward non-Y2K-related areas
and an increase in electronic commerce infrastructure spending.
* An unmistakable secular growth story given that technology's
influence on the economy and on the broader market continues to grow
unabated.
Since we believe that market timing is always a losing battle in
this sector, and particularly because we are in uncharted territory
in 1999 with the Y2K phenomenon, we expect to remain essentially
fully invested. A cash holding beyond 5% is not typical for the
Fund. In fact, the Fund ended the September quarter with 1.8% of net
assets in cash.
Investment Strategy
In addition to seeking to be essentially fully invested in
preparation for technology stocks continued market leadership, and
although our purpose is to manage a fully diversified portfolio, we
must consciously decide whether we should be overweight, neutral or
underweight in certain industries and stocks with respect to the
MLO. With that in mind, our industry decisions included keeping at
least 10% of Fund net assets in four industries that we believe have
the best prospects. They include contract manufacturers,
semiconductors, software and telecommunications equipment. Relative
to the MLO, the only instance in which we are either underweighted
or overweighted by more than three percentage points is a seven
percentage-point overweighting in contract manufacturers. Our
largest group concentration is limited to 25% of assets at time of
purchase for diversification purposes and by stock. Our largest
position in any security is typically limited to 5% of assets at
time of purchase.
In summary, we continue to be short-term (that is, over at least the
next two quarters) cautious on the technology sector and the
prospects for Merrill Lynch Global Technology Fund, Inc. We are more
encouraged about the outlook after the start of the year. Finally,
we are very positive about the sector's secular forecast.
In Conclusion
We welcome the shareholders of Merrill Lynch Technology Fund, Inc.
as a result of the acquisition on September 20, 1999 by Merrill
Lynch Global Technology Fund, Inc. We appreciate your ongoing
investment, and we look forward to serving your financial needs in
the months and years ahead.
Sincerely,
(Terry K. Glenn)
Terry K. Glenn
President and Director
(Paul G. Meeks)
Paul G. Meeks
Senior Vice President and
Portfolio Manager
November 12, 1999
Officers and
Directors
Terry K. Glenn, President and Director
Donald Cecil, Director
Edward H. Meyer, Director
Charles C. Reilly, Director
Richard R. West, Director
Arthur Zeikel, Director
Edward D. Zinbarg, Director
Robert C. Doll, Senior Vice President
Paul G. Meeks, Senior Vice President and
Portfolio Manager
Donald C. Burke, Vice President and Treasurer
Robert E. Putney, III, Secretary
Custodian
Brown Brothers Harriman &Co.
40 Water Street
Boston, MA 02109
Transfer Agent
Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 637-3863
Merrill Lynch Global Technology Fund, Inc., September 30, 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 "Aggregate 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
As of September 30, 1999 Total Return Total Return Total Return
<S> <C> <C> <C>
ML Global Technology Fund, Inc. Class A Shares +5.62% +84.12% +63.50%
ML Global Technology Fund, Inc. Class B Shares +5.35 +82.17 +61.40
ML Global Technology Fund, Inc. Class C Shares +5.35 +82.17 +61.40
ML Global Technology Fund, Inc. Class D Shares +5.57 +83.56 +63.00
<FN>
*Investment results shown do not reflect sales charges; results
shown would be lower if a sales charge was included. Total
investment returns are based on changes in net asset values for the
periods shown, and assume reinvestment of all dividends and capital
gains distributions at net asset value on the ex-dividend date. The
Fund commenced operations on 6/26/98.
</TABLE>
Average Annual
Total Return
% Return Without % Return With
Class A Shares* Sales Charge Sales Charge**
Year Ended 9/30/99 +84.12% +74.46%
Inception (6/26/98) through 9/30/99 +47.59 +41.42
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
% Return % Return
Class B Shares* Without CDSC With CDSC**
Year Ended 9/30/99 +82.17% +78.17%
Inception (6/26/98) through 9/30/99 +46.09 +43.93
[FN]
*Maximum contingent deferred sales charge is 4% and is reduced to 0%
after 4 years.
**Assuming payment of applicable contingent deferred sales charge.
% Return % Return
Class C Shares* Without CDSC With CDSC**
Year Ended 9/30/99 +82.17% +81.17%
Inception (6/26/98) through 9/30/99 +46.09 +46.09
[FN]
*Maximum contingent deferred sales charge is 1% and is reduced to 0%
after 1 year.
**Assuming payment of applicable contingent deferred sales charge.
% Return Without % Return With
Class D Shares* Sales Charge Sales Charge**
Year Ended 9/30/99 +83.56% +73.92%
Inception (6/26/98) through 9/30/99 +47.23 +41.08
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
Merrill Lynch Global Technology Fund, Inc., September 30, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (in US dollars)
<CAPTION>
Shares Held/ Value Percent of
COUNTRY Industries Face Amount Stocks & Bonds (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C>
Canada Contract Manufacturers 351,500 ++Celestica Inc. $ 17,355,312 1.0%
Telecommunications 424,000 Nortel Networks Corporation 21,624,000 1.3
Equipment
Total Investments in Canada 38,979,312 2.3
Finland Telecommunications 493,200 Nokia Oyj 'A' (ADR)* 44,295,525 2.6
Equipment
Total Investments in Finland 44,295,525 2.6
Israel Telecommunications 505,800 ECI Telecom Limited 12,423,713 0.8
Equipment
Total Investments in Israel 12,423,713 0.8
Singapore Contract Manufacturers 1,189,200 ++Flextronics International Ltd. 69,196,575 4.1
Total Investments in Singapore 69,196,575 4.1
Taiwan Semiconductors US$ 16,296,000 Morgan Stanley Dean Witter & Co., 5.965%
due 9/01/2000 (Convertible)(a)(b) 18,401,443 1.1
566,941 ++Taiwan Semiconductor Manufacturing
Company Ltd. (ADR)* 16,724,760 1.0
Total Investments in Taiwan 35,126,203 2.1
United Computer Systems 770,000 ++EMC Corporation 55,006,875 3.3
States 282,900 ++Electronics for Imaging, Inc. 14,533,987 0.9
172,800 International Business Machines Corporation 20,973,600 1.2
290,000 ++Network Appliance, Inc. 20,771,250 1.2
392,000 ++Sun Microsystems, Inc. 36,456,000 2.2
-------------- ------
147,741,712 8.8
Contract Manufacturers 554,000 ++Jabil Circuit, Inc. 27,423,000 1.6
383,300 ++Sanmina Corporation 29,657,838 1.8
535,000 ++Solectron Corporation 38,419,688 2.3
-------------- ------
95,500,526 5.7
Data Communications 673,500 ++Cisco Systems, Inc. 46,134,750 2.7
Distribution 1,043,700 ++Ingram Micro Inc. (Class A) 13,437,638 0.8
Diversified 352,100 ++General Instrument Corporation 16,944,813 1.0
Electronic Design 817,800 ++Synopsys, Inc. 45,899,025 2.7
Automation
Internet 225,400 ++Amazon.com, Inc. 18,017,912 1.1
587,200 ++America Online, Inc. 61,068,800 3.6
226,600 ++Exodus Communications, Inc. 16,329,362 1.0
249,900 ++PSINet Inc. 8,980,781 0.5
152,400 ++Yahoo! Inc. 27,327,225 1.6
-------------- ------
131,724,080 7.8
Medical Device 256,000 ++Guidant Corporation 13,728,000 0.8
Technology 370,200 Medtronic, Inc. 13,142,100 0.8
-------------- ------
26,870,100 1.6
Peripherals 220,600 ++Lexmark International Group, Inc. (Class A) 17,758,300 1.0
265,000 Pitney Bowes Inc. 16,148,438 1.0
-------------- ------
33,906,738 2.0
Personal Computers 568,000 ++Dell Computer Corporation 23,749,500 1.4
Semiconductor Equipment 492,700 ++Applied Materials, Inc. 38,245,837 2.3
261,800 ++KLA-Tencor Corporation 17,017,000 1.0
277,800 ++Novellus Systems, Inc. 18,734,138 1.1
526,000 ++Teradyne, Inc. 18,541,500 1.1
-------------- ------
92,538,475 5.5
Semiconductors 817,000 ++Altera Corporation 35,386,312 2.1
155,000 ++Broadcom Corporation (Class A) 16,875,625 1.0
392,400 Intel Corporation 29,160,225 1.7
585,200 ++Maxim Integrated Products, Inc. 36,904,175 2.2
105,000 Motorola, Inc. 9,240,000 0.6
430,800 Texas Instruments Incorporated 35,433,300 2.1
359,000 ++Vitesse Semiconductor Corporation 30,649,625 1.8
937,000 ++Xilinx, Inc. 61,373,500 3.7
-------------- ------
255,022,762 15.2
Software 554,400 ++BMC Software, Inc. 39,639,600 2.4
610,300 ++Citrix Systems, Inc. 37,762,312 2.2
1,770,400 ++Compuware Corporation 46,030,400 2.7
542,400 ++Legato Systems, Inc. 23,628,300 1.4
725,200 ++Microsoft Corporation 65,675,925 3.9
595,000 ++VERITAS Software Corporation 45,182,813 2.7
-------------- ------
257,919,350 15.3
Technology Services 331,100 ++The BISYS Group, Inc. 15,437,537 0.9
374,500 ++DST Systems, Inc. 21,299,687 1.3
440,000 Galileo International, Inc. 17,710,000 1.0
1,302,500 ++Keane, Inc. 29,713,281 1.8
549,100 ++Unisys Corporation 24,778,138 1.5
-------------- ------
108,938,643 6.5
Telecommunications 242,900 AT&T Corp. 10,566,150 0.6
585,600 ++MCI WorldCom Inc. 42,053,400 2.5
58,000 ++QUALCOMM Incorporated 10,969,250 0.7
-------------- ------
63,588,800 3.8
Telecommunications 318,000 ++ADC Telecommunications, Inc. 13,316,250 0.8
Equipment 189,800 ++JDS Uniphase Corporation 21,589,750 1.3
456,655 Lucent Technologies Inc. 29,625,493 1.7
473,200 ++Tellabs, Inc. 26,942,825 1.6
-------------- ------
91,474,318 5.4
Total Investments in the United States 1,451,391,230 86.2
Total Investments in Stocks & Bonds
(Cost--$1,101,147,590) 1,651,412,558 98.1
</TABLE>
Merrill Lynch Global Technology Fund, Inc., September 30, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<CAPTION>
SHORT-TERM Face Value Percent of
SECURITIES Amount Issue (Note 1a) Net Assets
<S> <C> <S> <C> <C>
Commercial US$ 45,985,000 General Electric Capital Corp., 5.60%
Paper** due 10/01/1999 $ 45,985,000 2.7%
Total Investments in Short-Term
Securities (Cost--$45,985,000) 45,985,000 2.7
Total Investments (Cost--$1,147,132,590) 1,697,397,558 100.8
Liabilities in Excess of Other Assets (13,987,989) (0.8)
-------------- ------
Net Assets $1,683,409,569 100.0%
============== ======
<FN>
*American Depositary Receipts (ADR).
**Commercial Paper is traded on a discount basis; the interest rate
shown reflects the discount rate paid at the time of purchase by the
Fund.
++Non-income producing security.
(a)The security may be offered and sold to "qualified institutional
buyers" under Rule 144A of the Securities Act of 1933.
(b)The value of this security is derived from the daily value of
Taiwan Semiconductor Manufacturing Company Ltd. common stock traded
on the Taipei stock exchange and the TWD/USD foreign exchange spot
rate.
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENT OF ASSETS AND LIABILITIES
<CAPTION>
As of September 30, 1999
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$1,147,132,590)(Note 1a) $1,697,397,558
Receivables:
Capital shares sold $ 5,328,596
Securities sold 4,048,307
Interest 185,287
Dividends 59,239 9,621,429
--------------
Deferred organization expenses (Note 1f) 62,661
Prepaid registration fees and other assets (Note 1f) 117,404
--------------
Total assets 1,707,199,052
--------------
Liabilities: Payables:
Securities purchased 18,496,821
Capital shares redeemed 3,326,176
Distributor (Note 2) 1,007,745
Investment adviser (Note 2) 271,407 23,102,149
--------------
Accrued expenses and other liabilities 687,334
--------------
Total liabilities 23,789,483
--------------
Net Assets: Net assets $1,683,409,569
==============
Net Assets Class A Shares of Common Stock, $.10 par value, 100,000,000
Consist of: shares authorized $ 2,014,458
Class B Shares of Common Stock, $.10 par value, 200,000,000
shares authorized 6,097,014
Class C Shares of Common Stock, $.10 par value, 100,000,000
shares authorized 1,132,257
Class D Shares of Common Stock, $.10 par value, 100,000,000
shares authorized 1,149,288
Paid-in capital in excess of par 1,119,210,283
Accumulated investment loss--net (9,153,660)
Undistributed realized capital gains on investments and foreign
currency transactions--net 12,694,961
Unrealized appreciation on investments--net 550,264,968
--------------
Net assets $1,683,409,569
==============
Net Asset Class A--Based on net assets of $329,392,502 and 20,144,582
Value: shares outstanding $ 16.35
==============
Class B--Based on net assets of $984,004,125 and 60,970,144
shares outstanding $ 16.14
==============
Class C--Based on net assets of $182,709,830 and 11,322,571
shares outstanding $ 16.14
==============
Class D--Based on net assets of $187,303,112 and 11,492,884
shares outstanding $ 16.30
==============
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Global Technology Fund, Inc. September 30, 1999
<TABLE>
STATEMENT OF OPERATIONS
<CAPTION>
For the Six Months Ended September 30, 1999
<S> <S> <C> <C>
Investment Interest and discount earned $ 1,072,456
Income Dividends (net of $27,212 foreign withholding tax) 321,372
(Notes 1d & 1e): --------------
Total income 1,393,828
--------------
Expenses: Investment advisory fees (Note 2) $ 5,137,857
Account maintenance and distribution fees--Class B (Note 2) 3,347,239
Account maintenance and distribution fees--Class C (Note 2) 744,894
Transfer agent fees--Class B (Note 2) 385,212
Reorganization expenses 304,195
Account maintenance fees--Class D (Note 2) 167,018
Transfer agent fees--Class C (Note 2) 92,059
Registration fees (Note 1f) 74,266
Transfer agent fees--Class D (Note 2) 64,905
Printing and shareholder reports 49,112
Accounting services (Note 2) 45,728
Custodian fees 44,442
Transfer agent fees--Class A (Note 2) 36,103
Professional fees 29,660
Directors' fees and expenses 15,562
Amortization of organization expenses (Note 1f) 5,034
Pricing fees 457
Other 3,745
--------------
Total expenses 10,547,488
--------------
Investment loss--net (9,153,660)
--------------
Realized & Realized gain from:
Unrealized Investments--net 12,694,933
Gain on Investments Foreign currency transactions--net 28 12,694,961
& Foreign Currency --------------
Transactions--Net Change in unrealized appreciation on investments--net 145,385,786
(Notes 1b, 1c, --------------
1e & 3): Net Increase in Net Assets Resulting from Operations $ 148,927,087
==============
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
For the Six For the Period
Months Ended June 26, 1998++
September 30, to March 31,
Increase (Decrease) in Net Assets: 1999 1999
<S> <S> <C> <C>
Operations: Investment loss--net $ (9,153,660) $ (7,447,308)
Realized gain on investments and foreign currency
transactions--net 12,694,961 6,603,828
Change in unrealized appreciation on investments--net 145,385,786 192,477,693
-------------- --------------
Net increase in net assets resulting from operations 148,927,087 191,634,213
-------------- --------------
Capital Share Net increase in net assets derived from capital share
Transactions transactions 685,418,358 657,329,911
(Note 4):
Net Assets: Total increase in net assets 834,345,445 848,964,124
Beginning of period 849,064,124 100,000
-------------- --------------
End of period $1,683,409,569 $ 849,064,124
============== ==============
<FN>
++Commencement of operations.
See Notes to Financial Statements.
</TABLE>
<TABLE>
FINANCIAL HIGHLIGHTS
<CAPTION>
Class A Class B
For the For the For the For the
Six Period Six Period
The following per share data and ratios have been derived Months June 26, Months June 26,
from information provided in the financial statements. Ended 1998++ to Ended 1998++ to
Sept. 30, March 31, Sept. 30, March 31,
Increase (Decrease) in Net Asset Value: 1999++++ 1999 1999++++ 1999
<S> <S> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 13.59 $ 10.00 $ 13.48 $ 10.00
Operating -------- -------- -------- --------
Performance: Investment loss--net (.06) (.05) (.14) (.13)
Realized and unrealized gain on investments and
foreign currency transactions--net 2.82 3.64 2.80 3.61
-------- -------- -------- --------
Total from investment operations 2.76 3.59 2.66 3.48
-------- -------- -------- --------
Net asset value, end of period $ 16.35 $ 13.59 $ 16.14 $ 13.48
======== ======== ======== ========
Total Investment Based on net asset value per share 20.31%+++ 35.90%+++ 19.73%+++ (34.80%)+++
Return:** ======== ======== ======== ========
Ratios to Average Expenses 1.19%* 1.25%* 2.22%* 2.27%*
Net Assets: ======== ======== ======== ========
Investment loss--net (.91%)* (.74%)* (1.95%)* (1.76%)*
======== ======== ======== ========
Supplemental Net assets, end of period (in thousands) $329,393 $ 41,382 $984,004 $565,111
Data: ======== ======== ======== ========
Portfolio turnover 23.57% 49.72% 23.57% 49.72%
======== ======== ======== ========
<FN>
*Annualized.
**Total investment returns exclude the effects of sales charges.
++Commencement of operations.
++++Based on average shares outstanding.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Global Technology Fund, Inc., September 30, 1999
<TABLE>
FINANCIAL HIGHLIGHTS (concluded)
<CAPTION>
Class C Class D
For the For the For the For the
Six Period Six Period
The following per share data and ratios have been derived Months June 26, Months June 26,
from information provided in the financial statements. Ended 1998++ to Ended 1998++ to
Sept. 30, March 31, Sept. 30, March 31,
Increase (Decrease) in Net Asset Value: 1999++++ 1999 1999++++ 1999
<S> <S> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 13.48 $ 10.00 $ 13.56 $ 10.00
Operating -------- -------- -------- --------
Performance: Investment loss--net (.15) (.13) (.09) (.07)
Realized and unrealized gain on investments and
foreign currency transactions--net 2.81 3.61 2.83 3.63
-------- -------- -------- --------
Total from investment operations 2.66 3.48 2.74 3.56
-------- -------- -------- --------
Net asset value, end of period $ 16.14 $ 13.48 $ 16.30 $ 13.56
======== ======== ======== ========
Total Investment Based on net asset value per share 19.73%+++ 34.80%+++ 20.21%+++ 35.60%+++
Return:** ======== ======== ======== ========
Ratios to Average Expenses 2.22%* 2.28%* 1.45%* 1.50%*
Net Assets: ======== ======== ======== ========
Investment loss--net (1.96%)* (1.76%)* (1.18%)* (1.00%)*
======== ======== ======== ========
Supplemental Net assets, end of period (in thousands) $182,710 $127,461 $187,303 $115,110
Data: ======== ======== ======== ========
Portfolio turnover 23.57% 49.72% 23.57% 49.72%
======== ======== ======== ========
<FN>
*Annualized.
**Total investment returns exclude the effects of sales charges.
++Commencement of operations.
++++Based on average shares outstanding.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
Merrill Lynch Global Technology 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 securities--Portfolio securities that 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 that 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 readily
available are valued at their fair value as determined in good faith
by or under the direction of the Fund's Board of Directors.
(b) 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, debt 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.
* 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.
* 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.
(c) Foreign currency transactions--Transactions denominated in
foreign currencies are recorded at the exchange rate prevailing when
recognized. Assets and liabilities denominated in foreign currencies
are valued at the exchange rate at the end of the period. Foreign
currency transactions are the result of settling (realized) or
valuing (unrealized) assets or liabilities expressed in foreign
currencies into US dollars. Realized and unrealized gains or losses
from investments include the effects of foreign exchange rates on
investments.
(d) 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.
Merrill Lynch Global Technology Fund, Inc., September 30, 1999
NOTES TO FINANCIAL STATEMENTS (concluded)
(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 to shareholders--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 administrative services necessary for the operation of
the Fund. As compensation for its services to the Fund, MLAM
receives monthly compensation at the annual rate of 1% of the
average daily net assets of the Fund not exceeding $1 billion and
.95% of the average daily net assets of the Fund in excess of $1
billion.
Pursuant to the Distribution Plans adopted by the Fund, in
accordance with Rule 12b-1 under the Investment Fund Act of 1940,
the Fund pays the Distributor an ongoing account maintenance fee and
distribution fee. The fees are accrued daily and paid monthly at
annual rates based upon the average daily net assets of the shares
as follows:
Account Distribution
Maintenance Fee Fee
Class B .25% .75%
Class C .25% .75%
Class D .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 September 30, 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 $ 122 $ 863
Class D $17,866 $270,669
For the six months ended September 30, 1999, MLPF&S received
contingent deferred sales charges of $1,052,244 and $52,627 relating
to transactions in Class B and Class C Shares, respectively.
In addition, MLPF&S received $34,047 in commissions on the execution
of portfolio security transactions for the Fund for the six months
ended September 30, 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 September 30, 1999 were $703,946,508 and
$243,069,274, respectively.
Net realized gains for the six months ended September 30, 1999 and
net unrealized gains as of September 30, 1999 were as follows:
Realized Unrealized
Gains Gains
Long-term investments $ 12,694,933 $ 550,264,968
Foreign currency transactions 28 --
------------ -------------
Total $ 12,694,961 $ 550,264,968
============ =============
As of September 30, 1999, net unrealized appreciation for Federal
income tax purposes aggregated $550,264,968, of which $596,053,149
related to appreciated securities and $45,788,181 related to
depreciated securities. The aggregate cost of investments at
September 30, 1999 for Federal income tax purposes was
$1,147,132,590.
4. Capital Share Transactions:
Net increase in net assets derived from capital share transactions
was $685,418,358 and $657,329,911 for the six months ended September
30, 1999 and the period June 26, 1998 to March 31, 1999,
respectively.
Transactions in capital shares for each class were as follows:
Class A Shares for the Six Months Dollar
Ended September 30, 1999 Shares Amount
Shares sold 4,225,059 $ 66,741,957
Shares issued resulting from
reorganization 15,458,403 265,325,151
------------- -------------
Total issued 19,683,462 332,067,108
Shares redeemed (2,584,881) (42,816,157)
------------- -------------
Net increase 17,098,581 $ 289,250,951
============= =============
Class A Shares for the Period Dollar
June 26, 1998++ to March 31, 1999 Shares Amount
Shares sold 4,203,702 $ 45,983,223
Shares redeemed (1,160,201) (12,333,818)
------------- -------------
Net increase 3,043,501 $ 33,649,405
============= =============
[FN]
++Prior to June 26, 1998 (commencement of operations), the Fund
issued 2,500 shares to MLAM for $25,000.
Class B Shares for the Six Months Dollar
Ended September 30, 1999 Shares Amount
Shares sold 8,798,822 $ 133,159,402
Shares issued resulting from
reorganization 14,980,153 253,904,256
------------- -------------
Total issued 23,778,975 387,063,658
Shares redeemed (4,572,551) (69,045,724)
Automatic conversion of shares (158,043) (2,335,837)
------------- -------------
Net increase 19,048,381 $ 315,682,097
============= =============
Class B Shares for the Period Dollar
June 26, 1998++ to March 31, 1999 Shares Amount
Shares sold 47,293,584 $ 496,077,139
Shares redeemed (5,297,659) (58,872,700)
Automatic conversion of shares (76,662) (877,438)
------------- -------------
Net increase 41,919,263 $ 436,327,001
============= =============
[FN]
++Prior to June 26, 1998 (commencement of operations), the Fund
issued 2,500 shares to MLAM for $25,000.
Class C Shares for the Six Months Dollar
Ended September 30, 1999 Shares Amount
Shares sold 2,000,843 $ 29,734,858
Shares issued resulting from
reorganization 1,014,152 17,187,596
------------- -------------
Total issued 3,014,995 46,922,454
Shares redeemed (1,148,464) (17,031,149)
------------- -------------
Net increase 1,866,531 $ 29,891,305
============= =============
Class C Shares for the Period Dollar
June 26, 1998++ to March 31, 1999 Shares Amount
Shares sold 11,344,612 $ 118,580,717
Shares redeemed (1,891,072) (20,384,308)
------------- -------------
Net increase 9,453,540 $ 98,196,409
============= =============
[FN]
++Prior to June 26, 1998 (commencement of operations), the Fund
issued 2,500 shares to MLAM for $25,000.
Class D Shares for the Six Months Dollar
Ended September 30, 1999 Shares Amount
Shares sold 1,639,176 $ 24,710,957
Automatic conversion of shares 156,833 2,335,837
Shares issued resulting from
reorganization 2,596,925 44,435,997
------------- -------------
Total issued 4,392,934 71,482,791
Shares redeemed (1,388,748) (20,888,786)
------------- -------------
Net increase 3,004,186 $ 50,594,005
============= =============
Class D Shares for the Period Dollar
June 26, 1998++ to March 31, 1999 Shares Amount
Shares sold 9,420,462 $ 99,236,824
Automatic conversion of shares 76,412 877,438
------------- -------------
Total issued 9,496,874 100,114,262
Shares redeemed (1,010,676) (10,957,166)
------------- -------------
Net increase 8,486,198 $ 89,157,096
============= =============
[FN]
++Prior to June 26, 1998 (commencement of operations), the Fund
issued 2,500 shares to MLAM for $25,000.
5. Loaned Securities:
At September 30, 1999, the Fund held US Treasury Bonds having an
aggregate value of approximately $17,658,000 as collateral for
portfolio securities loaned having a market value of approximately
$16,668,000.
6. Acquisition of Merrill Lynch Technology Fund, Inc.:
On September 20, 1999, the Fund acquired all of the net assets of
Merrill Lynch Technology Fund, Inc. pursuant to a plan of
reorganization. The acquisition was accomplished by a tax-free
exchange of 85,190,962 shares of common stock of Merrill Lynch
Technology Fund, Inc. for 34,049,632 shares of common stock of the
Fund. Merrill Lynch Technology Fund, Inc.'s net assets on that date
of $580,853,000, including $212,401,489 of unrealized appreciation
and $97,504,944 of accumulated net realized loss on investments,
were combined with those of the Fund. The aggregate net assets
immediately after the acquisition amounted to $1,751,992,053.
