MERRILL LYNCH
GLOBAL
TECHNOLOGY
FUND, INC.
FUND LOGO
Quarterly Report
June 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 6/30/99
Ten Largest Industries Percent of
Represented in the Portfolio Net Assets
Semiconductors 16.6%
Software 14.0
Telecommunications Equipment 11.7
Contract Manufacturers 10.5
Computer Systems 8.6
Internet 7.2
Technology Services 6.6
Semiconductor Equipment 5.9
Telecommunications 4.2
Data Communications 2.9
Ten Largest Holdings Percent of
Represented in the Portfolio Net Assets
Microsoft Corporation 4.8%
Compuware Corporation 3.9
Xilinx, Inc. 3.7
Nokia Oyj 'A' (ADR) 3.2
Cisco Systems, Inc. 2.9
America Online, Inc. 2.9
Synopsys, Inc. 2.9
Solectron Corporation 2.9
MCI WorldCom, Inc. 2.8
Sanmina Corporation 2.8
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
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., June 30, 1999
DEAR SHAREHOLDER
For the quarter ended June 30, 1999, Merrill Lynch Global Technology
Fund, Inc.'s Class A, Class B, Class C and Class D Shares had total
returns of +13.91%, +13.65%, +13.65% and +13.86%, respectively.
(Results shown do not reflect sales charges and would be lower if
sales charges were included. Complete performance information can be
found on page 4 of this report to shareholders.) It was another
relatively strong period for the technology sector, and the Fund's
Class A Shares outperformed the +7.05% total return for the
unmanaged Standard & Poor's 500 Index by 6.86 percentage points. We
continue to believe that technology offers investors the greatest
growth potential of any sector because these products and services
continue to increase in performance but decrease in price, driving
remarkable productivity in homes and offices around the world. We
expect that careful technology investors will continue to be
rewarded. Although these companies have superior long-term
fundamentals, their shares are volatile, so that active managers can
take advantage of opportunities to buy quickly on short-term dips or
to sell immediately into rallies that are too steep.
We fared relatively well in the June quarter compared to our peer
group, and the Fund's return for Class A Shares was within 20 basis
points (0.20%) of the average of the 105 funds that comprise the
Lipper Science and Technology Index.
We often compare our industry and stock selections to those in the
Merrill Lynch 100 Technology Index (MLO) because the data is
publicly available on a daily basis as compared to the less timely
information found for our competitors. On an industry level, we held
a relative weight in two of the top four (of 16 total) industries in
the MLO, semiconductors and telecommunications equipment. We also
benefited from adding to select software stocks before they rallied,
such as Compuware Corporation, VERITAS Software Corporation and
Microsoft Corporation. The appreciation in these issues helped carry
the software industry to among the top performers in the technology
sector for the quarter.
The industries that were drags on Fund performance during the
quarter were personal computers (PCs), electronic design automation
(EDA) software (software used to design semiconductors) and
Internet. We have since eliminated troubled PC vendor, Compaq
Computer Corporation, to focus on what we view as superior industry
investments in Dell Computer Corporation and Gateway Inc. In
response to deterioration in its fundamentals, we also sold our
position in EDA, Cadence Design Systems, Inc., to focus on the new
leader in this group, Synopsys, Inc. Synopsys has been one of the
Fund's best performers since we added it to the portfolio. We still
have confidence in each of our Internet holdings other than
Amazon.com, Inc. We sold Amazon in order to focus on what we view as
the superior electronic commerce company, eBay Inc.
We were fortunate to have owned eight of the top 15 performers of
the 100-stock MLO Index during the quarter. These include JDS
Uniphase Corporation (fiber optics components sold to tele-
communications equipment vendors); semiconductor vendors Broadcom
Corporation, Xilinx, Inc. and Texas Instruments Incorporated;
QUALCOMM Incorporated (wireless); telecommunications equipment
vendors Tellabs, Inc. and Nortel Networks Corporation; and contract
manufacturer, Solectron Corporation. We also held three of the 15
worst names--Gateway Inc. (PC player), EMC Corporation (data
storage provider), and America Online, Inc. (Internet leader)--
which penalized us. The PC industry has become troublesome. Although
unit growth is still robust (up between 15% and 20% year-to-year),
dropping average selling prices have caused revenues to lag. We
retain a small position in Gateway. We still have confidence in EMC
and America Online, so we have not reduced our positions in either
of these two companies.
Investment Outlook
We continue to divide the outlook for our sector into three distinct
periods:
* A potentially relatively weak span through the summer as investors
grapple with seasonal weakness, potential interest rate hikes (in
addition to the increase on June 30, 1999) and worries about a Year
2000-related technology spending slowdown.
* A recovery in the second half of calendar 1999 that, like 1998,
may be skewed toward the fourth quarter as investors wait for
concrete evidence that spending will reaccelerate into the
millennium.
* An unmistakable secular growth story given that technology's
influence on the economy and on the broader market continues to grow
unabated.
Since precise market timing is always a losing battle in this
sector, and particularly because we are in uncharted territory in
1999 with the Year 2000 phenomenon, we will remain essentially fully
invested. A cash holding beyond 5% is not typical for the Fund. In
fact, the Fund ended the June quarter with 0.9% of net assets in
cash. In summary, despite the near-term relative weakness in
technology, we believe that the sector may outperform the broader
market for the calendar year as a whole. Therefore, we are of the
opinion that the sector's relative performance is likely to improve.
As a result, we have positioned the portfolio accordingly.
Investment Strategy
In addition to seeking to be essentially fully invested in
preparation for technology stocks regaining the market's leadership,
and although our purpose is to manage a fully diversified (by
industry and stock) portfolio, we must consciously decide whether we
should be overweight, neutral weight or underweight in certain
industries and stocks with respect to the MLO. With that in mind,
our industry decisions included increasing our exposure in three
groups in which we had been underweight: semiconductors,
semiconductor capital equipment and Internet.
We arrived at our decision to boost our semiconductor-related
exposure after accumulating evidence that the industry probably
troughed in the third quarter of 1998. We focused our efforts on
semiconductor leaders with strong intellectual property such as
analog vendor, Maxim Integrated Products, Inc., and communications
integrated circuit pioneer, Broadcom Corporation. Our list of
semiconductor capital equipment holdings includes the who's who of
the key enabling process technologies for their partners. KLA-Tencor
Corporation, a leader in yield management and process management
systems, is an example of one of these stocks. We also purchased
shares of the world's largest foundry (an outsourced manufacturer of
integrated circuit production), Taiwan Semiconductor Manufacturing
Company Ltd.
We decided to increase our Internet exposure not so much to capture
improving fundamentals but to opportunistically purchase several
leadership stocks that had fallen significantly since technology
securities began to tumble in February 1999. Through secondary
offerings, we added eBay Inc. and PSINet Inc.
Considering the aforementioned near-term risks to the sector, we
added more defensive holdings to the Fund. These included medical
device technology leaders Guidant Corporation and Medtronic, Inc.
Another addition was Pitney Bowes Inc., the dominant company in the
mailing equipment business. We expect these stocks to be impacted by
different dynamics than some of the more cyclical, traditional
technology companies in this uncertain short-term period for the
sector.
We look to prune our portfolio of stocks that may, for fundamental
or valuation reasons, become relatively inferior holdings. In
technology investing, because product cycles move so quickly, it is
very easy to do countless hours of research on an investment and
still be wrong. This is why we are diversified (our largest industry
concentration is limited to 25% of assets at time of purchase in any
one industry), and can only hold up to 5% of our Fund's assets in
any stock at time of purchase. During the June quarter, we sold the
following stocks in response to deteriorating fundamentals: Cadence
Design Systems, Inc. (electronic design automation); Compaq Computer
Corporation (personal computers); Telefonaktiebolaget LM Ericsson
(telecommunications equipment); Network Associates, Inc. (enterprise
software); Oracle Corporation (enterprise software); and Amazon.com,
Inc. (Internet).
In summary, we continue to be short-term cautious on the technology
sector and the prospects for Merrill Lynch Global Technology Fund,
Inc. We are more encouraged about the intermediate-term outlook.
Finally, we are very positive about the sector's secular forecast.
In Conclusion
We thank you for your continued investment in Merrill Lynch Global
Technology Fund, Inc., and we look forward to reporting to you again
in our upcoming semi-annual report to shareholders.
Sincerely,
(Terry K. Glenn)
Terry K. Glenn
President and Director
(Paul G. Meeks)
Paul G. Meeks
Senior Vice President and
Portfolio Manager
August 4, 1999
Merrill Lynch Global Technology Fund, Inc., June 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 "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>
12 Month 3 Month Since Inception
Total Return Total Return Total Return
<S> <C> <C> <C>
ML Global Technology Fund, Inc. Class A Shares +54.03% +13.91% +54.80%
ML Global Technology Fund, Inc. Class B Shares +52.44 +13.65 +53.20
ML Global Technology Fund, Inc. Class C Shares +52.44 +13.65 +53.20
ML Global Technology Fund, Inc. Class D Shares +53.63 +13.86 +54.40
<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 6/26/98.
</TABLE>
Average Annual
Total Return
% Return Without % Return With
Class A Shares* Sales Charge Sales Charge**
Year Ended 6/30/99 +54.03% +45.94%
Inception (6/26/98) through 6/30/99 +54.07 +46.07
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
% Return % Return
Class B Shares* Without CDSC With CDSC**
Year Ended 6/30/99 +52.44% +48.44%
Inception (6/26/98) through 6/30/99 +52.49 +49.54
[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 6/30/99 +52.44% +51.44%
Inception (6/26/98) through 6/30/99 +52.49 +52.49
[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 6/30/99 +53.63% +45.57%
Inception (6/26/98) through 6/30/99 +53.67 +45.69
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
<TABLE>
SCHEDULE OF INVESTMENTS (in US dollars)
<CAPTION>
Shares Percent of
COUNTRY Industries Held Stocks Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
Canada Contract Manufacturers 272,500 Celestica Inc. $ 7,859,914 $ 11,802,656 1.2%
Telecommunications 121,000 Nortel Networks Corporation 4,969,470 10,504,313 1.0
Equipment
Total Investments in Canada 12,829,384 22,306,969 2.2
Finland Telecommunications 359,200 Nokia Oyj 'A' (ADR)* 21,615,009 32,889,250 3.2
Equipment
Total Investments in Finland 21,615,009 32,889,250 3.2
Israel Telecommunications 326,900 ECI Telecom Limited 11,438,646 10,787,700 1.1
Equipment
Total Investments in Israel 11,438,646 10,787,700 1.1
Singapore Contract Manufacturers 366,400 Flextronics International Ltd. 7,730,216 20,243,600 2.0
Total Investments in Singapore 7,730,216 20,243,600 2.0
Taiwan Semiconductors 588,000 Taiwan Semiconductor
Manufacturing Company Ltd.
(ADR)* 12,636,854 19,992,000 2.0
Total Investments in Taiwan 12,636,854 19,992,000 2.0
United Components 339,600 General Cable Corporation 7,258,586 5,433,600 0.5
States
Computer Systems 474,000 EMC Corporation 10,651,562 26,070,000 2.6
181,500 Electronics for Imaging, Inc. 3,182,501 9,324,562 0.9
180,400 International Business
Machines Corporation 13,736,742 23,316,700 2.3
180,000 Network Appliance, Inc. 7,119,126 10,057,500 1.0
264,000 Sun Microsystems, Inc. 5,984,811 18,183,000 1.8
------------ ------------ ------
40,674,742 86,951,762 8.6
Contract Manufacturers 360,000 Jabil Circuit, Inc. 5,867,450 16,245,000 1.6
369,000 Sanmina Corporation 15,557,318 27,997,875 2.8
440,000 Solectron Corporation 10,101,586 29,342,500 2.9
------------ ------------ ------
31,526,354 73,585,375 7.3
Data Communications 461,500 Cisco Systems, Inc. 14,599,324 29,737,906 2.9
Distribution 396,300 Ingram Micro Inc. (Class A) 16,537,696 10,204,725 1.0
Diversified 230,000 General Instrument Corporation 8,317,982 9,775,000 1.0
Electronic Design 534,900 Synopsys, Inc. 23,135,634 29,486,363 2.9
Automation
Internet 267,200 America Online, Inc. 15,794,772 29,525,600 2.9
57,600 eBay Inc. 9,792,000 8,715,600 0.9
87,400 Exodus Communications, Inc. 3,783,009 10,482,537 1.0
160,500 PSINet Inc. 9,033,629 7,011,844 0.7
99,800 Yahoo! Inc. 15,292,795 17,184,313 1.7
------------ ------------ ------
53,696,205 72,919,894 7.2
</TABLE>
Merrill Lynch Global Technology Fund, Inc., June 30, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<CAPTION>
Shares Percent of
COUNTRY Industries Held Stocks Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
United Medical Technology 168,000 Guidant Corporation $ 7,646,355 $ 8,641,500 0.8%
States 115,100 Medtronic, Inc. 7,661,056 8,963,413 0.9
(concluded) ------------ ------------ ------
15,307,411 17,604,913 1.7
Peripherals 146,000 Lexmark International
Group, Inc. (Class A) 7,553,161 9,645,125 0.9
134,600 Pitney Bowes Inc. 8,275,054 8,648,050 0.9
------------ ------------ ------
15,828,215 18,293,175 1.8
Personal Computers 334,000 Dell Computer Corporation 10,875,470 12,337,125 1.2
129,200 Gateway Inc. 8,698,636 7,622,800 0.8
------------ ------------ ------
19,574,106 19,959,925 2.0
Semiconductor Equipment 310,500 Applied Materials, Inc. 13,189,260 22,938,187 2.3
178,900 KLA-Tencor Corporation 9,599,975 11,594,956 1.1
186,100 Novellus Systems, Inc. 11,407,078 12,689,694 1.3
170,100 Teradyne, Inc. 6,825,990 12,204,675 1.2
------------ ------------ ------
41,022,303 59,427,512 5.9
Semiconductors 260,000 Altera Corporation 7,669,064 9,555,000 0.9
105,000 Broadcom Corporation (Class A) 9,423,706 15,172,500 1.5
235,400 Intel Corporation 12,256,922 13,991,587 1.4
360,000 Maxim Integrated Products, Inc. 10,841,870 23,940,000 2.4
183,700 Texas Instruments Incorporated 10,769,653 26,636,500 2.6
313,700 Vitesse Semiconductor
Corporation 14,859,642 21,292,388 2.1
648,000 Xilinx, Inc. 21,268,054 37,098,000 3.7
------------ ------------ ------
87,088,911 147,685,975 14.6
Software 343,700 BMC Software, Inc. 15,566,251 18,538,319 1.9
292,400 Citrix Systems, Inc. 9,819,093 16,429,225 1.6
1,250,400 Compuware Corporation 34,019,771 39,700,200 3.9
531,200 Microsoft Corporation 36,182,172 47,874,400 4.8
194,900 VERITAS Software Corporation 13,887,379 18,503,319 1.8
------------ ------------ ------
109,474,666 141,045,463 14.0
Technology Services 120,500 The BISYS Group, Inc. 4,808,125 7,049,250 0.7
267,700 DST Systems, Inc. 16,295,248 16,831,637 1.7
1,089,600 Keane, Inc. 41,662,588 24,652,200 2.4
154,300 Sterling Commerce, Inc. 5,144,063 5,631,950 0.6
325,000 Unisys Corporation 9,798,284 12,654,688 1.2
------------ ------------ ------
77,708,308 66,819,725 6.6
Telecommunications 150,100 AT&T Corp. 8,564,706 8,377,456 0.8
332,100 MCI WorldCom Inc. 16,429,425 28,560,600 2.8
38,000 QUALCOMM Incorporated 5,124,285 5,453,000 0.6
------------ ------------ ------
30,118,416 42,391,056 4.2
Telecommunications 221,000 ADC Telecommunications, Inc. 8,140,460 10,055,500 1.0
Equipment 75,600 JDS Uniphase Corporation 3,958,968 12,549,600 1.3
301,450 Lucent Technologies Inc. 8,978,917 20,329,034 2.0
319,200 Tellabs, Inc. 7,074,632 21,565,950 2.1
------------ ------------ ------
28,152,977 64,500,084 6.4
Total Investments in the
United States 620,021,836 895,822,453 88.6
Total Investments in Stocks 686,271,945 1,002,041,972 99.1
SHORT-TERM Face
SECURITIES Amount Issue
Commercial Paper** $ 11,232,000 General Motors Acceptance
Corp., 5.63% due 7/01/1999 11,232,000 11,232,000 1.1
Total Investments in
Short-Term Securities 11,232,000 11,232,000 1.1
Total Investments $697,503,945 1,013,273,972 100.2
============
Liabilities in Excess of Other Assets (2,327,590) (0.2)
-------------- ------
Net Assets $1,010,946,382 100.0%
============== ======
Net Asset Value: Class A--Based on net assets of $61,873,364
and 3,997,023 shares outstanding $ 15.48
==============
Class B--Based on net assets of $664,969,553
and 43,405,018 shares outstanding $ 15.32
==============
Class C--Based on net assets of $151,713,921
and 9,903,726 shares outstanding $ 15.32
==============
Class D--Based on net assets of $132,389,544
and 8,574,117 shares outstanding $ 15.44
==============
<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.
</TABLE>
PORTFOLIO CHANGES
For the Quarter Ended June 30, 1999
Additions
AT&T Corp.
*AppliedTheory Corporation
*Backweb Technologies Ltd.
Broadcom Corporation (Class A)
*Brocade Communications Systems, Inc.
*Careerbuilder, Inc.
*Copper Mountain Networks, Inc.
*Donaldson, Lufkin & Jenrette, Inc.--DLJdirect
eBay Inc.
*Extreme Networks, Inc.
Gateway Inc.
General Instrument Corporation
Guidant Corporation
*High Speed Access Corp.
*iXL Enterprises, Inc.
*Informatica Corporation
*Juniper Networks, Inc.
*Latitude Communications, Inc.
*Maker Communications, Inc.
*Marimba, Inc.
*PLX Technology, Inc.
PSINet Inc.
*Phone.com, Inc.
*Portal Software, Inc.
QUALCOMM Incorporated
*Razorfish Inc.
*Redback Networks Inc.
*Software.com, Inc.
*StarMedia Network, Inc.
Sterling Commerce, Inc.
*US Internetworking Inc.
*Value America, Inc.
Deletions
Amazon.com, Inc.
*AppliedTheory Corporation
Ascend Communications, Inc.
Autodesk, Inc.
*Backweb Technologies Ltd.
*Brocade Communications Systems, Inc.
Cadence Design Systems, Inc.
*Careerbuilder, Inc.
Compaq Computer Corporation
*Copper Mountain Networks, Inc.
*Donaldson, Lufkin & Jenrette, Inc.--DLJdirect
*Extreme Networks, Inc.
*High Speed Access Corp.
*iXL Enterprises, Inc.
*Informatica Corporation
*Juniper Networks, Inc.
*Latitude Communications, Inc.
*Maker Communications, Inc.
*Marimba, Inc.
Network Associates, Inc.
Oracle Corporation
*PLX Technology, Inc.
*Phone.com, Inc.
*Portal Software, Inc.
*Razorfish Inc.
*Redback Networks Inc.
Seagate Technology, Inc.
*Software.com, Inc.
*StarMedia Network, Inc.
Telefonaktiebolaget LM Ericsson (ADR)
*US Internetworking Inc.
*Value America, Inc.
[FN]
*Added and deleted in the same quarter.
