MERRILL LYNCH
GLOBAL
TECHNOLOGY
FUND, INC.
FUND LOGO
Annual Report
March 31, 2000
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.
Officers and
Directors
Terry K. Glenn, President and Director
Charles C. Reilly, Director
Roscoe Sudarth, Director
Richard R. West, Director
Arthur Zeikel, Director
Edward D. Zinbarg, Director
Robert C. Doll, Jr., 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
Donald Cecil and Edward H. Meyer, Directors of Merrill Lynch Global
Technology Fund, Inc. have recently retired. The Fund's Board of
Directors wishes Mr. Cecil and Mr. Meyer well in their retirements.
Merrill Lynch Global Technology Fund, Inc., March 31, 2000
DEAR SHAREHOLDER
Fiscal Year in Review
For the fiscal year ended March 31, 2000, Merrill Lynch Global
Technology Fund, Inc.'s Class A, Class B, Class C and Class D Shares
had total returns of +119.4%, +117.2%, +117.2% and +118.9%,
respectively. (Results shown do not include sales charges and would
be lower if sales charges were included. Complete performance
information can be found on pages 4--6 of this report to
shareholders.) To put technology stocks' outperformance in
perspective, the unmanaged Standard & Poor's 500 Index had a total
return of +17.9% and the Dow Jones Industrial Average was up 13.4%
for the same period. However, the Fund slightly underperformed the
average of the 103 funds that comprise the Lipper Science and
Technology group and the Merrill Lynch 100 Technology Index (MLO),
an unmanaged benchmark of the world's top technology companies.
We believe the Fund's underperformance relative to the Lipper
Science and Technology group and the MLO is because of the effects
that the pure Internet portfolios can have on those measures of
performance. We believe these Internet funds may be better served if
they were put into their own category. We are seeking possible
benchmark alternatives that better match our investment style.
However, for now we will continue to measure our performance against
the MLO, which is publicly available on a daily basis as compared to
the less timely information found for our Fund's competitors. Our
strategy for Merrill Lynch Global Technology Fund, Inc. is to offer
investors a core, well diversified (by industry and stock) grouping
of technology leaders that we hope to hold for years.
On an industry basis, we posted the strongest relative gains
relative to the MLO in computer systems (through superior stock
selection) and technology services (by underweighting this weak
industry). We lagged most with our holdings in telecommunications
(through poor security selection) and by maintaining an average cash
position of 3.2% of net assets during a raging bull market. A cash
level that low indicates that we were about as bullish as we
practically could be with a multi-billion dollar fund. The average
equity fund in the United States had a 4% cash position on March 31,
2000.
Portfolio Matters
The six months ended March 31, 2000 was a strong period for
technology investors. Merrill Lynch Global Technology Fund, Inc.'s
Class A, Class B, Class C and Class D Shares had total returns of
+82.3%, +81.4%, +81.4% and +82.1%, respectively. During the six-
month period, the Fund benefited the most from superior stock
selection in computer systems and an underweighting of the weak
technology services industry. Fund performance was hindered by poor
security selection in the telecommunications sector and because we
maintained a relatively high average cash position of 6.7%.
On a stock basis, our five biggest contributors during the six-month
period were VERITAS Software Corporation (software); Xilinx, Inc.
(semiconductors); JDS Uniphase Corporation (telecommunications
equipment); Flextronics International Ltd. (contract manufacturers);
and Network Appliance, Inc. (peripherals). Our positions in Unisys
Corp. (information technology services); Internet Capital Group,
Inc. (Internet); Synopsys, Inc. (electric design automation); Lucent
Technologies, Inc. (telecommunications equipment); and Galileo
International (medical technology) hurt performance the most. We
currently only retain our position in Internet Capital Group.
During the second half of the six-month period, we restructured the
Fund to emphasize technology's new leaders. We invested at least $40
million in VoiceStream Wireless Corporation (telecommunications);
Conexant Systems, Inc. (semiconductors); Safeguard Scientifics, Inc.
(diversified technology); and Yahoo! Inc. (Internet). We divested
several former technology leaders that we believe have lost a step.
They included Lucent Technologies, Inc. (telecommunications
equipment); Synopsys, Inc. (electric design automation); MCI
WorldCom Inc. (telecommunications); BMC Software, Inc. (software);
and DST Systems, Inc. (information technology services). The first
four companies showed an unacceptable deterioration in fundamentals.
DST Systems no longer met our more aggressive growth criterion.
The strong results experienced by technology investors masked a
sudden and unexpected drop in the period's last few days. We believe
that the NASDAQ correction was triggered by negative comments about
equities and technology stocks made by a noted investment
strategist. While valuations of most technology stocks have become
stretched and the Fund has performed exceedingly well in the almost
two years since its June 1998 inception, we continue to be bullish
on the prospects for the technology market for both 2000 and the
long term. In our opinion, the negative comments were a market
valuation judgment and not indicative of any deterioration in our
sector's fundamentals. We believe this will be a pause that
refreshes, and that because fundamentals are strong in the
technology sector, technology stocks will outperform the broader
market again in 2000.
As of March 31, 2000, the Fund was invested in 13 industries with
the largest exposures in the Internet, semiconductors, software and
telecommunications equipment industries. We believe that these
groups will continue to be the greatest beneficiaries of the "New
Economy."
In Conclusion
We thank you for your continued investment in Merrill Lynch Global
Technology Fund, Inc., and we look forward to serving your
investment 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
May 9, 2000
Merrill Lynch Global Technology Fund, Inc., March 31, 2000
PERFORMANCE DATA
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.
About Fund
Performance
Total Return
Based on a $10,000
Investment
A line graph depicting the growth of ML Global Technology Fund,
Inc.'s Class A Shares and Class B Shares compared to growth of the
S&P 500 Index. Beginning and ending values are:
6/26/98** 3/00
ML Global Technology Fund, Inc.++--
Class A Shares* $ 9,600 $28,245
ML Global Technology Fund, Inc.++--
Class B Shares* $10,000 $28,980
S&P 500 Index++++ $10,000 $13,534
A line graph depicting the growth of ML Global Technology Fund,
Inc.'s Class C Shares and Class D Shares compared to growth of the
S&P 500 Index. Beginning and ending values are:
6/26/98** 3/00
ML Global Technology Fund, Inc.++--
Class C Shares* $10,000 $29,280
ML Global Technology Fund, Inc.++--
Class D Shares* $ 9,600 $28,122
S&P 500 Index++++ $10,000 $13,534
*Assuming maximum sales charge, transaction costs and other
operating expenses, including advisory fees.
**Commencement of operations.
++MLGlobal Technology Fund, Inc. invests primarily in equity
securities of issuers that, in the opinion of the Manager, derive a
substantial portion of their income from products and services in
technology-related industries.
++++This unmanaged broad-based Index is comprised of common stocks.
Past performance is not predictive of future results.
Average Annual
Total Return
% Return Without % Return With
Class A Shares* Sales Charge Sales Charge**
Year Ended 3/31/00 +119.35% +107.84%
Inception (6/26/98) through 3/31/00 + 85.72 + 80.13
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
% Return % Return
Class B Shares* Without CDSC With CDSC**
Year Ended 3/31/00 +117.21% +113.21%
Inception (6/26/98) through 3/31/00 + 83.84 + 82.77
*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 3/31/00 +117.21% +116.21%
Inception (6/26/98) through 3/31/00 + 83.84 + 83.84
*Maximum contingent deferred sales charge is 1% and is reduced to 0%
after 1 year.
**Assuming payment of applicable contingent deferred sales charge.
% Return % Return
Class D Shares* Without CDSC With CDSC**
Year Ended 3/31/00 +118.88% +107.39%
Inception (6/26/98) through 3/31/00 + 85.26 + 79.68
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
Merrill Lynch Global Technology Fund, Inc., March 31, 2000
PERFORMANCE DATA (concluded)
<TABLE>
Recent
Performance
Results*
<CAPTION>
6 Month 12 Month Since Inception
As of March 31, 2000 Total Return Total Return Total Return
<S> <C> <C> <C>
ML Global Technology Fund, Inc. Class A Shares +82.32% +119.35% +198.10%
ML Global Technology Fund, Inc. Class B Shares +81.41 +117.21 +192.80
ML Global Technology Fund, Inc. Class C Shares +81.41 +117.21 +192.80
ML Global Technology Fund, Inc. Class D Shares +82.09 +118.88 +196.80
<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>
PORTFOLIO INFORMATION
As of March 31, 2000
Ten Largest Holdings Percent of
Represented in the Portfolio Net Assets
PMC--Sierra, Inc. 3.3%
Flextronics International Ltd. 3.3
VERITAS Software Corporation 3.1
Inktomi Corporation 2.6
Cisco Systems, Inc. 2.6
JDS Uniphase Corporation 2.6
EMC Corporation 2.4
Yahoo! Inc. 2.3
Applied Materials, Inc. 2.3
Nokia Oyj 'A' (ADR) 2.2
Ten Largest Industries Percent of
Represented in the Portfolio Net Assets
Semiconductors 19.6%
Internet 14.9
Software 14.1
Telecommunications Equipment 10.9
Contract Manufacturers 8.1
Semiconductor Capital Equipment 6.0
Peripherals 5.2
Telecommunications 4.7
Computer Systems 3.6
Data Communications 3.1
<TABLE>
SCHEDULE OF INVESTMENTS (in US Dollars)
<CAPTION>
Shares Percent of
COUNTRY Industries Held Stocks Value Net Assets
<S> <S> <C> <S> <C> <C>
Canada Contract 904,600 ++Celestica Inc. $ 48,000,338 1.2%
Manufacturers
Telecommunications 424,000 Nortel Networks Corporation 53,424,000 1.3
Equipment
Total Investments in Canada 101,424,338 2.5
Finland Telecommunications 408,200 Nokia Oyj 'A' (ADR)* 88,681,450 2.2
Equipment
Total Investments in Finland 88,681,450 2.2
France Semiconductors 207,400 ++STMicroelectronics NV (NY Registered Shares) 38,822,688 1.0
Total Investments in France 38,822,688 1.0
Singapore Contract 1,878,400 ++Flextronics International Ltd. 132,192,400 3.3
Manufacturers
Total Investments in Singapore 132,192,400 3.3
Taiwan Semiconductors 606,941 ++Taiwan Semiconductor Manufacturing
Company Ltd. (ADR)* 34,595,637 0.9
Total Investments in Taiwan 34,595,637 0.9
United Computer Systems 770,000 ++EMC Corporation 96,250,000 2.4
States 532,300 ++Sun Microsystems, Inc. 49,869,856 1.2
-------------- ------
146,119,856 3.6
Contract 1,108,000 ++Jabil Circuit, Inc. 47,921,000 1.2
Manufacturers 766,600 ++Sanmina Corporation 51,793,412 1.3
1,070,000 ++Solectron Corporation 42,866,875 1.1
-------------- ------
142,581,287 3.6
Data 1,347,000 ++Cisco Systems, Inc. 104,139,938 2.6
Communications 85,000 ++Juniper Networks, Inc. 22,386,875 0.5
-------------- ------
126,526,813 3.1
Diversified 100,000 Corning Incorporated 19,400,000 0.5
Technology 494,300 ++Safeguard Scientifics, Inc. 34,755,469 0.9
-------------- ------
54,155,469 1.4
Internet 924,400 ++America Online, Inc. 62,165,900 1.5
247,300 ++CMGI Inc. 28,006,725 0.7
410,900 ++DoubleClick Inc. 38,470,513 0.9
312,000 ++eBay Inc. 54,892,500 1.4
453,200 ++Exodus Communications, Inc. 63,674,600 1.6
228,000 ++InfoSpace.com, Inc. 33,060,000 0.8
534,300 ++Inktomi Corporation 104,155,106 2.6
301,200 ++Internet Capital Group, Inc. 27,202,125 0.7
126,400 ++Network Solutions, Inc. 19,426,100 0.5
</TABLE>
Merrill Lynch Global Technology Fund, Inc., March 31, 2000
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in US Dollars)
<CAPTION>
Shares Percent of
COUNTRY Industries Held Stocks Value Net Assets
<S> <S> <C> <S> <C> <C>
United Internet 696,300 ++Priceline.com Incorporated $ 55,660,481 1.4%
States (concluded) 265,400 ++TMP Worldwide Inc. 20,634,850 0.5
(concluded) 544,000 ++Yahoo! Inc. 93,194,000 2.3
-------------- ------
600,542,900 14.9
Peripherals 703,200 ++Electronics for Imaging, Inc. 42,104,100 1.1
424,700 ++Lexmark International Group, Inc. (Class A) 44,912,025 1.1
795,400 ++Network Appliance, Inc. 65,769,637 1.6
1,249,700 Pitney Bowes Inc. 55,845,969 1.4
-------------- ------
208,631,731 5.2
Personal Computers 770,000 ++Dell Computer Corporation 41,531,875 1.0
Semiconductor 985,400 ++Applied Materials, Inc. 92,873,950 2.3
Capital
Equipment 523,600 ++KLA-Tencor Corporation 44,080,575 1.1
833,400 ++Novellus Systems, Inc. 46,774,575 1.2
682,000 ++Teradyne, Inc. 56,094,500 1.4
-------------- ------
239,823,600 6.0
Semiconductors 817,000 ++Altera Corporation 72,764,062 1.8
222,000 ++Broadcom Corporation (Class A) 53,918,250 1.3
496,800 ++Conexant Systems, Inc. 35,738,550 0.9
392,400 Intel Corporation 51,723,225 1.3
754,800 ++Intersil Holding Corporation 39,013,725 1.0
1,170,400 ++Maxim Integrated Products, Inc. 83,171,550 2.1
660,000 ++PMC--Sierra, Inc. 134,392,500 3.3
430,800 Texas Instruments Incorporated 68,928,000 1.7
901,200 ++Vitesse Semiconductor Corporation 86,684,175 2.2
1,002,000 ++Xilinx, Inc. 82,915,500 2.1
-------------- ------
709,249,537 17.7
Software 255,500 ++Amdocs Limited 18,827,156 0.5
720,000 ++Citrix Systems, Inc. 47,655,000 1.2
94,000 ++Commerce One, Inc. 14,029,500 0.3
418,200 Computer Associates International, Inc. 24,752,213 0.6
323,000 ++Electronic Arts Inc. 22,973,375 0.6
228,700 ++MicroStrategy Incorporated (Class A) 19,896,900 0.5
725,200 ++Microsoft Corporation 77,324,450 1.9
622,200 ++Oracle Corporation 48,531,600 1.2
300,000 ++Portal Software, Inc. 17,081,250 0.4
725,000 ++Siebel Systems, Inc. 86,546,875 2.2
570,600 ++TIBCO Software Inc. 46,503,900 1.2
942,600 ++VERITAS Software Corporation 123,480,600 3.1
100,000 ++Vignette Corporation 16,025,000 0.4
-------------- ------
563,627,819 14.1
Technology 340,000 ++Scient Corporation 30,833,750 0.8
Services 1,096,600 ++Unisys Corporation 27,963,300 0.7
-------------- ------
58,797,050 1.5
Telecommunications 607,500 ++Metromedia Fiber Network, Inc. (Class A) 58,813,594 1.5
180,000 ++Phone.com, Inc. 29,351,250 0.7
340,000 ++QUALCOMM Incorporated 50,723,750 1.3
379,800 ++VoiceStream Wireless Corporation 49,136,625 1.2
-------------- ------
188,025,219 4.7
Telecommunications 859,200 ++JDS Uniphase Corporation 103,533,600 2.6
Equipment 307,457 Motorola, Inc. 43,774,190 1.1
130,000 ++Redback Networks Inc. 38,577,500 0.9
307,700 ++Sycamore Networks, Inc. 39,616,375 1.0
1,150,800 ++Tellabs, Inc. 72,428,475 1.8
-------------- ------
297,930,140 7.4
Total Investments in the United States 3,377,543,296 84.2
Total Investments in Stocks (Cost--
$1,881,313,924) 3,773,259,809 94.1
SHORT-TERM Face
SECURITIES Amount Issue
Commercial $103,094,000 General Electric Capital Corp., 6.25%
Paper** due 4/03/2000 103,058,203 2.6
37,000,000 Goldman Sachs Group, Inc., 6.06% due
4/17/2000 36,900,347 0.9
30,000,000 Hertz Corporation, 5.95% due 4/06/2000 29,975,208 0.8
42,000,000 Transamerica Finance Corporation, 6% due
4/11/2000 41,930,000 1.0
Total Investments in Short-Term Securities
(Cost--$211,863,758) 211,863,758 5.3
Total Investments (Cost--$2,093,177,682) 3,985,123,567 99.4
Other Assets Less Liabilities 23,863,872 0.6
-------------- ------
Net Assets $4,008,987,439 100.0%
============== ======
<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.
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Global Technology Fund, Inc., March 31, 2000
<TABLE>
STATEMENT OF ASSETS AND LIABILITIES
<CAPTION>
As of March 31, 2000
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$2,093,177,682) $3,985,123,567
Cash 13,792
Receivables:
Securities sold $ 38,274,588
Capital shares sold 16,237,832
Dividends 309,831 54,822,251
--------------
Deferred organization expenses 47,827
Prepaid registration fees and other assets 123,618
--------------
Total assets 4,040,131,055
--------------
Liabilities: Payables:
Capital shares redeemed 15,259,783
Securities purchased 9,975,369
Investment adviser 3,088,832
Distributor 2,465,012 30,788,996
--------------
Accrued expenses 354,620
--------------
Total liabilities 31,143,616
--------------
Net Assets: Net assets $4,008,987,439
==============
Net Assets Class A Shares of Common Stock, $.10 par value, 100,000,000
Consist of: shares authorized $ 2,863,905
Class B Shares of Common Stock, $.10 par value, 200,000,000
shares authorized 7,632,184
Class C Shares of Common Stock, $.10 par value, 100,000,000
shares authorized 1,525,612
Class D Shares of Common Stock, $.10 par value, 100,000,000
shares authorized 1,595,810
Paid-in capital in excess of par 1,996,374,884
Undistributed realized capital gains on investments and foreign
currency transactions--net 107,049,159
Unrealized appreciation on investments--net 1,891,945,885
--------------
Net assets $4,008,987,439
==============
Net Asset Class A--Based on net assets of $853,809,909 and 28,639,051
Value: shares outstanding $ 29.81
==============
Class B--Based on net assets of $2,234,835,930 and 76,321,835
shares outstanding $ 29.28
==============
Class C--Based on net assets of $446,669,769 and 15,256,118
shares outstanding $ 29.28
==============
Class D--Based on net assets of $473,671,831 and 15,958,101
shares outstanding $ 29.68
==============
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENT OF OPERATIONS
<CAPTION>
For the Year Ended March 31, 2000
<S> <S> <C> <C>
Investment Interest and discount earned $ 6,055,633
Income: Dividends (net of $85,185 foreign withholding tax) 1,349,368
Other 77,045
--------------
Total income 7,482,046
--------------
Expenses: Investment advisory fees $ 18,767,114
Account maintenance and distribution fees--Class B 11,393,953
Account maintenance and distribution fees--Class C 2,291,934
Transfer agent fees--Class B 1,150,679
Account maintenance fees--Class D 573,374
Reorganization expenses 364,536
Transfer agent fees--Class A 272,697
Transfer agent fees--Class C 245,155
Registration fees 200,523
Transfer agent fees--Class D 193,983
Printing and shareholder reports 151,383
Accounting services 149,892
Custodian fees 140,505
Professional fees 113,137
Directors' fees and expenses 44,734
Amortization of organization expenses 14,834
Pricing fees 6,095
Other 25,987
--------------
Total expenses 36,100,515
--------------
Investment loss--net (28,618,469)
--------------
Realized & Realized gain from:
Unrealized Investments--net 228,978,659
Gain on Foreign currency transactions--net 28 228,978,687
Investments & --------------
Foreign Currency Change in unrealized appreciation on investments--net 1,487,066,703
Transactions --------------
- --Net: Net Increase in Net Assets Resulting from Operations $1,687,426,921
==============
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Global Technology Fund, Inc., March 31, 2000
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
For the For the Period
Year Ended June 26, 1998++
March 31, to March 31,
Increase in Net Assets: 2000 1999
<S> <S> <C> <C>
Operations: Investment loss--net $ (28,618,469) $ (7,447,308)
Realized gain on investments and foreign currency
transactions--net 228,978,687 6,603,828
Change in unrealized appreciation on investments--net 1,487,066,703 192,477,693
-------------- --------------
Net increase in net assets resulting from operations 1,687,426,921 191,634,213
-------------- --------------
Capital Share Net increase in net assets from capital share
Transactions: transactions 1,472,496,394 657,329,911
-------------- --------------
Net Assets: Total increase in net assets 3,159,923,315 848,964,124
Beginning of period 849,064,124 100,000
-------------- --------------
End of period $4,008,987,439 $ 849,064,124
============== ==============
++Commencement of operations.
See Notes to Financial Statements.
</TABLE>
<TABLE>
FINANCIAL HIGHLIGHTS
<CAPTION>
Class A Class B
For the For the
Period Period
The following per share data and ratios have been derived For the June 26, For the June 26,
from information provided in the financial statements. Year Ended 1998++ to Year Ended 1998++ to
March 31, March 31, March 31, March 31,
Increase (Decrease) in Net Asset Value: 2000++++ 1999 2000++++ 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 (.16) (.05) (.35) (.13)
Realized and unrealized gain on investments
and foreign currency transactions--net 16.38 3.64 16.15 3.61
---------- ---------- ---------- ----------
Total from investment operations 16.22 3.59 15.80 3.48
---------- ---------- ---------- ----------
Net asset value, end of period $ 29.81 $ 13.59 $ 29.28 $ 13.48
========== ========== ========== ==========
Total Investment Based on net asset value per share 119.35% 35.90%+++ 117.21% 34.80%+++
Return:** ========== ========== ========== ==========
Ratios to Average Expenses 1.11% 1.25%* 2.13% 2.27%*
Net Assets: ========== ========== ========== ==========
Investment loss--net (.70%) (.74%)* (1.75%) (1.76%)*
========== ========== ========== ==========
Supplemental Net assets, end of period (in thousands) $ 853,810 $ 41,382 $2,234,836 $ 565,111
Data: ========== ========== ========== ==========
Portfolio turnover 60.03% 49.72% 60.03% 49.72%
========== ========== ========== ==========
Class C Class D
For the For the
Period Period
The following per share data and ratios have been derived For the June 26, For the June 26,
from information provided in the financial statements. Year Ended 1998++ to Year Ended 1998++ to
March 31, March 31, March 31, March 31,
Increase (Decrease) in Net Asset Value: 2000++++ 1999 2000++++ 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 (.35) (.13) (.20) (.07)
Realized and unrealized gain on investments
and foreign currency transactions--net 16.15 3.61 16.32 3.63
---------- ---------- ---------- ----------
Total from investment operations 15.80 3.48 16.12 3.56
---------- ---------- ---------- ----------
Net asset value, end of period $ 29.28 $ 13.48 $ 29.68 $ 13.56
========== ========== ========== ==========
Total Investment Based on net asset value per share 117.21% 34.80%+++ 118.88% 35.60%+++
Return:** ========== ========== ========== ==========
Ratios to Expenses 2.14% 2.28%* 1.37% 1.50%*
Average ========== ========== ========== ==========
Net Assets: Investment loss--net (1.76%) (1.76%)* (.98%) (1.00%)*
========== ========== ========== ==========
Supplemental Net assets, end of period (in thousands) $ 446,669 $ 127,461 $ 473,672 $ 115,110
Data: ========== ========== ========== ==========
Portfolio turnover 60.03% 49.72% 60.03% 49.72%
========== ========== ========== ==========
*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., March 31, 2000
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 accounting
principles generally accepted in the United States of America, which
may require the use of management accruals and estimates. The Fund
offers four classes of shares under the Merrill Lynch Select
Pricing SM System. Shares of Class A and Class D are sold with a
front-end sales charge. Shares of Class B and Class C may be subject
to a contingent deferred sales charge. All classes of shares have
identical voting, dividend, liquidation, and other rights and the
same terms and conditions, except that Class B, Class C and Class D
Shares bear certain expenses related to the account maintenance of
such shares, and Class B and Class C Shares also bear certain
expenses related to the distribution of such shares. Each class has
exclusive voting rights with respect to matters relating to its
account maintenance and distribution expenditures. The following is
a summary of significant accounting policies followed by the Fund.
(a) Valuation of securities--Portfolio securities 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 investment strategies to increase or decrease the level of
risk to which the Fund is exposed more quickly and efficiently than
transactions in other types of instruments. 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.
(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.
(h) Reclassification--Generally accepted accounting principles
require that certain components of net assets be adjusted to reflect
permanent financial and tax reporting. Accordingly, current year's
permanent book/tax differences of $28,253,941 have been reclassified
between undistributed net realized capital gains and accumulated net
investment loss and $364,528 has been reclassified between paid-in
capital in excess of par and accumulated net investment loss. These
reclassifications have no effect on net assets or net asset value
per share.
2. Investment Advisory Agreement and
Transactions with Affiliates:
The Fund has entered into an Investment Advisory Agreement with
Merrill Lynch Asset Management, L.P. ("MLAM"). The general partner
of MLAM is Princeton Services, Inc. ("PSI"), an indirect wholly-
owned subsidiary of Merrill Lynch & Co., Inc. ("ML & Co."), which is
the limited partner. The Fund has also entered into a Distribution
Agreement and Distribution Plans with Merrill Lynch Funds
Distributor ("MLFD" or 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 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
Maintenance Distribution
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 year ended March 31, 2000, 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:
Merrill Lynch Global Technology Fund, Inc., March 31, 2000
NOTES TO FINANCIAL STATEMENTS (concluded)
MLFD MLPF&S
Class A $ 3,504 $ 31,919
Class D $99,085 $1,354,092
For the year ended March 31, 2000, MLPF&S received contingent
deferred sales charges of $2,038,402 and $105,446 relating to
transactions in Class B and Class C Shares, respectively.
Furthermore, MLPF&S received contingent deferred sales charges of
$23,082 relating to transactions subject to front-end sales charge
waivers in Class D Shares.
In addition, MLPF&S received $106,449 in commissions on the
execution of portfolio security transactions for the Fund for the
year ended March 31, 2000.
Financial Data Services, Inc. ("FDS"), a wholly-owned subsidiary of
ML & Co., is the Fund's transfer agent.
Accounting services are provided to the Fund by MLAM at cost.
Certain officers and/or directors of the Fund are officers and/or
directors of MLAM, PSI, FDS, PFD, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the year ended March 31, 2000 were $1,765,065,704 and
$1,101,679,468, respectively.
Net realized gains (losses) for the year ended March 31, 2000 and
net unrealized gains as of March 31, 2000 were as follows:
Realized Unrealized
Gains (Losses) Gains
Long-term investments $ 228,979,265 $1,891,945,885
Short-term investments (606) --
Foreign currency transactions 28 --
-------------- --------------
Total $ 228,978,687 $1,891,945,885
============== ==============
As of March 31, 2000, net unrealized appreciation for Federal income
tax purposes aggregated $1,891,917,618, of which $1,989,356,518
related to appreciated securities and $97,438,900 related to
depreciated securities. The aggregate cost of investments at March
31, 2000 for Federal income tax purposes was $2,093,205,949.
4. Capital Share Transactions:
Net increase in net assets derived from capital share transactions
was $1,472,496,394 and $657,329,911 for the year ended March 31,
2000 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 Year Dollar
Ended March 31, 2000 Shares Amount
Shares sold 15,778,965 $ 356,655,626
Shares issued resulting from
reorganization 15,458,403 265,325,151
------------- --------------
Total issued 31,237,368 621,980,777
Shares redeemed (5,644,318) (119,410,571)
------------- --------------
Net increase 25,593,050 $ 502,570,206
============= ==============
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
============= ==============
++Prior to June 26, 1998 (commencement of operations), the Fund
issued 2,500 shares to MLAM for $25,000.
Class B Shares for the Year Dollar
Ended March 31, 2000 Shares Amount
Shares sold 31,594,024 $ 677,564,514
Shares issued resulting from
reorganization 14,980,153 253,904,256
------------- --------------
Total issued 46,574,177 931,468,770
Shares redeemed (11,267,504) (227,509,960)
Automatic conversion of
shares (906,601) (20,582,538)
------------- --------------
Net increase 34,400,072 $ 683,376,272
============= ==============
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
============= ==============
++Prior to June 26, 1998 (commencement of operations), the Fund
issued 2,500 shares to MLAM for $25,000.
Class C Shares for the Year Dollar
Ended March 31, 2000 Shares Amount
Shares sold 7,405,146 $ 161,331,051
Shares issued resulting from
reorganization 1,014,152 17,187,596
------------- --------------
Total issued 8,419,298 178,518,647
Shares redeemed (2,619,220) (52,392,456)
------------- --------------
Net increase 5,800,078 $ 126,126,191
============= ==============
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
============= ==============
++Prior to June 26, 1998 (commencement of operations), the Fund
issued 2,500 shares to MLAM for $25,000.
Class D Shares for the Year Dollar
Ended March 31, 2000 Shares Amount
Shares sold 7,043,063 $ 157,761,514
Automatic conversion of
shares 896,480 20,582,538
Shares issued resulting from
reorganization 2,596,925 44,435,997
------------- --------------
Total issued 10,536,468 222,780,049
Shares redeemed (3,067,065) (62,356,324)
------------- --------------
Net increase 7,469,403 $ 160,423,725
============= ==============
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
============= ==============
++Prior to June 26, 1998 (commencement of operations), the Fund
issued 2,500 shares to MLAM for $25,000.
5. Capital Loss Carryforward:
At March 31, 2000, the Fund had a net capital loss carryforward of
approximately $2,832,000, all of which expires in 2006. This amount
will be available to offset like amounts of any future taxable
gains.
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 34,049,633 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.
Merrill Lynch Global Technology Fund, Inc., March 31, 2000
<AUDIT-REPORT>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders,
Merrill Lynch Global Technology Fund, Inc.:
We have audited the accompanying statement of assets and
liabilities, including the schedule of investments of Merrill Lynch
Global Technology Fund, Inc., as of March 31, 2000, the related
statements of operations for the year then ended and changes in net
assets, and the financial highlights for the year then ended and for
the period June 26, 1998 (commencement of operations) to March 31,
1999. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to
express an opinion on these financial statements and financial
highlights based on our audits.
We conducted our audits in accordance with auditing standards
generally accepted in the United States of America. Those standards
require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included
confirmation of securities owned at March 31, 2000 by correspondence
with the custodian and broker. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, such financial statements and financial highlights
present fairly, in all material respects, the financial position of
Merrill Lynch Global Technology Fund, Inc. as of March 31, 2000, the
results of its operations, the changes in its net assets, and the
financial highlights for the respective stated periods, in
accordance with accounting principles generally accepted in the
United States of America.
Deloitte & Touche LLP
Princeton, New Jersey
May 12, 2000
</AUDIT-REPORT>
