MERRILL LYNCH
GLOBAL
TECHNOLOGY
FUND, INC.
FUND LOGO
Semi-Annual Report
September 30, 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.
Portfolio
Information
As of 9/30/00
Ten Largest Industries Percent of
Represented in the Portfolio Net Assets
Software 18.8%
Semiconductors 16.7
Optical Components & Networking 11.5
Contract Manufacturers 10.2
Internet 9.9
Data Communications 5.4
Computer Systems 5.3
Semiconductor Equipment 4.8
Telecommunications 4.7
Peripherals 3.0
Ten Largest Holdings Percent of
Represented in the Portfolio Net Assets
Flextronics International Ltd. 3.6%
EMC Corporation 3.4
Cisco Systems, Inc. 3.1
PMC-Sierra, Inc. 3.1
CIENA Corporation 3.0
VERITAS Software Corporation 2.5
VeriSign, Inc. 2.5
Nortel Networks Corporation 2.5
JDS Uniphase Corporation 2.4
Applied Materials, Inc. 2.4
Merrill Lynch Global Technology Fund, Inc., September 30, 2000
DEAR SHAREHOLDER
For the six months ended September 30, 2000, Merrill Lynch Global
Technology Fund, Inc.'s Class A, Class B, Class C and Class D Shares
had total returns of -11.36%, -11.81%, -11.85% and -11.49%,
respectively. (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.) The Fund's performance compared favorably relative to
the -19.6% return for the NASDAQ Composite Index and the -13.8%
decline for the Merrill Lynch 100 Technology Index (MLO), an
unmanaged benchmark of the world's top technology companies. For the
same period, the average return of the 218 funds (including multiple
share classes) included in the Lipper Science and Technology Index
was -12.8%.
On an industry basis, we posted the strongest gains in the period as
compared to the MLO by maintaining relative overweighted positions
in contract manufacturers and optical components and networking, and
by keeping an underweighted position in personal computers.
Detrimental to relative performance was the Fund's overweighted
positions in the Internet and semiconductor equipment sector and its
underweighted position in the information technology (IT) services
space.
The Fund's superior stock selection in computer systems, contract
manufacturers, semiconductors, software and telecommunications
equipment was most beneficial to relative performance. The strongest
individual performers included EMC Corporation (computer systems),
Flextronics International Ltd. (contract manufacturing), Applied
Micro Circuits Corporation (semiconductors), Siebel Systems, Inc.
(software), and Juniper Networks, Inc. (telecommunications
equipment). We held each of these stocks for the entire six-month
period, with the exception of Applied Micro Circuits, which we
purchased in early May. Detrimental to performance was the Fund's
stock selection in data communications, optical components and
networking and IT services.
The first quarter of 2000 saw technology markets reach unprecedented
highs as year 2000-related fears proved unfounded. However, positive
investor sentiment began to wane in late March as several noted Wall
Street strategists began to question the lofty stock valuations.
Once popular Internet stocks were trampled. What followed was the
worst NASDAQ correction since the 1970s. Market performance has
since been extremely volatile, with little indication of either a
broad upward or downward trend.
We believe that the NASDAQ correction has been mostly in response to
a negative shift in investor sentiment and not in response to much
deterioration in the fundamentals of most technology companies.
Based on this belief, we used the crisis to trim from the Fund any
positions in second tier names, even occasionally at a loss, in
order to restructure the portfolio to enhance its bounce more
quickly when investor interest in technology returns. We believe
that when positive sentiment returns, those stocks with proven
business models and established market leadership will be the first
to benefit.
Given the continued market volatility, we have been wary about
initiating new positions or adding to existing stocks and have
maintained a relatively high cash position (6.7% of net assets as of
September 30, 2000). We believe that fundamentals remain strong in
the technology sector, so we continue to be bullish over the long
term. However, we are cautious over the near term, and believe that
there will be more market volatility. We do believe that technology
stocks will outperform the broader markets again in 2000, but that
much of these gains will come on the seasonal strength late in the
fourth quarter.
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
November 1, 2000
PROXY RESULTS
During the six-month period ended September 30, 2000, Merrill Lynch
Global Technology Fund, Inc.'s shareholders voted on the following
proposals. The proposals were approved at a shareholders' meeting on
July 25, 2000. The description of each proposal and number of shares
voted are as follows:
<TABLE>
<CAPTION>
Shares Voted
For
<S> <S> <C>
1. To elect the Fund's Board of Directors: Terry K. Glenn 123,182,832
Ronald W. Forbes 123,152,888
Cynthia A. Montgomery 123,183,847
Charles C. Reilly 123,126,332
Kevin A. Ryan 123,167,858
Roscoe S. Suddarth 123,173,412
Richard R. West 123,100,896
Arthur Zeikel 123,071,588
Edward D. Zinbarg 123,145,590
<CAPTION>
Shares Voted Shares Voted Shares Voted
For Against Abstain
<S> <C> <C> <C>
2. To ratify the selection of Deloitte & Touche LLP as the Fund's
independent auditors for the current fiscal year. 119,791,458 1,338,525 4,736,506
3. To permit the conversion of the Fund to "master/feeder" structure. 111,780,928 5,640,122 8,445,439
</TABLE>
Merrill Lynch Global Technology Fund, Inc., September 30, 2000
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>
6 Month 12 Month Since Inception
As of September 30, 2000 Total Return Total Return Total Return
<S> <C> <C> <C>
ML Global Technology Fund, Inc. Class A Shares -11.36% +61.62% +164.24%
ML Global Technology Fund, Inc. Class B Shares -11.81 +59.99 +158.22
ML Global Technology Fund, Inc. Class C Shares -11.85 +59.92 +158.12
ML Global Technology Fund, Inc. Class D Shares -11.49 +61.17 +162.70
*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**
One Year Ended 9/30/00 +61.62% +53.13%
Inception (6/26/98) through 9/30/00 +53.63 +50.01
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
% Return % Return
Class B Shares* Without CDSC With CDSC**
One Year Ended 9/30/00 +59.99% +55.99%
Inception (6/26/98) through 9/30/00 +52.07 +51.55
*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**
One Year Ended 9/30/00 +59.92% +58.92%
Inception (6/26/98) through 9/30/00 +52.05 +52.05
*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**
One Year Ended 9/30/00 +61.17% +52.71%
Inception (6/26/98) through 9/30/00 +53.23 +49.63
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
Merrill Lynch Global Technology Fund, Inc., September 30, 2000
<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>
Bermuda Telecommunications 1,137,600 ++Global Crossing Ltd. $ 35,782,235 $ 35,265,600 1.0%
Total Investments in Bermuda 35,782,235 35,265,600 1.0
Canada Contract 1,245,200 ++Celestica Inc. 35,173,327 86,230,100 2.3
Manufacturers 1,523,700 Nortel Networks Corporation 48,063,237 90,755,381 2.5
Optical Components
& Networking
Total Investments in Canada 83,236,564 176,985,481 4.8
Finland Telecommunications 1,632,800 Nokia Oyj 'A' (ADR)* 25,120,266 65,005,850 1.8
Equipment
Total Investments in Finland 25,120,266 65,005,850 1.8
Netherlands Semiconductor 840,100 ++ASM Lithography Holding NV
Equipment (NY Registered Shares) 33,236,624 27,145,731 0.7
Total Investments in the Netherlands 33,236,624 27,145,731 0.7
Singapore Contract 1,628,400 ++Flextronics International Ltd. 28,065,221 133,630,575 3.6
Manufacturers
Total Investments in Singapore 28,065,221 133,630,575 3.6
Taiwan Semiconductors 1,167,284 ++Taiwan Semiconductor Manufacturing
Company Ltd. (ADR)* 27,910,929 23,783,412 0.7
Total Investments in Taiwan 27,910,929 23,783,412 0.7
United Computer Systems 1,240,000 ++EMC Corporation 14,120,032 122,915,000 3.4
States 604,300 ++Sun Microsystems, Inc. 12,148,617 71,080,788 1.9
-------------- -------------- ------
26,268,649 193,995,788 5.3
Contract 1,108,000 ++Jabil Circuit, Inc. 9,404,708 62,879,000 1.7
Manufacturers 691,100 ++Sanmina Corporation 26,092,451 64,704,237 1.8
631,500 ++Solectron Corporation 30,042,350 29,127,938 0.8
-------------- -------------- ------
65,539,509 156,711,175 4.3
Data 35,800 ++Avici Systems Inc. 1,109,800 3,398,762 0.1
Communications 2,064,700 ++Cisco Systems, Inc. 67,067,319 114,074,675 3.1
376,700 ++Juniper Networks, Inc. 32,667,407 82,497,300 2.2
-------------- -------------- ------
100,844,526 199,970,737 5.4
Internet 1,332,400 ++America Online, Inc. 57,295,545 71,616,500 1.9
938,600 ++eBay Inc. 76,453,299 64,528,750 1.8
906,400 ++Exodus Communications, Inc. 4,904,060 44,810,150 1.2
440,000 ++Gemstar-TV Guide International,
Inc. 29,444,279 38,362,500 1.0
456,000 ++InfoSpace.com, Inc. 32,502,230 13,765,500 0.4
534,300 ++Inktomi Corporation 35,030,248 60,910,200 1.7
265,400 ++TMP Worldwide Inc. 20,659,454 21,232,000 0.6
544,000 ++Yahoo! Inc. 64,731,227 49,674,000 1.3
-------------- -------------- ------
321,020,342 364,899,600 9.9
Optical Components 891,800 ++CIENA Corporation 96,806,405 109,468,450 3.0
& Networking 191,000 Corning Incorporated 41,159,510 56,727,000 1.5
211,800 ++Corvis Corporation 10,302,845 13,012,462 0.4
13,600 ++Exfo Electro-Optical Engineering
Inc. 353,600 592,450 0.0
934,200 ++JDS Uniphase Corporation 23,333,350 88,398,675 2.4
260,000 ++Redback Networks Inc. 35,541,002 42,818,750 1.2
63,000 ++SDL Inc. 20,912,390 19,514,250 0.5
32,300 ++Stratos Lightwave, Inc. 678,300 1,045,712 0.0
-------------- -------------- ------
229,087,402 331,577,749 9.0
Peripherals 146,000 ++Brocade Communications Systems, Inc. 19,300,514 34,474,250 0.9
61,800 ++Inrange Technologies Corporation
(Class B) 988,800 3,275,400 0.1
567,800 ++Network Appliance, Inc. 5,614,222 72,323,525 2.0
-------------- -------------- ------
25,903,536 110,073,175 3.0
Personal Computers 755,650 ++Dell Computer Corporation 27,929,760 23,236,237 0.6
Semiconductor 1,484,500 ++Applied Materials, Inc. 68,702,553 87,956,625 2.4
Equipment 847,900 ++KLA-Tencor Corporation 32,101,146 34,922,881 0.9
818,100 ++Teradyne, Inc. 32,497,447 28,633,500 0.8
-------------- -------------- ------
133,301,146 151,513,006 4.1
Semiconductors 1,388,000 ++Altera Corporation 21,085,455 66,277,000 1.8
269,000 ++Applied Micro Circuits Corporation 28,558,523 55,683,000 1.5
150,000 ++Broadcom Corporation (Class A) 6,913,705 36,562,500 1.0
880,000 ++Cypress Semiconductor Corporation 37,707,252 36,575,000 1.0
630,000 ++Intersil Holding Corporation 27,035,990 31,421,250 0.9
1,000,000 ++Maxim Integrated Products, Inc. 15,549,495 80,437,500 2.2
528,000 ++PMC-Sierra, Inc. 31,155,338 113,652,000 3.1
901,200 ++Vitesse Semiconductor Corporation 28,844,529 80,094,150 2.2
1,002,000 ++Xilinx, Inc. 14,870,648 85,984,125 2.3
-------------- -------------- ------
211,720,935 586,686,525 16.0
Software 553,100 ++Amdocs Limited 41,451,954 34,499,612 0.9
248,900 ++Ariba, Inc. 35,051,676 35,654,925 1.0
599,800 ++BEA Systems, Inc. 41,342,709 46,709,425 1.3
1,041,800 ++Commerce One, Inc. 75,502,082 81,781,300 2.2
326,400 ++Mercury Interactive Corp. 38,480,489 51,163,200 1.4
878,800 ++Oracle Corporation 42,109,849 69,205,500 1.9
300,000 ++Portal Software, Inc. 21,435,789 11,962,500 0.3
439,800 ++Siebel Systems, Inc. 17,397,574 48,927,750 1.3
647,700 ++TIBCO Software Inc. 31,996,007 54,649,688 1.5
652,900 ++VERITAS Software Corporation 9,732,711 92,956,638 2.5
455,480 ++VeriSign, Inc. 73,529,477 92,263,168 2.5
628,600 ++webMethods, Inc. 60,981,540 72,289,000 2.0
-------------- -------------- ------
489,011,857 692,062,706 18.8
</TABLE>
Merrill Lynch Global Technology Fund, Inc., September 30, 2000
<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 Telecommunications 701,000 ++Comverse Technology, Inc. $ 62,467,446 $ 75,708,000 2.1%
States 1,215,000 ++Metromedia Fiber Network, Inc.
(concluded) (Class A) 40,907,974 29,463,750 0.8
639,000 ++Nextel Communications, Inc.
(Class A) 38,876,712 29,873,250 0.8
-------------- -------------- ------
142,252,132 135,045,000 3.7
Telecommunications 738,771 Motorola, Inc. 16,910,428 20,870,281 0.6
Equipment
Total Investments in the
United States 1,789,790,222 2,966,641,979 80.7
Total Investments in Stocks 2,023,142,061 3,428,458,628 93.3
SHORT-TERM Face
SECURITIES Amount Issue
Commercial $20,000,000 AEP Inc., 6.50% due 10/27/2000 19,902,500 19,902,500 0.5
Paper** 25,000,000 Gannett Company, 6.49% due
10/05/2000 24,977,465 24,977,465 0.7
65,756,000 General Motors Acceptance Corp.,
6.75% due 10/02/2000 65,731,342 65,731,342 1.8
25,000,000 Newell Rubbermaid Inc., 6.48% due
10/24/2000 24,892,000 24,892,000 0.7
30,000,000 Target Corporation, 6.49% due
10/02/2000 29,989,183 29,989,183 0.8
-------------- -------------- ------
165,492,490 165,492,490 4.5
US Government 58,000,000 Federal Home Loan Banks, 6.42% due
Agency Obligations** 10/20/2000 57,793,444 57,793,444 1.6
Freddie Mac Participation
Certificates:
20,000,000 6.41% due 10/03/2000 19,989,317 19,989,317 0.5
55,000,000 6.44% due 10/24/2000 54,763,867 54,763,867 1.5
-------------- -------------- ------
132,546,628 132,546,628 3.6
Total Investments in Short-Term Securities 298,039,118 298,039,118 8.1
--------------
Total Investments $2,321,181,179 3,726,497,746 101.4
==============
Liabilities in Excess of Other Assets (51,207,407) (1.4)
-------------- ------
Net Assets $3,675,290,339 100.0%
============== ======
*American Depositary Receipts (ADR).
**Commercial Paper and certain US Government Agency Obligations are
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>
<TABLE>
STATEMENT OF ASSETS AND LIABILITIES
<CAPTION>
As of September 30, 2000
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$2,321,181,179) $3,726,497,746
Cash 293
Receivables:
Securities sold $ 11,164,074
Capital shares sold 3,984,709
Dividends 29,551 15,178,334
--------------
Deferred organization expenses 47,827
Prepaid registration fees and other assets 127,588
--------------
Total assets 3,741,851,788
--------------
Liabilities: Payables:
Securities purchased 56,458,175
Capital shares redeemed 4,633,166
Investment adviser 2,841,058
Distributor 2,084,350 66,016,749
--------------
Accrued expenses 544,700
--------------
Total liabilities 66,561,449
--------------
Net Assets: Net assets $3,675,290,339
==============
Net Assets Class A Shares of Common Stock, $.10 par value,
Consist of: 100,000,000 shares authorized $ 3,240,382
Class B Shares of Common Stock, $.10 par value,
200,000,000 shares authorized 7,832,379
Class C Shares of Common Stock, $.10 par value,
100,000,000 shares authorized 1,671,686
Class D Shares of Common Stock, $.10 par value,
100,000,000 shares authorized 1,824,488
Paid-in capital in excess of par 2,236,463,592
Accumulated investment loss--net (24,423,413)
Undistributed realized capital gains on investments--net 43,364,658
Unrealized appreciation on investments--net 1,405,316,567
--------------
Net assets $3,675,290,339
==============
Net Asset Class A--Based on net assets of $828,487,866 and
Value: 32,403,824 shares outstanding $ 25.57
==============
Class B--Based on net assets of $1,963,424,305 and
78,323,788 shares outstanding $ 25.07
==============
Class C--Based on net assets of $418,989,813 and
16,716,855 shares outstanding $ 25.06
==============
Class D--Based on net assets of $464,388,355 and
18,244,877 shares outstanding $ 25.45
==============
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Global Technology Fund, Inc., September 30, 2000
<TABLE>
STATEMENT OF OPERATIONS
<CAPTION>
For the Six Months Ended September 30, 2000
<S> <S> <C> <C>
Investment Interest and discount earned $ 7,444,524
Income: Dividends (net of $10,430 foreign withholding tax) 247,593
Other 164,522
--------------
Total income 7,856,639
--------------
Expenses: Investment advisory fees $ 17,406,111
Account maintenance and distribution fees--Class B 9,802,371
Account maintenance and distribution fees--Class C 2,038,311
Transfer agent fees--Class B 979,276
Account maintenance fees--Class D 554,195
Transfer agent fees--Class A 337,345
Registration fees 242,552
Transfer agent fees--Class C 219,421
Transfer agent fees--Class D 186,886
Accounting services 134,429
Printing and shareholder reports 91,771
Custodian fees 91,442
Professional fees 57,445
Amortization of organization expenses 20,930
Directors' fees and expenses 18,849
Pricing fees 1,413
Other 97,305
--------------
Total expenses 32,280,052
--------------
Investment loss--net (24,423,413)
--------------
Realized & Realized gain from investments--net 46,216,465
Unrealized Change in unrealized appreciation on investments--net (486,629,318)
Gain (Loss) on --------------
Investments--Net: Net Decrease in Net Assets Resulting from Operations $ (464,836,266)
==============
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
For the Six For the
Months Ended Year Ended
September 30, March 31,
Increase (Decrease) in Net Assets: 2000 2000
<S> <S> <C> <C>
Operations: Investment loss--net $ (24,423,413) $ (28,618,469)
Realized gain on investments and foreign currency
transactions--net 46,216,465 228,978,687
Change in unrealized appreciation on investments--net (486,629,318) 1,487,066,703
-------------- --------------
Net increase (decrease) in net assets resulting from
operations (464,836,266) 1,687,426,921
-------------- --------------
Distributions to Realized gain on investments--net:
Shareholders: Class A (26,269,280) --
Class B (57,661,598) --
Class C (11,994,247) --
Class D (13,975,841) --
-------------- --------------
Net decrease in net assets resulting from distributions
to shareholders (109,900,966) --
-------------- --------------
Capital Share Net increase in net assets from capital share transactions 241,040,132 1,472,496,394
Transactions: -------------- --------------
Net Assets: Total increase (decrease) in net assets (333,697,100) 3,159,923,315
Beginning of period 4,008,987,439 849,064,124
-------------- --------------
End of period $3,675,290,339 $4,008,987,439
============== ==============
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Global Technology Fund, Inc., September 30, 2000
<TABLE>
FINANCIAL HIGHLIGHTS
<CAPTION>
Class A
The following per share data and ratios have been derived from For the Six For the For the Period
information provided in the financial statements. Months Ended Year Ended June 26, 1998++
September 30, March 31, to March 31,
Increase (Decrease) in Net Asset Value: 2000++++ 2000++++ 1999
<S> <S> <C> <C> <C>
Per Share Net asset value, beginning of period $ 29.81 $ 13.59 $ 10.00
Operating ----------- ----------- -----------
Performance: Investment loss--net (.08) (.16) (.05)
Realized and unrealized gain (loss) on
investments and foreign currency transactions--net (3.31) 16.38 3.64
----------- ----------- -----------
Total from investment operations (3.39) 16.22 3.59
----------- ----------- -----------
Less distributions from realized gain on
investments--net (.85) -- --
----------- ----------- -----------
Net asset value, end of period $ 25.57 $ 29.81 $ 13.59
=========== =========== ===========
Total Investment Based on net asset value per share (11.36%)+++ 119.35% 35.90%+++
Return:** =========== =========== ===========
Ratios to Average Expenses 1.09%* 1.11% 1.25%*
Net Assets: =========== =========== ===========
Investment loss--net (.66%)* (.70%) (.74%)*
=========== =========== ===========
Supplemental Net assets, end of period (in thousands) $ 828,488 $ 853,810 $ 41,382
Data: =========== =========== ===========
Portfolio turnover 39.38% 60.03% 49.72%
=========== =========== ===========
<CAPTION>
Class B
The following per share data and ratios have been derived from For the Six For the For the Period
information provided in the financial statements. Months Ended Year Ended June 26, 1998++
September 30, March 31, to March 31,
Increase (Decrease) in Net Asset Value: 2000++++ 2000++++ 1999
<S> <S> <C> <C> <C>
Per Share Net asset value, beginning of period $ 29.28 $ 13.48 $ 10.00
Operating ----------- ----------- -----------
Performance: Investment loss--net (.21) (.35) (.13)
Realized and unrealized gain (loss) on investments
and foreign currency transactions--net (3.25) 16.15 3.61
----------- ----------- -----------
Total from investment operations (3.46) 15.80 3.48
----------- ----------- -----------
Less distributions from realized gain on
investments--net (.75) -- --
----------- ----------- -----------
Net asset value, end of period $ 25.07 $ 29.28 $ 13.48
=========== =========== ===========
Total Investment Based on net asset value per share (11.81%)+++ 117.21% 34.80%+++
Return:** =========== =========== ===========
Ratios to Average Expenses 2.11%* 2.13% 2.27%*
Net Assets: =========== =========== ===========
Investment loss--net (1.67%)* (1.75%) (1.76%)*
=========== =========== ===========
Supplemental Net assets, end of period (in thousands) $ 1,963,424 $ 2,234,836 $ 565,111
Data: =========== =========== ===========
Portfolio turnover 39.38% 60.03% 49.72%
=========== =========== ===========
<CAPTION>
Class C
The following per share data and ratios have been derived from For the Six For the For the Period
information provided in the financial statements. Months Ended Year Ended June 26, 1998++
September 30, March 31, to March 31,
Increase (Decrease) in Net Asset Value: 2000++++ 2000++++ 1999
<S> <S> <C> <C> <C>
Per Share Net asset value, beginning of period $ 29.28 $ 13.48 $ 10.00
Operating ----------- ----------- -----------
Performance: Investment loss--net (.21) (.35) (.13)
Realized and unrealized gain (loss) on investments
and foreign currency transactions--net (3.26) 16.15 3.61
----------- ----------- -----------
Total from investment operations (3.47) 15.80 3.48
----------- ----------- -----------
Less distributions from realized gain on
investments--net (.75) -- --
----------- ----------- -----------
Net asset value, end of period $ 25.06 $ 29.28 $ 13.48
=========== =========== ===========
Total Investment Based on net asset value per share (11.85%)+++ 117.21% 34.80%+++
Return:** =========== =========== ===========
Ratios to Average Expenses 2.11%* 2.14% 2.28%*
Net Assets: =========== =========== ===========
Investment loss--net (1.68%)* (1.76%) (1.76%)*
=========== =========== ===========
Supplemental Net assets, end of period (in thousands) $ 418,990 $ 446,669 $ 127,461
Data: =========== =========== ===========
Portfolio turnover 39.38% 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., September 30, 2000
<TABLE>
FINANCIAL HIGHLIGHTS (concluded)
<CAPTION>
Class D
The following per share data and ratios have been derived from For the Six For the For the Period
information provided in the financial statements. Months Ended Year Ended June 26, 1998++
September 30, March 31, to March 31,
Increase (Decrease) in Net Asset Value: 2000++++ 2000++++ 1999
<S> <S> <C> <C> <C>
Per Share Net asset value, beginning of period $ 29.68 $ 13.56 $ 10.00
Operating ----------- ----------- -----------
Performance: Investment loss--net (.12) (.20) (.07)
Realized and unrealized gain (loss) on investments
and foreign currency transactions--net (3.29) 16.32 3.63
----------- ----------- -----------
Total from investment operations (3.41) 16.12 3.56
----------- ----------- -----------
Less distributions from realized gain on
investments--net (.82) -- --
----------- ----------- -----------
Net asset value, end of period $ 25.45 $ 29.68 $ 13.56
=========== =========== ===========
Total Investment Based on net asset value per share (11.49%)+++ 118.88% 35.60%+++
Return:** =========== =========== ===========
Ratios to Average Expenses 1.34%* 1.37% 1.50%*
Net Assets: =========== =========== ===========
Investment loss--net (.91%)* (.98%) (1.00%)*
=========== =========== ===========
Data:Supplemental Net assets, end of period (in thousands) $ 464,388 $ 473,672 $ 115,110
=========== =========== ===========
Portfolio turnover 39.38% 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>
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 conformity with accounting
principles generally accepted in the United States of America, 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 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).
Merrill Lynch Global Technology Fund, Inc., September 30, 2000
NOTES TO FINANCIAL STATEMENTS (continued)
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.
2. Investment Advisory Agreement and Transactions
with Affiliates:
The Fund has entered into an Investment Advisory Agreement with
Merrill Lynch Investment Managers, L.P. ("MLIM"). The general
partner of MLIM 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 FAM Distributors,
Inc. ("FAMD" or the "Distributor"), which is a wholly-owned
subsidiary of Merrill Lynch Group, Inc.
MLIM 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, MLIM
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 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, 2000, FAMD 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:
FAMD MLPF&S
Class A $ 1,502 $ 11,674
Class D $33,414 $498,085
For the six months ended September 30, 2000, MLPF&S received
contingent deferred sales charges of $1,139,852 and $72,717 relating
to transactions in Class B and Class C Shares, respectively.
Furthermore, MLPF&S received contingent deferred sales charges of
$104,989 and $41,779 relating to transactions subject to front-end
sales charge waivers in Class A and Class D Shares, respectively.
In addition, MLPF&S received $158,838 in commissions on the
execution of portfolio security transactions for the Fund for the
six months ended September 30, 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 MLIM at cost.
Certain officers and/or directors of the Fund are officers and/or
directors of MLIM, PSI, FDS, FAMD, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the six months ended September 30, 2000 were $1,452,928,664 and
$1,357,306,538, respectively.
Net realized gains (losses) for the six months ended September 30,
2000 and net unrealized gains as of September 30, 2000 were as
follows:
Realized Unrealized
Gains (Losses) Gains
Long-term investments $ 46,222,154 $1,405,316,567
Short-term investments (5,689) --
------------- --------------
Total $ 46,216,465 $1,405,316,567
============= ==============
As of September 30, 2000, net unrealized appreciation for Federal
income tax purposes aggregated $1,405,316,567, of which
$1,568,339,026 related to appreciated securities and $163,022,459
related to depreciated securities. The aggregate cost of investments
at September 30, 2000 for Federal income tax purposes was
$2,321,181,179.
4. Capital Share Transactions:
Net increase in net assets derived from capital share transactions
was $241,040,132 and $1,472,496,394 for the six months ended
September 30, 2000 and the year ended March 31, 2000, respectively.
Transactions in capital shares for each class were as follows:
Class A Shares for the Six Months Dollar
Ended September 30, 2000 Shares Amount
Shares sold 7,351,380 $ 185,631,098
Shares issued to shareholders
in reinvestment of
distributions 972,445 24,787,634
------------ --------------
Total issued 8,323,825 210,418,732
Shares redeemed (4,559,052) (116,355,493)
------------ --------------
Net increase 3,764,773 $ 94,063,239
============ ==============
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 B Shares for the Six Months Dollar
Ended September 30, 2000 Shares Amount
Shares sold 8,489,412 $ 214,176,941
Shares issued to shareholders
in reinvestment of
distributions 2,003,672 50,191,988
------------ --------------
Total issued 10,493,084 264,368,929
Automatic conversion of
shares (1,460,354) (36,958,129)
Shares redeemed (7,030,777) (176,406,862)
------------ --------------
Net increase 2,001,953 $ 51,003,938
============ ==============
Merrill Lynch Global Technology Fund, Inc., September 30, 2000
NOTES TO FINANCIAL STATEMENTS (concluded)
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
Automatic conversion of
shares (906,601) (20,582,538)
Shares redeemed (11,267,504) (227,509,960)
------------ --------------
Net increase 34,400,072 $ 683,376,272
============ ==============
Class C Shares for the Six Months Dollar
Ended September 30, 2000 Shares Amount
Shares sold 2,484,871 $ 62,665,173
Shares issued to shareholders
in reinvestment of
distributions 417,191 10,450,637
------------ --------------
Total issued 2,902,062 73,115,810
Shares redeemed (1,441,325) (36,080,046)
------------ --------------
Net increase 1,460,737 $ 37,035,764
============ ==============
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 D Shares for the Six Months Dollar
Ended September 30, 2000 Shares Amount
Shares sold 2,388,899 $ 60,536,592
Automatic conversion of
shares 1,439,633 36,958,129
Shares issued to shareholders
in reinvestment of
distributions 485,610 12,329,637
------------ --------------
Total issued 4,314,142 109,824,358
Shares redeemed (2,027,366) (50,887,167)
------------ --------------
Net increase 2,286,776 $ 58,937,191
============ ==============
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
============ ==============
5. Short-Term Borrowings:
On December 3, 1999, the Fund, along with certain other funds
managed by MLIM and its affiliates, entered into a $1,000,000,000
credit agreement with Bank of America, N.A. and certain other
lenders. The Fund may borrow under the credit agreement to fund
shareholder redemptions and other lawful purposes other than for
leverage. The Fund may borrow up to the maximum amount allowable
under the Fund's current prospectus and statement of additional
information, subject to various other legal, regulatory or
contractual limits. The Fund pays a commitment fee of .09% per annum
based on the Fund's pro rata share of the unused portion of the
facility. Amounts borrowed under the facility bear interest at a
rate equal to, at each fund's election, the Federal Funds rate plus
.50% or a base rate as determined by Bank of America, N.A. The Fund
did not borrow under the facility during the six months ended
September 30, 2000.
6. Capital Loss Carryfoward:
At March 31, 2000, the Fund had a net capital loss carryfoward 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.
OFFICERS AND DIRECTORS
Terry K. Glenn, President and Director
Ronald W. Forbes, Director
Cynthia A. Montgomery, Director
Charles C. Reilly, Director
Kevin A. Ryan, Director
Roscoe S. Suddarth, 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
