QUARTERLY REPORT
AUGUST 31, 1999
[GRAPHIC OMITTED]
Mercury
Global
Balanced
Fund
OF MERCURY ASSET
MANAGEMENT FUNDS, INC.
-------------------
M E R C U R Y
ASSET MANAGEMENT
-------------------
<PAGE>
MERCURY MASTER
GLOBAL BALANCED PORTFOLIO
SECTOR REPRESENTATION OF EQUITIES AND
FIXED-INCOME SECURITIES
As a Percentage of Net Assets as of August 31, 1999
A pie chart depicting portfolio composition according to sector representation
of equities and fixed-income securities for the quarter ended August 31, 1999.
[GRAPHIC OMITTED]
Government Obligations--28.9%
Services--17.3%
Capital Equipment--14.2%
Consumer Goods--12.4%
Finance--11.9%
Energy--6.0%
Cash Equivalent--7.0%
Materials--2.2%
Multi-Industry--0.1%
GEOGRAPHIC ASSET MIX
As a Percentage of Equities as of August 31, 1999
A pie chart depicting portfolio composition according to regional representation
for the quarter ended August 31, 1999.
[GRAPHIC OMITTED]
North America--43.2%
Europe--36.4%
Pacific Basin/Asia--20.4%
August 31, 1999 (1) Mercury Global Balanced Fund
<PAGE>
DEAR SHAREHOLDER
For the quarter ended August 31, 1999, Mercury Global Balanced Fund's Class I,
Class A, Class B and Class C Shares had total returns of +3.74%, +3.74%, +3.43%
and +3.43%, respectively. (Fund 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.) Stock selection
contributed positively to the Fund's returns relative to their respective
regional benchmarks in the unmanaged Morgan Stanley Capital International (MSCI)
World Index. Our decision to increase our exposure to Japanese equities toward
the end of June also made a positive contribution to performance, since Japan
was one of the best-performing major global equity markets over this period.
Investment Environment
Typically, sharp movements in US equity share prices quickly lead to volatility
in international stock markets, and the three-month period ended August 31, 1999
was no exception. However, we did see emerging evidence that international
markets could make long-term progress, in spite of uncertainties in the US stock
market.
One of the most prominent events over the August quarter was the strength of the
Japanese equity market. During June, the announcement of unexpected strong first
quarter gross domestic product (GDP) growth acted as a catalyst for the market.
The GDP figures were supported strongly by the public sector, although some
doubt remains about the private sector's ability to sustain any recovery when
public spending lessens later in the year. However, signs that the Japanese
economy is emerging from many years of recession, which bordered on depression,
is undoubtedly good news. Furthermore, real evidence of corporate restructuring
is also emerging.
The August quarter witnessed Japan's first hostile takeover. Cable & Wireless
PLC's bid for IDC was strongly contested by Nippon Telegraph & Telephone
Corporation (NTT). However, it is an encouraging sign that this bid was allowed
to succeed. During August, the announcement that Industrial Bank of Japan
planned to merge with both Fuji Bank and Dai-Ichi Kangyo Bank left us in no
doubt that Japan is changing. If this transaction goes ahead, it will form the
largest bank in the world, with significant scope for cost cutting, which is not
something we normally associate with Japan. It will also send a signal of
approval to corporate Japan that mergers are not only acceptable, but to be
encouraged to build global competitiveness. Undoubtedly, it will act as a
catalyst for copycat mergers in the financial sector.
European markets were disappointing over the early summer as the euro came under
pressure and European economies appeared subdued. A marked change in sentiment
occurred later as evidence of a sustainable economic recovery emerged with
encouraging economic data from both France and Germany. Merger and acquisition
activity continued at an astounding pace with nearly every major industry seeing
some consolidation. The energy, financial, telecommunications, healthcare and
utility sectors were among the major participants.
Portfolio Activity
During the August quarter, we added Deutsche Bank to the Portfolio after the
reform of taxation laws in Germany took place. This should now allow the company
to restructure its industrial holdings more efficiently. Furthermore, we
continue to expect further consolidation within the European banking sector and
believe that there still exists
August 31, 1999 (2) Mercury Global Balanced Fund
<PAGE>
significant scope for corporate activity within the German banking system.
Investor AB, the Swedish investment group, was also purchased after what we
believe to be a significant widening of the discount between the quoted share
price and the underlying value of its assets. We also added a Swiss specialty
chemicals group, Clariant AG, as part of a move to increase the Portfolio's
exposure to cyclicals. With stabilizing prices and higher industrial demand
expected to feed through to stronger earnings in the second half of the year, we
believe the valuation of Clariant remains attractive.
Our position in Veba AG, the German utility group, was sold as part of a move to
reduce the overall Portfolio's exposure to defensive stocks. We also took some
profits by reducing our positions in the electronics sector, including
Koninklijke (Royal) Philips Electronics AG, Siemens AG and Telefonaktiebolaget
LM Ericsson, as a result of the recent strength in their stock prices. While we
remain confident that in the long term Ericsson should benefit from growth in
demand for wireless infrastructure, concerns over short-term profitability also
prompted us to reduce our position in the stock.
During the August quarter, we increased our exposure to Japanese equities. Early
in the period, we built positions in technology stocks Softbank Corporation and
Trend Micro Incorporated. Softbank is an Internet venture capital firm with a
track record of making very successful Internet investments. The company owns
26% of Yahoo! in the United States. We expect the company to use its dominant
position in Japan to generate further synergies for the companies in its
investment portfolio. Trend Micro is one of the leading anti-virus companies in
the world. Its new generation of software resides on network servers rather than
on personal computers. This reduces the cost of implementing upgrades to the
software, as the upgrades can be performed remotely. We anticipate a substantial
increase in the company's gross profit margins as a result.
In Japan, we also initiated a holding in Sekisui House, Ltd., as the housing
market is responding to the government-led stimulus to spend. The effect is
particularly strong in expensive houses where Sekisui House is dominant.
Finally, we reduced our position in the telecommunications company, NTT. The
company is coming under more intense regulatory scrutiny and will face severe
pressure to reduce rates as regulators seek to introduce cheap fixed-rate
Internet access in Japan.
In the fixed-income sector, during the three months ended August 31, 1999 yields
rose in all major bond markets against a backdrop of cyclical recovery in the
global economy and a shift from the expectation of reductions in short-term
interest rates to the expectation of increases. We shifted the Portfolio from an
index neutral duration of 5.7 years (relative to the benchmark unmanaged Salomon
Smith Barney World Government Bond Index) to an underweight duration of 4.2
years.
In the United States, the Federal Reserve Board raised interest rates twice for
a total of 50 basis points (0.50%) as the economy continued to show strength. We
reduced our exposure to US bonds, as well as our positions in Australia and
Canada. Overall, the Portfolio closed the period underweight in US dollar bloc
bonds. Within the United States, we sold some Treasury bonds in favor of US
Government agency issues. We also reduced our exposure to European bonds,
although we remained overweight in Europe. The UK economy avoided recession,
causing yields to rise, and we eliminated our exposure in UK gilts from the
Portfolio in July. Japanese bond yields rose toward 2%, and we established a
small position in Euroyen bonds in August. However, we remained significantly
underweight in Japanese bonds.
August 31, 1999 (3) Mercury Global Balanced Fund
<PAGE>
Investment Outlook
We remain positive regarding the outlook for international equities and,
therefore, the Portfolio remains fully invested. We believe the economic
recovery in both Europe and Japan will underpin earnings growth for the
foreseeable future. Against this background there also exists the probability of
an even greater degree of corporate activity in both of these regions. Although
the majority of the Portfolio's holdings are in Europe, where we remain very
positive toward the long term, our overweight position relative to the Fund's
benchmark is greater in Japan. We increased our exposure to Japanese equities in
mid-June, and we expect to maintain this position for the balance of the year.
At August 31, 1999, we remained neutral relative to both our peer group of
international funds and the benchmark MSCI Europe Australasia Far East Index in
the Pacific region (ex Japan) and emerging equity markets.
In Conclusion
We thank you for your investment in Mercury Global Balanced Fund, and we look
forward to serving your investment needs in the months and years ahead.
Sincerely,
/s/ Jeffrey Peek /s/ Gary Lowe /s/ Sarah Jane Cawthray
Jeffrey Peek Gary Lowe Sarah Jane Cawthray
President Portfolio Manager Portfolio Manager
Equity Investments Fixed-Income Investments
October 5, 1999
FUND PERFORMANCE DATA
ABOUT FUND PERFORMANCE
The Fund offers four classes of shares, each with its own sales charge and
expense structure allowing you to invest in the way that best suits your needs.
CLASS I SHARES incur a maximum initial sales charge of 5.25% and bear no ongoing
distribution and account maintenance fees. Class I shares are available only to
eligible investors.
CLASS A SHARES incur a maximum initial sales charge of 5.25% and an account
maintenance fee of 0.25% (but no distribution fee).
CLASS B SHARES are subject to a maximum contingent deferred sales charge of 4%
if redeemed during the first two years, decreasing to 3% for each of the next
two years and decreasing 1% each year thereafter to 0% after the sixth 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 A
shares after approximately 8 years.
August 31, 1999 (4) Mercury Global Balanced Fund
<PAGE>
FUND PERFORMANCE DATA (CONCLUDED)
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 may be subject to a 1%
contingent deferred sales charge if redeemed within one year after purchase.
None of the past results shown should be considered a representation of future
performance. Figures shown in the "Recent Performance Results" table 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.
RECENT PERFORMANCE RESULTS*
3 Month Since Inception
As of August 31, 1999 Total Return Total Return
- --------------------------------------------------------------------------------
Class I +3.74% -0.10%
- --------------------------------------------------------------------------------
Class A +3.74 -0.20
- --------------------------------------------------------------------------------
Class B +3.43 -0.50
- --------------------------------------------------------------------------------
Class C +3.43 -0.50
- --------------------------------------------------------------------------------
* Investment results shown do not reflect sales charges. Results shown would
be lower if sales charges were included. Total investment returns are
based on changes in the Fund's net asset values for the periods shown, and
assume reinvestment of all dividends and capital gains at net asset value
on the ex-dividend date. The Fund's inception date is 4/30/99.
AGGREGATE TOTAL RETURN
% Return % Return
Without Sales With Sales
Class I Shares* Charge Charge**
- --------------------------------------------------------------------------------
Inception (4/30/99)
through 6/30/99 -0.70% -5.91%
- --------------------------------------------------------------------------------
* Maximum sales charge is 5.25%.
** Assuming maximum sales charge.
% Return % Return
Without Sales With Sales
Class A Shares* Charge Charge**
- --------------------------------------------------------------------------------
Inception (4/30/99)
through 6/30/99 -0.70% -5.91%
- --------------------------------------------------------------------------------
* Maximum sales charge is 5.25%.
** Assuming maximum sales charge.
% Return % Return
Without With
Class B Shares* CDSC CDSC**
- --------------------------------------------------------------------------------
Inception (4/30/99)
through 6/30/99 -0.90% -4.86%
- --------------------------------------------------------------------------------
* Maximum contingent deferred sales charge is 4% and is reduced to 0% after
6 years.
** Assuming payment of applicable contingent deferred sales charge.
% Return % Return
Without With
Class C Shares* CDSC CDSC**
- --------------------------------------------------------------------------------
Inception (4/30/99)
through 6/30/99 -0.90% -1.89%
- --------------------------------------------------------------------------------
* Maximum contingent deferred sales charge is 1% and is reduced to 0% after
1 year.
** Assuming payment of applicable contingent deferred sales charge.
August 31, 1999 (5) Mercury Global Balanced Fund
<PAGE>
SCHEDULE OF INVESTMENTS
MERCURY MASTER GLOBAL BALANCED PORTFOLIO
<TABLE>
<CAPTION>
In US Dollars
----------------------------------------------------
Shares Held/ Percent of
Industries Face Amount Investments Cost Value Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C> <C>
EUROPE
====================================================================================================================================
Belgium
Insurance 30,816 Fortis AG 'B' $ 1,039,424 $ 1,057,305 0.3%
- ------------------------------------------------------------------------------------------------------------------------------------
Utilities-- 1,692 Electrabel SA 522,871 564,989 0.1
Electric & Gas
- ------------------------------------------------------------------------------------------------------------------------------------
Total Investments in Belgium 1,562,295 1,622,294 0.4
- ------------------------------------------------------------------------------------------------------------------------------------
Denmark
For- Dkr36,200,000 Kingdom of Denmark, 6% due
eign 11/15/2009 5,868,976 5,381,324 1.2
Government
Obligations
- ------------------------------------------------------------------------------------------------------------------------------------
Total Investments in Denmark 5,868,976 5,381,324 1.2
- ------------------------------------------------------------------------------------------------------------------------------------
Finland
Electrical & 49,667 Nokia Oyj 3,919,299 4,142,243 0.9
Electronics
- ------------------------------------------------------------------------------------------------------------------------------------
Total Investments in Finland 3,919,299 4,142,243 0.9
- ------------------------------------------------------------------------------------------------------------------------------------
France
Aerospace & 16,116 Aerospatiale Matra 350,647 362,391 0.1
Military
Technology
- ------------------------------------------------------------------------------------------------------------------------------------
Banking 14,491 Compagnie Financiere
de Paribas (CFP) 1,558,420 1,688,633 0.4
7,396 Societe Generale 'A' 1,312,193 1,446,814 0.3
----------------------------------------------------
2,870,613 3,135,447 0.7
- ------------------------------------------------------------------------------------------------------------------------------------
Business/ 31,638 Vivendi 2,463,864 2,441,557 0.5
Public
Services
- ------------------------------------------------------------------------------------------------------------------------------------
Energy 4,545 Elf Aquitaine SA 724,121 796,494 0.2
Sources 13,681 Total SA 'B' 1,830,134 1,762,050 0.4
----------------------------------------------------
2,554,255 2,558,544 0.6
- ------------------------------------------------------------------------------------------------------------------------------------
Foreign (euro)10,450,000 French Btan, 4.50%
Govern- due 7/12/2002 11,584,491 11,209,681 2.5
ment (euro) 5,500,000 French OAT, 5.25%
Obliga- due 4/25/2008 6,432,426 5,929,445 1.3
tions ----------------------------------------------------
18,016,917 17,139,126 3.8
- ------------------------------------------------------------------------------------------------------------------------------------
Insurance 16,571 Axa 2,097,337 2,060,794 0.5
- ------------------------------------------------------------------------------------------------------------------------------------
Leisure/ 7,533 Accor SA 1,959,679 1,811,600 0.4
Tourism
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
August 31, 1999 (6) Mercury Global Balanced Fund
<PAGE>
SCHEDULE OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
In US Dollars
----------------------------------------------------
Shares Held/ Percent of
Industries Face Amount Investments Cost Value Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C> <C>
EUROPE (continued)
====================================================================================================================================
France (concluded)
Merchandising 12,325 Pinault-Printemps-Redoute
SA $ 2,027,972 $ 2,133,886 0.5%
- ------------------------------------------------------------------------------------------------------------------------------------
Metals--Steel 33,700 Usinor SA 509,535 521,204 0.1
- ------------------------------------------------------------------------------------------------------------------------------------
Total Investments in France 32,850,819 32,164,549 7.2
- ------------------------------------------------------------------------------------------------------------------------------------
Germany
Automobiles 17,742 DaimlerChrysler AG 1,618,529 1,337,338 0.3
- ------------------------------------------------------------------------------------------------------------------------------------
Banking 25,667 Deutsche Bank AG
(Registered) 1,562,409 1,753,153 0.4
23,967 HypoVereinsbank 1,544,724 1,419,440 0.3
----------------------------------------------------
3,107,133 3,172,593 0.7
- ------------------------------------------------------------------------------------------------------------------------------------
Chemicals 29,856 Bayer AG 1,268,163 1,297,006 0.3
- ------------------------------------------------------------------------------------------------------------------------------------
Electrical & 31,041 Siemens AG 2,316,921 2,608,491 0.6
Electronics
- ------------------------------------------------------------------------------------------------------------------------------------
Foreign Bundesobligation:
Govern- (euro)10,500,000 5% due 8/20/2001 11,652,190 11,386,358 2.6
ment (euro)13,300,000 3.25% due2/17/2004 13,558,735 13,472,157 3.0
Obliga- Bundesrepublic Deutschland:
tions (euro) 9,300,000 6.75% due 7/15/2004 11,488,890 10,822,392 2.4
(euro)11,800,000 6.875% due 5/12/2005 14,648,939 13,891,091 3.1
----------------------------------------------------
51,348,754 49,571,998 11.1
- ------------------------------------------------------------------------------------------------------------------------------------
Insurance 6,437 Allianz AG
(Registered Shares) 2,002,929 1,694,128 0.4
- ------------------------------------------------------------------------------------------------------------------------------------
Telecom- 15,628 Mannesmann AG 2,144,831 2,395,579 0.5
munications
- ------------------------------------------------------------------------------------------------------------------------------------
Transpor- 54,376 Deutsche Lufthansa AG
tation-- (Registered Shares) 1,198,517 1,050,507 0.2
Airlines
- ------------------------------------------------------------------------------------------------------------------------------------
Total Investments in Germany 65,005,777 63,127,640 14.1
- ------------------------------------------------------------------------------------------------------------------------------------
Italy
Banking 341,985 Unicredito Italiano SpA 1,706,330 1,577,717 0.4
- ------------------------------------------------------------------------------------------------------------------------------------
Broad- 479,970 Seat Pagine Gialle SpA 651,348 661,249 0.2
casting &
Publishing
- ------------------------------------------------------------------------------------------------------------------------------------
Business/ 159,830 Tecnost SpA 372,317 417,613 0.1
Public
Services
- ------------------------------------------------------------------------------------------------------------------------------------
Energy 253,907 ENI SpA 1,619,137 1,525,202 0.3
Sources
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
August 31, 1999 (7) Mercury Global Balanced Fund
<PAGE>
SCHEDULE OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
In US Dollars
----------------------------------------------------
Shares Held/ Percent of
Industries Face Amount Investments Cost Value Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C> <C>
EUROPE (continued)
====================================================================================================================================
Italy (concluded)
Telecom- 285,834 Telecom Italia Mobile
munications (TIM) SpA $ 1,058,223 $ 989,756 0.2%
76,316 Telecom Italia Mobile
(TIM) SpA 464,742 443,923 0.1
85,638 Telecom Italia SpA
(Registered) 472,249 490,012 0.1
----------------------------------------------------
1,995,214 1,923,691 0.4
- ------------------------------------------------------------------------------------------------------------------------------------
Total Investments in Italy 6,344,346 6,105,472 1.4
- ------------------------------------------------------------------------------------------------------------------------------------
Netherlands
Broad- 92,858 Elsevier NV 1,340,129 1,068,529 0.2
casting & 43,395 Wolters Kluwer NV 'A' 1,761,330 1,612,586 0.4
Publishing ----------------------------------------------------
3,101,459 2,681,115 0.6
- ------------------------------------------------------------------------------------------------------------------------------------
Business/ 31,210 Vedior NV 'A' 551,201 538,706 0.1
Public
Services
- ------------------------------------------------------------------------------------------------------------------------------------
Chemicals 27,961 Akzo Nobel NV 1,269,598 1,300,287 0.3
- ------------------------------------------------------------------------------------------------------------------------------------
Electrical & 15,962 Koninklijke (Royal) Philips
Electronics Electronics NV 1,472,292 1,643,823 0.4
- ------------------------------------------------------------------------------------------------------------------------------------
Energy 40,851 Royal Dutch Petroleum
Sources Company 2,400,797 2,509,957 0.6
- ------------------------------------------------------------------------------------------------------------------------------------
Food & 34,240 Unilever NV 'A' 2,536,509 2,380,291 0.5
Household
Products
- ------------------------------------------------------------------------------------------------------------------------------------
For- (euro)7,700,000 Netherlands Government
eign Bonds, 3.75% due
Government 7/15/2009 7,114,313 7,304,621 1.6
Obligations
- ------------------------------------------------------------------------------------------------------------------------------------
Insurance 42,732 ING Groep NV 2,545,057 2,341,322 0.5
- ------------------------------------------------------------------------------------------------------------------------------------
Total Investments in the
Netherlands 20,991,226 20,700,122 4.6
- ------------------------------------------------------------------------------------------------------------------------------------
Spain
Banking 146,695 Banco Santander Central
Hispano, SA 1,586,322 1,472,775 0.3
- ------------------------------------------------------------------------------------------------------------------------------------
Broadcasting & 3,150 Telefonica Publicidad e
Publishing Informacion, SA 48,724 72,162 0.0
- ------------------------------------------------------------------------------------------------------------------------------------
Telecom- 92,988 Telefonica, SA 1,480,607 1,482,328 0.4
munications
- ------------------------------------------------------------------------------------------------------------------------------------
Total Investments in Spain 3,115,653 3,027,265 0.7
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
August 31, 1999 (8) Mercury Global Balanced Fund
<PAGE>
SCHEDULE OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
In US Dollars
----------------------------------------------------
Shares Held/ Percent of
Industries Face Amount Investments Cost Value Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C> <C>
EUROPE (continued)
====================================================================================================================================
Sweden
Appliances & 49,346 Electrolux AB 'B' $ 1,017,059 $ 993,503 0.2%
Household
Durables
- ------------------------------------------------------------------------------------------------------------------------------------
Electrical & 29,402 Telefonaktiebolaget
Electronics LM Ericsson 'B' 933,846 948,567 0.2
- ------------------------------------------------------------------------------------------------------------------------------------
For- Skr25,800,000 Government of Sweden,
eign 5.50% due 4/12/2002 3,089,156 3,186,273 0.7
Government
Obligations
- ------------------------------------------------------------------------------------------------------------------------------------
Multi-Industry 29,060 Investor AB 'B' 350,161 354,218 0.1
- ------------------------------------------------------------------------------------------------------------------------------------
Total Investments in Sweden 5,390,222 5,482,561 1.2
- ------------------------------------------------------------------------------------------------------------------------------------
Switzerland
Banking 7,149 Credit Suisse Group
(Registered Shares) 1,382,929 1,349,402 0.3
6,848 UBS AG (Registered Shares) 2,285,028 1,932,101 0.5
----------------------------------------------------
3,667,957 3,281,503 0.8
- ------------------------------------------------------------------------------------------------------------------------------------
Business/ 2,443 Adecco SA
Public Services (Registered Shares) 1,252,986 1,346,294 0.3
- ------------------------------------------------------------------------------------------------------------------------------------
Chemicals 1,085 Clariant AG (Registered) 470,876 521,304 0.1
- ------------------------------------------------------------------------------------------------------------------------------------
Food & 943 Nestle SA
Household (Registered Shares) 1,777,190 1,860,857 0.4
Products
- ------------------------------------------------------------------------------------------------------------------------------------
Health & 699 Novartis AG
Personal Care (Registered Shares) 1,055,446 1,005,689 0.2
93 Roche Holding AG 1,065,632 1,075,343 0.3
----------------------------------------------------
2,121,078 2,081,032 0.5
- ------------------------------------------------------------------------------------------------------------------------------------
Telecom- 2,882 Swisscom AG
munications (Registered Shares) 1,039,791 950,079 0.2
- ------------------------------------------------------------------------------------------------------------------------------------
Total Investments in
Switzerland 10,329,878 10,041,069 2.3
- ------------------------------------------------------------------------------------------------------------------------------------
United Kingdom
Aerospace & 160,238 British Aerospace PLC 1,159,854 1,169,487 0.3
Military
Technology
- ------------------------------------------------------------------------------------------------------------------------------------
Banking 56,290 Barclays PLC 1,783,565 1,673,161 0.4
86,112 HSBC Holdings PLC 1,087,427 1,064,651 0.2
151,582 Lloyds TSB Group PLC 2,359,458 2,095,720 0.5
----------------------------------------------------
5,230,450 4,833,532 1.1
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
August 31, 1999 (9) Mercury Global Balanced Fund
<PAGE>
SCHEDULE OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
In US Dollars
----------------------------------------------------
Shares Percent of
Industries Held Investments Cost Value Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C> <C>
EUROPE (concluded)
====================================================================================================================================
United Kingdom (concluded)
Beverages & 172,012 British American Tobacco
Tobacco PLC $ 1,523,857 $ 1,446,806 0.3%
84,092 Diageo PLC 969,173 851,197 0.2
----------------------------------------------------
2,493,030 2,298,003 0.5
- ------------------------------------------------------------------------------------------------------------------------------------
Energy 189,995 BP Amoco PLC 3,590,868 3,525,810 0.8
Sources
- ------------------------------------------------------------------------------------------------------------------------------------
Food & 54,000 Unilever PLC 521,251 509,292 0.1
Household
Products
- ------------------------------------------------------------------------------------------------------------------------------------
Health & 33,389 AstraZeneca Group PLC 1,324,488 1,325,059 0.3
Personal 106,552 Glaxo Wellcome PLC 3,143,461 2,800,785 0.6
Care 134,220 SmithKline Beecham PLC 1,784,134 1,747,854 0.4
----------------------------------------------------
6,252,083 5,873,698 1.3
- ------------------------------------------------------------------------------------------------------------------------------------
Insurance 107,649 Allied Zurich PLC 1,464,040 1,315,358 0.3
91,468 CGU PLC 1,435,420 1,361,600 0.3
----------------------------------------------------
2,899,460 2,676,958 0.6
- ------------------------------------------------------------------------------------------------------------------------------------
Leisure/ 100,601 Granada Group PLC 1,011,432 897,886 0.2
Tourism
- ------------------------------------------------------------------------------------------------------------------------------------
Merchan- 56,015 Dixons Group PLC 1,170,942 1,053,892 0.2
dising 36,020 Kingfisher PLC 518,011 433,182 0.1
----------------------------------------------------
1,688,953 1,487,074 0.3
- ------------------------------------------------------------------------------------------------------------------------------------
Metals/ 38,836 Rio Tinto PLC
Non-Ferrous (Registered Shares) 767,074 698,855 0.2
- ------------------------------------------------------------------------------------------------------------------------------------
Real Estate 39,340 Land Securities 533,929 552,750 0.1
- ------------------------------------------------------------------------------------------------------------------------------------
Telecom- 182,846 British Telecommunications
munications PLC 3,130,616 2,799,711 0.6
116,690 Cable & Wireless PLC 1,626,914 1,338,649 0.3
122,018 Vodafone AirTouch PLC 2,336,903 2,458,421 0.6
----------------------------------------------------
7,094,433 6,596,781 1.5
- ------------------------------------------------------------------------------------------------------------------------------------
Transpor- 95,470 The Peninsular and Oriental
tation-- Steam Navigation Company 1,432,179 1,565,362 0.3
Shipping
- ------------------------------------------------------------------------------------------------------------------------------------
Utilities-- 276,518 BG PLC 1,595,899 1,662,723 0.4
Electric & 109,566 National Grid Group PLC 771,300 731,005 0.1
Gas ----------------------------------------------------
2,367,199 2,393,728 0.5
- ------------------------------------------------------------------------------------------------------------------------------------
Total Investments in the
United Kingdom 37,042,195 35,079,216 7.8
- ------------------------------------------------------------------------------------------------------------------------------------
Total Investments in Europe 192,420,686 186,873,755 41.8
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
August 31, 1999 (10) Mercury Global Balanced Fund
<PAGE>
SCHEDULE OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
In US Dollars
----------------------------------------------------
Shares Percent of
Industries Held Investments Cost Value Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C> <C>
NORTH AMERICA
====================================================================================================================================
United States
Aerospace & 30,000 The Boeing Company $ 1,338,087 $ 1,359,375 0.3%
Military 47,800 United Technologies
Technology Corporation 3,536,990 3,160,775 0.7
----------------------------------------------------
4,875,077 4,520,150 1.0
- ------------------------------------------------------------------------------------------------------------------------------------
Automobiles 24,900 Ford Motor Company 1,605,215 1,297,912 0.3
13,706 Safra Republic Holdings, SA 915,174 945,273 0.2
----------------------------------------------------
2,520,389 2,243,185 0.5
- ------------------------------------------------------------------------------------------------------------------------------------
Banking 43,400 Fleet Financial Group, Inc. 1,895,881 1,727,862 0.4
72,200 Mellon Bank Corporation 2,692,596 2,409,675 0.5
45,200 U.S. Bancorp 1,672,245 1,395,550 0.3
----------------------------------------------------
6,260,722 5,533,087 1.2
- ------------------------------------------------------------------------------------------------------------------------------------
Beverages & 74,600 PepsiCo, Inc. 2,789,914 2,545,725 0.6
Tobacco
- ------------------------------------------------------------------------------------------------------------------------------------
Business/ 83,700 Microsoft Corporation 6,932,708 7,742,250 1.7
Public Services
- ------------------------------------------------------------------------------------------------------------------------------------
Data 53,300 Cisco Systems, Inc. 3,036,455 3,611,075 0.8
Processing & 26,400 EMC Corporation 1,437,075 1,584,000 0.4
Reproduction 9,800 International Business
Machines Corporation 1,064,698 1,220,712 0.3
----------------------------------------------------
5,538,228 6,415,787 1.5
- ------------------------------------------------------------------------------------------------------------------------------------
Electrical & 58,000 General Electric Company 6,302,695 6,514,125 1.5
Electronics 47,700 Intel Corporation 3,799,964 3,920,344 0.9
----------------------------------------------------
10,102,659 10,434,469 2.4
- ------------------------------------------------------------------------------------------------------------------------------------
Electronic 20,200 America Online, Inc. 2,189,953 1,844,512 0.4
Components/ 59,500 Dell Computer Corporation 2,472,656 2,904,344 0.7
Instruments 27,000 JDS Uniphase Corporation 2,092,571 2,863,687 0.6
22,900 Nextel Communications,
Inc. (Class A) 908,602 1,322,475 0.3
60,600 Texas Instruments
Incorporated 3,245,835 4,972,988 1.1
----------------------------------------------------
10,909,617 13,908,006 3.1
- ------------------------------------------------------------------------------------------------------------------------------------
Energy 13,100 Chevron Corporation 1,251,435 1,208,475 0.3
Sources 48,200 Exxon Corporation 4,003,042 3,801,775 0.9
43,800 Mobil Corporation 4,588,987 4,484,025 1.0
29,900 Texaco Inc. 1,911,333 1,898,650 0.4
----------------------------------------------------
11,754,797 11,392,925 2.6
- ------------------------------------------------------------------------------------------------------------------------------------
Financial 27,600 American Express Company 3,664,807 3,795,000 0.8
Services 58,250 Citigroup Inc. 2,896,794 2,588,484 0.6
----------------------------------------------------
6,561,601 6,383,484 1.4
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
August 31, 1999 (11) Mercury Global Balanced Fund
<PAGE>
SCHEDULE OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
In US Dollars
----------------------------------------------------
Shares Held/ Percent of
Industries Face Amount Investments Cost Value Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C> <C>
NORTH AMERICA (continued)
====================================================================================================================================
United States (continued)
Food & 100,700 The Dial Corporation $ 3,462,700 $ 2,794,425 0.6%
Household 28,500 The Procter & Gamble
Products Company 2,654,450 2,828,625 0.6
----------------------------------------------------
6,117,150 5,623,050 1.2
- ------------------------------------------------------------------------------------------------------------------------------------
Health & 45,100 Bristol-Myers Squibb Company 2,910,122 3,173,912 0.7
Personal 25,900 The Estee Lauder Companies
Care Inc. (Class A) 1,223,832 1,189,781 0.3
28,100 Johnson & Johnson 2,710,655 2,873,225 0.6
34,400 Merck & Co., Inc. 2,436,296 2,311,250 0.5
30,000 Pfizer Inc. 1,155,170 1,132,500 0.3
28,200 Tyco International Ltd. 2,353,404 2,857,013 0.6
----------------------------------------------------
12,789,479 13,537,681 3.0
- ------------------------------------------------------------------------------------------------------------------------------------
Insurance 31,900 The Allstate Corporation 1,180,854 1,046,719 0.2
40,000 American International
Group, Inc. 3,777,533 3,707,500 0.8
----------------------------------------------------
4,958,387 4,754,219 1.0
- ------------------------------------------------------------------------------------------------------------------------------------
Machinery & 46,000 Case Corporation 1,726,700 2,271,250 0.5
Engineering
- ------------------------------------------------------------------------------------------------------------------------------------
Merchandising 33,100 The Home Depot, Inc. 1,991,856 2,023,237 0.5
28,300 Kohl's Corporation 1,927,166 2,016,375 0.4
95,900 The Kroger Co. 2,639,218 2,217,687 0.5
29,100 Lowe's Companies, Inc. 1,560,371 1,316,775 0.3
94,700 Wal-Mart Stores, Inc. 4,368,735 4,196,394 0.9
169,200 Walgreen Co. 4,578,798 3,923,325 0.9
----------------------------------------------------
17,066,144 15,693,793 3.5
- ------------------------------------------------------------------------------------------------------------------------------------
Telecom- 23,600 AT&T Corp. 1,282,057 1,062,000 0.2
munications 57,200 Bell Atlantic Corporation 3,462,831 3,503,500 0.8
21,800 MCI WorldCom Inc. 1,858,985 1,649,987 0.4
33,300 SBC Communications Inc. 1,866,679 1,598,400 0.3
39,100 Sprint Corp. (FON Group) 2,072,783 1,735,063 0.4
19,600 Sprint Corp. (PCS Group) 949,795 1,171,100 0.3
----------------------------------------------------
11,493,130 10,720,050 2.4
- ------------------------------------------------------------------------------------------------------------------------------------
US US$7,700,000 Federal Home Loan Mortgage
Govern- Corporation, 5% due
ment 1/15/2004 7,289,205 7,242,774 1.6
Agency Federal National Mortgage
Obliga- Association:
tions (Y)660,000,000 2.125% due 10/09/2007 5,891,314 6,184,112 1.4
US$8,000,000 5.25% due 1/15/2009 7,499,600 7,112,480 1.6
----------------------------------------------------
20,680,119 20,539,366 4.6
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
August 31, 1999 (12) Mercury Global Balanced Fund
<PAGE>
SCHEDULE OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
In US Dollars
----------------------------------------------------
Shares Held/ Percent of
Industries Face Amount Investments Cost Value Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C> <C>
NORTH AMERICA (concluded)
====================================================================================================================================
United States (concluded)
US US Treasury Bonds:
Govern- US$7,300,000 11.75% due 11/15/2014 $ 10,855,328 $ 10,184,668 2.3%
ment US$3,600,000 8% due 11/15/2021 4,486,437 4,241,232 0.9
Obliga- US$8,400,000 US Treasury Notes,
tions 5% due 4/30/2001 8,349,469 8,305,500 1.9
----------------------------------------------------
23,691,234 22,731,400 5.1
- ------------------------------------------------------------------------------------------------------------------------------------
Total Investments in
North America 166,768,055 166,989,877 37.3
- ------------------------------------------------------------------------------------------------------------------------------------
PACIFIC BASIN/ASIA
====================================================================================================================================
Australia
Banking 89,000 Colonial Limited 334,509 334,389 0.1
29,000 Commonwealth Bank of
Australia 516,340 456,185 0.1
----------------------------------------------------
850,849 790,574 0.2
- ------------------------------------------------------------------------------------------------------------------------------------
Business/ 11,000 Brambles Industries Limited 312,358 306,322 0.0
Public Services
- ------------------------------------------------------------------------------------------------------------------------------------
Electrical & 79,000 Telstra Corporation Limited 425,236 410,776 0.1
Electronics
- ------------------------------------------------------------------------------------------------------------------------------------
For- A$6,100,000 Australian Government Bonds,
eign 7.50% due 7/15/2005 4,332,220 4,147,686 0.9
Government
Obligations
- ------------------------------------------------------------------------------------------------------------------------------------
Forest 61,000 Amcor Limited 353,367 317,765 0.1
Products &
Paper
- ------------------------------------------------------------------------------------------------------------------------------------
Merchandising 44,000 Coles Myer Limited 233,900 245,377 0.1
- ------------------------------------------------------------------------------------------------------------------------------------
Metals/ 46,000 Rio Tinto Limited 778,416 789,461 0.2
Non-Ferrous
- ------------------------------------------------------------------------------------------------------------------------------------
Recreation & 29,000 TABCORP Holdings Limited 232,406 197,971 0.0
Other
Consumer
Goods
- ------------------------------------------------------------------------------------------------------------------------------------
Total Investments in Australia 7,518,752 7,205,932 1.6
- ------------------------------------------------------------------------------------------------------------------------------------
Hong Kong
Industrial 74,000 Hutchison Whampoa Limited 680,379 721,912 0.2
Components
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
August 31, 1999 (13) Mercury Global Balanced Fund
<PAGE>
SCHEDULE OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
In US Dollars
----------------------------------------------------
Shares Percent of
Industries Held Investments Cost Value Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C> <C>
PACIFIC BASIN/ASIA (continued)
====================================================================================================================================
Hong Kong (concluded)
Transpor- 309,000 Cathay Pacific Airways $ 512,618 $ 525,294 0.1%
tation--
Airlines
- ------------------------------------------------------------------------------------------------------------------------------------
Utilities-- 418,000 Hong Kong and China Gas
Electric & Company Ltd. 612,028 594,851 0.1
Gas
- ------------------------------------------------------------------------------------------------------------------------------------
Total Investments in
Hong Kong 1,805,025 1,842,057 0.4
- ------------------------------------------------------------------------------------------------------------------------------------
Japan
Appliances & 23,800 Sony Corporation 2,308,427 3,082,609 0.7
Household
Durables
- ------------------------------------------------------------------------------------------------------------------------------------
Automobiles 77,000 Toyota Motor Corporation 2,294,896 2,271,739 0.5
- ------------------------------------------------------------------------------------------------------------------------------------
Banking 132,000 The Bank of Tokyo-Mitsubishi,
Ltd. 1,942,026 1,971,319 0.4
145,000 The Sumitomo Bank, Ltd. 1,965,785 1,986,664 0.5
----------------------------------------------------
3,907,811 3,957,983 0.9
- ------------------------------------------------------------------------------------------------------------------------------------
Beverages & 168 Japan Tobacco, Inc. 1,829,380 2,332,481 0.5
Tobacco
- ------------------------------------------------------------------------------------------------------------------------------------
Chemicals 235,000 Asahi Chemical Industry
Co., Ltd. 1,421,827 1,255,709 0.3
- ------------------------------------------------------------------------------------------------------------------------------------
Data 91,000 Fujitsu Limited 1,652,752 2,668,159 0.6
Processing &
Reproduction
- ------------------------------------------------------------------------------------------------------------------------------------
Electrical & 192 NTT Data Corporation 1,475,758 1,858,970 0.4
Electronics
- ------------------------------------------------------------------------------------------------------------------------------------
Electronic 6,000 Fujitsu Support and Service
Components/ Inc. (FSAS) 820,421 1,550,968 0.3
Instruments 32,000 Murata Manufacturing
Co., Ltd. 1,940,675 2,572,159 0.6
----------------------------------------------------
2,761,096 4,123,127 0.9
- ------------------------------------------------------------------------------------------------------------------------------------
Financial 168,000 The Nomura Securities
Services Co., Ltd. 1,885,187 2,462,916 0.6
- ------------------------------------------------------------------------------------------------------------------------------------
Food & 83,000 Kao Corporation 2,214,713 2,357,782 0.5
Household
Products
- ------------------------------------------------------------------------------------------------------------------------------------
Health & 41,000 Takeda Chemical Industries 1,869,679 2,059,737 0.5
Personal
Care
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
August 31, 1999 (14) Mercury Global Balanced Fund
<PAGE>
SCHEDULE OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
In US Dollars
----------------------------------------------------
Shares Percent of
Industries Held Investments Cost Value Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C> <C>
PACIFIC BASIN/ASIA (concluded)
====================================================================================================================================
Japan (concluded)
Industrial 80,000 Bridgestone Corp. $ 2,271,798 $ 2,265,254 0.5%
Components
- ------------------------------------------------------------------------------------------------------------------------------------
Machinery & 31,000 Komori Corporation 563,229 665,418 0.2
Engineering 437,000 Sumitomo Heavy
Industries, Ltd. 1,091,282 1,468,908 0.3
----------------------------------------------------
1,654,511 2,134,326 0.5
- ------------------------------------------------------------------------------------------------------------------------------------
Merchan- 22,000 Ito-Yokado Co., Ltd. 1,449,710 1,619,657 0.3
dising 31,000 Tokyo Electron Limited 1,872,143 2,180,307 0.5
----------------------------------------------------
3,321,853 3,799,964 0.8
- ------------------------------------------------------------------------------------------------------------------------------------
Metals-- 998,000 Nippon Steel Corporation 2,370,274 2,616,240 0.6
Steel
- ------------------------------------------------------------------------------------------------------------------------------------
Real Estate 233,000 Mitsubishi Estate Company,
Limited 2,399,176 2,409,171 0.5
- ------------------------------------------------------------------------------------------------------------------------------------
Telecom- 200 NTT Mobile Communications
munications Network, Inc. 2,384,110 3,310,194 0.7
141 Nippon Telegraph & Telephone
Corporation (NTT) 1,505,958 1,584,125 0.4
----------------------------------------------------
3,890,068 4,894,319 1.1
- ------------------------------------------------------------------------------------------------------------------------------------
Textiles & 274,000 Toray Industries, Inc. 1,389,002 1,406,540 0.3
Apparel 14,100 World Co., Ltd. 869,248 1,642,081 0.4
----------------------------------------------------
2,258,250 3,048,621 0.7
- ------------------------------------------------------------------------------------------------------------------------------------
Transpor- 253 East Japan Railway Company 1,420,076 1,532,143 0.3
tation--
Road & Rail
- ------------------------------------------------------------------------------------------------------------------------------------
Utilities-- 64,000 Tokyo Electric Power 1,432,666 1,490,683 0.3
Electric &
Gas
- ------------------------------------------------------------------------------------------------------------------------------------
Total Investments in Japan 44,640,198 52,621,933 11.7
- ------------------------------------------------------------------------------------------------------------------------------------
Singapore
Broad- 28,000 Singapore Press Holdings Ltd. 406,033 465,863 0.1
casting &
Publishing
- ------------------------------------------------------------------------------------------------------------------------------------
Transpor- 29,000 Singapore Airlines Ltd. 'Foreign' 275,285 272,268 0.1
tation--
Airlines
- ------------------------------------------------------------------------------------------------------------------------------------
Total Investments in Singapore 681,318 738,131 0.2
- ------------------------------------------------------------------------------------------------------------------------------------
Total Investments in the
Pacific Basin/Asia 54,645,293 62,408,053 13.9
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
August 31, 1999 (15) Mercury Global Balanced Fund
<PAGE>
SCHEDULE OF INVESTMENTS (CONCLUDED)
<TABLE>
<CAPTION>
In US Dollars
----------------------------------------------------
Face Short-Term Percent of
Amount Securities Cost Value Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C> <C>
Commercial US$6,690,000 General Motors
Paper* Acceptance Corp.,
5.56% due
9/01/1999 $ 6,690,000 $ 6,690,000 1.5%
- ------------------------------------------------------------------------------------------------------------------------------------
Total Investments in
Commercial Paper 6,690,000 6,690,000 1.5
- ------------------------------------------------------------------------------------------------------------------------------------
US Government US Treasury Bills:
Obligations* 1,750,000 4.56% due
10/28/1999 1,737,365 1,737,365 0.4
3,650,000 4.60% due
10/28/1999 3,623,554 3,623,554 0.8
8,650,000 4.76% due
11/18/1999 8,562,385 8,561,165 1.9
- ------------------------------------------------------------------------------------------------------------------------------------
Total Investments in
US Government
Obligations 13,923,304 13,922,084 3.1
====================================================
- ------------------------------------------------------------------------------------------------------------------------------------
Total Investments in
Short-Term Securities 20,613,304 20,612,084 4.6
====================================================
- ------------------------------------------------------------------------------------------------------------------------------------
Total Investments $434,447,338 436,883,769 97.6
============
Unrealized Depreciation on
Forward Foreign Exchange Contracts** (82,463) 0.0
Other Assets Less Liabilities 10,887,038 2.4
-----------------------------
Net Assets $447,688,344 100.0%
=============================
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Commercial Paper and certain US Government Obligations are traded on a
discount basis; the interest rates shown reflect the discount rates paid
at the time of purchase by the Portfolio.
** Forward foreign exchange contracts as of August 31, 1999 were as follows:
- -------------------------------------------------------------
Foreign Expiration Unrealized
Currency Purchased Date Depreciation
- -------------------------------------------------------------
Dkr 13,000,000 October 1999 $ (14,351)
(euro) 10,500,000 October 1999 (85,950)
- -------------------------------------------------------------
(US$ Commitment--$13,071,699) $(100,301)
---------
- -------------------------------------------------------------
Unrealized
Foreign Expiration Appreciation
Currency Sold Date (Depreciation)
- -------------------------------------------------------------
A$ 6,170,000 October 1999 $ 75,212
Dkr 52,000,000 October 1999 2,126
(euro) 81,057,000 October 1999 230,607
Skr 26,800,000 October 1999 (20,752)
(Y) 679,000,000 October 1999 (269,355)
- -------------------------------------------------------------
(US$ Commitment--$106,706,564) $ 17,838
---------
- -------------------------------------------------------------
Total Unrealized Depreciation on
Forward Foreign Exchange
Contracts--Net $ (82,463)
=========
- -------------------------------------------------------------
August 31, 1999 (16) Mercury Global Balanced Fund
<PAGE>
PORTFOLIO INFORMATION
WORLDWIDE INVESTMENTS AS OF AUGUST 31, 1999
Ten Largest Percent of
Equity Holdings Net Assets
==========================================================
Microsoft Corporation 1.7%
- ----------------------------------------------------------
General Electric Company 1.5
- ----------------------------------------------------------
Texas Instruments Incorporated 1.1
- ----------------------------------------------------------
Mobil Corporation 1.0
- ----------------------------------------------------------
Wal-Mart Stores, Inc. 0.9
- ----------------------------------------------------------
Nokia Oyj 0.9
- ----------------------------------------------------------
Walgreen Co. 0.9
- ----------------------------------------------------------
Intel Corporation 0.9
- ----------------------------------------------------------
Exxon Corporation 0.9
- ----------------------------------------------------------
American Express Company 0.8
- ----------------------------------------------------------
Ten Largest Percent of
Fixed-Income Holdings Net Assets
==========================================================
Bundesrepublic Deutschland,
6.875% due 5/12/2005 3.1%
- ----------------------------------------------------------
Bundesobligation, 3.25% due
2/17/2004 3.0
- ----------------------------------------------------------
Bundesobligation, 5% due
8/20/2001 2.6
- ----------------------------------------------------------
French Btan, 4.50% due
7/12/2002 2.5
- ----------------------------------------------------------
Bundesrepublic Deutschland,
6.75% due 7/15/2004 2.4
- ----------------------------------------------------------
US Treasury Bonds, 11.75% due
11/15/2014 2.3
- ----------------------------------------------------------
US Treasury Notes, 5% due
4/30/2001 1.9
- ----------------------------------------------------------
Netherlands Government Bonds,
3.75% due 7/15/2009 1.6
- ----------------------------------------------------------
Federal Home Loan
Mortgage Corporation,
5% due 1/15/2004 1.6
- ----------------------------------------------------------
Federal National Mortgage
Association, 5.25% due
1/15/2009 1.6
- ----------------------------------------------------------
Ten Largest Industries Percent of
(Equity Investments) Net Assets
==========================================================
Telecommunications 6.5%
- ----------------------------------------------------------
Banking 6.3
- ----------------------------------------------------------
Health & Personal Care 5.3
- ----------------------------------------------------------
Merchandising 5.2
- ----------------------------------------------------------
Electrical & Electronics 5.0
- ----------------------------------------------------------
Energy Sources 4.9
- ----------------------------------------------------------
Electronic Components/Instruments 4.0
- ----------------------------------------------------------
Insurance 3.3
- ----------------------------------------------------------
Food & Household Products 2.7
- ----------------------------------------------------------
Business & Public Services 2.7
- ----------------------------------------------------------
August 31, 1999 (17) Mercury Global Balanced Fund
<PAGE>
PORTFOLIO INFORMATION (CONCLUDED)
PORTFOLIO CHANGES FOR THE QUARTER ENDED AUGUST 31, 1999
Additions
==========================================================
Aerospatiale Matra
- ----------------------------------------------------------
Amcor Limited
- ----------------------------------------------------------
Chevron Corporation
- ----------------------------------------------------------
East Japan Railway Company
- ----------------------------------------------------------
Fujitsu Support and Service Inc. (FSAS)
- ----------------------------------------------------------
Granada Group PLC
- ----------------------------------------------------------
Intel Corporation
- ----------------------------------------------------------
Investor AB 'B'
- ----------------------------------------------------------
Ito-Yokado Co., Ltd.
- ----------------------------------------------------------
Land Securities
- ----------------------------------------------------------
NTT Mobile Communications Network, Inc.
- ----------------------------------------------------------
Rio Tinto PLC (Registered Shares)
- ----------------------------------------------------------
Telecom Italia Mobile (TIM) SpA
- ----------------------------------------------------------
Telecom Italia SpA (Registered)
- ----------------------------------------------------------
Telefonica Publicidad e Informacion, SA
- ----------------------------------------------------------
Unilever PLC
- ----------------------------------------------------------
Usinor SA
- ----------------------------------------------------------
Vedior NV 'A'
- ----------------------------------------------------------
Deletions
==========================================================
Airtouch Communications, Inc.
- ----------------------------------------------------------
Bank One Corporation
- ----------------------------------------------------------
Credit Commercial de France
- ----------------------------------------------------------
Foster's Brewing Group Limited
- ----------------------------------------------------------
The Goldman Sachs Group, Inc.
- ----------------------------------------------------------
Providian Financial Corporation
- ----------------------------------------------------------
Schering-Plough Corporation
- ----------------------------------------------------------
Volkswagen AG (Preferred)
- ----------------------------------------------------------
Yahoo! Inc.
- ----------------------------------------------------------
August 31, 1999 (18) Mercury Global Balanced Fund
<PAGE>
OFFICERS AND DIRECTORS
Jeffrey M. Peek, Director and President
David O. Beim, Director
James T. Flynn, Director
W. Carl Kester, Director
Karen P. Robards, Director
Terry K. Glenn, Director and
Executive Vice President
Peter John Gibbs, Senior Vice President
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
(888) 763-2260
This report is not authorized for use as an offer of sale or a solicitation
of an offer to buy shares of the Fund unless accompanied or preceded by the
Fund's current prospectus. Past performance results shown in this report
should not be considered a representation of future performance. Investment
return and principal value of shares will fluctuate so that shares, when
redeemed, may be worth more or less than their original cost. Statements
and other information herein are as dated and are subject to change.
The Fund seeks long-term capital growth and current income. The Fund will
seek to achieve its objective by investing all of its assets in Mercury
Master Global Balanced Portfolio of Mercury Asset Management Master Trust,
which has the same investment objective as the Fund. The Portfolio is
managed in two segments, an equity segment and a bond segment. The
Portfolio invests in a mix of stocks and high-quality bonds of issuers
located in the United States and other developed countries. The Portfolio's
neutral position consists of approximately 60% invested in stocks and 40%
in bonds, although the Portfolio may vary each of these percentages up to
15% in either direction based on current economic and market conditions.
The Fund's investment experience will correspond to the investment
experience of the Portfolio.
Mercury Global Balanced Fund of
Mercury Asset Management Funds, Inc.
Box 9011
Princeton, NJ
08543-9011
[RECYCLE LOGO] Printed on post-consumer recycled paper MERCBAL--8/99
