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MERCURY QA STRATEGY SERIES INC/
497, 2000-03-14

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Mercury QA Strategy Growth And Income Fund

Mercury QA Strategy Long-Term Growth Fund

Mercury QA Strategy All-Equity Fund

PAGE
[GRAPHIC]
FUND FACTS
About the Mercury QA Strategy Funds   2
Risk/Return Bar Chart and Table   8
Fees And Expenses   9
[GRAPHIC]
ABOUT THE DETAILS
How the Funds Invest   15
Investment Risks   23
Statement of Additional Information   30
[GRAPHIC]
ACCOUNT CHOICES
Pricing of Shares   31
How to Buy, Sell, Transfer and Exchange Shares   36
How Shares are Priced   40
Fee-Based Programs   41
Dividends and Taxes   41
[GRAPHIC]
THE PORTFOLIO MANAGEMENT
Management of the Funds   43
[GRAPHIC]
TO LEARN MORE
Shareholder Reports   Back Cover
Statement of Additional Information   Back Cover

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Fund		Target		Range
Mercury QA Strategy Growth and Income Fund
Equity		55%		40%-70%
Fixed-Income and Cash Equivalents*		45%		30%-60%
Mercury QA Strategy Long-Term Growth Fund
Equity		75%		60%-90%
Fixed-Income and Cash Equivalents*		25%		10%-40%
Mercury QA Strategy All-Equity Fund
Equity		100%		95%-100%
Fixed-Income and Cash Equivalents*		0%		0%-5%

*	The Fund intends to maintain cash positions, either directly or through its investment in the underlying funds, to the extent such underlying funds maintain cash positions.

		Range of Assets of
Underlying Fund		Mercury QA Strategy Growth and Income Fund		Mercury QA Strategy Long-Term Growth Fund		Mercury QA Strategy All-Equity Fund
Equity Asset Class
Mercury QA Large Cap Core Fund of Mercury QA Equity Series, Inc.		15%		22%		27%
Mercury QA Large Cap Value Fund of Mercury QA Equity Series, Inc.		15%		22%		27%
Mercury QA Large Cap Growth Fund of Mercury QA Equity Series, Inc.		15%		22%		27%
Mercury QA Mid Cap Fund of Mercury QA Equity Series, Inc.		4%		7%		9%
Mercury QA Small Cap Fund of Mercury QA Equity Series, Inc.		3%		4%		5%
Mercury QA International Fund of Mercury QA Equity Series, Inc.		3%		3%		5%
Fixed-Income Asset Class
Master Aggregate Bond Index Series of Quantitative Master Series Trust		45%		20%		0%
The investment adviser of the Mercury QA Equity Funds seeks to maximize each Mercury QA Equity Fund’s expected return by utilizing a disciplined approach to sector weighting, stock selection and portfolio construction which combines quantitative analysis, in-depth research and risk management disciplines to produce style purity with respect to a particular market segment. The investment adviser of the Mercury QA Equity Funds uses three principal strategies to select investments for each Mercury QA Equity Fund. First the investment adviser of the Mercury QA Equity Funds uses a “top-down” analysis to identify high performing sectors. Second, the investment adviser of the Mercury QA Equity Funds uses a “bottom-up” stock selection approach to identify those securities within a sector that seem to be the most attractive. Depending on the Mercury QA Equity Fund, this analysis involves selection of stocks through a “value” strategy, a “growth ” strategy, or a blend of the two. Third, the investment adviser of the Mercury QA Equity Funds uses quantitative risk management techniques to produce an overall portfolio with risk and style characteristics similar to each Mercury QA Equity Fund’s respective market segment.

Fund		Market Segment
Mercury QA Large Cap Core Fund of Mercury QA Equity Series, Inc.		stocks of large-capitalization companies selected through a blend of “value” and “growth” strategies
Mercury QA Large Cap Value Fund of Mercury QA Equity Series, Inc.		stocks of large-capitalization companies selected through a “value” strategy
Mercury QA Large Cap Growth Fund of Mercury QA Equity Series, Inc.		stocks of large-capitalization companies selected through a “growth” strategy
Mercury QA Mid Cap Fund of Mercury QA Equity Series, Inc.		stocks of mid-capitalization companies selected through a blend of “value” and “growth” strategies
Mercury QA Small Cap Fund of Mercury QA Equity Series, Inc.		stocks of small-capitalization companies selected through a blend of “value” and “growth” strategies
Mercury QA International Fund of Mercury QA Equity Series, Inc.		stocks of companies whose primary trading markets are located outside of the United States with an emphasis on larger capitalization companies in these markets selected through a blend of “value” and “growth” strategies

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Are investing with long term goals, such as retirement or funding a child’s education

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Want a professionally managed portfolio

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Are willing to accept the risk that the value of your investment may fluctuate (over the short term and the long term) in order to seek potentially higher long term returns

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Are looking for a moderate amount of current income

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Are investing with long term goals, such as retirement or funding a child’s education

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Want a professionally managed portfolio

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Are willing to accept the risk that the value of your investment may fluctuate (over the short term and the long term) in order to seek potentially long term capital growth

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Are looking for some current income

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Are investing with long term goals, such as retirement or funding a child’s education

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Want a professionally managed portfolio

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Are willing to accept the risk that the value of your investment may fluctuate (over the short term and the long term) in order to seek potentially long term capital growth

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Are not looking for a significant amount of current income

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Shareholder Fees (fees paid directly from your investment)(b):		Mercury QA Strategy Growth and Income Fund		Mercury QA Strategy Long-Term Growth Fund		Mercury QA Strategy All-Equity Fund
Maximum Sales Charge (Load) imposed on purchases (as a percentage of offering price)(c)		5.25%		5.25%		5.25%
Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption proceeds, whichever is lower)(d)		None		None		None
Maximum Sales Charge (Load) imposed on dividend reinvestments		None		None		None
Redemption Fee		None		None		None
Exchange Fee		None		None		None
Annual Fund Operating Expenses (expenses that are deducted from Fund assets):
Management Fee(e)		0.15%		0.15%		0.15%
Distribution and/or Service (12b-1) Fees(f)		None		None		None
Other Expenses (including transfer agency fees)(g)		.43%		.43%		.33%
Underlying Fund Expenses(h)		.74%		1.03%		1.25%
Administrative Fees		.35%		.35%		.35%
Total Other Expenses		1.52%		1.81%		1.93%
Total Annual Fund Operating Expenses		1.67%		1.96%		2.08%
Fee Waiver(i)		(.35)%		(.35)%		(.35)%
Total Net Operating Expenses(j)		1.32%		1.61%		1.73%

Shareholder Fees (fees paid directly from your investment)(b):		Mercury QA Strategy Growth and Income Fund		Mercury QA Strategy Long-Term Growth Fund		Mercury QA Strategy All-Equity Fund
Maximum Sales Charge (Load) imposed on purchases (as a percentage of offering price)(c)		5.25%		5.25%		5.25%
Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption proceeds, whichever is lower)(d)		None		None		None
Maximum Sales Charge (Load) imposed on dividend reinvestments		None		None		None
Redemption Fee		None		None		None
Exchange Fee		None		None		None
Annual Fund Operating Expenses (expenses that are deducted from Fund assets):
Management Fee(e)		0.15%		0.15%		0.15%
Distribution and/or Service (12b-1) Fees(f)		0.25%		0.25%		0.25%
Other Expenses (including transfer agency fees)(g)		.43%		.43%		.33%
Underlying Fund Expenses(h)		.74%		1.03%		1.25%
Administrative Fees		.35%		.35%		.35%
Total Other Expenses		1.52%		1.81%		1.93%
Total Annual Fund Operating Expenses		1.92%		2.21%		2.33%
Fee Waiver(i)		(.35)%		(.35)%		(.35)%
Total Net Operating Expenses(j)		1.57%		1.86%		1.98%

Shareholder Fees (fees paid directly from your investment)(b):		Mercury QA Strategy Growth and Income Fund		Mercury QA Strategy Long-Term Growth Fund		Mercury QA Strategy All-Equity Fund
Maximum Sales Charge (Load) imposed on purchases (as a percentage of offering price)		None		None		None
Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption proceeds, whichever is lower)(c)		4.00%		4.00%		4.00%
Maximum Sales Charge (Load) imposed on dividend reinvestments		None		None		None
Redemption Fee		None		None		None
Exchange Fee		None		None		None
Annual Fund Operating Expenses (expenses that are deducted from Fund assets)(d):
Management Fee(e)		0.15%		0.15%		0.15%
Distribution and/or Service (12b-1) Fees(f)		1.00%		1.00%		1.00%
Other Expenses (including transfer agency fees)(g)		.43%		.43%		.33%
Underlying Fund Expenses(h)		.74%		1.03%		1.25%
Administrative Fees		.35%		.35%		.35%
Total Other Expenses		1.52%		1.81%		1.93%
Total Annual Fund Operating Expenses		2.67%		2.96%		3.08%
Fee Waiver(i)		(.35)%		(.35)%		(.35)%
Total Net Operating Expenses(j)		2.32%		2.61%		2.73%

Shareholder Fees (fees paid directly from your investment)(b):		Mercury QA Strategy Growth and Income Fund		Mercury QA Strategy Long-Term Growth Fund		Mercury QA Strategy All-Equity Fund
Maximum Sales Charge (Load) imposed on purchases (as a percentage of offering price)		None		None		None
Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption proceeds, whichever is lower)(c)		1.00%		1.00%		1.00%
Maximum Sales Charge (Load) imposed on dividend reinvestments		None		None		None
Redemption Fee		None		None		None
Exchange Fee		None		None		None
Annual Fund Operating Expenses (expenses that are deducted from Fund assets):
Management Fee(e)		0.15%		0.15%		0.15%
Distribution and/or Service (12b-1) Fees(f)		1.00%		1.00%		1.00%
Other Expenses (including transfer agency fees)(g)		.43%		.43%		.33%
Underlying Fund Expenses(h)		0.74%		1.03%		1.25%
Administrative Fees		.35%		.35%		.35%
Total Other Expenses		1.52%		1.81%		1.93%
Total Annual Fund Operating Expenses		2.67%		2.96%		3.08%
Fee Waiver(i)		(.35)%		(.35)%		(.35)%
Total Net Operating Expenses(j)		2.32%		2.61%		2.73%

(a)	Class B shares automatically convert to Class A shares about eight years after you buy them and will no longer be subject to distribution fees.

(b)	In addition, certain securities dealers may charge a fee to process a purchase or sale of shares.

(c)	Some investors may qualify for reductions in the sales charge (load).

(d)	You may pay a deferred sales charge if you purchase $1 million or more and you redeem within one year.

(e)	The investment adviser or its affiliate provides accounting services to each Fund at its cost.

(f)

The Funds call the “Service Fee ” an “Account Maintenance Fee.” Account Maintenance Fee is the term used elsewhere in this Prospectus and in all other materials. Class B and Class C shares pay a Distribution Fee of 0.75% and a Service (Account Maintenance) Fee of 0.25%. Class A shares pay only a Service (Account Maintenance) Fee of 0.25%.

(g)

Based on estimated amounts for the current fiscal year. The transfer agent is an affiliate of the investment adviser. The Funds pay the transfer agent a fee for each shareholder account and reimburses it for out-of-pocket expenses. The fee ranges from $11.00 to $23.00 per account (depending on the level of services required), but is set at 0.10% for certain accounts that participate in certain fee-based programs.

(h)

“Underlying Fund Expenses” for each Fund are based upon assets of each Fund that are initially expected to be invested in each underlying fund and upon the actual total operating expenses of the underlying funds (including any current waivers and expense limitations of the underlying funds). Actual Underlying Fund Expenses incurred by each Fund may vary with changes in the allocation of each Fund’s assets among the underlying funds and with other events that directly affect the expenses of the underlying funds.

(i)

With respect to each Fund, the investment adviser has entered into a contractual arrangement with the Funds to waive the Administrative Fee of .35%. The investment adviser has agreed to voluntarily limit Other Expenses to .15%. As a result, the Total Net Operating Expenses with respect to all classes (excluding Distribution and/or Service Fees) for Mercury QA Strategy Growth and Income Fund would be 1.04%, Mercury QA Strategy Long-Term Growth Fund would be 1.33% and Mercury QA Strategy All-Equity Fund would be 1.55%, respectively.

(j)	The Total Net Operating Expenses reflect the investment adviser’s estimate of expenses that will actually be incurred during each Fund’s current fiscal year, restated to reflect the contractual fee waiver currently in effect.

CLASS I SHARES
		Mercury QA Strategy Growth and Income Fund		Mercury QA Strategy Long-Term Growth Fund		Mercury QA Strategy All-Equity Fund
One Year		$   652		$   680		$   692
Three Years †		$   993		$1,077		$1,112
CLASS A SHARES
		Mercury QA Strategy Growth and Income Fund		Mercury QA Strategy Long-Term Growth Fund		Mercury QA Strategy All-Equity Fund
One Year		$   676		$   704		$   715
Three Years †		$1,066		$1,150		$1,184
CLASS B SHARES
		Mercury QA Strategy Growth and Income Fund		Mercury QA Strategy Long-Term Growth Fund		Mercury QA Strategy All-Equity Fund
One Year		$   635		$   664		$   676
Three Years †		$1,098		$1,185		$1,220

CLASS C SHARES
		Mercury QA Strategy Growth and Income Fund		Mercury QA Strategy Long-Term Growth Fund		Mercury QA Strategy All-Equity Fund
One Year		$   335		$   364		$   376
Three Years †		$   798		$   885		$   920
Expenses if you did not redeem your shares:
CLASS I SHARES
		Mercury QA Strategy Growth and Income Fund		Mercury QA Strategy Long-Term Growth Fund		Mercury QA Strategy All-Equity Fund
One Year		$   652		$   680		$   692
Three Years †		$   993		$1,077		$1,112
CLASS A SHARES
		Mercury QA Strategy Growth and Income Fund		Mercury QA Strategy Long-Term Growth Fund		Mercury QA Strategy All-Equity Fund
One Year		$   676		$   704		$   715
Three Years †		$1,066		$1,150		$1,184
CLASS B SHARES
		Mercury QA Strategy Growth and Income Fund		Mercury QA Strategy Long-Term Growth Fund		Mercury QA Strategy All-Equity Fund
One Year		$   235		$   264		$   276
Three Years †		$   798		$   885		$   920
CLASS C SHARES
		Mercury QA Strategy Growth and Income Fund		Mercury QA Strategy Long-Term Growth Fund		Mercury QA Strategy All-Equity Fund
One Year		$   235		$   264		$   276
Three Years †		$   798		$   885		$   920

†	These expenses do not reflect the continuation of the contractual arrangement between the investment adviser and each Fund to waive the Administrative Fee of 0.35%.

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Fund		Target		Range
Mercury QA Strategy Growth and Income Fund
Equity		55%		40%-70%
Fixed-Income and Cash Equivalents*		45%		30%-60%
Mercury QA Strategy Long-Term Growth Fund
Equity		75%		60%-90%
Fixed-Income and Cash Equivalents*		25%		10%-40%
Mercury QA Strategy All-Equity Fund
Equity		100%		95%-100%
Fixed-Income and Cash Equivalents*		0%		0%-5%

*	The Fund intends to maintain cash positions, either directly or through its investment in the underlying funds to the extent such underlying funds maintain cash positions.

		Range of Assets of
Underlying Fund		Mercury QA Strategy Growth and Income Fund		Mercury QA Strategy Long-Term Growth Fund		Mercury QA Strategy All-Equity Fund
Equity Asset Class
Mercury QA Large Cap Core Fund of Mercury QA Equity Series, Inc.		15%		22%		27%
Mercury QA Large Cap Value Fund of Mercury QA Equity Series, Inc.		15%		22%		27%
Mercury QA Large Cap Growth Fund of Mercury QA Equity Series, Inc.		15%		22%		27%
Mercury QA Mid Cap Fund of Mercury QA Equity Series, Inc.		4%		7%		9%
Mercury QA Small Cap Fund of Mercury QA Equity Series, Inc.		3%		4%		5%
Mercury QA International Fund of Mercury QA Equity Series, Inc.		3%		3%		5%
Fixed-Income Asset Class
Master Aggregate Bond Index Series of Quantitative Master Series Trust		45%		20%		0%

Underlying Fund		Investment Objective
Equity Asset Class
Mercury QA Large Cap Core Fund of    Mercury QA Equity Series, Inc.		to provide long-term growth of capital
Mercury QA Large Cap Value Fund of    Mercury QA Equity Series, Inc.		primarily to provide long-term growth of capital and secondarily to provide dividend income
Mercury QA Large Cap Growth Fund of    Mercury QA Equity Series, Inc.		to provide long-term growth of capital
Mercury QA Mid Cap Fund of    Mercury QA Equity Series, Inc.		to provide long-term growth of capital
Mercury QA Small Cap Fund of    Mercury QA Equity Series, Inc.		to provide long-term growth of capital
Mercury QA International Fund of    Mercury QA Equity Series, Inc.		to provide long-term growth of capital
Fixed-Income Asset Class
Master Aggregate Bond Index Series of    Quantitative Master Series Trust		to match the performance of the Lehman Brothers Aggregate Bond Index as closely as possible before the deduction of expenses

Fund		Market  Segment
Mercury QA Large Cap Core Fund of    Mercury QA Equity Series, Inc.		stocks of large-capitalization companies selected through a blend of “value” and “growth” strategies
Mercury QA Large Cap Value Fund of    Mercury QA Equity Series, Inc.		stocks of large-capitalization companies selected through a “value” strategy
Mercury QA Large Cap Growth Fund of    Mercury QA Equity Series, Inc.		stocks of large-capitalization companies selected through a “growth” strategy
Mercury QA Mid Cap Fund of    Mercury QA Equity Series, Inc.		stocks of mid-capitalization companies selected through a blend of “value” and “growth” strategies
Mercury QA Small Cap Fund of    Mercury QA Equity Series, Inc.		stocks of small-capitalization companies selected through a blend of “value” and “growth” strategies
Mercury QA International Fund of    Mercury QA Equity Series, Inc.		stocks of companies whose primary trading markets are located outside of the United States with an emphasis on larger capitalization companies in these markets selected through a blend of “value” and “growth” strategies

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earnings (surprises and analysts’ revisions)

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momentum (price and earnings)

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valuation (enterprise value, price versus cash flows, and dividend discount models)

Fund		Index
Mercury QA Large Cap Core Fund of    Mercury QA Equity Series, Inc.		Standard & Poor ’s 500 Composite Stock Price Index (“S&P 500”)
Mercury QA Large Cap Value Fund of    Mercury QA Equity Series, Inc.		Standard & Poor ’s 500/Barra Value Index
Mercury QA Large Cap Growth Fund of    Mercury QA Equity Series, Inc.		Standard & Poor ’s 500/Barra Growth Index
Mercury QA Mid Cap Fund of    Mercury QA Equity Series, Inc.		Standard & Poor ’s Mid Cap 400 Index
Mercury QA Small Cap Fund of    Mercury QA Equity Series, Inc.		Standard & Poor ’s SmallCap 600 Index
Mercury QA International Fund of    Mercury QA Equity Series, Inc.		Morgan Stanley Capital International Europe, Asia and Far East Capitalization Weighted Index (“EAFE Index”)

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Leverage risk — the risk associated with certain types of investments or trading strategies that relatively small market movements may result in large changes in the value of an investment. Certain investments or trading strategies that involve leverage can result in losses that greatly exceed the amount originally invested.

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Credit risk — the risk that the counterparty (the party on the other side of the transaction) on a derivative transaction will be unable to honor its financial obligation to a Fund.

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Currency risk — the risk that changes in the exchange rate between currencies will adversely affect the value (in U.S. dollar terms) of an investment.

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Liquidity risk — the risk that certain securities may be difficult or impossible to sell at the time that a Fund would like or at the price that a Fund believes the security is then worth.

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The economies of certain foreign markets often do not compare favorably with that of the United States in areas such as growth of gross domestic product, reinvestment of capital, resources, and balance of payments. Some of these economies may rely heavily on particular industries or foreign capital. They may be more vulnerable to adverse diplomatic developments, the imposition of economic sanctions against a particular country or countries, changes in international trading patterns, trade barriers and other protectionist or retaliatory measures.

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Investments in foreign markets may be adversely affected by governmental actions such as the imposition of capital controls, nationalization of companies or industries, expropriation of assets or the imposition of punitive taxes.

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The governments of certain countries may prohibit or impose substantial restrictions on foreign investing in their capital markets or in certain industries. Any of these actions could severely affect security prices. They could also impair an underlying fund’s ability to purchase or sell foreign securities or transfer the assets or income back into the United States, or otherwise adversely affect the underlying fund’s operations.

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Other foreign market risks include foreign exchange controls, difficulties in pricing securities, defaults on foreign government securities, difficulties in enforcing favorable legal judgments in foreign courts, and political and social instability. Legal remedies available to investors in some foreign countries may be less extensive than those available to investors in the United States.

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Because there are generally fewer investors on foreign exchanges and a fewer number of shares traded each day, it may be more difficult for the underlying funds to buy and sell securities on those exchanges. In addition, prices of foreign securities may go down more than prices of securities traded in the United States.

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Foreign markets may have different clearance and settlement procedures. In certain markets, settlements may be unable to keep pace with the volume of securities transactions. If this occurs, settlement may be delayed and an underlying fund’s assets may be uninvested and not earning returns. The underlying fund may miss investment opportunities or be unable to sell an investment because of these delays.

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If the transition to euro, or EMU as a whole, does not continue to proceed as planned.

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If a participating country withdraws from EMU.

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		Class I			Class A		Class B		Class C
Availability?		Limited to certain investors including:			Generally available through selected securities dealers.		Generally available through selected securities dealers.		Generally available through selected securities dealers.
		Ÿ	Current Class I shareholders
		Ÿ	Certain Retirement Plans
		Ÿ	Participants of certain sponsored programs
		Ÿ	Certain affiliates of selected securities dealers
Initial Sales Charge?		Yes. Payable at time of purchase. Lower sales charges available for certain larger investments.			Yes. Payable at time of purchase. Lower sales charges available for certain larger investments.		No. Entire purchase price is invested in shares of the Fund.		No. Entire purchase price is invested in shares of the Fund.
Deferred Sales Charge?		No. (May be charged for purchases over $1 million that are redeemed within one year).			No. (May be charged for purchases over $1 million that are redeemed within one year).		Yes. Payable if you redeem within six years of purchase.		Yes. Payable if you redeem within one year of purchase.
Account Maintenance and Distribution Fees?		No.			0.25% Account Maintenance Fee. No Distribution Fee.		0.25% Account Maintenance Fee. 0.75% Distribution Fee.		0.25% Account Maintenance Fee. 0.75% Distribution Fee.
Conversion to Class A shares?		No.			Not applicable.		Yes, automatically after approximately 8 years.		No.

Your Investment		As a % of Offering Price		As a % of Your Investment*		Dealer Compensation as a % of Offering Price
Less than $25,000		5.25%		5.54%		5.00%
$25,000 but less than $50,000		4.75%		4.99%		4.50%
$50,000 but less than $100,000		4.00%		4.17%		3.75%
$100,000 but less than $250,000		3.00%		3.09%		2.75%
$250,000 but less than    $1,000,000		2.00%		2.04%		1.80%
$1,000,000 and over**		0.00%		0.00%		0.00%

*	Rounded to the nearest one-hundredth percent.

**

If you invest $1,000,000 or more in Class I or Class A shares of a Fund, you may not pay an initial sales charge. In that case, the investment adviser compensates the selling dealer from its own funds. If you redeem your shares within one year after purchase, you may be charged a deferred sales charge. This charge is 1% of the lesser of the original cost of the shares being redeemed or your redemption proceeds. A sales charge of 0.75% will be charged on purchases of $1,000,000 or more of Class I and Class A shares by certain employer sponsored retirement or savings plans.

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Purchases under a Right of Accumulation or Letter of Intent

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Certain trusts managed by banks, thrifts or trust companies including those affiliated with Mercury or its affiliates

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Certain employer-sponsored retirement or savings plans

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Certain investors, including directors or trustees of mutual funds sponsored by Mercury or its affiliates, employees of Mercury and its affiliates and employees of selected dealers

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Certain fee-based programs managed by Mercury or its affiliates

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Certain fee-based programs managed by selected dealers that have an agreement with Mercury

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Purchases through certain financial advisers that meet and adhere to standards established by Mercury

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Purchases through certain accounts on which Mercury or an affiliate exercises investment discretion

Year Since Purchase		Sales Charge*
0 —1		4.00%
1 —2		4.00%
2 —3		3.00%
3 —4		3.00%
4 —5		2.00%
5 —6		1.00%
6 and after		0.00%

*

The percentage charge will apply to the lesser of the original cost of the shares being redeemed or the proceeds of your redemption. Shares acquired by dividend reinvestment are not subject to a deferred sales charge. Mercury funds may not all have identical deferred sales charge schedules. In the event of an exchange for the shares of another Mercury fund, the higher charge, if any, would apply.

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Certain post-retirement withdrawals from an IRA or other retirement plan if you are over 59  1 /2 years old

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Redemption by certain eligible 401(a) and 401(k) plans, certain related accounts, and certain retirement plan rollovers

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Redemption in connection with participation in certain fee-based programs managed by Mercury or its affiliates

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Redemption in connection with participation in certain fee-based programs managed by selected dealers that have agreements with Mercury

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Withdrawals resulting from shareholder death or disability as long as the waiver request is made within one year after death or disability or, if later, reasonably promptly following completion of probate, or in connection with involuntary termination of an account in which Fund shares are held

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Withdrawal through the Systematic Withdrawal Plan of up to 10% per year of your account value at the time the plan is established

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If you want to		Your choices		Information important for you to know
Buy shares		First, select the share class appropriate for you		Please refer to the pricing of shares table on page 32. Be sure to read this Prospectus carefully.
		Next, determine the amount of your investment		The minimum initial investment for a Fund is $1,000 for all accounts except:
				Ÿ $500 for certain fee-based programs
				Ÿ $100 for retirement plans
				(The minimums for initial investments may be waived or reduced under certain circumstances.)
		Have your financial consultant or securities dealer submit your purchase order		The price of your shares is based on the next calculation of net asset value after your order is placed. Any purchase orders placed prior to the close of business on the New York Stock Exchange (generally 4:00 p.m. Eastern time) will be priced at the net asset value determined that day.
				Purchase orders received after that time will be priced at the net asset value determined on the next business day. A Fund may reject any order to buy shares and may suspend the sale of shares at any time. Certain securities dealers may charge a fee to process a purchase. For example, the fee charged by Merrill Lynch, Pierce, Fenner & Smith Incorporated is currently $5.35. The fees charged by other securities dealers may be higher or lower.
		Or contact the transfer agent		To purchase shares directly, call the transfer agent to request a purchase application. Mail the completed purchase application to the transfer agent at the address on the inside back cover of this Prospectus.
Add to your investment		Purchase additional shares		The minimum investment for additional purchases is generally $100 for all accounts except:
				Ÿ $50 for certain fee-based programs
				Ÿ $1 for retirement plans
				(The minimums for additional purchases may be waived under certain circumstances.)
		Acquire additional shares through the automatic dividend reinvestment plan		All dividends are automatically reinvested without a sales charge.
		Participate in the automatic investment plan		You may automatically invest a specific amount on a periodic basis through your securities dealer:
				Ÿ  The current minimum for such automatic investments is $100. The minimum may be waived or revised under certain circumstances.
Transfer shares to another securities dealer		Transfer to a participating securities dealer		To transfer your shares of a Fund to another securities dealer, authorized dealer agreements must be in place between the distributor and the transferring securities dealer and the distributor and the receiving securities dealer. Certain shareholder services may not be available for the transferred shares. All future trading of these shares must be coordinated by the receiving securities dealer.

If you want to		Your choices		Information important for you to know
		Transfer to a non-participating securities dealer		You cannot transfer your shares of a Fund to a securities dealer that does not have an authorized dealer agreement with the distributor. You must either:
				Ÿ Transfer your shares to an account with the transfer agent; or
				Ÿ Sell your shares, paying any applicable deferred sales charge.
Sell your shares		Have your financial consultant or securities dealer submit your sales order		The price of your shares is based on the next calculation of net asset value after your order is placed. For your redemption request to be priced at the net asset value on the day of your request, you must submit your request to your dealer prior to that day’s close of business on the New York Stock Exchange (generally at 4:00 p.m. Eastern time). Any redemption request placed after that time will be priced at the net asset value at the close of business on the next business day.
				Certain securities dealers may charge a fee to process a sale of shares. For example, the fee charged by Merrill Lynch, Pierce, Fenner & Smith Incorporated is currently $5.35. The fees charged by other securities dealers may be higher or lower.
				A Fund may reject an order to sell shares under certain circumstances.
		Sell through the transfer agent		You may sell shares held at the transfer agent by writing to the transfer agent at the address on the inside back cover of this Prospectus. All shareholders on the account must sign the letter. A signature guarantee will generally be required but may be waived in certain limited circumstances. You can obtain a signature guarantee from a bank, securities dealer, securities broker, credit union, savings association, national securities exchange and registered securities association. A notary public seal will not be acceptable. If you hold stock certificates, return the certificates with the letter. The transfer agent will normally mail redemption proceeds within seven days following receipt of a properly completed request. If you make a redemption request before a Fund has collected payment for the purchase of shares, the Fund or the transfer agent may delay mailing your proceeds. This delay usually will not exceed ten days.
Sell shares systematically		Participate in a Fund ’s Systematic Withdrawal Plan		You can generally arrange through your selected dealer for systematic redemptions of a fixed dollar amount on a monthly, bi-monthly, quarterly, semi-annual or annual basis, subject to certain conditions. You must have dividends automatically reinvested. For Class B and Class C shares your total annual withdrawals cannot be more than 10% of the value of your shares at the time the Plan is established. The deferred sales charge is waived for systematic redemptions. Ask your financial consultant for details.

If you want to		Your choices		Information important for you to know
Exchange your shares		Select the fund into which you want to exchange. Be sure to read that fund’s prospectus.		You can exchange your shares of a Fund for shares of other Mercury mutual funds or for shares of the Summit Cash Reserves Fund. You must have held the shares used in the exchange for at least 15 calendar days before you can exchange to another fund.
				Each class of a Fund ’s shares is generally exchangeable for shares of the same class of another Mercury fund. If you own Class I shares (and wish to exchange into a fund in which you have no Class I shares and you are not eligible to buy Class I Shares), you will exchange into Class A shares. If you own Class I or Class A shares and wish to exchange into Summit, you will exchange into Class A shares of Summit. Class B or Class C shares can be exchanged for Class B shares of Summit.
				Some of the Mercury mutual funds may impose a different initial or deferred sales charge schedule. If you exchange Class I or Class A shares for shares of a fund with a higher initial sales charge than you originally paid, you may be charged the difference at the time of exchange. If you exchange Class B or Class C shares for shares of a fund with a different deferred sales charge schedule, the higher schedule will apply. The time you hold Class B or Class C shares in both funds will count when determining your holding period for calculating a deferred sales charge at redemption. Your time in both funds will also count when determining the holding period for a conversion from Class B to Class A shares.
				Although there is currently no limit on the number of exchanges that you can make, the exchange privilege may be modified or terminated at any time in the future.

Because of the high cost of maintaining smaller shareholder accounts, the Funds may redeem the shares in your account (without charging any deferred sales charge) if the net asset value of your account falls below $500 due to redemptions you have made. You will be notified that the value of your account is less than $500 before the Funds make an involuntary redemption. You will then have 60 days to make an additional investment to bring the value of your account to at least $500 before the Funds take any action. This involuntary redemption does not apply to retirement plans or Uniform Gifts or Transfers to Minors Act accounts.

Each Fund also reserves the right to terminate any account engaging in market-timing mutual funds. For purposes of this policy, “market-timing” involves three or more purchases and/or sales of shares of mutual funds within a 90 day period to capture short term profits resulting from market volatility.

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Underlying Fund		Contractual Management Fee		Annual Fund Operating Expenses
Mercury QA Large Cap Core Fund of Mercury QA Equity Series, Inc.		0.40%		1.16%
Mercury QA Large Cap Value Fund of Mercury QA Equity Series, Inc.		0.40%		1.16%
Mercury QA Large Cap Growth Fund of Mercury QA Equity Series, Inc.		0.40%		1.16%
Mercury QA Mid Cap Fund of Mercury QA Equity Series, Inc.		0.55%		1.60%
Mercury QA Small Cap Fund of Mercury QA Equity Series, Inc.		0.55%		1.65%
Mercury QA International Fund of Mercury QA Equity Series, Inc.		0.65%		1.75%
Master Aggregate Bond Index Series(a)(b)		0.06%		0.07%

(a)

The investment adviser of Quantitative Master Series Trust has entered into contractual arrangements to provide that the management fee for the series when combined with administrative fees of certain funds that invest in the series, will not exceed specific amounts. As a result of these contractual arrangements, the investment adviser of the Master Aggregate Bond Index Series currently receives a fee of 0.01%.

(b)	The fee rate paid to the investment adviser and its affiliates by the Master Aggregate Bond Index Series during the fiscal year ended December 31, 1999 (including voluntary waivers) was 0.01%.

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