MERRILL LYNCH
PREMIER GROWTH
FUND, INC.
[GRAPHIC OMITTED]
STRATEGIC
Performance
Semi-Annual Report
May 31, 2000
<PAGE>
Merrill Lynch Premier Growth Fund, Inc., May 31, 2000
MERRILL LYNCH PREMIER GROWTH FUND, INC.
Officers and Directors
Terry K. Glenn, President and Director
James H. Bodurtha, Director
Herbert I. London, Director
Joseph L. May, Director
Andre F. Perold, Director
Roberta Cooper Ramo, Director
Arthur Zeikel, Director
Robert C. Doll, Jr., Senior Vice President
James D. McCall, Senior Vice President and
Portfolio Manager
Donald C. Burke, Vice President and Treasurer
Susan B. Baker, Secretary
Custodian
The Bank of New York
90 Washington Street, 12th Floor
New York, NY 10286
Transfer Agent
Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 637-3863
<PAGE>
DEAR SHAREHOLDER
We are pleased to provide you with our first semi-annual report for the Merrill
Lynch Premier Growth Fund, Inc. The Fund seeks to provide shareholders with
long-term capital appreciation by investing in a portfolio primarily of common
stocks of companies that Fund management believes have strong earnings growth
and capital appreciation potential. In this and future shareholder reports, we
will highlight investment performance and describe recent investment activities.
Investment Environment
Since the beginning of the year, market volatility has increased dramatically
and has become an additional cost in achieving investment returns. During
volatile periods, investors can easily lose sight of basic trends. Opinions
quickly shift from too much optimism to too much bearishness. A whipsaw effect
develops that tends to leave most investors taking too many losses over too
short a period of time. Based on the conditions that have caused this increase
in volatility, we believe the likelihood of it continuing through the year is
quite high.
Portfolio Matters
Since inception (March 3, 2000) through May 31, 2000, the Fund's Class A, Class
B, Class C and Class D Shares had total returns of -30.10%, -30.30%, -30.30% and
-30.10%, respectively. These results are comparable to that of the National
Association of Securities Dealers Automated Quotations (NASDAQ) Composite Index,
which returned -30.78% over the same time period. (Fund results 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.)
Shortly after launching the Fund, the aggressive growth area of the equity
market began to lose favor with investors. The resulting dramatic contraction in
valuations, driven almost entirely by negative investor psychology (as opposed
to any deterioration in individual company business fundamentals) persisted
until nearly the end of May. This negative shift in investor psychology resulted
from confusion and concern over the growing strength of the economy and the
degree to which the Federal Reserve Board would have to raise interest rates in
order to keep inflation and the economy in check. During times of uncertainty
and lack of confidence, investors move away from what are often viewed as
higher-risk (highly valued) securities and toward those that are considered more
defensive in nature (slower growth, lower price/earnings ratio stocks and
fixed-income securities).
There were some bright spots for the Fund during the period. The Fund benefited
from strong performances by SDL Inc., Bookham Technology PLC and Kopin
Corporation. Our weakest performers were Packateer, Inc., US Internetworking,
Inc. and Redback Networks, Inc. We sold our holdings in Packateer, Inc. US
Internetworking and Redback Networks during the period. We also sold Sycamore
Networks, Inc., Finisar Corp., Covad Communications Co., Gene Logic, Inc., Tut
Systems, Inc., Costco Wholesale Corp. and Novellus Systems, Inc.
Investment Approach
Despite the frustration caused by our holdings' share price declines in the face
of steadily and consistently improving business fundamentals, we are not swayed
from our belief that our investment approach in high-quality, high-growth
companies makes excellent sense for the long-term investor. The risk of
short-term volatility will always be present, and we take advantage of this
characteristic to continually upgrade the Fund's holdings.
Our confidence in our investment process and our ability to identify outstanding
companies to invest in was bolstered by the financial performance delivered by
our Fund's holdings in the performance period. During the period ended May 31,
2000, the Fund's holdings generated average earnings growth of 99.8% and bested
Wall Street's earnings estimates by nearly 31% on average. This compares
favorably to the average company in the unmanaged Standard & Poor's 500 Index,
which generated earnings growth of 24.1%, and beat earnings estimates by an
average of just over 6%. None of our Fund companies missed their estimates for
earnings in the period.
We were heartened at May 31, 2000, and in the first few days of June 2000, when
equity investors seemed to embrace the notion that the Federal Reserve Board's
job of raising interest rates to slow the economy was having the desired effect
of possibly eliminating the need for any further monetary policy tightening
actions. Many of our stocks stabilized on this change in perception, and some
have rebounded substantially, aided by some positive fundamental developments at
the individual company level. We are optimistic that future economic reports
will add support to the thesis that the economy will achieve the desired soft
landing. The subsequent removal of upward pressure on interest rates, a renewal
in investor confidence, and the tendency for investors during periods of
economic slowing to seek out companies perceived to have high and sustainable
unit growth rates could represent the catalysts needed for our types of
companies to return to investor favor.
In Conclusion
We appreciate your early investment in Merrill Lynch Premier Growth Fund, Inc.,
and we are particularly grateful for your continued support and commitment
during the recent challenging period. We continue to have high confidence in our
investment process as a long-term strategy, and we look forward to serving your
investment needs in the months and years ahead.
Sincerely,
/s/ Terry K. Glenn
Terry K. Glenn
President and Director
/s/ James D. McCall
James D. McCall
Senior Vice President and
Portfolio Manager
June 29, 2000
2 & 3
<PAGE>
Merrill Lynch Premier Growth Fund, Inc., May 31, 2000
PERFORMANCE DATA
About Fund Performance
Investors are able to purchase shares of the Fund through the Merrill
Lynch Select Pricing(SM) System, which offers four pricing alternatives:
o Class A Shares incur a maximum initial sales charge (front-end load) of
5.25% and bear no ongoing distribution or account maintenance fees. Class
A Shares are available only to eligible investors.
o Class B Shares are subject to a maximum contingent deferred sales charge
of 4% if redeemed during the first year, decreasing 1% each year
thereafter to 0% after the fourth year. In addition, Class B Shares are
subject to a distribution fee of 0.75% and an account maintenance fee of
0.25%. These shares automatically convert to Class D Shares after
approximately 8 years. (There is no initial sales charge for automatic
share conversions.)
o Class C Shares are subject to a distribution fee of 0.75% and an account
maintenance fee of 0.25%. In addition, Class C Shares are subject to a 1%
contingent deferred sales charge if redeemed within one year of purchase.
o Class D Shares incur a maximum initial sales charge of 5.25% and an
account maintenance fee of 0.25% (but no distribution fee).
None of the past results shown should be considered a representation of
future performance. Figures shown in the "Recent Performance Results" and
"Aggregate Total Return" tables assume reinvestment of all dividends and
capital gains distributions at net asset value on the ex-dividend date.
Investment return and principal value of shares will fluctuate so that
shares, when redeemed, may be worth more or less than their original cost.
Dividends paid to each class of shares will vary because of the different
levels of account maintenance, distribution and transfer agency fees
applicable to each class, which are deducted from the income available to
be paid to shareholders.
Recent Performance Results
Since Inception
As of May 31, 2000 Total Return
================================================================================
ML Premier Growth Fund, Inc. Class A Shares* -30.10%
--------------------------------------------------------------------------------
ML Premier Growth Fund, Inc. Class B Shares* -30.30
--------------------------------------------------------------------------------
ML Premier Growth Fund, Inc. Class C Shares* -30.30
--------------------------------------------------------------------------------
ML Premier Growth Fund, Inc. Class D Shares* -30.10
--------------------------------------------------------------------------------
S&P Barra Growth Index** - 3.93
--------------------------------------------------------------------------------
NASDAQ Industrial Index*** -30.78
================================================================================
* Investment results shown do not reflect sales charges; results would be
lower if a sales charge was included. Total investment returns are based
on changes in net asset values for the periods shown, and assume
reinvestment of all dividends and capital gains distributions at net asset
value on the ex-dividend date. The Fund's inception date is 3/3/00.
** An unmanaged broad-based Index comprised of companies with higher
price-to-book ratios. Since inception total returns are from 3/3/00.
*** An unmanaged broad-based index comprised of common stocks. Since inception
total returns are from 3/3/00.
Aggregate Total Return
% Return Without % Return With
Sales Charge Sales Charge**
================================================================================
Class A Shares*
================================================================================
Inception (3/3/00)
through 3/31/00 -10.60% -15.29%
--------------------------------------------------------------------------------
* Maximum sales charge is 5.25%.
** Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
================================================================================
Class B Shares*
================================================================================
Inception (3/3/00)
through 3/31/00 -10.60% -14.18%
--------------------------------------------------------------------------------
* Maximum contingent deferred sales charge is 4% and is reduced to 0% after
4 years.
** Assuming payment of applicable contingent deferred sales charge.
================================================================================
% Return % Return
Without CDSC With CDSC**
================================================================================
Class C Shares*
================================================================================
Inception (3/3/00)
through 3/31/00 -10.60% -14.18%
--------------------------------------------------------------------------------
* Maximum contingent deferred sales charge is 1% and is reduced to 0% after
1 year.
** Assuming payment of applicable contingent deferred sales charge.
================================================================================
% Return Without % Return With
Sales Charge Sales Charge**
================================================================================
Class D Shares*
================================================================================
Inception (3/3/00)
through 3/31/00 -10.60% -15.29%
--------------------------------------------------------------------------------
* Maximum sales charge is 5.25%.
** Assuming maximum sales charge.
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
MERRILL LYNCH
PREMIER GROWTH
FUND, INC. As of May 31, 2000
===================================================================================================================
<S> <C> <C>
Assets: Investment in Master Premier Growth Trust, at value (identified
cost--$207,638,068) .............................................................. $ 163,029,464
Prepaid registration fees and other assets ........................................ 214,689
-------------
Total assets ...................................................................... 163,244,153
-------------
===================================================================================================================
Liabilities: Payable to distributor ............................................................ 131,525
Accrued expenses and other liabilities ............................................ 81,562
-------------
Total liabilities ................................................................. 213,087
-------------
===================================================================================================================
Net Assets: Net assets ........................................................................ $ 163,031,066
=============
===================================================================================================================
Net Assets Class A Shares of Common Stock, $.10 par value, 100,000,000 shares authorized ..... $ 62,369
Consist of: Class B Shares of Common Stock, $.10 par value, 100,000,000 shares authorized ..... 1,407,520
Class C Shares of Common Stock, $.10 par value, 100,000,000 shares authorized ..... 617,553
Class D Shares of Common Stock, $.10 par value, 100,000,000 shares authorized ..... 250,132
Paid-in capital in excess of par .................................................. 221,292,280
Accumulated investment loss--net .................................................. (433,081)
Accumulated realized capital losses on investments from the Trust--net ............ (15,557,103)
Unrealized depreciation on investments from the Trust--net ........................ (44,608,604)
-------------
Net assets ........................................................................ $ 163,031,066
=============
===================================================================================================================
Net Asset Class A--Based on net assets of $4,359,467 and 623,688 shares outstanding ......... $ 6.99
Value: =============
Class B--Based on net assets of $98,139,380 and 14,075,206 shares outstanding ..... $ 6.97
=============
Class C--Based on net assets of $43,058,544 and 6,175,530 shares outstanding ...... $ 6.97
=============
Class D--Based on net assets of $17,473,675 and 2,501,316 shares outstanding ...... $ 6.99
=============
===================================================================================================================
</TABLE>
See Notes to Financial Statements.
4 & 5
<PAGE>
Merrill Lynch Premier Growth Fund, Inc., May 31, 2000
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
MERRILL LYNCH
PREMIER GROWTH
FUND, INC. For the Period March 3, 2000+ to May 31, 2000
===========================================================================================================
<S> <C> <C> <C>
Investment Investment income allocated from the Trust (net of $215 foreign
Income: withholding tax) ............................................. $ 445,728
Expenses allocated from the Trust ............................. (357,256)
------------
Net investment income from the Trust .......................... 88,472
------------
===========================================================================================================
Expenses: Account maintenance and distribution fees--Class B ............ $245,045
Account maintenance and distribution fees--Class C ............ 108,889
Offering costs ................................................ 44,894
Registration fees ............................................. 40,861
Transfer agent fees--Class B .................................. 34,309
Transfer agent fees--Class C .................................. 15,565
Account maintenance fee--Class D .............................. 11,109
Printing and shareholder reports .............................. 9,553
Transfer agent fees--Class D .................................. 5,509
Professional fees ............................................. 3,372
Transfer agent fees--Class A .................................. 1,301
Accounting services ........................................... 584
Other ......................................................... 562
--------
Total expenses ................................................ 521,553
------------
Investment loss--net .......................................... (433,081)
------------
===========================================================================================================
Realized & Realized loss on investments from the Trust--net .............. (15,557,103)
Unrealized Loss Unrealized depreciation on investments from the Trust--net .... (44,608,604)
From the ------------
Trust--Net: Net Decrease in Net Assets Resulting from Operations .......... $(60,598,788)
============
===========================================================================================================
</TABLE>
+ Commencement of operations.
See Notes to Financial Statements.
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
MERRILL LYNCH For the Period
PREMIER GROWTH March 3, 2000+ to
FUND, INC. Increase (Decrease) in Net Assets: May 31, 2000
==================================================================================================
<S> <C> <C>
Operations: Investment loss--net ............................................. $ (433,081)
Realized loss on investments from the Trust--net ................. (15,557,103)
Unrealized depreciation on investments from the Trust--net ....... (44,608,604)
-------------
Net decrease in net assets resulting from operations ............. (60,598,788)
-------------
==================================================================================================
Capital Share Net increase in net assets derived from capital share
Transactions: transactions .................................................... 223,529,854
-------------
==================================================================================================
Net Assets: Total increase in net assets ..................................... 162,931,066
Beginning of period .............................................. 100,000
-------------
End of period .................................................... $ 163,031,066
=============
==================================================================================================
</TABLE>
+ Commencement of operations.
See Notes to Financial Statements.
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
The following per share data and ratios have been derived
MERRILL LYNCH from information provided in the financial statements. For the Period March 3, 2000+ to May 31, 2000
PREMIER GROWTH ---------------------------------------------------
FUND, INC. Increase (Decrease) in Net Asset Value: Class A Class B Class C Class D
===================================================================================================================================
<S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period .....................$ 10.00 $ 10.00 $ 10.00 $ 10.00
Operating ------- ------- ------- -------
Performance: Investment income (loss)--net ............................ --++++ (.02) (.02) (.01)
Realized and unrealized loss on investments
from the Trust--net ..................................... (3.01) (3.01) (3.01) (3.00)
------- ------- ------- -------
Total from investment operations ......................... (3.01) (3.03) (3.03) (3.01)
------- ------- ------- -------
Net asset value, end of period ...........................$ 6.99 $ 6.97 $ 6.97 $ 6.99
======= ======= ======= =======
===================================================================================================================================
Total Investment Based on net asset value per share ....................... (30.10%)+++ (30.30%)+++ (30.30%)+++ (30.10%)+++
Return:** ======= ======= ======= =======
===================================================================================================================================
Ratios to Average Expenses++ ............................................... 1.24%* 2.26%* 2.26%* 1.49%*
Net Assets: ======= ======= ======= =======
Investment loss--net ..................................... (.14%)* (1.17%)* (1.17%)* (.41%)*
======= ======= ======= =======
===================================================================================================================================
Supplemental Net assets, end of period (in thousands) .................$ 4,359 $98,139 $43,059 $17,474
Data: ======= ======= ======= =======
===================================================================================================================================
</TABLE>
* Annualized.
** Total investment returns exclude the effects of sales charges.
+ Commencement of operations.
++ Includes the Fund's share of the Trust's allocated expenses.
+++ Aggregate total investment return.
++++ Amount is less than $.01 per share.
See Notes to Financial Statements.
6 & 7
<PAGE>
Merrill Lynch Premier Growth Fund, Inc., May 31, 2000
NOTES TO FINANCIAL STATEMENTS
MERRILL LYNCH
PREMIER GROWTH
FUND, INC.
1. Significant Accounting Policies:
Merrill Lynch Premier Growth Fund, Inc. (the "Fund") is registered under the
Investment Company Act of 1940 as a diversified, open-end management investment
company. The Fund seeks to achieve its investment objective by investing all of
its assets in the Master Premier Growth Trust (the "Trust"), which has the same
investment objective as the Fund. The value of the Fund's investment in the
Trust reflects the Fund's proportionate interest in the net assets of the Trust.
The performance of the Fund is directly affected by the performance of the
Trust. The financial statements of the Trust, including the Schedule of
Investments, are included elsewhere in this report and should be read in
conjunction with the Fund's financial statements. The Fund's financial
statements are prepared in accordance with accounting principles generally
accepted in the United States of America, which may require the use of
management accruals and estimates. These unaudited financial statements reflect
all adjustments, which are, in the opinion of management, necessary to a fair
statement of the results for the interim period presented. All such adjustments
are of a normal recurring nature. Prior to commencement of operations on March
3, 2000, the Fund had no operations other than those relating to organizational
matters and the issuance of 10,000 capital shares of the Fund on October 25,
1999 to Fund Asset Management, L.P. ("FAM") for $100,000. The Fund offers four
classes of shares under the Merrill Lynch Select Pricing(SM) System. Shares of
Class A and Class D are sold with a front-end sales charge. Shares of Class B
and Class C may be subject to a contingent deferred sales charge. All classes of
shares have identical voting, dividend, liquidation and other rights and the
same terms and conditions, except that Class B, Class C and Class D Shares bear
certain expenses related to the account maintenance of such shares, and Class B
and Class C Shares also bear certain expenses related to the distribution of
such shares. Each class has exclusive voting rights with respect to matters
relating to its account maintenance and distribution expenditures. The following
is a summary of significant accounting policies followed by the Fund.
(a) Valuation of investments--Valuation of securities is discussed in Note 1a of
the Trust's Notes to Financial Statements, which are included elsewhere in this
report.
(b) Income--The Fund's net investment income consists of the Fund's pro rata
share of the net investment income of the Trust, less all actual and accrued
expenses of the Fund determined in accordance with accounting principles
generally accepted in the United States of America.
(c) Income taxes--It is the Fund's policy to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all of its taxable income to shareholders. Therefore,
no Federal income tax provision is required. Under the applicable foreign tax
law, a withholding tax may be imposed on interest, dividends and capital gains
at various rates.
(d) Prepaid registration fees--Prepaid registration fees are charged to expense
as the related shares are issued.
(e) Dividends and distributions--Dividends and distributions paid by the Fund
are recorded on the ex-dividend dates.
(f) Investment transactions--Investment transactions are accounted for on a
trade date basis.
2. Transactions with Affiliates:
The Trust has entered into a Distribution Agreement and Distribution Plans with
Merrill Lynch Funds Distributor ("MLFD" or the "Distributor"), a division of
Princeton Funds Distributor, Inc. ("PFD"), which is a wholly-owned subsidiary of
Merrill Lynch Group, Inc. Pursuant to the Distribution Plans adopted by the Fund
in accordance with Rule 12b-1 under the Investment Company Act of 1940, the Fund
pays the Distributor ongoing account maintenance and distribution fees. The fees
are accrued daily and paid monthly at annual rates based upon the average daily
net assets of the shares as follows:
--------------------------------------------------------------------------------
Account Distribution
Maintenance Fee Fee
--------------------------------------------------------------------------------
Class B ............................. .25% .75%
Class C ............................. .25% .75%
Class D ............................. .25% --
--------------------------------------------------------------------------------
Pursuant to a sub-agreement with the Distributor, Merrill Lynch, Pierce, Fenner
& Smith Incorporated ("MLPF&S"), a subsidiary of ML & Co., also provides account
maintenance and distribution services to the Fund. The ongoing account
maintenance fee compensates the Distributor and MLPF&S for providing account
maintenance services to Class B, Class C and Class D shareholders. The ongoing
distribution fee compensates the Distributor and MLPF&S for providing
shareholder and distribution-related services to Class B and Class C
shareholders.
For the period March 3, 2000 to May 31, 2000, MLFD earned underwriting discounts
and direct commissions and MLPF&S earned dealer concessions on sales of the
Fund's Class A and Class D Shares as follows:
--------------------------------------------------------------------------------
MLFD MLPF&S
--------------------------------------------------------------------------------
Class A ............................. -- $ 1,385
Class D ............................. $5,193 $144,930
--------------------------------------------------------------------------------
For the period March 3, 2000 to May 31, 2000, MLPF&S received contingent
deferred sales charges of $19,169 and $4,251 relating to transactions in Class B
and Class C Shares, respectively.
Financial Data Services, Inc. ("FDS"), an indirect wholly-owned subsidiary of ML
& Co., is the Fund's transfer agent.
Accounting services are provided to the Fund by FAM at cost.
Certain officers and/or directors of the Fund are officers and/or directors of
FAM, PSI, PFD, FDS, and/or ML & Co.
3. Investments:
Increases and decreases in the Fund's investment in the Trust for the period
March 3, 2000 to May 31, 2000 were $223,629,854 and $523,155, respectively.
4. Capital Share Transactions:
Net increase in net assets derived from capital share transactions was
$223,529,854 for the period March 3, 2000 to May 31, 2000.
Transactions in capital shares for each class were as follows:
--------------------------------------------------------------------------------
Class A Shares for the Period Dollar
March 3, 2000+ to May 31, 2000 Shares Amount
--------------------------------------------------------------------------------
Shares sold ............................ 665,385 $ 6,158,639
Shares redeemed ........................ (44,197) (325,244)
------- -----------
Net increase ........................... 621,188 $ 5,833,395
======= ===========
--------------------------------------------------------------------------------
+ Prior to March 3, 2000 (commencement of operations), the Fund issued 2,500
shares to FAM for $25,000.
--------------------------------------------------------------------------------
Class B Shares for the Period Dollar
March 3, 2000+ to May 31, 2000 Shares Amount
--------------------------------------------------------------------------------
Shares sold ............................ 14,520,846 $138,196,842
Automatic conversion of shares ......... (43,577) (361,136)
Shares redeemed ........................ (404,563) (3,396,815)
---------- ------------
Net increase ........................... 14,072,706 $134,438,891
========== ============
--------------------------------------------------------------------------------
+ Prior to March 3, 2000 (commencement of operations), the Fund issued 2,500
shares to FAM for $25,000.
--------------------------------------------------------------------------------
Class C Shares for the Period Dollar
March 3, 2000+ to May 31, 2000 Shares Amount
--------------------------------------------------------------------------------
Shares sold ............................ 6,391,539 $ 61,020,619
Shares redeemed ........................ (218,509) (1,877,623)
--------- ------------
Net increase ........................... 6,173,030 $ 59,142,996
========= ============
--------------------------------------------------------------------------------
+ Prior to March 3, 2000 (commencement of operations), the Fund issued 2,500
shares to FAM for $25,000.
--------------------------------------------------------------------------------
Class D Shares for the Period Dollar
March 3, 2000+ to May 31, 2000 Shares Amount
--------------------------------------------------------------------------------
Shares sold ............................ 2,600,335 $ 24,955,676
Automatic conversion of shares ......... 43,532 361,136
--------- ------------
Total issued ........................... 2,643,867 25,316,812
Shares redeemed ........................ (145,051) (1,202,240)
--------- ------------
Net increase ........................... 2,498,816 $ 24,114,572
========= ============
--------------------------------------------------------------------------------
+ Prior to March 3, 2000 (commencement of operations), the Fund issued 2,500
shares to FAM for $25,000.
8 & 9
<PAGE>
Merrill Lynch Premier Growth Fund, Inc., May 31, 2000
SCHEDULE OF INVESTMENTS (in US dollars)
<TABLE>
<CAPTION>
Master Premier Growth Trust
----------------------------------------------------------------------------------------------------------
Shares Percent of
COUNTRY Industries Held Common Stocks Value Net Assets
==========================================================================================================================
<S> <C> <C> <C> <C> <C>
Canada Biotechnology 72,000 +QLT PhotoTherapeutics Inc. $ 3,523,500 2.2%
----------------------------------------------------------------------------------------------------------
Communications Equipment 64,354 Nortel Networks Corporation 3,495,227 2.1
----------------------------------------------------------------------------------------------------------
Total Common Stocks in Canada 7,018,727 4.3
==========================================================================================================================
Japan Cellular Telephones 16,098 NTT DoCoMo, Inc. (ADR) (a) 2,108,838 1.3
==========================================================================================================================
Total Common Stocks in Japan 2,108,838 1.3
==========================================================================================================================
Singapore Electronic Components 50,600 +Flextronics International Ltd. 2,751,375 1.7
==========================================================================================================================
Total Common Stocks in Singapore 2,751,375 1.7
==========================================================================================================================
United Kingdom Electronic Components 21,000 +Bookham Technology PLC (ADR) (a) 1,022,438 0.6
==========================================================================================================================
Total Common Stocks in the United Kingdom 1,022,438 0.6
==========================================================================================================================
United States Application Development 35,000 +Citrix Systems, Inc. 1,841,875 1.1
Software
----------------------------------------------------------------------------------------------------------
Automotive 108,612 Harley-Davidson, Inc. 4,045,797 2.5
----------------------------------------------------------------------------------------------------------
Biotechnology 60,300 +Myriad Genetics, Inc. 4,699,631 2.9
45,000 PE Corp-PE Biosystems Group 2,497,500 1.5
38,000 +Waters Corporation 3,591,000 2.2
----------- ----
10,788,131 6.6
----------------------------------------------------------------------------------------------------------
Broadcasting/Media 56,486 +Clear Channel Communications, Inc. 4,229,389 2.6
60,700 +Radio One, Inc. (Class A) 4,340,050 2.7
31,267 +Univision Communications Inc. (Class A) 3,220,501 2.0
----------- ----
11,789,940 7.3
----------------------------------------------------------------------------------------------------------
Communications Equipment 27,000 +AudioCodes Ltd. 1,971,000 1.2
33,000 +Brocade Communications Systems, Inc. 3,891,937 2.4
27,000 +CIENA Corporation 3,231,562 2.0
60,000 +Cisco Systems, Inc. 3,416,250 2.1
57,000 +Extreme Networks, Inc. 2,771,625 1.7
24,000 +Juniper Networks, Inc. 4,204,500 2.6
55,000 +Network Appliance, Inc. 3,547,500 2.2
3,200 +ONI Systems Corp 80,000 0.0
----------- ----
23,114,374 14.2
----------------------------------------------------------------------------------------------------------
Computer 66,700 +BEA Systems, Inc 2,405,369 1.4
Services/Software 15,000 +i2 Technologies, Inc. 1,595,625 1.0
40,000 +Informatica Corporation 1,607,500 1.0
40,000 +TIBCO Software Inc. 2,222,500 1.3
29,300 +VERITAS Software Corporation 3,411,619 2.1
----------- ----
11,242,613 6.8
----------------------------------------------------------------------------------------------------------
Diversified Companies 25,000 Corning Incorporated 4,835,937 3.0
----------------------------------------------------------------------------------------------------------
Electronic Components 15,000 AVX Corporation 859,687 0.5
7,000 +E-Tek Dynamics, Inc. 1,288,000 0.8
39,600 +Kopin Corporation 2,796,750 1.7
21,000 +QLogic Corporation 1,030,313 0.6
9,000 +SDL Inc. 2,040,750 1.2
----------- ----
8,015,500 4.8
----------------------------------------------------------------------------------------------------------
Electronic/Semiconductors 47,000 +Analog Devices, Inc. 3,619,000 2.2
22,000 +Applied Micro Circuits Corporation 2,183,500 1.4
31,000 +GlobeSpan, Inc. 2,735,750 1.7
55,000 +LSI Logic Corporation 2,897,813 1.8
21,500 +PMC--Sierra, Inc. 3,294,875 2.0
42,000 +Virata Corporation 1,732,500 1.1
----------- ----
16,463,438 10.2
----------------------------------------------------------------------------------------------------------
Electronics 33,000 +Agilent Technologies, Inc. 2,429,625 1.5
----------------------------------------------------------------------------------------------------------
Internet 33,000 +Exodus Communications, Inc. 2,326,500 1.4
48,000 +InfoSpace.com, Inc. 2,082,000 1.3
30,000 +Inktomi Corporation 3,356,250 2.1
----------- ----
7,764,750 4.8
----------------------------------------------------------------------------------------------------------
Internet Software 44,000 +Alteon Websystems, Inc. 2,230,250 1.4
30,000 +Scient Corporation 1,290,000 0.8
19,000 +VeriSign, Inc. 2,570,938 1.6
50,000 +Vignette Corporation 1,371,875 0.8
----------- ----
7,463,063 4.6
----------------------------------------------------------------------------------------------------------
Natural Gas 20,000 Enron Corp. 1,457,500 0.9
----------------------------------------------------------------------------------------------------------
Pharmaceuticals 36,000 Pfizer Inc. 1,604,250 1.0
----------------------------------------------------------------------------------------------------------
Retail--Specialty 75,000 The Home Depot, Inc. 3,660,938 2.2
50,000 Tiffany & Co. 3,046,875 1.9
----------- ----
6,707,813 4.1
----------------------------------------------------------------------------------------------------------
Semiconductor 12,000 +Applied Materials, Inc. 1,002,000 0.6
Production Equipment 40,000 +KLA-Tencor Corporation 1,980,000 1.2
----------- ----
2,982,000 1.8
----------------------------------------------------------------------------------------------------------
Telecommunications 53,000 +Amdocs Limited 3,282,687 2.0
----------------------------------------------------------------------------------------------------------
Wireless Communication-- 29,000 +Nextel Communications, Inc. (Class A) 2,684,312 1.6
Domestic Paging &
Cellular
==========================================================================================================================
Total Common Stocks in the United States 128,513,605 78.8
==========================================================================================================================
Total Investments in Common Stocks
(Cost--$186,044,866) 141,414,983 86.7
==========================================================================================================================
</TABLE>
10 & 11
<PAGE>
Merrill Lynch Premier Growth Fund, Inc., May 31, 2000
SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<TABLE>
<CAPTION>
Master Premier Growth Trust (concluded)
-------------------------------------------------------------------------------------------------------------------------------
Face Percent of
Amount Short-Term Securities Value Net Assets
===============================================================================================================================
<S> <C> <C> <C> <C>
Commercial Paper* US$ 2,000,000 CIT Group Holdings, Inc. (The), 6.80% due 6/01/2000 $ 2,000,000 1.2%
7,724,000 General Motors Acceptance Corp., 6.81% due 6/01/2000 7,724,000 4.7
2,791,000 SBC Communications Inc., 6.53% due 6/19/2000 2,781,887 1.7
2,208,000 Wal-Mart Stores, Inc., 6.52% due 6/06/2000 2,206,001 1.4
===============================================================================================================================
Total Investments in Commercial Paper 14,711,888 9.0
===============================================================================================================================
US Government 5,000,000 Federal Home Loan Mortgage Corporation, 6.335% due 6/27/2000 4,977,124 3.1
Agency Obligations*
===============================================================================================================================
Total Investments in US Government Agency Obligations 4,977,124 3.1
===============================================================================================================================
Total Investments in Short-Term Securities (Cost--$19,689,012) 19,689,012 12.1
===============================================================================================================================
Total Investments (Cost--$205,733,878) 161,103,995 98.8
Other Assets Less Liabilities 1,993,861 1.2
------------ -----
Net Assets $163,097,856 100.0%
============ =====
===============================================================================================================================
</TABLE>
* Commercial Paper and certain US Government Agency Obligations are traded
on a discount basis; the interest rates shown reflect the discount rates
paid at the time of purchase by the Trust.
+ Non-income producing security.
(a) American Depositary Receipts (ADR). See Notes to Financial Statements.
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
MASTER PREMIER
GROWTH TRUST As of May 31, 2000
=============================================================================================================================
<S> <C> <C> <C>
Assets: Investments, at value (identified cost -- $205,733,878) ..................... $ 161,103,995
Receivables:
Contributions ............................................................. $ 1,426,945
Securities sold ........................................................... 1,237,161
Dividends ................................................................. 7,974 2,672,080
------------- -------------
Total assets ................................................................ 163,776,075
-------------
=============================================================================================================================
Liabilities: Payables:
Withdrawals ............................................................... 494,893
Investment adviser ........................................................ 89,060
Securities purchased ...................................................... 80,000
Custodian bank ............................................................ 13,081 677,034
-------------
Accrued expenses ............................................................ 1,185
-------------
Total liabilities ........................................................... 678,219
-------------
=============================================================================================================================
Net Assets: Net assets .................................................................. $ 163,097,856
=============
=============================================================================================================================
Net Assets Partners' capital ........................................................... $ 207,727,739
Consist of: Unrealized depreciation on investments and foreign currency
transactions--net .......................................................... (44,629,883)
-------------
Net assets .................................................................. $ 163,097,856
=============
=============================================================================================================================
</TABLE>
See Notes to Financial Statements.
12 & 13
<PAGE>
Merrill Lynch Premier Growth Fund, Inc., May 31, 2000
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
MASTER PREMIER
GROWTH TRUST For the Period March 3, 2000+ to May 31, 2000
=======================================================================================================
<S> <C> <C> <C>
Investment Interest and discount earned ....................... $ 427,835
Income: Dividends (net of $215 foreign withholding tax) .... 18,013
------------
Total income ....................................... 445,848
------------
=======================================================================================================
Expenses: Investment advisory fees ........................... $ 306,906
Accounting services ................................ 21,020
Offering costs ..................................... 12,824
Custodian fees ..................................... 4,905
Trustees' fees and expenses ........................ 4,310
Professional fees .................................. 3,847
Pricing fees ....................................... 1,500
Other .............................................. 2,084
------------
Total expenses ..................................... 357,396
------------
Investment income--net ............................. 88,452
------------
=======================================================================================================
Realized & Realized loss from:
Unrealized Loss Investments--net ................................ (15,558,362)
On Investments & Foreign currency transactions--net .............. (6,218) (15,564,580)
Foreign Currency ------------
Transactions--Net: Unrealized depreciation on investments--net ........ (44,629,883)
------------
Net Decrease in Net Assets Resulting from
Operations ........................................ $(60,106,011)
============
=======================================================================================================
</TABLE>
+ Commencement of operations.
See Notes to Financial Statements.
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the Period
MASTER PREMIER March 3, 2000+
GROWTH TRUST Increase (Decrease) in Net Assets: to May 31, 2000
==============================================================================================
<S> <C> <C>
Operations: Investment income--net ...................................... $ 88,452
Realized loss on investments--net ........................... (15,564,580)
Unrealized depreciation on investments--net ................. (44,629,883)
-------------
Net decrease in net assets resulting from operations ........ (60,106,011)
-------------
==============================================================================================
Net Capital Increase in net assets derived from net capital
Contributions: contributions .............................................. 223,103,767
-------------
==============================================================================================
Net Assets: Total increase in net assets ................................ 162,997,756
Beginning of period ......................................... 100,100
-------------
End of period ............................................... $ 163,097,856
=============
==============================================================================================
</TABLE>
+ Commencement of operations.
See Notes to Financial Statements.
14 & 15
<PAGE>
Merrill Lynch Premier Growth Fund, Inc., May 31, 2000
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
For the Period
MASTER PREMIER The following ratios have been derived from March 3, 2000+
GROWTH TRUST information provided in the financial statements. to May 31, 2000
===================================================================================================
<S> <S> <C>
Ratios to Average Expenses ........................................................ .87%*
Net Assets: ===========
Investment income--net .......................................... .22%*
===========
===================================================================================================
Supplemental Net assets, end of period (in
Data: thousands) ..................................................... $ 163,098
===========
Portfolio turnover .............................................. 28.86%
===========
===================================================================================================
</TABLE>
* Annualized.
+ Commencement of operations.
See Notes to Financial Statements.
NOTES TO FINANCIAL STATEMENTS
MASTER PREMIER GROWTH TRUST
1. Significant Accounting Policies:
Master Premier Growth Trust (the "Trust") is registered under the Investment
Company Act of 1940 as a diversified, open-end management investment company and
is organized as a Delaware business trust. The Trust's financial statements are
prepared in accordance with accounting principles generally accepted in the
United States of America, which may require the use of management accruals and
estimates. These unaudited financial statements reflect all adjustments, which
are, in the opinion of management, necessary to a fair statement of the results
for the interim period presented. All such adjustments are of a normal recurring
nature. The following is a summary of significant accounting policies followed
by the Trust.
(a) Valuation of investments--Portfolio securities that are traded on stock
exchanges are valued at the last sale price as of the close of business on the
day the securities are being valued or, lacking any sales, at the closing bid
price. Securities traded in the over-the-counter market are valued at the last
available bid price prior to the time of valuation. Portfolio securities that
are traded both in the over-the-counter market and on a stock exchange are
valued according to the broadest and most representative market. Options written
or purchased are valued at the last sale price in the case of exchange-traded
options. In the case of options traded in the over-the-counter market, valuation
is the last asked price (options written) or the last bid price (options
purchased). Short-term securities are valued at amortized cost, which
approximates market value. Other investments, including futures contracts and
related options, are stated at market value. Securities and assets for which
market quotations are not readily available are valued at fair market value, as
determined in good faith by or under the direction of the Trust's Board of
Trustees.
(b) Derivative financial instruments--The Trust may engage in various portfolio
investment techniques to increase or decrease the level of risk to which the
Trust is exposed more quickly and efficiently than transactions in other types
of investments. Losses may arise due to changes in the value of the contract or
if the counterparty does not perform under the contract.
o Financial futures contracts--The Trust may purchase or sell financial futures
contracts and options on such futures contracts for the purpose of hedging the
market risk on existing securities or the intended purchase of securities. Upon
entering into a contract, the Trust deposits and maintains as collateral such
initial margin as required by the exchange on which the transaction is effected.
Pursuant to the contract, the Trust agrees to receive from or pay to the broker
an amount of cash equal to the daily fluctuation in value of the contract. Such
receipts or payments are known as variation margin and are recorded by the Trust
as unrealized gains or losses. When the contract is closed, the Trust records a
realized gain or loss equal to the difference between the value of the contract
at the time it was opened and the value at the time it was closed.
o Options--The Trust is authorized to purchase and write call and put options.
When the Trust writes an option, an amount equal to the premium received by the
Trust is reflected as an asset and an equivalent liability. The amount of the
liability is subsequently marked to market to reflect the current market value
of the option written. When a security is purchased or sold through an exercise
of an option, the related premium paid (or received) is added to (or deducted
from) the basis of the security acquired or deducted from (or added to) the
proceeds of the security sold. When an option expires (or the Trust enters into
a closing transaction), the Trust realizes a gain or loss on the option to the
extent of the premiums received or paid (or a gain or loss to the extent that
the cost of the closing transaction exceeds the premium paid or received).
Written and purchased options are non-income producing investments.
o Forward foreign exchange contracts--The Trust is authorized to enter into
forward foreign exchange contracts as a hedge against either specific
transactions or portfolio positions. Such contracts are not entered on the
Trust's records. However, the effect on operations is recorded from the date the
Trust enters into such contracts.
o Foreign currency options and futures--The Trust may also purchase or sell
listed or over-the-counter foreign currency options, foreign currency futures
and related options on foreign currency futures as a short or long hedge against
possible variations in foreign exchange rates. Such transactions may be effected
with respect to hedges on non-US dollar denominated securities owned by the
Trust, sold by the Trust but not yet delivered, or committed or anticipated to
be purchased by the Trust.
(c) Foreign currency transactions--Transactions denominated in foreign
currencies are recorded at the exchange rate prevailing when recognized. Assets
and liabilities denominated in foreign currencies are valued at the exchange
rate at the end of the period. Foreign currency transactions are the result of
settling (realized) or valuing (unrealized) assets or liabilities expressed in
foreign currencies into US dollars. Realized and unrealized gains or losses from
investments include the effects of foreign exchange rates on investments.
(d) Income taxes--The Trust is classified as a partnership for Federal income
tax purposes. As a partnership for Federal income tax purposes, the Trust will
not incur Federal income tax liability. Items of partnership income, gain, loss
and deduction will pass through to investors as partners in the Trust.
Therefore, no Federal income tax provision is required. Under the applicable
foreign tax law, a withholding tax may be imposed on interest, dividends and
capital gains at various rates.
16 & 17
<PAGE>
Merrill Lynch Premier Growth Fund, Inc., May 31, 2000
NOTES TO FINANCIAL STATEMENTS (concluded)
MASTER PREMIER GROWTH TRUST
(e) Security transactions and investment income--Security transactions are
accounted for on the date the securities are purchased or sold (the trade
dates). Dividend income is recorded on the ex-dividend dates. Dividends from
foreign securities where the ex-dividend date may have passed are subsequently
recorded when the Trust has determined the ex-dividend date. Interest income
(including amortization of discount) is recognized on the accrual basis.
Realized gains and losses on security transactions are determined on the
identified cost basis.
(f) Custodian bank--The Trust recorded an amount payable to the custodian bank
as a result of the stated overdrawn balance. This overdrawn balance was due to
an unpaid corporate event.
2. Investment Advisory Agreement and Transactions with Affiliates:
The Trust has entered into an Investment Advisory Agreement with Fund Asset
Management, L.P. ("FAM"). The general partner of FAM is Princeton Services, Inc.
("PSI"), an indirect wholly-owned subsidiary of Merrill Lynch & Co., Inc. ("ML &
Co."), which is the limited partner.
FAM is responsible for the management of the Trust's investments and provides
the necessary personnel, facilities, equipment and certain other services
necessary to the operations of the Trust. For such services, the Trust pays a
monthly fee at an annual rate of .75% of the average daily value of the Trust's
net assets.
Accounting services are provided to the Trust by FAM at cost.
Certain officers and/or trustees of the Trust are officers and/or directors of
FAM, PSI, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities, for the
period March 3, 2000 to May 31, 2000 were $233,902,526 and $32,299,420,
respectively.
Net realized losses for the period March 3, 2000 to May 31, 2000 and net
unrealized losses as of May 31, 2000 were as follows:
--------------------------------------------------------------------------------
Realized Unrealized
Losses Losses
--------------------------------------------------------------------------------
Long-term investments ............... $(15,558,240) $(44,629,883)
Short-term investments .............. (122) --
Foreign currency transactions ....... (6,218) --
------------ ------------
Total ............................... $(15,564,580) $(44,629,883)
============ ============
--------------------------------------------------------------------------------
As of May 31, 2000, net unrealized depreciation for Federal income tax purposes
aggregated $44,629,883, of which $1,557,967 related to appreciated securities
and $46,187,850 related to depreciated securities. At May 31, 2000, the
aggregate cost of investments for Federal income tax purposes was $205,733,878.
PORTFOLIO INFORMATION
As of May 31, 2000
Percent of
Ten Largest Holdings Net Assets
--------------------------------------------------------------------------------
Corning Incorporated .......................................... 3.0%
Myriad Genetics, Inc. ......................................... 2.9
Radio One, Inc. (Class A) ..................................... 2.7
Clear Channel Communications, Inc. ............................ 2.6
Juniper Networks, Inc. ........................................ 2.6
Harley-Davidson, Inc. ......................................... 2.5
Brocade Communications Systems, Inc. .......................... 2.4
The Home Depot, Inc. .......................................... 2.2
Analog Devices, Inc. .......................................... 2.2
Waters Corporation ............................................ 2.2
--------------------------------------------------------------------------------
Percent of
Ten Largest Industries Net Assets
--------------------------------------------------------------------------------
Communications Equipment ...................................... 16.3%
Electronic/Semiconductors ..................................... 10.2
Biotechnology ................................................. 8.8
Broadcasting/Media ............................................ 7.3
Electronic Components ......................................... 7.1
Computer Services/Software .................................... 6.8
Internet ...................................................... 4.8
Internet Software ............................................. 4.6
Retail--Specialty ............................................. 4.1
Diversified Companies ......................................... 3.0
--------------------------------------------------------------------------------
Percent of
Geographic Allocation Net Assets+
--------------------------------------------------------------------------------
United States ................................................. 78.8%
Canada ........................................................ 4.3
Singapore ..................................................... 1.7
Japan ......................................................... 1.3
United Kingdom ................................................ 0.6
--------------------------------------------------------------------------------
+ Total may not equal 100%.
18 & 19
<PAGE>
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.
Merrill Lynch
Global Utility Fund, Inc.
Box 9011
Princeton, NJ
08543-9011 PREMIER--5/00
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