MERRILL LYNCH
PREMIER GROWTH
FUND, INC.
[GRAPHIC OMITTED]
STRATEGIC
Performance
Annual Report
November 30, 2000
<PAGE>
MERRILL LYNCH PREMIER GROWTH FUND, INC.
Officers and Directors/Trustees
Terry K. Glenn, President and Director/Trustee
James H. Bodurtha, Director/Trustee
Herbert I. London, Director/Trustee
Joseph L. May, Director/Trustee
Andre F. Perold, Director/Trustee
Roberta Cooper Ramo, Director/Trustee
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
--------------------------------------------------------------------------------
Arthur Zeikel, Director/Trustee of Merrill Lynch Premier Growth Fund, Inc. has
recently retired. The Fund's Board of Directors wishes Mr. Zeikel well in his
retirement.
--------------------------------------------------------------------------------
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>
Merrill Lynch Premier Growth Fund, Inc., November 30, 2000
DEAR SHAREHOLDER
Investment Environment
Volatility remained the defining characteristic of the equity investment arena
during the six-month period ended November 30, 2000, with investor attitudes
shifting markedly and with uncommon frequency. Since the launch of the Fund on
March 3, 2000, we have already witnessed one and one-half up/down cycles in the
aggressive growth portion of the market. Unfortunately, two legs of these cycles
have been down and only one has been up. As the Fund's fiscal year came to a
close on November 30, 2000, we were still in the midst of the second down leg.
The driving forces behind the most recent negative swing in investor sentiment
are vastly different from those that contributed to the market downturn in the
spring of this year. Investors are having difficulty coming to terms with a
slowing economy. They worry about the magnitude of the slowdown and about the
eventual impact such a deceleration might have on corporate profit growth.
A couple of unique twists helped to further exacerbate the most recent bout of
negative sentiment. The first was the prolonged presidential election, which
served as a daily drain on investor confidence. The frustration and confusion
caused by the uncertain presidency disrupted the normal buyer/seller balance.
Buyers moved to the sidelines until the dust settled and they could invest with
confidence, leaving only sellers on the playing field. The second contributing
factor was a new Securities and Exchange Commission (SEC) regulation known as
"REG FD," which has had a notable negative impact on the valuations of
aggressive growth stocks since it took effect on October 23, 2000. While
investors knew REG FD was imminent, the immediate repercussions were,
nonetheless, striking. Essentially, the regulation states that company
managements may no longer provide new and meaningful information to any
individual or group without simultaneously making that information available to
any and every other interested party. Company managements faced the difficult
task of complying with REG FD or severely cutting back communications with
analysts and investors. Initially, they have chosen to follow the easier path of
cutting back communications. This has proved particularly detrimental in the
aggressive growth arena since Wall Street analysts who follow high-growth
companies are heavily dependent on management feedback in building their
forward-looking income statement models. Direct and continuous feedback is not
nearly as critical with slow-growth companies because the changes are fewer and
come at a much less rapid pace. Analysts, now feeling abandoned and without
support from company managements, have chosen to become extremely conservative
with their earnings estimates, price targets and ratings. Investors have
perceived this new conservative disposition as a more cautious outlook on the
part of analysts regarding future growth rates. Understandably, this further
fueled the already negative investor sentiment.
Taken together, all of these factors have served to create an environment of
widespread bearishness that seems to have reached unsustainable levels,
particularly given our analysis of selected companies and their continued strong
growth prospects over the foreseeable future.
Fiscal Year in Review
Since inception (March 3, 2000) through November 30, 2000, the Fund's Class A,
Class B, Class C and Class D Shares had total returns of -38.60%, -39.10%,
-39.10% and -38.70%, respectively. The Fund's results compared favorably
relative to the -47.07% return of the NASDAQ Composite Index for the same
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
- 6 of this report to shareholders.)
As we discussed in our May 31, 2000 report to shareholders, Merrill Lynch
Premier Growth Fund, Inc. was launched just prior to the record peak in the
NASDAQ Composite Index. The downdraft that immediately followed was fast and
furious. Fortunately, the market had bottomed by late May, after investors
concluded that the Federal Reserve Board's effort to raise interest rates to
slow a potentially overheating economy had achieved the desired effect, thereby
eliminating the immediate need for further tightening. The portfolio's stocks
proceeded to rebound dramatically over the five months that followed, as the
fundamental strength of our companies' businesses was demonstrated in their
quarterly financial reports. At that time, in a more favorable market
environment, the share prices were better able to reflect these strengths. By
late October, the Fund's investment returns since inception had crossed into
positive territory.
Unfortunately, this scenario was short-lived. The first trigger for another
downturn in the market was the suggestion that spending on telecommunications
capital equipment by service providers would slow dramatically in 2001. Up to
this point, investors had assumed that a seemingly insatiable demand for
bandwidth, the "highway" traveled by data and voice traffic, would continue to
drive strong sales and profit growth for equipment providers, thereby sustaining
the relatively high share price multiples these companies enjoyed. This new
"speed bump" was confirmed in most investors' minds by a series of disappointing
data points in the financial results of several major companies participating in
the telecommunications equipment market. Issues arose at Lucent Technologies,
Inc., Northern Telecom and even Cisco Systems, Inc. The resulting rush for the
exits left few stocks unscathed.
While we did make some portfolio adjustments in response to a possible spending
slowdown, we also went to substantial lengths to confirm our belief that the
Fund's telecommunications holdings were positioned in high-growth segments that
were unlikely to experience significant reductions in service provider spending.
As a result, we added to many of our positions. Our confidence came from the
fact that the companies we own offer products and/or services that enable
service providers to lower their costs of doing business, provide competitive
services at lower costs and/or offer new services, thereby generating new
sources of revenue. In this very competitive and perhaps more uncertain
environment, we believe it unlikely that providers would not continue to invest
in these types of products provided by such companies as CIENA Corporation,
Juniper Networks, Inc., Corning Incorporated and Extreme Networks, Inc.
In Conclusion
Entering the new fiscal year, we look for catalysts that might spark a
turnaround in investor sentiment. We are hopeful that the recent resolution of
the presidential election might serve such a purpose. Also constructive would be
some assurance that the Federal Reserve Board stands ready to implement a more
accommodative monetary policy if evidence continues to indicate that the economy
has "hit a wall." A promising sign came when the Federal Reserve Board cut
interest rates recently by 0.50%.
We appreciate your investment in Merrill Lynch Premier Growth Fund, Inc., and we
are particularly grateful for your continued support during a challenging first
fiscal year.
Sincerely,
/s/ Terry K. Glenn
Terry K. Glenn
President and Director
/s/ James D. McCall
James D. McCall
Senior Vice President and
Portfolio Manager
January 4, 2001
2 & 3
<PAGE>
Merrill Lynch Premier Growth Fund, Inc., November 30, 2000
PERFORMANCE DATA
About Fund Performance
Investors are able to purchase shares of the Fund through the Merrill
Lynch Select Pricing(SM) System, which offers four pricing alternatives:
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
6 Month Since Inception
As of November 30, 2000 Total Return Total Return
================================================================================
ML Premier Growth Fund, Inc. Class A Shares* -12.16% -38.60%
--------------------------------------------------------------------------------
ML Premier Growth Fund, Inc. Class B Shares* -12.63 -39.10
--------------------------------------------------------------------------------
ML Premier Growth Fund, Inc. Class C Shares* -12.63 -39.10
--------------------------------------------------------------------------------
ML Premier Growth Fund, Inc. Class D Shares* -12.30 -38.70
--------------------------------------------------------------------------------
Standard & Poor's Barra Growth Index** -14.19 -14.53
================================================================================
* 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 3/03/00.
** An unmanaged capitalization-weighted Index comprised of all the stocks in
the Standard & Poor's 500 Index that have higher price-to-book ratios.
Since inception total return is from 2/29/00.
Total Return Based on a $10,000 Investment--Class A Shares and Class B Shares
A line graph depicting the growth of an investment in the Fund's Class A Shares
and Class B Shares compared to growth of an investment in the S&P Barra Growth
Index. Beginning and ending values are:
3/03/00** 11/00
Merrill Lynch Premier Growth Fund+--
Class A Shares* $ 9,475 $5,818
Merrill Lynch Premier Growth Fund+--
Class B Shares* $10,000 $5,846
S&P Barra Growth Index ++ $10,000 $8,546
* Assuming maximum sales charge, transaction costs and other operating
expenses, including advisory fees.
** Commencement of operations.
+ The Fund invests all of its assets in Master Premier Growth Trust. The
Trust invests primarily in common stocks of the companies that Fund
management believes have strong earnings growth and capital appreciation
potential.
++ This unmanaged Index is a capitalization-weighted index of all the stocks
in the Standard & Poor's 500 Index that have higher book-to-price ratios.
The starting date for this index is from 2/29/00.
Past performance is not indicative of future results.
Aggregate Total Return
% Return Without % Return With
Sales Charge Sales Charge**
===============================================================================
Class A Shares*
===============================================================================
Inception (3/03/00)
through 9/30/00 -4.00% -9.04%
-------------------------------------------------------------------------------
* Maximum sales charge is 5.25%.
** Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
=============================================================================
Class B Shares*
=============================================================================
Inception (3/03/00)
through 9/30/00 -4.60% -8.42%
-----------------------------------------------------------------------------
* Maximum contingent deferred sales charge is 4% and is reduced to 0% after
4 years.
** Assuming payment of applicable contingent deferred sales charge.
4 & 5
<PAGE>
Merrill Lynch Premier Growth Fund, Inc., November 30, 2000
PERFORMANCE DATA (concluded)
Total Return Based on a $10,000 Investment--Class C Shares and Class D Shares
A line graph depicting the growth of an investment in the Fund's Class C Shares
and Class D Shares compared to growth of an investment in the S&P Barra Growth
Index. Beginning and ending values are:
3/03/00** 10/00
Merrill Lynch Premier Growth Fund+--
Class C Shares* $10,000 $6,029
Merrill Lynch Premier Growth Fund+--
Class D Shares* $ 9,475 $5,808
S&P Barra Growth Index ++ $10,000 $8,546
* Assuming maximum sales charge, transaction costs and other operating
expenses, including advisory fees.
** Commencement of operations.
+ The Fund invests all of its assets in Master Premier Growth Trust. The
Trust invests primarily in common stocks of the companies that Fund
management believes have strong earnings growth and capital appreciation
potential.
++ This unmanaged Index is a capitalization-weighted index of all the stocks
in the Standard & Poor's 500 Index that have higher book-to-price ratios.
The starting date for this index is from 2/29/00.
Past performance is not indicative of future results.
Aggregate Total Return
% Return % Return
Without CDSC With CDSC**
=============================================================================
Class C Shares*
=============================================================================
Inception (3/03/00)
through 9/30/00 -4.60% -8.42%
-----------------------------------------------------------------------------
* 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 (3/03/00)
through 9/30/00 -4.20% -9.23%
-------------------------------------------------------------------------------
* 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 November 30, 2000
======================================================================================================================
<S> <C> <C>
Assets: Investment in Master Premier Growth Trust, at value (identified cost--$230,797,898) .. $ 180,835,649
Prepaid registration fees ............................................................ 154,102
-------------
Total assets ......................................................................... 180,989,751
-------------
======================================================================================================================
Liabilities: Payable to distributor ............................................................... 158,972
Accrued expenses and other liabilities ............................................... 162,129
-------------
Total liabilities .................................................................... 321,101
-------------
======================================================================================================================
Net Assets: Net assets ........................................................................... $ 180,668,650
=============
======================================================================================================================
Net Assets Class A Shares of Common Stock, $.10 par value, 100,000,000 shares authorized ........ $ 72,162
Consist of: Class B Shares of Common Stock, $.10 par value, 100,000,000 shares authorized ........ 1,810,383
Class C Shares of Common Stock, $.10 par value, 100,000,000 shares authorized ........ 734,894
Class D Shares of Common Stock, $.10 par value, 100,000,000 shares authorized ........ 344,928
Paid-in capital in excess of par ..................................................... 271,502,816
Accumulated realized capital losses on investments and foreign currency
transactions from the Trust--net ..................................................... (43,827,078)
Unrealized depreciation on investments from the Trust--net ........................... (49,969,455)
-------------
Net assets ........................................................................... $ 180,668,650
=============
======================================================================================================================
Net Asset Class A--Based on net assets of $4,430,847 and 721,622 shares outstanding ............ $ 6.14
Value: =============
Class B--Based on net assets of $110,318,679 and 18,103,830 shares outstanding ....... $ 6.09
=============
Class C--Based on net assets of $44,779,487 and 7,348,944 shares outstanding ......... $ 6.09
=============
Class D--Based on net assets of $21,139,637 and 3,449,279 shares outstanding ......... $ 6.13
=============
======================================================================================================================
</TABLE>
See Notes to Financial Statements.
6 & 7
<PAGE>
Merrill Lynch Premier Growth Fund, Inc., November 30, 2000
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
MERRILL LYNCH
PREMIER GROWTH
FUND, INC. For the Period March 3, 2000+ to November 30, 2000
===================================================================================================================================
<S> <C> <C> <C>
Investment Investment income allocated from the Trust (net of $643 foreign withholding tax) .. $ 1,366,360
Income: Expenses allocated from the Trust ................................................. (1,330,388)
-------------
Net investment income from the Trust .............................................. 35,972
-------------
===================================================================================================================================
Expenses: Account maintenance and distribution fees--Class B ................................ $ 960,630
Account maintenance and distribution fees--Class C ................................ 399,896
Registration fees ................................................................. 188,619
Offering costs .................................................................... 139,413
Transfer agent fees--Class B ...................................................... 112,087
Transfer agent fees--Class C ...................................................... 48,842
Account maintenance fee--Class D .................................................. 42,417
Transfer agent fees--Class D ...................................................... 16,514
Printing and shareholder reports .................................................. 10,544
Transfer agent fees--Class A ...................................................... 3,699
Accounting services ............................................................... 1,908
Professional fees ................................................................. 1,016
Other ............................................................................. 813
------------
Total expenses .................................................................... 1,926,398
-------------
Investment loss--net .............................................................. (1,890,426)
-------------
===================================================================================================================================
Realized & Realized loss from the Trust on:
Unrealized Loss Investments--net ............................................................... (43,827,078)
From the Foreign currency transactions--net ............................................. (6,215) (43,833,293)
Trust--Net: ------------
Unrealized depreciation on investments from the Trust--net ........................ (49,969,455)
-------------
Net Decrease in Net Assets Resulting from Operations .............................. $ (95,693,174)
=============
===================================================================================================================================
</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: Nov. 30, 2000
=======================================================================================================================
<S> <C> <C>
Operations: Investment loss--net ................................................................ $ (1,890,426)
Realized loss on investments and foreign currency transactions from the Trust--net .. (43,833,293)
Unrealized depreciation on investments from the Trust--net .......................... (49,969,455)
-------------
Net decrease in net assets resulting from operations ................................ (95,693,174)
-------------
=======================================================================================================================
Capital Share Net increase in net assets derived from capital share transactions .................. 276,261,824
Transactions: -------------
=======================================================================================================================
Net Assets: Total increase in net assets ........................................................ 180,568,650
Beginning of period ................................................................. 100,000
-------------
End of period ....................................................................... $ 180,668,650
=============
=======================================================================================================================
</TABLE>
+ Commencement of operations.
See Notes to Financial Statements.
8 & 9
<PAGE>
Merrill Lynch Premier Growth Fund, Inc., November 30, 2000
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 November 30, 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 loss--net ............................... (.01) (.07) (.07) (.03)
Realized and unrealized loss on investments and
foreign currency transactions from the Trust--net .. (3.85) (3.84) (3.84) (3.84)
------- -------- ------- -------
Total from investment operations ................... (3.86) (3.91) (3.91) (3.87)
------- -------- ------- -------
Net asset value, end of period ..................... $ 6.14 $ 6.09 $ 6.09 $ 6.13
======= ======== ======= =======
===================================================================================================================================
Total Investment Based on net asset value per share ................. (38.60%)@ (39.10%)@ (39.10%)@ (38.70%)@
Return:** ======= ======== ======= =======
===================================================================================================================================
Ratios to Average Expenses++ ......................................... 1.17%* 2.18%* 2.19%* 1.41%*
Net Assets: ======= ======== ======= =======
Investment loss--net ............................... (.29%)* (1.31%)* (1.31%)* (.54%)*
======= ======== ======= =======
===================================================================================================================================
Supplemental Net assets, end of period (in thousands) ........... $ 4,431 $110,319 $44,779 $21,140
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.
See Notes to Financial Statements.
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 conformity with accounting principles generally
accepted in the United States of America, which may require the use of
management accruals and estimates. 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 December 20,
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.
(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.
(g) Reclassification--Accounting principles generally accepted in the United
States of America require that certain components of net assets be adjusted to
reflect permanent differences between financial and tax reporting. Accordingly,
the current year's permanent book/tax differences of $1,896,641 have been
reclassified between paid-in capital in excess of par and accumulated net
investment loss and $6,215 has been reclassified between accumulated net
investment loss and accumulated net realized capital losses. These
reclassifications have no effect on net assets or net asset values per share.
10 & 11
<PAGE>
Merrill Lynch Premier Growth Fund, Inc., November 30, 2000
NOTES TO FINANCIAL STATEMENTS (concluded)
MERRILL LYNCH PREMIER GROWTH FUND, INC.
2. Transactions with Affiliates:
The Trust has entered into a Distribution Agreement and Distribution Plans with
FAM Distributors, Inc. ("FAMD" or the "Distributor"), which is a wholly-owned
subsidiary of Merrill Lynch Group, Inc.
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 November 30, 2000, FAMD earned underwriting
discounts and direct commissions and MLPF&S earned dealer concessions on sales
of the Fund's Class A and Class D Shares as follows:
--------------------------------------------------------------------------------
FAMD MLPF&S
--------------------------------------------------------------------------------
Class A ............................. $ 1 $ 1,390
Class D ............................. $13,523 $287,209
--------------------------------------------------------------------------------
For the period March 3, 2000 to November 30, 2000, MLPF&S received contingent
deferred sales charges of $159,458 and $33,538 relating to transactions in Class
B and Class C Shares, respectively. Furthermore, MLPF&S received contingent
deferred sales charges of $884 relating to transitions subject to front-end
sales charge waivers in Class D Shares.
Financial Data Services, Inc. ("FDS"), an indirect wholly-owned subsidiary of ML
& Co., is the Fund's transfer agent.
Accounting services were provided to the Fund by FAM.
Certain officers and/or directors of the Fund are officers and/or directors of
FAM, FAMD, 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 November 30, 2000 were $276,735,120 and $2,132,695,
respectively.
4. Capital Share Transactions:
Net increase in net assets derived from capital share transactions was
$276,261,824 for the period March 3, 2000 to November 30, 2000.
Transactions in capital shares for each class were as follows:
-------------------------------------------------------------------------------
Class A Shares for the Period Dollar
March 3, 2000+ to November 30, 2000 Shares Amount
-------------------------------------------------------------------------------
Shares sold ......................... 971,098 $ 8,697,452
Shares redeemed ..................... (251,976) (2,111,221)
------- -----------
Net increase ........................ 719,122 $ 6,586,231
======= ===========
-------------------------------------------------------------------------------
+ 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 November 30, 2000 Shares Amount
-------------------------------------------------------------------------------
Shares sold ............................ 19,618,769 $ 181,963,608
Automatic conversion of shares ......... (100,925) (867,432)
Shares redeemed ........................ (1,416,514) (12,022,588)
---------- -------------
Net increase ........................... 18,101,330 $ 169,073,588
========== =============
-------------------------------------------------------------------------------
+ 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 November 30, 2000 Shares Amount
-------------------------------------------------------------------------------
Shares sold ........................ 8,153,759 $ 75,554,485
Shares redeemed .................... (807,315) (6,799,208)
--------- ------------
Net increase ....................... 7,346,444 $ 68,755,277
========= ============
-------------------------------------------------------------------------------
+ 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 November 30, 2000 Shares Amount
-------------------------------------------------------------------------------
Shares sold .............................. 3,763,145 $ 34,511,905
Automatic conversion of shares ........... 100,671 867,432
--------- ------------
Total issued ............................. 3,863,816 35,379,337
Shares redeemed .......................... (417,037) (3,532,609)
--------- ------------
Net increase ............................. 3,446,779 $ 31,846,728
========= ============
-------------------------------------------------------------------------------
+ Prior to March 3, 2000 (commencement of operations), the Fund issued 2,500
shares to FAM for $25,000.
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders, Merrill Lynch Premier Growth Fund,
Inc.:
We have audited the accompanying statement of assets and liabilities of Merrill
Lynch Premier Growth Fund, Inc. as of November 30, 2000, the related statements
of operations and changes in net assets, and the financial highlights for the
period March 3, 2000 (commencement of operations) to November 30, 2000. These
financial statements and the financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Merrill Lynch
Premier Growth Fund, Inc. as of November 30, 2000, the results of its
operations, the changes in its net assets, and the financial highlights for the
period March 3, 2000 (commencement of operations) to November 30, 2000, in
conformity with accounting principles generally accepted in the United States of
America.
Deloitte & Touche LLP
Princeton, New Jersey
January 9, 2001
12 & 13
<PAGE>
Merrill Lynch Premier Growth Fund, Inc., November 30, 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 69,000 +QLT PhotoTherapeutics Inc. $ 3,027,375 1.7%
---------------------------------------------------------------------------------------------------------------------
Communications 54,900 Nortel Networks Corporation 2,072,475 1.1
Equipment
====================================================================================================================================
Total Common Stocks in Canada 5,099,850 2.8
====================================================================================================================================
Singapore Electronic Components 154,000 +Flextronics International Ltd. 3,850,000 2.1
====================================================================================================================================
Total Common Stocks in Singapore 3,850,000 2.1
====================================================================================================================================
United States Application Development 95,000 +BEA Systems, Inc 5,557,500 3.1
Software
---------------------------------------------------------------------------------------------------------------------
Automotive 108,612 Harley-Davidson, Inc. 4,935,058 2.7
---------------------------------------------------------------------------------------------------------------------
Biotechnology 50,000 +Celgene Corporation 2,850,000 1.6
30,000 +Enzon, Inc. 1,665,000 0.9
40,000 +Protein Design Labs, Inc. 3,087,500 1.7
------------ ----
7,602,500 4.2
---------------------------------------------------------------------------------------------------------------------
Broadcasting/Media 82,200 Entravision Communications Corporation (Class A) 1,176,488 0.7
---------------------------------------------------------------------------------------------------------------------
Communications 35,000 +Brocade Communications Systems, Inc. 5,877,812 3.3
Equipment 65,000 +CIENA Corporation 4,927,812 2.7
40,000 +Corvis Corporation 1,150,000 0.6
66,000 +Network Appliance, Inc. 3,258,750 1.8
50,000 +ONI Systems Corp. 2,175,000 1.2
------------ ----
17,389,374 9.6
---------------------------------------------------------------------------------------------------------------------
Computer 60,000 +Amdocs Limited 3,247,500 1.8
Services/Software 87,000 +Comverse Technology, Inc. 7,498,313 4.1
51,000 +Critical Path, Inc. 1,077,375 0.6
30,000 +i2 Technologies, Inc. 2,895,000 1.6
40,000 +Informatica Corporation 2,795,000 1.5
30,000 +Siebel Systems, Inc. 2,094,375 1.2
50,000 +VERITAS Software Corporation 4,875,000 2.7
------------ ----
24,482,563 13.5
---------------------------------------------------------------------------------------------------------------------
Electric & Gas 56,000 TNPC, Inc. 283,500 0.2
---------------------------------------------------------------------------------------------------------------------
Electrical Equipment 50,000 Power-One, Inc. 2,109,375 1.2
---------------------------------------------------------------------------------------------------------------------
Electronic/ 37,200 +Applied Micro Circuits Corporation 1,801,875 1.0
Semiconductors 66,000 AudioCodes Ltd. 1,072,500 0.6
68,200 +Exar Corporation 1,709,263 1.0
28,000 +PMC-Sierra, Inc. 2,579,500 1.4
2,000 Transmeta Corporation 45,125 0.0
------------ ----
7,208,263 4.0
---------------------------------------------------------------------------------------------------------------------
Fiber Optics 81,400 +Avanex Corporation 3,774,925 2.1
72,000 Corning Incorporated 4,212,000 2.3
22,100 +SDL Inc. 4,016,675 2.2
------------ ----
12,003,600 6.6
---------------------------------------------------------------------------------------------------------------------
Instruments 60,000 Applera Corporation--Applied Biosystems Group 4,957,500 2.7
64,000 +Caliper Technologies Corp. 2,848,000 1.6
30,000 Newport Corporation 1,715,625 0.9
66,000 +Waters Corporation 4,244,625 2.3
------------ ----
13,765,750 7.5
---------------------------------------------------------------------------------------------------------------------
Internet Software 18,000 +Agile Software Corporation 830,250 0.5
30,000 +VeriSign, Inc. 2,598,750 1.4
99,000 +Vignette Corporation 1,553,063 0.9
124,000 +WatchGuard Technologies, Inc. 2,821,000 1.6
------------ ----
7,803,063 4.4
---------------------------------------------------------------------------------------------------------------------
Natural Gas 50,000 Enron Corp. 3,237,500 1.8
---------------------------------------------------------------------------------------------------------------------
Networking Products 92,700 +Cisco Systems, Inc. 4,432,219 2.5
100,000 +Extreme Networks, Inc. 5,131,250 2.8
19,000 +Foundry Networks, Inc. 700,625 0.4
42,000 +Juniper Networks, Inc. 5,234,250 2.9
------------ ----
15,498,344 8.6
---------------------------------------------------------------------------------------------------------------------
Pharmaceuticals 49,500 +Millennium Pharmaceuticals, Inc. 2,400,750 1.3
75,000 Pfizer Inc. 3,323,437 1.8
------------ ----
5,724,187 3.1
---------------------------------------------------------------------------------------------------------------------
Retail--Specialty 125,000 +Bed Bath & Beyond Inc. 2,601,562 1.4
100,000 Tiffany & Co. 3,418,750 1.9
------------ ---
6,020,312 3.3
---------------------------------------------------------------------------------------------------------------------
Telecommunications 186,400 Advanced Switching Communications, Inc. 827,150 0.5
& Equipment 60,000 Sonus Networks, Inc. 1,455,000 0.8
------------ ----
2,282,150 1.3
---------------------------------------------------------------------------------------------------------------------
Wireless Communication-- 44,000 +Palm, Inc. 1,592,250 0.9
Domestic Paging &
Cellular
====================================================================================================================================
Total Common Stocks in the United States 138,671,777 76.7
====================================================================================================================================
Total Investments in Common Stocks (Cost--$197,604,202) 147,621,627 81.6
====================================================================================================================================
</TABLE>
14 & 15
<PAGE>
Merrill Lynch Premier Growth Fund, Inc., November 30, 2000
SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<TABLE>
<CAPTION>
Master Premier Growth Trust (concluded)
------------------------------------------------------------------------------------------------------------------------------------
Face Percent of
Amount Short-Term Securities Value Net Assets
====================================================================================================================================
<S> <C> <C> <C> <C>
Commercial Paper* US$ 2,353,000 AEP Inc., 6.50% due 12/18/2000 $ 2,345,778 1.3%
1,400,000 Bell South Capital Funding Corporation, 6.50% due 12/05/2000 1,398,989 0.8
3,739,000 General Motors Acceptance Corp., 6.56% due 12/01/2000 3,739,000 2.1
Verizon Global Funding:
5,000,000 6.52% due 12/04/2000 4,997,283 2.7
7,000,000 6.55% due 1/05/2001 6,955,424 3.8
====================================================================================================================================
Total Investments in Commercial Paper 19,436,474 10.7
====================================================================================================================================
US Government 2,664,000 Fannie Mae, 6.45% due 12/07/2000 2,661,136 1.5
Agency Obligations* 3,300,000 Federal Farm Credit Bank, 6.45% due 12/07/2000 3,296,452 1.8
7,000,000 Freddie Mac Participation Certificates, 6.42% due 12/19/2000 6,977,530 3.9
====================================================================================================================================
Total Investments in US Government Agency Obligations 12,935,118 7.2
====================================================================================================================================
Total Investments in Short-Term Securities (Cost--$32,371,592) 32,371,592 17.9
====================================================================================================================================
Total Investments (Cost--$229,975,794) 179,993,219 99.5
Other Assets Less Liabilities 904,411 0.5
------------ -----
Net Assets $180,897,630 100.0%
============ =====
====================================================================================================================================
</TABLE>
+ Non-income producing security.
* 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.
See Notes to Financial Statements.
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
MASTER PREMIER
GROWTH TRUST As of November 30, 2000
=========================================================================================================
<S> <C> <C> <C>
Assets: Investments, at value (identified cost--$229,975,794) ... $ 179,993,219
Cash .................................................... 720
Receivables:
Contributions ......................................... $ 1,485,011
Dividends ............................................. 16,579 1,501,590
-----------
Prepaid expenses and other assets ....................... 215,098
-------------
Total assets ............................................ 181,710,627
-------------
=========================================================================================================
Liabilities: Payables:
Withdrawals ........................................... 592,188
Investment adviser .................................... 118,755 710,943
-----------
Accrued expenses ........................................ 102,054
-------------
Total liabilities ....................................... 812,997
-------------
=========================================================================================================
Net Assets: Net assets .............................................. $ 180,897,630
=============
=========================================================================================================
Net Assets Partners' capital ....................................... $ 230,880,205
Consist of: Unrealized depreciation on investments--net ............. (49,982,575)
-------------
Net assets .............................................. $ 180,897,630
=============
=========================================================================================================
</TABLE>
See Notes to Financial Statements.
16 & 17
<PAGE>
Merrill Lynch Premier Growth Fund, Inc., November 30, 2000
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
MASTER PREMIER
GROWTH TRUST For the Period March 3, 2000+ to November 30, 2000
===============================================================================================================
<S> <C> <C> <C>
Investment Interest and discount earned .......................... $ 1,286,140
Income: Dividends (net of $643 foreign withholding tax) ....... 80,665
--------------
Total income .......................................... 1,366,805
--------------
===============================================================================================================
Expenses: Investment advisory fees .............................. $ 1,176,719
Accounting services ................................... 84,990
Custodian fees ........................................ 27,140
Offering costs ........................................ 21,716
Trustees' fees and expenses ........................... 14,241
Professional fees ..................................... 1,502
Pricing fees .......................................... 617
Other ................................................. 3,948
------------
Total expenses ........................................ 1,330,873
--------------
Investment income--net ................................ 35,932
--------------
===============================================================================================================
Realized loss from:
Realized & Investments--net ................................... (43,851,984)
Unrealized Loss Foreign currency transactions--net ................. (6,219) (43,858,203)
On Investments & ------------
Foreign Currency Unrealized depreciation on investments--net ........... (49,982,575)
Transactions--Net: --------------
Net Decrease in Net Assets Resulting from Operations .. $ (93,804,846)
==============
===============================================================================================================
</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 Nov. 30, 2000
====================================================================================================
<S> <C> <C>
Operations: Investment income--net ......................................... $ 35,932
Realized loss on investments--net .............................. (43,858,203)
Unrealized depreciation on investments--net .................... (49,982,575)
-------------
Net decrease in net assets resulting from operations ........... (93,804,846)
-------------
====================================================================================================
Net Capital Increase in net assets derived from net capital contributions .. 274,602,376
Contributions: -------------
====================================================================================================
Net Assets: Total increase in net assets ................................... 180,797,530
Beginning of period ............................................ 100,100
-------------
End of period .................................................. $ 180,897,630
=============
====================================================================================================
</TABLE>
+ Commencement of operations.
See Notes to Financial Statements.
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 Nov. 30, 2000
=====================================================================================================
<S> <C> <C>
Ratios to Average Expenses ....................................................... .85%*
Net Assets: ===========
Investment income--net ......................................... .02%*
===========
=====================================================================================================
Supplemental Net assets, end of period (in thousands) ....................... $ 180,898
Data: ===========
Portfolio turnover ............................................. 79.97%
===========
=====================================================================================================
</TABLE>
* Annualized.
+ Commencement of operations.
See Notes to Financial Statements.
18 & 19
<PAGE>
Merrill Lynch Premier Growth Fund, Inc., November 30, 2000
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 conformity with accounting principles generally accepted in the
United States of America, which may require the use of management accruals and
estimates. 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 that are 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.
(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. The Trust will adopt the provisions of the AICPA Audit
and Accounting Guide for Investment Companies, as revised, effective for fiscal
years beginning after December 15, 2000. As required, the Trust will begin
amortizing premiums and discounts on debt securities effective December 1, 2001.
Prior to this date, the Trust did not amortize premiums or discounts on debt
securities. The cumulative effect of this accounting change will have no impact
on the total net assets of the Trust. The impact of this accounting change has
not been determined but will result in an adjustment to cost of securities and a
corresponding adjustment in net unrealized appreciation/depreciation, based on
securities held as of November 30, 2001.
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 were provided to the Trust by FAM.
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 November 30, 2000 were $374,239,761 and $132,783,697,
respectively.
Net realized losses for the period March 3, 2000 to November 30, 2000 and net
unrealized losses as of November 30, 2000 were as follows:
-------------------------------------------------------------------------------
Realized Unrealized
Losses Losses
-------------------------------------------------------------------------------
Long-term investments .................. $(43,851,863) $(49,982,575)
Short-term investments ................. (121) --
Foreign currency transactions .......... (6,219) --
------------ ------------
Total .................................. $(43,858,203) $(49,982,575)
============ ============
-------------------------------------------------------------------------------
As of November 30, 2000, net unrealized depreciation for Federal income tax
purposes aggregated $50,520,714, of which $6,878,223 related to appreciated
securities and $57,398,937 related to depreciated securities. At November 30,
2000, the aggregate cost of investments for Federal income tax purposes was
$230,513,933.
4. Short-Term Borrowings:
On July 1, 2000, the Trust became party to a $1,000,000,000 credit agreement
dated as of December 3, 1999 among
20 & 21
<PAGE>
Merrill Lynch Premier Growth Fund, Inc., November 30, 2000
NOTES TO FINANCIAL STATEMENTS (concluded)
MASTER PREMIER GROWTH TRUST
certain other funds managed by FAM and its affiliates, Bank of America, N.A. and
certain other lenders. The Trust may borrow under the credit agreement to fund
shareholder redemptions and for other lawful purposes other than for leverage.
The Trust may borrow up to the maximum amount allowable under the Trust's
current prospectus and statement of additional information, subject to various
other legal, regulatory or contractual limits. The Trust pays a commitment fee
of .09% per annum based on the Trust's pro rata share of the unused portion of
the facility. Amounts borrowed under the facility bear interest at a rate equal
to, at each fund's election, the Federal Funds rate plus .50% or a base rate as
determined by Bank of America, N.A. The Trust did not borrow under the facility
during the period March 3, 2000 to November 30, 2000. On December 1, 2000,
this credit agreement was renewed and amended with Bank One, N.A., replacing
Bank of America, N.A. as administrative agent.
5. Capital Loss Carryforward:
At November 30, 2000, the Trust had a net capital loss carryforward of
approximately $39,656,000, all of which expires in 2008. This amount will be
available to offset like amounts of any future taxable gains.
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Investors, Master Premier Growth Trust:
We have audited the accompanying statement of assets and liabilities of Master
Premier Growth Trust, including the schedule of investments, as of November 30,
2000, the related statements of operations and changes in net assets, and the
financial highlights for the period March 3, 2000 (commencement of operations)
to November 30, 2000. These financial statements and the financial highlights
are the responsibility of the Trust's management. Our responsibility is to
express an opinion on these financial statements and the financial highlights
based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements and the financial highlights are free from material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation
of securities owned at November 30, 2000 by correspondence with the custodian.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Master Premier
Growth Trust as of November 30, 2000, the results of its operations, the changes
in its net assets, and the financial highlights for the period March 3, 2000
(commencement of operations) to November 30, 2000 in conformity with accounting
principles generally accepted in the United States of America.
Deloitte & Touche LLP
Princeton, New Jersey
January 9, 2001
PORTFOLIO INFORMATION (unaudited)
As of November 30, 2000
================================================================================
Percent of
Ten Largest Equity Holdings Net Assets
--------------------------------------------------------------------------------
Comverse Technology, Inc. ............................................... 4.1%
Brocade Communications Systems, Inc. .................................... 3.3
BEA Systems, Inc. ....................................................... 3.1
Juniper Networks, Inc. .................................................. 2.9
Extreme Networks, Inc. .................................................. 2.8
Applera Corporation--Applied Biosystems Group ........................... 2.7
Harley-Davidson, Inc. ................................................... 2.7
CIENA Corporation ....................................................... 2.7
VERITAS Software Corporation ............................................ 2.7
Cisco Systems, Inc. ..................................................... 2.5
--------------------------------------------------------------------------------
Percent of
Ten Largest Industries Net Assets
--------------------------------------------------------------------------------
Computer Services/Software .................................. 13.5%
Communications Equipment .................................... 10.7
Networking Products ......................................... 8.6
Instruments ................................................. 7.5
Fiber Optics ................................................ 6.6
Biotechnology ............................................... 5.9
Internet Software ........................................... 4.4
Electronic/Semiconductors ................................... 4.0
Retail--Specialty ........................................... 3.3
Pharmaceuticals ............................................. 3.1
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Percent of
Geographic Allocation Net Assets+
--------------------------------------------------------------------------------
United States ............................................ 76.7%
Canada ................................................... 2.8
Singapore ................................................ 2.1
--------------------------------------------------------------------------------
+ Total may not equal 100%.
22 & 23
<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
Premier Growth Fund, Inc.
Box 9011
Princeton, NJ
08543-9011 PREMIER--11/00
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