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PROSPECTUS SUPPLEMENT
DATED AUGUST 22, 1994
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On or about October 24, 1994, the Fund's exchange privilege will be
modified as described below if shareholders approve at an upcoming meeting
certain matters related to the implementation of the Merrill Lynch Select
PricingSM System pursuant to which each of the funds participating in the
current Dual Distribution System, including the Fund, will offer four classes of
shares, each with a different combination of sales charges, ongoing fees and
other features, instead of the two classes of shares presently offered. Under
the Select Pricing System, shares of Class A and Class D will be offered to
investors choosing the initial sales charge alternatives, and shares of Class B
and Class C will be offered to investors choosing the deferred sales charge
alternatives.
After the implementation date, Class A shares will only be offered to a
limited group of investors including participants in certain retirement plans
and investment programs (such participants are referred to herein as "Qualified
Purchasers") and existing Class A shareholders. Investors who are not Qualified
Purchasers who hold Class A shares of a specific fund in an account will be
entitled to purchase additional Class A shares of that fund for that account
only. Current Class A shareholders of one fund who are not Qualified Purchasers
and who wish to exchange their Class A shares for shares of a second fund will
receive Class A shares of that second fund only if such shareholder already
owned in the same account Class A shares of the second fund on the date of the
exchange. Otherwise, shareholders who are not Qualified Purchasers will receive
in exchange for their Class A shares the shares of a new Class D which will be
subject to an account maintenance fee at a maximum annual rate of 0.25% of the
fund's average daily net assets attributable to such new class of shares. An
investor will have the right to exchange Class D shares for Class A shares of
any other fund held in the investor's account, provided that Class A shares of
the fund to be acquired in the exchange are held in the account at the time of
the exchange. Otherwise, Class D shares will only be exchangeable for Class D
shares of another fund.
At the present time, the existing Class A shares of nine funds are subject
to an account maintenance fee and, accordingly, are the equivalent of the new
Class D shares. Upon implementation of the Select Pricing System, such Class A
shares automatically will be redesignated Class D shares. The following nine
funds currently offer Class A shares subject to an account maintenance fee:
Merrill Lynch Americas Income Fund, Inc., Merrill Lynch Adjustable Rate
Securities Fund, Inc., Merrill Lynch Dragon Fund, Inc., Merrill Lynch Federal
Securities Trust, Merrill Lynch Fundamental Growth Fund, Inc., Merrill Lynch
Global SmallCap Fund, Inc., Merrill Lynch International Equity Fund, Merrill
Lynch Latin America Fund, Inc. and Merrill Lynch Short-Term Global Income Fund,
Inc. Such shares will not be exchangeable for Class A shares beginning on or
about October 24, 1994, but will be exchangeable for Class D shares offered by
all funds which operate pursuant to the Select Pricing System.
Class B and Class C shares will be exchangeable only with shares of the
same class. Accordingly, the Class B shareholders' exchange privilege will
remain unchanged. The existing Class B shares of Merrill Lynch Fundamental
Growth Fund, Inc. are presently the equivalent of the new Class C shares and,
upon implementation of the Select Pricing System, automatically will be
redesignated Class C shares. Such shares will not be exchangeable for Class B
shares beginning on or about October 24, 1994, but will be exchangeable instead
for Class C shares to be created in the other funds.
Code # PR-SUPP
