MERRILL LYNCH
CAPITAL FUND, INC.
FUND LOGO
Quarterly Report
June 30, 1995
Officers and Directors
Arthur Zeikel, President and Director
Donald Cecil, Director
M. Colyer Crum, Director
Edward H. Meyer, Director
Jack B. Sunderland, Director
J. Thomas Touchton, Director
Terry K. Glenn, Executive Vice President
Norman R. Harvey, Senior Vice President
Donald C. Burke, Vice President
Ernest S. Watts, Vice President and
Portfolio Manager
Gerald M. Richard, Treasurer
Mark B. Goldfus, Secretary
<PAGE>
Custodian
The Bank of New York
90 Washington Street
New York, NY 10286
Transfer Agent
Merrill Lynch Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 637-3863
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.
Merrill Lynch
Capital Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
MERRILL LYNCH CAPITAL FUND, INC.
PORTFOLIO SUMMARY
<PAGE>
Security Diversification*
As of June 30, 1995
A pie chart illustrating the following percentages:
US Bonds 41.3%
Non-US Bonds 2.0%
Cash & Cash Equivalents 2.6%
US Stocks 44.7%
Non-US Stocks 9.4%
Security Representation*
As a Percentage of Equities
As of June 30, 1995
A pie chart illustrating the following percentages:
Financial 29.6%
Credit Cyclicals 0.3%
Utilities 6.1%
Capital Goods--Technology 6.1%
Consumer Cyclical 8.6%
Consumer Staples 12.4%
Basic Industries 11.3%
Diversified 1.5%
Consumer Services 2.2%
Transportation 0.2%
Capital Goods 4.3%
Energy 17.4%
[FN]
*Totals may not equal 100%.
<PAGE>
Geographic Diversification Percent of
As of June 30, 1995 Net Assets
United States 88.6%
Argentina 4.5
United Kingdom 2.5
Switzerland 1.2
Canada 0.9
France 0.8
Spain 0.5
Netherlands 0.5
Australia 0.1
Colombia 0.1
Hong Kong 0.1
Singapore 0.1
Thailand 0.1
US Common Stock Investments S&P
As of June 30, 1995 Fund 500*
Average Capitalization (in billions) $10.1 $8.2
Price/Book Value 2.2 3.6
Price/Earnings Ratio** 13.0 17.9
Yield Based on Current Dividend 3.1% 2.4%
[FN]
*An unmanaged broad-based index comprised of common stocks.
**Based on 1995 earnings estimates.
Fixed-Income Investments Merrill Lynch
As of June 30, 1995 Fund D0A0 Index*
Duration 5.8 Years 5.3 Years
Average Maturity 9.0 Years 12.6 Years
Asset Breakdown:
Corporates 47.5% 17.2%
US Treasuries/Agencies 45.5% 56.3%
Mortgage-Backed 3.6% 26.5%
International Governments 3.4% --
[FN]
*An unmanaged market weighted corporate, Government and mortgage
master bond index reflecting approximately 97% of total outstanding
bonds.
<PAGE>
DEAR SHAREHOLDER
In the June quarter, economic data showed evidence of slowing
activity. Gross domestic product (GDP) growth for the first three
months of 1995 was reported at 2.7%, the weakest showing in the past
18 months. Other signs of a sluggish economy included slowing growth
in the manufacturing sector in May and June as well as three
consecutive months of declines in the Index of Leading Economic
Indicators, an occurrence which has often (but not always) forecast
recessions. As a result, by the end of the June quarter concerns had
arisen that the economic "soft landing" could turn into an actual
recession. However, at the same time there were also expectations
that a few months of very slow or zero growth would be followed by a
pickup in economic activity later in the year. This view was
supported by the stronger-than-expected employment data for June and
an upward revision in May's employment figures.
Thus far in 1995, economic developments have been very positive for
the US stock and bond markets, and most US stock market averages
recently have attained record levels. In contrast, the US dollar has
been persistently weak, especially relative to the yen. Following
the Federal Reserve Board's cut in short-term interest rates in
early July, continued signs of a moderating expansion and well-
contained inflationary pressures could provide further assurance
that the peak in US interest rates is behind us, creating a stronger
foundation for higher stock and bond prices. On the other hand,
indications of reaccelerating growth and increasing inflationary
pressures would likely suggest that higher interest rates are on the
horizon, a negative development for the US financial markets.
Portfolio Matters
As the stock market continued to climb, your Merrill Lynch Capital
Fund, Inc. reduced 38 holdings while increasing 50 positions, and it
eliminated 19 stocks while adding 19 new equities. As of June 30,
1995, common stocks represented 54.1% of your portfolio, compared
with 57.0% three months earlier.
The stocks in your Fund had an average yield of 3.1% as the June
quarter closed, compared with 2.4% from the average stock in the
Standard & Poor's Composite Index of 500 Stocks (S&P 500). On
average, the stocks in your Fund were priced at 2.2 times book value
and were selling at 13.0 times estimated 1995 earnings compared with
3.6 times and 17.9 times, respectively, for the average stock in the
S&P 500. Another way of looking at what you are potentially earning
on your stock investments is to divide the average price of the
holdings into their estimated earnings for 1995. If the companies
achieve their estimated profits, then, at the stock prices reported
at the end of the June quarter, the Fund's investment values
including dividends paid should perform well relative to the S&P
500. Stock prices change for many (and often unpredictable) reasons,
but we believe earnings are most basic in the building of wealth.
<PAGE>
In an effort to determine how well the companies in which you are
invested through Merrill Lynch Capital Fund, Inc. will do, we talk
with the managements of each of them. At all times, our goal is to
be conservatively invested. Accordingly, over the years the Fund's
investments in airlines and technology stocks, two groups that have
far outpaced the stock market this year, have generally been modest
or nonexistent, primarily because of potentially sharp stock price
volatility, leveraged balance sheets, limited dividends, a
vulnerability to sharp swings in their business fortunes, or a
combination of these factors.
One reason that we are insistent on getting a current return for you
now, in the form of dividends or interest payments, is that you
chose to invest in a growth and income fund. The objectives should
have equal weighting, in our opinion, just as the total return from
common stocks, dating back to the mid-1920s, has been roughly half
from dividends and half from appreciation. But we think it goes
deeper than that, even as a lower capital gains tax may be enacted.
First, in our view, being paid something now should be worth more,
on average, than the promise of returns in the distant future. More
importantly, the obligation to continue dividend payments at
established levels should cause corporate managements to plan more
conservatively as they build your companies for the future. In our
opinion, the discipline of having to pay dividends on a regular
basis should make managements prepare more for the hard economic
times that always come upon us.
We added shares of English China Clays PLC, Montana Power Co.,
Niagara Mohawk Power Corp., Phillips Petroleum Co. and Redland PLC
to your portfolio, in part to increase overall income. We also
believe that they have potential for appreciation. Although
Columbia/HCA Healthcare Corp. pays only a modest dividend, we
purchased shares of the company because it has an outstanding record
of growth, a good balance sheet and a reputation for superior
customer service at a time when severe cost-cutting pressures have
been brought to bear on the hospital industry. Sphere Drake Holdings
Ltd. and Rite Aid Corp., which we also added to your Fund, seemed to
be modestly priced for growth. ALZA Corp. and Ciba-Geigy AG were
chosen to increase pharmaceutical holdings closer to a market
weighting, as their earnings are expected to continue growing even
if there is a reversal of the economic growth which has been in
effect since April 1991.
<PAGE>
Because of less-promising economic prospects, your Fund took
advantage of price strength during the June quarter to reduce
holdings in banks, chemicals, manufactured housing, railroads,
restaurants, retail trade, paper and photography stocks as well as
two of the more leveraged oil companies, Occidental Petroleum Corp.
and USX-Marathon Group, Inc. E-Systems, Inc. was acquired by
Raytheon Co. at $64 a share. W.R. Grace & Co. lost its chief
executive officer, who had been a primary reason for our investment
in the company, so we sold the stock. Kimberly-Clark Corp. has not
been increasing its earnings because of competitive battles, yet it
is believed to have been considering to merge with another major
producer of consumer goods. We believe the added responsibilities
for management made this an unpromising investment, so we sold the
stock. American Premier Underwriters, Inc., Delta Woodside
Industries, Inc., Fingerhut Companies, Inc., J.C. Penney Company,
Inc., and Ohio Casualty Corp. had not made the progress expected, so
we eliminated them. BancOne Corp., The Boeing Co., First Union
Corp., Harsco Corp., Liposome Co., Inc., Norfolk Southern Corp.,
PacifiCorp, and Thiokol Corp. had performed quite well, and were
eliminated at a profit and the capital was moved to what appeared to
be better values for the future.
Investments were increased in Cadbury Schweppes PLC, Corning Inc.,
General Electric Co., YPF S.A. and Texaco Inc. as well as the steel
industry and real estate investment trusts, where we believed that
prospects for the companies were better than the relatively poor
price action for the year-to-date might indicate. Some of your
stocks have performed well, yet we believe the prospects for the
representative companies have improved at an even faster pace.
Therefore, more shares of Aetna Life & Casualty Co., Cameco Corp.,
Federal National Mortgage Association, Household International,
Inc., TIG Holdings, Inc. and Williams Companies, Inc. were
purchased.
As interest rates declined, your bond holdings in the Fund increased
in value. However, we believed the yields, while still attractive,
were no longer above-average from an absolute historical
perspective. Therefore, from a peak of more than 11 years, the
average number of years to maturity was reduced to 9.0 years. In
addition to being attractive on an absolute basis, the yields are
providing an above-average return relative to the perceived rate of
inflation. For these reasons and because of the low yields available
from common stocks, bonds were increased from 39.1% of net assets of
your portfolio at March 31, 1995 to 43.3% as of June 30, 1995. Also,
most of the cash built up earlier in the year, when the positive
yield curve had flattened, was moved to US Treasury bonds maturing
in 2004.
<PAGE>
Nearly half of your money invested in bonds is in US Treasury bonds.
In our opinion, there is risk in every type of investment. Currently,
the spread between US Treasury bonds and corporate bond yields is
below average, we believe. Often the spread widens during periods
of political or economic unsettlement. We continue to seek oppor-
tunities in corporate bonds of sound quality to increase overall
yield.
In Conclusion
We appreciate your continued investment in Merrill Lynch Capital
Fund, Inc., and we look forward to reviewing our outlook and
strategy with you in our next report to shareholders.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Ernest S. Watts)
Ernest S. Watts
Vice President and Portfolio Manager
July 17, 1995
PERFORMANCE DATA
About Fund Performance
Since October 21, 1994, investors have been able to purchase shares
of the Fund through the Merrill Lynch Select Pricing SM System,
which offers four pricing alternatives:
*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.
*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 8 years.
<PAGE>
*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.
*Class D Shares incur a maximum initial sales charge of 5.25% and an
account maintenance fee of 0.25% (but no distribution fee).
Performance data for the Fund's Class A and Class B Shares are
presented in the "Average Annual Total Return" tables below. The
"Results of a $1,000 Investment Since Inception--Class A Shares"
chart on page 5 illustrates the performance of a $1,000 investment
in Class A Shares made at the Fund's inception (assuming maximum
sales charge of 5.25%) through June 30, 1995. "Aggregate Total
Return" tables for Class C and Class D Shares are also presented
below. Data for all of the Fund's shares are presented in the
"Recent Performance Results" table on page 5.
The "Recent Performance Results" table shows investment results
before the deduction of any sales charges for Class A and Class B
Shares for the 12-month and 3-month periods ended June 30, 1995 and
for Class C and Class D Shares for the since inception and the 3-
month periods ended June 30, 1995. All data in this table assume
imposition of the actual total expenses incurred by each class of
shares during the relevant period.
None of the past results shown should 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. 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.
Average Annual Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 6/30/95 +18.82% +12.58%
Five Years Ended 6/30/95 +11.69 +10.50
Ten Years Ended 6/30/95 +13.46 +12.85
<PAGE>
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 6/30/95 +17.56% +13.56%
Five Years Ended 6/30/95 +10.55 +10.55
Inception (10/21/88) through 6/30/95 +11.34 +11.34
[FN]
*Maximum contingent deferred sales charge is 4% and is reduced to 0%
after 4 years.
**Assuming payment of applicable contingent deferred sales charge.
Aggregate Total Return
% Return % Return
Without CDSC With CDSC**
Class C Shares*
Inception (10/21/94)
through 6/30/95 +14.80% +13.80%
[FN]
*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 (10/21/94)
through 6/30/95 +15.40% + 9.34%
<PAGE>
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
PERFORMANCE DATA (concluded)
Results of a $1,000 Investment Since Inception--Class A Shares
(5.25% sales charge--$947.50 net amount invested; assuming
reinvestment of all dividends and capital gains distributions)
A mountain chart depicting the growth of an investment in the Fund's
Class A Shares from $947.50 on November 8, 1973 to $12,887.14 on
June 30, 1995.
<TABLE>
Recent Performance Results
<CAPTION>
12 Month 3 Month
6/30/95 3/31/95 6/30/94++ % Change++ % Change
<S> <C> <C> <C> <C> <C>
ML Capital Fund, Inc. Class A Shares* $29.30 $27.74 $27.82 +11.59%(1) + 6.73%(2)
ML Capital Fund, Inc. Class B Shares* 28.83 27.28 27.33 +11.86(1) + 6.81(2)
ML Capital Fund, Inc. Class C Shares* 28.67 27.17 26.81 +10.76(3) + 6.65(2)
ML Capital Fund, Inc. Class D Shares* 29.28 27.72 27.27 +11.14(3) + 6.73(2)
Dow Jones Industrial Average** 4,556.10 4,157.69 3,624.96 +25.69 + 9.58
Standard & Poor's 500 Index** 544.75 500.71 444.27 +22.62 + 8.80
ML Capital Fund, Inc. Class A Shares--Total Return* +18.82(4) + 8.50(5)
ML Capital Fund, Inc. Class B Shares--Total Return* +17.56(6) + 8.20(7)
ML Capital Fund, Inc. Class C Shares--Total Return* +14.80(8) + 8.23(9)
ML Capital Fund, Inc. Class D Shares--Total Return* +15.40(10) + 8.44(11)
Dow Jones Industrial Average--Total Return** +29.21 +10.28
Standard & Poor's 500 Index--Total Return** +25.95 + 9.44
<PAGE>
<FN>
*Investment results shown do not reflect sales charges; results
shown would be lower if a sales charge was included.
**An unmanaged broad-based index comprised of common stocks. Total
investment returns for unmanaged indexes are based on estimates.
++Investment results shown for Class C and Class D Shares are since
inception (10/21/94).
(1)Percent change includes reinvestment of $1.554 per share capital
gains distributions.
(2)Percent change includes reinvestment of $0.308 per share capital
gains distributions.
(3)Percent change includes reinvestment of $0.926 per share capital
gains distributions.
(4)Percent change includes reinvestment of $1.741 per share ordinary
income dividends and $1.554 per share capital gains distributions.
(5)Percent change includes reinvestment of $0.493 per share ordinary
income dividends and $0.308 per share capital gains distributions.
(6)Percent change includes reinvestment of $1.357 per share ordinary
income dividends and $1.554 per share capital gains distributions.
(7)Percent change includes reinvestment of $0.383 per share ordinary
income dividends and $0.308 per share capital gains distributions.
(8)Percent change includes reinvestment of $0.975 per share ordinary
income dividends and $0.926 per share capital gains distributions.
(9)Percent change includes reinvestment of $0.433 per share ordinary
income dividends and $0.308 per share capital gains distributions.
(10)Percent change includes reinvestment of $1.046 per share
ordinary income dividends and $0.926 per share capital gains
distributions.
(11)Percent change includes reinvestment of $0.474 per share
ordinary income dividends and $0.308 per share capital gains
distributions.
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS
<CAPTION>
Shares Percent of
Industries Held Common Stocks Cost Value Net Assets
<S> <C> <S> <C> <C> <C>
Aerospace 354,000 Lockheed Corp. $ 17,248,525 $ 22,346,250 0.3%
1,250,000 Rockwell International Corporation 44,768,301 57,187,500 0.8
-------------- -------------- ------
62,016,826 79,533,750 1.1
Automobile 897,000 Echlin Inc. 26,567,894 31,170,750 0.4
Equipment
Automotive 950,000 Ford Motor Company 24,977,814 28,262,500 0.4
Banking 552,000 Banco Bilboa Vizcaya (ADR)* 13,436,885 15,732,000 0.2
1,573,000 Bancorp Hawaii, Inc. 45,369,339 47,190,000 0.7
441,000 Bangkok Bank Company Ltd. 'Foreign' 4,152,473 4,861,277 0.1
2,990,000 Chemical Banking Corp. 109,962,958 141,277,500 2.0
600,000 National Australian Bank Ltd. 4,808,234 4,733,784 0.1
2,672,000 NationsBank Corp. 128,052,741 143,286,000 2.0
3,132,000 SouthTrust Corp. 50,885,026 72,427,500 1.0
1,470,000 Union Planters Corp. 18,030,061 39,322,500 0.5
-------------- -------------- ------
374,697,717 468,830,561 6.6
Beverages 3,800,000 Cadbury Schweppes PLC 26,350,605 27,741,501 0.4
Building & 7,036,000 Kumagai Gumi Co., Ltd. (Ordinary) 5,121,159 6,001,784 0.1
Construction
Building Materials 110,000 Medusa Corp. 2,636,686 2,736,250 0.0
900,000 Redland PLC 6,159,850 5,890,417 0.1
-------------- -------------- ------
8,796,536 8,626,667 0.1
Capital Goods 683,000 GATX Capital Corp. 23,355,006 32,186,375 0.5
Chemicals 75,000 ARCO Chemical Company 3,324,273 3,403,125 0.1
798,000 Albemarle Corp. 11,589,973 12,468,750 0.2
27,000 Ciba-Geigy AG 18,339,623 19,798,436 0.3
600,000 du Pont (E.I.) de Nemours & Co. 30,831,893 41,250,000 0.6
740,000 Engelhard Corp. 18,216,998 31,727,500 0.4
180,000 Goodrich (B.F.) Co. 7,885,348 9,652,500 0.1
1,168,000 Imperial Chemical Industries PLC (ADR)* 55,503,239 56,940,000 0.8
556,000 Union Carbide Corp. 15,809,364 18,556,500 0.3
-------------- -------------- ------
161,500,711 193,796,811 2.8
<PAGE>
Coal 181,000 Pittston Services Group 4,320,343 4,344,000 0.1
Diversified 110,000 AlliedSignal, Inc. 3,935,094 4,895,000 0.1
Companies 410,000 Corning Inc. 13,277,273 13,427,500 0.2
9,000,000 Hillsdown Holdings PLC 20,679,590 25,909,245 0.4
600,000 Tenneco, Inc. 23,717,598 27,600,000 0.4
1,100,000 United Technologies Corp. 63,816,513 85,937,500 1.2
781,000 Worldtex Inc. 3,496,431 4,588,375 0.1
-------------- -------------- ------
128,922,499 162,357,620 2.4
Drug Stores 320,000 Rite Aid Corp. 7,615,246 8,200,000 0.1
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued)
<CAPTION>
Shares Percent of
Industries Held Common Stocks Cost Value Net Assets
<S> <C> <S> <C> <C> <C>
Electrical 980,000 General Electric Co. $ 49,270,597 $ 55,247,500 0.8%
Equipment 920,000 Philips Electronics N.V. (ADR)* 15,557,533 39,330,000 0.6
-------------- -------------- ------
64,828,130 94,577,500 1.4
Electronics 210,000 General Motors Corp. (Class H) 7,518,886 8,295,000 0.1
Financial Services 300,000 Dean Witter, Discover & Co. 10,289,677 14,100,000 0.2
550,000 Federal National Mortgage Association 45,989,549 51,906,250 0.7
269,000 Household International, Inc. 11,194,960 13,315,500 0.2
-------------- -------------- ------
67,474,186 79,321,750 1.1
Food Distribution 12,000,000 Dairy Farm International Holdings Ltd.
(Ordinary) 15,830,936 10,320,000 0.1
170,000 Fleming Cos., Inc. 4,712,265 4,505,000 0.1
-------------- -------------- ------
20,543,201 14,825,000 0.2
<PAGE>
Foods 170,000 Universal Foods Corp. 5,310,566 5,503,750 0.1
Forest Products 100,000 Weyerhaeuser Co. 4,706,280 4,712,500 0.1
Home Builders 270,000 Oriole Homes Corp. 2,499,746 1,890,000 0.0
Hospital 340,000 Columbia/HCA Healthcare Corp. 14,770,928 14,705,000 0.2
Management 3,120,000 Tenet Healthcare Corp. (a) 39,831,344 44,850,000 0.6
-------------- -------------- ------
54,602,272 59,555,000 0.8
Household Products 279,000 Armor All Products Corp. 5,486,988 4,673,250 0.1
420,000 Premark International, Inc. 17,022,817 21,787,500 0.3
-------------- -------------- ------
22,509,805 26,460,750 0.4
Insurance 980,000 Aetna Life & Casualty Co. 56,118,447 61,617,500 0.9
1,563,000 Allstate Corporation 38,935,688 46,303,875 0.6
420,000 American General Corporation 11,623,264 14,175,000 0.2
910,000 American International Group, Inc. 80,237,139 103,740,000 1.4
1,190,000 EXEL Ltd. (ADR)* 49,410,136 61,880,000 0.9
1,595,000 Fremont General Corp. 30,727,920 38,479,375 0.5
216,700 Integon Corp. 3,290,319 3,683,900 0.1
50,000 Lowndes Lambert Group Holdings PLC 131,253 130,421 0.0
280,000 Provident Life & Accident Insurance Co. 7,364,860 6,510,000 0.1
797,000 Safeco Corp. 41,725,787 45,528,625 0.6
249,600 Sphere Drake Holdings Ltd. 3,884,638 3,837,600 0.1
338,000 TIG Holdings, Inc. 7,489,995 7,774,000 0.1
1,565,000 Travelers Inc. 34,252,050 68,468,750 1.0
95,000 USLIFE Corporation 3,221,440 3,823,750 0.1
-------------- -------------- ------
368,412,936 465,952,796 6.6
Lodging/Hotels 380,000 Carnival Corp. (Class A) 8,602,298 8,882,500 0.1
Manufactured 400,000 Fleetwood Enterprises, Inc. 8,514,552 7,900,000 0.1
Housing
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued)
<CAPTION>
Shares Percent of
Industries Held Common Stocks Cost Value Net Assets
<S> <C> <S> <C> <C> <C>
Metals & Basic 310,000 Cameco Corp. $ 6,421,484 $ 9,341,770 0.1%
Materials 240,000 English China Clays PLC (Ordinary) 1,355,904 1,479,165 0.0
1,450,000 Magma Copper Co. 24,533,287 23,562,500 0.3
730,000 Newmont Mining Corp. 28,137,574 30,568,750 0.4
-------------- -------------- ------
60,448,249 64,952,185 0.8
Natural Gas 1,206,000 Coastal Corp. 33,034,972 36,632,250 0.5
Suppliers 268,000 MAPCO, Inc. 13,988,243 15,544,000 0.2
710,000 MetroGas S.A. (ADR)* 8,961,388 6,123,750 0.1
290,000 ONEOK Inc. 5,468,038 6,198,750 0.1
3,655,000 TransCanada Pipelines, Ltd. (ADR)* 53,909,854 48,885,625 0.7
3,845,000 Williams Companies, Inc. 102,345,865 134,094,375 1.9
-------------- -------------- ------
217,708,360 247,478,750 3.5
Office Equipment 1,143,000 Wallace Computer Services, Inc. 27,348,699 43,862,625 0.6
Oil & Gas 670,000 Repsol, S.A. (ADR)* 18,883,389 21,070,574 0.3
Producers 10,009,000 YPF S.A. (Sponsored) (ADR)* 210,397,083 188,919,875 2.6
-------------- -------------- ------
229,280,472 209,990,449 2.9
Oil--Integrated 270,000 Exxon Corp. 18,023,262 19,068,750 0.3
60,000 Mobil Corp. 4,789,348 5,760,000 0.1
1,700,000 Occidental Petroleum Corp. 34,697,504 38,887,500 0.5
904,000 Phillips Petroleum Co. 31,634,040 30,171,000 0.4
550,000 Texaco Inc. 36,710,423 36,093,750 0.5
1,867,000 TOTAL S.A.(ADR)* 50,341,088 56,476,750 0.8
95,000 USX-Marathon Group, Inc. 1,556,750 1,876,250 0.0
-------------- -------------- ------
177,752,415 188,334,000 2.6
Oil Service 850,000 Dresser Industries, Inc. 18,861,107 18,912,500 0.3
Paper 1,800,000 Federal Paper Board Co., Inc. 47,701,147 63,675,000 0.9
1,284,000 Temple-Inland, Inc. 60,765,194 61,150,500 0.9
-------------- -------------- ------
108,466,341 124,825,500 1.8
<PAGE>
Pharmaceuticals 135,000 ALZA Corp. 2,670,145 3,155,625 0.0
463,000 Block Drug, Inc. (Class A) 14,242,481 15,626,250 0.2
250,000 Glaxo Holdings PLC (ADR)* 5,260,163 6,093,750 0.1
1,430,000 Mallinckrodt Group Inc. 45,170,269 50,765,000 0.7
1,830,000 Merck & Co., Inc. 61,727,187 89,670,000 1.3
976,000 Pfizer, Inc. 80,224,602 90,158,000 1.3
10,000 Roche Holdings AG 50,843,567 64,465,682 0.9
940,000 Warner-Lambert Co. 71,537,889 81,192,500 1.1
-------------- -------------- ------
331,676,303 401,126,807 5.6
Photography 220,000 Eastman Kodak Co. 9,654,760 13,337,500 0.2
100,000 Polaroid Corp. 3,166,274 4,075,000 0.1
-------------- -------------- ------
12,821,034 17,412,500 0.3
Plastic Recycling 1,150,000 Wellman Inc. 25,119,623 31,481,250 0.4
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued)
<CAPTION>
Shares Percent of
Industries Held Common Stocks Cost Value Net Assets
<S> <C> <S> <C> <C> <C>
Printing & 461,000 American Greetings Corp. $ 12,842,220 $ 13,484,250 0.2%
Publishing 3,026,000 Oriental Press Holdings (Ordinary) 1,421,403 1,222,164 0.0
-------------- -------------- ------
14,263,623 14,706,414 0.2
Railroads 300,000 Canadian Pacific Ltd. 4,574,621 5,212,500 0.1
80,000 Conrail, Inc. 4,068,709 4,450,000 0.1
-------------- -------------- ------
8,643,330 9,662,500 0.2
Real Estate 1,115,000 RFS Hotel Investors, Inc. 17,342,936 16,725,000 0.2
Investment Trusts 1,183,000 Walden Residential Properties, Inc. 22,487,684 21,737,625 0.3
-------------- -------------- ------
39,830,620 38,462,625 0.5
<PAGE>
Restaurants 80,000 Luby's Cafeterias, Inc. 1,752,837 1,610,000 0.0
Retail Trade 700,000 Sears, Roebuck & Co. 31,359,700 41,912,500 0.6
100,000 Tandy Corp. 4,368,315 5,187,500 0.1
1,100,000 Wal-Mart Stores, Inc. 26,626,510 29,425,000 0.4
-------------- -------------- ------
62,354,525 76,525,000 1.1
Savings & Loan 491,000 Ahmanson (H.F.) & Co. 9,125,418 10,802,000 0.2
Associations
Services 1,670,000 PHH Corp. 62,537,753 74,315,000 1.0
443,000 Rollins, Inc. 11,171,325 10,632,000 0.2
-------------- -------------- ------
73,709,078 84,947,000 1.2
Steel 557,000 Birmingham Steel Corp. 12,412,955 10,304,500 0.1
1,061,000 Cleveland Cliffs, Inc. 36,539,069 40,848,500 0.6
-------------- -------------- ------
48,952,024 51,153,000 0.7
Telecommuni- 2,189,000 GTE Corp. 68,550,750 74,699,625 1.0
cations
Tires & Rubber 3,547,000 The Goodyear Tire & Rubber Co. 135,796,716 146,313,750 2.0
Utilities-- 247,000 American Water Works Co., Inc. 6,127,683 7,842,250 0.1
Electric, Gas & 329,000 Central Hudson Gas & Electric Corp. 8,574,316 8,883,000 0.1
Water 211,000 Entergy Corp. 4,464,722 5,090,375 0.1
1,111,000 Illinova Corp. 23,096,539 28,191,625 0.4
265,000 Montana Power Co. 6,097,421 6,095,000 0.1
380,000 Niagara Mohawk Power Corp. 5,672,344 5,605,000 0.1
2,000,000 Pinnacle West Capital Corp. 39,713,673 49,000,000 0.7
44,000 Public Service Company of North Carolina 706,765 720,500 0.0
300,000 Texas Utilities Company 9,681,204 10,312,500 0.1
1,400,000 Unicom Corp. 30,889,814 37,275,000 0.5
-------------- -------------- ------
135,024,481 159,015,250 2.2
Total Common Stocks 3,297,251,219 3,845,202,595 54.1
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued)
<CAPTION>
Face Percent of
Industries Amount Corporate Bonds Cost Value Net Assets
<S> <C> <S> <C> <C> <C>
Aerospace McDonnell Douglas Finance Corp.:
$ 15,000,000 5.61% due 2/25/1997 $ 15,000,000 $ 14,830,200 0.2%
10,000,000 7% due 4/28/1997 10,000,000 10,106,100 0.1
-------------- -------------- ------
25,000,000 24,936,300 0.3
Automotive 30,000,000 Ford Motor Co., 5.625% due 12/15/1998 29,073,200 29,218,800 0.4
20,000,000 Hertz Corp., 6.70% due 6/15/2002 19,989,100 20,000,000 0.3
-------------- -------------- ------
49,062,300 49,218,800 0.7
Banking 20,000,000 Banco Rio de la Plata, 8.75% due 12/15/2003 20,060,800 14,700,000 0.2
10,000,000 Bank of Boston Corp., 6.625% due 12/01/2005 8,621,750 9,648,600 0.1
15,000,000 BankAmerica Corp., 6.875% due 6/01/2003 14,149,050 14,875,800 0.2
Bankers Trust Company:
25,000,000 4.70% due 7/01/1996 24,551,500 24,646,000 0.3
10,000,000 7.50% due 1/15/2002 9,688,700 10,172,800 0.1
The Chase Manhattan Corp.:
10,000,000 7.50% due 12/01/1997 10,165,600 10,207,500 0.1
20,000,000 7.75% due 11/01/1999 20,190,800 20,886,600 0.3
19,000,000 6.75% due 8/15/2008 16,463,320 18,071,660 0.3
11,400,000 Chemical Bank, 7% due 6/01/2005 11,191,266 11,389,512 0.2
First Chicago Corp.:
15,000,000 6.875% due 6/15/2003 13,963,300 14,868,000 0.2
26,400,000 6.375% due 1/30/2009 22,713,368 24,340,008 0.3
5,000,000 First Security Corp., 5.71% due 2/09/1999 5,000,000 4,871,950 0.1
15,000,000 First USA Bank, Wilmington, 5.75% due 1/15/1999 15,005,550 14,514,000 0.2
13,000,000 Great Western Financial Corp., 6.125% due
6/15/1998 12,244,010 12,924,080 0.2
10,000,000 Margaretten Financial Corp., 6.75% due 6/15/2000 9,621,060 10,034,600 0.1
NationsBank Corp.:
10,500,000 5.70% due 9/11/2000 9,545,865 10,142,370 0.1
25,000,000 6.50% due 8/15/2003 22,104,200 24,256,250 0.3
-------------- -------------- ------
245,280,139 250,549,730 3.3
Broadcasting & 30,000,000 News America Holdings, Inc., 7.50% due 3/01/2000 29,179,330 30,717,000 0.4
Publishing
<PAGE>
Capital Goods GATX Capital Corp.:
30,000,000 5.45% due 3/18/1996 30,000,000 29,839,500 0.4
15,000,000 5.48% due 3/22/1996 15,000,000 14,922,450 0.2
10,000,000 6.535% due 6/09/2001 10,000,000 9,855,700 0.1
-------------- -------------- ------
55,000,000 54,617,650 0.7
Chemicals Grace (W.R.) & Co.:
10,000,000 6.85% due 6/23/1997 9,903,700 10,055,600 0.1
20,000,000 7.40% due 2/01/2000 19,663,100 20,412,000 0.3
10,000,000 8% due 8/15/2004 9,530,100 10,495,600 0.1
25,000,000 Union Carbide Corp., 6.79% due 6/01/2025 25,000,000 24,805,500 0.3
-------------- -------------- ------
64,096,900 65,768,700 0.8
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued)
<CAPTION>
Face Percent of
Industries Amount Corporate Bonds Cost Value Net Assets
<S> <C> <S> <C> <C> <C>
Diversified ITT Corp.:
Companies $ 20,000,000 5.50% due 3/24/1997 $ 20,000,000 $ 19,776,200 0.3%
10,000,000 7.25% due 5/15/1997 10,080,100 10,150,300 0.1
5,000,000 8.125% due 11/15/1998 5,065,810 5,258,950 0.1
15,000,000 Tenneco, Inc., 7.875% due 10/01/2002 14,619,180 15,753,750 0.2
-------------- -------------- ------
49,765,090 50,939,200 0.7
Electronics 10,000,000 Philips Electronics N.V., 7.125% due 5/15/2025 9,972,650 10,266,900 0.1
<PAGE>
Finance 5,000,000 Caterpillar Financial Services Corp., 5.35%
due 11/10/1998 4,924,800 4,834,900 0.1
Chrysler Finance Corp.:
20,000,000 6.50% due 6/15/1998 19,780,960 19,923,800 0.3
5,000,000 5.375% due 10/15/1998 4,610,500 4,814,650 0.1
10,000,000 6.625% due 8/15/2000 10,026,900 9,963,800 0.1
40,000,000 GTE Finance Corp., 5.81% due 12/15/1997 40,000,000 39,324,000 0.5
8,000,000 General Electric Capital Corp., 5.13% due
4/01/2004 8,000,000 8,600,000 0.1
General Motors Acceptance Corp.:
8,000,000 5.20% due 12/13/1996 7,680,000 7,890,160 0.1
22,000,000 6.70% due 4/15/1997 21,755,440 22,145,860 0.3
25,000,000 7% due 8/19/1997 24,898,750 25,300,750 0.4
15,000,000 5.95% due 1/11/1999 13,783,650 14,707,500 0.2
25,000,000 5.875% due 1/12/1999 25,044,500 24,449,000 0.3
48,500,000 5.625% due 2/01/1999 47,273,190 46,899,500 0.7
10,000,000 7.15% due 4/30/1999 9,884,400 10,177,900 0.1
21,000,000 7.375% due 6/22/2000 20,693,890 21,552,090 0.3
10,000,000 Greyhound Financial Corp., 6.75% due 3/25/1999 9,694,200 10,011,100 0.1
Household Finance Corp.:
10,000,000 6.13% due 6/19/1998 10,000,000 9,922,500 0.1
15,000,000 7.125% due 4/30/1999 14,356,800 15,307,650 0.2
10,000,000 7.45% due 4/01/2000 9,958,700 10,364,600 0.1
International Lease Finance Corp.:
25,000,000 5.98% due 11/16/1998 24,975,500 24,560,500 0.3
22,500,000 6.05% due 4/30/1999 22,368,375 22,077,000 0.3
5,000,000 7.10% due 6/15/1999 4,930,900 5,079,150 0.1
10,000,000 8.15% due 10/01/2004 9,691,300 10,729,900 0.2
-------------- -------------- ------
364,332,755 368,636,310 5.0
Financial 15,000,000 American Express Credit Corp., 6.75% due
Services 6/01/2001 14,981,700 15,128,250 0.2
10,000,000 Dean Witter, Discover & Co., 6.50% due
11/01/2005 9,803,900 9,595,000 0.1
Smith Barney Shearson Holdings, Inc.:
20,000,000 6% due 3/15/1997 19,897,700 19,838,800 0.3
20,000,000 7% due 5/15/2000 19,930,000 20,222,000 0.3
-------------- -------------- ------
64,613,300 64,784,050 0.9
Foods 10,000,000 RJR Nabisco Holding Corp., 6.85% due 6/15/2005 10,000,000 9,854,400 0.1
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued)
<CAPTION>
Face Percent of
Industries Amount Corporate Bonds Cost Value Net Assets
<S> <C> <S> <C> <C> <C>
Foreign Government Republic of Argentina:
Obligations $ 40,000,000 10.95% due 11/01/1999 $ 35,029,830 $ 38,600,000 0.5%
29,000,000 8.375% due 12/20/2003 20,017,500 21,315,000 0.3
75,000,000 7.312% due 3/31/2005 50,225,000 45,375,000 0.6
4,500,000 Republic of Colombia, 7.25% due 2/23/2004 4,145,000 4,162,500 0.1
-------------- -------------- ------
109,417,330 109,452,500 1.5
<PAGE>
Furniture/Home 6,500,000 Singer Co. N.V., 7% due 4/01/2003 5,828,093 6,020,105 0.1
Appliances
Gas Transmission 10,000,000 ENSERCH Corporation, 7.125% due 6/15/2005 10,000,000 10,090,200 0.1
Hospital Columbia/HCA Healthcare Corp.:
Management 20,000,000 6.125% due 12/15/2000 18,456,800 19,252,800 0.3
20,000,000 6.91% due 6/15/2005 19,919,400 19,919,400 0.3
10,000,000 National Medical Enterprises Inc.,
9.625% due 9/01/2002 10,000,000 10,550,000 0.1
-------------- -------------- ------
48,376,200 49,722,200 0.7
Industrial 9,775,000 Crane Co., 7.25% due 6/15/1999 9,619,840 9,918,888 0.1
Insurance 5,525,000 Integon Corp., 8% due 8/15/1999 5,546,643 5,496,325 0.1
10,000,000 NAC Re Corp., 8% due 6/15/1999 10,189,300 10,369,300 0.1
20,000,000 Travelers Inc., 6.125% due 6/15/2000 18,772,550 19,569,800 0.3
-------------- -------------- ------
34,508,493 35,435,425 0.5
Machinery 15,000,000 Black & Decker Corp., 6.625% due 11/15/2000 14,248,100 14,776,500 0.2
5,000,000 FMC Corp., 6.375% due 9/01/2003 4,779,150 4,714,300 0.1
10,000,000 Harris Corp., 10.375% due 12/01/2018 10,541,400 11,211,300 0.2
10,000,000 TRINOVA Corp., 7.95% due 5/01/1997 9,975,000 10,229,000 0.1
-------------- -------------- ------
39,543,650 40,931,100 0.6
Manufactured 3,000,000 Oakwood Homes Corp., 9.125% due 6/01/2007 3,000,000 3,003,750 0.0
Housing
Natural Gas Coastal Corp.:
Suppliers 13,000,000 8.75% due 5/15/1999 13,055,960 13,856,830 0.2
30,000,000 8.125% due 9/15/2002 29,984,410 31,573,200 0.4
-------------- -------------- ------
43,040,370 45,430,030 0.6
Oil & Gas 5,000,000 YPF S.A., 8% due 2/15/2004 4,208,750 4,350,000 0.1
<PAGE>
Oil--Integrated Occidental Petroleum Corp.:
12,000,000 5.85% due 11/09/1998 11,150,172 11,709,480 0.2
18,375,000 6.24% due 11/24/2000 18,135,306 17,873,546 0.3
-------------- -------------- ------
29,285,478 29,583,026 0.5
Oil--International 15,000,000 Maxus Energy Corp., 9.375% due 11/01/2003 14,376,800 13,875,000 0.2
Union Texas Petroleum Holdings, Inc.:
5,000,000 8.375% due 3/15/2005 5,008,250 5,291,900 0.1
10,000,000 8.50% due 4/15/2007 9,965,800 10,688,500 0.2
-------------- -------------- ------
29,350,850 29,855,400 0.5
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued)
<CAPTION>
Face Percent of
Industries Amount Corporate Bonds Cost Value Net Assets
<S> <C> <S> <C> <C> <C>
Pharmaceutical $ 5,750,000 Cardinal Distribution, Inc., 8% due
Distribution 3/01/1997 $ 5,750,000 $ 5,869,542 0.1%
Railroads 3,000,000 Burlington Northern, Inc., 7.40% due 5/15/1999 2,993,580 3,079,680 0.0
Retail 10,000,000 Sears Roebuck Acceptance Corp., 6.50% due
6/15/2000 9,958,300 9,959,700 0.1
Services 19,375,000 ADT Operations, 8.25% due 8/01/2000 19,511,125 19,714,062 0.3
Steel 20,000,000 USX Corp., 6.375% due 7/15/1998 19,894,000 19,811,400 0.3
Telecommuni- 25,000,000 AT&T Capital Corp., 6.69% due 5/09/1997 25,000,000 25,237,500 0.4
cations 10,000,000 Allnet Communications Services, Inc., 9%
due 5/15/2003 9,746,250 10,637,500 0.2
10,000,000 Bell Atlantic Financial Services, Inc.,
5.47% due 4/27/1998 10,031,400 9,813,200 0.1
-------------- -------------- ------
44,777,650 45,688,200 0.7
Trucking 20,000,000 XTRA Corp., 6.68% due 11/30/2001 20,000,000 20,000,000 0.3
<PAGE>
Utilities-- Commonwealth Edison Co.:
Electric, Gas & 10,000,000 6% due 3/15/1998 10,157,200 9,808,900 0.1
Water 25,000,000 6.40% due 10/15/2005 21,178,955 23,110,250 0.3
25,000,000 Enron Corp., 6.75% due 7/01/2005 24,050,050 24,504,000 0.3
5,000,000 Long Island Lighting Co., 7.625% due 4/15/1998 4,986,210 5,096,350 0.1
15,000,000 Niagara Mohawk Power Corp., 6.875% due
3/01/2001 14,613,000 14,795,370 0.2
PECO Energy Co.:
10,000,000 7.50% due 1/15/1999 10,087,200 10,253,000 0.1
10,000,000 5.625% due 11/01/2001 9,522,700 9,396,100 0.1
10,000,000 7.125% due 9/01/2002 10,020,900 10,109,600 0.1
Texas Utilities Co.:
5,000,000 7.125% due 6/01/1997 4,987,500 5,069,300 0.1
9,500,000 5.75% due 7/01/1998 9,297,135 9,311,140 0.1
United Illuminating Co.:
5,000,000 7.375% due 1/15/1998 5,003,125 5,056,150 0.1
5,000,000 6.20% due 1/15/1999 4,693,050 4,876,550 0.1
-------------- -------------- ------
128,597,025 131,386,710 1.7
Total Corporate Bonds 1,583,963,198 1,609,590,958 21.8
Collateralized Mortgage Obligations
Federal Home Loan Mortgage Corp.:
20,000,000 5.80% due 4/15/2006 18,615,625 19,331,200 0.3
17,205,514 6% due 4/15/2006 16,808,309 16,963,570 0.2
Federal National Mortgage Association:
20,000,000 5.10% due 3/25/2002 19,256,250 19,462,400 0.3
12,000,000 6.50% due 1/25/2008 11,608,125 11,608,125 0.2
20,000,000 5% due 3/25/2012 19,425,000 19,350,000 0.3
10,000,000 5% due 4/25/2014 9,756,250 9,684,300 0.1
18,312,248 Prudential Home Mortgage Security Co.,
5.25% due 12/25/2000 17,528,254 17,739,990 0.2
Total Collateralized Mortgage Obligations 112,997,813 114,139,585 1.6
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded)
<CAPTION>
Face Percent of
Amount US Government Obligations Cost Value Net Assets
<S> <C> <S> <C> <C> <C>
US Treasury Notes:
$ 110,000,000 6% due 10/15/1999 $ 108,384,375 $ 110,085,800 1.5%
150,000,000 6.375% due 8/15/2002 141,476,892 151,780,500 2.1
260,000,000 5.75% due 8/15/2003 251,924,219 252,077,800 3.5
238,000,000 5.875% due 2/15/2004 235,285,313 232,161,860 3.2
400,000,000 7.25% due 5/15/2016 382,781,681 423,936,000 5.9
245,000,000 7.50% due 11/15/2016 236,445,312 266,743,750 3.7
Total US Government Obligations 1,356,297,792 1,436,785,710 19.9
Short-Term Investments
<PAGE>
Commercial 50,000,000 ANZ (Delaware), Inc., 5.86% due 8/02/1995 49,739,556 49,739,556 0.7
Paper** 69,584,000 General Electric Capital Corp., 6.20% due
7/03/1995 69,560,032 69,560,032 1.0
40,000,000 Matterhorn Capital Corp., 5.96% due 7/24/1995 39,847,689 39,847,689 0.6
Total Short-Term Investments 159,147,277 159,147,277 2.3
Total Investments $6,509,657,299 7,164,866,125 99.7
==============
Other Assets Less Liabilities 23,938,493 0.3
-------------- ------
Net Assets $7,188,804,618 100.0%
============== ======
Net Asset Class A--Based on net assets of $2,741,729,647 and
Value: 93,585,987 shares outstanding $ 29.30
==============
Class B--Based on net assets of $4,085,929,332 and
141,715,997 shares outstanding $ 28.83
==============
Class C--Based on net assets of $89,938,337 and 3,137,484
shares outstanding $ 28.67
==============
Class D--Based on net assets of $271,207,302 and 9,263,062
shares outstanding $ 29.28
==============
<FN>
*American Depositary Receipt (ADR).
**Commercial Paper is traded on a discount basis; the interest rates
shown are the discount rates paid at the time of purchase by the
Fund.
(a)Formerly National Medical Enterprises, Inc.
</TABLE>
PORTFOLIO INFORMATION
<PAGE>
Percent of
Ten Largest Common Stock Holdings Net Assets
YPF S.A. (Sponsored)(ADR) 2.6%
The Goodyear Tire & Rubber Co. 2.0
NationsBank Corp. 2.0
Chemical Banking Corp. 2.0
Williams Companies, Inc. 1.9
American International Group, Inc. 1.4
Pfizer, Inc. 1.3
Merck & Co., Inc. 1.3
United Technologies Corp. 1.2
Warner-Lambert Co. 1.1
Percent of
Ten Largest Industries Net Assets*
Banking 9.9%
Insurance 7.1
Pharmaceuticals 5.6
Finance 5.0
Natural Gas Suppliers 4.1
Utilities--Electric, Gas & Water 3.9
Chemicals 3.6
Oil--Integrated 3.4
Oil & Gas Producers 3.0
Diversified Companies 3.0
[FN]
*Based on total holdings in common stocks and bonds.
PORTFOLIO CHANGES
For the Quarter Ended June 30, 1995
Additions
<PAGE>
Stocks
ALZA Corp.
ARCO Chemical Company
*Aluminum Company of
America
*American Premier Group, Inc.
Armor All Products Corp.
*Astoria Financial Corp.
Bangkok Bank Company Ltd.
'Foreign'
Ciba-Geigy AG
Columbia/HCA Healthcare
Corp.
*Compaq Computer
Corporation
Dresser Industries, Inc.
English China Clays PLC
(Ordinary)
*Fieldcrest Cannon, Inc.
*General Mills, Inc.
*Green Mountain Power
Corp.
*Kerr-McGee Corporation
Lowndes Lambert Group
Holdings PLC
Medusa Corp.
Montana Power Co.
Niagara Mohawk Power Corp.
Phillips Petroleum Co.
Pittston Services Group
Public Service Company of
North Carolina
Redland PLC
Rite Aid Corp.
Sphere Drake Holdings Ltd.
*Thiokol Corp.
Weyerhaeuser Co.
<PAGE>
Bonds
AT&T Capital Corp., 6.69% due
5/09/1997
American Express Credit
Corp., 6.75% due 6/01/2001
BankAmerica Corp., 6.875%
due 6/01/2003
Chemical Bank, 7% due
6/01/2005
Chrysler Finance Corp.:
5.375% due 10/15/1998
6.625% due 8/15/2000
Columbia/HCA Healthcare
Corp., 6.91% due 6/15/2005
Dean Witter, Discover & Co.,
6.50% due 11/01/2005
ENSERCH Corporation, 7.125%
due 6/15/2005
Enron Corp., 6.75% due
7/01/2005
FMC Corp., 6.375% due
9/01/2003
Federal National Mortgage
Association, 6.50% due
1/25/2008
GATX Capital Corp., 6.535%
due 6/09/2001
Hertz Corp., 6.70% due
6/15/2002
Household Finance Corp.,
6.13% due 6/19/1998
Integon Corp., 8% due
8/15/1999
Maxus Energy Corp., 9.375%
due 11/01/2003
McDonnell Douglas Finance
Corp., 7% due 4/28/1997
Niagara Mohawk Power Corp.,
6.875% due 3/01/2001
Occidental Petroleum Corp.,
6.24% due 11/24/2000
PECO Energy Co.:
5.625% due 11/01/2001
7.125% due 9/01/2002
Philips Electronics N.V.,
7.125% due 5/15/2025
RJR Nabisco Holding Corp.,
6.85% due 6/15/2005
Republic of Argentina, 7.312%
due 3/31/2005
<PAGE>
Republic of Colombia, 7.25%
due 2/23/2004
Sears Roebuck Acceptance
Corp., 6.50% due 6/15/2000
Singer Co. N.V., 7% due
4/01/2003
Smith Barney Shearson
Holdings, Inc., 7% due
5/15/2000
Union Carbide Corp., 6.79%
due 6/01/2025
Union Texas Petroleum
Holdings, Inc., 8.50% due
4/15/2007
US Treasury Notes:
6% due 10/15/1999
5.75% due 8/15/2003
5.875% due 2/15/2004
XTRA Corp., 6.68% due
11/30/2001
YPF S.A., 8% due 2/15/2004
Deletions
Stocks
*Aluminum Company of
America
*American Premier Group, Inc.
American Premier
Underwriters, Inc.
*Astoria Financial Corp.
BancOne Corp.
The Boeing Co.
Cascade Natural Gas Corp.
*Compaq Computer
Corporation
Delta Woodside Industries,
Inc.
Dial Corp.
E-Systems, Inc.
*Fieldcrest Cannon, Inc.
Fingerhut Companies, Inc.
First Union Corp.
*General Mills, Inc.
Grace (W.R.) & Co.
*Green Mountain Power Corp.
Harsco Corp.
ITT Corp.
*Kerr-McGee Corporation
Kimberly-Clark Corp.
Liposome Co., Inc.
Norfolk Southern Corp.
Ohio Casualty Corp.
PacifiCorp
Penney (J.C.) Company, Inc.
*Thiokol Corp.
Western Resources, Inc.
<PAGE>
Bonds
AT&T Capital Corp., 7.66% due
1/30/1997
Columbia/HCA Healthcare
Corp., 8.70% due
2/10/2010
Dean Witter, Discover & Co.:
6% due 3/01/1998
6.75% due 10/15/2013
Federal National Mortgage
Association, 6.999% due
10/25/2022
Ford Motor Co., 7.20% due
6/18/1997
GATX Capital Corp., 8.20% due
5/05/1997
General American Transport
Corp., 8.625% due 12/01/2004
General Motors Acceptance
Corp., 8.25% due 1/23/1998
Hellenic Republic (Greece),
9.75% due 11/28/1999
Household Finance Corp.,
6.70% due 8/08/1997
McDonnell Douglas Finance
Corp., 6.38% due
1/15/1996
Morgan Stanley Group, Inc.,
7.875% due 12/15/1998
NationsBank Corp., 8.57%
due 11/15/2024
Occidental Petroleum Corp.,
5.90% due 11/09/1998
Philips Electronics N.V.,
8.375% due 9/15/2006
RJR Nabisco Holding Corp.,
8.30% due 4/15/1999
Smith Barney Shearson
Holdings, Inc., 7.98% due
3/01/2000
US Treasury Notes, 6.875%
due 8/31/1999
Williams Companies, Inc.,
8.875% due 9/15/2012
[FN]
* Added and deleted in the same quarter.
