MERRILL LYNCH
CAPITAL FUND, INC.
[GRAPHIC OMITTED]
STRATEGIC
Performance
Quarterly Report
June 30, 1999
<PAGE>
MERRILL LYNCH CAPITAL FUND, INC.
PORTFOLIO SUMMARY
Security Diversification
As a Percentage of Net Assets
As of June 30, 1999
[GRAPHIC OMITTED]
[The following table was depicted as a pie chart in the printed material.]
US Stocks 58.5%
US Bonds 29.6%
Non-US Bonds 3.0%
Non-US Stocks 5.7%
Cash & Cash
Equivalents 3.2%
Sector Representation
As a Percentage of Equities
As of June 30, 1999
[GRAPHIC OMITTED]
[The following table was depicted as a pie chart in the printed material.]
Financial Services 19.4%
Consumer Services 6.3%
Utilities 3.0%
Transportation 5.8%
Capital Goods--Technology 12.0%
Energy 12.1%
Basic Industries 2.3%
Diversified 0.8%
Credit Cyclicals 3.4%
Consumer Staples 14.2%
Capital Goods 11.2%
Consumer Cyclicals 9.5%
================================================================================
Geographic Diversification Percent of
As of June 30, 1999 Net Assets
- --------------------------------------------------------------------------------
United States 89.1%*
- --------------------------------------------------------------------------------
United Kingdom 3.4
- --------------------------------------------------------------------------------
Bermuda 1.2
- --------------------------------------------------------------------------------
Argentina 1.1
- --------------------------------------------------------------------------------
Switzerland 1.1
- --------------------------------------------------------------------------------
Bahamas 1.1
- --------------------------------------------------------------------------------
Sweden 1.1
- --------------------------------------------------------------------------------
India 0.4
- --------------------------------------------------------------------------------
Mexico 0.3
- --------------------------------------------------------------------------------
Chile 0.3
- --------------------------------------------------------------------------------
Canada 0.3
- --------------------------------------------------------------------------------
South Korea 0.2
- --------------------------------------------------------------------------------
Colombia 0.1
- --------------------------------------------------------------------------------
Panama 0.1
- --------------------------------------------------------------------------------
Turkey 0.1
- --------------------------------------------------------------------------------
Guatemala 0.1
- --------------------------------------------------------------------------------
* Includes investments in short-term securities.
US Common Stock Investments S&P
As of June 30, 1999 Fund 500*
- --------------------------------------------------------------------------------
Average Capitalization (in billions) $33.8 $22.4
- --------------------------------------------------------------------------------
Price/Book Value 5.6 7.2
- --------------------------------------------------------------------------------
Price/Earnings Ratio** 24.3 32.0
- --------------------------------------------------------------------------------
Yield Based on Current Dividend 1.3% 1.2%
- --------------------------------------------------------------------------------
* An unmanaged broad-based index comprised of common stocks.
** Based on 1999 earnings estimates.
Fixed-Income Investments Merrill Lynch
As of June 30, 1999 Fund DOAO Index*
- --------------------------------------------------------------------------------
Duration 5.2 Years 5.4 Years
- --------------------------------------------------------------------------------
Average Maturity 9.0 Years 9.0 Years
- --------------------------------------------------------------------------------
Asset Breakdown:
- --------------------------------------------------------------------------------
Corporates 57.4% 22.1%
- --------------------------------------------------------------------------------
US Treasuries/Agencies 39.1% 47.4%
- --------------------------------------------------------------------------------
Mortgage-Backed 0.6% 30.5%
- --------------------------------------------------------------------------------
International Governments 2.9% --
- --------------------------------------------------------------------------------
* An unmanaged market-weighted corporate, Government and mortgage master
bond index reflecting approximately 97% of total outstanding US bonds.
1
<PAGE>
Merrill Lynch Capital Fund, Inc. June 30, 1999
DEAR SHAREHOLDER
The US stock market continued its powerful advance during the quarter ended June
30, 1999 with the broad market averages reaching new highs at the end of June
and trending toward an unprecedented fifth consecutive year of greater than 20%
returns. In April, there was evidence suggesting that the global economy was on
sounder footing, precipitating a pronounced shift in market leadership away from
the large-capitalization growth sector toward the more economically sensitive
value sector.
Continued strength in the US economy, as evidenced by the +4.3% rate of first
quarter gross domestic product growth, falling European interest rates,
incipient recoveries in Asia and some early signs of stabilization in Brazil,
suggested a more hospitable global economic environment. Investors perceived
that such a coordinated global recovery would make corporate earnings growth
more widely available and at significantly lower stock market valuations than
was the case last year. Thus, investors began to move away from consumer and
technology stocks, which had long been at the forefront of the market's advance,
toward industrial, cyclical and commodity stocks, which would be the primary
beneficiaries of a revitalized global economy.
In May, concerns over the sustained rapid pace of economic growth and its
implications for higher inflation produced rising interest rates and falling
stock prices. The continued strength in the consumer sector of the US economy
was augmented by improved conditions in the industrial sector, led by renewed
export market opportunities. This broader growth platform, combined with the
rapid increase in energy prices during 1999, engendered fears of accelerating
inflation and encouraged the Federal Reserve Board to adopt a tightening
monetary policy bias at its Federal Open Market Committee meeting, driving
long-term interest rates to their highest levels in over a year.
Since rising interest rates typically compress equity valuations, stock prices
declined accordingly, particularly in those market sectors most sensitive to
interest rate movements such as financials, technology and growth. In June,
positive Federal Reserve Board actions, further evidence of resurgent global
growth and rising expectations for second-quarter profits renewed the market's
advance and propelled the broad market averages to record high levels. The
Federal Reserve Board's decision to increase the Federal Funds rate by a mere 25
basis points (0.25%) and to change its bias regarding its future course of
action from tightening to neutral suggested that there would not be further
short-term interest rate hikes for the balance of 1999. In addition, positive
economic news from Japan and other Asian nations suggested a favorable global
economic outlook with positive implications for corporate earnings. Furthermore,
the relative scarcity of second quarter earnings warnings suggested that there
could be more positive surprises for equities. This favorable confluence of
events drove the unmanaged Standard & Poor's 500 (S&P 500) Index to a +7.05%
total return for the three-month period ended June 30, 1999. In contrast,
fixed-income investors, fearing the inflationary implications of strong economic
growth, drove long-term interest rates above the 6% level, resulting in a -
0.92% total return for the unmanaged Merrill Lynch Domestic Bond Master Index
for the June quarter. Cash equivalents provided a +1.17% total return for the
same period as measured by the Merrill Lynch 91-day Treasury Bill Index. Merrill
Lynch Capital Fund, Inc.'s Class A, Class B, Class C and Class D Shares had
total returns of +6.48%, +6.19%, +6.21% and +6.41%, respectively, for the June
quarter. (Fund results shown do not reflect sales charges; results would be
lower if sales charges were included. Complete performance information can be
found on pages 5 and 6 of this report to shareholders.)
Portfolio Matters
While these favorable developments suggest a positive near-term outlook for
equities, we remain concerned about the market's ability to provide significant
appreciation from current levels. Robust fundamental conditions have driven
overall stock market valuations to record high levels, which we believe will
constrain the market's further advance. In our view, these lofty valuations
suggest limited upside potential and offer little room for disappointment.
Expectations for significant stock market appreciation from current levels are
predicated on two possible scenarios, neither of which we support. These
scenarios include a strong acceleration in US corporate profits growth and/or a
continued expansion in valuations from the already record high levels. While S&P
500 corporate profits are expected to grow at a low double-digit rate in 1999,
we believe that intense global competition and limited pricing power will likely
restrain opportunities for growth above
2
<PAGE>
Merrill Lynch Capital Fund, Inc. June 30, 1999
this level. While market valuations could certainly expand further, we believe
it is not appropriate to base investment decisions on such a view.
On the other hand, bonds appear to offer good value with inflation-adjusted
interest rates at historically high levels and inflationary pressures expected
to moderate. We believe the Federal Reserve Board's proactive posture will slow
economic growth and keep inflation in check, offering attractive total return
opportunities in the fixed-income market. As a result, we maintained a
significant weighting in fixed-income securities, with 64.2% of net assets
invested in equities, 32.6% in fixed-income securities and 3.2% in cash
equivalents at June 30, 1999. This compares to 64.1% of net assets in equities,
33.5% in fixed-income securities and 2.4% in cash equivalents as of March 31,
1999.
Within the equity component of the Fund, we continued to adjust our holdings to
seek to enhance quality and better control risk during the quarter. We added
three new investments, increased positions in 12 holdings, reduced positions in
21 holdings, and eliminated eight stocks from the portfolio. Notable among the
new positions was Mellon Bank Corporation, the Pittsburgh-based regional banking
concern, which has dramatically restructured over the last several years and now
generates over 50% of its income from high value, fiduciary businesses such as
asset management, custody and benefits consulting. This enhanced business mix is
expected to drive above-average earnings growth and improved valuation
parameters. The company has moved into an excess capital position and is
generating approximately $600 million per year in free capital. The company
enjoys industry-leading cash returns of 23% - 25% on equity with opportunities
for further improvement driven by changes in its business mix and capital
structure. Selling at 18 times estimated 1999 cash earnings per share of $4.05
and 16 times estimated 2000 cash earnings of $4.50 per share, we believe this
represents an attractive entry price for the shares of this high-quality
company. Continued low double-digit earnings growth and rising returns are
likely to drive valuations higher and generate significant shareholder value. In
contrast, any shortfall in performance would likely drive Mellon into the
ongoing banking industry consolidation. Therefore, we believe the stock
represents a very attractive addition to the Fund.
We also established a position in Xerox Corporation, the document/copier
company, which is committed to transforming itself from a traditional,
stand-alone black and white copier company to a digital, network, color,
services and solutions company for corporate printing and copying needs. Xerox's
management has targeted double-digit top-line growth and mid-to-high teens
earnings per share growth over the next few years driven by new products,
increased equipment and services prices, continued customer outsourcing and a
recovery in emerging markets. Significant cost declines will drive improved
operating margins and enhanced earnings per share growth. Xerox enjoys a solid
financial position with a 36.5% return on equity, an improving trend in return
on capital and interest coverage in excess of seven times. Free cash flow
generation is expected to improve with a renewed emphasis on working capital
management, adding another component to earnings growth. Selling at 19 times
estimated year 2000 earnings per share of $3.20, we believe Xerox offers an
attractive risk/reward profile and represents an attractive addition to the
Fund.
Despite the stock market's record high levels, we continue to identify and
invest in what we perceive as above-average companies whose stocks sell at
below-average valuation levels. We define an above-average company as one that
maintains a strong competitive position, earns consistently high returns on
capital, is financially sound, generates cash in excess of its internal
reinvestment requirements and is managed by individuals motivated to create
value for shareholders. We define a below-average valuation as one that does not
adequately or accurately reflect what we believe to be the company's underlying
intrinsic value. On average, the stocks held in Merrill Lynch Capital Fund, Inc.
have generated comparable returns on shareholders' equity and have stronger
balance sheets while offering faster earnings growth than the average company,
as measured by the S&P 500. However, these same stocks sell at an average price
to earnings ratio of 24.3 times estimated 1999 earnings per share versus to 32.1
times for the S&P 500, at 5.6 times current book value per share versus 7.2
times for the S&P 500, and provide an above-average dividend yield. We believe
this formula will provide superior risk-adjusted equity returns over time.
We eliminated our position in Sears, Roebuck & Co., the department store
retailer, which, despite
3
<PAGE>
Merrill Lynch Capital Fund, Inc. June 30, 1999
repeated restructuring and merchandise repositioning strategies, has been unable
to generate consistent sales growth. Poor customer perception, competitive
market share gains and tighter credit policies have contributed to these
disappointing results. While the shares remain statistically inexpensive, we
believe the company's ability to create shareholder value is severely
constrained. We consequently decided to eliminate our position and redeploy
proceeds into what we view as more attractive investment opportunities.
We also sold our position in Novartis SA, the Swiss pharmaceutical company.
Despite the stock's attractive valuation parameters, the lack of any near-term
momentum in the company's core drug business, ongoing problems in the
agricultural sector and the company's unwillingness or inability to redeploy its
enormous cash position encouraged us to sell the stock and to use the proceeds
for what we view as more attractive investment opportunities.
Within the fixed-income portion of the portfolio, our decision to maintain an
average duration of 5.2 years proved beneficial as domestic interest rates rose
sharply for the second consecutive quarter. We further enhanced the liquidity of
our holdings by reducing our position in foreign government securities and
high-yield current bonds from 4.5% and 8.1% of fixed-income assets,
respectively, at March 31, 1999 to 2.9% and 7.0%, respectively, at June 30,
1999. We increased our position in investment-grade corporate bonds from 49.4%
to 50.4% and our position in US Government securities from 37.4% of fixed-income
assets to 39.1%. Our position in mortgage-backed securities remained unchanged
at 0.6% of fixed-income assets. As a result of these transactions, the average
quality of our bonds rose slightly from A2/A+ to A1/A+, while the average yield
to maturity increased by 34 basis points to 7.20%.
In Conclusion
We appreciate your investment in Merrill Lynch Capital Fund, Inc., and we look
forward to sharing our investment outlook and strategies with you in our next
report to shareholders.
Sincerely,
/s/ Terry K. Glenn
Terry K. Glenn
President and Director
/s/ Kurt Schansinger
Kurt Schansinger
Senior Vice President and Senior Portfolio Manager
August 3, 1999
4
<PAGE>
Merrill Lynch Capital Fund, Inc. June 30, 1999
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
"Average Annual 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
<TABLE>
<CAPTION>
Ten Years/
12 Month 3 Month Since Inception
Total Return Total Return Total Return
============================================================================================
<S> <C> <C> <C>
ML Capital Fund, Inc. Class A Shares* + 6.66% + 6.48% +248.00%
- --------------------------------------------------------------------------------------------
ML Capital Fund, Inc. Class B Shares* + 5.59 + 6.19 +214.28
- --------------------------------------------------------------------------------------------
ML Capital Fund, Inc. Class C Shares* + 5.57 + 6.21 + 96.84
- --------------------------------------------------------------------------------------------
ML Capital Fund, Inc. Class D Shares* + 6.42 + 6.41 +104.14
- --------------------------------------------------------------------------------------------
Dow Jones Industrial Average** +24.64 +12.52 +472.35/+203.27
- --------------------------------------------------------------------------------------------
Standard & Poor's 500 Index** +22.76 + 7.05 +458.93/+224.09
============================================================================================
</TABLE>
* Investment results shown do not reflect sales charges; results shown 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 ten-year/since inception periods
are for ten years for Class A & Class B Shares and from 10/21/94 for Class
C & Class D Shares.
** An unmanaged broad-based index comprised of common stocks. Ten years/since
inception total returns are for ten years and from 10/21/94, respectively.
5
<PAGE>
Merrill Lynch Capital Fund, Inc. June 30, 1999
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)
[GRAPHIC OMITTED]
[The following table was depicted as a mountain chart in the printed material.]
A mountain chart depicting the growth of an investment in the Fund's Class A
Shares from $947.50 on November 8, 1973 to $23,021.31 on June 30, 1999.
Average Annual Total Return
% Return Without % Return With
Sales Charge Sales Charge**
================================================================================
Class A Shares*
================================================================================
Year Ended 6/30/99 + 6.66% + 1.06%
- --------------------------------------------------------------------------------
Five Years Ended 6/30/99 +16.24 +15.00
- --------------------------------------------------------------------------------
Ten Years Ended 6/30/99 +13.28 +12.67
- --------------------------------------------------------------------------------
* Maximum sales charge is 5.25%.
** Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
================================================================================
Class B Shares*
================================================================================
Year Ended 6/30/99 + 5.59% + 1.59%
- --------------------------------------------------------------------------------
Five Years Ended 6/30/99 +15.06 +15.06
- --------------------------------------------------------------------------------
Ten Years Ended 6/30/99 +12.13 +12.13
- --------------------------------------------------------------------------------
* Maximum contingent deferred sales charge is 4% and is reduced to 0% after
4 years.
** Assuming payment of applicable contingent deferred sales charge.
================================================================================
% Return % Return
Without CDSC With CDSC**
================================================================================
Class C Shares*
================================================================================
Year Ended 6/30/99 + 5.57% + 4.57%
- --------------------------------------------------------------------------------
Inception (10/21/94)
through 6/30/99 +15.53 +15.53
- --------------------------------------------------------------------------------
* 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*
================================================================================
Year Ended 6/30/99 + 6.42% + 0.83%
- --------------------------------------------------------------------------------
Inception (10/21/94)
through 6/30/99 +16.43 +15.10
- --------------------------------------------------------------------------------
* Maximum sales charge is 5.25%.
** Assuming maximum sales charge.
6
<PAGE>
Merrill Lynch Capital Fund, Inc. June 30, 1999
SCHEDULE OF INVESTMENTS
<TABLE>
<CAPTION>
Shares Percent of
Industries Held Common Stocks Cost Value Net Assets
====================================================================================================================================
<C> <C> <S> <C> <C> <C>
Aerospace 2,500,000 Lockheed Martin Corporation $ 117,416,283 $ 93,125,000 0.9%
====================================================================================================================================
Automobile Parts 2,900,000 Federal-Mogul Corporation 132,309,674 150,800,000 1.4
====================================================================================================================================
Banking 1,800,000 The Chase Manhattan Corporation 82,772,176 155,925,000 1.5
====================================================================================================================================
Banking & Financial 3,000,000 Mellon Bank Corporation 109,930,249 109,125,000 1.0
====================================================================================================================================
Building Materials 5,000,000 Masco Corporation 82,696,370 144,375,000 1.4
3,000,000 The Sherwin-Williams Company 83,094,100 83,250,000 0.8
-------------- -------------- ----
165,790,470 227,625,000 2.2
====================================================================================================================================
Chemicals 2,250,000 E.I. du Pont de Nemours and Company 120,883,421 153,703,125 1.5
2,500,000 Monsanto Company 105,763,188 98,593,750 0.9
-------------- -------------- ----
226,646,609 252,296,875 2.4
====================================================================================================================================
Computer Software 1,000,000 Computer Associates International, Inc. 31,917,365 55,000,000 0.5
====================================================================================================================================
Consumer Products 3,000,000 Kimberly-Clark Corporation 148,809,666 171,000,000 1.6
====================================================================================================================================
Diversified 2,000,000 Corning Incorporated 74,024,064 140,250,000 1.3
Companies 2,000,000 GenCorp Inc. 58,220,920 50,500,000 0.5
3,000,000 United Technologies Corporation 50,687,815 215,062,500 2.0
1,750,000 Varian Medical Systems, Inc. 42,527,430 44,187,500 0.4
2,000,000 Varian Semiconductor Equipment Associates, Inc. 31,185,914 34,250,000 0.3
-------------- -------------- ----
256,646,143 484,250,000 4.5
====================================================================================================================================
Electrical Equipment 1,100,000 General Electric Company 28,396,494 124,300,000 1.2
2,650,000 Rockwell International Corporation 117,207,271 160,987,500 1.5
-------------- -------------- ----
145,603,765 285,287,500 2.7
====================================================================================================================================
Financial Services 1,500,000 Federal National Mortgage Association 40,716,335 102,562,500 1.0
====================================================================================================================================
Food & Beverage 3,500,000 Diageo PLC (ADR)* 156,391,175 150,500,000 1.4
2,300,000 McCormick & Company Incorporated 74,718,410 72,593,750 0.7
65,000 Nestle SA (Registered Shares) 68,163,280 117,257,036 1.1
-------------- -------------- ----
299,272,865 340,350,786 3.2
====================================================================================================================================
Foods 1,800,000 H.J. Heinz Company 91,252,913 90,225,000 0.9
====================================================================================================================================
Footwear 1,500,000 Nike, Inc. (Class B) 65,618,533 94,968,750 0.9
====================================================================================================================================
Information 1,900,000 Xerox Corporation 113,228,508 112,218,750 1.1
Processing
====================================================================================================================================
Information Systems 3,000,000 Reynolds & Reynolds Company (Class A) 60,661,921 69,937,500 0.7
====================================================================================================================================
Insurance 3,000,000 The Allstate Corporation 53,093,756 107,625,000 1.0
1,150,000 American International Group, Inc. 37,190,221 134,621,875 1.3
5,250,000 Citigroup Inc. 42,764,113 249,375,000 2.4
4,400,000 Fremont General Corporation 42,145,143 83,050,000 0.8
2,500,000 Horace Mann Educators Corporation 43,202,941 67,968,750 0.6
3,000,000 ITT Industries, Inc. 104,812,452 114,375,000 1.1
4,300,000 Provident Companies, Inc. 95,751,056 172,000,000 1.6
2,200,000 XL Capital Ltd. (Class A) 60,594,939 124,300,000 1.2
-------------- -------------- ----
479,554,621 1,053,315,625 10.0
====================================================================================================================================
</TABLE>
Merrill Lynch Capital Fund, Inc. June 30, 1999
SCHEDULE OF INVESTMENTS (continued)
<TABLE>
<CAPTION>
Shares Percent of
Industries Held Common Stocks Cost Value Net Assets
====================================================================================================================================
<C> <C> <S> <C> <C> <C>
Leisure/Hotels 3,250,000 Carnival Corporation $ 47,123,859 $ 157,625,000 1.5%
3,700,000 Harrah's Entertainment, Inc. 67,109,660 81,400,000 0.8
2,500,000 Sun International Hotels Ltd. 99,267,368 111,875,000 1.1
-------------- -------------- ----
213,500,887 350,900,000 3.4
====================================================================================================================================
Machinery & 1,000,000 SPX Corporation 58,441,924 83,500,000 0.8
Machine Tools
====================================================================================================================================
Multimedia 1,500,000 Reuters Group PLC (ADR)* 118,522,153 121,500,000 1.2
====================================================================================================================================
Natural Gas 4,200,000 The Coastal Corporation 96,041,889 168,000,000 1.6
3,400,000 El Paso Energy Corporation 83,910,541 119,637,500 1.1
6,000,000 The Williams Companies, Inc. 54,549,827 255,375,000 2.4
-------------- -------------- ----
234,502,257 543,012,500 5.1
====================================================================================================================================
Oil -- Integrated 3,500,000 Unocal Corporation 128,846,079 138,687,500 1.3
====================================================================================================================================
Oil -- Service 3,000,000 Halliburton Company 85,879,664 135,750,000 1.3
====================================================================================================================================
Pharmaceuticals 1,400,000 American Home Products Corporation 81,935,905 80,500,000 0.8
1,500,000 Glaxo Wellcome PLC (ADR)* 40,376,196 84,937,500 0.8
-------------- -------------- ----
122,312,101 165,437,500 1.6
====================================================================================================================================
Railroads 4,000,000 Kansas City Southern Industries, Inc. 70,081,981 255,250,000 2.4
2,300,000 Union Pacific Corporation 135,110,114 134,118,750 1.3
-------------- -------------- ----
205,192,095 389,368,750 3.7
====================================================================================================================================
Restaurants 3,750,000 McDonald's Corporation 92,169,597 154,921,875 1.5
====================================================================================================================================
Telecommunications 484,200 Frontier Corporation 16,885,022 28,567,800 0.3
3,750,000 Telefonaktiebolaget LM Ericsson (ADR)* 94,311,376 123,281,250 1.2
-------------- -------------- ----
111,196,398 151,849,050 1.5
====================================================================================================================================
Tires & Rubber 723,000 The Goodyear Tire & Rubber Company 31,512,771 42,521,437 0.4
====================================================================================================================================
Tobacco 2,250,000 Fortune Brands, Inc. 87,015,000 93,093,750 0.9
====================================================================================================================================
Waste Management 3,000,000 Waste Management, Inc. 150,984,576 161,250,000 1.5
====================================================================================================================================
Wireless 2,000,000 Motorola, Inc. 104,696,553 189,500,000 1.8
Communication -- 3,500,000 Nextel Communications, Inc. (Class A) 76,691,509 175,656,250 1.7
Domestic Paging & -------------- -------------- ----
Cellular 181,388,062 365,156,250 3.5
====================================================================================================================================
Total Common Stocks 4,389,611,660 6,744,961,898 64.2
====================================================================================================================================
</TABLE>
8
<PAGE>
Merrill Lynch Capital Fund, Inc. June 30, 1999
SCHEDULE OF INVESTMENTS (continued)
<TABLE>
<CAPTION>
Face Percent of
Industries Amount Corporate Bonds Cost Value Net Assets
====================================================================================================================================
<C> <C> <S> <C> <C> <C>
Aerospace Boeing Capital Corporation:
$ 12,500,000 6.44% due 12/20/2004 $ 12,560,000 $ 12,340,250 0.1%
10,000,000 6.18% due 3/15/2005 10,000,000 9,344,290 0.1
------------ ------------ ----
22,560,000 21,684,540 0.2
====================================================================================================================================
Auto & Truck 14,000,000 Cummins Engine, 6.75% due 2/15/2007 14,016,000 13,134,940 0.1
====================================================================================================================================
Automotive Hertz Corp.:
25,000,000 6.70% due 6/15/2002 24,815,300 25,056,000 0.2
13,000,000 6% due 1/15/2003 12,891,670 12,725,570 0.1
15,000,000 6.25% due 3/15/2009 14,857,500 13,976,550 0.1
20,000,000 Hyundai Motor Co., Ltd., 7.60% due 7/15/2007 19,916,100 17,600,000 0.2
------------ ------------ ----
72,480,570 69,358,120 0.6
====================================================================================================================================
Banking 25,000,000 Banco Nacional de Commercio Exterior SNC,
7.25% due 2/02/2004 23,502,700 22,562,500 0.2
12,000,000 Banco Rio de la Plata, 8.75% due 12/15/2003 12,144,388 11,160,000 0.1
29,000,000 Bank of Boston Corporation, 6.625% due 12/01/2005 27,575,520 28,357,650 0.3
BankAmerica Corporation:
15,000,000 6.875% due 6/01/2003 14,149,050 15,275,100 0.1
30,000,000 6.75% due 9/15/2005 29,591,750 29,788,500 0.3
The Chase Manhattan Corporation:
14,000,000 6.50% due 8/01/2005 13,582,660 13,850,200 0.1
15,000,000 6.25% due 1/15/2006 13,892,250 14,595,300 0.1
20,000,000 First Security Corp., 7% due 7/15/2005 19,803,850 19,775,500 0.2
30,000,000 First Union Corp., 6.55% due 10/15/2035 29,953,350 29,712,300 0.3
22,500,000 Firstbank Puerto Rico, 7.625% due 12/20/2005 21,896,655 21,303,968 0.2
Household Bank:
20,000,000 6.875% due 3/17/2003 19,886,200 20,049,120 0.2
13,300,000 6.50% due 7/15/2003 13,259,673 13,124,307 0.1
25,500,000 PNC Funding Corp., 6.125% due 9/01/2003 24,922,025 24,859,950 0.2
20,000,000 People's Bank-- Bridgeport, 7.20% due 12/01/2006 19,956,700 18,700,000 0.2
26,000,000 Provident Bank, 6.375% due 1/15/2004 25,287,430 25,405,900 0.2
Union Planters Corp.:
20,000,000 6.25% due 11/01/2003 18,756,100 19,539,400 0.2
12,500,000 6.75% due 11/01/2005 12,001,875 12,192,750 0.1
------------ ------------ ----
340,162,176 340,252,445 3.1
====================================================================================================================================
Beverages 10,000,000 Panamerican Beverages Inc., 7.25% due 7/01/2009 10,037,500 8,362,500 0.1
====================================================================================================================================
Building Materials 10,000,000 Armstrong World, 6.50% due 8/15/2005 9,980,400 9,581,000 0.1
====================================================================================================================================
Chemicals Airgas Inc.:
8,000,000 7.15% due 9/17/2001 7,917,840 8,070,240 0.1
13,000,000 7.14% due 3/08/2004 12,952,100 11,927,799 0.1
38,000,000 Equistar Chemicals LP, 6.50% due 2/15/2006 36,366,455 34,222,952 0.3
10,000,000 Monsanto Company, 5.75% due 12/01/2005 9,973,500 9,426,720 0.1
40,000,000 Union Carbide Corp., 6.79% due 6/01/2025 40,292,500 39,816,400 0.4
------------ ------------ ----
107,502,395 103,464,111 1.0
====================================================================================================================================
</TABLE>
9
<PAGE>
Merrill Lynch Capital Fund, Inc. June 30, 1999
SCHEDULE OF INVESTMENTS (continued)
<TABLE>
<CAPTION>
Face Percent of
Industries Amount Corporate Bonds Cost Value Net Assets
====================================================================================================================================
<C> <C> <S> <C> <C> <C>
Electronics Tandy Corporation:
$ 20,000,000 6.125% due 1/15/2003 $ 19,971,600 $ 19,756,400 0.2%
15,000,000 6.95% due 9/01/2007 14,944,120 14,455,950 0.1
------------ ------------ ----
34,915,720 34,212,350 0.3
====================================================================================================================================
Energy 10,000,000 Occidental Petroleum Corp. (MOPPRS),
6.40% due 4/01/2013 9,815,800 9,746,420 0.1
====================================================================================================================================
Finance General Motors Acceptance Corp.:
40,000,000 5.625% due 2/15/2001 39,453,450 39,612,000 0.4
30,000,000 5.35% due 12/07/2001 30,000,000 29,302,830 0.3
30,000,000 5.48% due 12/16/2002 30,000,000 29,068,800 0.3
10,000,000 6.85% due 6/17/2004 9,997,100 10,073,300 0.1
15,000,000 Household Finance Corp., 6% due 5/01/2004 14,983,450 14,533,545 0.1
------------ ------------ ----
124,434,000 122,590,475 1.2
====================================================================================================================================
Financial Leasing GATX Capital Corporation:
25,000,000 6.875% due 11/01/2004 24,938,000 23,982,000 0.2
25,000,000 6.69% due 11/30/2005 24,984,750 23,903,750 0.2
XTRA Inc.:
20,000,000 6.68% due 11/30/2001 20,000,000 19,904,520 0.2
3,000,000 6.50% due 1/15/2004 2,988,330 2,933,250 0.0
------------ ------------ ----
72,911,080 70,723,520 0.6
====================================================================================================================================
Financial -- Other 14,000,000 Case Credit Corporation, 5.95% due 8/01/2000 13,988,380 13,923,210 0.1
35,000,000 Ford Motor Credit Company, 5.75% due 2/23/2004 34,918,790 33,719,665 0.3
40,000,000 International Lease Finance Corp.,
5.64% due 4/01/2002 39,838,800 39,048,000 0.4
------------ ------------ ----
88,745,970 86,690,875 0.8
====================================================================================================================================
Financial Finova Capital Corp.:
Services 15,000,000 5.99% due 1/10/2003 14,976,450 14,624,400 0.1
25,000,000 5.98% due 1/15/2003 24,960,500 24,350,575 0.2
10,000,000 6.42% due 11/19/2003 10,094,400 9,769,900 0.1
20,000,000 McDonnell Douglas Finance Corp.,
6.965% due 9/12/2005 20,049,200 19,901,780 0.2
15,000,000 Morgan Stanley Group, Inc., 5.75% due 2/15/2001 14,986,350 14,865,345 0.1
13,000,000 Norwest Financial, Inc., 6.625% due 7/15/2004 13,000,000 12,971,660 0.1
10,000,000 Salomon, Inc., 6.75% due 2/15/2003 9,804,000 10,023,100 0.1
Salomon Smith Barney Holdings, Inc.:
25,000,000 6.625% due 7/01/2002 24,994,000 25,194,000 0.2
20,000,000 7% due 3/15/2004 19,951,800 20,146,280 0.2
5,000,000 6.375% due 10/01/2004 5,104,400 4,934,650 0.0
------------ ------------ ----
157,921,100 156,781,690 1.3
====================================================================================================================================
Food & Tobacco Nabisco, Inc.:
21,500,000 6.125% due 2/01/2033 21,405,450 20,896,280 0.2
20,000,000 6.375% due 2/01/2035 19,939,200 19,151,400 0.2
------------ ------------ ----
41,344,650 40,047,680 0.4
====================================================================================================================================
</TABLE>
10
<PAGE>
Merrill Lynch Capital Fund, Inc. June 30, 1999
SCHEDULE OF INVESTMENTS (continued)
<TABLE>
<CAPTION>
Face Percent of
Industries Amount Corporate Bonds Cost Value Net Assets
====================================================================================================================================
<C> <C> <S> <C> <C> <C>
Hospital Medpartners, Inc.:
Management $ 29,125,000 6.875% due 9/01/2000 $ 28,915,910 $ 27,231,875 0.3%
5,500,000 7.375% due 10/01/2006 4,886,570 4,798,750 0.0
------------ ------------ ----
33,802,480 32,030,625 0.3
====================================================================================================================================
Industrial 20,000,000 Browning-Ferris Industries, Inc., 6.375%
due 1/15/2008 19,627,200 16,599,000 0.2
Interface, Inc.:
4,000,000 9.50% due 11/15/2005 3,885,000 4,140,000 0.0
10,000,000 7.30% due 4/01/2008 9,934,520 9,131,760 0.1
20,000,000 Reliance Industries Ltd., 8.25% due 1/15/2027 19,526,999 17,750,000 0.2
20,000,000 Tosco Corporation, 7.625% due 5/15/2006 21,264,300 20,368,000 0.2
Triton Energy Ltd./Corp.:
28,500,000 8.75% due 4/15/2002 28,460,180 27,787,500 0.3
1,500,000 9.25% due 4/15/2005 1,473,750 1,464,570 0.0
15,000,000 United Refining Co., 10.75% due 6/15/2007 15,000,000 10,987,500 0.1
20,000,000 Williams Companies Inc., 6.625% due 11/15/2004 19,908,000 19,746,800 0.2
40,000,000 Williams Holdings of Delaware, Inc.,
6.25% due 2/01/2006 39,791,600 38,064,000 0.4
------------ ------------ ----
178,871,549 166,039,130 1.7
====================================================================================================================================
Information 37,500,000 Reynolds & Reynolds Company, 6.12% due
Systems 3/02/2001 37,500,000 36,750,000 0.4
====================================================================================================================================
Machinery FMC Corp.:
10,000,000 7.125% due 11/25/2002 10,000,000 9,829,950 0.1
20,000,000 6.75% due 5/05/2005 19,890,200 18,603,980 0.2
22,500,000 Harris Corporation, 6.375% due 8/15/2002 22,461,850 22,172,400 0.2
------------ ------------ ----
52,352,050 50,606,330 0.5
====================================================================================================================================
Media/ 15,000,000 News America Inc., 6.75% due 1/09/2038 15,000,000 13,981,950 0.1
Publishing
====================================================================================================================================
Miscellaneous 20,000,000 Morgan Stanley, Dean Witter, Discover & Co.,
Materials & 5.625% due 1/20/2004 19,061,600 19,276,800 0.2
Commodities
====================================================================================================================================
Natural Gas -- Enron Corp.:
Pipelines 30,000,000 6.75% due 7/01/2005 29,387,285 29,443,500 0.3
20,000,000 6.40% due 7/15/2006 20,036,050 19,255,200 0.2
------------ ------------ ----
49,423,335 48,698,700 0.5
====================================================================================================================================
Natural Gas 27,500,000 The Coastal Corporation, 6.70% due 2/15/2027 27,225,400 26,621,100 0.3
Suppliers
====================================================================================================================================
</TABLE>
11
<PAGE>
Merrill Lynch Capital Fund, Inc. June 30, 1999
SCHEDULE OF INVESTMENTS (continued)
<TABLE>
<CAPTION>
Face Percent of
Industries Amount Corporate Bonds Cost Value Net Assets
====================================================================================================================================
<C> <C> <S> <C> <C> <C>
Oil -- Integrated $ 10,000,000 Compania Naviera Perez Companc
S.A.C.F.I.M.F.A., 9% due 1/30/2004 $ 10,125,000 $ 9,275,000 0.1%
11,500,000 Giant Industries, Inc., 9% due 9/01/2007 11,368,750 10,465,000 0.1
Occidental Petroleum Corp.:
18,375,000 6.24% due 11/24/2000 18,135,306 18,307,196 0.2
25,000,000 6.50% due 4/01/2005 24,658,435 24,129,000 0.2
20,000,000 Perez Companc SA, 8.125% due 7/15/2007 19,701,880 17,000,000 0.2
10,000,000 Union Oil of California, 6.11% due 2/17/2004 10,000,000 9,713,280 0.1
23,250,000 Union Texas Petroleum Holdings, Inc., 6.70% 23,190,070 23,304,963 0.2
due 11/18/2002
20,000,000 YPF Sociedad Anonima, 8% due 2/15/2004 18,334,375 19,480,200 0.2
------------ ------------ ----
135,513,816 131,674,639 1.3
====================================================================================================================================
Oil Field 21,000,000 R & B Falcon Corporation, 6.75% due 4/15/2005 20,491,300 17,640,000 0.2
Equipment
====================================================================================================================================
Paper & Forest Boise Cascade Corporation:
Products 10,000,000 7.35% due 10/11/2004 10,316,700 9,535,700 0.1
20,000,000 7.66% due 5/27/2005 20,000,000 19,161,000 0.2
20,000,000 Champion Enterprises Inc., 7.625% due 5/15/2009 19,859,800 19,264,260 0.2
25,000,000 Champion International Corp.,
6.65% due 12/15/2037 25,000,000 24,102,000 0.2
------------ ------------ ----
75,176,500 72,062,960 0.7
====================================================================================================================================
Real Estate 10,000,000 Franchise Finance Corp. of America, 6.95%
Investment Trusts due 8/29/2007 10,000,000 8,874,690 0.1
====================================================================================================================================
Telecommunications 10,000,000 Pacific Telecom, Inc., 6.625% due 10/20/2005 10,000,000 9,577,190 0.1
20,000,000 Worldcom Inc., 6.40% due 8/15/2005 20,077,050 19,566,000 0.2
------------ ------------ ----
30,077,050 29,143,190 0.3
====================================================================================================================================
Tires & Rubber 40,000,000 The Goodyear Tire & Rubber Company, 6.625%
due 12/01/2006 39,840,000 38,130,400 0.4
====================================================================================================================================
Transportation 10,000,000 Continental Airlines, 8% due 12/15/2005 10,000,000 9,545,400 0.1
27,750,000 Kansas City Southern Industries, Inc.,
7% due 12/15/2025 26,709,375 24,211,043 0.2
Northwest Airlines, Inc.:
20,000,000 7.625% due 3/15/2005 19,390,850 18,298,600 0.2
5,000,000 7.875% due 3/15/2008 4,473,700 4,350,050 0.0
Ryder Systems, Inc.:
9,000,000 6.30% due 7/21/2003 9,000,000 8,706,285 0.1
20,000,000 6.50% due 5/15/2005 19,960,600 19,427,600 0.2
17,000,000 Transportacion Maritima Mexicana, SA de CV,
10% due 11/15/2006 17,152,730 12,622,500 0.1
12,500,000 Union Pacific Corporation, 6.39% due 11/01/2004 12,500,000 12,113,125 0.1
------------ ------------ ----
119,187,255 109,274,603 1.0
====================================================================================================================================
Travel & Lodging Royal Caribbean Cruises Ltd.:
10,000,000 7.125% due 9/18/2002 9,900,050 10,048,900 0.1
17,500,000 7.25% due 8/15/2006 17,549,580 17,289,300 0.2
------------ ------------ ----
27,449,630 27,338,200 0.3
====================================================================================================================================
</TABLE>
12
<PAGE>
Merrill Lynch Capital Fund, Inc. June 30, 1999
SCHEDULE OF INVESTMENTS (continued)
<TABLE>
<CAPTION>
Face Percent of
Industries Amount Corporate Bonds Cost Value Net Assets
====================================================================================================================================
<C> <C> <S> <C> <C> <C>
Utilities -- $ 33,000,000 Empresa Nacional de Electricidad SA (Endesa),
Electric, Gas & 7.325% due 2/01/2037 $ 33,065,750 $ 30,061,581 0.3%
Water 23,000,000 Tata Electric Co., 8.50% due 8/19/2017 21,998,830 18,871,845 0.2
-------------- -------------- ---
55,064,580 48,933,426 0.5
====================================================================================================================================
Yankee Corporates 15,000,000 Enersis SA, 6.60% due 12/01/2026 14,350,102 14,029,650 0.1
====================================================================================================================================
Total Corporate Bonds 2,047,214,008 1,977,737,059 18.8
====================================================================================================================================
Collateralized Mortgage Obligations**
====================================================================================================================================
Federal Home Loan Mortgage Corporation:
2,617,634 6.50% due 5/15/2008 2,501,477 2,599,625 0.0
5,000,000 7% due 8/15/2008 4,762,500 4,984,350 0.0
13,000,000 6% due 2/15/2011 12,020,937 12,150,060 0.1
====================================================================================================================================
Total Collateralized Mortgage Obligations 19,284,914 19,734,035 0.1
====================================================================================================================================
Foreign Government Obligations
====================================================================================================================================
10,000,000 Province of Mendoza, 10% due 9/04/2007 9,931,700 6,600,000 0.1
Republic of Argentina:
59,500,000 8.75% due 7/10/2002 55,708,750 48,492,500 0.5
9,300,000 5.938% due 3/31/2005+** 8,490,900 7,946,850 0.1
10,000,000 Republic of Colombia, 7.625% due 2/15/2007 9,046,875 7,537,500 0.1
12,500,000 Republic of Guatemala, 8.50% due 8/03/2007 12,563,500 11,284,288 0.1
15,000,000 Republic of Panama, 8.25% due 4/22/2008 14,923,200 13,050,000 0.1
4,000,000 Republic of Turkey, 12.375% due 6/15/2009 3,957,720 3,885,000 0.0
====================================================================================================================================
Total Foreign Government Obligations 114,622,645 98,796,138 1.0
====================================================================================================================================
US Government Obligations
====================================================================================================================================
US Treasury Bonds:
165,000,000 6.25% due 8/15/2023 153,347,266 165,773,850 1.6
50,000,000 6% due 2/15/2026 52,653,906 48,789,000 0.5
60,000,000 5.50% due 8/15/2028 55,982,031 54,937,200 0.5
35,000,000 US Treasury Inflation Indexed Note,
3.625% due 1/15/2008 4,855,937 34,985,410 0.3
US Treasury Notes:
10,000,000 5.50% due 5/31/2003 9,846,875 9,923,400 0.1
50,000,000 4.25% due 11/15/2003 48,373,438 47,211,000 0.4
50,000,000 6.50% due 5/15/2005 54,742,188 51,531,000 0.5
560,000,000 5.875% due 11/15/2005 543,439,919 560,000,000 5.3
375,000,000 5.625% due 2/15/2006 376,241,016 369,375,000 3.5
====================================================================================================================================
Total US Government Obligations 1,329,482,576 1,342,525,860 12.7
====================================================================================================================================
</TABLE>
13
<PAGE>
Merrill Lynch Capital Fund, Inc. June 30, 1999
SCHEDULE OF INVESTMENTS (continued)
<TABLE>
<CAPTION>
Face Percent of
Industries Amount Short-Term Investments Cost Value Net Assets
====================================================================================================================================
<C> <C> <S> <C> <C> <C>
Commercial $123,508,000 General Electric Capital Corp., 5.75%
Paper*** due 7/01/1999 $ 123,508,000 $ 123,508,000 1.2%
====================================================================================================================================
Total Short-Term Investments 123,508,000 123,508,000 1.2
====================================================================================================================================
Total Investments $8,023,723,803 10,307,262,990 98.0
==============
Other Assets Less Liabilities 206,946,746 2.0
--------------- -----
Net Assets $10,514,209,736 100.0%
=============== =====
====================================================================================================================================
Net Asset Value: Class A -- Based on net assets of $3,696,722,204 and
99,111,477 shares of beneficial
interest outstanding $ 37.30
===============
Class B -- Based on net assets of $4,664,565,200 and
128,262,111 shares of
beneficial interest outstanding $ 36.37
===============
Class C -- Based on net assets of $481,713,050 and
13,411,765 shares of beneficial
interest outstanding $ 35.92
===============
Class D -- Based on net assets of $1,671,209,282 and
44,918,880 shares of beneficial
interest outstanding $ 37.21
===============
====================================================================================================================================
</TABLE>
* American Depositary Receipts (ADR).
** Subject to principle paydowns.
*** Commercial Paper is traded on a discount basis; the interest rate shown
reflects the discount rate paid at the time of purchase by the Fund.
+ Brady Bonds are securities that have been issued to refinance commercial
bank loans and other debt. The risk associated with these instruments is
the amount of any uncollateralized principal or interest payments since
there is a high default rate of commercial bank loans by countries issuing
these securities.
14
<PAGE>
Merrill Lynch Capital Fund, Inc. June 30, 1999
PORTFOLIO INFORMATION
As of June 30, 1999
Percent of
Ten Largest Common Stock Holdings Net Assets
The Williams Companies, Inc. ......................................... 2.4%
Kansas City Southern Industries, Inc. ................................ 2.4
Citigroup Inc. ....................................................... 2.4
United Technologies Corporation ...................................... 2.0
Motorola, Inc. ....................................................... 1.8
Nextel Communications, Inc. (Class A) ................................ 1.7
Provident Companies, Inc. ............................................ 1.6
Kimberly-Clark Corporation ........................................... 1.6
The Coastal Corporation .............................................. 1.6
Waste Management, Inc. ............................................... 1.5
Percent of
Ten Largest Industries *Net Assets*
Insurance ................................................. 10.0%
Natural Gas ............................................... 5.1
Banking ................................................... 4.6
Diversified Companies ..................................... 4.5
Railroads ................................................. 3.7
Wireless Communication --
Domestic Paging & Cellular .............................. 3.5
Chemicals ................................................. 3.4
Leisure/Hotels ............................................ 3.4
Food & Beverage ........................................... 3.2
Electrical Equipment ...................................... 2.7
* Based on total holdings in common stocks and bonds.
Common Stock Portfolio Changes for the
Quarter Ended June 30, 1999
Additions
H.J. Heinz Company
Mellon Bank Corporation
Xerox Corporation
Deletions
Avnet, Inc.
CarrAmerica Realty Corporation
Fruit of the Loom, Inc. (Class A)
Novartis AG (Registered Shares)
Sears, Roebuck & Co.
Tenet Healthcare Corporation
Tomkins PLC
YPF Sociedad Anonima (ADR)
OFFICERS AND DIRECTORS
Terry K. Glenn, President and Director
Donald Cecil, Director
M. Colyer Crum, Director
Edward H. Meyer, Director
Jack B. Sunderland, Director
J. Thomas Touchton, Director
Fred G. Weiss, Director
Arthur Zeikel, Director
Kurt Schansinger, Senior Vice President and
Portfolio Manager
Walter Cuje, Vice President
Donald C. Burke, Vice President and Treasurer
Thomas D. Jones, III, Secretary
Custodian
The Bank of New York
90 Washington Street, 12th Floor
New York, NY 10286
Transfer Agent
Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 637-3863
15
<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
Capital Fund, Inc.
Box 9011
Princeton, NJ
08543-9011 10252 -- 6/99
[RECYCLE LOGO] Printed on post-consumer recycled paper
