MERRILL LYNCH
PACIFIC FUND, INC.
FUND LOGO
Quarterly Report
September 30, 1995
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.
<PAGE>
Merrill Lynch
Pacific Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
MERRILL LYNCH PACIFIC FUND, INC.
DEAR SHAREHOLDER
Merrill Lynch Pacific Fund, Inc.'s Class A, Class B, Class C and
Class D Shares rose 6.39%, 6.08%, 6.13% and 6.35%, respectively, for
the three-month period ended September 30, 1995. The Fund
outperformed its unmanaged Benchmark Index, which rose 2.99% for the
period. The Fund also outperformed its Benchmark Index year-to-date
1995. (Fund results do not reflect sales charges, and would be lower
if sales charges were included. Complete performance information,
including average annual total returns, can be found on pages 3-6 of
this report to shareholders.)
<PAGE>
During the September quarter, the Japanese stock market rose by 20%,
while the yen declined 15% relative to the US dollar. In contrast,
during the first half of 1995, the Japanese stock market declined by
23% and the yen gained 17% relative to the US dollar. After all this
volatility, the yen is currently at about the same price relative to
the US dollar as it was when 1995 began, while the Japanese stock
market is approximately 8% lower. In US dollar terms, the Japanese
stock market declined 7.34% in the first nine months of 1995.
The Australian stock market has provided a much better return than
the Japanese stock market thus far in 1995, especially for US dollar-
based investors, since the Australian dollar gained 6.5% relative to
the US dollar during the September quarter after declining 8.5% in
the first six months of 1995. For the first nine months of 1995, the
Australian stock market has posted an 8.78% US dollar-based return.
However, among the major markets in which we invest, only the Hong
Kong stock market steadily increased throughout 1995, and was up 18%
as of September month-end.
New Focus for Major Japanese Holdings
In general, the Fund's Japanese stock holdings slightly
underperformed the Tokyo Stock Exchange Index's 20% rise during the
September quarter, with the notable exceptions of Rohm Co., Ltd.
(+43%), Mitsubishi Heavy Industries, Ltd. (+33%), and Canon, Inc.
(+28%). Among the Fund's underperforming holdings were the non-life
insurance stocks, led by Tokio Marine & Fire Insurance Co., Ltd.,
which appreciated only 4% for the quarter. We continue to believe
that Japanese property and casualty insurance stocks are
significantly undervalued, both in terms of earnings and especially
in terms of liquidation value. We continued to gradually add to our
holdings of Japanese non-life insurance companies during the
quarter, and anticipate that they will provide attractive
performances over the longer term.
Despite these additions to the Fund's Japanese property and casualty
insurance holdings, we have undertaken a significant shift in
strategy in the Japanese portion of the portfolio. In the past, our
largest Japanese holdings were largely companies in low growth/slow
growth businesses, whose prospects were chiefly controlled by
conditions within Japan, such as the non-life insurance companies,
along with Toyo Seikan Kaisha, Ltd. and Chudenko Corp. This is no
longer the case. Since we believe that growth prospects are better
for Japanese companies that do much of their business outside of
Japan (compared to Japanese companies with largely domestic-based
businesses), the Fund's Japanese investments are now more
concentrated in companies whose fortunes are more closely tied to
the global economy, and would benefit from likely yen weakening and
an ongoing global economic expansion. Especially important for many
of our Japanese holdings is the continuation of reasonable growth in
electronic component/semiconductor-related businesses. Companies
such as Murata Manufacturing Co., Ltd., Canon, Inc., Rohm Co., Ltd.,
Suzuki Motor Corp., Shin-Etsu Chemical Co., Ltd., and Mitsubishi
Heavy Industries, Ltd. all compete in international markets and thus
are affected by worldwide economic trends. As for all our major
investments, these companies have well above-average profitability
characteristics, below-average stock market valuation measures, and
excellent balance sheets.
<PAGE>
There are several important points shareholders should understand
about our Japanese holdings. First, there are many large industries
in Japan in which we have no exposure and, in some cases, we have
large positions in relatively smaller industries or companies. This
means that the Fund's holdings are not representative of the
Japanese stock market as a whole. Second, our largest Japanese
positions will derive economic benefits if the yen weakens relative
to the US dollar. Third, and most important, is that the portfolio
only has a modest long exposure to the Japanese yen. Therefore, if
the yen strengthens relative to the US dollar, the Fund would
benefit very little, since we have sold some of our yen exposure
forward and have hedged some through the purchase of yen put
options.
We believe that in order for there to be significant improvement in
the Japanese economy, the yen must at least stay stable at
approximately 100 yen/US dollar, and preferably weaken relative to
the dollar. At this time, it appears to us that the Japanese and US
monetary authorities also believe this, and are working together to
ensure that significant yen strength will be short-lived. If the yen
weakens relative to the US dollar, we believe that our Japanese
holdings will perform well, while a stable yen will result in lower,
but still positive, returns. However, if the yen strengthens,
investment results for many of our largest holdings are likely to be
lackluster, at best.
Our Other Markets
We did not change weightings substantially in the other markets.
However, we increased our exposure to Coca-Cola Amatil, Ltd., and it
is now one of our top ten holdings. Coca-Cola Amatil holds the Coca-
Cola bottling franchises for Australia, much of Central and Eastern
Europe, and Indonesia. In Indonesia, Coca-Cola Amatil has such a
compelling long-term growth opportunity that this country alone
should assist materially in providing many years of stable earnings
growth for the company. Unfortunately, the stock's valuation is too
high for us to add more to our investment at this time.
In Hong Kong, we eliminated our investment in Hong Kong
Telecommunications, Ltd. and substantially reduced our position in
China Light & Power Co., Ltd. In our estimation, Hong Kong Telecom
simply did not offer sufficient growth prospects--especially in
light of increased competition in its basic international telephone
business--to justify its current valuation. We believe that once the
People's Republic of China begins to regulate Hong Kong in 1997,
China Light & Power will no longer be able to add capacity at the
rate it has in recent years. In the past, China Light & Power was
able to readily increase fixed-capital investment and thereby its
profits, given the nature of Hong Kong's regulatory regime. If a
more severe regulatory environment unfolds, we foresee that China
Light & Power, while remaining an excellent electric utility with
high-quality earnings, will be on a lower earnings growth path than
it had in the past.
<PAGE>
In part, we used the proceeds from these security sales in Hong Kong
to establish a position in Hutchison Whampoa Limited. We will
discuss this new Hong Kong holding in a future report to
shareholders.
In Conclusion
Given the Fund's current composition, the relationship between the
yen and the US dollar will be an important influence on its
performance. The most positive near-term development would be yen
weakness relative to the US dollar, which would benefit our major
Japanese holdings. Although this development would typically have a
negative effect on the value of the Fund's yen-denominated holdings
when translated into US dollars, we have largely hedged our yen
exposure back into dollars. As a result, the negative impact of a
weakening yen will be limited. Conversely, should the yen appreciate
relative to the US dollar, the Fund would not benefit significantly
because of our present currency hedging strategy.
Nevertheless, we continue to maintain our long-standing investment
discipline within our current strategy. In our judgment, the Fund's
major holdings are more profitable, have better growth prospects,
possess stronger managements and are selling at lower valuations
than the average company in our investment universe. Therefore, we
believe that they will provide superior long-term results relative
to their respective markets.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Stephen I. Silverman)
Stephen I. Silverman
Vice President and Portfolio Manager
<PAGE>
October 27, 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.
* 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 "Performance Summary" and "Average Annual Total
Return" tables on pages 4 and 5.
The "Results of a $1,000 Investment Since Inception--Class A Shares"
chart on page 4 illustrates the performance of a $1,000 investment
in Class A Shares made at the Fund's inception (assuming the maximum
initial sales charge of 5.25%) through September 30, 1995.
"Aggregate Total Return" tables for Class C and Class D Shares are
also presented on page 4. Data for all of the Fund's shares are
presented in the "Recent Performance Results" table on page 6.
<PAGE>
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 September 30, 1995
and for Class C and Class D Shares for the since inception and 3-
month periods ended September 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.
PERFORMANCE DATA (continued)
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 performance of a $1,000 investment in
the Fund's Class A Shares since inception (9/23/76) through 9/30/95.
Beginning and ending values are $947.50 and $16,725.54.
Average Annual Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 9/30/95 + 0.55% - 4.73%
Five Years Ended 9/30/95 +10.90 + 9.71
Ten Years Ended 9/30/95 +16.27 +15.64
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
<PAGE>
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 9/30/95 -0.52% -4.40%
Five Years Ended 9/30/95 +9.77 +9.77
Inception (10/21/88) through 9/30/95 +8.01 +8.01
[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 9/30/95 -0.84% -1.80%
[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 9/30/95 -0.11% -5.35%
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
<PAGE>
PERFORMANCE DATA (continued)
<TABLE>
Performance Summary--Class A Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<C> <C> <C> <C> <C> <C>
9/23/76--12/31/76 $ 9.30 $ 9.81 -- -- + 5.48%
1977 9.81 9.20 -- $0.050 - 5.73
1978 9.20 14.48 $ 0.070 0.020 +58.87
1979 14.48 8.96 3.340 0.120 -23.40
1980 8.96 12.11 -- 0.220 +38.49
1981 12.11 12.78 1.460 0.230 +22.22
1982 12.78 12.07 0.420 0.320 + 0.46
1983 12.07 16.04 0.180 0.290 +38.54
1984 16.04 15.43 0.950 0.090 + 2.92
1985 15.43 19.59 1.380 0.160 +40.96
1986 19.59 34.32 0.190 0.110 +77.78
1987 34.32 16.15 22.154 0.183 +10.77
1988 16.15 19.11 2.064 0.196 +34.38
1989 19.11 20.65 1.042 0.061 +14.49
1990 20.65 16.52 1.668 0.766 - 8.39
1991 16.52 18.34 0.521 0.433 +17.04
1992 18.34 15.80 0.221 0.741 - 8.75
1993 15.80 21.21 -- 0.027 +34.41
1994 21.21 21.12 0.469 0.219 + 2.90
1/1/95--9/30/95 21.12 21.99 -- -- + 4.12
------- ------
Total $36.129 Total $4.236
Cumulative total return as of 9/30/95: +1,665.23%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures assume reinvestment of all dividends and capital gains
distributions at net asset value on the ex-dividend date, and do not
include sales charge; results would be lower if sales charge was
included.
</TABLE>
<PAGE>
<TABLE>
Performance Summary--Class B Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<C> <C> <C> <C> <C> <C>
10/21/88--12/31/88 $17.93 $19.09 $1.034 $0.171 +13.37%
1989 19.09 20.49 1.042 -- +13.39
1990 20.49 16.30 1.668 0.653 - 9.29
1991 16.30 18.01 0.521 0.322 +15.87
1992 18.01 15.34 0.221 0.726 - 9.72
1993 15.34 20.41 -- -- +33.05
1994 20.41 20.27 0.469 0.041 + 1.87
1/1/95--9/30/95 20.27 20.94 -- -- + 3.31
------ ------
Total $4.955 Total $1.913
Cumulative total return as of 9/30/95: +70.78%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures assume reinvestment of all dividends and capital gains
distributions at net asset value on the ex-dividend date, and do not
reflect deduction of any sales charge; results would be lower if
sales charge was deducted.
</TABLE>
PERFORMANCE DATA (concluded)
<TABLE>
Recent Performance Results
<CAPTION>
Market Performance Market Capitalization
In Local Currency/In US Dollars (as of 6/30/95)
3 Month 12 Month In US Dollars % of Total
% Change % Change++ (Billions) (100.0%)
<S> <C> <C> <C> <C>
ML Pacific Fund, Inc. Class A Shares* + 6.39% -0.49%(1)
ML Pacific Fund, Inc. Class B Shares* + 6.08 -0.72(1)
ML Pacific Fund, Inc. Class C Shares* + 6.13 -1.77(1)
ML Pacific Fund, Inc. Class D Shares* + 6.35 -1.11(1)
ML Pacific Fund, Inc. Class A Shares--Total Investment Return* + 6.39 +0.55(2)
ML Pacific Fund, Inc. Class B Shares--Total Investment Return* + 6.08 -0.52(3)
ML Pacific Fund, Inc. Class C Shares--Total Investment Return* + 6.13 -0.84(4)
ML Pacific Fund, Inc. Class D Shares--Total Investment Return* + 6.35 -0.11(5)
Market-Weighted Index** + 2.76(6) -7.58(7)
Benchmark Index*** + 2.99 -6.42
Japan +20.15/+2.81 - 8.80/-8.98 $3,283 79.7%
Australia + 5.88/+12.71 + 5.27/+7.44 207 5.0
Hong Kong + 4.78/+4.86 + 1.31/+1.25 247 6.0
Malaysia - 2.53/-5.39 -11.43/-9.60 204 4.9
Singapore + 0.50/-1.20 -10.37/-6.52 135 3.3
Thailand - 7.21/-8.69 -12.89/-13.27 45 1.1
<PAGE>
<FN>
++Investment results shown for Class C and Class D Shares are since
inception (10/21/94).
(1)Percent change includes reinvestment of $0.469 per share capital
gains distributions.
(2)Percent change includes reinvestment of $0.219 per share ordinary
income dividends and $0.469 per share capital gains distributions.
(3)Percent change includes reinvestment of $0.041 per share ordinary
income dividends and $0.469 per share capital gains distributions.
(4)Percent change includes reinvestment of $0.191 per share ordinary
income dividends and $0.469 per share capital gains distributions.
(5)Percent change includes reinvestment of $0.213 per share ordinary
income dividends and $0.469 per share capital gains distributions.
(6)6/30/95 market weights used in this computation. The Market-
Weighted Index return and individual country returns do not include
dividends.
(7)9/30/94 market weights used in this computation. The Market-
Weighted Index return and individual country returns do not include
dividends.
*Investment results shown do not reflect sales charges; results
shown would be lower if a sales charge was included.
**Unmanaged. The Market-Weighted Index weights the US dollar-
adjusted Pacific Basin stock market returns by the relative market
capitalization of each individual country on the appropriate date.
***Unmanaged. The Benchmark Index weights US dollar-adjusted returns
based on 68% Japan, 7% Australia, 14% Hong Kong, 5% Malaysia, 4%
Singapore and 2% Thailand.
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS
<CAPTION>
Shares Held/ Percent of
Industry Face Amount Investments Cost Value Net Assets
Japanese Securities
<S> <C> <S> <C> <C> <C>
Automobile 4,861,000 Suzuki Motor Corp. $ 51,258,498 $ 52,538,081 3.1%
Beverage 380,000 Chukyo Coca-Cola Bottling Co., Ltd. 5,420,506 3,780,808 0.2
424,000 Hokkaido Coca-Cola Bottling Co., Ltd. 6,399,350 5,482,020 0.3
386,000 Kinki Coca-Cola Bottling Co., Ltd. 7,430,096 4,795,758 0.3
476,000 Mikuni Coca-Cola Bottling Co., Ltd. 8,487,431 5,433,131 0.3
470,000 Sanyo Coca-Cola Bottling Co., Ltd. 7,028,799 6,124,242 0.4
-------------- -------------- ------
34,766,182 25,615,959 1.5
<PAGE>
Capital Goods 10,275,000 Mitsubishi Heavy Industries, Ltd. 72,860,934 78,878,788 4.7
Chemicals 2,403,000 Shin-Etsu Chemical Co., Ltd. 44,008,434 46,603,636 2.8
Consumer YEN 409,000,000 Matsushita Electric Works, Ltd.--
Electronics C.E.W. #8, 2.70% due 5/31/2002 4,543,869 4,792,323 0.3
Containers 2,850,000 Toyo Seikan Kaisha, Ltd. 64,449,755 88,954,545 5.2
Electric 1,260,000 Chudenko Corp. 39,765,129 49,636,364 2.9
Construction 2,299,000 Kinden Corp. 40,928,144 41,103,333 2.4
1,120,000 Taihei Dengyo Kaisha, Ltd. 24,789,475 19,684,849 1.2
-------------- -------------- ------
105,482,748 110,424,546 6.5
Electric Equipment 2,887,000 Murata Manufacturing Co., Ltd. 99,436,707 108,481,212 6.4
2,556,000 NEC Corporation 37,242,833 35,629,091 2.1
923,000 The Nippon Signal Co., Ltd. 13,935,321 6,796,636 0.4
982,000 Rohm Co., Ltd. 39,981,867 62,094,141 3.7
169 Sumitomo Electric Industries,
Ltd., #1 Y (Warrants)(a) 185,351 152,783 0.0
-------------- -------------- ------
190,782,079 213,153,863 12.6
Iron & Steel 475,000 Maruichi Steel Tube, Ltd. 6,023,843 8,972,222 0.5
Office Equipment 4,877,000 Canon, Inc. 76,881,535 87,194,849 5.1
Pharmaceuticals 2,377,000 Sankyo Co., Ltd. 53,325,831 54,262,828 3.2
<PAGE>
Property & Casualty 7,895,000 Dai-Tokyo Fire & Marine
Insurance Insurance Co., Ltd. 47,593,467 53,430,808 3.2
4,492,000 Fuji Fire & Marine Insurance
Co., Ltd. 16,261,457 22,732,242 1.3
6,243,000 Koa Fire & Marine Insurance
Co., Ltd. 37,786,829 35,377,000 2.1
6,030,000 Nichido Fire & Marine Insurance
Co., Ltd. 32,420,399 49,580,000 2.9
4,897,000 Sumitomo Marine & Fire Insurance
Co., Ltd. 43,065,208 37,147,950 2.2
4,550,000 Tokio Marine & Fire Insurance
Co., Ltd. 45,703,327 49,176,768 2.9
-------------- -------------- ------
222,830,687 247,444,768 14.6
Retailing 1,243,000 Ito-Yokado Co., Ltd. 59,932,061 68,804,444 4.1
364,000 Sangetsu Co., Ltd. 8,382,717 8,787,475 0.5
389,000 Senshukai Co., Ltd. 6,280,454 6,483,333 0.4
-------------- -------------- ------
74,595,232 84,075,252 5.0
Total Investments in Japan 1,001,809,627 1,102,911,660 65.1
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued)
<CAPTION>
Shares Held/ Percent of
Industry Face Amount Investments Cost Value Net Assets
Australian Securities
<S> <C> <S> <C> <C> <C>
Food & Beverage 7,542,057 Coca-Cola Amatil, Ltd. $ 36,058,150 $ 56,672,826 3.3%
Leisure 13,447,500 Village Roadshow Ltd. 'A'
(Preferred) 23,429,101 37,575,542 2.2
Paper & Packaging 673,839 AMCOR Ltd. 4,613,224 5,048,122 0.3
Property 5,306,001 Lend Lease Corp. 66,311,678 74,772,336 4.4
US$ 1,500,000 Lend Lease Finance International,
4.75% due 6/01/2003 1,736,250 1,766,250 0.1
-------------- -------------- ------
68,047,928 76,538,586 4.5
Total Investments in Australia 132,148,403 175,835,076 10.3
<PAGE>
Hong Kong Securities
Banking 4,397,094 HSBC Holdings PLC 52,042,272 61,140,264 3.6
Conglomerates 9,045,035 Hutchison Whampoa Limited 46,395,914 49,020,458 2.9
Diversified 3,570,500 Swire Pacific Ltd. 'A' 29,900,950 28,287,087 1.7
Utilities--Electric 5,498,300 China Light & Power Co., Ltd. 26,640,974 28,447,330 1.7
Total Investments in Hong Kong 154,980,110 166,895,139 9.9
Indian Securities
Banking 14,700 SCICI, Ltd. 44,127 16,365 0.0
4,900 SCICI, Ltd. (Rights) 0 0 0.0
-------------- -------------- ------
44,127 16,365 0.0
Broadcast/Media 620,000 Shivalik Projects Ltd. 3,557,823 3,291,065 0.2
Diversified Mutual Fund 1,705,000 Master Plus 1,083,668 641,072 0.0
Financial Services 58,500 Housing Development Finance Corp.
Limited 4,648,969 4,476,777 0.3
Total Investments in India 9,334,587 8,425,279 0.5
Indonesian Securities
Pharmaceuticals 1,634,000 P.T. Kalbe Farma 5,525,626 6,528,786 0.4
Total Investments in Indonesia 5,525,626 6,528,786 0.4
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued)
<CAPTION>
Shares Held/ Percent of
Industry Face Amount Investments Cost Value Net Assets
Malaysian Securities
<S> <C> <S> <C> <C>
Diversified 14,896,800 Sime Darby BHD $ 35,217,136 $ 39,748,531 2.3%
Transportation 3,661,000 Malaysian International Shipping BHD 12,515,710 11,007,786 0.6
Total Investments in Malaysia 47,732,846 50,756,317 2.9
New Zealand Securities
Diversified 36,600,000 Guiness Peat Group PLC 15,917,954 16,607,030 1.0
Total Investments in New Zealand 15,917,954 16,607,030 1.0
Pakistan Securities
Utilities 43,298 Pakistan Telecommunications (GDR)(b) 7,783,681 4,459,694 0.3
Total Investments in Pakistan 7,783,681 4,459,694 0.3
Singaporean Securities
Food 3,600,000 Cerebos Pacific Ltd. 5,153,632 21,534,131 1.3
Transportation 300,000 Singapore Bus Co. Ltd.--Foreign
Registered 1,060,285 1,984,518 0.1
Total Investments in Singapore 6,213,917 23,518,649 1.4
South Korean Securities
Textiles 3,080 Taekwang Industries Co. 716,353 2,125,244 0.1
Total Investments in South Korea 716,353 2,125,244 0.1
<PAGE>
Short-Term Securities
Commercial Paper* US$ 40,000,000 AlliedSignal Inc., 5.74% due
10/03/1995 39,980,867 39,980,867 2.4
43,468,000 General Electric Capital Corp.,
6.45% due 10/02/1995 43,452,424 43,452,424 2.6
30,000,000 Sheffield Receivables Corp., 5.80%
due 10/04/1995 29,980,666 29,980,666 1.8
Total Investments in Short-Term
Securities 113,413,957 113,413,957 6.8
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded)
<CAPTION>
Face Premiums Percent of
Amount Investments Paid Value Net Assets
Currency Put Options Purchased
<S> <C> <S> <C> <C> <C>
YEN 323,000,000 Japanese Yen expiring January 1996
at YEN 102 $ 5,963,200 $ 5,297,200 0.3%
156,010,000 Japanese Yen expiring January 1996
at YEN 102 2,752,016 2,711,454 0.2
120,848,684 Japanese Yen expiring February 1996
at YEN 102 1,836,900 2,380,719 0.1
275,641,027 Japanese Yen expiring March 1996 at
YEN 92 6,450,000 20,562,821 1.2
Total Currency Put Options Purchased 17,002,116 30,952,194 1.8
Total Investments $1,512,579,177 1,702,429,025 100.5
==============
Unrealized Depreciation on Forward Foreign Exchange Contracts++ (11,310,659) (0.7)
Other Assets Less Liabilities 3,756,996 0.2
-------------- ------
Net Assets $1,694,875,362 100.0%
============== ======
<PAGE>
Net Asset Class A--Based on net assets of $591,487,449 and
Value: 26,898,202 shares outstanding $ 21.99
==============
Class B--Based on net assets of $960,373,549 and
45,855,243 shares outstanding $ 20.94
==============
Class C--Based on net assets of $32,444,472 and
1,560,838 shares outstanding $ 20.79
==============
Class D--Based on net assets of $110,569,892 and
5,038,361 shares outstanding $ 21.95
==============
<FN>
(a)Warrants entitle the Fund to purchase a predetermined number of
shares of Common Stock. The purchase price and number of shares are
subject to adjustment under certain conditions until the expiration
date.
(b)GDR--Global Depositary Receipts.
*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.
++Forward foreign exchange contracts as of September 30, 1995 were
as follows:
Expiration Unrealized
Foreign Currency Sold Date Depreciation
YEN 32,654,621,628 July 1996 $(11,310,659)
Total Unrealized Depreciation on Forward
Foreign Exchange Contracts
(US$ Commitment--$333,359,372) $(11,310,659)
=============
</TABLE>
PORTFOLIO INFORMATION
<PAGE>
For the Quarter Ended September 30, 1995
Percent of
Ten Largest Equity Holdings Net Assets
Murata Manufacturing Co., Ltd. 6.4%
Toyo Seikan Kaisha, Ltd. 5.2
Canon, Inc. 5.1
Mitsubishi Heavy Industries, Ltd. 4.7
Lend Lease Corp. 4.4
Ito-Yokado Co., Ltd. 4.1
Rohm Co., Ltd. 3.7
HSBC Holdings PLC 3.6
Coca-Cola Amatil, Ltd. 3.3
Dai-Tokyo Fire & Marine Insurance Co., Ltd. 3.2
Percent of
Ten Largest Industries Net Assets
Property & Casualty Insurance 14.6%
Electric Equipment 12.6
Diversified 6.9
Electric Construction 6.5
Containers 5.2
Office Equipment 5.1
Retailing 5.0
Capital Goods 4.7
Property 4.5
Banking 3.6
Additions
Guiness Peat Group PLC
Housing Development Finance Corp. Limited
Hutchison Whampoa Limited
*LG Information & Communication
NEC Corporation
SCICI, Ltd. (Rights)
Deletions
Burns Philp & Co., Ltd.
Coca-Cola Amatil, Ltd. (Rights)
Genting BHD
Hong Kong Telecommunications, Ltd.
Hong Kong Telecommunications, Ltd. (ADR)
*LG Information & Communication
Resorts World BHD
[FN]
*Added and deleted in the same quarter.
<PAGE>
OFFICERS AND DIRECTORS
Arthur Zeikel, President and Director
Donald Cecil, Director
Edward H. Meyer, Director
Charles C. Reilly, Director
Richard R. West, Director
Edward D. Zinbarg, Director
Terry K. Glenn, Executive Vice President
Norman R. Harvey, Executive Vice President
Donald C. Burke, Vice President
Stephen I. Silverman, Vice President and
Portfolio Manager
Gerald M. Richard, Treasurer
Robert Harris, Secretary
Custodian
Brown Brothers Harriman & Co.
40 Water Street
Boston, Massachusetts 02109
Transfer Agent
Merrill Lynch Financial Data Services, Inc.
Transfer Agency Mutual Fund Operations
4800 Deer Lake Drive East
Jacksonville, Florida 32246-6484
(800) 637-3863
