MERRILL LYNCH
BASIC VALUE
FUND, INC.
FUND LOGO
Semi-Annual Report
December 31, 1999
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
Basic Value Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
Printed on post-consumer recycled paper
MERRILL LYNCH BASIC VALUE FUND, INC.
TO OUR SHAREHOLDERS
The US economy finished 1999 with strong growth, low inflation,
accelerating productivity, strong earnings and rising real wages. At
its meeting on November 16, 1999, the Federal Reserve Board
announced its move to tighten 25 basis points (0.25%), essentially
putting short-term interest rates back to where they were before the
three quarter-point cuts that were made in the fall of 1998.
Monetary policy was kept steady at the central bank's last meeting
in 1999 on December 21 over Year 2000 concerns, but indications
point to further tightening in early 2000.
US stock markets rebounded in October and advanced on a technology-
driven rally in November. Significant strength in small-
capitalization stocks also emerged in November, particularly in the
small cap growth sector. Overall, US stock markets ended the year at
new highs. In the fixed-income area, the 30-year Treasury bond yield
hit a two-year high over concerns of the continued strength of the
economy and potential future action by the Federal Reserve Board.
Portfolio Matters
Security purchases in the fourth quarter of 1999 amounted to $561
million while equity sales totaled $486 million. On the buy side, we
initiated new positions in eight securities and added to 18 existing
positions. On the sell side, we eliminated seven holdings and
reduced 19 positions.
The price swings of some stocks during the final quarter of any year
are frequently exacerbated by factors such as tax-selling and so-
called window-dressing, where some portfolio managers reduce or
eliminate losing stocks and add to or initiate new positions in
securities that have performed well. Over the years, our attempts to
take advantage of these trends have generally proven advantageous.
Our largest purchase during the December quarter, an initial
position in Bank One Corporation, was just such a situation. Bank
One Corporation's stock has come under severe pressure following the
company's well-publicized earnings shortfalls in its First USA
Credit Card operations. At 10 times earnings, 5.7% yield and a
franchise we value at $45 per share, we believe the risk/reward
ratio is favorable.
In the same context, we initiated positions in American Home
Products Corporation, Compaq Computer Corporation, Lockheed Martin
Corporation and Monsanto Company during the December quarter.
American Home Products Corporation shares have fallen as a result of
poor agricultural results and diet drug litigation. We believe
American Home's drug pipeline is one of the strongest in the
industry and at its current valuation, offered good risk/reward
characteristics.
Lockheed Martin Corporation is a leading defense company that has
undergone a series of negative earnings revisions. Against the
backdrop of a rising defense budget environment and with several new
management appointments, Lockheed Martin is poised to correct
several of its troubled programs. Trading slightly above its book
value, the risk/reward equation is tilted in our favor.
We purchased Monsanto Company following a highly controversial
merger with Pharmacia & Upjohn. Investors were disenchanted with the
lack of premium paid to Monsanto shareholders, and following the
transaction, Monsanto's shares traded significantly lower. We
believe the resulting company will have a stronger drug pipeline, a
better balance sheet and a much deeper management team. As such, we
believe the combined company provides long-term share appreciation
from current levels.
Compaq Computer Corporation is a leading computer company, which has
stumbled in the last few years. Recent market share losses have
taken their toll on the share price, which is down 50% from its
high. The company has responded to its recent problems by hiring a
new management team, instituting a $2 billion cost reduction program
and introducing a series of new products using a more direct
distribution model. These changes coupled with a pristine balance
sheet make Compaq a compelling value proposition.
Merrill Lynch Basic Value Fund, Inc.
December 31, 1999
Almost half of our purchases during the December quarter were
additions to established positions with the largest being Emerson
Electric Co., Hercules Incorporated, Thomas & Betts Corporation,
First Union Corporation and Unisys Corporation.
Unisys Corporation was also one of our largest sales during the
three-month period ended December 31, 1999. We were fortunate enough
to reduce the position prior to a profit warning from the company
that resulted in a stock price decline of about 50%. We thought the
price drop was excessive and increased our position.
Also in the final quarter of 1999 we bought and sold partial
positions in The Boeing Company, Diamond Offshore Drilling, Inc. and
Philip Morris Companies Inc., taking advantage of price
fluctuations.
About 25% of fourth quarter sales were reductions in international
and domestic oil holdings, a group that has long been our largest
industry commitment. Exxon Corporation and Mobil Corporation were
our sixth and seventh largest positions as of September 30, 1999,
and the merged company is now the Fund's largest holding at about 5%
of assets. We felt prudence dictated some profit taking and we sold
some of each prior to the merger and some additional stock following
the completion of the merger.
Our completed sales were primarily small positions although we did
participate in three initial public offerings that were sold during
the quarter.
In Conclusion
Worldwide economies continue to improve, which should dictate a much-
improved relative performance year in calendar 2000. Although we are
always hesitant to predict the direction of the stock market, gross
domestic product growth or interest rates, we do know that your Fund
is trading at historically low valuation levels as compared to the
overall market. We hope to be rewarded for that in the upcoming
year.
Thank you for your investment in Merrill Lynch Basic Value Fund,
Inc. We look forward to serving your investment needs in the months
and years ahead.
Sincerely,
(Terry K. Glenn)
Terry K. Glenn
President and Director
(Paul M. Hoffmann)
Paul M. Hoffmann
Senior Vice President and Co-Portfolio Manager
(Kevin M. Rendino)
Kevin M. Rendino
Senior Vice President and Co-Portfolio Manager
January 14, 2000
On January 31, 2000, Paul M. Hoffmann, long-time manager of Merrill
Lynch Basic Value Fund, Inc., retired. Mr. Hoffmann has managed the
Fund for 22 years and his solid investment contribution is reflected
in an enviable record. Since its inception on July 1, 1977, the Fund
has grown to $11.6 billion, and throughout its history has only
experienced one down calendar year. As planned, Mr. Rendino has
assumed the position as the Fund's lead manager. Mr. Hoffmann's
colleagues at Merrill Lynch Asset Management join the Fund's Board
of Directors in wishing Mr. Hoffmann well in his retirement.
To reduce shareholders' expenses, Merrill Lynch Basic Value Fund,
Inc. will no longer be printing and mailing quarterly reports to
shareholders. We will continue to provide you with reports on a semi-
annual and annual basis.
Merrill Lynch Basic Value Fund, Inc.
December 31, 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:
* 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 approximately 8 years. (There is no initial
sales charge for automatic share conversions.)
* 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).
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.
Average Annual Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 12/31/99 +11.06% + 5.23%
Five Years Ended 12/31/99 +20.25 +18.96
Ten Years Ended 12/31/99 +14.35 +13.73
[FN]
*Maximum sales charge is 5.25%. (Prior to October 21, 1994, Class A
Shares were offered at a higher sales charge. Thus, actual returns
would have been lower than shown for the ten-year period.)
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 12/31/99 + 9.97% + 5.97%
Five Years Ended 12/31/99 +19.04 +19.04
Ten Years Ended 12/31/99 +13.19 +13.19
[FN]
*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 12/31/99 + 9.97% + 8.97%
Five Years Ended 12/31/99 +19.02 +19.02
Inception (10/21/94)
through 12/31/99 +17.84 +17.84
[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*
Year Ended 12/31/99 +10.82% + 5.00%
Five Years Ended 12/31/99 +19.95 +18.66
Inception (10/21/94)
through 12/31/99 +18.76 +17.53
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
Merrill Lynch Basic Value Fund, Inc.
December 31, 1999
PERFORMANCE DATA (concluded)
Results of a $1,000 Investment Since Inception--Class A Shares
(5.25% current 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 July 1, 1977 to $27,047.34
On December 31, 2000
<TABLE>
Recent Performance Results
<CAPTION>
Ten Years/
3 Month 12 Month Since Inception
As of December 31, 1999 Total Return Total Return Total Return
<S> <C> <C> <C>
ML Basic Value Fund Class A Shares* + 2.48% +11.06% +282.24%
ML Basic Value Fund Class B Shares* + 2.22 + 9.97 +245.24
ML Basic Value Fund Class C Shares* + 2.23 + 9.97 +134.56
ML Basic Value Fund Class D Shares* + 2.43 +10.82 +144.25
Dow Jones Industrial Average** +11.68 +27.28 +440.56/+229.53
Standard & Poor's 500 Index** +14.88 +21.04 +432.77/+249.06
<FN>
*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 ten years for Class A &
Class B Shares and from 10/21/94 for Class C & Class D Shares,
respectively.
**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.
</TABLE>
Merrill Lynch Basic Value Fund, Inc.
December 31, 1999
<TABLE>
SCHEDULE OF INVESTMENTS
<CAPTION>
Shares Percent of
Industry Held Stocks Value Net Assets
Low Price to Book Value
<S> <C> <S> <C>
Communication Services 3,500,000 AT&T Corp. $ 177,625,000 1.5%
Insurance 2,500,000 American General Corporation 189,687,500 1.6
Steel 1,600,000 ++Bethlehem Steel Corporation 13,400,000 0.1
Aerospace/Defense 3,800,000 The Boeing Company 157,937,500 1.4
Restaurants 4,200,000 Darden Restaurants, Inc. 76,125,000 0.7
Engineering & Machinery 4,500,000 Deere & Company 195,187,500 1.7
Oil Services & Equipment 4,000,000 Diamond Offshore Drilling, Inc. 122,250,000 1.0
Retail 3,150,000 ++Federated Department Stores, Inc. 159,271,875 1.4
Capital Goods 2,910,000 Fluor Corporation 133,496,250 1.1
Automotive 4,600,000 Ford Motor Company 245,812,500 2.1
Automotive 2,700,000 General Motors Corporation 196,256,250 1.7
Insurance 2,500,000 The Hartford Financial Services Group, Inc. 118,437,500 1.0
Chemicals 800,000 Imperial Chemical Industries PLC (ADR)* 34,050,000 0.3
Paper & Forest Products 2,300,000 International Paper Company 129,806,250 1.1
Retail 6,000,000 ++Kmart Corporation 60,375,000 0.5
Computer Hardware 2,744,000 Koninklijke (Royal) Philips Electronics NV
(NY Registered Shares) 370,440,000 3.2
Aerospace/Defense 2,146,500 Lockheed Martin Corporation 46,954,687 0.4
Chemicals 1,000,000 Monsanto Company 35,625,000 0.3
Insurance 1,400,000 PartnerRe Ltd. 45,412,500 0.4
Chemicals 1,286,800 Potash Corporation of Saskatchewan Inc. 62,007,675 0.5
Electronics 2,400,000 Tektronix, Inc.++++ 93,300,000 0.8
Telecommunications 5,000,000 ++Telefonica SA (ADR)* 394,062,500 3.4
Steel 3,000,000 USX-U.S. Steel Group 99,000,000 0.8
Chemicals 2,000,000 Union Carbide Corporation 133,500,000 1.1
Railroads 4,450,000 Union Pacific Corporation 194,131,250 1.7
Retail 4,000,000 ++Venator Group, Inc. 28,000,000 0.2
Banking 8,600,000 Wells Fargo Company 347,762,500 3.0
--------------- ------
3,859,914,237 33.0
Below-Average Price/Earnings Ratio
Insurance 4,700,000 The Allstate Corporation 112,800,000 1.0
Financials 3,300,000 Associates First Capital Corporation (Class A) 90,543,750 0.8
Banking 2,000,000 Bank One Corporation 64,125,000 0.5
Banking 2,600,000 Bank of America Corporation 130,487,500 1.1
Farm & Construction 3,875,000 Caterpillar Inc. 182,367,187 1.6
Equipment
Banking 9,500,000 Citigroup Inc. 527,843,750 4.5
Information Processing 2,000,000 Compaq Computer Corporation 54,125,000 0.5
Automotive 4,800,000 Delphi Automotive Systems Corporation 75,600,000 0.6
Photography 2,050,000 Eastman Kodak Company 135,812,500 1.2
Manufacturing 2,000,000 Eaton Corporation 145,250,000 1.2
Chemicals 3,950,000 Hercules Incorporated 110,106,250 0.9
Machinery 3,400,000 ITT Industries, Inc. 113,687,500 1.0
Machinery 3,200,000 Ingersoll-Rand Company 176,200,000 1.5
Tobacco 4,200,000 Philip Morris Companies Inc. 97,387,500 0.8
Retail 4,500,000 Sears, Roebuck & Co. 136,968,750 1.2
Savings & Loans 3,500,000 Washington Mutual, Inc. 91,000,000 0.8
--------------- ------
2,244,304,687 19.2
</TABLE>
Merrill Lynch Basic Value Fund, Inc.
December 31, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (continued)
<CAPTION>
Shares Percent of
Industry Held Stocks Value Net Assets
Above-Average Yield
<S> <C> <S> <C>
Pharmaceuticals 763,700 American Home Products Corporation $ 30,118,419 0.2%
Oil--Domestic 1,850,000 Atlantic Richfield Company (ARCO) 160,025,000 1.4
Oil--International 3,000,000 BP Amoco PLC (ADR)* 177,937,500 1.5
Telecommunications 2,900,000 Bell Atlantic Corporation 178,531,250 1.5
Oil--International 1,700,000 Chevron Corporation 147,262,500 1.3
Utilities--Electric 2,000,000 Cinergy Corp. 48,250,000 0.4
Utilities--Electric 1,550,000 Consolidated Edison, Inc. 53,475,000 0.5
Utilities--Electric 2,200,000 Duke Energy Corporation 110,275,000 0.9
Chemicals 3,700,000 E.I. du Pont de Nemours and Company 243,737,500 2.1
Electrical Equipment 2,600,000 Emerson Electric Co. 149,175,000 1.3
Utilities--Electric 3,000,000 Entergy Corporation 77,250,000 0.7
Oil--International 7,000,000 Exxon Mobil Corporation 563,937,500 4.8
Banking 4,000,000 First Union Corporation 131,250,000 1.1
Telecommunications 3,300,000 GTE Corporation 232,856,250 2.0
Foods 3,800,000 General Mills, Inc. 135,850,000 1.2
Real Estate Investment Trust 900,000 Liberty Property Trust 21,825,000 0.2
Banking 3,400,000 National City Corporation 80,537,500 0.7
Utilities--Electric 2,400,000 NiSource Inc. 42,900,000 0.4
Utilities--Electric 2,400,000 PECO Energy Company 83,400,000 0.7
Utilities--Electric 1,800,000 Public Service Enterprise Group Incorporated 62,662,500 0.5
Oil--International 5,000,000 Royal Dutch Petroleum Company
(NY Registered Shares) 302,187,500 2.6
Telecommunications 5,757,500 SBC Communications Inc. 280,678,125 2.4
Foods/Food Processing 5,500,000 Sara Lee Corporation 121,343,750 1.0
Real Estate Investment Trust 2,100,000 Simon Property Group, Inc. 48,168,750 0.4
Oil--International 2,700,000 Texaco Inc. 146,643,750 1.3
Utilities--Electric 2,900,000 Texas Utilities Company 103,131,250 0.9
Electrical Equipment 2,750,000 Thomas & Betts Corporation 87,656,250 0.7
Telecommunications 3,000,000 U S WEST, Inc. 216,000,000 1.8
--------------- ------
4,037,065,294 34.5
Special Situations
Pharmaceuticals 1,320,000 AstraZeneca Group PLC (ADR)* 55,110,000 0.5
Oil Services & Equipment 3,900,000 Halliburton Company 156,975,000 1.3
Computer Hardware 2,500,000 Hewlett-Packard Company 284,843,750 2.4
Computer Hardware 4,500,000 International Business Machines Corporation 486,000,000 4.1
Semiconductors 1,275,000 Texas Instruments Incorporated 123,515,625 1.1
Information Processing 5,400,000 ++Unisys Corporation 172,462,500 1.5
--------------- ------
1,278,906,875 10.9
Total Stocks (Cost--$7,014,677,781) 11,420,191,093 97.6
</TABLE>
Merrill Lynch Basic Value Fund, Inc.
December 31, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (concluded)
<CAPTION>
Face Percent of
Amount Issue Value Net Assets
Short-Term Securities
<S> <C> <S> <C>
Commercial Paper** $40,000,000 A-1 Credit Corp., 5.90% due 1/21/2000 $ 39,862,333 0.3%
25,000,000 Bell Atlantic Financial Services,
5.80% due 1/19/2000 24,923,472 0.2
20,000,000 CSW Credit Inc., 5.83% due 1/24/2000 19,922,267 0.2
40,000,000 General Electric Capital Corp., 5.90%
due 1/27/2000 39,823,000 0.3
8,610,000 General Motors Acceptance Corp.,
5% due 1/03/2000 8,606,412 0.1
10,117,000 Hertz Corporation, 6.36% due 1/07/2000 10,104,489 0.1
40,000,000 J.P. Morgan Securities Inc., 6.05%
due 1/11/2000 39,926,056 0.3
12,823,000 Metropolitan Life Insurance Company,
5.88% due 1/21/2000 12,779,017 0.1
Procter & Gamble Corporation:
33,000,000 5.87% due 1/10/2000 32,946,192 0.3
20,000,000 5.85% due 1/11/2000 19,964,250 0.2
23,790,000 5.85% due 1/25/2000 23,693,353 0.2
20,000,000 SBC Communications Inc., 5.83% due 1/25/2000 19,919,028 0.2
25,000,000 Sara Lee Corporation, 5.85% due 1/06/2000 24,975,625 0.2
31,729,000 Transamerica Finance Corporation, 5.85%
due 1/28/2000 31,584,633 0.3
Total Short-Term Securities
(Cost--$349,030,127) 349,030,127 3.0
Total Investments (Cost--$7,363,707,908) 11,769,221,220 100.6
Liabilities in Excess of Other Assets (70,645,868) (0.6)
--------------- ------
Net Assets $11,698,575,352 100.0%
=============== ======
<FN>
*American Depositary Receipts (ADR).
**Commercial Paper is traded on a discount basis; the interest rates
shown reflect the discount rates paid at the time of purchase by the
Fund.
++Non-income producing security.
++++Investments in companies 5% or more of whose outstanding
securities are held by the Fund (such companies are defined as
"Affiliated Companies" in section 2 (a)(3) of the Investment Company
Act of 1940) are as follows:
Net Share Net Dividend
Industry Affiliate Activity Cost Income
Electronics Tektronix, Inc. -- -- $ 576,000
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Basic Value Fund, Inc.
December 31, 1999
<TABLE>
FINANCIAL INFORMATION
<CAPTION>
Statement of Assets and Liabilities as of December 31, 1999
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$7,363,707,908) $11,769,221,220
Cash 85,122
Receivables:
Securities sold $ 30,661,934
Dividends 15,672,423
Capital shares sold 12,809,810 59,144,167
---------------
Prepaid registration fees and other assets 164,715
---------------
Total assets 11,828,615,224
---------------
Liabilities: Payables:
Capital shares redeemed 112,227,611
Investment adviser 4,543,248
Distributor 4,476,205
Securities purchased 49,841 121,296,905
---------------
Accrued expenses and other liabilities 8,742,967
---------------
Total liabilities 130,039,872
---------------
Net Assets: Net assets $11,698,575,352
===============
Net Assets Class A Shares of Common Stock, $.10 par value,
Consist of: 400,000,000 shares authorized $ 13,141,175
Class B Shares of Common Stock, $.10 par value,
400,000,000 shares authorized 11,418,775
Class C Shares of Common Stock, $.10 par value,
200,000,000 shares authorized 1,336,093
Class D Shares of Common Stock, $.10 par value,
200,000,000 shares authorized 5,003,846
Paid-in capital in excess of par 7,169,256,101
Undistributed investment income--net 870,241
Undistributed realized capital gains on investments and foreign
currency transactions--net 92,035,809
Unrealized appreciation on investments--net 4,405,513,312
---------------
Net assets $11,698,575,352
===============
Net Asset Value: Class A--Based on net assets of $5,013,545,039 and 131,411,752
shares outstanding $ 38.15
===============
Class B--Based on net assets of $4,285,413,172 and 114,187,750
shares outstanding $ 37.53
===============
Class C--Based on net assets of $495,234,412 and 13,360,931
shares outstanding $ 37.07
===============
Class D--Based on net assets of $1,904,382,729 and 50,038,456
shares outstanding $ 38.06
===============
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Basic Value Fund, Inc.
December 31, 1999
<TABLE>
FINANCIAL INFORMATION (continued)
<CAPTION>
Statement of Operations for the Six Months Ended December 31, 1999
<S> <S> <C> <C>
Investment Dividends (net of $963,580 foreign withholding tax) $ 122,647,004
Income: Interest and discount earned 21,275,774
Other 242,536
---------------
Total income 144,165,314
---------------
Expenses: Investment advisory fees $ 24,780,057
Account maintenance and distribution fees--Class B 22,836,159
Transfer agent fees--Class A 4,107,057
Transfer agent fees--Class B 3,903,810
Account maintenance and distribution fees--Class C 2,580,992
Account maintenance fees--Class D 2,421,455
Transfer agent fees--Class D 1,509,052
Transfer agent fees--Class C 468,511
Accounting services 334,901
Custodian fees 276,909
Printing and shareholder reports 256,237
Registration fees 152,040
Professional fees 75,831
Directors' fees and expenses 31,563
Pricing fees 15,581
Other 84,703
---------------
Total expenses 63,834,858
---------------
Investment income--net 80,330,456
---------------
Realized & Realized gain (loss) from:
Unrealized Gain Investments--net 361,904,407
(Loss) on Foreign currency transactions--net (812) 361,903,595
Investments & ---------------
Foreign Currency Change in unrealized appreciation on:
Transactions-- Investments--net (911,169,388)
Net: Foreign currency transactions--net (265) (911,169,653)
--------------- ---------------
Net realized and unrealized loss on investments and foreign
currency transactions (549,266,058)
---------------
Net Decrease in Net Assets Resulting from Operations $ (468,935,602)
===============
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Basic Value Fund, Inc.
December 31, 1999
FINANCIAL INFORMATION (continued)
<TABLE>
Statements of Changes in Net Assets
<CAPTION>
For the Six For the
Months Ended Year Ended
Increase (Decrease) in Net Assets: Dec. 31, 1999 June 30, 1999
<S> <S> <C> <C>
Operations: Investment income--net $ 80,330,456 $ 183,364,066
Realized gain on investments and foreign currency
transactions--net 361,903,595 860,992,271
Change in unrealized appreciation on investments and
foreign currency transactions--net (911,169,653) 540,926,112
--------------- ---------------
Net increase (decrease) in net assets
resulting from operations (468,935,602) 1,585,282,449
--------------- ---------------
Dividends & Investment income--net:
Distributions to Class A (93,013,201) (115,384,648)
Shareholders: Class B (34,515,924) (52,615,335)
Class C (4,093,536) (5,952,343)
Class D (29,446,702) (31,919,617)
Realized gain on investments--net:
Class A (433,005,279) (342,278,197)
Class B (379,827,183) (297,574,541)
Class C (43,240,164) (32,811,336)
Class D (157,636,048) (104,731,011)
--------------- ---------------
Net decrease in net assets resulting from dividends
and distributions to shareholders (1,174,778,037) (983,267,028)
--------------- ---------------
Capital Share Net increase (decrease) in net assets derived
Transactions: from capital share transactions 458,679,113 (856,068,652)
--------------- ---------------
Net Assets: Total decrease in net assets (1,185,034,526) (254,053,231)
Beginning of period 12,883,609,878 13,137,663,109
--------------- ---------------
End of period* $11,698,575,352 $12,883,609,878
=============== ===============
<FN>
*Undistributed investment income--net $ 870,241 $ 81,609,148
=============== ===============
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Basic Value Fund, Inc.
December 31, 1999
FINANCIAL INFORMATION (continued)
<TABLE>
Financial Highlights
<CAPTION>
Class A
For the
The following per share data and ratios have been derived Six Months
from information provided in the financial statements. Ended
Dec. 31, For the Year Ended June 30,
Increase (Decrease) in Net Asset Value: 1999++ 1999++ 1998++ 1997++ 1996
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value,
Operating beginning of period $ 43.70 $ 41.55 $ 36.50 $ 30.22 $ 26.44
Performance: ---------- ---------- ---------- ---------- ----------
Investment income--net .36 .76 .83 .81 .80
Realized and unrealized gain (loss)
on investments and foreign currency
transactions--net (1.81) 4.61 7.23 7.66 4.31
---------- ---------- ---------- ---------- ----------
Total from investment operations (1.45) 5.37 8.06 8.47 5.11
---------- ---------- ---------- ---------- ----------
Less dividends and distributions:
Investment income--net (.72) (.81) (.78) (.80) (.76)
Realized gain on investments--net (3.38) (2.41) (2.23) (1.39) (.57)
---------- ---------- ---------- ---------- ----------
Total dividends and distributions (4.10) (3.22) (3.01) (2.19) (1.33)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 38.15 $ 43.70 $ 41.55 $ 36.50 $ 30.22
========== ========== ========== ========== ==========
Total Investment Based on net asset value per share (3.37%)+++ 14.54% 23.23% 29.95% 19.92%
Return:** ========== ========== ========== ========== ==========
Ratios to Average Expenses .58%* .55% .54% .55% .56%
Net Assets: ========== ========== ========== ========== ==========
Investment income--net 1.76%* 1.95% 2.14% 2.54% 2.88%
========== ========== ========== ========== ==========
Supplemental Net assets, end of period
Data: (in thousands) $5,013,545 $5,521,623 $5,888,853 $4,921,834 $3,587,558
========== ========== ========== ========== ==========
Portfolio turnover 7.00% 15.52% 17.79% 13.00% 13.94%
========== ========== ========== ========== ==========
<FN>
*Annualized.
**Total investment returns exclude the effects of sales charges.
++Based on average shares outstanding.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Basic Value Fund, Inc.
December 31, 1999
FINANCIAL INFORMATION (continued)
<TABLE>
Financial Highlights (continued)
<CAPTION>
Class B
For the
The following per share data and ratios have been derived Six Months
from information provided in the financial statements. Ended
Dec. 31, For the Year Ended June 30,
Increase (Decrease) in Net Asset Value: 1999++ 1999++ 1998++ 1997++ 1996
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value,
Operating beginning of period $ 42.84 $ 40.78 $ 35.89 $ 29.76 $ 26.08
Performance: ---------- ---------- ---------- ---------- ----------
Investment income--net .15 .36 .43 .48 .53
Realized and unrealized gain (loss)
on investments and foreign currency
transactions--net (1.77) 4.53 7.11 7.55 4.23
---------- ---------- ---------- ---------- ----------
Total from investment operations (1.62) 4.89 7.54 8.03 4.76
---------- ---------- ---------- ---------- ----------
Less dividends and distributions:
Investment income--net (.31) (.42) (.42) (.51) (.51)
Realized gain on investments--net (3.38) (2.41) (2.23) (1.39) (.57)
---------- ---------- ---------- ---------- ----------
Total dividends and distributions (3.69) (2.83) (2.65) (1.90) (1.08)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 37.53 $ 42.84 $ 40.78 $ 35.89 $ 29.76
========== ========== ========== ========== ==========
Total Investment Based on net asset value per share (3.87%)+++ 13.40% 21.97% 28.61% 18.71%
Return:** ========== ========== ========== ========== ==========
Ratios to Average Expenses 1.59%* 1.57% 1.56% 1.57% 1.58%
Net Assets: ========== ========== ========== ========== ==========
Investment income--net .75%* .93% 1.13% 1.53% 1.86%
========== ========== ========== ========== ==========
Supplemental Net assets, end of period
Data: (in thousands) $4,285,413 $4,846,702 $4,976,004 $4,088,755 $3,288,963
========== ========== ========== ========== ==========
Portfolio turnover 7.00% 15.52% 17.79% 13.00% 13.94%
========== ========== ========== ========== ==========
<FN>
*Annualized.
**Total investment returns exclude the effects of sales charges.
++Based on average shares outstanding.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Basic Value Fund, Inc.
December 31, 1999
FINANCIAL INFORMATION (continued)
<TABLE>
Financial Highlights (continued)
<CAPTION>
Class C
For the
The following per share data and ratios have been derived Six Months
from information provided in the financial statements. Ended
Dec. 31, For the Year Ended June 30,
Increase (Decrease) in Net Asset Value: 1999++ 1999++ 1998++ 1997++ 1996
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value,
Operating beginning of period $ 42.37 $ 40.39 $ 35.59 $ 29.56 $ 25.98
Performance: ---------- ---------- ---------- ---------- ----------
Investment income--net .14 .35 .43 .47 .55
Realized and unrealized gain (loss)
on investments and foreign currency
transactions--net (1.74) 4.48 7.04 7.49 4.18
---------- ---------- ---------- ---------- ----------
Total from investment operations (1.60) 4.83 7.47 7.96 4.73
---------- ---------- ---------- ---------- ----------
Less dividends and distributions:
Investment income--net (.32) (.44) (.44) (.54) (.58)
Realized gain on investments--net (3.38) (2.41) (2.23) (1.39) (.57)
---------- ---------- ---------- ---------- ----------
Total dividends and distributions (3.70) (2.85) (2.67) (1.93) (1.15)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 37.07 $ 42.37 $ 40.39 $ 35.59 $ 29.56
========== ========== ========== ========== ==========
Total Investment Based on net asset value per share (3.86%)+++ 13.36% 21.98% 28.60% 18.69%
Return:** ========== ========== ========== ========== ==========
Ratios to Average Expenses 1.60%* 1.58% 1.57% 1.58% 1.59%
Net Assets: ========== ========== ========== ========== ==========
Investment income--net .74%* .92% 1.12% 1.51% 1.83%
========== ========== ========== ========== ==========
Supplemental Net assets, end of period
Data: (in thousands) $ 495,234 $ 535,132 $ 538,104 $ 337,828 $ 211,787
========== ========== ========== ========== ==========
Portfolio turnover 7.00% 15.52% 17.79% 13.00% 13.94%
========== ========== ========== ========== ==========
<FN>
*Annualized.
**Total investment returns exclude the effects of sales charges.
++Based on average shares outstanding.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Basic Value Fund, Inc.
December 31, 1999
FINANCIAL INFORMATION (continued)
<TABLE>
Financial Highlights (concluded)
<CAPTION>
Class D
For the
The following per share data and ratios have been derived Six Months
from information provided in the financial statements. Ended
Dec. 31, For the Year Ended June 30,
Increase (Decrease) in Net Asset Value: 1999++ 1999++ 1998++ 1997++ 1996
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value,
Operating beginning of period $ 43.55 $ 41.42 $ 36.42 $ 30.16 $ 26.41
Performance: ---------- ---------- ---------- ---------- ----------
Investment income--net .30 .65 .74 .73 .76
Realized and unrealized gain (loss)
on investments and foreign currency
transactions--net (1.79) 4.61 7.19 7.66 4.27
---------- ---------- ---------- ---------- ----------
Total from investment operations (1.49) 5.26 7.93 8.39 5.03
---------- ---------- ---------- ---------- ----------
Less dividends and distributions:
Investment income--net (.62) (.72) (.70) (.74) (.71)
Realized gain on investments--net (3.38) (2.41) (2.23) (1.39) (.57)
---------- ---------- ---------- ---------- ----------
Total dividends and distributions (4.00) (3.13) (2.93) (2.13) (1.28)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 38.06 $ 43.55 $ 41.42 $ 36.42 $ 30.16
========== ========== ========== ========== ==========
Total Investment Based on net asset value per share (3.48%)+++ 14.25% 22.89% 29.65% 19.61%
Return:** ========== ========== ========== ========== ==========
Ratios to Average Expenses .83%* .80% .79% .80% .81%
Net Assets: ========== ========== ========== ========== ==========
Investment income--net 1.51%* 1.69% 1.89% 2.28% 2.61%
========== ========== ========== ========== ==========
Supplemental Net assets, end of period
Data: (in thousands) $1,904,383 $1,980,153 $1,734,702 $ 886,391 $ 434,396
========== ========== ========== ========== ==========
Portfolio turnover 7.00% 15.52% 17.79% 13.00% 13.94%
========== ========== ========== ========== ==========
<FN>
*Annualized.
**Total investment returns exclude the effects of sales charges.
++Based on average shares outstanding.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Basic Value Fund, Inc.
December 31, 1999
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
Merrill Lynch Basic Value Fund, Inc. (the "Fund") is registered
under the Investment Company Act of 1940 as a diversified, open-end
management investment company. The Fund's financial statements are
prepared in accordance with generally accepted accounting
principles, which may require the use of management accruals and
estimates. These unaudited financial statements reflect all
adjustments, which are, in the opinion of management, necessary to a
fair statement of the results for the interim period presented. All
such adjustments are of a normal recurring nature. The Fund offers
four classes of shares under the Merrill Lynch Select Pricing SM
System. Shares of Class A and Class D are sold with a front-end
sales charge. Shares of Class B and Class C may be subject to a
contingent deferred sales charge. All classes of shares have
identical voting, dividend, liquidation and other rights and the
same terms and conditions, except that Class B, Class C and Class D
Shares bear certain expenses related to the account maintenance of
such shares, and Class B and Class C Shares also bear certain
expenses related to the distribution of such shares. Each class has
exclusive voting rights with respect to matters relating to its
account maintenance and distribution expenditures. The following is
a summary of significant accounting policies followed by the Fund.
(a) Valuation of investments--Portfolio securities that are traded
on stock exchanges are valued at the last sale price on the exchange
on which such securities are traded, as of the close of business on
the day the securities are being valued or, lacking any sales, at
the last available bid price. Securities traded in the over-the-
counter market are valued at the last available bid price prior to
the time of valuation. In cases where securities are traded on more
than one exchange, the securities are valued on the exchange
designated by or under the authority of the Board of Directors as
the primary market. Securities that are traded both in the over-the-
counter market and on a stock exchange are valued according to the
broadest and most representative market. Options written are valued
at the last sale price in the case of exchange-traded options. In
the case of options traded in the over-the-counter market, valuation
is the last asked price. Short-term securities are valued at
amortized cost, which approximates market value. Other investments
are stated at market value. Securities and assets for which market
value quotations are not available are valued at their fair value as
determined in good faith by or under the direction of the Fund's
Board of Directors.
(b) Derivative financial instruments--The Fund may engage in various
portfolio strategies to seek to increase its return by hedging its
portfolio against adverse movements in the equity markets. Losses
may arise due to changes in the value of the contract or if the
counterparty does not perform under the contract.
* Options--The Fund is authorized to write covered call options.
When the Fund writes an option, an amount equal to the premium
received by the Fund is reflected as an asset and an equivalent
liability. The amount of the liability is subsequently marked to
market to reflect the current market value of the option written.
When a security is purchased or sold through an exercise of an
option, the related premium paid (or received) is added to (or
deducted from) the basis of the security acquired or deducted from
(or added to) the proceeds of the security sold. When an option
expires (or the Fund enters into a closing transaction) the Fund
realizes a gain or loss on the option to the extent of the premiums
received or paid (or gain or loss to the extent the cost of the
closing transaction exceeds the premium paid or received).
Written options are non-income producing investments.
(c) Foreign currency transactions--Transactions denominated in
foreign currencies are recorded at the exchange rate prevailing when
recognized. Assets and liabilities denominated in foreign currencies
are valued at the exchange rate at the end of the period. Foreign
currency transactions are the result of settling (realized) or
valuing (unrealized) assets or liabilities expressed in foreign
currencies into US dollars. Realized and unrealized gains or losses
from investments include the effects of foreign exchange rates on
investments.
(d) Income taxes--It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute substantially all of its
taxable income to its shareholders. Therefore, no Federal income tax
provision is required. Under the applicable foreign tax law, a
withholding tax may be withheld on interest, dividends, and capital
gains at various rates.
Merrill Lynch Basic Value Fund, Inc.
December 31, 1999
NOTES TO FINANCIAL STATEMENTS (continued)
(e) Security transactions and investment income--Security
transactions are recorded on the dates the transactions are entered
into (the trade dates). Dividend income is recorded on the ex-
dividend dates. Interest income (including amortization of discount)
is recognized on the accrual basis. Realized gains and losses on
security transactions are determined on the identified cost basis.
(f) Prepaid registration fees--Prepaid registration fees are charged
to expense as the related shares are issued.
(g) Dividends and distributions--Dividends and distributions paid by
the Fund are recorded on the ex-dividend dates.
2. Investment Advisory Agreement and
Transactions with Affiliates:
The Fund has entered into an Investment Advisory Agreement with Fund
Asset Management, L.P. ("FAM"). The general partner of FAM is
Princeton Services, Inc. ("PSI"), an indirect wholly-owned
subsidiary of Merrill Lynch & Co., Inc. ("ML & Co."), which is the
limited partner. The Fund has also entered into a Distribution
Agreement and Distribution Plans with Merrill Lynch Funds
Distributor ("MLFD" or the "Distributor"), a division of Princeton
Funds Distributor, Inc. ("PFD"), which is a wholly-owned subsidiary
of Merrill Lynch Group, Inc.
FAM is responsible for the management of the Fund's portfolio and
provides the necessary personnel, facilities, equipment and certain
other services necessary to the operations of the Fund. For such
services, the Fund pays a monthly fee based upon the average daily
value of the Fund's daily net assets at the following annual rates:
.60% of the Fund's average daily net assets not exceeding $100
million; .50% of the Fund's average daily net assets in excess $100
million but not exceeding $200 million; and .40% of average daily
net assets in excess of $200 million.
Pursuant to the Distribution Plans adopted by the Fund in accordance
with Rule 12b-1 under the Investment Company Act of 1940, the Fund
pays the Distributor ongoing account maintenance and distribution
fees, which are accrued daily and paid monthly at annual rates based
upon the average daily net assets of the shares as follows:
Account
Maintenance Distribution
Fee Fee
Class B .25% .75%
Class C .25% .75%
Class D .25% --
Pursuant to a sub-agreement with the Distributor, Merrill Lynch,
Pierce, Fenner & Smith Incorporated ("MLPF&S"), a subsidiary of ML &
Co., also provides account maintenance and distribution services to
the Fund. The ongoing account maintenance fee compensates the
Distributor and MLPF&S for providing account maintenance services to
Class B, Class C and Class D shareholders. The ongoing distribution
fee compensates the Distributor and MLPF&S for providing shareholder
and distribution-related services to Class B and Class C
shareholders.
For the six months ended December 31, 1999, MLFD earned underwriting
discounts and direct commissions and MLPF&S earned dealer
concessions on sales of the Fund's Class A and Class D Shares as
follows:
MLFD MLPF&S
Class A $11,179 $124,447
Class D $34,902 $518,069
For the six months ended December 31, 1999, MLPF&S received
contingent deferred sales charges of $2,478,862 and $59,794 relating
to transactions in Class B and Class C Shares, respectively.
Furthermore, MLPF&S received contingent deferred sales charges of
$18 and $1,348 relating to transactions subject to front-end sales
charge waivers in Class A and Class D Shares, respectively.
In addition, MLPF&S received $250,500 in commissions on the
execution of portfolio security transactions for the Fund for the
six months ended December 31, 1999.
Financial Data Services, Inc. ("FDS"), a wholly owned subsidiary of
ML & Co., is the Fund's transfer agent.
Accounting services are provided to the Fund by FAM at cost.
Merrill Lynch Basic Value Fund, Inc.
December 31, 1999
Certain officers and/or directors of the Fund are officers and/or
directors of FAM, PSI, FDS, PFD, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the six months ended December 31, 1999 were $801,463,764 and
$1,005,786,349, respectively.
Net realized gains (losses) for the six months ended December 31,
1999 and net unrealized gains as of December 31, 1999 were as
follows:
Realized Unrealized
Gains (Losses) Gains
Long-term investments $361,875,230 $4,405,513,312
Short-term investments 29,177 --
Foreign currency
transactions (812) --
------------ --------------
Total $361,903,595 $4,405,513,312
============ ==============
As of December 31, 1999, net unrealized appreciation for Federal
income tax purposes aggregated $4,405,513,312, of which
$4,780,236,833 related to appreciated securities and $374,723,521
related to depreciated securities. At December 31, 1999, the
aggregate cost of investments for Federal income tax purposes was
$7,363,707,908.
4.Capital Share Transactions:
Net increase (decrease) in net assets derived from capital share
transactions was $458,679,113 and $(856,068,652) for the six months
ended December 31, 1999 and the year ended June 30, 1999,
respectively.
Transactions in capital shares for each class were as follows:
Class A Shares for the Six Months Dollar
Ended December 31, 1999 Shares Amount
Shares sold 10,214,805 $ 411,713,920
Shares issued to shareholders
in reinvestment of dividends
and distributions 11,830,766 463,816,128
------------- --------------
Total issued 22,045,571 875,530,048
Shares redeemed (16,988,183) (667,752,820)
------------- --------------
Net increase 5,057,388 $ 207,777,228
============= ==============
Class A Shares for the Year Dollar
Ended June 30, 1999 Shares Amount
Shares sold 20,196,939 $ 780,540,464
Shares issued to share-
holders in reinvestment of
dividends and distributions 11,153,781 409,873,748
------------- --------------
Total issued 31,350,720 1,190,414,212
Shares redeemed (46,729,482) (1,810,824,259)
------------- --------------
Net decrease (15,378,762) $ (620,410,047)
============= ==============
Class B Shares for the Six Months Dollar
Ended December 31, 1999 Shares Amount
Shares sold 10,519,692 $ 413,401,530
Shares issued to shareholders
in reinvestment of dividends
and distributions 9,453,124 364,691,977
------------- --------------
Total issued 19,972,816 778,093,507
Automatic conversion of
shares (3,340,890) (130,979,550)
Shares redeemed (15,588,981) (605,455,105)
------------- --------------
Net increase 1,042,945 $ 41,658,852
============= ==============
Class B Shares for the Year Dollar
Ended June 30, 1999 Shares Amount
Shares sold 27,355,260 $1,040,580,495
Shares issued to share-
holders in reinvestment of
dividends and distributions 8,668,007 313,408,370
------------- --------------
Total issued 36,023,267 1,353,988,865
Automatic conversion of
shares (6,408,614) (245,296,730)
Shares redeemed (38,483,558) (1,454,712,411)
------------- --------------
Net decrease (8,868,905) $ (346,020,276)
============= ==============
Class C Shares for the Six Months Dollar
Ended December 31, 1999 Shares Amount
Shares sold 1,804,100 $ 69,900,638
Shares issued to shareholders
in reinvestment of dividends
and distributions 1,088,326 41,475,526
------------- --------------
Total issued 2,892,426 111,376,164
Shares redeemed (2,162,289) (82,916,710)
------------- --------------
Net increase 730,137 $ 28,459,454
============= ==============
Merrill Lynch Basic Value Fund, Inc.
December 31, 1999
NOTES TO FINANCIAL STATEMENTS (concluded)
Class C Shares for the Year Dollar
Ended June 30, 1999 Shares Amount
Shares sold 3,468,691 $ 131,902,536
Shares issued to share-
holders in reinvestment of
dividends and distributions 968,946 34,651,917
------------- --------------
Total issued 4,437,637 166,554,453
Shares redeemed (5,130,823) (190,784,222)
------------- --------------
Net decrease (693,186) $ (24,229,769)
============= ==============
Class D Shares for the Six Months Dollar
Ended December 31, 1999 Shares Amount
Shares sold 3,531,585 $ 139,826,966
Automatic conversion of
shares 3,288,584 130,979,550
Shares issued to shareholders
in reinvestment of dividends
and distributions 4,234,118 165,539,229
------------- --------------
Total issued 11,054,287 436,345,745
Shares redeemed (6,480,875) (255,562,166)
------------- --------------
Net increase 4,573,412 $ 180,783,579
============= ==============
Class D Shares for the Year Dollar
Ended June 30, 1999 Shares Amount
Shares sold 8,724,946 $ 335,847,226
Automatic conversion of
shares 6,315,960 245,296,730
Shares issued to shareholders
in reinvestment of dividends
and distributions 3,334,999 122,301,439
------------- --------------
Total issued 18,375,905 703,445,395
Shares redeemed (14,787,957) (568,853,955)
------------- --------------
Net increase 3,587,948 $ 134,591,440
============= ==============
PORTFOLIO INFORMATION
As of December 31, 1999
Percent of
Ten Largest Holdings Net Assets
Exxon Mobil Corporation 4.8%
Citigroup Inc. 4.5
International Business Machines
Corporation 4.1
Telefonica SA (ADR) 3.4
Koninklijke (Royal) Philips Electronics
NV (NY Registered Shares) 3.2
Wells Fargo Company 3.0
Royal Dutch Petroleum Company
(NY Registered Shares) 2.6
Hewlett-Packard Company 2.4
SBC Communications Inc. 2.4
Ford Motor Company 2.1
Merrill Lynch Basic Value Fund, Inc.
December 31, 1999
OFFICERS AND DIRECTORS
Terry K. Glenn, President and Director
M. Colyer Crum, Director
Laurie Simon Hodrick, Director
Jack B. Sunderland, Director
J. Thomas Touchton, Director
Fred G. Weiss, Director
Arthur Zeikel, Director
Robert C. Doll, Senior Vice President
Paul M. Hoffmann, Senior Vice President
and Co-Portfolio Manager
Kevin M. Rendino, Senior Vice President
and Co-Portfolio Manager
Donald C. Burke, Vice President and
Treasurer
Thomas D. Jones, III, Secretary
Donald Cecil and Edward H. Meyer, Directors of Merrill Lynch Basic
Value Fund, Inc. have recently retired. The Fund's Board of
Directors wishes Mr. Cecil and Mr. Meyer well in their retirements.
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
