MERRILL LYNCH SERIES FUND, INC.
SUPPLEMENT DATED JULY 24, 2000
TO STATEMENT OF ADDITIONAL INFORMATION DATED APRIL 4, 2000
THE FOLLOWING INFORMATION SUPERSEDES AND REPLACES THE INFORMATION
CONTAINED IN THE STATEMENT OF ADDITIONAL INFORMATION UNDER THE CAPTION
"INVESTMENT RESTRICTIONS":
INVESTMENT RESTRICTIONS
The Fund has adopted the following fundamental and non-fundamental
restrictions and policies relating to the investment of the assets of the
Portfolios and their activities. The fundamental policies set forth below may
not be changed without the approval of the holders of a majority of the
outstanding voting shares of each Portfolio affected (which for this purpose and
under the Investment Company Act of 1940, as amended (the "Investment Company
Act"), means the lesser of (i) 67% of the shares represented at a meeting at
which more than 50% of the outstanding shares of the affected Portfolio are
represented or (ii) more than 50% of the outstanding shares of the affected
Portfolio). The non-fundamental policies set forth below may be changed by vote
of a majority of the Fund's Board of Directors at any time.
RESTRICTIONS APPLICABLE TO EACH PORTFOLIO (EXCEPT THE MONEY RESERVE PORTFOLIO)
Each Portfolio (except the Money Reserve Portfolio) has adopted investment
restrictions numbered 1 through 9 as fundamental policies. Each Portfolio
(except the Money Reserve Portfolio) may not:
(1) Except with respect to the Natural Resources and Global Strategy
Portfolios, make any investment inconsistent with the Portfolio's classification
as a diversified company under the Investment Company Act.
(2) Invest more than 25% of its assets, taken at market value, in the
securities of issuers in any particular industry (excluding the U.S. Government
and its agencies and instrumentalities).
(3) Make investments for the purpose of exercising control or management.
(4) Purchase or sell real estate, except that a Portfolio may invest in
securities directly or indirectly secured by real estate or interests therein or
issued by companies which invest in real estate or interests therein.
(5) Purchase or sell commodities or contracts on commodities, except to the
extent that a Portfolio may do so in accordance with applicable law and the
Prospectus and Statement of Additional Information, as they may be amended from
time to time, and without registering as a commodity pool operator under the
Commodity Exchange Act.
(6) Make loans to other persons, except that the acquisition of bonds,
debentures, or other corporate debt securities and investment in government
obligations, commercial paper, pass-through instruments, certificates of
deposit, bankers acceptances, repurchase agreements or any similar instruments
shall not be deemed to be the making of a loan, and except further that a
Portfolio may lend its portfolio securities, provided that the lending of
portfolio securities may be made only in accordance with applicable law and the
guidelines set forth in the Fund's Prospectus and this Statement of Additional
Information, as they may be amended from time to time.
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(7) Borrow money, except that (i) a Portfolio may borrow from banks (as
defined in the Investment Company Act) in amounts up to 33-1/3% of its total
assets (including the amount borrowed), (ii) a Portfolio may borrow up to an
additional 5% of its assets for temporary purposes, (iii) a Portfolio may obtain
such short-term credit as may be necessary for the clearance of purchases and
sales of portfolio securities and (iv) a Portfolio may purchase securities on
margin to the extent permitted by applicable law. A Portfolio may not pledge its
assets other than to secure such borrowings or, to the extent permitted by a
Portfolio's investment policies as set forth in the Prospectus and the Statement
of Additional Information, as they may be amended from time to time, in
connection with hedging transactions, short sales, when-issued and forward
commitment transactions and similar investment strategies.
(8) Issue senior securities to the extent such issuance would violate
applicable law.
(9) Underwrite securities of other issuers except insofar as the Fund may
be deemed an underwriter under the Securities Act of 1933, as amended, in
selling portfolio securities.
Each Portfolio (except the Money Reserve Portfolio) has adopted investment
restrictions numbered (a) through (g) as non-fundamental policies. Under the
non-fundamental investment restrictions, each Portfolio (except the Money
Reserve Portfolio) may not:
(a) Purchase securities of other investment companies, except to the extent
such purchases are permitted by applicable law.
(b) Make short sales of securities or maintain a short position, except
that the Multiple Strategy, Natural Resources and Global Strategy Portfolios may
maintain short positions in forward currency contracts, options, futures
contracts and options on futures contracts.
(c) Purchase any securities on margin, except that a Portfolio may obtain
such short-term credit as may be necessary for the clearance of purchases and
sales of portfolio securities, and the Multiple Strategy, Natural Resources and
Global Strategy Portfolios may purchase securities on margin to the extent
permitted by applicable law.
(d) Except for the Multiple Strategy, Natural Resources and Global Strategy
Portfolios, write, purchase or sell puts, calls or combinations thereof, except
that the Capital Stock Portfolio and the Balanced Portfolio may write covered
call options.
(e) Except with respect to the Capital Stock Portfolio, the Natural
Resources Portfolio, the Global Strategy Portfolio and the Multiple Strategy
Portfolio, invest in securities of foreign issuers if at the time of acquisition
more than 10% of its total assets, and in the case of the Capital Stock
Portfolio 20% of its total assets, taken at market value at the time of the
investment, would be invested in such securities; provided, however, that up to
25% of the total assets of such Portfolio may be invested in securities (i)
issued, assumed or guaranteed by foreign governments, or political subdivisions
or instrumentalities thereof, (ii) assumed or guaranteed by domestic issuers,
including Eurodollar securities, or (iii) issued, assumed or guaranteed by
foreign issuers having a class of securities listed for trading on the New York
Stock Exchange. (As a matter of operating policy, however the Multiple Strategy
Portfolio will not invest in the securities of foreign issuers if at the time of
acquisition more than 25% of its total assets would be invested in such
securities. In addition, the Balanced Portfolio, as a matter of operating
policy, does not intend to invest any portion of its assets in the securities of
foreign issuers.) Consistent with the general policy of the SEC, the nationality
or domicile of an issuer for determination of foreign issuer status may be (i)
the country under whose laws the issuer is organized, (ii) the country in which
the issuer's securities are principally traded, or (iii) a country in which the
issuer derives a significant proportion (at least 50%) of its revenues or
profits from goods produced or sold, investments made, or services performed in
the country, or in which at least 50% of the assets of the issuer are situated.
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(f) Participate on a joint (or a joint and several) basis in any trading
account in securities (but this does not include the "bunching" of orders for
the sale or purchase of portfolio securities with the other Portfolios or with
individually managed accounts advised or sponsored by the Investment Adviser or
any of its affiliates to reduce brokerage commissions or otherwise to achieve
best overall execution).
(g) Purchase or retain the securities of any issuer, if those individual
officers and directors of the Fund, the Investment Adviser or any subsidiary
thereof each owning beneficially more than 1/2 of 1% of the securities of such
issuer, own in the aggregate more than 5% of the securities of such issuer.
RESTRICTIONS APPLICABLE TO THE MONEY RESERVE PORTFOLIO
The Money Reserve Portfolio has adopted investment restrictions numbered 1
through 9 as fundamental policies. The Money Reserve Portfolio may not:
(1) Make any investment inconsistent with the Portfolio's classification as
a diversified company under the Investment Company Act.
(2) Invest more than 25% of its assets, taken at market value, in the
securities of issuers in any particular industry (excluding securities issued by
the U.S. Government and its agencies and instrumentalities; and instruments
issued by domestic banks; and for purposes of this restriction, issuers of
asset-backed and mortgaged-backed securities will not be considered to be in an
industry).
(3) Make investments for the purpose of exercising control or management.
(4) Underwrite securities of other issuers except insofar as the Money
Reserve Portfolio technically may be deemed an underwriter under the Securities
Act of 1933, as amended, in selling portfolio securities.
(5) Purchase or sell real estate, except that, to the extent permitted by
applicable law, the Money Reserve Portfolio may invest in securities directly or
indirectly secured by real estate or interests therein or issued by companies
which invest in real estate or interests therein.
(6) Borrow money, except that (i) the Money Reserve Portfolio may borrow
from banks (as defined in the Investment Company Act) in amounts up to 33-1/3%
of its total assets (including the amount borrowed, (ii) the Money Reserve
Portfolio may borrow up to an additional 5% of its total assets for temporary
purposes, (iii) the Money Reserve Portfolio may obtain such short-term credit as
may be necessary for the clearance of purchases and sales of portfolio
securities, and (iv) the Money Reserve Portfolio may purchase securities on
margin to the extent permitted by applicable law. These borrowing provisions
shall not apply to reverse repurchase agreements as described in the Prospectus
and Statement of Additional Information. The Money Reserve Portfolio may not
pledge its assets other than to secure such borrowing or to the extent permitted
by the Money Reserve Portfolio's investment policies as set forth in the Fund's
Prospectus and this Statement of Additional Information, as they may be amended
from time to time, in connection with hedging transactions, short sales,
when-issued, reverse repurchase and forward commitment transactions and similar
investment strategies.
(7) Make loans to other persons, except that the acquisition of bonds,
debentures or other debt securities and investment in government obligations,
commercial paper, pass-through instruments, certificates of deposit, bankers'
acceptances, repurchase agreements or any similar instrument shall not be deemed
to be the making of a loan, and except further that the Money Reserve Portfolio
may lend its portfolio securities, provided that the lending of portfolio
securities may be made only in accordance with applicable law and the guidelines
set forth in the Fund's Prospectus and this Statement of Additional Information,
as they may be amended from time to time.
(8) Issue senior securities to the extent such issuance would violate
applicable law.
(9) Purchase or sell commodities or contracts on commodities, except to the
extent that the Money Reserve Portfolio may do so in accordance with applicable
law and the Fund's Prospectus and this
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Statement of Additional Information, as they may be amended from time to
time, and without registering as a commodity pool operator under the Commodity
Exchange Act.
SPECIAL CONSIDERATIONS WITH RESPECT TO THE NATURAL RESOURCES PORTFOLIO
In determining compliance by the Natural Resources Portfolio with its
policy on investing in the securities of issuers primarily engaged in the same
industry, management will rely on the industrial classifications contained in
the Standard & Poor's Register of Corporations, Directors and Executives.
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