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Merrill Lynch Variable
Series Funds, Inc.
Semi-Annual Report
June 30, 1994
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This report is not authorized for use as an offer of sale or a solicitation
of an offer to buy shares of the Funds unless accompanied or preceded by the
Funds' current prospectus. Past performance results shown in this report should
not be considered a representation of future performance. Investment return and
principal value of non-money market fund shares will fluctuate so that shares,
when redeemed, may be worth more or less than their original cost. For Domestic
Money Market Fund and Reserve Assets Fund, the Funds seek to maintain a
consistent $1.00 net asset value per share, although this cannot be assured. An
investment in the Funds is neither insured nor guaranteed by the US Government.
Merrill Lynch Variable Series Funds, Inc.
Box 9011
Princeton, NJ
08543-9011
#16897-6/94
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MERRILL LYNCH VARIABLE SERIES FUNDS, INC.
SEMI-ANNUAL REPORT--JUNE 30, 1994
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TO OUR SHAREHOLDERS:
We are pleased to submit this semi-annual report for Merrill Lynch Variable
Series Funds, Inc. in which we summarize the investment performance of each of
the Fund's portfolios and outline our views of the investment environment.
Performance information for each portfolio in Merrill Lynch Variable Series
Funds, Inc., excluding the Domestic Money Market Fund and Reserve Assets Fund,
can be found in the tables on pages 7 to 10 of this report to shareholders.
THE ENVIRONMENT
A sharp change in investor sentiment occurred during the six-month period
ended June 30, 1994. Following a series of better-than-expected economic
results, the Federal Reserve Board began to pursue a less accommodative monetary
policy, raising short-term interest rates a total of four times from February
through June month-end. The expectation of increasing inflationary pressures and
higher interest rates initially heightened investor concerns and increased
financial market volatility during the period. However, as the period drew to a
close, it was the weakness of the US dollar in foreign exchange markets that
dominated the financial news and prolonged stock and bond market declines.
The US dollar's weakness relative to other major currencies reflects the
deteriorating US trade deficit and widening net long-term capital outflows. In
1993, an expanding US economy and recession in other industrial countries led to
a higher level of imports and weaker export growth, widening the US trade
deficit further. In addition, global investors favored non-US dollar denominated
assets throughout 1993, which has further depressed the US dollar's value. This
trend is not improving significantly thus far in 1994 since foreign inflows into
US capital markets continue to decline, although US investors are investing
outside of the United States to a lesser degree.
Over the longer term, if the economies of the United States' major trading
partners expand (improving the prospects for US export growth), the outlook for
the US dollar is likely to improve. In the near term, central banks have
attempted to reverse the dollar's decline through currency market intervention.
These efforts have met with limited success thus far, giving rise to the concern
that the Federal Reserve Board will be forced to continue to raise short-term
interest rates to attract investment capital back to the United States and
bolster the US dollar's value. However, further interest rate increases may
jeopardize the US economic expansion. In the weeks ahead, investors will
continue to assess economic data and inflationary trends as they focus on the US
dollar in order to gauge whether further increases in short-term interest rates
are imminent.
AMERICAN BALANCED FUND
As of June 30, 1994, the Fund's asset allocation was: stocks (44%), bonds
(48.5%), and cash (8%). We increased the weighting in US bonds during the first
half of the year, taking advantage of the rise in intermediate-term and
long-term interest rates. Assets remained allocated to US Treasury obligations
with an average duration of six years. The expansion of the bond weighting
reflected expectations that US intermediate-term and long-term interest rates
could decline in coming months. Lower interest rates could result if the Federal
Reserve Board continues its gradual tightening of monetary policy through
further increases in short-term interest rates during the second half of 1994.
This policy is likely to result in a slowdown in the US economy and could reduce
fears of a resurgence of inflation.
On the other hand, these economic conditions could result in a continuing
unfavorable relative performance of US equities. The expectations of an economic
slowdown could raise concerns over the sustainability of earnings progress for
US companies over the next 12 months-18 months. In view of this outlook, we
reduced our commitment to US equities through the sale of AMR Corp., Kmart Corp.
and May Department Stores. We established a position in Merck & Co., Inc.,
reflecting our opinion that the reward/risk relationship for pharmaceutical
equities is now favorable following an extended period of underperformance. Our
favorable assessment of the healthcare industry does not extend to other
consumer staple groups, so that we remain underweighted in the consumer staples
sector. On the other hand, a slower US economy will affect the capital spending
and energy sectors to a lesser extent than is the case for consumer durable
equities. On this basis, we continue to overweight the capital spending and
energy sectors.
BASIC VALUE FOCUS FUND
The first six months of 1994 were marked by an overall weak stock market
following a series of Federal Reserve Board interest rate increases designed to
curtail a potential acceleration of inflation. Looking forward, the pace of
economic activity, and its effects on both interest rates and the US dollar,
will continue to impact the US stock market. It is our opinion that the next
phase in the stock market cycle will be earnings-driven. The key questions are
how high does the Federal Reserve Board have to raise interest rates to slow
gross domestic product (GDP) growth and alleviate worries of inflation, and will
that have an adverse effect on corporate earnings if the Federal Reserve Board
is too aggressive in slowing down the economy.
Since the Fund's inception in July 1993, we have talked about maintaining a
fairly high cash position in response to the historic high valuation levels of
the US stock market. Much of the past six months was spent investing that cash
as we followed the long-term 'basic value' strategy of buying weakness and
selling
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strength. For the six months ended June 30, 1994, we reduced our cash position
to 12% from 27% as we felt valuation levels were much more attractive. Although
the overall stock market has experienced a 10% correction, many issues have
declined even more, and as such we added to many of our existing positions in
the latest period with an emphasis on Western Digital Corp., Kmart Corp.,
Bristol-Myers Squibb Co., Eastman Chemical Co., General Motors Corp., Geneva
Steel Co., Valero Energy Corp. and Agency Rent-A-Car, Inc. Almost one-half of
our cumulative purchases in the period were concentrated in new positions,
including Atlantic Richfield Co., Aviall Inc., Bay Apartment Communities Inc.,
Conner Peripherals Inc., Digital Equipment Corp., Rouge Steel Co., Sara Lee
Corp. and Student Loan Marketing Association.
Partial sales during the six months included Eastman Chemical Co., General
Motors Corp., Geneva Steel Co., Greater New York Savings Bank, Reynolds Metals
Co., Rouge Steel Co., Total Petroleum Ltd. and Western Digital Corp. We
eliminated positions in Cyprus Minerals Co. and Federal Paper Board Co. Inc. at
sizable gains. Texfi Industries Inc., a manufacturer of a variety of textile
products and apparel, has had endless difficulties with its restructuring and
was eliminated from the Fund.
Although we reduced our cash position during the six-month period from 27% of
net assets to 12% as a result of improved valuation levels, we will continue to
exercise caution in our stock selection in this period of heightened volatility.
We concluded our first year of operation on June 30, 1994, and our net assets
have grown to $117 million from $2 million during the year.
DEVELOPING CAPITAL MARKETS FOCUS FUND
The Fund commenced operations on May 2, 1994. The poor performance of global
emerging markets during the June quarter resulted from the lessened liquidity of
shares as US monetary policy tightened, political uncertainties in various parts
of the world and the growing consensus that the major economies now will have
very little growth through the rest of 1994. This latter factor moderates the
potential for exports from emerging countries and may reduce the flow of
investments from the mature countries.
The declines in the world's equity markets virtually across-the-board
provided selective buying opportunities in emerging market stocks. We believe
that performance will be determined more by company fundamentals and less by
speculation, liquidity and momentum. We are therefore investing worldwide mainly
on a stock-by-stock, or bottom-up, basis.
In May we purchased ten-year global bonds issued by The Philippine Long
Distance Telephone Co. (PLDT), the dominant telecommunications firm in the
Philippines. These dollar-denominated bonds offer an attractive 10.625% coupon.
In addition, we expect to benefit from capital gains as the country's improving
internal situation reduces the political risk premium.
Our visits to a large number of companies in The People's Republic of China
reaffirmed the long-term attractions of this market, but we remain cautious on
Asia. We plan to increase investments in Latin America, Morocco and Hungary, but
stock selection will predominate over market selection.
DOMESTIC MONEY MARKET FUND
For the six-month period ended June 30, 1994, Domestic Money Market Fund's
net annualized yield was 3.32%*. The Fund's 7-day yield as of June 30, 1994 was
4.02% (excluding gains and losses) and 4.02% (including gains and losses).
For the six months ended June 30, 1994, Domestic Money Market Fund's
investment outlook became progressively less optimistic, as reflected in our
average portfolio maturity which peaked at a high of 78 days early in the period
and subsequently declined to a low of 33 days. For the most part, since the end
of 1993 interest rates have risen on the heels of continued economic expansion
and modest inflation. During this time frame, the Federal Reserve Board has
tightened monetary policy, raising the Federal Funds rate five times to its
current level of 4.75% and the discount rate to 4.00%.
Since our last shareholders' report, the Fund has adopted a more defensive
investment strategy. We reduced the Fund's average life by selling longer-term
Treasury securities as well as through attrition. New investments during the
period have mostly been restricted to money market securities with maturities of
overnight to 90 days. As a further hedge against rising interest rates, the Fund
has maintained approximately 15% of its assets in variable rate products.
Currently, the Fund's average life is 36 days. We will continue to remain
conservative in our commitment to the market until the Federal Reserve Board
implements a more neutral position on its monetary policy.
EQUITY GROWTH FUND
Investing in smaller-capitalization growth stocks during the first half of
1994 can be summed up in one word: volatility. Rocked by the 'triple whammy' of
interest rate hikes, US dollar weakness and fears of an overheating economy,
small-capitalization stocks declined for two consecutive quarters. By any
measures, including the unmanaged Russell 2000, NASDAQ Composite and Value Line
indexes, small-capitalization stocks tumbled much further than their larger
counterparts during the past six months. It is our view that this
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* Based on a constant investment throughout the period, with dividends
compounded daily, and reflecting a net return to the investor after all
expenses.
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volatility will, in time, provide investors with significant profit
opportunities.
Performance results were penalized by two underperforming groups in which the
Fund had a significant representation. Computer distributors were pummeled as
fears of an imminent slowdown in personal computer (PC) demand caused these
stocks to lose over one third of their value. Judging from the positive results
at both the PC manufacturers and component suppliers, we feel these fears are
unwarranted. A second area of weakness was the healthcare-related stocks. Fear,
uncertainty and doubt continued to reduce valuations in this group during the
past six months. As a very watered-down version of healthcare reform works its
way through Congress, these fears should abate, allowing these stocks to regain
their appeal.
During the first half of the year, the Fund focused on the liquidity risk in
the portfolio. We sold smaller, thinly-
traded issues, investing most of the proceeds in somewhat larger-capitalized,
more liquid companies. The Fund's cash position averaged 15% during the past
several months as we sought new opportunities along with a more stable market.
When hunting for investment ideas, we utilize a 'bottom up' company specific
approach. Macro views and sector preferences are eschewed in favor of assembling
a diversified portfolio. Profits of small-capitalization companies in general
are expected to increase an average of 25% in the just ended June quarter,
making some already attractive valuations even more compelling. Looking to the
second half of 1994 and beyond, we believe the Fund is well positioned to reap
the benefits of a steady growth, low-inflation economy.
FLEXIBLE STRATEGY FUND
Although first quarter estimates of GDP have been revised upward twice from
an original 2.6% to 3.3%, we continue to expect GDP growth to decelerate. Flat
money supply growth during the past two months and rising interest rates suggest
key industries, including housing and automobiles, will not be as stimulative to
the economy as in the past. Recent weakness of the US dollar in the foreign
exchange markets has discouraged capital from flowing into US stocks and bonds.
This should reverse as we expect productivity in the United States to continue
to rise, the trade imbalance to improve and the budget deficit to continue to
decline. Furthermore, we expect the US equity markets to strengthen in the
quarters ahead as corporate profits continue strong and we move further into an
earnings-driven stock market environment. The economic outlook for most of our
major trading partners is belatedly improving, which should fuel demand for US
products, particularly since they were effectively marked down by dollar
weakness. We continue to emphasize companies with strong and predictable
earnings growth prospects, especially firms which are not heavily dependent on
economic conditions for earnings growth.
Concerns over inflation, based on rising commodity prices and US dollar
weakness, seem overdone, although it is reasonable to expect interest rates to
rise on a worldwide basis as global demand re-accelerates. Since we expect
equities to benefit from higher earnings and increasing dividends, and the bulk
of total return from bonds to be derived from the current yield, the asset mix
shift is likely to favor equities in the quarters just ahead.
GLOBAL STRATEGY FOCUS FUND
As of June 30, 1994, the portfolio's asset allocation was: US stocks (15%),
foreign stocks (49%), US bonds (18%), foreign bonds (10%), and cash (8%). We
took advantage of higher interest rates in the US bond market to increase the US
fixed-income weighting during the first half of 1994. In our opinion, the
uptrend in intermediate-term and long-term interest rates in the United States
could give way to a decline during the second half of this year. Lower US
interest rates could result from evidence that a tightening of monetary policy
by the Federal Reserve Board is producing slower economic growth and is reducing
the probability of an acceleration of US inflation. We also eliminated our
positions in French and Swedish bonds and reestablished a position in German
bonds.
In the equity sector, we continued to enlarge our position in Japan. New
positions included Sumitomo Corp., Komatsu Ltd., Tokio Marine & Fire Insurance
Co., Ltd., Mitsubishi Electric Co., and Toray Industries Ltd. We believe that
evidence of an economic recovery and expectations of an earnings rebound should
result in continuing favorable relative performance for Japanese equities. We
reduced our position in emerging Asian markets through the elimination of our
commitments in Malaysia and Thailand. We have shifted our focus in emerging
markets more toward Latin America, where relative valuations seem more
attractive. Our position in US equities remains underweighted. The expected
progressive tightening of monetary policy, while favorable for US bonds, could
raise concerns over the sustainability of corporate earnings improvement in the
United States. On this basis, the US stock market is likely to continue to
underperform other equity markets in the months ahead.
GLOBAL UTILITY FOCUS FUND
The first half of the year has been difficult for utility investments across
all four sectors (electric, telephone, gas and water) around the world given
interest rate volatility and weak bond markets. The most notable decline has
been in the US-based electric utility stocks, with most electric utility indexes
showing a price decline of over 20%. The decline in the US-based electrics may
be attributed to rising long-term interest rates coupled with industry and
company announcements. For example, the California Public Utility
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Commission made a proposal which would allow for the opening up of its electric
retail market to competition. FPL Corp., a company in a relatively strong
financial position, surprised investors by slashing its dividend by 32%. Both
events weakened the stocks of utility companies and made investors wary of the
future of the industry. Overall, there were some pockets of strength in the
utility sector in the first half of the year. The electric sector was far better
in Europe and the Asia/Pacific region. The telecommunications sector was
strongest in the United States, albeit still negative on a price basis.
In the first half of the year we continued to diversify the portfolio even
further. The Fund expanded geographically with new investments in Denmark,
Germany and India. The approximate 19% weighting in the portfolio of US-based
electric utility stocks had a negative impact on overall results. The foreign
holdings and a relatively high cash balance helped negate the weakness in
domestic electric utility stocks.
HIGH CURRENT INCOME FUND
During the six-month period ended June 30, 1994, the high-yield bond market
eroded further in sympathy with intermediate-term and long-term US Treasury
securities. The latter markets were reacting to further Federal Reserve Board
tightening. Valuation remained little changed, with the yield premium of the
Merrill Lynch High Yield Master Index only slightly lower at 45% on June 30,
1994, compared with 46.4% at the beginning of the period.
The market turbulence created a number of attractive buying opportunities,
and our strategy involved selective buying during periods of pronounced
weakness. Over the course of the June period, new purchases ranged from 10.25%
to 13.50%, with an average yield of 12.375%. While it is difficult to say how
much further the trend to higher short-term interest rates may go, rising
interest rates bring the risk of economic weakening. With the impact of a
softening economy on corporate profits in mind, we have begun to move away from
companies whose earnings are correlated closely with the business cycle and into
less cyclical holdings. We are also tending to migrate up the credit quality
ladder, increasing the portion of the portfolio invested in BB-rated securities
and lowering the portion of holdings invested in B-rated securites. The yield
spreads between securities rated BB and those rated B are very tight
historically, at about 160 basis points (1.60%).
The positives for the high-yield market included excellent long-term
valuation, generally stable-to-improving credit quality as the result of strong
corporate profits and the continuing trend of reequitization (the replacement of
debt with equity on corporate balance sheets). The major negative is the overall
environment of rising short-term interest rates and soft bond prices. We expect
that this difficult period will provide opportunities to improve the Fund.
At June 30, 1994, the Fund's cash position was 5.5%. Average maturity of the
invested portion was 9 years. Major industries represented in the Fund included:
energy, 10.6% of net assets; food & beverage, 9.1%; hotels & casinos, 7.5%; and,
conglomerates, 7.6%.
INTERMEDIATE GOVERNMENT BOND FUND
Even though the rate of inflation remained contained during the first half of
the year, interest rates jumped at a faster pace than we have seen in a decade.
This was partly in response to the activity of the Federal Reserve Board, which
tightened short-term interest rates four times during the period. Other factors
also contributed to the jump in interest rates. These included the collapse of
trade talks with Japan, which led to a drop in the value of the US dollar to a
historic low in relation to the yen. Investors were also concerned about the
uncertainty surrounding the growing tension on the Korean peninsula, the
Whitewater situation and the assassination of a Mexican presidential candidate.
During the period, the interest rate on long-term US Treasury securities rose
from 4.61% to 7.61%.
As the cash available for investment comes into the Fund, it is being
invested in Treasury bills until a sufficient amount accumulates for diversified
investment in the appropriate intermediate sectors.
INTERNATIONAL BOND FUND
Since the Fund's inception (May 2, 1994) through June 30, 1994, we have
chosen to maintain a defensive posture given no clear signs that the downtrend
in prices has ended. As of June 30, the Fund had approximately 26% of net assets
in cash, with 55% in Western Europe, 10% in Australia, 8% in Canada and 3% in
Japan. The average maturity of the Fund's assets is about 6 years, and the
currency exposure is largely in US dollars.
Bond prices at current levels are very attractive given expectations of more
moderate growth in the United States and thus globally. Inflation on a global
basis remains subdued, with pressures unlikely to arise given current levels of
excess capacity. The major risk to global markets appears to be stronger US
growth from current levels which would cause monetray policy to be tightened
further, thereby preventing further drops in European short-term interest rates.
The US dollar has set new lows versus the yen in the last few weeks but remains
less than 2% above last year's levels, while relative to the Deutschemark the US
dollar is unchanged from September 1993. The outlook is mixed from current
levels, but downside pressure over the near term cannot be ruled out before a
renewal of the fall 1992 uptrend in the US dollar resumes.
INTERNATIONAL EQUITY FOCUS FUND
Our investment strategy for the Fund reflects an expectation of stronger
world growth. Global policy easing over the past three years has led to a
significant rebound in profits. At this stage of the cycle, we favor
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laggard markets and those linked to world trade growth and commodities.
As a result, the Fund continues to emphasize investments in Japan and Latin
America relative to Europe. Within Europe, the Fund's investments are
significantly geared toward recovery stocks. We recently extended the Fund's
exposure to the US dollar.
Looking ahead, we expect world equity markets to continue to outperform both
bonds and cash, but the extent of outperformance will be more closely linked to
earnings growth.
NATURAL RESOURCES FOCUS FUND
Strong demand for basic resources in both the United States and the
developing countries, along with evidence of economic recovery in Europe, helped
push commodity prices higher in many industrial sectors (such as base metals,
chemicals and paper products) during the period ended June 30. This general rise
in commodity prices, however, prompted the US Federal Reserve Board to raise
short-term interest rates to head off inflation pressures which, in turn,
unsettled stock and bond markets worldwide. After strong prices rises in
January, shares of many natural resource-related companies were sold as
investors feared rising interest rates would put a damper on economic growth
worldwide and thereby lower the demand for basic resources.
While this trend toward higher interest rates may keep downward pressure on
the world's equity markets in the near term, we remain optimistic about the
outlook for commodity pricing in general. The reason for higher interest rates
in the United States is a strong economy which, combined with prospects of
economic recovery in Europe and Japan, should support the underlying demand for
basic resources. This should lead to an improving earnings outlook, particularly
for many of the economically-sensitive natural resources companies.
Within the Fund, our largest exposure is to the energy sector. The decision
in March by the Organization of Petroleum Exporting Countries to maintain their
production quotas at current levels through the end of 1994 resulted in a sharp
decline in oil prices and energy-related stocks. Investors feared this agreement
would leave oil markets oversupplied as we entered the spring, traditionally a
weak period of demand. We used this weakness as an opportunity to purchase
select integrated, producing and oil service companies. We expected a more
positive pricing environment to emerge as improving fundamentals (including
below-normal inventories and steadily increasing demand) acted to tighten
supply/demand conditions as we moved toward the end of the year. In fact, oil
prices have already begun to discount this scenario and have risen sharply from
their lows in March. In addition, continuing corporate restructuring benefits as
well as refining and chemicals margin improvement should allow many of these
energy companies to maintain positive cash flow and earnings growth.
We also continue to focus on the industrial side of the business cycle where
growing worldwide demand is likely to improve the pricing environment for many
basic commodities. Accordingly, we increased the Fund's exposure to the base
metals sector and the paper and forest products sector, both of which should be
among the prime beneficiaries of increasing economic activity worldwide. In
addition, we initiated positions in several major gold producing companies.
While inflation at the consumer level remains subdued, pockets of inflation
pressures are building in the economy, particularly in industrial commodity
prices. The supply/demand fundamentals for gold are also turning more positive.
These factors should support gold prices and allow them to trend higher in the
long term.
PRIME BOND FUND
Even though the rate of inflation remained contained during the first half of
the year, interest rates jumped at a faster pace than we have seen in a decade.
This was partly in response to the activity of the Federal Reserve Board, which
tightened short-term interest rates four times during the period. Other factors
also contributed to the jump in interest rates. These included the collapse of
trade talks with Japan, which led to a drop in the value of the US dollar to a
historic low in relation to the yen. Investors were also concerned about the
uncertainty surrounding the growing tension on the Korean peninsula, the
Whitewater situation and the assassination of a Mexican presidential candidate.
During the period, the interest rate on long-term US Treasury securities rose
from 6.41% to 7.61%.
During the period, we shortened the average maturity of the portfolio from
8.95 years to 7.83 years, and we reduced the duration from 5.82 years to 4.44
years. This was accomplished by the sale of long-term maturity issues of
industrial companies whose prices we believed would be vulnerable in the current
environment. We also reduced our holdings of banks and thrift institutions. We
invested the proceeds in consumer financial services and in foreign sovereign
credits. We increased the Fund's cash and liquid holdings as well. This cautious
strategy reflected our concern that interest rates would continue to rise.
QUALITY EQUITY FUND
Although estimates of GDP for the first quarter have been revised upward
twice from an original 2.6% to 3.3%, we continue to expect GDP growth to
decelerate. Flat money supply growth during the past two months and rising
interest rates suggest key industries, including housing and autos, will not be
as stimulative to the economy as in the past. Recent weakness of the US dollar
in the foreign exchange markets has discouraged capital from flowing into US
stocks and bonds. This should reverse as we expect productivity in the United
States to continue to rise, the trade
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imbalance to improve and the budget deficit to continue to decline. Furthermore,
we expect the US equity markets to strengthen in the quarters ahead as corporate
profits continue strong and we move further into an earnings-driven stock market
environment. The economic outlook for most of our major trading partners is
belatedly improving, which should fuel demand for US products, particularly
since they were effectively marked down by dollar weakness. We continue to
emphasize companies with strong and predictable earnings growth prospects,
especially firms which are not heavily dependent on economic conditions for
earnings growth.
RESERVE ASSETS FUND
For the six-month period ended June 30, 1994, Reserve Assets Fund's net
annualized yield was 3.16%*. The Fund's 7-day yield as of June 30, 1994 was
3.77% (excluding gains and losses) and 3.77% (including gains and losses).
For the six months ended June 30, 1994, Reserve Assets Fund's investment
outlook became progressively less optimistic, as reflected in our average
portfolio maturity which peaked at a high of 85 days early in the period and
subsequently declined to a low of 35 days. For the most part, since the end of
1993, interest rates have risen on the heels of continued economic expansion and
modest inflation. During this time frame, the Federal Reserve Board has
implemented a tightening of monetary policy, raising the Federal Funds rate five
times to its current level of 4.75% and the discount rate to 4.00%.
Since our last shareholders' report, the Fund has adopted a more defensive
investment strategy. We reduced the Fund's average life by selling longer-term
Treasury securities as well as through attrition. New investments during the
period have mostly been restricted to money market securities with maturities of
overnight to 90 days. As a further hedge against rising interest rates, the Fund
has maintained approximately 30.0% of its assets in variable rate products.
Currently, the Fund's average life is 41 days. We will continue to remain
conservative in our commitment to the market until the Federal Reserve Board
takes a more neutral position on its monetary policy.
WORLD INCOME FOCUS FUND
During the last six months, the Fund's net assets grew from $50.7 million to
$78.0 million while the net asset value per share declined from $10.38 to $9.54.
The decline in net asset value during the first half of the year, caused by the
most severe price correction since the 1981 bull market began, largely reflected
a sharp increase in inflation fears subsequent to the Federal Reserve Board's
initial hike in the Federal Funds rate from 3.00% to 3.25% and a massive
deleveraging of long-term positions established in 1993 as this cost of funding
rose. This resulted in all fixed-income markets incurring a negative rate of
return.
The portfolio's current makeup from a broad-based geographic allocation is
largely unchanged from December 31, 1993. We reduced the Fund's exposure in
Sweden in favor of Spain, Denmark and the United Kingdom, while we made small
increases in Australia and Canada. In addition, we modestly reduced the Fund's
high-yield exposure. We shortened the average maturity of the portfolio,
reflecting our concern over the deleveraging impact on bond prices. The Fund
currently has modest exposures to the Canadian and Australian dollars while we
recently reduced the European currency exposure.
IN CONCLUSION
We appreciate your investment in Merrill Lynch Variable Series Funds, Inc.,
and we look forward to sharing our investment outlook and objectives with you in
our December annual report to shareholders.
Sincerely,
Arthur Zeikel
President
August 23, 1994
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* Based on a constant investment throughout the period, with dividends
compounded daily, and reflecting a net return to the investor after all
expenses.
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MERRILL LYNCH VARIABLE SERIES FUNDS, INC.
JUNE 30, 1994
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TOTAL RETURNS
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<TABLE>
<CAPTION>
12 MONTH 6 MONTH
6/30/94 12/31/93 6/30/93 % CHANGE % CHANGE
<S> <C> <C> <C> <C> <C>
AMERICAN BALANCED FUND $13.15 $14.08 $13.68 -1.34%(1) -5.24%(2)
BASIC VALUE FOCUS FUND 10.54 10.95 10.00* +5.75(3)* -3.43(3)
DEVELOPING CAPITAL MARKETS FOCUS FUND 9.71 -- 10.00** -2.90** --
EQUITY GROWTH FUND 18.39 20.96 17.92 +3.56(4) -11.46(4)
FLEXIBLE STRATEGY FUND 14.55 16.19 14.83 +3.74(5) -6.11(6)
GLOBAL STRATEGY FOCUS FUND 12.05 12.17 11.19 +9.72(7) +0.14(8)
GLOBAL UTILITY FOCUS FUND 9.64 10.66 10.00* -2.13(9)* -8.41(10)
HIGH CURRENT INCOME FUND 11.23 12.06 11.76 +3.53(11) -2.95(12)
INTERMEDIATE GOVERNMENT BOND FUND 10.03 -- 10.00** +0.50( 3)** --
INTERNATIONAL BOND FUND 9.81 -- 10.00** -1.59( 4)** --
INTERNATIONAL EQUITY FOCUS FUND 11.07 11.03 10.00* +12.26(15)* +1.78(15)
NATURAL RESOURCES FOCUS FUND 10.68 10.82 11.14 -3.13(16) -0.73(17)
PRIME BOND FUND 11.45 12.64 12.58 -2.18(18) -5.31(19)
QUALITY EQUITY FUND 26.91 29.02 26.51 +4.95(20) -4.69(21)
WORLD INCOME FOCUS FUND 9.54 10.38 10.00* +1.08(22)* -4.55(23)
</TABLE>
<TABLE>
<C> <S>
* Net asset values and total investment returns are from commencement of operations on July 1, 1993.
** Net asset values and total investment returns are from commencement of operations on May 2, 1994.
(1) Percent change includes reinvestment of $0.337 per share ordinary income dividends and $0.020 per share capital
gains distributions.
(2) Percent change includes reinvestment of $0.183 per share ordinary income dividends and $0.020 per share capital
gains distributions.
(3) Percent change includes reinvestment of $0.036 per share ordinary income dividends.
(4) Percent change includes reinvestment of $0.190 per share capital gains distributions.
(5) Percent change includes reinvestment of $0.448 per share ordinary income dividends and $0.415 per share capital
gains distributions.
(6) Percent change includes reinvestment of $0.301 per share ordinary income dividends and $0.387 per share capital
gains distributions.
(7) Percent change includes reinvestment of $0.208 per share ordinary income dividends and $0.011 per share capital
gains distributions.
(8) Percent change includes reinvestment of $0.126 per share ordinary income dividends and $0.011 per share capital
gains distributions.
(9) Percent change includes reinvestment of $0.154 per share ordinary income dividends.
(10) Percent change includes reinvestment of $0.130 per share ordinary income dividends.
(11) Percent change includes reinvestment of $0.951 per share ordinary income dividends.
(12) Percent change includes reinvestment of $0.485 per share ordinary income dividends.
(13) Percent change includes reinvestment of $0.020 per share ordinary income dividends.
(14) Percent change includes reinvestment of $0.031 per share ordinary income dividends.
(15) Percent change includes reinvestment of $0.154 per share ordinary income dividends.
(16) Percent change includes reinvestment of $0.113 per share ordinary income dividends.
(17) Percent change includes reinvestment of $0.061 per share ordinary income dividends.
(18) Percent change includes reinvestment of $0.850 per share ordinary income dividends and $0.041 per share capital
gains distributions.
(19) Percent change includes reinvestment of $0.497 per share ordinary income dividends and $0.041 per share capital
gains distributions.
(20) Percent change includes reinvestment of $0.540 per share ordinary income dividends and $0.391 per share capital
gains distributions.
(21) Percent change includes reinvestment of $0.424 per share ordinary income dividends and $0.354 per share capital
gains distributions.
(22) Percent change includes reinvestment of $0.583 per share ordinary income dividends.
(23) Percent change includes reinvestment of $0.380 per share ordinary income dividends.
</TABLE>
7
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.
JUNE 30, 1994
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR FIVE YEARS TEN YEARS SINCE
ENDED ENDED ENDED INCEPTION
6/30/94 6/30/94 6/30/94 TO 6/30/94
<S> <C> <C> <C> <C>
AMERICAN BALANCED FUND -1.34% +8.91% -- +9.19%+
BASIC VALUE FOCUS FUND -- -- -- +5.75%*
DEVELOPING CAPITAL MARKETS FOCUS FUND -- -- -- -2.90%+++*
EQUITY GROWTH FUND +3.56% +6.75% +7.12% --
FLEXIBLE STRATEGY FUND +3.74% +10.41% -- +9.38%++++
GLOBAL STRATEGY FOCUS FUND +9.72% -- -- +9.78%+++++
GLOBAL UTILITY FOCUS FUND -- -- -- -2.13%++*
HIGH CURRENT INCOME FUND +3.53% +12.67% +13.39% --
INTERMEDIATE GOVERNMENT BOND FUND -- -- -- +0.50%+++*
INTERNATIONAL BOND FUND -- -- -- -1.59%+++*
INTERNATIONAL EQUITY FOCUS FUND -- -- -- +12.26%++*
NATURAL RESOURCES FOCUS FUND -3.13% +3.70% -- +3.00%++++++
PRIME BOND FUND -2.18% +8.14% +11.10% --
QUALITY EQUITY FUND +4.95% +10.98% +14.88% --
WORLD INCOME FOCUS FUND -- -- -- +1.08%++*
</TABLE>
<TABLE>
<C> <S>
+ American Balanced Fund commenced operations on 6/01/88.
++ The Fund commenced operations on 7/01/93.
+++ The Fund commenced operations on 5/02/94.
++++ Flexible Strategy Fund commenced operations on 5/01/86.
+++++ Global Strategy Focus Fund commenced operations on 2/28/92.
++++++ Natural Resources Focus Fund commenced operations on 6/01/88.
* Aggregate total return.
</TABLE>
8
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.
JUNE 30, 1994
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT AVERAGE ANNUAL TOTAL RETURNS*
- --------------------------------------------------------------------------------
RETIREMENT PLUS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR FIVE YEARS TEN YEARS SINCE
ENDED ENDED ENDED INCEPTION
6/30/94 6/30/94 6/30/94 TO 6/30/94
<S> <C> <C> <C> <C>
AMERICAN BALANCED FUND -8.00% +6.50% -- +7.49%+
BASIC VALUE FOCUS FUND -- -- -- -2.37%++
DEVELOPING CAPITAL MARKETS FOCUS FUND -- -- -- -3.55%+++**
EQUITY GROWTH FUND -3.48% +4.87% +5.54% --
FLEXIBLE STRATEGY FUND -3.29% +8.51% -- +7.79%++++
GLOBAL STRATEGY FOCUS FUND +2.25% -- -- +6.18%+++++
GLOBAL UTILITY FOCUS FUND -- -- -- -9.62%++
HIGH CURRENT INCOME FUND -3.48% +10.78% +11.75% --
INTERMEDIATE GOVERNMENT BOND FUND -- -- -- +0.02%+++**
INTERNATIONAL BOND FUND -- -- -- -1.96%+++**
INTERNATIONAL EQUITY FOCUS FUND -- -- -- +3.66%++
NATURAL RESOURCES FOCUS FUND -9.66% +1.85% -- +1.37%++++++
PRIME BOND FUND -8.77% +6.26% +9.49% --
QUALITY EQUITY FUND -2.17% +9.10% +13.22% --
WORLD INCOME FOCUS FUND -- -- -- -6.66%++
</TABLE>
<TABLE>
<C> <S>
* Returns are calculated as if the contract were surrendered at the end of the periods shown and assume the
separate account had been in existence and a contract had been in force during the periods shown. They reflect
separate account charges deducted daily at an annual rate of 1.25% mortality and expense risk charge, and a 0.10%
administrative charge. In addition, a contingent deferred sales charge incrementally decreasing from 7% in the
first year a premium is invested in the contract to 0% the eighth year and later that the premium remains in the
contract, deducted on the last day of the period shown and a contract maintenance charge of $40 are reflected.
All charges and fees are described in the product prospectuses. See those prospectuses for more complete
information.
** Cumulative total return.
+ American Balanced Fund commenced operations on 6/01/88.
++ The Fund commenced operations on 7/01/93.
+++ The Fund commenced operations on 5/02/94.
++++ Flexible Strategy Fund commenced operations on 4/30/86.
+++++ Global Strategy Focus Fund commenced operations on 2/28/92.
++++++ Natural Resources Focus Fund commenced operations on 6/01/88.
Investment results and principal value will fluctuate so that an investment may be worth more or less than its original
cost. Past performace illustrated should not be considered a representation of future performance.
</TABLE>
9
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.
JUNE 30, 1994
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT AVERAGE ANNUAL TOTAL RETURNS* (CONCLUDED)
- --------------------------------------------------------------------------------
PORTFOLIO PLUS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR FIVE YEARS TEN YEARS SINCE
ENDED ENDED ENDED INCEPTION
6/30/94 6/30/94 6/30/94 TO 6/30/94
<S> <C> <C> <C> <C>
AMERICAN BALANCED FUND -6.99% +6.23% -- +7.22%+
EQUITY GROWTH FUND -2.27% +4.58% +6.05% --
FLEXIBLE STRATEGY FUND -2.09% +8.29% -- +7.90%++
HIGH CURRENT INCOME FUND -2.30% +10.57% +11.99% --
NATURAL RESOURCES FOCUS FUND -8.68% +1.49% -- +0.94%+++
PRIME BOND FUND -7.78% +6.00% +9.63% --
QUALITY EQUITY FUND -0.90% +8.87% +12.58% --
</TABLE>
<TABLE>
<C> <S>
* Returns are calculated as if the contract were surrendered at the end of the periods shown. They reflect separate
account charges deducted daily at an annual rate of 1.25% mortality and expense risk charge, and 0.05% distribution
expense charge. (Family Life Insurance Company contracts are assessed a 1.30% mortality and expense risk charge and
no distribution expense charge.) In addition, a contingent deferred sales charge of 5% for the first seven years the
premium remains in the contract, deducted on the last day of the period shown, and a contract administration charge
of $30 are reflected. All charges and fees are described in the product prospectuses. See those prospectuses for
more complete information.
Charges reflected are for non-qualified contracts. Qualified contracts have a lower expense risk charge. Average
annual total returns for those contract owners would, therefore, be higher than the returns shown above.
+ American Balanced Fund commenced operations on 6/01/88.
++ Flexible Strategy Fund commenced operations on 4/30/86.
+++ Natural Resources Focus Fund commenced operations on 6/01/88.
</TABLE>
Investment results and principal value will fluctuate so that an investment may
be worth more or less than its original cost. Past performance illustrated
should not be considered a representation of future performance.
10
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.--AMERICAN BALANCED FUND
SCHEDULE OF INVESTMENTS AS OF JUNE 30, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE PERCENT OF
INDUSTRY HELD COMMON STOCKS COST (NOTE 1A) NET ASSETS
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
AEROSPACE 42,000 United Technologies Corp......... $ 2,368,095 $ 2,698,501 1.8%
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
ALUMINUM 33,700 Aluminum Co. of America.......... 2,357,802 2,464,312 1.5
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
BANKING 42,000 Morgan (J.P.) & Co............... 2,772,971 2,598,751 1.7
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
BUILDING-RELATED 57,700 Stanley Works Co................. 2,387,409 2,322,425 1.6
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
CHEMICALS 47,100 Eastman Chemical Co.............. 2,041,302 2,249,025 1.5
82,400 Nalco Chemical Co................ 2,742,236 2,626,500 1.8
4,783,538 4,875,525 3.3
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
COMPUTER TECHNOLOGY 30,600 Hewlett-Packard Co............... 2,149,543 2,306,475 1.5
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
CONSUMER--SERVICES 88,000 Kelly Services, Inc.............. 2,331,400 2,376,000 1.6
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
DRUGS 57,000 Bristol-Myers Squibb Co.......... 3,241,646 3,056,625 2.0
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
ENERGY RELATED 121,000 + California Energy Co. Inc........ 2,187,016 1,996,500 1.3
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
ENVIRONMENTAL CONTROL 117,792 + Wheelabrator Technologies Inc.... 2,020,862 2,193,876 1.5
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
FOODS 116,870 Archer-Daniels-Midland Co........ 2,699,457 2,717,227 1.8
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
HEALTH CARE 117,400 + Humana Inc....................... 1,418,340 1,893,075 1.3
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
MACHINERY 77,700 Ingersoll-Rand Co................ 2,609,065 2,729,212 1.8
116,100 Morrison Knudsen Corp............ 2,650,861 2,496,150 1.7
5,259,926 5,225,362 3.5
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
MISCELLANEOUS--MANUFACTURING 112,900 Keystone International, Inc...... 2,818,353 2,201,550 1.5
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
NATURAL GAS 51,900 Consolidated Natural Gas Co...... 2,433,135 1,959,225 1.3
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
OFFICE RELATED 58,800 Pitney-Bowes, Inc................ 2,353,161 2,249,100 1.5
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
OIL--INTEGRATED 90,500 Phillips Petroleum Co............ 2,637,514 2,828,125 1.9
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
PETROLEUM & EQUIPMENT SERVICE 110,300 Dresser Industries, Inc.......... 2,320,493 2,261,150 1.5
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
PHARMACEUTICALS 101,000 Merck & Co., Inc................. 3,482,470 3,004,750 2.0
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
PHOTOGRAPHY 57,400 Eastman Kodak Co................. 2,420,080 2,762,375 1.9
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
PRINT/PUBLISHING 41,200 Gannett Co., Inc................. 2,077,465 2,039,400 1.3
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
SEMICONDUCTOR 96,000 + Teradyne, Inc.................... 1,926,152 2,544,000 1.7
PRODUCTION EQUIPMENT
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
TELECOMMUNICATIONS 47,800 American Telephone & Telegraph 2,547,530 2,599,125 1.8
Co...............................
49,600 Bell Atlantic Corp............... 2,701,464 2,777,600 1.9
86,500 Comsat Corp...................... 2,451,106 2,011,125 1.3
7,700,100 7,387,850 5.0
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
TOTAL COMMON STOCKS.............. 66,146,928 65,962,179 44.0
</TABLE>
- --------------------------------------------------------------------------------
11
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.--AMERICAN BALANCED FUND
SCHEDULE OF INVESTMENTS AS OF JUNE 30, 1994 (CONCLUDED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE VALUE PERCENT OF
AMOUNT US GOVERNMENT OBLIGATIONS COST (NOTE 1A) NET ASSETS
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
US TREASURY NOTES US Treasury Notes:
$ 1,250,000 6.375% due 1/15/2000................ $ 1,277,148 $ 1,214,262 0.8%
24,650,000 5.50% due 4/15/2000................. 24,649,336 22,916,859 15.3
700,000 7.75% due 2/15/2001................. 706,094 721,763 0.5
1,400,000 8.00% due 5/15/2001................. 1,387,922 1,462,342 1.0
200,000 7.875% due 8/15/2001................ 204,031 207,500 0.1
1,300,000 7.50% due 11/15/2001................ 1,315,492 1,319,500 0.9
900,000 7.5% due 5/15/2002.................. 955,500 912,798 0.6
3,500,000 6.375% due 8/15/2002................ 3,457,688 3,305,295 2.2
12,550,000 6.25% due 2/15/2003................. 12,863,703 11,698,984 7.8
12,750,000 5.75% due 8/15/2003................. 12,841,898 11,411,250 7.6
10,300,000 5.875% due 2/15/2004................ 9,682,422 9,258,773 6.2
8,300,000 7.25% due 5/15/2004................. 8,410,797 8,253,271 5.5
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
TOTAL US GOVERNMENT OBLIGATIONS..... 77,752,031 72,682,597 48.5
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
SHORT-TERM SECURITIES
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
COMMERCIAL PAPER* 5,052,000 General Electric Capital Corp., 5,051,397 5,051,397 3.4
4.30% due 7/01/1994.................
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
US GOVERNMENT 4,000,000 US Treasury Bill, 3,964,751 3,964,237 2.6
DISCOUNT NOTES* 4.12% due 9/15/1994.................
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
TOTAL SHORT-TERM SECURITIES......... 9,016,148 9,015,634 6.0
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
TOTAL INVESTMENTS................... $152,915,107 147,660,410 98.5
------------
------------
OTHER ASSETS LESS LIABILITIES....... 2,227,826 1.5
NET ASSETS.......................... $149,888,236 100.0%
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Non-income producing security.
* Commercial Paper and US Government Discount Notes are traded on a discount basis; the interest rates shown are the
+ discount rates paid at the time of purchase by the Fund.
</TABLE>
See Notes to Financial Statements.
12
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.--BASIC VALUE FOCUS FUND
SCHEDULE OF INVESTMENTS AS OF JUNE 30, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE PERCENT OF
INDUSTRY HELD COMMON STOCKS COST (NOTE 1A) NET ASSETS
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
DISCOUNT FROM BOOK VALUE
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
METALS 10,000 ASARCO Inc........................ $ 215,650 $ 281,250 0.3%
AEROSPACE 150,000 Aviall Inc........................ 2,234,988 1,293,750 1.1
COMPUTERS 150,000 + Digital Equipment Corp............ 3,722,071 2,906,250 2.5
SAVINGS & LOAN ASSOCIATION 100,000 GP Financial Corp................. 1,960,625 2,212,500 1.9
SAVINGS & LOAN ASSOCIATION 230,000 Greater N.Y. Savings Bank......... 1,746,113 2,242,500 1.9
TECHNOLOGY 450,000 Micronics Computers, Inc.......... 2,305,972 1,912,500 1.6
SAVINGS & LOAN 170,000 River Bank America................ 1,530,000 1,530,000 1.3
ASSOCIATION
OIL--INTEGRATED 100,000 Total Petroleum N.A., Ltd......... 1,283,458 1,200,000 1.0
14,998,877 13,578,750 11.6
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
BELOW-AVERAGE PRICE/EARNINGS RATIO
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
CONGLOMERATES 245,000 + ADT Ltd........................... 2,260,325 2,480,625 2.1
AUTOMOBILES 230,000 + Agency Rent-A-Car, Inc............ 2,761,367 2,530,000 2.2
BANKING 80,000 BankAmerica Corp.................. 3,545,537 3,660,000 3.1
HOME--BUILDERS 160,000 + Beazer Homes USA, Inc............. 2,725,150 2,440,000 2.1
TEXTILES 85,600 + Burlington Industries, Inc........ 1,202,680 1,251,900 1.1
HOUSING 238,100 Castle & Cooke Homes, Inc......... 2,965,293 2,291,713 2.0
COMPUTER EQUIPMENT 85,000 + Conner Peripherals, Inc........... 1,231,575 1,030,625 0.9
AUTOMOBILES 60,000 General Motors Corp............... 3,254,425 3,015,000 2.6
PHARMACEUTICALS 70,000 Merck & Co., Inc.................. 2,224,375 2,082,500 1.8
INSURANCE 100,000 PartnerRe Holdings Ltd............ 2,029,881 2,025,000 1.7
BANKING & FINANCIAL 200,000 Peoples Heritage Financial Group, 2,288,568 2,600,000 2.2
Inc...............................
STEEL 70,000 + Rouge Steel Company (Class A)..... 1,564,378 1,881,250 1.6
RETAIL 60,000 Sears, Roebuck & Co............... 3,043,578 2,880,000 2.5
FINANCIAL SERVICES 100,000 Student Loan Marketing 4,032,876 3,600,000 3.1
Association.......................
INSURANCE 90,000 Travelers Inc..................... 3,479,674 2,902,500 2.5
INFORMATION PROCESSING 160,000 + Unisys Corp....................... 2,005,225 1,480,000 1.2
ENERGY 153,400 Valero Energy Corp................ 3,210,616 2,684,500 2.2
COMPUTER & EQUIPMENT 200,000 + Western Digital Corp.............. 2,491,075 2,550,000 2.2
46,316,598 43,385,613 37.1
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
ABOVE-AVERAGE YIELD
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
OIL/DOMESTIC 25,000 Atlantic Richfield Co............. 2,460,592 2,553,125 2.1
REAL ESTATE INVESTMENT TRUST 120,000 Bay Apartment Communities, Inc.... 2,400,000 2,460,000 2.1
PHARMACEUTICALS 60,000 Bristol-Myers Squibb Co........... 3,321,099 3,217,500 2.8
REAL ESTATE INVESTMENT TRUST 120,000 Camden Property Trust Inc......... 2,907,225 2,940,000 2.5
CHEMICALS 60,000 Eastman Chemical Company.......... 2,500,925 2,865,000 2.5
PHOTOGRAPHY 70,000 Eastman Kodak Co.................. 3,137,689 3,368,750 2.9
OIL SERVICES 100,000 Halliburton Co.................... 3,244,750 3,375,000 2.9
MERCHANDISING 140,000 K mart Corp....................... 2,825,400 2,170,000 1.9
REAL ESTATE INVESTMENT TRUST 100,000 + Liberty Property Trust............ 2,010,456 2,000,000 1.7
OIL/DOMESTIC 150,000 Occidental Petroleum Corp......... 2,738,455 2,831,250 2.4
TOBACCO 60,000 Philip Morris Cos. Inc............ 3,255,500 3,090,000 2.6
30,802,091 30,870,625 26.4
</TABLE>
- --------------------------------------------------------------------------------
13
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.--BASIC VALUE FOCUS FUND
SCHEDULE OF INVESTMENTS AS OF JUNE 30, 1994 (CONCLUDED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE PERCENT OF
INDUSTRY HELD COMMON STOCKS COST (NOTE 1A) NET ASSETS
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
SPECIAL SITUATIONS
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
MEDICAL SERVICES 308,000 + Applied Bioscience International, $ 1,559,876 $ 1,771,000 1.5%
Inc...............................
STEEL 105,000 Geneva Steel Co. (Class A)........ 1,617,620 1,771,875 1.5
OIL & GAS PRODUCERS 100,000 Gerrity Oil & Gas Corp............ 1,339,313 912,500 0.8
OIL SERVICES 225,000 + Lone Star Industries, Inc......... 1,807,938 1,575,000 1.3
TECHNOLOGY 450,000 + Network Systems Corp.............. 3,756,449 2,925,000 2.5
METALS 10,000 Reynolds Metals Co................ 486,433 480,000 0.4
FOOD & HOUSEHOLD PRODUCTS 150,000 Sara Lee Corp..................... 3,296,038 3,187,500 2.7
ENVIRONMENTAL 300,000 + TETRA Technologies, Inc........... 2,300,212 2,512,500 2.2
ENERGY 350,000 + Varco International Inc........... 2,095,544 2,362,500 2.0
18,259,423 17,497,875 14.9
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
TOTAL COMMON STOCKS............... 110,376,989 105,332,863 90.0
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE
AMOUNT SHORT-TERM SECURITIES
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
COMMERCIAL PAPER* $3,000,000 Ciesco L.P., 4.22% due 2,995,780 2,995,780 2.5
7/12/1994.......................
4,218,000 General Electric Capital Corp., 4,217,496 4,217,496 3.6
4.30% due 7/01/1994.............
5,000,000 Preferred Receivables Funding 4,992,900 4,992,900 4.3
Corp., 4.26% due 7/12/1994......
2,000,000 Wal-Mart Stores, Inc., 4.20% due 1,993,233 1,993,233 1.7
7/29/1994.......................
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
TOTAL SHORT-TERM SECURITIES....... 14,199,409 14,199,409 12.1
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
TOTAL INVESTMENTS................. $124,576,398 119,532,272 102.1
------------
------------
LIABILITIES IN EXCESS OF OTHER (2,426,376) (2.1)
ASSETS..........................
NET ASSETS........................ $117,105,896 100.0%
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
* 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.
+ Non-income producing security.
</TABLE>
See Notes to Financial Statements.
14
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.--DEVELOPING CAPITAL MARKETS FOCUS FUND
SCHEDULE OF INVESTMENTS AS OF JUNE 30, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES HELD/ VALUE PERCENT OF NET
EUROPE INDUSTRY FACE AMOUNT INVESTMENTS COST (NOTE 1A) ASSETS
<S> <C> <C> <C> <C> <C> <C> <C> <C>
HUNGARY FOOD 949 ++ Pick Szeged
Reszvenytarsasag
(ADR)*................ $ 65,329 $ 56,380 0.4%
TOTAL INVESTMENTS IN
HUNGARY............... 65,329 56,380 0.4
TOTAL INVESTMENTS IN
EUROPE................ 65,329 56,380 0.4
LATIN AMERICA
BRAZIL AUTOMOTIVE 7,000 + Clark Automotive
Products Corp. S.A.... 75,670 72,625 0.5
TELECOMMUNICATIONS 15,000 Telecomunicacoes
Brasileiras
S.A.--Telebras PN
(ADR)*................ 573,740 571,875 4.3
UTILITIES 21,400 + Companhia Energetica de
Minas Gerais S.A.
(CEMIG) (ADR)*........ 350,404 371,825 2.8
TOTAL INVESTMENTS IN
BRAZIL................ 999,814 1,016,325 7.6
MEXICO BEVERAGES & TOBACCO 17,500 Grupo Embotellador de
Mexico, S.A. de C.V.
(GGEMEX).............. 497,000 441,875 3.3
BUILDING & 39,000
CONSTRUCTION
Tolmex, S.A. de C.V..... 455,106 394,602 3.0
FINANCIAL SERVICES 26,000 ++ Grupo Financiero (GBM)
Atlantico, S.A. de
C.V.
(Class L)............. 517,525 520,000 3.9
METALS 12,000 Grupo Simec, S.A. de
C.V. (ADR)*........... 301,145 232,500 1.7
PUBLISHING & 56,500 Vitro, S.A. de C.V......
390,094 358,333 2.7
BROADCASTING 12,200 Vitro, S.A. de C.V.
(ADR)*................ 258,423 231,800 1.8
648,517 590,133 4.5
UTILITIES 10,000 Telefonos de Mexico,
S.A. de C.V. (ADR)*... 585,600 558,750 4.2
TOTAL INVESTMENTS IN
MEXICO................ 3,004,893 2,737,860 20.6
TOTAL INVESTMENTS IN
LATIN AMERICA......... 4,004,707 3,754,185 28.2
PACIFIC
BASIN/ASIA
HONG KONG AUTOMOTIVE 254,000 Sime Darby (Hong Kong)
Ltd................... 406,139 391,073 3.0
BANKING 36,800 Honk Kong and Shanghai
Banking Corp. Holdings
PLC................... 411,087 402,329 3.0
DIVERSIFIED 54,000 Jardine Matheson
Holdings, Ltd......... 405,044 415,707 3.1
REAL ESTATE 85,000 Cheung Kong Holdings
Ltd................... 416,326 371,167 2.8
UTILITIES 196,000 Hong Kong & China Gas
Co. (The)............. 412,691 375,314 2.8
UTILITIES--ELECTRIC 76,000 China Light & Power Co.,
Ltd................... 408,589 388,407 2.9
TOTAL INVESTMENTS IN
HONG KONG............. 2,459,876 2,343,997 17.6
INDONESIA BROADCASTING & $ 15,000 ++ P.T. Surya Citra
PUBLISHING Television, 4.00% due
7/01/1997............. 15,000 14,925 0.1
TOTAL INVESTMENTS IN
INDONESIA............. 15,000 14,925 0.1
</TABLE>
15
<PAGE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PHILIPPINES TELECOMMUNICATIONS $ 1,000,000 Philippine Long Distance
Telephone Co., 10.625%
due 6/02/2004......... $ 1,015,000 $ 987,500 7.4%
TOTAL INVESTMENTS IN THE
PHILIPPINES........... 1,015,000 987,500 7.4
TOTAL INVESTMENTS IN THE
PACIFIC BASIN/ASIA.... 3,489,876 3,346,422 25.1
<CAPTION>
SHORT-TERM SECURITIES**
<S> <C> <C> <C> <C> <C> <C> <C> <C>
COMMERCIAL 195,000 General Electric Capital
PAPER Corp., 4.30% due
7/01/1994............. 195,000 195,000 1.5
US GOVERNMENT & 2,000,000 Federal Farm Credit
AGENCY OBLIGATIONS Banks, 4.15% due
7/13/1994............. 1,997,233 1,997,233 15.0
400,000 Federal Home Loan Bank,
4.17% due 7/05/1994... 399,815 399,815 3.0
500,000 Federal Home Loan
Mortgage Association,
4.21% due 7/14/1994... 499,240 499,240 3.8
Federal National
Mortgage
Association:..........
1,900,000 4.10% due 7/08/1994..... 1,898,485 1,898,485 14.2
500,000 4.20% due 7/21/1994..... 498,833 498,833 3.7
5,293,606 5,293,606 39.7
TOTAL INVESTMENTS IN
SHORT-TERM
SECURITIES............ 5,488,606 5,488,606 41.2
TOTAL INVESTMENTS....... $13,048,518
12,645,593 94.9
OTHER ASSETS LESS
LIABILITIES........... 676,051 5.1
NET ASSETS..............
$13,321,644 100.0%
</TABLE>
<TABLE>
<C> <S>
* American Depositary Receipt (ADR).
** Commercial Paper and certain US Government & Agency Obligations are traded on a discount basis; the interest rates
shown are the discount rates paid at the time of purchase by the Fund.
+ Non-income producing security.
++ Restricted securities. The value of the Fund's investment in restricted securities was approximately $591,000,
representing 4.4% of net assets.
</TABLE>
See Notes to Financial Statements.
16
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.--DOMESTIC MONEY MARKET FUND
SCHEDULE OF INVESTMENTS AS OF JUNE 30, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE INTEREST MATURITY VALUE
AMOUNT ISSUE RATE* DATE (NOTE 1A)
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
COMMERCIAL
PAPER*--78.0% $ 4,246,000 ABN-AMRO N.A. Finance, Inc....................... 4.45 % 9/16/94 $ 4,203,222
5,000,000 APRECO Inc....................................... 3.87 7/05/94 4,997,104
3,000,000 Abbey National North America Corp................ 4.05 9/28/94 2,965,125
5,000,000 Anz (Delaware), Inc.............................. 4.37 8/18/94 4,970,260
5,000,000 Asset Securitization Coop Corp................... 4.35 8/10/94 4,975,229
2,500,000 BNP US Financial Corp............................ 4.05 9/29/94 2,470,615
10,000,000 Bear Stearns Cos., Inc. (The).................... 4.45 8/22/94 9,934,192
4,000,000 CSW Credit, Inc.................................. 4.35 7/01/94 3,999,517
3,000,000 CSW Credit, Inc.................................. 4.35 7/05/94 2,998,187
6,500,000 CSW Credit, Inc.................................. 4.33 7/20/94 6,484,364
8,211,000 CXC Inc.......................................... 4.35 8/16/94 8,163,082
5,000,000 Corporate Receivable Corporation................. 4.42 9/12/94 4,952,208
3,346,000 Dun & Bradstreet Corporation (The)............... 4.32 8/16/94 3,326,473
3,000,000 ESC Securitization Inc........................... 4.45 9/12/94 2,971,325
10,000,000 General Electric Capital Corp.................... 4.50 8/30/94 9,922,903
4,000,000 Goldman Sachs Group L.P.......................... 4.30 7/11/94 3,994,744
8,690,000 Goldman Sachs Group L.P.......................... 4.50 9/06/94 8,613,673
12,051,000 Grand Metropolitan Investment Corp............... 4.45 8/22/94 11,971,694
3,000,000 Grand Metropolitan Investment Corp............... 4.66 11/28/94 2,939,600
7,205,000 Hertz Funding Corporation........................ 4.50 8/22/94 7,157,585
4,487,000 Hertz Funding Corporation........................ 4.42 9/06/94 4,447,589
8,000,000 International Lease Finance Corp................. 3.90 7/11/94 7,989,611
5,000,000 Kredietbank N.A. Finance Corp.................... 4.17 7/29/94 4,982,681
2,000,000 McKenna Triangle National Corp................... 4.47 8/22/94 1,986,838
12,000,000 MetLife Funding Inc.............................. 4.45 8/22/94 11,921,030
9,372,000 Morgan Stanley Group Inc......................... 4.40 7/01/94 9,370,855
4,974,000 NationsBank Corp................................. 4.48 8/23/94 4,940,649
7,274,000 Nomura Holding America, Inc...................... 4.45 7/01/94 7,273,101
5,000,000 Nomura Holding America, Inc...................... 4.45 9/12/94 4,952,208
5,000,000 PACCAR Financial Corp............................ 4.50 9/02/94 4,958,667
10,000,000 PHH Corporation.................................. 4.32 7/22/94 9,973,600
2,290,000 PHH Corporation.................................. 4.30 7/25/94 2,283,162
10,000,000 Paribas Finance, Inc............................. 4.25 7/05/94 9,994,097
5,031,000 Premium Funding, Inc., Series A.................. 4.35 8/01/94 5,011,547
10,000,000 Premium Funding, Inc., Series A.................. 4.57 10/06/94 9,872,056
10,210,000 Sheffield Receivables Corp....................... 4.26 7/18/94 10,188,253
10,000,000 Svenska Handelsbanken, Inc....................... 4.45 9/14/94 9,901,833
7,000,000 Transamerica Finance Corporation................. 4.30 7/05/94 6,995,819
3,000,000 Unilever Capital Corporation..................... 4.375 7/06/94 2,997,812
5,000,000 Xerox Credit Corporation......................... 4.27 7/07/94 4,995,849
5,000,000 Xerox Credit Corporation......................... 3.92 7/14/94 4,991,736
1,484,000 Xerox Credit Corporation......................... 4.25 7/14/94 1,481,547
4,000,000 Xerox Credit Corporation......................... 4.35 8/12/94 3,979,217
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C>
TOTAL COMMERCIAL PAPER (COST--$257,537,540)............................. 257,500,859
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C>
CORPORATE NOTES--0.7% 2,370,000 Associates Corp. of North America................ 12.50 9/15/94 2,407,920
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C>
TOTAL CORPORATE NOTES (COST--$2,413,600)................................ 2,407,920
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C>
MASTER NOTES+--0.9% 3,000,000 Goldman Sachs Group, L.P......................... 4.38 9/01/94 3,000,000
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C>
TOTAL MASTER NOTES (COST--$3,000,000)................................... 3,000,000
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C>
MEDIUM-TERM NOTES-- 0.3% 1,000,000 General Electrical Capital Corp.................. 3.50 8/25/94 998,193
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C>
TOTAL MEDIUM-TERM NOTES (COST--$999,987)................................ 998,193
</TABLE>
- --------------------------------------------------------------------------------
17
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.--DOMESTIC MONEY MARKET FUND
SCHEDULE OF INVESTMENTS AS OF JUNE 30, 1994 (CONCLUDED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE INTEREST MATURITY VALUE
AMOUNT ISSUE RATE* DATE (NOTE 1A)
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
US GOVERNMENT &
AGENCY OBLIGATIONS-- $ 5,145,000 Federal Farm Credit Bank......................... 4.70 % 11/15/94 $ 5,053,290
DISCOUNT*--8.1% 10,000,000 Federal Home Loan Bank........................... 4.74 11/21/94 9,814,000
133,000 Federal Home Loan Mortgage Association........... 3.47 7/28/94 132,576
275,000 Federal National Mortgage Association............ 3.39 7/15/94 274,530
155,000 Federal National Mortgage Association............ 3.34 9/22/94 153,391
4,000,000 Federal National Mortgage Association............ 3.43 9/29/94 3,955,006
400,000 Federal National Mortgage Association............ 3.53 10/14/94 394,606
5,000,000 Federal National Mortgage Association............ 4.72 11/29/94 4,901,833
2,000,000 United States Treasury Bills..................... 3.43 2/09/95 1,940,018
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C>
TOTAL US GOVERNMENT & AGENCY OBLIGATIONS--DISCOUNT (COST--$26,642,581) 26,619,250
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C>
US GOVERNMENT &
AGENCY OBLIGATIONS-- 3,000,000 Federal Home Loan Bank+.......................... 4.68 12/28/95 3,000,000
NON-DISCOUNT*--11.9% 10,000,000 Federal Home Loan Mortgage Association+.......... 4.61 9/01/95 9,997,770
3,000,000 Federal National Mortgage Association+........... 4.29 6/01/95 2,999,730
2,000,000 Federal National Mortgage Association+........... 4.58 5/13/96 2,000,000
2,000,000 Federal National Mortgage Association+........... 4.58 8/13/96 2,000,000
2,000,000 Federal National Mortgage Association+........... 4.70 5/19/97 2,000,000
2,000,000 Federal National Mortgage Association+........... 4.75 5/14/98 2,000,000
4,000,000 Student Loan Marketing Association+.............. 4.61 12/30/94 4,004,533
2,000,000 Student Loan Marketing Association+.............. 4.86 4/17/95 2,008,040
500,000 Student Loan Marketing Association+.............. 4.61 6/02/95 500,899
3,000,000 Student Loan Marketing Association+.............. 4.49 5/14/96 3,004,302
2,000,000 Student Loan Marketing Association+.............. 4.63 3/03/97 2,000,618
1,500,000 US Treasury Notes................................ 3.875 4/30/95 1,481,718
1,000,000 US Treasury Notes................................ 4.125 6/30/95 987,500
750,000 US Treasury Notes................................ 3.875 8/31/95 735,703
500,000 US Treasury Notes................................ 4.00 1/31/96 485,781
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C>
TOTAL US GOVERNMENT & AGENCY OBLIGATIONS-NON-DISCOUNT 39,206,594
(COST--$39,264,996)
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C>
TOTAL INVESTMENTS (COST--$329,858,704)--99.9%........................... 329,732,816
OTHER ASSETS LESS LIABILITIES--0.1%..................................... 183,673
-------------
NET ASSETS--100.0%...................................................... $ 329,916,489
-------------
-------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
* Commercial Paper and certain US Government Obligations are traded on a discount basis; the interest rates shown are
the discount rates paid at the time of purchase by the Fund. Other securities bear interest at the rates shown,
payable at fixed dates or upon maturity. The interest rates on variable rate securities are adjusted periodically
based upon appropriate indexes. The interest rates shown are the rates in effect at June 30, 1994.
+ Variable Rate Notes.
</TABLE>
See Notes to Financial Statements.
18
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.--EQUITY GROWTH FUND
SCHEDULE OF INVESTMENTS AS OF JUNE 30, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE PERCENT OF
INDUSTRY HELD COMMON STOCKS COST (NOTE 1A) NET ASSETS
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
AEROSPACE & DEFENSE 120,000 Teledyne, Inc........................ $ 2,090,890 $ 1,920,001 1.4%
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
AIR TRANSPORTATION 90,000 Comair Holdings, Inc................. 1,801,248 1,822,500 1.3
51,500 Skywest, Inc......................... 1,256,250 1,313,250 0.9
3,057,498 3,135,750 2.2
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
AUTO-RELATED 80,000 + Automotive Industries Inc............ 1,942,875 2,120,000 1.5
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
AUTOMOBILE 150,000 + Agency Rent-A-Car, Inc............... 1,933,125 1,650,000 1.2
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
AUTOMOBILE PARTS 50,000 + Custom Chrome, Inc................... 1,149,000 700,000 0.5
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
AUTOMOTIVE 750 Monroe Muffler Brake Inc............. 10,536 12,188 0.0
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
BANKING 30,000 + Security Capital Corp................ 1,096,251 1,350,000 1.0
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
BIOTECHNOLOGY 25,000 + Genzyme Corp......................... 657,500 643,750 0.5
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
BUILDING MATERIALS 85,000 Apogee Enterprises Inc............... 1,161,876 1,126,250 0.8
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
BUILDING PRODUCTS 60,000 + Cameron Ashley, Inc.................. 720,000 555,000 0.4
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
BUSINESS SERVICES 95,000 Amresco, Inc......................... 781,875 665,000 0.5
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
CAPITAL EQUIPMENT 100,000 + BWIP Holdings, Inc................... 1,817,500 1,725,000 1.2
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
COMMERCIAL SERVICES 50,000 + Devry, Inc........................... 1,246,430 1,400,000 1.0
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
COMPUTER SERVICES 50,000 + BancTec, Inc......................... 867,125 975,000 0.7
140,000 + Compucom Systems, Inc................ 802,502 490,000 0.4
165,000 Merisel, Inc......................... 2,959,999 1,402,500 1.0
4,629,626 2,867,500 2.1
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
COMPUTER SOFTWARE 60,000 Hogan Systems, Inc................... 616,248 405,000 0.3
57,000 Metatec Corp. (Class A).............. 629,250 570,000 0.4
1,245,498 975,000 0.7
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
COMPUTERS 60,000 + Read-Rite Corp....................... 768,750 772,500 0.6
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
COMPUTERS & PERIPHERALS 150,000 Adaptec Inc.......................... 2,460,750 2,606,250 1.9
105,000 Electronics For Imaging Inc.......... 1,840,000 1,653,750 1.2
125,000 + MTI Technology Corp.................. 1,125,000 765,625 0.6
5,425,750 5,025,625 3.7
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
CONSUMER PRODUCTS 100,000 + Scotts Co. (Class A)................. 1,834,375 1,625,000 1.2
& SERVICES
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
ELECTRICAL EQUIPMENT 120,000 + Willcox & Gibbs, Inc................. 617,266 765,000 0.6
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
ELECTRONIC/INSTRUMENTS 35,000 + BMC Industries Inc................... 566,421 949,375 0.7
40,000 Checkmate Electronics Inc............ 381,875 290,000 0.2
75,000 DOVatron International Inc........... 1,711,250 1,443,750 1.0
65,000 Exide Electronics Group Inc.......... 1,200,000 1,283,750 0.9
40,000 + Kent Electronics Corp................ 816,042 1,220,000 0.9
165,000 Methode Electronics Inc. (Class A)... 1,968,455 2,722,500 2.0
6,644,043 7,909,375 5.7
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
ELECTRONICS 85,000 + GBC Technologies, Inc................ 1,101,250 765,000 0.5
60,000 + Reptron Electronics, Inc............. 780,000 667,500 0.5
110,000 Thermedics, Inc...................... 1,535,333 1,608,750 1.2
78,750 Vishay Intertechnology Inc........... 2,499,825 3,179,532 2.3
5,916,408 6,220,782 4.5
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
ENERGY RELATED 75,000 Magma Power Co., Inc................. 2,438,314 2,156,250 1.5
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
ENGINEERING & 40,000 Butler Manufacturing Co.............. 691,000 930,000 0.7
CONSTRUCTION
</TABLE>
- --------------------------------------------------------------------------------
19
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.--EQUITY GROWTH FUND
SCHEDULE OF INVESTMENTS AS OF JUNE 30, 1994 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE PERCENT OF
INDUSTRY HELD COMMON STOCKS COST (NOTE 1A) NET ASSETS
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
ENTERTAINMENT 95,000 + Graff Pay-Per-View, Inc.............. $ 1,070,418 $ 688,750 0.5%
40,000 + Regal Cinemas, Inc................... 1,045,625 1,100,000 0.8
2,116,043 1,788,750 1.3
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
ENVIRONMENTAL 80,000 Donaldson Inc........................ 1,366,077 1,790,000 1.3
80,000 IMCO Recycling Inc................... 1,082,897 1,120,000 0.8
2,448,974 2,910,000 2.1
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
ENVIRONMENTAL CONTROL 70,000 TETRA Technologies, Inc.............. 1,201,250 1,242,500 0.9
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
FINANCIAL SERVICES 100,000 First Financial Caribbean Corp....... 1,855,125 1,100,000 0.8
75,000 First Financial Corp................. 1,087,188 1,087,500 0.8
50,000 First State Bancorp.................. 548,750 612,500 0.4
75,000 GFC Financial Corp................... 2,393,126 2,503,125 1.8
5,884,189 5,303,125 3.8
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
FOOD 100,000 J & J Snack Food Corp................ 1,677,875 1,262,500 0.9
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
FOOD DISTRIBUTION 66,300 Performance Food Group Co............ 1,169,450 1,475,175 1.1
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
GAMING 120,000 Players International Inc............ 2,893,125 1,770,000 1.3
70,000 Sodak Gaming Inc..................... 1,891,874 787,500 0.6
4,784,999 2,557,500 1.9
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
HEALTH SERVICES 40,000 + Physicians Health Services, Inc...... 882,500 890,000 0.6
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
HEALTHCARE-- 85,000 Sybron Corp.......................... 2,357,265 2,550,000 1.8
PRODUCTS & SERVICES
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
HIGH TECHNOLOGY 100,000 Thermotrex Corp...................... 1,589,918 1,350,000 1.0
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
INDUSTRIAL 91,500 Medalist Industries Inc.............. 1,195,688 617,625 0.4
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
INSURANCE 126,000 Gainsco Inc.......................... 1,346,644 1,118,250 0.8
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
MACHINERY 100,000 Thermo Fibertek Inc.................. 1,424,525 1,437,500 1.0
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
MANUFACTURED HOUSING 55,000 Oakwood Homes Corp................... 1,249,106 1,292,500 0.9
150,000 Redman Industries Inc................ 2,660,186 2,362,500 1.7
3,909,292 3,655,000 2.6
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
MANUFACTURING 50,000 Modine Manufacturing Co.............. 1,351,875 1,262,500 0.9
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
MEDIA/PUBLISHING 50,000 + Electronic Arts, Inc................. 700,000 687,500 0.5
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
MEDICAL SERVICES 100,000 Advocat, Inc......................... 950,000 850,000 0.6
75,000 Clintrials, Inc...................... 739,375 581,250 0.4
55,000 Sun Healthcare Group Inc............. 854,775 1,024,375 0.7
2,544,150 2,455,625 1.7
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
MEDICAL TECHNOLOGY 70,000 + Ventritex, Inc....................... 1,614,375 1,277,500 0.9
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
METALS 53,000 Material Sciences Corp............... 1,107,365 1,179,250 0.8
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
MISCELLANEOUS-- 50,000 + Arden Industrial Products Co......... 652,500 525,000 0.4
CAPITAL GOODS
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
OFFICE--RELATED 75,000 Miller (Herman) Inc.................. 1,977,190 1,931,250 1.4
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
OIL & GAS 125,000 Lomak Petroleum Inc.................. 915,625 984,375 0.7
60,000 Parker & Parsley Development
Partners............................. 1,380,798 1,530,000 1.1
2,296,423 2,514,375 1.8
</TABLE>
- --------------------------------------------------------------------------------
20
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.--EQUITY GROWTH FUND
SCHEDULE OF INVESTMENTS AS OF JUNE 30, 1994 (CONCLUDED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE PERCENT OF
INDUSTRY HELD COMMON STOCKS COST (NOTE 1A) NET ASSETS
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
OIL SERVICE 100,000 + Newpark Resources, Inc............... $ 1,133,750 $ 1,575,000 1.1%
90,000 Sundowner Offshore Services, Inc..... 1,215,621 1,260,000 0.9
2,349,371 2,835,000 2.0
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
PRINTING 107,000 Merrill Corp......................... 2,289,739 2,354,000 1.7
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
PRINTING & PUBLISHING 30,000 Banta Corp........................... 983,750 960,000 0.7
100,000 International Imaging Materials 1,598,749 1,775,000 1.3
Inc..................................
2,582,499 2,735,000 2.0
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
REAL ESTATE 50,000 + Capstone Capital Trust, Inc.......... 900,000 900,000 0.6
25,000 + First Industrial Realty Trust, 591,200 590,625 0.4
Inc..................................
50,000 National Health Corp. (Preferred).... 1,250,000 1,256,250 0.9
2,741,200 2,746,875 1.9
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
RETAIL 90,000 Goody's Family Clothing Inc.......... 1,296,189 1,597,500 1.1
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
RETAIL APPAREL 28,000 + Tommy Hilfiger Corp.................. 1,071,000 1,113,000 0.8
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
RETAIL SPECIALTY 95,000 Discovery Zone Inc................... 1,921,876 1,246,875 0.9
95,000 MicroAge Inc......................... 2,022,126 1,496,250 1.1
3,944,002 2,743,125 2.0
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
SEMICONDUCTOR 70,000 Aetrium Inc.......................... 726,406 647,500 0.5
EQUIPMENT 60,000 Electroglas Inc...................... 1,387,500 2,040,000 1.5
120,000 Ultratech Stepper Inc................ 2,318,126 2,220,000 1.6
4,432,032 4,907,500 3.6
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
SEMICONDUCTORS 120,000 Dallas Semiconductor, Corp........... 2,123,785 2,175,000 1.6
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
SHIPPING 50,000 + Kirby Corp........................... 896,850 818,750 0.6
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
SPECIALTY RETAILING 31,500 + Mikasa, Inc.......................... 441,000 464,625 0.3
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
STEEL 60,000 Birmingham Steel Corp................ 1,744,423 1,620,000 1.2
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
TELECOMMUNICATIONS 21,600 + Intercell Corp....................... 197,100 210,600 0.2
50,000 Pittencrieff Communications Inc...... 1,250,750 637,500 0.5
90,000 Spec Tran Corp....................... 730,000 382,500 0.3
2,177,850 1,230,600 1.0
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
TELECOMMUNICATIONS 120,000 Cellstar Corp........................ 1,440,000 1,320,000 0.9
EQUIPMENT
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
TEXTILES 55,000 + Galey & Lord, Inc.................... 761,875 893,750 0.6
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
TOTAL COMMON STOCKS.................. 122,400,691 115,795,621 83.4
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE
AMOUNT SHORT-TERM SECURITIES
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
COMMERCIAL PAPER* $3,000,000 Ciesco L.P., 4.30% due 7/13/1994..... 2,995,341 2,995,341 2.1
7,146,000 General Electric Capital Corp., 4.30% 7,145,146 7,145,146 5.1
due 7/01/1994......................
7,000,000 Goldman Sachs Group L.P., 4.30% due 6,984,950 6,984,950 5.0
7/18/1994..........................
5,000,000 National Australia Funding 4,992,380 4,992,380 3.5
(Delaware), Inc., 4.22% due
7/13/1994..........................
4,000,000 Procter & Gamble Co., 4.25% due 3,996,222 3,996,222 2.8
7/08/1994..........................
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
TOTAL SHORT-TERM SECURITIES.......... 26,114,039 26,114,039 18.5
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
TOTAL INVESTMENTS.................... $148,514,730 141,909,660 101.9
------------
------------
LIABILITIES IN EXCESS OF OTHER (2,593,530) (1.9)
ASSETS.............................
NET ASSETS........................... $139,316,130 100.0%
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
* 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.
+ Non-income producing security.
</TABLE>
See Notes to Financial Statements.
21
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.--FLEXIBLE STRATEGY FUND
SCHEDULE OF INVESTMENTS AS OF JUNE 30, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE PERCENT OF
INDUSTRY HELD US STOCKS & WARRANTS COST (NOTE 1A) NET ASSETS
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
APPLIANCES 180,000 Singer Co. N.V................... $ 5,613,949 $ 6,300,000 2.5%
205,000 Sunbeam-Oster Inc................ 4,195,820 4,100,000 1.6
------------ ------------ ----------
9,809,769 10,400,000 4.1
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
AUTO & TRUCK 60,000 Consorcio G Grupo Dina, S.A. de
C.V. (ADR) (a)................. 1,217,617 630,000 0.3
35,000 Ford Motor Co.................... 2,185,060 2,065,000 0.8
80,000 Magna International Inc. (Class
A)............................. 3,574,143 3,200,000 1.3
------------ ------------ ----------
6,976,820 5,895,000 2.4
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
BANKING 45,000 + Banco Frances del Ro de la Plata
S.A. (ADR) (a)................. 1,419,025 1,006,875 0.4
50,000 BankAmerica Corp................. 2,267,371 2,287,500 0.9
70,000 Bank of New York, Inc............ 1,973,776 2,021,250 0.8
40,000 + Bank of New York, Inc. (Warrants)
(b)............................ 300,938 385,000 0.2
35,000 Espirito Santo Financial Holdings
S.A. (ADR) (a)................. 1,077,562 945,000 0.4
35,000 Grupo Financiero Serfin, S.A. de
C.V. (ADR) (a)................. 919,653 616,875 0.2
------------ ------------ ----------
7,958,325 7,262,500 2.9
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
BEVERAGE 10,000 Panamerican Beverage, Inc. (Class
A)............................. 322,807 241,250 0.1
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
CHEMICALS 30,000 du Pont (E.I.) de Nemours &
Co............................. 1,758,378 1,751,250 0.7
17,000 IMC Fertilizer Group, Inc........ 770,578 588,625 0.2
41,000 Rohm and Haas Co................. 2,346,289 2,552,250 1.0
------------ ------------ ----------
4,875,245 4,892,125 1.9
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
COMMUNICATION EQUIPMENT 100,000 ADC Telecommunication Inc........ 3,478,498 4,025,000 1.6
100,000 DSC Communications Corp.......... 2,381,341 1,950,000 0.8
35,000 Motorola, Inc.................... 1,761,788 1,557,500 0.6
38,000 Tellabs, Inc..................... 832,620 1,168,500 0.5
------------ ------------ ----------
8,454,247 8,701,000 3.5
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
COMPUTER EQUIPMENT 85,000 Solectron Corp................... 1,824,067 2,156,875 0.9
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
COMPUTER SERVICES 125,000 Computer Sciences Corp........... 3,752,666 5,203,125 2.1
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
CONSUMER--MISCELLANEOUS 40,000 Duracell International, Inc...... 1,669,449 1,560,000 0.6
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
CONSUMER SERVICES 55,000 Block (H&R), Inc................. 2,478,297 2,158,750 0.9
12,500 Kelly Services, Inc. (Class A)... 361,325 337,500 0.1
------------ ------------ ----------
2,839,622 2,496,250 1.0
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
ELECTRICAL EQUIPMENT 30,000 Grainger (W.W), Inc.............. 1,909,291 1,916,250 0.8
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
ELECTRONICS 50,000 Perkin-Elmer Corp................ 1,847,668 1,462,500 0.6
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
ENERGY RELATED 100,000 California Energy Co., Inc....... 1,837,585 1,650,000 0.7
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
ENGINEERING & CONSTRUCTION 60,000 Empresas ICA Sociedad
Controladora, S.A. de C.V.
(ADR) (a)...................... 1,273,944 1,440,000 0.6
45,000 Huntingdon International Holdings
PLC (ADR) (a).................. 461,978 258,750 0.1
------------ ------------ ----------
1,735,922 1,698,750 0.7
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
ENVIRONMENTAL CONTROL 300,000 + Wheelabrator Technologies,
Inc............................ 4,995,704 5,587,500 2.2
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
HEALTH & PERSONAL CARE 15,000 Johnson & Johnson................ 599,666 643,125 0.3
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
HEALTH CARE 125,000 + Humana Inc....................... 2,100,084 2,015,625 0.8
90,000 Physician Corp. of America....... 1,947,263 2,025,000 0.8
35,000 US Healthcare, Inc............... 1,474,968 1,295,000 0.5
15,000 Vivra Inc........................ 278,914 360,000 0.1
------------ ------------ ----------
5,801,229 5,695,625 2.2
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
HOUSEHOLD PRODUCTS 80,000 Procter & Gamble Co.............. 4,378,666 4,270,000 1.7
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
INSURANCE 35,000 ITT Corp......................... 3,004,477 2,856,875 1.2
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
MISCELLANEOUS--CAPITAL GOODS 75,000 Thermo Electron Corp............. 3,025,775 2,793,750 1.1
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
MULTI--INDUSTRY 60,000 Allied Signal Inc................ 2,155,827 2,077,500 0.8
</TABLE>
- --------------------------------------------------------------------------------
22
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.--FLEXIBLE STRATEGY FUND
SCHEDULE OF INVESTMENTS AS OF JUNE 30, 1994 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE PERCENT OF
INDUSTRY HELD US STOCKS & WARRANTS COST (NOTE 1A) NET ASSETS
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
OFFICE EQUIPMENT 95,000 Danka Business Systems Inc. PLC
(ADR) (a)...................... $ 3,055,107 $ 3,788,125 1.5%
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
OIL--INTEGRATED 45,000 Mobil Oil Corp................... 3,524,350 3,673,125 1.5
15,000 Phillips Petroleum Co............ 478,980 468,750 0.2
25,000 Royal Dutch Petroleum Co. N.V.
(ADR) (a)...................... 2,476,800 2,615,625 1.0
------------ ------------ ----------
6,480,130 6,757,500 2.7
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
PACKAGING 40,000 Crown Cork & Seal Co., Inc....... 1,456,240 1,490,000 0.6
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
PAPER 40,000 Scott Paper Co................... 1,768,873 2,090,000 0.8
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
PAPER FOREST PRODUCERS 49,000 Willamette Industries, Inc....... 1,854,797 2,094,750 0.8
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
PRINTING & PUBLISHING 40,000 Gannett Co., Inc................. 2,129,343 1,980,000 0.8
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
RAILROADS 55,000 CSX Corp......................... 4,588,197 4,152,500 1.7
90,000 Southern Pacific Rail Corp....... 1,850,103 1,766,250 0.7
------------ ------------ ----------
6,438,300 5,918,750 2.4
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
RETAIL 30,000 Phillips-Van Heusen Corp......... 853,660 753,750 0.3
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
SOFTWARE 30,000 Novell, Inc...................... 685,482 498,750 0.2
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
TELECOMMUNICATIONS 30,000 Telefonos de Mexico, S.A. de C.V.
(ADR) (a)...................... 1,632,377 1,676,250 0.7
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
TIRE & RUBBER 25,000 Bandag, Inc. (Class A)........... 1,354,227 1,156,250 0.5
60,000 Cooper Tire & Rubber Co.......... 1,338,754 1,387,500 0.5
------------ ------------ ----------
2,692,981 2,543,750 1.0
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
UTILITIES--COMMUNICATIONS 15,500 ALC Communications Corp.......... 464,664 476,625 0.2
60,000 GTE Corp......................... 1,920,691 1,890,000 0.8
124,734 LDDS Communications Inc.......... 2,660,824 2,151,661 0.9
160,000 MCI Communications Corp.......... 4,325,530 3,540,000 1.4
60,000 + Southwestern Bell Corp........... 2,559,678 2,610,000 1.1
15,000 Sprint Corp...................... 556,050 523,125 0.2
------------ ------------ ----------
12,487,437 11,191,411 4.6
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
TOTAL US STOCK & WARRANTS........ 121,309,554 120,243,036 48.2
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
COUNTRY FOREIGN STOCKS & WARRANTS++++
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
ARGENTINA 12,500 Banco del Galcia y Buenos Aires
S.A. (ADR) (a) (2)............. 435,519 334,375 0.2
115,000 Telecom Argentina Stet S.A.
(16)........................... 549,904 596,894 0.2
------------ ------------ ----------
985,423 931,269 0.4
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
AUSTRALIA 67,319 National Australia Bank Ltd.
(2)............................ 559,481 539,810 0.2
40,000 News Corp. Ltd. (ADR) (a) (21)... 2,126,019 1,930,000 0.8
15,234 Pacific Dunlop, Ltd. (12)........ 55,601 47,839 0.0
------------ ------------ ----------
2,741,101 2,517,649 1.0
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
CANADA 15,000 Hudson Bay Co. (15).............. 451,080 293,054 0.1
50,000 International Semi-Tech
Microelectronics Receipts,
Inc. (5) (d)................... 331,795 180,897 0.1
------------ ------------ ----------
782,875 473,951 0.2
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
CHILE 15,200 + Banco O'Higgins (Sponsored) (ADR)
(a) (2)........................ 221,987 269,800 0.1
25,000 ++ Distribuidora Chilectra
Metropolitana S.A. (ADR) (a)
(4)............................ 795,208 1,054,625 0.5
------------ ------------ ----------
1,017,195 1,324,425 0.6
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
DENMARK 42,000 + Tele Danmark A/S (ADR) (a)
(16)........................... 1,020,702 1,034,250 0.4
</TABLE>
- --------------------------------------------------------------------------------
23
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.--FLEXIBLE STRATEGY FUND
SCHEDULE OF INVESTMENTS AS OF JUNE 30, 1994 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE PERCENT OF
COUNTRY HELD FOREIGN STOCKS & WARRANTS++++ COST (NOTE 1A) NET ASSETS
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
FRANCE 1,143 Compagnie Generale des Eaux
(Ordinary) (5)................. $ 477,550 $ 460,109 0.2%
10,400 Compagnie UAP (10)............... 282,510 269,117 0.1
40,500 + Societe Nationale Elf Aquitaine
(ADR) (a) (13)................. 1,445,107 1,346,625 0.5
------------ ------------ ----------
2,205,167 2,075,851 0.8
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
HONG KONG 258,907 Dairy Farms International
Holdings Ltd. (7).............. 399,176 358,430 0.1
245,000 Hutchison Whampoa Co. (12)....... 810,025 1,006,437 0.4
200,000 Johnson Electric Holdings Ltd.
(5)............................ 408,481 468,366 0.2
65,000 Wharf Holdings Ltd. (14)......... 273,957 239,682 0.1
------------ ------------ ----------
1,891,639 2,072,915 0.8
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
ITALY 25,000 Istituto Mobiliare Italiano
S.p.A. (ADR) (a) (2)........... 552,180 500,000 0.2
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
JAPAN 10,000 + Makita Electric Works Co., Ltd.
(11)........................... 203,233 203,957 0.1
25,000 Mitsubishi Electric Corp. (17)... 154,449 169,965 0.1
18,000 Sekisui Chemical Co. Ltd. (18)... 183,794 210,046 0.1
------------ ------------ ----------
541,476 583,968 0.3
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
MEXICO 115,000 ++ Grupo Carso, S.A. de C.V. (ADR)
(a) (12)....................... 1,270,567 2,055,625 0.8
311,500 Telefonos de Mexico, S.A. de C.V.
(Telmex) (Class L)............. 579,168 872,935 0.4
------------ ------------ ----------
1,849,735 2,928,560 1.2
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
PORTUGAL 3,040 Banco Comercial Portugues (2).... 38,256 37,813 0.0
47,000 Banco Comercial Portugues (New)
(ADR) (a) (2).................. 659,407 569,875 0.2
------------ ------------ ----------
697,663 607,688 0.2
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
SINGAPORE 25,000 Fraser & Neave Ltd. (ADR) (a)
(20)........................... 291,661 275,681 0.1
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
SPAIN 10,000 Repsol S.A. (13)................. 277,603 288,000 0.1
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
UNITED KINGDOM 5,000 British Petroleum PLC (ADR) (a)
(13)........................... 369,362 358,750 0.1
90,693 HSBC Holdings PLC (2)............ 754,685 991,533 0.4
15,000 Hanson PLC (ADR) (a) (12)........ 332,006 275,625 0.1
32,600 Reuters Holdings PLC (ADR) (a)
(3)............................ 1,147,112 1,271,400 0.5
45,000 Siebe PLC (11)................... 392,986 379,933 0.2
------------ ------------ ----------
2,996,151 3,277,241 1.3
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
VENEZUELA 39,500 ++ Siderurgica Venezolana SIVENSA
S.A.I.C.A.--S.A.C.A. (Warrants)
(b) (9)........................ 56,525 1,185 0.0
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
TOTAL FOREIGN STOCKS & WARRANTS.. 17,907,096 18,892,633 7.6
</TABLE>
- --------------------------------------------------------------------------------
24
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.--FLEXIBLE STRATEGY FUND
SCHEDULE OF INVESTMENTS AS OF JUNE 30, 1994 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE CORPORATE & FOREIGN BONDS++++ VALUE PERCENT OF
INDUSTRY AMOUNT* COST (NOTE 1A) NET ASSETS
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
FINANCIAL SERVICES--US US$ 1,000,000 Ford Motor Credit Co.,
7.125% due 12/01/1997..... $ 995,000 $ 997,501 0.4%
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
FOREIGN--AUSTRALIA A$ 1,925,000 Queensland Treasury Corp.,
Global Notes, 8.00% due
7/14/1999 (8)............. 1,436,763 1,333,709 0.5
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
FOREIGN--CANADA C$ 3,250,000 Government of Canada, 7.25%
due 6/01/2003 (8)......... 2,560,120 2,087,902 0.8
5,000,000 Hydro-Electric Quebec, 6.35%
due 1/15/2002 (6)......... 5,000,000 4,500,000 1.8
------------ ------------ ----------
7,560,120 6,587,902 2.6
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
FOREIGN--GERMANY DM 9,700,000 Bundes Obligation, 6.375%
due
5/20/1998 (8)............. 5,816,700 6,086,149 2.4
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
FOREIGN--ITALY Lit 1,050,000,000 Buoni Poliennali del Tesoro
(BPT), 9.00% due
10/01/1998 (8)............ 638,983 632,863 0.3
500,000 Republic of Italy, 8.75% due
2/08/2001 (8)............. 537,305 521,598 0.2
------------ ------------ ----------
1,176,288 1,154,461 0.5
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
FOREIGN--MEXICO MxP 3,564,470 Mexican Cetes, 12.60% (e)
due 9/07/1995 (8)......... 1,004,442 876,902 0.4
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
FOREIGN--SWEDEN Skr 10,000 L.M. Ericsson Telephone Co. 510,000 495,000 0.2
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
FOREIGN-- Pound 625,000 UK Treasury Gilt, 7.25% due
UNITED KINGDOM Sterling 3/30/1998 (8)............. 942,775 941,173 0.4
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
INDUSTRIAL--US 1,000,000 International Business
Machines Corp., 6.375% due
6/15/2000................. 1,000,000 941,876 0.4
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
TOTAL CORPORATE & FOREIGN
BONDS..................... 20,442,088 19,414,673 7.8
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
US GOVERNMENT & AGENCY OBLIGATIONS
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
FEDERAL AGENCY Federal National Mortgage
OBLIGATIONS Association:
US$ 7,500,000 7.00% due 6/25/2023......... 7,096,875 6,832,031 2.7
2,000,000 Series 93D, 5.85% due
2/25/2006................. 1,996,250 1,865,000 0.8
------------ ------------ ----------
9,093,125 8,697,031 3.5
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
MORTGAGE-- 1,921,048 Government National Mortgage
BACKED SECURITIES Association, 9.00% due
11/15/2019 (c)............ 1,905,025 1,985,883 0.8
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
US GOVERNMENT &
AGENCY OBLIGATIONS 3,000,000 US Treasury Bond, 7.125% due
2/15/2023................. 3,169,219 2,812,968 1.1
US Treasury Notes:
1,000,000 8.625% due 8/15/1997........ 1,027,344 1,057,500 0.4
6,000,000 7.50% due 11/15/2001........ 6,143,336 6,096,564 2.5
5,000,000 6.25% due 2/15/2003......... 4,990,469 4,666,405 1.9
3,000,000 US Treasury STRIPS++, 5.795%
(e) due 5/15/2000......... 2,158,286 1,990,416 0.8
------------ ------------ ----------
17,488,654 16,623,853 6.7
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
TOTAL US GOVERNMENT & AGENCY
OBLIGATIONS............... 28,486,804 27,306,767 11.0
</TABLE>
- --------------------------------------------------------------------------------
25
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.--FLEXIBLE STRATEGY FUND
SCHEDULE OF INVESTMENTS AS OF JUNE 30, 1994 (CONCLUDED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE VALUE PERCENT OF
AMOUNT* SHORT-TERM SECURITIES COST (NOTE 1A) NET ASSETS
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
COMMERCIAL US$ 10,000,000 B.A.T. Capital Corp., 4.32%
PAPER** due
7/20/1994.................. $ 9,977,200 $ 9,977,200 4.0%
12,421,000 General Electric Capital
Corp.,
4.30% due 7/01/1994........ 12,421,000 12,421,000 5.0
13,000,000 National Australia Funding,
4.27% due 7/18/1994........ 12,973,787 12,973,787 5.2
10,000,000 Nomura Holding America Inc.,
4.30% due 7/29/1994........ 9,966,556 9,966,556 4.0
12,000,000 Sheffield Receivables Corp.,
4.25% due 7/13/1994........ 11,983,000 11,983,000 4.8
6,000,000 Siemens Corp., 4.25% due
7/20/1994.................. 5,986,541 5,986,541 2.4
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
TOTAL SHORT-TERM SECURITIES.. 63,308,084 63,308,084 25.4
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
TOTAL INVESTMENTS............ $251,453,626 249,165,193 100.0
------------
------------
LIABILITIES IN EXCESS OF
OTHER ASSETS............... (55,532) (0.0)
------------ ----------
NET ASSETS................... $249,109,661 100.0%
------------ ----------
------------ ----------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<C> <S>
(a) American Depositary Receipts (ADR).
(b) 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.
(c) US Government Agency Mortgage-Backed Obligations are
subject to principal paydowns as a result of
prepayments or refinancings of the underlying
mortgage investments. As a result, the average life
may be substantially less than the original
maturity.
(d) Receipts evidence payment by the Fund of 40% of the
purchase price of International Semi-Tech
Microelectronics, Inc. The Fund is obligated to pay
the remaining 60%, approximately $498,000, over the
next two years.
(e) Represents the yield-to-maturity on this zero coupon
issue.
* Denominated in US dollars unless otherwise
indicated.
** 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.
+ Non-income producing security.
++ Restricted securities. The value of the Fund's
investment in restricted securities was
approximately $3,111,000, representing 1.2% of net
assets.
++ Separate Trading of Registered Interest and
Principal of
Securities (STRIPS).
See Notes to Financial Statements.
</TABLE>
<TABLE>
<S> <C> <C> <C>
++++ Corresponding industry groups for foreign securities:
(1) Automotive (12) Multi-Industry
(2) Banking (13) Petroleum
(3) Business Services (14) Real Estate
(4) Electric Utilities (15) Retail Stores
(5) Electronics (16) Telecommunications
(6) Energy (17) Electrical Equipment
(7) Food Chains (18) Chemicals
(8) Government Entities (19) Financial Services
(9) Health and Personal (20) Beverages
Care
(10) Insurance (21) Media Publishing
(11) Machinery (22) Construction
(23) Communications
Equipment
</TABLE>
26
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.--GLOBAL STRATEGY FOCUS FUND
SCHEDULE OF INVESTMENTS AS OF JUNE 30, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE PERCENT OF
INDUSTRY HELD US STOCKS COST (NOTE 1A) NET ASSETS
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
AEROSPACE 41,500 United Technologies Corp........... $2,567,127 $2,666,375 0.6%
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
ALUMINUM 36,100 Aluminum Co. of America............ 2,644,296 2,639,813 0.6
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
BANKING 36,900 Morgan (J.P.) & Co................. 2,521,190 2,283,188 0.5
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
BUILDING--RELATED 55,700 Stanley Works Co................... 2,309,381 2,241,925 0.5
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
CHEMICALS 54,050 Eastman Chemical Co................ 2,354,380 2,580,887 0.6
74,500 Nalco Chemical Co.................. 2,615,256 2,374,687 0.5
------------ ------------ ----------
4,969,636 4,955,574 1.1
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
COMPUTER TEHNOLOGY 30,400 Hewlett-Packard Co................. 2,362,976 2,291,400 0.5
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
CONSUMER--SERVICES 82,000 Kelly Services, Inc. (Class A)..... 2,239,750 2,214,000 0.5
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
ENERGY--RELATED 134,000 + California Energy Co., Inc......... 2,383,346 2,211,000 0.5
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
ENVIRONMENTAL CONTROL 151,800 + Wheelabrator Technologies, Inc..... 2,810,427 2,827,275 0.6
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
FOODS 109,381 Archer-Daniels-Midland Co.......... 2,567,582 2,543,108 0.6
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
MACHINERY 78,900 Ingersoll-Rand Co.................. 2,785,025 2,771,362 0.6
115,800 Morrison Knudsen Corp.............. 2,664,955 2,489,700 0.5
------------ ------------ ----------
5,449,980 5,261,062 1.1
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
MISCELLANEOUS-- 92,200 Keystone International, Inc........ 2,351,522 1,797,900 0.4
MANUFACTURING
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
OFFICE--RELATED 64,500 Pitney Bowes, Inc.................. 2,586,442 2,467,125 0.5
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
OIL--INTEGRATED 96,700 Phillips Petroleum Co.............. 2,816,185 3,021,875 0.7
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
PETROLEUM & SERVICE
EQUIPMENT 107,900 Dresser Industries, Inc............ 2,369,625 2,211,950 0.5
42,200 Schlumberger Ltd................... 2,514,073 2,495,075 0.5
------------ ------------ ----------
4,883,698 4,707,025 1.0
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
PHARMACEUTICALS 87,000 Abbott Laboratories................ 2,432,617 2,523,000 0.5
47,800 Bristol-Myers Squibb Co............ 2,727,271 2,563,275 0.6
80,000 Merck & Co., Inc................... 2,793,900 2,380,000 0.5
------------ ------------ ----------
7,953,788 7,466,275 1.6
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
PHOTOGRAPHIC 57,200 Eastman Kodak Co................... 2,529,035 2,752,750 0.6
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
PRINTING/PUBLISHING 50,800 Gannett Co., Inc................... 2,645,777 2,514,600 0.6
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
SEMICONDUCTOR 94,000 + Teradyne Inc....................... 2,170,918 2,491,000 0.5
PRODUCTION EQUIPMENT
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
50,100 American Telephone & Telegraph
TELECOMMUNICATIONS Co............................... 2,740,599 2,724,187 0.6
50,300 Bell Atlantic Corp................. 2,829,968 2,816,800 0.6
98,000 Comsat Corp........................ 2,582,928 2,278,500 0.5
------------ ------------ ----------
8,153,495 7,819,487 1.7
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
TOTAL US STOCKS.................... 68,916,551 67,172,757 14.7
</TABLE>
- --------------------------------------------------------------------------------
27
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.--GLOBAL STRATEGY FOCUS FUND
SCHEDULE OF INVESTMENTS AS OF JUNE 30, 1994 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE PERCENT OF
COUNTRY HELD FOREIGN STOCKS & WARRANTS++ COST (NOTE 1A) NET ASSETS
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ARGENTINA 64,800 Banco de Galicia S.A. (ADR)* (1)... $1,733,705 $1,733,400 0.4%
72,000 Banco Frances del Ro de la Plata
S.A. (Class A) (1)............... 2,146,740 1,611,000 0.3
------------ ------------ ----------
3,880,445 3,344,400 0.7
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
AUSTRALIA 621,000 CSR Ltd. Ordinary (17)............. 1,970,236 2,176,878 0.5
251,000 National Bank of Australia (1)..... 1,939,280 2,012,692 0.4
837,600 Pacific Dunlop, Ltd. (17).......... 2,815,855 2,630,307 0.6
------------ ------------ ----------
6,725,371 6,819,877 1.5
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
206,400 Aracruz Celulose S.A. (ADR)*
BRAZIL (20)............................. 1,314,143 2,115,600 0.5
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
CANADA 172,100 Canadian Pacific Ltd. (17)......... 2,710,067 2,538,475 0.5
65,000 Imperial Oil Ltd. (5).............. 2,297,743 1,904,848 0.4
77,400 Northern Telecommunications, Ltd.
(27)............................. 2,137,422 2,138,175 0.5
167,000 Thomson Corp....................... 2,089,647 1,842,800 0.4
119,000 Westcoast Energy Inc. (18)......... 1,925,615 1,755,250 0.4
------------ ------------ ----------
11,160,494 10,179,548 2.2
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
150,000 + Banco O'Higgins (Sponsored) (ADR)*
CHILE (1).............................. 2,377,482 2,662,500 0.6
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
FRANCE 18,900 Alactel Alsthom (4)................ 2,329,902 2,048,471 0.4
18,100 Compagnie de Saint Gobain (15)..... 1,860,794 2,111,136 0.5
4,700 + Compagnie General des Eaux (30).... 2,070,124 1,891,964 0.4
36,766 Schneider S.A. (7)................. 2,409,589 2,370,695 0.5
1,966 Schneider S.A. (Warrants) (a)
(7).............................. 16,314 17,667 0.0
40,300 TOTAL S.A. (21).................... 2,118,813 2,317,723 0.5
------------ ------------ ----------
10,805,536 10,757,656 2.3
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
GERMANY 9,250 Mannesmann AG (14)................. 1,912,545 2,350,610 0.5
7,750 Preussag AG (17)................... 2,002,612 2,179,048 0.5
8,700 RWE AG (Rheinisch Westfalisches)
(29)............................. 2,315,467 2,265,568 0.5
6,150 Siemens AG (8)..................... 2,507,770 2,498,994 0.5
16,600 Thyssen AG (Ordinary) (14)......... 2,353,011 2,999,862 0.7
------------ ------------ ----------
11,091,405 12,294,082 2.7
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
436,400 China Light & Power Co., Ltd.
HONG KONG (29)............................. 2,217,368 2,230,276 0.5
350,000 Sun Hung Kai Properties, Ltd.
(33)............................. 2,393,488 2,015,138 0.4
322,000 Swire Pacific, Ltd. (Class A)
(16)............................. 1,945,361 2,312,201 0.5
------------ ------------ ----------
6,556,217 6,557,615 1.4
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
ITALY 510,000 Danieli & Co. (14)................. 1,779,454 1,903,647 0.4
510,000 Italcementi S.p.A. (2)............. 1,742,512 2,177,901 0.5
510,000 + Italcementi S.p.A. (Rights) (b)
(2).............................. 0 4,517 0.0
------------ ------------ ----------
3,521,966 4,086,065 0.9
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
JAPAN 229,000 Asahi Glass Co., Ltd. (2).......... 2,536,504 2,834,906 0.6
68,000 Bandai Co. (28).................... 2,243,363 3,284,424 0.7
165,000 Canon, Inc. (8).................... 2,315,252 2,896,499 0.6
135,000 Dai Nippon Printing Co., Ltd.
(24)............................. 2,105,342 2,671,233 0.6
198,000 Daiwa House Industries, Ltd.
(12)............................. 2,951,944 3,094,064 0.7
305,000 Hitachi Cable, Ltd. (4)............ 2,258,069 2,893,709 0.6
57,000 Ito-Yokado Co., Ltd. (25).......... 2,773,666 3,152,207 0.7
231,000 Kamigumi Co. (26).................. 2,758,057 2,742,466 0.6
146,000 Kandenko Co. Ltd. (2).............. 3,108,742 3,244,444 0.7
117,000 Kansai Electric Power Co. (30)..... 3,171,203 3,146,119 0.7
320,000 + Komatsu Ltd. (14).................. 2,495,094 3,117,199 0.7
242,000 Maeda Corp. (2).................... 2,444,979 2,725,723 0.6
</TABLE>
28
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.--GLOBAL STRATEGY FOCUS FUND
SCHEDULE OF INVESTMENTS AS OF JUNE 30, 1994 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE PERCENT OF
COUNTRY HELD FOREIGN STOCKS & WARRANTS++ COST (NOTE 1A) NET ASSETS
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
JAPAN 407,000 Makino Milling Machine Co. (14).... $2,527,613 $3,502,141 0.8%
(CONCLUDED) 137,000 Makita Electric Works, Ltd. (8).... 2,411,735 2,794,216 0.6
166,000 Matsushita Electric Industries,
Ltd. (8)......................... 2,324,955 3,048,808 0.7
430,000 Mitsubishi Electric Co. (7)........ 2,778,342 2,923,389 0.6
386,000 Mitsubishi Heavy Industry, Ltd.
(4).............................. 2,363,424 3,090,350 0.7
43,000 Nintendo Ltd. (8).................. 3,095,831 3,115,373 0.7
415,000 Nippon Fire and Marine Insurance
Co., Ltd. (13)................... 2,923,392 3,128,818 0.7
364,000 Nippon Oil Co., Ltd. (21).......... 2,469,058 2,829,264 0.6
310,000 Okumura Corp. (2).................. 2,626,893 2,853,070 0.6
244,000 Sekisui Chemical Co., Ltd. (5)..... 2,426,012 2,847,286 0.6
170,000 Sharp Corp. (8).................... 2,504,542 3,087,773 0.7
119,000 Shikoku Electric Power Co. (29).... 3,095,822 3,042,922 0.7
285,000 + Sumitomo Corp. (15)................ 2,414,459 2,978,691 0.7
225,000 Tokio Marine and Fire Insurance
Co., Ltd. (13)................... 2,906,154 2,899,543 0.6
86,000 Tokyo Electric Power Co., Inc.
(29)............................. 2,674,937 2,792,491 0.6
144,000 Tokyo Style Co. (6)................ 2,477,721 2,863,927 0.6
400,000 + Toray Industries Ltd. (35)......... 2,827,073 3,019,787 0.7
172,000 Toto Ltd. (2)...................... 3,106,946 3,019,381 0.7
87,000 Toyo Seikan Kaisha Corp. (19)...... 2,447,671 2,824,962 0.6
141,000 Toyota Motor Corp. (34)............ 2,461,767 3,161,948 0.7
126,000 Yamazaki Banking Ltd. (1).......... 2,462,322 2,672,146 0.6
------------ ------------ ----------
86,488,884 98,299,279 21.6
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
MEXICO 308,813 Cementos Mexicano, S.A. de C.V.
(Class B) (4).................... 1,897,605 2,045,086 0.5
999,000 + Cifra S.A. de C.V. (Class C)
(25)............................. 2,353,168 2,328,053 0.5
146,000 Consorcio G Grupo Dina, S.A. de
C.V. (ADR)* (3).................. 2,654,559 1,533,000 0.3
90,000 Empresas ICA Sociedad Controladora,
S.A. de C.V. (ADR)* (30)......... 2,181,702 2,160,000 0.5
38,600 Telefonos de Mexico, S.A. de C.V.
(Telmex) (ADR)* (27)............. 2,106,068 2,156,775 0.5
------------ ------------ ----------
11,193,102 10,222,914 2.3
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
NETHERLANDS 466 ABN Amro Holdings N.V. (1)......... 15,383 15,530 0.0
23,000 Royal Dutch Petroleum Co. N.V.
(ADR)* (21)...................... 2,269,122 2,406,375 0.5
22,400 Ver Ner Utigevers (24)............. 1,664,205 2,171,634 0.5
------------ ------------ ----------
3,948,710 4,593,539 1.0
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
16,200 Hafslund Nycomed, Inc. (ADR)*
NORWAY (22)............................. 328,622 277,425 0.1
117,200 Hafslund Nycomed, Inc. (Class B)
(22)............................. 2,069,452 1,969,734 0.4
57,200 Kvaerner, Inc. (Class B) (16)...... 2,306,573 2,318,763 0.5
------------ ------------ ----------
4,704,647 4,565,922 1.0
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
169,200 Banco Comercial Portugues (ADR)*
PORTUGAL (1).............................. 2,313,645 2,051,550 0.5
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
SINGAPORE 273,000 Jurong Shipyards Ltd. (2).......... 2,136,950 2,419,101 0.5
1,875,000 Neptune Orient Lines Ltd. (26)..... 2,302,432 2,916,803 0.6
------------ ------------ ----------
4,439,382 5,335,904 1.1
</TABLE>
- --------------------------------------------------------------------------------
29
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.--GLOBAL STRATEGY FOCUS FUND
SCHEDULE OF INVESTMENTS AS OF JUNE 30, 1994 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE PERCENT OF
COUNTRY HELD FOREIGN STOCKS & WARRANTS++ COST (NOTE 1A) NET ASSETS
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
82,400 Repsol S.A. (Sponsored) (ADR)*
SPAIN (21)............................. $2,379,669 $2,358,700 0.5%
56,700 Telefonica Nacional de Espana S.A.
(ADR)* (27)...................... 2,045,177 2,282,175 0.5
------------ ------------ ----------
4,424,846 4,640,875 1.0
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
SWEDEN 132,000 SKF AB 'B' Free (16)............... 1,946,178 2,321,552 0.5
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
SWITZERLAND 2,600 BBC Brown Boveri & Cie (16)........ 1,664,262 2,281,315 0.5
3,340 Holderbank Financiere Glarus AG
(4).............................. 1,776,158 2,196,712 0.5
510 Roche Holdings, Ltd. (22).......... 1,937,000 2,435,650 0.5
3,890 Sulzer Gebrueder AG (14)........... 2,142,764 2,572,982 0.6
390 Sulzer Gebrueder AG, 'A' (Warrants)
(a) (14)......................... 0 2,915 0.0
------------ ------------ ----------
7,520,184 9,489,574 2.1
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
UNITED KINGDOM 295,600 Allied Lyons PLC (9)............... 2,648,038 2,513,985 0.6
553,000 British Gas PLC (18)............... 2,565,455 2,287,529 0.5
33,400 British Petroleum PLC (ADR)*
(21)............................. 1,972,170 2,396,450 0.5
345,000 British Telecommunications PLC
(3).............................. 2,219,411 1,956,965 0.4
294,000 GKN PLC (3)........................ 2,318,167 2,520,798 0.6
455,000 General Electric PLC (7)........... 2,241,121 1,980,465 0.4
76,100 Grand Metropolitan PLC (Sponsored)
(ADR)* (36)...................... 2,040,989 1,912,012 0.4
527,000 Hanson PLC (6)..................... 2,049,634 1,956,286 0.4
852,000 Hillsdown Holdings PLC (6)......... 2,066,782 2,018,620 0.5
157,000 Imperial Chemical Industries PLC
(5).............................. 1,795,875 1,875,630 0.4
737,000 Lucas Industries PLC (3)........... 1,866,692 1,967,978 0.4
------------ ------------ ----------
23,784,334 23,386,718 5.1
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
TOTAL FOREIGN STOCKS & WARRANTS.... 208,196,971 223,725,170 49.0
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE
COUNTRY AMOUNT** FOREIGN BONDS
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
AUSTRALIA Queensland Treasury Corp. (10):
A $ 4,125,000 8.00% due 7/14/1999................ 2,917,397 2,857,947 0.6
6,500,000 8.00% due 5/14/2003................ 4,820,875 4,235,703 0.9
------------ ------------ ----------
7,738,272 7,093,650 1.5
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
CANADA C$ 20,800,000 Government of Canada, 7.25% due
6/01/2003 (10)................... 15,728,710 13,362,570 2.9
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
GERMANY DM 12,000,000 Bundes Obligationen, 6.375% due
5/20/1998 (11)................... 7,440,783 7,529,257 1.7
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
ITALY Buoni Poliennali del Tesoro (10):
Lit 6,000,000,000 8.50% due 1/01/1997................ 3,753,480 3,655,458 0.8
7,100,000,000 10.00% due 8/01/2003............... 4,508,125 4,292,835 0.9
------------ ------------ ----------
8,261,605 7,948,293 1.7
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
UNITED KINGDOM UK Gilt (11):
Pound Sterling 2,190,000 7.25% due 3/30/1998................ 3,400,346 3,297,871 0.8
75,000 9.75% due 8/27/2002................ 149,409 121,370 0.0
3,000,000 8.00% due 6/10/2003................ 4,822,692 4,474,221 1.0
------------ ------------ ----------
8,372,447 7,893,462 1.8
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
TOTAL FOREIGN BONDS................ 47,541,817 43,827,232 9.6
</TABLE>
- --------------------------------------------------------------------------------
30
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.--GLOBAL STRATEGY FOCUS FUND
SCHEDULE OF INVESTMENTS AS OF JUNE 30, 1994 (CONCLUDED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE VALUE PERCENT OF
AMOUNT** US GOVERNMENT OBLIGATIONS COST (NOTE 1A) NET ASSETS
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
US GOVERNMENT US Treasury Notes:
OBLIGATIONS US $ 500,000 6.375% due 1/15/2000................ $ 510,859 $ 485,859 0.1%
32,775,000 5.50% due 4/15/2000................. 32,686,375 30,475,637 6.7
300,000 7.875% due 8/15/2001................ 304,953 311,344 0.1
700,000 7.50% due 11/15/2001................ 714,297 711,266 0.2
1,400,000 6.375% due 8/15/2002................ 1,383,906 1,324,093 0.3
7,175,000 6.25% due 2/15/2003................. 7,371,895 6,696,291 1.5
19,000,000 5.75% due 8/15/2003................. 19,162,891 17,016,875 3.7
12,000,000 5.875% due 2/15/2004................ 11,185,391 10,786,872 2.4
16,000,000 7.25% due 5/15/2004................. 16,231,875 15,915,008 3.4
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
TOTAL US GOVERNMENT OBLIGATIONS..... 89,552,442 83,723,245 18.4
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHORT-TERM SECURITIES
<S> <C> <C> <C> <C> <C> <C>
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
COMMERCIAL PAPER*** 20,000,000 Ciesco L.P., 4.275% due 8/01/1994... 19,926,375 19,926,375 4.4
1,812,000 General Electric Capital Corp.,
4.30% due 7/01/1994............... 1,812,000 1,812,000 0.4
10,000,000 Preferred Receivables Funding Corp.,
4.27% due 7/18/1994............... 9,979,836 9,979,836 2.2
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
TOTAL SHORT-TERM SECURITIES......... 31,718,211 31,718,211 7.0
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
TOTAL INVESTMENTS................... $ 445,925,992 450,166,615 98.7
-------------
-------------
OTHER ASSETS LESS LIABILITIES....... 6,034,707 1.3
------------- ----------
NET ASSETS.......................... $ 456,201,322 100.0%
------------- ----------
------------- ----------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<C> <S>
* American Depositary Receipt (ADR).
** Denominated in US dollars unless otherwise indicated.
*** Commercial Paper is traded on a discount basis, the
interest rates shown are the discount rates paid at the
time of purchase by the Fund.
(a) Warrants entitled 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) The rights may be exercised until July 18, 1994.
+ Non-income producing security.
</TABLE>
<TABLE>
<C> <S> <C> <C>
++Corresponding industry groups for foreign stocks and bonds:
(1) Banking (19) Packaging
(2) Building & Construction (20) Paper
(3) Business & Public Service (21) Petroleum
(4) Capital Goods (22) Pharmaceutical
(5) Chemicals (23) Photography
(6) Diversified (24) Printing & Publishing
(7) Electrical Equipment (25) Retail Stores
(8) Electronics (26) Shipping
(9) Food (27) Telecommunications
(10) Government Bonds (28) Toys
(11) Government Agencies (29) Utilities
(12) Housing (30) Utilities--Electric
(13) Insurance (31) Advertising
(14) Machinery (32) Trucking
(15) Miscellaneous (33) Real Estate
(16) Miscellaneous Capital Goods (34) Automobiles
(17) Multi-Industry (35) Textiles
(18) Natural Gas (36) Energy
</TABLE>
See Notes to Financial Statements.
31
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.--GLOBAL UTILITY FOCUS FUND
SCHEDULE OF INVESTMENTS AS OF JUNE 30, 1994 (IN US DOLLARS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE PERCENT OF NET
COUNTRY INDUSTRY HELD COMMON STOCKS & WARRANTS COST (NOTE 1A) ASSETS
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ARGENTINA TELECOMMUNICATIONS 7,900 Central Costanera S.A. (ADR)
(b)......................... $ 261,847 $ 244,900 0.2%
25,600 Telecom Argentina Stet S.A.
(ADR)* (b).................. 1,160,819 1,350,400 1.0
22,400 Telefonica de Argentina S.A.
(ADR)*...................... 1,173,168 1,304,800 1.0
------------ ------------ ----------
2,595,834 2,900,100 2.2
TOTAL COMMON STOCKS IN
ARGENTINA................... 2,595,834 2,900,100 2.2
AUSTRALIA UTILITIES--GAS 421,361 Australian Gas & Light Co.,
Ltd......................... 1,197,418 1,237,034 0.9
TOTAL COMMON STOCKS IN
AUSTRALIA................... 1,197,418 1,237,034 0.9
AUSTRIA UTILITIES--GAS 11,300 Energie Versorgung
Niederoesterreich AG
(EVN)....................... 1,388,213 1,382,291 1.0
TOTAL COMMON STOCKS IN
AUSTRIA..................... 1,388,213 1,382,291 1.0
CANADA TELECOMMUNICATIONS 56,000 BC Telecom, Inc............... 1,052,989 916,787 0.7
UTILITIES--GAS 70,100 Transcanada Pipeline Co., Ltd.
(ADR)....................... 1,045,275 832,438 0.6
93,000 Westcoast Energy, Inc......... 1,594,099 1,371,750 1.0
------------ ------------ ----------
2,639,374 2,204,188 1.6
TOTAL COMMON STOCKS IN
CANADA...................... 3,692,363 3,120,975 2.3
CHILE TELECOMMUNICATIONS 14,400 Compana de Telefonos de Chile
S.A. (ADR)*................. 1,254,995 1,231,200 0.9
UTILITIES--ELECTRIC 35,100 Distribuidora Chilectra
Metropolitana S.A. (ADR) *
(b)......................... 1,098,337 1,480,693 1.1
48,300 Enersis S.A. (ADR)*........... 1,026,061 1,020,338 0.8
------------ ------------ ----------
TOTAL COMMON STOCKS IN
CHILE....................... 3,379,393 3,732,231 2.8
CHINA UTILITIES--ELECTRIC 21,000 AES China Generating Co.,
Ltd......................... 336,000 236,250 0.2
TOTAL COMMON STOCKS IN
CHINA....................... 336,000 236,250 0.2
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
DENMARK TELECOMMUNICATIONS 77,000 Tele Danmark A/S (ADR)*....... 1,826,433 1,896,125 1.4
TOTAL COMMON STOCKS IN
DENMARK..................... 1,826,433 1,896,125 1.4
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
FRANCE UTILITIES--WATER 4,037 Compagnie Generale des Eaux... 1,844,997 1,625,076 1.2
7,000 Compagnie Lyonnaise des Eaux-
Dumez S.A................... 711,615 639,305 0.5
------------ ------------ ----------
2,556,612 2,264,381 1.7
TOTAL COMMON STOCKS IN
FRANCE...................... 2,556,612 2,264,381 1.7
GERMANY UTILITIES--GAS 4,000 VEBA AG....................... 1,305,397 1,254,246 0.9
TOTAL COMMON STOCKS IN
GERMANY..................... 1,305,397 1,254,246 0.9
HONG KONG TELECOMMUNICATIONS 894,000 Hong Kong Telecommunications,
Ltd. PLC.................... 1,646,544 1,688,757 1.3
UTILITIES--ELECTRIC 538,200 China Light & Power Co.,
Ltd......................... 3,285,897 2,750,537 2.0
253,500 Hong Kong Electric Holdings,
Ltd......................... 681,517 764,206 0.6
------------ ------------ ----------
3,967,414 3,514,743 2.6
UTILITIES--GAS 394,800 The Hong Kong & China Gas Co.,
Ltd......................... 755,615 755,989 0.6
32,900 The Hong Kong & China Gas Co.,
Ltd. (Warrants) (a)......... 0 14,473 0.0
------------ ------------ ----------
755,615 770,462 0.6
TOTAL COMMON STOCKS & WARRANTS
IN HONG KONG................ 6,369,573 5,973,962 4.5
</TABLE>
32
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.--GLOBAL UTILITY FOCUS FUND
SCHEDULE OF INVESTMENTS AS OF JUNE 30, 1994 (CONTINUED) (IN US DOLLARS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE PERCENT OF NET
COUNTRY INDUSTRY HELD COMMON STOCKS & WARRANTS COST (NOTE 1A) ASSETS
<S> <C> <C> <C> <C> <C> <C> <C> <C>
INDIA UTILITIES--ELECTRIC 7,500 CESC Ltd. (Units) (b)......... $ 400,050 $ 378,750 0.3%
4,500 CESC Ltd. (GDR)**............. 40,950 42,188 0.0
1,000 Tata Electric Companies
(GDR)**(b).................. 710,000 460,000 0.3
------------ ------------ ----------
1,151,000 880,938 0.6
TOTAL COMMON STOCKS IN
INDIA....................... 1,151,000 880,938 0.6
ITALY TELECOMMUNICATIONS 761,900 Societa Finanziara Telefonica
S.p.A. (STET)............... 1,629,934 2,012,421 1.5
729,600 Societa Italiana Esercizio
Telecom S.p.A. (SIP)........ 1,635,193 1,818,634 1.3
------------ ------------ ----------
3,265,127 3,831,055 2.8
UTILITIES--GAS 513,400 Italgas Torino S.p.A.......... 1,581,576 1,706,840 1.3
TOTAL COMMON STOCKS IN
ITALY....................... 4,846,703 5,537,895 4.1
MALAYSIA TELECOMMUNICATIONS 139,000 Telekom Malaysia BHD.......... 962,438 1,035,879 0.8
UTILITIES--GAS 148,000 Tenga Nasional BHD............ 738,712 830,055 0.6
TOTAL COMMON STOCKS IN
MALAYSIA.................... 1,701,150 1,865,934 1.4
MEXICO TELECOMMUNICATIONS 29,000 Telefonos de Mexico, S.A. de
C.V.(Telemex) (ADR)*........ 1,706,306 1,620,375 1.2
TOTAL COMMON STOCKS IN
MEXICO...................... 1,706,306 1,620,375 1.2
NEW ZEALAND TELECOMMUNICATIONS 36,800 Telecom Corporation of New
Zealand Ltd. (ADR)*......... 1,680,030 1,564,000 1.2
TOTAL COMMON STOCKS IN NEW
ZEALAND..................... 1,680,030 1,564,000 1.2
PHILIPPINES TELECOMMUNICATIONS 21,800 Philippine Long Distance
Telephone Co. (ADR)*........ 1,270,791 1,286,200 1.0
TOTAL COMMON STOCKS IN THE
PHILIPPINES................. 1,270,791 1,286,200 1.0
SPAIN TELECOMMUNICATIONS 28,700 Telefonica de Espana S.A.
(ADR)*...................... 1,065,201 1,155,175 0.9
UTILITIES--ELECTRIC 36,400 Empresa Nacional de
Electricidad, S.A. (ADR)*
(Endesa).................... 1,634,684 1,633,450 1.2
15,000 Hidrocantabrico S.A........... 503,484 445,714 0.3
131,000 Iberdrola I S.A............... 879,896 920,244 0.7
------------ ------------ ----------
3,018,064 2,999,408 2.2
TOTAL COMMON STOCKS IN
SPAIN....................... 4,083,265 4,154,583 3.1
THAILAND TELECOMMUNICATIONS 7,300 Jasmine International Public
Co. Ltd. (b)................ 100,981 100,981 0.1
2,000 TelecomAsia Corp. Public Co.,
Ltd. (PLC) (ADR)* (b)....... 43,740 61,000 0.1
TOTAL COMMON STOCKS IN
THAILAND.................... 144,721 161,981 0.2
UNITED KINGDOM TELECOMMUNICATIONS 10,000 British Telecommunications PLC
(ADR)*...................... 741,450 563,750 0.4
57,000 British Telecommunications PLC
(Ordinary).................. 406,712 323,325 0.2
248,140 British Telecommunications PLC
(Part Pay).................. 1,257,624 957,510 0.7
29,000 Vodafone Group PLC (ADR)*..... 2,549,290 2,196,750 1.6
------------ ------------ ----------
4,955,076 4,041,335 2.9
UTILITIES--ELECTRIC 86,000 London Electricity PLC........ 860,944 760,606 0.6
90,000 Powergen PLC.................. 658,010 682,767 0.5
------------ ------------ ----------
1,518,954 1,443,373 1.1
TOTAL COMMON STOCKS IN THE
UNITED KINGDOM.............. 6,474,030 5,484,708 4.0
</TABLE>
33
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.--GLOBAL UTILITY FOCUS FUND
SCHEDULE OF INVESTMENTS AS OF JUNE 30, 1994 (CONTINUED) (IN US DOLLARS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE PERCENT OF NET
COUNTRY INDUSTRY HELD COMMON STOCKS & WARRANTS COST (NOTE 1A) ASSETS
<S> <C> <C> <C> <C> <C> <C> <C> <C>
TELECOMMUNICATIONS 21,400 AirTouch Communications,
Inc......................... $ 487,282 $ 505,575 0.4%
UNITED STATES
42,800 American Telephone & Telegraph
Co.......................... 2,405,106 2,327,250 1.7
26,800 Ameritech Corp................ 1,097,333 1,025,100 0.8
18,800 Bell Atlantic Corp............ 1,145,785 1,052,800 0.8
19,700 BellSouth Corp................ 1,149,084 1,216,475 0.9
31,500 GTE Corp...................... 1,170,878 992,250 0.7
40,100 MCI Communications Corp....... 1,072,528 887,213 0.7
25,000 NYNEX Corp.................... 1,122,520 946,875 0.7
21,400 Pacific Telesis Group......... 673,051 660,725 0.5
26,300 Southwestern Bell Corp........ 1,118,830 1,144,050 0.8
39,900 U S West, Inc................. 1,863,861 1,670,813 1.2
------------ ------------ ----------
13,306,258 12,429,126 9.2
UTILITIES--ELECTRIC 51,600 Allegheny Power System,
Inc......................... 1,388,846 1,083,600 0.8
34,500 Boston Edison Co.............. 1,043,424 905,625 0.7
38,300 Central & SouthWest Corp...... 1,237,363 813,875 0.6
36,300 Consolidated Edison Co. of New
York........................ 1,231,425 961,950 0.7
23,500 Detroit Edison Co............. 780,953 581,625 0.4
26,400 Dominion Resources, Inc....... 1,242,516 960,300 0.7
61,000 Duke Power Co................. 2,452,906 2,180,750 1.6
42,300 Entergy Corp.................. 1,603,740 1,046,925 0.8
65,200 General Public Utilities
Corp........................ 2,047,341 1,711,500 1.3
53,100 Houston Industries, Inc....... 2,527,966 1,732,388 1.3
52,900 Long Island Lighting Co....... 1,352,116 938,975 0.7
36,700 New York State Electric & Gas
Corp........................ 1,193,011 871,625 0.6
41,000 NIPSCO Industries, Inc........ 1,354,765 1,209,500 0.9
31,300 Northeast Utilities Co........ 843,216 680,775 0.5
53,800 PacifiCorp.................... 1,068,916 907,875 0.7
68,800 PECO Energy Co................ 2,069,313 1,814,600 1.3
26,307 Pennsylvania Power & Light
Co.......................... 775,564 516,275 0.4
60,300 PSI Resources, Inc............ 1,565,918 1,273,838 0.9
36,000 Public Service Co. of
Colorado.................... 1,101,146 940,500 0.7
28,900 Rochester Gas & Electric
Corp........................ 825,784 628,575 0.5
47,000 SCEcorp....................... 997,607 605,125 0.5
63,200 Southern Co................... 1,406,779 1,185,000 0.9
30,000 Texas Utilities Co............ 1,292,247 941,250 0.7
34,600 Western Resources Co.......... 1,226,601 929,875 0.7
------------ ------------ ----------
32,629,463 25,422,326 18.9
UTILITIES--GAS 33,000 The Brooklyn Union Gas Co..... 855,855 804,375 0.6
38,000 The Coastal Corp.............. 1,072,258 1,026,000 0.8
16,800 El Paso Natural Gas Co........ 625,148 541,800 0.4
62,700 Enron Corp.................... 2,091,163 2,053,425 1.5
26,100 National Fuel Gas Company..... 788,314 766,688 0.6
18,000 New Jersey Resources Corp..... 501,748 396,000 0.3
41,100 NICOR Inc..................... 1,175,128 1,084,012 0.8
39,500 Questar Corp.................. 1,453,628 1,278,812 0.9
53,200 Sonat, Inc.................... 1,710,835 1,635,900 1.2
17,900 Washington Gas Light Co....... 777,572 675,725 0.5
57,600 Williams Co., Inc............. 1,613,518 1,648,800 1.2
------------ ------------ ----------
12,665,167 11,911,537 8.8
TOTAL COMMON STOCKS IN THE
UNITED STATES............... 58,600,888 49,762,989 36.9
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
TOTAL INVESTMENTS IN COMMON
STOCKS & WARRANTS........... 106,306,120 96,317,198 71.6
</TABLE>
- --------------------------------------------------------------------------------
34
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.--GLOBAL UTILITY FOCUS FUND
SCHEDULE OF INVESTMENTS AS OF JUNE 30, 1994 (CONCLUDED) (IN US DOLLARS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE VALUE PERCENT OF NET
COUNTRY INDUSTRY AMOUNT FIXED-INCOME SECURITIES COST (NOTE 1A) ASSETS
<S> <C> <C> <C> <C> <C> <C> <C> <C>
AUSTRALIA TELECOMMUNICATIONS $1,040,000 Telstra Corp. Ltd., 6.50% due
7/31/2003 (b)............... $ 1,084,062 $ 944,580 0.7%
TOTAL FIXED-INCOME SECURITIES
IN AUSTRALIA................ 1,084,062 944,580 0.7
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
KOREA UTILITIES--ELECTRIC 1,000,000 Korea Electric Power Corp.,
6.375% due 12/01/2003....... 985,510 858,980 0.6
TOTAL FIXED-INCOME SECURITIES
IN KOREA.................... 985,510 858,980 0.6
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
TOTAL INVESTMENTS IN
FIXED-INCOME SECURITIES..... 2,069,572 1,803,560 1.3
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHORT-TERM SECURITIES
<S> <C> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
COMMERCIAL PAPER*** 4,314,000 General Electric Capital
Corp., 4.30% due
7/01/1994................... 4,313,484 4,313,484 3.1
4,000,000 Hewlett-Packard Co., 4.23% due
7/13/1994................... 3,993,890 3,993,890 2.9
3,000,000 Matterhorn Capital Corp.,
4.23% due 7/08/1994......... 2,997,180 2,997,180 2.2
5,000,000 Motorola, Inc., 4.22% due
7/08/1994................... 4,995,311 4,995,311 3.6
7,000,000 National Australia Funding,
4.25% due 7/08/1994......... 6,993,388 6,993,388 5.1
6,000,000 Nomura Securities Co., Ltd.,
4.45% due 7/05/1994......... 5,996,291 5,996,291 4.4
5,000,000 Southern California Edison
Co., 4.30% due 7/06/1994.... 4,996,416 4,996,416 3.6
3,000,000 Wal-Mart Stores, Inc., 4.20%
due 7/29/1994............... 2,989,850 2,989,850 2.2
------------ ------------ ----------
37,275,810 37,275,810 27.1
TOTAL INVESTMENTS IN
SHORT-TERM SECURITIES....... 37,275,810 37,275,810 27.1
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
TOTAL INVESTMENTS............. $145,651,502 135,396,568 100.0
------------
------------
OTHER ASSETS LESS
LIABILITIES................. 29,664 0.0
------------ ----------
NET ASSETS.................... $135,426,232 100.0%
------------ ----------
------------ ----------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
* American Depositary Receipt (ADR).
** Global Depositary Receipt (GDR).
*** Commercial Paper is traded on a discount basis; the interest rates shown are the discount rates paid at the time of
purchase by the Fund.
(a) 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) Restricted security. The value of the Fund's investment in restricted securities was approximately $5,021,000,
representing 3.7% of net assets.
</TABLE>
See Notes to Financial Statements.
35
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.--HIGH CURRENT INCOME FUND
SCHEDULE OF INVESTMENTS AS OF JUNE 30, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
S&P MOODY'S FACE VALUE
INDUSTRY RATINGS RATINGS AMOUNT ISSUE COST (NOTE 1A)
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
AIRLINES--2.9% Delta Air Lines Inc.:
BB+ Baa3 $ 1,000,000 9.30% due 1/02/2010................. $ 987,700 $ 912,646
BB B1 500,000 10.50% due 4/30/2016................ 506,875 487,480
United Air Lines, Inc.:
BB B1 1,000,000 9.35% due 4/07/2016................. 1,016,260 960,000
BB+ Baa2 995,000 9.21% due 1/21/2017................. 991,938 845,422
BB B1 4,000,000 USAir, Inc., 10.375% due
3/01/2013......................... 3,935,000 3,520,000
------------- -------------
7,437,773 6,725,548
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
AUTOMOBILE PARTS--1.7% B B2 2,000,000 JPS Automotive Products Corp.,
11.125% due 6/15/2001............. 2,000,000 1,990,000
B B3 2,000,000 SPX Corp., 11.75% due 6/01/2002..... 2,043,750 2,030,000
------------- -------------
4,043,750 4,020,000
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
BROADCASTING & BB- Ba3 750,000 Heritage Media Services Inc., 11.00%
PUBLISHING--2.9% due 6/15/2002..................... 789,063 772,500
BB- Ba3 250,000 K-III Communications Corp., 10.625%
due 5/01/2002..................... 250,000 252,500
B B3 500,000 The Katz Corp., 12.75% due
11/15/2002........................ 510,625 535,000
B Caa 3,800,000 NWCG Holding Corp., 13.50% due
6/15/1999*........................ 1,988,236 1,988,236
BB- B3 2,500,000 SCI Television Inc., 11.00% due
6/30/2005......................... 2,560,000 2,550,000
B+ B3 1,000,000 Sinclair Broadcast Group Inc.,
10.00% due 12/15/2003............. 1,000,000 990,000
------------- -------------
7,097,924 7,088,236
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
BUILDING & B- B2 2,500,000 Del Webb Corp., 9.00% due
CONSTRUCTION--1.1% 2/15/2006......................... 2,497,500 2,162,500
B B1 250,000 K Hovnanian Enterprises Inc., 11.25%
due 4/15/2002..................... 247,813 253,750
BB- Ba3 250,000 Ryland Group Inc., 10.50% due
7/15/2002......................... 246,260 248,750
------------- -------------
2,991,573 2,665,000
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
BUILDING MATERIALS--1.9% CCC Caa 3,000,000 Nortek Inc., 9.875% due 3/01/2004... 2,867,500 2,730,000
B+ B3 1,900,000 Pacific Lumber Co., 10.50% due
3/01/2003......................... 1,916,938 1,847,750
------------- -------------
4,784,438 4,577,750
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
BUILDING PRODUCTS--1.9% American Standard Inc.:
B B1 2,385,000 11.37% due 6/01/2005*............... 1,477,631 1,454,850
B+ Ba3 250,000 9.25% due 12/01/2016................ 251,875 230,000
B Ba3 1,750,000 Inter-City Products Corp., 9.75% due
3/01/2000......................... 1,718,750 1,557,500
USG Corp.:
BB- B1 250,000 10.25% due 12/15/2002............... 251,563 250,000
B B2 1,000,000 8.75% due 3/01/2017................. 904,375 845,000
------------- -------------
4,604,194 4,337,350
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
CAPITAL GOODS--2.0% BB- Ba3 3,000,000 AMETEK, Inc., 9.75% due 3/15/2004... 2,980,000 3,030,000
B+ B1 1,660,000 Essex Group, Inc., 10.00% due
5/01/2003......................... 1,668,925 1,643,400
------------- -------------
4,648,925 4,673,400
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
CELLULAR TELEPHONES--0.6% B- B3 1,500,000 Dial Page, Inc., 12.25% due
2/15/2000......................... 1,586,125 1,530,000
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
CHEMICALS--2.4% B B2 2,100,000 Agricultural Minerals & Chemicals
Co., L.P., 10.75% due 9/30/2003... 2,113,813 2,121,000
B Ba3 3,735,000 G-I Holdings Inc., 11.38% due
10/01/1998*....................... 2,332,342 2,287,688
B- B3 1,750,000 Indespec Chemical Corp., 11.50% due
12/01/2003*....................... 1,033,616 1,080,625
------------- -------------
5,479,771 5,489,313
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
COMMUNICATIONS--0.8% CCC+ Caa 3,670,000 American Telecasting, Inc., 12.50%
due 6/15/2004*.................... 2,009,336 1,926,750
</TABLE>
- --------------------------------------------------------------------------------
36
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.--HIGH CURRENT INCOME FUND
SCHEDULE OF INVESTMENTS AS OF JUNE 30, 1994 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
S&P MOODY'S FACE VALUE
INDUSTRY RATINGS RATINGS AMOUNT ISSUE COST (NOTE 1A)
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CONGLOMERATES--7.6% NR B3 $ 2,000,000 Astrum International Corp., 11.50%
due 6/08/2003..................... $ 2,017,500 $ 2,025,000
B Caa 317,000 Collins & Aikman Group., Inc.,
10.00% due 1/31/2005.............. 274,408 313,830
B+ B1 1,750,000 Coltec Industries, Inc., 10.25% due
4/01/2002......................... 1,866,250 1,767,500
Foamex Capital Corp.:
BB- B1 530,000 9.50% due 6/01/2000................. 517,413 503,500
B+ B1 450,000 11.25% due 10/01/2002............... 458,875 461,250
Interco Inc.:
B+ Ba3 1,748,000 10.00% due 6/01/2001................ 1,767,980 1,726,150
B+ Ba3 1,000,000 9.00% due 6/01/2004................. 973,906 970,000
B B2 2,000,000 JB Poindexter & Co., 12.50% due
5/15/2004......................... 2,000,000 2,010,000
B+ B3 3,000,000 Jordan Industries Inc., 10.375% due
8/01/2003......................... 2,993,000 2,917,500
NR B3 150,000 MacAndrews & Forbes Group, Inc.,
13.00% due 3/01/1999.............. 128,373 150,375
Sequa Corp.:
BB B2 750,000 9.625% due 10/15/1999............... 740,625 742,500
B+ B3 2,000,000 9.375% due 12/15/2003............... 2,054,688 1,960,000
BB- Ba3 3,000,000 Sherritt Gordon, Ltd., 9.75% due
4/01/2003......................... 2,985,938 2,962,500
------------- -------------
18,778,956 18,510,105
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
CONSUMER PRODUCTS--1.8% NR NR 750,000 Formica Corp., 13.928% due
9/15/2005......................... 750,000 732,188
Liggett Group, Inc.:
NR NR 500,000 11.50% due 2/01/1999................ 451,760 350,000
NR NR 9,000 16.50% due 2/01/1999+++............. 9,000 6,750
B- Caa 2,000,000 Polymer Group Inc., 12.25% due
7/15/2002+++...................... 2,000,000 2,000,000
B B3 3,000,000 Revlon Worldwide Corp., 14.84% due
3/15/1998*........................ 1,779,860 1,230,000
------------- -------------
4,990,620 4,318,938
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
CONTAINERS--3.9% B B2 2,500,000 Anchor Glass Container Co., 9.875%
due 12/15/2008.................... 2,413,750 2,312,500
B- B3 250,000 IVEX Packaging Corp., 12.50% due
12/15/2002........................ 248,248 262,500
Owens-Illinois, Inc.:
B+ B2 2,000,000 10.00% due 8/01/2002................ 2,000,000 1,995,000
750,000 11.00% due 12/01/2003............... 855,938 795,000
B- B3 2,660,000 Silgan Holdings, Inc., 13.00% due
6/15/1996*........................ 2,152,283 2,128,000
B+ B1 1,000,000 Stone Consolidated Corp., 10.25% due
12/15/2000........................ 1,000,000 970,000
B+ Ba3 1,000,000 Sweetheart Cup Co., 9.625% due
9/01/2000......................... 1,000,000 980,000
------------- -------------
9,670,219 9,443,000
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
CONVERTIBLE BONDS+--0.6% B- B2 200,000 MEDIQ Inc., 7.25% due
6/01/2006 (1)..................... 138,000 138,000
B+ NR 1,200,000 OHM Corp., 8.00% due 10/01/2006
(2)............................... 1,070,500 1,026,000
B B3 250,000 UNC Inc., 7.50% due
3/31/2006 (3)..................... 145,625 197,500
------------- -------------
1,354,125 1,361,500
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
DRUG STORES--0.9% B B2 2,000,000 Thrifty Payless Holdings Inc.,
11.75% due 4/15/2003.............. 2,000,000 2,040,000
</TABLE>
- --------------------------------------------------------------------------------
37
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.--HIGH CURRENT INCOME FUND
SCHEDULE OF INVESTMENTS AS OF JUNE 30, 1994 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
S&P MOODY'S FACE VALUE
INDUSTRY RATINGS RATINGS AMOUNT ISSUE COST (NOTE 1A)
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ENERGY--10.6% B+ B1 $ 4,000,000 Clark Oil & Refining Corp., 11.00%
due 2/15/2000*.................... $ 2,250,003 $ 2,200,000
NR NR 1,500,000 Consolidated Hydro, Inc., 11.80% due
7/15/2003*........................ 893,929 870,000
B- B3 2,000,000 Dual Drilling Co., 9.875% due
1/15/2004......................... 2,013,125 1,860,000
BB- B1 2,925,000 Energy Ventures, Inc., 10.25% due
3/15/2004+++...................... 2,901,875 2,866,500
B B2 2,000,000 Ferrell Gas Companies, Inc., 11.625%
due 12/15/2003.................... 2,140,420 2,200,000
B+ B1 600,000 Global Marine Inc., 12.75% due
12/15/1999........................ 616,625 648,000
Gulf Canada Resources, Ltd.:
BB B1 1,580,000 9.00% due 8/15/1999................. 1,517,450 1,548,400
B+ B2 2,000,000 9.25% due 1/15/2004................. 1,965,625 1,860,000
Maxus Energy Corp.:
BB B1 2,500,000 9.375% due 11/01/2003............... 2,352,500 2,293,750
BB+ Ba3 250,000 11.50% due 11/15/2015............... 246,563 257,500
CC B3 157,000 National Propane Corp., 13.125% due
3/01/1999......................... 123,590 157,393
BB- Ba3 2,000,000 Noble Drilling Corp., 9.25% due
10/01/2003........................ 1,952,500 1,910,000
BBB+ Baa2 200,000 Oryx Energy Co., 10.375% due
9/15/2018......................... 198,494 204,538
BB Ba2 250,000 Rowan Companies, Inc., 11.875% due
12/01/2001........................ 257,500 265,000
BB+ Ba3 2,500,000 Seagull Energy Corp., 8.625% due
8/01/2005......................... 2,493,750 2,300,000
B B3 250,000 Tesoro Petroleum Corp., 12.75% due
3/15/2001......................... 229,275 250,000
BB- B1 1,750,000 Trans Texas Gas Corp., 10.50% due
9/01/2000......................... 1,766,875 1,750,000
B+ B1 2,000,000 Triton Energy Corp., 12.816% due
11/01/1997*....................... 1,434,598 1,420,000
------------- -------------
25,354,697 24,861,081
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
ENTERTAINMENT--2.7% B B3 500,000 AMC Entertainment, Inc., 12.625% due
8/01/2002......................... 509,743 550,000
B+ B1 250,000 Cinemark USA, Inc., 12.00% due
6/01/2002......................... 250,000 272,500
B B3 4,865,000 Marvel Holdings Inc., 11.47% due
4/15/1998*........................ 3,132,766 2,991,975
Spectra Vision Inc.:
B+ B2 3,415,000 11.06% due 10/01/2001*.............. 2,599,047 2,049,000
B- B3 1,063,000 11.65% due 12/01/2002 (a)........... 1,012,684 468,537
------------- -------------
7,504,240 6,332,012
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
FINANCIAL SERVICES--1.8% BB Ba1 1,500,000 Lomas Mortgage USA Inc., 10.25% due
10/01/2002........................ 1,561,250 1,470,000
B+ B1 250,000 Pioneer Finance Corp., 13.50% due
12/01/1998........................ 264,062 257,500
BB+ B1 3,000,000 Reliance Group Holdings Inc., 9.75%
due 11/15/2003.................... 2,985,000 2,715,000
------------- -------------
4,810,312 4,442,500
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
FOOD & BEVERAGE--9.1% B+ B1 3,500,000 Canandaigua Wine Inc., 8.75% due
12/15/2003........................ 3,115,000 3,080,000
BB- B1 3,000,000 Chiquita Brands International Inc.,
9.125% due 3/01/2004.............. 2,950,625 2,760,000
NR NR 2,000,000 Cumberland Farms, 10.50% due
10/01/2003++...................... 1,957,500 1,790,000
BB- B1 2,000,000 Del Monte Corp., 10.00% due
5/01/2003......................... 1,980,000 1,820,000
B- B2 3,000,000 Envirodyne Industries, Inc., 10.25%
due 12/01/2001.................... 3,056,250 2,640,000
B- B2 400,000 Farm Fresh Inc., 7.50% due
3/01/2010......................... 208,000 253,318
</TABLE>
38
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.--HIGH CURRENT INCOME FUND
SCHEDULE OF INVESTMENTS AS OF JUNE 30, 1994 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
S&P MOODY'S FACE VALUE
INDUSTRY RATINGS RATINGS AMOUNT ISSUE COST (NOTE 1A)
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
FOOD & BEVERAGE B- B2 $ 3,000,000 Grand Union Co., 12.25% due
(CONCLUDED) 7/15/2002......................... $ 3,090,000 $ 2,902,500
B- B3 2,000,000 Heileman Acquisition Co., 9.625% due
1/31/2004......................... 2,000,000 1,825,000
C Caa 1,000,000 Kash N' Karry Food Stores, Inc.,
14.00% due 2/01/2001.............. 996,250 340,000
BB- Ba3 250,000 P&C Food Markets, Inc., 11.50% due
10/15/2001........................ 260,156 265,000
B B2 1,000,000 Penn Traffic Co., 9.625% due
4/15/2005......................... 1,013,760 940,000
B- B2 2,000,000 Pueblo Xtra International Inc.,
9.50% due 8/01/2003............... 2,004,375 1,800,000
B B2 1,000,000 Specialty Foods Corp., 10.25% due
8/15/2001......................... 1,000,000 905,000
------------- -------------
23,631,916 21,320,818
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
HEALTH SERVICES--1.2% BB- Ba2 500,000 American International Group, Inc.,
11.25% due 6/01/2015.............. 525,625 527,500
B+ B1 250,000 Continental Medical Systems Inc.,
10.875% due 8/15/2002............. 248,125 240,000
B+ B1 250,000 Continental Medsystems, Inc.,
10.375% due 4/01/2003............. 249,687 233,750
Healthtrust Inc.:
B+ B1 250,000 10.75% due 5/01/2002................ 255,625 253,750
B B1 1,500,000 10.25% due 4/15/2004................ 1,500,000 1,492,500
B+ B1 250,000 MEDIQ/PRN Life Support Services,
Inc., 11.125% due 7/01/1999....... 250,625 250,000
------------- -------------
3,029,687 2,997,500
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
HIGH TECHNOLOGY--0.1% B- B3 250,000 ComputerVision Corp., 10.875% due
8/15/1997......................... 250,625 236,250
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
HOTELS & CASINOS--7.5% B B2 2,250,000 Aztar Corp., 11.00% due
10/01/2002........................ 2,295,000 2,115,000
BB B1 3,000,000 Bally's Park Place Funding Corp.,
9.25% due 3/15/2004............... 2,850,000 2,670,000
NR NR 158,000 Goldriver Hotel & Casino Finance
Corp., 11.375% due 8/31/1999...... 222,801 154,840
B+ B2 3,000,000 Greater Bay Properties, Inc.,
10.875% due 1/15/2004............. 2,755,000 2,400,000
BB- B1 3,931,000 Host Marriott Hospitality, Inc.,
10.375% due 6/15/2011............. 4,002,486 3,931,000
BB- B1 2,000,000 JQ Hammons Hotel, 8.875% due
2/15/2004......................... 1,775,000 1,780,000
BB- Ba3 2,500,000 Showboat Inc., 9.25% due 5/01/2008.. 2,528,750 2,237,500
NR Ca 20 Trump Castle Funding, Inc., 7.00%
due 11/15/2005 (a)................ 18 13
B B3 3,000,000 Trump Plaza Funding, Inc., 10.875%
due 6/15/2001..................... 2,963,277 2,460,000
NR Caa 541,954 Trump Taj Mahal Funding, Inc.,
11.35% due 11/15/1999 (a)......... 415,272 431,294
------------- -------------
19,807,604 18,179,647
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
INDUSTRIAL SERVICES--1.8% BB- B2 4,000,000 ADT Operations, 9.25% due
8/01/2003......................... 4,010,000 3,730,000
B- B3 500,000 Bell & Howell Co., 10.75% due
10/01/2002........................ 507,500 515,000
------------- -------------
4,517,500 4,245,000
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
INDUSTRIALS--1.9% B B2 3,000,000 Coca-Cola Bottling Co., 9.00% due
11/15/2003........................ 2,973,750 2,730,000
BB Baa3 1,500,000 Navistar Financial Co., 8.875% due
11/15/1998........................ 1,500,000 1,440,000
Thermadyne Industries, Inc.:
NR NR 155,000 10.25% due 5/01/2002................ 155,705 150,350
NR NR 215,000 10.75% due 11/01/2003............... 215,848 208,550
------------- -------------
4,845,303 4,528,900
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
METALS & MINING--1.2% B- B2 1,000,000 Kaiser Aluminum Corp., 12.75% due
2/01/2003......................... 1,003,750 1,010,000
B- B3 3,000,000 Maxxam Group, Inc., 12.25% due
8/01/2003*........................ 1,748,558 1,845,000
------------- -------------
2,752,308 2,855,000
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
PAPER--5.3% B+ B2 1,000,000 Container Corp. of America, 9.75%
due 4/01/2003..................... 1,015,000 950,000
BB- Ba3 2,000,000 Doman Industries Ltd., 8.75% due
3/15/2004......................... 1,825,000 1,790,000
</TABLE>
39
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.--HIGH CURRENT INCOME FUND
SCHEDULE OF INVESTMENTS AS OF JUNE 30, 1994 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
S&P MOODY'S FACE VALUE
INDUSTRY RATINGS RATINGS AMOUNT ISSUE COST (NOTE 1A)
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------
PAPER B+ B1 $ 250,000 Fort Howard Corp.:
(CONCLUDED) B B2 3,000,000 9.25% due 3/15/2001.................
PAPER & PACKAGING--0.7% B+ B1 3,000,000 9.00% due 2/01/2006................. $ 250,000 $ 233,750
B B1 1,250,000 Repap Wisconsin Finance, Inc., 9.25% 2,935,000 2,550,000
B B1 1,000,000 due 2/01/2002..................... 2,760,000 2,715,000
B B1 2,250,000 Riverwood International, Corp., 1,340,312 1,293,750
B- Caa 3,500,000 11.25% due 6/15/2002.............. 1,000,000 1,050,000
Stone Container Corp.: 2,238,125 2,086,875
12.625% due 7/15/1998............... ------------- -------------
9.875% due 2/01/2001................
IVEX Holdings Corp., 13.25% due 13,363,437 12,669,375
3/15/2005*........................ 1,780,000 1,767,500
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
POLLUTION CONTROL--1.5% B B3 3,500,000 Mid-American Waste Systems, Inc.,
12.25% due 2/15/2003.............. 3,555,000 3,556,875
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
RAILROADS--0.4% B+ Ba3 1,000,000 Southern Pacific Rail Co., 9.375%
due 8/15/2005..................... 1,000,000 1,000,000
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
RESTAURANTS--3.4% B B1 3,000,000 Family Restaurants Inc., 9.75% due
2/01/2002......................... 2,775,000 2,730,000
B- B2 3,000,000 Flagstar Corp., 11.375% due
9/15/2003......................... 2,931,250 2,730,000
Foodmaker, Inc.:
B- B2 1,500,000 9.75% due 6/01/2002................. 1,502,812 1,342,500
B- B2 1,750,000 9.75% due 11/01/2003+++............. 1,722,700 1,529,063
------------- -------------
8,931,762 8,331,563
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
RETAIL SPECIALTY--1.6% B+ B2 1,500,000 Bradlees, Inc., 11.00% due
8/01/2002......................... 1,524,062 1,500,000
B- B3 1,500,000 Pamida Holdings, Inc., 11.75% due
3/15/2003......................... 1,502,187 1,530,000
B- B3 1,000,000 Specialty Retailers Services Inc.,
11.00% due 8/15/2003.............. 1,000,000 990,000
------------- -------------
4,026,249 4,020,000
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
STEEL--1.4% B B2 1,500,000 AK Steel Holding Corp., 10.75% due
4/01/2004......................... 1,500,000 1,503,750
B+ B1 2,000,000 WCI Steel, Inc., 10.50% due
3/01/2002......................... 2,000,000 2,020,000
------------- -------------
3,500,000 3,523,750
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
TEXTILES--1.3% B+ B3 3,500,000 Westpoint Stevens Industries, Inc.,
9.375% due 12/15/2005............. 3,291,250 3,167,500
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
TRANSPORTATION--0.5% B+ Ba3 1,250,000 Viking Star Shipping Co., 9.625% due
7/15/2003......................... 1,252,812 1,212,500
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
TRANSPORTATION B+ B1 186,000 ACF Industries Inc., 11.60% due
SERVICES--0.9% 5/15/2000......................... 177,630 186,930
NR NR 3,700,000 Transtar Holdings Inc., 11.00% due
12/15/2003+++..................... 2,104,465 2,007,250
------------- -------------
2,282,095 2,194,180
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
UTILITIES--2.9% B+ Ba3 3,500,000 Beaver Valley Funding, 9.00% due
6/01/2017......................... 3,296,875 2,870,000
CTC Mansfield Funding Corp.:
BB+ Ba1 500,000 10.25% due 3/30/2003................ 490,000 485,000
BB+ Ba1 1,500,000 11.125% due 9/30/2016............... 1,612,500 1,451,790
Midland Cogeneration Venture L.P.:
BB- Ba2 922,178 10.33% due 7/23/2002................ 952,149 911,721
BB- Ba2 250,000 11.75% due 7/23/2005................ 250,000 249,875
Tucson Electric Power Co.++:
NR NR 570,387 10.21% due 1/01/2009................ 529,034 524,756
NR NR 500,000 10.732% due 1/01/2013............... 461,050 467,500
------------- -------------
7,591,608 6,960,642
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
TOTAL INVESTMENTS IN CORPORATE
BONDS--90.8%...................... 228,556,134 217,109,483
</TABLE>
- --------------------------------------------------------------------------------
40
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.--HIGH CURRENT INCOME FUND
SCHEDULE OF INVESTMENTS AS OF JUNE 30, 1994 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
INDUSTRY HELD PREFERRED STOCKS COST (NOTE 1A)
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
BROADCASTING & PUBLISHING--0.5% 36,600 K-III Communications Corp.......... $ 998,487 $ 969,900
2,794 K-III Communications Corp. (a)..... 286,261 273,165
------------- -------------
1,284,748 1,243,065
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
STEEL--1.2% 120,000 USX Capital Corp. (c).............. 3,000,000 2,805,000
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
TOTAL INVESTMENTS IN
PREFERRED STOCKS--1.7%........... 4,284,748 4,048,065
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
COMMON STOCKS
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
ENERGY--0.0% 4,900 Petrolane Inc...................... 56,962 51,450
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
FOOD & BEVERAGE--0.0% 4,169 Doskocil Companies, Inc. (c)....... 239,327 37,000
7,063 RJR Holdings Corp. (c)............. 68,864 43,261
------------- -------------
308,191 80,261
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
HOTELS & CASINOS--0.0% 1,217 Buckhead Corp. of America++ (c).... 3,042 3,042
2,500 Goldriver Hotel & Casino Finance
Corp.++ (c)...................... 18,603 8,906
500 Trump Taj Mahal Holding Corp.
(Class A) (c).................... 250 10,750
------------- -------------
21,895 22,698
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
INDUSTRIALS--0.0% 311 Thermadyne Industries, Inc. (c).... 4,495 3,654
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
STEEL--0.0% 1,259 LTV Corp. (c)...................... 141,540 19,357
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
TOTAL INVESTMENTS IN COMMON
STOCKS--0.0%..................... 533,083 177,420
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
TRUSTS & WARRANTS
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
ENERGY--0.0% 833 UGI Corp. (Warrants) (b)+++........ 3,644 937
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
HIGH TECHNOLOGY--0.0% 7,588 Anacomp, Inc. (Warrants) (b) (c)
++............................... 10,000 10,433
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
HOTEL 250 Goldriver Hotel & Casino Finance
Corp. (Liquidating Trust)........ 6,000 4,282
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
PAPER--0.0% 28,046 Gaylord Container Corp.
(Warrants) (b) (c)............... 59,598 106,925
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
TOTAL INVESTMENTS IN TRUSTS
& WARRANTS--0.0%................. 79,242 122,577
</TABLE>
- --------------------------------------------------------------------------------
41
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.--HIGH CURRENT INCOME FUND
SCHEDULE OF INVESTMENTS AS OF JUNE 30, 1994 (CONCLUDED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE VALUE
AMOUNT SHORT-TERM SECURITIES COST (NOTE 1A)
- --------------------------------------------------------------------------------
<
<S> <C> <C> <C> <C>
COMMERCIAL PAPER**--5.5% $ 5,000,000 Ciesco L.P., 4.25% due 7/13/1994... $ 4,992,326 $ 4,992,326
8,571,000 General Electric Capital Corp.,
4.30% due 7/01/1994.............. 8,569,976 8,569,976
------------- -------------
13,562,302 13,562,302
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
TOTAL INVESTMENTS IN SHORT-TERM
SECURITIES--5.5%................. 13,562,302 13,562,302
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
TOTAL INVESTMENTS--98.0%........... $ 247,015,509 235,019,847
-------------
-------------
OTHER ASSETS LESS
LIABILITIES--2.0%................ 4,724,059
-------------
NET ASSETS--100.0%................. $ 239,743,906
-------------
-------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<C> <S>
* Represents the yield to maturity at time of purchase.
** Commercial Paper is traded on a discount basis; the interest rates shown are the discount rates paid at the time of
purchase by the Fund.
(a) Represents a pay-in-kind security which may pay interest/dividend in additional face/shares.
(b) Warrants entitle the portfolio to purchase a predetermined number of shares of common stock/face amount of bonds. The
purchase price and number of shares/face amount are subject to adjustment under certain conditions until the
expiration date.
(c) Non-income producing security.
+ Corresponding industry groups for convertible bonds:
(1) Healthcare
(2) Waste Management
(3) Conglomerates
++ Restricted securities as to resale.
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
ISSUE ACQUISITION DATE(S) COST (NOTE 1A)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Anacomp (Warrants).................................................. 10/23/90 $ 10,000 $ 10,433
Buckhead Corp. of America........................................... 12/29/92 to 3/28/94 3,042 3,042
Cumberland Farms, 10.50% due 10/01/2003............................. 2/18/94 1,957,500 1,790,000
Goldriver Hotel & Casino Finance Corp............................... 8/31/92 18,603 8,906
Tucson Electric Power Co., 10.21% due 1/01/2009..................... 6/16/93 529,034 524,756
Tucson Electric Power Co., 10.723% due 1/01/2013.................... 3/01/93 461,050 467,500
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
TOTAL............................................................... $ 2,979,229 2,804,637
----------- ------------
-----------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
+++Other restricted securities. 8,410,500
------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
TOTAL RESTRICTED SECURITIES--4.68% $ 11,215,137
------------
------------
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
42
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.--INTERMEDIATE GOVERNMENT BOND FUND
SCHEDULE OF INVESTMENTS AS OF JUNE 30, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE VALUE
AMOUNT ISSUE COST (NOTE 1A)
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
US GOVERNMENT & AGENCY OBLIGATIONS
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
US GOVERNMENT & US Treasury Bills:
AGENCY OBLIGATIONS*--87.5% $ 137,000 3.57% due 7/07/1994............................. $ 136,905 $ 136,905
3,628,000 3.58% due 7/07/1994............................. 3,625,475 3,625,475
131,000 3.73% due 7/07/1994............................. 130,905 130,905
354,000 3.00% due 7/14/1994............................. 353,587 353,587
169,000 3.65% due 7/14/1994............................. 168,760 168,760
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
TOTAL US TREASURY BILLS......................... 4,415,632 4,415,632
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
TOTAL US GOVERNMENT & AGENCY
OBLIGATIONS--87.5%............................ 4,415,632 4,415,632
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
TOTAL INVESTMENTS--87.5%........................ $ 4,415,632 4,415,632
-----------
-----------
OTHER ASSETS LESS LIABILITIES--12.5%............ 628,569
-----------
NET ASSETS--100.0%.............................. $ 5,044,201
-----------
-----------
</TABLE>
- --------------------------------------------------------------------------------
*Certain US Government & Agency Obligations are traded on a discount basis; the
interest rates shown are the discount rates paid at the time of purchase by the
Fund.
See Notes to Financial Statements.
43
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.--INTERNATIONAL BOND FUND
SCHEDULE OF INVESTMENTS AS OF JUNE 30, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE PERCENT OF NET
NORTH AMERICA FACE AMOUNT ISSUE COST (NOTE 1A) ASSETS
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Canadian Government
CANADA FOREIGN GOVERNMENT Bonds:
OBLIGATIONS
C$ 330,000 7.75% due
9/01/1999.......... $ 231,091 $ 227,084 3.7%
430,000 6.50% due
6/01/2004.......... 268,221 256,849 4.1
499,312 483,933 7.8
TOTAL INVESTMENTS IN
CANADA............. 499,312 483,933 7.8
TOTAL INVESTMENTS IN
NORTH AMERICA...... 499,312 483,933 7.8
PACIFIC BASIN
AUSTRALIA FOREIGN GOVERNMENT Australian Government
OBLIGATIONS Bonds:
A$ 160,000 6.25% due
3/15/1999.......... 102,487 104,622 1.7
700,000 9.00% due
9/15/2004.......... 515,911 489,596 7.9
618,398 594,218 9.6
TOTAL INVESTMENTS IN
AUSTRALIA.......... 618,398 594,218 9.6
JAPAN FOREIGN GOVERNMENT Yen 18,000,000 Japanese Government
OBLIGATIONS Bond, 4.10% due
6/21/2004.......... 173,865 178,860 2.9
TOTAL INVESTMENTS IN
JAPAN.............. 173,865 178,860 2.9
TOTAL INVESTMENTS IN
THE
PACIFIC BASIN...... 792,263 773,078 12.5
WESTERN EUROPE
BELGIUM FOREIGN GOVERNMENT Bf 5,000,000 Government of
OBLIGATIONS Belgium, 7.25% due
4/29/2004.......... 143,839 145,693 2.3
TOTAL INVESTMENTS IN
BELGIUM............ 143,839 145,693 2.3
DENMARK FOREIGN GOVERNMENT Denmark Government
OBLIGATIONS Bonds:
Dkr 1,000,000 6.00% due
12/10/1999......... 147,486 146,688 2.4
1,650,000 7.00% due
12/15/2004......... 240,030 239,736 3.9
387,516 386,424 6.3
TOTAL INVESTMENTS IN
DENMARK............ 387,516 386,424 6.3
GERMANY FOREIGN GOVERNMENT DM 1,500,000 Treuhandanstalt,
OBLIGATIONS 6.25% due
3/04/2004.......... 881,750 894,641 14.4
TOTAL INVESTMENTS IN
GERMANY............ 881,750 894,641 14.4
ITALY FOREIGN GOVERNMENT Lit 600,000,000 Buoni Poliennali del
OBLIGATIONS Tesoro (Italian
Government Bonds),
8.50% due
4/01/1999.......... 363,023 352,830 5.7
TOTAL INVESTMENTS IN
ITALY.............. 363,023 352,830 5.7
SPAIN FOREIGN GOVERNMENT Pta 50,000,000 Government of Spain,
OBLIGATIONS 8.30% due
12/15/1998......... 360,283 351,048 5.6
TOTAL INVESTMENTS IN
SPAIN.............. 360,283 351,048 5.6
</TABLE>
44
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.--INTERNATIONAL BOND FUND
SCHEDULE OF INVESTMENTS AS OF JUNE 30, 1994 (CONCLUDED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WESTERN
EUROPE FACE VALUE PERCENT OF NET
(CONCLUDED) AMOUNT ISSUE COST (NOTE 1A) ASSETS
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SWEDEN FOREIGN GOVERNMENT Skr 2,000,000 Government of Sweden,
OBLIGATIONS 10.25% due
5/05/2003.......... $ 262,802 $ 264,204 4.2%
TOTAL INVESTMENTS IN
SWEDEN............. 262,802 264,204 4.2
UNITED FOREIGN GOVERNMENT Pound Sterling United Kingdom Gilt:
KINGDOM OBLIGATIONS 250,000 6.00% due
8/10/1999.......... 350,670 351,749 5.7
450,000 8.00% due
6/10/2003.......... 656,011 671,133 10.8
----------- ----------- ----------
1,006,681 1,022,882 16.5
TOTAL INVESTMENTS IN
THE
UNITED KINGDOM..... 1,006,681 1,022,882 16.5
TOTAL INVESTMENTS IN
WESTERN EUROPE..... 3,405,894 3,417,722 55.0
SHORT-TERM SECURITIES
COMMERCIAL PAPER* $ 222,000 General Electric
Capital Corp.,
4.30% due
7/01/1994.......... 222,000 222,000 3.5
US GOVERNMENT AGENCY 300,000 Federal Home Loan
OBLIGATIONS* Bank, 4.22% due
7/13/1994.......... 299,578 299,578 4.8
1,100,000 Federal Home Loan
Mortgage
Association, 4.18%
due 7/14/1994...... 1,098,339 1,098,339 17.6
----------- ----------- ----------
1,397,917 1,397,917 22.4
TOTAL INVESTMENTS IN
SHORT-TERM
SECURITIES......... 1,619,917 1,619,917 25.9
TOTAL INVESTMENTS.... $ 6,317,386 6,294,650 101.2
-----------
-----------
UNREALIZED
DEPRECIATION ON
FORWARD FOREIGN
EXCHANGE
CONTRACTS**........ (25,669) (0.4)
LIABILITIES IN EXCESS
OF OTHER ASSETS.... (50,485) (0.8)
----------- ----------
NET ASSETS........... $ 6,218,496 100.0%
----------- ----------
----------- ----------
</TABLE>
<TABLE>
<S><C>
* Certain US Government & Agency Obligations and Commercial Paper are 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 June 30, 1994 are as follows:
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EXPIRATION UNREALIZED APPRECIATION
FOREIGN CURRENCY SOLD DATE (DEPRECIATION)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
A$ 859,827 July 1994 $ (4,279)
Bf 4,900,730 August 1994 (510)
C$ 542,856 July 1994 (241)
Dkr 2,583,413 July 1994 84
DM 1,474,906 August 1994 5,091
Pound Sterling 639,951 July 1994 (14,857)
Lit 586,930,480 July 1994 3,064
Pta 50,750,137 August 1994 3,586
Skr 2,093,553 July 1994 (7,055)
Yen 18,243,574 July 1994 (10,552)
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
TOTAL UNREALIZED DEPRECIATION ON FORWARD
FOREIGN EXCHANGE CONTRACTS (US$
COMMITMENT--$4,686,837) $ (25,669)
--------
--------
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
45
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.--INTERNATIONAL EQUITY FOCUS FUND
SCHEDULE OF INVESTMENTS AS OF JUNE 30, 1994 (IN US DOLLARS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES HELD/ VALUE PERCENT OF NET
AFRICA INDUSTRY FACE AMOUNT STOCKS, BONDS, WARRANTS & RIGHTS COST (NOTE 1A) ASSETS
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SOUTH AFRICA MINING 40,000 De Beers Consolidated Mines
Ltd. (ADR) (a)............... $ 949,484 $ 890,000 0.5%
TOTAL INVESTMENTS IN
SOUTH AFRICAN STOCKS......... 949,484 890,000 0.5
TOTAL INVESTMENTS IN
AFRICA....................... 949,484 890,000 0.5
LATIN AMERICA
ARGENTINA UTILITIES 36,000 + Transportadora de Gas Del Sur
(TGS)........................ 495,169 427,500 0.2
TOTAL INVESTMENTS IN
ARGENTINEAN STOCKS........... 495,169 427,500 0.2
BRAZIL TELECOMMUNICATIONS 47,250 + Telecomunicacooes Brasileiras
S.A.--Telebras PN Preferred
(ADR) (a).................... 1,877,606 1,801,406 1.0
UTILITIES--ELECTRIC 50,000 Companhia Energetica de Minas
Gerais S.A. (CEMIG) (ADR)
(a).......................... 1,181,250 868,750 0.5
UTILITIES--GAS 31,000 Companhia Generale des Eaux.... 507,166 538,625 0.3
TOTAL INVESTMENTS IN
BRAZILIAN STOCKS............. 3,566,022 3,208,781 1.8
CHILE TELECOMMUNICATIONS 7,900 Compana de Telefonos de Chile
S.A. (ADR) (a)............... 950,388 675,450 0.4
TOTAL INVESTMENTS IN
CHILEAN STOCKS............... 950,388 675,450 0.4
MEXICO BEVERAGES 20,000 Panamerican Beverages, Inc.
(ADR) (a).................... 635,000 482,500 0.3
BUILDING & 25,312 Cementos Mexicanos, S.A. de
CONSTRUCTION C.V. (Cemex) (Class B) (ADR)
(a).......................... 403,346 338,548 0.2
185,625 Cementos Mexicanos, S.A. de
C.V. (Cemex) (Series B)...... 1,576,535 1,229,286 0.7
72,971 Grupo Tribasa, S.A. de C.V..... 1,959,556 1,614,483 0.9
----------- ----------- ----------
3,939,437 3,182,317 1.8
DIVERSIFIED 53,000 + Grupo Carso, S.A. de C.V.
(ADR) (a).................... 1,000,155 927,500 0.5
178,000 Grupo Carso, S.A. de C.V.
(Series A)................... 1,832,474 1,611,976 0.9
----------- ----------- ----------
2,832,629 2,539,476 1.4
FINANCIAL SERVICES 21,000 + Servicios Financieros Quadrum,
S.A. de C.V. (ADR) (a)....... 480,375 322,875 0.2
RETAIL 62,500 Grupo Empresarial Fenix, S.A.
de C.V. Elektra 'L' Shares... 511,892 574,299 0.3
TELECOMMUNICATIONS 44,300 Telefonos de Mexico, S.A. de
C.V. (Telmex) (ADR) (a)...... 2,662,333 2,475,262 1.3
TOTAL INVESTMENTS IN
MEXICAN STOCKS............... 11,061,666 9,576,729 5.3
TOTAL INVESTMENTS IN
LATIN AMERICA................ 16,073,245 13,888,460 7.7
</TABLE>
46
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.--INTERNATIONAL EQUITY FOCUS FUND
SCHEDULE OF INVESTMENTS AS OF JUNE 30, 1994 (CONTINUED) (IN US DOLLARS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NORTH VALUE PERCENT OF NET
AMERICA INDUSTRY FACE AMOUNT STOCKS, BONDS, WARRANTS & RIGHTS COST (NOTE 1A) ASSETS
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CANADA FOREIGN GOVERNMENT Canadian Government Bonds:
OBLIGATIONS $1,400,000 6.50% due 8/01/1996............. $ 1,098,976 $ 974,327 0.5%
2,650,000 5.75% due 3/01/1999............. 1,918,555 1,696,038 0.9
----------- ----------- ----------
3,017,531 2,670,365 1.4
TOTAL INVESTMENTS IN
NORTH AMERICA................. 3,017,531 2,670,365 1.4
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PACIFIC
BASIN SHARES HELD
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
AUSTRALIA FOOD & BEVERAGE 118,565 Coca-Cola Amatil, Ltd.
(Ordinary).................... 631,376 718,681 0.4
206,400 Goodman Fielder Wattie, Ltd..... 237,138 194,447 0.1
----------- ----------- ----------
868,514 913,128 0.5
FOOD & HOUSEHOLD 277,000 Burns Philp & Co., Ltd.
PRODUCTS (Ordinary).................... 847,886 708,026 0.4
HOLDING COMPANY 238,000 BTR NYLEX....................... 572,168 500,577 0.3
MEDIA 103,145 The News Corp., Ltd. (ADR)
(a)........................... 728,701 629,732 0.3
NATURAL GAS PIPELINES 55,796 Broken Hill Proprietary Co...... 743,490 732,646 0.4
PROPERTY/REAL ESTATE 72,766 Lend Lease Corp................. 892,264 866,081 0.5
TOTAL INVESTMENTS IN
AUSTRALIAN STOCKS............. 4,653,023 4,350,190 2.4
HONG KONG BANKING 699,000 Winton Holdings Ltd............. 263,061 217,053 0.1
FOODS 627,000 C.P. Pokphand Co., Ltd.
(Ordinary).................... 239,103 170,358 0.1
PROPERTY 343,000 Hang Lung Development Co., Ltd.
(Ordinary).................... 585,187 532,540 0.3
TELECOMMUNICATIONS 353,000 Hong Kong Telecommunications
Ltd. (Ordinary)............... 598,211 666,813 0.4
UTILITIES 282,000 The Hong Kong & China Gas Co.
(Ordinary).................... 529,795 539,992 0.3
23,500 The Hong Kong & China Gas Co.
(Warrants) (b)................ 0 10,338 0.0
----------- ----------- ----------
529,795 550,330 0.3
UTILITIES--ELECTRIC 203,800 China Light & Power Co., Ltd.
(Ordinary).................... 1,017,708 1,041,545 0.6
TOTAL INVESTMENTS IN
HONG KONG STOCKS
& WARRANTS.................... 3,233,065 3,178,639 1.8
JAPAN AUTOMOBILES 208,000 Suzuki Motor Co. (Ordinary)..... 2,318,863 2,764,891 1.5
112,000 Toyota Motor Corp............... 2,126,395 2,511,618 1.3
----------- ----------- ----------
4,445,258 5,276,509 2.8
BEVERAGES 16,000 Chukyo Coca-Cola Bottling Co.,
Ltd. (Ordinary)............... 226,551 224,049 0.1
15,000 Hokkaido Coca-Cola Bottling Co.,
Ltd. (Ordinary)............... 249,702 240,487 0.1
17,000 Kinki Coca-Cola Bottling Co.,
Ltd. (Ordinary)............... 312,980 345,003 0.2
19,000 Mikuni Coca-Cola Bottling Co.,
Ltd........................... 340,923 316,185 0.2
16,000 Sanyo Coca-Cola Bottling Co.,
Ltd........................... 267,996 256,519 0.1
----------- ----------- ----------
1,398,152 1,382,243 0.7
</TABLE>
47
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.--INTERNATIONAL EQUITY FOCUS FUND
SCHEDULE OF INVESTMENTS AS OF JUNE 30, 1994 (CONTINUED) (IN US DOLLARS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PACIFIC SHARES
BASIN HELD/ VALUE PERCENT OF NET
(CONTINUED) INDUSTRY FACE AMOUNT STOCKS, BONDS, WARRANTS & RIGHTS COST (NOTE 1A) ASSETS
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
JAPAN CAPITAL GOODS 431,000 Mitsubishi Heavy Industries,
(CONTINUED) Ltd........................... $ 2,836,662 $ 3,450,624 1.9%
CHEMICALS 14,000 Shimachu Co. (Ordinary)......... 586,177 563,978 0.3
94,000 Shin-Etsu Chemical Co., Ltd.
(Ordinary).................... 1,984,503 2,012,583 1.1
----------- ----------- ----------
2,570,680 2,576,561 1.4
CONGLOMERATES 321,000 Hitachi Ltd..................... 3,105,856 3,354,947 1.8
CONSTRUCTION/ 63,000 Sanki Engineering Co., Ltd...... 888,004 856,621 0.5
HOUSING
CONSUMER-- 202,000 Matsushita Electric Industrial
ELECTRONICS Co., Ltd...................... 3,148,976 3,709,995 2.0
49,000 Rohm Co. 1,768,017 2,277,220 1.2
----------- ----------- ----------
4,916,993 5,987,215 3.2
DIVERSIFIED 41,700 Sony Corp....................... 2,365,010 2,559,970 1.4
ELECTRICAL 32,000 Chudenko Corp. (Ordinary)....... 1,228,822 1,328,057 0.7
CONSTRUCTION
ELECTRICAL EQUIPMENT 205,000 Sumitomo Electric Industries,
Ltd........................... 2,902,778 3,141,045 1.7
74,000 The Nippon Signal Co., Ltd...... 1,013,087 961,136 0.5
----------- ----------- ----------
3,915,865 4,102,181 2.2
ELECTRONICS 64,000 Murata Manufacturing Co.,
Ltd........................... 2,488,448 3,013,293 1.6
ENGINEERING & 44,000 Taihei Dengyo Kaisha, Ltd....... 1,174,357 1,285,845 0.7
CONSTRUCTION
INSURANCE 230,000 Dai-Tokyo Fire & Marine
Insurance Co., Ltd............ 1,715,601 1,804,059 1.0
70,000 Fuji Fire & Marine Insurance
Co.,
Ltd........................... 477,842 500,761 0.3
192,000 Koa Fire & Marine Insurance Co.,
Ltd........................... 1,320,978 1,422,222 0.8
149,000 Mitsui Marine & Fire Insurance
Co., Ltd...................... 1,217,441 1,253,384 0.7
202,000 Nichido Fire & Marine Insurance
Co., Ltd...................... 1,521,322 1,820,152 1.0
117,000 Nippon Fire & Marine Insurance
Co., Ltd...................... 858,344 882,101 0.5
245,000 Sumitomo Marine & Fire Insurance
Co., Ltd...................... 2,084,181 2,394,064 1.3
190,000 Tokio Marine & Fire Insurance
Company, Ltd. (Ordinary)...... 2,328,081 2,448,503 1.3
201,000 Yasuda Fire & Marine Insurance
Co., Ltd...................... 1,505,908 1,652,055 0.9
----------- ----------- ----------
13,029,698 14,177,301 7.8
OFFICE EQUIPMENT 249,000 Canon, Inc. (Ordinary).......... 3,863,381 4,371,081 2.3
PACKAGING 90,000 Toyo Seikan Kaisha, Ltd.
(Ordinary).................... 2,629,426 2,922,374 1.6
PHARMACEUTICAL-- 122,000 Sankyo Co., Ltd. (Ordinary)..... 2,950,570 2,723,491 1.5
PRESCRIPTION
PHARMACEUTICALS 124,000 Taisho Pharmaceutical Co., Ltd.
(Ordinary).................... 2,478,234 2,478,742 1.3
PHOTOGRAPHY 170,000 Fuji Photo Film Co., Ltd........ 3,856,518 3,795,028 2.0
RETAIL SALES 81,000 Ito Yokado Co., Ltd.
(Ordinary).................... $ 4,151,783 $ 4,479,452 2.4%
</TABLE>
48
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.--INTERNATIONAL EQUITY FOCUS FUND
SCHEDULE OF INVESTMENTS AS OF JUNE 30, 1994 (CONTINUED) (IN US DOLLARS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PACIFIC
BASIN SHARES HELD/ VALUE PERCENT OF NET
(CONCLUDED) INDUSTRY FACE AMOUNT STOCKS, BONDS, WARRANTS & RIGHTS COST (NOTE 1A) ASSETS
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
JAPAN RETAIL STORES 30,000 Sangetsu Co., Ltd............. 1,120,547 1,062,405 0.6
(CONCLUDED)
STEEL 48,000 Maruichi Steel Tube, Ltd.
(Ordinary).................. 840,875 876,712 0.5
TRANSPORTATION 117,000 Nippon Express Co., Ltd....... 1,192,863 1,246,575 0.7
TOTAL INVESTMENTS IN
JAPANESE STOCKS............. 67,448,002 73,307,227 39.6
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
MALAYSIA LEISURE 15,000 Genting BHD................... 138,632 178,626 0.1
TOTAL INVESTMENTS IN
MALAYSIAN STOCKS............ 138,632 178,626 0.1
NEW ZEALAND PAPER & FOREST 500,000 Carter Holt Harvey, Ltd....... 1,110,768 1,112,276 0.6
PRODUCTS
TELECOMMUNICATIONS 25,000 Telecommunications Corp. of
New Zealand Ltd. (ADR)
(a)......................... 1,117,263 1,062,500 0.6
TOTAL INVESTMENTS IN
NEW ZEALAND STOCKS.......... 2,228,031 2,174,776 1.2
TOTAL INVESTMENTS IN THE
PACIFIC BASIN............... 77,700,753 83,189,458 45.1
SOUTHEAST
ASIA
INDIA INSURANCE 76,000 Videocon International Ltd.
(ADR) (a)................... 810,622 560,880 0.3
TOTAL INVESTMENTS IN
INDIAN STOCKS............... 810,622 560,880 0.3
TOTAL INVESTMENTS IN
SOUTHEAST ASIA.............. 810,622 560,880 0.3
EUROPE
AUSTRIA UTILITIES 5,245 Verbund Oesterreichische
Elekrizitats AG............. 287,697 299,915 0.2
TOTAL INVESTMENTS IN
AUSTRIAN STOCKS............. 287,697 299,915 0.2
BELGIUM BANKING 2,500 Generale de Banque S.A.
(Ordinary).................. 616,055 627,673 0.3
BUILDING MATERIALS-- 400 Glaverbel (Ordinary).......... 53,471 54,856 0.0
GLASS 270 Glaverbel (Ordinary) (New
Shares)..................... 35,717 37,028 0.0
----------- ----------- ----------
89,188 91,884 0.0
CHEMICALS 500 Solvay Group (Ordinary)....... 193,771 216,096 0.1
TOTAL INVESTMENTS IN
BELGIAN STOCKS.............. 899,014 935,653 0.4
FINLAND BANKING 206,000 Kansallis-Osake-Pankki........ 498,987 428,113 0.2
330,000 Unitas A (Ordinary)........... 908,262 791,800 0.4
----------- ----------- ----------
1,407,249 1,219,913 0.6
COMMODITY LINKED NOTES US$ 5,000,000 Finnish Export Credit, 0% due
3/10/1997 (c)............... 5,000,000 5,116,000 2.7
DIVERSIFIED 27,500 Outokumpu OY.................. 402,133 447,856 0.2
</TABLE>
49
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.--INTERNATIONAL EQUITY FOCUS FUND
SCHEDULE OF INVESTMENTS AS OF JUNE 30, 1994 (CONTINUED) (IN US DOLLARS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES
EUROPE HELD/ VALUE PERCENT OF NET
(CONTINUED) INDUSTRY FACE AMOUNT STOCKS, BONDS, WARRANTS & RIGHTS COST (NOTE 1A) ASSETS
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
FINLAND PAPER & FOREST 50,500 Enso-Gutzeit OY (Registered).... $ 352,542 $ 381,636 0.2%
(CONCLUDED) PRODUCTS 12,650 Metsa Serla OY.................. 509,723 487,550 0.3
22,875 Repola OY S..................... 368,159 395,440 0.2
----------- ----------- ----------
1,230,424 1,264,626 0.7
TOTAL INVESTMENTS IN
FINNISH STOCKS & BONDS........ 8,039,806 8,048,395 4.2
FRANCE AUTOMOBILES 6,840 Peugeot S.A..................... 936,092 968,398 0.5
BANKING 8,051 Compagnie Financiere de
Paribas....................... 612,354 509,684 0.3
9,143 Compagnie Financiere de Suez.... 513,609 443,501 0.2
2,500 Societe Generale de Surveillance
S.A. (Class A) (Ordinary)..... 272,615 256,290 0.1
----------- ----------- ----------
1,398,578 1,209,475 0.6
CHEMICALS 19,410 Rhone-Poulenc S.A............... 489,542 441,395 0.2
INSURANCE 6,270 Societe Centrale du Groupe des
Assurances Nationales S.A..... 548,917 450,748 0.2
OFFICE EQUIPMENT 4,700 Alcatel Alsthom................. 507,737 509,408 0.3
RETAIL 3,360 LVMH (Ordinary)................. 511,340 515,757 0.3
UTILITIES 1,496 Compagnie Generale des Eaux..... 684,057 602,208 0.3
TOTAL INVESTMENTS IN
FRENCH STOCKS................. 5,076,263 4,697,389 2.4
GERMANY AUTOMOBILE PARTS 2,200 Continental AG.................. 337,131 339,313 0.2
3,300 Continental AG (Warrants) (b)... 187,921 155,680 0.1
----------- ----------- ----------
525,052 494,993 0.3
AUTOMOBILES 1,629 Daimler-Benz AG................. 762,500 742,877 0.4
650 Volkswagen AG (Ordinary)........ 175,057 192,367 0.1
3,500 Volkswagen AG (Preferred)....... 788,556 807,963 0.4
2,659 Volkswagen AG (Preferred)
(Warrants) (b)................ 239,121 288,513 0.2
----------- ----------- ----------
1,965,234 2,031,720 1.1
BANKING 2,737 Deutsche Bank AG (Ordinary)..... 1,288,924 1,177,575 0.6
CHEMICALS 4,089 BASF AG (Ordinary).............. 706,138 776,751 0.4
4,597 Bayer AG (Ordinary)............. 916,363 996,142 0.5
----------- ----------- ----------
1,622,501 1,772,893 0.9
INSURANCE 600 Allianz AG Holding (Warrants)
(b)........................... 23,070 25,852 0.0
340 Munich Reinsurance Co.
(Ordinary).................... 599,135 612,719 0.3
----------- ----------- ----------
622,205 638,571 0.3
MACHINERY 8,750 Kloeckner Werke AG.............. 479,372 798,056 0.4
METALS & MINING 6,178 Thyssen AG (Ordinary)........... 907,214 1,116,454 0.6
UTILITIES 6,500 Veba Vereinigte Elektrizitaets &
Bergwerks AG (Ordinary)....... 279,834 261,259 0.1
TOTAL INVESTMENTS IN
GERMAN STOCKS
& WARRANTS.................... 7,690,336 8,291,521 4.3
</TABLE>
50
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.--INTERNATIONAL EQUITY FOCUS FUND
SCHEDULE OF INVESTMENTS AS OF JUNE 30, 1994 (CONTINUED) (IN US DOLLARS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES
EUROPE HELD/ VALUE PERCENT OF NET
(CONTINUED) INDUSTRY FACE AMOUNT STOCKS, BONDS, WARRANTS & RIGHTS COST (NOTE 1A) ASSETS
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
HUNGARY FOODS 1,400 Pick Szeged Reszvenytarsasag
(ADR) (a)..................... $ 97,790 $ 83,174 0.0%
TOTAL INVESTMENTS IN
HUNGARIAN STOCKS.............. 97,790 83,174 0.0
IRELAND BANKING & FINANCIAL 640,000 Anglo Irish Bank Corp........... 507,043 476,923 0.3
BUILDING & 70,000 CRH PLC (Ordinary).............. 335,762 345,982 0.2
CONSTRUCTION
FOREST PRODUCTS 254,500 Jefferson Smurfit Group PLC
(Ordinary).................... 1,241,213 1,315,948 0.7
MISCELLANEOUS 480,000 First Ireland Investment Co..... 727,917 666,792 0.4
TOTAL INVESTMENTS IN
IRISH STOCKS.................. 2,811,935 2,805,645 1.6
ITALY DIVERSIFIED 335,500 CIR NC Savings.................. 157,313 307,769 0.2
157,700 Compagnie Industrial Riunite
S.p.A. (CIR).................. 135,978 249,922 0.1
----------- ----------- ----------
293,291 557,691 0.3
INSURANCE 19,300 Assicurazioni Generali
(Ordinary).................... 507,138 495,122 0.3
TELECOMMUNICATIONS 260,816 Stet Savings Telecom............ 614,755 688,898 0.4
TOTAL INVESTMENTS IN
ITALIAN STOCKS................ 1,415,184 1,741,711 1.0
NETHERLANDS BANKING 23,023 ABN Amro Bank (Ordinary)........ 801,026 760,803 0.4
BEVERAGES 496 Heineken Holdings N.V.
(Class A)..................... 39,308 53,012 0.0
1,530 Heineken N.V.................... 160,673 184,984 0.1
----------- ----------- ----------
199,981 237,996 0.1
CHEMICALS 5,985 Akzo N.V. (Ordinary)............ 592,888 641,346 0.3
ELECTRICAL EQUIPMENT 76,350 Philips Industries Inc.......... 1,988,360 2,201,745 1.2
INSURANCE 14,343 AEGON N.V. (Ordinary)........... 731,211 734,693 0.4
18,220 Amev N.V. (Ordinary)............ 745,393 718,619 0.4
18,821 Internationale Nederlanden Groep
N.V........................... 778,308 806,735 0.4
----------- ----------- ----------
2,254,912 2,260,047 1.2
PAPER & FOREST 19,955 Koninklijke KNP................. 405,505 481,410 0.3
PRODUCTS 5,391 Koninklijke KNP (Preferred)..... 21,900 23,047 0.0
----------- ----------- ----------
427,405 504,457 0.3
TRANSPORTATION 53,670 KLM Royal Dutch Airlines........ 1,283,390 1,496,521 0.8
TOTAL INVESTMENTS IN
DUTCH STOCKS.................. 7,547,962 8,102,915 4.3
NORWAY OIL & GAS PRODUCERS 13,100 Saga Petroleum (Class A)........ 154,863 149,297 0.1
34,700 Saga Petroleum (Class B)........ 396,658 402,976 0.2
----------- ----------- ----------
551,521 552,273 0.3
TOTAL INVESTMENTS IN
NORWEGIAN STOCKS.............. 551,521 552,273 0.3
</TABLE>
51
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.--INTERNATIONAL EQUITY FOCUS FUND
SCHEDULE OF INVESTMENTS AS OF JUNE 30, 1994 (CONTINUED) (IN US DOLLARS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES
EUROPE HELD/ VALUE PERCENT OF NET
(CONTINUED) INDUSTRY FACE AMOUNT STOCKS, BONDS, WARRANTS & RIGHTS COST (NOTE 1A) ASSETS
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PORTUGAL BANKING 80,400 Banco Comercial Portugues....... $ 1,256,303 $ 974,850 0.5%
FOOD--RETAIL 3,900 Estabelecimentes Jeronimo
Martins & Filho............... 308,013 252,131 0.1
TOTAL INVESTMENTS IN
PORTUGUESE STOCKS............. 1,564,316 1,226,981 0.6
SPAIN BANKING 4,415 Banco Popular Espanol
(Ordinary).................... 503,185 481,361 0.3
OIL--RELATED 23,260 Repsol S.A...................... 691,968 669,888 0.4
REAL ESTATE 307 Vallehermoso Inmobiliaria S.A.
(New)......................... 3,760 5,602 0.0
TELECOMMUNICATIONS 92,210 Telefonica Nacional de Espana
S.A. (Ordinary)............... 1,182,280 1,243,518 0.7
TOTAL INVESTMENTS IN
SPANISH STOCKS................ 2,381,193 2,400,369 1.4
SWEDEN BANKING 37,700 Svenska Handelsbanken, Inc.
(Class A)..................... 503,167 505,882 0.3
BUILDING RELATED 20,800 Svedala Industry................ 418,177 406,467 0.2
ENGINEERING 33,150 SKF AB.......................... 615,623 578,707 0.3
15,300 SKF AB 'B' Free................. 297,054 269,089 0.1
----------- ----------- ----------
912,677 847,796 0.4
METAL & MINING 35,540 Trelleborg AB (Class B)......... 308,427 476,898 0.3
PHARMACEUTICAL-- 20,050 Astra 'B' Fria.................. 401,920 404,871 0.2
PRESCRIPTION
TOTAL INVESTMENTS IN
SWEDISH STOCKS................ 2,544,368 2,641,914 1.4
SWITZERLAND BANKING 3,434 SBV Schweitz Bankverein......... 1,038,965 1,011,208 0.5
CHEMICALS 1,224 Ciba-Geigy AG (Registered)...... 662,767 721,776 0.4
ELECTRICAL EQUIPMENT 1,623 BBC Brown Boveri & Cie.......... 1,086,724 1,424,067 0.8
HEALTH/PERSONAL CARE 1,385 Sandoz AG (Registered).......... 640,518 718,378 0.4
INSURANCE 425 Baloise Holding Insurance....... 791,644 760,744 0.4
425 Baloise Holding Insurance
(Warrants) (b)................ 0 4,606 0.0
----------- ----------- ----------
791,644 765,350 0.4
TOTAL INVESTMENTS IN
SWISS STOCKS
& WARRANTS.................... 4,220,618 4,640,779 2.5
TURKEY AUTOMOBILES 26,600 Turk Otomobil Fabrikasi A.S..... 426,100 186,200 0.1
TOTAL INVESTMENTS IN
TURKISH STOCKS................ 426,100 186,200 0.1
UNITED KINGDOM AEROSPACE 316,500 Rolls Royce PLC (Ordinary)...... 782,759 845,136 0.5
BANKING 81,700 National Westminster Bank PLC
(Ordinary).................... 651,590 547,922 0.3
BEVERAGE 154,100 Grand Metropolitan PLC
(Ordinary).................... 1,025,810 964,495 0.5
</TABLE>
52
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.--INTERNATIONAL EQUITY FOCUS FUND
SCHEDULE OF INVESTMENTS AS OF JUNE 30, 1994 (CONTINUED) (IN US DOLLARS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES
EUROPE HELD/ VALUE PERCENT OF NET
(CONCLUDED) INDUSTRY FACE AMOUNT STOCKS, BONDS, WARRANTS & RIGHTS COST (NOTE 1A) ASSETS
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
UNITED
KINGDOM BUILDING MATERIALS 110,000 Blue Circle Industries PLC
(Ordinary).................... $ 507,645 $ 481,340 0.3%
257,100 Tarmac PLC (Ordinary)........... 683,502 583,346 0.3
(CONCLUDED) ----------- ----------- ----------
1,191,147 1,064,686 0.6
CHEMICALS 45,000 Imperial Chemical Industries PLC
(ADR) (a)..................... 539,447 537,601 0.3
CONGLOMERATES 130,100 Hanson PLC (Ordinary)........... 540,070 482,947 0.3
CONSUMER--GOODS 82,600 Vendome Luxury Group (Units).... 485,376 558,420 0.3
ELECTRICAL EQUIPMENT 149,200 General Electric Co., Ltd. PLC
(Ordinary).................... 719,200 649,418 0.4
FOOD & BEVERAGE 155,200 Tate & Lyle PLC (Ordinary)...... 940,121 982,160 0.5
FOOD MANUFACTURING 40,400 Unilever Capital Corp........... 608,452 599,878 0.3
INDUSTRIAL--OTHER 196,500 Tomkins PLC..................... 677,092 646,024 0.3
INSURANCE 45,000 Commercial Union Assurance Co.
PLC (Ordinary)................ 437,080 351,108 0.2
54,600 Granada Group PLC............... 448,465 419,269 0.2
LEISURE &
ENTERTAINMENT
156,600 The Rank Organisation PLC
(Ordinary).................... 947,711 893,126 0.5
54,300 Thorn EMI (Ordinary)............ 851,287 840,635 0.5
----------- ----------- ----------
2,247,463 2,153,030 1.2
MEDIA/PUBLISHING 112,800 Reuters Holdings PLC............ 815,008 746,048 0.4
OIL--RELATED 132,000 British Petroleum Co., Ltd...... 754,263 795,612 0.4
PHARMACEUTICALS 193,400 SmithKline Beecham 'A'.......... 1,188,310 1,211,962 0.7
RETAIL 102,300 Tesco PLC (Ordinary)............ 345,317 352,907 0.2
RETAIL TRADE 60,500 Boots Co. PLC (Ordinary)........ 501,290 494,923 0.3
326,300 Sears PLC....................... 581,147 574,154 0.3
----------- ----------- ----------
1,082,437 1,069,077 0.6
TELECOMMUNICATIONS 101,200 Cable & Wireless Public Co. Ltd.
(Ordinary).................... 714,249 630,276 0.3
UTILITIES--ELECTRIC 114,000 Scottish Power PLC (Ordinary)... 590,055 631,693 0.3
TOTAL INVESTMENTS IN
UNITED KINGDOM STOCKS......... 16,335,246 15,820,400 8.6
TOTAL INVESTMENTS IN
EUROPE........................ 61,889,349 62,475,234 33.3
</TABLE>
53
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.--INTERNATIONAL EQUITY FOCUS FUND
SCHEDULE OF INVESTMENTS AS OF JUNE 30, 1994 (CONTINUED) (IN US DOLLARS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE VALUE PERCENT OF
AMOUNT SHORT-TERM SECURITIES COST (NOTE 1A) NET ASSETS
<S> <C> <C> <C> <C> <C> <C> <C> <C>
COMMERCIAL PAPER* $ 526,000 General Electric Capital Co.,
4.30% due 7/01/1994........... $ 525,937 $ 525,937 0.2%
TOTAL INVESTMENTS IN
COMMERCIAL PAPER.............. 525,937 525,937 0.2
US GOVERNMENT & AGENCY 6,000,000 Federal Home Loan Bank, 4.17%
OBLIGATIONS due 7/05/1994................. 5,996,525 5,996,525 3.2
Federal Home Loan Mortgage
Association:
4,000,000 4.16% due 7/01/1994............. 3,999,538 3,999,538 2.1
5,000,000 4.18% due 7/14/1994............. 4,991,872 4,991,872 2.6
1,000,000 Federal National Mortgage
Association, 4.18% due
7/15/1994..................... 998,258 998,258 0.5
US Treasury Bill:
80,000 3.105% due 7/07/1994............ 79,952 79,948 0.0
165,000 4.00% due 9/15/1994............. 163,588 163,588 0.0
640,000 4.055% due 9/15/1994............ 634,449 634,374 0.3
50,000 4.08% due 9/15/1994............. 49,564 49,561 0.0
430,000 4.11% due 9/15/1994............. 426,220 426,220 0.2
TOTAL INVESTMENTS IN US
GOVERNMENT & AGENCY
OBLIGATIONS................... 17,339,966 17,339,884 8.9
TOTAL INVESTMENTS IN
SHORT-TERM SECURITIES......... 17,865,903 17,865,821 9.1
<CAPTION>
PREMIUMS
PAID
OPTIONS CONTRACTS/
PURCHASED FACE AMOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CALL OPTIONS PURCHASED 31,715 Topix Second Section, expiring
October 1994 at Yen 2270...... 45,402 88,342 0.0
35,905 Topix Second Section, expiring
May 1995 at Yen 2330.......... 80,000 109,912 0.0
----------- ----------- ----------
125,402 198,254 0.0
CURRENCY PUT 370,000 French Franc, expiring September
OPTIONS PURCHASED 1994 at Frf 5.65.............. 4,607 2,367 0.0
2,220,000 Deutschemark, expiring September
1994 at DM 1.65............... 33,189 17,205 0.0
2,640,000 Netherlands Guilder, expiring
September 1994 at Nlg 1.85.... 38,940 19,932 0.0
3,290,000 Swiss Franc, expiring September
1994 at Chf 1.38.............. 49,679 23,359 0.0
6,000,000 Japanese Yen, expiring September
1994 at Yen 105............... 138,600 23,400 0.0
10,000,000 Japanese Yen, expiring September
1994 at Yen 107............... 224,000 16,000 0.0
1,500,000 Japanese Yen, expiring June 1995
at Yen 100.................... 45,300 42,975 0.0
----------- ----------- ----------
534,315 145,238 0.0
TOTAL OPTIONS PURCHASED......... 659,717 343,492 0.0
TOTAL INVESTMENTS............... 178,966,604 181,883,710 97.4
</TABLE>
54
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.--INTERNATIONAL EQUITY FOCUS FUND
SCHEDULE OF INVESTMENTS AS OF JUNE 30, 1994 (CONCLUDED) (IN US DOLLARS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
OPTIONS CONTRACTS/ PREMIUMS VALUE PERCENT OF NET
WRITTEN FACE AMOUNT ISSUE RECEIVED (NOTE 1A) ASSETS
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CALL OPTIONS WRITTEN 1,043 Hang Seng Index, expiring July
1994 at HKD 12.212.......... $ (76,622) $ 0 0.0%
PUT OPTIONS WRITTEN 31,715 Topix Second Section, expiring
October 1994 at Yen 2270.... (33,502) (9,799) 0.0
CURRENCY PUT OPTIONS 1,500,000 Japanese Yen, expiring June
WRITTEN 1995 at Yen 108............. (16,500) (13,950) 0.0
TOTAL OPTIONS WRITTEN......... (126,624) (23,749) 0.0
TOTAL INVESTMENTS, NET OF OPTIONS WRITTEN............................. $178,839,980 181,859,961 97.4
------------
------------
VARIATION MARGIN ON STOCK INDEX FUTURES CONTRACTS**................... 446,875 0.2
UNREALIZED DEPRECIATION ON FORWARD FOREIGN EXCHANGE CONTRACTS***...... (2,495,310) (1.3)
OTHER ASSETS LESS LIABILITIES......................................... 6,924,734 3.7
------------ ----------
NET ASSETS............................................................ $186,736,260 100.0%
------------ ----------
------------ ----------
</TABLE>
<TABLE>
<C> <S>
(a) American Depositary Receipt (ADR).
(b) 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.
(c) The redemption value including interest, if any, is linked to the Goldman Sachs Commodity Index. This note is not
principal protected.
+ Restricted securities. The value of the Fund's investment in restricted securities was approximately $3,479,000,
representing 1.9% of net assets.
* Commercial Paper is traded on a discount basis; the interest rate shown is the discount rate paid at the time of
purchase by the Fund.
** Stock index futures contracts purchased as of June 30, 1994 were as follows:
</TABLE>
<TABLE>
<CAPTION>
NUMBER
OF EXPIRATION VALUE
CONTRACTS ISSUE EXCHANGE DATE (NOTE 1A)
- --------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
143 Nikkei 225......................................................... CME September 1994 $ 14,836,075
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<C> <S> <C> <C>
TOTAL FINANCIAL FUTURES CONTRACTS SOLD (TOTAL CONTRACT PRICE--$15,158,550)
The market value of the pledged securities is $1,353,691. $ 14,836,075
-------------
-------------
</TABLE>
- --------------------------------------------------------------------------------
***Forward foreign exchange contracts as of June 30, 1994 were as follows:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EXPIRATION UNREALIZED
FOREIGN CURRENCY SOLD DATE DEPRECIATION
- --------------------------------------------------------------------------------
<S> <C> <C>
A$ 2,682,442.......................................................................... September 1994 $ (17,834)
Bf 25,387,563......................................................................... September 1994 (57,510)
DM 3,834,116.......................................................................... September 1994 (177,874)
Fim 3,047,947......................................................................... September 1994 (23,450)
Frf 14,724,321........................................................................ September 1994 (197,998)
Nlg 4,518,640......................................................................... September 1994 (187,260)
Pta 114,263,663....................................................................... September 1994 (50,667)
Skr 4,351,064......................................................................... September 1994 (18,650)
Yen 2,130,992,500..................................................................... September 1994 (949,687)
Yen 1,636,720,000..................................................................... December 1994 (814,380)
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
TOTAL UNREALIZED DEPRECIATION ON FORWARD FOREIGN EXCHANGE CONTRACTS (US$
COMMITMENT--$46,714,957).............................................................. $ (2,495,310)
--------------
--------------
</TABLE>
See Notes to Financial Statements.
55
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.--NATURAL RESOURCES FOCUS FUND
SCHEDULE OF INVESTMENTS AS OF JUNE 30, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE PERCENT OF
INDUSTRY HELD COMMON STOCKS COST (NOTE 1A) NET ASSETS
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
ALUMINUM 15,000 Alcan Aluminium, Ltd................. $ 314,175 $ 341,250 1.3%
5,000 Aluminum Co. of America.............. 341,646 365,625 1.4
7,700 Reynolds Metals Co................... 349,628 369,600 1.4
1,005,449 1,076,475 4.1
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
CHEMICALS 68,000 Asahi Chemical Industry Co., Ltd..... 502,124 512,674 1.9
9,000 Dow Chemical Co...................... 546,005 588,375 2.2
10,700 du Pont (E.I.) de Nemours & Co....... 534,988 624,613 2.3
1,583,117 1,725,662 6.4
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
DIVERSIFIED RESOURCES 18,500 Coastal Corp......................... 493,652 499,500 1.9
COMPANIES 12,000 Cyprus Amax Minerals Co.............. 354,835 357,000 1.3
4,800 Equitable Resources, Inc............. 118,772 165,000 0.6
24,000 Freeport-McMoran Inc................. 472,088 390,000 1.5
38,500 Norcen Energy Resources Ltd.......... 600,603 386,532 1.4
2,039,950 1,798,032 6.7
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
GAS DISTRIBUTION/ 12,100 Consolidated Natural Gas Co.......... 586,109 456,775 1.7
TRANSMISSION
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
GAS PIPELINE 4,000 Sonat Inc............................ 78,255 123,000 0.5
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
GOLD 62,000 Newcrest Mining Ltd.................. 295,316 293,405 1.1
9,864 Newmont Mining Corp.................. 418,650 397,026 1.5
16,000 Placer Dome, Inc..................... 395,771 344,000 1.3
1,109,737 1,034,431 3.9
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
INTEGRATED OIL 10,500 Amoco Corp........................... 554,378 598,500 2.2
COMPANIES 8,500 Exxon Corp........................... 527,984 481,313 1.8
15,800 Imperial Oil Ltd..................... 576,846 462,150 1.7
17,900 Norsk Hydro a.s. (ADR)*.............. 471,629 561,613 2.1
17,700 Phillips Petroleum Co................ 517,938 553,125 2.1
5,200 Royal Dutch Petroleum Co. N.V. 452,859 544,050
(ADR)*............................... 2.0
12,000 Societe Nationale Elf Aquitaine Co. 427,829 399,000
(ADR)*............................... 1.5
4,000 Total S.A. (Class B)................. 226,594 230,047 0.9
21,000 YPF S.A. (ADR)*...................... 523,296 501,375 1.9
4,279,353 4,331,173 16.2
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
METAL & MINING 26,000 CRA Ltd.............................. 320,521 339,882 1.3
300 Freeport-McMoran Copper & Gold 8,101 6,675
Inc.................................. 0.0
212,000 M.I.M. Holdings Ltd.................. 460,946 445,892 1.7
28,000 Noranda Inc.......................... 544,098 478,654 1.8
7,700 Phelps Dodge Corp.................... 405,609 438,900 1.6
25,000 The RTZ Corp. PLC (Rio Tinto Zinc)... 316,684 317,575 1.2
2,055,959 2,027,578 7.6
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
OIL & GAS PRODUCERS 104,000 Ampolex Ltd.......................... 325,645 310,641 1.2
65,000 Enterprise Oil PLC................... 418,650 392,281 1.5
6,000 The Louisiana Land and Exploration 233,450 255,000
Co................................... 1.0
13,000 Oryx Energy Co....................... 216,739 195,000 0.7
6,000 Ranger Oil Ltd....................... 39,024 39,750 0.2
4,800 Vastar Resources Inc................. 134,400 141,000 0.5
1,367,908 1,333,672 5.1
</TABLE>
- --------------------------------------------------------------------------------
56
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.--NATURAL RESOURCES FOCUS FUND
SCHEDULE OF INVESTMENTS AS OF JUNE 30, 1994 (CONCLUDED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE PERCENT OF
INDUSTRY HELD COMMON STOCKS COST (NOTE 1A) NET ASSETS
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
OIL SERVICE 17,300 Dresser Industries, Inc.............. $ 384,566 $ 354,650 1.3%
18,000 IHC Caland N.V....................... 400,101 367,594 1.4
64,400 + Rowan Companies Inc.................. 602,479 563,500 2.1
8,600 Schlumberger Ltd..................... 533,099 508,475 1.9
24,000 Tidewater Inc........................ 486,658 558,000 2.1
2,406,903 2,352,219 8.8
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
PAPER & FOREST 7,000 Georgia-Pacific Corp................. 510,263 419,125 1.6
PRODUCTS 7,400 International Paper Co............... 497,368 490,250 1.8
2,600 Metsa-Serla Oy....................... 113,889 100,208 0.4
4,300 Mo Och Domsjo Aktiebolag............. 171,633 169,739 0.6
12,000 Scott Paper Co....................... 479,340 627,000 2.4
12,200 Union Camp Corp...................... 530,591 553,575 2.1
12,100 Weyerhaeuser Co...................... 476,374 484,000 1.8
2,779,458 2,843,897 10.7
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
PLANTATIONS 60,000 Kuala Lumpur Kepong Berhad........... 120,553 139,444 0.5
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
POWER GENERATION 33,100 + Destec Energy Inc.................... 562,619 331,000 1.2
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
REFINING 22,300 Total Petroleum (North America), 328,442 267,600
Ltd.................................. 1.0
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
STEEL 21,000 Allegheny Ludlum Corp................ 493,494 388,500 1.5
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
WOOD PRODUCTS 18,000 Louisiana-Pacific Corp............... 689,580 549,000 2.1
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
TOTAL COMMON STOCKS 21,486,886 20,778,458 78.0
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE AMOUNT SHORT-TERM SECURITIES
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
COMMERCIAL PAPER** $ 571,000 General Electric Capital Corp., 4.30% 570,932 570,932
due 7/01/1994........................ 2.1
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
US GOVERNMENT & US Treasury Bills:
AGENCY OBLIGATIONS** 1,000,000 3.68% due 7/28/1994.................. 997,137 997,137 3.7
1,000,000 3.82% due 8/04/1994.................. 996,286 996,286 3.7
1,500,000 4.312% due 8/25/1994................. 1,490,423 1,490,690 5.5
1,700,000 4.12% due 9/15/1994.................. 1,685,019 1,685,054 6.3
5,168,865 5,169,167 19.2
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
TOTAL SHORT-TERM SECURITIES 5,739,797 5,740,099 21.3
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
TOTAL INVESTMENTS $ 27,226,683 26,518,557 99.3
------------
------------
OTHER ASSETS LESS LIABILITIES 193,924 0.7
NET ASSETS $ 26,712,481 100.0%
------------ ----------
------------ ----------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S><C>
* American Depositary Receipt (ADR).
** Commercial Paper and certain US Governement & Agency Obligations are traded on discount basis; the interest rates shown are
the discount rates paid at the time of purchase by the Fund.
+ Non-income producing security.
</TABLE>
See Notes to Financial Statements.
57
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.--PRIME BOND FUND
SCHEDULE OF INVESTMENTS AS OF JUNE 30, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
S&P MOODY'S FACE VALUE
INDUSTRY RATINGS RATINGS AMOUNT ISSUE COST (NOTE 1A)
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CORPORATE BOND & NOTES
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
BANKS & THRIFTS--9.6% A- A3 $ 8,000,000 Boatmen's Bancshares, Inc., 4.34%
due 6/14/1995................... $ 8,000,000 $ 8,000,000
A A2 7,000,000 Comerica Bank, Inc., 4.61% due
5/26/1997....................... 6,994,064 6,968,360
A- A3 3,000,000 First Interstate Bancorp, 11.00%
due 3/05/1998................... 3,605,145 3,350,460
A- A3 5,000,000 First Union Corp., 8.125% due
6/24/2002....................... 5,541,690 5,004,750
Golden West Financial Corp.:
A- A3 2,000,000 9.15% due 5/23/1998............... 2,271,480 2,127,200
A- A3 2,000,000 8.375% due 4/15/2002.............. 2,014,380 2,036,340
A- A3 1,000,000 Huntington National Bank, 7.625%
due 1/15/2003................... 1,066,660 974,690
A- A3 3,000,000 U.S. Bancorp., 8.125% due
5/15/2002....................... 3,343,260 3,017,880
AA Aa3 5,000,000 Wachovia Bank, 6.55% due
6/09/1997....................... 4,996,350 4,968,900
------------- ------------
37,833,029 36,448,580
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
FINANCIAL SERVICES--
CAPTIVE--2.5% Chrysler Finance Corp.:
BBB+ A3 2,500,000 9.50% due 12/15/1999.............. 2,747,175 2,694,725
BBB+ A3 4,500,000 10.95% due 8/01/2017.............. 5,177,880 5,126,355
A A2 2,115,000 Ford Motor Credit Corp., 7.75% due
11/15/2002...................... 2,161,943 2,086,405
------------- ------------
10,086,998 9,907,485
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
FINANCIAL SERVICES-- A+ A1 2,000,000 American General Finance Corp.,
CONSUMER--6.3% 8.50% due 8/15/1998............. 2,278,920 2,077,300
Associates Corp. of North America:
AA- A1 1,500,000 8.80% due 8/01/1998............... 1,690,365 1,570,455
AA- A1 1,000,000 7.50% due 5/15/1999............... 1,097,300 999,720
CIT Group Holdings, Inc.:
A+ A1 5,000,000 4.80% due 8/31/1995............... 5,000,000 5,000,000
A+ A1 7,000,000 4.85% due 9/15/1995............... 7,008,750 7,004,410
Commercial Credit Co.:
A+ A1 3,250,000 10.00% due 5/01/1999.............. 3,626,350 3,515,818
A+ A1 3,000,000 6.70% due 8/01/1999............... 3,022,580 2,886,390
A+ A2 1,000,000 Transamerica Financial Corp.,
6.80% due 3/15/1999............. 999,730 971,330
------------- ------------
24,723,995 24,025,423
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
FINANCIAL SERVICES--
OTHER--9.6% Dean Witter, Discover & Co.:
A A2 5,000,000 6.50% due 11/01/2005.............. 4,942,250 4,392,650
A A2 4,750,000 6.75% due 10/15/2013.............. 4,691,575 3,898,848
A+ A2 2,000,000 Dillard Investment Co., 9.25% due
2/01/2001....................... 2,354,230 2,170,740
General Electric Capital Corp.:
AAA Aaa 10,000,000 4.51% due 5/09/1996............... 10,000,000 10,000,000
AAA Aaa 2,000,000 8.70% due 2/15/2003............... 2,422,100 2,115,500
Morgan Stanley Group, Inc.:
A+ A1 4,000,000 9.25% due 3/01/1998............... 4,606,111 4,255,920
A+ A1 3,000,000 8.875% due 10/15/2001............. 3,454,480 3,137,190
PaineWebber Group, Inc.:
BBB+ A3 1,000,000 6.25% due 6/15/1998............... 1,026,020 948,150
BBB+ A3 4,000,000 9.25% due 12/15/2001.............. 4,670,870 4,182,040
A+ A3 1,900,000 Torchmark Corp., 9.625% due
5/01/1998....................... 2,114,568 2,024,982
------------- ------------
40,282,204 37,126,020
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
FOREIGN*--7.0% CRA Finance Ltd. (1):
A+ A2 3,000,000 6.50% due 12/01/2003.............. 3,001,380 2,689,800
A+ A2 3,000,000 7.125% due 12/01/2013............. 2,982,600 2,609,010
AAA Aaa 2,000,000 Export-Import Bank of Japan, 8.35%
due 12/01/1999 (3).............. 2,113,320 2,090,400
A+ A1 5,413,000 Hydro-Quebec, 10.75% due 6/15/2010
(2)............................. 5,959,821 5,837,271
AAA Aaa 4,165,000 Japan Finance Corp. for Municipal
Enterprises, 8.70% due 7/30/2001
(3)............................. 4,754,072 4,411,693
</TABLE>
58
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.--PRIME BOND FUND
SCHEDULE OF INVESTMENTS AS OF JUNE 30, 1994 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
S&P MOODY'S FACE VALUE
INDUSTRY RATINGS RATINGS AMOUNT ISSUE COST (NOTE 1A)
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CORPORATE BONDS & NOTES
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
FOREIGN Metropolis of Tokyo (Japan) (4):
(CONCLUDED) AAA Aaa $ 3,000,000 8.70% due 10/05/1999.............. $ 3,469,410 $ 3,177,210
AAA Aaa 250,000 9.25% due 11/08/2000.............. 268,428 272,277
AAA Aaa 2,000,000 8.65% due 7/18/2001............... 2,288,720 2,113,680
A+ A1 1,000,000 Province of Quebec (Canada), 7.50%
due 7/15/2002 (4)............... 1,076,020 959,830
AA A1 3,000,000 Republic of Italy, 6.875% due
9/27/2023 (4)................... 2,898,730 2,446,350
------------- ------------
28,812,501 26,607,521
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
INDUSTRIAL--CONSUMER
GOODS--9.5% Anheuser-Busch Cos., Inc.:
A- A1 2,500,000 8.75% due 12/01/1999.............. 2,839,090 2,631,675
AA- A1 5,000,000 7.375% due 7/01/2023.............. 5,127,300 4,433,250
A+ A1 2,500,000 Bass America, Inc., 8.125% due
3/31/2002....................... 2,668,930 2,538,450
Dillard Department Stores, Inc.:
A+ A2 5,000,000 7.375% due 6/15/1999.............. 5,305,840 4,950,550
A+ A2 1,000,000 9.125% due 8/01/2011.............. 1,210,800 1,069,030
Grand Metropolitan Investment
Corp.:
A+ A2 5,500,000 6.50% due 9/15/1999............... 5,615,810 5,244,470
A+ A2 1,000,000 8.625% due 8/15/2001.............. 1,049,910 1,041,500
A+ A2 2,250,000 9.00% due 8/15/2011............... 2,595,373 2,386,372
A+ A2 5,000,000 Penney (J.C.) Co., Inc., 6.875%
due 6/15/1999................... 4,982,300 4,906,250
A A1 1,000,000 PepsiCo, Inc., 6.125% due
1/15/1998....................... 993,060 968,630
AA Aa 5,000,000 Wal-Mart Stores Inc., 8.625% due
4/01/2001....................... 5,724,650 5,278,200
------------- ------------
38,113,063 35,448,377
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
INDUSTRIAL--ENERGY--
5.1% BP America Inc.:
AA- A1 1,000,000 9.50% due 1/01/1998............... 1,169,680 1,069,740
AA- A1 4,865,000 9.375% due 11/01/2000............. 5,363,565 5,249,919
AA- A1 5,500,000 7.875% due 5/15/2002.............. 5,972,510 5,543,285
Burlington Resources, Inc.:
A- A3 1,000,000 9.625% due 6/15/2000.............. 1,201,910 1,086,700
A- A3 3,000,000 8.50% due 10/01/2001.............. 3,497,340 3,108,030
Texaco Capital Inc.:
A+ A1 1,500,000 9.00% due 12/15/1999.............. 1,731,670 1,594,980
A+ A1 1,000,000 8.875% due 9/01/2021.............. 1,220,140 1,061,770
A+ A1 1,000,000 8.00% due 8/01/2032............... 969,730 956,840
------------- ------------
21,126,545 19,671,264
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
INDUSTRIAL--OTHER--8.0% AA- Aa2 2,000,000 Archer-Daniels-Midland Co., 6.25%
due 5/15/2003................... 1,992,640 1,811,240
A+ A1 7,000,000 Capital Cities/ABC, Inc., 8.875%
due 12/15/2000.................. 8,140,300 7,539,070
A- A3 1,000,000 Carnival Cruise Lines, Inc., 6.15%
due 10/01/2003.................. 999,450 869,590
A A2 3,000,000 Comsat Corp., 8.125% due
4/01/2004....................... 3,183,750 3,017,640
A- A3 6,250,000 International Paper Co., 9.70% due
3/15/2000....................... 7,418,448 6,848,062
AA Aa2 5,020,000 Kaiser Foundation Hospital, 9.00%
due 11/01/2001.................. 5,678,096 5,344,041
AAA Aaa 5,500,000 Stanford University, 6.875% due
2/01/2024....................... 5,458,200 4,792,964
------------- ------------
32,870,884 30,222,607
</TABLE>
- --------------------------------------------------------------------------------
59
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.--PRIME BOND FUND
SCHEDULE OF INVESTMENTS AS OF JUNE 30, 1994 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
S&P MOODY'S FACE VALUE
INDUSTRY RATINGS RATINGS AMOUNT ISSUE COST (NOTE 1A)
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CORPORATE BONDS & NOTES
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
SUPRANATIONAL--5.8% Asian Development Bank:
AAA Aaa $ 1,000,000 10.75% due 6/01/1997.............. $ 1,084,890 $ 1,100,560
AAA Aaa 3,000,000 8.50% due 5/02/2001............... 3,224,400 3,149,880
European Investment Bank:
AAA Aaa 2,000,000 8.875% due 3/01/2001.............. 2,380,320 2,151,960
AAA Aaa 5,000,000 9.125% due 6/01/2002.............. 6,147,500 5,462,350
Inter-American Development Bank
Co.:
AAA Aaa 2,000,000 8.875% due 6/01/2009.............. 2,481,700 2,220,120
AAA Aaa 4,000,000 8.50% due 3/15/2011............... 4,910,200 4,213,000
AAA Aaa 3,000,000 International Bank for
Reconstruction & Development,
12.375% due 10/15/2002.......... 3,817,430 3,864,840
------------- ------------
24,046,440 22,162,710
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
TRANSPORTATION
SERVICES--3.0% A A2 3,640,000 Conrail Inc., 9.75% due
6/01/2000....................... 4,047,134 3,980,340
Southwest Airlines, Inc.:
A- Baa1 2,000,000 9.40% due 7/01/2001............... 2,407,120 2,154,980
A- Baa1 4,000,000 8.75% due 10/15/2003.............. 4,417,060 4,183,320
A- Baa1 1,000,000 7.875% due 9/01/2007.............. 992,600 959,410
------------- ------------
11,863,914 11,278,050
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
UTILITIES--
COMMUNICATIONS--2.4% GTE Corp.:
BBB+ Baa1 1,000,000 8.85% due 3/01/1998............... 1,143,360 1,052,040
BBB+ Baa1 1,000,000 9.10% due 6/01/2003............... 1,221,680 1,067,160
BBB+ Baa1 1,000,000 6.75% due 3/15/2004............... 972,850 930,630
Pacific Bell, Inc.:
AA- Aa3 4,000,000 8.70% due 6/15/2001............... 4,554,320 4,223,520
AA- Aa3 1,500,000 7.375% due 6/15/2025.............. 1,534,170 1,334,775
A+ A1 1,000,000 Southwestern Bell
Telecommunications Corp., 6.125%
due 3/01/2000................... 1,005,000 937,870
------------- ------------
10,431,380 9,545,995
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
UTILITIES--ELECTRIC--4.4% A+ A1 7,000,000 Baltimore Gas & Electric Co.,
4.025% due 4/15/1999............ 6,975,500 6,999,160
A A2 3,000,000 Georgia Power Co., 6.125% due
9/01/1999....................... 2,892,720 2,845,080
A A1 1,000,000 Pacific Gas & Electric Co., 7.875%
due 3/01/2002................... 997,920 1,008,020
A- A2 1,000,000 Pennsylvania Power & Light Co.,
7.75% due 5/01/2002............. 995,100 996,510
A A2 6,000,000 Virginia Electric & Power Co.,
6.75% due 10/01/2023............ 5,113,800 4,953,240
------------- ------------
16,975,040 16,802,010
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
UTILITIES--GAS--2.9% AA- A1 10,713,000 Consolidated Natural Gas Co.,
8.75% due 6/01/1999............. 11,438,200 11,250,900
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
TOTAL CORPORATE BONDS & NOTES--
76.1%........................... 308,604,193 290,496,942
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
US GOVERNMENT & AGENCY OBLIGATIONS
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
FEDERAL AGENCY NR Aaa 5,000,000 Federal Home Loan Bank, 4.50% due
OBLIGATIONS--3.2% 5/06/1996....................... 4,980,500 4,980,500
Federal National Mortgage
Association:
AAA Aaa 3,000,000 7.65% due 4/29/2004............... 2,963,430 2,913,132
AAA Aaa 4,500,000 7.55% due 6/10/2004............... 4,493,672 4,370,625
------------- ------------
12,437,602 12,264,257
</TABLE>
- --------------------------------------------------------------------------------
60
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.--PRIME BOND FUND
SCHEDULE OF INVESTMENTS AS OF JUNE 30, 1994 (CONCLUDED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
S&P MOODY'S FACE VALUE
INDUSTRY RATINGS RATINGS AMOUNT ISSUE COST (NOTE 1A)
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
US GOVERNMENT OBLIGATIONS
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
US GOVERNMENT US Treasury Notes & Bonds:
OBLIGATIONS--10.6% NR Aaa $ 4,000,000 8.25% due 7/15/1998............... $ 4,502,500 $ 4,200,000
NR Aaa 9,000,000 6.375% due 7/15/1999.............. 9,681,563 8,780,580
NR Aaa 2,500,000 8.75% due 8/15/2000............... 2,976,172 2,705,075
NR Aaa 4,000,000 8.50% due 11/15/2000.............. 4,605,625 4,281,880
NR Aaa 4,500,000 7.50% due 5/15/2002............... 4,661,719 4,563,990
NR Aaa 11,175,000 7.25% due 5/15/2004............... 11,289,797 11,112,085
NR Aaa 2,000,000 7.50% due 11/15/2016.............. 2,219,480 1,944,380
NR Aaa 1,000,000 8.125% due 8/15/2021.............. 1,227,187 1,045,160
NR Aaa 2,000,000 7.125% due 2/15/2023.............. 1,914,062 1,871,250
------------- ------------
43,078,105 40,504,400
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
TOTAL US GOVERNMENT & AGENCY
OBLIGATIONS--13.8%.............. 55,515,707 52,768,657
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
SHORT-TERM SECURITIES
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
COMMERCIAL PAPER**--7.0% 15,000,000 American Express Credit Corp.,
4.25% due 7/07/1994............. 14,987,604 14,987,604
12,000,000 Prudential Bache, 4.13% due
7/01/1994....................... 11,998,623 11,998,623
------------- ------------
26,986,227 26,986,227
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
REPURCHASE 15,387,000 Swiss Bank Corp., purchased on
AGREEMENT***--4.0% 6/30/1994 to yield 4.25% to
7/01/1994....................... 15,387,000 15,387,000
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
TOTAL SHORT-TERM SECURITIES--11.0% 42,373,227 42,373,227
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
TOTAL INVESTMENTS--100.9%......... $ 406,493,127 385,638,826
-------------
-------------
LIABILITIES IN EXCESS OF OTHER
ASSETS--(0.9%).................. (3,381,415)
------------
NET ASSETS--100.0%................ $382,257,411
------------
------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<C> <S>
* Corresponding industry groups for foreign securities, which are denominated in US dollars.
(1) Industrial Mining
(2) Electric Utility
(3) Financial Institution
(4) Government Entity
** Commercial Paper is traded on a discount basis and amortized to maturity. The interest rate shown is the discount
rate paid at the time of purchase by the Fund.
*** Repurchase Agreements are fully collateralized by US Government Obligations.
</TABLE>
See Notes to Financial Statements.
61
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.--QUALITY EQUITY FUND
SCHEDULE OF INVESTMENTS AS OF JUNE 30, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE PERCENT OF
INDUSTRY HELD COMMON STOCKS & WARRANTS COST (NOTE 1A) NET ASSETS
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
APPLIANCES 350,000 Singer Co., N.V...................... $ 11,537,788 $ 12,250,000 3.1%
550,000 Sunbeam-Oster Inc.................... 11,293,706 11,000,000 2.8
52,000 Whirlpool Corp....................... 2,943,782 2,730,000 0.7
------------- ------------- ----------
25,775,276 25,980,000 6.6
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
AUTO & TRUCK 20,000 Consorcio G Grupo Dina S.A. (ADR)
(a)................................ 482,962 210,000 0.1
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
AUTOMOBILES 50,000 Ford Motor Co........................ 3,021,475 2,950,000 0.7
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
AUTOMOTIVE 159,000 Magna International, Inc. (Class
A)................................. 7,146,251 6,360,000 1.6
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
BANKING 45,000 + Banco Frances del Rio de la Plata S.A.
(ADR) (a).......................... 1,375,787 1,006,875 0.2
60,000 Bank of New York Co. (Warrants)
(b)................................ 433,750 577,500 0.2
200,000 Bank of New York, Inc................ 5,622,608 5,775,000 1.5
160,000 BankAmerica Corp..................... 7,293,547 7,320,000 1.8
65,000 Espirito Santo Financial Holdings
S.A. (ADR) (a)..................... 1,870,325 1,755,000 0.4
------------- ------------- ----------
16,596,017 16,434,375 4.1
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
BEVERAGES 13,500 PanAmerican Beverage, Inc. (Class
A)................................. 438,013 325,688 0.1
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
CHEMICALS 90,000 du Pont (E.I.) de Nemours & Co....... 5,198,122 5,253,750 1.3
70,000 + IMC Fertilizer Group Inc............. 2,709,466 2,423,750 0.6
100,000 Rohm and Haas Co..................... 5,741,215 6,225,000 1.6
------------- ------------- ----------
13,648,803 13,902,500 3.5
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
COMMUNICATION 325,000 ADC Telecommunications Inc........... 10,349,160 13,081,250 3.3
EQUIPMENT 300,000 DSC Communications Corp.............. 7,316,976 5,850,000 1.5
120,000 Motorola, Inc........................ 6,004,053 5,340,000 1.3
70,000 Tellabs, Inc......................... 1,608,744 2,152,500 0.5
------------- ------------- ----------
25,278,933 26,423,750 6.6
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
COMPUTER SERVICES 350,000 Computer Sciences Corp............... 10,730,840 14,568,750 3.7
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
COMPUTER TECHNOLOGY 200,000 + Solectron Corp....................... 4,543,278 5,075,000 1.3
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
CONSUMER-- 85,000 Duracell International, Inc.......... 3,571,124 3,315,000 0.8
MISCELLANEOUS
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
CONSUMER--SERVICES 185,000 Block (H&R), Inc..................... 7,558,493 7,261,250 1.8
40,000 Kelly Services, Inc. (Class A)....... 1,137,039 1,080,000 0.3
------------- ------------- ----------
8,695,532 8,341,250 2.1
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
ELECTRICAL EQUIPMENT 100,000 Grainger (W.W.) Inc.................. 6,291,619 6,387,500 1.6
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
ELECTRONIC/INSTRUMENTS 80,000 Perkin-Elmer Corp.................... 2,878,887 2,340,000 0.6
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
ENGINEERING & 100,000 + Empresas ICA Sociedad Controladora,
CONSTRUCTION S.A. de C.V. (ADR) (a)............. 2,597,554 2,400,000 0.6
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
ENVIRONMENTAL CONTROL 650,000 + Wheelabrator Technologies, Inc....... 11,123,269 12,106,250 3.0
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
FOREIGN--AUSTRALIA 65,000 News Corp., Ltd. (ADR) (a) (5)....... 3,572,890 3,136,250 0.8
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
FOREIGN--CHILE 39,000 + Banco O'Higgins (ADR) (a) (2)........ 581,650 692,250 0.2
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
FOREIGN--DENMARK 40,000 + Tele Danmark A/S (ADR) (a) (5)....... 941,040 985,000 0.3
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
FOREIGN--FRANCE 46,000 + Societe Nationale Elf Aquitaine (ADR)
(a) (4)............................ 1,640,552 1,529,500 0.4
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
FOREIGN--ITALY 30,000 Istituto Mobiliare Italiano S.p.A.
(ADR) (a) (2)...................... 664,580 600,000 0.2
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
FOREIGN--MEXICO 100,000 Grupo Financiero Serfin, S.A. de C.V.
(ADR) (a) (2)...................... 2,619,970 1,762,500 0.4
</TABLE>
- --------------------------------------------------------------------------------
62
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.--QUALITY EQUITY FUND
SCHEDULE OF INVESTMENTS AS OF JUNE 30, 1994 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE PERCENT OF
INDUSTRY HELD COMMON STOCKS & WARRANTS COST (NOTE 1A) NET ASSETS
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
FOREIGN-- 20,000 British Petroleum Co. PLC (ADR) (a)
(4)................................ $ 1,452,450 $ 1,435,000 0.3%
UNITED KINGDOM 35,000 Hanson PLC (ADR) (a) (6)............. 774,681 643,125 0.2
80,000 Reuters Holdings PLC (ADR) (a) (1)... 2,583,407 3,120,000 0.8
------------- ------------- ----------
4,810,538 5,198,125 1.3
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
FOREST PRODUCTS 102,500 Willamette Industries Inc............ 3,925,498 4,381,875 1.1
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
HEALTH CARE 400,000 + Humana Inc........................... 6,932,551 6,450,000 1.6
300,000 Physician Corp....................... 6,112,400 6,750,000 1.7
110,000 US HealthCare, Inc................... 4,616,411 4,070,000 1.0
50,000 Vivra Inc............................ 965,297 1,200,000 0.3
------------- ------------- ----------
18,626,659 18,470,000 4.6
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
HEALTH AND PERSONAL CARE 40,000 Johnson & Johnson.................... 1,600,253 1,715,000 0.4
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
HOUSEHOLD PRODUCTS 170,000 Procter & Gamble Co.................. 8,920,659 9,073,750 2.3
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
INSURANCE 110,000 ITT Corp............................. 9,389,542 8,978,750 2.3
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
MISCELLANEOUS-- 133,200 Thermo Electron Corp................. 5,447,490 4,961,700 1.3
CAPITAL GOODS
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
MULTI-INDUSTRY 180,000 Allied Signal Inc.................... 6,093,001 6,232,500 1.6
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
OFFICE EQUIPMENT 245,000 Danka Business Systems PLC (ADR)
(a)................................ 7,032,452 9,769,375 2.5
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
OIL--INTEGRATED 150,000 Mobil Corp........................... 11,627,842 12,243,750 3.1
60,000 Phillips Petroleum Co................ 1,934,067 1,875,000 0.5
40,000 Royal Dutch Petroleum Co. (ADR)
(a)................................ 3,942,400 4,185,000 1.0
------------- ------------- ----------
17,504,309 18,303,750 4.6
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
PACKAGING 120,000 Crown Cork & Seal Co., Inc........... 4,427,472 4,470,000 1.1
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
PAPER 130,000 Scott Paper Co....................... 6,049,690 6,792,500 1.7
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
RAILROADS 170,000 CSX Corp............................. 14,374,121 12,835,000 3.2
290,000 + Southern Pacific Rail Corp........... 6,032,051 5,691,250 1.4
------------- ------------- ----------
20,406,172 18,526,250 4.6
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
RETAIL 95,000 Phillips-Van Heusen Corp............. 2,715,283 2,386,875 0.6
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
SOFTWARE 100,000 Novell, Inc.......................... 1,799,418 1,662,500 0.4
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
TELECOMMUNICATIONS 80,000 Telefonos de Mexico, S.A. de C.V.
(ADR) (a).......................... 4,006,395 4,470,000 1.1
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
TIRES & RUBBER 60,000 Bandag, Inc. (Class A)............... 3,116,104 2,775,000 0.7
110,000 Cooper Tire & Rubber Co.............. 2,556,571 2,543,750 0.6
------------- ------------- ----------
5,672,675 5,318,750 1.3
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
UTILITIES-- 54,600 + ALC Communications Corp.............. 1,616,751 1,678,950 0.4
COMMUNICATIONS 200,000 GTE Corp............................. 6,392,691 6,300,000 1.6
300,000 LDDS Communications Inc.............. 6,763,866 5,175,000 1.3
400,000 MCI Communications Corp.............. 10,805,074 8,850,000 2.2
180,000 + Southwestern Bell Corp............... 7,664,078 7,830,000 2.0
70,000 Sprint Corp.......................... 2,557,649 2,441,250 0.6
------------- ------------- ----------
35,800,109 32,275,200 8.1
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
UTILITIES--ELECTRIC 294,000 California Energy Co., Inc........... 5,502,330 4,851,000 1.2
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
TOTAL COMMON STOCKS & WARRANTS....... 322,570,460 323,663,463 81.4
</TABLE>
- --------------------------------------------------------------------------------
63
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.--QUALITY EQUITY FUND
SCHEDULE OF INVESTMENTS AS OF JUNE 30, 1994 (CONCLUDED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE VALUE PERCENT OF
AMOUNT SHORT-TERM SECURITIES COST (NOTE 1A) NET ASSETS
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
COMMERCIAL PAPER* $ 19,000,000 Ciesco L.P., 4.22% due 7/12/1994.... $ 18,973,273 $ 18,973,273 4.8%
18,169,000 General Electric Capital Corp.,
4.30% due 7/01/1994............... 18,166,830 18,166,830 4.6
8,000,000 Hertz Funding Corp., 4.30% due
7/22/1994......................... 7,978,978 7,978,978 2.0
15,000,000 Matterhorn Capital Corp., 4.20% due
7/08/1994......................... 14,986,000 14,986,000 3.8
7,000,000 Pitney Bowes Inc., 4.23% due
7/25/1994......................... 6,979,437 6,979,437 1.7
5,000,000 Preferred Receivable Funding Corp.,
4.26% due 7/12/1994............... 4,992,900 4,992,900 1.2
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
TOTAL SHORT-TERM SECURITIES......... 72,077,418 72,077,418 18.1
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
TOTAL INVESTMENTS................... $ 394,647,878 395,740,881 99.5
-------------
-------------
OTHER ASSETS LESS LIABILITIES....... 1,829,671 0.5
------------- ----------
NET ASSETS.......................... $ 397,570,552 100.0%
------------- ----------
------------- ----------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
(a) American Depositary Receipt (ADR)
(b) Warrants entitle the Fund to purchase a predetermined number of shares of common stock. The purchase price and number
of shares are subject to adjustments under certain conditions until the expiration date.
* 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.
+ Non-income producing security.
</TABLE>
Corresponding industry groups for foreign securities:
<TABLE>
<S> <C> <C> <C>
(1) Business Services (4) Petroleum
(2) Financial Services (5) Telecommunications
(3) Miscellaneous (6) Multi-Industry
</TABLE>
See Notes to Financial Statements.
64
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.--RESERVE ASSETS FUND
SCHEDULE OF INVESTMENTS AS OF JUNE 30, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE INTEREST MATURITY VALUE
AMOUNT ISSUE RATE* DATE (NOTE 1A)
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CERTIFICATE OF DEPOSIT-- $1,000,000 Societe Generale................................. 4.00 % 7/05/94 $ 1,000,000
YANKEE--2.8%
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C>
TOTAL CERTIFICATE OF DEPOSIT--YANKEE
(COST--$1,000,000)..................................................... 1,000,000
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C>
COMMERCIAL 1,452,000 ABN-AMRO North America Finance Inc............... 4.45 9/16/94 1,437,371
PAPER--53.2%
500,000 BNP U.S. Finance Corp............................ 4.05 9/29/94 494,123
1,000,000 Bear Stearns Cos., Inc. (The).................... 4.45 8/22/94 993,419
1,083,000 CIT Group Holdings, Inc. (The)................... 4.55 10/06/94 1,069,144
1,700,000 CSW Credit, Inc.................................. 4.35 7/05/94 1,698,973
1,000,000 Delaware Funding Corp............................ 4.27 7/05/94 999,407
592,000 ESC Securitization, Inc.......................... 4.45 9/12/94 586,341
1,500,000 Ford Motor Credit Company........................ 4.38 7/05/94 1,499,088
464,000 Goldman Sachs Group, L.P......................... 4.50 9/06/94 459,925
1,505,000 Grand Metropolitan Investment Corp............... 4.66 11/28/94 1,474,699
1,000,000 International Lease Finance Corp................. 3.90 7/11/94 998,701
410,000 Morgan Stanley Group, Inc........................ 4.399 7/01/94 409,950
1,500,000 Nomura Holding America, Inc...................... 4.45 7/01/94 1,499,815
340,000 PHH Corporation.................................. 4.30 7/25/94 338,985
600,000 Pfizer Inc....................................... 4.25 7/14/94 599,008
1,199,000 Premium Funding, Inc., Series A.................. 4.57 10/06/94 1,183,659
1,700,000 Transamerica Finance Corporation................. 4.45 9/06/94 1,685,068
1,000,000 Xerox Credit Corporation......................... 3.92 7/14/94 994,804
673,000 Xerox Credit Corporation......................... 4.35 8/12/94 671,888
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C>
TOTAL COMMERCIAL PAPER
(COST--$19,098,746).................................................... 19,094,368
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C>
CORPORATE NOTES+--2.8% 1,000,000 Goldman Sachs Group L.P.......................... 4.38 9/01/94 1,000,000
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C>
TOTAL CORPORATE NOTES--
(COST--$1,000,000)..................................................... 1,000,000
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C>
US GOVERNMENT & 50,000 Federal Farm Credit Bank......................... 3.64 11/17/94 49,096
AGENCY OBLIGATIONS--
DISCOUNT--12.7% 60,000 Federal Farm Credit Bank......................... 3.74 11/17/94 58,915
485,000 Federal Home Loan Bank........................... 4.75 10/24/94 477,842
415,000 Federal Home Loan Bank........................... 4.66 12/01/94 406,585
48,000 Federal Home Loan Mortgage Association........... 3.25 7/28/94 47,847
70,000 Federal Home Loan Mortgage Association........... 3.47 7/28/94 69,777
303,000 Federal Home Loan Mortgage Association........... 3.50 7/28/94 302,034
78,000 Federal Home Loan Mortgage Association........... 3.55 7/28/94 77,751
73,000 Federal Home Loan Mortgage Association........... 4.40 8/31/94 72,449
38,000 Federal Home Loan Mortgage Association........... 3.73 11/23/94 37,283
43,000 Federal Home Loan Mortgage Association........... 3.49 1/13/95 41,859
90,000 Federal National Mortgage Association............ 3.38 7/19/94 89,805
445,000 Federal National Mortgage Association............ 4.33 7/21/94 443,876
50,000 Federal National Mortgage Association............ 3.46 8/22/94 49,683
25,000 Federal National Mortgage Association............ 3.46 8/23/94 24,839
230,000 Federal National Mortgage Association............ 3.46 9/19/94 227,697
45,000 Federal National Mortgage Association............ 3.51 9/20/94 44,544
120,000 Federal National Mortgage Association............ 3.34 9/22/94 118,754
50,000 Federal National Mortgage Association............ 3.37 9/22/94 49,481
25,000 Federal National Mortgage Association............ 3.42 9/27/94 24,725
115,000 Federal National Mortgage Association............ 3.46 9/27/94 113,735
345,000 Federal National Mortgage Association............ 3.49 9/27/94 341,205
45,000 Federal National Mortgage Association............ 3.42 10/11/94 44,410
250,000 Federal National Mortgage Association............ 3.36 10/17/94 246,533
International Bank of Reconstruction &
50,000 Development...................................... 3.48 12/23/94 48,841
International Bank of Reconstruction &
70,000 Development...................................... 3.50 12/23/94 68,378
1,000,000 United States Treasury Bills..................... 4.66 12/01/94 980,493
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C>
TOTAL US GOVERNMENT & AGENCY
OBLIGATIONS--DISCOUNT (COST--$4,563,123)............................... 4,558,437
</TABLE>
- --------------------------------------------------------------------------------
65
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.--RESERVE ASSETS FUND
SCHEDULE OF INVESTMENTS AS OF JUNE 30, 1994 (CONCLUDED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE INTEREST MATURITY VALUE
AMOUNT ISSUE RATE* DATE (NOTE 1A)
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
US GOVERNMENT & $ 500,000 Federal Home Loan Bank+.......................... 4.18 % 12/28/95 $ 500,000
AGENCY OBLIGATIONS--
NON DISCOUNT--28.4% 2,000,000 Federal Home Loan Mortgage Association+.......... 4.61 9/01/95 1,999,554
1,000,000 Federal National Mortgage Association+........... 4.58 5/13/96 1,000,000
1,000,000 Federal National Mortgage Association+........... 4.70 5/19/97 1,000,000
1,000,000 Federal National Mortgage Association+........... 4.75 5/14/98 1,000,000
250,000 Student Loan Marketing Association+.............. 4.61 12/30/94 250,248
300,000 Student Loan Marketing Association+.............. 4.61 12/30/94 300,332
500,000 Student Loan Marketing Association+.............. 4.91 3/01/95 501,649
1,000,000 Student Loan Marketing Association+.............. 4.91 3/20/95 1,003,775
1,000,000 Student Loan Marketing Association+.............. 4.91 3/23/95 1,001,729
450,000 Student Loan Marketing Association+.............. 4.66 3/20/96 450,000
300,000 United States Treasury Notes..................... 3.875 3/31/95 296,906
250,000 United States Treasury Notes..................... 3.875 4/30/95 246,953
250,000 United States Treasury Notes..................... 4.125 6/30/95 246,875
400,000 United States Treasury Notes..................... 3.875 8/31/95 392,375
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C>
TOTAL US GOVERNMENT & AGENCY
OBLIGATIONS--NON-DISCOUNT (COST--$10,207,265).......................... 10,190,396
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C>
TOTAL INVESTMENTS (COST--$35,869,134)--99.9%........................... 35,843,201
OTHER ASSETS LESS LIABILITIES--0.1%.................................... 38,177
NET ASSETS--100.0%..................................................... $35,881,378
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
* Bankers' Acceptances, Commercial Paper and certain US Government & Agency Obligations are traded on a discount basis;
the interest rates shown are the discount rates paid at the time of purchase by the Fund. Other securities bear
interest at the rates shown, payable at fixed dates or upon maturity. The interest rates on variable rate securities
are adjusted periodically based upon appropriate indexes. The interest rates shown are the rates in effect at June 30,
1994.
+ Variable Rate Note.
</TABLE>
See Notes to Financial Statements.
66
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.--WORLD INCOME FOCUS
SCHEDULE OF INVESTMENTS AS OF JUNE 30, 1994 (IN US DOLLARS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LATIN AMERICA
AND THE VALUE PERCENT OF
CARIBBEAN INDUSTRY FACE AMOUNT FIXED-INCOME INVESTMENTS COST (NOTE 1A) NET ASSETS
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ARGENTINA AUTOMOBILES US$ 500,000 Compania Naviera Perez
Companc S.A.C.F.I.M.A.
S.A., 8.375% due
7/30/1998............... $ 511,875 $ 470,625 0.6%
ENERGY 500,000 YPF, S.A., 8.00% due
2/15/2004............... 498,850 422,500 0.5
FOREIGN GOVERNMENT 500,000 Republic of Argentina,
OBLIGATIONS 8.375% due 12/20/2003... 422,500 411,250 0.5
TELECOMMUNICATIONS 500,000 Telecom Argentina
Stet--France Telecom,
S.A., 8.375% due
10/18/2000.............. 502,500 449,375 0.6
TOTAL FIXED-INCOME
INVESTMENTS IN
ARGENTINA............... 1,935,725 1,753,750 2.2
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
MEXICO ENERGY 500,000 Petroleos Mexicanos, 8.25%
due 2/04/1998........... 521,875 497,500 0.6
FOREIGN GOVERNMENT 250,000 Banco Nacional de Commerce
OBLIGATIONS-- Exterior, 8.00% due
REGIONAL & AGENCY 8/05/2003............... 220,625 211,250 0.3
RETAIL STORES 250,000 Controladora Comercial
Mexicana, S.A. de C.V.,
8.75% due 4/21/1998..... 263,125 241,875 0.3
TOTAL FIXED-INCOME
INVESTMENTS IN MEXICO... 1,005,625 950,625 1.2
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
TRINIDAD & FOREIGN GOVERNMENT 200,000 Republic of Trinidad &
TOBAGO OBLIGATIONS Tobago, 11.50% due
11/20/1997.............. 214,750 204,000 0.3
TOTAL FIXED-INCOME
INVESTMENTS IN TRINIDAD
& TOBAGO 214,750 204,000 0.3
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
TOTAL INVESTMENTS IN LATIN
AMERICAN AND CARIBBEAN
SECURITIES.............. 3,156,100 2,908,375 3.7
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NORTH AMERICA
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CANADA FOREIGN GOVERNMENT Canadian Government Bonds:
OBLIGATIONS
C $ 3,705,000 7.75% due 9/01/1999....... 2,681,248 2,549,533 3.3
2,000,000 7.50% due 12/01/2003...... 1,581,135 1,291,606 1.7
320,000 6.50% due 6/01/2004....... 202,320 191,143 0.2
----------- ----------- ----------
4,464,703 4,032,282 5.2
TOTAL FIXED-INCOME
INVESTMENTS IN CANADA 4,464,703 4,032,282 5.2
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
UNITED STATES AIR TRANSPORT US $ 250,000 Delta Air Lines, Inc.,
9.30% due 1/02/2010..... 246,925 228,161 0.3
500,000 USAir Inc., 10.375% due
3/01/2013............... 504,688 440,000 0.6
100,000 United Air Pass-Through,
10.125% due 3/22/2015... 109,036 90,435 0.1
----------- ----------- ----------
860,649 758,596 1.0
BROADCASTING & 250,000 Continental Cablevision
PUBLISHING Inc., 9.50% due
8/01/2013............... 250,000 228,125 0.3
500,000 SCI Television Inc.,
11.00% due 6/30/2005.... 520,625 510,000 0.7
----------- ----------- ----------
770,625 738,125 1.0
BUILDING MATERIALS 250,000 Inter-City Products Corp.,
9.75% due 3/01/2000..... 242,500 222,500 0.3
1,000,000 Nortek Inc., 9.875% due
3/01/2004............... 890,000 910,000 1.2
</TABLE>
67
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.--WORLD INCOME FOCUS
SCHEDULE OF INVESTMENTS AS OF JUNE 30, 1994 (CONTINUED) (IN US DOLLARS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NORTH AMERICA VALUE PERCENT OF
(CONTINUED) INDUSTRY FACE AMOUNT FIXED-INCOME INVESTMENTS COST (NOTE 1A) NET ASSETS
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
UNITED STATES BUILDING MATERIALS US$ 500,000 Pacific Lumber Co., 10.50%
(CONTINUED) (CONCLUDED) due 3/01/2003........... $ 492,000 $ 486,250 0.6%
350,000 USG Corp., 8.75% due
3/01/2017............... 323,125 295,750 0.4
----------- ----------- ----------
1,947,625 1,914,500 2.5
BUILDING PRODUCTS American Standard Inc.:
500,000 9.875% due 6/01/2001...... 485,000 477,500 0.6
250,000 9.25% due 12/01/2016...... 251,875 230,000 0.3
----------- ----------- ----------
736,875 707,500 0.9
CELLULAR TELEPHONES 260,000 Dial Page, Inc., 12.25%
& PAGING due 2/15/2000........... 282,775 265,200 0.3
CHEMICALS 500,000 Envirodyne Industries
Inc., 10.25% due
12/01/2001.............. 509,375 440,000 0.6
435,000 G-I Holdings, Inc., 9.65%*
due 10/01/1998.......... 271,703 264,263 0.3
----------- ----------- ----------
781,078 704,263 0.9
COMMUNICATIONS 940,000 American Telecasting Inc.,
13.02%* due 6/15/2004... 514,653 493,500 0.6
CONGLOMERATES Coltec Industries Inc.:
150,000 9.75% due 11/01/1999...... 159,000 153,000 0.2
100,000 10.25% due 4/01/2002...... 107,000 101,000 0.1
191,000 Foamex L.P., 9.50% due
6/01/2000............... 186,464 181,450 0.2
292,000 Interco, Inc., 10.00% due
6/01/2001............... 294,920 288,350 0.4
500,000 JB Poindexter Co., Inc.,
12.50% due 5/15/2004.... 500,000 502,500 0.7
500,000 Jordan Industries, Inc.,
10.375% due 8/01/2003... 495,688 486,250 0.6
500,000 Sequa Corp., 9.375% due
12/15/2003.............. 508,750 490,000 0.6
500,000 Sherritt Gordon, Ltd.,
9.75% due 4/01/2003..... 503,625 493,750 0.6
----------- ----------- ----------
2,755,447 2,696,300 3.4
CONSUMER-- 500,000 Astrum International
PRODUCTS Corp., 11.50% due
6/08/2003............... 504,375 505,000 0.7
500,000 Coleman Holdings, Inc.,
10.11%* due 5/27/1998... 328,372 325,000 0.4
250,000 Formica Corp., 13.928% due
9/15/2005............... 250,000 244,063 0.3
500,000 ++ Polymer Group Inc., 12.25%
due 7/15/2002........... 500,000 500,000 0.6
925,000 Revlon Worldwide Corp.,
16.61%* due 3/15/1998... 550,390 379,250 0.5
----------- ----------- ----------
2,133,137 1,953,313 2.5
CONTAINERS 500,000 Anchor Glass Container
Co., 9.875% due
12/15/2008.............. 493,125 462,500 0.6
500,000 Silgan Holdings, Inc.,
12.43%* due 6/15/1996... 406,694 400,000 0.5
250,000 Stone-Consolidated Corp.,
10.25% due 12/15/2000... 251,250 242,500 0.3
250,000 Sweetheart Cup Co., 9.625%
due 9/01/2000........... 250,000 245,000 0.3
----------- ----------- ----------
1,401,069 1,350,000 1.7
ENERGY 100,000 ++ Clark Oil Co., 10.50% due
12/01/2001.............. 106,375 103,000 0.1
1,000,000 Clark R & M Holdings,
Inc., 9.9684%* due
2/15/2000............... 548,368 550,000 0.7
250,000 ++ Consolidated-Hydro Inc.,
11.95%* due 7/15/2003... 148,988 145,000 0.2
500,000 Dual Drilling Co., 9.875%
due 1/15/2004........... 508,750 465,000 0.6
1,000,000 Gulf Canada Resources,
Ltd., 9.25% due
1/15/2004............... 1,007,167 930,000 1.2
500,000 Maxus Energy Corp., 9.375%
due 11/01/2003.......... 503,125 458,750 0.6
</TABLE>
68
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.--WORLD INCOME FOCUS
SCHEDULE OF INVESTMENTS AS OF JUNE 30, 1994 (CONTINUED) (IN US DOLLARS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NORTH AMERICA VALUE PERCENT OF
(CONTINUED) INDUSTRY FACE AMOUNT FIXED-INCOME INVESTMENTS COST (NOTE 1A) NET ASSETS
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
UNITED STATES ENERGY US$ 250,000 Noble Drilling Corp.,
(CONTINUED) (CONCLUDED) 9.25% due 10/01/2003.... $ 250,000 $ 238,750 0.3%
250,000 Trans Texas Gas Corp.,
10.50% due 9/01/2000.... 250,000 250,000 0.3
500,000 Triton Energy Corp.,
9.65%* due 11/01/1997... 360,195 355,000 0.5
----------- ----------- ----------
3,682,968 3,495,500 4.5
ENTERTAINMENT 500,000 Marvel Holdings, Inc.,
10.13%* due 4/15/1998... 329,986 307,500 0.4
350,000 Spectravision Inc.,
0/11.5%* due
10/01/2001.............. 258,388 210,000 0.3
----------- ----------- ----------
588,374 517,500 0.7
FINANCIAL SERVICES 500,000 Penn Financial Corp.,
9.25% due 12/15/2003.... 498,750 465,000 0.6
Reliance Group Holdings,
Inc.:
500,000 9.00% due 11/15/2000...... 460,000 455,000 0.6
500,000 9.75% due 11/15/2003...... 507,500 452,500 0.6
----------- ----------- ----------
1,466,250 1,372,500 1.8
FOOD & BEVERAGE 500,000 Chiquita Brands
International Corp.,
9.125% due 3/01/2004.... 497,500 460,000 0.6
250,000 Coca-Cola Bottling Co.,
9.00% due 11/15/2003.... 250,625 227,500 0.3
500,000 Cumberland Farms, 10.50%
due 10/01/2003.......... 489,375 447,500 0.6
750,000 Del Monte Corp., 10.00%
due 5/01/2003........... 740,000 682,500 0.9
500,000 Grand Union Co., 12.25%
due 7/15/2002........... 519,938 483,750 0.6
500,000 Heileman Acquisition Co.,
9.625% due 1/31/2004.... 497,188 456,250 0.6
300,000 Penn Traffic Co., 9.625%
due 4/15/2005........... 309,000 282,000 0.4
500,000 Pueblo Xtra International
Inc., 9.50% due
8/01/2003............... 500,938 450,000 0.6
250,000 Specialty Foods Corp.,
10.25% due 8/15/2001.... 250,000 226,250 0.3
----------- ----------- ----------
4,054,564 3,715,750 4.9
HOME BUILDING 500,000 Del E. Webb Corp., 9.00%
due 2/15/2006........... 500,000 432,500 0.6
250,000 Ryland Group, Inc., 9.625%
due 6/01/2004........... 250,000 233,750 0.3
----------- ----------- ----------
750,000 666,250 0.9
HOTELS & CASINOS 500,000 Aztar Corp., 11.00% due
10/01/2002.............. 507,813 470,000 0.6
1,000,000 Bally's Park Place
Funding, Inc., 9.25% due
3/15/2004............... 920,000 890,000 1.1
1,100,000 Greater Bay Properties,
Inc., Property Funding
Corp., 10.875% due
1/15/2004............... 990,750 880,000 1.1
500,000 Host Marriott Hospitality
Corp., 10.375% due
6/15/2011............... 510,625 500,000 0.6
1,000,000 JQ Hammons Hotel, 8.875%
due 2/15/2004........... 887,500 890,000 1.1
250,000 Mirage Resorts Inc., 9.25%
due 3/15/2003........... 248,750 238,750 0.3
500,000 Showboat, Inc., 9.25% due
5/01/2008............... 506,250 447,500 0.6
750,000 Trump Plaza Funding, Inc.,
10.875% due 6/15/2001... 741,250 615,000 0.8
101,626 Trump Taj Mahal Funding,
Inc., 11.35% due
11/15/1999 (a).......... 95,372 80,843 0.1
----------- ----------- ----------
5,408,310 5,012,093 6.3
</TABLE>
69
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.--WORLD INCOME FOCUS
SCHEDULE OF INVESTMENTS AS OF JUNE 30, 1994 (CONTINUED) (IN US DOLLARS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NORTH AMERICA VALUE PERCENT OF
(CONCLUDED) INDUSTRY FACE AMOUNT FIXED-INCOME INVESTMENTS COST (NOTE 1A) NET ASSETS
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
UNITED STATES INDUSTRIAL SERVICES US$ 750,000 ADT Operations, 9.25% due
(CONCLUDED) 8/01/2003............... $ 754,188 $ 699,375 0.9%
METALS & MINING 250,000 Maxxam Group, Inc.,
12.48%* due 8/01/2003 145,713 153,750 0.2
PAPER & FOREST 250,000 Container Corp. of
PRODUCTS America, 9.75% due
4/01/2003............... 255,000 237,500 0.3
500,000 Fort Howard Corp., 9.00%
due 2/01/2006........... 500,000 425,000 0.6
250,000 Riverwood International
Corp., 11.25% due
6/15/2002............... 274,812 258,750 0.3
100,000 Stone Container Group,
9.875% due 2/01/2001.... 95,250 92,750 0.1
----------- ----------- ----------
1,125,062 1,014,000 1.3
POLLUTION CONTROL 500,000 Mid-American Waste System,
Inc., 12.25% due
2/15/2003............... 511,250 508,125 0.7
RESTAURANTS & FOOD 750,000 Flagstar Corp., 11.375%
SERVICES due 9/15/2003
Foodmaker, Inc.: 762,500 682,500 0.9
250,000 9.75% due 6/01/2002....... 251,250 223,750 0.3
250,000 9.75% due 11/01/2003...... 246,562 218,438 0.3
----------- ----------- ----------
1,260,312 1,124,688 1.5
STEEL 500,000 AK Steel Holding
Corporation, 10.75% due
4/01/2004............... 500,000 501,250 0.6
500,000 WCI Steel Inc., 10.50% due
3/01/2002............... 500,000 505,000 0.7
----------- ----------- ----------
1,000,000 1,006,250 1.3
TEXTILES 1,000,000 WestPoint Stevens Inc.,
9.375% due 12/15/2005... 995,625 905,000 1.2
TRANSPORT SERVICES 250,000 Eletson Holdings Inc.,
9.25% due 11/15/2003.... 250,000 241,563 0.3
1,050,000 Transtar Holdings, 12.12%*
due 12/15/2003.......... 597,351 569,625 0.7
250,000 Viking Star Shipping Co.,
9.625% due 7/15/2003.... 250,937 245,000 0.3
----------- ----------- ----------
1,098,288 1,056,188 1.3
US GOVERNMENT & 2,000,000 US Treasury Note, 6.25%
AGENCY OBLIGATIONS due 8/15/2023........... 1,961,406 1,680,620 2.2
UTILITIES 500,000 Beaver Valley Funding
Corp., 9.00% due
6/01/2017............... 471,875 410,000 0.5
92,218 Midland Funding Corp. II,
10.33% due 7/23/2002.... 96,137 91,172 0.1
250,000 Texas-New Mexico Power
Co., 9.25% due 9/15/2000 250,000 249,457 0.3
233,382 + Tucson Electric Power Co.,
10.732% due 1/01/2013... 223,464 218,213 0.3
----------- ----------- ----------
1,041,476 968,842 1.2
TOTAL FIXED-INCOME
INVESTMENTS IN THE
UNITED STATES........... 38,027,719 35,477,728 45.7
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SHARES HELD CONVERTIBLE PREFERRED STOCKS
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
UNITED STATES BROADCASTING & 9,000 K-III Communications Corp.
PUBLISHING (Preferred)............. 245,250 237,375 0.3
TOTAL CONVERTIBLE
PREFERRED STOCKS IN
THE UNITED STATES 245,250 237,375 0.3
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
TOTAL INVESTMENTS IN NORTH
AMERICAN SECURITIES..... 42,737,672 39,747,385 51.2
</TABLE>
- --------------------------------------------------------------------------------
70
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.--WORLD INCOME FOCUS
SCHEDULE OF INVESTMENTS AS OF JUNE 30, 1994 (CONTINUED) (IN US DOLLARS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PACIFIC VALUE PERCENT OF
BASIN INDUSTRY FACE AMOUNT FIXED-INCOME INVESTMENTS COST (NOTE 1A) NET ASSETS
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
AUSTRALIA FOREIGN GOVERNMENT Australia Government
OBLIGATIONS-- A $ 2,400,000 Bonds:
9.50% due 8/15/2003..... $ 2,078,939 $ 1,738,909 2.2%
REGIONAL & AGENCY 2,700,000 9.00% due 9/15/2004....... 1,953,021 1,888,442 2.4
1,000,000 Queensland Treasury Corp.,
Global Notes, 8.00% due
7/14/1999............... 681,815 691,236 0.9
----------- ----------- ----------
4,713,775 4,318,587 5.5
TOTAL FIXED-INCOME
INVESTMENTS IN AUSTRALIA 4,713,775 4,318,587 5.5
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
TOTAL INVESTMENTS IN
PACIFIC BASIN SECURITIES 4,713,775 4,318,587 5.5
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
WESTERN EUROPE
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
DENMARK FOREIGN GOVERNMENT Denmark Government Bonds:
OBLIGATIONS Dkr 9,500,000 6.00% due 12/10/1999.... 1,401,116 1,393,536 1.8
2,000,000 9.00% due 11/15/2000...... 344,014 332,879 0.4
17,000,000 7.00% due 12/15/2004...... 2,607,737 2,470,004 3.2
----------- ----------- ----------
4,352,867 4,196,419 5.4
TOTAL FIXED-INCOME
INVESTMENTS IN DENMARK 4,352,867 4,196,419 5.4
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
HUNGARY FOREIGN GOVERNMENT US $ 250,000 National Bank of Hungary,
OBLIGATIONS 8.80% due 10/01/2002.... 227,500 220,365 0.3
TOTAL FIXED-INCOME
INVESTMENTS IN HUNGARY 227,500 220,365 0.3
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ITALY FOREIGN GOVERNMENT Buoni Poliennali del
OBLIGATIONS Tesoro (Italian
Government Bonds): 9.00%
Lit 3,600,000,000 due 10/01/1998.......... 2,179,660 2,169,816 2.7
1,000,000,000 8.50% due 4/01/2099....... 618,075 588,049 0.8
----------- ----------- ----------
2,797,735 2,757,865 3.5
TOTAL FIXED-INCOME
INVESTMENTS IN ITALY 2,797,735 2,757,865 3.5
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SPAIN FOREIGN GOVERNMENT Government of Spain:
OBLIGATIONS Pta 200,000,000 9.00% due 2/28/1997..... 1,432,931 1,496,686 1.9
300,000,000 8.30% due 12/15/1998...... 2,159,228 2,106,286 2.7
----------- ----------- ----------
3,592,159 3,602,972 4.6
TOTAL FIXED-INCOME
INVESTMENTS IN SPAIN 3,592,159 3,602,972 4.6
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Government of Sweden:
SWEDEN FOREIGN GOVERNMENT Skr 3,000,000 11.00% due 1/21/1999.... 428,399 410,766 0.5
OBLIGATIONS--
REGIONAL & AGENCY
11,000,000 10.25% due 5/05/2003...... 1,525,106 1,453,120 1.9
10,000,000 SBAB, 11.00% due
1/21/1999............... 1,395,026 1,336,521 1.7
----------- ----------- ----------
3,348,531 3,200,407 4.1
TOTAL FIXED-INCOME
INVESTMENTS IN SWEDEN 3,348,531 3,200,407 4.1
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
UNITED KINGDOM FOREIGN GOVERNMENT Pound United Kingdom Gilt:
OBLIGATIONS Sterling 350,000 6.00% due 8/10/1999..... 490,939 492,449 0.7
2,400,000 7.00% due 11/06/2001...... 3,648,630 3,375,634 4.3
1,000,000 8.00% due 6/10/2003....... 1,503,988 1,491,407 1.9
----------- ----------- ----------
5,643,557 5,359,490 6.9
TOTAL FIXED-INCOME
INVESTMENTS IN THE
UNITED KINGDOM 5,643,557 5,359,490 6.9
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
TOTAL INVESTMENTS IN
WESTERN EUROPEAN
SECURITIES.............. 19,962,349 19,337,518 24.8
</TABLE>
- --------------------------------------------------------------------------------
71
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.--WORLD INCOME FOCUS
SCHEDULE OF INVESTMENTS AS OF JUNE 30, 1994 (CONCLUDED) (IN US DOLLARS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE PERCENT OF
FACE AMOUNT SHORT-TERM SECURITIES COST (NOTE 1A) NET ASSETS
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
COMMERCIAL PAPER** US$ 2,807,000 General Electric Capital
Corp., 4.30% due
7/01/1994............. $ 2,807,000 $ 2,807,000 3.6%
3,000,000 Federal Farm Credit
Bank,
US GOVERNMENT 4.15% due 7/11/1994... 2,996,542 2,996,542 3.9
& AGENCY
OBLIGATIONS**
3,000,000 Federal Home Loan
Mortgage Association,
4.25% due 7/22/1994... 2,992,562 2,992,562 3.8
----------- ----------- ----------
5,989,104 5,989,104 7.7
TOTAL SHORT-TERM SECURITIES................ 8,796,104 8,796,104 11.3
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
TOTAL INVESTMENTS $79,366,000 75,107,969 96.5
-----------
-----------
UNREALIZED DEPRECIATION ON FOWARD FOREIGN
EXCHANGE CONTRACTS*** (78,784) (0.1)
OTHER ASSETS LESS LIABILITIES 2,833,612 3.6
----------- ----------
NET ASSETS $77,862,797 100.0%
----------- ----------
----------- ----------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
(a) Each $1,000 face amount contains one non-detachable share of Taj Mahal Holding Corp.'s Class B redeemable Common
Stock.
* Represents the yield to maturity.
** Commercial Paper and certain US Government & Agency Obligations are traded on a discount basis; the interest rates
shown are the discount rates paid at the time of purchase by the Fund.
</TABLE>
***Forward foreign exchange contracts as of June 30, 1994 were as follows:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EXPIRATION UNREALIZED APPRECIATION
FOREIGN CURRENCY PURCHASED DATE (DEPRECIATION)
- --------------------------------------------------------------------------------
<S> <C> <C>
A$ 3,593,609 July 1994 $ 23,457
C$ 1,380,300 July 1994 (1,463)
DM 9,218,465 July 1994 193,750
Lit 1,939,020,000 July 1994 (8,904)
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
TOTAL (US$ COMMITMENT--$10,438,301) $ 206,840
------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
UNREALIZED
EXPIRATION APPRECIATION
FOREIGN CURRENCY SOLD DATE (DEPRECIATION)
- --------------------------------------------------------------------------------
<S> <C> <C>
A$ 4,311,337 July 1994 (23,471)
C$ 1,985,737 July 1994 7,940
DM 20,752,231 July 1994 (273,585)
Dkr 14,067,094 July 1994 460
Pound Sterling 633,564 July 1994 (14,709)
Lit 995,002,400 July 1994 5,194
Pta 65,070,400 July 1994 (20,149)
Pta 203,000,548 August 1994 14,346
Skr 23,790,537 July 1994 18,350
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
TOTAL (US$ COMMITMENT--$26,339,719) $ (285,624)
------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
TOTAL UNREALIZED DEPRECIATION ON
FORWARD FOREIGN EXCHANGE CONTRACTS--NET $ (78,784)
------------
------------
</TABLE>
- --------------------------------------------------------------------------------
+Restricted securities as to resale.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ACQUISITION VALUE
ISSUE DATE COST (NOTE 1A)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Tucson Electric Power Co.,
10.732% due 1/01/2013.......................................................... 8/03/1993 $ 223,464 $ 218,213
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
$ 223,464 218,213
--------- ----------
---------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
++Other restricted securities.................................................... 748,000
----------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
TOTAL RESTRICTED SECURITIES--1.24%............................................... $ 966,213
----------
----------
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
72
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.
STATEMENTS OF ASSETS AND LIABILITIES AS OF JUNE 30, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
BASIC DEVELOPING DOMESTIC
AMERICAN VALUE CAPITAL MONEY
BALANCED FOCUS MARKETS MARKET
FUND FUND FOCUS FUND FUND
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS:
Investments, at value* (Note 1a).............................. $147,660,410 $119,532,272 $ 12,645,593 $ 329,732,816
Cash.......................................................... 20,409 -- 193,954 11,026
Interest receivable........................................... 1,328,809 -- 8,444 269,893
Dividends receivable.......................................... 190,579 326,188 1,631 --
Receivable for securities sold................................ -- -- -- --
Receivable for capital shares sold............................ 880,391 2,199,206 675,614 --
Receivable from investment adviser (Note 2)................... -- -- -- --
Deferred organization expenses (Note 1f)...................... -- -- 10,651 4,020
Prepaid registration fees and other assets (Note 1f).......... 1,271 3,600 10,372 9,878
Foreign cash.................................................. -- -- -- --
------------ ------------ ------------ --------------
Total assets................................................ 150,081,869 122,061,266 13,546,259 330,027,633
------------ ------------ ------------ --------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
LIABILITIES:
Call options written, at value (premiums received--$126,624)
(Notes 1a & 1c)............................................. -- -- -- --
Payable for capital shares redeemed........................... 115,403 21,393 195 --
Payable for securities purchased.............................. -- 4,776,756 209,977 --
Payable to investment adviser (Note 2)........................ 67,768 55,905 6,912 91,989
Accrued expenses and other liabilities........................ 10,462 101,316 7,531 19,155
------------ ------------ ------------ --------------
Total liabilities........................................... 193,633 4,955,370 224,615 111,144
------------ ------------ ------------ --------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
NET ASSETS.................................................... $149,888,236 $117,105,896 $ 13,321,644 $ 329,916,489
------------ ------------ ------------ --------------
------------ ------------ ------------ --------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
NET ASSETS CONSIST OF:
Common Stock, $0.10 par value+................................ $ 1,139,934 $ 1,111,101 $ 137,153 $ 33,004,238
Paid-in capital in excess of par.............................. 151,493,579 118,658,235 13,551,426 297,038,139
Undistributed (overdistributed) investment income
(loss)--net................................................. 2,444,878 774,128 36,623 --
Undistributed (accumulated) realized capital gains (losses) on
investment and foreign currency transactions--net (Note
5).......................................................... 64,542 1,606,558 (633) --
Unrealized appreciation/depreciation on investments and
foreign
currency transactions--net.................................. (5,254,697) (5,044,126) (402,925) (125,888)
------------ ------------ ------------ --------------
NET ASSETS.................................................... $149,888,236 $117,105,896 $ 13,321,644 $ 329,916,489
------------ ------------ ------------ --------------
------------ ------------ ------------ --------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
CAPITAL SHARES OUTSTANDING.................................... 11,399,341 11,111,014 1,371,532 330,042,377
------------ ------------ ------------ --------------
------------ ------------ ------------ --------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE...... $ 13.15 $ 10.54 $ 9.71 $ 1.00
------------ ------------ ------------ --------------
------------ ------------ ------------ --------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
* Identified cost............................................. $152,915,107.. $124,576,398.. $13,048,518.. $329,858,704...
------------ ------------ ------------ --------------
------------ ------------ ------------ --------------
+ Authorized shares........................................... 100,000,000 100,000,000 100,000,000 1,300,000,000
------------ ------------ ------------ --------------
------------ ------------ ------------ --------------
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
73
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.
STATEMENTS OF ASSETS AND LIABILITIES AS OF JUNE 30, 1994 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GLOBAL GLOBAL
FLEXIBLE STRATEGY UTILITY
EQUITY STRATEGY FOCUS FOCUS
GROWTH FUND FUND FUND FUND
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS:
Investments, at value* (Note 1a).............................. $141,909,660 $249,165,193 $450,166,615 $ 135,396,568
Cash.......................................................... -- 430,888 93,704 95,855
Interest receivable........................................... -- 567,873 2,108,090 33,062
Dividends receivable.......................................... 44,270 194,178 898,106 309,672
Receivable for securities sold................................ 522,003 970,108 -- --
Receivable for capital shares sold............................ 1,619,197 2,417,859 7,316,099 343,964
Receivable from investment adviser (Note 2)................... -- -- -- --
Deferred organization expenses (Note 1f)...................... -- -- 4,020 5,002
Prepaid registration fees and other assets (Note 1f).......... 1,288 4,815 690 --
Foreign cash.................................................. -- -- 1,184,246 --
------------ ------------ ------------ --------------
Total assets................................................ 144,096,418 253,750,914 461,771,570 136,184,123
------------ ------------ ------------ --------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
LIABILITIES:
Call options written, at value (premiums received--$126,624)
(Notes 1a & 1c)............................................. -- -- -- --
Payable for capital shares redeemed........................... 85,125 489,192 -- 118,104
Payable for securities purchased.............................. 4,437,575 3,976,365 5,315,476 544,086
Payable to investment adviser (Note 2)........................ 86,727 131,949 234,717 67,468
Accrued expenses and other liabilities........................ 170,861 43,747 20,055 28,233
------------ ------------ ------------ --------------
Total liabilities........................................... 4,780,288 4,641,253 5,570,248 757,891
------------ ------------ ------------ --------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
NET ASSETS.................................................... $139,316,130 $249,109,661 $456,201,322 $ 135,426,232
------------ ------------ ------------ --------------
------------ ------------ ------------ --------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
NET ASSETS CONSIST OF:
Common Stock, $0.10 par value+................................ $ 757,458 $ 1,712,405 $ 3,784,999 $ 1,404,239
Paid-in capital in excess of par.............................. 143,977,336 240,632,663 442,263,433 143,347,838
Undistributed (overdistributed) investment income
(loss)--net................................................. (874,656) 2,234,624 4,965,870 1,158,796
Undistributed (accumulated) realized capital gains (losses) on
investment and foreign currency transactions--net (Note
5).......................................................... 2,061,062 6,815,710 952,261 (230,278)
Unrealized appreciation/depreciation on investments and
foreign
currency transactions--net.................................. (6,605,070) (2,285,741) 4,234,759 (10,254,363)
------------ ------------ ------------ --------------
NET ASSETS.................................................... $139,316,130 $249,109,661 $456,201,322 $ 135,426,232
------------ ------------ ------------ --------------
------------ ------------ ------------ --------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
CAPITAL SHARES OUTSTANDING.................................... 7,574,582 17,124,049 37,849,989 14,042,385
------------ ------------ ------------ --------------
------------ ------------ ------------ --------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE...... $ 18.39 $ 14.55 $ 12.05 $ 9.64
------------ ------------ ------------ --------------
------------ ------------ ------------ --------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
* Identified cost............................................. $148,514,730.. $251,453,626.. $445,925,992.. $145,651,502...
------------ ------------ ------------ --------------
------------ ------------ ------------ --------------
+ Authorized shares........................................... 100,000,000 100,000,000 100,000,000 100,000,000
------------ ------------ ------------ --------------
------------ ------------ ------------ --------------
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
74
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.
STATEMENTS OF ASSETS AND LIABILITIES AS OF JUNE 30, 1994 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
HIGH INTERMEDIATE
CURRENT GOVERNMENT INTERNATIONAL INTERNATIONAL
INCOME BOND BOND EQUITY FOCUS
FUND FUND FUND FUND
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS:
Investments, at value* (Note 1a).............................. $235,019,847 $ 4,415,632 $ 6,294,650 $ 181,540,217
Put options purchased, at value (cost--$659,717) (Notes 1a &
1c)......................................................... -- -- -- 343,493
Variation margin on stock index futures contracts (Note 1h)... -- -- -- 446,875
Cash.......................................................... -- 451 7,997 3,905,287
Receivable for options written................................ -- -- -- 16,500
Interest receivable........................................... 5,124,561 -- 99,241 63,373
Dividends receivable.......................................... -- -- -- 316,049
Receivable for securities sold................................ 2,258,160 -- -- 1,514,146
Receivable for capital shares sold............................ 1,821,556 613,655 224,699 2,835,381
Receivable from investment adviser (Note 2)................... -- 2,385 4,335 --
Receivable for forward foreign exchange contracts (Note 1b)... -- -- -- 84,878
Deferred organization expenses (Note 1f)...................... -- -- 3,467 6,246
Prepaid registration fees and other assets (Note 1f).......... 11,483 12,090 6,700 --
Foreign cash.................................................. -- -- -- 2,220,342
------------ ------------ ------------ --------------
Total assets.................................................. 244,235,607 5,044,213 6,641,089 193,292,787
------------ ------------ ------------ --------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
LIABILITIES:
Call options written, at value (premiums received--$126,624)
(Notes 1a & 1c)............................................. -- -- -- 23,749
Unrealized depreciation on forward exchange contracts (Note
1b)......................................................... -- -- 25,669 2,495,311
Payable for capital shares redeemed........................... 75,502 12 191 9,228
Payable for securities purchased.............................. 2,525,295 -- 274,766 3,845,507
Payable to investment adviser (Note 2)........................ 88,343 -- -- 110,015
Payable for options purchased................................. -- -- -- 45,300
Accrued expenses and other liabilities........................ 1,802,561 -- 121,967 27,417
------------ ------------ ------------ --------------
Total liabilities........................................... 4,491,701 12 422,593 6,556,527
------------ ------------ ------------ --------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
NET ASSETS.................................................... $239,743,906 $ 5,044,201 $ 6,218,496 $ 186,736,260
------------ ------------ ------------ --------------
------------ ------------ ------------ --------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
NET ASSETS CONSIST OF:
Common Stock, $0.10 par value+................................ $ 2,135,628 $ 50,285 $ 63,405 $ 1,687,288
Paid-in capital in excess of par.............................. 247,450,355 4,984,463 6,256,448 181,909,300
Undistributed (overdistributed) investment income
(loss)--net................................................. 1,784,501 9,453 31,773 (109,743)
Undistributed (accumulated) realized capital gains (losses) on
investment and foreign currency transactions--net (Note
5).......................................................... 369,084 -- (86,900) 3,067,920
Unrealized appreciation/depreciation on investments and
foreign
currency transactions--net.................................. (11,995,662) -- (46,230) 181,495
------------ ------------ ------------ --------------
NET ASSETS.................................................... $239,743,906 $ 5,044,201 $ 6,218,496 $ 186,736,260
------------ ------------ ------------ --------------
------------ ------------ ------------ --------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
CAPITAL SHARES OUTSTANDING.................................... 21,356,278 502,845 634,045 16,872,884
------------ ------------ ------------ --------------
------------ ------------ ------------ --------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE...... $ 11.23 $ 10.03 $ 9.81 $ 11.07
------------ ------------ ------------ --------------
------------ ------------ ------------ --------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
* Identified cost............................................. $247,015,509.. $4,415,632... $6,317,386... $178,839,980...
------------ ------------ ------------ --------------
------------ ------------ ------------ --------------
+ Authorized shares........................................... 100,000,000 100,000,000 100,000,000 100,000,000
------------ ------------ ------------ --------------
------------ ------------ ------------ --------------
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
75
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.
STATEMENTS OF ASSETS AND LIABILITIES AS OF JUNE 30, 1994 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NATURAL
RESOURCES PRIME QUALITY
FOCUS BOND EQUITY
FUND FUND FUND
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS:
Investments, at value* (Note 1a).............................................. $ 26,518,557 $385,638,826 $395,740,881
Cash.......................................................................... 702 2,659,127 3,376,287
Interest receivable........................................................... -- 5,247,951 --
Dividends receivable.......................................................... 40,321 -- 339,857
Receivable for securities sold................................................ -- 1,048,740 278,425
Receivable for capital shares sold............................................ 344,924 2,172,337 4,138,467
Receivable from investment adviser (Note 2)................................... -- -- --
Prepaid registration fees and other assets (Note 1f).......................... 268 14,741 5,147
Foreign cash.................................................................. -- -- --
------------ ------------ ------------
Total assets................................................................ 26,904,772 396,781,722 403,879,064
------------ ------------ ------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
LIABILITIES:
Call options written, at value (premiums received--$126,624) (Notes 1a &
1c)......................................................................... -- -- --
Payable for capital shares redeemed........................................... 552 89,994 121,737
Payable for securities purchased.............................................. 173,424 14,252,726 5,986,730
Payable to investment adviser (Note 2)........................................ 13,852 123,582 162,712
Accrued expenses and other liabilities........................................ 4,463 58,009 37,333
------------ ------------ ------------
Total liabilities........................................................... 192,291 14,524,311 6,308,512
------------ ------------ ------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
NET ASSETS.................................................................... $ 26,712,481 $382,257,411 $397,570,552
------------ ------------ ------------
------------ ------------ ------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
NET ASSETS CONSIST OF:
Common Stock, $0.10 par value+................................................ $ 250,075 $ 3,339,371 $ 1,477,510
Paid-in capital in excess of par.............................................. 26,990,527 405,959,269 382,311,445
Undistributed (overdistributed) investment income (loss)--net................. 235,505 1,987,037 2,234,307
Undistributed (accumulated) realized capital gains (losses) on investment and
foreign currency transactions--net (Note 5)................................. (55,816) (8,173,965) 10,454,287
Unrealized appreciation/depreciation on investments and foreign currency
transactions--net........................................................... (707,810) (20,854,301) 1,093,003
------------ ------------ ------------
NET ASSETS.................................................................... $ 26,712,481 $382,257,411 $397,570,552
------------ ------------ ------------
------------ ------------ ------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
CAPITAL SHARES OUTSTANDING.................................................... 2,500,753 33,393,716 14,775,105
------------ ------------ ------------
------------ ------------ ------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE...................... $ 10.68 $ 11.45 $ 26.91
------------ ------------ ------------
------------ ------------ ------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
* Identified cost............................................................. $27,226,683.. $406,493,127.. $394,647,878..
------------ ------------ ------------
------------ ------------ ------------
+ Authorized shares........................................................... 100,000,000 100,000,000 100,000,000
------------ ------------ ------------
------------ ------------ ------------
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
76
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.
STATEMENTS OF ASSETS AND LIABILITIES AS OF JUNE 30, 1994 (CONCLUDED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RESERVE WORLD INCOME
ASSETS FOCUS
FUND FUND
- --------------------------------------------------------------------------------
<S> <C> <C>
ASSETS:
Investments, at value* (Note 1a)............................................................ $ 35,843,201 $ 75,107,969
Cash........................................................................................ 6,337 --
Interest receivable......................................................................... 51,271 1,653,170
Dividends receivable........................................................................ -- 25,168
Receivable for securities sold.............................................................. -- 2,349,578
Receivable for capital shares sold.......................................................... -- 454,368
Receivable from investment adviser (Note 2)................................................. -- --
Prepaid registration fees and other assets (Note 1f)........................................ 2,172 7,099
Foreign cash................................................................................ -- --
------------ ------------
Total assets.............................................................................. 35,902,981 79,597,352
------------ ------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
LIABILITIES:
Call options written, at value (premium received--$126,624) (Notes 1a & 1c)................. -- --
Unrealized depreciation on forward foreign exchange contracts............................... -- 78,784
Payable for capital shares redeemed......................................................... -- 124,089
Payable for securities purchased............................................................ -- 1,462,879
Payable to investment adviser (Note 2)...................................................... 14,729 37,781
Accrued expenses and other liabilities...................................................... 6,874 31,022
------------ ------------
Total liabilities......................................................................... 21,603 1,734,555
------------ ------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
NET ASSETS.................................................................................. $ 35,881,378 $ 77,862,797
------------ ------------
------------ ------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
NET ASSETS CONSIST OF:
Common Stock, $0.10 par value+.............................................................. $ 3,590,731 $ 816,525
Paid-in capital in excess of par............................................................ 32,316,579 81,650,329
Undistributed (overdistributed) investment income (loss)--net............................... -- 384,569
Undistributed (accumulated) realized capital gains (losses) on investment and foreign
currency transactions--net (Note 5)....................................................... -- (664,201)
Unrealized appreciation/depreciation on investments and foreign currency
transactions--net......................................................................... (25,932) (4,324,425)
------------ ------------
NET ASSETS.................................................................................. $ 35,881,378 $ 77,862,797
------------ ------------
------------ ------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
CAPITAL SHARES OUTSTANDING.................................................................. 35,907,310 8,165,250
------------ ------------
------------ ------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE.................................... $ 1.00 $ 9.54
------------ ------------
------------ ------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
* Identified cost........................................................................... $ 35,869,134 $ 79,366,000
------------ ------------
------------ ------------
+ Authorized shares......................................................................... 500,000,000 100,000,000
------------ ------------
------------ ------------
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
77
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.
STATEMENTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DEVELOPING
BASIC CAPITAL
AMERICAN VALUE MARKETS DOMESTIC
BALANCED FOCUS FOCUS MONEY MARKET
FUND FUND FUND+ FUND
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME (NOTES 1D & 1E):
Interest and discount earned*................................. $ 2,008,648 $ 194,796 $ 40,722 $ 4,368,751
Dividends**................................................... 857,990 878,939 15,722 --
Other income.................................................. 162 -- -- --
------------ ------------ --------------- ------------
Total income.................................................. 2,866,800 1,073,735 56,444 4,368,751
------------ ------------ --------------- ------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
EXPENSES:
Investment advisory fees (Note 2)............................. 369,345 247,530 15,857 573,998
Transfer agent fees (Note 2).................................. 1,911 1,935 746 1,905
Custodian fees................................................ 9,494 13,841 4,535 8,367
Professional fees............................................. 5,564 4,073 31 5,980
Registration fees (Note 1f)................................... 12,743 16,212 1,527 22,212
Directors' fees and expenses.................................. 1,370 282 309 1,867
Accounting services (Note 2).................................. 17,015 9,689 108 25,356
Pricing services.............................................. 709 -- 68 --
Amortization of organization expenses (Note 1f)............... -- -- 75 494
Other......................................................... 3,765 3,454 656 3,280
------------ ------------ --------------- ------------
Total expenses before reimbursement........................... 421,916 297,016 23,912 643,459
Reimbursement of expenses (Note 2)............................ -- -- (4,091) (172,199)
------------ ------------ --------------- ------------
Expenses after reimbursement.................................. 421,916 297,016 19,821 471,260
------------ ------------ --------------- ------------
Investment income--net........................................ 2,444,884 776,719 36,623 3,897,491
------------ ------------ --------------- ------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
REALIZED & UNREALIZED GAIN (LOSS) ON INVESTMENTS & FOREIGN
CURRENCY TRANSACTIONS--NET (NOTES 1B, 1E & 3):
Realized gain (loss) on investments--net...................... 64,688 1,691,171 (2) 4,276
Realized gain (loss) on foreign currency transactions--net.... -- -- (631) --
Change in unrealized appreciation/depreciation on
investments--net............................................ (10,084,558) (6,648,292) (402,925) (128,622)
Change in unrealized appreciation/depreciation on foreign
currency transactions--net.................................. -- -- -- --
------------ ------------ --------------- ------------
Total realized and unrealized gain (loss) on investments and
foreign currency transactions--net.......................... (10,019,870) (4,957,121) (403,558) (124,346)
------------ ------------ --------------- ------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS.................................................. $ (7,574,986) $ (4,180,402) $ (366,935) $ 3,773,145
------------ ------------ --------------- ------------
------------ ------------ --------------- ------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
* Net of withholding tax on interest......................... $ -- $ -- $ -- $ --
------------ ------------ --------------- ------------
------------ ------------ --------------- ------------
** Net of withholding tax on dividends........................ $ -- $ 1,596 $ 42 $ --
------------ ------------ --------------- ------------
------------ ------------ --------------- ------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
+ The Fund commenced operations on May 2, 1994.
</TABLE>
See Notes to Financial Statements
78
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.
STATEMENTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1994 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GLOBAL
FLEXIBLE GLOBAL STRATEGY UTILITY
EQUITY STRATEGY FOCUS FOCUS
GROWTH FUND FUND FUND FUND
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME (NOTES 1D & 1E):
Interest and discount earned*................................. $ 341,759 $ 2,264,000 $ 3,745,765 $ 653,391
Dividends**................................................... 198,155 1,027,595 2,625,547 1,848,781
Other income.................................................. -- -- 85 --
Total income.................................................. 539,914 3,291,595 6,371,397 2,502,172
------------ ------------ --------------- ------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
EXPENSES:
Investment advisory fees (Note 2)............................. 460,720 719,580 1,172,893 374,098
Transfer agent fees (Note 2).................................. 2,526 2,949 1,944 2,517
Custodian fees................................................ 13,360 31,088 96,557 31,317
Professional fees............................................. 4,670 8,081 6,286 5,604
Registration fees (Note 1f)................................... 16,088 16,614 45,645 15,176
Directors' fees and expenses.................................. 1,419 2,419 2,413 1,594
Accounting services (Note 2).................................. 16,042 29,206 34,314 19,823
Pricing services.............................................. -- 2,473 1,729 3,330
Amortization of organization expenses (Note 1f)............... -- -- 475 646
Other......................................................... 3,829 5,821 4,285 3,884
------------ ------------ --------------- ------------
Total expenses before reimbursement........................... 518,654 818,231 1,366,541 457,989
Reimbursement of expenses (Note 2)............................ -- -- -- --
------------ ------------ --------------- ------------
Expenses after reimbursement.................................. 518,654 818,231 1,366,541 457,989
------------ ------------ --------------- ------------
Investment income--net........................................ 21,260 2,473,364 5,004,856 2,044,183
------------ ------------ --------------- ------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
REALIZED & UNREALIZED GAIN (LOSS) ON INVESTMENTS & FOREIGN
CURRENCY TRANSACTIONS--NET (NOTES 1B, 1E & 3):
Realized gain (loss) on investments--net...................... 1,165,388 6,597,087 1,113,774 (243,674)
Realized gain (loss) on foreign currency transactions--net.... -- (19,581) (194,802) 12,809
Change in unrealized appreciation/depreciation on
investment--net............................................. (18,005,119) (24,157,068) (7,477,005) (12,820,124)
Change in unrealized appreciation/depreciation on foreign
currency transactions--net.................................. -- 8,631 6,690 (6,913)
------------ ------------ --------------- ------------
Total realized and unrealized gain (loss) on investments and
foreign currency transactions--net.......................... (16,839,731) (17,570,931) (6,551,343) (13,057,902)
------------ ------------ --------------- ------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS.................................................. $(16,818,471) $(15,097,567) $ (1,546,487) $(11,013,719)
------------ ------------ --------------- ------------
------------ ------------ --------------- ------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
* Net of withholding tax on interest......................... $ -- $ 3,161 $ 37,295 $ --
------------ ------------ --------------- ------------
------------ ------------ --------------- ------------
** Net of withholding tax on dividends........................ $ 5,111 $ 47,455 $ 248,175 $ 51,379
------------ ------------ --------------- ------------
------------ ------------ --------------- ------------
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements
79
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.
STATEMENTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1994 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
HIGH INTERMEDIATE
CURRENT GOVERNMENT INTERNATIONAL INTERNATIONAL
INCOME BOND BOND EQUITY FOCUS
FUND FUND+ FUND+ FUND
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME (NOTES 1D & 1E):
Interest and discount earned*................................. $ 9,238,674 $ 14,929 $ 47,351 $ 384,529
Dividends**................................................... 134,767 -- -- 1,121,492
Other income.................................................. 24,715 -- -- --
------------ ------------ --------------- ------------
Total income.................................................. 9,398,156 14,929 47,351 1,506,021
------------ ------------ --------------- ------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
EXPENSES:
Investment advisory fees (Note 2)............................. 538,531 2,354 5,211 503,317
Transfer agent fees (Note 2).................................. 2,537 519 716 1,724
Custodian fees................................................ 14,273 299 1,594 100,274
Professional fees............................................. 7,680 16 20 3,769
Registration fees (Note 1f)................................... 19,949 138 389 21,364
Directors' fees and expenses.................................. 2,114 169 100 870
Accounting services (Note 2).................................. 24,222 122 155 14,039
Pricing services.............................................. 6,653 50 68 5,494
Amortization of organization expenses (Note 1f)............... -- 1,025 103 2,136
Other......................................................... 3,427 47 1,190 2,930
------------ ------------ --------------- ------------
Total expenses before reimbursement........................... 619,386 4,739 9,546 655,917
Reimbursement of expenses (Note 2)............................ -- (4,739) (9,546) --
------------ ------------ --------------- ------------
Expenses after reimbursement.................................. 619,386 0 0 655,917
------------ ------------ --------------- ------------
Investment income--net........................................ 8,778,770 14,929 47,351 850,104
------------ ------------ --------------- ------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
REALIZED & UNREALIZED GAIN (LOSS) ON INVESTMENTS & FOREIGN
CURRENCY TRANSACTIONS--NET (NOTES 1B, 1E & 3):
Realized gain (loss) on investments--net...................... 486,869 -- (4,914) 5,066,287
Realized gain (loss) on foreign currency transactions--net.... -- -- (81,987) (2,052,227)
Change in unrealized appreciation/depreciation on
investment--net............................................. (16,166,983) -- (22,736) (964,590)
Change in unrealized appreciation/depreciation on foreign
currency transactions--net.................................. -- -- (23,494) (3,239,051)
------------ ------------ --------------- ------------
Total realized and unrealized gain (loss) on investments and
foreign currency transactions--net.......................... (15,680,114) -- (133,131) (1,189,581)
------------ ------------ --------------- ------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS.................................................. $ (6,901,344) $ 14,929 $ (85,780) $ (339,477)
------------ ------------ --------------- ------------
------------ ------------ --------------- ------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
* Net of withholding tax on interest.......................... $ -- $ -- $ 247 $ --
------------ ------------ --------------- ------------
------------ ------------ --------------- ------------
** Net of withholding tax on dividends........................ $ -- $ -- $ -- $ 144,366
------------ ------------ --------------- ------------
------------ ------------ --------------- ------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
+ The Fund commenced operations on May 2, 1994.
</TABLE>
See Notes to Financial Statements
80
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.
STATEMENTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1994 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NATURAL
RESOURCES PRIME QUALITY
FOCUS BOND EQUITY
FUND FUND FUND
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME (NOTES 1D & 1E):
Interest and discount earned*................................................. $ 56,430 $ 11,910,798 $ 1,119,364
Dividends**................................................................... 273,716 -- 2,108,723
Other income.................................................................. -- 25,933 --
------------ ------------ ------------
Total income.................................................................. 330,146 11,936,731 3,228,087
------------ ------------ ------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
EXPENSES:
Investment advisory fees (Note 2)............................................. 66,292 842,620 884,828
Transfer agent fees (Note 2).................................................. 2,065 1,595 2,260
Custodian fees................................................................ 10,684 20,613 19,363
Professional fees............................................................. 1,841 12,831 10,478
Registration fees (Note 1f)................................................... 2,352 20,864 24,729
Directors' fees and expenses.................................................. 587 3,803 3,164
Accounting services (Note 2).................................................. 7,291 52,177 43,006
Pricing services.............................................................. -- 7,362 255
Amortization of organization expenses (Note 1f)............................... -- -- --
Other......................................................................... 2,214 5,050 5,701
------------ ------------ ------------
Total expenses before reimbursement........................................... 93,326 966,915 993,784
Reimbursement of expenses (Note 2)............................................ -- -- --
------------ ------------ ------------
Expenses after reimbursement.................................................. 93,326 966,915 993,784
------------ ------------ ------------
Investment income--net........................................................ 236,820 10,969,816 2,234,303
------------ ------------ ------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
REALIZED & UNREALIZED GAIN (LOSS) ON INVESTMENTS & FOREIGN CURRENCY
TRANSACTIONS--NET (NOTES 1B, 1E & 3):
Realized gain (loss) on investments--net...................................... (4,571) (8,160,358) 11,087,378
Realized gain (loss) on foreign currency transactions--net.................... (1,685) -- 36
Change in unrealized appreciation/depreciation on investment--net............. (644,480) (22,338,756) (32,762,756)
Change in unrealized appreciation/depreciation on foreign currency
transactions--net........................................................... 336 -- --
------------ ------------ ------------
Total realized and unrealized gain (loss) on investments and foreign currency
transactions--net........................................................... (650,400) (30,499,114) (21,675,342)
------------ ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS............... $ (413,580) $(19,529,298) $(19,441,039)
------------ ------------ ------------
------------ ------------ ------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
* Net of withholding tax on interest.......................................... $ -- $ -- $ --
------------ ------------ ------------
------------ ------------ ------------
** Net of withholding tax on dividends........................................ $ 15,942 $ -- $ 55,915
------------ ------------ ------------
------------ ------------ ------------
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements
81
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.
STATEMENTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1994 (CONCLUDED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RESERVE WORLD INCOME
ASSETS FOCUS
FUND FUND
- --------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME (NOTES 1D & 1E):
Interest and discount earned*....................... $ 618,862 $ 2,658,823
Dividends**......................................... -- 6,469
Other income........................................ -- --
------------ ------------
Total income........................................ 618,862 2,665,292
------------ ------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
EXPENSES:
Investment advisory fees (Note 2)................... 81,751 196,934
Transfer agent fees (Note 2)........................ 1,677 2,918
Custodian fees...................................... 7,597 26,262
Professional fees................................... 2,855 5,170
Registration fees (Note 1f)......................... 1,182 12,064
Directors' fees and expenses........................ 612 1,178
Accounting services (Note 2)........................ 3,702 11,026
Pricing services.................................... -- 5,745
Amortization of organization expenses (Note 1f)..... -- 842
Other............................................... 3,244 4,938
------------ ------------
Total expenses before reimbursement................. 102,620 267,077
Reimbursement of expenses (Note 2).................. -- --
------------ ------------
Expenses after reimbursement........................ 102,620 267,077
------------ ------------
Investment income--net.............................. 516,242 2,398,215
------------ ------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
REALIZED & UNREALIZED GAIN (LOSS) ON INVESTMENTS &
FOREIGN CURRENCY TRANSACTIONS--NET (NOTES 1B, 1E
& 3):
Realized gain (loss) on investments--net............ 1,057 (572,907)
Realized gain (loss) on foreign currency
transactions--net................................ -- (166,485)
Change in unrealized appreciation/depreciation on
investment--net.................................. (33,009) (4,971,847)
Change in unrealized appreciation/depreciation on
foreign currency transactions--net............... -- (72,889)
------------ ------------
Total realized and unrealized gain (loss) on
investments and foreign currency
transactions--net................................ (31,952) (5,784,128)
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS....................................... $ 484,290 $ (3,385,913)
------------ ------------
------------ ------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
* Net of withholding tax interest................... $ -- $ 12,240
------------ ------------
------------ ------------
** Net of withholding tax on dividends.............. $ -- $ --
------------ ------------
------------ ------------
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements
82
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AMERICAN BALANCED FUND
FOR THE SIX
MONTHS ENDED FOR THE YEAR
JUNE 30, ENDED
INCREASE (DECREASE) IN NET ASSETS: 1994 DEC. 31, 1993
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
OPERATIONS:
Investment Income--net................................................................ $ 2,444,884 $ 1,898,709
Realized gain on investments and foreign currency transactions--net................... 64,688 381,401
Change in unrealized appreciation/depreciation on investments and foreign currency
transactions--net..................................................................... (10,084,558 ) 3,571,478
------------ -------------
Net increase (decrease) in net assets resulting from operations....................... (7,574,986 ) 5,851,588
------------ -------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
DIVIDENDS & DISTRIBUTIONS TO SHAREHOLDERS (NOTE 1G):
Investment income-net................................................................. (1,279,070 ) (975,251 )
Realized gain on investments--net..................................................... (382,404 ) (227,751 )
------------ -------------
Net decrease in net assets resulting from dividends and distributions to
shareholders.......................................................................... (1,661,474 ) (1,203,002 )
------------ -------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
CAPITAL SHARE TRANSACTIONS (NOTE 4):
Net increase in net assets derived from capital share transactions.................... 43,704,776 85,853,104
------------ -------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
NET ASSETS:
Total increase in net assets.......................................................... 34,468,316 90,501,690
Beginning of period................................................................... 115,419,920 24,918,230
------------ -------------
End of period*........................................................................ $149,888,236 $115,419,920
------------ -------------
------------ -------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
*Undistributed investment income--net................................................. $ 2,444,878 $ 1,279,064
------------ -------------
------------ -------------
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
83
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
BASIC VALUE FOCUS FUND
FOR THE SIX
MONTHS ENDED FOR THE PERIOD
JUNE 30, JULY 1, 1993+
INCREASE (DECREASE) IN NET ASSETS: 1994 TO DEC. 31, 1993
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
OPERATIONS:
Investment income--net.............................................................. $ 776,719 $ 153,585
Realized gain (loss) on investments and foreign currency transactions--net.......... 1,691,171 (84,612)
Change in unrealized appreciation/depreciation on investments and foreign currency
transactions--net................................................................... (6,648,292 ) 1,604,166
------------ ----------------
Net increase (decrease) in net assets resulting from operations..................... (4,180,402 ) 1,673,139
------------ ----------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
DIVIDENDS & DISTRIBUTIONS TO SHAREHOLDERS (NOTE 1G):
Investment income--net.............................................................. (156,176 ) --
Realized gain on investments--net................................................... -- --
------------ ----------------
Net decrease in net assets resulting from dividends and distributions to
shareholders........................................................................ (156,176 ) --
------------ ----------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
CAPITAL SHARE TRANSACTIONS (NOTE 4):
Net increase in net assets derived from capital share transactions.................. 74,235,211 43,534,024
------------ ----------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
NET ASSETS:
Total increase in net assets........................................................ 69,898,633 45,207,163
Beginning of period................................................................. 47,207,263 2,000,100
------------ ----------------
End of period*...................................................................... $117,105,896 $ 47,207,263
------------ ----------------
------------ ----------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
*Undistributed investment income--net............................................... $ 774,128 $ 153,585
------------ ----------------
------------ ----------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
+ Commencement of Operations.
</TABLE>
See Notes to Financial Statements.
84
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DOMESTIC MONEY
DEVELOPING CAPITAL MARKET FUND
MARKETS FOCUS FUND FOR THE SIX
FOR THE PERIOD MONTHS ENDED FOR THE YEAR
MAY 2, 1994+ JUNE 30, ENDED
TO JUNE 30, 1994 1994 DEC. 31, 1993
- ----------------------------------------------------------------------
<S> <C> <C> <C>
$ 36,623 $ 3,897,491 $ 2,754,970
(633) 4,276 41,187
(402,925) (128,622 ) (1,652)
- ------------------- ------------ ----------------
(366,935) 3,773,145 2,794,505
- ------------------- ------------ ----------------
</TABLE>
- ----------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
-- (3,897,491 ) (2,754,970)
-- (4,276 ) (41,187)
- ------------------- ------------ ----------------
-- (3,901,767 ) (2,796,157)
- ------------------- ------------ ----------------
</TABLE>
- ----------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
5,688,579 159,513,758 129,405,088
- ------------------- ------------ ----------------
</TABLE>
- ----------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
5,321,644 159,385,136 129,403,436
8,000,000 170,531,353 41,127,917
- ------------------- ------------ ----------------
$13,321,644 $329,916,489 $170,531,353
- ------------------- ------------ ----------------
- ------------------- ------------ ----------------
</TABLE>
- ----------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
$ 36,623 $ -- $ --
- ------------------- ------------ ----------------
- ------------------- ------------ ----------------
</TABLE>
- ----------------------------------------------------------------------
85
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EQUITY GROWTH FUND
FOR THE SIX
MONTHS ENDED FOR THE YEAR
JUNE 30, ENDED
1994 DEC. 31, 1993
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
OPERATIONS:
Investment Income (loss)--net....................................................... $ 21,260 $ (24,896)
Realized gain on investments and foreign currency transactions--net................. 1,165,388 3,639,264
Change in unrealized appreciation/depreciation on investments and foreign currency
transactions--net................................................................... (18,005,119) 7,724,322
------------ ----------------
Net increase (decrease) in net assets resulting from operations..................... (16,818,471 ) 11,338,690
------------ ----------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
DIVIDENDS & DISTRIBUTIONS TO SHAREHOLDERS (NOTE 1G):
Investment income--net.............................................................. (895,916 ) (5,834)
Realized gain on investments--net................................................... -- --
------------ ----------------
Net decrease in net assets resulting from dividends and distributions to
shareholders........................................................................ (895,916) (5,834)
------------ ----------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
CAPITAL SHARE TRANSACTIONS (NOTE 4):
Net increase in net assets derived from capital share transactions.................. 58,054,093 64,476,433
------------ ----------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
NET ASSETS:
Total increase in net assets........................................................ 40,339,706 75,809,289
Beginning of period................................................................. 98,976,424 23,167,135
------------ ----------------
End of period*...................................................................... $139,316,130 $ 98,976,424
------------ ----------------
------------ ----------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
*Undistributed (overdistributed) investment income (loss)--net...................... $ (874,656) $ --
------------ ----------------
------------ ----------------
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
86
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FLEXIBLE STRATEGY FUND GLOBAL STRATEGY FOCUS FUND
FOR THE SIX FOR THE SIX
MONTHS ENDED FOR THE YEAR MONTHS ENDED FOR THE YEAR
JUNE 30, ENDED JUNE 30, ENDED
1994 DEC. 31, 1993 1994 DEC. 31, 1993
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 2,473,364 $ 2,797,378 $ 5,004,856 $ 2,159,624
6,577,506 6,698,385 918,972 1,265,216
(24,148,437 ) 11,282,893 (7,470,315 ) 11,694,466
- ------------ ------------- ------------ -------------
(15,097,567 ) 20,778,656 (1,546,487 ) 15,119,306
- ------------ ------------- ------------ -------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
(1,823,953 ) (1,224,834 ) (1,801,945 ) (531,339 )
(6,450,352 ) (235,661 ) (1,216,451 ) --
- ------------ ------------- ------------ -------------
(8,274,305 ) (1,460,495 ) (3,018,396 ) (531,339 )
- ------------ ------------- ------------ -------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
77,705,017 92,909,143 191,139,024 239,511,867
- ------------ ------------- ------------ -------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
54,333,145 112,227,304 186,574,141 254,099,834
194,776,516 82,549,212 269,627,181 15,527,347
- ------------ ------------- ------------ -------------
$249,109,661 $194,776,516 $456,201,322 $269,627,181
- ------------ ------------- ------------ -------------
- ------------ ------------- ------------ -------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
$ 2,234,624 $ 1,585,213 $ 4,965,870 $ 1,762,959
- ------------ ------------- ------------ -------------
- ------------ ------------- ------------ -------------
</TABLE>
- --------------------------------------------------------------------------------
87
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GLOBAL UTILITY FOCUS FUND
FOR THE SIX
MONTHS ENDED FOR THE PERIOD
JUNE 30, JULY 1 1993+ TO
INCREASE (DECREASE) IN NET ASSETS: 1994 DEC. 31, 1993
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
OPERATIONS:
Investment income--net.............................................................. $ 2,044,183 $ 677,491
Realized gain (loss) on investments and foreign currency transactions--net.......... (230,865 ) 34,110
Change in unrealized appreciation/depreciation on investments and foreign currency
transactions--net................................................................... (12,827,037 ) 2,572,674
------------ ----------------
Net increase (decrease) in net assets resulting from operations..................... (11,013,719 ) 3,284,275
------------ ----------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
DIVIDENDS & DISTRIBUTIONS TO SHAREHOLDERS (NOTE 1G):
Investment income--net.............................................................. (1,443,970 ) (118,908)
Realized gain on investments--net................................................... (33,522) --
------------ ----------------
Net decrease in net assets resulting from dividends and distributions to
shareholders........................................................................ (1,477,492) (118,908)
------------ ----------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
CAPITAL SHARE TRANSACTIONS (NOTE 4)
Net increase in net assets derived from capital share transactions.................. 43,400,130 99,351,846
------------ ----------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
NET ASSETS:
Total increase in net assets........................................................ 30,908,919 102,517,213
Beginning of period................................................................. 104,517,313 2,000,100
------------ ----------------
End of period*...................................................................... $135,426,232 $104,517,313
------------ ----------------
------------ ----------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
*Undistributed investment income--net............................................... $ 1,158,796 $ 558,583
------------ ----------------
------------ ----------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
+ Commencement of Operations.
</TABLE>
See Notes to Financial Statements.
88
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
HIGH CURRENT
INCOME FUND INTERMEDIATE GOVERNMENT
FOR THE SIX FOR THE YEAR BOND FUND
MONTHS ENDED ENDED FOR THE PERIOD
JUNE 30, DEC. 31, MAY 2, 1994+ TO
1994 1993 JUNE 30, 1994
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
$ 8,778,770 $ 6,889,208 $ 14,929
486,869 615,071 --
(16,166,983 ) 4,541,949 --
- ------------ ------------ ------------
(6,901,344) 12,046,228 14,929
- ------------ ------------ ------------
</TABLE>
- ----------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
(8,090,741 ) (6,035,740 ) (5,476)
-- -- --
- ------------ ------------ ------------
(8,090,741 ) (6,035,740 ) (5,476)
- ------------ ------------ ------------
</TABLE>
- ----------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
91,307,819 131,074,555 3,034,748
- ------------ ------------ ------------
</TABLE>
- ----------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
76,315,734 137,085,043 3,044,201
163,428,172 26,343,129 2,000,000
- ------------ ------------ ------------
$239,743,906 $163,428,172 $5,044,201
- ------------ ------------ ------------
- ------------ ------------ ------------
</TABLE>
- ----------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
$ 1,784,501 $ 1,096,472 $ 9,453
- ------------ ------------ ------------
- ------------ ------------ ------------
</TABLE>
- ----------------------------------------------------------------------------
89
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL BOND FUND
FOR THE PERIOD
MAY 2, 1994+ TO
INCREASE (DECREASE) IN NET ASSETS: JUNE 30, 1994
- --------------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS:
Investment income--net..................................................................... $ 47,351
Realized gain (loss) on investments and foreign currency transactions--net................. (86,901)
Change in unrealized appreciation/depreciation on investments and foreign currency
transactions--net.......................................................................... (46,230)
------------
Net increase (decrease) in net assets resulting from operations............................ (85,780)
------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
DIVIDENDS & DISTRIBUTIONS TO SHAREHOLDER (NOTE 1G):
Investment income--net..................................................................... (15,578)
Realized gain on investments--net.......................................................... --
------------
Net decrease in net assets resulting from dividends and distributions to shareholders...... (15,578)
------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
CAPITAL SHARE TRANSACTIONS (NOTE 4):
Net increase in net assets derived from capital share transactions......................... 1,319,854
------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
NET ASSETS:
Total increase in net assets............................................................... 1,218,496
Beginning of period........................................................................ 5,000,000
------------
End of period*............................................................................. $6,218,496
------------
------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
*Undistributed (overdistributed) investment income--net.................................... $ 31,773
------------
------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
+ Commencement of Operations.
</TABLE>
See Notes to Financial Statements.
90
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY NATURAL RESOURCES
FOR THE SIX FOCUS FUND FOR THE SIX FOCUS FUND
MONTHS ENDED FOR THE PERIOD MONTHS ENDED FOR THE YEAR
JUNE 30, JULY 1, 1993+ TO JUNE 30, ENDED
1994 DEC. 31, 1993 1994 DEC. 31, 1993
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 850,104 $ 53,487 $ 236,820 $ 122,897
3,014,060 115,051 (6,256 ) 64,691
(4,203,641 ) 4,385,136 (644,144 ) (85,134)
- ------------ ---------------- ------------ -------------
(339,477 ) 4,553,674 (413,580 ) 102,454
- ------------ ---------------- ------------ -------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
(1,013,334 ) -- (83,949 ) (40,449)
(61,191 ) -- -- --
- ------------ ---------------- ------------ -------------
(1,074,525 ) -- (83,949 ) (40,449)
- ------------ ---------------- ------------ -------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
111,243,840 64,352,648 12,432,448 10,571,877
- ------------ ---------------- ------------ -------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
109,829,838 68,906,322 11,934,919 10,633,882
76,906,422 8,000,100 14,777,562 4,143,680
- ------------ ---------------- ------------ -------------
$186,736,260 $ 76,906,422 $26,712,481 $14,777,562
- ------------ ---------------- ------------ -------------
- ------------ ---------------- ------------ -------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
$ (109,743) $ 53,487 $ 235,505 $ 82,634
- ------------ ---------------- ------------ -------------
- ------------ ---------------- ------------ -------------
</TABLE>
- --------------------------------------------------------------------------------
91
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS (CONCLUDED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRIME BOND FUND
FOR THE SIX
MONTHS ENDED FOR THE YEAR
JUNE 30, ENDED
INCREASE (DECREASE) IN NET ASSETS: 1994 DEC. 31, 1993
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
OPERATIONS:
Investment income--net................................................................ $10,969,816 $ 10,814,492
Realized gain (loss) on investments and foreign currency transactions--net............ (8,160,358 ) 4,199,723
Change in unrealized appreciation/depreciation on investments and foreign currency
transactions--net..................................................................... (22,338,756 ) 200,559
------------ -------------
Net increase (decrease) in net assets resulting from operations....................... (19,529,298 ) 15,214,774
------------ -------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
DIVIDENDS & DISTRIBUTIONS TO SHAREHOLDERS (NOTE 1G):
Investment income--net................................................................ (10,517,339 ) (9,710,533 )
Realized gain on investments--net..................................................... (4,204,953 ) (752,637 )
------------ -------------
Net decrease in net assets resulting from dividends and distributions to
shareholders.......................................................................... (14,722,292 ) (10,463,170 )
------------ -------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
CAPITAL SHARE TRANSACTIONS (NOTES 4):
Net increase in net assets derived from capital share transactions.................... 102,417,537 224,530,037
------------ -------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
NET ASSETS:
Total increase in net assets.......................................................... 68,165,947 229,281,641
Beginning of period................................................................... 314,091,464 84,809,823
------------ -------------
End of period*........................................................................ $382,257,411 $314,091,464
------------ -------------
------------ -------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
*Undistributed investment income--net................................................. $ 1,987,037 $ 1,534,560
------------ -------------
------------ -------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
+ Commencement of Operations.
</TABLE>
See Notes to Financial Statements.
92
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
QUALITY EQUITY FUND RESERVE ASSETS FUND WORLD INCOME FOCUS FUND
FOR THE SIX FOR THE SIX FOR THE SIX
MONTHS ENDED FOR THE YEAR MONTHS ENDED FOR THE YEAR MONTHS ENDED FOR THE PERIOD
JUNE 30, ENDED JUNE 30, ENDED JUNE 30, JULY 1, 1993+ TO
1994 DEC. 31, 1993 1994 DEC. 31, 1993 1994 DEC. 31, 1993
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 2,234,303 $ 1,870,132 $ 516,242 $ 757,449 $ 2,398,215 $ 904,488
11,087,414 6,568,044 1,057 15,302 (739,392) 176,780
(32,762,756 ) 20,450,896 (33,009 ) (173) (5,044,736 ) 720,311
- ------------ ------------- ------------ ------------- ------------ -----------------
(19,441,039 ) 28,889,072 484,290 772,578 (3,385,913 ) 1,801,579
- ------------ ------------- ------------ ------------- ------------ -----------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
(1,111,379 ) (758,750 ) (516,242 ) (757,449) (2,270,715 ) (647,419)
(7,187,525 ) (236,123 ) (1,057 ) (15,302) (101,589 ) --
- ------------ ------------- ------------ ------------- ------------ -----------------
(8,298,904 ) (994,873 ) (517,299 ) (772,751) (2,372,304 ) (647,419)
- ------------ ------------- ------------ ------------- ------------ -----------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
115,890,858 193,548,727 5,746,482 3,400,720 32,883,566 41,583,188
- ------------ ------------- ------------ ------------- ------------ -----------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
88,150,915 221,442,926 5,713,473 3,400,547 27,125,349 42,737,348
309,419,637 87,976,711 30,167,905 26,767,358 50,737,448 8,000,100
- ------------ ------------- ------------ ------------- ------------ -----------------
$397,570,552 $309,419,637 $35,881,378 $30,167,905 $77,862,797 $50,737,448
- ------------ ------------- ------------ ------------- ------------ -----------------
- ------------ ------------- ------------ ------------- ------------ -----------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
$ 2,234,307 $ 1,111,383 $ -- $ -- $ 384,569 $ 257,069
- ------------ ------------- ------------ ------------- ------------ -----------------
- ------------ ------------- ------------ ------------- ------------ -----------------
</TABLE>
- --------------------------------------------------------------------------------
93
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AMERICAN BALANCED FUND
-------------------------------------------------------------------
THE FOLLOWING PER SHARE DATA AND RATIOS HAVE BEEN DERIVED FOR THE SIX
FROM INFORMATION PROVIDED IN THE FINANCIAL STATEMENTS. MONTHS ENDED FOR THE YEAR ENDED DECEMBER 31,
JUNE 30, --------------------------------------------------
INCREASE (DECREASE) IN NET ASSET VALUE: 1994 1993 1992 1991 1990
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period....................... $ 14.08 $ 12.85 $ 12.82 $ 11.26 $ 11.74
------------ -------- -------- ------- -------
Investment income (loss)--net.............................. .21 .32 .31 .47 .47
Realized and unrealized gain (loss) on investments and
foreign currency transactions--net....................... (.94) 1.37 .37 1.76 (.35)
------------ -------- -------- ------- -------
Total from investment operations........................... (.73) 1.69 .68 2.23 .12
------------ -------- -------- ------- -------
Less dividends and distributions:
Investment income--net................................... (.16) (.34) (.37) (.49) (.46)
Realized gain on investments--net........................ (.04) (.12) (.28) (.18) (.14)
------------ -------- -------- ------- -------
Total dividends and distributions.......................... (.20) (.46) (.65) (.67) (.60)
------------ -------- -------- ------- -------
Net asset value, end of period............................. $ 13.15 $ 14.08 $ 12.85 $ 12.82 $ 11.26
------------ -------- -------- ------- -------
------------ -------- -------- ------- -------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
TOTAL INVESTMENT RETURN:
Based on net asset value per share......................... (5.24%)++ 13.49% 5.72% 20.65% 1.22%
------------ -------- -------- ------- -------
------------ -------- -------- ------- -------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
RATIOS TO AVERAGE NET ASSETS:
Expenses, net of reimbursement............................. .64%* .70% .97% 1.20% 1.25%
------------ -------- -------- ------- -------
------------ -------- -------- ------- -------
Expenses................................................... .64%* .70% .97% 1.20% 1.50%
------------ -------- -------- ------- -------
------------ -------- -------- ------- -------
Investment income--net..................................... 3.68%* 3.20% 3.71% 4.16% 4.71%
------------ -------- -------- ------- -------
------------ -------- -------- ------- -------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
SUPPLEMENTAL DATA:
Net assets, end of period (in thousands)................... $149,888 $115,420 $ 24,918 $ 7,937 $ 5,675
------------ -------- -------- ------- -------
------------ -------- -------- ------- -------
Portfolio turnover......................................... 6.61% 12.55% 36.34% 50.82% 23.52%
------------ -------- -------- ------- -------
------------ -------- -------- ------- -------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
* Annualized.
++ Aggregate total investment return.
</TABLE>
See Notes to Financial Statements.
94
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
BASIC VALUE FOCUS FUND
THE FOLLOWING PER SHARE DATA AND RATIOS HAVE BEEN DERIVED -------------------------------------
FROM INFORMATION PROVIDED IN THE FINANCIAL STATEMENTS. FOR THE SIX FOR THE PERIOD
MONTHS ENDED JULY 1, 1993+ TO
INCREASE (DECREASE) IN NET ASSET VALUE: JUNE 30, 1994 DECEMBER 31, 1993
- --------------------------------------------------------------------------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period....................................... $ 10.95 $ 10.00
------------- --------
Investment income (loss)--net.............................................. .07 .04
Realized and unrealized gain (loss) on investments and foreign currency
transactions--net........................................................ (.44) .91
------------- --------
Total from investment operations........................................... (.37) .95
------------- --------
Less dividends and distributions:
Investment income--net................................................... (.04) --
Realized gain on investments--net........................................ -- --
------------- --------
Total dividends and distributions.......................................... (.04) --
------------- --------
Net asset value, end of period............................................. $ 10.54 $ 10.95
------------- --------
------------- --------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
TOTAL INVESTMENT RETURN:
Based on net asset value per share......................................... (3.43%)++ 9.50%++
------------- --------
------------- --------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
RATIOS TO AVERAGE NET ASSETS:
Expenses, net of reimbursement............................................. .72%* .86%*
------------- --------
------------- --------
Expenses................................................................... .72%* .86%*
------------- --------
------------- --------
Investment income--net..................................................... 1.88%* 1.69%*
------------- --------
------------- --------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
SUPPLEMENTAL DATA:
Net assets, end of period (in thousands)................................... $ 117,106 $47,207
------------- --------
------------- --------
Portfolio turnover......................................................... 25.36% 30.86%
------------- --------
------------- --------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
* Annualized.
+ Commencement of Operations.
++ Aggregate total investment return.
</TABLE>
See Notes to Financial Statements.
95
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DEVELOPING CAPITAL
MARKETS FOCUS FUND
THE FOLLOWING PER SHARE DATA AND RATIOS HAVE BEEN DERIVED --------------------------
FROM INFORMATION PROVIDED IN THE FINANCIAL STATEMENTS. FOR THE PERIOD MAY 2,
1994+
INCREASE (DECREASE) IN NET ASSET VALUE: TO JUNE 30,1994
- --------------------------------------------------------------------------------
<S> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.................................................... $ 10.00
--------
Investment income (loss)--net........................................................... .03
Realized and unrealized gain (loss) on investments and foreign currency
transactions--net..................................................................... (.32)
--------
Total from investment operations........................................................ (.29)
--------
Less dividends and distributions:
Investment income--net................................................................ --
Realized gain on investments--net..................................................... --
--------
Total dividends and distributions....................................................... --
--------
Net asset value, end of period.......................................................... $ 9.71
--------
--------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
TOTAL INVESTMENT RETURN:
Based on net asset value per share...................................................... (2.90%)++
--------
--------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
RATIOS TO AVERAGE NET ASSETS:
Expenses, net of reimbursement.......................................................... 1.25%*
--------
--------
Expenses................................................................................ 1.51%*
--------
--------
Investment income--net.................................................................. 2.31%*
--------
--------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
SUPPLEMENTAL DATA:
Net assets, end of period (in thousands)................................................ $ 13,322
--------
--------
Portfolio turnover...................................................................... --%
--------
--------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
* Annualized.
+ Commencement of Operations.
++ Aggregate total investment return.
</TABLE>
See Notes to Financial Statements.
96
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DOMESTIC MONEY MARKET FUND
THE FOLLOWING PER SHARE DATA AND RATIOS HAVE BEEN DERIVED ---------------------------------------------------------------
FROM INFORMATION PROVIDED IN THE FINANCIAL STATEMENTS. FOR THE SIX MONTHS FOR THE YEAR FOR THE PERIOD
ENDED ENDED FEBRUARY 20, 1992+
INCREASE (DECREASE) IN NET ASSET VALUE: JUNE 30, 1994 DECEMBER 31, 1993 TO DECEMBER 31, 1992
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period..................... $ 1.00 $ 1.00 $ 1.00
---------- ----------------- ----------
Investment income (loss)--net............................ .0163 .0302 .0302
Realized and unrealized gain (loss) on investments and
foreign currency transactions--net..................... (.0005) .0005 .0013
---------- ----------------- ----------
Total from investment operations......................... .0158 .0307 .0315
---------- ----------------- ----------
Less dividends and distributions:
Investment income--net................................. (.0163) (.0302) (.0302)
Realized gain on investments--net...................... -- (.0005) (.0010)
---------- ----------------- ----------
Total dividends and distributions........................ (.0163) (.0307) (.0312)
---------- ----------------- ----------
Net asset value, end of period........................... $ 1.00 $ 1.00 $ 1.00
---------- ----------------- ----------
---------- ----------------- ----------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
TOTAL INVESTMENT RETURN:
Based on net asset value per share....................... 3.32%* 3.10% 3.65%*
---------- ----------------- ----------
---------- ----------------- ----------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
RATIOS TO AVERAGE NET ASSETS:
Expenses, net of reimbursement........................... .41%* .36% .32%*
---------- ----------------- ----------
---------- ----------------- ----------
Expenses................................................. .56%* .63% .88%*
---------- ----------------- ----------
---------- ----------------- ----------
Investment income--net, and realized gain (loss) on
investments--net....................................... 3.40%* 3.03% 3.48%*
---------- ----------------- ----------
---------- ----------------- ----------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
SUPPLEMENTAL DATA:
Net assets, end of period (in thousands)................. $329,916 $ 170,531 $ 41,128
---------- ----------------- ----------
---------- ----------------- ----------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
* Annualized.
+ Commencement of Operations.
</TABLE>
See Notes to Financial Statements.
97
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EQUITY GROWTH FUND
-------------------------------------------------------------------
THE FOLLOWING PER SHARE DATA AND RATIOS HAVE BEEN DERIVED FOR THE SIX
FROM INFORMATION PROVIDED IN THE FINANCIAL STATEMENTS. MONTHS ENDED FOR THE YEAR ENDED DECEMBER 31,
JUNE 30, --------------------------------------------------
INCREASE (DECREASE) IN NET ASSET VALUE: 1994 1993+ 1992+ 1991 1990
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period...................... $ 20.96 $ 17.80 $ 17.96 $ 11.98 $ 13.70
------------ -------- -------- ------- -------
Investment income (loss)--net............................. .07 (.01) .01 .09 .05
Realized and unrealized gain (loss) on investments and
foreign currency transactions--net...................... (2.45) 3.17 (.10) 5.91 (1.77)
------------ -------- -------- ------- -------
Total from investment operations.......................... (2.38) 3.16 (.09) 6.00 (1.72)
------------ -------- -------- ------- -------
Less dividends and distributions:
Investment income--net.................................. (.19) -- (.07) (.02) --
Realized gain on investments--net....................... -- -- -- -- --
------------ -------- -------- ------- -------
Total dividends and distributions......................... (.19) -- (.07) (.02) --
------------ -------- -------- ------- -------
Net asset value, end of period............................ $ 18.39 $ 20.96 $ 17.80 $ 17.96 $ 11.98
------------ -------- -------- ------- -------
------------ -------- -------- ------- -------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
TOTAL INVESTMENT RETURN:
Based on net asset value per share........................ (11.46%)++ 17.78% (0.53%) 50.10% (12.55%)
------------ -------- -------- ------- -------
------------ -------- -------- ------- -------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
RATIOS TO AVERAGE NET ASSETS:
Expenses, net of reimbursement............................ .84%* .96% 1.18% 1.25% 1.25%
------------ -------- -------- ------- -------
------------ -------- -------- ------- -------
Expenses.................................................. .84%* .96% 1.18% 1.28% 1.47%
------------ -------- -------- ------- -------
------------ -------- -------- ------- -------
Investment income--net.................................... .03%* (.05%) .04% .51% .14%
------------ -------- -------- ------- -------
------------ -------- -------- ------- -------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
SUPPLEMENTAL DATA:
Net assets, end of period (in thousands).................. $139,316 $ 98,976 $ 23,167 $11,318 $ 6,851
------------ -------- -------- ------- -------
------------ -------- -------- ------- -------
Portfolio turnover........................................ 41.54% 131.75% 98.64% 79.10% 135.24%
------------ -------- -------- ------- -------
------------ -------- -------- ------- -------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
* Annualized.
+ Based on average number of shares outstanding during the year.
++ Aggregate total investment return.
</TABLE>
See Notes to Financial Statements.
98
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FLEXIBLE STRATEGY FUND
-------------------------------------------------------------------
THE FOLLOWING PER SHARE DATA AND RATIOS HAVE BEEN DERIVED FOR THE SIX
FROM INFORMATION PROVIDED IN THE FINANCIAL STATEMENTS. MONTHS ENDED FOR THE YEAR ENDED DECEMBER 31,
JUNE 30, --------------------------------------------------
INCREASE (DECREASE) IN NET ASSET VALUE: 1994 1993 1992 1991 1990
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period...................... $ 16.19 $ 14.15 $ 14.79 $ 12.55 $ 12.44
------------ -------- -------- ------- -------
Investment income (loss)--net............................. .15 .28 .33 .47 .65
Realized and unrealized gain (loss) on investments and
foreign currency transactions--net...................... (1.10) 1.94 .25 2.52 (.08)
------------ -------- -------- ------- -------
Total from investment operations.......................... (.95) 2.22 .58 2.99 .57
------------ -------- -------- ------- -------
Less dividends and distributions:
Investment income--net.................................. (.15) (.15) (.54) (.66) (.46)
Realized gain on investments--net....................... (.54) (.03) (.68) (.09) --
------------ -------- -------- ------- -------
Total dividends and distributions......................... (.69) (.18) (1.22) (.75) (.46)
------------ -------- -------- ------- -------
Net asset value, end of period............................ $ 14.55 $ 16.19 $ 14.15 $ 14.79 $ 12.55
------------ -------- -------- ------- -------
------------ -------- -------- ------- -------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
TOTAL INVESTMENT RETURN:
Based on net asset value per share........................ (6.11%)++ 15.80% 4.25% 24.98% 4.81%
------------ -------- -------- ------- -------
------------ -------- -------- ------- -------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
RATIOS TO AVERAGE NET ASSETS:
Expenses, net of reimbursement............................ .74%* .80% .90% .96% 1.08%
------------ -------- -------- ------- -------
------------ -------- -------- ------- -------
Expenses.................................................. .74%* .80% .90% .96% 1.08%
------------ -------- -------- ------- -------
------------ -------- -------- ------- -------
Investment income--net.................................... 2.23%* 2.26% 2.62% 3.51% 5.19%
------------ -------- -------- ------- -------
------------ -------- -------- ------- -------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
SUPPLEMENTAL DATA:
Net assets, end of period (in thousands).................. $249,110 $194,777 $ 82,549 $55,221 $47,428
------------ -------- -------- ------- -------
------------ -------- -------- ------- -------
Portfolio turnover........................................ 35.37% 56.42% 55.25% 67.13% 52.95%
------------ -------- -------- ------- -------
------------ -------- -------- ------- -------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
* Annualized.
++ Aggregate total investment return.
</TABLE>
See Notes to Financial Statements.
99
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GLOBAL STRATEGY FOCUS FUND
THE FOLLOWING PER SHARE DATA AND RATIOS HAVE BEEN DERIVED ---------------------------------------------------------------
FROM INFORMATION PROVIDED IN THE FINANCIAL STATEMENTS. FOR THE SIX MONTHS FOR THE YEAR FOR THE PERIOD
ENDED ENDED FEBRUARY 28, 1992+
INCREASE (DECREASE) IN NET ASSET VALUE: JUNE 30, 1994 DECEMBER 31, 1993 TO DECEMBER 31, 1992
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period..................... $ 12.17 $ 10.22 $ 10.00
---------- ----------------- ----------
Investment income (loss)--net............................ .13 .16 .13
Realized and unrealized gain (loss) on investments and
foreign currency transactions--net..................... (.12) 1.96 .13
---------- ----------------- ----------
Total from investment operations......................... .01 2.12 .26
---------- ----------------- ----------
Less dividends and distributions:
Investment income--net................................. (.08) (.17) (.04)
Realized gain on investments--net...................... (.05) -- --
---------- ----------------- ----------
Total dividends and distributions........................ (.13) (.17) (.04)
---------- ----------------- ----------
Net asset value, end of period........................... $ 12.05 $ 12.17 $ 10.22
---------- ----------------- ----------
---------- ----------------- ----------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
TOTAL INVESTMENT RETURN:
Based on net asset value per share....................... 0.14%++ 21.03% 2.62%++
---------- ----------------- ----------
---------- ----------------- ----------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
RATIOS TO AVERAGE NET ASSETS:
Expenses, net of reimbursement........................... .76%* .88% 1.25%*
---------- ----------------- ----------
---------- ----------------- ----------
Expenses................................................. .76%* .88% 1.35%*
---------- ----------------- ----------
---------- ----------------- ----------
Investment income--net................................... 2.77%* 2.41% 2.66%*
---------- ----------------- ----------
---------- ----------------- ----------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
SUPPLEMENTAL DATA:
Net assets, end of period (in thousands)................. $456,201 $ 269,627 $ 15,527
---------- ----------------- ----------
---------- ----------------- ----------
Portfolio turnover....................................... 8.06% 17.07% 14.47%
---------- ----------------- ----------
---------- ----------------- ----------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
* Annualized.
+ Commencement of Operations.
++ Aggregate total investment return.
</TABLE>
See Notes to Financial Statements.
100
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GLOBAL UTILITY FOCUS FUND
THE FOLLOWING PER SHARE DATA AND RATIOS HAVE BEEN DERIVED -------------------------------------
FROM INFORMATION PROVIDED IN THE FINANCIAL STATEMENTS. FOR THE SIX FOR THE PERIOD
MONTHS ENDED JULY 1, 1993+ TO
INCREASE (DECREASE) IN NET ASSET VALUE: JUNE 30, 1994 DECEMBER 31, 1993
- --------------------------------------------------------------------------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period....................................... $ 10.66 $ 10.00
------------- -----------------
Investment income (loss)--net.............................................. .15 .04
Realized and unrealized gain (loss) on investments and foreign currency
transactions--net........................................................ (1.04) .64
------------- -----------------
Total from investment operations........................................... (.89) .68
------------- -----------------
Less dividends and distributions:
Investment income--net................................................... (.13) (.02)
Realized gain on investments--net........................................ --** --
------------- -----------------
Total dividends and distributions.......................................... (.13) (.02)
------------- -----------------
Net asset value, end of period............................................. $ 9.64 $ 10.66
------------- -----------------
------------- -----------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
TOTAL INVESTMENT RETURN:
Based on net asset value per share......................................... (8.41%)++ 6.85%++
------------- -----------------
------------- -----------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
RATIOS TO AVERAGE NET ASSETS:
Expenses, net of reimbursement............................................. .73%* .89%*
------------- -----------------
------------- -----------------
Expenses................................................................... .73%* .89%*
------------- -----------------
------------- -----------------
Investment income--net..................................................... 3.28%* 2.84%*
------------- -----------------
------------- -----------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
SUPPLEMENTAL DATA:
Net assets, end of period (in thousands)................................... $ 135,429 $ 104,517
------------- -----------------
------------- -----------------
Portfolio turnover......................................................... 1.73% 1.72%
------------- -----------------
------------- -----------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
* Annualized.
** Amount is less than $.01 per share.
+ Commencement of Operations.
++ Aggregate total investment return.
</TABLE>
See Notes to Financial Statements.
101
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
HIGH CURRENT INCOME FUND
-------------------------------------------------------------------
THE FOLLOWING PER SHARE DATA AND RATIOS HAVE BEEN DERIVED FOR THE SIX
FROM INFORMATION PROVIDED IN THE FINANCIAL STATEMENTS. MONTHS ENDED FOR THE YEAR ENDED DECEMBER 31,
JUNE 30, --------------------------------------------------
INCREASE (DECREASE) IN NET ASSET VALUE: 1994 1993 1992 1991 1990
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period...................... $ 12.06 $ 11.13 $ 10.23 $ 8.14 $ 10.21
------------ -------- -------- ------- -------
Investment income (loss)--net............................. .48 .95 1.07 1.19 1.40
Realized and unrealized gain (loss) on investments and
foreign currency transactions--net...................... (.83) .95 .90 2.10 (2.08)
------------ -------- -------- ------- -------
Total from investment operations.......................... (.35) 1.90 1.97 3.29 (.68)
------------ -------- -------- ------- -------
Less dividends and distributions:
Investment income--net.................................. (.48) (.97) (1.07) (1.20) (1.39)
Realized gain on investments--net....................... -- -- -- -- --
------------ -------- -------- ------- -------
Total dividends and distributions......................... (.48) (.97) (1.07) (1.20) (1.39)
------------ -------- -------- ------- -------
Net asset value, end of period............................ $ 11.23 $ 12.06 $ 11.13 $ 10.23 $ 8.14
------------ -------- -------- ------- -------
------------ -------- -------- ------- -------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
TOTAL INVESTMENT RETURN:
Based on net asset value per share........................ (2.95%)++ 17.84% 20.05% 43.00% (7.63%)
------------ -------- -------- ------- -------
------------ -------- -------- ------- -------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
RATIOS TO AVERAGE NET ASSETS:
Expenses, net of reimbursement............................ .62%* .72% .89% 1.10% 1.15%
------------ -------- -------- ------- -------
------------ -------- -------- ------- -------
Expenses.................................................. .62%* .72% .89% 1.10% 1.15%
------------ -------- -------- ------- -------
------------ -------- -------- ------- -------
Investment income--net.................................... 8.74%* 8.62% 10.06% 12.49% 14.52%
------------ -------- -------- ------- -------
------------ -------- -------- ------- -------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
SUPPLEMENTAL DATA:
Net assets, end of period (in thousands).................. $239,744 $163,428 $ 26,343 $ 9,649 $ 8,108
------------ -------- -------- ------- -------
------------ -------- -------- ------- -------
Portfolio turnover........................................ 31.42% 35.67% 28.21% 51.54% 26.43%
------------ -------- -------- ------- -------
------------ -------- -------- ------- -------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
* Annualized.
++ Aggregate total investment return.
</TABLE>
See Notes to Financial Statements.
102
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERMEDIATE GOVERNMENT
BOND
THE FOLLOWING PER SHARE DATA AND RATIOS HAVE BEEN DERIVED --------------------------
FROM INFORMATION PROVIDED IN THE FINANCIAL STATEMENTS. FOR THE PERIOD MAY 2,
1994+
INCREASE (DECREASE) IN NET ASSET VALUE: TO JUNE 30,1994
- --------------------------------------------------------------------------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.................................................. $10.00
-------
Investment income (loss)--net......................................................... .04
Realized and unrealized gain (loss) on investments and foreign currency
transactions--net................................................................... .01
-------
Total from investment operations...................................................... .05
-------
Less dividends and distributions:
Investment income--net.............................................................. (.02)
Realized gain on investments--net................................................... --
-------
Total dividends and distributions..................................................... (.02)
-------
Net asset value, end of period........................................................ $10.03
-------
-------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
TOTAL INVESTMENT RETURN:
Based on net asset value per share.................................................... 0.50%++
-------
-------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
RATIOS TO AVERAGE NET ASSETS:
Expenses, net of reimbursement........................................................ --%*
-------
-------
Expenses.............................................................................. 1.01%*
-------
-------
Investment income--net................................................................ 3.17%*
-------
-------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
SUPPLEMENTAL DATA:
Net assets, end of period (in thousands).............................................. $5,044
-------
-------
Portfolio turnover.................................................................... 0%
-------
-------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
* Annualized.
+ Commencement of Operations.
++ Aggregate total investment return.
</TABLE>
See Notes to Financial Statements.
103
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL BOND FUND
THE FOLLOWING PER SHARE DATA AND RATIOS HAVE BEEN DERIVED --------------------------
FROM INFORMATION PROVIDED IN THE FINANCIAL STATEMENTS. FOR THE PERIOD MAY 2,
1994+
INCREASE (DECREASE) IN NET ASSET VALUE: TO JUNE 30,1994
- --------------------------------------------------------------------------------
<S> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.................................................... $10.00
-------
Investment income (loss)--net........................................................... .08
Realized and unrealized gain (loss) on investments and foreign currency
transactions--net..................................................................... (.24)
-------
Total from investment operations........................................................ (.16)
-------
Less dividends and distributions:
Investment income--net................................................................ (.03)
Realized gain on investments--net..................................................... --
-------
Total dividends and distributions....................................................... (.03)
-------
Net asset value, end of period.......................................................... $ 9.81
-------
-------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
TOTAL INVESTMENT RETURN:
Based on net asset value per share...................................................... (1.59%)++
-------
-------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
RATIOS TO AVERAGE NET ASSETS:
Expenses, net of reimbursement.......................................................... --%*
-------
-------
Expenses................................................................................ 1.10%*
-------
-------
Investment income--net.................................................................. 5.45%*
-------
-------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
SUPPLEMENTAL DATA:
Net assets, end of period (in thousands)................................................ $6,218
-------
-------
Portfolio turnover...................................................................... 22.54%
-------
-------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
* Annualized.
+ Commencement of Operations.
++ Aggregate total investment return.
</TABLE>
See Notes to Financial Statements.
104
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY FOCUS FUND
THE FOLLOWING PER SHARE DATA AND RATIOS HAVE BEEN DERIVED -------------------------------------
FROM INFORMATION PROVIDED IN THE FINANCIAL STATEMENTS. FOR THE SIX FOR THE PERIOD
MONTHS ENDED JULY 1, 1993+ TO
INCREASE (DECREASE) IN NET ASSET VALUE: JUNE 30, 1994 DECEMBER 31, 1993
- --------------------------------------------------------------------------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period....................................... $ 11.03 $ 10.00
------------- --------
Investment income (loss)--net.............................................. .13 .01
Realized and unrealized gain (loss) on investments and foreign currency
transactions--net........................................................ .07 1.02
------------- --------
Total from investment operations........................................... .20 1.03
------------- --------
Less dividends and distributions:
Investment income--net................................................... (.15) --
Realized gain on investments--net........................................ (.01) --
------------- --------
Total dividends and distributions.......................................... (.16) --
------------- --------
Net asset value, end of period............................................. $ 11.07 $ 11.03
------------- --------
------------- --------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
TOTAL INVESTMENT RETURN:
Based on net asset value per share......................................... 1.78%++ 10.30%++
------------- --------
------------- --------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
RATIOS TO AVERAGE NET ASSETS:
Expenses, net of reimbursement............................................. .98%* 1.14%*
------------- --------
------------- --------
Expenses................................................................... .98%* 1.14%*
------------- --------
------------- --------
Investment income--net..................................................... 1.26%* .30%*
------------- --------
------------- --------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
SUPPLEMENTAL DATA:
Net assets, end of period (in thousands)................................... $ 186,736 $76,906
------------- --------
------------- --------
Portfolio turnover......................................................... 25.55% 17.39%
------------- --------
------------- --------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
* Annualized.
+ Commencement of Operations.
++ Aggregate total investment return.
</TABLE>
See Notes to Financial Statements.
105
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NATURAL RESOURCES FOCUS FUND
-------------------------------------------------------------------
THE FOLLOWING PER SHARE DATA AND RATIOS HAVE BEEN DERIVED FOR THE SIX
FROM INFORMATION PROVIDED IN THE FINANCIAL STATEMENTS. MONTHS ENDED FOR THE YEAR ENDED DECEMBER 31,
JUNE 30, --------------------------------------------------
INCREASE (DECREASE) IN NET ASSET VALUE: 1994 1993 1992 1991 1990
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period...................... $ 10.82 $ 9.84 $ 10.06 $ 10.17 $ 11.09
------------ -------- -------- ------- -------
Investment income (loss)--net............................. .09 .11 .18 .25 .22
Realized and unrealized gain (loss) on investments and
foreign currency transactions--net...................... (.17) .92 (.05) (.11) (.90)
------------ -------- -------- ------- -------
Total from investment operations.......................... (.08) 1.03 .13 .14 (.68)
------------ -------- -------- ------- -------
Less dividends and distributions:
Investment income--net.................................. (.06) (.05) (.29) (.25) (.24)
Realized gain on investments--net....................... -- -- (.06) -- --
------------ -------- -------- ------- -------
Total dividends and distributions......................... (.06) (.05) (.35) (.25) (.24)
------------ -------- -------- ------- -------
Net asset value, end of period............................ $ 10.68 $ 10.82 $ 9.84 $ 10.06 $ 10.17
------------ -------- -------- ------- -------
------------ -------- -------- ------- -------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
TOTAL INVESTMENT RETURN:
Based on net asset value per share........................ (0.73%)++ 10.47% 1.36% 1.36% (6.21%)
------------ -------- -------- ------- -------
------------ -------- -------- ------- -------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
RATIOS TO AVERAGE NET ASSETS:
Expenses, net of reimbursement............................ .92%* 1.13% 1.25% 1.25% 1.25%
------------ -------- -------- ------- -------
------------ -------- -------- ------- -------
Expenses.................................................. .92%* 1.13% 1.27% 1.30% 1.38%
------------ -------- -------- ------- -------
------------ -------- -------- ------- -------
Investment income--net.................................... 2.32%* 1.34% 2.00% 2.31% 2.26%
------------ -------- -------- ------- -------
------------ -------- -------- ------- -------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
SUPPLEMENTAL DATA:
Net assets, end of period (in thousands).................. $ 26,712 $ 14,778 $ 4,144 $ 3,084 $ 3,247
------------ -------- -------- ------- -------
------------ -------- -------- ------- -------
Portfolio turnover........................................ 6.60% 58.44% 22.88% 31.38% 27.61%
------------ -------- -------- ------- -------
------------ -------- -------- ------- -------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
* Annualized.
++ Aggregate total investment return.
</TABLE>
See Notes to Financial Statements.
106
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRIME BOND FUND
-------------------------------------------------------------------
THE FOLLOWING PER SHARE DATA AND RATIOS HAVE BEEN DERIVED FOR THE SIX
FROM INFORMATION PROVIDED IN THE FINANCIAL STATEMENTS. MONTHS ENDED FOR THE YEAR ENDED DECEMBER 31,
JUNE 30, --------------------------------------------------
INCREASE (DECREASE) IN NET ASSET VALUE: 1994 1993 1992 1991 1990
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period...................... $ 12.64 $ 12.04 $ 12.02 $ 11.18 $ 11.29
------------ -------- -------- ------- -------
Investment income (loss)--net............................. .37 .70 .79 .90 .88
Realized and unrealized gain (loss) on investments and
foreign currency transactions--net...................... (1.02) .71 .04 .84 (.12)
------------ -------- -------- ------- -------
Total from investment operations.......................... (.65) 1.41 .83 1.74 .76
------------ -------- -------- ------- -------
Less dividends and distributions:
Investment income--net.................................. (.37) (.70) (.81) (.90) (.87)
Realized gain on investments--net....................... (.17) (.11) -- -- --
------------ -------- -------- ------- -------
Total dividends and distributions......................... (.54) (.81) (.81) (.90) (.87)
------------ -------- -------- ------- -------
Net asset value, end of period............................ $ 11.45 $ 12.64 $ 12.04 $ 12.02 $ 11.18
------------ -------- -------- ------- -------
------------ -------- -------- ------- -------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
TOTAL INVESTMENT RETURN:
Based on net asset value per share........................ (5.31%)++ 12.02% 7.27% 16.41% 7.13%
------------ -------- -------- ------- -------
------------ -------- -------- ------- -------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
RATIOS TO AVERAGE NET ASSETS:
Expenses, net of reimbursement............................ .56%* .63% .78% .78% 1.06%
------------ -------- -------- ------- -------
------------ -------- -------- ------- -------
Expenses.................................................. .56%* .63% .78% .78% 1.06%
------------ -------- -------- ------- -------
------------ -------- -------- ------- -------
Investment income--net.................................... 6.34%* 5.86% 6.76% 7.94% 8.01%
------------ -------- -------- ------- -------
------------ -------- -------- ------- -------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
SUPPLEMENTAL DATA:
Net assets, end of period (in thousands).................. $382,257 $314,091 $ 81,810 $39,743 $34,655
------------ -------- -------- ------- -------
------------ -------- -------- ------- -------
Portfolio turnover........................................ 57.45% 115.26% 82.74% 152.18% 155.17%
------------ -------- -------- ------- -------
------------ -------- -------- ------- -------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
* Annualized.
++ Aggregate total investment return.
</TABLE>
See Notes to Financial Statements.
107
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
QUALITY EQUITY FUND
-------------------------------------------------------------------
THE FOLLOWING PER SHARE DATA AND RATIOS HAVE BEEN DERIVED FOR THE SIX
FROM INFORMATION PROVIDED IN THE FINANCIAL STATEMENTS. MONTHS ENDED FOR THE YEAR ENDED DECEMBER 31,
JUNE 30, --------------------------------------------------
INCREASE (DECREASE) IN NET ASSET VALUE: 1994 1993 1992 1991 1990
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period...................... $ 29.02 $ 25.48 $ 26.35 $ 21.72 $ 22.88
------------ -------- -------- ------- -------
Investment income (loss)--net............................. .15 .24 .34 .43 .47
Realized and unrealized gain (loss) on investments and
foreign currency transactions--net...................... (1.49) 3.46 .32 5.75 (.38)
------------ -------- -------- ------- -------
Total from investment operations.......................... (1.34) 3.70 .66 6.18 .09
------------ -------- -------- ------- -------
Less dividends and distributions:
Investment income--net.................................. (.10) (.12) (.58) (.50) (.41)
Realized gain on investments--net....................... (.67) (.04) (.95) (1.05) (.84)
------------ -------- -------- ------- -------
Total dividends and distributions......................... (.77) (.16) (1.53) (1.55) (1.25)
------------ -------- -------- ------- -------
Net asset value, end of period............................ $ 26.91 $ 29.02 $ 25.48 $ 26.35 $ 21.72
------------ -------- -------- ------- -------
------------ -------- -------- ------- -------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
TOTAL INVESTMENT RETURN:
Based on net asset value per share........................ (4.69%)++ 14.57% 2.69% 30.18% .66%
------------ -------- -------- ------- -------
------------ -------- -------- ------- -------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
RATIOS TO AVERAGE NET ASSETS:
Expenses, net of reimbursement............................ .56%* .62% .74% .79% .94%
------------ -------- -------- ------- -------
------------ -------- -------- ------- -------
Expenses.................................................. .56%* .62% .74% .79% .94%
------------ -------- -------- ------- -------
------------ -------- -------- ------- -------
Investment income--net.................................... 1.26%* 1.07% 1.54% 1.87% 2.36%
------------ -------- -------- ------- -------
------------ -------- -------- ------- -------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
SUPPLEMENTAL DATA:
Net assets, end of period (in thousands).................. $397,571 $309,420 $ 87,977 $55,005 $39,470
------------ -------- -------- ------- -------
------------ -------- -------- ------- -------
Portfolio turnover........................................ 36.95% 88.25% 62.54% 55.83% 69.05%
------------ -------- -------- ------- -------
------------ -------- -------- ------- -------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
* Annualized.
++ Aggregate total investment return.
</TABLE>
See Notes to Financial Statements.
108
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RESERVE ASSETS FUND
-------------------------------------------------------------------
THE FOLLOWING PER SHARE DATA AND RATIOS HAVE BEEN DERIVED FOR THE SIX
FROM INFORMATION PROVIDED IN THE FINANCIAL STATEMENTS. MONTHS ENDED FOR THE YEAR ENDED DECEMBER 31,
JUNE 30, --------------------------------------------------
INCREASE (DECREASE) IN NET ASSET VALUE: 1994 1993 1992 1991 1990
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period...................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------ -------- -------- ------- -------
Investment income (loss)--net............................. .0155 .0268 .0320 .0546 .0730
Realized and unrealized gain (loss) on investments and
foreign currency transactions--net...................... -- .0005 .0007 .0014 .0019
------------ -------- -------- ------- -------
Total from investment operations.......................... .0155 .0273 .0327 .0560 .0749
------------ -------- -------- ------- -------
Less dividends and distributions:
Investment income--net.................................. (.0155) (.0268) (.0320) (.0546) (.0730)
Realized gain on investments--net....................... -- (.0005) (.0005) (.0014)++ (.0019 ++
------------ -------- -------- ------- -------
Total dividends and distributions......................... (.0155) (.0273) (.0325) (.0560) (.0749)
------------ -------- -------- ------- -------
Net asset value, end of period............................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------ -------- -------- ------- -------
------------ -------- -------- ------- -------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
TOTAL INVESTMENT RETURN:
Based on net asset value per share........................ 3.16%* 2.77% 3.28% 5.68% 7.61%
------------ -------- -------- ------- -------
------------ -------- -------- ------- -------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
RATIOS TO AVERAGE NET ASSETS:
Expenses.................................................. .63%* .70% .79% .79% .97%
------------ -------- -------- ------- -------
------------ -------- -------- ------- -------
Investment income--net, and realized gain (loss) on
investments--net........................................ 3.16%* 2.73% 3.36% 5.64% 7.46%
------------ -------- -------- ------- -------
------------ -------- -------- ------- -------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
SUPPLEMENTAL DATA:
Net assets, end of period (in thousands).................. $ 35,881 $ 30,168 $ 26,767 $34,362 $35,871
------------ -------- -------- ------- -------
------------ -------- -------- ------- -------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
* Annualized.
++ Includes unrealized gain (loss). (See Note 1g).
</TABLE>
See Notes to Financial Statements.
109
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.
FINANCIAL HIGHLIGHTS (CONCLUDED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WORLD INCOME FOCUS FUND
THE FOLLOWING PER SHARE DATA AND RATIOS HAVE BEEN DERIVED -------------------------------------
FROM INFORMATION PROVIDED IN THE FINANCIAL STATEMENTS. FOR THE SIX FOR THE PERIOD
MONTHS ENDED JULY 31, 1993+ TO
INCREASE (DECREASE) IN NET ASSET VALUE: JUNE 30, 1994 DECEMBER 31, 1993
- --------------------------------------------------------------------------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period....................................... $ 10.38 $ 10.00
------------- --------
Investment income (loss)--net.............................................. .36 .25
Realized and unrealized gain (loss) on investments and foreign currency
transactions--net........................................................ (.82) .33
------------- --------
Total from investment operations........................................... (.46) .58
------------- --------
Less dividends and distributions:
Investment income--net................................................... (.36) (.20)
Realized gain on investments--net........................................ (.02) --
------------- --------
Total dividends and distributions.......................................... (.38) (.20)
------------- --------
Net asset value, end of period............................................. $ 9.54 $ 10.38
------------- --------
------------- --------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
TOTAL INVESTMENT RETURN:
Based on net asset value per share......................................... (4.55%)++ 5.90%++
------------- --------
------------- --------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
RATIOS TO AVERAGE NET ASSETS:
Expenses, net of reimbursement............................................. .81%* .94%*
------------- --------
------------- --------
Expenses................................................................... .81%* .94%*
------------- --------
------------- --------
Investment income--net..................................................... 7.31%* 6.20%*
------------- --------
------------- --------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
SUPPLEMENTAL DATA:
Net assets, end of period (in thousands)................................... $ 77,863 $50,737
------------- --------
------------- --------
Portfolio turnover......................................................... 44.82% 54.80%
------------- --------
------------- --------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
* Annualized.
+ Commencement of Operations.
++ Aggregate total investment return.
</TABLE>
See Notes to Financial Statements.
110
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
- ---------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES:
Merrill Lynch Variable Series Funds, Inc. (the 'Company') is an open-end
management investment company which is comprised of 17 separate funds ('Funds'
or 'Fund') offering 17 separate classes of shares to the Merrill Lynch Life
Insurance Company, ML Life Insurance Company of New York (indirect wholly-owned
subsidiaries of Merrill Lynch & Co., Inc. 'ML & Co.'), and Family Life Insurance
Company (an insurance company not affiliated with ML & Co.) for their separate
accounts to fund benefits under certain variable annuity contracts. Each Fund is
classified as 'diversified', as defined in the Investment Company Act of 1940,
except for Developing Capital Markets Focus Fund, Global Strategy Focus Fund,
International Bond Fund, Natural Resources Focus Fund and the World Income Focus
Fund, all of which are classified as 'non-diversified.' The following is a
summary of significant accounting policies followed by the Funds.
(a) Valuation of investments--Money market securities maturing more than
sixty days after the valuation date are valued at the most recent bid price or
yield equivalent as obtained from dealers that make markets in the securities.
When such securities are valued with sixty days or less to maturity, the
difference between the valuation existing on the sixty-first day before maturity
and maturity value is amortized on a straight-line basis to maturity.
Investments maturing within sixty days from their date of acquisition are valued
at amortized cost, which approximates market value.
Portfolio securities which are traded on stock exchanges are valued at the
last sale price as of the close of business on the day the securities are being
valued, or lacking any sales, at the closing bid price. Securities traded in the
over-the-counter market are valued at the bid price or yield equivalent as
obtained from one or more dealers that make markets in such securities.
Portfolio securities which are traded both in the over-the-counter market and on
a stock exchange are valued according to the broadest and most representative
market, and it is expected that for debt securities this ordinarily will be the
over-the-counter market. Futures contracts are valued at settlement price at the
close of the applicable exchange. Securities for which market quotations are not
readily available are valued at fair value as determined in good faith by or
under the direction of the Board of Directors of the Company.
Options which are traded on exchanges are valued at the last bid price in the
case of options purchased and last asked price in the case of options written.
(b) 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.
Certain Funds are authorized to enter into forward foreign exchange contracts as
a hedge against either specific transactions or portfolio positions. Such
contracts are not entered on the Funds' records. However, the effect on net
investment income is recorded from the date the Funds enter into such contracts.
Premium or discount is amortized over the life of the contracts.
(c) Options--Certain Funds can write covered call options and purchase put
options. When the Funds write an option, an amount equal to the premium received
by the Funds is reflected as an asset and an equivalent liability. The amount of
the liability is subsequently marked to market to reflect the current value of
the option written.
When a security is sold through an exercise of an option, the related premium
received (or paid) is deducted from (or added to) the basis of the security
sold. When an option expires (or the Funds enter into a closing transaction),
the Funds realize 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 and purchased options are non-income producing investments.
(d) Income taxes--It is the Company'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 imposed on interest, dividends and
capital gains at various rates.
(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 except that if the
ex-dividend date has passed, certain dividends from foreign securities are
recorded as soon as the Fund is informed of the ex-dividend date. Interest
income (including amortization of premium and discount) is recognized on the
accrual basis. Realized gains and losses on security transactions are determined
on the identified cost basis.
(f) Deferred organization expenses and prepaid registration fees--Deferred
organization expenses are charged to expense on a straight-line basis over a
five-year period. Prepaid registration fees are charged to expense as the
related shares are issued.
(g) Dividends and distributions--Dividends and distributions paid by the
Funds are recorded on the ex-dividend dates.
111
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
2. INVESTMENT ADVISORY AGREEMENT AND TRANSACTIONS WITH AFFILIATES:
The Company has entered into an Investment Advisory Agreement with Merrill Lynch
Asset Management, L.P. ('MLAM'). Effective January 1, 1994, the investment
advisory business of MLAM was reorganized from a corporation to a limited
partnership. Both prior to and after the reorganization, ultimate control of
MLAM was vested with ML & Co. The general partner of MLAM is Princeton Services,
Inc., an indirect, wholly-owned subsidiary of ML & Co. The limited partners are
ML & Co. and Merrill Lynch Investment Management, Inc. ('MLIM'), which is also
an indirect wholly-owned subsidiary of ML & Co. Inc. MLAM is responsible for the
management of the Company's portfolios and provides the necessary personnel,
facilities, equipment and certain other services necessary to the operations of
the Funds.
For such services, the Company pays a monthly fee based upon the average
daily value of each Fund's net assets at the following annual rates: American
Balanced Fund, 0.55% of the average daily net assets of the Fund; Developing
Capital Markets Focus Fund, 1.00% of the average daily net assets; Domestic
Money Market Fund, 0.50% of the average daily net assets of the Fund; Equity
Growth Fund, 0.75% of the average daily net assets of the Fund; Flexible
Strategy Fund, 0.65% of the average daily net assets of the Fund; Global
Strategy Focus Fund, 0.65% of the average daily net assets of the Fund; Basic
Value Focus Fund, 0.60% of the average daily net assets of the Fund; World
Income Focus Fund, 0.60% of the average daily net assets of the Fund; Global
Utility Focus Fund, 0.60% of the average daily net assets of the Fund;
International Equity Focus Fund, 0.75% of the average daily net assets of the
Fund; High Current Income Fund, 0.55% of the Fund's average daily net assets not
exceeding $250 million, and at reduced rates for average daily net assets in
excess of $250 million; International Bond Fund, 0.60% of the Fund's average
daily net assets; Intermediate Government Bond Fund 0.50% of the average daily
net assets of the Fund; Natural Resources Focus Fund, 0.65% of the average daily
net assets of the Fund; Prime Bond Fund, 0.50% of the Fund's average daily net
assets not exceeding $250 million, and at reduced rates for average daily net
assets in excess of $250 million; Quality Equity Fund, 0.50% of the Fund's
average daily net assets not exceeding $250 million, and at reduced rates for
average daily net assets in excess of $250 million; and Reserve Assets Fund,
0.50% of the Fund's average daily net assets not exceeding $500 million, and at
reduced rates for average daily net assets in excess of $500 million.
The Investment Advisory Agreement obligates MLAM to reimburse the Company, if
in any year the aggregate ordinary operating expenses of any Fund exceed the
most restrictive expense limitations then in effect under any state securities
laws or the regulations thereunder. Under the most restrictive state regulations
presently in effect, the Investment Adviser would be required to reimburse each
Fund for advisory fees received by it from the Fund, to the extent that such
Fund's aggregate ordinary operating expenses (excluding interest, taxes,
brokerage fees and commissions, and extraordinary items) exceed in any fiscal
year 2.5% of each Fund's first $30 million of average daily net assets, 2.0% of
the Fund's next $70 million of average daily net assets, and 1.5% of average
daily net assets in excess thereof. In addition, the Investment Adviser, MLAM,
and Merrill Lynch Life Agency, Inc. ('MLLA') have entered into an agreement
which limits the operating expenses paid by each Fund to 1.25% of its average
daily net assets. Any expenses in excess of 1.25% of average daily net assets
will be reimbursed to the Fund by the Investment Adviser which, in turn, will be
reimbursed by MLLA.
For Developing Capital Markets Focus Fund for the period May 2, 1994 to June
30, 1994, MLAM earned fees of $15,857, of which $4,091 was voluntarily waived.
For Domestic Money Market Fund for the six months ended June 30, 1994, MLAM
earned fees of $573,998, of which $172,199 was voluntarily waived.
For Intermediate Government Bond Fund for the period May 2, 1994 to June 30,
1994, MLAM has voluntarily agreed to waive all of its advisory fee. MLAM has
also reimbursed the Fund for $2,385 in additional expenses.
For the International Bond Fund for the period May 2, 1994 to June 30, 1994,
MLAM has voluntarily agreed to waive all of its advisory fee. MLAM has also
reimbursed the Fund for $4,335 in additional expenses.
Merrill Lynch, Pierce, Fenner & Smith Inc. (MLPF&S), an affiliate of MLIM,
earned commissions on the execution of portfolio security transactions
aggregating $9,180 in the Basic Value Focus Fund, $3,040 in the Developing
Capital Markets Focus Fund, $1,566 in the Global Utility Focus Fund, $17,048 in
the International Equity Focus Fund, $4,020 in the Equity Growth Fund, $17,805
in the Flexible Strategy Fund, $14,928 in the Global Strategy Focus Fund,
$41,521 in the Quality Equity Fund, and $625 in the World Income Focus Fund.
Accounting services are provided to the Company by MLAM at cost.
Variable Series American Balanced Fund, Global Utility Focus Fund, High
Current Income Fund, Intermediate Government Bond Fund, Prime Bond Fund and
World Income Focus Fund paid Merrill Lynch Security Pricing Service, an
affiliate of MLPF&S, $709, $3,330, $6,653, $50, $7,362, and $5,745,
respectively, for security price quotations to compute the net asset value of
the Fund.
Financial Data Services, Inc. ('FDS'), a wholly-owned subsidiary of ML & Co.,
is the Company's transfer agent.
Certain officers and/or directors of the Company are officers and/or
directors of MLAM, MLIM, FDS, Merrill Lynch Funds Distributor, Inc., a
wholly-owned
112
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
subsidiary of MLIM, which is the Funds' distributor, and/or ML & Co.
3. INVESTMENTS:
Purchases and sales of investments, excluding short-term securities for the six
months ended June 30, 1994, were as follows:
<TABLE>
<S> <C> <C>
PURCHASES SALES
</TABLE>
- ----------------------------------------------------------
<TABLE>
<S> <C> <C>
American Balanced Fund............................ $ 61,382,569 $ 7,988,199
Basic Value Focus Fund............................ 94,930,792 18,350,086
Developing Capital Markets Focus Fund............. 7,559,912 --
Domestic Money Market Fund........................ -- --
Equity Growth Fund................................ 90,530,469 43,105,664
Flexible Strategy Fund............................ 89,690,091 63,672,898
Global Strategy Focus Fund........................ 234,977,531 25,995,817
Global Utility Focus Fund......................... 28,956,364 1,613,566
High Current Income Fund.......................... 145,916,640 58,200,779
Intermediate Government Bond Fund................. -- --
International Bond Fund........................... 5,304,932 603,673
International Equity Focus Fund................... 129,686,089 30,585,779
Natural Resources Focus Fund...................... 9,745,673 1,125,347
Prime Bond Fund................................... 269,458,239 177,326,905
Quality Equity Fund............................... 170,087,456 109,964,533
Reserve Assets Fund............................... 278,725,469 8,604,291
World Income Focus Fund........................... 51,654,802 25,778,313
</TABLE>
- ----------------------------------------------------------
Transactions in call options written for the six months ended June 30, 1994,
were as follows:
<TABLE>
<S> <C> <C>
FLEXIBLE STRATEGY FUND
</TABLE>
- ----------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF PREMIUMS
CALL OPTIONS WRITTEN SHARES COVERED RECEIVED
- ----------------------------------------------------------
<S> <C> <C>
Outstanding call options written at beginning
of period..................................... -- --
Options written................................ 5,000 $ 5,274
Options exercised.............................. (5,000) (5,274)
-------------- ------------
Outstanding call options written at end of
period........................................ -- --
-------------- ------------
-------------- ------------
</TABLE>
- ----------------------------------------------------------
Transactions in options written for the six months ended July 31, 1994 were
as follows:
<TABLE>
<S> <C> <C>
INTERNATIONAL EQUITY FOCUS FUND
</TABLE>
- ----------------------------------------------------------
<TABLE>
<CAPTION>
PAR VALUE
COVERED
BY WRITTEN PREMIUMS
CALL OPTIONS WRITTEN OPTIONS RECEIVED
- ----------------------------------------------------------
<S> <C> <C>
Outstanding call options written at beginning
of period..................................... 2,000,000 $ 15,500
Options written................................ 2,944,320 170,162
Options expired................................ (4,850,000) (34,787)
Options exercised.............................. (93,277) (74,253)
-------------- ------------
Outstanding call options written at end of
period........................................ 1,043 $ 76,622
-------------- ------------
-------------- ------------
</TABLE>
- ----------------------------------------------------------
<TABLE>
<CAPTION>
PAR VALUE
COVERED
BY WRITTEN PREMIUMS
PUT OPTIONS WRITTEN OPTIONS RECEIVED
- ----------------------------------------------------------
<S> <C> <C>
Outstanding put options written at beginning of
period........................................ 13,000,000 $ 103,350
Options written................................ 5,431,715 78,657
Options expired................................ (6,900,000) (67,405)
Options exercised.............................. (10,000,000) (64,600)
-------------- ------------
Outstanding put options written at end of
period........................................ 1,531,715 $ 50,002
-------------- ------------
-------------- ------------
</TABLE>
- ----------------------------------------------------------
At June 30, 1994 net unrealized appreciation/depreciation and aggregate cost
for Federal income tax purposes were as follows:
- ----------------------------------------------------------
<TABLE>
<CAPTION>
DEVELOPING
BASIC CAPITAL DOMESTIC
AMERICAN VALUE MARKETS MONEY
BALANCED FOCUS FOCUS MARKET
FUND FUND FUND FUND
- ----------------------------------------------------------
<S> <C> <C> <C> <C>
Appreciated
securities............. $ 3,007,887 $ 3,733,185 $ 34,559 $ 4,588
Depreciated
securities............. (8,262,584) (8,777,311) (437,484) (130,476)
------------ ------------ ----------- ------------
Net unrealized
appreciation/depreciation.. $ (5,254,697) $ (5,044,126) $ (402,925) $ (125,888)
------------ ------------ ----------- ------------
------------ ------------ ----------- ------------
Cost for Federal income
tax purposes*.......... $152,915,107 $124,576,398 $13,048,518 $329,858,704
------------ ------------ ----------- ------------
------------ ------------ ----------- ------------
</TABLE>
- ----------------------------------------------------------
<TABLE>
<CAPTION>
GLOBAL GLOBAL
EQUITY FLEXIBLE STRATEGY UTILITY
GROWTH STRATEGY FOCUS FOCUS
FUND FUND FUND FUND
- ----------------------------------------------------------
<S> <C> <C> <C> <C>
Appreciated securities.... $ 7,386,934 $ 8,946,658 $ 22,440,009 $ 2,143,775
Depreciated securities.... (13,992,004) (11,235,091) (18,199,386) (12,398,709)
------------ ------------ ------------- ------------
Net unrealized
appreciation/depreciation... $ (6,605,070) $ (2,288,433) $ 4,240,623 $(10,254,934)
------------ ------------ ------------- ------------
------------ ------------ ------------- ------------
Cost for Federal income
tax purposes*............. $148,514,730 $251,453,626 $ 445,925,992 $145,651,502
------------ ------------ ------------- ------------
------------ ------------ ------------- ------------
</TABLE>
- ----------------------------------------------------------
<TABLE>
<CAPTION>
HIGH INTERMEDIATE INTERNATIONAL
CURRENT GOVERNMENT INTERNATIONAL EQUITY
INCOME BOND BOND FOCUS
FUND FUND FUND FUND
- ----------------------------------------------------------
<S> <C> <C> <C> <C>
Appreciated securities.... $ 953,171 $ -- $ 39,478 $ 10,016,032
Depreciated securities.... (12,948,833) -- (62,214) (6,609,526)
------------ ------------ ------------- ------------
Net unrealized
appreciation/depreciation. $(11,995,662) $ -- $ (22,736) $ 3,406,506
------------ ------------ ------------- ------------
------------ ------------ ------------- ------------
Cost for Federal income
tax purposes*............. $247,015,509 $ 4,415,632 $ 6,317,386 $178,322,165
------------ ------------ ------------- ------------
------------ ------------ ------------- ------------
</TABLE>
- ----------------------------------------------------------
<TABLE>
<CAPTION>
NATURAL
RESOURCES PRIME QUALITY RESERVE
FOCUS BOND EQUITY ASSETS
FUND FUND FUND FUND
- ----------------------------------------------------------
<S> <C> <C> <C> <C>
Appreciated securities.... $ 927,718 $ 124,060 $ 17,798,228 $ 697
Depreciated securities.... (1,635,844) (20,978,361) (16,705,225) (26,629)
------------ ------------ ------------- ------------
Net unrealized
appreciation/depreciation... $ (708,126) $(20,854,301) $ 1,093,003 $ (25,932)
------------ ------------ ------------- ------------
------------ ------------ ------------- ------------
Cost for Federal income
tax purposes*............. $ 27,226,683 $406,493,127 $ 394,647,878 $ 35,869,134
------------ ------------ ------------- ------------
------------ ------------ ------------- ------------
</TABLE>
- ----------------------------------------------------------
<TABLE>
<CAPTION>
WORLD
INCOME
FOCUS
FUND
- ----------------------------------------------------------
<S> <C>
Appreciated securities.......................................... $ 116,280
Depreciated securities.......................................... (4,374,311)
------------
Net unrealized appreciation/depreciation........................ $(4,258,031)
------------
------------
Cost for Federal income tax purposes*........................... $ 79,366,000
------------
------------
</TABLE>
- ----------------------------------------------------------
* Net of premiums received on options written.
113
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
At June 30, 1994, net realized and unrealized gains (losses) were as follows:
- ----------------------------------------------------------
<TABLE>
<CAPTION>
AMERICAN BASIC VALUE
BALANCED FUND FOCUS FUND
<S> <C> <C> <C> <C>
-------------------------- --------------------------
<CAPTION>
Realized
Realized Unrealized Gains Unrealized
Gains Losses (Losses) Losses
- ----------------------------------------------------------
<S> <C> <C> <C> <C>
Long-term investments.... $ 64,280 $ (5,254,184) $ 1,691,312 $ (5,044,126)
Short-term investments... 408 (513) (141) --
----------- ------------ ----------- ------------
$ 64,688 $ (5,254,697) $ 1,691,171 $ (5,044,126)
----------- ------------ ----------- ------------
----------- ------------ ----------- ------------
</TABLE>
- ----------------------------------------------------------
<TABLE>
<CAPTION>
DEVELOPING CAPITAL DOMESTIC MONEY
MARKETS FOCUS FUND MARKET FUND
<S> <C> <C> <C> <C>
-------------------------- --------------------------
<CAPTION>
Realized Unrealized Realized Unrealized
Losses Losses Gains Losses
- ----------------------------------------------------------
<S> <C> <C> <C> <C>
Long-term investments.... -- $ (402,925) -- --
Short-term investments... $ (2) -- $ 4,276 $ (125,888)
Foreign currency
transactions............. (631) -- -- --
----------- ------------ ----------- ------------
$ (633) $ (402,925) $ 4,276 $ (125,888)
----------- ------------ ----------- ------------
----------- ------------ ----------- ------------
</TABLE>
- ----------------------------------------------------------
<TABLE>
<CAPTION>
EQUITY GROWTH FLEXIBLE STRATEGY
FUND FUND
<S> <C> <C> <C> <C>
-------------------------- --------------------------
<CAPTION>
Realized Unrealized
Realized Unrealized Gains Gains
Gains Losses (Losses) (Losses)
- ----------------------------------------------------------
<S> <C> <C> <C> <C>
Long-term investments.... $ 1,165,329 $ (6,605,070) $ 6,446,013 $ (2,288,433)
Short-term investments... 59 -- 76 --
Foreign currency
Transactions............. -- -- (19,581) 2,692
Currency options
written.................. -- -- 150,998 --
----------- ------------ ----------- ------------
$ 1,165,388 $ (6,605,070) $ 6,577,506 $ (2,285,741)
----------- ------------ ----------- ------------
----------- ------------ ----------- ------------
</TABLE>
- ----------------------------------------------------------
<TABLE>
<CAPTION>
GLOBAL STRATEGY GLOBAL UTILITY
FOCUS FUND FOCUS FUND
<S> <C> <C> <C> <C>
-------------------------- --------------------------
<CAPTION>
Realized Unrealized Realized Unrealized
Gains Gains Gains Gains
(Losses) (Losses) (Losses) (Losses)
- ----------------------------------------------------------
<S> <C> <C> <C> <C>
Long-term investments.... $ 1,113,774 $ 4,240,623 $ (243,621) $(10,254,934)
Short-term investments... -- -- (53) --
Foreign currency
Transaction.............. (194,802) (5,864) 12,809 571
----------- ------------ ----------- ------------
$ 918,972 $ 4,234,759 $ (230,865) $(10,254,363)
----------- ------------ ----------- ------------
----------- ------------ ----------- ------------
</TABLE>
- ----------------------------------------------------------
<TABLE>
<CAPTION>
HIGH CURRENT INTERMEDIATE GOVERNMENT
INCOME FUND BOND FUND
<S> <C> <C> <C> <C>
-------------------------- --------------------------
<CAPTION>
Realized Realized Unrealized
Gains Unrealized Gains Gains
(Losses) Losses (Losses) (Losses)
- ----------------------------------------------------------
<S> <C> <C> <C> <C>
Long-term investments.... $ 487,102 $(11,995,662) $ -- $ --
Short-term investments... (233) -- -- --
----------- ------------ ----------- ------------
$ 486,869 $(11,995,662) $ -- $ --
----------- ------------ ----------- ------------
----------- ------------ ----------- ------------
</TABLE>
- ----------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL BOND INTERNATIONAL EQUITY
FUND FOCUS FUND
<S> <C> <C> <C> <C>
-------------------------- --------------------------
<CAPTION>
Unrealized Realized Unrealized
Realized Gains Gains Gains
Losses (Losses) (Losses) (Losses)
- ----------------------------------------------------------
<S> <C> <C> <C> <C>
Long-term investments.... $ (4,866) $ (22,736) $ 2,834,711 $ 3,233,412
Short-term investments... (48) -- (84) (82)
Foreign currency
Transactions............. (81,987) 2,175 (540,046) (20,699)
Forward foreign exchange
contracts................ -- (25,669) (1,222,892) (2,495,311)
Financial futures
contracts................ -- -- 2,166,210 (322,475)
Currency option
written.................. -- -- (133,883) 2,550
Currency option
purchased................ -- -- (155,406) (389,076)
Investment option
purchased................ -- -- -- 72,852
Investment option
written.................. -- -- 65,450 100,324
----------- ------------ ----------- ------------
$ (86,901) $ (46,230) $ 3,014,060 $ 181,495
----------- ------------ ----------- ------------
----------- ------------ ----------- ------------
</TABLE>
- ----------------------------------------------------------
<TABLE>
<CAPTION>
NATURAL RESOURCES PRIME BOND
FOCUS FUND FUND
<S> <C> <C> <C> <C>
-------------------------- --------------------------
<CAPTION>
Unrealized
Realized Gains Realized Unrealized
Losses (Losses) Losses Losses
- ----------------------------------------------------------
<S> <C> <C> <C> <C>
Long-term investments.... $ (4,538) $ (708,431) $(8,159,583) $(20,854,301)
Short-term investments... (33) 305 (775) --
Foreign currency
transactions............. (1,685) 316 -- --
----------- ------------ ----------- ------------
$ (6,256) $ (707,810) $(8,160,358) $(20,854,301)
----------- ------------ ----------- ------------
----------- ------------ ----------- ------------
</TABLE>
- ----------------------------------------------------------
<TABLE>
<CAPTION>
QUALITY EQUITY RESERVE ASSETS
FUND FUND
<S> <C> <C> <C> <C>
-------------------------- --------------------------
<CAPTION>
Realized Unrealized Realized Unrealized
Gains Gains Losses Losses
- ----------------------------------------------------------
<S> <C> <C> <C> <C>
Long-term investments.... $11,087,378 $ 1,093,003 -- --
Short-term investments... -- -- $ 1,057 $ (25,932)
Foreign currency
transactions............. 36 -- -- --
----------- ------------ ----------- ------------
$11,087,414 $ 1,093,003 $ 1,057 $ (25,932)
----------- ------------ ----------- ------------
----------- ------------ ----------- ------------
</TABLE>
- ----------------------------------------------------------
<TABLE>
<CAPTION>
WORLD INCOME
FOCUS FUND
<S> <C> <C> <C> <C>
--------------------------
<CAPTION>
Realized Unrealized
Gains Gains
(Losses) (Losses)
- ----------------------------------------------------------
<S> <C> <C> <C> <C>
Long-term investments.... $ (572,986) $ (4,258,031)
Short-term investments... 79 --
Foreign currency
transactions............. 54,525 12,390
Forward foreign exchange
contracts................ (221,010) (78,784)
----------- ------------
$ (739,392) $ (4,324,425)
----------- ------------
----------- ------------
</TABLE>
- ----------------------------------------------------------
114
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
4. CAPITAL SHARE TRANSACTIONS:
Transactions in capital shares were as follows:
<TABLE>
<S> <C> <C>
AMERICAN BALANCED FUND
</TABLE>
- ----------------------------------------------------------
<TABLE>
<CAPTION>
For the Six Months Ended Dollar
June 30, 1994 Shares Amount
- ----------------------------------------------------------
<S> <C> <C>
Shares sold........................................ 3,331,371 $ 45,437,895
Shares issued to shareholders in reinvestment of
dividends & distributions........................ 120,222 1,661,473
------------ ------------
Total issued....................................... 3,451,593 47,099,368
Shares redeemed.................................... (251,995) (3,394,592)
------------ ------------
Net increase....................................... 3,199,598 $ 43,704,776
------------ ------------
------------ ------------
</TABLE>
- ----------------------------------------------------------
<TABLE>
<CAPTION>
For the Year Ended Dollar
December 31, 1993 Shares Amount
- ----------------------------------------------------------
<S> <C> <C>
Shares sold........................................ 6,659,885 $ 91,353,359
Shares issued to shareholders in reinvestment of
dividends & distributions........................ 92,618 1,203,002
------------ ------------
Total issued....................................... 6,752,503 92,556,361
Shares redeemed.................................... (491,212) (6,703,257)
------------ ------------
Net increase....................................... 6,261,291 $ 85,853,104
------------ ------------
------------ ------------
</TABLE>
- ----------------------------------------------------------
<TABLE>
<S> <C> <C>
BASIC VALUE FOCUS FUND
- ----------------------------------------------------------
<CAPTION>
For the Six Months Ended Dollar
June 30, 1994 Shares Amount
- ----------------------------------------------------------
<S> <C> <C>
Shares sold........................................ 6,790,979 $ 74,157,366
Shares issued to shareholders in reinvestment of
dividends & distributions........................ 14,302 156,177
------------ ------------
Total issued....................................... 6,805,281 74,313,543
Shares redeemed.................................... (7,352) (78,332)
------------ ------------
Net increase....................................... 6,797,929 $ 74,235,211
------------ ------------
------------ ------------
</TABLE>
- ----------------------------------------------------------
<TABLE>
<CAPTION>
For the Period July 1, 1993+ to Dollar
December 31, 1993 Shares Amount
- ----------------------------------------------------------
<S> <C> <C>
Shares sold........................................ 4,316,053 $ 47,688,307
Shares issued to shareholders in reinvestment of
dividends & distributions........................ -- --
------------ ------------
Total issued....................................... 4,316,053 47,688,307
Shares redeemed.................................... (202,978) (2,154,283)
------------ ------------
Net increase....................................... 4,113,075 $ 45,534,024
------------ ------------
------------ ------------
</TABLE>
- ----------------------------------------------------------
+ Prior to July 1, 1993 (commencement of operations), the Fund issued 200,010
shares to MLAM for $2,000,100.
<TABLE>
<S> <C> <C>
DEVELOPING CAPITAL MARKETS FOCUS FUND
</TABLE>
- ----------------------------------------------------------
<TABLE>
<CAPTION>
For the Period May 2, 1994+ to Dollar
June 30, 1994 Shares Amount
- ----------------------------------------------------------
<S> <C> <C>
Shares sold........................................ 578,352 $ 5,757,120
Shares issued to shareholders in reinvestment of
dividends & distributions........................ -- --
------------ ------------
Total issued....................................... 578,352 5,757,120
Shares redeemed.................................... (6,820) (68,541)
------------ ------------
Net increase....................................... 571,532 $ 5,688,579
------------ ------------
------------ ------------
</TABLE>
- ----------------------------------------------------------
+ Prior to May 2, 1994 (commencement of operations), the Fund issued 800,000
shares to MLAM for $8,000,000.
<TABLE>
<S> <C> <C>
DOMESTIC MONEY MARKET FUND
</TABLE>
- ----------------------------------------------------------
<TABLE>
<CAPTION>
For the Six Months Ended Dollar
June 30, 1994 Shares Amount
- ----------------------------------------------------------
<S> <C> <C>
Shares sold........................................ 339,747,412 $339,747,412
Shares issued to shareholders in reinvestment of
dividends & distributions........................ 3,901,662 3,901,662
------------ ------------
Total issued....................................... 343,649,074 343,649,074
Shares redeemed.................................... (184,135,316) (184,135,316)
------------ ------------
Net increase....................................... 159,513,758 $159,513,758
------------ ------------
------------ ------------
</TABLE>
- ----------------------------------------------------------
<TABLE>
<CAPTION>
For the Year Ended Dollar
December 31, 1993+ Shares Amount
- ----------------------------------------------------------
<S> <C> <C>
Shares sold........................................ 371,125,144 $371,125,144
Shares issued to shareholders in reinvestment of
dividends & distributions........................ 2,796,153 2,796,153
------------ ------------
Total issued....................................... 373,921,297 373,921,297
Shares redeemed.................................... (244,516,209) (244,516,209)
------------ ------------
Net increase....................................... 129,405,088 $129,405,088
------------ ------------
------------ ------------
</TABLE>
- ----------------------------------------------------------
+ Prior to February 20, 1992 (commencement of operations), the Fund issued
2,000,100 shares to MLAM for $2,000,100.
<TABLE>
<S> <C> <C>
EQUITY GROWTH FUND
</TABLE>
- ----------------------------------------------------------
<TABLE>
<CAPTION>
For the Six Months Ended Dollar
June 30, 1994 Shares Amount
- ----------------------------------------------------------
<S> <C> <C>
Shares sold........................................ 2,900,307 $ 58,953,887
Shares issued to shareholders in reinvestment of
dividends distributions.......................... 43,323 895,916
------------ ------------
Total issued....................................... 2,943,630 59,849,803
Shares redeemed.................................... (90,111) (1,795,710)
------------ ------------
Net increase....................................... 2,853,519 $ 58,054,093
------------ ------------
------------ ------------
</TABLE>
- ----------------------------------------------------------
<TABLE>
<CAPTION>
For the Year Ended Dollar
December 31, 1993 Shares Amount
- ----------------------------------------------------------
<S> <C> <C>
Shares sold........................................ 3,715,936 $ 69,928,165
Shares issued to shareholders in reinvestment of
dividends & distributions........................ 330 5,834
------------ ------------
Total issued....................................... 3,716,266 69,933,999
Shares redeemed.................................... (296,830) (5,457,567)
------------ ------------
Net increase....................................... 3,419,436 $ 64,476,432
------------ ------------
------------ ------------
</TABLE>
- ----------------------------------------------------------
<TABLE>
<S> <C> <C>
FLEXIBLE STRATEGY FUND
</TABLE>
- ----------------------------------------------------------
<TABLE>
<CAPTION>
For the Six Months Ended Dollar
June 30, 1994 Shares Amount
- ----------------------------------------------------------
<S> <C> <C>
Shares sold........................................ 5,019,553 $ 76,407,609
Shares issued to shareholders in reinvestment of
dividends & distributions........................ 537,642 8,274,306
------------ ------------
Total issued....................................... 5,557,195 84,681,915
Shares redeemed.................................... (460,611) (6,976,898)
------------ ------------
Net increase....................................... 5,096,584 $ 77,705,017
------------ ------------
------------ ------------
</TABLE>
- ----------------------------------------------------------
<TABLE>
<CAPTION>
For the Year Ended Dollar
December 31, 1993 Shares Amount
- ----------------------------------------------------------
<S> <C> <C>
Shares sold........................................ 6,911,886 $103,761,462
Shares issued to shareholders in reinvestment of
dividends & distributions........................ 100,932 1,460,495
------------ ------------
Total issued....................................... 7,012,818 105,221,957
Shares redeemed.................................... (820,921) (12,310,730)
------------ ------------
Net increase....................................... 6,191,897 $ 92,909,143
------------ ------------
------------ ------------
</TABLE>
115
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
- ----------------------------------------------------------
<TABLE>
<S> <C> <C>
GLOBAL STRATEGY FOCUS FUND
</TABLE>
- ----------------------------------------------------------
<TABLE>
<CAPTION>
For the Six Months Ended Dollar
June 30, 1994 Shares Amount
- ----------------------------------------------------------
<S> <C> <C>
Shares sold........................................ 16,324,808 $198,838,004
Shares issued to shareholders in reinvestment of
dividends & distributions........................ 250,906 3,018,396
------------ ------------
Total issued....................................... 16,575,714 201,856,400
Shares redeemed.................................... (880,878) (10,717,376)
------------ ------------
Net increase....................................... 15,694,836 $191,139,024
------------ ------------
------------ ------------
</TABLE>
- ----------------------------------------------------------
- ----------------------------------------------------------
<TABLE>
<CAPTION>
For the Year Ended Dollar
December 31, 1993 Shares Amount
- ----------------------------------------------------------
<S> <C> <C>
Shares sold........................................ 20,813,811 $241,520,508
Shares issued to shareholders in reinvestment of
dividends & distributions........................ 35,643 394,216
------------ ------------
Total issued....................................... 20,849,454 241,914,724
Shares redeemed.................................... (213,171) (2,402,857)
------------ ------------
Net increase....................................... 20,636,283 $239,511,867
------------ ------------
------------ ------------
</TABLE>
- ----------------------------------------------------------
<TABLE>
<S> <C> <C>
GLOBAL UTILITY FOCUS FUND
</TABLE>
- ----------------------------------------------------------
<TABLE>
<CAPTION>
For the Six Months Ended Dollar
June 30, 1994 Shares Amount
- ----------------------------------------------------------
<S> <C> <C>
Shares sold........................................ 4,188,089 $ 42,885,573
Shares issued to shareholders in reinvestment of
dividends & distributions........................ 146,376 1,477,492
------------ ------------
Total issued....................................... 4,334,465 44,363,065
Shares redeemed.................................... (96,842) (962,935)
------------ ------------
Net increase....................................... 4,237,623 $ 43,400,130
------------ ------------
------------ ------------
</TABLE>
- ----------------------------------------------------------
<TABLE>
<CAPTION>
For the Period July 1, 1993+ to Dollar
December 31, 1993 Shares Amount
- ----------------------------------------------------------
<S> <C> <C>
Shares sold........................................ 9,794,562 $101,325,529
Shares issued to shareholders in reinvestment of
dividends & distributions........................ 11,422 118,908
------------ ------------
Total issued....................................... 9,805,984 101,444,437
Shares redeemed.................................... (201,232) (2,092,591)
------------ ------------
Net increase....................................... 9,604,752 $ 99,351,846
------------ ------------
------------ ------------
</TABLE>
- ----------------------------------------------------------
+ Commencement of Operations.
<TABLE>
<S> <C> <C>
HIGH CURRENT INCOME FUND
</TABLE>
- ----------------------------------------------------------
<TABLE>
<CAPTION>
For the Six Months Ended Dollar
June 30, 1994 Shares Amount
- ----------------------------------------------------------
<S> <C> <C>
Shares sold........................................ 7,752,855 $ 90,996,617
Shares issued to shareholders in reinvestment of
dividends & distributions........................ 695,182 8,090,741
------------ ------------
Total issued....................................... 8,448,037 99,087,358
Shares redeemed.................................... (648,372) (7,777,077)
------------ ------------
Net increase....................................... 7,799,665 $ 91,310,281
------------ ------------
------------ ------------
</TABLE>
- ----------------------------------------------------------
<TABLE>
<CAPTION>
For the Year Ended Dollar
December 31, 1993 Shares Amount
- ----------------------------------------------------------
<S> <C> <C>
Shares sold........................................ 11,096,856 $130,007,224
Shares issued to shareholders in reinvestment of
dividends & distributions........................ 517,507 6,035,740
------------ ------------
Total issued....................................... 11,614,363 136,042,964
Shares redeemed.................................... (424,381) (4,968,409)
------------ ------------
Net increase....................................... 11,189,982 $131,074,555
------------ ------------
------------ ------------
</TABLE>
- ----------------------------------------------------------
<TABLE>
<S> <C> <C>
INTERMEDIATE GOVERNMENT BOND FUND
</TABLE>
- ----------------------------------------------------------
<TABLE>
<CAPTION>
For the Period May 2, 1994+ to Dollar
June 30, 1994 Shares Amount
- ----------------------------------------------------------
<S> <C> <C>
Shares sold........................................ 302,313 $ 3,029,423
Shares issued to shareholders in reinvestment of
dividends & distributions........................ 547 5,477
------------ ------------
Total issued....................................... 302,860 3,034,900
Shares redeemed (15) (152)
------------ ------------
Net increase....................................... 302,845 $ 3,034,748
------------ ------------
------------ ------------
</TABLE>
- ----------------------------------------------------------
+ Prior to May 2, 1994 (commencement of operations), the Fund issued 200,000
shares to MLAM for $2,000,000.
<TABLE>
<S> <C> <C>
INTERNATIONAL BOND FUND
</TABLE>
- ----------------------------------------------------------
<TABLE>
<CAPTION>
For the Period May 2, 1994+ to Dollar
June 30, 1994 Shares Amount
- ----------------------------------------------------------
<S> <C> <C>
Shares sold........................................ 132,535 $ 1,305,051
Shares issued to shareholders in reinvestment of
dividends........................................ 1,588 15,578
------------ ------------
Total issued....................................... 134,123 1,320,629
Shares redeemed.................................... (78) (775)
------------ ------------
Net increase....................................... 134,045 $ 1,319,854
------------ ------------
------------ ------------
</TABLE>
- ----------------------------------------------------------
+ Prior to May 2, 1994 (commencement of operations), the Fund issued 500,000
shares to MLAM for $5,000,000.
- ----------------------------------------------------------
<TABLE>
<S> <C> <C>
INTERNATIONAL EQUITY FOCUS FUND
</TABLE>
- ----------------------------------------------------------
<TABLE>
<CAPTION>
For the Six Months Ended Dollar
June 30, 1994 Shares Amount
- ----------------------------------------------------------
<S> <C> <C>
Shares sold........................................ 9,877,948 $111,016,957
Shares issued to shareholders in reinvestment of
dividends & distributions........................ 98,490 1,074,524
------------ ------------
Total issued....................................... 9,976,438 112,091,481
Shares redeemed.................................... (76,049) (847,641)
------------ ------------
Net increase....................................... 9,900,389 $111,243,840
------------ ------------
------------ ------------
</TABLE>
- ----------------------------------------------------------
<TABLE>
<CAPTION>
For the Period July 1, 1993+ to Dollar
December 31, 1993 Shares Amount
- ----------------------------------------------------------
<S> <C> <C>
Shares sold........................................ 6,976,839 $ 72,732,083
Shares issued to shareholders in reinvestment of
dividends & distributions........................ -- --
------------ ------------
Total issued....................................... 6,976,839 72,732,083
Shares redeemed.................................... (804,344) (8,379,435)
------------ ------------
Net increase....................................... 6,172,495 $ 64,352,648
------------ ------------
------------ ------------
</TABLE>
- ----------------------------------------------------------
+ Commencement of Operations.
116
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
NATURAL RESOURCES FOCUS FUND
</TABLE>
- ----------------------------------------------------------
<TABLE>
<CAPTION>
For the Six Months Ended Dollar
June 30, 1994 Shares Amount
- ----------------------------------------------------------
<S> <C> <C>
Shares sold........................................ 1,209,967 $ 13,257,349
Shares issued to shareholders in reinvestment of
dividends & distributions........................ 7,752 83,948
------------ ------------
Total issued....................................... 1,217,719 13,341,297
Shares redeemed.................................... (82,694) (908,849)
------------ ------------
Net increase....................................... 1,135,025 $ 12,432,448
------------ ------------
------------ ------------
</TABLE>
- ----------------------------------------------------------
<TABLE>
<CAPTION>
For the Year Ended Dollar
December 31, 1993 Shares Amount
- ----------------------------------------------------------
<S> <C> <C>
Shares sold........................................ 1,268,742 $ 13,999,275
Shares issued to shareholders in reinvestment of
dividends & distributions........................ 3,674 40,449
------------ ------------
Total issued....................................... 1,272,416 14,039,724
Shares redeemed.................................... (327,587) (3,584,398)
------------ ------------
Net increase....................................... 944,829 $ 10,571,877
------------ ------------
------------ ------------
</TABLE>
- ----------------------------------------------------------
<TABLE>
<S> <C> <C>
PRIME BOND FUND
</TABLE>
- ----------------------------------------------------------
<TABLE>
<CAPTION>
For the Six Months Ended Dollar
June 30, 1994 Shares Amount
- ----------------------------------------------------------
<S> <C> <C>
Shares sold........................................ 8,170,170 $ 97,779,264
Shares issued to shareholders in reinvestment of
dividends & distributions........................ 1,226,026 14,722,292
------------ ------------
Total issued....................................... 9,396,196 112,501,556
Shares redeemed.................................... (844,612) (10,084,019)
------------ ------------
Net increase....................................... 8,551,584 $102,417,537
------------ ------------
------------ ------------
</TABLE>
- ----------------------------------------------------------
<TABLE>
<CAPTION>
For the Year Ended Dollar
December 31, 1993 Shares Amount
- ----------------------------------------------------------
<S> <C> <C>
Shares sold........................................ 18,166,471 $229,284,947
Shares issued to shareholders in reinvestment of
dividends & distributions........................ 835,307 10,463,170
------------ ------------
Total issued....................................... 19,001,778 239,748,117
Shares redeemed.................................... (1,205,821) (15,218,080)
------------ ------------
Net increase....................................... 17,795,957 $224,530,037
------------ ------------
------------ ------------
</TABLE>
- ----------------------------------------------------------
<TABLE>
<S> <C> <C>
QUALITY EQUITY FUND
</TABLE>
- ----------------------------------------------------------
<TABLE>
<CAPTION>
For the Six Months Ended Dollar
June 30, 1994 Shares Amount
- ----------------------------------------------------------
<S> <C> <C>
Shares sold........................................ 4,225,097 $119,072,253
Shares issued to shareholders in reinvestment of
dividends & distributions........................ 135,226 3,779,554
------------ ------------
Total issued....................................... 4,360,323 122,851,807
Shares redeemed.................................... (248,790) (6,960,949)
------------ ------------
Net increase....................................... 4,111,533 $115,890,858
------------ ------------
------------ ------------
</TABLE>
- ----------------------------------------------------------
<TABLE>
<CAPTION>
For the Year Ended Dollar
December 31, 1993 Shares Amount
- ----------------------------------------------------------
<S> <C> <C>
Shares sold........................................ 7,584,386 $204,488,643
Shares issued to shareholders in reinvestment of
dividends & distributions........................ 38,501 99,487
------------ ------------
Total issued....................................... 7,622,887 204,588,130
Shares redeemed.................................... (412,554) (11,039,403)
------------ ------------
Net increase....................................... 7,210,333 $193,548,727
------------ ------------
------------ ------------
</TABLE>
- ----------------------------------------------------------
<TABLE>
<S> <C> <C>
RESERVE ASSETS FUND
</TABLE>
- ----------------------------------------------------------
<TABLE>
<CAPTION>
For the Six Months Ended Dollar
June 30, 1994 Shares Amount
- ----------------------------------------------------------
<S> <C> <C>
Shares sold........................................ 13,549,291 $ 13,549,291
Shares issued to shareholders in reinvestment of
dividends & distributions........................ 517,275 517,275
------------ ------------
Total issued....................................... 14,066,566 14,066,566
Shares redeemed.................................... (8,320,084) (8,320,084)
------------ ------------
Net increase....................................... 5,746,482 $ 5,746,482
------------ ------------
------------ ------------
</TABLE>
- ----------------------------------------------------------
<TABLE>
<CAPTION>
For the Year Ended Dollar
December 31, 1993 Shares Amount
- ----------------------------------------------------------
<S> <C> <C>
Shares sold........................................ 18,903,263 $ 18,903,263
Shares issued to shareholders in reinvestment of
dividends & distributions........................ 772,770 772,770
------------ ------------
Total issued....................................... 19,676,033 19,676,033
Shares redeemed.................................... (16,275,313) (16,275,313)
------------ ------------
Net increase....................................... 3,400,720 $ 3,400,720
------------ ------------
------------ ------------
</TABLE>
- ----------------------------------------------------------
<TABLE>
<S> <C> <C>
WORLD INCOME FOCUS FUND
</TABLE>
- ----------------------------------------------------------
<TABLE>
<CAPTION>
For the Six Months Ended Dollar
June 30, 1994 Shares Amount
- ----------------------------------------------------------
<S> <C> <C>
Shares sold........................................ 3,192,122 $ 32,079,388
Shares issued to shareholders in reinvestment of
dividends & distributions........................ 238,382 2,372,303
------------ ------------
Total issued....................................... 3,430,504 34,451,691
Shares redeemed.................................... (153,825) (1,568,125)
------------ ------------
Net increase....................................... 3,276,679 $ 32,883,566
------------ ------------
------------ ------------
</TABLE>
- ----------------------------------------------------------
<TABLE>
<CAPTION>
For the Period July 1, 1993+ to Dollar
December 31, 1993 Shares Amount
- ----------------------------------------------------------
<S> <C> <C>
Shares sold........................................ 4,880,334 $ 49,656,106
Shares issued to shareholders in reinvestment of
dividends & distributions........................ 63,693 647,784
------------ ------------
Total issued....................................... 4,944,037 50,303,890
Shares redeemed.................................... (855,476) (8,720,702)
------------ ------------
Net increase....................................... 4,088,561 $ 41,583,188
------------ ------------
------------ ------------
</TABLE>
- ----------------------------------------------------------
+ Prior to July 1,1993 (commencement of operations), the Fund issued 800,010
shares to MLAM for $8,000,100.
5. CAPITAL LOSS CARRYFORWARD:
At December 31, 1993, the Company had capital loss carryforwards of
approximately $52,000 in the Basic Value Focus Fund, all of which expires in
2001, $119,000 in the High Current Income Fund, all of which expires in 1999,
and $48,000 in the Natural Resources Focus Fund, all of which expires in 2000.
These will be available to offset like amount of any future taxable gains.
6. LOANED SECURITIES:
At June 30, 1994, the Prime Bond Fund held US Treasury bonds having an aggregate
value of approximately $11,603,000 as collateral for portfolio securities loaned
having a market value of approximately $11,112,000.
117
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
7. COMMITMENTS:
At June 30, 1994, the Global Strategy Focus Fund, Global Utility Focus Fund,
International Bond Fund, and International Equity Focus Fund had entered into
forward exchange contracts under which they agreed to purchase various foreign
currencies with values of approximately $4,400,000, $659,000, $356,000 and
$505,000 and World Income Focus had entered into forward exchange contracts
under which it agreed to purchase and sell various foreign currencies with
values of approximately $688,000 and $717,000.
8. SUBSEQUENT EVENT:
On July 6, 1994, the Board of Directors declared net investment income
dividends and capital gains distributions per share payable on July 13, 1994 to
shareholders of record as of July 5, 1994 as follows:
- ----------------------------------------------------------
<TABLE>
<CAPTION>
INVESTMENT CAPITAL
FUND INCOME-NET GAINS
- ----------------------------------------------------------
<S> <C> <C>
American Balanced Fund............................ $ 0.213249 $ --
Basic Value Focus Fund............................ 0.068519 --
Developing Capital Markets Focus Fund............. -- --
Domestic Money Market Fund........................ -- --
Equity Growth Fund................................ -- --
Flexible Strategy Fund............................ 0.143486 --
Global Strategy Focus Fund........................ 0.130778 --
Global Utility Focus Fund......................... 0.082436 --
High Current Income Fund.......................... 0.083559 --
Intermediate Government Bond Fund................. 0.018799 --
International Bond Fund........................... 0.050503 --
International Equity Focus Fund................... 0.036823 --
Natural Resources Focus Fund...................... 0.093085 --
Prime Bond Fund................................... 0.059503 --
Quality Equity Fund............................... 0.149029 --
Reserve Assets Fund............................... -- --
World Income Focus Fund........................... 0.060454 --
</TABLE>
118
<PAGE>
<PAGE>
- ----------------------------------------------------------
MERRILL LYNCH
VARIABLE SERIES FUNDS, INC.
- ----------------------------------------------------------
PRINCIPAL OFFICE OF THE FUNDS
Box 9011
Princeton, NJ 08543-9011
DISTRIBUTOR
Merrill Lynch Funds Distributor, Inc.
CUSTODIAN
For all Funds except Developing Capital
Markets Focus Fund:
The Bank of New York
110 Washington Street
New York, NY 10286
For Developing Capital Markets Focus Fund:
Chase Manhattan Bank
Chase Metro Tech Center
Brooklyn, NY 11245
TRANSFER AGENT
Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 637-3863
DIRECTORS AND OFFICERS
Arthur Zeikel
Adrian Holmes
President
Vice President
Joe Grills
Vincent T. Lathbury III
Director
Vice President
Walter Mintz
Peter Lehman
Director
Vice President
Melvin R. Seiden
Fredric Lutcher
Director
Vice President
Stephen B. Swensrud
Jay C. Harbeck
Director
Vice President
Harry Woolf
Robert Parish
Director
Vice President
Terry K. Glenn
Grace Pineda
Executive Vice President
Vice President
Bernard J. Durnin
Kevin Rendino
Senior Vice President
Vice President
N. John Hewitt
Walter Rogers
Senior Vice President
Vice President
Christopher G. Ayoub
Aldona A. Schwartz
Vice President
Vice President
Andrew Bascand
Stephen Silverman
Vice President
Vice President
Donald C. Burke
Gerald M. Richard
Vice President
Treasurer
Denis B. Cummings
Michael J. Hennewinkel
Vice President
Secretary
Joel Heymsfeld
Vice President
119
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