MERRIL LYNCH
RETIREMENT
RESERVES
MONEY FUND
Merrill Lynch
Retirement Series Trust
[GRAPHIC OMITTED]
STRATEGIC
Performance
Semi-Annual Report
April 30, 1998
<PAGE>
Merrill Lynch Retirement Reserves Money Fund April 30, 1998
DEAR SHAREHOLDER
For the six-month period ended April 30, 1998, Merrill Lynch Retirement Reserves
Money Fund's net annualized yield was 5.26%.* The Fund's 7-day yield as of April
30, 1998 was 5.19%.
The average portfolio maturity for Merrill Lynch Retirement Reserves Money Fund
at April 30, 1998 was 73 days, compared to 77 days at October 31, 1997.
The Environment
The six-month period ended April 30, 1998 was positive for most capital markets
worldwide, despite periods of volatility. In the United States, sentiment
fluctuated between a variety of outlooks. At times, US stock and bond prices
reflected expectations that the slowdown in Asian economic growth would lead to
a sharp decline in US business activity and, ultimately, a deflationary
environment. The deterioration of economic conditions in Japan was of particular
concern. During other periods, US investors appeared to expect that the positive
trends of a moderately expanding economy, declining unemployment, enhanced
productivity and corporate profits growth would continue, unimpeded by the
developments in Asia. To date, there have been only a few signs that Asia's
troubles are influencing US economic activity. In Europe, the major event was
greater progress toward achieving European Monetary Union, although concerns
have arisen that interest rates there will have to be increased to curtail
inflationary pressures.
For the six-month period ended April 30, 1998, Merrill Lynch Retirement
Reserves Money Fund held a moderately positive view on the market. We generally
limited our overnight positions in favor of other short-term money market
securities, with an emphasis on one-year spread issues for yield enhancement.
As 1998 progresses, it is likely that investor focus will remain on developments
in Asia. For those economies that continue to expand, investors will watch for
signs that inflation is still not a threat. Evidence of ongoing, noninflationary
gross domestic product growth should continue to exert a positive influence on
the capital markets worldwide.
The Fund's portfolio composition at the end of the April period and as of our
last report is detailed below:
- --------------------------------------------------------------------------------
4/30/98 10/31/97
- --------------------------------------------------------------------------------
Bank Notes ..................................... 9.8% 9.3%
Certificates of Deposit ........................ 4.0 3.6
Certificates of Deposit--European .............. 1.2 1.3
Certificates of Deposit--Yankee ................ 6.8 5.2
Commercial Paper ............................... 48.2 38.2
Corporate Notes ................................ 11.3 10.4
Funding Agreements ............................. 0.6 0.5
Master Notes ................................... 1.3 1.5
Repurchase Agreements .......................... 2.1 10.1
US Government, Agency &
Instrumentality Obligations--
Discount Notes ............................... 0.9 1.6
US Government, Agency &
Instrumentality Obligations--
Non-Discount Notes ........................... 14.8 20.3
Liabilities in Excess of Other Assets .......... (1.0) (2.0)
------ ------
Total 100.0% 100.0%
====== ======
- --------------------------------------------------------------------------------
In Conclusion
We appreciate your continued interest in Merrill Lynch Retirement Reserves Money
Fund, and we look forward to assisting you with your financial needs in the
months and years ahead.
Sincerely,
/s/ Arthur Zeikel
Arthur Zeikel
President
/s/ John Ng
John Ng
Vice President and Portfolio Manager
June 4, 1998
Effective January 14, 1998, John Ng assumed the responsibilities of day-to-day
management of Merrill Lynch Retirement Reserves Money Fund. Mr. Ng has been
Director of Merrill Lynch Asset Management, L.P. (MLAM) since 1998. Prior
thereto, he was Vice President of MLAM from 1984 to 1998.
* Based on a constant investment throughout the period, with dividends
compounded daily, and reflecting a net return to the investor after all
expenses.
1
<PAGE>
Merrill Lynch Retirement Reserves Money Fund April 30, 1998
SCHEDULE OF INVESTMENTS (in Thousands)
Face Interest Maturity Value
Issue Amount Rate* Date (Note 1a)
================================================================================
Bank Notes--9.8%
================================================================================
American Express $ 30,000 5.616+% 2/12/99 $ 30,000
Centurion Bank 31,000 5.606+ 3/19/99 31,000
39,000 5.606+ 3/19/99 39,000
50,000 5.630+ 4/05/99 50,000
- --------------------------------------------------------------------------------
Bank of America 40,000 5.93 6/24/98 40,003
N.T. & S.A. 60,000 5.31+ 6/30/98 59,992
- --------------------------------------------------------------------------------
Comerica Bank, 64,500 5.598+ 2/02/99 64,481
Detroit 35,500 5.556+ 2/09/99 35,487
- --------------------------------------------------------------------------------
FCC National Bank 22,000 5.55+ 2/23/99 21,988
- --------------------------------------------------------------------------------
First National Bank 45,000 6.02 6/11/98 45,007
of Chicago 28,000 5.55+ 2/23/99 27,984
- --------------------------------------------------------------------------------
First Tennessee 20,000 6.10 5/15/98 20,002
Bank N.A., Memphis 38,000 5.65 3/02/99 37,912
9,500 5.80 4/08/99 9,500
5,000 5.82 4/30/99 4,996
- --------------------------------------------------------------------------------
KeyBank N.A. 44,000 5.52+ 5/06/98 44,000
40,000 5.52+ 5/19/98 39,999
77,400 5.50+ 8/20/98 77,383
100,000 5.50+ 8/28/98 99,978
- --------------------------------------------------------------------------------
NationsBank N.A. 100,000 5.57+ 4/30/99 99,951
- --------------------------------------------------------------------------------
Northern Trust 25,000 5.96 6/17/98 25,003
Company 14,000 5.95 6/24/98 14,001
- --------------------------------------------------------------------------------
PNC Bank N.A. 150,000 5.60+ 10/01/98 149,957
- --------------------------------------------------------------------------------
Royal Bank 29,000 5.32+ 6/30/98 28,996
of Canada
- --------------------------------------------------------------------------------
SouthTrust Bank 40,000 5.58+ 3/25/99 39,986
N.A.
- --------------------------------------------------------------------------------
SunTrust Bank, 25,000 5.80 7/24/98 24,995
Atlanta
- --------------------------------------------------------------------------------
Total Bank Notes
(Cost--$1,161,646) ....................................... 1,161,601
================================================================================
Certificates of Deposit--4.0%
================================================================================
Chase Manhattan 55,000 5.87 7/21/98 55,001
Bank
- --------------------------------------------------------------------------------
Morgan Guaranty 150,000 5.80 7/28/98 149,982
Trust Company 100,000 5.77 10/07/98 99,954
of N.Y. 50,000 5.55 2/02/99 49,871
- --------------------------------------------------------------------------------
National City Bank, 25,000 5.57+ 2/05/99 24,991
Indiana
- --------------------------------------------------------------------------------
National City Bank, 50,000 5.546+ 3/08/99 49,979
Ohio
- --------------------------------------------------------------------------------
NationsBank N.A. 38,000 5.55 2/09/99 37,902
- --------------------------------------------------------------------------------
Total Certificates of Deposit
(Cost--$467,913) ......................................... 467,680
================================================================================
Certificates of Deposit--European--1.2%
================================================================================
Abbey National 60,000 5.93 9/17/98 60,014
Treasury Services
Plc, London
- --------------------------------------------------------------------------------
Bank of Scotland 20,000 5.93 9/17/98 20,005
Treasury Services
Plc, London
- --------------------------------------------------------------------------------
Westdeutsche 60,000 5.83 8/03/98 59,994
Landesbank
Girozentrale,
London
- --------------------------------------------------------------------------------
Total Certificates of Deposit--
European (Cost--$140,003) ................................ 140,013
================================================================================
Certificates of Deposit--Yankee--6.8%
================================================================================
ABN-AMRO Bank 25,000 5.77 7/27/98 24,995
N.V., Chicago 30,000 5.77 7/28/98 29,994
25,000 5.645 3/22/99 24,946
- --------------------------------------------------------------------------------
Barclays Bank Plc, 50,000 5.94 6/30/98 50,003
NY 50,000 5.715 10/09/98 49,965
- --------------------------------------------------------------------------------
Bayerische 100,000 5.87 10/27/98 100,004
Hypotheken-und- 50,000 5.65 3/23/99 49,895
Wechsel Bank, NY 50,000 5.70 3/29/99 49,916
- --------------------------------------------------------------------------------
Canadian Imperial 55,000 5.79 10/06/98 54,979
Bank of Commerce,
NY
- --------------------------------------------------------------------------------
Credit Suisse First 55,000 5.705+ 12/11/98 55,000
Boston, NY
- --------------------------------------------------------------------------------
Deutsche Bank AG, 22,000 5.94 10/22/98 22,008
NY 50,000 5.645 3/22/99 49,891
- --------------------------------------------------------------------------------
Landesbank 40,000 6.00 6/09/98 40,007
Hessen-Thuringen
Girozentrale, NY
- --------------------------------------------------------------------------------
Norddeutsche 25,000 5.68 3/05/99 24,953
Landesbank
Girozentrale, NY
- --------------------------------------------------------------------------------
Royal Bank of 25,000 5.555 2/11/99 24,932
Canada, NY 50,000 5.645 3/09/99 49,891
- --------------------------------------------------------------------------------
Swiss Bank Corp., 25,000 5.95 7/02/98 25,003
NY
- --------------------------------------------------------------------------------
Westdeutsche 25,000 5.94 6/29/98 25,002
Landesbank 50,000 5.78 7/31/98 49,992
Girozentrale, NY
- --------------------------------------------------------------------------------
Total Certificates of Deposit--Yankee
(Cost--$801,784) ......................................... 801,376
================================================================================
Commercial Paper--48.2%
================================================================================
Aesop Funding Corp. 12,900 5.52 5/27/98 12,847
35,000 5.53 5/28/98 34,849
20,000 5.50 6/05/98 19,890
30,000 5.50 6/05/98 29,835
- --------------------------------------------------------------------------------
Allomon Funding 30,408 5.50 7/16/98 30,047
Corporation
- --------------------------------------------------------------------------------
2
<PAGE>
Merrill Lynch Retirement Reserves Money Fund April 30, 1998
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
Face Interest Maturity Value
Issue Amount Rate* Date (Note 1a)
================================================================================
Commercial Paper (continued)
================================================================================
Alpine $ 52,350 5.55 % 5/07/98 $ 52,294
Securitization 50,000 5.56 5/11/98 49,915
Corporation 11,163 5.50 7/23/98 11,018
- --------------------------------------------------------------------------------
American Honda 40,000 5.50 6/08/98 39,762
Finance Corp.
- --------------------------------------------------------------------------------
Apreco, Inc. 40,000 5.48 5/13/98 39,919
10,000 5.55 5/20/98 9,969
25,000 5.53 5/26/98 24,900
- --------------------------------------------------------------------------------
Atlantic Asset 22,500 5.56 5/04/98 22,486
Securitization Corp. 27,000 5.54 5/11/98 26,954
- --------------------------------------------------------------------------------
BIL North America, 25,000 5.52 5/04/98 24,985
Inc.
- --------------------------------------------------------------------------------
Bear Stearns 25,000 5.47 5/08/98 24,969
Companies, Inc. 25,000 5.51 6/12/98 24,835
25,000 5.53 7/24/98 24,672
- --------------------------------------------------------------------------------
CREGEM North 25,000 5.48 7/09/98 24,730
America, Inc. 30,000 5.50 7/17/98 29,639
- --------------------------------------------------------------------------------
CXC Incorporated 30,000 5.53 5/14/98 29,935
25,000 5.52 5/19/98 24,927
- --------------------------------------------------------------------------------
Carnival (UK) Plc 25,000 5.52 5/21/98 24,920
- --------------------------------------------------------------------------------
Centric Capital 10,000 5.55 5/01/98 9,999
Corp. 9,900 5.52 6/22/98 9,820
40,000 5.48 7/02/98 39,612
- --------------------------------------------------------------------------------
Chrysler Financial 100,000 5.56 5/15/98 99,768
Corp. 23,900 5.55 5/22/98 23,819
25,000 5.54 6/04/98 24,865
- --------------------------------------------------------------------------------
Clipper Receivables 75,000 5.55 5/04/98 74,954
Corp.
- --------------------------------------------------------------------------------
Corporate Asset 100,000 5.49 6/08/98 99,405
Funding Co. Inc. 50,000 5.48 6/22/98 49,591
- --------------------------------------------------------------------------------
Corporate 15,000 5.53 5/15/98 14,965
Receivables Corp. 25,000 5.53 5/22/98 24,915
- --------------------------------------------------------------------------------
Countrywide Home 53,000 5.56 5/22/98 52,820
Loans, Inc. 47,000 5.54 5/27/98 46,804
- --------------------------------------------------------------------------------
Credit Suisse First 12,000 5.51 7/22/98 11,846
Boston Inc.
- --------------------------------------------------------------------------------
Den Norske Bank 50,000 5.47 5/13/98 49,899
ASA
- --------------------------------------------------------------------------------
Diageo Capital Plc 50,000 5.50 5/21/98 49,840
- --------------------------------------------------------------------------------
Eureka 30,000 5.52 5/20/98 29,908
Securitization, Inc. 25,000 5.50 6/11/98 24,839
- --------------------------------------------------------------------------------
FCAR Owner Trust, 18,000 5.45 5/08/98 17,978
Series I
- --------------------------------------------------------------------------------
Finova Capital Corp. 37,000 5.60 5/05/98 36,971
11,600 5.47 5/07/98 11,587
50,000 5.55 6/01/98 49,753
10,000 5.52 6/05/98 9,945
25,000 5.45 6/18/98 24,811
20,000 5.53 6/26/98 19,824
21,400 5.50 7/17/98 21,143
- --------------------------------------------------------------------------------
Ford Motor Credit 100,000 5.53 5/08/98 99,877
Company 8,600 5.51 5/22/98 8,571
- --------------------------------------------------------------------------------
General Electric 200,000 5.50 6/05/98 198,900
Capital Corp. 100,000 5.49 6/16/98 99,275
150,000 5.49 7/14/98 148,266
- --------------------------------------------------------------------------------
General Motors 100,000 5.53 5/12/98 99,816
Acceptance Corp. 25,000 5.69 6/02/98 24,873
100,000 5.50 7/14/98 98,844
- --------------------------------------------------------------------------------
Goldman Sachs 27,000 5.70 5/14/98 26,941
Group, L.P.
- --------------------------------------------------------------------------------
Greenwich Funding 34,459 5.54 5/12/98 34,395
Corp. 20,190 5.54 5/13/98 20,149
9,000 5.52 6/10/98 8,943
40,543 5.48 7/01/98 40,155
33,744 5.48 7/06/98 33,395
24,295 5.50 7/16/98 24,007
- --------------------------------------------------------------------------------
International 50,000 5.47 5/19/98 49,854
Securitization 35,000 5.54 6/10/98 34,779
Corp.
- --------------------------------------------------------------------------------
Lehman Brothers 61,800 5.50 5/11/98 61,695
Holdings Inc. 50,000 5.57 6/03/98 49,739
50,000 5.52 7/14/98 49,422
60,000 5.52 7/15/98 59,297
40,000 5.52 7/17/98 39,519
38,200 5.55 7/28/98 37,676
- --------------------------------------------------------------------------------
Lexington Parker 74,174 5.52 5/12/98 74,038
Capital Company, 34,826 5.47 5/18/98 34,730
LLC 50,000 5.52 6/03/98 49,739
41,000 5.525 6/05/98 40,774
50,000 5.49 7/20/98 49,376
- --------------------------------------------------------------------------------
Mont Blanc 22,027 5.54 5/08/98 22,000
Capital Corp. 30,947 5.53 5/26/98 30,823
75,000 5.51 6/10/98 74,529
23,310 5.53 6/10/98 23,163
13,017 5.53 6/11/98 12,933
75,000 5.51 6/12/98 74,506
53,240 5.53 6/12/98 52,888
- --------------------------------------------------------------------------------
Morgan Stanley, 100,000 5.49 7/20/98 98,751
Dean Witter & Co. 45,000 5.647+ 12/24/98 45,000
- --------------------------------------------------------------------------------
New Center 225,000 5.53 5/05/98 224,827
Asset Trust
- --------------------------------------------------------------------------------
Old Line Funding 30,460 5.58 5/04/98 30,441
Corp. 43,000 5.54 5/22/98 42,854
31,000 5.55 6/11/98 30,799
24,000 5.52 7/06/98 23,752
- --------------------------------------------------------------------------------
Park Avenue 21,248 5.56 5/01/98 21,245
Receivables Corp. 39,925 5.53 5/06/98 39,888
17,987 5.52 5/18/98 17,937
50,627 5.52 6/15/98 50,268
- --------------------------------------------------------------------------------
3
<PAGE>
Merrill Lynch Retirement Reserves Money Fund April 30, 1998
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
Face Interest Maturity Value
Issue Amount Rate* Date (Note 1a)
================================================================================
Commercial Paper (concluded)
================================================================================
Preferred $ 32,000 5.56 % 5/01/98 $ 31,995
Receivables 26,550 5.46 6/01/98 26,419
Funding Corp.
- --------------------------------------------------------------------------------
Republic Industries 50,000 5.53 5/06/98 49,954
Funding Corp. 34,000 5.52 5/08/98 33,958
30,000 5.53 5/20/98 29,908
38,000 5.54 5/29/98 37,830
23,000 5.52 6/10/98 22,855
- --------------------------------------------------------------------------------
Rexam Plc 11,000 5.48 7/15/98 10,871
- --------------------------------------------------------------------------------
Riverwoods 46,650 5.50 6/10/98 46,357
Funding Corp. 50,000 5.50 6/11/98 49,678
50,000 5.50 6/12/98 49,670
12,000 5.48 7/02/98 11,884
30,000 5.48 7/07/98 29,686
- --------------------------------------------------------------------------------
Salomon, 75,000 5.47 5/07/98 74,919
Smith Barney 50,000 5.47 5/08/98 49,938
Holdings, Inc. 25,000 5.51 6/03/98 24,870
25,000 5.48 7/15/98 24,707
75,000 5.49 7/17/98 74,098
50,000 5.49 7/22/98 49,360
- --------------------------------------------------------------------------------
Sears Roebuck 50,000 5.47 5/04/98 49,969
Acceptance Corp. 50,000 5.47 5/06/98 49,954
- --------------------------------------------------------------------------------
Three Rivers 75,000 5.52 5/15/98 74,828
Funding Corp.
- --------------------------------------------------------------------------------
Twin Towers Inc. 20,000 5.52 5/19/98 19,942
53,777 5.50 6/16/98 53,387
20,336 5.50 6/18/98 20,182
- --------------------------------------------------------------------------------
WCP Funding Inc. 50,000 5.53 5/28/98 49,784
25,000 5.51 6/05/98 24,862
50,000 5.50 6/09/98 49,693
- --------------------------------------------------------------------------------
Windmill Funding 20,000 5.45 5/06/98 19,981
Corp. 66,102 5.47 5/08/98 66,020
100,639 5.53 6/04/98 100,098
21,463 5.52 6/08/98 21,335
39,101 5.50 6/18/98 38,806
26,786 5.52 6/19/98 26,581
32,687 5.49 7/13/98 32,314
39,300 5.49 7/16/98 38,834
50,000 5.51 7/16/98 49,406
100,000 5.49 7/17/98 98,798
- --------------------------------------------------------------------------------
Total Commercial Paper
(Cost--$5,695,554) ....................................... 5,695,358
================================================================================
Corporate Notes--11.3%
================================================================================
Abbey National 175,000 5.50+ 6/09/98 174,987
Treasury Services
Plc
- --------------------------------------------------------------------------------
Bank of Scotland 20,000 5.95 6/18/98 20,002
Treasury Services Plc
- --------------------------------------------------------------------------------
CIT Group Holdings, 21,500 5.58+ 8/17/98 21,494
Inc., The 54,800 5.59+ 9/30/98 54,780
46,500 5.64+ 1/12/99 46,484
29,500 5.57+ 3/22/99 29,487
- --------------------------------------------------------------------------------
Caterpillar 10,000 5.834+ 6/09/98 10,003
Financial Services
Corp.
- --------------------------------------------------------------------------------
Chase Manhattan 11,746 5.549 3/12/99 11,742
Auto Trust,
Series 1998-A,
Class A-1
- --------------------------------------------------------------------------------
Chase Manhattan 67,000 5.598+ 3/25/99 66,994
Corp.
- --------------------------------------------------------------------------------
Credit Suisse First 50,000 5.39+ 4/06/99 50,000
Boston Inc. 50,000 5.39+ 4/09/99 50,000
44,000 5.39+ 5/04/99 44,000
- --------------------------------------------------------------------------------
Ford Credit 35,486 5.545 2/16/99 35,479
Auto Owner Trust,
Series 1998-A
- --------------------------------------------------------------------------------
Ford Motor 25,000 5.71+ 1/08/99 25,000
Credit Company
- --------------------------------------------------------------------------------
General Motors 33,000 5.702+ 2/27/01 32,965
Acceptance Corp.
- --------------------------------------------------------------------------------
Goldman Sachs 123,000 5.688+ 3/26/99 123,031
Group, L.P. 27,000 5.656+ 5/11/99 27,003
- --------------------------------------------------------------------------------
IBM Credit Corp. 25,000 5.665+ 7/31/98 25,000
100,000 5.66 3/03/99 99,794
- --------------------------------------------------------------------------------
JP Morgan & Co. 50,000 5.58+ 2/24/99 49,984
- --------------------------------------------------------------------------------
LABS Trust Series 74,211 5.656+ 12/28/98 74,211
1996-4 Senior Notes
- --------------------------------------------------------------------------------
LABS Trust Series 55,576 5.656+ 10/21/98 55,576
1997-6 Senior Notes 43,639 5.656+ 12/22/98 43,638
- --------------------------------------------------------------------------------
LINCS Series 50,000 5.646+ 2/12/99 50,000
1998-2
- --------------------------------------------------------------------------------
Morgan Stanley, 20,900 5.606+ 1/15/99 20,900
Dean Witter & Co.
- --------------------------------------------------------------------------------
Premier Auto Trust 22,050 5.545 11/06/98 22,051
Series 1998-1
- --------------------------------------------------------------------------------
Premier Auto Trust 47,321 5.608 12/06/98 47,333
Series 1998-2, A-1
- --------------------------------------------------------------------------------
Republic Mase 23,000 5.945 6/30/98 23,011
Australia, Ltd.
- --------------------------------------------------------------------------------
Total Corporate Notes (Cost--$1,335,120) ................. 1,334,949
================================================================================
Funding Agreements--0.6%
================================================================================
Jackson National 50,000 5.718+ 5/01/98 50,000
Life Insurance Co.
- --------------------------------------------------------------------------------
Travelers Insurance 20,000 5.718+ 2/01/99 20,000
Company
- --------------------------------------------------------------------------------
Total Funding Agreements (Cost--$70,000) ................. 70,000
================================================================================
Master Notes--1.3%
================================================================================
Goldman Sachs 34,000 5.688+ 5/29/98 34,000
Group, L.P. 125,000 5.656+ 1/20/99 125,000
- --------------------------------------------------------------------------------
Total Master Notes (Cost--$159,000) ...................... 159,000
- --------------------------------------------------------------------------------
4
<PAGE>
Merrill Lynch Retirement Reserves Money Fund April 30, 1998
SCHEDULE OF INVESTMENTS (concluded) (in Thousands)
Face Interest Maturity Value
Issue Amount Rate* Date (Note 1a)
================================================================================
US Government, Agency & Instrumentality Obligations--
Discount--0.9%
================================================================================
Federal Farm $ 10,000 5.38 % 9/01/98 $ 9,813
Credit Banks 50,000 5.44 9/24/98 48,893
- --------------------------------------------------------------------------------
Federal National 30,000 5.27 6/15/98 29,792
Mortgage 20,000 5.37 8/27/98 19,642
Association
- --------------------------------------------------------------------------------
Total US Government, Agency & Instrumentality
Obligations--Discount (Cost--$108,147) 108,140
================================================================================
US Government, Agency & Instrumentality Obligations--
Non-Discount--14.8%
================================================================================
Federal Farm 15,000 5.87 3/16/00 14,946
Credit Banks
- --------------------------------------------------------------------------------
Federal Home 108,600 5.543+ 10/20/98 108,585
Loan Bank 20,000 5.45 2/19/99 19,948
100,000 5.508+ 3/26/99 99,955
40,000 5.90 6/19/98 40,012
8,000 6.355 6/11/99 8,007
20,000 6.08 6/30/99 20,060
30,000 5.99 8/11/99 30,056
8,775 6.04 12/22/99 8,779
15,000 5.855 1/20/00 15,014
10,000 5.75 3/16/00 9,990
17,000 5.865 3/17/00 17,020
9,120 5.82 4/14/00 9,098
25,000 5.865 4/20/00 25,029
- --------------------------------------------------------------------------------
Federal Home Loan 10,325 6.10 9/10/99 10,362
Mortgage Corp. 30,000 5.975 11/10/99 30,081
20,000 5.975 11/24/99 20,040
- --------------------------------------------------------------------------------
Federal National 38,000 6.00+ 5/14/98 38,000
Mortgage 101,000 5.538+ 10/20/98 100,979
Association 75,000 5.598+ 11/03/98 74,973
22,150 5.322+ 12/14/98 22,138
50,000 5.463+ 1/21/99 49,982
35,000 5.33 2/12/99 34,891
50,000 5.36 2/19/99 49,870
150,000 5.463+ 3/03/99 149,947
21,850 6.375 5/21/99 21,860
- --------------------------------------------------------------------------------
Federal National $ 60,000 5.324+% 7/14/99 $ 59,879
Mortgage 25,000 5.95 8/05/99 25,033
Association 13,500 5.88 8/10/99 13,507
(concluded) 17,740 5.98 9/23/99 17,779
78,000 5.573+ 10/27/99 77,947
20,000 5.75 3/09/00 19,956
- --------------------------------------------------------------------------------
Student Loan 25,000 5.60 8/11/98 24,997
Marketing 100,000 5.368+ 11/06/98 99,985
Association 42,000 5.543+ 11/25/98 41,991
51,425 5.80+ 12/18/98 51,440
60,000 5.40 2/10/99 59,821
21,900 6.00 12/16/99 21,972
50,000 5.473+ 1/12/00 49,984
46,000 5.518+ 2/04/00 45,980
- --------------------------------------------------------------------------------
US Treasury Notes 30,000 6.25 3/31/99 30,192
40,000 5.625 12/31/99 39,944
45,000 5.375 1/31/00 44,747
- --------------------------------------------------------------------------------
Total US Government, Agency & Instrumentality
Obligations--Non-Discount
(Cost--$1,755,041) ....................................... 1,754,776
- --------------------------------------------------------------------------------
Face
Amount Issue
================================================================================
Repurchase Agreements**--2.1%
================================================================================
$100,000 Fuji Securities, Inc., purchased
on 4/30/1998 to yield 5.58% to
5/01/1998 100,000
- --------------------------------------------------------------------------------
143,124 HSBC Securities, Inc., purchased
on 4/30/1998 to yield 5.55% to
5/01/1998 143,124
- --------------------------------------------------------------------------------
Total Repurchase Agreements
(Cost--$243,124) ......................................... 243,124
- --------------------------------------------------------------------------------
Total Investments (Cost--$11,937,332)--101.0% ............ 11,936,017
Liabilities in Excess of Other Assets--(1.0%) ............ (113,884)
-----------
Net Assets--100.0% ....................................... $11,822,133
===========
- --------------------------------------------------------------------------------
* Commercial Paper and certain US Government, Agency & Instrumentality
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. Interest rates on variable rate securities are adjusted
periodically based upon appropriate indexes; the interest rates shown are
the rates in effect at April 30, 1998.
** Repurchase Agreements are fully collateralized by US Government
Obligations.
+ Floating Rate Notes.
See Notes to Financial Statements.
5
<PAGE>
Merrill Lynch Retirement Reserves Money Fund April 30, 1998
FINANCIAL INFORMATION
Statement of Assets and Liabilities as of April 30, 1998
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Assets: Investments, at value (identified cost--$11,937,331,684*) (Note 1a) ... $11,936,016,777
Cash .................................................................. 50,752
Receivables:
Interest ........................................................... $ 82,007,757
Securities sold .................................................... 14,997,605
Beneficial interest sold ........................................... 169,852 97,175,214
---------------
Prepaid registration fees and other assets (Note 1e) .................. 2,470,806
---------------
Total assets .......................................................... 12,035,713,549
---------------
- -----------------------------------------------------------------------------------------------------------------------------------
Liabilities: Payables:
Beneficial interest redeemed ....................................... 204,474,642
Investment adviser (Note 2) ........................................ 3,541,097 208,015,739
---------------
Accrued expenses and other liabilities ................................ 5,565,041
---------------
Total liabilities ..................................................... 213,580,780
---------------
- -----------------------------------------------------------------------------------------------------------------------------------
Net Assets: Net assets ............................................................ $11,822,132,769
===============
- -----------------------------------------------------------------------------------------------------------------------------------
Net Assets Shares of beneficial interest, $0.10 par value, unlimited number of
Consist of: shares authorized ..................................................... $ 1,182,344,768
Paid-in capital in excess of par ...................................... 10,641,102,908
Unrealized depreciation on investments--net ........................... (1,314,907)
---------------
Net assets--Equivalent to $1.00 per share based on 11,823,447,675
shares of beneficial interest outstanding ............................. $11,822,132,769
===============
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Cost for Federal income tax purposes. As of April 30, 1998, net unrealized
depreciation for Federal income tax purposes amounted to $1,314,907, of
which $902,418 related to appreciated securities and $2,217,325 related to
depreciated securities.
See Notes to Financial Statements.
6
<PAGE>
Merrill Lynch Retirement Reserves Money Fund April 30, 1998
FINANCIAL INFORMATION (continued)
Statement of Operations
For the Six Months Ended April 30, 1998
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
Investment Income Interest and amortization of premium and discount earned ...... $ 323,936,153
(Note 1d):
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Expenses: Investment advisory fees (Note 2) ............................. $ 20,504,096
Transfer agent fees (Note 2) .................................. 7,625,913
Registration fees (Note 1e) ................................... 637,353
Printing and shareholder reports .............................. 397,350
Accounting services (Note 2) .................................. 231,672
Custodian fees ................................................ 166,568
Professional fees ............................................. 57,205
Trustees' fees and expenses ................................... 34,395
Interest expense .............................................. 6,294
Other ......................................................... 582,587
-------------
Total expenses ................................................ 30,243,433
-------------
Investment income--net ........................................ 293,692,720
-------------
- ----------------------------------------------------------------------------------------------------------------------------
Realized & Unreal- Realized gain on investments--net ............................. 229,961
ized Gain (Loss) Change in unrealized appreciation/depreciation
on Investments-- on investments--net ............................................................... (1,782,904)
Net (Note 1d): -------------
Net Increase in Net Assets Resulting from Operations .............................. $ 292,139,777
=============
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
7
<PAGE>
Merrill Lynch Retirement Reserves Money Fund April 30, 1998
FINANCIAL INFORMATION (continued)
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
For the Six For the
Months Ended Year Ended
Increase (Decrease) in Net Assets: April 30, 1998 Oct. 31, 1997
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operations: Investment income--net .................................. $ 293,692,720 $ 536,352,386
Realized gain on investments--net ....................... 229,961 581,438
Change in unrealized appreciation/depreciation
on investments--net ..................................... (1,782,904) (368,533)
---------------- ---------------
Net increase in net assets resulting from operations .... 292,139,777 536,565,291
---------------- ---------------
- ----------------------------------------------------------------------------------------------------------------------------
Dividends & Investment income--net .................................. (293,692,720) (536,352,386)
Distributions to Realized gain on investments--net ....................... (229,961) (581,438)
Shareholders Net decrease in net assets resulting from ---------------- ---------------
(Note 1f): dividends and distributions to shareholders ............. (293,922,681) (536,933,824)
---------------- ---------------
- ---------------------------------------------------------------------------------------------------------------------------
Beneficial Interest Net proceeds from sale of shares ........................ 20,870,228,918 35,790,703,282
Transactions Net asset value of shares issued to
(Notes 1f & 3): shareholders in reinvestment
of dividends and distributions .......................... 293,924,277 536,932,268
---------------- ---------------
21,164,153,195 36,327,635,550
Cost of shares redeemed ................................. (20,030,582,664) (34,977,150,947)
---------------- ---------------
Net increase in net assets derived from
beneficial interest transactions ........................ 1,133,570,531 1,350,484,603
---------------- ---------------
- ----------------------------------------------------------------------------------------------------------------------------
Net Assets: Total increase in net assets ............................ 1,131,787,627 1,350,116,070
Beginning of period ..................................... 10,690,345,142 9,340,229,072
---------------- ---------------
End of period ........................................... $ 11,822,132,769 $10,690,345,142
================ ===============
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
8
<PAGE>
Merrill Lynch Retirement Reserves Money Fund April 30, 1998
FINANCIAL INFORMATION (concluded)
Financial Highlights
<TABLE>
<CAPTION>
For the Six
The following per share data and ratios have been derived Months Ended
from information provided in the financial statements. April 30, For the Year Ended October 31,
--------------------------------------------------
Increase (Decrease) in Net Asset Value: 1998 1997 1996 1995 1994
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
----------- ----------- ---------- ---------- ----------
Operating Investment income--net .0260 .0512 .0509 .0540 .0345
Performance: Realized and unrealized gain (loss) on
investments--net (.0002) .0001 (.0002) .0015 (.0011)
----------- ----------- ---------- ---------- ----------
Total from investment operations .0258 .0513 .0507 .0555 .0334
----------- ----------- ---------- ---------- ----------
Less dividends and distributions:
Investment income--net (.0260) (.0512) (.0509) (.0540) (.0345)
Realized gain on investments--net --+ (.0001) (.0001) (.0002) --+
----------- ----------- ---------- ---------- ----------
Total dividends and distributions (.0260) (.0513) (.0510) (.0542) (.0345)
----------- ----------- ---------- ---------- ----------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
=========== =========== ========== ========== ==========
- --------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Expenses .54%* .54% .56% .59% .59%
Net Assets: =========== =========== ========== ========== ==========
Investment income and realized gain
on investments--net 5.25%* 5.13% 5.07% 5.43% 3.44%
=========== =========== ========== ========== ==========
- --------------------------------------------------------------------------------------------------------------------------------
Supplemental Net assets, end of period
Data: (in thousands) $11,822,133 $10,690,345 $9,340,229 $8,648,907 $7,403,684
=========== =========== ========== ========== ==========
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Annualized.
+ Amount is less than $.0001 per share.
See Notes to Financial Statements.
9
<PAGE>
Merrill Lynch Retirement Reserves Money Fund April 30, 1998
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
Merrill Lynch Retirement Reserves Money Fund (the "Fund") is a separate Fund
offering a separate class of shares of Merrill Lynch Retirement Series Trust
(the "Trust"). The Trust is registered under the Investment Company Act of 1940
as a diversified, open-end management investment company which will comprise a
series of separate portfolios offering a separate class of shares to
participants in the retirement plans for which Merrill Lynch, Pierce, Fenner &
Smith Inc. ("MLPF&S") acts as passive custodian. These unaudited financial
statements reflect all adjustments which are, in the opinion of management,
necessary to a fair statement of the results for the interim period presented.
All such adjustments are of a normal recurring nature. On January 28, 1998,
shareholders approved the issuance of a second class of shares. It is
anticipated that a second class of shares will be offered, at which point all
issued and outstanding shares of the Fund will be designated as Class I Shares
and the new class will be designated as Class II Shares. At the present time,
the Fund is the only series offered. The following is a summary of significant
accounting policies consistently followed by the Fund.
(a) Valuation of investments--Investments 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 such securities. When 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.
For the purposes of valuations, the maturity of variable rate certificates of
deposit, variable rate commercial paper, short-term corporate bond notes,
variable rate Government agency notes and variable rate corporate notes is
deemed to be the next coupon date on which the interest rate is to be adjusted.
Assets 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
Trustees.
(b) Repurchase agreements--The Fund invests in US Government and agency
securities pursuant to repurchase agreements. Under such agreements, the
counterparty agrees to repurchase the security at a mutually agreed upon time
and price. The Fund takes possession of the underlying securities, marks to
market such securities and, if necessary, receives additional securities daily
to ensure that the contract is fully collateralized.
(c) Income taxes--It is the Fund's policy to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income to its shareholders. Therefore, no Federal
income tax provision is required.
(d) Security transactions and investment income--Security transactions are
recorded on the dates the transactions are entered into (the trade dates).
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.
(e) Prepaid registration fees--Prepaid registration fees are charged to expense
as the related shares are issued.
(f) Dividends and distributions to shareholders--The Fund declares dividends
daily and reinvests daily such dividends in additional fund shares at net asset
value. Dividends and distributions are declared from the total of net investment
income and net realized gains or losses on investments.
2. Investment Advisory Agreement and Transactions with Affiliates:
The Fund has entered into an Investment Advisory Agreement with Merrill Lynch
Asset Management, L.P. ("MLAM"). The general partner of MLAM is
10
<PAGE>
Princeton Services, Inc. ("PSI"), an indirect wholly-owned subsidiary of Merrill
Lynch & Co., Inc. ("ML & Co."), which is the limited partner. The Fund has also
entered into a Distribution Agreement and Distribution Plans with Merrill Lynch
Funds Distributor, Inc. ("MLFD" or "Distributor"), a wholly-owned subsidiary of
Merrill Lynch Group, Inc.
(M)LAM is responsible for the management of the Fund's portfolio and provides
the necessary person- nel, facilities, equipment and certain other services
necessary to the operations of the Fund. For such services, the Fund pays a
monthly fee based upon the average daily value of the Fund's net assets at the
following annual rates: 0.50% of the Fund's average daily net assets not
exceeding $1 billion; 0.45% of average daily net assets in excess of $1 billion
but not exceeding $2 billion; 0.40% of average daily net assets in excess of $2
billion but not exceeding $3 billion; 0.375% of average daily net assets in
excess of $3 billion but not exceeding $4 billion; 0.35% of average daily net
assets in excess of $4 billion but not exceeding $7 billion; 0.325% of average
daily net assets in excess of $7 billion but not exceeding $10 billion; and
0.30% of average daily net assets in excess of $10 billion.
Merrill Lynch Financial Data Services, Inc. ("MLFDS"), a wholly-owned subsidiary
of ML & Co., is the Fund's transfer agent.
Accounting services are provided to the Fund by MLAM at cost.
Certain officers and/or trustees of the Trust are officers and/or directors of
MLAM, MLFD, MLFDS, PSI, and/or ML & Co.
3. Shares of Beneficial Interest:
The number of shares purchased and redeemed during the period corresponds to the
amounts included in the Statements of Changes in Net Assets with respect to net
proceeds from sale of shares and cost of shares redeemed, since shares are
recorded at $1.00 per share.
OFFICERS AND TRUSTEES
Arthur Zeikel, President and Trustee
Joe Grills, Trustee
Walter Mintz, Trustee
Robert S. Salomon Jr., Trustee
Melvin R. Seiden, Trustee
Stephen B. Swensrud, Trustee
Terry K. Glenn, Executive Vice President
Kevin J. McKenna, Senior Vice President
Joseph T. Monagle Jr., Senior Vice President
Donald C. Burke, Vice President
John Ng, Vice President
Gerald M. Richard, Treasurer
Barbara G. Fraser, Secretary
Custodian
The Bank of New York
90 Washington Street
New York, NY 10286
Transfer Agent
Merrill Lynch Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 221-7210
11
<PAGE>
This report is not authorized for use as an offer of sale or a solicitation of
an offer to buy shares of the Fund unless accompanied or preceded by the Fund's
current prospectus. Past performance results shown in this report should not be
considered a representation of future performance, which will fluctuate. The
Fund seeks to maintain a consistent $1.00 net asset value per share, although
this cannot be assured. An investment in the Fund is neither insured nor
guaranteed by the US Government. Statements and other information herein are as
dated and are subject to change.
Merrill Lynch
Retirement Reserves
Money Fund
Box 9011
Princeton, New Jersey
08543-9011 #10262--4/98
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