MERRILL LYNCH
READY ASSETS
TRUST
FUND LOGO
Annual Report
December 31, 1998
Officers and Trustees
Arthur Zeikel, President and Trustee
Donald Cecil, Trustee
M. Colyer Crum, Trustee
Edward H. Meyer, Trustee
Jack B. Sunderland, Trustee
J. Thomas Touchton, Trustee
Fred G. Weiss, Trustee
Terry K. Glenn, Executive Vice President
Kevin J. McKenna, Senior Vice President
Joseph T. Monagle Jr., Senior Vice President
Donaldo S. Benito, Vice President
Donald C. Burke, Vice President
Gerald M. Richard, Treasurer
Thomas D. Jones, III, Secretary
Custodian
The Bank of New York
90 Washington Street, 12th floor
New York, NY 10286
Transfer Agent
Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 221-7210
This report is not authorized for use as an offer of sale or a
solicitation of an offer to buy shares of the Trust unless
accompanied or preceded by the Trust's current prospectus. Past
performance results shown in this report should not be considered a
representation of future performance, which will fluctuate. An
investment in the Trust is not insured or guaranteed by the Federal
Deposit Insurance Corporation or any other Government agency.
Although the Trust seeks to preserve the value of your investment at
$1.00 per share, it is possible to lose money by investing in the
Trust. Statements and other information herein are as dated and are
subject to change.
Merrill Lynch
Ready Assets Trust
Box 9011
Princeton, NJ
08543-9011
Printed on post-consumer recycled paper
Merrill Lynch Ready Assets Trust
December 31, 1998
DEAR SHAREHOLDER
For the year ended December 31, 1998, Merrill Lynch Ready Assets
Trust paid shareholders a net annualized dividend of 5.11%*. For the
six-month period ended December 31, 1998, the Trust's net annualized
yield was 4.95%*. The Trust's 7-day yield as of December 31, 1998
was 4.64%.
The average portfolio maturity for Merrill Lynch Ready Assets Trust
at December 31, 1998 was 65 days, compared to 76 days at June 30,
1998.
The Environment
During 1998, stock and bond market volatility reflected shifting
investor perceptions regarding global economic prospects. Investor
optimism early in the year gave way to expectations of deteriorating
corporate profits and signs of a weakening economy by late summer.
Further concerns arose from the precarious state of the Russian and
other emerging market economies. As a result, world stock markets
declined in the July--September period. At the same time, the
uncertain economic picture and the resulting flight to quality by
investors pushed the 30-year US Treasury bond to record low yields.
Yields also declined in sovereign bond markets of other major
industrialized countries. In contrast, corporate bonds, mortgage-
backed securities and emerging markets debt underperformed Treasury
securities by a wide margin.
The US Federal Reserve Board and other central banks responded to
the uncertain economic outlook through a series of monetary policy
easings that served to restore investor confidence as 1998 drew
toward a close. Stock markets around the world rallied, with total
returns for the unmanaged Standard & Poor's 500 Index rising 21.3%
and the unmanaged Morgan Stanley Capital International World Index
(Ex-US) increasing 20.5% for the fourth quarter of 1998. However, as
1999 began, uncertainty regarding global economic prospects again
began to cloud the investment outlook. At the same time, with
stronger-than-expected economic results, prospects dimmed for
further Federal Reserve Board monetary policy easings in the near
future. The notable exception to the more subdued investment outlook
in the United States was the unprecedented popularity of Internet-
related stocks.
The weakening of the US dollar relative to the Japanese yen was one
of the year's more surprising developments. Since a stronger yen
would have a negative impact on the important export sector of
Japan's fragile economy, the Japanese central bank intervened in the
currency markets in January. For the overall global economy, the
deepening recession in Japan is of great concern. At the same time,
the difficulties in emerging economies such as Russia and Brazil
remain. Further progress in easing strains within the global
financial system would likely provide an important element of
stability to the volatile investment environment.
Throughout the six-month period ended December 31, 1998, we
maintained a constructive investment strategy. With credit spreads
relatively wide in the short-term end of the yield curve, we chose
to invest in asset-backed commercial paper. In the longer sector of
the yield curve, we focused the Trust's investments in US Treasury
securities, particularly in the 18-month--two-year sector.
The Trust's composition at the end of the December period and as of
our last report is detailed below:
12/31/98 6/30/98
Bank Notes 6.1% 9.6%
Certificates of Deposit 0.7 1.3
Certificates of Deposit--European 1.0 0.8
Certificates of Deposit--Yankee* 9.0 15.5
Commercial Paper 38.7 40.3
Corporate Notes 9.9 9.8
Funding Agreements 1.3 1.1
Master Notes 4.2 4.2
Repurchase Agreements 5.9 --
Time Deposits -- 0.4
US Government, Agency & Instrumentality
Obligations--Discount 6.0 3.5
US Government, Agency & Instrumentality
Obligations--Non-Discount 17.5 14.2
Liabilities in Excess of Other Assets (0.3) (0.7)
------ ------
Total 100.0% 100.0%
====== ======
[FN]
*US branches of foreign banks.
In Conclusion
We thank you for your support of Merrill Lynch Ready Assets Trust,
and we look forward to serving your investment needs in the months
and years ahead.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Donaldo S. Benito)
Donaldo S. Benito
Vice President and Portfolio Manager
February 8, 1999
[FN]
*Based on a constant investment throughout the period, with
dividends compounded daily, and reflecting a net return to the
investor after all expenses.
Merrill Lynch Ready Assets Trust
December 31, 1998
SCHEDULE OF INVESTMENTS (in Thousands)
Face Interest Maturity Value
Issue Amount Rate* Date (Note 1a)
Bank Notes--6.1%
American Express $ 20,000 5.503%++ 2/12/99 $ 20,000
Centurion Bank 20,000 5.51++ 3/19/99 20,000
Comerica Bank 40,000 5.53++ 2/02/99 39,999
FCC National Bank 20,000 5.65 3/03/99 20,013
First National 10,000 5.52 2/16/99 9,998
Bank of Chicago 10,000 4.80++ 2/23/99 9,998
10,000 5.63 3/16/99 10,008
First Tennessee 20,000 5.256++ 2/08/99 19,996
Bank N.A. 10,000 5.82 4/30/99 10,020
15,000 5.098++ 6/09/99 14,992
First Union National 25,000 4.71++ 8/30/99 25,000
Bank 35,000 4.99++ 9/01/99 35,000
29,000 5.422++ 11/16/99 28,983
Huntington National 9,000 5.45++ 1/20/99 9,000
Bank 20,000 5.459++ 1/22/99 19,999
10,000 5.60 1/29/99 10,000
LaSalle National 25,000 5.56 2/10/99 24,999
Bank
NationsBank N.A. 40,000 4.83++ 8/24/99 39,990
PNC Bank N.A. 15,000 4.82++ 1/29/99 14,999
30,000 5.234++ 11/03/99 29,981
SouthTrust Bank N.A. 25,000 4.80++ 6/01/99 24,993
Total Bank Notes
(Cost--$437,959) 437,968
Certificates of Deposit--0.7%
National City Bank, 25,000 5.481++ 2/05/99 24,999
Indiana
NationsBank N.A. 25,000 5.55 2/09/99 24,999
Total Certificates of Deposit
(Cost--$49,997) 49,998
Certificates of Deposit--European--1.0%
Abbey National 37,000 5.249++ 10/29/99 36,963
Treasury Services Plc 37,000 5.576++ 11/01/99 37,000
Total Certificates of Deposit--European
(Cost--$74,000 ) 73,963
Certificates of Deposit--Yankee--9.0%
ABN-AMRO Bank 10,000 5.69 3/05/99 10,008
N.V., NY
Bank of Montreal, 10,000 5.69 6/15/99 10,025
Chicago 10,000 4.82++ 7/15/99 9,997
25,000 4.93++ 7/22/99 24,992
Bank of Scotland 20,000 5.75 5/07/99 20,040
Treasury Services
Plc, NY
SCHEDULE OF INVESTMENTS (in Thousands)
Face Interest Maturity Value
Issue Amount Rate* Date (Note 1a)
Certificates of Deposit--Yankee (concluded)
Barclays Bank $ 10,000 5.56 % 2/25/99 $ 9,999
Plc, NY 15,000 5.645 3/02/99 15,011
25,000 4.78++ 6/01/99 24,991
20,000 5.483++ 6/04/99 19,993
Bayerische 30,000 5.665 3/29/99 30,034
Hypotheken-und
Wechsel Bank, NY
Bayerische 20,000 5.72 5/06/99 20,038
Landesbank 35,000 5.493++ 6/30/99 34,987
Girozentrale, NY
Canadian Imperial 30,000 5.55 2/10/99 29,999
Bank of Commerce, 15,000 5.71 6/21/99 15,040
NY
Credit Suisse 33,000 4.71++ 5/12/99 33,000
First Boston, NY
Deutsche Bank 10,000 5.62 2/26/99 9,999
AG, NY 20,000 5.695 3/30/99 20,024
15,000 5.72 4/16/99 15,023
20,000 5.71 4/23/99 20,033
25,000 5.70 6/07/99 25,060
National Bank 20,000 5.22 3/03/99 20,008
of Canada, NY
Norddeutsche 40,000 5.52++ 2/02/99 39,998
Landesbank
Girozentrale, NY
Rabobank Nederland, 20,000 5.71 5/05/99 20,037
N.V., NY 20,000 5.71 5/21/99 20,042
Royal Bank of 25,000 5.68 3/29/99 25,029
Canada, NY
Swiss Bank Corp., 25,000 5.74 6/09/99 25,065
NY 15,000 5.74 6/11/99 15,040
Toronto-Dominion 25,000 5.70 6/15/99 25,063
Bank, NY 35,000 5.413++ 8/13/99 34,984
Westdeutsche 20,000 5.35 3/18/99 20,013
Landesbank AG,
NY
Total Certificates of Deposit--Yankee
(Cost--$642,889) 643,572
Commercial Paper--38.7%
AESOP Funding Corp. 25,000 5.32 2/12/99 24,841
ANZ (Delaware) Inc. 100,000 6.25 1/04/99 99,931
Alpine Securitization 20,000 5.20 1/07/99 19,979
Corp. 30,000 5.20 3/02/99 29,749
Amsterdam Funding 35,400 6.15 1/04/99 35,376
Corp. 20,000 5.25 1/06/99 19,982
15,000 5.30 1/26/99 14,940
6,000 5.55 1/28/99 5,974
23,444 5.30 2/01/99 23,333
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
Face Interest Maturity Value
Issue Amount Rate* Date (Note 1a)
Commercial Paper (continued)
Apreco Inc. $ 22,467 5.29% 2/16/99 $ 22,310
15,000 5.33 2/18/99 14,891
15,000 5.13 3/15/99 14,848
Asset Securitization 15,000 5.06 2/11/99 14,906
Cooperative Corp. 15,000 5.15 3/11/99 14,856
25,000 5.20 3/12/99 24,756
Atlantis One Funding 10,000 5.37 2/04/99 9,948
Corp. 10,000 5.37 2/05/99 9,947
15,000 5.43 2/09/99 14,911
35,000 5.43 2/11/99 34,782
10,000 5.45 2/11/99 9,938
20,000 5.43 2/19/99 19,851
15,000 5.35 3/15/99 14,848
Banco de Galicia y 10,000 5.38 3/01/99 9,910
Buenos Aires S.A.
Bankers Trust Corp. 15,000 5.50 2/03/99 14,916
China Merchants 20,000 5.17 3/11/99 19,808
(Cayman 2) Inc.
Clipper Receivables 30,000 5.27 2/12/99 29,808
Corp.
Concord Minutemen 12,000 5.28 1/08/99 11,985
Capital Co. LLC 20,161 5.37 1/11/99 20,128
20,000 5.20 1/15/99 19,954
14,000 5.27 1/15/99 13,968
24,839 5.45 1/19/99 24,768
14,000 5.27 1/21/99 13,955
20,000 5.26 1/22/99 19,932
ContiFinancial Corp. 20,700 5.17 2/25/99 20,528
Corporate Asset 20,000 5.10 2/02/99 19,902
Funding Co. Inc. 15,000 5.06 2/04/99 14,922
20,000 5.20 2/17/99 19,857
15,000 5.24 2/23/99 14,880
15,000 5.10 3/04/99 14,870
20,000 5.17 3/09/99 19,813
Countrywide Home 13,000 6.45 1/04/99 12,991
Loans, Inc. 12,000 5.28 2/12/99 11,923
Edison Asset 13,544 5.28 2/11/99 13,459
Securitization, LLC 11,183 5.49 2/12/99 11,112
22,502 5.20 2/26/99 22,311
Eureka Securitization 17,000 5.85 1/04/99 16,989
Inc. 30,000 5.15 1/25/99 29,884
8,000 5.42 2/03/99 7,960
20,000 5.45 2/04/99 19,894
25,000 5.15 3/04/99 24,784
Falcon Asset 25,000 5.37 1/22/99 24,918
Securitization Corp. 7,075 5.15 3/03/99 7,015
Finova Capital Corp. 10,000 6.10 1/04/99 9,993
17,000 5.51 2/04/99 16,912
10,000 5.36 2/19/99 9,926
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
Face Interest Maturity Value
Issue Amount Rate* Date (Note 1a)
Commercial Paper (continued)
Ford Credit $ 10,000 5.01% 4/06/99 $ 9,867
Europe Plc 20,000 5.06 4/06/99 19,735
General Electric 20,000 5.47 3/09/99 19,813
Capital Corp. 25,000 5.47 3/25/99 24,712
Greenwich Funding 30,620 5.25 2/16/99 30,406
Corporation 30,000 5.20 3/02/99 29,749
Greyhawk Capital 20,000 5.45 1/13/99 19,961
Corp. 15,000 5.45 1/14/99 14,968
17,000 5.43 2/12/99 16,891
15,000 5.35 2/19/99 14,889
13,000 5.15 3/08/99 12,880
International 20,000 5.47 2/02/99 19,902
Securitization 25,000 5.45 2/11/99 24,844
Corporation 40,000 5.30 2/17/99 39,715
9,325 5.32 2/17/99 9,258
15,000 5.13 3/17/99 14,844
Knight-Ridder, Inc. 25,000 5.10 4/20/99 24,620
Lehman Brothers 30,000 5.51 2/18/99 29,751
Holdings, Inc. 30,000 5.50 2/23/99 29,725
50,000 5.42 2/25/99 49,525
25,000 5.50 2/25/99 24,762
Lexington Parker 15,000 5.40 1/15/99 14,966
Capital Co. LLC 20,000 5.25 1/26/99 19,920
30,000 5.45 2/03/99 29,847
20,000 5.20 3/03/99 19,830
50,000 5.22 3/05/99 49,561
Mont Blanc Capital 25,000 5.17 1/14/99 24,947
Corp. 15,000 5.45 1/14/99 14,968
25,000 5.29 2/16/99 24,825
30,000 5.29 2/17/99 29,786
10,000 5.30 2/18/99 9,927
30,000 5.35 2/23/99 29,759
15,000 5.26 2/26/99 14,873
15,000 5.35 2/26/99 14,873
15,000 5.15 3/01/99 14,870
20,000 5.25 3/01/99 19,826
27,000 5.25 3/04/99 26,767
20,000 5.12 3/16/99 19,794
Monte Rosa Capital 19,000 5.30 1/15/99 18,956
Corp. 20,000 5.33 1/22/99 19,932
65,000 5.30 2/10/99 64,604
25,000 5.46 2/16/99 24,825
25,000 5.28 2/19/99 24,814
14,000 5.23 3/09/99 13,869
20,000 5.15 3/12/99 19,805
Morgan Stanley, 10,400 5.52 2/08/99 10,400
Dean Witter & Co. 20,000 5.36 2/23/99 19,840
Old Line Funding 10,000 5.50 1/12/99 9,982
Corp. 7,004 5.50 1/20/99 6,983
11,000 5.55 1/28/99 10,953
20,264 5.45 1/29/99 20,175
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
Face Interest Maturity Value
Issue Amount Rate* Date (Note 1a)
Commercial Paper (concluded)
Park Avenue $ 20,000 5.34% 1/25/99 $ 19,923
Receivables Corp. 25,563 5.36 1/26/99 25,461
13,835 5.37 2/05/99 13,761
10,000 5.30 2/08/99 9,942
15,000 5.48 2/12/99 14,904
Preferred Receivables 15,000 5.20 2/18/99 14,891
Funding Corp. 9,960 5.20 2/25/99 9,877
35,000 5.10 3/01/99 34,696
6,260 5.15 3/05/99 6,205
Repeat Offering 25,000 5.40 1/08/99 24,969
Securitization Entity 10,000 5.06 1/19/99 9,971
Funding, Inc. (ROSE)
Rio Tinto 20,000 5.06 2/05/99 19,893
America Inc. 11,100 5.07 3/05/99 11,003
Salomon, Smith 25,000 5.47 2/17/99 24,822
Barney Holdings, Inc. 18,000 5.08 3/09/99 17,832
Thames Asset 8,000 5.32 2/01/99 7,962
Global Securitization 20,000 5.30 2/19/99 19,851
25,080 5.15 3/08/99 24,849
24,580 5.17 3/08/99 24,354
25,000 5.20 3/15/99 24,746
15,000 5.13 3/16/99 14,846
Variable Funding 15,000 5.17 1/06/99 14,986
Capital Corp.
WCP Funding Inc. 25,000 5.40 2/08/99 24,855
Windmill Funding 15,000 5.30 2/09/99 14,911
Corp. 25,000 5.22 2/18/99 24,818
15,000 5.18 3/02/99 14,874
20,000 5.13 3/04/99 19,827
29,627 5.15 3/08/99 29,355
21,011 5.14 3/16/99 20,795
23,806 5.12 3/18/99 23,554
30,000 5.12 3/24/99 29,658
Total Commercial Paper
(Cost--$2,776,439 ) 2,776,557
Corporate Notes--9.9%
Abbey National 20,000 5.50 2/05/99 20,000
Treasury Services 35,000 5.415++ 2/17/99 34,997
Plc 25,000 5.72 6/11/99 25,047
25,000 4.79++ 7/20/99 24,989
30,000 4.63++ 8/17/99 29,985
CIT Group Holdings, 18,000 4.82++ 3/22/99 17,998
Inc. 20,000 4.80++ 5/24/99 19,995
25,000 4.79++ 6/28/99 24,990
25,000 4.83++ 8/30/99 24,994
Chase Manhattan 37,800 5.16++ 3/25/99 37,803
Corp.
Credit Suisse First 15,000 4.71++ 4/20/99 15,000
Boston Inc.
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
Face Interest Maturity Value
Issue Amount Rate* Date (Note 1a)
Corporate Notes (concluded)
Ford Credit Auto $ 9,817 5.67% 6/15/99 $ 9,818
Owner Trust 1998-C
General Electric 23,000 4.82++ 6/03/99 22,995
Capital Corp. 20,000 5.14++ 6/04/99 19,995
General Motors 20,000 4.66++ 7/06/99 19,995
Acceptance Corp. 20,000 4.83++ 7/06/99 19,995
20,000 5.16++ 8/26/99 19,960
25,000 5.411++ 12/01/00 25,000
21,000 5.28++ 2/27/01 20,994
Goldman Sachs 10,000 5.25++ 3/26/99 10,002
Group L.P. 16,000 5.347++ 1/12/00 15,984
Household Finance 20,500 5.352++ 9/13/99 20,483
Corp.
Liberty Lighthouse 73,000 5.30++ 10/08/99 72,836
US Capital Co. LLC
Morgan Stanley, 13,000 5.297++ 1/15/99 13,000
Dean Witter & Co.
National Rural 25,000 5.17++ 9/21/99 24,988
Utilities Cooperative
Finance Corp.
PepsiCo, Inc. 25,000 5.209++ 8/19/99 24,945
Premier Auto Trust 984 5.62 2/08/99 984
1998-3+++
Restructured Asset 32,000 5.534++ 8/13/99 32,000
Securities with Enhan-
ced Returns, Series
1998-MM-7-1 Trust
Restructured Asset 37,100 5.675++ 1/21/00 37,100
Securities with Enhan-
ced Returns, Series
1998-MM-12-3 Trust
Xerox Capital 19,500 5.14++ 8/20/99 19,465
(Europe) Plc
Total Corporate Notes
(Cost--$706,573 ) 706,337
Funding Agreements--1.3%
Jackson National Life 80,000 5.566++ 5/03/99 80,000
Insurance Co.
John Hancock Mutual 14,000 5.259++ 7/30/99 14,000
Life Insurance Co.
Total Funding Agreements
(Cost--$94,000 ) 94,000
Master Notes--4.2%
Goldman Sachs 75,000 5.546++ 1/20/99 75,000
Group, L.P. 75,000 5.564++ 1/20/99 75,000
150,000 5.564++ 2/22/99 150,000
Total Master Notes
(Cost--$300,000 ) 300,000
SCHEDULE OF INVESTMENTS (concluded) (in Thousands)
Face Interest Maturity Value
Issue Amount Rate* Date (Note 1a)
US Government, Agency & Instrumentality
Obligations--Discount--6.0%
Federal Farm Credit $ 15,000 4.65% 5/03/99 $ 14,754
Banks 25,000 4.40 9/17/99 24,149
5,000 4.35 10/01/99 4,821
Federal Home Loan 10,000 4.94 2/10/99 9,942
Banks 10,000 5.25 5/25/99 9,807
15,000 4.74 5/26/99 14,708
15,000 4.60 9/16/99 14,492
Federal Home Loan 15,000 4.97 2/26/99 14,880
Mortgage Corp. 6,574 4.94 3/12/99 6,511
5,000 4.93 3/25/99 4,944
Federal National 11,000 4.77 4/09/99 10,854
Mortgage Association 11,000 5.25 5/24/99 10,789
17,000 5.28 5/24/99 16,673
15,000 4.72 5/26/99 14,708
24,000 5.11 6/04/99 23,511
15,000 4.61 6/11/99 14,681
15,000 4.63 6/15/99 14,673
20,000 4.72 6/15/99 19,564
15,000 4.72 6/16/99 14,671
15,000 4.57 7/14/99 14,616
20,000 4.57 7/15/99 19,485
35,000 4.54 9/09/99 33,846
80,000 4.47 9/29/99 77,153
30,000 4.47 10/01/99 28,927
Total US Government, Agency & Instrumentality
Obligations--Discount (Cost--$433,435) 433,159
US Government, Agency & Instrumentality
Obligations--Non-Discount--17.5%
Federal Home Loan 20,000 5.073++ 3/26/99 19,998
Banks 100,000 4.986++ 4/01/99 99,988
59,000 5.168++ 9/02/99 58,980
23,000 4.60++ 11/09/99 22,988
43,000 4.60++ 11/12/99 42,978
10,000 5.67 1/20/00 10,000
Federal Home Loan 40,000 5.605 3/12/99 40,033
Mortgage Corp. 25,000 5.875 5/19/00 25,050
20,000 5.05 11/17/00 19,879
15,000 5.18 11/24/00 14,943
Federal National 50,000 5.028++ 1/21/99 49,999
Mortgage Association 10,000 5.40 2/02/99 10,000
10,000 5.38 2/12/99 10,000
75,000 5.028++ 3/03/99 74,995
SCHEDULE OF INVESTMENTS (concluded) (in Thousands)
Face Interest Maturity Value
Issue Amount Rate* Date (Note 1a)
US Government, Agency & Instrumentality
Obligations--Non-Discount (concluded)
Federal National $ 25,000 5.108%++ 4/09/99 $ 24,997
Mortgage Association 40,000 4.98 5/12/99 40,000
(concluded) 40,000 4.696++ 7/14/99 39,964
25,000 5.038++ 7/15/99 24,993
75,000 5.043++ 7/30/99 74,964
50,000 5.103++ 8/19/99 49,977
25,000 6.00 9/02/99 25,155
50,000 5.08 9/24/99 50,020
20,000 5.60 1/12/00 20,116
10,000 5.07 12/14/00 9,957
Student Loan 15,000 5.40 2/10/99 15,001
Marketing Association 15,000 4.50 8/02/99 14,977
55,000 5.038++ 1/12/00 54,990
50,000 5.063++ 2/02/00 49,987
42,000 5.083++ 2/04/00 41,989
US Treasury Notes 25,000 7.00 4/15/99 25,156
15,000 6.375 7/15/99 15,141
35,000 6.875 8/31/99 35,496
50,000 5.875 11/15/99 50,500
20,000 7.75 11/30/99 20,544
40,000 5.375 1/31/00 40,303
20,000 4.50 9/30/00 19,963
10,000 4.625 11/30/00 10,009
Total US Government, Agency & Instrumentality
Obligations--Non-Discount
(Cost--$1,254,050) 1,254,030
Face
Amount Issue
Repurchase Agreements**--5.9%
$150,000 Aubrey G. Lanston & Co., Inc., purchased
on 12/31/1998 to yield 5% to 1/04/1999 150,000
150,000 Deutsche Bank Securities Inc., purchased
on 12/31/1998 to yield 5% to 1/04/1999 150,000
22,811 Lehman Brothers Inc., purchased on
12/31/1998 to yield 4.85% to 1/04/1999 22,811
100,000 Nomura Securities International, Inc.,
purchased on 12/31/1998 to yield 5.10%
to 1/04/1999 100,000
Total Repurchase Agreements
(Cost--$422,811) 422,811
Total Investments (Cost--$7,192,153)--100.3% 7,192,395
Liabilities in Excess of Other Assets--(0.3%) (18,682)
----------
Net Assets--100.0% $7,173,713
==========
[FN]
*Commercial Paper and certain US Government, Agency &
Instrumentality Obligations are traded on a discount basis; the
interest rates shown reflect the discount rates paid at the time of
purchase by the Trust. 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; interest rates shown are the rates in effect at
December 31, 1998.
**Repurchase Agreements are fully collateralized by US Government
Obligations.
++Variable Rate Notes.
+++Subject to principal paydowns.
See Notes to Financial Statements.
Merrill Lynch Ready Assets Trust
December 31, 1998
FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Statement of Assets and Liabilities as of December 31, 1998
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$7,192,153,369*)
(Note 1a) $ 7,192,395,052
Receivables:
Interest $ 45,464,913
Beneficial interest sold 1,622,651 47,087,564
---------------
Prepaid registration fees and other assets (Note 1e) 206,648
---------------
Total assets 7,239,689,264
---------------
Liabilities: Payables:
Beneficial interest redeemed 58,783,545
Investment adviser (Note 2) 2,226,027
Distributor (Note 2) 2,168,961
Dividends to shareholders (Note 1f) 1,196 63,179,729
---------------
Accrued expenses and other liabilities 2,796,525
---------------
Total liabilities 65,976,254
---------------
Net Assets: Net assets $ 7,173,713,010
===============
Net Assets Shares of beneficial interest, $.10 par value, unlimited
Consist of: number of shares authorized $ 717,347,133
Paid-in capital in excess of par 6,456,124,194
Unrealized appreciation on investments--net 241,683
---------------
Net Assets--Equivalent to $1.00 per share based on
7,173,471,327 shares of beneficial interest outstanding $ 7,173,713,010
===============
<FN>
*Cost for Federal income tax purposes. As of December 31, 1998, net
unrealized appreciation for Federal income tax purposes amounted to
$241,683, of which $1,771,950 related to appreciated securities and
$1,530,267 related to depreciated securities.
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Ready Assets Trust
December 31, 1998
FINANCIAL INFORMATION (continued)
<TABLE>
Statement of Operations
<CAPTION>
For the Year Ended
December 31, 1998
<S> <S> <C> <C>
Investment Income Interest and amortization of premium and discount earned $ 406,559,223
(Note 1d):
Expenses: Investment advisory fees (Note 2) $ 25,784,290
Transfer agent fees (Note 2) 10,787,605
Distribution fees (Note 2) 8,410,874
Printing and shareholder reports 424,723
Accounting services (Note 2) 390,549
Registration fees (Note 1e) 305,572
Custodian fees 222,856
Trustees' fees and expenses 163,357
Professional fees 114,389
Interest expense 8,875
Other 64,087
---------------
Total expenses 46,677,177
---------------
Investment income--net 359,882,046
---------------
Realized & Realized gain on investments--net 1,128,586
Unrealized Change in unrealized appreciation/depreciation on investments--net 370,665
Gain on ---------------
Investments--Net Net Increase in Net Assets Resulting from Operations $ 361,381,297
(Note 1d): ===============
See Notes to Financial Statements.
</TABLE>
<TABLE>
Statements of Changes in Net Assets
<CAPTION>
For the Year
Ended December 31,
Increase (Decrease) in Net Assets: 1998 1997
<S> <S> <C> <C>
Operations: Investment income--net $ 359,882,046 $ 365,158,348
Realized gain on investments--net 1,128,586 175,283
Change in unrealized appreciation/depreciation on
investments--net 370,665 329,079
--------------- ---------------
Net increase in net assets resulting from operations 361,381,297 365,662,710
--------------- ---------------
Dividends & Investment income--net (359,882,046) (365,158,348)
Distributions to Realized gain on investments--net (1,128,586) (175,283)
Shareholders --------------- ---------------
(Note 1f): Net decrease in net assets resulting from dividends and
distributions to shareholders (361,010,632) (365,333,631)
--------------- ---------------
Beneficial Net proceeds from sale of shares 13,077,395,532 13,708,317,153
Interest Net asset value of shares issued to shareholders in
Transactions reinvestment of dividends and distributions (Note 1f) 359,587,623 363,840,858
(Note 3): --------------- ---------------
13,436,983,155 14,072,158,011
Cost of shares redeemed (13,210,307,466) (14,222,080,551)
--------------- ---------------
Net increase (decrease) in net assets derived from
beneficial interest transactions 226,675,689 (149,922,540)
--------------- ---------------
Net Assets: Total increase (decrease) in net assets 227,046,354 (149,593,461)
Beginning of year 6,946,666,656 7,096,260,117
--------------- ---------------
End of year $ 7,173,713,010 $ 6,946,666,656
=============== ===============
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Ready Assets Trust
December 31, 1998
FINANCIAL INFORMATION (concluded)
<TABLE>
Financial Highlights
<CAPTION>
The following per share data and ratios have been derived
from information provided in the financial statements.
For the Year Ended December 31,
Increase (Decrease) in Net Asset Value: 1998 1997 1996 1995 1994
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Operating ---------- ---------- ---------- ---------- ----------
Performance: Investment income--net .0497 .0503 .0491 .0538 .0366
Realized and unrealized gain (loss) on
investments--net .0003 .0001 (.0003) .0016 (.0012)
---------- ---------- ---------- ---------- ----------
Total from investment operations .0500 .0504 .0488 .0554 .0354
---------- ---------- ---------- ---------- ----------
Less dividends and distributions:
Investment income--net (.0497) (.0503) (.0491) (.0538) (.0366)
Realized gain on investments--net (.0002) --++ (.0001) (.0001) --++
---------- ---------- ---------- ---------- ----------
Total dividends and distributions (.0499) (.0503) (.0492) (.0539) (.0366)
---------- ---------- ---------- ---------- ----------
Net asset value, end of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
Total investment return 5.11% 5.16% 5.05% 5.53% 3.73%
========== ========== ========== ========== ==========
Ratios to Average Expenses .65% .65% .64% .67% .65%
Net Assets: ========== ========== ========== ========== ==========
Investment income and realized gain
on investments--net 5.01% 5.03% 4.88% 5.40% 3.67%
========== ========== ========== ========== ==========
Supplemental Net assets, end of year (in
Data: thousands) $7,173,713 $6,946,667 $7,096,260 $7,079,355 $6,240,997
========== ========== ========== ========== ==========
<FN>
++Amount is less than $.0001 per share.
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Ready Assets Trust
December 31, 1998
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
Merrill Lynch Ready Assets Trust (the "Trust") is registered under
the Investment Company Act of 1940 as a diversified, open-end
management investment company. The Trust's financial statements are
prepared in accordance with generally accepted accounting principles
which may require the use of management accruals and estimates. The
following is a summary of significant accounting policies followed
by the Trust.
(a) Valuation of investments--Portfolio securities with remaining
maturities of greater than sixty days are valued at the most recent
bid price or yield equivalent as obtained from dealers that make
markets in such securities. As securities transition from sixty-one
to sixty days 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. Securities
maturing sixty days or less from their date of acquisition are
valued at amortized cost, which approximates market value. For
purposes of valuation, the maturity of a variable rate security is
deemed to be the next coupon date on which the interest rate is to
be adjusted. Other investments and 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 Trust invests in US Government
securities pursuant to repurchase agreements. Under such agreements,
the counterparty agrees to repurchase the security at a mutually
agreed upon time and price. The Trust takes possession of the
underlying securities, marks to market such securities and, if
necessary, receives additions to such securities daily to ensure
that the contract is fully collateralized.
(c) Income taxes--It is the Trust'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
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 Trust declares
dividends daily and reinvests daily such dividends (net of non-
resident alien tax and back-up withholding tax) in additional shares
of beneficial interest at net asset value. Dividends are declared
from net investment income and distributions from net realized gain
or loss on investments.
2. Investment Advisory Agreement and
Transactions with Affiliates:
The Trust has entered into an Investment Advisory Agreement with
Merrill Lynch Asset Management, L.P. ("MLAM"). The general partner
of MLAM is Princeton Services, Inc. ("PSI"), an indirect wholly-
owned subsidiary of Merrill Lynch & Co., Inc. ("ML & Co."), which is
the limited partner. The Trust has also entered into a Distribution
Agreement and Distribution Plans with Merrill Lynch Funds
Distributor ("MLFD" or "Distributor"), a division of Princeton Funds
Distributor, Inc. ("PFD"), which is a wholly-owned subsidiary of
Merrill Lynch Group, Inc.
MLAM provides the Trust with investment management, research,
statistical, and advisory services, and pays certain other expenses
of the Trust. For such services, the Trust pays a monthly fee based
upon the average daily value of the Trust's net assets at the
following annual rates:
Portion of average daily value of net assets: Rate
Not exceeding $500 million 0.500%
In excess of $500 million but not exceeding $1 billion 0.400
In excess of $1 billion but not exceeding $5 billion 0.350
In excess of $5 billion but not exceeding $10 billion 0.325
In excess of $10 billion but not exceeding $15 billion 0.300
In excess of $15 billion but not exceeding $20 billion 0.275
In excess of $20 billion 0.250
Merrill Lynch Ready Assets Trust
December 31, 1998
NOTES TO FINANCIAL STATEMENTS (concluded)
The Trust has adopted a Shareholder Servicing Plan and Agreement in
accordance with Rule 12b-1 under the Investment Company Act of 1940,
pursuant to which Merrill Lynch, Pierce, Fenner and Smith
Incorporated ("MLPF&S"), a wholly-owned subsidiary of ML & Co.,
receives a fee each month from the Trust at the annual rate of
0.125% of average daily net assets of the accounts of Trust
shareholders who maintain their Trust accounts through MLPF&S. This
fee is to compensate MLPF&S financial consultants and other directly
involved branch office personnel for providing direct personal
services to shareholders. The fee is not compensation for
administrative services.
Financial Data Services, Inc. ("FDS"), a wholly-owned subsidiary of
ML & Co., is the Trust's transfer agent.
Accounting services are provided to the Trust by MLAM at cost.
Certain officers and/or trustees of the Trust are officers and/or
directors of MLAM, FDS, PSI, PFD, and/or ML & Co.
3. Shares of Beneficial Interest:
The number of shares purchased and redeemed during the years ended
December 31, 1998 and December 31, 1997 corresponds to the amounts
included in the Statements of Changes in Net Assets for net proceeds
from sale of shares and cost of shares redeemed, respectively, since
shares are recorded at $1.00 per share.
Merrill Lynch Ready Assets Trust
December 31, 1998
<AUDIT-REPORT>
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders,
Merrill Lynch Ready Assets Trust:
We have audited the accompanying statement of assets and
liabilities, including the schedule of investments, of Merrill Lynch
Ready Assets Trust as of December 31, 1998, the related statements
of operations for the year then ended, and changes in net assets for
each of the years in the two-year period then ended and the
financial highlights for each of the years in the five-year period
then ended. These financial statements and the financial highlights
are the responsibility of the Trust's management. Our responsibility
is to express an opinion on these financial statements and the
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements and the financial highlights are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.
Our procedures included confirmation of securities owned at December
31, 1998 by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights
present fairly, in all material respects, the financial position of
Merrill Lynch Ready Assets Trust as of December 31, 1998, the
results of its operations, the changes in its net assets, and the
financial highlights for the respective stated periods in conformity
with generally accepted accounting principles.
Deloitte & Touche LLP
Princeton, New Jersey
February 10, 1999
</AUDIT-REPORT>