MERRILL LYNCH
PHOENIX
FUND, INC.
[GRAPHICS OMITTED]
STRATEGIC
Performance
Quarterly Report
April 30, 1998
<PAGE>
MERRILL LYNCH PHOENIX FUND, INC.
DEAR SHAREHOLDER
The quarter 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 will have to be increased to curtail
inflationary pressures.
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,
non-inflationary gross domestic product growth should continue to exert a
positive influence on the capital markets worldwide.
Portfolio Matters
For the three months ended April 30, 1998, Merrill Lynch Phoenix Fund, Inc.'s
Class A, Class B, Class C and Class D Shares had total returns of +15.52%,
+15.30%, +15.26% and +15.46%, respectively. (Fund results do not include sales
charges, and would be lower if sales charges were included. Complete per
formance information, including average annual total returns, can be found on
pages 3 and 4 of this report to shareholders.) The Fund's strong performance
during the April quarter importantly related to many of our largest holdings
posting very strong gains as their fundamentals improved.
For example, Viacom, Inc. continues to demonstrate cash flow growth as their
cable programming gains market share, the substantial profits from the movie
Titanic are beginning to flow through, and the firm's Blockbuster video rental
business is recovering. Another large Fund holding that performed well during
the quarter was Pharmaceutical Product Development, Inc. This contract research
organization for the pharmaceutical industry has finished integrating its recent
acquisitions and has started to build backlog and improve margins. U S West
Media Group (soon to be named MediaOne Group) also performed well. This company
continues to grow its core cable television business, and is just beginning to
roll out new services (Internet access, telephony) utilizing its upgraded cable
system. Finally, the Fund's largest holding, Novell Inc., a provider of
networking software, has finally achieved financial stability and has begun to
aggressively introduce a number of new products. We are gratified that other
investors are beginning to recognize the value that we perceive in these
companies.
Despite the strong stock market, we added seven new equity positions from
varying industries during the quarter. Our three largest additions were Philip
Services Corporation, KCS Energy, Inc. and Laidlaw Environmental Services Inc.
Philip Services Corporation is a leader in the growing industrial services and
metals recovery industry. After many acquisitions, the company is ready to
complete the integration process and to start operating more efficiently.
Following the April quarter's close, the company reported earnings that were
below expectations, as well as a change in management. The resulting drop in the
stock's price enabled us to increase our position.
Middle-tier oil and natural gas exploration companies like KCS Energy, Inc. have
come under pressure because of weakness in the prices of these commodities. We
are positive about the long-term prospects for
1
<PAGE>
Merrill Lynch Phoenix Fund, Inc. April 30, 1998
energy prices. We believe that the company should demonstrate expanding cash
flow and production in the future as it starts drilling its many prospects. We
will continue to look for energy companies with similar profiles for future
investment.
Laidlaw Environmental Services Inc. recently merged with Safety-Kleen Corp. to
form a market-leading hazardous waste disposal company. Laidlaw has managed to
maintain profitability despite poor pricing in its core hazardous waste
incineration business. The company is well-positioned to benefit from an
eventual improvement in this area, in our opinion, and the Safety-Kleen merger
provides opportunities for growth.
During the April quarter, we eliminated three small equity positions in
CommScope, Inc., The Bibb Co., and Tupperware Corporation. We also sold our
investments in Oryx Energy Co. and TCI Group since they reached our price
objectives. CompuServe Corporation, a Fund holding, was acquired by WorldCom,
Inc., and we have retained our investment in WorldCom. Merger activity also
resulted in the sale of our investment in Waste Management, Inc., which was in
the process of being acquired by USA Waste Services Inc.
In the high-yield sector, we established a $16.5 million position in Unison
Healthcare Corp., a nursing home operator that filed for bankruptcy protection
following a collapse of their lease restructuring negotiations. We believe that
a combination of factors, including new management and the aging of the US
population, makes this a compelling investment. We also purchased the bonds of
Trism Inc., a trucking company specializing in heavy equipment and secured
materials. Along with other trucking companies, Trism has had problems retaining
quality drivers in this robust economic environment. We added to our distressed
wireless position with an investment in American Telecasting Inc., and continue
to believe the wireless sector to be greatly undervalued.
High-yield sales during the quarter included the bonds of Specialty Foods Corp.
and Harvard Industries Inc. We profitably traded small positions in Royal Oak
Mines Inc. and People's Choice TV Corp.
In Conclusion
The continued availability of attractive new investment opportunities is
reflected in our 8.6% cash position at the end of the April quarter. We expect
that there will continue to be wide performance differentials among stocks that
are exceeding earnings expectations and companies that are not. Therefore, there
are likely to be further opportunities for the Fund to establish new investments
at attractive prices.
We thank you for your continued investment in Merrill Lynch Phoenix Fund, Inc.,
and we look forward to reviewing our outlook and strategy with you again in our
upcoming annual report to shareholders.
Sincerely,
/s/ Arthur Zeikel
Arthur Zeikel
President
/s/ Robert J. Martorelli
Robert J. Martorelli
Senior Vice President and Portfolio Manager
May 28, 1998
2
<PAGE>
Merrill Lynch Phoenix Fund, Inc. April 30, 1998
PERFORMANCE DATA
About Fund Performance
Investors are able to purchase shares of the Fund through the Merrill Lynch
Select PricingSM System, which offers four pricing alternatives:
o Class A Shares incur a maximum initial sales charge (front-end load) of
5.25% and bear no ongoing distribution or account maintenance fees. Class
A Shares are available only to eligible investors.
o Class B Shares are subject to a maximum contingent deferred sales charge
of 4% if redeemed during the first year, decreasing 1% each year
thereafter to 0% after the fourth year. In addition, Class B Shares are
subject to a distribution fee of 0.75% and an account maintenance fee of
0.25%. These shares automatically convert to Class D Shares after
approximately 8 years. (There is no initial sales charge for automatic
share conversions.)
o Class C Shares are subject to a distribution fee of 0.75% and an account
maintenance fee of 0.25%. In addition, Class C Shares are subject to a 1%
contingent deferred sales charge if redeemed within one year of purchase.
o Class D Shares incur a maximum initial sales charge of 5.25% and an
account maintenance fee of 0.25% (but no distribution fee).
None of the past results shown should be considered a representation of future
performance. Figures shown in the "Average Annual Total Return" tables assume
reinvestment of all dividends and capital gains distributions at net asset value
on the ex-dividend date. Investment return and principal value of shares will
fluctuate so that shares, when redeemed, may be worth more or less than their
original cost. Dividends paid to each class of shares will vary because of the
different levels of account maintenance, distribution and transfer agency fees
applicable to each class, which are deducted from the income available to be
paid to shareholders.
Recent Performance Results
<TABLE>
<CAPTION>
Ten Years/
12 Month 3 Month Since Inception
Total Return Total Return Total Return
===============================================================================================
<S> <C> <C> <C>
ML Phoenix Fund, Inc. Class A Shares* +51.35% +15.52% +326.08%
- -----------------------------------------------------------------------------------------------
ML Phoenix Fund, Inc. Class B Shares* +49.86 +15.30 +248.17
- -----------------------------------------------------------------------------------------------
ML Phoenix Fund, Inc. Class C Shares* +49.82 +15.26 + 79.73
- -----------------------------------------------------------------------------------------------
ML Phoenix Fund, Inc. Class D Shares* +50.93 +15.46 + 84.82
- -----------------------------------------------------------------------------------------------
Dow Jones Industrial Average** +31.57 +15.10 +500.24/+456.59/+152.56
- -----------------------------------------------------------------------------------------------
Standard & Poor's 500 Index** +41.07 +13.84 +466.16/+410.70/+157.86
===============================================================================================
</TABLE>
* Investment results shown do not reflect sales charges; results would be
lower if a sales charge was included. Total investment returns are based on
changes in net asset values for the periods shown, and assume reinvestment
of all dividends and capital gains distributions at net asset value on the
ex-dividend date. The Fund's ten-year/inception dates are: Class A Shares,
ten years ended 4/30/98; Class B Shares, 10/21/88; and Class C and Class D
Shares, 10/21/94.
** An unmanaged broad-based index comprised of common stocks. Total investment
returns for unmanaged indexes are based on estimates. Ten years/since
inception total returns are: for the ten years ended 4/30/98; from 10/21/88
to 4/30/98; and from 10/21/94 to 4/30/98, respectively.
3
<PAGE>
Merrill Lynch Phoenix Fund, Inc. April 30, 1998
PERFORMANCE DATA (concluded)
Average Annual Total Return
% Return Without % Return With
Sales Charge Sales Charge**
================================================================================
Class A Shares*
================================================================================
Year Ended 3/31/98 +44.76% +37.16%
- --------------------------------------------------------------------------------
Five Years Ended 3/31/98 +16.67 +15.42
- --------------------------------------------------------------------------------
Ten Years Ended 3/31/98 +15.67 +15.05
- --------------------------------------------------------------------------------
* Maximum sales charge is 5.25%.
** Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
================================================================================
Class B Shares*
================================================================================
Year Ended 3/31/98 +43.34% +39.34%
- --------------------------------------------------------------------------------
Five Years Ended 3/31/98 +15.49 +15.49
- --------------------------------------------------------------------------------
Inception (10/21/88)
through 3/31/98 +13.97 +13.97
- --------------------------------------------------------------------------------
* Maximum contingent deferred sales charge is 4% and is reduced to 0% after 4
years.
** Assuming payment of applicable contingent deferred sales charge.
================================================================================
% Return % Return
Without CDSC With CDSC**
================================================================================
Class C Shares*
================================================================================
Year Ended 3/31/98 +43.25% +42.25%
- --------------------------------------------------------------------------------
Inception (10/21/94)
through 3/31/98 +18.14 +18.14
- --------------------------------------------------------------------------------
* Maximum contingent deferred sales charge is 1% and is reduced to 0% after 1
year.
** Assuming payment of applicable contingent deferred sales 4 charge.
================================================================================
% Return Without % Return With
Sales Charge Sales Charge**
================================================================================
Class D Shares*
================================================================================
Year Ended 3/31/98 +44.35% +36.78%
- --------------------------------------------------------------------------------
Inception (10/21/94)
through 3/31/98 +19.07 +17.22
- --------------------------------------------------------------------------------
* Maximum sales charge is 5.25%.
** Assuming maximum sales charge.
PORTFOLIO INFORMATION
For the Quarter Ended April 30, 1998
Percent of
Ten Largest Holdings Net Assets
Novell Inc. ...................................... 5.8%
Borland International, Inc. ...................... 4.0
Pharmaceutical Product Development, Inc. ......... 3.9
H & R Block, Inc. ................................ 3.6
Viacom, Inc. (Class B) (Non-Voting) .............. 3.0
Anacomp, Inc. .................................... 3.0
U S West Media Group ............................. 3.0
Union Pacific Corporation ........................ 2.9
The Seagram Co., Ltd. ............................ 2.8
WHX Corp. ........................................ 2.7
Percent of
Five Largest Industries Net Assets
Computer Software ................................ 13.8%
Health Care ...................................... 9.8
Leisure & Entertainment .......................... 5.8
Steel ............................................ 4.8
Cable ............................................ 4.7
Percent of
Asset Mix Net Assets
Stocks ........................................... 82.0%
Bonds ............................................ 8.7
Cash & Cash Equivalents .......................... 9.3
Additions (Equity Investments)
Geneva Steel Company, Series B, Preferred, 14%
KCS Energy, Inc.
Laidlaw Environmental Services Inc.
National Semiconductor Corporation
Philip Services Corporation
Reuters Group PLC (ADR)
Stone Container Corp.
Deletions (Equity Investments)
The Bibb Co.
CommScope, Inc.
Oryx Energy Co.
TCI Group (Series A)
Tupperware Corporation
Waste Management, Inc.
4
<PAGE>
Merrill Lynch Phoenix Fund, Inc. April 30, 1998
SCHEDULE OF INVESTMENTS
<TABLE>
<CAPTION>
Face Amount/ Percent of
Industry Shares Held Investments Cost Value Net Assets
- -----------------------------------------------------------------------------------------------------------------------------------
Discount to Assets
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Cable 800,000 TCI Ventures Group (Series A) $ 6,317,459 $ 13,050,000 1.7%
===================================================================================================================================
Leisure & Entertainment 500,000 The Seagram Co., Ltd. 17,224,320 21,343,750 2.8
400,000 Viacom, Inc. (Class B) (Non-Voting) 11,328,769 23,200,000 3.0
===================================================================================================================================
Printing & Publishing 1,500,000 Scitex Corp. Ltd. 15,825,111 19,968,750 2.6
===================================================================================================================================
Total Discount to Assets 50,695,659 77,562,500 10.1
===================================================================================================================================
- -----------------------------------------------------------------------------------------------------------------------------------
Earning Turnarounds
- -----------------------------------------------------------------------------------------------------------------------------------
Computer Software 1,400,000 Mentor Graphics Corporation 14,049,847 14,612,500 1.9
===================================================================================================================================
Consumer Products 2,700,000 The Topps Co., Inc. 14,976,635 8,184,375 1.1
===================================================================================================================================
Energy Related 1,500,000 EEX Corp. 12,185,504 14,531,250 1.9
800,000 KCS Energy, Inc. 12,578,340 12,400,000 1.6
===================================================================================================================================
Gold 1,000,000 Placer Dome Inc. 14,980,789 14,750,000 1.9
===================================================================================================================================
Health Care 500,000 Humana, Inc. 9,571,131 13,500,000 1.8
1,300,000 NeoRx Corp. 7,991,431 6,012,500 0.8
===================================================================================================================================
Industrial Services 1,407,670 Anacomp, Inc. 9,137,200 22,874,638 3.0
===================================================================================================================================
Information Services 110,000 Reuters Group PLC (ADR)* (a) 7,047,074 7,122,500 0.9
===================================================================================================================================
Leisure & Entertainment 900,000 CST Entertainment Imaging, Inc. 675,000 9,000 0.0
===================================================================================================================================
Pharmaceuticals 400,000 Pharmacia & Upjohn, Inc. 14,035,530 16,825,000 2.2
===================================================================================================================================
Retail 3,209,900 CML Group, Inc. 14,030,372 6,018,562 0.8
===================================================================================================================================
Semiconductor 1,077,300 Integrated Device Technology, Inc. 9,945,298 12,927,600 1.7
2,350,000 LTX Corp. 14,351,697 11,015,625 1.4
400,000 National Semiconductor Corporation 8,057,807 8,800,000 1.1
===================================================================================================================================
Steel 790,700 Birmingham Steel Corp. 12,203,104 12,651,200 1.7
===================================================================================================================================
Telecommunications 134,700 ANTEC Corporation 1,090,055 2,660,325 0.3
Equipment
===================================================================================================================================
Transportation 1,100,000 Mesa Air Group, Inc. 7,019,511 8,731,250 1.1
400,000 Union Pacific Corporation 22,232,810 21,900,000 2.9
===================================================================================================================================
Total Earning Turnarounds 206,159,135 215,526,325 28.1
===================================================================================================================================
- -----------------------------------------------------------------------------------------------------------------------------------
Financial Restructuring
- -----------------------------------------------------------------------------------------------------------------------------------
Energy Related 1,938,475 Gulfport Energy Corporation (c) 16,017,828 5,088,497 0.6
1,938,475 Gulfport Energy Corporation--
Litigation Trust Certificates (c) 370,839 0 0.0
===================================================================================================================================
Health Care $16,500,000 Unison Healthcare Corp., 12.25% due
11/01/2006 (d) 9,962,500 9,240,000 1.2
===================================================================================================================================
Home Builders 520,000 New Millenium Homes, LLC 1,934,501 1,560,000 0.2
$10,250,000 New Millenium Homes, LLC, Senior Notes,
12% due 9/03/2004 9,042,719 9,891,250 1.3
===================================================================================================================================
</TABLE>
5
<PAGE>
Merrill Lynch Phoenix Fund, Inc. April 30, 1998
SCHEDULE OF INVESTMENTS (continued)
<TABLE>
<CAPTION>
Face Amount/ Percent of
Industry Shares Held Investments Cost Value Net Assets
- -----------------------------------------------------------------------------------------------------------------------------------
Financial Restructuring (concluded)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Retail 443,361 Zale Corp. Litigation Limited Partnership Units $ 0 $ 0 0.0%
===================================================================================================================================
Telecommunications $ 7,500,000 American Telecasting Inc., Senior Discount Notes,
43.48% due 8/15/2005 (d) 1,323,426 1,500,000 0.2
$11,000,000 CS Wireless Systems Inc., Senior Discount Notes,
11.375% due 3/01/2006 (d) 2,884,003 2,200,000 0.3
===================================================================================================================================
Total Financial Restructuring 41,535,816 29,479,747 3.8
===================================================================================================================================
- -----------------------------------------------------------------------------------------------------------------------------------
High Yield
- -----------------------------------------------------------------------------------------------------------------------------------
Consumer Products $ 3,000,000 Town & Country Corporation, Senior Subordinated
Notes, 13% due 5/31/1998 2,323,750 750,000 0.1
$ 8,190,000 U.S. Leather Inc., Senior Notes, 10.25% due
7/31/2003 5,501,375 3,644,550 0.5
===================================================================================================================================
Home Builders $20,000,000 Baldwin Homes, Series B, 10.375% due
8/01/2003 8,311,750 9,900,000 1.3
===================================================================================================================================
Printing & Publishing $ 6,255,400 San Jacinto Holdings, Inc., Senior Subordinated
Notes, 12% due 12/31/2002 4,048,512 4,879,212 0.6
===================================================================================================================================
Steel 24,500 Geneva Steel Company, Series B, Preferred, 14% 3,337,000 3,307,500 0.4
===================================================================================================================================
Supermarkets $25,000,000 Grand Union Co., Senior Notes, 12% due 9/01/2004 12,463,406 14,375,000 1.9
===================================================================================================================================
Telecommunications $ 6,400,000 CAI Wireless Systems, Inc., Senior Notes, 12.25%
due 9/15/2002 1,774,500 1,280,000 0.2
$31,500,000 MobileMedia Corp., Senior Subordinated Notes,
9.375% due 11/01/2007 6,504,813 3,543,750 0.4
===================================================================================================================================
Transportation $ 6,000,000 Trism Inc., Senior Subordinated Notes, 10.75%
due 12/15/2000 5,037,500 5,040,000 0.7
===================================================================================================================================
Total High Yield 49,302,606 46,720,012 6.1
===================================================================================================================================
- -----------------------------------------------------------------------------------------------------------------------------------
Operational Restructuring
- -----------------------------------------------------------------------------------------------------------------------------------
Cable 600,000 U S West Media Group 10,845,194 22,650,000 3.0
===================================================================================================================================
Chemicals 500,000 IMC Global, Inc. 17,506,928 18,000,000 2.3
===================================================================================================================================
Computer Services 450,000 WorldCom, Inc. (b) 16,171,875 19,237,500 2.5
===================================================================================================================================
Computer Software 3,100,000 Borland International, Inc. 35,428,962 30,806,250 4.0
4,500,000 Novell Inc. 41,271,080 44,859,375 5.8
500,000 Parametric Technology Corp. 12,047,863 15,968,750 2.1
===================================================================================================================================
Engineering 600,000 EMCOR Group, Inc. 3,963,265 12,450,000 1.6
===================================================================================================================================
Environmental 2,750,000 Laidlaw Environmental Services Inc. 10,558,290 10,828,125 1.4
1,417,700 Philip Services Corporation 13,522,823 10,721,356 1.4
===================================================================================================================================
Financial Services 605,000 H & R Block, Inc. 22,957,126 27,225,000 3.6
===================================================================================================================================
Health Care 500,000 Columbia/HCA Healthcare Corp. 14,676,044 16,468,750 2.1
1,200,000 Pharmaceutical Product Development, Inc. 16,222,661 30,075,000 3.9
===================================================================================================================================
Paper & Forest Products 700,000 Stone Container Corp. 9,012,372 11,462,500 1.5
===================================================================================================================================
</TABLE>
6
<PAGE>
Merrill Lynch Phoenix Fund, Inc. April 30, 1998
SCHEDULE OF INVESTMENTS (concluded)
<TABLE>
<CAPTION>
Percent of
Industry Shares Held Investments Cost Value Net Assets
- -----------------------------------------------------------------------------------------------------------------------------------
Operational Restructuring (concluded)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Pharmaceuticals 1,800,000 IVAX Corp. $ 16,133,528 $ 17,550,000 2.3%
===================================================================================================================================
Steel 1,298,500 WHX Corp. 11,160,678 20,370,219 2.7
===================================================================================================================================
Telecommunications 300,000 AT&T Corp. 11,137,325 18,018,750 2.4
===================================================================================================================================
Total Operational Restructuring 262,616,014 326,691,575 42.6
===================================================================================================================================
Total Investments 610,309,230 695,980,159 90.7
===================================================================================================================================
<CAPTION>
Face
Amount Short-Term Investments
===================================================================================================================================
<S> <C> <C> <C> <C> <C>
Commercial Paper** $10,000,000 Atlantic Asset Securitization Corp., 5.53%
due 5/18/1998 9,973,886 9,973,886 1.3
Countrywide Home Loans, Inc.:
10,000,000 5.53% due 5/04/1998 9,995,392 9,995,392 1.3
5,000,000 5.55% due 5/20/1998 4,985,354 4,985,354 0.6
15,000,000 Delaware Funding Corp., 5.51% due 5/08/1998 14,983,929 14,983,929 2.0
26,342,000 General Motors Acceptance Corp., 5.56% due
5/01/1998 26,342,000 26,342,000 3.4
===================================================================================================================================
Total Short-Term Investments 66,280,561 66,280,561 8.6
===================================================================================================================================
Total Investments $676,589,791 762,260,720 99.3
============
Other Assets Less Liabilities 5,628,570 0.7
------------ ------
Net Assets $767,889,290 100.0%
============ ======
===================================================================================================================================
<S> <C> <C>
Net Asset Value: Class A--Based on net assets of $320,358,782 and 21,508,431 shares outstanding $ 14.89
============
Class B--Based on net assets of $335,454,714 and 23,433,725 shares outstanding $ 14.32
============
Class C--Based on net assets of $13,124,043 and 923,958 shares outstanding $ 14.20
============
Class D--Based on net assets of $98,951,751 and 6,656,877 shares outstanding $ 14.86
============
===================================================================================================================================
</TABLE>
* American Depositary Receipts (ADR).
** 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) On February 18, 1998, holders of Reuters Holdings PLC received 13 Reuters
Group PLC (ADR) for every 15 Reuters Holdings PLC (ADR). The Fund received a
cash dividend of $8.877808 for every 15 Reuters Holdings PLC (ADR)
equivalent to $2,663,342.
(b) On January 31, 1998, WorldCom, Inc. merged with CompuServe Corporation. The
Fund received .40625 shares of WorldCom, Inc. stock for each share of
CompuServe Corporation stock. The merger was taxable and therefore reflected
in the cost.
(c) Name changed from WRT Energy Corp. to Gulfport Energy Corporation.
(d) Represents a zero coupon or step bond; the interest rate shown is the
effective yield at the time of purchase by the Fund.
<PAGE>
Officers and Directors
Arthur Zeikel, President and Director
Joe Grills, Director
Walter Mintz, Director
Robert S. Salomon Jr., Director
Melvin R. Seiden, Director
Stephen B. Swensrud, Director
Terry K. Glenn, Executive Vice President
Norman R. Harvey, Senior Vice President
Robert J. Martorelli, Senior Vice President
and Portfolio Manager
Donald C. Burke, Vice President
Gerald M. Richard, Treasurer
Robert Harris, Secretary
Custodian
The Chase Manhattan Bank, N.A.
Global Securities Services
4 Chase MetroTech Center, 18th Floor
Brooklyn, NY 11245
Transfer Agent
Merrill Lynch Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 637-3863
This report is not authorized for use as an offer of sale or a solicitation of
an offer to buy shares of the Fund unless accompanied or preceded by the Fund's
current prospectus. Past performance results shown in this report should not be
considered a representation of future performance. Investment return and
principal value of shares will fluctuate so that shares, when redeemed, may be
worth more or less than their original cost. Statements and other information
herein are as dated and are subject to change.
Merrill Lynch Phoenix Fund, Inc. is not related to Phoenix Home Life Mutual
Insurance Company or any of its subsidiaries or affiliates, including The
Phoenix Series Fund.
Merrill Lynch
Phoenix Fund, Inc.
Box 9011
Princeton, NJ
08543 #10263 -- 4/98
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