MERRILL LYNCH
HEALTHCARE
FUND, INC.
FUND LOGO
Quarterly Report
January 31, 1995
This report is not authorized for use as an offer of sale or a
solicitation of an offer to buy shares of the Company unless
accompanied or preceded by the Company'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.
Merrill Lynch
Healthcare Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
<PAGE>
MERRILL LYNCH HEALTHCARE FUND, INC.
Officers and
Directors
Arthur Zeikel, President and Director
Donald Cecil, Director
Edward H. Meyer, Director
Charles C. Reilly, Director
Richard R. West, Director
Edward D. Zinbarg, Director
Terry K. Glenn, Executive Vice President
Norman R. Harvey, Senior Vice President
Philip L. Kirstein, Senior Vice President
Donald C. Burke, Vice President
Jordan C. Schreiber, Vice President and Portfolio Manager
Gerald M. Richard, Treasurer
Robert Harris, Secretary
Custodian
The Chase Manhattan Bank, N.A.
Global Securities Services
4 Chase MetroTech Center, 18th Floor
Brooklyn, New York 11245
Transfer Agent
Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, Florida 32246-6484
(800) 637-3863
DEAR SHAREHOLDER
Share prices for healthcare issues continued to stabilize during the
last months of 1994 and began to improve in January 1995. This was a
significant change compared to the first half of 1994, when the
prospect of increased government intervention (especially in the
United States) overshadowed the sector's performance. The major
negative developments during the January quarter, the Mexican
currency crisis and the earthquake in Japan, had only a modest
impact on the multinational healthcare sector. During the quarter,
total returns for Merrill Lynch Healthcare Fund, Inc.'s Class A, B,
C and D Shares were -0.28%, -0.61%, -0.31% and -0.56%, respectively.
(Results do not include sales charges, and would be lower if sales
charges were deducted. Complete performance information, including
average and aggregate total returns, can be found on pages 4--7 of
this report to shareholders.)
<PAGE>
In the United States, pharmaceutical stocks continued to benefit
from the more favorable investment outlook following the defeat of
healthcare reform in 1994. Profitability of pharmaceutical companies
in general has stabilized, and those companies with important new
products, such as Pfizer, Inc., should be able to generate
sustainable annual earnings growth rates in the 14%--16% area, in
our opinion. This is in contrast to more cyclically oriented
companies, whose profitability is likely to be undermined in a
slower economic environment brought about by higher interest rates.
At the same time, pharmaceutical share valuations, while rising, are
still not at premium levels, suggesting that there is still more
upside potential. Selected companies with less-bountiful new product
pipelines also could provide positive investment returns as their
share prices reflect the benefits of aggressive cost-cutting,
dividend increases, and share buyback plans. American Home Products
Corporation, whose shares we purchased during the January quarter,
falls into this category since its cost-cutting efforts will be
enhanced by the recent acquisition of American Cyanamid Company.
Among other industries in the healthcare sector, health maintenance
organizations (HMOs) are in the midst of a major membership growth
phase. The Fund has a position in United Healthcare Corp., a leading
HMO with over 3 million members in the United States.
Companies that manufacture medical devices have also returned to
investor favor. The regulatory climate has improved significantly,
since political pressures are leading the Food and Drug
Administration to expedite the new product review process. The large
backlog of applications to market new medical devices has been
substantially reduced. Another positive trend is the ongoing
consolidation within the healthcare sector.
Outside of the United States, shares of European healthcare
companies have generally outperformed local stock market indexes. We
believe this occurred because the worldwide economic recovery has
been lackluster and healthcare sector returns have improved, while
the US pharmaceutical market--in which certain European-domiciled
healthcare companies may derive one-half of their earnings--has
stabilized. The Japanese pharmaceutical sector also has outperformed
relative to Japanese stocks in general. This strong relative
performance appears to reflect the previous sharp undervaluation of
healthcare shares and the preliminary expectations that the
government-imposed pharmaceutical price cuts in April 1996 will be
slightly less than the April 1994 price cuts.
Investment Strategy
Within the healthcare sector there appears to be a "flight to
quality" as investors favor large-capitalization companies. We
continued to position the Fund in response to this trend. During the
January quarter, we increased the number of large-capitalization
holdings, especially pharmaceutical companies. In both the product
and service areas of the healthcare sector, our investment strategy
emphasizes commitments in those larger-capitalization companies with
superior sustainable earnings growth prospects.
<PAGE>
During the January quarter, we further reduced the Fund's cash
reserves to 11.7% of net assets, down from 20.2% at the end of the
prior quarter, both by adding to existing holdings and initiating
new positions. Among our largest new investments is a position in
Merck & Co., Inc. Merck has developed Fosfamax, a new medicine to
treat osteoporosis. We expect the company to apply in early 1995 for
approval to market the product. Osteoporosis is a debilitating
condition that afflicts primarily elderly women and results not only
in the pain and distress caused by broken bones, but also
substantial hospitalization costs. If approved late in 1995 or early
1996, Fosfamax may offer a means not only to alleviate human
suffering from osteoporosis, but may also minimize the costs
associated with treatment. Over the longer term, if justified by
further clinical study, Fosfamax might prove useful for the
prevention of osteoporosis. As virtually all post-menopausal women
are threatened by this condition, the potential for Fosfamax is
enormous.
Another new holding is Collagen Corp. This company pioneered the use
of proprietary treated collagen material for removal of wrinkles,
and more recently launched a collagen product for treatment of
urinary incontinence. The latter product is becoming well accepted
by urologists and other medical practitioners.
We also established a position in Amgen, Inc., the preeminent
biotechnology company. We believe that Amgen's strategy of
selectively broadening its product line through research
collaborations with other companies and corporate acquisitions will
serve it well in the years ahead.
In Conclusion
After a protracted period of underperformance, it appears that
improved profitability, reasonable valuations and continued
consolidation will support healthcare share prices in 1995. With
more attractive investment opportunities now apparent in healthcare
companies, we expect to continue to commit cash reserves to those
companies we believe most likely to benefit in the improved
investment environment.
We thank you for your investment in Merrill Lynch Healthcare Fund,
Inc., and we look forward to reviewing our outlook and strategy with
you again in our next report to shareholders.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
<PAGE>
(Jordan C. Schreiber)
Jordan C. Schreiber
Vice President and Portfolio Manager
March 1, 1995
PERFORMANCE DATA
About Fund
Performance
Since October 21, 1994, investors have been able to purchase shares
of the Fund through the Merrill Lynch Select Pricing SM System, which
offers four pricing alternatives:
* 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.
* 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 8 years.
* 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.
* Class D Shares incur a maximum initial sales charge of 5.25% and
an account maintenance fee of 0.25% (but no distribution fee).
Performance data for the Fund's Class A and Class B Shares are
presented in the "Performance Summary," "Recent Performance Results"
and "Average Annual Total Return" tables on pages 4--7. Data for
Class C and Class D Shares are also presented in the "Recent
Performance Results" and "Aggregate Total Return" tables on pages 4,
5 and 7.
<PAGE>
The "Recent Performance Results" table shows investment results
before the deduction of any sales charges for Class A and Class B
Shares for the 12-month and 3-month periods ended January 31, 1995
and for Class C and Class D Shares for the since inception and 3-
month periods ended January 31, 1995. All data in this table assume
imposition of the actual total expenses incurred by each class of
shares during the relevant period.
None of the past results shown should 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. 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.
Average Annual
Total Return+++
% Return Without % Return With
Class A Shares* Sales Charge Sales Charge**
Year Ended 12/31/94 -4.30% -9.32%
2/01/90++ through 12/31/94 +6.34 +5.18
Five Years Ended 12/31/94 +6.37 +5.23
Ten Years Ended 12/31/94 +9.87 +9.28
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
++On February 1, 1990, Merrill Lynch Asset Management became the sole
investment adviser.
% Return % Return
Class B Shares* Without CDSC With CDSC**
Year Ended 12/31/94 -4.99% -8.50%
2/01/90++ through 12/31/94 +5.29 +5.29
Five Years Ended 12/31/94 +5.24 +5.24
Inception (10/21/88) through 12/31/94 +6.31 +6.31
[FN]
*Maximum contingent deferred sales charge is 4% and is reduced to 0%
after 4 years.
**Assuming payment of applicable contingent deferred sales charge.
++On February 1, 1990, Merrill Lynch Asset Management became the sole
investment adviser.
<PAGE>
Aggregate
Total Return
% Return % Return
Class C Shares* Without CDSC With CDSC**
Inception (10/21/94) through 12/31/94 -4.28% -5.24%
[FN]
*Maximum contingent sales charge is 1% and is reduced to 0% after 1 year.
**Assuming payment of applicable contingent deferred sales charge.
% Return Without % Return With
Class D Shares* Sales Charge Sales Charge**
Inception (10/21/94) through 12/31/94 -6.09% -11.02%
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
<TABLE>
Recent
Performance
Results*
<CAPTION>
12 Month 3 Month
1/31/95 10/31/94 1/31/94++ % Change++ % Change
<S> <C> <C> <C> <C> <C>
Class A Shares $3.61 $3.62 $4.17 -6.38%(1) -0.28%
Class B Shares 3.25 3.27 3.83 -7.53(1) -0.61
Class C Shares 3.26 3.27 3.27 -0.31 -0.31
Class D Shares 3.52 3.54 3.61 -2.49 -0.56
Class A Shares--Total Return -6.38(1) -0.28
Class B Shares--Total Return -7.53(1) -0.61
Class C Shares--Total Return -0.31 -0.31
Class D Shares--Total Return -2.49 -0.56
<FN>
*Investment results shown do not reflect sales charges; results
shown would be lower if a sales charge was included.
++Investment results shown for Class C and Class D Shares are since
inception (10/21/94).
(1)Percent change includes reinvestment of $0.266 per share capital
gains distributions.
</TABLE>
<PAGE>
<TABLE>
Performance
Summary--
Class A Shares+++
<CAPTION>
Net Asset Value Capital Gains Dividends
Period Covered Beginning Ending Distributed Paid* % Change**
<S> <C> <C> <C> <C> <C>
4/1/83--12/31/83 $ 9.15 $ 9.56 -- $0.120 + 5.85%
1984 9.56 8.83 $ 0.040 0.090 - 6.34
1985 8.83 10.65 -- 0.120 +22.16
1986 10.65 11.94 0.530 0.100 +17.86
1987 11.94 9.90 3.347 0.015 +10.24
1988 9.90 9.56 0.825 0.145 + 6.39
1989 9.56 9.09 1.422 0.068 +11.46
1990 9.09 7.29 0.832 0.489 - 6.19
1991 7.29 9.18 -- 1.320 +45.71
1992 9.18 4.03 4.123++ 1.028 + 6.92
1993 4.03 3.91 -- 0.013 - 2.63
1994 3.91 3.46 0.266 -- - 4.30
1/1/95--1/31/95 3.46 3.61 -- -- + 4.34
------- ------
Total $11.385 Total $3.508
Cumulative total return as of 1/31/95: +165.14%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures assume reinvestment of all dividends and capital gains
distributions at net asset value on the ex-dividend date, and do not
include sales charge; results would be lower if sales charge was
included.
++Figure includes a $0.879 and $3.089 return of capital on 4/22/92
and 4/27/92, respectively.
+++See Important Note on page 6.
</TABLE>
PERFORMANCE DATA (concluded)
<PAGE>
<TABLE>
Performance
Summary--
Class B Shares+++
<CAPTION>
Net Asset Value Capital Gains Dividends
Period Covered Beginning Ending Distributed Paid* % Change**
<C> <C> <C> <C> <C> <C>
10/21/88--12/31/88 $10.24 $9.55 $0.825 $0.089 + 2.22%
1989 9.55 9.07 1.422 0.006 +10.70
1990 9.07 7.19 0.832 0.455 - 7.42
1991 7.19 8.96 -- 1.291 +44.21
1992 8.96 3.72 4.123++ 1.028 + 5.46
1993 3.72 3.59 -- -- - 3.49
1994 3.59 3.13 0.266 -- - 4.99
1/1/95--1/31/95 3.13 3.25 -- -- + 3.83
------ ------
Total $7.468 Total $2.869
Cumulative total return as of 1/31/95: +51.68%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures assume reinvestment of all dividends and capital gains
distributions at net asset value on the ex-dividend date, and do not
reflect deduction of any sales charge; results would be lower if
sales charge was deducted.
++Figure includes a $0.879 and $3.089 return of capital on 4/22/92
and 4/27/92, respectively.
</TABLE>
[FN]
+++Important Note:
Prior to April 27, 1992, Merrill Lynch Healthcare Fund, Inc. was
known as Sci/Tech Holdings, Inc. and contained, in addition
to a healthcare portfolio, a portfolio of technology securities. The
data on pages 4 and 5 and the table above include the performance of
the technology portfolio which is no longer part of the Fund. Set
forth below are performance data which, for the period before April
27, 1992, includes only the performance of the healthcare portfolio
and a pro rata allocated portion of Sci/Tech Holdings, Inc.'s cash
reserves. On February 1, 1990, Merrill Lynch Asset Management became
the sole investment adviser.
<PAGE>
Average Annual
Total Return
% Return Without % Return With
Class A Shares* Sales Charge Sales Charge**
Year Ended 12/31/94 - 4.30% - 9.32%
2/01/90++ through 12/31/94 +13.08 +11.84
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
++Due to the inability to completely isolate the performance of Sci/Tech
Holdings, Inc.'s technology portfolio from its healthcare portfolio,
computations are based upon management's estimates of the healthcare
portfolio.
% Return % Return
Class B Shares* Without CDSC With CDSC**
Year Ended 12/31/94 - 4.99% - 8.50%
2/01/90++ through 12/31/94 +12.50 +12.50
[FN]
*Maximum contingent deferred sales charge is 4% and is reduced to 0%
after 4 years.
**Assuming payment of applicable contingent deferred sales charge.
++Due to the inability to completely isolate the performance of Sci/Tech
Holdings, Inc.'s technology portfolio from its healthcare portfolio,
computations are based upon management's estimates of the healthcare
portfolio.
<TABLE>
Recent
Performance
Results
<CAPTION>
12 Month 2/01/90 to 1/31/95++
% Change % Change
<S> <C> <C>
Class A Shares--Total Return -6.38%(1) +90.88%
Class B Shares--Total Return -7.53(1) +85.26
<FN>
++Due to the inability to completely isolate the performance of
Sci/Tech Holdings, Inc.'s technology portfolio from its healthcare
portfolio, computations are based upon management's estimates of the
healthcare portfolio.
(1)Percent change includes reinvestment of $0.266 per share capital
gains distributions.
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS
<CAPTION>
NORTH Percent of
AMERICA Industries Shares Held Investments Cost Value Net Assets
<S> <C> <C> <C> <C> <C> <C>
United States Biotechnology 50,000 Amgen, Inc. $ 2,987,500 $ 3,181,250 2.4%
150,000 BioCryst Pharmaceuticals, Inc. 975,000 825,000 0.6
24,600 Biomira Inc. 146,134 83,025 0.1
200,000 Genelabs Technologies, Inc. 450,000 275,000 0.2
------------ ------------ ------
4,558,634 4,364,275 3.3
Diagnostics 188,200 Aprogenex Inc. 1,678,948 1,364,450 1.0
560,000 Meris Laboratories, Inc. 4,722,934 2,170,000 1.6
100,000 Sangstat Medical Corp. 700,000 500,000 0.4
------------ ------------ ------
7,101,882 4,034,450 3.0
Health Care Cost 15,000 Columbia/HCA Healthcare
Containment Corporation 580,137 601,875 0.5
30,000 Medaphis Corp. 410,500 1,500,000 1.1
60,000 Physician Corporation of America 1,548,750 1,395,000 1.1
55,000 Pyxis Corporation 1,278,127 1,051,875 0.8
150,000 RightCHOICE Managed Care, Inc. 1,688,725 2,118,750 1.6
90,000 United Healthcare Corp. 4,568,946 4,365,000 3.3
------------ ------------ ------
10,075,185 11,032,500 8.4
Medical 100,000 Baxter International, Inc. 2,814,390 2,950,000 2.2
Specialties 25,000 Becton, Dickinson & Company 1,287,750 1,312,500 1.0
40,000 Collagen Corp. 970,000 980,000 0.7
100,000 Cordis Corp. 4,445,311 6,250,000 4.7
600,000 EP Technologies, Inc. 4,317,502 6,375,000 4.8
76,800 Fresenius USA Inc. 529,404 748,800 0.6
100,000 Medtronic, Inc. 3,390,500 5,937,500 4.5
140,000 North American Vaccine Inc., NVX 1,490,243 1,242,500 0.9
100,000 Ostex International, Inc. 950,000 950,000 0.7
219,467 Uromed Corp. 1,000,005 1,261,935 1.0
10,000 Ventritex, Inc. 209,000 270,000 0.2
------------ ------------ ------
21,404,105 28,278,235 21.3
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded)
<CAPTION>
NORTH
AMERICA Percent of
(concluded) Industries Shares Held Investments Cost Value Net Assets
<S> <C> <C> <C> <C> <C> <C>
United States Pharmaceutical-- 100,000 Abbott Laboratories $ 3,346,810 $ 3,537,500 2.7%
(concluded) Diversified 20,000 Allergan, Inc. 562,138 580,000 0.4
40,000 American Home Products Corporation 2,638,025 2,805,000 2.1
80,000 Elan Corporation PLC (ADR)** 2,884,304 2,820,000 2.1
209,300 IVAX Corp. 5,847,883 4,395,300 3.3
40,000 Teva Pharmaceuticals Industries,
Inc. (ADR)** 1,170,000 1,025,000 0.8
100,000 Warner-Lambert Co. 7,648,674 7,800,000 5.9
------------ ------------ ------
24,097,834 22,962,800 17.3
Pharmaceutical-- 30,000 Lilly (Eli) & Co. 1,678,050 1,976,250 1.5
Prescription 130,000 Merck & Co., Inc. 5,006,554 5,232,500 4.0
100,000 Pfizer, Inc. 7,599,250 8,175,000 6.2
20,000 Schering-Plough 1,279,956 1,570,000 1.2
------------ ------------ ------
15,563,810 16,953,750 12.9
Investments in the United
States 82,801,450 87,626,010 66.2
Total Investments in North
America 82,801,450 87,626,010 66.2
PACIFIC
BASIN
Australia Biotechnology 738,900 Biota Holdings, Ltd. 1,668,997 1,018,684 0.8
Investments in Australia 1,668,997 1,018,684 0.8
India Pharmaceutical-- 150,000 Ranbaxy Laboratories Ltd. (GDS)* 2,987,300 3,150,000 2.4
Prescription
Investments in India 2,987,300 3,150,000 2.4
Japan Pharmaceutical-- 30,000 Kissei Pharmaceuticals Co., Ltd. 1,219,297 1,164,990 0.9
Diversified
<PAGE>
Investments in Japan 1,219,297 1,164,990 0.9
Total Investments in the Pacific
Basin 5,875,594 5,333,674 4.1
WESTERN
EUROPE
Germany Pharmaceutical-- 2,500 Schering AG 1,618,971 1,781,145 1.4
Diversified
Investments in Germany 1,618,971 1,781,145 1.4
Netherlands Pharmaceutical-- 68,000 AKZO N.V. 5,621,687 7,697,662 5.8
Prescription
Investments in the Netherlands 5,621,687 7,697,662 5.8
Sweden Medical 110,000 Elekta Instrument AB 'B' Free 2,166,067 2,770,375 2.1
Specialties
Pharmaceutical-- 150,000 Astra AB 'B' Free 4,063,678 3,707,825 2.8
Prescription 80,000 Pharmacia Biotech AB (Class B) 1,302,762 1,433,826 1.1
------------ ------------ ------
5,366,440 5,141,651 3.9
Investments in Sweden 7,532,507 7,912,026 6.0
Switzerland Pharmaceutical-- 1,500 Roche Holdings AG 7,079,274 7,444,574 5.6
Diversified
Investments in Switzerland 7,079,274 7,444,574 5.6
United Biotechnology 80,000 British Biotech PLC 459,851 673,712 0.5
Kingdom 34,998 British Biotech PLC (Warrants)(a) 19,246 61,380 0.1
Investments in the United Kingdom 479,097 735,092 0.6
Total Investments in Western
Europe 22,331,536 25,570,499 19.4
<CAPTION>
SHORT-TERM Face
SECURITIES Amount
<S> <C> <S> <C> <C> <C>
Commercial $5,366,000 Associates Corp. of North
Paper*** America, 5.78% due 2/01/1995 5,366,000 5,366,000 4.1
3,000,000 Matterhorn Capital Corp., 5.68%
due 2/09/1995 2,996,213 2,996,213 2.3
------------ ------------ ------
8,362,213 8,362,213 6.4
<PAGE>
US Government & 5,000,000 Federal Home Loan Mortgage Corp.,
Agency 5.80% due 2/27/1995 4,979,056 4,979,056 3.8
Obligations***
2,000,000 Federal National Mortgage Associa-
tion, 5.89% due 2/28/1995 1,991,165 1,991,165 1.5
------------ ------------ ------
6,970,221 6,970,221 5.3
Total Investments in Short-Term
Securities 15,332,434 15,332,434 11.7
Total Investments $126,341,014 133,862,617 101.4
============
Liabilities in Excess of Other Assets (1,812,038) (1.4)
------------ ------
Net Assets $132,050,579 100.0%
============ ======
Net Asset Value: Class A--Based on net assets of $64,733,952 and
17,948,015 shares outstanding $ 3.61
============
Class B--Based on net assets of $65,333,853 and
20,074,846 shares outstanding $ 3.25
============
Class C--Based on net assets of $374,852 and
115,156 shares outstanding $ 3.26
============
Class D--Based on net assets of $1,607,922 and
456,149 shares outstanding $ 3.52
============
<FN>
*Global Depositary Shares (GDS).
**American Depositary Receipts (ADR).
***Commercial Paper and certain US Government & Agency Obligations
are traded on a discount basis; the interest rates shown are the
discount rates paid at the time of purchase by the Company.
(a)Warrants entitle the Company to purchase a predetermined number
of shares of Common Stock. The purchase price and number of shares
are subject to adjustment under certain conditions until the
expiration date.
PORTFOLIO CHANGES
For the Quarter Ended January 31, 1995
<PAGE>
Additions
Abbott Laboratories
Allergan, Inc.
American Home Products Corporation
Amgen, Inc.
Baxter International, Inc.
Becton, Dickinson & Company
*Bergen Brunswig Corp.
Collagen Corp.
Elan Corporation PLC (ADR)
Merck & Co., Inc.
*Mid Atlantic Medical Services, Inc.
*National Medical Enterprises
Ostex International, Inc.
Roche Holdings AG
Schering AG
Deletions
Argus Pharmaceuticals, Inc.
*Bergen Brunswig Corp.
Biogen, Inc.
Chiron Corp.
Genentech, Inc.
Health Management Systems, Inc.
InControl, Inc.
Matrix Pharmaceuticals Inc.
MedQuist, Inc.
*Mid Atlantic Medical Services, Inc.
*National Medical Enterprises
PerSeptive Biosystems, Inc.
Pharmaceutical Marketing Services, Inc.
Quidel Corp.
Rhone-Poulenc Rorer, Inc.
Rhone-Poulenc SA (PIC)
Systemed, Inc.
Taisho Pharmaceutical Co., Ltd.
<FN>
*Added and deleted in the same quarter.
PORTFOLIO INFORMATION
<PAGE>
Worldwide
Investments
As of 1/31/95
Percent Breakdown of Percent of
Securities by Country Net Assets
United States 66.2%
Sweden 6.0
Netherlands 5.8
Switzerland 5.6
India 2.4
Germany 1.4
Japan 0.9
Australia 0.8
United Kingdom 0.6
Industries Represented Percent of
In the Portfolio Net Assets
Pharmaceutical--Diversified 25.2%
Pharmaceutical--Prescription 25.0
Medical Specialties 23.4
Health Care Cost Containment 8.4
Biotechnology 4.7
Diagnostics 3.0
Ten Largest Holdings Percent of
Represented in the Portfolio Net Assets
Pfizer, Inc. 6.2%
Warner-Lambert Co. 5.9
AKZO N.V. 5.8
Roche Holdings AG 5.6
EP Technologies, Inc. 4.8
Cordis Corp. 4.7
Medtronic, Inc. 4.5
Merck & Co., Inc. 4.0
IVAX Corp. 3.3
United Healthcare Corp. 3.3
</TABLE>
