[CBA LOGO OMITTED]
CBA Money Fund
Semi-Annual Report
August 31, 1997
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.
CBA Money Fund
Box 9011
Princeton, NJ 08543-9011
#11676 -- 8/97
[RECYCLE LOGO OMITTED]
Printed on post-consumer recycled paper
CBA Money Fund
Dear Shareholder:
For the six-month period ended August 31, 1997, CBA Money Fund paid
shareholders a net annualized dividend of 4.95%.* The Fund's 7-day
yield as of August 31, 1997 was 5.00%.
The average portfolio maturity for CBA Money Fund at August 31, 1997
was 83 days, compared to 68 days at February 28, 1997.
The Environment
During the six-month period ended August 31, 1997, investor
perceptions regarding the prospects for the US economy shifted,
creating greater volatility in the stock and bond markets. Early in
the period, investor concerns focused on an overheating economy,
increasing inflationary pressures and the prospect of higher interest
rates. These concerns were heightened when the Federal Reserve Board
tightened monetary policy at its March 25 meeting. Shortly thereafter,
we gradually extended the Fund's average portfolio maturity on the
belief that monetary policy would remain on hold for the foreseeable
future. As the period continued, there was increasing evidence of
noninflationary economic growth. Investor confidence was boosted
further when the Federal Reserve Board chose to leave monetary policy
unchanged at its May, July and August meetings. This increased
confidence was reinforced further in late July by the passage of tax-
cut and five-year balanced budget bills.
Footnote reads:
* Based on a constant investment throughout the period, with dividends
compounded daily, and reflecting a net return to the investor after
all expenses.
However, by late August, the consensus outlook had changed, with
forecasts of overheating growth and inflationary expectations. These
concerns were reinforced by a large upward revision in the second-
quarter real gross domestic product growth from an original estimate
of 2.2% to 3.6%. In contrast, employment data reported for August was
weaker than expected as the United Parcel Service strike dampened job
growth. Although there are few inflationary pressures at present, it
remains to be seen whether economic activity will continue to be
moderate enough to rule out future Federal Reserve Board monetary
policy tightenings later this year.
The Fund's portfolio composition at the end of the August period and
as of our last report to shareholders is detailed below:
8/31/97 2/28/97
------- -------
Bank Notes 6.9% 1.1%
Certificates of Deposit 3.1 3.8
Certificates of Deposit --
European 1.3 --
Certificates of Deposit -- Yankee* 8.6 1.6
Commercial Paper 44.2 54.8
Corporate Notes 12.8 11.1
Master Notes &
Funding Agreements 2.9 2.9
Repurchase Agreements 2.9 1.0
US Government & Agency
Obligations 16.8 23.5
Other Assets Less Liabilities 0.5 0.2
----- -----
100.0% 100.0%
Footnote reads:
* US branches of foreign banks.
In Conclusion
We appreciate your continued support of CBA 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/ CARLO J. GIANNINI
Carlo J. Giannini
Vice President and Portfolio Manager
September 26, 1997
Officers and Trustees
Arthur Zeikel--President and Trustee
Ronald W. Forbes--Trustee
Cynthia A. Montgomery--Trustee
Charles C. Reilly--Trustee
Kevin A. Ryan--Trustee
Richard R. West--Trustee
Terry K. Glenn--Executive Vice President
Joseph T. Monagle Jr.--Senior Vice President
Donald C. Burke--Vice President
Carlo J. Giannini--Vice President
Kevin J. McKenna--Vice President
Gerald M. Richard--Treasurer
Robert Harris--Secretary
Custodian
State Street Bank and Trust Company
P.O. Box 1713
Boston, MA 02101
Transfer Agent
Merrill Lynch Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 221-7210*
* For inquiries regarding your CBA account,
call (800) 247-6400.
<TABLE>
<CAPTION>
CBA Money Fund
Schedule of Investments as of August 31, 1997 (in Thousands)
Face Interest Maturity Value
Issue Amount Rate* Date (Note 1a)
<S> <C> <C> <C> <C>
Bank Notes -- 6.9%
Bank of America N.T. $10,000 5.93% 6/24/98 $9,997
& S.A., San Francisco 13,000 5.67+ 6/30/98 12,991
The Bank of 14,000 5.94 6/30/98 13,998
New York, NY
First Bank N.A., 25,000 5.533+ 1/22/98 24,992
Milwaukee
First Bank N.A., 15,200 5.593+ 11/19/97 15,200
Minneapolis
First National Bank 10,000 5.80 7/30/98 9,986
of Chicago 10,000 5.88 8/26/98 9,992
KeyBank N.A. 9,000 5.59+ 5/06/98 8,997
16,000 5.54+ 8/20/98 15,989
15,000 5.57+ 8/28/98 14,990
Northern Trust 5,000 5.95 6/24/98 4,999
Co., Chicago
SunTrust Bank, Atlanta 10,000 5.80 7/24/98 9,986
U.S. National Bank 3,000 5.665+ 4/14/98 2,999
of Oregon
Total Bank Notes
(Cost -- $155,127) 155,116
Certificates of Deposit -- 3.1%
Chase Manhattan 25,000 6.00 6/16/98 25,005
Bank, NY 10,000 5.87 7/21/98 9,991
Morgan Guaranty Trust 25,000 5.71 1/06/98 24,978
Company of NY 10,000 5.87 8/06/98 9,990
Total Certificates of Deposit
(Cost -- $69,994) 69,964
Certificates of Deposit -- European -- 1.3%
Barclays Bank PLC, 20,000 6.08 6/15/98 20,016
London
Westdeutsche 10,000 5.83 8/03/98 9,986
Landesbank
Girozentrale, London
Total Certificates of Deposit -- European
(Cost -- $30,002) 30,002
Certificates of Deposit -- Yankee -- 8.6%
ABN-AMRO Bank N.V., 10,000 5.68 12/22/97 9,994
Chicago 10,000 5.93 6/19/98 9,997
10,000 5.77 7/28/98 9,983
10,000 5.85 8/07/98 9,988
Barclays Bank PLC, 10,000 5.94 6/25/98 9,998
NY 10,000 5.86 8/18/98 9,990
Bayerische 15,000 5.50 12/04/97 14,985
Landesbank 10,000 5.85 7/10/98 9,989
Girozentrale, NY
Deutsche Bank AG, 10,000 5.63 2/26/98 9,985
NY
Landesbank 15,000 5.94 6/19/98 14,997
Hessen Thuringen
Girozentrale, NY
Royal Bank of 10,000 6.05 6/10/98 10,005
Canada, NY 10,000 5.79 8/20/98 9,983
Swiss Bank Corp., NY 25,000 5.95 7/02/98 24,993
10,000 5.90 8/28/98 9,994
Westdeutsche 10,000 5.60+ 3/06/98 9,996
Landesbank 17,000 5.94 6/29/98 16,997
Girozentrale, NY
Total Certificates of Deposit -- Yankee
(Cost -- $191,951) 191,874
Commercial Paper -- 44.2%
Aesop Funding Corp. 15,000 5.55 9/09/97 14,975
9,200 5.54 9/16/97 9,175
Alpine Securitization 25,000 5.53 9/11/97 24,950
Corp. 11,798 5.54 9/12/97 11,773
American Home 10,000 5.62 9/03/97 9,992
Products Corp.
American Honda 14,000 5.54 10/24/97 13,879
Finance Corp. 31,000 5.54 10/28/97 30,713
Apreco, Inc. 25,000 5.53 9/12/97 24,946
Atlantic Asset 10,000 5.54 9/08/97 9,985
Securitization Corp. 20,000 5.54 9/12/97 19,957
Bear Stearns 25,000 5.53 10/02/97 24,870
Companies, Inc.
CSW Credit, Inc. 25,700 5.53 9/05/97 25,672
20,200 5.52 9/22/97 20,126
14,800 5.54 11/14/97 14,624
Clipper Receivables 20,000 5.52 9/03/97 19,985
Corp.
Commonwealth Bank 20,000 5.42 9/12/97 19,957
of Australia
Corporate Receivables 25,000 5.52 9/05/97 24,973
Corp.
Countrywide Home 25,000 5.54 10/09/97 24,842
Loans, Inc.
Eureka Securitization 25,000 5.54 9/11/97 24,950
Inc.
Falcon Asset 5,050 5.55 9/08/97 5,042
Securitization Corp. 37,000 5.53 9/18/97 36,886
Finova Capital Corp. 11,815 5.58 9/11/97 11,791
20,000 5.53 10/22/97 19,833
20,000 5.55 11/26/97 19,725
30,000 5.59 1/06/98 29,394
10,000 5.59 1/21/98 9,775
GTE Corporation 25,000 5.55 9/04/97 24,977
GTE Funding Inc. 20,000 5.53 9/11/97 19,960
General Motors 25,000 5.58 9/08/97 24,961
Acceptance Corp. 10,000 5.82 11/03/97 9,898
25,000 5.70 11/20/97 24,680
25,000 5.54 1/20/98 24,441
Greenwich Funding 16,524 5.54 9/12/97 16,488
Corporation
Halifax PLC 25,000 5.42 9/08/97 24,961
International 25,000 5.53 9/11/97 24,950
Securitization Corp. 15,000 5.53 9/16/97 14,959
Lehman Brothers 20,000 5.63 9/02/97 19,988
Holdings, Inc.
Lexington Parker 10,000 5.55 9/10/97 9,982
Capital Company, LLC 25,000 5.52 9/15/97 24,935
15,147 5.53 9/15/97 15,108
15,000 5.53 9/18/97 14,954
25,000 5.53 9/25/97 24,896
National Fleet Funding 25,000 5.52 9/04/97 24,977
Corp. 18,000 5.52 9/11/97 17,964
7,000 5.54 10/08/97 6,957
New Center 15,000 5.55 12/31/97 14,713
Asset Trust
Old Line Funding Corp. 10,000 5.55 9/12/97 9,978
13,233 5.52 9/19/97 13,190
Park Avenue 25,000 5.52 9/17/97 24,927
Receivables Corp. 10,000 5.52 9/18/97 9,969
RTZ America, Inc. 10,200 5.52 10/09/97 10,136
Windmill Funding Corp. 22,255 5.53 9/08/97 22,221
10,000 5.53 9/12/97 9,979
Total Commercial Paper
(Cost -- $987,933) 987,939
Corporate Notes -- 12.8%
Abbey National 25,000 5.61+ 2/10/98 24,992
Treasury Services PLC 20,000 5.59+ 2/25/98 19,992
10,000 5.93 3/25/98 10,003
25,000 5.65+ 4/15/98 24,992
15,000 5.57+ 6/09/98 14,992
Asset-Backed Securities 12,500 5.652+ 10/15/97 12,500
Investment Trust (1996-M)
Associates Corp. of 4,000 6.80 12/29/97 4,013
North America 1,350 8.375 1/15/98 1,362
Bank of Scotland 4,000 5.95 6/18/98 4,000
Treasury Services PLC
CIT Group Holdings, 25,000 5.61+ 10/27/97 24,997
Inc. (The) 25,000 5.60+ 12/23/97 24,993
4,500 5.58+ 8/17/98 4,496
Credit Suisse First 8,000 5.78+ 4/14/98 8,001
Boston Inc.
First Bank System 15,000 5.613+ 12/17/97 15,000
IBM Credit Corporation 10,000 5.93 3/18/98 10,004
10,000 5.868 8/13/98 9,987
LABS Trust (Series 20,572 5.625+ 12/29/97 20,572
1996-C), Senior Notes
LINCS (Series 1996-3) 10,000 5.652+ 1/12/98 10,000
Morgan Guaranty Trust 15,000 5.615+ 2/19/98 14,996
Co. of NY
Premier Auto Trust 181 5.477 12/08/97 181
1997-2, Class A-1
SMM Trust (1997-Q) 25,000 5.652+ 1/15/98 25,000
Total Corporate Notes
(Cost -- $285,058) 285,073
Master Notes & Funding Agreements -- 2.9%
Goldman Sachs $40,000 5.625+% 4/28/98 $40,000
Group, L.P.
Jackson National Life 25,000 5.655+ 5/01/98 25,000
Insurance Co.
Total Master Notes & Funding Agreements
(Cost -- $65,000) 65,000
US Government & Agency Obligations --
Non-Discount Notes -- 16.8%
Federal Farm Credit 10,000 5.85 10/01/97 10,002
Banks
Federal Home Loan 5,500 5.50 11/10/97 5,497
Banks 30,000 5.45+ 12/10/97 29,996
3,900 6.355 6/11/99 3,910
5,000 5.99 8/11/99 4,986
Federal Home Loan 20,000 5.57+ 4/20/98 19,992
Mortgage Corp. 4,000 6.36 5/20/99 4,015
Federal National 13,000 5.405+ 9/03/97 13,000
Mortgage Association 10,000 5.45+ 9/09/97 10,000
9,000 5.45+ 9/29/97 9,000
16,000 5.435+ 10/20/97 15,998
16,000 5.57+ 3/26/98 15,995
21,000 5.46+ 3/27/98 20,992
25,000 5.50+ 4/24/98 24,994
10,000 5.68 7/31/98 9,988
4,000 6.375 5/21/99 4,016
2,800 5.88 8/10/99 2,787
Student Loan 25,000 5.74 10/03/97 25,002
Marketing Association 5,000 5.61+ 10/30/97 5,001
US Treasury Notes 10,000 8.75 10/15/97 10,039
27,150 7.375 11/15/97 27,243
1,000 5.25 12/31/97 999
9,000 5.00 1/31/98 8,976
4,000 7.25 2/15/98 4,028
29,000 5.125 2/28/98 28,937
7,000 7.875 4/15/98 7,096
15,000 5.875 4/30/98 15,023
28,000 6.125 5/15/98 28,096
10,000 5.25 7/31/98 9,956
Total US Government & Agency Obligations --
Non-Discount Notes (Cost -- $375,381) 375,564
</TABLE>
<TABLE>
<CAPTION>
Repurchase Agreements** -- 2.9%
Face Amount Issue
<S> <C> <C>
$64,327 Fuji Securities, Inc., purchased on
8/29/1997 to yield 5.60% to 9/02/1997 64,327
Total Repurchase Agreements
(Cost -- $64,327) 64,327
Total Investments (Cost -- $2,224,773) -- 99.5% 2,224,859
Other Assets Less Liabilities -- 0.5% 10,459
----------
Net Assets -- 100.0% $2,235,318
==========
* Commercial Paper and certain US Government & Agency Obligations are traded
on a discount basis; the interest rates shown are the discount rates paid at
the time of purchase by the Fund. Other securities bear interest at the
rates shown, payable at fixed dates or upon maturity. Interest rates on
variable rate securities are adjusted periodically based upon appropriate
indexes; the interest rates shown are those in effect at August 31, 1997.
** Repurchase Agreements are fully collateralized by US Government Obligations.
+ Variable Rate Notes.
See Notes to Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
CBA Money Fund
Statement of Assets and Liabilities as of August 31, 1997
<S> <C> <C>
Assets:
Investments, at value (identified cost -- $2,224,772,831*) (Note 1a) $2,224,859,408
Cash 260
Interest receivable 12,218,734
Prepaid registration fees and other assets (Note 1e) 153,043
--------------
Total assets 2,237,231,445
--------------
Liabilities:
Payables:
Investment adviser (Note 2) $671,333
Distributor (Note 2) 497,216 1,168,549
---------
Accrued expenses and other liabilities 744,782
--------------
Total liabilities 1,913,331
==============
Net Assets $2,235,318,114
==============
Net Assets Consist of:
Shares of beneficial interest, $.10 par value, unlimited number of shares authorized $223,523,154
Paid-in capital in excess of par 2,011,708,383
Unrealized appreciation on investments -- net 86,577
--------------
Net Assets -- Equivalent to $1.00 per share based on 2,235,231,537 shares of beneficial
interest outstanding $2,235,318,114
==============
* The aggregate cost of investments at August 31, 1997 for Federal income tax purposes was
$2,224,772,831. As of August 31, 1997, net unrealized appreciation for Federal income tax
purposes amounted to $86,577, of which $289,082 related to appreciated securities and $202,505
related to depreciated securities.
See Notes to Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
CBA Money Fund
Statement of Operations for the Six Months Ended August 31, 1997
<S> <C> <C>
Investment Income (Note 1d):
Interest and amortization of premium and discount earned $62,634,652
Expenses:
Investment advisory fees (Note 2) $4,611,372
Transfer agent fees (Note 2) 1,874,355
Distribution fees (Note 2) 1,330,738
Registration fees (Note 1e) 162,566
Accounting services (Note 2) 79,309
Printing and shareholder reports 73,059
Custodian fees 56,308
Professional fees 19,570
Trustees' fees and expenses 18,269
Other 13,646
----------
Total expenses before reimbursement 8,239,192
Reimbursement of expenses (Note 2) (445,341)
----------
Total expenses after reimbursement 7,793,851
-----------
Investment Income -- Net 54,840,801
Realized Gain on Investments -- Net (Note 1d) 110,602
Change in Unrealized Depreciation on Investments -- Net 120,933
-----------
Net Increase in Net Assets Resulting from Operations $55,072,336
===========
See Notes to Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
For the Six For the
CBA Money Fund Months Ended Year Ended
Statements of Changes in Net Assets August 31, 1997 February 28, 1997
<S> <C> <C>
Increase (Decrease) in Net Assets:
Operations:
Investment income -- net $54,840,801 $98,710,245
Realized gain on investments -- net 110,602 46,265
Change in unrealized appreciation/depreciation on investments -- net 120,933 (81,776)
-------------- -----------
Net increase in net assets resulting from operations 55,072,336 98,674,734
-------------- -----------
Dividends & Distributions to Shareholders (Note 1f):
Investment income -- net (54,840,801) (98,710,245)
Realized gain on investments -- net (110,602) (46,265)
-------------- -----------
Net decrease in net assets resulting from dividends and distributions to shareholders (54,951,403) (98,756,510)
-------------- -----------
Beneficial Interest Transactions (Note 3):
Net proceeds from sale of shares 3,168,953,184 5,723,246,368
Net asset value of shares issued to shareholders in reinvestment of dividends and
distributions (Note 1f) 54,848,106 98,549,542
-------------- -----------
3,223,801,290 5,821,795,910
Cost of shares redeemed (3,225,264,113) (5,573,053,954)
-------------- -----------
Net increase (decrease) in net assets derived from beneficial interest transactions (1,462,823) 248,741,956
-------------- -----------
Net Assets:
Total increase (decrease) in net assets (1,341,890) 248,660,180
Beginning of period 2,236,660,004 1,987,999,824
-------------- -----------
End of period $2,235,318,114 $2,236,660,004
============== ==============
See Notes to Financial Statements.
CBA Money Fund
Financial Highlights
The following per share data and ratios have been derived For the Six For the For the
from information provided in the financial statements. Months Ended Year Ended Year Ended For the Year Ended
August 31, February 28, February 29, February 28,
Increase (Decrease) in Net Asset Value: 1997 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00 $1.00
---------- ---------- ---------- ---------- ----------
Investment income -- net .0246 .0475 .0524 .0396 .0260
Realized and unrealized gain (loss) on investments -- net .0001 --** .0001 .0005 (.0004)
---------- ---------- ---------- ---------- ----------
Total from investment operations .0247 .0475 .0525 .0401 .0256
---------- ---------- ---------- ---------- ----------
Less dividends and distributions:
Investment income -- net (.0246) (.0475) (.0524) (.0396) (.0260)
Realized gain on investments -- net (.0001) --** (.0001) --** (.0004)
---------- ---------- ---------- ---------- ----------
Total dividends and distributions (.0247) (.0475) (.0525) (.0396) (.0264)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period $1.00 $1.00 $1.00 $1.00 $1.00
========== ========== ========== ========== ==========
Total Investment Return 4.95%* 4.87% 5.39% 4.04% 2.67%
========== ========== ========== ========== ==========
Ratios to Average Net Assets:
Expenses, net of reimbursement .70%* .69% .75% .77% .71%
========== ========== ========== ========== ==========
Expenses .74%* .73% .79% .81% .75
========== ========== ========== ========== ==========
Investment income and realized gain on
investments -- net 4.94%* 4.71% 5.22% 3.98% 2.62%
========== ========== ========== ========== ==========
Supplemental Data:
Net assets, end of period (in thousands) $2,235,318 $2,236,660 $1,988,000 $1,406,315 $1,287,456
========== ========== ========== ========== ==========
* Annualized.
** Amount is less than $.0001 per share.
See Notes to Financial Statements.
CBA Money Fund
Notes to Financial Statements
1. Significant Accounting Policies:
CBA Money Fund (the "Fund") is a money fund whose shares are offered
to subscribers to the Capital Builder Account service of Merrill
Lynch, Pierce, Fenner & Smith Inc. ("MLPF&S") and to subscribers to
the Broadcort Capital Account service of Broadcort Capital Corp.
("Broadcort"). Shares may also be purchased by individual investors
not subscribing to these services, but such investors will not receive
any of the special features offered as a part of such services. The
Fund is registered under the Investment Company Act of 1940 as a
diversified, open-end management investment company. 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. The following is a summary of significant accounting
policies followed by the Fund.
(a) Valuation of investments -- Portfolio securities with remaining
maturities of sixty days or less are valued at amortized cost, which
approximates market value. Securities with remaining maturities of
greater than sixty days, for which market quotations are readily
available, will be valued at market value. 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. Other
securities held by the Fund will be valued at their 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
securities pursuant to repurchase agreements with a member bank of the
Federal Reserve System or a primary dealer in US Government
securities. Under such agreements, the bank or primary dealer 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). Realized gains and losses on security
transactions are determined on the identified cost basis. Interest
income (including amortization of premium and discount) is recognized
on the accrual 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 (net of non-
resident alien tax and back-up withholding tax withheld) in additional
fund shares at net asset value. Dividends and distributions are
declared from the total of net investment income and net realized gain
or loss on investments.
2. Investment Advisory Agreement and Transactions with Affiliates:
The Fund has entered into an Investment Advisory Agreement with Fund
Asset Management, L.P. ("FAM"). The general partner of FAM is
Princeton Services, Inc. ("PSI"), an indirect wholly-owned subsidiary
of Merrill Lynch & Co., Inc. ("ML & Co."), which is the
limited partner.
FAM (the "Manager") is responsible for the management of the Fund's
portfolio and provides the necessary personnel, 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 first $500 million of average daily net assets, 0.425% of
average daily net assets in excess of $500 million but not exceeding
$1 billion, and 0.375% of average daily net assets in excess of $1
billion. During the six months ended August 31, 1997, the Manager
earned $4,611,372, of which $445,341 was voluntarily waived.
The Fund has adopted a Distribution and Shareholder Servicing Plan in
compliance with Rule 12b-1 under the Investment Company Act of 1940,
pursuant to which MLPF&S and Broadcort each receive a distribution fee
under the Distribution Agreement from the Fund at the end of each
month at the annual rate of 0.125% of average daily net assets of the
Fund attributable to subscribers to the respective Capital Builder
Account and Broadcort Capital Account programs. The MLPF&S
distribution fee is to compensate MLPF&S financial consultants and
other directly involved branch office personnel for selling shares of
the Fund and for providing direct personal services to shareholders.
The Broadcort distribution fee is to compensate selected dealers for
activities and services related to the sale, promotion and marketing
of shares of the Fund. The distribution fee is not compensation for
the administrative and operational services rendered to the Fund by
MLPF&S or Broadcort in processing share orders and administering
shareholder accounts.
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 FAM at cost.
Certain officers and/or trustees of the Fund are officers and/or
directors of FAM, PSI, MLFDS, and/or ML & Co.
3. Beneficial Interest Transactions:
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, respectively, since shares are recorded at $1.00
per share.
</TABLE>
