MERRILL LYNCH
FUND FOR
TOMORROW, INC.
FUND LOGO
Semi-Annual Report
July 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 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.
<PAGE>
Merrill Lynch
Fund For Tomorrow, Inc.
Box 9011
Princeton, NJ
08543-9011
MERRILL LYNCH FUND FOR TOMORROW, INC.
Concept Sectors
A pie chart depicting Concept Sectors as a Percentage of Net Assets
As of July 31, 1995
Computer Technologies 3.7%
Demographic Trends 4.4%
Developing Foreign Economies 2.0%
Extended Economic Cycles 1.7%
Future Retailing 3.7%
Global Market Expansion 9.5%
Healthcare Cost Containment 11.1%
Industrial Outsourcing 2.3%
Industrial Renaissance 8.0%
Multimedia 6.7%
Next Generation Technology 10.5%
Progressive Education 0.7%
Strategic Growth Opportunities 4.2%
Telecommunications 21.4%
Cash* 10.1%
<PAGE>
[FN]
*Net of other assets less liabilities
Growth Stock Characteristics As of July 31, 1995
Bar graph depicting Growth Stock Characteristics as of July 31, 1995
% of Equity Holdings:
Emerging Growth 10.9% 17.5%
Established Growth 18.6% 22.1%
Stable Growth 16.3% 14.6%
DEAR SHAREHOLDER
In the July quarter, economic data generally showed evidence of
slowing activity. Gross domestic product growth for the first three
months of 1995 was reported at 2.7%, the weakest showing in the past
18 months. Other signs of a sluggish economy included lackluster
durable goods orders, slowing growth in the manufacturing sector,
and three consecutive months of declines in the Index of Leading
Economic Indicators, an occurrence which has often (but not always)
forecast recessions. As a result, concerns arose that the economic
"soft landing" could turn into an actual recession. However, at the
same time there were also expectations that a few months of very
slow or zero growth would be followed by a pickup in economic
activity later in the year. This view was supported by the stronger-
than-expected employment data for June and an upward revision in
May's employment figures, as well as improving housing activity
measures and consumer confidence surveys.
Thus far in 1995, economic developments have been very positive for
the US stock and bond markets, and most US stock market averages
recently have attained record levels. In contrast, the US dollar has
been persistently weak, especially relative to the yen. Following
the Federal Reserve Board's cut in short-term interest rates in
early July, continued signs of a moderating expansion and well-
contained inflationary pressures could provide further assurance
that the peak in US interest rates is behind us, creating a stronger
foundation for higher stock and bond prices. On the other hand,
indications of reaccelerating growth and increasing inflationary
pressures would likely suggest that higher interest rates are on the
horizon, a negative development for the US financial markets. The
outcome of the current deliberations on reducing the Federal budget
deficit will also play a role in the investment outlook for the US
capital markets.
<PAGE>
Portfolio Strategy
Continued evidence of a moderate slowdown in economic growth,
coupled with low inflation, declining interest rates and rising
corporate earnings, enabled the stock market to post strong gains
during the second quarter of 1995. While the broadly based Standard
& Poor's 500 composite index moved steadily higher throughout the
July quarter, the major thrust of rising stock prices occurred in
June and July among the smaller-capitalized stocks in the over-the-
counter market. Continuing the trend established early in the year,
technology issues led the rise of the NASDAQ Industrials to record
levels, driven by strong earnings and a favorable outlook for
computer systems and equipment. Fully participating in the stock
market uptrend, and exceeding its benchmark indexes, Merrill Lynch
Fund For Tomorrow, Inc. recorded one of the strongest quarters in
its history. Total returns for Class A, Class B, Class C and Class D
Shares for the July quarter were +18.06%, +17.71%, +17.79 % and
+17.95%, respectively. (Fund performance results do not reflect
sales charges; results would be lower if sales charges were
included.)
Our investment strategy during the quarter ended July 31, 1995 was
primarily oriented toward maintaining the momentum of our stronger-
performing investment sectors, while establishing a slightly more
defensive position near term. The rationale for this strategy was
based on what we believe is a continuing trend of superior growth by
small-sized and medium-sized technology companies, together with a
recognition of the increased risk associated with the stock market's
record levels. Therefore, our investment activity with regard to new
stocks and additions to existing positions focused on two goals. Our
first goal was to continue building the Fund's participation in high-
growth technology where, despite inherent stock price volatility,
capital appreciation opportunities were most prevalent. Accordingly,
six of the thirteen new stocks added and approximately half of our
additions to existing holdings were concentrated in the technology
sector. Our second goal centered on supplementing the portfolio's
more defensive sectors, especially among the areas of the stock
market which had more moderate price performance thus far in 1995.
Toward this end, new stock purchases and additions focused on the
healthcare, food and beverage, leisure and entertainment, and life
insurance industries.
Other defensive steps taken included reducing or eliminating certain
holdings which either exceeded our target prices or, in some cases,
appeared to have greater vulnerability in the event of a stock
market correction. Finally, our cash reserve position increased from
8.4% to 10.1% of net assets during the July quarter.
<PAGE>
As we mentioned in previous shareholder reports, one of the elements
of managing Merrill Lynch Fund For Tomorrow, Inc. is a continuous
process of adjusting the level of invested assets in each investment
concept and within our stock characteristics continuum. The
significant adjustments occurring in the quarter ended July 31,
1995, involved a lower allocation to extended economic cycles, where
holdings were reduced upon meeting our price targets. Similar
reductions occurred in the multimedia, industrial outsourcing and
progressive education concepts. We also eliminated the environmental
solutions concept by transferring its only two holdings, Molten
Metal Technology, Inc. and Kenetech Corp., to our new next
generation technology concept which better represents their business
profiles. Increased allocations of significance occurred in global
market expansion and healthcare cost containment. Regarding
adjustments in our growth stock continuum, we reduced our holdings
within the emerging growth category which, in part, reflected both
profit-taking as well as a slight shift toward a more defensive
investment posture as mentioned earlier.
From our analysis, several factors contributed to the favorable
investment performance of Merrill Lynch Fund For Tomorrow, Inc.
during the quarter ended July 31, 1995. On a quantitative basis, it
was apparent that many of the Fund's larger holdings experienced
impressive price performance resulting from excellent earnings and a
strong growth outlook. Two of the Fund's most notable holdings were
Nokia Corp. AB, which is its largest position, up 60%, and Motorola,
Inc., up 35%. These companies are two of the fastest-growing
manufacturers of cellular telephone products, which is a dynamic
growth industry worldwide. Other important contributors included
Philips Electronics N.V., Merck & Co., Inc., Schering-Plough Corp.,
The News Corp. Ltd., ALC Communications Corp. and Metrocall, Inc.,
all showing greater than 20% increases. In addition, despite their
relatively limited weighting individually, the Fund's smaller-
capitalization holdings collectively also made a significant
contribution. With regard to the Fund's investment concepts, major
capital appreciation came from some of the largest concentrations of
assets. These areas include telecommunications, healthcare, next
generation technology, and global market expansion.
However significant as these quantitative factors were, we believe
the overriding stimulus to the Fund's performance during the July
quarter, and thus far this year, was the "investment concept"
strategy we initiated nearly two years ago. This long-term
investment methodology emphasizes "early phase" recognition of a
company's growth potential and a generally longer waiting period for
potential appreciation as broader investor recognition develops.
Having structured the Fund within these parameters over the interim
period, we believe a substantial part of the Fund's portfolio has
entered into this broader recognition phase and that this will
continue to be a dynamic process in the future. Accordingly, we
believe as earlier investments begin to achieve increased
recognition for their growth prospects, new investments will provide
the framework for potential growth and stock appreciation over the
longer-term.
<PAGE>
In Conclusion
We appreciate your ongoing interest in Merrill Lynch Fund for
Tomorrow, Inc., and we look forward to assisting you with your
financial needs in the months and years ahead.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Vincent P. Dileo)
Vincent P. Dileo
Vice President and Portfolio Manager
August 30, 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.
<PAGE>
* 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" and "Average Annual Total
Return" tables on pages 4 and 5. Data for Class C and Class D Shares
are presented in the "Aggregate Total Return" table below. Data for
all the Fund's shares are presented in the "Recent Performance
Results" table on page 6.
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 July 31, 1995 and
for Class C and Class D Shares for the since inception and 3-month
periods ended July 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
Sales Charge Sales Charge**
Class A Shares*
Year Ended 6/30/95 +24.79% +18.24%
Five Years Ended 6/30/95 +10.48 + 9.29
Inception (10/26/88)
through 6/30/95 +11.25 +10.36
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
<PAGE>
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 6/30/95 +23.53% +19.53%
Five Years Ended 6/30/95 + 9.35 + 9.35
Ten Years Ended 6/30/95 +10.61 +10.61
[FN]
*Maximum contingent deferred sales charge is 4% and is reduced to 0%
after 4 years.
**Assuming payment of applicable contingent deferred sales charge.
Aggregate Total Return
% Return % Return
Without CDSC With CDSC**
Class C Shares*
Inception (10/21/94)
through 6/30/95 +14.58% +13.58%
[FN]
*Maximum contingent deferred sales charge is 1% and is reduced to 0%
after 1 year.
**Assuming payment of applicable contingent deferred sales charge.
% Return Without % Return With
Sales Charge Sales Charge**
Class D Shares*
Inception (10/21/94)
through 6/30/95 +15.74% +9.67%
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
<PAGE>
PERFORMANCE DATA (continued)
<TABLE>
Performance Summary--Class A Shares
<CAPTION>
Net Asset Value Capital Gains Dividends
Period Covered Beginning Ending Distributed Paid* % Change**
<C> <C> <C> <C> <C> <C>
10/26/88--12/31/88 $16.05 $14.08 $1.471 $0.134 - 2.21%
1989 14.08 16.85 1.035 0.409 +30.13
1990 16.85 14.92 0.371 0.401 - 6.98
1991 14.92 16.71 2.199 0.553 +32.23
1992 16.71 16.37 0.679 0.612 + 6.12
1993 16.37 15.85 1.920 0.308 +11.42
1994 15.85 13.66 0.705 0.258 - 7.47
1/1/95--7/31/95 13.66 16.82 0.566 -- +27.48
------ ------
Total $8.946 Total $2.675
Cumulative total return as of 7/31/95: +118.30%**
<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.
</TABLE>
<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>
3/5/84--12/31/84 $10.00 $10.98 -- $0.130 +11.12%
1985 10.98 13.37 $ 0.250 0.130 +25.75
1986 13.37 15.18 0.080 0.100 +14.90
1987 15.18 12.98 1.441 0.163 - 5.09
1988 12.98 14.07 1.555 0.201 +22.09
1989 14.07 16.85 1.035 0.227 +28.88
1990 16.85 14.92 0.371 0.235 - 7.96
1991 14.92 16.70 2.199 0.374 +30.79
1992 16.70 16.37 0.679 0.438 + 5.07
1993 16.37 15.77 1.920 0.217 +10.27
1994 15.77 13.45 0.705 0.243 - 8.45
1/1/95--7/31/95 13.45 16.45 0.566 -- +26.72
------- ------
Total $10.801 Total $2.458
Cumulative total return as of 7/31/95: +287.93%**
<PAGE>
<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.
</TABLE>
PERFORMANCE DATA (concluded)
<TABLE>
Recent Performance Results
<CAPTION>
12 Month 3 Month
7/31/95 4/30/95 7/31/94++ % Change++ % Change
<S> <C> <C> <C> <C> <C>
ML Fund For Tomorrow, Inc. Class A Shares* $16.82 $14.75 $13.72 +28.44%(1) +18.06%(2)
ML Fund For Tomorrow, Inc. Class B Shares* 16.45 14.48 13.58 +27.02(1) +17.71(2)
ML Fund For Tomorrow, Inc. Class C Shares* 16.38 14.41 14.08 +22.01(1) +17.79(2)
ML Fund For Tomorrow, Inc. Class D Shares* 16.78 14.73 14.26 +23.29(1) +17.95(2)
Standard & Poor's 500 Index** 562.06 514.71 458.26 +22.65 + 9.20
NASDAQ Industrial Index** 953.23 811.46 728.78 +30.80 +17.47
ML Fund For Tomorrow, Inc. Class A Shares--Total Return* +29.00(3) +18.06(2)
ML Fund For Tomorrow, Inc. Class B Shares--Total Return* +27.59(3) +17.71(2)
ML Fund For Tomorrow, Inc. Class C Shares--Total Return* +22.55(3) +17.79(2)
ML Fund For Tomorrow, Inc. Class D Shares--Total Return* +23.83(3) +17.95(2)
Standard & Poor's 500 Index--Total Return** +26.06 + 9.94
<FN>
*Investment results do not reflect sales charges; results shown
would be lower if a sales charge was included.
**An unmanaged broad-based Index comprised of common stocks. Total
investment returns for unmanaged indexes are based on estimates.
++Investment results shown for Class C and Class D Shares are since
inception (10/21/94).
(1)Percent change includes reinvestment of $0.724 per share capital
gains distributions.
(2)Percent change includes reinvestment of $0.566 per share capital
gains distributions.
(3)Percent change includes reinvestment of $0.059 per share ordinary
income dividends and $0.724 per share capital gains distributions.
</TABLE>
<PAGE>
PORTFOLIO INFORMATION
For the Quarter Ended July 31, 1995
Percent of
Ten Largest Equity Holdings Net Assets
Nokia Corp. AB (ADR) 6.7%
The News Corp. Ltd. (ADR)* 4.3
Schering-Plough Corp. 3.7
Thermo Electron Corp. 3.3
International Business Machines Corp. 3.2
Merck & Co., Inc. 3.0
Chrysler Corp. 2.6
Motorola, Inc. 2.2
ALC Communications Corp. 2.2
Philips Electronics N.V. (ADR) 2.1
[FN]
*Includes Common and Convertible Preferred Stock.
Additions
American Home Products Corp.
Andrew Corp.
Anheuser-Busch Companies, Inc.
*BAAN Co.
Carlton Communications PLC (ADR)
ConAgra, Inc.
Keravision, Inc.
Living Centers of America, Inc.
Maxis, Inc.
Ontrak Systems, Inc.
Promus Hotel Corporation**
Samsung Electronics Company
Torchmark Corp.
UUNET Technologies, Inc.
Deletions
American Power Conversion Corp.
*BAAN Co.
Carnival Corp. (Class A)
Caterpillar, Inc.
Cott Corp.
Creative Technology, Ltd. (Ordinary)
Deere & Co.
Nutramax Products, Inc.
Scholastic Corporation
Variflex, Inc.
Whirlpool Corp.
Wonderware Corp.
[FN]
*Added and deleted in the same quarter.
**Spinoff from The Promus Companies, Inc.
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS
<CAPTION>
Shares Value Percent of
Concept Tomorrow Held Stocks Cost (Note 1a) Net Assets
<S> <C> <S> <C> <C> <C>
Computer Technologies
Personal Computers 100,000 Apple Computer, Inc. $ 4,868,130 $ 4,475,000 1.3%
Personal Computers 100,000 COMPAQ Computer Corp. 3,428,748 5,075,000 1.5
Information Systems 50,000 Sun Microsystems, Inc. 1,096,250 2,400,000 0.7
Components 1,400,000 Videologic Group PLC 971,040 660,883 0.2
------------ ------------ ------
10,364,168 12,610,883 3.7
Demographic Trends
Health & Fitness 287,550 CML Group, Inc. 5,266,429 2,408,231 0.7
Leisure & Entertainment 50,000 Circus Circus Enterprises, Inc. 1,612,688 1,487,500 0.4
Specialty Services 16,000 Corrections Corp. of America 456,960 658,000 0.2
Leisure & Entertainment 50,000 ++Harrah's Entertainment, Inc. (b) 1,235,976 1,343,750 0.4
Healthcare 50,000 ++Living Centers of America, Inc. 1,676,340 1,612,500 0.5
Leisure & Entertainment 25,000 ++Promus Hotel Corporation 488,899 615,625 0.2
Electronics 100,000 Sensormatic Electronics Corp. 2,706,000 2,750,000 0.8
Insurance 50,000 Torchmark Corp. 1,945,875 1,925,000 0.6
Leisure & Entertainment 100,000 WMS Industries, Inc. 2,696,774 2,225,000 0.6
------------ ------------ ------
18,085,941 15,025,606 4.4
Developing Foreign Economies
Telecommunications 3,000,000 Champion Technology Holdings Ltd. 997,434 283,037 0.1
Building Materials 250,000 Royal Plastic Group Limited 2,049,180 3,168,308 0.9
Electronics 25,000 ++Samsung Electronics Company (GDR)** 3,280,000 3,512,500 1.0
------------ ------------ ------
6,326,614 6,963,845 2.0
Extended Economic Cycles
Chemicals 50,000 Eastman Chemical Co. 2,679,687 3,200,000 0.9
Chemicals 50,000 Rohm & Haas Co. 3,329,500 2,912,500 0.8
------------ ------------ ------
6,009,187 6,112,500 1.7
<PAGE>
Future Retailing
Specialty Retail 65,000 Authentic Fitness Corp. 1,011,563 1,275,625 0.4
Specialty Retail 19,500 Cannondale Corp. 253,500 338,813 0.1
Specialty Retail 59,000 Daisytek International Corp. 1,127,250 1,401,250 0.4
Specialty Retail 192,600 ++OfficeMax, Inc. 2,872,100 4,333,500 1.3
Specialty Retail 200,000 Wal-Mart Stores, Inc. 5,258,570 5,325,000 1.5
------------ ------------ ------
10,522,983 12,674,188 3.7
Global Market Expansion
Power Systems 50,000 ASEA AB 3,667,955 4,446,809 1.3
Semiconductors 83,500 ASM Lithography N.V. (ADR)* 2,302,250 4,634,250 1.3
Food & Beverage 50,000 Anheuser-Busch Companies, Inc. 2,813,050 2,781,250 0.8
Household Products 74,600 Colgate-Palmolive Co. 1,548,920 5,222,000 1.5
Food & Beverage 50,000 ConAgra, Inc. 1,873,115 1,887,500 0.5
Household Products 50,000 Kimberly-Clark Corp. 2,419,312 3,168,750 0.9
Food & Beverage 80,000 PepsiCo, Inc. 2,644,800 3,750,000 1.1
Electronics 150,000 Philips Electronics N.V. (ADR)* 5,812,300 7,387,500 2.1
------------ ------------ ------
23,081,702 33,278,059 9.5
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued)
<CAPTION>
Shares Value Percent of
Concept Tomorrow Held Stocks Cost (Note 1a) Net Assets
<S> <C> <S> <C> <C> <C>
Healthcare Cost Containment
Health Services 200,000 ++Apria Healthcare Group, Inc. (a) $ 5,071,250 $ 6,400,000 1.9%
Biotechnology 40,136 Chiron Corp. 2,272,701 3,150,676 0.9
Pharmaceuticals 200,900 Merck & Co., Inc. 8,195,265 10,371,462 3.0
Generic Drugs 100,000 Mylan Laboratories, Inc. 2,757,780 3,012,500 0.9
Pharmaceuticals 274,400 Schering-Plough Corp. 3,180,566 12,759,600 3.7
Medical Devices 100,000 United States Surgical Corp. 6,799,013 2,400,000 0.7
------------ ------------ ------
28,276,575 38,094,238 11.1
Industrial Outsourcing
Automotive Components 99,400 Magna International, Inc. 2,137,100 4,572,400 1.3
Specialty Services 100,000 Olsten Corp. 3,190,200 3,500,000 1.0
------------ ------------ ------
5,327,300 8,072,400 2.3
<PAGE>
Industrial Renaissance
Automotive 185,600 Chrysler Corp. 6,620,108 9,048,000 2.6
Automotive 100,000 Ford Motor Co. 2,295,190 2,887,500 0.8
Automotive 100,000 General Motors Corp. 4,190,900 4,875,000 1.4
Information Systems 100,000 International Business Machines Corp. 5,658,500 10,887,500 3.2
------------ ------------ ------
18,764,698 27,698,000 8.0
Multimedia
Wireless Cable Television 55,000 American Telecasting, Inc. 990,000 673,750 0.2
Wireless Cable Television 102,000 CAI Wireless Systems, Inc. 1,172,000 1,275,000 0.4
Broadcasting 25,000 Carlton Communications PLC (ADR)* 812,500 834,375 0.2
Cable/Telephone 75,000 Comcast UK Cable Partners, Ltd. 1,125,000 1,087,500 0.3
Leisure & Entertainment 12,300 ++Maxis, Inc. 196,800 415,125 0.1
Broadcasting & Publishing 430,000 The News Corp. Ltd. (ADR)* 6,607,562 10,158,750 2.9
Broadcasting & Publishing 225,000 The News Corp. Ltd. (Conv. Pfd.) (ADR)* 2,122,560 4,725,000 1.4
Wireless Cable Television 50,000 Preferred Entertainment, Inc. 938,500 800,000 0.2
Leisure & Entertainment 54,400 The Walt Disney Co. 1,424,668 3,189,200 0.9
Computer Software 4,500 ++UUNET Technologies, Inc. 63,000 190,125 0.1
------------ ------------ ------
15,452,590 23,348,825 6.7
Next Generation Technology
Leisure & Entertainment 100,000 3DO Co. 1,296,204 1,412,500 0.4
Semiconductors 100,000 Gasonics International Corp. 1,976,289 3,400,000 1.0
Telecommunications 50,000 Geotek Communications, Inc. 450,000 437,500 0.1
Building Materials 50,000 ICC Technologies, Inc. 655,250 837,500 0.2
Energy 128,000 Kenetech Corp. 1,694,357 1,472,000 0.4
Medical Devices 75,000 ++Keravision, Inc. 1,012,500 937,500 0.3
Pollution Technology 280,000 Molten Metal Technology, Inc. 4,772,770 6,790,000 2.0
Semiconductors 3,000 ++Ontrak Systems, Inc. 51,000 87,750 0.1
Pollution Technology 270,000 ++Thermo Electron Corp. 6,840,000 11,542,500 3.3
Medical Equipment 166,000 Thermotrex Corp. 2,599,763 5,851,500 1.7
Electronics 150,000 Whittaker Corp. 2,966,998 3,450,000 1.0
------------ ------------ ------
24,315,131 36,218,750 10.5
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded)
Shares Value Percent of
Concept Tomorrow Held Stocks Cost (Note 1a) Net Assets
<S> <C> <S> <C> <C> <C>
Progressive Education
Education Services 75,000 Education Alternatives, Inc. $ 1,919,959 $ 1,106,250 0.3%
Education Products 100,000 Westcott Communications, Inc. 1,353,037 1,300,000 0.4
------------ ------------ ------
3,272,996 2,406,250 0.7
Strategic Growth Opportunities
Pharmaceuticals 50,000 American Home Products Corp. 3,875,049 3,950,000 1.1
Apparel 225,000 Chic by H.I.S., Inc. 2,846,059 2,559,375 0.7
Leisure & Entertainment 100,000 Mattel, Inc. 2,232,740 2,825,000 0.8
Specialty Retail 100,000 Tiffany & Co. 3,039,463 3,837,500 1.1
Restaurant 100,000 Wendy's International, Inc. 1,642,712 1,862,500 0.5
------------ ------------ ------
13,636,023 15,034,375 4.2
Telecommunications
Telecommunications 140,700 ALC Communications Corp. 2,157,975 7,439,512 2.2
Components 150,000 ANTEC Corp. 3,557,150 2,775,000 0.8
Cellular Communications 100,000 AirTouch Communications, Inc. 2,300,000 3,150,000 0.9
Components 50,000 ++Andrew Corp. 2,546,125 2,968,750 0.9
Components 50,000 Boston Technology, Inc. 702,000 962,500 0.3
Components 235,000 Inter-Tel, Inc. 2,456,987 4,141,875 1.2
Telecommunications 150,000 MCI Communications Corp. 3,895,310 3,581,250 1.0
Telecommunications 100,000 MFS Communications Co., Inc. 2,536,850 3,700,000 1.1
Paging Services 325,000 Metrocall, Inc. 5,264,679 6,987,500 2.0
Components 100,000 Motorola, Inc. 5,778,000 7,662,500 2.2
Components 350,000 Nokia Corp. AB (ADR)* 12,125,312 23,012,500 6.7
Cellular Communications 200,000 Palmer Wireless, Inc. 2,984,487 4,050,000 1.2
Paging Services 154,945 USA Mobile Communications Holdings, Inc. 1,386,950 3,176,372 0.9
------------ ------------ ------
47,691,825 73,607,759 21.4
Total Stocks 231,127,733 311,145,678 89.9
Face Value Percent of
Amount Short-Term Securities Cost (Note la) Net Assets
<PAGE>
Commercial $ 7,000,000 Ciesco L.P., 5.70% due 8/25/1995 6,973,400 6,973,400 2.0
Paper*** 9,000,000 Daimler-Benz AG, 5.70% due 8/11/1995 8,985,750 8,985,750 2.6
3,826,000 General Electric Capital Corp., 5.80%
due 8/01/1995 3,826,000 3,826,000 1.1
4,000,000 KFW International Finance, 5.73% due
8/25/1995 3,984,720 3,984,720 1.1
10,973,000 Matterhorn Capital Corp., 5.72% due
8/15/1995 10,948,591 10,948,591 3.2
US Government & 10,000,000 Federal Farm Credit Bank, 5.61% due
Agency Obligations*** 8/09/1995 9,987,534 9,987,534 2.9
Total Short-Term Securities 44,705,995 44,705,995 12.9
Total Investments $275,833,728 355,851,673 102.8
============
Liabilities in Excess of Other Assets (9,837,322) (2.8)
------------ ------
Net Assets $346,014,351 100.0%
============ ======
<FN>
(a)Formerly known as Homedco Group, Inc.
(b)Formerly known as The Promus Companies, Inc.
++Non-income producing security.
*American Depositary Receipts (ADR).
**Global Depositary Receipts (GDR).
***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.
See Notes to Financial Statements.
</TABLE>
<PAGE>
FINANCIAL INFORMATION
<TABLE>
Statement of Assets and Liabilities as of July 31, 1995
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$275,833,728) (Note 1a) $355,851,673
Receivables:
Securities sold $ 8,474,875
Capital shares sold 265,167
Dividends 155,317 8,895,359
------------
Prepaid registration fees and other assets (Note 1f) 31,345
------------
Total assets 364,778,377
------------
Liabilities: Payables:
Securities purchased 5,734,630
Capital shares redeemed 962,498
Investment adviser (Note 2) 180,655
Distributor (Note 2) 126,722 7,004,505
------------
Accrued expenses and other liabilities 11,759,521
------------
Total liabilities 18,764,026
------------
Net Assets: Net assets $346,014,351
============
Net Assets Class A Shares of Common Stock, $0.10 par value, 100,000,000
Consist of: shares authorized $ 110,756
Class B Shares of Common Stock, $0.10 par value, 100,000,000
shares authorized 613,378
Class C Shares of Common Stock, $0.10 par value, 100,000,000
shares authorized 12,447
Class D Shares of Common Stock, $0.10 par value, 100,000,000
shares authorized 1,337,463
Paid-in capital in excess of par 254,682,568
Accumulated investment loss--net (476,751)
Undistributed realized capital gains on investments and foreign
currency transactions--net 9,709,424
Unrealized appreciation on investments and foreign
currency transactions--net 80,025,066
------------
Net assets $346,014,351
============
<PAGE>
Net Asset Value: Class A--Based on net assets of $18,624,738 and 1,107,563
shares outstanding $ 16.82
============
Class B--Based on net assets of $100,902,025 and 6,133,785
shares outstanding $ 16.45
============
Class C--Based on net assets of $2,038,505 and 124,466 shares
outstanding $ 16.38
============
Class D--Based on net assets of $224,449,083 and 13,374,625
shares outstanding $ 16.78
============
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (continued)
<TABLE>
Statement of Operations for the Six Months Ended July 31, 1995
<S> <S> <C> <C>
Investment Dividends (net of $62,501 foreign withholding tax) $ 1,489,337
Income Interest and discount earned 844,626
(Notes 1d & 1e): Other income 39,447
------------
Total income 2,373,410
------------
Expenses: Investment advisory fees (Note 2) $ 948,146
Account maintenance and distribution fees--Class B (Note 2) 486,044
Transfer agent fees--Class D (Note 2) 253,678
Account maintenance fees--Class D (Note 2) 230,901
Transfer agent fees--Class B (Note 2) 162,181
Printing and shareholder reports 104,779
Professional fees 40,680
Accounting services (Note 2) 30,221
Registration fees (Note 1f) 25,216
Custodian fees 24,061
Transfer agent fees--Class A (Note 2) 12,905
Directors' fees and expenses 9,689
Account maintenance and distribution fees--Class C (Note 2) 1,639
Transfer agent fees--Class C (Note 2) 480
Other 7,186
------------
Total expenses 2,337,806
------------
Investment income--net 35,604
------------
<PAGE>
Realized & Realized gain from:
Unrealized Gain Investments--net 9,229,991
(Loss) on Foreign currency transactions--net 2,092 9,232,083
Investments & ------------
Foreign Currency Change in unrealized appreciation/depreciation on:
Transactions--Net Investments--net 64,790,100
(Notes 1b, 1c, Foreign currency transactions--net 7,244 64,797,344
1e & 3): ------------ ------------
Net realized and unrealized gain on investments and
foreign currency transactions 74,029,427
------------
Net Increase in Net Assets Resulting from Operations $ 74,065,031
============
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (continued)
<TABLE>
Statements of Changes in Net Assets
<CAPTION>
For the Six For the Year
Months Ended Ended
July 31, January 31,
Increase (Decrease) in Net Assets: 1995 1995
<S> <S> <C> <C>
Operations: Investment income (loss)--net $ 35,604 $ (1,130,434)
Realized gain on investments and foreign currency
transactions--net 9,232,083 16,333,259
Change in unrealized appreciation/depreciation on
investments and foreign currency transactions--net 64,797,344 (62,912,398)
------------ ------------
Net increase (decrease) in net assets resulting from
operations 74,065,031 (47,709,573)
------------ ------------
Distributions to Realized gain on investments--net:
Shareholders Class A (309,958) (629,067)
(Note 1g): Class B (2,962,032) (18,732,811)
Class C (7,681) (311)
Class D (7,283,164) (2,376,409)
------------ ------------
Net decrease in net assets resulting from distributions
to shareholders (10,562,835) (21,738,598)
------------ ------------
<PAGE>
Capital Share Net decrease in net assets derived from capital share
Transactions transactions (2,366,179) (53,039,480)
(Note 4): ------------ ------------
Net Assets: Total increase (decrease) in net assets 61,136,017 (122,487,651)
Beginning of period 284,878,334 407,365,985
------------ ------------
End of period $346,014,351 $284,878,334
============ ============
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (continued)
<TABLE>
Financial Highlights
<CAPTION>
Class A
For the
The following per share data and ratios have been derived Six Months
from information provided in the financial statements. Ended
July 31, For the Year Ended January 31,
Increase (Decrease) in Net Asset Value: 1995++ 1995++ 1994 1993 1992
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 13.55 $ 16.39 $ 16.29 $ 16.84 $ 15.49
Operating -------- -------- -------- -------- --------
Performance: Investment income--net .03 .09 .15 .25 .36
Realized and unrealized gain (loss) on
investments and foreign currency
transactions--net 3.81 (1.97) 2.18 .49 3.74
-------- -------- -------- -------- --------
Total from investment operations 3.84 (1.88) 2.33 .74 4.10
-------- -------- -------- -------- --------
Less dividends and distributions:
Investment income--net -- -- -- (.23) (.35)
Realized gain on investments--net (.57) (.96) (2.23) (1.06) (2.40)
-------- -------- -------- -------- --------
Total dividends and distributions (.57) (.96) (2.23) (1.29) (2.75)
-------- -------- -------- -------- --------
Net asset value, end of period $ 16.82 $ 13.55 $ 16.39 $ 16.29 $ 16.84
======== ======== ======== ======== ========
<PAGE>
Total Investment Based on net asset value per share 28.52%+++ (11.23%) 15.78% 4.79% 28.35%
Return:** ======== ======== ======== ======== ========
Ratios to Expenses 1.09%* .98% .88% .90% .95%
Average ======== ======== ======== ======== ========
Net Assets: Investment income--net .49%* .59% .95% 1.35% 1.81%
======== ======== ======== ======== ========
Supplemental Net assets, end of period (in thousands) $ 18,625 $ 8,665 $ 10,942 $ 11,394 $ 8,846
Data: ======== ======== ======== ======== ========
Portfolio turnover 29.21% 45.86% 48.63% 40.58% 48.28%
======== ======== ======== ======== ========
<FN>
*Annualized.
**Total investment returns exclude the effects of sales loads.
++Based on average shares outstanding during the period.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (continued)
<PAGE>
<TABLE>
Financial Highlights (continued)
<CAPTION>
Class B
For the
The following per share data and ratios have been derived Six Months
from information provided in the financial statements. Ended
July 31, For the Year Ended January 31,
Increase (Decrease) in Net Asset Value: 1995++ 1995++ 1994++ 1993 1992
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 13.33 $ 16.30 $ 16.28 $ 16.82 $ 15.48
Operating -------- -------- -------- -------- --------
Performance: Investment income (loss)--net (.03) (.06) (.01) .06 .14
Realized and unrealized gain (loss) on
investments and foreign currency
transactions--net 3.72 (1.96) 2.17 .52 3.77
-------- -------- -------- -------- --------
Total from investment operations 3.69 (2.02) 2.16 .58 3.91
-------- -------- -------- -------- --------
Less dividends and distributions:
Investment income--net -- -- -- (.06) (.17)
Realized gain on investments--net (.57) (.95) (2.14) (1.06) (2.40)
-------- -------- -------- -------- --------
Total dividends and distributions (.57) (.95) (2.14) (1.12) (2.57)
-------- -------- -------- -------- --------
Net asset value, end of period $ 16.45 $ 13.33 $ 16.30 $ 16.28 $ 16.82
======== ======== ======== ======== ========
Total Investment Based on net asset value per share 27.86%+++ (12.22%) 14.60% 3.75% 26.96%
Return:** ======== ======== ======== ======== ========
Ratios to Average Expenses, excluding account maintenance
Net Assets: and distribution fees 1.15%* .99% .91% .92% .98%
======== ======== ======== ======== ========
Expenses 2.15%* 1.99% 1.91% 1.92% 1.98%
======== ======== ======== ======== ========
Investment income (loss)--net (.48%)* (.38%) (.07%) .36% .83%
======== ======== ======== ======== ========
Supplemental Net assets, end of period (in thousands) $100,902 $119,186 $396,424 $447,186 $476,106
Data: ======== ======== ======== ======== ========
Portfolio turnover 29.21% 45.86% 48.63% 40.58% 48.28%
======== ======== ======== ======== ========
<PAGE>
<FN>
*Annualized.
**Total investment returns exclude the effects of sales loads.
++Based on average shares outstanding during the period.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (concluded)
<TABLE>
Financial Highlights (concluded)
<CAPTION>
Class C Class D
For the For the
For the Period For the Period
The following per share data and ratios have been derived Six Months Oct. 21, Six Months Oct. 21,
from information provided in the financial statements. Ended 1994++ to Ended 1994++ to
July 31, Jan. 31, July 31, Jan. 31,
Increase (Decrease) in Net Asset Value: 1995++++ 1995++++ 1995++++ 1995++++
<S> <S> <S> <S> <S> <S>
Per Share Net asset value, beginning of period $ 13.28 $ 14.08 $ 13.54 $ 14.26
Operating -------- -------- -------- --------
Performance: Investment income (loss)--net (.06) (.04) .02 (.01)
Realized and unrealized gain (loss) on
investments and foreign currency
transactions--net 3.73 (.54) 3.79 (.49)
-------- -------- -------- --------
Total from investment operations 3.67 (.58) 3.81 (.50)
-------- -------- -------- --------
Less distributions from realized gain on
investments--net (.57) (.22) (.57) (.22)
-------- -------- -------- --------
Net asset value, end of period $ 16.38 $ 13.28 $ 16.78 $ 13.54
======== ======== ======== ========
Total Investment Based on net asset value per share 27.82%+++ (4.12%)+++ 28.32%+++ (3.50%)+++
Return:** ======== ======== ======== ========
<PAGE>
Ratios to Average Expenses, excluding account maintenance
Net Assets: and distribution fees 1.10%* 1.26%* 1.09%* 1.18%*
======== ======== ======== ========
Expenses 2.10%* 2.26%* 1.34%* 1.43%*
======== ======== ======== ========
Investment income (loss)--net (.87%)* (.87%)* .27%* (.23%)*
======== ======== ======== ========
Supplemental Net assets, end of period (in thousands) $ 2,038 $ 80 $224,449 $156,947
Data: ======== ======== ======== ========
Portfolio turnover 29.21% 45.86% 29.21% 45.86%
======== ======== ======== ========
<FN>
*Annualized.
**Total investment returns exclude the effect of sales loads.
++Commencement of Operations.
++++Based on average shares outstanding during the period.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
Merrill Lynch Fund For Tomorrow, Inc. (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 Fund offers four classes of shares under the Merrill Lynch
Select Pricingsm System. Shares of Class A and Class D are sold with
a front-end sales charge. Shares of Class B and Class C may be
subject to a contingent deferred sales charge. All classes of shares
have identical voting, dividend, liquidation and other rights and
the same terms and conditions, except that Class B, Class C and
Class D Shares bear certain expenses related to the account
maintenance of such shares, and Class B and Class C Shares also bear
certain expenses related to the distribution of such shares. Each
class has exclusive voting rights with respect to matters relating
to its account maintenance and distribution expenditures. The
following is a summary of significant accounting policies followed
by the Fund.
<PAGE>
(a) Valuation of investments--Portfolio securities which are traded
on stock exchanges are valued at the last sale price on the exchange
on which such securities are traded, as of the close of business on
the day the securities are being valued or, lacking any sales, at
the last available bid price. Securities traded in the over-the-
counter market are valued at the last available bid price prior to
the time of valuation. In cases where securities are traded on more
than one exchange, the securities are valued on the exchange
designated by or under the authority of the Board of Directors as
the primary market. Securities which are traded both in the over-the-
counter market and on a stock exchange are valued according to the
broadest and most representative market. Options written are valued
at the last sale price in the case of exchange-traded options or, in
the case of options traded in the over-the-counter market, the last
asked price. Short-term securities are valued at amortized cost,
which approximates market value. Other investments are stated at
market value. Securities and assets for which market value
quotations are not available are valued at their fair value as
determined in good faith by or under the direction of the Fund's
Board of Directors.
(b) Derivative financial instruments--The Fund may engage in various
portfolio strategies to seek to increase its return by hedging its
portfolio against adverse movements in the equity, debt and currency
markets. Losses may arise due to changes in the value of the
contract or if the counterparty does not perform under the contract.
* Options--The Fund can write covered call options. When the Fund
writes an option, an amount equal to the premium received by the
Fund is reflected as an asset and an equivalent liability. The
amount of the liability is subsequently marked to market to reflect
the current market value of the option written. When a security is
sold through an exercise of an option, the related premium received
is deducted from the basis of the security sold. When an option
expires (or the Fund enters into a closing transaction), the Fund
realizes a gain or loss on the option to the extent of the premium
received (or gain or loss to the extent of the cost of the closing
transaction is less than or exceeds the premium received).
(c) Foreign currency transactions--Transactions denominated in
foreign currencies are recorded at the exchange rate prevailing when
recognized. Assets and liabilities denominated in foreign currencies
are valued at the exchange rate at the end of the period. Foreign
currency transactions are the result of settling (realized) or
valuing (unrealized) assets or liabilities expressed in foreign
currencies into US dollars. Realized and unrealized gains or losses
from investments include the effects of foreign exchange rates on
investments.
<PAGE>
(d) 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 substantially all of its
taxable income to its shareholders. Therefore, no Federal income tax
provision is required. Under the applicable foreign tax law, a
withholding tax may be imposed on interest, dividends and capital
gains at various rates.
(e) Security transactions and investment income--Security
transactions are recorded on the dates the transactions are entered
into (the trade dates). Dividend income is recorded on the ex-
dividend date except that if the ex-dividend date has passed,
certain dividends from foreign securities are recorded as soon as
the Fund is informed of the ex-dividend date. 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.
(f) Prepaid registration fees--Prepaid registration fees are charged
to expense as the related shares are issued.
(g) Dividends and distributions to shareholders--Dividends and
distributions paid by the Fund are recorded on the ex-dividend
dates.
2. Investment Advisory Agreement and
Transactions with Affiliates:
The Fund has entered into an Investment Advisory Agreement with
Merrill Lynch Asset Management, L.P. ("MLAM"). The general partner
of MLAM is Princeton Services, Inc. ("PSI"), an indirect wholly-
owned subsidiary of Merrill Lynch & Co., Inc. ("ML & Co."), which is
a general partner. The Fund has also entered into a Distribution
Agreement and Distribution Plans with Merrill Lynch Funds
Distributor, Inc. ("MLFD" or "Distributor"), a wholly-owned
subsidiary of Merrill Lynch Group, Inc.
MLAM 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: 0.65%
of the average daily net assets not exceeding $750 million; 0.60% of
the average daily net assets exceeding $750 million but not
exceeding $1 billion, and 0.55% of the average daily net assets
exceeding $1 billion. The Investment Advisory Agreement obligates
MLAM to reimburse the Fund to the extent the Fund's expenses
(excluding interest, taxes, distribution fees, brokerage fees and
commissions, and extraordinary items) exceed 2.5% of the Fund's
first $30 million of average daily net assets, 2.0% of the next $70
million of average daily net assets, and 1.5% of the average daily
net assets in excess thereof. No fee payment will be made to the
Investment Adviser which would result in Fund expenses exceeding, on
a cumulative annualized basis, the most restrictive applicable
expense limitation in effect at the time of such payment.
<PAGE>
Pursuant to the distribution plans ("the Distribution Plans")
adopted by the Fund in accordance with Rule 12b-1 under the
Investment Company Act of 1940, the Fund pays the Distributor
ongoing account maintenance and distribution fees. The fees are
accrued daily and paid monthly at annual rates based upon the
average daily net assets of the shares as follows:
Account
Maintenance Distribution
Fee Fee
Class B 0.25% 0.75%
Class C 0.25% 0.75%
Class D 0.25% --
Pursuant to a sub-agreement with the Distributor, Merrill Lynch,
Pierce, Fenner & Smith Inc. ("MLPF&S"), a subsidiary of ML & Co.,
also provides account maintenance and distribution services to the
Fund.
The ongoing account maintenance fee compensates the Distributor and
MLPF&S for providing account maintenance services to Class B, Class
C and Class D shareholders. The ongoing distribution fee compensates
the Distributor and MLPF&S for providing shareholder and
distribution-related services to Class B and Class C shareholders.
For the six months ended July 31, 1995, MLFD earned underwriting
discounts and MLPF&S earned dealer concessions on sales of the
Fund's Class A and Class D Shares as follows:
MLFD MLPF&S
Class A $ 424 $ 1,206
Class D $ 7,556 $ 16,711
MLPF&S received contingent deferred sales charges of $41,777
relating to capital share transactions for the sale of Class B
Shares, $158 relating to capital share transactions for the sale of
Class C Shares, and $9,000 in commissions on the execution of
portfolio security transactions for the Fund for the six months
ended July 31, 1995.
Merrill Lynch Financial Data Services, Inc. ("MLFDS"), a wholly-
owned subsidiary of ML & Co., is the Fund's transfer agent.
Accounting services are provided to the Fund by MLAM at cost.
<PAGE>
Certain officers and/or directors of the Fund are officers and/or
directors of MLAM, PSI, MLPF&S, MLFDS, MLFD and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the six months ended July 31, 1995 were $78,162,843 and
$95,372,228, respectively.
NOTES TO FINANCIAL STATEMENTS (concluded)
Net realized and unrealized gains (losses) as of July 31, 1995 were
as follows:
Realized Unrealized
Gains (Losses) Gains
Long-term investments $ 9,230,004 $ 80,017,945
Short-term investments (13) --
Foreign currency
transactions 2,092 7,121
------------ -------------
Total $ 9,232,083 $ 80,025,066
============ =============
As of July 31, 1995, net unrealized appreciation for Federal income
tax purposes aggregated $80,017,945, of which $92,875,062 related to
appreciated securities and $12,857,117 related to depreciated
securities. The aggregate cost of investments at July 31, 1995 for
Federal income tax purposes was $275,833,728.
4. Capital Stock Transactions:
Net decrease in net assets derived from capital share transactions
was $2,366,179 and $53,039,480 for the six months ended July 31,
1995 and the year ended January 31, 1995, respectively.
Transactions in capital shares for each class were as follows:
Class A Shares for the Six Dollar
Months Ended July 31, 1995 Shares Amount
Shares sold 73,179 $ 10,180,005
Shares issued to shareholders
in reinvestment of
distributions 575,732 279,194
----------- -------------
Total issued 648,911 10,459,199
Shares redeemed (181,008) (2,674,444)
----------- -------------
Net increase 467,903 $ 7,784,755
=========== =============
<PAGE>
Class A Shares for the Year Dollar
Ended January 31, 1995 Shares Amount
Shares sold 140,801 $ 2,045,990
Shares issued to shareholders
in reinvestment of
distributions 42,701 565,182
----------- -------------
Total issued 183,502 2,611,172
Shares redeemed (211,252) (3,023,836)
----------- -------------
Net decrease (27,750) $ (412,664)
=========== =============
Class B Shares for the Six Dollar
Months Ended July 31, 1995 Shares Amount
Shares sold 1,324,333 $ 20,824,948
Shares issued to shareholders
in reinvestment of
distributions 158,829 2,492,023
----------- -------------
Total issued 1,483,162 23,316,971
Automatic conversion of
shares (2,985,857) (42,956,547)
Shares redeemed (1,303,036) (18,801,560)
----------- -------------
Net decrease (2,805,731) $ (38,441,136)
=========== =============
Class B Shares for the Year Dollar
Ended January 31, 1995 Shares Amount
Shares sold 1,037,837 $ 15,121,525
Shares issued to shareholders
in reinvestment of
distributions 1,252,531 16,408,961
----------- -------------
Total issued 2,290,368 31,530,486
Automatic conversion of
shares (5,496,974) (78,448,291)
Shares redeemed (12,176,864) (169,494,498)
----------- -------------
Net decrease (15,383,470) $(216,412,303)
=========== =============
<PAGE>
Class C Shares for the Six Dollar
Months Ended July 31, 1995 Shares Amount
Shares sold 152,496 $ 2,410,487
Shares issued to shareholders
in reinvestment of
distributions 441 6,885
----------- -------------
Total issued 152,937 2,417,372
Shares redeemed (34,484) (552,210)
----------- -------------
Net increase 118,453 $ 1,865,162
=========== =============
Class C Shares for the Period
October 21, 1994++ Dollar
to January 31, 1995 Shares Amount
Shares sold 6,002 $ 80,820
Shares issued to shareholders
in reinvestment of
distributions 12 157
----------- -------------
Total issued 6,014 80,977
Shares redeemed (1) (14)
----------- -------------
Net increase 6,013 $ 80,963
=========== =============
[FN]
++ Commencement of Operations.
Class D Shares for the Six Dollar
Months Ended July 31, 1995 Shares Amount
Shares sold 124,485 $ 1,948,207
Automatic conversion of
shares 2,935,999 42,956,547
Shares issued to shareholders
in reinvestment of
distributions 399,482 6,391,707
----------- -------------
Total issued 3,459,966 51,296,461
Shares redeemed (1,679,269) (24,871,421)
----------- -------------
Net increase 1,780,697 $ 26,425,040
=========== =============
<PAGE>
Class D Shares for the Period
October 21, 1994++ Dollar
to January 31, 1995 Shares Amount
Shares sold 70,886 $ 970,143
Automatic conversion of
shares 12,012,646 169,494,498
Shares issued to shareholders
in reinvestment of
distributions 157,005 2,075,598
----------- -------------
Total issued 12,240,537 172,540,239
Shares redeemed (646,609) (8,835,715)
----------- -------------
Net increase 11,593,928 $ 163,704,524
=========== =============
[FN]
++Commencement of Operations.
OFFICERS AND DIRECTORS
Arthur Zeikel, President and Director
Ronald W. Forbes, Director
Cynthia A. Montgomery, Director
Charles C. Reilly, Director
Kevin A. Ryan, Director
Richard R. West, Director
Terry K. Glenn, Executive Vice President
Norman R. Harvey, Senior Vice President
Donald C. Burke, Vice President
Vincent P. Dileo, Vice President and
Portfolio Manager
Gerald M. Richard, Treasurer
Susan B. Baker, Secretary
<PAGE>
Custodian
The Bank of New York
90 Washington Street, 12th Floor
New York, New York 10286
Transfer Agent
Merrill Lynch Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, Florida 32246-6484
(800) 637-3863
