MERRILL LYNCH
FUND FOR
TOMORROW, INC.
FUND LOGO
Quarterly Report
April 30, 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. Investment return and
principal value of shares will fluctuate so that shares, when
redeemed, may be worth more or less than their original cost.
Statements and other information herein are as dated and are subject
to change.
<PAGE>
Merrill Lynch
Fund For Tomorrow, Inc.
Box 9011
Princeton, NJ
08543-9011
Printed on post-consumer recycled paper
MERRILL LYNCH FUND FOR TOMORROW, INC.
Concept Sectors
A pie chart depicting Concept Sectors as a Percentage of Net Assets
As of April 30, 1997:
Computer Technologies 8.4%
Demographic Trends 8.1%
Developing Foreign Economies 4.0%
Future Retailing 1.6%
Global Market Expansion 11.7%
Healthcare Cost Containment 19.0%
Industrial Outsourcing 4.4%
Industrial Renaissance 9.7%
Multimedia 6.9%
Next Generation Technology 5.2%
Strategic Growth Opportunities 6.9%
Telecommunications 10.1%
Cash* 4.0%
[FN]
*Net of liabilities in excess of other assets.
<PAGE>
Growth Stock Characteristics as of April 30, 1997
Bar graph depicting Growth Stock Characteristics as of April 30, 1997
% of Equity Holdings:
Emerging Growth 6.6% 8.0%
Established Growth 20.3% 17.8%
Stable Growth 23.9% 23.4%
DEAR SHAREHOLDER
Stock and bond market turbulence increased during the three-month
period ended April 30, 1997. Mounting evidence of stronger-than-
expected economic growth suggested to investors that the Federal
Reserve Board (FRB) would make a preemptive strike to contain
inflationary pressures. These concerns were heightened by statements
made by FRB Chairman Alan Greenspan, and culminated in an increase
in the Federal Funds rate of 0.25% to 5.50% on March 25, 1997. As
investors became concerned that this might prove to be only the
first in a series of monetary policy tightening moves, interest
rates rose and stock and bond prices declined. Following the central
bank's action, investor sentiment fluctuated from negative to more
positive, depending upon whether the latest economic data releases
were perceived to suggest an overheating or moderating trend. Stock
prices were given a boost following a series of strong corporate
earnings reports and the likelihood that a capital gains tax cut
would be part of the Federal balanced budget agreement. Nonetheless,
clear-cut signs of continued low inflation and moderate economic
growth, as well as no further indications of monetary policy
tightening, are probably needed to bring stability to the financial
markets.
On the international front, although the FRB's action triggered some
weakness in the US dollar, the US dollar subsequently continued its
strong advance relative to the yen and the Deutschemark, raising
concerns about the outlook for US trade. In early February, the
leading industrialized nations expressed apparent agreement that it
was time to seek a lower dollar and less volatility in the foreign
exchange markets. It remains to be seen whether these stated
intentions will be acted upon, or if the US dollar continues to rise
relative to other major currencies.
Portfolio Matters
On balance, a more cautious investment environment prevailed
throughout the quarter ended April 30, 1997. This environment tended
to favor the more stable growth sectors, while many smaller, more
aggressive growth companies' stocks came under substantial and
sustained price pressure. This polarization of performance was
clearly reflected in the extremely wide disparity between the
performance of the unmanaged Standard & Poor's 500 Index (S&P 500)
and the unmanaged NASDAQ Industrial Index, which showed a total
return of +2.38% and a decline of 13.99%, respectively, for the
three months ended April 30, 1997.
<PAGE>
For the quarter ended April 30, 1997, Merrill Lynch Fund For
Tomorrow, Inc.'s Class A, Class B, Class C and Class D Shares had
total returns of -2.97%, -3.25%, -3.28% and -3.04%, respectively. To
a large extent, the volatility in the stock market was reflected in
the investment performance of the Fund. The larger-capitalization
stocks shared the relative stability of the S&P 500, while the
Fund's smaller-capitalized, more aggressive growth holdings showed
price weakness similar to the NASDAQ Industrial Index.
This weakness was especially evident in the Fund's computer
technologies sector, with declines in Silicon Graphics, Inc., Sun
Microsystems, Inc. and Seagate Technology, Inc. Other technology-
related holdings were also under significant pressure. Weakness was
most pronounced within our next generation technology concept where
longer-term growth is an integral part of our investment strategy.
On the positive side, most of the larger-capitalization, stable-
growth sectors performed well. Much of the healthcare sector was
included in this group, as were food, household products and tele-
communication providers. In addition, foreign holdings tended to
exhibit better relative price performance during the April quarter.
For example, Philips Electronics N.V. gained nearly 34%, aided by
significant progress in its internal restructuring which is expected
to greatly improve its earnings potential.
Early in the quarter ended April 30, 1997, we adopted a somewhat
cautious investment strategy and pursued our investment activities
on the basis of reducing fundamental risk and concentrating on
valuations. Following these criteria resulted in a thorough
reappraisal of existing holdings with the elimination of four
investments and the reduction of several existing holdings. While
most of these adjustments were based on taking profits as stocks met
or exceeded our price objectives, others were based on fundamentals
that had not met our expectations. In addition, we were able to find
numerous buying opportunities as a result of price weakness in the
smaller-capitalization sector. We used these opportunities to add to
existing holdings that were under pressure, although we believe
still offered excellent growth prospects. We also added two new
stocks to the portfolio which we believe presented an attractive
combination of high expected earnings growth and reasonable
valuations. ADC Telecommunications, Inc. is a telecommunication
equipment company that is currently showing earnings growth in
excess of its historical rate of 33% per year. FORE Systems, Inc. is
a producer of both hardware and software for advanced computer
systems. This company has experienced what we believe is a temporary
slowdown in its strong growth pattern, which provided us with a
buying opportunity.
During the last few days of the April quarter and into early May,
the stock market appeared to display renewed strength. We believe
this partial restoration of investor confidence may have been the
result of favorable economic data for the first quarter of 1997,
which included strong growth and well-contained inflation. Our
investment strategy going forward is to retain a slightly cautious
bias in our investment activities while assuring that the Fund is
well-positioned for a potentially extended cycle of moderate
economic growth. We intend to pursue this strategy with an emphasis
on companies which we believe have favorable long-term earnings
prospects selling at reasonable valuations and that we believe are
investment concepts of the future.
<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
May 23, 1997
PERFORMANCE DATA
About Fund Performance
Investors are 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 approximately 8 years. (There is no initial
sales charge for automatic share conversions.)
<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).
None of the past results shown should be considered a representation
of future performance. Figures shown in the "Average Annual Total
Return" tables as well as the total returns and cumulative total
returns in the "Performance Summary" tables assume reinvestment of
all dividends and capital gains distributions at net asset value on
the ex-dividend date. Investment return and principal value of
shares will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost. Dividends paid to each class
of shares will vary because of the different levels of account
maintenance, distribution and transfer agency fees applicable to
each class, which are deducted from the income available to be paid
to shareholders.
<TABLE>
Recent Performance Results
<CAPTION>
12 Month 3 Month
4/30/97 1/31/97 4/30/96 % Change % Change
<S> <C> <C> <C> <C> <C>
ML Fund For Tomorrow, Inc. Class A Shares* $16.65 $17.16 $17.60 + 2.73%(1) - 2.97%
ML Fund For Tomorrow, Inc. Class B Shares* 16.05 16.59 17.05 + 2.49(1) - 3.25
ML Fund For Tomorrow, Inc. Class C Shares* 15.93 16.47 16.97 + 2.26(1) - 3.28
ML Fund For Tomorrow, Inc. Class D Shares* 16.57 17.09 17.52 + 2.74(1) - 3.04
Standard & Poor's 500 Index** 801.34 786.16 654.17 +22.50 + 1.93
NASDAQ Industrial Index** 996.92 1,159.01 1,118.84 -10.90 -13.99
ML Fund For Tomorrow, Inc. Class A Shares--Total Return* + 7.56(2) - 2.97
ML Fund For Tomorrow, Inc. Class B Shares--Total Return* + 6.44(3) - 3.25
ML Fund For Tomorrow, Inc. Class C Shares--Total Return* + 6.38(4) - 3.28
ML Fund For Tomorrow, Inc. Class D Shares--Total Return* + 7.34(5) - 3.04
Standard & Poor's 500 Index--Total Return** +25.09 + 2.38
<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.
(1)Percent change includes reinvestment of $1.397 per share capital
gains distributions.
(2)Percent change includes reinvestment of $0.825 per share ordinary
income dividends and $1.397 per share capital gains distributions.
(3)Percent change includes reinvestment of $0.656 per share ordinary
income dividends and $1.397 per share capital gains distributions.
(4)Percent change includes reinvestment of $0.679 per share ordinary
income dividends and $1.397 per share capital gains distributions.
(5)Percent change includes reinvestment of $0.783 per share ordinary
income dividends and $1.397 per share capital gains distributions.
</TABLE>
<PAGE>
PERFORMANCE DATA (continued)
<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>
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
1995 13.66 15.84 1.354 0.195 +27.39
1996 15.84 15.88 1.397 0.825 +13.98
1/1/97--4/30/97 15.88 16.65 -- -- + 4.85
------- ------
Total $11.131 Total $3.695
Cumulative total return as of 4/30/97: +160.69%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures 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**
<S> <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
1995 13.45 15.40 1.354 0.195 +26.08
1996 15.40 15.37 1.397 0.656 +12.85
1/1/97--4/30/97 15.37 16.05 -- -- + 4.42
------- ------
Total $12.986 Total $3.309
Cumulative total return as of 4/30/97: +354.83%**
<PAGE>
<FN>
*Figures may include short-term capital gains distributions.
**Figures do not reflect deduction of any sales charge; results
would be lower if sales charge was deducted.
</TABLE>
PERFORMANCE DATA (concluded)
<TABLE>
Performance Summary--Class C Shares
<CAPTION>
Net Asset Value Capital Gains Dividends
Period Covered Beginning Ending Distributed Paid* % Change**
<S> <C> <C> <C> <C> <C>
10/21/94--12/31/94 $14.08 $13.39 $0.157 $0.059 - 3.32%
1995 13.39 15.33 1.354 0.195 +26.12
1996 15.33 15.25 1.397 0.679 +12.73
1/1/97--4/30/97 15.25 15.93 -- -- + 4.46
------ ------
Total $2.908 Total $0.933
Cumulative total return as of 4/30/97: +43.59%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures do not reflect deduction of any sales charge; results
would be lower if sales charge was deducted.
</TABLE>
<TABLE>
Performance Summary--Class D Shares
<CAPTION>
Net Asset Value Capital Gains Dividends
Period Covered Beginning Ending Distributed Paid* % Change**
<S> <C> <C> <C> <C> <C>
10/21/94--12/31/94 $14.26 $13.65 $0.157 $0.059 - 2.71%
1995 13.65 15.79 1.354 0.195 +27.11
1996 15.79 15.82 1.397 0.783 +13.71
1/1/97--4/30/97 15.82 16.57 -- -- + 4.74
------ ------
Total $2.908 Total $1.037
Cumulative total return as of 4/30/97: +47.29%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures do not include sales charge; results would be lower if
sales charge was included.
</TABLE>
<PAGE>
Average Annual Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 3/31/97 + 8.02% + 2.35%
Five Years Ended 3/31/97 + 9.76 + 8.58
Inception (10/26/88)
through 3/31/97 +11.50 +10.79
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 3/31/97 +6.90% +3.13%
Five Years Ended 3/31/97 +8.62 +8.62
Ten Years Ended 3/31/97 +8.71 +8.71
[FN]
*Maximum contingent deferred sales charge is 4% and is reduced to 0%
after 4 years.
**Assuming payment of applicable contingent deferred sales charge.
% Return % Return
Without CDSC With CDSC**
Class C Shares*
Year Ended 3/31/97 + 6.90% + 5.96%
Inception (10/21/94)
through 3/31/97 +14.13 +14.13
[FN]
*Maximum contingent deferred sales charge is 1% and is reduced to 0%
after 1 year.
**Assuming payment of applicable contingent deferred sales charge.
<PAGE>
% Return Without % Return With
Sales Charge Sales Charge**
Class D Shares*
Year Ended 3/31/97 + 7.81% + 2.15%
Inception (10/21/94)
through 3/31/97 +15.28 +12.76
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
<TABLE>
SCHEDULE OF INVESTMENTS
<CAPTION>
Shares Percent of
Concept Tomorrow Held Stocks Cost Value Net Assets
Computer Technologies
<S> <C> <S> <C> <C> <C>
Personal Computers 150,000 COMPAQ Computer Corp. $ 5,445,438 $ 12,806,250 3.7%
Components 100,000 FORE Systems, Inc. 1,505,003 1,525,000 0.4
Components 100,000 Seagate Technology, Inc. 2,750,475 4,587,500 1.3
Systems 300,000 Silicon Graphics, Inc. 11,151,240 4,462,500 1.3
Systems 200,000 Sun Microsystems, Inc. 5,396,880 5,750,000 1.7
------------ ------------ ------
26,249,036 29,131,250 8.4
Demographic Trends
Medical Devices 100,000 Biomet, Inc. 1,534,375 1,512,500 0.4
Healthcare 200,000 HEALTHSOUTH Corp. 3,537,000 3,950,000 1.2
Healthcare 100,000 Living Centers of America, Inc. 3,353,090 3,575,000 1.0
Pollution Technology 550,000 Philip Environmental Inc. (ADR)* 5,122,752 8,662,500 2.5
Insurance 150,000 Torchmark Corp. 6,152,112 9,318,750 2.7
Healthcare 50,000 United Dental Care, Inc. 1,448,438 1,100,000 0.3
------------ ------------ ------
21,147,767 28,118,750 8.1
Developing Foreign Economies
Telecommunications 105,000 Compania Anonima Nacional Telefonos de
Venezuela (ADR)* 2,415,000 3,150,000 0.9
Specialty Services 1,000,000 National Mutual Asia Ltd. 940,132 1,032,791 0.3
Telecommunications 150,000 Portugal Telecom, S.A. (ADR)* 3,514,576 5,550,000 1.6
Building Materials 100,000 Royal Group Technologies Ltd. (a) 1,047,206 2,250,930 0.6
Telecommunications 927 SK Telecom Co. (b) 533,107 360,773 0.2
Electronics 33,034 Samsung Electronics Company (GDR)** 3,280,000 1,552,598 0.4
------------ ------------ ------
11,730,021 13,897,092 4.0
<PAGE>
Future Retailing
Specialty Retail 200,000 Oakley, Inc. 4,725,175 2,050,000 0.6
Specialty Retail 288,900 OfficeMax, Inc. 2,872,100 3,575,138 1.0
------------ ------------ ------
7,597,275 5,625,138 1.6
Global Market Expansion
Cosmetics 174,400 Avon Products, Inc. 6,259,222 10,747,400 3.1
Food & Beverage 100,000 ConAgra Inc. 3,826,115 5,762,500 1.7
Machinery 10,000 Kubota Corp. (ADR)* 1,285,600 900,000 0.2
Machinery 50,000 Makita Corp. (ADR)* 796,875 681,250 0.2
Food & Beverage 160,000 PepsiCo, Inc. 2,644,800 5,580,000 1.6
Electronics 200,000 Philips Electronics N.V. (ADR)* 8,214,486 10,700,000 3.1
Household Products 50,000 The Procter & Gamble Company 4,593,926 6,287,500 1.8
------------ ------------ ------
27,621,024 40,658,650 11.7
Healthcare Cost Containment
Pharmaceuticals 50,000 Astra AB (ADR)* 1,781,250 2,050,000 0.6
Pharmaceuticals 200,000 Bristol-Myers Squibb Co. 7,907,000 13,100,000 3.8
Pharmaceuticals 100,000 Lilly (Eli) and Company 4,572,100 8,787,500 2.5
Pharmaceuticals 100,900 Merck & Co., Inc. 4,001,062 9,131,450 2.6
Pharmaceuticals 50,000 Novartis AG (ADR)* 1,942,188 3,293,750 1.0
Information Services 300,000 Phamis, Inc. 5,264,378 5,325,000 1.5
Information Services 300,000 Physician Computer Network, Inc. 3,074,250 1,575,000 0.5
Pharmaceuticals 174,400 Schering-Plough Corp. 2,010,316 13,952,000 4.0
Pharmaceuticals 200,000 Sequus Pharmaceuticals, Inc. 2,866,248 1,175,000 0.3
Medical Devices 100,000 United States Surgical Corp. 6,799,013 3,425,000 1.0
Medical Services 100,000 Vencor, Inc. 3,194,630 4,162,500 1.2
------------ ------------ ------
43,412,435 65,977,200 19.0
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued)
<CAPTION>
Shares Percent of
Concept Tomorrow Held Stocks Cost Value Net Assets
Industrial Outsourcing
<S> <C> <S> <C> <C> <C>
Information Services 50,000 Ceridian Corp. $ 1,959,250 $ 1,668,750 0.5%
Systems 50,000 Computer Sciences Corporation 3,878,500 3,125,000 0.9
Specialty Services 100,000 Greenwich Air Services Inc. (Class A) 1,113,428 2,750,000 0.8
Specialty Services 100,000 Greenwich Air Services Inc. (Class B) 1,165,198 2,750,000 0.8
Specialty Services 47,028 National Data Corporation 2,127,181 1,763,550 0.5
Specialty Services 150,000 Olsten Corp. 3,190,200 2,643,750 0.8
Aerospace & Defense 19,700 Triumph Group, Inc. 534,070 499,887 0.1
------------ ------------ ------
13,967,827 15,200,937 4.4
<PAGE>
Industrial Renaissance
Aerospace & Defense 50,000 The Boeing Company 5,287,375 4,931,250 1.4
Transportation 75,000 Delta Air Lines, Inc. 5,782,613 6,909,375 2.0
Automotive 100,000 General Motors Corp. 4,190,900 5,787,500 1.7
Information Systems 100,000 International Business Machines Corp. 5,658,500 16,075,000 4.6
------------ ------------ ------
20,919,388 33,703,125 9.7
Multimedia
Broadcasting Services 200,000 Carlton Communications PLC (ADR)* 7,266,875 8,325,000 2.4
Components 75,000 Harman International Industries Inc. 3,663,538 2,868,750 0.8
Information Services 400,000 OzEmail, Ltd. (ADR)* 4,632,341 2,550,000 0.8
Cable Television 150,000 Tele-Communications Liberty Media Group
(Class A) 2,675,003 2,812,500 0.8
Publishing Services 300,000 World Color Press Inc. 5,906,000 7,200,000 2.1
------------ ------------ ------
24,143,757 23,756,250 6.9
Next Generation Technology
Electronics 100,000 Affinity Technology Group, Inc. 950,000 450,000 0.1
Semiconductors 117,600 Gasonics International Corp. 1,501,701 999,600 0.3
Pollution Technology 400,000 Molten Metal Technology, Inc. 6,605,221 2,250,000 0.7
Medical Devices 70,000 Neuromedical Systems Inc. 1,050,000 437,500 0.1
Environmental Equipment 119,400 Thermo Ecotek Corp. 1,281,614 1,671,600 0.5
Multi-Industry 230,000 Thermo Electron Corp. 4,937,738 7,935,000 2.3
Medical Devices 39,600 ThermoLase Corp. 999,900 376,200 0.1
Medical Devices 97,200 ThermoSpectra Corp. 1,508,100 1,166,400 0.3
Medical Devices 100,000 Thermotrex Corp. 1,586,723 1,862,500 0.6
Components 150,000 Voice Control Systems Inc. 834,037 712,500 0.2
------------ ------------ ------
21,255,034 17,861,300 5.2
Stategic Growth Opportunities
Pharmaceuticals 100,000 American Home Products Corp. 3,875,049 6,625,000 1.9
Leisure & Entertainment 300,000 Galoob (Lewis) Toys, Inc. 4,238,645 5,062,500 1.5
Specialty Services 100,000 Household International, Inc. 6,712,565 8,800,000 2.5
Leisure & Entertainment 125,000 Mattel, Inc. 2,232,740 3,484,375 1.0
------------ ------------ ------
17,058,999 23,971,875 6.9
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded)
<CAPTION>
Shares Percent of
Concept Tomorrow Held Stocks Cost Value Net Assets
Telecommunications
<S> <C> <S> <C> <C> <C>
Components 100,000 ADC Telecommunications, Inc. $ 2,867,500 $ 2,600,000 0.7%
Components 120,000 Andrew Corp. 2,299,683 2,970,000 0.9
Telecommunications 30,000 Deutsche Telekom AG (ADR)* 566,700 645,000 0.2
Telecommunications 250,000 Inter-Tel Inc. 3,075,112 3,125,000 0.9
Wireless Communication 155,000 InterCel, Inc. 2,632,500 1,511,250 0.4
Paging Services 305,000 Metrocall, Inc. 4,988,845 1,220,000 0.4
Components 249,400 Nokia Corp. AB (ADR)* 9,249,994 16,117,475 4.6
Wireless Communication 200,000 Palmer Wireless, Inc. 2,984,487 2,325,000 0.7
Telecommunications 100,000 Vodafone Group PLC (ADR)* 3,643,500 4,425,000 1.3
------------ ------------ ------
32,308,321 34,938,725 10.1
Total Stocks 267,410,884 332,840,292 96.0
Face
Amount Short-Term Securities
Commercial Paper*** $ 6,712,000 General Motors Acceptance Corp., 5.68%
due 5/01/1997 6,712,000 6,712,000 2.0
8,000,000 NYNEX Corporation, 5.54% due 5/22/1997 7,974,147 7,974,147 2.3
Total Short-Term Securities 14,686,147 14,686,147 4.3
Total Investments $282,097,031 347,526,439 100.3
============
Liabilities in Excess of Other Assets (952,741) (0.3)
------------ ------
Net Assets $346,573,698 100.0%
============ ======
Net Asset Value: Class A--Based on net assets of $31,661,170 and 1,901,597
shares outstanding $ 16.65
============
Class B--Based on net assets of $86,790,541 and 5,406,701
shares outstanding $ 16.05
============
Class C--Based on net assets of $6,270,406 and 393,533
shares outstanding $ 15.93
============
Class D--Based on net assets of $221,851,581 and 13,390,026
shares outstanding $ 16.57
============
<PAGE>
<FN>
*American Depositary Receipts (ADR).
**Global Depositary Receipts (GDR).
***Commercial Paper is traded on a discount basis; the interest
rates shown are the discount rates paid at the time of purchase by
the Fund.
(a)Formerly Royal Plastic Group Ltd.
(b)Formerly Korea Mobile Telecommunications Corp.
</TABLE>
PORTFOLIO INFORMATION
For the Quarter Ended April 30, 1997
Percent of
Ten Largest Equity Holdings Net Assets
Nokia Corp. AB (ADR) 4.6%
International Business Machines Corp 4.6
Schering-Plough Corp. 4.0
Bristol-Myers Squibb Co. 3.8
COMPAQ Computer Corp. 3.7
Avon Products, Inc. 3.1
Philips Electronics N.V. (ADR) 3.1
Torchmark Corp. 2.7
Merck & Co., Inc. 2.6
Household International, Inc. 2.5
Additions
ADC Telecommunications, Inc.
*Ciba Specialty Chemical Holdings, Inc. (Rights)
FORE Systems, Inc.
Deletions
Abercrombie & Fitch Co.
Boston Scientific Corp.
CPT Telefonica Del Peru Pacifico S.A.
*Ciba Specialty Chemical Holdings, Inc. (Rights)
Whittaker Corp.
[FN]
*Added and deleted in the same quarter.
<PAGE>
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
Custodian
The Bank of New York
90 Washington Street, 12th Floor
New York, NY 10286
Transfer Agent
Merrill Lynch Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 637-3863
