MERRILL LYNCH
GLOBAL
HOLDINGS, INC.
FUND LOGO
Semi-Annual Report
May 31, 1996
<PAGE>
This report is not authorized for use as an offer of sale or a
solicitation of an offer to buy shares of the Company unless
accompanied or preceded by the Company's current prospectus. Past
performance results shown in this report should not be considered a
representation of future performance. Investment return and
principal value of shares will fluctuate so that shares, when
redeemed, may be worth more or less than their original cost.
Statements and other information herein are as dated and are subject
to change.
Merrill Lynch
Global Holdings, Inc.
Box 9011
Princeton, NJ
08543-9011
MERRILL LYNCH GLOBAL HOLDINGS, INC.
Worldwide
Investments
As of 5/31/96
Country of Percent of
Ten Largest Equity Holdings Origin Net Assets
Roche Holdings AG Switzerland 1.5%
Veba AG Germany 1.3
Total Access Communication Thailand 1.3
Baan Company N.V. Netherlands 1.2
Tokyo Broadcasting System Japan 1.1
Pfizer, Inc. United States 1.1
Christian Dior S.A. France 1.1
Time Warner Inc. United States 1.1
The Home Depot, Inc. United States 1.1
Mirage Resorts, Inc. United States 1.0
<PAGE>
Percent of
Ten Largest Industries Net Assets
Telecommunications 10.1%
Banking 8.5
Electrical & Electronics 7.0
Multi-Industry 6.9
Business & Public Services 5.8
Merchandising 5.0
Broadcasting & Publishing 4.0
Health & Personal Care 3.7
Electronics/Components 3.5
Insurance 2.8
Officers and
Directors
Arthur Zeikel, President and Director
Donald Cecil, Director
Edward H. Meyer, Director
Charles C. Reilly, Director
Richard R. West, Director
Edward D. Zinbarg, Director
Terry K. Glenn, Executive Vice President
Norman R. Harvey, Senior Vice President
Philip L. Kirstein, Senior Vice President
Donald C. Burke, Vice President
Edward F. Korff, Vice President and Portfolio Manager
Gerald M. Richard, Treasurer
Robert Harris, Secretary
Custodian
The Chase Manhattan Bank, N.A.
Global Securities Services
4 Chase MetroTech Center, 18th Floor
Brooklyn, New York 11245
Transfer Agent
Merrill Lynch Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, Florida 32246-6484
(800) 637-3863
<PAGE>
DEAR SHAREHOLDER
In our February quarterly report to shareholders, we anticipated
continued volatility in stock markets around the globe. This
anticipation was based on both economic and political
considerations. The United States, Japan, Germany and The People's
Republic of China were all in a period of transition from slower to
more rapid economic growth. During such transitions, corporate
earnings results can vary markedly by industry segment, and this
often results in significant portfolio shifts by investors. These
shifts can increase volatility. On the political front, turmoil and
uncertainty seemed the norm in virtually every region of the world.
These developments affect investor confidence and result in greater
equity market volatility as well as impacting relative currency
valuations.
Over the course of the May quarter, global markets were volatile.
More importantly, the major economies continued to strengthen, and
there was some lessening of adverse political developments. Most of
the world's equity markets gained during the quarter, but
performance of various industry segments was widely disparate.
In the near term, we believe economic indicators are likely to
continue to be mixed and seemingly contradictory at times. While the
economic recovery process is ongoing, it is essentially quite
fragile in both Japan and Western Europe. In the United States,
growth during the May quarter was surprisingly strong, and housing,
retail sales and employment growth exceeded expectations. Thus,
domestic investors have begun to focus on other investment
considerations, such as the outlook for inflation accelerating later
in the year. US interest rates have risen because of this concern,
and probably will increase slightly over the course of the year.
Elsewhere in the developed world, interest rates are stable or
declining as economic growth is only beginning to firm. Only in
Southeast Asia has growth remained above average. Worldwide
inflation remains quite subdued, with the ever-increasing
integration of the global economy playing a very positive role in
that regard.
There continue to be a number of political situations that could
affect world currency and equity markets over the near term.
Examples of these would be the elections in Russia, the debate on
Most Favored Nation Status of China, the World Trade Organization
hearings regarding US/Japan trade, and the rhetoric surrounding the
US presidential election. Any increased stock market volatility from
these situations is likely to be brief, in our opinion.
For the longer term, we remain optimistic about global equity
markets. Therefore, we continue to view volatility as an opportunity
to build positions in high-quality companies. We are committed to
offering investors a diversified portfolio that reflects investment
opportunities available around the globe.
<PAGE>
Investment Environment
Japan
So far in 1996, signs are good that Japan's economy is progressing
toward a self-sustaining recovery. Private business investment
appears to be picking up, encouraged by a rising trend in
manufacturing, higher corporate profits and stabilizing real estate
markets. Consumer spending also appears to be trending higher as
labor market conditions have stabilized. Against this backdrop, the
potential for interest rate hikes in Japan was a main theme in the
Tokyo financial markets over the past few months. While opinions are
still split on the subject of the economic outlook and the Bank of
Japan's interest rate policy beyond the second half of this year,
the fragility of the current recovery process suggests that the risk
of any tightening of monetary policy in the near term is small, in
our view. Nevertheless, we have not abandoned our cautious-to-
neutral stance on the Japanese stock market.
There are several reasons for this outlook. First, the Japanese
equity market's recent rally was led largely by Japanese public
pension funds' aggressive buying following the new measures recently
introduced by the pension funds industry. The industry is currently
being forced to look for ways to boost investment returns, and the
Pension Welfare Service Public Corporation, which controls the funds
on behalf of the Ministry of Health and Welfare, has shifted some of
its public pension assets from life insurance company general
accounts to other fund management companies in search of higher
returns. This led to an increased demand for equity at the start of
the new fiscal year in March and April. However, we see no evidence
that such strong buying activities may continue in the near term.
Second, as expected, Japanese companies reported generally positive
results for the fiscal year ended March 1996, but forecast a
cautious outlook for the coming fiscal year. We believe that the
Japanese authorities will be successful in maintaining liquidity to
keep interest rates historically low for the time being, but such
dramatically looser monetary policy is unlikely to be sustained
indefinitely. Many economists forecast that Japanese long-term
interest rates will gradually move up by early next year. Thus,
unless we see a continued trend of strong profit growth, valuations
of Japanese stock do not appear attractive. Third, large-scale
equity-linked financing is scheduled for this year, and there are
concerns about the ability to absorb the large amount of equity
supply. Lastly, progress toward a resolution of the Housing Loan
Corporation (Jusen) problem is difficult to ascertain.
Our exposure to Japan was little changed during the May quarter. We
remain focused on leading companies in each industry that have
strong managements, large market shares and financial strength.
During the three months ended May 31, 1996, our Japanese stocks
performed in line with the market despite our relatively higher
weighting in the technology sector. We continue to favor stocks such
as Tokyo Electron Ltd. for the long term, given the company's
attractive valuation. Despite some concerns mentioned above, we
remain positive about our Japanese holdings.
<PAGE>
Smaller Asian Markets
Because of uncertainties over the direction of US interest rates and
reduced foreign funds flows into the region, most of the Asian stock
markets ended the May quarter little changed over the previous quarter.
In response to the significant long-term growth potential in this
region, we view any market weakness as a buying opportunity and
look for potential bargains. Among our new investments in Asia
during the May quarter was Larsen & Toubro Ltd., India's premier
engineering and construction company, which we believe will benefit
significantly from the country's huge infrastructure investment needs,
regardless of changes in the government. The company's earnings growth
prospects for the next few years are superior and its valuation
appears very attractive.
North America
Early in the May quarter, economic data releases indicated more
rapid economic growth than had been anticipated. Investors who had
been looking for further interest rate cuts abruptly shifted to
expectations for higher interest rates. In fact, interest rates
rose. Despite the rise, consumer confidence levels are high as
reflected in retail sales and housing starts. However, household
debt has risen faster than disposable income throughout this
expansion, and delinquency rates are now back to the peak levels of
the last recession. This will result in tighter lending standards
which, together with the higher interest rates, should tend to lead
to more moderate consumption growth. Confusion over the real
strength of the economy is likely to continue.
Against the backdrop of a 5.04% gain in the unmanaged Standard &
Poor's 500 Index (S&P 500) in the May quarter, four of our business
service and healthcare services holdings had a negative impact on
the fund's performance. Fortunately, we maintained positions in
these companies which were substantially less than our normal
weighting. We took advantage of this price weakness as an
opportunity to add to our positions in two companies, Harnischfeger
Industries, Inc. and Molten Metal Technology, Inc. which, in our
opinion, have good long-term prospects.
Nearly all of our technology and telecommunications equipment
holdings made significant contributions to our US performance. Our
Intel Corp., Motorola, Inc., Microsoft Corp., Northern Telecom Ltd.
and General Instrument Corp. holdings achieved gains of 28.4%,
23.0%, 23.3%, 14.2% and 13.3%, respectively, for the May quarter.
Many of our other North American holdings produced solid gains as
well. Mirage Resorts, Inc. maintained its positive momentum with a
12.5% gain, as its prospects for new projects and earnings
visibility continued to improve. Performance Food Group Co.,up
31.9%, continued to show better prospects of relatively high
earnings growth. Varity Corp. agreed to be acquired by Britain's
Lucas Industries PLC, which resulted in a 30.1% gain for its shares
in the May quarter.
<PAGE>
During the May quarter, we took profits in one of our chemical
company holdings, Rohm & Haas Co., which had been a strong performer
since we bought the company's shares last year. As US economic
growth continues to gain momentum, the company faces increased risks
of raw materials price increases and lower margins. We eliminated
our position in CSX Corp. and used the proceeds to purchase shares
of Illinois Central Corp., one of the most efficiently managed
railroads in the United States. We also initiated positions in
Office Depot, Inc., which should benefit from industry
consolidation, and Viridian, Inc., a Canadian company which should
benefit from increased fertilizer demand.
Latin America
For the most part, the Latin American equity markets finished the
May quarter in positive territory, reflecting prospects for stronger
economic growth in spite of higher US interest rates. We eliminated
our position in Buenos Aires Embotelladora S.A. (BAESA), which
continued to disappoint investors in Argentina. Higher oil prices
contributed to 13.5% and 28.5% gains, respectively, in Yacimientos
Petroliferos Fiscales S.A. and Compania Naviera Perez Companc
S.A.C.F.I.M.F.A. In Brazil, Aracruz Celulose S.A. rebounded from its
recent lows to achieve a 24.1% gain, and Telecommunicacoes
Brasileras S.A.--Telebras PN appreciated 22.3% after announcing
quarterly earnings which exceeded analysts' expectations. Grupo
Carso, S.A. de C.V. gained 19.6% for the May quarter with the
announcement of details for the spin-off of its Telefonos de Mexico
(Telmex) holdings to shareholders and improved prospects for Mexican
economic growth.
Europe
Indications are that European economies troughed early this year.
Germany, the most powerful economic factor, did undergo a mild mini-
recession. Leading German economic institutes reported a sharp
positive turn toward optimism by corporate directors. This confirmed
what many continental fund managers had expressed in an early May
Merrill Lynch/Gallup Survey. Fully 88% believed an upturn was
beginning versus only 4% in December 1995.
The US dollar increased by 3.2% against the Deutschemark during the
May quarter, reflecting stronger US growth. It appreciated less
against other European currencies and actually declined marginally
against the Swedish kroner. In general, European companies benefit
from a stronger dollar in that their products are more price
competitive. Additionally, currency translation gains improve net
income.
<PAGE>
The more positive economic environment only partly reflected itself
in the European equity markets during the May quarter. In local
currency terms, the benchmark, the unmanaged Morgan Stanley Capital
International Europe Index, rose 3.9%, while in US dollar terms, the
Index rose by 2.2%. The European portion of Merrill Lynch Global
Holdings, Inc. outperformed its benchmark in Europe with an
established gain of 7.5% in US dollars. Performance was helped once
more by underweighting the United Kingdom, where stock prices were
unchanged in local currency terms. A large number of growth stocks
we held had outstanding performance. Baan Company N.V. rose 29%;
Adidas AG, 22%; Christian Dior S.A., 21%; Enterprise Oil PLC, 24%;
Veba AG, 15%; Next PLC, 18%; and, Roussel Uclaf S.A., 25%. Nokia OY
AS regained the 30% it lost in the prior quarter. Our performance
was hurt by our investments in National Westminster Bank PLC and The
Royal Bank of Scotland Group PLC, which declined by 10% and 6%,
respectively. Pressure on semiconductor prices hurt Philips
Electronics N.V., which sustained a 12% decline.
In Conclusion
For the quarter ended May 31, 1996, Merrill Lynch Global Holdings,
Inc.'s Class A, Class B, Class C and Class D Shares provided total
returns to shareholders of +5.72%, +5.43%, +5.43% and +5.67%,
respectively, in each instance superior to the total return of
+4.08% for the unmanaged Morgan Stanley Capital International World
Stock Index. Total returns for each class of shares also
outperformed the Index for the 12 months ended May 31, 1996 (see
page 7). (Results shown do not reflect sales charges and would be
lower if sales charges were included. Complete performance data,
including average annual total returns, can be found on pages 5--7
of this report to shareholders.)
We thank you for your investment in Merrill Lynch Global Holdings,
Inc., and we look forward to reviewing our outlook and strategy with
you again in the next report to shareholders.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
<PAGE>
(Edward F. Korff)
Edward F. Korff
Vice President and Portfolio Manager
July 1, 1996
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.
<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. 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
mainte-nance, 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 3/31/96 +20.22% +13.91%
Five Years Ended 3/31/96 +10.64 + 9.45
Ten Years Ended 3/31/96 +10.05 + 9.45
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 3/31/96 +18.95% +14.95%
Five Years Ended 3/31/96 + 9.50 + 9.50
Inception (10/21/88)
through 3/31/96 + 8.94 + 8.94
[FN]
*Maximum contingent deferred sales charge is 4% and is reduced to
0% after 4 years.
**Assuming payment of applicable contingent deferred sales charge.
<PAGE>
% Return % Return
Without CDSC With CDSC**
Class C Shares*
Year Ended 3/31/96 +19.04% +18.04%
Inception (10/21/94)
through 3/31/96 + 9.09 + 9.09
[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*
Year Ended 3/31/96 +19.90% +13.61%
Inception (10/21/94)
through 3/31/96 + 9.93 + 5.90
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
PERFORMANCE DATA (concluded)
<PAGE>
<TABLE>
Performance
Summary--
Class A Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<S> <C> <C> <C> <C> <C>
7/2/84--12/31/84 $ 9.15 $ 9.32 -- $0.170 + 3.68%
1985 9.32 12.28 -- 0.340 +36.05
1986 12.28 14.28 $ 1.270 0.300 +30.25
1987 14.28 11.52 3.638 0.372 + 6.54
1988 11.52 11.01 1.275 0.337 +10.04
1989 11.01 11.77 1.492 0.212 +23.53
1990 11.77 10.28 0.188 0.261 - 9.20
1991 10.28 11.67 0.221 0.123 +17.12
1992 11.67 11.27 0.817 0.063 + 4.28
1993 11.27 13.14 0.443 0.371 +24.08
1994 13.14 12.18 0.514 0.007 - 3.25
1995 12.18 13.32 0.584 0.164 +15.56
1/1/96--5/31/96 13.32 14.59 -- -- + 9.53
------- ------
Total $10.442 Total $2.720
Cumulative total return as of 5/31/96: +348.38%**
<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>
<PAGE>
<TABLE>
Performance
Summary--
Class B Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<S> <C> <C> <C> <C> <C>
10/21/88--12/31/88 $11.29 $11.00 $0.388 $0.147 + 2.22%
1989 11.00 11.71 1.492 0.138 +22.33
1990 11.71 10.20 0.188 0.166 -10.18
1991 10.20 11.56 0.221 0.036 +16.02
1992 11.56 11.09 0.817 0.001 + 3.15
1993 11.09 12.94 0.443 0.219 +22.87
1994 12.94 11.87 0.514 -- - 4.20
1995 11.87 12.82 0.584 0.164 +14.37
1/1/96--5/31/96 12.82 13.97 -- -- + 8.97
------ ------
Total $4.647 Total $0.871
Cumulative total return as of 5/31/96: +97.20%**
<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>
<TABLE>
Performance
Summary--
Class C Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<S> <C> <C> <C> <C> <C>
10/21/94--12/31/94 $13.08 $11.87 $0.514 -- - 5.23%
1995 11.87 12.82 0.584 $0.164 +14.37
1/1/96--5/31/96 12.82 13.98 -- -- + 9.05
------ ------
Total $1.098 Total $0.164
Cumulative total return as of 5/31/96: +18.20%**
<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>
<TABLE>
Performance
Summary--
Class D Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<S> <C> <C> <C> <C> <C>
10/21/94--12/31/94 $13.39 $12.18 $0.514 $0.003 - 5.09%
1995 12.18 13.29 0.584 0.164 +15.32
1/1/96--5/31/96 13.29 14.54 -- -- + 9.41
------ ------
Total $1.098 Total $0.167
Cumulative total return as of 5/31/96: +19.75%**
<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>
Recent
Performance
Results
<CAPTION>
12 Month 3 Month
5/31/96 2/29/96 5/31/95 % Change % Change
<S> <C> <C> <C> <C> <C>
ML Global Holdings, Inc. Class A Shares* $14.59 $13.80 $12.93 +17.84%(1) +5.72%
ML Global Holdings, Inc. Class B Shares* 13.97 13.25 12.54 +16.53(1) +5.43
ML Global Holdings, Inc. Class C Shares* 13.98 13.26 12.54 +16.62(1) +5.43
ML Global Holdings, Inc. Class D Shares* 14.54 13.76 12.92 +17.54(1) +5.67
ML Global Holdings, Inc. Class A Shares--Total Return* +19.24(2) +5.72
ML Global Holdings, Inc. Class B Shares--Total Return* +17.97(2) +5.43
ML Global Holdings, Inc. Class C Shares--Total Return* +18.06(2) +5.43
ML Global Holdings, Inc. Class D Shares--Total Return* +18.94(2) +5.67
World Stock Index--Total Return** +17.81 +4.08
<PAGE>
<FN>
*Investment results shown do not reflect sales charges; results
shown would be lower if a sales charge was included.
**The Morgan Stanley Capital International World Stock Index is an
unmanaged US dollar-denominated index of world stock markets
compiled by Capital International Perspective S.A. and published
in Morgan-Stanley Capital International Perspective.
(1)Percent change includes reinvestment of $0.584 per share capital
gains distributions.
(2)Percent change includes reinvestment of $0.164 per share ordinary
income dividends and $0.584 per share capital gains istributions.
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (in US Dollars)
<CAPTION>
LATIN Shares Value Percent of
AMERICA Industries Held Investments Cost (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C>
Argentina Energy 120,000 Yacimientos Petroliferos
Fiscales S.A.--Sponsored (ADR)* $ 2,350,450 $ 2,640,000 0.6%
Multi-Industry 339,000 Compania Naviera Perez
Companc S.A.C.F.I.M.F.A. 1,396,267 2,163,144 0.5
Total Investments in Argentina 3,746,717 4,803,144 1.1
Brazil Forest Products 397,500 Aracruz Celulose S.A. (ADR)* 3,624,750 3,577,500 0.8
& Paper
Telecommuni- 41,000,000 Telecommunicacoes Brasileiras S.A.--
cations Telebras PN (Preferred) 1,472,591 2,651,854 0.6
1,530,991 Telecommunicacoes Brasileiras S.A.--
Telebras PN (Rights) (c) 0 2 0.0
------------ ------------ ------
1,472,591 2,651,856 0.6
Total Investments in Brazil 5,097,341 6,229,356 1.4
Chile Multi-Industry 60,000 Madeco S.A. (ADR)* 1,568,038 1,605,000 0.4
Total Investments in Chile 1,568,038 1,605,000 0.4
<PAGE>
Mexico Beverages & 35,000 Panamerican Beverages, Inc.
Tobacco (Class A) (ADR)* 991,514 1,470,000 0.3
Multi-Industry 350,000 ++Grupo Carso, S.A. de C.V. 2,446,931 2,591,192 0.6
Total Investments in 3,438,445 4,061,192 0.9
Mexico
Total Investments in 13,850,541 16,698,692 3.8
Latin America
NORTH
AMERICA
Canada Agriculture 150,000 ++Viridian, Inc. 1,986,255 2,003,650 0.5
Telecommuni- 50,000 Northern Telecom Ltd. 1,474,875 2,712,500 0.6
cations
Total Investments in Canada 3,461,130 4,716,150 1.1
United Banking 60,000 Bank of New York Company, Inc. (The) 3,130,284 3,112,500 0.7
States 45,000 Barnett Banks, Inc. 2,756,978 2,812,500 0.6
60,000 Summit Bancorporation (The) (e) 1,246,915 2,182,500 0.5
------------ ------------ ------
7,134,177 8,107,500 1.8
Broadcasting & 115,000 Time Warner Inc. 3,948,176 4,643,125 1.1
Publishing 100,000 ++Viacom Inc. (Class A) 3,652,950 4,125,000 0.9
------------ ------------ ------
7,601,126 8,768,125 2.0
<PAGE>
Business & 30,000 ++Microsoft Corp. 1,250,000 3,558,750 0.8
Public Services 100,000 ++Molten Metal Technology, Inc. 2,354,895 3,000,000 0.7
135,000 Oracle Corporation (d) 956,438 4,455,000 1.0
30,000 ++Pacificare Health Systems
(Class B) 1,012,500 2,475,000 0.6
44,800 United HealthCare Corp. 737,136 2,458,400 0.6
82,000 ++Value Health Inc. 2,422,670 2,234,500 0.5
------------ ------------ ------
8,733,639 18,181,650 4.2
Chemicals 60,000 PPG Industries, Inc. 2,314,400 3,105,000 0.7
Electrical 60,000 Applied Materials, Inc. 2,160,563 2,227,500 0.5
Equipment 80,000 ++Ultratech Stepper Inc. 1,395,265 2,000,000 0.5
------------ ------------ ------
3,555,828 4,227,500 1.0
Electronics/ 125,000 ++General Instrument Corp. 3,132,134 3,859,375 0.9
Components 60,000 Intel Corp. 1,305,000 4,522,500 1.0
50,000 Motorola, Inc. 2,694,300 3,337,500 0.8
60,000 Texas Instruments Inc. 2,492,028 3,375,000 0.8
------------ ------------ ------
9,623,462 15,094,375 3.5
Energy Sources 150,000 Enron Oil & Gas Co. 2,824,428 3,787,500 0.9
Food & Household 100,000 ++Performance Food Group Co. 1,678,096 3,150,000 0.7
Products
Health & Personal 36,900 Merck & Co., Inc. 1,331,389 2,384,663 0.5
Care 66,700 Pfizer, Inc. 3,253,890 4,719,025 1.1
------------ ------------ ------
4,585,279 7,103,688 1.6
Industrial--Other 80,000 ++Varity Corp. 2,572,027 3,930,000 0.9
Insurance 100,000 AFLAC, Inc. 2,011,742 3,012,500 0.7
100,000 Mercury General Corp. 3,324,950 4,375,000 1.0
------------ ------------ ------
5,336,692 7,387,500 1.7
Leisure & Tourism 80,000 Mirage Resorts, Inc. 1,204,170 4,550,000 1.0
50,000 Walt Disney Co. 1,653,250 3,037,500 0.7
------------ ------------ ------
2,857,420 7,587,500 1.7
Machinery & 80,000 Harnischfeger Industries, Inc. 2,972,300 2,800,000 0.6
Equipment
Merchandising 90,000 The Home Depot, Inc. 3,373,925 4,601,250 1.1
75,000 Office Depot, Inc. 1,670,750 1,921,875 0.4
------------ ------------ ------
5,044,675 6,523,125 1.5
<PAGE>
Railroads 40,000 Consolidated Rail Corp. 2,384,900 2,810,000 0.6
60,000 Illinois Central Corp. 1,688,600 1,792,500 0.4
------------ ------------ ------
4,073,500 4,602,500 1.0
Telecommuni- 70,000 AT&T Corp. 4,276,451 4,366,250 1.0
cations 125,000 ++Airtouch Communications, Inc. 2,976,403 3,984,375 0.9
------------ ------------ ------
7,252,854 8,350,625 1.9
Total Investments in the 78,159,903 112,706,588 25.7
United States
Total Investments in 81,621,033 117,422,738 26.8
North America
PACIFIC
BASIN/ASIA
Australia Banking 200,097 National Australia Bank, Ltd. 1,430,366 1,875,739 0.4
Broadcasting & 300,925 News Corp., Ltd. (Ordinary) 1,604,187 1,687,748 0.4
Publishing
Entertainment 850,000 ++Sydney Harbour Casino Holdings Ltd. 1,254,015 1,281,666 0.3
Insurance 104,674 Lend Lease Corp. 1,327,152 1,636,775 0.4
Metals 300,000 WMC Ltd. (a) 1,727,089 2,271,337 0.5
Total Investments in Australia 7,342,809 8,753,265 2.0
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US Dollars)
<CAPTION>
PACIFIC BASIN/
ASIA Shares Held/ Value Percent of
(continued) Industries Face Amount Investments Cost (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C>
Hong Kong Multi-Industry 1,512,573 First Pacific Co., Ltd. $ 1,248,973 $ 2,082,114 0.5%
400,000 Hutchison Whampoa Ltd. 1,949,838 2,569,538 0.6
500,000 Swire Pacific 'A' Ltd. 2,453,484 4,443,051 1.0
------------- ------------ ------
5,652,295 9,094,703 2.1
Real Estate 400,000 Sun Hung Kai Properties, Ltd. 2,242,489 4,084,376 0.9
Utilities--Gas 1,440,000 Hong Kong and China Gas
Company Ltd. 1,873,089 2,289,319 0.5
120,000 Hong Kong and China Gas
Company Ltd.
(Warrants) (b) 0 33,735 0.0
------------ ------------ ------
1,873,089 2,323,054 0.5
Total Investments in Hong Kong 9,767,873 15,502,133 3.5
India Machinery & 196,000 Larsen & Toubro Ltd. (GDR)**++++ 3,008,600 3,920,000 0.9
Engineering
Total Investments in India 3,008,600 3,920,000 0.9
Indonesia Construction & 940,000 Jaya Real Property 2,924,702 3,103,774 0.7
Housing
Telecommuni- 40,000 P.T. Indonesian Satellite Corp.
cations (ADR)* 1,256,238 1,370,000 0.3
50,800 P.T. Telekomunikasi Indonesia
(ADR)* 939,403 1,549,400 0.4
------------ ------------ ------
2,195,641 2,919,400 0.7
Textiles 577,500 P.T. Indorama Synthetics (Foreign) 1,160,954 1,609,670 0.4
Total Investments in Indonesia 6,281,297 7,632,844 1.8
Japan Automobiles 120,000 Toyota Motor Corp. 2,128,963 2,746,224 0.6
Banking 130,000 Bank of Tokyo--Mitsubishi 3,085,819 3,083,480 0.7
US$ 1,000,000 The Mitsubishi Bank, Ltd.,
3% due 11/30/2002 1,000,000 1,170,000 0.3
100,000 Sanwa Bank, Ltd. 1,844,583 1,927,175 0.4
------------ ------------ ------
5,930,402 6,180,655 1.4
Broadcasting & 300,000 Tokyo Broadcasting System 3,736,661 4,947,651 1.1
Publishing
<PAGE>
Building 150,000 Sanwa Shutter Corporation 1,375,674 1,352,265 0.3
Materials
Cable & Wire 270,000 Sumitomo Electric Industry, Ltd. 2,968,251 3,677,384 0.8
Chemicals 350,000 Asahi Chemical Industry Co. 2,503,914 2,542,389 0.6
250,000 Sumitomo Chemical Co. 1,310,984 1,250,811 0.3
------------ ------------ ------
3,814,898 3,793,200 0.9
Construction 40,000 Sho-Bond Construction 1,327,862 1,508,385 0.3
& Housing
Data Processing & 120,000 Canon Inc. 2,096,847 2,357,083 0.5
Reproduction
Electrical & 300,000 Hitachi Ltd. 3,154,652 2,779,579 0.6
Electronics 29,000 Keyence Corp. 2,038,471 3,815,436 0.9
200,000 Matsushita Electric Industrial Co. 2,837,637 3,446,678 0.8
85,000 Murata Manufacturing Co., Ltd. 2,448,383 3,118,688 0.7
200,000 NEC Corporation 2,611,017 2,205,133 0.5
120,000 Omron Corp. 2,151,001 2,434,912 0.6
180,000 Sharp Corp. 2,744,465 2,935,236 0.7
90,000 Tokyo Electron Ltd. 3,173,486 2,776,800 0.6
------------ ------------ ------
21,159,112 23,512,462 5.4
Entertainment/Game 65,000 Sony Music Entertainment
(Japan) Inc. 2,980,367 3,282,220 0.8
Financial Services 200,000 Daiwa Securities Co., Ltd. 2,519,694 2,686,927 0.6
Insurance 250,000 Tokio Marine & Fire
Insurance Co., Ltd. 3,142,441 3,242,843 0.7
Machinery & 150,000 Makino Milling Machine Co., Ltd. 1,060,274 1,473,177 0.3
Engineering 350,000 Mitsubishi Heavy Industries Ltd. 2,575,289 3,012,601 0.7
------------ ------------ ------
3,635,563 4,485,778 1.0
Merchandising 50,000 Aoyama Trading Co. 2,716,597 1,343,463 0.3
60,000 Ito-Yokado Co., Ltd. 2,604,246 3,407,764 0.8
150,000 Marui Co., Ltd. 2,736,736 3,085,333 0.7
------------ ------------ ------
8,057,579 7,836,560 1.8
Metals 700,000 Nippon Steel Co. 2,407,627 2,380,246 0.5
800,000 Sumitomo Metal Industries Co., Ltd. 2,594,374 2,468,266 0.6
------------ ------------ ------
5,002,001 4,848,512 1.1
Real Estate 250,000 Mitsui Fudosan Co., Ltd. 3,097,952 3,173,353 0.7
<PAGE>
Telecommuni- 350 DDI Corp. 2,617,101 3,035,301 0.7
cations 307 Nippon Telephone & Telegraph
Corp. (Ordinary) 2,553,690 2,235,727 0.5
------------ ------------ ------
5,170,791 5,271,028 1.2
Wholesale & 250,000 Mitsui & Co. 1,780,475 2,304,735 0.5
International Trade
Total Investments in Japan 79,925,533 87,207,265 19.7
Malaysia Banking 583,333 Commerce Asset--Holding BHD 1,276,855 3,924,707 0.9
Building 325,000 Sungei Way Holdings BHD 1,251,327 1,418,702 0.3
Materials
Telecommuni- 300,000 ++Technology Resources
cations Industries BHD 786,189 997,197 0.2
300,000 Telekom Malaysia BHD 1,491,009 2,739,287 0.6
------------ ------------ ------
2,277,198 3,736,484 0.8
Total Investments in Malaysia 4,805,380 9,079,893 2.0
New Telecommuni- 400,000 Telecom Corp. of New Zealand Ltd.
Zealand cations (Class C) (ADR)* 1,278,315 1,625,125 0.4
Total Investments in New Zealand 1,278,315 1,625,125 0.4
Singapore Banking 180,000 Overseas Chinese Banking Corp. 1,886,971 2,300,319 0.5
Broadcasting & 100,000 Singapore Press Holdings Limited 1,476,852 1,874,334 0.4
Printing
Construction & 200,000 City Development Ltd. 1,181,730 1,533,546 0.4
Housing
Multi-Industry 150,000 Keppel Corp. Ltd. 1,089,994 1,256,656 0.3
Total Investments in Singapore 5,635,547 6,964,855 1.6
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US Dollars)
<CAPTION>
PACIFIC BASIN/
ASIA Shares Value Percent of
(concluded) Industries Held Investments Cost (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C>
South Banking 91,875 Hanil Bank $ 1,273,823 $ 1,096,308 0.3%
Korea
Construction & 29,170 Hyundai Engineering and
Housing Construction Co. 601,548 1,576,639 0.4
Electronics 46,283 LG Electronics Co. 1,725,155 1,274,706 0.3
Steel 38,000 Pohang Iron & Steel Co., Ltd. (ADR)* 910,700 1,002,250 0.2
Utilities 40,000 Korea Electric Power Co. 1,097,115 1,778,500 0.4
Total Investments in South Korea 5,608,341 6,728,403 1.6
Thailand Banking 50,000 Bangkok Bank Public Company Ltd. 532,863 727,273 0.2
Building Materials 20,000 Siam Cement Group 638,270 1,079,842 0.3
Telecommuni- 120,000 Advanced Information Services Inc. 1,470,008 2,020,553 0.5
cations 600,000 Total Access Communication 3,787,500 5,460,000 1.3
------------ ------------ ------
5,257,508 7,480,553 1.8
Total Investments in Thailand 6,428,641 9,287,668 2.3
Total Investments in the
Pacific Basin/Asia 130,082,336 156,701,451 35.8
WESTERN
EUROPE
Finland Forest Products/ 56,000 Kymmene OY 1,152,579 1,076,672 0.2
Paper & Packaging
Telecommunications 76,400 Nokia OY AS 'A' 2,163,900 3,331,749 0.8
Total Investments in Finland 3,316,479 4,408,421 1.0
France Banking 20,000 Cetelem S.A. 3,947,067 4,371,373 1.0
Cosmetics 33,000 Christian Dior S.A. 2,920,305 4,659,574 1.1
Electronics 100,000 Saes Getters S.p.A. (ADR)* 1,700,000 1,875,000 0.4
<PAGE>
Energy 42,785 Total S.A. 'B' 2,673,402 3,092,602 0.7
Total Investments in France 11,240,774 13,998,549 3.2
Germany Chemicals 130,000 ++SKW Trostberg AG 2,783,475 3,142,661 0.7
Multi-Industry 10,000 Mannesmann AG 3,229,897 3,468,545 0.8
105,000 Veba AG 4,095,992 5,494,266 1.3
------------ ------------ ------
7,325,889 8,962,811 2.1
Recreation 60,000 Adidas AG 3,119,053 4,503,932 1.0
Total Investments in Germany 13,228,417 16,609,404 3.8
Italy Telecommunications 6,000,000 Olivetti Group--Ing. 3,946,434 3,755,340 0.9
Total Investments in Italy 3,946,434 3,755,340 0.9
Netherlands Business & Public 140,000 Baan Company N.V. 2,254,885 5,203,699 1.2
Services
Construction & 229,017 Koninklijke Boskalis Westminster N.V. 3,567,844 3,793,714 0.9
Housing
Electrical & 250,000 ++BE Semiconductor Industries N.V. 3,483,753 4,093,750 0.9
Electronics 90,000 Philips Electronics N.V. 3,101,336 3,192,461 0.7
------------ ------------ ------
6,585,089 7,286,211 1.6
Total Investments in the Netherlands 12,407,818 16,283,624 3.7
Norway Automobiles 250,000 ++Sensonor A/S 1,904,025 2,184,276 0.5
Manufacturing 200,000 Tomra Systems A/S 1,907,841 1,946,688 0.4
Total Investments in Norway 3,811,866 4,130,964 0.9
Poland Food & Beverage 75,718 Agros Holdings S.A. 1,272,288 1,754,959 0.4
Total Investments in Poland 1,272,288 1,754,959 0.4
Spain Banking 100,000 Banco Bilbao Vizcaya S.A. 3,878,650 3,783,048 0.9
<PAGE>
Energy 50,000 Repsol S.A. 1,662,606 1,710,731 0.4
Total Investments in Spain 5,541,256 5,493,779 1.3
Sweden Automobiles 80,000 Autoliv AB 2,142,137 2,320,358 0.5
Forest Products/ 120,000 Mo Och Domsjo AB 'B' 2,957,303 3,078,937 0.7
Paper & Packaging
Health & Personal 60,000 Astra AB 'B' 1,096,951 2,708,572 0.6
Care
Total Investments in Sweden 6,196,391 8,107,867 1.8
Switzer- Health & 871 Roche Holdings AG 4,203,474 6,691,421 1.5
land Personal Care
Total Investments in Switzerland 4,203,474 6,691,421 1.5
United
Kingdom Banking 246,46 National Westminster Bank PLC 1,956,986 2,382,550 0.5
308,117 The Royal Bank of Scotland Group PLC 2,333,321 2,484,528 0.6
------------ ------------ ------
4,290,307 4,867,078 1.1
Broadcasting & 312,500 Carlton Communications PLC (Ordinary) 1,292,970 2,343,165 0.5
Publishing
Business & Public 320,000 Chubb Security PLC 1,625,989 1,715,274 0.4
Services
Electronics 1,250,000 Astec (BSR) PLC 1,943,769 2,885,385 0.7
Energy 470,986 British Petroleum Co. PLC 2,391,374 4,049,566 0.9
Energy Sources 575,000 Enterprise Oil PLC 3,483,980 4,213,437 1.0
Merchandising 592,000 ++Harvey Nichols PLC 2,696,033 3,118,230 0.7
500,000 Next PLC 1,731,357 4,337,760 1.0
------------ ------------ ------
4,427,390 7,455,990 1.7
Multi-Industry 289,588 Siebe PLC 2,522,914 3,876,161 0.9
Telecommunications 500,000 ++Orange PLC 1,556,667 1,897,770 0.4
Total Investments in the
United Kingdom 23,535,360 33,303,826 7.6
<PAGE>
Total Investments in
Western Europe 88,700,557 114,538,154 26.1
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in US Dollars)
<CAPTION>
SHORT-TERM Value Percent of
SECURITIES Face Amount Issue Cost (Note 1a) Net Assets
<S> <S> <S> <C> <S> <C> <C> <C>
United Commercial US$ 12,726,000 Associates Corp. of North America,
States Paper*** 5.40% due 6/03/1996 $ 12,722,182 $ 12,722,182 2.9%
10,000,000 Eiger Capital Corp., 5.29% due
6/03/1996 9,997,061 9,997,061 2.3
US Government & 10,000,000 Federal Home Loan Mortgage Corp.,
Agency 5.19% due 6/19/1996 9,974,050 9,974,050 2.3
Obligations***
Total Investments in Short-Term
Securities 32,693,293 32,693,293 7.5
Total Investments $346,947,760 438,054,328 100.0
============
Liabilities in Excess of Other Assets (32,421) (0.0)
------------ ------
Net Assets $438,021,907 100.0%
============ ======
<FN>
*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 Company.
(a)Formerly Western Mining Corp.
(b)Warrants entitle the Company to purchase a predetermined number
of shares of common stock. The purchase price and number of shares
are subject to adjustment under conditions until the expiration
date.
(c)The rights may be exercised until June 18, 1996.
(d)Formerly Oracle Systems Corp.
(e)Formerly UJB Financial Corp.
++Non-income producing security.
++++Restricted security as to resale. The value of the Company's
investment was $3,920,000, representing 0.9% of net assets.
<PAGE>
<CAPTION>
Acquisition Value
Issue Date Cost (Note 1a)
<S> <C> <C> <C>
Larsen & Toubro Ltd. (GDR) 3/01/1996 $3,008,600 $3,920,000
Total $3,008,600 $3,920,000
========== ==========
See Notes to Financial Statements.
</TABLE>
PORTFOLIO CHANGES
For the Quarter Ended May 31, 1996
Additions
Agros Holdings S.A.
Bank of Tokyo--Mitsubishi
Cetelem S.A.
Harvey Nichols PLC
Hong Kong and China Gas
Company Ltd. (Warrants)
Illinois Central Corp.
Larsen & Toubro Ltd. (GDR)
Office Depot, Inc.
Orange PLC
Saes Getters S.p.A. (ADR)
Sanwa Shutter Corporation
Sydney Harbour Casino Holdings Ltd.
Telecommunicacoes Brasileiras S.A.--
Telebras PN (Rights)
Tomra Systems A/S
Viridian, Inc.
<PAGE>
Deletions
Buenos Aires Embotelladora S.A.
(BAESA) (ADR)
CSX Corp.
Credit Local de France S.A.
Empresa Nacional de Celulosas S.A.
Friedrich Grohe AG (Preferred)
House of Fraser PLC IHC Caland N.V.
Jungheinrich AG (Preferred)
Kinnevik AB 'B' Free
The Mitsubishi Bank, Ltd.
Rohm & Haas Co.
Roussel-Uclaf S.A.
Tarkett AG
Telecom Italia Mobile S.p.A. (Savings)
Toray Industries, Inc.
<TABLE>
STATEMENT OF ASSETS AND LIABILITIES
<CAPTION>
As of May 31, 1996
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$346,947,760)
(Note 1a) $438,054,328
Cash 24,329
Foreign cash 2,652
Receivables:
Securities sold $ 2,656,263
Dividends 1,141,682
Capital shares sold 985,797
Interest 82 4,783,824
------------
Prepaid registration fees and other assets (Note 1f) 34,686
------------
Total assets 442,899,819
------------
Liabilities: Payables:
Securities purchased 2,731,848
Capital shares redeemed 1,343,276
Investment adviser (Note 2) 367,978
Distributor (Note 2) 41,636 4,484,738
------------
Accrued expenses and other liabilities 393,174
------------
Total liabilities 4,877,912
------------
<PAGE>
Net Assets: Net assets $438,021,907
============
Net Assets Class A Shares of Common Stock, $0.10 par value, 100,000,000
Consist of: shares authorized $ 2,639,497
Class B Shares of Common Stock, $0.10 par value, 100,000,000
shares authorized 339,496
Class C Shares of Common Stock, $0.10 par value, 100,000,000
shares authorized 5,672
Class D Shares of Common Stock, $0.10 par value, 100,000,000
shares authorized 32,279
Paid-in capital in excess of par 335,060,965
Accumulated investment loss--net (328,737)
Undistributed realized capital gains on investments and foreign
currency transactions--net 9,177,739
Unrealized appreciation on investments and foreign currency
transactions--net 91,094,996
------------
Net assets $438,021,907
============
Net Asset Class A--Based on net assets of $385,099,394 and 26,394,967
Value: shares outstanding $ 14.59
============
Class B--Based on net assets of $47,437,773 and 3,394,957
shares outstanding $ 13.97
============
Class C--Based on net assets of $792,820 and 56,720
shares outstanding $ 13.98
============
Class D--Based on net assets of $4,691,920 and 322,791
shares outstanding $ 14.54
============
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENT OF OPERATIONS
<CAPTION>
For the Six Months Ended May 31, 1996
<S> <S> <C> <C>
Investment Income Dividends (net of $334,426 foreign withholding tax) $ 3,915,612
(Notes 1d & 1e): Interest and discount earned 809,397
------------
Total income 4,725,009
------------
<PAGE>
Expenses: Investment advisory fees (Note 2) $ 2,025,028
Transfer agent fees--Class A (Note 2) 349,539
Account maintenance and distribution fees--Class B (Note 2) 229,428
Custodian fees 182,336
Accounting services (Note 2) 75,515
Printing and shareholder reports 73,009
Transfer agent fees--Class B (Note 2) 52,272
Registration fees (Note 1f) 47,211
Professional fees 35,191
Directors' fees and expenses 19,799
Account maintenance fees--Class D (Note 2) 5,500
Pricing fees 4,943
Transfer agent fees--Class D (Note 2) 4,350
Account maintenance and distribution fees--Class C (Note 2) 3,306
Transfer agent fees--Class C (Note 2) 784
Other 9,996
------------
Total expenses 3,118,207
------------
Investment income--net 1,606,802
------------
Realized & Realized gain (loss) from:
Unrealized Gain Investments--net 8,819,651
(Loss) on Foreign currency transactions--net (109,917) 8,709,734
Investments & ------------
Foreign Currency Change in unrealized appreciation/depreciation on:
Transactions--Net Investments--net 32,374,839
(Notes 1b, 1c, Foreign currency transactions--net (6,565) 32,368,274
1e & 3): ------------ ------------
Net realized and unrealized gain on investments and
foreign currency transactions 41,078,008
------------
Net Increase in Net Assets Resulting from Operations $ 42,684,810
============
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
For the Six For the
Months Ended Year Ended
Increase (Decrease) in Net Assets: May 31, 1996 Nov. 30, 1995
<S> <S> <C> <C>
Operations: Investment income--net $ 1,606,802 $ 1,067,089
Realized gain on investments and foreign currency
transactions--net 8,709,734 19,393,315
Change in unrealized appreciation/depreciation on
investments and foreign currency transactions--net 32,368,274 24,547,717
------------ ------------
Net increase in net assets resulting from operations 42,684,810 45,008,121
------------ ------------
<PAGE>
Dividends & Investment income--net:
Distributions to Class A -- (177,010)
Shareholders Class D -- (352)
(Note 1g): Realized gain on investments--net:
Class A (17,594,424) (13,259,833)
Class B (2,476,721) (2,030,586)
Class C (26,025) (7,459)
Class D (192,712) (65,148)
------------ ------------
Net decrease in net assets resulting from dividends and
distributions to shareholders (20,289,882) (15,540,388)
------------ ------------
Capital Share Net increase (decrease) in net assets derived from
Transactions capital share transactions 40,134,572 (35,521,768)
(Note 4): ------------ ------------
Net Assets: Total increase (decrease) in net assets 62,529,500 (6,054,035)
Beginning of period 375,492,407 381,546,442
------------ ------------
End of period $438,021,907 $375,492,407
============ ============
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
<CAPTION>
The following per share data and ratios have Class A++++
been derived from information provided For the
in the financial statements. Six Months
Ended For the Year Ended November 30,
Increase (Decrease) in Net Asset Value: May 31, 1996 1995 1994 1993 1992
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 13.87 $ 12.82 $ 13.07 $ 11.78 $ 10.95
Operating -------- -------- -------- -------- --------
Performance: Investment income--net .06 .05 .03 .04 .10
Realized and unrealized gain on
investments and foreign currency
transactions--net 1.41 1.52 .53 2.07 1.05
-------- -------- -------- -------- --------
Total from investment operations 1.47 1.57 .56 2.11 1.15
-------- -------- -------- -------- --------
Less dividends and distributions:
Investment income--net -- (.01) (.01) -- (.10)
Realized gain on investments--net (.75) (.51) (.80) (.82) (.22)
-------- -------- -------- -------- --------
Total dividends and distributions (.75) (.52) (.81) (.82) (.32)
-------- -------- -------- -------- --------
Net asset value, end of period $ 14.59 $ 13.87 $ 12.82 $ 13.07 $ 11.78
======== ======== ======== ======== ========
Total Investment Based on net asset value per share 11.16%+++ 12.92% 4.39% 19.16% 10.67%
Return:*** ======== ======== ======== ======== ========
Ratios to Average Expenses 1.41%* 1.51% 1.44% 1.43% 1.49%
Net Assets: ======== ======== ======== ======== ========
Investment income (loss)--net .92%* .41% .23% .32% (.19%)
======== ======== ======== ======== ========
Supplemental Net assets, end of period (in thousands) $385,099 $327,270 $330,132 $256,203 $166,947
Data: ======== ======== ======== ======== ========
Portfolio turnover 21.49% 44.64% 40.18% 56.98% 65.93%
======== ======== ======== ======== ========
Average commission rate paid+++++ $ .0229 -- -- -- --
======== ======== ======== ======== ========
<PAGE>
<CAPTION>
The following per share data and ratios have Class B++++
been derived from information provided For the
in the financial statements. Six Months
Ended For the Year Ended November 30,
Increase (Decrease) in Net Asset Value: May 31, 1996 1995 1994 1993 1992
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 13.38 $ 12.50 $ 12.74 $ 11.62 $ 10.82
Operating -------- -------- -------- -------- --------
Performance: Investment loss--net (.01) (.08) (.10) (.08) (.03)
Realized and unrealized gain on
investments and foreign currency
transactions--net 1.35 1.47 .52 2.02 1.05
-------- -------- -------- -------- --------
Total from investment operations 1.34 1.39 .42 1.94 1.02
-------- -------- -------- -------- --------
Less distributions from realized gain on
investments--net (.75) (.51) (.66) (.82) (.22)
-------- -------- -------- -------- --------
Net asset value, end of period $ 13.97 $ 13.38 $ 12.50 $ 12.74 $ 11.62
======== ======== ======== ======== ========
Total Investment Based on net asset value per share 10.57%+++ 11.78% 3.32% 17.87% 9.58%
Return:*** ======== ======== ======== ======== ========
Ratios to Average Expenses 2.44%* 2.55% 2.48% 2.46% 2.52%
Net Assets: ======== ======== ======== ======== ========
Investment loss--net (.14%)* (.63%) (.80%) (.72%) (1.19%)
======== ======== ======== ======== ========
Supplemental Net assets, end of period (in thousands) $ 47,438 $ 44,387 $ 49,647 $ 34,241 $ 22,925
Data: ======== ======== ======== ======== ========
Portfolio turnover 21.49% 44.64% 40.18% 56.98% 65.93%
======== ======== ======== ======== ========
Average commission rate paid+++++ $ .0229 -- -- -- --
======== ======== ======== ======== ========
<PAGE>
<CAPTION>
Class C++++ Class D++++
The following per share data and For the For the
ratios have been derived from For the Period For the Period
information provided in the Six Months For the Oct. 21, Six Months For the Oct. 21,
financial statements. Ended Year Ended 1994++ to Ended Year Ended 1994++ to
May 31, Nov. 30, Nov. 30, May 31, Nov. 30, Nov. 30,
Increase (Decrease) in Net Asset Value: 1996 1995 1994 1996 1995 1994
<S> <S> <C> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 13.38 $ 12.51 $ 13.08 $ 13.84 $ 12.81 $ 13.39
Operating -------- -------- -------- -------- -------- --------
Performance: Investment income (loss)--net .00** (.08) (.02) .04 .02 (.01)
Realized and unrealized gain
(loss) on investments and foreign
currency transactions--net 1.35 1.46 (.55) 1.41 1.52 (.57)
-------- -------- -------- -------- -------- --------
Total from investment operations 1.35 1.38 (.57) 1.45 1.54 (.58)
-------- -------- -------- -------- -------- --------
Less dividends and distributions:
Investment income--net -- -- -- -- (.00)** --
Realized gain on investments--net (.75) (.51) -- (.75) (.51) --
-------- -------- -------- -------- -------- --------
Total distributions (.75) (.51) -- (.75) (.51) --
-------- -------- -------- -------- -------- --------
Net asset value, end of period $ 13.98 $ 13.38 $ 12.51 $ 14.54 $ 13.84 $ 12.81
======== ======== ======== ======== ======== ========
Total Investment Based on net asset value per share 10.65%+++ 11.69% (4.36%)+++ 11.04%+++ 12.73% (4.33%)+++
Return:*** ======== ======== ======== ======== ======== ========
Ratios to Average Expenses 2.45%* 2.55% 3.00%* 1.66%* 1.76% 2.23%*
Net Assets: ======== ======== ======== ======== ======== ========
Investment income (loss)--net (.06%)* (.63%) (1.31%)* .58%* .18% (.67%)*
======== ======== ======== ======== ======== ========
Supplemental Net assets, end of period
Data: (in thousands) $ 793 $ 376 $ 177 $ 4,692 $ 3,459 $ 1,591
======== ======== ======== ======== ======== ========
Portfolio turnover 21.49% 44.64% 40.18% 21.49% 44.64% 40.18%
======== ======== ======== ======== ======== ========
Average commission rate paid+++++ $ .0229 -- -- $ .0229 -- --
======== ======== ======== ======== ======== ========
<PAGE>
<FN>
*Annualized.
**Amount is less than $.01 per share.
***Total investment returns exclude the effect of sales loads.
++Commencement of Operations.
++++Based on average shares outstanding during the period.
+++Aggregate total investment return.
+++++For fiscal years beginning on or after September 1, 1995, the
Company is required to disclose its average commission rate per
share for purchases and sales of equity securities.
See Notes to Financial Statements.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
Merrill Lynch Global Holdings, Inc. (the "Company") 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 Company offers four classes of shares under the Merrill Lynch
Select Pricing SM 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 Company.
<PAGE>
(a) Valuation of securities--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. Options purchased are valued at the last sale price in
the case of exchange-traded or, in the case of options traded in the
over-the-counter market, the last bid price. Short-term securities
are valued at amortized cost, which approximates market value. Other
investments, including futures contracts and related options, 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 Company's
Board of Directors.
(b) 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.
(c) Derivative financial instruments--The Company 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.
<PAGE>
* Options--The Company is authorized to write covered call options
and purchase put options. When the Company writes an option, an
amount equal to the premium received by the Company 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 purchased or sold through an exercise of an
option, the related premium paid (or received) is added to (or
deducted from) the basis of the security acquired or deducted from
(or added to) the proceeds of the security sold. When an option
expires (or the Company enters into a closing transaction), the
Company realizes a gain or loss on the option to the extent of the
premiums received or paid (or gain or loss to the extent the cost of
the closing transaction exceeds the premium paid or received).
Written and purchased options are non-income producing investments.
* Forward foreign exchange contracts--The Company is authorized to
enter into forward foreign exchange contracts as a hedge against
either specific transactions or portfolio positions. Such contracts
are not entered on the Company's records. However, the effect on
operations is recorded from the date the Company enters into such
contracts. Premium or discount is amortized over the life of the
contracts.
* Foreign currency options and futures--The Company may also
purchase or sell listed or over-the-counter foreign currency
options, foreign currency futures and related options on foreign
currency futures as a short or long hedge against possible
variations in foreign exchange rates. Such transactions may be
effected with respect to hedges on non-US dollar denominated
securities owned by the Company, sold by the Company but not yet
delivered, or committed or anticipated to be purchased by the
Company.
* Financial futures contracts--The Company may purchase or sell
interest rate futures contracts and options on such futures
contracts for the purpose of hedging the market risk on existing
securities or the intended purchase of securities. Futures contracts
are contracts for delayed delivery of securities at a specific
future date and at a specific price or yield. Upon entering into a
contract, the Company deposits and maintains as collateral such
initial margin as required by the exchange on which the transaction
is effected. Pursuant to the contract, the Company agrees to receive
from or pay to the broker an amount of cash equal to the daily
fluctuation in value of the contract. Such receipts or payments are
known as variation margin and are recorded by the Company as
unrealized gains or losses. When the contract is closed, the Company
records a realized gain or loss equal to the difference between the
value of the contract at the time it was opened and the value at
the time it was closed.
<PAGE>
(d) Income taxes--It is the Company'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 Company is informed of the ex-dividend date. Interest income 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--Dividends and distributions paid by
the Company are recorded on the ex-dividend dates.
2. Investment Advisory Agreement and Transactions
with Affiliates:
The Company 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 the
limited partner. The Company 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.
As compensation for its services to the Company, MLAM receives
monthly compensation at the annual rate of 1.0% of the average daily
net assets of the Company.
Certain states in which shares of the Company are qualified for sale
impose limitations on the expenses of the Company. The most
restrictive annual expense limitation requires that MLAM reimburse
the Company to the extent that expenses (excluding interest, taxes,
distribution fees, brokerage fees and commissions, and extraordinary
items) exceed 2.5% of the Company's first $30 million of average
daily net assets, 2.0% of the Company's next $70 million of average
daily net assets, and 1.5% of the daily net assets in excess
thereof. MLAM's obligation to reimburse the Company is limited to
the amount of the investment advisory fee. No fee payment will be
made to MLAM during any fiscal year which will cause such expenses
to exceed the most restrictive expense limitation at the time of
such payment.
<PAGE>
Pursuant to the distribution plans (the "Distribution Plans")
adopted by the Company in accordance with Rule 12b-1 under the
Investment Company Act of 1940, the Company 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 Distribution
Maintenance 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 Company. 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.
NOTES TO FINANCIAL STATEMENTS (concluded)
For the six months ended May 31, 1996, MLFD earned underwriting
discounts and direct commissions and MLPF&S earned dealer
concessions on sales of the Company's Class A and Class D Shares as
follows:
MLFD MLPF&S
Class A $813 $12,594
Class D $646 $ 8,817
<PAGE>
For the six months ended May 31, 1996, MLPF&S received contingent
deferred sales charges of $42,820 and $900 relating to transactions
in Class B and Class C Shares, respectively.
In addition, MLPF&S received $7,188 in commissions on the execution
of portfolio security transactions for the Company for the six
months ended May 31, 1996.
Merrill Lynch Financial Data Services, Inc. ("MLFDS"), a wholly-
owned subsidiary of ML & Co., acts as the Company's transfer agent.
Accounting services are provided to the Company by MLAM at cost.
Certain officers and/or directors of the Company 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 May 31, 1996 were $92,945,452 and
$79,340,199, respectively.
Net realized and unrealized gains (losses) as of May 31, 1996 were
as follows:
Realized Unrealized
Gains Gains
(Losses) (Losses)
Long-term investments $ 8,819,651 $ 91,106,568
Foreign currency transactions (109,917) (11,572)
------------ ------------
Total $ 8,709,734 $ 91,094,996
============ ============
As of May 31, 1996, net unrealized appreciation for Federal income
tax purposes aggregated $91,106,568, of which $95,630,789 related to
appreciated securities and $4,524,221 related to depreciated
securities. The aggregate cost of investments at May 31, 1996 for
Federal income tax purposes was $346,947,760.
4. Capital Share Transactions:
Net increase (decrease) in net assets derived from capital share
transactions was $40,134,572 and ($35,521,768) for the six months
ended May 31, 1996 and for the year ended November 30, 1995,
respectively.
Transactions in capital shares for each class were as follows:
<PAGE>
Class A Shares for the
Six Months Ended Dollar
May 31, 1996 Shares Amount
Shares sold 6,262,426 $ 87,092,330
Shares issued to shareholders in
reinvestment of distributions 1,233,289 16,242,414
------------- -------------
Total issued 7,495,715 103,334,744
Shares redeemed (4,693,137) (65,380,114)
------------- -------------
Net increase 2,802,578 $ 37,954,630
============= =============
Class A Shares for the
Year Ended Dollar
November 30, 1995 Shares Amount
Shares sold 6,594,967 $ 84,361,655
Shares issued to shareholders in
reinvestment of dividends and
distributions 949,889 11,322,677
------------- -------------
Total issued 7,544,856 95,684,332
Shares redeemed (9,701,811) (124,736,786)
------------- -------------
Net decrease (2,156,955) $ (29,052,454)
============= =============
Class B Shares for the Six Months Dollar
Ended May 31, 1996 Shares Amount
Shares sold 372,071 $ 4,925,997
Shares issued to shareholders in
reinvestment of distributions 174,046 2,205,170
------------- -------------
Total issued 546,117 7,131,167
Shares redeemed (454,093) (6,039,105)
Automatic conversion of shares (13,860) (182,086)
------------- -------------
Net increase 78,164 $ 909,976
============= =============
<PAGE>
Class B Shares for the Year Dollar
Ended November 30, 1995 Shares Amount
Shares sold 524,355 $ 6,805,305
Shares issued to shareholders in
reinvestment of distributions 154,488 1,793,609
------------- -------------
Total issued 678,843 8,598,914
Shares redeemed (1,292,140) (15,830,273)
Automatic conversion of shares (40,632) (883,950)
------------- -------------
Net decrease (653,929) $ (8,115,309)
============= =============
Class C Shares for the Six Months Dollar
Ended May 31, 1996 Shares Amount
Shares sold 39,917 $ 528,818
Shares issued to shareholders in
reinvestment of distributions 1,898 24,054
------------- -------------
Total issued 41,815 552,872
Shares redeemed (13,164) (178,092)
------------- -------------
Net increase 28,651 $ 374,780
============= =============
Class C Shares for the Year Dollar
Ended November 30, 1995 Shares Amount
Shares sold 21,916 $ 274,811
Shares issued to shareholders in
reinvestment of distributions 445 5,171
------------- -------------
Total issued 22,361 279,982
Shares redeemed (8,437) (106,151)
------------- -------------
Net increase 13,924 $ 173,831
============= =============
<PAGE>
Class D Shares for the Six Months Dollar
Ended May 31, 1996 Shares Amount
Shares sold 525,410 $ 7,042,591
Shares issued to shareholders in
reinvestment of distributions 13,626 179,386
Automatic conversion of shares 13,353 182,086
------------- -------------
Total issued 552,389 7,404,063
Shares redeemed (479,534) (6,508,877)
------------- -------------
Net increase 72,855 $ 895,186
============= =============
Class D Shares for the Year Dollar
Ended November 30, 1995 Shares Amount
Shares sold 705,152 $ 8,594,947
Shares issued to shareholders in
reinvestment of dividends and
distributions 4,931 58,733
Automatic conversion of shares 70,176 883,950
------------- -------------
Total issued 780,259 9,537,630
Shares redeemed (654,458) (8,065,466)
------------- -------------
Net increase 125,801 $ 1,472,164
============= =============
5. Commitments:
On May 31, 1996, the Company had entered into foreign exchange
contracts under which it had agreed to purchase and sell various
foreign currencies with approximate values of $2,621,000 and
$2,676,000, respectively.
