MERRILL LYNCH
GLOBAL
HOLDINGS, INC.
FUND LOGO
Semi-Annual Report
May 31, 1997
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
<PAGE>
Custodian
The Chase Manhattan Bank
Global Securities Services
4 Chase MetroTech Center, 18th Floor
Brooklyn, NY 11245
Transfer Agent
Merrill Lynch Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 637-3863
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
Printed on post-consumer recycled paper
MERRILL LYNCH GLOBAL HOLDINGS, INC.
Worldwide
Investments
As of 5/31/97
<PAGE>
Country of Percent of
Ten Largest Equity Holdings Origin Net Assets
Roche Holding Ltd. Switzerland 1.7%
Baan Company N.V. Netherlands 1.6
Enterprise Oil PLC United Kingdom 1.5
Intel Corp. United States 1.5
Gucci Group N.V. Italy 1.4
SKW Trostberg AG Germany 1.4
Veba AG Germany 1.3
NICE--Systems Ltd. (ADR) Israel 1.3
Cisco Systems, Inc. United States 1.3
Mercury General Corp. United States 1.3
Percent of
Ten Largest Industries Net Assets
Multi-Industry 10.4%
Banking 9.6
Electrical & Electronics 7.7
Business & Public Services 7.1
Merchandising 6.6
Telecommunications 6.4
Health & Personal Care 6.3
Business & Public Services 6.2
Electronics/Components 4.4
Energy Sources 4.3
DEAR SHAREHOLDER
During the quarter ended May 31, 1997, the total return in US
dollars (with net dividends reinvested) for the unmanaged Morgan
Stanley Capital International (MSCI) World Index was +7.4%. For the
first time in years, regional performance was quite similar. For
example, during the May quarter total return for the unmanaged MSCI
North America Index was +7.4%, for the unmanaged MSCI Europe Index
+7.1%, and for the unmanaged MSCI Pacific Index +8.0%. However,
total returns within regions were quite disparate. In the Far East
during the May quarter, Japan was +11.3%, but Malaysia was -14.5%
and Singapore, -6.8%. In Europe, total returns for Spain and
Switzerland were +18.6% and +16.5%, respectively, while France was-
1.9%. Thus, while the US stock market continues to be the primary
determinant of the MSCI World Index results, overall asset
allocation continues to be a critical input for global portfolios.
For the three months ended May 31, 1997, Merrill Lynch Global
Holdings, Inc.'s total returns for Class A, Class B, Class C and
Class D Shares were +6.67%, +6.38%, +6.39% and +6.62%, respectively,
somewhat below the +7.42% total return for the unmanaged MSCI World
Index. (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.)
<PAGE>
Intramarket volatility remains a very visible characteristic of most
equity markets, and currency fluctuations continue to be quite
pronounced. Reactions to economic and political events and the
resultant capital flows cause this volatility. Also, investors
continue to concentrate on a limited number of stocks or market
segments, and this narrow focus exacerbates volatility.
In the United States, investors seemingly would prefer a
continuation of the moderate growth/inflation environment of the
past few years. An accelerating economy would lead to upward
pressure on interest rates, which likely would negatively impact the
equity market. As was indicated in the February report to
shareholders, the 7% interest rate for the 30-year US Treasury bond
appears to be psychologically important. For example, robust
economic growth early in the year caused long-term interest rates to
briefly rise above the 7% level, and resulted in a 9% drop in the
equity market during March and early April. When economic indicators
began to indicate a slowdown, interest rates dropped below 7% and
the market rallied some 15% between April 11, 1997 and May 31, 1997.
In our opinion, this pronounced volatility within a three-month
period demonstrates a lack of conviction about the direction of the
economy and that the stock market's valuation is quite full, unless
long-term interest rates remain below 7%.
In Europe, economic activity continues to gradually accelerate. The
fiscal constraints imposed by the individual governments as they
attempt to meet the Maastricht Treaty criteria continue to impede
growth. Unemployment remains high but inflation is subdued.
Political considerations could be an important determinant of stock
market performance over the immediate future. The recent elections
in France and the United Kingdom could lead to altered economic
policies, and that could be disruptive to progress toward the
European Union and a common currency. Moreover, recent polls in
Germany display a marked decline in the popularity of the Kohl
government. The lead-up to the 1998 German election and the recent
rift between the government and the Bundesbank, Germany's central
bank, will have to be carefully monitored.
In the Far East, political considerations overshadowed economic
matters at times during the May quarter. For example, while the
election results in Indonesia and Singapore were foregone
conclusions, governmental reactions to the opposition parties'
campaign rhetoric and demonstrations did impact investor psychology
and stock market performance. Likewise, the ongoing scandals in
Japan are causing many domestic investors there to shun the market
despite signs of overall economic progress. The Chinese and Hong
Kong markets generally performed well during the May quarter,
although volatility did increase as the date of Hong Kong's handover
to China approached. Elsewhere, most negatively in Thailand,
economic matters dictated equity market performance in the May
quarter.
<PAGE>
Looking forward, there appears to be no persuasive reason to expect
a lessening of volatility within equity markets. We will continue to
be price sensitive and value oriented. Our investment strategy
remains to provide a geographically diversified portfolio of high-
quality companies that benefit from economic growth opportunities
around the globe.
Investment Environment
Europe
While European economies have continued to improve, this progress is
not the primary topic of economists. Lately, the spotlight has been
on the faltering European Monetary Union effort. The Socialist
victory in the recent French parliamentary elections, and the German
government's proposal to revalue its gold reserves in order to use
the paper profits to offset the budget deficit, have led some to
question whether a common currency by January 1999 is feasible.
Over the last three months, the MSCI Europe Index gained 7.1% in US
dollar terms. Our investments in Europe appreciated slightly less
than the Index for the first time in two years. We were hurt by
underperformance of our UK holdings and that of Roche Holding A.G.,
our largest European position. However, gains of 40%, 23% and 36%
for NICE--Systems Ltd., Philips Electronics N.V. and Baan Company
N.V., respectively, all helped the quarterly result. During the May
quarter, we realized profits in Astra AB, Christian Dior S.A., Total
S.A. and BIC S.A. New companies added in the portfolio included:
Societe Nationale Elf Acquitaine S.A., the large French energy
company; Endemol Entertainment, N.V., one of Europe's largest
television content providers; Capita Group PLC, a UK market leader
in the provision of information technology-based support services;
and Ryanair Holdings PLC, Europe's lowest-cost airline.
North America
As compared to a 7.27% increase for the unmanaged Standard & Poor's
500 Index for the May quarter, performance of our holdings in the
United States was quite good across a variety of industries. In the
banking area, The Bank of New York, Inc., Barnett Banks, Inc. and
Northern Trust Corporation appreciated 10.4%, 13.8% and 15.6%,
respectively. Technology issues also augmented performance. Texas
Instruments Inc., Northern Telecom Ltd., Oracle Corporation,
Microsoft Corp. and Cisco Systems, Inc. all gained between 16%--32%
in the May quarter. In contrast to the February quarter, our energy-
related positions also benefited the fund. Mobil Corp., Global
Industries Ltd. and Transocean Offshore Inc. gained 14.0%, 20.5% and
23.5%, respectively. Other outperformers included Performance Food
Group Co. (+25.8%), Mercury General Corp. (+19.3%), Home Depot, Inc.
(+15.6%) and McDonald's Corp. (+12.5%).
<PAGE>
On the negative side, two of our smaller positions, Molten Metal
Technology, Inc. and PETsMART, Inc., significantly underperformed.
Both have near-term operating problems. However, we remain
enthusiastic about future prospects and have added to our positions.
During the May quarter, we eliminated our positions in Airtouch
Communications, Inc. and Mirage Resorts, Inc. Newly initiated
positions include Cisco Systems, Inc., McDonald's Corp. and US
Filter Corp.
Latin America
The May quarter witnessed a distinct divergence in the performance
of our Latin American holdings. Positive company fundamentals and
better prospects for economic and political reform within Brazil
contributed to the outstanding performance of Telecommunicacoes
Brasileiras S.A.--Telebras PN, which was up 41.6%. Pulp producer
Aracruz Celulose S.A., reflecting prospects of a better pricing
environment for its products, continued its outperformance and rose
by 10.1%. In Argentina, Yacimientos Petroliferos Fiscales S.A. and
Compania Naviera Perez Companc S.A.C.F.I.M.F.A. continued their
strong performances, gaining 12.2% and 11.4%, respectively. In
Mexico, Grupo Carso, S.A. de C.V. reported disappointing quarterly
results and was down 1.5% for the May quarter. Fortunately, we had
reduced the size of our position before this announcement. Another
disappointing performer was Grupo Financiero Banorte, S.A. de C.V.,
which reported delays in obtaining regulatory approval for a
proposed merger with another Mexican bank. Banks within the Mexican
system are now subject to additional disclosure requirements for bad
loans, which has also impacted stated results. However, we still
believe Grupo Financiero Banorte is well-positioned to benefit from
the resumption of economic growth in Mexico.
During the May quarter, we eliminated positions in Uniao de Bancos
Brasileiros S.A. in Brazil and the Colombian retailer, Almacenes
Exito S.A., with significant profits. We remain impressed with the
prospects of both, but trading liquidity prevented us from building
significant positions at reasonable valuations. We also eliminated
Panamerican Beverages, Inc. after the announcement of a potentially
dilutive acquisition. New purchases include Banco de Galicia y
Buenos Aires S.A. de C.V. and Banco Latinoamericano de Exportaciones
S.A.
Japan
The Japanese stock market rebounded strongly during the May quarter,
largely supported by favorable demand from domestic pension funds
and foreigners. Domestic institutions traditionally make their asset
allocation decisions at the start of their new fiscal year in April.
Some foreign institutions which had been extremely underweighted in
Japan raised their exposures, presumably for fear of not owning
Japanese equities in sufficient size.
<PAGE>
In sharp contrast with the trends seen in the last two years (for
example, weak stock prices, a strong bond market and a weak yen),
the recent stock market rally was accompanied by a rise in domestic
bond yields and an appreciation of the yen. This appears to us to
suggest that investors concluded that Japan's economy is stronger
than was widely perceived.
The last Tankan report (the Bank of Japan's quarterly survey of
economic conditions), which was released in early April, showed that
conditions in the Japanese economy were mixed. While large, export-
oriented manufacturing companies made significant progress,
benefiting from aggressive restructuring and from the weaker
currency, small to medium-sized companies languished. Smaller
companies have suffered from pricing pressures from the larger
companies that they supply. These companies also lagged behind
larger corporations in restructuring because they have neither
diversification sources nor significant assets. The key message of
the survey was that the outlook for small to medium-sized companies
was far from encouraging. In Japan, small to medium-sized companies
employ more than 80% of the total workforce and generate more than
60% of domestic capital expenditures. Thus, the confidence level of
and business investments by these companies are critical for the
economy as a whole to gain growth momentum. We believe that the Bank
of Japan will carefully assess this segment of the economy for any
improvement before changing its monetary policy. We also believe
market speculation over stronger-than-expected economic growth will
continue until the next Tankan report is released in late June, and
that investors are likely to be sensitive to economic data releases,
especially data relating to consumer spending in the aftermath of
the tax increase that took place in April. In the meantime, the
polarization within the market (for example, investors favoring
export-oriented blue-chip companies and shunning non-manufacturing
and smaller companies) continued. Within sectors, the gap between
strong and weak companies widened.
During the May quarter, we made few changes to the portfolio, but
continued to focus on our existing holdings that we believe are
price competitive on a global scale, possess proprietary technology
and have unique products. In that process, we eliminated Asahi
Chemical Industry Co. but increased exposures to Keyence Corp.,
Minebea Co., Ltd., Murata Manufacturing Co., Ltd. and Mitsubishi
Heavy Industries Ltd. on weakness. All but five of our holdings
significantly outperformed the market, gaining between 15%--35%
during the May quarter. For example, Tokyo Electron Ltd., Nippon
Telephone & Telegraph Corp. and Marui Co., Ltd. gained 39%, 29% and
25%, respectively, in yen terms during the May quarter.
<PAGE>
Asia (ex Japan)
Many of the Asian markets (ex Japan) had another disappointing
quarter. Malaysia, Singapore, Indonesia, Thailand, India and the
Philippines all declined as the gloom surrounding the Thai stock
market spread over the region. The Malaysian market declined sharply
since mid-April on concerns over the central bank's new credit
curbing measures and as currency worries spilled over from Thailand.
However, we believed that those concerns were overdone, and used the
market's weakness to accumulate more shares in Sime Darby BHD and
establish a new position in Land & General BHD. Land & General is a
major property development company in Malaysia which is also
involved in timber, petrochemicals and oil and gas. The company's
share price fell to a very attractive level in the recent market
downturn. The Indonesian market held up well during the run-up to
the parliamentary election. We believe that the investment
environment for Indonesia remains positive, given a modest recovery
in domestic demand and a favorable interest rate outlook. Thailand
is experiencing an economic slowdown, its currency is under severe
attack and the country's financial sector remains under heavy
pressure from problem loans. However, since we believe that the
market should recover eventually, we established a new position in
PTT Exploration & Production Public Co. (PTTEP) in Thailand. PTTEP,
71%-owned by Thailand's state oil company, is engaged in the
upstream exploration and production of petroleum in Thailand and
neighboring countries. The company has a strong balance sheet and
a defensive earnings profile. Because the company's assets and
revenues are based in US dollars, PTTEP is a beneficiary of the baht
weakness against the US dollar. Given the positive outlook for
natural gas demand in the region, we believe PTTEP is a very
attractive long-term investment. Elsewhere in the region, we took
profits in National Australia Bank, Ltd. and Sydney Harbour Casino
Holdings Ltd. in Australia. We also eliminated our investment in
Larsen & Toubro Ltd. in India. Larsen & Toubro's performance has
been adversely affected by the slowdown in the Indian economy and by
a sharp fall in operating margins in its cement division. Since we
expect the company's operating margins to remain under pressure, we
decided to sell the shares.
Only the Hong Kong market continued its uptrend in response to
improving economic conditions and an upbeat political atmosphere
ahead of the imminent handover of Hong Kong to China. In early
March, we increased our investments in Hong Kong by adding to our
positions in CITIC Pacific Ltd., Hong Kong and China Gas Company
Ltd. and First Pacific Co., Ltd. on weakness. We enjoyed good
performance from Hong Kong stocks, particularly CITIC Pacific Ltd.
and Hong Kong & China Gas Company Ltd., during the May quarter.
Finally, the South Korean stock market rebounded based on a
favorable flow of funds and a temporary improvement in the external
accounts. Nevertheless, we remain skeptical about the sustainability
of the recovery.
<PAGE>
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Edward F. Korff)
Edward F. Korff
Vice President and Portfolio Manager
June 27, 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.
Average Annual
Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 3/31/97 + 8.67% + 2.96%
Five Years Ended 3/31/97 +11.21 +10.02
Ten Years Ended 3/31/97 + 8.35 + 7.77
[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 + 7.54% + 3.54%
Five Years Ended 3/31/97 +10.07 +10.07
Inception (10/21/88) through 3/31/97 + 8.78 + 8.78
<PAGE>
[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 +7.49% +6.49%
Inception (10/21/94) through 3/31/97 +8.44 +8.44
[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 3/31/97 +8.43% +2.74%
Inception (10/21/94) through 3/31/97 +9.32 +6.93
[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
1996 13.32 14.08 0.684 0.229 +12.61
1/1/97--5/31/97 14.08 15.36 -- -- + 9.09
------- ------
Total $11.126 Total $2.949
Cumulative total return as of 5/31/97: +402.86%**
<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
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
1996 12.82 13.51 0.684 0.074 +11.33
1/1/97--5/31/97 13.51 14.68 -- -- + 8.66
------ ------
Total $5.331 Total $0.945
<PAGE>
Cumulative total return as of 5/31/97: +118.91%**
<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 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
1996 12.82 13.48 0.684 0.108 +11.37
1/1/97--5/31/97 13.48 14.65 -- -- + 8.68
------ ------
Total $1.782 Total $0.272
Cumulative total return as of 5/31/97: +31.19%**
<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
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
1996 13.29 14.04 0.684 0.193 +12.29
1/1/97--5/31/97 14.04 15.30 -- -- + 8.97
------ ------
Total $1.782 Total $0.360
Cumulative total return as of 5/31/97: +33.94%**
<PAGE>
<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>
Recent
Performance Results
<CAPTION>
12 Month 3 Month
5/31/97 2/28/97 5/31/96 % Change % Change
<S> <C> <C> <C> <C> <C>
ML Global Holdings, Inc. Class A Shares* $15.36 $14.40 $14.59 +10.43%(1) +6.67%
ML Global Holdings, Inc. Class B Shares* 14.68 13.80 13.97 +10.44(1) +6.38
ML Global Holdings, Inc. Class C Shares* 14.65 13.77 13.98 +10.14(1) +6.39
ML Global Holdings, Inc. Class D Shares* 15.30 14.35 14.54 +10.39(1) +6.62
ML Global Holdings, Inc. Class A Shares--Total Return* +12.15(2) +6.67
ML Global Holdings, Inc. Class B Shares--Total Return* +11.01(3) +6.38
ML Global Holdings, Inc. Class C Shares--Total Return* +10.99(4) +6.39
ML Global Holdings, Inc. Class D Shares--Total Return* +11.85(5) +6.62
World Stock Index--Total Return** +17.05 +7.42
<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 $0.684 per share capital
gains distributions.
(2)Percent change includes reinvestment of $0.229 per share ordinary
income dividends and $0.684 per share capital gains distributions.
(3)Percent change includes reinvestment of $0.074 per share ordinary
income dividends and $0.684 per share capital gains distributions.
(4)Percent change includes reinvestment of $0.108 per share ordinary
income dividends and $0.684 per share capital gains distributions.
(5)Percent change includes reinvestment of $0.193 per share ordinary
income dividends and $0.684 per share capital gains distributions.
</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 Banking 65,000 Banco de Galicia y Buenos Aires
S.A. de C.V. (ADR)* $ 1,494,280 $ 1,698,125 0.3%
<PAGE>
Energy 100,000 Yacimientos Petroliferos Fiscales
S.A. (ADR)* 1,970,450 3,000,000 0.6
Multi-Industry 278,810 Compania Naviera Perez Companc
S.A.C.F.I.M.F.A. 1,023,485 2,133,966 0.4
Total Investments in Argentina 4,488,215 6,832,091 1.3
Brazil Forest Products 150,000 Aracruz Celulose S.A. (ADR)* 2,747,250 3,056,250 0.6
& Paper
Telecommunications 30,000,000 Telecommunicacoes Brasileiras
S.A.--Telebras PN (Preferred) 1,069,928 4,136,096 0.8
Total Investments in Brazil 3,817,178 7,192,346 1.4
Mexico Banking 2,000,000 ++Grupo Financiero Banorte,
S.A. de C.V. (Class B) 2,113,918 1,844,832 0.4
Multi-Industry 400,000 Grupo Carso, S.A. de C.V. 2,116,552 2,274,450 0.4
Total Investments in Mexico 4,230,470 4,119,282 0.8
Panama Banking 75,000 Banco Latinoamericano de Exportaciones,
S.A. (E Shares) 3,704,425 3,534,375 0.7
Total Investments in Panama 3,704,425 3,534,375 0.7
Total Investments in Latin America 16,240,288 21,678,094 4.2
MIDDLE
EAST
Israel Electrical & 225,000 ++NICE--Systems Ltd. (ADR)* 5,127,004 6,750,000 1.3
Electronics
Total Investments in the Middle East 5,127,004 6,750,000 1.3
NORTH
AMERICA
Canada Chemicals 300,000 Agrium, Inc. 4,041,372 4,076,087 0.8
Telecommunications 50,000 Northern Telecom Ltd. 1,474,875 4,200,000 0.8
Total Investments in Canada 5,516,247 8,276,087 1.6
United States Banking 120,000 Bank of New York, Inc. (The) 3,130,284 5,115,000 1.0
75,000 Barnett Banks, Inc. 2,473,623 3,946,875 0.8
120,000 Northern Trust Corporation 4,734,901 5,880,000 1.1
------------ ------------ ------
10,338,808 14,941,875 2.9
<PAGE>
Business & Public 35,000 ++Microsoft Corp. 722,917 4,340,000 0.9
Services 300,000 ++Molten Metal Technology, Inc. 4,511,661 2,100,000 0.4
125,000 ++Oracle Corporation 2,825,903 5,828,125 1.1
150,000 ++US Filter Corp. 4,588,753 4,725,000 0.9
------------ ------------ ------
12,649,234 16,993,125 3.3
Electronics/Components 100,000 ++Cisco Systems, Inc. 5,070,625 6,750,000 1.3
150,000 ++General Instrument Corp. 3,670,446 3,637,500 0.7
50,000 Intel Corp. 1,180,625 7,568,750 1.5
50,000 Texas Instruments Inc. 2,175,525 4,493,750 0.9
------------ ------------ ------
12,097,221 22,450,000 4.4
Energy Sources 200,000 Enron Oil & Gas Co. 4,128,678 4,275,000 0.8
250,000 ++Global Industries Ltd. 4,605,101 5,406,250 1.1
40,000 Mobil Corp. 5,215,520 5,595,000 1.1
75,000 Transocean Offshore Inc. 4,261,180 5,175,000 1.0
------------ ------------ ------
18,210,479 20,451,250 4.0
Food & Household 150,000 ++Performance Food Group Co. 1,678,096 3,075,000 0.6
Products
Foods 50,000 McDonald's Corp. 2,234,250 2,512,500 0.5
Health & Personal 125,000 ++Forest Laboratories, Inc. 4,431,753 5,281,250 1.0
Care 100,000 Johnson & Johnson 5,281,812 5,987,500 1.1
35,000 Merck & Co., Inc. 1,262,400 3,145,625 0.6
60,000 Pfizer, Inc. 3,267,028 6,172,500 1.2
100,000 Pharmacia & Upjohn Inc. 3,942,917 3,462,500 0.7
------------ ------------ ------
18,185,910 24,049,375 4.6
Insurance 90,300 Mercury General Corp. 3,440,181 6,614,475 1.3
80,000 The PMI Group, Inc. 4,385,425 4,390,000 0.8
------------ ------------ ------
7,825,606 11,004,475 2.1
Machinery & Equipment 125,000 Harnischfeger Industries, Inc. 4,725,187 5,359,375 1.0
125,000 Kennametal, Inc. 5,048,372 4,968,750 1.0
------------ ------------ ------
9,773,559 10,328,125 2.0
Merchandising 150,000 ++Federated Department Stores, Inc. 4,921,701 5,550,000 1.1
100,000 Home Depot, Inc. 4,209,058 6,300,000 1.2
250,000 ++PETsMART, Inc. 4,482,224 3,062,500 0.6
------------ ------------ ------
13,612,983 14,912,500 2.9
Railroads 125,000 Illinois Central Corp. 3,777,500 4,515,625 0.9
<PAGE>
Total Investments in the
United States 110,383,646 145,233,850 28.2
Total Investments in North
America 115,899,893 153,509,937 29.8
PACIFIC BASIN/
ASIA
Australia Broadcasting & 351,883 News Corp., Ltd. (Ordinary) 1,873,092 1,561,790 0.3
Publishing
Insurance 109,243 Lend Lease Corp. 1,405,161 2,163,997 0.4
Total Investments in Australia 3,278,253 3,725,787 0.7
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
PACIFIC BASIN/ Shares Held/ Value Percent of
ASIA (concluded) Industries Face Amount Investments Cost (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C>
Hong Kong Multi-Industry 226,000 ++Beijing Enterprises Holdings Ltd. $ 368,190 $ 1,318,431 0.3%
500,000 CITIC Pacific Ltd. 2,539,751 2,858,802 0.6
2,198,228 First Pacific Co., Ltd. 2,175,546 2,808,784 0.5
400,000 Hutchison Whampoa Ltd. 1,949,838 3,329,892 0.6
500,000 Swire Pacific Ltd. 'A' 2,453,484 4,194,631 0.8
------------ ------------ ------
9,486,809 14,510,540 2.8
Real Estate 400,000 Sun Hung Kai Properties, Ltd. 2,242,489 4,917,398 1.0
Utilities--Gas 2,400,000 Hong Kong and China Gas Company Ltd. 2,951,272 4,181,724 0.8
120,000 Hong Kong and China Gas Company Ltd.
(Warrants) (a) 0 84,409 0.0
------------ ------------ ------
2,951,272 4,266,133 0.8
Total Investments in Hong Kong 14,680,570 23,694,071 4.6
Indonesia Construction & 1,880,000 ++Jaya Real Property 2,924,702 2,629,371 0.5
Housing
Telecommunications 55,000 P.T. Telekomunikasi Indonesia (ADR)* 1,059,880 1,828,750 0.4
Textiles 3,000,000 P.T. Indorama Synthetics (Foreign) 1,834,593 2,529,823 0.5
Total Investments in Indonesia 5,819,175 6,987,944 1.4
<PAGE>
Japan Automobiles 100,000 Toyota Motor Corp. 1,817,188 2,871,389 0.6
Banking 130,000 Bank of Tokyo--Mitsubishi 3,085,819 2,257,565 0.4
US$ 1,000,000 The Mitsubishi Bank, Ltd., 3% due
11/30/2002 (Convertible) 1,000,000 1,048,000 0.2
100,000 Sanwa Bank, Ltd. 1,844,583 1,280,949 0.2
------------ ------------ ------
5,930,402 4,586,514 0.8
Broadcasting & 300,000 Tokyo Broadcasting System, Inc. 3,736,661 5,467,675 1.1
Publishing
Cable & Wire 270,000 Sumitomo Electric Industry, Ltd. 2,968,251 4,247,765 0.8
Data Processing & 120,000 Canon Inc. 2,096,847 3,043,329 0.6
Reproduction
Electrical & 250,000 Hitachi Ltd. 2,636,635 2,665,062 0.5
Electronics 35,000 Keyence Corp. 2,394,452 5,055,021 1.0
200,000 Matsushita Electric Industrial Co. 2,837,637 3,765,475 0.7
90,000 Murata Manufacturing Co., Ltd. 2,616,519 3,566,885 0.7
300,000 NEC Corporation 3,767,865 4,178,129 0.8
200,000 Sharp Corp. 2,987,601 2,579,092 0.5
100,000 Tokyo Electron Ltd. 3,209,659 5,046,424 1.0
------------ ------------ ------
20,450,368 26,856,088 5.2
Entertainment 80,000 Sony Music Entertainment (Japan) Inc. 3,498,777 3,782,668 0.7
Financial Services 300,000 Daiwa Securities Co., Ltd. 3,124,447 2,210,282 0.4
Insurance 260,000 Tokio Marine & Fire Insurance
Co., Ltd. 3,242,469 3,062,242 0.6
Machinery & 350,000 Minebea Co., Ltd. 2,942,184 3,430,193 0.7
Engineering 500,000 Mitsubishi Heavy Industries Ltd. 3,654,177 3,602,132 0.7
------------ ------------ ------
6,596,361 7,032,325 1.4
Merchandising 80,000 Aoyama Trading Co. 3,433,890 2,489,684 0.5
60,000 Ito-Yokado Co., Ltd. 2,604,246 3,425,034 0.7
150,000 Marui Co., Ltd. 2,736,736 2,798,315 0.5
------------ ------------ ------
8,774,872 8,713,033 1.7
Metals 700,000 Nippon Steel Co. 2,407,627 2,052,098 0.4
Real Estate 250,000 Mitsui Fudosan Co., Ltd. 3,097,952 3,159,388 0.6
Telecommunications 350 DDI Corp. 2,617,101 2,614,770 0.5
800 Nippon Telephone & Telegraph Corp.
(Ordinary) 3,217,188 3,817,056 0.8
------------ ------------ ------
5,834,289 6,431,826 1.3
<PAGE>
Wholesale & 300,000 Mitsui & Co. 2,133,754 2,656,465 0.5
International Trade
Total Investments in Japan 75,710,265 86,173,087 16.7
Malaysia Banking 1,200,666 Commerce Asset-Holding BHD 1,409,468 3,488,919 0.7
390,216 Commerce Asset-Holding BHD
(Rights) (b) 0 76,469 0.0
------------ ------------ ------
1,409,468 3,565,388 0.7
Building Materials 1,000,000 Sungei Way Holdings BHD 2,085,002 2,268,928 0.4
Forest Products 1,500,000 Land & General BHD (Ordinary) 2,275,824 1,886,792 0.4
Multi-Industry 1,000,000 Sime Darby BHD 3,631,380 3,264,071 0.6
Telecommunications 300,000 Telekom Malaysia BHD 1,491,009 2,221,161 0.4
Total Investments in Malaysia 10,892,683 13,206,340 2.5
New Zealand Telecommunications 400,000 Telecom Corp. of New Zealand Ltd.
(Class C) (ADR)* 1,278,315 1,923,441 0.4
Total Investments in New Zealand 1,278,315 1,923,441 0.4
Singapore Banking 270,000 Overseas Chinese Banking Corp. 2,857,907 3,363,191 0.7
Broadcasting & 150,000 Singapore Press Holdings Limited 2,434,067 2,991,603 0.6
Publishing
Construction & 300,000 City Development Ltd. 2,010,983 2,792,162 0.5
Housing
Multi-Industry 300,000 Keppel Corp. Ltd. 1,813,685 1,385,584 0.3
75,000 ++Keppel Corp. Ltd. (Class A) 433,979 335,899 0.0
------------ ------------ ------
2,247,664 1,721,483 0.3
Total Investments in Singapore 9,550,621 10,868,439 2.1
South Korea Construction & Housing 783 ++Hyundai Engineering and
Construction Co. 19,277 18,222 0.0
Total Investments in South Korea 19,277 18,222 0.0
Thailand Banking 200,000 Bangkok Bank Public Company Ltd. 2,049,723 1,767,068 0.3
Building Materials 60,000 The Siam Cement Public Co. Ltd.
(Foreign Registered) 2,167,775 1,291,566 0.3
<PAGE>
Energy Sources 116,600 PTT Exploration and Production Public
Co. (PTTEP) 1,451,644 1,610,859 0.3
Telecommunications 500,000 Total Access Communication Public
Co Ltd. 3,156,250 2,350,000 0.5
Total Investments in Thailand 8,825,392 7,019,493 1.4
Total Investments in the Pacific
Basin/Asia 130,054,551 153,616,824 29.8
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<CAPTION>
WESTERN Shares Value Percent of
EUROPE Industries Held Investments Cost (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C>
Denmark Business & Public 150,000 ISS International Service
Services System A/S (Class B) $ 3,289,437 $ 4,990,066 1.0%
Total Investments in Denmark 3,289,437 4,990,066 1.0
Finland Telecommunications 95,600 Nokia OY AS 'A' 3,283,620 6,282,371 1.2
Total Investments in Finland 3,283,620 6,282,371 1.2
France Banking 46,000 Cetelem S.A. 4,689,077 4,919,402 0.9
Business & Public 80,000 ++Dassault Systemes S.A. 1,834,389 5,116,650 1.0
Services
Energy 60,000 Societe Nationale Elf Aquitane S.A. 5,819,442 6,000,624 1.2
Total Investments in France 12,342,908 16,036,676 3.1
Germany Merchandising 5,000 ++Metro AG 430,476 547,277 0.1
Multi-Industry 13,000 Mannesmann AG 4,413,693 5,282,201 1.0
210,000 SKW Trostberg AG 5,676,684 6,946,721 1.4
120,000 Veba AG 5,406,473 6,786,885 1.3
------------ ------------ ------
15,496,850 19,015,807 3.7
Recreation 30,000 Adidas AG 1,646,257 3,152,810 0.6
Total Investments in Germany 17,573,583 22,715,894 4.4
Ireland Airlines 49,500 ++Ryanair Holdings PLC (ADR)* 729,135 1,225,125 0.2
<PAGE>
Total Investments in Ireland 729,135 1,225,125 0.2
Italy Textiles 100,000 Gucci Group N.V. 7,049,549 6,975,000 1.4
Total Investments in Italy 7,049,549 6,975,000 1.4
Netherlands Business & Public 140,000 ++Baan Company N.V. 2,254,885 8,159,018 1.6
Services
Chemicals 41,000 Akzo Nobel N.V. 5,917,636 5,455,146 1.0
Electrical & 115,000 Philips Electronics N.V. 3,839,587 6,289,156 1.2
Electronics
Entertainment 80,000 ++Endemol Entertainment N.V. 2,568,075 2,060,568 0.4
Merchandising 73,528 Koninklijke Ahold N.V. 3,801,682 5,582,129 1.1
Total Investments in the Netherlands 18,381,865 27,546,017 5.3
Norway Automobiles 350,000 ++Sensonor A/S 2,732,359 2,285,815 0.4
Manufacturing 192,900 Tomra Systems ASA 1,840,703 4,416,110 0.9
Total Investments in Norway 4,573,062 6,701,925 1.3
Poland Food & Beverage 85,718 ++Agros Holdings S.A. 1,535,465 2,309,445 0.4
17,143 ++Agros Holdings S.A. (Series D) 391,393 375,943 0.1
Total Investments in Poland 1,926,858 2,685,388 0.5
Portugal Building Products 200,000 Cimpor--Cimentos de Portugal, S.A. 4,062,517 4,395,719 0.9
Total Investments in Portugal 4,062,517 4,395,719 0.9
Spain Banking 80,000 Banco Bilbao Vizcaya S.A. 3,101,947 5,665,284 1.1
Security Services 280,000 Prosegur Compania de Seguridad S.A. 2,824,163 3,659,751 0.7
Total Investments in Spain 5,926,110 9,325,035 1.8
Sweden Automobiles 120,000 ++Autoliv, Inc. 3,866,477 4,470,000 0.9
Total Investments in Sweden 3,866,477 4,470,000 0.9
Switzerland Health & Personal 1,000 Roche Holding Ltd. 5,320,796 8,887,319 1.7
Care
Total Investments in Switzerland 5,320,796 8,887,319 1.7
United Banking 400,000 The Royal Bank of Scotland Group PLC 4,064,759 3,938,525 0.8
Kingdom
<PAGE>
Business & Public 225,000 Capita Group PLC 899,906 938,425 0.2
Services
Electronics 1,550,000 Astec (BSR) PLC 2,653,912 3,714,039 0.7
Energy 404,575 British Petroleum Co. PLC 2,100,965 4,830,577 0.9
700,000 Enterprise Oil PLC 4,780,279 7,705,312 1.5
------------ ------------ ------
6,881,244 12,535,889 2.4
House Building 500,000 The Berkeley Group PLC 5,527,107 5,732,778 1.1
Merchandising 900,000 Harvey Nichols PLC 4,355,691 4,165,873 0.8
Multi-Industry 911,944 BBA Group PLC 5,114,591 4,981,863 1.0
399,999 ++Siebe PLC 4,107,799 6,293,773 1.2
------------ ------------ ------
9,222,390 11,275,636 2.2
Telecommunications 650,000 ++COLT Telecom Group PLC 3,081,009 2,976,792 0.6
Total Investments in the
United Kingdom 36,686,018 45,277,957 8.8
Total Investments in Western
Europe 125,011,935 167,514,492 32.5
SHORT-TERM Face
SECURITIES Amount Issue
United States Commercial Paper** $13,630,000 Associates Corp. of North
America, 5.60% due 6/02/1997 13,625,760 13,625,760 2.7
Total Investments in Short-Term
Securities 13,625,760 13,625,760 2.7
Total Investments $405,959,431 516,695,107 100.3
============
Liabilities in Excess of Other Assets (1,400,956) (0.3)
------------ ------
Net Assets $515,294,151 100.0%
============ ======
<FN>
*American Depositary Receipts (ADR).
**Commercial Paper is traded on a discount basis; the interest rates
shown are the discount rates paid at the time of purchase by the
Company.
(a)Warrants entitle the Company to purchase a predetermined number
of shares of common stock. The purchase price and number of shares
are subject to adjustment under conditions until the expiration
date.
(b)The rights may be exercised until June 13, 1997.
++Non-income producing security.
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF ASSETS AND LIABILITIES
As of May 31, 1997
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$405,959,431) (Note 1a) $516,695,107
Cash 36,391
Foreign cash (Note 1b) 424
Receivables:
Securities sold $ 1,361,004
Dividends 1,157,053
Capital shares sold 1,143,744
Interest 15,000 3,676,801
------------
Prepaid registration fees and other assets (Note 1f) 32,798
------------
Total assets 520,441,521
------------
Liabilities: Payables:
Securities purchased 2,864,874
Capital shares redeemed 1,499,054
Investment adviser (Note 2) 417,845
Distributor (Note 2) 75,581 4,857,354
------------
Accrued expenses and other liabilities 290,016
------------
Total liabilities 5,147,370
------------
Net Assets: Net assets $515,294,151
============
Net Assets Class A Shares of Common Stock, $0.10 par value, 100,000,000
Consist of: shares authorized $ 2,715,956
Class B Shares of Common Stock, $0.10 par value, 100,000,000
shares authorized 565,593
Class C Shares of Common Stock, $0.10 par value, 100,000,000
shares authorized 49,004
Class D Shares of Common Stock, $0.10 par value, 100,000,000
shares authorized 51,905
Paid-in capital in excess of par 385,008,829
Accumulated investment loss--net (1,302,675)
Undistributed realized capital gains on investments and foreign
currency transactions--net 17,472,844
Unrealized appreciation on investments and foreign currency
transactions--net 110,732,695
------------
Net assets $515,294,151
============
<PAGE>
Net Asset Class A--Based on net assets of $417,146,642 and 27,159,562
Value: shares outstanding $ 15.36
============
Class B--Based on net assets of $83,029,597 and 5,655,922
shares outstanding $ 14.68
============
Class C--Based on net assets of $7,177,455 and 490,039
shares outstanding $ 14.65
============
Class D--Based on net assets of $7,940,457 and 519,049
shares outstanding $ 15.30
============
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENT OF OPERATIONS
For the Six Months Ended May 31, 1997
<S> <S> <C> <C>
Investment Income Dividends (net of $451,948 foreign withholding tax) $ 3,034,513
(Notes 1d & 1e): Interest and discount earned 592,641
------------
Total income 3,627,154
------------
Expenses: Investment advisory fees (Note 2) $ 2,340,400
Transfer agent fees--Class A (Note 2) 363,912
Account maintenance and distribution fees--Class B (Note 2) 317,317
Custodian fees 131,904
Printing and shareholder reports 79,994
Transfer agent fees--Class B (Note 2) 67,218
Registration fees (Note 1f) 48,889
Accounting services (Note 2) 41,896
Professional fees 37,290
Account maintenance and distribution fees--Class C (Note 2) 20,911
Directors' fees and expenses 18,021
Account maintenance fees--Class D (Note 2) 7,664
Pricing fees 6,685
Transfer agent fees--Class D (Note 2) 5,614
Transfer agent fees--Class C (Note 2) 4,658
Other 9,094
------------
Total expenses 3,501,467
------------
Investment income--net 125,687
------------
<PAGE>
Realized & Realized gain (loss) from:
Unrealized Gain Investments--net 18,386,467
(Loss) on Foreign currency transactions--net (259,592) 18,126,875
Investments & ------------
Foreign Currency Change in unrealized appreciation/depreciation on:
Transactions--Net Investments--net 19,731,305
(Notes 1b, 1c, Foreign currency transactions--net 1,376 19,732,681
1e & 3): ------------ ------------
Net realized and unrealized gain on investments and foreign
currency transactions 37,859,556
------------
Net Increase in Net Assets Resulting from Operations $ 37,985,243
============
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
For the Six For the
Months Ended Year Ended
May 31, November 30,
Increase (Decrease) in Net Assets: 1997 1996
<S> <S> <C> <C>
Operations: Investment income--net $ 125,687 $ 3,358,903
Realized gain on investments and foreign currency
transactions--net 18,126,875 22,566,229
Change in unrealized appreciation/depreciation on investments
and foreign currency transactions--net 19,732,681 32,273,292
------------ ------------
Net increase in net assets resulting from operations 37,985,243 58,198,424
------------ ------------
Dividends & Investment income--net:
Distributions to Class A (3,228,520) --
Shareholders Class C (165) --
(Note 1g): Class D (27,086) --
Realized gain on investments--net:
Class A (20,709,718) (17,594,423)
Class B (2,278,771) (2,476,721)
Class C (49,977) (26,025)
Class D (245,755) (192,712)
------------ ------------
Net decrease in net assets resulting from dividends and
distributions to shareholders (26,539,992) (20,289,881)
------------ ------------
<PAGE>
Capital Share Net increase in net assets derived from capital share transactions 55,629,570 34,818,380
Transactions ------------ ------------
(Note 4):
Net Assets: Total increase in net assets 67,074,821 72,726,923
Beginning of period 448,219,330 375,492,407
------------ ------------
End of period* $515,294,151 $448,219,330
============ ============
<FN>
*Undistributed (accumulated) investment income (loss)--net $ (1,302,675) $ 1,827,409
============ ============
See Notes to Financial Statements.
</TABLE>
<TABLE>
FINANCIAL HIGHLIGHTS
<CAPTION>
The following per share data and ratios have Class A++
been derived from information provided in the For the Six
financial statements. Months Ended
May 31, For the Year Ended November 30,
Increase (Decrease) in Net Asset Value: 1997 1996 1995 1994 1993
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 15.12 $ 13.87 $ 12.82 $ 13.07 $ 11.78
Operating -------- -------- -------- -------- --------
Performance: Investment income--net .01 .13 .05 .03 .04
Realized and unrealized gain on investments
and foreign currency transactions--net 1.14 1.87 1.52 .53 2.07
-------- -------- -------- -------- --------
Total from investment operations 1.15 2.00 1.57 .56 2.11
-------- -------- -------- -------- --------
Less dividends and distributions:
Investment income--net (.12) -- (.01) (.01) --
Realized gain on investments--net (.79) (.75) (.51) (.80) (.82)
-------- -------- -------- -------- --------
Total dividends and distributions (.91) (.75) (.52) (.81) (.82)
-------- -------- -------- -------- --------
Net asset value, end of period $ 15.36 $ 15.12 $ 13.87 $ 12.82 $ 13.07
======== ======== ======== ======== ========
Total Investment Based on net asset value per share 8.22%+++ 15.20% 12.92% 4.39% 19.16%
Return:** ======== ======== ======== ======== ========
Ratios to Average Expenses 1.34%* 1.37% 1.51% 1.44% 1.43%
Net Assets: ======== ======== ======== ======== ========
Investment income--net .18%* .92% .41% .23% .32%
======== ======== ======== ======== ========
<PAGE>
Supplemental Net assets, end of period (in thousands) $417,147 $398,310 $327,270 $330,132 $256,203
Data: ======== ======== ======== ======== ========
Portfolio turnover 26.81% 41.14% 44.64% 40.18% 56.98%
======== ======== ======== ======== ========
Average commission rate paid++++ $ .0068 $ .0063 -- -- --
======== ======== ======== ======== ========
<FN>
*Annualized.
**Total investment returns exclude the effects of sales loads.
++Based on average shares outstanding during the period.
++++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. The "Average
Commission Rate Paid" includes commissions paid in foreign
currencies, which have been converted into US dollars using the
prevailing exchange rate on the date of the transaction. Such
conversions may significantly affect the rate shown.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
<TABLE>
FINANCIAL HIGHLIGHTS (concluded)
<CAPTION>
The following per share data and ratios have Class B++
been derived from information provided in the For the Six
financial statements. Months Ended
May 31, For the Year Ended November 30,
Increase (Decrease) in Net Asset Value: 1997 1996 1995 1994 1993
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 14.40 $ 13.38 $ 12.50 $ 12.74 $ 11.62
Operating -------- -------- -------- -------- --------
Performance: Investment loss--net (.05) (.02) (.08) (.10) (.08)
Realized and unrealized gain on investments
and foreign currency transactions--net 1.09 1.79 1.47 .52 2.02
-------- -------- -------- -------- --------
Total from investment operations 1.04 1.77 1.39 .42 1.94
-------- -------- -------- -------- --------
Less distributions from realized gain on
investments--net (.76) (.75) (.51) (.66) (.82)
-------- -------- -------- -------- --------
Net asset value, end of period $ 14.68 $ 14.40 $ 13.38 $ 12.50 $ 12.74
======== ======== ======== ======== ========
Total Investment Based on net asset value per share 7.70%+++ 13.97% 11.78% 3.32% 17.87%
Return:** ======== ======== ======== ======== ========
<PAGE>
Ratios to Average Expenses 2.37%* 2.40% 2.55% 2.48% 2.46%
Net Assets: ======== ======== ======== ======== ========
Investment loss--net (.69%)* (.11%) (.63%) (.80%) (.72%)
======== ======== ======== ======== ========
Supplemental Net assets, end of period (in thousands) $ 83,030 $ 44,311 $ 44,387 $ 49,647 $ 34,241
Data: ======== ======== ======== ======== ========
Portfolio turnover 26.81% 41.14% 44.64% 40.18% 56.98%
======== ======== ======== ======== ========
Average commission rate paid+++++ $ .0068 $ .0063 -- -- --
======== ======== ======== ======== ========
<CAPTION>
Class C++++
For the For the
Six Period
The following per share data and ratios have been derived Months Oct. 21,
from information provided in the financial statements. Ended For the Year 1994++ to
May 31, Ended November 30, Nov. 30,
Increase (Decrease) in Net Asset Value: 1997 1996 1995 1994
<S> <S> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 14.41 $ 13.38 $ 12.51 $ 13.08
Operating -------- -------- -------- --------
Performance: Investment loss--net (.04) (.01) (.08) (.02)
Realized and unrealized gain (loss) on investments
and foreign currency transactions--net 1.07 1.79 1.46 (.55)
-------- -------- -------- --------
Total from investment operations 1.03 1.78 1.38 (.57)
-------- -------- -------- --------
Less dividends and distributions from:
Investment income--net --(1) -- -- --
Realized gain on investments--net (.79) (.75) (.51) --
-------- -------- -------- --------
Total dividends and distributions (.79) (.75) (.51) --
-------- -------- -------- --------
Net asset value, end of period $ 14.65 $ 14.41 $ 13.38 $ 12.51
======== ======== ======== ========
Total Investment Based on net asset value per share 7.68%+++ 14.05% 11.69% (4.36%)+++
Return:** ======== ======== ======== ========
Ratios to Average Expenses 2.38%* 2.41% 2.55% 3.00%*
Net Assets: ======== ======== ======== ========
Investment loss--net (.49%)* (.09%) (.63%) (1.31%)*
======== ======== ======== ========
Supplemental Net assets, end of period (in thousands) $ 7,177 $ 910 $ 376 $ 177
Data: ======== ======== ======== ========
Portfolio turnover 26.81% 41.14% 44.64% 40.18%
======== ======== ======== ========
Average commission rate paid+++++ $ .0068 $ .0063 -- --
======== ======== ======== ========
<PAGE>
<CAPTION>
Class D++++
For the For the
Six Period
The following per share data and ratios have been derived Months Oct. 21,
from information provided in the financial statements. Ended For the Year 1994++ to
May 31, Ended November 30, Nov. 30,
Increase (Decrease) in Net Asset Value: 1997 1996 1995 1994
<S> <S> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 15.04 $ 13.84 $ 12.81 $ 13.39
Operating -------- -------- -------- --------
Performance: Investment income (loss)--net --(1) .09 .02 (.01)
Realized and unrealized gain (loss) on
investments and foreign currency transactions--net 1.14 1.86 1.52 (.57)
-------- -------- -------- --------
Total from investment operations 1.14 1.95 1.54 (.58)
-------- -------- -------- --------
Less dividends and distributions from:
Investment income--net (.09) -- --(1) --
Realized gain on investments--net (.79) (.75) (.51) --
-------- -------- -------- --------
Total dividends and distributions (.88) (.75) (.51) --
-------- -------- -------- --------
Net asset value, end of period $ 15.30 $ 15.04 $ 13.84 $ 12.81
======== ======== ======== ========
Total Investment Based on net asset value per share 8.13%+++ 14.86% 12.73% (4.33%)+++
Return:** ======== ======== ======== ========
Ratios to Average Expenses 1.59%* 1.63% 1.76% 2.23%*
Net Assets: ======== ======== ======== ========
Investment income (loss)--net .05%* .60% .18% (.67%)*
======== ======== ======== ========
Supplemental Net assets, end of period (in thousands) $ 7,940 $ 4,688 $ 3,459 $ 1,591
Data: ======== ======== ======== ========
Portfolio turnover 26.81% 41.14% 44.64% 40.18%
======== ======== ======== ========
Average commission rate paid+++++ $ .0068 $ .0063 -- --
======== ======== ======== ========
<FN>
*Annualized.
**Total investment returns exclude the effects 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. The "Average
Commission Rate Paid" includes commissions paid in foreign
currencies, which have been converted into US dollars using the
prevailing exchange rate on the date of the transaction. Such
conversions may significantly affect the rate shown.
(1)Amount is less than $.01 per share.
See Notes to Financial Statements.
</TABLE>
<PAGE>
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.
(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 options 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.
<PAGE>
(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.
* 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.
<PAGE>
* 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.
(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 dates. Dividends from foreign securities where the ex-
dividend date may have passed are subsequently recorded when the
Company has determined 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.
<PAGE>
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.
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.
For the six months ended May 31, 1997, 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 $599 $8,929
Class D $ 73 $1,196
For the six months ended May 31, 1997, MLPF&S received contingent
deferred sales charges of $198,977 and $887 relating to transactions
in Class B and Class C Shares, respectively.
In addition, MLPF&S received $81,769 in commissions on the execution
of portfolio security transactions for the Company for the six
months ended May 31, 1997.
Merrill Lynch Financial Data Services, Inc. ("MLFDS"), a wholly-
owned subsidiary of ML & Co., acts as the Company's transfer agent.
<PAGE>
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, MLFDS, MLFD, and/or ML & Co.
NOTES TO FINANCIAL STATEMENTS (concluded)
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the six months ended May 31, 1997 were $178,700,874 and
$120,867,807, respectively.
Net realized and unrealized gains (losses) as of May 31, 1997 were
as follows:
Realized Unrealized
Gains Gains
(Losses) (Losses)
Long-term investments $ 18,388,212 $110,735,676
Short-term investments (1,745) --
Foreign currency transactions (259,592) (2,981)
------------ ------------
Total $ 18,126,875 $110,732,695
============ ============
As of May 31, 1997, net unrealized appreciation for Federal income
tax purposes aggregated $110,735,676, of which $127,071,602 related
to appreciated securities and $16,335,926 related to depreciated
securities. The aggregate cost of investments at May 31, 1997 for
Federal income tax purposes was $405,959,431.
4. Capital Share Transactions:
A net increase in net assets derived from capital share transactions
was $55,629,570 and $34,818,380 for the six months ended May 31,
1997 and for the year ended November 30, 1996, respectively.
Transactions in capital shares for each class were as follows:
Class A Shares for the Six Months Dollar
Ended May 31, 1997 Shares Amount
<PAGE>
Shares sold 7,575,218 $ 109,390,806
Shares issued to shareholders
in reinvestment of dividends
and distributions 1,586,229 22,175,485
------------- -------------
Total issued 9,161,447 131,566,291
Shares redeemed (8,348,645) (120,356,476)
------------- -------------
Net increase 812,802 $ 11,209,815
============= =============
Class A Shares for the Year Dollar
Ended November 30, 1996 Shares Amount
Shares sold 11,176,887 $ 157,434,230
Shares issued to shareholders
in reinvestment of
distributions 1,233,289 16,242,414
------------- -------------
Total issued 12,410,176 173,676,644
Shares redeemed (9,655,805) (136,577,975)
------------- -------------
Net increase 2,754,371 $ 37,098,669
============= =============
Class B Shares for the Six Months Dollar
Ended May 31, 1997 Shares Amount
Shares sold 3,878,752 $ 53,633,256
Shares issued to shareholders
in reinvestment of
distributions 148,413 1,993,179
------------- -------------
Total issued 4,027,165 55,626,435
Automatic conversion of shares (33,084) (457,197)
Shares redeemed (1,414,287) (19,541,948)
------------- -------------
Net increase 2,579,794 $ 35,627,290
============= =============
<PAGE>
Class B Shares for the Year Dollar
Ended November 30, 1996 Shares Amount
Shares sold 617,667 $ 8,295,124
Shares issued to shareholders
in reinvestment of
distributions 174,046 2,205,170
------------- -------------
Total issued 791,713 10,500,294
Automatic conversion of shares (20,731) (275,360)
Shares redeemed (1,011,647) (13,729,276)
------------- -------------
Net decrease (240,665) $ (3,504,342)
============= =============
Class C Shares for the Six Months Dollar
Ended May 31, 1997 Shares Amount
Shares sold 561,157 $ 7,743,831
Shares issued to shareholders
in reinvestment of dividends
and distributions 3,548 47,542
------------- -------------
Total issued 564,705 7,791,373
Shares redeemed (137,863) (1,888,043)
------------- -------------
Net increase 426,842 $ 5,903,330
============= =============
Class C Shares for the Year Dollar
Ended November 30, 1996 Shares Amount
Shares sold 54,247 $ 725,543
Shares issued to shareholders in
reinvestment of distributions 1,898 24,054
------------- -------------
Total issued 56,145 749,597
Shares redeemed (21,017) (286,099)
------------- -------------
Net increase 35,128 $ 463,498
============= =============
<PAGE>
Class D Shares for the Six Months Dollar
Ended May 31, 1997 Shares Amount
Shares sold 540,129 $ 7,837,664
Shares issued to shareholders in
reinvestment of dividends and
distributions 18,140 252,873
Automatic conversion of shares 31,800 457,197
------------- -------------
Total issued 590,069 8,547,734
Shares redeemed (382,669) (5,658,599)
------------- -------------
Net increase 207,400 $ 2,889,135
============= =============
Class D Shares for the Year Dollar
Ended November 30, 1996 Shares Amount
Shares sold 1,072,031 $ 14,751,733
Shares issued to shareholders in
reinvestment of distributions 13,662 179,386
Automatic conversion of shares 19,948 275,360
------------- -------------
Total issued 1,105,641 15,206,479
Shares redeemed (1,043,928) (14,445,924)
------------- -------------
Net increase 61,713 $ 760,555
============= =============
5. Commitments:
On May 31, 1997, the Company had entered into foreign exchange
contracts under which it had agreed to purchase and sell various
foreign currencies with approximate values of $2,044,000 and
$1,137,000, respectively.
PORTFOLIO CHANGES
For the Quarter Ended May 31, 1997
<PAGE>
Additions
Agros Holdings S.A. (Series D)
Banco de Galicia y Buenos Aires S.A.
de C.V. (ADR)
Banco Latinoamericano de
Exportaciones, S.A. (E Shares)
Beijing Enterprises Holdings Ltd.
Capita Group PLC
Cisco Systems, Inc.
Commerce Asset-Holding BHD (Rights)
*Docdata N.V.
Endemol Entertainment N.V.
Gucci Group N.V.
Keppel Corp. Ltd. (Class A)
Land & General BHD (Ordinary)
McDonald's Corp.
PETsMART, Inc.
PTT Exploration and Production
Public Co. (PTTEP)
The Royal Bank of Scotland Group PLC
Ryanair Holdings PLC (ADR)
*SK Telecom
Societe Nationale Elf Aquitane S.A.
US Filter Corp.
Deletions
Airtouch Communications, Inc.
Almacenes Exito S.A.
Asahi Chemical Industry Co.
Astra AB 'B'
BE Semiconductor Industries N.V.
(NY Shares)
BIC S.A.
Christian Dior S.A.
*Docdata N.V.
Larsen & Toubro Ltd. (GDR)
Mirage Resorts, Inc.
National Australia Bank, Ltd.
Panamerican Beverages, Inc. (Class A)
Pohang Iron & Steel Co., Ltd. (ADR)
*SK Telecom
Sydney Harbour Casino Holdings Ltd.
(Preferred)
Total S.A. (Class B)
Uniao de Bancos Brasileiros S.A. (Preferred)
<PAGE>
[FN]
*Added and deleted in the same quarter.
