MERRILL LYNCH
GLOBAL
HOLDINGS, INC.
FUND LOGO
Quarterly Report
February 28, 1999
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.
Officers and
Directors
Terry K. Glenn, President and Director
Donald Cecil, Director
Roland M. Machold, Director
Edward H. Meyer, Director
Charles C. Reilly, Director
Richard R. West, Director
Arthur Zeikel, Director
Edward D. Zinbarg, Director
Lawrence R. Fuller, Senior Vice President and
Portfolio Manager
Philip L. Kirstein, Senior Vice President
Donald C. Burke, Vice President and Treasurer
Philip M. Mandel, Secretary
Custodian
The Chase Manhattan Bank, N.A.
Global Securities Services
4 Chase MetroTech Center, 18th Floor
Brooklyn, NY 11245
Transfer Agent
Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 637-3863
Gerald M. Richard, Treasurer and Norman R. Harvey, Senior Vice
President of Merrill Lynch Global Holdings, Inc. have recently
retired. Their colleagues at Merrill Lynch Asset Management, L.P.
join the Fund's Board of Directors in wishing Mr. Richard and Mr.
Harvey well in their retirements.
Merrill Lynch Global Holdings, Inc., February 28, 1999
DEAR SHAREHOLDER
For the quarter ended February 28, 1999, total returns for Merrill
Lynch Global Holdings, Inc. Class A, Class B, Class C and Class D
Shares were +7.66%, +7.34%, +7.38% and +7.55%, respectively. The
total return for the unmanaged Morgan Stanley Capital International
(MSCI) World Stock Index was +4.29% (in US dollar terms) for the
same three-month period. (Fund results shown do not reflect sales
charges and would be lower if sales charges were included. For
complete performance information, see pages 4 and 5 of this report
to shareholders.)
During the February quarter, the positive outperformance of the fund
compared to the MSCI World Stock Index can be attributed to the
price appreciation of equity holdings in the telecommunications,
retailing and banking industries. In addition, among the fund's top
ten equity holdings at the end of the February quarter, five had
positive returns well in excess of the total investment return for
the MSCI World Stock Index, including net dividends reinvested.
The Environment
As we had anticipated at the beginning of the February quarter, the
US economy appears to have experienced the strongest absolute and
relative real economic growth among the leading industrialized
nations at the start of 1999. US corporate profits were above year-
ago levels in the fourth quarter of 1998. The recent increase in US
long-term interest rates seems to be reducing the volume of
residential mortgage financing and may decrease the level of
consumer spending on housing and related appliances. In addition,
the year-to-year growth in average hourly earnings of US workers is
slowing down and may reflect the continuing rise in unemployment in
the manufacturing sector caused by lower-priced imported goods.
However, we believe that the growth in real and nominal consumer
spending during the remainder of 1999 may continue to be the
strongest part of the US economy.
Recent economic reports for the United Kingdom and the leading
countries of Western Europe support our view that it is increasingly
likely that these economies will slide into a recession during the
first half of 1999. Official government reports from Germany show
that its economy experienced an absolute decline in business
activity during the fourth quarter of 1998. The apparent
continuation of declining export shipments to Asia and the related
increases in manufacturing unemployment is hurting the overall
European economies more significantly than the US economy. The real
growth in consumer spending in the United States and market share
gains by producers of basic materials, technology components and
transportation vehicles in Asia have been reflected in recoveries in
business activity for export producers in many Asian countries.
However, there does not appear to be a general recovery in consumer
spending in the major Asian economies. In Latin America, the
implementation of government spending cuts and of collected tax
increases in Brazil has a good chance of reducing levels of business
activity in the major economies in the region.
Our expectations for a slowdown in the rates of real growth in the
United States and the other major economies around the world, at
least during the first half of 1999, led us to continue with a
strategy that focuses on the banking and financial,
telecommunications, insurance and pharmaceutical industries. The
total investment weighting in these industries was equal to over 50%
of the fund's net assets by the end of the February quarter. In our
opinion, we could have a prolonged manufacturing recession in the
United States and Europe, comparable to the one experienced during
the early 1980s. However, we believe that there are many attractive
investment opportunities among companies in industries where
proprietary and branded products and services make the investment
outlook attractive. Relatively low inflation and interest rates in
the United States, along with continued growth in employment in the
service sectors, creates an opportunity for higher corporate
profits. A continuation of easier money policies by the central
banks around the world, combined with more stimulative fiscal
policies in the form of consumer income tax reductions, would create
an attractive secular outlook for equities, in our opinion.
Investment Strategy
Throughout the February quarter, we remained focused on companies
and industries whose earnings will continue to increase during a
major slowdown in the overall rate of growth in real and nominal
business activity in the major industrialized economies. During the
quarter, we eliminated fourteen holdings, including four companies
in Japan. In the banking industry, we eliminated holdings in The
Bank of New York Company, Inc., Northern Trust Corporation and
Wachovia Corporation. We eliminated Cimpor-Cimentos de Portugal,
SGPS, SA from the portfolio because of our concerns about the
continued deterioration in real economic growth prospects over the
next few years. In the electrical equipment industry, we sold our
holdings in Matsushita Electric Industrial Company, Ltd. and
Sumitomo Electric Industries because of an unpromising outlook for
capital spending in the Japanese economy for the near future.
Overall capital spending is now projected to decline substantially
during the upcoming fiscal year and several companies, including
Nippon Telephone & Telegraph Corporation, have announced major
cutbacks in capital spending. We also sold our holdings in Keyence
Corporation and Murata Manufacturing Co., Ltd. in Japan because of
the deteriorating outlook for the Japanese economy over the next
year.
During the quarter ended February 28, 1999, we added several
investment holdings to the fund. In the financial services industry,
we added Federal Home Loan Mortgage Corporation, Federal National
Mortgage Association, Franklin Resources, Inc. and T. Rowe Price
Associates, Inc. We believe that these corporations will produce
above-average growth in earnings over the next five years and
represent excellent potential investment returns relative to the
fundamental risks of their businesses of residential mortgage
finance and financial asset management. We added investment holdings
in Allied Irish Banks PLC, Bank One Corporation, Banca di Roma,
Barclays PLC, Citigroup Inc., Commerzbank AG, Dresdner Bank AG and
Mellon Bank Corporation. We also added The Interpublic Group of
Companies, Inc. in the advertising industry because we believe that
the company is an excellent long-term investment whose management
has demonstrated an excellent ability to deal with a changing global
environment while producing improving rates-of-return and growth in
earnings over the long term.
During the February quarter, we purchased shares of Infinity
Broadcasting Corp. for its excellent long-term record of the
management of this major radio broadcasting network at growing
investment cash flow as well as revenues at an above-average rate.
We added E.I. du Pont de Nemours and Company to the portfolio
because of its attractive valuation and management's shift from
specialty chemicals and energy to life sciences as well as specialty
fibers, which should improve the rate of earnings growth to an above-
average level as well as improve the investment rates-of-return and
stock valuation ratio. In the computer industry, we added
International Business Machines Corporation to the portfolio because
of the shift of the majority of revenues and profits to management
and consulting services and software as a result of the
restructuring over the past five years. We also added Minnesota
Mining and Manufacturing Company (3M) for its attractive valuation
and the potential for an acceleration in the rate of growth of
earnings and improved rates of return as a result of a global
restructuring of the corporation. In the household products
industry, we added Kimberly-Clark Corporation and The Procter &
Gamble Company, where we believe the valuations are attractive and
the rate of growth in earnings could be above-average over the next
five years.
In the information processing industry, we added America Online,
Inc., because we believe it will continue to produce a relatively
rapid rate of growth in new subscribers and related revenue as well
as an accelerating rate of growth of advertising and merchandising
revenue with a relatively modest increment in fixed and marginal
costs. We added a significant number of new companies in the
insurance industry, including AEGON NV, Aetna Inc., Allianz AG,
Assicurazioni Generali, Axa-UAP, CGU PLC, Istituto Nazionale delle
Assicurazioni (INA), ING Groep NV and Zurich Allied AG. In the
pharmaceutical industry, we added investment holdings in Glaxo
Wellcome PLC, Novartis AG, SmithKline Beecham PLC and Zeneca Group
PLC. We believe that the valuations of these companies are
attractive relative to the prospects for improved rates of return
over the next five years from a combination of new products and
better operational cost structures from restructurings and mergers.
Merrill Lynch Global Holdings, Inc., February 28, 1999
During the February quarter, we meaningfully reduced the portfolio's
investment weighting in several of the largest holdings in the
technology sector and retailing industry in the United States as a
result of what we believed were relatively high stock valuations. We
shifted the investment funds into companies in the banking,
telecommunications and pharmaceutical industries. We added Carnival
Corporation, a leading cruise travel organization, to the portfolio
because of its attractive valuation relative to the long-term
prospects for earnings growth.
In Conclusion
We continue to believe that the US equity market will produce the
best relative investment performance among the major global stock
markets during 1999. We will remain committed to our focus on
investments in the larger, higher-quality companies that we believe
possess above-average earnings potential and cash flow growth. We
thank you for your investment in Merrill Lynch Global Holdings,
Inc., and we look forward to reviewing our outlook and strategy in
our next report to shareholders.
Sincerely,
(Terry K. Glenn)
Terry K. Glenn
President and Director
(Lawrence R. Fuller)
Lawrence R. Fuller
Senior Vice President and
Portfolio Manager
April 5, 1999
After more than 20 years of service, Arthur Zeikel recently retired
as Chairman of Merrill Lynch Asset Management, L.P. (MLAM). Mr.
Zeikel served as President of MLAM from 1977 to 1997 and as Chairman
since December 1997. Mr. Zeikel is one of the country's most
respected leaders in asset management and presided over the growth
of Merrill Lynch's asset management business. During his tenure,
client assets under management grew from $300 million to over $500
billion. Mr. Zeikel will remain on Merrill Lynch Global Holdings,
Inc.'s Board of Directors. We are pleased to announce that Terry K.
Glenn has been elected President and Director of the Fund. Mr. Glenn
has held the position of Executive Vice President of MLAM since
1983.
Mr. Zeikel's colleagues at MLAM join the Fund's Board of Directors
in wishing him well in his retirement from Merrill Lynch and are
pleased that he will continue as a member of the Fund's Board of
Directors.
Merrill Lynch Global Holdings, Inc., February 28, 1999
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.)
* 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 "Recent Performance
Results" and "Average Annual Total Return" tables assume
reinvestment of all dividends and capital gains distributions at net
asset value on the ex-dividend date. Investment return and principal
value of shares will fluctuate so that shares, when redeemed, may be
worth more or less than their original cost. Dividends paid to each
class of shares will vary because of the different levels of account
maintenance, distribution and transfer agency fees applicable to
each class, which are deducted from the income available to be paid
to shareholders.
<TABLE>
Recent
Performance
Results
<CAPTION>
Ten Years/
12 Month 3 Month Since Inception
Total Return Total Return Total Return
<S> <C> <C> <C>
ML Global Holdings, Inc. Class A Shares* +10.35% +7.66% +170.47%
ML Global Holdings, Inc. Class B Shares* + 9.21 +7.34 +144.08
ML Global Holdings, Inc. Class C Shares* + 9.18 +7.38 + 51.33
ML Global Holdings, Inc. Class D Shares* +10.11 +7.55 + 56.73
World Stock Index** +12.71 +4.29 +166.05/+89.31
<FN>
*Investment results shown do not reflect sales charges; results
shown would be lower if a sales charge was included. Total
investment returns are based on changes in net asset values for the
periods shown, and assume reinvestment of all dividends and capital
gains distributions at net asset value on the ex-dividend date. The
Company's ten-year/since inception periods are Class A & Class B
Shares, for the ten years ended 2/28/99 and Class C & Class D Shares,
from 10/21/94 to 2/28/99.
**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. Ten-year/since
inception total returns are for the ten years ended 2/28/99 and
from 10/31/94 to 2/28/99, respectively.
</TABLE>
Average Annual
Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 12/31/98 +18.63% +12.40%
Five Years Ended 12/31/98 + 9.76 + 8.58
Ten Years Ended 12/31/98 +10.47 + 9.88
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 12/31/98 +17.34% +13.35%
Five Years Ended 12/31/98 + 8.62 + 8.62
Ten Years Ended 12/31/98 + 9.34 + 9.34
[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 12/31/98 +17.34% +16.35%
Inception (10/21/94) through 12/31/98 +10.07 +10.07
[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 12/31/98 +18.22% +12.02%
Inception (10/21/94) through 12/31/98 +10.95 + 9.53
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
Merrill Lynch Global Holdings, Inc., February 28, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (in US dollars)
<CAPTION>
LATIN Shares Percent of
AMERICA Industries Held Investments Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
Brazil Telecommunications 30,000,000 Embratel Participacoes SA (Preferred) $ 347,556 $ 405,797 0.2%
30,000,000 Tele Centro Oeste Celular
Participacoes SA (Preferred) 17,378 25,217 0.0
30,000,000 Tele Centro Sul Participacoes SA
(Preferred) 260,667 236,232 0.1
30,000,000 Tele Leste Celular Participacoes SA
(Preferred) 21,722 12,464 0.0
30,000,000 Tele Nordeste Celular Participacoes
SA (Preferred) 11,296 21,739 0.0
30,000,000 Tele Norte Celular Participacoes SA
(Preferred) 17,378 13,913 0.0
30,000,000 Tele Sudeste Celular Participacoes SA
(Preferred) 78,200 78,261 0.0
30,000,000 Telecomunicacoes Brasileiras SA--
Telebras (Preferred) 10,427 4,058 0.0
30,000,000 Telesp Celular Participacoes SA
(Preferred) 341,039 250,725 0.1
30,000,000 Telesp Participacoes SA (Preferred) 821,536 492,754 0.2
Total Investments in Latin America 1,927,199 1,541,160 0.6
NORTH
AMERICA
Canada Communications 20,000 Northern Telecom Limited (Nortel) 294,975 1,161,250 0.4
Equipment
Telecommunications 50,000 MetroNet Communications Corp. 'B' 1,450,921 2,168,750 0.8
Total Investments in Canada 1,745,896 3,330,000 1.2
United Advertising 15,000 The Interpublic Group of
States Companies, Inc. 1,126,680 1,122,188 0.4
Banking & 63,000 Bank One Corporation 3,181,193 3,386,250 1.3
Financial 57,000 BankAmerica Corporation 3,675,902 3,722,812 1.4
50,000 Citigroup Inc. 2,774,253 2,937,500 1.1
35,000 Mellon Bank Corporation 2,347,100 2,366,875 0.9
------------ ------------ ------
11,978,448 12,413,437 4.7
Broadcasting/ 25,000 CBS Corporation 630,560 921,875 0.3
Radio & Television 26,000 Chancellor Media Corporation 937,761 1,137,500 0.4
20,000 Clear Channel Communications, Inc. 813,182 1,200,000 0.5
30,000 Infinity Broadcasting Corp.
(Class A) 849,300 712,500 0.3
------------ ------------ ------
3,230,803 3,971,875 1.5
Chemicals 48,000 E.I. du Pont de Nemours and Company 2,633,354 2,463,000 0.9
Communications 82,000 Cisco Systems, Inc. 1,734,414 8,020,625 3.0
Equipment
Computers 95,000 Compaq Computer Corporation 3,537,033 3,348,750 1.3
15,000 Dell Computer Corporation 616,510 1,200,937 0.4
17,000 International Business Machines
Corporation 3,184,313 2,890,000 1.1
------------ ------------ ------
7,337,856 7,439,687 2.8
Cosmetics 13,000 The Gillette Company 567,124 697,125 0.3
Diversified 70,000 Minnesota Mining and Manufacturing
Company (3M) 5,373,682 5,184,375 2.0
Electrical 52,000 General Electric Company 5,243,352 5,216,250 2.0
Equipment
Electronics 11,000 Intel Corporation 304,563 1,319,312 0.5
10,000 Texas Instruments Incorporated 242,800 891,875 0.3
------------ ------------ ------
547,363 2,211,187 0.8
Entertainment 50,000 The Walt Disney Company 1,740,385 1,759,375 0.7
Financial Services 12,000 Federal Home Loan Mortgage Corporation 740,802 706,500 0.3
35,000 Federal National Mortgage Association 2,459,472 2,450,000 0.9
15,000 Franklin Resources, Inc. 547,462 477,187 0.2
5,000 T. Rowe Price Associates, Inc. 188,242 153,438 0.0
------------ ------------ ------
3,935,978 3,787,125 1.4
Food Merchandising 14,000 Safeway Inc. 767,402 808,500 0.3
Household Products 27,000 Kimberly-Clark Corporation 1,370,502 1,275,750 0.5
40,000 The Procter & Gamble Company 3,681,508 3,580,000 1.3
------------ ------------ ------
5,052,010 4,855,750 1.8
Information 30,000 America Online, Inc. 2,283,087 2,668,125 1.0
Processing
Insurance 10,000 Aetna Inc. 834,263 740,625 0.3
35,000 American International Group, Inc. 3,121,356 3,987,812 1.5
------------ ------------ ------
3,955,619 4,728,437 1.8
Medical Technology 13,000 Boston Scientific Corporation 306,631 344,500 0.2
50,000 Johnson & Johnson 2,709,250 4,268,750 1.6
------------ ------------ ------
3,015,881 4,613,250 1.8
Pharmaceuticals 40,000 Bristol-Myers Squibb Company 4,400,234 5,037,500 1.9
74,000 Merck & Co., Inc. 4,989,548 6,049,500 2.3
45,000 Pfizer Inc. 1,437,756 5,937,188 2.2
------------ ------------ ------
10,827,538 17,024,188 6.4
Restaurants 20,000 McDonald's Corporation 1,351,190 1,700,000 0.6
Retail Specialty 12,500 Abercrombie & Fitch Co. (Class A) 603,875 950,000 0.4
45,000 CVS Corporation 1,223,180 2,385,000 0.9
10,500 The Gap, Inc. 440,636 679,219 0.2
30,340 Lowe's Companies, Inc. 1,641,418 1,799,541 0.7
91,000 Staples, Inc. 2,035,415 2,667,438 1.0
40,000 Walgreen Co. 1,137,900 1,280,000 0.5
------------ ------------ ------
7,082,424 9,761,198 3.7
Retail Stores 20,000 The TJX Companies, Inc. 594,643 571,250 0.2
Semiconductors 17,000 Applied Materials, Inc. 515,845 945,625 0.4
Software--Computer 12,000 Microsoft Corporation 1,090,800 1,800,750 0.7
Telecommunications 45,000 AT&T Corp. 3,748,428 3,695,625 1.4
57,000 GTE Corporation 3,253,476 3,697,875 1.4
45,000 MCI WorldCom Inc. 3,352,500 3,712,500 1.4
50,000 Sprint Corp. (PCS Group) 1,156,413 1,600,000 0.6
45,000 Sprint Corporation 2,831,576 3,861,563 1.5
------------ ------------ ------
14,342,393 16,567,563 6.3
Travel & Lodging 42,000 Carnival Corporation 1,880,142 1,869,000 0.7
Total Investments in the
United States 98,208,413 122,199,885 46.2
Total Investments in North America 99,954,309 125,529,885 47.4
</TABLE>
Merrill Lynch Global Holdings, Inc., February 28, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
PACIFIC Shares Percent of
BASIN/ASIA Industries Held Investments Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
Australia Broadcasting & 100,000 The News Corporation Limited $ 708,451 $ 701,278 0.3%
Publishing
Total Investments in Australia 708,451 701,278 0.3
Hong Kong Multi-Industry 400,000 Hutchison Whampoa Limited 1,949,838 2,775,089 1.0
Total Investments in Hong Kong 1,949,838 2,775,089 1.0
Japan Leisure 10,000 Sony Corporation 847,524 757,039 0.3
Photography 100,000 Canon, Inc. 1,758,792 2,141,292 0.8
Retail Stores 40,000 Ito-Yokado Co., Ltd. 1,760,352 2,333,502 0.9
Telecommunications 400 Nippon Telegraph & Telephone
Corporation (NTT) 3,217,188 3,297,926 1.2
Total Investments in Japan 7,583,856 8,529,759 3.2
Total Investments in the Pacific
Basin/Asia 10,242,145 12,006,126 4.5
WESTERN
EUROPE
Finland Communications 7,000 Nokia Oyj 'A' 196,985 953,956 0.4
Equipment
Total Investments in Finland 196,985 953,956 0.4
France Electrical Equipment 10,000 Alstom 340,815 273,327 0.1
Electronics 5,000 STMicroelectronics NV (NY Registered
Shares) 290,926 436,875 0.2
Food 3,000 Danone 713,873 747,204 0.3
Information 10,000 Cap Gemini SA 1,053,374 1,728,878 0.6
Processing
Insurance 20,000 Axa-UAP 2,689,377 2,608,135 1.0
Total Investments in France 5,088,365 5,794,419 2.2
Germany Banking & Financial 70,000 Commerzbank AG 2,004,376 1,967,078 0.7
70,000 Deutsche Bank AG 4,697,032 3,653,694 1.4
60,000 Dresdner Bank AG 2,280,538 2,087,825 0.8
------------ ------------ ------
8,981,946 7,708,597 2.9
Insurance 8,000 Allianz AG (Registered Shares) 2,592,616 2,424,600 0.9
Multi-Industry 13,000 Mannesmann AG 1,155,677 1,745,233 0.7
110,000 VEBA AG 5,056,239 5,868,304 2.2
------------ ------------ ------
6,211,916 7,613,537 2.9
Retail Stores 40,000 Metro AG 2,276,637 2,827,675 1.1
Software--Computer 14,000 SAP AG (Systeme, Anwendungen,
Produkte in der Datenverarbeitung)
(Preferred) 6,083,300 5,286,523 2.0
Total Investments in Germany 26,146,415 25,860,932 9.8
Ireland Banking & Financial 150,000 Allied Irish Banks PLC 2,717,716 2,599,721 1.0
Total Investments in Ireland 2,717,716 2,599,721 1.0
Italy Banking & Financial 515,000 Banca di Roma 748,050 746,216 0.3
Insurance 80,000 Assicurazioni Generali 3,170,802 3,091,123 1.2
450,000 Istituto Nazionale delle Assicurazioni
(INA) 1,038,639 1,091,663 0.4
------------ ------------ ------
4,209,441 4,182,786 1.6
Total Investments in Italy 4,957,491 4,929,002 1.9
Netherlands Insurance 45,700 AEGON NV 5,110,216 4,770,681 1.8
48,000 ING Groep NV 2,656,337 2,687,170 1.0
------------ ------------ ------
7,766,553 7,457,851 2.8
Leisure 10,000 Koninklijke (Royal) Philips
Electronics NV 295,300 697,040 0.3
Software--Computer 10,000 Baan Company, NV 116,946 95,500 0.0
Telecommunications 52,200 Equant 1,950,528 3,764,606 1.4
Total Investments in the Netherlands 10,129,327 12,014,997 4.5
Switzerland Food 1,366 Nestle SA (Registered Shares) 2,459,614 2,578,693 1.0
Insurance 3,525 Zurich Allied AG 2,424,159 2,340,592 0.9
Pharmaceuticals 2,055 Novartis AG (Registered Shares) 3,692,058 3,605,612 1.3
Total Investments in Switzerland 8,575,831 8,524,897 3.2
United Banking & Financial 140,000 Barclays PLC 3,609,402 3,736,038 1.4
Kingdom 285,000 Lloyds TSB Group PLC 3,984,525 4,083,509 1.5
385,000 National Westminster Bank PLC 7,320,642 7,967,674 3.0
500,000 Royal Bank of Scotland Group PLC 5,132,385 9,754,962 3.7
------------ ------------ ------
20,046,954 25,542,183 9.6
Electrical 100,000 BTR Siebe PLC 372,866 421,674 0.2
Equipment
Insurance 85,000 CGU PLC 1,270,984 1,251,927 0.5
500,000 Royal & Sun Alliance Insurance
Group PLC 6,672,402 4,224,748 1.6
------------ ------------ ------
7,943,386 5,476,675 2.1
Pharmaceuticals 115,000 Glaxo Wellcome PLC 3,758,190 3,667,561 1.4
115,000 SmithKline Beecham PLC 1,577,426 1,619,180 0.6
58,000 Zeneca Group PLC 2,423,115 2,411,798 0.9
------------ ------------ ------
7,758,731 7,698,539 2.9
Telecommunications 424,000 COLT Telecom Group PLC 5,096,200 7,861,314 3.0
45,000 Energis PLC 1,322,355 1,077,611 0.4
500,000 Vodafone Group PLC 9,226,166 9,170,305 3.4
------------ ------------ ------
15,644,721 18,109,230 6.8
Total Investments in the United
Kingdom 51,766,658 57,248,301 21.6
Total Investments in Western Europe 109,578,788 117,926,225 44.6
</TABLE>
Merrill Lynch Global Holdings, Inc., February 28, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<CAPTION>
SHORT-TERM Face Percent of
SECURITIES Amount Issue Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
Commercial $6,909,000 General Motors Acceptance Corp.,
Paper* 4.88% due 3/01/1999 $ 6,907,127 $ 6,907,127 2.6%
4,275,000 Sara Lee Corporation, 4.77% due
3/01/1999 4,273,867 4,273,867 1.6
Total Investments in Short-Term
Securities 11,180,994 11,180,994 4.2
Total Investments $232,883,435 268,184,390 101.3
============
Liabilities in Excess of Other Assets (3,486,722) (1.3)
------------ ------
Net Assets $264,697,668 100.0%
============ ======
Net Asset Value: Class A--Based on net assets of $232,876,275 and
17,149,104 shares outstanding $ 13.58
============
Class B--Based on net assets of $22,723,518 and
1,788,969 shares outstanding $ 12.70
============
Class C--Based on net assets of $1,049,489 and 83,092
shares outstanding $ 12.63
============
Class D--Based on net assets of $8,048,386 and 596,976
shares outstanding $ 13.48
============
<FN>
*Commercial Paper is traded on a discount basis; the interest rates
shown reflect the discount rates paid at the time of purchase by the
Company.
</TABLE>
PORTFOLIO INFORMATION
Worldwide Investments
As of 2/28/99
Percent of
Ten Largest Industries Net Assets
Banking & Financial 18.5%
Telecommunications 17.1
Insurance 11.1
Pharmaceuticals 10.6
Multi-Industry 3.9
Communications Equipment 3.8
Retail Specialty 3.7
Computers 2.8
Software--Computer 2.7
Electrical Equipment 2.3
Country of Percent of
Ten Largest Equity Holdings Origin Net Assets
Royal Bank of Scotland Group PLC United Kingdom 3.7%
Vodafone Group PLC United Kingdom 3.4
Cisco Systems, Inc. United States 3.0
National Westminster Bank PLC United Kingdom 3.0
COLT Telecom Group PLC United Kingdom 3.0
Merck & Co., Inc. United States 2.3
Pfizer Inc. United States 2.2
VEBA AG Germany 2.2
SAP AG (Systeme, Anwendungen,
Produkte in der Datenverarbeitung)
(Preferred) Germany 2.0
General Electric Company United States 2.0
PORTFOLIO CHANGES
For the Quarter Ended February 28, 1999
Additions
AEGON NV
AT&T Corp.
Aetna Inc.
Allianz AG (Registered Shares)
Allied Irish Banks PLC
America Online, Inc.
Assicurazioni Generali
Axa-UAP
Banca di Roma
Bank One Corporation
Barclays PLC
CGU PLC
Carnival Corporation
Citigroup Inc.
Commerzbank AG
Dresdner Bank AG
E.I. du Pont de Nemours and Company
Energis PLC
Federal Home Loan Mortgage Corporation
Federal National Mortgage Association
Franklin Resources, Inc.
General Electric Company
Glaxo Wellcome PLC
ING Groep NV
Infinity Broadcasting Corp. (Class A)
International Business Machines
Corporation
The Interpublic Group of Companies, Inc.
Istituto Nazionale delle Assicurazioni (INA)
Kimberly-Clark Corporation
Lowe's Companies, Inc.
MCI WorldCom Inc.
Mellon Bank Corporation
Minnesota Mining and Manufacturing
Company (3M)
Nestle SA (Registered Shares)
Novartis AG (Registered Shares)
The Procter & Gamble Company
Safeway Inc.
SmithKline Beecham PLC
T. Rowe Price Associates, Inc.
The TJX Companies, Inc.
Vodafone Group PLC
Walgreen Co.
The Walt Disney Company
Zeneca Group PLC
Zurich Allied AG
Deletions
Ascend Communications, Inc.
BPI-SGPS SA (Registered Shares)
The Bank of New York Company, Inc.
Capita Group PLC
Cimpor-Cimentos de Portugal, SGPS, SA
Federated Department Stores, Inc.
Keyence Corporation
Matsushita Electric Industrial Company,
Ltd.
Minebea Co., Ltd.
Murata Manufacturing Co., Ltd.
Northern Trust Corporation
Perez Companc SA 'B'
Prosegur, CIA de Seguridad SA (Registered)
Sumitomo Electric Industries
Wachovia Corporation
