MERRILL LYNCH
GLOBAL
HOLDINGS, INC.
FUND LOGO
Semi-Annual Report
May 31, 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.
Worldwide
Investments
As of 5/31/99
Percent of
Ten Largest Industries Net Assets
Telecommunications 19.9%
Banking & Financial 17.2
Insurance 11.6
Pharmaceuticals 10.0
Communications Equipment 4.0
Multi-Industry 3.3
Retail Specialty 3.0
Financial Services 2.6
Software--Computer 2.5
Electrical Equipment 2.4
Country of Percent of
Ten Largest Equity Holdings Origin Net Assets
Vodafone Group PLC United Kingdom 3.7%
COLT Telecom Group PLC United Kingdom 3.5
Cisco Systems, Inc. United States 3.5
National Westminster Bank PLC United Kingdom 3.4
Veba AG Germany 2.4
Minnesota Mining and Manufacturing
Company (3M) United States 2.3
SAP AG (Systeme, Anwendungen,
Produkte in der Datenverarbei-
tung) (Preferred) Germany 2.2
Bristol-Myers Squibb Company United States 2.1
General Electric Company United States 2.1
Sprint Corp. (FON Group) United States 2.0
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
Donald C. Burke, Vice President and Treasurer
Robert Harris, Secretary
Philip M. Mandel, Secretary of Merrill Lynch Global Holdings, Inc.
has recently retired. His colleagues at Merrill Lynch Asset
Management, L.P. join the Fund's Board of Directors in wishing Mr.
Mandel well in his retirement.
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
Merrill Lynch Global Holdings, Inc., May 31, 1999
DEAR SHAREHOLDER
For the quarter ended May 31, 1999, total returns for Merrill Lynch
Global Holdings, Inc.'s Class A, Class B, Class C and Class D Shares
were +1.77, +1.57%, +1.50% and +1.71%, respectively. The total
return for the unmanaged Morgan Stanley Capital International (MSCI)
World Stock Index was +4.27% (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.)
The Fund's underperformance relative to the MSCI World Stock Index
primarily reflects the absence of any significant equity investments
in the Asian markets, including Japan, and the Latin American
markets. We believe that the stock price increases in these markets
are not supported by a sustainable uptrend in domestic consumer
spending and an uptrend in corporate profits. The recently reported
upturn in gross domestic product growth in Japan reflects an almost
50% annualized rate of growth in public sector spending on
infrastructure projects. The most recent labor market report in
Japan showed a net loss of about 250,000 jobs in the employed labor
force as private corporations close manufacturing facilities and lay
off employees. Consumer spending on a year-to-year comparison,
including spending on automobiles, is down. Consumer confidence
levels have risen recently from record lows as the government has
increased spending on an annualized basis by about $800 billion. We
are focusing on the potential prospects for a recovery of corporate
profits among major corporations before increasing the Fund's
investments in Japan and some of the other more developed markets in
Asia.
During the May quarter, investors shifted assets from large-
capitalization growth companies to value companies. Starting in mid-
April, there was a substantial increase in stock prices of companies
in the energy, energy services, aluminum, steel, paper, chemical,
motor vehicles, construction and agricultural equipment and
industrial equipment industries. There were similar increases in
stock prices of energy, industrial and basic commodity companies in
the other major stock markets of Europe and Asia. Merrill Lynch
Global Holdings, Inc. is focused on companies in the
telecommunications, banking and financial, insurance and
pharmaceuticals industries. Companies in these industries are not
dependent on a cyclical upturn in consumer spending on housing and
consumer durable goods, including motor vehicles, and corporate
capital spending for continued increases in earnings and improved
rates of return.
The Environment
Our expectation of a slowdown in the rates of real growth in
consumer spending and capital spending in the United States and the
other industrialized economies appears to be materializing. The
United States appears to remain the strongest consumer spending
market in the world. However, we expect the rate of growth of
spending to slow during the remainder of 1999. During the May
quarter, long-term US Treasury and residential mortgage interest
rates increased to such an extent that starts for construction of
new homes declined for several months. Also, the level of mortgage
refinancing has declined by almost 80%. Recently, we have had new
peak levels of real demand for new homes and automobiles. However,
it is likely that these levels of demand will decline in upcoming
months. In addition, the continuing net loss of manufacturing jobs
in the United States and Europe to producers in lower-wage markets
in Asia and Latin America has started to reduce the rate of increase
in average hourly wages resulting from a higher percentage of lower
wage jobs. Finally, during the May quarter, the increase in energy
prices, including gasoline pump prices, has the potential to reduce
discretionary spending on other consumer goods and services.
It appears that the relatively high rates of growth in real consumer
spending in the United States during the fourth quarter of 1998 and
first quarter 1999-in combination with rising energy prices from the
reduction of oil production by Organization of Petroleum Exporting
Countries member nations and rising long-term US interest rates--
has created expectations of an acceleration in the rate of growth of
real business activity around the world. We believe that a
continuation of easier monetary policies among the major industrial
economies in conjunction with higher rates of growth of public
sector spending can produce an uptrend in rates of real economic
growth on a worldwide basis over an extended period of time.
However, we believe that we have a significant period of adjustment
ahead of us before we experience such a period of sustainable real
growth and improvement in corporate profits around the globe. We
anticipate that the growth rates in real business activity and
consumer spending in the major developed economies will be
relatively subdued during the remainder of 1999 as governments,
other than that of the United States, struggle with relatively high
budget deficits and high rates of unemployment. The world's major
economies appear on a recovery path from the dislocations of 1998.
The path is likely to be uneven and include some other dislocations
as governments and private corporations attempt to rationalize an
excess of productive capacity in many industries.
Investment Strategy
During the May quarter, we continued to reduce the Fund's weightings
in large- capitalization technology companies as well as companies
in Asia and Latin America. During 1998, these investments were
important contributors to the positive investment results. During
January 1999, we began to believe that the slowdown in the overall
real rate of growth of consumer spending and business activity
around the world was starting to cause reductions in the rate of
spending on computers and software. Consequently, during the
February quarter we made significant reductions in the Fund's
technology weighting. In the May quarter, we eliminated Baan
Company, NV and STMicroelectronics NV for valuation reasons. We also
reduced our positions in Applied Materials, Inc., Compaq Computer
Corporation, Dell Computer Corporation, Intel Corporation and
International Business Machines Corporation. We eliminated our
investment in Hutchison Whampoa Limited in Hong Kong for valuation
reasons. Also, we sold the portfolio's equity investments in stock
distributions in the subsidiaries of Telecomunicacoes Brasileiras SA-
Telebras in Brazil in response to our concerns about the continued
deterioration in consumer markets and business prospects over the
remainder of 1999. Subsequent to our liquidation of these
investments, the reports of quarterly operating results by these
companies, including the cellular companies, proved to be a
disappointment to investment analysts who reduced estimates of
earnings, cash flow and stock price expectations. We sold our
position in the Royal Bank of Scotland Group PLC, which had been a
major equity investment, for valuation reasons.
We made a number of additions to the Fund during the May quarter in
the healthcare, banking and financial services, food merchandising,
energy and telecommunications industries. In the healthcare sector,
we added Abbott Laboratories because we believe the company's stock
valuation is very attractive relative to expectations of an increase
in the rate of growth of earnings and rates of return on assets as
new executive leadership within the company orchestrates
restructuring of its businesses. We also purchased shares of Amgen
Inc., the leading biotechnology organization, because we believe
that valuation is attractive and the growth prospects for one of the
two major products look better.
In the banking and financial services industry, we added Banco
Santander Central Hispano, SA in Spain because its valuation is
attractive relative to prospects for above-average growth in
earnings. In addition, we view the valuation of The Hartford
Financial Services Group, Inc. in the United States as attractive
relative to prospects for improved rates of return and faster
earnings growth from internal restructuring by the existing
management.
Albertson's, Inc., one of the leading US food merchandising
organizations, appears to have an attractive valuation and prospects
for an improvement in rates of return and earnings growth as
management moves forward with a major increase in new stores and an
expansion and reformatting of older outlets. We added Fred Meyer,
Inc., a major US West Coast food retailer, to the portfolio. The
company was subsequently acquired by The Kroger Co., another leading
food merchandiser and a Fund holding. We believe the continued
consolidation of the food merchandising industry in the United
States among fewer major corporations, both domestic and foreign-
based, is likely to result in an improvement in operational returns
and rates of growth in earnings for the best-managed organizations.
In the energy sector, we purchased shares of El Paso Energy
Corporation in response to the attractive valuation and the
prospects for improved rates of growth as management consolidates
its position as the leading nationwide distributor of natural gas,
which is becoming the fuel of choice for the new unregulated
electric power plants. Enron Corp. has the leading market share and
is one of the most rapidly growing wholesalers of unregulated
electricity in the United States. We believe that the valuation is
attractive and the growth prospects for earnings are above average.
Merrill Lynch Global Holdings, Inc., May 31, 1999
TeleDanmark A/S, the leading telecommunications company in Denmark,
is improving growth rates in revenues and earnings from the
introduction of new digital, broadband communication services to
both commercial and retail customers with the assistance of
professional managers from Ameritech, which has a major investment
in the company. First Data Corporation has the leading market share
and is gaining market share in the rapidly growing markets for on-
line guarantee of checks, credit card transaction authorization and
processing and credit card issuance. The stock appears attractively
valued and has a unique positioning in the business of electronic
commerce. We added Cable & Wireless Optus Limited of Australia in
response to the attractive valuation and the prospects for above-
average growth and profitability of the company's cellular telephone
operations.
Unilever NV appears to have an attractive valuation and we expect
improved operational returns from the ongoing restructuring of
operations around the world.
In Conclusion
We continue to have a positive outlook for equity markets in 1999.
We believe that the shift by central bankers around the world to
lower short-term interest rates and improved liquidity starting in
September 1998 was a strong underpinning for the recovery of global
equity markets.
We thank you for your continued investment in Merrill Lynch Global
Holdings, Inc., and we look forward to reviewing our outlook and
strategy in our upcoming quarterly 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
July 13, 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* + 7.73% +1.77% +163.23%
ML Global Holdings, Inc. Class B Shares* + 6.66 +1.57 +137.69
ML Global Holdings, Inc. Class C Shares* + 6.53 +1.50 + 53.60
ML Global Holdings, Inc. Class D Shares* + 7.48 +1.71 + 59.40
World Stock Index** +13.13 +4.27 +179.96/+97.39
<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 5/31/99 and Class C & Class D
Shares, from 10/21/94 to 5/31/99.
**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 years/since
inception total returns are for the ten years ended 5/31/99 and from
10/31/94 to 5/31/99, respectively.
</TABLE>
Average Annual
Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 3/31/99 +11.25% + 5.41%
Five Years Ended 3/31/99 +10.98 + 9.79
Ten Years Ended 3/31/99 +10.76 +10.16
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 3/31/99 +10.13% +6.35%
Five Years Ended 3/31/99 + 9.84 +9.84
Ten Years Ended 3/31/99 + 9.62 +9.62
[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 3/31/99 +10.11% + 9.16%
Inception (10/21/94) through 3/31/99 +10.70 +10.70
[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 3/31/99 +10.95% + 5.12%
Inception (10/21/94) through 3/31/99 +11.59 +10.25
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
Merrill Lynch Global Holdings, Inc., May 31, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (in US dollars)
<CAPTION>
NORTH Shares Value Percent of
AMERICA Industries Held Investments Cost (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C>
Canada Communications 2,000 Nortel Networks Corporation $ 29,497 $ 150,000 0.1%
Equipment
Telecommunications 50,000 ++MetroNet Communications Corp. 'B' 1,450,921 2,831,250 1.1
Total Investments in Canada 1,480,418 2,981,250 1.2
United States Advertising 15,000 The Interpublic Group of
Companies, Inc. 1,126,680 1,136,250 0.4
Banking & Financial 63,000 Bank One Corporation 3,181,193 3,563,438 1.4
57,000 Bank of America Corporation 3,675,902 3,687,188 1.4
50,000 Citigroup Inc. 2,774,253 3,312,500 1.3
140,000 Mellon Bank Corporation 4,835,347 4,996,250 1.9
------------ ------------ ------
14,466,695 15,559,376 6.0
Broadcasting/Radio & 30,000 ++CBS Corporation 814,682 1,252,500 0.5
Television 26,000 ++Chancellor Media Corporation 937,761 1,319,500 0.5
20,000 ++Clear Channel Communications, Inc. 813,182 1,321,250 0.5
30,000 ++Infinity Broadcasting Corp.
(Class A) 849,300 766,875 0.3
------------ ------------ ------
3,414,925 4,660,125 1.8
Chemicals 48,000 E.I. du Pont de Nemours and Company 2,633,354 3,141,000 1.2
Communications 82,000 ++Cisco Systems, Inc. 1,734,414 8,932,875 3.5
Equipment
Computers 15,000 Compaq Computer Corporation 538,763 355,313 0.1
7,000 ++Dell Computer Corporation 143,852 240,625 0.1
20,000 International Business Machines
Corporation 1,873,125 2,326,250 0.9
------------ ------------ ------
2,555,740 2,922,188 1.1
Cosmetics 7,000 The Gillette Company 305,374 357,000 0.1
Diversified 70,000 Minnesota Mining and
Manufacturing Company (3M) 5,373,682 6,002,500 2.3
Electrical Equipment 52,000 General Electric Company 5,243,352 5,287,750 2.1
Electronics 8,000 Intel Corporation 110,750 434,500 0.2
3,000 Texas Instruments Incorporated 72,840 328,125 0.1
------------ ------------ ------
183,590 762,625 0.3
Energy 55,000 El Paso Energy Corporation 2,106,324 1,983,438 0.8
4,000 Enron Corp. 279,228 285,500 0.1
------------ ------------ ------
2,385,552 2,268,938 0.9
Entertainment 50,000 The Walt Disney Company 1,740,385 1,456,250 0.6
Financial Services 12,000 Federal Home Loan Mortgage
Association 740,802 699,750 0.3
35,000 Federal National Mortgage
Association 2,459,472 2,380,000 0.9
15,000 Franklin Resources, Inc. 547,463 652,500 0.3
27,000 Morgan Stanley Dean Witter & Co. 2,592,512 2,605,500 1.0
5,013 T. Rowe Price Associates, Inc. 188,698 193,627 0.1
------------ ------------ ------
6,528,947 6,531,377 2.6
Food Merchandising 5,000 Albertson's, Inc. 253,183 267,500 0.1
5,000 ++The Kroger Co. 256,034 292,812 0.1
14,000 ++Safeway Inc. 767,402 651,000 0.3
------------ ------------ ------
1,276,619 1,211,312 0.5
Household Products 27,000 Kimberly-Clark Corporation 1,370,502 1,584,562 0.6
20,000 The Procter & Gamble Company 1,840,754 1,867,500 0.7
------------ ------------ ------
3,211,256 3,452,062 1.3
Information 30,000 ++America Online, Inc. 2,283,087 3,581,250 1.4
Processing 40,000 First Data Corporation 1,623,351 1,797,500 0.7
------------ ------------ ------
3,906,438 5,378,750 2.1
Insurance 10,000 Aetna Inc. 834,263 908,125 0.4
35,000 American International Group, Inc. 3,121,356 4,000,938 1.6
40,000 The Hartford Financial
Services Group, Inc. 2,387,123 2,530,000 1.0
------------ ------------ ------
6,342,742 7,439,063 3.0
Medical Technology 27,000 Abbott Laboratories 1,292,963 1,220,063 0.5
13,000 ++Boston Scientific Corporation 306,631 493,188 0.2
5,000 Johnson & Johnson 287,800 463,125 0.2
------------ ------------ ------
1,887,394 2,176,376 0.9
Pharmaceuticals 6,000 ++Amgen Inc. 376,975 379,500 0.1
80,000 Bristol-Myers Squibb Company 4,400,234 5,490,000 2.1
74,000 Merck & Co., Inc. 4,989,548 4,995,000 1.9
45,000 Pfizer Inc. 1,437,756 4,815,000 1.9
------------ ------------ ------
11,204,513 15,679,500 6.0
Restaurants 40,000 McDonald's Corporation 1,351,190 1,540,000 0.6
Retail Specialty 8,000 ++Abercrombie & Fitch Co. (Class A) 385,355 673,000 0.3
50,000 CVS Corporation 1,484,280 2,300,000 0.9
5,000 The Gap, Inc. 209,827 312,813 0.1
30,340 Lowe's Companies, Inc. 1,641,418 1,575,784 0.6
40,000 ++Staples, Inc. 957,333 1,147,500 0.4
75,000 Walgreen Co. 2,196,391 1,743,750 0.7
------------ ------------ ------
6,874,604 7,752,847 3.0
Retail Stores 40,000 The TJX Companies, Inc. 1,242,917 1,200,000 0.5
Semiconductors 10,000 ++Applied Materials, Inc. 303,438 550,000 0.2
Software--Computer 10,000 ++Microsoft Corporation 454,500 806,875 0.3
Telecommunications 67,500 AT&T Corp. 3,748,428 3,746,250 1.5
57,000 GTE Corporation 3,253,476 3,594,563 1.4
45,000 ++MCI WorldCom Inc. 3,352,500 3,884,062 1.5
45,000 Sprint Corp. (FON Group) 2,831,576 5,073,750 2.0
35,000 ++Sprint Corp. (PCS Group) 913,894 1,575,000 0.6
------------ ------------ ------
14,099,874 17,873,625 7.0
Travel & Lodging 42,000 Carnival Corporation 1,880,142 1,722,000 0.7
Total Investments in the
United States 101,728,317 125,800,664 49.0
Total Investments in
North America 103,208,735 128,781,914 50.2
PACIFIC BASIN/ASIA
Australia Broadcasting & 100,000 The News Corporation Limited 708,451 828,217 0.3
Publishing
Telecommunications 400,000 ++Cable & Wireless Optus Limited 908,615 766,722 0.3
Total Investments in Australia 1,617,066 1,594,939 0.6
</TABLE>
Merrill Lynch Global Holdings, Inc., May 31, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<CAPTION>
PACIFIC BASIN/ Shares Value Percent of
ASIA (concluded)Industries Held Investments Cost (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C>
Japan Leisure 10,000 Sony Corporation $ 847,524 $ 941,176 0.4%
Photography 100,000 Canon, Inc. 1,758,792 2,526,926 1.0
Retail Stores 10,000 Ito-Yokado Co., Ltd. 456,260 597,349 0.2
Telecommunications 400 ++Nippon Telegraph & Telephone
Corporation (NTT) 3,217,188 3,910,522 1.5
Total Investments in Japan 6,279,764 7,975,973 3.1
Total Investments in the
Pacific Basin/Asia 7,896,830 9,570,912 3.7
WESTERN EUROPE
Denmark Telecommunications 17,000 ++TeleDanmark A/S 'B' 1,979,727 1,740,451 0.7
Total Investments in Denmark 1,979,727 1,740,451 0.7
Finland Communications 14,000 Nokia Oyj 196,985 997,766 0.4
Equipment
Total Investments in Finland 196,985 997,766 0.4
France Electrical Equipment 10,000 ++Alstom 340,815 295,839 0.1
Food 3,000 Groupe Danone SA 713,873 827,640 0.3
Information 10,000 Cap Gemini SA 1,053,374 1,443,145 0.6
Processing
Insurance 20,000 Axa 2,689,377 2,309,450 0.9
Total Investments in France 4,797,439 4,876,074 1.9
Germany Banking & Financial 70,000 Commerzbank AG 2,004,376 1,967,735 0.7
70,000 Deutsche Bank AG 4,697,032 3,657,500 1.4
60,000 Dresdner Bank AG 2,280,538 2,232,120 0.9
------------ ------------ ------
8,981,946 7,857,355 3.0
Insurance 9,000 Allianz AG (Registered Shares) 2,896,335 2,464,110 1.0
Multi-Industry 16,000 Mannesmann AG 1,596,424 2,190,320 0.9
110,000 Veba AG 5,056,239 6,287,765 2.4
------------ ------------ ------
6,652,663 8,478,085 3.3
Retail Stores 40,000 Metro AG 2,276,637 2,528,900 1.0
Software--Computer 14,000 SAP AG (Systeme,
Anwendungen, Produkte in der
Datenverarbeitung) (Preferred) 6,083,300 5,610,605 2.2
Total Investments in Germany 26,890,881 26,939,055 10.5
Ireland Banking & Financial 177,000 Allied Irish Banks PLC 3,169,530 2,353,740 0.9
Total Investments in Ireland 3,169,530 2,353,740 0.9
Italy Banking & Financial 515,000 Banca di Roma 748,050 753,445 0.3
Insurance 80,000 Assicurazioni Generali 3,170,802 2,850,760 1.1
450,000 Istituto Nazionale delle
Assicurazioni (INA) 1,038,639 1,053,360 0.4
------------ ------------ ------
4,209,441 3,904,120 1.5
Total Investments in Italy 4,957,491 4,657,565 1.8
Netherlands Household Products 26,786 Unilever NV 'A' 2,163,644 1,784,431 0.7
Insurance 45,700 AEGON NV 5,110,216 3,701,129 1.5
48,000 ING Groep NV 2,656,337 2,570,700 1.0
------------ ------------ ------
7,766,553 6,271,829 2.5
Leisure 10,000 ++Koninklijke (Royal) Philips
Electronics NV 295,300 859,512 0.3
Telecommunications 52,200 ++Equant 1,950,528 4,309,371 1.7
Total Investments in the
Netherlands 12,176,025 13,225,143 5.2
Spain Banking & Financial 50,000 Banco Santander Central
Hispano, SA 963,726 1,045,000 0.4
Total Investments in Spain 963,726 1,045,000 0.4
Switzerland Food 1,366 Nestle SA (Registered Shares) 2,459,614 2,465,266 0.9
Insurance 3,525 Zurich Allied AG 2,424,159 2,081,164 0.8
Pharmaceuticals 2,055 Novartis AG (Registered Shares) 3,692,058 2,994,004 1.2
Total Investments in Switzerland 8,575,831 7,540,434 2.9
United Kingdom Banking & 140,000 Barclays PLC 3,609,402 4,243,500 1.7
Financial 285,000 Lloyds TSB Group PLC 3,984,525 3,764,821 1.5
385,000 National Westminster Bank PLC 7,320,642 8,827,736 3.4
------------ ------------ ------
14,914,569 16,836,057 6.6
Electrical Equipment 100,000 BTR Siebe PLC 372,866 455,541 0.2
Insurance 85,000 CGU PLC 1,270,984 1,241,250 0.5
454,545 Royal & Sun Alliance
Insurance Group PLC 6,672,402 3,715,512 1.4
------------ ------------ ------
7,943,386 4,956,762 1.9
Pharmaceuticals 58,000 AstraZeneca Group PLC 2,423,115 2,304,095 0.9
115,000 Glaxo Wellcome PLC 3,758,190 3,226,098 1.3
115,000 SmithKline Beecham PLC 1,577,426 1,498,883 0.6
------------ ------------ ------
7,758,731 7,029,076 2.8
Telecommunications 424,000 ++COLT Telecom Group PLC 5,096,200 8,948,018 3.5
45,000 ++Energis PLC 1,322,355 1,085,133 0.4
500,000 Vodafone Group PLC 9,226,166 9,519,134 3.7
------------ ------------ ------
15,644,721 19,552,285 7.6
Total Investments in the
United Kingdom 46,634,273 48,829,721 19.1
Total Investments in
Western Europe 110,341,908 112,204,949 43.8
SHORT-TERM Face
SECURITIES Amount Issue
Commercial Paper* $ 4,705,000 General Motors Acceptance
Corp., 4.94% due 6/01/1999 4,703,063 4,703,063 1.9
Total Investments in
Short-Term Securities 4,703,063 4,703,063 1.9
Total Investments $226,150,536 255,260,838 99.6
============
Other Assets Less Liabilities 1,111,489 0.4
------------ ------
Net Assets $256,372,327 100.0%
============ ======
<FN>
*Commercial Paper is traded on a discount basis; the interest rate
shown reflects the discount rate paid at the time of purchase by the
Company.
++Non-income producing security.
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Global Holdings, Inc., May 31, 1999
<TABLE>
STATEMENT OF ASSETS AND LIABILITIES
<CAPTION>
As of May 31, 1999
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$226,150,536) (Note 1a) $255,260,838
Cash 440,633
Receivables:
Dividends $ 1,147,635
Capital shares sold 216,016 1,363,651
------------
Prepaid registration fees and other assets (Note 1f) 22,688
------------
Total assets 257,087,810
------------
Liabilities: Payables:
Capital shares redeemed 250,953
Investment adviser (Note 2) 203,995
Distributor (Note 2) 18,719 473,667
------------
Accrued expenses and other liabilities 241,816
------------
Total liabilities 715,483
------------
Net Assets: Net assets $256,372,327
============
Net Assets Class A Shares of Common Stock, $0.10 par value,
Consist of: 100,000,000 shares authorized $ 1,641,417
Class B Shares of Common Stock, $0.10 par value,
100,000,000 shares authorized 156,816
Class C Shares of Common Stock, $0.10 par value,
100,000,000 shares authorized 7,906
Class D Shares of Common Stock, $0.10 par value,
100,000,000 shares authorized 60,331
Paid-in capital in excess of par 152,113,629
Undistributed investment income--net 455,115
Undistributed realized capital gains on investments and
foreign currency transactions--net 72,856,682
Unrealized appreciation on investments and foreign
currency transactions--net 29,080,431
------------
Net assets $256,372,327
============
Net Asset Class A--Based on net assets of $226,863,595 and 16,414,171
Value: shares outstanding $ 13.82
============
Class B--Based on net assets of $20,221,647 and 1,568,164
shares outstanding $ 12.90
============
Class C--Based on net assets of $1,013,701 and 79,057
shares outstanding $ 12.82
============
Class D--Based on net assets of $8,273,384 and 603,305
shares outstanding $ 13.71
============
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENT OF OPERATIONS
<CAPTION>
For the Six Months Ended May 31, 1999
<S> <S> <C> <C>
Investment Income Dividends (net of $246,421 foreign withholding tax) $ 2,525,160
(Notes 1d & 1e): Interest and discount earned 530,300
------------
Total income 3,055,460
------------
Expenses: Investment advisory fees (Note 2) $ 1,335,359
Transfer agent fees--Class A (Note 2) 237,058
Account maintenance and distribution fees--Class B (Note 2) 112,015
Printing and shareholder reports 70,374
Custodian fees 64,878
Professional fees 44,768
Registration fees (Note 1f) 31,383
Accounting services (Note 2) 31,062
Transfer agent fees--Class B (Note 2) 25,386
Directors' fees and expenses 21,411
Account maintenance fees--Class D (Note 2) 10,103
Transfer agent fees--Class D (Note 2) 8,132
Account maintenance and distribution fees--Class C (Note 2) 5,351
Pricing fees 1,779
Transfer agent fees--Class C (Note 2) 1,266
Other 4,663
------------
Total expenses 2,004,988
------------
Investment income--net 1,050,472
------------
Realized & Realized gain from:
Unrealized Gain Investments--net 73,579,193
(Loss) on Foreign currency transactions--net 82,064 73,661,257
Investments & ------------
Foreign Currency Change in unrealized appreciation/depreciation on:
Transactions--Net Investments--net (48,750,477)
(Notes 1b, 1c, Foreign currency transactions--net (45,276) (48,795,753)
1e & 3): ------------ ------------
Net realized and unrealized gain on investments
and foreign currency transactions 24,865,504
------------
Net Increase in Net Assets Resulting from Operations $ 25,915,976
============
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Global Holdings, Inc., May 31, 1999
<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: 1999 1998
<S> <S> <C> <C>
Operations: Investment income (loss)--net $ 1,050,472 $ (945,783)
Realized gain on investments and foreign currency
transactions--net 73,661,257 41,355,924
Change in unrealized appreciation/depreciation on
investments and foreign currency transactions--net (48,795,753) 4,119,266
------------ ------------
Net increase in net assets resulting from operations 25,915,976 44,529,407
------------ ------------
Distributions to Realized gain on investments--net:
Shareholders Class A (37,234,769) (39,878,951)
(Note 1g): Class B (3,721,556) (7,314,996)
Class C (168,177) (664,387)
Class D (1,195,012) (999,340)
------------ ------------
Net decrease in net assets resulting from
distributions to shareholders (42,319,514) (48,857,674)
------------ ------------
Capital Share Net decrease in net assets derived from capital
Transactions share transactions (14,787,303) (134,289,599)
(Note 4): ------------ ------------
Net Assets: Total decrease in net assets (31,190,841) (138,617,866)
Beginning of period 287,563,168 426,181,034
------------ ------------
End of period* $256,372,327 $287,563,168
============ ============
<FN>
*Undistributed (accumulated) investment income (loss)--net $ 455,115 $ (595,357)
============ ============
See Notes to Financial Statements.
</TABLE>
<TABLE>
FINANCIAL HIGHLIGHTS
<CAPTION>
Class A++
The following per share data and ratios have been derived For the Six
from information provided in the financial statements. Months Ended
May 31, For the Year Ended November 30,
Increase (Decrease) in Net Asset Value: 1999 1998 1997 1996 1995
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 14.73 $ 15.05 $ 15.12 $ 13.87 $ 12.82
Operating -------- -------- -------- -------- --------
Performance: Investment income (loss)--net .06 (.02) (.02) .13 .05
Realized and unrealized gain on
investments and foreign currency
transactions--net 1.24 1.46 .86 1.87 1.52
-------- -------- -------- -------- --------
Total from investment operations 1.30 1.44 .84 2.00 1.57
-------- -------- -------- -------- --------
Less dividends and distributions:
Investment income--net -- -- (.02) -- (.01)
In excess of investment income--net -- -- (.10) -- --
Realized gain on investments--net (2.21) (1.76) (.79) (.75) (.51)
-------- -------- -------- -------- --------
Total dividends and distributions (2.21) (1.76) (.91) (.75) (.52)
-------- -------- -------- -------- --------
Net asset value, end of period $ 13.82 $ 14.73 $ 15.05 $ 15.12 $ 13.87
======== ======== ======== ======== ========
Total Investment Based on net asset value per share 9.56%+++ 11.41% 6.04% 15.20% 12.92%
Return:** ======== ======== ======== ======== ========
Ratios to Average Expenses 1.40%* 1.39% 1.39% 1.37% 1.51%
Net Assets: ======== ======== ======== ======== ========
Investment income (loss)--net .89%* (.11%) (.12%) .92% .41%
======== ======== ======== ======== ========
Supplemental Net assets, end of period
Data: (in thousands) $226,863 $254,472 $344,940 $398,310 $327,270
======== ======== ======== ======== ========
Portfolio turnover 59.02% 35.59% 54.50% 41.14% 44.64%
======== ======== ======== ======== ========
<FN>
*Annualized.
**Total investment returns exclude the effects of sales loads.
++Based on average shares outstanding.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Global Holdings, Inc., May 31, 1999
<TABLE>
FINANCIAL HIGHLIGHTS (concluded)
<CAPTION>
Class B++
The following per share data and ratios have been derived For the Six
from information provided in the financial statements. Months Ended
May 31, For the Year Ended November 30,
Increase (Decrease) in Net Asset Value: 1999 1998 1997 1996 1995
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 13.95 $ 14.31 $ 14.40 $ 13.38 $ 12.50
Operating -------- -------- -------- -------- --------
Performance: Investment loss--net (.01) (.15) (.17) (.02) (.08)
Realized and unrealized gain on
investments and foreign currency
transactions--net 1.17 1.39 .84 1.79 1.47
-------- -------- -------- -------- --------
Total from investment operations 1.16 1.24 .67 1.77 1.39
-------- -------- -------- -------- --------
Less distributions from realized
gain on investments--net (2.21) (1.60) (.76) (.75) (.51)
-------- -------- -------- -------- --------
Net asset value, end of period $ 12.90 $ 13.95 $ 14.31 $ 14.40 $ 13.38
======== ======== ======== ======== ========
Total Investment Based on net asset value per share 9.03%+++ 10.32% 4.98% 13.97% 11.78%
Return:*** ======== ======== ======== ======== ========
Ratios to Average Expenses 2.43%* 2.44% 2.42% 2.40% 2.55%
Net Assets: ======== ======== ======== ======== ========
Investment loss--net (.16%)* (1.10%) (1.11%) (.11%) (.63%)
======== ======== ======== ======== ========
Supplemental Net assets, end of period
Data: (in thousands) $ 20,222 $ 24,148 $ 66,791 $ 44,311 $ 44,387
======== ======== ======== ======== ========
Portfolio turnover 59.02% 35.59% 54.50% 41.14% 44.64%
======== ======== ======== ======== ========
<CAPTION>
Class C++
The following per share data and ratios have been derived For the Six
from information provided in the financial statements. Months Ended
May 31, For the Year Ended November 30,
Increase (Decrease) in Net Asset Value: 1999 1998 1997 1996 1995
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 13.88 $ 14.28 $ 14.41 $ 13.38 $ 12.51
Operating -------- -------- -------- -------- --------
Performance: Investment loss--net (.01) (.16) (.17) (.01) (.08)
Realized and unrealized gain on
investments and foreign currency
transactions--net 1.16 1.39 .83 1.79 1.46
-------- -------- -------- -------- --------
Total from investment operations 1.15 1.23 .66 1.78 1.38
-------- -------- -------- -------- --------
Less dividends and distributions:
Investment income--net -- -- --** -- --
In excess of investment income--net -- -- --** -- --
Realized gain on investments--net (2.21) (1.63) (.79) (.75) (.51)
-------- -------- -------- -------- --------
Total dividends and distributions (2.21) (1.63) (.79) (.75) (.51)
-------- -------- -------- -------- --------
Net asset value, end of period $ 12.82 $ 13.88 $ 14.28 $ 14.41 $ 13.38
======== ======== ======== ======== ========
Total Investment Based on net asset value per share 8.99%+++ 10.21% 4.96% 14.05% 11.69%
Return:*** ======== ======== ======== ======== ========
Ratios to Average Expenses 2.44%* 2.46% 2.43% 2.41% 2.55%
Net Assets: ======== ======== ======== ======== ========
Investment loss--net (.15%)* (1.08%) (1.09%) (.09%) (.63%)
======== ======== ======== ======== ========
Supplemental Net assets, end of period
Data: (in thousands) $ 1,014 $ 1,061 $ 5,964 $ 910 $ 376
======== ======== ======== ======== ========
Portfolio turnover 59.02% 35.59% 54.50% 41.14% 44.64%
======== ======== ======== ======== ========
<CAPTION>
Class D++
The following per share data and ratios have been derived For the Six
from information provided in the financial statements. Months Ended
May 31, For the Year Ended November 30,
Increase (Decrease) in Net Asset Value: 1999 1998 1997 1996 1995
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 14.65 $ 14.97 $ 15.04 $ 13.84 $ 12.81
Operating -------- -------- -------- -------- --------
Performance: Investment income (loss)--net .05 (.05) (.06) .09 .02
Realized and unrealized gain on
investments and foreign currency
transactions--net 1.22 1.46 .87 1.86 1.52
-------- -------- -------- -------- --------
Total from investment operations 1.27 1.41 .81 1.95 1.54
-------- -------- -------- -------- --------
Less dividends and distributions:
Investment income--net -- -- (.01) -- --**
In excess of investment income--net -- -- (.08) -- --
Realized gain on investments--net (2.21) (1.73) (.79) (.75) (.51)
-------- -------- -------- -------- --------
Total dividends and distributions (2.21) (1.73) (.88) (.75) (.51)
-------- -------- -------- -------- --------
Net asset value, end of period $ 13.71 $ 14.65 $ 14.97 $ 15.04 $ 13.84
======== ======== ======== ======== ========
Total Investment Based on net asset value per share 9.39%+++ 11.19% 5.80% 14.86% 12.73%
Return:*** ======== ======== ======== ======== ========
Ratios to Average Expenses 1.65%* 1.64% 1.64% 1.63% 1.76%
Net Assets: ======== ======== ======== ======== ========
Investment income (loss)--net 67%* (.38%) (.39%) .60% .18%
======== ======== ======== ======== ========
Supplemental Net assets, end of period
Data: (in thousands) $ 8,273 $ 7,882 $ 8,486 $ 4,688 $ 3,459
======== ======== ======== ======== ========
Portfolio turnover 59.02% 35.59% 54.50% 41.14% 44.64%
======== ======== ======== ======== ========
<FN>
*Annualized.
**Amount is less than $.01 per share.
***Total investment returns exclude the effects of sales loads.
++Based on average shares outstanding.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Global Holdings, Inc., May 31, 1999
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. The Company's financial statements
are prepared in accordance with generally accepted accounting
principles which may require the use of management accruals and
estimates. 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 or
purchased are valued at the last sale price in the case of exchange-
traded options. In the case of options traded in the over-the-
counter market, valuation is the last asked price (options written)
or the last bid price (options purchased). Short-term securities are
valued at amortized cost, which approximates market value. Other
investments, including futures contracts and related options, are
stated at market value. Securities and assets for which market value
quotations are not available are valued at their fair value as
determined in good faith by or under the direction of the Company's
Board of Directors.
(b) Foreign currency transactions--Transactions denominated in
foreign currencies are recorded at the exchange rate prevailing when
recognized. Assets and liabilities denominated in foreign currencies
are valued at the exchange rate at the end of the period. Foreign
currency transactions are the result of settling (realized) or
valuing (unrealized) assets or liabilities expressed in foreign
currencies into US dollars. Realized and unrealized gains or losses
from investments include the effects of foreign exchange rates on
investments.
(c) Derivative financial instruments--The Company may engage in
various portfolio strategies to seek to increase its return by
hedging its portfolio against adverse movements in the equity, debt
and currency markets. Losses may arise due to changes in the value
of the contract or if the counterparty does not perform under the
contract.
* 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.
* Foreign currency options and futures--The Company may also
purchase or sell listed or over-the-counter foreign currency
options, foreign currency futures and related options on foreign
currency futures as a short or long hedge against possible
variations in foreign exchange rates. Such transactions may be
effected with respect to hedges on non-US dollar denominated
securities owned by the Company, sold by the Company but not yet
delivered, or committed or anticipated to be purchased by the
Company.
* Financial futures contracts--The Company may purchase or sell
financial 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 ("MLFD" or the "Distributor"), a division of Princeton
Funds Distributor, Inc. ("PFD"), which is a wholly-owned subsidiary
of Merrill Lynch Group, Inc.
As compensation for its services to the Company, MLAM receives
monthly compensation at the annual rate of 1.0% of the average daily
net assets of the Company.
Pursuant to 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 Incorporated ("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, 1999, MLFD earned under-writing
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 $120 $1,291
Class D $558 $5,274
For the six months ended May 31, 1999, MLPF&S received contingent
deferred sales charges of $10,604 and $29 relating to transactions
in Class B and Class C Shares, respectively.
In addition, MLPF&S received $34,001 in commissions on the execution
of portfolio security transactions for the Company for the six
months ended May 31, 1999.
Financial Data Services, Inc. ("FDS"), a wholly-owned subsidiary of
ML & Co., acts as the Company's transfer agent.
Merrill Lynch Global Holdings, Inc., May 31, 1999
NOTES TO FINANCIAL STATEMENTS (concluded)
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, FDS, PFD, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the six months ended May 31, 1999 were $144,726,628 and
$184,167,922, respectively.
Net realized gains (losses) for the six months ended May 31, 1999,
and net unrealized gains (losses) as of May 31, 1999 were as
follows:
Realized Unrealized
Gains (Losses) Gains (Losses)
Long-term investments $ 73,579,466 $ 29,110,302
Short-term investments (273) --
Foreign currency transactions 82,064 (29,871)
------------ ------------
Total $ 73,661,257 $ 29,080,431
============ ============
As of May 31, 1999, net unrealized appreciation for Federal income
tax purposes aggregated $29,110,302, of which $41,874,143 related to
appreciated securities and $12,763,841 related to depreciated
securities. The aggregate cost of investments at May 31, 1999 for
Federal income tax purposes was $226,150,536.
4. Capital Share Transactions:
Net decrease in net assets derived from capital share transactions
was $14,787,303 and $134,289,599 for the six months ended May 31,
1999 and for the year ended November 30, 1998, respectively.
Transactions in capital shares for each class were as follows:
Class A Shares for the Six Months Dollar
Ended May 31, 1999 Shares Amount
Shares sold 972,506 $ 13,462,574
Shares issued to shareholders in
reinvestment of distributions 2,482,823 32,748,430
------------ -------------
Total issued 3,455,329 46,211,004
Shares redeemed (4,315,129) (59,561,536)
------------ -------------
Net decrease (859,800) $ (13,350,532)
============ =============
Class A Shares for the Year Dollar
Ended November 30, 1998 Shares Amount
Shares sold 3,466,422 $ 49,455,030
Shares issued to shareholders in
reinvestment of distributions 2,864,459 36,521,854
------------ -------------
Total issued 6,330,881 85,976,884
Shares redeemed (11,977,403) (172,486,086)
------------ -------------
Net decrease (5,646,522) $ (86,509,202)
============ =============
Class B Shares for the Six Months Dollar
Ended May 31, 1999 Shares Amount
Shares sold 108,444 $ 1,420,873
Shares issued to shareholders in
reinvestment of distributions 260,987 3,225,801
------------ -------------
Total issued 369,431 4,646,674
Automatic conversion of shares (86,609) (1,148,634)
Shares redeemed (446,048) (5,835,841)
------------ -------------
Net decrease (163,226) $ (2,337,801)
============ =============
Class B Shares for the Year Dollar
Ended November 30, 1998 Shares Amount
Shares sold 552,814 $ 7,259,632
Shares issued to shareholders in
reinvestment of distributions 528,258 6,439,464
------------ -------------
Total issued 1,081,072 13,699,096
Automatic conversion of shares (418,255) (5,671,168)
Shares redeemed (3,598,708) (50,212,204)
------------ -------------
Net decrease (2,935,891) $ (42,184,276)
============ =============
Class C Shares for the Six Months Dollar
Ended May 31, 1999 Shares Amount
Shares sold 11,112 $ 142,945
Shares issued to shareholders in
reinvestment of distributions 12,475 153,325
------------ -------------
Total issued 23,587 296,270
Shares redeemed (20,953) (271,492)
------------ -------------
Net increase 2,634 $ 24,778
============ =============
Class C Shares for the Year Dollar
Ended November 30, 1998 Shares Amount
Shares sold 227,450 $ 3,067,011
Shares issued to shareholders in
reinvestment of distributions 50,102 608,239
------------ -------------
Total issued 277,552 3,675,250
Shares redeemed (618,894) (8,634,328)
------------ -------------
Net decrease (341,342) $ (4,959,078)
============ =============
Class D Shares for the Six Months Dollar
Ended May 31, 1999 Shares Amount
Shares sold 61,650 $ 853,119
Shares issued to shareholders in
reinvestment of distributions 76,851 1,006,749
Automatic conversion of shares 81,629 1,148,634
------------ -------------
Total issued 220,130 3,008,502
Shares redeemed (155,017) (2,132,250)
------------ -------------
Net increase 65,113 $ 876,252
============ =============
Class D Shares for the Year Dollar
Ended November 30, 1998 Shares Amount
Shares sold 177,031 $ 2,437,960
Shares issued to shareholders in
reinvestment of distributions 72,194 917,589
Automatic conversion of shares 399,858 5,671,168
------------ -------------
Total issued 649,083 9,026,717
Shares redeemed (677,661) (9,663,760)
------------ -------------
Net decrease (28,578) $ (637,043)
============ =============
PORTFOLIO CHANGES
For the Quarter Ended May 31, 1999
Additions
Abbott Laboratories
Albertson's, Inc.
Amgen Inc.
Banco Santander Central Hispano, SA
Cable & Wireless Optus Limited
El Paso Energy Corporation
Enron Corp.
First Data Corporation
The Hartford Financial Services
Group, Inc.
Morgan Stanley Dean Witter & Co.
TeleDanmark A/S 'B'
Unilever NV 'A'Baan Company, NV
Deletions
Embratel Participacoes SA (Preferred)
Hutchison Whampoa Limited
Royal Bank of Scotland Group PLC
STMicroelectronics NV (NY Registered
Shares)
Tele Centro Oeste Celular Participacoes
SA (Preferred)
Tele Centro Sul Participacoes SA
(Preferred)
Tele Leste Celular Participacoes SA
(Preferred)
Tele Nordeste Celular Participacoes SA
(Preferred)
Tele Norte Celular Participacoes SA
(Preferred)
Tele Sudeste Celular Participacoes SA
(Preferred)
Telecomunicacoes Brasileiras SA--Telebras
(Preferred)
Telesp Celular Participacoes SA (Preferred)
Telesp Participacoes SA (Preferred)
