MERRILL
LYNCH
BALANCED
FUND
For Investment and Retirement
FUND LOGO
Semi-Annual Report March 31, 1994
This report is not authorized for use as an offer of sale
or a solicitation of an offer to buy shares of the Fund
unless accompanied or preceded by the Fund's current
prospectus. Past performance results shown in this report
should not be considered a representation of future per-
formance. Investment return and principal value of shares
will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost.
Custodian
National Westminster
Bank NJ
10 Exchange Place
Jersey City, NJ 07302
Transfer Agent
Financial Data
Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL
32246-6484
(800) 637-3863
Merrill Lynch Retirement Benefit
Investment Program, Inc.
Full Investment Portfolio
d/b/a Merrill Lynch Balanced
Fund for Investment and Retirement
Box 9011
Princeton, NJ
08543-9011
Merrill Lynch Balanced Fund for Investment and Retirement
<PAGE>
PORTFOLIO SUMMARY
GRAPHIC MATERIAL APPEARS HERE: SEE APPENDIX,
GRAPHIC AND IMAGE MATERIAL, Item 1
As of March 31, 1994
Currency Diversification Percent of
Net Assets
US Dollar 82.8%
Mexican Peso 3.0
Canadian Dollar 2.5
Australian Dollar 2.2
UK Sterling 1.8
Italian Lira 1.7
Spanish Peseta 1.2
Hong Kong Dollar 1.1
French Franc 0.8
Argentinian Peso 0.7
Chilean Peso 0.7
Swedish Krona 0.6
German Mark 0.4
Portuguese Escudo 0.4
Singaporean Dollar 0.1
US Common Stock Investments S&P
Fund 500*
After Tax Profit Margin 6.9% 5.5%
Yield 1.6% 2.3%
Price/Earnings Ratio** 21.0 18.0
Return on Equity 20.1% 14.2%
Average Capitalization (in billions) $8.0 $6.5
Earnings Growth Rate (5 yr. average) 7.0% 4.0%
[FN]
*An unmanaged broad-based index comprised of common stocks.
**Based on 1994 earnings estimates.
<PAGE>
Fixed-Income Investments Merrill Lynch
Fund BOAO Index*
Duration 5.3 Years 5.5 Years
Average Maturity 8.1 Years 9.9 Years
Asset Breakdown:
US Treasuries/Agencies 63.3% 75.5%
Corporates 13.2% 24.5%
International Governments 23.5% --
[FN]
*An unmanaged market-weighted corporate and Government master
bond index reflecting approximately 97% of total outstanding US bonds.
DEAR SHAREHOLDER
During the March quarter, the Fund's asset mix moved toward cash
equivalents and bonds at the expense of equities. At March quar-
ter-end, cash equivalents were up to 7.9% of net assets from 3.4%
at year-end 1993, while equities decreased to 57.3% from 64.3%,
and bonds increased to 34.8% from 32.3%.
Last fall, when there were early indications that economic growth
was accelerating substantially from previous quarterly rates,
fixed-income and equity investors became nervous. Recently re-
leased statistics confirmed that the US economy expanded at a
strong 7.0% rate in the fourth quarter. Analyzing gross domestic
product (GDP) figures, we see that several factors contributed
to this growth. Consumer spending increased 4.6%; business invest-
ment jumped 22.1%; residential housing rose 31%; net exports were
strong; and Government spending was flat. It is our opinion that
this rate of growth is not sustainable. In fact, since the begin-
ning of 1994, snow storms across the country and the earthquake
in Los Angeles have dampened growth.
On the positive side, the sharp drop in interest rates gave home-
owners a huge windfall as they refinanced their mortgages, which
helps to explain the consumption boom. Businesses have invested
substantial amounts of money in computing and telecommunications
technologies in the ongoing restructuring process. Together these
trends suggest a strong economy, and raised concerns of heightened
inflationary pressures for investors.
<PAGE>
Following the market's lead, the Federal Reserve Board raised short-
term interest rates modestly in early February, in late March and
again in mid-April. In line with its goal of price stability and
its policy of providing an interest rate conducive to sustainable
growth, Federal Reserve Board Chairman Alan Greenspan indicated to
Congress a preference for modest corrective steps to avoid wrenching
counter measures if inflation actually worsened. Already the backup
in long-term interest rates has had an impact on mortgage refinanc-
ings, which have declined 50% over the last four months after sur-
ging in 1993.
While residential housing and durable goods purchases are likely to
slow from the fourth-quarter pace as interest rates increase, auto
sales and consumer confidence continue to be remarkably strong in
the first months of 1994. To satisfy pent-up demand, it may take sev-
eral months until we see consumers slow spending in line with income.
On the business side of the economy, net exports seem destined to
slow down as several of our large trading partners are still exper-
iencing negative-to-flat industrial production. Businesses are still
expected to invest in technologies to remain competitive worldwide
(although the current rate is unsustainable), and it has been this
substitution of capital for labor that is largely responsible for the
significant increase in productivity we have recently seen. The Fed-
eral Reserve Board estimates productivity is now improving by 1.5%
annually compared to 1.1% in recent quarters. The productivity im-
provements contribute meaningfully in the effort to keep inflation
low and permit GDP growth at higher levels without causing an accel-
eration of inflation.
Equity Investment Strategy
Our strategy during the quarter was to underweight the credit-sens-
itive sector that was being adversely affected by the backup in
interest rates, although we have reversed our pattern recently.
We have been reducing exposure to consumer-credit cyclicals, which
should begin to slow as the benefits of lower mortgage rates are
exhausted. Our economic forecast calls for still-strong growth in
the first half of 1994, and we are emphasizing cyclical companies
that benefit from the higher operating rates that typically occur
later in the economic cycle. After several false starts, these in-
dustries are just beginning to exact modestly higher prices. We
still favor those companies that have substantially restructured
and should now, in a stronger economy, see the fruits of their la-
bors. We continue to be excited about opportunities in telecommun-
ications technology, an area where we expect to achieve above-
average growth into the next century. However, we had taken some
profits since long-term growth stocks tend to be more negatively
affected by increasing interest rates.
<PAGE>
Outside of the United States, we have substantially reduced the
Fund's exposure to Hong Kong, which could not be expected to main-
tain the rapid rate of growth experienced in 1993, especially in the
face of US criticism over human rights violations in the People's
Republic of China. We are beginning to position the portfolio to ben-
efit from an anticipated upturn in economic activity on the European
continent through purchases of companies based in Italy, France and
Germany.
Fixed-Income Investment Strategy
The US fixed-income market was leading the Federal Reserve Board in
raising interest rates since last October. We expected investors to
react positively to the central bank's preemptive move against infla-
tion. However, instead of the yield curve flattening as we had ex-
pected, it has risen evenly across maturity sectors. The Federal Re-
serve Board's gradual monetary policy tightening has evoked the
expectation that short-term interest rates will rise further. In
addition, in response to the massive flow of funds into the market
over the past several years, the change in interest rate trends has
caused a reversal in psychology leading to a flood of US Treasury
securities offered for resale. We believe that these technical fac-
tors are mostly unwound. We know the economy has slowed from the
fourth-quarter pace, but still seek further evidence of a slowdown
to a more sustainable rate. In the near term, we are cautious as we
await evidence that the Federal Reserve Board's actions will ac-
tually preempt inflation. Once signs of a slower economy develop,
it is likely that we will extend the average life of the US portion
of the Fund's bond portfolio.
Internationally, bond markets have been extremely volatile as pessi-
mism about inflation and interest rates in the United States also
affected investors in Europe and other markets including Latin Amer-
ica, where local currencies are linked to the US dollar. But the fac-
tors that have stimulated overseas markets over the previous months
still remain in place, and most observers agree that interest rates
will continue to decline in Germany and in France, reflecting efforts
to restart their economies.
In Conclusion
Contrary to our comments in our last report to shareholders, the eco-
nomy has demonstrated greater strength than we anticipated, but we do
expect future growth to decelerate from the level achieved in the
closing months of 1993. The combination of greater sales growth and
improving productivity should lead to double-digit corporate earnings
gains in the quarters just ahead. This should bring equity market val-
uations down to more reasonable levels and foster a greater interest
in equity securities than we experienced in February and March. We
believe the concerns of accelerating inflation have been overdone
and anticipate a positive return on bonds in the second quarter.
<PAGE>
We appreciate your continued support of Merrill Lynch Balanced Fund
for Investment and Retirement, and we look forward to sharing our
strategy with you in our upcoming quarterly report to shareholders.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Denis B. Cummings)
Denis B. Cummings
Vice President and Portfolio Manager
April 28, 1994
OFFICERS AND DIRECTORS
Arthur Zeikel, President and Director
Kenneth S. Axelson, Director
Herbert I. London, Director
Robert R. Martin, Director
Joseph L. May, Director
Andre F. Perold, Director
Terry K. Glenn, Executive Vice President
Bernard J. Durnin, Senior Vice President
Donald C. Burke, Vice President
Denis B. Cummings, Vice President and
Portfolio Manager
Gerald M. Richard, Treasurer
Jerry Weiss, Secretary
PERFORMANCE DATA
None of the past results shown should be considered a representation
of future performance. Investment return and principal value of Class A
and Class B Shares will fluctuate so that shares, when redeemed, may
be worth more or less than their original cost.
<TABLE>
Performance Summary--Class A Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<C> <C> <C> <C> <C> <C>
10/27/88--12/31/88 $11.18 $10.78 $0.008 $0.364 - 0.23%
1989 10.78 11.93 -- 0.767 +18.12
1990 11.93 10.57 0.377 0.719 - 2.31
1991 10.57 12.85 -- 0.457 +26.40
1992 12.85 12.08 0.745 0.546 + 4.16
1993 12.08 12.33 1.013 0.604 +15.93
1/1/94--3/31/94 12.33 11.67 -- -- - 5.35
------ ------
Total $2.143 Total $3.457
Cumulative total return as of 3/31/94: +66.31%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures assume reinvestment of all dividends and capital gains dis-
tributions at net asset value on the ex-dividend date, and do not
include sales charge; results would be lower if sales charge was
included.
</TABLE>
<PAGE>
<TABLE>
Performance Summary--Class B Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<C> <C> <C> <C> <C> <C>
11/29/85--12/31/85 $10.00 $10.19 -- -- + 1.90%
1986 10.19 11.03 $0.280 $0.250 +13.53
1987 11.03 10.52 0.222 0.496 + 1.75
1988 10.52 10.78 0.008 0.582 + 8.14
1989 10.78 11.95 -- 0.634 +17.01
1990 11.95 10.64 0.377 0.547 - 3.30
1991 10.64 12.93 -- 0.329 +24.96
1992 12.93 12.18 0.745 0.409 + 3.19
1993 12.18 12.44 1.013 0.467 +14.67
1/1/94--3/31/94 12.44 11.75 -- -- - 5.55
------ ------
Total $2.645 Total $3.714
Cumulative total return as of 3/31/94: +101.16%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures assume reinvestment of all capital gains distributions at
net asset value on the ex-dividend date, and do not reflect deduc-
tion of any sales charge; results would be lower if sales charge
was deducted.
</TABLE>
Average Annual Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 3/31/94 + 4.86% - 1.95%
Five Years Ended 3/31/94 +10.10 + 8.63
Inception (10/27/88)
through 3/31/94 + 9.83 + 8.47
[FN]
*Maximum sales charge is 6.5%.
**Assuming maximum sales charge.
<PAGE>
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 3/31/94 + 3.88% + 0.19%
Five Years Ended 3/31/94 + 8.96 + 8.96
Inception (11/29/85)
through 3/31/94 + 8.74 + 8.74
[FN]
*Maximum contingent deferred sales charge is 4% and is
reduced to 0% after 4 years.
**Assuming payment of applicable contingent deferred sales
charge.
PERFORMANCE DATA (concluded)
<TABLE>
Recent Performance Results*
<CAPTION>
12 Month 3 Month
3/31/94 12/31/93 3/31/93 % Change % Change
<S> <C> <C> <C> <C> <C>
ML Balanced Fund Class A Shares $11.67 $12.33 $12.64 +0.10%(1) -5.35%
ML Balanced Fund Class B Shares 11.75 12.44 12.70 +0.24(1) -5.55
ML Balanced Fund Class A Shares--Total Return +4.86(2) -5.35
ML Balanced Fund Class B Shares--Total Return +3.88(3) -5.55
S&P 500/ML BOAO Blended Index--Total Return** +2.24 -3.38
<FN>
*Investment results shown for the 3-month and 12-month periods are
before the deduction of any sales charge.
**An unmanaged broad-based index comprised of corporate bonds, govern-
ment bonds and common stocks. Total investment returns
for unmanaged indexes are based on estimates.
(1)Percent change includes reinvestment of $1.013 per share capital gains
distributions.
(2)Percent change includes reinvestment of $0.604 per share ordinary in-
come dividends and $1.013 per share capital gains distributions.
(3)Percent change includes reinvestment of $0.467 per share ordinary in-
come dividends and $1.013 per share capital gains distributions.
</TABLE>
<PAGE>
PORTFOLIO INFORMATION
Ten Largest Equity Holdings Percent of
As of March 31, 1994 Net Assets
Singer Co. N.V. 2.9%
Wheelabrator Technologies, Inc. 2.7
Telefonos de Mexico, S.A. de C.V. (ADR) 2.4
Computer Sciences Corp. 2.3
ADC Telecommunications, Inc. 1.8
MCI Communications Corp. 1.6
Danka Business Systems PLC (ADR) 1.6
Grupo Carso, S.A. de C.V. (ADR) 1.5
LDDS Communications Inc. (Class A) 1.5
Sunbeam-Oster Inc. 1.5
<TABLE>
SCHEDULE OF INVESTMENTS
<CAPTION>
Face Value Percent of
Industries Amount* Corporate Bonds Cost (Note 1a) Net Assets
<S> <C> <S> <C> <C> <C>
Financial $ 10,000,000 Ford Capital BV, 9.375% due 1/01/1998 $ 10,037,900 $ 10,890,640 1.4%
Services 5,000,000 Landeskreditbank, N.V., 7.875% due 4/15/2004 4,972,067 5,256,255 0.6
Financial 10,000,000 American General Financial Corp., 7.38%
Services- due 5/13/1997 9,993,200 10,275,000 1.3
Consumer
Tobacco 10,000,000 Philip Morris Companies, Inc., 7.75% due 5/01/1999 9,975,000 10,275,000 1.3
Total Investments in Corporate Bonds 34,978,167 36,696,895 4.6
<PAGE>
<CAPTION>
Country US Government & Agency Obligations
<S> <C> <S> <C> <C> <C>
United States Federal Home Loan Mortgage Corp.:
4,910,000 REMIC 1243-HP, 5.625% due 4/25/2024(a) 4,788,017 4,713,600 0.6
25,000,000 REMIC FHG 16PH, 6.75% due 4/15/2021(a) 25,390,625 23,468,750 2.9
20,000,000 Federal National Mortgage Association,
REMIC 1993 103PG, 6.75% due 5/25/2022(a) 20,262,500 18,400,313 2.3
5,000,000 Republic of Italy, 8.75% due 2/08/2001 5,373,050 5,388,690 0.7
US Treasury Notes:
55,000,000 7.875% due 8/15/2001 53,943,600 58,884,375 7.4
25,000,000 6.25% due 2/15/2003 25,710,937 24,125,000 3.0
35,000,000 5.75% due 8/15/2003 36,432,812 32,467,960 4.1
22,000,000 US Treasury STRIPS++, 6.81% due 5/15/2000(b) 15,607,802 14,826,988 1.8
Total Investments in US Government &
Agency Obligations 187,509,343 182,275,676 22.8
<CAPTION>
Foreign Obligations
<S> <C> <S> <C> <C> <C>
Australia A$ 13,100,000 Queensland Treasury Corp. Global, 8.00%
due 7/14/1999 9,812,507 9,230,822 1.2
Canada C$ 14,500,000 Government of Canada, 7.25% due 6/01/2003 10,739,024 10,005,964 1.2
Italy Buoni Poliennali del Tesoro:
Lit 5,050,000,000 9.00% due 10/01/1998 3,073,203 3,134,632 0.4
12,500,000,000 10.00% due 8/01/2003 7,957,684 8,079,078 1.0
Mexico Mxp 45,013,640 Mexican Cetes, 9.04% due 9/07/1995(b) 12,341,483 11,361,416 1.4
Spain Pta 600,000,000 Spanish Government Bonds, 10.50% due 10/30/2003 5,158,819 4,815,005 0.6
Sweden Skr 40,000,000 Government of Sweden, 6.50% due 6/05/2001 4,894,532 4,635,597 0.6
United UK Treasury Gilt:
Kingdom Pound 1,350,000 8.75% due 9/01/1997 2,267,919 2,106,366 0.3
Sterling 4,500,000 8.00% due 6/10/2003 7,536,136 6,826,707 0.8
Total Investments in Foreign Obligations 63,781,307 60,195,587 7.5
Total Investments in Corporate Bonds,
US Government & Agency & Foreign Obligations 286,268,817 279,168,158 34.9
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued)
<CAPTION>
Shares Value Percent of
Industries Held US Stocks & Warrants Cost (Note 1a) Net Assets
<S> <C> <S> <C> <C> <C>
Basic Industry
Chemicals 70,000 du Pont (E.I.) de Nemours & Co. $ 4,084,332 $ 3,710,000 0.5%
55,000 IMC Fertilizer Group, Inc. 2,523,134 2,172,500 0.3
125,000 Rohm & Haas Co. 6,791,460 6,828,125 0.9
Consumer-- 30,000 Duracell International Inc. 1,245,024 1,192,500 0.1
Miscellaneous
Containers 170,000 Crown Cork & Seal Co., Inc. 5,064,404 6,651,250 0.8
Forest Products 132,500 Willamette Industries, Inc. 4,954,250 6,260,625 0.8
Paper 153,000 Scott Paper Co. 6,566,724 6,406,875 0.8
Railroads 130,000 CSX Corp. 11,448,373 10,660,000 1.3
270,000 Southern Pacific Rail Co. 5,596,644 5,670,000 0.7
Total Basic Industry 48,274,345 49,551,875 6.2
Capital Spending
Aerospace 250,000 Allied-Signal Inc. 7,805,352 9,156,250 1.1
Auto & Truck 155,000 Consorcio G Groupo Dina, S.A. de C.V. (ADR)
(d)(1) 2,506,119 2,499,375 0.3
Capital Goods 1,140,000 Wheelabrator Technologies, Inc. 12,797,181 21,802,500 2.7
Communications 50,000 Motorola, Inc. 4,263,282 5,062,500 0.6
75,000 Tellabs, Inc. 3,080,391 4,068,750 0.5
<PAGE>
Computer Services 500,000 Computer Sciences Corp. 14,036,687 18,250,000 2.3
325,000 General Motors Corp. (Class E) 9,470,962 11,131,250 1.4
Computer Technology 22,800 Novell Inc. 509,503 410,400 0.1
Electrical Equipment 162,000 Emerson Electric Co. 9,124,573 9,618,750 1.2
35,000 W.W. Grainger 2,267,080 2,222,500 0.3
Electronics 50,000 Perkin Elmer Corp. 1,959,750 1,668,750 0.2
210,000 Solectron Corp. 5,168,718 6,326,250 0.8
Engineering & 210,000 Thermo Electron Corp. 8,634,781 8,163,750 1.0
Construction
Office Equipment 325,000 Danka Business Systems PLC (ADR)(d)(1) 9,952,519 12,634,375 1.6
Telecommunications 385,000++++ADC Telecommunications, Inc. 11,768,964 14,533,750 1.8
& Equipment 90,000 DSC Communications Corp. 5,136,258 4,522,500 0.6
Total Capital Spending 108,482,120 132,071,650 16.5
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued)
<CAPTION>
Shares Value Percent of
Industries Held US Stocks & Warrants Cost (Note 1a) Net Assets
<S> <C> <S> <C> <C> <C>
Consumer Goods & Services
Apparel 140,000 Phillips-Van Heusen Corp. $ 3,151,463 $ 4,882,500 0.6%
Appliances 675,000 Singer Co. N.V. (1) 17,730,688 23,203,125 2.9
639,500 Sunbeam-Oster Inc. 12,710,739 11,830,750 1.5
Automotive 100,000 Ford Motor Co. 5,841,808 5,875,000 0.7
150,000 Magna International Inc. 7,474,189 7,050,000 0.9
Beverages 19,100 Panamerican Beverage Inc. (1) 487,050 661,337 0.1
<PAGE>
Conglomerates 690,000++++Grupo Carso, S.A. de C.V. (ADR)(d)(1)++++++ 5,878,820 12,506,250 1.5
Healthcare-- 420,000 Humana Inc. 7,781,015 7,822,500 1.0
Products & Services 75,000 Vivra Inc. 1,398,603 1,837,500 0.2
Household Products 140,000 Procter & Gamble Co. 7,773,736 7,507,500 0.9
Medical 245,000++++Physician Corp. 4,985,524 6,431,250 0.8
Printing & Publishing 100,000 Gannett Co. 5,007,669 5,262,500 0.7
Retail 27,400 Heilig-Meyers Co. 341,708 849,400 0.1
Services 200,000 Block (H & R), Inc. 7,764,675 8,600,000 1.1
60,275 Kelly Services, Inc. (Class A) 1,715,024 1,401,394 0.2
Telecommunications 61,200 ALC Communications Corp. 1,560,600 2,034,900 0.3
100,000 GTE Corp. 3,204,870 3,100,000 0.4
515,750 LDDS Communications Inc. (Class A) 11,447,075 12,249,062 1.5
550,000 MCI Communications Corp. 15,538,597 12,856,250 1.6
70,000 Sprint Corp. 2,594,900 2,397,500 0.3
315,000 Telefonos de Mexico, S.A. de C.V. (ADR)
(d)(1) 12,692,065 18,978,750 2.4
Tires & Rubber 140,000 Bandag, Inc. (Class A) 6,400,395 6,755,000 0.9
350,000 Cooper Tire & Rubber Co. 7,181,026 8,925,000 1.1
Total Consumer Goods & Services 150,662,239 173,017,468 21.7
<PAGE>
Credit-Sensitive & Financial Services
Banking 80,000 Banco de Galicia y Buenos Aires S.A. (ADR)
(d)(1) 2,018,496 2,540,000 0.3
40,000 Banco Frances del Rio de la Plata S.A. (ADR)
(d)(1) 1,476,693 1,255,000 0.2
80,000 BankAmerica Corp. 3,457,141 3,150,000 0.4
50,000 Bank of New York Co. 2,404,161 2,550,000 0.3
122,500 Espirito Santo Financial Holding S.A. (ADR)
(d)(1) 3,447,435 3,613,750 0.4
130,000 Grupo Financiero Serfin S.A. 3,204,369 3,266,250 0.4
90,000 Istituto Mobiliare (ADR)(d)(1) 1,976,579 2,115,000 0.3
Telecommunications 35,000 International Telephone & Telegraph Corp. 2,966,908 3,001,250 0.4
Total Credit-Sensitive & Financial Services 20,951,782 21,491,250 2.7
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued)
<CAPTION>
Shares Value Percent of
Industries Held US Stocks & Warrants Cost (Note 1a) Net Assets
<S> <C> <S> <C> <C> <C>
Energy
Oil--Integrated 20,000 Mobil Oil Corp. $ 1,571,620 $ 1,487,500 0.2%
Oil International 70,000 Royal Dutch Petroleum Co. N.V. (ADR)(d)(1) 6,155,380 6,956,250 0.9
Petroleum 170,000 Phillips Petroleum Co. 4,864,574 4,526,250 0.5
Utilities--Electric 350,000 California Energy Co., Inc. 6,244,403 6,300,000 0.8
Total Energy 18,835,977 19,270,000 2.4
Total Investments in US Stocks & Warrants 347,206,463 395,402,243 49.5
<PAGE>
<CAPTION>
Foreign Stocks & Warrants
<S> <C> <S> <C> <C> <C>
Argentina
Utilities-- 560,000 Telecom Argentina S.A. (Class B) 3,305,379 3,108,311 0.4
Communications
Australia
Banking 335,942 National Australia Bank Ltd. 2,106,640 2,680,702 0.3
Multi-Industry 300,948 Pacific Dunlop, Ltd. 1,129,136 1,055,124 0.1
Retail 270,000 Coles Myer Ltd. (Warrants)(c) 808,121 357,822 0.0
Canada
Consumer--Durables 280,000 International Semi-Tech Microelectronics, Inc.
(Receipts)(e) 1,806,344 1,619,433 0.2
Media/Publishing 80,000 News Corp. (ADR)(d) 4,079,037 4,030,000 0.5
Retail Stores 50,000 Hudson's Bay Company (Ord.) 1,529,050 1,066,368 0.1
Chile
Utilities 11,000 Compania de Telefonos de Chile S.A. 1,274,185 981,750 0.1
Utilities--Electric 121,600 Distribuidora Chilectra Metropolitana S.A.
(ADR)(d)++++++ 3,323,793 4,354,496 0.6
France
Multi-Industry 3,750 Compagnie Generale des Eaux 1,401,331 1,709,177 0.2
Oil-Integrated 149,100 Societe Nationale Elf Aquitaine (ADR)(d) 5,303,144 4,864,387 0.6
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued)
<CAPTION>
Shares Value Percent of
Industries Held Foreign Stocks & Warrants Cost (Note 1a) Net Assets
<S> <C> <S> <C> <C> <C>
Germany
Automotive 50,000 Daimler-Benz AG (ADR)(d) $ 2,337,500 $ 2,543,750 0.3%
Machinery 2,000 Mannesmann AG 343,289 499,251 0.1
Hong Kong
Banking 274,108 HSBC Holdings PLC 1,613,351 3,086,123 0.4
Electronics 1,300,000 Johnson Electric Co. 2,603,189 3,179,636 0.4
Foods/Food 500,000 Dairy Farm International Holdings Ltd. 866,896 757,056 0.1
Processing
Multi-Industry 504,000 Hutchison Whampoa, Ltd. 1,010,407 2,054,534 0.3
Mexico
Engineering & 291,600 Empresas ICA Sociedad Controladora,
Construction S.A. de C.V. (ADR)(d) 5,751,141 6,998,400 0.9
Portugal
Banking 100,000 Banco Commercial Portugal (New)(ADR)(d) 1,342,303 1,562,500 0.2
97,000 Banco Commercial Portugal (Registered) 1,233,051 1,583,824 0.2
Singapore
Beverages 65,000 Fraser & Neave Ltd. (Ordinary) 730,745 696,873 0.1
Spain
Petroleum 60,000 Repsol S.A. 1,616,190 1,882,310 0.2
<PAGE>
Utilities--Electric 50,000 Empresa Nacional de Electricidad S.A. (ADR)(d) 701,000 2,537,500 0.3
United Kingdom
Business Services 50,000 Reuters Holding PLC (ADR)(d) 2,571,186 4,306,250 0.5
Consumer-- 50,000 Hanson PLC Sponsored (ADR)(d) 1,106,687 993,750 0.1
Miscellaneous
Electronics 100,000 Siebe PLC 886,652 877,507 0.1
Engineering & 510,000 Huntingdon International Holdings PLC (ADR)(d) 12,702,548 3,123,750 0.4
Construction
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded)
<CAPTION>
Shares Value Percent of
Industries Held Foreign Stocks & Warrants Cost (Note 1a) Net Assets
<S> <C> <S> <C> <C> <C>
Venezuela
Automotive & 657,500 Siderurgica Venezolana SIVENSA
Equipment S.A.I.C.A.-S.A.C.A. (ADR)(Warrants)(c)(d)++++++ $ 1,544,625 $ 19,725 0.0%
Total Investments in Foreign Stocks & Warrants 65,026,920 62,530,309 7.7
Total Investments in US & Foreign Stocks
& Warrants 412,233,383 457,932,552 57.2
<PAGE>
<CAPTION>
Face
Amount* Short-Term Securities
<S> <C> <S> <C> <C> <C>
Commercial $30,000,000 du Pont (E.I.) de Nemours & Co., 3.49% due
Paper** 4/25/1994 29,930,200 29,930,200 3.7
General Electric Capital Corp.:
635,000 3.50% due 4/01/1994 635,000 635,000 0.1
20,609,000 3.53% due 4/04/1994 20,602,938 20,602,938 2.6
Total Investments in Short-Term Securities 51,168,138 51,168,138 6.4
Total Investments $749,670,338 788,268,848 98.5
============
Other Assets Less Liabilities 12,171,258 1.5
------------ ------
Net Assets $800,440,106 100.0%
============ ======
<FN>
(a)Real Estate Mortgage Investment Conduits (REMIC).
(b)Represents the yield-to-maturity on this zero coupon issue.
(c)Warrants entitle the Fund to purchase a predetermined
number of shares of common stock. The purchase price and
number of shares are subject to adjustment under certain
conditions until the expiration date.
(d)American Depositary Receipt (ADR).
(e)Receipts evidence payment by the Fund of 40% of the pur-
chase price of Class A Shares of International Semi-Tech
Microelectronics, Inc. The Fund is obligated to pay the
remaining 60%, approximately $2,700,000 over the next
two years.
*Denominated in US dollars unless otherwise indicated.
**Commercial Paper is traded on a discount basis; the interest rates
shown are the discount rates paid at the time of purchase by the Fund.
++Separate Trading of Registrated Interest and Principal of Securities
(STRIPS).
++++Non-income producing security.
++++++Restricted security pursuant to Rule 144A.
(1)Consistent with the general policy of the Securities and Exchange
Commission, the nationality or domicile of an issuer for determina-
tion of foreign issuer status may be (i) the country under whose laws
the issuer is organized, (ii) the country in which the issuer's securities
are principally traded, or (iii) the country in which the issuer derives
a significant proportion (at least 50%) of its revenue or profits from
goods produced or sold, investments made, or services performed in
the country, or in which at least 50% of the assets of the issuer are
situated.
See Notes to Financial Statements.
</TABLE>
<PAGE>
FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Statement of Assets and Liabilities as of March 31, 1994
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$749,670,338) (Note 1a) $788,268,848
Receivables:
Securities sold $ 17,442,878
Interest 3,296,857
Capital shares sold 711,423
Dividends 406,028 21,857,186
------------
Deferred organization expenses (Note 1f) 2,683
Prepaid registration fees and other assets (Note 1f) 144,208
------------
Total assets 810,272,925
------------
Liabilities: Payables:
Securities purchased 5,024,240
Capital shares redeemed 2,758,319
Distributor (Note 2) 674,136
Investment adviser (Note 2) 448,623 8,905,318
------------
Accrued expenses and other liabilities 927,501
------------
Total liabilities 9,832,819
------------
Net Assets: Net assets $800,440,106
============
Net Assets Class A Common Stock, $0.01 par value, 500,000,000 shares authorized $ 34,412
Consist of: Class B Common Stock, $0.01 par value, 500,000,000 shares authorized 646,960
Paid-in capital in excess of par 702,898,369
Undistributed investment income--net 2,421,693
Undistributed realized capital gains on
investments and foreign currency transactions--net 55,845,048
Unrealized appreciation on investments and foreign currency
transactions--net 38,593,624
------------
Net assets $800,440,106
============
Net Asset Class A--Based on net assets of $40,175,446 and 3,441,241 shares
Value: outstanding $ 11.67
============
Class B--Based on net assets of $760,264,660 and 64,695,953 shares
outstanding $ 11.75
============
See Notes to Financial Statements.
</TABLE>
<PAGE>
FINANCIAL INFORMATION (continued)
<TABLE>
<CAPTION>
Statement of Operations for the Six Months Ended March 31, 1994
<S> <S> <C> <C>
Investment Interest and discount earned $ 10,813,618
Income Dividends (net of $130,379 foreign withholding tax) 2,886,327
(Notes ------------
1d & 1e): Total income 13,699,945
------------
Expenses: Distribution fees--Class B (Note 2) 4,093,753
Investment advisory fees (Note 2) 2,716,119
Transfer agent fees--Class B (Note 2) 486,429
Custodian fees 91,000
Printing and shareholder reports 73,439
Accounting services (Note 2) 35,921
Professional fees 31,131
Registration fees (Note 1f) 28,737
Transfer agent fees--Class A (Note 2) 21,255
Directors' fees and expenses 19,956
Amortization of organization expenses (Note 1f) 798
Pricing fees 798
Other 8,781
------------
Total expenses 7,608,117
------------
Investment income--net 6,091,828
------------
Realized & Realized gain from:
Unrealized Investments--net $ 61,211,346
Gain Foreign currency transactions--net 968,386 62,179,732
(Loss) on ------------
Investments Change in unrealized appreciation/depreciation on:
& Foreign Investments--net (67,485,904)
Currency Foreign currency transactions--net 31,186 (67,454,718)
Transac- ------------ ------------
tions--Net Net realized and unrealized loss on investments and foreign currency
Notes 1b, transactions (5,274,986)
1e & 3): ------------
Net Increase in Net Assets Resulting from Operations $ 816,842
============
See Notes to Financial Statements.
</TABLE>
<PAGE>
FINANCIAL INFORMATION (continued)
<TABLE>
Statements of Changes in Net Assets
<CAPTION>
For the
Six Months For the
Ended Year Ended
March 31, September 30,
Increase (Decrease) in Net Assets: 1994 1993
<S> <S> <C> <C>
Operations: Investment income--net $ 6,091,828 $ 16,570,858
Realized gain on investments and
foreign currency transactions--net 62,179,732 82,929,610
Change in unrealized appreciation/depreciation on investments and
foreign currency transactions--net (67,454,718) 14,121,027
------------ ------------
Net increase in net assets resulting from operations 816,842 113,621,495
------------ ------------
Dividends & Investment income--net:
Distri- Class A (656,642) (994,119)
butions to Class B (7,759,759) (17,314,603)
Shareholders Realized gain on investments--net:
(Note 1g): Class A (4,103,194) (1,508,643)
Class B (75,192,306) (59,542,543)
------------ ------------
Net decrease in net assets resulting from dividends
and distributions to shareholders (87,711,901) (79,359,908)
------------ ------------
Capital Share Net increase (decrease) in net assets derived from capital
Transactions share transactions 15,692,257 (69,858,642)
(Note 4): ------------ ------------
Net Assets: Total decrease in net assets (71,202,802) (35,597,055)
Beginning of period 871,642,908 907,239,963
------------ ------------
End of period* $800,440,106 $871,642,908
============ ============
<FN>
*Undistributed investment income--net $ 2,421,693 $ 4,746,266
============ ============
See Notes to Financial Statements.
</TABLE>
<PAGE>
FINANCIAL INFORMATION (continued)
<TABLE>
Financial Highlights
<CAPTION>
Class A
For the
The following per share data and ratios have been Six Months
derived from information provided in the financial statements. Ended
March 31, For the Year Ended September 30,
Increase (Decrease) in Net Asset Value: 1994 1993 1992 1991 1990
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 13.02 $ 12.57 $ 11.94 $ 10.61 $ 11.93
Operating -------- -------- -------- -------- --------
Performance: Investment income--net .17 .43 .47 .70 .64
Realized and unrealized gain (loss) on investments
and foreign currency transactions (1)--net (.09) 1.29 .61 1.63 (1.41)
-------- -------- -------- -------- --------
Total from investment operations .08 1.72 1.08 2.33 (.77)
-------- -------- -------- -------- --------
Less dividends and distributions:
Investment income--net (.20) (.39) (.45) (.62) (.55)
Realized gain on investments--net (1.23) (.88) -- (.38) --
-------- -------- -------- -------- --------
Total dividends and distributions (1.43) (1.27) (.45) (1.00) (.55)
-------- -------- -------- -------- --------
Net asset value, end of period $ 11.67 $ 13.02 $ 12.57 $ 11.94 $ 10.61
======== ======== ======== ======== ========
Total Based on net asset value per share 0.24%++ 14.62% 9.23% 23.14% (6.86%)
Investment ======== ======== ======== ======== ========
Return:**
Ratios to Expenses .79%* .83% .81% .85% .83%
Average ======== ======== ======== ======== ========
Net Assets: Investment income--net 2.38%* 3.09% 3.18% 3.64% 5.12%
======== ======== ======== ======== ========
Supplemental Net assets, end of period (in thousands) $ 40,175 $ 40,688 $ 20,320 $ 12,839 $ 4,511
Data: ======== ======== ======== ======== ========
Portfolio turnover 30.76% 79.55% 65.40% 173.76% 163.56%
======== ======== ======== ======== ========
<FN>
*Annualized.
**Total investment returns exclude the effects of sales loads.
++Aggregate total investment return.
(1)Foreign currency transaction amounts have been reclassified
to conform to the 1994 presentation.
See Notes to Financial Statements.
</TABLE>
<PAGE>
FINANCIAL INFORMATION (concluded)
<TABLE>
Financial Highlights (concluded)
<CAPTION>
Class B
For the
The following per share data and ratios have been Six Months
derived from information provided in the financial statements. Ended
March 31, For the Year Ended September 30,
Increase (Decrease) in Net Asset Value: 1994 1993 1992 1991 1990
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 13.09 $ 12.62 $ 11.99 $ 10.60 $ 11.91
Operating -------- -------- -------- -------- ----------
Performance: Investment income--net .09 .24 .29 .39 .50
Realized and unrealized gain (loss) on
investments and foreign currency
transactions (1)--net (.07) 1.37 .66 1.83 (1.39)
-------- -------- -------- -------- ----------
Total from investment operations .02 1.61 .95 2.22 (.89)
-------- -------- -------- -------- ----------
Less dividends and distributions:
Investment income--net (.13) (.26) (.32) (.45) (.42)
Realized gain on investments--net (1.23) (.88) -- (.38) --
-------- -------- -------- -------- ----------
Total dividends and distributions (1.36) (1.14) (.32) (.83) (.42)
-------- -------- -------- -------- ----------
Net asset value, end of period $ 11.75 $ 13.09 $ 12.62 $ 11.99 $ 10.60
======== ======== ======== ======== ==========
Total Based on net asset value per share (0.23%)++ 13.49% 8.01% 21.91% (7.79%)
Investment ======== ======== ======== ======== ==========
Return:**
Ratios to Expenses, excluding distribution fees .81%* .85% .85% .90% .86%
Average ======== ======== ======== ======== ==========
Net Assets: Expenses 1.81%* 1.85% 1.85% 1.90% 1.86%
======== ======== ======== ======== ==========
Investment income--net 1.36%* 1.99% 2.10% 3.37% 3.90%
======== ======== ======== ======== ==========
Supplemental Net assets, end of period (in thousands) $760,265 $830,955 $886,920 $986,895 $1,171,567
Data: ======== ======== ======== ======== ==========
Portfolio turnover 30.76% 79.55% 65.40% 173.76% 163.56%
======== ======== ======== ======== ==========
<PAGE>
<FN>
*Annualized.
**Total investment returns exclude the effects of sales loads.
++Aggregate total investment return.
(1)Foreign currency transaction amounts have been reclassified to
conform to the 1994 presentation.
See Notes to Financial Statements.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
Merrill Lynch Retirement Benefit Investment Program, Inc., Full
Investment Portfolio does business under the name Merrill Lynch
Balanced Fund for Investment and Retirement. Merrill Lynch Balan-
ced Fund for Investment and Retirement (the "Fund") is registered
under the Investment Company Act of 1940 as a diversified, open-
end investment management company. The Fund offers both Class A
and Class B Shares. Class A Shares are sold with a front-end
sales charge. Class B Shares may be subject to a contingent de-
ferred sales charge. Both classes of shares have identical vot-
ing, dividend, liquidation and other rights and the same terms
and conditions, except that Class B Shares bear certain expenses
related to the distribution of such shares and have exclusive
voting rights with respect to matters relating to such dis-
tribution expenditures. The following is a summary of signifi-
cant accounting policies followed by the Fund.
(a) Valuation of investments--Portfolio securities and options
which are traded on stock exchanges are valued at the last sale
price 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 valu-
ed at the last quoted bid prices at the close of trading on the
New York Stock Exchange on each day by brokers that make markets
in the securities. Portfolio securities which are traded both in
the over-the-counter market and on a stock exchange are valued ac-
cording to the broadest and most representative market. Short-
term securities are valued at amortized cost, which approximates
market. Securities and assets for which market quotations are
not readily available are valued at fair value as determined in
good faith by or under the direction of the Board of Directors of
the Fund.
<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 cur-
rencies are valued at the exchange rate at the end of the period.
Foreign currency transactions are the result of settling (real-
ized) and valuing (unrealized) assets and liabilities expressed
in foreign currencies into US dollars. Realized and unrealized
gains or losses from investments include the effects of foreign
exchange sales on investments.
The Fund is authorized to enter into forward foreign exchange con-
tracts as a hedge against either specific transactions or portfolio
positions. Such contracts are not entered on the Fund's records.
However, the effect on operations is recorded from the date the Fund
enters into such contracts. Premium or discount is amortized over
the life of the contracts.
The Fund may also purchase or sell listed or over-the-counter for-
eign currency options, foreign currency futures and related options
on foreign currency futures as a short or long hedge against possi-
ble variations in foreign exchange rates. Such transactions may be
effected with respect to hedges on non-US dollar denominated secur-
ities owned by the Fund, sold by the Fund but not yet delivered, or
committed or anticipated to be purchased by the Fund.
(c) Options--When the Fund sells an option, an amount equal to the
premium received by the Fund is reflected as an asset and an equiv-
alent 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 sold through an exercise of an option, the re-
lated premium received is deducted from the basis of the security
sold. When an option expires (or the Fund enters into a closing
transaction), the Fund realizes a gain or loss on the option to
the extent of the premiums received or paid (or loss or gain to
the extent the cost of the closing transaction is less than or
greater than the premium paid or received).
Written and purchased options are non-income producing investments.
(d) Income taxes--It is the Fund's policy to comply with the re-
quirements 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.
<PAGE>
(e) Security transactions and investment income--Security trans-
actions are recorded on the dates the transactions are entered in-
to (the trade dates). Dividend income is recorded on the ex-div-
idend date, except that if the ex-dividend date has passed, certain
dividends from foreign securities are recorded as soon as the Fund
is informed of the ex-dividend date. Interest income (including
amortization of discount) is recognized on the accrual basis.
Realized gains and losses on security transactions are determined
on the identified cost basis.
NOTES TO FINANCIAL STATEMENTS (concluded)
(f) Deferred organization expenses and prepaid registration fees--
Deferred organization expenses are charged to expense on a straight-
line basis over a five-year period. Costs related to the organ-
ization of the second class of shares are charged to expense over
a period not exceeding five years. Prepaid registration fees are
charged to expense as the related shares are issued.
(g) Dividends and distributions--Dividends and distributions paid
by the Fund are recorded on the ex-dividend dates.
(h) Reclassifications--Certain 1993 amounts have been reclassified
to conform to the 1994 presentation.
2. Investment Advisory Agreement and
Transaction with Affiliates:
The Fund has entered into an Investment Advisory Agreement with
Merrill Lynch Asset Management, L.P. ("MLAM"). Effective January 1,
1994, the investment advisory business of MLAM was reorganized
from a corporation to a limited partnership. Both prior to and
after the reorganization, ultimate control of MLAM was vested with
Merrill Lynch & Co., Inc. ("ML & Co."). The general partner of
MLAM is Princeton Services, Inc., an indirect wholly-owned sub-
sidiary of ML & Co. The limited partners are ML & Co. and Merrill
Lynch Investment Management, Inc. ("MLIM"), which is also an in-
direct wholly-owned subsidiary of ML & Co. The Fund has also
entered into a Distribution Agreement and a Distribution Plan
with Merrill Lynch Funds Distributor, Inc. ("MLFD" or "Distri-
butor"), a wholly-owned subsidiary of MLIM.
<PAGE>
MLAM is responsible for the management of the Fund's portfolio
and provides the necessary personnel, facilities, equipment and
certain other services necessary to the operations of the Fund.
For such services, the Fund pays a monthly fee based upon the
average daily value of the Fund's net assets at the following
annual rates: 0.65% of the average daily net assets not exceeding
$500 million; 0.60% of the average daily net assets exceeding
$500 million but not exceeding $1.5 billion; 0.55% of the av-
erage daily net assets exceeding $1.5 billion but not exceeding
$2.5 billion; 0.50% of the average daily net assets exceeding $2.5
billion but not exceeding $3.5 billion; and 0.45% of the average
daily net assets exceeding $3.5 billion. The most restrictive an-
nual expense limitation requires that the Adviser reimburse the
Fund to the extent the Fund's expenses (excluding interest, taxes,
distribution fees, brokerage fees and commissions, and extraor-
dinary items) exceed 2.5% of the Fund's first $30 million of av-
erage daily net assets, 2.0% of the next $70 million of average
daily net assets, and 1.5% of the average daily net assets in
excess thereof. No payment will be made to MLAM during any fis-
cal year which will cause such expenses to exceed the most restric-
tive expense limitation applicable at the time of such payment.
Pursuant to a Distribution Plan (the "Distribution Plan") adopted
by the Fund in accordance with Rule 12b-1 under the Investment
Company Act of 1940, the Fund pays the Distributor an ongoing
account maintenance fee and distribution fee, which are accrued
daily and paid monthly at the annual rates of 0.25% and 0.75%,
respectively, of the average daily net assets of the Class B
Shares of the Fund. Pursuant to a sub-agreement with the Dis-
tributor, Merrill Lynch provides account maintenance and distri-
bution services to the Fund with respect to Class B Shares. As
authorized by the Plan, the Distributor has entered into an agree-
ment with Merrill Lynch, Pierce, Fenner & Smith Inc. ("MLPF&S"),
which provides for the compensation of MLPF&S for providing dis-
tribution-related services to the Fund.
For the six months ended March 31, 1994, MLFD earned under-
writing discounts of $2,294, and MLPF&S received dealer con-
cessions of $35,241 on sales of the Fund's Class A Shares.
MLPF&S received contingent deferred sales charges of $78,329
relating to transactions in Class B Shares and $53,670 in com-
missions on the execution of portfolio security transactions
for the Fund during the period.
Financial Data Services, Inc. ("FDS"), a wholly-owned subsidiary
of ML & Co., is the Fund's transfer agent.
Accounting services are provided to the Fund by MLAM at cost.
<PAGE>
Certain officers and/or directors of the Fund are officers and/
or directors of MLIM, MLPF&S, FDS, MLFD, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securi-
ties, for the six months ended March 31, 1994 were $250,984,195
and $344,304,826, respectively.
Net realized and unrealized gains (losses) as of March 31, 1994
were as follows:
Unrealized
Realized Gains
Gains (Losses)
Long-term investments $ 61,211,346 $ 38,598,510
Options written 21,243 --
Foreign currency
transactions 947,143 (4,886)
------------ ------------
Total $ 62,179,732 $ 38,593,624
============ ============
As of March 31, 1994, net unrealized appreciation for Federal in-
come tax purposes aggregated $38,598,510, of which $75,149,692 re-
lated to appreciated securities and $36,551,182 related to de-
preciated securities. The aggregate cost of investments less premiums
received for options written, at March 31, 1994 for Federal income
tax purposes was $749,670,338.
Transactions in call options written for the six months ended
March 31, 1994 were as follows:
Par Value/Shares
Covered by Premiums
Written Options Received
Outstanding options at
beginning of period -- --
Options written 25,800 $ 38,999
Options closed (10,400) (10,154)
Options exercised (1,800) (15,010)
Options expired (13,600) (13,835)
------------ ------------
Outstanding options at
end of period -- $ --
============ ============
<PAGE>
4. Capital Share Transactions:
Net increase (decrease) in net assets derived from capital share
transactions was $15,692,257 for the six months ended March 31,
1994 and ($69,858,642) for the year ended September 30, 1993, re-
spectively.
Transactions in capital shares for Class A and Class B
Shares were as follows:
Class A Shares for the Six Months Dollar
Ended March 31, 1994 Shares Amount
Shares sold 1,016,163 $ 12,847,884
Shares issued to sharehold-
ers in reinvestment of
dividends and distributions 376,995 4,535,252
------------ -------------
Total issued 1,393,158 17,383,136
Shares redeemed (1,077,993) (13,288,826)
------------ -------------
Net increase 315,165 $ 4,094,310
============ =============
Class A Shares for the Year Dollar
Ended September 30, 1993 Shares Amount
Shares sold 2,695,028 $ 33,091,210
Shares issued to share-
holders in reinvestment
of dividends 161,050 1,956,633
------------ -------------
Total issued 2,856,078 35,047,843
Shares redeemed (1,346,924) (17,015,867)
------------ -------------
Net increase 1,509,154 $ 18,031,976
============ =============
Class B Shares for the Six Months Dollar
Ended March 31, 1994 Shares Amount
Shares sold 1,673,591 $ 21,175,801
Shares issued to sharehold-
ers in reinvestment of
dividends and distributions 5,798,154 70,389,583
------------ -------------
Total issued 7,471,745 91,565,384
Shares redeemed (6,265,393) (79,967,437)
------------ -------------
Net increase 1,206,352 $ 11,597,947
============ =============
<PAGE>
Class B Shares for the Year Dollar
Ended September 30, 1993 Shares Amount
Shares sold 2,722,243 $ 34,400,436
Shares issued to share-
holders in reinvestment
of dividends 5,336,253 65,136,704
------------ -------------
Total issued 8,058,496 99,537,140
Shares redeemed (14,832,136) (187,427,758)
------------ -------------
Net decrease (6,773,640) $ (87,890,618)
============ =============
5. Loan Securities:
At March 31, 1994, the Fund held US Treasury Bonds having an aggregate
value of approximately $5,300,000 as collateral for portfolio securities
loaned having a market value of approximately $4,030,000.
6. Commitments:
At March 31, 1994, the Fund had entered into forward exchange contracts
under which it had agreed to sell various foreign currencies with approx-
imate values of $765,000.
APPENDIX: GRAPHIC AND IMAGE MATERIAL
Item 1:
Portfolio Summary
Sector Representation
As a Percentage of Equities
As of March 31, 1994
A bar graph depicting the Fund's sector representation as a
percentage of equities as of March 31, 1994.
Basic Industry 10.6% Consumer Goods & Services 27.0%
Energy 4.2% Capital Spending 28.2%
Foreign 15.0%
Credit-Sensitive &
Financial Services 15.0%
<PAGE>
Security Diversification
As of March 31, 1994
A bar graph depicting the Fund's security diverseification as of
March 31, 1994.
Stocks 57.3% US 48.7%
Non US 8.6%
Bonds 34.8% US 27.3%
Non 7.5%
Cash & Cash Equivalents 7.9%
