MERRILL
LYNCH
BALANCED
FUND
For Investment and Retirement
FUND LOGO
Quarterly Report December 31, 1993
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
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.
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
Sector Representation
As a Percentage of Equities
As of December 31, 1993
GRAPHIC AND IMAGE MATERIALS APPEAR HERE. SEE APPENDIX ITEM 1.
Security Diversification
As of December 31, 1993
GRAPHIC AND IMAGE MATERIALS APPEAR HERE. SEE APPENDIX ITEM 2.
As of December 31, 1993
Currency Diversification Percent of
Net Assets
US Dollar 80.9%
Mexican Peso 5.2
Hong Kong Dollar 4.0
Canadian Dollar 1.7
Australian Dollar 1.4
Spanish Peseta 1.2
French Franc 1.0
UK Sterling 0.9
Argentinian Peso 0.9
Dutch Guilder 0.8
Italian Lira 0.8
Chilean Peso 0.6
Swedish Krona 0.5
German Mark 0.1
Venezuelan Bolivar 0.0
US Common Stock Investments S&P
Fund 500*
After Tax Profit Margin 7.0% 5.7%
Yield 1.6% 2.4%
Price/Earnings Ratio** 22.0 19.0
Return on Equity 16.9% 13.1%
Average Capitalization (in billions) $9.1 $6.5
Earnings Growth Rate (5 yr. average) 8.0% 4.0%
[FN]
*An unmanaged broad-based index comprised of common stocks.
**Based on 1993 earnings estimates.
<PAGE>
US Fixed-Income Investments Merrill Lynch
Fund BOAO Index*
Average Maturity 10.4 Years 10.1 Years
Asset Breakdown:
US Treasuries/Agencies 66.3% 76.4%
Corporates 13.5% 23.6%
International Governments 20.2% --
[FN]
*An unmanaged market-weighted corporate and Government master
bond index reflecting approximately 97% of total outstanding US bonds.
DEAR SHAREHOLDER
During the December quarter, the Fund's asset
mix moved slightly in favor of equities and away
from bonds. At year-end 1993, equities were up
to 64.6% of net assets from 61.9% on September 30,
while bonds declined from 33.9% to 32.5%, and
cash equivalents decreased from 4.2% to 2.9%.
US Economic Outlook
Early in the December quarter, there were
numerous conflicting economic indicators that
resulted in a lack of consensus regarding the
strength of the ongoing economic expansion.
Specifically, automobile production and housing
sales started to accelerate as consumers began
to demonstrate greater confidence as a result of
better employment data. Since automobile and
housing are bellwether industries, it appeared
likely that other industry groups would follow.
<PAGE>
On the other hand, other indicators pointed to
the weak export market, a still-low domestic
savings rate, modest loan growth, fragile con-
sumer confidence and ongoing downsizings and
restructurings, which were eliminating jobs by
the thousands. At the same time, the monthly
household employment survey was being restruc-
tured in a way that would trigger a sizable jump
in the official unemployment rate early in 1994.
On top of these factors, the full impact of the
1993 Federal income tax increase had not yet
been felt, and payroll taxes are expected to rise in
1994. Furthermore, US Government spending
cuts, particularly for military spending, would
add to the unemployment problem and create
fiscal drag. Gross domestic product (GDP) growth
exceeded earlier expectations judging by the
increased estimates for the fourth quarter. Some
GDP estimates for 1994 have been revised upward,
even though the first half of the year could trail
the second half of 1993. The expectation of con-
tinued but more moderate growth in the first half
of 1994 represents a consensus view, which in
part explains the equity market strength as the
quarter unfolded.
Investment Strategy
Recognizing the improving underlying condition
of the US economy, we have begun to build the
Fund's basic industry portfolio segment, empha-
sizing the chemical, rail and paper/wood products
groups, which are impacted by economic activity.
Following price strength in the telecommunica-
tions equipment stocks, we reduced these posi-
tions only to rebuild them following moderate
price corrections. Credit-sensitive issues in the
United States were trimmed in favor of banks
outside the United States which have greater
potential to benefit from declining interest rates
and more rapid loan growth than seems likely
domestically. The expectation of more rapidly
declining rates outside the United States resulted
in the addition of bonds denominated in Spanish
pesetas and Mexican pesos, with assets with-
drawn from Japanese yen-based bonds, which
were sold to realize profits. Yen bond yields
had declined to very low levels as attempts were
made to restart the economic engine in Japan.
We expect the US dollar to strengthen relative to
the yen.
<PAGE>
Among equity markets outside the United States,
we continued to emphasize those geographical
areas which are likely to grow at rates above
the United States, specifically, Latin America and
the Pacific Rim, excluding Japan. These issues
are no longer as undervalued as they were earlier
in the year, but they appear more attractive than
many of their US counterparts. Before year-end,
we began to secure profits in Hong Kong, which
produced well above-average returns during the
year. The favorable vote on the North American
Free Trade Agreement has improved the outlook
for companies engaged in cross-border trade
and should also help to prevent inflation from
eroding the buying power of currency throughout
North America.
In Conclusion
The US economic outlook, which we had described
as lackluster a few months ago, is now beginning
to appear brighter, but we do not expect to see
a robust economy in the next few quarters. None-
theless, corporate profits stand a good chance
of expanding at 10% or more in 1994 because
of continued gains in productivity. Inflation on a
global basis continues to decline, and we remain
optimistic regarding equity prices in 1994. Our
favorable opinion on bond prices is limited to
the early part of the year as ongoing economic
strength could eventually cause bond investors to
anticipate higher yield levels.
We appreciate your continued support of Merrill
Lynch Balanced Fund for Investment and Retire-
ment, and we look forward to sharing our strategy
with you in our upcoming semi-annual report
to shareholders.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Denis B. Cummings)
Denis B. Cummings
Vice President and Portfolio Manager
January 24, 1994
<PAGE>
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
Denis B. Cummings, Vice President and
Portfolio Manager
Donald C. Burke, Vice President
Gerald M. Richard, Treasurer
Jerry Weiss, Secretary
Custodian
National Westminster Bank NJ
10 Exchange Place
Jersey City, New Jersey 07302
Transfer Agent
Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, Florida 32246-6484
(800) 637-3863
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
------- -------
Total $ 2.143 Total $ 3.457
Cumulative total return as of 12/31/93: +75.72%**
<PAGE>
<FN>
*Figures may include short-term capital gains distributions.
**Figures assume reinvestment of all dividends and capital gains distributions at net asset value on the ex-dividend date,
and do not include sales charge; results would be lower if sales charge was included.
</TABLE>
<TABLE>
Performance Summary--Class B Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<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
------- -------
Total $ 2.645 Total $ 3.714
Cumulative total return as of 12/31/93: +112.97%**
<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 deduction 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 12/31/93 +15.93% + 8.40%
Five Years Ended 12/31/93 +11.99 +10.49
Inception (10/27/88)
through 12/31/93 +11.50 +10.06
[FN]
*Maximum sales charge is 6.5%.
**Assuming maximum sales charge.
<PAGE>
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 12/31/93 +14.67% +10.67%
Five Years Ended 12/31/93 +10.84 +10.84
Inception (11/29/85)
through 12/31/93 + 9.79 + 9.79
[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
12/31/93 9/30/93 12/31/92 % Change % Change
<S> <C> <C> <C> <C> <C>
ML Balanced Fund Class A Shares $12.33 $13.02 $12.08 +10.66%(1) +2.67%(1)
ML Balanced Fund Class B Shares 12.44 13.09 12.18 +10.65(1) +2.96(1)
ML Balanced Fund Class A Shares--Total Return +15.93(2) +5.91(3)
ML Balanced Fund Class B Shares--Total Return +14.67(4) +5.63(5)
S&P 500/ML BOAO Blended Index--Total Return** +10.58 +1.03
<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, government 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 income dividends and $1.013 per share capital gains
distributions.
(3)Percent change includes reinvestment of $0.411 per share ordinary income dividends and $1.013 per share capital gains
distributions.
(4)Percent change includes reinvestment of $0.467 per share ordinary income dividends and $1.013 per share capital gains
distributions.
(5)Percent change includes reinvestment of $0.341 per share ordinary income dividends and $1.013 per share capital gains
distributions.
</TABLE>
PORTFOLIO INFORMATION
Ten Largest Equity Holdings Percent of
as of December 31, 1993 Net Assets
Singer Co. N.V. 2.9%
Telefonos de Mexico, S.A. de C.V. (ADR) 2.7
Wheelabrator Technologies, Inc. 2.3
Crown Cork & Seal Co., Inc. 2.0
Ford Motor Co. 1.9
Bank of New York Co.* 1.9
Computer Sciences Corp. 1.8
MCI Communications Corp. 1.8
Grupo Carso, S.A. de C.V. (ADR) 1.7
Emerson Electric Co. 1.5
<PAGE>
[FN]
* Includes Warrants.
<TABLE>
SCHEDULE OF INVESTMENTS
<CAPTION>
Face Percent of
Industries Amount* Corporate Bonds Cost Value Net Assets
<S> <C> <S> <C> <C> <C>
Financial $ 10,000,000 Ford Capital BV, 9.375% due 1/01/1998 $ 10,037,900 $ 11,287,510 1.3%
Services 5,000,000 Landeskreditbank, N.V., 7.875% due 4/15/2004 4,972,067 5,600,000 0.6
Financial 10,000,000 American General Financial Corp., 7.38%
Services-- due 5/13/1997 9,993,200 10,575,000 1.2
Consumer
Tobacco 10,000,000 Philip Morris Companies, Inc., 7.75%
due 5/01/1999 9,975,000 10,700,000 1.2
Total Investments in Corporate Bonds 34,978,167 38,162,510 4.3
<CAPTION>
Country US Government & Agency Obligations
<S> <C> <S> <C> <C> <C>
United States Federal Home Loan Mortgage Corp.:
4,659,000 REMIC 1243-HP, 7.50% due 11/15/2004(a) 4,547,621 4,746,356 0.5
25,000,000 REMIC FHG 16PH, 6.75% due 4/15/2021(a) 25,390,625 24,890,625 2.8
20,000,000 Federal National Mortgage Association, REMIC
1993 103PG, 6.75% due 5/25/2022(a) 20,262,500 19,659,375 2.2
5,000,000 Republic of Italy, 8.75% due 2/08/2001 5,373,050 5,681,260 0.7
US Treasury Notes:
55,000,000 7.875% due 8/15/2001 53,943,600 62,493,860 7.1
25,000,000 6.25% due 2/15/2003 25,710,937 25,820,325 3.0
35,000,000 5.75% due 8/15/2003 36,432,812 34,879,705 4.0
22,000,000 US Treasury STRIPS++, 4.79% due 5/15/2000(b) 15,391,812 15,537,192 1.8
Total Investments in US Government &
Agency Obligations 187,052,957 193,708,698 22.1
<CAPTION>
Foreign Obligations
<S> <S> <C> <S> <C> <C> <C>
Australia A$ 4,000,000 Queensland Treasury Corp. Global, 8.00%
due 7/14/1999 2,977,727 2,896,040 0.3
Canada C$ 14,500,000 Government of Canada, 7.25% due 6/01/2003 10,739,024 11,462,743 1.3
France Ffr 32,500,000 Obligations Assimables de Tresor, 8.50% due
4/25/2003 6,538,792 6,603,714 0.8
Italy Lit 10,500,000,000 Buoni Poliennali del Tesoro, 12.00%
due 1/01/1998 6,889,745 6,825,959 0.8
Mexico Mxp 45,013,640 Mexican Cetes, 12.60% due 9/07/1995(b) 11,984,230 12,177,603 1.4
<PAGE>
Spain Pta 600,000,000 Spanish Government Bonds, 10.50% due 10/30/2003 5,158,819 4,854,946 0.6
Sweden Skr 34,000,000 Government of Sweden, 10.75% due 1/23/1997 4,797,378 4,571,271 0.5
United Pound
Kingdom Sterling 1,350,000 UK Treasury Gilt, 8.75% due 9/01/1997 2,267,919 2,203,559 0.2
Total Investments in Foreign Obligations 51,353,634 51,595,835 5.9
Total Investments in Corporate Bonds,
US Government & Agency & Foreign
Obligations 273,384,758 283,467,043 32.3
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued)
<CAPTION>
Shares Percent of
Industries Held US Stocks & Warrants Cost Value Net Assets
Basic Industry
<S> <C> <S> <C> <C> <C>
Auto & Truck 155,000 Consorcio G Grupo Dina, S.A. de C.V.
(ADR) (d) (1) $ 2,506,119 $ 4,320,625 0.5%
Chemicals 25,000 IMC Fertilizer Group, Inc. 1,144,649 1,134,375 0.1
110,000 PPG Industries, Inc. 7,896,245 8,346,250 1.0
125,000 Rohm & Haas Co. 6,791,460 7,437,500 0.8
Containers 415,000 Crown Cork & Seal Co., Inc. 11,878,132 17,378,125 2.0
Forest Products 195,000 Willamette Industries, Inc. 7,348,738 9,652,500 1.1
Paper & Packaging 50,000 Union Camp Corp. 2,389,146 2,381,250 0.3
Railroads 35,000 CSX Corp. 2,951,566 2,835,000 0.3
40,000 Southern Pacific Rail Co. 780,240 790,000 0.1
Total Basic Industry 43,686,295 54,275,625 6.2
<CAPTION>
Capital Spending
<S> <C> <S> <C> <C> <C>
Aerospace 160,000 Allied-Signal Inc. 9,804,500 12,640,000 1.4
Capital Goods 1,140,000 Wheelabrator Technologies, Inc. 12,797,181 20,235,000 2.3
Communications 58,000 Motorola, Inc. 3,579,575 5,357,750 0.6
Equipment 158,000 Tellabs, Inc. 5,142,191 7,386,500 0.9
Computer Services 160,000 Computer Sciences Corp. 12,767,290 15,920,000 1.8
375,000 General Motors Corp. (Class E) 10,987,442 10,968,750 1.3
<PAGE>
Computer Software 70,000 Microsoft Corp. 5,860,711 5,635,000 0.7
Electrical 212,000 Emerson Electric Co. 11,513,494 12,773,000 1.5
Equipment
Electronics 164,200 Solectron Corp. 3,921,007 4,659,175 0.5
Engineering & 315,000 Empresas ICA Sociedad Controladora,
Construction S.A. de C.V. (ADR) (d) (1) 6,196,255 8,898,750 1.0
175,000 Thermo Electron Corp. 7,160,511 7,350,000 0.8
Office Equipment 240,000 Danka Business Systems PLC (ADR) (d) (1) 6,123,041 9,480,000 1.1
Telecommunications 300,000 ADC Telecommunications, Inc. 8,349,312 10,650,000 1.2
Equipment 11,300 Antec Corp. 203,400 271,200 0.0
175,000 DSC Communications Corp. 9,209,546 10,740,625 1.2
37,000 Picture Tel Corp. 663,880 684,500 0.1
Total Capital Spending 114,279,336 143,650,250 16.4
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued)
<CAPTION>
Shares Percent of
Industries Held US Stocks & Warrants Cost Value Net Assets
Consumer Goods & Services
<S> <C> <S> <C> <C> <C>
Apparel 245,000 Phillips-Van Heusen Corp. $ 5,697,027 $ 9,187,500 1.0%
Appliances 675,000 Singer Co. N.V. (1) 17,730,688 25,228,125 2.9
579,000 Sunbeam-Oster Inc. 11,546,114 12,738,000 1.5
Automotive 265,000 Ford Motor Co. 14,732,195 17,092,500 1.9
Beverages 19,100 Panamerican Beverage Inc. (1) 487,050 730,575 0.1
70,000 PepsiCo., Inc. 2,782,941 2,861,250 0.3
Healthcare-- 263,400 Humana Inc. 4,562,419 4,642,425 0.5
Products & Services 80,000 Johnson & Johnson, Inc. 3,200,505 3,580,000 0.4
Household Products 140,000 Procter & Gamble Co. 7,773,736 7,980,000 0.9
Media/Publishing 100,000 News Corp. (ADR) (d) 4,954,391 5,275,000 0.6
Medical 200,000 Physician Corp. 3,715,593 4,950,000 0.6
Printing & Publishing 100,000 Gannett Co. 5,007,669 5,725,000 0.7
<PAGE>
Retail 125,000 Heilig-Meyers Co. 1,606,477 4,875,000 0.6
Services 90,000 Block (H & R), Inc. 2,675,014 3,667,500 0.4
510,000 Huntington International Holdings
PLC (ADR) (d) (1) 12,702,548 4,653,750 0.5
Telecommunications 61,200 ALC Communications Corp. 1,560,600 1,759,500 0.2
257,875 LDDS Communications Inc. (Class A) 11,447,075 12,442,469 1.4
550,000 MCI Communications Corp. 15,538,597 15,468,750 1.8
70,000 Sprint Corp. 2,594,900 2,432,500 0.3
350,000 Telefonos de Mexico, S.A. de C.V. (ADR) (d) (1) 13,274,795 23,625,000 2.7
Tires & Rubber 385,000 Cooper Tire & Rubber Co. 7,604,683 9,625,000 1.1
Total Consumer Goods & Services 151,195,017 178,539,844 20.4
<CAPTION>
Credit-Sensitive & Financial Services
<S> <C> <S> <C> <C> <C>
Banking 57,500 Banco de Galicia y Buenos Aires S.A.
(ADR) (d) (1) 1,087,500 2,300,000 0.3
59,000 Banco Frances del Rio de la Plata S.A.
(ADR) (d) (1) 1,805,400 2,323,125 0.3
280,000 Bank of New York Co. 11,752,273 15,960,000 1.8
80,000 Bank of New York Co. (Warrants) (c) 595,620 830,000 0.1
122,500 Espirito Santo Financial Holding S.A.
(ADR) (d) (1) 3,447,435 4,318,125 0.5
130,000 Grupo Financiero Serfin S.A. 3,204,369 3,835,000 0.4
Insurance 25,000 American International Group, Inc. 2,210,684 2,193,750 0.2
70,000 Capital Holding Corp. 2,697,825 2,598,750 0.3
Total Credit-Sensitive & Financial Services 26,801,106 34,358,750 3.9
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued)
<CAPTION>
Shares Percent of
Industries Held US Stocks & Warrants Cost Value Net Assets
Energy
<S> <C> <S> <C> <C> <C>
Oil--Integrated 90,000 Chevron Corp. $ 7,904,107 $ 7,841,250 0.9%
20,000 Mobil Oil Corp. 1,571,620 1,580,000 0.2
115,000 Royal Dutch Petroleum Co. N.V. (ADR) (d) (1) 9,786,535 12,003,125 1.4
Petroleum 250,000 Phillips Petroleum Co. 7,254,470 7,250,000 0.8
Utilities--Electric 350,000 California Energy Co., Inc. 6,244,403 6,475,000 0.7
Total Energy 32,761,135 35,149,375 4.0
<PAGE>
<CAPTION>
Smaller Capital
<S> <C> <S> <C> <C> <C>
Healthcare 105,000 Vivra, Inc. 1,965,485 2,428,125 0.3
Services 62,775 Kelly Services, Inc. (Class A) 1,792,413 1,726,312 0.2
Tires 140,000 Bandag, Inc. (Class A) 6,400,395 7,245,000 0.8
Total Smaller Capital 10,158,293 11,399,437 1.3
Total Investments in US Stocks & Warrants 378,881,182 457,373,281 52.2
<CAPTION>
Foreign Stocks & Warrants
<S> <C> <S> <C> <C> <C>
Argentina
Utilities-- 560,000 Telecom Argentina S.A. 3,305,379 3,523,848 0.4
Communications
Australia
Banking 328,144 National Australia Bank Ltd. 2,046,966 2,743,804 0.3
Multi-Industry 300,948 Pacific Dunlop, Ltd. 1,129,136 1,102,968 0.1
Retail 270,000 Coles Myer Ltd. (Warrants) (c) 808,121 571,737 0.1
Canada
Consumer--Durables 280,000 International Semi-Tech Microelectronics, Inc.
(Receipts) (e) 1,806,344 1,586,103 0.2
Retail Stores 50,000 Hudson's Bay Company (Ord.) 1,529,050 1,491,692 0.2
Chile
Utilities--Electric 121,600 Distribuidora Chilectra Metropolitana S.A.
(ADR) (d) 3,323,793 4,932,096 0.6
France
Multi--Industry 3,750 Compagnie Generale des Eaux 1,401,331 1,853,128 0.2
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued)
<CAPTION>
Shares Percent of
Industries Held Foreign Stocks & Warrants Cost Value Net Assets
<S> <C> <S> <C> <C> <C>
Germany
Machinery 2,000 Mannesmann AG $ 343,289 $ 486,051 0.0%
Hong Kong
Banking 524,114 HSBC Holdings PLC 2,866,585 7,804,365 0.9
Electronics 1,300,000 Johnson Electric Co. 2,603,189 3,332,902 0.4
Foods/ 500,000 Dairy Farm International Holdings Ltd. 866,896 997,022 0.1
Food Processing
Multi-Industry 2,004,000 Hutchison Whampoa, Ltd. 4,057,045 9,990,159 1.1
800,000 Swire Pacific, Ltd. (Class A) 3,049,508 7,199,275 0.8
Real Estate 40,000 Cheung Kong (Holdings) Ltd. 144,109 244,723 0.0
250,000 Henderson Land Development Co. Ltd. 789,950 1,845,138 0.2
1,000,000 Hong Kong Land Holdings, Ltd. 1,944,997 3,547,844 0.4
Mexico
Conglomerates 700,000 Grupo Carso, S.A. de C.V. (ADR) (d) 5,957,220 14,700,000 1.7
Retail 2,000,000 Cifra, S.A. de C.V. 'C' 1,755,970 6,003,221 0.7
Netherlands
Insurance 127,658 Aegon N.V. 5,441,143 6,935,791 0.8
Portugal
Banking 100,000 Banco Commercial Portugal (New) (ADR) (d) 1,342,303 1,525,000 0.2
97,000 Banco Commercial Portugal (Registered) 1,233,051 1,459,666 0.2
Spain
Petroleum 60,000 Repsol S.A. 1,616,190 1,866,480 0.2
Utilities--Electric 75,000 Empresa Nacional de Electricidad S.A.
(ADR) (d) 1,049,707 3,562,500 0.4
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded)
<CAPTION>
Shares Percent of
Industries Held Foreign Stocks & Warrants Cost Value Net Assets
<S> <C> <S> <C> <C> <C>
United Kingdom
Business Services 75,000 Reuters Holding PLC (ADR) (d) $ 3,856,856 $ 5,915,625 0.7%
Oil--International 415,897 British Petroleum PLC 1,958,494 2,212,905 0.2
140,000 British Petroleum PLC (ADR) (d) 7,683,915 8,960,000 1.0
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 65,455,162 106,413,768 12.1
Total Investments in US & Foreign Stocks
& Warrants 444,336,344 563,787,049 64.3
<CAPTION>
Face
Amount* Short-Term Securities
<S> <C> <S> <C> <C> <C>
Commercial $ 34,785,000 General Electric Capital Corp., 3.22% due
Paper** 1/03/1994 34,778,777 34,778,777 4.0
10,000,000 Preferred Receivables Funding Corp., 3.42%
due 1/12/1994 9,989,550 9,989,550 1.1
Total Investments in Short-Term Securities 44,768,327 44,768,327 5.1
Total Investments $762,489,429 892,022,419 101.7
============
Liabilities in Excess of Other Assets (15,021,305) (1.7)
------------ ------
Net Assets $877,001,114 100.0%
============ ======
Net Asset Class A--Based on net assets of $46,065,989 and 3,737,091 shares outstanding $ 12.33
Value: ============
Class B--Based on net assets of $830,935,125 and 66,799,066 shares outstanding $ 12.44
============
<PAGE>
<FN>
(a)Real Estate Mortgage Investment Conduits (REMICs).
(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 remain-
ing 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).
(1)Consistent with the general policy of the Securities and
Exchange Commission, the nationality or domicile of an issuer
for determination 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.
</TABLE>
APPENDIX: GRAPHIC AND IMAGE MATERIALS.
ITEM 1:
Portfolio Summary
A bar graph depicting the Fund's sector representation as a
percentage of equities as of December 31, 1993.
Basic Industry 9.6%
Smaller Capital 2.0%
Energy 6.2%
Consumer Goods & Services 31.7%
Capital Spending 25.5%
Foreign 18.9%
Credit-Sensitive &
Financial Services 6.1%
<PAGE>
ITEM 2:
A bar graph depicting the Fund's security diversification as of
December 31, 1993.
Stocks 64.3% US 52.2%
Non US 12.1%
Bonds 32.3% US 26.4%
Non US 5.9%
Cash & Cash Equivalents 3.4%