MERRILL
LYNCH
BALANCED
FUND
For Investment and Retirement
FUND LOGO
Annual Report September 30, 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
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
<PAGE>
Merrill Lynch Balanced Fund for Investment and Retirement
PORTFOLIO SUMMARY
GRAPHIC AND IMAGE MATERIAL APPEARS HERE.
SEE APPENDIX ITEM 1.
As of September 30, 1994 Percent of
Currency Diversification Net Assets
US Dollar 82.9%
German Mark 3.2
Mexican Peso 3.2
UK Sterling 2.2
Australian Dollar 1.5
Hong Kong Dollar 1.4
French Franc 1.0
Italian Lira 1.0
Chilean Peso 0.8
Argentinian Peso 0.7
Canadian Dollar 0.5
Portuguese Escudo 0.4
Swedish Krona 0.4
Danish Krone 0.3
Japanese Yen 0.3
Spanish Peseta 0.2
S&P
US Common Stock Investments Fund 500*
After Tax Profit Margin 8.1% 7.1%
Yield 1.8% 2.5%
Price/Earnings Ratio** 17.0 18.0
Return on Equity 20.5% 14.9%
Average Capitalization (in billions) $7.5 $6.6
Earnings Growth Rate (5 yr. average) 22.0% 13.0%
[FN]
*An unmanaged broad-based index comprised of common stocks.
**Based on 1994 earnings estimates.
<PAGE>
Merrill Lynch
Fixed-Income Investments Fund BOAO Index*
Duration 4.9 Years 5.2 Years
Average Maturity 8.0 Years 9.3 Years
Asset Breakdown:
US Treasuries/Agencies 68.2% 76.6%
Corporates 10.5% 23.4%
International Governments 21.3% --
[FN]
*An unmanaged market-weighted corporate and Government master
bond index reflecting approximately 97% of total outstanding US bonds.
DEAR SHAREHOLDER
During the September quarter, the Fund's asset mix
shifted slightly to favor cash equivalents at the
expense of bonds and equities. At the end of
September, cash equivalents represented 8.5% of
the portfolio's net assets, bonds were 32.4%, and
59.1% of net assets were invested in equities.
Economic Background
Economic growth has slowed, but it has not slowed
enough to ease investors' inflationary fears. Second
quarter growth of 4.0% was aided substantially by
inventory accumulation, as final sales advanced at
only a 1.6% rate. Economists initially lowered their
projections for third-quarter growth to reflect the
assumed slowdown in production deemed necessary
to work off this increased inventory. But consumer
spending on clothes, furniture and automobiles
was strong this summer, so that gross domestic
product (GDP) growth for the third quarter will most
likely register 3.0%--3.5%. However, new home sales
and buyer traffic have slowed from the peak of
last year and will most likely continue to weaken as
mortgage rates increase.
<PAGE>
What seems to be concerning investors most is the
rapid rises of commodity and producer prices, yet
perhaps this should be seen as corroboration of a
synchronized world recovery in the developed
countries with an added bonus from growth in the
developing economies. So far we have not seen signs
of a pickup in the type of inflation that tends to
linger even after growth slows. Consumer prices and
wage rate increases are well behaved. Monetary
growth in the United States and worldwide is at a
record low, credit expansion is at a record low,
and the growth rate of government spending in
both the United States and other developed nations
is very low.
The price movement of basic materials and high
operating rates of manufacturing capacity are
causing investors to remain cautious. It seems
possible, though, that after years of restructuring
and increasing productivity, operating rates may run
at higher levels than in the past two decades
without causing inflation to accelerate substantially.
Another factor that may prevent inflation from a
major upturn during this cycle is the preemptive
moves by the Federal Reserve Board and the aggres-
sive response by fixed-income investors. In the last
eight months, long-term bond yields have increased
200 basis points (2.00%) while inflation has still
remained stable at 2.0%. In past economic cycles,
inflation had already turned up several percentage
points before bond market yields increased.
Having said all this, and believing that price in-
creases are reacting in a traditional end-of-cycle man-
ner, we believe the Federal Reserve Board is likely
to continue to raise interest rates to further slow
the economy to a non-inflationary 2.5%--3.0% rate.
Investment Strategy
Our strategy in this negative interest rate environ-
ment has been to raise cash from bond holdings and
shorten the average life of the bond portfolio until
clearer signs of a decelerating economy and easing
prices are more evident. Because of the preemptive
moves by the Federal Reserve Board, inflation should
not reach the level of the late 1980s, and further
interest rate increases should be better reflected in
the short-term end of the market with a prospective
flattening of the yield curve.
<PAGE>
In the equity markets, our short-term strategy
shifted during the September quarter. After a
modest rally earlier this summer in the cyclical and
interest rate sensitive stocks, we have again reduced
our allocation to this sector for the duration of
interest rate increases. We continued to reduce our
allocation to consumer cyclicals, big ticket pur-
chases which will likely be negatively affected by
higher cost of credit. Witnessing higher world
demand and accelerating prices, we have maintained
our investments in globally oriented commodity
goods. We continue to emphasize stocks in the
rapidly growing worldwide development of the
information superhighway.
Outside of the United States, we have continued to
focus on Latin America and the Pacific Rim markets
which are growing at above-average rates. The
Mexican stock market recovered this summer in
anticipation of the presidential elections and with
the conviction the country will remain successful in
lowering inflation and maintaining growth. The
Mexican market recently was disquieted by a second
political assassination this year.
Fiscal Year in Review
The last 12 months have been more volatile compared
to the preceding two years. Interest rates hit a
cyclical low in October 1993 and have since increased
to a cyclical high. We had anticipated a relatively flat
yield curve reflecting a still moderately recovering
economy with low inflation expectations. However,
preemptive moves by the Federal Reserve Board
beginning in early February had a negative impact
on fixed-income investments, but a more substantial
impact on international fixed-income and equity
markets particularly in those currencies tied to the
US dollar.
<PAGE>
Although we reduced our exposure to Mexico and
Hong Kong, investments in these markets remain
prominent after excellent performance in the fourth
quarter of last year. And as both markets are US
dollar sensitive, they underperformed in the first
half of the year. However, the US currency is
showing signs of some stabilization, and these
markets are performing better. Now that the Mexican
presidential election is over and the new govern-
ment seems intent on maintaining growth while still
focusing on controlling inflation, this market has
recovered substantially. In the Pacific Rim, an area
of long-term emphasis, the Hong Kong market was
negatively affected by US dollar instability in
addition to the impact of the Chinese government
tightening credit in an effort to curb high inflation.
Some of these investment dollars shifted to the
Japanese market, where despite political upheaval
and negative economic growth, the equity market
was one of the best-performing in the world. In the
United States, equity market performance was
negatively impacted by the increase in interest
rates, which adversely affected long duration growth
stocks including telecommunication issues which
are heavily weighted in the portfolio. Since the end
of June, these stocks have performed very well,
which reflects their solid growth prospects, in our
opinion. Overall, these investment decisions bene-
fited the portfolio's total returns for the fiscal year.
In Conclusion
We believe that deceleration of US corporate profit
growth into 1995 should lead to a shift in favor of
steady growth companies which are significantly
represented in the equity portfolio.
We thank you for your continued investment in
Merrill Lynch Balanced Fund for Investment and
Retirement, and we look forward to continuing to
serve your financial needs throughout the Fund's
new fiscal year and beyond.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Denis B. Cummings)
Denis B. Cummings
Vice President and Portfolio Manager
November 3, 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
Donald C. Burke, Vice President
Denis B. Cummings, Vice President and
Portfolio Manager
Gerald M. Richard, Treasurer
Jerry Weiss, Secretary
Custodian
The Chase Manhattan Bank, N.A.
4 Metro Tech Center, 18th Floor
Brooklyn, New York 11245
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.
Total Return Based on a $10,000 Investment
GRAPHIC MATERIAL APPEARS HERE.
SEE APPENDIX GRAPHIC AND IMAGE MATERIALS ITEM 2.
Average Annual Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 9/30/94 +1.81% -4.81%
Five Years Ended 9/30/94 +7.89 +6.45
Inception (10/27/88)
through 9/30/94 +9.25 +8.01
<PAGE>
[FN]
*Maximum sales charge is 6.5%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 9/30/94 +0.76% -2.81%
Five Years Ended 9/30/94 +6.79 +6.79
Inception (11/29/85)
through 9/30/94 +8.35 +8.35
[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
9/30/94 6/30/94 9/30/93 % Change % Change
<S> <C> <C> <C> <C> <C>
ML Balanced Fund Class A Shares* $11.67 $11.36 $13.02 -2.82%(1) +2.73%
ML Balanced Fund Class B Shares* 11.75 11.41 13.09 -2.75(1) +2.98
ML Balanced Fund Class A Shares--Total Return* +1.81(2) +4.34(3)
ML Balanced Fund Class B Shares--Total Return* +0.76(4) +4.00(5)
S&P 500/ML BOAO Blended Index--Total Return** +2.68 -0.14
<FN>
*Investment results shown do not reflect sales charges; results shown would be lower if a sales charge was included.
**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 $0.587 per share ordinary income dividends and $1.013 per share capital gains
distributions.
(3)Percent change includes reinvestment of $0.176 per share ordinary income dividends.
(4)Percent change includes reinvestment of $0.454 per share ordinary income dividends and $1.013 per share capital gains
distributions.
(5)Percent change includes reinvestment of $0.112 per share ordinary income dividends.
</TABLE>
<PAGE>
<TABLE>
IMPORTANT TAX INFORMATION (unaudited)
The following information summarizes all per share distributions
paid by Merrill Lynch Balanced Fund for Investment and Retirement
during the fiscal year ended September 30, 1994:
<CAPTION>
Qualifying Interest From Other Total Long-Term
Record Payable Domestic Federal Non-Qualifying Ordinary Capital
Date Date Ordinary Income* Obligations Ordinary Income Income Gains
Class A Shares:
<C> <C> <C> <C> <C> <C>
12/20/93 12/29/93 $0.104233 $0.057586 $0.249177 $0.410996 $1.012622
07/05/94 07/13/94 $0.039847 $0.037407 $0.098430 $0.175684 --
Class B Shares:
12/20/93 12/29/93 $0.086545 $0.047814 $0.206890 $0.341249 $1.012622
07/05/94 07/13/94 $0.025478 $0.023918 $0.062935 $0.112331 --
<FN>
*Qualifying domestic ordinary income qualifies for the dividends
received deduction for corporations.
</TABLE>
The law varies in each state as to whether and what
percentage of dividend income attributable to Fed-
eral obligations is exempt from state income tax.
We recommend that you consult your tax adviser to
determine if any portion of the dividends you received
is exempt from state income tax.
Listed at right are the percentages of the Fund's
total assets invested in Federal obligations as of the
end of each quarter of the fiscal year.
For the Quarter Ended Federal Obligations*
December 31, 1993 14.85%
March 31, 1994 15.65%
June 30, 1994 15.80%
September 30, 1994 16.07%
Please retain this information for your records.
*For purposes of this calculation, Federal obligations include
US Treasury Notes, US Treasury Bills, and US Treasury Bonds.
Also included are obligations issued by the following agencies:
Banks for Cooperatives, Federal Intermediate Credit Banks,
Federal Land Banks, Federal Home Loan Banks, and the
Student Loan Marketing Association.
Repurchase agreements are not included in this calculation.
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS
<CAPTION>
Face Value Percent of
Industries Amount* Corporate Bonds Cost (Note 1a) Net Assets
<S> <C> <C> <S> <C> <C> <C>
Financial $ 10,000,000 Ford Capital BV, 9.375% due 1/01/1998 $ 10,037,900 $ 10,552,600 1.4%
Services 5,000,000 Landeskreditbank, N.V., 7.875% due 4/15/2004 4,972,068 4,957,500 0.7
Financial 10,000,000 American General Financial Corp., 7.38%
Services-- due 5/13/1997 9,993,200 10,020,400 1.3
Consumer
Total Investments in Corporate Bonds 25,003,168 25,530,500 3.4
Country US Government & Agency Obligations
United States 4,910,000 Federal Home Loan Mortgage Corp., REMIC,
1243-HP, 5.625% due 11/25/2015 (a) 4,788,017 4,437,413 0.6
20,000,000 Federal National Mortgage Association,
7.00% due 3/25/2024 18,443,750 18,362,500 2.4
Government National Mortgage Association:
12,720,792 7.50% due 6/15/2024 12,152,332 11,953,575 1.6
6,869,588 7.50% due 7/15/2024 6,562,603 6,455,269 0.8
US Treasury Notes:
55,000,000 7.875% due 8/15/2001 53,943,600 56,289,200 7.5
25,000,000 6.25% due 2/15/2003 25,710,938 22,972,750 3.1
35,000,000 5.75% due 8/15/2003 36,432,813 30,860,200 4.1
22,000,000 US Treasury STRIPS++, 6.81% due 5/15/2000(b) 16,050,781 14,639,240 2.0
Total Investments in US Government &
Agency Obligations 174,084,834 165,970,147 22.1
<PAGE>
Foreign Obligations
Australia A$ 3,100,000 Queensland Treasury Corp., Global, 8.00%
due 7/14/1999 2,328,332 2,134,085 0.3
Germany Bundes:
DM 17,000,000 6.00% due 2/20/1998 10,668,744 10,668,625 1.4
22,000,000 6.375% due 5/20/1998 13,923,234 13,918,671 1.8
Italy Lit 5,000,000 Republic of Italy, 8.75% due 2/08/2001 5,373,050 5,152,670 0.7
Mexico Mxp 45,013,640 Mexican Cetes, 9.04% due 9/07/1995(b) 13,025,996 11,761,787 1.6
United UK Treasury Gilt:
Kingdom Pound Sterling 1,350,000 8.75% due 9/01/1997 2,267,919 2,149,575 0.3
4,000,000 8.00% due 6/10/2003 6,698,788 5,949,233 0.8
Total Investments in Foreign Obligations 54,286,063 51,734,646 6.9
Total Investments in Corporate Bonds,
US Government & Agency and
Foreign Obligations 253,374,065 243,235,293 32.4
</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>
Basic Industry
Aluminum 15,000 Aluminum Co. of America (ALCOA) $ 1,285,103 $ 1,271,250 0.2%
Chemicals 110,000 du Pont (E.I.) de Nemours & Co. 6,362,863 6,380,000 0.8
145,000 Eastman Chemical Co. 7,478,773 7,884,375 1.0
120,000 IMC Fertilizer Group, Inc. 4,987,939 5,340,000 0.7
90,000 Rohm & Haas Co. 4,872,761 5,141,250 0.7
Packaging 150,000 Crown Cork & Seal Co., Inc. 4,484,320 5,775,000 0.8
Paper & Forest 135,000 Scott Paper Co. 6,002,300 8,251,875 1.1
Producers 85,000 Willamette Industries, Inc. 3,173,000 4,356,250 0.6
Total Basic Industry 38,647,059 44,400,000 5.9
<PAGE>
Capital Spending
Auto & Truck 125,000 Consorcio G Groupo Dina, S.A. de C.V.
(ADR) (c) (1) 2,026,119 1,500,000 0.2
Communication 255,000 +++ADC Telecommunications, Inc. 8,983,466 10,200,000 1.4
Equipment 270,000 DSC Communications Corp. 7,169,181 7,695,000 1.0
75,000 +++General Data Comm Industries, Inc. 1,790,297 2,118,750 0.3
120,000 Motorola, Inc. 6,103,380 6,330,000 0.8
120,000 Tellabs, Inc. 2,539,049 5,100,000 0.7
Computer Services 435,000 Computer Sciences Corp. 12,394,300 18,922,500 2.5
Electrical Equipment 150,000 Siebe PLC (1) 1,309,386 1,277,370 0.2
100,000 W.W. Grainger 6,446,088 5,925,000 0.8
Electronics 210,000 Solectron Corp. 5,168,718 5,538,750 0.7
Engineering & 230,000 Empresas ICA Sociedad Controladora, S.A. de C.V.
Construction (ADR) (c) (1) 4,526,225 7,417,500 1.0
410,000 Huntington International Holdings PLC
(ADR) (c) (1) 9,996,548 1,998,750 0.3
Environmental 1,100,000 Wheelabrator Technologies, Inc. 12,362,975 16,912,500 2.3
Control
Multi-Industry 200,000 Allied-Signal Inc. 6,438,764 6,825,000 0.9
Office Equipment 610,000 Danka Business Systems PLC (ADR) (c) (1) 9,489,019 11,208,750 1.5
15,000 International Business Machines Corp. 1,063,730 1,042,500 0.1
Total Capital Spending 97,807,245 110,012,370 14.7
</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>
Consumer Goods & Services
Appliances 675,000 Singer Co. N.V. (ADR) (c) (1) $ 17,730,688 $ 22,781,250 3.0%
474,500 Sunbeam-Oster Inc. 9,420,127 11,565,938 1.5
Automotive 104,700 Magna International Inc. (ADR) (c) (1) 5,172,274 3,860,813 0.5
Equipment
Beverages 20,000 PanAmerican Beverage Inc. (ADR) (c) (1) 635,958 717,500 0.1
<PAGE>
Consumer-- 90,000 Duracell International Inc. 3,713,033 4,106,250 0.5
Miscellaneous
Consumer--Services 180,000 Block (H & R), Inc. 7,774,923 8,257,500 1.1
Drugs & Hospital 60,000 Merck & Co., Inc. 2,143,314 2,130,000 0.3
Supply
Health Care 450,000 Humana Inc. 8,419,745 10,631,250 1.4
265,000 Physician Corp. of America 5,482,809 5,962,500 0.8
40,000 Vivra Inc. 727,950 1,090,000 0.1
Household Products 240,000 Procter & Gamble Co. 13,503,704 14,310,000 1.9
Photography 60,000 Eastman Kodak Co. 3,004,778 3,105,000 0.4
Retail 75,000 Phillips-Van Heusen Corp. 1,721,463 1,546,875 0.2
Tires & Rubber 196,100 Cooper Tire & Rubber Co. 4,764,741 4,583,837 0.6
Total Consumer Goods & Services 84,215,507 94,648,713 12.4
Credit-Sensitive & Financial Services
Banking 90,000 Banco Frances del Rio de la Plata S.A.(ADR)(c)(1) 2,964,448 2,700,000 0.4
165,000 BankAmerica Corp. 7,440,617 7,280,625 1.0
200,000 Bank of New York Co. 5,581,161 5,925,000 0.8
245,000 Espirito Santo Financial Holding S.A. (ADR) (c) (1) 3,447,435 3,430,000 0.5
130,000 Grupo Financiero Serfin S.A. (ADR) (c) (1) 3,204,369 2,957,500 0.4
Insurance 110,000 International Telephone & Telegraph Corp. 9,403,546 9,171,250 1.2
Total Credit-Sensitive & Financial Services 32,041,576 31,464,375 4.3
Energy
Energy--Related 350,000 California Energy Co., Inc. 6,244,403 5,993,750 0.8
Oil--Integrated 110,000 Mobil Oil Corp. 8,561,728 8,703,750 1.2
180,000 Phillips Petroleum Co. 5,854,415 6,165,000 0.8
70,000 Royal Dutch Petroleum Co. N.V. (ADR) (c) (1) 6,155,380 7,516,250 1.0
Total Energy 26,815,926 28,378,750 3.8
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued)
<CAPTION>
Shares Value Percent of
Industries Held US Stocks & Warrants Cost (Note 1a) Net Assets
<S> <C> <C> <S> <C> <C> <C>
Transports
Railroads 310,000 +++Southern Pacific Rail Co. $ 6,386,644 $ 5,812,500 0.8%
Total Transports 6,386,644 5,812,500 0.8
Utilities
Utilities-- 49,100 ALC Communications Corp. 1,456,673 1,608,025 0.2
Communications 180,000 GTE Corp. 5,790,102 5,467,500 0.7
515,750 LDDS Communications Inc. (Class A) 11,447,075 11,346,500 1.5
415,000 MCI Communications Corp. 11,820,141 10,530,625 1.4
170,000 Southwestern Bell Corp. 7,282,605 7,225,000 1.0
90,000 Sprint Corp. 3,364,449 3,431,250 0.5
200,000 Telefonos de Mexico, S.A. de C.V. (ADR) (c) (1) 9,342,788 12,500,000 1.7
Total Utilities 50,503,833 52,108,900 7.0
Total Investments in US Stocks & Warrants 336,417,790 366,825,608 48.9
Foreign Stocks & Warrants
Argentina
Banking 40,000 Banco de Galicia y Buenos Aires S.A. (ADR) (c) 1,261,974 1,250,000 0.2
Utilities-- 560,000 Telecom Argentina S.A. (Class B) 3,305,379 3,741,174 0.5
Communications
Australia
Banking 425,250 Coles Myer Ltd. 1,802,859 1,312,236 0.2
347,492 National Australia Bank Ltd. 2,199,488 2,653,727 0.4
Media/Publishing 80,000 News Corp. (ADR) (c) 4,079,037 4,050,000 0.5
Multi-Industry 308,963 Pacific Dunlop, Ltd. 1,154,171 937,394 0.1
Canada
Appliances 280,000 International Semi-Tech Corp. 2,947,648 1,775,457 0.2
Chemicals 90,000 NOVA Corp. (Class A) 949,140 990,000 0.1
<PAGE>
Retail Stores 75,000 Hudson's Bay Company (Ordinary) 2,011,843 1,629,523 0.2
Chile
Banking 57,000 +++Banco O'Higgins (ADR) (c) 837,114 1,168,500 0.2
Utilities--Electric 96,600 Distribuidora Chilectra Metropolitana S.A.
(ADR) (c)++++ 2,696,793 4,745,475 0.6
Denmark
Utilities-- 80,000 Tele Danmark A/S 1,882,080 2,180,000 0.3
Communications
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued)
<CAPTION>
Shares Value Percent of
Industries Held Foreign Stocks & Warrants Cost (Note 1a) Net Assets
<S> <C> <C> <S> <C> <C> <C>
France
Industrial 3,123 +++Eramet $ 183,452 $ 201,457 0.0%
Insurance 42,900 Compagnie UAP 1,165,352 1,086,662 0.1
Oil--Integrated 153,826 Societe Nationale Elf Aquitaine (ADR) (c) 5,483,913 5,537,736 0.7
Utilities--Water 15,413 Compagnie Generale des Eaux 1,445,264 1,361,634 0.2
Hong Kong
Banking 283,415 HSBC Holdings PLC 1,715,599 3,163,646 0.4
Electrical 1,300,000 Johnson Electric Co. 2,603,189 3,659,389 0.5
Equipment
Multi--Industry 660,000 Hutchison Whampoa, Ltd. 1,685,630 3,117,761 0.4
Real Estate 225,000 Wharf Holdings Ltd. 948,314 905,626 0.1
<PAGE>
Italy
Banking 90,000 Instituto Mobilare (ADR) (c) 1,976,579 1,890,000 0.3
Japan
Chemicals 65,000 Sekisui Chemical Co. 663,408 684,211 0.1
Electronics 90,000 Mitsubishi Electric Corp. 556,016 643,117 0.1
Tools 30,000 +++Makita Electric Work 609,699 582,996 0.1
Mexico
Multi-Industry 465,000 +++Grupo Carso, S.A. de C.V. (ADR) (c)++++ 4,106,100 10,520,625 1.4
Retail Stores 430,000 CIFRA, S.A. de C.V. 'C' 1,129,713 1,203,949 0.2
Portugal
Banking 100,000 Banco Commercial Portugal (New) (ADR) (c) 1,342,303 1,350,000 0.2
97,000 Banco Commercial Portugal (Registered) 1,233,051 1,332,215 0.2
Spain
Oil--Integrated 60,000 Repsol S.A. 1,616,190 1,832,489 0.2
Sweden
Appliances 12,000 Electrolux AB 'B' Free 610,647 568,302 0.1
Telecommunications 40,000 Ericsson (LM) Telephone Co. 2,085,490 2,140,000 0.3
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded)
<CAPTION>
Shares Value Percent of
Industries Held Foreign Stocks & Warrants Cost (Note 1a) Net Assets
<S> <C> <C> <S> <C> <C> <C>
United Kingdom
Financial Services 100,000 Reuters Holding PLC (ADR) (c) $ 2,571,186 $ 4,475,000 0.6%
Multi-Industry 50,000 Hanson PLC Sponsored (ADR) (c) 1,106,687 906,250 0.1
Oil--Integrated 35,000 British Petroleum Co. PLC (ADR) (c) 2,578,350 2,651,250 0.4
Total Investments in Foreign Stocks &
Warrants 62,543,658 76,247,801 10.2
Total Investments in US & Foreign Stocks
& Warrants 398,961,448 443,073,409 59.1
<CAPTION>
Face
Amount* Short-Term Securities
<S> <C> <S> <C> <C> <C>
Commercial $ 20,000,000 B.A.T. Capital Corp., 4.92% due 10/26/1994 19,931,667 19,931,667 2.7
Paper** 24,881,000 General Electric Capital Corp., 4.95%
due 10/03/1994 24,874,157 24,874,157 3.3
Total Investments in Short-Term Securities 44,805,824 44,805,824 6.0
Total Investments 697,141,337 731,114,526 97.5
<CAPTION>
Number of Premiums
Shares Issue Received
<S> <C> <C> <C> <C>
Options Written
Call Options 1,000 General DataComm Industries, Inc.,
Written expiring October 1994 at US$30 (1,783) (1,125) 0.0
Total Options Written (1,783) (1,125) 0.0
Total Investments, Net of Options Written $697,139,554 731,113,401 97.5
============
Other Assets Less Liabilities 18,685,289 2.5
------------ ------
Net Assets $749,798,690 100.0%
============ ======
<PAGE>
<FN>
(a)Real Estate Mortgage Investment Conduits (REMIC).
(b)Represents the yield-to-maturity on this zero coupon issue.
These securities are purchased at a deep discount and
amortized to maturity.
(c)American Depositary Receipt (ADR).
*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.
(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.
See Notes to Financial Statements.
++Separate Trading of Registered Interest and Principal of Securities
(STRIPS).
++++Restricted securities as to resale. The value of the Fund's investment
in restricted securities was approximately $15,266,000, representing
2.0% of net assets.
<CAPTION>
Value
Issue Acquisition Date Cost (Note 1a)
<S> <C> <C> <C>
Distribuidora Chilectra
Metropolitana S.A.
(ADR) 2/12/1992-2/26/1992 $ 2,696,793 $ 4,745,475
Grupo Carso,
S.A. de C.V. (ADR) 9/24/1991-1/24/1992 4,106,100 10,520,625
------------ ------------
Total $ 6,802,893 $ 15,266,100
============ ============
+++Non-income producing security.
</TABLE>
<PAGE>
FINANCIAL INFORMATION
<TABLE>
Statement of Assets and Liabilities as of September 30, 1994
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$697,141,337) (Note 1a) $731,114,526
Cash 1,193,921
Receivables:
Securities sold $ 39,659,730
Interest 3,297,249
Dividends 676,737
Capital shares sold 251,850 43,885,566
------------
Prepaid registration fees and other assets (Note 1d) 126,383
------------
Total assets 776,320,396
------------
Liabilities: Options written, at value (premiums received--$1,783) (Notes 1a & 1c) 1,125
Payables:
Securities purchased 23,288,459
Capital shares redeemed 1,805,947
Distributor (Note 2) 592,475
Investment adviser (Note 2) 396,063 26,082,944
------------
Accrued expenses and other liabilities 437,637
------------
Total liabilities 26,521,706
------------
Net Assets: Net assets $749,798,690
============
Net Assets Class A Shares of Common Stock, $0.01 par value, 500,000,000 shares authorized $ 34,246
Consist of: Class B Shares of Common Stock, $0.01 par value, 500,000,000 shares authorized 604,020
Paid-in capital in excess of par 652,263,675
Undistributed investment income--net 3,227,255
Undistributed realized capital gains on investments and foreign currency transactions--net 59,682,149
Unrealized appreciation on investments and foreign currency transactions--net 33,987,345
------------
Net assets $749,798,690
============
Net Asset Class A--Based on net assets of $39,962,564 and 3,424,576 shares outstanding $ 11.67
Value: ============
Class B--Based on net assets of $709,836,126 and 60,402,048 shares outstanding $ 11.75
============
See Notes to Financial Statements.
</TABLE>
<PAGE>
FINANCIAL INFORMATION (continued)
<TABLE>
Statement of Operations for the Year Ended September 30, 1994
<S> <S> <C> <C>
Investment Interest and discount earned (net of $91,991 foreign withholding tax) $ 21,932,818
Income Dividends (net of $259,965 foreign withholding tax) 6,678,142
(Notes 1d Other 204,094
& 1e): ------------
Total income 28,815,054
------------
Expenses: Distribution fees--Class B (Note 2) 7,779,195
Investment advisory fees (Note 2) 5,173,680
Transfer agent fees--Class B (Note 2) 1,174,407
Custodian fees 190,179
Printing and shareholder reports 182,011
Accounting services (Note 2) 98,036
Transfer agent fees--Class A (Note 2) 53,139
Professional fees 51,144
Registration fees (Note 1f) 49,492
Directors' fees and expenses 48,967
Pricing fees 4,640
Amortization of organization expenses (Note 1f) 2,683
Other 23,017
------------
Total expenses 14,830,590
------------
Investment income--net 13,984,464
------------
Realized & Realized gain from:
Unrealized Investments--net $ 66,568,356
Gain (Loss) Foreign currency transactions--net 1,285 66,569,641
on Investment ------------
& Foreign Change in unrealized appreciation/depreciation on:
Currency Investments--net (72,110,568)
Transactions-- Foreign currency transactions--net 49,571 (72,060,997)
Net (Notes 1b, ------------ ------------
1e & 3): Net realized and unrealized loss on investments and foreign currency transactions (5,491,356)
------------
Net Increase in Net Assets Resulting from Operations $ 8,493,108
============
See Notes to Financial Statements.
</TABLE>
<PAGE>
FINANCIAL INFORMATION (continued)
<TABLE>
Statements of Changes in Net Assets
<CAPTION>
For the Year Ended Sept. 30,
Increase (Decrease) in Net Assets: 1994 1993
<S> <S> <C> <C>
Operations: Investment income--net $ 13,984,464 $ 16,570,858
Realized gain on investments and foreign currency transactions--net 66,569,641 82,929,610
Change in unrealized appreciation/depreciation on investments and
foreign currency transactions--net (72,060,997) 14,121,027
------------ ------------
Net increase in net assets resulting from operations 8,493,108 113,621,495
------------ ------------
Dividends & Investment income--net:
Distributions Class A (1,253,348) (994,119)
to Share- Class B (14,802,935) (17,314,603)
holders 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 (95,351,783) (79,359,908)
------------ ------------
Capital Share Net decrease in net assets derived from capital
Transactions share transactions (34,985,543) (69,858,642)
(Note 4): ------------ ------------
Net Assets: Total decrease in net assets (121,844,218) (35,597,055)
Beginning of year 871,642,908 907,239,963
------------ ------------
End of year* $749,798,690 $871,642,908
============ ============
*Undistributed investment income--net $ 3,227,255 $ 4,746,266
============ ============
See Notes to Financial Statements.
</TABLE>
<PAGE>
FINANCIAL INFORMATION (concluded)
<TABLE>
FINANCIAL HIGHLIGHTS
<CAPTION>
The following per share data and ratios have been derived
from information provided in the financial statements. Class A
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 year $ 13.02 $ 12.57 $ 11.94 $ 10.61 $ 11.93
Operating -------- -------- -------- -------- --------
Performance: Investment income--net .32 .43 .47 .70 .64
Realized and unrealized gain (loss) on investments
and foreign currency transactions (1)--net (.07) 1.29 .61 1.63 (1.41)
-------- -------- -------- -------- --------
Total from investment operations .25 1.72 1.08 2.33 (.77)
-------- -------- -------- -------- --------
Less dividends and distributions:
Investment income--net (.37) (.39) (.45) (.62) (.55)
Realized gain on investments--net (1.23) (.88) -- (.38) --
-------- -------- -------- -------- --------
Total dividends and distributions (1.60) (1.27) (.45) (1.00) (.55)
-------- -------- -------- -------- --------
Net asset value, end of year $ 11.67 $ 13.02 $ 12.57 $ 11.94 $ 10.61
======== ======== ======== ======== ========
Total Based on net asset value per share 1.81% 14.62% 9.23% 23.14% (6.86%)
Investment ======== ======== ======== ======== ========
Return:**
Ratios to Expenses .83% .83% .81% .85% .83%
Average ======== ======== ======== ======== ========
Net Assets: Investment income--net 2.68% 3.09% 3.18% 3.64% 5.12%
======== ======== ======== ======== ========
Supplemental Net assets, end of year (in thousands) $ 39,963 $ 40,688 $ 20,320 $ 12,839 $ 44,511
Data: ======== ======== ======== ======== ========
Portfolio turnover 59.15% 79.55% 65.40% 173.76% 163.56%
======== ======== ======== ======== ========
<PAGE>
<CAPTION>
The following per share data and ratios have been derived
from information provided in the financial statements. Class B
For the Year Ended September 30,
Increase (Decrease) in Net Asset Value: 1994* 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of year $ 13.09 $ 12.62 $ 11.99 $ 10.60 $ 11.91
Operating --------- --------- --------- --------- ----------
Performance: Investment income--net .20 .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 .13 1.61 .95 2.22 (.89)
--------- --------- --------- --------- ----------
Less dividends and distributions:
Investment income--net (.24) (.26) (.32) (.45) (.42)
Realized gain on investments--net (1.23) (.88) -- (.38) --
--------- --------- --------- --------- ----------
Total dividends and distributions (1.47) (1.14) (.32) (.83) (.42)
--------- --------- --------- --------- ----------
Net asset value, end of year $ 11.75 $ 13.09 $ 12.62 $ 11.99 $ 10.60
========= ========= ========= ========= ==========
Total Based on net asset value per share 0.76% 13.49% 8.01% 21.91% (7.79%)
Investment ========= ========= ========= ========= ==========
Return:**
Ratios to Expenses, excluding distribution fees .86% .85% .85% .90% .86%
Average ========= ========= ========= ========= ==========
Net Assets: Expenses 1.86% 1.85% 1.85% 1.90% 1.86%
========= ========= ========= ========= ==========
Investment income--net 1.65% 1.99% 2.10% 3.37% 3.90%
========= ========= ========= ========= ==========
Supplemental Net assets, end of year (in thousands) $ 709,836 $ 830,955 $ 886,920 $ 986,895 $1,171,567
Data: ========= ========= ========= ========= ==========
Portfolio turnover 59.15% 79.55% 65.40% 173.76% 163.56%
========= ========= ========= ========= ==========
<FN>
*Based on average shares outstanding during the year.
**Total investment returns exclude the effect of sales loads.
(1)Foreign currency transaction amounts have been reclassified to conform to 1994 presentation.
See Notes to Financial Statements.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
Merrill Lynch Retirement Benefit Investment Pro-
gram, Inc., Full Investment Portfolio does business
under the name Merrill Lynch Balanced Fund for
Investment and Retirement. Merrill Lynch Balanced
Fund for Investment and Retirement (the "Fund")
is registered under the Investment Company Act
of 1940 as a diversified, open-end management
investment 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 deferred sales charge. Both classes
of shares have identical voting, 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 distribution expenditures. On
September 27, 1994, shareholders approved the
implementation of the Merrill Lynch Select Pricing sm
System, which will offer two new classes of shares,
Class C and Class D. The following is a summary of
significant 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 valued 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 ex-
change are valued according to the broadest and
most representative market. Short-term securities
are valued at amortized cost, which approximates
market value. 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 currencies
are valued at the exchange rate at the end of the
period. Foreign currency transactions are the result
of settling (realized) 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 contracts as a hedge against either spe-
cific transactions or portfolio positions. Such con-
tracts 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 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 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 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 sold through an exercise of an
option, the related 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.
<PAGE>
(d) Income taxes--It is the Fund'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). Divi-
dend income is recorded on the ex-dividend 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.
(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 Fund are recorded on the
ex-dividend dates.
(h) Reclassifications--Certain 1993 amounts have
been reclassified to conform to the 1994 presentation.
Undistributed realized capital gains-net in the
amount of $552,808 has been reclassified to undis-
tributed investment income-net.
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 invest-
ment advisory business of MLAM was reorganized
from a corporation to a limited partnership. Both
prior to and after the reorganization, ultimate con-
trol of MLAM was vested with Merrill Lynch & Co.,
Inc. ("ML & Co."). The general partner of MLAM is
Princeton Services, Inc. ("PSI"), an indirect wholly-
owned subsidiary of ML & Co. The limited partners
are ML & Co. and Merrill Lynch Investment Manage-
ment, Inc. ("MLIM"), which is also an indirect
wholly-owned subsidiary of ML & Co. The Fund has
also entered into a Distribution Agreement and a
Distribution Plan with Merrill Lynch Funds Dis-
tributor, Inc. ("MLFD" or "Distributor"), a wholly-
owned subsidiary of MLIM.
<PAGE>
MLAM is responsible for the management of the
Fund's portfolio and provides the necessary person-
nel, 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 mil-
lion but not exceeding $1.5 billion; 0.55% of the
average 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 annual 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 extraordinary items) exceed 2.5% of the Fund's
first $30 million of average 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 fiscal year which will cause such expenses to
exceed the most restrictive 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 a 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. Pursu-
ant to a sub-agreement with the Distributor, Merrill
Lynch, Pierce, Fenner, & Smith Inc. ("MLPF&S"),
a subsidiary of ML & Co., also provides account
maintenance and distribution services to the Fund.
The ongoing account maintenance fee compensates
the Distributor and MLPF&S for providing account
maintenance services to Class B shareholders.
The ongoing distribution fee compensates the
Distributor and MLPF&S for providing shareholder
and distribution services and bearing certain
distribution-related expenses of the Fund.
For the year ended September 30, 1994, MLFD
earned underwriting discounts of $3,336, and
MLPF&S received dealer concessions of $51,587 on
sales of the Fund's Class A Shares.
MLPF&S received contingent deferred sales charges
of $163,949 relating to transactions in Class B Shares
and $75,348 in commissions on the execution of
portfolio security transactions for the Fund during
the period.
<PAGE>
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.
Certain officers and/or directors of the Fund are
officers and/or directors of MLAM, MLIM, PSI,
MLPF&S, FDS, MLFD, and/or ML & Co.
NOTES TO FINANCIAL STATEMENTS (concluded)
3. Investments:
Purchases and sales of investments, excluding
short-term securities, for the year ended Septem-
ber 30, 1994 were $455,609,366 and $600,829,358,
respectively.
Net realized and unrealized gains (losses) as of
September 30, 1994 were as follows:
Realized Unrealized
Gains Gains
(Losses) (Losses)
Long-term investments $66,532,102 $33,973,189
Options written 36,254 658
Foreign currency
transactions (241,606) 13,498
Forward foreign exchange
contracts 242,891 --
----------- -----------
Total $66,569,641 $33,987,345
=========== ===========
As of September 30, 1994, net unrealized apprecia-
tion for Federal income tax purposes aggregated
$33,973,847, of which $64,172,617 related to appre-
ciated securities and $30,198,770 related to de-
preciated securities. The aggregate cost of invest-
ments less premiums received for options written
at September 30, 1994 for Federal income tax
purposes was $697,139,554.
<PAGE>
Transactions in call options written for the year
ended September 30, 1994 were as follows:
Number of Premiums
Shares Received
Outstanding options at
beginning of year -- --
Options written 32,500 $ 48,779
Options closed (10,400) (10,154)
Options exercised (7,500) (23,007)
Options expired (13,600) (13,835)
----------- -----------
Outstanding options at
end of year 1,000 $1,783
=========== ===========
4. Capital Share Transactions:
Net decrease in net assets derived from capital
share transactions was $34,985,543 and $69,858,642
for the years ended September 30, 1994 and
September 30, 1993, respectively.
Transactions in capital shares for Class A and Class B
Shares were as follows:
Class A Shares for the Year Dollar
Ended September 30, 1994 Shares Amount
Shares sold 1,518,510 $ 18,698,722
Shares issued to share-
holders in reinvestment of
dividends and distributions 428,291 5,110,279
------------ -------------
Total issued 1,946,801 23,809,001
Shares redeemed (1,648,302) (19,908,322)
------------ -------------
Net increase 298,499 $ 3,900,679
============ =============
<PAGE>
Class A Shares for the Year Dollar
Ended September 30, 1994 Shares Amount
Shares sold 2,695,028 $ 33,091,210
Shares issued to share-
holders in reinvestment
of distributions 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 Year Dollar
Ended September 30, 1994 Shares Amount
Shares sold 2,858,236 $ 35,039,885
Shares issued to share-
holders in reinvestment of
dividends and distributions 6,329,365 76,402,900
------------ -------------
Total issued 9,187,601 111,442,785
Shares redeemed (12,275,154) (150,329,007)
------------ -------------
Net decrease (3,087,553) $ (38,886,222)
============ =============
Class B Shares for the Year Dollar
Ended September 30, 1994 Shares Amount
Shares sold 2,722,243 $ 34,400,436
Shares issued to share-
holders in reinvestment
of distributions 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 September 30, 1994, the Fund held a US Treasury
Bond having an value of approximately $4,169,000 as
collateral for portfolio securities loaned having a
market value of approximately $4,050,000.
<PAGE>
6. Commitments:
At September 30, 1994, the Fund had entered into
forward foreign exchange contracts under which it
had agreed to purchase and sell various foreign
currencies with values of approximately $183,000
and $772,000.
<AUDIT-REPORT>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders,
Merrill Lynch Balanced Fund for Investment and
Retirement (formerly Merrill Lynch Retirement
Benefit Investment Program, Inc.):
We have audited the accompanying statement of
assets and liabilities, including the schedule of invest-
ments, of Merrill Lynch Balanced Fund for Invest-
ment and Retirement as of September 30, 1994, the
related statements of operations for the year then
ended and changes in net assets for each of the years
in the two-year period then ended, and the financial
highlights for each of the years in the five-year period
then ended. These financial statements and the
financial highlights are the responsibility of the
Fund's management. Our responsibility is to express
an opinion on these financial statements and
the financial highlights based on our audits.
We conducted our audits in accordance with gener-
ally accepted auditing standards. Those standards
require that we plan and perform the audit to obtain
reasonable assurance about whether the financial
statements and the financial highlights are free of
material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts
and disclosures in the financial statements. Our
procedures included confirmation of securities
owned at September 30, 1994 by correspondence
with the custodian and brokers. An audit also in-
cludes assessing the accounting principles used and
significant estimates made by management, as well
as evaluating the overall financial statement
presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements and
financial highlights present fairly, in all material
respects, the financial position of Merrill Lynch
Balanced Fund for Investment and Retirement as of
September 30, 1994, the results of its operations, the
changes in its net assets, and the financial high-
lights for the respective stated periods in conformity
with generally accepted accounting principles.
Deloitte & Touche LLP
Princeton, New Jersey
October 31, 1994
</AUDIT-REPORT>
<PAGE>
PORTFOLIO INFORMATION
Ten Largest Equity Holdings Percent of
As of September 30, 1994 Net Assets
Singer Co. N.V. (ADR) 3.0%
Computer Sciences Corp. 2.5
Wheelabrator Technologies, Inc. 2.3
Procter & Gamble Co. 1.9
Telefonos de Mexico, S.A. de C.V. (ADR) 1.7
Sunbeam-Oster Inc. 1.5
LDDS Communications Inc. (Class A) 1.5
Danka Business Systems PLC (ADR) 1.5
Humana Inc. 1.4
MCI Communications Corp. 1.4
APPENDIX GRAPHIC AND IMAGE MATERIALS.
ITEM 1:
PORTFOLIO SUMMARY
Sector Representation As a Percentage of US Equities as of
September 30, 1994
A bar graph depicting the Fund's sector representation as a
percentage of US equities as of September 30, 1994 is a follows:
Basic Industry 12.l%
Credit-Sensitive &
Financial Services 8.6%
Transports 1.6%
Consumer Goods & Services 25.8%
Capital Spending 30.0%
Energy 7.7%
Utilities 14.2%
<PAGE>
Security Diversification As of September 30, 1994
A bar graph depicting the Fund's security diversification as of
September 30, 1994 is as follows:
Stocks 59.1% US 48.9%
Non US 10.2%
Bonds 32.4% US 25.5%
Non US 6.9%
Cash & Cash Equivalents 8.5%
ITEM 2:
Total Return Based on a $10,000 Investment
A line graph depicting the growth of an investment in the Fund's
Class A Shares compared to growth of an investment in the S&P 500
Index and the S&P 500/ML BOAO Blended Index. Beginning and ending
values are:
10/27/88** 9/30/94
ML Balanced Fund, Inc.++--
Class A Shares $9,350 $15,794
S&P 500 Index++++ $10,000 $20,127
S&P 500/ML BOAO Blended Index++++++ $10,000 $18,358
[FN]
*Assuming maximum sales charge, transaction costs and other
operating expenses, including advisory fees.
**Commencement of Operations.
++ML Balanced Fund invests primarily in high quality, larger
capitalization common stocks and other types of securities,
including fixed-income securities and convertible securities.
++++This unmanaged broad-based Index is comprised of common
stocks.
++++++This unmanaged Index, which is an equally weighted blend of
the S&P 500 Index and the ML BOAO Index, is comprised of
common stocks as well as investment-grade bonds.
<PAGE>
A line graph depicting the growth of an investment in the Fund's
Class B Shares compared to growth of an investment in the S&P 500
Index and the S&P 500/ML BOAO Blended Index. Beginning and ending
values are:
11/29/85** 9/30/94
ML Balanced Fund, Inc.++--
Class B Shares* $10,000 $20,315
S&P 500 Index++++ $10,000 $30,484
S&P 500/ML BOAO Blended Index++++++ $10,000 $26,618
[FN]
*Assuming maximum sales charge, transaction costs and other
operating expenses, including advisory fees.
**Commencement of Operations.
++ML Balanced Fund invests primarily in high quality, larger
capitalization common stocks and other types of securities,
including fixed-income securities and convertible securities.
++++This unmanaged broad-based Index is comprised of common
stocks.
++++++This unmanaged Index, which is an equally weighted blend of
the S&P 500 Index and the ML BOAO Index, is comprised of
common stocks as well as investment-grade bonds.
