MERRILL LYNCH
BALANCED FUND FOR
INVESTMENT AND
RETIREMENT, INC.
FUND LOGO
Quarterly Report
June 30, 1995
Officers and Directors
Arthur Zeikel, President and 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
<PAGE>
Custodian
The Chase Manhattan Bank, N.A.
4 Chase MetroTech Center, 18th Floor
Brooklyn, NY 11245
Transfer Agent
Merrill Lynch Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 637-3863
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
Balanced Fund for
Investment and
Retirement, Inc.
Box 9011
Princeton, NJ
08543-9001
Merrill Lynch Balanced Fund for Investment and Retirement, Inc.
PORTFOLIO SUMMARY AS OF JUNE 30, 1995
Security Diversification
A pie chart illustrating the following percentages:
US Stocks 49.7%
International Stocks 9.2%
US Bonds 26.4%
International Bonds 11.7%
Cash 3.0%
<PAGE>
Sector Allocation
A pie chart illustrating the following percentages:
Capital Spending 40.2%
Energy 7.7%
Basic Industry 5.6%
Credit-Sensitive &
Financial Services 17.1%
Transports 0.1%
Utilities 9.9%
Consumer Cyclicals 5.8%
Consumer Staples 13.6%
US Domiciled Common Stock S&P
Investments Fund 500*
After-Tax Profit Margin 8.0% 7.1%
Yield 1.9% 2.4%
Price/Earnings Ratio** 16.0 16.0
Return on Equity 19.1% 17.5%
Average Capitalization (in billions) $15.7 $8.0
Earnings Growth Rate (5 yr. average) 21.0% 11.0%
[FN]
*An unmanaged broad-based index comprised of common stocks.
**Based on 1995 earnings estimates.
Merrill Lynch
Fixed-Income Investments Fund B0A0 Index*
Duration 4.9 Years 5.3 Years
Average Maturity 7.7 Years 9.4 Years
Asset Breakdown:
US Treasuries/Agencies 58.8% 76.5%
Corporates 12.7% 23.5%
International Governments 28.5% --
[FN]
*An unmanaged market-weighted corporate and Government master
bond index reflecting approximately 97% of total outstanding US
bonds.
<PAGE>
Percent of
Currency Diversification Net Assets
US Dollar 80.0%
German Mark 9.0
Canadian Dollar 2.3
Australian Dollar 1.8
Chilean Peso 1.2
French Franc 0.8
Netherlands Guilder 0.8
Hong Kong Dollar 0.7
Mexican Peso 0.7
Norwegian Krone 0.7
Swedish Krona 0.6
Danish Krone 0.5
UK Sterling 0.4
Spanish Peseta 0.3
Indonesian Rupiah 0.1
Chinese Renminbi 0.1
Percent of US Equities vs. S&P
S&P 500 Index Fund vs. 500*
Basic Industry 5.6% 7.2%
Capital Spending 40.3 23.5
Conglomerates 0.0 1.3
Consumer Cyclicals 5.8 9.1
Consumer Staples 13.6 26.0
Credit-Sensitive & Financial Services 17.1 11.6
Energy 7.7 10.6
Transports 0.1 1.6
Utilities 9.9 9.1
[FN]
*An unmanaged broad-based index comprised of common stocks.
DEAR SHAREHOLDER
During 1994 and into early 1995 the Federal Open Market Committee
(FOMC) moved repeatedly to slow the pace of US economic growth.
Evidence of its success has grown in recent months as the US gross
domestic product (GDP) growth rate declined to very modest
proportions in the second quarter. In fact, some economists believe
second quarter GDP was flat or declined relative to the first
quarter rate. At the same time, we see evidence that lower interest
rates in the market place helped housing activity to improve from
depressed levels.
<PAGE>
Noting that inflation is a lagging indicator, the Federal Reserve
Board moved to preempt inflation in 1994 before it gained headway
and became ingrained in pricing. Recently investors became more
optimistic that the Federal Reserve Board would move to sustain
economic growth at its indicated target range of 2%--2.5% by
reducing short-term interest rates as it did on July 6, 1995. While
the need for an interest rate cut was a matter of controversy,
equity markets inside and outside the United States began to rally
anticipating some stimulation and rallied further when the interest
rate was cut 0.25%. It seems possible that the Federal Funds rate
will be reduced again some time in the second half of this year if
necessary to assure economic growth going into 1996, a presidential
election year.
The US economy is experiencing a dichotomy with the products segment
shrinking while services continue to expand. This explains why
freight volume was weak during the second quarter of 1995 as
consumer goods inventories have risen to levels deemed excessive
relative to sales. Low demand for products suggests inflation will
not be excessive going forward, especially if employment remains
soft and productivity gains are achieved.
Subsequent to the end of the second quarter, the FOMC reduced the
Federal Funds rate from 6% to 5.75%, reflecting its belief that the
risk of future inflation problems is small. This should lead to a
modest reacceleration of economic activity, which some economists
believe would have eventually occurred without an interest rate cut.
While a slower rate of economic activity in the second quarter is
likely to have depressed corporate profits, the decline in interest
rates was sufficient to justify a higher valuation of stocks,
permitting higher stock prices despite tempered earnings estimates.
Before year-end it is likely earnings estimates will again be raised
to reflect economic reacceleration.
Investment Strategy
Among domestic equity investments, it is likely we will continue to
emphasize firms producing labor-saving and productivity-enhancing
products and services. Although we do not expect interest rates to
drop sharply on long-term maturity obligations, short-term interest
rates could decline further, enhancing prospects for bank lenders
which have become more competitive providers of corporate loans.
Other themes we continue to pursue are restructuring, ration-
alization and earnings acceleration. Recently we began investing
in the air conditioning and aircraft manufacturing groups. Corporate
beneficiaries of a weak US dollar in the foreign exchange market
are more likely to be de-emphasized. We believe that the US dollar
is beginning to stabilize as foreign and domestic investors and
speculators witness real action to shrink the US budget deficit.
<PAGE>
Our bond portfolio has contributed to total return as yields
declined, but we expect more modest returns from bonds in the second
half of 1995. Accordingly, we have shortened the portfolio duration
from 5.6 years to 4.9 years and modestly adjusted the asset mix to
favor stocks at the expense of bonds and cash equivalents as short-
term interest rates declined.
Equity investments in firms based outside the United States recently
began to decline after having increased modestly from February
through May. When investing outside the United States we continue to
emphasize shares of companies which sell at modest price/earnings
multiples relative to earnings growth rates. Bond investments
denominated in non-US dollars were focused on Deutschemark
obligations which produced above-average returns in US dollar terms
as the US dollar declined. During the third quarter of 1995, the
percentage of non-US dollar-denominated bonds is likely to decline
as the US dollar stabilizes.
In Conclusion
We thank you for your continued investment in Merrill Lynch Balanced
Fund for Investment and Retirement, Inc., and we look forward to
sharing our strategy with you in our upcoming annual report to
shareholders.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Denis B. Cummings)
Denis B. Cummings
Vice President and Portfolio Manager
July 25, 1995
<PAGE>
PERFORMANCE DATA
About Fund Performance
Since October 21, 1994, investors have been able to purchase shares
of the Fund through the Merrill Lynch Select Pricing SM System,
which offers four pricing alternatives:
* Class A Shares incur a maximum initial sales charge (front-end load)
of 5.25% and bear no ongoing distribution or account maintenance
fees. Class A Shares are available only to eligible investors.
* Class B Shares are subject to a maximum contingent deferred sales
charge of 4% if redeemed during the first year, decreasing 1% each
year thereafter to 0% after the fourth year. In addition, Class B
Shares are subject to a distribution fee of 0.75% and an account
maintenance fee of 0.25%. These shares automatically convert to
Class D Shares after approximately 8 years.
* Class C Shares are subject to a distribution fee of 0.75% and an
account maintenance fee of 0.25%. In addition, Class C Shares are
subject to a 1% contingent deferred sales charge if redeemed within
one year of purchase.
* Class D Shares incur a maximum initial sales charge of 5.25% and
an account maintenance fee of 0.25% (but no distribution fee).
Performance data for the Fund's Class A and Class B Shares are
presented in the "Average Annual Total Return" and "Performance
Summary" tables below and on page 5. "Aggregate Total Return" tables
for Class C and Class D Shares are also presented below. Data for
all of the Fund's shares are presented in the "Recent Performance
Results" table on page 6.
The "Recent Performance Results" table shows investment results
before the deduction of any sales charges for Class A and Class B
Shares for the 12-month and 3-month periods ended June 30, 1995 and
for Class C and Class D Shares for the since inception and 3-month
periods ended June 30, 1995. All data in this table assume
imposition of the actual total expenses incurred by each class of
shares during the relevant period.
None of the past results shown should 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. Dividends paid to each class
of shares will vary because of the different levels of account
maintenance, distribution and transfer agency fees applicable to
each class, which are deducted from the income available to be paid
to shareholders.
<PAGE>
Average Annual Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 6/30/95 +11.09% +5.25%
Five Years Ended 6/30/95 + 8.73 +7.56
Inception (10/27/88)
through 6/30/95 + 9.19 +8.31
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 6/30/95 +9.94% +5.94%
Five Years Ended 6/30/95 +7.63 +7.63
Inception (11/29/85) through 6/30/95 +8.30 +8.30
[FN]
*Maximum contingent deferred sales charge is 4% and is reduced
to 0% after 4 years.
**Assuming payment of applicable contingent deferred sales charge.
Aggregate Total Return
% Return % Return
Without CDSC With CDSC**
Class C Shares*
Inception (10/21/94)
through 6/30/95 +5.85% +4.88%
[FN]
*Maximum contingent deferred sales charge is 1% and is reduced
to 0% after 1 year.
**Assuming payment of applicable contingent deferred sales charge.
<PAGE>
% Return Without % Return With
Sales Charge Sales Charge**
Class D Shares*
Inception (10/21/94) through 6/30/95 +6.25% +0.67%
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
PERFORMANCE DATA (continued)
<TABLE>
Performance Summary--Class A Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<S> <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
1994 12.33 10.19 0.885 0.441 - 6.55
1/1/95--6/30/95 10.19 11.16 -- -- + 9.52
------ ------
Total $3.028 Total $3.898
Cumulative total return as of 6/30/95: +79.84%**
<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.
<PAGE>
</TABLE>
<TABLE>
Performance Summary--Class B Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<S> <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
1994 12.44 10.37 0.885 0.262 - 7.38
1/1/95--6/30/95 10.37 11.29 -- -- + 8.87
------ ------
Total $3.530 Total $3.976
Cumulative total return as of 6/30/95: +114.74%**
<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
reflect deduction of any sales charge; results would be lower if
sales charge was deducted.
</TABLE>
PERFORMANCE DATA (concluded)
<TABLE>
Recent Performance Results
<CAPTION>
12 Month 3 Month
6/30/95 3/31/95 6/30/94++ % Change++ % Change
<S> <C> <C> <C> <C> <C>
ML Balanced Fund Class A Shares* $11.16 $10.47 $11.36 + 6.80%(1) +6.59%
ML Balanced Fund Class B Shares* 11.29 10.62 11.41 + 7.42(1) +6.31
ML Balanced Fund Class C Shares* 11.19 10.52 11.74 + 3.56(1) +6.37
ML Balanced Fund Class D Shares* 11.13 10.46 11.66 + 3.78(1) +6.41
ML Balanced Fund Class A Shares--Total Return* +11.09(2) +6.59
ML Balanced Fund Class B Shares--Total Return* + 9.94(3) +6.31
ML Balanced Fund Class C Shares--Total Return* + 5.85(4) +6.37
ML Balanced Fund Class D Shares--Total Return* + 6.25(3) +6.41
S&P 500/ML B0A0 Blended Index--Total Return** +19.29 +7.96
<PAGE>
<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.
++Investment results shown for Class C and Class D Shares are since
inception (10/21/94).
(1)Percent change includes reinvestment of $0.885 per share capital
gains distributions.
(2)Percent change includes reinvestment of $0.441 per share ordinary
income dividends and $0.885 per share capital gains distributions.
(3)Percent change includes reinvestment of $0.262 per share ordinary
income dividends and $0.885 per share capital gains distributions.
(4)Percent change includes reinvestment of $0.246 per share ordinary
income dividends and $0.885 per share capital gains distributions.
</TABLE>
PORTFOLIO INFORMATION
Top Ten Equity Holdings Percent of
As of June 30, 1995 Net Assets
Computer Sciences Corp. 2.1%
Mobil Oil Corp. 1.8
International Telephone & Telegraph Corp. 1.8
News Corp. Ltd. (Preferred) (ADR) 1.8
WorldCom, Inc. 1.7
BankAmerica Corp. 1.6
Texas Instruments, Inc. 1.6
The Bank of New York Co. 1.5
Eastman Chemical Co. 1.5
General Electric Company 1.4
<TABLE>
SCHEDULE OF INVESTMENTS
<CAPTION>
Face Percent of
Industries Amount* Corporate Bonds Cost Value Net Assets
<S> <C> <S> <C> <C> <C>
Financial Services $ 10,000,000 Ford Capital BV, 9.375% due 1/01/1998 $ 10,037,900 $ 10,679,600 1.6%
5,000,000 Landeskreditbank, N.V., 7.875% due 4/15/2004 4,972,068 5,409,800 0.8
Financial Services 10,000,000 American General Financial Corp., 7.38%
- --Consumer due 5/13/1997 9,993,200 10,194,100 1.6
Total Investments in Corporate Bonds 25,003,168 26,283,500 4.0
<PAGE>
Foreign Government & Agency Obligations
Canada 17,000,000 Government of Canada, 7.50% due 9/01/2000 12,513,374 12,358,331 1.9
Italy 5,000,000 Republic of Italy, 8.75% due 2/08/2001 5,373,050 5,432,820 0.8
Total Investments in Foreign Government &
Agency Obligations 17,886,424 17,791,151 2.7
US Government & Agency Obligations
United States 4,910,000 Federal Home Loan Mortgage Corp., REMIC (a)
1243-HP, 5.625% due 11/25/2015 4,788,017 4,762,700 0.7
Federal National Mortgage Association:
10,253,154 7.00% due 5/01/2024 9,455,330 10,076,902 1.6
9,713,013 8.00% due 10/01/2024 9,274,410 9,892,024 1.5
19,713,511 8.00% due 12/01/2024 19,365,444 20,076,831 3.1
US Treasury Notes:
55,000,000 7.875% due 8/15/2001 53,943,600 60,044,600 9.2
25,000,000 6.25% due 2/15/2003 25,710,938 25,066,500 3.8
22,000,000 US Treasury STRIPS++, 4.79% due 5/15/2000 (b) 16,327,312 16,562,040 2.5
Total Investments in US Government &
Agency Obligations 138,865,051 146,481,597 22.4
Foreign Obligations
Germany Bundes:
DM 41,000,000 6.00% due 2/20/1998 28,434,350 30,016,299 4.6
39,000,000 7.375% due 1/03/2005 28,301,661 28,915,835 4.4
Total Investments in Foreign Obligations 56,736,011 58,932,134 9.0
Total Investments in Corporate Bonds,
Foreign Government & Agency Obligations,
US Government & Agency Obligations
& Foreign Obligations 238,490,654 249,488,382 38.1
<PAGE>
Shares
Held US Stocks
Basic Industry
Aluminum 45,000 Aluminum Co. of America (ALCOA) 2,163,584 2,255,625 0.3
Chemicals 25,000 Dow Chemical Company (The) 1,830,246 1,796,875 0.3
161,700 Eastman Chemical Co. 8,319,546 9,621,150 1.5
6,000 Engelhard Corporation 243,360 257,250 0.0
Packaging 68,400 Crown Cork & Seal Co., Inc. 2,592,924 3,428,550 0.5
Total Basic Industry 15,149,660 17,359,450 2.6
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued)
<CAPTION>
Shares Percent of
Industries Held US Stocks Cost Value Net Assets
<S> <C> <S> <C> <C> <C>
Capital Spending
Aerospace 85,000 Boeing Company (The) $ 5,238,054 $ 5,323,125 0.8%
27,200 Crane Company 973,482 986,000 0.2
55,000 United Technologies Corp. 4,234,305 4,296,875 0.7
Communication 207,100 ADC Telecommunications, Inc. 4,662,321 7,352,050 1.1
Equipment 200,000 DSC Communications Corp. 6,002,887 9,300,000 1.4
100,000 Tellabs, Inc. 1,985,278 4,800,000 0.7
Computer Equipment 130,000 Compaq Computer Corp. 5,191,270 5,898,750 0.9
Computer Services 240,000 Computer Sciences Corp. 8,363,896 13,650,000 2.1
200,000 General Motors Corp. (Class E) 8,133,371 8,700,000 1.3
Computer 90,000 International Business Machines Corp. 8,355,734 8,640,000 1.3
Electrical Equipment 165,000 General Electric Company 9,160,779 9,301,875 1.4
171,181 Siebe PLC 1,583,654 1,709,814 0.3
125,000 W.W. Grainger 7,322,793 7,343,750 1.1
<PAGE>
Electronics 90,000 Solectron Corp. 2,446,725 3,071,250 0.5
Environmental Control 550,000 Wheelabrator Technologies, Inc. 7,310,684 8,456,250 1.3
Machinery & Equipment 61,800 York International Corporation 2,657,647 2,781,000 0.4
Office Equipment 380,000 Danka Business Systems PLC (ADR)(c)(1) 6,702,446 9,167,500 1.4
Semiconductors 84,000 Intel Corp. 3,376,734 5,313,000 0.8
76,000 Texas Instruments, Inc. 8,874,621 10,174,500 1.6
Software 130,000 Novell, Inc. 2,756,709 2,583,750 0.4
Total Capital Spending 105,333,390 128,849,489 19.7
Consumer Cyclicals
Appliances 270,000 Singer Co. N V. (ADR) (c)(1) 7,485,543 6,986,250 1.1
Automotive 200,000 Ford Motor Company 5,714,067 5,950,000 0.9
Automotive Equipment 55,000 Magna International, Inc. (ADR) (c)(1) 2,005,798 2,426,875 0.4
Retail 95,000 Sears, Roebuck and Co. 5,131,163 5,688,125 0.9
Retail--Specialty 50,000 Michaels Stores, Inc. 1,565,057 1,062,500 0.1
85,000 Toys 'R' Us, Inc. 2,310,893 2,486,250 0.4
Total Consumer Cyclicals 24,212,521 24,600,000 3.9
Consumer Staples
Beverages 45,000 PepsiCo, Inc. 1,735,320 2,053,125 0.3
Consumer--Services 90,000 H & R Block, Inc. 3,713,461 3,701,250 0.6
<PAGE>
Drug Stores 80,000 Revco D.S., Inc. 1,725,576 1,920,000 0.3
Foods 70,000 General Mills, Inc. 3,396,222 3,596,250 0.5
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued)
<CAPTION>
Shares Percent of
Industries Held US Stocks Cost Value Net Assets
<S> <C> <S> <C> <C> <C>
Consumer Staples (concluded)
Healthcare 264,000 Humana Inc. $ 5,224,586 $ 4,653,000 0.7%
210,000 Physician Corp. of America 4,417,467 2,835,000 0.4
Household Products 80,000 Procter & Gamble Co. 4,644,056 5,750,000 0.9
Pharmaceuticals 55,000 American Home Products Corp. 3,726,541 4,255,625 0.7
90,000 Merck & Co., Inc. 3,378,018 4,410,000 0.7
Photography 130,000 Eastman Kodak Co. 6,510,533 7,881,250 1.2
Restaurants 80,000 Darden Restaurants Inc. 837,277 870,000 0.1
Total Consumer Staples 39,309,057 41,925,500 6.4
Credit-Sensitive & Financial Services
Banking 240,000 The Bank of New York Co. 7,033,770 9,690,000 1.5
15,000 The Bank of New York Co. (Warrants)(e) 168,750 318,750 0.1
200,000 BankAmerica Corp. 9,113,967 10,525,000 1.6
60,000 CoreStates Financial Corp. 2,119,130 2,092,500 0.3
325,000 Espirito Santo Financial Holdings S.A.
(ADR)(c)(1) 4,538,463 3,778,125 0.6
Insurance 115,000 Aetna Life & Casualty Co. 6,464,912 7,230,625 1.1
80,000 American International Group, Inc. 8,387,269 9,120,000 1.4
99,500 International Telephone & Telegraph Corp. 8,599,833 11,691,250 1.8
70,000 National Re Corp. 2,016,028 2,345,000 0.4
<PAGE>
Total Credit-Sensitive & Financial
Services 48,442,122 56,791,250 8.8
Energy
Energy--Related 100,000 California Energy Co., Inc. 1,812,245 1,637,500 0.3
Oil--Integrated 100,000 Chevron Corporation 4,855,702 4,662,500 0.7
125,000 Mobil Oil Corp. 9,757,153 12,000,000 1.8
45,000 Royal Dutch Petroleum Co. N.V. (ADR)(c)(1) 4,095,693 5,484,375 0.8
Total Energy 20,520,793 23,784,375 3.6
Transports
Railroads 35,000 Canadian Pacific Ltd. 608,125 608,125 0.1
Total Transports 608,125 608,125 0.1
Utilities
Utilities-- 101,000 ALC Communications Corp. 3,366,045 4,557,625 0.7
Communications 180,000 GTE Corp. 5,790,102 6,142,500 0.9
150,000 MCI Communications Corp. 4,296,212 3,281,250 0.5
120,000 SBC Communications Inc. 5,086,535 5,715,000 0.9
410,000 WorldCom, Inc. 9,427,929 11,018,750 1.7
Total Utilities 27,966,823 30,715,125 4.7
Total Investments in US Stocks 281,542,491 324,633,314 49.7
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued)
<CAPTION>
Shares Percent of
Industries Held Foreign Stocks Cost Value Net Assets
<S> <C> <S> <C> <C> <C>
Australia
Media/Publishing 575,000 News Corp. Ltd. (Preferred)(ADR)(c) $ 9,900,314 $ 11,500,000 1.8%
Canada
Appliances 280,000 Semi-Tech Corp. (d) 2,947,648 1,121,631 0.2
Chemicals 135,000 NOVA Corp. (Class A) 1,418,715 1,147,500 0.2
Chile
Banking 77,000 Banco O'Higgins (ADR) (c) 1,181,242 1,771,000 0.3
Packaging 60,000 Christalerias de Chile S.A. (ADR)(c) 1,105,062 1,485,000 0.2
Utilities--Electric 96,600 Distribuidora Chilectra Metropolitan
S.A. (ADR)(c) 2,696,793 4,830,000 0.7
Denmark
Utilities-- 120,000 Tele Danmark A/S (ADR)(c) 2,900,712 3,360,000 0.5
Communications
France
Advertising 45,000 Havas S.A. 3,961,018 3,565,828 0.6
<PAGE>
Metals--Non-Ferrous 21,100 Eramet 1,385,457 1,506,521 0.2
Hong Kong
Banking 286,378 HSBC Holdings PLC 1,750,973 3,673,506 0.6
Electrical Equipment 165,000 Johnson Electric Co. 337,378 332,674 0.1
Oil/Gas 2,000,000 Shanghai Petrochemial Co., Ltd. 668,375 626,834 0.1
Utilities-- 45,000 Hong Kong Telecommunications Ltd. 932,453 894,375 0.1
Communications
Indonesia
Telecommunications 9,000 P.T. Indonesian Satellite (ADR)(c) 311,138 344,250 0.1
Tobacco 74,500 P.T. Hanjaya Mandala Sampoerna 415,075 585,692 0.1
Mexico
Multi-Industry 433,800 Grupo Carso, S.A. de C.V. (ADR)(c) 3,832,850 4,717,575 0.7
Netherlands
Computer Services 112,800 Getronics N.V. 4,942,381 5,528,198 0.8
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded)
<CAPTION>
Shares Percent of
Industries Held Foreign Stocks Cost Value Net Assets
<S> <C> <S> <C> <C> <C>
Norway
Telecommunications 148,725 Nera AS $ 4,237,097 $ 4,223,428 0.6%
<PAGE>
Spain
Petroleum 70,000 Repsol S.A. 2,303,231 2,213,750 0.3
Sweden
Telecommunications 200,000 Ericsson (LM) Telephone Co. 3,475,457 4,000,000 0.6
United Kingdom
Leisure/ 135,000 Thorn EMI PLC 2,599,112 2,802,063 0.4
Entertainment
Total Investments in Foreign Stocks 53,302,481 60,229,825 9.2
Total Investments in US & Foreign
Stocks & Warrants 334,844,972 384,863,139 58.9
Face
Amount* Issue
Short-Term Securities
Commercial Paper** $ 4,145,000 Associates Corporation of North America,
6.20% due 7/03/1995 4,143,572 4,143,572 0.6
30,000,000 Creditanstalt Finance, Inc., 5.94% due
7/13/1995 29,940,600 29,940,600 4.6
Total Investments in Short-Term Securities 34,084,172 34,084,172 5.2
Total Investments $607,419,798 668,435,693 102.2
============
Liabilities in Excess of Other Assets (14,460,658) (2.2)
------------ ------
Net Assets $653,975,035 100.0%
============ ======
Net Asset Value: Class A--Based on net assets of $30,678,819 and 2,749,328
shares outstanding $ 11.16
============
Class B--Based on net assets of $179,207,071 and 15,876,589
shares outstanding $ 11.29
============
Class C--Based on net assets of $838,307 and 74,949 shares
outstanding $ 11.19
============
Class D--Based on net assets of $443,250,838 and 39,810,390
shares outstanding $ 11.13
============
<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).
(d)Formerly named International Semi-Tech Corp.
(e)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.
*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.
++Separate Trading of Registered Interest and Principal of
Securities (STRIPS).
</TABLE>
