MERRILL LYNCH
GLOBAL
RESOURCES
TRUST
[GRAPHIC OMITTED]
STRATEGIC
Performance
Semi-Annual Report
January 31, 1998
<PAGE>
MERRILL LYNCH GLOBAL RESOURCES TRUST
DEAR SHAREHOLDER
Merrill Lynch Global Resources Trust faced a difficult investment environment
during the three-month period ended January 31, 1998. The Trust had been
invested under the assumption that the economic outlook during 1997 would
provide a positive environment for investments in natural resources. This
expectation was based on increased commodity demand arising from continued
moderate global economic growth led by strong business activity in the United
States. We believed the combination of moderate global economic growth and
continued modest inflationary pressures would support a continuation of the
economic cycle, with positive implications for basic materials demand.
The collapse of Asian currencies during the second half of 1997, and consequent
deterioration of financial conditions, played havoc with the investment thesis
on which the Trust's portfolio was structured. Growth estimates for Asian
economies were sharply reduced, with economic contraction in 1998 now possible
for several nations in the region. Investors increasingly focused on the
potential for commodity price deflation, and speculation shifted to the impact
the Asian debacle could have on Western economies. Trust returns suffered during
November and December as lower demand forecasts and declining commodity prices
led to earnings estimate reductions across a broad spectrum of natural resource
companies.
The significant investment of Trust assets in gold shares continued to hurt
performance, especially during November. Gold shares continued to fall on
concerns regarding the ramifications of the potential sale of gold reserves by
the Swiss central bank, exacerbated by fears of declining gold demand caused by
the economic collapse in Southeast Asia. The price of gold reached lows not seen
in nearly 18 years as deflationary fears became more prominent in economic
forecasts and inflation reports came in at or below estimates. The failure of
gold to perform as a safe haven in a time of currency crisis may undermine the
premium multiples that have traditionally been awarded to the shares of gold
mining stocks.
The Trust's largest investment representation continued to be in the energy
sector, with particular emphasis on exploration and production companies. The
shares of independent oil companies initially appreciated on rising natural gas
prices and as merger activity ignited takeover fever in several names in the
group. However, gains in the sector were short-lived as energy prices fell in
response to the combined impact of politics and weather. In November, the
Organization of Petroleum Exporting Countries (OPEC) raised quota levels for the
first time in four years. Since OPEC had already been producing well above its
quota, the incremental barrels added to the market were marginal. However, the
quota increase coincided with the slowdown in Asian consumption and with the
emergence of mild weather conditions arising from the El Nino climatic
phenomenon. Increased oil production and the declining growth rate of demand,
coupled with ample worldwide inventories, drove oil prices down to their lowest
levels in over four years. Oil service companies' share prices were particularly
strong early in November, as pricing for oil services continued to escalate and
as early announcements of oil company capital spending plans continued to show
double-digit gains in service spending. Given the strong appreciation of the oil
service sector during 1997, we took profits in some holdings. We sold our
positions in Petroleum Geo-Services ASA and Smedvig ASA. Oil service holdings
were concentrated in companies that would benefit from the later stages of the
capital spending cycle, which included a new position in Stolt Comex Seaway S.A.
While earnings estimates for the Trust's oil service holdings held firm, the
contraction in price/earnings multiples arising from declining oil and gas
prices hurt performance of all oil service stocks.
Chemical investments were solid performers, as declining feedstock costs
supported earnings forecasts despite rising capacity in many product areas. The
Trust was severely underexposed to this sector, with only a 4% weighting in
chemical stocks, compared to the 20% representation in the Morgan Stanley
Capital International Natural Resources Index.
1
<PAGE>
Merrill Lynch Global Resources Trust January 31, 1998
While the chemical sector did not appreciate significantly in absolute terms,
Trust results suffered to the extent that it was invested in other sectors that
experienced steep price declines.
We increased Trust holdings of paper and forest products shares during 1997 as
signs were observed that the two-year slide in commodity prices had ended. The
poor pricing environment had curtailed plans for new capacity in some grades,
and a trend toward consolidation had emerged. The rally in forest products
shares was aborted when Asian currency collapses led to fears of lower demand
growth. Despite the declines in paper and timber prices, the outlook for some
paper products still appears favorable and we will concentrate the Trust's
investments in companies with exposures to these products.
Base metals stocks were also heavily weighted in the Trust, with a particular
emphasis on copper stocks. Strong economic growth in North America and a budding
recovery in Europe saw copper prices strengthen during the first half of 1997.
Trust management had expected that rising demand for base metals would lead to
declining inventories and improved metals prices and company earnings. However,
copper inventories rose on the London Metals Exchange from distressed sales of
producer stocks and as Asian consumers pared their inventories. Combined with
the fears of an impending economic slowdown in Asia, the price of copper
declined from its summer peak, exceeding $1.20 per pound, to levels as low as
$0.76 per pound during December. Given that many mines produce gold, as well as
other mineral by-products, in association with copper production, the share
price declines were leveraged to the broad fall in metals prices. A significant
number of portfolio holdings in base metals producers were in Australian- and
Canadian-domiciled companies. To the extent that the currencies of these
commodity-exposed nations declined, the Trust suffered further adverse returns
in response to currency translation.
Investment Activities
There were no significant geographic or industry allocation changes in the Trust
during the three-month period ended January 31, 1998. The Trust was fully
invested during this period; however, cash levels had been raised slightly in
order to limit exposure to continued broad-based selling of resource stocks as
well as to take advantage of opportunities that might arise from share price
declines. We established a new position in Stolt Comex Seaway S.A. in the oil
sector and took some profits in the shares of Louisiana Land and Exploration Co.
and Chauvco Resources Ltd. after their stock prices rose following acquisition
bids. Modest reductions were made in the shares of gold mining companies as the
price of gold continued to be pressured from central bank sales. We reduced our
positions in Japanese industrial and mining shares, given the risk of reduced
exports to their trading partners in the Pacific Rim. Several stocks were
eliminated from the Trust, including positions in Greenstone Resources Ltd.,
Westmin Resources, Ltd., William Resources Inc., Cyprus Amax Minerals Co.,
Freeport-McMoRan Copper & Gold Inc., Petroleum Geo-Services ASA, Mitchell Energy
& Development Corp. and Casmyn Corp.
The problems facing the economies of Asia have created uncertainty in the
outlook for natural resource stocks. Commodity prices continue to decline, and
resource-related companies are experiencing earnings estimate reductions and a
contraction of price/ earnings and price/cash flow multiples. The Trust had been
constructed with leverage to continued global expansion. Looking ahead, we plan
to take a number of steps to position the Trust toward the value end of the
spectrum. The Trust's investments will be reviewed to ascertain that all
holdings are inexpensive in terms of absolute and relative valuations of
price/earnings, price/book and price/cash flow multiples. The review also will
include financial structures and cash operating costs of each enterprise to
assure ongoing operations in worst-case economic conditions. Exposure to
commodities with rising capacity utilization trends, a key driver of natural
resource stocks, will be emphasized in portfolio construction. Commodities in
supply/demand balance are likely to appreciate in economic expansions, while
mitigating downside price risk in economic contractions.
We plan to create a more focused portfolio by reducing the number of stock
positions from last year's peak of 113 holdings. We expect to increase
concentration in the companies in which we have a high degree of confidence
concerning company fundamentals and where valuations appear attractive given
uncertain economic conditions. In addition, geographic representation of Trust
positions will be examined to seek to enhance exposure to markets perceived to
have sound economic growth outlooks, as well as to diversify currency risks to
the Trust.
2
<PAGE>
Merrill Lynch Global Resources Trust January 31, 1998
The collapse of currencies and stock markets in the Far East will dramatically
reduce natural resource use in those countries. The duration of the downturn, as
well as its potential spread to North American and European markets, could
exacerbate declines in production and prices for a broad spectrum of
commodities. However, the recent declines in natural resource equities have been
indiscriminate. Opportunities exist in many of the commodity companies that are
users of feedstocks with declining costs, as well as in energy commodities where
positive trends have been masked by mild weather conditions. Investments in
companies whose operations can exploit lower input costs, or whose share prices
discount the economic turmoil, could provide satisfactory returns relative to
the major stock market indexes in the coming year. We believe the portfolio
changes outlined above are likely to position the Trust to provide more
favorable returns.
In Conclusion
We appreciate your investment in Merrill Lynch Global Resources Trust, and we
look forward to sharing our investment outlook and strategies with you in our
upcoming quarterly report to shareholders.
Sincerely,
/s/ Arthur Zeikel
Arthur Zeikel
President
/s/ Robert M. Shearer
Robert M. Shearer
Vice President and Portfolio Manager
March 10, 1998
- --------------------------------------------------------------------------------
We are pleased to announce that effective December 10, 1997 Robert M. Shearer
has been appointed Vice President and Portfolio Manager, and is responsible for
the day-to-day management of Merrill Lynch Global Resources Trust. Mr. Shearer
has been employed by Merrill Lynch Asset Management, L.P. since 1997 as
Associate Portfolio Manager of the Trust. Prior thereto, he was vice president
and assistant portfolio manager at David L. Babson and Company, Inc. from 1996
to 1997, and was vice president/sector manager at Concert Capital Management
from 1993 to 1996.
- --------------------------------------------------------------------------------
PERFORMANCE DATA
About Fund Performance
Investors are able to purchase shares of the Trust through the Merrill
Lynch Select PricingSM System, which offers four pricing alternatives:
o 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.
o Class B Shares are subject to a maximum contingent deferred sales charge
of 4% if redeemed during the first year, decreasing 1% each year
thereafter to 0% after the fourth year. In addition, Class B Shares are
subject to a distribution fee of 0.75% and an account maintenance fee of
0.25%. These shares automatically convert to Class D Shares after
approximately 8 years. (There is no initial sales charge for automatic
share conversions.)
o 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.
o Class D Shares incur a maximum initial sales charge of 5.25% and an
account maintenance fee of 0.25% (but no distribution fee).
None of the past results shown should be considered a representation of
future performance. Figures shown in the "Average Annual Total Return"
tables assume reinvestment of all dividends and capital gains
distributions at net asset value on the ex-dividend date. Investment
return and principal value of shares will fluctuate so that shares, when
redeemed, may be worth more or less than their original cost. Dividends
paid to each class of shares will vary because of the different levels of
account maintenance, distribution and transfer agency fees applicable to
each class, which are deducted from the income available to be paid to
shareholders.
3
<PAGE>
Merrill Lynch Global Resources Trust January 31, 1998
PERFORMANCE DATA (concluded)
- --------------------------------------------------------------------------------
Average Annual Total Return
- --------------------------------------------------------------------------------
% Return Without % Return With
Sales Charge Sales Charge**
================================================================================
Class A Shares*
================================================================================
Year Ended 12/31/97 -11.90% -16.52%
- --------------------------------------------------------------------------------
Five Years Ended 12/31/97 + 6.05 + 4.91
- --------------------------------------------------------------------------------
Inception (10/24/88)
through 12/31/97 + 5.60 + 4.98
- --------------------------------------------------------------------------------
* Maximum sales charge is 5.25%.
** Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
================================================================================
Class B Shares*
================================================================================
Year Ended 12/31/97 +-12.82% -15.87%
- --------------------------------------------------------------------------------
Five Years Ended 12/31/97 + 4.95 + 4.95
- --------------------------------------------------------------------------------
Ten Years Ended 12/31/97 + 3.57 + 3.57
- --------------------------------------------------------------------------------
* Maximum contingent deferred sales charge is 4% and is reduced to 0% after
4 years.
** Assuming payment of applicable contingent deferred sales charge.
================================================================================
% Return % Return
Without CDSC With CDSC**
================================================================================
Class C Shares*
- --------------------------------------------------------------------------------
Year Ended 12/31/97 -12.77% -13.53%
- --------------------------------------------------------------------------------
Inception (10/21/94)
through 12/31/97 + 0.81 + 0.81
- --------------------------------------------------------------------------------
* Maximum contingent deferred sales charge is 1% and is reduced to 0% after
1 year.
** Assuming payment of applicable contingent deferred sales charge.
================================================================================
% Return Without % Return With
Sales Charge Sales Charge**
================================================================================
Class D Shares*
================================================================================
Year Ended 12/31/97 -12.16% -16.77%
- --------------------------------------------------------------------------------
Inception (10/21/94)
through 12/31/97 + 1.62 - 0.08
- --------------------------------------------------------------------------------
* Maximum sales charge is 5.25%.
** Assuming maximum sales charge.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Recent Performance Results*
- -----------------------------------------------------------------------------------------------------------------------
12 Month 3 Month
1/31/98 10/31/97 1/31/97 % Change % Change
=======================================================================================================================
<S> <C> <C> <C> <C> <C>
ML Global Resources Trust Class A Shares $14.37 $16.70 $18.68 -13.99%(1) -11.71%(2)
- -----------------------------------------------------------------------------------------------------------------------
ML Global Resources Trust Class B Shares 14.30 16.65 18.68 -14.39(1) -11.87(2)
- -----------------------------------------------------------------------------------------------------------------------
ML Global Resources Trust Class C Shares 14.16 16.51 18.51 -14.36(1) -11.97(2)
- -----------------------------------------------------------------------------------------------------------------------
ML Global Resources Trust Class D Shares 14.35 16.68 18.64 -13.91(1) -11.72(2)
- -----------------------------------------------------------------------------------------------------------------------
ML Global Resources Trust Class A Shares--Total Return -13.57(3) -11.71(2)
- -----------------------------------------------------------------------------------------------------------------------
ML Global Resources Trust Class B Shares--Total Return -14.39(1) -11.87(2)
- -----------------------------------------------------------------------------------------------------------------------
ML Global Resources Trust Class C Shares--Total Return -14.36(1) -11.97(2)
- -----------------------------------------------------------------------------------------------------------------------
ML Global Resources Trust Class D Shares--Total Return -13.72(4) -11.72(2)
=======================================================================================================================
</TABLE>
* Investment results shown do not reflect sales charges; results shown would
be lower if a sales charge was included.
(1) Percent change includes reinvestment of $1.995 per share capital gains
distributions.
(2) Percent change includes reinvestment of $0.372 per share capital gains
distributions.
(3) Percent change includes reinvestment of $0.097 per share ordinary income
dividends and $1.995 per share capital gains distributions.
(4) Percent change includes reinvestment of $0.045 per share ordinary income
dividends and $1.995 per share capital gains distributions.
4
<PAGE>
Merrill Lynch Global Resources Trust January 31, 1998
SCHEDULE OF INVESTMENTS
<TABLE>
<CAPTION>
Value Percent of
Industries Shares Held Common Stocks Cost (Note 1a) Net Assets
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Aluminum 47,000 +Alumax, Inc. $ 1,623,963 $ 1,636,188 1.2%
15,000 Aluminum Company of America 787,658 1,145,625 0.9
29,000 Pechiney, S.A. (A Shares) 1,154,457 1,137,023 0.8
------------ ------------ -----
3,566,078 3,918,836 2.9
- -------------------------------------------------------------------------------------------------------------------
Chemicals 14,000 Air Products and Chemicals, Inc. 630,826 1,120,875 0.8
26,400 BASF AG 633,146 893,705 0.6
8,000 Dow Chemical Co. 551,274 720,000 0.5
35,200 duPont (E.I.) de Nemours & Co. 1,209,065 1,993,200 1.5
------------ ------------ -----
3,024,311 4,727,780 3.4
- -------------------------------------------------------------------------------------------------------------------
Diamonds 80,000 +Aber Resources Ltd. 1,310,472 848,618 0.6
120,000 +SouthernEra Resources Ltd. 746,222 1,075,828 0.8
------------ ------------ -----
2,056,694 1,924,446 1.4
- -------------------------------------------------------------------------------------------------------------------
Diversified Companies 102,000 Asahi Glass Co., Ltd. 1,223,974 586,466 0.4
27,000 Ashland Inc. 1,144,672 1,424,250 1.0
26,500 Coastal Corp. 674,667 1,537,000 1.1
46,600 Norcen Energy Resources Ltd. 300,148 623,481 0.5
378,000 North Ltd. 1,419,525 1,076,913 0.8
273,000 RGC Ltd. 1,101,113 464,788 0.4
------------ ------------ -----
5,864,099 5,712,898 4.2
- -------------------------------------------------------------------------------------------------------------------
Gold 1,004,000 +Acacia Resources Ltd. 1,744,821 1,344,030 1.0
138,600 +Amax Gold, Inc. 799,688 407,138 0.3
94,500 Ashanti Goldfields Co. Ltd. (GDR)** 2,346,106 878,850 0.6
122,500 Cambior Inc. 1,625,848 792,243 0.6
1,063,900 Delta Gold N.L. 1,905,895 1,414,722 1.0
163,200 Driefontein Consolidated Ltd. 2,534,252 1,066,397 0.8
92,000 +Getchell Gold Corp. 3,713,827 2,346,000 1.7
905,000 Great Central Mines N.L. 2,600,570 1,248,157 0.9
373,800 +Miramar Mining Corp. 1,900,432 603,728 0.4
74,222 Newmont Mining Corp. 2,736,348 2,115,327 1.5
920,000 Normandy Mining Ltd. 1,040,108 1,080,002 0.8
211,000 Placer Dome Inc. 4,483,800 2,716,625 2.0
131,500 Prime Resources Group, Inc. 1,286,428 1,016,938 0.7
1,097,000 Resolute Ltd. 2,284,526 1,122,105 0.8
122,000 +Sutton Resources Ltd. 1,097,904 910,074 0.7
158,000 +TVX Gold Inc. 1,272,815 483,875 0.4
------------ ------------ -----
33,373,368 19,546,211 14.2
- -------------------------------------------------------------------------------------------------------------------
Integrated Oil 39,000 Amerada Hess Corp. 2,102,507 2,132,813 1.5
Companies--Domestic 20,000 Amoco Corp. 1,118,700 1,627,500 1.2
------------ ------------ -----
3,221,207 3,760,313 2.7
- -------------------------------------------------------------------------------------------------------------------
Integrated Oil 384,000 British Petroleum Co., PLC 1,554,500 5,189,696 3.8
Companies--International 61,300 Ente Nazionale Idrocarburi S.p.A (ENI) (ADR)*2,865,775 3,593,713 2.6
8,800 OMV AG 933,582 1,163,348 0.9
149,800 Petro-Canada 1,635,043 2,649,587 1.9
43,100 Societe Nationale Elf Aquitaine (ADR)* 1,586,637 2,437,844 1.8
37,000 Total, S.A. (Class B) 2,275,324 3,848,386 2.8
47,000 Yacimientos Petroliferos Fiscales S.A.
(YPF) (ADR)* 1,152,205 1,430,562 1.0
------------ ------------ -----
12,003,066 20,313,136 14.8
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
5
<PAGE>
Merrill Lynch Global Resources Trust January 31, 1998
SCHEDULE OF INVESTMENTS (continued)
<TABLE>
<CAPTION>
Value Percent of
Industries Shares Held Common Stocks Cost (Note 1a) Net Assets
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Metals & Mining 31,100 ASARCO Inc. $ 923,026 $ 691,975 0.5%
1,558,000 +Centaur Mining & Exploration Ltd. 2,347,920 802,175 0.6
82,100 Falconbridge Ltd. 1,822,697 1,123,734 0.8
23,800 Inco Ltd. 779,682 422,450 0.3
316,800 Industrias Penoles, S.A. de C.V. 1,391,890 1,191,513 0.9
1,235,000 M.I.M. Holdings Ltd. 2,706,761 771,523 0.6
227,829 Minsur S.A. 597,621 354,492 0.3
196,000 Mitsubishi Materials Corp. 973,251 401,924 0.3
73,400 Noranda Inc. 1,355,782 1,346,236 1.0
79,300 Outokumpu OYJ 1,460,162 934,726 0.7
53,100 P.T. Tambag Timah (GDR)** (b) 661,263 467,280 0.3
14,300 Phelps Dodge Corp. 834,065 942,012 0.7
615,000 QNI Ltd. 1,099,212 405,310 0.3
32,000 Rio Algom Ltd. 619,108 585,820 0.4
186,100 Rio Tinto PLC (The) 2,441,443 2,378,255 1.7
1,717,000 Savage Resources Ltd. 1,306,929 884,040 0.6
222,000 Savage Resources Ltd. (Warrants) (a) 29,591 6,096 0.0
110,000 Sumitomo Metal Mining Co. Ltd. 917,508 428,583 0.3
62,000 Trelleborg `B' Fria 842,932 741,682 0.5
643,400 WMC Ltd. 3,807,237 2,275,608 1.7
------------ ------------ -----
26,918,080 17,155,434 12.5
- -------------------------------------------------------------------------------------------------------------------
Oil & Gas Producers 41,000 Apache Corp. 1,085,270 1,358,125 1.0
63,600 +Baytex Energy Ltd. (Class A) 896,611 659,417 0.5
71,000 +Benton Oil & Gas Co. 1,082,750 878,625 0.6
21,197 Burlington Resources, Inc. 526,291 906,172 0.7
105,000 +Chauvco Resources, Ltd. 47,607 38,085 0.0
54,900 +Chieftain International Inc. 1,232,560 1,101,431 0.8
183,200 +EEX Corporation 1,779,675 1,545,750 1.1
180,400 Enterprise Oil PLC 1,216,220 1,689,259 1.2
264,400 +Gulf Canada Resources Ltd. 2,038,076 1,421,150 1.0
33,000 +Houston Exploration Co. (The) 755,287 536,250 0.4
124,500 +Northrock Resources Ltd. 1,001,587 1,780,762 1.3
78,500 +Oryx Energy Co. 1,315,405 1,884,000 1.4
41,000 Pancanadian Petroleum Ltd. 777,815 650,972 0.5
51,851 Pioneer Natural Resources Co. 1,393,496 1,124,519 0.8
226,000 Ranger Oil Ltd. 1,519,137 1,341,875 1.0
39,300 Sonat, Inc. 1,656,830 1,716,919 1.3
------------ ------------ -----
18,324,617 18,633,311 13.6
- -------------------------------------------------------------------------------------------------------------------
Oil Services 49,200 Coflexip Stena Offshore, Inc. (ADR)* 1,040,458 2,337,000 1.7
42,000 McDermott International, Inc. 1,586,597 1,338,750 1.0
19,000 Schlumberger Ltd. 543,907 1,400,062 1.0
28,000 +Stolt Comex Seaway, S.A. 847,000 602,000 0.4
70,300 +TransCoastal Marine Services, Inc. 1,289,935 799,662 0.6
46,800 Transocean Offshore Inc. 1,458,113 1,860,300 1.4
------------ ------------ -----
6,766,010 8,337,774 6.1
- -------------------------------------------------------------------------------------------------------------------
Paper & Pulp 45,666 Aracruz Celulose S.A. (ADR)* 365,755 639,324 0.5
171,200 Avenor Inc. 3,259,604 2,741,637 2.0
23,000 Champion International Corp. 1,196,585 1,177,312 0.9
15,900 Georgia-Pacific Corp. 689,297 876,487 0.6
15,900 +Georgia-Pacific Corp. (Timber Group) 287,207 369,675 0.3
24,400 International Paper Co. 929,082 1,114,775 0.8
</TABLE>
6
<PAGE>
Merrill Lynch Global Resources Trust January 31, 1998
SCHEDULE OF INVESTMENTS (concluded)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Value Percent of
Industries Shares Held Common Stocks Cost (Note 1a) Net Assets
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Paper & Pulp 126,300 Metsa Serla OY `B' $ 1,028,189 $ 946,127 0.7%
(concluded) 37,500 Mo Och Domsjo AB Co. 923,972 978,128 0.7
261,496 Slocan Forest Products Ltd. 2,342,662 1,386,938 1.0
63,500 +Stone Container Corp. 785,423 809,625 0.6
48,000 Weyerhaeuser Co. 2,029,450 2,391,000 1.7
43,000 Willamette Industries, Inc. 807,032 1,440,500 1.0
------------ ------------ -----
14,644,258 14,871,528 10.8
- -------------------------------------------------------------------------------------------------------------------
Petroleum Refining 57,000 Sun Company, Inc. 1,557,896 2,208,750 1.6
29,300 Ultramar Diamond Shamrock Corp. 698,163 976,056 0.7
------------ ------------ -----
2,256,059 3,184,806 2.3
- -------------------------------------------------------------------------------------------------------------------
Plantations 717,000 Golden Hope Plantations BHD 1,325,785 765,761 0.6
578,000 Kuala Lumpur Kepong BHD 790,865 1,231,849 0.9
------------ ------------ -----
2,116,650 1,997,610 1.5
- -------------------------------------------------------------------------------------------------------------------
Steel 566,000 British Steel PLC 1,492,794 1,220,943 0.9
20,200 Koninklijke Nederlandsche Hoogovens en
Staalfabrienken N.V. 888,472 869,144 0.6
671,000 Nippon Steel Corp. 2,290,933 1,053,151 0.8
783,000 Sumitomo Metal Industries, Ltd. 2,439,292 1,247,464 0.9
------------ ------------ -----
7,111,491 4,390,702 3.2
- -------------------------------------------------------------------------------------------------------------------
Wood Products 61,500 Louisiana-Pacific Corp. 1,956,796 1,233,844 0.9
146,100 Riverside Forest Products Ltd. 2,401,223 1,099,849 0.8
------------ ------------ -----
4,358,019 2,333,693 1.7
- -------------------------------------------------------------------------------------------------------------------
Total Common Stocks 145,604,007 130,808,478 95.3
- -------------------------------------------------------------------------------------------------------------------
Face
Amount Short-Term Securities
- -------------------------------------------------------------------------------------------------------------------
Repurchase $ 4,268,000 UBS Securities, purchased on 1/30/98 to
Agreements*** yield 5.59% to 2/02/98 4,268,000 4,268,000 3.1
- -------------------------------------------------------------------------------------------------------------------
Total Short-Term Securities 4,268,000 4,268,000 3.1
Total Investments $149,872,007 135,076,478 98.4
============
Other Assets Less Liabilities 2,148,560 1.6
------------ -----
Net Assets $137,225,038 100.0%
============ =====
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
* American Depositary Receipts (ADR).
** Global Depositary Receipts (GDR).
*** Repurchase Agreements are fully collateralized by US Government & Agency
Obligations.
+ Non-income producing security.
(a) Warrants entitle the Trust 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.
(b) The security may be offered and sold to "qualified institutional buyers"
under Rule 144A of the Securities Act of 1933.
See Notes to Financial Statements.
7
<PAGE>
Merrill Lynch Global Resources Trust January 31, 1998
FINANCIAL INFORMATION
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
Statement of Assets and Liabilities as of January 31, 1998
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets: Investments, at value (identified cost--$149,872,007) (Note 1a) $135,076,478
Cash ................................................................... 609,089
Receivables:
Securities sold ..................................................... $2,164,033
Dividends ........................................................... 157,146
Beneficial interest sold ............................................ 8,037 2,329,216
---------
Prepaid registration fees and other assets (Note lg) ................... 32,836
------------
Total assets ........................................................... 138,047,619
------------
- ---------------------------------------------------------------------------------------------------------------------------
Liabilities: Payables:
Beneficial interest redeemed ........................................ 436,374
Investment adviser (Note 2) ......................................... 66,394
Distributor (Note 2) ................................................ 54,727 557,495
---------
Accrued expenses and other liabilities ................................. 265,086
------------
Total liabilities ...................................................... 822,581
------------
- ---------------------------------------------------------------------------------------------------------------------------
Net Assets: Net assets ............................................................. $137,225,038
------------
- ---------------------------------------------------------------------------------------------------------------------------
Net Assets Class A Shares of beneficial interest, $0.10 par value, unlimited number
Consist of: of shares authorized $ 82,522
Class B Shares of beneficial interest, $0.10 par value, unlimited number
of shares authorized ................................................... 323,934
Class C Shares of beneficial interest, $0.10 par value, unlimited number
of shares authorized ................................................... 13,010
Class D Shares of beneficial interest, $0.10 par value, unlimited number
of shares authorized ................................................... 538,199
Paid-in capital in excess of par ....................................... 154,415,865
Accumulated investment loss--net ....................................... (202,709)
Accumulated realized capital losses on investments and foreign
currency transactions--net ............................................. (3,144,808)
Unrealized depreciation on investments and foreigncurrency
transactions--net ...................................................... (14,800,975)
-------------
Net assets ............................................................. $137,225,038
============
- ---------------------------------------------------------------------------------------------------------------------------
Net Asset Value: Class A--Based on net assets of $11,862,101 and 825,222 shares
of beneficial interest outstanding ............................ $ 14.37
============
Class B--Based on net assets of $46,309,068 and 3,239,339 shares
of beneficial interest outstanding ............................ $ 14.30
============
Class C--Based on net assets of $1,842,886 and 130,102 shares
of beneficial interest outstanding ............................ $ 14.16
============
Class D--Based on net assets of $77,210,983 and 5,381,985 shares
of beneficial interest outstanding ............................ $ 14.35
============
- ---------------------------------------------------------------------------------------------------------------------------
See Notes to Financial Statements.
</TABLE>
8
<PAGE>
Merrill Lynch Global Resources Trust January 31, 1998
FINANCIAL INFORMATION (continued)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
Statement of Operations for the Six Months Ended January 31, 1998
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Investment Dividends (net of $49,713 foreign withholding tax) ...... $ 1,106,792
Income Interest and discount earned ............................ 100,971
(Notes 1e & 1f): Other income ............................................ 3,348
------------
Total income ............................................ 1,211,111
------------
- -----------------------------------------------------------------------------------------------------------------
Expenses: Investment advisory fees (Note 2) ....................... $ 519,313
Account maintenance & distribution fees--Class B (Note 2) 313,246
Account maintenance fees--Class D (Note 2) .............. 116,029
Transfer agent fees--Class D (Note 2) ................... 94,348
Transfer agent fees--Class B (Note 2) ................... 75,085
Custodian fees .......................................... 58,852
Printing and shareholder reports ........................ 58,757
Registration fees (Note 1g) ............................. 39,058
Accounting services (Note 2) ............................ 35,342
Professional fees ....................................... 33,795
Trustees' fees and expenses ............................. 21,333
Transfer agent fees--Class A (Note 2) ................... 15,504
Account maintenance & distribution fees--Class C (Note 2) 11,591
Pricing fees ............................................ 3,680
Transfer agent fees--Class C (Note 2) ................... 2,937
Other ................................................... 5,612
------------
Total expenses .......................................... 1,404,482
------------
Investment loss--net .................................... (193,371)
------------
- -----------------------------------------------------------------------------------------------------------------
Realized & Realized gain (loss) from:
Unrealized Gain Investments--net ..................................... 603,203
(Loss) on Foreign currency transactions--net ................... (27,941) 575,262
Investments & ------------
Foreign Currency Change in unrealized appreciation/depreciation on:
Transactions--Net Investments--net ..................................... (36,122,624)
(Notes 1c, 1d, Foreign currency transactions--net ................... 2,070 (36,120,554)
1f & 3): ------------ -----------
Net realized and unrealized loss on investments and
foreign currency transactions ........................... (35,545,292)
------------
Net Decrease in Net Assets Resulting from Operations .... $(35,738,663)
============
- -----------------------------------------------------------------------------------------------------------------
See Notes to Financial Statements.
</TABLE>
9
<PAGE>
Merrill Lynch Global Resources Trust January 31, 1998
FINANCIAL INFORMATION (continued)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Statements of Changes in Net Assets
- -------------------------------------------------------------------------------------------------------------------------
For the Six For the
Months Ended Year Ended
January 31, July 31,
Increase (Decrease) in Net Assets: 1998 1997
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Operations: Investment income (loss) .......................................... $ (193,371) $ 465,718
Realized gain on investments and foreign currency transactions--net 575,262 21,291,983
Change in unrealized appreciation/depreciation on investments
and foreign currency transactions--net ............................ (36,120,554) 13,758,830
------------- -------------
Net increase (decrease) in net assets resulting from operations ... (35,738,663) 35,516,531
------------- -------------
- -------------------------------------------------------------------------------------------------------------------------
Dividends & Investment income--net:
Distributions to Class A ........................................................ (89,266) (303,399)
Shareholders Class B ........................................................ -- (98,601)
(Note 1h): Class C ........................................................ -- (17,412)
Class D ........................................................ (239,469) (1,171,993)
Realized gain on investments--net:
Class A ........................................................ (1,824,936) (245,005)
Class B ........................................................ (7,476,479) (956,214)
Class C ........................................................ (263,429) (40,585)
Class D ........................................................ (10,705,150) (1,157,650)
------------- -------------
Net decrease in net assets resulting from dividends and
distributions to shareholders ..................................... (20,598,729) (3,990,859)
------------- -------------
- -------------------------------------------------------------------------------------------------------------------------
Beneficial Interest Net decrease in net assets derived from beneficial
Transactions interest transact ................................................. (12,410,296) (54,789,794)
(Note 4): ------------- -------------
- -------------------------------------------------------------------------------------------------------------------------
Net Assets: Total decrease in net assets ...................................... (68,747,688) (23,264,122)
Beginning of period ............................................... 205,972,726 229,236,848
------------- -------------
End of period* .................................................... $ 137,225,038 $ 205,972,726
------------- -------------
- -------------------------------------------------------------------------------------------------------------------------
* Undistributed (accumulated) investment income (loss)--net ......... $ (202,709) $ 319,397
------------- -------------
- -------------------------------------------------------------------------------------------------------------------------
See Notes to Financial Statements.
</TABLE>
10
<PAGE>
Merrill Lynch Global Resources Trust January 31, 1998
FINANCIAL INFORMATION (continued)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
Financial Highlights
- ---------------------------------------------------------------------------------------------------------------------------
Class A
------------------------------------------------------------
For the
Six Months
The following per share data and ratios have been derived Ended For the Year Ended July 31,
from information provided in the financial statements. January 31, ------------------------------------------
Increase (Decrease) in Net Asset Value: 1998+ 1997+ 1996+ 1995 1994
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period ....... $ 19.90 $ 17.27 $ 16.70 $ 15.84 $ 14.07
Operating -------- -------- -------- -------- --------
Performance: Investment income--net ..................... .03 .14 .22 .22 .22
Realized and unrealized gain (loss) on
investments and foreign currency
transactions--net .......................... (3.46) 2.91 .50 .88 1.69
-------- -------- -------- -------- --------
Total from investment operations ........... (3.43) 3.05 .72 1.10 1.91
-------- -------- -------- -------- --------
Less dividends and distributions:
Investment income--net .................. (.10) (.23) (.15) (.24) (.14)
Realized gain on investments--net ....... (2.00) (.19) -- -- --
-------- -------- -------- -------- --------
Total dividends and distributions .......... (2.10) (.42) (.15) (.24) (.14)
-------- -------- -------- -------- --------
Net asset value, end of period ............. $ 14.37 $ 19.90 $ 17.27 $ 16.70 $ 15.84
======== ======== ======== ======== ========
- ---------------------------------------------------------------------------------------------------------------------------
Total Investment Based on net asset value per share ......... (18.87%)+++ 17.95% 4.34% 7.05% 13.69%
Return:** ======== ======== ======== ======== ========
- ---------------------------------------------------------------------------------------------------------------------------
Ratios to Average Expenses ................................... 1.10%* 1.01% 1.03% 1.06% .92%
Net Assets: ======== ======== ======== ======== ========
Investment income--net ..................... .31%* .76% 1.26% 1.34% 1.39%
======== ======== ======== ======== ========
- ---------------------------------------------------------------------------------------------------------------------------
Supplemental Net assets, end of period (in thousands) ... $ 11,862 $ 18,504 $ 22,726 $ 28,729 $ 20,054
Data: ======== ======== ======== ======== ========
Portfolio turnover ......................... 6.11% 24.23% 26.48% 31.64% 54.87%
======== ======== ======== ======== ========
Average commission rate paid++ ............. $ .0243 $ .0217 $ .0223 -- --
======== ======== ======== ======== ========
- ---------------------------------------------------------------------------------------------------------------------------
* Annualized.
** Total investment returns exclude the effects of sales
loads.
+ Based on average shares outstanding.
++ For fiscal years beginning on or after September 1,
1995, the Trust is required to disclose its average
commission rate per share for purchases and sales of equity
securities. The "Average Commission Rate Paid" includes
commissions paid in foreign currencies, which have been
converted into US dollars using the prevailing exchange
rate on the date of the transaction. Such conversions may
significantly affect the rate shown.
+++ Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
11
<PAGE>
Merrill Lynch Global Resources Trust January 31, 1998
FINANCIAL INFORMATION (continued)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
Financial Highlights (continued)
- -----------------------------------------------------------------------------------------------------------------------------
For the Class B
Six Months ------------------------------------------
The following per share data and ratios have been derived Ended
from information provided in the financial statements. January 31, For the Year Ended July 31,
Increase (Decrease) in Net Asset Value: ------------------------------------------
1998++ 1997++ 1996++ 1995 1994
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period ..... $ 19.80 $ 17.16 $ 16.62 $ 15.72 $ 14.02
Operating -------- -------- -------- -------- --------
Performance: Investment income (loss)--net ............ (.06) (.05) .03 .10 .05
Realized and unrealized gain (loss) on
investments and foreign currency
transactions--net ........................ (3.44) 2.90 .51 .84 1.70
-------- -------- -------- -------- --------
Total from investment operations ......... (3.50) 2.85 .54 .94 1.75
-------- -------- -------- -------- --------
Less dividends and distributions:
Investment income--net ............... -- (.02) --+ (.04) (.05)
Realized gain on investments--net .... (2.00) (.19) -- -- --
-------- -------- -------- -------- --------
Total dividends and distributions ....... (2.00) (.21) -- (.04) (.05)
-------- -------- -------- -------- --------
Net asset value, end of period .......... $ 14.30 $ 19.80 $ 17.16 $ 16.62 $ 15.72
======== ======== ======== ======== ========
- -----------------------------------------------------------------------------------------------------------------------------
Total Investment Based on net asset value per share ...... (19.23%)++++ 16.72% 3.26% 5.95% 12.52%
Return:** ======== ======== ======== ======== ========
- -----------------------------------------------------------------------------------------------------------------------------
Ratios to Average Expenses ................................ 2.13%* 2.04% 2.07% 2.08% 1.95%
Net Assets: ======== ======== ======== ======== ========
Investment income (loss)--net ........... (.73%)* (.29%) .20% .31% .35%
======== ======== ======== ======== ========
- -----------------------------------------------------------------------------------------------------------------------------
Supplemental Net assets, end of period (in thousands) $ 46,309 $ 77,386 $ 94,199 $141,800 $236,581
Data: ======== ======== ======== ======== ========
Portfolio turnover ...................... 6.11% 24.23% 26.48% 31.64% 54.87%
======== ======== ======== ======== ========
Average commission rate paid+++ ......... $ .0243 $ .0217 $ .0223 -- --
======== ======== ======== ======== ========
- -----------------------------------------------------------------------------------------------------------------------------
* Annualized.
** Total investment returns exclude the effects of sales
loads.
+ Amount is less than $.01 per share.
++ Based on average shares outstanding.
+++ For fiscal years beginning on or after September 1,
1995, the Trust is required to disclose its average
commission rate per share for purchases and sales of equity
securities. The "Average Commission Rate Paid" includes
commissions paid in foreign currencies, which have been
converted into US dollars using the prevailing exchange
rate on the date of the transaction. Such conversions may
significantly affect the rate shown.
++++ Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
12
<PAGE>
Merrill Lynch Global Resources Trust January 31, 1998
FINANCIAL INFORMATION (continued)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Financial Highlights (continued)
- -------------------------------------------------------------------------------------------------------------------
Class C
----------------------------------------------
For the
The following per share data and ratios have been derived For the Period
from information provided in the financial statements. Six Months For the Year Oct. 21,
Ended Ended July 31, 1994+ to
Increase (Decrease) in Net Asset Value: January 31, -------------------- July 31,
1998++ 1997++ 1996++ 1995
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 19.64 $ 17.08 $ 16.55 $ 15.93
Operating --------- --------- -------- -------
Performance: Investment income(loss)--net (.06) (.06) .04 .05
Realized and unrealized gain (loss) on
investments and foreign currency
transactions--net (3.42) 2.90 .49 .62
--------- --------- -------- -------
Total from investment operations (3.48) 2.84 .53 .67
--------- --------- -------- -------
Less dividends and distributions:
Investment income--net -- (.09) -- (.05)
Realized gain on investments--net (2.00) (.19) -- --
--------- --------- -------- -------
Total dividends and distributions (2.00) (.28) -- (.05)
--------- --------- -------- -------
Net asset value, end of period $ 14.16 $ 19.64 $ 17.08 $ 16.55
========= ========= ======== =======
- -------------------------------------------------------------------------------------------------------------------
Total Investment Based on net asset value per share (19.29%)++++ 16.77% 3.20% 4.26%++++
Return:** ========= ========= ======== =======
- -------------------------------------------------------------------------------------------------------------------
Ratios to Average Expenses 2.15%* 2.06% 2.07% 2.20%*
Net Assets: ========= ========= ======== =======
Investment income (loss)--net (.76%)* (.33%) .27% .28%*
========= ========= ======== =======
- -------------------------------------------------------------------------------------------------------------------
Supplemental Net assets, end of period (in thousands) $ 1,843 $ 2,680 $ 3,388 $ 2,800
Data: ========= ========= ======== =======
Portfolio turnover 6.11% 24.23% 26.48% 31.64%
========= ========= ======== =======
Average commission rate paid+++ $ .0243 $ .0217 $ .0223 --
========= ========= ======== =======
- -------------------------------------------------------------------------------------------------------------------
* Annualized.
** Total investment returns exclude the effects of sales
loads.
+ Commencement of operations.
++ Based on average shares outstanding.
+++ For fiscal years beginning on or after September 1,
1995, the Trust is required to disclose its average
commission rate per share for purchases and sales of equity
securities. The "Average Commission Rate Paid" includes
commissions paid in foreign currencies, which have been
converted into US dollars using the prevailing exchange
rate on the date of the transaction. Such conversions may
significantly affect the rate shown.
++++ Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
13
<PAGE>
Merrill Lynch Global Resources Trust January 31, 1998
FINANCIAL INFORMATION (concluded)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
Financial Highlights (concluded)
- ------------------------------------------------------------------------------------------------------------------------
Class D
---------------------------------------------------
For the
The following per share data and ratios have been derived For the Period
from information provided in the financial statements. Six Months For the Year Oct. 21,
Ended Ended July 31, 1994+ to
January 31, ------------------ July 31,
Increase (Decrease) in Net Asset Value: 1998++ 1997++ 1996++ 1995
- ------------------------------------------------------------------------------------ ----------------------------------
<S> <C> <C> <C> <C>
Per Share Net asset value, beginning of period ... $ 19.83 $ 17.21 $ 16.67 $ 15.96
Operating -------- --------- --------- ---------
Performance: Investment income--net ................. --# .09 .17 .12
Realized and unrealized gain (loss) on
investments and foreign
currency transactions--net ................ (3.44) 2.91 .50 .66
-------- --------- --------- ---------
Total from investment operations .......... (3.44) 3.00 .67 .78
Less dividends and distributions: -------- --------- --------- ---------
Investment income--net ................. (.04) (.19) (.13) (.07)
Realized gain on investments--net ...... (2.00) (.19) -- --
Total dividends and distributions ......... (2.04) (.38) (.13) (.07)
-------- --------- --------- ---------
Net asset value, end of period ............ $ 14.35 $ 19.83 $ 17.21 $ 16.67
-------- --------- --------- ---------
- ------------------------------------------------------------------------------------------------------------------------
Total Investment Based on net asset value per share ........ (18.89%)++++ 17.66% 4.06% 4.93%++++
Return:** -------- --------- --------- ---------
- ------------------------------------------------------------------------------------------------------------------------
Ratios to Average Expenses .................................. 1.35%* 1.26% 1.27% 1.39%*
Net Assets: -------- --------- --------- ---------
Investment income--net .................... .04%* .51% 1.00% 1.02%*
-------- --------- --------- ---------
- ------------------------------------------------------------------------------------------------------------------------
Supplemental Net assets, end of period (in thousands) .. $ 77,211 $ 107,403 $ 108,924 $ 107,467
Data: -------- --------- --------- ---------
Portfolio turnover ........................ 6.11% 24.23% 26.48% 31.64%
-------- --------- --------- ---------
Average commission rate paid+++ ........... $ .0243 $ .0217 $ .0223 --
-------- --------- --------- ---------
- ------------------------------------------------------------------------------------------------------------------------
* Annualized.
** Total investment returns exclude the effects of sales
loads.
+ Commencement of operations.
++ Based on average shares outstanding.
+++ For fiscal years beginning on or after September 1,
1995, the Trust is required to disclose its average
commission rate per share for purchases and sales of equity
securities. The "Average Commission Rate Paid" includes
commissions paid in foreign currencies, which have been
converted into US dollars using the prevailing exchange
rate on the date of the transaction. Such conversions may
significantly affect the rate shown.
++ Aggregate total investment return.
++++ Amount is less than $.01 per share.
See Notes to Financial Statements.
</TABLE>
14
<PAGE>
Merrill Lynch Global Resources Trust Janaury 31, 1998
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
Merrill Lynch Global Resources Trust (the "Trust") is registered under the
Investment Company Act of 1940 as a non-diversified, open-end management
investment company. These unaudited financial statements reflect all adjustments
which are, in the opinion of management, necessary to a fair statement of the
results for the interim period presented. All such adjustments are of a normal
recurring nature. The Trust offers four classes of shares under the Merrill
Lynch Select PricingSM System. Shares of Class A and Class D are sold with a
front-end sales charge. Shares of Class B and Class C may be subject to a
contingent deferred sales charge. All classes of shares have identical voting,
dividend, liquidation and other rights and the same terms and conditions, except
that Class B, Class C and Class D Shares bear certain expenses related to the
account maintenance of such shares, and Class B and Class C Shares also bear
certain expenses related to the distribution of such shares. Each class has
exclusive voting rights with respect to matters relating to its account
maintenance and distribution expenditures. The following is a summary of
significant accounting policies followed by the Trust.
(a) Valuation of investments--Portfolio securities which are traded on stock
exchanges are valued at the last sale price on the exchange on which such
securities are traded, as of the close of business on the day the securities are
being valued or, lacking any sales, at the last available bid price. Securities
traded in the over-the-counter market are valued at the last available bid price
prior to the time of valuation. In cases where securities are traded on more
than one exchange, the securities are valued on the exchange designated by or
under the authority of the Trustees of the Trust as the primary market.
Securities which are traded both in the over-the-counter market and on a stock
exchange are valued according to the broadest and most representative market.
Options written are valued at the last sale price in the case of exchange-traded
options or, in the case of options traded in the over-the-counter market, the
last asked price. Options purchased are valued at the last sale price in the
case of exchange-traded options or, in the case of options traded in the
over-the-counter market, the last bid price. Short-term securities are valued at
amortized cost, which approximates market value. Other investments are stated at
market value. Securities and other assets for which market value quotations are
not available are valued at their fair value as determined in good faith by or
under the direction of the Trustees of the Trust.
(b) Repurchase agreements--The Trust invests in US Government securities
pursuant to repurchase agreements with a member bank of the Federal Reserve
System or a primary dealer in US Government securities. Under such agreements,
the bank or primary dealer agrees to repurchase the security at a mutually
agreed upon time and price. The Trust takes possession of the underlying
securities, marks to market such securities and, if necessary, receives
additional securities daily to ensure that the contract is fully collateralized.
(c) Derivative financial instruments--The Trust may engage in various portfolio
strategies to seek to increase its return by hedging its portfolio against
adverse movements in the equity, debt and currency markets. Losses may arise due
to changes in the value of the contract or if the counterparty does not perform
under the contract.
o Forward foreign exchange contracts--The Trust is authorized to enter into
forward foreign exchange contracts as a hedge against either specific
transactions or portfolio positions. Such contracts are not entered on the
Trust's records. However, the effect on net investment income is recorded from
the date the Trust enters into such contracts. Premium or discount is amortized
over the life of the contracts.
o Options--The Trust can write covered call options and purchase put options.
When the Trust writes an option, an amount equal to the premium received by the
Trust is reflected as an asset and an equivalent liability. The amount of the
liability is subsequently marked to market to reflect the current market value
of the option written. When a security is purchased or sold through an exercise
of an option, the related premium paid (or received) is added to (or deducted
from) the basis of the security acquired or deducted from (or added to) the
proceeds of the security sold. When an option expires (or the Trust enters into
a closing transaction), the Trust 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 premiums paid or
received).
15
<PAGE>
Merrill Lynch Global Resources Trust January 31, 1998
NOTES TO FINANCIAL STATEMENTS (continued)
Written and purchased options are non-income producing investments.
(d) Foreign currency transactions--Transactions denominated in foreign
currencies are recorded at the exchange rate prevailing when recognized. Assets
and liabilities denominated in foreign currencies are valued at the exchange
rate at the end of the period. Foreign currency transactions are the result of
settling (realized) or valuing (unrealized) assets or liabilities expressed in
foreign currencies into US dollars. Realized and unrealized gains or losses from
investments include the effects of foreign exchange rates on investments.
(e) Income taxes--It is the Trust'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.
(f) Security transactions and investment income--Security transactions are
recorded on the dates the transactions are entered into (the trade dates).
Dividend income is recorded on the ex-dividend dates. Dividends from foreign
securities where the ex-dividend date may have passed are subsequently recorded
when the Trust has determined the ex-dividend dates. Interest income is
recognized on the accrual basis. Realized gains and losses on security
transactions are determined on the identified cost basis.
(g) Prepaid registration fees--Prepaid registration fees are charged to expense
as the related shares are issued.
(h) Dividends and distributions--Dividends and distributions paid by the Trust
are recorded on the ex-dividend dates.
2. Investment Advisory Agreement and Transactions with Affiliates:
The Trust has entered into an Investment Advisory Agreement with Merrill Lynch
Asset Management, L.P. ("MLAM"). The general partner of MLAM is Princeton
Services, Inc. ("PSI"), an indirect wholly-owned subsidiary of Merrill Lynch &
Co., Inc. ("ML & Co."), which is the limited partner. The Trust has also entered
into a Distribution Agreement and Distribution Plans with Merrill Lynch Funds
Distributor, Inc. ("MLFD" or "Distributor"), a wholly-owned subsidiary of
Merrill Lynch Group, Inc.
MLAM is responsible for the management of the Trust's portfolio and provides the
necessary personnel, facilities, equipment and certain other services necessary
to the operations of the Trust. For such services, the Trust pays a monthly fee
of 0.60%, on an annual basis, of the average daily value of the Trust's net
assets.
Pursuant to the Distribution Plans adopted by the Trust in accordance with Rule
12b-1 under the Investment Company Act of 1940, the Trust pays the Distributor
ongoing account maintenance and distribution fees. The fees are accrued daily
and paid monthly at annual rates based upon the average daily net assets of the
shares as follows:
- --------------------------------------------------------------------------------
Account Distribution
Maintenance Fee Fee
- --------------------------------------------------------------------------------
Class B ..................................... 0.25% 0.75%
Class C ..................................... 0.25% 0.75%
Class D ..................................... 0.25% --
- --------------------------------------------------------------------------------
Pursuant to a sub-agreement with the Distributor, Merrill Lynch, Pierce, Fenner
& Smith Inc. ("MLPF&S"), a subsidiary of ML & Co., also provides account
maintenance and distribution services to the Trust. The ongoing account
maintenance fee compensates the Distributor and MLPF&S for providing account
maintenance services to Class B, Class C and Class D shareholders. The ongoing
distribution fee compensates the Distributor and MLPF&S for providing
shareholder and distribution-related services to Class B and Class C
shareholders.
For the six months ended January 31, 1998, MLFD earned underwriting discounts
and MLPF&S earned dealer concessions on sales of the Trust's Class A and Class D
Shares as follows:
- --------------------------------------------------------------------------------
MLFD MLPF&S
- --------------------------------------------------------------------------------
Class A ........................................ $ 21 $ 230
Class D ........................................ $ 585 $ 7,321
- --------------------------------------------------------------------------------
16
<PAGE>
Merrill Lynch Global Resources Trust January 31, 1998
For the six months ended January 31, 1998, MLPF&S received contingent deferred
sales charges of $79,695 and $207 relating to transactions in Class B and C
Shares, respectively.
In addition, MLPF&S received $11,229 in commissions on the execution of
portfolio security transactions for the Trust for the six months ended January
31, 1998.
Merrill Lynch Financial Data Services, Inc. ("MLFDS"), a wholly-owned subsidiary
of ML & Co., is the Trust's transfer agent.
Accounting services are provided to the Trust by MLAM at cost.
Certain officers and/or trustees of the Trust are officers and/or directors of
MLAM, PSI, MLFDS, MLFD, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities, for the six
months ended January 31, 1998 were $10,310,783 and $45,719,260, respectively.
Net realized and unrealized gains (losses) as of January 31, 1998 were as
follows:
- --------------------------------------------------------------------------------
Realized Unrealized
Gains (Losses) Losses
- --------------------------------------------------------------------------------
Long-term investments .................. $ 603,203 $(14,795,529)
Foreign currency transactions .......... (27,941) (5,446)
---------- ------------
Total .................................. $ 575,262 $(14,800,975)
========== ============
- --------------------------------------------------------------------------------
As of January 31, 1998, net unrealized depreciation for Federal income tax
purposes aggregated $14,795,529, of which $21,126,073 related to appreciated
securities and $35,921,602 related to depreciated securities. At January 31,
1998, the aggregate cost of investments for Federal income tax purposes was
$149,872,007.
4. Beneficial Interest Transactions:
Net decrease in net assets derived from beneficial interest transactions was
$12,410,296 and $54,789,794, for the six months ended January 31, 1998 and for
the year ended July 31, 1997, respectively.
Transactions in shares of beneficial interest for each class were as follows:
- --------------------------------------------------------------------------------
Class A Shares for the Six Months Dollar
Ended January 31, 1998 Shares Amount
- --------------------------------------------------------------------------------
Shares sold ................................ 55,856 $ 906,958
Shares issued to shareholders
in reinvestment of dividends
and distributions .......................... 98,253 1,700,980
-------- -----------
Total issued ............................... 154,109 2,607,938
Shares redeemed ............................ (258,912) (4,270,836)
-------- -----------
Net decrease ............................... (104,803) $(1,662,898)
======== ===========
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class A Shares for the Year Dollar
Ended July 31, 1997 Shares Amount
- --------------------------------------------------------------------------------
Shares sold ............................ 448,154 $ 8,330,555
Shares issued to shareholders
in reinvestment of dividends
and distributions ...................... 27,690 494,192
-------- ------------
Total issued ........................... 475,844 8,824,747
Shares redeemed ........................ (862,003) (15,971,403)
-------- ------------
Net decrease ........................... (386,159) $ (7,146,656)
======== ============
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class B Shares for the Six Months Dollar
Ended January 31, 1998 Shares Amount
- --------------------------------------------------------------------------------
Shares sold .............................. 224,327 $ 3,932,245
Shares issued to shareholders
in reinvestment of distributions ......... 352,334 6,075,936
---------- ------------
Total issued ............................. 576,661 10,008,181
Automatic conversion
of shares ................................ (98,358) (1,557,231)
Shares redeemed .......................... (1,147,637) (18,919,975)
---------- ------------
Net decrease ............................. (669,334) $(10,469,025)
========== ============
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class B Shares for the Year Dollar
Ended July 31, 1997 Shares Amount
- --------------------------------------------------------------------------------
Shares sold ............................ 950,849 $ 17,425,847
Shares issued to shareholders
in reinvestment of dividends
and distributions ...................... 48,665 875,929
---------- ------------
Total issued ........................... 999,514 18,301,776
Automatic conversion
of shares .............................. (207,430) (3,820,920)
Shares redeemed ........................ (2,374,035) (43,883,586)
---------- ------------
Net decrease ........................... (1,581,951) $(29,402,730)
========== ============
- --------------------------------------------------------------------------------
17
<PAGE>
Merrill Lynch Global Resources Trust January 31, 1998
NOTES TO FINANCIAL STATEMENTS (concluded)
- --------------------------------------------------------------------------------
Class C Shares for the Six Months Dollar
Ended January 31, 1998 Shares Amount
- -----------------------------------------------------------------------------
Shares sold ................................ 218,037 $ 3,404,258
Shares issued to shareholders
in reinvestment of distributions ........... 13,740 233,761
-------- -----------
Total issued ............................... 231,777 3,638,019
Shares redeemed ............................ (238,182) (3,727,730)
-------- -----------
Net decrease ............................... (6,405) $ (89,711)
======== ===========
- -----------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class C Shares for the Year Dollar
Ended July 31, 1997 Shares Amount
- --------------------------------------------------------------------------------
Shares sold .............................. 278,052 $ 5,116,267
Shares issued to shareholders
in reinvestment of dividends
and distributions ........................ 2,963 52,754
-------- -----------
Total issued ............................. 281,015 5,169,021
Shares redeemed .......................... (342,861) (6,275,052)
-------- -----------
Net decrease ............................. (61,846) $(1,106,031)
======== ===========
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class D Shares for the Six Months Dollar
Ended January 31, 1998 Shares Amount
- --------------------------------------------------------------------------------
Shares sold .............................. 656,578 $11,828,665
Automatic conversion
of shares ................................ 98,156 1,557,231
Shares issued to shareholders
in reinvestment of dividends
and distributions ........................ 465,362 8,004,915
---------- -----------
Total issued ............................. 1,220,096 21,390,811
Shares redeemed .......................... (1,253,458) (21,579,473)
---------- -----------
Net decrease ............................. (33,362) $ (188,662)
---------- -----------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class D Shares for the Year Dollar
Ended July 31, 1997 Shares Amount
- --------------------------------------------------------------------------------
Shares sold .............................. 515,787 $ 9,511,946
Automatic conversion
of shares ................................ 207,740 3,820,920
Shares issued to shareholders
in reinvestment of dividends
and distributions ........................ 95,865 1,709,679
---------- ------------
Total issued ............................. 819,392 15,042,545
Shares redeemed .......................... (1,731,884) (32,176,922)
---------- ------------
Net decrease ............................. (912,492) $(17,134,377)
========== ============
- --------------------------------------------------------------------------------
PORTFOLIO INFORMATION
For the Quarter Ended January 31, 1998
Percent of
Ten Largest Equity Holdings Net Assets
British Petroleum Co., PLC ................................... 3.8%
Total, S.A. (Class B) ........................................ 2.8
Ente Nazionale Idrocarburi S.p.A
(ENI) (ADR) .................................................. 2.6
Avenor Inc. .................................................. 2.0
Placer Dome Inc. ............................................. 2.0
Petro-Canada ................................................. 1.9
Societe Nationale Elf Aquitaine (ADR) ........................ 1.8
Weyerhaeuser Co. ............................................. 1.7
Rio Tinto PLC (The) .......................................... 1.7
Getchell Gold Corp. .......................................... 1.7
Additions
Georgia-Pacific Corp. (Timber Group)
Pioneer Natural Resources Co.
Stolt Comex Seaway S.A.
Deletions
Casmyn Corp.
Cyprus Amax Minerals Co.
Empresa Nacional de Celulosas S.A. (ENCE)
Fort James Corp.
Freeport-McMoRan Copper & Gold Inc. (Class B)
Greenstone Resources Ltd.
Mitchell Energy & Development Corp. (Class B)
Pasminco Ltd.
Petroleum Geo-Services ASA (ADR)
Smedvig ASA (ADR)
Westmin Resources, Ltd.
William Resources Inc.
18
<PAGE>
Merrill Lynch Global Resources Trust January 31, 1998
OFFICERS AND TRUSTEES
Arthur Zeikel, President and Trustee
Donald Cecil, Trustee
M. Colyer Crum, Trustee
Edward H. Meyer, Trustee
Jack B. Sunderland, Trustee
J. Thomas Touchton, Trustee
Terry K. Glenn, Executive Vice President
Norman R. Harvey, Senior Vice President
Donald C. Burke, Vice President
Robert M. Shearer, Vice President and
Portfolio Manager
Gerald M. Richard, Treasurer
Thomas D. Jones, III, Secretary
Custodian
The Bank of New York
90 Washington Street, 12th Floor
New York, NY 10286
Transfer Agent
Merrill Lynch Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 637-3863
19
<PAGE>
This report is not authorized for use as an offer of sale or a solicitation of
an offer to buy shares of the Trust unless accompanied or preceded by the
Trust's current prospectus. Past performance results shown in this report should
not be considered a representation of future performance. Investment return and
principal value of shares will fluctuate so that shares, when redeemed, may be
worth more or less than their original cost. Statements and other information
herein are as dated and are subject to change.
Merrill Lynch
Global Resources Trust
Box 9011
Princeton, NJ
08543-9011 #10303--1/98
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