MERRILL LYNCH
GLOBAL
RESOURCES
TRUST
[GRAPHIC OMITTED]
STRATEGIC
Performance
Annual Report
July 31, 2000
<PAGE>
MERRILL LYNCH GLOBAL RESOURCES TRUST
DEAR SHAREHOLDER
The Trust enjoyed solid relative and absolute returns during the six-month
period ended July 31, 2000. The Trust's Class A, Class B, Class C and Class D
Shares had total returns of +15.16%, +14.55%, +14.52% and +15.02%, respectively,
which is better than the +3.20% total return of the unmanaged Standard & Poor's
500 (S&P 500) Index and the +12.16% total return of the Lipper Analytical
Services, Inc. Natural Resource Funds Group Average. (Investment results shown
do not reflect sales charges and would be lower if sales charges were included.
Complete performance information can be found on pages 3-5 of this report to
shareholders.) The stock price performance of the Trust's energy holdings,
particularly oil service companies and independent oil and gas producers,
accounted for the Trust's superior returns. We increased our weighting in these
stocks early in the year, after they had declined in the fourth calendar quarter
of 1999 and in January as record warm winter weather lowered demand for natural
gas. This short-term event overshadowed the highly positive supply and demand
fundamentals for North American natural gas markets, which remain intact at the
current time. We have continued to increase the Trust's exposure to the energy
sector given the positive fundamental outlook for energy stocks, and we are
optimistic that additional appreciation potential is possible even if mild
winter weather conditions again return in the upcoming winter heating season.
The supply and demand outlook continues to be positive for energy stocks,
particularly those involved in natural gas production in North America.
Injections into gas storage basins are below the pace of last year as well as
the five-year average. As a result, we are likely to begin the winter heating
season with storage 10% below last year's level and 20% below full storage
capacity. Given the reduced rates of natural gas production that the industry is
reporting through the second quarter, a return to normal winter temperatures
could lead to intermittent price spikes this winter. We also believe that the
Organization of Petroleum Exporting Countries (OPEC) will be successful in
maintaining oil prices at relatively high levels, although below the $30 per
barrel price that currently prevails. World economic growth continues to be
resilient, and excess capacity has been absorbed by all but a few of OPEC's
members. Unlike the supply and demand situation in 1980, there is little excess
capacity in the world that can be called upon should we have another oil supply
disruption. Recently, investors have been concerned about OPEC unity and the
potential that Saudi Arabia may unilaterally increase production. This action
would be consistent with the goals relayed to us by the Saudi Arabian oil
ministry when we visited Riyadh last February. These goals included a price
target for oil in the mid-twenties, but avoiding prices in excess of $30 per
barrel that might stunt demand in the growth markets of Asia.
We reduced our holdings of most other basic materials stocks to provide the
funds for our energy investments. This helped the Trust's performance, as stock
price performance of virtually all commodity groups other than energy have
declined since late 1999. Even large-capitalization major oil companies have
shown anemic performance, as margin compression in refining and petrochemicals
offset the impact of rising oil and gas prices in their upstream operations. The
Trust's emphasis on independent oil and gas production companies, as well as oil
service companies leveraged to natural gas drilling, enabled the Trust to
deliver results better than the Lipper Natural Resource Funds Group Average and
substantially above the unmanaged Morgan Stanley Capital International Natural
Resources Index (for the last three months as well as for the year to date).
Companies delivering strong returns included gas producers EOG Resources, Inc.,
Apache Corporation and Anadarko Petroleum Corporation, as well as Canadian
Hunter Exploration Ltd. that has more than doubled since we purchased the stock.
Stocks in the oil service sector that more than doubled from our cost included
BJ Services Company and Cooper Cameron Corporation, and Canadian drilling
companies Precision Drilling Corporation and Ensign Resource Service Group,
Inc., which had more than 50% total returns on
1
<PAGE>
Merrill Lynch Global Resources Trust July 31, 2000
increased Canadian drilling activity. We continue to believe that natural
gas-related investments offer attractive appreciation potential. Current
valuations are at the low end of historic valuation ranges, and the potential
for high prices to persist in 2001 appears high. Increased demand for natural
gas-fired electrical generation capacity has turned gas into a year-round
commodity, and may offset some industrial demand loss caused by the rapid
increase in prices. We believe that industry will be forced to spend additional
capital to maintain gas productive capacity. Therefore, we are continuing to
increase our holdings of oil service stocks. Our preferred investments are
those with exposure to the natural gas markets, but we have also bought stocks
that have leverage to increase deep water drilling activity and rig
construction.
We reduced our position in the paper and forest products sectors toward the end
of the fiscal year. These stocks contributed to Trust performance in 1999 and
early 2000 as capacity closures and industry consolidation led to higher
capacity operating rates and rising commodity prices. The Trust also benefited
from gains arising from merger offers in Saint Laurent Paperboard and Fort James
Corporation, although the appreciation in the former was somewhat offset by the
decline in the value of our holding in the acquirer, Smurfit Stone Container
Corp. We hold limited exposure to the metals markets, although holdings in
Australian resource companies provided good total returns. However, our holding
of Stillwater Mining Company fell back to our cost basis as a result of
production problems at its mine. As a new mine is developed nearby, we believe
that the stock will again appreciate given this company's exposure to rising
palladium prices.
Fiscal Year in Review
During the fiscal year ended July 31, 2000, we continued to follow a strategy of
identifying commodity sectors with rising capacity utilization trends, then
selecting attractively valued companies within favored sectors. The successful
implementation of this strategy has generally enabled the Trust to deliver
improved results over the past two and one half years, with only the
weather-driven setback in late 1999 resulting in the Trust slipping against its
peer group but still exceeding the return of the S&P 500 Index. We continue to
believe that selected energy-related investments offer the potential for good
returns for the remainder of 2000 and into 2001; therefore, we plan to maintain
our relatively high exposure in the oil service, pipelines and independent oil
and gas producer sectors. In our opinion, the fundamentals for both oil and gas
are the best in nearly 20 years, and the sectors have attractive valuations
relative to the market.
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
next report to shareholders.
Sincerely,
/s/ Terry K. Glenn
Terry K. Glenn
President and Trustee
/s/ Robert M. Shearer
Robert M. Shearer
Senior Vice President and Portfolio Manager
September 1, 2000
================================================================================
Effective on or about November 1, 2000, Merrill Lynch Global Resources Trust
will change its name to Merrill Lynch Natural Resources Trust. The Trust's
objective will remain the same: to seek long-term growth of capital and to
protect the purchasing power of shareholders' capital by investing in a
portfolio of equity securities of domestic and foreign companies with
substantial natural resource assets.
================================================================================
2
<PAGE>
Merrill Lynch Global Resources Trust July 31, 2000
PERFORMANCE DATA
About Fund Performance
Investors are able to purchase shares of the Trust through the Merrill
Lynch Select Pricing(SM) 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 "Recent Performance Results" and
"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.
Recent Performance Results*
<TABLE>
<CAPTION>
Ten Years/
6 Month 12 Month Since Inception
As of July 31, 2000 Total Return Total Return Total Return
==============================================================================================
<S> <C> <C> <C>
ML Global Resources Trust Class A Shares +15.16% +9.98% +49.34%
----------------------------------------------------------------------------------------------
ML Global Resources Trust Class B Shares +14.55 +8.80 +34.52
----------------------------------------------------------------------------------------------
ML Global Resources Trust Class C Shares +14.52 +8.85 +20.18
----------------------------------------------------------------------------------------------
ML Global Resources Trust Class D Shares +15.02 +9.75 +25.89
==============================================================================================
</TABLE>
* Investment results shown do not reflect sales charges; results would be
lower if a sales charge was included. Total investment returns are based
on changes in net asset values for the periods shown, and assume
reinvestment of all dividends and capital gains distributions at net asset
value on the ex-dividend date. The Fund's ten-year/since inception periods
are ten years for Class A & Class B Shares and from 10/21/94 for Class C &
Class D Shares.
3
<PAGE>
Merrill Lynch Global Resources Trust July 31, 2000
PERFORMANCE DATA (continued)
ML Global Resources Trust's Class A and Class B Shares--Total Return Based on a
$10,000 Investment
A line graph depicting the growth of an investment in the Portfolio's Class A
Shares and Class B Shares compared to growth of an investment in the MSCI
Natural Resources Index, Lipper Gold Funds Group Average and the Lipper Natural
Resources Funds Group Average. Beginning and ending values are:
7/90 7/00
ML Global Resources Trust+--
Class A Shares* $ 9,475 $14,149
ML Global Resources Trust+--
Class B Shares* $10,000 $13,451
MSCI Natural
Resources Index++ $10,000 $21,063
Lipper Gold Funds
Group Average+++ $10,000 $ 5,587
Lipper Natural Resources
Funds Group Average++++ $10,000 $17,837
ML Global Resources Trust's Class C and Class D Shares--Total Return Based on a
$10,000 Investment
A line graph depicting the growth of an investment in the Portfolio's Class C
and Class D Shares compared to growth of an investment in the MSCI Natural
Resources Index, Lipper Gold Funds Group Average and the Lipper Natural
Resources Funds Group Average. Beginning and ending values are:
10/21/94** 7/00
ML Global Resources Trust+--
Class C Shares* $10,000 $12,018
ML Global Resources Trust+--
Class D Shares* $ 9,475 $11,928
MSCI Natural
Resources Index++ $10,000 $15,616
Lipper Gold Funds
Group Average+++ $10,000 $ 4,928
Lipper Natural Resources
Funds Group Average++++ $10,000 $15,347
* Assuming maximum sales charge, transaction costs and other operating
expenses, including advisory fees.
** Commencement of operations.
+ The Trust invests primarily in equity securities of domestic and foreign
companies with substantial natural resource assets.
++ This unmanaged broad-based Index is comprised of common stocks.
+++ The Lipper Gold Funds Group Average is an index of all US mutual funds
classified as gold-related funds. The starting date for the Index in the
Class C and Class D Shares' graph is from 10/31/94.
++++ The Lipper Natural Resources Funds Group Average is an index of all US
mutual funds classified as natural resource-related funds.
The starting date for the Index in the Class C & Class D Shares' graph is
from 10/31/94.
Past performance is not predictive of future performance.
4
<PAGE>
Merrill Lynch Global Resources Trust July 31, 2000
PERFORMANCE DATA (concluded)
Average Annual Total Return
% Return Without % Return With
Sales Charge Sales Charge**
================================================================================
Class A Shares*
================================================================================
One Year Ended 6/30/00 +19.44% +13.17%
--------------------------------------------------------------------------------
Five Years Ended 6/30/00 + 5.81 + 4.67
--------------------------------------------------------------------------------
Ten Years Ended 6/30/00 + 5.39 + 4.82
--------------------------------------------------------------------------------
* Maximum sales charge is 5.25%. (Prior to October 21, 1994, Class A Shares
were offered at a higher sales charge. Thus, actual returns would have
been lower than shown for the ten-year period.)
** Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
================================================================================
Class B Shares*
================================================================================
One Year Ended 6/30/00 +18.18% +14.18%
--------------------------------------------------------------------------------
Five Years Ended 6/30/00 + 4.70 + 4.70
--------------------------------------------------------------------------------
Ten Years Ended 6/30/00 + 4.29 + 4.29
--------------------------------------------------------------------------------
* 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*
================================================================================
One Year Ended 6/30/00 +18.21% +17.21%
--------------------------------------------------------------------------------
Five Years Ended 6/30/00 + 4.71 + 4.71
--------------------------------------------------------------------------------
Inception (10/21/94)
through 6/30/00 + 4.28 + 4.28
--------------------------------------------------------------------------------
* 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*
================================================================================
One Year Ended 6/30/00 +19.12% +12.87%
--------------------------------------------------------------------------------
Five Years Ended 6/30/00 + 5.54 + 4.41
--------------------------------------------------------------------------------
Inception (10/21/94)
through 6/30/00 + 5.12 + 4.12
--------------------------------------------------------------------------------
* Maximum sales charge is 5.25%.
** Assuming maximum sales charge.
5
<PAGE>
Merrill Lynch Global Resources Trust July 31, 2000
SCHEDULE OF INVESTMENTS (in US dollars)
<TABLE>
<CAPTION>
Shares Percent of
Industries Held Common Stocks Value Net Assets
==================================================================================================================
<S> <C> <C> <C> <C>
Aluminum 31,900 Alcoa Inc. $ 964,975 1.1%
==================================================================================================================
Canadian 55,900 Alberta Energy Company Ltd. 2,022,227 2.3
Independents 28,600 +Anderson Exploration Ltd. 481,222 0.6
109,000 +Baytex Energy Ltd. 895,006 1.0
134,350 +Canadian Hunter Exploration Ltd. 2,703,638 3.1
23,000 +Canadian Natural Resources Ltd. 645,511 0.7
47,000 Canadian Occidental Petroleum Ltd. 1,170,413 1.4
26,650 +Chieftain International, Inc. 434,728 0.5
92,800 +Crestar Energy, Inc. 1,336,600 1.5
104,300 +Cypress Energy Inc. (Class A) 417,677 0.5
139,800 +Genesis Exploration Ltd. 856,226 1.0
82,200 Paramount Resources Ltd. 733,039 0.9
47,800 +Rio Alto Exploration Ltd. 839,669 1.0
48,100 +Talisman Energy Inc. 1,427,655 1.7
92,100 +Tesco Corporation 808,928 0.9
132,100 +Velvet Exploration Ltd. 377,860 0.4
---------- -----
15,150,399 17.5
==================================================================================================================
Chemicals 27,200 Air Products and Chemicals, Inc. 907,800 1.1
==================================================================================================================
Diversified 26,200 Ashland Inc. 862,962 1.0
Companies
==================================================================================================================
Integrated Oil 30,300 Amerada Hess Corporation 1,833,150 2.1
Companies 31,200 Chevron Corporation 2,464,800 2.9
16,800 Conoco Inc. (Class A) 375,900 0.4
33,100 Conoco Inc. (Class B) 763,369 0.9
8,200 ENI SpA (ADR) (a) 461,250 0.5
32,214 Exxon Mobil Corporation 2,577,120 3.0
24,022 Kerr-McGee Corporation 1,318,207 1.5
42,100 Murphy Oil Corporation 2,536,525 2.9
12,000 Phillips Petroleum Company 609,750 0.7
15,200 Royal Dutch Petroleum Company (NY Registered Shares) 885,400 1.0
16,650 Texaco Inc. 823,134 1.0
46,400 USX-Marathon Group 1,128,100 1.3
---------- -----
15,776,705 18.2
==================================================================================================================
Land & Offshore 341,100 +Drillers Technology Corp. 321,403 0.4
Drillers 96,450 +Drillers Technology Corp. (Warrants) 13,957 0.0
38,500 +Ensign Resource Service Group, Inc. 1,277,460 1.5
38,000 +Noble Drilling Corporation 1,655,375 1.9
55,600 +Precision Drilling Corporation 1,889,756 2.2
62,000 +R&B Falcon Corporation 1,236,125 1.4
35,600 +Santa Fe International Corporation 1,250,450 1.4
---------- -----
7,644,526 8.8
==================================================================================================================
</TABLE>
6
<PAGE>
Merrill Lynch Global Resources Trust July 31, 2000
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<TABLE>
<CAPTION>
Shares Percent of
Industries Held Common Stocks Value Net Assets
==================================================================================================================
<S> <C> <C> <C> <C>
Metals & Mining 1,174,009 M.I.M. Holdings Limited $ 700,144 0.8%
16,400 Phelps Dodge Corporation 667,275 0.8
74,950 +Stillwater Mining Company 1,967,438 2.3
240,000 WMC Limited 1,073,188 1.2
---------- -----
4,408,045 5.1
==================================================================================================================
Oil & Gas Producers 31,900 Anadarko Petroleum Corporation 1,525,219 1.8
45,700 Apache Corporation 2,273,575 2.6
26,000 +Barrett Resources Corporation 723,125 0.8
18,797 Burlington Resources Inc. 613,252 0.7
17,800 Cabot Oil & Gas Corporation (Class A) 329,300 0.4
60,300 Devon Energy Corporation 2,758,725 3.2
132,800 EOG Resources, Inc. 3,925,900 4.5
2,800 Mitchell Energy & Development Corp. (Class A) 89,250 0.1
26,700 +Nabors Industries, Inc. 1,111,388 1.3
27,700 Noble Affiliates, Inc. 831,000 1.0
9,400 +Stone Energy Corporation 451,200 0.5
33,200 Unocal Corporation 1,004,300 1.2
---------- -----
15,636,234 18.1
==================================================================================================================
Oil Services 30,700 +BJ Services Company 1,792,112 2.1
48,400 Baker Hughes Incorporated 1,675,850 1.9
25,100 Coflexip SA (ADR) (a) 1,454,231 1.7
25,200 +Cooper Cameron Corporation 1,628,550 1.9
34,900 +Global Marine Inc. 988,106 1.1
42,325 +Grant Prideco, Inc. 851,791 1.0
197,700 +Gulf Canada Resources Limited (Ordinary) 877,294 1.0
38,100 Helmerich & Payne, Inc. 1,219,200 1.4
31,800 +National-Oilwell, Inc. 1,049,400 1.2
153,200 Saipem SpA 891,478 1.0
44,600 +Stolt Offshore, SA 599,313 0.7
20,300 +Stolt Offshore, SA (ADR) (a) 225,838 0.3
42,325 +Weatherford International, Inc. 1,695,645 2.0
---------- -----
14,948,808 17.3
==================================================================================================================
Paper & Pulp 45,700 Fort James Corporation 1,396,706 1.6
38,000 International Paper Company 1,292,000 1.5
---------- -----
2,688,706 3.1
==================================================================================================================
Pipelines 25,100 The Coastal Corporation 1,449,525 1.7
22,000 Equitable Resources, Inc. 1,145,375 1.3
10,700 The Williams Companies, Inc. 446,725 0.5
---------- -----
3,041,625 3.5
==================================================================================================================
</TABLE>
7
<PAGE>
Merrill Lynch Global Resources Trust July 31, 2000
SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<TABLE>
<CAPTION>
Shares Percent of
Industries Held Common Stocks Value Net Assets
==================================================================================================================
<S> <C> <C> <C> <C>
Refining 19,600 Sunoco, Inc. $ 477,750 0.6%
==================================================================================================================
Steel 136,500 The LTV Corporation 332,719 0.4
==================================================================================================================
Total Common Stocks (Cost--$70,253,965) 82,841,254 95.8
==================================================================================================================
<CAPTION>
Face
Amount Short-Term Securities
==================================================================================================================
<S> <C> <C> <C> <C>
Repurchase $3,141,000 Warburg Dillon Read LLC, purchased on 7/31/2000
Agreements* to yield 6.55% to 8/01/2000 3,141,000 3.6
==================================================================================================================
Total Short-Term Securities (Cost--$3,141,000) 3,141,000 3.6
==================================================================================================================
Total Investments (Cost--$73,394,965) 85,982,254 99.4
Other Assets Less Liabilities 488,273 0.6
----------- ------
Net Assets $86,470,527 100.0%
=========== ======
==================================================================================================================
</TABLE>
(a) American Depositary Receipts (ADR).
* Repurchase Agreements are fully collateralized by US Government & Agency
Obligations.
+ Non-income producing security.
See Notes to Financial Statements.
8
<PAGE>
Merrill Lynch Global Resources Trust July 31, 2000
FINANCIAL INFORMATION
Statement of Assets and Liabilities as of July 31, 2000
<TABLE>
<S> <C> <C> <C>
Assets: Investments, at value (identified cost--$73,394,965) ....................... $ 85,982,254
Cash ....................................................................... 241,759
Receivables:
Beneficial interest sold ................................................ $ 422,920
Securities sold ......................................................... 237,130
Dividends ............................................................... 45,715 705,765
------------
Prepaid registration fees and other assets ................................. 38,661
------------
Total assets ............................................................... 86,968,439
------------
===================================================================================================================================
Liabilities: Payables:
Securities purchased .................................................... 210,233
Beneficial interest redeemed ............................................ 67,471
Investment adviser ...................................................... 45,077
Distributor ............................................................. 29,684 352,465
------------
Accrued expenses and other liabilities ..................................... 145,447
------------
Total liabilities .......................................................... 497,912
------------
===================================================================================================================================
Net Assets: Net assets ................................................................. $ 86,470,527
============
===================================================================================================================================
Net Assets Class A Shares of beneficial interest, $.10 par value, unlimited number
Consist of: of shares authorized ....................................................... $ 76,979
Class B Shares of beneficial interest, $.10 par value, unlimited number
of shares authorized ....................................................... 113,540
Class C Shares of beneficial interest, $.10 par value, unlimited number
of shares authorized ....................................................... 10,658
Class D Shares of beneficial interest, $.10 par value, unlimited number
of shares authorized ....................................................... 308,122
Paid-in capital in excess of par ........................................... 92,953,564
Accumulated investment loss--net ........................................... (2,084)
Accumulated realized capital losses on investments and foreign currency
transactions--net .......................................................... (7,056,099)
Accumulated distributions in excess of realized capital gains on investments
and foreign currency transactions--net ..................................... (12,521,061)
Unrealized appreciation on investments and foreign currency
transactions--net .......................................................... 12,586,908
------------
Net assets ................................................................. $ 86,470,527
============
===================================================================================================================================
Net Asset Value: Class A--Based on net assets of $13,099,789 and 769,787 shares
of beneficial interest outstanding ................................ $ 17.02
============
Class B--Based on net assets of $19,222,880 and 1,135,405 shares
of beneficial interest outstanding ................................ $ 16.93
============
Class C--Based on net assets of $1,782,007 and 106,578 shares
of beneficial interest outstanding ................................ $ 16.72
============
Class D--Based on net assets of $52,365,851 and 3,081,223 shares
of beneficial interest outstanding ................................ $ 17.00
============
===================================================================================================================================
</TABLE>
See Notes to Financial Statements.
9
<PAGE>
Merrill Lynch Global Resources Trust July 31, 2000
FINANCIAL INFORMATION (continued)
Statement of Operations for the Year Ended July 31, 2000
<TABLE>
<S> <C> <C> <C>
Investment Dividends (net of $32,237 foreign withholding tax) . $ 1,022,489
Income: Interest ........................................... 147,261
-----------
Total income ....................................... 1,169,750
-----------
==========================================================================================================
Expenses: Investment advisory fees ........................... $ 512,575
Account maintenance & distribution fees--Class B ... 198,828
Account maintenance fees--Class D .................. 133,266
Transfer agent fees--Class D ....................... 95,436
Professional fees .................................. 85,872
Printing and shareholder reports ................... 78,289
Trustees' fees and expenses ........................ 53,665
Accounting services ................................ 47,722
Transfer agent fees--Class B ....................... 44,240
Custodian fees ..................................... 38,036
Registration fees .................................. 29,909
Transfer agent fees--Class A ....................... 18,276
Account maintenance & distribution fees--Class C ... 17,806
Transfer agent fees--Class C ....................... 3,962
Other .............................................. 4,103
-----------
Total expenses ..................................... 1,361,985
-----------
Investment loss--net ............................... (192,235)
-----------
==========================================================================================================
Realized & Realized gain (loss) from:
Unrealized Gain Investments--net ................................ 177,856
(Loss) on Foreign currency transactions--net .............. (18,127) 159,729
Investments & -----------
Foreign Currency Change in unrealized appreciation/depreciation on:
Transactions--Net: Investments--net ................................ 7,004,095
Foreign currency transactions--net .............. 104,354 7,108,449
----------- -----------
Net Increase in Net Assets Resulting from Operations $ 7,075,943
===========
==========================================================================================================
</TABLE>
See Notes to Financial Statements.
10
<PAGE>
Merrill Lynch Global Resources Trust July 31, 2000
FINANCIAL INFORMATION (continued)
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
For the Year Ended July 31,
------------------------------
Increase (Decrease) in Net Assets: 2000 1999
===================================================================================================================================
<S> <C> <C> <C>
Operations: Investment income (loss)--net ............................................ $ (192,235) $ 260,373
Realized gain (loss) on investments and foreign currency transactions--net 159,729 (12,680,790)
Change in unrealized appreciation/depreciation on investments and foreign
currency transactions--net ............................................... 7,108,449 28,187,908
------------- -------------
Net increase in net assets resulting from operations ..................... 7,075,943 15,767,491
------------- -------------
===================================================================================================================================
Dividends & Investment income--net:
Distributions to Class A ............................................................... -- (112,274)
Shareholders: Class D ............................................................... -- (510,053)
In excess of investment income--net:
Class A ............................................................... (23,800) (11,492)
Class D ............................................................... (64,246) (52,205)
In excess of realized gain on investments--net:
Class A ............................................................... -- (51,962)
Class C ............................................................... -- (4,683)
Class D ............................................................... -- (348,806)
------------- -------------
Net decrease in net assets resulting from dividends and
distributions to shareholders ............................................ (88,046) (1,091,475)
------------- -------------
===================================================================================================================================
Beneficial Interest Net decrease in net assets derived from beneficial
Transactions: interest transactions .................................................... (9,842,462) (25,907,606)
------------- -------------
===================================================================================================================================
Net Assets: Total decrease in net assets ............................................. (2,854,565) (11,231,590)
Beginning of year ........................................................ 89,325,092 100,556,682
------------- -------------
End of year* ............................................................. $ 86,470,527 $ 89,325,092
============= =============
===================================================================================================================================
*Undistributed (accumulated) investment income (loss)--net ................ $ (2,084) $ 76,974
============= =============
===================================================================================================================================
</TABLE>
See Notes to Financial Statements.
11
<PAGE>
Merrill Lynch Global Resources Trust July 31, 2000
FINANCIAL INFORMATION (continued)
Financial Highlights
<TABLE>
<CAPTION>
Class A+
The following per share data and ratios have been derived --------------------------------------------------------------------
from information provided in the financial statements. For the Year Ended July 31,
--------------------------------------------------------------------
Increase (Decrease) in Net Asset Value: 2000 1999 1998 1997 1996
==================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of year ... $ 15.52 $ 12.93 $ 19.90 $ 17.27 $ 16.70
Operating ---------- ---------- ---------- ---------- ----------
Performance: Investment income--net ............... .03 .10 .13 .14 .22
Realized and unrealized gain (loss) on
investments and foreign currency
transactions--net .................... 1.51 2.75 (5.00) 2.91 .50
---------- ---------- ---------- ---------- ----------
Total from investment operations ..... 1.54 2.85 (4.87) 3.05 .72
---------- ---------- ---------- ---------- ----------
Less dividends and distributions:
Investment income--net ............ -- (.17) (.10) (.23) (.15)
In excess of investment income--net (.04) (.01) -- -- --
Realized gain on investments--net . -- -- (1.35) (.19) --
In excess of realized gain on
investments--net .................. -- (.08) (.65) -- --
---------- ---------- ---------- ---------- ----------
Total dividends and distributions .... (.04) (.26) (2.10) (.42) (.15)
---------- ---------- ---------- ---------- ----------
Net asset value, end of year ......... $ 17.02 $ 15.52 $ 12.93 $ 19.90 $ 17.27
========== ========== ========== ========== ==========
==================================================================================================================================
Total Investment Based on net asset value per share ... 9.98% 22.91% (27.00%) 17.95% 4.34%
Return:* ========== ========== ========== ========== ==========
==================================================================================================================================
Ratios to Average Expenses ............................. 1.16% 1.28% 1.07% 1.01% 1.03%
Net Assets: ========== ========== ========== ========== ==========
Investment income--net ............... .20% .75% .79% .76% 1.26%
========== ========== ========== ========== ==========
==================================================================================================================================
Supplemental Net assets, end of year (in thousands) $ 13,100 $ 9,138 $ 9,082 $ 18,504 $ 22,726
Data: ========== ========== ========== ========== ==========
Portfolio turnover ................... 51.36% 50.48% 21.04% 24.23% 26.48%
========== ========== ========== ========== ==========
==================================================================================================================================
</TABLE>
* Total investment returns exclude the effects of sales charges.
+ Based on average shares outstanding.
See Notes to Financial Statements.
12
<PAGE>
Merrill Lynch Global Resources Trust July 31, 2000
FINANCIAL INFORMATION (continued)
Financial Highlights (continued)
<TABLE>
<CAPTION>
Class B++
The following per share data and ratios have been derived ----------------------------------------------------------------------
from information provided in the financial statements. For the Year Ended July 31,
----------------------------------------------------------------------
Increase (Decrease) in Net Asset Value: 2000 1999 1998 1997 1996
===================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of year ... $ 15.56 $ 12.79 $ 19.80 $ 17.16 $ 16.62
Operating ---------- ---------- ---------- ---------- ----------
Performance: Investment income (loss)--net ........ (.14) (.04) (.05) (.05) .03
Realized and unrealized gain (loss) on
investments and foreign currency
transactions--net .................... 1.51 2.81 (4.96) 2.90 .51
---------- ---------- ---------- ---------- ----------
Total from investment operations ..... 1.37 2.77 (5.01) 2.85 .54
---------- ---------- ---------- ---------- ----------
Less dividends and distributions:
Investment income--net ............ -- -- -- (.02) --+
Realized gain on investments--net . -- -- (1.35) (.19) --
In excess of realized gain on
investments--net .................. -- -- (.65) -- --
---------- ---------- ---------- ---------- ----------
Total dividends and distributions .... -- -- (2.00) (.21) --
---------- ---------- ---------- ---------- ----------
Net asset value, end of year ......... $ 16.93 $ 15.56 $ 12.79 $ 19.80 $ 17.16
========== ========== ========== ========== ==========
===================================================================================================================================
Total Investment Based on net asset value per share ... 8.80% 21.66% (27.76%) 16.72% 3.26%
Return:* ========== ========== ========== ========== ==========
===================================================================================================================================
Ratios to Average Expenses ............................. 2.21% 2.35% 2.11% 2.04% 2.07%
Net Assets: ========== ========== ========== ========== ==========
Investment income (loss)--net ........ (.85%) (.28%) (.29%) (.29%) .20%
========== ========== ========== ========== ==========
===================================================================================================================================
Supplemental Net assets, end of year (in thousands) $ 19,223 $ 21,450 $ 29,794 $ 77,386 $ 94,199
Data: ========== ========== ========== ========== ==========
Portfolio turnover ................... 51.36% 50.48% 21.04% 24.23% 26.48%
========== ========== ========== ========== ==========
===================================================================================================================================
</TABLE>
* Total investment returns exclude the effects of sales charges.
+ Amount is less than $.01 per share.
++ Based on average shares outstanding.
See Notes to Financial Statements.
13
<PAGE>
Merrill Lynch Global Resources Trust July 31, 2000
FINANCIAL INFORMATION (continued)
Financial Highlights (continued)
<TABLE>
<CAPTION>
Class C+
The following per share data and ratios have been derived -----------------------------------------------------------------
from information provided in the financial statements. For the Year Ended July 31,
-----------------------------------------------------------------
Increase (Decrease) in Net Asset Value: 2000 1999 1998 1997 1996
===============================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of year ... $ 15.36 $ 12.67 $ 19.64 $ 17.08 $ 16.55
Operating --------- --------- --------- --------- ---------
Performance: Investment income (loss)--net ........ (.14) (.04) (.04) (.06) .04
Realized and unrealized gain (loss) on
investments and foreign currency
transactions--net .................... 1.50 2.77 (4.93) 2.90 .49
--------- --------- --------- --------- ---------
Total from investment operations ..... 1.36 2.73 (4.97) 2.84 .53
--------- --------- --------- --------- ---------
Less dividends and distributions:
Investment income--net ............ -- -- -- (.09) --
Realized gain on investments--net . -- -- (1.35) (.19) --
In excess of realized gain on
investments--net .................. -- (.04) (.65) -- --
--------- --------- --------- --------- ---------
Total dividends and distributions .... -- (.04) (2.00) (.28) --
--------- --------- --------- --------- ---------
Net asset value, end of year ......... $ 16.72 $ 15.36 $ 12.67 $ 19.64 $ 17.08
========= ========= ========= ========= =========
===============================================================================================================================
Total Investment Based on net asset value per share ... 8.85% 21.68% (27.78%) 16.77% 3.20%
Return:* ========= ========= ========= ========= =========
===============================================================================================================================
Ratios to Average Expenses ............................. 2.21% 2.33% 2.12% 2.06% 2.07%
Net Assets: ========= ========= ========= ========= =========
Investment income (loss)--net ........ (.86%) (.33%) (.29%) (.33%) .27%
========= ========= ========= ========= =========
===============================================================================================================================
Supplemental Net assets, end of year (in thousands) $ 1,782 $ 2,039 $ 1,461 $ 2,680 $ 3,388
Data: ========= ========= ========= ========= =========
Portfolio turnover ................... 51.36% 50.48% 21.04% 24.23% 26.48%
========= ========= ========= ========= =========
===============================================================================================================================
</TABLE>
* Total investment returns exclude the effects of sales charges.
+ Based on average shares outstanding.
See Notes to Financial Statements.
14
<PAGE>
Merrill Lynch Global Resources Trust July 31, 2000
FINANCIAL INFORMATION (concluded)
Financial Highlights (concluded)
<TABLE>
<CAPTION>
Class D+
The following per share data and ratios have been derived ----------------------------------------------------------
from information provided in the financial statements. For the Year Ended July 31,
----------------------------------------------------------
Increase (Decrease) in Net Asset Value: 2000 1999 1998 1997 1996
=========================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of year ... $ 15.51 $ 12.89 $ 19.83 $ 17.21 $ 16.67
Operating -------- -------- -------- --------- --------
Performance: Investment income (loss)--net ........ (.01) .06 .09 .09 .17
Realized and unrealized gain (loss) on
investments and foreign currency
transactions--net .................... 1.52 2.77 (4.99) 2.91 .50
-------- -------- -------- --------- --------
Total from investment operations ..... 1.51 2.83 (4.90) 3.00 .67
-------- -------- -------- --------- --------
Less dividends and distributions:
Investment income--net ............ -- (.12) (.04) (.19) (.13)
In excess of investment income--net (.02) (.01) -- -- --
Realized gain on investments--net . -- -- (1.35) (.19) --
In excess of realized gain on
investments--net .................. -- (.08) (.65) -- --
-------- -------- -------- --------- --------
Total dividends and distributions .... (.02) (.21) (2.04) (.38) (.13)
-------- -------- -------- --------- --------
Net asset value, end of year ......... $ 17.00 $ 15.51 $ 12.89 $ 19.83 $ 17.21
======== ======== ======== ========= ========
=========================================================================================================================
Total Investment Based on net asset value per share ... 9.75% 22.56% (27.15%) 17.66% 4.06%
Return:* ======== ======== ======== ========= ========
=========================================================================================================================
Ratios to Average Expenses ............................. 1.42% 1.54% 1.32% 1.26% 1.27%
Net Assets: ======== ======== ======== ========= ========
Investment income (loss)--net ........ (.05%) .50% .55% .51% 1.00%
======== ======== ======== ========= ========
=========================================================================================================================
Supplemental Net assets, end of year (in thousands) $ 52,366 $ 56,698 $ 60,220 $ 107,403 $108,924
Data: ======== ======== ======== ========= ========
Portfolio turnover ................... 51.36% 50.48% 21.04% 24.23% 26.48%
======== ======== ======== ========= ========
=========================================================================================================================
</TABLE>
* Total investment returns exclude the effects of sales charges.
+ Based on average shares outstanding.
See Notes to Financial Statements.
15
<PAGE>
Merrill Lynch Global Resources Trust July 31, 2000
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. The Trust's financial statements are prepared in accordance
with accounting principles generally accepted in the United States of America,
which may require the use of management accruals and estimates. The Trust offers
four classes of shares under the Merrill Lynch Select Pricing(SM) 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 that 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 that 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 or purchased are valued at the last sale price in the case of
exchange-traded options. In the case of options traded in the over-the-counter
market, valuation is the last asked price (options written) or the last bid
price (options purchased). 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. Under such agreements, the counterparty
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
investment strategies to increase or decrease the level of risk to which the
Trust is exposed more quickly and efficiently than transactions in other types
of instruments. 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.
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 gain or loss to the extent the cost
of the closing transaction is less than or greater than the premiums paid or
received).
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
16
<PAGE>
Merrill Lynch Global Resources Trust July 31, 2000
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. Distributions in excess of investment
income are due primarily to deferring tax treatments for post-October losses.
Distributions in excess of realized capital gains are due primarily to deferring
tax treatments for post-October losses.
(i) Reclassification--Generally accepted accounting principles require that
certain components of net assets be adjusted to reflect permanent differences
between financial and tax reporting. Accordingly, current year's permanent
book/tax differences of $18,127 have been reclassified between accumulated net
realized capital losses and accumulated net investment loss and $219,350 has
been reclassified between paid-in capital in excess of par and accumulated net
investment loss. These reclassifications have no effect on net assets or net
asset values per share.
2. Investment Advisory Agreement and Transactions with Affiliates:
The Trust has entered into an Investment Advisory Agreement with Merrill Lynch
Investment Managers, L.P. ("MLIM"). The general partner of MLIM 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 FAM Distributors,
Inc. ("FAMD" or the "Distributor"), which is a wholly-owned subsidiary of
Merrill Lynch Group, Inc.
MLIM 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 .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 ............................ .25% .75%
Class C ............................ .25% .75%
Class D ............................ .25% --
--------------------------------------------------------------------------------
Pursuant to a sub-agreement with the Distributor, Merrill Lynch, Pierce, Fenner
& Smith Incorporated ("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 year ended July 31, 2000, FAMD earned underwriting discounts and MLPF&S
earned dealer concessions on sales of the Trust's Class A and Class D Shares as
follows:
--------------------------------------------------------------------------------
FAMD MLPF&S
--------------------------------------------------------------------------------
Class A ............................ $ 71 $ 630
Class D ............................ $ 1,474 $24,127
--------------------------------------------------------------------------------
For the year ended July 31, 2000, MLPF&S received contingent deferred sales
charges of $37,375 and $3,882 relating to transactions in Class B and
17
<PAGE>
Merrill Lynch Global Resources Trust July 31, 2000
NOTES TO FINANCIAL STATEMENTS (concluded)
Class C Shares, respectively. Furthermore, MLPF&S received contingent deferred
sales charges of $244 and $26,463 relating to transactions subject to front-end
sales charge waivers in Class A and Class D Shares, respectively.
In addition, MLPF&S received $27,569 in commissions on the execution of
portfolio security transactions for the Trust for the year ended July 31, 2000.
Financial Data Services, Inc. ("FDS"), a wholly-owned subsidiary of ML & Co., is
the Trust's transfer agent.
Accounting services are provided to the Trust by MLIM at cost.
Certain officers and/or trustees of the Trust are officers and/or directors of
MLIM, PSI, FDS, FAMD, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities, for the
year ended July 31, 2000 were $42,143,747 and $54,127,344, respectively.
Net realized gains (losses) for the year ended July 31, 2000 and net unrealized
gains (losses) as of July 31, 2000 were as follows:
--------------------------------------------------------------------------------
Realized Unrealized
Gains (Losses) Gains (Losses)
--------------------------------------------------------------------------------
Long-term investments ................ $ 177,856 $ 12,587,289
Foreign currency transactions ........ (18,127) (381)
------------ ------------
Total ................................ $ 159,729 $ 12,586,908
============ ============
--------------------------------------------------------------------------------
As of July 31, 2000, net unrealized appreciation for Federal income tax purposes
aggregated $12,499,942, of which $18,063,893 related to appreciated securities
and $5,563,951 related to depreciated securities. At July 31, 2000, the
aggregate cost of investments for Federal income tax purposes was $73,482,312.
4. Beneficial Interest Transactions:
Net decrease in net assets derived from beneficial interest transactions was
$9,842,462 and $25,907,606 for the years ended July 31, 2000 and July 31, 1999,
respectively.
Transactions in shares of beneficial interest for each class were as follows:
--------------------------------------------------------------------------------
Class A Shares for the Year Dollar
Ended July 31, 2000 Shares Amount
--------------------------------------------------------------------------------
Shares sold .......................... 805,556 $ 13,068,358
Shares issued to shareholders
in reinvestment of dividends ......... 1,475 20,889
------- ------------
Total issued ......................... 807,031 13,089,247
Shares redeemed ...................... (626,145) (10,317,455)
------- ------------
Net increase ......................... 180,886 $ 2,771,792
======= ============
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class A Shares for the Year Dollar
Ended July 31, 1999 Shares Amount
--------------------------------------------------------------------------------
Shares sold .......................... 258,053 $ 3,353,195
Shares issued to shareholders
in reinvestment of dividends
and distributions .................... 14,280 155,903
-------- ------------
Total issued ......................... 272,333 3,509,098
Shares redeemed ...................... (385,907) (4,907,125)
-------- ------------
Net decrease ......................... (113,574) $ (1,398,027)
======== ============
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class B Shares for the Year Dollar
Ended July 31, 2000 Shares Amount
--------------------------------------------------------------------------------
Shares sold .......................... 378,695 $ 6,296,891
Automatic conversion
of shares ............................ (139,160) (2,259,044)
Shares redeemed ...................... (483,004) (7,621,936)
-------- ------------
Net decrease ......................... (243,469) $ (3,584,089)
======== ============
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class B Shares for the Year Dollar
Ended July 31, 1999 Shares Amount
--------------------------------------------------------------------------------
Shares sold .......................... 265,094 $ 3,508,586
Automatic conversion
of shares ............................ (160,271) (2,040,380)
Shares redeemed ...................... (1,055,323) (13,211,981)
--------- ------------
Net decrease ......................... (950,500) $(11,743,775)
========= ============
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class C Shares for the Year Dollar
Ended July 31, 2000 Shares Amount
--------------------------------------------------------------------------------
Shares sold .......................... 77,315 $ 1,280,234
Shares redeemed ...................... (103,472) (1,621,178)
------- ------------
Net decrease ......................... (26,157) $ (340,944)
======= ============
--------------------------------------------------------------------------------
18
<PAGE>
Merrill Lynch Global Resources Trust July 31, 2000
--------------------------------------------------------------------------------
Class C Shares for the Year Dollar
Ended July 31, 1999 Shares Amount
--------------------------------------------------------------------------------
Shares sold .......................... 80,297 $ 1,032,928
Shares issued to shareholders
in reinvestment of dividends
and distributions .................... 380 4,096
------ ------------
Total issued ......................... 80,677 1,037,024
Shares redeemed ...................... (63,244) (830,479)
------ ------------
Net increase ......................... 17,433 $ 206,545
====== ============
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class D Shares for the Year Dollar
Ended July 31, 2000 Shares Amount
--------------------------------------------------------------------------------
Shares sold .......................... 259,754 $ 4,274,364
Automatic conversion
of shares ............................ 139,039 2,259,044
Shares issued to shareholders
in reinvestment of dividends ......... 3,227 45,733
-------- ------------
Total issued ......................... 402,020 6,579,141
Shares redeemed ...................... (976,017) (15,268,362)
-------- ------------
Net decrease ......................... (573,997) $ (8,689,221)
======== ============
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class D Shares for the Year Dollar
Ended July 31, 1999 Shares Amount
--------------------------------------------------------------------------------
Shares sold .......................... 78,640 $ 1,010,759
Automatic conversion
of shares ............................ 160,807 2,040,380
Shares issued to shareholders
in reinvestment of dividends
and distributions .................... 61,096 666,540
---------- ------------
Total issued ......................... 300,543 3,717,679
Shares redeemed ...................... (1,318,304) (16,690,028)
---------- ------------
Net decrease ......................... (1,017,761) $(12,972,349)
========== ============
--------------------------------------------------------------------------------
5. Short-Term Borrowings:
On December 3, 1999, the Trust, along with certain other funds managed by MLIM
and its affiliates, entered into a one-year, unsecured $1,000,000,000 credit
agreement with The Bank of New York and other lenders. The funds may borrow
money for temporary or emergency purposes to meet shareholder redemptions. Each
fund may borrow up to the maximum amount allowable under the fund's current
prospectus and statement of additional information, subject to various other
legal, regulatory or contractual limits. The funds collectively pay a commitment
fee of .09% per annum on the available portion of the facility. Amounts borrowed
under the facility bear interest at the Federal Funds rate plus .50%. The Trust
did not borrow from the facility during the year ended July 31, 2000.
6. Commitments:
At July 31, 2000, the Trust had entered into foreign exchange contracts under
which it had agreed to sell various foreign currencies with an approximate value
of $236,000.
7. Capital Loss Carryforward:
At July 31, 2000, the Trust had a net capital loss carryforward of approximately
$19,490,000, of which $9,970,000 expires in 2007 and $9,520,000 expires in 2008.
This amount will be available to offset like amounts of any future taxable
gains.
8. Organizational Change:
On or about November 1, 2000, the Trust will change its name to Merrill Lynch
Natural Resources Trust.
19
<PAGE>
Merrill Lynch Global Resources Trust July 31, 2000
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders,
Merrill Lynch Global Resources Trust:
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of Merrill Lynch Global Resources Trust as of July
31, 2000, the related statements of operations for the year then ended and
changes in net assets for each of the years in the two-year period then ended,
and the financial highlights for each of the years in the five-year period then
ended. These financial statements and the financial highlights are the
responsibility of the Trust's management. Our responsibility is to express an
opinion on these financial statements and the financial highlights based on our
audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements and the financial highlights are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation
of securities owned at July 31, 2000 by correspondence with the custodian and
brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Merrill Lynch Global
Resources Trust as of July 31, 2000, the results of its operations, the changes
in its net assets, and the financial highlights for the respective stated
periods in conformity with accounting principles generally accepted in the
United States of America.
Deloitte & Touche LLP
Princeton, New Jersey
September 12, 2000
20
<PAGE>
Merrill Lynch Global Resources Trust July 31, 2000
IMPORTANT TAX INFORMATION (unaudited)
Of the ordinary income dividends paid by Merrill Lynch Global Resources Trust to
shareholders of record as of December 3, 1999, 100% qualifies for the dividends
received deduction for corporations.
Additionally, there were no long-term capital gain distributions paid by the
Trust during the year.
Please retain this information for your records.
21
<PAGE>
Merrill Lynch Global Resources Trust July 31, 2000
PORTFOLIO INFORMATION (unaudited)
As of July 31, 2000
Percent of
Ten Largest Equity Holdings Net Assets
EOG Resources, Inc. .................................... 4.5%
Devon Energy Corporation ............................... 3.2
Canadian Hunter Exploration Ltd. ....................... 3.1
Exxon Mobil Corporation ................................ 3.0
Murphy Oil Corporation ................................. 2.9
Chevron Corporation .................................... 2.9
Apache Corporation ..................................... 2.6
Alberta Energy Corporation Ltd. ........................ 2.3
Stillwater Mining Company .............................. 2.3
Precision Drilling Corporation ......................... 2.2
Percent of
Geographic Allocation Net Assets
United States .......................................... 67.0%
Canada ................................................. 22.6
Australia .............................................. 2.0
France ................................................. 1.7
Italy .................................................. 1.5
Norway ................................................. 1.0
22
<PAGE>
Merrill Lynch Global Resources Trust July 31, 2000
OFFICERS AND TRUSTEES
Terry K. Glenn, President and Trustee
M. Colyer Crum, Trustee
Laurie Simon Hodrick, Trustee
Jack B. Sunderland, Trustee
J. Thomas Touchton, Trustee
Fred G. Weiss, Trustee
Arthur Zeikel, Trustee
Robert C. Doll, Jr., Senior Vice President
Robert M. Shearer, Senior Vice President and Portfolio Manager
Donald C. Burke, Vice President and Treasurer
Thomas D. Jones, III, Secretary
Custodian
The Bank of New York
90 Washington Street, 12th Floor
New York, NY 10286
Transfer Agent
Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 637-3863
23
<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--7/00
[LOGO] Printed on post-consumer recycled paper
