MERRILL LYNCH
NEW YORK
MUNICIPAL
BOND FUND
Merrill Lynch Multi-State
Municipal Series Trust
FUND LOGO
Semi-Annual Report
March 31, 1996
This report is not authorized for use as an offer of sale or a
solicitation of an offer to buy shares of the Fund unless
accompanied or preceded by the Fund's current prospectus. Past
performance results shown in this report should not be considered a
representation of future performance. Investment return and
principal value of shares will fluctuate so that shares, when
redeemed, may be worth more or less than their original cost.
Statements and other information herein are as dated and are subject
to change.
<PAGE>
Merrill Lynch New York
Municipal Bond Fund
Merrill Lynch Multi-State
Municipal Series Trust
Box 9011
Princeton, NJ
08543-9011
TO OUR SHAREHOLDERS
As 1995 drew to a close and 1996 began, it appeared that the US
economy was losing momentum. Lackluster retail sales, increases in
initial unemployment claims (along with weak job and income growth),
and evidence of slowing in the manufacturing sector all suggested
that the rate of economic growth was slowing, with some forecasters
even suggesting the possibility of an imminent recession. With
inflationary pressures well subdued, these signs of economic
weakness led the Federal Reserve Board to follow a more
accommodative monetary policy.
However, investor perceptions regarding the rate of future economic
growth changed dramatically with the report of stronger-than-
expected employment data for February and March. As a result, the
consensus outlook regarding the direction of business activity
shifted from expectations of weakness to anticipation of a revival
in growth of the economy. Long-term interest rates rose, and the
Federal Reserve Board left monetary policy on hold.
<PAGE>
Investors are likely to continue to focus on the probable direction
of economic activity and Federal Reserve Board monetary policy in
the weeks ahead. At this time, inflationary pressures do not seem to
be building and the manufacturing sector is still relatively weak,
which suggest that the economy is not on the verge of overheating.
Nevertheless, it is likely that any further indication of stronger
economic activity in the weeks ahead may add to investor concerns
that accelerating economic activity could lead to higher interest
rates.
The Municipal Market
Long-term tax-exempt bond yields were little changed during the
six-month period ended March 31, 1996. Buoyed by investor
expectations of continuing mild inflation and weakening domestic
economic growth, tax-exempt bond yields steadily declined as 1995
ended. As measured by the Bond Buyer Revenue Bond Index, A-rated
municipal revenue bond yields declined over 55 basis points (0.55%)
to 5.63%. Economic indicators released in early 1996, and
particularly the surging employment growth seen in early March,
suggested that earlier expectations of weaker economic growth may
have been overly optimistic. As investor confidence waned,
tax-exempt bond yields rose to 6.15% at March 31, 1996, down
approximately 10 basis points from the start of the period. US
Treasury bond yields followed a similar, although more volatile,
pattern over the last six months. By the end of 1995, US Treasury
bond yields fell over 65 basis points to 5.95%. Yields rose
significantly for the remainder of the period to 6.65%. For the six
months ended March 31, 1996, US Treasury bond yields rose
approximately 5 basis points while long-term municipal bond yields
fell approximately 10 basis points.
The municipal bond market's recent outperformance was largely the
result of two principal factors. First, and perhaps more
importantly, much of the earlier concern regarding proposed changes
in Federal income tax codes and their effect on the tax treatment of
tax-exempt bond income dissipated. As the negative revenue impact of
the various proposals, such as the flat tax, became apparent, the
likelihood of immediate tax reform quickly diminished. When the Kemp
Commission dealing with Federal income tax reform released its
findings early in 1996, the obvious need for reform was highlighted.
However, no specific recommendations of a flat tax, value-added tax
or any other specific reforms were made. Consequently, fears of
losing the favored tax treatment of municipal bond income declined
even further. As a percentage of Treasury bond yields, tax-exempt
bond yield ratios quickly declined from 95% to approximately 90%.
This allowed the municipal bond market to preserve much of the gains
it made in recent months.
<PAGE>
The second major factor leading to the municipal bond market's
recent improvement was the return of a more favorable technical
environment. Over the past six months approximately $92 billion in
municipal securities were underwritten, an increase of nearly 40%
versus the comparable period a year earlier. However, much of this
increase was biased by recent underwritings over the last three
months. Municipal issuers sought to refinance their existing
higher-couponed debt as tax-exempt bond yields have approached their
recent historic lows. Over the past three months such refundings
have contributed to total bond issuance of about $40 billion.
However, at the same time, investors continue to receive significant
amounts of assets derived from coupon income, bond maturities and
proceeds from early redemptions. During January and February 1996,
investors received approximately $35 billion in such assets, nearly
equal to the total amount of bonds issued during the previous three
months. These cash flows helped maintain individual retail investor
demand during recent months. Additionally, major institutional
investors, including certain insurance companies whose underwriting
profits were cyclically high, demonstrated significant ongoing
interest in the tax-exempt bond market, particularly on
higher-quality securities. Individual and institutional investor
demand was strong enough during the six-month period ended March 31,
1996 to absorb the relative increase in bond issuance and still
allow tax-exempt bond yields to decline further.
Looking forward, the municipal bond market is likely to continue to
outperform the US Treasury bond market. Investor demand should
remain adequate enough to absorb new bond issuance. It is not likely
that the rapid pace of issuance seen thus far in 1996 will be
maintained. The recent rise in yields made further bond refinancings
economically unfeasible. Since these refinancings were the driving
force of recent bond issuance, as the amount of these refundings
decline, overall issuance should decline. This should allow the
current demand/supply balance to be easily maintained. Additionally,
as a percentage of Treasury bond yields, long-term municipal bond
yields remain historically attractive. With long-term, tax-exempt
revenue bonds yielding approximately 90% of their taxable
counterparts, should taxable interest rates resume their decline,
municipal bond yields are poised to decline further.
Portfolio Strategy
We entered the six-month period ended March 31, 1996 very optimistic
that interest rates would decline. This optimism was based on the
belief that the economy was slowing and advances on a balanced
budget agreement would be beneficial to the fixed-income markets. To
take advantage of this anticipated decline in interest rates, we
reduced the Fund's cash reserve position to 1% of net assets and
increased the Fund's duration. This strategy benefited the
portfolio's performance as long-term interest rates declined over 50
basis points through the end of December.
<PAGE>
The start of 1996 brought the beginning of a reversal in the trend
of lower interest rates. By late February signs of a strengthening
economy began to undermine the confidence in the fixed-income
market. In March an explosive employment report seemed to confirm a
surge in the US economy's growth, and yields rose rapidly from that
point on. Prior to the backup in yields, we gradually increased the
Fund's cash reserve position while reducing its duration. As a
result of this strategy, the Fund was less sensitive to the violent
backup in yields experienced in the fixed-income markets. In
addition, municipal bonds significantly outperformed US Treasury
securities.
In response to various factors affecting the economy, such as the
January blizzard and Government shutdowns, economic numbers released
so far in 1996 are clouded and subject to many interpretations, but
they pointed to a stronger economy. The suggestion of these economic
releases that the economy may be picking up steam warrants a
cautious approach to the tax-exempt market until a clearer direction
of the path of the economy emerges. Therefore, we expect to maintain
the Fund's cautious approach to the tax-exempt market.
In Conclusion
We appreciate your ongoing interest in Merrill Lynch New York
Municipal Bond Fund, and we look forward to assisting you with your
financial needs in the months and years to come.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Vincent R. Giordano)
Vincent R. Giordano
Vice President
<PAGE>
(Roberto Roffo)
Roberto Roffo
Portfolio Manager
May 2, 1996
We are pleased to announce that Roberto Roffo is responsible for the
day-to-day management of Merrill Lynch New York Municipal Bond Fund.
Mr. Roffo has been employed by Merrill Lynch Asset Management, L.P.
(an affiliate of the Fund's investment adviser) since 1996 as Vice
President and since 1992 as a Portfolio Manager. Prior thereto, he
was Operations Manager with State Street Bank and Trust Company from
1989 to 1992.
PERFORMANCE DATA
About Fund Performance
Investors are able to purchase shares of the Fund through the
Merrill Lynch Select Pricing SM System, which offers four pricing
alternatives:
* Class A Shares incur a maximum initial sales charge (front-end
load) of 4% and bear no ongoing distribution or account maintenance
fees. Class A Shares are available only to eligible investors.
* Class B Shares are subject to a maximum contingent deferred sales
charge of 4% if redeemed during the first year, decreasing 1% each
year thereafter to 0% after the fourth year. In addition, Class B
Shares are subject to a distribution fee of 0.25% and an account
maintenance fee of 0.25%. These shares automatically convert to
Class D Shares after approximately 10 years.
* Class C Shares are subject to a distribution fee of 0.35% and an
account maintenance fee of 0.25%. In addition, Class C Shares are
subject to a 1% contingent deferred sales charge if redeemed within
one year of purchase.
* Class D Shares incur a maximum initial sales charge of 4% and an
account maintenance fee of 0.10% (but no distribution fee).
<PAGE>
None of the past results shown should be considered a representation
of future performance. Investment return and principal value of
shares will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost. Dividends paid to each class
of shares will vary because of the different levels of account
maintenance, distribution and transfer agency fees applicable to
each class, which are deducted from the income available to be paid
to shareholders.
<TABLE>
Recent Performance Results
<CAPTION>
12 Month 3 Month
3/31/96 12/31/95 3/31/95 % Change % Change
<S> <C> <C> <C> <C> <C>
Class A Shares* $11.05 $11.48 $10.95 +0.91% -3.75%
Class B Shares* 11.05 11.48 10.95 +0.91 -3.75
Class C Shares* 11.06 11.48 10.96 +0.91 -3.66
Class D Shares* 11.05 11.47 10.95 +0.91 -3.66
Class A Shares--Total Return* +6.46(1) -2.47(2)
Class B Shares--Total Return* +5.92(3) -2.59(4)
Class C Shares--Total Return* +5.82(5) -2.52(6)
Class D Shares--Total Return* +6.35(7) -2.41(8)
Class A Shares--Standardized 30-day Yield 4.73%
Class B Shares--Standardized 30-day Yield 4.41%
Class C Shares--Standardized 30-day Yield 4.31%
Class D Shares--Standardized 30-day Yield 4.63%
<FN>
*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 $0.598 per share ordinary
income dividends.
(2)Percent change includes reinvestment of $0.138 per share ordinary
income dividends.
(3)Percent change includes reinvestment of $0.542 per share ordinary
income dividends.
(4)Percent change includes reinvestment of $0.125 per share ordinary
income dividends.
(5)Percent change includes reinvestment of $0.531 per share ordinary
income dividends.
(6)Percent change includes reinvestment of $0.123 per share ordinary
income dividends.
(7)Percent change includes reinvestment of $0.587 per share ordinary
income dividends.
(8)Percent change includes reinvestment of $0.136 per share ordinary
income dividends.
</TABLE>
PERFORMANCE DATA (CONTINUED)
<PAGE>
Average Annual Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 3/31/96 +6.46% +2.20%
Five Years Ended 3/31/96 +7.20 +6.32
Inception (10/25/88)
through 3/31/96 +7.14 +6.55
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 3/31/96 +5.92% +1.92%
Five Years Ended 3/31/96 +6.66 +6.66
Ten Years Ended 3/31/96 +6.53 +6.53
[FN]
*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 3/31/96 +5.82% +4.82%
Inception (10/21/94)
through 3/31/96 +7.04 +7.04
[FN]
*Maximum contingent deferred sales charge is 1% and is reduced to 0%
after 1 year.
**Assuming payment of applicable contingent deferred sales charge.
<PAGE>
% Return Without % Return With
Sales Charge Sales Charge**
Class D Shares*
Year Ended 3/31/96 +6.35% +2.10%
Inception (10/21/94)
through 3/31/96 +7.51 +4.52
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
<TABLE>
Performance Summary--Class A Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<S> <C> <C> <C> <C> <C>
10/25/88-12/31/88 $10.85 $10.76 -- $0.138 + 0.44%
1989 10.76 11.00 -- 0.742 + 9.43
1990 11.00 10.76 -- 0.734 + 4.71
1991 10.76 11.43 -- 0.728 +13.44
1992 11.43 11.74 $0.110 0.727 +10.37
1993 11.74 12.08 0.241 0.775 +11.81
1994 12.08 10.43 -- 0.629 - 8.60
1995 10.43 11.48 -- 0.605 +16.25
1/1/96-3/31/96 11.48 11.05 -- 0.138 - 2.47
------ ------
Total $0.351 Total $5.216
Cumulative total return as of 3/31/96: +66.98%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures assume reinvestment of all dividends and capital gains
distributions at net asset value on the payable date, and do not
include sales charge; results would be lower if sales charge was
included.
</TABLE>
<PAGE>
PERFORMANCE DATA (concluded)
<TABLE>
Performance Summary--Class B Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<S> <C> <C> <C> <C> <C>
11/1/85-12/31/85 $10.00 $10.34 -- $0.098 + 4.60%
1986 10.34 11.24 $0.073 0.732 +16.95
1987 11.24 10.44 -- 0.722 - 0.79
1988 10.44 10.76 -- 0.685 + 9.92
1989 10.76 11.00 -- 0.687 + 8.89
1990 11.00 10.77 -- 0.680 + 4.29
1991 10.77 11.43 -- 0.672 +12.76
1992 11.43 11.74 0.110 0.668 + 9.82
1993 11.74 12.09 0.241 0.714 +11.34
1994 12.09 10.43 -- 0.573 - 9.14
1995 10.43 11.48 -- 0.549 +15.67
1/1/96-3/31/96 11.48 11.05 -- 0.125 - 2.59
------ ------
Total $0.424 Total $6.905
Cumulative total return as of 3/31/96: +113.84%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures assume reinvestment of all dividends and capital gains
distributions at net asset value on the payable date, and do not
reflect deduction of any sales charge; results would be lower if
sales charge was deducted.
</TABLE>
<TABLE>
Performance Summary--Class C Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<S> <C> <C> <C> <C> <C>
10/21/94-12/31/94 $10.76 $10.43 -- $0.107 - 2.05%
1995 10.43 11.48 -- 0.538 +15.55
1/1/96-3/31/96 11.48 11.06 -- 0.123 - 2.52
------
Total $0.768
Cumulative total return as of 3/31/96: +10.32%**
<PAGE>
<FN>
*Figures may include short-term capital gains distributions.
**Figures assume reinvestment of all dividends and capital gains
distributions at net asset value on the payable date, and do not
reflect deduction of any sales charge; results would be lower if
sales charge was deducted.
</TABLE>
<TABLE>
Performance Summary--Class D Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<S> <C> <C> <C> <C> <C>
10/21/94-12/31/94 $10.76 $10.42 -- $0.118 - 2.05%
1995 10.42 11.47 -- 0.594 +16.15
1/1/96-3/31/96 11.47 11.05 -- 0.136 - 2.41
------
Total $0.848
Cumulative total return as of 3/31/96: +11.03%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures assume reinvestment of all dividends and capital gains
distributions at net asset value on the payable date, and do not
include sales charge; results would be lower if sales charge was
included.
</TABLE>
PORTFOLIO ABBREVIATIONS
To simplify the listings of Merrill Lynch New York Municipal Bond
Fund's portfolio holdings in the Schedule of Investments, we have
abbreviated the names of many of the securities according to the
list below and at right.
AMT Alternative Minimum Tax (subject to)
COP Certificates of Participation
GO General Obligation Bonds
IDA Industrial Development Authority
IDR Industrial Development Revenue Bonds
PCR Pollution Control Revenue Bonds
RIB Residual Interest Bonds
UT Unlimited Tax
VRDN Variable Rate Demand Notes
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (in Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
New York--95.3%
<S> <S> <C> <S> <C>
AAA Aaa $ 3,205 Babylon, New York, IDA, Resource Recovery Revenue Bonds
(Ogden Martin Systems), Series C, 8.50% due 7/01/1998 (d) $ 3,595
NR* Baa1 14,750 Babylon, New York, IDA, Waste Facilities Revenue Bonds
(Babylon Community Waste Management), Series A, 7.875%
due 7/01/1999 (d) 16,587
AAA Aaa 4,000 Buffalo, New York, Sewer Authority Revenue Bonds, Series F,
6% due 7/01/2013 (b) 4,225
AA+ Aa1 6,200 Hornell, New York, IDA, IDR (Crowley Foods, Inc.), 7.75% due
12/01/2016 6,446
Metropolitan Transportation Authority, New York, Service
Contract Revenue Bonds, Series O:
BBB Baa1 11,825 (Commuter Facilities), 5.75% due 7/01/2013 11,484
BBB Baa1 15,750 (Transit Facilities), 5.75% due 7/01/2013 15,296
AAA Aaa 2,950 Monroe County, New York, Airport Authority Revenue Bonds
(Greater Rochester International), AMT, 7.25% due
1/01/2009 (c) 3,186
BBB+ Baa 9,770 Monroe County, New York, COP, 8.05% due 1/01/2011 10,599
New York City, New York, GO, UT:
BBB+ Baa1 5,000 Series B, 7% due 6/01/2016 5,231
BBB+ Baa1 2,500 Series B, Sub-Series B-1, 7% due 8/15/2016 2,646
BBB+ Baa1 5,450 Series C, 7.25% due 8/15/2024 5,748
New York City, New York, IDA, Civic Facilities Revenue Bonds:
A1+ NR* 5,000 (National Audobon Society), VRDN, 3.30% due 12/01/2014 (e) 5,000
NR* NR* 2,000 (New York Blood Center Inc. Project), 7.20% due 5/01/2004 (d) 2,265
NR* NR* 6,895 (New York Blood Center Inc. Project), 7.25% due 5/01/2004 (d) 7,946
AAA Aaa 4,690 (USTA National Tennis Center Project), 6.60% due
11/15/2011 (g) 5,061
BB+ Baa2 2,030 New York City, New York, IDA, Special Facilities Revenue
Bonds (1990--American Airlines Inc. Project), AMT, 7.75%
due 7/01/2019 2,149
New York City, New York, Municipal Water Finance Authority,
Water and Sewer System Revenue Bonds:
A1 VMIG1++ 19,600 RIB, 8.075% due 6/15/2025 (h) 19,257
A- A 6,125 Series B, 6.50% due 6/15/2020 6,349
AAA Aaa 3,750 New York City, New York, Trust for Cultural Resources Revenue
Bonds (American Museum of Natural History), Series A, 6.90%
due 4/01/2001 (c)(d) 4,208
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
New York (continued)
<S> <S> <C> <S> <C>
New York State Dormitory Authority Revenue Bonds:
BBB Baa1 $ 5,000 (City University System), Series C, 7.50% due 7/01/2010 $ 5,722
A NR* 930 (Community Memorial Hospital, Hamilton), 9% due 7/01/2005 952
BBB Baa1 2,475 (Consolidated City University Systems), Second Generation,
Series A, 5.75% due 7/01/2018 2,373
BBB Baa1 12,000 (Consolidated City University Systems), Series A, 5.75%
due 7/01/2013 11,654
BBB Baa1 6,500 (Consolidated City University Systems), Series A, 5.625%
due 7/01/2016 6,172
A1+ VMIG1++ 2,500 (Cornell University), VRDN, Series B, 3.30% due 7/01/2025 (e) 2,500
BBB+ Baa1 10,500 (Court Facilities Lease Bonds), Series A, 5.25% due
5/15/2021 9,225
BBB Baa1 10,500 (Department of Health), 5.50% due 7/01/2025 9,473
BBB+ Baa1 13,150 (Mental Health Services), Series B, 5.375% due 2/15/2026 11,649
BBB+ Baa1 5,000 Refunding (State University Educational Facilities),
Series A, 5.25% due 5/15/2015 4,539
BBB+ Baa1 12,000 Refunding (State University Educational Facilities),
Series B, 7% due 5/15/2016 12,738
AA Aa 4,650 Refunding (Vassar College), 5% due 7/01/2025 4,076
AAA Aaa 7,820 New York State Energy, Research and Development Authority,
Facilities Revenue Bonds (Consolidated Edison Company Inc.),
AMT, Series A, 6.75% due 1/15/2027 (c) 8,226
A- Aa 4,250 New York State Environmental Facilities Corporation, PCR (New
York City Municipal Water Finance Authority Project), Series E,
6.875% due 6/15/2014 4,756
BBB Baa 2,500 New York State Environmental Facilities Corporation, Solid
Waste Disposal Revenue Bonds (Occidental Petroleum Corp.),
AMT, Sub-Series B, 5.50% due 9/01/2003 2,484
BBB NR* 2,750 New York State Environmental Facilities Corporation, Special
Obligation Bonds (Riverbank State Park), 7.25% due 4/01/2012 2,944
New York State Local Government Assistance Corporation
Revenue Bonds:
A A 2,000 Refunding, Series C, 5.50% due 4/01/2017 1,932
A A 4,530 Refunding, Series C, 5% due 4/01/2021 3,963
A A 5,350 Refunding, Series E, 6% due 4/01/2014 5,517
A A 16,740 Refunding, Series E, 5% due 4/01/2021 14,883
A A 12,880 Series D, 5% due 4/01/2023 (i) 11,215
A1+ VMIG1++ 3,000 VRDN, Series F, 3.10% due 4/01/2025 (e) 3,000
New York State Medical Care Facilities Finance Agency
Revenue Bonds:
AAA Aaa 6,820 (Health Insurance Plan of Greater New York), Series B, 8.50%
due 12/01/1997 (a)(d) 7,316
AAA Aaa 4,000 (Long-Term Health Care-Insured Program), Series D, 6.50%
due 11/01/2015 (g) 4,198
AAA Aaa 2,500 (Mental Health Services), Series A, 5.25% due 8/15/2023 (c) 2,287
BBB+ Baa1 1,210 (Mental Health Services), Series B, 7.625% due 8/15/2017 1,346
BBB+ Baa1 1,075 (Mental Health Services), Series C, 7.30% due 2/15/2021 1,176
BBB+ Baa1 5,115 (Mental Health Services), Series D, 7.40% due 2/15/2018 5,669
AAA NR* 11,655 Refunding (Hospital & Nursing Home Insured Mortgage),
Series C, 6.40% due 8/15/2014 (f) 12,028
AAA Aaa 6,140 (Saint Francis Hospital Project), Series A, 7.625% due
11/01/2021 (b) 6,672
BBB Baa 12,200 (Security Hospital), Series A, 7.40% due 8/15/2021 13,099
New York State Mortgage Agency, Homeowner Mortgage
Revenue Bonds:
NR* Aa 14,025 AMT, Series 46, 6.65% due 10/01/2025 14,455
NR* Aa 5,000 Series 41-A, 6.45% due 10/01/2014 5,146
AAA Aaa 7,250 Series 43, 6.45% due 10/01/2017 (c) 7,505
AA- Aa 20,250 New York State Power Authority, General Purpose and
Revenue Bonds, Series Y, 6.75% due 1/01/2018 21,944
AAA Aaa 10,850 New York State Thruway Authority, Highway and Bridge Trust Fund,
UT, Series B, 6.25% due 4/01/2012 (b) 11,393
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
New York (concluded)
<S> <S> <C> <S> <C>
New York State Urban Development Corporation Revenue Bonds:
BBB Baa1 $ 1,500 (Alfred Technology Resource Income Project), 7.875% due
1/01/2000 (d) $ 1,701
BBB Baa1 28,500 (Correctional Facilities), Series 6, 5.375% due 1/01/2025 25,325
BBB Baa1 2,725 Refunding (Center for Industrial Innovation Project), 6.25% due
1/01/2009 2,872
BBB Baa1 1,700 Refunding (Center for Industrial Innovation Project), 5.50% due
1/01/2013 1,621
BBB Baa1 1,685 Refunding (Clarkson Center--Advance Materials), 5.50% due 1/01/2020 1,561
BBB Baa1 3,775 Refunding (Correctional Facilities), Series A, 5.50% due 1/01/2014 3,551
BBB Baa1 12,060 Refunding (Correctional Facilities), Series A, 5.25% due 1/01/2021 10,618
BBB Baa1 6,225 Refunding (State Facilities), 5.70% due 4/01/2020 5,921
BBB Baa1 2,250 Refunding (University Facility Grant), 5.50% due 1/01/2019 2,087
BBB Aaa 4,000 (State Facilities), 7.50% due 4/01/2001 (d) 4,597
Port Authority of New York and New Jersey, Consolidated Revenue Bonds:
AA- A1 3,345 AMT, Seventy-Sixth Series, 6.50% due 11/01/2026 3,483
AA- A1 1,000 Ninety-Second Series, 5% due 7/15/2018 905
AAA Aaa 13,000 One Hundred-Fourth Series, Third Installation, 4.75% due 1/15/2026 (a) 11,025
AA- A1 8,000 Sixty-Ninth Series, 7.125% due 6/01/2025 8,679
AAA Aaa 8,665 Suffolk County, New York, Water Authority, Waterworks Revenue Bonds,
5% due 6/01/2017 (c) 7,825
A1+ VMIG1++ 2,100 Syracuse, New York, IDA, Civic Facility Revenue Bonds (Multi-Modal--
Syracuse University Project), VRDN, 3.30% due 3/01/2023(e) 2,100
Triborough Bridge and Tunnel Authority, New York, Revenue Bonds:
BBB Baa1 5,150 (Convention Center Project), Series E, 7.25% due 1/01/2010 5,756
A+ Aa 5,250 (General Purpose), Series A, 4.75% due 1/01/2019 4,493
A+ Aa 33,630 (General Purpose), Series A, 5% due 1/01/2024 29,477
A+ Aa 5,000 (General Purpose), Series X, 6.50% due 1/01/2019 5,268
A- A1 13,050 Refunding (Special Obligations), Series B, 6.875% due 1/01/2015 14,233
Puerto Rico--2.4%
A Baa1 15,340 Puerto Rico Commonwealth Aqueduct and Sewer Authority Revenue
Refunding Bonds, 5% due 7/01/2019 13,533
<PAGE>
Total Investments (Cost--$542,642)--97.7% 558,136
Variation Margin on Futures Contracts+++--(0.1%) (431)
Other Assets Less Liabilities--2.4% 13,371
--------
Net Assets--100.0% $571,076
========
<FN>
*Not Rated.
(a)AMBAC Insured.
(b)FGIC Insured.
(c)MBIA Insured.
(d)Prerefunded.
(e)The interest rate is subject to change periodically based upon
prevailing market rates. The interest rate shown is the rate in
effect at March 31, 1996.
(f)FHA Insured.
(g)FSA Insured.
(h)The interst rate is subject to change periodically and inversely
based upon prevailing market rates. The interst rate shown is
the rate in effect at March 31, 1996.
(i)All or portion of security held as collateral in connection with
open financial futures contracts.
++Highest short-term rating by Moody's Investors Service, Inc.
+++Futures contracts sold as of March 31, 1996 were as follows
(in thousands):
Number of Expiration Value
Contracts Issue Date (Notes 1a & 1b)
575 US Treasury Bonds June 1996 $64,095
Total (Contract Price--$63,736) $64,095
=======
See Notes to Financial Statements.
</TABLE>
<TABLE>
FINANCIAL INFORMATION
Statement of Assets and Liabilities as of March 31, 1996
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$542,641,838)(Note 1a) $558,136,208
Cash 15,962
Receivables:
Securities sold $ 15,483,216
Interest 10,387,813
Beneficial interest sold 321,687 26,192,716
------------
Prepaid registration fees and other assets (Note 1e) 93,155
------------
Total assets 584,438,041
------------
<PAGE>
Liabilities: Payables:
Securities purchased 10,822,119
Beneficial interest redeemed 946,634
Dividends to shareholders (Note 1f) 476,444
Variation margin (Note 1b) 431,250
Investment adviser (Note 2) 267,972
Distributor (Note 2) 214,914 13,159,333
------------
Accrued expenses and other liabilities 203,203
------------
Total liabilities 13,362,536
------------
Net Assets: Net assets $571,075,505
============
Net Assets Class A Shares of beneficial interest, $.10 par value, unlimited
Consist of: number of shares authorized $ 203,201
Class B Shares of beneficial interest, $.10 par value, unlimited
number of shares authorized 4,345,705
Class C Shares of beneficial interest, $.10 par value, unlimited
number of shares authorized 39,637
Class D Shares of beneficial interest, $.10 par value, unlimited
number of shares authorized 578,638
Paid-in capital in excess of par 570,198,182
Accumulated realized capital losses on investments--net (Note 5) (5,831,238)
Accumulated distributions in excess of realized capital gains on
investments--net (13,593,958)
Unrealized appreciation on investments--net 15,135,338
------------
Net assets $571,075,505
============
Net Asset Class A--Based on net assets of $22,455,743 and 2,032,008 shares
Value: of beneficial interest outstanding $ 11.05
============
Class B--Based on net assets of $480,316,383 and 43,457,052 shares
of beneficial interest outstanding $ 11.05
============
Class C--Based on net assets of $4,381,922 and 396,375 shares of
beneficial interest outstanding $ 11.06
============
Class D--Based on net assets of $63,921,457 and 5,786,380 shares
of beneficial interest outstanding $ 11.05
============
<PAGE>
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (continued)
<TABLE>
Statement of Operations for the Six Months Ended March 31, 1996
<S> <S> <C>
Investment Income Interest and amortization of premium and discount earned $ 17,714,959
(Note 1d):
Expenses: Investment advisory fees (Note 2) 1,618,524
Account maintenance and distribution fees--Class B (Note 2) 1,319,336
Transfer agent fees--Class B (Note 2) 136,628
Printing and shareholder reports 51,087
Accounting services (Note 2) 46,459
Registration fees (Note 1e) 35,819
Professional fees 33,851
Account maintenance fees--Class D (Note 2) 18,874
Custodian fees 17,928
Trustees' fees and expenses 14,211
Account maintenance and distribution fees--Class C (Note 2) 12,686
Transfer agent fees--Class D (Note 2) 8,356
Pricing fees 7,105
Transfer agent fees--Class A (Note 2) 5,025
Transfer agent fees--Class C (Note 2) 1,138
Other 6,777
------------
Total expenses 3,333,804
------------
Investment income--net 14,381,155
------------
Realized & Realized gain on investments--net 6,721,494
Unrealized Gain Change in unrealized appreciation on investments--net (5,582,871)
(Loss) on ------------
Investments--Net Net Increase in Net Assets Resulting from Operations $ 15,519,778
(Notes 1b, 1d & 3): ============
See Notes to Financial Statements.
</TABLE>
<PAGE>
FINANCIAL INFORMATION (continued)
<TABLE>
Statements of Changes in Net Assets
<CAPTION>
For the Six For the Year
Months Ended Ended
March 31, September 30,
Increase (Decrease) in Net Assets: 1996 1995
<S> <S> <C> <C>
Operations: Investment income--net $ 14,381,155 $ 31,982,147
Realized gain (loss) on investments--net 6,721,494 (12,552,800)
Change in unrealized appreciation on investments--net (5,582,871) 20,412,080
------------ ------------
Net increase in net assets resulting from operations 15,519,778 39,841,427
------------ ------------
Dividends to Investment income--net:
Shareholders Class A (616,256) (1,357,050)
(Note 1f): Class B (12,679,865) (30,476,605)
Class C (99,450) (77,075)
Class D (985,584) (71,417)
------------ ------------
Net decrease in net assets resulting from dividends
to shareholders (14,381,155) (31,982,147)
------------ ------------
Beneficial Interest Net decrease in net assets derived from beneficial
Transactions interest transactions (24,457,749) (87,106,114)
(Note 4): ------------ ------------
Net Assets: Total decrease in net assets (23,319,126) (79,246,834)
Beginning of period 594,394,631 673,641,465
------------ ------------
End of period $571,075,505 $594,394,631
============ ============
See Notes to Financial Statements.
</TABLE>
<PAGE>
FINANCIAL INFORMATION (continued)
<TABLE>
Financial Highlights
<CAPTION>
Class A
For the
Six
The following per share data and ratios have been derived Months
from information provided in the financial statements. Ended
March 31, For the Year Ended September 30,
Increase (Decrease) in Net Asset Value: 1996 1995 1994 1993 1992
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 11.04 $ 10.88 $ 12.46 $ 11.77 $ 11.22
Operating -------- -------- -------- -------- --------
Performance: Investment income--net .30 .61 .64 .70 .72
Realized and unrealized gain (loss) on
investments--net .01 .16 (1.25) .80 .55
-------- -------- -------- -------- --------
Total from investment operations .31 .77 (.61) 1.50 1.27
-------- -------- -------- -------- --------
Less dividends and distributions:
Investment income--net (.30) (.61) (.64) (.70) (.72)
Realized gain on investments--net -- -- (.11) (.11) --
In excess of realized gainon
investments--net -- -- (.22) -- --
-------- -------- -------- -------- --------
Total dividends and distributions (.30) (.61) (.97) (.81) (.72)
-------- -------- -------- -------- --------
Net asset value, end of period $ 11.05 $ 11.04 $ 10.88 $ 12.46 $ 11.77
======== ======== ======== ======== ========
Total Investment Based on net asset value per share 2.76%+++ 7.37% (5.17%) 13.24% 11.77%
Return:** ======== ======== ======== ======== ========
Ratios to Average Expenses .66%* .67% .63% .64% .65%
Net Assets: ======== ======== ======== ======== ========
Investment income--net 5.30%* 5.67% 5.52% 5.80% 6.28%
======== ======== ======== ======== ========
Supplemental Net assets, end of period (in thousands) $ 22,456 $ 23,304 $ 28,301 $ 31,976 $ 18,973
Data: ======== ======== ======== ======== ========
Portfolio turnover 55.18% 181.21% 107.96% 38.31% 35.90%
======== ======== ======== ======== ========
<FN>
*Annualized.
**Total investment returns exclude the effects of sales loads.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
<PAGE>
FINANCIAL INFORMATION (continued)
<TABLE>
Financial Highlights (continued)
<CAPTION>
Class B
For the
Six
The following per share data and ratios have been derived Months
from information provided in the financial statements. Ended
March 31, For the Year Ended September 30,
Increase (Decrease) in Net Asset Value: 1996 1995 1994 1993 1992
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 11.04 $ 10.88 $ 12.46 $ 11.77 $ 11.23
Operating -------- -------- -------- -------- --------
Performance: Investment income--net .27 .56 .58 .64 .67
Realized and unrealized gain (loss) on
transactions--net .01 .16 (1.25) .80 .54
-------- -------- -------- -------- --------
Total from investment operations .28 .72 (.67) 1.44 1.21
-------- -------- -------- -------- --------
Less dividends and distributions:
Investment income--net (.27) (.56) (.58) (.64) (.67)
Realized gain on investments--net -- -- (.11) (.11) --
In excess of realized gain on investments--net -- -- (.22) -- --
-------- -------- -------- -------- --------
Total dividends and distributions (.27) (.56) (.91) (.75) (.67)
-------- -------- -------- -------- --------
Net asset value, end of period $ 11.05 $ 11.04 $ 10.88 $ 12.46 $ 11.77
======== ======== ======== ======== ========
Total Investment Based on net asset value per share 2.50%+++ 6.83% (5.66%) 12.67% 11.12%
Return:** ======== ======== ======== ======== ========
Ratios to Average Expenses 1.17%* 1.18% 1.14% 1.14% 1.16%
Net Assets: ======== ======== ======== ======== ========
Investment income--net 4.79%* 5.16% 5.02% 5.32% 5.79%
======== ======== ======== ======== ========
Supplemental Net assets, end of period (in thousands) $480,316 $564,963 $645,341 $733,981 $616,590
Data: ======== ======== ======== ======== ========
Portfolio turnover 55.18% 181.21% 107.96% 38.31% 35.90%
======== ======== ======== ======== ========
<FN>
*Annualized.
**Total investment returns exclude the effects of sales loads.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
<PAGE>
FINANCIAL INFORMATION (concluded)
<TABLE>
Financial Highlights (concluded)
<CAPTION>
Class C Class D
For the For the For the For the
Six Period Six Period
The following per share data and ratios have been derived Months Oct. 21, Months Oct. 21,
from information provided in the financial statements. Ended 1994++ to Ended 1994++ to
March 31, Sept. 30, March 31, Sept. 30,
Increase (Decrease) in Net Asset Value: 1996 1995 1996 1995
<S> <S> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 11.04 $ 10.76 $ 11.03 $ 10.76
Operating -------- -------- -------- --------
Performance: Investment income--net .26 .51 .29 .56
Realized and unrealized gain on investments--net .02 .28 .02 .27
-------- -------- -------- --------
Total from investment operations .28 .79 .31 .83
-------- -------- -------- --------
Less dividends from investment income--net (.26) (.51) (.29) (.56)
-------- -------- -------- --------
Total dividends (.26) (.51) (.29) (.56)
-------- -------- -------- --------
Net asset value, end of period $ 11.06 $ 11.04 $ 11.05 $ 11.03
======== ======== ======== ========
Total Investment Based on net asset value per share 2.55%+++ 7.58%+++ 2.81%+++ 8.00%+++
Return:** ======== ======== ======== ========
Ratios to Average Expenses 1.27%* 1.27%* .76%* .76%*
Net Assets: ======== ======== ======== ========
Investment income--net 4.69%* 4.91%* 5.21%* 5.46%*
======== ======== ======== ========
Supplemental Net assets, end of period (in thousands) $ 4,382 $ 3,556 $ 63,922 $ 2,572
Data: ======== ======== ======== ========
Portfolio turnover 55.18% 181.21% 55.18% 181.21%
======== ======== ======== ========
<FN>
*Annualized.
**Total investment returns exclude the effects of sales loads.
+++Aggregate total investment return.
++Commencement of Operations.
See Notes to Financial Statements.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
Merrill Lynch New York Municipal Bond Fund (the "Fund") is part of
the Merrill Lynch Multi-State Municipal Series Trust (the "Trust").
The Fund is registered under the Investment Company Act of 1940 as a
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 Fund offers four classes of shares
under the Merrill Lynch Select Pricing SM System. Class A and Class
D Shares are sold with a front-end sales charge. Class B and Class C
Shares 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 Fund.
(a) Valuation of investments--Municipal bonds and other portfolio
securities are traded primarily in the over-the-counter municipal
bond and money markets and are valued at the last available bid
price or yield equivalents as obtained from one or more dealers that
make markets in the securities. Financial futures contracts and
options thereon, which are traded on exchanges, are valued at their
last sale price as of the close of such exchanges. Short-term
investments with a remaining maturity of sixty days or less are
valued at amortized cost, which approximates market value.
Securities and assets for which market quotations are not readily
available are valued at fair value as determined in good faith by or
under the direction of the Board of Trustees of the Trust, including
valuations furnished by a pricing service retained by the Trust,
which may utilize a matrix system for valuations. The procedures of
the pricing service and its valuations are reviewed by the officers
of the Trust under the general supervision of the Trustees.
(b) Derivative financial instruments--The Fund may engage in various
portfolio strategies to seek to increase its return by hedging its
portfolio against adverse movements in the debt markets. Losses may
arise due to changes in the value of the contract or if the
counterparty does not perform under the contract.
<PAGE>
* Financial futures contracts--The Fund may purchase or sell interest
rate futures contracts and options on such futures contracts for the
purpose of hedging the market risk on existing securities or the
intended purchase of securities. Futures contracts are contracts for
delayed delivery of securities at a specific future date and at a
specific price or yield. Upon entering into a contract, the Fund
deposits and maintains as collateral such initial margin as required
by the exchange on which the transaction is effected. Pursuant to
the contract, the Fund agrees to receive from or pay to the broker
an amount of cash equal to the daily fluctuation in value of the
contract. Such receipts or payments are known as variation margin
and are recorded by the Fund as unrealized gains or losses. When the
contract is closed, the Fund records a realized gain or loss equal
to the difference between the value of the contract at the time it
was opened and the value at the time it was closed.
(c) Income taxes--It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute substantially all of its
taxable income to its shareholders. Therefore, no Federal income tax
provision is required.
(d) Security transactions and investment income--Security
transactions are recorded on the dates the transactions are entered
into (the trade dates). Interest income is recognized on the accrual
basis. Discounts and market premiums are amortized into interest
income. Realized gains and losses on security transactions are
determined on the identified cost basis.
(e) Prepaid registration fees--Prepaid registration fees are charged
to expense as the related shares are issued.
(f) Dividends and distributions--Dividends from net investment
income are declared daily and paid monthly. Distributions of capital
gains are recorded on the ex-dividend dates. Distributions in excess
of realized capital gains are due primarily to differing tax
treatments for futures transactions and post-October losses.
2. Investment Advisory Agreement and
Transactions with Affiliates:
The Fund has entered into an Investment Advisory Agreement with Fund
Asset Management, L.P. ("FAM"). The general partner of FAM is
Princeton Services, Inc. ("PSI"), an indirect wholly-owned
subsidiary of Merrill Lynch & Co., Inc. ("ML & Co."), which is the
limited partner. The Fund 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.
<PAGE>
FAM is responsible for the management of the Fund's portfolio and
provides the necessary personnel, facilities, equipment and certain
other services necessary to the operations of the Fund. For such
services, the Fund pays a monthly fee based upon the average daily
value of the Fund's net assets at the following annual rates: 0.55%
of the Fund's average daily net assets not exceeding $500 million;
0.525% of average daily net assets in excess of $500 million but not
exceeding $1 billion; and 0.50% of average daily net assets in
excess of $1 billion. The Investment Advisory Agreement obligates
FAM to reimburse the Fund to the extent the Fund's expenses
(excluding interest, taxes, distribution fees, brokerage fees and
commissions, and extra-ordinary items) exceed 2.5% of the Fund's
first $30 million of average daily net assets, 2.0% of the next $70
million of average daily net assets, and 1.5% of the average daily
net assets in excess thereof. FAM's obligation to reimburse the Fund
is limited to the amount of the management fee. No fee payment will
be made to FAM during any fiscal year which will cause such expenses
to exceed the expense limitation at the time of such payment.
Pursuant to the distribution plans (the "Distribution Plans")
adopted by the Fund in accordance with Rule 12b-1 under the
Investment Company Act of 1940, the Fund pays the Distributor an
ongoing account maintenance fee and a distribution fee. These fees
are accrued daily and paid monthly, at the annual rates based upon
the average daily net assets of the shares as follows:
Account
Maintenance Distribution
Fee Fee
Class B 0.25% 0.25%
Class C 0.25% 0.35%
Class D 0.10% --
Pursuant to a sub-agreement with the Distributor, Merrill Lynch,
Pierce, Fenner, and Smith Inc. ("MLPF&S"), a subsidiary of ML & Co.,
also provides account maintenance and distribution services to the
Fund. The ongoing account maintenance fee compensates the
Distributor and MLPF&S for providing account maintenance services to
Class B, 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 March 31, 1996, MLFD earned underwriting
discounts and MLPF&S earned dealer concessions on the sales of the
Fund's Class A and Class D Shares as follow:
<PAGE>
MLFD MLPF&S
Class A $546 $4,720
Class D $810 $9,073
For the six months ended March 31, 1996, MLPF&S received contingent
deferred sales charges of $312,590 and $1,547 relating to
transactions in Class B and Class C Shares, respectively.
Merrill Lynch Financial Data Services, Inc. ("MLFDS"), a
wholly-owned subsidiary of ML & Co., is the Fund's transfer agent.
Accounting services are provided to the Fund by FAM at cost.
Certain officers and/or trustees of the Fund are officers and/or
directors of FAM, MLPF&S, PSI, MLFDS, MLFD, and/or ML & Co.
NOTES TO FINANCIAL STATEMENTS (concluded)
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the six months ended March 31, 1996 were $311,256,380 and
$331,673,355, respectively.
Net realized and unrealized gains (losses) as of March 31, 1996 were
as follows:
Realized Unrealized
Gains (Losses) Gains (Losses)
Long-term investments $ 7,210,751 $ 15,494,370
Short-term investments (813) --
Financial futures contracts (488,444) (359,032)
------------ ------------
Total $ 6,721,494 $ 15,135,338
============ ============
As of March 31, 1996, net unrealized appreciation for Federal income
tax purposes aggregated $15,494,370, of which $22,581,168 related to
appreciated securities and $7,086,798 related to depreciated
securities. The aggregate cost of investments at March 31, 1996 for
Federal income tax purposes was $542,641,838.
<PAGE>
4. Beneficial Interest Transactions:
Net decrease in net assets derived from beneficial interest
transactions was $24,457,749 and $87,106,114 for the six months
ended March 31, 1996 and the year ended September 30, 1995,
respectively.
Transactions in shares of beneficial interest for each class were as
follows:
Class A Shares for the
Six Months Ended Dollar
March 31, 1996 Shares Amount
Shares sold 82,337 $ 935,524
Shares issued to share-
holders in reinvestment
of dividends. 33,758 381,586
------------ ------------
Total issued 116,095 1,317,110
Shares redeemed (195,187) (2,205,066)
------------ ------------
Net decrease (79,092) $ (887,956)
============ ============
Class A Shares for the Year Dollar
Ended September 30, 1995 Shares Amount
Shares sold 310,937 $ 3,344,063
Shares issued to share-
holders in reinvestment
of dividends 76,814 829,561
------------ ------------
Total issued 387,751 4,173,624
Shares redeemed (878,791) (9,342,889)
------------ ------------
Net decrease (491,040) $ (5,169,265)
============ ============
Class B Shares for the Six Dollar
Months Ended March 31, 1996 Shares Amount
Shares sold 1,877,980 $ 21,215,138
Shares issued to share-
holders in reinvestment
of dividends 531,601 6,008,883
------------ ------------
Total issued 2,409,581 27,224,021
Automatic conversion
of shares (5,681,642) (64,071,045)
Shares redeemed (4,444,126) (50,161,582)
------------ ------------
Net decrease (7,716,187) $(87,008,606)
============ ============
<PAGE>
Class B Shares for the Year Dollar
Ended September 30, 1995 Shares Amount
Shares sold 3,667,182 $ 39,752,322
Shares issued to share-
holders in reinvestment
of dividends 1,322,739 14,277,855
------------ ------------
Total issued 4,989,921 54,030,177
Automatic conversion
of shares (18,699) (201,021)
Shares redeemed (13,124,398) (141,756,812)
------------ ------------
Net decrease (8,153,176) $(87,927,656)
============ ============
Class C Shares for the Six Dollar
Months Ended March 31, 1996 Shares Amount
Shares sold 139,940 $ 1,586,097
Shares issued to share-
holders in reinvestment
of dividends 5,558 62,847
------------ ------------
Total issued 145,498 1,648,944
Shares redeemed (71,184) (809,720)
------------ ------------
Net increase 74,314 $ 839,224
============ ============
Class C Shares for the Period Dollar
Oct. 21, 1994++ to Sept. 30, 1995 Shares Amount
Shares sold 350,647 $ 3,811,029
Shares issued to share-
holders in reinvestment
of dividends 4,349 47,691
------------ ------------
Total issued 354,996 3,858,720
Shares redeemed (32,935) (360,612)
------------ ------------
Net increase 322,061 $ 3,498,108
============ ============
<PAGE>
[FN]
++Commencement of Operations.
Class D Shares for the Six Dollar
Months Ended March 31, 1996 Shares Amount
Shares sold 116,819 $ 1,312,573
Automatic conversion
of shares 5,685,184 64,071,045
Shares issued to share-
holders in reinvestment
of dividends 31,018 351,233
------------ ------------
Total issued 5,833,021 65,734,851
Shares redeemed (279,743) (3,135,262)
------------ ------------
Net increase 5,553,278 $ 62,599,589
============ ============
Class D Shares for the Period Dollar
Oct. 21, 1994++ to Sept. 30, 1995 Shares Amount
Shares sold 257,719 $ 2,747,387
Automatic conversion
of shares 18,714 201,021
Shares issued to share-
holders in reinvestment
of dividends 2,989 32,646
------------ ------------
Total issued 279,422 2,981,054
Shares redeemed (46,320) (488,355)
------------ ------------
Net increase 233,102 $ 2,492,699
============ ============
[FN]
++Commencement of Operations.
5. Capital Loss Carryforward:
At September 30, 1995, the Fund had a net capital loss carryforward
of approximately $21,350,000, all of which expires in 2003. This
amount will be available to offset like amounts of any future
taxable gains.
<PAGE>
OFFICERS AND TRUSTEES
Arthur Zeikel, President and Trustee
James H. Bodurtha, Trustee
Herbert I. London, Trustee
Robert R. Martin, Trustee
Joseph L. May, Trustee
Andre F. Perold, Trustee
Terry K. Glenn, Executive Vice President
Donald C. Burke, Vice President
Vincent R. Giordano, Vice President
Kenneth A. Jacob, Vice President
Gerald M. Richard, Treasurer
Jerry Weiss, Secretary
Custodian
State Street Bank & Trust Company
P.O. Box 351
Boston, MA 02101
Transfer Agent
Merrill Lynch Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 637-3863
