MERRILL LYNCH
EUROFUND
FUND LOGO
Quarterly Report
January 31, 1995
This report is not authorized for use as an offer of sale or a
solicitation of an offer to buy shares of the Fund unless
accompanied or preceded by the Fund's current prospectus. Past
performance results shown in this report should not be considered a
representation of future performance. Investment return and
principal value of shares will fluctuate so that shares, when
redeemed, may be worth more or less than their original cost.
Merrill Lynch
EuroFund
Box 9011
Princeton, NJ
08543-9011
MERRILL LYNCH EUROFUND
<PAGE>
PORTFOLIO INFORMATION
Pie graph depicting Percentage of Stocks & Convertible Warrants As
of January 31, 1995
Netherlands 17.6%
Austria 0.9%
Belgium 1.5%
Finland 6.5%
Spain 7.5%
France 10.0%
Germany 11.8%
Switzerland 6.1%
Sweden 5.7%
Italy 3.8%
Norway 1.3%
Ireland 0.4%
Turkey 0.3%
United Kingdom 26.6%
European Stock Market Performance
Bar graph depicting Total Return for the Three-Month Period Ended
January 31, 1995 In US Dollars*
Spain -7.9%
Finland -7.7%
France -6.0%
United Kingdom -5.0%
Austria -3.5%
Germany -3.3%
Sweden -2.4%
Netherlands -1.0%
Belgium -0.3%
Switzerland -0.3%
Ireland +0.2%
Italy +1.2%
Norway +5.7%
Source: Financial Times--Actuaries Index.
[FN]
*For the three-month period ended January 31, 1995, total investment
return for the Financial Times--Actuaries Europe Index was -3.60%.
<PAGE>
DEAR SHAREHOLDER
During the quarter ended January 31, 1995, European stock markets
declined slightly in local currency terms. A small rise in the US
dollar reduced the total return of the unmanaged Financial Times--
Actuaries Europe Index to -3.60% for the quarter. Merrill Lynch
EuroFund's Class A, B, C, and D Shares had total returns of -5.41%,
-5.59%, -5.66% and -5.47%, respectively. (Results do not reflect
deduction of sales charges, and would be lower if sales charges were
included. Complete performance information can be found on pages 4
and 5 of this report to shareholders.)
The key reason the Fund underperformed the Europe index for the
quarter ended January 31, 1995 was its continued heavy exposure to
cyclical stocks, which performed poorly relative to defensive and
financial issues. Late in the January quarter, the cyclical sectors
in the market began to outperform again, as is customary at the
start of the year. Strong fundamentals and low valuations suggest
that this outperformance should continue. The two major factors
which caused market weakness in the October quarter--higher interest
rates and a lower US dollar--were less problematic in the January
quarter. Bond yields fell in most countries, and the US dollar rose
relative to other currencies following the November 1994 US election
and further interest rate hikes.
Economic growth in Europe continued at a strong pace and has become
increasingly broad-based and therefore more sustainable. Late in the
January quarter, there was some limited evidence of a slowdown in
the rate of growth, which is exactly what equity investors would
prefer: consistent moderate growth rather than economic overheating
followed by recession.
Inflation data for the last few months have generally been in line
with expectations. Prices at the producer level have been moving up
at a swifter pace, but this has not been reflected in consumer price
indexes. The belief that inflation is under control, that central
banks are taking preemptive monetary policy action and that
economies are not overheating has allowed bond yields to fall
substantially, greatly improving the valuation base for equities.
With so much going right, one might wonder why markets are not
responding. The answer is that they have been held back by the
Mexican peso crisis and the potential impact of the Kobe earthquake.
The last few weeks have seen a noticeable improvement in investor
sentiment which, given the good fundamentals, could be the catalyst
for a sustained rally.
Investment Strategy
European equity market valuations are currently well below long-term
averages, and with the rally in bonds, equity markets are fairly
priced against competing assets. With sentiment now improving, it
seems likely that markets will move upward. This process is also
being aided by increasing corporate activity, which is improving
liquidity flows and investor sentiment.
<PAGE>
Our strategy remains essentially unchanged. The Fund's currency
exposure is unhedged. While fundamentals would suggest a further
rise in the US currency, in our view the potential is unlikely to be
significant enough to justify hedging. We are overweighted in
Germany, the Netherlands, Finland, Sweden and Spain, and
underweighted in France, the United Kingdom and Switzerland. The
cyclical industries such as automobiles, chemicals, paper and
engineering remain our areas of concentration. However, it is likely
that we will reduce these during periods of share price strength
which we expect as the year progresses. We still find defensive and
consumer stocks expensive and thus have very limited exposure. We
are reducing the financial weighting into the strength precipitated
by falling bond yields. The Fund's ten largest holdings have changed
little and reflect the cyclical bias in the portfolio. Given the
positive market outlook, the Fund remains effectively fully
invested.
In Conclusion
While we have a positive investment outlook, as always there are a
number of concerns. The principal concern is that the US economy may
suffer a hard landing and growth may fall off very rapidly, having a
detrimental impact on global growth. The other main concern is a
major depreciation of the yen, which is very overvalued, in our
opinion. Much of Europe's economic growth has come from its improved
competitive position relative to Japan. Should the currency
advantage be significantly eroded, European export growth could slow
rapidly. On balance, we do not attribute high probabilities to these
two major potential risks at this time.
We appreciate your ongoing interest in Merrill Lynch EuroFund, and
we look forward to assisting you with your financial needs in the
months and years to come.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Adrian C. Holmes)
Adrian C. Holmes
Vice President and Portfolio Manager
February 28, 1995
<PAGE>
OFFICERS AND TRUSTEES
Arthur Zeikel, President and Trustee
Donald Cecil, Trustee
Edward H. Meyer, Trustee
Charles C. Reilly, Trustee
Richard R. West, Trustee
Edward D. Zinbarg, Trustee
Terry K. Glenn, Executive Vice President
Norman R. Harvey, Senior Vice President
Alan J. Albert, Vice President
Donald C. Burke, Vice President
Adrian C. Holmes, Vice President and
Portfolio Manager
Gerald M. Richard, Treasurer
Robert Harris, Secretary
Custodian
Brown Brothers Harriman & Co.
40 Water Street
Boston, Massachusetts 02109
Transfer Agent
Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, Florida 32246-6484
(800) 637-3863
PERFORMANCE DATA
About Fund Performance
Since October 21, 1994, investors have been able to purchase shares
of the Fund through the Merrill Lynch Select Pricing SM System, which
offers four pricing alternatives:
* Class A Shares incur a maximum initial sales charge (front-end
load) of 5.25% and bear no ongoing distribution or account
maintenance fees. Class A Shares are available only to eligible
investors.
* Class B Shares are subject to a maximum contingent deferred sales
charge of 4% if redeemed during the first year, decreasing 1% each
year thereafter to 0% after the fourth year. In addition, Class
B Shares are subject to a distribution fee of 0.75% and an account
maintenance fee of 0.25%. These shares automatically convert
to Class D Shares after 8 years.
<PAGE>
* Class C Shares are subject to a distribution fee of 0.75% and an
account maintenance fee of 0.25%. In addition, Class C Shares
are subject to a 1% contingent deferred sales charge if redeemed
within one year of purchase.
* Class D Shares incur a maximum initial sales charge of 5.25% and
an account maintenance fee of 0.25% (but no distribution fee).
Performance data for the Fund's Class A and Class B Shares are
presented in the "Performance Summary," "Recent Performance Results"
and "Average Annual Total Return" tables below and on page 5. Data
for Class C and Class D Shares are also presented in the "Recent
Performance Results" and "Aggregate Total Return" tables below and
on page 5.
The "Recent Performance Results" table shows investment results
before the deduction of any sales charges for Class A and Class B
Shares for the 12-month and 3-month periods ended January 31, 1995
and for Class C and Class D Shares for the since inception and 3-
month periods ended January 31, 1995. All data in this table assume
imposition of the actual total expenses incurred by each class of
shares during the relevant period.
None of the past results shown should be considered a representation
of future performance. Investment return and principal value of
shares will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost. Dividends paid to each class
of shares will vary because of the different levels of account
maintenance, distribution and transfer agency fees applicable to
each class, which are deducted from the income available to be paid
to shareholders.
Average Annual Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 12/31/94 +4.29% -1.19%
Five Years Ended 12/31/94 +8.14 +6.98
Inception (10/26/88)
through 12/31/94 +10.57 +9.61
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
<PAGE>
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 12/31/94 +3.24% -0.43%
Five Years Ended 12/31/94 +7.04 +7.04
Inception (1/30/87) through 12/31/94 +6.97 +6.97
[FN]
*Maximum contingent deferred sales charge is 4% and is reduced to 0%
after 4 years.
**Assuming payment of applicable contingent deferred sales charge.
Aggregate Total Return
% Return % Return
Without CDSC With CDSC**
Class C Shares*
Inception (10/21/94)
through 12/31/94 -3.07% -3.93%
[FN]
*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*
Inception (10/21/94)
through 12/31/94 -2.93% -8.02%
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
PERFORMANCE DATA (concluded)
<PAGE>
<TABLE>
Performance Summary--Class A Shares
<CAPTION>
Net Asset Value Capital Gains Dividends
Period Covered Beginning Ending Distributed Paid* % Change**
<S> <C> <C> <C> <C> <C>
10/26/88--12/31/88 $ 8.83 $ 8.83 $0.023 -- + 0.26%
1989 8.83 10.99 -- $0.087 +25.48
1990 10.99 10.53 -- 0.230 - 2.23
1991 10.53 11.75 -- 0.451 +16.20
1992 11.75 11.12 -- -- - 5.36
1993 11.12 14.67 -- -- +31.92
1994 14.67 13.62 0.737 0.889 + 4.29
1/1/95--1/31/95 13.62 13.44 -- -- - 1.32
------ ------
Total $0.760 Total $1.657
Cumulative total return as of 1/31/95: +83.63%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures assume reinvestment of all dividends and capital gains
distributions at net asset value on the ex-dividend date, and do not
include sales charge; results would be lower if sales charge was
included.
</TABLE>
<TABLE>
Performance Summary--Class B Shares
<CAPTION>
Net Asset Value Capital Gains Dividends
Period Covered Beginning Ending Distributed Paid* % Change**
<S> <C> <C> <C> <C> <C>
1/30/87--12/31/87 $10.00 $ 8.61 $0.737 $0.055 - 5.98%
1988 8.61 8.80 0.023 0.126 + 3.98
1989 8.80 10.85 -- 0.071 +24.13
1990 10.85 10.38 -- 0.124 - 3.26
1991 10.38 11.59 -- 0.332 +15.08
1992 11.59 10.85 -- -- - 6.38
1993 10.85 14.17 -- -- +30.60
1994 14.17 12.95 0.737 0.889 + 3.24
1/1/95--1/31/95 12.95 12.77 -- -- - 1.39
------ ------
Total $1.497 Total $1.597
Cumulative total return as of 1/31/95: +68.17%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures assume reinvestment of all dividends and capital gains
distributions at net asset value on the ex-dividend date, and do not
reflect deduction of any sales charge; results would be lower if
sales charge was deducted.
</TABLE>
<PAGE>
<TABLE>
Recent Performance Results*
<CAPTION>
12 Month 3 Month
1/31/95 10/31/94 1/31/94++ % Change+ % Change
<S> <C> <C> <C> <C> <C>
ML EuroFund Class A Shares $13.44 $15.96 $15.68 - 9.50%(1) -11.08%(1)
ML EuroFund Class B Shares 12.77 15.28 15.13 -10.64(1) -11.51(1)
ML EuroFund Class C Shares 12.76 15.28 15.08 -10.41(1) -11.58(1)
ML EuroFund Class D Shares 13.43 15.96 15.75 - 9.96(1) -11.15(1)
ML EuroFund Class A Shares--Total Return - 3.72(2) - 5.41(2)
ML EuroFund Class B Shares--Total Return - 4.65(2) - 5.59(2)
ML EuroFund Class C Shares--Total Return - 4.41(2) - 5.66(2)
ML EuroFund Class D Shares--Total Return - 4.21(2) - 5.47(2)
<FN>
*Investment results do not reflect sales charges; results shown
would be lower if a sales charge was included.
++Investment results shown for Class C and Class D Shares are since
inception (10/21/94).
(1)Percent change includes reinvestment of $0.737 per share capital
gains distributions.
(2)Percent change includes reinvestment of $0.889 ordinary income
dividends and $0.737 per share capital gains distributions.
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS
<CAPTION>
Percent of
Industry Shares Held Stocks & Convertible Warrants Cost Value Net Assets
<S> <C> <S> <C> <C> <C>
Austria
Utilities 183,950 Verbund Oesterreichische Elekrizitats AG $ 10,223,316 $ 10,345,563 0.9%
Total Investments in Austria 10,223,316 10,345,563 0.9
Belgium
Banking 55,900 Generale de Banque S.A. 13,690,463 14,384,917 1.3
Building Materials 16,400 Glaverbel S.A. (Ordinary) 2,180,613 2,355,616 0.2
Total Investments in Belgium 15,871,076 16,740,533 1.5
<PAGE>
Finland
Banking 9,921,672 Kansallis-Osake-Pankki 17,104,769 10,033,035 0.9
2,116,800 Unitas Bank Ltd. 5,714,168 5,240,373 0.5
-------------- -------------- -------
22,818,937 15,273,408 1.4
Metals & Mining 687,700 Outokumpu OY 9,764,165 12,984,999 1.2
Paper & Forest 1,743,700 Enso-Gutzeit OY 'OR' (Ordinary)(Registered) 12,175,093 14,267,135 1.3
Products 362,400 Metsa Serla OY 13,741,677 14,369,789 1.3
801,925 Repola OY S 12,642,630 14,132,319 1.3
-------------- -------------- -------
38,559,400 42,769,243 3.9
Total Investments in Finland 71,142,502 71,027,650 6.5
France
Automobiles & 154,050 Peugeot S.A. 18,500,382 20,090,943 1.8
Equipment
Banking & 203,850 Compagnie de Suez 11,270,746 8,951,959 0.8
Financial 176,605 Compagnie Financiere de Paribas 12,749,180 10,844,343 1.0
-------------- -------------- -------
24,019,926 19,796,302 1.8
Chemicals 505,700 Rhone Poulenc S.A. 12,684,730 12,147,138 1.1
Diversified 177,431 Compagnie de Fives-Lille 9,488,305 14,945,447 1.3
Companies
Financial Services 34,763 EuraFrance S.A. 10,200,148 10,212,413 0.9
Insurance 138,950 GAN S.A. 11,816,541 4,997,255 0.4
Oil & Related 141,750 Societe Nationale Elf Aquitane 9,972,415 10,233,475 0.9
Packaging 248,200 Pechiney International S.A. 6,917,208 6,906,190 0.6
<PAGE>
Utilities 121,332 Compagnie Generale des Eaux 13,780,567 10,863,153 1.0
Total Investments in France 117,380,222 110,192,316 9.8
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued)
<CAPTION>
Percent of
Industry Shares Held Stocks & Convertible Warrants Cost Value Net Assets
<S> <C> <S> <C> <C> <C>
Germany
Automobiles & 55,000 Continental AG (Warrants)(a) $ 3,126,602 $ 2,453,585 0.2%
Equipment 202,495 Volkswagen AG (Preferred)(Warrants)(a) 20,029,386 16,844,693 1.5
-------------- -------------- -------
23,155,988 19,298,278 1.7
Capital Goods 321,783 Kloeckner Werke AG 14,985,368 25,965,564 2.3
65,654 Mannesmann AG 17,858,920 17,586,124 1.6
37,330 Thyssen AG 5,764,287 7,151,060 0.6
118,808 Thyssen AG (Warrants)(a) 3,460,062 7,373,376 0.7
-------------- -------------- -------
42,068,637 58,076,124 5.2
Chemicals 115,760 BASF AG 19,365,293 24,225,835 2.2
50,200 Bayer AG 9,932,780 11,576,002 1.0
-------------- -------------- -------
29,298,073 35,801,837 3.2
Diversified 135,000 Veba AG (Warrants)(a) 5,811,946 5,110,215 0.5
Companies
Insurance 6,800 Munich Reinsurance Co. 12,200,048 11,241,882 1.0
Total Investments in Germany 112,534,692 129,528,336 11.6
Ireland
Banking 747,700 Allied Irish Banks PLC (Ordinary) 3,110,709 3,008,571 0.3
<PAGE>
Building Materials 252,000 CRH PLC 837,980 1,395,218 0.1
Total Investments in Ireland 3,948,689 4,403,789 0.4
Italy
Building & 2,571,700 Filippo Fochi S.p.A. 8,169,638 4,033,883 0.4
Construction
Diversified 11,979,435 Compagnie Industriali Riunite S.p.A. (CIR) 11,194,219 13,506,864 1.2
Companies
Utilities 9,559,051 Societa Finanziaria Telefonica S.p.A. (STET) 20,855,534 24,168,559 2.1
Total Investments in Italy 40,219,391 41,709,306 3.7
Netherlands
Automobiles & 352,000 Vredestein Groep N.V. 3,504,552 2,701,822 0.2
Equipment
Banking 524,150 ABN Amro Holding N.V. 17,358,796 17,873,985 1.6
Capital Goods 91,800 Ahrend Groep N.V. 6,522,706 10,074,495 0.9
Chemicals 208,000 Akzo N.V. 20,837,242 23,545,790 2.1
151,400 European Vinyls Corporation International N.V. 6,683,752 7,123,349 0.6
-------------- -------------- -------
27,520,994 30,669,139 2.7
Electrical Equipment 1,397,200 Philips Electronics N.V. 34,444,546 44,043,687 3.9
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued)
<CAPTION>
Percent of
Industry Shares Held Stocks & Convertible Warrants Cost Value Net Assets
<S> <C> <S> <C> <C> <C>
Netherlands (concluded)
Insurance 369,550 Aegon N.V. $ 15,587,168 $ 23,644,964 2.1%
448,700 Amev N.V. 15,296,669 18,666,257 1.7
507,228 Internationale Nederlanden Groep N.V. 18,164,550 23,686,689 2.1
-------------- -------------- -------
49,048,387 65,997,910 5.9
Paper 434,530 KNP BT (Koninklijke)(Warrants)(a) 1,500,004 2,026,636 0.2
Telecommunications 95,900 Royal Ptt Nederland N.V. 3,041,289 3,146,657 0.3
Transportation 653,516 KLM Royal Dutch Airlines N.V. 12,912,312 17,499,081 1.6
Total Investments in Netherlands 155,853,586 194,033,412 17.3
Norway
Oil & Gas Producers 228,200 Saga Petroleum A.S. (Class A) 2,697,694 2,646,341 0.2
1,102,400 Saga Petroleum A.S. (Class B) 12,575,675 12,041,778 1.1
-------------- -------------- -------
15,273,369 14,688,119 1.3
Total Investments in Norway 15,273,369 14,688,119 1.3
Spain
Banking 104,953 Banco Popular Espanol S.A. 11,596,013 12,698,291 1.1
215,800 Banco Santander S.A. 9,375,237 7,687,946 0.7
-------------- -------------- -------
20,971,250 20,386,237 1.8
Petroleum 766,268 Repsol S.A. 21,422,573 21,399,287 1.9
Utilities 2,021,170 Telefonica Nacional de Espana S.A. 25,540,005 24,866,081 2.2
<PAGE>
Utilities--Electric 240,000 Empresa Nacional de Electricidad S.A. 9,119,821 9,763,756 0.9
940,000 Iberdrola S.A. 5,254,864 5,548,192 0.5
-------------- -------------- -------
14,374,685 15,311,948 1.4
Total Investments in Spain 82,308,513 81,963,553 7.3
Sweden
Appliances 293,700 Electrolux AB 14,484,076 14,715,527 1.3
Automobiles & Equipment 729,900 Volvo AB 13,808,866 13,568,180 1.2
Banking 153,900 Svenska Handelsbanken AB (Class A) 2,054,041 1,917,495 0.2
Engineering 598,600 SKF AB (Class A) 11,046,752 10,489,300 0.9
277,800 SKF AB (Class B) 5,353,782 4,849,395 0.4
314,000 Svedala Industry AB 5,614,776 7,406,055 0.7
-------------- -------------- -------
22,015,310 22,744,750 2.0
Insurance 228,600 Skandia Group Forsakrings AB 3,438,057 3,807,766 0.3
Metals & Mining 543,500 Avesta-Sheffield AB 4,750,742 5,974,995 0.5
Total Investments in Sweden 60,551,092 62,728,713 5.5
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued)
<CAPTION>
Percent of
Industry Shares Held Stocks & Convertible Warrants Cost Value Net Assets
<S> <C> <S> <C> <C> <C>
Swizterland
Electrical Equipment 26,910 BBC Brown Boveri & Cie (Bearer) $ 19,044,509 $ 23,382,707 2.1%
<PAGE>
Food & Beverage 26,083 Nestle AG 24,458,697 23,800,357 2.1
Insurance 1,245 Baloise 2,366,092 2,227,538 0.2
5,890 Baloise (Warrants)(a) 532,558 494,842 0.0
-------------- -------------- -------
2,898,650 2,722,380 0.2
Pharmaceuticals 28,855 Ciba-Geigy AG 16,473,100 17,238,926 1.5
Total Investments in Switzerland 62,874,956 67,144,370 5.9
Turkey
Automobiles & 960,600 Turk Otomobil Fabrikasi A.S. 7,682,550 3,698,310 0.3
Equipment
Total Investments in Turkey 7,682,550 3,698,310 0.3
United Kingdom
Aerospace 3,637,950 Rolls Royce PLC 8,613,889 9,081,778 0.8
Airlines 1,194,000 British Airways PLC 7,298,364 6,914,096 0.6
Building Materials 185,600 CRH PLC 1,118,854 1,022,702 0.1
221,400 CRH PLC (New Shares) 823,556 1,219,969 0.1
4,082,600 Tarmac PLC (Ordinary) 8,892,657 7,289,074 0.6
-------------- -------------- -------
10,835,067 9,531,745 0.8
Chemicals 1,358,100 Imperial Chemical Industries PLC (Ordinary) 16,563,885 15,954,008 1.4
Consumer Goods 1,478,700 Vendome Luxury Group (Units)(b) 9,270,521 10,723,828 1.0
Electrical Equipment 2,645,100 General Electric Co. PLC 13,322,146 11,409,374 1.0
Food & Beverage 3,408,300 Grand Metropolitan PLC 22,105,265 19,467,187 1.7
1,671,400 Tate & Lyle PLC 10,499,611 11,170,635 1.0
690,000 Unilever PLC 10,391,832 12,788,046 1.1
-------------- -------------- -------
42,996,708 43,425,868 3.8
<PAGE>
Industrials 5,431,100 Tomkins PLC 19,282,135 19,050,126 1.7
Insurance 1,072,300 Commercial Union Assurance Co. PLC 9,546,108 8,344,102 0.7
2,565,800 Prudential Corp. PLC 12,318,456 11,857,845 1.1
-------------- -------------- -------
21,864,564 20,201,947 1.8
Leisure 5,886,300 Forte PLC 21,482,171 21,948,835 1.9
2,070,450 Rank Organisation PLC 12,947,340 12,071,138 1.1
-------------- -------------- -------
34,429,511 34,019,973 3.0
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded)
<CAPTION>
Percent of
Industry Shares Held Stocks & Convertible Warrants Cost Value Net Assets
<S> <C> <S> <C> <C> <C>
United Kingdom (concluded)
Metals & Mining 1,159,900 The RTZ Corp. PLC $ 15,054,821 $ 14,248,792 1.3%
Multi-Industry 1,420,000 BTR PLC 6,903,094 6,730,800 0.6
Oil & Related 1,134,600 The British Petroleum Co. PLC 6,081,663 7,340,975 0.6
1,677,700 The Shell Transport & Trading Co. PLC 18,310,864 18,793,931 1.7
-------------- -------------- -------
24,392,527 26,134,906 2.3
Pharmaceuticals 3,675,900 SmithKline Beecham Corp. PLC (Class A) 22,864,925 26,200,988 2.3
Retail Trade 7,450,000 Asda Group PLC 6,772,433 7,915,998 0.7
Telecommunications 4,842,500 British Telecommunications PLC 28,828,556 30,489,833 2.7
Total Investments in the United Kingdom 289,293,146 292,034,060 25.8
Total Stocks & Convertible Warrants 1,045,157,100 1,100,238,030 97.8
<PAGE>
<CAPTION>
Face Amount Short-Term Securities
<S> <C> <S> <C> <C> <C>
Repurchase $ 6,327,000 Swiss Bank Corp., purchased on 1/31/1995 to
Agreements* yield 5.80% to 2/01/1995 6,327,000 6,327,000 0.6
20,442,000 Swiss Bank Corp., purchased on 1/31/1995 to
yield 5.80% to 2/01/1995 20,442,000 20,442,000 1.8
Total Investments in Short-Term Securities 26,769,000 26,769,000 2.4
Total Investments $1,071,926,100 1,127,007,030 100.2
==============
Liabilities in Excess of Other Assets (1,923,810) (0.2)
-------------- -------
Net Assets $1,125,083,220 100.0%
============== =======
Net Asset Class A--Based on net assets of $195,642,868 and
Value: 14,552,096 shares outstanding $ 13.44
==============
Class B--Based on net assets of $909,240,483 and
71,209,324 shares outstanding $ 12.77
==============
Class C--Based on net assets of $1,619,923 and 126,932
shares outstanding $ 12.76
==============
Class D--Based on net assets of $18,579,946
and 1,383,308 shares outstanding $ 13.43
==============
<FN>
(a)Warrants entitle the Fund to purchase a predetermined number of
shares of common stock. The purchase price and number of shares are
subject to adjustment under certain conditions until the expiration
date.
(b)Each unit consists of one ordinary 5p Vendome PLC and one
ordinary NPC Vendome SA.
*Repurchase Agreements are fully collateralized by US Government &
Agency Obligations.
</TABLE>
<PAGE>
PORTFOLIO INFORMATION
Percent of
Ten Largest Equity Holdings Net Assets
Philips Electronics N.V. 3.9%
British Telecommunications PLC 2.7
SmithKline Beecham Corp. PLC (Class A) 2.3
Kloeckner Werke AG 2.3
Telefonica Nacional de Espana S.A. 2.2
BASF AG 2.2
Societa Finanziaria Telefonica S.p.A. (STET) 2.1
Nestle AG 2.1
Internationale Nederlanden Groep N.V. 2.1
Aegon N.V. 2.1
Percent of
Ten Largest Industries Net Assets
Insurance 9.6%
Chemicals 8.4
Electrical Equipment 7.0
Banking 6.6
Utilities 6.2
Capital Goods 6.1
Food & Beverage 5.9
Automobiles & Equipment 5.2
Paper & Forest Products 3.9
Pharmaceuticals 3.8
Portfolio Changes for the Quarter Ended
January 31, 1995
Additions
Allied Irish Banks PLC (Ordinary)
BTR PLC
*Banco Espanol de Credito S.A. (Banesto)(New Shares)
*Banco Santander S.A. (Rights)
Bayer AG
British Airways PLC
Empresa Nacional de Electricidad S.A.
*EuraFrance S.A. (Rights)
European Vinyls Corporation International N.V.
*Fiat S.p.A.
*Glaxo PLC
KNP BT (Koninklijke)(Warrants)
Iberdrola S.A.
Nestle AG
Prudential Corp. PLC
The RTZ Corp. PLC
Societe Nationale Elf Aquitaine
<PAGE>
Deletions
*Banco Espanol de Credito S.A. (Banesto)(New Shares)
*Banco Santander S.A. (Rights)
Bank of Ireland
Bayer AG (Warrants)
CRH PLC (New Shares)
Cable & Wireless PLC
Continental AG
Credito Italiano S.p.A.
Credito Italiano S.p.A. (Rights)
*EuraFrance S.A. (Rights)
*Fiat S.p.A.
Glaverbel S.A. (New Shares)
*Glaxo PLC
KNP BT (Koninklijke)(Preferred)
LVMH
Schweizerischer Bankverein
Sears PLC
Societe Generale
Thorn EMI PLC (Ordinary)
Trelleborg AB (Class B)
Volkswagen AG
[FN]
*Added and deleted in the same quarter.
