MERRILL LYNCH
EUROFUND
FUND LOGO
Quarterly Report
July 31, 1995
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, MA 02109
Transfer Agent
Merrill Lynch Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 637-3863
This report is not authorized for use as an offer of sale or a
solicitation of an offer to buy shares of the Fund unless
accompanied or preceded by the Fund's current prospectus. Past
performance results shown in this report should not be considered a
representation of future performance. Investment return and
principal value of shares will fluctuate so that shares, when
redeemed, may be worth more or less than their original cost.
Merrill Lynch
EuroFund
Box 9011
Princeton, NJ
08543-9011
MERRILL LYNCH EUROFUND
PORTFOLIO INFORMATION
As a Percentage of Stocks &
Convertible Warrants
As of July 31, 1995
Pie graph depicting Percentage of Stocks & Convertible Warrants As
of July 31, 1995
Netherlands 17.3%
Belgium 0.9%
Hungary 0.9%
Austria 1.4%
Spain 4.9%
France 6.8%
Finland 8.9%
Germany 9.7%
Sweden 8.8%
Switzerland 6.5%
Italy 4.2%
Ireland 2.0%
Norway 1.7%
Czech Republic 0.1%
Greece 0.1%
United Kingdom 25.8%
EUROPEAN STOCK MARKET PERFORMANCE
Total Return for the
Three-Month Period
Ended July 31, 1995
In US Dollars*
Bar graph depicting Total Return for the Three-Month Period Ended
July 31, 1995 In US Dollars*
Belgium + 3.8%
France + 3.9%
Italy + 4.9%
Austria + 6.4%
Norway + 7.8%
United Kingdom + 8.1%
Netherlands + 8.6%
Switzerland + 9.1%
Germany +10.0%
Ireland +11.1%
Spain +13.3%
Sweden +14.0%
Finland +30.6%
Source: Financial Times--Actuaries Index.
[FN]
*For the three-month period ended July 31, 1995, total investment
return for the Financial Times--Actuaries Europe Index was +8.36%.
DEAR SHAREHOLDER
The quarter ended July 31, 1995 saw a strong rebound in European
stock markets. The US total dollar return of the unmanaged Financial
Times--Actuaries Europe Index for the July quarter was +8.36%. For
the same period, Merrill Lynch EuroFund's Class A, Class B, Class C
and Class D Shares had total returns of +8.54%, +8.29%, +8.30% and
+8.42%, respectively. (Results do not reflect deduction of sales
charges, and would be lower if sales charges were included. Complete
performance information, including average annual total returns, can
be found on pages 3, 4 and 5 of this report to shareholders.)
Asset allocation added value during the July quarter. The principal
contributions came from an underweighted stance in the poorly
performing French market and a significant overweighting in the
buoyant Scandinavian markets. At the sector level, cyclical stocks,
where we have substantial representation, continued their relative
outperfor-mance. The lack of exposure to the booming technology
sector, and particularly to SAP AG, Nokia AB OY and LM Ericsson,
handicapped performance. We do not believe that such spectacular
outper-formance by this area of the market is sustainable.
Economic growth faltered on both sides of the Atlantic in the spring
and early summer. However, the most recently released data suggest
renewed economic growth, and it is likely that we have experienced
little more than a growth hiatus. The lower rate of growth, and the
reduced inflationary expectations that accompany it, increase the
likelihood of a sustained period of moderate economic growth with
low inflation. In the "soft currency" countries (Sweden, Norway,
Spain, Italy, Portugal and the United Kingdom), where inflationary
fears have been building, recent data on inflation have been
encouraging. While benign inflationary data have been supportive of
bond markets and the interest rate outlook, signs of renewed
economic growth have left bond markets subdued, with little
possibility of revisiting their recent highs.
The US dollar, which recently has displayed a modest uptrend for
both fundamental and technical reasons, has helped to improve market
sentiment and confidence.
Investment Strategy
Although corporate earnings in Europe have been slightly downgraded
in response to weaker-than-expected economic growth (with the
curious exception of the cyclical sectors), absolute valua-tions are
still below long-term averages. Similarly, the recent rise in bond
yields still leaves equities very inexpensive relative to bonds on a
historic comparison. The valuation argument, combined with the
recent Japanese liberalization of overseas investment (which should
be beneficial for stock market liquidity and currency relation-
ships), leads us to maintain our effectively fully invested
position. The surge in takeover activity and share buybacks also is
improving the investment backdrop.
In recent weeks we have changed the Fund's currency strategy, and
nearly 45% of the Fund invested in "hard currency" countries
(Germany, Switzerland, Holland, Belgium, France, Denmark, Austria
and Finland) has been hedged using options which expire in October.
The reasons for the move are both fundamental and technical. Our
hope is partly to protect the Fund against an anticipated rise in
the US dollar over the next few months, although such a move would
likely be offset by rising equity markets.
The Fund's country allocations have varied little since the period
ended April 30, 1995. The principal overweightings are in Finland,
Sweden and Holland, and the principal underweightings are in the
United Kingdom and France. There also has been little change at the
sector level, with the Fund's heavy overweighting of cyclicals
benefiting performance. Philips Electronics N.V. remains the Fund's
largest equity holding. The remainder of the top ten holdings is
dominated by high-quality and undervalued Dutch insurance companies
and high-growth Swiss pharmaceutical companies. (See page 5 of this
report to shareholders for a listing of the Fund's top ten
positions.)
In Conclusion
The investment environment for European equities remains firmly
positive. It appears increasingly likely that this economic cycle
will be an extended one. However, this possible development is not
priced into equity valuations, in our opinion, especially in the
cyclical area where many sectors are discounting a downturn in the
near future. The main risk factors would be a further decline in the
US stock market, which could impact European equities, and further
increases in European bond yields as economic growth momentum
rebuilds.
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
August 23, 1995
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.
* 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 on pages 4 and 5. Data for
Class C and Class D Shares are also presented in the "Aggregate
Total Return" and "Recent Performance Results" tables on pages 4 and
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 July 31, 1995 and
for Class C and Class D Shares for the since inception and 3-month
periods ended July 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.
PERFORMANCE DATA (continued)
<TABLE>
Performance Summary--Class A Shares
<CAPTION>
Net Asset Value Capital Gains Dividends
Period Covered Beginning Ending Distributed Paid* % Change**
<C> <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--7/31/95 13.62 15.86 -- 0.019 +16.59
------ ------
Total $0.760 Total $1.676
Cumulative total return as of 7/31/95: +116.96%**
<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**
<C> <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--7/31/95 12.95 14.99 -- 0.019 +15.90
------ ------
Total $1.497 Total $1.616
Cumulative total return as of 7/31/95: +97.66%**
<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>
<TABLE>
Recent Performance Results*
<CAPTION>
12 Month 3 Month
7/31/95 4/30/95 7/31/94++ % Change++ % Change
<S> <C> <C> <C> <C> <C>
ML EuroFund Class A Shares $15.86 $14.63 $15.81 + 5.92%(1) +8.41%
ML EuroFund Class B Shares 14.99 13.86 15.18 + 4.55(1) +8.15
ML EuroFund Class C Shares 14.98 13.85 15.08 + 5.18(1) +8.16
ML EuroFund Class D Shares 15.82 14.61 15.75 + 6.06(1) +8.28
ML EuroFund Class A Shares--Total Return +12.82(2) +8.54(3)
ML EuroFund Class B Shares--Total Return +11.70(2) +8.29(3)
ML EuroFund Class C Shares--Total Return +12.36(2) +8.30(3)
ML EuroFund Class D Shares--Total Return +12.97(2) +8.42(3)
<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 $0.907 per share ordinary
income dividends and $0.737 per share capital gains distributions.
(3)Percent change includes reinvestment of $0.019 per share ordinary
income dividends.
</TABLE>
PERFORMANCE DATA (concluded)
Average Annual Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 6/30/95 +13.45% +7.49%
Five Years Ended 6/30/95 +8.05 +6.89
Inception (10/26/88)
through 6/30/95 +11.33 +10.43
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 6/30/95 +12.32% +8.32%
Five Years Ended 6/30/95 +6.95 +6.95
Inception (1/30/87) through 6/30/95 +7.70 +7.70
[FN]
*Maximum contingent deferred sales charge is 4% and is reduced to 0%
after 4 years.
**Assuming payment of applicable contingent deferred sales charge.
Aggregate Total Return
% Return % Return
Without CDSC With CDSC**
Class C Shares*
Inception (10/21/94)
through 6/30/95 +6.14% +5.18%
[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 6/30/95 +6.69% +1.09%
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
PORTFOLIO INFORMATION
Percent of
Ten Largest Equity Holdings Net Assets
Philips Electronics N.V. 2.7%
Aegon N.V. 2.5
Repsol S.A. 2.3
Amev N.V. 2.2
International Nederlanden Groep N.V. 2.1
Roche Holdings AG 2.0
Kloeckner Werke AG 1.9
Ciba-Geigy AG 1.9
The British Petroleum Co. PLC 1.8
British Telecommunications PLC 1.7
Percent of
Ten Largest Industries Net Assets
Insurance 8.5%
Engineering 7.6
Paper & Forest Products 6.6
Banking 5.8
Chemicals 4.9
Pharmaceuticals 4.8
Automobiles & Equipment 4.4
Telecommunications 3.9
Electrical Equipment 3.9
Utilities 3.7
Portfolio Changes for the
Quarter Ended July 31, 1995
Additions
AEGEK
The BICC Group PLC
BTR PLC (Ordinary)
British Gas PLC (Ordinary)
The British Petroleum Co. PLC
CS Holdings AG (Registered)
Celsius Industrier AB
Erciyas Biracilik Ve Malt
Sanayii A.S.
*Eregli Demir Ve Celik
Fabrikalari T.A.S.
Glaxo Holdings PLC
Jefferson Smurfit Group PLC
Kymmene OY
*Migros Turk T.A.S.
Mol Re Hung Oil & Gas
Montedison S.p.A.
NYNEX CableComms Group PLC
Rauma OY
T&N PLC
*US Industries, Inc.
V.A. Technologie AG
Vodafone Group PLC
Deletions
Banco Santander S.A.
British Airways PLC
Continental AG (Warrants)
*Eregli Demir Ve Celik
Fabrikalari T.A.S.
Forte PLC
General Electric Co. PLC
Hanson PLC (Ordinary)
*Migros Turk T.A.S.
Nestle AG
Scottish Power PLC
Sedgwick Group PLC
The Shell Transport &
Trading Co. PLC
SmithKline Beecham Corp.
PLC (Class A)
Tarmac PLC (Ordinary)
*US Industries, Inc.
[FN]
*Added and deleted in the
same quarter.
<TABLE>
SCHEDULE OF INVESTMENTS
<CAPTION>
Percent of
Industry Shares Held Investments Cost Value Net Assets
<S> <C> <S> <C> <C> <C>
Austria
Engineering 21,800 V.A. Technologie AG $ 2,383,280 $ 2,665,630 0.2%
Utilities 170,150 Verbund Oesterreichische Elekrizitats AG 9,648,353 12,497,239 1.1
Total Investments in Austria 12,031,633 15,162,869 1.3
Belgium
Banking 29,350 Generale de Banque S.A. 7,163,490 9,414,736 0.8
Total Investments in Belgium 7,163,490 9,414,736 0.8
Czech Republic
Paper & Forest 28,911 Biocel Paskov AS 776,857 777,930 0.1
Products
Total Investments in the Czech Republic 776,857 777,930 0.1
Finland
Banking 9,921,672 Kansallis-Osake-Pankki 17,104,769 10,094,656 0.9
2,116,800 Unitas Bank Ltd. 5,714,168 6,521,786 0.6
-------------- -------------- ------
22,818,937 16,616,442 1.5
Machine--Diversified 277,000 Rauma OY 4,995,819 5,775,519 0.5
Metals & Mining 687,700 Outokumpu OY 9,764,165 13,468,211 1.2
Paper & Forest 1,743,700 Enso-Gutzeit OY 'R' (Ordinary)
Products (Registered) 12,175,093 16,616,582 1.5
203,300 Kymmene OY 6,225,726 6,797,707 0.6
391,900 Metsa Serla OY 14,945,500 18,251,851 1.6
801,925 Repola OY 'S' 12,642,630 17,965,265 1.6
-------------- -------------- ------
45,988,949 59,631,405 5.3
Total Investments in Finland 83,567,870 95,491,577 8.5
France
Automobiles & 132,550 Peugeot S.A. 16,341,989 19,069,746 1.7
Equipment
Building & Construction 97,000 Compagnie de Saint-Gobain S.A. 11,606,838 12,919,249 1.1
Financial Services 38,863 EuraFrance S.A. 11,595,029 12,940,227 1.1
Industrial Materials 177,431 Compagnie de Fives-Lille 9,488,305 17,426,524 1.5
Oil & Related 74,050 Societe Nationale Elf Aquitane 5,209,575 5,791,941 0.5
Steel 73,450 Ugine S.A. 4,965,855 5,075,913 0.5
Total Investments in France 59,207,591 73,223,600 6.4
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued)
<CAPTION>
Percent of
Industry Shares Held Investments Cost Value Net Assets
Germany
<S> <C> <S> <C> <C> <C>
Automobiles & 39,250 Volkswagen AG $ 10,076,641 $ 12,805,891 1.1%
Equipment -------------- -------------- ------
Chemicals 51,110 BASF AG 8,714,588 11,848,110 1.0
50,200 Bayer AG 9,932,780 13,515,524 1.2
18,647,368 25,363,634 2.2
Diversified Companies 85,000 Veba AG (Warrants) (a) 3,659,373 5,561,265 0.5
Electronics 34,000 Siemens AG 17,077,977 17,975,682 1.6
Engineering 321,783 Kloeckner Werke AG 14,985,368 22,171,051 1.9
47,654 Mannesmann AG 12,941,208 15,927,204 1.4
-------------- -------------- ------
27,926,576 38,098,255 3.3
Insurance 1,920 Munich Reinsurance Co. 3,609,728 4,266,049 0.4
Total Investments in Germany 80,997,663 104,070,776 9.1
Greece
Engineering & 36,667 AEGEK 889,337 900,668 0.1
Construction
Total Investments in Greece 889,337 900,668 0.1
Hungary
Natural Gas 44,000 Mol Re Hung Oil & Gas 3,778,425 4,346,911 0.4
Pharmaceuticals 30,168 Egis 559,452 676,697 0.1
275,000 Gedeon Richter 3,892,707 4,474,250 0.4
-------------- -------------- ------
4,452,159 5,150,947 0.5
Total Investments in Hungary 8,230,584 9,497,858 0.9
Ireland
Banking 763,000 Allied Irish Banks PLC (Ordinary) 3,276,759 3,716,329 0.3
Building Materials 2,462,300 CRH PLC 14,420,886 17,422,373 1.6
Forest Products 4,279,417 Jefferson Smurfit Group PLC 12,726,781 13,449,801 1.2
Total Investments in Ireland 30,424,426 34,588,503 3.1
Italy
Diversified 13,030,335 Compagnie Industriali Riunite S.p.A.
Companies (CIR) 12,170,577 11,208,979 1.0
18,730,000 Montedison S.p.A. 14,319,765 14,719,127 1.3
-------------- -------------- ------
26,490,342 25,928,106 2.3
Engineering 2,571,700 Filippo Fochi S.p.A. 8,169,638 1,102,065 0.1
Utilities 7,453,151 Societa Finanziaria Telefonica S.p.A.
(STET) 16,787,442 18,764,393 1.6
Total Investments in Italy 51,447,422 45,794,564 4.0
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued)
<CAPTION>
Percent of
Industry Shares Held Investments Cost Value Net Assets
<S> <C> <S> <C> <C> <C>
Netherlands
Automobiles & 352,000 Vredestein Groep N.V. $ 3,504,552 $ 4,003,619 0.3%
Equipment
Banking 285,850 ABN Amro Holding N.V. 9,612,723 11,231,537 1.0
Capital Goods 459,000 Ahrend Groep N.V. 6,522,706 13,822,800 1.2
Chemicals 144,900 Akzo N.V. 15,161,543 19,102,753 1.7
234,320 European Vinyls Corporation
International N.V. 10,057,947 11,251,115 1.0
-------------- -------------- ------
25,219,490 30,353,868 2.7
Electrical Equipment 619,100 Philips Electronics N.V. 16,377,603 30,526,903 2.7
Insurance 781,125 Aegon N.V. 13,638,817 28,521,108 2.5
428,100 Amev N.V. 14,838,504 24,622,528 2.2
423,528 International Nederlanden Groep N.V. 15,831,917 24,578,528 2.1
-------------- -------------- ------
44,309,238 77,722,164 6.8
Paper 434,530 KNP BT (Koninklijke) (Warrants) (a) 1,500,004 1,743,849 0.2
Transportation 438,258 KLM Royal Dutch Airlines N.V. 9,501,301 16,540,175 1.4
Total Investments in the Netherlands 116,547,617 185,944,915 16.3
Norway
Oil & Gas Producers 228,200 Saga Petroleum A.S. (Class A) 2,697,693 3,318,324 0.3
1,102,400 Saga Petroleum A.S. (Class B) 12,575,675 14,949,628 1.3
Total Investments in Norway 15,273,368 18,267,952 1.6
Spain
Banking 86,553 Banco Popular Espanol S.A. 9,630,077 14,058,668 1.2
Petroleum 766,268 Repsol S.A. 21,422,573 25,938,004 2.3
Utilities--Electric 240,000 Empresa Nacional de Electricidad S.A. 9,119,821 12,832,604 1.1
Total Investments in Spain 40,172,471 52,829,276 4.6
Sweden
Appliances 320,800 Electrolux AB 15,488,929 16,927,319 1.5
Automobiles & 729,900 Volvo AB 13,808,866 14,494,468 1.3
Equipment
Diversified 186,010 Celsius Industrier AB 2,740,880 3,073,782 0.3
Companies
Engineering 565,600 SKF AB (Class A) 10,412,644 12,435,177 1.1
277,800 SKF AB (Class B) 5,353,782 6,225,872 0.5
267,400 Svedala Industry AB 4,864,676 7,965,106 0.7
-------------- -------------- ------
20,631,102 26,626,155 2.3
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued)
<CAPTION>
Percent of
Industry Shares Held Investments Cost Value Net Assets
Sweden (concluded)
<S> <C> <S> <C> <C> <C>
Financial Services 472,300 Stadshypotek AB $ 6,965,920 $ 7,637,192 0.7%
Metals & Mining 543,500 Avesta-Sheffield AB 4,750,742 6,244,468 0.5
Paper & Forest 186,700 Mo och Domsjo AB 8,667,284 12,393,702 1.1
Products 505,000 Stora Kopparbergs AB 6,022,968 7,592,908 0.7
-------------- -------------- ------
14,690,252 19,986,610 1.8
Total Investments in Sweden 79,076,691 94,989,994 8.4
Switzerland
Banking 130,000 CS Holdings AG (Registered) 12,351,410 11,275,279 1.0
Electrical Equipment 13,460 BBC Brown Boveri & Cie (Bearer) 10,355,594 14,208,560 1.2
Pharmaceuticals 28,855 Ciba-Geigy AG 16,473,100 21,429,969 1.9
3,310 Roche Holdings AG 18,033,361 22,606,215 2.0
-------------- -------------- ------
34,506,461 44,036,184 3.9
Total Investments in Switzerland 57,213,465 69,520,023 6.1
Turkey
Beverages 550,000 Erciyas Biracilik Ve Malt Sanayii A.S. 366,993 451,020 0.0
Total Investments in Turkey 366,993 451,020 0.0
United Kingdom
Aerospace 4,230,696 Rolls Royce PLC 10,771,415 12,558,275 1.1
Banking & 871,400 Standard Chartered PLC 4,103,411 5,117,500 0.5
Financial Services
Broadcast/Radio & TV 1,353,600 British Sky Broadcasting Group PLC 5,805,013 7,429,485 0.7
Commercial Services 5,084,300 BET PLC 9,048,427 10,820,743 0.9
Consumer Goods 1,439,300 Vendome Luxury Group (Units)(b) 9,362,813 11,884,346 1.0
Engineering 3,795,200 T&N PLC 10,154,703 10,506,427 0.9
1,709,500 The BICC Group PLC 9,110,938 8,822,123 0.8
-------------- -------------- ------
19,265,641 19,328,550 1.7
Food & Beverage 2,004,900 Grand Metropolitan PLC 13,021,249 12,062,986 1.1
897,400 Tate & Lyle PLC 5,868,055 6,332,846 0.5
904,800 Unilever PLC 14,464,573 18,532,620 1.6
-------------- -------------- ------
33,353,877 36,928,452 3.2
Industrials 3,942,200 Tomkins PLC 14,155,374 16,180,811 1.4
Insurance 2,720,300 Prudential Corp. PLC 13,113,121 14,473,805 1.3
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued)
<CAPTION>
Percent of
Industry Shares Held Investments Cost Value Net Assets
<S> <C> <S> <C> <C> <C>
United Kingdom (concluded)
Leisure 1,021,650 Rank Organisation PLC $ 6,353,740 $ 6,939,914 0.6%
Metals & Mining 1,233,800 The RTZ Corp. PLC 15,998,636 17,808,427 1.6
Multi-Industry 2,161,200 BTR PLC (Ordinary) 11,953,505 11,429,854 1.0
Oil & Related 2,701,300 The British Petroleum Co. PLC 19,726,742 20,467,607 1.8
Pharmaceuticals 411,800 Glaxo Holdings PLC 5,018,374 4,938,923 0.4
Retail Trade 7,485,000 Asda Group PLC 7,856,805 11,378,622 1.0
Telecommunications 3,023,500 British Telecommunications PLC 18,568,091 19,256,055 1.7
2,126,800 NYNEX CableComms Group PLC 4,672,957 4,424,297 0.4
2,169,400 Racal Electronics PLC 8,446,944 9,216,763 0.8
3,126,700 Vodafone Group PLC 11,501,793 11,983,012 1.0
-------------- -------------- ------
43,189,785 44,880,127 3.9
Utilities 2,351,900 British Gas PLC (Ordinary) 11,842,421 10,970,633 1.0
Total Investments in the United Kingdom 240,919,100 263,536,074 23.1
Face Amount Short-Term Securities
Repurchase $ 5,991,000 PaineWebber Group, Inc., purchased on
Agreements* 7/31/1995 to yield 5.78% to 8/01/1995 5,991,000 5,991,000 0.5
Total Investments in Short-Term Securities 5,991,000 5,991,000 0.5
Number of Contracts/ Premiums
Face Amount Issue Paid
Currency Put 90,000,000 Finnish Mark, expiring October 1995
Options Purchased at Fim 4.281 2,308,500 1,209,960 0.1
72,000,000 French Franc, expiring October 1995 at
Frf 4.873 1,803,600 792,432 0.1
105,000,000 German Deutschemark, expiring October
1995 at DM 1.400 2,630,250 1,585,500 0.1
180,000,000 Netherlands Guilder, expiring October
1995 at Nlg 1.568 4,410,000 2,610,000 0.2
69,000,000 Swiss Franc, expiring October 1995 at
Chf 1.166 1,721,550 938,400 0.1
Total Options Purchased 12,873,900 7,136,292 0.6
Total Investments 903,171,478 1,087,589,627 95.5
Premiums
Received
Currency Call 90,000,000 Finnish Mark, expiring October 1995
Options Written at Fim 4.113 (558,000) (834,660) (0.1)
72,000,000 French Franc, expiring October
1995 at Frf 4.682 (405,000) (715,248) (0.1)
105,000,000 German Deutschemark, expiring October
1995 at DM 1.345 (929,250) (1,060,500) (0.1)
180,000,000 Netherlands Guilder, expiring October
1995 at Nlg 1.506 (1,593,000) (1,890,000) (0.2)
69,000,000 Swiss Franc, expiring October 1995
at Chf 1.120 (779,700) (931,500) (0.1)
-------------- -------------- ------
(4,264,950) (5,431,908) (0.6)
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded)
<CAPTION>
Number of Contracts/ Premiums Percent of
Face Amount Issue Received Value Net Assets
<S> <C> <S> <C> <C> <C>
Currency Put 90,000,000 Finnish Mark, expiring October 1995
Options Written at Fim 4.511 $ (598,500) $ (190,710) 0.0%
72,000,000 French Franc, expiring October 1995
at Frf 5.135 (448,200) (103,176) 0.0
105,000,000 German Deutschemark, expiring October
1995 at DM 1.475 (761,250) (294,000) 0.0
180,000,000 Netherlands Guilder, expiring October
1995 at Nlg 1.652 (1,251,000) (486,000) 0.0
69,000,000 Swiss Franc, expiring October 1995 at
Chf 1.229 (527,850) (179,400) 0.0
-------------- -------------- ------
(3,586,800) (1,253,286) 0.0
Total Options Written (7,851,750) (6,685,194) (0.6)
Total Investments, Net of Options Written $ 895,319,728 1,080,904,433 94.9
==============
Other Assets Less Liabilities 57,869,259 5.1
-------------- ------
Net Assets $1,138,773,692 100.0%
============== ======
Net Asset Class A--Based on net assets of $202,379,226 and
Value: 12,758,497 shares outstanding $ 15.86
==============
Class B--Based on net assets of $838,664,746 and
55,959,118 shares outstanding $ 14.99
==============
Class C--Based on net assets of $3,612,099 and 241,179
shares outstanding $ 14.98
==============
Class D--Based on net assets of $94,117,621 and 5,947,433
shares outstanding $ 15.82
==============
<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>
