MERRILL LYNCH
EUROFUND
FUND LOGO
Annual Report
October 31, 1997
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.
Merrill Lynch
EuroFund
Box 9011
Princeton, NJ
08543-9011
<PAGE>
Printed on post-consumer recycled paper
MERRILL LYNCH EUROFUND
PORTFOLIO INFORMATION
Pie graph depicting country diversification As a Percentage
of Stocks & Convertible Warrants As of October 31, 1997
Denmark 0.4%
Ireland 0.8%
Emerging Europe* 2.4%
Finland 3.3%
Switzerland 6.7%
Germany 13.4%
France 16.3%
Netherlands 11.0%
Italy 9.3%
Sweden 5.1%
Spain 2.1%
Norway 1.4%
Portugal 0.4%
United Kingdom 27.4%
[FN]
*Countries include Croatia,
Hungary, Poland, Romania
and Turkey.
EUROPEAN STOCK MARKET PERFORMANCE
Bar graph depicting Total Return for the Three-Month
Period Ended October 31, 1997 in US dollars*
Germany -10.1%
Netherlands -5.4%
Sweden -4.6%
France -3.1%
Switzerland -0.2%
Finland -0.1%
Spain +1.6%
Ireland +1.8%
United Kingdom +2.6%
Denmark +3.2%
Italy +5.9%
Norway +9.1%
<PAGE>
Source: Financial Times/Standard & Poor's--Actuaries Index.
[FN]
*For the three-month period ended October 31, 1997,
total investment return for the Financial Times/
Standard & Poor's--Actuaries Europe Index was -1.16%.
Merrill Lynch EuroFund October 31, 1997
DEAR SHAREHOLDER
During the quarter ended October 31, 1997, the unmanaged Financial
Times/Standard & Poor's--Actuaries Europe Index had a total return
of -1.16%, while the total return for the unmanaged Morgan Stanley
Capital International Europe Index was -1.66%. For the same period,
Merrill Lynch EuroFund's Class A, Class B, Class C and Class D
Shares provided total returns of +4.23%, +4.00%, +3.96% and +4.14%,
respectively. The Fund's outperformance was attributable to its
value orientation, its relative lack of exposure to the largest-
capitalization stocks and its defensive cash position. (Results
shown do not reflect sales charges, and would be lower if sales
charges were included. Complete performance information, including
average annual total returns, can be found on pages 4--7 of this
report to shareholders.)
During the October quarter, the overly optimistic consensus scenario
for global capital markets finally began to be questioned. The
markets fell sharply in August, only to recover to levels close to
the highs experienced in September. It was only in October that the
crisis in Asia finally caused investors to question valuation
levels, precipitating major stock market declines on a global basis.
Strong bond markets were no longer viewed as a reason to push stock
market levels higher, but rather as an indication of the flight to
quality and safety. Although global growth is currently strong and
inflation is low, the Asian currency crisis is likely to reduce
growth and hence corporate profitability. However, this increases
the likelihood of the current growth cycle continuing for longer and
with less risk of inflation. Once stock markets have stabilized at
lower levels, the longer-term scenario may look favorable once
again. However, should the dollar fall further, it is likely that
the European economic outlook would be negatively affected.
<PAGE>
In Europe, the underlying economic growth outlook remains robust,
but the recovery remains unbalanced. Exports are dominating, but
increased consumer confidence, especially in France, suggests the
recovery may be broadening out. In the peripheral economies, which
are benefiting from abnormally low short-term interest rates
resulting from the anticipated European Monetary Union (EMU), growth
is strong and may prove inflationary in 1998--1999. With a
noticeable improvement in European economies, and the requirement to
harmonize monetary policy prior to EMU, the Bundesbank has started
to tighten monetary policy.
There have been a number of positive developments in the political
arena. For example, in France the socialist government has proved to
be far less dogmatic and much more pragmatic than originally feared.
However, the political environment is still less conducive to the
creation of shareholder value than is the case in other major
European countries. In Italy, the heated debate over fiscal reform,
especially in the pension area, finally has been resolved
satisfactorily, thus increasing the likelihood of Italy being
included in the first round of EMU. Of greatest importance on the
political side is the change of stance regarding EMU by the UK
government. The government is now firmly behind joining EMU, but
probably not until 2003. This is undisputedly good news for the bond
and equity markets, but is likely to lead to a gradual weakening of
the overvalued pound sterling.
A feature of the past few months, and a by-product of the EMU
process, is the huge increase in merger and acquisition activity in
Europe with large-scale mergers and acquisitions announced.
Generally, companies are attempting to gain substantial market
shares at a regional level, and this process should continue, with
the obvious benefits for shareholders.
Investment Strategy
Given the extended valuation levels in the markets, we maintained
the Fund's high cash reserve levels into late October. As equity
markets fell sharply, individual stock valuations became attractive
and we invested virtually all of the Fund's cash reserves. Following
this reinvestment, the markets rebounded strongly and valuations
once again became too high as the global environment remained very
uncertain. We have started to raise the Fund's cash reserve position
again. As of October 31, 1997, the cash level in the Fund was 8.6%
of net assets and was principally held in Deutschemarks.
As the markets fell, many of the largest-capitalization stocks,
which we regarded as most overvalued, fell significantly more than
the indexes. As they became attractive, we made selected purchases.
As a result, the Fund now has a higher exposure to larger-
capitalization stocks than before the recent correction, although it
still maintains a bias toward medium-capitalization and smaller-
capitalization issues.
<PAGE>
Merrill Lynch EuroFund October 31, 1997
The geographic weightings of the Fund have changed little, with the
exception of emerging Europe. Outstanding performance, extended
technical levels and valuations which no longer reflected an
attractive risk/reward ratio caused us to significantly reduce
exposure to the emerging markets from approximately 7% of net assets
to 2%.
As a result of purchases made in late October, we modestly changed
the sectoral balance of the Fund to include a slightly larger
pharmaceutical, energy and utility exposure than before. However,
the Fund remains underexposed to pharmaceuticals, banks and energy,
where we believe valuations are still relatively unattractive. We
still favor economically sensitive industrial sectors, although on a
short-term basis they are behaving poorly in response to concerns
about growth and pricing power engendered by the current crisis in
Asia.
Fiscal Year in Review
For the fiscal year ended October 31, 1997, Merrill Lynch EuroFund's
Class A, Class B, Class C and Class D Shares had total returns of
+32.13%, +30.84%, +30.81% and +31.84%, respectively, while the total
return for the unmanaged Financial Times/Standard & Poor's--
Actuaries Europe Index was +26.56% and the total return for the
Morgan Stanley Capital International Europe Index was +25.98%. For
the 12 months ended October 31, 1997, the Fund significantly
outperformed its benchmark and the +20.38% average total return of
Lipper Analytical Services Inc.'s European Region Funds.
The Fund's currency hedging strategy added value during the year,
although hedging was on a modest scale. Our underweighted position
in the pound sterling was detrimental to returns and, on an overall
basis, currency strategy had little impact on relative performance.
The heavy cash position we maintained in the Fund throughout the
year initially held back performance. However, performance was
enhanced when equity markets fell sharply in October and we
reinvested much of this cash at attractive levels. At the geographic
allocation level, the overweighting of Finland, Italy, the
Netherlands and emerging Europe and the underweighting of Germany
proved beneficial. However, the Fund was insufficiently represented
in Spain and Switzerland, which performed well. The Fund's sectoral
allocations also showed mixed results. The Fund benefited from
limited exposure to pharmaceuticals, but was hurt because it was
underrepresented in banks, which were buoyed by merger and
acquisition activity, and energy. Although much reduced, our
exposure to the pulp and paper sector also negatively impacted Fund
performance.
<PAGE>
It was at the stock level where the Fund generated its
outperformance. Our value-oriented strategy worked well as growth
stocks, which were very highly valued, failed to deliver the
earnings growth implied by their ratings. Significant exposure to
stocks such as Philips Electronics N.V., Electrolux AB, Elf
Aquitaine S.A. and Klockner Werke AG provided much of the Fund's
outperformance.
In Conclusion
While valuations have still not regained peak levels, they remain
well above historic levels and, given the lack of visibility in the
global economic and financial environment caused by the Asian
problems, we believe that a well-above average level of cash
reserves is advisable. While this crisis may ultimately lead to
increased longevity of the US/European economic cycle, we will
maintain a cautious stance until a more accurate assessment of the
ramifications of that region's problems can be achieved.
We thank you for your investment in Merrill Lynch EuroFund, and we
look forward to reviewing our outlook and strategy with you in our
upcoming quarterly report to shareholders.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Adrian C. Holmes)
Adrian C. Holmes
Vice President and Portfolio Manager
December 9, 1997
Merrill Lynch EuroFund October 31, 1997
PERFORMANCE DATA
<PAGE>
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 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 approximately 8 years. (There is no initial
sales charge for automatic share conversions.)
* 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).
None of the past results shown should be considered a representation
of future performance. Figures shown in the "Average Annual Total
Return" tables as well as the total returns and cumulative total
returns in the "Performance Summary" tables assume reinvestment of
all dividends and capital gains distributions at net asset value on
the ex-dividend date. Investment return and principal value of
shares will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost. Dividends paid to each class
of shares will vary because of the different levels of account
maintenance, distribution and transfer agency fees applicable to
each class, which are deducted from the income available to be paid
to shareholders.
Average Annual Total Return
% Return Without % Return With
Sales Charge Sales Charge**
<PAGE>
Class A Shares*
Year Ended 9/30/97 +35.64% +28.52%
Five Years Ended 9/30/97 +19.70 +18.42
Inception (10/26/88)
through 9/30/97 +14.28 +13.59
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 9/30/97 +34.20% +30.20%
Five Years Ended 9/30/97 +18.47 +18.47
Ten Years Ended 9/30/97 + 9.28 + 9.28
[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 9/30/97 +34.18% +33.18%
Inception (10/21/94)
through 9/30/97 +18.94 +18.94
[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*
Year Ended 9/30/97 +35.28% +28.18%
Inception (10/21/94)
through 9/30/97 +19.91 +17.73
<PAGE>
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
Merrill Lynch EuroFund October 31, 1997
PERFORMANCE DATA (continued)
Total Return Based on a $10,000 Investment
A line graph depicting the growth of an investment in the Fund's
Class A Shares compared to growth of an investment in the Morgan
Stanley Capital International Europe Index. Beginning and ending
values are:
10/26/88** 10/97
ML Eurofund++--
Class A Shares* $ 9,475 $30,677
Morgan Stanley Capital International
Europe Index++++ $10,000 $31,050
A line graph depicting the growth of an investment in the Fund's
Class B Shares compared to growth of an investment in the Morgan
Stanley Capital International Europe Index. Beginning and ending
values are:
10/87 10/97
ML Eurofund++--
Class B Shares* $10,000 $31,013
Morgan Stanley Capital International
Europe Index++++ $10,000 $35,741
A line graph depicting the growth of an investment in the Fund's
Class C Shares and Class D Shares compared to growth of an investment
in the Morgan Stanley Capital International Europe Index. Beginning
and ending values are:
10/21/94** 10/97
<PAGE>
ML Eurofund++--
Class C Shares* $10,000 $16,366
ML Eurofund++--
Class D Shares* $ 9,475 $15,887
Morgan Stanley Capital International
Europe Index++++ $10,000 $16,754
[FN]
*Assuming maximum sales charge, transaction costs and other
operating expenses, including advisory fees.
**Commencement of operations.
++ML EuroFund invests primarily in equities of corporations
domiciled in European countries. Under normal market conditions, at
least 80% of the Fund's net assets will be invested in European
corporate securities, primarily common stocks and debt and preferred
securitiesconvertible into common stock.
++++This unmanaged capitalization-weighted Index is comprised of
615 stocks, including a representative sampling of large-, medium-,
and small-capitalization companies.
Past performance is not predictive of future performance.
Merrill Lynch EuroFund October 31, 1997
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
1995 13.62 14.27 0.986 0.071 +12.72
1996 14.27 14.99 1.725 1.047 +25.26
1/1/97--10/31/97 14.99 18.47 -- 0.001 +23.22
------ ------
Total $3.471 Total $2.776
Cumulative total return as of 10/31/97: +223.78%**
<PAGE>
<FN>
*Figures may include short-term capital gains distributions.
**Figures 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
1995 12.95 13.36 0.986 0.071 +11.52
1996 13.36 13.85 1.725 0.886 +24.00
1/1/97--10/31/97 13.85 16.92 -- 0.001 +22.17
------ ------
Total $4.208 Total $2.555
Cumulative total return as of 10/31/97: +188.12%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures 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 Dividends
Period Covered Beginning Ending Distributed Paid* % Change**
<C> <C> <C> <C> <C> <C>
10/21/94--12/31/94 $15.08 $12.94 $0.737 $0.889 - 3.07%
1995 12.94 13.35 0.986 0.071 +11.53
1996 13.35 13.77 1.725 0.940 +23.93
1/1/97--10/31/97 13.77 16.82 -- 0.001 +22.16
------ ------
Total $3.448 Total $1.901
Cumulative total return as of 10/31/97: +63.66%**
<PAGE>
<FN>
*Figures may include short-term capital gains distributions.
**Figures do not reflect deduction of any sales charge; results
would be lower if sales charge was deducted.
</TABLE>
Merrill Lynch EuroFund October 31, 1997
PERFORMANCE DATA (concluded)
<TABLE>
Performance Summary--Class D Shares
<CAPTION>
Net Asset Value Capital Gains Dividends
Period Covered Beginning Ending Distributed Paid* % Change**
<C> <C> <C> <C> <C> <C>
10/21/94--12/31/94 $15.75 $13.61 $0.737 $0.889 - 2.93%
1995 13.61 14.22 0.986 0.071 +12.44
1996 14.22 14.92 1.725 1.006 +24.90
1/1/97--10/31/97 14.92 18.35 -- 0.001 +23.00
------ ------
Total $3.448 Total $1.967
Cumulative total return as of 10/31/97: +67.68%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures do not include sales charge; results would be lower if
sales charge was included.
</TABLE>
<TABLE>
Recent Performance Results*
<CAPTION>
12 Month 3 Month
10/31/97 7/31/97 10/31/96 % Change % Change
<S> <C> <C> <C> <C> <C>
ML EuroFund Class A Shares $18.47 $17.72 $16.67 +24.07%(1) +4.23%
ML EuroFund Class B Shares 16.92 16.27 15.47 +23.55(1) +4.00
ML EuroFund Class C Shares 16.82 16.18 15.45 +23.06(1) +3.96
ML EuroFund Class D Shares 18.35 17.62 16.57 +24.06(1) +4.14
ML EuroFund Class A Shares--Total Return +32.13(2) +4.23
ML EuroFund Class B Shares--Total Return +30.84(3) +4.00
ML EuroFund Class C Shares--Total Return +30.81(4) +3.96
ML EuroFund Class D Shares--Total Return +31.84(5) +4.14
<PAGE>
<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 $1.725 per share capital
gains distributions.
(2)Percent change includes reinvestment of $1.048 per share ordinary
income dividends and $1.725 per share capital gains distributions.
(3)Percent change includes reinvestment of $0.887 per share ordinary
income dividends and $1.725 per share capital gains distributions.
(4)Percent change includes reinvestment of $0.941 per share ordinary
income dividends and $1.725 per share capital gains distributions.
(5)Percent change includes reinvestment of $1.007 per share ordinary
income dividends and $1.725 per share capital gains distributions.
</TABLE>
Merrill Lynch EuroFund October 31, 1997
<TABLE>
SCHEDULE OF INVESTMENTS (in US dollars)
<CAPTION>
Shares Value Percent of
Industries Held Investments Cost (Note 1a) Net Assets
<S> <C> <S> <C> <C> <C>
Croatia
Banking 90,000 Zagrebacka Banka D.D. (GDR)* $ 1,234,184 $ 2,868,750 0.2%
Pharmaceuticals 237,492 Pliva D.D. (GDR)* 2,053,449 3,681,126 0.2
Total Investments in Croatia 3,287,633 6,549,876 0.4
Denmark
Textiles 113,877 Carli Gry International A/S 3,257,298 5,633,951 0.4
Total Investments in Denmark 3,257,298 5,633,951 0.4
Finland
Food 73,092 Huhtamaki 'I' Group 3,284,993 3,049,627 0.2
Metals & Mining 596,782 Outokumpu OY 9,260,443 8,896,847 0.6
Paper & Forest 818,335 Enso-Gutzeit OY 'R' (Ordinary)
Products (Registered) 6,528,605 7,779,332 0.5
1,959,500 Metsa Serla OY (Class B) 14,945,500 17,261,810 1.1
459,820 UPM-Kymmene Corp. 9,614,022 10,166,785 0.7
31,088,127 35,207,927 2.3
<PAGE>
Total Investments in Finland 43,633,563 47,154,401 3.1
France
Automobiles & 55,443 Peugeot S.A. 6,129,524 6,280,014 0.4
Equipment 96,600 Sommer Allibert S.A. 2,862,214 3,267,476 0.2
-------------- -------------- ------
8,991,738 9,547,490 0.6
Banking 215,431 Banque Nationale de Paris 9,524,245 9,529,038 0.6
106,156 Societe Generale de France S.A. 11,426,920 14,546,963 1.0
-------------- -------------- ------
20,951,165 24,076,001 1.6
Communication 202,514 Alcatel Alsthom Cie Generale
Equipment d'Electricite S.A. 19,117,289 24,449,218 1.6
Construction 228,561 Bouygues S.A. 21,707,086 21,409,010 1.4
Consumer Products 17,715 Christian Dior S.A. 1,807,346 1,966,626 0.1
Electronics 81,312 ++SGS-Thomson Microelectronics N.V. 3,745,574 5,789,866 0.4
Energy 68,730 Elf Aquitaine S.A. 7,731,656 8,512,267 0.5
Financial Services 150,200 Compagnie Financiere de Paribas S.A. 8,164,002 10,913,925 0.7
49,472 EuraFrance S.A. 14,476,089 20,157,802 1.3
-------------- -------------- ------
22,640,091 31,071,727 2.0
Hotels 50,674 Accor S.A. 7,100,272 9,440,395 0.6
Insurance 527,517 Assurances Generales de France (AGF) 16,893,934 27,771,277 1.8
337,791 Axa-UAP 21,157,910 23,144,396 1.5
-------------- -------------- ------
38,051,844 50,915,673 3.3
</TABLE>
Merrill Lynch EuroFund October 31, 1997
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Shares Value Percent of
Industries Held Investments Cost (Note 1a) Net Assets
<S> <C> <S> <C> <C> <C>
France (concluded)
<PAGE>
Machinery 177,431 ++Compagnie de Fives-Lille S.A. $ 9,488,305 $ 10,618,160 0.7%
Metals & Steel 1,359,879 Usinor-Sacilor 21,707,350 22,527,050 1.4
Retail 59,647 Castorama Dubois Investisse 7,987,461 6,218,187 0.4
Telecommunications 59,344 ++France Telecom S.A. 1,872,587 2,247,146 0.1
Utilities 7,942 Compagnie Generale des Eaux 865,437 924,385 0.1
Total Investments in France 193,765,201 229,713,201 14.8
Germany
Automobiles 197,781 Daimler-Benz AG 13,452,925 13,280,452 0.9
39,203 Volkswagen AG 17,089,369 23,224,148 1.5
-------------- -------------- ------
30,542,294 36,504,600 2.4
Chemicals 234,870 BASF AG 8,019,324 7,987,847 0.5
445,345 Bayer AG 16,266,592 15,663,841 1.0
77,016 Henkel KGaA 3,295,326 3,761,028 0.3
387,409 Henkel KGaA (Preferred) 16,360,407 20,157,610 1.3
-------------- -------------- ------
43,941,649 47,570,326 3.1
Construction 33,402 ++Philipp Holzmann AG 12,511,136 9,418,040 0.6
Diversified Holdings 188,558 VEBA AG 9,549,932 10,534,518 0.7
Engineering 321,783 ++Kloeckner Werke AG 14,985,368 24,693,539 1.6
Insurance 11,791 Muenchener Rueckversicherungs-
Gesellschaft AG 3,429,608 3,441,127 0.2
Manufacturing 18,901 Plettac AG 4,353,643 3,439,342 0.2
Mining 181,069 Thyssen AG 39,083,719 40,053,924 2.6
Retail Trade 31,732 Karstadt AG 11,171,623 11,068,659 0.7
55,190 Moebel Walther AG (Preferred) 2,067,520 2,181,803 0.1
-------------- -------------- ------
13,239,143 13,250,462 0.8
Total Investments in Germany 171,636,492 188,905,878 12.2
Hungary
Financial Services 75,000 ++Euronet Services, Inc. 1,038,281 731,250 0.0
<PAGE>
Pharmaceuticals 98,064 Gedeon Richter (GDR)* 1,475,761 9,119,952 0.6
Total Investments in Hungary 2,514,042 9,851,202 0.6
Ireland
Building & 686,394 CRH PLC 7,454,519 8,279,246 0.5
Construction
Food 693,901 Greencore Group PLC 3,481,856 3,294,370 0.2
Total Investments in Ireland 10,936,375 11,573,616 0.7
</TABLE>
Merrill Lynch EuroFund October 31, 1997
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Shares Value Percent of
Industries Held Investments Cost (Note 1a) Net Assets
<S> <C> <S> <C> <C> <C>
Italy
Business Services 7,347,051 ++Seat S.p.A. $ 2,044,683 $ 1,926,112 0.1%
Construction/ 771,200 Italcementi S.p.A 5,174,183 5,294,070 0.3
Building Materials
Diversified Holdings 13,030,335 ++Compagnie Industriali Riunite
S.p.A. (CIR) 12,170,577 10,410,079 0.7
49,714,126 MontEdison S.p.A. 41,768,591 40,423,251 2.6
-------------- -------------- ------
53,939,168 50,833,330 3.3
Insurance 680,382 Assicurazioni Generali 12,407,667 15,239,945 1.0
10,608,185 Istituto Nazionale delle
Assicurazioni (INA) 15,357,042 17,106,938 1.1
-------------- -------------- ------
27,764,709 32,346,883 2.1
Telecommunications 10,228,454 ++Telecom Italia S.p.A. 30,385,307 41,402,903 2.7
Total Investments in Italy 119,308,050 131,803,298 8.5
Netherlands
Banking 372,959 ABN Amro Holding N.V. 7,069,323 7,516,079 0.5
<PAGE>
Chemicals 133,140 Akzo Nobel 16,709,629 23,475,515 1.5
310,870 European Vinyls Corporation
International N.V. 11,599,987 7,722,881 0.5
-------------- -------------- ------
28,309,616 31,198,396 2.0
Construction 160,201 NBM-Amstelland N.V. 4,257,207 4,475,257 0.3
112,725 Volker Wessels Stevin N.V. 2,455,437 3,427,881 0.2
-------------- -------------- ------
6,712,644 7,903,138 0.5
Diversified Holdings 169,026 Internatio-Mueller N.V. 3,606,779 5,375,170 0.3
Electrical Equipment 315,668 Philips Electronics N.V. 11,394,953 24,730,201 1.6
113,948 Twentsche Kabel Holding N.V. 4,695,441 5,919,987 0.4
-------------- -------------- ------
16,090,394 30,650,188 2.0
Financial Services 376,515 ING Groep N.V. 15,464,692 15,815,881 1.0
Paper & Forest 858,015 Koninklijke KNP BT N.V. 18,144,476 19,546,568 1.3
Products
Steel 174,270 ++Ispat International N.V. 4,720,005 4,446,122 0.3
Telecommunications 754,082 Royal PTT Nederland N.V. 27,032,181 28,838,720 1.9
Transport Services 117,568 Koninklijke Pakhoed N.V. 4,561,548 3,853,894 0.2
Total Investments in the Netherlands 131,711,658 155,144,156 10.0
Norway
Computer Software 260,905 Merkantildata ASA 6,111,120 8,712,967 0.6
Oil & Gas Producers 311,424 Saga Petroleum A.S. (Class B) 3,816,498 5,511,143 0.3
Publishing 262,196 Schibsted ASA 5,407,096 4,901,909 0.3
Total Investments in Norway 15,334,714 19,126,019 1.2
</TABLE>
Merrill Lynch EuroFund October 31, 1997
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Shares Value Percent of
Industries Held Investments Cost (Note 1a) Net Assets
<S> <C> <S> <C> <C> <C>
Poland
<PAGE>
Chemicals 387,805 ++Polifarb Wroclaw S.A. $ 991,199 $ 1,872,162 0.1%
Electrical Equipment 598,719 ++Bydgoska Fabryka Kabli S.A. 1,787,466 4,903,302 0.3
Plastics 70,000 ++Zaklady Lentex S.A. 684,961 903,161 0.1
Total Investments in Poland 3,463,626 7,678,625 0.5
Portugal
Construction/ 225,000 Cimpor-Cimentos de Portugal S.A. 4,581,513 5,698,634 0.4
Building Materials
Total Investments in Portugal 4,581,513 5,698,634 0.4
Roumania
Investments 135,000 Romanian Growth Fund 1,390,500 996,300 0.1
Total Investments in Romania 1,390,500 996,300 0.1
Slovakia
Banking 17,853 SKB Banka (GDR)* 601,707 332,066 0.0
Metals & Mining 121,700 ++Zavod SNP 1,835,272 1,115,641 0.1
Pharmaceuticals 29,167 Slovakofarma 2,128,863 4,470,912 0.3
Total Investments in Slovakia 4,565,842 5,918,619 0.4
Spain
Oil--Related 146,440 Repsol S.A. 5,535,387 6,149,976 0.4
Utilities--Electric 1,229,684 Endesa S.A. 20,903,532 23,196,793 1.5
Total Investments in Spain 26,438,919 29,346,769 1.9
Sweden
Appliances 237,683 Electrolux AB 10,316,447 19,696,521 1.3
Engineering 127,619 SKF AB (Class A) 2,229,577 2,848,600 0.2
189,250 Svedala Industry AB 2,485,262 3,718,373 0.2
-------------- -------------- ------
4,714,839 6,566,973 0.4
<PAGE>
Insurance 329,277 Skandia Forsakrings AB 9,019,387 15,403,845 1.0
Metals & Steel 934,351 Avesta-Sheffield AB 8,667,983 6,993,552 0.4
Paper & Forest 321,435 Mo och Domsjo AB (Class B) 7,608,913 8,721,454 0.6
Products 6,095,550 Rottneros Bruks AB 8,904,861 5,540,150 0.4
680,554 Stora Kopparbergs AB 8,542,903 9,414,617 0.6
-------------- -------------- ------
25,056,677 23,676,221 1.6
Total Investments in Sweden 57,775,333 72,337,112 4.7
</TABLE>
Merrill Lynch EuroFund October 31, 1997
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Shares Value Percent of
Industries Held Investments Cost (Note 1a) Net Assets
<S> <C> <S> <C> <C> <C>
Switzerland
Banking 37,333 Credit Suisse Group (Registered) $ 3,752,564 $ 5,276,914 0.3%
Consumer Products 44,461 Societe Suisse pour la Microelectronique
et l'Horlogerie AG (Registered) 6,244,014 5,846,359 0.4
Diversified Holdings 239,817 Oerlikon-Buehrle Holding AG 25,353,554 30,761,192 2.0
Machinery 12,184 Saurer AG (Registered) 5,893,521 8,084,833 0.5
Pharmaceuticals 26,443 Novartis AG (Registered) 37,832,701 41,554,639 2.7
Retail 10,859 Fotolabo S.A. 4,516,446 2,645,690 0.2
Total Investments in Switzerland 83,592,800 94,169,627 6.1
Turkey
Appliances 17,564,000 Ardem Pisirici Ve Isitici Cihazlar
Sanayii A.S. 2,067,213 2,035,531 0.2
Oil & Gas Producers 5,354,040 ++Tupras-Turkiye Petrol Rafinerileri A.S. 430,567 481,793 0.0
Total Investments in Turkey 2,497,780 2,517,324 0.2
<PAGE>
United Kingdom
Automobiles & 5,259,274 LucasVarity PLC 16,920,886 18,042,949 1.2
Equipment
Banking 944,393 National Westminster Bank PLC 10,334,000 13,577,568 0.9
Beverages 1,594,814 Allied Domecq PLC 11,063,834 13,016,113 0.8
854,926 Bass PLC 11,136,382 11,875,374 0.8
617,140 Matthew Clark PLC 6,049,421 2,536,519 0.2
-------------- -------------- ------
28,249,637 27,428,006 1.8
Chemicals 792,811 Imperial Chemical Industries PLC 12,323,872 11,704,174 0.7
1,495,500 Inspec Group PLC 6,707,529 6,008,698 0.4
-------------- -------------- ------
19,031,401 17,712,872 1.1
Computer/Commercial/ 466,415 Misys PLC 6,652,871 11,756,428 0.7
Office
Diversified Holdings 7,897,742 BTR PLC 29,374,368 26,664,120 1.7
Electronics 402,917 Fairey Group PLC 3,425,946 4,156,991 0.3
2,162,162 General Electric Company PLC 14,158,564 13,810,728 0.9
-------------- -------------- ------
17,584,510 17,967,719 1.2
Financial Services 932,381 HSBC Holdings PLC 28,260,928 23,227,811 1.5
Food & Beverage 1,240,800 Cadbury Schweppes PLC 10,423,624 12,489,396 0.8
4,745,196 Unilever PLC 24,760,963 35,344,801 2.3
-------------- -------------- ------
35,184,587 47,834,197 3.1
Glass 3,832,491 Pilkington PLC 7,721,763 9,708,374 0.6
</TABLE>
Merrill Lynch EuroFund October 31, 1997
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<CAPTION>
Shares Value Percent of
Industries Held Investments Cost (Note 1a) Net Assets
United Kingdom (concluded)
<S> <C> <S> <C> <C> <C>
Metals 580,189 Johnson Matthey PLC $ 5,297,007 $ 5,703,685 0.4%
Metals & Mining 858,187 Rio Tinto PLC (Registered) 13,701,314 11,056,854 0.7
<PAGE>
Oil--Related 445,270 Expro International Group PLC 3,473,861 4,444,560 0.3
Retail 8,763,493 Asda Group PLC 15,993,806 22,787,536 1.5
2,840,701 Tesco PLC 15,074,678 22,743,635 1.5
1,082,901 W.H. Smith Group PLC 6,617,463 6,867,030 0.4
-------------- -------------- ------
37,685,947 52,398,201 3.4
Telecommunications 2,227,050 British Telecommunications PLC 14,650,163 16,924,511 1.1
1,730,855 Cable & Wireless PLC 12,596,679 13,821,528 0.9
-------------- -------------- ------
27,246,842 30,746,039 2.0
Tobacco 2,976,639 B.A.T. Industries PLC 25,342,446 26,041,674 1.7
445,007 Gallaher Group PLC 1,850,855 2,138,848 0.1
-------------- -------------- ------
27,193,301 28,180,522 1.8
Utilities--Electric, 458,350 Anglian Water PLC 4,170,424 6,159,113 0.4
Gas & Water 752,544 Energy Group PLC 7,984,002 7,669,492 0.5
491,316 Severn Trent PLC 5,031,070 7,121,362 0.4
755,446 South West Water PLC 5,932,852 10,810,378 0.7
609,500 United Utilities PLC 5,559,936 7,448,892 0.5
-------------- -------------- ------
28,678,284 39,209,237 2.5
Total Investments in the United Kingdom 342,591,507 385,659,142 24.9
Face
Amount Short-Term Securities
Repurchase US$ 6,537,000 UBS Securities, Inc., purchased on
Agreements** 10/31/1997 to yield 5.67% to 11/03/1997 6,537,000 6,537,000 0.4
Total Investments in Short-Term
Securities 6,537,000 6,537,000 0.4
Total Investments $1,228,819,846 1,416,314,750 91.5
==============
Foreign Time Deposits++++ 386,683,350 25.0
Liabilities in Excess of Other Assets (255,306,776) (16.5)
-------------- ------
Net Assets $1,547,691,324 100.0%
============== ======
<FN>
*Global Depositary Receipts (GDR).
**Repurchase Agreements are fully collateralized by US Government &
Agency Obligations.
++Non-income producing security.
++++Foreign time deposits bear interest at 3.875% and 3.25% with
each maturing on 11/03/1997 and 11/04/1997, respectively.
See Notes to Financial Statements.
</TABLE>
<PAGE>
Merrill Lynch EuroFund October 31, 1997
FINANCIAL INFORMATION
<TABLE>
Statement of Assets and Liabilities as of October 31, 1997
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$1,228,819,846) (Note 1a) $1,416,314,750
Cash 1,366
Foreign cash (Note 1b) 42,007,426
Foreign time deposits (Note 1b) 386,683,350
Receivables:
Securities sold $ 43,943,569
Beneficial interest sold 10,323,450
Dividends 2,851,526
Interest 21,837 57,140,382
--------------
Prepaid registration fees (Note 1f) 85,938
--------------
Total assets 1,902,233,212
--------------
Liabilities: Payables:
Securities purchased 345,284,397
Beneficial interest redeemed 6,476,611
Investment adviser (Note 2) 1,009,815
Distributor (Note 2) 766,080 353,536,903
--------------
Accrued expenses and other liabilities 1,004,985
--------------
Total liabilities 354,541,888
--------------
Net Assets: Net assets $1,547,691,324
==============
Net Assets Class A Shares of beneficial interest, $0.10 par value,
Consist of: unlimited number of shares authorized $ 3,048,163
Class B Shares of beneficial interest, $0.10 par value,
unlimited number of shares authorized 4,798,742
Class C Shares of beneficial interest, $0.10 par value,
unlimited number of shares authorized 132,382
Class D Shares of beneficial interest, $0.10 par value,
unlimited number of shares authorized 819,880
Paid-in capital in excess of par 1,105,668,173
Accumulated distributions in excess of investment
income--net (Note 1h) (10,162,843)
Undistributed realized capital gains on investments and foreign
currency transactions--net 255,804,723
Unrealized appreciation on investments and foreign currency
transactions--net 187,582,104
--------------
Net assets $1,547,691,324
==============
<PAGE>
Net Asset Value: Class A--Based on net assets of $563,098,234 and 30,481,633 shares
of beneficial interest outstanding $ 18.47
==============
Class B--Based on net assets of $811,858,940 and 47,987,420 shares
of beneficial interest outstanding $ 16.92
==============
Class C--Based on net assets of $22,260,147 and 1,323,824 shares
of beneficial interest outstanding $ 16.82
==============
Class D--Based on net assets of $150,474,003 and 8,198,804 shares
of beneficial interest outstanding $ 18.35
==============
See Notes to Financial Statements.
</TABLE>
Merrill Lynch EuroFund October 31, 1997
<TABLE>
FINANCIAL INFORMATION (continued)
<CAPTION>
Statement of Operations for the Year Ended October 31, 1997
<S> <S> <C> <C>
Investment Dividends (net of $3,912,309 foreign withholding tax) $ 27,358,290
Income Interest 6,709,083
(Notes 1d & 1e): --------------
Total income 34,067,373
--------------
Expenses: Investment advisory fees (Note 2) $ 10,128,366
Account maintenance and distribution fees--Class B (Note 2) 7,960,479
Transfer agent fees--Class B (Note 2) 1,449,803
Custodian fees 1,125,649
Transfer agent fees--Class A (Note 2) 606,012
Account maintenance fees--Class D (Note 2) 328,429
Account maintenance and distribution fees--Class C (Note 2) 208,327
Transfer agent fees--Class D (Note 2) 201,296
Printing and shareholder reports 158,290
Accounting services (Note 2) 132,782
Registration fees (Note 1f) 112,195
Professional fees 82,743
Transfer agent fees--Class C (Note 2) 41,650
Trustees' fees and expenses 37,937
Pricing fees 31,652
Other 32,030
--------------
Total expenses 22,637,640
--------------
Investment income--net 11,429,733
--------------
Realized & Realized gain (loss) from:
Unrealized Gain Investments--net 259,640,424
(Loss) on Foreign currency transactions--net (10,193,843) 249,446,581
Investments & --------------
Foreign Currency Change in unrealized appreciation/depreciation on:
Transactions--Net Investments--net 99,342,520
(Notes 1b, 1c, Foreign currency transactions--net 108,436 99,450,956
1e & 3): -------------- --------------
Net realized and unrealized gain on investments and foreign
currency transactions 348,897,537
--------------
Net Increase in Net Assets Resulting from Operations $ 360,327,270
==============
See Notes to Financial Statements.
</TABLE>
Merrill Lynch EuroFund October 31, 1997
FINANCIAL INFORMATION (continued)
<PAGE>
<TABLE>
Statements of Changes in Net Assets
<CAPTION>
For the Year Ended
October 31,
Increase (Decrease) in Net Assets: 1997 1996
<S> <S> <C> <C>
Operations: Investment income--net $ 11,429,733 $ 13,683,433
Realized gain on investments and foreign currency
transactions--net 249,446,581 174,762,791
Change in unrealized appreciation/depreciation on investments
and foreign currency transactions--net 99,450,956 (13,107,489)
-------------- --------------
Net increase in net assets resulting from operations 360,327,270 175,338,735
-------------- --------------
Dividends & Investment income--net:
Distributions to Class A (6,021,879) --
Shareholders Class B (15,309,051) --
(Note 1h): Class C (416,944) --
Class D (2,740,402) --
In excess of investment income--net:
Class A (2,089,129) --
Class B (5,311,063) --
Class C (144,648) --
Class D (950,709) --
Realized gain on investments--net:
Class A (29,824,108) (13,622,154)
Class B (104,006,961) (56,048,905)
Class C (2,515,859) (685,313)
Class D (14,571,787) (6,991,081)
-------------- --------------
Net decrease in net assets resulting from dividends
and distributions to shareholders (183,902,540) (77,347,453)
-------------- --------------
Beneficial Interest Net increase (decrease) in net assets derived from beneficial
Transactions interest transactions 286,738,788 (127,806,154)
(Note 4): -------------- --------------
Net Assets: Total increase (decrease) in net assets 463,163,518 (29,814,872)
Beginning of year 1,084,527,806 1,114,342,678
-------------- --------------
End of year* $1,547,691,324 $1,084,527,806
============== ==============
<FN>
*Undistributed (accumulated distributions in excess of)
investment income--net (Note 1i) $ (10,162,843) $ 13,058,543
============== ==============
See Notes to Financial Statements.
</TABLE>
<PAGE>
Merrill Lynch EuroFund October 31, 1997
FINANCIAL INFORMATION (continued)
<TABLE>
Financial Highlights
<CAPTION>
The following per share data and ratios have been derived
from information provided in the financial statements. Class A
For the Year Ended October 31,
Increase (Decrease) in Net Asset Value: 1997++ 1996++ 1995++ 1994++ 1993
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value,
Operating beginning of year $ 16.67 $ 15.07 $ 15.96 $ 13.87 $ 10.53
Performance: ---------- ---------- ---------- ---------- ----------
Investment income--net .26 .32 .19 .18 .26
Realized and unrealized
gain on investments
and foreign currency
transactions--net 4.31 2.32 .56 1.91 3.08
---------- ---------- ---------- ---------- ----------
Total from investment
operations 4.57 2.64 .75 2.09 3.34
---------- ---------- ---------- ---------- ----------
Less dividends and
distributions:
Investment income--net (.44) -- -- -- --
In excess of investment
income--net (.15) -- -- -- --
Realized gain on
investments--net (2.18) (1.04) (1.64) -- --
---------- ---------- ---------- ---------- ----------
Total dividends and
distributions (2.77) (1.04) (1.64) -- --
---------- ---------- ---------- ---------- ----------
Net asset value,
end of year $ 18.47 $ 16.67 $ 15.07 $ 15.96 $ 13.87
========== ========== ========== ========== ==========
Total Investment Based on net asset
Return:* value per share 32.13% 18.86% 6.19% 15.07% 31.72%
========== ========== ========== ========== ==========
Ratios to Average Expenses 1.03% 1.10% 1.12% 1.03% 1.04%
Net Assets: ========== ========== ========== ========== ==========
Investment income--net 1.53% 2.04% 1.32% 1.17% 1.50%
========== ========== ========== ========== ==========
<PAGE>
Supplemental Net assets,
Data: end of year (in thousands) $ 563,098 $ 216,056 $ 204,713 $ 236,288 $ 182,612
========== ========== ========== ========== ==========
Portfolio turnover 92.65% 92.34% 72.16% 82.47% 115.10%
========== ========== ========== ========== ==========
Average commission rate
paid+++ $ .0029 $ .0046 -- -- --
========== ========== ========== ========== ==========
<FN>
*Total investment returns exclude the effects of sales loads.
++Based on average shares outstanding during the year.
+++For fiscal years beginning on or after September 1, 1995, the
Fund is required to disclose its average commission rate per share
for purchases and sales of equity securities. The "Average
Commission Rate Paid" includes commissions paid in foreign
currencies, which have been converted into US dollars using the
prevailing exchange rate on the date of the transaction. Such
conversions may significantly affect the rate shown.
See Notes to Financial Statements.
</TABLE>
Merrill Lynch EuroFund October 31, 1997
FINANCIAL INFORMATION (continued)
<TABLE>
Financial Highlights (continued)
<CAPTION>
The following per share data and ratios have been derived
from information provided in the financial statements. Class B
For the Year Ended October 31,
Increase (Decrease) in Net Asset Value: 1997++ 1996++ 1995++ 1994++ 1993
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value,
Operating beginning of year $ 15.47 $ 14.20 $ 15.28 $ 13.43 $ 10.30
Performance: ---------- ---------- ---------- ---------- ----------
Investment income--net .07 .14 .04 .02 .16
Realized and unrealized gain
on investments and foreign
currency transactions--net 3.99 2.17 .52 1.83 2.97
---------- ---------- ---------- ---------- ----------
Total from investment
<PAGE> operations 4.06 2.31 .56 1.85 3.13
---------- ---------- ---------- ---------- ----------
Less dividends and
distributions:
Investment income--net (.32) -- -- -- --
In excess of investment
income--net (.11) -- -- -- --
Realized gain on
investments--net (2.18) (1.04) (1.64) -- --
---------- ---------- ---------- ---------- ----------
Total dividends and
distributions (2.61) (1.04) (1.64) -- --
---------- ---------- ---------- ---------- ----------
Net asset value,
end of year $ 16.92 $ 15.47 $ 14.20 $ 15.28 $ 13.43
========== ========== ========== ========== ==========
Total Investment Based on net asset
Return:* value per share 30.84% 17.61% 5.12% 13.78% 30.39%
========== ========== ========== ========== ==========
Ratios to Average Expenses 2.06% 2.13% 2.15% 2.06% 2.08%
Net Assets: ========== ========== ========== ========== ==========
Investment income--net .45% 1.00% .27% .14% .51%
========== ========== ========== ========== ==========
Supplemental Net assets, end of year
Data: (in thousands) $ 811,859 $ 738,535 $ 795,469 $1,086,480 $ 765,279
========== ========== ========== ========== ==========
Portfolio turnover 92.65% 92.34% 72.16% 82.47% 115.10%
========== ========== ========== ========== ==========
Average commission
rate paid+++ $ .0029 $ .0046 -- -- --
========== ========== ========== ========== ==========
<FN>
*Total investment returns exclude the effects of sales loads.
++Based on average shares outstanding during the year.
+++For fiscal years beginning on or after September 1, 1995, the
Fund is required to disclose its average commission rate per share
for purchases and sales of equity securities. The "Average
Commission Rate Paid" includes commissions paid inforeign
currencies, which have been converted into US dollars using the
prevailing exchange rate on the date of the transaction. Such
conversions may significantly affect the rate shown.
See Notes to Financial Statements.
</TABLE>
<PAGE>
Merrill Lynch EuroFund October 31, 1997
FINANCIAL INFORMATION (continued)
<TABLE>
Financial Highlights (continued)
<CAPTION>
Class C++++
For the
For the Period
The following per share data and ratios have been derived Year Oct. 21,
from information provided in the financial statements. Ended 1994++ to
October 31, Oct. 31,
Increase (Decrease) in Net Asset Value: 1997 1996 1995 1994
<S> <S> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 15.45 $ 14.19 $ 15.28 $ 15.08
Operating ---------- ---------- ---------- ----------
Performance: Investment income (loss)--net .07 .15 .01 (.01)
Realized and unrealized gain on investments
and foreign currency transactions--net 3.97 2.15 .54 .21
---------- ---------- ---------- ----------
Total from investment operations 4.04 2.30 .55 .20
---------- ---------- ---------- ----------
Less dividends and distributions:
Investment income--net (.36) -- -- --
In excess of investment income--net (.13) -- -- --
Realized gain on investments--net (2.18) (1.04) (1.64) --
---------- ---------- ---------- ----------
Total dividends and distributions (2.67) (1.04) (1.64) --
---------- ---------- ---------- ----------
Net asset value, end of period $ 16.82 $ 15.45 $ 14.19 $ 15.28
========== ========== ========== ==========
Total Investment Based on net asset value per share 30.81% 17.55% 5.04% 1.33%+++
Return:** ========== ========== ========== ==========
Ratios to Average Expenses 2.08% 2.15% 2.18% 2.86%*
Net Assets: ========== ========== ========== ==========
Investment income (loss)--net .43% 1.04% .11% (2.47%)*
========== ========== ========== ==========
Supplemental Net assets, end of period (in thousands) $ 22,260 $ 15,917 $ 9,668 $ 462
Data: ========== ========== ========== ==========
Portfolio turnover 92.65% 92.34% 72.16% 82.47%
========== ========== ========== ==========
Average commission paid+++++ $ .0029 $ .0046 -- --
========== ========== ========== ==========
<PAGE>
<FN>
*Annualized.
**Total investment returns exclude the effects of sales loads.
+++Aggregate total investment return.
+++++For fiscal years beginning on or after September 1, 1995, the
Fund is required to disclose its average commission rate per share
for purchases and sales of equity securities. The "Average
Commission Rate Paid" includes commissions paid inforeign
currencies, which have been converted into US dollars using the
prevailing exchange rate on the date of the transaction. Such
conversions may significantly affect the rate shown.
++Commencement of operations.
++++Based on average shares outstanding during the period.
See Notes to Financial Statements.
</TABLE>
Merrill Lynch EuroFund October 31, 1997
FINANCIAL INFORMATION (concluded)
<TABLE>
Financial Highlights (concluded)
<CAPTION>
Class D++++
For the
For the Period
The following per share data and ratios have been derived Year Oct. 21,
from information provided in the financial statements. Ended 1994++ to
October 31, Oct. 31,
Increase (Decrease) in Net Asset Value: 1997 1996 1995 1994
<S> <S> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 16.57 $ 15.02 $ 15.96 $ 15.75
Operating ---------- ---------- ---------- ----------
Performance: Investment income--net .20 .28 .20 --++++++
Realized and unrealized gain on investments
and foreign currency transactions--net 4.31 2.31 .50 .21
---------- ---------- ---------- ----------
Total from investment operations 4.51 2.59 .70 .21
---------- ---------- ---------- ----------
Less dividends and distributions:
Investment income--net (.41) -- -- --
In excess of investment income--net (.14) -- -- --
Realized gain on investments--net (2.18) (1.04) (1.64) --
---------- ---------- ---------- ----------
Total dividends and distributions (2.73) (1.04) (1.64) --
---------- ---------- ---------- ----------
Net asset value, end of period $ 18.35 $ 16.57 $ 15.02 $ 15.96
========== ========== ========== ==========
Total Investment Based on net asset value per share 31.84% 18.57% 5.85% 1.33%+++
Return:** ========== ========== ========== ==========
<PAGE>
Ratios to Average Expenses 1.28% 1.34% 1.38% 2.11%*
Net Assets: ========== ========== ========== ==========
Investment income (loss)--net 1.21% 1.83% 1.37% (1.70%)*
========== ========== ========== ==========
Supplemental Net assets, end of period (in thousands) $ 150,474 $ 114,020 $ 104,493 $ 340
Data: ========== ========== ========== ==========
Portfolio turnover 92.65% 92.34% 72.16% 82.47%
========== ========== ========== ==========
Average commission paid+++++ $ .0029 $ .0046 -- --
========== ========== ========== ==========
<FN>
*Annualized.
**Total investment returns exclude the effects of sales loads.
+++Aggregate total investment return.
+++++For fiscal years beginning on or after September 1, 1995, the
Fund is required to disclose its average commission rate per share
for purchases and sales of equity securities. The "Average
Commission Rate Paid" includes commissions paid in foreign
currencies, which have been converted into US dollars using the
prevailing exchange rate on the date of the transaction. Such
conversions may significantly affect the rate shown.
++Commencement of operations.
++++Based on average shares outstanding during the period.
++++++Amount is less than $.01 per share.
See Notes to Financial Statements.
</TABLE>
Merrill Lynch EuroFund October 31, 1997
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
Merrill Lynch EuroFund (the "Fund") is registered under the
Investment Company Act of 1940 as a diversified, open-end management
investment company. The Fund offers four classes of shares under the
Merrill Lynch Select Pricing SM System. Shares of Class A and Class
D are sold with a front-end sales charge. Shares of Class B and
Class C may be subject to a contingent deferred sales charge. All
classes of shares have identical voting, dividend, liquidation and
other rights and the same terms and conditions, except that Class B,
Class C and Class D Shares bear certain expenses related to the
account maintenance of such shares, and Class B and Class C Shares
also bear certain expenses related to the distribution of such
shares. Each class has exclusive voting rights with respect to
matters relating to its account maintenance and distribution
expenditures. The following is a summary of significant accounting
policies followed by the Fund.
<PAGE>
(a) Valuation of investments--Portfolio securities which are traded
on stock exchanges are valued at the last sale price on the exchange
on which such securities are traded, as of the close of business on
the day the securities are being valued or, lacking any sales, at
the last available bid price. Securities traded in the over-the-
counter market are valued at the last available bid price prior to
the time of valuation. In cases where securities are traded on more
than one exchange, the securities are valued on the exchange
designated by or under the authority of the Board of Trustees as the
primary market. Securities which are traded both in the over-the-
counter and on a stock exchange are valued according to the broadest
and most representative market. Options written are valued at the
last sale price in the case of exchange-traded options or, in the
case of options traded in the over-the-counter market, the last
asked price. Options purchased are valued at the last sale price in
the case of exchange-traded options or, in the case of options
traded in the over-the-counter market, the last bid price. Short-
term securities are valued at amortized cost, which approximates
market value. Other investments, including futures contracts and
related options, are stated at market value. Securities and assets
for which market quotations are not available are valued at fair
value as determined in good faith by or under the direction of the
Fund's Board of Trustees.
(b) Foreign currency transactions--Transactions denominated in
foreign currencies are recorded at the exchange rate prevailing when
recognized. Assets and liabilities denominated in foreign currencies
are valued at the exchange rate at the end of the period. Foreign
currency transactions are the result of settling (realized) or
valuing (unrealized) assets or liabilities expressed in foreign
currencies into US dollars. Realized and unrealized gains or losses
from investments include the effects of foreign exchange rates on
investments.
(c) 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 equity, debt, and
currency markets. Losses may arise due to changes in the value of
the contract or if the counterparty does not perform under the
contract.
* Forward foreign exchange contracts--The Fund is authorized to
enter into forward foreign exchange contracts as a hedge against
either specific transactions or portfolio positions. Such contracts
are not entered on the Fund's records. However, the effect on
operations is recorded from the date the Fund enters into such
contracts. Premium or discount is amortized over the life of the
contracts.
<PAGE>
* Options--The Fund is authorized to write covered call options and
put options and purchase put and call options. When the Fund writes
an option, an amount equal to the premium received by the Fund is
reflected as an asset and an equivalent liability. The amount of the
liability is subsequently marked to market to reflect the current
market value of the option written. When a security is purchased or
sold through an exercise of an option, the related premium paid (or
received) is added to (or deducted from) the basis of the security
acquired or deducted from (or added to) the proceeds of the security
sold. When an option expires (or the Fund enters into a closing
transaction), the Fund realizes a gain or loss on the option to the
extent of the premiums received or paid (or gain or loss to the
extent the cost of the closing transaction exceeds the premium paid
or received).
Written and purchased options are non-income producing investments.
Foreign currency options and futures--The Fund may also purchase or
sell listed or over-the-counter foreign currency options, foreign
currency futures and related options on foreign currency futures as
a short or long hedge against possible variations in foreign
exchange rates. Such transactions may be effected with respect to
hedges on non-US dollar denominated securities owned by the Fund,
sold by the Fund but not yet delivered, or committed or anticipated
to be purchased by the Fund.
Merrill Lynch EuroFund October 31, 1997
NOTES TO FINANCIAL STATEMENTS (continued)
(d) 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. Under the applicable foreign tax law, a
withholding tax may be imposed on interest, dividends, and capital
gains at various rates.
<PAGE>
(e) Security transactions and investment income--Security
transactions are recorded on the dates the transactions are entered
into (the trade dates). Dividend income is recorded on the ex-
dividend dates. Dividends from foreign securities where the ex-
dividend date may have passed are subsequently recorded when the
Fund has determined the ex-dividend date. Interest income is
recognized on the accrual basis. Realized gains and losses on
security transactions are determined on the identified cost basis.
(f) Prepaid registration fees--Prepaid registration fees are charged
to expense as the related shares are issued.
(g) Repurchase agreements--The Fund invests in US Government
securities pursuant to repurchase agreements with a member bank of
the Federal Reserve System or a primary dealer in US Government
securities. Under such agreements, the bank or primary dealer agrees
to repurchase the security at a mutually agreed upon time and price.
The Fund takes possession of the underlying securities, marks to
market such securities and, if necessary, receives additional
securities daily to ensure that the contract is fully
collateralized.
(h) Dividends and distributions--Dividends and distributions paid by
the Fund are recorded on the ex-dividend dates. Distributions in
excess of net investment income are due primarily to differing tax
treatments for foreign currency transactions.
(i) Reclassification--Generally accepted accounting principles
require that certain components of net assets be adjusted to reflect
permanent differences between financial and tax reporting.
Accordingly, current year's permanent book/tax differences of
$1,667,294 have been reclassified between undistributed net realized
capital gains and accumulated distributions in excess of net
investment income. These reclassifications have no effect on net
assets or net asset values per share.
2. Investment Advisory Agreement and
Transactions with Affiliates:
The Fund has entered into an Investment Advisory Agreement with
Merrill Lynch Asset Management, L.P. ("MLAM"). The general partner
of MLAM is Princeton Services, Inc. ("PSI"), an indirect wholly-
owned subsidiary of Merrill Lynch & Co., Inc. ("ML & Co."), which is
the limited partner. The 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.
MLAM 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 of 0.75% on an annual basis of
the average daily value of the Fund's net assets. MLAM has entered
into a Sub-Advisory Agreement with Merrill Lynch Asset Management
U.K., Ltd. ("MLAM U.K."), an affiliate of MLAM, pursuant to which
MLAM pays MLAM U.K. a fee computed at the rate of 0.15% of the
average daily net assets of the Fund for providing investment
advisory services to MLAM with respect to the Fund. For the year
ended October 31, 1997, MLAM paid MLAM U.K. a fee of $1,761,720
pursuant to such Agreement.
<PAGE>
Pursuant to 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 ongoing account maintenance and distribution
fees. The fees are accrued daily and paid monthly at annual rates
based upon the average daily net assets of the shares as follows:
Account
Maintenance Distribution
Fee Fee
Class B 0.25% 0.75%
Class C 0.25% 0.75%
Class D 0.25% --
Pursuant to a sub-agreement with the Distributor, Merrill Lynch,
Pierce, Fenner & Smith Inc. ("MLPF&S"), a subsidiary of ML & Co.,
also provides account maintenance and distribution services to the
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.
Merrill Lynch EuroFund October 31, 1997
For the year ended October 31, 1997, MLFD earned underwriting
discounts and commissions and MLPF&S earned dealer concessions on
sales of the Fund's Class A and Class D Shares as follows:
MLFD MLPF&S
Class A $5,476 $ 92,115
Class D $9,679 $131,726
For the year ended October 31, 1997, MLPF&S received contingent
deferred sales charges of $1,421,145 and $8,568 relating to
transactions in Class B and Class C Shares, respectively.
In addition, MLPF&S received $75,758 in commissions on the execution
of portfolio security transactions for the Fund for the year ended
October 31, 1997.
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 MLAM at cost.
<PAGE>
Certain officers and/or trustees of the Fund are officers and/or
directors of MLAM, PSI, MLFDS, MLFD, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the year ended October 31, 1997 were $1,075,578,750 and
$1,080,244,807, respectively.
Net realized and unrealized gains (losses) as of October 31, 1997
were as follows:
Realized Unrealized
Gains (Losses) Gains
Long-term investments $ 257,086,513 $ 187,494,904
Financial futures contracts 2,553,911 --
Foreign currency transactions (10,459,785) 87,200
Forward foreign exchange
contracts 265,942 --
------------- -------------
Total $ 249,446,581 $ 187,582,104
============= =============
As of October 31, 1997, net unrealized appreciation for Federal
income tax purposes aggregated $176,480,644, of which $222,194,190
related to appreciated securities and $45,713,546 related to
depreciated securities. The aggregate cost of investments at October
31, 1997 for Federal income tax purposes was $1,239,834,106.
4. Shares of Beneficial Interest:
Net increase (decrease) in net assets derived from beneficial
interest transactions was $286,738,788 and $(127,806,154) for the
years ended October 31, 1997 and October 31, 1996, respectively.
Transactions in shares of beneficial interest for each class were as
follows:
Class A Shares
For the Year Ended Dollar
October 31, 1997 Shares Amount
Shares sold 26,338,718 $ 430,396,173
Shares issued to shareholders
in reinvestment of dividends
and distributions 2,393,410 34,465,523
----------- -------------
Total issued 28,732,128 464,861,696
Shares redeemed (11,210,660) (185,967,493)
----------- -------------
Net increase 17,521,468 $ 278,894,203
=========== =============
<PAGE>
Class A Shares
For the Year Ended Dollar
October 31, 1996 Shares Amount
Shares sold 3,553,169 $ 55,452,673
Shares issued to shareholders in
reinvestment of distributions 885,595 12,345,189
----------- -------------
Total issued 4,438,764 67,797,862
Shares redeemed (5,064,026) (77,283,493)
----------- -------------
Net decrease (625,262) $ (9,485,631)
=========== =============
Class B Shares
For the Year Ended Dollar
October 31, 1997 Shares Amount
Shares sold 12,478,198 $ 191,822,144
Shares issued to shareholders in
reinvestment of dividends
and distributions 8,168,942 108,729,884
----------- -------------
Total issued 20,647,140 300,552,028
Shares redeemed (19,835,758) (306,830,535)
Automatic conversion of
shares (554,263) (8,320,978)
----------- -------------
Net increase (decrease) 257,119 $ (14,599,485)
=========== =============
Merrill Lynch EuroFund October 31, 1997
NOTES TO FINANCIAL STATEMENTS (concluded)
Class B Shares for the Year Dollar
Ended October 31, 1996 Shares Amount
Shares sold 6,274,132 $ 90,913,954
Shares issued to shareholders in
reinvestment of distributions 3,757,600 49,074,253
----------- -------------
Total issued 10,031,732 139,988,207
Shares redeemed (17,727,472) (252,558,644)
Automatic conversion of
shares (592,963) (8,462,694)
----------- -------------
Net decrease (8,288,703) $(121,033,131)
=========== =============
Class C Shares for the Year Dollar
Ended October 31, 1997 Shares Amount
Shares sold 5,368,818 $ 83,195,165
Shares issued to shareholders
in reinvestment of dividends
and distributions 210,334 2,782,759
----------- -------------
Total issued 5,579,152 85,977,924
Shares redeemed (5,285,585) (82,227,446)
----------- -------------
Net increase 293,567 $ 3,750,478
=========== =============
Class C Shares for the Year Dollar
Ended October 31, 1996 Shares Amount
Shares sold 2,608,151 $ 37,883,986
Shares issued to shareholders
in reinvestment of
distributions 48,252 629,693
----------- -------------
Total issued 2,656,403 38,513,679
Shares redeemed (2,307,504) (33,480,305)
----------- -------------
Net increase 348,899 $ 5,033,374
=========== =============
<PAGE>
Class D Shares for the Year Dollar
Ended October 31, 1997 Shares Amount
Shares sold 9,883,349 $ 166,073,878
Automatic conversion of
shares 513,600 8,320,978
Shares issued to shareholders
in reinvestment of dividends
and distributions 1,058,039 15,172,446
----------- -------------
Total issued 11,454,988 189,567,302
Shares redeemed (10,135,898) (170,873,710)
----------- -------------
Net increase 1,319,090 $ 18,693,592
=========== =============
Class D Shares for the Year Dollar
Ended October 31, 1996 Shares Amount
Shares sold 10,577,168 $ 162,480,079
Automatic conversion of
shares 557,082 8,462,694
Shares issued to shareholders
in reinvestment of
distributions 421,472 5,854,244
----------- -------------
Total issued 11,555,722 176,797,017
Shares redeemed (11,631,183) (179,117,783)
----------- -------------
Net decrease (75,461) $ (2,320,766)
=========== =============
6. Commitments:
At October 31, 1997, the Fund had outstanding foreign exchange
contracts under which it had agreed to purchase and sell foreign
currency aggregating approximately $137,249,000 and $137,455,000,
respectively.
Merrill Lynch EuroFund October 31, 1997
<AUDIT-REPORT>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders,
Merrill Lynch EuroFund:
We have audited the accompanying statement of assets and
liabilities, including the schedule of investments, of Merrill Lynch
EuroFund as of October 31, 1997, the related statements of
operations for the year then ended, and changes in net assets for
each of the years in the two-year period then ended, and the
financial highlights for each of the years in the five-year period
then ended. These financial statements and the financial highlights
are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and the
financial highlights based on our audits.
<PAGE>
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements and the financial highlights are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.
Our procedures included confirmation of securities owned at October
31, 1997 by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights
present fairly, in all material respects, the financial position of
Merrill Lynch EuroFund as of October 31, 1997, the results of its
operations, the changes in its net assets, and the financial
highlights for the respective stated periods in conformity with
generally accepted accounting principles.
Deloitte & Touche LLP
Princeton, New Jersey
December 12, 1997
</AUDIT-REPORT>
<TABLE>
IMPORTANT TAX INFORMATION (unaudited)
<CAPTION>
The following information summarizes all per share distributions
paid by Merrill Lynch EuroFund during its taxable year ended October
31, 1997:
Foreign Non-Qualifying Total Foreign Taxes Long-Term
Record Payable Source Domestic Ordinary Paid or Capital
Date Date Income Income Income Withheld Gains
<S> <C> <C> <C> <C> <C> <C> <C>
Class A: 12/11/96 12/19/96 $.498639 $.547959 $1.046598 $.071445 $1.724938
12/31/96 1/09/97 $.000445 $.000490 $ .000935 -- --
Class B: 12/11/96 12/19/96 $.422084 $.463832 $ .885916 $.071445 $1.724938
12/31/96 1/09/97 $.000445 $.000490 $ .000935 -- --
Class C: 12/11/96 12/19/96 $.448011 $.492322 $ .940333 $.071445 $1.724938
12/31/96 1/09/97 $.000445 $.000490 $ .000935 -- --
<PAGE>
Class D: 12/11/96 12/19/96 $.479253 $.526655 $1.005908 $.071445 $1.724938
12/31/96 1/09/97 $.000445 $.000490 $ .000935 -- --
All of the foreign taxes paid or withheld represent taxes incurred
by the Fund on dividends received by the Fund from foreign sources.
Foreign taxes paid or withheld should be included in taxable income
with an offsetting deduction from gross income or as a credit for
taxes paid to foreign governments. You should consult your tax
adviser regarding the appropriate treatment of foreign taxes paid.
Please retain this information for your records.
</TABLE>
Merrill Lynch EuroFund October 31, 1997
PORTFOLIO CHANGES (unaudited)
For the Quarter Ended October 31, 1997
Additions
ABN Amro Holding N.V.
BASF AG
B.A.T. Industries PLC
*BMW AG
Banque Nationale de Paris
Bayer AG
British Telecommunications PLC
CRH PLC
Christian Dior S.A.
Compagnie Generale des Eaux
Daimler-Benz A.G.
Endesa S.A.
Energy Group PLC
France Telecom S.A.
General Electric Company PLC
*Guney Biracilik Ve Malt Sanayii A.S.
*Haci Omer Sabanci Holding
Ispat International N.V.
*Koc Holding A.S.
*Koc Yatirim Ve Sanayi Mamulleri Pazarlama A.S.
Muenchener Rueckversicherungs-Gesellschaft AG
*Nestle S.A.
Novartis AG (Registered)
*Polifarb Cieszyn-Wroclaw S.A.
Repsol S.A.
Rio Tinto PLC (Registered)
*Roche Holding AG
*Severn Trent PLC (Class B)
VEBA AG
<PAGE>
Deletions
Aksu Iplik Dokuma Ve Boya Apre Fabrikalari T.A.S.
Alpha Credit Bank
*BMW AG
Baticim Bati Anadolu Cimento Sanayii A.S.
Bayrakli Boya Ve Vernik Sanayii A.S.
Bertrand Faure S.A.
Ceske Energeticke Zavody
Cofinec S.A. (GDR)
Cukurova Elektrik A.S.
Deutsche Lufthansa AG
Dogan Sirketler Grubu Holding A.S.
Egis
Electricidade de Portugal S.A.
Elektrim S.A.
Elektrobudowa S.A.
Eregli Demir Ve Celik Fabrikalari T.A.S.
Guinness PLC
*Guney Biracilik Ve Malt Sanayii A.S.
*Haci Omer Sabanci Holding
Hellenic Bottling Co.
*Koc Holding A.S.
*Koc Yatirim Ve Sanayi Mamulleri Pazarlama A.S.
Komercni Banka A.S.
Maillis
Mostostal Zabrze
*Nestle S.A.
Otosan Otomobil Sanayii A.S.
Pick Szeged Reszvenytarsasag
*Polifarb Cieszyn-Wroclaw S.A.
Portugal Telecom S.A.
RAO Gazprom (ADR)
*Roche Holding AG
SPT Telecom A.S.
*Severn Trent PLC (Class B)
Sevgi Ozel Saglik Hizmetleri A.S.
Tansas Izmir Buyuksehir Belediyesi Ic Ve Dis
Ticaret A. S.
Thames Water PLC
Titan Cement Co.
Wielkopolsky Bank Kredytowy S.A.
VSZ
Vestel Elektronik Sanayii Ve Ticaret A.S.
[FN]
*Added and deleted in the same quarter.
<PAGE>
Merrill Lynch EuroFund October 31, 1997
PORTFOLIO INFORMATION (unaudited)
As of October 31, 1997
Percent of
Ten Largest Equity Holdings Net Assets
Novartis AG (Registered) 2.7%
Telecom Italia S.p.A. 2.7
MontEdison S.p.A. 2.6
Thyssen AG 2.6
Unilever PLC 2.3
Oerlikon-Buehrle Holding AG 2.0
Royal PTT Nederland N.V. 1.9
Assurances Generales de France (AGF) 1.8
BTR PLC 1.7
B.A.T. Industries PLC 1.7
Percent of
Ten Largest Industries Net Assets
Diversified Holdings 8.0%
Telecommunications 6.7
Insurance 6.6
Chemicals 6.3
Paper & Forest Products 5.2
Financial Services 4.5
Retail 4.0
Pharmaceuticals 3.8
Banking 3.5
Food & Beverage 3.1
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
Philip M. Mandel, Secretary
<PAGE>
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
