MERRILL LYNCH
EUROFUND
FUND LOGO
Quarterly Report
January 31, 1999
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
Printed on post-consumer recycled paper
MERRILL LYNCH EUROFUND
PORTFOLIO INFORMATION
Pie graph depicting Portfolio Information As a Percentage of Stocks
at Value As of January 31, 1999
Greece 0.6%
Ireland 1.6%
Norway 1.2%
Finland 5.1%
Sweden 6.0%
United Kingdom 15.5%
Germany 25.7%
Netherlands 9.8%
Switzerland 7.6%
Italy 7.4%
Emerging Europe* 1.5%
Spain 0.5%
France 17.5%
[FN]
*Countries include Hungary, Poland, and Slovakia.
EUROPEAN STOCK MARKET PERFORMANCE
Bar graph depicting European Stock Market Performance in terms of
Total Return for the Three-Month Period Ended January 31, 1999 In US
dollars*
Norway - 0.9%
Denmark + 3.1%
Switzerland + 5.1%
Germany + 5.7%
United Kingdom + 6.9%
Netherlands + 9.2%
Spain + 9.6%
Italy +13.8%
France +14.3%
Sweden +14.8%
Ireland +18.5%
Finland +40.0%
Source: Financial Times/Standard & Poor's--Actuaries Index.
[FN]
*For the three-month period ended January 31, 1999, total investment
return for the Financial Times/Standard & Poor's--Actuaries Europe
Index was +9.21%.
Merrill Lynch EuroFund
January 31, 1999
DEAR SHAREHOLDER
During the quarter ended January 31, 1999, the unmanaged Financial
Times/Standard & Poor's--Actuaries Europe Index had a total return
of +9.21%, while the total return for the unmanaged Morgan Stanley
Capital International Europe Index was +9.22%. For the same period,
Merrill Lynch EuroFund's Class A, Class B, Class C and Class D
Shares had total returns of +11.02%, +10.69%, +10.69% and +10.94%,
respectively, outperforming unmanaged indexes of the individual
European markets. The Fund's performance also was better than the
Lipper European Region Funds Average, which returned +9.27% for the
same three-month period. (Fund results shown do not reflect sales
charges, and would be lower if sales charges were included. Complete
performance information can be found on pages 4 and 5 of this report
to shareholders.)
The January quarter saw a generally supportive environment for
equity markets, with further cuts in interest rates, low inflation
and moderate-to-strong economic growth. Merger and acquisition
activity accelerated again to very high levels, and investor
liquidity remained abundant. The European Monetary Union commenced
smoothly, and this led to much increased cross-border investment
flows and a general increase in confidence in equity investing. Even
the Brazilian crisis failed to unnerve investors for long, and
European equity markets emerged once again at or near historic peak
levels.
Although equity markets displayed a high level of confidence during
the quarter ended January 31, 1999, the economic outlook remains
rather uncertain. The US economy has so far defied expectations and
performed very strongly in the final quarter of 1998. European
economies were not quite so robust, primarily because of a further
slowdown in export growth. Economic growth forecasts for Europe were
revised down to the 1.5%--2% range for 1999. However, recent survey
data might indicate a bottoming out, and further downward revisions
may not be necessary. We believe that strong equity markets, the
impact of recent and prospective interest rate cuts, high levels of
consumer confidence and a tentative economic recovery in Asia should
combine to ensure that economic growth in Europe continues at a
reasonable pace. If this is the case, the downgrading of corporate
earnings estimates should also come to an end.
As European bond yields proceeded to set new lows, the bond/equity
relationship continued to offer strong support to equity markets.
Equities remain inexpensive relative to bonds, and with bonds
unlikely to fall in the short term, the equity risk premium is at a
reasonable level, and earnings forecasts are less likely to be
further downgraded. Thus, equities may well rise further, especially
as the introduction of the euro has unleashed substantial funds for
equity investment. On an absolute valuation basis, equities are very
highly valued by historical standards, but this is understandable
given increasing returns on corporate capital. However, within the
markets, a valuation gulf remains between value/ small cap stocks,
which are at historically low valuations, and growth/large cap
stocks, which are at historically high valuations. While most
investors are aware of this phenomenon, it has only been recently
that this gap has begun to close. Should relative valuations come
more into line with historic norms, performance differentials
between the two groups will be very large.
Investment Strategy
During the quarter ended January 31, 1999, the Fund was virtually
fully invested because of the positive short-term outlook for
European equities. The geographic and sector composition of the Fund
was little changed from the previous quarter, and the Fund is
currently positioned in those areas of the market that should do
particularly well if the "value gap" narrows, as anticipated. At
this time, the Fund has limited exposure to expensive
pharmaceutical, technology and telecommunication stocks, and major
exposure to industrial stocks, such as chemicals, steels and paper.
As such, the Fund's exposure to very large cap stocks is fairly
limited. Investment in emerging Europe, at around 2% of net assets,
remains appropriate, in our opinion.
Merrill Lynch EuroFund
January 31, 1999
The link between a strong US stock market and a robust US economy,
and therefore global economy, is becoming increasingly powerful.
Therefore, a setback in the US equity market could have much broader
consequences. For the moment, the Brazilian situation appears to be
contained. However, the risk remains that the whole of Latin America
suffers, and that this could have broader repercussions, including a
possible devaluation of the Chinese renminbi. While investors seem
to be able to partially disregard these problems at present, these
uncertainties could lead to more serious declines in global equity
markets.
In Conclusion
Despite numerous risks, a number of factors in Europe could produce
an environment in which equities could make further progress.
However, we will continue to monitor the global situation very
carefully, and are prepared to take swift action to protect
shareholders' interests should the need arise.
We thank you for your investment in Merrill Lynch EuroFund, and we
look forward to reviewing our outlook and strategy with you in the
next report to shareholders.
Sincerely,
(Terry K. Glenn)
Terry K. Glenn
Executive Vice President
(Adrian C. Holmes)
Adrian C. Holmes
Senior Vice President and Portfolio Manager
March 4, 1999
Merrill Lynch EuroFund
January 31, 1999
PERFORMANCE DATA
About Fund Performance
Investors are able to purchase shares of the Fund through the
Merrill Lynch Select Pricing SM System, which offers four pricing
alternatives:
* Class A Shares incur a maximum initial sales charge (front-end
load) of 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 "Recent Performance
Results" and "Average Annual Total Return" tables assume
reinvestment of all dividends and capital gains distributions at net
asset value on the ex-dividend date. Investment return and principal
value of shares will fluctuate so that shares, when redeemed, may be
worth more or less than their original cost. Dividends paid to each
class of shares will vary because of the different levels of account
maintenance, distribution and transfer agency fees applicable to
each class, which are deducted from the income available to be paid
to shareholders.
Average Annual Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 12/31/98 +25.01% +18.44%
Five Years Ended 12/31/98 +18.11 +16.84
Ten Years Ended 12/31/98 +15.13 +14.51
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 12/31/98 +23.79% +19.83%
Five Years Ended 12/31/98 +16.90 +16.90
Ten Years Ended 12/31/98 +13.94 +13.94
[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 12/31/98 +23.75% +22.76%
Inception (10/21/94)
through 12/31/98 +18.64 +18.64
[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 12/31/98 +24.71% +18.16%
Inception (10/21/94)
through 12/31/98 +19.59 +18.06
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
Merrill Lynch EuroFund
January 31, 1999
PERFORMANCE DATA (concluded)
<TABLE>
Recent Performance Results*
<CAPTION>
Ten Years/
12 Month 3 Month Since Inception
Total Return Total Return Total Return
<S> <C> <C> <C>
ML EuroFund Class A Shares +21.87% +11.02% +292.65%
ML EuroFund Class B Shares +20.62 +10.69 +254.34
ML EuroFund Class C Shares +20.63 +10.69 +103.92
ML EuroFund Class D Shares +21.64 +10.94 +111.10
<FN>
*Investment results shown do not reflect sales charges; results
shown would be lower if a sales charge was included. Total
investment returns are based on changes in net asset values for the
periods shown, and assume reinvestment of all dividends and capital
gains distributions at net asset value on the ex-dividend date. The
Fund's ten year/since inception periods are Class A & Class B
Shares, for the ten years ended 1/31/99 and Class C & Class D
Shares, from 10/21/94 to 1/31/99.
</TABLE>
PORTFOLIO INFORMATION
As of January 31, 1999
Percent of
Ten Largest Equity Holdings Net Assets
Telecom Italia S.p.A. 4.5%
Societe EuraFrance S.A. 3.0
Koninklijke (Royal) Philips
Electronics N.V. 2.5
Thyssen AG 2.5
Novartis AG (Registered Shares) 2.3
MontEdison S.p.A. 2.3
Hoechst AG 2.3
Siemens AG 2.2
Elf Aquitaine S.A. 2.1
UBS AG 2.1
Percent of
Ten Largest Industries Net Assets
Banking 13.9%
Chemicals 8.4
Telecommunications 6.8
Paper & Forest Products 6.2
Financial Services 6.1
Insurance 5.0
Electrical Equipment 4.8
Diversified Holdings 3.7
Banking & Financial 2.7
Mining 2.5
Equity Portfolio Changes for the
Quarter Ended January 31, 1999
Additions
ASDA Group PLC
Alpha Credit Bank
Compagnie de Saint Gobain
Elektrim Spolka Akcyjna S.A.
Muenchener Rueckver-
sicherungs-Gesellschaft AG
(Registered Shares)
Stora Enso Oyj (A Shares)
Stora Enso Oyj (Class R)
Telefonica S.A.
Telefonica S.A. (New)
Total S.A. (Class B)
Deletions
Enso-Gutzeit OY 'R'
(Ordinary)(Registered)
HSBC Holdings PLC
Moebel Walther AG (Preferred)
Orange PLC
Rio Tinto PLC (Registered)
STMicroelectronics N.V.
Schibsted ASA
Societe Suisse pour la
Microelectronique et
l'Horlogerie AG
(Registered)
Stora Kopparbergs AB
Twentsche Kabel Holding N.V.
Merrill Lynch EuroFund
January 31, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (in US dollars)
<CAPTION>
Shares Percent of
Industries Held Investments Cost Value Net Assets
Finland
<S> <C> <S> <C> <C> <C>
Metals & Mining 990,307 Outokumpu Oyj $ 14,892,711 $ 9,215,163 0.5%
Paper & Forest 2,266,341 Metsa-Serla Oyj (Class B) 17,992,809 15,688,247 0.9
Products 511,301 Stora Enso Oyj (A Shares) 4,534,774 4,386,493 0.2
2,591,465 Stora Enso Oyj (Class R) 22,513,337 23,291,094 1.3
790,706 UPM-Kymmene Oyj 17,268,069 20,637,743 1.1
-------------- -------------- ------
62,308,989 64,003,577 3.5
Telecommunications 96,486 Nokia Oyj (Class A) 6,880,779 13,796,031 0.7
Total Investments in Finland 84,082,479 87,014,771 4.7
France
Automobiles & 64,451 PSA Peugeot Citroen 7,767,416 10,941,594 0.6
Equipment
Banking 260,404 Banque Nationale de Paris (BNP) 15,608,495 23,625,741 1.3
179,459 Societe Generale (Class A) 25,291,960 32,176,712 1.7
-------------- -------------- ------
40,900,455 55,802,453 3.0
Building & 97,452 Compagnie de Saint Gobain 13,422,122 13,624,507 0.8
Construction
Communication 128,510 Alcatel Alsthom Cie Generale d'
Equipment Electricite S.A. 20,780,983 14,962,481 0.8
Energy 358,703 Elf Aquitaine S.A. 46,087,088 38,833,158 2.1
Financial Services 315,905 Compagnie Financiere de Paribas 18,381,026 30,113,075 1.6
91,340 Societe EuraFrance S.A. 30,860,307 54,935,895 3.0
-------------- -------------- ------
49,241,333 85,048,970 4.6
Insurance 156,035 Axa 11,452,885 22,629,357 1.2
Machinery 137,845 Compagnie Fives-Lille 6,613,883 10,073,867 0.6
Metals & Steel 2,430,525 Usinor S.A. 36,578,167 31,029,297 1.7
Oil & Related 144,103 Total S.A. (Class B) 14,717,758 14,635,764 0.8
Total Investments in France 247,562,090 297,581,448 16.2
Germany
Auto & Truck 326,221 DaimlerChrysler AG 25,148,385 33,946,936 1.9
Automobile 338,187 Volkswagen AG 20,179,698 26,518,825 1.4
Banking 148,248 Commerzbank AG 5,388,529 4,424,497 0.2
582,028 Deutsche Bank AG 45,339,557 32,925,196 1.8
176,601 Dresdner Bank AG 10,238,267 7,214,645 0.4
270,543 HypoVereinsbank AG 20,646,097 17,561,098 1.0
-------------- -------------- ------
81,612,450 62,125,436 3.4
</TABLE>
Merrill Lynch EuroFund
January 31, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Shares Percent of
Industries Held Investments Cost Value Net Assets
Germany (concluded)
<S> <C> <S> <C> <C> <C>
Chemicals 253,318 BASF AG $ 10,927,557 $ 9,342,621 0.5%
637,529 Bayer AG 26,013,399 24,344,695 1.3
77,016 Henkel KGaA 3,295,326 5,112,769 0.3
290,660 Henkel KGaA (Preferred) 13,952,609 19,955,379 1.1
992,432 Hoechst AG 38,436,892 42,570,807 2.3
-------------- -------------- ------
92,625,783 101,326,271 5.5
Construction 33,402 Philipp Holzmann AG 12,511,136 4,434,837 0.2
Electrical Equipment 556,525 Siemens AG 36,844,771 39,503,113 2.2
Engineering 321,783 Kloeckner-Werke AG 14,985,368 21,909,561 1.2
Insurance 38,392 Muenchener Rueckversicherungs-
Gesellschaft AG 7,388,926 9,271,109 0.5
38,392 Muenchener Rueckversicherungs-
Gesellschaft AG (Registered Shares) 7,419,965 9,366,957 0.5
-------------- -------------- ------
14,808,891 18,638,066 1.0
Machinery & 217,570 Jungheinrich AG (Preferred) 4,412,664 2,691,193 0.1
Equipment 103,233 Mannesmann AG 8,649,305 14,573,312 0.8
-------------- -------------- ------
13,061,969 17,264,505 0.9
Medical Equipment 43,086 Fresenius AG (Preferred) 8,524,834 7,935,495 0.4
Mining 268,321 Thyssen AG 55,558,465 45,369,110 2.5
Oil--International 428,666 RWE AG 21,107,621 20,382,262 1.1
Utilities 625,206 VEBA AG 41,690,089 37,176,949 2.0
Total Investments in Germany 438,659,460 436,531,366 23.7
Greece
Banking 83,757 Alpha Credit Bank 8,447,669 9,779,406 0.5
Total Investments in Greece 8,447,669 9,779,406 0.5
Hungary
Banking 209,238 OTP Bank Rt. (GDR)(a) 11,066,477 11,403,471 0.6
Oil & Gas Producers 429,475 Mol Magyar Olaj-es Gazipari Rt. (GDR)(a) 11,571,345 11,907,194 0.7
Total Investments in Hungary 22,637,822 23,310,665 1.3
Ireland
Banking 665,961 Bank of Ireland 10,180,373 15,276,308 0.8
Building & 506,155 CRH PLC 5,533,404 8,270,517 0.5
Construction
Food 693,901 Greencore Group PLC 3,481,856 2,706,370 0.1
Total Investments in Ireland 19,195,633 26,253,195 1.4
</TABLE>
Merrill Lynch EuroFund
January 31, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Shares Percent of
Industries Held Investments Cost Value Net Assets
Italy
<S> <C> <S> <C> <C> <C>
Diversified Holdings 42,118,867 MontEdison S.p.A. $ 33,930,370 $ 42,777,859 2.3%
Telecommunications 12,245,239 Telecom Italia S.p.A. 61,690,951 82,680,588 4.5
Total Investments in Italy 95,621,321 125,458,447 6.8
Netherlands
Chemicals 736,470 Akzo Nobel N.V. 25,151,247 29,418,265 1.6
285,370 European Vinyls Corporation
International N.V. 10,474,473 2,266,865 0.1
-------------- -------------- ------
35,625,720 31,685,130 1.7
Diversified Holdings 285,466 Internatio-Muller N.V. 7,753,277 6,074,003 0.3
Electrical Equipment 628,241 Koninklijke (Royal) Philips
Electronics N.V. 31,253,580 45,627,385 2.5
Financial Services 463,869 ING Groep N.V. 18,655,960 27,004,245 1.5
Paper & Forest 2,108,845 Buhrmann N.V. 44,535,332 34,700,201 1.9
Products
Steel 174,270 Ispat International N.V. 4,720,005 1,325,003 0.1
1,161,001 Ispat International N.V. (NY
Registered Shares) 19,453,937 8,780,070 0.4
-------------- -------------- ------
24,173,942 10,105,073 0.5
Telecommunications 156,218 KPN N.V. 6,291,962 8,642,214 0.5
Transport Services 117,568 Koninklijke Pakhoed N.V. 4,561,548 2,688,336 0.1
Total Investments in the Netherlands 172,851,321 166,526,587 9.0
Norway
Computer Software 1,006,619 Merkantildata ASA 6,172,754 12,157,718 0.7
Oil & Gas Producers 786,098 Saga Petroleum ASA 10,970,845 7,459,819 0.4
Total Investments in Norway 17,143,599 19,617,537 1.1
Poland
Electrical Equipment 597,678 Bydgoska Fabryka Kabli S.A. 893,400 984,736 0.0
122,810 Elektrim Spolka Akcyjna S.A. 1,003,591 1,538,469 0.1
Total Investments in Poland 1,896,991 2,523,205 0.1
</TABLE>
Merrill Lynch EuroFund
January 31, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Shares Percent of
Industries Held Investments Cost Value Net Assets
Slovakia
<S> <C> <S> <C> <C> <C>
Metals & Mining 58,286 Zavod SNP A.S. $ 988,115 $ 47,845 0.0%
Total Investments in Slovakia 988,115 47,845 0.0
Spain
Telecommunications 177,462 Telefonica S.A. 7,807,168 8,105,701 0.5
8,527 Telefonica S.A. (New) 0 387,058 0.0
Total Investments in Spain 7,807,168 8,492,759 0.5
Sweden
Appliances 1,581,170 Electrolux AB 16,817,344 24,547,919 1.3
Automobiles & 549,126 Volvo AB (B Shares) 17,376,361 14,972,064 0.8
Equipment
Engineering 189,250 Svedala Industri AB 2,485,262 2,865,290 0.2
Insurance 1,294,756 Skandia Forsakrings AB 9,874,016 21,098,054 1.1
Metals & Steel 924,002 Avesta Sheffield AB 7,741,629 2,999,468 0.2
Paper & Forest 510,201 Mo och Domsjo AB (MoDo) (Class B) 12,808,027 13,321,602 0.7
Products 6,095,550 Rottneros AB 8,904,861 2,463,623 0.1
-------------- -------------- ------
21,712,888 15,785,225 0.8
Pharmaceutical-- 904,293 Astra AB (A Shares) 13,878,125 19,550,588 1.1
Prescription
Total Investments in Sweden 89,885,625 101,818,608 5.5
Switzerland
Banking 27,803 Banque Cantonale de Geneve (BCG) 9,263,273 5,484,213 0.3
158,788 Credit Suisse Group (Registered Shares) 26,978,066 25,280,795 1.4
-------------- -------------- ------
36,241,339 30,765,008 1.7
Banking & Financial 119,228 UBS AG 30,502,877 38,552,766 2.1
Drugs 23,082 Novartis AG (Registered Shares) 34,936,394 43,188,300 2.3
Food & Beverage 8,678 Nestle S.A. (Registered Shares) 15,770,601 15,864,325 0.9
Total Investments in Switzerland 117,451,211 128,370,399 7.0
</TABLE>
Merrill Lynch EuroFund
January 31, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Shares Percent of
Industries Held Investments Cost Value Net Assets
United Kingdom
<S> <C> <S> <C> <C> <C>
Automobiles & 2,092,641 LucasVarity PLC $ 6,606,415 $ 9,965,952 0.5%
Equipment
Banking 1,644,018 Barclays PLC 35,767,910 36,717,366 2.0
1,870,200 National Westminster Bank PLC
(Ordinary) 33,878,073 34,275,066 1.9
-------------- -------------- ------
69,645,983 70,992,432 3.9
Beverages 2,036,419 Allied Domecq PLC (Ordinary) 15,293,731 15,684,332 0.8
925,199 Bass PLC 13,596,207 12,458,765 0.7
-------------- -------------- ------
28,889,938 28,143,097 1.5
Building & 891,827 Jarvis PLC 10,634,239 8,860,578 0.5
Construction
Chemicals 2,534,523 Imperial Chemical Industries PLC 22,001,151 22,600,712 1.2
Computer/ 398,875 Misys PLC 1,566,749 4,187,295 0.2
Commercial/Office
Diversified Holdings 10,877,952 BTR PLC 42,850,167 19,426,853 1.1
Food 1,825,174 Safeway PLC 10,383,035 8,167,645 0.4
Insurance 1,061,319 Allied Zurich AG 14,508,501 16,339,669 0.9
2,088,705 Guardian Royal Exchange PLC 8,977,732 12,605,512 0.7
2,396,773 Royal & Sun Alliance Insurance Group PLC 23,899,312 18,184,230 1.0
-------------- -------------- ------
47,385,545 47,129,411 2.6
Metals 1,000,326 Johnson Matthey PLC 9,572,778 6,899,489 0.4
Oil & Related 649,357 Expro International Group PLC 5,177,253 2,132,748 0.1
Retail Trade 5,199,339 ASDA Group PLC 12,997,767 14,024,247 0.8
Steel 4,364,523 British Steel PLC 9,051,465 9,586,424 0.5
Telecommunications 797,631 Cable & Wireless Communications PLC 6,266,983 11,520,303 0.6
Total Investments in the United Kingdom 283,029,468 263,637,186 14.3
<CAPTION>
Face
Amount Short-Term Securities
<S> <C> <S> <C> <C> <C>
Repurchase US$ 42,703,000 Warburg Dillion Read, LLC, purchased
Agreements* on 1/29/1999 to yield 4.60% to
2/01/1999 42,703,000 42,703,000 2.3
Total Investments in Short-Term
Securities 42,703,000 42,703,000 2.3
Total Investments 1,649,962,972 1,739,666,424 94.4
</TABLE>
Merrill Lynch EuroFund
January 31, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<CAPTION>
Nominal Value
Covered by Premiums Percent of
Options Written Issue Received Value Net Assets
<S> <C> <S> <C> <C> <C>
Call Options Written 103,233 Mannesmann, expiring April 1999
at US$ 132.06 $ (841,797) $ (873,314) 0.0%
Total Options Written (841,797) (873,314) 0.0
Total Investments, Net of Options Written $1,649,121,175 1,738,793,110 94.4
==============
Variation Margin** 1,308,058 0.1
Foreign Time Deposits*** 128,572,736 7.0
Liabilities in Excess of Other Assets (26,722,040) (1.5)
-------------- ------
Net Assets $1,841,951,864 100.0%
============== ======
Net Asset Class A--Based on net assets of $618,783,413
Value: and 39,850,943 shares outstanding $ 15.53
==============
Class B--Based on net assets of $830,068,481 and
60,364,147 shares outstanding $ 13.75
==============
Class C--Based on net assets of $57,331,510 and
4,231,421 shares outstanding $ 13.55
==============
Class D--Based on net assets of $335,768,460 and
21,795,471 shares outstanding $ 15.41
==============
<FN>
(a)Global Depositary Receipts (GDR).
*Repurchase Agreements are fully collateralized by US Government &
Agency Obligations.
**Financial futures contracts purchased as of January 31, 1999 were
as follows:
Number of Expiration
Contracts Issue Exchange Date Value
265 DAX Index DTB March 1999 $ 39,075,065
Total Financial Futures Contracts Purchased
(Total Contract Price--$38,340,315) $ 39,075,065
============
***Time deposit bears interest at 3.062% and matures on 2/01/1999.
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OFFICERS AND TRUSTEES
Arthur Zeikel, President and Trustee
Donald Cecil, Trustee
Roland M. Machold, Trustee
Edward H. Meyer, Trustee
Charles C. Reilly, Trustee
Richard R. West, Trustee
Edward D. Zinbarg, Trustee
Terry K. Glenn, Executive Vice President
Adrian C. Holmes, Senior Vice President
and Portfolio Manager
Alan J. Albert, Vice President
Donald C. Burke, Vice President and Treasurer
Philip M. Mandel, Secretary
Gerald M. Richard, Treasurer and Norman R. Harvey, Senior Vice
President of Merrill Lynch EuroFund have recently retired. Their
colleagues at Merrill Lynch Asset Management, L.P. join the Fund's
Board of Trustees in wishing Mr. Richard and Mr. Harvey well in
their retirements.
Custodian
Brown Brothers Harriman & Co.
40 Water Street
Boston, MA 02109
Transfer Agent
Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 637-3863
