MERRILL LYNCH
GLOBAL BOND
FUND
For Investment and
Retirement
FUND LOGO
Semi-Annual Report
June 30, 1996
<PAGE>
Officers and Trustees
Arthur Zeikel, President and Trustee
Donald Cecil, Trustee
Edward H. Meyer, Trustee
Charles C. Reilly, Trustee
Richard R. West, Trustee
Edward D. Zinbarg, Trustee
Terry K. Glenn, Executive Vice President
N. John Hewitt, Senior Vice President
Donald C. Burke, Vice President
Sean J. Casey, Vice President
Robert J. Parish, Vice President
Gerald M. Richard, Treasurer
Mark B. Goldfus, Secretary
Custodian
State Street Bank and Trust Company
P.O. Box 351
225 Franklin Street
Boston, MA 02101
Transfer Agent
Merrill Lynch Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 637-3863
<PAGE>
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
Global Bond Fund
For Investment
And Retirement
Box 9011
Princeton, NJ
08543-9011
Merrill Lynch Global Bond Fund for Investment and Retirement
PORTFOLIO INFORMATION
Type of Issues*
As of June 30, 1996
A bar chart illustrating the following percentages:
US Government Obligations 0.85%
Financial Services 28.96%
Beverages 0.93%
Sovereign Government Obligations 61.47%
Commercial Paper 10.79%
Geographical Diversification*
As of June 30, 1996
A pie chart illustrating the following percentages:
<PAGE>
Denmark 1.45%
United States 13.45%
Italy 14.32%
Spain 4.77%
United Kingdom 0.93%
Japan 16.53%
France 3.67%
Germany 6.50%
Sweden 10.27%
Canada 4.34%
New Zealand 4.51%
European Currency
Units 4.44%
Australia 17.82%
Maturity of Investments*
As of June 30, 1996
A bar chart depicting the following percentages:
5 yrs-10 yrs 51%
10 years+ 1%
0-6 months 11%
6 months-5 yrs 40%
[FN]
*Percent of net assets may not equal 100%.
DEAR SHAREHOLDER
Year-to-date, global bond markets performed in a variety of ways. In
Europe, there were convergence trades all year, benign inflation,
continued concern about the European Monetary Union (EMU), and
political strife. In the United States, there was slow growth
through fourth quarter 1995, and a sharp jobs increase caused growth
and inflationary fears to rise. Finally, after almost five years
Japan seems to be emerging from its recession with a surprising
growth rate.
During the first six months of 1996, global bond markets hit new
multi-year lows in yields before skyrocketing as investor fears rose
over the potential for gross domestic product (GDP) pickups
worldwide. In May 1996, the G-3 (Germany, Japan and the United
States) showed to what extent that pickup could be. For the first
time in many years, investors fear that the major world economies
are in economic synch with each other. The long hoped for fiscal
changes in Italy, Sweden and, to a lesser extent, Spain, are being
implemented and each of these economies is being reevaluated as to
how they trade against each other as well as core Europe and the
United States. In many European bond markets, the interest spread
relative to German bonds narrowed to the tightest levels in modern
times because investors believe that EMU will occur. Twelve months
ago this concept had just begun to take hold.
German reunification progressed at an astounding pace and "one
Germany" is now a reality in a nationalistic and economic sense.
This process slowed Germany's economic expansion during the second
half of 1995. Yet as 1996 unfolded, the economy appeared to have
bounced back. German consumers regained confidence in their markets
and bought autos, housing and larger durable goods. The inflation
premium that hampered some of the weaker markets for years also
began to disappear as inflation was brought under greater control
and new fiscal agendas were promoted, and more importantly,
followed. Germany announced plans to cut social benefits and adhere
to more stringent spending targets to prepare for EMU. Over the last
six months, the three highest performing markets in US dollar terms,
as measured by the unmanaged JP Morgan Global Government Bond Index,
were: Italy, +15.1%; Sweden, +6.5%; and Spain, +3.2%.
<PAGE>
Merrill Lynch Global Bond Fund for Investment and Retirement was
strongly overweighted in each of these markets since fourth quarter
1995. There were periods when the composition of the Fund shifted
somewhat based on political or currency concerns, but the theme was
consistent.
Japan began to show signs of emerging from a five-year recession,
although analysts continued to consistently underestimate the GDP.
Economic data pointed to a gradual, albeit still fragile, recovery.
Housing and business capital spending is beginning to pick up.
Whether there is enough momentum to sustain the moves is still very
questionable given the offset of the public works spending package,
but economic growth is expanding broadly.
Investment Outlook &
Portfolio Strategy
During the six months ended June 30, 1996, the US dollar
strengthened. However, this movement was not consistent. Instead,
there were three significant levels of consolidation and breakout.
Many countries experienced political problems during the past six
months. For example, there was social unrest in France, a separatist
movement in Canada, multiple breakdowns in the Japanese government,
and bribery trials in Italy reached into the highest levels of
government. In addition, the election concerns in Germany, France
and Italy all impacted the currency markets and investor perception
of individual bond markets to a high degree.
Nonetheless, the US dollar was in an uptrend over the past 12 months.
The bullish case for this rise is that rapid recovery of the US
economy coupled with a sense that inflation, both on a commodity and
wage basis, is under control. The bearish case argues that this is
not a matter of US dollar strength as much as it is of temporary
Deutschemark weakness. In the latter part of 1995, the German
economy experienced some negative GDP growth. However, the German
economy recently experienced a turnaround led by auto and retail
sales, and continued low short-term interest rates. With inflation
of less than 1.7%, real rates of return are still attractive.
However, that tide may be turning. The high-yielding currencies of
Europe also gained significantly not only in Europe, but also
against the US dollar. The dollar-bloc currencies of Australia and
New Zealand also gained against the US dollar as the perception of
political stability and high short-term interest rates reinforced
investor interest in that part of the globe. At this point in 1996,
that may be turning around. The Canadian dollar suffered from the
dual concerns of large offshore investors who abandoned the market
for their home economies, and a very strong fear of the separatist
movement which came to a head in revitalization of the provinces
rather than the emotional difficulty of a confederation split.
However, during the last 12 months the Japanese yen lost almost 25%
of its value. This rapid rise and discount of the currency in a
relatively short time frame is the result of leveraged "hot" money
and the political football being played between Washington and Tokyo
over the trade issue.
<PAGE>
During 1996, Merrill Lynch Global Bond Fund's performance matched
the JP Morgan Global Government Bond Index by being down just over
1.0%. Up until the latter part of June when we reduced the duration
to almost 80% of the Index, the Fund was ahead of the Index. The
reduced duration is based on our belief that during the second half
of the year, the potential exists for even stronger GDP growth in
the United States and core European economies. We believe this will
push interest rates to new highs but that by the fourth quarter of
1996, a significant slowdown will be underway in the United States
which will bring interest rates lower and allow for even greater
currency gains.
Looking ahead, we expect the high-yielding European markets to
continue outperforming core Europe and the United States. This
performance is being driven by a number of factors. The strongest
influence is that investor concerns about the risk levels of these
markets shifted as it became clear that their commitment to tight
fiscal and conservative monetary policies will endure. Within these
high-yielding markets, growth has slowed because of tightening
monetary conditions, both by official policy and currency
appreciation. In the early 1990s these markets led the European
business cycle as performance benefited from the boost to
competitiveness caused by currency depreciation. However, they
currently lag behind other European markets.
We believe that the interest rate lows are behind us in Germany and
France. Italy is just beginning to cut interest rates, and there is
significant scope for Swedish and Spanish yields to fall further.
The lowest near-term risk among the largest bond markets is in
Japan. The gradual scaling back of imminent tightening speculation
suggests a modest near-term resteepening of the yield curve.
Speculation that interest rates will rise as early as July is
inconsistent with the more cautious tenor of Bank of Japan and
Ministry of Finance officials, and Washington politicians' stated
desire for continued monetary policy accommodation from Japan.
In Conclusion
We thank you for your continued investment in Merrill Lynch Global
Bond Fund for Investment and Retirement, and we look forward to
reviewing our outlook and strategy with you again in our next report
to shareholders.
Sincerely,
<PAGE>
(Arthur Zeikel)
Arthur Zeikel
President
(Sean J. Casey)
Sean J. Casey
Vice President and Portfolio Manager
June 31, 1996
PERFORMANCE DATA
About Fund Performance
Investors are able to purchase shares of the Fund through the
Merrill Lynch Select Pricing SM System, which offers four pricing
alternatives:
* Class A Shares incur a maximum initial sales charge (front-end
load) of 4% and bear no ongoing distribution or account maintenance
fees. Class A Shares are available only to eligible investors.
* Class B Shares are subject to a maximum contingent deferred sales
charge of 4% if redeemed during the first year, decreasing 1% each
year thereafter to 0% after the fourth year. In addition, Class B
Shares are subject to a distribution fee of 0.50% and an account
maintenance fee of 0.25%. These shares automatically convert to
Class D Shares after approximately 10 years.
* Class C Shares are subject to a distribution fee of 0.55% 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.
<PAGE>
* Class D Shares incur a maximum initial sales charge of 4% 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. Investment return and principal value of
shares will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost. Dividends paid to each class
of shares will vary because of the different levels of account
maintenance, distribution and transfer agency fees applicable to
each class, which are deducted from the income available to be paid
to shareholders.
<TABLE>
Recent Performance Results
<CAPTION>
12 Month 3 Month
6/30/96 3/31/96 6/30/95 % Change % Change
<S> <C> <C> <C> <C> <C>
Class A Shares* $9.14 $9.24 $9.42 -2.97% -1.08%
Class B Shares* 9.14 9.24 9.42 -2.97 -1.08
Class C Shares* 9.14 9.24 9.42 -2.97 -1.08
Class D Shares* 9.14 9.24 9.42 -2.97 -1.08
Class A Shares--Total Return* +3.20(1) +0.50(2)
Class B Shares--Total Return* +2.49(3) +0.31(4)
Class C Shares--Total Return* +2.41(5) +0.29(6)
Class D Shares--Total Return* +2.93(7) +0.44(8)
Class A Shares--Standardized 30-day Yield 5.71%
Class B Shares--Standardized 30-day Yield 5.19%
Class C Shares--Standardized 30-day Yield 5.11%
Class D Shares--Standardized 30-day Yield 5.47%
<FN>
*Investment results shown do not reflect sales charges; results
shown would be lower if a sales charge was included.
(1)Percent change includes reinvestment of $0.580 per share ordinary
income dividends.
(2)Percent change includes reinvestment of $0.148 per share ordinary
income dividends.
(3)Percent change includes reinvestment of $0.508 per share ordinary
income dividends.
(4)Percent change includes reinvestment of $0.130 per share ordinary
income dividends.
(5)Percent change includes reinvestment of $0.501 per share ordinary
income dividends.
(6)Percent change includes reinvestment of $0.129 per share ordinary
income dividends.
(7)Percent change includes reinvestment of $0.557 per share ordinary
income dividends.
(8)Percent change includes reinvestment of $0.143 per share ordinary
income dividends.
</TABLE>
<PAGE>
PERFORMANCE DATA (continued)
<TABLE>
Performance Summary--Class A Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<S> <C> <C> <C> <C> <C>
10/25/88--12/31/88 $10.22 $10.24 -- $0.251 + 2.66%
1989 10.24 9.77 -- 1.131 + 7.27
1990 9.77 9.93 -- 1.266 +15.64
1991 9.93 10.38 -- 1.045 +16.00
1992 10.38 9.79 $0.096 1.276 + 7.83
1993 9.79 10.03 0.020 0.998 +13.21
1994 10.03 8.96 -- 0.546 - 5.29
1995 8.96 9.54 -- 0.585 +13.39
1/1/96--6/30/96 9.54 9.14 -- 0.271 - 1.21
------ ------
Total $0.116 Total $7.369
Cumulative total return as of 6/30/96: +91.32%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures assume reinvestment of all dividends and capital gains
distributions at net asset value on the payable date, and do not
include sales charge; results would be lower if sales charge was
included.
</TABLE>
<TABLE>
Performance Summary--Class B Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<S> <C> <C> <C> <C> <C>
8/29/86--12/31/86 $10.00 $10.16 -- $0.194 + 3.93%
1987 10.16 10.68 $0.382 1.303 +22.82
1988 10.68 10.24 -- 0.817 + 3.82
1989 10.24 9.77 -- 1.057 + 6.45
1990 9.77 9.93 -- 1.191 +14.76
1991 9.93 10.39 -- 0.969 +15.23
1992 10.39 9.79 0.096 1.197 + 6.91
1993 9.79 10.03 0.020 0.921 +12.36
1994 10.03 8.96 -- 0.475 - 6.01
1995 8.96 9.54 -- 0.514 +12.52
1/1/96--6/30/96 9.54 9.14 -- 0.237 - 1.59
------ ------
Total $0.498 Total $8.875
<PAGE>
Cumulative total return as of 6/30/96: +133.20%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures assume reinvestment of all dividends and capital gains
distributions at net asset value on the payable date, and do not
reflect deduction of any sales charge; results would be lower if
sales charge was deducted.
</TABLE>
PERFORMANCE DATA (concluded)
<TABLE>
Performance Summary--Class C Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<S> <C> <C> <C> <C> <C>
10/21/94--12/31/94 $9.21 $8.96 -- $0.091 - 1.73%
1995 8.96 9.54 -- 0.507 +12.44
1/1/96--6/30/96 9.54 9.14 -- 0.233 - 1.63
------
Total $0.831
Cumulative total return as of 6/30/96: +8.69%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures assume reinvestment of all dividends and capital gains
distributions at net asset value on the payable date, and do not
reflect deduction of any sales charge; results would be lower if
sales charge was deducted.
</TABLE>
<TABLE>
Performance Summary--Class D Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<S> <C> <C> <C> <C> <C>
10/21/94--12/31/94 $9.21 $8.96 -- $0.101 - 1.62%
1995 8.96 9.54 -- 0.562 +13.11
1/1/96--6/30/96 9.54 9.14 -- 0.260 - 1.33
------
Total $0.923
Cumulative total return as of 6/30/96: +9.79%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures assume reinvestment of all dividends and capital gains
distributions at net asset value on the payable date, and do not
include sales charge; results would be lower if sales charge was
included.
</TABLE>
<PAGE>
Average Annual Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 6/30/96 +3.20% -0.93%
Five Years Ended 6/30/96 +8.67 +7.79
Inception (10/25/88)
through 6/30/96 +8.81 +8.24
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 6/30/96 +2.49% -1.39%
Five Years Ended 6/30/96 +7.84 +7.84
Inception (8/29/86)
through 6/30/96 +8.99 +8.99
[FN]
*Maximum contingent deferred sales charge is 4% and is reduced to 0%
after 4 years.
**Assuming payment of applicable contingent deferred sales charge.
% Return % Return
Without CDSC With CDSC**
Class C Shares*
Year Ended 6/30/96 +2.41% +1.44%
Inception (10/21/94)
through 6/30/96 +5.04 +5.04
[FN]
*Maximum contingent deferred sales charge is 1% and is reduced to
0% after 1 year.
**Assuming payment of applicable contingent deferred sales charge.
<PAGE>
% Return Without % Return With
Sales Charge Sales Charge**
Class D Shares*
Year Ended 6/30/96 +2.93% -1.18%
Inception (10/21/94)
through 6/30/96 +5.67 +3.15
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
<TABLE>
SCHEDULE OF INVESTMENTS
<CAPTION>
Face Interest Maturity Value Percent of
Amount Long-Term Obligations Rate Date (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C> <C>
Australia
Sovereign A$ 64,000,000 New South Wales Treasury Corp. 7.00 % 2/01/2000 $ 47,927,023 8.73%
Government 16,000,000 Queensland Treasury Corp. Domestic Issue 8.00 8/14/2001 12,196,619 2.22
Obligations 28,000,000 Queensland Treasury Corp. Global Notes 8.00 7/14/1999 21,772,741 3.96
10,500,000 United Kingdom Gilt 7.00 11/06/2001 15,999,508 2.91
Total Investments in Australia (Cost--$97,629,309) 97,895,891 17.82
Canada
Financial C$ 12,400,000 Bayerische Landesbank 8.625 9/12/2005 9,423,528 1.71
Services
Sovereign 19,300,000 Canadian Government Bond 7.50 3/01/2001 14,422,693 2.63
Government
Obligations
Total Investments in Canada (Cost--$23,634,648) 23,846,221 4.34
Denmark
Sovereign Dkr 47,000,000 Denmark Government Bond 7.00 12/15/2004 7,954,401 1.45
Government
Obligations
Total Investments in Denmark (Cost--$8,064,481) 7,954,401 1.45
European Currency Units
Sovereign ECU 19,500,000 French Government BTAN 6.00 3/16/2001 24,365,441 4.44
Government
Obligations
<PAGE>
Total Investments in European
Currency Units (Cost--$24,227,454) 24,365,441 4.44
France
Financial Frf 50,000,000 Credit Local de France 5.75 8/27/1998 9,907,687 1.80
Services 50,000,000 Interamerican Development Bank (IADB) 7.00 9/13/2000 10,273,081 1.87
Total Investments in France (Cost--$20,418,006) 20,180,768 3.67
Germany
Financial DM 8,000,000 Deutsche Pfandbriefe Bank (DEPFA) 5.625 2/07/2003 5,095,069 0.93
Services 8,000,000 KFW International Finance Inc. 6.75 6/20/2005 5,305,983 0.96
Sovereign 24,600,000 Bundesrepublic Deutschland 6.25 4/26/2006 15,871,124 2.89
Government 8,000,000 Deutschland Republic 6.75 4/22/2003 5,435,897 0.99
Obligations 6,400,000 Land-Baden Wuerttemburg 6.00 1/25/2006 4,007,890 0.73
Total Investments in Germany (Cost--$36,545,314) 35,715,963 6.50
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued)
<CAPTION>
Face Interest Maturity Value Percent of
Amount Long-Term Obligations Rate Date (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C> <C>
Italy
Financial Lit13,600,000,000 European Investment Bank 10.875 % 12/14/2005 $ 9,771,003 1.78%
Services 14,200,000,000 Interamerican Development Bank (IADB) 7.70 2/03/2004 8,629,245 1.57
Sovereign 57,150,000,000 Buoni Poliennali Del Tesoro
Government (Italian Government Bonds) 10.501 1/01/1998 38,992,036 7.10
Obligations 8,000,000,000 Buoni Poliennali Del Tesoro
(Italian Government Bonds) 10.50 4/01/2005 5,616,510 1.02
23,550,000,000 Buoni Poliennali Del Tesoro
(Italian Government Bonds) 9.50 2/01/2006 15,650,784 2.85
Total Investments in Italy (Cost--$77,827,913) 78,659,578 14.32
Japan
Financial YEN 1,600,000,000 Asian Development Bank 3.125 6/29/2005 14,533,504 2.65
Services 1,560,000,000 Export Import Bank of Japan 2.875 7/28/2005 13,867,537 2.52
1,200,000,000 Oesterreichische Kontrollbank
Aktiengesellschaft 1.246 1/29/2001 11,341,610 2.07
400,000,000 Republic of Italy 3.75 6/08/2005 3,755,706 0.68
1,980,000,000 Republic of Italy, Floating Rate Note 0.6692 7/26/1999 18,146,084 3.30
2,910,000,000 World Bank 4.50 3/20/2003 29,166,414 5.31
<PAGE>
Total Investments in Japan (Cost--$95,070,927) 90,810,855 16.53
New Zealand
Sovereign NZ$ 10,400,000 New Zealand Government Bond 8.00 7/15/1998 6,956,491 1.27
Government 20,000,000 New Zealand Government Bond 6.50 2/15/2000 12,589,324 2.29
Obligations 8,000,000 New Zealand Government Bond 8.00 11/15/2006 5,209,647 0.95
Total Investments in New Zealand (Cost--$25,748,125) 24,755,462 4.51
Spain
Sovereign Pta 3,085,000,000 Government of Spain 10.30 6/15/2002 26,199,125 4.77
Government
Obligations
Total Investments in Spain (Cost--$26,115,892) 26,199,125 4.77
Sweden
Sovereign Skr 190,000,000 Government of Sweden 10.25 5/05/2003 32,184,146 5.86
Government 185,000,000 Government of Sweden 6.00 2/09/2005 24,260,012 4.41
Obligations
Total Investments in Sweden (Cost--$56,330,219) 56,444,158 10.27
United
Kingdom
Beverages Pound 3,250,000 Cadbury Schweppes PLC 8.00 12/29/2000 5,087,306 0.93
Sterling
Total Investments in the United Kingdom (Cost--$5,097,548) 5,087,306 0.93
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded)
<CAPTION>
Face Interest Maturity Value Percent of
Amount Long-Term Obligations Rate Date (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C> <C>
United
States
Financial US$ 10,500,000 Credit National 7.00 % 11/14/2005 $ 9,938,250 1.81%
Services
<PAGE>
Total Investments in the United States (Cost--$10,526,250) 9,938,250 1.81
Total Investments in Long-Term Obligations (Cost--$507,236,086) 501,853,419 91.36
Short-Term Obligations
Commercial US$ 29,283,000 Associates Corp. of North America 5.56 7/01/1996 29,283,000 5.33
Paper* 30,000,000 General Electric Capital Corp. 5.56 7/01/1996 30,000,000 5.46
Total Investments in Commercial Paper (Cost--$59,283,000) 59,283,000 10.79
US Government 895,000 United States Treasury Bills 5.05 9/12/1996 885,663 0.16
Obligations* 965,000 United States Treasury Bills (a) 5.065 9/12/1996 954,933 0.17
1,910,000 United States Treasury Bills (a) 5.08 9/12/1996 1,890,075 0.35
960,000 United States Treasury Bills 5.085 9/12/1996 949,985 0.17
Total Investments in US Government Obligations (Cost--$4,681,349) 4,680,656 0.85
Total Investments in Short-Term Obligations (Cost--$63,964,349) 63,963,656 11.64
Total Investments (Cost--$571,200,435) 565,817,075 103.00
Unrealized Depreciation on Forward Foreign Exchange Contracts** (392,975) (0.07)
Variation Margin on Financial Futures Contracts++ (1,791,484) (0.33)
Liabilities in Excess of Other Assets (14,308,024) (2.60)
------------ -------
Net Assets $549,324,592 100.00%
============ =======
<FN>
(a)Security held as collateral in connection with open financial
futures contracts.
*Commercial Paper and certain US Government Obligations are traded
on a discount basis; the interest rates shown are the discount rates
paid at the time of purchase by the Fund.
**Forward foreign exchange contracts as of June 30, 1996 were as follows:
Unrealized
Appreciation
Expiration (Depreciation)
Foreign Currency Purchased Date (Notes 1b)
A$ 68,000,000 July 1996 $ (306,100)
Total (US$ Commitment--$53,798,640) (306,100)
------------
<PAGE>
Foreign Currency Sold
A$ 100,000,000 July 1996 442,500
NZ$ 46,010,170 July 1996 (365,781)
YEN 8,800,000,000 July 1996 (163,594)
Total (US$ Commitment--$190,565,898) (86,875)
------------
Total Unrealized Depreciation on
Forward Foreign Exchange Contracts--Net $ (392,975)
============
++Financial futures contracts sold as of June 30, 1996 were as follows:
Number of Expiration Value
Contracts Issue Exchange Date (Notes 1a & 1b)
400 Italian BTP LIFFE Sept. 1996 $ 61,013,584
300 UK Gilts LIFFE Sept. 1996 24,835,095
800 US Treasury Chicago Board
Bonds of Trade Sept. 1996 87,625,000
(Total Contract Price--$172,215,763) $173,473,679
============
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION
<TABLE>
Statement of Assets and Liabilities as of June 30, 1996
<CAPTION>
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$571,200,435) (Note 1a) $ 565,817,075
Foreign cash (Note 1c) 363,659
Receivables:
Securities sold $ 103,307,237
Interest 11,911,542
Beneficial interest sold 554,270
Forward foreign exchange contracts (Note 1b) 176,885 115,949,934
-------------
Prepaid registration fees and other assets (Note 1f) 73,957
-------------
Total assets 682,204,625
-------------
<PAGE>
Liabilities: Unrealized depreciation on forward foreign exchange contracts
(Note 1b) 392,975
Payables:
Securities purchased 126,882,220
Variation margin (Note 1b) 1,791,484
Beneficial interest redeemed 1,789,992
Dividends to shareholders (Note 1g) 776,909
Distributor (Note 2) 269,047
Investment adviser (Note 2) 255,416
Forward foreign exchange contracts (Note 1b) 127,462 131,892,530
-------------
Accrued expenses and other liabilities 594,528
-------------
Total liabilities 132,880,033
-------------
Net Assets: Net assets $ 549,324,592
=============
Net Assets Class A Shares of beneficial interest, $0.10 par value,
Consist of: unlimited number of shares authorized $ 909,947
Class B Shares of beneficial interest, $0.10 par value,
unlimited number of shares authorized 4,889,451
Class C Shares of beneficial interest, $0.10 par value,
unlimited number of shares authorized 113,422
Class D Shares of beneficial interest, $0.10 par value,
unlimited number of shares authorized 96,132
Paid-in capital in excess of par 602,268,770
Accumulated realized capital losses on investments
and foreign currency transactions--net (Note 6) (51,886,017)
Unrealized depreciation on investments and foreign currency
transactions--net (7,067,113)
-------------
Net assets $ 549,324,592
=============
Net Asset Value: Class A--Based on net assets of $83,169,982 and 9,099,474 shares
of beneficial interest outstanding $ 9.14
=============
Class B--Based on net assets of $446,999,088 and 48,894,509 shares
of beneficial interest outstanding $ 9.14
=============
Class C--Based on net assets of $10,367,094 and 1,134,217 shares
of beneficial interest outstanding $ 9.14
=============
Class D--Based on net assets of $8,788,428 and 961,321 shares
of beneficial interest outstanding $ 9.14
=============
See Notes to Financial Statements.
</TABLE>
<PAGE>
FINANCIAL INFORMATION (continued)
<TABLE>
Statement of Operations for the Six Months Ended June 30, 1996
<CAPTION>
<S> <S> <C> <C>
Investment Income Interest and discount earned (net of $255,063 foreign withholding tax) $ 20,966,639
(Notes 1d & 1e):
Expenses: Account maintenance and distribution fees--Class B (Note 2) $ 1,835,736
Investment advisory fees (Note 2) 1,769,290
Transfer agent fees--Class B (Note 2) 500,553
Custodian fees 108,047
Accounting services (Note 2) 97,161
Printing and shareholder reports 95,290
Transfer agent fees--Class A (Note 2) 74,221
Professional fees 49,327
Registration fees (Note 1f) 47,089
Account maintenance and distribution fees--Class C (Note 2) 38,310
Trustees' fees and expenses 22,410
Transfer agent fees--Class C (Note 2) 11,366
Account maintenance fees--Class D (Note 2) 8,866
Transfer agent fees--Class D (Note 2) 6,316
Other 6,705
-------------
Total expenses 4,670,687
-------------
Investment income--net 16,295,952
-------------
Realized & Realized loss from:
Unrealized Gain Investments--net (12,207,642)
(Loss) on Foreign currency transactions--net (1,790,949) (13,998,591)
Investments & -------------
Foreign Currency Change in unrealized appreciation/depreciation on:
Transactions--Net Investments--net (13,646,350)
(Notes 1b, 1c, Foreign currency transactions--net 2,097,779 (11,548,571)
1e & 3): ------------- -------------
Net realized and unrealized loss on investments and
foreign currency transactions (25,547,162)
-------------
Net Decrease in Net Assets Resulting from Operations $ (9,251,210)
=============
See Notes to Financial Statements.
</TABLE>
<PAGE>
FINANCIAL INFORMATION (continued)
<TABLE>
Statements of Changes in Net Assets
<CAPTION>
For the
Six Months For the
Ended Year Ended
June 30, December 31,
Increase (Decrease) in Net Assets: 1996 1995
<S> <S> <C> <C>
Operations: Investment income--net $ 16,295,952 $ 42,003,844
Realized gain (loss) on investments and foreign currency
transactions--net (13,998,591) 18,709,618
Change in unrealized appreciation/depreciation on investments
and foreign currency transactions--net (11,548,571) 25,169,899
------------- -------------
Net increase (decrease) in net assets resulting from operations (9,251,210) 85,883,361
------------- -------------
Dividends & Investment income--net:
Distributions to Class A (2,587,447) (3,973,225)
Shareholders Class B (13,240,585) (23,553,473)
(Note 1f): Class C (256,270) (302,479)
Class D (211,650) (159,774)
Return of capital--net:
Class A -- (1,989,511)
Class B -- (11,793,918)
Class C -- (151,461)
Class D -- (80,003)
------------- -------------
Net decrease in net assets resulting from dividends and
distributions to shareholders (16,295,952) (42,003,844)
------------- -------------
Beneficial Net decrease in net assets derived from beneficial interest
Interest transactions (65,758,734) (200,436,449)
Transactions ------------- -------------
(Note 4):
Net Assets: Total decrease in net assets (91,305,896) (156,556,932)
Beginning of period 640,630,488 797,187,420
------------- -------------
End of period $ 549,324,592 $ 640,630,488
============= =============
See Notes to Financial Statements.
</TABLE>
<PAGE>
FINANCIAL INFORMATION (continued)
<TABLE>
Financial Highlights
<CAPTION>
Class A
For the
The following per share data and ratios have been derived Six Months
from information provided in the financial statements. Ended
June 30, For the Year Ended December 31,
Increase (Decrease) in Net Asset Value: 1996++ 1995 1994 1993 1992
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 9.54 $ 8.96 $ 10.03 $ 9.79 $ 10.38
Operating --------- --------- --------- --------- ---------
Performance: Investment income--net .29 .59 .55 .70 .77
Realized and unrealized gain (loss) on
investments and foreign currency
transactions--net (.40) .58 (1.07) .56 .01
--------- --------- --------- --------- ---------
Total from investment operations (.11) 1.17 (.52) 1.26 .78
--------- --------- --------- --------- ---------
Less dividends and distributions:
Investment income--net (.29) (.39) (.24) (.67) (1.14)
Realized gain on investments--net -- -- -- (.30) (.23)
Return of capital--net -- (.20) (.28) -- --
In excess of realized gain on
investments--net -- -- (.03) (.05) --
--------- --------- --------- --------- ---------
Total dividends and distributions (.29) (.59) (.55) (1.02) (1.37)
--------- --------- --------- --------- ---------
Net asset value, end of period $ 9.14 $ 9.54 $ 8.96 $ 10.03 $ 9.79
========= ========= ========= ========= =========
Total Investment Based on net asset value per share (1.21%)+++ 13.39% (5.29%) 13.21% 7.83%
Return:** ========= ========= ========= ========= =========
Ratios to Average Expenses .92%* .86% .84% .82% .84%
Net Assets: ========= ========= ========= ========= =========
Investment income--net 6.18%* 6.31% 5.84% 6.44% 12.24%
========= ========= ========= ========= =========
Supplemental Net assets, end of period
Data: (in thousands) $ 83,170 $ 85,610 $ 90,823 $ 108,241 $ 61,131
========= ========= ========= ========= =========
Portfolio turnover 638.06% 512.75% 405.00% 419.99% 235.11%
========= ========= ========= ========= =========
<PAGE>
<FN>
*Annualized.
**Total investment returns exclude the effects of sales loads.
++Based on average shares outstanding during the period.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (continued)
<TABLE>
Financial Highlights (continued)
<CAPTION>
Class B
For the
The following per share data and ratios have been derived Six Months
from information provided in the financial statements. Ended
June 30, For the Year Ended December 31,
Increase (Decrease) in Net Asset Value: 1996++ 1995 1994 1993 1992
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 9.54 $ 8.96 $ 10.03 $ 9.79 $ 10.39
Operating --------- --------- --------- --------- ---------
Performance: Investment income--net .25 .51 .47 .60 .70
Realized and unrealized gain (loss) on
investments and foreign currency
transactions--net (.40) .58 (1.07) .58 (.01)
--------- --------- --------- --------- ---------
Total from investment operations (.15) 1.09 (.60) 1.18 .69
--------- --------- --------- --------- ---------
Less dividends and distributions:
Investment income--net (.25) (.34) (.20) (.59) (1.06)
Realized gain on investments--net -- -- -- (.30) (.23)
Return of capital--net -- (.17) (.24) -- --
In excess of realized gain on
investments--net -- -- (.03) (.05) --
--------- --------- --------- --------- ---------
Total dividends and distributions (.25) (.51) (.47) (.94) (1.29)
--------- --------- --------- --------- ---------
Net asset value, end of period $ 9.14 $ 9.54 $ 8.96 $ 10.03 $ 9.79
========= ========= ========= ========= =========
Total Investment Based on net asset value per share (1.59%)+++ 12.52% (6.01%) 12.36% 6.91%
Return:** ========= ========= ========= ========= =========
Ratios to Average Expenses 1.69%* 1.64% 1.61% 1.58% 1.61%
Net Assets: ========= ========= ========= ========= =========
Investment income--net 5.39%* 5.56% 5.06% 5.72% 11.67%
========= ========= ========= ========= =========
<PAGE>
Supplemental Net assets, end of period
Data: (in thousands) $ 446,999 $ 540,887 $ 700,995 $ 897,150 $ 637,834
========= ========= ========= ========= =========
Portfolio turnover 638.06% 512.75% 405.00% 419.99% 235.11%
========= ========= ========= ========= =========
<FN>
*Annualized.
**Total investment returns exclude the effect of sales loads.
++Based on average shares outstanding during the period.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (concluded)
<TABLE>
Financial Highlights (concluded)
<CAPTION>
Class C Class D
For the For the
The following per share data and ratios have been For the For the Period For the For the Period
derived from information provided in the financial Six Months Year Oct. 21, Six Months Year Oct. 21,
statements. Ended Ended 1994++ to Ended Ended 1994++ to
June 30, Dec. 31, Dec. 31, June 30, Dec. 31, Dec. 31,
Increase (Decrease) in Net Asset Value: 1996++++ 1995 1994 1996++++ 1995 1994
<S> <S> <C> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of
Operating period $ 9.54 $ 8.96 $ 9.21 $ 9.54 $ 8.96 $ 9.21
Performance: -------- -------- -------- -------- -------- --------
Investmentincome--net .25 .51 .09 .28 .56 .10
Realized and unrealized gain
(loss) on investments and
foreign currency transactions
--net (.40) .58 (.25) (.40) .58 (.25)
-------- -------- -------- -------- -------- --------
Total from investment
operations (.15) 1.09 (.16) (.12) 1.14 (.15)
-------- -------- -------- -------- -------- --------
Less dividends and
distributions:
Investment income--net (.25) (.34) (.03) (.28) (.37) (.04)
Return of capital--net -- (.17) (.05) -- (.19) (.05)
In excess of realized gain
on investments--net -- -- (.01) -- -- (.01)
-------- -------- -------- -------- -------- --------
Total dividends and
distributions (.25) (.51) (.09) (.28) (.56) (.10)
-------- -------- -------- -------- -------- --------
Net asset value, end of
period $ 9.14 $ 9.54 $ 8.96 $ 9.14 $ 9.54 $ 8.96
======== ======== ======== ======== ======== ========
<PAGE>
Total Investment Based on net asset value
Return:** per share (1.63%)+++ 12.44% (1.73%)+++ (1.33%)+++ 13.11% (1.62%)+++
======== ======== ======== ======== ======== ========
Ratios to Average Expenses 1.78%* 1.71 1.69%* 1.17%* 1.11% 1.12%*
Net Assets: ======== ======== ======== ======== ======== ========
Investment income--net 5.33%* 5.44% 5.20%* 5.95%* 6.07% 5.81%*
======== ======== ======== ======== ======== ========
Supplemental Net assets, end of period
Data: (in thousands) $ 10,367 $ 8,468 $ 3,614 $ 8,789 $ 5,665 $ 1,755
======== ======== ======== ======== ======== ========
Portfolio turnover 638.06% 512.75% 405.00% 638.06% 512.75% 405.00%
======== ======== ======== ======== ======== ========
<FN>
*Annualized.
**Total investment returns exclude the effect of sales loads.
++Commencement of Operations.
++++Based on average shares outstanding during the period.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
Merrill Lynch Global Bond Fund for Investment and Retirement (the
"Fund") is registered under the Investment Company Act of 1940 as a
non-diversified, open-end management investment company. These
unaudited financial statements reflect all adjustments which are, in
the opinion of management, necessary to a fair statement of the
results for the interim period presented. All such adjustments are
of a normal recurring nature. The Fund offers four classes of shares
under the Merrill Lynch Select Pricing SM System. 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 securities--Securities traded in the over-the-
counter market are valued at the last available bid price prior to
the time of valuation. 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. 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 of the
primary 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. Other investments, including
futures contracts and related options, are stated at market value or
otherwise at the fair value at which it is expected they may be
resold, as determined in good faith by or under the direction of the
Board of Trustees. Securities and assets for which market quotations
are not readily available are valued at fair value as determined in
good faith by or under the direction of the Fund's Board of
Trustees.
(b) Derivative financial instruments--The Fund may engage in various
portfolio strategies to seek to increase its return by hedging its
portfolio against adverse movements in the debt 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.
* 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.
<PAGE>
* Financial futures contracts--The Fund may purchase or sell financial
futures contracts and options on such futures contracts as a hedge
against adverse changes in interest rates. A futures contract is an
agreement between two parties to buy and sell a security, respectively,
for a set price on a future date. Upon entering into a contract,
the Fund deposits and maintains as collateral such initial margin
as required by the exchange on which the transaction is effected.
Pursuant to the contract, the Fund agrees to receive from or pay
to the broker an amount of cash equal to the daily fluctuation in
value of the contract. Such receipts or payments are known as
variation margin and are recorded by the Fund as unrealized
gains or losses. When the contract is closed, the Fund records a
realized gain or loss equal to the difference between the value of
the contract at the time it was opened and the value at the time it
was closed.
* Options--The Fund is authorized to write covered call options and
purchase put 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.
(c) 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.
(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 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). Interest income (including amortization of
discount) 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) Dividends and distributions-- Dividends from net investment
income are declared daily and paid monthly. Distributions of capital
gains are recorded on the ex-dividend dates. Distributions in excess
of realized capital gains are due primarily to differing tax
treatments for futures transactions and post-October losses. A
portion of the ordinary income distributions paid by the Fund during
the fiscal year ended December 31, 1995 is characterized as a return
of capital.
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 0.60%, on an annual basis,
of the average daily value of the Fund's net assets. The most
restrictive annual expense limitation requires that MLAM reimburse
the Fund to the extent the Fund's expenses (excluding interest
rates, distribution fees, brokerage fees and commissions, and
extraordinary items) exceed 2.5% of the Fund's first $30 million of
average daily net assets, 2.0% of the Fund's next $70 million of
average daily net assets, and 1.5% of the average daily net assets
in excess thereof. MLAM's obligation to reimburse the Fund is
limited to the amount of the investment advisory fee. No fee payment
will be made to MLAM during any fiscal year which will cause such
expenses to exceed the most restrictive expense limitation at the
time of such payment.
<PAGE>
Pursuant to the distribution plans (the "Distribution Plans")
adopted by the Fund in accordance with
NOTES TO FINANCIAL STATEMENTS (concluded)
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 Distribution
Maintenance Fee Fee
Class B 0.25% 0.50%
Class C 0.25% 0.55%
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.
For the six months ended June 30, 1996, MLFD earned underwriting
discounts and direct 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 $ 392 $ 3,417
Class D $1,851 $19,815
For the six months ended June 30, 1996, MLPF&S received contingent
deferred sales charges of $503,992 and $3,056 relating to
transactions in Class B and Class C Shares, respectively.
During the six months ended June 30, 1996, the Fund paid Merrill
Lynch Security Pricing Service, an affiliate of MLPF&S, $123 for
security price quotations to compute the net asset value of the
Fund.
<PAGE>
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.
Certain officers and/or trustees of the Fund are officers and/or
directors of MLPF&S, PSI, MLFD, MLAM, MLFDS, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the six months ended June 30, 1996 were $3,565,109,453 and
$3,620,295,923, respectively.
Net realized and unrealized gains (losses) as of June 30, 1996 were
as follows:
Realized Unrealized
Gains (Losses) Losses
Investments:
Long-term $ (9,847,640) $ (5,382,667)
Short-term 52,138 (693)
Financial futures (2,412,140) (1,257,916)
------------ ------------
Total investments (12,207,642) (6,641,276)
------------ ------------
Currency transactions:
Foreign currency
transactions (5,060,328) (32,862)
Forward foreign exchange
contracts 3,269,379 (392,975)
------------ ------------
Total currency transactions (1,790,949) (425,837)
------------ ------------
Total $(13,998,591) $ (7,067,113)
============ ============
As of June 30, 1996, net unrealized depreciation for Federal income
tax purposes aggregated $5,383,360, of which $2,700,267 related to
appreciated securities and $8,083,627 related to depreciated
securities. The aggregate cost of investments at June 30, 1996 for
Federal income tax purposes was $571,200,435.
4. Beneficial Interest Transactions:
Net decrease in net assets derived from beneficial interest
transactions was $65,758,734 and $200,436,449 for the six months
ended June 30, 1996 and the year ended December 31, 1995,
respectively.
Transactions in shares of capital for each class were as follows:
<PAGE>
Class A Shares for the Six Months Dollar
Ended June 30, 1996 Shares Amount
Shares sold 1,333,747 $ 12,430,676
Shares issued to shareholders
in reinvestment of dividends 207,413 1,927,630
------------ ------------
Total issued 1,541,160 14,358,306
Shares redeemed (1,418,976) (13,207,996)
------------ ------------
Net increase 122,184 $ 1,150,310
============ ============
Class A Shares for the Year Dollar
Ended December 31, 1995 Shares Amount
Shares sold 6,380,202 $ 59,357,067
Shares issued to shareholders
in reinvestment of dividends
and distributions 478,488 4,434,234
------------ ------------
Total issued 6,858,690 63,791,301
Shares redeemed (8,019,897) (73,711,712)
------------ ------------
Net decrease (1,161,207) $ (9,920,411)
============ ============
Class B Shares for the Six Months Dollar
Ended June 30, 1996 Shares Amount
Shares sold 2,404,545 $ 22,503,418
Shares issued to share-
holders in reinvestment of
dividends 852,865 7,933,139
------------ ------------
Total issued 3,257,410 30,436,557
Automatic conversion
of shares (325,366) (3,014,259)
Shares redeemed (10,743,562) (100,051,747)
------------ ------------
Net decrease (7,811,518) $(72,629,449)
============ ============
Class B Shares for the Year Dollar
Ended December 31, 1995 Shares Amount
<PAGE>
Shares sold 8,688,182 $ 80,200,982
Shares issued to share-
holders in reinvestment of
dividends and distributions 2,401,329 22,257,416
------------- -------------
Total issued 11,089,511 102,458,398
Automatic conversion
of shares (99,679) (930,011)
Shares redeemed (32,517,042) (300,199,532)
------------- -------------
Net decrease (21,527,210) $(198,671,145)
============= =============
Class C Shares for the Six Months Dollar
Ended June 30, 1996 Shares Amount
Shares sold 413,802 $ 3,864,552
Shares issued to share-
holders in reinvestment of
dividends 20,932 194,365
------------ ------------
Total issued 434,734 4,058,917
Shares redeemed (188,491) (1,755,265)
------------ ------------
Net increase 246,243 $ 2,303,652
============ ============
Class C Shares for the Year Dollar
Ended December 31, 1995 Shares Amount
Shares sold 1,343,650 $ 12,395,671
Shares issued to shareholders
in reinvestment of dividends
and distributions 40,142 372,733
------------ ------------
Total issued 1,383,792 12,768,404
Shares redeemed (899,232) (8,300,388)
------------ ------------
Net increase 484,560 $ 4,468,016
============ ============
Class D Shares for the Six Months Dollar
Ended June 30, 1996 Shares Amount
<PAGE>
Shares sold 524,300 $ 4,858,132
Automatic conversion of shares 325,366 3,014,259
Shares issued to shareholders
in reinvestment of dividends 16,576 153,851
------------ ------------
Total issued 866,242 8,026,242
Shares redeemed (498,800) (4,609,489)
------------ ------------
Net increase 367,442 $ 3,416,753
============ ============
Class D Shares for the Year Dollar
Ended December 31, 1995 Shares Amount
Shares sold 1,149,953 $ 10,597,667
Automatic conversion
of shares 99,678 930,011
Shares issued to shareholders
in reinvestment of dividends
and distributions 21,410 199,176
------------ ------------
Total issued 1,271,041 11,726,854
Shares redeemed (873,032) (8,039,763)
------------ ------------
Net increase 398,009 $ 3,687,091
============ ============
5. Commitments:
On June 30, 1996, the Fund had entered into foreign exchange
contracts, in addition to the contracts listed on the Schedule of
Investments, under which it had agreed to purchase and sell various
foreign currencies with approximate values of $57,259,000 and
$642,000, respectively.
6. Capital Loss Carryforward:
At December 31, 1995, the Fund had a net capital loss carryforward
of approximately $35,682,000, all of which expires in 2002. This
amount will be available to offset like amounts of any future
taxable gains.
