MERRILL LYNCH
GROWTH FUND
For Investment and
Retirement
FUND LOGO
Semi-Annual Report
April 30, 1995
This report is not authorized for use as an offer of sale or a
solicitation of an offer to buy shares of the Fund unless
accompanied or preceded by the Fund's current prospectus. Past
performance results shown in this report should not be considered a
representation of future performance. Investment return and
principal value of shares will fluctuate so that shares, when
redeemed, may be worth more or less than their original cost.
<PAGE>
Merrill Lynch
Growth Fund
For Investment
And Retirement
Box 9011
Princeton, NJ
08543-9011
Merrill Lynch Growth Fund for Investment and Retirement
DEAR SHAREHOLDER
Increasing signs of slowing economic growth led to higher US stock
and bond prices during the April quarter. Although gross domestic
product was reported to have increased at a revised 5.1% rate during
the final quarter of 1994, declines in other indicators such as new
home sales and durable goods orders registered thus far in 1995 have
led investors to anticipate that the economy is losing enough
momentum to keep inflation under control and preclude further
significant monetary policy tightening by the Federal Reserve Board.
A further indication of a slowing economy was the reported decline
in the Index of Leading Economic Indicators for March.
As US stock and bond markets have risen, the value of the US dollar
has reached new lows relative to the yen and the Deutschemark.
Persistent trade deficits and exports of capital from the United
States have kept the US currency in a decade-long decline relative
to the Japanese and German currencies. Over the longer term, since
the United States has the highest productivity among industrialized
nations and among the lowest labor costs, demand for US dollar-
denominated assets may improve. However, a reduction of the still-
widening US trade deficit may be necessary before the US dollar
appreciates substantially relative to the yen and the Deutschemark.
The first months of 1995 were very positive for the US stock and
bond markets. Continued signs of a moderating expansion and well-
contained inflationary pressures would provide further assurance
that the peak in interest rates is behind us, creating a stronger
foundation for higher stock and bond prices. On the other hand,
indications of reaccelerating growth and further significant
monetary policy tightening by the Federal Reserve Board would be a
decided negative for the US financial markets.
<PAGE>
Portfolio Matters
As of our last report to shareholders, technology investments
accounted for approximately 39% of Merrill Lynch Growth Fund for
Investment and Retirement's portfolio. The Fund has been
overweighted in technology for some time, and our long-term
investments--especially in semiconductor-related areas--participated
in the strong rally for technology stocks that took place during the
April quarter. With the rapid and substantial appreciation of many
of our major technology holdings, we took profits in some of them
and eliminated two investments. We also added one new technology
company to the portfolio. As a result, by the end of the April
quarter the Fund had a still-significant 30% repre-sentation in
technology.
We closed out our investment in BMC Software, Inc. at a substantial
profit. While the company remains in a fundamentally strong
strategic position for exploiting growth opportunities in the
growing market for mission critical client/server data management
software, we believe that at current prices its shares are fully
valued. We realized profits from our partial reduction in key
technology holdings such as Applied Materials, Inc. and Cypress
Semiconductor Corp. To a lesser extent, we also reduced positions in
Dell Computer Corp. and Sequent Computer Systems, Inc. Even with
profit-taking, these companies still represent substantial portfolio
positions. Outside of the technology sector, the Fund eliminated
Aviall Inc. as sluggish revenue growth and persistent overcapacity
in the airline engine overhaul market led us to reassess our
investment.
Our new technology stock is Komag, Inc. Komag is the largest
merchant manufacturer of thin-film media for Winchester disk drives
used in workstations and personal computers. Traditionally, Komag
has been successful in targeting the high-capacity, high-performance
segment of the disk drive market where it has captured a dominant
market share and earns premium margins. In our estimation, Komag's
long-term investment potential derives from its expanding, low-cost
manufacturing base in Malaysia. As an increasing percentage of the
company's products are sourced from Malaysia through 1996, Komag
will be positioned to expand market share by combining industry-
leading process technology with the low-cost structure of its
expanding Malaysian operations. In this way, Komag will be able to
compete for and win market share in the broader, more cost-sensitive
segment of the media market which it has not yet addressed. We
believe that in time the company's revenue and earnings growth will
likely accelerate as it captures more share of the thin-film media
market.
<PAGE>
During the April quarter, we made some significant additions to
existing holdings in Anadarko Petroleum Corp., Yacimientos
Petroliferos Fiscales S.A. (YPF), Nucor Corp., and U.S. HealthCare,
Inc. We viewed the current environment of continued weak energy
prices (the result of an abnormally warm winter heating season) and
lackluster performance for energy stocks as an opportunity to expand
our investment in Anadarko, since we believe that the company's long-
term exploration and development prospects are very positive. YPF
S.A.'s shares declined because of volatility in emerging stock
markets. We believe its current valuation does not reflect its long-
term investment potential. Energy remains the portfolio's second-
largest sector concentration at 28.4% of net assets. We remain
constructive on the long-term prospects for energy, as worldwide
economic strength and increasing fuel consumption in developing
countries are positive for energy demand.
Nucor's share price declined because of concerns that the slowing
economy would have negative implications for steel demand. We
believe that these concerns are excessive, given Nucor's position as
one of the most cost-efficient steel producers in the world. U.S.
HealthCare reported disappointing first quarter results and its
share price declined. We believe that the recent downturn in the
company's profitability--largely caused by implementation of an
ambitious growth strategy--will be offset over time by sharply
higher revenue and earnings growth rates. Therefore, we
significantly increased our investment in this long-term Fund
holding.
In Conclusion
As a result of portfolio sales, the Fund's cash position increased
from 6.2% of net assets to 17.2% during the April quarter. As the US
stock market continues to set historic highs, we have become
increasingly selective in investing cash reserves in either new or
existing positions. Therefore, we may reinvest cash reserves slowly,
reflecting a somewhat more cautious view toward the stock market at
present and in the immediate future.
<PAGE>
We thank you for your investment in Merrill Lynch Growth 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,
(Arthur Zeikel)
Arthur Zeikel
President
(Stephen C. Johnes)
Stephen C. Johnes
Vice President and Portfolio Manager
June 6, 1995
PERFORMANCE DATA
About Fund Performance
Since October 21, 1994, investors have been able to purchase shares
of the Fund through the Merrill Lynch Select Pricing SM System,
which offers four pricing alternatives:
* Class A Shares incur a maximum initial sales charge (front-end
load) of 5.25% and bear no ongoing distribution or account
maintenance fees. Class A Shares are available only to eligible
investors.
* Class B Shares are subject to a maximum contingent deferred sales
charge of 4% if redeemed during the first year, decreasing 1% each
year thereafter to 0% after the fourth year. In addition, Class B
Shares are subject to a distribution fee of 0.75% and an account
maintenance fee of 0.25%. These shares automatically convert to
Class D Shares after approximately 8 years.
* Class C Shares are subject to a distribution fee of 0.75% and an
account maintenance fee of 0.25%. In addition, Class C Shares are
subject to a 1% contingent deferred sales charge if redeemed within
one year of purchase.
<PAGE>
* Class D Shares incur a maximum initial sales charge of 5.25% and
an account maintenance fee of 0.25% (but no distribution fee).
Performance data for the Fund's Class A and Class B Shares are
presented in the "Performance Summary," "Recent Performance Results"
and "Average Annual Total Return" tables on pages 3, 4 and 5. Data
for Class C and Class D Shares are also presented in the "Recent
Performance Results" and "Aggregate Total Return" tables below and
on page 5.
The "Recent Performance Results" table shows investment results
before the deduction of any sales charges for Class A and Class B
Shares for the 12-month and 3-month periods ended April 30, 1995 and
for Class C and Class D Shares for the since inception and 3-month
periods ended April 30, 1995. All data in this table assume
imposition of the actual total expenses incurred by each class of
shares during the relevant period.
None of the past results shown should be considered a representation
of future performance. Investment return and principal value of
shares will fluctuate so that shares, when redeemed, may be worth
more or less than the 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 3/31/95 +11.02% + 5.19%
Five Years Ended 3/31/95 +15.37 +14.13
Inception (11/28/88)
through 3/31/95 +17.59 +16.59
[FN]
*Maximum sales charge is 5.25%
**Assuming maximum sales charge.
<PAGE>
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 3/31/95 + 9.95% + 5.95%
Five Years Ended 3/31/95 +14.21 +14.21
Inception (3/27/87)
through 3/31/95 +12.70 +12.70
[FN]
*Maximum contingent deferred sales charge is 4% and is reduced to 0%
after 4 years.
**Assuming payment of applicable contingent deferred sales charge.
Aggregate Total Return
% Return % Return
Without CDSC With CDSC**
Class C Shares*
Inception (10/21/94)
through 3/31/95 +6.54% +5.54%
[FN]
*Maximum contingent deferred sales charge is 1% and is reduced to 0%
after 1 year.
**Assuming payment of applicable contingent deferred sales charge.
% Return Without % Return With
Sales Charge Sales Charge**
Class D Shares*
Inception (10/21/94)
through 3/31/95 +6.89% +1.28%
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
PERFORMANCE DATA (continued)
<PAGE>
<TABLE>
Performance Summary--Class A Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<C> <C> <C> <C> <C> <C>
11/28/88--12/31/88 $ 9.61 $ 9.44 $0.257 $0.090 + 1.88%
1989 9.44 12.33 -- 0.211 +32.96
1990 12.33 12.20 0.130 -- + 0.03
1991 12.20 13.95 1.182 0.012 +25.20
1992 13.95 14.88 0.449 -- + 9.97
1993 14.88 17.48 2.122 -- +32.37
1994 17.48 17.49 0.295 -- + 1.77
1/1/95--4/30/95 17.49 20.21 -- -- +15.55
------ ------
Total $4.435 Total $0.313
Cumulative total return as of 4/30/95: +190.38%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures assume reinvestment of all dividends and capital gains
distributions at net asset value on the ex-dividend date, and do not
include sales charge; results would be lower if sales charge was
included.
</TABLE>
<TABLE>
Performance Summary--Class B Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<C> <C> <C> <C> <C> <C>
3/27/87--12/31/87 $10.00 $ 8.49 $0.060 $0.187 -12.72%
1988 8.49 9.45 0.257 0.140 +16.04
1989 9.45 12.35 -- 0.084 +31.62
1990 12.35 12.09 0.130 -- - 1.02
1991 12.09 13.65 1.182 0.012 +23.85
1992 13.65 14.39 0.449 -- + 8.79
1993 14.39 16.65 2.122 -- +31.11
1994 16.65 16.47 0.295 -- + 0.72
1/1/95--4/30/95 16.47 18.96 -- -- +15.12
------ ------
Total $4.495 Total $0.423
Cumulative total return as of 4/30/95: +170.28%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures assume reinvestment of all dividends and capital gains
distributions at net asset value on the ex-dividend date, and do not
reflect deduction of any sales charge; results would be lower if
sales charge was deducted.
</TABLE>
<PAGE>
PERFORMANCE DATA (concluded)
<TABLE>
Recent Performance Results
<CAPTION>
12 Month 3 Month
4/30/95 1/31/95 4/30/94++ % Change++ % Change
<S> <C> <C> <C> <C> <C>
ML Growth Fund Class A Shares* $20.21 $17.33 $18.08 +13.70%(1) +16.62%
ML Growth Fund Class B Shares* 18.96 16.30 17.16 +12.50(1) +16.32
ML Growth Fund Class C Shares* 18.96 16.30 17.45 +10.63(1) +16.32
ML Growth Fund Class D Shares* 20.17 17.31 18.47 +11.08(1) +16.52
Standard & Poor's 500 Index** 514.71 470.42 450.91 +14.15 + 9.41
ML Growth Fund Class A Shares--Total Return* +13.70(1) +16.62
ML Growth Fund Class B Shares--Total Return* +12.50(1) +16.32
ML Growth Fund Class C Shares--Total Return* +10.63(1) +16.32
ML Growth Fund Class D Shares--Total Return* +11.08(1) +16.52
Standard & Poor's 500 Index--Total Return** +17.37 +10.08
<FN>
*Investment results shown for the 3-month and 12-month periods are
before the deduction of any sales charges.
**An unmanaged broad-based index comprised of common stocks. Total
investment returns for unmanaged indexes are based on estimates.
++Investment results shown for Class C and Class D Shares are since
inception (10/21/94).
(1)Percent change includes reinvestment of $0.295 per share capital
gains distributions.
</TABLE>
PORTFOLIO INFORMATION
For the Quarter Ended April 30, 1995
Percent of
Ten Largest Equity Holdings Net Assets
Cirrus Logic, Inc. 6.3%
Anadarko Petroleum Corp. 4.8
Dell Computer Corp. 4.6
U.S. HealthCare, Inc. 4.4
Energy Service Co. 4.2
Autodesk, Inc. 4.2
Applied Materials, Inc. 3.9
Freeport-McMoRan, Inc. 3.7
Valero Energy Corp. 3.6
Safety-Kleen Corp. 3.6
<PAGE>
Addition
Komag, Inc.
Deletions
Aviall Inc.
BMC Software, Inc.
<TABLE>
SCHEDULE OF INVESTMENTS
<CAPTION>
Shares Value Percent of
Industries Held Stocks Cost (Note 1a) Net Assets
<S> <C> <S> <C> <C> <C>
Banking & Financial 1,000,000 Morgan Stanley Group, Inc. $ 52,103,330 $ 69,500,000 2.9%
Services 1,000,000 Republic New York Corp. 44,267,281 47,875,000 2.0
575,000 Safra Republic Holdings S.A.(ADR)(a) 33,315,604 47,725,000 2.0
-------------- -------------- ------
129,686,215 165,100,000 6.9
Commercial 2,011,047 ++Dell Computer Corp.*+++ 45,634,091 109,853,442 4.6
Workstations & 2,000,000 ++Sequent Computer Systems, Inc.* 31,532,485 33,000,000 1.4
Network Servers -------------- -------------- ------
77,166,576 142,853,442 6.0
Computer Software 2,920,000 Autodesk, Inc.* 58,406,792 99,280,000 4.2
1,600,000 ++Landmark Graphics Corp.* 27,012,866 39,200,000 1.6
4,652,000 ++Mentor Graphics, Inc.* 62,023,772 78,502,500 3.3
1,500,000 ++Wang Laboratories, Inc. 20,637,636 24,750,000 1.0
-------------- -------------- ------
168,081,066 241,732,500 10.1
Computers 905,000 ++Komag, Inc. 27,189,773 34,955,625 1.5
<PAGE>
Diversified Resource 1,168,750 Freeport-McMoRan Copper & Gold,
Companies Inc. 28,313,051 24,397,656 1.0
5,000,000 ++Freeport-McMoRan, Inc. 92,654,821 88,125,000 3.7
-------------- -------------- ------
120,967,872 112,522,656 4.7
Electronics 3,000,000 ++Cirrus Logic, Inc.* 64,109,324 149,250,000 6.3
1,500,000 ++Cypress Semiconductor Corp. 15,808,156 45,375,000 1.9
-------------- -------------- ------
79,917,480 194,625,000 8.2
Forest Products 1,200,000 Weyerhaeuser Co. 52,183,239 50,400,000 2.1
Healthcare Services 4,000,000 U.S. HealthCare, Inc. 101,351,070 106,000,000 4.4
Natural Gas Gathering 2,343,750 Panhandle Eastern Corp. 24,371,330 56,250,000 2.4
& Transmission 2,500,000 Western Gas Resources, Inc.* 57,319,428 51,250,000 2.1
-------------- -------------- ------
81,690,758 107,500,000 4.5
Oil & Gas 2,800,000 Anadarko Petroleum Corp. 97,724,971 115,150,000 4.8
Exploration & 2,000,000 Devon Energy Corp.* 30,708,630 41,500,000 1.7
Production 300,000 ++McMoRan Oil & Gas Co. 1,691,662 750,000 0.0
6,500,000 ++Santa Fe Energy Resources, Inc.* 58,769,857 60,937,500 2.6
1,000,000 ++United Meridian Corp. 12,390,790 16,000,000 0.7
3,500,000 Yacimientos Petroliferos Fiscales
S.A.--Sponsored (ADR)(a) 83,800,841 70,875,000 3.0
-------------- -------------- ------
285,086,751 305,212,500 12.8
Oil Refining 4,000,000 Valero Energy Corp.* 86,245,282 86,500,000 3.6
Oil Services 6,000,000 ++Energy Service Co.* 66,189,856 100,500,000 4.2
15,000,000 ++Global Marine, Inc.* 52,723,823 65,625,000 2.7
1,335,000 ++Pool Energy Services Co.* 14,336,959 11,180,625 0.5
-------------- -------------- ------
133,250,638 177,305,625 7.4
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded)
<CAPTION>
Shares Value Percent of
Industries Held Stocks Cost (Note 1a) Net Assets
<S> <C> <S> <C> <C> <C>
Pollution Control 5,000,000 Safety-Kleen Corp.* $ 98,190,960 $ 85,000,000 3.6%
Scientific & Technical 2,500,000 ++Convex Computer Corp.* 29,264,447 10,312,500 0.4
Computing Systems
Semiconductor 1,500,000 ++Applied Materials, Inc. 9,803,151 92,250,000 3.9
Production Equipment
Steel 948,500 Nucor Corp. 22,124,065 45,528,000 1.9
Total Stocks 1,502,199,343 1,957,797,848 82.0
<CAPTION>
Face
Amount Short-Term Securities
<S> <C> <S> <C> <C> <C>
Commercial $30,000,000 Ciesco L.P., 5.98% due 5/16/1995 29,915,283 29,915,283 1.3
Paper** 50,000,000 Compagnie Financiere de Paribas,
6.01% due 5/04/1995 49,958,264 49,958,264 2.1
12,209,000 General Electric Capital Corp.,
5.93% due 5/01/1995 12,204,978 12,204,978 0.5
25,000,000 Goldman Sachs & Co., 6.01% due
5/22/1995 24,904,007 24,904,007 1.0
30,000,000 Matterhorn Capital Corp., 5.97% due
5/12/1995 29,935,325 29,935,325 1.3
20,000,000 PHH Corp., 5.97% due 5/03/1995 19,986,733 19,986,733 0.8
30,000,000 Penney (J.C.) Funding Corp., 5.95%
due 6/15/1995 29,766,958 29,766,958 1.2
28,825,000 Preferred Receivables Funding Corp.,
5.99% due 6/01/1995 28,666,727 28,666,727 1.2
30,000,000 Siemens Corp., 5.95% due 5/15/1995 29,920,667 29,920,667 1.3
26,000,000 SmithKline Beecham Finance Co.,
5.98% due 5/08/1995 25,961,130 25,961,130 1.1
20,000,000 WCP Funding Inc., 6.00% due 6/12/1995 19,853,333 19,853,333 0.8
20,000,000 Xerox Corp., 5.97% due 5/17/1995 19,940,300 19,940,300 0.8
US Government 20,000,000 Federal Home Loan Mortgage Corp.,
& Agency 5.90% due 5/09/1995 19,967,222 19,967,222 0.8
Obligations** Federal National Mortgage Association:
30,000,000 5.93% due 5/01/1995 29,990,117 29,990,117 1.3
40,000,000 5.87% due 5/19/1995 39,869,556 39,869,556 1.7
<PAGE>
Total Short-Term Securities 410,840,600 410,840,600 17.2
Total Investments $1,913,039,943 2,368,638,448 99.2
==============
Other Assets Less Liabilities 18,639,342 0.8
-------------- ------
Net Assets $2,387,277,790 100.0%
============== ======
<FN>
*Investment in an affiliated company (Note 6).
**Commercial Paper and certain US Government & Agency Obligations
are traded on a discount basis; the interest rates shown are the
discount rates paid at the time of purchase by the Fund.
++Non-income producing security.
+++Reflects the conversion of Dell Computer Corp., Series A, 7%
Convertible Preferred Stock.
(a)American Depositary Receipt (ADR).
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION
<TABLE>
Statement of Assets and Liabilities as of April 30, 1995
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$1,913,039,943)
(Note 1a) $2,368,638,448
Cash 1,447,224
Receivables:
Securities sold $ 40,002,198
Beneficial interest sold 26,132,455
Dividends 342,313 66,476,966
------------
Prepaid registration fees and other assets (Note 1f) 81,284
--------------
Total assets 2,436,643,922
--------------
<PAGE>
Liabilities: Payables:
Securities purchased 39,560,410
Beneficial interest redeemed 7,482,194
Distributor (Note 2) 1,260,406
Investment adviser (Note 2) 999,447 49,302,457
------------
Accrued expenses and other liabilities 63,675
--------------
Total liabilities 49,366,132
--------------
Net Assets: Net assets $2,387,277,790
==============
Net Assets Class A Shares of beneficial interest, $0.10 par value,
Consist of: unlimited number of shares authorized $ 2,576,282
Class B Shares of beneficial interest, $0.10 par value,
unlimited number of shares authorized 7,727,006
Class C Shares of beneficial interest, $0.10 par value,
unlimited number of shares authorized 143,532
Class D Shares of beneficial interest, $0.10 par value,
unlimited number of shares authorized 1,854,779
Paid-in capital in excess of par 1,802,861,676
Accumulated investment loss--net (1,228,549)
Undistributed realized capital gains on investments--net 117,744,559
Unrealized appreciation on investments--net 455,598,505
--------------
Net assets $2,387,277,790
==============
Net Asset Value: Class A--Based on net assets of $520,589,439 and 25,762,819 shares of
beneficial interest outstanding $ 20.21
==============
Class B--Based on net assets of $1,465,318,165 and 77,270,055 shares of
beneficial interest outstanding $ 18.96
==============
Class C--Based on net assets of $27,219,011 and 1,435,322 shares of
beneficial interest outstanding $ 18.96
==============
Class D--Based on net assets of $374,151,175 and 18,547,787 shares of
beneficial interest outstanding $ 20.17
==============
See Notes to Financial Statements.
</TABLE>
<PAGE>
FINANCIAL INFORMATION (continued)
<TABLE>
Statement of Operations for the Six Months Ended April 30, 1995
<S> <S> <C>
Investment Dividends $ 8,398,174
Income Interest and discount earned 5,074,867
(Notes 1d & 1e): Other 229,015
------------
Total income 13,702,056
------------
Expenses: Distribution fees--Class B (Note 2) 6,971,610
Investment advisory fees (Note 2) 5,996,698
Transfer agent fees--Class B (Note 2) 1,102,451
Transfer agent fees--Class A (Note 2) 261,497
Printing and shareholder reports 121,080
Account maintenance fees--Class D (Note 2) 99,464
Registration fees (Note 1f) 93,973
Distribution fees--Class C (Note 2) 55,663
Custodian fees 54,215
Transfer agent fees--Class D (Note 2) 51,231
Accounting services (Note 2) 43,372
Professional fees 43,372
Trustees' fees and expenses 19,879
Transfer agent fees--Class C (Note 2) 8,871
Other 7,229
------------
Total expenses 14,930,605
------------
Investment loss--net (1,228,549)
------------
Realized & Realized gain from investments--net 117,744,684
Unrealized Change in unrealized appreciation on investments--net 41,735,139
Gain on ------------
Investments Net realized and unrealized gain on investments 159,479,823
- --Net (Notes ------------
1b, 1c, Net Increase in Net Assets Resulting from Operations $158,251,274
1e & 3): ============
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (continued)
<PAGE>
<TABLE>
Statements of Changes in Net Assets
<CAPTION>
For the Six For the Year
Months Ended Ended
Increase (Decrease) in Net Assets: April 30, 1995 Oct. 31, 1994
<S> <S> <C> <C>
Operations: Investment loss--net $ (1,228,549) $ (5,712,437)
Realized gain on investments and foreign currency transactions
--net 117,744,684 35,304,501
Change in unrealized appreciation on investments and foreign
currency transactions--net 41,735,139 136,865,088
--------------- ---------------
Net increase in net assets resulting from operations 158,251,274 166,457,152
--------------- ---------------
Distributions to Realized gain on investments--net:
Shareholders Class A (6,083,187) (26,111,625)
(Note 1g): Class B (23,093,382) (122,946,689)
Class C (87,568) --
Class D (872,515) --
--------------- ---------------
Net decrease in net assets resulting from distributions to
shareholders (30,136,652) (149,058,314)
--------------- ---------------
Beneficial Net increase in net assets derived from beneficial interest
Interest transactions 441,468,197 521,396,919
Transactions --------------- ---------------
(Note 4):
Net Assets: Total increase in net assets 569,582,819 538,795,757
Beginning of period 1,817,694,971 1,278,899,214
--------------- ---------------
End of period $ 2,387,277,790 $ 1,817,694,971
=============== ===============
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (continued)
<PAGE>
<TABLE>
Financial Highlights
<CAPTION>
Class A
The following per share data and ratios have been derived For the Six
from information provided in the financial statements. Months Ended
April 30, For the Year Ended October 31,
Increase (Decrease) in Net Asset Value: 1995++ 1994++ 1993 1992 1991
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 19.19 $ 19.22 $ 14.79 $ 15.31 $ 10.61
Operating -------- -------- -------- -------- --------
Performance Investment income--net .06 .08 .02 .02 .01
Realized and unrealized gain
on investments and foreign currency
transactions--net 1.26 2.01 4.86 .65 4.82
-------- -------- -------- -------- --------
Total from investment operations 1.32 2.09 4.88 .67 4.83
-------- -------- -------- -------- --------
Less distributions:
Realized gain on investments--net (.30) (2.12) (.45) (1.19) (.13)
-------- -------- -------- -------- --------
Net asset value, end of period $ 20.21 $ 19.19 $ 19.22 $ 14.79 $ 15.31
======== ======== ======== ======== ========
Total Based on net asset value per share 7.12%+++ 12.50% 33.97% 5.77% 45.88%
Investment ======== ======== ======== ======== ========
Return:**
Ratios to Expenses .81%* .82% .81% .84% .87%
Average ======== ======== ======== ======== ========
Net Assets: Investment income--net .64%* .44% .29% .28% .46%
======== ======== ======== ======== ========
Supplemental Net assets, end of period
Data: (in thousands) $520,589 $382,077 $229,709 $138,456 $ 92,494
======== ======== ======== ======== ========
Portfolio turnover 14.63% 4.22% 33.21% 21.20% 27.86%
======== ======== ======== ======== ========
<FN>
*Annualized.
**Total investment returns exclude the effects of sales loads.
++Based on average number of shares outstanding during the period.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (continued)
<PAGE>
<TABLE>
Financial Highlights (continued)
<CAPTION>
Class B
The following per share data and ratios have been derived For the Six
from information provided in the financial statements. Months Ended
April 30, For the Year Ended October 31,
Increase (Decrease) in Net Asset Value: 1995++ 1994++ 1993 1992 1991
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 18.12 $ 18.43 $ 14.35 $ 15.03 $ 10.53
Operating ---------- ---------- ---------- ---------- ----------
Performance: Investment loss--net (.03) (.10) (.11) (.10) (.06)
Realized and unrealized gain on
investments and foreign currency
transactions--net 1.17 1.91 4.64 .61 4.69
---------- ---------- ---------- ---------- ----------
Total from investment operations 1.14 1.81 4.53 .51 4.63
---------- ---------- ---------- ---------- ----------
Less distributions:
Realized gain on investments--net (.30) (2.12) (.45) (1.19) (.13)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 18.96 $ 18.12 $ 18.43 $ 14.35 $ 15.03
========== ========== ========== ========== ==========
Total Based on net asset value per share 6.54%+++ 11.41% 32.54% 4.74% 44.32%
Investment ========== ========== ========== ========== ==========
Return:**
Ratios to Expenses, excluding distribution
Average fees .83%* .84% .83% .87% .90%
Net Assets: ========== ========== ========== ========== ==========
Expenses 1.83%* 1.84% 1.83% 1.87% 1.90%
========== ========== ========== ========== ==========
Investment loss--net (.38%)* (.58%) (.78%) (.76%) (.53%)
========== ========== ========== ========== ==========
Supplemental Net assets, end of period
Data: (in thousands) $1,465,318 $1,433,051 $1,049,190 $ 758,061 $ 824,007
========== ========== ========== ========== ==========
Portfolio turnover 14.63% 4.22% 33.21% 21.20% 27.86%
========== ========== ========== ========== ==========
<FN>
*Annualized.
**Total investment returns exclude the effects of sales loads.
++Based on average number of shares outstanding during the period.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
<PAGE>
FINANCIAL INFORMATION (concluded)
<TABLE>
Financial Highlights (concluded)
<CAPTION>
Class C Class D
For the For the For the For the
Six Period Six Period
The following per share data and ratios have been derived Months Oct. 21, Months Oct. 21,
from information provided in the financial statements. Ended 1994++ to Ended 1994++ to
April 30, Oct. 31, April 30, Oct. 31,
Increase (Decrease) in Net Asset Value: 1995++++ 1994++++ 1995++++ 1994++++
<S> <S> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 18.12 $ 17.45 $ 19.18 $ 18.47
Operating -------- -------- -------- --------
Performance: Investment income (loss)--net (.03) -- .02 --
Realized and unrealized gain on investments and
foreign currency transactions--net 1.17 .67 1.27 .71
-------- -------- -------- --------
Total from investment operations 1.14 .67 1.29 .71
-------- -------- -------- --------
Less distributions:
Realized gain on investments--net (.30) -- (.30) --
-------- -------- -------- --------
Net asset value, end of period $ 18.96 $ 18.12 $ 20.17 $ 19.18
======== ======== ======== ========
Total Based on net asset value per share 6.54%+++ 3.84%+++ 6.96%+++ 3.84%+++
Investment ======== ======== ======== ========
Return:**
Ratios to Average Expenses, excluding account maintenance and
Net Assets: distribution fees .83%* 1.52%* .80%* 1.52%*
======== ======== ======== ========
Expenses 1.83%* 2.52%* 1.05%* 1.77%*
======== ======== ======== ========
Investment income (loss)--net (.41%)* (-.17%)* .31%* (.54%)*
======== ======== ======== ========
Supplemental Net assets, end of period (in thousands) $ 27,219 $ 1,381 $374,151 $ 1,186
Data: ======== ======== ======== ========
Portfolio turnover 14.63% 4.22% 14.63% 4.22%
======== ======== ======== ========
<FN>
*Annualized.
**Total investment returns exclude the effects of sales loads.
++Commencement of Operations.
++++Based on average number of shares outstanding during the period.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
Merrill Lynch Growth Fund for Investment and Retirement (the "Fund")
is registered under the Investment Company Act of 1940 as a
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.
(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 market 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 value quotations are not available are valued at
their fair value as determined in good faith by or under the
direction of the Fund's Board of Trustees.
<PAGE>
(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 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 net
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.
* Options--The Fund is authorized to purchase and write covered call
and 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 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
paid or received (or loss or gain to the extent the cost of the
closing transaction is less than or greater than the premium paid or
received).
Written and purchased options are non-income producing investments.
<PAGE>
* Financial futures contracts--The Fund may purchase or sell
interest rate futures contracts. 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.
(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.
(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 date, except if the ex-dividend date has passed, certain
dividends from foreign securities are recorded as soon as the Fund
is informed of 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) Dividends and distributions--Dividends and distributions paid by
the Fund are recorded on the ex-dividend dates.
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.
<PAGE>
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 based upon the average daily
value of the Fund's net assets at the following annual rates: 0.65%
of the Fund's average daily net assets not exceeding $1 billion;
0.625% of the average daily net assets in excess of $1 billion but
not exceeding $1.5 billion; and 0.60% of the average daily net
assets in excess of $1.5 billion. The Investment Advisory Agreement
obligates MLAM to reimburse the Fund to the extent the Fund's
expenses (excluding interest, taxes, 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. No fee payment will be
made to MLAM during any fiscal year which will cause expenses to
exceed the most restrictive expense limitation at the time of such
payment.
NOTES TO FINANCIAL STATEMENTS (continued)
Pursuant to the distribution plans ("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 Distribution
Maintenance 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.
<PAGE>
For the six months ended April 30, 1995, MLFD earned underwriting
discounts 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 $ 8,885 $165,752
Class D $32,321 $543,189
For the six months ended April 30, 1995, MLPF&S received contingent
deferred sales charges of $720,845 and $3,720 relating to
transactions in Class B and Class C Shares, respectively.
In addition, MLPF&S received $11,892 in commissions on the
execution of portfolio security transactions for the Fund for the
six months ended April 30, 1995.
Merrill Lynch Financial Data Services, Inc. ("FDS"), 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 MLAM, PSI, MLPF&S, FDS, MLFD and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the six months ended April 30, 1995 were $341,038,912 and
$257,048,392, respectively.
Net realized and unrealized gains as of April 30, 1995 were as
follows:
Realized Unrealized
Gains Gains
Long-term investments $117,744,684 $455,598,505
As of April 30, 1995, net unrealized appreciation for Federal income
tax purposes aggregated $455,598,505, of which $521,063,131 related
to appreciated securities and $65,464,626 related to depreciated
securities. At April 30, 1995, the aggregate cost of investments for
Federal income tax purposes was $1,913,039,943.
4. Shares of Beneficial Interest:
Net increase in net assets derived from beneficial interest
transactions was $441,468,197 and $521,396,919 for the six months
ended April 30, 1995 and the year ended October 31, 1994,
respectively.
<PAGE>
Transactions in shares of beneficial interest for each class were as
follows:
Class A Shares for the Six Months Dollar
Ended April 30, 1995 Shares Amount
Shares sold 8,034,289 $149,119,830
Shares issued to shareholders
in reinvestment of distributions 317,795 5,475,610
------------ ------------
Total issued 8,352,084 154,595,440
Shares redeemed (2,499,776) (46,038,675)
------------ ------------
Net increase 5,852,308 $108,556,765
============ ============
Class A Shares for the Year Dollar
Ended October 31, 1994 Shares Amount
Shares sold 12,040,282 $219,373,935
Shares issued to shareholders
in reinvestment of distributions 1,430,460 23,945,892
------------ ------------
Total issued 13,470,742 243,319,827
Shares redeemed (5,514,465) (100,680,014)
------------ ------------
Net increase 7,956,277 $142,639,813
============ ============
Class B Shares for the Six Months Dollar
Ended April 30, 1995 Shares Amount
Shares sold 20,331,325 $354,578,944
Shares issued to shareholders
in reinvestment of distributions 1,276,055 20,710,369
------------ ------------
Total issued 21,607,380 375,289,313
Automatic conversion of
shares (16,742,332) (306,283,611)
Shares redeemed (6,684,241) (115,916,597)
------------ ------------
Net decrease (1,819,193) $(46,910,895)
============ ============
<PAGE>
Class B Shares for the Year Dollar
Ended October 31, 1994 Shares Amount
Shares sold 26,104,903 $454,589,017
Shares issued to shareholders
in reinvestment of distributions 6,849,128 109,175,099
------------ ------------
Total issued 32,954,031 563,764,116
Shares redeemed (10,779,320) (187,502,303)
------------ ------------
Net increase 22,174,711 $376,261,813
============ ============
Class C Shares for the Six Months Dollar
Ended April 30, 1995 Shares Amount
Shares sold 1,455,908 $ 25,384,322
Shares issued to shareholders
in reinvestment of
distributions 4,740 76,935
------------ ------------
Total issued 1,460,648 25,461,257
Shares redeemed (101,536) (1,776,179)
------------ ------------
Net increase 1,359,112 $ 23,685,078
============ ============
Class C Shares for the Period Dollar
Oct. 21, 1994++ to Oct. 31, 1994 Shares Amount
Shares sold 76,269 $ 1,342,405
Shares redeemed (59) (1,066)
------------ ------------
Net increase 76,210 $ 1,341,339
============ ============
[FN]
++Commencement of Operations.
<PAGE>
Class D Shares for the Six Months Dollar
Ended April 30, 1995 Shares Amount
Shares sold 3,412,966 $ 62,634,122
Shares issued to shareholders
in reinvestment of
distributions 46,313 797,041
Automatic conversion of
shares 15,756,533 306,283,611
------------ ------------
Total issued 19,215,812 369,714,774
Shares redeemed (729,877) (13,577,525)
------------ ------------
Net increase 18,485,935 $356,137,249
============ ============
Class D Shares for the Period Dollar
Oct. 21, 1994++ to Oct. 31, 1994 Shares Amount
Shares sold 67,602 $ 1,260,780
Shares redeemed (5,750) (106,826)
------------ ------------
Net increase 61,852 $ 1,153,954
============ ============
[FN]
++Commencement of Operations.
5. Loan Securities:
At April 30, 1995, the Fund held US Treasury bonds having an
aggregate value of approximately $28,723,000, as collateral for
portfolio securities having a market value of approximately
$27,375,000.
NOTES TO FINANCIAL STATEMENTS (concluded)
6. Transactions with Affiliated Companies:
Investment in companies 5% or more of whose outstanding securities
are held by the Fund (such companies are defined as "Affiliated
Companies" in Section 2(a)(3) of the Investment Company Act of 1940)
are as follows:
<PAGE>
<TABLE>
<CAPTION>
Increase Increase
(Decrease) (Decrease) Dividend
Industry Affiliate in Shares--Net in Cost--Net Income
<S> <S> <C> <C> <C>
Computer Software Autodesk, Inc. (80,000) $(2,219,999) $360,000
Electronics Cirrus Logic, Inc. -- -- ++
Scientific & Technical Convex Computer Corp. -- -- ++
Computing Systems
Commercial Workstations Dell Computer Corp. 121,047 1,995,650 ++
& Network Servers
Oil & Gas Exploration & Production Devon Energy Corp. -- -- 120,000
Oil Services Energy Service Co. 1,000,000 11,942,303 ++
Oil Services Global Marine, Inc. -- -- ++
Computer Software Landmark Graphics Corp. -- -- ++
Computer Software Mentor Graphics, Inc. -- -- ++
Oil Services Pool Energy Services Co. -- -- ++
Pollution Control Safety-Kleen Corp. -- -- 900,000
Oil & Gas Exploration & Production Santa Fe Energy Resources, Inc. -- -- ++
Commercial Workstations Sequent Computer Systems, Inc. (1,000,000) (18,172,836) ++
& Network Servers
Oil Refining Valero Energy Corp. -- -- 520,000
Natural Gas Gathering & Transmission Western Gas Resources, Inc. 500,000 8,935,988 225,000
<FN>
++Non-income producing security.
</TABLE>
<PAGE>
OFFICERS AND TRUSTEES
Arthur Zeikel, President and Trustee
Herbert I. London, Trustee
Robert R. Martin, Trustee
Joseph L. May, Trustee
Andre F. Perold, Trustee
Terry K. Glenn, Executive Vice President
Norman R. Harvey, Senior Vice President
Donald C. Burke, Vice President
Stephen C. Johnes, Vice President and
Portfolio Manager
Gerald M. Richard, Treasurer
Jerry Weiss, Secretary
Custodian
State Street Bank and Trust Company
One Heritage Drive, P2N
North Quincy, Massachusetts 02171
Transfer Agent
Merrill Lynch Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, Florida 32246-6484
(800) 637-3863
