MERRILL LYNCH
GROWTH FUND
For Investment and
Retirement
FUND LOGO
Annual Report
October 31, 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
<PAGE>
Merrill Lynch Growth Fund for Investment and Retirement
DEAR SHAREHOLDER
After losing momentum through the second calendar
quarter of 1995, it now appears that the US economic
expansion has resumed. Gross domestic product
growth for the three months ended September
30 was reported to be 4.2%, higher than generally
expected. September durable goods orders increased
a surprisingly strong 3%, and existing home sales
rose to a near-record level. At the same time, there is
evidence that inflationary pressures remain subdued.
Reflecting the trend of renewed economic growth--
and continued good news on the inflation front--the
Federal Reserve Board signaled no near-term shift in
monetary policy following its September meeting.
Thus, official interest rates may not be reduced
further in the immediate future.
One of the major developments during the October
quarter was the strengthening of the US dollar
relative to the yen and the Deutschemark. Improving
interest rate differentials favoring the US currency,
combined with coordinated central bank intervention
and more positive investor sentiment, have helped to
bolster the dollar in foreign exchange markets.
Other factors that appear to be improving the US
dollar's outlook in the near term are a pick-up in
capital flows to the United States and the prospect of
increased capital outflows from Japan. However, it
remains to be seen if the US dollar's strengthening
trend can continue without significant improvements
in the US budget and trade deficits.
In the weeks ahead, investor interest will continue
to focus on US economic activity. Clear signs of a
moderate, noninflationary expansion could further
benefit the US stock and bond markets. In addition,
should the current Federal budget deficit reduction
efforts now underway in Washington prove success-
ful, the implications would likely be positive for the
US financial markets.
<PAGE>
Fiscal Year in Review
The biggest impact on Merrill Lynch Growth Fund's
total return during the fiscal year ended October 31,
1995 was the performance of our technology invest-
ments. As long-term shareholders will recall, the
Fund began accumulating shares of technology com-
panies in 1989. This sector's representation in the
portfolio grew to a high of 52% of net assets in 1992.
Since then, we have been reducing the portfolio's
technology exposure and were active sellers of tech-
nology stocks throughout most of 1995. As a result,
on October 31, 1995, the portfolio had a reduced, but
still-significant, 22% exposure to technology.
We believe it was appropriate to begin to take profits
in many of our technology holdings, since valuations
today more accurately reflect the sector's long-term
positive prospects. Many of the stocks continued to
appreciate after we had reduced or eliminated our
positions. As a result, reducing the Fund's technology
investments also limited total return, to some degree.
Profit-taking in our technology holdings affected
other changes in the Fund's portfolio. First, in order
to offset the often significant long-term capital gains--
such as the sale of Applied Materials, Inc. during
the July quarter, which for many years was the Fund's
largest holding--we also realized capital losses, where
available and appropriate. For example, during the
October quarter we eliminated our long-time holdings
Safety-Kleen Corp. and Convex Computer Corp.,
which had not been successful investments. In addi-
tion, profit-taking during the fiscal year increased
the Fund's cash position from 4.8% of net assets to
22.4%, a significantly higher level than has been the
case in recent years. At this point in a relatively
mature bull market, we believe it is appropriate to
proceed cautiously in reinvesting the cash in new
equity positions.
During the fiscal year, we further increased the Fund's
energy investments from 32.2% to 35.4% of net assets.
While the performance of our energy investments
has been mixed to date (thus having a relatively
neutral impact on total return for the year), we
continue to believe that these holdings are under-
valued and will appreciate over the longer term. The
potential of this sector remains largely overlooked
by investors, in our view.
Portfolio Matters
During the October quarter, we added two new
investments in the energy sector, Norcen Energy
Resources, Ltd. and Seagull Energy Corporation. In
addition to the sales of Safety-Kleen Corp. and Convex
Computer Corp. shares, we eliminated our investment
in Morgan Stanley Group, Inc. at a profit, since we
believe that the company's shares are fully valued
on prospective earnings.
<PAGE>
Norcen Energy Resources, Ltd. is a leading Canadian
oil and gas exploration and production company.
Under the direction of its new management team,
Norcen is completing an asset rationalization program
which has resulted in the sale of the company's
marginal assets and a refocus on its core oil and gas
properties in Canada, the Gulf of Mexico in the
United States, Venezuela, and Argentina. After the
restructuring, we believe that Norcen's core proper-
ties offer significant opportunities for reserve and
production growth over the next several years.
Relative to its peer group of Canadian oil companies,
Norcen's current share price does not fully reflect its
long-term investment potential, in our view.
Seagull Energy Corporation is an independent oil
and gas exploration and production company which
also owns an Alaskan natural gas local distribution
company. At year-end 1994, Seagull's reserve base
was approximately 85% natural gas. We believe the
company's existing producing assets provide signifi-
cant exposure to the US natural gas market. With
gas prices depressed, Seagull's current share price
does not fully reflect the long-term value of the
company's asset base. As gas pricing improves, we
believe Seagull is positioned to deliver significant
gas production growth, and that the company's shares
offer attractive long-term return potential.
In Conclusion
During the last quarter of the Fund's fiscal year,
shareholders adopted several proposals through a
proxy solicitation, as detailed on page 3 of this
report to shareholders. The most significant of these
proposals is the Fund's change in investment policy
classification from a diversified to a non-diversified
fund. We requested this change for two important
reasons: First, Merrill Lynch Growth Fund has never
been broadly diversified. Since the Fund's inception,
we have concentrated our investments in the shares
of companies and industries we believe offer the
potential for superior long-term capital appreciation.
Second, prior to the change, the Fund was close to
being put in a position of either having to prematurely
reduce some of its most prospective investments or
forego new investment opportunities to remain in
compliance with the prescribed investment restric-
tions for a diversified fund. Now that the Fund is classi-
fied as non-diversified, these constraints are eased,
and we will be able to maintain our investment
methodology as the Fund grows larger.
<PAGE>
With the added flexibility afforded by the changes
approved by shareholders, we shall endeavor to
continue to manage the portfolio as we have in the
past. We thank you for your continued investment
in Merrill Lynch Growth Fund for Investment
and Retirement, and we look forward to serving your
financial needs throughout the Fund's new fiscal
year and beyond.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Stephen C. Johnes)
Stephen C. Johnes
Vice President and Portfolio Manager
December 1, 1995
<TABLE>
PROXY RESULTS
<CAPTION>
During the six-month period ended October 31, 1995,
Merrill Lynch Growth Fund for Investment and Retirement
shareholders voted on the following proposals. Proposals
1 and 2 were approved at a special shareholders' meeting
on October 12, 1995. Proposal 3 was passed at a special
shareholders' meeting on July 14, 1995. The description
of each proposal and number of shares voted are as follows:
<PAGE>
Shares Voted Shares Voted Shares Voted
For Against Abstain
<S> <C> <C> <C>
1. To consider and act upon a proposal to change the Fund's investment
policy from being a diversified fund to being a non-diversified fund. 43,961,441 14,214,255 4,394,486
2. To consider and act upon a proposal to permit the Fund to invest up to
5% of its total assets in debt securities rated investment grade or below
investment grade by a nationally recognized rating agency or in
unrated debt securities which, in the judgment of the Fund's invest-
ment manager, Merrill Lynch Asset Management, L.P., possess similar
credit characteristics as debt securities rated below investment grade. 42,748,896 15,726,366 4,094,920
3. To consider and act upon a proposal to ratify selection of Deloitte &
Touche LLP as independent auditors of the Fund for its fiscal year
ending October 31, 1995. 113,435,658 2,521,278 6,765,174
</TABLE>
PERFORMANCE DATA
About Fund Performance
Since October 21, 1994, investors have been able to pur-
chase 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 distri-
bution or account maintenance fees. Class A Shares
are available only to eligible investors.
* Class B Shares are subject to a maximum contingent
deferred sales charge of 4% if redeemed during the first
year, decreasing 1% each year thereafter to 0% after the
fourth year. In addition, Class B Shares are subject to
a distribution fee of 0.75% and an account maintenance
fee of 0.25%. These shares automatically convert to
Class D Shares after 8 years.
* Class C Shares are subject to a distribution fee of 0.75%
and an account maintenance fee of 0.25%. In addition,
Class C Shares are subject to a 1% contingent deferred
sales charge if redeemed within one year of purchase.
* Class D Shares incur a maximum initial sales charge of
5.25% and an account maintenance fee of 0.25% (but no
distribution fee).
<PAGE>
Performance data for all of the Fund's shares are pre-
sented in the "Total Return Based on a $10,000 Invest-
ment" graphs on pages 4 and 5 and the "Recent Performance
Results" and "Performance Summary" tables on pages
5 and 6. Data for the Fund's Class A and Class B
Shares are presented in the "Average Annual Total
Return," table on page 4. Data for Class C and Class D
Shares are also presented in the "Aggregate Total
Return" table on page 5.
The "Recent Performance Results" table shows invest-
ment results before the deduction of any sales charges
for all of the Fund's shares for the 12-month and
3-month periods ended October 31, 1995. All data in
this table assume imposition of the actual total
expenses incurred by each class of shares during the
relevant period.
None of the past results shown should be considered a
representation of future performance. Investment
return and principal value of shares will fluctuate so
that shares, when redeemed, may be worth more or
less than their original cost. Dividends paid to each
class of shares will vary because of the different levels
of account maintenance, distribution and transfer
agency fees applicable to each class, which are deducted
from the income available to be paid to shareholders.
PERFORMANCE DATA (continued)
Total Return Based on a $10,000 Investment--Class A Shares and Class B Shares
A line graph depicting the growth of an investment in the Fund's
Class A and Class B Shares compared to the growth of an investment
in the S&P 500 Total Return Index. Beginning and ending values are:
11/28/88** 10/95
ML Growth Fund++--
Class A Shares* $ 9,600 $31,489
S&P 500 Total Return Index++++ $10,000 $26,778
3/27/87** 10/95
ML Growth Fund++--
Class B Shares $10,000 $30,792
S&P 500 Total Return Index++++ $10,000 $25,714
<PAGE>
[FN]
*Assuming maximum sales charge, transaction costs and other
operating expenses, including advisory fees.
**Commencement of Operations.
++ML Growth Fund invests in a non-diversified portfolio of
equity securities placing principal emphasis onthose securities
which the Fund's management believes to be undervalued.
++++This unmanaged broad-based Index is comprised of common stocks.
Past performance is not predictive of future performance.
Average Annual Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 9/30/95 +34.18% +27.14%
Five Years Ended 9/30/95 +24.02 +22.69
Inception (11/28/88)
through 9/30/95 +20.08 +19.14
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 9/30/95 +32.84% +28.84%
Five Years Ended 9/30/95 +22.74 +22.74
Inception (3/27/87)
through 9/30/95 +14.81 +14.81
[FN]
*Maximum contingent deferred sales charge is 4% and is reduced to
0% after 4 years.
**Assuming payment of applicable contingent deferred sales charge.
PERFORMANCE DATA (continued)
<PAGE>
Total Return Based on a $10,000 Investment--Class C Shares and Class D Shares
A line graph depicting the growth of an investment in the Fund's
Class C and Class D Shares compared to the growth of an investment
in the S&P 500 Total Return Index. Beginning and ending values are:
11/28/88** 10/95
ML Growth Fund++--
Class C Shares* $10,000 $12,597
ML Growth Fund++--
Class D Shares $ 9,600 $12,032
S&P 500 Total Return Index++++ $10,000 $12,850
[FN]
*Assuming maximum sales charge, transaction costs and other
operating expenses, including advisory fees.
**Commencement of Operations.
++ML Growth Fund invests in a non-diversified portfolio of
equity securities placing principal emphasis onthose securities
which the Fund's management believes to be undervalued.
++++This unmanaged broad-based Index is comprised of common stocks.
Past performance is not predictive of future performance.
Aggregate Total Return
% Return % Return
Without CDSC With CDSC**
Class C Shares*
Inception (10/21/94) through 9/30/95 +32.68% +31.68%
[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*
Inception (10/21/94) through 9/30/95 +33.65% +26.64%
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
<TABLE>
Recent Performance Results
<CAPTION>
12 Month 3 Month
10/31/95 7/31/95 10/31/94 % Change % Change
<S> <C> <C> <C> <C> <C>
ML Growth Fund Class A Shares* $ 23.13 $ 23.11 $ 19.19 +22.60%(1) +0.09%
ML Growth Fund Class B Shares* 21.60 21.64 18.12 +21.37(1) -0.18
ML Growth Fund Class C Shares* 21.59 21.63 18.12 +21.32(1) -0.18
ML Growth Fund Class D Shares* 23.06 23.06 19.18 +22.29(1) 0.00
Standard & Poor's 500 Index** 581.50 562.06 472.35 +23.11 +3.46
ML Growth Fund Class A Shares--Total Return* +22.60(1) +0.09
ML Growth Fund Class B Shares--Total Return* +21.37(1) -0.18
ML Growth Fund Class C Shares--Total Return* +21.32(1) -0.18
ML Growth Fund Class D Shares--Total Return* +22.29(1) 0.00
Standard & Poor's 500 Index--Total Return** +26.39 +4.11
<FN>
*Investment results shown do not reflect sales charges;
results shown would be lower if a sales charge was included.
**An unmanaged broad-based index comprised of common stocks.
Total investment returns for unmanaged indexes are based
on estimates.
(1)Percent change includes reinvestment of $0.295 per share
capital gains distributions.
</TABLE>
PERFORMANCE DATA (concluded)
<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--10/31/95 17.49 23.13 -- -- +32.25
------ ------
Total $4.435 Total $0.313
Cumulative total return as of 10/31/95: +232.34%*
</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--10/31/95 16.47 21.60 -- -- +31.15
------ ------
Total $4.495 Total $0.423
Cumulative total return as of 10/31/95: +207.92%**
</TABLE>
<PAGE>
<TABLE>
Performance Summary--Class C Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid++ % Change**
<C> <C> <C> <C> <C> <C>
10/21/94--12/31/94 $17.45 $16.47 $0.295 -- - 3.90%
1/1/95--10/31/95 16.47 21.59 -- -- +31.09
------
Total $0.295
Cumulative total return as of 10/31/95: +25.97%**
</TABLE>
<TABLE>
Performance Summary--Class D Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid++ % Change*
<C> <C> <C> <C> <C> <C>
10/21/94--12/31/94 $18.47 $17.47 $0.295 -- - 3.79%
1/1/95--10/31/95 17.47 23.06 -- -- +32.00
------
Total $0.295
Cumulative total return as of 10/31/95: +26.99%*
<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.
**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>
<TABLE>
SCHEDULE OF INVESTMENTS
<CAPTION>
Shares Value Percent of
Industries Held Stocks Cost (Note 1a) Net Assets
<S> <C> <S> <C> <C>
Banking & Financial 1,000,000 Republic New York Corp. $ 44,267,281 $ 58,625,001 1.8%
Services 1,000,000 Safra Republic Holdings S.A. (ADR)* 69,529,500 87,750,000 2.7
-------------- -------------- ------
113,796,781 146,375,001 4.5
Biotechnology 2,083,000 ++CytoTherapeutics, Inc. (d) 13,010,625 20,830,000 0.6
434,500 ++CytoTherapeutics, Inc. (Warrants) (a) 651,750 1,769,284 0.0
-------------- -------------- ------
13,662,375 22,599,284 0.6
Computer Software 2,000,000 Autodesk, Inc. 37,146,849 67,250,000 2.0
1,600,000 ++Landmark Graphics Corp. (d) 27,012,866 34,400,000 1.0
4,652,000 ++Mentor Graphics, Inc. (d) 62,023,772 97,692,000 3.0
2,713,752 ++Platinum Technology, Inc. (d) 49,597,917 49,525,974 1.5
-------------- -------------- ------
175,781,404 248,867,974 7.5
Diversified Resource 1,500,000 Freeport-McMoRan Copper & Gold, Inc.
Companies (Class A) 36,449,552 34,312,500 1.0
5,000,000 Freeport-McMoRan Copper & Gold, Inc.
(Class B) 107,984,584 113,750,000 3.5
3,750,000 Freeport-McMoRan, Inc. 114,789,644 140,156,250 4.2
-------------- -------------- ------
259,223,780 288,218,750 8.7
Electronic 6,000,000 ++Cirrus Logic, Inc. (d) 64,109,324 252,000,000 7.7
Components 800,000 ++Komag, Inc. 23,908,523 45,500,000 1.4
-------------- -------------- ------
88,017,847 297,500,000 9.1
Healthcare Services 4,000,000 U.S. HealthCare, Inc. 101,351,070 154,000,000 4.7
International 3,500,000 Yacimientos Petroliferos Fiscales
Integrated Oils S.A.--Sponsored (ADR)* 83,800,841 59,937,500 1.8
Natural Gas 2,343,750 Panhandle Eastern Corp. 24,371,330 59,179,688 1.8
Gathering & 2,500,000 Western Gas Resources, Inc. (d) 57,319,428 39,062,500 1.2
Transmission -------------- -------------- ------
81,690,758 98,242,188 3.0
<PAGE>
Oil & Gas 3,300,000 Anadarko Petroleum Corp. (d) 119,856,330 143,137,500 4.3
Exploration & 5,000,000 Apache Corp. (d) 144,331,122 127,500,000 3.9
Production 2,200,000 Devon Energy Corp. (d) 34,401,130 47,850,000 1.5
300,000 ++McMoRan Oil & Gas Co. 1,691,662 862,500 0.0
1,650,500 ++Newfield Exploration Co., 46,328,078 48,689,750 1.5
6,975,000 Norcen Energy Resources, Ltd. (d) 105,870,105 90,339,639 2.7
9,000,000 ++Santa Fe Energy Resources, Inc. (d) 83,865,388 79,875,000 2.4
3,000,000 ++Seagull Energy Corporation (d) 63,902,997 51,375,000 1.6
1,000,000 ++United Meridian Corp. 12,390,790 16,875,000 0.5
3,000,000 Vastar Resources, Inc. 89,836,252 84,750,000 2.6
-------------- -------------- ------
702,473,854 691,254,389 21.0
Oil Refining 4,000,000 Valero Energy Corp. (d) 86,245,282 94,500,000 2.9
Oilfield Services 6,000,000 ++Ensco International (b) (d) 66,189,856 101,250,000 3.1
16,300,000 ++Global Marine, Inc. (d) 59,126,323 105,950,000 3.2
1,335,000 ++Pool Energy Services Co. (d) 14,336,959 12,015,000 0.4
-------------- -------------- ------
139,653,138 219,215,000 6.7
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded)
<CAPTION>
Shares Value Percent of
Industries Held Stocks Cost (Note 1a) Net Assets
<S> <C> <S> <C> <C>
Personal $ 3,622,094 ++Dell Computer Corp. (c) $ 41,131,339 $ 168,427,369 5.1%
Computers
Steel 1,000,000 Nucor Corp. 24,425,131 48,125,000 1.5
Total Stocks 1,911,253,600 2,537,262,455 77.1
Face
Amount Short Term Securities
<PAGE>
Commercial ANZ (Delaware), Inc.:
Paper** $30,000,000 5.70% due 11/27/1995 29,876,500 29,876,500 0.9
40,000,000 5.70% due 11/28/1995 39,829,000 39,829,000 1.2
30,000,000 du Pont (E.I.) de Nemours & Co., 5.68%
due 11/21/1995 29,905,333 29,905,333 0.9
51,966,000 General Electric Capital Corp., 5.85%
due 11/01/1995 51,966,000 51,966,000 1.6
Goldman Sachs Group L.P.:
30,000,000 5.72% due 11/20/1995 29,909,433 29,909,433 0.9
40,000,000 5.72% due 11/21/1995 39,872,889 39,872,889 1.2
39,124,000 Matterhorn Capital Corp., 5.71%
due 12/05/1995 38,913,013 38,913,013 1.2
National Fleet Funding Corp.:
40,000,000 5.72% due 11/29/1995 39,822,044 39,822,044 1.2
34,000,000 5.72% due 12/11/1995 33,783,911 33,783,911 1.1
43,000,000 PHH Corp., 5.72% due 12/01/1995 42,795,033 42,795,033 1.3
50,000,000 Penney (J.C.) Funding Corp., 5.71%
due 11/20/1995 49,849,320 49,849,320 1.5
32,950,000 Preferred Receivable Funding Corp.,
5.70% due 12/13/1995 32,730,883 32,730,883 1.0
30,000,000 Siemens Corp., 5.70% due 12/01/1995 29,857,500 29,857,500 0.9
UBS Finance (Delaware) Inc.:
30,000,000 5.71% due 11/07/1995 29,971,450 29,971,450 0.9
50,000,000 5.70% due 12/05/1995 49,730,833 49,730,833 1.5
25,000,000 USAA Capital Corp., 5.70%
due 11/14/1995 24,948,542 24,948,542 0.8
22,229,000 Wal-Mart Stores, Inc., 5.68%
due 12/14/1995 22,078,189 22,078,189 0.7
US Government & 50,000,000 Federal Home Loan Mortgage Corp.,
Agency Obligations** 5.64% due 11/13/1995 49,906,000 49,906,000 1.5
Federal National Mortgage Association:
40,000,000 5.57% due 11/03/1995 39,987,622 39,987,622 1.2
30,000,000 5.62% due 11/07/1995 29,971,900 29,971,900 0.9
Total Short-Term Securities 735,705,395 735,705,395 22.4
Total Investments $2,646,958,995 3,272,967,850 99.5
==============
Other Assets Less Liabilities 17,490,208 0.5
-------------- ------
Net Assets $3,290,458,058 100.0%
============== ======
<FN>
*American Depositary Receipts (ADR).
**Commercial Paper and certain US Government & Agency Obliga-
tions are traded on a discount basis; the interest rates shown are
the discount rates paid at the time of purchase by the Fund.
(a)Warrants entitle the Fund to purchase a predetermined number
of shares of common stock. The purchase price and number of
shares are subject to adjustment under certain conditions until
the expiration date.
(b)Formerly Energy Service Co.
(c)Reflects the conversion of Dell Computer Corp., Series A, 7%
Convertible Preferred Stock.
(d)Investment in an affiliated company (Note 5).
<PAGE>
++Non-income producing security.
See Notes to Financial Statements.
</TABLE>
<TABLE>
FINANCIAL INFORMATION
<CAPTION>
Statement of Assets and Liabilities as of October 31, 1995
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$2,646,958,995) (Note 1a) $3,272,967,850
Cash 368,454
Receivables:
Beneficial interest sold $ 14,563,645
Securities sold 11,170,745
Dividends 1,654,000 27,388,390
-------------
Prepaid registration fees and other assets (Note 1f) 84,045
--------------
Total assets 3,300,808,739
--------------
Liabilities: Payables:
Beneficial interest redeemed 4,273,219
Distributor (Note 2) 1,904,814
Investment adviser (Note 2) 1,798,575
Securities purchased 1,192,400 9,169,008
--------------
Accrued expenses and other liabilities 1,181,673
--------------
Total liabilities 10,350,681
--------------
Net Assets: Net assets $3,290,458,058
==============
Net Assets Class A Shares of beneficial interest, $0.10 par value, unlimited
Consist of: number of shares authorized $ 2,897,141
Class B Shares of beneficial interest, $0.10 par value, unlimited
number of shares authorized 8,892,749
Class C Shares of beneficial interest, $0.10 par value, unlimited
number of shares authorized 395,870
Class D Shares of beneficial interest, $0.10 par value, unlimited
number of shares authorized 2,663,812
Paid-in capital in excess of par 2,357,341,249
Undistributed investment income--net 9,409,014
Undistributed realized capital gains on investments--net 282,849,368
Unrealized appreciation on investments--net 626,008,855
--------------
Net assets $3,290,458,058
==============
<PAGE>
Net Asset Class A--Based on net assets of $670,164,126 and 28,971,409 shares
Value: of beneficial interest outstanding $ 23.13
==============
Class B--Based on net assets of $1,920,450,968 and 88,927,489 shares
of beneficial interest outstanding $ 21.60
==============
Class C--Based on net assets of $85,486,254 and 3,958,699 shares
of beneficial interest outstanding $ 21.59
==============
Class D--Based on net assets of $614,356,710 and 26,638,116 shares
of beneficial interest outstanding $ 23.06
==============
See Notes to Financial Statements.
</TABLE>
<TABLE>
FINANCIAL INFORMATION (continued)
<CAPTION>
Statement of Operations for the Year Ended October 31, 1995
<S> <S> <C> <C>
Investment Interest and discount earned $ 24,562,021
Income Dividends 22,055,731
(Notes 1d Other income 323,257
& 1e): --------------
Total income 46,941,009
--------------
Expenses: Investment advisory fees (Note 2) $ 15,943,250
Account maintenance and distribution fees--Class B (Note 2) 15,900,710
Transfer agent fees--Class B (Note 2) 2,546,791
Account maintenance fees--Class D (Note 2) 771,688
Transfer agent fees--Class A (Note 2) 706,222
Registration fees (Note 1f) 452,675
Transfer agent fees--Class D (Note 2) 443,000
Printing and shareholder reports 372,361
Account maintenance and distribution fees--Class C (Note 2) 347,690
Accounting services (Note 2) 202,204
Custodian fees 152,149
Professional fees 120,065
Transfer agent fees--Class C (Note 2) 62,714
Trustees' fees and expenses 46,792
Pricing fees 894
Other 33,203
--------------
Total expenses before reimbursement 38,102,408
Reimbursement of expenses (Note 2) (570,413)
--------------
Total expenses 37,531,995
--------------
Investment income--net 9,409,014
--------------
<PAGE>
Realized & Realized gain from investments--net 282,849,493
Unrealized Change in unrealized appreciation on investments--net 212,145,489
Gain on --------------
Investments-- Net realized and unrealized gain on investments 494,994,982
Net (Notes 1b, --------------
1c,1e & 3): Net Increase in Net Assets Resulting from Operations $ 504,403,996
==============
See Notes to Financial Statements.
</TABLE>
<TABLE>
FINANCIAL INFORMATION (continued)
<CAPTION>
Statements of Changes in Net Assets
For the Year Ended October 31,
Increase (Decrease) in Net Assets: 1995 1994
<S> <S> <C> <C>
Operations: Investment income (loss)--net $ 9,409,014 $ (5,712,437)
Realized gain on investments and foreign currency transactions--net 282,849,493 35,304,501
Change in unrealized appreciation on investments--net 212,145,489 136,865,088
-------------- --------------
Net increase in net assets resulting from operations 504,403,996 166,457,152
-------------- --------------
Distributions Realized gain on investments--net:
to Share- Class A (6,083,187) (26,111,625)
holders Class B (23,093,382) (122,946,689)
(Note 1g): Class C (87,568) --
Class D (872,515) --
-------------- --------------
Net decrease in net assets resulting from distributions
to shareholders (30,136,652) (149,058,314)
-------------- --------------
<PAGE>
Beneficial Net increase in net assets derived from beneficial
Interest interest transactions 998,495,743 521,396,919
Transactions -------------- --------------
(Note 4):
Net Assets: Total increase in net assets 1,472,763,087 538,795,757
Beginning of year 1,817,694,971 1,278,899,214
-------------- --------------
End of year* $3,290,458,058 $1,817,694,971
============== ==============
<FN>
*Undistributed investment income--net $ 9,409,014 $ --
============== ==============
</TABLE>
<TABLE>
Financial Highlights
<CAPTION>
The following per share data and ratios have been derived
from information provided in the financial statements. Class A
For the Year Ended October 31,
Increase (Decrease) in Net Asset Value: 1995++ 1994++ 1993 1992 1991
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of year $ 19.19 $ 19.22 $ 14.79 $ 15.31 $ 10.61
Operating -------- -------- -------- -------- --------
Performance: Investment income--net .23 .08 .02 .02 .01
Realized and unrealized gain on investments
and foreign currency transactions--net 4.01 2.01 4.86 0.65 4.82
-------- -------- -------- -------- --------
Total from investment operations 4.24 2.09 4.88 0.67 4.83
-------- -------- -------- -------- --------
Less distributions from realized gain on
investments--net (.30) (2.12) (.45) (1.19) (.13)
-------- -------- -------- -------- --------
Net asset value, end of year $ 23.13 $ 19.19 $ 19.22 $ 14.79 $ 15.31
======== ======== ======== ======== ========
Total Based on net asset value per share 22.60% 12.50% 33.97% 5.77% 45.88%
Investment ======== ======== ======== ======== ========
Return:*
Ratios to Expenses, net of reimbursement .82% .82% .81% .84% .87%
Average ======== ======== ======== ======== ========
Net Assets: Expenses .84% .82% .81% .84% .87%
======== ======== ======== ======== ========
Investment income--net 1.10% .44% .29% .28% .46%
======== ======== ======== ======== ========
<PAGE>
Supplemental Net assets, end of year (in thousands) $670,164 $382,077 $229,709 $138,456 $ 92,494
Data: ======== ======== ======== ======== ========
Portfolio turnover 37.42% 4.22% 33.21% 21.20% 27.86%
======== ======== ======== ======== ========
<FN>
*Total investment returns exclude the effects of sales loads.
++Based on average number of shares outstanding during the year.
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (continued)
<TABLE>
Financial Highlights (continued)
<CAPTION>
The following per share data and ratios have been derived
from information provided in the financial statements. Class B
For the Year Ended October 31,
Increase (Decrease) in Net Asset Value: 1995++ 1994++ 1993 1992 1991
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of year $ 18.12 $ 18.43 $ 14.35 $ 15.03 $ 10.53
Operating ---------- ---------- ---------- ---------- ----------
Performance: Investment income (loss)--net .01 (.10) (.11) (.10) (.06)
Realized and unrealized gain on
investments and foreign currency
transactions--net 3.77 1.91 4.64 .61 4.69
---------- ---------- ---------- ---------- ----------
Total from investment operations 3.78 1.81 4.53 .51 4.63
---------- ---------- ---------- ---------- ----------
Less distributions from realized gain on
investments--net (.30) (2.12) (.45) (1.19) (.13)
---------- ---------- ---------- ---------- ----------
Net asset value, end of year $ 21.60 $ 18.12 $ 18.43 $ 14.35 $ 15.03
========== ========== ========== ========== ==========
Total Based on net asset value per share 21.37% 11.41% 32.54% 4.74% 44.32%
Investment ========== ========== ========== ========== ==========
Return:*
Ratios to Expenses, excluding account maintenance and
Average distribution fees and net of reimbursement .84% .84% .83% .87% .90%
Net Assets: ========== ========== ========== ========== ==========
Expenses, net of reimbursement 1.84% .84% .83% .87% .90%
========== ========== ========== ========== ==========
Expenses 1.87% 1.84% 1.83% 1.87% 1.90%
========== ========== ========== ========== ==========
Investment income (loss)--net .04% (.58%) (.78%) (.76%) (.53%)
========== ========== ========== ========== ==========
<PAGE>
Supplemental Net assets, end of year (in thousands) $1,920,451 $1,433,051 $1,049,190 $ 758,061 $ 824,007
Data: ========== ========== ========== ========== ==========
Portfolio turnover 37.42% 4.22% 33.21% 21.20% 27.86%
========== ========== ========== ========== ==========
<FN>
*Total investment returns exclude the effects of sales loads.
++Based on average number of shares outstanding during the year.
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (concluded)
<TABLE>
Financial Highlights (concluded)
<CAPTION>
Class C Class D
For the For the
For the Period For the Period
The following per share data and ratios have been derived Year Oct. 21, Year Oct. 21,
from information provided in the financial statements. Ended 1994+ to Ended 1994+ to
Oct. 31, Oct. 31, Oct. 31, 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--net .03 -- .22 --
Realized and unrealized gain on investments and
foreign currency transactions--net 3.74 .67 3.96 .71
-------- -------- -------- --------
Total from investment operations 3.77 .67 4.18 .71
-------- -------- -------- --------
Less distributions from realized gain on investments--net (.30) -- (.30) --
-------- -------- -------- --------
Net asset value, end of period $ 21.59 $ 18.12 $ 23.06 $ 19.18
======== ======== ======== ========
Total Based on net asset value per share 21.32% 3.84%+++ 22.29% 3.84%+++
Investment ======== ======== ======== ========
Return:**
Ratios to Expenses, excluding account maintenance and
Average distribution fees and net of reimbursement .86% 1.52%* .83% 1.52%*
Net Assets: ======== ======== ======== ========
Expenses, net of reimbursement 1.86% 1.52%* 1.08% 1.52%*
======== ======== ======== ========
Expenses 1.89% 2.52%* 1.10% 1.77%*
======== ======== ======== ========
Investment income (loss)--net .14% (1.17%)* 1.00% (.54%)*
======== ======== ======== ========
<PAGE>
Supplemental Net assets, end of period (in thousands) $ 85,486 $ 1,381 $614,357 $ 1,186
Data: ======== ======== ======== ========
Portfolio turnover 37.42% 4.22% 37.42% 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>
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 non-diversified,
open-end management investment company. The Fund
offers four classes of shares under the Merrill Lynch
Select PricingSM System. Shares of Class A and Class D
are sold with a front-end sales charge. Shares of Class B
and Class C may be subject to a contingent deferred
sales charge. All classes of shares have identical voting,
dividend, liquidation and other rights and the same
terms and conditions, except that Class B, Class C
and Class D Shares bear certain expenses related to the
account maintenance of such shares, and Class B and
Class C Shares also bear certain expenses related to the
distribution of such shares. Each class has exclusive
voting rights with respect to matters relating to its
account maintenance and distribution expenditures.
The following is a summary of significant accounting
policies followed by the Fund.
<PAGE>
(a) Valuation of investments--Portfolio securities which
are traded on stock exchanges are valued at the last
sale price on the exchange on which such securities are
traded as of the close of business on the day the
securities are being valued or, lacking any sales, at the
last available bid price. Securities traded in the over-the-
counter market are valued at the last available bid
price prior to the time of valuation. In cases where
securities are traded on more than one exchange, the
securities are valued on the exchange designated by or
under the authority of the Board of Trustees as the
primary market. Securities which are traded both in the
over-the-counter market and on a stock exchange are
valued according to the broadest and most representa-
tive 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 approxi-
mates 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.
(b) Foreign currency transactions--Transactions denom-
inated 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 unreal-
ized 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 move-
ments 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.
<PAGE>
* 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 options 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 exer-
cise 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 premi-
ums 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 produc-
ing investments.
* 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.
<PAGE>
(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). Divi-
dend 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 sub-
sidiary 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, facili-
ties, equipment and certain other services necessary to
the operations of the Fund. For such services, the Fund
is required to pay a monthly fee based upon the average
daily value of the Fund's net assets at an annual rate
of 0.65%. As a reslut of a voluntary waiver of expenses
beginning on December 16, 1994, the fund will 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 average daily net assets on the first
$1 billion; 0.625% on the next $500 million; and 0.60%
of the average net assets over $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. For the year ended October 31, 1995,
MALM earned fees of $15,943,250 of which $570,413 was
voluntarily waived.
NOTES TO FINANCIAL STATEMNETS (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 mainte-
nance services to Class B, Class C and Class D share-
holders. 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 year ended October 31, 1995, 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 $ 20,065 $ 303,992
Class D $102,417 $1,536,810
For the year ended October 31, 1995, MLPF&S received
contingent deferred sales charges of $1,488,167 and
$20,243 relating to transactions in Class B and Class C
Shares, respectively.
In addition, MLPF&S received $89,700 in commissions
on the execution of portfolio security transactions for
the Fund for the year ended October 31, 1995.
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 MLAM, PSI, MLPF&S, MLFDS, MLFD,
and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-
term securities, for the year ended October 31, 1995
were $1,089,366,116 and $761,155,374, respectively.
Net realized and unrealized gains as of October 31,
1995 were as follows:
Realized Unrealized
Gains Gains
Long-term investments $282,849,493 $626,008,855
------------ ------------
Total $282,849,493 $626,008,855
============ ============
<PAGE>
As of October 31, 1995, net unrealized appreciation for
Federal income tax purposes aggregated $626,008,855,
of which $727,455,464 related to appreciated securities
and $101,446,609 related to depreciated securities. At
October 31, 1995, the aggregate cost of investments for
Federal income tax purposes was $2,646,958,995.
4. Shares of Beneficial Interest:
Net increase in net assets derived from capital share
transactions was $998,495,743 and $521,396,919 for the
years ended October 31, 1995 and 1994, respectively.
Transactions in shares of beneficial interest for each
class were as follows:
Class A Shares for the Year Dollar
Ended October 31, 1995 Shares Amount
Shares sold 14,567,526 $296,704,905
Shares issued to shareholders
in reinvestment of
distributions 317,795 5,475,610
----------- ------------
Total issued 14,885,321 302,180,515
Shares redeemed (5,824,423) (121,604,069)
----------- ------------
Net increase 9,060,898 $180,576,446
=========== ============
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
=========== ============
<PAGE>
Class B Shares for the Year Dollar
Ended October 31, 1995 Shares Amount
Shares sold 45,433,946 $887,607,425
Shares issued to shareholders
in reinvestment of
distributions 1,276,055 20,710,369
----------- ------------
Total issued 46,710,001 908,317,794
Automatic conversion
of shares (22,364,293) (422,714,534)
Shares redeemed (14,507,467) (282,014,523)
----------- ------------
Net increase 9,838,241 $203,588,737
=========== ============
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 Year Dollar
Ended October 31, 1995 Shares Amount
Shares sold 4,263,467 $ 85,246,441
Shares issued to shareholders
in reinvestment of
distributions 4,740 76,935
----------- ------------
Total issued 4,268,207 85,323,376
Shares redeemed (385,718) (7,910,688)
----------- ------------
Net increase 3,882,489 $ 77,412,688
=========== ============
<PAGE>
Class C Shares for the Period
October 21, 1994++ Dollar
October 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.
Class D Shares for the Year Dollar
Ended October 31, 1995 Shares Amount
Shares sold 7,989,658 $166,752,965
Shares issued to shareholders
in reinvestment of
distributions 46,313 797,042
Automatic conversion
of shares 21,033,581 422,714,534
----------- ------------
Total issued 29,069,552 590,264,541
Shares redeemed (2,493,288) (53,346,669)
----------- ------------
Net increase 26,576,264 $536,917,872
=========== ============
Class D Shares for the Period
October 21, 1994++ to Dollar
October 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.
NOTES TO FINANCIAL STATEMENTS (concluded)
<PAGE>
5. 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:
<TABLE>
<CAPTION>
Increase Increase
(Decrease) (Decrease) Dividend
Industry Affiliate in Shares--Net in Cost--Net Income
<S> <S> <C> <C> <C>
Oil & Gas Exploration & Production Anadarko Petroleum Corp. 1,700,000 $ 70,614,574 $ 730,545
Oil & Gas Exploration & Production Apache Corp. 5,000,000 144,331,122 594,300
Electronic Components Cirrus Logic, Inc.* 6,000,000 -- ++
Biotechnology CytoTherapeutics, Inc. 2,083,000 13,010,625 ++
Oil & Gas Exploration & Production Devon Energy Corp. 200,000 3,692,500 246,000
Oilfield Services Ensco International 1,000,000 11,942,303 ++
Oilfield Services Global Marine, Inc. 1,300,000 6,402,500 ++
Computer Software Landmark Graphics Corp. -- -- ++
Computer Software Mentor Graphics -- -- ++
Oil & Gas Exploration & Production Norcen Energy Resources Ltd. 6,975,000 105,870,105 --
Computer Software Platinum Technology, Inc. 2,713,752 49,597,917 ++
Oilfield Services Pool Energy Services Co. -- -- ++
Oil & Gas Exploration & Production Santa Fe Energy Resources, Inc. 2,500,000 25,095,531 ++
Oil & Gas Exploration & Production Seagull Energy Corporation 3,000,000 63,902,997 ++
Oil Refining Valero Energy Corp. -- -- 1,560,000
Natural Gas Gathering & Transmission Western Gas Resources, Inc. 500,000 8,935,988 475,000
<FN>
++Non-income producing security.
*Cirrus Logic, Inc. had a 2-for-1 split.
</TABLE>
<AUDIT-REPORT>
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders of
Merrill Lynch Growth Fund for Investment
and Retirement:
We have audited the accompanying statement of assets
and liabilities, including the schedule of investments,
of Merrill Lynch Growth Fund for Investment and
Retirement as of October 31, 1995, the related state-
ments of operations for the year then ended and
changes in net assets for each of the years in the two-
year period then ended, and the financial highlights
for each of the years in the five-year period then
ended. These financial statements and the financial
highlights are the responsibility of the Fund's manage-
ment. Our responsibility is to express an opinion on
these financial statements and the financial highlights
based on our audits.
<PAGE>
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require
that we plan and perform the audit to obtain reason-
able assurance about whether the financial state-
ments and the financial highlights are free of material
misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclo-
sures in the financial statements. Our procedures
included confirmation of securities owned at October
31, 1995 by correspondence with the custodian and broker.
An audit also includes assessing the accounting principles
used and significant estimates made by management,
as well as evaluating the overall financial statement
presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements and finan-
cial highlights present fairly, in all material respects,
the financial position of Merrill Lynch Growth Fund
for Investment and Retirement as of October 31,
1995, the results of its operations, the changes in its
net assets, and the financial highlights for the respec-
tive stated periods in conformity with generally
accepted accounting principles.
Deloitte & Touche LLP
Princeton, New Jersey
December 1, 1995
</AUDIT-REPORT>
PORTFOLIO INFORMATION (unaudited)
For the Quarter Ended October 31, 1995
Percent of
Ten Largest Equity Holdings Net Assets
Cirrus Logic, Inc. 7.7%
Dell Computer Corp. 5.1
U.S. HealthCare, Inc. 4.7
Freeport-McMoRan Copper & Gold, Inc.* 4.5
Anadarko Petroleum Corp. 4.3
Freeport-McMoRan, Inc. 4.2
Apache Corp. 3.9
Global Marine, Inc. 3.2
Ensco International 3.1
Mentor Graphics, Inc. 3.0
[FN]
*Includes Class A and Class B Shares.
<PAGE>
For the Quarter Ended October 31, 1995
Additions
*Netscape Communications
Norcen Energy Resources, Ltd.
Seagull Energy Corporation
Deletions
Convex Computer Corp.
Morgan Stanley Group, Inc.
*Netscape Communications
Safety-Kleen Corp.
Trinzic Corp.
[FN]
*Added and deleted in the same quarter.
IMPORTANT TAX INFORMATION (unaudited)
During the year ended October 31, 1995, Merrill Lynch
Growth Fund for Investment and Retirement distrib-
uted long-term capital gains of $0.295041 per share to
shareholders of record as of December 16, 1994.
Please retain this information for your records.
OFFICERS AND TRUSTEES
Arthur Zeikel, President and Trustee
James H. Bodurtha, 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
<PAGE>
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
