MERRILL LYNCH GROWTH FUND FOR INVESTMENT AND RETIREMENT
SUPPLEMENT DATED OCTOBER 18, 1995 TO
PROSPECTUS DATED FEBRUARY 28, 1995
The Fund's shareholders have approved a proposal to change the Fund's
status from a diversified to a non-diversified fund. In addition, the Fund's
shareholders have approved a proposal to permit the Fund to invest up to 5% of
its total assets in debt securities rated investment grade or rated below
investment grade by a nationally recognized rating agency (e.g., rated below
Baa by Moody's Investors Service, Inc. ("Moody's") or BBB by Standard & Poor's
Ratings Group ("S&P")) or in unrated debt securities which, in the judgment of
Merrill Lynch Asset Management, L.P. ("MLAM"), possess similar credit
characteristics as debt securities rated below investment grade (commonly
known as "junk bonds"). Accordingly, the disclosure in the Prospectus is
amended as set forth below. All other references in the Prospectus to the
contrary are modified in accordance with the following.
The disclosure in the seventh paragraph of the section entitled
"Investment Objectives and Policies" is modified by deleting the third
sentence in its entirety and adding the following immediately following the
first sentence of such paragraph:
The Fund may invest up to 5% of its total assets in debt securities rated
investment grade or rated below investment grade by a nationally recognized
rating agency (e.g., rated below Baa by Moody's or BBB by S&P) or in unrated
debt securities which, in the judgment of MLAM, possess similar credit
characteristics as debt securities rated below investment grade (commonly
known as "junk bonds"). The Fund will not invest in debt securities rated in
the lowest rating categories (Ca or lower for Moody's and CC or lower for S&P)
unless MLAM believes that the financial condition of the issuer or the
protection afforded the particular securities is stronger than would otherwise
be indicated by such low ratings.
The following disclosure is added to the first paragraph of the section
entitled "Investment Objectives and Policies":
The Fund is classified as a non-diversified fund under the Investment
Company Act of 1940, as amended (the "Investment Company Act") and is not
subject to the diversification requirements of the Investment Company Act.
This policy is fundamental and may only be changed by shareholder vote.
Accordingly, the Fund may invest more than 5% of the value of its assets in
the obligations of a single issuer subject to the diversification requirements
of Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"),
in order to qualify as a regulated investment company (a "RIC") for U.S.
federal income tax purposes. In order to qualify as a RIC under the Code, the
Fund must comply with certain requirements, including limiting its investments
so that at the close of each quarter of the taxable year (i) not more than 25%
of the market value of the Fund's total assets will be invested in the
securities of a single issuer, or any two or more issuers which are controlled
by the Fund and engaged in the same, similar or related businesses, and (ii)
with respect to 50% of the market value of its total assets, not more than 5%
of the market value of its total assets will be invested in the securities of
a single issuer, and the Fund will not own more than 10% of the outstanding
voting securities of a single issuer. Investment in the securities of the
U.S. Government, its agencies and instrumentalities are not included within
the definition of "issuer" for purposes of the diversification requirements of
the Code, while foreign government securities are included within such
definition.
Although operating as a non-diversified fund increases the flexibility
with which MLAM manages the Fund's assets, to the extent the Fund invests a
relatively high percentage of its assets in obligations of a limited number of
issuers, the Fund may be more susceptible than would be a more widely
diversified fund to any single economic, political or regulatory occurrence or
to changes in an issuer's financial condition or in the market's assessment of
the issuers.
Code # 10479-1095ALL
MERRILL LYNCH GROWTH FUND FOR INVESTMENT AND RETIREMENT
SUPPLEMENT DATED OCTOBER 18, 1995 TO
STATEMENT OF ADDITIONAL INFORMATION DATED FEBRUARY 28, 1995
The Fund's shareholders have approved a proposal to change the Fund's
status from a diversified to a non-diversified fund. In addition, the Fund's
shareholders have approved a proposal to permit the Fund to invest up to 5% of
its total assets in debt securities rated investment grade or rated below
investment grade by a nationally recognized rating agency (e.g., rated below
Baa by Moody's Investors Service, Inc. ("Moody's") or BBB by Standard & Poor's
Ratings Group ("S&P")) or in unrated debt securities which, in the judgment of
Merrill Lynch Asset Management, L.P. ("MLAM"), possess similar credit
characteristics as debt securities rated below investment grade (commonly
known as "junk bonds"). Accordingly, the disclosure in the Fund's Statement
of Additional Information is amended as set forth below. All other references
in the Statement of Additional Information to the contrary are modified in
accordance with the following.
The following is added to the section entitled "Investment Objective and
Policies -- Other Investment Policies and Practices":
Investment in Lower Rated Debt Securities: As described in the Fund's
Prospectus, the Fund may invest in debt securities rated below investment
grade by a nationally recognized rating agency (e.g., rated below Baa by
Moody's or BBB by S&P) or in unrated debt securities which, in the judgment of
MLAM, possess similar credit characteristics as debt securities rated below
investment grade (commonly known as "junk bonds").
Investment in junk bonds involves substantial risk. Securities rated Ba
or lower by Moody's or BB or lower by S&P are considered by those rating
agencies to be predominantly speculative with respect to the capacity to pay
interest and repay principal in accordance with the terms of the security, and
generally involve greater volatility of price than securities in higher rating
categories. More specifically, junk bonds may be issued by less creditworthy
companies or by larger, highly leveraged companies and are frequently issued
in corporate restructurings such as mergers and leveraged buyouts. Such
securities are particularly vulnerable to adverse changes in the issuer's
industry and in general economic conditions. Junk bonds frequently are junior
obligations of their issuers, so that in the event of the issuer's bankruptcy,
claims of the holders of junk bonds will be satisfied only after satisfaction
of the claims of senior security holders. While the junk bonds in which the
Fund intends to invest do not include securities which, at the time of
investment, are in default or the issuers of which are in bankruptcy, there
can be no assurance that such events will not occur after the Fund purchases a
particular security, in which case the Fund may experience losses and incur
costs.
Junk bonds tend to be more volatile than higher rated fixed income
securities so that adverse economic events may have a greater impact on the
prices of junk bonds than on higher rated fixed income securities. Like
higher rated fixed income securities, junk bonds are generally purchased and
sold through dealers who make a market in such securities for their own
accounts. However, there are fewer dealers in the junk bond market, which may
be less liquid than the market for higher rated fixed income securities even
under normal economic conditions. Also, there may be significant disparities
in the prices quoted for junk bonds by various dealers. Adverse economic
conditions or investor perceptions (whether or not based on economic
fundamentals) may impair the liquidity of this market and may cause the prices
the Fund receives for its junk bonds to be reduced, or the Fund may experience
difficulty in liquidating a portion of its portfolio. Under such conditions,
judgment may play a greater role in valuing certain of the Fund's portfolio
securities than in the case of securities trading in a more liquid market.
The following disclosure is added to the first paragraph of the section
entitled "Investment Objectives and Policies":
The Fund is classified as a non-diversified fund under the Investment
Company Act of 1940, as amended (the "Investment Company Act") and is not
subject to the diversification requirements of the Investment Company Act.
This policy is fundamental and may only be changed by shareholder vote.
Accordingly, the Fund may invest more than 5% of the value of its assets in
the obligations of a single issuer subject to the diversification requirements
of Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"),
in order to qualify as a regulated investment company (a "RIC") for U.S.
federal income tax purposes. In order to qualify as a RIC under the Code, the
Fund must comply with certain requirements, including limiting its investments
so that at the close of each quarter of the taxable year (i) not more than 25%
of the market value of the Fund's total assets will be invested in the
securities of a single issuer, or any two or more issuers which are controlled
by the Fund and engaged in the same, similar or related businesses, and (ii)
with respect to 50% of the market value of its total assets, not more than 5%
of the market value of its total assets will be invested in the securities of
a single issuer, and the Fund will not own more than 10% of the outstanding
voting securities of a single issuer. Investment in the securities of the
U.S. Government, its agencies and instrumentalities are not included within
the definition of "issuer" for purposes of the diversification requirements of
the Code, while foreign government securities are included within such
definition.
Although operating as a non-diversified fund increases the flexibility
with which MLAM manages the Fund's assets, to the extent the Fund invests a
relatively high percentage of its assets in obligations of a limited number of
issuers, the Fund may be more susceptible than would be a more widely
diversified fund to any single economic, political or regulatory occurrence or
to changes in an issuer's financial condition or in the market's assessment of
the issuers.
Code # 10480-1095ALL
