MERRILL LYNCH
GROWTH FUND
FUND LOGO
Semi-Annual Report
April 30, 1998
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
Arthur Moretti, Senior Vice President
Donald C. Burke, Vice President
Gerald M. Richard, Treasurer
Ira P. Shapiro, Secretary
Custodian
State Street Bank and Trust Company
One Heritage Drive, P2N
North Quincy, MA 02171
Transfer Agent
Merrill Lynch Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 637-3863
This report is not authorized for use as an offer of sale or a
solicitation of an offer to buy shares of the Fund unless
accompanied or preceded by the Fund's current prospectus. Past
performance results shown in this report should not be considered a
representation of future performance. Investment return and
principal value of shares will fluctuate so that shares, when
redeemed, may be worth more or less than their original cost.
Statements and other information herein are as dated and are subject
to change.
Merrill Lynch
Growth Fund
Box 9011
Princeton, NJ
08543-9011
Printed on post-consumer recycled paper
MERRILL LYNCH GROWTH FUND
DEAR SHAREHOLDER
Since its inception over ten years ago, Merrill Lynch Growth Fund
has been managed with a three-year--five-year investment time
horizon for prospective investments and with a concentrated focus on
a relatively short list of portfolio companies. From inception
through the Fund's fiscal year ended October 31, 1997, the Fund's
portfolio turnover averaged just 24%, indicating about a four-year
holding period for a typical investment. At April 30, 1998, the Fund
had 42 equity holdings, reflecting our concentrated research focus.
Considering these two important aspects of the Fund's investment
style, our approach to investing centers on identifying businesses
that we believe will deliver superior long-term total returns to
Fund shareholders. We do not manage the Fund or trade stocks in an
effort to influence quarterly performance.
Our focused research process often gives rise to our identifying
prospective industry segments that can evolve to become a sector
overweight in the Fund's portfolio. For example, we may establish a
holding in a new industry sector and, as we learn more about the
company and the end market it serves, we may see a broader
opportunity made available by changes in the end market. When this
occurs, we search for other businesses likely to benefit from the
same end market opportunity. For example, at April 30, 1998, the
energy and real estate sectors comprised 42.4% and 16.5% of net
assets, respectively, of the Fund's portfolio, since we continue to
believe there is significant long-term growth potential for these
two industries.
Portfolio Matters
In past letters to shareholders, we discussed at length our view of
the long-term opportunity afforded by the Fund's investments in
these two industry sectors. By way of review, we believe that within
the energy sector, the oilfield services industry is in the early
stages of a secular recovery following a protracted industry
downturn dating back to the early 1980s. The investment premise for
the Fund's oilfield services investments is based on our belief
that, despite recent volatility in the price of crude oil, the
oilfield services sector must experience a significant capital
investment cycle in order for hydrocarbon supplies to grow to meet
long-term demand requirements. As this cycle continues to unfold,
the oilfield services sector is positioned to experience increasing
pricing power and high utilization rates, which should drive revenue
and earnings growth for the foreseeable future. Also within the
energy sector, we have investments in several independent oil and
gas exploration and production companies that we believe are well
positioned to grow their businesses. These companies are likely
beneficiaries of the strong domestic natural gas market where,
despite two consecutive warm winters in North America that have
lowered domestic demand growth, supply and demand remain well
balanced.
Finally, we remain constructive on the long-term opportunity for
well-positioned real estate operating companies as the ownership of
commercial real estate transitions from private to public markets.
We believe the potential opportunity appears large as the stock of
institutional grade commercial real estate in the United States is
estimated to exceed $2 trillion while the market capitalization of
equity real estate investment trusts is only about $180 billion. As
this trend accelerates, we believe that it will create acquisition
opportunities and economies of scale for well-positioned real estate
operating companies with positive implications for revenue and
earnings growth.
Merrill Lynch Growth Fund
April 30, 1998
By adhering to the investment approach outlined above, we have
delivered superior long-term performance to shareholders. Given our
long-term investment time horizon and concentrated focus, there have
been periods when our short-term performance diverged from that of
the broader equity market. Such a period occurred during the quarter
ended April 30, 1998, when the Fund's Class A, Class B, Class C and
Class D Shares had total returns of +8.33%, +8.04%, +8.05% and
+8.25%, respectively, compared to the total return of the unmanaged
Standard & Poor's 500 Composite Index of +13.84% for the same three-
month period. (Fund results do not reflect sales charges, and would
be lower if sales charges were included. For complete performance
information, see pages 3 and 4 of this report to shareholders.)
Despite this recent underperformance, we remain confident that the
Fund is well positioned to benefit from the long-term growth
potential of our energy and real estate investment investments.
In Conclusion
We thank you for your investment in Merrill Lynch Growth Fund, 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
(Arthur Moretti)
Arthur Moretti
Senior Vice President and Portfolio Manager
June 8, 1998
It is with great sadness that we report the death of Stephen C.
Johnes, the Fund's Senior Vice President and Portfolio Manager since
its inception on March 27, 1987. To many of us at Merrill Lynch
Asset Management, Stephen Johnes was not only a colleague, but a
friend whose companionship and guidance will be sorely missed.
Effective March 30, 1998, responsibility for managing Merrill Lynch
Growth Fund was assumed by Arthur Moretti, Mr. Johnes' long-time
colleague and the Fund's Associate Portfolio Manager. Having worked
closely with Mr. Johnes in managing the Fund since 1991, Mr. Moretti
has intimate knowledge of the Fund's portfolio holdings and has
played an active role in Fund management. In this respect,
shareholders should not expect the Fund's investment philosophy to
change under Mr. Moretti's direction. We are confident of the
prospects for the Fund under Mr. Moretti's leadership.
Merrill Lynch Growth Fund
April 30, 1998
PERFORMANCE DATA
About Fund Performance
Investors are able to purchase shares of the Fund through the
Merrill Lynch Select Pricing SM System, which offers four pricing
alternatives:
* Class A Shares incur a maximum initial sales charge (front-end
load) of 5.25% and bear no ongoing distribution or account
maintenance fees. Class A Shares are available only to eligible
investors.
* Class B Shares are subject to a maximum contingent deferred sales
charge of 4% if redeemed during the first year, decreasing 1% each
year thereafter to 0% after the fourth year. In addition, Class B
Shares are subject to a distribution fee of 0.75% and an account
maintenance fee of 0.25%. These shares automatically convert to
Class D Shares after approximately 8 years. (There is no initial
sales charge for automatic share conversions.)
* Class C Shares are subject to a distribution fee of 0.75% and an
account maintenance fee of 0.25%. In addition, Class C Shares are
subject to a 1% contingent deferred sales charge if redeemed within
one year of purchase.
* Class D Shares incur a maximum initial sales charge of 5.25% and
an account maintenance fee of 0.25% (but no distribution fee).
None of the past results shown should be considered a representation
of future performance. Figures shown in the "Average Annual Total
Return" tables assume reinvestment of all dividends and capital
gains distributions at net asset value on the ex-dividend date.
Investment return and principal value of shares will fluctuate so
that shares, when redeemed, may be worth more or less than their
original cost. Dividends paid to each class of shares will vary
because of the different levels of account maintenance, distribution
and transfer agency fees applicable to each class, which are
deducted from the income available to be paid to shareholders.
Average Annual Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 3/31/98 +20.54% +14.21%
Five Years Ended 3/31/98 +21.17 +19.87
Inception (11/28/88)
through 3/31/98 +19.80 +19.11
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 3/31/98 +19.33% +15.33%
Five Years Ended 3/31/98 +19.94 +19.94
Ten Years Ended 3/31/98 +17.80 +17.80
[FN]
*Maximum contingent deferred sales charge is 4% and is reduced to 0%
after 4 years.
**Assuming payment of applicable contingent deferred sales charge.
% Return % Return
Without CDSC With CDSC**
Class C Shares*
Year Ended 3/31/98 +19.30% +18.30%
Inception (10/21/94)
through 3/31/98 +22.28 +22.28
[FN]
*Maximum contingent deferred sales charge is 1% and is reduced
to 0% after 1 year.
**Assuming payment of applicable contingent deferred sales charge.
% Return Without % Return With
Sales Charge Sales Charge**
Class D Shares*
Year Ended 3/31/98 +20.21% +13.90%
Inception (10/21/94)
through 3/31/98 +23.22 +21.31
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
Merrill Lynch Growth Fund
April 30, 1998
PERFORMANCE DATA (concluded)
<TABLE>
Recent Performance Results
<CAPTION>
Ten Years/
12 Month 3 Month Since Inception
Total Return Total Return Total Return
<S> <C> <C> <C>
ML Growth Fund Class A Shares* +21.18% + 8.33% +440.45%
ML Growth Fund Class B Shares* +19.92 + 8.04 +413.16
ML Growth Fund Class C Shares* +19.95 + 8.05 + 99.71
ML Growth Fund Class D Shares* +20.85 + 8.25 +105.23
Standard & Poor's 500 Index** +41.07 +13.84 +437.33/+466.16/+157.86
<FN>
*Investment results shown do not reflect sales charges; results
would be lower if a sales charge was included. Total investment
returns are based on changes in net asset values for the periods
shown, and assume reinvestment of all dividends and capital gains
distributions at net asset value on the ex-dividend date. The Fund's
inception dates are: Class A Shares, 11/28/88; Class B Shares, ten
years ended 4/30/98; and Class C and Class D Shares, 10/21/94.
**An unmanaged broad-based index comprised of common stocks. Total
investment returns for unmanaged indexes are based on estimates. Ten
years/since inception total returns are: from 11/28/88 to 4/30/98;
for the ten years ended 4/30/98; and from 10/21/94 to 4/30/98,
respectively.
</TABLE>
PORTFOLIO INFORMATION
For the Quarter Ended April 30, 1998
Percent of
Ten Largest Equity Holdings Net Assets
Ensco International, Inc. 6.4%
IMC Global, Inc. 5.4
Burlington Resources, Inc. 5.2
Schlumberger Ltd., Inc. 5.1
Global Marine, Inc. 4.7
Equity Office Properties Trust 4.2
Safra Republic Holdings S.A. (ADR) 3.9
Apache Corp. 3.9
Equity Residential Properties Trust 3.3
Simon DeBartolo Group, Inc. 3.0
Equity Portfolio Changes for the
Quarter Ended April 30, 1998
Additions
Chelsea GCA Realty, Inc.
Danaher Corporation
Human Genome Sciences Inc.
Lam Research Corporation
Millennium Pharmaceuticals, Inc.
National Instruments Corporation
Noble Affiliates, Inc.
Deletions
Komag, Inc.
Norcen Energy Resources, Ltd.
RAO Gazprom (ADR)
Merrill Lynch Growth Fund
April 30, 1998
<TABLE>
SCHEDULE OF INVESTMENTS
<CAPTION>
Value Percent of
Industries Shares Held Long-Term Investments Cost (Note 1a) Net Assets
<S> <C> <S> <C> <C> <C>
Banking & Financial 1,000,000 Republic New York Corp. $ 44,267,281 $ 133,750,000 1.6%
Services 2,000,000 Safra Republic Holdings S.A. (ADR)* 69,529,500 320,000,000 3.9
-------------- -------------- ------
113,796,781 453,750,000 5.5
Diversified Resource 6,000,000 Freeport-McMoRan Copper & Gold, Inc.
Companies (Class A)(b) 156,119,558 106,875,000 1.3
5,000,000 Freeport-McMoRan Copper & Gold, Inc.
(Class B)(b) 107,984,584 94,062,500 1.2
12,375,000 IMC Global, Inc. (b) 410,919,818 445,500,000 5.4
1,250,000 IMC Global, Inc. (Warrants)(a) 4,374,956 5,781,250 0.1
-------------- -------------- ------
679,398,916 652,218,750 8.0
Domestic 9,000,000 Burlington Resources, Inc. (b) 424,965,127 423,000,000 5.2
Exploration & 3,500,000 Vastar Resources, Inc. 106,578,685 166,468,750 2.0
Production -------------- -------------- ------
531,543,812 589,468,750 7.2
Energy Acquisition & 9,000,000 Apache Corp. (b) 266,675,926 318,375,000 3.9
Exploitation 2,425,800 Devon Energy Corp. (b) 42,782,415 96,728,775 1.2
1,000,000 Devon Financing Trust (Convertible
Preferred)++++ 50,000,000 71,125,000 0.8
4,000,000 ++Newfield Exploration Co. (b) 56,598,373 97,000,000 1.2
1,000,000 Noble Affiliates, Inc. 42,229,489 43,125,000 0.5
-------------- -------------- ------
458,286,203 626,353,775 7.6
Industrial 329,100 Danaher Corporation 22,453,506 23,654,063 0.3
Automation 200,000 ++National Instruments Corporation 5,310,000 7,050,000 0.1
5,443,400 ++Unova, Inc. (b) 78,797,591 126,559,050 1.6
-------------- -------------- ------
106,561,097 157,263,113 2.0
Life Sciences 1,000,000 ++Affymetrix, Inc. 16,662,627 31,125,000 0.4
2,668,400 ++CytoTherapeutics, Inc. (b) 18,409,796 7,087,938 0.1
434,500 CytoTherapeutics, Inc. (Warrants)(a) 651,750 0 0.0
1,665,000 ++Genset (ADR)* 32,285,401 50,054,063 0.6
608,800 ++Human Genome Sciences Inc. 22,265,736 22,069,000 0.3
628,200 ++Millennium Pharmaceuticals, Inc. 10,943,308 11,857,275 0.1
1,065,000 ++Pharmacopeia, Inc. (b) 19,863,232 19,968,750 0.2
-------------- -------------- ------
121,081,850 142,162,026 1.7
Miscellaneous 1,360,500 ++Lam Research Corp. 35,592,104 42,090,469 0.5
669,400 Panamerican Beverages, Inc. (Class A) 19,737,922 26,692,325 0.3
-------------- -------------- ------
55,330,026 68,782,794 0.8
Natural Gas 3,855,434 ++TransMontaigne Oil Co. (b) 27,060,669 56,385,722 0.7
Gathering & 3,500,000 Western Gas Resources, Inc. (b) 74,549,278 65,625,000 0.8
Transmission -------------- -------------- ------
101,609,947 122,010,722 1.5
Offshore Drilling 18,400,000 Ensco International, Inc. (b) 194,651,449 519,800,000 6.4
Companies 16,300,000 ++Global Marine, Inc. (b) 59,126,323 384,068,750 4.7
3,000,000 Santa Fe International Corp. 118,225,728 117,562,500 1.4
-------------- -------------- ------
372,003,500 1,021,431,250 12.5
Oilfield Services 8,000,000 ++Nabors Industries, Inc. (b) 114,462,629 201,500,000 2.5
5,000,000 Schlumberger Ltd., Inc. 223,527,267 414,375,000 5.1
2,500,000 Tidewater, Inc. 109,591,099 99,062,500 1.2
4,600,000 ++Weatherford Enterra, Inc. (b) 135,307,975 230,287,500 2.8
2,105,800 ++Western Atlas, Inc. 110,554,056 166,358,200 2.0
-------------- -------------- ------
693,443,026 1,111,583,200 13.6
</TABLE>
Merrill Lynch Growth Fund
April 30, 1998
<TABLE>
SCHEDULE OF INVESTMENTS (continued)
<CAPTION>
Value Percent of
Industries Shares Held Long-Term Investments Cost (Note 1a) Net Assets
<S> <C> <S> <C> <C> <C>
Personal Computers 1,000,000 ++Dell Computer Corp. $ 3,107,425 $ 80,687,500 1.0%
Real Estate Investment 2,000,000 AMB Property Corp. 44,944,801 46,000,000 0.6
Trusts--Industrial
Real Estate Investment 4,920,000 Crescent Real Estate Equities, Inc. 121,354,728 167,895,000 2.0
Trusts--Office 11,999,772 Equity Office Properties Trust 298,818,081 341,243,516 4.2
-------------- -------------- ------
420,172,809 509,138,516 6.2
Real Estate Investment 2,000,000 Avalon Properties, Inc. 52,431,019 56,250,000 0.7
Trusts--Residential 5,500,000 Equity Residential Properties Trust (b) 239,719,663 270,187,500 3.3
-------------- -------------- ------
292,150,682 326,437,500 4.0
Real Estate Investment 312,800 Chelsea GCA Realty, Inc. 11,903,918 11,945,050 0.1
Trusts--Retail 3,742,000 Federal Realty Investment Trust (b) 102,498,003 90,977,375 1.1
1,689,200 New Plan Realty Trust 40,943,827 41,279,825 0.5
7,456,600 Simon DeBartolo Group, Inc. (b) 219,856,087 245,601,762 3.0
1,842,900 Weingarten Realty Investors (b) 76,494,865 78,553,612 1.0
-------------- -------------- ------
451,696,700 468,357,624 5.7
Total Long-Term Investments 4,445,127,575 6,375,645,520 77.9
<CAPTION>
Face
Amount Short-Term Investments
<S> <C> <S> <C> <C> <C>
Commercial $50,000,000 Associates First Capital Corp., 5.53%
Paper** due 5/22/1998 49,838,708 49,838,708 0.6
36,000,000 BellSouth Telecommunications Inc.,
5.54% due 5/04/1998 35,983,380 35,983,380 0.4
Block Financial Corp.:
14,000,000 5.50% due 5/22/1998 13,955,083 13,955,083 0.2
30,000,000 5.50% due 5/28/1998 29,876,250 29,876,250 0.4
50,000,000 CIT Group Holdings, Inc., 5.50% due
5/19/1998 49,862,500 49,862,500 0.6
37,085,000 CSW Credit, Inc., 5.53% due 6/12/1998 36,845,740 36,845,740 0.5
CXC Inc.:
45,000,000 5.52% due 5/15/1998 44,903,400 44,903,400 0.6
50,000,000 5.51% due 6/16/1998 49,647,972 49,647,972 0.6
17,850,000 Carnival (UK) PLC, 5.52% due 5/21/1998 17,795,260 17,795,260 0.2
25,000,000 Ciesco, L.P., 5.51% due 5/12/1998 24,957,910 24,957,910 0.3
Clipper Receivables Corp.:
30,266,000 5.52% due 5/19/1998 30,182,466 30,182,466 0.4
38,059,000 5.52% due 6/05/1998 37,854,750 37,854,750 0.5
Corporate Asset Funding Co., Inc.:
50,000,000 5.51% due 5/07/1998 49,954,083 49,954,083 0.6
50,000,000 5.50% due 5/14/1998 49,900,694 49,900,694 0.6
25,000,000 Corporate Receivables Corp., 5.50% due
6/08/1998 24,854,861 24,854,861 0.3
Countrywide Home Loans, Inc.:
50,000,000 5.52% due 5/14/1998 49,900,333 49,900,333 0.6
50,000,000 5.54% due 5/26/1998 49,807,639 49,807,639 0.6
25,000,000 Eastman Kodak Co., 5.51% due 5/19/1998 24,931,125 24,931,125 0.3
50,000,000 Eureka Securitization Inc., 5.53% due
5/13/1998 49,907,833 49,907,833 0.6
Falcon Asset Securitization Corp.:
50,000,000 5.51% due 5/11/1998 49,923,472 49,923,472 0.6
29,945,000 5.51% due 6/10/1998 29,761,670 29,761,670 0.4
</TABLE>
Merrill Lynch Growth Fund
April 30, 1998
<TABLE>
SCHEDULE OF INVESTMENTS (concluded)
<CAPTION>
Value Percent of
Industries Face Amount Short-Term Investments Cost (Note 1a) Net Assets
<S> <C> <S> <C> <C> <C>
Commercial Finova Capital Corp.:
Paper** $24,300,000 5.53% due 5/04/1998 $ 24,288,802 $ 24,288,802 0.3%
(concluded) 50,000,000 5.52% due 6/11/1998 49,685,667 49,685,667 0.6
49,600,000 First Data Corp., 5.52% due 6/09/1998 49,303,392 49,303,392 0.6
21,742,000 General Motors Acceptance Corp.,
5.56% due 5/01/1998 21,742,000 21,742,000 0.3
11,345,000 Goldman Sachs Group, 5.51% due
5/07/1998 11,334,582 11,334,582 0.1
50,000,000 International Securitization Corp.,
5.53% due 6/10/1998 49,692,778 49,692,778 0.6
Lehman Brothers Holdings, Inc.:
50,000,000 5.54% due 5/08/1998 49,946,139 49,946,139 0.6
50,000,000 5.52% due 6/02/1998 49,754,667 49,754,667 0.6
30,000,000 5.54% due 6/12/1998 29,806,100 29,806,100 0.4
50,000,000 5.53% due 6/19/1998 49,623,653 49,623,653 0.6
Lexington Parker Capital Corp.:
28,765,000 5.56% due 5/08/1998 28,733,902 28,733,902 0.4
26,461,000 5.51% due 6/12/1998 26,290,900 26,290,900 0.3
30,280,000 Metropolitan Life Funding Corp.,
5.50% due 5/11/1998 30,233,739 30,233,739 0.4
25,900,000 Monsanto Company, 5.50% due 5/12/1998 25,856,474 25,856,474 0.3
50,000,000 Morgan (J.P.) & Co., Inc., 5.52% due
5/01/1998 50,000,000 50,000,000 0.6
50,000,000 New Center Asset Trust, 5.51% due
5/21/1998 49,846,944 49,846,944 0.6
50,282,000 Park Avenue Receivables Corp., 5.55%
due 6/04/1998 50,018,439 50,018,439 0.6
33,797,000 Rank Xerox Capital PLC (Europe), 5.51%
due 5/05/1998 33,776,309 33,776,309 0.4
Republic Industries, Inc.:
50,186,000 5.51% due 6/15/1998 49,840,344 49,840,344 0.6
18,499,000 5.52% due 6/16/1998 18,368,520 18,368,520 0.2
35,000,000 Riverwoods Funding Corp., 5.52% due
5/05/1998 34,978,533 34,978,533 0.4
Three Rivers Funding Corp.:
19,225,000 5.52% due 5/05/1998 19,213,209 19,213,209 0.2
25,000,000 5.52% due 5/11/1998 24,961,667 24,961,667 0.3
28,503,000 5.53% due 5/18/1998 28,428,568 28,428,568 0.4
50,000,000 Transamerica Finance Corp., 5.51% due
5/15/1998 49,892,861 49,892,861 0.6
25,000,000 WCP Funding Inc., 5.51% due 6/18/1998 24,816,333 24,816,333 0.3
-------------- -------------- ------
1,731,079,651 1,731,079,651 21.2
US Government Federal Home Loan Mortgage Corp.:
Agency 50,000,000 5.43% due 5/08/1998 49,947,208 49,947,208 0.6
Obligations** 32,100,000 5.41% due 5/28/1998 31,969,754 31,969,754 0.4
-------------- -------------- ------
81,916,962 81,916,962 1.0
Total Short-Term Investments 1,812,996,613 1,812,996,613 22.2
Total Investments $6,258,124,188 8,188,642,133 100.1
==============
Liabilities in Excess of Other Assets (4,248,214) (0.1)
-------------- ------
Net Assets $8,184,393,919 100.0%
============== ======
<FN>
*American Depositary Receipts (ADR).
**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.
++++The security may be offered and sold to "qualified institutional
buyers" under Rule 144A of the Securities Act of 1933.
(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)Investment in an affiliated company (Note 5).
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Growth Fund
April 30, 1998
FINANCIAL INFORMATION
<TABLE>
Statement of Assets and Liabilities as of April 30, 1998
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$6,258,124,188)
(Note 1a) $8,188,642,133
Cash 76,224
Receivables:
Securities sold $ 44,965,690
Beneficial interest sold 12,738,129
Dividends 3,374,600
Interest 415,082 61,493,501
--------------
Prepaid registration fees and other assets (Note 1f) 97,912
--------------
Total assets 8,250,309,770
--------------
Liabilities: Payables:
Beneficial interest redeemed 41,677,445
Securities purchased 13,459,403
Distributor (Note 2) 4,352,623
Investment adviser (Note 2) 4,133,806 63,623,277
--------------
Accrued expenses and other liabilities 2,292,574
--------------
Total liabilities 65,915,851
--------------
Net Assets: Net assets $8,184,393,919
==============
Net Assets Class A Shares of beneficial interest, $0.10 par value,
Consist of: unlimited number of shares authorized $ 5,888,404
Class B Shares of beneficial interest, $0.10 par value,
unlimited number of shares authorized 16,295,665
Class C Shares of beneficial interest, $0.10 par value,
unlimited number of shares authorized 1,644,330
Class D Shares of beneficial interest, $0.10 par value,
unlimited number of shares authorized 5,631,810
Paid-in capital in excess of par 6,081,656,805
Undistributed investment income--net 12,479,361
Undistributed realized capital gains on investments and
foreign currency transactions--net 130,279,599
Unrealized appreciation on investments--net 1,930,517,945
--------------
Net assets $8,184,393,919
==============
Net Asset Value: Class A--Based on net assets of $1,722,283,711 and 58,884,036 shares
of beneficial interest outstanding $ 29.25
==============
Class B--Based on net assets of $4,381,950,158 and 162,956,653 shares
of beneficial interest outstanding $ 26.89
==============
Class C--Based on net assets of $438,971,250 and 16,443,297 shares
of beneficial interest outstanding $ 26.70
==============
Class D--Based on net assets of $1,641,188,800 and 56,318,105 shares
of beneficial interest outstanding $ 29.14
==============
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Growth Fund
April 30, 1998
FINANCIAL INFORMATION (continued)
<TABLE>
Statement of Operations for the Six Months Ended April 30, 1998
<S> <S> <C> <C>
Investment Interest and discount earned $ 54,770,096
Income Dividends (net of $132,877 foreign withholding tax) 35,015,069
(Notes 1d & 1e): --------------
Total income 89,785,165
--------------
Expenses: Investment advisory fees (Note 2) $ 26,153,823
Account maintenance and distribution fees--Class B (Note 2) 21,815,565
Transfer agent fees--Class B (Note 2) 3,416,942
Account maintenance and distribution fees--Class C (Note 2) 2,109,708
Account maintenance fees--Class D (Note 2) 1,979,105
Transfer agent fees--Class A (Note 2) 1,165,148
Transfer agent fees--Class D (Note 2) 1,099,364
Transfer agent fees--Class C (Note 2) 355,739
Registration fees (Note 1f) 193,321
Printing and shareholder reports 185,288
Accounting services (Note 2) 177,483
Custodian fees 129,405
Professional fees 37,928
Trustees' fees and expenses 21,114
Pricing fees 1,554
Other 38,958
--------------
Total expenses before reimbursement 58,880,445
Reimbursement of expenses (Note 2) (1,701,901)
--------------
Total expenses after reimbursement 57,178,544
--------------
Investment income--net 32,606,621
--------------
Realized & Realized gain (loss) from:
Unrealized Gain Investments--net 130,645,176
(Loss) on Foreign currency transactions--net (365,444) 130,279,732
Investments & --------------
Foreign Currency Change in unrealized appreciation on investments--net (638,878,509)
Transactions-- --------------
Net (Notes 1b, 1c, Net realized and unrealized loss on investments and foreign
1e & 3): currency transactions (508,598,777)
--------------
Net Decrease in Net Assets Resulting from Operations $ (475,992,156)
==============
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Growth Fund
April 30, 1998
FINANCIAL INFORMATION (continued)
<TABLE>
Statements of Changes in Net Assets
<CAPTION>
For the Six For the
Months Ended Year Ended
April 30, October 31,
Increase (Decrease) in Net Assets: 1998 1997
<S> <S> <C> <C>
Operations: Investment income--net $ 32,606,621 $ 77,646,122
Realized gain on investments and foreign currency
transactions--net 130,279,732 533,833,873
Change in unrealized appreciation on investments--net (638,878,509) 1,320,593,787
-------------- --------------
Net increase (decrease) in net assets resulting from
operations (475,992,156) 1,932,073,782
-------------- --------------
Dividends & Investment income--net:
Distributions to Class A (13,568,278) (20,060,922)
Shareholders Class B (15,997,481) (27,296,782)
(Note 1g): Class C (1,606,325) (2,319,545)
Class D (10,954,060) (15,879,973)
Realized gain on investments--net:
Class A (105,247,821) (72,708,025)
Class B (300,384,904) (214,744,463)
Class C (28,168,185) (14,376,468)
Class D (100,092,315) (65,179,339)
-------------- --------------
Net decrease in net assets resulting from dividends and
distributions to shareholders (576,019,369) (432,565,517)
-------------- --------------
Beneficial Net increase in net assets derived from beneficial
Interest interest transactions 709,544,453 1,933,943,957
Transactions -------------- --------------
(Note 4):
Net Assets: Total increase (decrease) in net assets (342,467,072) 3,433,452,222
Beginning of period 8,526,860,991 5,093,408,769
-------------- --------------
End of period* $8,184,393,919 $8,526,860,991
============== ==============
<FN>
*Undistributed investment income--net $ 12,479,361 $ 21,998,884
============== ==============
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Growth Fund
April 30, 1998
FINANCIAL INFORMATION (continued)
<TABLE>
Financial Highlights
<CAPTION>
Class A++
For the
The following per share data and ratios have been derived Six Months
from information provided in the financial statements. Ended
April 30, For the Year Ended October 31,
Increase (Decrease) in Net Asset Value: 1998 1997 1996 1995 1994
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 33.13 $ 26.87 $ 23.13 $ 19.19 $ 19.22
Operating ---------- ---------- ---------- ---------- ----------
Performance: Investment income--net .21 .53 .31 .23 .08
Realized and unrealized gain (loss)
on investments and foreign currency
transactions--net (1.91) 7.98 5.63 4.01 2.01
---------- ---------- ---------- ---------- ----------
Total from investment operations (1.70) 8.51 5.94 4.24 2.09
---------- ---------- ---------- ---------- ----------
Less dividends and distributions:
Investment income--net (.25) (.44) (.35) -- --
Realized gain on investments--net (1.93) (1.81) (1.85) (.30) (2.12)
---------- ---------- ---------- ---------- ----------
Total dividends and distributions (2.18) (2.25) (2.20) (.30) (2.12)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 29.25 $ 33.13 $ 26.87 $ 23.13 $ 19.19
========== ========== ========== ========== ==========
Total Investment Based on net asset value per share (5.32%)+++ 34.03% 28.15% 22.60% 12.50%
Return:** ========== ========== ========== ========== ==========
Ratios to Expenses, net of reimbursement .77%* .77% .80% .82% .82%
Average ========== ========== ========== ========== ==========
Net Assets: Expenses .81%* .81% .84% .84% .82%
========== ========== ========== ========== ==========
Investment income--net 1.46%* 1.84% 1.28% 1.10% .44%
========== ========== ========== ========== ==========
Supplemental Net assets, end of period (in
Data: thousands) $1,722,284 $1,769,296 $1,056,870 $ 670,164 $ 382,077
========== ========== ========== ========== ==========
Portfolio turnover 10.58% 24.75% 30.01% 37.42% 4.22%
========== ========== ========== ========== ==========
Average commission rate paid++++ $ .0507 $ .0559 $ .0539 -- --
========== ========== ========== ========== ==========
<FN>
*Annualized.
**Total investment returns exclude the effects of sales loads.
++Based on average shares outstanding.
++++For fiscal years beginning on or after September 1, 1995, the
Fund is required to disclose its average commission rate per share
for purchases and sales of equity securities. The "Average
Commission Rate Paid" includes commissions paid in foreign
currencies, which have been converted into US dollars using the
prevailing exchange rate on the date of the transaction. Such
conversions may significantly affect the rate shown.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Growth Fund
April 30, 1998
FINANCIAL INFORMATION (continued)
<TABLE>
Financial Highlights (continued)
<CAPTION>
Class B++
For the
The following per share data and ratios have been derived Six Months
from information provided in the financial statements. Ended
April 30, For the Year Ended October 31,
Increase (Decrease) in Net Asset Value: 1998 1997 1996 1995 1994
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 30.63 $ 25.03 $ 21.60 $ 18.12 $ 18.43
Operating ---------- ---------- ---------- ---------- ----------
Performance: Investment income (loss)--net .06 .22 .06 .01 (.10)
Realized and unrealized gain (loss)
on investments and foreign currency
transactions--net (1.77) 7.39 5.26 3.77 1.91
---------- ---------- ---------- ---------- ----------
Total from investment operations (1.71) 7.61 5.32 3.78 1.81
---------- ---------- ---------- ---------- ----------
Less dividends and distributions:
Investment income--net (.10) (.20) (.04) -- --
Realized gain on investments--net (1.93) (1.81) (1.85) (.30) (2.12)
---------- ---------- ---------- ---------- ----------
Total dividends and distributions (2.03) (2.01) (1.89) (.30) (2.12)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 26.89 $ 30.63 $ 25.03 $ 21.60 $ 18.12
========== ========== ========== ========== ==========
Total Investment Based on net asset value per share (5.78%)+++ 32.62% 26.84% 21.37% 11.41%
Return:** ========== ========== ========== ========== ==========
Ratios to Average Expenses, net of reimbursement 1.78%* 1.79% 1.82% 1.84% 1.84%
Net Assets: ========== ========== ========== ========== ==========
Expenses 1.83%* 1.83% 1.85% 1.87% 1.84%
========== ========== ========== ========== ==========
Investment income (loss)--net .45%* .82% .26% .04% (.58%)
========== ========== ========== ========== ==========
Supplemental Net assets, end of period (in
Data: thousands) $4,381,950 $4,687,523 $2,916,507 $1,920,451 $1,433,051
========== ========== ========== ========== ==========
Portfolio turnover 10.58% 24.75% 30.01% 37.42% 4.22%
========== ========== ========== ========== ==========
Average commission rate paid++++ $ .0507 $ .0559 $ .0539 -- --
========== ========== ========== ========== ==========
<FN>
*Annualized.
**Total investment returns exclude the effects of sales loads.
++Based on average shares outstanding.
++++For fiscal years beginning on or after September 1, 1995, the
Fund is required to disclose its average commission rate per share
for purchases and sales of equity securities. The "Average
Commission Rate Paid" includes commissions paid in foreign
currencies, which have been converted into US dollars using the
prevailing exchange rate on the date of the transaction. Such
conversions may significantly affect the rate shown.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Growth Fund
April 30, 1998
FINANCIAL INFORMATION (continued)
<TABLE>
Financial Highlights (continued)
<CAPTION>
Class C++
For the
For the Period
The following per share data and ratios have been derived Six Months Oct. 21,
from information provided in the financial statements. Ended 1994++ to
April 30, For the Year Ended October 31, Oct.31,
Increase (Decrease) in Net Asset Value: 1998 1997 1996 1995 1994
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 30.43 $ 24.89 $ 21.59 $ 18.12 $ 17.45
Operating ---------- ---------- ---------- ---------- ----------
Performance: Investment income--net .06 .22 .06 .03 --
Realized and unrealized gain (loss)
on investments and foreign currency
transactions--net (1.75) 7.34 5.23 3.74 .67
---------- ---------- ---------- ---------- ----------
Total from investment operations (1.69) 7.56 5.29 3.77 .67
---------- ---------- ---------- ---------- ----------
Less dividends and distributions:
Investment income--net (.11) (.21) (.14) -- --
Realized gain on investments--net (1.93) (1.81) (1.85) (.30) --
---------- ---------- ---------- ---------- ----------
Total dividends and distributions (2.04) (2.02) (1.99) (.30) --
---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 26.70 $ 30.43 $ 24.89 $ 21.59 $ 18.12
========== ========== ========== ========== ==========
Total Investment Based on net asset value per share (5.77%)+++ 32.63% 26.84% 21.32% 3.84%+++
Return:** ========== ========== ========== ========== ==========
Ratios to Average Expenses, net of reimbursement 1.80%* 1.80% 1.84% 1.86% 2.52%*
Net Assets: ========== ========== ========== ========== ==========
Expenses 1.84%* 1.84% 1.87% 1.89% 2.52%*
========== ========== ========== ========== ==========
Investment income (loss)--net .42%* .81% .25% .14% (1.17%)*
========== ========== ========== ========== ==========
Supplemental Net assets, end of period (in
Data: thousands) $ 438,971 $ 427,377 $ 187,221 $ 85,486 $ 1,381
========== ========== ========== ========== ==========
Portfolio turnover 10.58% 24.75% 30.01% 37.42% 4.22%
========== ========== ========== ========== ==========
Average commission rate paid++++++ $ .0507 $ .0559 $ .0539 -- --
========== ========== ========== ========== ==========
<FN>
*Annualized.
**Total investment returns exclude the effects of sales loads.
++Commencement of operations.
++++Based on average shares outstanding.
++++++For fiscal years beginning on or after September 1, 1995, the
Fund is required to disclose its average commission rate per share
for purchases and sales of equity securities. The "Average
Commission Rate Paid" includes commissions paid in foreign
currencies, which have been converted into US dollars using the
prevailing exchange rate on the date of the transaction. Such
conversions may significantly affect the rate shown.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Growth Fund
April 30, 1998
FINANCIAL INFORMATION (concluded)
<TABLE>
Financial Highlights (concluded)
<CAPTION>
Class D++
For the
For the Period
The following per share data and ratios have been derived Six Months Oct. 21,
from information provided in the financial statements. Ended 1994++ to
April 30, For the Year Ended October 31, Oct.31,
Increase (Decrease) in Net Asset Value: 1998 1997 1996 1995 1994
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 33.01 $ 26.79 $ 23.06 $ 19.18 $ 18.47
Operating ---------- ---------- ---------- ---------- ----------
Performance: Investment income--net .18 .46 .24 .22 --
Realized and unrealized gain (loss)
on investments and and foreign
currency transactions--net (1.91) 7.95 5.63 3.96 .71
---------- ---------- ---------- ---------- ----------
Total from investment operations (1.73) 8.41 5.87 4.18 .71
---------- ---------- ---------- ---------- ----------
Less dividends and distributions:
Investment income--net (.21) (.38) (.29) -- --
Realized gain on investments--net (1.93) (1.81) (1.85) (.30) --
---------- ---------- ---------- ---------- ----------
Total dividends and distributions (2.14) (2.19) (2.14) (.30) --
---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 29.14 $ 33.01 $ 26.79 $ 23.06 $ 19.18
========== ========== ========== ========== ==========
Total Investment Based on net asset value per share (5.42%)+++ 33.67% 27.83% 22.29% 3.84%+++
Return:** ========== ========== ========== ========== ==========
Ratios to Average Expenses, net of reimbursement 1.02%* 1.02% 1.05% 1.08% 1.77%*
Net Assets: ========== ========== ========== ========== ==========
Expenses 1.06%* 1.06% 1.08% 1.10% 1.77%*
========== ========== ========== ========== ==========
Investment income (loss)--net 1.21%* 1.59% 1.03% 1.00% (.54%)*
========== ========== ========== ========== ==========
Supplemental Net assets, end of period (in
Data: thousands) $1,641,189 $1,642,665 $ 932,811 $ 614,357 $ 1,186
========== ========== ========== ========== ==========
Portfolio turnover 10.58% 24.75% 30.01% 37.42% 4.22%
========== ========== ========== ========== ==========
Average commission rate paid++++++ $ .0507 $ .0559 $ .0539 -- --
========== ========== ========== ========== ==========
<FN>
*Annualized.
**Total investment returns exclude the effects of sales loads.
++Commencement of operations.
++++Based on average shares outstanding.
++++++For fiscal years beginning on or after September 1, 1995, the
Fund is required to disclose its average commission rate per share
for purchases and sales of equity securities. The "Average
Commission Rate Paid" includes commissions paid in foreign
currencies, which have been converted into US dollars using the
prevailing exchange rate on the date of the transaction. Such
conversions may significantly affect the rate shown.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Growth Fund
April 30, 1998
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
Merrill Lynch Growth Fund (the "Fund") is registered under the
Investment Company Act of 1940 as a non-diversified, open-end
management investment company. These unaudited financial statements
reflect all adjustments which are, in the opinion of management,
necessary to a fair statement of the results for the interim period
presented. All such adjustments are of a normal recurring nature.
The Fund offers four classes of shares under the Merrill Lynch
Select Pricing SM System. Shares of Class A and Class D are sold with
a front-end sales charge. Shares of Class B and Class C may be
subject to a contingent deferred sales charge. All classes of
shares have identical voting, dividend, liquidation and other rights
and the same terms and conditions, except that Class B, Class C and
Class D Shares bear certain expenses related to the account
maintenance of such shares, and Class B and Class C Shares also bear
certain expenses related to the distribution of such shares. Each
class has exclusive voting rights with respect to matters relating
to its account maintenance and distribution expenditures. The
following is a summary of significant accounting policies followed
by the Fund.
(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.
(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.
Merrill Lynch Growth Fund
April 30, 1998
NOTES TO FINANCIAL STATEMENTS (continued)
* 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
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.
* Financial futures contracts--The Fund may purchase or sell
financial futures contracts and options on such futures contracts
for the purpose of hedging the market risk of existing securities or
the intended purchase of securities. Futures contracts are contracts
for delayed delivery of securities at a specific future date and at
a specific price or yield. 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 dates. Dividends from foreign securities where the ex-
dividend date may have passed are subsequently recorded when the
Fund has determined 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.
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 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 result of a voluntary waiver of expenses beginning on
December 16, 1994, the Fund will pay 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% of the average net assets on the next $500 million;
and 0.60% of the average net assets over $1.5 billion. For the six
months ended April 30, 1998, MLAM earned fees of $26,153,823, of
which $1,701,901 was voluntarily waived.
Merrill Lynch Growth Fund
April 30, 1998
Pursuant to 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.
For the six months ended April 30, 1998, 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 $ 4,689 $ 67,700
Class D $71,665 $1,058,940
For the six months ended April 30, 1998, MLPF&S received contingent
deferred sales charges of $1,388,700 and $72,455 relating to
transactions in Class B and Class C Shares, respectively.
Furthermore, MLPF&S received contingent deferred sales charges of
$108,694 and $33,000 relating to transactions subject to front-end
sales charge waivers in Class A and Class D Shares, respectively.
In addition, MLPF&S received $66,300 in commissions on the execution
of portfolio security transactions for the Fund for the six months
ended April 30, 1998.
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, MLFDS, MLFD, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the six months ended April 30, 1998 were $683,924,694 and
$766,496,328, respectively.
Net realized gains (losses) for the six months ended April 30, 1998
and net unrealized gains as of April 30, 1998 were as follows:
Realized Unrealized
Gains (Losses) Gains
Long-term investments $130,645,183 $1,930,517,945
Short-term investments (7) --
Foreign currency
transactions (365,444) --
------------ --------------
Total $130,279,732 $1,930,517,945
============ ==============
As of April 30, 1998, net unrealized appreciation for Federal income
tax purposes aggregated $1,930,517,945, of which $2,039,456,791
related to appreciated securities and $108,938,846 related to
depreciated securities. At April 30, 1998, the aggregate cost of
investments for Federal income tax purposes was $6,258,124,188.
4. Shares of Beneficial Interest:
Net increase in net assets derived from beneficial interest
transactions was $709,544,453 and $1,933,943,957 for the six months
ended April 30, 1998 and for the year ended October 31, 1997,
respectively.
Merrill Lynch Growth Fund
April 30, 1998
NOTES TO FINANCIAL STATEMENTS (concluded)
Transactions in shares of beneficial interest for each class were as
follows:
Class A Shares for the Six Dollar
Months Ended April 30, 1998 Shares Amount
Shares sold 13,632,121 $ 391,841,797
Shares issued to shareholders
in reinvestment of dividends
and distributions 3,517,123 106,041,255
------------- --------------
Total issued 17,149,244 497,883,052
Shares redeemed (11,677,716) (332,411,172)
------------- --------------
Net increase 5,471,528 $ 165,471,880
============= ==============
Class A Shares for the Year Dollar
Ended October 31, 1997 Shares Amount
Shares sold 26,024,620 $ 745,365,301
Shares issued to shareholders
in reinvestment of dividends
and distributions 3,259,696 85,223,804
------------- --------------
Total issued 29,284,316 830,589,105
Shares redeemed (15,200,649) (431,634,274)
------------- --------------
Net increase 14,083,667 $ 398,954,831
============= ==============
Class B Shares for the Six Dollar
Months Ended April 30, 1998 Shares Amount
Shares sold 25,921,231 $ 690,415,639
Shares issued to shareholders
in reinvestment of dividends
and distributions 10,385,227 289,020,870
------------- --------------
Total issued 36,306,458 979,436,509
Automatic conversion of
shares (3,145,323) (83,518,089)
Shares redeemed (23,235,403) (613,337,114)
------------- --------------
Net increase 9,925,732 $ 282,581,306
============= ==============
Class B Shares for the Year Dollar
Ended October 31, 1997 Shares Amount
Shares sold 58,873,336 $1,555,413,648
Shares issued to shareholders
in reinvestment of dividends
and distributions 9,170,267 221,585,076
------------- --------------
Total issued 68,043,603 1,776,998,724
Automatic conversion of
shares (3,569,962) (96,367,617)
Shares redeemed (27,974,354) (736,256,154)
------------- --------------
Net increase 36,499,287 $ 944,374,953
============= ==============
Class C Shares for the Six Dollar
Months Ended April 30, 1998 Shares Amount
Shares sold 4,558,918 $ 121,290,871
Shares issued to shareholders
in reinvestment of dividends
and distributions 986,876 27,267,402
------------- --------------
Total issued 5,545,794 148,558,273
Shares redeemed (3,145,188) (83,341,015)
------------- --------------
Net increase 2,400,606 $ 65,217,258
============= ==============
Class C Shares for the Year Dollar
Ended October 31, 1997 Shares Amount
Shares sold 8,962,055 $ 238,396,273
Shares issued to shareholders
in reinvestment of dividends
and distributions 636,886 15,333,078
------------- --------------
Total issued 9,598,941 253,729,351
Shares redeemed (3,076,879) (81,814,832)
------------- --------------
Net increase 6,522,062 $ 171,914,519
============= ==============
Class D Shares for the Six Dollar
Months Ended April 30, 1998 Shares Amount
Shares sold 10,808,837 $ 313,305,108
Shares issued to shareholders
in reinvestment of dividends
and distributions 3,301,397 99,272,992
Automatic conversion of
shares 2,909,078 83,518,089
------------- --------------
Total issued 17,019,312 496,096,189
Shares redeemed (10,460,229) (299,822,180)
------------- --------------
Net increase 6,559,083 $ 196,274,009
============= ==============
Class D Shares for the Year Dollar
Ended October 31, 1997 Shares Amount
Shares sold 17,348,143 $ 497,504,347
Shares issued to shareholders
in reinvestment of dividends
and distributions 2,769,334 72,205,886
Automatic conversion of
shares 3,317,532 96,367,617
------------- --------------
Total issued 23,435,009 666,077,850
Shares redeemed (8,490,489) (247,378,196)
------------- --------------
Net increase 14,944,520 $ 418,699,654
============= ==============
Merrill Lynch Growth Fund
April 30, 1998
<TABLE>
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:
<CAPTION>
Increase Increase
(Decrease) in (Decrease) in Dividend
Industry Affiliate Shares--Net Cost--Net Income
<S> <S> <C> <C> <C>
Energy Acquisition & Exploitation Apache Corp. 1,000,000 $34,552,883 $1,225,000
Domestic Exploration & Production Burlington Resources, Inc. 2,000,000 88,317,683 2,184,036
Life Sciences CytoTherapeutics, Inc. (95,158) (535,263) ++
Energy Acquisition & Exploitation Devon Energy Corp. 225,800 8,381,285 220,000
Offshore Drilling Companies Ensco International, Inc. -- -- 920,000
Real Estate Investment Equity Residental Properties
Trust -- (1,379,100) 7,370,000
Trusts--Residental
Real Estate Investment Federal Realty Investment Trust -- (469,304) 3,218,120
Trusts--Retail
Diversified Resource Companies Freeport-McMoRan Copper &
Gold, Inc. (Class A) -- -- 313,500
Diversified Resource Companies Freeport-McMoRan Copper &
Gold, Inc. (Class B) -- -- 250,000
Offshore Drilling Companies Global Marine, Inc. -- -- ++
Diversified Resource Companies IMC Global, Inc. 4,375,000 137,042,614 1,630,000
Oilfield Services Nabors Industries, Inc. 1,000,000 24,269,659 ++
Energy Acquisition & Exploitation Newfield Exploration Co. -- -- ++
Life Sciences Pharmacopeia, Inc. 285,000 4,959,452 ++
Real Estate Investment Trusts--Retail Simon DeBartolo Group, Inc. 45,000 (2,964,148) 7,508,441
Natural Gas Gathering & Transmission TransMontaigne Oil Co. -- -- ++
Industrial Automation Unova, Inc. 5,182,400 73,684,417 ++
Oilfield Services Weatherford Enterra, Inc. -- -- ++
Real Estate Investment Trusts--Retail Weingarten Realty Investors 115,700 4,761,326 2,354,615
Natural Gas Gathering & Transmission Western Gas Resources, Inc. -- -- 175,000
<FN>
++Non-income producing security.
</TABLE>
