MERRILL LYNCH
GROWTH FUND
FUND LOGO
Semi-Annual Report
April 30, 1999
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
For the quarter ended April 30, 1999, Merrill Lynch Growth Fund's
Class A, Class B, Class C and Class D Shares had total returns of
- -3.86%, -4.08%, -4.11% and -3.92%, respectively. (Fund results do
not reflect sales charges, and would be lower if sales charges were
included. Complete performance information can be found on pages 3
and 4 of this report to shareholders.)
Investment Strategy
As outlined in the revised prospectus dated May 17, 1999, Merrill
Lynch Growth Fund's revised investment strategy places greater
emphasis on growth in earnings, revenues, cash flow or
EBITDA (earnings before interest, taxes, depreciation and
amortization)--and de-emphasizes undervalued securities--in pursuit
of its investment objective. We believe that the portfolio
management team is successfully positioning the Fund according to
this investment approach.
Although real estate investment trusts and energy were two
significant areas of investment for the Fund in the recent past, we
recently reduced or eliminated these positions because, in our
judgment, they have limited growth potential. This strategy had
negative short-term investment results for the Fund relative to its
prior holdings. However, the Fund performed in line with growth
stocks in general during the April quarter. Furthermore, we believe
that over the longer term our portfolio restructuring will benefit
performance.
Two new holdings illustrate what we are looking for in portfolio
candidates: Tyco International Ltd. and MCI WorldCom Inc. Tyco is a
diversified manufacturing company that has grown rapidly, largely
through acquisitions. The company's management team appears to
consist of highly efficient business operators, especially in terms
of cutting overhead and controlling costs, and also appears to have
the ability to make good strategic acquisitions. The management team
has also successfully motivated those employees who it wanted to
retain from acquired firms to achieve exceptional results. The
company operates four main businesses: healthcare and specialty
product, fire and security devices, flow control products, and
electrical and electronic components. We expect that some of the
company's recent acquisitions set the stage for very strong earnings
results over the next few years.
MCI WorldCom is well positioned to become one of a handful of
dominant global providers in the rapidly consolidating worldwide
telecommunications industry. The company has a superior collection
of assets supplying end-to-end connectivity in both domestic and
foreign markets. In addition, it is highly exposed to the fastest-
growing segments of the communications sector: data, Internet and
international traffic. We believe that WorldCom is just beginning to
reap the benefits of its merger with MCI, which will be evident in
faster revenue growth, EBITDA margin expansion, and strong earnings
growth. Finally, an outstanding management team leads the firm with
an excellent track record with respect to strategy, execution, and
creation of shareholder value.
Our major disappointment during the April quarter was our investment
in McKesson HBOC, Inc. The company is a newly combined entity of
McKesson, which had been a highly successful drug distribution
business, and HBOC, the leader in information systems for the
healthcare sector. Both companies were generally very well regarded
before their January 1999 merger. We thought that with McKesson we
were getting a company that would increase its economic value at an
above-average rate that was valued as though it was a below-average
company. Unfortunately, on April 28, 1999, the company announced
that an audit had uncovered that HBOC's revenues had been
overstated. This announcement was particularly surprising, since the
company's chief executive officer had recently assured investors
that all businesses were on track and that he was confident that the
company would earn $3.00 per share in fiscal year 2000. This
positive statement is completely inconsistent with the subsequent
revelation of overstated earnings. With the decline in McKesson
HBOC's stock price, by April month-end it was no longer one of our
largest holdings.
Merrill Lynch Growth Fund
April 30, 1999
In Conclusion
In the months ahead, we expect to continue implementing our new
investment strategy. Our aim is to have approximately 60%--65% of
the Fund's assets invested in our top 20 holdings, with perhaps
another 20 stocks comprising the rest of the Fund. If we are able to
invest in good companies with good business prospects, we hope to be
long-term holders of their shares and participate in their expected
growth.
We thank you for your investment in Merrill Lynch Growth Fund, and
look forward to reviewing our outlook and strategy of the
portfolio's team with you in our next report to shareholders.
Sincerely,
(Terry K. Glenn)
Terry K. Glenn
President and Trustee
(Stephen I. Silverman)
Stephen I. Silverman
Senior Vice President and Portfolio Manager
June 8, 1999
After more than 20 years of service, Arthur Zeikel recently retired
as Chairman of Merrill Lynch Asset Management, L.P. (MLAM). Mr.
Zeikel served as President of MLAM from 1977 to 1997 and as Chairman
since December 1997. Mr. Zeikel is one of the country's most
respected leaders in asset management and presided over the growth
of Merrill Lynch's asset management business. During his tenure,
client assets under management grew from $300 million to over $500
billion. Mr. Zeikel will remain on Merrill Lynch Growth Fund's Board
of Trustees.We are pleased to announce that Terry K. Glenn has been
elected President and Trustee of the Fund. Mr. Glenn has held the
position of Executive Vice President of MLAM since 1983.
Mr. Zeikel's colleagues at MLAM join the Fund's Board of Trustees in
wishing him well in his retirement from Merrill Lynch and are
pleased that he will continue as a member of the Fund's Board of
Trustees.
Merrill Lynch Growth Fund
April 30, 1999
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 "Recent Performance
Results" and "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 3/31/99 -30.23% -33.89%
Five Years Ended 3/31/99 + 8.42 + 7.26
Ten Years Ended 3/31/99 +12.75 +12.14
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 3/31/99 -30.95% -33.68%
Five Years Ended 3/31/99 + 7.32 + 7.32
Ten Years Ended 3/31/99 +11.60 +11.60
[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 3/31/99 -30.97% -31.65%
Inception (10/21/94)
through 3/31/99 + 7.51 + 7.51
[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 3/31/99 -30.40% -34.06%
Inception (10/21/94)
through 3/31/99 + 8.35 + 7.04
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
Merrill Lynch Growth Fund
April 30, 1999
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* -32.31% -3.86% +206.23%
ML Growth Fund Class B Shares* -32.98 -4.08 +176.39
ML Growth Fund Class C Shares* -33.02 -4.11 + 33.76
ML Growth Fund Class D Shares* -32.45 -3.92 + 38.63
Standard & Poor's 500 Index** +21.82 +4.67 +461.10/+214.47
<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
ten-year/since inception periods are Class A & Class B Shares, for
the ten years ended 4/30/99 and Class C & Class D Shares, from
10/21/94 to 4/30/99.
**An unmanaged broad-based index comprised of common stocks. Ten
years/since inception total returns are for the ten years ended
4/30/99 and from 10/21/94 to 4/30/99, respectively.
</TABLE>
OFFICERS AND TRUSTEES
Terry K. Glenn, President and Trustee
James H. Bodurtha, Trustee
Herbert I. London, Trustee
Robert R. Martin, Trustee
Joseph L. May, Trustee
Andre F. Perold, Trustee
Arthur Zeikel, Trustee
Stephen I. Silverman, Senior Vice President
and Portfolio Manager
Donald C. Burke, Vice President and Treasurer
Ira P. Shapiro, Secretary
Custodian
State Street Bank and Trust Company
One Heritage Drive, P2N
North Quincy, MA 02171
Transfer Agent
Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 637-3863
Merrill Lynch Growth Fund
April 30, 1999
<TABLE>
SCHEDULE OF INVESTMENTS
<CAPTION>
Shares Value Percent of
Industries Held Long-Term Investments Cost (Note 1a) Net Assets
<S> <C> <S> <C> <C> <C>
Automotive Products 206,000 ++General Motors Corp. (Class H) $ 7,582,860 $ 11,407,250 0.4%
Banking & Financial 2,267,670 Lloyds TSB Group PLC 30,062,489 36,527,742 1.2
Services 3,885,000 Safra Republic Holdings 67,168,875 169,429,901 5.7
-------------- -------------- ------
97,231,364 205,957,643 6.9
Capital Equipment 346,800 Hewlett-Packard Co. 26,761,189 27,353,850 0.9
Capital Goods-- 271,900 ++National Instruments Corp. 5,667,721 9,244,600 0.3
Industrial
Capital Goods-- 1,455,000 ++Maxim Integrated Products, Inc. 43,773,356 81,480,000 2.7
Technology
Chemicals 1,762,700 Monsanto Co. 79,435,292 79,762,175 2.7
Commercial Services 2,176,700 ++Convergys Corp. 39,918,070 40,541,038 1.3
Communications 478,827 ++Cisco Systems, Inc. 52,758,445 54,616,205 1.8
338,292 Nokia Oyj 'A' 23,691,349 26,119,620 0.9
581,400 SBC Communications, Inc. 31,034,048 32,558,400 1.1
-------------- -------------- ------
107,483,842 113,294,225 3.8
Computers 634,800 Compaq Computer Corp. 30,108,496 14,163,975 0.5
754,878 ++Dell Computer Corp. 37,553,307 31,044,358 1.0
510,700 ++EMC Corp. 54,583,091 55,634,381 1.8
353,100 International Business Machines Corp. 63,260,403 73,864,106 2.5
-------------- -------------- ------
185,505,297 174,706,820 5.8
Cosmetics 347,700 The Gillette Co. 19,926,022 18,145,594 0.6
Drugs 679,082 AstraZeneca Group PLC 30,835,772 26,600,525 0.9
Electrical Equipment 1,185,700 General Electric Co. 121,633,319 125,091,350 4.2
Electronics 1,231,080 Intel Corp. 84,249,892 75,249,765 2.5
513,800 Texas Instruments Inc. 48,027,280 52,471,825 1.8
-------------- -------------- ------
132,277,172 127,721,590 4.3
Entertainment 772,800 The Walt Disney Co. 25,829,673 24,536,400 0.8
Finance 445,600 Federal Home Loan Mortgage Association 26,762,888 27,961,400 0.9
Gas Pipeline & 3,855,434 ++TransMontaigne Inc. (c) 27,060,669 54,939,934 1.8
Transmission
Household Products 459,200 The Procter & Gamble Co. 40,788,600 43,078,700 1.4
Insurance 151,112 AXA 21,544,994 19,544,294 0.6
369,600 American International Group, Inc. 36,985,640 43,404,900 1.5
-------------- -------------- ------
58,530,634 62,949,194 2.1
</TABLE>
Merrill Lynch Growth Fund
April 30, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (continued)
<CAPTION>
Shares Value Percent of
Industries Held Long-Term Investments Cost (Note 1a) Net Assets
<S> <C> <S> <C> <C> <C>
Life Sciences 1,230,600 ++Affymetrix, Inc. (c) $ 22,542,668 $ 50,300,775 1.7%
3,875,000 ++Chiron Corp. 65,166,113 77,500,000 2.6
434,500 CytoTherapeutics, Inc. (Warrants)(a) 651,750 0 0.0
1,500,000 ++Human Genome Sciences, Inc. (c) 54,858,031 55,500,000 1.8
1,000,000 ++Millennium Pharmaceuticals, Inc. 17,754,752 37,187,500 1.2
-------------- -------------- ------
160,973,314 220,488,275 7.3
Machinery & 204,475 Mannesmann AG 28,957,874 26,965,476 0.9
Equipment
Manufacturing 1,800,000 Tyco International Ltd. 139,213,570 146,250,000 4.9
Medical Equipment 1,990,000 ++Guidant Corp. 103,954,720 106,838,125 3.6
Medical Supplies 589,800 Medtronic, Inc. 44,434,566 42,428,737 1.4
Medical Technology 485,800 Johnson & Johnson 40,792,498 47,365,500 1.6
Natural Gas 784,000 Enron Corp. 51,658,188 58,996,000 2.0
Pharmaceuticals 682,400 Bristol-Myers Squibb Co. 43,537,893 43,375,050 1.5
390,300 Eli Lilly and Co. 35,666,685 28,735,838 1.0
863,900 McKesson HBOC, Inc. 51,304,235 30,236,500 1.0
830,000 Merck & Co., Inc. 60,694,294 58,307,500 1.9
775,200 Pfizer, Inc. 104,845,093 89,196,450 3.0
512,200 Schering-Plough Corp. 27,730,243 24,745,662 0.8
2,364,952 SmithKline Beecham PLC 32,548,083 31,298,248 1.0
1,281,800 Warner-Lambert Co. 92,338,708 87,082,287 2.9
-------------- -------------- ------
448,665,234 392,977,535 13.1
Retail 542,900 The Home Depot, Inc. 32,168,622 32,540,069 1.1
1,613,400 Wal-Mart Stores, Inc. 68,353,938 74,216,400 2.4
-------------- -------------- ------
100,522,560 106,756,469 3.5
Semiconductors 225,500 Motorola, Inc. 16,000,514 18,068,187 0.6
Software--Computer 1,854,052 ++Microsoft Corp. 159,001,600 150,641,725 5.0
Telecommunications 155,000 ++Global TeleSystems Group, Inc. 8,912,500 10,230,000 0.3
1,170,400 Lucent Technologies Inc. 64,939,216 70,370,300 2.4
1,257,436 ++MCI WorldCom Inc. 100,265,310 103,345,521 3.5
256,700 Sprint Corp. 21,057,956 26,327,794 0.9
837,976 Ericsson LM 'B' Shares 23,205,419 22,055,931 0.7
700,000 Telefonica SA 32,110,916 32,858,028 1.1
700,000 Telefonica SA (Rights)(b) 0 651,978 0.0
1,970,000 Vodafone Group PLC (c) 36,581,161 36,315,965 1.2
-------------- -------------- ------
287,072,478 302,155,517 10.1
Utilities-- 745,800 Ameritech Corp. 46,872,522 51,040,688 1.7
Communication
Total Long-Term Investments 2,705,123,378 2,925,744,522 97.5
</TABLE>
Merrill Lynch Growth Fund
April 30, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (concluded)
<CAPTION>
Face Value Percent of
Amount Short/Term Investments Cost (Note 1a) Net Assets
<S> <C> <S> <C> <C> <C>
Commercial $ 546,000 General Motors Acceptance
Paper* Corp., 4.94% due 5/03/1999 $ 545,850 $ 545,850 0.0%
Total Short-Term Investments 545,850 545,850 0.0
Total Investments $2,705,669,228 2,926,290,372 97.5
==============
Other Assets Less Liabilities 75,455,930 2.5
-------------- ------
Net Assets $3,001,746,302 100.0%
============== ======
<FN>
*Commercial Paper is traded on a discount basis; the interest rate
shown reflects the discount rate paid at the time of purchase by the
Fund.
++Non-income producing security.
(a)Warrants entitle the Fund to purchase a predetermined number of
shares of common stock and are non-income producing. The purchase
price and number of shares are subject to adjustment under certain
conditions until the expiration date.
(b)The rights may be exercised until 5/20/1999.
(c)Investment in an affiliated company (Note 5).
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Growth Fund
April 30, 1999
FINANCIAL INFORMATION
<TABLE>
Statement of Assets and Liabilities as of April 30, 1999
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$2,705,669,228)
(Note 1a) $2,926,290,372
Receivables:
Securities sold $ 99,562,181
Beneficial interest sold 3,574,413
Dividends 2,703,591 105,840,185
--------------
Prepaid registration fees and other assets (Note 1f) 123,866
--------------
Total assets 3,032,254,423
--------------
Liabilities: Payables:
Beneficial interest redeemed 24,422,472
Investment adviser (Note 2) 1,642,236
Distributor (Note 2) 1,511,097 27,575,805
--------------
Accrued expenses and other liabilities 2,932,316
--------------
Total liabilities 30,508,121
--------------
Net Assets: Net assets $3,001,746,302
==============
Net Assets Class A Shares of beneficial interest, $0.10 par value,
Consist of: unlimited number of shares authorized $ 3,969,414
Class B Shares of beneficial interest, $0.10 par value,
unlimited number of shares authorized 7,846,631
Class C Shares of beneficial interest, $0.10 par value,
unlimited number of shares authorized 655,375
Class D Shares of beneficial interest, $0.10 par value,
unlimited number of shares authorized 3,676,998
Paid-in capital in excess of par 3,297,783,809
Accumulated investment loss--net (20,954,834)
Accumulated realized capital losses on investments and foreign currency
transactions--net (447,989,689)
Accumulated distributions in excess of realized capital gains on
investments and foreign currency transactions--net (Note 1g) (63,976,324)
Unrealized appreciation on investments and foreign currency
transactions--net 220,734,922
--------------
Net assets $3,001,746,302
==============
Net Asset Value: Class A--Based on net assets of $771,334,190 and 39,694,135 shares
of beneficial interest outstanding $ 19.43
==============
Class B--Based on net assets of $1,402,044,897 and 78,466,314 shares
of beneficial interest outstanding $ 17.87
==============
Class C--Based on net assets of $116,276,402 and 6,553,746 shares
of beneficial interest outstanding $ 17.74
==============
Class D--Based on net assets of $712,090,813 and 36,769,984 shares
of beneficial interest outstanding $ 19.37
==============
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Growth Fund
April 30, 1999
FINANCIAL INFORMATION (continued)
<TABLE>
Statement of Operations for the Six Months Ended April 30, 1999
<S> <S> <C> <C>
Investment Interest and discount earned $ 14,110,069
Income Dividends (net of $224,853 foreign withholding tax) 7,658,056
(Notes 1d & 1e): --------------
Total income 21,768,125
--------------
Expenses: Investment advisory fees (Note 2) $ 12,667,462
Account maintenance and distribution fees--Class B (Note 2) 9,647,222
Transfer agent fees--Class B (Note 2) 3,304,755
Transfer agent fees--Class A (Note 2) 1,471,946
Transfer agent fees--Class D (Note 2) 1,370,161
Account maintenance fees--Class D (Note 2) 1,085,371
Account maintenance and distribution fees--Class C (Note 2) 851,184
Transfer agent fees--Class C (Note 2) 311,450
Printing and shareholder reports 244,387
Accounting services (Note 2) 153,403
Custodian fees 126,737
Registration fees (Note 1f) 103,877
Professional fees 38,746
Trustees' fees and expenses 24,946
Pricing fees 4,616
Other 54,172
--------------
Total expenses before reimbursement 31,460,435
Reimbursement of expenses (Note 2) (662,776)
--------------
Total expenses after reimbursement 30,797,659
--------------
Investment loss--net (9,029,534)
--------------
Realized & Realized gain (loss) from:
Unrealized Gain Investments--net (448,525,966)
(Loss) on Foreign currency transactions--net 536,277 (447,989,689)
Investments & --------------
Foreign Currency Change in unrealized appreciation on:
Transactions--Net Investments--net (157,659,277)
(Notes 1b, 1c, Foreign currency transactions--net 113,769 (157,545,508)
1e & 3): -------------- --------------
Net realized and unrealized loss on investments and foreign
currency transactions (605,535,197)
--------------
Net Decrease in Net Assets Resulting from Operations $ (614,564,731)
==============
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Growth Fund
April 30, 1999
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: 1999 1998
<S> <S> <C> <C>
Operations: Investment income (loss)--net $ (9,029,534) $ 75,548,146
Realized loss on investments and foreign currency
transactions--net (447,989,689) (63,976,192)
Change in unrealized appreciation on investments and
foreign currency transactions--net (157,545,508) (2,191,116,024)
-------------- --------------
Net decrease in net assets resulting from operations (614,564,731) (2,179,544,070)
-------------- --------------
Dividends & Investment income--net:
Distributions to Class A (9,908,351) (26,531,245)
Shareholders Class B (10,381,062) (29,259,026)
(Note 1g): Class C (879,414) (2,908,954)
Class D (8,144,104) (21,460,174)
Realized gain on investments--net:
Class A -- (92,635,994)
Class B -- (264,389,838)
Class C -- (24,792,797)
Class D -- (88,098,272)
In excess of realized capital gain on investments--net:
Class A -- (12,611,827)
Class B -- (35,995,066)
Class C -- (3,375,388)
Class D -- (11,994,043)
-------------- --------------
Net decrease in net assets resulting from dividends
and distributions to shareholders (29,312,931) (614,052,624)
-------------- --------------
Beneficial Interest Net decrease in net assets derived from beneficial interest
Transactions transactions (1,332,593,260) (755,047,073)
(Note 4): -------------- --------------
Net Assets: Total decrease in net assets (1,976,470,922) (3,548,643,767)
Beginning of period 4,978,217,224 8,526,860,991
-------------- --------------
End of period* $3,001,746,302 $4,978,217,224
============== ==============
<FN>
*Undistributed (accumulated) investment income (loss)--net $ (20,954,834) $ 17,387,631
============== ==============
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Growth Fund
April 30, 1999
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: 1999 1998 1997 1996 1995
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value,
Operating beginning of period $ 22.71 $ 33.13 $ 26.87 $ 23.13 $ 19.19
Performance: ---------- ---------- ---------- ---------- ----------
Investment income--net .01 .46 .53 .31 .23
Realized and unrealized gain (loss)
on investments and foreign currency
transactions--net (3.08) (8.47) 7.98 5.63 4.01
---------- ---------- ---------- ---------- ----------
Total from investment operations (3.07) (8.01) 8.51 5.94 4.24
---------- ---------- ---------- ---------- ----------
Less dividends and distributions:
Investment income--net (.21) (.48) (.44) (.35) --
Realized gain on investments--net -- (1.70) (1.81) (1.85) (.30)
In excess of realized gain on
investments--net -- (.23) -- -- --
---------- ---------- ---------- ---------- ----------
Total dividends and distributions (.21) (2.41) (2.25) (2.20) (.30)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 19.43 $ 22.71 $ 33.13 $ 26.87 $ 23.13
========== ========== ========== ========== ==========
Total Investment Based on net asset value per share (13.58%)+++ (25.83%) 34.03% 28.15% 22.60%
Return:** ========== ========== ========== ========== ==========
Ratios to Expenses, net of reimbursement .97%* .81% .77% .80% .82%
Average ========== ========== ========== ========== ==========
Net Assets: Expenses 1.01%* .85% .81% .84% .84%
========== ========== ========== ========== ==========
Investment income--net .08%* 1.72% 1.84% 1.28% 1.10%
========== ========== ========== ========== ==========
Supplemental Net assets, end of period
Data: (in thousands) $ 771,334 $1,111,166 $1,769,296 $1,056,870 $ 670,164
========== ========== ========== ========== ==========
Portfolio turnover 82.90% 24.41% 24.75% 30.01% 37.42%
========== ========== ========== ========== ==========
<FN>
++Based on average shares outstanding.
+++Aggregate total investment return.
*Annualized.
**Total investment returns exclude the effects of sales loads.
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Growth Fund
April 30, 1999
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: 1999 1998 1997 1996 1995
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value,
Operating beginning of period $ 20.88 $ 30.63 $ 25.03 $ 21.60 $ 18.12
Performance: ---------- ---------- ---------- ---------- ----------
Investment income (loss)--net (.08) .17 .22 .06 .01
Realized and unrealized gain (loss)
on investments and foreign currency
transactions--net (2.84) (7.80) 7.39 5.26 3.77
---------- ---------- ---------- ---------- ----------
Total from investment operations (2.92) (7.63) 7.61 5.32 3.78
---------- ---------- ---------- ---------- ----------
Less dividends and distributions:
Investment income--net (.09) (.19) (.20) (.04) --
Realized gain on investments--net -- (1.70) (1.81) (1.85) (.30)
In excess of realized gain on
investments--net -- (.23) -- -- --
---------- ---------- ---------- ---------- ----------
Total dividends and distributions (.09) (2.12) (2.01) (1.89) (.30)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 17.87 $ 20.88 $ 30.63 $ 25.03 $ 21.60
========== ========== ========== ========== ==========
Total Investment Based on net asset value per share (14.01%)+++ (26.57%) 32.62% 26.84% 21.37%
Return:** ========== ========== ========== ========== ==========
Ratios to Expenses, net of reimbursement 2.00%* 1.83% 1.79% 1.82% 1.84%
Average ========== ========== ========== ========== ==========
Net Assets: Expenses 2.03%* 1.87% 1.83% 1.85% 1.87%
========== ========== ========== ========== ==========
Investment income (loss)--net (.84%)* .70% .82% .26% .04%
========== ========== ========== ========== ==========
Supplemental Net assets, end of period
Data: (in thousands) $1,402,045 $2,544,979 $4,687,523 $2,916,507 $1,920,451
========== ========== ========== ========== ==========
Portfolio turnover 82.90% 24.41% 24.75% 30.01% 37.42%
========== ========== ========== ========== ==========
<FN>
++Based on average shares outstanding.
+++Aggregate total investment return.
*Annualized.
**Total investment returns exclude the effects of sales loads.
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Growth Fund
April 30, 1999
FINANCIAL INFORMATION (continued)
<TABLE>
Financial Highlights (continued)
<CAPTION>
Class C++
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: 1999 1998 1997 1996 1995
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value,
Operating beginning of period $ 20.72 $ 30.43 $ 24.89 $ 21.59 $ 18.12
Performance: ---------- ---------- ---------- ---------- ----------
Investment income(loss)--net (.08) .17 .22 .06 .03
Realized and unrealized gain (loss)
on investments and foreign currency
transactions--net (2.82) (7.75) 7.34 5.23 3.74
---------- ---------- ---------- ---------- ----------
Total from investment operations (2.90) (7.58) 7.56 5.29 3.77
---------- ---------- ---------- ---------- ----------
Less dividends and distributions:
Investment income--net (.08) (.20) (.21) (.14) --
Realized gain on investments--net -- (1.70) (1.81) (1.85) (.30)
In excess of realized gain on
investments--net -- (.23) -- -- --
---------- ---------- ---------- ---------- ----------
Total dividends and distributions (.08) (2.13) (2.02) (1.99) (.30)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 17.74 $ 20.72 $ 30.43 $ 24.89 $ 21.59
========== ========== ========== ========== ==========
Total Investment Based on net asset value per share (14.01%)+++ (26.60%) 32.63% 26.84% 21.32%
Return:** ========== ========== ========== ========== ==========
Ratios to Average Expenses, net of reimbursement 2.02%* 1.84% 1.80% 1.84% 1.86%
Net Assets: ========== ========== ========== ========== ==========
Expenses 2.05%* 1.88% 1.84% 1.87% 1.89%
========== ========== ========== ========== ==========
Investment income (loss)--net (.80%)* .68% .81% .25% .14%
========== ========== ========== ========== ==========
Supplemental Net assets, end of period
Data: (in thousands) $ 116,276 $ 239,445 $ 427,377 $ 187,221 $ 85,486
========== ========== ========== ========== ==========
Portfolio turnover 82.90% 24.41% 24.75% 30.01% 37.42%
========== ========== ========== ========== ==========
<FN>
++Based on average shares outstanding.
+++Aggregate total investment return.
*Annualized.
**Total investment returns exclude the effects of sales loads.
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Growth Fund
April 30, 1999
FINANCIAL INFORMATION (concluded)
<TABLE>
Financial Highlights (concluded)
<CAPTION>
Class D++
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: 1999 1998 1997 1996 1995
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value,
Operating beginning of period $ 22.63 $ 33.01 $ 26.79 $ 23.06 $ 19.18
Performance: ---------- ---------- ---------- ---------- ----------
Investment income(loss)--net (.01) .39 .46 .24 .22
Realized and unrealized gain (loss)
on investments and foreign currency
transactions--net (3.07) (8.43) 7.95 5.63 3.96
---------- ---------- ---------- ---------- ----------
Total from investment operations (3.08) (8.04) 8.41 5.87 4.18
---------- ---------- ---------- ---------- ----------
Less dividends and distributions:
Investment income--net (.18) (.41) (.38) (.29) --
Realized gain on investments--net -- (1.70) (1.81) (1.85) (.30)
In excess of realized gain on
investments--net -- (.23) -- -- --
---------- ---------- ---------- ---------- ----------
Total dividends and distributions (.18) (2.34) (2.19) (2.14) (.30)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 19.37 $ 22.63 $ 33.01 $ 26.79 $ 23.06
========== ========== ========== ========== ==========
Total Investment Based on net asset value per share (13.67%)+++ (26.00%) 33.67% 27.83% 22.29%
Return:** ========== ========== ========== ========== ==========
Ratios to Average Expenses, net of reimbursement 1.22%* 1.06% 1.02% 1.05% 1.08%
Net Assets: ========== ========== ========== ========== ==========
Expenses 1.25%* 1.10% 1.06% 1.08% 1.10%
========== ========== ========== ========== ==========
Investment income (loss)--net (.14%)* 1.47% 1.59% 1.03% 1.00%
========== ========== ========== ========== ==========
Supplemental Net assets, end of period
Data: (in thousands) $ 712,091 $1,082,627 $1,642,665 $ 932,811 $ 614,357
========== ========== ========== ========== ==========
Portfolio turnover 82.90% 24.41% 24.75% 30.01% 37.42%
========== ========== ========== ========== ==========
<FN>
++Based on average shares outstanding.
+++Aggregate total investment return.
*Annualized.
**Total investment returns exclude the effects of sales loads.
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Growth Fund
April 30, 1999
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. The Fund's financial statements are
prepared in accordance with generally accepted accounting principles
which may require the use of management accruals and estimates.
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 or
purchased are valued at the last sale price in the case of exchange-
traded options. In the case of options traded in the over-the-
counter market, valuation is the last asked price (options written)
or the last bid price (options purchased). 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.
* 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, 1999
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. Distributions in
excess of realized capital gains are due primarily to differing tax
treatments for post-October losses.
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 ("MLFD" or the "Distributor"), a division of Princeton
Funds Distributor, Inc. ("PFD"), which is 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;
0.60% of the average net assets over $1.5 billion but not exceeding
$10 billion; and 0.575% of average net assets in excess of $10
billion. For the six months ended April 30, 1999, MLAM earned fees
of $12,667,462, of which $662,776 was voluntarily waived.
Merrill Lynch Growth Fund
April 30, 1999
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 Incorporated ("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 the six months ended April 30, 1999, 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 $1,502 $ 19,383
Class D $7,383 $109,619
For the the six months ended April 30, 1999, MLPF&S received
contingent deferred sales charges of $3,657,391 and $90,635 relating
to transactions in Class B and Class C Shares, respectively.
In addition, MLPF&S received $1,178,615 in commissions on the
execution of portfolio security transactions for the Fund for the
the six months ended April 30, 1999.
Financial Data Services, Inc. ("FDS"), a wholly-owned subsidiary of
ML & Co., is the Fund's transfer agent.
Accounting services are provided to the Fund by MLAM at cost.
Certain officers and/or trustees of the Fund are officers and/or
directors of MLAM, PSI, FDS, PFD, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the six months ended April 30, 1999 were $2,761,545,896 and
$3,344,253,726, respectively.
Net realized gains (losses) for the six months ended April 30, 1999
and net unrealized gains as of April 30, 1999 were as follows:
Realized Unrealized
Gains (Losses) Gains
Long-term investments $(448,523,777) $220,621,144
Short-term investments (2,189) --
Foreign currency
transactions 536,277 113,778
------------- ------------
Total $(447,989,689) $220,734,922
============= ============
As of April 30, 1999, net unrealized appreciation for Federal income
tax purposes aggregated $220,621,144, of which $331,496,619 related
to appreciated securities and $110,875,475 related to depreciated
securities. At April 30, 1999, the aggregate cost of investments
for Federal income tax purposes was $2,705,669,228.
4. Shares of Beneficial Interest:
Net decrease in net assets derived from beneficial interest
transactions was $1,332,593,260 and $755,047,073 for the six months
ended April 30, 1999 and the year ended October 31, 1998,
respectively.
Merrill Lynch Growth Fund
April 30, 1999
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, 1999 Shares Amount
Shares sold 7,122,020 $ 146,442,322
Shares issued to shareholders
in reinvestment of dividends 459,562 9,577,280
----------- --------------
Total issued 7,581,582 156,019,602
Shares redeemed (16,822,039) (344,539,248)
----------- --------------
Net decrease (9,240,457) $ (188,519,646)
=========== ==============
Class A Shares for the Year Dollar
Ended October 31, 1998 Shares Amount
Shares sold 22,278,893 $ 605,535,677
Shares issued to shareholders
in reinvestment of dividends
and distributions 3,995,517 118,469,939
----------- --------------
Total issued 26,274,410 724,005,616
Shares redeemed (30,752,326) (794,372,160)
----------- --------------
Net decrease (4,477,916) $ (70,366,544)
=========== ==============
Class B Shares for the Six Dollar
Months Ended April 30, 1999 Shares Amount
Shares sold 10,432,598 $ 198,168,210
Shares issued to shareholders
in reinvestment of dividends 480,513 9,245,064
----------- --------------
Total issued 10,913,111 207,413,274
Automatic conversion of
shares (2,845,165) (54,036,435)
Shares redeemed (51,507,072) (976,042,202)
----------- --------------
Net decrease (43,439,126) $ (822,665,363)
=========== ==============
Class B Shares for the Year Dollar
Ended October 31, 1998 Shares Amount
Shares sold 39,588,205 $ 996,388,789
Shares issued to shareholders
in reinvestment of dividends
and distributions 10,881,118 300,907,393
----------- --------------
Total issued 50,469,323 1,297,296,182
Automatic conversion of
shares (7,275,492) (175,563,924)
Shares redeemed (74,319,312) (1,755,281,872)
----------- --------------
Net decrease (31,125,481) $ (633,549,614)
=========== ==============
Class C Shares for the Six Dollar
Months Ended April 30, 1999 Shares Amount
Shares sold 614,593 $ 11,670,102
Shares issued to shareholders
in reinvestment of dividends 39,676 757,812
---------- --------------
Total issued 654,269 12,427,914
Shares redeemed (5,654,177) (106,816,468)
---------- --------------
Net decrease (4,999,908) $ (94,388,554)
========== ==============
Class C Shares for the Year Dollar
Ended October 31, 1998 Shares Amount
Shares sold 5,773,646 $ 148,910,650
Shares issued to shareholders
in reinvestment of dividends
and distributions 1,035,142 28,415,638
---------- --------------
Total issued 6,808,788 177,326,288
Shares redeemed (9,297,825) (220,244,333)
---------- --------------
Net decrease (2,489,037) $ (42,918,045)
========== ==============
Class D Shares for the Six Dollar
Months Ended April 30, 1999 Shares Amount
Shares sold 3,468,953 $ 71,264,021
Shares issued to shareholders
in reinvestment of dividends 348,930 7,254,254
Automatic conversion of
shares 2,626,711 54,036,435
----------- --------------
Total issued 6,444,594 132,554,710
Shares redeemed (17,522,978) (359,574,407)
----------- --------------
Net decrease (11,078,384) $ (227,019,697)
=========== ==============
Class D Shares for the Year Dollar
Ended October 31, 1998 Shares Amount
Shares sold 15,622,997 $ 429,388,296
Shares issued to shareholders
in reinvestment of dividends
and distributions 3,664,390 108,678,158
Automatic conversion of
shares 6,721,770 175,563,924
---------- --------------
Total issued 26,009,157 713,630,378
Shares redeemed (27,919,811) (721,843,248)
---------- --------------
Net decrease (1,910,654) $ (8,212,870)
========== ==============
Merrill Lynch Growth Fund
April 30, 1999
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>
Increase in Increase in Dividend
Industry Affiliate Shares--Net Cost--Net Income
<S> <S> <C> <C> <C>
Life Sciences Affymetrix, Inc. -- -- ++
Life Sciences Human Genome Sciences, Inc. -- -- ++
Gas Pipeline & Transmission TransMontaigne Inc. -- -- ++
Telecommunications Vodaphone Group PLC 1,970,000 $36,581,161 ++
<FN>
++Non-income producing security.
6. Commitments:
At April 30, 1999, the Fund had entered into foreign exchange
contracts, under which it had agreed to sell foreign currency with
the approximate value of $22,427,000.
7. Capital Loss Carryforward:
At October 31, 1998, the Fund had a net capital loss carryforward of
approximately $63,610,000, all of which expires in 2006. This amount
will be available to offset like amounts of any future taxable
gains.
PORTFOLIO INFORMATION
As of April 30, 1999
Percent of
Ten Largest Equity Holdings Net Assets
Safra Republic Holdings 5.7%
Microsoft Corp. 5.0
Tyco International Ltd. 4.9
General Electric Co. 4.2
Guidant Corp. 3.6
MCI WorldCom Inc. 3.5
Pfizer, Inc. 3.0
Warner-Lambert Co. 2.9
Maxim Integrated Products, Inc. 2.7
Monsanto Co. 2.7
Percent of
Geographic Allocation Net Assets
United States 88.8%
United Kingdom 4.4
Spain 1.1
Germany 0.9
Finland 0.9
Sweden 0.7
France 0.7
</TABLE>