ADMINISTRATOR & DISTRIBUTOR
Merrill Lynch Funds Distributor, Inc.
One Financial Center
Boston, Massachusetts 02111-2646
INVESTMENT ADVISER
Fund Asset Management, L.P.
P.O. Box 9011
Princeton, N.J. 08543-9011
CUSTODIAN & TRANSFER AGENT
State Street Bank & Trust Company
P.O. Box 8500
Boston, Massachusetts 02266-8500
LEGAL COUNSEL
Rogers & Wells
200 Park Avenue
New York, New York 10166
AUDITORS
Deloitte & Touche LLP
125 Summer Street
Boston, Massachusetts 02110-1617
This report is not authorized for use as an offer of sale or a solicitation
of an offer to buy shares of the Trust unless accompanied or preceded by the
Trust's current prospectus. Past performance results shown in this report
should not be considered a representation of future performance, which will
fluctuate. Each Fund seeks to maintain a consistent $1.00 net asset value per
share, although this cannot be assured. An investment in the Funds is neither
insured nor guaranteed by the U.S. Government.
Merrill Lynch Institutional Fund
Merrill Lynch Government Fund
Merrill Lynch Treasury Fund
Merrill Lynch Institutional Tax-Exempt Fund
Merrill Lynch
Funds For Institutions Series
Merrill Lynch Institutional Fund
Merrill Lynch Government Fund
Merrill Lynch Treasury Fund
Merrill Lynch Institutional Tax-Exempt Fund
Annual Report
April 30, 1995
<PAGE>
Dear Shareholder:
We are pleased to provide you with this Annual Report for Merrill Lynch
Funds For Institutions Series.
Increasing signs of slowing economic growth led to higher US stock and
bond prices during the April quarter. Although gross domestic product (GDP)
was reported to have increased at a revised 5.1% rate during the final
quarter of 1994, declines in other indicators such as new home sales and
durable goods orders registered thus far in 1995 have led investors to
anticipate that the economy is losing enough momentum to keep inflation under
control and preclude further significant monetary policy tightening by the
Federal Reserve Board. A further indication of a slowing economy was the
reported decline in the Index of Leading Economic Indicators for March.
As US stock and bond markets have risen, the value of the US dollar has
reached new lows relative to the yen and the deutschemark. Persistent trade
deficits and exports of capital from the United States have kept the US
currency in a decade-long decline relative to the Japanese and German
currencies. Over the longer term, since the United States has the highest
productivity among industrialized nations and among the lowest labor costs,
demand for US dollar-denominated assets may improve. However, a reduction of
the still-widening US trade deficit may be necessary before the US dollar
appreciates substantially relative to the yen and the deutschemark.
The first months of 1995 were very positive for the US stock and bond
markets. Continued signs of a moderating expansion and well-contained
inflationary pressures would provide further assurance that the peak in
interest rates is behind us, creating a stronger foundation for higher stock
and bond prices. On the other hand, indications of reaccelerating growth and
further significant monetary policy tightening by the Federal Reserve Board
would be a decided negative for the US financial markets.
Merrill Lynch Institutional Fund
For the year ended April 30, 1995, Merrill Lynch Institutional Fund's net
yield was 4.99%. The Fund's seven-day net annualized yield as of April 30,
1995 was 6.01%.
During the six-month period ended April 30, 1995, the Fund's average
portfolio maturity ranged from a low of 36 days to a high of 70 days. The
extent to which the average maturity varied was testimony to the contrary
factors affecting the front end of the fixed-income yield curve.
As we entered November, we maintained a very conservative approach to the
Fund's investment strategy. Specifically, it was our contention that the
domestic economy would exhibit sufficient forward momentum which would
necessitate the Federal Reserve Board to maintain its tight monetary policy.
In line with this, we increased the Fund's overnight cash position and sold
6-12 month Federal agency discount notes given the narrowing in yield spreads
to US Treasury bills. Furthermore, variable rate securities exceeded 35% of
total assets. Subsequent to the 75 basis point (0.75%) hike in the Federal
Funds rate, we earmarked some of the Fund's cash position for investment in
90-day money market securities. Our rationale was that the Federal Reserve
Board would be on hold for no less than three months, and thus it was
beneficial to take advantage of the steepness in the front end of the yield
curve. Although year-end funding pressures never fully materialized, we
maintained approximately 20% of the Fund's assets in overnight repurchase
agreements which would be used to meet shareholder liquidity demands.
By mid-January, with the two-year Treasury note yielding 7.5%, we made
the decision to extend the Fund's average portfolio maturity in response to
our belief that the market had fully priced another round of tightening by
the Federal Reserve Board. Although we were anticipating a 50 basis point
move in the Federal Funds rate at the Federal Open Market Committee's
February 1, 1995 meeting, the one-two year sector of the yield curve offered
good value to even an expected 6% Federal Funds rate. Shortly after the
interest rate hike on February 1, 1995,
1
<PAGE>
the market caught a very technically-driven bid as investors who had built up
significant cash balances began to put this money to work. Market psychology
was further enhanced by the preliminary signs that the economy may well be
achieving a soft landing. By period-end, the two-year Treasury note had
rallied nearly 100 basis points.
Looking ahead, we expect to maintain the Fund's average life toward the
higher end of the allowed band as the market continues to be favorably
affected by market technicals. We will closely monitor this and the state of
the economy and will adjust our investment strategy accordingly.
Merrill Lynch Government Fund
For the year ended April 30, 1995, Merrill Lynch Government Fund's net
yield was 4.88%. The Fund's seven-day net annualized yield as of April 30,
1995 was 5.93%.
During the six-month period ended April 30, 1995, the Fund's portfolio
maturity ranged from a low of 34 days to a high of 55 days. Toward the end of
the period, however, the Fund's average life reflected a more constructive
view on the direction of interest rates.
As the period began, our investment strategy was based on the belief that
the Federal Reserve Board would remain committed to its tighter monetary
policy in an effort to stem the tide of rising inflation. Accordingly, our
investment strategy centered on short, defensive maturities. This was borne
out in November 1994 and February 1995 when the Federal Reserve Board moved
interest rates higher by an aggregate 125 basis points. However as the period
progressed, strong market technicals, which have been a dominating force in
holding interest rates down throughout the period, coupled with moderating
economic statistics gave us opportunities to invest further out on the yield
curve. This was the case particularly in the latter part of the period as we
increased the Fund's holdings in three-six month government agency securities
which were attractive relative to US Treasury securities of equivalent
maturities. Occasionally, we purchased fixed-rate six-month government agency
coupons which were attractively priced relative to comparable Treasury bills
and government agency discount notes. At the same time, we increased the
Fund's holdings in floating rate products (for example, Treasury bills and
LIBOR-based securities) that offered a reasonable yield increment to
financing rates. By the end of April, the Fund's average life stood at 50
days, reflective of our reasonably constructive view on the direction of
interest rates.
Recently lackluster economic data has continued to suggest that a soft
landing for the US economy may be approaching. This perception coupled with
strong market technicals may have left the front end of the market with a
strong bid. We expect to maintain a relatively optimistic approach going
forward as we look for signs of moderating economic growth.
Merrill Lynch Treasury Fund
For the year ended April 30, 1995, Merrill Lynch Treasury Fund's net
yield was 4.58%. The Fund's seven-day net annualized yield as of April 30,
1995 was 5.71%.
For the six-month period ended April 30, 1995, the Fund's average
portfolio maturity ranged from a low of 27 days to a high of 53 days. As the
period began, for the most part we held the Fund's average portfolio maturity
in the mid 30-low 40 day range as the financial markets sought direction from
the Federal Reserve Board. After the Federal Reserve Board's tightening of 50
basis points on February 1, 1995, our investment approach grew less defensive
in response to the market's favorable reaction. Strong market technicals and
a growing belief that the central bank had finished its interest rate
increases for the near term gave us reason to increase the Fund's average
life to the high 40-low 50 day area, where it has remained for the balance of
the period. Recently, the Treasury's issuance of several cash management
bills has offered us an opportunity to participate in shorter-dated maturites
while enjoying yields comparable to those available on commercial paper. For
the most part, the Fund's exposure to interest rates has been concentrated in
the 60-90 day area as a hedge against the yield curve steepening. Throughout
the period, we sought to enhance the Fund's yield by utilizing Treasury notes
where the yield spreads
2
<PAGE>
to comparable maturity Treasury bills approached 10 basis points. At times,
our involvement in Treasury notes accounted for more than 25% of the Fund's
assets. By the end of April, the Fund's average life stood at 47 days.
Currently, interest rates have dipped to their lowest levels in the
recent past, driven primarily by strong technicals as demand abroad for
Treasury securities has heightened. While recent economic data has pointed to
a slowdown in the economy, the US dollar still remains weak against other
major currencies, which might preclude the Federal Reserve Board from
lowering interest rates. We expect to maintain a relatively constructive
stance going forward as we look for signs of moderating economic growth.
Merrill Lynch Institutional Tax-Exempt Fund
For the year ended April 30, 1995, the Institutional Tax-Exempt Fund's
net yield was 3.15%. The Fund's seven-day net annualized yield as of April
30, 1995 was 4.33%.
During the six-month period ended April 30, 1995, interest rates on
short-term municipal securities were as volatile as those of their taxable
counterparts. We maintained a defensive approach to the market with the
average life of the Fund in the 30-40 day range during most of the period.
Despite a change in market psychology toward lower interest rates as well as
dwindling municipal issuance, there was still enough uncertainty (including
concerns about the Federal Reserve Board's intentions, low employment
statistics, increases in capital spending, high consumer confidence, high
personal income, the Orange County, California situation and US dollar
volatility) to avoid overextending the Fund. This strategy of holding a large
portion of variable rate demand notes benefited the Fund as interest rates
remained attractive for the majority of the period versus the Fund's taxable
counterparts. We will continue to assess the changes in the marketplace in
the upcoming period, adjusting the Fund's average life accordingly. We
continue to closely monitor credit quality while seeking to offer
shareholders an attractive tax-exempt yield.
We thank you for your continued interest in the Merrill Lynch Funds For
Institutions Series, and we look forward to serving your investment needs in
the months and years ahead.
Sincerely,
/s/ Robert W. Crook
Robert W. Crook
President and Trustee
Merrill Lynch Funds For Institutions Series
/s/ Christopher Ayoub
Christopher Ayoub
Vice President and Portfolio Manager
Merrill Lynch Institutional Fund
/s/ John Ng
John Ng
Vice President and Portfolio Manager
Merrill Lynch Government Fund
Merrill Lynch Treasury Fund
/s/ Kevin Schiatta
Kevin Schiatta
Vice President and Portfolio Manager
Merrill Lynch Institutional Tax-Exempt Fund
3
<PAGE>
Merrill Lynch Institutional Fund
Schedule of Investments
April 30, 1995
<TABLE>
<CAPTION>
Interest Maturity Value
Face Amount Rate* Date (Note 1a)
<S> <C> <C> <C> <C> <C>
U.S. $ 50,000,000 U.S. Treasury Bills 6.38 % 07/13/95 $ 49,425,125
Government & 50,000,000 U.S. Treasury Bills 6.42 07/27/95 49,310,042
Agency 20,000,000 U.S. Treasury Bills 5.26 08/24/95 19,632,639
Issues--15.5% 40,000,000 U.S. Treasury Bills 6.589 02/08/96 38,138,489
25,000,000 U.S. Treasury Bills 6.61 02/08/96 23,836,556
10,000,000 U.S. Treasury Bills 6.605 02/08/96 9,534,622
25,000,000 U.S. Treasury Bills 6.02 04/04/96 23,603,979
75,000,000 U.S. Treasury Bills 5.875 05/02/96 70,492,750
25,000,000 U.S. Treasury Bills 5.91 05/02/96 23,497,583
50,000,000 U.S. Treasury Bills 5.895 05/02/96 46,995,167
44,000,000 U.S. Treasury Notes 3.875 08/31/95 43,690,627
34,000,000 U.S. Treasury Notes 5.875 05/31/96 33,808,750
17,400,000 U.S. Treasury Notes 6.25 08/31/96 17,340,188
20,000,000 U.S. Treasury Notes 6.875 02/28/97 20,093,750
10,025,000 Federal Home Loan Banks 10.30 07/25/95 10,115,225
40,000,000 Federal Home Loan Banks 6.42 04/24/96 39,964,000
15,000,000 Federal Home Loan Banks 7.10 04/03/97 15,000,000
28,000,000 Federal Home Loan Mortgage Corp 4.635 08/09/95 27,885,200
59,000,000 Federal Home Loan Mortgage Corp 6.84 02/28/96 59,159,300
20,000,000 Federal Home Loan Mortgage Corp 6.45 04/08/96 19,988,000
81,450,000 Federal National Mortgage Assoc. 6.86 02/28/96 81,661,770
25,000,000 Federal National Mortgage Assoc. 6.72 02/28/96 25,037,500
10,000,000 Federal National Mortgage Assoc. 7.68 01/27/97 10,151,000
20,000,000 Student Loan Marketing Assoc. 5.48 06/30/95 20,002,360
33,000,000 Federal Home Loan Banks D/N 6.04 10/04/95 32,144,860
6,000,000 Federal Home Loan Banks D/N 6.30 11/08/95 5,809,318
50,000,000 Federal Home Loan Banks D/N 6.02 11/27/95 48,252,917
50,000,000 Federal Home Loan Banks D/N 6.02 01/11/96 47,867,917
51,500,000 Federal Home Loan Banks D/N 6.02 01/12/96 49,295,342
10,500,000 Federal Home Loan Banks D/N 6.15 03/29/96 9,911,422
11,600,000 Federal Home Loan Banks D/N 6.16 03/29/96 10,949,762
25,000,000 Federal Home Loan Banks D/N 5.98 04/19/96 23,529,917
15,000,000 Federal National Mortgage
Assoc. D/N 6.00 09/26/95 14,633,083
Total U.S. Government & Agency
Issues (Cost $1,020,938,413) 1,020,759,160
See Notes to Financial Statements.
4
<PAGE>
U.S. $ 17,000,000 Federal Farm Credit Banks 6.20 % 02/09/96 $ 16,993,142
Government Agency 28,000,000 Federal Home Loan Banks 6.43 06/21/95 28,000,000
Issues--Variable 25,300,000 Federal Home Loan Banks 6.40 09/20/95 25,298,155
Rate--28.4% 58,000,000 Federal Home Loan Banks 6.03 10/03/95 57,983,202
40,000,000 Federal Home Loan Banks 6.43 12/28/95 40,000,000
25,000,000 Federal Home Loan Banks 6.50 05/10/96 24,994,929
48,000,000 Federal Home Loan Banks 6.46 06/17/96 48,000,000
20,000,000 Federal Home Loan Banks 6.46 06/21/96 20,000,000
10,000,000 Federal Home Loan Banks 6.50 12/23/96 10,009,307
10,000,000 Federal Home Loan Banks 6.58 01/31/97 10,009,753
25,270,000 Federal Home Loan Banks 6.58 01/31/97 25,328,250
34,105,000 Federal Home Loan Banks 6.53 02/03/97 34,093,577
35,000,000 Federal Home Loan Banks 6.53 02/10/97 35,000,000
14,000,000 Federal Home Loan Banks 6.35 01/26/98 13,875,709
10,100,000 Federal Home Loan Mortgage Corp. 6.33 05/06/96 10,100,000
11,000,000 Federal Home Loan Mortgage Corp. 6.50 05/13/98 11,000,000
36,000,000 Federal National Mortgage Assoc. 5.82 06/01/95 35,999,696
44,000,000 Federal National Mortgage Assoc. 5.82 06/01/95 43,999,629
75,000,000 Federal National Mortgage Assoc. 6.09 08/23/95 75,000,000
55,000,000 Federal National Mortgage Assoc. 6.09 08/25/95 54,998,252
50,000,000 Federal National Mortgage Assoc. 6.06 09/22/95 49,994,082
20,000,000 Federal National Mortgage Assoc. 6.40 12/20/95 19,987,385
50,000,000 Federal National Mortgage Assoc. 5.99 05/10/96 49,975,860
70,000,000 Federal National Mortgage Assoc. 6.33 05/13/96 70,000,000
60,000,000 Federal National Mortgage Assoc. 6.33 05/24/96 60,000,000
32,000,000 Federal National Mortgage Assoc. 6.005 07/18/96 31,969,847
30,000,000 Federal National Mortgage Assoc. 6.33 08/13/96 30,000,000
15,000,000 Federal National Mortgage Assoc. 6.45 10/04/96 14,988,737
10,000,000 Federal National Mortgage Assoc. 6.60 10/07/96 10,010,028
20,000,000 Federal National Mortgage Assoc. 6.60 10/07/96 20,045,500
110,000,000 Federal National Mortgage Assoc. 6.03 10/11/96 110,000,000
50,000,000 Federal National Mortgage Assoc. 6.60 02/14/97 50,108,109
50,000,000 Federal National Mortgage Assoc. 6.06 02/21/97 50,000,000
47,000,000 Federal National Mortgage Assoc. 6.45 05/19/97 47,000,000
44,000,000 Federal National Mortgage Assoc. 6.50 05/14/98 44,000,000
17,500,000 Student Loan Marketing Assoc. 6.06 06/02/95 17,503,812
20,000,000 Student Loan Marketing Assoc. 6.19 08/07/95 20,002,547
See Notes to Financial Statements.
5
<PAGE>
U.S. $ 71,000,000 Student Loan Marketing Assoc. 6.19 % 03/20/96 $ 71,139,263
Government 69,000,000 Student Loan Marketing Assoc. 6.06 04/16/96 69,063,200
Agency 89,900,000 Student Loan Marketing Assoc. 6.02 05/14/96 89,960,454
Issues--Variable 28,000,000 Student Loan Marketing Assoc. 5.99 07/19/96 28,011,422
Rate 15,000,000 Student Loan Marketing Assoc. 6.36 08/16/96 14,972,354
(continued) 13,000,000 Student Loan Marketing Assoc. 6.29 08/22/96 13,051,487
101,500,000 Student Loan Marketing Assoc. 5.99 09/23/96 101,487,855
14,100,000 Student Loan Marketing Assoc. 6.215 11/27/96 14,100,000
69,750,000 Student Loan Marketing Assoc. 6.05 12/20/96 69,745,945
20,000,000 Student Loan Marketing Assoc. 6.20 01/14/97 20,000,000
25,000,000 Student Loan Marketing Assoc. 6.45 01/21/97 25,031,456
35,000,000 Student Loan Marketing Assoc. 6.16 03/03/97 35,000,000
Total U.S. Government Agency
Issues--Variable Rate
(Cost $1,867,833,019) 1,867,832,944
European 10,000,000 Abbey National Treasury Services
Certificates of PLC, London 7.22 02/05/96 10,052,766
Deposit--3.2% 25,000,000 Abbey National Treasury Services
PLC, London 6.54 04/09/96 25,003,685
25,000,000 Bank of America N.T. & S.A.,
London 6.26 10/19/95 24,999,650
25,000,000 Bank of Scotland, London 6.76 04/04/96 25,050,637
25,000,000 NationsBank N.A. (Carolinas)
London 5.47 05/19/95 25,001,029
100,000,000 Sumitomo Bank Ltd., London 6.11 05/03/95 99,999,945
Total European Certificates of
Deposit
(Cost $210,072,170) 210,107,712
Yankee 14,000,000 Bank of Nova Scotia, NY 6.00 05/25/95 14,000,093
Certificates of 30,000,000 Dai-Ichi Kangyo Bank Ltd., NY 6.06 05/22/95 30,000,174
Deposit--5.7% 12,000,000 Dai-Ichi Kangyo Bank Ltd., NY 6.19 05/31/95 12,000,165
60,000,000 Sanwa Bank Ltd., NY 6.06 05/24/95 60,001,144
25,000,000 Sanwa Bank Ltd., NY 6.05 05/25/95 25,000,332
42,000,000 Societe Generale, NY 6.75 06/02/95 42,001,453
90,000,000 Societe Generale, NY 6.08 06/12/95 90,003,739
80,000,000 Sumitomo Bank Ltd., NY 6.11 05/03/95 80,000,124
20,000,000 Sumitomo Bank Ltd., NY 6.06 05/17/95 20,000,000
Total Yankee Certificates of
Deposit
(Cost $373,007,225) 373,007,224
See Notes to Financial Statements.
6
<PAGE>
Bank Notes-- $ 20,000,000 Fifth Third Bank 6.24 % 10/18/95 $ 19,980,000
1.6% 52,000,000 NationsBank N.A. (Carolinas) 5.40 05/19/95 51,998,666
25,000,000 NationsBank N.A. (Carolinas) 5.625 07/18/95 24,950,000
10,000,000 NationsBank N.A. (Carolinas) 5.65 07/21/95 9,980,000
Total Bank Notes
(Cost $106,987,926) 106,908,666
Bank Notes-- 15,000,000 Bank One, Columbus 5.962 05/02/95 14,999,959
Variable
Rate--0.2%
Total Bank Notes--Variable Rate
(Cost $14,999,959) 14,999,959
Corporate 50,000,000 Abbey National Treasury Services
Notes--1.7% PLC 7.05 03/01/96 50,150,000
11,300,000 A T & T Corp. 6.312 05/04/95 11,300,000
25,000,000 General Electric Capital Corp. 6.95 03/01/96 25,057,500
25,000,000 General Electric Capital Corp. 6.55 03/28/96 24,962,500
Total Corporate Notes
(Cost $111,261,654) 111,470,000
Master Notes-- 50,000,000 Goldman Sachs Group, L.P. 6.07 05/26/95 50,000,000
Variable
Rate--2.9% 107,947,000 Goldman Sachs Group, L.P. 6.05 01/12/96 107,947,000
35,000,000 Smith Barney Inc. 6.05 06/09/95 35,000,000
Total Master Notes--Variable Rate
(Cost $192,947,000) 192,947,000
Bankers 9,000,000 Bank of America N.T. & S.A. 6.30 07/28/95 8,867,560
Acceptances--0.1%
Total Bankers Acceptances
(Cost $8,861,400) 8,867,560
Commercial 25,000,000 AIG Funding Inc. 5.97 05/01/95 25,000,000
Paper--37.0% 27,000,000 Allomon Funding Corp. 6.08 06/13/95 26,803,920
50,000,000 American Express Credit Corp. 6.07 10/16/95 48,581,333
50,000,000 Associates Corp. of North
America 6.00 05/09/95 49,933,333
50,000,000 Bayerische Vereinsbank AG 5.96 05/04/95 49,975,167
50,000,000 Bayerische Vereinsbank AG 5.97 05/05/95 49,966,833
See Notes to Financial Statements.
7
<PAGE>
Commercial $ 50,000,000 B.B.V. Finance (Delaware) Inc. 5.97% 05/08/95 $49,941,958
Paper 24,700,000 Beta Finance Inc. 5.95 05/12/95 24,655,094
(continued) 35,000,000 Beta Finance Inc. 5.95 05/22/95 34,878,521
20,000,000 Bowater PLC 6.08 06/09/95 19,868,267
21,800,000 British Columbia, Province of 6.07 01/12/96 20,859,015
50,000,000 Cadbury Schweppes Money Mgmt. 6.00 05/09/95 49,933,333
73,000,000 Caisse Des Depots Et
Consignations 5.96 05/30/95 72,649,519
11,300,000 Central & Southwest Corp. 6.00 05/17/95 11,269,867
10,100,000 Corporate Asset Securitization
Australia Ltd. Inc. 6.02 05/03/95 10,096,622
50,000,000 Creditanstalt Finance Inc. 6.00 05/11/95 49,916,667
10,000,000 CS First Boston Inc. 6.06 06/05/95 9,941,083
22,700,000 CSW Credit Inc. 5.98 05/01/95 22,700,000
12,600,000 CSW Credit Inc. 6.00 05/02/95 12,597,900
25,000,000 CXC Inc 6.00 05/10/95 24,962,500
16,800,000 CXC Inc 6.00 05/16/95 16,758,000
25,000,000 CXC Inc 5.97 06/01/95 24,871,479
43,005,000 Dean Witter Discover & Co. 5.96 05/24/95 42,841,247
11,000,000 Deer Park Refining L.P. 6.02 05/05/95 10,992,642
28,500,000 Deer Park Refining L.P. 6.05 06/05/95 28,332,365
46,121,000 Delaware Funding Corp. 6.00 06/20/95 45,736,658
50,000,000 Dupont (E.I.) De Nemours & Co. 5.95 05/19/95 49,851,250
50,000,000 Dupont (E.I.) De Nemours & Co. 5.95 06/02/95 49,735,556
42,000,000 Eiger Capital Corp. 6.00 05/02/95 41,993,000
58,000,000 Eiger Capital Corp. 5.96 05/18/95 57,836,762
38,611,000 Falcon Asset Securitization Corp 6.00 05/16/95 38,514,473
50,000,000 Ford Motor Credit Co. 6.10 05/01/95 50,000,000
20,000,000 Ford Motor Credit Co. 6.00 05/16/95 19,950,000
10,000,000 Ford Motor Credit Co. 5.97 05/22/95 9,965,175
9,000,000 Ford Motor Credit Co. 5.97 05/23/95 8,967,165
25,000,000 General Electric Capital Corp. 6.36 05/08/95 24,969,084
9,000,000 General Electric Capital Corp. 6.35 05/10/95 8,985,713
46,500,000 General Electric Capital Corp. 5.97 06/05/95 46,230,106
47,000,000 General Electric Capital Corp. 6.38 08/03/95 46,257,531
19,000,000 Hertz Corp., The 5.95 05/22/95 18,934,054
50,000,000 International Lease Finance
Corp. 5.97 05/17/95 49,867,333
See Notes to Financial Statements.
8
<PAGE>
Commercial $ 37,234,000 International Lease Finance
Corp. 6.03% 10/16/95 $36,177,547
Paper 60,000,000 International Nederlanden US
(continued) Funding Corp. 6.00 05/11/95 59,900,000
11,000,000 Kingdom of Sweden 6.18 07/12/95 10,867,340
50,000,000 Kredietbank N.A. Finance Corp. 6.00 05/10/95 49,925,000
15,000,000 McKenna Triangle National Corp. 6.00 05/11/95 14,975,000
50,000,000 Melville Corp. 5.96 05/01/95 50,000,000
15,500,000 National Australia Funding (DE)
Inc. 6.00 05/05/95 15,489,667
60,000,000 New Center Asset Trust Series 6.03 06/12/95 59,577,900
30,000,000 New Center Asset Trust Series 6.15 07/31/95 29,542,725
30,000,000 New Center Asset Trust Series 6.15 08/15/95 29,465,583
35,000,000 New South Wales Treasury Corp. 6.00 05/09/95 34,953,333
25,000,000 Nomura Holding America Inc. 6.04 05/09/95 24,966,444
11,765,000 Nomura Holding America Inc. 6.05 06/08/95 11,689,867
20,000,000 Nomura Holding America Inc. 6.08 06/12/95 19,858,133
15,000,000 Nomura Holding America Inc. 6.03 07/10/95 14,824,125
100,000,000 Paribas Finance Inc. 5.95 05/22/95 99,652,917
23,090,000 Pfizer Inc. 5.95 05/16/95 23,032,756
35,900,000 Pfizer Inc. 5.95 05/17/95 35,805,064
50,000,000 PHH Corp. 5.95 05/22/95 49,826,458
17,411,000 PHH Corp. 5.97 05/31/95 17,324,380
12,390,000 Pitney Bowes Credit Corp. 6.05 09/08/95 12,118,418
25,125,000 Preferred Receivables Funding
Corp. 6.00 05/09/95 25,091,500
11,114,000 Premium Funding Inc., Series A-Q 6.07 05/12/95 11,093,387
20,611,000 Premium Funding Inc., Series A-Q 6.07 06/02/95 20,499,792
35,000,000 Raytheon Co. 5.97 05/04/95 34,982,588
15,000,000 Riverwoods Funding Corp. 6.00 05/15/95 14,965,000
9,000,000 Riverwoods Funding Corp. 5.97 05/22/95 8,968,658
8,000,000 Riverwoods Funding Corp. 5.97 05/23/95 7,970,813
50,000,000 Santander Finance (DEL) Inc. 6.25 07/31/95 49,237,875
13,150,000 Sara Lee Corp. 5.98 05/01/95 13,150,000
30,100,000 Sheffield Receivables Corp. 6.00 05/03/95 30,089,967
20,000,000 Sheffield Receivables Corp. 6.25 07/21/95 19,728,650
25,000,000 Siemens Corp. 6.32 08/14/95 24,558,854
10,997,000 Windmill Funding Corp. 6.02 05/02/95 10,995,161
50,000,000 Windmill Funding Corp. 6.04 05/03/95 49,983,222
22,434,000 Windmill Funding Corp. 6.00 05/31/95 22,321,830
See Notes to Financial Statements.
9
<PAGE>
Commerical $ 15,119,000 Windmill Funding Corp. 5.99% 05/31/95 $ 15,043,531
Paper 19,000,000 Windmill Funding Corp. 5.97 06/09/95 18,877,118
(continued)
Total Commercial Paper
(Cost $2,433,543,920) 2,433,651,128
Repurchase 150,000,000 Bear Stearns & Co., Inc.
Agreements--** purchased on 04/28/95 5.94 05/01/95 150,000,000
6.1% 150,000,000 Fuji Securities Inc. purchased on
04/28/95 5.95 05/01/95 150,000,000
100,000,000 Smith Barney Inc. purchased on
04/28/95 5.98 05/01/95 100,000,000
Total Repurchase Agreements (Cost
$400,000,000) 400,000,000
Total Investments--102.4%
(Cost $6,740,452,686) 6,740,551,353
Liabilities in Excess of Other
Assets (2.4%) (160,465,340)
Net Assets--Equivalent to $1.00
Per Share on 6,579,987,346
Shares of Beneficial Interest
Outstanding--100.0% $6,580,086,013
</TABLE>
Note--Costs for Federal income tax purposes are the same as those shown
above. At April 30, 1995 net unrealized appreciation amounted to $98,667 and
is comprised of $1,171,398 in appreciation and $1,072,731 in depreciation.
*Commercial Paper and some U.S. Government and Agency Issues are purchased
on a discount basis; the interest rate shown is the discount rate paid at the
time of purchase by the Fund. Other securities bear interest at the rates
shown, payable at fixed dates or upon maturity; the rates shown are the rates
in effect at April 30, 1995. For variable rate instruments, the next date on
which the interest rate is to be adjusted is deemed the maturity date for
valuation.
**Repurchase Agreements are fully collateralized by U.S. Government and
Agency Obligations.
D/N-Discount Notes
See Notes to Financial Statements.
10
<PAGE>
Merrill Lynch Institutional Fund
Statement of Assets and Liabilities
April 30, 1995
<TABLE>
<CAPTION>
<S> <C>
Assets:
Investments at value (identified cost $6,740,452,686) (Note 1a) $6,740,551,353
Cash 5,264,355
Receivable for securities sold 161,134,636
Interest receivable 31,820,934
Prepaid expenses 141,471
Total assets 6,938,912,749
Liabilities:
Payable for investments purchased 352,149,971
Dividends payable 5,498,323
Investment advisory fee payable 979,632
Accrued expenses 198,810
Total liabilities 358,826,736
Net Assets: (Equivalent to $1.00 per share, offering and redemption price, based
on 6,579,987,346 shares of beneficial interest outstanding) $6,580,086,013
</TABLE>
Merrill Lynch Institutional Fund
Statement of Operations
For the Year Ended April 30, 1995
<TABLE>
<CAPTION>
<S> <C> <C>
Investment Income:
Income:
Interest and discount earned (Note 1d) $263,940,683
Expenses:
Investment advisory fee (Note 2) $16,621,425
Registration fees 786,675
Accounting and custodian services 497,309
Dividend and transfer agency fees 403,397
Legal and audit fees 128,533
Trustees' fees (Note 5) 85,795
Printing and shareholder reports 85,295
Insurance 42,032
Miscellaneous 27,578
Total expenses 18,678,039
Waived investment advisory fee (Note 2) (6,623,625) 12,054,414
Net investment income 251,886,269
Realized and Unrealized Gain on Investments:
Net realized gain from investment transactions 1,934,054
Net unrealized appreciation of investments 2,746,629
Net realized and unrealized gain from investments 4,680,683
Net Increase in Net Assets Resulting From Operations $256,566,952
</TABLE>
See Notes to Financial Statements.
11
<PAGE>
Merrill Lynch Institutional Fund
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended April 30,
1995 1994
<S> <C> <C>
Increase (Decrease) in Net Assets:
Operations:
Net investment income $ 251,886,269 $ 142,849,591
Net realized gain from investment transactions 1,934,054 1,591,015
Net unrealized appreciation (depreciation) of investments 2,746,629 (4,755,155)
Net increase in net assets resulting from operations 256,566,952 139,685,451
Total declared as dividends to shareholders (Note 4) (253,820,323) (144,440,606)
Capital share transactions (Note 3) 2,802,217,964 (932,762,113)
Net increase (decrease) in net assets 2,804,964,593 (937,517,268)
Net Assets:
Beginning of year 3,775,121,420 4,712,638,688
End of year $6,580,086,013 $3,775,121,420
</TABLE>
Merrill Lynch Institutional Fund
Financial Highlights
<TABLE>
<CAPTION>
Year Ended April 30,
1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
Net Asset Value, beginning of year $1.00 $1.00 $1.00 $1.00 $1.00
Income from Investment Operations:
Net investment income .050 .031 .033 .050 .074
Net realized and unrealized gain on
investments -- -- .001 -- --
Total from investment operations .050 .031 .034 .050 .074
Less Distributions:
Dividends from net investment income (.050) (.031) (.034) (.050) (.074)
Net Asset Value, end of year $1.00 $1.00 $1.00 $1.00 $1.00
Total Return 5.11 % 3.20 % 3.46 % 5.12 % 7.67 %
Ratios/Supplemental Data:
Net Assets, end of year (000) $6,580,086 $3,775,121 $4,712,639 $2,156,878 $2,622,402
Ratio of expenses to average net assets
(before waiver) .37 % .37 % .38 % .40 % .42 %
Ratio of expenses to average net assets
(after waiver) .24 % .24 % .26 % -- --
Ratio of net investment income, including
realized and unrealized gains and losses, to
average net assets (before waiver) 5.00 % 2.91 % 3.29 % 4.99 % 7.35 %
Ratio of net investment income, including
realized and unrealized gains and losses, to
average net assets (after waiver) 5.13 % 3.04 % 3.41 % -- --
</TABLE>
See Notes to Financial Statements.
12
<PAGE>
Merrill Lynch Government Fund
Schedule of Investments
April 30, 1995Merrill Lynch Government Fund
Schedule of Investments--Continued
April 30, 1995
<TABLE>
<CAPTION>
Interest Maturity Value
Face Amount Rate* Date (Note 1a)
<S> <C> <C> <C> <C> <C>
U.S. $15,000,000 U.S. Treasury Bills 6.72 % 12/14/95 $ 14,445,742
Government 25,000,000 Federal Farm Credit Banks 5.85 05/01/95 25,000,000
& Agency 14,000,000 Federal Home Loan Banks 4.625 08/09/95 13,939,800
Issues--49.4% 14,000,000 Federal Home Loan Mortgage Corp. 4.635 08/09/95 13,942,600
10,000,000 Federal Farm Credit Banks D/N 6.52 07/10/95 9,884,889
19,000,000 Federal Home Loan Banks D/N 6.25 05/03/95 18,993,403
50,000,000 Federal Home Loan Banks D/N 6.27 05/04/95 49,973,875
39,000,000 Federal Home Loan Banks D/N 5.99 08/30/95 38,222,676
75,000,000 Federal Home Loan Banks D/N 6.03 09/18/95 73,264,583
10,000,000 Federal Home Loan Banks D/N 5.89 10/17/95 9,720,933
12,025,000 Federal Home Loan Banks D/N 5.98 10/31/95 11,659,460
13,625,000 Federal Home Loan Banks D/N 6.10 11/03/95 13,203,329
10,000,000 Federal Home Loan Banks D/N 6.06 11/29/95 9,647,256
14,700,000 Federal Home Loan Banks D/N 6.05 12/22/95 14,124,250
5,000,000 Federal Home Loan Banks D/N 6.02 01/11/96 4,786,792
10,000,000 Federal Home Loan Banks D/N 6.02 01/12/96 9,571,911
5,000,000 Federal Home Loan Banks D/N 6.02 01/12/96 4,785,955
7,295,000 Federal Home Loan Banks D/N 5.99 04/12/96 6,868,184
15,900,000 Federal Home Loan Mortgage Corp.
D/N 5.97 05/02/95 15,897,363
29,365,000 Federal Home Loan Mortgage Corp.
D/N 5.85 05/22/95 29,264,792
21,680,000 Federal Home Loan Mortgage Corp.
D/N 5.98 06/01/95 21,568,360
65,000,000 Federal Home Loan Mortgage Corp.
D/N 6.01 06/09/95 64,576,796
47,500,000 Federal Home Loan Mortgage Corp.
D/N 5.98 06/19/95 47,113,376
20,385,000 Federal Home Loan Mortgage Corp.
D/N 5.98 06/21/95 20,212,305
55,000,000 Federal National Mortgage Assoc.
D/N 5.92 08/04/95 54,139,326
75,000,000 Federal National Mortgage Assoc.
D/N 6.05 08/21/95 73,616,333
10,000,000 Federal National Mortgage Assoc.
D/N 6.03 09/11/95 9,780,181
7,495,000 Federal National Mortgage Assoc.
D/N 5.95 09/21/95 7,317,858
See Notes to Financial Statements.
13
<PAGE>
U.S. $28,820,000 Federal National Mortgage Assoc.
Government D/N 5.95 % 09/26/95 $ 28,115,031
& Agency Issues 13,200,000 Federal National Mortgage Assoc.
(continued) D/N 5.92 10/18/95 12,827,247
10,000,000 Federal National Mortgage Assoc.
D/N 5.89 10/19/95 9,717,611
6,025,000 Federal National Mortgage Assoc.
D/N 6.00 11/03/95 5,838,536
48,800,000 Student Loan Marketing Assoc. D/N 5.91 05/24/95 48,615,739
Total U.S. Government & Agency Issues
(Cost $790,597,949) 790,636,492
U.S. 7,000,000 Federal Home Loan Banks 6.43 06/21/95 7,000,000
Government 13,000,000 Federal Home Loan Banks 6.46 06/17/96 13,000,000
Agency Issues 6,000,000 Federal Home Loan Banks 6.43 06/21/96 6,000,000
Variable Rate-- 10,000,000 Federal Home Loan Banks 5.947 08/05/96 9,980,224
29.4% 20,000,000 Federal Home Loan Banks 6.35 01/26/98 19,873,174
3,000,000 Federal Home Loan Mortgage Corp. 6.50 05/13/98 3,000,000
16,000,000 Federal National Mortgage Assoc. 5.82 06/01/95 15,999,865
20,000,000 Federal National Mortgage Assoc. 6.06 09/22/95 19,997,633
25,000,000 Federal National Mortgage Assoc. 5.975 10/30/95 24,993,189
5,000,000 Federal National Mortgage Assoc. 6.40 12/20/95 5,000,000
50,000,000 Federal National Mortgage Assoc. 5.94 02/16/96 50,000,000
30,000,000 Federal National Mortgage Assoc. 6.33 05/13/96 30,000,000
15,000,000 Federal National Mortgage Assoc. 6.33 05/24/96 15,000,000
40,000,000 Federal National Mortgage Assoc. 6.03 10/11/96 40,000,000
25,000,000 Federal National Mortgage Assoc. 6.06 02/21/97 25,000,000
17,000,000 Federal National Mortgage Assoc. 6.45 05/19/97 17,000,000
25,000,000 Federal National Mortgage Assoc. 6.50 05/14/98 25,000,000
24,250,000 Student Loan Marketing Assoc. 5.80 05/11/95 24,246,392
30,000,000 Student Loan Marketing Assoc. 6.14 06/02/95 30,005,831
30,000,000 Student Loan Marketing Assoc. 5.89 09/14/95 30,000,000
5,000,000 Student Loan Marketing Assoc. 6.19 03/20/96 4,998,787
10,000,000 Student Loan Marketing Assoc. 6.08 03/20/96 10,015,234
10,000,000 Student Loan Marketing Assoc. 6.06 04/16/96 10,008,817
15,400,000 Student Loan Marketing Assoc. 5.99 07/19/96 15,406,091
20,000,000 Student Loan Marketing Assoc. 5.967 09/20/96 20,000,000
Total U.S. Government Agency
Issues--Variable Rate
(Cost $471,525,338) 471,525,237
See Notes to Financial Statements.
14
<PAGE>
Repurchase $65,000,000 Chemical Securities Inc., purchased
Agreements**-- on 04/28/95 6.00% 05/01/95 $ 65,000,000
21.6% 65,000,000 Dean Witter Discover & Co.,
purchased on 04/28/95 5.95 05/01/95 65,000,000
30,719,000 Goldman Sachs Group, L.P.
purchased on 04/28/95 5.80 05/01/95 30,719,000
65,000,000 Fuji Securities Inc., purchased on
04/28/95 5.95 05/01/95 65,000,000
70,000,000 HSBC Securities, Inc., purchased on
04/28/95 6.05 05/01/95 70,000,000
50,000,000 UBS Securities, Inc., purchased on
04/28/95. 6.00 05/01/95 50,000,000
Total Repurchase Agreements
(Cost $345,719,000) 345,719,000
Total Investments--100.4%
(Cost $1,607,842,287) 1,607,880,729
Liabilities in Excess of Other
Assets--(0.4%) (6,795,723)
Net Assets--Equivalent to $1.00
Per Share on 1,601,046,564 Shares
of Beneficial Interest
Outstanding--100.0% $1,601,085,006
</TABLE>
Note--Costs for Federal income tax purposes are the same as those shown
above. At April 30, 1995 net unrealized appreciation amounted to $38,442 and
is comprised of $172,133 in appreciation and $133,691 in depreciation.
*U.S. Treasury Notes and Repurchase Agreements bear interest payable at fixed
dates or upon maturity. U.S. Treasury Bills and some U.S. Government and
Agency Issues are purchased on a discount basis; the interest rate shown is
the discount paid at the time of purchase by the Fund. Other U.S. Government
and Agency Issues bear interest at the rates shown, payable at fixed dates or
upon maturity; the rates shown are the rates in effect at April 30, 1995. For
variable rates instruments, the next date on which the interest rate is to be
adjusted is deemed the maturity date for valuation.
**Repurchase Agreements are fully collateralized by US Government and Agency
Obligations.
D/N-Discount Notes
See Notes to Financial Statements.
15
<PAGE>
Merrill Lynch Government Fund
Statement of Assets and Liabilities
April 30, 1995
<TABLE>
<CAPTION>
<S> <C> <C>
Assets:
Investments in securities subject to repurchase agreements $ 345,719,000
Investments in other marketable securities 1,262,161,729
Total investments at value (identified cost $1,607,842,287) (Note 1a) $1,607,880,729
Cash 2,105,748
Receivable for securities sold 25,096,875
Interest receivable 5,831,980
Prepaid expenses 233,727
Total assets 1,641,149,059
Liabilities:
Payable for investments purchased 39,443,722
Dividends payable 307,837
Investment advisory fee payable 237,135
Accrued expenses 75,359
Total liabilities 40,064,053
Net Assets: (Equivalent to $1.00 per share, offering and redemption
price, based on 1,601,046,564 shares of beneficial interest outstanding) $1,601,085,006
</TABLE>
Merrill Lynch Government Fund
Statement of Operations
April 30, 1995
<TABLE>
<CAPTION>
<S> <C> <C>
Investment Income:
Income:
Interest and discount earned (Note 1d) $73,740,322
Expenses:
Investment advisory fee (Note 2) $ 4,718,056
Dividend and transfer agency fees 258,736
Accounting and custodian services 181,691
Registration fees 102,448
Legal and audit fees 49,698
Trustees' fees (Note 5) 24,689
Printing and shareholder reports 23,644
Insurance 15,286
Miscellaneous 10,006
Total expenses 5,384,254
Waived investment advisory fee (Note 2) (1,831,019) 3,553,235
Net investment income 70,187,087
Realized and Unrealized Gain on Investments:
Net realized gain from investment transactions 245,307
Net unrealized appreciation of investments 961,939
Net realized and unrealized gain from investments 1,207,246
Net Increase in Net Assets Resulting From Operations $71,394,333
</TABLE>
See Notes to Financial Statements.
16
<PAGE>
Merrill Lynch Government Fund
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended April 30,
1995 1994
<S> <C> <C>
Increase in Net Assets:
Operations:
Net investment income $ 70,187,087 $ 41,958,999
Net realized gain from investment transactions 245,307 219,402
Net unrealized appreciation (depreciation) of investments 961,939 (1,965,782)
Net increase in net assets resulting from operations 71,394,333 40,212,619
Total declared as dividends to shareholders (Note 4) (70,432,394) (42,178,401)
Capital share transactions (Note 3) 66,644,939 180,400,245
Net increase in net assets 67,606,878 178,434,463
Net Assets:
Beginning of year 1,533,478,128 1,355,043,665
End of year $1,601,085,006 $1,533,478,128
</TABLE>
Merrill Lynch Government Fund
Financial Highlights
<TABLE>
<CAPTION>
Year Ended April 30,
1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
Net Asset Value, beginning of year $1.00 $1.00 $1.00 $1.00 $1.00
Income from Investment Operations:
Net investment income .049 .030 .030 .047 .070
Net realized and unrealized gain on
investments -- -- .001 .002 .001
Total from investment operations .049 .030 .031 .049 .071
Less Distributions:
Dividends from net investment income (.049) (.030) (.031) (.049) (.071)
Net Asset Value, end of year $1.00 $1.00 $1.00 $1.00 $1.00
Total Return 4.99% 3.06% 3.19% 5.05% 7.38%
Ratios/Supplemental Data:
Net Assets, end of year (000) $1,601,085 $1,533,478 $1,355,044 $1,358,150 $1,438,197
Ratio of expenses to average net assets
(before waiver) .37% .38% .39% .41% .44%
Ratio of expenses to average net assets
(after waiver) .24% .32% -- -- --
Ratio of net investment income, including
realized and unrealized gains and losses,
to average net assets (before waiver) 4.82% 2.83% 3.19% 4.93% 7.11%
Ratio of net investment income, including
realized and unrealized gains and losses,
to average net assets (after waiver) 4.95% 2.89% -- -- --
</TABLE>
See Notes to Financial Statements.
17
<PAGE>
Merrill Lynch Treasury Fund
Schedule of Investments
April 30, 1995
<TABLE>
<CAPTION>
Interest Maturity Value
Face Amount Rate* Date (Note 1a)
<S> <C> <C> <C> <C> <C>
U.S. $17,000,000 U.S. Treasury Bills 5.90% 05/04/95 $ 16,991,642
Government 9,614,000 U.S. Treasury Bills 5.85 05/04/95 9,609,313
Issues--99.5% 24,477,000 U.S. Treasury Bills 5.79 05/11/95 24,437,633
2,286,000 U.S. Treasury Bills 5.69 05/18/95 2,279,858
1,496,000 U.S. Treasury Bills 5.68 05/18/95 1,491,987
19,000,000 U.S. Treasury Bills 5.72 05/18/95 18,948,679
25,275,000 U.S. Treasury Bills 5.70 05/18/95 25,206,968
22,717,000 U.S. Treasury Bills 5.715 05/25/95 22,630,448
6,975,000 U.S. Treasury Bills 5.735 06/01/95 6,940,554
15,000,000 U.S. Treasury Bills 5.72 06/01/95 14,926,117
546,000 U.S. Treasury Bills 5.73 06/01/95 543,306
12,171,000 U.S. Treasury Bills 5.715 06/01/95 12,111,104
17,000,000 U.S. Treasury Bills 5.735 06/08/95 16,897,089
253,000 U.S. Treasury Bills 5.69 06/08/95 251,480
40,000,000 U.S. Treasury Bills 5.66 06/08/95 39,761,022
508,000 U.S. Treasury Bills 5.66 07/06/95 502,738
6,626,000 U.S. Treasury Bills 5.64 08/17/95 6,511,900
3,373,000 U.S. Treasury Bills 5.635 08/17/95 3,314,917
4,945,000 U.S. Treasury Bills 5.64 08/17/95 4,859,847
3,124,000 U.S. Treasury Bills 5.73 08/17/95 3,070,205
9,000,000 U.S. Treasury Bills 5.80 09/21/95 8,793,901
1,000,000 U.S. Treasury Bills 5.825 10/19/95 972,355
5,500,000 U.S. Treasury Bills 5.76 10/26/95 5,341,592
40,000,000 U.S. Treasury Notes 4.125 05/31/95 39,940,340
15,000,000 U.S. Treasury Notes 4.25 07/31/95 14,934,376
40,000,000 U.S. Treasury Notes 4.625 08/15/95 39,837,500
Total U.S. Government
Issues--99.5%
(Cost $341,127,350) 341,106,871
Other Assets Less
Liabilities--0.5% 1,737,591
Net Assets--Equivalent to
$1.00 Per Share on
342,864,941 Shares of
Beneficial Interest
Outstanding--100.0% $342,844,462
</TABLE>
Note--Costs for Federal income tax purposes are the same as those shown
above. At April 30, 1995 net unrealized depreciation amounted to $20,479 and
is comprised of $1,284 in appreciation and $21,763 in depreciation.
*U.S. Treasury Bills are purchased on a discount basis; the interest rate
shown is the discount paid at the time of purchase by the Fund. U.S. Treasury
Notes bear interest payable at fixed dates or upon maturity.
See Notes to Financial Statements.
18
<PAGE>
Merrill Lynch Treasury Fund
Statement of Assets and Liabilities
April 30, 1995
<TABLE>
<CAPTION>
<S> <C>
Assets:
Investments at value (identified cost $341,127,350) (Note 1a) $341,106,871
Cash 534,423
Receivable for securities sold 19,968,722
Interest receivable 1,230,792
Prepaid expenses 11,397
Total assets 362,852,205
Liabilities:
Payable for investments purchased 19,880,511
Investment advisory fee payable 60,075
Dividends payable 38,208
Accrued expenses 28,949
Total liabilities 20,007,743
Net Assets: (Equivalent to $1.00 per share, offering and redemption price, based on
342,864,941 shares of beneficial interest outstanding) $342,844,462
</TABLE>
Merrill Lynch Treasury Fund
Statement of Operations
For the Year Ended April 30, 1995
<TABLE>
<CAPTION>
<S> <C> <C>
Investment Income:
Income:
Interest and discount earned (Note 1d) $15,765,617
Expenses:
Investment advisory fee (Note 2) $1,104,980
Registration fees 91,165
Dividend and transfer agency fees 83,579
Accounting and custodian services 69,062
Amortization of organization expenses 23,256
Legal and audit fees 10,316
Trustees' fees (Note 5) 6,019
Insurance 5,188
Printing and shareholder reports 3,610
Miscellaneous 2,177
Total expenses 1,399,352
Waived investment advisory fee (Note 2) (473,563) 925,789
Net investment income 14,839,828
Realized and Unrealized Gain on Investments:
Net realized gain from investment transactions 92,135
Net unrealized depreciation of investments (2,366)
Net realized and unrealized gain from investments 89,769
Net Increase in Net Assets Resulting From Operations $14,929,597
</TABLE>
See Notes to Financial Statements.
19
<PAGE>
Merrill Lynch Treasury Fund
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended April 30,
1995 1994
<S> <C> <C>
Increase (Decrease) in Net Assets:
Operations:
Net investment income $ 14,839,828 $ 8,902,274
Net realized gain from investment transactions 92,135 124,333
Net unrealized depreciation of investments (2,366) (101,448)
Net increase in net assets resulting from operations 14,929,597 8,925,159
Total declared as dividends to shareholders (Note 4) (14,931,963) (9,026,607)
Capital share transactions (Note 3) 75,893,383 (92,263,569)
Net increase (decrease) in net assets 75,891,017 (92,365,017)
Net Assets:
Beginning of year 266,953,445 359,318,462
End of year $342,844,462 $266,953,445
</TABLE>
Merrill Lynch Treasury Fund
Financial Highlights
<TABLE>
<CAPTION>
Year Ended April 30,
1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
Net Asset Value, beginning of year $1.00 $1.00 $1.00 $1.00 $1.00
Income from Investment Operations:
Net investment income .045 .027 .028 .045 .066
Net realized and unrealized gain
on investments -- -- .001 .002 .003
Total from investment operations .045 .027 .029 .047 .069
Less Distributions:
Dividends from net investment income (.045) (.027) (.029) (.047) (.069)
Net Asset Value, end of year $1.00 $1.00 $1.00 $1.00 $1.00
Total Return 4.68% 2.82% 2.97% 4.79% 7.17%
Ratios/Supplemental Data:
Net Assets, end of year (000) $342,844 $266,953 $359,318 $320,686 $391,643
Ratio of expenses to average net assets
(before waiver) .44% .45% .45% .46% .50%
Ratio of expenses to average net assets
(after waiver) .29% .39% -- -- .47%
Ratio of net investment income, including
realized and unrealized gains and losses,
to average net assets (before waiver) 4.58% 2.67% 2.93% 4.69% 6.63%
Ratio of net investment income, including
realized and unrealized gains and losses,
to average net assets (after waiver) 4.73% 2.73% -- -- 6.66%
</TABLE>
See Notes to Financial Statements.
20
<PAGE>
Merrill Lynch Institutional Tax-Exempt Fund
Schedule of Investments
April 30, 1995
<TABLE>
<CAPTION>
Value
Face Amount Issue (Note 1a)
<S> <C> <C> <C>
Alabama-- $10,300,000 Birmingham, Alabama Medical Clinic Board Revenue
2.6% (University of Alabama Health Services Project) DDN
5.10% due 12/01/2026 (a) $ 10,300,000
Alaska-- 13,200,000 Valdez, Alaska Marine Terminal Revenue (Arco
3.3% Transportation Project) VRDN 4.75% due 05/01/2031
(a) 13,200,000
Arizona-- 3,300,000 Cochise County, Arizona PCR Solid Waste Disposal
12.1% Revenue (Arizona Electric Power Coop Inc. Project)
FXRDN 4.45% due 09/01/1995 3,300,000
Coconino County, Arizona PCR (Arizona Public Service
Co.--Navajo Project) DDN:
11,250,000 5.10% due 10/01/2029 (a) 11,250,000
2,000,000 5.10% due 10/01/2024(a) 2,000,000
1,800,000 Maricopa County, Arizona TAN 5.00% due 07/28/1995 1,802,768
5,000,000 Maricopa County, Arizona PCR (Arizona Public Service
Co.) DDN 5.00% due 05/01/2029 (a) 5,000,000
9,000,000 Maricopa County, Arizona PCR (El Paso Electric Co.
Project) VRDN 4.95% due 07/01/2014 (a) 9,000,000
Phoenix, Arizona DDN:
2,000,000 4.10% due 06/01/2018 (a) 2,000,000
3,700,000 5.00% due 06/01/2019 (a) 3,700,000
10,900,000 Pinal, Arizona IDA PCR (Magma-Copper/Newmont
Mining Corp. Project) DDN 5.15% due 12/01/2009 (a) 10,900,000
California-- 10,000,000 California Higher Education Loan Authority Inc.
2.7% Student Loan Revenue FXRDN 3.90% due 07/01/1995 10,000,000
690,000 California Housing Finance Agency Revenue FXRDN
4.30% due 05/01/1995 690,000
Colorado-- 6,000,000 Arapahoe County, Colorado Capital Improvement
4.4% Highway Trust Fund (E-470 Project) FXRDN 4.45% due
08/31/1995 6,000,000
Denver, Colorado City & County Airport Revenue CP:
7,000,000 4.20% due 05/11/1995 7,000,000
4,000,000 4.10% due 05/15/1995 4,000,000
800,000 4.10% due 05/24/1995 800,000
Connecticut-- 5,000,000 Eagles Tax-Exempt Trust VRDN 4.54% due
1.2% 08/15/2012 (a) 5,000,000
District of 13,400,000 District of Columbia General Fund Recovery DDN 5.30%
Columbia-- due 06/01/2003 (a) 13,400,000
3.3%
See Notes to Financial Statements.
21
<PAGE>
Florida-- $8,400,000 St. Lucie County, Florida PCR (Florida Power & Light
4.0% Co. Project) CP 4.20% due 05/19/1995 $ 8,400,000
7,800,000 St. Lucie County, Florida PCR (Florida Power & Light
Co. Project) DDN 5.15% due 01/01/2026 (a) 7,800,000
Georgia-- 3,500,000 Burke County, Georgia Development Authority PCR
4.0% (Georgia Power Co. Plant-Vogtle Project) DDN 5.00%
due 07/01/2024 (a) 3,500,000
4,555,000 Georgia State Residential Finance Authority FXRDN
4.40% due 06/01/1995 4,555,000
8,000,000 Municipal Electric Authority CP 4.10% due 05/22/1995 8,000,000
Illinois-- 3,270,000 Illinois Educational Facilities Authority Revenue
4.0% (Art
Institute of Chicago) VRDN 4.55% due 03/01/2027 (a) 3,270,000
5,000,000 Illinois Health Facilities Authority Revenue
(Evanston Hospital Corp. Project) CP 4.30% due
02/29/1996 5,000,000
5,000,000 Illinois Health Facilities Authority Revenue
(Evanston Hospital Corp. Project) DDN 4.80% due
08/15/2020 (a) 5,000,000
2,960,000 Peoria, Illinois IDR (CDC Realty L.P. Project) VRDN
4.95% due 12/01/2014 (a) 2,960,000
Indiana-- 3,645,000 Bloomington, Indiana Economic Development Revenue
4.8% (Bloomington Square Project) VRDN 4.80% due
12/01/2008 (a) 3,645,000
3,500,000 Indiana Bond Bank Advance Funding Program VRDN 4.12%
due 01/10/1996 (a) 3,500,000
6,300,000 Jasper County, Indiana PCR (Northern Industrial
Public Service) DDN 5.10% due 06/01/2013 (a) 6,300,000
2,500,000 St. Joseph County, Indiana Hospital Authority
(Madison Center Inc. Project) VRDN 4.65% due
03/04/2015 (a) 2,500,000
3,500,000 Westfield, Indiana IDR (Standard Locknut Inc.
Project) VRDN 4.95% due 01/01/2002 (a) 3,500,000
Kentucky-- 3,000,000 Carroll County, Kentucky Solid Waste Disposal
1.3% Revenue (Kentucky Utilities Co. Project) DDN 5.05%
due 11/01/2024 (a) 3,000,000
2,200,000 Daviess County, Kentucky Solid Waste Disposal
Revenue (Scott Paper Co. Project) DDN 5.10% due
12/01/2023 (a) 2,200,000
Louisiana-- 2,200,000 Saint Charles Parish, Louisiana PCR (Shell Oil Co.
0.5% Project) DDN 5.05% due 10/01/2022 (a) 2,200,000
Massachusetts-- 2,200,000 Massachusetts VRDN 5.15% due 12/01/1997 (a) 2,200,000
3.9% 1,500,000 Massachusetts Bay Transportation Authority GO 5.00%
due 06/15/1995 1,501,613
See Notes to Financial Statements.
22
<PAGE>
Massachusetts-- $12,000,000 Massachusetts Health & Educational Facility
(continued) Authority Revenue (Boston University) CP 4.10% due
06/06/1995 $ 12,000,000
Michigan-- 5,535,000 Michigan State Building Authority Revenue CP 4.30%
3.6% due 07/26/1995 5,535,000
8,800,000 Michigan State Strategic Fund PCR (Consumers Power
Project) DDN 5.00% due 04/15/2018 (a) 8,800,000
Missouri-- 6,375,000 Clayton, Missouri IDA VRDN 4.90% due 02/01/2007 (a) 6,375,000
2.2% 2,500,000 Jefferson County, Missouri IDA (Sinclair & Rush Inc.
Project) VRDN 4.95% due 11/01/2001 (a) 2,500,000
New Hampshire-- 9,830,000 New Hampshire Higher Educational & Health Facilities
2.4% Authority Revenue (Dartmouth Educational Loan
Corp.) FXRDN 3.75% due 06/01/1995 9,830,000
New York-- New York City DDN:
4.6% 4,000,000 5.15% due 05/15/1996 (a) 4,000,000
4,600,000 5.15% due 08/01/1996 (a) 4,600,000
5,000,000 New York City GO/VRDN 4.02% due 06/30/1995 (a) 5,000,000
3,000,000 New York City GO/DDN 5.15% due 08/01/1997 (a) 3,000,000
2,100,000 New York City Industrial Development Agency IDR DDN
5.25% due 11/01/2015 (a) 2,100,000
North 6,200,000 North Carolina Medical Care Commission Hospital
Carolina-- Revenue (Carol Woods Project) DDN 5.40% due
1.5% 04/01/2021 (a) 6,200,000
Ohio-- 3,500,000 Cincinnati & Hamilton County, Ohio Port Authority
14.8% IDR VRDN 4.70% due 11/01/2000 (a) 3,500,000
13,700,000 Cuyahoga County, Ohio Hospital Revenue (University
Hospital of Cleveland) DDN 5.15% due 01/01/2016 (a) 13,700,000
1,400,000 Cuyahoga County, Ohio IDR VRDN 4.95% due
03/01/2019 (a) 1,400,000
5,000,000 Dayton, Ohio Special Facilities Revenue (Emery Air
Freight Project) DDN 5.15% due 10/01/2009 (a) 5,000,000
2,300,000 Franklin County, Ohio Health Systems Revenue (St.
Anthony Medical) DDN 5.15% due 07/01/2015 (a) 2,300,000
1,000,000 Franklin County, Ohio IDR VRDN 4.95% due 05/01/1997
(a) 1,000,000
2,355,000 Geauga County, Ohio IDR VRDN 4.95% due
06/01/2005 (a) 2,355,000
15,100,000 Hamilton County, Ohio Health Systems Revenue
(Franciscan Sisters of Poor Health) DDN 5.15% due
03/01/2017 (a) 15,100,000
See Notes to Financial Statements.
23
<PAGE>
Ohio-- $ 3,480,000 Lucas-Beacon Place Housing Development Corp. M/F
(continued) Revenue (Beacon Place Apartments Project) FXRDN
4.55% 09/15/1995 $ 3,480,000
2,400,000 Ohio State Water Development Authority Revenue VRDN
4.35% due 01/01/1997 (a) 2,400,000
5,000,000 Richland County, Ohio BAN 4.85% due 09/14/1995 5,010,723
4,500,000 University of Cincinnati Ohio General Receipts BAN
5.00% due 03/21/1996 4,513,339
Oregon-- 5,900,000 Port St. Helens, Oregon PCR (Portland General
1.5% Electric Project) DDN 5.00% due 06/01/2010 (a) 5,900,000
Pennsylvania-- 10,500,000 Emmaus, Pennsylvania, General Authority Revenue
6.1% local Government (Pool Program) VRDN 4.80% due
03/01/2024 (a) 10,500,000
1,500,000 Erie County, Pennsylvania IDA Revenue (McInnes Steel
Co. Project) DDN 5.35% due 11/01/2001 (a) 1,500,000
10,000,000 Philadelphia, Pennsylvania School District TRAN
4.75% due 06/30/1995 10,004,500
2,600,000 Washington County, Pennsylvania Higher Education
Authority Revenue VRDN 4.75% due 11/01/2005 (a) 2,600,000
Rhode Island-- 3,400,000 Rhode Island Housing & Mortgage Finance Corp.
0.8% Homeownership Opportunity FXRDN 4.40% due
02/01/1996 3,400,000
Texas-- 3,400,000 Gulf Coast IDA Solid Waste Disposal Revenue (Citgo
8.4% Petroleum Corp. Project) DDN 5.10% due
04/01/2026 (a) 3,400,000
13,000,000 Harris County, Texas Health Facilities Development
Corp. (Methodist Hospital) DDN 5.00% due
12/01/2025 (a) 13,000,000
6,000,000 San Antonio, Texas Electric & Gas Revenue CP 4.15%
due 07/25/1995 6,000,000
10,000,000 Texas State TRAN 5.00% due 08/31/1995 10,021,696
1,400,000 Texas State Water Development Board DDN 5.10% due
03/01/2015 (a) 1,400,000
Utah-- 1,775,000 Salt Lake City, Utah PCR (Amoco Project) FXRDN 4.40%
0.4% due 10/01/1995 1,776,441
Wisconsin-- 2,650,000 Milwaukee, Wisconsin Redevelopment Authority
0.7% Revenue (Jensar Corp. Project) VRDN 4.95% due
03/01/2007 (a) 2,650,000
See Notes to Financial Statements.
24
<PAGE>
Wyoming-- $4,800,000 Carbon County, Wyoming PCR (Amoco Project) FXRDN
2.1% 4.15% due 11/01/1995 $ 4,800,000
3,625,000 Lincoln County, Wyoming PCR (Amoco Project) FXRDN
4.40% due 10/01/1995 3,627,942
Total Investments (Cost $408,654,022*)--101.2% 408,654,022
Liabilities in Excess of Other Assets--(1.2%) (4,750,715)
Net Assets--Equivalent to $1.00 Per Share on
404,028,815 Shares of Beneficial Interest
Outstanding--100.0% $403,903,307
</TABLE>
(a) The interest rate is subject to change periodically based on a certain
index. The rates shown are those in effect at April 30, 1995. For variable
rate demand instruments, the next coupon date on which the interest is to be
adjusted is deemed the maturity date for valuation.
*Cost for Federal income tax purposes.
Portfolio Abbreviations for Merrill Lynch Institutional Tax-Exempt
BAN Bond Anticipation Notes
CP Commerical Paper
DDN Daily Demand Notes
FXRDN Fixed Rate Demand Notes
GO General Obligation
IDA Industrial Development Authority
IDR Industrial Development Revenue
M/F Multi-Family
PCR Pollution Control Revenue
TAN Tax Anticipation Notes
TRAN Tax Revenue Anticipation Notes
VRDN Variable Rate Demand Notes
See Notes to Financial Statements.
25
<PAGE>
Merrill Lynch Institutional Tax-Exempt Fund
Statement of Assets and Liabilities
April 30, 1995
<TABLE>
<CAPTION>
<S> <C>
Assets: $408,654,022
Investments, at amortized cost and value (Note 1a)
Cash 2,995,354
Interest receivable 2,627,747
Deferred organization and prepaid expenses 135,565
Total assets 414,412,688
Liabilities:
Payable for investments purchased 10,406,374
Investment advisory fee payable 51,296
Accrued expenses 31,374
Dividends payable 20,337
Total liabilities 10,509,381
Net Assets: (Equivalent to $1.00 per share, offering and redemption price, based on $403,903,307
404,028,815 shares of beneficial interest outstanding)
</TABLE>
Merrill Lynch Institutional Tax-Exempt Fund
Statement of Operations
April 30, 1995
<TABLE>
<CAPTION>
<S> <C> <C>
Investment Income:
Income:
Interest and discount earned (Note 1d) $11,670,943
Expenses:
Investment advisory fee (Note 2) $1,515,253
Registration fees 132,184
Accounting and custodian services 90,518
Dividend and transfer agency fees 90,478
Amortization of organization expenses 29,814
Legal and audit fees 18,073
Printing and shareholder reports 6,361
Trustees' fees (Note 5) 5,996
Insurance 5,292
Miscellaneous 2,814
Total expenses 1,896,783
Waived investment advisory fee (Note 2) (841,807) 1,054,976
Net investment income 10,615,967
Net realized loss from investment transactions (143,818)
Net Increase in Net Assets Resulting From Operations $10,472,149
</TABLE>
See Notes to Financial Statements.
26
<PAGE>
Merrill Lynch Institutional Tax-Exempt Fund
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Five Months Year
Ended Ended Ended
April 30, April 30, November 30,
1995 1994 1993
<S> <C> <C> <C>
Increase (Decrease) in Net Assets:
Operations:
Net investment income $ 10,615,967 $ 3,119,279 $ 5,904,015
Net realized loss from investment transactions (143,818) (24,510) (106,427)
Net increase in net assets resulting from operations 10,472,149 3,094,769 5,797,588
Total declared as dividends to shareholders (Note 4) (10,611,603) (3,089,577) (5,898,152)
Capital share transactions (Note 3) 13,667,322 111,673,726 (50,456,626)
Net increase (decrease) in net assets 13,527,868 111,678,918 (50,557,190)
Net Assets:
Beginning of period 390,375,439 278,696,521 329,253,711
End of period, including undistributed net investment
income of $134,573, $143,666 and $221,830 and accumulated
capital losses of $260,081, $129,720 and $213,076
respectively (Note 1g and
Note 4) $403,903,307 $390,375,439 $278,696,521
</TABLE>
Merrill Lynch Institutional Tax-Exempt Fund
Financial Highlights
<TABLE>
<CAPTION>
Year Five Months
Ended Ended
April 30, April 30, Year Ended November 30,
1995 1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, beginning of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Net investment income .03 .01 .02 .03 .04 .05
Dividends from net investment income (.03) (.01) (.02) (.03) (.04) (.05)
Net Asset Value, end of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Total Return 3.20% 2.14%(1) 2.14% 2.74% 4.33% 5.55%
Ratios/Supplemental Data:
Net Assets, end of period (000) $403,903 $390,375 $278,697 $329,254 $377,154 $310,344
Ratio of expenses to average net .56% .59%(1) .62% .61% .61% .63%
assets (before waiver)
Ratio of expenses to average net .31% .34%(1) .45% .53% .54% .56%
assets (after waiver)
Ratio of net investment income, to 2.90% 1.92%(1) 1.96% 2.67% 4.21% 5.36%
average net assets (before waiver)
Ratio of net investment income, to 3.15% 2.17%(1) 2.13% 2.75% 4.28% 5.43%
average net assets (after waiver)
</TABLE>
(1) On an annualized basis
27
<PAGE>
Merrill Lynch Funds For Institutions Series
Notes to Financial Statements
1. Significant Accounting Policies
Merrill Lynch Funds For Institutions Series (the "Trust") was organized
as a Massachusetts business trust on May 7, 1987 and is registered under the
Investment Company Act of 1940 as a diversified, open-end management company.
On February 18, 1994 Merrill Lynch Institutional Tax-Exempt Fund was
reorganized as a separate series of the Trust. The Trust has a fiscal year
end of April 30. The following is a summary of significant accounting
policies consistently followed by the Trust. These policies are in conformity
with generally accepted accounting principles.
(a) The value of the Institutional, Government and Treasury Fund
portfolio securities is determined on the basis of fair value as determined
in good faith by the Trustees of the Trust. In determining fair value,
securities for which market quotations are readily available are valued at
market value. Merrill Lynch Security Pricing Service, an affiliate of Merrill
Lynch & Co., Inc., provides security price quotations in connection with such
valuation to compute the net asset value of the Institutional, Government and
Treasury Funds. Other securities, if any, are valued at their fair value in
the best judgment of Fund Asset Management, L.P., ("FAM") under procedures
established by, and under the supervision of, the Trustees. Securities with
remaining maturities of 60 days or less are valued by use of the amortized
cost method. Institutional Tax- Exempt Fund investments are carried at
amortized cost which approximates market.
For the purpose of valuation, the maturity of a variable rate demand
instrument is deemed to be the next coupon date on which the interest rate is
to be adjusted. In the case of a floating rate instrument, the remaining
maturity is deemed to be the demand notice payment period.
(b) It is the Trust's policy to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income to its shareholders. Therefore, no
Federal Income tax provision is required.
(c) Realized gains and losses on investments are computed on the basis
of identified cost of the security sold.
(d) Security transactions are accounted for on the date the securities
are purchased or sold (the trade date). Interest Income (after adjustment for
amortization of premium or discount) is recorded as earned.
(e) Deferred organization expenses are amortized over a period not
exceeding five years. Prepaid registration fees are charged to income as the
related shares are sold.
(f) Repurchase agreements--The Institutional Fund and the Government
Fund invest in U.S. Government & Agency securities pursuant to repurchase
agreements with member banks of the Federal Reserve System or primary dealers
in U.S. Government securities. Under such agreements, the bank or primary
dealer agrees to repurchase the security at a mutually agreed upon time and
price. The Trust takes possession of the underlying securities, marks to
market such securities daily and, if necessary, receives additional
securities to ensure that the contract is adequately collateralized.
(g) Effective December 1, 1993, Merrill Lynch Institutional Tax-Exempt
Fund adopted Statement of Position ("SOP") 93-2 "Determination, Disclosure,
and Financial Statement Presentation of Income, Capital Gain, and Return of
Capital Distributions by Investment Companies." Accordingly, the Fund changed
the classification of its net asset components as a result of permanent
differences arising from differing treatments of market discount for book and
tax purposes. During the year ended April 30, 1995, amounts have been
reclassified to reflect a decrease of $13,457 in both accumulated capital
losses and undistributed net investment income. This SOP had no effect on the
other series of the Trust.
2. Investment Advisory Fees and Other
Transactions with Affiliates
Fund Asset Management, L.P., a subsidiary of Merrill Lynch & Co., Inc.,
provides investment
28
<PAGE>
Merrill Lynch Funds For Institutions Series
Notes to Financial Statements--Continued
advisory and corporate administrative services to the Trust for a fee,
subject to certain limitations, at the following annual rates:
<TABLE>
<CAPTION>
<S> <C>
Percentage of Average Daily Net Assets
Institutional Fund .40% up to and including $250,000,000
plus .375% over $250,000,000 up to and
including $500,000,000
plus .35% over $500,000,000 up to and
including $750,000,000
plus .325% over $750,000,000
Government Fund
and Treasury Fund .35% up to and including $500,000,000
plus .335% over $500,000,000 up to and
including $750,000,000
plus .32% over $750,000,000 up to and
including $1,000,000,000
plus .30% over $1,000,000,000
Institutional
Tax-Exempt Fund .45% up to and including $1,500,000,000
plus .425% over $1,500,000,000 up to and
including $2,000,000,000
plus .40% over $2,000,000,000
</TABLE>
FAM has agreed to waive a portion of its advisory fees. As of December
1, 1993 the effective fee payable to FAM will be at the annual rate of 0.20%
of each Fund's average daily net assets. FAM may discontinue waiver of the
fee in whole or in part at any time without notice.
For the year ended April 30, 1995 FAM waived a portion of its fees
amounting to $6,623,625 for the Institutional Fund, $1,831,019 for the
Government Fund, $473,563 for the Treasury Fund and $841,807 for the
Institutional Tax-Exempt Fund.
All officers and certain trustees of the Trust are affiliated with
Merrill Lynch & Co., Inc.
3. Shares of Beneficial Interest
The Declaration of Trust permits the Trustees to issue an unlimited number of
shares of beneficial interest in the Institutional Fund, Government Fund and
Treasury Fund ($.01 par value) and Institutional Tax-Exempt Fund ($.10 par
value) of a single class. At April 30, 1995, capital paid-in aggregated
$6,579,987,346 for Institutional Fund, $1,601,046,564 for Government Fund,
$342,864,941 for Treasury Fund and $404,028,815 for Institutional Tax-Exempt
Fund. Transactions in shares at a constant net asset value of $1.00 per share
were as follows:
<TABLE>
<CAPTION>
Year Ended April 30,
Institutional Fund 1995 1994
<S> <C> <C>
Shares sold 63,113,089,823 57,789,577,790
Shares issued to shareholders 198,199,152 112,959,517
in reinvestment of dividends
Total 63,311,288,975 57,902,537,307
Shares redeemed 60,509,071,011 58,835,299,420
Net increase (decrease) 2,802,217,964 (932,762,113)
</TABLE>
<TABLE>
<CAPTION>
Year Ended April 30,
Government Fund 1995 1994
<S> <C> <C>
Shares sold 8,314,763,207 7,510,129,404
Shares issued to shareholders 65,230,079 37,905,314
in reinvestment of dividends
Total 8,379,993,286 7,548,034,718
Shares redeemed 8,313,348,347 7,367,634,473
Net increase (decrease) 66,644,939 180,400,245
</TABLE>
<TABLE>
<CAPTION>
Year Ended April 30,
Treasury Fund 1995 1994
<S> <C> <C>
Shares sold 2,288,760,430 1,476,065,082
Shares issued to shareholders 14,088,128 8,566,715
in reinvestment of dividends
Total 2,302,848,558 1,484,631,797
Shares redeemed 2,226,955,175 1,576,895,366
Net increase (decrease) 75,893,383 (92,263,569)
</TABLE>
<TABLE>
<CAPTION>
Year Five Months Year
Institutional Ended Ended Ended
Tax-Exempt Fund April 30, April 30, November 30,
1995 1994 1993
<S> <C> <C> <C>
Shares sold 2,737,285,871 1,450,485,801 3,279,737,452
Shares issued to 9,666,260 2,708,949 5,105,388
shareholders in
reinvestment
of dividends
Total 2,746,952,131 1,453,194,750 3,284,842,840
Shares redeemed 2,733,284,809 1,341,521,024 3,335,299,466
Net increase 13,667,322 111,673,726 (50,456,626)
(decrease)
</TABLE>
29
<PAGE>
Merrill Lynch Funds For Institutions Series
Notes to Financial Statements--Continued
4. Distributions
The Funds declare dividends daily, pay dividends monthly and automatically
reinvest such dividends in additional Fund shares at net asset value, unless
shareholders request payment in cash. Dividends for the Institutional,
Government and Treasury Funds are declared from the total of net investment
income, plus or minus realized gains or losses, if any, on investments.
Dividends for the Institutional Tax-Exempt Fund are declared from net
investment income-excluding discounts earned other than original issue
discounts. Net realized capital gains, if any, are normally distributed
annually, after deducting prior years' loss carryovers. The Fund may
distribute capital gains more frequently than annually in order to maintain
the Fund's net asset value at $1.00 per share.
At April 30, 1995, the Institutional Tax-Exempt Fund had net capital loss
carryovers of $260,081 of which $78 expire in the year 2000, $102,443 expire
in 2001, $17,520 expire in 2002 and $140,040 expire in 2003.
5. Trustees' Fees
Each Trustee who is not affiliated with the Trust or its adviser is paid an
annual fee of $24,000 by the Trust. Trustees' fees are allocated among the
four series of the Trust based on the net assets under management.
Trustees
Robert W. Crook*
President & Trustee
David Almy
Trustee
President,
McCall & Almy, Inc.
A. Bruce Brackenridge
Trustee
Retired Group Executive,
J.P. Morgan & Co., Inc.
Charles C. Cabot, Jr.
Trustee
Partner, Sullivan & Worcester
Terry K. Glenn*
Trustee
Executive Vice President,
Merrill Lynch Asset Management
Todd Goodwin
Trustee
Partner, Gibbons, Goodwin, van
Amerongen
George W. Holbrook, Jr.
Trustee
Managing Partner,
Bradley Resources Company
* May be deemed to be an "interested
person" of the Fund as such term is
defined in the Investment Company Act
of 1940.
30
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Trustees and Shareholders of
Merrill Lynch Funds For Institutions Series:
We have audited the accompanying statements of assets and liabilities,
including the schedules of investments, of Merrill Lynch Funds For
Institutions Series (the "Trust"), consisting of the Merrill Lynch
Institutional Fund, Merrill Lynch Government Fund, Merrill Lynch Treasury
Fund, and Merrill Lynch Institutional Tax-Exempt Fund (the "Funds") as of
April 30, 1995, the related statements of operations for the year then ended,
and the statements of changes in net assets and financial highlights for each
of the respective fiscal periods then ended. These financial statements and
financial highlights are the responsibility of the Trust's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of the
securities owned at April 30, 1995 by correspondence with the custodian and
brokers; where replies were not received from brokers, we performed other
auditing procedures. An audit also includes assessing the accounting
priciples used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of each of the
respective Funds of the Merrill Lynch Funds For Institutions Series at April
30, 1995, the results of their operations, the changes in their net assets,
and their financial highlights for each of the respective fiscal periods then
ended in conformity with generally accepted accounting principles.
Deloitte & Touche LLP
Boston, Massachusetts
May 26, 1995
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