- --------------------------------------------------------------------------------
Dear Shareholder:
We are pleased to provide you with this Annual Report for the Merrill
Lynch Funds For Institutions Series.
Merrill Lynch Premier Institutional Fund
For the year ended April 30, 1999, Merrill Lynch Premier Institutional
Fund's net yield was 5.19%. The Fund's seven-day annualized yield as of April
30, 1999 was 4.78%. The average portfolio maturity for Merrill Lynch Premier
Institutional Fund at April 30, 1999 was 87 days, compared to 80 days at
October 31, 1998.
As the US economy has weathered the storm of global turmoil and continued
to perform impressively during the six months ended April 30, 1999, Merrill
Lynch Premier Institutional Fund's average life ranged from a low of 65 days to
a high of 87 days. We kept the Fund's average life at the longer end of the
allowable band since we believed that Federal Reserve Board policy would remain
neutral for the foreseeable future.
At the start of the six-month period ended April 30, 1999, yield spreads
were very wide between corporate and US Treasury securities as a result of the
uncertainty surrounding the health of the global financial system. We sought to
take advantage of this spread widening by purchasing one-year floating rate
securities indexed on the three-month London Interbank Offered Rate (LIBOR). In
line with our belief that action by the Federal Reserve Board would remain on
hold, we purchased callable US Government Agency securities, focusing on issues
that provided us with the longest call protection. Later in the period, the
yield curve became very flat for maturities between one and six months. At the
same time, the yield curve became relatively steep for maturities between six
months and one year. In this environment, we employed a barbell strategy,
investing in a combination of one-month and one-year securities.
Looking ahead, we still believe that action by the Federal Reserve Board
will remain on hold as long as the inflation environment remains favorable.
Merrill Lynch Institutional Fund
For the year ended April 30, 1999, Merrill Lynch Institutional Fund's net
yield was 5.13%. The Fund's seven-day net annualized yield as of April 30, 1999
was 4.77%. The average portfolio maturity for Merrill Lynch Institutional Fund
at April 30, 1999 was 85 days, compared to 72 days at October 31, 1998.
During the six months ended April 30, 1999, Merrill Lynch Institutional
Fund's average life ranged from a low of 60 days to a high of 86 days, as the
US economy continued to show robust growth with no signs of inflation. We kept
our average life at the long end of the allowable spectrum since we thought
that uncertainties in the global economy would keep Federal Reserve Board
monetary policy on hold.
Early in the six-month period ended April 30, 1999, in view of the turmoil
overseas, we focused on six-month to nine-month US Government Agency discount
notes, which provided good relative value compared to commercial paper of the
same maturity. Later in the six-month period, the yield curve became very flat
for maturities between one month and six months. At the same time, the yield
curve became relatively steep for maturities between six months and one year.
In this environment, we used a barbell strategy, investing in a combination of
one-month and one-year securities. In addition, we purchased floating rate
securities, focusing on those linked to the prime rate and the three-month
Treasury bill.
Looking ahead, we believe that changes by the Federal Reserve Board will
remain on hold as long as the inflation environment remains favorable.
1
<PAGE>
Merrill Lynch Rated Institutional Fund
For the period ended April 30, 1999, Merrill Lynch Rated Institutional
Fund's net annualized yield was 5.11%. The Fund's seven-day net annualized
yield as of April 30, 1999 was 4.74%. The average portfolio maturity for
Merrill Lynch Rated Institutional Fund at April 30, 1999 was 48 days, compared
to 47 days at October 31, 1998.
During the six months ended April 30, 1999, Merrill Lynch Rated
Institutional Fund's average life ranged from a low of 38 days to a high of 61
days. Early in the period, we focused on asset-backed commercial paper as
investors looked to avoid longer-term transactions, creating more supply in the
short end of the yield curve. Later in the period, the yield curve became very
flat for maturities between one month and six months. At the same time, the
yield curve became relatively steep for maturities between six months and one
year. In this environment, we employed a barbell strategy, investing in a
combination of one-month and one-year securities. During the period we
experienced significant erosion in the net assets of the Fund. This development
has caused us to increase our overnight investments to provide maximum
liquidity for our shareholders.
Looking ahead, we believe that Federal Reserve Board policy will remain
unchanged as long as the inflation environment remains favorable. We will
continue to keep our average life on the shorter end while we develop a history
of the Fund's seasonal asset flows.
Merrill Lynch Government Fund
For the year ended April 30, 1999, Merrill Lynch Government Fund's net
yield was 5.04%. The Fund's seven-day net annualized yield as of April 30, 1999
was 4.66%. The average portfolio maturity for Merrill Lynch Government Fund at
April 30, 1999 was 59 days, compared to 52 days at October 31, 1998.
During the six months ended April 30, 1999, Merrill Lynch Government
Fund's average life ranged from a low of 48 days to a high of 60 days. For the
most part, we held the average life toward the upper end of the range because
an accommodative Federal Reserve Board held interest rates in check. Throughout
most of the six-month period we limited our overnight investments, given the
decline in Treasury issuance, which held financing levels low. On the longer
end, we utilized one-year and two-year US Government Agency securities at
attractive spreads to comparably dated Treasury securities. As a hedge against
a potential rise in interest rates, we increased our floating rate position
from 25% of net assets to over 40%, favoring prime-based and bill-based
indexes.
Looking ahead, we believe that interest rates will remain range-bound as
prospects of inflation remain distant, despite a relatively strong economy.
Merrill Lynch Treasury Fund
For the year ended April 30, 1999, Merrill Lynch Treasury Fund's net yield
was 4.66%. The Fund's seven-day net annualized yield as of April 30, 1999 was
4.29%. The average portfolio maturity for Merrill Lynch Treasury Fund at April
30, 1999 was 56 days, compared to 50 days at October 31, 1998.
For the six months ended April 30, 1999, Merrill Lynch Treasury Fund's
average life ranged from a low of 44 days to a high of 60 days. We attempted to
hold our interest rate profile toward the longer end of this range because of
strong technical conditions. Despite the tendency of the Treasury to fund
itself seasonally with cash management bills, overall issuance declined. This
caused us to favor Treasury notes over bills for yield, while bills still
provided the Fund with same-day liquidity. Recent increases in the Treasury's
short-term borrowing needs coupled with a reversal of the "flight to quality"
earlier in the period have narrowed the spread between Treasury issues and
other types of securities to their tightest levels in recent history. As a
result, we expect to maintain an optimistic investment outlook.
2
<PAGE>
Merrill Lynch Institutional Tax-Exempt Fund
For the year ended April 30, 1999, Merrill Lynch Institutional Tax-Exempt
Fund's net yield was 3.17%. The Fund's seven-day net annualized yield as of
April 30, 1999 was 3.36%. The average portfolio maturity for Merrill Lynch
Institutional Tax-Exempt Fund at April 30, 1999 was 34 days, compared to 31
days at October 31, 1998.
We continued to maintain a neutral approach to the short-term municipal
market during the six months ended April 30, 1999. While the average life of
the Fund fluctuated around the 35-day range, a reduced amount of new
longer-dated municipal issuance limited our opportunities to extend the Fund's
average life.
Despite an unsettled global financial environment, the domestic economy
continued to weather these external factors and generate economic growth that
trended above estimates. The Federal Reserve Board continued to balance its
interest rate policy between cushioning the domestic financial system from
unsettling world events while maintaining the current economic expansion. After
the Federal Reserve Board reduced the Federal Funds rate to 4.75% at the
November Federal Open Market Committee meeting, it was able to leave interest
rates unchanged for the remainder of the six-month period. Investors wary of
the continued economic strength and inflation implications allowed one-year
Treasury bill yields to rise from a low in the 3.95% range to the 4.75% range
at the end of the six-month period. Until April, this rise in Treasury yields
did little to change yields of equivalent one-year municipal notes, which were
in the 2.90%--3.00% range for the majority of the period. The main reason for
this disparity in municipal yields was the increased demand created from
declining short-term municipal issuance combined with the seasonal increase in
tax-exempt money fund assets, especially in the first three months of the
calendar year.
The Fund was well situated in the beginning of the period because it was
structured to take advantage of an anticipated spike in variable rate demand
notes (VRDN) that generally occurs from seasonal year-end pressures. We
utilized this asset growth to increase the Fund's VRDN position and selectively
purchased tax-exempt commercial paper (TECP) and a limited amount of municipal
notes to help stabilize the Fund's yield later in the period. The Fund's net
assets reached a high of $2.4 billion in December, when we increased the Fund's
purchases of TECP and municipal notes seeking to stabilize its yield. However,
with yields on VRDN securities declining to historically low levels as compared
to their taxable counterparts, the Fund's yields declined as well. The Fund,
which must hold a percentage of these securities for liquidity purposes,
experienced a decline in yields to levels unattractive on an equivalent taxable
basis, despite being attractive relative to other similar tax-exempt funds. As
a result, the Fund's net assets declined steadily to a low of $1.7 billion in
April. However, with a combination of quarter-end pressures at the end of March
and tax-exempt money funds experiencing tax-related redemptions in April,
yields on VRDNs adjusted themselves to attractive levels that enhanced the
Fund's yield. As a result, the Fund's net assets increased to end the April
period at nearly $2.0 billion.
Overall the Fund performed well above the average of its peers for the
year, as measured by Lipper Analytical Services. We accomplished this by
utilizing a strategy that balanced the domestic interest rate changes with the
various supply imbalances that affect the municipal market. The strategies
employed allowed the Fund to offer an attractive yield to its shareholders
throughout the year.
3
<PAGE>
In the coming months, we expect to continue to employ a neutral investment
strategy. We will continue to monitor changing economic conditions and adjust
our outlook accordingly. We will seek to enhance and stabilize the Fund's yield
utilizing TECP and municipal notes as municipalities come to market with their
annual issuance. Finally, we will continue to closely monitor credit quality
while seeking to offer an attractive yield to our shareholders.
We thank you for your continued interest in 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/ P. Michael Walsh
P. Michael Walsh
Vice President and Portfolio Manager
Merrill Lynch Premier Institutional Fund
Merrill Lynch Institutional Fund
Merrill Lynch Rated Institutional Fund
/s/ Kevin Schiatta
Kevin Schiatta
Vice President and Portfolio Manager
Merrill Lynch Institutional Tax-Exempt Fund
/s/ John Ng
John Ng
Vice President and Portfolio Manager
Merrill Lynch Government Fund
Merrill Lynch Treasury Fund
May 27, 1999
4
<PAGE>
- --------------------------------------------------------------------------------
Merrill Lynch Premier Institutional Fund
Schedule of Investments
April 30, 1999
<TABLE>
<CAPTION>
=====================================================================================================================
Interest Maturity Value
Face Amount Rate* Date (Note 1a)
=====================================================================================================================
<S> <C> <C> <C> <C> <C>
U.S. $ 13,800,000 U. S. Treasury Bills ...................... 3.75% 10/14/99 $ 13,519,377
Government & 80,000,000 U. S. Treasury Bills ...................... 3.89 10/14/99 78,372,278
Agency 25,000,000 U. S. Treasury Bills ...................... 4.25 01/06/00 24,239,583
Issues -- 10.9% 12,500,000 U.S. Treasury Notes ....................... 5.88 11/15/99 12,699,219
166,000,000 U.S. Treasury Notes ....................... 5.63 12/31/99 166,933,750
15,000,000 U.S. Treasury Notes ....................... 5.38 01/31/00 15,063,867
12,500,000 U.S. Treasury Notes ....................... 7.75 01/31/00 12,769,531
24,310,000 U.S. Treasury Notes ....................... 5.88 02/15/00 24,507,519
23,000,000 U.S. Treasury Notes ....................... 5.63 04/30/00 23,167,109
12,500,000 U.S. Treasury Notes ....................... 6.25 05/31/00 12,679,688
15,000,000 U.S. Treasury Notes ....................... 5.38 07/31/00 15,084,375
30,000,000 U.S. Treasury Notes ....................... 4.63 11/30/00 29,857,032
10,000,000 U.S. Treasury Notes ....................... 4.63 12/31/00 9,946,875
80,000,000 U.S. Treasury Notes ....................... 4.50 01/31/01 79,387,504
20,000,000 U.S. Treasury Notes ....................... 5.00 04/30/01 20,018,750
25,000,000 Federal Home Loan Banks ................... 4.98 01/19/00 24,967,500
25,000,000 Federal Home Loan Banks ................... 4.98 02/16/00 24,980,000
25,000,000 Federal Home Loan Banks ................... 4.95 11/20/00 24,900,000
25,000,000 Federal Home Loan Mortgage Corp. 5.05 11/17/00 24,912,500
25,000,000 Federal Home Loan Mortgage Corp. 5.13 11/24/00 24,935,000
25,000,000 Federal Home Loan Mortgage Corp. 5.18 11/24/00 24,953,125
12,500,000 Federal Home Loan Mortgage Corp. 5.25 01/19/01 12,474,000
25,000,000 Federal Home Loan Mortgage Corp. 5.15 01/26/01 24,913,750
40,000,000 Federal National Mortgage Assoc. .......... 4.98 05/12/99 40,000,000
25,000,000 Federal National Mortgage Assoc. .......... 5.21 01/26/01 24,933,000
41,455,000 Federal National Mortgage Assoc. .......... 5.41 03/22/01 41,437,589
25,000,000 Federal National Mortgage Assoc. .......... 5.38 03/27/01 24,980,750
25,000,000 Federal National Mortgage Assoc. .......... 5.40 03/27/01 24,980,250
24,900,000 Federal National Mortgage Assoc. .......... 5.38 04/06/01 24,878,586
10,280,000 Student Loan Marketing Assoc. ............. 5.89 11/17/99 10,328,522
19,000,000 Federal Farm Credit Banks D/N ............. 4.64 05/14/99 18,968,164
25,000,000 Federal Farm Credit Banks D/N ............. 4.30 10/29/99 24,406,722
20,000,000 Federal Home Loan Banks D/N ............... 4.26 10/15/99 19,562,089
25,000,000 Federal National Mortgage Assoc. D/N 4.68 06/08/99 24,876,500
5,000,000 Federal National Mortgage Assoc. D/N 4.68 06/09/99 4,974,650
</TABLE>
See Notes to Financial Statements.
5
<PAGE>
- --------------------------------------------------------------------------------
Merrill Lynch Premier Institutional Fund
Schedule of Investments -- Continued
April 30, 1999
<TABLE>
<CAPTION>
===================================================================================================================
Interest Maturity Value
Face Amount Rate* Date (Note 1a)
===================================================================================================================
<S> <C> <C> <C> <C> <C>
U.S. $ 25,000,000 Federal National Mortgage Assoc. D/N 4.60% 07/07/99 $ 24,780,389
Government & 15,931,000 Federal National Mortgage Assoc. D/N 4.59 07/08/99 15,788,966
Agency 31,000,000 Federal National Mortgage Assoc. D/N 4.60 07/15/99 30,695,167
Issues 70,000,000 Federal National Mortgage Assoc. D/N 4.53 08/16/99 69,017,978
(continued) 10,600,000 Federal National Mortgage Assoc. D/N 4.60 08/20/99 10,445,735
- -------------------------------------------------------------------------------------------------------------------
Total U.S. Government & Agency
Issues (Cost $1,162,028,976) .............. 1,160,337,389
- -------------------------------------------------------------------------------------------------------------------
U.S. 95,000,000 Federal Home Loan Banks ................... 4.99 09/02/99 94,983,863
Governmen 25,000,000 Federal Home Loan Banks ................... 4.91 11/09/99 24,992,267
Agency 48,500,000 Federal Home Loan Banks ................... 4.91 11/12/99 48,484,712
Issues -- 50,000,000 Federal Home Loan Banks ................... 4.91 11/16/99 49,980,918
Variable 30,000,000 Federal Home Loan Banks ................... 5.00 04/28/00 29,988,098
Rate -- 7..9% 150,000,000 Federal Home Loan Mortgage Corp. 4.96 04/14/00 149,928,484
10,000,000 Federal National Mortgage Assoc. .......... 4.59 07/26/99 9,996,021
50,000,000 Federal National Mortgage Assoc. .......... 4.86 07/30/99 49,989,641
18,000,000 Federal National Mortgage Assoc. .......... 4.54 09/22/99 17,987,445
48,000,000 Federal National Mortgage Assoc. .......... 4.96 10/27/99 47,988,925
30,000,000 Student Loan Marketing Assoc. ............. 4.57 08/02/99 29,981,233
50,000,000 Student Loan Marketing Assoc. ............. 4.86 01/12/00 49,993,546
60,000,000 Student Loan Marketing Assoc. ............. 4.77 02/02/00 59,989,072
76,000,000 Student Loan Marketing Assoc. ............. 4.79 02/04/00 75,986,058
100,000,000 Student Loan Marketing Assoc. ............. 5.11 02/14/00 99,945,739
- -------------------------------------------------------------------------------------------------------------------
Total U.S. Government Agency
Issues -- Variable Rate
(Cost $840,216,022) ....................... 840,216,022
- -------------------------------------------------------------------------------------------------------------------
Certificate of 75,000,000 Fleet National Bank, RI ................... 4.90 04/17/00 74,965,714
Deposit --
Variable
Rate -- 0.7%
- -------------------------------------------------------------------------------------------------------------------
Total Certificate of Deposit --
Variable Rate (Cost $74,965,714) .......... 74,965,714
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
6
<PAGE>
- --------------------------------------------------------------------------------
Merrill Lynch Premier Institutional Fund
Schedule of Investments -- Continued
April 30, 1999
<TABLE>
<CAPTION>
===============================================================================================================
Interest Maturity Value
Face Amount Rate* Date (Note 1a)
===============================================================================================================
<S> <C> <C> <C> <C> <C>
Euro $45,000,000 Abbey National Treasury Services PLC 5.03% 10/29/99 $ 45,000,000
Certificates of 43,000,000 Abbey National Treasury Services PLC 4.97 11/01/99 43,000,000
Deposit -- 75,000,000 Svenska Handelsbanken, London ........... 4.94 05/18/99 74,999,474
Variable 75,000,000 Svenska Handelsbanken, London ........... 4.94 08/19/99 74,983,417
Rate -- 2.3% 10,000,000 Svenska Handelsbanken, London ........... 5.00 09/24/99 9,997,525
- ---------------------------------------------------------------------------------------------------------------
Total Euro Certificates of
Deposit -- Variable Rate
(Cost $247,980,416) ..................... 247,980,416
- ---------------------------------------------------------------------------------------------------------------
Yankee 50,000,000 Bank of Nova Scotia, Portland ........... 4.97 07/06/99 50,001,939
Certificates of 25,000,000 Bayerische Hypo-Und Vereinsbank
Deposit -- 5.2% AG, NY ................................ 5.27 03/03/00 25,005,121
50,000,000 Canadian Imperial Bank of
Commerce, NY .......................... 5.10 04/12/00 49,938,490
90,000,000 Commerzbank AG, NY ...................... 5.09 02/16/00 89,895,858
25,000,000 Commerzbank AG, NY ...................... 5.19 02/25/00 24,991,314
60,000,000 Deutsche Bank AG, NY .................... 5.13 04/20/00 59,944,753
15,000,000 Landesbank Hessen-Thuringen
Girozentrale, NY ...................... 5.22 02/29/00 14,998,419
50,000,000 National Bank of Canada, N............... 5.17 04/10/00 49,969,657
22,000,000 Societe Generale, NY .................... 5.69 07/16/99 22,027,470
75,000,000 Societe Generale, NY .................... 5.20 03/15/00 74,977,572
25,000,000 Svenska Handelsbanken, NY ............... 5.79 05/07/99 24,999,803
20,000,000 Svenska Handelsbanken, NY ............... 5.78 05/28/99 19,999,009
50,000,000 Svenska Handelsbanken, NY ............... 5.75 06/09/99 49,996,420
- ---------------------------------------------------------------------------------------------------------------
Total Yankee Certificates of
Deposit (Cost $556,817,373) ............. 556,745,825
- ---------------------------------------------------------------------------------------------------------------
Yankee 20,000,000 Credit Suisse First Boston, NY .......... 5.02 05/12/99 20,000,000
Certificates of 50,000,000 Deutsche Bank AG, NY .................... 4.89 04/17/00 49,971,304
Deposit -- 80,000,000 Societe Generale, NY .................... 4.85 05/07/99 79,999,204
Variable 50,000,000 Societe Generale, NY .................... 4.99 08/11/99 49,990,796
Rate - 3.3% 73,000,000 Societe Generale, NY .................... 4.87 03/03/00 72,963,675
25,000,000 Svenska Handelsbanken, NY ............... 4.82 07/21/99 24,996,719
50,000,000 Toronto-Dominion Bank Ltd., NY .......... 4.81 07/13/99 49,993,500
- ---------------------------------------------------------------------------------------------------------------
Total Yankee Certificates of
Deposit -- Variable Rate
(Cost $347,915,198) ..................... 347,915,198
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
7
<PAGE>
- --------------------------------------------------------------------------------
Merrill Lynch Premier Institutional Fund
Schedule of Investments -- Continued
April 30, 1999
<TABLE>
<CAPTION>
==================================================================================================================
Interest Maturity Value
Face Amount Rate* Date (Note 1a)
==================================================================================================================
<S> <C> <C> <C> <C> <C>
Time $185,000,000 Chase Manhattan Bank ................... 5.00% 05/03/99 $ 185,000,000
Deposits -- 3.8% 80,000,000 Deutsche Bank AG, Grand Cayman ......... 4.94 05/03/99 80,000,000
133,760,000 SunTrust Bank, Grand Cayman ............ 5.00 05/03/99 133,760,000
- ------------------------------------------------------------------------------------------------------------------
Total Time Deposits
(Cost $398,760,000) .................... 398,760,000
- ------------------------------------------------------------------------------------------------------------------
Bank Notes -- 50,000,000 FCC National Bank, Wilmington .......... 5.00 10/01/99 50,004,666
1.1% 39,000,000 First National Bank of Chicago ......... 5.73 05/19/99 38,999,127
24,000,000 First Union National Bank of North
Carolina ............................. 5.30 03/01/00 24,000,000
- ------------------------------------------------------------------------------------------------------------------
Total Bank Notes
(Cost $113,001,174) .................... 113,003,793
- ------------------------------------------------------------------------------------------------------------------
Bank Notes -- 50,000,000 American Express Centurion Bank ........ 4.95 05/03/00 50,000,000
Variable 90,000,000 Comerica Bank .......................... 4.88 05/01/00 89,938,439
Rate -- 5.3% 50,000,000 FCC National Bank ...................... 4.81 05/12/99 49,999,118
95,000,000 First Union National Bank .............. 4.94 09/01/99 95,000,000
50,000,000 First Union National Bank .............. 5.02 11/16/99 49,997,274
50,000,000 Harris Trust & Savings ................. 4.91 04/05/00 49,981,695
25,000,000 National City Bank, Ohio ............... 4.88 03/29/00 24,984,394
125,000,000 NationsBank, N.A. ...................... 4.91 04/05/00 124,954,237
27,700,000 Old Kent Bank .......................... 4.81 06/30/99 27,697,309
- ------------------------------------------------------------------------------------------------------------------
Total Bank Notes -- Variable Rate
(Cost $562,552,466) .................... 562,552,466
- ------------------------------------------------------------------------------------------------------------------
Corporate 13,630,000 Associates Corp. of North America ...... 6.13 11/12/99 13,701,966
Notes -- 3.5% 50,000,000 Beta Finance Inc. ...................... 5.15 01/13/00 49,970,000
50,000,000 Beta Finance Inc. ...................... 5.20 03/01/00 50,000,000
40,000,000 Beta Finance Inc. ...................... 5.26 03/08/00 40,013,600
22,000,000 Chrysler Financial Corp. ............... 6.44 06/16/99 22,016,197
15,424,000 Chrysler Financial Corp. ............... 12.75 11/01/99 15,989,598
3,358,622 Copelco Capital Funding Trust,
Class A .............................. 5.68 08/16/99 3,358,287
23,500,000 General Electric Capital Corp. ......... 4.95 05/03/00 23,500,000
5,000,000 International Lease Finance Corp. ...... 6.44 05/03/99 5,000,157
8,500,000 Lehman Brothers Holdings Inc. .......... 10.00 05/15/99 8,513,157
16,000,000 Lehman Brothers Holdings Inc. .......... 6.92 06/01/99 16,018,407
14,900,000 Lehman Brothers Holdings Inc. .......... 7.63 07/15/99 14,967,795
5,000,000 Lehman Brothers Holdings Inc. .......... 6.90 07/15/99 5,022,750
5,500,000 Lehman Brothers Holdings Inc. .......... 6.30 08/11/99 5,515,015
25,000,000 Lehman Brothers Holdings Inc. .......... 6.44 08/13/99 25,079,250
</TABLE>
See Notes to Financial Statements.
8
<PAGE>
- --------------------------------------------------------------------------------
Merrill Lynch Premier Institutional Fund
Schedule of Investments -- Continued
April 30, 1999
<TABLE>
<CAPTION>
==============================================================================================================
Interest Maturity Value
Face Amount Rate* Date (Note 1a)
==============================================================================================================
<S> <C> <C> <C> <C> <C>
Corporate $20,000,000 Lehman Brothers Holdings Inc. ............ 6.84% 10/07/99 $ 20,130,000
Notes 24,000,000 Wells Fargo & Co. ........................ 5.31 03/31/00 24,027,360
(continued) 25,000,000 Wells Fargo & Co. ........................ 5.23 04/10/00 25,042,500
- --------------------------------------------------------------------------------------------------------------
Total Corporate Notes
(Cost $367,749,388) ...................... 367,866,039
- --------------------------------------------------------------------------------------------------------------
Corporate 65,000,000 Abbey National Treasury Services PLC 4.87 07/15/99 64,990,222
Notes -- 50,000,000 Abbey National Treasury Services PLC 4.79 07/20/99 49,991,233
Variable 85,000,000 Abbey National Treasury Services PLC 4.94 08/17/99 84,964,300
Rate -- 10.9% 25,000,000 American Honda Finance Corp. ............. 5.07 11/29/99 24,999,250
50,000,000 American Honda Finance Corp. ............. 4.97 04/10/00 49,985,230
70,000,000 Bear Stearns Companies Inc. .............. 4.90 06/15/99 70,000,000
25,000,000 Citigroup Inc. ........................... 5.07 02/03/00 25,033,500
26,700,000 CIT Group Holdings Inc. .................. 4.80 05/24/99 26,698,851
30,000,000 CIT Group Holdings Inc. .................. 4.83 08/30/99 30,000,000
50,000,000 CIT Group Holdings Inc. .................. 4.89 03/27/00 49,970,200
54,000,000 Ford Motor Credit Co. .................... 4.95 05/05/00 54,000,000
21,000,000 General Electric Capital Corp. ........... 4.82 06/03/99 20,999,068
20,000,000 General Electric Capital Corp. ........... 5.03 09/03/99 20,002,000
30,000,000 General Electric Capital Corp. ........... 4.95 04/12/00 30,001,350
15,000,000 General Motors Acceptance Corp. .......... 5.07 06/04/99 15,000,057
30,000,000 General Motors Acceptance Corp. .......... 4.89 07/06/99 29,995,980
23,000,000 General Motors Acceptance Corp. .......... 4.91 08/26/99 22,994,250
15,000,000 General Motors Acceptance Corp. .......... 4.90 10/08/99 14,996,100
36,000,000 General Motors Acceptance Corp. .......... 5.17 12/01/00 35,992,800
22,000,000 General Motors Acceptance Corp. .......... 5.05 02/27/01 22,000,000
15,000,000 Goldman Sachs Group L.P. ................. 5.08 05/12/00 14,997,000
20,000,000 Household Finance Corp. .................. 4.95 09/13/99 19,998,000
6,600,000 Lehman Brothers Holdings Inc. ............ 5.32 05/18/99 6,600,966
25,000,000 Lehman Brothers Holdings Inc. ............ 5.06 05/24/99 25,001,866
28,000,000 Lehman Brothers Holdings Inc. ............ 5.05 08/20/99 27,781,600
90,000,000 Liberty Lighthouse US Cap Co., LLC 4.98 10/08/99 90,002,700
50,000,000 Liberty Lighthouse US Cap Co., LLC 4.98 10/15/99 50,001,500
25,000,000 Pepsico Inc. ............................. 4.81 08/19/99 24,986,750
</TABLE>
See Notes to Financial Statements.
9
<PAGE>
- --------------------------------------------------------------------------------
Merrill Lynch Premier Institutional Fund
Schedule of Investments -- Continued
April 30, 1999
<TABLE>
<CAPTION>
================================================================================================================
Interest Maturity Value
Face Amount Rate* Date (Note 1a)
================================================================================================================
<S> <C> <C> <C> <C> <C>
Corporate $ 34,000,000 Racers 1998-MM-7-1 ..................... 4.92% 08/13/99 $ 34,000,000
Notes -- 47,500,000 Racers 1998-MM-12-3 .................... 5.03 01/21/00 47,500,000
Variable 20,000,000 Xerox Capital (Europe) PLC ............. 4.89 08/20/99 19,996,000
Rate 40,000,000 Xerox Capital (Europe) PLC ............. 4.87 04/06/00 39,968,636
(continued) 20,000,000 Wells Fargo & Co. ...................... 4.88 04/26/00 19,987,840
- ----------------------------------------------------------------------------------------------------------------
Total Corporate Notes -- Variable
Rate (Cost $1,163,663,082) ............. 1,163,437,249
- ----------------------------------------------------------------------------------------------------------------
Euro Notes -- 75,000,000 BankAmerica Corporation ................ 8.38 12/15/99 76,365,000
Variable
Rate -- 0.7%
- ----------------------------------------------------------------------------------------------------------------
Total Euro Notes -- Variable Rate
(Cost $76,458,690) ..................... 76,365,000
- ----------------------------------------------------------------------------------------------------------------
Master Notes 250,000,000 Goldman Sachs Group L.P. ............... 4.83 11/18/99 250,000,000
Variable 30,000,000 Jackson National Life Insurance Co. 4.96 05/03/99 30,000,000
Rate -- 6.1% 28,000,000 John Hancock Mutual
Life Insurance Co. ................... 4.98 07/30/99 28,000,000
200,000,000 J. P. Morgan Securities Inc. ........... 4.83 10/01/99 200,000,000
10,000,000 Pacific Life Insurance Co. ............. 4.97 06/01/99 10,000,000
10,000,000 Pacific Life Insurance Co. ............. 4.97 10/01/99 10,000,000
71,000,000 Security Life of Denver Insurance Co. .. 5.03 03/23/00 71,000,000
20,000,000 Transamerica Life Insurance &
Annuity Co. ............................ 5.03 03/24/00 20,000,000
30,000,000 Travelers Insurance Company (The) ...... 4.97 02/01/00 30,000,000
- ----------------------------------------------------------------------------------------------------------------
Total Master Notes -- Variable
Rate (Cost $649,000,000) ............... 649,000,000
- ----------------------------------------------------------------------------------------------------------------
Commercial 20,128,000 Amsterdam Funding Corp. ................ 4.83 05/05/99 20,117,198
Paper -- 37.0% 50,000,000 Apreco Inc. ............................ 4.87 05/24/99 49,844,431
15,000,000 Apreco Inc. ............................ 4.85 06/11/99 14,917,146
25,000,000 Apreco Inc. ............................ 4.85 06/14/99 24,851,806
50,000,000 Associates First Capital Corp. ......... 4.81 05/07/99 49,959,917
65,000,000 Associates First Capital Corp. ......... 4.82 05/12/99 64,904,269
18,000,000 Associates First Capital Corp. ......... 4.78 05/27/99 17,937,860
51,278,000 Atlantis One Funding Corp. ............. 5.04 05/13/99 51,191,853
37,000,000 Atlantis One Funding Corp. ............. 4.80 05/13/99 36,940,800
25,618,000 Atlantis One Funding Corp. ............. 5.06 05/14/99 25,571,236
25,213,000 Atlantis One Funding Corp. ............. 4.82 08/12/99 24,865,299
50,806,000 Atlantis One Funding Corp. ............. 4.82 08/16/99 50,078,148
</TABLE>
See Notes to Financial Statements.
10
<PAGE>
- --------------------------------------------------------------------------------
Merrill Lynch Premier Institutional Fund
Schedule of Investments -- Continued
April 30, 1999
<TABLE>
<CAPTION>
==============================================================================================================
Interest Maturity Value
Face Amount Rate* Date (Note 1a)
==============================================================================================================
<S> <C> <C> <C> <C> <C>
Commercial $ 17,601,000 Atlantis One Funding Corp. .............. 4.82% 08/26/99 $ 17,325,280
Paper 50,000,000 Atlantis One Funding Corp. .............. 4.82 09/22/99 49,036,000
(continued) 25,000,000 BankAmerica Corp. ....................... 4.79 10/05/99 24,474,486
50,000,000 Bank of Scotland Treasury Services
PLC ................................... 4.81 05/03/99 49,986,639
15,000,000 Centric Capital Corp. ................... 4.82 06/09/99 14,921,675
50,000,000 Centric Capital Corp. ................... 4.82 06/10/99 49,732,222
32,000,000 Centric Capital Corp. ................... 4.82 07/09/99 31,703,760
11,350,000 Certain Funding Corp. ................... 4.87 06/21/99 11,271,694
50,000,000 Clipper Receivables Corp. ............... 4.83 07/09/99 49,537,125
40,000,000 Cofco Capital Corp. ..................... 4.86 05/07/99 39,967,600
55,000,000 Concord Minutemen Capital Co., LLC ...... 4.81 05/06/99 54,963,257
75,000,000 Concord Minutemen Capital Co., LLC ...... 4.83 05/13/99 74,879,250
68,561,000 Concord Minutemen Capital Co., LLC ...... 4.82 07/14/99 67,880,304
75,000,000 Corporate Receivables Corp. ............. 4.83 05/11/99 74,899,375
60,000,000 Corporate Receivables Corp. ............. 4.85 06/04/99 59,725,167
50,000,000 Corporate Receivables Corp. ............. 4.81 07/12/99 49,517,000
30,000,000 Credit Suisse First Boston Inc. ......... 4.83 07/09/99 29,722,275
50,000,000 CXC Inc. ................................ 4.82 05/10/99 49,939,750
100,000,000 CXC Inc. ................................ 4.84 05/14/99 99,825,222
75,000,000 DaimlerChrysler North America
Holding Corp. ......................... 4.85 07/07/99 74,325,812
75,000,000 DaimlerChrysler North America
Holding Corp. ......................... 4.83 07/13/99 74,265,437
50,000,000 DaimlerChrysler North America
Holding Corp. ......................... 4.83 08/17/99 49,277,000
47,484,000 Edison Asset Securitization LLC ......... 4.85 06/07/99 47,247,305
23,829,000 Edison Asset Securitization LLC ......... 4.83 07/01/99 23,633,979
50,000,000 Eureka Securitization Inc. .............. 4.84 05/25/99 49,838,667
25,000,000 Finova Capital Corp. .................... 4.85 06/30/99 24,798,750
50,000,000 Finova Capital Corp. .................... 4.88 08/20/99 49,256,917
200,000,000 Ford Motor Credit Co. ................... 4.81 07/14/99 198,014,333
300,000,000 Ford Motor Credit Co. ................... 4.81 07/16/99 296,941,000
100,000,000 General Electric Capital Corp. .......... 4.82 07/07/99 99,101,083
100,000,000 General Electric Capital Corp. .......... 4.82 07/08/99 99,087,667
31,395,000 Grand Funding Corp. ..................... 4.83 06/03/99 31,255,999
50,000,000 Grand Funding Corp. ..................... 4.86 06/04/99 49,770,500
50,000,000 Grand Funding Corp. ..................... 4.83 06/04/99 49,771,917
21,000,000 Grand Funding Corp. ..................... 4.85 06/09/99 20,889,662
25,000,000 Grand Funding Corp. ..................... 4.83 06/09/99 24,869,188
</TABLE>
See Notes to Financial Statements.
11
<PAGE>
- --------------------------------------------------------------------------------
Merrill Lynch Premier Institutional Fund
Schedule of Investments -- Continued
April 30, 1999
<TABLE>
<CAPTION>
================================================================================================================
Interest Maturity Value
Face Amount Rate* Date (Note 1a)
================================================================================================================
<S> <C> <C> <C> <C> <C>
Commercial $ 22,605,000 Grand Funding Corp. ..................... 4.82% 07/12/99 $ 22,386,636
Paper 19,880,000 Greenwich Funding Corp. ................. 4.83 05/13/99 19,847,993
(continued) 40,000,000 Lehman Brothers Holdings Inc. ........... 5.04 06/07/99 39,792,800
69,017,000 Lexington Parker Capital Co. LLC ........ 4.85 05/14/99 68,896,124
35,000,000 Lexington Parker Capital Co. LLC ........ 4.86 05/20/99 34,910,225
33,957,000 Lexington Parker Capital Co. LLC ........ 4.83 09/08/99 33,365,960
100,000,000 Morgan Stanley, Dean Witter & Co. ....... 4.83 07/09/99 99,074,250
55,343,000 Repeat Offering Securitization Entity
Funding Inc. .......................... 4.83 07/23/99 54,726,710
61,000,000 Rio Tinto America Inc. .................. 4.80 07/09/99 60,435,292
73,000,000 Riverwoods Funding Corp. ................ 4.84 05/17/99 72,842,969
50,000,000 Salomon, Smith Barney Holdings, Inc. 4.84 06/16/99 49,690,778
100,000,000 Salomon, Smith Barney Holdings, Inc. 4.83 07/08/99 99,087,667
50,000,000 San Paolo U.S. Financial Co. ............ 4.80 08/05/99 49,357,333
43,000,000 Sigma Finance Corp. ..................... 4.95 05/21/99 42,881,750
125,000,000 Sigma Finance Corp. ..................... 4.92 06/08/99 124,350,833
32,000,000 Sigma Finance Corp. ..................... 4.85 06/23/99 31,771,511
74,889,000 Thames Asset Global Securitization ...... 4.84 07/06/99 74,225,858
25,000,000 Thames Asset Global Securitization ...... 4.83 07/06/99 24,778,625
27,766,000 Three Rivers Funding Corp. .............. 4.82 05/17/99 27,706,519
50,000,000 Tulip Funding Corp. ..................... 4.82 07/15/99 49,496,875
100,000,000 Variable Funding Capital Corp. .......... 4.93 05/03/99 99,972,611
25,000,000 Variable Funding Capital Corp. .......... 4.81 05/10/99 24,969,937
90,000,000 Variable Funding Capital Corp. .......... 4.87 06/24/99 89,342,550
25,000,000 Variable Funding Capital Corp. .......... 4.83 07/09/99 24,768,563
25,000,000 W C P Funding Inc. ...................... 4.82 06/16/99 24,846,028
- ----------------------------------------------------------------------------------------------------------------
Total Commercial Paper
(Cost $3,936,382,283) ................... 3,936,359,657
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
12
<PAGE>
- --------------------------------------------------------------------------------
Merrill Lynch Premier Institutional Fund
Schedule of Investments -- Continued
April 30, 1999
<TABLE>
<CAPTION>
==========================================================================================================
Interest Maturity Value
Face Amount Rate* Date (Note 1a)
==========================================================================================================
<S> <C> <C> <C> <C> <C>
Repurchase $150,000,000 Lanston (Aubrey G.) & Co. Inc.,
Agreements**
purchased on 04/30/99 .......... 4.94% 05/03/99 $ 150,000,000
- -- 1.5%
Total Repurchase Agreements
(Cost $150,000,000) ............. 150,000,000
- ----------------------------------------------------------------------------------------------------------
Total Investments -- 100.2%
(Cost $10,647,490,782) .......... 10,645,504,768
- ----------------------------------------------------------------------------------------------------------
Liabilities in Excess of Other
Assets -- (0.2%) ................ (17,621,949)
- ----------------------------------------------------------------------------------------------------------
Net Assets -- Equivalent to $1.00
Per Share on 10,629,868,833
Shares of Beneficial Interest
Outstanding -- 100.0% ........... $10,627,882,819
==========================================================================================================
</TABLE>
Note--Costs for federal income tax purposes are the same as those shown
above. At April 30, 1999, net unrealized depreciation amounted to $1,986,014
and is comprised of $448,408 in appreciation and $2,434,422 in depreciation.
*Commercial Paper and some U.S. Government and Agency Issues are traded 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, 1999. 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 collaterized by U.S. Government and Agency
Obligations.
D/N--Discount Notes
See Notes to Financial Statements.
13
<PAGE>
- --------------------------------------------------------------------------------
Merrill Lynch Premier Institutional Fund
Statement of Assets and Liabilities
April 30, 1999
================================================================================
<TABLE>
<S> <C>
Assets:
Total investments at value (identified cost $10,647,490,782) (Note 1a) ............ $10,645,504,768
Cash .............................................................................. 7,892,792
Interest receivable ............................................................... 53,737,821
Prepaid expense ................................................................... 191,926
---------------
Total assets ................................................................... 10,707,327,307
---------------
Liabilities:
Advisory fee payable (Note 2) ..................................................... 1,421,743
Payable for investments purchased ................................................. 73,500,000
Dividends payable ................................................................. 4,097,380
Accrued expenses .................................................................. 425,365
---------------
Total liabilities .............................................................. 79,444,488
---------------
Net Assets: (Equivalent to $1.00 per share, offering and redemption price, based on
10,629,868,833 shares of beneficial interest outstanding) ........................ $10,627,882,819
===============
</TABLE>
- --------------------------------------------------------------------------------
Merrill Lynch Premier Institutional Fund
Statement of Operations
For the Year Ended April 30, 1999
================================================================================
<TABLE>
<S> <C> <C>
Investment Income:
Interest and discount earned (Note 1d) ............................................ $481,191,519
------------
Expenses:
Investment advisory fee (Note 2) .................................................. 13,596,287
Registration fees ................................................................. 1,896,729
Accounting and custodian services ................................................. 416,828
Legal and audit fees .............................................................. 94,373
Trustees' fees (Note 5) ........................................................... 82,851
Printing and shareholder reports .................................................. 79,801
Dividend and transfer agency fees ................................................. 72,661
Insurance ......................................................................... 39,366
Miscellaneous ..................................................................... 39,227
------------
Total expense .................................................................. 16,318,123
------------
Net investment income .......................................................... 464,873,396
Realized and Unrealized Gain (Loss) on Investments:
Net realized gain from investment transactions .................... $ 928,397
Net unrealized depreciation of investments ........................ (1,036,026)
------------
Net realized and unrealized loss from investments .............................. (107,629)
------------
Net Increase in Net Assets Resulting From Operations .............................. $464,765,767
============
</TABLE>
See Notes to Financial Statements.
14
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
Merrill Lynch Premier Institutional Fund
Statement of Changes in Net Assets Year Ended April 30,
-----------------------------------
1999 1998
======================================================================================================
<S> <C> <C>
Increase in Net Assets:
Operations:
Net investment income ........................................... $ 464,873,396 $ 298,115,643
Net realized gain from investment transactions .................. 928,397 558,082
Net unrealized depreciation of investments ...................... (1,036,026) (13,174)
--------------- --------------
Net increase in net assets resulting from operations ............ 464,765,767 298,660,551
Total declared as dividends to shareholders (Note 4) ............ (465,801,793) (298,673,725)
Capital share transactions (Note 3) ............................. 3,984,396,212 3,821,339,552
--------------- --------------
Net increase in net assets ...................................... 3,983,360,186 3,821,326,378
Net Assets:
Beginning of period ............................................. 6,644,522,633 2,823,196,255
--------------- --------------
End of period ................................................... $10,627,882,819 $6,644,522,633
=============== ==============
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
Merrill Lynch Premier Institutional Fund
Financial Highlights Year Ended April 30, For the Period
------------------------------- January 27, 1997*
1999 1998 to April 30, 1997
================================================================================================================
<S> <C> <C> <C>
Net Asset Value, beginning of period ....................... $1.00 $1.00 $1.00
Income from Investment Operations:
Net investment income ..................................... .052 .055 .014
Less Distributions:
Dividends from net investment income ...................... (.052) (.055) (.014)
----- ----- -----
Net Asset Value, end of period ............................. $1.00 $1.00 $1.00
===== ===== =====
Total Return ............................................... 5.32% 5.69% 1.40%(1)
Ratios/Supplemental Data:
Net Assets, end of period (000) ........................... $10,627,883 $6,644,523 $2,823,196
Ratio of expenses to average net assets (before waiver) .18% .18% .18%(2)
Ratio of expenses to average net assets (after waiver) .... -- -- .17%(2)
Ratio of net investment income, including realized and
unrealized gains and losses, to average net assets
(before waiver) .......................................... 5.13% 5.55% 5.26%(2)
Ratio of net investment income, including realized and
unrealized gains and losses, to average net assets
(after waiver) ........................................... -- -- 5.27%(2)
</TABLE>
*Commencement of operations
(1) Cumulative total return
(2) On an annualized basis
See Notes to Financial Statements.
15
<PAGE>
- --------------------------------------------------------------------------------
Merrill Lynch Institutional Fund
Schedule of Investments
April 30, 1999
<TABLE>
<CAPTION>
========================================================================================================================
Interest Maturity Value
Face Amount Rate* Date (Note 1a)
========================================================================================================================
<S> <C> <C> <C> <C> <C>
U.S. $25,000,000 U.S. Treasury Bills ....................... 3.75% 10/14/99 $24,491,337
Government & 22,000,000 U.S. Treasury Bills ....................... 4.13 10/14/99 21,552,376
Agency 25,000,000 U.S. Treasury Bills ....................... 4.17 01/06/00 24,239,583
Issues -- 14.5% 13,000,000 U.S. Treasury Notes ....................... 6.88 08/31/99 13,089,375
12,500,000 U.S. Treasury Notes ....................... 5.88 11/15/99 12,699,219
50,000,000 U.S. Treasury Notes ....................... 5.63 12/31/99 50,281,250
10,000,000 U.S. Treasury Notes ....................... 5.38 01/31/00 10,042,578
12,500,000 U.S. Treasury Notes ....................... 7.75 01/31/00 12,769,531
13,000,000 U.S. Treasury Notes ....................... 5.88 02/15/00 13,105,625
25,000,000 U.S. Treasury Notes ....................... 5.50 03/31/00 25,156,250
25,000,000 U.S. Treasury Notes ....................... 5.63 04/30/00 25,181,640
12,500,000 U.S. Treasury Notes ....................... 6.25 05/31/00 12,679,688
15,000,000 U.S. Treasury Notes ....................... 5.38 07/31/00 15,084,375
22,500,000 U.S. Treasury Notes ....................... 4.50 09/30/00 22,362,892
10,000,000 U.S. Treasury Notes ....................... 4.63 11/30/00 9,952,344
30,000,000 U.S. Treasury Notes ....................... 4.50 01/31/01 29,770,314
20,000,000 U.S. Treasury Notes ....................... 4.88 03/31/01 19,962,500
25,000,000 Federal Farm Credit Banks ................. 4.77 07/01/99 24,992,500
25,000,000 Federal Home Loan Banks ................... 4.98 01/19/00 24,972,500
25,000,000 Federal Home Loan Banks ................... 4.98 02/16/00 24,980,000
24,000,000 Federal Home Loan Banks ................... 4.95 11/20/00 23,892,000
25,000,000 Federal Home Loan Mortgage Corp. .......... 5.88 05/19/00 25,007,500
28,000,000 Federal Home Loan Mortgage Corp. .......... 5.05 11/17/00 27,902,000
25,000,000 Federal Home Loan Mortgage Corp. .......... 5.18 11/24/00 24,953,125
12,500,000 Federal Home Loan Mortgage Corp. .......... 5.25 01/19/01 12,474,000
25,000,000 Federal Home Loan Mortgage Corp. .......... 5.15 01/26/01 24,913,750
70,000,000 Federal National Mortgage Assoc. .......... 4.98 05/12/99 70,000,000
50,000,000 Federal National Mortgage Assoc. .......... 6.00 09/02/99 50,160,000
25,000,000 Federal National Mortgage Assoc. .......... 5.21 01/26/01 24,933,000
21,870,000 Federal National Mortgage Assoc. .......... 5.41 03/22/01 21,860,815
25,000,000 Federal National Mortgage Assoc. .......... 5.38 04/06/01 24,978,500
9,000,000 Federal National Mortgage Assoc. .......... 5.30 04/17/01 8,983,170
20,000,000 Student Loan Marketing Assoc. ............. 5.89 11/17/99 20,094,400
25,000,000 Federal Farm Credit Banks D/N ............. 4.30 10/29/99 24,406,722
28,400,000 Federal Home Loan Banks D/N ............... 4.26 10/15/99 27,778,166
50,000,000 Federal National Mortgage Assoc. D/N 4.60 07/06/99 49,567,334
25,000,000 Federal National Mortgage Assoc. D/N 4.60 07/07/99 24,780,389
50,000,000 Federal National Mortgage Assoc. D/N 4.64 07/09/99 49,547,667
50,000,000 Federal National Mortgage Assoc. D/N 4.60 07/15/99 49,508,333
</TABLE>
See Notes to Financial Statements.
16
<PAGE>
- --------------------------------------------------------------------------------
Merrill Lynch Institutional Fund
Schedule of Investments -- Continued
April 30, 1999
<TABLE>
<CAPTION>
===========================================================================================================================
Interest Maturity Value
Face Amount Rate* Date (Note 1a)
===========================================================================================================================
<S> <C> <C> <C> <C> <C>
U.S. $15,000,000 Federal National Mortgage Assoc. D/N 4.70% 07/19/99 $ 14,844,633
Government & 75,000,000 Federal National Mortgage Assoc. D/N 4.53 08/16/99 73,947,833
Agency 25,000,000 Federal National Mortgage Assoc. D/N 4.61 11/22/99 24,329,479
Issues 50,000,000 Federal National Mortgage Assoc. D/N 4.66 12/13/99 48,521,583
(continued)
- ---------------------------------------------------------------------------------------------------------------------------
Total U.S. Government & Agency
Issues (Cost $1,166,080,164) .............. 1,164,750,276
- ---------------------------------------------------------------------------------------------------------------------------
U.S. 60,000,000 Federal Home Loan Banks ................... 4.90 08/12/99 59,990,059
Government 91,000,000 Federal Home Loan Banks ................... 4.99 09/02/99 90,984,542
Agency 25,000,000 Federal Home Loan Banks ................... 4.91 11/09/99 24,992,267
Issues -- 50,000,000 Federal Home Loan Banks ................... 4.91 11/12/99 49,984,240
Variable 50,000,000 Federal Home Loan Banks ................... 4.91 11/16/99 49,980,918
Rate -- 8.6% 30,000,000 Federal Home Loan Banks ................... 5.00 04/28/00 29,988,099
150,000,000 Federal Home Loan Mortgage Corp. .......... 4.96 04/14/00 149,928,484
100,000,000 Federal National Mortgage Assoc. .......... 4.86 07/30/99 99,979,283
44,000,000 Federal National Mortgage Assoc. .......... 4.96 10/27/99 43,989,848
55,000,000 Student Loan Marketing Assoc. ............. 4.86 01/12/00 54,992,900
40,000,000 Student Loan Marketing Assoc. ............. 4.77 02/02/00 39,992,714
- ---------------------------------------------------------------------------------------------------------------------------
Total U.S. Government Agency
Issues -- Variable Rate
(Cost $694,803,354) ....................... 694,803,354
- ---------------------------------------------------------------------------------------------------------------------------
Certificates of 25,000,000 Bank One, WI., N.A. ....................... 5.74 05/11/99 24,999,588
Deposit -- 0.6% 25,000,000 Chase Manhattan Bank ...................... 5.70 07/02/99 25,025,911
- ---------------------------------------------------------------------------------------------------------------------------
Total Certificates of Deposit
(Cost $49,996,741) ........................ 50,025,499
- ---------------------------------------------------------------------------------------------------------------------------
Certificate 75,000,000 Fleet National Bank, RI ................... 4.90 04/17/00 74,965,714
of Deposit --
Variable
Rate -- 0.9%
- ---------------------------------------------------------------------------------------------------------------------------
Total Certificate of Deposit --
Variable Rate (Cost $74,965,714) .......... 74,965,714
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
17
<PAGE>
- --------------------------------------------------------------------------------
Merrill Lynch Institutional Fund
Schedule of Investments -- Continued
April 30, 1999
<TABLE>
<CAPTION>
=====================================================================================================================
Interest Maturity Value
Face Amount Rate* Date (Note 1a)
=====================================================================================================================
<S> <C> <C> <C> <C> <C>
Euro $42,500,000 Abbey National Treasury Services PLC 5.03% 10/29/99 $42,485,975
Certificates of 42,500,000 Abbey National Treasury Services PLC 4.97 11/01/99 42,500,000
Deposit -- 25,000,000 Svenska Handelsbanken, London .......... 4.94 08/19/99 24,992,143
Variable
Rate -- 1.4%
- ---------------------------------------------------------------------------------------------------------------------
Total Euro Certificates of Deposit --
Variable Rate (Cost $109,992,143) ...... 109,978,118
- ---------------------------------------------------------------------------------------------------------------------
Yankee 25,000,000 Bank Austria, NY ....................... 5.25 03/01/00 25,000,759
Certificates of 40,000,000 Bank of Montreal, Chicago .............. 5.69 06/15/99 39,998,969
Deposit -- 6.1% 25,000,000 Bayerische Hypo-und Vereinsbank
AG, NY ............................... 5.27 03/03/00 25,005,122
20,000,000 Canadian Imperial Bank of
Commerce, NY ........................... 5.71 06/21/99 19,998,394
24,000,000 Canadian Imperial Bank of
Commerce, NY ........................... 5.71 06/23/99 23,997,997
50,000,000 Commerzbank AG, NY ..................... 5.09 02/17/00 49,926,245
25,000,000 Commerzbank AG, NY ..................... 5.19 02/25/00 24,991,314
25,000,000 Commerzbank AG, NY ..................... 5.17 04/24/00 24,986,375
75,000,000 Deutsche Bank AG, NY ................... 5.10 04/19/00 74,909,596
40,000,000 Deutsche Bank AG, NY ................... 5.13 04/20/00 39,963,168
15,000,000 Landesbank Hessen-Thuringen
Girozentrale, NY ..................... 5.22 02/29/00 14,998,419
25,000,000 Societe Generale, NY ................... 5.18 02/28/00 24,990,232
25,000,000 Societe Generale, NY ................... 5.22 02/28/00 24,998,373
25,000,000 Societe Generale, NY ................... 5.28 03/01/00 25,006,791
25,000,000 Societe Generale, NY ................... 5.29 03/03/00 25,009,170
25,000,000 UBS AG, Stamford ....................... 5.20 02/29/00 24,994,360
- ---------------------------------------------------------------------------------------------------------------------
Total Yankee Certificates of
Deposit (Cost $488,785,100) ............ 488,775,284
- ---------------------------------------------------------------------------------------------------------------------
Yankee 50,000,000 Bank of Montreal, Chicago .............. 4.88 07/22/99 49,993,418
Certificates of 95,000,000 Barclays Bank PLC, NY .................. 4.78 06/01/99 94,992,913
Deposit -- 50,000,000 Societe Generale, NY ................... 4.94 03/03/00 49,975,119
Variable
Rate -- 2.4%
- ---------------------------------------------------------------------------------------------------------------------
Total Yankee Certificates of
Deposit -- Variable Rate
(Cost $194,961,450) .................... 194,961,450
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
18
<PAGE>
- --------------------------------------------------------------------------------
Merrill Lynch Institutional Fund
Schedule of Investments -- Continued
April 30, 1999
<TABLE>
<CAPTION>
========================================================================================================================
Interest Maturity Value
Face Amount Rate* Date (Note 1a)
========================================================================================================================
<S> <C> <C> <C> <C> <C>
Time $100,000,000 Deutsche Bank, Grand Cayman .............. 4.94% 05/03/99 $100,000,000
Deposits -- 75,000,000 State Street Bank & Trust ................ 4.81 05/03/99 75,000,000
2.8% 49,500,000 SunTrust Banks, Grand Cayman ............. 5.00 05/03/99 49,500,000
- ------------------------------------------------------------------------------------------------------------------------
Total Time Deposits
(Cost $224,500,000) ...................... 224,500,000
- ------------------------------------------------------------------------------------------------------------------------
Bank Notes -- 39,000,000 First National Bank of Chicago ........... 5.73 05/19/99 38,999,127
0.5%
- ------------------------------------------------------------------------------------------------------------------------
Total Bank Notes
(Cost $38,999,127) ....................... 38,999,127
- ------------------------------------------------------------------------------------------------------------------------
Bank Notes -- 50,000,000 American Express Centurion Bank .......... 4.95 05/03/00 50,000,000
Variable 90,000,000 Comerica Bank ............................ 4.88 05/01/00 89,938,439
Rate -- 8.2% 19,000,000 FCC National Bank ........................ 4.81 05/12/99 18,999,665
22,000,000 First Tennessee Bank N.A. ................ 4.89 06/09/99 21,998,616
27,000,000 First Union National Bank ................ 4.94 08/30/99 27,000,000
95,000,000 First Union National Bank ................ 4.94 09/01/99 95,000,000
50,000,000 First Union National Bank ................ 5.02 11/16/99 49,997,274
100,000,000 Fleet National Bank ...................... 4.80 05/11/99 99,998,128
50,000,000 Harris Trust & Savings ................... 4.91 04/05/00 49,981,695
25,000,000 National City Bank, Ohio ................. 4.88 03/29/00 24,984,394
11,000,000 NationsBank, N.A. ........................ 5.17 02/09/00 11,023,441
125,000,000 NationsBank, N.A. ........................ 4.91 04/05/00 124,954,237
- ------------------------------------------------------------------------------------------------------------------------
Total Bank Notes -- Variable Rate
(Cost $663,871,971) ...................... 663,875,889
- ------------------------------------------------------------------------------------------------------------------------
Corporate 19,000,000 Associates Corp. of North
Notes -- 0.2% America ................................ 8.30 11/23/99 19,328,890
- ------------------------------------------------------------------------------------------------------------------------
Total Corporate Notes
(Cost $19,338,756) ....................... 19,328,890
- ------------------------------------------------------------------------------------------------------------------------
Corporate 50,000,000 Abbey National Treasury Services PLC 4.79 07/20/99 49,991,233
Notes -- 25,000,000 Abbey National Treasury Services PLC 4.85 08/17/99 24,989,500
Variable 100,000,000 Abbey National Treasury Services PLC 4.94 08/17/99 99,958,000
Rate -- 11.5% 28,000,000 CIT Group Holdings Inc. .................. 4.80 05/24/99 27,998,795
15,000,000 CIT Group Holdings Inc. .................. 4.83 08/30/99 15,000,000
50,000,000 CIT Group Holdings Inc. .................. 4.89 03/27/00 49,760,630
40,000,000 Ford Motor Credit Corp. .................. 4.95 05/05/00 40,000,000
22,000,000 General Electric Capital Corp. ........... 4.82 06/03/99 21,999,024
25,000,000 General Electric Capital Corp. ........... 4.90 06/03/99 24,998,891
50,000,000 General Electric Capital Corp. ........... 4.90 06/04/99 49,997,486
</TABLE>
See Notes to Financial Statements.
19
<PAGE>
- --------------------------------------------------------------------------------
Merrill Lynch Institutional Fund
Schedule of Investments -- Continued
April 30, 1999
<TABLE>
<CAPTION>
======================================================================================================================
Interest Maturity Value
Face Amount Rate* Date (Note 1a)
======================================================================================================================
<S> <C> <C> <C> <C> <C>
Corporate $25,000,000 General Electric Capital Corp. ........... 4.95% 04/12/00 $25,001,125
Notes -- 50,000,000 General Motors Acceptance Corp. .......... 4.97 07/06/99 49,995,639
Variable 100,000,000 General Motors Acceptance Corp. .......... 4.89 07/06/99 99,986,600
Rate 23,000,000 General Motors Acceptance Corp. .......... 4.91 08/26/99 22,994,250
(continued) 30,500,000 General Motors Acceptance Corp. .......... 5.17 12/01/00 30,493,900
19,000,000 General Motors Acceptance Corp. .......... 5.05 02/27/01 19,000,000
17,000,000 Goldman Sachs Group L.P. ................. 5.08 05/12/00 16,996,600
22,000,000 Household Finance Corp. .................. 4.95 09/13/99 21,997,800
40,000,000 Liberty Lighthouse US Capital Co., LLC 4.98 10/08/99 40,001,200
50,000,000 Liberty Lighthouse US Capital Co., LLC 4.98 10/15/99 50,001,500
20,000,000 Pepsico Inc. ............................. 4.81 08/19/99 19,989,400
41,000,000 Racers 1998-MM-12-3 ...................... 5.03 01/21/00 41,000,000
35,000,000 Racers 1998-MM-7-1 ....................... 4.92 08/13/99 35,000,000
20,000,000 Xerox Capital (Europe) PLC ............... 4.89 08/20/99 19,996,000
28,000,000 Xerox Capital (Europe) PLC ............... 4.87 04/06/00 27,978,045
- ---------------------------------------------------------------------------------------------------------------------
Total Corporate Notes -- Variable Rate
(Cost $925,367,465) ...................... 925,125,618
- ---------------------------------------------------------------------------------------------------------------------
Euro 50,000,000 BankAmerica Corporation .................. 8.38 12/15/99 50,910,000
Notes -- 0.6%
- ---------------------------------------------------------------------------------------------------------------------
Total Euro Notes
(Cost $50,972,460) ....................... 50,910,000
- ---------------------------------------------------------------------------------------------------------------------
Euro 10,000,000 BankAmerica Corporation .................. 5.42 03/01/00 10,038,000
Notes --
Variable
Rate -- 0.1%
- ---------------------------------------------------------------------------------------------------------------------
Total Euro Notes --Variable Rate
(Cost $10,031,849) ....................... 10,038,000
- ---------------------------------------------------------------------------------------------------------------------
Master 185,000,000 Goldman Sachs Group L.P. ................. 4.83 11/18/99 185,000,000
Notes -- 89,000,000 Jackson National Life Insurance Co. 5.03 02/01/00 89,000,000
Variable 135,090,000 J.P. Morgan Securities Inc. .............. 4.83 10/01/99 135,090,000
Rate -- 5.6% 22,000,000 Security Life of Denver Insurance Co. 5.03 03/23/00 22,000,000
20,000,000 TransAmerica Life Insurance &
Annuity Co. ............................ 5.03 03/24/00 20,000,000
- ---------------------------------------------------------------------------------------------------------------------
Total Master Notes -- Variable Rate
(Cost $451,090,000) ...................... 451,090,000
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
20
<PAGE>
- --------------------------------------------------------------------------------
Merrill Lynch Institutional Fund
Schedule of Investments -- Continued
April 30, 1999
<TABLE>
<CAPTION>
========================================================================================================================
Interest Maturity Value
Face Amount Rate* Date (Note 1a)
========================================================================================================================
<S> <C> <C> <C> <C> <C>
Commercial $50,000,000 Apreco Inc. ............................... 4.87% 06/01/99 $49,790,319
Paper -- 36.1% 35,000,000 Apreco Inc. ............................... 4.85 06/11/99 34,806,674
15,000,000 Apreco Inc. ............................... 4.85 06/14/99 14,911,083
30,000,000 Arco British Ltd .......................... 4.81 07/13/99 29,706,175
86,700,000 Atlantis One Funding Corp. ................ 4.82 05/11/99 86,583,918
23,000,000 Atlantis One Funding Corp. ................ 4.80 05/13/99 22,963,200
19,291,000 Atlantis One Funding Corp. ................ 4.82 08/11/99 19,027,549
25,000,000 Bank of Scotland Treasury Services
PLC ..................................... 4.81 05/03/99 24,993,319
50,000,000 BankAmerica Corp. ......................... 4.79 10/05/99 48,948,972
50,000,000 Bear Stearns Companies Inc. ............... 4.85 07/12/99 49,517,000
40,000,000 Concord Minutemen Capital Co. LLC 4.82 07/09/99 39,629,700
45,000,000 Concord Minutemen Capital Co. LLC 4.86 07/19/99 44,523,038
100,000,000 Corporate Asset Funding Co. Inc. .......... 4.83 06/21/99 99,315,750
50,000,000 Corporate Receivables Corp. ............... 4.84 06/17/99 49,684,056
100,000,000 Corporate Receivables Corp. ............... 4.84 06/23/99 99,287,444
25,000,000 Corporate Receivables Corp. ............... 4.83 07/08/99 24,771,917
20,000,000 Credit Suisse First Boston Inc. ........... 4.83 07/09/99 19,814,850
50,000,000 CXC Inc. .................................. 4.84 06/14/99 49,704,222
43,000,000 CXC Inc. .................................. 4.84 07/09/99 42,601,928
50,000,000 CXC Inc. .................................. 4.82 07/12/99 49,517,000
50,000,000 CXC Inc. .................................. 4.82 07/16/99 49,490,167
40,000,000 DaimlerChrysler North America
Holdings Corp. .......................... 4.85 06/02/99 39,827,556
75,000,000 DaimlerChrysler North America
Holdings Corp. .......................... 4.85 07/06/99 74,335,875
50,000,000 DaimlerChrysler North America
Holdings Corp. .......................... 4.83 07/14/99 49,503,583
25,000,000 DaimlerChrysler North America
Holdings Corp. .......................... 4.83 07/15/99 24,748,438
50,000,000 DaimlerChrysler North America
Holdings Corp. .......................... 4.82 08/19/99 49,263,611
50,000,000 DaimlerChrysler North America
Holdings Corp. .......................... 4.81 08/20/99 49,256,917
50,000,000 Delaware Funding Corp. .................... 4.84 06/04/99 49,771,444
100,000,000 Edison Asset Securitization LLC ........... 4.85 06/30/99 99,195,000
72,000,000 Eureka Securitization Inc. ................ 4.82 06/17/99 71,546,920
14,000,000 Finova Capital Corp. ...................... 4.84 05/14/99 13,975,531
</TABLE>
See Notes to Financial Statements.
21
<PAGE>
- --------------------------------------------------------------------------------
Merrill Lynch Institutional Fund
Schedule of Investments -- Continued
April 30, 1999
<TABLE>
<CAPTION>
========================================================================================================================
Interest Maturity Value
Face Amount Rate* Date (Note 1a)
========================================================================================================================
<S> <C> <C> <C> <C> <C>
Commercial $23,200,000 Finova Capital Corp. ..................... 4.91% 06/17/99 $23,051,282
Paper 11,800,000 Finova Capital Corp. ..................... 4.85 06/18/99 11,723,693
(continued) 25,000,000 Finova Capital Corp. ..................... 4.85 08/12/99 24,655,236
100,000,000 General Electric Capital Corp. ........... 4.81 08/16/99 98,567,389
73,889,000 Grand Funding Corp. ...................... 4.83 06/03/99 73,561,857
30,682,000 Grand Funding Corp. ...................... 4.85 06/09/99 30,520,792
55,429,000 Grand Funding Corp. ...................... 4.83 07/09/99 54,915,866
40,000,000 Lehman Brothers Holdings Inc. ............ 5.04 06/08/99 39,787,200
70,000,000 Mont Blanc Capital Corp. ................. 4.84 06/04/99 69,680,022
71,000,000 Mont Blanc Capital Corp. ................. 4.87 06/04/99 70,673,439
100,000,000 Morgan Stanley, Dean Witter & Co. ........ 4.83 07/09/99 99,074,250
30,199,000 Park Avenue Receivables Corp. ............ 4.87 05/11/99 30,158,148
79,308,000 Park Avenue Receivables Corp. ............ 4.82 05/27/99 79,031,920
48,660,000 Preferred Receivables Funding Corp. 4.86 05/13/99 48,581,171
50,000,000 Prudential Funding Corp. ................. 4.80 08/10/99 49,323,861
100,000,000 Salomon, Smith Barney Holdings Inc. ...... 4.84 06/03/99 99,556,333
50,000,000 Salomon, Smith Barney Holdings Inc. ...... 4.84 06/16/99 49,690,778
50,000,000 San Paolo U.S. Financial Co. ............. 4.80 08/05/99 49,357,333
25,000,000 Sigma Finance Corp. ...................... 4.85 06/02/99 24,892,222
47,000,000 Sigma Finance Corp. ...................... 4.92 06/08/99 46,755,913
20,000,000 Sigma Finance Corp. ...................... 4.85 06/10/99 19,892,222
50,000,000 Sigma Finance Corp. ...................... 4.85 06/21/99 49,656,458
18,000,000 Sigma Finance Corp. ...................... 4.85 06/23/99 17,871,475
40,000,000 Sigma Finance Corp. ...................... 4.88 06/30/99 39,678,000
57,193,000 Thames Asset Global Securitization ....... 4.85 05/17/99 57,069,717
12,339,000 Thames Asset Global Securitization ....... 4.88 05/20/99 12,307,220
30,000,000 Thames Asset Global Securitization ....... 4.83 07/06/99 29,734,350
16,200,000 TransAmerica Financial Corp. ............. 4.81 07/23/99 16,019,600
</TABLE>
See Notes to Financial Statements.
22
<PAGE>
- --------------------------------------------------------------------------------
Merrill Lynch Institutional Fund
Schedule of Investments -- Continued
April 30, 1999
<TABLE>
<CAPTION>
========================================================================================================================
Interest Maturity Value
Face Amount Rate* Date (Note 1a)
========================================================================================================================
<S> <C> <C> <C> <C> <C>
Commercial $48,811,000 Tulip Funding Corp. ..................... 4.82% 07/15/99 $48,319,839
Paper 21,430,000 Variable Funding Capital Corp. .......... 4.82 06/17/99 21,295,146
(continued) 50,000,000 Variable Funding Capital Corp. .......... 4.83 07/09/99 49,537,125
- ------------------------------------------------------------------------------------------------------------------------
Total Commercial Paper
(Cost $2,905,957,995) ................... 2,905,953,013
- ------------------------------------------------------------------------------------------------------------------------
Total Investments -- 100.1%
(Cost $8,069,714,289) ................... 8,068,080,232
- ------------------------------------------------------------------------------------------------------------------------
Liabilities in Excess of Other
Assets -- (0.1%) ........................ (7,969,272)
- ------------------------------------------------------------------------------------------------------------------------
Net Assets -- Equivalent to $1.00
Per Share on 8,061,745,017 Shares
of Beneficial Interest
Outstanding -- 100.0% ................... $8,060,110,960
========================================================================================================================
</TABLE>
Note--Costs for federal income tax purposes are the same as those shown above.
At April 30, 1999, net unrealized depreciation amounted to $1,634,057 and is
comprised of $361,935 in appreciation and $1,995,992 in depreciation.
*Commercial Paper and some U.S. Government and Agency Issues are traded 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, 1999. For variable rate instruments, the next date on which
the interest rate is to be adjusted is deemed the maturity date for valuation.
D/N--Discount Notes
See Notes to Financial Statements.
23
<PAGE>
- --------------------------------------------------------------------------------
Merrill Lynch Institutional Fund
Statement of Assets and Liabilities
April 30, 1999
================================================================================
<TABLE>
<S> <C>
Assets:
Total investments at value (identified cost $8,069,714,289) (Note 1a) ........ $8,068,080,232
Cash ......................................................................... 5,280,124
Interest receivable .......................................................... 41,563,169
Prepaid expense .............................................................. 164,621
--------------
Total assets .............................................................. 8,115,088,146
--------------
Liabilities:
Advisory fee payable (Note 2) ................................................ 1,393,964
Payable for investments purchased ............................................ 50,000,000
Dividends payable ............................................................ 2,949,068
Accrued expenses ............................................................. 634,154
--------------
Total liabilities ......................................................... 54,977,186
--------------
Net Assets: (Equivalent to $1.00 per share, offering and redemption price,
based on 8,061,745,017 shares of beneficial interest outstanding) ........... $8,060,110,960
==============
</TABLE>
- --------------------------------------------------------------------------------
Merrill Lynch Institutional Fund
Statement of Operations
For the Year Ended April 30, 1999
================================================================================
<TABLE>
<S> <C> <C>
Investment Income:
Interest and discount earned (Note 1d) .................................. $430,110,671
------------
Expenses:
Investment advisory fee (Note 2) ....................... $ 26,504,478
Dividend and transfer agency fees ...................... 1,253,431
Registration fees ...................................... 1,062,257
Accounting and custodian services ...................... 400,450
Legal and audit fees ................................... 104,780
Printing and shareholder reports ....................... 102,056
Trustees' fees (Note 5) ................................ 78,207
Insurance .............................................. 42,129
Miscellaneous .......................................... 84,409
-------------
Total expense ....................................... 29,632,197
Waived investment advisory fee (Note 2) ................ (10,424,799) 19,207,398
------------- ------------
Net investment income ................................................ 410,903,273
Realized and Unrealized Gain on Investments:
Net realized gain from investment transactions ......... 673,370
Net unrealized depreciation of investments ............. (364,199)
-------------
Net realized and unrealized gain from investments .................... 309,171
------------
Net Increase in Net Assets Resulting From Operations .................... $411,212,444
============
</TABLE>
See Notes to Financial Statements.
24
<PAGE>
- --------------------------------------------------------------------------------
Merrill Lynch Institutional Fund
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
=========================================================================================================
Year Ended April 30,
-----------------------------------
1999 1998
----------------- ---------------
<S> <C> <C>
Increase in Net Assets:
Operations:
Net investment income ............................................. $ 410,903,273 $ 358,043,491
Net realized gain from investment transactions .................... 673,370 235,380
Net unrealized appreciation (depreciation) of investments ......... (364,199) 2,160,230
-------------- --------------
Net increase in net assets resulting from operations .............. 411,212,444 360,439,101
Total declared as dividends to shareholders (Note 4) .............. (411,576,643) (358,278,871)
Capital share transactions (Note 3) ............................... 688,050,212 1,172,386,778
-------------- --------------
Net increase in net assets ........................................ 687,686,013 1,174,547,008
Net Assets:
Beginning of year ................................................. 7,372,424,947 6,197,877,939
-------------- --------------
End of year ....................................................... $8,060,110,960 $7,372,424,947
============== ==============
</TABLE>
- --------------------------------------------------------------------------------
Merrill Lynch Institutional Fund
Financial Highlights
<TABLE>
<CAPTION>
========================================================================================================================
Year Ended April 30,
-------------------------------------------------------------------------
1999 1998 1997 1996 1995
-------------- -------------- -------------- -------------- -------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, beginning of period ......... $1.00 $1.00 $1.00 $1.00 $1.00
Income from Investment Operations:
Net investment income ....................... .051 .054 .052 .056 .050
Less Distributions:
Dividends from net investment
income ..................................... (.051) (.054) (.052) (.056) (.050)
----- ----- ----- ----- -----
Net Asset Value, end of period ............... $1.00 $1.00 $1.00 $1.00 $1.00
===== ===== ===== ===== =====
Total Return ................................. 5.25% 5.57% 5.34% 5.81% 5.11%
Ratios/Supplemental Data:
Net Assets, end of period (000) ............. $8,060,111 $7,372,425 $6,197,878 $7,615,126 $6,580,086
Ratio of expenses to average net
assets (before waiver) ..................... .37% .38% .38% .37% .37%
Ratio of expenses to average net
assets (after waiver) ...................... .24% .25% .25% .24% .24%
Ratio of net investment income,
including realized and unrealized
gains and losses, to average net
assets (before waiver) ..................... 4.98% 5.34% 5.12% 5.42% 5.00%
Ratio of net investment income,
including realized and unrealized
gains and losses, to average net
assets (after waiver) ...................... 5.11% 5.47% 5.25% 5.55% 5.13%
</TABLE>
See Notes to Financial Statements.
25
<PAGE>
- --------------------------------------------------------------------------------
Merrill Lynch Rated Institutional Fund
Schedule of Investments
April 30, 1999
<TABLE>
<CAPTION>
====================================================================================================================
Interest Maturity Value
Face Amount Rate* Date (Note 1a)
====================================================================================================================
<S> <C> <C> <C> <C> <C>
U.S. $2,000,000 U.S. Treasury Notes .................. 6.88% 08/31/99 $2,013,750
Government & 2,000,000 U.S. Treasury Notes .................. 5.63 04/30/00 2,014,531
Agency 2,475,000 Federal Home Loan Banks .............. 8.38 10/25/99 2,514,600
Issues -- 6.0% 1,000,000 Federal Home Loan Mortgage Corp. 5.05 11/17/00 996,500
10,000,000 Federal National Mortgage Assoc. 4.98 05/12/99 10,000,000
500,000 Federal National Mortgage Assoc. 5.77 06/28/00 500,430
3,000,000 Federal National Mortgage Assoc. 5.41 03/22/01 2,998,740
5,300,000 Federal National Mortgage Assoc.
D/N ................................ 4.70 07/19/99 5,245,104
- --------------------------------------------------------------------------------------------------------------------
Total U.S. Government & Agency Issues
(Cost $26,293,107).................... 26,283,655
- --------------------------------------------------------------------------------------------------------------------
U.S. 20,000,000 Federal Home Loan Banks .............. 4.99 09/02/99 19,996,603
Government 4,000,000 Federal Home Loan Banks .............. 4.91 11/09/99 3,998,763
Agency 2,000,000 Federal Home Loan Banks .............. 4.91 11/12/99 1,999,369
Issues -- 5,000,000 Federal National Mortgage Assoc. 4.86 07/30/99 4,998,964
Variable
Rate -- 7.1%
- --------------------------------------------------------------------------------------------------------------------
Total U.S. Government Agency Issues --
Variable Rate (Cost $30,993,699) 30,993,699
- --------------------------------------------------------------------------------------------------------------------
Euro 1,500,000 Abbey National Treasury Services PLC 5.03 10/29/99 1,500,000
Certificates of 1,500,000 Abbey National Treasury Services PLC 4.97 11/01/99 1,500,000
Deposit --
Variable
Rate -- 0.7%
- --------------------------------------------------------------------------------------------------------------------
Total Euro Certificates of Deposit --
Variable Rate (Cost $3,000,000) ...... 3,000,000
- --------------------------------------------------------------------------------------------------------------------
Yankee 1,000,000 Canadian Imperial Bank of
Certificates of Commerce, NY ....................... 5.71 06/23/99 999,916
Deposit -- 3.7% 5,000,000 Societe Generale, NY ................. 5.16 02/22/00 4,997,094
10,000,000 Societe Generale, NY ................. 5.22 02/28/00 9,999,349
- --------------------------------------------------------------------------------------------------------------------
Total Yankee Certificates of
Deposit (Cost $15,996,149) ........... 15,996,359
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
26
<PAGE>
- --------------------------------------------------------------------------------
Merrill Lynch Rated Institutional Fund
Schedule of Investments -- Continued
April 30, 1999
<TABLE>
<CAPTION>
====================================================================================================================
Interest Maturity Value
Face Amount Rate* Date (Note 1a)
====================================================================================================================
<S> <C> <C> <C> <C> <C>
Yankee $ 5,000,000 Bank of Montreal, Chicago ............ 4.82% 07/15/99 $ 4,999,499
Certificates of 15,000,000 Societe Generale, NY ................. 4.87 03/03/00 14,992,536
Deposit --
Variable
Rate -- 4.6%
- ------------------------------------------------------------------------------------------------------------------
Total Yankee Certificates of
Deposit --Variable Rate
(Cost $19,992,035) ................... 19,992,035
- ------------------------------------------------------------------------------------------------------------------
Time 15,000,000 Chase Manhattan Bank ................. 5.00 05/03/99 15,000,000
Deposits -- 20,000,000 Deutsche Bank AG, Grand Cayman 4.94 05/03/99 20,000,000
12.9% 21,292,000 SunTrust Bank, Grand Cayman .......... 5.00 05/03/99 21,292,000
- ------------------------------------------------------------------------------------------------------------------
Total Time Deposits
(Cost $56,292,000) ................... 56,292,000
- ------------------------------------------------------------------------------------------------------------------
Bank 5,000,000 Bank One, Texas, N.A. ................ 5.88 08/02/99 5,009,500
Notes -- 1.1%
- ------------------------------------------------------------------------------------------------------------------
Total Bank Notes
(Cost $5,002,121) .................... 5,009,500
- ------------------------------------------------------------------------------------------------------------------
Bank Notes -- 10,000,000 First Union National Bank ............ 4.94 09/01/99 10,000,000
Variable 5,000,000 NationsBank N.A. ..................... 5.17 02/09/00 5,010,655
Rate -- 3.4%
- ------------------------------------------------------------------------------------------------------------------
Total Bank Notes -- Variable
Rate (Cost $15,008,874) .............. 15,010,655
- ------------------------------------------------------------------------------------------------------------------
Corporate 1,000,000 General Motors Acceptance Corp. 6.05 10/04/99 1,003,820
Notes -- 0.2%
- ------------------------------------------------------------------------------------------------------------------
Total Corporate Notes
(Cost $1,002,305) .................... 1,003,820
- ------------------------------------------------------------------------------------------------------------------
Corporate 5,000,000 Abbey National Treasury Services PLC 4.87 07/15/99 4,999,248
Notes -- 15,000,000 CIT Group Holdings Inc. .............. 4.83 08/30/99 15,000,000
Variable 2,500,000 Ford Motor Credit Corp. .............. 4.95 05/05/00 2,500,000
Rate -- 16.6% 5,000,000 General Electric Capital Corp. ....... 5.03 09/03/99 5,000,500
5,000,000 General Electric Capital Corp. ....... 4.95 04/12/00 5,000,225
1,000,000 General Motors Acceptance Corp. ...... 4.91 08/26/99 999,750
10,000,000 General Motors Acceptance Corp. ...... 4.90 10/08/99 9,997,400
1,500,000 General Motors Acceptance Corp. ...... 5.17 12/01/00 1,499,700
2,000,000 Household Finance Corp. .............. 4.95 09/13/99 1,999,800
</TABLE>
See Notes to Financial Statements.
27
<PAGE>
- --------------------------------------------------------------------------------
Merrill Lynch Rated Institutional Fund
Schedule of Investments -- Continued
April 30, 1999
<TABLE>
<CAPTION>
======================================================================================================================
Interest Maturity Value
Face Amount Rate* Date (Note 1a)
======================================================================================================================
<S> <C> <C> <C> <C> <C>
Corporate $14,000,000 Liberty Lighthouse US Capital Co., LLC 4.98% 10/08/99 $14,000,420
Notes -- 5,000,000 Pepsico Inc. ............................ 4.81 08/19/99 4,997,350
Variable Rate 3,000,000 Racers 1998-MM-12-3 ..................... 5.03 01/21/00 3,000,000
(continued) 1,000,000 Racers 1998-MM-7-1 ...................... 4.92 08/13/99 1,000,000
2,700,000 Xerox Capital (Europe) PLC .............. 4.89 08/20/99 2,699,460
- ----------------------------------------------------------------------------------------------------------------------
Total Corporate Notes -- Variable Rate
(Cost $72,687,218) ...................... 72,693,853
- ----------------------------------------------------------------------------------------------------------------------
Euro 10,000,000 BankAmerica Corp. ....................... 8.38 12/15/99 10,182,000
Notes -- 2.3%
- ----------------------------------------------------------------------------------------------------------------------
Total Euro Notes
(Cost $10,194,492) ...................... 10,182,000
- ----------------------------------------------------------------------------------------------------------------------
Master Notes -- 18,000,000 Goldman Sachs Group L.P. ................ 4.83 11/30/99 18,000,000
Variable 1,000,000 John Hancock Mutual Life
Rate -- 9.2% Insurance Co. ......................... 4.98 07/30/99 1,000,000
10,000,000 Jackson National Life Insurance Co. 5.03 02/01/00 10,000,000
1,500,000 Security Life of Denver Insurance Co. 5.03 03/23/00 1,500,000
10,000,000 Transamerica Life Insurance &
Annuity Co. ........................... 5.03 03/24/00 10,000,000
- ----------------------------------------------------------------------------------------------------------------------
Total Master Notes -- Variable Rate
(Cost $40,500,000) ...................... 40,500,000
- ----------------------------------------------------------------------------------------------------------------------
Commercial 21,000,000 Amsterdam Funding Corp. ................. 4.83 05/05/99 20,988,730
Paper -- 31.6% 18,000,000 Apreco Inc. ............................. 4.83 07/20/99 17,806,800
20,961,000 Atlantis One Funding Corp. .............. 4.80 05/13/99 20,927,463
10,000,000 Bear Stearns Companies Inc. ............. 4.85 07/12/99 9,903,400
6,000,000 General Electric Capital Corp. .......... 4.81 08/16/99 5,914,043
</TABLE>
See Notes to Financial Statements.
28
<PAGE>
- --------------------------------------------------------------------------------
Merrill Lynch Rated Institutional Fund
Schedule of Investments -- Continued
April 30, 1999
<TABLE>
<CAPTION>
=====================================================================================================================
Interest Maturity Value
Face Amount Rate* Date (Note 1a)
=====================================================================================================================
<S> <C> <C> <C> <C> <C>
Commercial $13,000,000 Grand Funding Corp. .................... 4.83% 05/07/99 $ 12,989,535
Paper 15,000,000 Lehman Brothers Holdings Inc. .......... 5.04 06/08/99 14,920,200
(continued) 35,000,000 Sigma Finance Corp. .................... 4.92 06/08/99 34,818,233
- ---------------------------------------------------------------------------------------------------------------------
Total Commercial Paper
(Cost $138,268,183) .................... 138,268,404
- ---------------------------------------------------------------------------------------------------------------------
Total Investments -- 99.4%
(Cost $435,230,183) .................... 435,225,980
- ---------------------------------------------------------------------------------------------------------------------
Other Assets Less
Liabilities -- 0.6% .................... 2,438,092
- ---------------------------------------------------------------------------------------------------------------------
Net Assets -- Equivalent to $1.00
Per Share on 437,668,275 Shares
of Beneficial Interest Outstanding -- 100.0% $437,664,072
=====================================================================================================================
</TABLE>
Note--Costs for federal income tax purposes are the same as those shown above.
At April 30, 1999, net unrealized depreciation amounted to $4,203 and is
comprised of $22,893 of appreciation and $27,096 in depreciation.
*Commercial Paper and some U.S. Government and Agency Issues are traded on a
discount basis; the interest rate shown is the discount rate paid at the time
of the 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, 1999. For variable rate instruments, the next date on which
the interest rate is to be adjusted is deemed the maturity date for valuation.
D/N--Discount Notes
See Notes to Financial Statements.
29
<PAGE>
- --------------------------------------------------------------------------------
Merrill Lynch Rated Institutional Fund
Statement of Assets and Liabilities
April 30, 1999
<TABLE>
<S> <C>
======================================================================================================
Assets:
Total investments at value (identified cost $435,230,183) (Note 1a) ................... $435,225,980
Cash .................................................................................. 698,114
Interest receivable ................................................................... 1,943,645
Prepaid expense ....................................................................... 87,992
------------
Total assets ....................................................................... 437,955,731
------------
Liabilities:
Advisory fee payable (Note 2) ......................................................... 81,581
Accrued expenses ...................................................................... 140,928
Dividends payable ..................................................................... 69,150
------------
Total liabilities .................................................................. 291,659
------------
Net Assets: (Equivalent to $1.00 per share, offering and redemption price,
based on 437,668,275 shares of beneficial interest outstanding) ...................... $437,664,072
============
</TABLE>
- --------------------------------------------------------------------------------
Merrill Lynch Rated Institutional Fund
Statement of Operations
For the Period June 15, 1998 (Commencement of Operations) to April 30, 1999
<TABLE>
<S> <C> <C>
======================================================================================
Investment Income:
Interest and discount earned (Note 1d) ............................... $18,768,749
-----------
Expenses:
Investment advisory fee (Note 2) ....................... $ 719,585
Registration fees ...................................... 127,906
Accounting and custodian services ...................... 64,822
Dividend and transfer agency fees ...................... 22,941
Legal and audit fees ................................... 18,600
Trustees' fees (Note 5) ................................ 2,950
Printing and shareholder reports ....................... 1,474
Insurance .............................................. 243
Miscellaneous .......................................... 13,498
----------
Total expense ....................................... 972,019
Waived investment advisory fee (Note 2) ................ (154,017) 818,002
---------- -----------
Net investment income ............................................. 17,950,747
Realized and Unrealized Gain on Investments:
Net realized gain from investment transactions ......... 23,721
Net unrealized depreciation of investments ............. (4,203)
----------
Net realized and unrealized gain from investments ................. 19,518
-----------
Net Increase in Net Assets Resulting From Operations ................. $17,970,265
===========
</TABLE>
See Notes to Financial Statements.
30
<PAGE>
- --------------------------------------------------------------------------------
Merrill Lynch Rated Institutional Fund
Statement of Changes in Net Assets
For the Period June 15, 1998 (Commencement of Operations) to April 30, 1999
<TABLE>
<S> <C>
================================================================================
Increase in Net Assets:
Operations:
Net investment income ........................................ $ 17,950,747
Net realized gain from investment transactions ............... 23,721
Net unrealized depreciation of investments ................... (4,203)
-------------
Net increase in net assets resulting from operations ......... 17,970,265
Total declared as dividends to shareholders (Note 4) ......... (17,974,468)
Capital share transactions (Note 3) .......................... 437,568,275
-------------
Net increase in net assets ................................... 437,564,072
Net Assets:
Beginning of period (Note 3) ................................. 100,000
-------------
End of period ................................................ $ 437,664,072
=============
</TABLE>
- --------------------------------------------------------------------------------
Merrill Lynch Rated Institutional Fund
Financial Highlights
For the Period June 15, 1998 (Commencement of Operations) to April 30, 1999
<TABLE>
<S> <C>
===============================================================================
Net Asset Value, beginning of period ............................. $ 1.00
Income from Investment Operations:
Net investment income ........................................... .045
Less Distributions:
Dividends from net investment income ............................ (.045)
-----------
Net Asset Value, end of period ................................... $ 1.00
===========
Total Return ..................................................... 4.57%(1)
Ratios/Supplemental Data:
Net Assets, end of period (000) ................................. $437,664
Ratio of expenses to average net assets (before waiver) ......... .27%(2)
Ratio of expenses to average net assets (after waiver) .......... .23%(2)
Ratio of net investment income, including realized and
unrealized gains and losses, to average net assets
(before waiver) ................................................ 4.95%(2)
Ratio of net investment income, including realized and
unrealized gains and losses, to average net assets
(after waiver) ................................................. 4.99%(2)
</TABLE>
(1) Cumulative total return
(2) On an annualized basis
See Notes to Financial Statements.
31
<PAGE>
- --------------------------------------------------------------------------------
Merrill Lynch Government Fund
Schedule of Investments
April 30, 1999
<TABLE>
<CAPTION>
============================================================================================================
Interest Maturity Value
Face Amount Rate* Date (Note 1a)
============================================================================================================
<S> <C> <C> <C> <C> <C>
U.S. $ 10,000,000 Federal Home Loan Banks ............. 5.72% 05/06/99 $10,000,023
Government 25,000,000 Federal Home Loan Banks ............. 5.56 08/04/99 25,037,250
Agency 50,000,000 Federal Home Loan Banks ............. 4.94 01/19/00 49,945,000
Issues -- 49.0% 10,000,000 Federal Home Loan Banks ............. 5.08 04/28/00 9,995,500
20,000,000 Federal Home Loan Mortgage Corp. .... 5.18 11/24/00 19,962,500
10,000,000 Federal Home Loan Mortgage Corp. .... 5.15 01/26/01 9,965,500
5,000,000 Federal Home Loan Mortgage Corp. .... 5.18 02/09/01 4,983,750
10,000,000 Federal National Mortgage Assoc. .... 4.99 02/22/00 9,993,000
15,000,000 Federal National Mortgage Assoc. .... 5.18 03/10/00 15,004,350
10,000,000 Federal National Mortgage Assoc. .... 5.02 04/26/00 9,992,000
8,000,000 Federal National Mortgage Assoc. .... 5.77 06/28/00 8,006,880
10,000,000 Federal National Mortgage Assoc. .... 4.89 10/13/00 9,954,000
16,000,000 Federal National Mortgage Assoc. .... 5.07 12/14/00 15,940,800
25,000,000 Student Loan Marketing Assoc. ....... 5.57 03/17/00 25,090,500
40,000,000 Federal Farm Credit Banks D/N ....... 4.70 05/05/99 39,979,111
14,032,000 Federal Farm Credit Banks D/N ....... 5.27 06/11/99 13,947,781
10,000,000 Federal Farm Credit Banks D/N ....... 5.26 06/25/99 9,919,639
10,000,000 Federal Farm Credit Banks D/N ....... 4.65 11/24/99 9,729,175
15,000,000 Federal Farm Credit Banks D/N ....... 4.69 04/11/00 14,318,092
30,000,000 Federal Home Loan Banks D/N ......... 4.72 05/05/99 29,984,267
18,896,000 Federal Home Loan Banks D/N ......... 5.25 05/21/99 18,840,887
50,000,000 Federal Home Loan Banks D/N ......... 4.74 06/04/99 49,776,167
26,575,000 Federal Home Loan Banks D/N ......... 4.74 03/17/00 25,454,177
25,000,000 Federal Home Loan Banks D/N ......... 4.70 04/14/00 23,853,632
39,300,000 Federal Home Loan Mortgage
Corp. D/N ......................... 4.75 05/06/99 39,274,100
20,020,000 Federal Home Loan Mortgage
Corp. D/N ......................... 4.76 05/07/99 20,004,118
6,388,000 Federal Home Loan Mortgage
Corp. D/N ......................... 4.78 05/07/99 6,382,911
25,000,000 Federal Home Loan Mortgage
Corp. D/N ......................... 4.76 05/14/99 24,957,028
100,000,000 Federal Home Loan Mortgage
Corp. D/N ......................... 4.74 05/17/99 99,789,333
13,363,000 Federal Home Loan Mortgage
Corp. D/N ......................... 4.74 05/18/99 13,333,089
25,000,000 Federal Home Loan Mortgage
Corp. D/N ......................... 4.80 05/20/99 24,936,667
10,386,000 Federal Home Loan Mortgage
Corp. D/N ......................... 4.76 05/21/99 10,358,564
</TABLE>
See Notes to Financial Statements.
32
<PAGE>
- --------------------------------------------------------------------------------
Merrill Lynch Government Fund
Schedule of Investments -- Continued
April 30, 1999
<TABLE>
<CAPTION>
===============================================================================================================
Interest Maturity Value
Face Amount Rate* Date (Note 1a)
===============================================================================================================
<S> <C> <C> <C> <C> <C>
U.S. $14,788,000 Federal Home Loan Mortgage
Government Corp. D/N ............................. 4.76% 05/24/99 $ 14,743,075
Agency 50,000,000 Federal Home Loan Mortgage
Issues Corp. D/N ............................. 4.81 05/24/99 49,846,347
(continued) 8,734,000 Federal Home Loan Mortgage
Corp. D/N ............................. 4.80 06/02/99 8,696,735
17,335,000 Federal Home Loan Mortgage
Corp. D/N ............................. 4.75 06/04/99 17,257,233
40,000,000 Federal Home Loan Mortgage
Corp. D/N ............................. 4.80 06/08/99 39,797,333
20,153,000 Federal Home Loan Mortgage
Corp. D/N ............................. 4.74 06/16/99 20,030,940
50,000,000 Federal Home Loan Mortgage
Corp. D/N ............................. 4.75 06/22/99 49,657,306
95,000,000 Federal Home Loan Mortgage
Corp. D/N ............................. 4.77 06/28/99 94,269,925
45,000,000 Federal Home Loan Mortgage
Corp. D/N ............................. 4.75 07/01/99 44,640,100
40,000,000 Federal Home Loan Mortgage
Corp. D/N ............................. 4.72 10/14/99 39,129,422
25,000,000 Federal National Mortgage Assoc. D/N .... 4.66 05/18/99 24,944,986
50,000,000 Federal National Mortgage Assoc. D/N .... 4.66 05/19/99 49,883,500
15,000,000 Federal National Mortgage Assoc. D/N .... 4.66 05/20/99 14,963,108
5,000,000 Federal National Mortgage Assoc. D/N .... 5.26 06/01/99 4,977,353
12,000,000 Federal National Mortgage Assoc. D/N .... 5.27 06/01/99 11,945,543
50,000,000 Federal National Mortgage Assoc. D/N .... 4.73 07/12/99 49,528,000
10,000,000 Federal National Mortgage Assoc. D/N .... 5.24 08/04/99 9,875,444
30,000,000 Federal National Mortgage Assoc. D/N .... 5.15 08/20/99 29,563,400
19,180,000 International Bank for Reconstruction ... 4.73 05/25/99 19,119,519
& Development D/N .....................
- ---------------------------------------------------------------------------------------------------------------
Total U.S. Government Agency Issues
(Cost $1,291,700,498) ................... 1,291,579,060
- ---------------------------------------------------------------------------------------------------------------
U.S. 75,000,000 Federal Farm Credit Banks ............... 4.72 08/19/99 74,986,755
Government 50,000,000 Federal Farm Credit Banks ............... 4.78 01/20/00 50,000,000
Agency 20,000,000 Federal Farm Credit Banks ............... 5.04 07/24/00 20,056,238
Issues -- 70,000,000 Federal Home Loan Banks ................. 4.91 11/09/99 69,974,740
Variable 15,000,000 Federal Home Loan Banks ................. 4.91 11/12/99 14,995,272
Rate -- 41.6% 50,000,000 Federal Home Loan Banks ................. 4.80 03/17/00 49,978,512
</TABLE>
See Notes to Financial Statements.
33
<PAGE>
- --------------------------------------------------------------------------------
Merrill Lynch Government Fund
Schedule of Investments -- Continued
April 30, 1999
<TABLE>
<CAPTION>
===============================================================================================================
Interest Maturity Value
Face Amount Rate* Date (Note 1a)
===============================================================================================================
<S> <C> <C> <C> <C> <C>
U.S. $100,000,000 Federal Home Loan Banks ............... 4.81% 04/14/00 $ 99,962,621
Government 26,000,000 Federal Home Loan Banks ............... 4.97 04/24/00 25,990,070
Agency 100,000,000 Federal Home Loan Mortgage Corp. 4.73 03/20/00 99,929,373
Issues -- 100,000,000 Federal National Mortgage Assoc. ...... 4.86 07/15/99 99,989,726
Variable 100,000,000 Federal National Mortgage Assoc. ...... 4.69 07/28/99 99,979,748
Rate 25,000,000 Federal National Mortgage Assoc. ...... 4.77 07/30/99 24,995,159
(continued) 54,800,000 Federal National Mortgage Assoc. ...... 4.86 07/30/99 54,788,758
25,000,000 Federal National Mortgage Assoc. ...... 4.92 08/19/99 24,994,462
100,000,000 Student Loan Marketing Assoc. ......... 4.86 09/15/99 99,970,458
100,000,000 Student Loan Marketing Assoc. ......... 4.76 12/03/99 99,961,532
25,000,000 Student Loan Marketing Assoc. ......... 4.86 01/12/00 24,996,773
10,000,000 Student Loan Marketing Assoc. ......... 4.79 02/04/00 9,998,166
50,000,000 Student Loan Marketing Assoc. ......... 5.11 02/14/00 49,972,870
- ---------------------------------------------------------------------------------------------------------------
Total U.S. Government Agency Issues
-- Variable Rate
(Cost $1,095,521,233) ................. 1,095,521,233
- ---------------------------------------------------------------------------------------------------------------
Repurchase 200,000,000 Lehman Brothers Inc.,
Agreements** purchased on 04/30/99 ................ 4.90 05/03/99 200,000,000
- --9.0% 37,759,000 State Street Bank and Trust,
purchased on 04/30/99 ................ 4.80 05/03/99 37,759,000
- ---------------------------------------------------------------------------------------------------------------
Total Repurchase Agreements
(Cost $237,759,000) ................... 237,759,000
- ---------------------------------------------------------------------------------------------------------------
Total Investments -- 99.6%
(Cost $2,624,980,731) ................. 2,624,859,293
- ---------------------------------------------------------------------------------------------------------------
Other Assets
Less Liabilities -- 0.4% .............. 11,813,013
- ---------------------------------------------------------------------------------------------------------------
Net Assets -- Equivalent to $1.00
Per Share on 2,636,793,744 Shares
of Beneficial Interest
Outstanding -- 100.0% ................. $2,636,672,306
===============================================================================================================
</TABLE>
Note--Costs for federal income tax purposes are the same as those shown above.
At April 30, 1999, net unrealized depreciation amounted to $121,438 and is
comprised of $138,520 of appreciation and $259,958 in depreciation.
*Repurchase Agreements bear interest payable at fixed dates or upon maturity.
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, 1999. 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.
34
<PAGE>
- --------------------------------------------------------------------------------
Merrill Lynch Government Fund
Statement of Assets and Liabilities
April 30, 1999
<TABLE>
<S> <C>
====================================================================================================
Assets:
Total investments at value (identified cost $2,624,980,731) (Note 1a)............ $2,624,859,293
Cash ............................................................................ 5,328,706
Receivable for investments sold ................................................. 25,000,000
Interest receivable ............................................................. 7,463,988
Prepaid expense ................................................................. 191,175
--------------
Total assets ................................................................. 2,662,843,162
--------------
Liabilities:
Advisory fee payable (Note 2) ................................................... 437,354
Payable for investments purchased ............................................... 25,000,000
Dividends payable ............................................................... 425,320
Accrued expenses ................................................................ 308,182
--------------
Total liabilities ............................................................ 26,170,856
--------------
Net Assets: (Equivalent to $1.00 per share, offering and redemption price, based on
2,636,793,744 shares of beneficial interest outstanding) ....................... $2,636,672,306
==============
</TABLE>
- --------------------------------------------------------------------------------
Merrill Lynch Government Fund
Statement of Operations
For the Year Ended April 30, 1999
<TABLE>
=========================================================================================
<S> <C> <C>
Investment Income:
Interest and discount earned (Note 1d) ................................. $130,445,341
------------
Expenses:
Investment advisory fee (Note 2) ....................... $ 7,841,106
Registration fees ...................................... 371,777
Dividend and transfer agency fees ...................... 319,531
Accounting and custodian services ...................... 171,907
Legal and audit fees ................................... 33,234
Printing and shareholder reports ....................... 28,039
Trustees' fees (Note 5) ................................ 24,604
Insurance .............................................. 12,092
Miscellaneous .......................................... 47,141
------------
Total expense ....................................... 8,849,431
Waived investment advisory fee (Note 2) ................ (2,872,035) 5,977,396
------------ ------------
Net investment income ............................................... 124,467,945
Realized and Unrealized Gain on Investments:
Net realized gain from investment transactions ......... 180,541
Net unrealized appreciation of investments ............. 80,459
------------
Net realized and unrealized gain from investments ................... 261,000
------------
Net Increase in Net Assets Resulting From Operations ................... $124,728,945
============
</TABLE>
See Notes to Financial Statements.
35
<PAGE>
- --------------------------------------------------------------------------------
Merrill Lynch Government Fund
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
======================================================================================================
Year Ended April 30,
-------------------------------------
1999 1998
----------------- -----------------
<S> <C> <C>
Increase in Net Assets:
Operations:
Net investment income ........................................ $ 124,467,945 $ 105,733,741
Net realized gain from investment transactions ............... 180,541 113,052
Net unrealized appreciation of investments ................... 80,459 216,971
-------------- --------------
Net increase in net assets resulting from operations ......... 124,728,945 106,063,764
Total declared as dividends to shareholders (Note 4) ......... (124,648,486) (105,846,793)
Capital share transactions (Note 3) .......................... 521,999,418 96,976,511
-------------- --------------
Net increase in net assets ................................... 522,079,877 97,193,482
Net Assets:
Beginning of year ............................................ 2,114,592,429 2,017,398,947
-------------- --------------
End of year .................................................. $2,636,672,306 $2,114,592,429
============== ==============
</TABLE>
- --------------------------------------------------------------------------------
Merrill Lynch Government Fund
Financial Highlights
<TABLE>
<CAPTION>
Year Ended April 30,
--------------------------------------------------------------------------
1999 1998 1997 1996 1995
=========================================================================================================================
<S> <C> <C> <C> <C> <C>
Net Asset Value, beginning of period ......... $1.00 $1.00 $1.00 $1.00 $1.00
Income from Investment Operations:
Net investment income ....................... .050 .053 .052 .055 .049
Less Distributions:
Dividends from net investment
income ..................................... (.050) (.053) (.052) (.055) (.049)
----- ----- ----- ----- -----
Net Asset Value, end of period ............... $1.00 $1.00 $1.00 $1.00 $1.00
===== ===== ===== ===== =====
Total Return ................................. 5.16% 5.48% 5.31% 5.67% 4.99%
Ratios/Supplemental Data:
Net Assets, end of period (000) ............. $2,636,672 $2,114,592 $2,017,399 $1,643,625 $1,601,085
Ratio of expenses to average net
assets (before waiver) ..................... .36% .37% .38% .38% .37%
Ratio of expenses to average net
assets (after waiver) ...................... .24% .25% .26% .26% .24%
Ratio of net investment income,
including realized and unrealized
gains and losses, to average net
assets (before waiver) ..................... 4.90% 5.24% 5.07% 5.37% 4.82%
Ratio of net investment income,
including realized and unrealized
gains and losses, to average net
assets (after waiver) ...................... 5.02% 5.36% 5.19% 5.49% 4.95%
</TABLE>
See Notes to Financial Statements.
36
<PAGE>
- --------------------------------------------------------------------------------
Merrill Lynch Treasury Fund
Schedule of Investments
April 30, 1999
<TABLE>
<CAPTION>
====================================================================================================
Interest Maturity Value
Face Amount Rate* Date (Note 1a)
====================================================================================================
<S> <C> <C> <C> <C> <C>
U.S. $ 25,000,000 U.S. Treasury Bills .......... 4.41% 05/06/99 $ 24,985,069
Government 2,235,000 U.S. Treasury Bills .......... 4.42 05/06/99 2,233,665
Issues -- 99.0% 6,848,000 U.S. Treasury Bills .......... 4.41 05/13/99 6,838,185
30,000,000 U.S. Treasury Bills .......... 4.42 05/13/99 29,957,000
5,520,000 U.S. Treasury Bills .......... 4.57 05/13/99 5,512,088
13,584,000 U.S. Treasury Bills .......... 4.43 05/20/99 13,552,813
36,300,000 U.S. Treasury Bills .......... 4.47 05/20/99 36,216,661
4,142,000 U.S. Treasury Bills .......... 4.49 05/20/99 4,132,491
1,569,000 U.S. Treasury Bills .......... 4.50 05/20/99 1,565,398
50,500,000 U.S. Treasury Bills .......... 4.36 05/27/99 50,341,711
17,000,000 U.S. Treasury Bills .......... 4.50 05/27/99 16,946,714
5,462,000 U.S. Treasury Bills .......... 4.55 05/27/99 5,444,880
10,139,000 U.S. Treasury Bills .......... 4.24 06/03/99 10,098,199
18,000,000 U.S. Treasury Bills .......... 4.40 06/03/99 17,927,565
30,000,000 U.S. Treasury Bills .......... 4.47 06/10/99 29,855,000
35,000,000 U.S. Treasury Bills .......... 4.42 06/24/99 34,770,837
6,000,000 U.S. Treasury Bills .......... 4.28 07/01/99 5,955,572
46,000,000 U.S. Treasury Bills .......... 4.38 07/01/99 45,659,383
3,990,000 U.S. Treasury Bills .......... 4.40 07/01/99 3,960,455
38,500,000 U.S. Treasury Notes .......... 6.25 05/31/99 38,542,111
45,000,000 U.S. Treasury Notes .......... 6.75 05/31/99 45,064,688
45,000,000 U.S. Treasury Notes .......... 6.00 06/30/99 45,100,197
20,000,000 U.S. Treasury Notes .......... 6.75 06/30/99 20,068,750
50,000,000 U.S. Treasury Notes .......... 6.38 07/15/99 50,179,690
117,500,000 U.S. Treasury Notes .......... 6.88 08/31/99 118,307,812
10,000,000 U.S. Treasury Notes .......... 5.75 09/30/99 10,043,750
- ----------------------------------------------------------------------------------------------------
Total Investments -- 99.0%
(Cost $673,304,901) .......... 673,260,684
- ----------------------------------------------------------------------------------------------------
Other Assets Less Liabilities -- 1.0% 7,079,803
- ----------------------------------------------------------------------------------------------------
Net Assets -- Equivalent to $1.00
Per Share on 680,384,704 Shares
of Beneficial Interest
Outstanding -- 100.0% ........ $680,340,487
====================================================================================================
</TABLE>
Note--Costs for federal income tax purposes are the same as those shown above.
At April 30, 1999, net unrealized depreciation amounted to $44,217 and is
comprised of $17,058 in appreciation and $61,275 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.
37
<PAGE>
- --------------------------------------------------------------------------------
Merrill Lynch Treasury Fund
Statement of Assets and Liabilities
April 30, 1999
<TABLE>
<S> <C>
=============================================================================================
Assets:
Total investments at value (identified cost $673,304,901) (Note 1a) .......... $673,260,684
Cash ......................................................................... 1,284,506
Interest receivable .......................................................... 5,965,124
Prepaid expense .............................................................. 21,234
------------
Total assets .............................................................. 680,531,548
------------
Liabilities:
Advisory fee payable (Note 2) ................................................ 121,434
Accrued expenses ............................................................. 45,933
Dividends payable ............................................................ 23,694
------------
Total liabilities ......................................................... 191,061
------------
Net Assets: (Equivalent to $1.00 per share, offering and redemption price,
based on 680,384,704 shares of beneficial interest outstanding) ............. $680,340,487
============
</TABLE>
- --------------------------------------------------------------------------------
Merrill Lynch Treasury Fund
Statement of Operations
For the Year Ended April 30, 1999
<TABLE>
<S> <C> <C>
==========================================================================================
Investment Income:
Interest and discount earned (Note 1d) ................................. $36,994,913
-----------
Expenses:
Investment advisory fee (Note 2) ....................... $ 2,628,306
Registration fees ...................................... 114,272
Dividend and transfer agency fees ...................... 107,291
Accounting and custodian services ...................... 87,331
Legal and audit fees ................................... 12,423
Printing and shareholder reports ....................... 9,878
Trustees' fees (Note 5) ................................ 7,156
Insurance .............................................. 4,277
Miscellaneous .......................................... 23,626
------------
Total expense ....................................... 2,994,560
Waived investment advisory fee (Note 2) ................ (1,098,411) 1,896,149
------------ -----------
Net investment income ............................................... 35,098,764
Realized and Unrealized Gain (Loss) on Investments:
Net realized gain from investment transactions ......... 339,022
Net unrealized depreciation of investments ............. (984,043)
------------
Net realized and unrealized loss from investments ................... (645,021)
-----------
Net Increase in Net Assets Resulting From Operations ................... $34,453,743
===========
</TABLE>
See Notes to Financial Statements.
38
<PAGE>
- --------------------------------------------------------------------------------
Merrill Lynch Treasury Fund
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended April 30,
---------------------------------
1999 1998
=======================================================================================================
<S> <C> <C>
Increase (Decrease) in Net Assets:
Operations:
Net investment income ............................................. $ 35,098,764 $ 33,442,403
Net realized gain from investment transactions .................... 339,022 384,816
Net unrealized appreciation (depreciation) of investments ......... (984,043) 886,152
------------- -------------
Net increase in net assets resulting from operations .............. 34,453,743 34,713,371
Total declared as dividends to shareholders (Note 4) .............. (35,437,786) (33,827,219)
Capital share transactions (Note 3) ............................... (77,872,328) 146,466,848
------------- -------------
Net increase (decrease) in net assets ............................. (78,856,371) 147,353,000
Net Assets:
Beginning of year ................................................. 759,196,858 611,843,858
------------- -------------
End of year ....................................................... $ 680,340,487 $ 759,196,858
============= =============
</TABLE>
- --------------------------------------------------------------------------------
Merrill Lynch Treasury Fund
Financial Highlights
<TABLE>
<CAPTION>
Year Ended April 30,
----------------------------------------------------------------------
1999 1998 1997 1996 1995
=========================================================================================================================
<S> <C> <C> <C> <C> <C>
Net Asset Value, beginning of period ......... $1.00 $1.00 $1.00 $1.00 $1.00
Income from Investment Operations:
Net investment income ....................... .046 .051 .049 .052 .045
Less Distributions:
Dividends from net investment
income ..................................... (.046) (.051) (.049) (.052) (.045)
-------- -------- -------- -------- --------
Net Asset Value, end of period ............... $1.00 $1.00 $1.00 $1.00 $1.00
======== ======== ======== ======== ========
Total Return ................................. 4.76% 5.24% 5.08% 5.37% 4.68%
Ratios/Supplemental Data:
Net Assets, end of period (000) ............. $680,340 $759,197 $611,844 $514,123 $342,844
Ratio of expenses to average net
assets (before waiver) ..................... .39% .41% .42% .41% .44%
Ratio of expenses to average net
assets (after waiver) ...................... .25% .26% .27% .26% .29%
Ratio of net investment income,
including realized and unrealized
gains and losses, to average net
assets (before waiver) ..................... 4.36% 5.11% 4.85% 5.09% 4.58%
Ratio of net investment income,
including realized and unrealized
gains and losses, to average net
assets (after waiver) ...................... 4.50% 5.26% 5.00% 5.24% 4.73%
</TABLE>
See Notes to Financial Statements.
39
<PAGE>
- --------------------------------------------------------------------------------
Merrill Lynch Institutional Tax-Exempt Fund
Schedule of Investments
April 30, 1999
<TABLE>
<CAPTION>
========================================================================================================
Value
Face Amount Issue (Note 1a)
========================================================================================================
<S> <C> <C> <C>
Alabama -- $20,000,000 Montgomery, Alabama IDB PCR (General Electric Co.)
1.0% CP 3.10% due 05/06/1999 ............................... $20,000,000
- --------------------------------------------------------------------------------------------------------
Arizona -- Salt River Project of Arizona, Agricultural Improvement &
2.4% Electrical Systems Revenue CP:
16,500,000 3.10% due 05/07/1999 .................................... 16,500,000
31,339,000 3.25% due 07/22/1999 .................................... 31,339,000
- --------------------------------------------------------------------------------------------------------
Arkansas -- 10,000,000 Arkansas Hospital Equipment Finance Authority Revenue
0.8% (AHA Pooled Financing Program) VRDN 4.05% due
11/01/2028 (a) ........................................ 10,000,000
4,880,000 Arkansas State Development Finance Authority Single
Family Mortgage Revenue (Series C) FXRDN 3.00%
due 03/01/2000 ........................................ 4,880,000
- --------------------------------------------------------------------------------------------------------
Colorado -- 11,695,000 Denver, Colorado City & County Airport Revenue
2.0% (Municipal Securities Trust Receipts--SGA 18) VRDN
4.03% due 11/15/2025 (a) .............................. 11,695,000
11,300,000 Fort Morgan, Colorado Waterworks & Distribution
Enterprise Water Revenue VRDN 4.05% due
12/01/2017 (a) ........................................ 11,300,000
5,600,000 Montrose, Colorado IDR (Scaled Manufacturing Inc.)
VRDN 4.15% due 12/01/2005 (a) ......................... 5,600,000
10,000,000 Pitkin County, Colorado IDR (Aspen Skiing Co. Project--
Series A) DDN 4.30% due 04/01/2016 (a) ................ 10,000,000
- --------------------------------------------------------------------------------------------------------
District of District of Columbia General Fund Recovery DDN:
Columbia -- 10,450,000 (Series B-1) 4.40% due 06/01/2003 (a) ................... 10,450,000
5.9% 38,800,000 (Series B-2) 4.40% due 06/01/2003 (a) ................... 38,800,000
31,900,000 (Series B-3) 4.40% due 06/01/2003 (a) ................... 31,900,000
16,000,000 District of Columbia Housing Finance Agency Single
Family Mortgage Revenue (Series 98-B) FXRDN
3.80% due 06/23/1999 .................................. 16,000,000
18,000,000 District of Columbia Metropolitan Airports Authority
Passenger Facilities Revenue CP 3.35% due
07/28/1999 ............................................ 18,000,000
- --------------------------------------------------------------------------------------------------------
Florida -- 44,400,000 Capital Projects Finance Authority Revenue (Florida
6.8% Hospital Association Capital Projects--Series A) VRDN
4.05% due 06/01/2028 (a) .............................. 44,400,000
9,900,000 Eagle Tax-Exempt Trust--Florida State Board of
Education--Series 96C0917) FXRDN 2.90% due
05/03/1999 ............................................ 9,900,000
10,000,000 Florida State Board of Education Capital Outlay
(Municipal Securities Trust Receipts--SGA 67) DDN
4.30% due 06/01/2022 (a) .............................. 10,000,000
</TABLE>
See Notes to Financial Statements.
40
<PAGE>
- --------------------------------------------------------------------------------
Merrill Lynch Institutional Tax-Exempt Fund
Schedule of Investments -- Continued
April 30, 1999
<TABLE>
<CAPTION>
=============================================================================================================
Value
Face Amount Issue (Note 1a)
=============================================================================================================
<S> <C> <C> <C>
Florida Greater Orlando Aviation Authority Airport Facilities
(continued) Revenue CP:
$15,000,000 (Series A-51) 3.10% due 05/20/1999 ........................ $15,000,000
8,000,000 (Series A-51) 3.45% due 05/20/1999 ........................ 8,000,000
20,000,000 Gulf Breeze, Florida Health Care Facilities Revenue
(Heritage Health Care Project) VRDN 4.15% due
01/01/2024 (a) .......................................... 20,000,000
4,700,000 Lee County, Florida IDA Revenue (Raymond Building
Supply Corp.) VRDN 4.15% due 04/01/2017 (a) ............... 4,700,000
Sunshine State Governmental Financing Commission
Revenue CP:
16,600,000 3.20% due 05/05/1999 ...................................... 16,600,000
4,900,000 3.20% due 06/24/1999 ...................................... 4,900,000
- -------------------------------------------------------------------------------------------------------------
Georgia -- 6,810,000 Albany & Dougherty County, Georgia Hospital Authority
5.6% Revenue (Phoebe Putney Memorial Hospital) VRDN
4.05% due 09/01/2026 (a) ................................ 6,810,000
6,700,000 Atlanta, Georgia Urban Residential Finance Authority
M/F Revenue (The Park at Lakewood) VRDN 4.10%
due 11/01/2022 (a) ...................................... 6,700,000
5,400,000 Atlanta, Georgia Urban Residential Finance Authority
M/F Revenue (New Community East Lake Project)
VRDN 4.10% due 11/01/2028 (a) ........................... 5,400,000
9,240,000 Bartow County, Georgia Development Authority PCR
(Georgia Power Co.) DDN 4.30% due 03/01/2024 (a) ........ 9,240,000
6,425,000 Burke County, Georgia Development Authority PCR
(Georgia Power Co.) DDN 4.30% due 04/01/2025 (a) ........ 6,425,000
1,000,000 Columbus, Georgia Development Authority IDR (Georgia
Packaging Inc.) VRDN 4.15% due 01/01/2012 (a) ........... 1,000,000
Eagle Tax-Exempt Trust--State of Georgia GO/FXRDN:
19,145,000 (Series 981002) 3.15% due 07/27/1999 ...................... 19,145,000
20,245,000 (Series 981003) 3.15% due 07/27/1999 ...................... 20,245,000
9,000,000 La Grange, Georgia Development Authority IDR (Reltec
Corp. Project) VRDN 4.10% due 12/01/2021 (a) ............ 9,000,000
6,000,000 Monroe County, Georgia Development Authority PCR
(Georgia Power Co.) DDN 4.30% due 07/01/2025 (a) ........ 6,000,000
20,000,000 Southern Georgia Hospital Authority Revenue (Georgia
Alliance of Community Hospitals) VRDN 4.00% due
04/01/2029 (a) .......................................... 20,000,000
- -------------------------------------------------------------------------------------------------------------
Idaho -- 3,575,000 Madison, Idaho Economic Development Corp. IDR
0.2% (Floyd Wilcox & Sons, Inc. Project) VRDN 4.15% due
08/01/2012 (a) .......................................... 3,575,000
- -------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
41
<PAGE>
- --------------------------------------------------------------------------------
Merrill Lynch Institutional Tax-Exempt Fund
Schedule of Investments -- Continued
April 30, 1999
<TABLE>
<CAPTION>
=============================================================================================================
Value
Face Amount Issue (Note 1a)
=============================================================================================================
<S> <C> <C> <C>
Illinois -- $ 2,700,000 Aurora, Illinois IDR (Aztech Engineering Inc. Project)
6.7% VRDN 4.20% due 10/01/2018 (a) .............................. $ 2,700,000
5,985,000 Chicago, Illinois Board of Education (BTP 288) FXRDN
3.00% due 07/29/1999 ....................................... 5,985,000
4,300,000 Chicago, Illinois IDR (Enterprise Center Project) VRDN
4.02% due 06/01/2022 (a) ................................... 4,300,000
6,400,000 Chicago, Illinois Solid Waste Disposal Facilities Revenue
(Groot Industries Inc.) VRDN 4.20% due 12/01/2015 (a) 6,400,000
3,150,000 Des Plaines, Illinois IDR (East Golf Road LLC Project)
VRDN 4.20% due 05/01/2017 (a) .............................. 3,150,000
3,300,000 Elgin, Illinois IDR (Starro Precision Products Inc.) VRDN
4.20% due 06/01/2025 (a) ................................... 3,300,000
2,200,000 Geneva, Illinois IDR (Continental Envelope Corp.
Project) VRDN 4.20% due 09/01/2006 (a) ..................... 2,200,000
10,000,000 Illinois Health Facilities Authority Revenue (Evanston
Hospital Corp.--Series E) CP 2.95% due 11/30/1999 .......... 10,000,000
5,900,000 Illinois Health Facilities Authority Revenue (Resurrection
Health Care Systems) DDN 4.30% due 05/01/2011 (a)........... 5,900,000
23,000,000 Illinois Health Facilities Authority Revenue (Northwestern
Memorial Hospital) DDN 4.30% due 08/15/2025 (a) ............ 23,000,000
21,800,000 Illinois Health Facilities Authority Revenue (University of
Chicago) DDN 4.30% due 08/01/2026 (a) ...................... 21,800,000
7,025,000 Illinois Health Facilities Authority Revenue (Riverside Health
Systems--Series B) VRDN 4.05% due 11/15/2016 (a) ........... 7,025,000
5,000,000 Illinois Health Facilities Authority Revenue (Pekin
Memorial Hospital) VRDN 4.07% due 08/15/2017 (a) ........... 5,000,000
10,000,000 Illinois Health Facilities Authority Revenue (Friend Village
of Schaumburg--Series 97-B) VRDN 4.15% due
12/01/2020 (a) ............................................. 10,000,000
2,000,000 Illinois State Development Finance Authority IDR (CPR/
Downers Grove Partnership) VRDN 3.90% due
12/01/2005 (a) ............................................. 2,000,000
1,600,000 Illinois State Development Finance Authority IDR (Revcor
Inc. Project) VRDN 4.05% due 06/01/2008 (a) ................. 1,600,000
3,125,000 Illinois State Development Finance Authority IDR (Rockford
College Project) VRDN 4.10% due 02/01/2001 (a) ............. 3,125,000
3,500,000 Illinois State Development Finance Authority IDR (Design
Automotive LLC Project) VRDN 4.20% due 06/01/2011 (a) 3,500,000
2,500,000 Illinois State Educational Facilities Authority Revenue
(Art Institute of Chicago) VRDN 4.05% due 03/01/2027 (a) 2,500,000
2,570,000 Peoria, Illinois IDR (CDC Realty L.P. Project) VRDN
4.15% due 12/01/2014 (a) ................................... 2,570,000
</TABLE>
See Notes to Financial Statements.
42
<PAGE>
- --------------------------------------------------------------------------------
Merrill Lynch Institutional Tax-Exempt Fund
Schedule of Investments -- Continued
April 30, 1999
<TABLE>
<CAPTION>
Value
Face Amount Issue (Note 1a)
=============================================================================================================
<S> <C> <C> <C>
Illinois $ 4,000,000 Upper Illinois River Valley Authority, Solid Waste
(continued) Disposal Revenue (Exolon-Esk Co. Project) VRDN
4.15% due 12/01/2021 (a) ............................... $ 4,000,000
- -------------------------------------------------------------------------------------------------------------
Indiana -- 6,580,000 Anderson, Indiana EDR (Applecreek Commons L.P.)
4.6% VRDN 4.10% due 12/01/2027 (a) .......................... 6,580,000
2,665,000 Bloomington, Indiana EDR (Bloomington Square Project)
VRDN 4.05% due 12/01/2008 (a) .......................... 2,665,000
14,000,000 Carmel Clay, Indiana School District TAN 3.70% due
12/31/1999 ............................................. 14,031,720
2,500,000 Connersville, Indiana EDR (Inland Southern Corp.
Project) VRDN 4.10% due 02/01/2012 (a) ................. 2,500,000
2,500,000 Crawfordsville, Indiana EDR (Performance Master LLC
Project) VRDN 4.20% due 10/01/2018 (a) ................. 2,500,000
4,465,000 Elkhart County, Indiana EDR (Patriot Homes Inc. Project)
VRDN 4.15% due 08/01/2012 (a) .......................... 4,465,000
3,000,000 Greencastle, Indiana IDR (Crown Equipment Corp.
Project) VRDN 4.15% due 02/01/2011 (a) ................. 3,000,000
740,000 Greendale, Indiana EDR (Pripak Inc. Project) VRDN
4.15% due 12/01/2003 (a) ............................... 740,000
2,490,000 Indiana State Development Finance Authority EDR (Hart
Housing Group Inc. Project) VRDN 4.15% due
06/01/2011 (a) ......................................... 2,490,000
3,055,000 Indiana State Development Finance Authority EDR (Haulin
Trailers Project) VRDN 4.35% due 12/01/2017 (a) ......... 3,055,000
1,960,000 Indiana State Development Finance Authority IDR
(Centurion Industries Inc. Project) VRDN 4.15% due
10/01/2005 (a) ......................................... 1,960,000
4,655,000 Indiana State Educational Facilities Authority Revenue
(Wesleyan University Project) VRDN 4.05% due
12/01/2015 (a) ......................................... 4,655,000
5,000,000 Indiana State Health Facilities Financing Authority
Revenue (Hartsfield Village Project) VRDN 4.05% due
08/15/2027 (a) ......................................... 5,000,000
Indiana State Transportation Finance Authority Airport
Facilities (Lease Revenue) VRDN:
10,770,000 (BTP 217) 4.05% due 11/01/2008 (a) ....................... 10,770,000
6,735,000 (BTP 218) 4.05% due 11/01/2009 (a) ....................... 6,735,000
6,930,000 (BTP 219) 4.05% due 11/01/2010 (a) ....................... 6,930,000
2,000,000 Muncie, Indiana IDR (Diamond Plastics Corp. Project)
VRDN 4.15% due 10/01/2006 (a) .......................... 2,000,000
1,535,000 New Castle, Indiana EDR (Barden Homes Indiana Inc.)
VRDN 4.15% due 08/01/2010 (a) .......................... 1,535,000
</TABLE>
See Notes to Financial Statements.
43
<PAGE>
- --------------------------------------------------------------------------------
Merrill Lynch Institutional Tax-Exempt Fund
Schedule of Investments -- Continued
April 30, 1999
<TABLE>
<CAPTION>
=============================================================================================================
Value
Face Amount Issue (Note 1a)
=============================================================================================================
<S> <C> <C> <C>
Indiana $ 7,735,000 Rockport, Indiana PCR (AEP Generating Co. Project--
(continued) Series B) DDN 4.25% due 07/01/2025 (a) ................ $ 7,735,000
- -------------------------------------------------------------------------------------------------------------
Kansas -- 47,400,000 Butler County, Kansas Solid Waste Disposal &
2.5% Cogeneration Revenue (Texaco Refining & Marketing)
DDN 4.30% due 08/01/2024 (a) .......................... 47,400,000
1,150,000 Spring Hill, Kansas IDR (Abrasive Engineering Project)
VRDN 4.02% due 10/01/2016 (a) ......................... 1,150,000
- -------------------------------------------------------------------------------------------------------------
Kentucky -- 4,540,000 Crestview Hill, Kentucky Industrial Building Revenue
4.5% (Thomas More College Project) VRDN 4.05% due
11/01/2018 (a) ........................................ 4,540,000
2,090,000 Elva-New Harmony-Oak Level Fire Protection District
Lease Revenue (Kentucky Area Development
Districts--Series A-1) VRDN 4.05% due
12/01/2031 (a) ........................................ 2,090,000
3,500,000 Graves County, Kentucky IDR (Seaboard Farms
Kentucky Inc. Project) VRDN 4.05% due
12/01/2012 (a) ........................................ 3,500,000
1,480,000 Harvey Brewers Fire Protection District Lease Revenue
(Kentucky Area Development Districts--Series C-1)
VRDN 4.05% due 12/01/2031 (a) ......................... 1,480,000
Jefferson County, Kentucky Industrial Building Revenue
(Thomas Development Project) VRDN:
1,700,000 4.15% due 04/10/2010 (a) ................................ 1,700,000
1,010,000 4.15% due 10/01/2011 (a) ................................ 1,010,000
Kentucky Area Development Districts Financing Trust
Lease Program Revenue (Calloway County Fire
District) VRDN:
2,770,000 (Series D-1) 4.05% due 12/01/2031 (a) ................... 2,770,000
490,000 (Series D-2) 4.05% due 12/01/2031 (a) ................... 490,000
3,275,000 (Series E-1) 4.05% due 12/01/2031 (a) ................... 3,275,000
2,085,000 (Series F-1) 4.05% due 12/01/2031 (a) ................... 2,085,000
490,000 (Series F-2) 4.05% due 12/01/2031 (a) ................... 490,000
Kentucky Area Development Districts Financing Trust
Lease Program Revenue (Lyon County Fire District)
VRDN:
2,150,000 (Series G-1) 4.05% due 12/01/2031 (a) ................... 2,150,000
490,000 (Series G-2) 4.05% due 12/01/2031 (a) ................... 490,000
1,020,000 (Series I-1) 4.05% due 12/01/2031 (a) ................... 1,020,000
490,000 (Series I-2) 4.05% due 12/01/2031 (a) ................... 490,000
2,125,000 Kentucky Area Development Districts Financing Trust
Lease Program Revenue (Symsonia County Fire
District--Series H-1) VRDN 4.05% due 12/01/2031 (a)...... 2,125,000
</TABLE>
See Notes to Financial Statements.
44
<PAGE>
- --------------------------------------------------------------------------------
Merrill Lynch Institutional Tax-Exempt Fund
Schedule of Investments -- Continued
April 30, 1999
<TABLE>
<CAPTION>
=============================================================================================================
Value
Face Amount Issue (Note 1a)
=============================================================================================================
<S> <C> <C> <C>
Kentucky $18,850,000 Kentucky Economic Development Finance Authority
(continued) Revenue (Pooled Hospital Loan) VRDN 4.10% due
08/01/2018 (a) ...................................... $18,850,000
9,835,000 Kentucky Economic Development Finance Authority
Hospital Facilities Revenue (St. Elizabeth's Medical
Center Inc.) VRDN 4.07% due 05/01/2017 (a) .......... 9,835,000
19,700,000 Kentucky State Pollution Abatement and Water Resource
Finance Authority PCR (Toyota Motor) DDN 5.25%
due 08/13/2006 (a) .................................. 19,700,000
5,500,000 Middletown, Kentucky Revenue (Christian Academy
Project) VRDN 4.05% due 07/01/2022 (a) .............. 5,500,000
220,000 Muhlenberg County, Kentucky Airport District (Financing
Trust Lease Program Revenue--Series B-1) VRDN
4.05% due 12/01/2031 (a) ............................ 220,000
3,500,000 Shelby County, Kentucky IDR (Truss Co. Inc./Kingbrook
Commerce Park LLC Project) VRDN 4.15% due
06/01/2018 (a) ...................................... 3,500,000
- -------------------------------------------------------------------------------------------------------------
Maine -- 11,600,000 Biddeford, Maine BAN 4.00% due 06/01/1999 ............. 11,601,892
1.6% 2,350,000 Gray, Maine Revenue (Advance Realty Project) VRDN
4.15% due 10/01/2011 (a) ............................ 2,350,000
1,580,000 Lewiston, Maine Revenue (Geiger Brothers Project)
VRDN 3.50% due 09/01/2004 (a) ....................... 1,580,000
3,575,000 Millinocket, Maine IDB Revenue (Gardner Chipmills
Project) VRDN 4.15% due 03/01/2005 (a) .............. 3,575,000
1,660,000 Saco, Maine IDR (First Light Technology Project) VRDN
4.15% due 04/01/2007 (a) ............................ 1,660,000
6,500,000 State of Maine GO 3.50% due 06/23/1999 ................ 6,504,683
4,495,000 Topsham, Maine Revenue (Village Candle Inc.) VRDN
4.15% due 08/01/2013 (a) ............................ 4,495,000
- -------------------------------------------------------------------------------------------------------------
Maryland -- 1,200,000 Anne Arundel County, Maryland EDR (Atlas Container
0.6% Corp. Project) VRDN 4.20% due 04/01/2006 (a) ........ 1,200,000
10,000,000 Gaithersburg, Maryland EDR (Asbury Methodist) VRDN
4.00% due 07/01/2027 (a) ............................ 10,000,000
- -------------------------------------------------------------------------------------------------------------
Massachusetts -- 5,125,000 Clipper Tax-Exempt Trust--Massachusetts State Housing
5.6% Finance Agency (Series A) VRDN 4.11% due
05/01/2007 (a) ...................................... 5,125,000
8,792,000 Clipper Tax-Exempt Trust--Massachusetts State Housing
Finance Agency (Series 98-B) VRDN 4.06% due
07/20/2007 (a) ...................................... 8,792,000
14,230,000 Massachusetts State GO (Tender Option--BTP 231)
FXRDN 3.25% due 07/28/1999 .......................... 14,230,000
</TABLE>
See Notes to Financial Statements.
45
<PAGE>
- --------------------------------------------------------------------------------
Merrill Lynch Institutional Tax-Exempt Fund
Schedule of Investments -- Continued
April 30, 1999
<TABLE>
<CAPTION>
=============================================================================================================
Value
Face Amount Issue (Note 1a)
=============================================================================================================
<S> <C> <C> <C>
Massachusetts $ 9,900,000 Massachusetts State GO (Tender Option--BTP 259)
(continued) FXRDN 3.00% due 07/29/1999 ............................... $ 9,900,000
6,000,000 Massachusetts State Health & Educational Facilities
Authority Revenue (Capital Asset Program--Series E)
DDN 4.20% due 01/01/2035 (a) ........................... 6,000,000
6,000,000 Massachusetts State Health & Educational Facilities
Authority Revenue (Wellesley College--Series G)
DDN 4.15% due 07/01/2039 (a) ........................... 6,000,000
2,685,000 Massachusetts State Industrial Finance Agency IDR
(Hi-Tech Mold & Tool) VRDN 4.15% due
06/01/2018 (a) ......................................... 2,685,000
9,370,000 Pittsfield, Massachusetts BAN 3.25% due 11/23/1999 ....... 9,379,462
8,500,000 Southbridge, Massachusetts BAN 3.30% due
07/16/1999 ............................................. 8,505,311
4,600,000 Springfield, Massachusetts BAN 4.00% due 09/02/1999 ...... 4,606,788
Whitman-Hanson Regional School District BAN:
10,350,000 3.75% due 10/15/1999 ..................................... 10,370,126
10,300,000 3.25% due 04/21/2000 ..................................... 10,304,835
6,000,000 Worcester, Massachusetts BAN 3.25% due 08/26/1999 ........ 6,002,825
6,900,000 Worcester, Massachusetts Regional Transit Authority
RAN 3.90% due 06/18/1999 ............................... 6,901,310
- -------------------------------------------------------------------------------------------------------------
Michigan -- 7,000,000 Dearborn, Michigan Economic Development Corp.
2.8% Revenue (Henry Ford Village Inc. Project) VRDN
4.05% due 10/01/2023 (a) ............................... 7,000,000
12,000,000 Michigan State Strategic Fund Limited Obligation
Revenue (Detroit Edison Co.) DDN 4.30% due
09/01/2030 (a) ......................................... 12,000,000
University of Michigan (University Medical Service
Revenue) DDN:
14,530,000 (Series A) 4.25% due 12/01/2019 (a) ...................... 14,530,000
21,350,000 (Series A) 4.25% due 12/01/2027 (a) ...................... 21,350,000
- -------------------------------------------------------------------------------------------------------------
Mississippi -- 16,500,000 Mississippi State Hospital Equipment & Facilities
0.8% Authority Revenue (North Mississippi Health Services)
CP 3.35% due 06/22/1999 ................................ 16,500,000
- -------------------------------------------------------------------------------------------------------------
Missouri -- 720,000 Jefferson County, Missouri IDA Revenue (Sinclair &
0.3% Rush Inc. Project) VRDN 4.15% due 11/01/2001 (a) ....... 720,000
2,175,000 Missouri State Development Finance Board IDR
(Filtration Group Inc.) VRDN 4.20% due
03/01/2012 (a) ......................................... 2,175,000
2,010,000 Sikeston, Missouri IDA Revenue (Heritage American
Homes LP/ North Ridge Homes Inc. Project) VRDN
4.15% due 07/01/2009 (a) ............................... 2,010,000
- -------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
46
<PAGE>
- --------------------------------------------------------------------------------
Merrill Lynch Institutional Tax-Exempt Fund
Schedule of Investments -- Continued
April 30, 1999
<TABLE>
<CAPTION>
=============================================================================================================
Value
Face Amount Issue (Note 1a)
=============================================================================================================
<S> <C> <C> <C>
Nevada -- $11,290,000 Eagle Tax-Exempt Trust--Clark County, Nevada School
0.6% District (Series 962804) GO/FXRDN 2.95% due
05/03/1999 ........................................... $11,290,000
- -------------------------------------------------------------------------------------------------------------
New Hampshire -- 2,400,000 New Hampshire State Business Finance Authority
0.5% Revenue (Hydra LLC Inc.) VRDN 4.15% due
11/01/2006 (a) ....................................... 2,400,000
1,120,000 New Hampshire State Business Finance Authority
Revenue (Freed's Bakery Inc. Project) VRDN 4.15%
due 05/02/2011 (a) ................................... 1,120,000
6,400,000 New Hampshire State Business Finance Authority
Revenue (Montgomery Wire Corp.) VRDN 4.05% due
02/01/2014 (a) ....................................... 6,400,000
- -------------------------------------------------------------------------------------------------------------
New Jersey -- 10,000,000 Passaic County, New Jersey BAN 4.00% due
0.5% 09/24/1999 ........................................... 10,018,531
- -------------------------------------------------------------------------------------------------------------
New Mexico -- 26,920,000 Farmington, New Mexico PCR (Arizona Public Service
1.4% Co.--Series B) DDN 4.25% due 09/01/2024 (a) .......... 26,920,000
- -------------------------------------------------------------------------------------------------------------
New York -- 10,000,000 Municipal Securities Trust (Triborough Bridge & Tunnel
0.5% Authority--Series 9863) FXRDN 3.15% due
08/13/1999 ........................................... 10,000,000
- -------------------------------------------------------------------------------------------------------------
North Carolina -- 6,800,000 Raleigh-Durham, North Carolina Airport Authority Special
0.3% Facilities Revenue (American Airlines--Series A) DDN
4.25% due 11/01/2015 (a) ............................. 6,800,000
- -------------------------------------------------------------------------------------------------------------
Ohio -- 6,855,000 Akron, Ohio Metropolitan Housing Authority Facilities
12.7% Revenue (Administration Building Project) VRDN
4.02% due 04/01/2018 (a) ............................. 6,855,000
5,000,000 Brunswick, Ohio City School District BAN 3.57% due
07/08/1999 ........................................... 5,005,315
14,575,000 Cleveland, Ohio City School District RAN/VRDN 3.00%
due 07/29/1999 (a) ................................... 14,575,000
4,000,000 Cuyahoga County, Ohio IDR (Motch Corp. Project)
VRDN 4.15% due 02/01/2003 (a) ........................ 4,000,000
3,500,000 Eagle Tax-Exempt Trust--Ohio Water Development
Authority (Ohio Edison) VRDN 4.01% due
07/01/2015 (a) ....................................... 3,500,000
4,800,000 Eagle Tax-Exempt Trust--(Ohio Edison Series 953509)
VRDN 4.01% due 07/01/2015 (a) ........................ 4,800,000
15,000,000 Eagle Tax-Exempt Trust--Cleveland Water (Series
983501) GO/VRDN 4.06% due 01/01/2025 (a) ............. 15,000,000
22,065,000 Eagle Tax-Exempt Trust--Ohio State Turnpike Revenue
(Series 983502) FXRDN 4.06% due 02/15/2020 ........... 22,065,000
5,000,000 Edgewood, Ohio City School District BAN 3.70% due
06/30/1999 ........................................... 5,004,459
</TABLE>
See Notes to Financial Statements.
47
<PAGE>
- --------------------------------------------------------------------------------
Merrill Lynch Institutional Tax-Exempt Fund
Schedule of Investments -- Continued
April 30, 1999
<TABLE>
<CAPTION>
=============================================================================================================
Value
Face Amount Issue (Note 1a)
=============================================================================================================
<S> <C> <C> <C>
Ohio $ 5,175,000 Franklin County, Ohio M/F Revenue (Community
(continued) Housing Network) VRDN 4.00% due 03/01/2027 (a) ........ $ 5,175,000
4,900,000 Gates Mills, Ohio BAN 3.50% due 11/18/1999 .............. 4,907,839
8,750,000 Hamilton County, Ohio Hospital Facilities Revenue
(Children's Hospital Medical Center) VRDN 3.95% due
05/15/2017 (a) ........................................ 8,750,000
6,900,000 James A. Garfield Local School District BAN 3.38% due
06/01/1999 ............................................ 6,901,585
5,000,000 Lorain County, Ohio Independent Living Facilities
Revenue (Elyria United Methodist Project) VRDN
4.00% due 06/01/2022 (a) .............................. 5,000,000
4,370,000 Lucas-Beacon Place Housing Development Corp. M/F
Revenue (Beacon Place Apartments Project) FXRDN
3.10% due 09/15/1999 .................................. 4,370,000
6,950,000 Mahoning County, Ohio Health Care Facilities Revenue
(Shepherd of the Valley Lutheran Home & Retirement
Center) VRDN 4.05% due 09/01/2020 (a) ................. 6,950,000
5,535,000 Mahoning County, Ohio Health Care Facilities Revenue
(Shepherds Woods Project) VRDN 4.00% due
09/01/2022 (a) ........................................ 5,535,000
4,950,000 Marion, Ohio BAN 3.53% due 12/15/1999 ................... 4,955,380
3,280,000 Mentor, Ohio IDR (Risch Investments/Roll-Kraft Project)
VRDN 4.15% due 08/01/2017 (a) ......................... 3,280,000
13,850,000 Middleburg Heights, Ohio Hospital Revenue (Southwest
General Health) VRDN 3.95% due 08/15/2022 (a) ......... 13,850,000
17,300,000 Montgomery County, Ohio Revenue (Miami Valley
Hospital--Series B) CP 3.35% due 06/22/1999 ........... 17,300,000
3,870,000 New Lexington, Ohio City School District BAN 3.65%
due 08/04/1999 ........................................ 3,873,494
7,500,000 Ohio State Air Quality Development Authority Revenue
(Duquesne Light Co. Project--Series 88) CP 3.55%
due 05/27/1999 ........................................ 7,500,000
5,000,000 Ohio State Housing Finance Agency Mortgage
Revenue--Residential (Series A-2) FXRDN 3.05% due
03/01/2000 ............................................ 5,000,000
11,000,000 Orange, Ohio City School District BAN 3.44% due
08/18/1999 ............................................ 11,026,400
4,170,000 Ottawa County, Ohio IDR (Adrian Sand & Stone Inc.
Project) VRDN 4.15% due 10/01/2008 (a) ................ 4,170,000
7,625,000 Perrysburg, Ohio Exempt Village School District BAN
3.82% due 07/15/1999 .................................. 7,637,841
9,520,000 Southwest Licking Local School District BAN 3.69% due
06/15/1999 ............................................ 9,526,236
</TABLE>
See Notes to Financial Statements.
48
<PAGE>
- --------------------------------------------------------------------------------
Merrill Lynch Institutional Tax-Exempt Fund
Schedule of Investments -- Continued
April 30, 1999
<TABLE>
<CAPTION>
=============================================================================================================
Value
Face Amount Issue (Note 1a)
=============================================================================================================
<S> <C> <C> <C>
Ohio $ 4,000,000 Southwest Local School District BAN 3.83% due
(continued) 06/17/1999 ............................................ $ 4,003,450
4,250,000 Southwest Local School District BAN 3.73% due
07/20/1999 ............................................ 4,256,274
4,500,000 Sycamore, Ohio Community School District BAN 4.20%
due 06/29/1999 ........................................ 4,508,257
4,500,000 Sycamore, Ohio Community School District BAN 3.85%
due 07/28/1999 ........................................ 4,509,145
7,100,000 Trumbull County, Ohio BAN 4.00% due 04/13/2000 .......... 7,144,517
6,500,000 Willoughby, Ohio IDR (Kennedy Group Inc. Project)
VRDN 4.15% due 09/01/2018 (a) ......................... 6,500,000
- -------------------------------------------------------------------------------------------------------------
Oklahoma -- 5,000,000 Muskogee, Oklahoma Industrial PCR (Oklahoma Gas &
0.3% Electric Co.) VRDN 4.05% due 01/01/2025 (a) ........... 5,000,000
- -------------------------------------------------------------------------------------------------------------
Oregon -- 3,972,400 Oregon State EDR (Sheffer Corp. Project--Series 185)
0.4% VRDN 4.15% due 12/01/2013 (a) ......................... 3,972,400
4,810,000 Oregon State EDR (Kettle Foods Project--Series 186)
VRDN 4.05% due 12/01/2018 (a) ......................... 4,810,000
- -------------------------------------------------------------------------------------------------------------
Pennsylvania -- Allegheny County, Pennsylvania Hospital Development
5.1% Authority Revenue (Presbyterian Health Center)
VRDN:
3,800,000 (Series A) 4.05% due 03/01/2020 (a) ..................... 3,800,000
12,500,000 (Series B) 4.05% due 03/01/2020 (a) ..................... 12,500,000
6,000,000 (Series C) 4.05% due 03/01/2020 (a) ..................... 6,000,000
7,650,000 (Series D) 4.05% due 03/01/2020 (a) ..................... 7,650,000
1,200,000 Allegheny County, Pennsylvania IDA Revenue (Parkway
Center Project) VRDN 3.95% due 05/01/2009 (a) ......... 1,200,000
24,660,000 Dauphin County, Pennsylvania General Authority
Revenue (School District Pooled Financing) VRDN
4.15% due 09/01/2032 (a) .............................. 24,660,000
Montgomery County, Pennsylvania Higher Education &
Health Authority Revenue (Higher Education & Health
Loan) VRDN:
19,580,000 4.05% due 06/01/2021 (a) ................................ 19,580,000
4,800,000 4.05% due 08/01/2021 (a) ................................ 4,800,000
2,700,000 Montgomery County, Pennsylvania Higher Education &
Health Authority Revenue (Philadelphia Presbytery)
VRDN 4.05% due 07/01/2025 (a) ......................... 2,700,000
7,425,000 Pennsylvania State GO (Tender Option--BTP 86)
GO/VRDN 3.00% due 07/29/1999 (a) ...................... 7,425,000
9,030,000 Pennsylvania State GO (Tender Option--BTP 235)
GO/VRDN 3.00% due 07/29/1999 (a) ...................... 9,030,000
- -------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
49
<PAGE>
- --------------------------------------------------------------------------------
Merrill Lynch Institutional Tax-Exempt Fund
Schedule of Investments -- Continued
April 30, 1999
<TABLE>
<CAPTION>
=============================================================================================================
Value
Face Amount Issue (Note 1a)
=============================================================================================================
<S> <C> <C> <C>
Rhode Island -- $15,950,000 East Providence, Rhode Island TAN 3.50% due
1.6% 07/07/1999 ........................................... $15,963,082
5,500,000 Rhode Island State Health & Educational Building Corp.
Revenue (La Salle Academy) VRDN 3.90% due
03/01/2029 (a) ....................................... 5,500,000
2,660,000 Rhode Island State Housing & Mortgage Finance Corp.
(Smith Building Development Corp.) VRDN 4.25% due
12/01/2028 (a) ....................................... 2,660,000
2,500,000 Rhode Island State Industrial Facilities Corporation IDR
(Capital Development Corp. Project) VRDN 3.00% due
11/01/2005 (a) ....................................... 2,500,000
5,425,000 Rhode Island State Resource Recovery Corp. (Landfill
Lease) GO 4.00% due 07/30/1999 ....................... 5,428,876
- -------------------------------------------------------------------------------------------------------------
South Carolina -- 2,500,000 South Carolina Economic Development Authority EDR
1.3% (Parkway Products Inc. Project) VRDN 4.15% due
11/01/2007 (a) ....................................... 2,500,000
7,230,000 South Carolina Economic Development Authority IDR
(Core Materials Corp. Project) VRDN 4.15% due
04/01/2013 (a) ....................................... 7,230,000
15,000,000 South Carolina Public Service Authority Electrical
Systems Revenue CP 3.15% due 05/03/1999 .............. 15,000,000
- -------------------------------------------------------------------------------------------------------------
Tennessee -- 4,000,000 Coffee County, Tennessee Industrial Board Inc. IDR
2.9% (Hillsdale Tool & Manufacturing Co. Project) VRDN
4.15% due 06/01/2017 (a) ............................. 4,000,000
19,775,000 Johnson City, Tennessee Municipal Securities Trust
(SGA 45) DDN 4.30% due 05/01/2021 (a) ................ 19,775,000
9,500,000 Memphis & Shelby County, Tennessee Industrial Board
PCR (Birmingham Steel Corp. Project) VRDN 4.15%
due 10/01/2026 (a) ................................... 9,500,000
7,000,000 Montgomery County, Tennessee Public Building Authority
(Pooled Financing Revenue) VRDN 4.00% due
07/01/2015 (a) ....................................... 7,000,000
4,300,000 Nashville & Davidson County, Tennessee IDB Revenue
(Gibson Guitar Project) VRDN 4.15% due
03/01/2011 (a) ....................................... 4,300,000
2,600,000 Nashville & Davidson County, Tennessee IDB Revenue
(Hickory M/F Housing Revenue) VRDN 4.00% due
06/01/2015 (a) ....................................... 2,600,000
10,000,000 Shelby County, Tennessee (Series 98-A) CP 3.20% due
05/11/1999 ........................................... 10,000,000
- -------------------------------------------------------------------------------------------------------------
Texas -- 20,000,000 ABN-AMRO Muni Tops--Dallas, Texas Waterworks &
7.2% Sewer Systems Revenue (Series 9819) FXRDN 3.10%
due 06/09/1999 ....................................... 20,000,000
</TABLE>
See Notes to Financial Statements.
50
<PAGE>
- --------------------------------------------------------------------------------
Merrill Lynch Institutional Tax-Exempt Fund
Schedule of Investments -- Continued
April 30, 1999
<TABLE>
<CAPTION>
=======================================================================================================
Value
Face Amount Issue (Note 1a)
=======================================================================================================
<S> <C> <C> <C>
Texas $ 5,750,000 ABN-AMRO Muni Tops--Houston, Texas Airport Systems
(continued) Revenue (Series 9815) FXRDN 3.25% due
06/02/1999 ........................................... $ 5,750,000
9,000,000 ABN-AMRO Muni Tops--San Antonio, Texas Electric &
Gas Revenue (Series 9822) FXRDN 3.20% due
06/02/1999 ........................................... 9,000,000
70,200,000 Harris County, Texas Health Facilities Development
Corp. Revenue (Methodist Hospital) DDN 4.30% due
12/01/2025 (a) ....................................... 70,200,000
2,000,000 Harris County, Texas IDC PCR (Shell Oil Co. Project)
DDN 4.25% due 04/01/2027 (a) ......................... 2,000,000
12,800,000 Houston, Texas Water & Sewer Systems Revenue
Municipal Securities Trust (Series SGA 73) VRDN
4.03% due 12/01/2023 (a) ............................. 12,800,000
4,000,000 Mesquite, Texas IDR (Morrison Products) VRDN 4.15%
due 01/10/2010 (a) ................................... 4,000,000
1,485,000 Montgomery County, Texas IDC Revenue (Sawyer
Research Products Inc.) VRDN 4.15% due
02/04/2015 (a) ....................................... 1,485,000
5,135,000 Texas State (BTP 308) GO 3.00% due 07/29/1999 .......... 5,135,000
10,600,000 Texas State Public Finance Authority Revenue (Series B)
CP 3.15% due 05/06/1999 .............................. 10,600,000
- -------------------------------------------------------------------------------------------------------
Utah -- 10,000,000 Intermountain Power Agency Power Supply Revenue
0.5% (Series A-63) FXRDN 2.80% due 05/01/1999 ............. 10,000,000
- -------------------------------------------------------------------------------------------------------
Vermont -- 2,300,000 Vermont IDA Revenue (Burlington Project) VRDN 4.06%
0.1% due 12/01/2011 (a) ................................... 2,300,000
- -------------------------------------------------------------------------------------------------------
Virginia -- 2,100,000 Brunswick County, Virginia IDA Exempt Facilities
0.1% Revenue (Aegis Waste Solutions Inc.) VRDN 4.05%
due 01/01/2017 (a) ................................... 2,100,000
- -------------------------------------------------------------------------------------------------------
Washington -- 26,745,000 Eagle Tax-Exempt Trust--Port of Seattle, Washington
2.4% Passenger Facility Charge (Series 984705) FXRDN
3.15% due 07/28/1999 ................................. 26,745,000
14,680,000 Eagle Tax-Exempt Trust--Washington State Public
Power Supply System (Nuclear Project Number 1--
Series 964702) FXRDN 2.90% due 05/03/1999 ............ 14,680,000
6,200,000 King County, Washington Municipal Securities Trust
Receipts (Series SGA 19) VRDN 4.03% due
01/01/2027 (a) ....................................... 6,200,000
- -------------------------------------------------------------------------------------------------------
Wisconsin -- 1,310,000 Appleton, Wisconsin IDR (Valley Packaging Industries
2.5% Inc. Project) VRDN 4.05% due 02/01/2011 (a) .......... 1,310,000
3,900,000 Ashland, Wisconsin School District TRAN 3.60% due
08/27/1999 ........................................... 3,901,224
</TABLE>
See Notes to Financial Statements.
51
<PAGE>
- --------------------------------------------------------------------------------
Merrill Lynch Institutional Tax-Exempt Fund
Schedule of Investments -- Continued
April 30, 1999
<TABLE>
<CAPTION>
=======================================================================================================
Value
Face Amount Issue (Note 1a)
=======================================================================================================
<S> <C> <C> <C>
Wisconsin $ 3,700,000 De Forest, Wisconsin Area School District TRAN 3.80%
(continued) due 09/17/1999 ...................................... $ 3,704,763
Deerfield, Wisconsin IDR (Interpane Coatings Project)
VRDN:
1,100,000 4.05% due 05/01/2003 (a) .............................. 1,100,000
1,635,000 4.15% due 05/01/2003 (a) .............................. 1,635,000
2,220,000 Milwaukee, Wisconsin Redevelopment Authority
Revenue (Jensar Corp. Project) VRDN 4.20% due
03/01/2007 (a) ...................................... 2,220,000
8,515,000 Monroe, Wisconsin School District BAN 3.55% due
12/01/1999 .......................................... 8,524,111
1,045,000 Oshkosh, Wisconsin IDR (Automatic Handling Inc.)
VRDN 4.15% due 06/01/2006 (a) ....................... 1,045,000
500,000 Plymouth, Wisconsin IDR (Great Lakes Cheese Inc.
Project) VRDN 4.10% due 08/01/2024 (a) .............. 500,000
5,000,000 Sturtevant, Wisconsin IDR (Andis Co. Project--Series A)
VRDN 4.05% due 12/01/2016 (a) ....................... 5,000,000
3,500,000 Tomah, Wisconsin School District TRAN 3.85% due
09/21/1999 .......................................... 3,505,295
3,750,000 Verona, Wisconsin Area School District TRAN 3.90%
due 08/26/1999 ...................................... 3,753,130
6,000,000 Waupica, Wisconsin School District BAN 3.20% due
12/01/1999 .......................................... 6,005,940
5,800,000 Wisconsin State Public Power Inc. Systems Revenue
Municipal Trust Receipts (Series SGA 2) VRDN 4.03%
due 07/01/2021 (a) .................................. 5,800,000
- -------------------------------------------------------------------------------------------------------
Wyoming -- Laramie County, Wyoming IDR (Cheyenne Light Fuel &
3.4% Power Co.) VRDN:
3,500,000 4.10% due 09/01/2021 (a) .............................. 3,500,000
5,000,000 4.10% due 03/01/2027 (a) .............................. 5,000,000
</TABLE>
See Notes to Financial Statements.
52
<PAGE>
- --------------------------------------------------------------------------------
Merrill Lynch Institutional Tax-Exempt Fund
Schedule of Investments -- Continued
April 30, 1999
<TABLE>
<CAPTION>
==========================================================================================================
Value
Face Amount Issue (Note 1a)
==========================================================================================================
<S> <C> <C> <C>
Wyoming $24,200,000 Sweetwater County, Wyoming PCR (Idaho Power Co.
(continued) Project--Series B) DDN 4.25% due 07/15/2026 (a) .......... $ 24,200,000
34,400,000 Uinta County, Wyoming PCR (Chevron USA Inc. Project)
DDN 4.25% due 08/15/2020 (a) ............................. 34,400,000
- ----------------------------------------------------------------------------------------------------------
Total Investments (Cost $1,934,387,496) -- 99.0% .......... 1,934,387,496
- ----------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities -- 1.0% ..................... 18,687,403
- ----------------------------------------------------------------------------------------------------------
Net Assets -- Equivalent to $1.00 Per Share on
1,953,192,778 Shares of Beneficial Interest
Outstanding -- 100.0% ...................................... $1,953,074,899
==========================================================================================================
</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, 1999. For variable rate
demand instruments, the next coupon date on which the interest is to be
adjusted is deemed the maturity date for valuation.
Note--Cost for federal income tax purposes is the same as that shown above.
================================================================================
Portfolio Abbreviations for Merrill Lynch Institutional Tax-Exempt Fund
BAN Bond Anticipation Notes
CP Commercial Paper
DDN Daily Demand Notes
EDR Economic Development Revenue
FXRDN Fixed Rate Demand Notes
GO General Obligation
IDA Industrial Development Authority
IDB Industrial Development Board
IDC Industrial Development Corporation
IDR Industrial Development Revenue
M/F Multi-Family
PCR Pollution Control Revenue
RAN Revenue Anticipation Notes
TAN Tax Anticipation Notes
TRAN Tax and Revenue Anticipation Notes
VRDN Variable Rate Demand Notes
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
53
<PAGE>
- --------------------------------------------------------------------------------
Merrill Lynch Institutional Tax-Exempt Fund
Statement of Assets and Liabilities
April 30, 1999
================================================================================
<TABLE>
<S> <C>
Assets:
Investments, at amortized cost and value (Note 1a) .......................... $1,934,387,496
Cash ........................................................................ 2,703,681
Interest receivable ......................................................... 13,118,583
Receivable for investments sold ............................................. 3,355,000
Prepaid expense ............................................................. 76,631
--------------
Total assets ............................................................. 1,953,641,391
--------------
Liabilities:
Advisory fee payable (Note 2) ............................................... 303,967
Dividends payable ........................................................... 168,541
Accrued expenses ............................................................ 93,984
--------------
Total liabilities ........................................................ 566,492
--------------
Net Assets: (Equivalent to $1.00 per share, offering and redemption price,
based on 1,953,192,778 shares of beneficial interest outstanding) .......... $1,953,074,899
==============
</TABLE>
- --------------------------------------------------------------------------------
Merrill Lynch Institutional Tax-Exempt Fund
Statement of Operations
For the Year Ended April 30, 1999
================================================================================
<TABLE>
<S> <C> <C>
Investment Income:
Interest and discount earned (Note 1d) ............................ $68,693,927
-----------
Expenses:
Investment advisory fee (Note 2) ................ $ 8,910,128
Registration fees ............................... 430,653
Dividend and transfer agency fees ............... 217,493
Accounting and custodian services ............... 156,619
Legal and audit fees ............................ 29,268
Printing and shareholder reports ................ 23,522
Trustees' fees (Note 5) ......................... 19,509
Insurance ....................................... 10,501
Miscellaneous ................................... 17,387
------------
Total expense .............................. 9,815,080
Waived investment advisory fee (Note 2) ......... (4,885,992) 4,929,088
------------ -----------
Net investment income ........................................ 63,764,839
Net realized loss from investment transactions .................... (538)
-----------
Net Increase in Net Assets Resulting From Operations .............. $63,764,301
===========
</TABLE>
See Notes to Financial Statements.
54
<PAGE>
- --------------------------------------------------------------------------------
Merrill Lynch Institutional Tax-Exempt Fund
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended April 30,
-------------------------------------
1999 1998
================================================================================================================
<S> <C> <C>
Increase in Net Assets:
Operations:
Net investment income .................................................. $ 63,764,839 $ 54,181,204
Net realized loss from investment transactions ......................... (538) (15,572)
-------------- --------------
Net increase in net assets resulting from operations ................... 63,764,301 54,165,632
Total declared as dividends to shareholders (Note 4) ................... (63,752,758) (54,172,922)
Capital share transactions (Note 3) .................................... 148,621,747 800,793,413
-------------- --------------
Net increase in net assets ............................................. 148,633,290 800,786,123
Net Assets:
Beginning of period .................................................... 1,804,441,609 1,003,655,486
-------------- --------------
End of period, including undistributed net investment income of $134,601
and $134,601 and accumulated capital losses of $252,480 and $264,023
respectively (Note 1g and Note 4) ...................................... $1,953,074,899 $1,804,441,609
============== ==============
</TABLE>
- --------------------------------------------------------------------------------
Merrill Lynch Institutional Tax-Exempt Fund
Financial Highlights
<TABLE>
<CAPTION>
Year Ended April 30,
--------------------------------------------------------------------
1999 1998 1997 1996 1995
=====================================================================================================================
<S> <C> <C> <C> <C> <C>
Net Asset Value, beginning of period ........... $1.00 $1.00 $1.00 $1.00 $1.00
Net investment income ......................... .03 .04 .03 .04 .03
Dividends from net investment income .......... (.03) (.04) (.03) (.04) (.03)
----- ----- ----- ----- -----
Net Asset Value, end of period ................. $1.00 $1.00 $1.00 $1.00 $1.00
===== ===== ===== ===== =====
Total Return ................................... 3.22% 3.59% 3.41% 3.68% 3.20%
Ratios/Supplemental Data:
Net Assets, end of period (000) .............. $1,953,075 $1,804,442 $1,003,655 $667,205 $403,903
Ratio of expenses to average net assets
(before waiver) .............................. .49% .49% .52% .54% .56%
Ratio of expenses to average net assets
(after waiver) ............................... .24% .24% .27% .29% .31%
Ratio of net investment income, to average net
assets (before waiver) ....................... 2.92% 3.28% 3.12% 3.35% 2.90%
Ratio of net investment income, to average net
assets (after waiver) ........................ 3.17% 3.53% 3.37% 3.60% 3.15%
</TABLE>
See Notes to Financial Statements.
55
<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 June 15, 1998, Merrill Lynch Rated Institutional Fund commenced operations
as a separate series of the Trust. On January 27, 1997, Merrill Lynch Premier
Institutional Fund commenced operations 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 in
conformity with generally accepted accounting principles.
(a) The value of the Premier Institutional, Institutional, Rated
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. 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's portfolio
securities are carried at amortized cost which approximates market value.
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 accretion of discount) is recorded as earned.
(e) Prepaid registration fees are charged to income as the related shares
are sold.
(f) Repurchase agreements--The Premier Institutional Fund, the
Institutional Fund, the Rated 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) During the year ended April 30, 1999, Merrill Lynch Institutional
Tax-Exempt Fund reclassified amounts to reflect a decrease of $12,081 in both
accumulated capital losses and undistributed net investment income as a result
of permanent differences arising from different treatments of market discount
for book and tax purposes.
2. Investment Advisory Fees and Other
Transactions with Affiliates
FAM, a subsidiary of Merrill Lynch & Co., Inc., provides investment advisory
and corporate administrative services to the Trust for a fee, subject to
certain limitations, at the following annual rates:
56
<PAGE>
- --------------------------------------------------------------------------------
Merrill Lynch Funds For Institutions Series
Notes to Financial Statements -- Continued
================================================================================
<TABLE>
<S> <C>
Percentage of Average Daily Net Assets
-----------------------------------------
Premier Institutional
Fund ....................... .15%
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
Rated Institutional
Fund ....................... .20%
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>
During its initial offering period, FAM agreed to waive a portion of its
advisory fee for the Rated Institutional Fund. For the period ended April 30,
1999, the effective fee payable to FAM was 0.16% of the Fund's average daily
assets. FAM has agreed to waive a portion of its advisory fees for the
Institutional, Government, Treasury and Tax-Exempt Funds. 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 period ended April 30, 1999, FAM waived a portion of its fees
amounting to $10,424,799 for the Institutional Fund, $154,017 for the Rated
Institutional Fund, $2,872,035 for the Government Fund, $1,098,411 for the
Treasury Fund and $4,885,992 for the Institutional Tax-Exempt Fund.
All officers and certain trustees of the Trust are affiliated with Merrill
Lynch & Co., Inc.
3. Shares of Beneficial Interest
The Declaration of Trust permits the Trustees to issue an unlimited number of
shares of beneficial interest in the Premier Institutional Fund, Institutional
Fund, Rated Institutional Fund, Government Fund and Treasury Fund ($.01 par
value) and Institutional Tax-Exempt Fund ($.10 par value) of a single class. At
April 30, 1999, capital paid-in aggregated $10,629,868,833 for Premier
Institutional Fund, $8,061,745,017 for Institutional Fund, $437,668,275 for
Rated Institutional Fund, $2,636,793,744 for Government Fund, $680,384,704 for
Treasury Fund and $1,953,192,778 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,
----------------------------------
Premier Institutional Fund 1999 1998
- ----------------------------------- ----------------- --------------
<S> <C> <C>
Shares sold ....................... 118,945,464,135 80,884,136,647
Shares issued to shareholders
in reinvestment of dividends ..... 383,116,366 239,118,722
--------------- --------------
Total ........................... 119,328,580,501 81,123,255,369
Shares redeemed ................... 115,344,184,289 77,301,915,817
--------------- --------------
Net increase .................... 3,984,396,212 3,821,339,552
=============== ==============
<CAPTION>
Year Ended April 30,
----------------------------------
Institutional Fund 1999 1998
- ----------------------------------- ---------------- ---------------
<S> <C> <C>
Shares sold ....................... 44,168,257,580 42,976,137,621
Shares issued to shareholders
in reinvestment of dividends ..... 364,014,371 314,438,784
-------------- --------------
Total ........................... 44,532,271,951 43,290,576,405
Shares redeemed ................... 43,844,221,739 42,118,189,627
-------------- --------------
Net increase .................... 688,050,212 1,172,386,778
============== ==============
<CAPTION>
Period
Ended
April 30,
Rated Institutional Fund 1999
- ----------------------------------- ---------------
<S> <C>
Shares sold ....................... 4,497,694,629
Shares issued to shareholders
in reinvestment of dividends ..... 15,592,631
-------------
Total ........................... 4,513,287,260
Shares redeemed ................... 4,075,718,985
-------------
Net increase .................... 437,568,275
=============
</TABLE>
Prior to June 15, 1998 (commencement of operations) there were 100,000
shares of beneficial interest outstanding which were owned by FAM.
57
<PAGE>
- --------------------------------------------------------------------------------
Merrill Lynch Funds For Institutions Series
Notes to Financial Statements -- Continued
================================================================================
<TABLE>
<CAPTION>
Year Ended April 30,
---------------------------------
Government Fund 1999 1998
- ----------------------------------- ---------------- --------------
<S> <C> <C>
Shares sold ....................... 14,384,418,297 11,216,903,849
Shares issued to shareholders
in reinvestment of dividends ..... 115,470,085 100,120,146
-------------- --------------
Total ........................... 14,499,888,382 11,317,023,995
Shares redeemed ................... 13,977,888,964 11,220,047,484
-------------- --------------
Net increase .................... 521,999,418 96,976,511
============== ==============
<CAPTION>
Year Ended April 30,
---------------------------------
Treasury Fund 1999 1998
- ----------------------------------- ----------------- -------------
<S> <C> <C>
Shares sold ....................... 3,344,371,792 4,496,611,001
Shares issued to shareholders
in reinvestment of dividends ..... 33,682,662 31,614,356
------------- -------------
Total ........................... 3,378,054,454 4,528,225,357
Shares redeemed ................... 3,455,926,782 4,381,758,509
------------- -------------
Net increase (decrease) ......... (77,872,328) 146,466,848
============= =============
<CAPTION>
Year Ended April 30,
Institutional -------------------------------
Tax-Exempt Fund 1999 1998
- ----------------------------------- --------------- -------------
<S> <C> <C>
Shares sold ....................... 9,221,984,624 9,422,006,794
Shares issued to shareholders
in reinvestment of dividends ..... 59,822,347 50,969,555
------------- -------------
Total ........................... 9,281,806,971 9,472,976,349
Shares redeemed ................... 9,133,185,224 8,672,182,936
------------- -------------
Net increase .................... 148,621,747 800,793,413
============= =============
</TABLE>
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 Premier Institutional,
Institutional, Rated Institutional, Government and Treasury Funds are declared
from the total 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, 1999, the Institutional Tax-Exempt Fund had net capital loss
carryovers of $252,269 of which $90,891 expire in the year 2001, $17,520 expire
in 2002, $140,040 expire in 2003 and $3,818 expire in 2007.
5. Trustees' Fees
Each Trustee who is not affiliated with the Trust or its adviser is paid an
annual fee of $36,000 by the Trust. Trustees' fees are allocated among the six
series of the Trust based on the net assets under management.
58
<PAGE>
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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 Merrill Lynch Premier Institutional Fund,
Merrill Lynch Institutional Fund, Merrill Lynch Rated Institutional Fund,
Merrill Lynch Government Fund, Merrill Lynch Treasury Fund, and Merrill Lynch
Institutional Tax-Exempt Fund (the "Funds"), as of April 30, 1999, and the
related statements of operations, the statements of changes in net assets and
the financial highlights for each of the respective 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, 1999, by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of each of the
respective Funds of Merrill Lynch Funds For Institutions Series at April 30,
1999, the results of their operations, the changes in their net assets, and
their financial highlights for each of the respective periods presented in
conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
May 27, 1999
59
<PAGE>
[back cover]
- --------------------------------------------------------------------------------
ADMINISTRATOR & DISTRIBUTOR
Merrill Lynch Funds Distributor, Inc.
One Financial Center
Boston, Massachusetts 02111
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 8118
Boston, Massachusetts 02266-8118
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 Premier Institutional Fund
Merrill Lynch Institutional Fund
Merrill Lynch Rated Institutional Fund
Merrill Lynch Government Fund
Merrill Lynch Treasury Fund
Merrill Lynch Institutional Tax-Exempt Fund
================================================================================
Merrill Lynch
Funds For Institutions Series
================================================================================
Merrill Lynch Premier Institutional Fund
Merrill Lynch Institutional Fund
Merrill Lynch Rated Institutional Fund
Merrill Lynch Government Fund
Merrill Lynch Treasury Fund
Merrill Lynch Institutional Tax-Exempt Fund
Annual Report
April 30, 1999
