MERRILL LYNCH
STRATEGIC
DIVIDEND
FUND
FUND LOGO
Quarterly Report
October 31, 1994
This report is not authorized for use as an offer of sale or a
solicitation of an offer to buy shares of the Fund unless
accompanied or preceded by the Fund's current prospectus. Past
performance results shown in this report should not be considered
a representation of future performance. Investment return and
principal value of shares will fluctuate so that shares, when
redeemed, may be worth more or less than their original cost.
Merrill Lynch
Strategic Dividend Fund
Box 9011
Princeton, NJ
08543-9011
<PAGE>
MERRILL LYNCH STRATEGIC DIVIDEND FUND
Officers and
Trustees
Arthur Zeikel, President and Trustee
Ronald W. Forbes, Trustee
Charles C. Reilly, Trustee
Kevin A. Ryan, Trustee
Richard R. West, Trustee
Terry K. Glenn, Executive Vice President
Norman R. Harvey, Senior Vice President
Donald C. Burke, Vice President
Walter D. Rogers, Vice President and Portfolio Manager
Gerald M. Richard, Treasurer
Robert Harris, Secretary
Custodian
State Street Bank and Trust Company
One Heritage Drive, P2N
North Quincy, Massachusetts 02171
Transfer Agent
Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, Florida 32246-6484
(800) 637-3863
DEAR SHAREHOLDER
Concerns of increasing inflationary pressures continued to prompt
volatility in the US stock and bond markets during the October
quarter. In addition, the weakness of the US dollar in foreign
exchange markets prolonged stock and bond market declines. Early
in the period, the possibility of continued monetary policy
tightening by the Federal Reserve Board was predominant
in the minds of investors. However, a lower-than-expected rate
of growth reported for the US economy during the second calendar
quarter allayed inflationary concerns to some degree, despite
the fifth increase this year in short-term interest rates made
by the central bank in mid-August.
<PAGE>
Inflationary expectations surfaced again with the announcement of
significant upward revisions in industrial production and
capacity utilization for the May--July period. When the central
bank did not raise short-term interest rates at the late
September Federal Open Market Committee meeting, financial
markets rallied on the expectation that the US economy was not
overheating and therefore significant further monetary policy
tightening would not be necessary. Also encouraging were reports
that consumer spending is increasing at a lower rate than has
been the case in recent economic recoveries. Nevertheless,
shortly after the conclusion of the October quarter, investor
sentiment had again deteriorated. The report of better-than-
expected growth in gross domestic product for the three months
ended September 30, combined with evidence of a still-robust
manufacturing sector and renewed US dollar weakness, all
rekindled concerns that short-term interest rates would soon
resume their upward trend.
In the weeks ahead, investors will continue to assess economic
data and inflationary trends in order to gauge whether further
increases in short-term interest rates are imminent. Continued
indications of moderate and sustainable levels of economic
growth would be positive for the US capital markets.
Portfolio Matters
Merrill Lynch Strategic Dividend Fund's new purchases
outnumbered eliminations during the quarter ended October 31,
1994. With 11 new stocks added to the portfolio and four deleted,
the number of holdings in the Fund expanded to 49 by the end of
the quarter. The new additions included three consumer stocks,
four utility stocks (three electric companies and one telephone
company) and the remaining four stocks added were a building
company, a railroad, an international oil company and a bank. We
eliminated one chemical stock, a foreign airline and two regional
telephones. We also added to one existing position and made
partial reductions in 12 holdings. Over the past four fiscal
quarters, our strategy has been to further diversify Fund
investments by expanding into new sectors and industries in order
to benefit from the economic expansion.
We believe that the next group of stocks likely to benefit from
improving trends in earnings and revenues will be largely among
the consumer growth, consumer staples, capital growth and
technology sectors. Therefore we increased the Fund's exposure to
these sectors during the quarter ended October 31, 1994. Stocks
in the consumer growth and staples sectors have been in a long-
term underperformance phase. With current relative price/earnings
valuations at historic lows and generous dividend yields,
these stocks appear to be attractive total return investments. We
believe that the three consumer stocks added to the Fund--
Anheuser-Busch Companies, Inc., Avon Products, Inc., and Eli
Lilly and Co.--have these attributes.
<PAGE>
Anheuser-Busch is the largest domestic brewer of beer, accounting
for 44% of the US market. The company operates 13 breweries
across the country, selling under 12 separate brand names. Beer
brewing represents 75% of the company's total sales and virtually
all of the profits. The company's other businesses include a
baked goods area which consists of Eagle Snacks, and an
entertainment division which includes ten theme parks and the St.
Louis Cardinals baseball franchise. We expect earnings growth to
accelerate in coming quarters reflecting cost-reduction steps the
company initiated at its baking division and better beer pricing
trends.
Avon Products is the leading direct marketer of cosmetics,
toiletries, fashion jewelry and fragrances worldwide. Avon's
products are currently sold in 119 countries. In recent years,
the company has been expanding its strong consumer franchise to
overseas markets, especially Latin America and the Pacific Rim.
With a sharp increase in the number of women entering the
workforce, these markets offer some of the best opportunities for
unit growth and increased profits. The stock is attractively
priced at current levels given the anticipated 20% plus earnings
growth expectation, the low price/earnings valuation and attractive
dividend yield.
Eli Lilly is a producer of prescription drugs worldwide. Its most
important drugs are antibiotics (accounting for approximately 27%
of sales) including Ceclor, and central nervous system agents
(21% of sales) which include the antidepressant Prozac. In mid-
1994 the company announced plans to acquire PCS Health Systems,
the largest pharmacy benefits management firm in the United States,
for $4 billion in cash. Medical device businesses, which account
for about 20% of sales, are being divested. Lilly's strong core
pharmaceutical business and its solid late-stage research pipeline
are positioned well for double-digit earnings growth. The pending
acquisition of PCS will only enhance its growth prospects. Offering
an attractive current dividend yield, the stock deserves to sell at
least at an average stock market price/earnings multiple rather
than at a discount as it does currently.
In keeping with our late economic cycle theme, we added shares of
Armstrong World Industries, Inc.--primarily a manufacturer of
interior furnishings including floor coverings, building products
and furniture--to the Fund. The company's floor coverings and building
products, which account for over 70% of sales and profits, are not
dependent on new home construction, but rather on the home improvement
and refurbishing spending. Actions taken by the company to improve
productivity at most of its divisions are beginning to pay off,
and we expect further strong earnings improvement aided by continued
economic expansion. Selling at historically low valuations, the stock
is an attractive total return investment at current prices.
<PAGE>
We increased the Fund's exposure to the energy sector during the
October quarter with the addition of Exxon Corp. A major factor in
the world crude oil, natural gas and chemical industries, Exxon also
has substantial coal and mineral holdings. With the Exxon Valdez oil
spill damage suit essentially settled, the company is now poised to
resume its strong long-term earnings growth. Exxon has substantial oil
and gas reserves, a solid balance sheet and improving profits from
chemicals and international oil and gas production. In addition to
improving earnings, we look for an increase in the common stock
dividend in the near future.
Historically, the utility sector (electric, telephone and natural
gas companies) has had the greatest representation in the
portfolio. However, holdings of electric utilities have been
modest relative to the other two utility industry groups in the
past year. This strategy worked well for the Fund since electric
stocks significantly underperformed both the Standard & Poor's
500 and the two other utility groups over that period
of time. During the October quarter, we believed that electric
utilities had become attractively priced, and so we added shares
of three to the Fund: American Electric Power Co., Northern States
Power Co. and Wisconsin Energy Corp. All three stocks offer very
generous dividend yields, with some potential for dividend growth.
American Electric Power is an electric utility holding company
and the second largest system in the United States, serving
customers in seven states in the Midwest and South. Over 80% of
its power generation comes from coal, and the revenue
distribution is essentially evenly split among residential,
commercial, and industrial customers. There are no additions to
generating capacity planned in the near future. The utility is
complying with the Clean Air Act, the cost of which will be
recovered from ratepayers.
Northern States Power is a Minnesota-based electric and gas
utility providing service to customers in five upper Mid-
western states. The Minneapolis-St. Paul metropolitan area
represents two-thirds of electric revenues and just over half
of gas revenues. However, electricity accounts for about 85%
of the company's operating revenues. Sources of electric generation
are well distributed among coal, nuclear, purchased power and hydro.
Electric revenues are also well distributed, with no particular
dependence on any customer base. The company has already expended
significant funds to reduce emissions at its plants. Additional
construction expenditures may be required to comply with the
Clean Air Act, but these are not expected to be onerous.
<PAGE>
Wisconsin Energy, an electric and gas utility holding company
serving customers in Milwaukee, northern Wisconsin and the
Michigan Upper Peninsula, is probably one of the most financially
sound power companies in the United States. Its generating
requirements are derived primarily from coal, with nuclear meeting
the remainder. As with the other two electric companies, revenues by
customers are evenly spread among the three categories. There are
no baseload generating units planned in the near future.
We added Pacific Telesis Group to the Fund while eliminating two
other regional telephone stocks, Bell Atlantic Corp. and
Southwestern Bell Corp. This regional telephone's principal
service territory is California. The company has a well-planned
modernization program to enable it to compete effectively in a
changing environment. Pacific Telesis' shares are undervalued
relative to the other regional telephone companies and offer a
generous yield of nearly 7%, the highest in the industry. We see
significant capital appreciation potential.
Two stocks--Meridian Bancorp, Inc. and Union Pacific Corp.--which
the Fund had owned in the past and sold advantageously--were
added back to the portfolio after each sold off sharply. Meridian
is an attractive investment in light of its strong capital base,
solid asset quality and attractive banking franchise in eastern
Pennsylvania. Meridian shares are attractively priced, offering a
generous dividend yield. Union Pacific shares traded down sharply
after the company became a late bidder for Santa Fe Pacific Corp.
Union Pacific is the largest US railroad based on revenues. Its
system is strategically positioned linking the Pacific and Gulf
coasts with the Midwest. Continued healthy freight car shipments
should translate into solid earnings gains. Whether the company
succeeds in its acquisition of Santa Fe Pacific or not, at current
prices, we believe its shares offer an attractive opportunity
to own this profitable railroad.
Because we believe Xerox Corp. management is pursuing the right
strategy, which will continue to enhance shareholder value, we
added to our existing holdings. Proceeds for these purchases were
provided by eliminating four holdings and partially reducing our
exposure in 13 other stocks.
In Conclusion
We thank you for your investment in Merrill Lynch Strategic
Dividend Fund, and we look forward to reviewing our outlook
and strategy with you again in our next report to shareholders.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Walter D. Rogers)
Walter D. Rogers
Vice President and Portfolio Manager
November 16, 1994
<PAGE>
PERFORMANCE DATA
About Fund
Performance
Since October 21, 1994, investors have been able to purchase
shares of the Fund through the Merrill Lynch Select Pricing SM
System, which offers four pricing alternatives:
* Class A Shares incur a maximum initial sales charge (front-end
load) of 5.25% and bear no ongoing distribution or account
maintenance fees. Class A Shares are available only to eligible
investors.
* Class B Shares are subject to a maximum contingent deferred sales
charge of 4.00% if redeemed during the first year, decreasing 1.00%
each year thereafter to 0.00% after the fourth year. In addition,
they are subject to a distribution fee of 0.75% and an account
maintenance fee of 0.25%. These shares automatically convert to
Class D Shares after 8 years.
* Class C Shares are subject to a distribution fee of 0.75% and an
account maintenance fee of 0.25%. In addition, Class C Shares are
subject to a 1.00% contingent deferred sales charge if redeemed
within one year of purchase.
* Class D Shares incur a maximum initial sales charge of 5.25% and
an account maintenance fee of 0.25% (but no distribution fee).
The performance data for the Fund's Class A and Class B Shares
are presented in the "Performance Summary" and "Average Annual
Total Return" tables on pages 5, 6 and 7. Data for all of the
Fund's shares, including Class C and Class D Shares, are
presented in the "Recent Performance Results" table.
The "Recent Performance Results" table on page 6 shows
investment results before the deduction of any sales charges for
Class A and Class B Shares for the 12-month and 3-month periods
ended October 31, 1994 and for Class C and Class D Shares for the
period since inception through October 31, 1994. All data in this
table assume imposition of the actual total expenses incurred by
each class of shares during the relevant period.
None of the past results shown should be considered a
representation of future performance. Investment return and
principal value of shares will fluctuate so that shares, when
redeemed, may be worth more or less than their original cost.
<PAGE>
Average
Annual
Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 9/30/94 -2.06% -7.20%
Five Years Ended 9/30/94 +6.06 +4.92
Inception (11/29/88) through 9/30/94 +9.05 +8.05
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 9/30/94 -3.05% -6.65%
Five Years Ended 9/30/94 +4.98 +4.98
Inception (11/25/87) through 9/30/94 +8.53 +8.53
[FN]
*Maximum contingent deferred sales charge is 4% and is
reduced to 0% after 4 years.
**Assuming payment of applicable contingent deferred sales charge.
PERFORMANCE DATA (concluded)
Recent
Performance
Results
<TABLE>
<CAPTION>
12 Month 3 Month
10/31/94 7/31/94++ 10/31/93 % Change % Change++
<S> <C> <C> <C> <C> <C>
ML Strategic Dividend Fund Class A Shares* $12.00 $12.78 $13.83 -2.56%(1) +0.28%(2)
ML Strategic Dividend Fund Class B Shares* 11.99 12.77 13.81 -2.50(1) +0.27(2)
ML Strategic Dividend Fund Class C Shares* 11.99 11.84 -- -- +1.27
ML Strategic Dividend Fund Class D Shares* 12.01 11.85 -- -- +1.35
Standard & Poor's 500 Index** 472.35 458.26 467.83 +0.97 +3.07
ML Strategic Dividend Fund Class A Shares--Total Return* +0.95(3) +1.18(4)
ML Strategic Dividend Fund Class B Shares--Total Return* -0.06(5) +0.89(6)
ML Strategic Dividend Fund Class C Shares--Total Return* -- +1.27
ML Strategic Dividend Fund Class D Shares--Total Return* -- +1.35
Standard & Poor's 500 Index--Total Return** +3.84 +3.82
<PAGE>
<FN>
*Investment results shown do not reflect sales charges; results shown would be lower
if a sales charge was included.
**An unmanaged broad-based index comprised of common stocks. Total investment returns for
unmanaged indexes are based on estimates.
++Performance results shown for Class C and Class D Shares are since inception (10/21/94).
(1)Percent change includes reinvestment of $1.442 per share capital gains distributions.
(2)Percent change includes reinvestment of $0.797 per share capital gains distributions.
(3)Percent change includes reinvestment of $0.446 per share ordinary income dividends and
$1.442 per share capital gains distributions.
(4)Percent change includes reinvestment of $0.112 per share ordinary income dividends and
$0.797 per share capital gains distributions.
(5)Percent change includes reinvestment of $0.311 per share ordinary income dividends and
$1.442 per share capital gains distributions.
(6)Percent change includes reinvestment of $0.077 per share ordinary income dividends and
$0.797 per share capital gains distributions.
</TABLE>
<TABLE>
Performance
Summary--
Class A Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<C> <C> <C> <C> <C> <C>
11/29/88--12/31/88 $10.71 $10.56 $0.140 $0.156 + 1.37%
1989 10.56 12.50 -- 0.612 +24.61
1990 12.50 10.95 -- 0.725 - 6.70
1991 10.95 12.15 -- 0.516 +15.99
1992 12.15 12.75 -- 0.460 + 8.95
1993 12.75 12.74 0.645 0.456 + 8.66
1/1/94--10/31/94 12.74 12.00 0.797 0.347 + 3.44
------ ------
Total $1.582 Total $3.272
Cumulative total return as of 10/31/94: +67.40%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures assume reinvestment of all dividends and capital gains distributions
at net asset value on the ex-dividend date, and do not include sales charge;
results would be lower if sales charge was included.
</TABLE>
<PAGE>
<TABLE>
Performance
Summary--
Class B Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<C> <C> <C> <C> <C> <C>
11/25/87--12/31/87 $10.00 $10.02 -- $0.047 + 0.67%
1988 10.02 10.56 $0.266 0.465 +12.81
1989 10.56 12.49 -- 0.504 +23.40
1990 12.49 10.94 -- 0.604 - 7.68
1991 10.94 12.14 -- 0.393 +14.78
1992 12.14 12.75 -- 0.328 + 7.89
1993 12.75 12.74 0.645 0.315 + 7.54
1/1/94--10/31/94 12.74 11.99 0.797 0.247 + 2.53
------ ------
Total $1.708 Total $2.903
Cumulative total return as of 10/31/94: +76.67%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures assume reinvestment of all dividends and capital gains distributions at
net asset value on the ex-dividend date, and do not reflect deduction of
any sales charge; results would be lower if sales charge was deducted.
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS
<CAPTION>
Shares Percent of
EUROPE Industries Held Common Stocks Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
United Kingdom Chemicals 62,000 Imperial Chemical Industries PLC (ADR)* $ 2,744,492 $ 3,224,000 1.9%
Consumer Products 300,000 B.A.T. Industries PLC (ADR)* 3,820,375 4,256,250 2.4
Oil--International 55,000 Royal Dutch Petroleum PLC (ADR)* 3,070,590 6,407,500 3.7
Total Investments in Europe 9,635,457 13,887,750 8.0
<PAGE>
NORTH
AMERICA
Canada Telecommunications 142,000 BC Telecom, Inc. 2,669,047 2,625,157 1.5
Total Investments in Canada 2,669,047 2,625,157 1.5
United States Aerospace & Defense 95,000 Northrop Grumman Corp. 3,363,147 4,168,125 2.4
55,000 TRW Inc. 3,029,243 3,918,750 2.2
------------ ------------ ------
6,392,390 8,086,875 4.6
Banking 90,000 The Chase Manhattan Corp. 3,166,154 3,240,000 1.9
64,000 First Chicago Corp. 1,795,392 3,136,000 1.8
65,000 Meridian Bancorp, Inc. 1,795,625 1,876,875 1.1
100,000 National City Corp. 2,661,218 2,712,500 1.6
------------ ------------ ------
9,418,389 10,965,375 6.4
Beverages 33,000 Anheuser-Busch Companies, Inc. 1,779,855 1,674,750 1.0
Building Materials 42,000 Armstrong World Industries, Inc. 1,883,841 1,743,000 1.0
Chemicals 46,000 The Dow Chemical Co. 2,739,760 3,381,000 1.9
Cosmetics 22,000 Avon Products, Inc. 1,303,320 1,391,500 0.8
Drugs 40,000 Bristol-Myers Squibb Co. 1,826,550 2,335,000 1.3
Electrical Equipment 80,000 General Electric Co. 3,864,900 3,910,000 2.2
Financial Services 130,000 American Express Co. 2,777,310 3,997,500 2.3
72,000 Beneficial Corp. 2,763,271 2,817,000 1.6
------------ ------------ ------
5,540,581 6,814,500 3.9
Hardware Products 61,000 The Stanley Works Co. 2,557,835 2,424,750 1.4
Information 30,000 Xerox Corp. 3,036,462 3,075,000 1.8
Processing
Insurance 140,000 American General Corp. 2,888,143 3,850,000 2.2
60,000 CIGNA Corp. 3,420,450 3,952,500 2.3
60,000 Lincoln National Corp. 2,565,720 2,175,000 1.2
30,000 Marsh & McLennan Companies, Inc. 2,626,800 2,250,000 1.3
160,000 Ohio Casualty Corp. 5,117,500 4,680,000 2.7
------------ ------------ ------
16,618,613 16,907,500 9.7
<PAGE>
Metals 50,000 Carpenter Technology Corp. 3,167,183 2,825,000 1.6
100,000 Cyprus Amax Minerals Co. 2,627,429 2,662,500 1.5
------------ ------------ ------
5,794,612 5,487,500 3.1
Oil--International 60,000 Exxon Corp. 3,569,538 3,772,500 2.2
80,000 Mobil Corp. 3,581,850 6,880,000 3.9
110,000 Texaco Inc. 5,107,249 7,191,250 4.1
------------ ------------ ------
12,258,637 17,843,750 10.2
Oil Services 135,000 Halliburton Co. 4,039,632 4,995,000 2.9
Paper & Forest 143,100 Federal Paper Board Co., Inc. 3,118,974 4,293,000 2.5
Products 100,000 Union Camp Corp. 4,787,720 4,750,000 2.7
------------ ------------ ------
7,906,694 9,043,000 5.2
Pharmaceuticals 40,000 Lilly (Eli) & Co. 2,165,088 2,480,000 1.4
Photographic 80,000 Eastman Kodak Co. 3,213,841 3,850,000 2.2
Retail 100,000 Sears, Roebuck & Co. 2,750,766 4,950,000 2.8
Transportation 35,000 Union Pacific Corp. 1,752,100 1,710,625 1.0
Utilities--Electric 85,000 American Electric Power Co., Inc. 2,682,600 2,720,000 1.6
126,000 Consolidated Edison Co. of N.Y., Inc. 3,559,500 3,134,250 1.8
60,000 Northern States Power Co. 2,613,600 2,662,500 1.5
86,000 Public Service Co. of Colorado 2,768,078 2,343,500 1.3
80,000 Public Service Enterprise Group, Inc. 2,806,400 2,100,000 1.2
92,000 Texas Utilities Corp. 3,335,000 3,001,500 1.7
100,000 Wisconsin Energy Corp. 2,593,500 2,650,000 1.5
------------ ------------ ------
20,358,678 18,611,750 10.6
Utilities--Gas & 160,000 The Brooklyn Union Gas Co. 4,287,226 3,680,000 2.1
Gas Pipeline 130,000 Enron Corp. 1,415,992 4,208,750 2.4
155,000 NICOR Inc. 4,397,154 3,778,125 2.2
131,000 Sonat, Inc. 2,343,064 4,257,500 2.4
------------ ------------ ------
12,443,436 15,924,375 9.1
Utilities-- 60,000 Pacific Telesis Group 1,873,950 1,897,500 1.1
Telecommunication
Total Investments in the United States 131,519,930 149,502,750 85.6
<PAGE>
Total Investments in North America 134,188,977 152,127,907 87.1
Total Common Stocks 143,824,434 166,015,657 95.1
<CAPTION>
Face
Amount Short-Term Securities
<S> <C> <S>
Commercial Paper** $5,000,000 Pitney Bowes Inc., 4.82% due 11/23/1994 4,984,603 4,984,603 2.9
Repurchase 4,085,000 HSBC Holdings PLC, purchased on
Agreement*** 10/31/1994 to yield 4.77% to 11/01/1994 4,085,000 4,085,000 2.3
Total Short-Term Securities 9,069,603 9,069,603 5.2
Total Investments $152,894,037 175,085,260 100.3
============
Liabilities in Excess of Other Assets (452,747) (0.3)
------------ ------
Net Assets $174,632,513 100.0%
============ ======
Net Asset Class A--Based on net assets of $19,891,367 and
Value: 1,657,406 shares outstanding $ 12.00
============
Class B--Based on net assets of $154,684,830 and
12,896,763 shares outstanding $ 11.99
============
Class C--Based on net assets of $31,212 and 2,603
shares outstanding $ 11.99
============
Class D--Based on net assets of $25,104 and 2,090
shares outstanding $ 12.01
============
<FN>
*American Depositary Receipt (ADR).
**Commercial Paper is traded on a discount basis; the interest rates shown are
the discount rates paid at the time of purchase by the Fund.
***Repurchase Agreements are fully collateralized by US Government Obligations.
</TABLE>
<PAGE>
PORTFOLIO CHANGES
For the Quarter Ended October 31, 1994
Additions
American Electric Power Co., Inc.
Anheuser-Busch Companies, Inc.
Armstrong World Industries, Inc.
Avon Products, Inc.
Exxon Corp.
Lilly (Eli) & Co.
Meridian Bancorp, Inc.
Northern States Power Co.
Pacific Telesis Group
Union Pacific Corp.
Wisconsin Energy Corp.
Deletions
Bell Atlantic Corp.
Cathay Pacific Airways Ltd.
du Pont (E.I.) de Nemours & Co.
Southwestern Bell Corp.
Portfolio Information
For the Quarter Ended October 31, 1994
Percent of
Ten Largest Common Stock Holdings Net Assets
Texaco Inc. 4.1%
Mobil Corp. 3.9
Royal Dutch Petroleum PLC (ADR) 3.7
Halliburton Co. 2.9
Sears, Roebuck & Co. 2.8
Union Camp Corp. 2.7
Ohio Casualty Corp. 2.7
Federal Paper Board Co., Inc. 2.5
Sonat, Inc. 2.4
B.A.T. Industries PLC (ADR) 2.4
