MERRILL LYNCH
STRATEGIC
DIVIDEND FUND
FUND LOGO
Quarterly Report
October 31, 1995
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.
<PAGE>
Merrill Lynch
Strategic Dividend Fund
Box 9011
Princeton, NJ
08543-9011
MERRILL LYNCH STRATEGIC DIVIDEND FUND
Officers and
Trustees
Arthur Zeikel, President and Trustee
Ronald W. Forbes, Trustee
Cynthia A. Montgomery, 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
<PAGE>
Transfer Agent
Merrill Lynch Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, Florida 32246-6484
(800) 637-3863
DEAR SHAREHOLDER
After losing momentum through the second calendar quarter of 1995,
it now appears that the US economic expansion has resumed. Gross
domestic product (GDP) growth for the three months ended September
30 was reported to be 4.2%, higher than generally expected.
September durable goods orders increased a surprisingly strong 3%,
and existing home sales rose to a near-record level. At the same
time, there is evidence that inflationary pressures remain subdued.
Reflecting the trend of renewed economic growth, and continued good
news on the inflation front, the Federal Reserve Board signaled no
near-term shift in monetary policy following its September meeting.
Thus, official interest rates may not be reduced further in the
immediate future.
One of the major developments during the October quarter was the
strengthening of the US dollar relative to the yen and the Deutsche-
mark. Improving interest rate differentials favoring the US
currency, combined with coordinated central bank intervention and
more positive investor sentiment, have helped to bolster the dollar
in foreign exchange markets. Other factors that appear to be
improving the US dollar's outlook in the near term are a pick-up in
capital flows to the United States and the prospect of increased
capital outflows from Japan. However, it remains to be seen if the
US dollar's strengthening trend can continue without significant
improvements in the US budget and trade deficits.
In the weeks ahead, investor interest will continue to focus on US
economic activity. Clear signs of a moderate, noninflationary
expansion could further benefit the US stock and bond markets. In
addition, should the current Federal budget deficit reduction
efforts now underway in Washington prove successful, the
implications would likely be positive for the US financial markets.
<PAGE>
Portfolio Matters
During the quarter ended October 31, 1995, Merrill Lynch Strategic
Dividend Fund's Class A, Class B, Class C and Class D Shares posted
total returns of +4.02%, +3.73%, +3.72% and +3.95%, respectively,
compared to the +4.11% total return of the Standard & Poor's 500
Index (S&P 500). (Results shown are before the deduction of sales
charges; results would be lower if sales charges were included. For
complete performance information, see pages 4--6 of this report to
shareholders.) Stocks within the financial and utility sectors,
which together represented nearly 50% of the Fund's equity holdings,
were among the best-performing in the S&P 500 Index during the
October quarter. The consumer staples and healthcare groups, which
each account for about 7% of the Fund's net assets, also benefited
Fund performance. In our July 31, 1995 shareholder letter, we
discussed our relatively conservative investment strategy which
includes investing in companies with strong financial positions
whose shares offer above-average dividend yields. The Fund's equity
holdings have an average yield of 4.12% compared to the S&P 500's
2.16%, an average S&P quality ranking of B+ or better, and trade at
an average of 1.9 times book value (65% of the S&P 500 price/book
value ratio) and at 80% of the stock market's trailing 12-month
price/earnings multiple. In the October quarter, defensive and
interest rate-sensitive stocks were favored as investor concerns
about interest rates eased and consolidation and merger activity
gained momentum in the banking and utility industries. The Fund
participated in this market move since nearly two-thirds of our net
assets were invested in these defensive and interest rate-sensitive
stocks.
As we reported in the July quarter, a major part of our investment
activities centered on repositioning our financial stock holdings,
primarily by adding a package of bank stocks, and thereby
significantly increasing our exposure to the group. That investment
decision was based on our belief that the group should produce
attractive returns because of solid fundamentals, attractive
valuations and the ongoing industry consolidation process. In the
October quarter, fortuitously three of our bank holdings became
takeover targets, resulting in their share prices rising sharply in
value. Financial stocks at October 31, 1995 accounted for 20% of the
Fund's net assets. We also changed the composition of our
telecommunications holdings during the July quarter. Our additions
to the Fund's portfolio were among the better-performing issues in
this industry group, and the telecommunications group also
outperformed the overall market.
<PAGE>
Transactions for the quarter ended October 31, 1995 included
establishing four new positions, eliminating five positions, adding
to an existing holding, and reducing 14 holdings. Since three of our
bank investments--Chemical Banking Corp., Integra Financial Corp.
and Meridian Bancorp, Inc.--became takeover targets, we chose to
eliminate those holdings and realized capital gains. We also sold
H.F. Ahmanson & Co. because the stock reached our price target. New
positions were established in First Commerce Corp. of New Orleans
and Patriot American Hospitality Inc. First Commerce is a $6.5
billion assets bank holding company operating in the Louisiana and
Mississippi Gulf markets. The stock of this fundamentally strong and
well-capitalized bank appears reasonably valued and provides an
attractive dividend yield. Patriot American is a real estate
investment trust specializing in luxury hotel properties, primarily
in Texas and the Southeastern United States. The stock offers an
attractive dividend yield and good profits and dividend growth
prospects. We also added to our holding in CoreStates Financial
Corp., as the stock tumbled on the merger announcement with Meridian
Bancorp, Inc. We view this merger with Meridian Bancorp as enhancing
CoreStates' revenues and earnings, which over time should be
reflected in the stock price.
We established new positions in E.I. du Pont de Nemours & Co. and
General Motors Corp., while at the same time, we eliminated our
holding in Imperial Chemical Industries PLC. We used the proceeds
from this sale and the partial reductions in 14 other holdings to
help fund our new positions. Du Pont, the largest chemical company in
the US with a dominant presence worldwide, is also a major
international integrated oil company through its ownership in
Conoco. An aggressive productivity enhancement program initiated
over a year ago is beginning to show results. Further asset sales
and cost-cutting could translate to an upward revaluation of the
stock. General Motors continues to improve productivity through cost
reductions and vehicle market penetration. Significant earnings
opportunities exist from further cost reductions as well as the
benefits from a European economic recovery. We believe the stock is
attractively priced.
Although we were disappointed with the performance of our energy
holdings during the October quarter, we believe this group, which
represented nearly 16% of the Fund's net assets, is attractively
valued, while offering well-covered and potentially growing
dividends.
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 upcoming semi-annual report to shareholders.
<PAGE>
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Walter D. Rogers)
Walter D. Rogers
Vice President and Portfolio Manager
November 20, 1995
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% if redeemed during the first year, decreasing 1% each
year thereafter to 0% after the fourth year. In addition, Class B
Shares are subject to a distribution fee of 0.75% and an account
maintenance fee of 0.25%. These shares automatically convert to
Class D Shares after approximately 8 years.
* Class C Shares are subject to a distribution fee of 0.75% and an
account maintenance fee of 0.25%. In addition, Class C Shares are
subject to a 1% contingent deferred sales charge if redeemed within
one year of purchase.
<PAGE>
* Class D Shares incur a maximum initial sales charge of 5.25% and
an account maintenance fee of 0.25% (but no distribution fee).
Performance data for all of the Fund's Shares are presented in the
"Recent Performance Results" and "Performance Summary" tables below
and on pages 5 and 6. Data for the Fund's Class A and Class B Shares
are presented in the "Average Annual Total Return" tables on page 6.
Data for Class C and Class D Shares are also presented in the
"Aggregate Total Return" tables on page 6.
The "Recent Performance Results" table shows investment results
before the deduction of any sales charges for all of the Fund's
shares for the 12-month and 3-month periods ended October 31, 1995.
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. Dividends paid to each class
of shares will vary because of the different levels of account
maintenance, distribution and transfer agency fees applicable to
each class, which are deducted from the income available to be paid
to shareholders.
<TABLE>
Recent
Performance
Results
<CAPTION>
12 Month 3 Month
10/31/95 7/31/95 10/31/94 % Change % Change
<S> <C> <C> <C> <C> <C>
ML Strategic Dividend Fund Class A Shares* $11.57 $12.24 $12.00 +13.18%(1) +3.22%(2)
ML Strategic Dividend Fund Class B Shares* 11.56 12.23 11.99 +13.16(1) +3.21(2)
ML Strategic Dividend Fund Class C Shares* 11.52 12.20 11.99 +12.82(1) +3.14(2)
ML Strategic Dividend Fund Class D Shares* 11.57 12.24 12.01 +13.07(1) +3.21(2)
Standard & Poor's 500 Index** 581.50 562.06 472.35 +23.11 +3.46
ML Strategic Dividend Fund Class A Shares--Total Return* +17.25(3) +4.02(4)
ML Strategic Dividend Fund Class B Shares--Total Return* +16.00(5) +3.73(6)
ML Strategic Dividend Fund Class C Shares--Total Return* +16.04(7) +3.72(8)
ML Strategic Dividend Fund Class D Shares--Total Return* +16.90(9) +3.95(10)
Standard & Poor's 500 Index--Total Return** +26.39 +4.11
<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.
(1)Percent change includes reinvestment of $1.869 per share capital
gains distributions.
(2)Percent change includes reinvestment of $1.071 per share capital
gains distributions.
(3)Percent change includes reinvestment of $0.421 per share ordinary
income dividends and $1.869 per share capital gains distributions.
(4)Percent change includes reinvestment of $0.098 per share ordinary
income dividends and $1.071 per share capital gains distributions.
(5)Percent change includes reinvestment of $0.295 per share ordinary
income dividends and $1.869 per share capital gains distributions.
(6)Percent change includes reinvestment of $0.065 per share ordinary
income dividends and $1.071 per share capital gains distributions.
(7)Percent change includes reinvestment of $0.333 per share ordinary
income dividends and $1.869 per share capital gains distributions.
(8)Percent change includes reinvestment of $0.070 per share ordinary
income dividends and $1.071 per share capital gains distributions.
(9)Percent change includes reinvestment of $0.397 per share ordinary
income dividends and $1.869 per share capital gains distributions.
(10)Percent change includes reinvestment of $0.090 per share
ordinary income dividends and $1.071 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
1994 12.74 10.70 1.596 0.465 + 0.17
1/1/95--10/31/95 10.70 11.57 1.071 0.303 +21.07
------ ------
Total $3.452 Total $3.693
Cumulative total return as of 10/31/95: +96.27%**
<PAGE>
<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>
<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
1994 12.74 10.71 1.595 0.333 - 0.82
1/1/95--10/31/95 10.71 11.56 1.071 0.209 +19.91
------ ------
Total $3.577 Total $3.198
Cumulative total return as of 10/31/95: +104.93%**
<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>
PERFORMANCE DATA (concluded)
<PAGE>
<TABLE>
Performance
Summary--
Class C Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<C> <C> <C> <C> <C> <C>
10/21/94--12/31/94 $11.84 $10.69 $0.798 $0.108 - 2.02%
1/1/95--10/31/95 10.69 11.52 1.071 0.225 +19.93
------ ------
Total $1.869 Total $0.333
Cumulative total return as of 10/31/95: +17.51%**
<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>
Performance
Summary--
Class D Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<C> <C> <C> <C> <C> <C>
10/21/94--12/31/94 $11.85 $10.71 $0.798 $0.115 - 1.88%
1/1/95--10/31/95 10.71 11.57 1.071 0.282 +20.74
------ ------
Total $1.869 Total $0.397
Cumulative total return as of 10/31/95: +18.48%**
<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.
<PAGE>
Average Annual
Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 9/30/95 +19.35% +13.09%
Five Years Ended 9/30/95 +11.96 +10.76
Inception (11/29/88) through 9/30/95 +10.50 + 9.63
<FN>
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 9/30/95 +18.08% +14.08%
Five Years Ended 9/30/95 +10.82 +10.82
Inception (11/25/87) through 9/30/95 + 9.70 + 9.70
<FN>
*Maximum contingent deferred sales charge is 4% and is reduced to 0%
after 4 years.
**Assuming payment of applicable contingent deferred sales charge.
Aggregate
Total Return
% Return % Return
Without CDSC With CDSC**
Class C Shares*
Inception (10/21/94) through 9/30/95 +18.59% +17.59%
<FN>
*Maximum contingent deferred sales charge is 1% and is reduced to 0%
after 1 year.
**Assuming payment of applicable contingent deferred sales charge.
<PAGE>
% Return Without % Return With
Sales Charge Sales Charge**
Class D Shares*
Inception (10/21/94) through 9/30/95 +19.57% +13.29%
<FN>
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
</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>
Netherlands Oil--International 25,000 Royal Dutch Petroleum PLC (ADR)* $ 1,430,640 $ 3,071,875 1.9%
Total Investments in the Netherlands 1,430,640 3,071,875 1.9
Spain Oil & Gas Producers 52,000 Repsol S.A. (ADR)* 1,661,156 1,540,500 1.0
Total Investments in Spain 1,661,156 1,540,500 1.0
United Oil--International 19,000 British Petroleum Co. PLC (ADR)* 1,676,727 1,676,750 1.1
Kingdom
Total Investments in the
United Kingdom 1,676,727 1,676,750 1.1
Total Investments in Europe 4,768,523 6,289,125 4.0
NORTH
AMERICA
United Aerospace & Defense 52,000 Northrop Grumman Corp. 1,861,886 2,977,000 1.9
States 30,000 TRW Inc. 1,663,738 1,972,500 1.2
------------ ------------ ------
3,525,624 4,949,500 3.1
Automobiles 60,000 General Motors Corp. 2,906,100 2,625,000 1.7
Automotive Equipment 72,000 Arvin Industries, Inc. 1,656,934 1,278,000 0.8
60,000 Dana Corp. 1,649,850 1,537,500 1.0
------------ ------------ ------
3,306,784 2,815,500 1.8
<PAGE>
Banks 20,000 Barnett Banks, Inc. 1,002,350 1,105,000 0.7
28,000 Boatmen's Bancshares, Inc. 1,004,500 1,060,500 0.7
55,000 The Chase Manhattan Corp. 1,934,896 3,135,000 2.0
74,000 CoreStates Financial Corp. 2,584,814 2,691,750 1.7
26,000 First Commerce Corp. 832,910 799,500 0.5
23,000 Mellon Bank Corp. 990,205 1,152,875 0.7
23,000 Mercantile Bancorporation 1,002,055 1,012,000 0.6
------------ ------------ ------
9,351,730 10,956,625 6.9
Chemicals 23,000 The Dow Chemical Co. 1,369,880 1,578,375 1.0
55,000 du Pont (E.I.) de Nemours & Co. 3,702,875 3,430,625 2.2
------------ ------------ ------
5,072,755 5,009,000 3.2
Cosmetics & 17,000 Avon Products, Inc. 1,009,895 1,209,125 0.8
Household Products 42,000 The Clorox Co. 2,495,108 3,013,500 1.9
------------ ------------ ------
3,505,003 4,222,625 2.7
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded)
<CAPTION>
NORTH
AMERICA Shares Percent of
(concluded) Industries Held Common Stocks Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
United Drugs 40,000 Bristol-Myers Squibb Co. $ 1,826,550 $ 3,050,000 1.9%
States 40,000 Eli Lilly & Co. 2,165,088 3,865,000 2.4
(concluded) ------------ ------------ ------
3,991,638 6,915,000 4.3
Electrical Equipment 65,000 General Electric Co. 3,140,231 4,111,250 2.6
Financial Services 70,000 American Express Co. 1,495,475 2,843,750 1.8
60,000 Beneficial Corp. 2,305,713 2,940,000 1.8
------------ ------------ ------
3,801,188 5,783,750 3.6
Food Merchandising 20,000 Lance, Inc. 360,000 337,500 0.2
Hardware Products 51,000 The Stanley Works 2,138,235 2,435,250 1.5
Information 25,000 Xerox Corp. 2,545,647 3,243,750 2.0
Processing
<PAGE>
Insurance 95,000 American General Corp. 1,961,793 3,123,125 2.0
50,000 Lincoln National Corp. 2,135,530 2,231,250 1.4
110,000 Ohio Casualty Corp. 3,512,187 3,905,000 2.4
------------ ------------ ------
7,609,510 9,259,375 5.8
Metals 70,000 Carpenter Technology Corp. 2,225,034 2,651,250 1.7
90,000 Cyprus Amax Minerals Co. 2,366,829 2,351,250 1.5
------------ ------------ ------
4,591,863 5,002,500 3.2
Miscellaneous 28,000 Minnesota Mining & Manufacturing
Technology Company 1,671,180 1,592,500 1.0
Oil--Domestic 30,000 Atlantic Richfield Co. 3,395,562 3,202,500 2.0
96,000 Phillips Petroleum Co. 3,323,722 3,096,000 2.0
------------ ------------ ------
6,719,284 6,298,500 4.0
Oil--International 55,000 Exxon Corp. 3,272,076 4,200,625 2.6
40,000 Mobil Corp. 1,804,050 4,030,000 2.5
50,000 Texaco Inc. 2,328,617 3,406,250 2.2
------------ ------------ ------
7,404,743 11,636,875 7.3
Paper & Forest 70,000 Federal Paper Board Co., Inc. 1,524,663 2,940,000 1.8
Products
Photography 50,000 Eastman Kodak Co. 2,030,861 3,131,250 2.0
Publishing/Printing 35,000 McGraw-Hill, Inc. 2,434,950 2,865,625 1.8
Real Estate 40,000 Avalon Properties, Inc. 846,650 780,000 0.5
28,000 Developers Diversified Realty Corp. 791,000 798,000 0.5
30,000 Patriot American Hospitality Inc. 720,000 731,250 0.5
35,000 Simon Property Group, Inc. 886,200 813,750 0.5
------------ ------------ ------
3,243,850 3,123,000 2.0
Retail 29,000 May Department Stores Co. 1,257,489 1,138,250 0.7
36,000 Sears, Roebuck & Co. 1,208,160 1,224,000 0.8
------------ ------------ ------
2,465,649 2,362,250 1.5
Savings & Loan 80,000 Great Western Financial Corporation 1,685,600 1,810,000 1.1
Transportation 35,000 Union Pacific Corp. 1,752,100 2,288,125 1.4
<PAGE>
Utilities--Electric 85,000 American Electric Power Co., Inc. 2,682,600 3,240,625 2.0
126,000 Consolidated Edison Co. of
New York, Inc. 3,559,500 3,827,250 2.4
84,000 Houston Industries Inc. 3,249,540 3,895,500 2.4
60,000 Northern States Power Co. 2,613,600 2,835,000 1.8
66,000 Public Service Co. of Colorado 2,137,905 2,252,250 1.4
64,000 Public Service Enterprise Group, Inc. 2,245,120 1,880,000 1.2
100,000 Wisconsin Energy Corp. 2,593,500 2,950,000 1.9
------------ ------------ ------
19,081,765 20,880,625 13.1
Utilities--Gas & 135,000 The Brooklyn Union Gas Co. 3,619,350 3,391,875 2.1
Gas Pipeline 130,000 NICOR Inc. 3,698,548 3,493,750 2.2
120,000 Sonat, Inc. 2,141,987 3,450,000 2.2
------------ ------------ ------
9,459,885 10,335,625 6.5
Utilities-- 69,000 GTE Corp. 2,455,578 2,846,250 1.8
Telecommunications 80,000 NYNEX Corp. 3,065,600 3,760,000 2.3
100,000 Southern New England
Telecommunications Corp. 3,431,713 3,612,500 2.3
58,000 Sprint Corporation 2,091,570 2,233,000 1.4
------------ ------------ ------
11,044,461 12,451,750 7.8
Total Investments in North America 126,365,299 149,382,750 93.9
Total Common Stocks 131,133,822 155,671,875 97.9
Face
Amount Short-Term Securities
Repurchase $3,488,000 UBS Securities Inc., purchased on
Agreements** 10/31/1995to yield 5.88% to 11/01/1995 3,488,000 3,488,000 2.2
Total Short-Term Securities 3,488,000 3,488,000 2.2
Total Investments $134,621,822 159,159,875 100.1
============
Liabilities in Excess of Other Assets (55,771) (0.1)
------------ ------
Net Assets $159,104,104 100.0%
============ ======
<PAGE>
Net Asset Class A--Based on net assets of $17,637,178
Value: and 1,524,768 shares outstanding $ 11.57
============
Class B--Based on net assets of $125,483,664
and 10,851,631 shares outstanding $ 11.56
============
Class C--Based on net assets of $1,076,715
and 93,496 shares outstanding $ 11.52
============
Class D--Based on net assets of $14,906,547
and 1,288,313 shares outstanding $ 11.57
============
<FN>
*American Depositary Receipts (ADR).
**Repurchase Agreements are fully collateralized by US Government &
Agency Obligations.
</TABLE>
PORTFOLIO CHANGES
For the Quarter Ended October 31, 1995
Additions
du Pont (E.I.) de Nemours & Co.
First Commerce Corp.
General Motors Corp.
Patriot American Hospitality Inc.
Deletions
Chemical Banking Corp.
H.F. Ahmanson & Co.
Imperial Chemical Industries PLC (ADR)
Integra Financial Corp.
Meridian Bancorp, Inc.
<PAGE>
PORTFOLIO INFORMATION
As of October 31, 1995
Percent of
Ten Largest Common Stock Holdings Net Assets
Exxon Corp. 2.6%
General Electric Co. 2.6
Mobil Corp. 2.5
Ohio Casualty Corp. 2.4
Houston Industries Inc. 2.4
Eli Lilly & Co. 2.4
Consolidated Edison Co. of New York, Inc. 2.4
NYNEX Corp. 2.3
Southern New England
Telecommunications Corp. 2.3
NICOR Inc. 2.2
