MERRILL LYNCH
PENNSYLVANIA
MUNICIPAL
BOND FUND
FUND LOGO
Semi-Annual Report
January 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.
Merrill Lynch Pennsylvania
Municipal Bond Fund
Merrill Lynch Multi-State
Municipal Series Trust
Box 9011
Princeton, NJ
08543-9011
<PAGE>
TO OUR SHAREHOLDERS
The combination of heightened inflationary concerns, anticipation of
further tightening of monetary policy by the Federal Reserve Board
and the turmoil of the Mexican currency crisis all exerted negative
influences on the US financial markets during the January quarter.
On the positive side, increasing signs that the US economy may be
losing momentum suggested that most of the interest rate increases
for this economic cycle may be behind us. As a result of these
economic crosscurrents, the US stock and bond markets continued to
be volatile during the period.
The manufacturing sector proved to be the driving force behind the
US economy through the final quarter of 1994, making an important
contribution to the substantial increase in corporate earnings. US
companies have been successful at containing labor costs, which are
an important component of the inflation outlook. Growth in the
economy has not been translated into higher wages and benefits for
US workers. Consumer spending is growing at a slower pace than in
previous economic recoveries, but households are nonetheless
spending more than saving, as the personal savings rate fell to an
all-time annual low in 1994.
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 likely as 1995 unfolds. Despite the
widespread concerns about rising prices for raw materials and
incipient inflationary pressures, 1994's inflation results were as
positive as those in 1993, creating the best sustained inflation
performance in 30 years. However, it is not likely that such
positive inflation results will be duplicated in 1995. Investors
will also focus on the progress that the new Congress makes on both
reducing spending and the Federal budget deficit and passing tax
cuts that promote savings and investment. Legislative progress,
combined with continued indications of moderate and sustainable
levels of economic growth, would be positive for the US capital
markets. However, the lagged effects of higher interest rates could
slow the economy sharply and with it, the growth of corporate
profits.
The Municipal Market
The municipal bond market continued to exhibit considerable interest
rate volatility during the three months ended January 31, 1995.
Yields on A-rated municipal revenue bonds continued to rise
throughout November to a high of 7.37% as measured by the Bond Buyer
Revenue Bond Index. The tax-exempt bond market improved dramatically
for the remainder of the quarter, and yields fell by approximately
60 basis points (0.60%) to a four-month low of 6.78%. However, the
Index failed to capture much of the rally that occurred at the end
of January as market yields declined a further ten basis points into
the 6.65% range. Municipal bond prices have now recaptured most of
their declines of the last six months.
<PAGE>
This improvement in municipal bond prices during the January quarter
was largely the result of significant positive change in investor
sentiment. The series of interest rate increases engineered during
1994 have gone a long way in confirming the Federal Reserve Board's
anti-inflationary resolve. Additionally, the recent signs of a
weakening domestic economy, as well as the negative near-term impact
of the Kobe earthquake and Mexican currency situation, have allowed
investors to become more comfortable with the concept that the vast
majority of the recent rise in fixed-income rates has already
occurred and that yields during 1995 are more likely to remain
stable or decline than they are to significantly rise again.
Consequently, current yield levels are being viewed as attractive to
long-term investors.
In addition to this more positive outlook, the ongoing strong
technical position of the municipal bond market has only fostered
the increase in tax-exempt bond prices seen in recent months. Over
$25 billion in bond proceeds became available to investors at year-
end 1994 from bond maturities, coupon payments and early
redemptions. However, during the recent January quarter, new bond
issuance was less than $25 billion, down 50% from the January 1994
quarter. In January 1995, less than $7 billion in long-term
municipal securities were issued, making this past January's
issuance the lowest monthly total since the mid-1980s. Investor
demand has easily surpassed supply, causing bond prices to rise
rapidly. Also, as 1995 annual issuance is expected to be below the
recent historically low 1994 levels, this positive technical
environment should continue to support the recent improvements in
municipal bond prices into the coming quarters.
Portfolio Strategy
The three-month period ended January 31, 1995 saw continued
volatility in the municipal marketplace. The Federal Reserve Board
resumed its struggle to slow the economy and prevent inflation by
raising short-term interest rates for the sixth time in the past 11
months. The 75 basis point increase in the Federal Funds rate in
November gave investors confidence that the Federal Reserve Board
would succeed in controlling inflation, and ignited a bond rally
that brought long-term municipal yields down approximately 60 basis
points by quarter-end.
Our portfolio decisions throughout the January quarter were guided
by a cautious posture because we believe that more Federal Reserve
Board monetary policy tightening will be necessary to halt the
forward momentum of the US economy. When the economy begins to show
clear signs that tighter monetary policy is having the desired
impact, our investment strategy is expected to become more
aggressive. Until such time, emphasis is expected to be placed on
seeking an attractive level of tax-exempt income, call protection,
and credit quality during an uncertain period for fixed-income
securities.
<PAGE>
In Conclusion
We appreciate your ongoing interest in Merrill Lynch Pennsylvania
Municipal Bond Fund, and we look forward to assisting you with your
financial needs in the months and years to come.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Vincent R. Giordano)
Vincent R. Giordano
Vice President and Portfolio Manager
March 6, 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 4% 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 0.25% and an account
maintenance fee of 0.25%. These shares automatically convert to
Class D Shares after approximately 10 years.
*Class C Shares are subject to a distribution fee of 0.35% 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 4% and an
account maintenance fee of 0.10% (but no distribution fee).
Performance data for the Fund's Class A and Class B Shares are
presented in the "Recent Performance Results," "Performance Summary"
and "Average Annual Total Return" tables below and on page 4. Data
for Class C and Class D Shares are also presented in the "Recent
Performance Results" and "Aggregate Total Return" tables below and
on page 4. The "Recent Performance Results" table 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 January
31, 1995 and for Class C and Class D Shares for the since inception
and 3-month periods ended January 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 rep-
resentation 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
1/31/95 10/31/94 1/31/94++ % Change++ % Change
<S> <C> <C> <C> <C> <C>
Class A Shares* $10.68 $10.53 $11.77 -9.26% +1.42%
Class B Shares* 10.68 10.53 11.77 -9.26 +1.42
Class C Shares* 10.68 10.53 10.68 0.00 +1.42
Class D Shares* 10.69 10.54 10.68 +0.09 +1.42
Class A Shares--Total Return* -4.02(1) +2.96(2)
Class B Shares--Total Return* -4.51(3) +2.83(4)
Class C Shares--Total Return* +1.47(5) +2.80(6)
Class D Shares--Total Return* +1.70(7) +2.94(8)
Class A Shares--Standardized 30-day Yield 5.58%
Class B Shares--Standardized 30-day Yield 5.30%
Class C Shares--Standardized 30-day Yield 5.19%
Class D Shares--Standardized 30-day Yield 5.48%
<PAGE>
<FN>
*Investment results shown do not reflect sales charges; results
shown would be lower if a sales charge was included.
++Investment results for Class C and Class D Shares are since
inception (10/21/94).
(1)Percent change includes reinvestment of $0.606 per share ordinary
income dividends.
(2)Percent change includes reinvestment of $0.156 per share ordinary
income dividends.
(3)Percent change includes reinvestment of $0.551 per share ordinary
income dividends.
(4)Percent change includes reinvestment of $0.143 per share ordinary
income dividends.
(5)Percent change includes reinvestment of $0.142 per share ordinary
income dividends.
(6)Percent change includes reinvestment of $0.140 per share ordinary
income dividends.
(7)Percent change includes reinvestment of $0.156 per share ordinary
income dividends.
(8)Percent change includes reinvestment of $0.154 per share ordinary
income dividends.
</TABLE>
PERFORMANCE DATA (concluded)
Average Annual Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 12/31/94 -5.35% -9.13%
Inception (8/31/90)
through 12/31/94 +7.37 +6.36
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 12/31/94 -5.82% -9.40%
Inception (8/31/90)
through 12/31/94 +6.83 +6.83
[FN]
*Maximum contingent deferred sales charge is 4% and is reduced
to 0% after 4 years.
**Assuming payment of applicable contingent deferred sales charge.
<PAGE>
Aggregate Total Return
% Return % Return
Without CDSC With CDSC**
Class C Shares*
Inception (10/21/94)
through 12/31/94 -1.31% -2.28%
[FN]
*Maximum contingent deferred sales charge is 1% and is reduced
to 0% after 1 year.
**Assuming payment of applicable contingent deferred sales charge.
% Return Without % Return With
Sales Charge Sales Charge**
Class D Shares*
Inception (10/21/94)
through 12/31/94 -1.10% -5.06%
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
<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>
8/31/90--12/31/90 $10.00 $10.05 -- $0.237 + 2.90%
1991 10.05 10.61 -- 0.678 +12.75
1992 10.61 10.90 $0.005 0.660 + 9.31
1993 10.90 11.65 0.040 0.638 +13.39
1994 11.65 10.43 -- 0.606 - 5.35
1/1/95--1/31/95 10.43 10.68 -- 0.037 + 2.85
------ ------
Total $0.045 Total $2.856
Cumulative total return as of 1/31/95: +39.99%**
<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 payable 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>
8/31/90--12/31/90 $10.00 $10.05 -- $0.219 + 2.73%
1991 10.05 10.61 -- 0.626 +12.18
1992 10.61 10.90 $0.005 0.605 + 8.76
1993 10.90 11.65 0.040 0.580 +12.82
1994 11.65 10.43 -- 0.551 - 5.82
1/1/95--1/31/95 10.43 10.68 -- 0.033 + 2.82
------ ------
Total $0.045 Total $2.614
Cumulative total return as of 1/31/95: +36.91%**
*Figures may include short-term capital gains distributions.
**Figures assume reinvestment of all dividends and capital gains
distributions at net asset value on the payable date, and do not
reflect deduction of any sales charge; results would be lower if
sales charge was deducted.
</TABLE>
PORTFOLIO ABBREVIATIONS
To simplify the listings of Merrill Lynch Pennsylvania
Municipal Bond Fund's portfolio holdings in the Schedule
of Investments, we have abbreviated the names of many
of the securities according to the list below and at right.
AMT Alternative Minimum Tax (subject to)
GO General Obligation Bonds
HFA Housing Finance Authority
IDA Industrial Development Authority
IDR Industrial Development Revenue Bonds
LT Limited Tax
MVRICS Municipal Variable Rate Inverse Class Securities
PCR Pollution Control Revenue Bonds
RIB Residual Interest Bonds
S/F Single-Family
UPDATES Unit Price Daily Adjustable Tax-Exempt Securities
UT Unlimited Tax
VRDN Variable Rate Demand Notes
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (in Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
Pennsylvania--94.5%
<S> <S> <C> <S> <C>
AAA Aaa $ 500 Allegheny County, Pennsylvania, Airport Revenue Bonds (Great Pittsburgh
International Airport), AMT, Series C, 8.25% due 1/01/2016 (c)(h) $ 544
Allegheny County, Pennsylvania, Hospital Development Authority Revenue Bonds:
A1+ VMIGl++ 3,450 (Presbyterian Health Center), VRDN, Series A, 3.60% due 3/01/2020 (a)(c) 3,450
NR* VMIG1++ 700 (Presbyterian University Hospital), VRDN, Series B2, 3.60% due 3/01/2018 (a) 700
NR* A 2,000 (South Hills Health System), Series A, 6.50% due 5/01/2014 1,934
NR* A1 1,700 Allegheny County, Pennsylvania, IDA, Revenue Refunding Bonds (Commercial
Development Parkway Center Project), VRDN, Series A, 3.95% due 5/01/2009 (a) 1,700
AAA Aaa 475 Allegheny County, Pennsylvania, Institutional District Bonds, UT, Series 18,
7.30% due 4/01/2009 (c) 501
NR* Aaa 530 Allegheny County, Pennsylvania, Residential Finance Authority, S/F Mortgage
Revenue Bonds, Series L, 7.50% due 6/01/2015 (e) 551
AAA Aaa 750 Allegheny County, Pennsylvania, Sanitation Authority, Sewer Revenue Bonds,
Series C, 6.50% due 12/01/2001 (d)(f) 792
AAA Aaa 500 Beaver County, Pennsylvania, IDA, PCR, Refunding (Ohio Edison Project),
Series A, 7.75% due 9/01/2024 (d) 536
AAA Aaa 2,000 Bristol Township, Pennsylvania, School District, GO, Series A, 6.625% due
2/15/2002 (c)(f) 2,145
AAA Aaa 1,000 Bucks County, Pennsylvania, IDA, Revenue Bonds (Grand View Hospital Project),
7% due 7/01/2001 (b)(f) 1,091
NR* Aa 750 Central Bucks County, Pennsylvania, School District, GO, 6.90% due 2/01/2008 781
A- A3 500 Dauphin County, Pennsylvania, IDA, Water Development Revenue Bonds (Dauphin
Consolidated Water Supply), AMT, Series A, 6.90% due 6/01/2024 496
AAA Aaa 575 Delaware County, Pennsylvania, College Authority Revenue Bonds
(Haverford College), 7.375% due 11/15/2000 (c)(f) 637
A- NR* 2,425 Delaware County, Pennsylvania, Hospital Authority Revenue Bonds
(Riddle Memorial Hospital), 6.50% due 1/01/2022 2,235
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
Pennsylvania (continued)
<S> <S> <C> <S> <C>
A+ Aa3 $1,000 Delaware County, Pennsylvania, IDA, Revenue Refunding Bonds
(Resource Recovery Project), Series A, 8.10% due 12/01/2013 $ 1,058
AAA Aaa 2,450 Derry, Pennsylvania, Area School District, GO, 6.50% due 2/01/2001 (c)(f) 2,566
Erie County, Pennsylvania, IDA, PCR, Refunding (International Paper Co.):
A- A3 1,000 7.15% due 9/01/2013 1,019
A- A3 425 Series A, 7.60% due 9/01/2010 447
AAA Aaa 1,155 Exeter Township, Pennsylvania, School District, GO, UT, 6.65% due
5/15/2010 (d) 1,188
A- NR* 4,990 Gettysburg, Pennsylvania, Municipal Authority, College Revenue Refunding
Bonds (Gettysburg College Project), 6.60% due 2/15/2012 5,071
AAA Aaa 2,960 Hollidaysburg, Pennsylvania, Area School District, Improvement Bonds,
UT, 6.50% due 6/01/2020 (b) 2,993
NR* Baa1 1,500 Latrobe, Pennsylvania, IDA, College Revenue Bonds (Saint Vincent College
Project), 6.75% due 5/01/2024 1,475
BBB+ NR* 2,000 Lebanon County, Pennsylvania, Good Samaritan Hospital Authority, Revenue
Refunding Bonds (Good Samaritan Hospital Project), 6% due 11/15/2018 1,698
AAA Aaa 1,000 Lewisburg, Pennsylvania, Area School District, GO, UT, 6.25% due 6/01/2018 (c) 994
Luzerne County, Pennsylvania, IDA, Exempt Facilities Revenue Refunding Bonds
(Pennsylvania Gas & Water Co. Project), AMT, Series A:
BBB- Baa3 3,600 7.20% due 10/01/2017 3,604
AAA Aaa 2,000 7% due 12/01/2017 (b) 2,083
NR* Baa1 2,000 McKeesport, Pennsylvania, Hospital Authority Revenue Bonds (McKeesport
Hospital Project), 6.50% due 7/01/2008 1,909
Montgomery County, Pennsylvania, Higher Education and Health Authority, Hospital
Revenue Bonds:
AAA Aaa 2,500 (Abington Hospital), MVRICS, Series A, 8.795% due 6/01/2011 (b)(j) 2,600
NR* NR* 225 (Jeanes Health System Project), 8.625% due 7/01/2000 (f) 261
NR* NR* 575 (Jeanes Health System Project), 8.75% due 7/01/2000 (f) 669
BBB NR* 1,435 (Northwestern Corporation), 7% due 6/01/2012 1,382
BBB+ NR* 1,250 (Pottstown Memorial Medical Center Project), 7.35% due 11/15/2005 1,272
<PAGE>
BBB+ Baa2 2,665 Montgomery County, Pennsylvania, IDA, PCR, Refunding (Philadelphia Electric
Company), AMT, Series A, 7.60% due 4/01/2021 2,749
BBB+ NR* 475 Moon Transportation Authority, Pennsylvania, Highway Improvement Revenue
Bonds, 9.50% due 2/01/2016 (i) 515
A A2 3,000 New Morgan, Pennsylvania, IDA, Solid Waste Disposal Revenue Bonds
(New Morgan Landfill Company Inc. Project), AMT, 6.50% due 4/01/2019 2,754
AAA Aaa 3,300 North Penn, Pennsylvania, Water Authority Revenue Bonds, 7% due 11/01/2024 (d) 3,472
AAA Aaa 4,000 North Wales, Pennsylvania, Water Authority, Water Revenue Bonds,
7% due 11/01/2020 (d) 4,186
BBB NR* 2,095 Northampton County, Pennsylvania, Higher Education Authority Revenue
Bonds (Moravian College), 8.20% due 6/01/2011 2,320
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
Pennsylvania (continued)
<S> <S> <C> <S> <C>
BBB NR* $1,500 Northeastern Pennsylvania Hospital and Educational Authority, University
Revenue Refunding Bonds (Wilkes University), 5.625% due 10/01/2018 (l) $ 1,278
BBB- Baa2 1,500 Pennsylvania Economic Development Financing Authority, Exempt Facilities
Revenue Bonds (MacMillan Limited Partnership Project), AMT, 7.60%
due 12/01/2020 1,527
BBB+ Baa1 4,000 Pennsylvania Economic Development Financing Authority, Wastewater Treatment
Revenue Bonds (Sun Company Inc.--R & M Project), AMT, Series A, 7.60%
due 12/01/2024 4,131
AAA Aaa 2,000 Pennsylvania, HFA, Refunding, Rental Housing Bonds, 6.50% due 7/01/2023 (g) 1,962
Pennsylvania, HFA, RIB, AMT (j):
AA Aa 2,000 8.059% due 4/01/2025 1,645
AA Aa 1,000 Refunding, Series 1991-31C, 9.204% due 10/03/2023 1,016
NR* NR* 2,000 Pennsylvania Intergovernmental Cooperative Authority, City of Philadelphia
Funding Program, Special Tax Revenue Bonds, 6.80% due 6/15/2002 (f) 2,142
A NR* 2,000 Pennsylvania State Finance Authority, Revenue Refunding Bonds (Municipal
Capital Improvements Program), 6.60% due 11/01/2009 2,003
<PAGE>
AAA NR* 1,300 Pennsylvania State, GO, Series A, 7% due 5/01/2000 (f) 1,401
Pennsylvania State, HFA, S/F Mortgage Revenue Bonds, AMT:
AA Aa 1,730 Series 27, 8.15% due 10/01/2021 1,845
AA Aa 1,145 Series 28, 7.65% due 10/01/2023 1,204
AA Aa 2,165 Series 40, 6.90% due 4/01/2025 2,188
AA Aa 1,500 Series 41B, 6.65% due 4/01/2025 1,475
Pennsylvania State Higher Educational Facilities Authority, College and
University Revenue Bonds:
A+ NR* 1,000 (Carnegie Mellon University), 9% due 11/01/2009 1,067
NR* Baa 2,295 (Delaware Valley College of Science & Agriculture), 7% due 4/01/2022 2,281
AAA Aaa 270 (Drexel University), 1st Series, 7.70% due 5/01/2012 (c) 279
NR* NR* 1,030 (Pennsylvania College of Podiatric Medicine), 8.50% due 10/01/2014 1,087
BBB+ NR* 1,250 Refunding (Allegheny College Project), Series B, 6% due 11/01/2022 1,131
NR* P1 1,200 (Temple University), VRDN, 3.75% due 10/01/2009 (a) 1,200
Pennsylvania State Higher Educational Facilities Authority, Revenue
Refunding Bonds:
BBB+ NR* 2,300 (Drexel University), 6.375% due 5/01/2017 2,209
A+ Aa 2,000 (Thomas Jefferson University), Series A, 6.625% due 8/15/2009 2,055
Pennsylvania State, IDA, Economic Development Revenue Bonds:
AAA Aaa 3,440 6% due 1/01/2012 (b) 3,368
A- A 1,225 Series A, 7% due 7/01/2001 (f) 1,333
Pennsylvania State Turnpike Commission, Turnpike Revenue Bonds (d)(f):
AAA Aaa 250 Series H, 7.40% due 12/01/2000 277
AAA Aaa 1,500 Series J, 7.20% due 12/01/2001 1,659
Philadelphia, Pennsylvania, Authority for IDR:
AAA Aaa 375 (Conversion Project-PGH Development Corp.), 7% due 7/01/1999 (b)(f) 403
A+ NR* 1,895 (National Board of Medical Examiners Project), 6.75% due 5/01/2012 1,930
A-l VMIGl++ 200 (Philadelphia Airport Hotel), AMT, UPDATES, 3.85% due 12/01/2017 (a) 200
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
Pennsylvania (concluded)
<S> <S> <C> <S> <C>
Philadelphia, Pennsylvania, Gas Works Revenue Bonds:
AAA Aaa $ 500 12th Series B, 7% due 5/15/2020 (c)(k) $ 545
AAA Aaa 750 13th Series, 7.70% due 6/15/2001 (f) 844
BBB Baa1 2,925 Refunding, 14th Series A, 6.375% due 7/01/2014 2,816
<PAGE>
Philadelphia, Pennsylvania, Hospitals and Higher Education Facilities
Authority Revenue Bonds:
NR* Aaa 1,400 (Children's Hospital of Philadelphia Project), Series A, 6.50%
due 2/15/2002 (f) 1,494
A- NR* 1,015 (Children's Seashore House), Series A, 7% due 8/15/2017 1,002
A- NR* 1,355 (Children's Seashore House), Series B, 7% due 8/15/2022 1,331
BBB NR* 3,100 (Northwestern Corp.), 7.125% due 6/01/2018 3,111
AAA Aaa 500 Refunding (Magee Rehabilitation Hospital), 7% due 12/01/2005 (b) 538
AAA Aaa 1,000 Refunding (Magee Rehabilitation Hospital), 7% due 12/01/2010 (b) 1,054
BBB+ A 420 Refunding (Pennsylvania Hospital), 7.25% due 7/01/2014 425
BBB+ NR* 1,000 Refunding (Philadelphia MR Project), 6.20% due 8/01/2011 899
A- NR* 3,000 Refunding (Presbyterian Medical Center), 6.65% due 12/01/2019 2,835
BBB+ Baa1 2,500 Refunding (Temple University Hospital), Series A, 6.625% due 11/15/2023 2,262
Philadelphia, Pennsylvania, Municipal Authority, Revenue Refunding
Bonds (d)(f):
AAA Aaa 40 7.80% due 4/01/1998 43
AAA Aaa 360 7.80% due 4/01/2000 393
BBB Baa 1,000 Philadelphia, Pennsylvania, Water and Sewer Revenue Bonds, 16th Series,
7.50% due 8/01/2010 1,044
AAA Aaa 1,000 Reading, Pennsylvania, Refunding Bonds, GO, UT, 6.50% due 11/15/2002 (b)(f) 1,059
A1 Aaa 200 Sayre, Pennsylvania, Health Care Facilities Authority Revenue Bonds, VHA
(Pennsylvania Capital Financing Project), VRDN, Series B, 3.60%
due 12/01/2020 (a)(b) 200
A1 NR* 900 Schuylkill County, Pennsylvania, IDA, Resource Recovery Revenue Bonds
(Northeastern Power Company), VRDN, 3.80% due 2/01/2011 (a) 900
Scranton-Lackawanna, Pennsylvania, Health and Welfare Authority Revenue Bonds
(University of Scranton Project):
A- NR* 1,750 Refunding, Series A, 6.50% due 3/01/2013 1,764
NR* NR* 460 Series C, 7.50% due 6/15/2000 (f) 509
AAA Aaa 2,000 York County, Pennsylvania, GO, LT, South Western School District,
6.40% due 6/15/2012 (d) 2,051
AAA Aaa 1,000 York County, Pennsylvania, Hospital Authority Revenue Bonds (York
Hospital), 7% due 7/01/2001 (b)(f) 1,091
A1+ P1 300 York County, Pennsylvania, IDA, PCR, Refunding (Philadelphia Electric
Company), VRDN, Series A, 3.50% due 8/01/2016 (a) 300
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
Puerto Rico--3.2%
<S> <S> <C> <S> <C>
Puerto Rico Commonwealth, Aqueduct and Sewer Authority Revenue
Bonds, Series A:
A Baa $2,150 7.875% due 7/01/2017 $ 2,332
A Baa 310 7% due 7/01/2019 317
A Baa1 800 Puerto Rico Commonwealth, Highway Authority, Highway Revenue
Refunding Bonds, Series R, 6.75% due 7/01/2005 824
AAA NR* 740 Puerto Rico Commonwealth, Public Improvement, GO, 7.70% due 7/01/2000 (f) 832
Puerto Rico Electric Power Authority, Power Revenue Bonds:
AAA Baa1 100 Refunding, Series M, 8% due 7/01/1998 (f) 110
A- Baa1 190 Series O, 7.125% due 7/01/2014 197
Total Investments (Cost--$142,124)--97.7% 143,796
Variation Margin on Futures Contracts**--(0.1%) (68)
Other Assets Less Liabilities--2.4% 3,512
--------
Net Assets--100.0% $147,240
========
<FN>
(a)The interest rate is subject to change periodically based upon
prevailing market rates. The interest rate shown is the rate in
effect at January 31, 1995.
(b)AMBAC Insured.
(c)MBIA Insured.
(d)FGIC Insured.
(e)GNMA Collateralized.
(f)Prerefunded.
(g)FNMA Collateralized.
(h)Partial Prerefunded.
(i)Bank Qualified.
(j)The interest rate is subject to change periodically and inversely
based upon prevailing market rates. The interest rate shown is the
rate in effect at January 31, 1995.
(k)Escrowed to maturity.
(l)Portion of security held as collateral in connection with open
financial futures contracts.
++Highest short-term rating by Moody's Investors Service, Inc.
*Not Rated.
**Financial futures contracts sold as of January 31, 1995 were as
follows:
<PAGE>
Value
Number of Expiration (in Thousands)
Contracts Issue Date (Notes 1a & 1b)
145 US Treasury Bonds March 1995 $(14,713)
(Total Contract Price--$14,644) $(14,713)
========
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION
<TABLE>
Statement of Assets and Liabilities as of January 31, 1995
<CAPTION>
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$142,123,726) (Note 1a) $143,795,612
Cash 1,124,089
Receivables:
Interest $ 2,322,559
Securities sold 523,546
Beneficial interest sold 435,863 3,281,968
------------
Deferred organization expenses (Note 1e) 17,452
Prepaid registration fees and other assets (Note 1e) 29,306
------------
Total assets 148,248,427
------------
Liabilities: Payables:
Beneficial interest redeemed 579,272
Dividends to shareholders (Note 1f) 176,291
Variation margin (Note 1b) 67,969
Investment adviser (Note 2) 63,259
Distributor (Note 2) 47,508 934,299
------------
Accrued expenses and other liabilities 74,552
------------
Total liabilities 1,008,851
------------
Net Assets: Net assets $147,239,576
============
<PAGE>
Net Assets Class A Shares of beneficial interest, $.10 par value,
Consist of: unlimited number of shares authorized $ 223,168
Class B Shares of beneficial interest, $.10 par value,
unlimited number of shares authorized 1,131,861
Class C Shares of beneficial interest, $.10 par value,
unlimited number of shares authorized 5,391
Class D Shares of beneficial interest, $.10 par value,
unlimited number of shares authorized 18,583
Paid-in capital in excess of par 147,185,276
Accumulated realized capital losses on investments--net (2,927,245)
Unrealized appreciation on investments--net 1,602,542
------------
Net assets $147,239,576
============
Net Asset Value: Class A--Based on net assets of $23,828,532 and
2,231,679 shares of beneficial interest outstanding $ 10.68
============
Class B--Based on net assets of $120,849,320 and
11,318,608 shares of beneficial interest outstanding $ 10.68
============
Class C--Based on net assets of $575,739 and
53,907 shares of beneficial interest outstanding $ 10.68
============
Class D--Based on net assets of $1,985,985 and
185,831 shares of beneficial interest outstanding $ 10.69
============
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (continued)
<TABLE>
Statement of Operations
<CAPTION>
For the Six Months Ended
January 31, 1995
<S> <S> <C>
Investment Income Interest and amortization of premium and discount earned $ 4,934,081
(Note 1d):
<PAGE>
Expenses: Investment advisory fees (Note 2) 412,576
Distribution fees--Class B (Note 2) 309,617
Transfer agent fees--Class B (Note 2) 43,905
Printing and shareholder reports 35,225
Professional fees 32,673
Accounting services (Note 2) 19,072
Amortization of organization expenses (Note 1e) 8,234
Transfer agent fees--Class A (Note 2) 7,680
Pricing fees 7,412
Custodian fees 6,993
Registration fees (Note 1e) 6,346
Trustees' fees and expenses 3,828
Distribution fees--Class C (Note 2) 475
Account maintenance fees--Class D (Note 2) 421
Transfer agent fees--Class D (Note 2) 259
Transfer agent fees--Class C (Note 2) 59
Other 3,129
------------
Total expenses 897,904
------------
Investment income--net 4,036,177
------------
Realized & Realized loss on investments--net (2,664,941)
Unrealized Loss on Change in unrealized appreciation on investments--net (2,043,757)
Investments--Net ------------
(Notes 1b, 1d Net Decrease in Net Assets Resulting from Operations $ (672,521)
& 3): ============
See Notes to Financial Statements.
</TABLE>
<TABLE>
Statements of Changes in Net Assets
<CAPTION>
For the Six For the
Months Ended Year Ended
January 31, July 31,
Increase (Decrease) in Net Assets: 1995 1994
<S> <S> <C> <C>
Operations: Investment income--net $ 4,036,177 $ 7,585,449
Realized gain (loss) on investments--net (2,664,941) 96,923
Change in unrealized appreciation on investments--net (2,043,757) (5,481,887)
------------ ------------
Net increase (decrease) in net assets resulting from operations (672,521) 2,200,485
------------ ------------
<PAGE>
Dividends & Investment income--net:
Distributions to Class A (730,010) (1,539,524)
Shareholders Class B (3,276,770) (6,045,925)
(Note 1f): Class C (4,303) --
Class D (25,094) --
Realized gain on investments--net:
Class A -- (111,974)
Class B -- (480,111)
In excess of realized gain on investments--net:
Class A -- (49,607)
Class B -- (212,698)
------------ ------------
Net decrease in net assets resulting from dividends and
distributions to shareholders (4,036,177) (8,439,839)
------------ ------------
Beneficial Interest Net increase (decrease) in net assets derived from
Transactions beneficial interest transactions (6,708,719) 27,793,932
(Note 4): ------------ ------------
Net Assets: Total increase (decrease) in net assets (11,417,417) 21,554,578
Beginning of period 158,656,993 137,102,415
------------ ------------
End of period $147,239,576 $158,656,993
============ ============
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (continued)
<TABLE>
Financial Highlights
<CAPTION>
Class A
For the For the
Six Period
The following per share data and ratios have been derived Months Aug. 31,
from information provided in the financial statements. Ended 1990++ to
Jan. 31, For the Year Ended July 31, July 31,
Increase (Decrease) in Net Asset Value: 1995 1994 1993 1992 1991
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 11.00 $ 11.39 $ 11.04 $ 10.27 $ 10.00
Operating --------- --------- --------- --------- ---------
Performance: Investment income--net .31 .60 .63 .67 .61
Realized and unrealized gain (loss) on
investments--net (.32) (.33) .36 .77 .27
<PAGE> --------- --------- --------- --------- ---------
Total from investment operations (.01) .27 .99 1.44 .88
--------- --------- --------- --------- ---------
Less dividends and distributions:
Investment income--net (.31) (.60) (.63) (.67) (.61)
Realized gain on investments--net -- (.04) (.01) -- --
In excess of realized gain on
investments--net -- (.02) -- -- --
--------- --------- --------- --------- ---------
Total dividends and distributions (.31) (.66) (.64) (.67) (.61)
--------- --------- --------- --------- ---------
Net asset value, end of period $ 10.68 $ 11.00 $ 11.39 $ 11.04 $ 10.27
========= ========= ========= ========= =========
Total Investment Based on net asset value per share (.05%)+++ 2.37% 9.30% 14.53% 9.30%+++
Return:** ========= ========= ========= ========= =========
Ratios to Expenses, net of reimbursement .77%* .75% .69% .55% .39%*
Average ========= ========= ========= ========= =========
Net Assets: Expenses .77%* .75% .81% .97% 1.57%*
========= ========= ========= ========= =========
Investment income--net 5.80%* 5.30% 5.70% 6.33% 6.71%*
========= ========= ========= ========= =========
Supplemental Net assets, end of period (in thousands) $ 23,829 $ 28,239 $ 27,639 $ 17,144 $ 9,402
Data: ========= ========= ========= ========= =========
Portfolio turnover 25.70% 37.73% 9.69% 4.14% --
========= ========= ========= ========= =========
<FN>
++Commencement of Operations.
+++Aggregate total investment return.
*Annualized.
**Total investment returns exclude the effects of sales loads.
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (continued)
<TABLE>
Financial Highlights (continued)
<CAPTION>
Class B
For the For the
Six Period
The following per share data and ratios have been derived Months Aug. 31,
from information provided in the financial statements. Ended 1990++ to
Jan. 31, For the Year Ended July 31, July 31,
Increase (Decrease) in Net Asset Value: 1995 1994 1993 1992 1991
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 11.00 $ 11.39 $ 11.04 $ 10.27 $ 10.00
Operating --------- --------- --------- --------- ---------
Performance: Investment income--net .28 .54 .58 .62 .57
Realized and unrealized gain (loss) on
investments--net (.32) (.33) .36 .77 .27
<PAGE> --------- --------- --------- --------- ---------
Total from investment operations (.04) .21 .94 1.39 .84
--------- --------- --------- --------- ---------
Less dividends and distributions:
Investment income--net (.28) (.54) (.58) (.62) (.57)
Realized gain on investments--net -- (.04) (.01) -- --
In excess of realized gain on
investments--net -- (.02) -- -- --
--------- --------- --------- --------- ---------
Total dividends and distributions (.28) (.60) (.59) (.62) (.57)
--------- --------- --------- --------- ---------
Net asset value, end of period $ 10.68 $ 11.00 $ 11.39 $ 11.04 $ 10.27
========= ========= ========= ========= =========
Total Investment Based on net asset value per share (.31%)+++ 1.86% 8.75% 13.94% 8.81%+++
Return:** ========= ========= ========= ========= =========
Ratios to Expenses, excluding distribution fees and
Average net of reimbursement .78%* .75% .69% .56% .40%*
Net Assets: ========= ========= ========= ========= =========
Expenses, net of reimbursement 1.28%* 1.25% 1.19% 1.06% .90%*
========= ========= ========= ========= =========
Expenses 1.28%* 1.25% 1.32% 1.48% 2.07%*
========= ========= ========= ========= =========
Investment income--net 5.29%* 4.80% 5.19% 5.81% 6.21%*
========= ========= ========= ========= =========
Supplemental Net assets, end of period (in thousands) $ 120,849 $ 130,418 $ 109,463 $ 65,599 $ 30,435
Data: ========= ========= ========= ========= =========
Portfolio turnover 25.70% 37.73% 9.69% 4.14% --
========= ========= ========= ========= =========
<FN>
++Commencement of Operations.
+++Aggregate total investment return.
*Annualized.
**Total investment returns exclude the effects of sales loads.
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (concluded)
<PAGE>
<TABLE>
Financial Highlights (concluded)
<CAPTION>
The following per share data and ratios have been derived For the Period
from information provided in the financial statements. October 21, 1994++ to
January 31, 1995
Increase (Decrease) in Net Asset Value: Class C Class D
<S> <S> <C> <C>
Per Share Net asset value, beginning of period $ 10.68 $ 10.68
Operating ---------- ----------
Performance: Investment income--net .15 .17
Realized and unrealized gain on investments--net --++++ .01
---------- ----------
Total from investment operations .15 .18
---------- ----------
Less dividends:
Investment income--net (.15) (.17)
---------- ----------
Net asset value, end of period $ 10.68 $ 10.69
========== ==========
Total Investment Based on net asset value per share 1.47%+++ 1.70%+++
Return:** ========== ==========
Ratios to Expenses, excluding distribution and account maintenance fees .79%* .78%*
Average ========== ==========
Net Assets: Expenses 1.39%* .88%*
========== ==========
Investment income--net 5.44%* 5.96%*
========== ==========
Supplemental Net assets, end of period (in thousands) $ 576 $ 1,986
Data: ========== ==========
Portfolio turnover 25.70% 25.70%
========== ==========
<FN>
++Commencement of Operations.
++++Amount was less than $.01 per share.
+++Aggregate total investment return.
*Annualized.
**Total investment returns exclude the effects of sales loads.
See Notes to Financial Statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
Merrill Lynch Pennsylvania Municipal Bond Fund (the "Fund") is part
of Merrill Lynch Multi-State Municipal Series Trust (the "Trust").
The Fund is registered under the Investment Company Act of 1940 as a
non-diversified, open-end management investment company. These
unaudited financial statements reflect all adjustments which are, in
the opinion of management, necessary to a fair statement of the
results for the interim period presented. All such adjustments are
of a normal recurring nature. The Fund offers four classes of shares
under the Merrill Lynch Select Pricing SM System. Shares of Class A
and Class D are sold with a front-end sales charge. Shares of Class
B and Class C may be subject to a contingent deferred sales charge.
All classes of shares have identical voting, dividend, liquidation
and other rights and the same terms and conditions, except that
Class B, Class C and Class D Shares bear certain expenses related to
the account maintenance of such shares, and Class B and Class C
Shares also bear certain expenses related to the distribution of
such shares. Each class has exclusive voting rights with respect to
matters relating to its account maintenance and distribution
expenditures. The following is a summary of significant accounting
policies followed by the Fund.
(a) Valuation of investments--Municipal bonds and other portfolio
securities in which the Fund invests are traded primarily in the
over-the-counter municipal bond and money markets and are valued at
the last available bid price in the over-the-counter market or on
the basis of yield equivalents as obtained from one or more dealers
that make markets in the securities. Financial futures contracts and
options thereon, which are traded on exchanges, are valued at their
settlement prices as of the close of such exchanges. Short-term
investments with remaining maturities of sixty days or less are
valued at amortized cost, which approximates market value.
Securities and assets for which market quotations are not readily
available are valued at fair value as determined in good faith by or
under the direction of the Board of Trustees of the Trust, including
valuations furnished by a pricing service retained by the Trust,
which may utilize a matrix system for valuations. The procedures of
the pricing service and its valuations are reviewed by the officers
of the Trust under the general supervision of the Trustees.
(b) Derivative financial instruments--The Fund may engage in various
portfolio strategies to seek to increase its return by hedging its
portfolio against adverse movements in the debt markets. Losses may
arise due to changes in the value of the contract or if the
counterparty does not perform under the contract.
<PAGE>
* Financial futures contracts--The Fund may purchase or sell interest
rate futures contracts and options on such futures contracts for the
purpose of hedging the market risk on existing securities or the
intended purchase of securities. Futures contracts are contracts for
delayed delivery of securities at a specific future date and at a
specific price or yield. Upon entering into a contract, the Fund
deposits and maintains as collateral such initial margin as required
by the exchange on which the transaction is effected. Pursuant to
the contract, the Fund agrees to receive from or pay to the broker
an amount of cash equal to the daily fluctuation in value of the
contract. Such receipts or payments are known as variation margin
and are recorded by the Fund as unrealized gains or losses. When the
contract is closed, the Fund records a realized gain or loss equal
to the difference between the value of the contract at the time it
was opened and the value at the time it was closed.
(c) Income taxes--It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute substantially all of its
taxable income to its shareholders. Therefore, no Federal income tax
provision is required.
(d) Security transactions and investment income--Security
transactions are recorded on the dates the transactions are entered
into (the trade dates). Interest income is recognized on the accrual
basis. Discounts and market premiums are amortized into interest
income. Realized gains and losses on security transactions are
determined on the identified cost basis.
(e) Deferred organization expenses and prepaid registration fees--
Deferred organization expenses are charged to expense on a straight-
line basis over a five-year period. Prepaid registration fees are
charged to expense as the related shares are issued.
(f) Dividends and distributions--Dividends from net investment
income are declared daily and paid monthly. Distributions of capital
gains are recorded on the ex-dividend dates. Distributions in excess
of realized capital gains are due primarily to differing tax
treatments for futures transactions and post-October losses.
2. Investment Advisory Agreement and Transactions with Affiliates:
The Fund has entered into an Investment Advisory Agreement with Fund
Asset Management, L.P. ("FAM"). The general partner of FAM is
Princeton Services, Inc. ("PSI"), an indirect wholly-owned
subsidiary of Merrill Lynch & Co., Inc. ("ML & Co."), which is the
limited partner. The Fund had also entered into a Distribution
Agreement and Distribution Plans with Merrill Lynch Funds
Distributor, Inc. ("MLFD" or "Distributor"), a wholly-owned
subsidiary of Merrill Lynch Group, Inc.
<PAGE>
FAM is responsible for the management of the Fund's portfolio and
provides the necessary personnel, facilities, equipment and certain
other services necessary to the operations of the Fund. For such
services, the Fund pays a monthly fee based upon the average daily
value of the Fund's net assets at the following annual rates: 0.55%
of the Fund's average daily net assets not exceeding $500 million;
0.525% of average daily net assets in excess of $500 million but not
exceeding $1 billion; and 0.50% of average daily net assets in
excess of $1 billion. The Investment Advisory Agreement obligates
FAM to reimburse the Fund to the extent the Fund's expenses
(excluding interest, taxes, distribution fees, brokerage fees and
commissions, and extraordinary items) exceed 2.5% of the Fund's
first $30 million of average daily net assets, 2.0% of the next $70
million of average daily net assets, and 1.5% of the average daily
net assets in excess thereof. FAM's obligation to reimburse the Fund
is limited to the amount of the management fee. No fee payment will
be made to the Investment Adviser during any fiscal year which will
cause such expenses to exceed expense limitations at the time of
payment.
Pursuant to the distribution plans ("the Distribution Plans")
adopted by the Fund in accordance with Rule 12b-1 under the
Investment Company Act of 1940, the Fund pays the Distributor
ongoing account maintenance and distribution fees. The fees are
accrued daily and paid monthly at annual rates based upon the
average daily net assets of the shares as follows:
Account Distribution
Maintenance Fee Fee
Class B 0.25% 0.25%
Class C 0.25% 0.35%
Class D 0.10% --
Pursuant to a sub-agreement with the Distributor, Merrill Lynch,
Pierce, Fenner & Smith Inc. ("MLPF&S"), a subsidiary of ML & Co.,
also provides account maintenance and distribution services to the
Fund. The ongoing account maintenance fee compensates the
Distributor and MLPF&S for providing account maintenance services
to Class B, Class C and Class D shareholders. The ongoing
distribution fee compensates the Distributor and MLPF&S for
providing shareholder and distribution-related services to Class B
and Class C shareholders.
For the six-months ended January 31, 1995, MLFD earned underwriting
discounts and MLPF&S earned dealer concessions on sales of the
Fund's Class A and Class D Shares as follows:
<PAGE>
MLFD MLPF&S
Class A $815 $ 8,977
Class D $211 $19,146
MLPF&S received contingent deferred sales charges of $190,351
relating to transactions in Class B Shares of beneficial interest
for the six months ended January 31, 1995.
Financial Data Services, Inc. ("FDS"), a wholly-owned subsidiary of
ML & Co., is the Fund's transfer agent.
Accounting services are provided to the Fund by FAM at cost.
Certain officers and/or trustees of the Fund are officers and/or
directors of FAM, PSI, MLPF&S, FDS, MLFD, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the six months ended January 31, 1995 were $35,405,020 and
$40,378,056, respectively.
NOTES TO FINANCIAL STATEMENTS (concluded)
Net realized and unrealized gains (losses) as of January 31, 1995
were as follows:
Realized Unrealized
Gains (Losses) Gains (Losses)
Long-term investments $(2,671,662) $ 1,671,886
Financial futures contracts 6,721 (69,344)
Total $(2,664,941) $ 1,602,542
As of January 31, 1995, net unrealized appreciation for Federal
income tax purposes aggregated $1,671,886, of which $4,134,332
related to appreciated securities and $2,462,446 related to
depreciated securities. The aggregate cost of investments at January
31, 1995 for Federal income tax purposes was $142,123,726.
4. Beneficial Interest Transactions:
Net increase (decrease) in net assets derived from beneficial
interest transactions was $(6,708,719) and $27,793,932 for the six
months ended January 31, 1995 and the year ended July 31, 1994,
respectively.
<PAGE>
Transactions in shares of beneficial interest for each class were as
follows:
Class A Shares for the Six Months Dollar
Ended January 31, 1995 Shares Amount
Shares sold 190,964 $ 2,029,167
Shares issued to shareholders
in reinvestment of dividends 37,584 397,151
----------- -----------
Total issued 228,548 2,426,318
Shares redeemed (564,984) (5,994,537)
----------- -----------
Net decrease (336,436) $(3,568,219)
=========== ===========
Class A Shares for the Year Dollar
Ended July 31, 1994 Shares Amount
Shares sold 550,023 $ 6,297,702
Shares issued to shareholders
in reinvestment of dividends
and distributions 80,433 915,022
----------- -----------
Total issued 630,456 7,212,724
Shares redeemed (489,751) (5,530,577)
----------- -----------
Net increase 140,705 $ 1,682,147
=========== ===========
Class B Shares for the Six Months Dollar
Ended January 31, 1995 Shares Amount
Shares sold 940,306 $ 9,989,912
Shares issued to shareholders
in reinvestment of dividends 150,546 1,590,121
----------- -----------
Total issued 1,090,852 11,580,033
Shares redeemed (1,633,128) (17,238,350)
----------- -----------
Net decrease (542,276) $(5,658,317)
=========== ===========
<PAGE>
Class B Shares for the Year Dollar
Ended July 31, 1994 Shares Amount
Shares sold 3,466,071 $39,679,393
Shares issued to shareholders
in reinvestment of dividends
& distributions 296,534 3,370,692
----------- -----------
Total issued 3,762,605 43,050,085
Shares redeemed (1,515,856) (16,938,300)
----------- -----------
Net increase 2,246,749 $26,111,785
=========== ===========
Class C Shares for the Period
October 21, 1994++ to Dollar
January 31, 1995 Shares Amount
Shares sold 58,655 $ 613,541
Shares issued to shareholders
in reinvestment of dividends 100 1,047
----------- -----------
Total issued 58,755 614,588
Shares redeemed (4,848) (51,298)
----------- -----------
Net increase 53,907 $ 563,290
=========== ===========
<FN>
++Commencement of Operations.
Class D Shares for the Period
October 21, 1994++ to Dollar
January 31, 1995 Shares Amount
Shares sold 188,018 $ 1,977,990
Shares issued to shareholders
in reinvestment of dividends 1,969 20,509
----------- -----------
Total issued 189,987 1,998,499
Shares redeemed (4,156) (43,972)
----------- -----------
Net increase 185,831 $ 1,954,527
=========== ===========
<FN>
++Commencement of Operations.
<PAGE>
OFFICERS AND TRUSTEES
Arthur Zeikel, President and Trustee
Kenneth S. Axelson, Trustee
Herbert I. London, Trustee
Robert R. Martin, Trustee
Joseph L. May, Trustee
Andre F. Perold, Trustee
Terry K. Glenn, Executive Vice President
Donald C. Burke, Vice President
Vincent R. Giordano, Vice President
Kenneth A. Jacob, Vice President
Gerald M. Richard, Treasurer
Jerry Weiss, Secretary
Custodian
State Street Bank and Trust Company
P.O. Box 351
Boston, Massachusetts 02101
Transfer Agent
Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, Florida 32246-6484
(800) 637-3863
</TABLE>
