MERRILL LYNCH
GLOBAL
CONVERTIBLE
FUND, INC.
FUND LOGO
Annual 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
Global Convertible
Fund, Inc.
Box 9011
Princeton, New Jersey
08543-9011
<PAGE>
MERRILL LYNCH GLOBAL CONVERTIBLE FUND, INC.
Officers and
Directors
Arthur Zeikel, President and Director
Kenneth S. Axelson, Director
Herbert I. London, Director
Robert R. Martin, Director
Joseph L. May, Director
Andre F. Perold, Director
Terry K. Glenn, Executive Vice President
N. John Hewitt, Senior Vice President
Donald C. Burke, Vice President
Harry E. Dewdney, Vice President and Portfolio Manager
Gerald M. Richard, Treasurer
Mark B. Goldfus, Secretary
Custodian
State Street Bank & Trust Company
One Heritage Drive
Palmer Building
North Quincy, Massachusetts 02171
Transfer Agent
Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, Florida 32246-6484
(800) 637-3863
Important Tax
Information
(unaudited)
Of the ordinary income distributions paid quarterly by Merrill Lynch
Global Convertible Fund, Inc. during the year ended October 31,
1994, 35.09% qualifies for the dividends-received deduction for
corporations. Additionally, the Fund distributed long-term capital
gains of $0.081133 per share to shareholders of record as of
December 20, 1993.
The law varies in each state as to whether and what percentage of
dividend income attributable to Federal obligations is exempt from
state income tax. We recommend that you consult your tax adviser to
determine if any portion of the dividends you received is exempt
from state income tax.
<PAGE>
Listed below are the percentages of the Fund's total assets invested
in Federal obligations* as of the end of each quarter of the fiscal
year.
For the Quarter Ended Federal Obligations*
January 31, 1994 11.30%
April 30, 1994 10.39%
July 31, 1994 15.08%
October 31, 1994 16.85%
Of the Fund's dividends paid quarterly to shareholders from ordinary
income during the year ended October 31, 1994, 9.35% was
attributable to Federal obligations. In calculating the foregoing
percentage, expenses of the Fund have been allocated on a pro rata
basis.
[FN]
*For purposes of this calculation, Federal obligations include US
Treasury Notes, US Treasury Bills, and US Treasury Bonds. Also
included are obligations issued by the following agencies: Banks for
Cooperatives, Federal Intermediate Credit Banks, Federal Land Banks,
Federal Home Loan Banks, and the Student Loan Marketing Association.
Repurchase agreements are not included in this calculation.
TO OUR SHAREHOLDERS
As we review the past year's environment for Merrill Lynch Global
Convertible Fund, Inc., it is obvious that the key factor affecting
equity and bond markets was the rising interest rate climate.
Interest rates began to rise on February 4, 1994 when the Federal
Reserve Board made the first of a series of monetary policy
tightenings that do not appear to be over yet. These moves have
played a major role in the poor performance of most world markets
and have also affected foreign exchange markets.
<PAGE>
As the US economy continues to be rather strong with little signs of
a slowdown, fears of renewed inflation seem to be the guiding factor
in the Federal Reserve Board's actions. The bond market has
responded rather negatively to the rise in interest rates and the
expectation that more hikes are on the way. Equity markets in the
United States have been concentrating more on the good earnings
reports of the third quarter, although price swings have been
volatile. It remains to be seen in the coming weeks and months
whether the economy will continue to be strong, leading to possibly
higher interest rates or whether the Federal Reserve Board's
tightening actions since February will lead to an economic slowdown.
If the latter scenario unfolds, there could be sharp and extensive
bond and equity rallies.
Overseas markets have been generally lower in 1994, again responding
negatively to the Federal Reserve Board's interest rate tightening
operations. European equity markets especially were lower with a
few exceptions. In London, for example, the unmanaged Financial
Times SE 100 Index has been down over 9% in 1994. Asian markets have
given up good portions of their 1993 gains, with Hong Kong down over
18%. Conversely, Japanese equity markets have been quite firm with
the Nikkei 225 Index up over 14% for 1994.
The US dollar compared to most other world currencies has been weak
most of the year, in spite of higher interest rates. In our opin-
ion, one reason for this weakness has been the vast amount of money
leaving the United States for investment abroad. This could be in
part because of our balance of payment deficits, the political
situation and inflationary concerns.
At some point, rising interest rates should help US assets remain at
home, leading to some support for the US dollar. On the other hand,
foreign investors could withdraw money from the United States if
they fear capital losses on their US bond and equity investments.
Again, it remains to be seen how the Federal Reserve Board handles
the envisioned inflation threat. Too much tightening could lead to a
softer economy, too little action could aggravate inflation worries.
Portfolio Strategy
During the Fund's fiscal year ended October 31, 1994, the port-
folio's geographic asset allocation reflected our investment
outlook. The US portion of the portfolio represents 62% of the
Fund's net assets as of October 31, 1994. Of the 38% balance,
approximately 19% is in Japan where we have benefited from the
strong equity market and very strong Japanese yen relative to the US
dollar. We have holdings of less than 2% in each of the following
countries: Hong Kong, Australia, France and Switzerland. Our
holdings in the United Kingdom of 8% have been aided by a strong
pound sterling relative to the US dollar. We also held approximately
5% in Canada. This diversified portfolio has carried us through some
rather difficult markets in fairly good shape, especially since we
have avoided to a large degree some of the poor performing areas of
the world.
<PAGE>
It is our opinion that the coming weeks and months will bring
continued turbulence and volatility to most world markets. However,
we feel that once interest rates have topped out as the economy
slows, there will be very good opportunities to take advantage of
the weakness that has occurred in bond markets, especially
convertibles which have suffered from higher interest rates and
mostly lower equity markets.
Fiscal Year in Review
For the fiscal year ended October 31, 1994, the Fund's Class A and
Class B Shares had total returns of +0.61% and -0.37%, respectively,
as compared to a +3.84% total return for the unmanaged Standard &
Poor's 500 Average. (Results shown do not include sales charges; if
sales charges were included, results would be lower. Complete
performance results, including average annual total returns, can be
found on pages 4, 5 and 6 of this report to shareholders.)
The shortfall in the Fund's performance relative to the S&P 500 is
because of the extremely poor performance of bond markets--
corporate, government and convertibles--for the year under review,
especially when the Federal Reserve Board began to increase interest
rates. At the same time, equity markets have held up rather well,
although they have been very volatile and erratic. For example, on
October 28, 1994, the S&P 500 was up 1.7%, then fell over 2.0% in
the first days of November. Our Fund's largest offshore holding of
20% in Japanese issues performed well since the Japanese equity
markets were quite firm. The very strong yen versus the US dollar
also helped mitigate results from the poor performance of bond
markets in the United States. Most world equity markets retreated
from the high levels of 1993, affording little in the way of total
return. Since the Fund does invest primarily in convertible
securities which are subject to both interest rate and equity price
movements worldwide, we attempt to structure our portfolio to market
conditions as we perceive them. During the 12 months ended October
31, 1994, we maintained larger cash positions than normal and took
actions we deemed appropriate to protect our shareholders' capital
during rather difficult times. All in all, while we would have liked
to have achieved better total returns during the Fund's fiscal year,
the results must be viewed within the context of the rather weak and
volatile market conditions that prevailed during the year.
In Conclusion
We thank you for your investment in Merrill Lynch Global Convertible
Fund, Inc., and we look forward to reviewing our investment outlook
and strategy with you again in our upcoming quarterly report to
shareholders.
<PAGE>
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Harry E. Dewdney)
Harry E. Dewdney
Vice President and
Portfolio Manager
November 30, 1994
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 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.
* 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 the Fund's Class A Shares and Class B Shares
are presented in the "Performance Summary" and "Average Annual Total
Return" tables on pages 5 and 6. Data for all of the Fund's shares,
including Class C and Class D Shares, are presented in the "Recent
Performance Results" table.
<PAGE>
The "Recent Performance Results" table below 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.
PERFORMANCE DATA
<TABLE>
Recent
Performance
Results
<CAPTION>
12 Month 3 Month
10/31/94 7/31/94++ 10/31/93 % Change % Change++
<S> <C> <C> <C> <C> <C>
ML Global Convertible Fund, Inc. Class A Shares* $10.75 $10.74 $11.08 -2.24%(1) +0.09%
ML Global Convertible Fund, Inc. Class B Shares* 10.80 10.80 11.13 -2.23(1) 0.00
ML Global Convertible Fund, Inc. Class C Shares* 10.81 10.74 -- -- +0.65
ML Global Convertible Fund, Inc. Class D Shares* 10.76 10.69 -- -- +0.65
ML Global Convertible Fund, Inc. Class A Shares--Total Return* +0.61(2) +0.44(3)
ML Global Convertible Fund, Inc. Class B Shares--Total Return* -0.37(4) +0.12(5)
ML Global Convertible Fund, Inc. Class C Shares--Total Return* -- +0.65
ML Global Convertible Fund, Inc. Class D Shares--Total Return* -- +0.65
Dow Jones Industrial Average** 3,908.12 3,764.50 3,680.59 +6.18 +3.82
S&P 500 Index** 472.35 458.26 467.83 +0.97 +3.07
Japan Nikkei Dow Jones 225** 19,989.60 20,449.39 19,438.24 +2.84 -2.25
London Financial Times Index** 3,097.40 3,082.60 3,164.40 - 2.12 +0.48
<PAGE>
<FN>
++Investment results shown for Class C and Class D Shares are since
inception (10/21/94).
*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.
(1)Percent change includes reinvestment of $0.081 per share capital
gains distributions.
(2)Percent change includes reinvestment of $0.308 per share ordinary
income dividends and $0.081 per share capital gains distributions.
(3)Percent change includes reinvestment of $0.036 per share ordinary
income dividends.
(4)Percent change includes reinvestment of $0.204 per share ordinary
income dividends and $0.081 per share capital gains distributions.
(5)Percent change includes reinvestment of $0.013 per share ordinary
income dividends.
</TABLE>
Total Return
Based on a
$10,000
Investment
GRAPHIC MATERIAL APPEARS HERE. SEE APPENDIX,
GRAPHIC AND IAMGE MATERIAL: ITEM 1.
Average Annual Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 9/30/94 +0.41% -4.86%
Five Years Ended 9/30/94 +6.34 +5.20
Inception (11/4/88) through 9/30/94 +7.03 +6.05
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
<PAGE>
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 9/30/94 -0.55% -4.42%
Five Years Ended 9/30/94 +5.27 +5.27
Inception (2/26/88) through 9/30/94 +5.63 +5.63
[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)
<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>
11/4/88--12/31/88 $ 9.97 $ 9.76 $0.173 $0.101 + 0.68%
1989 9.76 9.50 0.431 0.483 + 6.83
1990 9.50 8.20 0.047 0.497 - 8.07
1991 8.20 9.06 0.151 0.382 +17.22
1992 9.06 9.67 0.123 0.267 +11.12
1993 9.67 10.68 0.081 0.327 +14.74
1/1/94--10/31/94 10.68 10.75 -- 0.131 + 1.89
------ ------
Total $1.006 Total $2.188
Cumulative total return as of 10/31/94: +50.56%**
<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 a 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>
2/26/88--12/31/88 $10.00 $ 9.77 $ 0.173 $0.313 + 2.63%
1989 9.77 9.51 0.431 0.376 + 5.68
1990 9.51 8.25 0.047 0.373 - 8.94
1991 8.25 9.12 0.151 0.284 +15.99
1992 9.12 9.74 0.123 0.166 + 9.99
1993 9.74 10.74 0.081 0.228 +13.48
1/1/94--10/31/94 10.74 10.80 -- 0.054 + 1.07
------ ------
Total $1.006 Total $1.794
Cumulative total return as of 10/31/94: +44.53%**
<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 a
sales charge was deducted.
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (in US dollars)
<CAPTION>
NORTH Shares Value Percent of
AMERICA Industries Held Common Stocks Cost (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C>
United States Chemicals 5,000 Witco Corp. $ 145,300 $ 140,000 0.23%
Metals & Mining 10,000 ++WHX Corp. 179,350 150,000 0.24
Oil & Related 10,000 Exxon Corp. 615,700 628,750 1.02
Total Investments in United
States Common Stocks 940,350 918,750 1.49
<PAGE>
<CAPTION>
Convertible Preferred Stocks
<S> <S> <C> <S> <C> <C> <C>
Canada Oil & Gas 10,000 Occidental Petroleum Corp.,
Producers Pfd., Series A 500,700 502,500 0.82
Total Investments in Canadian
Convertible Preferred Stocks 500,700 502,500 0.82
United States Automotive 3,000 Goodrich (B.F.) Company, $3.50
Parts Pfd., Series D 164,550 150,375 0.25
Chemicals 20,000 Ashland Oil Inc., $6.25 Pfd. 1,065,800 1,265,000 2.06
Data 20,000 UNISYS Corp., $3.75 Pfd.,
Processing Series A 1,233,875 692,500 1.13
Food/Beverage/ 30,000 ConAgra Inc., Pfd., Class E 998,025 993,750 1.62
Tobacco & Household
Forest Products/ 10,000 Federal Paper Board Co.,
Paper & Packaging $2.875 Pfd. 489,550 562,500 0.92
5,000 James River Corp. of Virginia,
$3.375 Pfd. A, Series K 223,000 198,750 0.32
----------- ----------- -------
712,550 761,250 1.24
Metals & Mining 10,000 USX Corp., $3.25 Pfd. 505,800 503,750 0.82
5,000 WHX Corp., Pfd. 256,650 270,625 0.44
20,000 WHX Corp., Pfd. B 1,000,150 990,000 1.61
----------- ----------- -------
1,762,600 1,764,375 2.87
Transportation 20,000 Delta Airlines, Inc., $3.50
Pfd. C 1,010,350 957,500 1.56
Total Investments in United
States Convertible Preferred
Stocks 6,947,750 6,584,750 10.73
<PAGE>
<CAPTION>
Face
Amount Convertible Bonds
<S> <S> <S> <C> <S> <C> <C> <C>
Canada Oil & Related US$ 2,000,000 Amoco Canada Petro Co., Ltd.,
7.375% due 9/01/2013 2,391,500 2,470,000 4.03
Total Investments in Canadian
Convertible Bonds 2,391,500 2,470,000 4.03
United States Building & 1,200,000 Masco Corp., 5.25% due
Construction 2/15/2012 1,027,750 987,000 1.61
Computer 500,000 Cray Research, Inc., 6.125%
Services due 2/01/2011 510,000 357,500 0.58
Electronics 1,600,000 Texas Instruments, Inc., 2.75%
due 9/29/2002 1,555,250 1,552,000 2.53
Food & 1,000,000 American Brands Inc., 5.75%
Beverage due 4/11/2005 1,167,500 1,137,500 1.85
Forest Products/ 1,200,000 Mead Corp., 6.75% due
Paper & Packaging 9/15/2012 1,199,250 1,224,000 2.00
Insurance 2,000,000 Chubb Capital Corp., 6% due
5/15/1998 2,018,750 2,015,000 3.28
Leisure 800,000 Time Warner Inc., 8.75% due
1/10/2015 802,000 791,000 1.29
Metals & Mining 1,600,000 Homestake Mining Co., 5.50%
due 6/23/2000 1,688,000 1,680,000 2.74
300,000 USX Corp., 7% due 6/15/2017 285,600 267,000 0.44
----------- ----------- -------
1,973,600 1,947,000 3.18
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
NORTH AMERICA Face Value Percent of
(concluded) Industries Amount Convertible Bonds Cost (Note 1a) Net Assets
<S> <S> <S> <C> <S> <C> <C> <C>
United States Multi- US$ 1,000,000 Ogden Corp., 5.75% due
(concluded) Industry 10/20/2002 $ 935,500 $ 810,000 1.32%
Natural Gas 1,500,000 Consolidated Natural Gas Co.,
7.25% due 12/15/2015 1,626,250 1,511,250 2.46
Oil & Related 1,600,000 Pennzoil Co., 4.75% due
10/01/2003 1,614,625 1,420,000 2.31
Real Estate 500,000 Rockefeller Center Properties,
Inc., 8% due 12/31/2000 520,000 457,500 0.75
Retail Stores 2,000,000 Home Depot Inc., 4.50% due
2/15/1997 2,304,062 2,360,000 3.85
Textiles 250,000 Fieldcrest Cannon, Inc., 6%
due 3/15/2012 160,000 195,000 0.32
Total Investments in United
States Convertible Bonds 17,414,537 16,764,750 27.33
Total Investments in North
American Securities 28,194,837 27,240,750 44.40
<CAPTION>
PACIFIC Shares
BASIN Held Common Stocks
<S> <S> <C> <S> <C> <C> <C>
Japan Financial Services 10,000 Daiwa Securities Co., Ltd. 109,055 145,556 0.24
10,000 Nikko Securities Co., Ltd. 91,790 117,683 0.19
6,000 Nomura Securities Co., Ltd. 94,803 125,735 0.21
10,000 Yamaichi Securities Co., Ltd. 94,005 79,281 0.13
----------- ----------- -------
389,653 468,255 0.77
Machinery 20,000 Shimadzu Corp. 156,900 147,001 0.24
5,000 Sodick Co., Ltd. 94,250 47,280 0.08
----------- ----------- -------
251,150 194,281 0.32
<PAGE>
Total Investments in Japanese
Common Stocks 640,803 662,536 1.09
<CAPTION>
Convertible Preferred Stocks
<S> <S> <C> <S> <C> <C> <C>
Hong Kong Food & 800,000 Dairy Farms International
Beverage Holdings Ltd., $6.50 Pfd. 876,000 796,000 1.30
Total Investments in Hong Kong
Convertible Preferred Stocks 876,000 796,000 1.30
<CAPTION>
Face
Amount Convertible Bonds
<S> <S> <S> <C> <S> <C> <C> <C>
Australia Banking US$ 750,000 Lend Lease Finance Inter-
national Corp., Ltd., 4.75%
due 6/01/2003 848,437 787,500 1.28
Total Investments in Australian
Convertible Bonds 848,437 787,500 1.28
Japan Auto & Truck Yen 50,000,000 No. 2 Toyota Motor Corp.,
1.20% due 1/28/1998 572,731 572,933 0.93
Automotive 15,000,000 No. 2 Mazda Motors, Ltd.,
1.70% due 3/31/1998 131,050 144,782 0.24
Building & 25,000,000 No. 2 Nichiei Construction
Construction Co., Ltd., 1.50% due 4/30/1999 195,234 227,883 0.37
25,000,000 No. 5 Nichiei Construction
Co., Ltd., 1.70% due 10/31/2002 261,132 209,043 0.34
----------- ----------- -------
456,366 436,926 0.71
Chemicals 20,000,000 No. 6 Sekisui Plastic Co.,
Ltd., 2% due 9/29/2000 217,190 214,308 0.35
Computer Services 5,000,000 No. 5 CSK Corp., 3.80% due
3/19/1999 38,344 52,080 0.09
5,000,000 No. 6 CSK Corp., 3.90% due
3/20/2001 38,344 51,616 0.08
----------- ----------- -------
76,688 103,696 0.17
<PAGE>
Diversified 50,000,000 No. 3 Mitsui & Co., 1.50% due
Companies 3/31/2003 529,601 531,124 0.87
Electronics 50,000,000 No. 7 Fujitsu Ltd., 4.30%
due 9/29/1995 505,414 533,705 0.87
15,000,000 No. 2 Kyushu Matsushita
Electric Co., Inc., 1.50%
due 3/31/1999 158,941 159,337 0.26
75,000,000 No. 11 Sharp Corp., 1.50%
due 9/30/1998 803,237 901,982 1.47
----------- ----------- -------
1,467,592 1,595,024 2.60
Food & Beverage 50,000,000 No. 1 Sanyo Coca-Cola
Bottling, Inc., 0.90% due
6/30/2003 522,384 466,089 0.76
50,000,000 No. 3 Sapporo Breweries, Ltd.,
1.20% due 12/18/2009 525,379 495,509 0.81
----------- ----------- -------
1,047,763 961,598 1.57
Food & 15,000,000 No. 4 Asahi Breweries, Ltd.,
Household 2.10% due 10/21/1997 138,779 150,976 0.25
Products 35,000,000 No. 3 Itoham Foods, Inc.,
1.80% due 2/28/2003 336,922 290,854 0.47
45,000,000 No. 4 Kikkoman Corp., 1.60%
due 12/29/2000 468,167 435,739 0.71
30,000,000 No. 6 Meiji Milk Products, 2.10%
due 9/30/2002 303,887 281,821 0.46
60,000,000 No. 2 Skylark Co., Ltd., 1.60%
due 6/28/1996 562,294 612,574 1.00
----------- ----------- -------
1,810,049 1,771,964 2.89
Health & 15,000,000 No. 2 Dai-Ichi Kogyo Seiyaku
Personal Co., Ltd., 2% due 3/31/1997 162,367 148,808 0.24
Care 15,000,000 No. 3 EISAI Co., Ltd., 4.20%
due 3/31/1998 183,945 172,344 0.28
----------- ----------- -------
346,312 321,152 0.52
<PAGE>
Leisure 50,000,000 No. 4 Canon Co., 1.20% due
12/20/2005 553,669 614,225 1.00
25,000,000 No. 3 Canon Co., 1.30% due
12/19/2008 293,750 307,113 0.50
30,000,000 No. 2 Tokyo Dome Co., Ltd.,
1.70% due 1/31/1997 303,458 297,306 0.48
----------- ----------- -------
1,150,877 1,218,644 1.98
Machinery 20,000,000 No. 2 Nippondenso Co., Ltd.,
1.20% due 12/26/1997 224,111 227,108 0.37
60,000,000 No. 5 Toppan Printing Co. Ltd.,
1.90% due 11/30/2001 642,844 604,522 0.99
----------- ----------- -------
866,955 831,630 1.36
Metals & Mining 25,000,000 No. 2 Godo Steel Co., Ltd.,
2.60% due 3/29/2002 256,657 258,594 0.42
Multi- 60,000,000 No. 5 Asahi Glass Co., Ltd.,
Industry 1.90% due 12/26/2008 624,629 681,325 1.11
40,000,000 No. 4 Sony Corp., 1.40% due
3/31/2005 278,956 364,612 0.59
----------- ----------- -------
903,585 1,045,937 1.70
Oil & Related 20,000,000 No. 4 Nippon Oil Co., Ltd.,
1.70% due 3/31/2003 147,642 165,996 0.27
Real Estate 15,000,000 No. 12 Mitsui Real Estate
Development Co., Ltd., 1.40%
due 9/30/2003 148,558 121,555 0.20
Transportation 30,000,000 No. 4 All Nippon Airways Co.,
Ltd., 1% due 3/31/2004 312,259 327,965 0.53
50,000,000 No. 6 Yamato Transport Co.,
Ltd., 1.70% due 9/30/2002 539,151 544,544 0.89
----------- ----------- -------
851,410 872,509 1.42
Total Investments in Japanese
Convertible Bonds 10,981,026 11,168,372 18.20
Total Investments in Pacific
Basin Securities 13,346,266 13,414,408 21.87
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<CAPTION>
WESTERN Shares Value Percent of
EUROPE Industries Held Common Stocks Cost (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C>
United Kingdom Business 71,944 Saatchi & Saatchi Co., PLC $ 217,005 $ 192,604 0.31%
Services
Total Investments in United
Kingdom Common Stocks 217,005 192,604 0.31
<CAPTION>
Face Amount Convertible Bonds
<S> <S> <S> <C> <S> <C> <C> <C>
France Leisure Ffr 4,200,000 Euro Disney SCA, 6.75% due
10/01/2001 686,297 512,323 0.84
Total Investments in French
Convertible Bonds 686,297 512,323 0.84
Switzerland Banking US$ 700,000 CS Holdings, 4.875% due
11/19/2002 890,750 946,750 1.54
Total Investments in Swiss
Convertible Bonds 890,750 946,750 1.54
United Kingdom Business Pound 500,000 Hanson Trust PLC, 9.50% due
Services Sterling 1/31/2006 869,996 840,686 1.37
Food & Beverage 500,000 Allied-Lyons PLC, 6.75% due
7/07/2008 817,944 867,212 1.41
550,000 Northern Foods PLC, 6.75%
due 8/08/2008 867,775 758,658 1.24
----------- ----------- -------
1,685,719 1,625,870 2.65
Oil & Related 1,200,000 EE Finance, 8.75% due
6/27/2006 1,860,229 1,870,730 3.05
Transportation 300,000 P&O Steam Navigation Co.,
7.25% due 5/19/2003 477,653 503,187 0.82
Total Investments in United
Kingdom Convertible Bonds 4,893,597 4,840,473 7.89
Total Investments in Western
European Securities 6,687,649 6,492,150 10.58
<PAGE>
<CAPTION>
Short-Term Securities
<S> <S> <S> <C> <S> <C> <C> <C>
United States Commercial US$ 2,903,000 General Electric Capital
Paper* Corp., 4.72% due 11/01/1994 2,903,000 2,903,000 4.73
US Government US Treasury Bills:
& Agency 5,000,000 4.34% due 11/10/1994 4,994,575 4,994,575 8.14
Obligations* 6,000,000 4.63% due 12/01/1994 5,976,850 5,976,850 9.74
----------- ----------- -------
10,971,425 10,971,425 17.88
Total Investments in Short-
Term Securities 13,874,425 13,874,425 22.61
Total Investments $62,103,177 61,021,733 99.46
===========
Unrealized Depreciation on Forward Foreign Exchange Contracts** (128,199) (0.21)
Other Assets Less Liabilities 459,647 0.75
----------- -------
Net Assets $61,353,181 100.00%
=========== =======
<FN>
++Non-income producing security.
*Commercial Paper and certain US Government & Agency Obligations are
traded on a discount basis; the interest rates shown are the
discount rates paid at the time of purchase by the Fund.
**Forward foreign exchange contracts as of October 31, 1994 are as
follows:
Unrealized
Depreciation
Foreign Currency Sold Expiration Date (Note 1b)
Yen 200,000,000 November 1994 $ (33,961)
Yen 450,000,000 December 1994 (94,238)
Total Unrealized Depreciation--Net on Forward Foreign
Exchange Contracts (US$ Commitment--$6,605,804) $(128,199)
=========
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENT OF ASSETS AND LIABILITIES
<CAPTION>
As of October 31, 1994
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$62,103,177) (Note 1a) $ 61,021,733
Cash 72,698
Receivables:
Capital shares sold $ 599,188
Interest 515,017
Dividends 4,825 1,119,030
------------
Prepaid expenses and other assets (Note 1f) 66,689
------------
Total assets 62,280,150
------------
Liabilities: Unrealized depreciation on forward foreign exchange contracts
(Note 1b) 128,199
Payables:
Securities purchased 438,028
Capital shares redeemed 160,371
Distributor (Note 2) 43,557
Investment adviser (Note 2) 32,545 674,501
------------
Accrued expenses and other liabilities 124,269
------------
Total liabilities 926,969
------------
Net Assets: Net assets $ 61,353,181
------------
Net Assets Class A Common Stock, $0.10 par value, 100,000,000 shares authorized $ 72,996
Consist of: Class B Common Stock, $0.10 par value, 100,000,000 shares authorized 491,647
Class C Common Stock, $0.10 par value, 100,000,000 shares authorized 1,878
Class D Common Stock, $0.10 par value, 100,000,000 shares authorized 1,659
Paid-in capital in excess of par 60,937,778
Undistributed investment income--net 220,749
Undistributed realized capital gains on investments and foreign
currency transactions--net 829,511
Unrealized depreciation on investments and foreign currency
transactions--net (1,203,037)
------------
Net assets $ 61,353,181
============
<PAGE>
Net Asset Class A--Based on net assets of $7,850,496 and 729,963 shares
Value: outstanding $ 10.75
============
Class B--Based on net assets of $53,121,238 and 4,916,473 shares
outstanding $ 10.80
============
Class C--Based on net assets of $202,924 and 18,779 shares
outstanding $ 10.81
============
Class D--Based on net assets of $178,523 and 16,585 shares
outstanding $ 10.76
============
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENT OF OPERATIONS
<CAPTION>
For the Year Ended October 31, 1994
<S> <S> <C> <C>
Investment Interest and discount earned (net of $14,641 foreign withholding tax) $ 1,527,979
Income Dividends (net of $605 foreign withholding tax) 507,422
(Notes 1d & 1e): ------------
Total income 2,035,401
------------
Expenses: Distribution fees--Class B (Note 2) $ 381,718
Investment advisory fees (Note 2) 285,526
Printing and shareholder reports 111,720
Professional fees 71,997
Accounting services (Note 2) 66,982
Transfer agent fees--Class B (Note 2) 62,017
Registration fees (Note 1f) 51,442
Directors' fees and expenses 49,496
Custodian fees 26,104
Transfer agent fees--Class A (Note 2) 7,966
Pricing fees 2,673
Other 3,685
------------
Total expenses 1,121,326
------------
Investment income--net 914,075
------------
<PAGE>
Realized & Realized gain (loss) from:
Unrealized Gain Investments--net 1,000,267
(Loss) on Foreign currency transactions--net (193,908) 806,359
Investments & ------------
Foreign Change in unrealized appreciation/depreciation on:
Currency Investments--net (1,627,788)
Transactions--Net Foreign currency transactions--net (206,739) (1,834,527)
(Notes 1b, 1e & 3): ------------ ------------
Net realized and unrealized loss on investments and foreign
currency transactions (1,028,168)
------------
Net Decrease in Net Assets Resulting from Operations $ (114,093)
------------
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
For the Year
Ended
October 31,
Increase (Decrease) in Net Assets: 1994 1993
<S> <S> <C> <C>
Operations: Investment income--net $ 914,075 $ 310,807
Realized gain on investments and foreign currency transactions--net 806,359 303,814
Change in unrealized appreciation/depreciation on investments and
foreign currency transactions--net (1,834,527) 2,506,720
------------ ------------
Net increase (decrease) in net assets resulting from operations (114,093) 3,121,341
------------ ------------
Dividends & Investment income--net:
Distributions to Class A (148,368) (59,079)
Shareholders Class B (616,538) (236,220)
(Note 1g): Realized gain on investments--net:
Class A (36,309) (37,814)
Class B (244,353) (223,267)
------------ ------------
Net decrease in net assets resulting from dividends and distri-
butions to shareholders (1,045,568) (556,380)
------------ ------------
Capital Share Net increase in net assets derived from capital share transactions 28,124,292 15,565,778
Transactions ============ ============
(Note 4):
Net Assets: Total increase in net assets 26,964,631 18,130,739
Beginning of year 34,388,550 16,257,811
------------ ------------
End of year* $ 61,353,181 $ 34,388,550
============ ============
<FN>
*Undistributed investment income--net $ 220,749 $ 71,580
============ ============
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
<CAPTION>
The following per share data and ratios have been derived
from information provided in the financial statements. Class A
For the Year Ended October 31,
Increase (Decrease) in Net Asset Value: 1994 1993 1992 1991 1990
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of year $ 11.08 $ 9.79 $ 9.39 $ 8.37 $ 9.95
Operating -------- --------- --------- --------- ---------
Performance: Investment income--net .33 .23 .21 .25 .38
Realized and unrealized gain (loss) on
investments and foreign currency trans-
actions--net (.27) 1.45 .68 1.22 (1.11)
-------- --------- --------- --------- ---------
Total from investment operations .06 1.68 .89 1.47 (.73)
-------- --------- --------- --------- ---------
Less dividends and distributions:
Investment income--net (.30) (.23) (.25) (.37) (.42)
Realized gain on investments--net (.09) (.16) (.24) (.08) (.43)
-------- --------- --------- --------- ---------
Total dividends and distributions (.39) (.39) (.49) (.45) (.85)
-------- --------- --------- --------- ---------
Net asset value, end of year $ 10.75 $ 11.08 $ 9.79 $ 9.39 $ 8.37
======== ========= ========= ========= =========
Total Investment Based on net asset value per share 0.61% 17.64% 10.00% 18.09% (7.86%)
Return:** ======== ========= ========= ========= =========
Ratios to Average Expenses, net of reimbursement 1.66% 2.22% 2.47% 2.47% 2.39%
Net Assets: ======== ========= ========= ========= =========
Expenses 1.66% 2.22% 2.86% 2.87% 2.39%
======== ========= ========= ========= =========
Investment income--net 2.97% 2.36% 2.61% 3.16% 4.55%
======== ========= ========= ========= =========
Supplemental Net assets, end of year (in thousands) $ 7,850 $ 4,557 $ 2,283 $ 448 $ 162
Data: ======== ========= ========= ========= =========
Portfolio turnover 38.04% 26.02% 4.91% 18.02% 22.76%
======== ========= ========= ========= =========
<PAGE>
<CAPTION>
The following per share data and ratios have been derived
from information provided in the financial statements Class B
For the Year Ended October 31,
Increase (Decrease) in Net Asset Value: 1994 1993 1992 1991 1990
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of year $ 11.13 $ 9.84 $ 9.44 $ 8.39 $ 9.95
Operating -------- --------- --------- --------- ---------
Performance: Investment income--net .21 .13 .12 .18 .29
Realized and unrealized gain (loss) on
investments and foreign currency trans-
actions--net (.25) 1.46 .67 1.20 (1.10)
-------- --------- --------- --------- ---------
Total from investment operations (.04) 1.59 .79 1.38 (.81)
-------- --------- --------- --------- ---------
Less dividends and distributions:
Investment income--net (.20) (.14) (.15) (.25) (.32)
Realized gain on investments--net (.09) (.16) (.24) (.08) (.43)
-------- --------- --------- --------- ---------
Total dividends and distributions (.29) (.30) (.39) (.33) (.75)
-------- --------- --------- --------- ---------
Net asset value, end of year $ 10.80 $ 11.13 $ 9.84 $ 9.44 $ 8.39
======== ========= ========= ========= =========
Total Investment Based on net asset value per share (0.37%) 16.45% 8.77% 16.79% (8.68%)
Return:** ======== ========= ========= ========= =========
Ratios to Average Expenses, excluding distribution fees and
Net Assets: net of reimbursement 1.69% 2.26% 2.49% 2.50% 2.41%
======== ========= ========= ========= =========
Expenses, net of reimbursement 2.69% 3.26% 3.49% 3.50% 3.41%
======== ========= ========= ========= =========
Expenses 2.69% 3.26% 3.96% 3.88% 3.41%
======== ========= ========= ========= =========
Investment income--net 1.95% 1.32% 1.53% 2.25% 3.51%
======== ========= ========= ========= =========
Supplemental Net assets, end of year (in thousands) $ 53,121 $ 29,831 $ 13,975 $ 14,973 $ 18,296
Data: ======== ========= ========= ========= =========
Portfolio turnover 38.04% 26.02% 4.91% 18.02% 22.76%
======== ========= ========= ========= =========
<PAGE>
<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 October 31, 1994++++
Increase (Decrease) in Net Asset Value: Class C Class D
<S> <S> <C> <C>
Per Share Net asset value, beginning of period $ 10.74 $ 10.69
Operating ----------- -----------
Performance: Realized and unrealized gain on investments and
foreign currency transactions--net .07 .07
----------- -----------
Total from investment operations .07 .07
----------- -----------
Net asset value, end of period $ 10.81 $ 10.76
=========== ===========
Total Investment Based on net asset value per share 0.65%+++ 0.65%+++
Return:** =========== ===========
Ratios to Average Expenses, excluding distribution fees 4.64%* 4.88%*
Net Assets: =========== ===========
Expenses 5.64%* 5.13%*
=========== ===========
Investment income--net (1.74%)* (1.24%)*
=========== ===========
Supplemental Net assets, end of year (in thousands) $ 203 $ 179
Data: =========== ===========
Portfolio turnover 38.04% 38.04%
=========== ===========
<FN>
*Annualized.
**Total investment returns exclude the effect of sales loads.
+++Aggregate total investment return.
++Commencement of Operations.
++++Based on average shares outstanding during the period.
See Notes to Financial Statements.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
Merrill Lynch Global Convertible Fund, Inc. (the "Fund") is
registered under the Investment Company Act of 1940 as a non-
diversified, open-end management investment company. 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--Portfolio securities which are traded
on stock exchanges are valued at the last sale price on the exchange
on which such securities are traded as of the close of business on
the day the securities are being valued or, lacking any sales, at
the last available bid price. Securities traded in the over-the-
counter market are valued at the last available quoted bid price in
the over-the-counter market prior to the time of valuation. In cases
where securities are traded on more than one exchange, the
securities are valued on the exchange designated by or under the
authority of the Fund's Directors as the primary market. Securities
traded both in over-the-counter market and on a stock exchange are
valued based upon the prices or quotes obtained from the broadest
and most representative market. Short-term securities are valued at
amortized cost, which approximates market value. Options which are
traded on exchanges are valued at their last sale price as of the
close of such exchanges or, lacking any sales, at the last available
bid price. Securities for which market quotations are not readily
available are valued at their fair value as determined in good faith
by or under the direction of the Fund's Directors.
(b) Foreign currency transactions--Transactions denominated in
foreign currencies are recorded at the exchange rate prevailing when
recognized. Assets and liabilities denominated in foreign currencies
are valued at the exchange rate at the end of the period. Foreign
currency transactions are the result of settling (realized) or
valuing (unrealized) such transactions expressed in foreign
currencies into US dollars. Realized and unrealized gains or losses
from investments include the effects of foreign exchange rates on
investments.
<PAGE>
The Fund is authorized to enter into forward foreign exchange
contract as a hedge against either specific transactions or
portfolio positions. Such contracts are not entered on the Fund's
records. However, the effect on operations is recorded from the date
the Fund enters into such contracts. Premium or discount is
amortized over the life of the contracts.
The Fund may also purchase or sell listed or over-the-counter
foreign currency options, foreign currency futures and related
options on foreign currency futures as a short or long hedge against
possible variations in foreign exchange rates. Such transactions may
be effected with respect to hedges on non-US dollar denominated
securities owned by the Fund, sold by the Fund but not yet
delivered, or committed or anticipated to be purchased by the Fund.
(c) Options--The Fund can write covered call options and purchase
put options. When the Fund writes an option, an amount equal to the
premium received by the Fund is reflected as an asset and an
equivalent liability. The amount of the liability is subsequently
marked to market to reflect the current market value of the option
written.
When a security is sold through an exercise of an option, the
related premium received (or paid) is deducted from (or added to)
the basis of the security sold. When an option expires (or the Fund
enters into a closing transaction), the Fund realizes a gain or loss
on the option to the extent of the premiums received or paid (or
gain or loss to the extent the cost of the closing transaction
exceeds the premium paid or received).
Written and purchased options are non-income producing investments.
(d) 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. Under the applicable foreign tax law, a
withholding tax may be imposed on interest, dividends, and capital
gains at various rates.
(e) Security transactions and investment income--Security
transactions are recorded on the dates the transactions are entered
into (the trade dates). Dividend income is recorded on the ex-
dividend date, except that if the ex-dividend date has passed,
certain dividends from foreign securities are recorded as soon as
the Fund is informed of the ex-dividend date. Interest income
(including amortization of discount) is recognized on the accrual
basis. Realized gains and losses on security transactions are
determined on the identified cost basis.
<PAGE>
(f) Prepaid registration fees--Prepaid registration fees are charged
to expense as the related shares are issued.
(g) Dividends and distributions--Dividends and distributions paid by
the Fund are recorded on the ex-dividend dates.
2. Investment Advisory Agreement and Transactions
with Affiliates:
The Fund has entered into an Investment Advisory Agreement with
Merrill Lynch Asset Management, L.P. ("MLAM"). Effective January 1,
1994, the investment advisory business of MLAM was reorganized from
a corporation to a limited partnership. Both prior to and after the
reorganization, ultimate control of MLAM was vested with Merrill
Lynch & Co., Inc. ("ML & Co."). The general partner of MLAM is
Princeton Services, Inc. ("PSI"), an indirect wholly-owned
subsidiary of ML & Co. The limited partners are ML & Co. and Merrill
Lynch Investment Management, Inc. ("MLIM"), which is also an
indirect wholly-owned subsidiary of ML & Co. The Fund has also
entered into a Distribution Agreement and a Distribution Plan with
Merrill Lynch Funds Distributor, Inc. ("MLFD" or "Distributor"), a
wholly-owned subsidiary of MLIM.
MLAM 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 at the annual rate of 0.65% of
the average daily value of the Fund's net assets. Certain of the
states in which the shares of the Fund are qualified for sale impose
limitations on the expenses of the Fund. The most restrictive annual
expense limitation requires that the Investment Adviser 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 Fund's next $70 million of
average daily net assets, and 1.5% of the average daily net assets
in excess thereof. MLAM's obligation to reimburse the Fund is
limited to the amount of the management fee.
No fee payment will be made to MLAM during any fiscal year that will
cause such expenses to exceed the most restrictive expense
limitation at the time of such 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:
<PAGE>
Account Distribution
Maintenance Fee Fee
Class B 0.25% 0.75%
Class C 0.25% 0.75%
Class D 0.25% --
NOTES TO FINANCIAL STATEMENTS (concluded)
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 year ended October 31, 1994, MLFD earned underwriting
discounts and MLPF&S earned dealer concessions on sales of the
Fund's Class A and Class D shares as follows:
MLFD MLPF&S
Class A $2,045 $22,563
Class D $ 325 $ 3,797
MLPF&S received contingent deferred sales charges of $55,082
relating to transactions in Class B Shares and $1,968 in commissions
on the execution of portfolio security transactions for the Fund for
the year ended October 31, 1994.
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 MLAM at cost.
Certain officers and/or directors of the Fund are officers and/or
directors of MLAM, MLIM, MLPF&S, FDS, PSI, MLFD and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the year ended October 31, 1994 were $30,423,811 and
$13,301,372, respectively.
Net realized and unrealized gains (losses) as of October 31, 1994
were as follows:
<PAGE>
Realized Unrealized
Gains (Losses) Gains (Losses)
Long-term investments $1,000,940 $(1,081,444)
Short-term investments (673) --
Foreign currency transactions 30,406 6,606
Forward foreign exchange contracts (224,314) (128,199)
---------- -----------
Total $ 806,359 $(1,203,037)
========== ===========
As of October 31, 1994, net unrealized depreciation for Federal
income tax purposes aggregated $1,081,444, of which $1,255,474
related to appreciated securities and $2,336,918 related to
depreciated securities. At October 31, 1994, the aggregate cost of
investments for Federal income tax purposes was $62,103,177.
4. Capital Share Transactions:
Net increase in net assets derived from capital share transactions
were $28,124,292 and $15,565,778 for the years ended October 31,
1994 and October 31, 1993, respectively.
Transactions in capital shares for each class were as follows:
Class A Shares for the Year Dollar
Ended October 31, 1994 Shares Amount
Shares sold 552,279 $ 5,969,087
Shares issued to shareholders in
reinvestment of dividends and
distributions 13,838 147,006
---------- -----------
Total issued 566,117 6,116,093
Shares redeemed (247,561) (2,665,037)
---------- -----------
Net increase 318,556 $ 3,451,056
========== ===========
<PAGE>
Class A Shares for the Year Dollar
Ended October 31, 1993 Shares Amount
Shares sold 344,076 $ 3,672,869
Shares issued to shareholders in
reinvestment of dividends and
distributions 7,421 74,878
---------- -----------
Total issued 351,497 3,747,747
Shares redeemed (173,369) (1,757,328)
---------- -----------
Net increase 178,128 $ 1,990,419
========== ===========
Class B Shares for the Year Dollar
Ended October 31, 1994 Shares Amount
Shares sold 3,053,210 $33,198,057
Shares issued to shareholders in
reinvestment of dividends and
distributions 62,480 619,865
---------- -----------
Total issued 3,115,690 33,817,922
Shares redeemed (878,683) (9,525,443)
---------- -----------
Net increase 2,237,007 $24,292,479
========== ===========
Class B Shares for the Year Dollar
Ended October 31, 1993 Shares Amount
Shares sold 1,924,389 $20,699,900
Shares issued to shareholders in
reinvestment of dividends and
distributions 33,583 338,734
---------- -----------
Total issued 1,957,972 21,038,634
Shares redeemed (698,109) (7,463,275)
---------- -----------
Net increase 1,259,863 $13,575,359
========== ===========
Class C Shares for the Period
October 21, 1994++ to Dollar
October 31, 1994 Shares Amount
Shares sold 18,780 $ 202,593
Shares redeemed (1) (11)
---------- -----------
Net increase 18,779 $ 202,582
========== ===========
[FN]
++Commencement of Operations.
<PAGE>
Class D Shares for the Period
October 21, 1994++ to Dollar
October 31, 1994 Shares Amount
Shares sold 16,586 $ 178,186
Shares redeemed (1) (11)
---------- -----------
Net increase 16,585 $ 178,175
========== ===========
[FN]
++Commencement of Operations.
<AUDIT-REPORT>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders,
Merrill Lynch Global Convertible Fund, Inc.:
We have audited the accompanying statement of assets and
liabilities, including the schedule of investments, of Merrill Lynch
Global Convertible Fund, Inc. as of October 31, 1994, the related
statements of operations for the year then ended and changes in net
assets for each of the years in the two-year period then ended, and
the financial highlights for each of the years in the five-year
period then ended. These financial statements and the financial
highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial
statements and the financial highlights based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements and the financial highlights are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.
Our procedures included confirmation of securities owned at October
31, 1994, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
<PAGE>
In our opinion, such financial statements and financial highlights
present fairly, in all material respects, the financial position of
Merrill Lynch Global Convertible Fund, Inc. as of October 31, 1994,
the results of its operations, the changes in its net assets, and
the financial highlights for the respective stated periods in
conformity with generally accepted accounting principles.
Deloitte & Touche LLP
Princeton, New Jersey
December 8, 1994
</AUDIT-REPORT>
APPENDIX: GRAPHIC AND IMAGE MATERIAL.
ITEM 1:
Total Return Based on a $10,000 Investment
A line graph depicting the growth of an investment in the Fund's
Class A Shares compared to the growth of an investment in the S&P 500
Total return Index. Beginning and ending values are:
11/4/88** 10/94
ML Global Convertible Fund,
Inc.++--Class A Shares* $9,475 $14,265
S&P 500 Total Return
Index++++ $10,000 $20,645
A line graph depicting the growth of an investment in the Fund's
Class B Shares compared to growth of an investment in the S&P 500
Total Return Index. Beginning and ending values are:
2/26/88** 10/94
ML Global Convertible Fund,
Inc.++--Class B Shares* $10,000 $14,453
S&P 500 Total Return
Index++++ $10,000 $21,848
*Assuming maximum sales charge, transaction costs and other
operating expenses, including advisory fees.
**Commencement of Operations.
++ML Global Convertible Fund, Inc. invests primarily in an
internationally diversified portfolio of convertible debt
securities, convertible preferred stocks and "synthetic"
convertible securities consisting of a combination of debt
securities or preferred stock and warrents or options.
++++This unmanaged broad-based Index is comprised of common
stocks.
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