MERRILL LYNCH
GLOBAL
CONVERTIBLE
FUND, INC.
FUND LOGO
Quarterly 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
Global Convertible
Fund, Inc.
Box 9011
Princeton, NJ
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
Palmer Building
One Heritage Drive
North Quincy, Massachusetts 02171
Transfer Agent
Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, Florida 32246-6484
(800) 637-3863
TO OUR SHAREHOLDERS
Investors would not refer to 1994 as a positive year, since nearly
all financial investments and global markets performed poorly,
mostly because of the higher interest rate environment that existed
since February 1994. The US economy was very strong with gross domes-
tic product (GDP) rising at a 4.5% rate in the fourth quarter of
1994, again causing concern at the Federal Reserve Board that
inflation would increase sharply.
<PAGE>
The first month of 1995 certainly has not brought much improvement
in financial markets worldwide. There were upsetting factors
globally. First, the Mexican currency crisis that began in late
December 1994 continued into January 1995, and after much
Congressional debate, culminated in President Clinton deciding to
aid Mexico without any help from Congress. The results of the
President's actions have yet to be seen, but certainly questions
remain. The Mexican problems not only spread to Latin America but
also caused some worldwide repercussions. Second, Japan's tragic
earthquake affected its markets and the potential economic, polit-
ical, and sociological consequences are highly uncertain as damage
estimates rise daily. This disaster could affect interest rates and
foreign exchange values in other global markets. Finally, the half
point increase of the discount rate and Federal Funds rate by the
Federal Reserve Board on February 1, while certainly not unexpected,
causes concern both in the United States as well as abroad where
financial markets closely watch US interest rates. Despite these
negative developments, there are also some positive trends emerging.
Statistics show that the US economy is beginning to ease and that
the sharp gains in GDP will slow in coming months. At the same
time, inflation appears to be still firmly under control. In
Washington, DC as well as in some states like New York, the focus
is on cutting spending and reducing entitlements. The Republican
runaway victory in the November 1994 elections certainly is changing
the face of Washington. These factors appear to bode well for the
direction of interest rates. Perhaps most of the interest rate
increases by the Federal Reserve Board are behind us and the
opportunity for bond and equity markets to rally is increasing.
Overseas, markets began 1995 mostly on a downward bias, certainly
underperforming US equity markets which mostly showed meager gains
for January. As we mentioned before, Latin American markets continue
to be affected by the Mexican crisis. European markets are lethargic
in part because of a trend toward higher interest rates, and
Japanese markets are concerned over the earthquake ramifications.
The US dollar versus other world currencies still continues to be
generally quiet to weak and there are divergent views by economists
and analysts as to the future direction of the US dollar in coming
weeks and months. We believe that the British pound and Japanese yen
will hold their value relative to the US dollar, while other
currencies will be rather stable, especially in coming weeks.
Portfolio Strategy
The rather sharp growth in the Fund's assets, from $61 million on
October 31, 1994 to over $100 million on January 31, 1995, was both
gratifying and encouraging. At the same time, we invested these new
assets in areas and markets that we believe offer good total return
potentials in the prevailing environments. We continue to maintain a
high proportion of investments in US companies (about 62% of net
assets) because we believe that the depressed US convertible market
offers good values based on our outlook for stable, even possibly
lower interest rates, and higher equity markets during 1995. The
values offered by convertibles in today's climate appear very cheap
on a historical basis, and offer significant interest rate returns
with the possibility of equity participation should equity markets
rally.
<PAGE>
We made purchases on a selective basis based on market conditions in
other geographic areas. In Japan, we slightly reduced our percentage
of assets to 17.45% from 19.34%, as we await developments after the
earthquake. We maintain a position of 2.7% in Hong Kong since its
markets were quite weak in January with the Hang Seng Index falling
over 10%. The opportunities and market conditions worldwide change
rapidly and dramatically these days, and we will constantly adjust
our asset allocation as events unfold. We look forward to a
potential improvement in the investment environment as 1995 unfolds.
In Conclusion
We thank you for your investment in Merrill Lynch Global Convertible
Fund, Inc., and we look forward to reviewing our investment strategy
with you again in our upcoming semi-annual report to shareholders.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Harry E. Dewdney)
Harry E. Dewdney
Vice President and
Portfolio Manager
February 27, 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:
<PAGE>
* 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 and Class B Shares are
presented in the "Performance Summary", "Recent Performance Results"
and "Average Annual Total Return" tables on pages 4 and 5. Data for
Class C and Class D Shares are also presented in the "Recent
Performance Results" and "Aggregate Total Return" tables on pages 4
and 5.
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 representation
of future performance. Investment return and principal value of
shares will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost. Dividends paid to each class
of shares will vary because of the different levels of account
maintenance, distribution and transfer agency fees applicable to
each class, which are deducted from the income available to be paid
to shareholders.
PERFORMANCE DATA (concluded)
<PAGE>
<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>
ML Global Convertible Fund, Inc. Class A Shares* $10.21 $10.75 $11.01 - 7.00%(1) -4.75%(1)
ML Global Convertible Fund, Inc. Class B Shares* 10.26 10.80 11.07 - 6.59(1) -4.25(1)
ML Global Convertible Fund, Inc. Class C Shares* 10.24 10.81 10.74 - 4.39(1) -5.01(1)
ML Global Convertible Fund, Inc. Class D Shares* 10.22 10.76 10.69 - 4.13(1) -4.75(1)
ML Global Convertible Fund, Inc. Class A Shares--Total Return* - 4.27(2) -3.15(3)
ML Global Convertible Fund, Inc. Class B Shares--Total Return* - 5.22(4) -3.34(5)
ML Global Convertible Fund, Inc. Class C Shares--Total Return* - 2.89(6) -3.51(6)
ML Global Convertible Fund, Inc. Class D Shares--Total Return* - 2.54(7) -3.17(7)
Dow Jones Industrial Average** 3,843.86 3,908.12 3,978.36 - 3.38 -1.64
S&P 500 Index** 470.42 472.35 481.61 - 2.32 -0.41
Japan Nikkei Dow Jones 225** 18,649.82 19,989.60 20,229.12 - 7.81 -6.70
London Financial Times Index** 2,991.60 3,097.40 3,491.80 -14.32 -3.42
<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 $0.029 per share capital
gains distributions.
(2)Percent change includes reinvestment of $0.304 per share ordinary
income dividends and $0.029 per share capital gains distributions.
(3)Percent change includes reinvestment of $0.173 per share ordinary
income dividends and $0.029 per share capital gains distributions.
(4)Percent change includes reinvestment of $0.205 per share ordinary
income dividends and $0.029 per share capital gains distributions.
(5)Percent change includes reinvestment of $0.150 per share ordinary
income dividends and $0.029 per share capital gains distributions.
(6)Percent change includes reinvestment of $0.162 per share ordinary
income dividends and $0.029 per share capital gains distributions.
(7)Percent change includes reinvestment of $0.170 per share ordinary
income dividends and $0.029 per share capital gains distributions.
</TABLE>
<PAGE>
Average Annual
Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 12/31/94 -0.54% -5.76%
Five Years Ended 12/31/94 +6.44 +5.30
Inception (11/4/88) through 12/31/94 +6.45 +5.52
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 12/31/94 -1.45% -5.31%
Five Years Ended 12/31/94 +5.37 +5.37
Inception (2/26/88) through 12/31/94 +5.14 +5.14
[FN]
*Maximum contingent deferred sales charge is 4% and is reduced to 0%
after 4 years.
**Assuming payment of applicable contingent deferred sales charge.
Aggregate
Total Return
% Return % Return
Without CDSC With CDSC**
Class C Shares*
Inception (10/21/94) through 12/31/94 -2.03% -2.99%
[FN]
*Maximum contingent deferred sales charge is 1% and is reduced to 0%
after 1 year.
**Assuming payment of applicable contingent deferred sales charge.
<PAGE>
% Return Without % Return With
Sales Charge Sales Charge**
Class D Shares*
Inception (10/21/94) through 12/31/94 -1.78% -6.93%
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
<TABLE>
Performance
Summary--
Class A Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<S> <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
1994 10.68 10.29 0.029 0.304 - 0.54
1/1/95--1/31/95 10.29 10.21 -- -- - 0.78
------ ------
Total $1.035 Total $2.361
Cumulative total return as of 1/31/95: +45.82%**
<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**
<S> <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
1994 10.74 10.35 0.029 0.205 - 1.45
1/1/95--1/31/95 10.35 10.26 -- -- - 0.87
------ ------
Total $1.035 Total $1.945
Cumulative total return as of 1/31/95: +39.69%**
<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>
LATIN Shares Percent of
AMERICA Industries Held Common Stocks Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
Mexico Utilities-- 20,000 Telefonos de Mexico, S.A. de
Communications C.V.(TELMEX) (ADR) (a) $ 756,200 $ 707,500 0.70%
Total Investments in Latin
American Securities 756,200 707,500 0.70
<PAGE>
NORTH
AMERICA
United States Chemicals 12,000 The Dow Chemical Co. 801,720 748,500 0.74
5,000 Witco Corp. 145,300 131,250 0.13
------------ ------------ -------
947,020 879,750 0.87
Electrical Equipment 10,000 General Electric Co. 506,850 515,000 0.51
Forest Products/ 15,000 International Paper Co. 1,139,962 1,066,875 1.05
Paper & Packaging
Metals & Mining 10,000 WHX Corp. 179,350 123,750 0.12
Oil & Related 10,000 Exxon Corp. 615,700 625,000 0.62
Total Investments in United
States Common Stocks 3,388,882 3,210,375 3.17
<CAPTION>
Convertible Preferred Stocks
<S> <S> <C> <S> <C> <C> <C>
Canada Oil & Gas Producers 10,000 Occidental Petroleum Corp.,
Pfd., Series A 500,700 460,000 0.45
Total Investments in Canadian
Convertible Preferred Stocks 500,700 460,000 0.45
United States Automotive Parts 3,000 Goodrich (B.F.) Company, $3.50
Pfd., Series D 164,550 144,000 0.14
Chemicals 20,000 Ashland Oil Inc., $6.25 Pfd. 1,065,800 1,075,000 1.06
Data Processing 20,000 UNISYS Corp., $3.75 Pfd., Series A 1,233,875 697,500 0.69
Food/Beverage/ 30,000 ConAgra Inc., Pfd., Class E 998,025 960,000 0.95
Tobacco & Household
Forest Products/ 10,000 Federal Paper Board Co., $2.875
Paper & Packaging Pfd. 489,550 522,500 0.51
9,000 James River Corp. of Virginia,
$3.375 Pfd. A, Series K 377,320 348,750 0.34
------------ ------------ -------
866,870 871,250 0.85
<PAGE>
Metals & Mining 10,000 USX Corp., $3.25 Pfd. 505,800 461,250 0.45
5,000 WHX Corp., Pfd. 256,650 233,750 0.23
20,000 WHX Corp., Pfd. B 1,000,150 847,500 0.84
------------ ------------ -------
1,762,600 1,542,500 1.52
Transportation 20,000 Delta Airlines, Inc., $3.50
Pfd. C 1,010,350 960,000 0.95
Total Investments in United
States Convertible Preferred
Stocks 7,102,070 6,250,250 6.16
<CAPTION>
Face
Amount Convertible Bonds
<S> <S> <C> <S> <C> <C> <C>
Canada Metals & Mining US$ 1,250,000 Inco Ltd., 5.75% due 7/01/2004 1,369,375 1,312,500 1.29
Oil & Related 3,000,000 Amoco Canada Petro Co., Ltd.,
7.375% due 9/01/2013 3,516,500 3,420,000 3.37
Total Investments in Canadian
Convertible Bonds 4,885,875 4,732,500 4.66
United States Automobile Parts 1,500,000 The Pep Boys--Manny, Moe &
Jack, 4% due 9/01/1999 1,467,500 1,447,500 1.43
Building & 2,500,000 Masco Corp., 5.25% due
Construction 2/15/2012 2,045,750 1,975,000 1.95
Chemicals 2,500,000 Ashland Oil Inc., 6.75% due
7/01/2014 2,278,750 2,243,750 2.21
Computer Services 500,000 Cray Research, Inc., 6.125% due
2/01/2011 510,000 344,375 0.34
Electronics 2,600,000 Texas Instruments, Inc., 2.75%
due 9/29/2002 2,535,250 2,405,000 2.37
Environmental 2,000,000 Browning-Ferris Industries, Inc.,
Control 6.25% due 8/15/2012 1,840,000 1,930,000 1.90
Food & Beverage 1,000,000 American Brands Inc., 5.75% due
4/11/2005 1,167,500 1,140,000 1.12
Forest Products/ 2,820,000 Boise Cascade Corp. (Series E),
Paper & Packaging 7% due 5/01/2016 2,523,200 2,523,900 2.49
<PAGE>
Industrial 3,000,000 Rouse Co., 5.75% due 7/23/2002 2,477,500 2,460,000 2.43
Insurance 3,500,000 Chubb Capital Corp., 6% due
5/15/1998 3,542,500 3,570,000 3.52
Leisure 2,300,000 Time Warner Inc., 8.75% due
1/10/2015 2,217,000 2,219,500 2.19
Metals & Mining 3,000,000 Homestake Mining Co., 5.50%
due 6/23/2000 3,112,000 2,820,000 2.78
1,300,000 USX Corp., 7% due 6/15/2017 1,178,100 1,062,750 1.05
------------ ------------ -------
4,290,100 3,882,750 3.83
Multi-Industry 1,000,000 Ogden Corp., 5.75% due 10/20/2002 935,500 800,000 0.79
Natural Gas 4,200,000 Consolidated Natural Gas Co.,
7.25% due 12/15/2015 4,281,750 4,084,500 4.03
Oil & Related 4,100,000 Pennzoil Co., 4.75% due 10/01/2003 3,798,375 3,556,750 3.51
Real Estate 500,000 Rockefeller Center Properties,
Inc., 8% due 12/31/2000 520,000 477,500 0.47
Retail Stores 2,700,000 Home Depot Inc., 4.50% due
2/15/1997 3,157,012 3,294,000 3.25
Textiles 250,000 Fieldcrest Cannon, Inc., 6%
due 3/15/2012 160,000 187,500 0.18
Total Investments in United
States Convertible Bonds 39,747,687 38,542,025 38.01
Total Investments in North
American Securities 55,625,214 53,195,150 52.45
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
PACIFIC Shares Percent of
BASIN Industries Held Common Stocks Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
Hong Kong Utilities--Electric 70,000 Shandong Huaneng Power Company
Ltd. (ADR)(a) $ 704,200 $ 603,750 0.59%
Total Investments in Hong Kong
Common Stocks 704,200 603,750 0.59
<PAGE>
Japan Financial Services 10,000 Daiwa Securities Co., Ltd. 109,055 129,779 0.13
10,000 Nikko Securities Co., Ltd. 91,790 108,652 0.11
6,000 Nomura Securities Co., Ltd. 94,803 117,103 0.12
10,000 Yamaichi Securities Co., Ltd. 94,005 75,252 0.07
------------ ------------ -------
389,653 430,786 0.43
Machinery 20,000 Shimadzu Corp. 156,900 124,748 0.12
5,000 Sodick Co., Ltd. 94,250 38,129 0.04
------------ ------------ -------
251,150 162,877 0.16
Total Investments in Japanese
Common Stocks 640,803 593,663 0.59
<CAPTION>
Convertible Preferred Stocks
<S> <S> <C> <S> <C> <C> <C>
Hong Kong Food & Beverage 20,000 Dairy Farms International
Holdings Ltd., $6.50 Pfd. 1,977,000 1,760,000 1.74
Total Investments in Hong Kong
Convertible Preferred Stocks 1,977,000 1,760,000 1.74
<CAPTION>
Face
Amount Convertible Bonds
<S> <S> <C> <S> <C> <C> <C>
Australia Banking US$ 750,000 Lend Lease Finance International
Corp., Ltd., 4.75% due 6/01/2003
(ADR)(a) 848,437 761,250 0.75
Total Investments in Australian
Convertible Bonds 848,437 761,250 0.75
Hong Kong Real Estate 1,000,000 Wharf Capital Ltd., 5% due
7/15/2000 985,000 965,000 0.95
Total Investments in Hong Kong
Convertible Bonds 985,000 965,000 0.95
Japan Auto & Truck Yen 50,000,000 No. 2 Toyota Motor Corp., 1.20%
due 1/28/1998 572,731 510,563 0.50
Automobile Parts 30,000,000 No. 6 Aisin Seiki Co., Ltd.,
1.90% due 3/31/1998 333,854 305,433 0.30
<PAGE>
Automotive 15,000,000 No. 2 Mazda Motors, Ltd., 1.70%
due 3/31/1998 131,050 140,795 0.14
Building & 25,000,000 No. 2 Nichiei Construction Co.,
Construction Ltd., 1.50% due 4/30/1999 195,234 224,095 0.22
25,000,000 No. 5 Nichiei Construction Co.,
Ltd., 1.70% due 10/31/2002 261,132 210,010 0.21
------------ ------------ -------
456,366 434,105 0.43
Chemicals 20,000,000 No. 6 Sekisui Plastic Co.,
Ltd., 2% due 9/29/2000 217,190 187,123 0.18
100,000,000 No. 6 Sumitomo Chemical Co.,
1.20% due 9/29/2006 1,042,946 947,686 0.93
------------ ------------ -------
1,260,136 1,134,809 1.11
Computer Services 5,000,000 No. 5 CSK Corp., 3.80% due
3/19/1999 38,344 48,843 0.05
5,000,000 No. 6 CSK Corp., 3.90% due
3/20/2001 38,344 50,151 0.05
------------ ------------ -------
76,688 98,994 0.10
Electronics 50,000,000 No. 7 Fujitsu Ltd., 4.30% due
9/29/1995 505,415 507,042 0.50
125,000,000 No. 8 Fujitsu Ltd., 1.90% due
3/29/2002 1,249,731 1,158,199 1.14
15,000,000 No. 2 Kyushu Matsushita Electric
Co., Inc., 1.50% due 3/31/1999 158,941 143,511 0.14
100,000,000 No. 5 Matsushita Electric
Industrial Co., 1.30% due
3/29/2002 1,026,774 921,529 0.91
75,000,000 No. 11 Sharp Corp., 1.50% due
9/30/1998 803,237 762,072 0.75
------------ ------------ -------
3,744,098 3,492,353 3.44
Food & Beverage 50,000,000 No. 1 Sanyo Coca-Cola Bottling,
Inc., 0.90% due 6/30/2003 522,384 459,256 0.45
50,000,000 No. 3 Sapporo Breweries, Ltd.,
1.20% due 12/18/2009 525,379 457,746 0.45
------------ ------------ -------
1,047,763 917,002 0.90
Food & Household 15,000,000 No. 4 Asahi Breweries, Ltd.,
Products 2.10% due 10/21/1997 138,779 145,171 0.14
35,000,000 No. 3 Itoham Foods, Inc., 1.80%
due 2/28/2003 336,922 269,718 0.27
45,000,000 No. 4 Kikkoman Corp., 1.60% due
12/29/2000 468,167 398,390 0.39
30,000,000 No. 6 Meiji Milk Products, 2.10%
due 9/30/2002 303,887 250,503 0.25
60,000,000 No. 2 Skylark Co., Ltd., 1.60%
due 6/28/1996 562,294 589,135 0.58
------------ ------------ -------
1,810,049 1,652,917 1.63
<PAGE>
Health & 15,000,000 No. 2 Dai-Ichi Kogyo Seiyaku
Personal Care Co., Ltd., 2% due 3/31/1997 162,367 146,529 0.14
15,000,000 No. 3 EISAI Co., Ltd., 4.20% due
3/31/1998 183,945 157,696 0.16
------------ ------------ -------
346,312 304,225 0.30
Industrial 10,000,000 No. 2 Nippon Electric Glass Co.,
Ltd., 2% due 3/29/2002 99,651 100,101 0.10
50,000,000 No. 3 Sony Corp., 1.40% due
9/30/2003 523,434 495,473 0.49
------------ ------------ -------
623,085 595,574 0.59
Leisure 50,000,000 No. 4 Canon Co., 1.20% due
12/20/2005 553,669 528,169 0.52
25,000,000 No. 3 Canon Co., 1.30% due
12/19/2008 293,750 251,509 0.25
30,000,000 No. 2 Tokyo Dome Co., Ltd.,
1.70% due 1/31/1997 303,458 291,851 0.29
------------ ------------ -------
1,150,877 1,071,529 1.06
Machinery 50,000,000 No. 9 Matsushita Electric Works,
1% due 11/30/2005 486,611 487,425 0.48
70,000,000 No. 2 Nippondenso Co., Ltd.,
1.20% due 12/26/1997 787,148 723,944 0.71
10,000,000 No. 1 Organo Corp., 2.20% due
3/31/2004 99,651 99,799 0.10
60,000,000 No. 5 Toppan Printing Co. Ltd.,
1.90% due 11/30/2001 642,844 543,260 0.54
------------ ------------ -------
2,016,254 1,854,428 1.83
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<CAPTION>
PACIFIC BASIN Shares Percent of
(concluded) Industries Held Common Stocks Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
Japan Metals & Mining Yen 25,000,000 No. 2 Godo Steel Co., Ltd.,
(concluded) 2.60% due 3/29/2002 $ 256,657 $ 248,742 0.24%
Multi-Industry 60,000,000 No. 5 Asahi Glass Co., Ltd.,
1.90% due 12/26/2008 624,629 624,748 0.62
50,000,000 No. 3 Mitsui & Co., 1.50% due
3/31/2003 529,601 477,867 0.47
40,000,000 No. 4 Sony Corp., 1.40% due
3/31/2005 278,956 321,127 0.32
------------ ------------ -------
1,433,186 1,423,742 1.41
<PAGE>
Oil & Related 20,000,000 No. 4 Nippon Oil Co., Ltd.,
1.70% due 3/31/2003 147,642 154,728 0.15
Pharmaceuticals 50,000,000 No. 3 Dainippon Pharmaceutical,
1.40% due 9/30/2003 511,213 492,958 0.49
80,000,000 No. 3 Sankyo Co., Ltd., 0.70%
due 3/30/2001 872,081 820,926 0.81
------------ ------------ -------
1,383,294 1,313,884 1.30
Real Estate 15,000,000 No. 12 Mitsui Real Estate
Development Co., Ltd., 1.40%
due 9/30/2003 148,558 120,573 0.12
Retail Stores 30,000,000 No. 4 Best Denki Co., Ltd., 1.90%
due 2/28/2002 311,038 300,905 0.30
Transportation 60,000,000 No. 4 All Nippon Airways Co.,
Ltd., 1% due 3/31/2004 633,355 568,612 0.56
50,000,000 No. 6 Yamato Transport Co.,
Ltd., 1.70% due 9/30/2002 539,151 465,292 0.46
------------ ------------ -------
1,172,506 1,033,904 1.02
Total Investments in Japanese
Convertible Bonds 18,422,144 17,109,205 16.87
Total Investments in Pacific
Basin Securities 23,577,584 21,792,868 21.49
<CAPTION>
WESTERN Shares
EUROPE Held Common Stocks
<S> <S> <C> <S> <C> <C> <C>
United Business Services 71,944 Saatchi & Saatchi Co., PLC 217,005 121,629 0.12
Kingdom
Total Investments in United
Kingdom Common Stocks 217,005 121,629 0.12
Face
Amount Convertible Bonds
<S> <S> <C> <S> <C> <C> <C>
France Auto & Truck Ffr 7,500 Peugeot S.A., 2% due 1/01/2001 1,367,262 1,257,808 1.24
Leisure 4,200,000 Euro Disney SCA, 6.75% due
10/01/2001 686,297 599,091 0.59
Total Investments in French
Convertible Bonds 2,053,559 1,856,899 1.83
<PAGE>
Switzerland Banking US$ 700,000 CS Holdings, 4.875% due 11/19/2002 890,750 896,000 0.88
Total Investments in Swiss
Convertible Bonds 890,750 896,000 0.88
United Business Pound 1,000,000 Hanson Trust PLC, 9.50% due
Kingdom Services Sterling 1/31/2006 1,703,627 1,627,400 1.60
Food & Beverage 1,000,000 Allied-Lyons PLC, 6.75% due
7/07/2008 1,676,191 1,453,600 1.43
550,000 Northern Foods PLC, 6.75% due
8/08/2008 867,775 729,960 0.72
500,000 Tate & Lyle PLC, 5.75% due
3/21/2001 672,690 667,550 0.66
------------ ------------ -------
3,216,656 2,851,110 2.81
Oil & Related 1,200,000 EE Finance, 8.75% due 6/27/2006 1,860,229 1,848,600 1.82
Transportation 1,000,000 P&O Steam Navigation Co., 7.25%
due 5/19/2003 1,605,646 1,512,850 1.49
Total Investments in United
Kingdom Convertible Bonds 8,386,158 7,839,960 7.72
Total Investments in Western
European Securities 11,547,472 10,714,488 10.55
<CAPTION>
Short-Term Securities
<S> <S> <C> <S> <C> <C> <C>
United States Commercial Paper* US$ 964,000 General Electric Capital Corp.,
5.80% due 2/01/1995 964,000 964,000 0.95
US Government & US Treasury Bills:
Agency Obligations* 7,000,000 4% due 2/02/1995 6,999,222 6,999,222 6.90
4,000,000 4.62% due 2/09/1995 3,995,893 3,995,893 3.94
2,000,000 5.10% due 2/23/1995 1,993,767 1,993,767 1.97
5,000,000 5% due 3/02/1995 4,979,861 4,979,861 4.91
------------ ------------ -------
17,968,743 17,968,743 17.72
Total Investments in Short-Term
Securities 18,932,743 18,932,743 18.67
Total Investments $110,439,213 105,342,749 103.86
============
Unrealized Appreciation on Forward Foreign Exchange Contracts** 25,666 0.03
Liabilities in Excess of Other Assets (3,944,889) (3.89)
------------ -------
Net Assets $101,423,526 100.00%
============ =======
<PAGE>
Net Asset Value: Class A--Based on net assets of $12,751,863
and 1,248,654 shares outstanding $ 10.21
============
Class B--Based on net assets of $83,221,584 and
8,113,821 shares outstanding $ 10.26
============
Class C--Based on net assets of $3,365,888 and
328,547 shares outstanding $ 10.24
============
Class D--Based on net assets of $2,084,191 and
203,947 shares outstanding $ 10.22
============
<FN>
(a)American Depositary Receipt (ADR).
*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 January 31, 1995 are as
follows:
Unrealized
Foreign Currency Sold Expiration Date Appreciation
Yen500,000,000 February 1995 $ 23,438
Yen350,000,000 March 1995 2,228
Total Unrealized Appreciation--Net on Forward Foreign
Exchange Contracts (US$ Commitment--$8,605,273) $ 25,666
========
</TABLE>
