MERRILL LYNCH
GLOBAL
CONVERTIBLE
FUND, INC.
FUND LOGO
Quarterly Report
January 31, 1996
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.
Statements and other information herein are as dated and are subject
to change.
<PAGE>
Merrill Lynch
Global Convertible
Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
MERRILL LYNCH GLOBAL CONVERTIBLE FUND, INC.
Officers and
Directors
Arthur Zeikel, President and Director
James H. Bodurtha, 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
<PAGE>
Custodian
State Street Bank & Trust Company
P.O. Box 351
Boston, Massachusetts 02101
Transfer Agent
Merrill Lynch Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, Florida 32246-6484
(800) 637-3863
TO OUR SHAREHOLDERS
The US equity market began the new year with a sharp but rather
brief selloff after closing 1995 with excellent performance. As
January progressed, it became evident that the strong buying
sentiment still prevailed. The Dow Jones Industrial Average closed
up 5.44%, certainly a very good start for 1996 and portending an up
year, based on past statistics. The US economy seems to be in a slow-
growth mode and the Federal budget crisis remains unresolved.
However, the liquidity factor continues to attract assets to the
stock market. Since we are in a Presidential election year, events
seem to appear favorable for further gains, albeit with some
corrections along the way.
The US bond market remained steady as the Federal Reserve Board
continued to ease interest rates as evidenced by the 25 basis point
(0.25%) cut in the discount rate on January 31, 1996. The outlook on
inflation and sluggish economic growth appear to balance the Federal
budget concerns and seem to indicate that interest rates will not
rise, especially in an election year.
Abroad, European central banks have been lowering interest rates in
response to a continued economic slowdown and easing inflationary
pressures. European equity markets generally were quite firm in
January and in the case of France and Germany, exceeded the equity
return in the United States. In Asia, Hong Kong has surged since the
end of 1995 with the Hang Seng Stock Index up almost 13% for the
first month of 1996. The Japanese equity market has also improved
after a sluggish 1995. In general, we expect world markets to
perform quite well in the new year, especially dollar-related
markets in Asia.
<PAGE>
The US dollar was rather firm during January, with positive gains
against the Japanese yen. Japan's trade data for December indicate
that the trade imbalance between the United States and Japan is
correcting. Japan's overall trade surplus eased by 16% on a year-to-
year basis and its surplus fell by 36%, which is rather encouraging
for the US dollar.
Portfolio Strategy
During the quarter ended January 31, 1996, our asset allocation
remained constant with 38% of our holdings in companies based
outside of the United States. Of this, 80% was in dollar-denominated
issues, reducing our currency exposure to a degree. Our largest non-
US position is still in Japan, at 15.5% of net assets. As we
mentioned, the Japanese equity market has started to improve as the
government stimulates the economy. Our holdings in France, the
United Kingdom, Hong Kong, Canada and Holland also have benefited
from better markets this year. The Fund's net assets fell rom
approximately $90 million on October 31, 1995 to approximately $69
million at January quarter-end. This shift allowed us to sell
holdings across a broad spectrum of our portfolio at rather high
prices and also provided an opportunity for us to adjust portfolio
holdings as we saw fit.
General market conditions both in the United States and other world
markets have been quite good for our Fund, and our performance
reflects this. Non-US markets so far in 1996 have kept pace or
exceeded returns in the United States, and we expect this trend to
continue. We will be monitoring all world markets to seek to take
advantage of situations as they develop to seek to enhance the
Fund's total return potential.
In Conclusion
We thank you for your ongoing interest in Merrill Lynch Global
Convertible Fund, Inc., and we look forward to assisting you with
your financial needs in the months and years ahead.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
<PAGE>
(Harry E. Dewdney)
Harry E. Dewdney
Vice President and
Portfolio Manager
February 27, 1996
PERFORMANCE DATA
About Fund
Performance
Investors are 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).
<PAGE>
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 (continued)
<TABLE>
Recent
Performance
Results*
<CAPTION>
12 Month 3 Month
1/31/96 10/31/95 1/31/95 % Change % Change
<S> <C> <C> <C> <C> <C>
ML Global Convertible Fund, Inc. Class A Shares* $10.50 $10.71 $10.21 + 2.84% - 1.96%
ML Global Convertible Fund, Inc. Class B Shares* 10.57 10.77 10.26 + 3.02 - 1.86
ML Global Convertible Fund, Inc. Class C Shares* 10.55 10.75 10.24 + 3.03 - 1.86
ML Global Convertible Fund, Inc. Class D Shares* 10.51 10.72 10.22 + 2.84 - 1.96
ML Global Convertible Fund, Inc. Class A Shares-Total Return* +15.96(1) + 6.86(2)
ML Global Convertible Fund, Inc. Class B Shares-Total Return* +14.66(3) + 6.55(4)
ML Global Convertible Fund, Inc. Class C Shares-Total Return* +14.69(5) + 6.51(6)
ML Global Convertible Fund, Inc. Class D Shares-Total Return* +15.64(7) + 6.77(8)
Dow Jones Industrial Average** 5,395.30 4,755.48 3,843.86 +40.36 +13.45
S&P 500 Index** 636.02 581.50 470.42 +35.20 + 9.38
Japan Nikkei Dow Jones 225** 20,812.74 17,654.64 18,649.82 +11.60 +17.89
London Financial Times Index** 3,759.30 3,529.10 2,991.60 +25.66 + 6.52
<FN>
*Investment results shown do not reflect any 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 $1.280 per share ordinary
income dividends.
(2)Percent change includes reinvestment of $0.911 per share ordinary
income dividends.
(3)Percent change includes reinvestment of $1.146 per share ordinary
income dividends.
(4)Percent change includes reinvestment of $0.875 per share ordinary
income dividends.
(5)Percent change includes reinvestment of $1.146 per share ordinary
income dividends.
(6)Percent change includes reinvestment of $0.869 per share ordinary
income dividends.
(7)Percent change includes reinvestment of $1.252 per share ordinary
income dividends.
(8)Percent change includes reinvestment of $0.903 per share ordinary
income dividends.
</TABLE>
<PAGE>
Average Annual
Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 12/31/95 +12.54% +6.63%
Five Years Ended 12/31/95 +10.84 +9.65
Inception (11/4/88) through 12/31/95 + 7.28 +6.48
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 12/31/95 +11.30% +7.30%
Five Years Ended 12/31/95 + 9.69 +9.69
Inception (2/26/88) through 12/31/95 + 5.90 +5.90
[FN]
*Maximum contingent deferred sales charge is 4% and is reduced to 0%
after 4 years.
**Assuming payment of applicable contingent deferred sales charge.
% Return % Return
Without CDSC With CDSC**
Class C Shares*
Year Ended 12/31/95 +11.43% +10.43%
Inception (10/21/94) through 12/31/95 + 7.61 + 7.61
[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*
Year Ended 12/31/95 +12.34% +6.44%
Inception (10/21/94) through 12/31/95 + 8.59 +3.80
[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
1995 10.29 10.27 -- 1.280 +12.54
1/1/96--1/31/96 10.27 10.50 -- -- + 2.24
------ ------
Total $1.035 Total $3.641
Cumulative total return as of 1/31/96: +69.09%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures assume reinvestment of all dividends and capital gains
distributions at net asset value on the ex-dividend date, and do not
include sales charge; results would be lower if sales charge was
included.
</TABLE>
<PAGE>
<TABLE>
Performance
Summary--
Class B Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<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
1995 10.35 10.35 -- 1.146 +11.30
1/1/96--1/31/96 10.35 10.57 -- -- + 2.13
------ ------
Total $1.035 Total $3.091
Cumulative total return as of 1/31/96: +60.17%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures assume reinvestment of all dividends and capital gains
distributions at net asset value on the ex-dividend date, and do not
reflect deduction of any sales charge; results would be lower if
sales charge was deducted.
</TABLE>
PERFORMANCE DATA (concluded)
<TABLE>
Performance
Summary--
Class C Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<S> <C> <C> <C> <C> <C>
10/21/94--12/31/94 $10.74 $10.33 $0.029 $0.162 - 2.03%
1995 10.33 10.34 -- 1.146 +11.43
1/1/96--1/31/96 10.34 10.55 -- -- + 2.03
------ ------
Total $0.029 Total $1.308
<PAGE>
Cumulative total return as of 1/31/96: +11.38%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures assume reinvestment of all dividends and capital gains
distributions at net asset value on the ex-dividend date, and do not
reflect deduction of any sales charge; results would be lower if
sales charge was deducted.
</TABLE>
<TABLE>
Performance
Summary--
Class D Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<S> <C> <C> <C> <C> <C>
10/21/94--12/31/94 $10.69 $10.30 $0.029 $0.170 - 1.78%
1995 10.30 10.29 -- 1.252 +12.34
1/1/96--1/31/96 10.29 10.51 -- -- + 2.14
------ ------
Total $0.029 Total $1.422
Cumulative total return as of 1/31/96: +12.70%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures assume reinvestment of all dividends and capital gains
distributions at net asset value on the ex-dividend date, and do not
include sales charge; results would be lower if sales charge was
included.
</TABLE>
<TABLE>
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 C.V.
Communications (TELMEX) (ADR)(a) $ 756,200 $ 677,500 0.99%
<PAGE>
Total Investments in Latin American
Securities 756,200 677,500 0.99
NORTH
AMERICA
United Food/Beverage/ 30,531 ConAgra Inc. 998,025 1,400,610 2.04
States Tobacco & Household
Metals & Mining 10,000 WHX Corp. 179,350 136,250 0.20
Retail Stores 70,741 Home Depot, Inc. 3,249,362 3,254,086 4.74
Total Investments in United States
Common Stocks 4,426,737 4,790,946 6.98
Convertible Preferred Stocks
Canada Oil & Gas 25,000 Occidental Petroleum Corp., Pfd.,
Producers Series A 1,371,600 1,518,750 2.21
Total Investments in Canadian
Convertible Preferred Stocks 1,371,600 1,518,750 2.21
United Data Processing 20,000 UNISYS Corp., $3.75 Pfd., Series A 1,233,875 692,500 1.01
States
Insurance 25,000 American General Corp., Pfd. 1,306,729 1,393,750 2.03
25,000 St. Paul Companies, Inc., Pfd. 1,307,892 1,468,750 2.14
----------- ----------- -------
2,614,621 2,862,500 4.17
Metals & Mining 50,000 USX Corp., $3.25 Pfd. 2,413,750 2,525,000 3.68
35,500 WHX Corp., Pfd. 1,630,980 1,792,750 2.61
20,000 WHX Corp., Pfd., Series B 1,000,150 960,000 1.40
----------- ----------- -------
5,044,880 5,277,750 7.69
Real Estate 50,000 Merry Land & Investment
Investment Trust Company, Inc., Pfd. 1,261,637 1,493,750 2.18
Total Investments in United States
Convertible Preferred Stocks 10,155,013 10,326,500 15.05
<PAGE>
Face
Amount Convertible Bonds
United Automobile US$ 2,000,000 The Pep Boys--Manny, Moe & Jack, 4%
States Parts due 9/01/1999 1,931,875 1,880,000 2.74
Building & 2,000,000 Masco Corp., 5.25% due 2/15/2012 1,765,500 1,940,000 2.83
Construction
Chemicals 1,400,000 Ashland Oil Inc., 6.75% due 7/01/2014 1,379,000 1,414,000 2.06
Computer Services 500,000 Cray Research, Inc., 6.125% due
2/01/2011 510,000 410,000 0.60
Environmental 2,000,000 Browning-Ferris Industries, Inc.,
Control 6.25% due 8/15/2012 2,013,750 1,980,000 2.88
Industrial 2,000,000 Rouse Co., 5.75% due 7/23/2002 1,699,000 1,940,000 2.83
Insurance 2,000,000 Aegon N.V., 4.75% due 11/01/2004 2,420,250 2,925,000 4.26
Machine 1,500,000 Cooper Industries, Inc., 7.05%
Diversified due 1/01/2015 1,538,750 1,560,000 2.27
Metals & Mining 1,000,000 USX Corp., 7% due 6/15/2017 913,500 957,500 1.39
Natural Gas 2,200,000 Consolidated Natural Gas Co., 7.25%
due 12/15/2015 2,198,250 2,288,000 3.33
Oil & Related 2,000,000 Pennzoil Co., 4.75% due 10/01/2003 1,904,250 2,050,000 2.99
Transportation 1,200,000 Alaska Air Group, Inc., 6.50% due
6/15/2005 1,247,250 1,312,500 1.91
Total Investments in United States
Convertible Bonds 19,521,375 20,657,000 30.09
Total Investments in North American
Securities 35,474,725 37,293,196 54.33
</TABLE>
<PAGE>
<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-- 70,000 Shandong Huaneng Power Company Ltd.
Electric (ADR)(a) $ 704,200 $ 612,500 0.89%
Total Investments in Hong Kong
Common Stocks 704,200 612,500 0.89
Japan Financial 10,000 Daiwa Securities Co., Ltd. 109,055 149,687 0.22
Services 10,000 Nikko Securities Co., Ltd. 91,790 123,491 0.18
10,000 Yamaichi Securities Co., Ltd. 94,005 77,182 0.11
----------- ----------- -------
294,850 350,360 0.51
Machinery 20,000 Shimadzu Corp. 156,900 119,749 0.17
Trading 50,000 Marubeni Corp. 241,883 264,290 0.39
Total Investments in Japanese
Common Stocks 693,633 734,399 1.07
Face
Amount Convertible Bonds
Hong Kong Food & US$ 2,000,000 Dairy Farms International Holdings
Beverage Ltd., 6.50% due 5/10/2049 1,977,000 1,730,000 2.52
Real Estate 2,500,000 Wharf Capital Ltd., 5% due 7/15/2000 2,655,000 3,056,250 4.45
Total Investments in Hong Kong
Convertible Bonds 4,632,000 4,786,250 6.97
Japan Auto & YEN 50,000,000 No. 2 Toyota Motor Corp., 1.20% due
Truck 1/28/1998 572,731 562,260 0.82
Chemicals 100,000,000 No. 6 Sumitomo Chemical Co., 1.20%
due 9/29/2006 1,042,946 1,057,162 1.54
Electronics 30,000,000 No. 3 Matsushita Electric Industrial
Co., 1.40% due 9/30/1996 362,443 342,408 0.50
50,000,000 No. 5 Matsushita Electric Industrial
Co., 1.30% due 3/29/2002 513,387 532,791 0.78
50,000,000 No. 11 Sharp Corp., 1.50% due 9/30/1998 551,096 528,581 0.77
----------- ----------- -------
1,426,926 1,403,780 2.05
<PAGE>
Food & Beverage 100,000,000 No. 9 Asahi Breweries, Ltd., 0.95%
due 12/26/2002 1,114,675 991,674 1.44
50,000,000 No. 1 Sanyo Coca-Cola Bottling,
Inc., 0.90% due 6/30/2003 522,384 470,577 0.69
50,000,000 No. 3 Sapporo Breweries, Ltd., 1.20%
due 12/18/2009 525,379 477,594 0.70
----------- ----------- -------
2,162,438 1,939,845 2.83
Industrial 70,000,000 No. 3 Sony Corp., 1.40% due 9/30/2003 832,971 805,501 1.17
Leisure 50,000,000 No. 5 Canon Co., 1% due 12/20/2002 639,008 636,168 0.93
Machinery 100,000,000 No. 8 Matsushita Electric Works,
Ltd., 2.70% due 5/31/2002 1,228,409 1,169,426 1.70
30,000,000 No. 2 Nippondenso Co., Ltd., 1.20%
due 12/26/1997 337,449 321,358 0.47
----------- ----------- -------
1,565,858 1,490,784 2.17
Retail Stores 50,000,000 No. 1 Taiyo Company Ltd., 2.50% due
2/28/2002 594,601 486,014 0.71
Transportation 50,000,000 No. 6 Keihan Electric Railway Co.,
Ltd., 1% due 3/31/2003 539,009 465,900 0.68
50,000,000 No. 1 Nankai Electric Railway Co.,
Ltd., 2.70% due 3/30/2001 593,306 512,677 0.74
50,000,000 No. 6 Yamato Transport Co., Ltd.,
1.70% due 9/30/2002 539,151 541,211 0.79
----------- ----------- -------
1,671,466 1,519,788 2.21
Total Investments in Japanese
Convertible Bonds 10,508,945 9,901,302 14.43
Total Investments in Pacific Basin
Securities 16,538,778 16,034,451 23.36
WESTERN Shares
EUROPE Held Common Stocks
United Business 71,944 Cordiant PLC (Ordinary) 170,504 115,697 0.17
Kingdom Services
Total Investments in United Kingdom
Common Stocks 170,504 115,697 0.17
Face
Amount Convertible Bonds
<PAGE>
France Auto & Truck Ffr 10,000 Peugeot S.A., 2% due 1/01/2001 (Units) 1,851,331 2,024,038 2.95
Leisure 4,200,000 Euro Disney SCA, 6.75% due 10/01/2001 686,298 810,398 1.18
Pharmaceuticals 7,000 Sanofi S.A., 4% due 1/01/2000 (Units) 498,434 531,652 0.77
Total Investments in French
Convertible Bonds 3,036,063 3,366,088 4.90
United Business Pound 1,000,000 Hanson Trust PLC, 9.50% due 1/31/2006 1,651,296 1,525,100 2.23
Kingdom Services Sterling
Food & Pound 500,000 Allied-Lyons PLC, 6.75% due 7/07/2008 858,247 749,337 1.09
Beverage Sterling
US$ 1,500,000 Grand Metropolitan PLC, 6.50% due
1/31/2000 1,612,500 1,710,000 2.49
Pound 550,000 Northern Foods PLC, 6.75% due
Sterling 8/08/2008 867,775 714,230 1.04
----------- ----------- -------
3,338,522 3,173,567 4.62
Total Investments in United Kingdom
Convertible Bonds 4,989,818 4,698,667 6.85
Total Investments in Western
European Securities 8,196,385 8,180,452 11.92
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<CAPTION>
SHORT-TERM Face Percent of
SECURITIES Amount Issue Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
Commercial US$ 3,011,000 General Electric Capital Corp.,
Paper* 5.90% due 2/01/1996 $ 3,011,000 $ 3,011,000 4.39%
US Government & 2,000,000 US Treasury Bills, 4.88% due 2/01/1996 2,000,000 2,000,000 2.91
Agency
Obligations*
Total Investments in Short-Term
Securities 5,011,000 5,011,000 7.30
<PAGE>
Total Investments $65,977,088 67,196,599 97.90
===========
Other Assets Less Liabilities 1,439,775 2.10
----------- -------
Net Assets $68,636,374 100.00%
=========== =======
Net Asset Class A--Based on net assets of $15,120,581 and
Value: 1,440,417 shares outstanding $ 10.50
===========
Class B--Based on net assets of $47,109,117 and
4,457,240 shares outstanding $ 10.57
===========
Class C--Based on net assets of $3,404,093 and
322,531 shares outstanding $ 10.55
===========
Class D--Based on net assets of $3,002,583 and
285,663 shares outstanding $ 10.51
===========
<FN>
(a)American Depositary Receipts (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.
</TABLE>
