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Previous: TOYOTA MOTOR CREDIT CORP, 424B3, 1994-09-23 |
Next: SEARS MUNICIPAL TRUST INSURED LONG TERM SERIES 42, 497J, 1994-09-23 |
MERRILL
LYNCH
GLOBAL
ALLOCATION
FUND, INC.
Quarterly Report July 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 Allocation Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
<PAGE>
MERRILL LYNCH GLOBAL ALLOCATION FUND, INC.
Officers and
Directors
Arthur Zeikel, President and Director
Donald Cecil, Director
Edward H. Meyer, Director
Charles C. Reilly, Director
Richard R. West, Director
Terry K. Glenn, Executive Vice President
Norman R. Harvey, Senior Vice President
Donald C. Burke, Vice President
Bryan N. Ison, Vice President
Gerald M. Richard, Treasurer
Michael J. Hennewinkel, Secretary
Custodian
Brown Brothers Harriman & Co.
40 Water Street
Boston, Massachusetts 02109
Transfer Agent
Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, Florida 32246-6484
(800) 637-3863
<PAGE>
<TABLE>
Summary of
Fund's Overall
Asset Mix
As of 7/31/94
<CAPTION>
Percent of Fund's Portfolio Reference Portfolio
7/31/94 4/30/94 Percentages
<S> <C> <C> <C>
North American Equities* 21.9% 21.5% 36.0%
European Equities 11.4 10.5 9.6
Pacific Basin Equities* 5.3 5.7 14.4
Total Equities 38.6 37.7 60.0
US Dollar Denominated Fixed-Income Securities** 37.0 42.3 24.0
US Issuers 25.7 31.7 --
Non-US Issuers 10.1 10.6 --
Non-US Dollar Denominated Fixed-Income Securities** 22.3 15.9 16.0
Total Fixed-Income Securities 59.3++ 58.2 40.0
Cash & Cash Equivalents 2.1 4.2 --
<FN>
*Includes value of Stock Index Futures.
**Does not include value of segregated
securities held as collateral for Stock Index Futures.
++Includes Preferred Stock.
<PAGE>
DEAR SHAREHOLDER
During the July quarter, we further
reduced Merrill Lynch Global Allocation
Fund, Inc.'s cash reserves from 2.1% of
net assets to 0.6%, the lowest level in
two years. We began 1994 with approxi-
mately 24% of the portfolio in cash
reserves because we perceived rela-
tively few attractively valued long-term
investments. Since that time, declining
stock and bond prices throughout
most of the world have created the
opportunity to establish long-term
holdings at attractive valuation levels.
The majority of our new investments
have been in fixed-income securities.
As discussed in our last report to share-
holders, global fixed-income markets
have sustained sharp price declines
this year, with the sell-off sparked in
February by the US Federal Reserve
Board's implementation of a tighter
monetary policy. As of July month-end,
the Fund's asset allocation was approxi-
mately 40% in stocks and 60% in fixed-
income issues, virtually reversed from
the 60% allocation to equities and 40%
fixed-income exposure in the Fund's
reference portfolio. (See the "Summary
of the Fund's Overall Asset Mix" table
on page 1 of this report to share-
holders.) On a risk-adjusted basis, we
believe that fixed-income issues are
currently more attractively valued
than equity investments.
<PAGE>
Fixed-Income Investment Activities
During the July quarter, we primarily
added to our European fixed-income
exposure. One of the best-performing
European bond markets during the
period was Germany, which is the port-
folio's largest European bond exposure.
Therefore, we chose to increase invest-
ments in those markets which were
relative underperformers. Our largest
additions in Europe were in French
government bonds denominated in
French francs and in European Cur-
rency Units (ECU). We also purchased
Spanish government bonds and UK
government and corporate convertible
bonds. The Fund's European fixed-
income exposure rose to 18.7% of net
assets from 15.9% at the end of the
April quarter. We continue to believe
that European bond markets provide
very attractive real yields. We also
believe that short-term interest rates
can continue to fall and that inflation
will remain subdued in the core
European markets: Germany and France.
Other major areas of investment within
our fixed-income portfolio are Latin
American US-dollar denominated debt
and US dollar-denominated high-yield
securities, comprising approximately
7% and 20%, respectively, of net
assets at the end of July. While these
sectors of the fixed-income market are
relatively high risk, we believe that
they currently offer the potential for
achieving returns similar to those
historically associated with equities,
with a lower degree of price volatility
than is typical of equity investments.
<PAGE>
Equity Investment Activities
Our equity allocation increased slightly
over the course of the July quarter, pri-
marily through additions to existing
European holdings. For example, during
the period we increased our invest-
ments in two Dutch financial com-
panies, ABN Amro Holdings N.V. and
Internationale Nederlanden Groep N.V.
We also added to our equity investment
in Veba AG, the German electric utility
and conglomerate, and invested in the
common stock of Banco de Santander
S.A., one of Spain's largest financial
institutions.
In the United States, we increased
weightings in electric utility common
stocks. Currently, utilities are very
much out of favor with investors for
several reasons. First, since utility
stocks tend to perform in line with
bonds, lower bond prices have also led
to declines in utility shares. Second,
investors have recently focused on the
increasingly competitive environment
for utility companies, as typified by
regulatory changes under consideration
in California. Finally, FPL Group, Inc.,
the parent company of Florida Power &
Light, cut its dividend during the
quarter because of increased competi-
tive pressures. This development sur-
prised investors and further depressed
utility share prices. We have invested
in a variety of electric utilities. During
the July quarter, we added to our exist-
ing holdings in Allegheny Power System,
Inc., Commonwealth Edison Company
Inc., and Texas Utilities Co., and estab-
lished positions in Entergy Corp.
(the holding company for Midsouth
Utilities and Gulf State Utilities) and
FPL Group, following the latter's
announced dividend cut. Although we
do not expect strong dividend growth
from these holdings, share prices have
declined to the point at which current
yields are attractive.
<PAGE>
US Dollar Weakness
By far the most dramatic development
during the July quarter was the weak-
ness of the US dollar in foreign ex-
change markets. The dollar's weakness
appears to be related primarily to a
widespread perception that a weaker
dollar is part of the Clinton Adminis-
tration's economic policy, despite state-
ments to the contrary by Treasury
Secretary Bentsen and President Clinton.
While the portfolio does have significant
non-US dollar denominated invest-
ments, much of the attendant foreign
currency exposure is hedged back into
dollars. We continue to believe that the
US dollar is undervalued compared to
other major currencies by almost any
measure of purchasing power parity.
Higher short-term interest rates in the
United States combined with lower
short-term interest rates abroad, plus
indications that the US trade deficit has
stopped expanding, will eventually lead
to a stronger US dollar, in our opinion.
In Conclusion
We thank you for your investment in
Merrill Lynch Global Allocation Fund,
Inc., and we look forward to reviewing
our outlook and strategy with you again
in our next report to shareholders.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Bryan N. Ison)
Bryan N. Ison
Vice President and Portfolio Manager
August 26, 1994
<PAGE>
PERFORMANCE DATA
None of the past results shown should be considered a representation
of future performance. Investment return and principal value
of Class A and Class B Shares will fluctuate so that shares, when
redeemed, may be worth more or less than their original cost.
</TABLE>
<TABLE>
Recent
Performance
Results
<CAPTION>
Net Asset Value Total Return
7/31/94 4/30/94 7/31/93 12-Month 3-Month
<S> <C> <C> <C> <C> <C>
ML Global Allocation Fund, Inc. Class A Shares* $13.46 $13.32 $12.86 + 8.80%(1) +1.05%
ML Global Allocation Fund, Inc. Class B Shares* 13.26 13.16 12.76 + 7.62(2) +0.76
US Stocks: Standard & Poor's 500 Index** + 5.14 +2.39
Non-US Stocks: Financial Times--Actuaries World Index*** +13.29 +1.95
US Bonds: ML Government Index GA05**** - 0.84 +1.32
Non-US Bonds: Salomon Brothers World Government Bond Index***** + 9.67 +1.30
<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. Total investment
returns for unmanaged indexes are based on estimates.
***An unmanaged capitalization-weighted index comprised of over 1,800 companies
in 24 countries, excluding the United States.
****An unmanaged index designed to track the total return of the current coupon
five-year US Treasury bond.
*****An unmanaged market capitalization-weighted index tracking 10 government bond
indexes, excluding the United States.
(1)Percent change includes reinvestment of $0.323 per share ordinary income
dividends and $0.194 per share capital gains distributions.
(2)Percent change includes reinvestment of $0.268 per share ordinary income
dividends and $0.194 per share capital gains distributions.
</TABLE>
<PAGE>
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>
2/3/89--12/31/89 $10.00 $10.76 $0.199 $0.484 +14.64%
1990 10.76 9.89 0.237 0.854 + 1.88
1991 9.89 11.05 0.196 1.409 +28.75
1992 11.05 11.53 0.038 0.816 +12.19
1993 11.53 13.23 0.194 0.508 +21.01
1/1/94--7/31/94 13.23 13.46 -- -- + 1.74
------ ------
Total $0.864 Total $4.071
Cumulative total return as of 7/31/94: +107.71%**
<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**
<C> <C> <C> <C> <C> <C>
2/3/89--12/31/89 $10.00 $10.75 $0.199 $0.392 +13.58%
1990 10.75 9.88 0.237 0.741 + 0.84
1991 9.88 11.03 0.196 1.300 +27.47
1992 11.03 11.47 0.038 0.731 +11.06
1993 11.47 13.11 0.194 0.409 +19.69
1/1/94--7/31/94 13.11 13.26 -- -- + 1.14
------ ------
Total $0.864 Total $3.573
Cumulative total return as of 7/31/94: +96.29%**
<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>
Average Annual
Total Return % Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 6/30/94 + 8.16% + 1.13%
Five Years Ended 6/30/94 +14.66 +13.13
Inception (2/3/89) through 6/30/94 +14.11 +12.70
[FN]
*Maximum sales charge is 6.5%.
**Assuming maximum sales charge.
<PAGE>
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 6/30/94 + 7.10% + 3.10%
Five Years Ended 6/30/94 +13.51 +13.51
Inception (2/3/89) through 6/30/94 +12.95 +12.95
[FN]
*Maximum contingent deferred sales charge is 4% and is reduced to 0%
after 4 years.
**Assuming payment of applicable contingent deferred sales charge.
<TABLE>
SCHEDULE OF INVESTMENTS (in US dollars)
<CAPTION>
Shares Percent of
COUNTRY Industries Held Common Stocks, Notes, Rights & Warrants Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
Australia Banking 2,645,809 Westpac Banking Corp. $ 5,614,415 $ 9,069,918 0.1%
Food 7,916,000 Goodman Fielder Wattie Ltd. 8,324,587 8,363,127 0.1
Tobacco 1,768,300 Rothmans Holdings, Ltd. 7,303,733 7,054,668 0.1
1,242,300 WD & HO Wills Holdings, Ltd. 2,092,022 3,460,148 0.0
-------------- -------------- ------
9,395,755 10,514,816 0.1
Total Common Stocks in Australia 23,334,757 27,947,861 0.3
Austria Utilities--Electric 29,150 Oesterreichische Elektrizitats AG (Verbund) 1,223,237 1,589,146 0.0
Total Common Stocks in Austria 1,223,237 1,589,146 0.0
Canada Natural Resources 300,000 Canadian Pacific, Ltd. 3,503,161 4,425,000 0.1
Oil & Related 353,000 International Petroleum Corp. 1,000,196 419,188 0.0
Telecommunications 100,000 BCE Telecommunications, Inc. 3,375,484 3,300,000 0.0
Total Common Stocks in Canada 7,878,841 8,144,188 0.1
<PAGE>
Denmark Banking & Financial 53,500 Unidanmark A/S 1,870,730 2,006,732 0.0
Total Common Stocks in Denmark 1,870,730 2,006,732 0.0
Finland Banking 250,000 Kansallis-Osake-Pankki 533,290 503,124 0.0
3,033,915 Unitas Bank Ltd. 8,709,516 8,140,992 0.1
-------------- -------------- ------
9,242,806 8,644,116 0.1
Metals 175,000 Outokumpu OY 1,920,901 3,186,453 0.0
Paper & Forest 480,000 Enso-Gutzeit OY 3,485,619 3,955,993 0.1
Products 33,500 Metsa-Serla OY 1,397,019 1,451,106 0.0
450,000 Repola OY S 5,925,368 8,228,236 0.1
-------------- -------------- ------
10,808,006 13,635,335 0.2
Total Common Stocks in Finland 21,971,713 25,465,904 0.3
France Automobiles 113,300 Peugeot S.A. 14,661,303 17,776,650 0.2
Banking 100,878 Compagnie Financiere de Paribas 7,150,761 7,263,961 0.1
86,500 Societe Generale 9,605,405 9,516,198 0.1
-------------- -------------- ------
16,756,166 16,780,159 0.2
Insurance 89,900 GAN S.A. (Registered) 6,452,319 6,687,531 0.1
Multi-Industry 15,650 EuraFrance 4,256,713 5,849,792 0.1
Utilities 104,512 Compagnie Generale des Eaux 11,466,525 11,015,478 0.1
Total Common Stocks in France 53,593,026 58,109,610 0.7
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Shares Percent of
COUNTRY Industries Held Common Stocks, Notes, Rights & Warrants Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
Germany Banking 4,950 Bayerische Vereinsbank AG $ 1,181,909 $ 1,459,735 0.0%
58,900 Deutsche Bank AG 27,839,366 27,148,929 0.4
-------------- -------------- ------
29,021,275 28,608,664 0.4
Capital Goods 369,636 Kloeckner Werke AG 17,229,762 35,170,155 0.5
Chemicals 89,650 Bayer AG 15,407,964 20,381,676 0.3
Insurance 7,860 Munich Reinsurance Co. (Ordinary) 14,055,714 14,783,932 0.2
Machinery & Equipment 57,179 Mannesmann AG 15,621,661 15,817,001 0.2
Multi-Industry 122,600 Veba AG 34,687,486 40,140,491 0.5
Steel 85,000 Thyssen AG 10,329,445 16,014,493 0.2
Total Common Stocks in Germany 136,353,307 170,916,412 2.3
Hong Kong Telecommunications 1,180,000 Hong Kong Telecommunications Ltd. 754,179 2,352,454 0.0
Utilities--Electric 676,800 China Light & Power Co., Ltd. 841,166 3,557,171 0.0
Total Common Stocks in Hong Kong 1,595,345 5,909,625 0.0
Ireland Building & 1,065,600 CRH PLC 3,594,241 6,140,328 0.1
Construction
Miscellaneous-- 2,178,000 Waterford Wedgwood Units 1,080,827 1,816,496 0.0
Consumer Goods
Total Common Stocks in Ireland 4,675,068 7,956,824 0.1
Italy Banking 533,400 IMI (Ordinary) 3,443,328 3,395,507 0.0
Insurance 387,000 Assicurazioni Generali 10,169,033 10,248,593 0.1
Multi-Industry 6,949,495 Compagnie Industriali Riunite S.p.A. 5,670,704 11,496,884 0.2
(CIR)
<PAGE>
Telecommunications 3,000,000 Societa Finanziaria Telefonica S.p.A.
(STET) 4,365,656 9,831,735 0.1
11,181,363 Societa Finanziaria Telefonica S.p.A.
(STET)RISP 20,700,047 30,630,499 0.4
3,958,000 Societa Italiana Esercizio Telecom
S.p.A.(S.I.P.) 3,323,376 11,216,097 0.1
-------------- -------------- ------
28,389,079 51,678,331 0.6
Total Common Stocks in Italy 47,672,144 76,819,315 0.9
Japan Automobiles & 1,512,000 Suzuki Motor Corp. 13,245,256 19,791,367 0.3
Equipment 295,000 Toyota Motor Corp. 4,030,746 6,249,001 0.1
-------------- -------------- ------
17,276,002 26,040,368 0.4
Beverage 355,000 Chukyo Coca-Cola Bottling Co., Ltd. 4,516,394 4,859,612 0.1
303,000 Hokkaido Coca-Cola Bottling Co., Ltd. 3,813,748 4,965,228 0.1
423,000 Kinki Coca-Cola Bottling Co., Ltd. 6,836,980 8,030,576 0.1
295,000 Mikuni Coca-Cola Bottling Co., Ltd. 4,724,679 4,539,369 0.1
420,000 Sanyo Coca-Cola Bottling Co., Ltd. 6,258,012 6,966,427 0.1
-------------- -------------- ------
26,149,813 29,361,212 0.5
Capital Goods 3,608,000 Mitsubishi Heavy Industries, Inc. 21,963,469 28,011,751 0.4
Electrical 410,000 Chudenko Corp. 13,428,175 16,796,563 0.2
Engineering
Electronics 1,141,000 Canon, Inc. 14,706,779 19,495,504 0.3
189,000 Hitachi, Ltd. 1,899,032 1,822,392 0.0
1,413,000 Matsushita Electric Industrial Co., Ltd. 17,136,557 23,154,676 0.3
415,000 Murata Manufacturing Co., Ltd. 13,871,658 18,328,337 0.2
1,360,000 Sumitomo Electric Industries 15,481,185 19,840,128 0.3
-------------- -------------- ------
63,095,211 82,641,037 1.1
Engineering & 29,000 Taihei Dengyo Kaisha Ltd. 657,632 872,202 0.0
Construction
Insurance 1,112,000 Dai-Tokyo Fire & Marine Insurance Co., Ltd. 6,505,779 8,777,778 0.1
665,000 Fuji Fire & Marine Insurance Co., Ltd. 3,727,641 4,784,173 0.1
1,322,000 Koa Fire & Marine Insurance Co., Ltd. 6,884,434 9,431,535 0.1
620,000 Mitsui Marine & Fire Insurance Co., Ltd. 5,004,638 5,098,521 0.1
1,182,000 Nichido Fire & Marine Insurance Co., Ltd. 6,863,646 10,275,180 0.1
1,295,000 Nippon Fire & Marine Insurance Co., Ltd. 6,665,367 9,704,736 0.1
1,775,000 Sumitomo Marine & Fire Insurance Co., Ltd. 13,830,866 16,512,040 0.2
1,625,000 Tokio Marine & Fire Insurance Co., Ltd. 17,355,002 20,783,373 0.3
630,000 Yasuda Fire & Marine Insurance Co., Ltd. 4,971,410 4,834,532 0.1
-------------- -------------- ------
71,808,783 90,201,868 1.2
<PAGE>
Metals 751,000 Toyo Seikan Kaisha, Ltd. 18,417,114 24,688,149 0.3
Pharmaceuticals 865,000 Sankyo Pharmaceuticals Co., Ltd. 21,123,949 19,879,097 0.3
384,000 Taisho Pharmaceuticals Co. 7,984,458 7,673,861 0.1
-------------- -------------- ------
29,108,407 27,552,958 0.4
Photography 659,000 Fuji Photo Film Co., Ltd. 14,995,088 14,552,258 0.2
Retail Stores 448,000 Ito Yokado Co., Ltd. 20,618,869 23,590,727 0.3
100,000 Sangetsu Co., Ltd. 3,160,832 3,377,298 0.0
-------------- -------------- ------
23,779,701 26,968,025 0.3
Steel 10,000 Maruichi Steel Tube Ltd. 153,093 184,852 0.0
Total Common Stocks in Japan 300,832,488 367,871,243 5.0
Netherlands Airlines 800,960 KLM Royal Dutch Airlines N.V. 15,801,656 24,695,442 0.3
Banking 1,226,150 ABN Amro Holdings N.V. 39,994,928 40,834,940 0.5
Beverage 23,283 Heineken Holdings Inc. 2,129,208 2,687,104 0.0
23,237 Heineken N.V. 2,268,817 2,988,472 0.0
-------------- -------------- ------
4,398,025 5,675,576 0.0
Chemicals 113,650 Akzo N.V. 10,208,263 13,684,466 0.2
Electronics 486,000 Philips Electronics N.V. 12,590,702 14,875,323 0.2
Insurance 155,000 Aegon N.V. 8,361,695 8,469,898 0.1
375,400 Amev N.V. 14,542,480 15,833,169 0.2
800,965 Internationale Nederlanden Groep N.V. 30,066,279 36,346,160 0.5
-------------- -------------- ------
52,970,454 60,649,227 0.8
Miscellaneous-- 10,000 Nijverdal Ten Cate N.V. 501,699 466,135 0.0
Manufacturing
Paper & Forest Products 300,720 Koninklijke KNP 5,008,146 8,275,458 0.1
Total Common Stocks in the Netherlands 141,473,873 169,156,567 2.1
New Zealand Finance 4,585,700 Brierly Investments, Ltd. 2,882,632 3,034,128 0.0
Total Common Stocks in New Zealand 2,882,632 3,034,128 0.0
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Shares Percent of
COUNTRY Industries Held Common Stocks, Notes, Rights & Warrants Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
South Korea Automobiles & Equipment 6,342 Kia Motors (GDS)++++ $ 204,483 $ 152,737 0.0%
Total Common Stocks in South Korea 204,483 152,737 0.0
Spain Banking 116,010 Banco de Santander S.A. (New) 4,603,421 4,275,924 0.1
568,670 Banco de Santander S.A. (Ordinary) 20,154,425 22,093,156 0.3
61,775 Banco Popular Espanol S.A. 6,511,311 7,147,912 0.1
83,000 Bank Intercontinental S.A. 4,607,612 7,415,939 0.1
-------------- -------------- ------
35,876,769 40,932,931 0.6
Energy & Petroleum 218,500 Repsol S.A. 5,580,410 6,931,724 0.1
Financial Services 326,000 Argentaria S.A. 12,974,203 14,289,042 0.2
Insurance 30,000 Mapfre S.A. 1,130,028 1,305,747 0.0
Miscellaneous 137,500 Autopista Espana (ACESA) 1,363,125 1,290,709 0.0
137,500 Autopista Espana (ACESA) (Rights) 0 64,272 0.0
195,000 Grupo Fosforera Espanola S.A. 1,696,601 1,733,333 0.0
-------------- -------------- ------
3,059,726 3,088,314 0.0
Multi-Industry 45,750 Corporacion Financiera Alba S.A. 1,611,658 1,889,598 0.0
Real Estate 236,708 Metrovacesa 5,888,465 8,579,531 0.1
103,300 Vallehermoso Espanola S.A. 1,109,951 2,054,126 0.0
-------------- -------------- ------
6,998,416 10,633,657 0.1
Telecommunications 1,802,118 Telefonica Nacional de Espana S.A. 20,127,134 25,616,313 0.3
184,000 Telefonica Nacional de Espana S.A.
(ADR)++ 5,492,988 7,843,000 0.1
-------------- -------------- ------
25,620,122 33,459,313 0.4
Utilities--Electric 100,000 Empresa Nacional de Electricidad S.A. 3,759,956 4,689,655 0.1
591,800 Iberdrola I S.A. 3,310,030 4,285,448 0.1
-------------- -------------- ------
7,069,986 8,975,103 0.2
Total Common Stocks & Rights in Spain 99,921,318 121,505,429 1.6
<PAGE>
Sweden Electrical Equipment 120,000 ASEA AB 'B' Free 6,532,086 9,293,320 0.1
Mining 725,725 Trelleborg 'B' Free 5,291,716 9,741,904 0.1
Miscellaneous 200,000 SKF 'A' 3,713,376 3,794,773 0.1
350,000 SKF 'B' Free 6,569,663 6,640,852 0.1
-------------- -------------- ------
10,283,039 10,435,625 0.2
Multi-Industry 245,000 Svedala Industri'AB'Free 3,925,653 5,186,189 0.1
Total Common Stocks in Sweden 26,032,494 34,657,038 0.5
Switzerland Banking 35,700 Schweizerischer Bankverein (Bearer) 9,737,910 10,814,961 0.1
Electrical Equipment 29,800 BBC Brown Boveri & Cie (Bearer) 17,422,295 27,260,290 0.4
Food & Beverage 16,500 Nestle AG 13,014,541 14,393,748 0.2
Insurance 2,460 Baloise Holding Insurance (Registered) 3,018,431 4,486,044 0.1
2,460 Baloise Holding Insurance
(Warrants) (a) 0 29,297 0.0
-------------- -------------- ------
3,018,431 4,515,341 0.1
Multi-Industry 15,179 Winterthur Schweizerische
Versicherungs-Gesellschaft AG 6,949,188 8,213,720 0.1
Pharmaceuticals 19,800 Ciba-Geigy AG (Registered) 9,511,983 11,495,348 0.2
39,435 Sandoz AG (Registered) 17,445,861 19,871,600 0.3
-------------- -------------- ------
26,957,844 31,366,948 0.5
Total Common Stocks & Warrants
in Switzerland 77,100,209 96,565,008 1.4
United Aerospace 1,452,500 Rolls Royce PLC 3,586,733 4,301,724 0.1
Kingdom
Banking 728,000 National Westminster Bank PLC 5,131,672 5,008,312 0.1
Banks & Finance 350,000 Reuters Holdings PLC 2,535,131 2,510,419 0.0
Beverage 1,220,600 Grand Metropolitan PLC 8,154,275 7,738,207 0.1
35,000 Grand Metropolitan PLC (ADR)++ 1,031,100 896,875 0.0
-------------- -------------- ------
9,185,375 8,635,082 0.1
<PAGE>
Building Materials 1,510,307 Blue Circle Industries PLC 7,793,839 7,245,207 0.1
Conglomerates 287,700 Hanson PLC 1,154,458 1,144,945 0.0
50,000 Hanson PLC (ADR)++ 984,250 993,750 0.0
-------------- -------------- ------
2,138,708 2,138,695 0.0
Consumer Goods 850,000 Vendome Luxury Group (Units) 5,501,439 6,201,621 0.1
Electrical Equipment 1,230,200 General Electric Co. PLC 5,848,390 5,313,234 0.1
Energy & Petroleum 45,000 British Petroleum Co. Ltd. PLC (ADR)++ 2,638,675 3,420,000 0.0
Food 825,000 Tate & Lyle PLC 4,995,657 5,433,842 0.1
350,000 United Biscuit PLC 2,086,198 1,754,594 0.0
-------------- -------------- ------
7,081,855 7,188,436 0.1
Industrial--Other 1,581,600 Tomkins PLC 5,292,446 5,342,763 0.1
Insurance 599,000 Commercial Union Assurance Co. PLC 5,354,117 5,054,048 0.1
Leisure & 557,900 The Rank Organisation PLC 3,467,992 3,528,299 0.0
Entertainment 490,000 Thorn EMI PLC (Ordinary) 7,194,681 7,762,323 0.1
-------------- -------------- ------
10,662,673 11,290,622 0.1
Pharmaceuticals 700,000 SmithKline Beecham Corp. PLC (ADR)++ 19,423,436 19,775,000 0.3
1,000,000 Zeneca Group PLC 9,406,370 11,460,775 0.2
-------------- -------------- ------
28,829,806 31,235,775 0.5
Retail Stores 104,100 Boots Co. PLC 694,375 843,015 0.0
421,500 Marks & Spencer PLC 2,531,515 2,737,189 0.0
-------------- -------------- ------
3,225,890 3,580,204 0.0
Steel 1,500,000 British Steel PLC 1,442,449 3,609,450 0.1
Telecommunications 673,200 Unilever Capital Corp. 10,138,815 10,467,183 0.1
Utilities-- 520,000 Cable & Wireless International PLC 3,817,494 3,441,009 0.0
Communications
Utilities--Gas 435,800 British Gas PLC 1,789,284 1,801,554 0.0
Waste Disposal 83,500 Attwoods PLC (ADR)++ 759,800 761,938 0.0
Total Common Stocks in the
United Kingdom 122,754,591 128,547,276 1.7
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Shares Percent of
COUNTRY Industries Held Common Stocks, Notes, Rights & Warrants Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
United States Aerospace 56,000 Boeing Co. $ 2,003,133 $ 2,499,000 0.0%
Aerospace & Defense 200,000 EG&G, Inc. 2,889,403 3,075,000 0.0
Airlines 12,500 UAL Corp. 1,187,500 1,240,625 0.0
955,900 USAir Group Inc. 12,833,444 6,213,350 0.1
-------------- -------------- ------
14,020,944 7,453,975 0.1
Apparel 860,000 Fruit of the Loom, Inc. 23,555,786 20,425,000 0.3
373,900 Liz Claiborne Inc. 8,022,626 7,945,375 0.1
150,000 NIKE, Inc. (Class B) 7,970,975 9,225,000 0.1
-------------- -------------- ------
39,549,387 37,595,375 0.5
Automobiles 110,300 General Motors Corp. 3,895,971 5,666,663 0.1
Banking 85,000 Albank Financial Corp. 971,875 2,061,250 0.0
280,500 AmSouth Bancorporation 7,624,356 8,765,625 0.1
678,400 Anchor Bancorp., Inc. 8,229,970 10,600,000 0.1
400,000 Bank of New York 10,650,626 12,650,000 0.2
75,000 BankAmerica Corp. 3,219,677 3,618,750 0.1
319,000 Bankers Trust Co. 7,620,125 7,018,000 0.1
129,500 Banknorth Group, Inc. 1,865,422 2,978,500 0.0
700,000 Barnett Banks Inc. 28,355,015 31,325,000 0.4
500,000 California Federal Bank 4,500,000 6,250,000 0.1
496,700 Charter One Financial, Inc. 9,263,048 10,430,700 0.1
798,500 Chase Manhattan Corp. 26,045,496 29,444,688 0.4
1,391 Chase Manhattan Corp. (Warrants) (a) 6,955 10,085 0.0
1,513,500 Chemical Banking Corp. 55,174,508 58,080,563 0.8
1,721,300 City National Corp. 12,174,108 17,428,163 0.2
1,287,500 Comerica Inc. 35,076,371 38,303,125 0.5
164,000 Continental Bank Corp. 4,305,590 6,191,000 0.1
375,000 CoreStates Financial Corp. 9,855,001 10,218,750 0.1
1,120,000 First of America Bank Corp. 41,734,310 40,880,000 0.5
1,025,000 First Commerce Corp. 26,395,098 27,418,750 0.4
400,000 First Union Corp. 16,226,028 18,100,000 0.2
1,426,102 KeyCorp. 42,386,643 46,348,331 0.6
498,600 Mellon Bank Corp. 26,731,868 28,544,850 0.4
112,950 Mercantile Bancorp., Inc. 2,920,618 4,122,675 0.1
150,000 NDB Bancorp, Inc. 4,352,648 4,781,250 0.1
525,000 Onbancorp, Inc. 15,189,083 14,175,000 0.2
220,800 Oriental Bank and Trust 5,050,248 5,161,200 0.1
45,000 Premier Bancorp. 708,437 765,000 0.0
433,800 Republic New York Corp. 20,799,505 19,954,800 0.3
450,000 Southern National Corp. 8,670,728 9,506,250 0.1
20,000 Trustco Bankcorp. NY 288,320 455,000 0.0
-------------- -------------- ------
436,391,677 475,587,305 6.3
<PAGE>
Communications 185,700 Comsat Corp. 4,308,767 4,851,413 0.1
104,500 GTE Corp. 3,514,166 3,317,875 0.0
300,000 Octel Communications Corp. 5,268,100 5,700,000 0.1
-------------- -------------- ------
13,091,033 13,869,288 0.2
Computers 148,500 Boole & Babbage, Inc. 2,962,360 3,935,250 0.1
781,900 Borland International Corp. 9,284,507 8,991,850 0.1
27,200 Digital Equipment Corp. 1,553,514 527,000 0.0
300,000 International Business Machines Corp. 15,067,744 18,525,000 0.2
800,000 Unisys Corp. 9,264,381 7,100,000 0.1
288,000 Western Digital Co. 3,663,126 4,356,000 0.1
-------------- -------------- ------
41,795,632 43,435,100 0.6
Construction & 153,800 Centex Corp. 3,880,118 3,845,000 0.1
Housing 389,700 K. Hovnanian Enterprises, Inc.
(Class A) 4,039,783 3,166,313 0.0
-------------- -------------- ------
7,919,901 7,011,313 0.1
Energy & Petroleum 163,900 Ashland Coal, Inc. 4,132,919 4,753,100 0.1
45,000 Brown (Tom), Inc. 195,997 669,375 0.0
49,500 Cabot Oil & Gas Corp. (Class A) 529,030 959,063 0.0
34,600 Coastal Corp. 817,773 1,085,575 0.0
153,000 Coho Resources, Inc. 1,662,813 688,500 0.0
130,000 Helmerich & Payne, Inc. 2,773,423 3,623,750 0.1
30,000 McMoRan Oil & Gas Co. 146,197 108,750 0.0
46,400 Mitchell Energy Development Corp.
(Class A) 675,717 875,800 0.0
174,350 Mitchell Energy Development Corp.
(Class B) 2,755,451 3,225,475 0.0
50,000 Murphy Oil Corp. 1,899,720 2,225,000 0.0
106,100 Nuevo Energy Co. 2,048,791 2,095,475 0.0
1,563,400 Occidental Petroleum Corp. 29,245,537 31,072,575 0.4
61,200 Pennzoil Co. 3,775,844 3,082,950 0.0
199,700 Plains Resources, Inc. 2,052,005 1,223,163 0.0
1,794,247 Santa Fe Energy Resources, Inc. 16,331,708 16,821,074 0.2
425,000 Trans Texas Gas Corp. 5,950,000 4,834,375 0.1
700,000 USX-Marathon Group 12,267,189 12,162,500 0.2
138,800 Unocal Corp. 3,272,336 4,025,200 0.1
-------------- -------------- ------
90,532,450 93,531,700 1.2
Financial Services 782,800 Student Loan Marketing Association 34,043,819 27,300,150 0.4
Foods/Food 900,000 Borden, Inc. 11,393,223 10,575,000 0.1
Processing
<PAGE>
Healthcare Services 410,000 Advocat, Inc. 3,897,500 3,741,250 0.1
961,200 Baxter International, Inc. 21,122,668 25,351,650 0.3
650,000 Beverly Enterprises, Inc. 6,733,713 7,962,500 0.1
55,000 Community Psychiatric Centers 580,744 708,125 0.0
316,700 HealthCare COMPARE Corp. 5,816,548 6,492,350 0.1
529,000 Hillhaven Corp. 7,749,833 9,522,000 0.1
150,000 Manor Care, Inc. 2,928,940 3,768,750 0.1
606,500 US Surgical Corp. 13,808,786 13,494,625 0.2
-------------- -------------- ------
62,638,732 71,041,250 1.0
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Shares Percent of
COUNTRY Industries Held Common Stocks, Notes, Rights & Warrants Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
United States Index-Related US$ 40,800 Republic of Austria Stock Index Growth
(continued) Notes due 8/15/1996 $ 432,941 $ 520,200 0.0%
Industrial 915,000 BW/IP Holdings, Inc. 15,816,387 14,868,750 0.2
190,000 CBI Industries, Inc. 5,503,699 5,272,500 0.1
250,000 Cooper Industries, Inc. 9,064,307 9,375,000 0.1
2,672 Gardner Denver Machinery, Inc. 22,042 24,382 0.0
-------------- -------------- ------
30,406,435 29,540,632 0.4
Insurance 163,800 Ace, Ltd. 3,881,553 3,828,825 0.1
245,000 Aetna Life & Casualty Co. 12,939,855 12,617,500 0.2
500,000 Alexander & Alexander Services, Inc. 8,443,979 9,875,000 0.1
550,000 American General Corp. 14,227,584 15,743,750 0.2
571,000 Horace Mann Educators, Inc. 13,654,588 15,202,875 0.2
59,200 Lincoln National Corp. 2,302,485 2,227,400 0.0
-------------- -------------- ------
55,450,044 59,495,350 0.8
Metals 277,500 Alcan Aluminum, Ltd. 4,669,221 6,798,750 0.1
120,000 Aluminum Co. of America 8,094,043 9,390,000 0.1
100,000 Inco Ltd. 2,132,000 2,750,000 0.0
132,800 Reynolds Metals Co. 5,801,771 6,689,800 0.1
-------------- -------------- ------
20,697,035 25,628,550 0.3
Miscellaneous 125,000 ADT Limited 1,434,405 1,296,875 0.0
93,700 Handleman Co. 1,044,752 972,138 0.0
223,900 Jostens Inc. 4,199,326 3,638,375 0.1
385,000 Loews Corp. 35,433,180 33,976,250 0.4
-------------- -------------- ------
42,111,663 39,883,638 0.5
Natural Resources 3,750 Freeport McMoRan Copper and Gold, Inc. 84,207 86,719 0.0
300,000 Freeport-McMoRan, Inc. 4,907,292 5,062,500 0.1
440,000 Horsham Corp. 3,550,742 5,940,000 0.1
-------------- -------------- ------
8,542,241 11,089,219 0.2
<PAGE>
Oil Services 670,000 Arethusa (Offshore) Ltd. 6,809,378 7,872,500 0.1
149,800 Atwood Oceanics, Inc. 1,238,663 2,078,475 0.0
800,000 Chiles Offshore Corp. 3,697,043 4,200,000 0.1
43,400 Cliffs Drilling Co. 595,425 520,800 0.0
408,000 Gerrity Oil & Gas Corp. 5,748,846 3,468,000 0.0
2,310,000 Noble Drilling Corp. 17,643,468 15,881,250 0.2
-------------- -------------- ------
35,732,823 34,021,025 0.4
Paper & Forest 561,900 Boise Cascade Corp. 12,517,685 14,047,500 0.2
Products 435,000 Bowater, Inc. 8,882,625 11,690,625 0.2
112,000 Champion International Corp. 3,318,152 3,836,000 0.1
150,000 International Paper Co. 9,477,586 10,931,250 0.1
11,600 James River Corp. 197,896 223,300 0.0
200,000 Stone Container Corp. 2,576,204 3,300,000 0.0
-------------- -------------- ------
36,970,148 44,028,675 0.6
Pharmaceuticals/ 600,000 ALZA Corp. 13,048,597 13,050,000 0.2
Biotechnology 121,500 Alteon Inc. 1,205,188 516,375 0.0
139,400 American Home Products Corp. 8,256,144 7,998,075 0.1
457,000 Applied Immune Sciences, Inc. 6,459,893 3,199,000 0.0
58,200 AutoImmune Inc. 385,575 327,375 0.0
600,000 Bristol-Myers Squibb Co. 33,254,124 31,575,000 0.4
160,000 Immune Response Corp. 2,102,665 1,120,000 0.0
200,000 Johnson & Johnson Co. 7,266,450 9,400,000 0.1
325,000 Lilly (Eli) & Co. 16,618,583 15,803,125 0.2
550,000 Merck & Co. 18,652,516 16,293,750 0.2
156,300 Pfizer, Inc. 9,292,505 9,690,600 0.1
780,500 Syntex Corp. 15,220,206 18,341,750 0.2
-------------- -------------- ------
131,762,446 127,315,050 1.5
Pollution Control 646,900 WMX Technologies, Inc. 16,148,443 18,840,963 0.2
Publishing 250,000 Deluxe Corp. 6,706,999 6,500,000 0.1
301,500 New York Times Co. (Class A) 7,158,778 7,122,938 0.1
13,865,777 13,622,938 0.2
Real Estate 355,100 Carr Realty Corp. 7,213,693 7,279,550 0.1
500,000 First Union Real Estate Investments 3,764,840 3,125,000 0.0
661,300 Mid-America Realty Investments 6,616,640 6,199,688 0.1
100,000 Mid-Atlantic Realty Trust Co. 917,500 887,500 0.0
-------------- -------------- ------
18,512,673 17,491,738 0.2
<PAGE>
Retail Stores 608,500 Baker (J.) Inc. 10,187,765 11,333,313 0.2
516,900 Buttrey Food & Drug Stores Co. 4,084,486 3,036,788 0.0
156,700 Dayton-Hudson Corp. 10,496,970 12,927,750 0.2
100,000 Eagle Food Centers, Inc. 612,500 300,000 0.0
1,110,000 Filene's Basement Corp. 10,092,619 9,990,000 0.1
1,123,500 Payless Cashways Inc. 14,297,003 12,779,813 0.2
1,100,000 Service Merchandise Co., Inc. 9,491,185 6,050,000 0.1
158,400 Smith Food & Drug Ltd. 3,067,501 3,366,000 0.0
350,000 Sotheby's Holdings, Inc. (Class A) 4,257,809 4,418,750 0.1
1,111,600 The Vons Companies, Inc. 18,500,110 18,758,250 0.2
-------------- -------------- ------
85,087,948 82,960,664 1.1
Savings Banks 106,000 Ahmanson (H.F) & Co. 1,767,857 2,106,750 0.0
297,600 Bankers Corp. 1,688,842 4,129,200 0.1
655,000 Brooklyn Bancorp Inc. (e) 15,782,500 22,433,750 0.3
500,000 Dime Savings Bank of New York 3,417,510 4,687,500 0.1
196,400 Downey Savings & Loan Association 2,896,670 3,903,450 0.1
50,000 GP Financial Corp. 931,250 1,181,250 0.0
2,005,053 Glendale Federal Savings Bank 17,644,852 24,060,636 0.3
770,194 Glendale Federal Savings Bank
(Warrants) (a) 0 3,080,776 0.0
37,500 NS Bancorp, Inc. 300,000 1,200,000 0.0
200,000 Portsmouth Bank Shares, Inc. 1,396,014 2,150,000 0.0
-------------- -------------- ------
45,825,495 68,933,312 0.9
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Shares Percent of
COUNTRY Industries Held Common Stocks, Notes, Rights & Warrants Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
United States Textiles 1,396,700 Burlington Industries, Inc. $ 19,559,082 $ 20,775,913 0.3%
(concluded)
Tobacco 760,000 Philip Morris Companies, Inc. 36,587,110 41,800,000 0.5
Utilities--Electric 1,250,000 Allegheny Power System, Inc. 27,315,551 27,031,250 0.4
125,000 CMS Energy Corp. 2,290,025 2,828,125 0.0
2,071,000 Centerior Energy Corp. 31,583,112 20,968,875 0.3
1,148,800 Commonwealth Edison Company Inc. 27,549,620 27,284,000 0.4
150,000 Consolidated Edison Company Inc. 4,390,815 4,312,500 0.1
1,740,000 Entergy Corp. 46,524,456 44,370,000 0.6
357,100 FPL Group, Inc. 10,773,940 11,293,288 0.2
300,000 General Public Utilities Corp. 8,663,891 7,725,000 0.1
550,000 Long Island Lighting Co. 12,236,000 10,175,000 0.1
1,312,900 Niagara Mohawk Power Corp. 22,958,118 21,662,850 0.3
844,600 Texas Utilities Co. 26,942,999 27,766,225 0.4
-------------- -------------- ------
221,228,527 205,417,113 2.9
<PAGE>
Utilities--Gas 115,650 Atmos Energy Corp. 1,445,257 2,052,787 0.0
126,900 Pacific Enterprises 2,486,131 2,601,450 0.0
40,800 South Jersey Industries, Inc. 711,756 744,600 0.0
-------------- -------------- ------
4,643,144 5,398,837 0.0
Total Common Stocks, Notes, Rights &
Warrants in the United States 1,583,729,280 1,645,404,936 21.6
Total Investments in Common Stocks,
Notes, Rights & Warrants 2,655,099,536 2,951,759,979 38.6
<CAPTION>
Equity Closed-End Funds
<S> <S> <C> <S> <S> <S> <S>
Portugal Financial Services 39,500 Capital Portugal Fund 2,052,116 2,866,263 0.0
Total Equity Closed-End Funds in Portugal 2,052,116 2,866,263 0.0
United States Financial Services 240,000 Austria Fund 2,017,631 2,400,000 0.0
166,666 European Warrant Fund 1,363,723 2,062,492 0.0
11,700 Global Yield Fund 89,798 77,512 0.0
300,100 Growth Fund of Spain, Inc. 2,630,827 3,188,562 0.0
150,000 Irish Investment Fund, Inc. 1,086,041 1,350,000 0.0
150,000 Italy Fund 1,198,520 1,575,000 0.0
25,600 Jakarta Growth Fund 158,080 249,600 0.0
40,000 Portugal Fund 360,368 580,000 0.0
Total Equity Closed-End Funds in the
United States 8,904,988 11,483,166 0.0
Total Investments in Equity
Closed-End Funds 10,957,104 14,349,429 0.0
<CAPTION>
Preferred Stocks
<S> <S> <C> <S> <C> <C> <C>
Germany Automobiles 80,150 Volkswagen of America, Inc. (Pfd.) 17,907,876 19,822,856 0.3
Multi-Industry 45,000 R.W.E. AG (Pfd.) 8,725,424 9,995,274 0.1
Total Preferred Stocks in Germany 26,633,300 29,818,130 0.4
<PAGE>
Netherlands Paper & Forest Products 100,240 Koninklijke KNP BT (Pfd.) 404,041 428,973 0.0
Total Preferred Stocks in the Netherlands 404,041 428,973 0.0
Spain Banking 225,000 Santander Overseas Bank (8% Pfd.,
Series D) (ADR)++ 5,463,250 5,175,000 0.1
Total Preferred Stocks in Spain 5,463,250 5,175,000 0.1
United Engineering 750,000 AMEC PLC (6.50% Convertible Pfd.) 968,501 1,052,756 0.0
Kingdom
Retail Stores 545,000 Signet Group (Pfd.) (ADR)++ 2,194,907 4,360,000 0.1
Waste Disposal 1,700,000 Attwoods PLC (8.50% Convertible Pfd.) 2,417,796 2,386,247 0.0
Total Preferred Stocks in the
United Kingdom 5,581,204 7,799,003 0.1
United States Airlines 100,000 AMR Corp. (Convertible Pfd. $3.00) 5,065,500 4,325,000 0.1
85,000 UAL Corp. (6.25% Convertible Pfd.) 7,885,625 7,554,375 0.1
150,000 USAir Group, Inc. (Convertible Pfd.
$4.375, Series B) 7,940,250 5,325,000 0.1
-------------- -------------- ------
20,891,375 17,204,375 0.3
Automomiles & Equipment 20,000 Ford Motor Co. (8.40% Convertible Pfd.,
Series A) 1,000,000 2,080,000 0.0
Banking 125,000 California Federal Bank (10.625% Pfd.) 12,500,000 13,125,000 0.2
115,000 First Madison Bank (11.50% Pfd.) 11,500,000 11,586,250 0.2
100,000 Fourth Financial Corp. (Convertible
Pfd., Class A) 2,500,000 2,800,000 0.0
30,300 Marine Midland Banks, Inc. (Adj. Rate
Pfd., Series A) 907,425 1,386,225 0.0
100,000 Onbancorp, Inc. (6.75% Convertible Pfd.,
Series B) 2,668,750 2,525,000 0.0
151,512 Riggs National Corp. (10.75% Convertible
Pfd., Series B) 3,819,050 3,749,922 0.1
-------------- -------------- ------
33,895,225 35,172,397 0.5
Energy & Petroleum 150,000 Grant Tensor Corp. (9.75% Convertible
Pfd.) 1,853,375 2,062,500 0.0
13,000 Plains Resources, Inc. (Convertible
Pfd.) 1,300,000 1,335,750 0.0
64,219 Santa Fe Energy Resources, Inc.
(7% Pfd.) 954,075 1,220,161 0.0
460,000 Santa Fe Energy Resources, Inc.
(Convertible Pfd., Class A) 4,082,500 4,542,500 0.1
50,000 Tenneco Inc. (Convertible Pfd., Series 1,475,000 2,062,500 0.0
-------------- -------------- ------
9,664,950 11,223,411 0.1
<PAGE>
Energy & Related 355,200 Chiles Offshore Corp. (6% Convertible
Pfd.) 8,692,862 8,391,600 0.1
Financial Services 175,000 A/S Eksportfinans (8.70% Pfd.) 4,377,500 4,396,875 0.1
Industrial 549,700 Prime Retail Inc. (10.50% Pfd.) 13,443,550 11,818,550 0.2
1,080,000 US Surgical Corp. (Convertible Pfd.) 24,354,000 25,650,000 0.3
-------------- -------------- ------
37,797,550 37,468,550 0.5
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Shares Percent of
COUNTRY Industries Held Preferred Stocks Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
United States Natural Resources 85,000 Alumax Inc. (Convertible Pfd.) $ 7,240,312 $ 11,432,500 0.2%
(concluded) 150,000 Cyprus Amax Minerals Co. (Convertible
Pfd., Series A) 9,188,313 10,256,250 0.1
20,000 Echo Bay Finance Ltd. (Pfd., Series A) 500,000 755,000 0.0
245,000 Freeport-McMoRan Copper and Gold Inc.
(Convertible Pfd. Shares) 5,828,450 5,573,750 0.1
219,000 Freeport-McMoRan Inc. (Convertible
Pfd.--Gold) 7,703,330 8,048,250 0.1
-------------- -------------- ------
30,460,405 36,065,750 0.5
Paper & Forest Products 300,000 Boise Cascade Corp. (Convertible Pfd.,
Series G) 6,337,500 7,050,000 0.1
388,200 James River Corp. of Virginia (9%
Convertible Pfd., Series P) 6,696,450 7,569,900 0.1
-------------- -------------- ------
13,033,950 14,619,900 0.2
Real Estate 500,000 Catellus Development Corp. (7.25% Conv.
Exchangeable Pfd., Series B) 25,000,000 21,375,000 0.3
666,000 National Health Investors, Inc. (8.50%
Convertible Pfd.) 16,650,000 16,816,500 0.2
-------------- -------------- ------
41,650,000 38,191,500 0.5
Savings Bank 659,900 Glendale Federal Savings Bank (8.75%
Convertible Pfd., Series E) 16,070,337 21,611,725 0.3
Utilities--Electric 12,500 Gulf States Utilities Co. (8.52% Pfd.) 1,363,750 1,215,625 0.0
Total Preferred Stocks in the
United States 218,897,904 227,641,708 3.1
Total Investments in Preferred Stocks 256,979,699 270,862,814 3.7
<PAGE>
<CAPTION>
Face
Amount Fixed-Income Securities
<S> <C> <S> <C> <C> <C>
Canada C$ Canadian Government Bonds (1):
60,000,000 7.50% due 7/01/1997 43,036,467 42,333,020 0.6
60,000,000 9.50% due 10/01/1998 45,619,376 44,482,235 0.6
50,000,000 6.50% due 6/01/2004 33,790,887 29,976,843 0.4
Domtar, Inc. (2):
6,763,000 10.35% due 9/01/2006 4,014,962 4,404,588 0.1
3,500,000 10.00% due 4/15/2011 1,938,573 2,279,470 0.0
Mark Resources Inc., Convertible
Bonds (5):
7,250,000 7.00% due 4/15/2002 5,052,564 4,721,760 0.1
1,250,000 8.00% due 11/30/2004 943,556 888,722 0.0
Olympia & York Inc. (4):
57,194,000 Series 1, 10.70% due 11/04/1995 29,626,733 27,522,983 0.4
34,000,000 Series 2, 11.00% due 11/04/1998 18,060,242 16,361,531 0.2
67,000,000 Sherritt Gordon Ltd., 11.00%
due 3/31/2004 (29) 48,454,704 46,787,032 0.6
14,500,000 Talisman Energy Inc., 8.50% due
12/01/2000 (Ex. Warrants) (12) 11,040,982 9,915,696 0.1
Total Fixed-Income Securities in Canada 241,579,046 229,673,880 3.1
European ECU 15,650,000 Banco Commercial Portugues, Convertible
Currency Units Bonds, 8.75% due 5/21/2002 (3) 21,845,827 20,373,671 0.3
2,000,000 Credit Local de France, 9.48%
due 10/16/2001 (4) (b) 1,498,819 1,372,951 0.0
132,500,000 Government of France, 8.25%
due 4/25/2022 (1) 154,153,135 159,076,638 2.1
1,000,000 Investor International Placements,
Convertible Bonds, 7.25% due
6/21/2001 (4) 1,001,412 1,220,467 0.0
7,000,000 SKF-AB Lyons, Convertible Bonds,
7.356% due 7/26/2002 (5) (b) 4,772,831 4,429,845 0.1
Total Fixed-Income Securities in
European Currency Units 183,272,024 186,473,572 2.5
<PAGE>
Finland Fmk 75,000,000 Republic of Finland, 11.00%
due 1/15/1999 (1) 14,754,836 15,225,975 0.2
Total Fixed-Income Securities in Finland 14,754,836 15,225,975 0.2
France Frf 30,000 Alcatel Alsthom, Convertible Bonds, 2.50%
due 1/01/2004 (5) 3,926,887 4,125,519 0.1
7,250 Compagnie Generale des Eaux, Convertible
Bonds, 6.00% due 1/01/1998 (7) 4,005,646 4,242,270 0.1
10,000 Credit National, Convertible Bonds, 3.75%
due 1/01/2001 (44) 1,271,013 1,264,421 0.0
500,000,000 Government of France, 8.50%
due 4/25/2023 (1) 91,985,713 99,215,505 1.3
20,000 IBM Finance, Convertible Bonds, 5.75%
due 1/01/1998 (3) 1,436,923 1,543,147 0.0
2,000 Peugeot, Bonds, 2.00% due 1/01/2001 357,123 358,837 0.0
Total Fixed-Income Securities in France 102,983,305 110,749,699 1.5
Germany DM 50,000,000 Baden-Wuerttemberg, 6.20%
due 11/22/2013 (3) 28,832,291 29,773,157 0.4
Bundesrepublic Deutscheland:
200,000,000 6.75% due 4/22/2003 (42) 120,664,996 124,448,645 1.6
160,000,000 6.50% due 7/15/2003 (1) 95,144,356 98,177,694 1.3
2,310,000 Commerzbank AG, Floating Rate Convertible
Bonds, 0% due 6/15/2001 (3) (b) 1,556,456 2,117,864 0.0
37,500,000 Freie Hansestadt Hamburg, 6.08% due
11/29/2018 (42) 21,421,335 21,975,425 0.3
164,000,000 Land Hessen, 6.00% due 11/29/2013 (42) 94,406,242 95,382,483 1.2
110,000,000 Mecklenberg Vorpommern, 6.15%
due 6/16/2023 (42) 61,012,437 63,802,773 0.8
97,500,000 Nordrhein-Westfalen, 6.125%
due 12/21/2018 (42) 55,420,416 58,241,966 0.8
Rheinland-Pfalz (42):
33,000,000 5.75% due 2/24/2014 18,324,663 19,140,832 0.3
62,000,000 6.08% due 11/29/2018 35,633,056 36,664,776 0.5
50,000,000 Sachsen-Anhalt, 6.00% due 1/10/2014 (42) 28,632,994 29,426,591 0.4
Treuhandanstalt (42):
40,000,000 7.125% due 1/29/2003 25,372,983 25,383,743 0.3
175,000,000 6.875% due 6/11/2003 104,019,943 109,609,326 1.4
Total Fixed-Income Securities in Germany 690,442,168 714,145,275 9.3
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Face Percent of
COUNTRY Amount Fixed-Income Securities Cost Value Net Assets
<S> <C> <S> <C> <C> <C>
Ireland IrP 8,046,277 CRH Capital Corp., Convertible Bonds,
6.50% due 4/30/2005 (4) $ 15,808,558 $ 16,105,814 0.2%
Total Fixed-Income Securities
in Ireland 15,808,558 16,105,814 0.2
Italy Softe SA-LUX (8):
Lit 10,500,000,000 Convertible Bonds, 4.25% due
7/30/1998 7,317,044 8,024,847 0.1
15,460,000,000 (Ex-Warrants), 8.75% due
3/24/1997 (a) 9,991,958 9,287,183 0.1
Total Fixed-Income Securities in Italy 17,309,002 17,312,030 0.2
Japan Yen 2,850,000,000 Glaxo Holdings PLC, Convertible Bonds,
4.30% due 9/28/1998 (9) 25,735,735 27,765,288 0.4
850,000,000 Hankyu Corp., Convertible Bonds, 1.25%
due 9/30/1998 (20) 7,734,570 7,898,681 0.1
1,090,000,000 Hokkaido Coca-Cola Bottling Co., Ltd.,
Convertible Bonds, 0.90% due
6/30/1995 (41) 11,126,237 10,782,374 0.1
988,000,000 Matsushita Electric Works, Convertible
Bonds, 2.70% due 5/31/2002 (23) 9,691,544 11,807,034 0.2
400,000,000 Toyota Motor Corp., Convertible Bonds,
1.20% due 1/28/1998 (10) 2,477,431 4,552,358 0.1
Total Fixed-Income Securities in Japan 56,765,517 62,805,735 0.9
New Zealand NZ$ 2,000,000 Natural Gas Corp. Holdings, Convertible
Bonds, 10.50% due 10/14/1997 (7) 1,186,318 1,624,050 0.0
Total Fixed-Income Securities in
New Zealand 1,186,318 1,624,050 0.0
South Korea KW President Enterprises (1) (b):
800,000 0.00% due 7/22/2001 796,011 816,000 0.0
2,000,000 0.00% due 7/22/2001 1,990,089 2,040,000 0.0
Total Fixed-Income Securities in
South Korea 2,786,100 2,856,000 0.0
<PAGE>
Spain Pta Government of Spain (1):
7,000,000,000 11.30% due 1/15/2002 64,934,781 55,839,080 0.7
6,800,000,000 10.30% due 6/15/2002 51,936,318 51,586,207 0.7
7,750,000,000 10.90% due 8/30/2003 59,105,289 60,521,264 0.8
3,750,000,000 8.00% due 5/30/2004 23,754,711 24,554,598 0.3
Total Fixed-Income Securities in Spain 199,731,099 192,501,149 2.5
Switzerland Chf 1,500,000 American Medical International, Inc.,
5.00% due 3/18/1996 (11) 493,386 1,080,201 0.0
4,010,000 Chrysler Financial Corp., 5.75%
due 6/18/1996 (4) 1,914,011 3,007,127 0.0
1,401,000 Ciba-Geigy AG, Convertible Bonds, 2.00%
due 8/09/1998 (1) 1,178,587 1,313,926 0.0
3,020,000 News International PLC, 5.375%
due 4/30/1996 (13) 1,115,703 2,231,001 0.0
Total Fixed-Income Securities in
Switzerland 4,701,687 7,632,255 0.0
United Kingdom Pound Sterling 29,400,000 Elf Enterprises Finance PLC, Convertible
Bonds, 8.75% due 6/27/2006 (4) 47,218,707 44,555,884 0.6
4,875,000 English China Clays PLC, Convertible
Bonds, 6.50% due 9/30/2003 (14) 8,364,034 7,218,900 0.1
5,250,000 Hanson PLC, Convertible Bonds, 9.50%
due 1/31/2006 (5) 9,953,589 8,907,937 0.1
500,000 Land Securities PLC, Convertible Bonds,
6.75% due 12/31/2002 (25) 679,603 755,825 0.0
250,000 National Power PLC, Convertible Bonds,
6.25% due 9/23/2008 (45) 411,442 428,044 0.0
1,000,000 RMC Capital Ltd., Convertible Bonds,
8.75% due 5/31/2006 (14) 1,755,430 1,773,875 0.0
3,250,000 Redland Capital PLC, Convertible Bonds,
7.25% due 1/28/2002 (15) 5,382,804 4,787,534 0.1
1,750,000 SG Warburg Group, Convertible Bonds,
6.50% due 8/04/2008 (4) 2,694,389 2,807,350 0.0
8,350,000 Sainsbury (J.) PLC, Convertible Bonds,
8.50% due 11/19/2005 (4) 16,072,715 16,808,237 0.2
7,750,000 Tate & Lyle International, Convertible
Bonds, 5.75% due 3/21/2001 (19) 10,092,554 10,220,991 0.1
3,000,000 TransAtlantic Holdings PLC, Convertible
Bonds, 5.50% due 4/30/2009 (44) 3,861,416 3,817,687 0.1
37,500,000 United Kingdom Treasury Gilt, 8.00% due
6/10/2003 (42) 56,327,454 55,674,609 0.7
Total Fixed-Income Securities in the
United Kingdom 162,814,137 157,756,873 2.0
<PAGE>
United States US$ 3,490,000 AEGON N.V., Convertible Bonds, 7.00%
due 9/15/2001 (16) 4,475,299 5,008,150 0.1
22,500,000 Alexander Haagen Properties, Inc.,
Exchangeable Debentures, 7.25%
due 12/27/2003 (32) 22,500,000 21,937,500 0.3
43,500,000 Allison Engine Inc., 10.00%
due 12/01/2003 (5) 43,815,625 40,672,500 0.5
28,000,000 Allnet Communication Services, 9.00%
due 5/15/2003 (8) 27,743,272 27,160,000 0.4
3,087,500 American Medical International, Inc.,
6.50% due 5/30/1997 (11) 2,578,063 2,917,687 0.0
27,450,000 Baldwin Co., 10.375% due 8/01/2003 (14) 27,352,438 23,744,250 0.3
21,000,000 Banco de Galicia, 9.00% due
11/01/2003 (3) 20,913,960 17,850,000 0.2
125,000,000 Banco Nacional (BNCE), 7.25%
due 2/02/2004 108,770,575 103,125,000 1.3
Banco Rio de la Plata (14):
60,000,000 (Class 3), 8.50% due 7/15/1998 60,508,125 56,700,000 0.7
26,500,000 8.75% due 12/15/2003 24,784,375 22,260,000 0.3
34,100,000 Beazer Homes USA, Inc., 9.00% due
3/01/2004 (30) 33,169,000 30,008,000 0.4
11,000,000 Best Buy Company Inc., 8.625%
due 10/01/2000 (5) 11,015,000 10,285,000 0.1
7,370,000 Boise Cascade Corp., 9.45%
due 11/01/2009 (5) 8,024,088 7,406,850 0.1
25,000,000 Brazil Exit Bonds, 6.00% due
9/15/2013 (42) 14,445,016 12,000,000 0.2
5,965,000 Burns, Philip & Company Ltd., 5.50%
due 4/30/2004 (46) 5,293,663 5,293,937 0.1
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Face Percent of
COUNTRY Amount Fixed-Income Securities Cost Value Net Assets
<S> <C> <S> <C> <C> <C>
United States US$ 675,000 CRH Capital Corp., Convertible Bonds,
(continued) 5.75% due 4/30/2005 (4) $ 810,000 $ 799,875 0.0%
CTC Mansfield Funding Corp. (42):
17,000,000 10.25% due 3/30/2003 17,580,000 16,405,000 0.2
12,000,000 11.125% due 9/30/2016 12,820,000 11,820,000 0.2
40,000,000 California Energy Co., Inc., 10.25% due
1/15/2004 (7) (b) 30,450,311 28,100,000 0.4
8,000,000 Calpine Corp., Inc., 9.25%
due 2/01/2004 (7) 7,277,500 7,070,000 0.1
5,000,000 Card Establishment Services, Inc., 10.00%
due 10/01/2003 4,812,500 4,725,000 0.1
7,000,000 Centerpoint Properties Corp., Convertible
<PAGE> Bonds, 8.22% due 1/15/2004 (4) 7,000,000 7,840,000 0.1
7,200,000 Cetus (Chiron) Corp., Convertible Bonds,
5.25% due 5/21/2002 (17) 5,220,250 5,958,000 0.1
Ciba-Geigy Corp. (9):
7,945,000 5.50% due 10/28/1998 (Warrants) (a) 9,418,275 9,414,825 0.1
24,945,000 Convertible Bonds, 6.25% due 3/15/2016 25,632,050 23,074,125 0.3
Cleveland Electric Illuminating Company
Inc., First Mortgage (7):
5,000,000 9.30% due 7/26/1999 5,437,500 4,987,500 0.1
12,500,000 9.25% due 7/29/1999 13,562,500 12,437,500 0.2
3,000,000 9.05% due 8/15/2001 3,093,750 2,910,000 0.0
7,500,000 7.625% due 8/01/2002 7,462,500 6,618,750 0.1
5,000,000 7.375% due 6/01/2003 4,700,000 4,312,500 0.1
Columbia Gas System, Inc. (26):
2,000,000 9.00% due 8/01/1993 2,326,250 2,350,000 0.0
6,500,000 7.50% due 6/01/1997 6,808,750 6,825,000 0.1
4,700,000 10.25% due 8/01/2011 5,340,375 5,922,000 0.1
10,000,000 10.50% due 6/01/2012 11,225,000 12,400,000 0.2
5,000,000 10.15% due 11/01/2013 5,562,500 6,100,000 0.1
4,000,000 9.50% due 10/10/2019 4,310,000 4,800,000 0.1
4,000,000 Congoleum Corp., 9.00% due 2/01/2001 (5) 4,000,000 3,740,000 0.1
12,500,000 Consoltex Group, Inc., 11.00%
due 10/01/2003 (5) 12,530,000 12,125,000 0.2
27,000,000 Crossland Federal Savings Bank, 9.00% due
9/01/2003 (3) 27,678,000 25,515,000 0.3
20,000,000 Crown Packaging Ltd., 10.75%
due 11/01/2000 (5) 20,000,000 19,800,000 0.3
5,000,000 DalTile International, Inc., 10.597% due
7/15/1998 (15) (b) 3,121,557 3,087,500 0.0
25,000,000 Dell Computer Corp., 11.00% due
8/15/2000 (37) 25,077,500 25,875,000 0.3
Delta Airlines, Inc. (20):
8,000,000 Series A2, 9.20% due 9/23/2014 7,370,000 7,100,000 0.1
8,000,000 10.06% due 1/02/2016 8,005,000 7,640,000 0.1
12,500,000 Dominion Textile, 8.875%
due 11/01/2003 (38) 12,438,500 11,375,000 0.2
EUA Power Corp. (7):
1,000,000 Series B, 17.50% due 5/15/1993 475,000 70,000 0.0
3,157,600 Series C, 17.50% due 5/15/1993 1,915,790 221,032 0.0
31,650,000 Eagle Food Centers Inc., 8.625%
due 4/15/2000 (33) 31,358,337 26,427,750 0.3
19,000,000 Easco Corp., 10.00% due 3/15/2001 (4) 19,005,000 18,525,000 0.2
El Paso Electric Co. (7):
4,050,000 9.20% due 7/02/1997 3,286,000 3,017,250 0.0
25,000,000 10.375% due 1/02/2011 21,170,000 18,625,000 0.2
62,040,000 10.75% due 4/01/2013 52,996,150 46,219,800 0.6
8,500,000 Eletson Holdings Inc., 9.25%
due 11/15/2003 (20) 8,537,500 7,926,250 0.1
19,000,000 Envirotest Systems Corp., 9.125% due
3/15/2001 (5) 18,412,210 17,955,000 0.2
<PAGE> 30,000,000 First Union Real Estate, 8.875%
due 10/01/2003 (32) 29,756,100 27,487,500 0.4
25,000,000 First Washington Savings Bank, 8.25%
due 6/26/1999 (3) 25,000,000 24,375,000 0.3
23,500,000 Four Seasons Hotel, Inc., 9.125%
due 7/01/2000 (6) 23,401,875 21,208,750 0.3
28,000,000 Freeport-McMoRan Resources, 8.75% due
2/15/2004 (24) 27,727,500 25,410,000 0.3
23,250,000 Genmar Holdings, 13.50% due 7/15/2001 (5) 23,197,500 23,250,000 0.3
9,500,000 Gerrity Oil & Gas Corp., 11.75%
due 7/15/2004 (12) 9,500,000 9,381,250 0.1
HIH Capital Ltd., Convertible Bonds (14):
2,000,000 7.50% due 9/25/2006 1,665,000 1,440,000 0.0
470,000 (Bearer), 7.50% due 9/25/2006 394,800 338,400 0.0
5,750,000 Hanson America Convertible Bonds, 2.39%
due 3/01/2001 (4) 4,352,812 4,283,750 0.1
10,000,000 Harris Chemical of North America, 10.25%
due 7/15/2001 (34) (b) 8,227,493 7,825,000 0.1
3,500,000 Hartmarx Corp., 10.875% due 1/15/2002 (5) 3,476,270 3,465,000 0.0
7,750,000 Horace Mann Educators, Inc., Convertible
Bonds, 4.00% due 12/01/1999 (31) 7,682,500 7,517,500 0.1
77,000,000 International Semi-Tech Microelectronics
Inc., 11.50% due 8/15/2003 (14) (b) 37,961,173 38,307,500 0.5
4,580,000 Johnson Electric Holdings Ltd.,
Convertible Bonds, 4.50% due
11/05/2000 (16) 4,298,779 4,396,800 0.1
28,500,000 K. Hovnanian Enterprises, 9.75%
due 6/01/2005 (30) 28,124,300 25,436,250 0.3
7,500,000 LTC Properties, Inc., Convertible Bonds,
9.75% due 7/01/2004 (25) 7,500,000 10,425,000 0.1
17,860,000 Lend Lease Finance Corp. Ltd.,
Convertible Bonds, 4.75% due
6/01/2003 (4) 19,843,230 19,467,400 0.3
12,500,000 Liberty Property Trust, Convertible
Bonds, 8.00% due 7/01/2001 (32) 12,500,000 12,500,000 0.2
Lomas Mortgage USA, Inc. (25):
5,000,000 9.75% due 10/01/1997 5,000,000 4,650,000 0.1
5,000,000 10.25% due 10/01/2002 4,750,000 4,500,000 0.1
Long Island Lighting Co. (7):
6,000,000 7.90% due 7/15/2008 5,412,060 5,280,000 0.1
5,000,000 9.625% due 7/01/2024 4,822,500 4,825,000 0.1
25,000,000 MDC Holdings Inc., 11.125%
due 12/15/2003 (5) 24,709,000 23,875,000 0.3
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Face Percent of
COUNTRY Amount Fixed-Income Securities Cost Value Net Assets
<S> <C> <S> <C> <C> <C>
United States US$ 20,000,000 MFS Communications Inc., 9.375% due
(continued) 1/15/2004 (5) (b) $ 11,858,123 $ 11,250,000 0.2%
27,000,000 Malan Realty Investors, Inc.,
Convertible Bonds, 8.50% due
7/01/2003 (25) 27,000,000 26,460,000 0.3
60,061,000 Marcus Cable Co. L.P., 13.50%
due 8/01/2004 (5) 31,231,720 31,757,254 0.4
8,500,000 Mediq/PRN, Senior Notes, 11.125%
due 7/01/1999 (22) 8,845,000 8,393,750 0.1
Meditrust, Convertible Bonds (25):
6,000,000 7.00% due 3/01/1998 6,035,000 6,420,000 0.1
28,500,000 7.50% due 3/01/2001 28,500,000 27,787,500 0.4
10,000,000 Methanex Corp., 8.875% due
11/15/2001 (5) 9,949,230 9,725,000 0.1
5,000,000 Mid-Atlantic Realty Trust, Convertible
Bonds, 7.625% due 9/15/2003 (4) 4,875,000 4,700,000 0.1
12,500,000 Nacolah Holding Corp., 9.50%
due 12/01/2003 (7) 12,500,000 11,125,000 0.1
5,000,000 National Health Investors, Inc., 7.375%
due 4/01/1998 (5) 5,125,000 5,025,000 0.1
22,000,000 Nationwide Health Properties Inc.,
Convertible Bonds, 6.25% due
1/01/1999 (5) 21,950,000 20,570,000 0.3
Nextel Communications Inc. (8) (b):
3,000,000 9.668% due 9/01/2003 1,907,541 1,845,000 0.0
33,500,000 9.75% due 8/15/2004 19,929,368 18,341,250 0.2
8,000,000 Noble Drilling Corp., 9.25%
due 10/01/2003 (12) 8,000,000 7,760,000 0.1
1,000,000 Novacare, Inc., Convertible Bonds, 5.50%
due 1/15/2000 (11) 857,500 860,000 0.0
22,000,000 OMI Corp., 10.25% due 11/01/2003 (20) 21,910,000 19,910,000 0.3
14,000,000 OSI Specialties Corp., 9.25%
due 10/01/2003 (5) 14,000,000 13,020,000 0.2
Owens-Illinois, Inc. (5):
3,000,000 10.50% due 6/15/2002 3,051,000 3,067,500 0.0
10,000,000 9.75% due 8/15/2004 9,740,750 9,775,000 0.1
PDV America, Inc. (14):
35,000,000 7.25% due 8/01/1998 34,856,150 31,325,000 0.4
10,000,000 7.75% due 8/01/2000 10,062,500 8,775,000 0.1
2,000,000 PT Indorayon, Convertible Bonds, 5.50%
due 10/01/2002 (2) 2,363,125 2,470,000 0.0
3,230,000 PT Pabrik Kertas Tjiwa Kimia, Convertible
Bonds, 7.25% due 4/12/2001 (2) 2,413,800 3,149,250 0.0
8,500,000 Paging Network, Inc., 8.875%
due 2/01/2006 (5) 7,727,500 7,395,000 0.1
27,250,000 Paracelsus Healthcare Corp., 9.875% due
10/15/2003 (18) 27,221,875 25,751,250 0.3
<PAGE> 45,000,000 Penn Traffic Co., 8.625% due
12/15/2003 (5) 44,876,400 41,062,500 0.5
6,500,000 Petrolera Argentina San Jorge S.A.,
11.00% due 2/09/1998 (26) 6,278,750 6,621,250 0.1
9,545,000 Phoenix Home Life-Mutual Insurance Co.,
8.00% due 11/25/2023 (31) 9,545,000 8,781,400 0.1
30,500,000 Plastic Specialties & Technology, Inc.,
11.25% due 12/01/2003 (5) 30,540,000 28,517,500 0.4
27,062,500 Presidio Oil Co., 11.50% due
9/15/2000 (26) 27,686,250 26,656,562 0.4
27,250,000 Presley Companies, Senior Notes,
12.50% due 7/01/2001 (30) 27,207,812 26,841,250 0.4
12,000,000 Price Co., Convertible Bonds, 5.50%
due 2/28/2012 (14) 11,213,250 10,140,000 0.1
Public Service Company of New Mexico:
19,800,000 10.30% due 1/15/2014 19,466,500 19,255,500 0.3
18,000,000 10.15% due 1/15/2016 17,128,125 17,370,000 0.2
23,000,000 Public Service of New Mexico, EIP
Funding, 10.25% due 10/01/2012 (7) 23,000,000 21,792,500 0.3
17,500,000 Pueblo Xtra International Inc., 9.50%
due 8/01/2003 (22) 16,855,125 15,443,750 0.2
24,365,368 RTC Commercial Mortgage, Class E, 8.25%
due 12/25/2020 (3) (d) 23,992,273 22,416,138 0.3
11,000,000 Ralphs Grocery Company, 10.25%
due 7/15/2002 (5) 11,235,000 10,890,000 0.1
5,000,000 Regency Health Services, Inc.,
Convertible Bonds, 6.50% due
7/15/2003 (18) 4,887,500 4,600,000 0.1
Republic of Argentina (1):
113,000,000 5.812% due 3/31/2023 86,525,750 79,100,000 1.0
12,500,000 Global Bonds, 8.375% due 12/20/2003 11,456,250 10,468,750 0.1
184,500,000 Par Bonds, 4.25% due 3/31/2023 101,644,750 94,556,250 1.2
38,610,000 Republic of Brazil, 4.313%
due 1/01/2001 (1) (d) 30,178,912 28,378,350 0.4
Republic of Venezuela (1):
14,000,000 (Series A), 6.75% due 3/31/2020 6,403,750 6,300,000 0.1
11,000,000 (Series B), 6.75% due 3/21/2020 5,045,500 4,950,000 0.1
Rohr Industries, Inc. (47):
7,500,000 11.625% due 5/15/2003 7,500,000 7,631,250 0.1
5,500,000 Convertible Bonds, 7.75% due
5/15/2004 5,500,000 6,820,000 0.1
3,000,000 Roosevelt Financial Group, Inc., 9.50%
due 8/01/2002 (27) 3,000,000 3,105,000 0.0
23,500,000 Salant Corp., Secured, 10.50%
due 12/31/1998 (38) 23,030,000 22,912,500 0.3
10,000,000 Santa Fe Energy Resources, Inc., 11.00%
due 5/15/2004 (12) 9,926,600 10,200,000 0.1
10,075,000 Sequa Corp., 9.625% due 10/15/1999 (14) 9,874,312 9,848,312 0.1
26,000,000 Sherritt Gordon Ltd., 9.75%
due 4/01/2003 (29) 26,124,375 25,155,000 0.3
<PAGE> 4,000,000 Siemens Corp., 8.00% due 6/24/2002
(With Warrants) (9) (a) 5,232,500 5,250,000 0.1
32,050,000 Sifto Canada, Inc., 8.50% due
7/15/2000 (5) 32,100,250 29,405,875 0.4
5,500,000 Sizeler Property Investors, Inc.,
Convertible Bonds, 8.00% due
7/15/2003 (24) 5,505,000 5,500,000 0.1
3,000,000 Ssangyong Oil Corp., 3.75%
due 12/31/2008 (12) 3,195,750 3,735,000 0.1
9,000,000 Stone Consolidated Corp., 10.25%
due 12/15/2000 (40) 9,000,000 8,752,500 0.1
19,500,000 Stone Container Corp., 9.875%
due 2/01/2001 (2) 19,227,500 18,037,500 0.2
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Face Percent of
COUNTRY Amount Fixed-Income Securities Cost Value Net Assets
<S> <C> <S> <C> <C> <C>
United States US$ 5,500,000 Storer Communications Inc., 10.00%
(concluded) due 5/15/2003 (8) $ 5,538,500 $ 5,225,000 0.1%
39,000,000 Tarkett International, 9.50%
due 3/01/2002 (15) 37,641,250 35,685,000 0.5
18,250,000 Texfi Industries, Inc., 8.75%
due 8/01/1999 (39) 17,930,300 14,280,625 0.2
Toledo Edison Co. (42):
2,000,000 9.30% due 4/01/1998 2,130,000 2,005,000 0.0
15,425,000 7.25% due 8/01/1999 15,425,000 14,152,437 0.2
3,000,000 9.50% due 4/01/2001 3,221,250 2,992,500 0.0
2,000,000 7.91% due 4/01/2003 1,992,500 1,785,000 0.0
31,850,000 Transtexas Gas Corp., 10.50%
due 9/01/2000 (12) 31,950,750 31,690,750 0.4
2,220,000 Tung Ho Steel Enterprise, Convertible
Bonds, 4.00% due 7/26/2001 (24) 2,243,700 2,530,800 0.0
United Mexican States, Discount
Notes (1):
10,000,000 8.50% due 9/15/2002 9,420,000 9,330,200 0.1
65,000,000 Series A, 4.187% due 12/31/2019 58,148,000 54,762,500 0.7
35,000,000 Series B, 4.312% due 12/31/2019 30,062,500 29,487,500 0.4
United Mexican States, Rights (1):
99,996,000 (Series A) 0 0 0.0
53,845,000 (Series B) 0 0 0.0
11,000,000 USAir Inc., 10.00% due 7/01/2003 (28) 8,529,375 8,305,000 0.1
USAir Pass Thru (28):
7,500,000 9.625% due 9/01/2003 (d) 7,495,625 6,750,000 0.1
4,525,207 9.33% due 1/01/2006 4,412,529 3,982,182 0.1
9,000,000 10.375% due 3/01/2013 8,922,500 8,100,000 0.1
3,851,000 US Trails, Senior Secured Notes, 12.00%
<PAGE> due 7/15/1998 (4) 3,150,185 2,888,250 0.0
6,000,000 USX-Marathon Oil Co., 7% due
6/15/2017 (12) 5,650,000 5,340,000 0.1
5,875,000 Veba International Finance (Warrants),
6.00% due 4/06/2000 (4) (a) 7,083,300 9,106,250 0.1
21,835,200 Vista Properties, Inc., 13.75%
due 10/31/2001 (25) (c) 11,268,085 6,987,264 0.1
23,000,000 The Vons Companies, Inc., 9.625%
due 4/01/2002 (5) 24,375,000 23,057,500 0.3
10,000,000 Waban, Inc., 11.00% due 5/15/2004 (48) 10,000,000 9,750,000 0.1
Webb (Del E.) Corp. (30):
12,000,000 9.75% due 3/01/2003 11,940,000 11,010,000 0.1
11,050,000 9.00% due 2/15/2006 9,663,475 9,420,125 0.1
14,000,000 Wilrig AS, 11.25% due 3/15/2004 (5) 14,000,000 12,600,000 0.2
-------------- -------------- ------
2,551,405,136 2,414,504,905 31.6
US Government & 125,000,000 US Treasury Notes, 7.50% due
Agency Obligations 11/15/2001 130,151,562 128,847,625 1.6
Total Fixed-Income Securities
in the United States 2,681,556,698 2,543,352,530 33.2
Total Investments in
Fixed-Income Securities 4,375,690,495 4,258,214,837 55.6
<CAPTION>
Short-Term Securities
<S> <S> <C> <S> <C> <C> <C>
United Commercial US$ 51,361,000 General Electric Capital Corp., 4.20%
States Paper* due 8/01/1994 51,349,015 51,349,015 0.6
Total Investments in
Short-Term Securities 51,349,015 51,349,015 0.6
Total Investments $7,350,075,849 7,546,536,074 98.5
==============
Unrealized Appreciation on Forward Foreign Exchange Contracts** 33,466,419 0.4
Other Assets Less Liabilities 79,895,481 1.1
-------------- ------
Net Assets $7,659,897,974 100.0%
============== ======
Net Asset Class A--Based on net assets of $1,327,545,601 and 98,640,027 shares
Value: outstanding $ 13.46
==============
<PAGE> Class B--Based on net assets of $6,332,352,373 and 477,382,842 shares
outstanding $ 13.26
==============
<FN>
(a)Warrants entitle the Fund to purchase a predetermined number of
shares of stock/face amount of bonds at a predetermined price until the
expiration date.
(b)The interest rate shown represents the yield-to-maturity on this zero
coupon issue.
(c)Represents a pay-in-kind security.
(d)Subject to principal paydowns as a result of prepayments or
refinancings of the underlying mortgage instruments. As a result,
the average life may be less than the original maturity.
(e)Name changed from Crossland Federal Savings Bank.
Corresponding industry groups for fixed-income securities:
(1)Government
(2)Paper & Forest Products
(3)Banking
(4)Financial
(5)Industrial
(6)Leisure
(7)Utilities-Electric
(8)Telecommunications
(9)Pharmaceutical
(10)Automobiles & Equipment
(11)Hospital Management
(12)Oil & Related
(13)Newspaper/Publishing
(14)Multi-Industry
(15)Building Materials
(16)Electrical Equipment
(17)Biotechnology
(18)Healthcare
(19)Food
(20)Transportation
(21)Asset-Backed Security
(22)Supermarkets
(23)Electronics
(24)Metals
(25)Real Estate Investment Trust
(26)Energy Related
(27)Savings Bank
(28)Airlines
(29)Resources
(30)Building & Construction
(31)Insurance
(32)Real Estate
<PAGE> (33)Advertising
(34)Chemicals
(35)Commercial Services
(36)Broadcasting
(37)Computers
(38)Textiles
(39)Food & Tobacco
(40)Packaging & Containers
(41)Beverage
(42)Government Regional
(43)Conglomerates
(44)Finance
(45)Utilities
(46)Food Processing
(47)Aerospace
(48)Retail
++American Depositary Receipt (ADR).
++++Global Depositary Shares (GDS).
*Commercial Paper is traded on a discount basis; the interest rate shown is the
discount rate paid at the time of purchase by the Fund.
**Forward foreign exchange contracts as of July 31, 1994 were as follows:
<CAPTION>
Unrealized
Expiration Appreciation
Foreign Currency Sold Date (Depreciation)
<S> <C> <S> <C>
Chf 40,000,000 August 1994 $ 492,868
Chf 40,000,000 September 1994 (139,713)
DM 1,260,000,000 August 1994 16,097,310
Dkr 7,000,000 August 1994 28,707
ECU 117,000,000 August 1994 1,775,545
Frf 540,000,000 August 1994 1,645,793
Frf 200,000,000 September 1994 909,947
Pound Sterling 82,000,000 August 1994 1,359,404
Pound Sterling 18,000,000 September 1994 (376,200)
Nlg 125,000,000 August 1994 456,032
Nlg 60,000,000 September 1994 (6,125)
Pta 4,900,000,000 August 1994 1,017,989
Pta 19,500,000,000 September 1994 560,312
Yen 33,000,000,000 September 1994 9,644,550
Total (US$ Commitment--$1,940,511,073) $33,466,419
-----------
Total Unrealized Appreciation--Net On
Forward Foreign Exchange Contracts $33,466,419
===========
</TABLE>
<PAGE>
PORTFOLIO CHANGES
For the Quarter Ended July 31, 1994
Additions
Ace, Ltd.
Advocat, Inc.
Aetna Life & Casualty Co.
Alcatel Alsthom, Convertible Bonds,
2.50% due 1/01/2004
Alexander & Alexander Services, Inc.
Argentaria S.A.
Autopista Espana (ACESA) (Rights)
BW/IP Holdings, Inc.
Baden--Wuerttembergische Bank AG,
6.20% due 11/22/2013
Baloise Holding Insurance (Warrants)
Banco de Santander S.A. (New)
Banco de Santander S.A. (Ordinary)
Blue Circle Industries PLC
Brierly Investments, Ltd.
Burns, Philip & Company Ltd.,
5.50% due 4/30/2004
CBI Industries, Inc.
Canadian Government Bonds:
7.50% due 7/01/1997
9.50% due 10/01/1998
Card Establishment Services, Inc.,
10.00% due 10/01/2003
Carr Realty Corp.
Centex Acceptance Corp.
Chiles Offshore Corp.
Comsat Corp.
Credit National, Convertible Bonds,
3.75% due 1/01/2001
EG&G, Inc.
Enso-Gutzeit OY
Entergy Corp.
FPL Group, Inc.
First Madison Bank (11.50% Pfd.)
First Washington Savings Bank,
8.25% due 6/01/1999
Freeport-McMoRan Copper and Gold, Inc.
Genmar Holdings, 13.50% due 7/15/2001
Gerrity Oil & Gas Corp., 11.75% due 7/15/2004
Government of France, 8.50% due 4/25/2023
<PAGE>
Government of Spain:
10.90% due 8/30/2003
8.00% due 5/30/2004
Hanson America, 2.39% due 3/01/2001
HealthCare COMPARE Corp.
James River Corp. of Virginia
James River Corp. of Virginia
(9% Convertible Pfd., Series P)
Johnson Electric Holdings Ltd.,
Convertible Bonds, 4.50% due 11/05/2000
Koninklijke KNP BT (Pfd.)
Liberty Property Trust, Convertible Bonds,
8.00% due 7/01/2001
Lincoln National Corp.
Lomas Mortgage USA, Inc., 10.25%
due 10/01/2002
Long Island Lighting Co.:
7.90% due 7/15/2008
9.625% due 7/01/2024
Malan Realty Investors, Inc.,
8.50% due 7/01/2003
Mannesmann AG
Marcus Cable Co., L.P.,
13.50% due 8/01/2004
McMoRan Oil & Gas Co.
Metsa-Serla OY
Mid-Atlantic Realty Trust Co.
Munich Reinsurance Co. (Ordinary)
NBD Bancorp, Inc.
National Power PLC, Convertible Bonds,
6.25% due 9/23/2008
Nestle AG
Octel Communications Corp.
Oriental Bank and Trust
Peugeot, Bonds, 2.00% due 1/01/2001
Plains Resources, Inc. (Convertible Pfd.)
President Enterprises:
0% due 7/22/2001
0% due 7/22/2001
Presley Companies, Senior Note,
12.50% due 7/01/2001
Public Service Company of New Mexico:
10.30% due 1/15/2014
10.15% due 1/15/2016
Republic of Venezuela:
(Series A), 6.75% due 3/31/2020
(Series B), 6.75% due 3/21/2020
Reuters Holdings PLC
Rohr Industries, Inc.:
11.625% due 5/15/2003
7.75% due 5/15/2004
<PAGE>
SG Warburg Group, Convertible Bonds,
6.50% due 8/04/2008
Santa Fe Energy Resources, Inc.
(Convertible Pfd., Class A)
Santa Fe Energy Resources, Inc.,
11.00% due 5/15/2004
Sotheby's Holdings, Inc. (Class A)
Talisman Energy Inc., 8.50%
due 12/01/2000 (Ex. Warrants)
Tomkins PLC
TransAtlantic Holdings PLC, Convertible
Bonds, 5.50% due 4/30/2009
Treuhandanstalt:
7.125% due 1/29/2003
6.875% due 6/11/2003
Unidanmark A/S
Unilever Capital Corp.
Waban, Inc., 11.00% due 5/15/2004
Winterthur Schweizerische Versicherungs--
Gesellschaft AG
Deletions
ADT Limited (Warrants)
Amdahl Corp.
Banco de Santander, Convertible Bonds,
9.00% due 6/24/1994
Blue Circle, Convertible Bonds,
10.50% due 6/21/2005
Bridge Oil (USA), Inc., 9.50% due 8/15/2000
Brierly Investments Ltd., Convertible Notes, 9.00% due
6/30/1998
Bundesrepublic Deutschland, 6.25%
due 2/20/1998
Canadian Government Bonds, 4.75%
due 3/15/1996
Carter Holt Harvey, Ltd.
Collateralized Investment Co. Notes VI,
4.50% due 7/01/1994
Compagnie de Fives--Lille
Compagnie Financiere de Paribas (New Shares)
General Electric Capital Corp.,
3.55% due 1/19/1995
Government of Spain, 10.25% due 11/30/1998
Health Equity Properties, Inc.
Hillhaven Corp., 10.125% due 9/01/2001
Hook-SupeRx, Inc.
Hospital Corp. of America, 6.434% due 6/01/1998
<PAGE>
Meditrust, Convertible Bonds,
9.00% due 1/01/2002
Metrovacesa (New Shares)
Munich Reinsurance Co.
Public Service of New Mexico, First PV
Funding, 10.30% due 1/15/2014
Public Service of New Mexico, Lease Obligation,
First PV Funding, Convertible Bonds, 10.15%
due 1/15/1996
Resolution Trust Co.,
9.00% due 3/15/2003 (Class 3)
SKW Real Estate, 9.05% due 4/15/2004
Safeway, Inc.:
10.00% due 11/01/2002
9.30% due 2/01/2007
Sandoz AG (Part. Cert.)
Talisman Energy, Convertible Bonds, 8.50%
due 12/01/2000
Tesco PLC
Toyoda Automatic Loom Works, Ltd.
Union Miniere N.V.
US Treasury Notes:
4% due 1/31/1996
4.625% due 2/29/1996
4.75% due 2/15/1997
Vallehermoso Espanola S.A. (New Shares)
<PAGE>
PORTFOLIO INFORMATION
Worldwide
Investments
As of 7/31/94
Percent Breakdown of
Stocks & Fixed-Income Percent of
Securities by Country Net Assets
United States* 58.5%
Germany 12.0
Japan 5.9
Spain 4.2
United Kingdom 3.8
Canada 3.2
European Currency Units 2.5
France 2.2
Netherlands 2.1
Switzerland 1.4
Italy 1.1
Finland 0.5
Sweden 0.5
Australia 0.3
Ireland 0.3
Hong Kong --
New Zealand --
South Korea --
Portugal --
Denmark --
Austria --
----
Total 98.5%
====
[FN]
*Includes investments in short-term securities.
<PAGE>
Ten Largest Industries Percent of
(Equity Investments) Net Assets
Banking* 10.1%
Insurance 3.4
Utilities--Electric 3.1
Pharmaceuticals 2.9
Retail Stores 1.4
Electronics 1.3
Energy & Petroleum 1.2
Multi-Industry 1.1
Paper & Forest Products 1.1
Telecommunications 1.1
[FN]
*Includes Savings Banks.
Ten Largest Holdings Percent of
(Equity Investments) Net Assets
Chemical Banking Corp. 0.8%
KeyCorp 0.6
Entergy Corp. 0.6
Philip Morris Companies, Inc. 0.5
ABN Amro Holdings N.V. 0.5
First of America Bank Corp. 0.5
Veba AG 0.5
Comercia Inc. 0.5
Internationale Nederlanden
Groep N.V. 0.5
Kloeckner Werke AG 0.5
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