MERRILL LYNCH
GLOBAL
ALLOCATION
FUND, INC.
FUND LOGO
Annual Report
October 31, 1994
This report is not authorized for use as an offer of
sale or a solicitation of an offer to buy shares of the
Fund unless accompanied or preceded by the Fund's
current prospectus. Past performance results
shown in this report should not be considered a
representation of future performance. Investment
return and principal value of shares will fluctuate
so that shares, when redeemed, may be worth more
or less than their original cost.
<PAGE>
Merrill Lynch
Global Allocation
Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
MERRILL LYNCH GLOBAL ALLOCATION FUND, INC.
<TABLE>
Summary of
Fund's Overall
Asset Mix
As of 10/31/94
<CAPTION>
Percent of Fund's Portfolio Reference Portfolio
10/31/94 7/31/94 Percentages
<S> <C> <C> <C>
North American Equities* 22.2% 21.9% 36.0%
European Equities 11.0 11.4 9.6
Pacific Basin Equities* 4.8 5.3 14.4
Total Equities 38.0 38.6 60.0
US Dollar Denominated Fixed-Income Securities** 35.4 37.0 24.0
US Issuers 27.6 25.9 --
Non-US Issuers 7.8 11.1 --
Non-US Dollar Denominated Fixed-Income Securities** 24.1 22.3 16.0
Total Fixed-Income Securities 59.5 59.3 40.0
Cash & Cash Equivalents 2.5 2.1 --
<FN>
*Includes value of Stock Index Futures.
**Does not include value of segregated securities held as collateral for Stock Index Futures.
++Includes Preferred Stock.
</TABLE>
<PAGE>
DEAR SHAREHOLDER
Fiscal Year in Review
For the 12 months ended October 31,
1994, Merrill Lynch Global Allocation
Fund, Inc.'s Class A and Class B Shares
had total returns of +2.14% and +1.13%,
respectively. (These results do not
include sales charges, and would be
lower if sales charges were deducted.
Complete performance information,
including average annual total returns,
can be found on pages 4, 5 and 6 of this
report to shareholders.)
Perhaps the most significant develop-
ment during the fiscal year was the poor
performance of the US bond market.
Long-term Treasury bonds registered
their worst total returns in more than
50 years. With the widespread belief
that inflationary pressures were well-
contained, the consensus outlook for
lower short-term and long-term interest
rates was widely held for most of 1993.
The lowest yields for long-term bonds
were set in mid-October 1993. Beginning
in February 1994, a series of Federal
Reserve Board monetary policy tighten-
ings brought the Federal Fund's rate
from 3% to 4.75% by October month-end.
As the US central bank continued to
raise short-term interest rates, stronger-
than-expected economic results in-
creased inflationary fears in the United
States, and price weakness spread
to bond markets worldwide. Investors
anticipated more short-term interest
rate increases in the United States
because of the US dollar's weakness.
The long-term downtrend of the US
dollar began to accelerate in mid-1994
and continued throughout the balance
of the fiscal year. In contrast to the
fixed-income markets, the US and
other major world equity markets
performed comparatively well over the
course of the fiscal year.
<PAGE>
As the fiscal year began, Merrill Lynch
Global Allocation Fund had a 23.0% cash
position, because of the lack of attrac-
tively valued equity and fixed-income
investment opportunities. At that time
the Fund was underweighted in equities
and fixed-income securities at 35.1%
and 41.9% of net assets, respectively.
With the sharp decline in bond prices,
we invested the cash reserves largely in
longer-term fixed-income securities. We
believe that global bond markets offer
high real rates of return that are attrac-
tive to long-term investors. As a result,
by October 1994, the Fund had a very small
1.8% cash position.
The Fund's substantial cash position
insulated the portfolio from stock and
bond market volatility early in the fiscal
year. Our move to an overweighting in
bonds along with our underweighting
of equities hampered performance as
the fiscal year progressed. The negative
impact of declining bond prices was
mitigated somewhat by our focus on
fixed-income issues with intermediate-
term maturities which offered yields
almost as high as long-term bonds with
much less price volatility. We believe
that on a risk-adjusted basis these fixed-
income securities offer attractive invest-
ment opportunities and plan to con-
tinue to overweight the bond compo-
nent of the Fund. Looking at the equity
market, we believe that since stocks
have not declined significantly despite
higher interest rates, there are relatively
fewer undervalued equity investments
available. Therefore, we expect to
remain underweighted in equities. Two
areas that we identified as having
attractively valued equities were US
healthcare issues and European stocks.
Our investments in both enhanced the
portfolio's total return for the period.
<PAGE>
Foreign exchange market developments
did not aid performance, since the Fund
was overweighted in US dollars during
the fiscal year, both through investment
positions and also by hedging the port-
folio's Yen- and Deutschemark-denomi-
nated exposures back into US dollars.
The Fund's overweighted US dollar
position remains in place because we
continue to be concerned about the
foreign exchange risk inherent in
owning non-US dollar denominated
assets when the US dollar is so deeply
undervalued.
Portfolio Matters
The Fund's asset mix was virtually
unchanged during the quarter ended
October 31, 1994. (See "Summary of the
Fund's Overall Asset Mix" table on
page 1 of this report to shareholders.)
The existing Republic New York Corp.
holding in the banking industry was
increased, making it the Fund's largest
US stock investment. Republic New
York's shares represent a traditional
"value" investment. At the time of pur-
chase, Republic New York shares had a
price/book value ratio of 1.25, compared
to a price/book value ratio of close to 3
for the Standard & Poor's 500 Index
(S&P 500). Based on 1995 consensus
estimates, Republic New York shares
have a prospective price/earnings ratio
of 7.5, compared to a price/earnings
ratio of close to 14 for the S&P 500.
Republic New York's shares offer a
dividend yield that is close to that of
the average stock in the S&P 500, but
pays out less of its earnings in dividends
than the average S&P 500 company.
Other important fundamental factors
that led us to increase our investment
in Republic New York were its conserva-
tive management and strong financial
position.
<PAGE>
In the fixed-income sector, the Fund's
largest exposure outside the United
States continues to be in Deutschemark-
denominated bonds, which make up
almost 10% of the portfolio. The majority
of these German fixed-income invest-
ments are fixed-rate notes issued by the
federal government, its agencies, or by
German state governments. We believe
that the rate of German inflation is in a
declining trend and that real (inflation-
adjusted) interest rates are very attrac-
tive. Although we are not as optimistic
regarding the prospect for lower short-
term German interest rates in the near
term, we continue to believe that the
fundamentals for German bonds remain
very sound. The Bundesbank is one of
the most independent central banks in
the world, which suggests that it is
likely to continue to pursue a tight
monetary policy until the rate of infla-
tion is clearly contained. When tight
monetary policies result in lower
inflation rates, fixed-income investors
benefit.
In Conclusion
We thank you for your investment in
Merrill Lynch Global Allocation Fund,
Inc., and look forward to continuing to
serve your investment needs throughout
the Fund's new fiscal year and beyond.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Bryan N. Ison)
Bryan N. Ison
Vice President and Portfolio Manager
December 9, 1994
<PAGE>
Officers and
Directors
Arthur Zeikel, President and Director
Donald Cecil, Director
Edward H. Meyer, Director
Charles C. Reilly, Director
Richard R. West, Director
Edward D. Zinbarg, 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
PERFORMANCE DATA
About Fund
Performance
Since October 21, 1994, investors have been able to purchase
shares of the Fund through the Merrill Lynch Select Pricing SM
System, which offers four pricing alternatives:
*Class A Shares incur a maximum initial sales charge (front-
end load) of 5.25% and bear no ongoing distribution or account
maintenance fees. Class A Shares are available only to
eligible investors.
*Class B Shares are subject to a maximum contingent deferred
sales charge of 4% if redeemed during the first year, decreas-
ing 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.
<PAGE>
*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 distri-
bution fee).
Performance data for the Fund's Class A Shares and Class B
Shares are presented in the "Performance Summary" and
"Average Annual Total Return" tables on page 5. Data for all of
the Fund's shares, including Class C and Class D Shares, are
presented in the "Recent Performance Results" table.
The "Recent Performance Results" table on page 6 shows
investment results before the deduction of any sales charges for
Class A and Class B Shares for the 12-month and 3-month periods
ended October 31, 1994 and for Class C and Class D Shares for
the period since inception through October 31, 1994. All data
in this table assume imposition of the actual total expenses
incurred by each class of shares during the relevant period.
None of the past results shown should be considered a repre-
sentation 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.
Total Return
Based on a
$10,000
Investment
GRAPHIC MATERIAL APPEARS HERE.
SEE APPENDIX GRAPHIC AND IMAGE MATERIAL ITEM 1.
<PAGE>
<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--10/31/94 13.23 13.07 -- 0.219 + 0.41
------ ------
Total $0.864 Total $4.290
Cumulative total return as of 10/31/94: +105.00%**
<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>
Performance
Summary--
Class B Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<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--10/31/94 13.11 12.91 -- 0.159 - 0.34
------ ------
Total $0.864 Total $3.732
Cumulative total return as of 10/31/94: +93.42%**
<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>
<PAGE>
Average Annual
Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 9/30/94 + 4.94% - 0.57%
Five Years Ended 9/30/94 +13.35 +12.14
Inception (2/3/89) through 9/30/94 +13.62 +12.54
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 9/30/94 + 3.85% - 0.11%
Five Years Ended 9/30/94 +12.17 +12.17
Inception (2/3/89) through 9/30/94 +12.46 +12.46
[FN]
*Maximum contingent deferred sales charge is 4% and is reduced to 0%
after 4 years.
**Assuming payment of applicable contingent deferred sales charge.
PERFORMANCE DATA (concluded)
<TABLE>
Recent
Performance
Results
<CAPTION>
Net Asset Value Total Return
10/31/94 7/31/94++ 10/31/93 12-Month 3-Month++
<S> <C> <C> <C> <C> <C>
ML Global Allocation Fund, Inc. Class A Shares* $13.07 $13.46 $13.52 + 2.14%(1) -1.30%(2)
ML Global Allocation Fund, Inc. Class B Shares* 12.91 13.26 13.38 + 1.13(3) -1.47 (4)
ML Global Allocation Fund, Inc. Class C Shares* 12.91 12.91 -- -- 0.00
ML Global Allocation Fund, Inc. Class D Shares* 13.08 13.07 -- -- +0.08
US Stocks: Standard & Poor's 500 Index** + 3.84 +3.82
Non-US Stocks: Financial Times--Actuaries World Index*** +11.32 +2.80
US Bonds: ML Government Index GA05**** - 4.66 -1.29
Non-US Bonds: Salomon Brothers World Government Bond Index***** + 8.81 +4.01
<PAGE>
<FN>
++Investment results shown for Class C and Class D Shares are since inception (10/21/94).
*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 $0.542 per share ordinary income dividends and
$0.194 per share capital gains distributions.
(2)Percent change includes reinvestment of $0.219 per share ordinary income dividends.
(3)Percent change includes reinvestment of $0.428 per share ordinary income dividends and
$0.194 per share capital gains distributions.
(4)Percent change includes reinvestment of $0.159 per share ordinary income dividends.
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (in US dollars)
<CAPTION>
Value Percent of
COUNTRY Industries Shares Held Common Stocks Cost (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C>
Australia Banking 2,645,800 Westpac Banking Corp. $ 5,614,396 $ 8,890,825 0.1%
Food 7,916,000 Goodman Fielder Wattie Ltd. 8,324,587 7,457,553 0.1
Insurance 500,000 GIO Australia Holdings, Ltd. 841,716 860,488 0.0
Tobacco 1,999,800 Rothmans Holdings, Ltd. 7,517,440 7,684,280 0.1
1,242,300 WD & HO Wills Holdings, Ltd. 2,092,022 3,317,537 0.0
-------------- -------------- ------
9,609,462 11,001,817 0.1
Total Common Stocks in Australia 24,390,161 28,210,683 0.3
Austria Utilities-- 174,750 Oesterreichische Elektrizitats 10,542,970 10,955,855 0.1
Electric AG (Verbund)
Total Common Stocks in Austria 10,542,970 10,955,855 0.1
Canada Natural Resources 300,000 Canadian Pacific, Ltd. 3,503,161 4,800,000 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 3,500,000 0.0
Total Common Stocks in Canada 7,878,841 8,719,188 0.1
<PAGE>
Denmark Banking & Financial 53,500 Unidanmark A/S 1,870,730 2,143,815 0.0
Total Common Stocks in Denmark 1,870,730 2,143,815 0.0
Finland Banking 250,000 Kansallis-Osake-Pankki 533,290 465,230 0.0
3,033,915 Unitas Bank Ltd. 8,709,516 9,201,649 0.1
-------------- -------------- ------
9,242,806 9,666,879 0.1
Metals 175,000 Outokumpu OY 1,920,901 3,696,382 0.0
Paper & Forest 480,000 Enso-Gutzeit OY 3,485,619 4,253,033 0.1
Products 33,500 Metsa-Serla OY 1,397,019 1,553,076 0.0
450,000 Repola OY S 5,925,368 9,407,496 0.1
-------------- -------------- ------
10,808,006 15,213,605 0.2
Total Common Stocks in Finland 21,971,713 28,576,866 0.3
France Automobiles 113,300 Peugeot S.A. 14,661,303 16,952,125 0.2
Banking 100,878 Compagnie Financiere de Paribas 7,150,761 6,704,971 0.1
86,500 Societe Generale 9,605,405 9,752,862 0.1
-------------- -------------- ------
16,756,166 16,457,833 0.2
Insurance 89,900 GAN S.A. (Registered) 6,452,319 4,980,875 0.1
Multi-Industry 15,650 EuraFrance 4,256,713 5,412,051 0.1
Utilities 104,512 Compagnie Generale des Eaux 11,466,525 9,562,858 0.1
Total Common Stocks in France 53,593,026 53,365,742 0.7
Germany Banking 4,950 Bayerische Vereinsbank AG 1,181,909 1,468,067 0.0
33,900 Deutsche Bank AG 15,974,345 16,685,420 0.2
-------------- -------------- ------
17,156,254 18,153,487 0.2
<PAGE>
Capital Goods 369,636 Kloeckner Werke AG 17,229,762 33,391,229 0.4
Chemicals 49,450 Bayer AG 8,953,719 11,558,589 0.2
Insurance 7,860 Munich Reinsurance Co. (Ordinary) 14,055,714 14,461,773 0.2
Machinery & Equipment 57,179 Mannesmann AG 15,621,661 15,267,989 0.2
Multi-Industry 103,840 Veba AG 29,898,982 34,762,776 0.5
Steel 92,100 Thyssen AG 11,715,893 17,575,775 0.2
Total Common Stocks in Germany 114,631,985 145,171,618 1.9
Hong Kong Telecommunications 1,180,000 Hong Kong Telecommunications Ltd. 754,179 2,527,437 0.0
Utilities--Electric 676,800 China Light & Power Co., Ltd. 841,166 3,521,168 0.0
Total Common Stocks in Hong Kong 1,595,345 6,048,605 0.0
Ireland Building & 1,065,600 CRH PLC 3,594,241 5,992,348 0.1
Construction
Miscellaneous-- 2,178,000 Waterford Wedgwood Units 1,080,827 2,029,648 0.0
Consumer Goods
Total Common Stocks in Ireland 4,675,068 8,021,996 0.1
Italy Banking 533,400 IMI (Ordinary) 3,443,328 3,479,600 0.0
Building & 1,922,200 Filippo Fochi S.p.A. 6,101,165 5,123,201 0.1
Construction
Multi-Industry 7,639,495 Compagnie Industriali Riunite S.p.A.
(CIR) 6,443,269 8,795,128 0.1
Telecommunications 3,000,000 Societa Finanziaria Telefonica
S.p.A.(STET) 4,365,656 9,068,452 0.1
11,181,363 Societa Finanziaria Telefonica
S.p.A. (STET) RISP 20,700,047 27,657,210 0.4
3,958,000 Societa Italiana Esercizio Telecom
S.p.A. (S.I.P.) 3,323,376 10,857,934 0.1
-------------- -------------- ------
28,389,079 47,583,596 0.6
Total Common Stocks in Italy 44,376,841 64,981,525 0.8
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Value Percent of
COUNTRY Industries Shares Held Common Stocks Cost (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C>
Japan Automobiles & 1,512,000 Suzuki Motor Corp. $ 13,245,256 $ 19,198,513 0.2%
Equipment 295,000 Toyota Motor Corp. 4,030,746 6,516,982 0.1
-------------- -------------- ------
17,276,002 25,715,495 0.3
Beverage 497,000 Chukyo Coca-Cola Bottling Co., Ltd. 6,342,434 5,848,870 0.1
358,000 Hokkaido Coca-Cola Bottling Co., Ltd. 4,698,844 5,469,598 0.1
573,000 Kinki Coca-Cola Bottling Co., Ltd. 9,468,770 8,695,262 0.1
468,000 Mikuni Coca-Cola Bottling Co., Ltd. 7,366,538 6,763,704 0.1
444,000 Sanyo Coca-Cola Bottling Co., Ltd. 6,660,269 6,416,847 0.1
-------------- -------------- ------
34,536,855 33,194,281 0.5
Capital Goods 3,608,000 Mitsubishi Heavy Industries, Ltd. 21,963,469 29,386,931 0.4
Containers 751,000 Toyo Seikan Kaisha, Ltd. 18,417,114 25,118,613 0.3
Electric Construction 410,000 Chudenko Corp. 13,428,175 15,067,616 0.2
29,000 Taihei Dengyo Kaisha Ltd. 657,632 796,325 0.0
-------------- -------------- ------
14,085,807 15,863,941 0.2
Electric Equipment 189,000 Hitachi, Ltd. 1,899,032 1,970,579 0.0
562,500 Murata Manufacturing Co., Ltd. 18,134,758 22,994,735 0.3
1,360,000 Sumitomo Electric Industries 15,481,185 20,357,180 0.3
-------------- -------------- ------
35,514,975 45,322,494 0.6
Insurance 1,237,000 Dai-Tokyo Fire & Marine Insurance
Co., Ltd. 7,457,147 9,436,802 0.1
665,000 Fuji Fire & Marine Insurance
Co., Ltd. 3,727,641 4,633,788 0.1
1,426,000 Koa Fire & Marine Insurance
Co., Ltd. 7,615,672 10,010,117 0.1
620,000 Mitsui Marine & Fire Insurance
Co., Ltd. 5,004,638 4,704,243 0.1
1,314,000 Nichido Fire & Marine Insurance
Co., Ltd. 8,013,286 11,516,321 0.1
1,295,000 Nippon Fire & Marine Insurance
Co., Ltd. 6,665,367 9,598,534 0.1
1,775,000 Sumitomo Marine & Fire Insurance
Co.,Ltd. 13,830,866 16,069,733 0.2
1,625,000 Tokio Marine & Fire Insurance
Co., Ltd. 17,355,002 19,291,318 0.2
630,000 Yasuda Fire & Marine Insurance
Co., Ltd. 4,971,410 4,630,536 0.1
-------------- -------------- ------
74,641,029 89,891,392 1.1
<PAGE>
Office Equipment 1,372,000 Canon, Inc. 18,975,801 25,493,961 0.3
Pharmaceuticals 865,000 Sankyo Pharmaceuticals Co., Ltd. 21,123,949 22,502,323 0.3
384,000 Taisho Pharmaceuticals Co. 7,984,458 7,056,055 0.1
-------------- -------------- ------
29,108,407 29,558,378 0.4
Photography 298,000 Fuji Photo Film Co., Ltd. 6,679,585 7,106,225 0.1
Retail Stores 448,000 Ito Yokado Co., Ltd. 20,618,869 24,464,953 0.3
100,000 Sangetsu Co., Ltd. 3,160,832 2,973,057 0.0
-------------- -------------- ------
23,779,701 27,438,010 0.3
Steel 10,000 Maruichi Steel Tube Ltd. 153,093 190,978 0.0
Total Common Stocks in Japan 295,131,838 354,280,699 4.5
Netherlands Airlines 800,960 KLM Royal Dutch Airlines N.V. 15,801,656 22,267,353 0.3
Banking 1,226,150 ABN Amro Holdings N.V. 39,994,928 43,536,683 0.6
Chemicals 129,450 Akzo N.V. 12,211,968 16,336,636 0.2
Electronics 986,000 Philips Electronics N.V. 29,158,574 32,613,397 0.4
Insurance 155,000 Aegon N.V. 8,361,695 9,564,612 0.1
375,400 Amev N.V. 14,542,480 15,599,016 0.2
800,965 Internationale Nederlanden Groep N.V. 30,066,279 37,460,663 0.5
-------------- -------------- ------
52,970,454 62,624,291 0.8
Miscellaneous-- 10,000 Nijverdal Ten Cate N.V. 501,699 493,776 0.0
Manufacturing
Paper & Forest 229,920 Koninklijke KNP 3,736,708 6,787,206 0.1
Products
Telecommunications 310,680 Koninklijke PTT Nederland N.V. 9,724,158 9,889,458 0.1
Total Common Stocks in the Netherlands 164,100,145 194,548,800 2.5
New Finance 4,585,700 Brierly Investments, Ltd. 2,882,632 3,187,869 0.0
Zealand
Total Common Stocks in New Zealand 2,882,632 3,187,869 0.0
Spain Banking 116,011 Banco de Santander S.A. (New) 4,603,421 4,500,786 0.1
568,670 Banco de Santander S.A. (Ordinary) 20,154,425 23,106,333 0.3
61,775 Banco Popular Espanol S.A. 6,511,311 7,747,148 0.1
83,000 Bank Intercontinental S.A. 4,607,612 7,659,296 0.1
-------------- -------------- ------
35,876,769 43,013,563 0.6
<PAGE>
Electrical Equipment 45,750 Alba Corp. (Rights) -- -- 0.0
Energy & Petroleum 618,500 Repsol S.A. 18,566,656 19,774,028 0.3
Financial Services 326,000 Argentaria S.A. 12,974,203 12,608,526 0.2
Insurance 30,000 Mapfre S.A. 1,130,028 1,324,339 0.0
Miscellaneous 137,500 Autopista Espana (ACESA) 1,363,125 1,141,534 0.0
6,875 Autopista Espana (ACESA) (Rights) -- 57,077 0.0
195,000 Grupo Fosforera Espanola S.A. 1,696,601 1,603,337 0.0
-------------- -------------- ------
3,059,726 2,801,948 0.0
Multi-Industry 45,750 Corporacion Financiera Alba S.A. 1,611,658 2,227,788 0.0
Real Estate 236,708 Metrovacesa 5,888,465 7,747,288 0.1
Telecommunications 1,802,118 Telefonica Nacional de Espana S.A. 20,127,134 24,384,051 0.3
184,000 Telefonica Nacional de Espana S.A.
(ADR)++ 5,492,987 7,452,000 0.1
-------------- -------------- ------
25,620,121 31,836,051 0.4
Utilities--Electric 100,000 Empresa Nacional de Electricidad S.A. 3,759,956 4,582,103 0.1
591,800 Iberdrola I S.A. 3,310,030 3,897,461 0.1
-------------- -------------- ------
7,069,986 8,479,564 0.2
Total Common Stocks in Spain 111,797,612 129,813,095 1.8
Sweden Electrical Equipment 120,000 ASEA AB 'B' Free 6,532,086 8,709,193 0.1
Insurance 343,050 Skandia Forsakring 'AB' Free 5,159,320 6,248,199 0.1
Mining 725,725 Trelleborg 'B' Free 5,291,716 11,200,083 0.1
Miscellaneous 200,000 SKF 'A' 3,713,376 3,587,120 0.0
487,500 SKF 'B' Free 9,074,042 8,879,164 0.1
-------------- -------------- ------
12,787,418 12,466,284 0.1
Multi-Industry 245,000 Svedala Industri 'AB' Free 3,925,653 5,688,644 0.1
Total Common Stocks in Sweden 33,696,193 44,312,403 0.5
<PAGE>
Switzerland Electrical Equipment 19,534 BBC Brown Boveri & Cie (Bearer) 12,064,907 16,765,647 0.2
Food & Beverage 16,500 Nestle AG 13,014,541 15,422,771 0.2
Insurance 1,040 Baloise Holding Insurance (Registered) 1,986,476 1,958,280 0.0
Pharmaceuticals 19,800 Ciba-Geigy AG (Registered) 9,511,983 11,539,490 0.2
Total Common Stocks in Switzerland 36,577,907 45,686,188 0.6
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Value Percent of
COUNTRY Industries Shares Held Common Stocks Cost (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C>
United Aerospace 1,452,500 Rolls Royce PLC $ 3,586,733 $ 4,125,646 0.1%
Kingdom
Banks & Finance 232,800 Reuters Holdings PLC 1,686,224 1,824,109 0.0
Beverage 1,560,600 Grand Metropolitan PLC 10,377,835 10,572,222 0.1
35,000 Grand Metropolitan PLC (ADR)++ 1,031,100 940,625 0.0
-------------- -------------- ------
11,408,935 11,512,847 0.1
Conglomerates 50,000 Hanson PLC (ADR)++ 984,250 931,250 0.0
Consumer Goods 850,000 Vendome Luxury Group (Units) 5,501,439 7,201,333 0.1
Electrical Equipment 1,230,200 General Electric Co. PLC 5,848,390 5,542,573 0.1
Food 825,000 Tate & Lyle PLC 5,110,541 5,737,070 0.1
Industrial--Other 1,581,600 Tomkins PLC 5,292,446 5,473,424 0.1
Insurance 599,000 Commercial Union Assurance Co. PLC 5,354,117 5,358,386 0.1
Leisure & 857,100 The Rank Organisation PLC 5,411,425 5,666,477 0.1
Entertainment 490,000 Thorn EMI PLC (Ordinary) 7,194,681 7,774,795 0.1
-------------- -------------- ------
12,606,106 13,441,272 0.2
Pharmaceuticals 625,000 SmithKline Beecham Corp. PLC (ADR)++ 17,244,510 19,062,500 0.2
1,000,000 Zeneca Group PLC 9,406,370 14,054,964 0.2
-------------- -------------- ------
26,650,880 33,117,464 0.4
<PAGE>
Retail Stores 4,300 Boots Co. PLC 28,682 37,202 0.0
1,500,000 Sears Holdings PLC 2,825,599 2,632,245 0.0
-------------- -------------- ------
2,854,281 2,669,447 0.0
Steel 1,500,000 British Steel PLC 1,442,449 3,923,881 0.1
Telecommunications 1,097,200 British Telecommunications PLC 6,551,120 7,065,768 0.1
423,200 Unilever Capital Corp. 6,373,658 7,875,481 0.1
-------------- -------------- ------
12,924,778 14,941,249 0.2
Utilities-- 111,800 Cable & Wireless International PLC 823,118 766,510 0.0
Communications
Utilities--Gas 435,800 British Gas PLC 1,789,284 2,070,174 0.0
Waste Disposal 83,500 Attwoods PLC (ADR)++ 759,800 761,938 0.0
Total Common Stocks in the
United Kingdom 104,623,771 119,398,573 1.6
United Aerospace 56,000 Boeing Co. 2,003,133 2,457,000 0.0
States
Aerospace & Defense 200,000 EG&G, Inc. 2,889,403 3,225,000 0.0
Airlines 12,500 UAL Corp. 1,187,500 1,181,250 0.0
Apparel 860,000 Fruit of the Loom, Inc. 23,555,786 24,617,500 0.3
373,900 Liz Claiborne, Inc. 8,022,626 8,646,438 0.1
150,000 NIKE, Inc. (Class B) 7,970,975 9,131,250 0.1
-------------- -------------- ------
39,549,387 42,395,188 0.5
Automobiles 210,300 General Motors Corp. 8,014,471 8,306,850 0.1
<PAGE>
Banking 85,000 Albank Financial Corp. 971,875 1,870,000 0.0
280,500 AmSouth Bancorporation 7,624,356 8,344,875 0.1
678,400 Anchor Bancorp., Inc. 8,229,970 10,006,400 0.1
400,000 Bank of New York 10,650,626 12,700,000 0.2
75,000 BankAmerica Corp. 3,219,677 3,262,500 0.0
319,000 Bankers Trust Co. 7,620,125 6,738,875 0.1
129,500 Banknorth Group, Inc. 1,865,422 2,946,125 0.0
700,000 Barnett Banks Inc. 28,355,015 29,050,000 0.4
500,000 California Federal Bank 4,500,000 5,750,000 0.1
496,700 Charter One Financial, Inc. 9,263,048 9,996,088 0.1
798,500 Chase Manhattan Corp. 26,045,496 28,746,000 0.4
1,391 Chase Manhattan Corp. (Warrants) (a) 6,955 9,215 0.0
1,513,500 Chemical Banking Corp. 55,174,508 57,513,000 0.7
1,560,300 City National Corp. 11,096,128 17,163,300 0.2
1,112,500 Comerica Inc. 30,077,266 30,732,813 0.4
375,000 CoreStates Financial Corp. 9,855,001 9,703,125 0.1
1,120,000 First of America Bank 41,734,310 37,940,000 0.5
1,080,000 First Commerce Corp. 27,728,848 28,350,000 0.4
400,000 First Union Corp. 16,226,028 18,000,000 0.2
1,426,103 KeyCorp 42,386,643 40,822,184 0.5
498,600 Mellon Bank Corp. 26,731,868 27,734,625 0.4
112,950 Mercantile Bancorp., Inc. 2,920,618 3,925,012 0.1
150,000 NBD Bancorp, Inc. 4,352,648 4,612,500 0.1
648,000 Onbancorp, Inc. 18,276,126 16,848,000 0.2
294,400 Oriental Bank and Trust 5,050,248 4,747,200 0.1
45,000 Premier Bancorp. 708,437 731,250 0.0
1,400,000 Republic New York Corp. 64,147,741 64,050,000 0.8
450,000 Southern National Corp. 8,670,728 9,281,250 0.1
17,000 Trustco Bankcorp. NY 222,793 327,250 0.0
-------------- -------------- ------
473,712,504 491,901,587 6.3
Building & 605,000 TJ International, Inc. 10,871,756 10,738,750 0.1
Construction
Communications 185,700 Comsat Corp. 4,308,767 3,992,550 0.1
104,500 GTE Corp. 3,514,166 3,213,375 0.0
300,000 Octel Communications Corp. 5,268,100 6,450,000 0.1
-------------- -------------- ------
13,091,033 13,655,925 0.2
Computers 148,500 Boole & Babbage, Inc. 2,962,360 4,714,875 0.1
700,000 Borland International Corp. 8,054,338 7,437,500 0.1
270,000 International Business Machines Corp. 12,146,536 20,115,000 0.3
800,000 Unisys Corp. 9,264,381 8,500,000 0.1
100,000 Western Digital Co. 1,224,880 1,700,000 0.0
-------------- -------------- ------
33,652,495 42,467,375 0.6
<PAGE>
Construction & 153,800 Centex Corp. 3,880,118 3,422,050 0.0
Housing 500,000 K. Hovnanian Enterprises, Inc.
(Class A) 4,920,209 3,000,000 0.0
-------------- -------------- ------
8,800,327 6,422,050 0.0
Energy & Petroleum 163,900 Ashland Coal, Inc. 4,132,919 4,998,950 0.1
45,000 Brown (Tom), Inc. 195,997 568,125 0.0
49,500 Cabot Oil & Gas Corp. (Class A) 529,030 915,750 0.0
34,600 Coastal Corp. 817,773 986,100 0.0
153,000 Coho Resources, Inc. 1,662,813 765,000 0.0
408,000 Gerrity Oil & Gas Corp. 5,748,846 2,397,000 0.0
130,000 Helmerich & Payne, Inc. 2,773,423 4,062,500 0.1
30,000 McMoRan Oil & Gas Co. 146,197 105,000 0.0
46,400 Mitchell Energy Development Corp.
(Class A) 675,717 823,600 0.0
174,350 Mitchell Energy Development Corp.
(Class B) 2,755,451 3,138,300 0.0
50,000 Murphy Oil Corp. 1,899,720 2,381,250 0.0
106,100 Nuevo Energy Co. 2,048,791 2,373,987 0.0
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Shares Held/ Value Percent of
COUNTRY Industries Face Amount Common Stocks & Notes Cost (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C>
United Energy & Petroleum 1,563,400 Occidental Petroleum Corp. $ 29,245,537 $ 34,199,375 0.4%
States (concluded) 61,200 Pennzoil Co. 3,775,844 3,151,800 0.0
(continued) 149,700 +++Plains Resources, Inc. 1,371,062 991,762 0.2
1,794,247 Santa Fe Energy Resources, Inc. 16,331,708 16,372,512 0.0
1,175,000 Trans Texas Gas Corp. 14,200,000 15,421,875 0.2
700,000 USX-Marathon Group 12,267,189 13,125,000 0.2
138,800 Unocal Corp. 3,272,336 4,059,900 0.1
-------------- -------------- ------
103,850,353 110,837,786 1.3
Financial Services 807,800 Student Loan Marketing Association 34,901,569 25,950,575 0.3
Foods/Food 900,000 Borden, Inc. 11,393,223 12,150,000 0.2
Processing
Healthcare Services 410,000 Advocat, Inc. 3,897,500 4,305,000 0.1
961,200 Baxter International, Inc. 21,122,668 24,991,200 0.3
650,000 Beverly Enterprises, Inc. 6,733,713 9,831,250 0.1
55,000 Community Psychiatric Centers 580,744 543,125 0.0
150,000 HealthCare COMPARE Corp. 2,732,397 4,143,750 0.1
530,500 Hillhaven Corp. 8,732,138 11,803,625 0.2
150,000 Manor Care, Inc. 2,928,940 4,125,000 0.1
546,500 US Surgical Corp. 11,871,438 12,296,250 0.2
-------------- -------------- ------
58,599,538 72,039,200 1.1
<PAGE>
Index-Related US$ 40,800 Republic of Austria Stock Index
Growth Notes due 8/15/1996 432,941 540,600 0.0
Industrial 915,000 BW/IP Holdings, Inc. 15,816,387 16,012,500 0.2
390,000 CBI Industries, Inc. 10,158,411 9,018,750 0.1
250,000 Cooper Industries, Inc. 9,064,307 9,343,750 0.1
2,672 Gardner Denver Machinery, Inc. 22,042 27,722 0.0
-------------- -------------- ------
35,061,147 34,402,722 0.4
Insurance 524,700 Ace, Ltd. 12,307,636 11,936,925 0.2
245,000 Aetna Life & Casualty Co. 12,939,855 11,300,625 0.1
500,000 Alexander & Alexander Services, Inc. 8,443,979 10,125,000 0.1
550,000 American General Corp. 14,227,584 15,125,000 0.2
571,000 Horace Mann Educators, Inc. 13,654,588 12,347,875 0.2
630,200 Lincoln National Corp. 23,245,001 22,844,750 0.3
203,000 PartnerRe Holdings, Ltd. 4,026,552 4,110,750 0.1
-------------- -------------- ------
88,845,195 87,790,925 1.2
Metals 277,500 Alcan Aluminum, Ltd. 4,669,221 7,423,125 0.1
120,000 Aluminum Co. of America 8,094,043 10,230,000 0.1
100,000 Inco Ltd. 2,132,000 3,012,500 0.0
132,800 Reynolds Metals Co. 5,801,771 7,353,800 0.1
-------------- -------------- ------
20,697,035 28,019,425 0.3
Miscellaneous 125,000 ADT Limited (ADR)++ 1,434,405 1,406,250 0.0
93,700 Handleman Co. 1,044,752 1,054,125 0.0
223,900 Jostens Inc. 4,199,326 3,862,275 0.1
385,000 Loews Corp. 35,433,180 33,976,250 0.4
-------------- -------------- ------
42,111,663 40,298,900 0.5
Natural Resources 7,500 Freeport McMoRan Copper and
Gold, Inc. 164,363 170,625 0.0
300,000 Freeport-McMoRan, Inc. 4,907,292 5,512,500 0.1
440,000 Horsham Corp. (ADR)++ 3,550,742 6,820,000 0.1
-------------- -------------- ------
8,622,397 12,503,125 0.2
Oil Services 670,000 Arethusa (Off-Shore) Ltd. 6,809,378 7,286,250 0.1
149,800 Atwood Oceanics, Inc. 1,238,663 1,872,500 0.0
43,400 Cliffs Drilling Co. 595,425 553,350 0.0
2,949,375 Noble Drilling Corp. 21,592,068 21,382,969 0.3
-------------- -------------- ------
30,235,534 31,095,069 0.4
<PAGE>
Paper & Forest 561,900 Boise Cascade Corp. 12,517,685 14,890,350 0.2
Products 435,000 Bowater, Inc. 8,882,625 11,745,000 0.2
112,000 Champion International Corp. 3,318,152 4,144,000 0.1
150,000 International Paper Co. 9,477,586 11,175,000 0.1
150,000 Stone Container Corp. 1,954,854 2,512,500 0.0
-------------- -------------- ------
36,150,902 44,466,850 0.6
Pharmaceuticals/ 600,000 ALZA Corp. 13,048,597 10,650,000 0.1
Biotechnology 121,500 Alteon Inc. 1,205,188 789,750 0.0
139,400 American Home Products Corp. 8,256,144 8,851,900 0.1
435,000 +++Applied Immune Sciences, Inc. 6,160,143 2,229,375 0.0
58,200 AutoImmune Inc. 385,575 305,550 0.0
600,000 Bristol-Myers Squibb Co. 33,254,124 35,025,000 0.5
110,000 Immune Response Corp. 1,444,874 893,750 0.0
275,000 Lilly (Eli) & Co. 13,880,596 17,050,000 0.2
550,000 Merck & Co. 18,652,516 19,662,500 0.3
100,000 Pfizer, Inc. 5,793,898 7,412,500 0.1
-------------- -------------- ------
102,081,655 102,870,325 1.3
Pollution Control 646,900 WMX Technologies, Inc. 16,148,443 19,002,687 0.2
Publishing 250,000 Deluxe Corp. 6,706,999 7,062,500 0.1
301,500 New York Times Co. (Class A) 7,158,778 6,821,437 0.1
150,000 Times Mirror Co. 4,654,407 4,893,750 0.1
-------------- -------------- ------
18,520,184 18,777,687 0.3
Real Estate 424,600 Carr Realty Corp. 8,608,363 8,279,700 0.1
500,000 First Union Real Estate Investments 3,764,840 3,875,000 0.1
661,300 Mid-America Realty Investments 6,616,640 5,786,375 0.1
100,000 Mid-Atlantic Realty Trust Co. 917,500 875,000 0.0
720,000 Prime Residential, Inc. 11,584,750 11,340,000 0.1
-------------- -------------- ------
31,492,093 30,156,075 0.4
Retail Stores 608,500 Baker (J.) Inc. 10,187,765 10,268,437 0.1
516,900 ++++Buttrey Food & Drug Stores Co. 4,084,486 4,005,975 0.1
156,700 Dayton-Hudson Corp. 10,496,970 12,144,250 0.2
100,000 Eagle Food Centers, Inc. 612,500 225,000 0.0
1,110,000 ++++Filene's Basement Corp. 10,092,619 8,325,000 0.1
1,373,500 Payless Cashways Inc. 17,027,625 12,876,562 0.2
1,100,000 Service Merchandise Co., Inc. 9,491,185 6,600,000 0.1
158,400 Smith Food & Drug Ltd. 3,067,501 4,098,600 0.1
400,000 Sotheby's Holdings, Inc. (Class A) 4,879,558 4,850,000 0.1
1,111,600 The Vons Companies, Inc. 18,500,110 21,676,200 0.3
-------------- -------------- ------
88,440,319 85,070,024 1.3
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Value Percent of
COUNTRY Industries Shares Held Common Stocks Cost (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C>
United Savings Banks 106,000 Ahmanson (H.F.) & Co. $ 1,767,857 $ 2,027,250 0.0%
States 297,600 Bankers Corp. 1,688,842 4,240,800 0.1
(concluded) 655,000 Brooklyn Bancorp Inc. (e) 15,782,500 21,287,500 0.3
500,000 Dime Savings Bank of New York 3,417,510 4,375,000 0.1
196,400 Downey Savings & Loan Association 2,896,670 3,707,050 0.1
1,895,553 Glendale Federal Savings Bank 16,659,352 20,614,139 0.3
770,194 Glendale Federal Savings Bank
(Warrants) (a) -- 2,599,405 0.0
37,500 NS Bancorp, Inc. 300,000 1,031,250 0.0
200,000 Portsmouth Bank Shares, Inc. 1,396,014 2,300,000 0.0
-------------- -------------- ------
43,908,745 62,182,394 0.9
Textiles 2,825,200 Burlington Industries, Inc. 37,451,653 26,486,250 0.3
Tobacco 720,000 Philip Morris Companies, Inc. 34,696,738 44,100,000 0.6
Utilities--Electric 1,250,000 Allegheny Power System, Inc. 27,315,551 25,937,500 0.3
125,000 CMS Energy Corp. 2,290,025 2,875,000 0.0
2,071,000 Centerior Energy Corp. 31,583,112 17,085,750 0.2
150,000 Consolidated Edison Company Inc. 4,390,815 3,731,250 0.1
1,780,000 Entergy Corp. 47,516,856 41,607,500 0.5
475,000 FPL Group, Inc. 14,363,265 15,734,375 0.2
300,000 General Public Utilities Corp. 8,663,891 7,725,000 0.1
1,757,900 Niagara Mohawk Power Corp. 28,627,702 24,171,125 0.3
844,600 Texas Utilities Co. 26,942,999 27,555,075 0.4
1,148,800 Unicom Corporation 27,549,620 24,842,800 0.3
-------------- -------------- ------
219,243,836 191,265,375 2.4
Utilities--Gas 115,650 Atmos Energy Corp. 1,445,257 1,893,769 0.0
126,900 Pacific Enterprises 2,486,131 2,728,350 0.0
40,800 South Jersey Industries, Inc. 711,756 708,900 0.0
-------------- -------------- ------
4,643,144 5,331,019 0.0
Total Common Stocks
in the United States 1,661,300,316 1,708,087,988 22.0
Total Investments in Common Stocks 2,695,637,094 2,955,511,508 37.8
Equity Closed-End Funds
<PAGE>
Portugal Financial Services 39,500 Capital Portugal Fund 2,052,116 3,250,976 0.1
Total Equity Closed-End Funds
in Portugal 2,052,116 3,250,976 0.1
United Financial Services 320,000 Austria Fund 2,642,432 2,600,000 0.0
States 166,666 European Warrant Fund 1,363,723 1,624,993 0.0
11,700 Global Yield Fund 89,798 71,662 0.0
300,100 Growth Fund of Spain, Inc. 2,630,827 3,076,025 0.1
150,000 Irish Investment Fund, Inc. 1,086,041 1,518,750 0.0
150,000 Italy Fund 1,198,520 1,312,500 0.0
25,600 Jakarta Growth Fund 158,080 275,200 0.0
40,000 Portugal Fund 360,368 635,000 0.0
-------------- -------------- ------
9,529,789 11,114,130 0.1
Total Equity Closed-End Funds
in the United States 9,529,789 11,114,130 0.1
Total Investments in
Equity Closed-End Funds 11,581,905 14,365,106 0.2
Preferred Stocks
Germany Automobiles 80,150 Volkswagen of America, Inc. 17,907,876 18,739,821 0.2
Multi-Industry 45,000 R.W.E. AG 8,725,424 11,029,558 0.1
Total Preferred Stocks in Germany 26,633,300 29,769,379 0.3
Netherlands Paper & Forest 100,240 Koninklijke KNP BT 404,041 450,397 0.0
Products
Total Preferred Stocks in Netherlands 404,041 450,397 0.0
Spain Banking 225,000 Santander Overseas Bank
(8%, Series D) (ADR)++ 5,463,250 4,837,500 0.1
Total Preferred Stocks in Spain 5,463,250 4,837,500 0.1
United Engineering 750,000 AMEC PLC (6.50% Convertible) 968,501 1,003,926 0.0
Kingdom
Retail Stores 545,000 Signet Group (Convertible) (ADR)++ 2,194,907 4,155,625 0.1
Waste Disposal 1,700,000 Attwoods PLC (8.50% Convertible) 2,417,796 2,455,946 0.0
Total Preferred Stocks
in the United Kingdom 5,581,204 7,615,497 0.1
<PAGE>
United Airlines 100,000 +++++++AMR Corp. (Convertible $3.00) 5,065,500 4,150,000 0.1
States 85,000 +++++++UAL Corp. (6.25% Convertible) 7,885,625 7,203,750 0.1
150,000 USAir Group, Inc. (Convertible $4.375,
Series B) 7,940,250 2,493,750 0.0
-------------- -------------- ------
20,891,375 13,847,500 0.2
Automobiles &
Equipment 20,000 Ford Motor Co. (8.40% Convertible,
Series A) 1,000,000 1,935,000 0.0
Banking 75,000 California Federal Bank (10.625%) 7,500,000 7,593,750 0.1
115,000 First Nationwide Bank (11.50%) 11,500,000 11,787,500 0.2
100,000 Fourth Financial Corp. (Convertible,
Class A) 2,500,000 2,950,000 0.0
130,300 Marine Midland Banks, Inc.
(Adj. Rate, Series A) 5,219,925 5,765,775 0.1
100,000 Onbancorp, Inc. (6.75% Convertible,
Series B) 2,668,750 2,375,000 0.0
-------------- -------------- ------
29,388,675 30,472,025 0.4
Energy & Petroleum 150,000 Grant Tensor Corp. (9.75% Convertible) 1,853,375 1,987,500 0.0
13,000 +++Plains Resources, Inc.
(Convertible, Series C) 1,300,000 1,435,687 0.0
64,219 Santa Fe Energy Resources, Inc. (7%) 954,075 1,131,860 0.0
460,000 Santa Fe Energy Resources, Inc.
(Convertible, Class A) 4,082,500 4,197,500 0.1
50,000 Tenneco Inc. (Convertible, Series P) 1,475,000 2,081,250 0.0
-------------- -------------- ------
9,664,950 10,833,797 0.1
Financial Services 175,000 A/S Eksportfinans (8.70%) 4,377,500 4,221,875 0.1
Industrial 1,080,000 US Surgical Corp. (Convertible) 24,354,000 28,620,000 0.4
Natural Resources 85,000 Alumax Inc. (Convertible) 7,240,312 10,795,000 0.1
150,000 Cyprus Amax Minerals Co.
(Convertible, Series A) 9,188,313 9,262,500 0.1
20,000 Echo Bay Finance Ltd. (Convertible)
(Series A) 500,000 747,500 0.0
245,000 Freeport-McMoRan Copper and Gold Inc.
(Convertible Shares) 5,828,450 5,635,000 0.1
219,000 Freeport-McMoRan Inc.
(Convertible--Gold) 7,703,330 7,884,000 0.1
-------------- -------------- ------
30,460,405 34,324,000 0.4
Oil Service 447,200 +++Noble Drilling Corp. (Convertible) 10,745,382 10,062,000 0.1
Paper & Forest 300,000 Boise Cascade Corp.(Convertible,
Products Series G) 6,337,500 7,387,500 0.1
388,200 James River Corp. of Virginia
(9% Convertible, Series P) 6,696,450 8,540,400 0.1
-------------- -------------- ------
13,033,950 15,927,900 0.2
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Value Percent of
COUNTRY Industries Shares Held Preferred Stocks Cost (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C>
United Real Estate 500,000 Catellus Development Corp. (7.25%
States 666,000 Conv. Exchangeable, Series B) $ 25,000,000 $ 22,000,000 0.3%
(concluded) National Health Investors, Inc.
(8.50% Conv.) 16,650,000 16,150,500 0.2
700,000 Prime Retail, Inc. (10.50%) 16,712,575 14,875,000 0.2
-------------- -------------- ------
58,362,575 53,025,500 0.7
Savings Bank 619,900 Glendale Federal Savings Bank
(8.75% Convertible, Series E) 15,070,337 19,449,362 0.3
Total Preferred Stocks in the
United States 217,349,149 222,718,959 2.9
Total Investments in Preferred Stocks 255,430,944 265,391,732 3.4
<CAPTION>
Face Amount Fixed-Income Securities
<S> <S> <C> <S> <C> <C> <C>
Canada Government Canadian Government Bonds:
Obligations C$ 120,000,000 9.50% due 10/01/1998 91,871,422 91,843,526 1.2
25,000,000 8.50% due 3/01/2000 18,537,048 18,394,587 0.2
25,000,000 6.50% due 6/01/2004 16,791,181 15,473,638 0.2
-------------- -------------- ------
127,199,651 125,711,751 1.6
Oil & Related Mark Resources Inc., Convertible
Bonds:
7,250,000 7.00% due 4/15/2002 5,052,564 4,637,469 0.1
1,250,000 8.00% due 11/30/2004 943,556 887,377 0.0
14,500,000 Talisman Energy Inc.,8.50% due
12/01/2000 11,040,982 10,132,737 0.1
-------------- -------------- ------
17,037,102 15,657,583 0.2
<PAGE>
Paper & Forest Domtar, Inc.:
Products 6,763,000 10.35% due 9/01/2006 4,014,962 4,576,015 0.1
3,500,000 10.00% due 4/15/2011 1,938,573 2,322,894 0.0
-------------- -------------- ------
5,953,535 6,898,909 0.1
Real Estate +++Olympia & York Inc.:
57,194,000 Series 1, 10.70% due 11/04/1995 29,626,733 29,182,770 0.4
34,000,000 Series 2, 11.00% due 11/04/1998 18,060,242 17,348,222 0.2
-------------- -------------- ------
47,686,975 46,530,992 0.6
Resources 67,000,000 Sheritt Gordon, Ltd., 11.00%
due 3/31/2004 48,454,704 47,811,137 0.6
Total Fixed-Income Securities
in Canada 246,331,967 242,610,372 3.1
European Government ECU 175,000,000 Government of France,8.25%
Currency Obligations due 4/25/2022 202,798,464 201,546,800 2.6
Unites
Banking 15,650,000 Banco Commercial Portuguese, Conv.
Bonds, 8.75% due 5/21/2002 21,845,827 20,995,038 0.3
2,000,000 Credit Local de France,
9.48% due 10/16/2001 (b) 1,538,042 1,384,313 0.0
-------------- -------------- ------
23,383,869 22,379,351 0.3
Industrial 1,000,000 Investor International Placements,
Conv. Bonds, 7.25% due 6/21/2001 1,001,412 1,271,928 0.0
7,000,000 SKF-AB Lyons, Conv. Bonds,
8.63% due 7/26/2002 (b) 4,907,415 4,628,932 0.1
-------------- -------------- ------
5,908,827 5,900,860 0.1
Total Fixed-Income Securities in
European Currency Units 232,091,160 229,827,011 3.0
Finland Government Fmk 75,000,000 Republic of Finland,
Obligations 11.00% due 1/15/1999 14,754,836 17,113,843 0.2
Total Fixed-Income Securities
in Finland 14,754,836 17,113,843 0.2
<PAGE>
France Government Frf 675,000,000 Government of France,
Obligations 8.50% due 4/25/2023 125,049,588 127,690,666 1.6
Automobiles 5,500 Peugeot, Conv.Bonds, 2.00% 992,341 981,952 0.0
due 1/01/2001
Banking 58,000 Societe Generale, Conv. Bonds,
3.50% due 1/01/2000 7,499,838 7,788,861 0.1
13,000 Credit National, Conv. Bonds, 3.75%
due 1/01/2001 1,653,250 1,665,049 0.0
-------------- -------------- ------
9,153,088 9,453,910 0.1
Industrial 30,000 Alcatel Alsthom, Conv. Bonds,
2.50% due 1/01/2004 3,926,887 3,883,175 0.1
Insurance 28,000 Finaxa Conv. Bonds, 3.00%
due 1/01/2001 7,022,120 7,009,509 0.1
Multi-Industry 8,713 Compagnie Generale des Eaux, Conv.
Bonds, 6.00% due 1/01/1998 4,859,722 5,261,955 0.1
Total Fixed-Income Securities
in France 151,003,746 154,281,167 2.0
Germany Government DM 63,000,000 Bundesrepublic Deutscheland,
Obligations 6.75% due 4/22/2003 38,164,973 39,465,493 0.5
Treuhandanstalt:
35,000,000 7.375% due 12/02/2002 22,503,456 22,841,249 0.3
75,000,000 6.875% due 6/11/2003 44,862,188 47,331,451 0.6
400,000,000 7.50% due 9/09/2004 258,210,288 263,115,244 3.4
-------------- -------------- ------
363,740,905 372,753,437 4.8
Government 64,000,000 Baden-Wuerttemberg,
Obligations-- 6.20% due 11/22/2013 37,148,769 37,902,624 0.5
Regional 57,500,000 Freie Hansestadt Hamburg,
6.08% due 11/29/2018 33,152,404 33,678,844 0.4
165,000,000 Land Hessen, 6.00% due 11/29/2013 94,980,999 96,643,640 1.2
110,000,000 Mecklenberg Vorpommern,
6.15% due 6/16/2023 61,012,437 62,492,860 0.8
116,200,000 Nordrhein-Westfalen,
6.125% due 12/21/2018 66,517,753 68,392,441 0.9
Rheinland-Pfalz:
33,000,000 5.75% due 2/24/2014 18,324,663 18,885,952 0.2
62,000,000 6.08% due 11/29/2018 35,633,056 36,306,343 0.5
50,000,000 Sachsen-Anhalt, 6% due 1/10/2014 28,632,994 28,897,376 0.4
-------------- -------------- ------
375,403,075 383,200,080 4.9
<PAGE>
Banking 2,310,000 Commerzbank AG, Floating Rate
Convertible Bonds, 2.00% due
6/15/2001 (b) 1,556,456 2,086,749 0.0
Total Fixed-Income Securities
in Germany 740,700,436 758,040,266 9.7
Ireland Industrial IrP 8,046,277 CRH Capital Corp., Conv. Bonds,
6.50% due 4/30/2003 15,808,558 16,806,339 0.2
Total Fixed-Income Securities
in Ireland 15,808,558 16,806,339 0.2
Italy Telecom- Softe SA-LUX:
munications Lit 10,500,000,000 Convertible Bonds, 4.25%
due 7/30/1998 7,317,044 7,610,674 0.1
16,760,000,000 8.75% due 3/24/1997 10,756,360 9,969,057 0.1
Total Fixed-Income Securities
in Italy 18,073,404 17,579,731 0.2
Japan Automobiles YEN 400,000,000 Toyota Motor Corp., Convertible
& Equipment Bonds, 1.20% due 1/28/1998 2,477,431 4,583,462 0.0
Beverages 1,282,500,000 Hokkaido Coca-Cola Bottling Co., Ltd.,
Conv. Bonds, 0.90% due 6/30/1995 13,057,275 13,040,802 0.2
Industrial 988,000,000 Matsushita Electric Works, Conv.
Bonds, 2.70% due 5/31/2002 9,691,544 11,525,137 0.2
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Value Percent of
COUNTRY Industries Face Amount Fixed-Income Securities Cost (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C>
Japan Pharma- YEN 2,850,000,000 Glaxo Holdings PLC, Conv. Bonds,
(concluded) ceutical 4.30% due 9/28/1998 $ 25,735,735 $ 29,273,769 0.4%
Transportation 950,000,000 Hankyu Corp., Convertible Bonds,
1.25% due 9/30/1998 8,674,953 8,899,814 0.1
Total Fixed-Income Securities
in Japan 59,636,938 67,322,984 0.9
<PAGE>
New Utilities-- NZ$ 2,000,000 Natural Gas Corp. Holdings,
Zealand Gas Convertible Bonds, 10.50% due
10/14/1997 1,186,318 1,661,040 0.0
Total Fixed-Income Securities
in New Zealand 1,186,318 1,661,040 0.0
South Food President Enterprises (b):
Korea KW 800,000 8.30% due 7/22/2001 796,158 834,000 0.0
2,000,000 +++++++8.30% due 7/22/2001 1,990,454 2,085,000 0.0
Total Fixed-Income Securities
in South Korea 2,786,612 2,919,000 0.0
Spain Government Government of Spain:
Obligations Pta 14,500,000,000 10.30% due 6/15/2002 108,997,661 109,696,256 1.4
12,000,000,000 10.90% due 8/30/2003 91,501,238 93,407,839 1.2
Total Fixed-Income Securities
in Spain 200,498,899 203,104,095 2.6
Switzerland Financial Chf 4,010,000 Chrysler Financial Corp.,
Services 5.75% due 6/18/1996 1,914,011 3,208,639 0.1
Hospital 1,500,000 American Medical International, Inc.,
Management 5.00% due 3/18/1996 493,386 1,161,425 0.0
Industrial 1,401,000 Ciba-Geigy AG, Convertible Bonds,
2.00% due 8/09/1998 1,178,587 1,332,958 0.0
Newspaper/Publishing 3,020,000 News International, PLC, 5.375%
due 4/30/1996 1,115,703 2,386,425 0.0
Total Fixed-Income Securities
in Switzerland 4,701,687 8,089,447 0.1
United Government Pound 37,500,000 United Kingdom Treasury Gilt,
Kingdom Obligations Sterling 8.00% due 6/10/2003 56,327,454 58,184,857 0.7
Building 3,250,000 Redland Capital PLC, Convertible
Materials Bonds, 7.25% due 1/28/2002 5,382,804 5,199,194 0.1
1,000,000 RMC Capital Ltd., Convertible Bonds,
8.75% due 5/31/2006 1,755,430 2,105,796 0.0
-------------- -------------- ------
7,138,234 7,304,990 0.2
<PAGE>
Financial 3,550,000 SG Warburg Group, Convertible Bonds,
Services 6.50% due 8/04/2008 5,416,350 5,186,543 0.1
3,500,000 TransAtlantic Holdings, PLC,
Convertible Bonds, 5.50%
due 4/30/2009 4,521,101 4,656,421 0.0
-------------- -------------- ------
9,937,451 9,842,964 0.1
Food 7,750,000 Tate & Lyle International,
Convertible Bonds, 5.75% due
3/21/2001 10,092,554 10,563,668 0.1
Industrial 5,250,000 Hanson PLC, Convertible Bonds,
9.50% due 1/31/2006 9,953,589 8,827,203 0.1
Oil & Related 29,990,000 Elf Enterprises Finance PLC,
Convertible Bonds, 8.75%
due 6/27/2006 48,109,352 46,875,060 0.6
Real Estate 500,000 Land Securities PLC, Convertible
Investment Trust Bonds, 6.75% due 12/31/2002 679,603 783,552 0.0
Retail 8,350,000 Sainsbury (J.) PLC, Convertible
Bonds, 8.50% due 11/19/2005 16,072,715 17,106,328 0.2
Multi-Industry 4,875,000 English China Clays PLC, Convertible
Bonds, 6.50% due 9/30/2003 8,364,034 7,639,632 0.1
Total Fixed-Income Securities
in the United Kingdom 166,674,986 167,128,254 2.1
United Aerospace Rohr Industries, Inc.:
States US$ 7,500,000 11.625% due 5/15/2003 7,500,000 7,612,500 0.1
5,500,000 Convertible Bonds, 7.75%
due 5/15/2004 5,500,000 6,105,000 0.1
10,075,000 Sequa Corp., 9.625% due 10/15/1999 9,874,312 9,697,187 0.1
-------------- -------------- ------
22,874,312 23,414,687 0.3
Airlines Delta Airlines, Inc.:
8,000,000 Series A2, 9.20% due 9/23/2014 7,370,000 6,920,000 0.1
8,000,000 10.06% due 1/02/2016 8,005,000 7,400,000 0.1
USAir Inc.:
11,000,000 10.00% due 7/01/2003 8,529,375 6,297,500 0.1
4,525,207 9.33% due 1/01/2006 4,412,529 3,755,921 0.0
18,300,000 10.375% due 3/01/2013 16,754,875 15,234,750 0.2
7,500,000 USAir Pass Thru, 9.625% due
9/01/2003 (d) 7,495,625 6,243,750 0.1
-------------- -------------- ------
52,567,404 45,851,921 0.6
<PAGE>
Banking 27,000,000 Crossland Federal Savings Bank,
9.00% due 9/01/2003 27,678,000 25,447,500 0.3
21,400,000 First Federal Financial Corporation,
11.75% due 10/01/2004 21,401,250 21,400,000 0.3
3,000,000 Roosevelt Financial Group, Inc.,
9.50% due 8/01/2002 3,000,000 3,052,500 0.0
-------------- -------------- ------
52,079,250 49,900,000 0.6
Broadcasting/ 15,550,000 +++Continental Cablevision, Inc.,
Cable 9.50% due 8/01/2013 14,092,188 13,956,125 0.2
55,061,000 Marcus Cable Co. L.P.,
13.50% due 8/01/2004 (b) 29,113,843 29,319,982 0.4
-------------- -------------- ------
43,206,031 43,276,107 0.6
Building 20,300,000 DalTile International, Inc.,
Materials 11.955% due 7/15/1998 (b) 12,758,069 12,636,750 0.2
Computers 25,000,000 Dell Computer Corp., 11.00%
due 8/15/2000 25,077,500 26,125,000 0.3
Financial 5,000,000 Card Establishment Services, Inc.,
Services 10.00% due 10/01/2003 4,812,500 4,712,500 0.1
Lomas Mortgage USA, Inc.:
11,000,000 9.75% due 10/01/1997 10,465,250 10,120,000 0.1
7,500,000 10.25% due 10/01/2002 7,000,000 6,525,000 0.1
3,851,000 US Trails Senior Secured Notes,
12.00% due 7/15/1998 3,150,185 2,714,955 0.0
-------------- -------------- ------
25,427,935 24,072,455 0.3
<PAGE>
Governments 130,000,000 Banco Nacional (BNCE),
& Agencies--US$ 7.25% due 2/02/2004 112,951,825 105,625,000 1.3
Denominated 25,000,000 Brazil Exit Bonds, 6.00% due
9/15/2013 14,465,811 12,625,000 0.2
Republic of Argentina:
120,000,000 Discount Notes, 5.812%
due 3/31/2023 91,349,500 82,200,000 1.1
12,500,000 Global Bonds, 8.375%
due 12/20/2003 11,456,250 10,000,000 0.1
241,000,000 Par Bonds, 4.25% due 3/31/2023 128,770,375 112,667,500 1.4
38,220,000 Republic of Brazil,
4.312% due 1/01/2001 (d) 29,874,075 31,292,625 0.4
United Mexican States:
10,000,000 8.50% due 9/15/2002 9,420,000 9,109,300 0.1
65,000,000 Discount Notes, Series A, 6.687%
due 12/31/2019 58,148,000 55,412,500 0.7
35,000,000 Discount Notes, Series B,
4.312% due 12/31/2019 30,062,500 29,793,750 0.4
United Mexican States, Rights:
99,996,000 (Series A) 0 0 0.0
53,845,000 (Series B) 0 0 0.0
60,000,000 US Treasury Notes, 7.50%
due 11/15/2001 61,700,781 59,503,140 0.8
-------------- -------------- ------
548,199,117 508,228,815 6.5
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Value Percent of
COUNTRY Industries Face Amount Fixed-Income Securities Cost (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C>
United Health Care US$ 7,200,000 Cetus (Chiron) Corp., Convertible
States Bonds, 5.25% due 5/21/2002 $ 5,220,250 $ 5,976,000 0.1%
(continued) 8,500,000 Mediq/PRN Senior Notes,
11.125% due 7/01/1999 8,845,000 7,713,750 0.1
24,000,000 Paracelsus Healthcare Corp.,
9.875% due 10/15/2003 23,971,875 22,680,000 0.3
5,000,000 Regency Health Services, Inc.,
Convertible Bonds, 6.50%
due 7/15/2003 4,887,500 5,300,000 0.1
8,500 +++Total Renal Care Inc., 12.00%
due 8/15/2004 (with Warrants) (b) 6,060,840 6,247,500 0.1
-------------- -------------- ------
48,985,465 47,917,250 0.7
<PAGE>
Homebuilding & 27,950,000 Baldwin Co., 10.375% due 8/01/2003 27,692,438 19,285,500 0.3
Construction 40,000,000 Beazer Homes USA, Inc.,
9.00% due 3/01/2004 38,250,750 33,600,000 0.4
29,500,000 K. Hovnanian Enterprises,
9.75% due 6/01/2005 28,874,300 22,125,000 0.3
10,000,000 Kaufman & Broad Home Corporation,
9.375% due 5/01/2003 9,137,500 9,000,000 0.1
MDC Holdings Inc.:
1,100,000 6.642% due 4/01/1998 914,375 918,500 0.0
27,000,000 11.125% due 12/15/2003 26,424,000 23,152,500 0.3
28,250,000 Presley Companies, Senior Notes,
12.50% due 7/01/2001 28,190,312 26,696,250 0.3
Webb (Del E.) Corp.:
12,000,000 9.75% due 3/01/2003 11,940,000 10,500,000 0.1
17,850,000 9.00% due 2/15/2006 15,222,475 14,369,250 0.2
-------------- -------------- ------
186,646,150 159,647,000 2.0
Hospital 3,087,500 American Medical International,
Management Inc., 6.50% due 5/30/1997 2,578,063 3,002,594 0.0
1,000,000 Novacare, Inc., Convertible Bonds,
5.50% due 1/15/2000 857,500 810,000 0.0
-------------- -------------- ------
3,435,563 3,812,594 0.0
Industrial 47,000,000 Allison Engine, Inc.,
10.00% due 12/01/2003 47,150,625 45,237,500 0.6
7,370,000 Boise Cascade Corp., 9.45%
due 11/01/2009 8,024,088 7,167,325 0.1
4,000,000 Congoleum Corp., 9.00% due 2/01/2001 4,000,000 3,710,000 0.0
20,000,000 Crown Packaging Ltd.,
10.75% due 11/01/2000 20,000,000 20,100,000 0.3
19,000,000 Easco Corp., 10.00% due 3/15/2001 19,005,000 18,050,000 0.2
19,000,000 Envirotest Systems Corp.,
9.125% due 3/15/2001 18,412,210 17,290,000 0.2
27,250,000 Genmar Holdings, Inc., 13.50%
due 7/15/2001 27,127,100 26,568,750 0.3
3,500,000 Hartmarx Corp., 10.875% due 1/15/2002 3,476,270 3,202,500 0.0
10,000,000 +++Merisel, Inc., 12.50% due 12/31/2004 10,000,000 9,987,500 0.1
14,000,000 OSI Specialities Corp.,
9.25% due 10/01/2003 14,000,000 12,810,000 0.2
Owens-Illinois, Inc.:
3,000,000 10.50% due 6/15/2002 3,051,000 3,022,500 0.0
10,000,000 9.75% due 8/15/2004 9,740,750 9,625,000 0.1
30,500,000 Plastic Specialties & Technology,
Inc., 11.25% due 12/01/2003 30,540,000 27,297,500 0.4
-------------- -------------- ------
214,527,043 204,068,575 2.5
<PAGE>
Insurance 7,750,000 Horace Mann Educators, Inc.,
Convertible Bonds, 4.00%
due 12/01/1999 7,682,500 7,459,375 0.1
27,500,000 +++Mutual Life Insurance Co.,
11.25% due 8/15/2024 15,970,692 15,812,500 0.2
12,500,000 Nacolah Holding Corp., 9.50%
due 12/01/2003 12,500,000 10,937,500 0.1
-------------- -------------- ------
36,153,192 34,209,375 0.4
Oil & Related +++Columbia Gas System, Inc.:
2,000,000 9.00% due 8/01/1994 2,326,250 2,400,000 0.0
6,500,000 7.50% due 6/01/1997 6,808,750 7,280,000 0.1
4,700,000 10.25% due 8/01/2011 5,340,375 6,039,500 0.1
10,000,000 10.50% due 6/01/2012 11,225,000 12,750,000 0.2
5,000,000 10.15% due 11/01/2013 5,562,500 6,175,000 0.1
4,000,000 9.50% due 10/10/2019 4,310,000 4,940,000 0.1
9,500,000 Gerrity Oil & Gas Corp.,
11.75% due 7/15/2004 9,500,000 8,858,750 0.1
8,000,000 Noble Drilling Corp.,
9.25% due 10/01/2003 8,000,000 7,620,000 0.1
PDV America, Inc.:
35,000,000 7.25% due 8/01/1998 34,856,150 31,762,500 0.4
10,000,000 7.75% due 8/01/2000 10,062,500 8,775,000 0.1
26,362,500 +++++++Presidio Oil Co., 11.50%
due 9/15/2000 26,963,000 24,912,562 0.3
10,000,000 Santa Fe Energy Resources, Inc.,
11.00% due 5/15/2004 9,926,600 10,150,000 0.1
36,301,000 Transtexas Gas Corp.,10.50%
due 9/01/2000 36,300,233 35,030,465 0.4
6,000,000 USX-Marathon Oil Co., 7.00%
due 6/15/2017 5,650,000 5,460,000 0.1
-------------- -------------- ------
176,831,358 172,153,777 2.2
Paper & 9,000,000 Stone Consolidated Corp.,
Forest Products 10.25% due 12/15/2000 9,000,000 8,853,750 0.1
5,000,000 Stone Container Corp.,9.875%
due 2/01/2001 4,727,500 4,687,500 0.1
-------------- -------------- ------
13,727,500 13,541,250 0.2
<PAGE>
Real Estate & 22,500,000 +++++++Alexander Haagen Properties Inc.,
Real Estate Exchangeable Debentures,
Investment 7.25% due 12/27/2003 22,500,000 20,587,500 0.3
Trusts 7,000,000 Centerpoint Properties Corp., Conv.
Bonds, 8.22% due 1/15/2004 7,000,000 7,070,000 0.1
30,000,000 First Union Real Estate,
8.875% due 10/01/2003 29,756,100 24,900,000 0.3
25,000,000 +++++++First Washington Realty,
8.25% due 6/26/1999 25,000,000 23,375,000 0.3
6,500,000 LTC Properties, Inc., Conv. Bonds,
9.75% due 7/01/2004 6,500,000 8,222,500 0.1
12,500,000 Liberty Property Trust, Conv. Bonds,
8.00% due 7/01/2001 12,500,000 11,625,000 0.2
27,000,000 +++++++Malan Realty Investors, Inc., Conv.
Bonds, 8.50% due 7/01/2003 27,000,000 24,975,000 0.3
Meditrust, Conv. Bonds:
6,000,000 7.00% due 3/01/1998 6,035,000 5,880,000 0.1
28,500,000 7.50% due 3/01/2001 28,500,000 26,790,000 0.3
5,000,000 Mid-Atlantic Realty Trust, Conv.
Bonds, 7.625% due 9/15/2003 4,875,000 4,500,000 0.0
5,000,000 National Health Investors, Inc.,
Conv. Bonds, 7.375% due 4/01/1998 5,125,000 5,000,000 0.0
22,000,000 Nationwide Health Properties Inc.,
Conv. Bonds, 6.25% due 1/01/1999 21,950,000 20,680,000 0.3
9,545,000 Phoenix Home Life-Mutual Insurance
Co., 8.00% due 11/25/2023 9,545,000 8,256,425 0.1
24,244,340 RTC Commercial Mortgage, Class E,
8.25% due 12/25/2020 (d) 23,873,099 20,850,133 0.3
5,500,000 Sizeler Property Investors, Inc.,
Conv. Bonds, 8.00% due 7/15/2003 5,505,000 5,060,000 0.1
23,336,370 Vista Properties, Inc., 13.75%
due 10/31/2001 (c) 11,748,460 7,934,366 0.1
-------------- -------------- ------
247,412,659 225,705,924 2.9
Resources 37,500,000 Freeport-McMoRan Resources,
8.75% due 2/15/2004 36,378,750 34,125,000 0.4
Retail 11,000,000 Best Buy Company Inc.,
8.625% due 10/01/2000 11,015,000 10,477,500 0.2
12,000,000 Price Club Co., Convertible Bonds,
5.50% due 2/28/2012 11,213,250 10,290,000 0.1
17,500,000 The Vons Companies, Inc., 9.625%
due 4/01/2002 18,448,750 17,368,750 0.2
10,500,000 Waban, Inc., 11.00% due 5/15/2004 10,487,500 10,171,875 0.1
-------------- -------------- ------
51,164,500 48,308,125 0.6
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Value Percent of
COUNTRY Industries Face Amount Fixed-Income Securities Cost (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C>
United Supermarkets US$ 39,650,000 Eagle Food Centers Inc., 8.625%
States due 4/15/2000 $ 36,095,837 $ 22,402,250 0.3%
(concluded) 40,000,000 Penn Traffic Co., 8.625%
due 12/15/2003 39,876,400 35,000,000 0.5
17,500,000 Pueblo Xtra International Inc.,
9.50% due 8/01/2003 16,855,125 14,875,000 0.2
11,000,000 Ralphs Grocery Company, 10.25%
due 7/15/2002 11,235,000 10,670,000 0.1
-------------- -------------- ------
104,062,362 82,947,250 1.1
Tele- 26,000,000 Allnet Communication Services,
communications 9.00% due 5/15/2003 25,763,225 25,220,000 0.3
28,500,000 Diamond Cable Communications, 13.251%
due 9/30/2004 (b) 15,082,612 14,891,250 0.2
20,000,000 MFS Communications Corp., Inc.,
9.374% due 1/15/2004 (b) 12,010,457 11,775,000 0.2
Nextel Communications Inc. (b):
3,000,000 11.45% due 9/01/2003 1,931,500 1,507,500 0.0
33,500,000 9.75% due 8/15/2004 20,177,505 14,823,750 0.2
10,875,000 Paging Network, Inc., 8.875%
due 2/01/2006 9,787,812 9,189,375 0.1
-------------- -------------- ------
84,753,111 77,406,875 1.0
Textiles 12,500,000 Consoltex Group, Inc., 11.00%
due 10/01/2003 12,530,000 11,500,000 0.1
23,500,000 Salant Corp., Secured, 10.50%
due 12/31/1998 23,030,000 22,442,500 0.3
18,250,000 Texfi Industries, Inc., 8.75%
due 8/01/1999 17,930,300 14,052,500 0.2
-------------- -------------- ------
53,490,300 47,995,000 0.6
Transportation 22,000,000 OMI Corp., 10.25% due 11/01/2003 21,910,000 19,360,000 0.3
<PAGE>
Utilities-- CTC Mansfield Funding Corp.:
Electric 17,000,000 10.25% due 3/30/2003 17,580,000 15,980,000 0.2
12,000,000 11.125% due 9/30/2016 12,820,000 11,160,000 0.1
40,000,000 California Energy Co., Inc., 10.246%
due 1/15/2004 (b) 30,674,126 28,000,000 0.4
8,000,000 Calpine Corp., Inc., 9.25%
due 2/01/2004 7,277,500 6,980,000 0.1
Cleveland Electric Illuminating
Company Inc., First Mortgage:
5,000,000 9.30% due 7/26/1999 5,437,500 4,800,000 0.1
12,500,000 9.25% due 7/29/1999 13,562,500 11,968,750 0.2
3,000,000 9.05% due 8/15/2001 3,093,750 2,790,000 0.0
7,500,000 7.625% due 8/01/2002 7,462,500 6,300,000 0.1
5,000,000 7.375% due 6/01/2003 4,700,000 4,075,000 0.0
+++EUA Power Corp.:
1,000,000 Series B, 17.50% due 5/15/1993 475,000 60,000 0.0
3,157,600 Series C, 17.50% due 5/15/1993 1,915,790 189,456 0.0
+++El Paso Funding:
4,050,000 9.20% due 7/02/1997 3,286,000 2,065,500 0.0
25,000,000 10.375% due 1/02/2011 21,170,000 12,750,000 0.2
62,040,000 10.75% due 4/01/2013 52,996,150 31,640,400 0.4
6,000,000 Long Island Lighting Co., 7.90%
due 7/15/2008 5,412,060 5,130,000 0.1
Public Service Company of New Mexico:
19,800,000 10.30% due 1/15/2014 19,466,500 18,315,000 0.2
18,000,000 10.15% due 1/15/2016 17,128,125 16,470,000 0.2
23,000,000 PS of New Mexico, First PV Funding,
10.25% due 10/01/2012 23,000,000 21,217,500 0.3
Toledo Edison Co.:
2,000,000 9.30% due 4/01/1998 2,130,000 1,945,000 0.0
15,425,000 7.25% due 8/01/1999 15,425,000 13,612,562 0.2
3,000,000 9.50% due 4/01/2001 3,221,250 2,835,000 0.0
2,000,000 7.91% due 4/01/2003 1,992,500 1,680,000 0.0
-------------- -------------- ------
270,226,251 219,964,168 2.8
Total Fixed-Income Securities
in the United States 2,331,893,822 2,124,667,898 27.1
Foreign Banking 21,000,000 Banco de Galicia, 9.00%
Issuers-- due 11/01/2003 20,913,960 16,983,750 0.2
US$ De- Banco Rio de la Plata:
nominated 52,000,000 (Class 3), 8.50% due 7/15/1998 52,444,125 48,262,500 0.6
40,000,000 8.75% due 12/15/2003 35,628,125 31,750,000 0.4
-------------- -------------- ------
108,986,210 96,996,250 1.2
Building & 41,100,000 Tarkett International, 9.00%
Materials due 3/01/2002 39,413,750 37,606,500 0.5
Hotel/Leisure 23,500,000 +++++++Four Seasons Hotel, Inc., 9.125%
due 7/01/2000 23,401,875 21,855,000 0.3
Industrial 8,250,000 Burns, Philp & Company Ltd., Conv.
Bonds, 5.50% due 4/30/2004 7,249,450 6,930,000 0.1
24,945,000 +++++++Ciba-Geigy Corp., Convertible Bonds,
6.25% due 3/15/2016 25,632,050 23,011,762 0.3
7,945,000 Ciba-Geigy Corp., 5.50%
due 10/28/1998 (Warrants) (a) 9,418,275 8,540,875 0.1
1,330,000 CRH Capital Corp., Convertible Bonds,
5.75% due 4/30/2005 1,602,550 1,569,400 0.0
2,470,000 HIH Capital Ltd., Convertible Bonds
(Bearer), 7.50% due 9/25/2006 2,059,800 1,624,025 0.0
5,750,000 Hanson America Convertible Bonds,
2.39% due 3/01/2001 4,388,842 4,197,500 0.1
77,000,000 International Semi-Tech
Microelectronics Inc., 11.466% due
<PAGE> 8/15/2003 (b) 38,729,137 34,650,000 0.5
4,580,000 Johnson Electric Holdings Ltd.,
Convertible Bonds, 4.50%
due 11/05/2000 4,298,779 4,557,100 0.1
20,360,000 Lend Lease Finance Corp., Ltd.,
Convertible Bonds, 4.75% due 6/01/2003 22,511,980 21,632,500 0.3
9,000,000 Methanex Corp., 8.875% due 11/15/2001 8,956,250 8,685,000 0.1
2,000,000 P.T. Indorayon, Convertible Bonds,
5.50% due 10/01/2002 2,363,125 2,450,000 0.0
1,000,000 Siemens Corp. (with Warrants),
8.00% due 6/24/2002 (a) 1,318,750 1,267,500 0.0
2,220,000 Tung Ho Steel Enterprise, Convertible
Bonds, 4.00% due 7/26/2001 2,243,700 2,464,200 0.0
14,000,000 Wilrig AS, 11.25% due 3/15/2004 14,000,000 12,320,000 0.2
-------------- -------------- ------
144,772,688 133,899,862 1.8
Multi-Industry 5,875,000 Veba International Finance (Warrants),
6.00% due 4/06/2000 (a) 7,083,300 9,032,812 0.1
Oil & Related 6,500,000 +++++++Petrolera Argentina San Jorge S.A.,
11.00% due 2/09/1998 6,278,750 6,607,500 0.1
2,750,000 Ssangyong Oil Corp., 3.75%
due 12/31/2008 2,929,812 3,588,750 0.0
-------------- -------------- ------
9,208,562 10,196,250 0.1
Resources 26,000,000 Sherritt Ltd., 9.75% due 4/01/2003 26,124,375 25,090,000 0.3
34,000,000 Sifto Canada, Inc., 8.50% due
7/15/2000 33,875,187 31,110,000 0.4
-------------- -------------- ------
59,999,562 56,200,000 0.7
Textile 10,000,000 Dominion Textile (USA) Inc.,
Senior Notes, 8.875% due 11/01/2003 9,950,800 9,275,000 0.1
Transportation 8,500,000 Eletson Holdings Inc., 9.25%
due 11/15/2003 8,537,500 7,713,750 0.1
Total Foreign Issuers--
US$ Denominated 411,354,247 382,775,424 4.9
Total Investments in
Fixed-Income Securities 4,597,497,616 4,393,926,871 56.1
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<CAPTION>
Value Percent of
COUNTRY Face Amount Short-Term Securities Cost (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C>
United Commercial US$ 91,738,000 General Electric Capital Corp.,
States Paper* 4.72% due 11/01/1994 $ 91,738,000 $ 91,738,000 1.2%
Total Investments in Commercial Paper 91,738,000 91,738,000 1.2
US Government & 50,000,000 Federal National Mortgage Association,
Agency Obligations 4.88% due 11/17/1994 49,891,556 49,891,556 0.6
Total Investments in US Government &
Agency Obligations 49,891,556 49,891,556 0.6
Total Investments in
Short-Term Securities 141,629,556 141,629,556 1.8
Total Investments $7,701,777,115 7,770,824,773 99.3
==============
Unrealized Depreciation on Forward Foreign Exchange Contracts** (35,886,925) (0.4)
Other Assets Less Liabilities 92,413,194 1.1
-------------- ------
Net Assets $7,827,351,042 100.0%
============== ======
<FN>
*Commercial Paper and US Government & Agency Obligations are traded
on a discount basis; the interest rates shown are the discount rates paid at
the time of purchase by the Fund.
**Forward foreign exchange contracts as of October 31, 1994 were as follows:
Unrealized
Foreign Expiration Appreciation
Currency Sold Date (Depreciation)
<PAGE>
Chf 15,000,000 November 1994 $ (221,787)
Chf 40,000,000 December 1994 (844,087)
DM 466,000,000 November 1994 (8,689,835)
DM 727,000,000 December 1994 (9,410,926)
DM 90,000,000 January 1995 219,481
Dkr 7,000,000 November 1994 (31,297)
ECU 25,000,000 November 1994 (847,150)
ECU 25,000,000 December 1994 (710,075)
ECU 100,000,000 January 1995 317,840
Pta 5,500,000,000 November 1994 (1,000,119)
Pta 10,000,000,000 December 1994 (1,811,334)
Pta 9,500,000,000 January 1995 18,580
Frf 174,000,000 November 1994 (823,345)
Frf 420,000,000 December 1994 (2,178,092)
Frf 180,000,000 January 1995 (10,731)
Frf 140,000,000 February 1995 133,533
Pound Sterling 25,000,000 November 1994 (1,133,275)
Pound Sterling 20,000,000 December 1994 (1,008,640)
Pound Sterling 51,000,000 January 1995 (563,977)
YEN 32,000,000,000 December 1994 (5,480,366)
Nlg 63,000,000 November 1994 (1,097,777)
Nlg 55,000,000 December 1994 (963,816)
Nlg 68,000,000 January 1995 250,270
Total (US$ Commitment--$2,061,915,619) $(35,886,925)
------------
Total Unrealized Depreciation--Net On
Forward Foreign Exchange Contracts $(35,886,925)
============
(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.
++American Depositary Receipt (ADR).
++++Investment in Companies 5% or more of whose outstanding securities are
held by the Fund (such companies are defined as "Affiliated Companies" in
section 2(a)(3) of the Investment Company Act of 1940) are as follows:
<PAGE>
<CAPTION>
Net Share Net Dividend
Industry Affiliate Activity Cost Income
<S> <S> <C> <C> <C>
Retail Stores Buttrey Food & Drug -- -- --
Stores Co.
Retail Stores Filene's Basement Corp. 200,000 $1,890,625 --
+++Non-income producing security.
+++++++Restricted securities as to resale. The value of the Fund's investment in restricted
securities was approximately $158,763,000, representing 2.0% of net assets.
<CAPTION>
Acquisition Value
Issue Date Cost (Note 1a)
<S> <C> <C> <C>
Alexander Haagan Properties
Inc., Exchangeable Debentures,
7.25% due 12/27/2003 12/27/1993 $ 22,500,000 $ 20,587,500
AMR Corp. (Convertible $3.00) 6/21/1993 5,065,500 4,150,000
Ciba-Geigy Corp., Convertible
Bonds, 6.25% due 3/15/2016 3/23/1993 25,632,050 23,011,762
First Washington Realty,
8.25% due 6/26/1999 6/27/1994 25,000,000 23,375,000
Four Seasons Hotel, Inc.,
9.125% due 7/01/2000 6/23/1993 23,401,875 21,855,000
Malan Realty Investors, Inc.,
Convertible Bonds,
8.50% due7/01/2003 6/24/1994 27,000,000 24,975,000
Petrolera Argentina San Jorge S.A.,
11% due 2/09/1998 1/29/1993 6,278,750 6,607,500
President Enterprises, 8.30%
due 7/22/2001 7/06/1994 1,990,454 2,085,000
Presidio Oil Co., 11.50% due 9/15/2000 8/03/1993 26,963,000 24,912,562
UAL Corp., (6.25% Convertible) 2/23/1993 7,885,625 7,203,750
------------ ------------
$171,717,254 $158,763,074
============ ============
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF ASSETS AND LIABILITIES
<CAPTION>
As of October 31, 1994
<S> <C> <C>
Assets: Investments, at value (identified cost--$7,701,777,115) (Note 1a) $7,770,824,773
Cash 2,123,122
Foreign cash (Note 1c) 228,878
Receivables:
Interest $ 118,023,952
Securities sold 63,997,769
Capital shares sold 33,964,220
Dividends 8,047,941 224,033,882
--------------
Prepaid registration fees and other assets (Note 1h) 173,328
--------------
Total assets 7,997,383,983
--------------
Liabilities: Unrealized depreciation on forward foreign exchange contracts (Note 1c) 35,886,925
Payables:
Securities purchased 100,798,857
Capital shares redeemed 18,658,959
Distributor (Note 2) 5,475,841
Investment adviser (Note 2) 4,628,672 129,562,329
--------------
Accrued expenses and other liabilities 4,583,687
--------------
Total Liabilities 170,032,941
--------------
Net Assets: Net assets $7,827,351,042
==============
Net Assets Class A Shares of Common Stock, $0.10 par value, 200,000,000 shares authorized $ 10,386,062
Consist of: Class B Shares of Common Stock, $0.10 par value, 900,000,000 shares authorized 50,026,128
Class C Shares of Common Stock, $0.10 par value, 200,000,000 shares authorized 56,902
Class D Shares of Common Stock, $0.10 par value, 900,000,000 shares authorized 37,990
Paid-in capital in excess of par 7,612,200,596
Undistributed investment income--net 93,144,339
Undistributed realized capital gains and foreign currency transactions--net 25,491,311
Unrealized appreciation on investments and foreign currency transactions--net 36,007,714
--------------
Net assets $7,827,351,042
==============
<PAGE>
Net Asset Class A--Based on net assets of $1,357,905,506 and 103,860,623 shares outstanding $ 13.07
Value: ==============
Class B--Based on net assets of $6,457,130,497 and 500,261,282 shares outstanding $ 12.91
==============
Class C--Based on net assets of $7,347,309 and 569,017 shares outstanding $ 12.91
==============
Class D--Based on net assets of $4,967,730 and 379,903 shares outstanding $ 13.08
==============
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENT OF OPERATIONS
<CAPTION>
For the Year Ended October 31, 1994
<S> <S> <C> <C>
Investment Interest and discount earned $ 308,032,977
Income Dividends (net of $3,302,212 foreign withholding tax) 73,919,529
(Notes 1f Other 218,581
& 1g): --------------
Total income 382,171,087
--------------
Expenses: Distribution fees--Class B (Note 2) 57,576,826
Investment advisory fees (Note 2) 49,037,363
Transfer agent fees--Class B (Note 2) 5,917,129
Custodian fees 2,579,126
Registration fees (Note 1h) 1,957,917
Transfer agent fees--Class A (Note 2) 1,038,346
Amortization of organization expenses (Note 1h) 984,686
Printing and shareholder reports 642,909
Accounting services (Note 2) 570,246
Professional fees 121,645
Directors' fees and expenses 35,499
Pricing fees 16,590
Distribution fees--Class C (Note 2) 1,216
Transfer agent fees--Class C (Note 2) 419
Transfer agent fees--Class D (Note 2) 298
Account maintenance fees--Class D (Note 2) 216
Other 35,336
--------------
Total expenses 120,515,767
--------------
Investment income--net 261,655,320
--------------
<PAGE>
Realized & Realized gain (loss) from:
Unrealized Investments--net $ 186,774,367
Gain (Loss) Foreign currency transactions--net (159,324,097) 27,450,270
on Invest- --------------
ments & Change in unrealized appreciation/depreciation on:
Foreign Investments--net (198,866,445)
Currency Foreign currency transactions--net (46,111,336) (244,977,781)
Transactions -------------- --------------
- --Net (Notes Net realized and unrealized loss on investments and foreign currency transactions (217,527,511)
1c, 1g & 3): --------------
Net Increase in Net Assets Resulting from Operations $ 44,127,809
==============
</TABLE>
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
For the Year Ended October 31,
Increase (Decrease) in Net Assets: 1994 1993
<S> <S> <C> <C>
Operations: Investment income--net $ 261,655,320 $ 78,569,836
Realized gain on investments and foreign currency transactions--net 27,450,270 96,098,223
Change in unrealized appreciation/depreciation on investments and foreign
currency transactions--net (244,977,781) 303,533,099
-------------- --------------
Net increase in net assets resulting from operations 44,127,809 478,201,158
-------------- --------------
Dividends & Investment income--net:
Distributions Class A (42,294,885) (21,579,231)
to Class B (157,338,890) (78,516,167)
Shareholders Realized gain on investments--net:
(Note 1i): Class A (16,636,230) (2,640,570)
Class B (80,810,426) (10,640,849)
-------------- --------------
Net decrease in net assets resulting from dividends and
distributions to shareholders (297,080,431) (113,376,817)
-------------- --------------
Capital Share Net increase in net assets derived from capital share transactions 2,862,952,855 3,647,738,774
Transactions -------------- --------------
(Note 4):
Net Assets: Total increase in net assets 2,610,000,233 4,012,563,115
Beginning of year 5,217,350,809 1,204,787,694
-------------- --------------
End of year* $7,827,351,042 $5,217,350,809
============== ==============
<FN>
*Undistributed investment income--net $ 93,144,339 $ 31,215,711
============== ==============
</TABLE>
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
<CAPTION>
The following per share data and ratios have been derived
from information provided in the financial statements. Class A
For the Year Ended October 31,
Increase (Decrease) in Net Asset Value: 1994 1993 1992 1991 1990
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of year $ 13.52 $ 11.92 $ 12.16 $ 10.37 $ 10.79
Operating ---------- --------- --------- --------- ---------
Performance: Investment income--net .60 .39 .36 .55 .60
Realized and unrealized gain (loss) on investments
and foreign currency transactions--net (.31) 2.14 .89 2.24 (.16)
---------- --------- --------- --------- ---------
Total from investment operations .29 2.53 1.25 2.79 .44
---------- --------- --------- --------- ---------
Less dividends and distributions:
Investment income--net (.51) (.81) (.89) (.45) (.66)
Realized gain on investments--net (.23) (.12) (.60) (.55) (.20)
---------- --------- --------- --------- ---------
Total dividends and distributions (.74) (.93) (1.49) (1.00) (.86)
---------- --------- --------- --------- ---------
Net asset value, end of year $ 13.07 $ 13.52 $ 11.92 $ 12.16 $ 10.37
========== ========= ========= ========= =========
Total Based on net asset value per share 2.14% 22.61% 11.78% 28.89% 3.91%
Investment ========== ========= ========= ========= =========
Return:*
Ratios to Average Expenses .89% .93% 1.07% 1.29% 1.29%
Net Assets: ========== ========= ========= ========= =========
Investment income--net 4.60% 3.90% 10.82% 8.96% 4.37%
========== ========= ========= ========= =========
Supplemental Net assets, end of year (in thousands) $1,357,906 $ 917,806 $ 245,839 $ 72,702 $ 49,691
Data: ========== ========= ========= ========= =========
Portfolio turnover 57.04% 50.35% 59.56% 81.21% 129.51%
========== ========= ========= ========= =========
<FN>
*Total investment returns exclude the effects of sales loads.
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS (concluded)
<CAPTION>
The following per share data and ratios have been derived
from information provided in the financial statements. Class B
For the Year Ended October 31,
Increase (Decrease) in Net Asset Value: 1994 1993 1992 1991 1990
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of year $ 13.38 $ 11.83 $ 12.10 $ 10.33 $ 10.73
Operating ---------- ---------- --------- --------- ---------
Performance: Investment income--net .46 .28 .22 .44 .49
Realized and unrealized gain (loss) on
investments and foreign currency transactions--net (.31) 2.11 .91 2.22 (.16)
---------- ---------- --------- --------- ---------
Total from investment operations .15 2.39 1.13 2.66 .33
---------- ---------- --------- --------- ---------
Less dividends and distributions:
Investment income--net (.39) (.72) (.80) (.34) (.53)
Realized gain on investments--net (.23) (.12) (.60) (.55) (.20)
---------- ---------- --------- --------- ---------
Total dividends and distributions (.62) (.84) (1.40) (.89) (.73)
---------- ---------- --------- --------- ---------
Net asset value, end of year $ 12.91 $ 13.38 $ 11.83 $ 12.10 $ 10.33
========== ========== ========= ========= =========
Total Investment Based on net asset value per share 1.13% 21.42% 10.64% 27.48% 2.93%
Return:** ========== ========== ========= ========= =========
Ratios to Average Expenses, excluding distribution fees .91% .95% 1.09% 1.31% 1.31%
Net Assets: ========== ========== ========= ========= =========
Expenses 1.91% 1.95% 2.09% 2.31% 2.31%
========== ========== ========= ========= =========
Investment income--net 3.58% 2.87% 11.95% 7.98% 3.35%
========== ========== ========= ========= =========
Supplemental Net assets, end of year (in thousands) $6,457,130 $4,299,545 $ 958,949 $ 161,328 $ 115,682
Data: ========== ========== ========= ========= =========
Portfolio turnover 57.04% 50.35% 59.56% 81.21% 129.51%
========== ========== ========= ========= =========
<PAGE>
<CAPTION>
The following per share data and ratios have been derived For the Period
from information provided in the financial statements. October 21, 1994++ to
October 31, 1994
Increase (Decrease) in Net Asset Value: Class C Class D
<S> <S> <C> <C>
Per Share Net asset value, beginning of period $ 12.91 $ 13.07
Operating -------- ---------
Performance: Investment income--net .01 .01
Realized and unrealized gain (loss) on investments and
foreign currency transactions--net (.01) --
-------- ---------
Total from investment operations -- .01
-------- ---------
Net asset value, end of period $ 12.91 $ 13.08
======== =========
Total Investment Based on net asset value per share .00%+++ .08%+++
Return:** ======== =========
Ratios to Average Expenses, excluding distribution fees 1.44%* 1.44%*
Net Assets: ======== =========
Expenses 2.44%* 1.69%*
======== =========
Investment income--net 3.71%* 4.46%*
======== =========
Supplemental Net assets, end of period (in thousands) $ 7,347 $ 4,968
Data: ======== =========
Portfolio turnover 57.04% 57.04%
======== =========
<FN>
*Annualized.
**Total investment returns exclude the effects of sales loads.
++Commencement of operations.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
Merrill Lynch Global Allocation Fund, Inc. (the "Fund") is registered
under the Investment Company Act of 1940 as a non-diversified,
open-end management investment company. The Fund offers four
classes of shares under the Merrill Lynch Select Pricing SM System.
Shares of Class A and Class D are sold with a front-end sales charge.
Shares of Class B and Class C may be subject to a contingent deferred
sales charge. All classes of shares have identical voting, dividend,
liquidation and other rights and the same terms and conditions,
except that Class B, Class C and Class D Shares bear certain expenses
related to the account maintenance of such shares, and Class B and
Class C Shares also bear certain expenses related to the distribution
of such shares. Each class has exclusive voting rights with respect
to matters relating to its account maintenance and distribution
expenditures. The following is a summary of significant accounting
policies followed by the Fund.
(a) Valuation of investments--Portfolio securities which are traded on
US stock exchanges are valued at the last sale price on the principal
market on which such securities are traded, as of the close of
business on the day the securities are being valued or, lacking any
sales, at the last available bid price. Securities traded in the over-
the-counter market are valued at the last available bid price or yield
equivalents obtained from one or more dealers in the over-the-
counter market prior to the time of valuation. Portfolio securities
which are traded both in the over-the-counter market and on a
stock exchange are valued according to the broadest and most
representative market. Portfolio securities which are traded on
European stock exchanges are valued at the closing bid price on
such exchanges on the day the securities are being valued or, if
closing prices are unavailable, at the last traded bid price available
prior to the time of valuation. Short-term securities are valued at
amortized cost, which approximates market.
Options written by the Fund are valued at the last sales price in the
case of exchange-traded options or, in the case of options traded in
the over-the-counter market, the last asked price. Options pur-
chased by the Fund are valued at their last sale price in the case of
exchange-traded options or, in the case of options traded in the
over-the-counter market, the last bid price.
Securities and assets for which market quotations are not readily
available are valued at fair value as determined in good faith by or
under the direction of the Board of Directors of the Fund.
<PAGE>
(b) Repurchase agreements--The Fund invests in US Government
securities pursuant to repurchase agreements with a member bank
of the Federal Reserve System or a primary dealer in US Government
securities. Under such agreements, the bank or primary dealer
agrees to repurchase the security at a mutually agreed upon time
and price. The Fund takes possession of the underlying securities,
marks to market such securities and, if necessary, receives additions
to such securities daily to ensure that the contract is fully
collateralized.
(c) Foreign currency transactions--Transactions denominated in
foreign currencies are recorded at the exchange rate prevailing
when recognized. Assets and liabilities denominated in foreign
currencies are valued at the exchange rate at the end of the period.
Foreign currency transactions are the result of settling (realized)
or valuing (unrealized) receivables or payables expressed in foreign
currencies into US dollars. Realized and unrealized gains or losses
from investments include the effects of foreign exchange rates
on investments.
The Fund is authorized to enter into forward foreign exchange
contracts as a hedge against either specific transactions or portfolio
positions. Such contracts are not entered on the Fund's records.
NOTES TO FINANCIAL STATEMENTS (continued)
However, the effect on operations is recorded from the date the Fund
enters into such contracts. Premium or discount is amortized over
the life of the contracts.
The Fund may also purchase or sell listed or over-the-counter foreign
currency options, foreign currency futures and related options on
foreign currency futures as a short or long hedge against possible
variations in foreign exchange rates. Such transactions may be
effected with respect to hedges on non-US dollar denominated
securities owned by the Fund, sold by the Fund but not yet
delivered, or committed or anticipated to be purchased by the Fund.
(d) Options--The Fund can write covered call options and purchase
put options. When the Fund writes an option, an amount equal to
the premium received by the Fund is reflected as an asset and an
equivalent liability. The amount of the liability is subsequently
marked to market to reflect the current value of the option written.
When a security is sold through an exercise of an option, the
related premium received (or paid) is deducted from (or added to)
the basis of the security sold. When an option expires (or the
Fund enters into a closing transaction), the Fund realizes a gain
or loss on the option to the extent of the premiums received or paid
(or gain or loss to the extent the cost of the closing transaction
exceeds the premiums paid or received).
<PAGE>
Written and purchased options are non-income producing
investments.
(e) Financial futures contracts--The Fund may purchase or sell
stock index futures contracts and options on such futures contracts.
Upon entering into a contract, the Fund deposits and maintains as
collateral such initial margin as required by the exchange on which
the transaction is effected. Pursuant to the contract, the Fund
agrees to receive from or pay to the broker an amount of cash equal
to the daily fluctuation in value of the contract. Such receipts or
payments are known as variation margin and are recorded by the
Fund as unrealized gains or losses. When the contract is closed, the
Fund records a realized gain or loss equal to the difference between
the value of the contract at the time it was opened and the value
at the time it was closed.
(f) Income taxes--It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute substantially all of its
taxable income to its shareholders. Therefore, no Federal income
tax provision is required. Under the applicable foreign tax law, a
withholding tax may be imposed on interest, dividends, and capital
gains at various rates.
(g) Security transactions and investment income--Security trans-
actions are recorded on the dates the transactions are entered into
(the trade dates). Dividend income is recorded on the ex-dividend
dates except that if the ex-dividend date has passed, certain divi-
dends from foreign securities are recorded as soon as the Fund is
informed of the ex-dividend date. Interest income (including
amortization of discount) is recognized on the accrual basis.
Realized gains and losses on security transactions are determined
on the identified cost basis.
(h) Prepaid registration fees--Prepaid registration fees are charged
to expense as the related shares are issued.
(i) Dividends and distributions--Dividends and distributions paid
by the Fund are recorded on the ex-dividend dates.
2. Investment Advisory Agreement and Transactions
with Affiliates:
The Fund has entered into an Investment Advisory Agreement with
Merrill Lynch Asset Management, L.P. ("MLAM"). Effective January 1,
1994, the investment advisory business of MLAM was reorganized
from a corporation to a limited partnership. Both prior to and after
the reorganization, ultimate control of MLAM was vested with
Merrill Lynch & Co., Inc. ("ML & Co."). The general partner of
MLAM is Princeton Services, Inc. ("PSI"), an indirect wholly-owned
subsidiary of ML & Co. The limited partners are ML & Co. and Merrill
Lynch Investment Management, Inc. ("MLIM"), which is also an
indirect wholly-owned subsidiary of ML & Co. The Fund has also
entered into a Distribution Agreement and a Distribution Plan ("the
Distribution Plans") with Merrill Lynch Funds Distributor, Inc.
("MLFD" or "Distributor"), a wholly-owned subsidiary of MLIM.
<PAGE>
MLAM is responsible for the management of the Fund's portfolio
and provides the necessary personnel, facilities, equipment and
certain other services necessary to the operations of the Fund. For
such services, the Fund pays a monthly fee of 0.75%, on an annual
basis, of the average daily value of the Fund's net assets. MLAM has
agreed to waive a portion of its fee payable by the Fund so that such
fee is reduced for average daily net assets of the Fund, in excess of
$2.5 billion from the annual rate of 0.75% to 0.70%, and further
reduced from 0.70% to 0.65% for average daily net assets in excess of
$5 billion. MLAM has entered into a sub-advisory agreement with
Merrill Lynch Asset Management U.K., Ltd. ("MLAM U.K."), an
affiliate of MLAM, pursuant to which MLAM pays MLAM U.K. a fee
computed at the rate of 0.10% of the average daily net assets of the
Fund for providing investment advisory services to MLAM with
respect to the Fund. For the year ended October 31, 1994, MLAM
paid MLAM U.K. a fee of $6,509,464 pursuant to such agreement.
Certain of the states in which the shares of the Fund are qualified
for sale impose limitations on the expenses of the Fund. The most
restrictive annual expense limitation requires that the Investment
Adviser reimburse the Fund to the extent the Fund's expenses
(excluding interest, taxes, distribution fees, brokerage fees and
commissions, and extraordinary items) exceed 2.5% of the Fund's
first $30 million of average daily net assets, 2.0% of the next $70
million of average daily net assets, and 1.5% of the average daily net
assets in excess thereof. MLAM's obligation to reimburse the Fund
is limited to the amount of the management fee. No fee payment
will be made to MLAM during any fiscal year which will cause such
expenses to exceed the most restrictive expense limitation appli-
cable at the time of such payment.
Pursuant to the distribution plans adopted by the Fund in accord-
ance with Rule 12b-1 under the Investment Company Act of 1940,
the Fund pays the Distributor ongoing account maintenance and
distribution fees. The fees are accrued daily and paid monthly at
annual rates based upon the average daily net assets of the shares
as follows:
Account Distribution
Maintenance Fee Fee
Class B 0.25% 0.75%
Class C 0.25% 0.75%
Class D 0.25% --
Pursuant to a sub-agreement with the Distributor, Merrill Lynch,
Pierce, Fenner & Smith Inc. ("MLPF&S"), a subsidiary of ML & Co.,
also provides account maintenance and distribution services to the
Fund. The ongoing account maintenance fee compensates the
Distributor and MLPF&S for providing account maintenance services
to Class B, Class C and Class D shareholders. The ongoing distribu-
tion fee compensates the Distributor and MLPF&S for providing
shareholder and distribution-related services to Class B and
Class C shareholders.
<PAGE>
For the year ended October 31, 1994, MLFD earned underwriting
discounts and MLPF&S earned dealer concessions on sales of the
Fund's Class A and Class D Shares as follows:
MLFD MLPF&S
Class A $623,860 $9,890,832
Class D $ 5,131 $ 90,744
MLPF&S received contingent deferred sales charges of $6,812,598
relating to transactions in Class B Shares of beneficial interest,
$0 relating to transactions in Class C Shares of beneficial interest,
and $294,624 in commissions on the execution of portfolio security
transactions for the Fund for the year ended October 31, 1994.
Financial Data Services, Inc. ("FDS"), a wholly-owned subsidiary of
ML & Co., is the Fund's transfer agent.
Accounting services are provided to the Fund by MLAM at cost.
Certain officers and/or directors of the Fund are officers and/or
directors of MLAM, PSI, MLIM, MLPF&S, FDS, MLFD and/or
ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the year ended October 31, 1994 were $7,206,550,417 and
$3,586,603,191, respectively.
Net realized and unrealized gains (losses) as of October 31, 1994
were as follows:
Realized Unrealized
Gains Gains
(Losses) (Losses)
Long-term investments $182,548,624 $ 69,047,658
Short-term investments (27,825) --
Financial futures contracts 4,253,568 --
Forward foreign exchange contracts (173,001,391) (35,886,925)
Foreign currency transactions 13,677,294 2,846,981
------------ ------------
Total $ 27,450,270 $ 36,007,714
============ ============
As of October 31, 1994, net unrealized appreciation for Federal income
tax purposes aggregated $68,860,827, of which $451,980,812 related
to appreciated securities and $383,119,985 related to depreciated
securities. At October 31, 1994, the aggregate cost of investments
for Federal income tax purposes was $7,701,597,115.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (concluded)
4. Capital Share Transactions:
Net increase (decrease) in net assets derived from capital share
transactions was $2,862,952,855 and $3,647,738,774 for the years
ended October 31, 1994 and October 31, 1993, respectively.
Transactions in capital shares for each class were as follows:
Class A Shares for the Year Ended Dollar
October 31, 1994 Shares Amount
Shares sold 51,696,255 $ 691,831,423
Shares issued to shareholders in
reinvestment of dividends and
distributions 3,969,366 52,332,829
-------------- --------------
Total issued 55,665,621 744,164,252
Shares redeemed (19,692,065) (262,792,460)
-------------- --------------
Net increase 35,973,556 $ 481,371,792
============== ==============
Class A Shares for the Year Ended Dollar
October 31, 1994 Shares Amount
Shares sold 51,001,581 $ 652,336,461
Shares issued to shareholders in
reinvestment of dividends and
distributions 1,771,977 20,906,783
-------------- --------------
Total issued 52,773,558 673,243,244
Shares redeemed (5,508,522) (70,517,148)
-------------- --------------
Net increase 47,265,036 $ 602,726,096
============== ==============
<PAGE>
Class B Shares for the Year Ended Dollar
October 31, 1994 Shares Amount
Shares sold 225,442,147 $2,984,209,294
Shares issued to shareholders in
reinvestment of dividends and
distributions 16,263,879 212,326,903
-------------- --------------
Total issued 241,706,026 3,196,536,197
Shares redeemed (62,873,994) (827,228,356)
-------------- --------------
Net increase 178,832,032 $2,369,307,841
============== ==============
Class B Shares for the Year Ended Dollar
October 31, 1994 Shares Amount
Shares sold 248,487,181 $3,152,585,403
Shares issued to shareholders in
reinvestment of dividends and
distributions 6,532,523 76,482,665
-------------- --------------
Total issued 255,019,704 3,229,068,068
Shares redeemed (14,631,176) (184,055,390)
-------------- --------------
Net increase 240,388,528 $3,045,012,678
============== ==============
Class C Shares for the Period Dollar
October 21, 1994++ to October 31, 1994 Shares Amount
Shares sold 569,603 $ 7,333,052
Shares redeemed (586) (7,533)
-------------- --------------
Net increase 569,017 $ 7,325,519
============== ==============
[FN]
++Commencement of Operations.
Class D Shares for the Period Dollar
October 21, 1994++ to October 31, 1994 Shares Amount
Shares sold 385,289 $ 5,017,907
Shares redeemed (5,386) (70,204)
-------------- --------------
Net increase 379,903 $ 4,947,703
============== ==============
[FN]
++Commencement of Operations.
<PAGE>
5. Commitments:
At October 31, 1994, the Fund had entered into forward foreign
exchange contracts under which it had agreed to purchase and sell
various foreign currency with an approximate value of $17,629,000
and $7,333,000, respectively.
6. Subsequent Event:
On December 14, 1994, the Fund's Board of Directors declared an
ordinary income dividend to Common Stock shareholders in the
amount of $0.221714 per Class A Share, $0.155144 per Class B
Share, $0.203138 per Class C Share and $0.217868 per Class D Share
and a capital gains distribution of $0.304732 per Class A Share, Class B
Share, Class C Share and Class D Share, payable on December 21,
1994, to shareholders of record as of December 13, 1994.
<AUDIT-REPORT>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders of
Merrill Lynch Global Allocation Fund, Inc.:
We have audited the accompanying statement of assets and liabilities,
including the schedule of investments, of Merrill Lynch Global Alloca-
tion Fund, Inc. as of October 31, 1994, the related statements of opera-
tions for the year then ended and changes in net assets for each
of the years in the two-year period then ended, and the financial
highlights for each of the years in the five-year period then ended.
These financial statements and the financial highlights are the
responsibility of the Fund's management. Our responsibility is to
express an opinion on these financial statements and the financial
highlights based on our audits.
We conducted our audits in accordance with generally accepted audit-
ing standards. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial
statements and the financial highlights are free of material misstate-
ment. An audit includes examining, on a test basis, evidence support-
ing the amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned at October 31,
1994 by correspondence with the custodian, brokers, and affiliated
funds. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights
present fairly, in all material respects, the financial position of
Merrill Lynch Global Allocation Fund, Inc. as of October 31, 1994, the
results of its operations, the changes in its net assets, and the
financial highlights for the respective stated periods in conformity
with generally accepted accounting principles.
Deloitte & Touche LLP
Princeton, New Jersey
December 7, 1994
</AUDIT-REPORT>
<PAGE>
IMPORTANT TAX INFORMATION (unaudited)
The following information summarizes all per share distributions paid by
Merrill Lynch Global Allocation Fund, Inc. during the year ended
October 31, 1994:
<TABLE>
<CAPTION>
Qualifying Domestic Interest From Other Non-Qualifying Total Long-Term
Record Date Payable Date Ordinary Income Federal Obligations Ordinary Income Ordinary Income Capital Gains
<S> <C> <C> <C> <C> <C> <C>
Class A Shares:
12/14/93 12/22/93 $.033994 $.005371 $.283899 $.323264 $.193803
8/01/94 8/09/94 $.044108 $.007604 $.167339 $.219051 $ --
Class B Shares:
12/14/93 12/22/93 $.028235 $.004461 $.235800 $.268496 $.193803
8/01/94 8/09/94 $.032085 $.005532 $.121727 $.159344 $ --
</TABLE>
The qualifying domestic ordinary income qualifies for the dividends
received deduction for corporations.
The law varies in each state as to whether and what percentage of
dividend income attributable to Federal obligations is exempt from
state income tax. We recommend that you consult your tax adviser to
determine if any portion of the dividends you received is exempt from
state income tax.
Listed at right are the percentages of the Fund's total assets invested in
Federal obligations* as of the end of each quarter of the fiscal year.
For the Quarter Ended % of Federal Obligations*
January 31, 1994 1.21%
April 30, 1994 5.88%
July 31, 1994 1.64%
October 31, 1994 0.73%
[FN]
*For purposes of this circulation, Federal obligations include US Treasury
Notes, US Treasury Bills, and US Treasury Bonds. Also included are obliga-
tions issued by the following agencies: Banks for Cooperatives, Federal
Intermediate Credit Banks, Federal Land Banks, Federal Home Loan Banks,
and the Student Loan Marketing Association. Repurchase agreements are not
included in this calculation.
Please retain this information for your records.
<PAGE>
PORTFOLIO CHANGES (unaudited)
For the Quarter Ended October 31, 1994
Additions Alba Corp. (Rights)
British Telecommunications PLC
Continental Cablevision, Inc.,
9.50% due 8/01/2013
Diamond Cable Communications, 0%
due 9/30/2004
Filippo Fochi S.p.A.
Finaxa, Bond, 3.00% due 1/01/2001
First Federal Financial Corporation, 11.75%
due 10/01/2004
GIO Australia Holdings, Ltd.
Kaufman & Broad Home Corporation, 9.375%
due 5/01/2003
Koninklijke PTT Nederland N.V.
MDC Holdings, Inc., 6.642% due 4/01/1998
Merisel, Inc., 12.50% due 12/31/2004
Mutual Life Insurance Co., 0% due 8/15/2024
PartnerRe Holdings, Ltd.
Plains Resources, Inc.
Prime Residential, Inc.
Sears Holdings PLC
Skandia Forsakring 'AB' Free
Societe Generale (New)
Southern National Corp.
Times Mirror Co.
TJ International, Inc.
Total Renal Care Inc.
Total Renal Care Inc., 0% due 8/15/2004
Treuhandanstalt:
7.375% due 12/02/2002
7.50% due 9/09/2004
<PAGE>
Deletions AEGON N.V., Convertible Bonds, 7.00%
due 9/15/2001
Assicurazioni Generali
Baloise Holdings Insurance (Warrants)
Blue Circle Industries PLC
British Petroleum Co. Ltd. PLC (ADR)
Bundesrepublic Deutscheland,
6.50% due 7/15/2003
Chiles Offshore Corp.
Chiles Offshore Corp. (6% Convertible Pfd.)
Commonwealth Edison Company, Inc.
Continental Bank Corp.
Digital Equipment Corp.
Government of Spain:
11.30% due 1/15/2002
8% due 5/30/2004
GP Financial Corp.
Gulf States Utilities Co. (8.52% Pfd.)
Harris Chemical of North America, 10.25%
due 7/15/2001
Heineken Holdings Inc.
Heineken N.V.
IBM Finance, Convertible Bonds, 5.75%
due 1/01/1998
James River Corp.
Johnson & Johnson Co.
Kia Motors (GDS)
Long Island Lighting Co.
Long Island Lighting Co., 9.625% due 7/01/2024
Marks & Spencer PLC
Matsushita Electric Industrial Co., Ltd.
National Power PLC, Convertible Bonds, 6.25%
due 9/23/2008
National Westminster Bank PLC
PT Pabrik Kertas Tjiwa Kimia, Convertible
Bonds, 7.25% due 4/12/2001
Republic of Venezuela:
(Series A), 6.75% due 3/31/2020
(Series B), 6.75% due 3/31/2020
Riggs National Corp. (10.75% Convertible Pfd.,
Series B)
Sandoz AG (Registered)
Schweizerischer Bankverein (Bearer)
Storer Communications Inc., 10% due 5/15/2003
Syntex Corp.
Treuhandanstalt, 7.125% due 1/29/2003
United Biscuit PLC
USAir Group Inc.
Vallehermoso Espanola S.A.
Winterthur Schweizerische
Versicherungs-Gesellschaft AG
<PAGE>
PORTFOLIO INFORMATION (unaudited)
Worldwide
Investments
As of 10/31/94
Percent Breakdown of
Stocks & Fixed-Income Percent of
Securities by Country Net Assets
United States* 58.7%
Germany 11.8
Japan 5.5
Spain 4.5
United Kingdom 3.8
Canada 3.2
European Currency Units 3.0
France 2.7
Netherlands 2.5
Italy 1.0
Switzerland 0.6
Sweden 0.5
Finland 0.5
Ireland 0.3
Australia 0.3
Austria 0.1
South Korea --
Portugal --
New Zealand --
Hong Kong --
Denmark --
------
Total 97.5%
======
Ten Largest Industries Percent of
(Equity Investments) Net Assets
Banking 8.6%
Insurance 3.6
Utilities-Electric 2.7
Energy & Petroleum 1.8
Retail Stores 1.7
Telecommunications 1.3
Pharmaceuticals/Biotechnology 1.3
Electronics 1.3
Healthcare Services 1.1
Paper & Forest Products 1.1
<PAGE>
Ten Largest Holdings Percent of
(Equity Investments) Net Assets
Republic New York Corp. 0.8%
Chemical Banking Corp. 0.7
Philip Morris Companies, Inc. 0.6
ABN Amro Holdings N.V. 0.6
Entergy Corp. 0.5
KeyCorp 0.5
First of America Bank Corp. 0.5
Internationale Nederlanden
Groep N.V. 0.5
Bristol-Myers Squibb Co. 0.5
Veba AG 0.4
[FN]
*Includes investments in short-term securities.
<PAGE>
APPENDIX GRAPHIC AND IMAGE MATERIAL.
ITEM 1:
Total Return Based on a $10,000 Investment
A line graph depicting the growth of an investment in the Fund's Class A
and Class B Shares compared to grwpth of an invesmnet in the Goldman Sachs
Financial Times--Actuaries World Index. Beginning and ending values are:
2/3/89** 10/94
ML Global Allocation Fund, Inc.++-- $9,600 $19,423
Class A Shares*
ML Global Allocation Fund, Inc.++-- $10,000 $19,342
Class B Shares*
Goldman Sachs Financial Times-- $10,000 $14,721
Actuaries World Index++++
[FN]
*Assuming maximum sales charges, transaction costs and other operating
expenses, including advisory fees.
**Commencement of Operations.
++ML Global Allocation Fund, Inc. invests in a portfolio of US and foreign
issues, whose compisition varies with respect to types of securities and
markets in response to changing market and economic trends.
++++This unmanaged capitalization-weighted Index is comprised of 2,200
equities from 24 countries in 12 regions, including the United States.
