MERRILL LYNCH
GLOBAL
ALLOCATION
FUND, INC.
FUND LOGO
Semi-Annual Report
April 30, 1997
This report is not authorized for use as an offer of sale or a
solicitation of an offer to buy shares of the Fund unless
accompanied or preceded by the Fund's current prospectus. Past
performance results shown in this report should not be considered a
representation of future performance. Investment return and
principal value of shares will fluctuate so that shares, when
redeemed, may be worth more or less than their original cost.
Statements and other information herein are as dated and are subject
to change.
<PAGE>
Merrill Lynch
Global Allocation
Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
Printed on post-consumer recycled paper
MERRILL LYNCH GLOBAL ALLOCATION FUND, INC.
<TABLE>
Summary of
Fund's Overall
Asset Mix
As of 4/30/97
<CAPTION>
Percent of Fund's Portfolio Reference Portfolio
4/30/97 1/31/97 Percentages
<S> <C> <C> <C>
North & South American Equities 18.4% 18.1%* 36.0%
European Equities 9.7 9.3 11.0
Pacific Basin Equities 5.4 4.9 13.0
Total Equities 33.5* 32.3 60.0
US Dollar Denominated Fixed-Income Securities 36.3 29.5 24.0
US Issuers 26.9 19.8 --
Non-US Issuers 9.4 9.7 --
Non-US Dollar Denominated Fixed-Income Securities 9.6 11.3 16.0
Total Fixed-Income Securities 45.9++ 40.8++ 40.0
Cash & Cash Equivalents 20.6 26.9 --
<PAGE>
<FN>
*Includes value of Stock Index Futures.
++Includes Preferred Stock.
</TABLE>
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 and Portfolio Manager
Dennis W. Stattman, Vice President
Gerald M. Richard, Treasurer
James W. Harshaw, Secretary
Custodian
Brown Brothers Harriman & Co.
40 Water Street
Boston, MA 02109
Transfer Agent
Merrill Lynch Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 637-3863
DEAR SHAREHOLDER
During the quarter ended April 30, 1997, Merrill Lynch Global
Allocation Fund, Inc.'s Class A, Class B, Class C and Class D Shares
had total returns of +0.81%, +0.55%, +0.55% and +0.74%, respectively.
(Fund results shown do not reflect sales charges, and would be lower
if sales charges were included. Complete performance information,
including average annual total returns, can be found on pages 4--6
of this report to shareholders.)
<PAGE>
Portfolio Matters
During the April quarter, we modestly adjusted the Fund's asset
allocation. We slightly increased the Fund's equity investments to
33.5% of net assets, up from 32.3% at the end of the prior quarter.
Fixed-income securities increased to 45.9% of net assets at April
quarter-end, compared to 40.8% at the end of the prior quarter. We
reduced the Fund's cash position to 20.6% of net assets, down from
26.9% at the end of the prior quarter.
Within the equity portfolio, our geographic allocations remained
virtually the same. Although the Fund's equity investments did not
change dramatically, the April quarter was volatile for stock
markets worldwide. For example, the French stock market declined
about 7.5% from its peak to trough during the quarter, while the UK
stock market registered approximately a 5.3% decline.
Erratic price movements were most pronounced for the US stock
market, which experienced its most volatile period since July 1996.
As measured by the unmanaged Standard & Poor's 500 Composite Index,
the US stock market experienced a sharp drop from early March
through the end of April, declining approximately 9.5% from peak to
trough. In contrast, per share net asset value for the Fund's Class
A Shares declined 3.5% from peak to trough during the quarter. After
these declines, both the unmanaged S&P 500 and the Fund went on to
set new historic highs.
US bond yields rose during the quarter, as measured by the five-year
US Treasury bond, which began the April quarter at 6.25% and ended
the period with a yield of 6.57%. The Fund took advantage of the
higher yields available by investing in two-year and three-year US
Treasury notes. The Fund continued to increase the quality of its
fixed-income holdings as premiums for incurring credit risk have
declined to levels that are less attractive than those prevailing
for most of the past six years.
Bond yields also rose in Europe. Early in the April quarter, we took
advantage of high prices on German bonds to reduce positions in the
longest maturities before the price declines occurred. Also, before
the correction occurred, we reduced investments in French government
bonds denominated in European Currency Units (ECU). As a result of
these sales, the portfolio's European bond exposure declined from
12.2% of net assets to 10.0% during the three months ended April 30,
1997.
During the April quarter, we also modestly reduced the Fund's
currency hedge against the Deutschemark. However, our overall
hedging strategy is little changed from the prior quarter. The Fund
remains overweighted in US dollars.
<PAGE>
A Long-Term Look at Performance
In managing Merrill Lynch Global Allocation Fund, we strive to limit
the Fund's volatility--that is, the fluctuations in per share net
asset value--as we seek a high total investment return. To seek to
accomplish these aims, our investment strategies follow a two-fold
approach. First, we attempt to assess which asset classes (stock,
bonds or cash) afford the most attractive risk/return potential, and
allocate assets accordingly. At the same time, we follow a value-
oriented approach when investing in specific sectors, industries and
individual securities. We believe that this value-oriented approach
further limits investment risk.
One way to measure our progress in achieving an attractive
risk/return balance is to compare the Fund's performance relative to
the components of its benchmark index, as shown in the tables below.
The left-hand table compares five-year average annual total returns
on the Fund's Class A Shares with those of US stocks (as measured by
the unmanaged Standard & Poor's 500), foreign bonds (represented by
the unmanaged Salomon Brothers Non-US Dollar World Government Bond
Index), foreign stocks (as measured by the unmanaged FT/S&P--
Actuaries World (Ex-US) Index), and five-year US Treasury bonds. The
right-hand table compares the five-year annualized volatility, or
standard deviation, of the Fund's Class A Shares with those of the
component indexes. Standard deviation measures the variability of
returns and is a generally accepted proxy for risk.
As the two tables show, compared to the benchmark components,
Merrill Lynch Global Allocation Fund's Class A Shares achieved the
second-highest total return for the five-year period shown while
also experiencing the second-lowest level of volatility. For
example, the Fund experienced less than half the volatility of the
S&P 500 while achieving a five-year average annual total return that
was only modestly less than the US stock index. Viewed from another
perspective, the Fund's volatility over the five-year period was not
significantly greater than that of five-year Treasury notes, but its
average total return was more than twice as high. The Fund's
management will seek to limit the Fund's volatility similarly in the
future, although, of course, past performance is not predictive of
future results.
In Conclusion
We thank you for your investment in Merrill Lynch Global Allocation
Fund, Inc., and we look forward to reviewing our outlook and
strategy with you again in our next report to shareholders.
Sincerely,
<PAGE>
(Arthur Zeikel)
Arthur Zeikel
President
(Bryan N. Ison)
Bryan N. Ison
Vice President and
Portfolio Manager
June 11, 1997
Five-Year Average Annual Total Return*
Highest US Stocks +15.20%
ML Global Allocation Fund--Class A Shares +13.85
Foreign Bonds + 9.73
Foreign Stocks + 7.94
Lowest Five-Year US Treasury Notes + 5.79
Five-Year Annualized Volatility*
Five-Year US Treasury Notes 4.38% Lowest
ML Global Allocation Fund--Class A Shares 4.43
Foreign Bonds 7.53
US Stocks 9.85
Foreign Stocks 12.00 Highest
<PAGE>
[FN]
*For the five years ended December 31, 1996. Please see pages 4--6
of this report to shareholders for complete performance information
for all classes of shares for Merrill Lynch Global Allocation Fund,
Inc. Fund average annual total returns do not reflect sales charges,
and would be lower if sales charges were included.
US stocks are represented by the S&P 500, an unmanaged market
capitalization-weighted total return index composed of 500 widely
held stocks on the New York Stock Exchange, American Stock Exchange,
and the over-the-counter market. Foreign bonds are represented by
the Salomon Brothers Non-Dollar World Government Bond Index, an
unmanaged market capitalization-weighted index tracking 10
government bond indexes, excluding the United States. Foreign stocks
are represented by the Financial Times/S&P-Actuaries World Index
(ex-US), an unmanaged market capitalization-weighted index composed
of over 1,800 companies in 24 countries, excluding the United
States. Volatility is measured by standard deviation, the annualized
variability of individual monthly returns versus average monthly
returns. Volatility is for five-year US Treasury notes with constant
maturity.
Past performance is not predictive of future results.
PERFORMANCE DATA
About Fund
Performance
Investors are able to purchase shares of the Fund through the
Merrill Lynch Select Pricing SM System, which offers four pricing
alternatives:
* Class A Shares incur a maximum initial sales charge (front-end
load) of 5.25% and bear no ongoing distribution or account
maintenance fees. Class A Shares are available only to eligible
investors.
* Class B Shares are subject to a maximum contingent deferred sales
charge of 4% if redeemed during the first year, decreasing 1% each
year thereafter to 0% after the fourth year. In addition, Class B
Shares are subject to a distribution fee of 0.75% and an account
maintenance fee of 0.25%. These shares automatically convert to
Class D Shares after approximately 8 years. (There is no initial
sales charge for automatic share conversions.)
<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 distribution fee).
None of the past results shown should be considered a representation
of future performance. Figures shown in the "Average Annual Total
Return" tables as well as the total returns and cumulative total
returns in the "Performance Summary" tables assume reinvestment of
all dividends and capital gains distributions at net asset value on
the ex-dividend date. Investment return and principal value of
shares will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost. Dividends paid to each class
of shares will vary because of the different levels of account
maintenance, distribution and transfer agency fees applicable to
each class, which are deducted from the income available to be paid
to shareholders.
Average Annual
Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 3/31/97 +13.85% + 7.87%
Five Years Ended 3/31/97 +13.50 +12.28
Inception (2/3/89) through 3/31/97 +14.05 +13.30
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 3/31/97 +12.70% + 8.70%
Five Years Ended 3/31/97 +12.36 +12.36
Inception (2/3/89) through 3/31/97 +12.90 +12.90
<PAGE>
[FN]
*Maximum contingent deferred sales charge is 4% and is reduced to 0%
after 4 years.
**Assuming payment of applicable contingent deferred sales charge.
% Return % Return
Without CDSC With CDSC**
Class C Shares*
Year Ended 3/31/97 +12.66% +11.66%
Inception (10/21/94) through 3/31/97 +14.43 +14.43
[FN]
*Maximum contingent deferred sales charge is 1% and is reduced to 0%
after 1 year.
**Assuming payment of applicable contingent deferred sales charge.
% Return Without % Return With
Sales Charge Sales Charge**
Class D Shares*
Year Ended 3/31/97 +13.54% + 7.58%
Inception (10/21/94) through 3/31/97 +15.35 +12.83
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
<TABLE>
Performance
Summary--
Class A Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<S> <C> <C> <C> <C> <C>
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
1994 13.23 12.23 0.140 0.605 - 2.00
1995 12.23 13.88 0.341 0.872 +23.72
1996 13.88 14.55 0.530 1.001 +16.19
1/1/97--4/30/97 14.55 14.93 -- -- + 2.61
------ ------
Total $1.875 Total $6.549
<PAGE>
Cumulative total return as of 4/30/97: +195.11%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures 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**
<S> <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
1994 13.11 12.12 0.140 0.479 - 2.89
1995 12.12 13.73 0.341 0.735 +22.39
1996 13.73 14.36 0.530 0.855 +14.95
1/1/97--4/30/97 14.36 14.69 -- -- + 2.30
------ ------
Total $1.875 Total $5.642
Cumulative total return as of 4/30/97: +171.24%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures do not reflect deduction of any sales charge; results
would be lower if sales charge was deducted.
</TABLE>
<TABLE>
Performance
Summary--
Class C Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<S> <C> <C> <C> <C> <C>
10/21/94--12/31/94 $12.91 $12.07 $0.140 $0.368 - 2.58%
1995 12.07 13.63 0.341 0.771 +22.38
1996 13.63 14.23 0.530 0.876 +15.01
1/1/97--4/30/97 14.23 14.55 -- -- + 2.25
------ ------
Total $1.011 Total $2.015
<PAGE>
Cumulative total return as of 4/30/97: +40.21%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures do not reflect deduction of any sales charge; results
would be lower if sales charge was deducted.
</TABLE>
PERFORMANCE DATA (concluded)
<TABLE>
Performance
Summary--
Class D Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<S> <C> <C> <C> <C> <C>
10/21/94--12/31/94 $13.07 $12.24 $0.140 $0.383 - 2.35%
1995 12.24 13.87 0.341 0.845 +23.29
1996 13.87 14.54 0.530 0.968 +15.96
1/1/97--4/30/97 14.54 14.90 -- -- + 2.48
------ ------
Total $1.011 Total $2.196
Cumulative total return as of 4/30/97: +43.06%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures do not include sales charge; results would be lower if
sales charge was included.
</TABLE>
<PAGE>
<TABLE>
Recent
Performance
Results
<CAPTION>
Net Asset Value Total Return
4/30/97 1/31/97 4/30/96 12-Month 3-Month
<S> <C> <C> <C> <C> <C>
ML Global Allocation Fund, Inc. Class A Shares* $14.93 $14.81 $14.66 +12.88%(1) +0.81%
ML Global Allocation Fund, Inc. Class B Shares* 14.69 14.61 14.45 +11.74(2) +0.55
ML Global Allocation Fund, Inc. Class C Shares* 14.55 14.47 14.35 +11.69(3) +0.55
ML Global Allocation Fund, Inc. Class D Shares* 14.90 14.79 14.65 +12.50(4) +0.74
US Stocks: Standard & Poor's 500 Index** +25.09 +2.38
Non-US Stocks: Financial Times/Standard & Poor's--
Actuaries World Index (Ex-US)*** - 0.84 +2.16
US Bonds: ML Government Index GA05**** + 5.33 +0.26
Non-US Bonds: Salomon Brothers World Government Bond Index (Ex-US)***** - 2.07 -3.79
<FN>
*Investment results shown do not reflect sales charges; results
shown would be lower if a sales charge was included.
**An unmanaged broad-based index comprised of common stocks. 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 $1.001 per share ordinary
income dividends and $0.530 per share capital gains distributions.
(2)Percent change includes reinvestment of $0.855 per share ordinary
income dividends and $0.530 per share capital gains distributions.
(3)Percent change includes reinvestment of $0.876 per share ordinary
income dividends and $0.530 per share capital gains distributions.
(4)Percent change includes reinvestment of $0.968 per share ordinary
income dividends and $0.530 per share capital gains distributions.
</TABLE>
Portfolio
Abbreviations
To simplify the currency denominations of Merrill Lynch Global
Allocation Fund, Inc.'s portfolio holdings in the Schedule of
Investments, we have abbreviated the currencies according to the
list at right.
<PAGE>
CAD Canadian Dollar
CHF Swiss Franc
DEM German Deutschemark
DKR Danish Krone
ECU European Currency Unit
ESP Spanish Peseta
FRF French Franc
GBP Great Britain Pound
ITL Italian Lira
JPY Japanese Yen
NLG Netherlands Guilder
NOK Norwegian Krone
NZD New Zealand Dollar
SKR Swedish Kroner
USD United States Dollar
<TABLE>
SCHEDULE OF INVESTMENTS (in US dollars)
<CAPTION>
Shares Value Percent of
COUNTRY Industries Held Common Stocks Cost (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C>
Argentina Oil--Related 600,000 Yacimientos Petroliferos Fiscales
S.A. (ADR)++++ (USD) $ 12,973,690 $ 16,575,000 0.1%
Total Common Stocks in Argentina 12,973,690 16,575,000 0.1
Australia Banking 2,645,800 Westpac Banking Corp. 5,614,396 14,287,757 0.1
Building & 2,286,577 Lend Lease Corporation Limited 38,116,084 43,851,997 0.4
Construction
Foods 7,916,000 Goodman Fielder Wattie Ltd. 8,324,587 10,393,075 0.1
Insurance 1,614,135 GIO Australia Holdings, Ltd. 2,786,182 4,793,497 0.0
Multi-Industry 1,500,000 Pacific Dunlop, Ltd. 4,092,789 4,055,985 0.0
Tobacco 2,099,800 Rothmans Holdings, Ltd. 7,893,919 13,800,757 0.1
1,242,300 WD & HO Wills Holdings, Ltd. 1,389,502 1,999,966 0.0
--------------- --------------- ------
9,283,421 15,800,723 0.1
Total Common Stocks in Australia 68,217,459 93,183,034 0.7
Canada Beverages 1,900,000 Cott Corp. (USD) 15,484,918 17,337,500 0.2
Metals--Non-Ferrous 100,000 Inco Ltd. (USD) 2,132,000 3,200,000 0.0
Multi-Industry 100,000 Canadian Pacific, Ltd. (USD) 1,116,420 2,437,500 0.0
Oil--Related 117,400 ++International Petroleum Corp. (USD) 237,375 498,950 0.0
Paper 3,250,000 ++Repap Enterprises Inc. (USD) 12,879,320 1,929,688 0.0
<PAGE>
Specialty Retailing 280,000 Semi-Tech Corporation (Class A) 4,108,297 470,942 0.0
Telecommunications 100,000 BCE Telecommunications, Inc. (USD) 3,375,484 4,662,500 0.0
1,165,200 ++Rogers Cantel Mobile
Communications Inc. (Class B)+++ 22,391,634 20,265,073 0.2
634,000 ++Rogers Cantel Mobile
Communications Inc. (USD)+++ 10,966,850 10,936,500 0.1
4,543,700 ++Rogers Communications Inc. 39,359,870 23,902,229 0.2
--------------- --------------- ------
76,093,838 59,766,302 0.5
Total Common Stocks in Canada 112,052,168 85,640,882 0.7
Denmark Banking 53,500 Unidanmark A/S 1,870,730 2,646,746 0.0
Total Common Stocks in Denmark 1,870,730 2,646,746 0.0
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Shares Value Percent of
COUNTRY Industries Held Common Stocks Cost (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C>
Finland Machinery 21,623 Rauma OY $ 462,111 $ 445,003 0.0%
Metals 576,930 Outokumpu OY 8,651,262 11,041,032 0.1
Paper & Forest 1,500,000 ++Enso-Gutzeit OY 12,019,454 12,405,755 0.1
Products 2,909,250 Metsa Serla OY 'B' 23,657,400 21,822,732 0.2
776,492 UPM-Kymmene OY 15,467,454 17,772,455 0.1
--------------- --------------- ------
51,144,308 52,000,942 0.4
Telecommunications 250,000 Nokia Corp. (ADR)++++ (USD) 8,318,438 16,156,250 0.1
Equipment 186,360 Nokia OY 8,998,615 11,627,786 0.1
--------------- --------------- ------
17,317,053 27,784,036 0.2
Total Common Stocks in Finland 77,574,734 91,271,013 0.7
France Automobiles 138,396 Peugeot S.A. 16,287,620 13,776,763 0.1
Banking 173,900 Compagnie Financiere de Paribas S.A. 9,343,179 10,967,633 0.1
710,386 Societe Generale 75,176,889 79,601,207 0.6
--------------- --------------- ------
84,520,068 90,568,840 0.7
<PAGE>
Electronics 91,021 ++SGS-Thomson Microelectronics N.V. 4,196,067 7,017,810 0.1
Engineering & 119,340 Bouygues S.A. 12,009,424 11,184,611 0.1
Construction
Foods/Food 61,600 Groupe Danone S.A. 9,786,153 8,971,130 0.1
Processing
Hotel/Leisure 88,334 Accor S.A. 12,357,383 12,667,790 0.1
Industrial 138,035 Alcatel Alsthom Cie Generale
d'Electricite S.A. 11,838,304 15,349,047 0.1
157,210 Elf Aquitaine (Elf) S.A. 11,348,994 15,245,586 0.1
--------------- --------------- ------
23,187,298 30,594,633 0.2
Metals/Steel 1,047,115 Usinor-Sacilor S.A. 15,619,849 15,823,789 0.1
Multi-Industry 33,455 EuraFrance S.A. 9,052,946 14,456,183 0.1
Retail--Home 20,393 Castorama Dubois Investisse 3,177,356 3,015,362 0.0
Improvement
Total Common Stocks in France 190,194,164 208,076,911 1.6
Germany Airlines 350,032 Deutsche Lufthansa AG 4,938,522 4,881,206 0.0
Automotive 35,257 Volkswagen AG 13,209,432 22,414,804 0.2
Banking 55,680 Bayerische Vereinsbank AG 1,339,965 2,186,303 0.0
Capital Goods 369,636 ++Kloeckner-Werke AG 17,229,762 24,524,296 0.2
Chemicals 101,451 Henkel KGaA 4,390,556 5,120,001 0.0
Engineering & 30,480 Philipp Holzmann AG 11,661,385 8,104,885 0.1
Construction
Insurance 36,136 Allianz AG Holding 6,395,351 7,011,026 0.1
Manufacturing 158,685 Thyssen AG 32,425,611 34,590,361 0.3
Retail 47,934 Karstadt AG 17,494,235 14,365,253 0.1
Telecommunications 197,100 Deutsche Telekom AG 3,748,649 4,277,063 0.0
Total Common Stocks in Germany 112,833,468 127,475,198 1.0
<PAGE>
Hong Kong Agriculture 31,924,000 C.P. Pokphand Co. Ltd. (Ordinary) 11,031,647 9,994,281 0.1
Banking 396,982 HSBC Holdings PLC 4,021,165 10,044,987 0.1
Conglomerates 889,500 Hutchison Whampoa Ltd. 4,867,725 6,602,924 0.0
Real Estate 817,000 Cheung Kong Holdings Ltd. 5,904,073 7,172,218 0.1
Total Common Stocks in Hong Kong 25,824,610 33,814,410 0.3
Indonesia Paper & Pulp 2,669,600 ++Asia Pacific Resources
International Holdings Ltd.
(ADR)++++ (USD)+++ 18,325,968 12,013,200 0.1
1,715,000 ++Asia Pulp & Paper Company Ltd.
(ADR)++++ (USD) 19,722,500 22,938,125 0.2
Total Common Stocks in Indonesia 38,048,468 34,951,325 0.3
Italy Banking 1,813,400 Istituto Mobiliare Italiano S.p.A.
(Ordinary) 13,339,979 15,453,368 0.2
Insurance 10,785,989 Istituto Nazionale della
Assicurazioni (INA) S.p.A. 15,495,280 14,463,246 0.1
97,000 Mediolanum S.p.A. 747,016 929,477 0.0
--------------- --------------- ------
16,242,296 15,392,723 0.1
Multi-Industry 9,117,595 ++Compagnie Industriali Riunite
S.p.A. (CIR) 7,816,550 5,966,524 0.0
22,261,389 MontEdison S.p.A. 18,196,087 14,580,787 0.1
--------------- --------------- ------
26,012,637 20,547,311 0.1
Oil--Related 236,547 Ente Nazionale Idrocarburi S.p.A. 1,152,415 1,201,048 0.0
Publishing 3,000,000 ++Seat S.p.A. 1,088,139 918,493 0.0
8,666,863 ++Seat S.p.A.--RISP 2,411,987 1,716,662 0.0
--------------- --------------- ------
3,500,126 2,635,155 0.0
Telecommuni- 3,000,000 Societa Finanziaria Telefonica
cations S.p.A. (STET) 4,365,655 14,189,308 0.1
6,141,600 Societa Finanziaria Telefonica
S.p.A. (STET) RISP 11,818,576 22,786,538 0.2
3,958,000 Telecom Italia Mobile S.p.A. 1,395,818 12,453,304 0.1
3,958,000 Telecom Italia S.p.A. 7,779,466 10,418,224 0.1
--------------- --------------- ------
25,359,515 59,847,374 0.5
Total Common Stocks in Italy 85,606,968 115,076,979 0.9
<PAGE>
Japan Automobiles & 3,282,000 Suzuki Motor Corp. 30,510,247 34,923,150 0.3
Equipment
Beverages 1,117,000 Chukyo Coca-Cola Bottling Co., Ltd. 13,019,432 9,244,502 0.1
565,000 Hokkaido Coca-Cola Bottling Co., Ltd. 7,764,597 6,724,600 0.0
790,000 Kinki Coca-Cola Bottling Co., Ltd. 11,999,955 9,091,196 0.1
1,243,000 Mikuni Coca-Cola Bottling Co., Ltd. 17,391,669 14,892,094 0.1
1,004,000 Sanyo Coca-Cola Bottling Co., Ltd. 14,326,160 12,424,371 0.1
--------------- --------------- ------
64,501,813 52,376,763 0.4
Capital Goods 4,118,000 Mitsubishi Heavy Industries, Inc. 25,214,471 27,200,158 0.2
Chemicals 34,000 Shin-Etsu Chemical Co., Ltd. 657,132 686,057 0.0
Electrical 1,088,600 Chudenko Corp. 29,289,689 27,800,615 0.2
Construction 1,386,000 Kinden Corporation 21,348,708 15,622,133 0.1
34,000 Taihei Dengyo Kaisha, Ltd. 637,020 216,537 0.0
--------------- --------------- ------
51,275,417 43,639,285 0.3
Electrical 593,000 Murata Manufacturing Co., Ltd. 19,275,913 21,874,675 0.2
Equipment
Financial Services 879,000 Nomura Securities Co., Ltd. 11,893,928 9,838,260 0.1
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Shares Value Percent of
COUNTRY Industries Held Common Stocks Cost (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C>
Japan Industrial 28,000 Miura Kogyo Co., Ltd. $ 466,635 $ 344,289 0.0%
(concluded) 14,520 Nitto Kohki Co., Ltd. 489,424 406,290 0.0
--------------- --------------- ------
956,059 750,579 0.0
<PAGE>
Insurance 2,897,000 Dai-Tokyo Fire & Marine Insurance
Co., Ltd. 17,990,037 13,586,466 0.1
1,780,000 Fuji Fire & Marine Insurance
Co., Ltd. 7,765,514 5,892,646 0.0
4,465,000 Koa Fire & Marine Insurance
Co., Ltd. 22,677,921 20,940,136 0.2
765,000 Mitsui Marine & Fire Insurance
Co., Ltd. 5,730,161 4,353,511 0.0
3,508,000 Nichido Fire & Marine Insurance
Co., Ltd. 20,622,267 18,885,190 0.1
4,418,000 Nippon Fire & Marine Insurance Co.,
Ltd. 18,814,331 17,411,524 0.1
7,315,000 Sumitomo Marine & Fire Insurance
Co., Ltd. 46,067,731 45,030,464 0.4
2,368,000 Tokio Marine & Fire Insurance Co.,
Ltd. 25,707,953 23,144,321 0.2
4,831,000 Yasuda Fire & Marine Insurance Co.,
Ltd. 25,055,075 22,390,069 0.2
--------------- --------------- ------
190,430,990 171,634,327 1.3
Office Equipment 1,612,000 Canon, Inc. 23,455,745 38,244,818 0.3
Packaging & 1,003,200 Toyo Seikan Kaisha, Ltd. 23,384,016 18,424,025 0.2
Containers
Pharmaceuticals 1,061,000 Sankyo Pharmaceuticals Co., Ltd. 23,391,365 28,433,830 0.2
384,000 Taisho Pharmaceuticals Co. 7,984,458 9,503,902 0.1
--------------- --------------- ------
31,375,823 37,937,732 0.3
Restaurants 391,600 Mos Food Services, Inc. 8,797,607 5,308,993 0.0
310,000 Ohsho Food Service Corp. 6,834,314 4,007,252 0.0
--------------- --------------- ------
15,631,921 9,316,245 0.0
Retail Stores 460,000 Ito Yokado Co., Ltd. 21,319,319 22,080,870 0.2
100,000 Sangetsu Co., Ltd. 3,160,832 1,694,648 0.0
--------------- --------------- ------
24,480,151 23,775,518 0.2
Steel 266,000 Maruichi Steel Tube Ltd. 5,107,698 4,193,269 0.0
Total Common Stocks in Japan 518,151,324 494,814,861 3.8
Mexico Conglomerates 433,800 Grupo Carso, S.A. de C.V.
(ADR)++++ (USD) 3,832,850 4,988,700 0.0
Finance 6,054 Grupo Financiero Inbursa, S.A.
de C.V. (ADR)++++ (USD) 121,464 102,918 0.0
Foods 700,000 Grupo Industrial Maseca (ADR)++++
(USD) 7,969,925 10,325,000 0.1
Telecommunications 433,800 ++Global Telecommunications
Solutions, Inc. (ADR)++++ (USD) 2,060,550 2,602,800 0.0
Total Common Stocks in Mexico 13,984,789 18,019,418 0.1
<PAGE>
Netherlands Airlines 156,260 KLM Royal Dutch Airlines N.V. 4,486,455 4,619,233 0.0
Chemicals 143,576 Akzo N.V. 17,876,528 18,495,035 0.1
288,070 European Vinyls Corp.
International N.V. 11,384,340 8,249,580 0.1
--------------- --------------- ------
29,260,868 26,744,615 0.2
Computer Software 111,200 Getronics N.V. 1,347,831 3,367,103 0.0
Electronics 376,943 Philips Electronics N.V. 13,606,852 19,674,161 0.2
Distribution
Forest Products 451,900 Koninklijke KNP N.V. 10,363,525 8,905,804 0.1
Insurance 1,766,537 Internationale Nederlanden Groep N.V. 27,430,540 69,355,956 0.6
Miscellaneous-- 10,000 Nijverdal Ten Cate N.V. 501,699 508,083 0.0
Manufacturing
Telecommunications 501,302 Royal PTT Nederland N.V. 18,129,279 17,803,489 0.1
Total Common Stocks in the
Netherlands 105,127,049 150,978,444 1.2
Norway Banking 4,785,400 Christiania Bank Og Kreditkasse 10,697,335 14,859,820 0.1
2,434,000 Den Norske Bank ASA 7,189,721 8,789,349 0.1
--------------- --------------- ------
17,887,056 23,649,169 0.2
Multi-Industry 96,154 Orkla A.S. (Class A) 4,858,216 8,065,749 0.1
Total Common Stocks in Norway 22,745,272 31,714,918 0.3
Portugal Banking 1,844,507 Banco Commerciale Portuguese 26,468,747 28,068,582 0.2
Telecommunications 41,000 ++Telecel-Comunicacaoes Pessoais, S.A. 2,073,605 3,529,848 0.0
Total Common Stocks in Portugal 28,542,352 31,598,430 0.2
Spain Banking 326,000 Argentaria S.A. 12,974,203 14,555,365 0.2
166,022 Banco Central Hispanoamericano S.A. 3,302,502 5,059,220 0.0
--------------- --------------- ------
16,276,705 19,614,585 0.2
Energy & Petroleum 212,500 Repsol S.A. (ADR)++++ (USD) 6,126,375 8,898,438 0.1
Engineering & 47,786 Fomento de Construciones y
Construction Contratas S.A. 3,947,853 4,659,814 0.0
<PAGE>
Insurance 30,000 Mapfre S.A. 1,130,028 1,571,595 0.0
3,389 Mapfre S.A. (New Shares) 142,730 172,896 0.0
--------------- --------------- ------
1,272,758 1,744,491 0.0
Manufacturing 173,000 ++Grupo Fosforera Espanola S.A. 1,501,871 379,100 0.0
Real Estate 26,708 Immobiliaria Metropolitana Vasco
Central S.A. 779,728 963,851 0.0
Toll Roads 154,000 Autopista Concesionaria Espanola
S.A. (ACESA) 1,363,246 1,782,237 0.0
Utilities--Electric 391,800 Iberdrola I S.A. 2,221,161 4,426,967 0.0
Total Common Stocks in Spain 33,489,697 42,469,483 0.3
Sweden Appliances 232,464 Electrolux AB 'B' Free 11,264,721 13,340,407 0.1
Automotive & 43,916 Scania AB (Warrants) (a) 60,444 45,084 0.0
Equipment
Industrial 159,885 SKF AB 'A' 2,968,566 3,313,309 0.0
Insurance 657,993 Skandia Forsakring AB Free 16,632,653 19,047,939 0.2
Metals/Steel 887,529 Avesta Sheffield AB 8,590,616 8,828,319 0.1
Multi-Industry 43,916 Investor AB (B Shares) 1,083,977 1,920,957 0.0
262,083 Svedala Industri AB Free 3,441,716 4,812,849 0.0
--------------- --------------- ------
4,525,693 6,733,806 0.0
Paper & Forest 609,900 Mo och Domsjo AB (Class B) 16,502,175 18,239,055 0.2
Products 1,110,275 Stora Kopparbergs Bergslags AB 13,078,920 15,362,474 0.1
--------------- --------------- ------
29,581,095 33,601,529 0.3
Pharmaceuticals 202,702 Pharmacia & Upjohn, Inc. 6,186,415 5,842,078 0.0
Real Estate 83,000 Tornet Fastighets AB 550,422 899,700 0.0
Total Common Stocks in Sweden 80,360,625 91,652,171 0.7
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Shares Value Percent of
COUNTRY Industries Held Common Stocks Cost (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C>
Switzerland Conglomerates 301,993 ++Oerlikon-Buehrle Holding Ltd. $ 32,057,825 $ 29,932,775 0.2%
Electronic 69,850 Societe Suisse pour la
Components Microelectronique et l'Horlogerie
AG (Registered) 9,809,595 9,246,945 0.1
Financial Services 161,250 CS Holdings AG (Registered) 16,265,304 18,172,098 0.1
Machinery 12,841 ++Saurer AG (Registered) 5,824,131 6,729,974 0.1
Photographic 12,273 Fotolabo S.A. 5,097,333 4,024,344 0.0
Services
Total Common Stocks in Switzerland 69,054,188 68,106,136 0.5
United Banking 884,956 National Westminster Bank PLC 9,683,612 10,491,330 0.1
Kingdom
Beverages 1,451,980 Cadbury Schweppes PLC 11,384,259 12,073,039 0.1
Chemicals 853,450 Imperial Chemical Industries PLC 10,261,224 9,715,880 0.1
1,470,000 Inspec Group PLC 4,431,923 4,583,578 0.0
--------------- --------------- ------
14,693,147 14,299,458 0.1
Computers 436,453 Misys PLC 5,613,530 8,718,236 0.1
Conglomerates 6,250 Hanson PLC (ADR)++++ (USD) 353,583 151,563 0.0
Consumer--Goods 1,117,550 Unilever Capital Corp. PLC 21,408,324 29,419,548 0.2
Energy & Related 6,250 ++Energy Group PLC 226,417 196,094 0.0
Environmental 1,140,000 Waste Management International
PLC (ADR)++++ (USD) 10,743,772 8,977,500 0.1
Food & Beverage 1,314,814 Allied Domecq PLC 9,110,909 9,288,372 0.1
1,815,022 Grand Metropolitan PLC 12,099,536 15,180,118 0.1
35,000 Grand Metropolitan PLC (ADR)++++
(USD) 1,031,100 1,198,750 0.0
631,110 Matthew Clark PLC 6,157,510 2,900,531 0.0
--------------- --------------- ------
28,399,055 28,567,771 0.2
<PAGE>
Holding Company 1,400,688 BTR PLC 5,740,749 5,732,288 0.0
Insurance 1,200,000 Prudential Corp. PLC 7,670,325 11,673,312 0.1
Manufacturing-- 4,731,768 LucasVarity PLC 15,226,664 14,369,812 0.1
Automotive
Supplies
Pharmaceuticals 1,245,947 Glaxo Wellcome PLC 17,553,501 24,544,059 0.2
500,000 SmithKline Beecham Corp. PLC
(ADR)++++ 11,603,072 40,312,500 0.3
--------------- --------------- ------
29,156,573 64,856,559 0.5
Retail/Food 8,235,525 Asda Group PLC 15,096,762 15,380,666 0.2
2,604,000 Tesco PLC 11,166,028 15,139,448 0.1
--------------- --------------- ------
26,262,790 30,520,114 0.3
Steel 1,500,000 British Steel PLC 4,081,599 3,459,120 0.0
Telecommuni- 1,958,633 Cable & Wireless International PLC 13,352,052 15,113,030 0.1
cations 2,290,000 ++Ionica PLC (r) 10,286,966 10,227,140 0.1
2,290,000 Ionica PLC (Warrants) (a)(r) 0 3,719 0.0
--------------- --------------- ------
23,639,018 25,343,889 0.2
Tobacco 12,500 Imperial Tobacco Group PLC (ADR)++++
(USD) 238,391 160,938 0.0
Utilities--Water 1,703,000 Southwest Water PLC 13,068,875 18,965,596 0.1
Total Common Stocks in the United
Kingdom 227,590,683 287,976,167 2.2
United Apparel 700,000 ++Fruit of the Loom, Inc. 18,572,062 25,200,000 0.2
States 100,000 Liz Claiborne, Inc. 2,016,276 4,525,000 0.0
--------------- --------------- ------
20,588,338 29,725,000 0.2
Automobiles 165,308 Ford Motor Company 4,906,268 5,744,453 0.0
150,000 General Motors Corp. 5,691,925 8,681,250 0.1
--------------- --------------- ------
10,598,193 14,425,703 0.1
Automotive 473,500 ++Collins & Aikman Group Inc. 3,385,918 4,498,250 0.0
<PAGE>
Banking 300,000 Bank of New York Company, Inc. (The) 3,992,662 11,850,000 0.1
129,500 Banknorth Group, Inc. 1,865,422 5,471,375 0.0
30,000 Barnett Banks Inc. 608,400 1,466,250 0.0
707,100 CoreStates Financial Corp. 22,202,461 35,796,938 0.3
350,000 First Chicago NBD Corporation 10,902,245 19,687,500 0.2
1,100,000 First Commerce Corp. 27,923,550 44,550,000 0.3
95,800 First of America Bank 3,453,048 6,370,700 0.0
1,000,000 KeyCorp 29,384,748 52,125,000 0.4
707,900 Mellon Bank Corp. 26,963,500 58,844,188 0.4
220,000 Onbancorp, Inc. 5,700,920 10,697,500 0.1
441,600 Oriental Financial Group 9,715,200 10,156,800 0.1
800,000 Republic New York Corp. 35,800,613 73,300,000 0.6
375,000 Roosevelt Financial Group, Inc. 6,070,347 8,625,000 0.1
400,000 Southern National Corp. 7,717,728 15,700,000 0.1
--------------- --------------- ------
192,300,844 354,641,251 2.7
Business Data 1,523,700 ++Information Resources, Inc.+++ 18,051,787 20,189,025 0.2
Systems
Chemicals 100,000 The Geon Company 2,159,282 2,187,500 0.0
3,571 Millennium Chemicals Inc. 116,556 63,385 0.0
--------------- --------------- ------
2,275,838 2,250,885 0.0
Computer Software 225,000 Boole & Babbage, Inc. 1,329,492 4,612,500 0.0
2,400,000 ++Borland International Corp.+++ 33,535,053 16,350,000 0.2
--------------- --------------- ------
34,864,545 20,962,500 0.2
Computer Software 240,000 Electronic Data Systems Corp. 9,927,011 8,010,000 0.1
Services
Computers & 200,000 ++Bay Networks Inc. 3,962,000 3,550,000 0.0
Technology 614,300 ++FileNet Corporation 8,153,432 6,680,513 0.1
1,100,000 ++Stratus Computer, Inc. 20,995,957 42,762,500 0.3
1,100,000 ++Unisys Corp. 12,291,367 6,600,000 0.1
--------------- --------------- ------
45,402,756 59,593,013 0.5
Construction & 103,800 Centex Corp. 2,639,618 3,736,800 0.0
Housing 500,000 ++K. Hovnanian Enterprises, Inc.
(Class A) 4,920,209 3,281,250 0.0
--------------- --------------- ------
7,559,827 7,018,050 0.0
Construction 700,000 TJ International, Inc. 12,547,379 15,400,000 0.1
Products
Consumer-- 400,000 ++Department 56, Inc. 8,951,325 7,500,000 0.1
Miscellaneous
<PAGE>
Consumer Products 147,200 Tupperware Corporation 4,460,952 4,894,400 0.0
Containers 1,008,000 Stone Container Corporation 12,596,036 10,206,000 0.1
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Shares Value Percent of
COUNTRY Industries Held Common Stocks Cost (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C>
United Electronics 1,750,000 Checkpoint Systems, Inc.+++ $ 19,246,560 $ 24,062,500 0.2%
States 88,600 Harris Corp. 5,200,236 7,575,300 0.0
(continued) 711,200 ++MEMC Electronic Materials, Inc. 14,904,748 19,469,100 0.2
1,200,000 ++Silicon Valley Group, Inc. 21,598,334 24,600,000 0.2
100,000 ++VLSI Technology, Inc. 1,093,772 1,975,000 0.0
--------------- --------------- ------
62,043,650 77,681,900 0.6
Energy & Petroleum 163,900 Ashland Coal, Inc. 4,132,919 4,363,838 0.0
49,500 Cabot Oil & Gas Corp. (Class A) 529,030 829,125 0.0
100,000 Chevron Corp. 5,307,000 6,850,000 0.1
46,400 Mitchell Energy Development Corp.
(Class A) 675,717 881,600 0.0
174,350 Mitchell Energy Development Corp.
(Class B) 2,755,451 3,334,444 0.0
125,000 Mobil Corp. 9,757,153 16,250,000 0.1
50,000 Murphy Oil Corp. 1,688,446 2,175,000 0.0
1,500,000 Occidental Petroleum Corp. 28,058,743 33,187,500 0.3
61,200 Pennzoil Co. 3,775,844 3,014,100 0.0
235,828 ++Plains Resources, Inc. 1,381,815 3,036,285 0.0
1,094,247 ++Santa Fe Energy Resources, Inc. 10,119,883 15,456,239 0.1
211,514 Transamerica Refining Corp.
(Warrants) (a) 531,220 423,028 0.0
2,000,000 ++TransTexas Gas Corp. 23,788,082 28,000,000 0.2
600,000 USX-Marathon Group 10,542,976 16,575,000 0.2
--------------- --------------- ------
103,044,279 134,376,159 1.0
Financial 1,600,000 Long Beach Finance Corp. 10,400,000 10,800,000 0.1
Services
Food & Tobacco 270,000 Philip Morris Companies, Inc. 4,642,974 10,631,250 0.1
212,462 RJR Nabisco, Inc. 5,842,716 6,320,744 0.0
--------------- --------------- ------
10,485,690 16,951,994 0.1
Forestry 14,285 Deltic Timber Corporation 211,274 362,482 0.0
<PAGE>
Gaming 1,235,000 ++Scientific Games Holdings
Corp. (c)+++ 27,568,304 27,170,000 0.2
Healthcare 360,000 ++Advocat, Inc.+++ 3,422,500 3,465,000 0.0
Services 90,000 Allegiance Corporation 760,858 1,991,250 0.0
450,000 Baxter International, Inc. 9,088,023 21,543,750 0.2
1,600,000 ++Beverly Enterprises, Inc. 18,056,405 23,200,000 0.2
700,000 ++Humana, Inc. 13,206,455 15,225,000 0.1
1,589,100 ++Transitional Hospitals Corp. 13,254,793 15,891,000 0.1
185,600 United Healthcare Corporation 6,009,630 9,024,800 0.1
1,225,740 US Surgical Corp. 27,641,430 41,981,595 0.3
--------------- --------------- ------
91,440,094 132,322,395 1.0
Home Appliance 67,300 Singer Co. 1,877,479 1,245,050 0.0
Hotel/Leisure 114,000 ++ITT Corp. 4,221,738 6,754,500 0.0
Industrial 200,000 American Standard, Inc. 6,011,000 8,375,000 0.1
915,000 BW/IP Holdings, Inc. 15,816,387 14,868,750 0.1
15,000 Bar Technologies Ltd. (Warrants) (a) 838,256 675,000 0.0
179,802 Cooper Industries, Inc. 6,534,892 8,270,892 0.1
112,500 Crane Co. 2,691,213 4,204,687 0.0
2,830,246 ++Crown Packaging Holdings Ltd. 1,433,657 28,302 0.0
150,000 Millipore Corporation 5,280,930 5,662,500 0.0
--------------- --------------- ------
38,606,335 42,085,131 0.3
Insurance 550,000 ACE, Ltd. 14,859,347 33,000,000 0.2
210,000 Aetna Inc. 11,837,035 19,136,250 0.2
510,000 American General Corp. 13,187,448 22,248,750 0.2
571,000 Horace Mann Educators, Inc. 13,654,588 26,765,625 0.2
114,000 ITT Hartford Group Inc. 4,188,594 8,493,000 0.0
640,200 Lincoln National Corp. 23,466,317 35,851,200 0.3
350,000 PartnerRe Holdings, Ltd. 6,790,237 11,768,750 0.1
1,927,500 ++Risk Capital Holdings Inc.+++ 33,900,906 35,899,687 0.3
--------------- --------------- ------
121,884,472 193,163,262 1.5
Machinery/ 166,800 AGCO Corp. 3,363,402 4,315,950 0.0
Agricultural
Manufacturing 200,000 ITT Industries Inc. 4,175,065 5,050,000 0.0
Metals 305,000 Aluminum Co. of America 13,814,815 21,311,875 0.2
1,350,000 Lukens Inc.+++ 25,689,657 25,818,750 0.2
750,000 ++National Steel Corp. 6,785,661 7,406,250 0.0
560,000 Nucor Corporation 25,394,845 27,860,000 0.2
132,800 Reynolds Metals Co. 5,801,771 9,013,800 0.1
--------------- --------------- ------
77,486,749 91,410,675 0.7
<PAGE>
Multi-Industry 90,000 Loews Corp. 3,984,675 8,268,750 0.1
Multimedia & 512,800 ++U S West Media Group 7,933,766 8,845,800 0.1
Telecommunications
Natural Resources 349,765 ++Alumax, Inc. 7,240,312 12,766,422 0.1
210,519 Freeport-McMoRan Copper & Gold Inc.
(Class B) 3,665,657 6,131,366 0.0
--------------- --------------- ------
10,905,969 18,897,788 0.1
Oil Services 100,000 ++Diamond Offshore Drilling Inc. 5,150,000 6,437,500 0.1
3,870,125 ++Noble Drilling Corp. 28,502,950 67,243,422 0.5
600,000 ++Parker Drilling Company 4,800,000 4,650,000 0.0
100,000 Tidewater Inc. 3,404,066 4,012,500 0.0
150,000 ++Western Atlas, Inc. 9,013,408 9,300,000 0.1
--------------- --------------- ------
50,870,424 91,643,422 0.7
Pharmaceuticals/ 250,000 ++Alteon, Inc. 1,968,199 843,750 0.0
Biotechnology 150,000 American Home Products Corporation 6,263,569 9,937,500 0.1
240,000 Bristol-Myers Squibb Co. 6,239,877 15,720,000 0.1
255,000 Merck & Co., Inc. 11,338,559 23,077,500 0.2
--------------- --------------- ------
25,810,204 49,578,750 0.4
Photography 160,000 Eastman Kodak Co. 8,746,145 13,360,000 0.1
Publishing 175,000 Gannett Co., Inc. 8,375,486 15,268,750 0.1
301,500 New York Times Co. (Class A) 7,158,778 13,039,875 0.1
350,000 Reader's Digest Association, Inc.
(Class A) 8,229,300 8,050,000 0.1
--------------- --------------- ------
23,763,564 36,358,625 0.3
Real Estate 1,464,472 Catellus Development Corp. 12,934,605 21,600,962 0.2
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Shares Value Percent of
COUNTRY Industries Held Common Stocks Cost (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C>
United Real Estate 730,000 Ambassador Apartments Inc. $ 11,272,615 $ 17,793,750 0.2%
States Investment Trusts 661,300 Mid-America Realty Investments+++ 6,444,676 6,530,337 0.1
(concluded) 100,000 Mid-Atlantic Realty Trust Co. 917,500 1,112,500 0.0
1,439,825 Prime Retail, Inc.+++ 15,462,587 17,457,878 0.1
400,000 Taubman Centers, Inc. 3,641,641 5,050,000 0.0
920,000 Walden Residential Properties, Inc.
(Warrants) (a)+++ 1,125,068 1,035,000 0.0
--------------- --------------- ------
38,864,087 48,979,465 0.4
Restaurants 1,500,000 ++Brinker International, Inc. 16,515,025 17,437,500 0.2
500,000 ++Buffets, Inc. 5,071,633 3,812,500 0.0
2,100,000 Darden Restaurants Inc. 15,622,713 16,275,000 0.1
--------------- --------------- ------
37,209,371 37,525,000 0.3
Retail Stores 608,500 Baker (J.), Inc. 10,187,765 4,639,812 0.0
516,900 ++Buttrey Food & Drug Stores Co.+++ 4,084,486 4,070,587 0.0
1,110,000 ++Filene's Basement Corp.+++ 10,092,619 6,521,250 0.1
700,000 The Limited, Inc. 12,951,591 12,687,500 0.1
1,373,500 ++Payless Cashways, Inc. 17,027,625 2,403,625 0.0
400,000 Sotheby's Holdings, Inc. (Class A) 4,879,559 6,350,000 0.1
830,000 ++Toys 'R' Us, Inc. 19,568,284 23,655,000 0.2
--------------- --------------- ------
78,791,929 60,327,774 0.5
Savings Banks 257,500 Bankers Corp. 1,552,137 6,373,125 0.1
100,000 Dime Bancorp, Inc. 678,672 1,612,500 0.0
309,330 Downey Savings & Loan Association 2,896,670 5,993,269 0.0
1,033,000 ++Glendale Federal Savings Bank 13,979,157 25,695,875 0.2
770,194 Glendale Federal Savings Bank
(Warrants) (a) 0 10,301,345 0.1
--------------- --------------- ------
19,106,636 49,976,114 0.4
Telecommunications 776,000 ++360 Communication Company 12,204,420 13,483,000 0.1
2,200,000 AT&T Corp. 74,332,525 73,700,000 0.6
1,150,000 ++AirTouch Communications, Inc. 26,333,847 29,325,000 0.2
27,750 American Telecasting Inc.
(Warrants) (a) 0 2,775 0.0
400,000 ++Brooks Fiber Properties, Inc. 6,652,484 8,700,000 0.1
1,015,000 ++CAI Wireless Systems Inc. 2,832,188 1,712,812 0.0
30,662 ++CS Wireless Systems, Inc. 123,667 307 0.0
1,625,800 CellNet Data Systems, Inc. 15,370,867 12,193,500 0.1
185,700 Comsat Corp. 4,308,767 3,853,275 0.0
800,000 ++DSC Communications Corp. 12,249,518 16,300,000 0.1
500,000 Frontier Corporation 8,023,581 7,937,500 0.1
104,500 GTE Corp. 3,514,166 4,793,937 0.0
1,805,000 ++Geotek Communications, Inc. 11,660,144 6,768,750 0.1
3,000,000 Geotek Communications, Inc.
(Warrants) (a)(q) 14,200,634 1,269,000 0.0
1,600,000 ++Glenayre Technologies, Inc. 21,915,406 15,800,000 0.1
500,000 ++Nextel Communications Inc. 6,892,754 6,562,500 0.0
1,494,400 ++PLD Telekom Inc. 9,471,997 7,658,800 0.1
180,000 SBC Communications Inc. 8,015,735 9,990,000 0.1
47,000 United USN Inc. (Warrants) (a)(q) 5,840,131 5,687,000 0.0
1,255,000 ++Western Wireless Corporation 15,610,218 12,863,750 0.1
18,315 Wireless One, Inc. (Warrants) (a) 18,315 9,157 0.0
--------------- --------------- ------
259,571,364 238,611,063 1.8
<PAGE>
Textiles 2,825,200 ++Burlington Industries, Inc.+++ 37,451,653 28,958,300 0.2
Transportation 900,000 J.B. Hunt Transport Services, Inc. 12,600,052 12,375,000 0.1
Utilities-- 1,250,000 Allegheny Power System, Inc. 27,315,551 32,812,500 0.3
Electric & Gas 115,650 Atmos Energy Corp 1,445,257 2,616,581 0.0
47,570 ++BayCorp Holdings, Ltd. 2,549,753 344,882 0.0
125,000 CMS Energy Corp. 2,290,025 3,968,750 0.0
1,101,000 Centerior Energy Corp. 12,953,094 11,010,000 0.1
300,000 Central and South West Corporation 5,595,149 6,037,500 0.0
100,000 Consolidated Edison Company, Inc. 2,923,495 2,775,000 0.0
4,512,285 ++El Paso Electric Company+++ 23,689,496 28,483,799 0.2
1,780,000 Entergy Corp. 47,516,856 41,607,500 0.3
475,000 FPL Group, Inc. 14,363,265 21,196,875 0.2
600,000 Houston Industries, Inc. 11,533,050 12,000,000 0.1
1,500,000 ++Niagara Mohawk Power Corp. 23,789,306 12,750,000 0.1
1,144,600 Texas Utilities Co. 36,647,663 38,630,250 0.3
1,148,800 Unicom Corporation 27,549,620 24,986,400 0.2
--------------- --------------- ------
240,161,580 239,220,037 1.8
Waste Disposal 646,900 WMX Technologies, Inc. 16,148,443 19,002,687 0.2
Total Common Stocks in the United
States 1,825,173,747 2,286,533,112 17.5
Total Investments in Common Stocks 3,649,416,185 4,312,574,638 33.1
Equity Closed-End Funds
Austria Financial Services 320,000 Austria Fund (USD) 2,642,432 2,840,000 0.0
Total Equity Closed-End Funds in
Austria 2,642,432 2,840,000 0.0
Europe Financial Services 166,666 European Warrant Fund (USD) 1,363,723 2,395,824 0.0
Total Equity Closed-End Funds
in Europe 1,363,723 2,395,824 0.0
Indonesia Financial Services 25,600 ++Jakarta Growth Fund (USD) 158,080 224,000 0.0
Total Equity Closed-End Funds in
Indonesia 158,080 224,000 0.0
Ireland Financial Services 150,000 Irish Investment Fund, Inc. (USD) 1,086,041 2,231,250 0.0
Total Equity Closed-End Funds in
Ireland 1,086,041 2,231,250 0.0
<PAGE>
Italy Financial Services 150,000 Italy Fund (USD) 1,198,520 1,331,250 0.0
Total Equity Closed-End Funds
in Italy 1,198,520 1,331,250 0.0
Portugal Financial Services 39,500 ++Capital Portugal Fund 2,052,116 4,974,983 0.1
40,000 Portugal Fund (USD) 360,368 620,000 0.0
Total Equity Closed-End Funds in
Portugal 2,412,484 5,594,983 0.1
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Shares Value Percent of
COUNTRY Industries Held Equity Closed-End Funds Cost (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C>
South Financial Services 200,000 ++Korea Equity Fund (USD) $ 1,369,598 $ 1,250,000 0.0%
Korea 1,280,528 Korea Fund, Inc. (USD) 18,311,163 16,486,798 0.2
200,000 ++Korean Investment Fund, Inc. (USD) 1,561,000 1,425,000 0.0
125,000 ++The Fidelity Advisor Korea Fund
(USD) 1,088,750 984,375 0.0
Total Equity Closed-End Funds in
South Korea 22,330,511 20,146,173 0.2
Spain Financial Services 300,100 Growth Fund of Spain, Inc. (USD) 2,630,827 3,901,300 0.0
Total Equity Closed-End Funds in
Spain 2,630,827 3,901,300 0.0
Total Investments in Equity Closed-
End Funds 33,822,618 38,664,780 0.3
Preferred Stocks
Australia Publishing 600,000 The News Corporation Ltd.
(ADR)++++ (USD) 10,451,056 9,075,000 0.1
Total Preferred Stocks in Australia 10,451,056 9,075,000 0.1
Germany Chemicals 494,411 Henkel KGaA 20,929,927 26,836,028 0.2
Multi-Industry 450,000 RWE AG 8,725,424 15,122,993 0.1
Total Preferred Stocks in Germany 29,655,351 41,959,021 0.3
<PAGE>
Japan Consumer Products 50,000 Amway Japan Limited ($1.44 Premium
Exchangeable Participating Shares)
(USD) 721,750 806,250 0.0
Total Preferred Stocks in Japan 721,750 806,250 0.0
New Financial NZD 3,085,700 Brierly Investments, Ltd. (9%
Zealand Services Convertible) 1,988,414 2,630,599 0.0
Total Preferred Stocks in New Zealand 1,988,414 2,630,599 0.0
Norway Financial 175,000 A/S Eksportfinans (8.70% Convertible)
Services (USD) 4,377,500 4,637,500 0.0
Total Preferred Stocks in Norway 4,377,500 4,637,500 0.0
Portugal Banking 460,000 BCP International Bank (8%
Convertible) (USD) 22,964,850 26,335,000 0.2
Total Preferred Stocks in Portugal 22,964,850 26,335,000 0.2
Spain Banking 225,000 Santander Overseas Bank (8%
Convertible, Series D) (USD) 5,463,250 5,653,125 0.0
Total Preferred Stocks in Spain 5,463,250 5,653,125 0.0
United Retail Stores 545,000 ++Signet Group (Convertible)
Kingdom (ADR)++++ (USD) 2,194,907 8,720,000 0.1
Total Preferred Stocks in the
United Kingdom 2,194,907 8,720,000 0.1
United Banking 55,000 California Federal Bank (10.625%) 5,500,000 5,885,000 0.0
States 970,000 California Federal Bank (Series A) 24,235,500 24,371,250 0.2
--------------- --------------- ------
29,735,500 30,256,250 0.2
Cable Television 1,000,000 ++Diva Systems Corp. (Convertible,
Series C) (r) 8,410,000 9,500,000 0.1
Containers 800 Stone Container Corp. 10,440 10,900 0.0
Energy & Petroleum 150,000 ++Grant Tensor Corp.
(9.75% Convertible) 1,853,375 131,250 0.0
64,219 Santa Fe Energy Resources, Inc.
(7% Convertible) 954,075 1,661,667 0.0
460,000 Santa Fe Energy Resources, Inc.
(Convertible, Class A) 4,082,500 5,347,500 0.0
--------------- --------------- ------
6,889,950 7,140,417 0.0
<PAGE>
Natural Resources 150,000 Cyprus Amax Minerals Co.
(Convertible, Series A) 9,188,313 8,181,000 0.1
348,700 Freeport-McMoRan Copper & Gold,
Inc. (Convertible) 7,918,834 9,414,900 0.1
219,000 Freeport-McMoRan Inc. (Convertible
--Gold) 7,703,330 6,871,125 0.0
--------------- --------------- ------
24,810,477 24,467,025 0.2
Paper & Forest 200,000 Boise Cascade Corp. (Convertible,
Products Series G) 4,225,000 5,350,000 0.0
288,200 James River Corp. of Virginia (9%
Convertible, Series P) 4,971,450 7,997,550 0.1
--------------- --------------- ------
9,196,450 13,347,550 0.1
Real Estate 295,961 Catellus Development Corp. (7.25%
Exchangeable, Series B) (q) 13,336,645 21,686,542 0.2
139,200 First Union Real Estate Investments
(Convertible) 3,480,000 6,333,600 0.1
--------------- --------------- ------
16,816,645 28,020,142 0.3
Real Estate 350,000 National Health Investors, Inc.
Investment Trusts (8.50% Convertible) 8,750,000 11,550,000 0.1
810,500 Prime Retail, Inc. (10.50%) 18,691,161 19,553,312 0.2
753,000 Walden Residential Properties, Inc.
(9.20%, Series S)+++ 17,994,636 18,825,000 0.1
--------------- --------------- ------
45,435,797 49,928,312 0.4
Savings Banks 619,900 Glendale Federal Savings Bank
(8.75% Convertible, Series E) 15,070,337 38,201,337 0.3
Total Preferred Stocks in the
United States 156,375,596 200,871,933 1.6
Total Investments in Preferred
Stocks 234,192,674 300,688,428 2.3
<CAPTION>
Currency Face
Denomination Amount Fixed-Income Securities
<S> <S> <S> <C> <S> <C> <C> <C>
Argentina Banking Banco Rio de la Plata:
USD 45,000,000 8.75% due 12/15/2003 36,900,950 45,562,500 0.4
USD 30,000,000 (Class 3), 8.50% due 7/15/1998 30,225,000 30,337,500 0.2
--------------- --------------- ------
67,125,950 75,900,000 0.6
<PAGE>
Government USD 42,000,000 City of Buenos Aires, 11.25% due 41,685,000 43,837,500 0.3
Obligations 4/11/2007 (q)
Republic of Argentina (s):
USD 85,360,000 Floating Rate Bonds, Series L,
6.75% due 3/31/2005 (d) 54,638,888 78,206,832 0.6
USD 145,000,000 Floating Rate Discount Notes,
6.375% due 3/31/2023 106,229,986 119,799,000 0.9
USD 280,000,000 Par 'L' Bonds, 5.50% due 3/31/2023 138,821,163 182,336,000 1.4
--------------- --------------- ------
341,375,037 424,179,332 3.2
Total Fixed-Income Securities in
Argentina 408,500,987 500,079,332 3.8
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Currency Face Value Percent of
COUNTRY Industries Denomination Amount Fixed-Income Securities Cost (Note 1a) Net Assets
<S> <S> <S> <C> <S> <C> <C> <C>
Brazil Government USD 35,000,000 Brazil Exit Bonds, 6% due
Obligations 9/15/2013 (s) $ 19,816,334 $ 25,592,000 0.2%
USD 29,580,000 Republic of Brazil, Floating Rate
Bonds, 6.687% due 1/01/2001 (d) 22,997,363 28,988,400 0.2
--------------- --------------- ------
42,813,697 54,580,400 0.4
Natural USD 5,000,000 Companhia Vale Do Rio
Resources Doce, 10% due 4/02/2004 (q) 4,993,860 5,212,500 0.1
Total Fixed-Income Securities in
Brazil 47,807,557 59,792,900 0.5
Canada Cable/ CAD 7,545,000 Rogers Cablesystem Inc., 9.65% due
Telle- 1/15/2014 4,397,424 5,076,081 0.0
communi- CAD 5,000,000 Rogers Communications Inc.,
cations Convertible Bonds, 7.50% due
9/01/1999 3,394,000 3,417,549 0.0
--------------- --------------- ------
7,791,424 8,493,630 0.0
Chemicals USD 21,300,000 Acetex Corporation, 9.75% due
10/01/2003 20,912,721 21,087,000 0.2
<PAGE>
Hotel/ USD 21,000,000 Four Seasons Hotel, Inc., 9.125%
Leisure due 7/01/2000 (q) 20,917,750 21,498,750 0.2
Natural USD 17,000,000 Sifto Canada, Inc., 8.50%
Resources due 7/15/2000 16,875,188 16,872,500 0.1
Paper & CAD 2,000,000 MacMillan Bloedel Limited,
Forest Convertible Bonds, 5% due 5/01/2007 1,024,416 1,216,719 0.0
Products
Real CAD 16,501,370 First Place Tower, Inc., 10.28% due
Estate 12/15/2015 (e) 26,246,648 26,277,947 0.2
Total Fixed-Income Securities in
Canada 93,768,147 95,446,546 0.7
France Auto- FRF 5,500 Peugeot S.A., Convertible Bonds, 2%
mobiles due 1/01/2001 992,341 1,047,888 0.0
Banking ECU 2,000,000 Credit Local de France, 0% due
10/16/2001 (b) 1,925,121 1,782,683 0.0
FRF 58,000 Societe Generale, Convertible Bonds,
3.50% due 1/01/2000 7,499,838 7,920,158 0.1
--------------- --------------- ------
9,424,959 9,702,841 0.1
Government ECU 36,000,000 Government of France OAT, 8.25% due
Obligations 4/25/2022 41,585,918 46,454,256 0.4
Industrial FRF 30,000 Alcatel Alsthom, Convertible Bonds,
2.50% due 1/01/2004 3,926,887 4,780,262 0.0
Insurance FRF 35,500 Finaxa, Convertible Bonds, 3% due
1/01/2001 9,060,172 10,431,337 0.1
Multi- FRF 8,713 Compagnie Generale des Eaux,
Industry Convertible Bonds, 6% due 1/01/1998 4,859,722 5,280,990 0.0
Total Fixed-Income Securities in
France 69,849,999 77,697,574 0.6
Germany Banking DEM 2,310,000 Commerzbank AG, Floating Rate
Convertible Bonds, 0% due
6/15/2001 (b) 1,556,456 2,821,140 0.0
USD 5,000,000 Landes Kredit Bank, 7.875% due
4/15/2004 4,972,067 5,248,850 0.0
--------------- --------------- ------
6,528,523 8,069,990 0.0
<PAGE>
Building USD 41,100,000 Tarkett AG, 9% due 3/01/2002 39,413,750 41,716,500 0.3
Materials
Financial USD 5,875,000 Veba International Finance (with
Services Warrants), 6% due 4/06/2000 (a) 2,965,841 5,698,750 0.0
Government Bundesrepublik Deutscheland:
Obliga- DEM 31,000,000 5.75% due 8/20/1998 22,444,131 18,415,106 0.1
tions DEM 395,500,000 7.375% due 1/03/2005 272,022,999 253,953,112 2.0
DEM 158,000,000 6.25% due 1/04/2024 94,342,084 87,128,999 0.7
--------------- --------------- ------
388,809,214 359,497,217 2.8
Government DEM 64,000,000 Baden-Wuerttemberg, 6.20% due
Obligations 11/22/2013 37,148,769 38,082,920 0.3
--Regional DEM 55,000,000 Freie Hansestadt Hamburg, 6.08%
due 11/29/2018 31,730,765 32,139,970 0.2
DEM 170,500,000 Land Hessen, 6% due 11/29/2013 98,586,862 100,519,979 0.8
DEM 110,000,000 Mecklenberg-Vorpommern, 6.15% due
6/16/2023 61,012,437 62,946,068 0.5
DEM 134,950,000 Nordrhein-Westfalen, 6.125% due
12/21/2018 77,420,913 79,833,858 0.6
Rheinland-Pfalz:
DEM 33,000,000 5.75% due 2/24/2014 18,324,663 19,131,539 0.2
DEM 64,000,000 6.08% due 11/29/2018 36,935,547 37,768,795 0.3
DEM 47,000,000 Sachsen-Anhalt, 6% due 1/10/2014 26,915,615 27,057,974 0.2
--------------- --------------- ------
388,075,571 397,481,103 3.1
Industrial USD 1,000,000 Siemens Capital Corp. (with Warrants),
8% due 6/24/2002 (a) 1,318,750 1,548,300 0.0
Total Fixed-Income Securities in
Germany 827,111,649 814,011,860 6.2
Hong Kong Banking USD 8,000,000 Bank of East Asia, Convertible Bonds,
2% due 7/19/2003 (n) 9,373,500 8,840,000 0.1
Real USD 4,000,000 Hysan Development Company Limited,
Estate Convertible Bonds, 6.75% due
6/01/2000 (n) 5,180,000 4,310,000 0.0
Total Fixed-Income Securities in
Hong Kong 14,553,500 13,150,000 0.1
India Chemicals USD 11,500,000 Indian Petrochemicals Ltd., 2.50% due
3/11/2002 (q) 11,884,062 11,845,000 0.1
USD 11,450,000 Reliance Industries Limited,
Convertible Bonds, 3.50% due
11/03/1999 11,808,875 12,709,500 0.1
<PAGE>
Total Fixed-Income Securities in India 23,692,937 24,554,500 0.2
Indonesia Paper & USD 19,500,000 APP International Finance, 11.75%
Forest due 10/01/2005 19,500,000 20,475,000 0.2
Products RAPP International Finance Company
B.V.:
USD 3,250,000 11.50% due 12/15/2000 3,220,165 3,315,000 0.0
USD 24,750,000 13.25% due 12/15/2005 24,090,165 25,368,750 0.2
Total Fixed-Income Securities in
Indonesia 46,810,330 49,158,750 0.4
Italy Government USD 5,000,000 Republic of Italy, 8.75% due
Obligations 2/08/2001 5,373,050 5,350,005 0.0
USD 32,985,000 Republic of Italy/INA, Convertible
Bonds, 5% due 6/28/2001 32,779,000 32,325,300 0.3
--------------- --------------- ------
38,152,050 37,675,305 0.3
Telecom- ITL 11,500,000,000 Softe SA-LUX, Convertible
munications Bonds, 4.25% due 7/30/1998 7,894,814 14,612,358 0.1
Total Fixed-Income Securities in
Italy 46,046,864 52,287,663 0.4
Japan Banking USD 4,000,000 MBL International Finance, 3% due
11/30/2002 3,905,000 4,060,000 0.0
Beverages JPY 1,268,000,000 Kinki Coca-Cola Bottling Co., Ltd.,
#1 Convertible Bonds, 0.85% due
12/30/2003 11,282,608 9,894,538 0.1
JPY 1,408,000,000 Sanyo Coca-Cola Bottling Inc., #1
Convertible Bonds, 0.90% due
6/30/2003 12,966,065 11,020,288 0.1
JPY 313,000,000 Shikoku Coca-Cola Bottling Co., Ltd.,
#1 Convertible Bonds, 2.40% due
3/29/2002 2,952,968 2,620,052 0.0
--------------- --------------- ------
27,201,641 23,534,878 0.2
Capital JPY 500,000,000 Kawasaki Heavy Industries,
Goods Convertible Bonds, 0.50% due
9/30/1998 4,566,161 4,433,672 0.0
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Currency Face Value Percent of
COUNTRY Industries Denomination Amount Fixed-Income Securities Cost (Note 1a) Net Assets
<S> <S> <S> <C> <S> <C> <C> <C>
Japan Chemicals USD 4,700,000 Shin-Etsu Chemical Co., Ltd.
(concluded) (with Warrants), 3.375% due
8/08/2000 (a) $ 4,676,500 $ 5,604,750 0.0%
Shin-Etsu Chemical Co., Ltd.,
Convertible Bonds:
JPY 148,000,000 #5, 1.30% due 3/31/1999 1,577,446 1,691,495 0.0
JPY 301,000,000 #6, 0.40% due 9/30/2005 2,987,802 3,164,925 0.0
--------------- --------------- ------
9,241,748 10,461,170 0.0
Computers CHF 32,900,000 NEC Corporation, Convertible
Bonds, 1% due 3/31/1999 (n) 31,388,018 32,162,933 0.3
Electrical JPY 988,000,000 Matsushita Electric Works, Ltd.,
Equipment #8 Convertible Bonds, 2.70% due
5/31/2002 9,691,544 10,668,874 0.1
Elec- JPY 650,000,000 Matsushita Electric Industrial Co.,
tronics Ltd., #5 Convertible Bonds, 1.30%
due 3/29/2002 6,133,347 6,455,427 0.1
JPY 548,000,000 Tokyo Electron Limited, #2
Convertible Bonds, 0.90% due
9/30/2003 (n) 5,481,045 6,695,042 0.1
--------------- --------------- ------
11,614,392 13,150,469 0.2
Industrial JPY 1,097,000,000 Sony Corporation, #4 Convertible
Bonds, 1.40% due 3/31/2005 (n) 9,948,095 10,332,742 0.1
<PAGE>
Insurance JPY 456,000,000 Mitsui Marine & Fire Insurance Co.,
Ltd., #3 Convertible Bonds, 0.70%
due 3/31/2003 3,786,983 3,464,838 0.0
JPY 117,000,000 Nichido Fire & Marine Insurance Co.,
Ltd., #5 Convertible Bonds, 1% due
3/31/2003 1,109,381 872,405 0.0
Nisshin Fire & Marine Insurance Co.,
Ltd. Convertible Bonds:
JPY 800,000,000 #1, 0.65% due 3/31/2004 6,412,341 5,675,101 0.0
JPY 1,522,000,000 #2, 0.75% due 3/31/2006 11,925,363 10,796,879 0.1
Sumitomo Marine & Fire Insurance Co.,
Ltd. Convertible Bonds:
JPY 300,000,000 #3, 1.10% due 3/29/2002 2,522,005 2,648,380 0.0
JPY 1,527,000,000 #4, 1.20% due 3/31/2004 13,104,977 13,203,429 0.1
JPY 588,000,000 Yasuda Fire & Marine Insurance Co.,
Ltd., #3 Convertible Bonds, 0.60%
due 3/30/2001 4,903,719 4,416,836 0.0
--------------- --------------- ------
43,764,769 41,077,868 0.2
Pharma- JPY 3,080,000,000 Yamanuchi Pharmaceutical Co., Ltd.,
ceuticals Convertible Bonds, 1.25% due
3/31/2014 (n) 31,516,124 33,137,858 0.3
Total Fixed-Income Securities in Japan 182,837,492 183,020,464 1.4
Malaysia Multi- USD 15,500,000 Renong BHD, Convertible Bonds, 2.50%
Industry due 1/15/2005 17,544,487 17,670,000 0.2
Total Fixed-Income Securities in
Malaysia 17,544,487 17,670,000 0.2
Mexico Government USD 45,150,000 Petroleos Mexicanos, 8.625% due
Obligations 12/01/2023 (r) 25,007,000 36,966,563 0.3
USD 9,434,000 United Mexican States, 8.50% due
9/15/2002 8,615,317 9,398,151 0.1
Total Fixed-Income Securities in Mexico 33,622,317 46,364,714 0.4
New Utilities NZD 1,760,000 Natural Gas Corp. Holdings, Convertible
Zealand --Gas Bonds, 10.50% due 10/14/1997 1,043,960 2,500,705 0.0
Total Fixed-Income Securities in
New Zealand 1,043,960 2,500,705 0.0
Philippines Utilities USD 6,000,000 CE Casecnan, 11.45% due 11/15/2005 5,895,000 6,397,500 0.1
Total Fixed-Income Securities in the
Philippines 5,895,000 6,397,500 0.1
Russia Telecom- USD 74,500,000 PLD Telekom, Inc., 0/14% due 6/01/2004
munications (b)(j)(q) 60,567,384 59,570,200 0.5
USD 18,700,000 PLD Telekom, Inc., Convertible Bonds,
9% due 6/01/2006 (j)(q) 18,756,250 18,404,540 0.1
Total Fixed-Income Securities in Russia 79,323,634 77,974,740 0.6
<PAGE>
Singapore Retail USD 12,000,000 Dairy Farm International Holdings Ltd.
(Convertible Preferred), 6.50% due
5/10/2049 9,525,875 9,240,000 0.1
Ship- USD 2,750,000 Far East Levingston, 1.50% due
building 5/02/2001 2,227,500 2,207,448 0.0
Total Fixed-Income Securities in
Singapore 11,753,375 11,447,448 0.1
South Metals USD 16,250,000 Samancor Ltd., Convertible Bonds, 7%
Africa due 6/30/2004 15,693,500 15,600,000 0.1
Total Fixed-Income Securities in
South Africa 15,693,500 15,600,000 0.1
South Elec- USD 5,250,000 Samsung Electronics Co., Convertible
Korea tronics Bonds, 0.25% due 12/31/2006 (q) 5,250,000 5,906,250 0.0
Energy Ssangyong Oil Refining, Convertible
Related Bonds:
USD 10,685,000 3% due 12/31/2004 7,887,437 6,945,250 0.1
USD 16,535,000 3.75% due 12/31/2008 17,448,950 16,204,300 0.1
--------------- --------------- ------
25,336,387 23,149,550 0.2
Utilities USD 14,860,000 Korea Electric & Power Company, 5%
--Electric due 8/01/2001 14,521,900 14,488,500 0.1
Total Fixed-Income Securities in
South Korea 45,108,287 43,544,300 0.3
Spain Banking USD 10,500,000 Banco Bilbao Vizcaya, S.A. de C.V.,
Convertible Bonds, 3.50% due
7/12/2006 (n) 13,908,600 14,936,250 0.1
Total Fixed-Income Securities in
Spain 13,908,600 14,936,250 0.1
Sweden Industrial ECU 7,000,000 SKF-AB Lyons, Convertible Bonds,
0% due 7/26/2002 (b) 6,235,574 5,123,300 0.0
Total Fixed-Income Securities in
Sweden 6,235,574 5,123,300 0.0
Switzerland Chemicals CHF 1,401,000 Ciba-Geigy AG, Convertible Bonds, 2%
due 8/09/1998 1,178,587 3,260,440 0.0
USD 24,945,000 Ciba-Geigy Corp., Convertible Bonds,
6.25% due 3/15/2016 25,632,050 25,319,175 0.2
Total Fixed-Income Securities in
Switzerland 26,810,637 28,579,615 0.2
<PAGE>
United Cable/ USD 43,250,000 Bell Cablemedia PLC, 0/11.875% due
Kingdom Telecom- 9/15/2005 (b) 29,099,057 35,248,750 0.3
munica- USD 21,500,000 Comcast UK Cable Partners Ltd.,
tions 0/11.20% due 11/15/2007 (b) 13,678,604 14,781,250 0.1
Diamond Cable Communications
Co. (b):
USD 29,600,000 0/11.75% due 12/15/2005 19,740,441 20,313,000 0.2
USD 36,500,000 0/10.75% due 2/15/2007 (q) 21,427,695 21,717,500 0.2
--------------- --------------- ------
83,945,797 92,060,500 0.8
Financial GBP 11,600,000 TransAtlantic Holdings PLC,
Services Convertible Bonds, 5.50% due
4/30/2009 14,179,895 18,273,248 0.1
Food & GBP 13,000,000 Allied-Lyons PLC, Convertible
Beverage Bonds, 6.75% due 7/07/2008 20,190,363 20,320,300 0.2
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Currency Face Value Percent of
COUNTRY Industries Denomination Amount Fixed-Income Securities Cost (Note 1a) Net Assets
<S> <S> <S> <C> <S> <C> <C> <C>
United Government GBP 20,000,000 United Kingdom Treasury Gilt, 9.50%
Kingdom Obligations due 10/25/2004 $ 37,627,645 $ 36,572,480 0.3%
(concluded)
Industrial USD 4,655,000 HIH Capital Ltd., Convertible Bonds
(Bearer), 7.50% due 9/25/2006 3,031,038 3,956,750 0.0
Multi- GBP 9,375,000 English China Clays PLC,
Industry Convertible Bonds, 6.50% due
9/30/2003 14,965,745 14,007,000 0.1
Real GBP 1,250,000 Land Securities PLC, Convertible
Estate Bonds, 9.375% due 7/31/2004 2,202,044 2,436,000 0.0
Retail GBP 30,700,000 Sainsbury (J.) PLC, Convertible
Bonds, 8.50% due 11/19/2005 56,086,572 55,964,258 0.4
Textiles GBP 2,500,000 Coats Viyella PLC, Convertible
Bonds, Series B, 6.25% due 8/09/2003 3,535,704 3,674,300 0.0
<PAGE>
Total Fixed-Income Securities in
the United Kingdom 235,764,803 247,264,836 1.9
United Agri- USD 27,000,000 Sun World International, Inc.,
States cultural 11.25% due 4/15/2004 (q) 27,000,000 27,810,000 0.2
Banking USD 14,250,000 Ocwen Federal Bank, 12% due 6/15/2005 14,250,000 15,069,375 0.1
Biotech- USD 7,200,000 Cetus Corporation (Euro),
nology Convertible Bonds, 5.25% due
5/21/2002 5,220,250 6,840,000 0.0
Energy USD 7,374,000 Transamerican Refining Corp., 0%
due 2/15/1998 (b) 6,271,249 6,894,690 0.0
USD 11,000,000 TransTexas Gas Corp., 11.50% due
6/15/2002 11,000,000 12,210,000 0.1
--------------- --------------- ------
17,271,249 19,104,690 0.1
Financial USD 10,000,000 Ford Capital BV, 9.375% due 1/01/1998 10,037,900 10,199,800 0.1
Services--
Captive
Healthcare USD 1,000,000 Novacare, Inc., Convertible Bonds,
5.50% due 1/15/2000 857,500 910,000 0.0
Home- Baldwin Builders & Contractors (r):
building USD 47,830,183 10.25% due 7/18/1997 47,830,183 45,438,674 0.4
& Con- USD 10,000,000 11.25% due 7/18/1997 10,000,000 9,700,000 0.1
struction USD 37,500,000 Beazer Homes USA, Inc., 9% due 3/01/2004 35,597,000 35,437,500 0.3
USD 13,750,000 Presley Companies, Senior
Notes, 12.50% due 7/01/2001 13,690,312 13,200,000 0.1
--------------- --------------- ------
107,117,495 103,776,174 0.9
Industrial USD 18,100,000 AM General Corp., 12.875% due
5/01/2002 15,851,520 16,471,000 0.1
USD 21,750,000 Crown Packaging Enterprises, 0/14%
due 8/01/2006 (b)(q) 7,745,738 2,392,500 0.0
USD 8,750,000 Crown Packaging Ltd., 10.75% due
11/01/2000 8,750,000 7,787,500 0.1
USD 7,000,000 Envirotest Systems Corp., 9.125% due
3/15/2001 5,568,750 6,510,000 0.1
USD 32,000,000 Genmar Holdings, Inc., 13.50% due
7/15/2001 31,654,600 32,160,000 0.2
USD 81,000,000 International Semi-Tech
Microelectronics, Inc., 0/11.50%
due 8/15/2003 (b) 54,899,760 42,120,000 0.3
--------------- --------------- ------
124,470,368 107,441,000 0.8
<PAGE>
Oil & PDV America, Inc.:
Related USD 35,000,000 7.25% due 8/01/1998 34,856,150 35,070,000 0.3
USD 10,000,000 7.75% due 8/01/2000 10,062,500 9,968,000 0.1
--------------- --------------- ------
44,918,650 45,038,000 0.4
Real USD 23,259,285 RTC Commercial Mortgage, Class C,
Estate 8.25% due 12/25/2020 (d) 22,903,008 22,270,765 0.2
Real USD 24,500,000 Alexander Haagen Properties Inc.,
Estate Exchangeable Debentures, 7.25% due
Investment 12/27/2003 (q) 24,348,750 22,723,750 0.2
Trusts USD 4,500,000 Capstone Capital Corp., 6.55% due
3/14/2002 4,072,425 4,173,750 0.0
USD 7,000,000 Centerpoint Properties Corp.,
Convertible Bonds, 8.22% due 1/15/2004 7,000,000 11,331,250 0.1
USD 30,000,000 First Union Real Estate, 8.875% due
10/01/2003 29,756,100 29,175,000 0.2
USD 25,000,000 First Washington Realty, 8.25% due
6/27/1999 (r) 25,000,000 24,437,500 0.2
Health & Retirement Properties Trust,
Convertible Bonds:
USD 40,000,000 7.25% due 10/01/2001 40,000,000 40,300,000 0.3
USD 15,000,000 7.50% due 10/01/2003 15,000,000 15,093,750 0.1
LTC Properties, Inc., Convertible
Bonds:
USD 10,000,000 8.25% due 1/01/1999 10,000,000 9,425,000 0.1
USD 10,000,000 8.50% due 1/01/2001 10,000,000 10,512,500 0.1
USD 12,500,000 8% due 7/01/2001 12,500,000 15,000,000 0.1
USD 25,000,000 Lepereq Corporate Income Fund,
Exchangeable Secured Notes, 8%
due 3/17/2004 (r) 25,000,000 24,281,250 0.2
Malan Realty Investors, Inc.,
Convertible Bonds:
USD 27,000,000 8.50% due 7/01/2003 (q) 27,000,000 26,730,000 0.2
USD 4,750,000 9.50% due 7/15/2004 3,859,375 4,750,000 0.0
Meditrust, Convertible Bonds:
USD 9,415,000 8.54% due 7/01/2000 9,602,637 10,179,969 0.1
USD 10,000,000 7.50% due 3/01/2001 10,000,000 10,037,500 0.1
USD 5,000,000 Mid-Atlantic Realty Trust,
Convertible Bonds, 7.625% due
9/15/2003 4,875,000 5,350,000 0.0
USD 22,000,000 National Health Investors,
Convertible Bonds, 7.75% due
1/01/2001 22,000,000 25,162,500 0.2
USD 23,000,000 Nationwide Health Properties Inc.,
Convertible Bonds, 6.25% due
1/01/1999 22,800,000 22,770,000 0.2
USD 42,000,000 Omega Healthcare Investors Inc.,
Convertible Bonds, 8.50% due
2/01/2001 42,052,500 43,837,500 0.3
USD 5,500,000 Sizeler Property Investors, Inc.,
Convertible Bonds, 8% due 7/15/2003 5,505,000 5,005,000 0.0
--------------- --------------- ------
350,371,787 360,276,219 2.7
<PAGE>
Resources USD 12,000,000 Freeport-McMoRan Resources, 8.75%
due 2/15/2004 11,116,875 12,120,000 0.1
Retail-- USD 29,500,000 Coinstar Inc., 0/13% due 10/01/2006
Miscel- (b)(k)(q) 21,748,936 20,539,375 0.2
laneous
Savings USD 21,400,000 First Federal Financial Corporation,
Bank 11.75% due 10/01/2004 21,401,250 23,433,000 0.2
Steel USD 15,000,000 Bar Technologies Ltd., 13.50% due
4/01/2001 13,898,344 14,737,500 0.1
USD 2,395,500 Worthington/Rouge Steel, DECS
Mandatory Convertible, 4.25% due
3/01/2000 37,310,300 38,328,000 0.3
--------------- --------------- ------
51,208,644 53,065,500 0.4
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Currency Face Value Percent of
COUNTRY Industries Denomination Amount Fixed-Income Securities Cost (Note 1a) Net Assets
<S> <S> <S> <C> <S> <C> <C> <C>
United Tele- Brooks Fiber Properties (b):
States communi- USD 24,635,000 0% due 3/01/2006 $ 15,171,738 $ 15,951,163 0.1%
(concluded) cations USD 19,250,000 0/11.875% due 11/01/2006 11,936,312 11,935,000 0.1
USD 15,500,000 Call Net Enterprises, Inc.,
0/13.25% due 12/01/2004 (b) 11,196,503 13,078,125 0.1
USD 76,000,000 CellNet Data Systems, Inc., 0/13%
due 6/15/2005 (b)(h) 44,556,653 49,780,000 0.4
Geotek Communications, Inc.:
USD 99,000,000 0/15% due 7/15/2005 (b) 50,225,798 57,420,000 0.4
USD 22,650,000 Convertible Bonds, 12% due
2/15/2001(r) 22,463,875 18,799,500 0.1
<PAGE> USD 45,000,000 International Cabletel Inc.,
Series B, 0% due 2/01/2001 (b) 29,582,046 29,362,500 0.2
USD 39,000,000 Ionica Corp., 0% due 5/01/2002 (b) 18,920,491 18,598,320 0.1
USD 20,250,000 Millicom International Celular S.A.,
0% due 6/01/2001 (b) 11,813,079 14,175,000 0.1
USD 48,500,000 Nextel Communications, Inc., 0% due
2/15/1999 (b) 36,998,017 35,162,500 0.3
Teleport Communications Group Inc.:
USD 31,250,000 0/11.125% due 7/01/2007 (b) 19,894,033 21,484,375 0.2
USD 3,000,000 9.875% due 7/01/2006 3,000,000 3,112,500 0.0
USD 51,750,000 TeleWest Communications PLC, 0% due
10/01/2000 (b) 33,981,198 35,060,625 0.3
USD 20,000,000 Unifi Communications, Inc., 14% due
3/01/2004 (p)(q) 20,000,000 19,700,000 0.2
United International Holdings,
Inc. (b):
USD 41,650,000 0% due 11/15/1999 (f) 28,530,489 30,092,125 0.2
USD 11,000,000 Series B, 0% due 11/15/1999 7,799,118 7,947,500 0.1
United USN Inc. (b):
USD 47,000,000 0/14% due 9/15/2003 (i) 25,837,002 24,910,000 0.2
USD 35,000,000 Convertible Bonds, 0/9% due
9/30/2004 (q) 28,294,968 26,381,250 0.2
Winstar Communications Inc.:
USD 32,750,000 0% due 10/15/2000 (b) 19,896,957 18,176,250 0.1
USD 20,000,000 14.50% due 10/15/2005 (q) 20,000,000 19,400,000 0.2
USD 10,000,000 Winstar Equipment, 12.50% due
3/15/2004 (q) 10,000,000 9,500,000 0.1
--------------- --------------- ------
470,098,277 480,026,733 3.7
Textiles & USD 18,250,000 Texfi Industries, Inc., 8.75% due
Apparel 8/01/1999 17,930,300 17,246,250 0.1
Transport- USD 10,625,000 Eletson Holdings Inc.,
ation-- 9.25% due 11/15/2003 10,558,437 10,492,187 0.1
Shipping USD 19,250,000 Teekay Shipping Corporation, 8.32%
due 2/01/2008 18,252,500 18,865,000 0.1
--------------- --------------- ------
28,810,937 29,357,187 0.2
Trucking USD 21,000,000 Ameritruck Distribution, 12.25%
due 11/15/2005 20,718,075 21,052,500 0.2
<PAGE>
US Govern- Federal Home Loan Mortgage Corp.,
ment & REMIC (d)(g):
Agency USD 4,910,000 1243-HP, 5.625% due 2/25/2015 4,788,017 4,799,525 0.0
Obliga- USD 10,000,000 Series, 6.30% due 5/15/2008 9,210,937 9,239,062 0.1
tions Federal National Mortgage
Association (d):
USD 7,413,602 8% due 10/01/2024 7,078,832 7,527,105 0.1
USD 14,866,350 8% due 12/01/2024 14,603,866 15,093,954 0.1
US Treasury Notes & Bonds:
USD 341,100,000 6% due 5/31/1998 (c) 339,137,636 340,966,630 2.6
USD 150,000,000 6.125% due 8/31/1998 (c) 149,890,625 150,046,500 1.2
USD 200,000,000 5.75% due 12/31/1998 198,992,025 198,734,200 1.5
USD 750,000,000 5.875% due 2/28/1999 747,746,094 745,898,250 5.7
USD 250,000,000 5.875% due 2/15/2000 245,113,281 246,640,625 1.9
USD 55,000,000 7.875% due 8/15/2001 53,943,600 57,690,050 0.4
USD 25,000,000 6.25% due 2/15/2003 25,710,938 24,570,250 0.2
US Treasury STRIPS (b)(m):
USD 5,000,000 0% due 2/15/2019 1,220,655 1,069,150 0.0
USD 22,000,000 0% due 5/15/2000 18,032,955 18,153,740 0.1
--------------- --------------- ------
1,815,469,461 1,820,429,041 13.9
Video USD 104,025,000 CAI Wireless Systems,
Services/ Inc., 12.25% due 9/15/2002 74,194,250 39,529,500 0.3
Tele- USD 113,500,000 CS Wireless Systems, Inc., 0% due
communica- 3/01/2001 (b)(l) 56,523,877 29,510,000 0.2
tions USD 15,000,000 Heartland Wireless Communications
Inc., 14% due 10/15/2004 (q) 12,075,000 6,600,000 0.1
People's Choice T.V. Corp. (b):
USD 3,980,000 0/13.125% due 6/01/2004 1,819,310 1,472,600 0.0
USD 49,450,000 0% due 6/01/2004 (o) 21,271,365 18,296,500 0.1
USD 14,250,000 Wireless One Inc., 13% due
10/15/2003 12,231,250 8,977,500 0.1
--------------- --------------- ------
178,115,052 104,386,100 0.8
Total Fixed-Income Securities in the
United States 3,361,036,014 3,300,391,709 25.3
Total Investments in Fixed-Income
Securities 5,614,719,650 5,686,994,706 43.6
Short-Term Securities
<PAGE>
United Commercial USD 100,000,000 American Express Credit Corp., 5.32%
States Paper* due 5/06/1997 99,926,111 99,926,111 0.8
Associates Corp. of North America:
USD 50,000,000 5.32% due 5/08/1997 49,948,278 49,948,278 0.4
USD 50,000,000 5.56% due 6/20/1997 49,613,889 49,613,889 0.4
CIT Group Holdings, Inc. (The):
USD 50,000,000 5.34% due 5/07/1997 49,955,500 49,955,500 0.4
USD 32,000,000 5.34% due 5/16/1997 31,928,800 31,928,800 0.2
USD 18,000,000 5.54% due 6/13/1997 17,880,890 17,880,890 0.1
Caisse des Depots et Consignations:
USD 20,000,000 5.30% due 5/06/1997 19,985,278 19,985,278 0.1
USD 40,000,000 5.53% due 5/06/1997 39,969,278 39,969,278 0.3
USD 20,000,000 5.33% due 5/08/1997 19,979,272 19,979,272 0.1
USD 20,000,000 5.52% due 5/08/1997 19,978,533 19,978,533 0.1
Ciesco, L.P.:
USD 50,000,000 5.50% due 5/15/1997 49,893,055 49,893,055 0.4
USD 20,000,000 5.55% due 5/23/1997 19,932,167 19,932,167 0.1
USD 15,000,000 5.55% due 6/16/1997 14,893,625 14,893,625 0.1
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Currency Face Value Percent of
COUNTRY Denomination Amount Short-Term Securities Cost (Note 1a) Net Assets
<S> <S> <S> <C> <S> <C> <C> <C>
United Commercial Daimler-Benz AG:
States Paper* USD 30,000,000 5.32% due 5/07/1997 $ 29,973,400 $ 29,973,400 0.2%
(concluded) (concluded)USD 22,000,000 5.53% due 5/21/1997 21,932,411 21,932,411 0.2
USD 27,000,000 5.50% due 5/23/1997 26,909,250 26,909,250 0.2
USD 19,200,000 5.50% due 5/28/1997 19,120,800 19,120,800 0.1
USD 100,000,000 Delaware Funding Corp., 5.53% due
5/15/1997 99,784,944 99,784,944 0.8
du Pont (E.I.) de Nemours & Co.:
USD 40,000,000 5.35% due 5/16/1997 39,910,833 39,910,833 0.3
USD 30,000,000 5.46% due 5/20/1997 29,913,550 29,913,550 0.2
Eiger Capital Corp.:
USD 50,000,000 5.55% due 5/02/1997 49,992,292 49,992,292 0.4
USD 50,000,000 5.50% due 5/29/1997 49,786,111 49,786,111 0.4
USD 100,000,000 Ford Motor Credit Co., 5.32% due
5/05/1997 99,940,889 99,940,889 0.8
USD 10,000,000 France Telecom, 5.48% due 5/09/1997 9,987,822 9,987,822 0.1
General Electric Capital Corp.:
USD 62,000,000 5.34% due 5/12/1997 61,898,837 61,898,837 0.5
USD 86,000,000 5.54% due 6/11/1997 85,457,388 85,457,388 0.7
USD 40,000,000 5.55% due 6/27/1997 39,648,500 39,648,500 0.3
<PAGE> USD 50,000,000 Goldman Sachs Group L.P., 5.52% due
5/27/1997 49,800,667 49,800,667 0.4
IBM Credit Corp.:
USD 20,000,000 5.30% due 5/02/1997 19,997,055 19,997,055 0.2
USD 40,000,000 5.47% due 5/20/1997 39,884,522 39,884,522 0.3
USD 40,000,000 5.54% due 6/09/1997 39,759,933 39,759,933 0.3
International Lease Finance Corp.:
USD 50,000,000 5.30% due 5/12/1997 49,919,028 49,919,028 0.4
USD 50,000,000 5.55% due 6/06/1997 49,722,500 49,722,500 0.4
USD 50,000,000 Kredietbank North American Finance
Corp., 5.37% due 5/16/1997 49,888,125 49,888,125 0.4
MetLife Funding Corp.:
USD 11,700,000 5.55% due 5/02/1997 11,698,196 11,698,196 0.1
USD 7,000,000 5.35% due 5/09/1997 6,991,678 6,991,678 0.0
USD 25,000,000 5.32% due 5/13/1997 24,955,667 24,955,667 0.2
USD 27,659,000 5.35% due 5/16/1997 27,597,343 27,597,343 0.2
USD 29,000,000 5.53% due 6/16/1997 28,795,083 28,795,083 0.2
National Australia Funding
(Delaware) Inc.:
USD 30,000,000 5.31% due 5/05/1997 29,982,300 29,982,300 0.2
USD 30,000,000 5.52% due 6/10/1997 29,816,000 29,816,000 0.2
USD 40,000,000 5.55% due 6/13/1997 39,734,833 39,734,833 0.3
USD 20,000,000 Pepsico, Inc., 5.30% due 5/07/1997 19,982,333 19,982,333 0.1
Preferred Receivable Funding Corp.:
USD 13,800,000 5.33% due 5/02/1997 13,797,957 13,797,957 0.1
USD 14,225,000 5.33% due 5/08/1997 14,210,257 14,210,257 0.1
USD 15,175,000 5.35% due 5/12/1997 15,150,193 15,150,193 0.1
USD 23,000,000 5.57% due 6/17/1997 22,832,745 22,832,745 0.2
Siemens Corporation AG:
USD 30,000,000 5.30% due 5/12/1997 29,951,417 29,951,417 0.2
USD 20,100,000 5.38% due 5/16/1997 20,054,942 20,054,942 0.2
USD 37,000,000 Southwestern Bell Capital Corp.,
5.35% due 5/14/1997 36,928,518 36,928,518 0.3
Transamerica Finance Corp.:
USD 45,000,000 5.37% due 5/13/1997 44,919,450 44,919,450 0.3
USD 21,000,000 5.38% due 5/16/1997 20,952,925 20,952,925 0.2
USD 10,000,000 5.52% due 5/29/1997 9,957,067 9,957,067 0.1
USD 21,000,000 5.53% due 5/30/1997 20,906,451 20,906,451 0.2
USD 21,000,000 USAA Capital Corp., 5.56% due
5/23/1997 20,928,647 20,928,647 0.2
Xerox Corp.:
USD 13,765,000 5.31% due 5/02/1997 13,762,970 13,762,970 0.1
USD 33,000,000 5.32% due 5/07/1997 32,970,740 32,970,740 0.3
USD 11,000,000 5.32% due 5/07/1997 10,990,247 10,990,247 0.1
USD 14,000,000 5.53% due 6/12/1997 13,909,677 13,909,677 0.1
Xerox Credit Corp.:
USD 16,000,000 5.31% due 5/02/1997 15,997,640 15,997,640 0.1
USD 59,000,000 5.30% due 5/09/1997 58,930,511 58,930,511 0.5
USD 15,000,000 5.53% due 6/19/1997 14,887,096 14,887,096 0.1
--------------- --------------- ------
2,098,706,416 2,098,706,416 16.1
<PAGE>
US Govern- Federal Home Loan Bank:
ment USD 50,000,000 5.48% due 5/07/1997 49,954,333 49,954,333 0.4
Agency USD 52,080,000 5.34% due 5/22/1997 51,917,771 51,917,771 0.4
Obliga- USD 75,000,000 Federal Home Loan Mortgage Corp.,
tions 5.33% due 5/02/1997 74,988,896 74,988,896 0.6
Federal National Mortgage
Association:
USD 47,000,000 5.46% due 5/02/1997 46,992,872 46,992,872 0.3
USD 75,000,000 5.41% due 5/08/1997 74,921,104 74,921,104 0.6
USD 75,000,000 5.42% due 5/19/1997 74,796,750 74,796,750 0.5
--------------- --------------- ------
373,571,726 373,571,726 2.8
Total Investments in Short-Term
Securities 2,472,278,142 2,472,278,142 18.9
Total Investments 12,004,429,269 12,811,200,694 98.2
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
OPTIONS Nominal Value Premiums Value Percent of
WRITTEN Covered by Options Issue Received (Note 1a) Net Assets
<S> <C> <S> <C> <C> <C>
Call Options 1,500,000 AT&T Corp., expiring October 1997
Written at USD 35 $ (3,486,132) $ (2,531,250) 0.0%
500,000 Airtouch Communications, expiring
October 1997 at USD 25 (703,726) (1,281,250) 0.0
Total Options Written (4,189,858) (3,812,500) 0.0
Total Investments, Net of Options Written $12,000,239,411 12,807,388,194 98.2
===============
Short Sales (Proceeds--$95,981,142)** (97,702,445) (0.8)
Unrealized Appreciation on Forward Foreign Exchange Contracts*** 20,849,797 0.2
Variation Margin on Financial Futures Contracts**** 14,689,619 0.1
Other Assets Less Liabilities 304,494,496 2.3
--------------- ------
Net Assets $13,049,719,661 100.0%
=============== ======
<FN>
++Non-income producing security.
++++American Depositary Receipts (ADR).
*Commercial Paper and certain US Government Agency Obligations are
traded on a discount basis. The interest rates shown are the rates
in effect at April 30, 1997.
**Covered Short Sales entered into as of April 30, 1997 were as
follows:
<CAPTION>
Common Value
Shares Issue (Note 1i)
<S> <S> <C>
201,700 Banco Bilbao Vizcaya, S.A. de C.V. $ (12,718,531)
1,932,020 Bank of East Asia (6,647,086)
1,114,000 Hysan Development Co., Ltd. (3,077,666)
2,552,000 NEC Corporation (31,178,371)
115,000 Sony Corporation (8,375,502)
143,000 Tokyo Electron Limited (5,522,976)
1,413,000 Yamanuchi Pharmaceutical Co., Ltd. (30,182,313)
<PAGE>
Total (Proceeds--$95,981,142) $ (97,702,445)
-------------
***Forward Foreign Exchange Contracts as of April 30, 1997 were as
follows:
<CAPTION>
Unrealized
Foreign Expiration Appreciation
Currency Sold Date (Depreciation)
<S> <C> <S> <C>
CHF 50,000,000 May 1997 $ 1,283,274
CHF 25,000,000 June 1997 119,148
CHF 31,000,000 July 1997 84,521
DEM 449,000,000 May 1997 8,367,706
DEM 430,000,000 June 1997 3,089,641
DEM 70,000,000 July 1997 137,984
DKK 10,000,000 July 1997 2,277
ECU 45,000,000 May 1997 1,814,925
ESP 3,500,000,000 May 1997 234,859
FRF 392,000,000 May 1997 1,450,836
FRF 340,000,000 June 1997 732,273
FRF 90,000,000 July 1997 78,806
GBP 53,000,000 May 1997 (349,093)
GBP 63,000,000 June 1997 112,453
GBP 45,000,000 July 1997 (34,485)
NLG 82,000,000 May 1997 472,073
NLG 19,000,000 June 1997 109,996
NLG 20,000,000 July 1997 39,058
NLG 50,000,000 August 1997 33,878
NOK 105,000,000 May 1997 195,676
SEK 270,000,000 May 1997 2,169,533
SEK 235,000,000 June 1997 704,458
Total Unrealized Appreciation on Forward
Foreign Exchange Contracts--Net
(USD Commitment--$1,287,937,605) $20,849,797
===========
****Financial Futures Contracts sold as of April 30, 1997 were as
follows:
<CAPTION>
Number of Expiration Value
Contracts Issue Exchange Date (Note 1a)
<C> <S> <S> <S> <C>
100 JGB Tokyo June 1997 $ 98,549,696
290 Standard & Poor's
500 Index NYSE June 1997 116,406,000
Total Financial Futures Contracts Sold
(Total Contract Price--$216,794,891) $214,955,696
============
<PAGE>
Financial Futures Contracts purchased as of April 30, 1997
were as follows:
<CAPTION>
Number of Expiration Value
Contracts Issue Exchange Date (Note 1a)
<C> <S> <S> <S> <C>
3,026 Nikkei 225 OSAKA June 1997 $459,135,335
Total Financial Futures Contracts Purchased
(Total Contract Price--$439,170,884) $459,135,335
============
(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)Represents a zero coupon or step bond. The interest rate on a
step bond represents the fixed rate of interest that will commence
its accrual on a predetermined date until maturity.
(c)All or a portion of security held as collateral in connection
with open financial futures contracts.
(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)Each $10 face amount contains 40 shares of First Place Tower.
(f)Each $1,000 face amount contains one warrant of United
International Holdings, Inc.
(g)Real Estate Mortgage Investment Conduits (REMIC).
(h)Each $1,000 face amount contains four warrants of CellNet Data
Systems, Inc.
(i)Each $1,000 face amount contains one warrant of United USN, Inc.
(j)Each $1,000 face amount contains one warrant of PLD Telekom, Inc.
(k)Each $1,000 face amount contains one warrant of Coinstar, Inc.
(l)Each $1,000 face amount contains 1.1 shares of common stock of CS
Wireless Systems, Inc.
(m)Separate Trading of Registered Interest and Principal of
Securities (STRIPS).
(n)Securities held as collateral in connection with covered short
sales.
(o)Each $1,000 face amount contains one warrant of People's Choice
T.V. Corp.
(p)Each $1,000 face amount contains one warrant of Unifi
Communications, Inc.
(q)The security may be offered and sold to "qualified institutional
buyers" under Rule 144A of the Securities Act of 1933.
(r)Restricted securities as to resale. The value of the Fund's
investments in restricted securities was approximately $179,354,000,
representing 1.4% of the net assets
(s)Represents a Brady Bond. Brady Bonds are securities which have
been issued to refinance commercial bank loans and other debt. The
risk associated with these instruments is the amount of any
uncollateralized principal or interest payments since there is a
high default rate of commercial bank loans by countries issuing
these securities.
<PAGE>
<CAPTION>
Acquisition Value
Issue Date(s) Cost (Note 1a)
<S> <S> <C> <C>
Baldwin Builders & Contractors:
10.25% due 7/18/1997 2/10/1996--
4/25/1997 $ 47,830,183 $ 45,438,674
11.25% due 7/18/1997 5/13/1996--
12/30/1996 10,000,000 9,700,000
Diva Systems Corp.
(Convertible, Series C) 7/17/1996--
8/22/1996 8,410,000 9,500,000
First Washington Realty, 8.25%
due 6/27/1999 6/27/1994 25,000,000 24,437,500
Geotek Communications, Inc.,
Convertible Bonds, 12% due
2/15/2001 3/01/1996--
3/31/1996 22,463,875 18,799,500
Ionica PLC 2/25/1997 10,286,966 10,227,140
Ionica PLC (Warrants) 2/25/1997 -- 3,719
Lepereq Corporate Income Fund,
Exchangeable Secured Notes,
8% due 3/17/2004 3/18/1997 25,000,000 24,281,250
Petroleos Mexicanos, 8.625% 5/24/1996--
due 12/01/2023 8/01/1996 25,007,000 36,966,563
Total $173,998,024 $179,354,345
============ ============
<PAGE>
+++Investments 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:
<CAPTION>
Net Share Net Dividend
Industry Affiliate Activity Cost Income
<S> <S> <C> <C> <C>
Healthcare Advocat, Inc. -- -- ++
Services
Paper & Pulp Asia Pacific Resources
International
Holdings Ltd. (ADR) -- -- --
Computer Borland International
Software Corp. -- -- ++
Textiles Burlington
Industries, Inc. -- -- ++
Retail Stores Buttrey Food & Drug
Stores Co. -- -- ++
Electronics Checkpoint Systems,
Inc. 1,750,000 $19,246,560 --
Utilities-- El Paso Electric
Electric & Gas Company -- -- ++
Retail Stores Filene's Basement Corp. -- -- ++
Business Data Information
Systems Resources, Inc. 387,300 4,498,182 ++
Metals Lukens Inc. -- (171,694) $675,000
Real Estate Mid-America Realty
Investment Investments -- -- 290,972
Trusts
Real Estate Prime Retail, Inc. 188,500 1,480,026 876,224
Investment
Trusts
Real Estate Prime Retail, Inc.
Investment (10.50%) (25,000) (625,000) 1,096,594
Trusts
Insurance Risk Capital Holdings
Inc. 638,000 10,505,000 ++
Telecommu- Rogers Cantel Mobile
nications Communications Inc. 634,000 10,966,850 ++
Telecommu- Rogers Cantel Mobile
nications Communications Inc.
(Class B) 1,165,200 22,391,634 ++
Gaming Scientific Games
Holdings Corp. -- -- ++
Real Estate Walden Residential
Investment Properties, Inc. (9.20%,
Trusts Series S) 753,000 17,994,636 --
Real Estate Walden Residential
Investment Properties, Inc.
Trusts (Warrants) 920,000 1,125,068 --
<PAGE>
++Non-income producing security.
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENT OF ASSETS AND LIABILITIES
<CAPTION>
As of April 30, 1997
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$12,004,429,269)
(Note 1a) $12,811,200,694
Unrealized appreciation on forward foreign exchange
contracts (Note 1d) 20,849,797
Foreign cash (Note 1c) 4,132,076
Cash 704,950
Deposits on short sales (Note 1i) 95,981,142
Receivables:
Securities sold $ 186,576,617
Interest 93,531,026
Capital shares sold 41,740,851
Variation margin (Note 1d) 14,689,619
Dividends 13,817,335
Forward foreign exchange contracts (Note 1d) 2,724,142 353,079,590
---------------
Prepaid registration fees and other assets (Note 1g) 240,927
---------------
Total assets 13,286,189,176
---------------
Liabilities: Common stocks sold short, at market value (proceeds--
$95,981,142) (Note 1i) 97,702,445
Options written, at value (premiums paid--$4,189,858)
(Notes 1a & 1d) 3,812,500
Payables:
Securities purchased 90,445,975
Capital shares redeemed 23,807,921
Distributor (Note 2) 8,137,549
Investment adviser (Note 2) 6,991,719 129,383,164
---------------
Accrued expenses and other liabilities 5,571,406
---------------
Total liabilities 236,469,515
---------------
<PAGE>
Net Assets: Net assets $13,049,719,661
===============
Net Assets Class A Shares of Common Stock, $0.10 par value,
Consist of: 300,000,000 shares authorized $ 13,503,203
Class B Shares of Common Stock, $0.10 par value,
1,500,000,000 shares authorized 62,838,908
Class C Shares of Common Stock, $0.10 par value,
200,000,000 shares authorized 3,614,805
Class D Shares of Common Stock, $0.10 par value,
900,000,000 shares authorized 8,570,740
Paid-in capital in excess of par 11,467,411,634
Undistributed investment income--net 66,814,407
Undistributed realized capital gains on investments and
foreign currency transactions--net 580,209,393
Unrealized appreciation on investments and foreign currency
transactions--net 846,756,571
---------------
Net assets $13,049,719,661
===============
Net Asset Class A--Based on net assets of $2,015,474,045 and 135,032,027
Value: shares outstanding $ 14.93
===============
Class B--Based on net assets of $9,230,832,694 and 628,389,076
shares outstanding $ 14.69
===============
Class C--Based on net assets of $526,044,410 and 36,148,049
shares outstanding $ 14.55
===============
Class D--Based on net assets of $1,277,368,512 and 85,707,398
shares outstanding $ 14.90
===============
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENT OF OPERATIONS
<CAPTION>
For the Six Months Ended April 30, 1997
<S> <S> <C> <C>
Investment Interest and discount earned (net of $56,388 foreign
Income withholding tax) $ 293,386,601
(Notes 1e & 1f): Dividends (net of $2,591,931 foreign withholding tax) 50,766,019
Other 3,187,839
---------------
Total income 347,340,459
---------------
<PAGE>
Expenses: Investment advisory fees (Note 2) $ 46,965,002
Account maintenance and distribution fees--Class B (Note 2) 44,932,990
Transfer agent fees--Class B (Note 2) 5,984,500
Account maintenance and distribution fees--Class C (Note 2) 2,271,707
Account maintenance fees--Class D (Note 2) 1,439,038
Custodian fees 1,296,735
Transfer agent fees--Class A (Note 2) 1,105,143
Transfer agent fees--Class D (Note 2) 660,930
Printing and shareholder reports 571,868
Registration fees (Note 1g) 543,080
Short sale of dividends (Note 1i) 350,067
Transfer agent fees--Class C (Note 2) 326,060
Accounting services (Note 2) 316,269
Professional fees 107,208
Short sale of interest (Note 1i) 46,589
Directors' fees and expenses 22,218
Pricing fees 3,132
Other 50,943
---------------
Total expenses before reimbursement 106,993,479
Reimbursement of expenses (Note 2) (5,363,891)
---------------
Total expenses after reimbursement 101,629,588
Investment income--net 245,710,871
Realized & Realized gain from:
Unrealized Gain Investments--net $ 428,404,029
(Loss) on Foreign currency transactions--net 153,067,777 581,471,806
Investments & ---------------
Foreign Currency Change in unrealized appreciation/depreciation on:
Transactions--Net Investments--net (134,477,079)
(Notes 1c, 1d, Foreign currency transactions--net 21,993,713 (112,483,366)
1f & 3): --------------- ---------------
Net realized and unrealized gain on investments and
foreign currency transactions 468,988,440
---------------
Net Increase in Net Assets Resulting from Operations $ 714,699,311
===============
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
For the Six For the Year
Months Ended Ended
Increase (Decrease) in Net Assets: April 30, 1997 Oct. 31, 1996
<S> <S> <C> <C>
Operations: Investment income--net $ 245,710,871 $ 473,459,716
Realized gain on investments and foreign currency
transactions--net 581,471,806 653,947,236
Change in unrealized appreciation/depreciation on investments
and foreign currency transactions--net (112,483,366) 547,826,040
--------------- ---------------
Net increase in net assets resulting from operations 714,699,311 1,675,232,992
--------------- ---------------
<PAGE>
Dividends & Investment income--net:
Distributions to Class A (63,074,471) (108,106,998)
Shareholders Class B (257,349,297) (425,282,978)
(Note 1h): Class C (12,276,134) (11,381,642)
Class D (34,829,319) (34,542,355)
Realized gain on investments--net:
Class A (79,203,184) (45,054,853)
Class B (378,949,932) (206,613,317)
Class C (17,801,964) (3,762,020)
Class D (45,374,563) (8,531,078)
--------------- ---------------
Net decrease in net assets resulting from dividends and
distributions to shareholders (888,858,864) (843,275,241)
--------------- ---------------
Capital Share Net proceeds from issuance of capital shares 1,291,737,328 2,041,810,853
Transactions Net proceeds from issuance of capital shares resulting
(Note 4): from reorganization -- 523,182,823
--------------- ---------------
Net increase in net assets derived from capital share
transactions 1,291,737,328 2,564,993,676
--------------- ---------------
Net Assets: Total increase in net assets 1,117,577,775 3,396,951,427
Beginning of period 11,932,141,886 8,535,190,459
--------------- ---------------
End of period* $13,049,719,661 $11,932,141,886
=============== ===============
<FN>
*Undistributed investment income--net $ 66,814,407 $ 188,632,757
=============== ===============
See Notes to Financial Statements.
</TABLE>
<TABLE>
FINANCIAL HIGHLIGHTS
<CAPTION>
<PAGE>
The following per share data Class A
and ratios have been derived
from information provided in
the financial statements. For the Six
Months Ended
Increase (Decrease) in Net Asset April 30, For the Year Ended October 31,
Value: 1997++ 1996++ 1995++ 1994 1993
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of
Operating period $ 15.17 $ 14.21 $ 13.07 $ 13.52 $ 11.92
Performance: ---------- ---------- ---------- ---------- ----------
Investment income--net .35 .78 .79 .60 .39
Realized and unrealized gain
(loss) on investments and
foreign currency transactions
--net .58 1.59 1.04 (.31) 2.14
---------- ---------- ---------- ---------- ----------
Total from investment operations .93 2.37 1.83 .29 2.53
---------- ---------- ---------- ---------- ----------
Less dividends and distributions:
Investment income--net (.52) (.98) (.39) (.51) (.81)
Realized gain on investments
--net (.65) (.43) (.30) (.23) (.12)
---------- ---------- ---------- ---------- ----------
Total dividends and distributions (1.17) (1.41) (.69) (.74) (.93)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 14.93 $ 15.17 $ 14.21 $ 13.07 $ 13.52
========== ========== ========== ========== ==========
Total Investment Based on net asset value per
Return:** share 6.43%+++ 17.81% 14.81% 2.14% 22.61%
========== ========== ========== ========== ==========
Ratios to Average Expenses, net of reimbursement .83%* .86% .90% .89% .93%
Net Assets: ========== ========== ========== ========== ==========
Expenses .92%* .93% .90% .89% .93%
========== ========== ========== ========== ==========
Investment income--net 4.71%* 5.31% 5.98% 4.60% 3.90%
========== ========== ========== ========== ==========
Supplemental Net assets, end of period
Data: (in thousands) $2,015,474 $1,841,974 $1,487,805 $1,357,906 $ 917,806
========== ========== ========== ========== ==========
Portfolio turnover 25.18% 51.26% 36.78% 57.04% 50.35%
========== ========== ========== ========== ==========
Average commission rate paid++++ $ .0293 $ .0048 -- -- --
========== ========== ========== ========== ==========
<CAPTION>
<PAGE>
The following per share data Class B
and ratios have been derived
from information provided in
the financial statements. For the Six
Months Ended
Increase (Decrease) in Net Asset April 30, For the Year Ended October 31,
Value: 1997++ 1996++ 1995++ 1994 1993
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of
Operating period $ 14.95 $ 14.01 $ 12.91 $ 13.38 $ 11.83
Performance: ---------- ---------- ---------- ---------- ----------
Investment income--net .27 .62 .65 .46 .28
Realized and unrealized gain
(loss) on investments and
foreign currency transactions
--net .56 1.59 1.01 (.31) 2.11
---------- ---------- ---------- ---------- ----------
Total from investment operations .83 2.21 1.66 .15 2.39
---------- ---------- ---------- ---------- ----------
Less dividends and distributions:
Investment income--net (.44) (.84) (.26) (.39) (.72)
Realized gain on investments
--net (.65) (.43) (.30) (.23) (.12)
---------- ---------- ---------- ---------- ----------
Total dividends and distributions (1.09) (1.27) (.56) (.62) (.84)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 14.69 $ 14.95 $ 14.01 $ 12.91 $ 13.38
========== ========== ========== ========== ==========
Total Investment Based on net asset value per
Return:** share 5.84%+++ 16.71% 13.54% 1.13% 21.42%
========== ========== ========== ========== ==========
Ratios to Average Expenses, net of reimbursement 1.85%* 1.87% 1.93% 1.91% 1.95%
Net Assets: ========== ========== ========== ========== ==========
Expenses 1.94%* 1.95% 1.93% 1.91% 1.95%
========== ========== ========== ========== ==========
Investment income--net 3.70%* 4.29% 4.96% 3.58% 2.87%
========== ========== ========== ========== ==========
Supplemental Net assets, end of period
Data: (in thousands) $9,230,833 $8,660,279 $6,668,499 $6,457,130 $4,299,545
========== ========== ========== ========== ==========
Portfolio turnover 25.18% 51.26% 36.78% 57.04% 50.35%
========== ========== ========== ========== ==========
Average commission rate paid++++ $ .0293 $ .0048 -- -- --
========== ========== ========== ========== ==========
<PAGE>
<FN>
*Annualized.
**Total investment returns exclude the effects of sales
loads.
+++Aggregate total investment return.
++Based on average shares outstanding during the period.
++++For fiscal years beginning on or after September 1, 1995,
the Fund is required to disclose its average commission
rate per share for purchases and sales of equity securities.
The "Average Commission Rate Paid" includes commissions paid
in foreign currencies, which have been converted into US
dollars using the prevailing rate on the date of the
transaction. Such conversions may significantly affect the
rate shown.
See Notes to Financial Statements.
</TABLE>
<TABLE>
FINANCIAL HIGHLIGHTS (concluded)
<CAPTION>
Class C
The following per share data and ratios have For the For the
been derived from information provided in the Six Months Period
financial statements. Ended For the Year Oct. 21, 1994++
April 30, Ended October 31, to Oct. 31,
Increase (Decrease) in Net Asset Value: 1997++++ 1996++++ 1995++++ 1994
<S> <S> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 14.83 $ 13.94 $ 12.91 $ 12.91
Operating ---------- ---------- ---------- ----------
Performance: Investment income--net .27 .61 .64 .01
Realized and unrealized gain (loss) on
investments and foreign currency transactions
--net .55 1.58 1.02 (.01)
---------- ---------- ---------- ----------
Total from investment operations .82 2.19 1.66 --
---------- ---------- ---------- ----------
Less dividends and distributions:
Investment income--net (.45) (.87) (.33) --
Realized gain on investments--net (.65) (.43) (.30) --
---------- ---------- ---------- ----------
Total dividends and distributions (1.10) (1.30) (.63) --
---------- ---------- ---------- ----------
Net asset value, end of period $ 14.55 $ 14.83 $ 13.94 $ 12.91
========== ========== ========== ==========
Total Investment Based on net asset value per share 5.79%+++ 16.68% 13.58% .00%+++
Return:** ========== ========== ========== ==========
<PAGE>
Ratios to Average Expenses, net of reimbursement 1.86%* 1.88% 1.95% 2.44%*
Net Assets: ========== ========== ========== ==========
Expenses 1.95%* 1.95% 1.95% 2.44%*
========== ========== ========== ==========
Investment income--net 3.69%* 4.24% 4.80% 3.71%*
========== ========== ========== ==========
Supplemental Net assets, end of period (in thousands) $ 526,044 $ 385,753 $ 102,361 $ 7,347
Data: ========== ========== ========== ==========
Portfolio turnover 25.18% 51.26% 36.78% 57.04%
========== ========== ========== ==========
Average commission rate paid++++++ $ .0293 $ .0048 -- --
========== ========== ========== ==========
Class D
The following per share data and ratios have For the For the
been derived from information provided in the Six Months Period
financial statements. Ended For the Year Oct. 21, 1994++
April 30, Ended October 31, to Oct. 31,
Increase (Decrease) in Net Asset Value: 1997++++ 1996++++ 1995++++ 1994
<S> <S> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 15.15 $ 14.19 $ 13.08 $ 13.07
Operating ---------- ---------- ---------- ----------
Performance: Investment income--net .33 .77 .77 .01
Realized and unrealized gain on investments
and foreign currency transactions--net .57 1.57 1.01 --
---------- ---------- ---------- ----------
Total from investment operations .90 2.34 1.78 .01
---------- ---------- ---------- ----------
Less dividends and distributions:
Investment income--net (.50) (.95) (.37) --
Realized gain on investments--net (.65) (.43) (.30) --
---------- ---------- ---------- ----------
Total dividends and distributions (1.15) (1.38) (.67) --
---------- ---------- ---------- ----------
Net asset value, end of period $ 14.90 $ 15.15 $ 14.19 $ 13.08
========== ========== ========== ==========
Total Investment Based on net asset value per share 6.24%+++ 17.59% 14.43% .08%+++
Return:** ========== ========== ========== ==========
Ratios to Average Expenses, net of reimbursement 1.08%* 1.10% 1.16% 1.69%*
Net Assets: ========== ========== ========== ==========
Expenses 1.17%* 1.18% 1.16% 1.69%*
========== ========== ========== ==========
Investment income--net 4.47%* 5.04% 5.63% 4.46%*
========== ========== ========== ==========
<PAGE>
Supplemental Net assets, end of period (in thousands) $1,277,369 $1,044,136 $ 256,525 $ 4,968
Data: ========== ========== ========== ==========
Portfolio turnover 25.18% 51.26% 36.78% 57.04%
========== ========== ========== ==========
Average commission rate paid++++++ $ .0293 $ .0048 -- --
========== ========== ========== ==========
<FN>
*Annualized.
**Total investment returns exclude the effects of sales
loads.
+++Aggregate total investment return.
++Commencement of Operations.
++++Based on average shares outstanding during the period.
++++++For fiscal years beginning on or after September 1, 1995,
the Fund is required to disclose its average commission
rate per share for purchases and sales of equity securities.
The "Average Commission Rate Paid" includes commissions paid
in foreign currencies, which have been converted into US
prevailing exchange rate on the date of the transaction. Such
dollars using the conversions may significantly affect the
rate shown.
See Notes to Financial Statements.
</TABLE>
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. These unaudited
financial statements reflect all adjustments which are, in the
opinion of management, necessary to a fair statement of the results
for the interim period presented. All such adjustments are of a
normal recurring nature. 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.
<PAGE>
(a) Valuation of investments--Portfolio securities which are traded
on stock exchanges are valued at the last sale price on the exchange
on which such securities are traded, as of the close of business on
the day the securities are being valued or, lacking any sales, at
the last available bid price. Securities traded in the over-the-
counter market are valued at the last available bid price prior to
the time of valuation. In cases where securities are traded on more
than one exchange, the securities are valued on the exchange
designated by or under the authority of the Board of Directors as
the primary market. 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. Options written are valued
at the 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
asked price. Options purchased are valued at the 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. Short-
term securities are valued at amortized cost, which approximates
market value. Other investments, including futures contracts and
related options, are stated at market value. Securities and assets
for which market value quotations are not readily available are
valued at their fair value as determined in good faith by or under
the direction of the Fund's Board of Directors.
(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) assets or liabilities expressed in foreign
currencies into US dollars. Realized and unrealized gains or losses
from investments include the effects of foreign exchange rates on
investments.
(d) Derivative financial instruments--The Fund may engage in various
portfolio strategies to seek to increase its return by hedging its
portfolio against adverse movements in the equity, debt, and
currency markets. Losses may arise due to changes in the value of
the contract or if the counterparty does not perform under the
contract.
<PAGE>
* Forward foreign exchange contracts--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. 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.
* Foreign currency options and futures--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.
* Options--The Fund is authorized to purchase and write covered call
and 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 purchased or sold through an exercise of an
option, the related premium paid (or received) is added to (or
deducted from) the basis of the security acquired or deducted from
(or added to) the proceeds of the security sold. When an option
expires (or the Fund enters into a closing transaction), the Fund
realizes a gain or loss on the option to the extent of the premiums
received or paid (or gain or loss to the extent the cost of the
closing transaction exceeds the premium paid or received).
Written and purchased options are non-income producing investments.
* Financial futures contracts--The Fund may purchase or sell
interest rate futures contracts and options on such futures
contracts for the purpose of hedging the market risk on existing
securities or the intended purchase of securities. Futures contracts
are contracts for delayed delivery of securities at a specific
future date and at a specific price or yield. 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.
<PAGE>
(e) 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.
(f) Security transactions and investment income--Security
transactions are recorded on the dates the transactions are entered
into (the trade dates). Dividend income is recorded on the ex-
dividend dates. Dividends from foreign securities where the ex-
dividend date may have passed are subsequently recorded when the
Fund has determined the ex-dividend date.
(g) Prepaid registration fees--Prepaid registration fees are charged
to expense as the related shares are issued.
(h) Dividends and distributions--Dividends and distributions paid by
the Fund are recorded on the ex-dividend dates.
(i) Short sales--When the Fund engages in a short sale, an amount
equal to the proceeds received by the Fund is reflected as an asset
and an equivalent liability. The amount of the liability is subse-
quently marked to market to reflect the market value of the short
sale. The Fund maintains a segregated account of securities as
collateral for the short sales. The Fund is exposed to market risk
based on the amount, if any, that the market value of the stock
exceeds the market value of the securities in the segregated
account.
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"). The general partner
of MLAM is Princeton Services, Inc. ("PSI"), an indirect wholly-
owned subsidiary of Merrill Lynch & Co., Inc. ("ML & Co."), which is
the limited partner. The Fund has also entered into a Distribution
Agreement and Distribution Plans with Merrill Lynch Funds
Distributor, Inc. ("MLFD" or "Distributor"), a wholly-owned
subsidiary of Merrill Lynch Group, Inc.
<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%, from 0.70% to
0.65% for average daily net assets in excess of $5 billion, from
0.65% to 0.625% for average daily net assets in excess of $7.5
billion, and from 0.625% to 0.60% for average daily net assets in
excess of $10 billion. For the six months ended April 30, 1997, MLAM
earned fees of $46,965,002, of which $5,363,891 was voluntarily
waived. 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 six months ended April 30, 1997, MLAM paid MLAM U.K. a
fee of $5,578,663 pursuant to such agreement.
Pursuant to the distribution plans (the "Distribution Plans")
adopted by the Fund in accordance with Rule 12b-1 under the
Investment Company Act of 1940, the Fund pays the Distributor
ongoing account maintenance and distribution fees. The fees are
accrued daily and paid monthly at annual rates based upon the
average daily net assets of the shares as follows:
Account Maintenance Fee Distribution Fee
Class B 0.25% 0.75%
Class C 0.25% 0.75%
Class D 0.25% --
NOTES TO FINANCIAL STATEMENTS (concluded)
Pursuant to a sub-agreement with the Distributor, Merrill Lynch,
Pierce, Fenner & Smith Inc. ("MLPF&S"), a subsidiary of ML & Co.,
also provides account maintenance and distribution services to the
Fund. The ongoing account maintenance fee compensates the
Distributor and MLPF&S for providing account maintenance services to
Class B, Class C and Class D shareholders. The ongoing distribution
fee compensates the Distributor and MLPF&S for providing shareholder
and distribution-related services to Class B and Class C
shareholders.
For the six months ended April 30, 1997, MLFD earned underwriting
discounts and direct commissions and MLPF&S earned dealer
concessions on sales of the Fund's Class A and Class D Shares as
follows:
<PAGE>
MLFD MLPF&S
Class A $ 29,139 $ 398,754
Class D $132,973 $1,588,351
For the six months ended April 30, 1997, MLPF&S received contingent
deferred sales charges of $6,569,527 and $106,727 relating to
transactions in Class B and Class C Shares, respectively.
In addition, MLPF&S received $100,054 in commissions on the
execution of portfolio security transactions for the Fund for the
six months ended April 30, 1997.
Merrill Lynch Financial Data Services, Inc. ("MLFDS"), 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, MLFDS, MLFD, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the six months ended April 30, 1997 were $3,429,715,062 and
$2,384,921,842, respectively.
Net realized and unrealized gains (losses) as of April 30, 1997 were
as follows:
Realized Unrealized
Gains Gains
(Losses) (Losses)
Long-term investments $441,038,609 $806,771,425
Short-term investments 20,281 --
Short sales 209,149 (1,721,303)
Options written 542,106 377,358
Financial futures contracts (13,406,116) 21,803,646
Forward foreign exchange
contracts 173,246,748 20,849,797
Foreign currency transactions (20,178,971) (1,324,352)
------------ ------------
Total $581,471,806 $846,756,571
============ ============
As of April 30, 1997, net unrealized appreciation for Federal income
tax purposes aggregated $807,148,783, of which $1,242,086,555
related to appreciated securities and $434,937,772 related to
depreciated securities. At April 30, 1997, the aggregate cost of
investments, net of premiums received for options written, for
Federal income tax purposes was $12,000,239,411.
<PAGE>
Transactions in call options written for the six months ended April
30, 1997 were as follows:
Nominal Value Covered Premiums
by Call Options Written Received
Outstanding call options
written, beginning of
period -- --
Options written 2,350,000 $ 5,055,493
Options closed (350,000) (865,635)
------------ ------------
Outstanding call options
written, end of period 2,000,000 $ 4,189,858
============ ============
Transactions in put options written for the six months ended April
30, 1997 were as follows:
Nominal Value Covered Premiums
by Put Options Written Paid
Outstanding put options
written, beginning of
period -- --
Options written 100,000 $ 374,830
Options closed (100,000) (374,830)
------------ ------------
Outstanding put options
written, end of period -- $ --
============ ============
4. Capital Share Transactions:
Net increase in net assets derived from capital share transactions
was $1,291,737,328 and $2,564,993,676 for the six months ended April
30, 1997 and the year ended October 31, 1996, respectively.
Transactions in capital shares for each class were as follows:
Class A Shares for the Six Dollar
Months Ended April 30, 1997 Shares Amount
<PAGE>
Shares sold 17,236,536 $ 256,736,943
Shares issued to shareholders
in reinvestment of dividends
and distributions 8,866,857 127,150,729
------------ -------------
Total issued 26,103,393 383,887,672
Shares redeemed (12,464,033) (185,834,239)
------------ -------------
Net increase 13,639,360 $ 198,053,433
============ =============
Class A Shares for the Year Dollar
Ended October 31, 1996 Shares Amount
Shares sold 26,663,921 $ 385,379,581
Shares issued to shareholders
in reinvestment of dividends
and distributions 9,842,522 136,704,200
Shares issued resulting from
reorganization 732,464 12,726,168
------------ -------------
Total issued 37,238,907 534,809,949
Shares redeemed (20,574,819) (298,410,953)
------------ -------------
Net increase 16,664,088 $ 236,398,996
============ =============
Class B Shares for the Six Dollar
Months Ended April 30, 1997 Shares Amount
Shares sold 68,440,805 $1,006,831,234
Shares issued to shareholders
in reinvestment of dividends
and distributions 39,437,313 558,432,357
------------ --------------
Total issued 107,878,118 1,565,263,591
Shares redeemed (51,946,885) (763,814,236)
Automatic conversion of shares (6,878,159) (101,843,633)
------------ --------------
Net increase 49,053,074 $ 699,605,722
============ ==============
Class B Shares for the Year Dollar
Ended October 31, 1996 Shares Amount
<PAGE>
Shares sold 132,348,586 $1,887,208,023
Shares issued to shareholders
in reinvestment of dividends
and distributions 40,325,041 553,386,648
Shares issued resulting from
reorganization 9,028,794 47,981,055
------------ --------------
Total issued 181,702,421 2,488,575,726
Shares redeemed (75,996,626) (1,087,870,352)
Automatic conversion of shares (3,687,016) (52,616,493)
------------ --------------
Net increase 102,018,779 $1,348,088,881
============ ==============
Class C Shares for the Six Dollar
Months Ended April 30, 1997 Shares Amount
Shares sold 11,307,782 $ 164,565,298
Shares issued to shareholders
in reinvestment of dividends
and distributions 1,926,830 27,033,454
------------ -------------
Total issued 13,234,612 191,598,752
Shares redeemed (3,104,958) (45,223,469)
------------ -------------
Net increase 10,129,654 $ 146,375,283
============ =============
Class C Shares for the Year Dollar
Ended October 31, 1996 Shares Amount
Shares sold 20,590,847 $ 291,762,498
Shares issued to shareholders
in reinvestment of dividends
and distributions 987,843 13,590,987
Shares issued resulting from
reorganization 91,170 1,203,359
------------ -------------
Total issued 21,669,860 306,556,844
Shares redeemed (2,995,301) (42,705,296)
------------ -------------
Net increase 18,674,559 $ 263,851,548
============ =============
Class D Shares for the Six Dollar
Months Ended April 30, 1997 Shares Amount
<PAGE>
Shares sold 11,995,754 $ 178,420,610
Automatic conversion of shares 6,785,993 101,843,633
Shares issued to shareholders
in reinvestment of dividends
and distributions 4,754,460 68,131,403
------------ -------------
Total issued 23,536,207 348,395,646
Shares redeemed (6,738,467) (100,692,756)
------------ -------------
Net increase 16,797,740 $ 247,702,890
============ =============
Class D Shares for the Year Dollar
Ended October 31, 1996 Shares Amount
Shares sold 20,921,971 $ 291,938,712
Automatic conversion of shares 2,961,136 52,616,493
Shares issued to shareholders
in reinvestment of dividends
and distributions 2,670,340 37,606,934
Shares issued resulting from
reorganization 32,998,082 461,272,241
------------ -------------
Total issued 59,551,529 843,434,380
Shares redeemed (8,715,593) (126,780,129)
------------ -------------
Net increase 50,835,936 $ 716,654,251
============ =============
5. Commitments:
At April 30, 1997, the Fund had entered into foreign exchange
contracts, in addition to the contracts listed on the Schedule of
Investments, under which it had agreed to purchase various foreign
currency with an approximate value of $2,173,670.
COMMON STOCK PORTFOLIO CHANGES
For the Quarter Ended April 30, 1997
Additions
<PAGE>
360 Communication Company
AT&T Corp.
Accor S.A.
AirTouch Communications, Inc.
BTR PLC
Banco Commerciale Portuguese
*Banco Internacional
Brooks Fiber Properties, Inc.
Castorama Dubois Investisse
Catellus Development Corp.
Central and South West Corporation
Checkpoint Systems, Inc.
Crown Packaging Holdings Ltd.
Deutsche Lufthansa AG
Energy Group PLC
FileNet Corporation
Frontier Corporation
The Geon Company
*Heartland Wireless Communications, Inc.
Houston Industries, Inc
Imperial Chemical Industries PLC
Ionica PLC
Ionica PLC (Warrants)
J.B. Hunt Transport Services, Inc.
Long Beach Finance Corp.
LucasVarity PLC
National Westminster Bank PLC
*NationsBank Corporation
Nextel Communications Inc.
Parker Drilling Company
Pharmacia & Upjohn, Inc.
Rauma OY
Reader's Digest Association, Inc. (Class A)
Rogers Cantel Mobile Communications
Inc. (Class B)
Stone Container Corporation
Tupperware Corporation
United USN Inc. (Warrants)
Western Wireless Corporation
Deletions
<PAGE>
Assurances Generales de France S.A.
(AGF)
Astra AB 'A' Free
*Banco Internacional
Bank Intercontinental S.A.
Burlington Coat Factory Warehouse
Charter One Financial, Inc.
Compagnie de Suez S.A.
Corporacion Financiera Alba S.A.
Deutsche Bank AG
du Pont (E.I.) de Nemours & Co.
*Heartland Wireless Communications, Inc.
Input/Output, Inc.
*NationsBank Corporation
Sparbanken Sverige AB (Class A)
Student Loan Marketing Association
Telecomunicacoes Brasileiras S.A.--
Telebras PN (ADR) (USD)
[FN]
*Added and deleted in the same quarter.
PORTFOLIO INFORMATION
Worldwide
Investments
As of 4/30/97
Breakdown of Stocks &
Fixed-Income Securities by Percent of
Country Net Assets
<PAGE>
United States* 63.3%
Germany 7.5
Japan 5.2
United Kingdom 4.2
Argentina 3.9
France 2.2
Canada 1.4
Italy 1.3
Netherlands 1.2
Australia 0.8
Sweden 0.7
Switzerland 0.7
Finland 0.7
Indonesia 0.7
Russia 0.6
Mexico 0.5
South Korea 0.5
Portugal 0.5
Brazil 0.5
Spain 0.4
Hong Kong 0.4
Norway 0.3
India 0.2
Malaysia 0.2
South Africa 0.1
Singapore 0.1
Philippines 0.1
New Zealand** 0.0
Austria** 0.0
Denmark** 0.0
Europe** 0.0
Ireland** 0.0
------
Total 98.2%
======
[FN]
*Includes investments in short-term securities.
**Holdings are less than 0.1%.
Ten Largest Holdings Percent of
(Equity Investments) Net Assets
Societe Generale 0.6%
AT&T Corp. 0.6
Republic New York Corp. 0.6
Internationale Nederlanden
Groep N.V. 0.6
Noble Drilling Corp. 0.5
Mellon Bank Corp. 0.4
KeyCorp 0.4
Sumitomo Marine & Fire
Insurance Co., Ltd. 0.4
Lend Lease Corporation Limited 0.4
First Commerce Corp. 0.3
Ten Largest Industries Percent of
(Equity Investments) Net Assets
Banking++ 4.9%
Insurance 3.9
Telecommunications 3.1
Utilities--Electric & Gas 1.8
Energy & Petroleum 1.1
Healthcare Services 1.0
Metals 0.8
Pharmaceuticals 0.8
Oil Services 0.7
Paper & Forest Products 0.7
[FN]
++Includes savings banks.
