MERRILL LYNCH
GLOBAL
ALLOCATION
FUND, INC.
FUND LOGO
Semi-Annual Report
April 30, 1998
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.
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 4/30/98
<CAPTION>
Percent of Fund's Portfolio Reference Portfolio
4/30/98 1/31/98 Percentages
<S> <C> <C> <C>
North & South American Equities 19.6%* 19.5%* 36.0%
European Equities 10.7 10.8 11.0
Pacific Basin Equities 7.2 7.4 13.0
Total Equities 37.5 37.7 60.0
US Dollar Denominated Fixed-Income Securities 39.6 38.8 24.0
US Issuers 27.3 27.0 --
Non-US Issuers 12.3 11.8 --
Non-US Dollar Denominated Fixed-Income Securities 9.7 9.8 16.0
Total Fixed-Income Securities 49.3++ 48.6++ 40.0
Cash & Cash Equivalents 13.2 13.7
<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
Bryan N. Ison, Senior Vice President and Portfolio Manager
Donald C. Burke, Vice President
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
Merrill Lynch Global Allocation Fund, Inc., April 30, 1998
DEAR SHAREHOLDER
During the quarter ended April 30, 1998, Merrill Lynch Global
Allocation Fund, Inc.'s Class A, Class B, Class C and Class D Shares
had total returns of +6.68%, +6.43%, +6.50% and +6.69%,
respectively. The Fund earned solid returns, but trailed somewhat
behind the returns of the Reference Portfolio. The Fund
substantially outperformed most fixed-income investments, but lagged
the high returns of most equity markets. (Fund results do not
reflect sales charges, and would be lower if sales charges were
included. Complete performance information can be found on pages 4
and 5 of this report to shareholders.)
Merrill Lynch Global Allocation Fund is conservatively positioned:
overweighted in fixed-income securities and cash equivalents and
underweighted in equities relative to the Fund's Reference
Portfolio. During the April quarter, the Fund's overall investment
stance was little changed, with the weightings of its asset mix
components ending the quarter near their beginning levels. (Please
refer to the "Summary of Fund's Overall Asset Mix" table on page 1
for a complete breakdown of the Fund's asset allocation.)
Most financial markets showed strong results for the April quarter,
especially the equity markets in the United States and Europe. Bond
markets moved modestly higher in Europe and Japan, but bond prices
retreated slightly in the United States after their sharp rally in
the January quarter. However, concerns over Asian economies re-
emerged, and Asian equity markets were unable to maintain the
rebound that they experienced beginning in mid-January, finishing
lower for the quarter as a whole.
Equity Markets
Supported by continued mutual fund inflows, the US stock market
extended the rebound that began in mid-January and moved steadily
upward to attain a succession of new record-high prices through
early April. There were many merger and acquisition announcements,
and several of the transactions involved exceptionally big
combinations. (Recently, the Fund has benefited from the merger
activity through bids for several portfolio holdings, including
Waste Management, Inc. and, subsequent to the quarter-end, Western
Atlas, Inc., as well as Stone Container Corporation.)
Large-capitalization stocks again led the move upward. These gains
occurred despite a small rise in interest rates, slowing profits
growth and a virtually continuous slide in expectations for future
corporate earnings. US stocks remained quite expensive by historical
standards, and the Fund was underweighted compared to the Reference
Portfolio. While we have been able to find attractive opportunities
from time to time in individual companies, we were a net seller of
US stocks during the quarter. We also wrote call options against
some of the portfolio holdings in order to increase income and
cushion potential losses. However, appreciation in the Fund's stocks
was nearly large enough to offset sales, leaving the Fund's US stock
weighting virtually unchanged for the quarter. As of April 30, 1998,
US stocks represented 18.5% of the Fund's net assets.
The situation in European stocks was similar. European equity
markets were exceptionally strong, supported by falling interest
rates, recovering economies, corporate restructurings and increasing
valuations. We were a net seller of European stocks, but again,
appreciation of existing holdings approximately offset the effect of
the sales, leaving the Fund's weighting virtually unchanged for the
quarter at 10.7% of net assets. At April 30, 1998, the Fund was
modestly underweighted in European equities relative to the
Reference Portfolio, since their price appreciation has increased
their portion of world stock market capitalization, and we did not
increase the Fund's European equity exposure. The fundamentals
supporting European equities remained generally positive, but we
believe that valuation measures reflected this optimistic outlook.
The equity market situation in Asia was different. After the plunge
in the second half of 1997, most Asian equity markets reached bottom
in mid-January 1998 and rebounded sharply. However, unlike the
United States and Europe, Asian markets were unable to extend these
gains. Taken together, these markets reached a short-term peak in
February, drifted and sold off to end the quarter with losses, but
still were above the lows set in January. The most conspicuous
problems became visible in Indonesia, where economic grief spilled
into political turmoil and violence in the streets. In South Korea,
a combination of economic recession and financial leverage
precipitated a wave of corporate liquidity problems. Many Asian
stocks are inexpensive compared to those in other major markets;
however, the larger and better-situated companies are typically not
inexpensive in absolute terms. Also, the fundamentals in many of
these countries are still poor, notably with respect to corporate
financial leverage, financial system durability and intermediate-
term economic growth. Following some purchases of Asian securities
in the January quarter, we made modest sales of Asian stocks during
the period of market strength early in the quarter, primarily in
Japan. These sales, plus the underperformance of Asia in the world's
markets, led to a slight reduction in the Fund's Pacific Basin
weighting to 7.2% of net assets.
The Fund's Asian equity exposure is primarily in Japan, where the
Fund has a weighting of 4.4%, about equal to the weighting in the
Reference Portfolio. Despite its current economic problems, Japan
remains the world's second-largest economy and its largest source of
savings. Japanese equities sell at the lowest levels in decades on a
number of measures of financial valuation, and are inexpensively
valued compared to equities in other large economies. At current
prices, investors have the opportunity to own Japanese stocks at
their lowest prices in many years relative to other major equity
markets as they await an improvement in the financial outlook and a
turnaround in investor confidence. Of note, during the quarter, the
total value of the Japanese equity market--once the largest of any
country--fell to third place in the world, behind the United States
and Britain, and now is approximately one-fifth the size of the US
stock market. The Fund's weighting in Pacific Basin equities outside
Japan and Australia was approximately 1.2% at April 30, 1998.
Bond Markets
During the quarter ended April 30, 1998, bond prices in the United
States fell modestly, reversing some of their strength from the
previous quarter, but income from these issues led to positive total
returns for short and intermediate maturities. The soft tone in the
US bond market reflected the surprising durability of US economic
growth. There was also growing concern that rather than cutting
interest rates in response to Asia-related weakness, the Federal
Reserve Board might lean toward increasing rates in response to
strength in economic growth, employment, housing, asset prices and
money supply growth. Mitigating this worry was the ongoing lack of
consumer price inflation. In addition, commodity prices remained
weak, notably including crude oil which declined to set multi-year
lows after quarter-end. The Fund was overweighted in US fixed-income
securities because they offered a better risk/return tradeoff than
equities, in our opinion. The US fixed-income position included a
substantial portion of dollar-denominated convertible bonds of both
non-US and US issuers, representing 11.3% of the Fund's net assets.
European fixed-income markets generally moved higher over the April
quarter. As the scheduled 1999 advent of the single European
currency approaches, the bond yields of the initial member countries
have tended to converge, benefiting investors in the previously
higher-yielding countries. As yields fell to less attractive levels,
we continued to take profits and reduced the Fund's European fixed-
income securities from 8.7% of net assets to 7.9%.
Japanese bond prices increased further during the April quarter,
bringing yields down to about 1.5% on the benchmark ten-year
Japanese government bonds. The exceedingly low interest rates
reflect poor returns available to investors in the Japanese economy,
high savings rates, deflation, a weakening economy, easy monetary
policy, pessimism on the part of investors and lenders, and
institutional preferences for "safe" investments. However, we do not
share the view that these yields are attractive. Moreover, in the
future, investors may look back on this as an unusually poor level
for establishing long-term Japanese fixed-income investments, in our
opinion. The Fund's Japanese fixed-income securities are primarily
convertible bonds.
Merrill Lynch Global Allocation Fund, Inc., April 30, 1998
Elsewhere in Asia (including positions in South Korea, Malaysia,
Singapore, Indonesia and the Philippines), the Fund held investments
in dollar-denominated convertible securities as well as some dollar-
denominated non-convertible bonds that generally offered yields well
above those of US Treasury securities of similar maturity. We hedged
part of the Fund's exposure to the Japanese yen and other foreign
currencies, and we remain overweighted in the dollar relative to the
Reference Portfolio. The weighting in the dollar, including both
dollar-denominated assets and the portion of non-dollar assets that
is hedged back into dollars, was little changed at 78% of the Fund.
The Fund's cash and cash equivalent position was slightly lower at
13.2% of net assets at April 30, 1998.
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 upcoming quarterly report to
shareholders.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Bryan N. Ison)
Bryan N. Ison
Senior Vice President and
Portfolio Manager
June 11, 1998
Merrill Lynch Global Allocation Fund, Inc., April 30, 1998
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.)
* 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 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.
<TABLE>
Recent
Performance
Results
<CAPTION>
12 Month 3 Month Since Inception
Total Return Total Return Total Return
<S> <C> <C> <C>
ML Global Allocation Fund, Inc.--Class A Shares* +17.75% + 6.68% +247.48%
ML Global Allocation Fund, Inc.--Class B Shares* +16.61 + 6.43 +216.30
ML Global Allocation Fund, Inc.--Class C Shares* +16.65 + 6.50 + 63.55
ML Global Allocation Fund, Inc.--Class D Shares* +17.56 + 6.69 + 68.19
US Stocks: Standard &Poor's 500 Index**++ +41.07 +13.84 +395.41/+157.86
Non-US Stocks: Financial Times/Standard & Poor's--
Actuaries World Index (Ex-US)***++ +17.11 +10.40 +62.60/+31.25
US Bonds: ML Government Index GA05****++ + 9.55 + 0.14 +104.97/+31.63
Non-US Bonds:Salomon Brothers World Government
Bond Index (Ex-US)*****+++ + 6.44 + 1.93 +109.89/+19.42
<FN>
*Investment results shown do not reflect sales charges; results
shown would be lower if a sales charge was included. Total
investment returns are based on changes in net asset values for the
periods shown, and assume reinvestment of all dividends and capital
gains distributions at net asset value on the ex-dividend date. The
Fund's inception dates are:Class A Shares and Class B Shares,
2/03/89; and Class C Shares and Class D Shares, 10/21/94.
**An unmanaged broad-based index comprised of common stocks.
***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.
++Since inception total returns are: from 2/03/89 to 4/30/98 and
10/21/94 to 4/30/98, respectively.
+++Since inception total returns are: from 1/31/89 to 4/30/98 and
10/21/94 to 4/30/98, respectively.
</TABLE>
Average Annual
Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 3/31/98 +18.86% +12.62%
Five Years Ended 3/31/98 +13.90 +12.68
Inception (2/3/89) through 3/31/98 +14.57 +13.90
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 3/31/98 +17.65% +13.65%
Five Years Ended 3/31/98 +12.75 +12.75
Inception (2/3/89) through 3/31/98 +13.41 +13.41
[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 3/31/98 +17.70% +16.70%
Inception (10/21/94) through 3/31/98 +15.37 +15.37
[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 3/31/98 +18.60% +12.38%
Inception (10/21/94) through 3/31/98 +16.29 +14.48
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
Merrill Lynch Global Allocation Fund, Inc., April 30, 1998
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.
BRE Brazilian Cruzeiro
CAD Canadian Dollar
CHF Swiss Franc
DEM German Deutschemark
ECU European Currency Unit
ESP Spanish Peseta
FRF French Franc
GBP Great Britain Pound
JPY Japanese Yen
NLG Netherlands Guilder
NOK Norwegian Krone
NZD New Zealand Dollar
PHP Philippine Peso
SEK Swedish Kroner
USD United States Dollar
ZAL South African Rand
<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 Banking 467,900 Banco Frances del Rio de la Plata
S.A. (ADR)* (USD) $ 11,254,989 $ 13,598,344 0.1%
2,133,900 ++Banco Rio de La Plata S.A. (ADR)*
(USD) 22,946,904 29,341,125 0.2
--------------- --------------- ------
34,201,893 42,939,469 0.3
Oil--Related 480,000 Yacimientos Petroliferos Fiscales
S.A. (ADR)* (USD) 10,296,490 16,740,000 0.1
Total Common Stocks in Argentina 44,498,383 59,679,469 0.4
Australia Beverages 1,999,379 Foster's Brewing Group Limited 3,509,519 4,350,669 0.0
Building 718,547 Pioneer International Limited 1,814,681 2,050,424 0.0
Materials
Foods 5,566,000 Goodman Fielder Wattie Ltd. 5,875,419 8,630,473 0.1
Insurance 1,903,135 GIO Australia Holdings, Ltd. 3,728,816 5,455,527 0.0
Metals & 8,102,904 M.I.M. Holdings Ltd. 6,735,707 5,067,880 0.0
Mining 5,000,000 Normandy Mining Limited 4,368,274 5,570,325 0.1
16,990,927 Pasminco Limited 18,601,927 17,932,734 0.1
8,700,000 WMC Limited 29,191,616 30,947,553 0.2
--------------- --------------- ------
58,897,524 59,518,492 0.4
Multi-Industry 1,661,317 Lend Lease Corporation Limited 27,855,090 38,098,651 0.3
2,300,000 Pacific Dunlop, Ltd. 5,753,464 4,255,598 0.1
--------------- --------------- ------
33,608,554 42,354,249 0.4
Resources 8,965,582 Broken Hill Proprietary Co., Ltd. 98,474,864 87,616,150 0.6
Tobacco 103,620 Rothmans Holdings, Ltd. 390,312 691,961 0.0
1,122,300 WD & HO Wills Holdings, Ltd. 1,256,693 1,827,946 0.0
--------------- --------------- ------
1,647,005 2,519,907 0.0
Total Common Stocks in Australia 207,556,382 212,495,891 1.5
Canada Beverages 1,900,000 Cott Corp. (USD) 15,484,918 11,103,125 0.0
Metals-- 1,427,400 Inco Ltd. (USD) 29,691,234 25,068,713 0.2
Non-Ferrous
Multi-Industry 280,000 ++Semi-Tech Corporation (Class A) 4,108,297 97,888 0.0
Paper 3,250,000 ++Repap Enterprises Inc. (USD) 12,879,320 763,750 0.0
Telecommuni- 1,165,200 ++Rogers Cantel Mobile Communications
cations Inc. (Class B)(s) 22,391,633 12,465,082 0.1
1,260,900 ++Rogers Cantel Mobile Communications
Inc. (Class B)(USD)(s) 20,941,379 13,554,675 0.1
4,543,700 ++Rogers Communications Inc. (Class B) 39,359,870 28,275,017 0.2
--------------- --------------- ------
82,692,882 54,294,774 0.4
Total Common Stocks in Canada 144,856,651 91,328,250 0.6
Finland Metals 645,093 Outokumpu OY 9,461,428 9,063,290 0.1
Paper & 964,985 Enso OY 8,072,452 10,278,995 0.1
Forest Products 2,909,250 Metsa Serla OY 'B' 23,657,400 30,187,810 0.2
639,478 UPM-Kymmene OY 12,090,735 19,201,956 0.1
--------------- --------------- ------
43,820,587 59,668,761 0.4
Total Common Stocks in Finland 53,282,015 68,732,051 0.5
France Automobiles 123,745 Peugeot S.A. 14,457,328 21,485,436 0.2
Banking 119,155 Banque Nationale de Paris S.A. 5,267,865 10,046,996 0.1
173,900 Compagnie Financiere de Paribas S.A. 9,343,179 18,509,538 0.1
233,386 Societe Generale de France S.A. 24,013,475 48,595,399 0.3
58,000 Societe Generale de France S.A.
(New Shares) 7,499,838 11,960,951 0.1
--------------- --------------- ------
46,124,357 89,112,884 0.6
Electronics 75,299 ++SGS-Thomson Microelectronics N.V. 3,487,840 6,436,775 0.0
Energy & 233,754 Elf Aquitaine (Elf) S.A. 25,214,635 30,672,705 0.2
Petroleum
Engineering & 212,968 Bouygues S.A. 20,353,497 33,612,172 0.2
Construction
Hotel/Leisure 39,290 Accor S.A. 5,495,688 10,709,692 0.1
Industrial 42,028 Alcatel Alsthom Cie Generale
d'Electricite S.A. 4,765,168 7,793,447 0.1
Insurance 157,284 AXA--UAP S.A. 10,044,372 18,467,379 0.1
Metals/Steel 1,477,394 Usinor-Sacilor S.A. 22,060,574 22,113,366 0.2
Multi-Industry 85,162 EuraFrance S.A. 30,279,790 47,871,669 0.3
Total Common Stocks in France 182,283,249 288,275,525 2.0
Germany Automotive 52,726 Volkswagen AG 28,614,929 41,998,581 0.3
Banking 55,680 Bayerische Vereinsbank AG 1,339,965 4,236,522 0.0
Capital Goods 369,636 ++Kloeckner-Werke AG 17,229,762 26,208,305 0.2
Chemicals 351,035 BASF AG 13,431,500 15,634,168 0.1
776,934 Bayer AG 29,992,002 34,559,272 0.2
101,451 Henkel KGaA 4,390,556 7,097,046 0.1
742,125 Hoechst AG 27,123,815 29,945,612 0.2
--------------- --------------- ------
74,937,873 87,236,098 0.6
Engineering & 32,565 ++Philipp Holzmann AG 12,268,030 9,638,804 0.1
Construction
Metals/Steel 172,193 Thyssen AG 37,040,112 39,372,112 0.3
Retail 29,472 Karstadt AG 10,289,552 13,306,756 0.1
Total Common Stocks in Germany 181,720,223 221,997,178 1.6
Hong Banking 900,737 HSBC Holdings PLC 14,386,653 25,697,801 0.2
Kong 899,577 HSBC Holdings PLC (GBP) 27,212,308 28,361,860 0.2
--------------- --------------- ------
41,598,961 54,059,661 0.4
Multi-Industry 6,554,500 Hutchison Whampoa Ltd. 42,966,372 40,530,389 0.3
Total Common Stocks in Hong Kong 84,565,333 94,590,050 0.7
</TABLE>
Merrill Lynch Global Allocation Fund, Inc., April 30, 1998
<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>
Indonesia Paper & Pulp 4,671,800 ++Asia Pacific Resources
International Holdings Ltd.
(NY Registered Shares)(USD) $ 25,834,218 $ 12,555,462 0.1%
553,765 Asia Pulp & Paper Company Ltd.
(ADR)* (USD) 6,368,298 8,064,203 0.0
--------------- --------------- ------
32,202,516 20,619,665 0.1
Tobacco 19,327,000 P.T. Hanjaya Mandala Sampoerna
(Foreign) 28,087,780 12,583,623 0.1
Total Common Stocks in Indonesia 60,290,296 33,203,288 0.2
Ireland Building & 631,423 CRH PLC (GBP) 6,857,511 9,002,580 0.1
Construction
Total Common Stocks in Ireland 6,857,511 9,002,580 0.1
Italy Banking 1,010,440 Istituto Bancario San Paolo di
Torino S.p.A. 6,405,831 14,608,084 0.1
408,400 Istituto Mobiliare Italiano
S.p.A. (Ordinary) 3,025,905 6,688,465 0.0
--------------- --------------- ------
9,431,736 21,296,549 0.1
Multi-Industry 41,311,990 MontEdison S.p.A. 31,345,924 52,143,045 0.4
Telecommuni- 2,251,300 Telecom Italia Mobile S.p.A.--RISP 2,379,178 8,174,987 0.1
cations 7,381,922 Telecom Italia S.p.A.--RISP 15,281,943 38,936,694 0.3
--------------- --------------- ------
17,661,121 47,111,681 0.4
Total Common Stocks in Italy 58,438,781 120,551,275 0.9
Japan Automobiles & 3,282,000 Suzuki Motor Corp. 30,510,247 28,286,247 0.2
Equipment
Beverages 1,570,000 Chukyo Coca-Cola Bottling
Co., Ltd. 16,445,371 12,722,660 0.1
663,000 Hokkaido Coca-Cola Bottling
Co., Ltd. 8,836,164 6,738,458 0.0
790,000 Kinki Coca-Cola Bottling
Co., Ltd. 11,999,955 9,333,535 0.1
1,243,000 Mikuni Coca-Cola Bottling
Co., Ltd. 17,391,669 20,239,700 0.1
1,426,400 Sanyo Coca-Cola Bottling
Co., Ltd. 17,532,122 14,821,424 0.1
--------------- --------------- ------
72,205,281 63,855,777 0.4
Capital Goods 2,736,000 Fuji Heavy Industries, Ltd. 11,273,188 12,287,549 0.1
12,900,000 Kawasaki Heavy Industries, Ltd. 35,297,925 26,964,556 0.2
7,875,000 Mitsubishi Heavy Industries, Inc. 44,268,610 29,224,099 0.2
--------------- --------------- ------
90,839,723 68,476,204 0.5
Chemicals 34,000 Shin-Etsu Chemical Co., Ltd. 657,132 664,344 0.0
Consumer Products 50,000 Amway Japan Limited (Premium
Exchangeable Participating Shares)(USD) 721,750 453,125 0.0
Electrical 1,124,000 Chudenko Corp. 30,032,358 26,048,470 0.2
Construction 1,386,000 Kinden Corporation 21,348,708 18,222,478 0.1
34,000 Taihei Dengyo Kaisha, Ltd. 637,020 141,624 0.0
--------------- --------------- ------
52,018,086 44,412,572 0.3
Electrical 788,000 Murata Manufacturing Co., Ltd. 25,168,052 23,155,407 0.2
Equipment
Electronics 1,299,000 Hitachi Ltd. 9,381,584 9,336,194 0.1
Financial 9,387,000 Daiwa Securities Co., Ltd. 46,956,803 35,546,047 0.2
Services 928,000 Kokusai Securities Co., Ltd. 6,296,169 8,026,174 0.1
879,000 Nomura Securities Co., Ltd. 11,893,928 10,751,174 0.1
1,720,000 ++Wako Securities Co., Ltd. 4,377,152 2,735,535 0.0
--------------- --------------- ------
69,524,052 57,058,930 0.4
Industrial 28,000 Miura Kogyo Co., Ltd. 466,635 267,192 0.0
17,400 Nitto Kohki Co., Ltd. 488,740 201,621 0.0
--------------- --------------- ------
955,375 468,813 0.0
Insurance 743,000 Chiyoda Fire & Marine Insurance
Co., Ltd. 2,796,009 2,909,202 0.0
2,897,000 Dai-Tokyo Fire & Marine Insurance
Co., Ltd. 17,990,037 10,641,056 0.1
125,000 Dowa Fire & Marine Insurance Co.,
Ltd. 441,340 402,340 0.0
3,743,000 Fuji Fire & Marine Insurance Co.,
Ltd. 13,980,452 8,929,453 0.1
4,865,000 Koa Fire & Marine Insurance Co.,
Ltd. 24,748,402 20,817,366 0.2
765,000 Mitsui Marine & Fire Insurance
Co., Ltd. 5,730,161 3,933,922 0.0
3,508,000 Nichido Fire & Marine Insurance
Co., Ltd. 20,622,267 18,836,504 0.1
4,816,000 Nippon Fire & Marine Insurance
Co., Ltd. 20,479,413 19,513,481 0.1
999,000 Nisshin Fire & Marine Insurance
Co., Ltd. 2,688,731 2,912,867 0.0
7,315,000 Sumitomo Marine & Fire Insurance
Co., Ltd. 46,067,731 43,710,504 0.3
2,713,000 Tokio Marine & Fire Insurance
Co., Ltd. 28,580,732 29,587,398 0.2
5,000,000 Yasuda Fire & Marine Insurance
Co., Ltd. 25,976,040 22,720,388 0.2
--------------- --------------- ------
210,101,315 184,914,481 1.3
Office Equipment 1,612,000 Canon, Inc. 23,455,745 38,212,360 0.3
Packaging & 1,103,000 Toyo Seikan Kaisha, Ltd. 25,118,395 14,242,767 0.1
Containers
Pharmaceuticals 1,261,000 Sankyo Pharmaceuticals Co., Ltd. 28,124,373 31,324,447 0.2
384,000 Taisho Pharmaceuticals Co. 7,984,458 8,142,987 0.1
--------------- --------------- ------
36,108,831 39,467,434 0.3
Restaurants 647,000 Mos Food Services, Inc. 12,121,005 8,256,551 0.1
618,000 Ohsho Food Service Corp. 10,180,663 5,944,108 0.0
--------------- --------------- ------
22,301,668 14,200,659 0.1
Retail Stores 460,000 Ito Yokado Co., Ltd. 21,319,319 23,863,981 0.2
100,000 Sangetsu Co., Ltd. 3,160,832 1,279,915 0.0
--------------- --------------- ------
24,480,151 25,143,896 0.2
Total Common Stocks in Japan 693,547,387 612,349,210 4.4
Mexico Finance 6,054 Grupo Financiero Inbursa, S.A.
de C.V. (ADR)* (USD) 121,464 89,962 0.0
Foods 700,000 Grupo Industrial Maseca, S.A.
de C.V. (ADR)* (USD) 7,969,925 7,700,000 0.1
Multi-Industry 433,800 Grupo Carso, S.A. de C.V. (ADR)*
(USD) 3,832,850 5,296,698 0.0
Telecommunications 433,800 Global Telecommunications
Solutions, Inc. (ADR)* (USD) 2,060,550 3,158,064 0.0
Total Common Stocks in Mexico 13,984,789 16,244,724 0.1
Nether- Chemicals 143,576 Akzo N.V. 17,876,528 29,212,741 0.2
lands 288,070 European Vinyls Corp.
International N.V. 11,384,340 5,633,052 0.0
--------------- --------------- ------
29,260,868 34,845,793 0.2
Electronics 442,765 Philips Electronics N.V. 22,551,548 39,015,926 0.3
Distribution
Forest Products 1,824,457 Koninklijke KNP N.V. 40,980,634 50,127,408 0.4
Insurance 958,493 Internationale Nederlanden
Groep N.V. 15,908,091 62,302,045 0.4
Miscellaneous-- 10,000 Koninklijke Ten Cate N.V. 501,699 424,257 0.0
Manufacturing
</TABLE>
Merrill Lynch Global Allocation Fund, Inc., April 30, 1998
<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>
Nether- Steel 161,800 ++Ispat International N.V. $ 4,382,262 $ 4,613,703 0.0%
lands 332,509 ++Ispat International N.V. (NY
(concluded) Registered Shares) (USD) 7,856,989 9,310,252 0.1
--------------- --------------- ------
12,239,251 13,923,955 0.1
Telecommunications 548,341 Royal PTT Nederland N.V. 19,445,388 28,340,000 0.2
Transportation 111,846 Koninklijke Pakhoed N.V. 4,339,539 4,097,329 0.0
Total Common Stocks in the
Netherlands 145,227,018 233,076,713 1.6
New Natural Gas 1,477,104 Natural Gas Corporation
Zealand Suppliers Holdings Limited 1,043,960 1,640,176 0.0
Total Common Stocks in New Zealand 1,043,960 1,640,176 0.0
Norway Banking 4,785,400 Christiania Bank Og Kreditkasse 10,697,335 22,012,019 0.1
2,434,000 Den Norske Bank ASA 7,189,721 12,795,408 0.1
--------------- --------------- ------
17,887,056 34,807,427 0.2
Oil & Gas 781,330 Saga Petroleum ASA 11,845,630 13,935,856 0.1
Producers
Total Common Stocks in Norway 29,732,686 48,743,283 0.3
Philip- Multi-Industry 5,279,600 Ayala Corporation 1,948,253 2,339,898 0.0
pines
Total Common Stocks in the
Philippines 1,948,253 2,339,898 0.0
Portugal Banking 181,026 Banco Comercial Portugues, S.A.
(BCP) 2,925,343 6,348,215 0.0
715,346 Banco Comercial Portugues, S.A.
(BCP)(Registered) 10,409,509 24,852,341 0.2
Total Common Stocks in Portugal 13,334,852 31,200,556 0.2
Russia Telecommuni- 1,611,800 ++PLD Telekom Inc. (s)(USD) 10,028,238 13,095,875 0.1
cations 74,500 PLD Telekom Inc. (Warrants)(a)
(s)(USD) 111,751 216,050 0.0
18,700 PLD Telekom Inc. (Warrants)
(a)(s)(USD) 30,855 57,035 0.0
Total Common Stocks in Russia 10,170,844 13,368,960 0.1
South Steel 524,760 Pohang Iron & Steel Co., Ltd. 22,205,189 28,252,528 0.2
Korea
Telecommuni- 2,893 SK Telecom Co., Ltd. 1,016,559 1,647,385 0.0
cations 1,006,587 SK Telecom Co., Ltd. (ADR)* (USD) 5,226,630 7,486,491 0.1
--------------- --------------- ------
6,243,189 9,133,876 0.1
Utilities-- 200,000 Korea Electric Power Corporation 2,429,353 2,726,592 0.0
Electric
Total Common Stocks in South Korea 30,877,731 40,112,996 0.3
Spain Insurance 66,778 Mapfre S.A. 1,272,758 2,620,464 0.0
Utilities-- 564,132 Endesa S.A. 9,589,741 13,697,017 0.1
Electric
Total Common Stocks in Spain 10,862,499 16,317,481 0.1
Sweden Appliances 275,459 Electrolux AB 'B' Free 14,120,645 25,636,348 0.2
Automotive & 43,916 Scania AB (Warrants)(a) 60,444 34,344 0.0
Equipment
Industrial 119,420 SKF AB 'A' 2,217,257 2,315,448 0.0
Insurance 310,815 Skandia Forsakring AB Free 8,514,650 21,654,962 0.1
Metals/Steel 1,227,828 Avesta Sheffield AB 10,687,487 7,840,273 0.1
Multi-Industry 192,784 Svedala Industri AB Free 2,531,671 4,597,630 0.0
Paper & Forest 411,853 Mo och Domsjo AB (Class B) 10,072,522 12,776,743 0.1
Products 885,017 Stora Kopparbergs Bergslags AB 9,945,034 15,157,731 0.1
--------------- --------------- ------
20,017,556 27,934,474 0.2
Total Common Stocks in Sweden 58,149,710 90,013,479 0.6
Switzer- Electronic 69,850 Societe Suisse pour la Micro-
land Components electronique et l'Horlogerie AG
(Registered) 9,809,595 10,480,994 0.1
Multi-Industry 113,649 Oerlikon-Buehrle Holding Ltd. 11,749,979 19,402,564 0.1
Pharmaceuticals 4,858 Novartis AG (Registered) 7,678,791 8,034,572 0.1
Total Common Stocks in Switzerland 29,238,365 37,918,130 0.3
Thailand Holding Company 1,373,300 BEC World Public Co., Ltd. (Foreign) 8,876,272 7,291,858 0.0
Total Common Stocks in Thailand 8,876,272 7,291,858 0.0
United Banking 1,216,181 National Westminster Bank PLC 15,779,585 24,322,983 0.2
Kingdom
Chemicals 1,470,000 Inspec Group PLC 4,431,923 7,196,303 0.1
Computers 157,411 Misys PLC 2,160,725 7,561,316 0.1
Energy & Related 724,323 Energy Group PLC 7,684,595 10,147,518 0.1
6,250 Energy Group PLC (ADR)* (USD) 226,417 351,953 0.0
--------------- --------------- ------
7,911,012 10,499,471 0.1
Environmental 1,240,000 ++Waste Management International PLC
(ADR)* (USD) 11,399,133 9,997,500 0.1
Food & Beverage 1,756,839 Allied Domecq PLC 12,616,881 18,052,259 0.1
672,142 Bass PLC 9,822,359 12,746,219 0.1
631,110 Matthew Clark PLC 6,157,510 2,087,828 0.0
--------------- --------------- ------
28,596,750 32,886,306 0.2
Holding Company 10,579,223 BTR PLC 35,874,337 35,130,585 0.3
Manufacturing-- 4,731,768 LucasVarity PLC 15,226,665 21,128,352 0.2
Automotive
Supplies
Metals & Mining 858,223 Rio Tinto PLC 12,434,329 12,310,195 0.1
Multi-Industry 6,250 Hanson PLC (ADR)* (USD) 353,583 185,156 0.0
Pharmaceuticals 716,673 SmithKline Beecham PLC 8,050,842 8,537,585 0.1
Retail/Food 967,650 J. Sainsbury PLC 6,001,425 7,574,472 0.1
1,610,493 Safeway PLC 9,038,358 9,592,744 0.1
--------------- --------------- ------
15,039,783 17,167,216 0.2
Retail Stores 301,675 ++Signet Group PLC (ADR)* (USD) 461,861 6,391,739 0.0
Steel 3,766,219 British Steel PLC 8,745,693 10,005,232 0.1
Telecommuni- 1,598,955 Cable & Wireless PLC 10,985,936 18,300,008 0.1
cations 917,333 ++Ionica Group PLC 4,556,654 1,348,758 0.0
2,290,000 ++Ionica PLC (r) 10,286,966 3,290,474 0.0
1,526,667 Ionica PLC (Warrants)(a)(r) -- 25,508 0.0
2,971,509 Unilever PLC 14,979,521 31,625,758 0.2
--------------- --------------- ------
40,809,077 54,590,506 0.3
</TABLE>
Merrill Lynch Global Allocation Fund, Inc., April 30, 1998
<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 Tobacco 2,787,884 B.A.T. Industries PLC $ 23,744,589 $ 26,271,101 0.2%
Kingdom 12,500 Imperial Tobacco Group PLC
(concluded) (ADR)* (USD) 238,391 180,785 0.0
--------------- --------------- ------
23,982,980 26,451,886 0.2
Total Common Stocks in the
United Kingdom 231,258,278 284,362,331 2.3
United Aerospace & 9,565 Raytheon Company (Class A) 307,416 527,868 0.0
States Defense
Apparel 700,000 ++Fruit of the Loom, Inc. (Class A) 18,572,062 26,162,500 0.2
100,000 Liz Claiborne, Inc. 2,016,276 4,918,750 0.0
--------------- --------------- ------
20,588,338 31,081,250 0.2
Automobiles 150,000 General Motors Corp. 5,384,509 10,106,250 0.1
Automotive 400,000 ++Collins & Aikman Group Inc. 2,792,538 3,275,000 0.0
Banking 259,000 Banknorth Group, Inc. 1,865,422 9,324,000 0.1
756,300 First Commerce Corp. 18,939,035 61,543,913 0.4
950,000 ++Golden State Bancorp Inc. 13,232,157 37,050,000 0.3
770,194 Golden State Bancorp Inc.
(Warrants)(a) -- 20,939,649 0.2
1,400,000 KeyCorp 20,571,401 55,562,500 0.4
865,800 Mellon Bank Corp. 17,209,199 62,337,600 0.4
199,425 Oriental Financial Group 3,509,880 8,301,066 0.1
760,000 Republic New York Corp. 33,998,213 101,650,000 0.7
--------------- --------------- ------
109,325,307 356,708,728 2.6
Broadcasting/ 49,450 People's Choice TV Corp.
Cable (Warrants)(a) 226,458 495 0.0
Building 500,000 Chicago Bridge & Iron Company
Products N.V. (NY Registered Shares)(USD) 8,322,525 8,125,000 0.1
567,892 Flowserve Corporation 14,089,137 16,965,773 0.1
--------------- --------------- ------
22,411,662 25,090,773 0.2
Business Data 93,900 ++Imation Corp. 1,552,054 1,772,362 0.0
Processing
Business 1,300,000 ++Information Resources, Inc. 15,395,567 24,212,500 0.2
Data Systems
Chemicals 300,000 Geon Company (The) 5,955,557 7,162,500 0.1
Communication 532,000 ++ADC Telecommunications, Inc. 9,154,259 15,893,500 0.1
Equipment
Computer Services 200,000 Electronic Data Systems Corp. 8,356,515 8,600,000 0.1
Computer Software 337,500 ++Boole & Babbage, Inc. 1,329,492 8,078,906 0.1
2,400,000 ++Borland International Corp. (s) 33,535,053 23,850,000 0.2
1,300,000 Oracle Corporation 26,933,360 33,637,500 0.2
--------------- --------------- ------
61,797,905 65,566,406 0.5
Computers & 1,100,000 ++Iomega Corporation 8,231,930 8,662,500 0.1
Technology 1,092,300 ++Komag, Inc. 18,786,335 16,862,381 0.1
1,125,300 ++Silicon Graphics, Inc. 16,988,580 14,699,231 0.1
500,000 ++Stratus Computer, Inc. 9,130,512 21,781,250 0.2
--------------- --------------- ------
53,137,357 62,005,362 0.5
Construction 200,000 ++Hovnanian Enterprises, Inc.
& Housing (Class A) 1,750,602 2,125,000 0.0
Construction 500,000 TJ International, Inc. 8,846,801 15,312,500 0.1
Products
Consumer-- 90,770 ++Ascent Entertainment Group, Inc. 631,090 1,043,855 0.0
Miscellaneous
Containers 1,008,000 ++Stone Container Corporation 12,596,036 16,506,000 0.1
Electronics 500,000 ++3Com Corporation 14,968,750 17,125,000 0.1
2,300,000 ++Cabletron Systems, Inc. 34,233,860 30,475,000 0.2
1,632,800 ++Checkpoint Systems, Inc. 18,248,762 30,512,950 0.2
1,250,000 ++MEMC Electronic Materials, Inc. 24,090,092 17,578,125 0.1
120,000 Millipore Corporation 4,128,026 4,140,000 0.0
450,000 Motorola, Inc. 24,791,250 25,031,250 0.2
1,000,000 ++Silicon Valley Group, Inc. 18,066,194 19,000,000 0.1
--------------- --------------- ------
138,526,934 143,862,325 0.9
Energy & 992,400 Arch Coal, Inc. 26,683,943 25,430,250 0.2
Petroleum 46,400 Mitchell Energy Development
Corp. (Class A) 675,717 1,160,000 0.0
174,350 Mitchell Energy Development Corp.
(Class B) 2,755,451 4,402,338 0.0
50,000 Murphy Oil Corp. 1,688,446 2,571,875 0.0
1,500,000 Occidental Petroleum Corp. 28,058,743 44,156,250 0.3
235,828 ++Plains Resources, Inc. 1,381,815 4,952,388 0.0
1,402,978 ++Santa Fe Energy Resources, Inc. 7,579,573 14,468,211 0.1
2,000,000 ++TransTexas Gas Corp. 30,359,821 23,625,000 0.2
200,000 USX-Marathon Group 3,413,440 7,162,500 0.1
--------------- --------------- ------
102,596,949 127,928,812 0.9
Fertilizers 164,700 IMC Global Inc. 5,248,656 5,929,200 0.0
Financial 163,600 American Capital Strategies, Ltd. 2,454,000 3,619,650 0.0
Services 1,972,900 ++Anthracite Capital, Inc. 29,662,250 27,620,600 0.2
--------------- --------------- ------
32,116,250 31,240,250 0.2
Forest Products 394,200 Deltic Timber Corporation 11,221,223 11,259,337 0.1
Gaming 1,235,000 ++Scientific Games Holdings
Corp. (c)(s) 27,568,304 27,478,750 0.2
Healthcare 360,000 ++Advocat, Inc. (s) 3,422,500 3,375,000 0.0
Services 450,000 Baxter International, Inc. 9,088,023 24,946,875 0.2
1,300,000 ++Beverly Enterprises, Inc. 10,532,619 20,475,000 0.1
700,000 ++Humana, Inc. 13,206,455 18,900,000 0.1
2,200,000 ++Oxford Health Plans, Inc. 46,828,521 37,537,500 0.3
728,160 ++PharMerica, Inc. 5,343,052 10,103,220 0.1
1,225,740 US Surgical Corp. 27,641,430 38,610,810 0.3
--------------- --------------- ------
116,062,600 153,948,405 1.1
Holding Company 5,000 American Banknote Corp. (Warrants)(a) 49,261 50,000 0.0
Industrial 100,000 ++American Standard, Inc. 2,986,000 4,868,750 0.0
15,000 Bar Technologies Ltd. (Warrants)(a) 838,256 825,000 0.0
179,802 Cooper Industries, Inc. 6,534,892 12,024,259 0.1
2,830,246 ++Crown Packaging Holdings Ltd. (q) 1,433,657 28,302 0.0
--------------- --------------- ------
11,792,805 17,746,311 0.1
Insurance 100,000 Aetna Inc. 9,042,500 8,081,250 0.1
410,000 American General Corp. 10,594,632 27,316,250 0.2
186,300 Horace Mann Educators, Inc. 2,143,167 6,404,062 0.0
1,947,500 ++Risk Capital Holdings Inc. (s) 34,313,406 48,809,219 0.3
--------------- --------------- ------
56,093,705 90,610,781 0.6
Manufacturing 200,000 ITT Industries Inc. 4,175,065 7,287,500 0.1
</TABLE>
Merrill Lynch Global Allocation Fund, Inc., April 30, 1998
<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 Metals 305,000 Aluminum Co. of America $ 13,814,815 $ 23,637,500 0.2%
States & Mining 1,400,000 Battle Mountain Gold Company 8,838,297 10,062,500 0.1
(continued) 716,300 Commonwealth Industries Inc. 13,043,650 12,087,562 0.1
100,000 ++National Steel Corp. 905,000 1,868,750 0.0
850,000 Newmont Mining Corporation 31,553,907 27,359,375 0.2
400,000 Nucor Corporation 18,363,133 23,975,000 0.2
132,800 Reynolds Metals Co. 5,801,771 8,764,800 0.1
--------------- --------------- ------
92,320,573 107,755,487 0.9
Multi-Industry 90,000 Loews Corp. 3,984,675 9,005,625 0.1
Multimedia & 20,000 Unifi Communications, Inc.
Telecommunications (Warrants)(a)(q) 1,166,800 200 0.0
Natural 210,519 Freeport-McMoRan Copper & Gold,
Resources Inc. (Class B) 3,665,657 3,960,389 0.0
Oil & Gas 300,000 ++Rowan Companies Inc. 7,299,870 8,831,250 0.1
Producers 245,410 Texaco Inc. 6,627,069 15,092,715 0.1
500,000 ++Tom Brown, Inc. 8,833,857 10,312,500 0.1
100,000 Transocean Offshore Inc. 3,863,220 5,587,500 0.0
--------------- --------------- ------
26,624,016 39,823,965 0.3
Oil Services 200,000 Diamond Offshore Drilling Inc. 5,150,000 10,125,000 0.1
200,000 ++Input/Output, Inc. 4,367,760 4,975,000 0.0
2,500,000 ++Noble Drilling Corp. 16,505,558 80,781,250 0.6
200,000 Tidewater Inc. 9,007,960 7,925,000 0.1
150,000 ++Western Atlas, Inc. 7,083,342 11,850,000 0.1
--------------- --------------- ------
42,114,620 115,656,250 0.9
Paper 160,200 Boise Cascade Corporation 4,225,000 6,017,512 0.0
165,000 Fort James Corporation 3,091,744 8,188,125 0.1
240,000 Louisiana-Pacific Corp. 5,273,733 5,250,000 0.0
--------------- --------------- ------
12,590,477 19,455,637 0.1
Pharmaceuticals/ 500,000 ++Roberts Pharmaceutical Corporation 4,876,176 8,500,000 0.1
Prescription
Publishing 300,000 Reader's Digest Association, Inc.
(Class A) 7,030,450 8,062,500 0.0
Real Estate 2,574,465 ++Catellus Development Corp. 22,351,219 45,857,658 0.3
Real Estate 600,000 AMB Property Corporation 13,050,000 13,800,000 0.1
Investment 872,900 Ambassador Apartments Inc. 13,363,518 17,894,450 0.1
Trusts 1,446,800 Imperial Credit Commercial Mortgage
Investment Corp. 21,702,000 20,797,750 0.1
661,300 Mid-America Realty Investments (s) 6,352,094 6,695,662 0.1
1,839,825 Prime Retail, Inc. (s) 19,301,201 26,102,517 0.2
400,000 Taubman Centers, Inc. 3,512,161 5,425,000 0.0
50,000 Walden Residential Properties, Inc. 1,418,750 1,362,500 0.0
920,000 Walden Residential Properties, Inc.
(Warrants)(a) 1,125,068 1,035,000 0.0
500,000 Wilshire Real Estate Investment
Trust Inc. 8,000,000 8,000,000 0.1
--------------- --------------- ------
87,824,792 101,112,879 0.7
Restaurants 1,400,000 ++Brinker International, Inc. 15,416,635 33,600,000 0.2
400,000 ++Buffets, Inc. 4,018,508 5,875,000 0.0
1,235,000 Darden Restaurants Inc. 8,888,402 19,760,000 0.2
--------------- --------------- ------
28,323,545 59,235,000 0.4
Retail 206,500 ++Coinstar Inc. (q) 311,636 1,858,500 0.0
850,000 Heilig-Meyers Company 11,224,247 11,953,125 0.1
--------------- --------------- ------
11,535,883 13,811,625 0.1
Retail/ 1,530,000 ++Ugly Duckling Corporation (s) 20,563,125 16,830,000 0.1
Automotive
Retail Stores 416,900 ++Buttrey Food & Drug Stores Co. 3,241,636 6,253,500 0.0
1,110,000 ++Filene's Basement Corp. (s) 10,092,619 6,070,312 0.0
608,500 J. Baker, Inc. 10,187,765 7,111,844 0.1
700,000 Limited, Inc. (The) 12,951,591 23,493,750 0.2
300,000 Sotheby's Holdings, Inc. (Class A) 3,674,432 6,918,750 0.1
600,000 ++Toys 'R' Us, Inc. 13,456,814 16,537,500 0.1
--------------- --------------- ------
53,604,857 66,385,656 0.5
Savings Banks 572,886 Sovereign Bancorp, Inc. 1,552,137 10,813,223 0.1
Semiconductors 3,235,500 ++Cypress Semiconductor Corporation 25,899,931 32,355,000 0.2
Telecommuni- 582,800 ++360 Communications Company 8,935,044 17,811,825 0.1
cations 27,750 American Telecasting Inc. (Warrants)(a) -- 277 0.0
2,500 ++CAI Wireless Systems, Inc. -- 250 0.0
32,037 ++CS Wireless Systems, Inc. 123,681 320 0.0
1,375,800 ++CellNet Data Systems, Inc. 12,252,498 19,003,237 0.2
120,363 CellNet Data Systems, Inc.
(Warrants)(a)(q) 13,716,570 4,333,068 0.0
4,044,727 Citizens Utilities Company
(Class B) 35,740,884 40,952,859 0.3
800,000 ++DSC Communications Corp. 12,249,518 14,350,000 0.1
100,000 Frontier Corporation 1,601,530 2,993,750 0.0
2,050,800 ++General Communication, Inc.
(Class A) 14,595,550 14,291,512 0.1
3,000,000 Geotek Communications, Inc.
(Warrants)(a)(q) 14,200,634 30,000 0.0
1,600,000 ++Glenayre Technologies, Inc. 21,915,406 25,100,000 0.2
800,000 ++QUALCOMM, Inc. 41,076,109 44,950,000 0.3
47,000 United USN Inc. (Class A)
(Warrants)(a)(q) 5,840,131 11,515,000 0.1
14,113 United USN Inc. (Warrants)(a)(q) 1,084,937 2,159,289 0.0
1,255,000 ++Western Wireless Corporation 15,610,218 24,472,500 0.2
18,315 Wireless One, Inc. (Warrants)(a) 18,315 183 0.0
--------------- --------------- ------
198,961,025 221,964,070 1.6
Textiles 2,700,000 ++Burlington Industries, Inc. 35,591,641 47,250,000 0.3
Tobacco 1,500,000 DIMON, Inc. 24,287,745 21,937,500 0.1
Transportation 18,700 ++Consolidated Freightways Corp. 303,875 334,262 0.0
300,000 J.B. Hunt Transport Services, Inc. 4,200,052 9,581,250 0.1
--------------- --------------- ------
4,503,927 9,915,512 0.1
</TABLE>
Merrill Lynch Global Allocation Fund, Inc., April 30, 1998
<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 Utilities-- 1,250,000 Allegheny Energy, Inc. $ 27,315,552 $ 38,281,250 0.3%
States Electric 115,650 Atmos Energy Corp. 1,445,257 3,404,447 0.0
(con- & Gas 47,570 ++BayCorp Holdings, Ltd. 2,549,753 332,990 0.0
cluded) 603,100 Central and South West Corporation 11,630,764 15,718,294 0.1
4,112,285 ++El Paso Electric Company (s) 21,589,496 39,066,707 0.3
1,780,000 Entergy Corp. 47,516,856 44,277,500 0.3
300,000 FPL Group, Inc. 9,104,538 18,618,750 0.1
2,177,900 Houston Industries, Inc. 43,848,083 63,295,219 0.5
1,500,000 ++Niagara Mohawk Power Corp. 23,789,306 18,375,000 0.1
1,832,500 Potomac Electric Power Company 41,644,137 44,896,250 0.3
1,257,100 Texas Utilities Co. 40,643,415 50,284,000 0.4
1,148,800 Unicom Corporation 27,549,620 39,920,800 0.3
--------------- --------------- ------
298,626,777 376,471,207 2.7
Total Common Stocks in the
United States 1,853,661,771 2,600,491,403 18.6
Total Investments in Common Stocks 4,156,263,239 5,235,326,755 37.4
<CAPTION>
Equity Closed-End Funds
<S> <S> <C> <S> <C> <C> <C>
Austria Financial 320,000 Austria Fund (USD) 2,642,431 4,120,000 0.0
Services
Total Equity Closed-End Funds
in Austria 2,642,431 4,120,000 0.0
Indonesia Financial 25,600 Jakarta Growth Fund (USD) 158,080 86,400 0.0
Services
Total Equity Closed-End Funds
in Indonesia 158,080 86,400 0.0
Ireland Financial 150,000 Irish Investment Fund, Inc. (USD) 1,086,041 3,712,500 0.0
Services
Total Equity Closed-End Funds
in Ireland 1,086,041 3,712,500 0.0
Italy Financial 150,000 Italy Fund (USD) 1,198,520 2,184,375 0.0
Services
Total Equity Closed-End Funds
in Italy 1,198,520 2,184,375 0.0
South Financial 125,000 ++The Fidelity Advisor Korea Fund (USD) 1,088,750 570,313 0.0
Korea Services 200,000 ++Korea Equity Fund (USD) 1,369,598 637,500 0.0
1,400,528 ++Korea Fund, Inc. (USD) 19,847,163 10,766,559 0.1
200,000 ++Korean Investment Fund, Inc. (USD) 1,561,000 775,000 0.0
Total Equity Closed-End Funds in
South Korea 23,866,511 12,749,372 0.1
Total Investments in Equity
Closed-End Funds 28,951,583 22,852,647 0.1
Preferred Stocks
<S> <S> <C> <S> <C> <C> <C>
Australia Publishing 600,000 News Corporation Limited (The)
(ADR)* (USD) 10,451,056 13,987,500 0.1
Total Preferred Stocks in
Australia 10,451,056 13,987,500 0.1
Austria Banking 203,400 Bank Austria Finance AG 6,298,337 15,722,984 0.1
Total Preferred Stocks in Austria 6,298,337 15,722,984 0.1
Germany Chemicals 494,411 Henkel KGaA 20,929,927 38,582,798 0.3
Multi-Industry 450,000 RWE AG 8,725,424 18,837,793 0.1
Total Preferred Stocks in Germany 29,655,351 57,420,591 0.4
New Financial 3,085,700 Brierly Investments, Ltd.
Zealand Services (9% Convertible) 1,988,414 1,713,181 0.0
Total Preferred Stocks in
New Zealand 1,988,414 1,713,181 0.0
Norway Financial 175,000 A/S Eksportfinans (8.70%
Services Convertible)(USD) 4,377,500 4,692,187 0.0
Total Preferred Stocks in Norway 4,377,500 4,692,187 0.0
Portugal Banking 182,400 BCP International Bank (8%
Convertible)(USD) 13,548,278 23,164,800 0.2
Total Preferred Stocks in
Portugal 13,548,278 23,164,800 0.2
Spain Banking 225,000 Santander Overseas Bank (8%
Convertible, Series D)(USD) 5,463,250 5,765,625 0.1
Total Preferred Stocks in Spain 5,463,250 5,765,625 0.1
United Banking 870,000 California Federal Bank (9.125%,
States Series A) 21,735,500 23,490,000 0.2
55,000 California Federal Bank (10.625%,
Series B) 5,500,000 5,953,750 0.0
--------------- --------------- ------
27,235,500 29,443,750 0.2
Cable 1,000,000 Diva Systems Corp. (Convertible,
Television Series C)(r) 8,410,000 15,000,000 0.1
1,000,000 Diva Systems Corp. (Convertible,
Series D)(q) 11,440,000 15,000,000 0.1
--------------- --------------- ------
19,850,000 30,000,000 0.2
Financial 619,900 Golden State Bancorp Inc. (8.75%
Services Convertible, Series E) 15,070,337 58,425,575 0.4
Natural 150,000 Cyprus Amax Minerals Co. (Convertible,
Resources Series A) 9,188,313 5,700,000 0.1
348,700 Freeport-McMoRan Copper & Gold, Inc.
(Convertible) 7,918,834 8,020,100 0.1
219,000 Freeport-McMoRan Inc. (Convertible
--Gold) 7,703,330 5,502,375 0.0
--------------- --------------- ------
24,810,477 19,222,475 0.2
Publishing 198,500 Reader's Digest Association, Inc.
(8.25%, Class A) 4,652,344 5,185,813 0.0
Real Estate 400,000 Crown American Realty Trust (11%,
Investment Trusts Series A) 20,000,000 22,000,000 0.2
139,200 First Union Real Estate Investments
(8.40% Convertible, Series A) 3,480,000 4,732,800 0.0
350,000 National Health Investors, Inc.
(8.50% Convertible) 8,750,000 10,675,000 0.1
717,500 Prime Retail, Inc. (10.50%)(s) 16,366,161 19,372,500 0.1
1,078,000 Walden Residential Properties, Inc.
(9.20%, Series S) 26,269,636 27,893,250 0.2
--------------- --------------- ------
74,865,797 84,673,550 0.6
Utilities 77,600 Citizens Utilities Company (5%
Convertible) 3,398,931 3,744,200 0.0
Total Preferred Stocks in the
United States 169,883,386 230,695,363 1.6
Total Investments in Preferred
Stocks 241,665,572 353,162,231 2.5
</TABLE>
Merrill Lynch Global Allocation Fund, Inc., April 30, 1998
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Currency
Denom- Face Value Percent of
COUNTRY Industries ination Amount Fixed-Income Securities Cost (Note 1a) Net Assets
<S> <S> <S> <C> <S> <C> <C> <C>
Argentina Banking Banco Rio de la Plata S.A.:
USD 45,000,000 8.75% due 12/15/2003 $ 36,900,950 $ 46,012,500 0.3%
USD 30,000,000 (Class 3), 8.50% due 7/15/1998 30,225,000 30,112,500 0.2
--------------- --------------- ------
67,125,950 76,125,000 0.5
Food/ USD 18,500,000 Mastellone Hermanos S.A., 11.75%
Dairy due 4/01/2008 18,500,000 18,846,875 0.1
Products
Government City of Buenos Aires:
Obligations USD 5,179,000 11.25% due 4/11/2007 5,099,529 5,535,056 0.0
USD 38,000,000 11.25% due 4/11/2007 (q) 37,715,000 40,612,500 0.3
Republic of Argentina (p):
USD 126,500,000 9.75% due 9/19/2027 100,355,000 121,908,050 0.9
USD 97,375,000 Floating Rate Bonds, Series L,
6.625% due 3/31/2005 (d) 72,175,063 89,341,563 0.6
USD 80,000,000 Floating Rate Discount Notes,
6.437% due 3/31/2023 54,928,830 68,896,000 0.5
USD 85,000,000 Global Bonds, 11.375% due
1/30/2017 82,988,125 94,095,000 0.7
USD 30,000,000 Par 'L' Bonds, 5.50% due
3/31/2023 18,735,846 22,762,500 0.2
--------------- --------------- ------
371,997,393 443,150,669 3.2
Telecom- USD 13,000,000 CTI Holdings S.A., 0/11.50% due
munications 4/15/2008 (b)(q) 7,466,536 7,670,000 0.1
Total Fixed-Income Securities
in Argentina 465,089,879 545,792,544 3.9
Brazil Banking USD 16,500,000 Banco Nacional de Desenvolvimiento
Economico e Social, 9% due 9/24/2007 14,685,000 15,716,250 0.1
Broad- BRE 5,000,000 Abril S.A., 12% due 10/25/2003 5,006,250 5,262,500 0.0
casting/
Media
Government USD 35,000,000 Brazil Exit Bonds, 6% due
Obligations 9/15/2013 (p) 20,015,417 29,267,000 0.2
Republic of Brazil:
USD 3,094,000 Floating Rate Bonds, 6.687% due
1/01/2001 (d) 2,111,589 3,016,650 0.0
USD 10,000,000 Par 'L' Bonds, 5% due 4/15/2024 (p) 6,100,000 7,450,000 0.1
--------------- --------------- ------
28,227,006 39,733,650 0.3
Industrial Globo Comunicacoes e Participacoes
S.A.:
USD 11,000,000 10.625% due 6/21/2004 10,596,250 11,110,000 0.1
USD 13,000,000 10.625% due 12/05/2008 (q) 12,954,500 13,227,500 0.1
--------------- --------------- ------
23,550,750 24,337,500 0.2
Metals USD 35,000,000 CSN Panama Iron S.A., 9.125% due
Natural 6/01/2007 32,850,000 32,200,000 0.2
Resources Companhia Vale Do Rio Doce:
USD 4,500,000 10% due 4/02/2004 4,207,500 4,590,000 0.0
USD 5,000,000 10% due 4/02/2004 (q) 4,993,860 5,100,000 0.1
--------------- --------------- ------
9,201,360 9,690,000 0.1
Utilities USD 32,250,000 Espirito Santo--Escelsa, 10% due
7/15/2007 (q) 31,726,875 30,960,000 0.2
Total Fixed-Income Securities in
Brazil 145,247,241 157,899,900 1.1
Canada Cable/ CAD 7,545,000 Rogers Cablesystem Inc., 9.65% due
Telecom- 1/15/2014 4,397,424 5,592,015 0.1
munications CAD 5,000,000 Rogers Communications Inc.,
Convertible Bonds, 7.50% due
9/01/1999 3,394,000 3,426,094 0.0
--------------- --------------- ------
7,791,424 9,018,109 0.1
Industrial USD 68,500,000 International Semi-Tech Micro-
electronics, Inc., 0/11.50% due
8/15/2003 (b) 51,838,468 22,091,250 0.2
Industrial-- USD 28,000,000 Ainsworth Lumber Company, 12.50%
Services due 7/15/2007+++ 27,226,640 29,960,000 0.2
Paper & CAD 2,000,000 MacMillan Bloedel Limited, Convertible
Forest Bonds, 5% due 5/01/2007 1,024,416 1,286,533 0.0
Products
Real CAD 16,501,370 First Place Tower, Inc., Convertible
Estate Bonds, 10.64% due 12/15/2015 (e) 26,453,947 40,670,766 0.3
Total Fixed-Income Securities
in Canada 114,334,895 103,026,658 0.8
Chile Utilities USD 28,500,000 Empresa Electricidad del Norte,
--Electric 10.50% due 6/15/2005 (q) 28,625,000 29,212,500 0.2
Total Fixed-Income Securities
in Chile 28,625,000 29,212,500 0.2
China Multi- USD 20,250,000 Guangdong Investment Finance Inc.,
Industry Convertible Bonds, 1% due 7/07/2002 18,306,875 17,617,500 0.1
USD 23,500,000 Shangai Investment Holding Co.,
Convertible Bonds, 1% due 6/12/2002 21,441,250 22,501,250 0.2
39,748,125 40,118,750 0.3
Utilities USD 2,750,000 Huaneng Power International PLC,
--Electric Convertible Bonds, 1.75%
due 5/21/2004 2,512,500 2,791,250 0.0
Total Fixed-Income Securities
in China 42,260,625 42,910,000 0.3
France Automobiles FRF 5,500 Peugeot S.A., Convertible Bonds,
2% due 1/01/2001 992,341 1,184,537 0.0
Banking ECU 2,000,000 Credit Local de France, 0% due
10/16/2001 (b) 2,061,617 1,881,213 0.0
Industrial FRF 30,000 Alcatel Alsthom, Convertible Bonds,
2.50% due 1/01/2004 3,926,887 5,278,651 0.0
Insurance FRF 35,500 Finaxa, Convertible Bonds, 3% due
1/01/2001 9,060,172 15,928,919 0.1
Real FRF 230,000 Societe Fonciere Lyonnaise S.A.,
Estate Convertible Bonds, 4% due
10/31/2004 (q) 31,087,057 36,721,050 0.3
Total Fixed-Income Securities
in France 47,128,074 60,994,370 0.4
Germany Banking DEM 2,310,000 Commerzbank AG, Floating Rate
Convertible Bonds, 1.40% due
6/15/2001 1,556,456 4,184,783 0.0
USD 5,000,000 Landes Kredit Bank, 7.875% due
4/15/2004 4,972,068 5,427,100 0.1
USD 2,750,000 Nordeutsche Landesbank Girozentrale,
Exchangeable Bonds, 3% due 2/11/2003 2,513,125 2,949,375 0.0
--------------- --------------- ------
9,041,649 12,561,258 0.1
Building USD 41,100,000 Tarkett AG, 9% due 3/01/2002 39,413,750 41,819,250 0.3
Materials
Financial USD 5,875,000 Veba International Finance (with
Services Warrants), 6% due 4/06/2000 (a) 2,965,841 5,786,875 0.0
Government DEM 31,000,000 Bundesrepublik Deutscheland, 5.75%
Obligations due 8/20/1998 22,444,131 17,357,581 0.1
</TABLE>
Merrill Lynch Global Allocation Fund, Inc., April 30, 1998
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Currency
Denom- Face Value Percent of
COUNTRY Industries ination Amount Fixed-Income Securities Cost (Note 1a) Net Assets
<S> <S> <S> <C> <S> <C> <C> <C>
Germany Government DEM 55,000,000 Freie Hansestadt Hamburg, 6.08%
(con- Obligations-- due 11/29/2018 $ 31,730,765 $ 31,822,742 0.2%
cluded) Regional DEM 64,000,000 Land Baden-Weurttemberg, 6.20%
due 11/22/2013 37,148,769 37,404,682 0.3
DEM 170,500,000 Land Hessen, 6% due 11/29/2013 (c) 98,586,862 98,650,502 0.7
DEM 110,000,000 Mecklenberg-Vorpommern, 6.15%
due 6/16/2023 (c) 61,012,437 62,695,095 0.4
DEM 134,950,000 Nordrhein-Westfalen, 6.125% due
12/21/2018 (c) 77,420,913 76,953,094 0.6
Rheinland-Pfalz:
DEM 33,000,000 5.75% due 2/24/2014 18,324,663 18,762,542 0.1
DEM 64,000,000 6.08% due 11/29/2018 36,935,547 36,387,960 0.3
DEM 47,000,000 Sachsen-Anhalt, 6% due 1/10/2014 26,915,615 26,722,408 0.2
--------------- --------------- ------
388,075,571 389,399,025 2.8
Industrial USD 1,000,000 Siemens Capital Corp. (with
Warrants), 8% due 6/24/2002 (a) 1,318,750 1,810,000 0.0
Total Fixed-Income Securities
in Germany 463,259,692 468,733,989 3.3
Hong Multi- USD 16,000,000 First Pacific Company Ltd.,
Kong Industry Convertible Bonds, 2% due
3/27/2002 14,965,463 14,080,000 0.1
Real USD 23,980,000 Hysan Development Company Limited,
Estate Convertible Bonds, 6.75% due
6/01/2000 (n) 28,409,800 23,080,750 0.2
Utilities USD 25,000,000 Cathay International Ltd., 13%
--Infra- due 4/15/2008 (q) 25,000,000 25,093,750 0.2
structure
Total Fixed-Income Securities
in Hong Kong 68,375,263 62,254,500 0.5
India Chemicals Indian Petrochemicals Ltd.,
Convertible Bonds:
USD 23,500,000 2.50% due 3/11/2002 (q) 23,996,563 22,971,250 0.2
USD 37,600,000 2.50% due 3/11/2002 (Regulation S) 37,681,905 36,754,000 0.2
Total Fixed-Income Securities
in India 61,678,468 59,725,250 0.4
Indonesia Paper & USD 35,000,000 APP Global Finance (V) Ltd.,
Forest Convertible Bonds, 2% due
Products 7/25/2000 (q) 35,406,500 36,575,000 0.3
APP International Finance:
USD 3,000,000 10.25% due 10/01/2000 2,550,000 2,850,000 0.0
USD 1,500,000 11.75% due 10/01/2005 1,500,000 1,406,250 0.0
USD 3,965,000 PT Indah Kiat Pulp & Paper, 8.875%
due 11/01/2000 (q) 3,300,863 3,489,200 0.0
Total Fixed-Income Securities
in Indonesia 42,757,363 44,320,450 0.3
Italy Government USD 5,000,000 Republic of Italy, 8.75% due
Obligations 2/08/2001 5,373,050 5,385,000 0.0
Total Fixed-Income Securities
in Italy 5,373,050 5,385,000 0.0
Japan Banking JPY 1,990,000,000 AB International (Cayman) Trust,
Convertible Preference Shares,
0.50% due 8/01/2007 11,572,219 11,604,817 0.1
JPY 8,991,000,000 Fuji International Finance Trust,
Convertible Preference Shares,
0.25% due 2/01/2002 57,009,671 36,089,291 0.3
USD 9,250,000 MBL International Finance (Bermuda),
Convertible Bonds, 3% due 11/30/2002 9,266,875 9,458,125 0.1
JPY 5,410,000,000 Sumitomo Bank International
Finance NV, Convertible Bonds,
0.75% due 5/31/2001 44,571,881 41,996,743 0.3
--------------- --------------- ------
122,420,646 99,148,976 0.8
Beverages JPY 1,268,000,000 Kinki Coca-Cola Bottling Co.,
Ltd., 0.85% due 12/30/2003 11,282,608 10,035,292 0.1
JPY 1,706,000,000 Sanyo Coca-Cola Bottling Inc., #1
Convertible Bonds, 0.90% due
6/30/2003 15,032,867 12,300,151 0.1
JPY 552,000,000 Shikoku Coca-Cola Bottling Co.,
Ltd., #1 Convertible Bonds,
2.40% due 3/29/2002 5,152,497 4,619,509 0.0
--------------- --------------- ------
31,467,972 26,954,952 0.2
Capital JPY 500,000,000 Kawasaki Heavy Industries,
Goods Convertible Bonds, 0.50% due
9/30/1998 4,566,161 3,767,798 0.0
Chemicals USD 4,700,000 Shin-Etsu Chemical Co., Ltd.,
Bonds (with Warrants), 3.375% due
8/08/2000 (a) 3,274,060 4,300,500 0.0
Shin-Etsu Chemical Co., Ltd.,
Convertible Bonds:
JPY 148,000,000 #5, 1.30% due 3/31/1999 1,577,446 1,649,924 0.0
JPY 301,000,000 #6, 0.40% due 9/30/2005 2,987,802 3,134,467 0.0
--------------- --------------- ------
7,839,308 9,084,891 0.0
Electrical JPY 1,204,000,000 Matsushita Electric Works, Ltd.,
Equipment #9 Convertible Bonds, 1% due
11/30/2005 12,091,160 9,984,702 0.1
Electronics JPY 650,000,000 Matsushita Electric Industrial Co.,
Ltd., #5 Convertible Bonds,
1.30% due 3/29/2002 6,133,347 6,596,486 0.0
Government JPY 9,145,000,000 Japanese Government Bond, #112
Obligations (10-Year Issue), 5% due 9/21/1998 78,634,451 70,471,353 0.5
Insurance JPY 456,000,000 Mitsui Marine & Fire Insurance Co.,
Ltd., #3 Convertible Bonds, 0.70%
due 3/31/2003 3,786,983 3,546,743 0.0
JPY 117,000,000 Nichido Fire & Marine Insurance
Co., Ltd., #5 Convertible Bonds,
1% due 3/31/2003 1,109,381 908,248 0.0
Nisshin Fire & Marine Insurance
Co., Ltd., Convertible Bonds:
JPY 900,000,000 #1, 0.65% due 3/31/2004 7,132,646 6,202,666 0.1
JPY 1,572,000,000 #2, 0.75% due 3/31/2006 12,292,248 10,286,337 0.1
Sumitomo Marine & Fire Insurance
Co., Ltd., Convertible Bonds:
JPY 300,000,000 #3, 1.10% due 3/29/2002 2,522,005 2,703,726 0.0
JPY 1,527,000,000 #4, 1.20% due 3/31/2004 13,104,977 13,750,401 0.1
JPY 588,000,000 Yasuda Fire & Marine Insurance Co.,
Ltd., #3 Convertible Bonds, 0.60%
due 3/30/2001 4,903,719 4,453,196 0.0
--------------- --------------- ------
44,851,959 41,851,317 0.3
Pharma- JPY 4,000,000,000 Yamanouchi Pharmaceutical Co., Ltd.,
ceuticals Convertible Bonds, 1.625% due
3/31/2000 (n)*** 41,915,632 37,867,313 0.3
Total Fixed-Income Securities
in Japan 349,920,636 305,727,788 2.2
Malaysia Telecom- Telekom Malaysia BHD, Convertible
munications Bonds:
USD 3,000,000 4% due 10/03/2004 (q) 2,523,750 2,340,000 0.0
USD 55,600,000 4% due 10/03/2004 (Regulation S) 48,467,587 43,368,000 0.3
USD 9,000,000 7.875% due 8/01/2025 7,222,500 7,353,000 0.1
Total Fixed-Income Securities
in Malaysia 58,213,837 53,061,000 0.4
</TABLE>
Merrill Lynch Global Allocation Fund, Inc., April 30, 1998
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Currency
Denom- Face Value Percent of
COUNTRY Industries ination Amount Fixed-Income Securities Cost (Note 1a) Net Assets
<S> <S> <S> <C> <S> <C> <C> <C>
Mexico Oil Petroleos Mexicanos:
& Related USD 45,150,000 8.625% due 12/01/2023 (r) $ 25,007,000 $ 42,441,000 0.3%
USD 15,000,000 9.50% due 9/15/2027 14,449,470 14,981,250 0.1
Total Fixed-Income Securities
in Mexico 39,456,470 57,422,250 0.4
New Government NZD 60,000,000 New Zealand Government Bond,
Zealand Obligations 6.50% due 2/15/2000 34,811,718 32,615,779 0.2
NZD 95,000,000 New Zealand Index Linked Notes,
4.50% due 2/15/2016 57,126,627 51,161,680 0.4
Total Fixed-Income Securities
in New Zealand 91,938,345 83,777,459 0.6
Philip- Multi- AC International Finance,
pines Industry Convertible Bonds:
PHP 19,500,000 0% due 12/08/2000 (b) 15,352,635 15,502,500 0.1
PHP 18,000,000 0.50% due 7/30/2002 16,053,125 17,505,000 0.1
Total Fixed-Income Securities
in the Philippines 31,405,760 33,007,500 0.2
Russia Telecom- PLD Telekom Inc., Convertible
munications Bonds (j)(q)(s):
USD 74,500,000 0/14% due 6/01/2004 (b) 68,990,011 78,970,000 0.5
USD 18,700,000 9% due 6/01/2006 18,756,250 23,562,000 0.2
--------------- --------------- ------
87,746,261 102,532,000 0.7
Utilities USD 16,000,000 Mosenergo Finance BV, 8.375% due
10/09/2002 13,468,800 14,040,000 0.1
Total Fixed-Income Securities
in Russia 101,215,061 116,572,000 0.8
Singapore Multi- USD 10,740,000 Far East Levingston Shipyards,
Industry 1.50% due 5/02/2001 8,822,312 8,699,400 0.1
Keppel Corporation Limited,
Redeemable Cumulative Convertible
Preference Shares:
USD 48,500,000 2% due 8/12/2002 (q) 48,492,500 44,256,250 0.3
USD 7,500,000 2% due 8/12/2002 (Regulation S) 6,797,500 6,843,750 0.0
--------------- --------------- ------
64,112,312 59,799,400 0.4
Retail USD 12,000,000 Dairy Farm International Holdings
Ltd., Convertible Preferred,
6.50% due 5/10/2049 9,525,875 10,980,000 0.1
Total Fixed-Income Securities
in Singapore 73,638,187 70,779,400 0.5
South Metals ZAL 22,685,000 Samancor Ltd., Convertible Bonds,
Africa 7% due 6/30/2004 21,854,094 21,891,025 0.2
Total Fixed-Income Securities in
South Africa 21,854,094 21,891,025 0.2
South Banking Export Import Bank Korea:
Korea USD 4,000,000 6.50% due 2/10/2002 2,780,000 3,650,000 0.0
USD 21,000,000 Series D, 6.50% due 11/15/2006 16,459,400 18,228,000 0.1
Koram Bank Ltd., Convertible Bonds:
USD 1,500,000 0.25% due 8/26/2007 (q) 1,447,500 1,140,000 0.0
USD 5,750,000 0.25% due 8/26/2007 (Regulation S) 4,982,125 4,370,000 0.1
--------------- --------------- ------
25,669,025 27,388,000 0.2
Electronics Samsung Electronics Co., Convertible
Bonds (b):
USD 6,000,000 0% due 12/31/2007 (q) 5,786,250 5,220,000 0.1
USD 50,500,000 0% due 12/31/2007 (Regulation S) 47,119,532 44,187,500 0.3
--------------- --------------- ------
52,905,782 49,407,500 0.4
Energy Ssangyong Oil Refining Co., Ltd.,
Related Convertible Bonds:
USD 9,755,000 3% due 12/31/2004 7,206,837 4,877,500 0.0
USD 16,535,000 3.75% due 12/31/2008 17,448,950 13,558,700 0.1
--------------- --------------- ------
24,655,787 18,436,200 0.1
Government USD 18,500,000 Republic of Korea, 8.875% due
Obligations 4/15/2008 18,249,695 18,222,500 0.1
Multi- CHF 5,250,000 Daewoo Corporation, Convertible
Industry Bonds, 0.125% due 12/31/2001 3,434,100 2,958,486 0.0
Steel Pohang Iron & Steel Industries
Co., Ltd.:
USD 6,485,000 7.375% due 5/15/2005 4,474,650 5,758,680 0.0
USD 10,000,000 7.125% due 11/01/2006 7,612,500 8,580,000 0.1
--------------- --------------- ------
12,087,150 14,338,680 0.1
Utilities-- Korea Electric Power Corp.,
Electric Global Bonds:
USD 30,000,000 10% due 4/01/2001 (q) 30,000,000 30,195,000 0.2
USD 10,000,000 6.375% due 12/01/2003 6,700,000 8,650,000 0.1
USD 34,315,000 Convertible, 5% due 8/01/2001 33,069,731 29,854,050 0.2
--------------- --------------- ------
69,769,731 68,699,050 0.5
Total Fixed-Income Securities
in South Korea 206,771,270 199,450,416 1.4
Taiwan Appliances USD 35,750,000 Teco Electric and Machine,
Convertible Bonds, 0% due 3/19/2003
(b)(q) 35,827,187 35,124,375 0.3
Computers USD 14,750,000 First International Computer,
Inc., Convertible Bonds, 0% due
10/16/2002 (b) 15,680,937 15,487,500 0.1
Industrial USD 13,800,000 GVC Corporation, Convertible
Bonds, 0% due 5/21/2002 (b)(q) 13,794,000 14,766,000 0.1
Total Fixed-Income Securities
in Taiwan 65,302,124 65,377,875 0.5
Thailand Steel USD 44,000,000 NSM Steel Inc., 12% due 2/01/2006 (q) 39,904,031 41,800,000 0.3
Total Fixed-Income Securities
in Thailand 39,904,031 41,800,000 0.3
United Banking USD 36,000,000 ING Bank, N.V. (London), 0% due
Kingdom 2/12/1999 (b) 36,000,000 37,530,000 0.3
Cable/ USD 14,000,000 Comcast UK Cable Partners Ltd.,
Telecom- 0/11.20%due 11/15/2007 (b) 9,977,034 11,480,000 0.1
munications
Financial GBP 11,600,000 Liberty International Holdings PLC,
Services Convertible Bonds, 5.50% due
4/30/2009 14,179,895 23,160,630 0.2
Food & GBP 13,500,000 Allied-Lyons PLC, Convertible Bonds,
Beverage 6.75% due 7/07/2008 21,002,665 23,852,759 0.2
Government United Kingdom Treasury Gilt:
Obligations GBP 60,000,000 9.75% due 8/27/2002 112,868,044 113,731,356 0.8
GBP 20,000,000 Convertible Bonds, 9.50% due
10/25/2004 37,627,645 39,648,084 0.3
--------------- --------------- ------
150,495,689 153,379,440 1.1
Industrial USD 4,655,000 HIH Capital Ltd., Convertible Bonds
(Bearer), 7.50% due 9/25/2006 3,031,038 3,467,975 0.0
</TABLE>
Merrill Lynch Global Allocation Fund, Inc., April 30, 1998
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Currency
Denom- Face Value Percent of
COUNTRY Industries ination Amount Fixed-Income Securities Cost (Note 1a) Net Assets
<S> <S> <S> <C> <S> <C> <C> <C>
United Multi- GBP 10,375,000 English China Clays PLC,
Kingdom Industry Convertible Bonds, 6.50% due
(concluded) 9/30/2003 $ 16,483,377 $ 16,901,186 0.1%
Telecommuni- USD 43,750,000 International Cabletel, Inc.,
cations Series B, 0/11.50% due 2/01/2006 (b) 32,492,765 35,546,875 0.3
USD 39,000,000 Ionica PLC, 0/15% due 5/01/2007
(b)(m) 21,796,814 17,355,000 0.2
USD 20,250,000 Millicom International Cellular
S.A., 0/13.50% due 6/01/2006 (b) 13,468,982 16,022,813 0.1
NTL Inc.:
GBP 14,000,000 0/10.75% due 4/01/2008 (b) 13,683,320 14,151,676 0.1
GBP 9,250,000 9.50% due 4/01/2008 15,088,593 15,435,581 0.1
--------------- --------------- ------
96,530,474 98,511,945 0.8
Textiles GBP 2,500,000 Coats Viyella PLC, Convertible
Bonds, Series B, 6.25% due 8/09/2003 3,535,704 3,968,150 0.0
Utilities-- GBP 10,000,000 National Grid Co. PLC, Convertible
Electric Bonds, 4.25% due 2/17/2008 (q) 16,554,000 18,149,065 0.1
Total Fixed-Income Securities in the
United Kingdom 367,789,876 390,401,150 2.9
United Agricultural USD 12,000,000 Sun World International, Inc.,
States 11.25% due 4/15/2004 12,000,000 13,110,000 0.1
Airlines USD 15,000,000 Trans World Airlines, 11.375%
due 3/01/2006 (q) 15,000,000 14,925,000 0.1
Banking USD 14,250,000 Ocwen Federal Bank, 12% due 6/15/2005 14,250,000 15,603,750 0.1
Bio- USD 7,200,000 Cetus Corporation (Euro), Convertible
technology Bonds, 5.25% due 5/21/2002 5,220,250 7,110,000 0.1
Consumer-- USD 14,000,000 Zeta Consumer Products, 11.25% due
Products 11/30/2007 (q) 14,000,000 12,600,000 0.1
Finance USD 4,500,000 Hawthorne Financial Corp., 12.50%
due 12/31/2004 4,500,000 4,668,750 0.0
Financial USD 9,000,000 Emergent Group Inc., Series B, 10.75%
Services due 9/15/2004 8,934,375 8,685,000 0.1
Food & USD 15,000,000 Tom's Food Inc., 10.50% due
Beverage 11/01/2004 15,000,000 15,187,500 0.1
Healthcare USD 14,000,000 American Retirement Corp.,
Convertible Bonds, 5.75% due
10/01/2002 14,000,000 14,980,000 0.1
Holding USD 5,000,000 American Banknote Corp., 11.25%
Company due 12/01/2007 (r) 4,950,739 5,037,500 0.0
Homebuilding USD 29,500,000 Beazer Homes USA, Inc., 9% due
& Construc- 3/01/2004 27,597,000 29,426,250 0.2
tion
Industrial USD 8,000,000 Bar Technologies Ltd., 13.50%
due 4/01/2001 7,412,450 8,600,000 0.1
USD 21,750,000 ++Crown Packaging Enterprises, 0/14%
due 8/01/2006 (b) 9,265,575 1,087,500 0.0
--------------- --------------- ------
16,678,025 9,687,500 0.1
Mining USD 10,500,000 AEI Holding Co., 10% due
11/15/2007 (q) 10,570,000 10,920,000 0.1
Oil & PDV America, Inc.:
Related USD 35,000,000 7.25% due 8/01/1998 34,856,150 35,000,000 0.3
USD 10,000,000 7.75% due 8/01/2000 10,062,500 10,100,000 0.1
--------------- --------------- ------
44,918,650 45,100,000 0.4
Real USD 18,137,859 RTC Commercial Mortgage, Class C,
Estate 8.25% due 12/25/2020 (d) 17,860,031 18,137,859 0.1
Real Estate USD 25,500,000 Alexander Haagen Properties, Inc.,
Investment Exchangeable Debentures, 7.25% due
Trusts 12/27/2003 (q) 25,291,250 24,990,000 0.2
USD 4,500,000 Capstone Capital Corp., Convertible
Bonds, 6.55% due 3/14/2002 4,145,886 4,365,000 0.0
USD 7,000,000 Centerpoint Properties Corp.,
Convertible Bonds, 8.22% due 1/15/2004 7,000,000 12,451,250 0.1
USD 30,000,000 First Union Real Estate, 8.875%
due 10/01/2003 29,756,100 30,412,500 0.2
USD 25,000,000 First Washington Realty, Exchangeable
Debentures, 8.25% due 6/26/1999 (r) 25,000,000 28,000,000 0.2
Health & Retirement Properties Trust,
Convertible Bonds:
USD 40,000,000 7.25% due 10/01/2001 40,000,000 42,700,000 0.3
USD 15,000,000 7.50% due 10/01/2003 15,000,000 16,012,500 0.1
LTC Properties, Inc., Convertible
Bonds:
USD 10,000,000 8.25% due 1/01/1999 10,000,000 12,362,500 0.1
USD 8,000,000 8.50% due 1/01/2001 8,000,000 9,880,000 0.1
USD 12,500,000 8.30% due 7/01/2001 12,500,000 15,625,000 0.1
USD 25,000,000 Leperq Corporate Income Fund,
Exchangeable Secured Notes, 8% due
3/17/2004 (q) 25,000,000 27,984,375 0.2
Malan Realty Investors, Inc.,
Convertible Bonds:
USD 27,000,000 8.50% due 7/15/2003 (q) 27,000,000 27,911,250 0.2
USD 4,750,000 9.50% due 7/15/2004 3,859,375 4,779,687 0.0
USD 9,415,000 Meditrust, Convertible Bonds, 8.54%
due 7/01/2000 9,602,637 10,674,256 0.1
USD 5,000,000 Mid-Atlantic Realty Trust,
Convertible Bonds, 7.625% due
9/15/2003 4,875,000 6,593,750 0.0
USD 22,000,000 National Health Investors, Inc.,
Convertible Bonds, 7.75% due 1/01/2001 22,000,000 22,825,000 0.2
USD 17,000,000 Nationwide Health Properties Inc.,
Convertible Bonds, 6.25% due 1/01/1999 16,800,000 17,488,750 0.1
USD 31,500,000 Omega Healthcare Investors Inc.,
Convertible Bonds, 8.50% due 2/01/2001 31,552,500 39,886,875 0.3
USD 5,500,000 Sizeler Property Investors, Inc.,
Convertible Bonds, 8% due 7/15/2003 5,505,000 5,445,000 0.0
--------------- --------------- ------
322,887,748 360,387,693 2.5
Retail USD 4,500,000 The Krystal Co., 10.25% due 10/01/2007 4,545,000 4,618,125 0.0
--Food
Retail-- USD 25,000,000 Coinstar Inc., 0/13% due 10/01/2006
Miscellaneous (b)(k) 20,688,132 21,000,000 0.2
Savings USD 21,400,000 First Federal Financial Corporation,
Bank 11.75% due 10/01/2004 21,401,250 23,968,000 0.2
Semi- USD 5,500,000 Cypress Semiconductor Corp.,
conductors Convertible Bonds, 6% due
10/01/2002 (q) 4,727,500 4,970,625 0.0
Steel USD 2,442,500 Rouge/Worthington Industries, Inc.
(Convertible, Series DECS) 38,015,300 36,637,500 0.3
</TABLE>
Merrill Lynch Global Allocation Fund, Inc., April 30, 1998
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Currency
Denom- Face Value Percent of
COUNTRY Industries ination Amount Fixed-Income Securities Cost (Note 1a) Net Assets
<S> <S> <S> <C> <S> <C> <C> <C>
United Telecom- CAI Wireless Systems, Inc.:
States munications USD 45,000,000 13% due 6/01/1998 (r) $ 45,000,000 $ 45,000,000 0.3%
(concluded) USD 94,025,000 12.25% due 9/15/2002 63,879,250 18,805,000 0.1
USD 30,000,000 12% due 10/01/2005 1,000,000 300,000 0.0
USD 122,500,000 CS Wireless Systems Inc., 0/11.375%
due 3/01/2006 (b)(l) 66,404,889 24,500,000 0.2
USD 15,500,000 Call Net Enterprises Inc., 0/13.25%
due 12/01/2004 (b) 12,692,524 14,570,000 0.1
USD 120,363,000 CellNet Data Systems, Inc., 0/14%
due 10/01/2007 (b)(h) 52,510,363 68,005,095 0.5
Centennial Communications Corp. (b):
USD 40,000,000 0/14% due 1/01/2005 (q) 21,259,479 20,600,000 0.1
USD 11,925,186 0/9% due 1/01/2006 10,207,853 9,957,530 0.1
Geotek Communications, Inc.:
USD 24,650,000 Convertible Bonds, 12% due
2/15/2001 (q) 23,973,875 12,325,000 0.1
USD 104,000,000 Series B, 0/15% due 7/15/2005 (b) 62,600,960 48,880,000 0.4
USD 17,000,000 Heartland Wireless Communications
Inc., 14% due 10/15/2004 12,885,000 4,080,000 0.0
USD 37,500,000 Nextel Communications Inc., 0/9.95%
due 2/15/2008 (b)(q) 23,538,632 24,000,000 0.2
USD 53,000,000 People's Choice T.V. Corporation,
0/13.125% due 6/01/2004 (b)(o) 28,545,738 14,575,000 0.1
Telegroup Inc.:
USD 21,750,000 0/10.50% due 11/01/2004 (b) 17,806,643 17,835,000 0.1
USD 22,000,000 Convertible Bonds, 8% due
4/15/2005 (q) 22,000,000 29,260,000 0.2
USN Communications Inc. (b):
USD 12,697,035 0/9% due 1/13/2006 10,007,084 19,680,404 0.1
USD 32,032,000 Series B, 0/14.625% due 8/15/2004 19,188,703 25,625,600 0.2
USD 20,000,000 Unifi Communications, Inc., 14%
due 3/01/2004 (g) 18,955,528 3,000,000 0.0
USD 55,000,000 United International Holdings,
Inc., 0/10.75% due 2/15/2008 (b)(f) 33,285,525 34,650,000 0.2
United USN, Inc. (b):
USD 17,000,000 0/14% due 9/15/2003 (i) 11,005,516 13,600,000 0.1
USD 35,000,000 Convertible Bonds, 0/9% due
9/30/2004 (q) 30,898,755 53,200,000 0.4
USD 15,500,000 Winstar Communications Inc., 0/14%
due 10/15/2005 (b) 10,416,517 12,555,000 0.1
Wireless One Inc.:
USD 39,050,000 13% due 10/15/2003 21,513,375 7,810,000 0.1
USD 16,250,000 0/13.50% due 8/01/2006 (b) 4,145,907 2,112,508 0.0
--------------- --------------- ------
623,722,116 524,926,137 3.7
Trans USD 10,625,000 Eletson Holdings Inc., 9.25% due
portation-- 11/15/2003 10,558,437 10,917,188 0.1
Shipping USD 19,250,000 Teekay Shipping Corporation, 8.32%
due 2/01/2008 18,252,500 19,659,063 0.1
--------------- --------------- ------
28,810,937 30,576,251 0.2
Trucking USD 25,500,000 Ameritruck Distribution, 12.25%
due 11/15/2005 25,028,075 22,950,000 0.2
US Federal National Mortgage
Government & Association (d):
Agency USD 5,495,708 8% due 10/01/2024 5,247,543 5,696,631 0.0
Obligations USD 10,572,435 8% due 12/01/2024 10,385,766 10,958,964 0.1
US Treasury Inflation Indexed
Notes:
USD 215,000,000 3.625% due 7/15/2002 214,369,402 214,917,463 1.5
USD 125,000,000 3.375% due 1/15/2007 123,217,917 123,693,680 0.9
US Treasury Notes & Bonds:
USD 341,100,000 6% due 5/31/1998 339,137,636 341,366,058 2.4
USD 150,000,000 6.125% due 8/31/1998 (c) 149,890,625 150,363,282 1.1
USD 200,000,000 5.75% due 12/31/1998 198,992,025 200,374,000 1.4
USD 750,000,000 5.875% due 2/28/1999 747,746,094 752,047,500 5.4
USD 300,000,000 5.875% due 2/15/2000 294,964,844 301,406,250 2.2
USD 100,000,000 6% due 8/15/2000 100,078,125 100,812,000 0.7
USD 55,000,000 7.875% due 8/15/2001 53,943,600 58,609,100 0.4
--------------- --------------- ------
2,237,973,577 2,260,244,928 16.1
Total Fixed-Income Securities
in the United States 3,553,278,705 3,515,458,368 25.1
Venezuela Finance USD 8,443,000 CANTV Finance Ltd., 9.25% due
2/01/2004 8,231,925 8,464,108 0.1
Total Fixed-Income Securities
in Venezuela 8,231,925 8,464,108 0.1
Total Investments in Fixed-Income
Securities 6,493,049,871 6,543,445,500 46.8
<CAPTION>
Short-Term Securities
<S> <S> <S> <C> <S> <C> <C> <C>
Indonesia Certifi- UBS Singapore:
cates of IDR 50,000,000,000 20% due 5/18/1998 6,756,757 6,230,529 0.0
Deposit IDR 50,000,000,000 21% due 5/20/1998 6,622,517 6,230,529 0.0
IDR 50,000,000,000 24% due 5/22/1998 6,493,506 6,230,529 0.0
IDR 50,000,000,000 24% due 5/27/1998 6,369,427 6,230,530 0.1
IDR 50,000,000,000 24.50% due 5/27/1998 6,369,427 6,230,530 0.1
IDR 50,000,000,000 28.50% due 5/29/1998 6,349,206 6,230,530 0.1
IDR 50,000,000,000 30% due 6/05/1998 6,172,839 6,230,530 0.1
IDR 40,000,000,000 32% due 6/05/1998 4,984,424 4,984,424 0.0
Total Short-Term Securities
in Indonesia 50,118,103 48,598,131 0.4
United Commercial USD 80,000,000 American Express Credit Corp., 5.50%
States Paper** due 5/21/1998 79,755,556 79,755,556 0.6
Associates Corp. of North America:
USD 48,000,000 5.51% due 5/07/1998 47,955,920 47,955,920 0.3
USD 30,000,000 5.50% due 6/03/1998 29,848,750 29,848,750 0.2
USD 50,000,000 Barclays US Funding Corp., 5.48%
due 5/07/1998 49,954,333 49,954,333 0.4
CIT Group Holdings, Inc. (The):
USD 50,000,000 5.52% due 5/01/1998 50,000,000 50,000,000 0.4
USD 50,000,000 5.49% due 6/04/1998 49,740,750 49,740,750 0.3
USD 50,000,000 Caisse des Depots et Consignations,
5.50% due 5/04/1998 49,977,083 49,977,083 0.4
Daimler-Benz AG:
USD 75,000,000 5.52% due 5/01/1998 75,000,000 75,000,000 0.5
USD 25,000,000 5.49% due 6/01/1998 24,881,812 24,881,812 0.2
USD 100,000,000 Delaware Funding Corp., 5.51% due
5/18/1998 99,739,806 99,739,806 0.7
Dresdner US Finance Inc.:
USD 50,000,000 5.50% due 5/18/1998 49,870,139 49,870,139 0.3
USD 50,000,000 5.49% due 5/26/1998 49,809,375 49,809,375 0.3
</TABLE>
Merrill Lynch Global Allocation Fund, Inc., April 30, 1998
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Currency
Denom- Face Value Percent of
COUNTRY Industries ination Amount Short-Term Securities Cost (Note 1a) Net Assets
<S> <S> <S> <C> <S> <C> <C> <C>
United Commercial Eiger Capital Corp.:
States Paper** USD 32,000,000 5.51% due 5/15/1998 $ 31,931,431 $ 31,931,431 0.2%
(con- (concluded) USD 13,960,000 5.51% due 5/26/1998 13,906,584 13,906,584 0.1
cluded) USD 24,000,000 5.53% due 5/28/1998 23,900,460 23,900,460 0.2
USD 30,000,000 5.52% due 6/02/1998 29,852,800 29,852,800 0.2
USD 37,000,000 Ford Motor Credit Co., 5.50% due
5/19/1998 36,898,250 36,898,250 0.3
USD 89,000,000 General Electric Capital Corp.,
5.51% due 5/22/1998 88,713,939 88,713,939 0.6
USD 24,311,000 General Motors Acceptance Corp.,
5.56% due 5/01/1998 24,311,000 24,311,000 0.2
USD 50,000,000 Goldman Sachs Group L.P., 5.51%
due 5/15/1998 49,892,861 49,892,861 0.4
USD 50,000,000 Kredietbank North American Finance
Corp., 5.50% due 5/01/1998 50,000,000 50,000,000 0.4
USD 26,000,000 Matterhorn Capital Corp., 5.50%
due 5/18/1998 25,932,472 25,932,472 0.2
USD 20,000,000 MetLife Funding Corp., 5.50% due
5/14/1998 19,960,278 19,960,278 0.1
USD 33,000,000 National Australia Funding (Delaware)
Inc., 5.50% due 5/18/1998 32,914,292 32,914,292 0.2
Preferred Receivables Funding Corp.:
USD 75,000,000 5.55% due 5/04/1998 74,965,312 74,965,312 0.5
USD 30,075,000 5.53% due 5/08/1998 30,042,661 30,042,661 0.2
Societe Generale N.A.:
USD 25,000,000 5.50% due 5/19/1998 24,931,250 24,931,250 0.2
USD 30,000,000 5.50% due 5/20/1998 29,912,917 29,912,917 0.2
USD 30,000,000 Transamerica Finance Corp., 5.56%
due 5/04/1998 29,986,100 29,986,100 0.2
USD 50,000,000 UBS Finance (Delaware) Inc., 5.50%
due 5/14/1998 49,900,694 49,900,694 0.4
USD 54,000,000 Xerox Credit Corp., 5.48% due
5/11/1998 53,917,800 53,917,800 0.4
Total Short-Term Investments in
the United States 1,378,404,625 1,378,404,625 9.8
Total Investments in Short-Term
Securities 1,428,522,728 1,427,002,756 10.2
<CAPTION>
OPTIONS Nominal Value Premiums
PURCHASED Covered by Options Issue Paid
<S> <C> <S> <C> <C> <C>
Put Options 25,000 ADC Telecommunications, Inc.,
Purchased expiring August 1998 at USD 20 12,750 15,625 0.0
35,000 Oracle Corporation, expiring June
1998 at USD 20 6,431 8,750 0.0
Total Options Purchased 19,181 24,375 0.0
Total Investments 12,348,472,174 13,581,814,264 97.0
<CAPTION>
OPTIONS Premiums
WRITTEN Received
<S> <C> <S> <C> <C> <C>
Call Options 500,000 3Com Corporation, expiring January
Written 1999 at USD 35 (2,453,668) (2,750,000) 0.0
532,000 ADC Telecommunications, Inc.,
expiring August 1998 at USD 20 (1,253,748) (5,453,000) (0.1)
100,000 Aetna, Inc., expiring July 1998 at
USD 80 (409,486) (475,000) 0.0
200,000 Baxter International, Inc., expiring
November 1998 at USD 65 (933,969) (275,000) 0.0
1,465,000 Cypress Semiconductors Corporation,
expiring January 1999 at USD 10 (1,732,673) (2,838,438) (0.1)
200,000 Electronic Data Systems Corporation,
expiring January 1999 at USD 45 (993,967) (875,000) 0.0
230,000 Golden State BanCorp, expiring
October 1998 at USD 40 (820,634) (805,000) 0.0
50,000 Golden State BanCorp, expiring
October 1998 at USD 45 (117,246) (93,750) 0.0
100,000 Humana Inc., expiring November 1998
at USD 27.50 (284,490) (287,500) 0.0
100,000 Input/Output Inc., expiring August
1998 at USD 25 (284,490) (300,000) 0.0
100,000 J.B. Hunt Transport Corp., expiring
August 1998 at USD 25 (290,740) (787,500) 0.0
70,000 J.B. Hunt Transport Corp., expiring
November 1998 at USD 35 (199,143) (170,625) 0.0
100,000 Key Corp., expiring June 1998 at
USD 45 (221,992) (75,000) 0.0
272,268 Koninklijke KNP N.V., expiring
June 1998 at NLG 3,116.30 (367,553) (103,785) 0.0
200,000 Mellon Bank Corp., expiring
September 1998 at USD 65 (1,193,960) (2,175,000) 0.0
155,000 Mellon Bank Corp., expiring
September 1998 at USD 70 (706,204) (1,336,875) 0.0
120,000 Millipore Corp., expiring October
1998 at USD 35 (394,537) (390,000) 0.0
1,316,000 Mitsubishi Heavy Industries, Inc.,
expiring May 1998 at JPY 3,565.60 (212,401) (24,917) 0.0
1,309,000 Mitsubishi Heavy Industries, Inc.,
expiring May 1998 at JPY 3,571.50 (196,816) (26,766) 0.0
560,000 Mitsubishi Heavy Industries, Inc.,
expiring September 1998 at
JPY 3,632.70 (140,721) (38,170) 0.0
679,220 MontEdison S.p.A., expiring June
1998 at ITL 3,242 (39,412) (8,700) 0.0
8,537,183 MontEdison S.p.A., expiring June
1998 at ITL 3,239 (460,563) (115,175) 0.0
250,000 Motorola, Inc., expiring October
1998 at USD 55 (1,736,192) (2,062,500) 0.0
200,000 Motorola, Inc., expiring January
1999 at USD 60 (1,196,960) (750,000) 0.0
700,000 Noble Drilling Corp., expiring
September 1998 at USD 35 (2,297,683) (2,012,500) 0.0
600,000 Oracle Corporation, expiring June
1998 at USD 20 (1,763,191) (3,825,000) (0.1)
300,000 Oracle Corporation, expiring January
1999 at USD 30 (890,970) (862,500) 0.0
400,000 Oracle Corporation, expiring January
1999 at USD 35 (1,306,706) (675,000) 0.0
200,000 Oxford Healthcare Corp., expiring
August 1998 at USD 15 (618,979) (750,000) 0.0
100,000 Oxford Healthcare Corp., expiring
August 1998 at USD 22.50 (309,490) (62,500) 0.0
15,000 Plains Resources, Inc., expiring
October 1998 at USD 22.50 (37,236) (46,875) 0.0
200,000 Potomac Electric Power Co.,
expiring August 1998 at USD 25 (297,490) (175,000) 0.0
150,000 QUALCOM Inc., expiring July 1998
at USD 60 (745,475) (525,000) 0.0
50,000 QUALCOM Inc., expiring July 1998
at USD 70 (167,244) (50,000) 0.0
250,000 QUALCOM Inc., expiring January 1999
at USD 60 (1,630,025) (2,062,500) 0.0
50,000 QUALCOM Inc., expiring January 1999
at USD 80 (242,242) (150,000) 0.0
100,000 Reader's Digest Association, Inc.,
expiring October 1998 at USD 30 (122,996) (112,500) 0.0
</TABLE>
Merrill Lynch Global Allocation Fund, Inc., April 30, 1998
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<CAPTION>
OPTIONS WRITTEN Nominal Value Premiums Value Percent of
(concluded) Covered by Options Issue Received (Note 1a) Net Assets
<S> <C> <S> <C> <C> <C>
Call Options 250,000 Silicon Graphics, Inc., expiring
Written August 1998 at USD 12.50 $ (554,981) $ (484,375) 0.0%
(concluded) 50,000 Stratus Computer, Inc., expiring
July 1998 at USD 50 (219,430) (81,250) 0.0
25,000 Texaco Inc., expiring October
1998 at USD 60 (130,496) (134,375) 0.0
200,000 Tidewater, Inc., expiring July
1998 at USD 45 (956,468) (300,000) 0.0
100,000 TransOcean Offshore, ASA,expiring
August 1998 at USD 45 (434,485) (1,287,500) 0.0
100,000 Western Wireless Corp., expiring
November 1998 at USD 25 (324,489) (175,000) 0.0
Total Options Written (29,691,641) (35,989,576) (0.3)
Total Investments, Net of Options Written $12,318,780,533 13,545,824,688 96.7
---------------
Short Sales (Proceeds--$25,236,484)*** (29,583,763) (0.2)
Variation Margin on Financial Futures Contracts**** 1,093,733 0.0
Unrealized Depreciation on Forward Foreign Exchange Contracts***** (4,764,659) 0.0
Other Assets Less Liabilities 489,837,642 3.5
--------------- ------
Net Assets $14,002,407,641 100.0%
=============== ======
<FN>
+++Represents a pay-in-kind security which may pay interest in
additional shares/face.
*American Depositary Receipts (ADR).
**Commercial Paper is traded on a discount basis. The interest rates
shown are the rates in effect at April 30, 1998.
***Covered short sales entered into as of April 30, 1998 were as
follows:
<CAPTION>
Common Value
Shares Issue (Note 1i)
<C> <S> <C>
1,248,000 Yamanouchi Pharmaceutical Co., Ltd. $(29,583,763)
Total (Proceeds--$25,236,484) $(29,583,763)
============
****Financial futures contracts purchased as of April 30, 1998 were
as follows:
<CAPTION>
Number of Expiration Value
Contracts Issue Exchange Date (Notes 1a & 1d)
<C> <S> <S> <S> <C>
282 Hang Seng Index Hang Seng May 1998 $ 18,766,508
2,835 Nikkei 225 OSAKA June 1998 333,441,003
------------
Total Financial Futures Contracts Purchased
(Total Contract Price--$380,081,449) $352,207,511
============
Financial futures contracts sold as of April 30, 1998 were as
follows:
<CAPTION>
Number of Expiration Value
Contracts Issue Exchange Date (Notes 1a & 1d)
<C> <S> <C> <S> <C>
280 Japanese
Government Bond Tokyo June 1998 $278,536,807
275 Standard & Poor's
500 Index NYSE June 1998 76,945,000
200 US Treasury Bond NYSE June 1998 22,462,500
------------
Total Financial Futures Contracts Sold
(Total Contract Price--$371,639,025) $377,944,307
============
*****Forward foreign exchange contracts sold as of April 30, 1998
were as follows:
<CAPTION>
Unrealized
Appreciation
Foreign Expiration (Depreciation)
Currency Sold Date (Note 1d)
<S> <C> <S> <C>
CHF 37,000,000 June 1998 $ 106,602
ESP 1,000,000,000 May 1998 (152,672)
ESP 750,000,000 June 1998 7,141
FRF 695,000,000 May 1998 (1,936,738)
FRF 479,000,000 June 1998 (944,777)
GBP 145,000,000 May 1998 (164,680)
GBP 65,000,000 June 1998 (328,950)
JPY 9,000,000,000 May 1998 1,428,579
JPY 15,000,000,000 June 1998 (198,046)
NLG 200,000,000 May 1998 (750,431)
NLG 77,000,000 June 1998 (190,111)
NOK 172,000,000 May 1998 (127,815)
SEK 380,000,000 May 1998 (1,512,761)
------------
Total Unrealized Depreciation on Forward
Foreign Exchange Contracts--Net
(USD Commitment--$969,537,463) $ (4,764,659)
============
(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.
(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,
Inc.
(f)Each $1,000 face amount contains one warrant of United
International Holdings, Inc.
(g)Each $1,000 face amount contains one warrant of Unifi
Communications, Inc.
(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)Each $1,000 face amount contains one warrant of Ionica PLC.
(n)Securities held as collateral in connection with covered short
(o)Each $1,000 face amount contains one warrant of People's Choice
T.V. Corp.
(p)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 commerical bank loans by countries issuing
these scurities.
(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 $138,794,000,
representing 1.0% of net assets.
sales.
<CAPTION>
Acquisition Value
Issue Date(s) Cost (Note 1a)
<S> <C> <C> <C>
American Banknote Corp.,
11.25% due 12/01/2007 12/05/1997 $ 4,950,739 $ 5,037,500
CAI Wireless Systems, Inc.,
13% due 6/01/1998 2/17/1998 45,000,000 45,000,000
Diva Systems Corp.
(Convertible, Series C) 7/17/1996-
8/22/1996 8,410,000 15,000,000
First Washington Realty,
Exchangeable Debentures,
8.25% due 6/26/1999 6/27/1994 25,000,000 28,000,000
Ionica PLC 2/25/1997 10,286,966 3,290,474
Ionica PLC (Warrants) 2/25/1997 -- 25,508
Petroleos Mexicanos,
8.625% due 12/01/2023 5/24/1996-
8/01/1996 25,007,000 42,441,000
------------ ------------
Total $118,654,705 $138,794,482
============ ============
(s)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>
Dividend/
Net Share/ Net Interest
Industry Affiliate Face Activity Cost Income
<S> <S> <C> <C> <C>
Healthcare Advocat, Inc. -- -- ++
Services
Computer Borland
Software International
Corp. -- -- ++
Utilities-- El Paso Electric
Electric & Company (400,000) $(2,100,000) ++
Gas
Retail Stores Filene's
Basement Corp. -- -- ++
Real Estate Mid-America
Investment Realty Investments -- (92,582) $ 290,972
Trusts
Telecommu- PLD Telekom Inc. -- -- ++
nications
Telecommu- PLD Telekom Inc.
nications (Warrants) 74,500 111,751 ++
Telecommu- PLD Telekom Inc.
nications (Warrants) 18,700 30,855 ++
Telecommu- PLD Telekom Inc.,
nications Convertible Bonds,
0/14% due 6/01/2004 -- 4,326,525 4,326,524
Telecommu- PLD Telekom Inc.,
nications Convertible Bonds,
9% due 6/01/2006 -- -- 836,144
Real Estate Prime Retail, Inc. -- (1,761,386) 1,085,497
Investment
Trusts
Real Estate Prime Retail, Inc.
Investment (10.50%) -- -- 941,719
Trusts
Insurance Risk Capital
Holdings Inc. 20,000 412,500 ++
Telecommu- Rogers Cantel Mobile
nications Communications Inc.
(Class B) -- -- ++
Telecommu- Rogers Cantel Mobile
nications Communications Inc.
(Class B)(USD) 100,000 1,105,000 ++
Gaming Scientific Games
Holdings Corp. -- -- ++
Retail/ Ugly Duckling
Automotive Corporation 235,000 2,379,375 ++
++Non-income producing security.
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Global Allocation Fund, Inc., April 30, 1998
<TABLE>
STATEMENT OF ASSETS AND LIABILITIES
<CAPTION>
As of April 30, 1998
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$12,348,452,993)
(Note 1a) $13,581,789,889
Put options purchased, at value (cost--$19,181)
(Notes 1a & 1d) 24,375
Foreign cash (Note 1c) 417,645,843
Cash 16,678,352
Deposits on short sales (Note 1i) 25,236,484
Receivables:
Interest $ 94,009,915
Capital shares sold 17,571,885
Dividends 15,483,088
Securities sold 10,862,845
Variation margin (Note 1d) 1,093,733
Options written 198,231 139,219,697
---------------
Prepaid registration fees and other assets (Note 1g) 2,858,414
---------------
Total assets 14,183,453,054
---------------
Liabilities: Common stocks sold short, at market value (proceeds--
$25,236,484) (Note 1i) 29,583,763
Options written, at value (premiums received--$29,691,641)
(Notes 1a & 1d) 35,989,576
Unrealized depreciation on forward foreign exchange contracts
(Note 1d) 4,764,659
Payables:
Securities purchased 53,917,903
Capital shares redeemed 35,337,764
Distributor (Note 2) 8,941,125
Investment adviser (Note 2) 7,664,868
Dividends on short sales (Note 1i) 123,598
Options purchased 3,056 105,988,314
---------------
Accrued expenses and other liabilities 4,719,101
---------------
Total liabilities 181,045,413
---------------
Net Assets: Net assets $14,002,407,641
===============
Net Assets Class A Shares of Common Stock, $0.10 par value, 450,000,000
Consist of: shares authorized $ 13,568,459
Class B Shares of Common Stock, $0.10 par value, 2,000,000,000
shares authorized 63,944,661
Class C Shares of Common Stock, $0.10 par value, 200,000,000
shares authorized 4,767,373
Class D Shares of Common Stock, $0.10 par value, 900,000,000
shares authorized 10,269,659
Paid-in capital in excess of par 11,991,255,302
Undistributed investment income--net 105,465,321
Undistributed realized capital gains on investments and
foreign currency transactions--net 622,938,118
Unrealized appreciation on investments and foreign currency
transactions--net 1,190,198,748
---------------
Net assets $14,002,407,641
===============
Net Asset Class A--Based on net assets of $2,082,008,582 and 135,684,592
Value: shares outstanding $ 15.34
===============
Class B--Based on net assets of $9,637,085,428 and 639,446,609
shares outstanding $ 15.07
===============
Class C--Based on net assets of $710,199,763 and 47,673,734
shares outstanding $ 14.90
===============
Class D--Based on net assets of $1,573,113,868 and 102,696,586
shares outstanding $ 15.32
===============
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENT OF OPERATIONS
<CAPTION>
For the Six Months Ended April 30, 1998
<S> <S> <C> <C>
Investment Interest and discount earned (net of $65,626 foreign
Income withholding tax) $ 288,505,570
(Notes 1e & 1f): Dividends (net of $2,999,223 foreign withholding tax) 53,400,332
Other 3,068,505
---------------
Total income 344,974,407
---------------
Expenses: Investment advisory fees (Note 2) $ 51,996,143
Account maintenance and distribution fees--Class B (Note 2) 48,020,051
Transfer agent fees--Class B (Note 2) 6,295,111
Account maintenance and distribution fees--Class C (Note 2) 3,404,511
Account maintenance fees--Class D (Note 2) 1,882,022
Custodian fees 1,598,262
Transfer agent fees--Class A (Note 2) 1,177,441
Transfer agent fees--Class D (Note 2) 854,692
Printing and shareholder reports 487,710
Accounting services (Note 2) 482,204
Transfer agent fees--Class C (Note 2) 477,381
Registration fees (Note 1g) 296,183
Dividends on short sales (Note 1i) 286,278
---------------
Total expenses before reimbursement 117,257,989
Reimbursement of expenses (Note 2) (6,370,119)
---------------
Total expenses after reimbursement 110,887,870
---------------
Investment income--net 234,086,537
---------------
Realized & Realized gain (loss) from:
Unrealized Gain Investments--net $ 691,812,639
(Loss) on Foreign currency transactions--net (57,121,282) 634,691,357
Investments & ---------------
Foreign Currency Change in unrealized appreciation/depreciation on:
Transactions--Net Investments--net 121,810,340
(Notes 1c, 1d, Foreign currency transactions--net 29,238,382 151,048,722
1f & 3): --------------- ---------------
Net realized and unrealized gain on investments and foreign
currency transactions 785,740,079
---------------
Net Increase in Net Assets Resulting from Operations $ 1,019,826,616
===============
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Global Allocation Fund, Inc., April 30, 1998
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
For the Six For the Year
Months Ended Ended
Increase (Decrease) in Net Assets: April 30, 1998 Oct. 31, 1997
<S> <S> <C> <C>
Operations: Investment income--net $ 234,086,537 $ 512,330,919
Realized gain on investments and foreign currency
transactions--net 634,691,357 1,254,936,241
Change in unrealized appreciation/depreciation on investments
and foreign currency transactions--net 151,048,722 79,910,089
--------------- ---------------
Net increase in net assets resulting from operations 1,019,826,616 1,847,177,249
--------------- ---------------
Dividends & Investment income--net:
Distributions to Class A (66,036,680) (111,208,977)
Shareholders Class B (259,458,814) (435,557,200)
(Note 1h): Class C (18,310,368) (23,496,200)
Class D (44,885,416) (64,960,694)
Realized gain on investments--net:
Class A (159,001,453) (79,203,184)
Class B (747,330,007) (378,949,932)
Class C (52,244,261) (17,801,965)
Class D (112,523,476) (45,374,563)
--------------- ---------------
Net decrease in net assets resulting from dividends and
distributions to shareholders (1,459,790,475) (1,156,552,715)
--------------- ---------------
Capital Share Net increase in net assets derived from capital share
Transactions transactions 279,336,388 1,540,268,692
(Note 4): --------------- ---------------
Net Assets: Total increase (decrease) in net assets (160,627,471) 2,230,893,226
Beginning of period 14,163,035,112 11,932,141,886
--------------- ---------------
End of period* $14,002,407,641 $14,163,035,112
=============== ===============
<FN>
*Undistributed investment income--net $ 105,465,321 $ 260,070,062
=============== ===============
See Notes to Financial Statements.
</TABLE>
<TABLE>
FINANCIAL HIGHLIGHTS
<CAPTION>
Class A
The following per share data 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: 1998++ 1997++ 1996++ 1995++ 1994
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning
Operating of period $ 15.92 $ 15.17 $ 14.21 $ 13.07 $ 13.52
Performance: ----------- ----------- ----------- ----------- -----------
Investment income--net .31 .71 .78 .79 .60
Realized and unrealized gain
(loss) on investments and foreign
currency transactions--net .81 1.57 1.59 1.04 (.31)
----------- ----------- ----------- ----------- -----------
Total from investment operations 1.12 2.28 2.37 1.83 .29
----------- ----------- ----------- ----------- -----------
Less dividends and distributions:
Investment income--net (.50) (.88) (.98) (.39) (.51)
Realized gain on
investments--net (1.20) (.65) (.43) (.30) (.23)
----------- ----------- ----------- ----------- -----------
Total dividends and distributions (1.70) (1.53) (1.41) (.69) (.74)
----------- ----------- ----------- ----------- -----------
Net asset value, end of period $ 15.34 $ 15.92 $ 15.17 $ 14.21 $ 13.07
=========== =========== =========== =========== ===========
Total Investment Based on net asset value
Return:** per share 7.96%+++ 16.08% 17.81% 14.81% 2.14%
=========== =========== =========== =========== ===========
Ratios to Average Expenses, net of reimbursement .82%* .83% .86% .90% .89%
Net Assets: =========== =========== =========== =========== ===========
Expenses .90%* .91% .93% .90% .89%
=========== =========== =========== =========== ===========
Investment income--net 4.16%* 4.64% 5.31% 5.98% 4.60%
=========== =========== =========== =========== ===========
Supplemental Net assets, end of period
Data: (in thousands) $ 2,082,009 $ 2,132,254 $ 1,841,974 $ 1,487,805 $ 1,357,906
=========== =========== =========== =========== ===========
Portfolio turnover 19.57% 55.42% 51.26% 36.78% 57.04%
=========== =========== =========== =========== ===========
Average commission rate
paid++++ $ .0226 $ .0307 $ .0048 -- --
=========== =========== =========== =========== ===========
<CAPTION>
Class B
The following per share data 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: 1998++ 1997++ 1996++ 1995++ 1994
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning
Operating of period $ 15.65 $ 14.95 $ 14.01 $ 12.91 $ 13.38
Performance: ----------- ----------- ----------- ----------- -----------
Investment income--net .23 .55 .62 .65 .46
Realized and unrealized gain
(loss) on investments and
foreign currency trans-
actions--net .81 1.52 1.59 1.01 (.31)
----------- ----------- ----------- ----------- -----------
Total from investment operations 1.04 2.07 2.21 1.66 .15
----------- ----------- ----------- ----------- -----------
Less dividends and distributions:
Investment income--net (.42) (.72) (.84) (.26) (.39)
Realized gain on invest-
ments--net (1.20) (.65) (.43) (.30) (.23)
----------- ----------- ----------- ----------- -----------
Total dividends and distributions (1.62) (1.37) (1.27) (.56) (.62)
----------- ----------- ----------- ----------- -----------
Net asset value, end of period $ 15.07 $ 15.65 $ 14.95 $ 14.01 $ 12.91
=========== =========== =========== =========== ===========
Total Investment Based on net asset value per
Return:** share 7.49%+++ 14.82% 16.71% 13.54% 1.13%
=========== =========== =========== =========== ===========
Ratios to Average Expenses, net of reimbursement 1.83%* 1.85% 1.87% 1.93% 1.91%
Net Assets: =========== =========== =========== =========== ===========
Expenses 1.93%* 1.93% 1.95% 1.93% 1.91%
=========== =========== =========== =========== ===========
Investment income--net 3.14%* 3.62% 4.29% 4.96% 3.58%
=========== =========== =========== =========== ===========
Supplemental Net assets, end of period (in
Data: thousands) $ 9,637,085 $ 9,879,603 $ 8,660,279 $ 6,668,499 $ 6,457,130
=========== =========== =========== =========== ===========
Portfolio turnover 19.57% 55.42% 51.26% 36.78% 57.04%
=========== =========== =========== =========== ===========
Average commission rate
paid++++ $ .0226 $ .0307 $ .0048 -- --
=========== =========== =========== =========== ===========
<FN>
*Annualized.
**Total investment returns exclude the effects of sales loads.
+++Aggregate total investment return.
++Based on average shares outstanding.
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Global Allocation Fund, Inc., April 30, 1998
<TABLE>
FINANCIAL HIGHLIGHTS (concluded)
<CAPTION>
Class C
The following per share data and
ratios have been derived from
information provided in the For the For the
financial statements. Six Months Period
Ended Oct. 21, 1994++
Increase (Decrease) in Net Asset April 30, For the Year Ended October 31, to Oct. 31,
Value: 1998++++ 1997++++ 1996++++ 1995++++ 1994
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of
Operating period $ 15.50 $ 14.83 $ 13.94 $ 12.91 $ 12.91
Performance: ----------- ----------- ----------- ----------- -----------
Investment income--net .23 .54 .61 .64 .01
Realized and unrealized gain
(loss) on investments and foreign
currency transactions--net .79 1.52 1.58 1.02 (.01)
----------- ----------- ----------- ----------- -----------
Total from investment operations 1.02 2.06 2.19 1.66 --
----------- ----------- ----------- ----------- -----------
Less dividends and distributions:
Investment income--net (.42) (.74) (.87) (.33) --
Realized gain on
investments--net (1.20) (.65) (.43) (.30) --
----------- ----------- ----------- ----------- -----------
Total dividends and distributions (1.62) (1.39) (1.30) (.63) --
----------- ----------- ----------- ----------- -----------
Net asset value, end of period $ 14.90 $ 15.50 $ 14.83 $ 13.94 $ 12.91
=========== =========== =========== =========== ===========
Total Investment Based on net asset value
Return:** per share 7.46%+++ 14.84% 16.68% 13.58% .00%+++
=========== =========== =========== =========== ===========
Ratios to Average Expenses, net of reimbursement 1.84%* 1.86% 1.88% 1.95% 2.44%*
Net Assets: =========== =========== =========== =========== ===========
Expenses 1.94%* 1.94% 1.95% 1.95% 2.44%*
=========== =========== =========== =========== ===========
Investment income--net 3.13%* 3.60% 4.24% 4.80% 3.71%*
=========== =========== =========== =========== ===========
Supplemental Net assets, end of period
Data: (in thousands) $ 710,200 $ 671,467 $ 385,753 $ 102,361 $ 7,347
=========== =========== =========== =========== ===========
Portfolio turnover 19.57% 55.42% 51.26% 36.78% 57.04%
=========== =========== =========== =========== ===========
Average commission rate
paid++++++ $ .0226 $ .0307 $ .0048 -- --
=========== =========== =========== =========== ===========
<CAPTION>
Class D
The following per share data and
ratios have been derived from
information provided in the For the For the
financial statements. Six Months Period
Ended Oct. 21, 1994++
Increase (Decrease) in Net Asset April 30, For the Year Ended October 31, to Oct. 31,
Value: 1998++++ 1997++++ 1996++++ 1995++++ 1994
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of
Operating period $ 15.89 $ 15.15 $ 14.19 $ 13.08 $ 13.07
Performance: ----------- ----------- ----------- ----------- -----------
Investment income--net .29 .68 .77 .77 .01
Realized and unrealized gain on
investments and foreign
currency transactions--net .82 1.55 1.57 1.01 --
----------- ----------- ----------- ----------- -----------
Total from investment operations 1.11 2.23 2.34 1.78 .01
----------- ----------- ----------- ----------- -----------
Less dividends and distributions:
Investment income--net (.48) (.84) (.95) (.37) --
Realized gain on
investments--net (1.20) (.65) (.43) (.30) --
----------- ----------- ----------- ----------- -----------
Total dividends and distributions (1.68) (1.49) (1.38) (.67) --
----------- ----------- ----------- ----------- -----------
Net asset value, end of period $ 15.32 $ 15.89 $ 15.15 $ 14.19 $ 13.08
=========== =========== =========== =========== ===========
Total Investment Based on net asset value
Return:** per share 7.89%+++ 15.76% 17.59% 14.43% .08%+++
=========== =========== =========== =========== ===========
Ratios to Average Expenses, net of reimbursement 1.07%* 1.08% 1.10% 1.16% 1.69%*
Net Assets: =========== =========== =========== =========== ===========
Expenses 1.16%* 1.16% 1.18% 1.16% 1.69%*
=========== =========== =========== =========== ===========
Investment income--net 3.91%* 4.38% 5.04% 5.63% 4.46%*
=========== =========== =========== =========== ===========
Supplemental Net assets, end of period
Data: (in thousands) $ 1,573,114 $ 1,479,711 $ 1,044,136 $ 256,525 $ 4,968
=========== =========== =========== =========== ===========
Portfolio turnover 19.57% 55.42% 51.26% 36.78% 57.04%
=========== =========== =========== =========== ===========
Average commission rate
paid++++++ $ .0226 $ .0307 $ .0048 -- --
=========== =========== =========== =========== ===========
<FN>
*Annualized.
**Total investment returns exclude the effects of sales loads.
+++Aggregate total investment return.
++Commencement of operations.
++++Based on average shares outstanding.
++++++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 exchange rate on the date of the transaction. Such
conversions may significantly affect the rate shown.
++++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 exchange rate on the date of the transaction. Such
conversions may significantly affect the rate shown.
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Global Allocation Fund, Inc., April 30, 1998
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.
(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 financial
institutions that have, in the opinion of Merrill Lynch Asset
Management, L.P. ("MLAM"), substantial capital relative to the
Fund's exposure, or have provided the Fund with a third-party
guaranty or other credit enhancement. Under such agreements, the
financial institution 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.
* 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
financial 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.
(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. Interest income (including
amortization of discount) is recognized on the accrual basis.
Realized gains and losses on security transactions are determined on
the identified cost basis.
(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
subsequently 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
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.
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, 1998, MLAM
earned fees of $51,996,143, of which $6,370,119 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, 1998, MLAM paid MLAM U.K. a
fee of $6,081,949 pursuant to such agreement.
Pursuant to 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:
Merrill Lynch Global Allocation Fund, Inc., April 30, 1998
NOTES TO FINANCIAL STATEMENTS (concluded)
Account
Maintenance Fee Distribution Fee
Class B 0.25% 0.75%
Class C 0.25% 0.75%
Class D 0.25% --
Pursuant to a sub-agreement with the Distributor, Merrill Lynch,
Pierce, Fenner & Smith Inc. ("MLPF&S"), a subsidiary of ML & Co.,
also provides account maintenance and distribution services to the
Fund. The ongoing account maintenance fee compensates the
Distributor and MLPF&S for providing account maintenance services to
Class B, Class C and Class D shareholders. The ongoing 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, 1998, 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:
MLFD MLPF&S
Class A $14,035 $178,036
Class D $45,919 $619,227
For the six months ended April 30, 1998, MLPF&S received contingent
deferred sales charges of $5,819,684 and $119,037 relating to
transactions in Class B and Class C Shares, respectively.
Furthermore, MLPF&S received contingent deferred sales charges of
$26,866 relating to transactions subject to front-end sales charge
waivers in Class A Shares.
In addition, MLPF&S received $444,248 in commissions on the
execution of portfolio security transactions for the Fund for the
six months ended April 30, 1998.
For the six months ended April 30, 1998, the Fund paid Merrill Lynch
Security Pricing Service, an affiliate of MLPF&S, $272 for security
price quotations to compute the net asset value of the Fund.
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, 1998 were $2,363,270,431 and
$2,979,448,964, respectively.
Net realized gains (losses) for the six months ended April 30, 1998
and net unrealized gains (losses) as of April 30, 1998 were as
follows:
Realized Unrealized
Gains Gains
(Losses) (Losses)
Long-term investments $ 736,327,516 $1,234,856,868
Short-term investments (5,443) (1,519,972)
Short sales investments (274,001) (4,347,279)
Options purchased -- 5,194
Options written 3,703,337 (6,297,935)
Financial futures contracts (47,938,770) (34,179,220)
Forward foreign exchange contracts 12,071,442 (4,764,659)
Foreign currency transactions (69,192,724) 6,445,751
------------- --------------
Total $ 634,691,357 $1,190,198,748
============= ==============
As of April 30, 1998, net unrealized appreciation for Federal income
tax purposes aggregated $1,227,044,155, of which $1,912,513,120
related to appreciated securities and $685,468,965 related to
depreciated securities. At April 30, 1998, the aggregate cost of
investments, net of premiums received for options written, for
Federal income tax purposes was $12,318,780,533.
Transactions in call options written for the six months ended April
30, 1998 were as follows:
Nominal Value Premiums
Covered Received
Outstanding call options written,
beginning of period 2,050,000 $ 8,091,353
Options written 21,385,671 31,350,273
Options exercised (286,000) (4,137,661)
Options closed (1,964,000) (5,612,324)
------------ -------------
Outstanding call options written,
end of period 21,185,671 $ 29,691,641
============ =============
4. Capital Share Transactions:
Net increase in net assets derived from capital share transactions
was $279,336,388 and $1,540,268,692 for the six months ended April
30, 1998 and for the year ended October 31, 1997, respectively.
Transactions in capital shares for each class were as follows:
Class A Shares for the Six Dollar
Months Ended April 30, 1998 Shares Amount
Shares sold 10,727,022 $ 160,971,890
Shares issued to shareholders in
reinvestment of dividends and
distributions 14,287,420 201,309,758
------------- --------------
Total issued 25,014,442 362,281,648
Shares redeemed (23,286,070) (347,691,093)
------------- --------------
Net increase 1,728,372 $ 14,590,555
============= ==============
Class A Shares for the Year Dollar
Ended October 31, 1997 Shares Amount
Shares sold 29,258,107 $ 446,649,910
Shares issued to shareholders in
reinvestment of dividends and
distributions 11,603,933 170,013,343
------------- --------------
Total issued 40,862,040 616,663,253
Shares redeemed (28,298,487) (435,986,811)
------------- --------------
Net increase 12,563,553 $ 180,676,442
============= ==============
Class B Shares for the Six Dollar
Months Ended April 30, 1998 Shares Amount
Shares sold 37,908,746 $ 560,580,918
Shares issued to shareholders in
reinvestment of dividends and
distributions 63,365,402 880,145,434
------------- --------------
Total issued 101,274,148 1,440,726,352
Shares redeemed (87,359,047) (1,287,963,711)
Automatic conversion of shares (5,562,962) (81,461,205)
------------- --------------
Net increase 8,352,139 $ 71,301,436
============= ==============
Class B Shares for the Year Dollar
Ended October 31, 1997 Shares Amount
Shares sold 121,098,572 $1,825,730,372
Shares issued to shareholders in
reinvestment of dividends and
distributions 49,478,020 713,661,687
------------- --------------
Total issued 170,576,592 2,539,392,059
Shares redeemed (108,673,162) (1,647,892,648)
Automatic conversion of shares (10,144,962) (152,808,738)
------------- --------------
Net increase 51,758,468 $ 738,690,673
============= ==============
Class C Shares for the Six Dollar
Months Ended April 30, 1998 Shares Amount
Shares sold 6,644,323 $ 96,735,695
Shares issued to shareholders in
reinvestment of dividends and
distributions 4,571,829 62,771,216
------------- --------------
Total issued 11,216,152 159,506,911
Shares redeemed (6,869,537) (100,033,504)
------------- --------------
Net increase 4,346,615 $ 59,473,407
============= ==============
Class C Shares for the Year Dollar
Ended October 31, 1997 Shares Amount
Shares sold 21,707,656 $ 324,717,339
Shares issued to shareholders in
reinvestment of dividends and
distributions 2,575,436 36,957,125
------------- --------------
Total issued 24,283,092 361,674,464
Shares redeemed (6,974,368) (104,951,727)
------------- --------------
Net increase 17,308,724 $ 256,722,737
============= ==============
Class D Shares for the Six Dollar
Months Ended April 30, 1998 Shares Amount
Shares sold 9,033,666 $ 134,808,765
Automatic conversion of shares 5,480,568 81,461,205
Shares issued to shareholders in
reinvestment of dividends and
distributions 9,653,249 135,917,749
------------- --------------
Total issued 24,167,483 352,187,719
Shares redeemed (14,586,343) (218,216,729)
------------- --------------
Net increase 9,581,140 $ 133,970,990
============= ==============
Class D Shares for the Year Dollar
Ended October 31, 1997 Shares Amount
Shares sold 22,634,091 $ 346,497,021
Automatic conversion of shares 10,015,861 152,808,738
Shares issued to shareholders in
reinvestment of dividends and
distributions 6,415,926 94,133,358
------------- --------------
Total issued 39,065,878 593,439,117
Shares redeemed (14,860,090) (229,260,277)
------------- --------------
Net increase 24,205,788 $ 364,178,840
============= ==============
5. Commitments:
At April 30, 1998, 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 and sell various
foreign currencies with approximate values of $64,563,000 and
$57,146,000, respectively.
Merrill Lynch Global Allocation Fund, Inc., April 30, 1998
COMMON STOCK PORTFOLIO CHANGES
For the Quarter Ended April 30, 1998
Additions
AMB Property Corporation
Anthracite Capital, Inc.
Banco Comercial Portugues, S.A. (BCP)
Banco Comercial Portugues, S.A. (BCP)
(Registered)
*Bass PLC (B Shares)
CAI Wireless Systems, Inc.
Consolidated Freightways Corp.
DIMON, Inc.
HSBC Holdings PLC (GBP)
Imation Corp.
Iomega Corporation
Millipore Corporation
Motorola, Inc.
Novartis AG (Registered)
*PolyGram N.V.
SmithKline Beecham PLC
Societe Generale de France S.A. (New
Shares)
Wilshire Real Estate Investment Trust Inc.
Deletions
AirTouch Communications, Inc.
Alteon, Inc.
Alumax, Inc.
Assurances Generales de France S.A. (AGF)
BCE Telecommunications, Inc.
*Bass PLC (B Shares)
British Airways PLC
C.P. Pokphand Co. Ltd. (Ordinary)
CS Holdings AG (Registered)
Comsat Corp.
Consolidated Edison Company, Inc.
CoreStates Financial Corp.
Daimler-Benz AG
Department 56, Inc.
Deutsche Telekom AG
Downey Savings & Loan Association
Eastman Kodak Company
FileNet Corporation
First Chicago NBD Corporation
Ford Motor Company
Fotolabo S.A.
Gannett Co., Inc.
Geotek Communications, Inc.
Groupe Danone S.A.
Grupo Fosforera Espanola S.A.
Hartford Financial Services Group Inc.
Imperial Chemical Industries PLC
Lincoln National Corp.
Lukens Inc.
Nokia Corp. (ADR)
Nokia OY
*PolyGram N.V.
Saurer AG (Registered)
Smith (W.H.) Group PLC (Class A)
Telecel-Comunicacoes Pessoais, S.A.
Telecom Italia Mobile S.p.A.
Telecom Italia S.p.A.
Telegroup Inc.
UNOVA, Inc.
U S West Media Group
United Healthcare Corporation
Waste Management Inc.
[FN]
*Added and deleted in the same quarter.
Worldwide
Investments
As of 4/30/98
PORTFOLIO INFORMATION
Breakdown of Stocks &
Fixed-Income Securities by Percent of
Country Net Assets
United States* 55.1%
Japan 6.6
Germany 5.3
United Kingdom 5.2
Argentina 4.3
France 2.4
South Korea 1.8
Netherlands 1.6
Australia 1.6
Canada 1.4
Hong Kong 1.2
Brazil 1.1
Russia 0.9
Italy 0.9
Indonesia* 0.9
Sweden 0.6
New Zealand 0.6
Mexico 0.5
Singapore 0.5
Finland 0.5
Taiwan 0.5
India 0.4
Portugal 0.4
Malaysia 0.4
Norway 0.3
Thailand 0.3
China 0.3
Switzerland 0.3
Philippines 0.2
Chile 0.2
Spain 0.2
South Africa 0.2
Austria 0.1
Ireland 0.1
Venezuela 0.1
[FN]
*Includes investments in short-term securities.
Ten Largest Holdings Percent of
(Equity Investments) Net Assets
Republic New York Corp. 0.7%
Broken Hill Proprietary Co., Ltd. 0.6
Noble Drilling Corp. 0.6
Houston Industries, Inc. 0.5
Mellon Bank Corp. 0.4
Internationale Nederlanden
Groep N.V. 0.4
First Commerce Corp. 0.4
Golden State Bancorp Inc. (8.75%
Convertible, Series E) 0.4
KeyCorp 0.4
MontEdison S.p.A. 0.4
Ten Largest Industries Percent of
(Equity Investments) Net Assets
Banking++ 5.3%
Telecommunications 3.1
Utilities--Electric & Gas 2.7
Insurance 2.5
Multi-Industry 1.7
Metals & Mining 1.4
Real Estate Investment Trusts 1.3
Chemicals 1.3
Financial Services 1.1
Energy & Petroleum 1.1
[FN]
++Includes savings banks.
