MERRILL LYNCH
GLOBAL
ALLOCATION
FUND, INC.
FUND LOGO
Annual Report
October 31, 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. Please see the Fund's prospectus for a description of
risks associated with global investments.
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 10/31/98
<CAPTION>
Percent of Fund's Net Assets Reference Portfolio
10/31/98 7/31/98 Percentages
<S> <C> <C> <C>
North & South American Equities 24.0%* 19.6%* 36.0%
European Equities 12.1 12.3 11.0
Pacific Basin Equities 9.9 7.6 13.0
Total Equities 46.0 39.5 60.0
US Dollar Denominated Fixed-Income Securities 44.4 46.0 24.0
US Issuers 22.7 26.9 --
Non-US Issuers 21.7 19.1 --
Non-US Dollar Denominated Fixed-Income Securities 4.0 9.4 16.0
Total Fixed-Income Securities 48.4++ 55.4++ 40.0
Cash & Cash Equivalents 5.6 5.1 --
<FN>
*Includes value of Financial Futures Contracts.
++Includes Preferred Stock.
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
Phillip Gillespie, Secretary
Custodian
Brown Brothers Harriman & Co.
40 Water Street
Boston, MA 02109
Transfer Agent
Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 637-3863
Merrill Lynch Global Allocation Fund, Inc., October 31, 1998
DEAR SHAREHOLDER
For the three months ended October 31, 1998, Merrill Lynch Global
Allocation Fund, Inc.'s Class A, Class B, Class C and Class D Shares
had total returns of -7.79%, -7.99%, -7.95% and -7.80%,
respectively, compared to a +2.15% return for the unmanaged
Reference Portfolio. This benchmark index consists of US stocks (as
represented by the Standard & Poor's 500 Index (S&P 500 Index),
foreign stocks (Financial Times/Standard & Poor's--Actuaries World
Index (Ex-US)), US Treasury 5-year bonds (ML Treasury Index GA05),
and foreign bonds (Salomon Brothers World Government Bond Index (Ex-
US)). A brief description of each of these indexes can be found in
the "Recent Performance Results" table on page 6 of this report to
shareholders. (Fund results do not reflect sales charges, and would
be lower if sales charges were included. Complete performance
information, including average annual total returns, can be found on
pages 4--6 of this report to shareholders.)
The sharp declines in the Fund's total returns in the October
quarter reflect the turbulence experienced by virtually all of the
world's financial markets during the period, especially in August.
The Fund had its worst monthly percentage decline in its history in
August, as illustrated by the -12.87% return for Class A Shares.
Typically, if most of the world's stock markets decline, we would
also expect the Fund's net asset values to decline, although not as
sharply as equities. However, during this period, the Fund declined
just as much, and in some cases more, than the major stock market
indexes.
The US equity market had negative returns in August, with the S&P
500 Index declining 14.5% and the S&P 400 Mid Cap Index losing 14.9%
of its value. Smaller-capitalization stocks and stocks of cyclical
companies performed particularly poorly in the United States. For
example, the un-managed Russell 2000 and the Morgan Stanley Cyclical
Stock Indexes declined 19.4% and 15.6%, respectively. Outside of the
United States, the Morgan Stanley Capital International Europe Index
had a -12.6% return in August, and the Japanese stock market
continued to struggle, with a 13.9% decline for the Nikkei 225
Index. Emerging equity markets performed even more poorly, as
illustrated by August's returns for Mexican Bolsa, which declined
approximately 35%, and the Argentine Merval, which lost
approximately 39% in value. (All indexes are unmanaged, with returns
cited in US dollar terms.)
There were two key reasons behind the Fund's underperformance during
the month of August and the October quarter as a whole. First, our
equity investments in the United States are focused in stocks with
market capitalizations smaller than those stocks represented in the
S&P 500 Index. At the same time, stocks in the Fund's portfolio are
more cyclical in nature than those equities in the S&P 500 Index.
Although we invested in these areas since we believed they offered
better relative value and long-term appreciation potential than
large-cap, less cyclical stocks, the declines they experienced
during the quarter created a drag on Fund performance.
The other key reason for the Fund's relative underperformance during
the October quarter was the performance of its bond investments.
Prices for many of our bond holdings declined very sharply during
the quarter. In particular, August and September were marked by a
dramatic flight to quality as investors sought to buy issues of the
very highest quality with the most liquidity--that is, US Treasury
bonds--and sold virtually all other fixed-income issues. An
important factor in this unprecedented flight to quality was the
near failure of a well-publicized hedge fund. Highly leveraged
investors, such as hedge funds and financial services firms'
proprietary trading desks, sought to reduce riskier fixed-income
positions during the period, which drove prices down sharply. These
sales were undertaken with little regard for underlying
fundamentals.
During the October quarter, we modestly increased the Fund's
weighting in equities and fixed-income holdings by reducing cash
reserves and selling US Treasury bond investments. As of October 31,
1998, the Fund had a 46.0% equity exposure, 48.4% in fixed-income
holdings and 5.6% in cash reserves. (Please see the "Summary of the
Fund's Overall Asset Mix" table on page 1 of this report to
shareholders.)
Fiscal Year in Review
For the fiscal year ended October 31, 1998, the Fund's Class A,
Class B, Class C and Class D Shares had total returns of -4.43%,
- -5.37%, -5.38% and -4.63%, respectively, compared to a +14.79% total
return for the unmanaged Reference Portfolio.
The primary reasons for the Fund's underperformance relative to the
Reference Portfolio for the fiscal year were its underweighting in
US stocks and US Treasury and European government bonds. The US
stock market was the world's best-performing stock market during the
period. Government bonds of the Group of Seven (G-7) industrialized
nations--perceived to be safest and the most liquid--far
outperformed their non-G-7 counterparts.
Our value-oriented investment approach also hindered performance in
a market environment that favored growth or momentum investment
styles. Large-capitalization growth stocks dominated the US stock
market during the fiscal year. Investor interest focused on a
relatively small number of companies believed to possess earnings
growth potential even in a sluggish domestic economy and poor
economic conditions abroad. However, valuations for these stocks
exceeded our valuation criteria. Most of our equity investments are
in mid- to small-cap issues that underperformed their large-cap
counterparts.
In Conclusion
Although the Fund's recent performance results have been
disappointing, we continue to believe that our investment strategy
will benefit shareholders over the longer term. Throughout most of
the Fund's history, our value-oriented investment discipline has
resulted in attractive risk-adjusted total returns. Although we
cannot predict exactly when this approach will again result in
improved investment returns, we believe that it will do so.
We thank you for your investment in Merrill Lynch Global Allocation
Fund, Inc., and we look forward to reviewing our outlook and
strategy with you again in our next report to shareholders.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Bryan N. Ison)
Bryan N. Ison
Senior Vice President and
Portfolio Manager
December 14, 1998
Merrill Lynch Global Allocation Fund, Inc., October 31, 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 "Recent Performance
Results" and "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.
Total Return
Based on a $10,000
Investment
A line graph depicting the growth of an investment in the Fund's
Class A Shares & Class B Shares compared to growth of an investment
in the Financial Times/Standard & Poor's--Actuaries World Index.
Beginning and ending values are:
2/03/89** 10/98
ML Global Allocation Fund, Inc.++--
Class A Shares* $ 9,475 $29,145
ML Global Allocation Fund, Inc.++--
Class B Shares* $10,000 $27,847
Financial Times/Standard & Poor's--
Actuaries World Index++++ $10,000 $24,044
A line graph depicting the growth of an investment in the Fund's
Class C Shares & Class D Shares compared to growth of an investment
in the Financial Times/Standard & Poor's--Actuaries World Index.
Beginning and ending values are:
10/21/94** 10/98
ML Global Allocation Fund, Inc.++--
Class C Shares* $10,000 $14,401
ML Global Allocation Fund, Inc.++--
Class D Shares* $ 9,475 $14,087
Financial Times/Standard & Poor's--
Actuaries World Index++++ $10,000 $16,864
<FN>
*Assuming maximum sales charge, transaction costs and other
operating expenses, including advisory fees.
**Commencement of operations.
++ML Global Allocation Fund, Inc. invests in a portfolio of US and
foreign issues, whose composition varies with respect to types of
securities and markets in response to changing market and economic
trends.
++++This unmanaged capitalization-weighted Index is comprised of
2,200 equities from 24 countries in 12 regions, including the United
States.
Average Annual
Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 9/30/98 -10.25% -14.96%
Five Years Ended 9/30/98 + 8.43 + 7.27
Inception (2/03/89) through 9/30/98 +11.82 +11.20
<FN>
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 9/30/98 -11.20% -14.27%
Five Years Ended 9/30/98 + 7.33 + 7.33
Inception (2/03/89) through 9/30/98 +10.69 +10.69
<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 9/30/98 -11.21% -11.98%
Inception (10/21/94) through 9/30/98 + 8.46 + 8.46
<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 9/30/98 -10.50% -15.20%
Inception (10/21/94) through 9/30/98 + 9.33 + 7.85
<FN>
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
Merrill Lynch Global Allocation Fund, Inc., October 31, 1998
PERFORMANCE DATA (concluded)
</TABLE>
<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* - 4.43% - 7.79% +207.60%
ML Global Allocation Fund, Inc.--Class B Shares* - 5.37 - 7.99 +178.47
ML Global Allocation Fund, Inc.--Class C Shares* - 5.38 - 7.95 + 44.01
ML Global Allocation Fund, Inc.--Class D Shares* - 4.63 - 7.80 + 48.67
US Stocks: Standard & Poor's 500 Index**++ +21.99 - 1.57 +381.95/+157.09
Non-US Stocks: Financial Times/Standard & Poor's--
Actuaries World Index (Ex-US)***++ + 5.87 - 6.22 + 51.12/+21.99
US Bonds: ML Treasury Index GA05****++ +11.71 + 6.75 +122.57/+42.94
Non-US Bonds: Salomon Brothers World Government
Bond Index (Ex-US)*****+++ +12.80 +14.42 +139.19/+36.08
<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 periods are Class A & Class B Shares, from 2/03/89
to 10/31/98 and Class C & Class D Shares, from 10/21/94to 10/31/98.
**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 ten
government bond indexes, excluding the United States.
++Since inception total returns are from 2/03/89 to 10/31/98 and
10/21/94 to 10/31/98, respectively.
+++Since inception total returns are from 1/31/89 to 10/31/98 and
10/21/94 to 10/31/98, respectively.
</TABLE>
COMMON STOCK PORTFOLIO CHANGES
For the Quarter Ended October 31, 1998
Additions
AGCO Corporation
Alcatel Alsthom Cie Generale
d'Electrcite S.A. (ADR)
Allied Zurich PLC
Banco Portugues do Atlantico S.A.
Barclays PLC
Billing Concepts Corp.
*British American Tobacco PLC
Buhrmann N.V.
CNP Assurances
CarrAmerica Realty Corporation
Compania Anonima Nacional Telefonos
de Venezuela S.A. (CANTV)(ADR)
Credit Suisse Group (Registered)
*Cygnet Financial Corporation
E.I. duPont de Nemours & Company
FileNET Corporation
Friedman, Billings, Ramsey & Company
HIH Winterthur International Holdings
Ltd. (Installment Receipts)
LTC Healthcare Inc.
Leap Wireless International, Inc.
National Health Investors, Inc.
Nationwide Health Properties, Inc.
*Royal Dutch Petroleum Co. (ADR)
Safety-Kleen Corp.
Schlumberger Limited
Security Capital U.S. Realty
Sierra Health Services, Inc.
SpeedFam International, Inc.
Tektronix, Inc.
Union Bank of Switzerland
United Dominion Realty Trust, Inc.
United HealthCare Corporation
Veritas DGC Inc.
Weatherford International, Inc.
*Weyerhaeuser Company
Deletions
ADC Telecommunications, Inc.
ALLTEL Corporation
American Standard, Inc.
Atmos Energy Corp.
B.A.T. Industries PLC
Bouygues S.A.
Brinker International, Inc.
*British American Tobacco PLC
Buffets, Inc.
Buttrey Food & Drug Stores Co.
CS Wireless Systems, Inc.
Collins & Aikman Group Inc.
Crown Packaging Holdings Ltd.
*Cygnet Financial Corporation
DSC Communications Corporation
Darden Restaurants Inc.
Endesa S.A.
FPL Group, Inc.
Frontier Corporation
Fuji Heavy Industries, Ltd.
Grupo Financiero Inbursa, S.A. de C.V. (ADR)
Hanson PLC (ADR)
IMC Global Inc.
Imperial Tobacco Group PLC (ADR)
Inspec Group PLC
Istituto Bancario San Paulo di Torino S.p.A.
Istituto Mobiliare Italiano S.p.A. (Ordinary)
Ionica Group PLC
J. Sainsbury PLC
Karstadt AG
Koninklijke KNP N.V.
Mid-America Realty Investments
Repap Enterprises Inc.
Roche Holding AG
Rothmans Holdings, Ltd.
Royal Dutch Petroleum Co.
*Royal Dutch Petroleum Co. (ADR)
Semi-Tech Corporation (Class A)
Sotheby's Holdings, Inc. (Class A)
Stratus Computer, Inc.
Texaco Inc.
Waste Management International PLC (ADR)
*Weyerhaeuser Company
[FN]
*Added and deleted in the same quarter.
<TABLE>
IMPORTANT TAX INFORMATION
<CAPTION>
The following information summarizes all per share distributions
paid by Merrill Lynch Global Allocation Fund, Inc. during its
taxable year ended October 31, 1998:
Domestic Qualifying Interest From Domestic Non-Qualifying Total Long-Term
Record Date Payable Date Ordinary Income Federal Obligations Ordinary Income Ordinary Income Capital Gains
<S> <C> <C> <C> <C> <C> <C>
Class A Shares:
12/17/97 12/26/97 $0.054717 $0.069690 $0.635140 $0.759547 $0.936632
07/01/98 07/10/98 $0.050301 $0.062170 $0.251793 $0.364264 --
Class B Shares:
12/17/97 12/26/97 $0.048834 $0.062198 $0.566853 $0.677885 $0.936632
07/01/98 07/10/98 $0.039522 $0.048847 $0.197833 $0.286202 --
Class C Shares:
12/17/97 12/26/97 $0.049119 $0.062560 $0.570155 $0.681834 $0.936632
07/01/98 07/10/98 $0.039871 $0.049278 $0.199583 $0.288732 --
Class D Shares:
12/17/97 12/26/97 $0.053299 $0.067884 $0.618682 $0.739865 $0.936632
07/01/98 07/10/98 $0.047732 $0.058995 $0.238934 $0.345661 --
</TABLE>
The qualifying domestic ordinary income qualifies for the dividends
received deduction for corporations.
The law varies in each state as to whether and what percentage of
dividend income attributable to Federal obligations is exempt from
state income tax. We recommend that you consult your tax adviser to
determine if any portion of the dividends you received is exempt
from state income tax.
Listed at right are the percentages of total assets of the Fund
invested in Federal obligations as of the end of each quarter of the
fiscal year:
For the Percentage of
Quarter Ended Federal Obligations*
January 31, 1998 13.67%
April 30, 1998 15.82%
July 31, 1998 14.64%
October 31, 1998 11.14%
[FN]
*For the purposes of this calculation, Federal obligations include
US Treasury Notes, US Treasury Bills, and US Treasury Bonds. Also
included are obligations issued by the following agencies: Banks for
Cooperatives, Federal Intermediate Credit Banks, Federal Land Banks,
Federal Home Loan Banks, and the Student Loan Marketing Association.
Repurchase agreements are not included in this calculation.
Please retain this information for your records.
Merrill Lynch Global Allocation Fund, Inc., October 31, 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.
ARS Argentinean Peso
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
SEK Swedish Kroner
USD United States Dollar
<TABLE>
SCHEDULE OF INVESTMENTS (in US dollars)
<CAPTION>
Shares Value Percent of
COUNTRY Industries Held Common Stocks Cost (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C>
Argentina Banking 467,900 Banco Frances del Rio de
la Plata S.A. (ADR)++++ (USD) $ 11,254,989 $ 9,767,413 0.1%
2,433,900 Banco Rio de La Plata S.A.
(ADR)++++ (USD) 25,177,689 21,905,100 0.2
------------ ------------ ------
36,432,678 31,672,513 0.3
Oil--Related 480,000 Yacimientos Petroliferos
Fiscales S.A. (ADR)++++ (USD) 10,296,490 13,890,000 0.2
Total Common Stocks in Argentina 46,729,168 45,562,513 0.5
Australia Beverages 1,999,379 Foster's Brewing Group Limited 3,509,519 4,888,974 0.0
Building 718,547 Pioneer International Limited 1,814,681 1,484,305 0.0
Materials
Foods 5,566,000 Goodman Fielder Wattie Ltd. 5,875,419 7,317,668 0.1
Insurance 403,135 GIO Australia Holdings, Ltd. 947,502 1,276,728 0.0
6,423,849 HIH Winterthur International
Holdings Ltd. 10,503,236 9,033,037 0.1
8,764,000 HIH Winterthur International Holdings
Ltd. (Installment Receipts) (m) 8,334,519 7,361,497 0.1
------------ ------------ ------
19,785,257 17,671,262 0.2
Metals & 3,102,904 M.I.M. Holdings Ltd. 2,463,331 1,505,889 0.0
Mining 10,000,000 Normandy Mining Limited 8,030,489 8,897,460 0.1
22,040,927 Pasminco Limited 22,548,555 17,965,163 0.2
8,700,000 WMC Limited 29,191,616 29,387,937 0.3
------------ ------------ ------
62,233,991 57,756,449 0.6
Multi-Industry 1,581,317 Lend Lease Corporation Limited 26,521,531 34,728,557 0.4
2,300,000 Pacific Dunlop, Ltd. 5,753,464 4,121,453 0.0
------------ ------------ ------
32,274,995 38,850,010 0.4
Resources 9,133,404 Broken Hill Proprietary Co., Ltd. 99,981,934 77,286,134 0.8
Tobacco 802,300 WD & HO Wills Holdings, Ltd. 902,494 1,837,023 0.0
Total Common Stocks in Australia 226,378,290 207,091,825 2.1
Austria Banking 203,400 Bank Austria AG 6,298,337 11,069,150 0.1
Total Common Stocks in Austria 6,298,337 11,069,150 0.1
Brazil Telecommuni- 514,200 ++Telecomunicacoes Brasileiras
cations S.A.--Telebras (ADR)++++ (USD) 39,979,024 39,047,063 0.4
Total Common Stocks in Brazil 39,979,024 39,047,063 0.4
Canada Beverages 1,900,000 Cott Corp. (USD) 15,484,918 11,162,500 0.1
Metals-- 1,427,400 Inco Ltd. (USD) 29,691,234 15,255,338 0.1
Non-Ferrous
Telecommuni- 1,165,200 ++Rogers Cantel Mobile Communications
cations Inc. (Class B)(q) 22,391,633 12,049,638 0.1
1,260,900 ++Rogers Cantel Mobile Communications
Inc. (Class B) (USD)(q) 20,941,379 13,239,450 0.1
4,543,700 ++Rogers Communications Inc.
(Class B) 39,359,870 35,534,365 0.4
------------ ------------ ------
82,692,882 60,823,453 0.6
Telecommuni- 400,000 ++Newbridge Networks Corp. (USD) 8,026,190 8,200,000 0.1
cations &
Equipment
Total Common Stocks in Canada 135,895,224 95,441,291 0.9
Finland Metals 738,438 Outokumpu Oyj 10,823,686 6,675,063 0.1
Paper & Forest 964,985 Enso Oyj 8,072,452 7,476,789 0.1
Products 2,909,250 Metsa Serla Oyj 'B' 23,657,400 22,020,945 0.2
639,478 UPM-Kymmene Oyj 12,090,735 15,308,851 0.1
------------ ------------ ------
43,820,587 44,806,585 0.4
Total Common Stocks in Finland 54,644,273 51,481,648 0.5
France Automobiles 46,568 Peugeot S.A. 5,610,594 7,769,715 0.1
Banking 119,155 Banque Nationale de Paris S.A. 5,267,865 7,546,912 0.1
244,497 Compagnie Financiere de Paribas S.A. 13,080,831 17,972,026 0.2
276,386 Societe Generale de France S.A. 29,564,610 36,562,943 0.3
------------ ------------ ------
47,913,306 62,081,881 0.6
Electronics 75,299 ++STMicroelectronics N.V. 3,487,840 4,607,930 0.0
Energy & 289,329 Elf Aquitaine (Elf) S.A. 35,925,792 33,484,260 0.3
Petroleum
Industrial 61,000 Alcatel Alsthom Cie Generale
d'Electricite S.A. 7,236,780 6,796,076 0.1
244,500 Alcatel Alsthom Cie Generale
d'Electricite S.A.
(ADR)++++ (USD) 4,208,043 5,379,000 0.0
------------ ------------ ------
11,444,823 12,175,076 0.1
Insurance 147,915 AXA-UAP S.A. 9,471,187 16,718,974 0.2
277,598 ++CNP Assurances 7,729,298 9,438,132 0.1
------------ ------------ ------
17,200,485 26,157,106 0.3
Metals--Steel 1,477,394 Usinor-Sacilor S.A. 22,060,574 16,885,263 0.2
Multi-Industry 85,162 EuraFrance S.A. 30,279,790 43,240,101 0.4
Total Common Stocks in France 173,923,204 206,401,332 2.0
Germany Automotive 319,526 Volkswagen AG 17,663,095 24,036,850 0.2
Banking 108,616 Bayerische Vereinsbank AG 5,184,800 8,630,214 0.1
411,357 Deutsche Bank AG 34,026,271 25,601,070 0.3
132,450 Dresdner Bank AG 7,678,657 5,161,949 0.0
------------ ------------ ------
46,889,728 39,393,233 0.4
Capital Goods 369,636 ++Kloeckner-Werke AG 17,229,762 18,649,309 0.2
Chemicals 351,035 BASF AG 13,431,500 14,889,823 0.1
776,934 Bayer AG 29,992,002 31,593,751 0.3
101,451 Henkel KGaA 4,390,556 8,030,260 0.1
742,125 Hoechst AG 27,123,815 31,030,242 0.3
------------ ------------ ------
74,937,873 85,544,076 0.8
</TABLE>
Merrill Lynch Global Allocation Fund, Inc., October 31, 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>
Germany Electrical 419,796 Siemens AG $ 27,898,595 $ 25,263,856 0.3%
(con- Equipment
cluded)
Engineering & 32,565 Philipp Holzmann AG 12,268,030 3,305,692 0.0
Construction
Metals--Steel 172,193 Thyssen AG 37,040,112 31,005,144 0.3
Utilities 452,843 VEBA AG 30,191,107 25,309,956 0.3
Total Common Stocks in Germany 264,118,302 252,508,116 2.5
Hong Banking 900,737 HSBC Holdings PLC 14,386,653 20,641,768 0.2
Kong 899,577 HSBC Holdings PLC (GBP) 27,212,308 21,087,524 0.2
------------ ------------ ------
41,598,961 41,729,292 0.4
Multi-Industry 7,059,500 Hutchison Whampoa Ltd. 44,936,689 50,584,501 0.5
Total Common Stocks in Hong Kong 86,535,650 92,313,793 0.9
Hungary Oil & Gas 302,914 Mol Magyar Olay-es Gazipari
Producers Reszvenytarsasag (GDR)++++++ (USD) 8,160,139 6,891,294 0.1
Total Common Stocks in Hungary 8,160,139 6,891,294 0.1
Indonesia Paper & Pulp 3,384,800 ++Asia Pacific Resources
International Holdings Ltd.
(NY Registered Shares) (USD) 16,164,218 1,692,400 0.0
553,765 ++Asia Pulp & Paper Company
Ltd. (ADR)++++ (USD) 6,368,298 4,603,172 0.0
------------ ------------ ------
22,532,516 6,295,572 0.0
Tobacco 19,327,000 ++P.T. Hanjaya Mandala Sampoerna
(Foreign) 28,087,780 7,782,685 0.1
Total Common Stocks in Indonesia 50,620,296 14,078,257 0.1
Ireland Building & 631,423 CRH PLC (GBP) 6,857,511 9,198,116 0.1
Construction
Total Common Stocks in Ireland 6,857,511 9,198,116 0.1
Italy Multi-Industry 41,311,990 MontEdison S.p.A. 31,345,924 40,903,210 0.4
Telecommuni- 2,251,300 Telecom Italia Mobile S.p.A.--RISP 2,379,178 7,989,282 0.1
cations 11,749,314 Telecom Italia S.p.A.--RISP 37,250,046 59,277,629 0.6
------------ ------------ ------
39,629,224 67,266,911 0.7
Total Common Stocks in Italy 70,975,148 108,170,121 1.1
Japan Automobiles & 3,282,000 Suzuki Motor Corp. 30,510,247 37,791,190 0.4
Equipment
Beverages 1,570,000 Chukyo Coca-Cola Bottling Co., Ltd. 16,445,371 13,481,024 0.1
663,000 Hokkaido Coca-Cola Bottling Co., Ltd. 8,836,164 6,097,141 0.1
790,000 Kinki Coca-Cola Bottling Co., Ltd. 11,999,955 10,785,677 0.1
1,243,000 Mikuni Coca-Cola Bottling Co., Ltd. 17,391,669 20,065,602 0.2
1,426,400 Sanyo Coca-Cola Bottling Co., Ltd. 17,532,122 16,534,776 0.2
------------ ------------ ------
72,205,281 66,964,220 0.7
Capital Goods 12,900,000 Kawasaki Heavy Industries, Ltd. 35,297,925 28,245,750 0.3
7,875,000 Mitsubishi Heavy Industries, Inc. 44,268,610 30,428,903 0.3
------------ ------------ ------
79,566,535 58,674,653 0.6
Chemicals 34,000 Shin-Etsu Chemical Co., Ltd. 657,132 677,314 0.0
Consumer Products 50,000 Amway Japan Limited (Premium
Exchangeable Participating
Shares) (USD) 721,750 321,875 0.0
Electrical 1,124,000 Chudenko Corp. 30,032,358 25,817,448 0.2
Construction 1,386,000 Kinden Corporation 21,348,708 18,577,589 0.2
7,000 Taihei Dengyo Kaisha, Ltd. 131,860 21,638 0.0
------------ ------------ ------
51,512,926 44,416,675 0.4
Electrical 788,000 Murata Manufacturing Co., Ltd. 25,168,052 26,591,448 0.3
Equipment
Electronics 1,299,000 Hitachi Ltd. 9,381,584 6,614,348 0.1
Financial 9,387,000 Daiwa Securities Co., Ltd. 46,956,803 26,598,918 0.3
Services 928,000 Kokusai Securities Co., Ltd. 6,296,169 7,968,401 0.1
879,000 Nomura Securities Co., Ltd. 11,893,928 6,641,937 0.0
1,720,000 ++Wako Securities Co., Ltd. 4,377,152 2,185,815 0.0
------------ ------------ ------
69,524,052 43,395,071 0.4
Industrial 28,000 Miura Kogyo Co., Ltd. 466,635 399,107 0.0
12,300 Nitto Kohki Co., Ltd. 343,376 90,618 0.0
------------ ------------ ------
810,011 489,725 0.0
Insurance 743,000 Chiyoda Fire & Marine Insurance
Co., Ltd. 2,796,009 2,449,871 0.0
2,897,000 Dai-Tokyo Fire & Marine Insurance
Co., Ltd. 17,990,037 9,577,065 0.1
125,000 Dowa Fire & Marine Insurance
Co., Ltd. 441,340 372,445 0.0
3,743,000 Fuji Fire & Marine Insurance Co.,
Ltd. 13,980,452 7,135,033 0.1
4,865,000 Koa Fire & Marine Insurance
Co., Ltd. 24,748,402 14,620,900 0.2
765,000 Mitsui Marine & Fire Insurance
Co., Ltd. 5,730,161 3,803,323 0.0
3,508,000 Nichido Fire & Marine Insurance
Co., Ltd. 20,622,267 18,103,280 0.2
4,816,000 Nippon Fire & Marine Insurance
Co., Ltd. 20,479,413 16,830,775 0.2
999,000 Nisshin Fire & Marine Insurance
Co., Ltd. 2,688,731 2,564,838 0.0
7,315,000 Sumitomo Marine & Fire Insurance
Co., Ltd. 46,067,731 42,837,283 0.4
2,713,000 Tokio Marine & Fire Insurance
Co., Ltd. 28,580,732 30,866,607 0.3
5,000,000 Yasuda Fire & Marine Insurance
Co., Ltd. 25,976,040 24,643,654 0.2
------------ ------------ ------
210,101,315 173,805,074 1.7
Office 1,612,000 Canon, Inc. 23,455,745 30,520,866 0.3
Equipment
Packaging & 1,103,000 Toyo Seikan Kaisha, Ltd. 25,118,395 19,841,877 0.2
Containers
Pharmaceuticals 1,261,000 Sankyo Pharmaceuticals Co., Ltd. 28,124,373 28,476,988 0.3
384,000 Taisho Pharmaceuticals Co., Ltd. 7,984,458 10,287,481 0.1
------------ ------------ ------
36,108,831 38,764,469 0.4
Restaurants 647,000 Mos Food Services, Inc. 12,121,005 9,555,556 0.1
618,000 Ohsho Food Service Corp. 10,180,663 6,420,917 0.0
------------ ------------ ------
22,301,668 15,976,473 0.1
Retail Stores 460,000 Ito Yokado Co., Ltd. 21,319,319 26,859,007 0.3
100,000 Sangetsu Co., Ltd. 3,160,832 1,236,476 0.0
------------ ------------ ------
24,480,151 28,095,483 0.3
Total Common Stocks in Japan 681,623,675 592,940,761 5.9
</TABLE>
Merrill Lynch Global Allocation Fund, Inc., October 31, 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>
Mexico Foods 700,000 Grupo Industrial Maseca,
S.A. de C.V. (ADR)++++ (USD) $ 7,969,925 $ 8,662,500 0.1%
Multi-Industry 433,800 Grupo Carso, S.A. de C.V.
(ADR)++++ (USD) 3,832,850 2,980,206 0.0
Telecommuni- 433,800 Global Telecommunications Solutions,
cations Inc. (ADR)++++ (USD) 2,060,550 2,238,408 0.0
Total Common Stocks in Mexico 13,863,325 13,881,114 0.1
Nether- Chemicals 574,304 Akzo Nobel N.V. 17,876,528 22,328,748 0.2
lands 288,070 European Vinyls Corp.
International N.V. 11,384,340 2,684,313 0.0
------------ ------------ ------
29,260,868 25,013,061 0.2
Electronics 442,765 Philips Electronics N.V. 22,551,548 23,569,240 0.2
Distribution
Insurance 958,493 Internationale Nederlanden
Groep N.V. 15,908,091 46,402,703 0.5
Miscellaneous-- 10,000 Koninklijke Ten Cate N.V. 501,699 310,609 0.0
Manufacturing
Packaging 1,459,566 Buhrmann N.V. 30,706,655 26,185,113 0.3
Steel 161,800 Ispat International N.V. 4,382,262 1,143,769 0.0
799,183 Ispat International N.V.
(NY Registered Shares) (USD) 13,831,820 5,943,924 0.1
------------ ------------ ------
18,214,082 7,087,693 0.1
Transportation 111,846 Koninklijke Pakhoed N.V. 4,339,539 2,755,270 0.0
Total Common Stocks
in the Netherlands 121,482,482 131,323,689 1.3
New Financial 1,084,700 Brierley Investments Limited 688,875 246,877 0.0
Zealand Services
Natural Gas 1,477,104 Natural Gas Corporation
Suppliers Holdings Limited 1,043,960 1,438,569 0.0
Total Common Stocks in New Zealand 1,732,835 1,685,446 0.0
Norway Banking 4,785,400 Christiania Bank Og Kreditkasse 10,697,335 16,749,419 0.1
2,434,000 Den Norske Bank ASA 7,189,721 8,552,285 0.1
------------ ------------ ------
17,887,056 25,301,704 0.2
Computer 668,518 Merkantildata ASA 8,071,807 6,711,300 0.1
Software
Oil & Gas 781,330 Saga Petroleum ASA 11,845,630 9,857,783 0.1
Producers
Total Common Stocks in Norway 37,804,493 41,870,787 0.4
Philip- Banking 2,000,000 ++East-West Banking Corp. (p) 20,000,000 16,000,000 0.2
pines
Multi-Industry 6,335,520 Ayala Corporation 1,948,253 1,615,400 0.0
Total Common Stocks
in the Philippines 21,948,253 17,615,400 0.2
Portugal Banking 896,372 Banco Comercial Portugues, S.A.
(BCP) (Registered) 13,334,852 28,097,134 0.3
Banking-- 50 ++Banco Portugues do Atlantico, S.A. 1,244 1,003 0.0
International
Total Common Stocks in Portugal 13,336,096 28,098,137 0.3
Russia Telecommuni- 1,611,800 ++PLD Telekom Inc. (USD) 10,028,238 2,921,388 0.0
cations 149,000 PLD Telekom Inc. (Warrants) (a) (USD) 111,750 14,900 0.0
18,700 PLD Telekom Inc. (Warrants) (a) (USD) 30,855 2,338 0.0
Total Common Stocks in Russia 10,170,843 2,938,626 0.0
South Metals--Steel 716,660 Pohang Iron & Steel Co., Ltd. 28,695,627 40,052,485 0.4
Korea
Telecommuni- 2,893 SK Telecom Co., Ltd. 1,016,559 2,010,196 0.0
cations 1,006,587 SK Telecom Co., Ltd.
(ADR)++++ (USD) (p) 5,226,630 10,380,428 0.1
------------ ------------ ------
6,243,189 12,390,624 0.1
Utilities-- 200,000 Korea Electric Power Corporation 2,429,353 3,566,009 0.0
Electric
Total Common Stocks in South Korea 37,368,169 56,009,118 0.5
Spain Insurance 66,778 Mapfre S.A. 1,272,758 1,761,678 0.0
Total Common Stocks in Spain 1,272,758 1,761,678 0.0
Sweden Appliances 1,377,295 Electrolux AB 'B' Free 14,120,645 20,706,301 0.2
Automobiles & 43,916 Scania AB (Warrants) (a) 60,444 11,238 0.0
Equipment 391,430 Volvo AB 'B' Shares 12,386,419 8,439,014 0.1
------------ ------------ ------
12,446,863 8,450,252 0.1
Industrial 119,420 SKF AB 'A' 2,217,257 1,306,414 0.0
Insurance 1,022,258 Skandia Forsakring AB Free 7,716,720 13,014,314 0.1
Metals--Steel 1,227,828 Avesta Sheffield AB 10,687,487 3,440,482 0.1
Multi-Industry 192,784 Svedala Industri AB Free 2,531,671 3,033,987 0.0
Paper & Forest 411,853 Mo och Domsjo AB (Class B) 10,072,522 9,590,722 0.1
Products 885,017 Stora Kopparbergs Bergslags AB 9,945,034 9,738,403 0.1
------------ ------------ ------
20,017,556 19,329,125 0.2
Total Common Stocks in Sweden 69,738,199 69,280,875 0.7
Switzer- Banking 20,222 Banque Cantonale de Geneve 6,737,471 4,847,535 0.1
land 140,058 Credit Suisse Group (Registered) 15,881,235 21,579,667 0.2
------------ ------------ ------
22,618,706 26,427,202 0.3
Banking & 116,781 ++Union Bank of Switzerland 23,844,241 32,098,359 0.3
Financial
Electronic 69,850 Swatch Group AG (The) (Registered) 9,809,595 9,573,626 0.1
Components
Pharmaceuticals 8,212 Novartis AG (Registered) 12,794,237 14,824,859 0.1
Total Common Stocks in Switzerland 69,066,779 82,924,046 0.8
Thailand Holding 1,373,300 BEC World Public Co., Ltd. (Foreign) 8,876,272 8,379,711 0.1
Companies
Total Common Stocks in Thailand 8,876,272 8,379,711 0.1
United Banking 1,284,699 Barclays PLC 21,602,911 27,684,657 0.3
Kingdom 1,995,969 National Westminster Bank PLC 30,482,643 33,721,289 0.3
------------ ------------ ------
52,085,554 61,405,946 0.6
Building & 689,324 Jarvis PLC 8,184,444 7,271,486 0.1
Construction
Computers 403,350 Misys PLC 1,222,162 2,829,797 0.0
Food & 1,756,839 ++Allied Domecq PLC 12,616,881 16,179,082 0.1
Beverage 672,142 Bass PLC 9,822,359 8,159,401 0.1
------------ ------------ ------
22,439,240 24,338,483 0.2
Holding 8,595,618 BTR PLC 35,874,337 15,040,165 0.1
Companies
</TABLE>
Merrill Lynch Global Allocation Fund, Inc., October 31, 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 Insurance 1,393,942 ++Allied Zurich PLC $ 19,055,536 $ 16,664,878 0.2%
Kingdom 1,758,447 Royal & Sun Alliance
(concluded) Insurance Group PLC 17,511,089 16,105,560 0.1
------------ ------------ ------
36,566,625 32,770,438 0.3
Manufacturing-- 3,527,699 LucasVarity PLC 11,264,222 12,049,830 0.1
Automotive
Supplies
Metals & Mining 582,192 Rio Tinto PLC 8,435,065 7,067,462 0.1
Oil--Related 1,494,818 Shell Transport & Trading Co. PLC 8,845,970 9,079,354 0.1
Pharmaceuticals 716,673 SmithKline Beecham PLC 8,050,842 8,963,980 0.1
Retail--Food 1,610,493 Safeway PLC 9,038,358 8,089,828 0.1
Retail Stores 301,675 ++Signet Group PLC (ADR)++++ (USD) 461,861 4,713,672 0.1
Steel 3,909,076 British Steel PLC 9,053,760 6,708,991 0.1
Telecommuni- 568,677 Cable & Wireless PLC 4,292,301 6,379,692 0.1
cations
Total Common Stocks in the
United Kingdom 215,814,741 206,709,124 2.1
United Aerospace & 9,565 Raytheon Company (Class A) 307,416 535,640 0.0
States Defense
Apparel 700,000 ++Fruit of the Loom, Inc. (Class A) 18,572,062 10,675,000 0.1
Automobiles 150,000 General Motors Corp. 5,384,509 9,459,375 0.1
Banking 1,064,870 Banc One Corp. 18,939,028 52,045,521 0.5
259,000 Banknorth Group, Inc. 1,865,422 8,223,250 0.1
2,760,939 ++Golden State Bancorp Inc. 27,171,636 52,975,517 0.5
2,440,239 Golden State Bancorp Inc.
(Warrants) (a) 4,603,013 11,667,393 0.1
770,194 Golden State Bancorp Inc.
(Warrants) (a) -- 9,531,151 0.1
1,400,000 KeyCorp 20,571,401 42,437,500 0.5
865,800 Mellon Bank Corp. 17,209,198 52,056,225 0.5
265,900 Oriental Financial Group 3,509,880 8,508,800 0.1
1,520,000 Republic New York Corp. 33,998,213 63,555,000 0.6
------------ ------------ ------
127,867,791 301,000,357 3.0
Building 500,000 Chicago Bridge & Iron Company N.V.
Products (NY Registered Shares) (USD) 8,322,525 5,093,750 0.1
567,892 Flowserve Corporation 14,089,137 10,222,056 0.1
------------ ------------ ------
22,411,662 15,315,806 0.2
Business Data 300,000 ++Imation Corp. 5,102,179 5,306,250 0.1
Processing
Business 1,900,000 ++Information Resources, Inc. (q) 18,813,837 14,962,500 0.1
Data Systems
Chemicals 200,000 E.I. duPont de Nemours & Company 10,585,000 11,500,000 0.1
300,000 Geon Company (The) 5,955,557 6,506,250 0.1
------------ ------------ ------
16,540,557 18,006,250 0.2
Commercial 1,400,000 ++Cendant Corporation 23,126,242 16,012,500 0.2
Services
Computer 200,000 Electronic Data Systems Corp. 8,356,515 8,137,500 0.1
Services
Computer 337,500 ++Boole & Babbage, Inc. 1,329,492 8,985,938 0.1
Software 1,500,000 ++FileNET Corporation 6,763,616 13,687,500 0.2
2,400,000 ++Inprise Corporation 33,535,053 11,850,000 0.1
700,000 ++Oracle Corporation 13,629,360 20,693,750 0.2
------------ ------------ ------
55,257,521 55,217,188 0.6
Computers & 3,000,000 ++Iomega Corporation 17,321,233 16,125,000 0.2
Technology 1,012,300 ++Komag, Inc. 17,354,599 5,630,919 0.0
1,125,300 ++Silicon Graphics, Inc. 16,988,580 12,659,625 0.1
------------ ------------ ------
51,664,412 34,415,544 0.3
Construction & 200,000 ++Hovnanian Enterprises, Inc.
Housing (Class A) 1,750,602 1,700,000 0.0
Construction 500,000 TJ International, Inc. 8,846,801 9,750,000 0.1
Products
Consumer-- 90,770 ++Ascent Entertainment Group, Inc. 631,090 618,371 0.0
Miscellaneous
Containers 504,000 ++Stone Container Corporation 6,194,634 4,819,500 0.0
Electronics 500,000 ++3Com Corporation 14,968,750 18,031,250 0.2
2,300,000 ++Cabletron Systems, Inc. 34,233,860 26,162,500 0.3
2,101,000 ++Checkpoint Systems, Inc. (q) 23,069,827 24,949,375 0.2
1,250,000 ++MEMC Electronic Materials, Inc. 24,090,092 8,593,750 0.1
1,120,000 Millipore Corporation 30,875,193 27,580,000 0.3
850,000 Motorola, Inc. 46,443,770 44,200,000 0.4
1,800,000 ++Silicon Valley Group, Inc. 29,633,597 23,062,500 0.2
190,800 ++SpeedFam International, Inc. 1,828,550 3,052,800 0.0
500,000 Tektronix, Inc. 8,230,864 8,937,500 0.1
------------ ------------ ------
213,374,503 184,569,675 1.8
Energy & 1,079,400 Arch Coal, Inc. 28,887,320 19,226,813 0.2
Petroleum 46,400 Mitchell Energy Development
Corp. (Class A) 675,716 646,700 0.0
174,350 Mitchell Energy Development
Corp. (Class B) 2,755,451 2,451,797 0.0
50,000 Murphy Oil Corp. 1,688,446 2,065,625 0.0
1,500,000 Occidental Petroleum Corporation 28,058,743 29,812,500 0.3
15,000 ++Plains Resources, Inc. 85,955 255,000 0.0
1,402,978 ++Santa Fe Energy Resources, Inc. 7,579,573 11,399,196 0.1
1,000,000 ++TransTexas Gas Corp. 16,636,708 1,562,500 0.0
200,000 USX-Marathon Group 3,413,440 6,537,500 0.1
------------ ------------ ------
89,781,352 73,957,631 0.7
Finance 250,000 ++Friedman, Billings, Ramsey & Company 1,536,900 1,281,250 0.0
Financial 163,600 American Capital Strategies, Ltd. 2,454,000 2,147,250 0.0
Services 1,972,900 Anthracite Capital, Inc. (q) 29,662,250 11,344,175 0.1
------------ ------------ ------
32,116,250 13,491,425 0.1
Forest Products 394,200 Deltic Timber Corporation 11,221,223 9,608,625 0.1
Gaming 1,235,000 ++Scientific Games Holdings
Corp. (c)(q) 27,568,304 20,454,687 0.2
Healthcare 360,000 ++Advocat, Inc. (q) 3,422,500 2,025,000 0.0
Services 350,000 Baxter International, Inc. 6,993,156 20,978,125 0.2
2,004,700 ++Beverly Enterprises, Inc. 15,182,383 13,531,725 0.1
2,200,000 ++Humana, Inc. 34,843,605 41,662,500 0.4
137,577 ++LTC Healthcare Inc. 619,051 326,745 0.0
2,200,000 ++Oxford Health Plans, Inc. 46,828,521 25,987,500 0.3
500,000 ++PharMerica, Inc. 2,877,800 1,671,875 0.0
121,600 ++Sierra Health Services, Inc. 1,972,319 2,834,800 0.0
550,000 United HealthCare Corporation 17,673,163 23,959,375 0.3
------------ ------------ ------
130,412,498 132,977,645 1.3
</TABLE>
Merrill Lynch Global Allocation Fund, Inc., October 31, 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 Industrial 15,000 Bar Technologies Ltd.
States (Warrants) (a) (h) $ 838,256 $ 825,000 0.0%
(continued) 179,802 Cooper Industries, Inc. 6,534,892 7,933,763 0.1
------------ ------------ ------
7,373,148 8,758,763 0.1
Information 55,200 ++Billing Concepts Corp. 557,750 772,800 0.0
Processing
Insurance 2,498,000 AGCO Corporation 19,259,883 23,731,000 0.2
100,000 Aetna Inc. 9,042,500 7,462,500 0.1
260,000 American General Corp. 6,766,740 17,810,000 0.2
186,300 Horace Mann Educators, Inc. 2,143,166 5,332,837 0.0
1,947,500 ++Risk Capital Holdings Inc. (q) 34,313,406 38,950,000 0.4
------------ ------------ ------
71,525,695 93,286,337 0.9
Machinery 700,000 ++Weatherford International, Inc. 12,643,639 19,031,250 0.2
Metals & 155,000 Aluminum Company of America 8,643,584 12,283,750 0.1
Mining 1,400,000 Battle Mountain Gold Company 8,838,297 7,612,500 0.0
1,100,000 Commonwealth Industries Inc. 17,690,878 8,112,500 0.1
100,000 National Steel Corp. 905,000 643,750 0.0
850,000 Newmont Mining Corporation 31,553,907 18,062,500 0.2
400,000 Nucor Corporation 18,363,133 18,125,000 0.2
132,800 Reynolds Metals Co. 5,801,771 7,959,700 0.1
------------ ------------ ------
91,796,570 72,799,700 0.7
Metals-- 700,000 ++USEC Inc. 9,975,000 10,237,500 0.1
Non-Ferrous
Multi-Industry 90,000 Loews Corp. 3,984,675 8,454,375 0.1
Natural 210,519 Freeport-McMoRan Copper &
Resources Gold, Inc. (Class B) 3,665,657 2,592,015 0.0
Oil & Gas 820,700 ++Rowan Companies Inc. 11,527,737 11,951,444 0.1
Producers 600,000 ++Tom Brown, Inc. 10,596,357 8,625,000 0.1
300,000 Transocean Offshore Inc. 9,669,913 11,081,250 0.1
------------ ------------ ------
31,794,007 31,657,694 0.3
Oil Field 201,900 ++Veritas DGC Inc. 2,715,091 3,760,387 0.0
Equipment
Oil Services 200,000 Diamond Offshore Drilling Inc. 5,150,000 6,137,500 0.0
3,000,000 ++Input/Output, Inc. (q) 29,721,830 26,625,000 0.3
2,780,000 ++Noble Drilling Corp. 20,861,045 47,781,250 0.5
350,000 Schlumberger Limited 19,517,500 18,375,000 0.2
300,000 Tidewater Inc. 13,101,460 8,493,750 0.1
------------ ------------ ------
88,351,835 107,412,500 1.1
Paper 160,200 Boise Cascade Corporation 4,225,000 4,485,600 0.1
165,000 Fort James Corporation 3,091,744 6,651,562 0.1
240,000 Louisiana-Pacific Corp. 5,273,733 4,260,000 0.0
------------ ------------ ------
12,590,477 15,397,162 0.2
Pollution 2,000,000 ++Safety-Kleen Corp. 5,574,398 6,125,000 0.1
Control
Publishing 300,000 Reader's Digest Association,
Inc. (Class A) 7,030,450 6,525,000 0.1
Real Estate 2,574,465 ++Catellus Development Corp. 22,351,219 35,398,894 0.3
3,633,600 ++Security Capital Group Inc.
(Class B) 78,475,062 57,910,500 0.6
2,665,000 ++Security Capital U.S. Realty 23,840,431 22,919,000 0.2
700,000 United Dominion Realty Trust, Inc. 8,034,273 7,787,500 0.1
------------ ------------ ------
132,700,985 124,015,894 1.2
Real Estate 800,000 AMB Property Corporation 17,751,525 18,400,000 0.2
Investment 382,713 Apartment Investment & Management Co. 10,766,036 13,371,035 0.1
Trusts 100,000 CarrAmerica Realty Corporation 2,264,699 2,250,000 0.0
91,991 ++Horizon Group Properties, Inc. 551,946 321,968 0.0
3,042,500 Imperial Credit Commercial Mortgage
Investment Corp. (q) 42,303,825 25,290,781 0.3
2,642,500 Meditrust Corporation 58,030,948 42,940,625 0.4
63,400 National Health Investors, Inc. 1,621,138 1,787,087 0.0
54,400 Nationwide Health Properties, Inc. 1,104,453 1,254,600 0.0
2,039,825 Prime Retail, Inc. 21,446,145 19,760,805 0.2
400,000 Taubman Centers, Inc. 3,512,161 5,475,000 0.1
920,000 Walden Residential Properties,
Inc. (Warrants) (a) 1,125,068 920,000 0.0
365,000 Wilshire Real Estate Investment
Trust Inc. 5,840,000 1,072,187 0.0
------------ ------------ ------
166,317,944 132,844,088 1.3
Retail 206,500 ++Coinstar Inc. (h) 311,636 1,445,500 0.0
850,000 Heilig-Meyers Company 11,224,247 6,534,375 0.1
------------ ------------ ------
11,535,883 7,979,875 0.1
Retail-- 1,000,000 ++Ugly Duckling Corporation (q) 13,010,625 5,125,000 0.1
Automotive
Retail Stores 1,110,000 ++Filene's Basement Corp. (q) 10,092,619 2,081,250 0.0
300,000 J. Baker, Inc. 5,134,145 1,612,500 0.0
700,000 ++Toys 'R' Us, Inc. 15,851,134 13,693,750 0.2
------------ ------------ ------
31,077,898 17,387,500 0.2
Savings Banks 572,886 Sovereign Bancorp, Inc. 1,552,137 7,483,323 0.1
Semiconductors 3,235,500 ++Cypress Semiconductor Corporation 25,899,931 35,994,937 0.4
Telecommuni- 300,000 ++Allen Telecom Inc. 3,338,218 1,650,000 0.0
cations 8,143,458 ++CAI Wireless Systems, Inc. 1,560,093 244,304 0.0
1,375,800 ++CellNet Data Systems, Inc. 12,252,498 8,684,737 0.1
120,363 CellNet Data Systems, Inc.
(Warrants) (a) (h) 13,716,570 962,904 0.0
2,770,200 ++General Communication, Inc.
(Class A) (q) 18,631,175 8,310,600 0.1
2,500,000 ++Glenayre Technologies, Inc. 25,609,813 15,000,000 0.2
250,000 ++Leap Wireless International, Inc. 1,187,500 1,507,812 0.0
1,150,000 ++QUALCOMM, Inc. 58,163,532 63,825,000 0.6
47,000 United USN Inc. (Class A)
(Warrants) (a) (h) 5,840,131 352,500 0.0
14,113 United USN Inc. (Warrants)(a) (h) 1,084,937 49,395 0.0
1,173,000 ++Western Wireless Corporation 14,471,208 23,460,000 0.2
18,315 Wireless One, Inc. (Warrants) (a) 18,315 183 0.0
------------ ------------ ------
155,873,990 124,047,435 1.2
Textiles 2,600,000 ++Burlington Industries, Inc. 34,175,185 24,050,000 0.2
Tobacco 1,875,700 DIMON, Inc. 29,253,130 24,266,869 0.2
Transportation 314,700 ++Consolidated Freightways Corp. 4,786,052 3,402,694 0.0
418,500 J.B. Hunt Transport Services, Inc. 5,601,838 6,983,719 0.1
450,000 Union Pacific Corporation 19,534,654 21,431,250 0.2
------------ ------------ ------
29,922,544 31,817,663 0.3
</TABLE>
Merrill Lynch Global Allocation Fund, Inc., October 31, 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. $ 27,315,551 $ 38,437,500 0.4%
States Electric 47,570 ++BayCorp Holdings, Ltd. 2,549,753 214,065 0.0
(con- & Gas 301,000 Central and South West Corporation 5,993,939 8,371,562 0.1
cluded) 4,075,061 Citizens Utilities Company (Class B) 35,740,880 36,675,549 0.4
4,112,285 ++El Paso Electric Company (q) 21,589,496 35,982,494 0.3
1,690,000 Entergy Corporation 45,009,672 48,587,500 0.5
1,777,900 Houston Industries, Inc. 36,190,583 55,226,019 0.5
1,500,000 ++Niagara Mohawk Power Corp. 23,789,306 21,937,500 0.2
1,832,500 Potomac Electric Power Company 41,904,680 47,988,594 0.5
752,100 Texas Utilities Co. 24,177,575 32,904,375 0.3
698,800 Unicom Corporation 16,022,083 26,336,025 0.3
------------ ------------ ------
280,283,518 352,661,183 3.5
Total Common Stocks in the
United States 2,138,021,022 2,216,756,969 22.0
Venezuela Telecommuni- 400,000 Compania Anonima Nacional
cations Telefonos de Venezuela S.A.
(CANTV) (ADR)++++ (USD) 4,856,604 6,200,000 0.1
Total Common Stocks in Venezuela 4,856,604 6,200,000 0.1
Total Investments in
Common Stocks 4,618,091,112 4,617,630,000 45.8
Equity Closed-End Funds
Austria Financial 320,000 Austria Fund (USD) 2,642,431 3,180,000 0.1
Services
Total Equity Closed-End Funds
in Austria 2,642,431 3,180,000 0.1
Indonesia Financial 25,600 Jakarta Growth Fund (USD) 158,080 56,000 0.0
Services
Total Equity Closed-End Funds
in Indonesia 158,080 56,000 0.0
Ireland Financial 150,000 Irish Investment Fund, Inc. (USD) 1,086,041 2,681,250 0.0
Services
Total Equity Closed-End Funds
in Ireland 1,086,041 2,681,250 0.0
Italy Financial 150,000 Italy Fund (USD) 1,198,520 2,025,000 0.0
Services
Total Equity Closed-End Funds
in Italy 1,198,520 2,025,000 0.0
South Financial 125,000 ++Fidelity Advisor Korea Fund
Korea Services (The) (USD) 1,088,750 554,687 0.0
200,000 ++Korea Equity Fund (USD) 1,369,598 587,500 0.0
1,400,528 ++Korea Fund, Inc. (USD) 19,847,163 11,641,889 0.1
200,000 ++Korean Invesment Fund, Inc. (USD) 1,561,000 662,500 0.0
Total Equity Closed-End Funds
in South Korea 23,866,511 13,446,576 0.1
Total Investments in
Equity Closed-End Funds 28,951,583 21,388,826 0.2
Preferred Stocks
Australia Publishing 600,000 News Corporation Limited
(The) (ADR)++++ (USD) 10,451,056 14,512,500 0.1
Total Preferred Stocks in Australia 10,451,056 14,512,500 0.1
Germany Chemicals 138,305 Henkel KGaA 5,886,677 11,824,869 0.1
Machinery & 157,130 Jungheinrich AG 3,186,845 2,088,737 0.0
Equipment
Medical 31,335 Fresenius AG 6,199,809 5,377,124 0.1
Equipment
Multi-Industry 450,000 RWE AG 8,725,424 16,450,151 0.2
Total Preferred Stocks in Germany 23,998,755 35,740,881 0.4
Norway Financial 175,000 A/S Eksportfinans (8.70%) (USD) 4,377,500 4,921,875 0.0
Services
Total Preferred Stocks in Norway 4,377,500 4,921,875 0.0
Portugal Banking 181,400 BCP International Bank (8%
Convertible) (USD) 13,480,528 20,316,800 0.2
Total Preferred Stocks in Portugal 13,480,528 20,316,800 0.2
Spain Banking 225,000 Santander Overseas Bank
(8% Series D) (USD) 5,463,250 5,835,937 0.1
Total Preferred Stocks in Spain 5,463,250 5,835,937 0.1
United Banking 870,000 California Federal Bank (9.125%,
States Series A) 21,735,500 22,293,750 0.2
Cable 1,000,000 Diva Systems Corp. (Convertible,
Television Series C) (p) 8,410,000 4,000,000 0.0
1,000,000 Diva Systems Corp. (Convertible,
Series D) (h) 11,440,000 4,000,000 0.1
------------ ------------ ------
19,850,000 8,000,000 0.1
Natural 150,000 Cyprus Amax Minerals Co.
Resources (Convertible, Series A) 9,188,313 5,550,000 0.1
348,700 Freeport-McMoRan Copper & Gold, Inc.
(5% Convertible, Series A) 7,918,834 5,186,912 0.1
219,000 Freeport-McMoRan Inc. (3.50%
Convertible--Gold, Series B) 7,703,330 4,188,375 0.0
------------ ------------ ------
24,810,477 14,925,287 0.2
Publishing 198,500 Reader's Digest Association, Inc.
(8.25% Convertible, Class A) 4,652,344 4,540,687 0.1
Railroads 40,000 Union Pacific Capital Trust
(6.25% Convertible) 1,793,600 1,840,000 0.0
Real 476,800 Apartment Investment & Management
Estate Trusts Co. (9.375%, Series G) 11,751,900 10,608,800 0.1
Investment 298,746 Bradley Real Estate Inc.
Trusts (8.40% Convertible, Series A) 6,852,856 7,169,904 0.1
97,300 Carramerica Realty Corp.
(8.55%, Series C) 2,398,445 2,158,844 0.0
400,000 Crown American Realty Trust
(11%, Series A) 20,000,000 19,850,000 0.2
139,200 First Union Real Estate Investments
(8.40% Convertible, Series A) 3,480,000 3,271,200 0.0
350,000 National Health Investors, Inc.
(8.50% Convertible) 8,750,000 8,750,000 0.1
717,500 Prime Retail, Inc. (10.50%) 16,366,161 17,758,125 0.2
Walden Residential Properties, Inc.:
50,000 ++(9.16% Convertible, Series B) 1,418,750 1,250,000 0.0
1,078,000 (9.20% Convertible, Series S) 26,269,636 24,255,000 0.2
------------ ------------ ------
97,287,748 95,071,873 0.9
Utilities 77,600 Citizens Utilities Company
(5% Convertible) 3,398,931 3,428,950 0.0
Total Preferred Stocks
in the United States 173,528,600 150,100,547 1.5
Total Investments in
Preferred Stocks 231,299,689 231,428,540 2.3
</TABLE>
Merrill Lynch Global Allocation Fund, Inc., October 31, 1998
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Currency Face Value Percent of
COUNTRY Industries Denomination Amount Fixed-Income Securities Cost (Note 1a) Net Assets
<S> <S> <S> <C> <S> <C> <C> <C>
Argentina Banking USD 45,000,000 Banco Rio de la Plata
S.A., 8.75% due 12/15/2003 $ 36,900,950 $ 40,387,500 0.4%
Food/Dairy USD 23,500,000 Mastellone Hermanos S.A.,
Products 11.75% due 4/01/2008 23,687,500 14,100,000 0.2
Government City of Buenos Aires:
Obligations ARS 36,550,000 10.50% due 5/28/2004 31,996,453 23,765,818 0.3
USD 14,229,000 11.25% due 4/11/2007
(Regulation S) 13,888,779 12,094,650 0.1
USD 38,000,000 11.25% due 4/11/2007 (h) 37,715,000 32,300,000 0.3
Republic of Argentina:
USD 113,411,000 Floating Rate Brady Bonds,
Series L, 6.625% due
3/31/2005 (d) (o) 83,086,788 94,060,248 0.9
USD 80,000,000 Floating Rate Discount Brady
Notes, 6.437% due
3/31/2023 (o) 55,033,285 52,800,000 0.5
USD 85,000,000 Global Bonds, 11.375% due
1/30/2017 82,988,125 81,653,125 0.8
USD 194,850,000 Global Bonds, 9.75% due
9/19/2027 149,230,980 168,179,906 1.7
USD 30,000,000 Par 'L' Bonds, 5.75% due
3/31/2023 (o) 18,767,947 20,925,000 0.2
------------ ------------ ------
472,707,357 485,778,747 4.8
Total Fixed-Income Securities
in Argentina 533,295,807 540,266,247 5.4
Brazil Banking Banco Nacional de Desenvolvimiento
Economico e Social:
USD 7,500,000 9% due 9/24/2007 6,675,000 4,875,000 0.0
USD 66,950,000 10.80% due 6/16/2008 42,830,500 45,526,000 0.5
------------ ------------ ------
49,505,500 50,401,000 0.5
Government USD 35,000,000 Brazil Exit Bonds, 6% due
Obligations 9/15/2013 (o) 20,127,690 22,750,000 0.2
USD 10,000,000 Republic of Brazil, Par 'L' Bonds,
5.50% due 4/15/2024 (o) 6,100,000 6,125,000 0.1
------------ ------------ ------
26,227,690 28,875,000 0.3
Industrial USD 9,500,000 Companhia Vale Do Rio Doce,
10% due 4/02/2004 8,265,000 7,980,000 0.1
Globo Comunicacoes e
Partcipacoes S.A.:
USD 11,000,000 10.625% due 6/21/2004 10,596,250 10,532,500 0.1
USD 13,000,000 10.625% due 12/05/2008 (h) 12,954,500 6,890,000 0.0
------------ ------------ ------
31,815,750 25,402,500 0.2
Metals USD 30,000,000 CSN Iron Panama S.A., 9.125%
due 6/01/2007 28,000,000 16,800,000 0.2
Utilities USD 32,250,000 Espirito Santo--Escelsa, 10%
due 7/15/2007 (h) 31,726,875 18,221,250 0.2
Total Fixed-Income Securities
in Brazil 167,275,815 139,699,750 1.4
Canada Cable/ CAD 7,545,000 Rogers Cablesystem Inc., 9.65%
Telecom- due 1/15/2014 4,397,424 4,340,130 0.1
munications CAD 5,000,000 Rogers Communications Inc.,
Convertible Bonds, 7.50% due
9/01/1999 3,394,000 3,183,170 0.0
------------ ------------ ------
7,791,424 7,523,300 0.1
Industrial USD 28,000,000 Ainsworth Lumber Company, 12.50%
--Services due 7/15/2007+++ 27,281,230 24,780,000 0.2
Paper & CAD 2,000,000 MacMillan Bloedel Limited,
Forest Convertible Bonds, 5%
Products due 5/01/2007 1,024,416 1,047,053 0.0
Real CAD 16,501,370 First Place Tower, Inc.,
Estate Convertible Bonds, 10.78%
due 12/15/2015 (e) 26,573,774 27,196,544 0.3
Total Fixed-Income Securities
in Canada 62,670,844 60,546,897 0.6
Cayman Multi- USD 50,000,000 Beta Finance Inc., 0.20%
Islands Industry due 5/27/2000 (h) 51,191,648 52,550,000 0.5
Total Fixed-Income Securities
in the Cayman Islands 51,191,648 52,550,000 0.5
Chile Utilities-- Empresa Electricidad del Norte:
Electric USD 28,500,000 10.50% due 6/15/2005 (h) 28,625,000 20,520,000 0.2
USD 9,000,000 10.50% due 6/15/2005
(Regulation S) 6,941,250 6,480,000 0.1
Total Fixed-Income Securities
in Chile 35,566,250 27,000,000 0.3
China Multi- USD 16,450,000 Guangdong Investment Finance Inc.,
Industry Convertible Bonds, 1% due
7/07/2002 15,952,406 8,225,000 0.1
USD 19,050,000 Shanghai Industrial Investment
Treasury Co., Convertible Bonds,
1% due 2/24/2003 13,356,692 14,430,375 0.1
USD 4,450,000 Shanghai Investment Holding Co.,
Convertible Bonds, 1% due
6/12/2002 4,103,654 3,404,250 0.1
------------ ------------ ------
33,412,752 26,059,625 0.3
Utilities USD 56,500,000 Huaneng Power International PLC,
--Electric Convertible Bonds, 1.75% due
5/21/2004 47,097,369 50,002,500 0.5
Total Fixed-Income Securities
in China 80,510,121 76,062,125 0.8
France Banking ECU 2,000,000 Credit Local de France, 0% due
10/16/2001 (b) 2,131,443 2,096,820 0.0
Insurance FRF 127,059 Finaxa, Convertible Bonds, 3%
due 1/01/2007 16,464,581 17,831,939 0.2
Real Estate FRF 184,000,000 Societe Fonciere Lyonnaise
S.A., Convertible Bonds,
4% due 10/31/2004 31,570,373 39,533,837 0.4
Total Fixed-Income Securities
in France 50,166,397 59,462,596 0.6
Germany Banking DEM 2,310,000 Commerzbank AG, Floating Rate
Convertible Bonds,
0% due 12/31/2000 (b) 1,556,456 3,154,441 0.0
Electrical USD 1,000,000 Siemens AG, 8% due 6/24/2002 1,027,467 1,087,500 0.0
Equipment
Financial USD 5,875,000 Veba International Finance (with
Services Warrants), 6% due 4/06/2000 (a) 2,965,841 5,919,062 0.1
Total Fixed-Income Securities
in Germany 5,549,764 10,161,003 0.1
Hong Multi- USD 17,250,000 First Pacific Capital Ltd., Convertible
Kong Industry Bonds, 2% due 3/27/2002 16,927,221 13,455,000 0.1
USD 16,000,000 Hutchinson Delta Finance, Convertible
Bonds, 7% due 11/08/2001 16,640,000 16,320,000 0.2
Hutchison Whampoa Ltd.:
USD 49,250,000 7.45% due 8/01/2017 41,025,000 38,415,000 0.4
USD 24,400,000 7.50% due 8/01/2027 19,671,062 18,605,000 0.2
------------ ------------ ------
94,263,283 86,795,000 0.9
Utilities-- USD 26,250,000 Cathay International Ltd., 13%
Infra- due 4/15/2008 (h) 26,118,750 10,500,000 0.1
structure
Total Fixed-Income Securities
in Hong Kong 120,382,033 97,295,000 1.0
Indonesia Paper & USD 35,000,000 APP Global Finance (V) Ltd.,
Forest Convertible Bonds, 2% due
Products 7/25/2000 (h) 35,406,500 22,225,000 0.2
USD 7,650,000 APP International Finance
VII (Mauritius), Convertible
Bonds, 3.50% due 4/30/2003 6,196,500 4,245,750 0.1
USD 3,965,000 PT Indah Kiat Pulp & Paper,
8.875% due 11/01/2000 (h) 3,300,862 2,359,175 0.0
Total Fixed-Income Securities
in Indonesia 44,903,862 28,829,925 0.3
</TABLE>
Merrill Lynch Global Allocation Fund, Inc., October 31, 1998
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Currency Face Value Percent of
COUNTRY Industries Denomination Amount Fixed-Income Securities Cost (Note 1a) Net Assets
<S> <S> <S> <C> <S> <C> <C> <C>
Japan Banking JPY 1,990,000,000 AB International (Cayman)
Trust, Convertible Preference
Shares, 0.50% due 8/01/2007 $ 11,572,219 $ 13,029,152 0.1%
JPY 8,991,000,000 Fuji International Finance
Trust, Convertible Preference
Shares, 0.25% due 2/01/2002 57,009,671 25,476,816 0.3
USD 23,250,000 MBL International Finance
(Bermuda), Convertible
Bonds, 3% due 11/30/2002 22,298,437 20,983,125 0.2
JPY 5,410,000,000 Sumitomo Bank International
Finance NV, Convertible Bonds,
0.75% due 5/31/2001 44,571,881 43,898,763 0.4
------------ ------------ ------
135,452,208 103,387,856 1.0
Beverages JPY 1,268,000,000 Kinki Coca-Cola Bottling Co.,
Ltd., 0.85% due 12/30/2003 11,282,608 11,432,251 0.1
JPY 1,706,000,000 Sanyo Coca-Cola Bottling Inc.,
#1 Convertible Bonds,
0.90% due 6/30/2003 15,053,901 14,209,342 0.1
JPY 552,000,000 Shikoku Coca-Cola Bottling Co., Ltd.,
#1 Convertible Bonds, 2.40%
due 3/29/2002 5,152,497 4,858,320 0.1
------------ ------------ ------
31,489,006 30,499,913 0.3
Chemicals Shin-Etsu Chemical Co., Ltd.,
Convertible Bonds:
JPY 148,000,000 #5, 1.30% due 3/31/1999 1,577,446 1,680,027 0.0
JPY 301,000,000 #6, 0.40% due 9/30/2005 2,987,802 3,204,877 0.0
USD 4,700,000 Shin-Etsu Chemical Co., Ltd.
(with Warrants), 3.375%
due 8/08/2000 (a) 3,274,060 4,482,625 0.1
------------ ------------ ------
7,839,308 9,367,529 0.1
Electrical JPY 1,339,000,000 Matsushita Electric Works, Ltd.,
Equipment #9 Convertible Bonds, 1% due
11/30/2005 13,252,580 11,842,435 0.1
Electronics JPY 650,000,000 Matsushita Electric Industrial
Co., Ltd., #5 Convertible Bonds,
1.30% due 3/29/2002 6,133,347 6,418,513 0.1
Industrial JPY 1,492,000,000 Fuji Heavy Industries, Ltd., #4
Convertible Bonds, 0.90%
due 9/30/2003 13,672,391 14,668,899 0.2
Insurance JPY 456,000,000 Mitsui Marine & Fire Insurance
Co., Ltd., #3 Convertible Bonds,
0.70% due 3/31/2003 3,786,983 3,856,775 0.0
JPY 117,000,000 Nichido Fire & Marine Insurance
Co., Ltd., #5 Convertible Bonds,
1% due 3/31/2003 1,109,381 991,577 0.0
Nisshin Fire & Marine Insurance
Co., Ltd., Convertible Bonds:
JPY 900,000,000 #1, 0.65% due 3/31/2004 7,132,646 6,939,722 0.1
JPY 1,626,000,000 #2, 0.75% due 3/31/2006 12,682,239 11,448,738 0.1
Sumitomo Marine & Fire Insurance
Co., Ltd., Convertible Bonds:
JPY 300,000,000 #3, 1.10% due 3/29/2002 2,522,005 2,717,671 0.0
JPY 1,527,000,000 #4, 1.20% due 3/31/2004 13,104,977 14,029,624 0.1
JPY 588,000,000 Yasuda Fire & Marine Insurance Co.,
Ltd., #3 Convertible Bonds, 0.60%
due 3/30/2001 4,903,719 4,983,308 0.1
------------ ------------ ------
45,241,950 44,967,415 0.4
Total Fixed-Income Securities
in Japan 253,080,790 221,152,560 2.2
Malaysia Oil-- Petroliam Nasional BHD:
Related USD 35,950,000 7.125% due 8/15/2005 (h) 23,632,125 26,243,500 0.3
USD 12,100,000 7.125% due 10/18/2006 7,662,500 8,591,000 0.1
USD 63,125,000 7.75% due 8/15/2015 (h) 32,826,875 39,768,750 0.4
USD 105,364,000 7.625% due 10/15/2026 67,763,344 65,325,680 0.6
------------ ------------ ------
131,884,844 139,928,930 1.4
Telecommuni- Telekom Malaysia BHD:
cations USD 61,825,000 7.875% due 8/01/2025
(Regulation S) 42,609,110 37,713,250 0.4
USD 3,000,000 Convertible Bonds, 4% due
10/03/2004 (h) 2,523,750 1,725,000 0.0
USD 62,350,000 Convertible Bonds, 4% due
10/03/2004 (Regulation S) 52,446,837 35,851,250 0.4
USD 5,250,000 Convertible Bonds, 7.875%
due 8/01/2025 (h) 4,213,125 3,202,500 0.0
------------ ------------ ------
101,792,822 78,492,000 0.8
Total Fixed-Income Securities
in Malaysia 233,677,666 218,420,930 2.2
Mexico Government United Mexican States, Global Bonds:
Obligations USD 9,000,000 11.375% due 9/15/2016 7,976,250 8,893,125 0.1
USD 14,350,000 11.50% due 5/15/2026 11,896,781 14,771,531 0.2
------------ ------------ ------
19,873,031 23,664,656 0.3
Oil-- Petroleos Mexicanos:
Related USD 61,500,000 9.25% due 3/30/2018
(Regulation S) 54,948,750 50,430,000 0.5
USD 45,150,000 8.625% due 12/01/2023 (p) 25,007,000 33,072,375 0.3
------------ ------------ ------
79,955,750 83,502,375 0.8
Total Fixed-Income Securities
in Mexico 99,828,781 107,167,031 1.1
New Government NZD 25,000,000 New Zealand Index Linked Notes,
Zealand Obligations 4.50% due 2/15/2016 14,057,411 13,659,879 0.1
Total Fixed-Income Securities
in New Zealand 14,057,411 13,659,879 0.1
Philip- Banking USD 31,000,000 ING Bank N.V.(London), 0%
pines due 2/12/1999 (b) (p) 31,000,000 31,106,665 0.3
Multi- AC International Finance,
Industry Convertible Bonds:
USD 26,750,000 0% due 12/08/2000 (b) 21,711,377 21,400,000 0.2
USD 13,300,000 0.50% due 7/30/2002 12,562,276 12,901,000 0.1
------------ ------------ ------
34,273,653 34,301,000 0.3
Total Fixed-Income Securities
in the Philippines 65,273,653 65,407,665 0.6
Russia Government USD 57,400,000 City of St. Petersburg, 9.50%
Obligations due 6/18/2002 21,442,562 10,619,000 0.1
Russian Federation Bonds (r):
USD 13,800,000 9.25% due 11/27/2001
(Regulation S) 7,349,645 4,002,000 0.1
USD 116,300,000 8.75% due 7/24/2005 (h) 26,038,253 22,678,500 0.2
USD 142,750,000 12.75% due 6/24/2028 (h) 131,353,237 33,546,250 0.3
USD 31,900,000 12.75% due 6/24/2028
(Regulation S) 16,836,300 7,496,500 0.1
------------ ------------ ------
203,019,997 78,342,250 0.8
Oil & Gas USD 13,250,000 Lukinter Finance, Convertible Bonds,
Producers 3.50% due 5/06/2002 11,219,479 4,372,500 0.0
Telecommuni- PLD Telekom Inc. (h) (j):
cations USD 18,700,000 9% due 6/01/2006 18,756,250 10,086,312 0.1
USD 74,500,000 Convertible Bonds, 0/14%
due 6/01/2004 (b) 73,652,608 40,975,000 0.4
------------ ------------ ------
92,408,858 51,061,312 0.5
Utilities USD 45,850,000 Mosenergo Finance BV, 8.375%
due 10/09/2002 25,802,612 8,253,000 0.1
Total Fixed-Income Securities
in Russia 332,450,946 142,029,062 1.4
</TABLE>
Merrill Lynch Global Allocation Fund, Inc., October 31, 1998
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Currency Face Value Percent of
COUNTRY Industries Denomination Amount Fixed-Income Securities Cost (Note 1a) Net Assets
<S> <S> <S> <C> <S> <C> <C> <C>
Singapore Multi- USD 11,290,000 Far East Livingston Shipyards,
Industry Convertible Bonds, 1.50% due
5/02/2001 $ 9,273,312 $ 9,370,700 0.1%
Keppel Corporation Limited,
Redeemable Cumulative
Convertible Preference Shares:
USD 48,500,000 2% due 8/12/2002 (h) 48,492,500 45,105,000 0.4
USD 7,500,000 2% due 8/12/2002 (Regulation S) 7,045,381 6,975,000 0.1
------------ ------------ ------
64,811,193 61,450,700 0.6
Tele- USD 43,500,000 Fullerton Global Corp.,
communi- Convertible Bonds, 0% due
cations 4/02/2003 (b) 40,487,885 40,672,500 0.4
Total Fixed-Income Securities
in Singapore 105,299,078 102,123,200 1.0
South Insurance USD 36,300,000 LibLife International,
Africa Convertible Bonds, 6.50% due
9/30/2004 37,208,125 33,214,500 0.3
Total Fixed-Income Securities
in South Africa 37,208,125 33,214,500 0.3
South Banking Export Import Bank Korea:
Korea USD 4,000,000 6.50% due 2/10/2002 2,780,000 3,200,000 0.0
USD 21,000,000 Series D, 6.50% due 11/15/2006 16,459,400 16,590,000 0.2
Koram Bank Ltd., Convertible Bonds:
USD 1,500,000 0.25% due 8/26/2007 (h) 1,447,500 1,020,000 0.0
USD 5,750,000 0.25% due 8/26/2007 (Regulation S) 5,291,426 3,910,000 0.0
Korea Development Bank:
USD 7,500,000 7.125% due 9/17/2001 6,374,100 6,657,900 0.1
USD 10,000,000 6.625% due 11/21/2003 8,047,500 8,053,900 0.1
------------ ------------ ------
40,399,926 39,431,800 0.4
Electronics Samsung Electronics Co.,
Convertible Bonds:
USD 15,650,000 0.25% due 12/31/2006
(Regulation S) 12,419,750 13,772,000 0.1
USD 1,500,000 0% due 12/31/2007 (b)(h) 1,548,018 1,155,000 0.0
USD 36,600,000 0% due 12/31/2007
(Regulation S)(b) 33,774,532 28,182,000 0.3
------------ ------------ ------
47,742,300 43,109,000 0.4
Energy Ssangyong Oil Refining Co., Ltd.,
Related Convertible Bonds:
USD 9,755,000 3% due 12/31/2004 7,206,837 4,389,750 0.1
USD 16,535,000 3.75% due 12/31/2008 17,448,950 14,137,425 0.1
------------ ------------ ------
24,655,787 18,527,175 0.2
Government USD 74,900,000 Republic of Korea, 8.875% due
Obligations 4/15/2008 58,739,018 69,257,783 0.7
Machinery & CHF 10,000,000 Medison Co., Convertible Bonds,
Equipment 0.25% due 3/06/2002 6,433,041 7,398,639 0.1
Metals-- Pohang Iron & Steel
Steel Industries Co., Ltd.:
USD 6,485,000 7.375% due 5/15/2005 4,474,650 4,928,600 0.1
USD 5,000,000 7.125% due 11/01/2006 3,800,000 3,750,000 0.0
------------ ------------ ------
8,274,650 8,678,600 0.1
Multi- CHF 5,250,000 Daewoo Corporation, Convertible
Industry Bonds, 0.125% due 12/31/2001 3,642,719 2,952,057 0.0
Tele- USD 3,350,000 Korea Telecom, 7.50% due 6/01/2006 2,202,625 2,457,995 0.0
communi- SK Telekom Co. Ltd.:
cations USD 40,000,000 7.75% due 4/29/2004 31,591,662 31,900,000 0.3
USD 16,000,000 7.625% due 4/15/2007 13,080,000 12,160,000 0.2
------------ ------------ ------
46,874,287 46,517,995 0.5
Utilities-- Korea Electric Power Corp.,
Electric Global Bonds:
USD 7,000,000 10% due 4/01/2001 6,632,500 6,545,000 0.1
USD 5,650,000 10% due 4/01/2001 (h) 5,650,000 5,367,500 0.1
USD 4,900,000 8% due 7/01/2002 4,001,830 4,216,205 0.0
USD 11,200,000 7% due 10/01/2002 8,417,040 9,324,000 0.1
USD 45,000,000 6.375% due 12/01/2003 34,280,000 35,775,000 0.4
USD 5,000,000 6% due 12/01/2026 3,786,500 4,206,250 0.0
USD 40,750,000 Convertible Bonds, 5% due
8/01/2001 38,392,275 35,452,500 0.3
------------ ------------ ------
101,160,145 100,886,455 1.0
Total Fixed-Income Securities
in South Korea 337,921,873 336,759,504 3.4
Thailand Metals-- USD 44,000,000 NSM Steel Inc., 12% due
Steel 2/01/2006 (h) 40,058,895 11,000,000 0.1
Total Fixed-Income Securities
in Thailand 40,058,895 11,000,000 0.1
Turkey Tele- USD 37,000,000 Cellco Finance N.V., 15%
communi- due 8/01/2005 (h) 37,000,000 29,600,000 0.3
cations
Total Fixed-Income Securities
in Turkey 37,000,000 29,600,000 0.3
United Cable/ USD 14,000,000 Comcast UK Cable Partners Ltd.,
Kingdom Telecom- 0/11.20% due 11/15/2007 (b) 10,568,881 11,130,000 0.1
munications
Financial GBP 11,600,000 Liberty International
Services Holdings PLC, Convertible
Bonds, 5.50% due 4/30/2009 14,179,895 19,423,040 0.2
Tele- USD 43,750,000 International Cabletel, Inc.,
communi- Series B, 0/11.50%
cations due 2/01/2006 (b) 34,279,584 33,250,000 0.4
USD 20,250,000 Millicom International Cellular
S.A., 0/13.50% due 6/01/2006 (b) 14,382,583 11,947,500 0.1
USD 27,750,000 NTL Inc., 0/10.75% due
4/01/2008 (b) (h) 26,128,419 22,999,977 0.2
------------ ------------ ------
74,790,586 68,197,477 0.7
Textiles GBP 2,500,000 Coats Viyella PLC, Convertible
Bonds, Series B, 6.25%
due 8/09/2003 3,535,704 3,139,500 0.0
Total Fixed-Income Securities
in the United Kingdom 103,075,066 101,890,017 1.0
United Agri- USD 12,000,000 Sun World International, Inc.,
States cultural 11.25% due 4/15/2004 (h) 12,000,000 12,330,000 0.1
Airlines USD 15,000,000 Trans World Airlines, 11.375%
due 3/01/2006 15,000,000 11,100,000 0.1
Banking USD 14,250,000 Ocwen Federal Bank, 12% due
6/15/2005 (h) 14,250,000 11,827,500 0.1
Bio- USD 7,200,000 Cetus Corporation (Euro),
technology Convertible Bonds, 5.25%
due 5/21/2002 5,220,250 6,957,000 0.1
Chemicals USD 9,000,000 Philipp Brothers Chemicals
Inc., 9.875% due
6/01/2008 (h) 9,000,000 8,370,000 0.1
</TABLE>
Merrill Lynch Global Allocation Fund, Inc., October 31, 1998
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Currency Face Value Percent of
COUNTRY Industries Denomination Amount Fixed-Income Securities Cost (Note 1a) Net Assets
<S> <S> <S> <C> <S> <C> <C> <C>
United Financial USD 4,500,000 Hawthorne Financial Corp.,
States Services 12.50% due 12/31/2004 $ 4,500,000 $ 4,410,000 0.0%
(continued)
Food & USD 15,000,000 Tom's Food Inc., 10.50% due
Beverage 11/01/2004 15,000,000 13,350,000 0.1
Healthcare USD 17,450,000 American Retirement Corp.,
Convertible Bonds, 5.75%
due 10/01/2002 17,174,000 14,483,500 0.2
Healthcare USD 7,000,000 Oxford Health Plans, Inc.,
Services 11% due 5/15/2005 (h) 7,000,000 6,090,000 0.1
Home- USD 20,000,000 Beazer Homes USA, Inc., 9%
building & due 3/01/2004 18,097,000 19,000,000 0.2
Construction
Industrial USD 8,000,000 Bar Technologies Ltd., 13.50%
due 4/01/2001 7,412,450 8,560,000 0.1
USD 25,000,000 CTI Holdings S.A., 0/11.50%
due 4/15/2008 (b) (h) 15,002,838 10,000,000 0.1
USD 13,700,000 Camargo Correa, 8.75% due 7/22/2005 11,841,750 8,631,000 0.1
------------ ------------ ------
34,257,038 27,191,000 0.3
Metals-- USD 2,442,500 Rouge/Worthington Industries, Inc.
Steel (Convertible, Series DECS) 38,015,300 21,982,500 0.2
Oil-- USD 10,000,000 PDV America, Inc., 7.75% due
Related 8/01/2000 10,062,500 9,400,000 0.1
Real USD 51,000,000 Security Capital U.S. Realty,
Estate Convertible Bonds, 2%
due 5/22/2003 (h) 41,545,995 37,260,600 0.4
Real USD 25,500,000 Alexander Haagen Properties,
Estate Inc., Exchangeable Debentures,
Investment 7.25% due 12/27/2003 (h) 25,291,250 24,384,375 0.2
Trusts USD 6,500,000 Centerpoint Properties Corp.,
Convertible Bonds,
8.22% due 1/15/2004 6,500,000 12,650,625 0.1
USD 25,000,000 First Washington Realty,
Exchangeable Debentures,
8.25% due 6/27/1999 (p) 25,000,000 29,000,000 0.3
Health & Retirement Properties Trust,
Convertible Bonds:
USD 40,000,000 7.25% due 10/01/2001 40,000,000 38,150,000 0.4
USD 15,000,000 7.50% due 10/01/2003 15,000,000 14,100,000 0.1
USD 4,500,000 Healthcare Realty Trust,
Convertible Bonds, 6.55%
due 3/14/2002 4,185,063 4,095,000 0.0
LTC Properties, Inc., Convertible
Bonds:
USD 10,000,000 8.25% due 1/01/1999 10,000,000 10,775,000 0.1
USD 8,000,000 8.50% due 1/01/2001 8,000,000 8,610,000 0.1
USD 3,700,000 8.25% due 7/01/2001 3,644,500 3,607,500 0.0
USD 25,000,000 Leperq Corporate Income Fund,
Exchangeable Secured Notes, 8%
due 3/17/2004 (h) 25,000,000 24,453,125 0.2
USD 12,500,000 Liberty Realty Properties, 8.40%
due 7/01/2001 12,500,000 14,203,125 0.1
USD 27,000,000 Malan Realty Investors, Inc.,
Convertible Bonds,
8.50% due 7/15/2003 (h) 27,000,000 26,932,500 0.3
USD 9,415,000 Meditrust, Convertible Bonds,
8.54% due 7/01/2000 9,602,637 9,367,925 0.1
USD 5,000,000 Mid-Atlantic Realty Trust,
Convertible Bonds,
7.625% due 9/15/2003 4,875,000 5,950,000 0.1
USD 22,000,000 National Health Investors, Inc.,
Convertible Bonds,
7.75% due 1/01/2001 22,000,000 23,540,000 0.2
USD 17,000,000 Nationwide Health Properties Inc.,
Convertible Bonds,
6.25% due 1/01/1999 16,800,000 16,915,000 0.2
USD 12,000,000 Ocwen Asset Investment Corp.,
11.50% due 7/01/2005 (h) 12,000,000 7,080,000 0.1
USD 32,800,000 Omega Healthcare Investors Inc.,
Convertible Bonds,
8.50% due 2/01/2001 32,846,000 37,474,000 0.4
USD 5,500,000 Sizeler Property Investors, Inc.,
Convertible Bonds,
8% due 7/15/2003 5,505,000 5,142,500 0.1
------------ ------------ ------
305,749,450 316,430,675 3.1
Retail-- USD 3,445,000 Ugly Duckling Corporation, 12%
Automotive due 10/15/2003 (q) 3,100,500 3,100,500 0.0
Retail-- USD 4,000,000 Krystal Co. (The), 10.25%
Food due 10/01/2007 4,040,000 3,920,000 0.0
Retail-- USD 22,500,000 Coinstar Inc., 0/13% due
Miscellaneous 10/01/2006(b)(k) 19,891,058 17,325,000 0.2
Savings USD 21,400,000 First Federal Financial Corporation,
Banks 11.75% due 10/01/2004 21,401,250 22,684,000 0.2
Semi- Cypress Semiconductor Corp.,
conductors Convertible Bonds:
USD 3,800,000 6% due 10/01/2002 3,294,500 3,344,000 0.1
USD 3,600,000 6% due 10/01/2002
(Regulation S) (h) 3,092,550 3,168,000 0.0
------------ ------------ ------
6,387,050 6,512,000 0.1
Tele- CAI Wireless Systems, Inc.:
communi- USD 30,000,000 10.50% due 10/14/2000 30,000,000 29,625,000 0.3
cations USD 50,000,000 13% due 10/14/2000 50,000,000 49,000,000 0.5
USD 72,795,396 13% due 10/14/2004 57,527,157 14,559,079 0.1
USD 122,500,000 CS Wireless Systems Inc.,
0/11.375% due 3/01/2006 (b) (l) 71,934,204 20,825,000 0.2
USD 120,363,000 CellNet Data Systems, Inc.,
0/14% due 10/01/2007 (b) (q) 57,234,640 33,701,640 0.3
Centennial Communications Corp. (b):
USD 40,000,000 0/14% due 1/01/2005 (h) 22,747,799 17,600,000 0.2
USD 11,925,186 0/9% due 7/01/2006 (p) 10,580,049 7,155,111 0.1
USD 116,215,000 Geotek Communications, Inc.,
Series B, 0/15% due 7/15/2005 (b) 61,548,057 20,918,700 0.2
Heartland Wireless
Communications Inc.:
USD 4,210,000 13% due 4/15/2003 1,178,800 1,178,800 0.0
USD 13,000,000 14% due 10/15/2004 9,665,000 3,770,000 0.0
USD 22,500,000 Nextel Communications Inc.,
10.65% due 9/15/2007 (b) 13,225,000 13,218,750 0.1
USD 53,000,000 People's Choice T.V. Corporation,
0/13.125% due 6/01/2004 (b) (n) 31,640,165 11,925,000 0.1
Telegroup Inc.:
USD 21,750,000 0/10.50% due 11/01/2004 (b) 18,694,501 10,875,000 0.1
USD 22,000,000 Convertible Bonds, 8% due
4/15/2005 (h) 22,000,000 5,500,000 0.1
USN Communications Inc. (b):
USD 12,697,035 0/9% due 1/13/2006 10,457,905 2,666,377 0.0
USD 32,032,000 Series B, 0/14.625% due
8/15/2004 (h) 19,862,517 19,859,840 0.2
USD 55,000,000 United International Holdings, Inc.,
0/10.75% due 2/15/2008 (b) (f) 35,082,573 25,850,000 0.3
United USN, Inc. (b) (h):
USD 17,000,000 0/14% due 9/15/2003 (i) 11,921,174 5,950,000 0.1
USD 35,000,000 Convertible Bonds, 0/9%
due 9/30/2004 32,285,287 7,000,000 0.1
USD 15,500,000 Winstar Communications Inc.,
0/14% due 10/15/2005 (b) 11,194,733 11,315,000 0.1
</TABLE>
Merrill Lynch Global Allocation Fund, Inc., October 31, 1998
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Currency Face Value Percent of
COUNTRY Industries Denomination Amount Fixed-Income Securities Cost (Note 1a) Net Assets
<S> <S> <S> <C> <S> <C> <C> <C>
United Tele- Wireless One Inc.:
States communi- USD 12,500,000 13% due 4/15/1999 (p) $ 12,500,000 $ 12,250,000 0.1%
(con- cations USD 44,050,000 13% due 10/15/2003 22,563,375 6,167,000 0.1
cluded) (con- USD 34,750,000 0/13.50% due 8/01/2006 (b) 7,828,724 2,432,500 0.0
cluded) ------------ ------------ ------
621,671,660 333,342,797 3.3
Trans- USD 2,750,000 Teekay Shipping Corporation,
portation-- 8.32% due 2/01/2008 2,630,000 2,543,750 0.0
Shipping
Trucking USD 28,250,000 Ameritruck Distribution,
12.25% due 11/15/2005 26,444,325 1,977,500 0.0
US US Treasury Inflation
Government Indexed Notes:
& Agency USD 43,867,740 3.625% due 7/15/2002 43,000,608 43,854,053 0.4
Obli- USD 128,906,250 3.375% due 1/15/2007 123,217,917 126,650,391 1.3
gations US Treasury Notes & Bonds (c):
USD 750,000,000 5.875% due 2/28/1999 747,746,094 753,281,250 7.5
USD 300,000,000 5.875% due 2/15/2000 294,964,844 305,436,000 3.0
------------- ------------- ------
1,208,929,463 1,229,221,694 12.2
Total Fixed-Income Securities
in the United States 2,461,366,839 2,140,810,016 21.2
Venezuela Finance USD 8,443,000 CANTV Finance Ltd., 9.25%
due 2/01/2004 8,231,925 5,825,670 0.0
Government Republic of Venezuela:
Obli- USD 16,550,000 Global Bonds, 13.625%
gations due 8/15/2018 8,303,875 11,916,000 0.1
USD 9,350,000 Par 'A' Brady Bonds,
6.75% due 3/31/2020 (o) 5,458,062 6,223,594 0.1
------------- ------------- ------
13,761,937 18,139,594 0.2
Total Fixed-Income Securities
in Venezuela 21,993,862 23,965,264 0.2
Total Investments in
Fixed-Income Securities 5,293,805,526 4,639,073,171 46.1
Short-Term Securities
Indonesia Certificates UBS Singapore:
of USD 45,000,000,000 50% due 11/19/1998 5,142,857 6,040,269 0.1
Deposit USD 95,000,000,000 40% due 11/23/1998 12,025,317 12,751,678 0.1
USD 110,000,000,000 42% due 11/27/1998 14,012,739 14,765,101 0.1
USD 63,000,000,000 41% due 11/30/1998 7,875,000 8,456,376 0.1
Total Short-Term Investments
in Indonesia 39,055,913 42,013,424 0.4
United Commercial USD 86,610,000 General Electric Capital Corp.,
States Paper**** 5.69% due 11/02/1998 86,582,622 86,582,622 0.9
USD 1,439,000 General Motors Acceptance Corp.,
5.69% due 11/02/1998 1,438,545 1,438,545 0.0
USD 65,000,000 Preferred Receivable Funding Corp.,
5.35% due 11/19/1998 64,816,465 64,816,465 0.6
USD 75,239,000 Republic Industries, Inc., 5.25%
due 11/02/1998 75,217,055 75,217,055 0.8
------------- ------------- ------
228,054,687 228,054,687 2.3
US USD 4,658,000 Federal Home Loan Bank, 5.09%
Government due 11/09/1998 4,652,073 4,652,073 0.0
Agency Federal Home Loan Mortgage Corp.:
Obliga- USD 50,000,000 5.15% due 11/04/1998 49,971,389 49,971,389 0.5
tions**** USD 50,000,000 5.14% due 11/12/1998 49,914,333 49,914,333 0.5
------------- ------------- ------
104,537,795 104,537,795 1.0
Total Short-Term Investments
in the United States 332,592,482 332,592,482 3.3
Total Investments
in Short-Term Securities 371,648,395 374,605,906 3.7
Total Investments 10,543,796,305 9,884,126,443 98.1
OPTIONS Nominal Value Premiums
WRITTEN Covered by Options Received
Call Options 500,000 3Com Corporation, expiring
Written January 1999 at USD 35 (2,453,668) (2,125,000) (0.1)
100,000 Allen Telecom Inc., expiring
December 1998 at USD 12.50 (146,995) (1) 0.0
642,350 Barclays PLC, expiring January
1999 at USD 142 (921,034) (813,116) 0.0
50,000 Baxter International, Inc., expiring
November 1998 at USD 60 (148,495) (100,000) 0.0
190,000 Baxter International, Inc., expiring
November 1998 at USD 65 (886,770) (71,250) 0.0
60,000 Baxter International, Inc.,
expiring February 1999 at USD 65 (159,445) (150,000) 0.0
1,465,000 Cypress Semiconductors Corporation,
expiring January 1999 at USD 10 (1,732,673) (2,746,875) (0.1)
200,000 E.I. duPont de Nemours & Company,
expiring January 1999 at USD 55 (768,974) (1,200,000) 0.0
200,000 Electronic Data Systems Corporation,
expiring January 1999 at USD 45 (993,967) (212,500) 0.0
200,000 Glenayre Technologies Inc., expiring
March 1999 at USD 10 (306,490) (112,500) 0.0
899,577 HSBC Holdings PLC, expiring January
1999 at USD 15.30 (1,438,257) (1,401,566) 0.0
100,000 Humana Inc., expiring November 1998
at USD 27.50 (284,490) (1) 0.0
70,000 J.B. Hunt Transport Corp., expiring
November 1998 at USD 35 (199,143) (1) 0.0
250,000 Millipore Corp., expiring January
1999 at USD 35 (542,982) (3) 0.0
250,000 Motorola, Inc., expiring January
1999 at USD 55 (1,736,192) (671,875) 0.0
400,000 Motorola, Inc., expiring January
1999 at USD 60 (1,670,464) (425,000) 0.0
300,000 Newbridge Networks Corp., expiring
December 1998 at USD 22.50 (550,981) (337,500) 0.0
100,000 Newbridge Networks Corp., expiring
December 1998 at USD 25 (215,743) (56,250) 0.0
150,000 Noble Drilling Corp., expiring
December 1998 at USD 17.50 (259,491) (243,750) 0.0
300,000 Oracle Corporation, expiring
January 1999 at USD 30 (890,970) (731,250) 0.0
400,000 Oracle Corporation, expiring
January 1999 at USD 35 (1,306,706) (225,000) 0.0
200,000 QUALCOMM Inc., expiring January 1999
at USD 55 (1,468,951) (1,450,000) 0.0
250,000 QUALCOMM Inc., expiring January 1999
at USD 60 (1,630,025) (1,156,250) 0.0
50,000 QUALCOMM Inc., expiring January 1999
at USD 70 (360,988) (100,000) 0.0
50,000 QUALCOMM Inc., expiring January 1999
at USD 80 (242,242) (46,875) 0.0
140,000 Schlumberger Limited, expiring
November 1998 at USD 60 (450,785) (26,250) 0.0
200,000 Schlumberger Limited, expiring
January 1999 at USD 60 (718,976) (337,500) 0.0
100,000 Silicon Valley Group, expiring
December 1998 at USD 17.50 (171,994) (37,500) 0.0
</TABLE>
Merrill Lynch Global Allocation Fund, Inc., October 31, 1998
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<CAPTION>
OPTIONS Nominal Value Premiums Value Percent of
WRITTEN Covered by Options Issue Received (Note 1a) Net Assets
<S> <C> <S> <C> <C> <C>
Call Options 250,000 Silicon Valley Group, expiring
Written December 1998 at USD 20 $ (429,985) $ (2) 0.0%
(concluded) 100,000 Tidewater, Inc., expiring January
1999 at USD 40 (521,982) (31,250) 0.0
50,000 United Healthcare Corporation,
expiring January 1999 at USD 35 (170,369) (500,000) 0.0
100,000 Western Wireless Corp., expiring
November 1998 at USD 25 (324,489) (37,500) 0.0
Total Options Written (24,104,716) (15,346,565) (0.2)
Total Investments, Net of Options Written $10,519,691,589 9,868,779,878 97.9
===============
Foreign Time Deposits* 5,365,745 0.1
Variation Margin on Financial Futures Contracts** (5,372,195) (0.1)
Unrealized Depreciation on Forward Foreign Exchange Contracts*** (25,709,028) (0.2)
Other Assets Less Liabilities 235,264,396 2.3
--------------- ------
Net Assets $10,078,328,796 100.0%
=============== ======
<FN>
++Non-income producing security.
++++American Depositary Receipts (ADR).
++++++Global Depositary Receipts (GDR).
+++Represents a pay-in-kind security which may pay interest in
additional shares/face.
*Foreign time deposits bear interest at 4.68% and 4.625% and mature
on 12/14/1998 and 12/18/1998, respectively.
**Financial futures contracts purchased as of October 31, 1998 were
as follows:
Number of Expiration Value
Contracts Issue Exchange Date (Note 1a)
2,835 Nikkei 225 OSAKA December 1998 $329,849,305
------------
Total Financial Futures Contracts Purchased
(Total Contract Price--$357,538,125) $329,849,305
============
Financial futures contracts sold as of October 31, 1998 were as
follows:
Number of Expiration Value
Contracts Issue Exchange Date (Note 1a)
280 Japanese
Government Bond Tokyo December 1998 $333,398,592
275 Standard & Poor's
500 Index NYSE December 1998 75,982,500
200 US Treasury Bond NYSE December 1998 24,075,000
------------
Total Financial Futures Contracts Sold
(Total Contract Price--$422,360,687) $433,456,092
============
***Forward foreign exchange contracts as of October 31, 1998 were
as follows:
Unrealized
Appreciation
Foreign Expiration (Depreciation)
Currency Sold Date (Note 1d)
CHF 27,000,000 November 1998 $ (589,787)
CHF 43,000,000 December 1998 323,269
DEM 32,000,000 November 1998 173,787
DEM 75,000,000 December 1998 (429,784)
DEM 75,000,000 January 1999 (55,030)
ESP 150,000,000 November 1998 17,759
FRF 855,000,000 November 1998 (544,866)
FRF 315,000,000 December 1998 168,628
GBP 23,000,000 November 1998 (507,840)
GBP 101,000,000 December 1998 2,078,710
GBP 20,000,000 January 1999 224,000
JPY 50,000,000,000 November 1998 (23,362,906)
JPY 13,000,000,000 December 1998 (144,736)
NLG 157,000,000 November 1998 (1,400,970)
NLG 32,000,000 December 1998 83,568
NOK 122,000,000 November 1998 (858,662)
NOK 50,000,000 December 1998 (9,789)
SEK 430,000,000 November 1998 (874,379)
-------------
Total Unrealized Depreciation on Forward
Foreign Exchange Contracts--Net
(USD Commitment--$1,310,816,850) $ (25,709,028)
=============
****Commercial Paper and certain US Government Agency Obligations
are traded on a discount basis. The interest rates shown reflect the
discount rates paid atOctober 31, 1998.
(a)Warrants entitle the Fund to purchase a predetermined number of
shares of stock/face amount of bonds and are non-income producing.
The purchase price and number of shares of stock/face amount of
bonds aresubject to adjustment under certain conditions until the
expiration date.
(b)Represents a zero coupon or step bond. The interest rate on a
step bond represents the fixed rate of interest that will commence
its accrual on a predetermined date until maturity.
(c)All or a portion of security held as collateral in connection
with open financial futures contracts.
(d)Subject to principal paydowns as a result of prepayments or
refinancings of the underlying mortgage instruments. As a result,
the average life may be less than the original maturity.
(e)Each $10 face amount contains 40 shares of First Place Tower,
Inc.
(f)Each $1,000 face amount contains one warrant of United
International Holdings, Inc.
(g)Each $1,000 face amount contains four warrants of CellNet Data
Systems, Inc.
(h)The security may be offered and sold to "qualified institutional
buyers" under Rule 144A of the Securities Act of 1933.
(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)Receipts evidence payment by the Fund of 62% of the purchase
price of common stock of HIH Winterthur International Holdings Ltd.
The Fund is obligated to pay the remaining 38%, approximately
$5,344,000, over the next year.
(n)Each $1,000 face amount contains one warrant of People's Choice
T.V. Corporation.
(o)Represents a Brady Bond. Brady Bonds are securities which have
been issued to refinance commercial bank loans and other debt. The
risk associated with these instruments is the amount of any
uncollateralized principal or interest payments since there is a
high default rate of commercial bank loans by countries issuing
these securities.
(p)Restricted securities as to resale. The value of the Fund's
investments in restricted securities was approximately $144,718,000,
representing 1.4% of the net assets.
Acquisition Value
Issue Date(s) Cost (Note 1a)
Centennial Communications
Corp., 0/9% due 7/01/2006 1/13/1998 $ 10,580,049 $ 7,155,111
Diva Systems Corp. 7/17/1996--
(Convertible, Series C) 8/22/1996 8,410,000 4,000,000
East-West Banking
Corp. 6/09/1998 20,000,000 16,000,000
First Washington Realty,
Exchangeable Debentures,
8.25% due 6/27/1999 6/27/1994 25,000,000 29,000,000
ING Bank N.V. (London),
0% due 2/12/1999 2/06/1998 31,000,000 32,860,000
Petroleos Mexicanos, 5/24/1996--
8.625% due 12/01/2023 8/01/1996 25,007,000 33,072,375
SK Telecom Co., Ltd. (ADR) 10/31/1997--
11/07/1997 5,226,630 10,380,428
Wireless One Inc.,
13% due 4/15/1999 9/04/1998 12,500,000 12,250,000
------------ ------------
Total $137,723,679 $144,717,914
============ ============
(q)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:
Dividend/
Net Share/ Net Interest
Industry Affiliate Face Activity Cost Income
Healthcare Advocat, Inc.
Services -- -- ++
Financial Anthracite
Services Capital, Inc. 1,972,900 $29,662,250 $1,242,927
Electronics Checkpoint
Systems, Inc. 501,000 5,359,192 ++
Utilities-- El Paso Electric
Electric Company
& Gas (400,000) (2,100,000) ++
Retail Stores Filene's Basement Corp. -- -- ++
Telecommu- General Communica-
nications tion, Inc. (Class A) 1,482,400 9,294,625 ++
Real Estate Imperial Credit
Investment Commercial Mortgage
Trusts Investment Corp. 2,595,700 35,601,825 1,835,545
Business Data Information
Systems Resources, Inc. 500,000 2,260,525 ++
Oil Services Input/Output, Inc. 3,000,000 29,721,830 ++
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 (295,000) (5,173,125) ++
Retail-- Ugly Duckling
Automotive Corporation,
12% due 10/15/2003 3,445,000 3,100,500 ++
++Non-income producing security.
(r)Due to the uncertainty of financial and economic conditions in
Russia, effective September 24, 1998, interest accrual ceased.
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Global Allocation Fund, Inc., October 31, 1998
<TABLE>
STATEMENT OF ASSETS AND LIABILITIES
<CAPTION>
As of October 31, 1998
<S> <S> <C> <C>
Assets: Investments, at value
(identified cost--$10,543,796,305) (Note 1a) $ 9,884,126,443
Foreign cash (Note 1c) 147,770,319
Cash 1,819,512
Foreign time deposits (Note 1c) 5,365,745
Receivables:
Securities sold $ 177,161,059
Interest 81,678,475
Dividends 10,921,569
Capital shares sold 3,029,425
Options written 2,359,291
Principal paydowns 600,242
Forward foreign exchange contracts (Note 1d) 9,603 275,759,664
---------------
Prepaid registration fees and other assets (Note 1g) 4,062,571
---------------
Total assets 10,318,904,254
---------------
Liabilities: Options written, at value (premiums received--$24,104,716)
(Notes 1a & 1d) 15,346,565
Unrealized depreciation on forward foreign exchange
contracts (Note 1d) 25,709,028
Payables:
Securities purchased 113,080,161
Capital shares redeemed 62,662,280
Distributor (Note 2) 6,163,969
Investment adviser (Note 2) 5,569,864
Variation margin (Note 1d) 5,372,195
Forward foreign exchange contracts (Note 1d) 1,249,967
Dividends on short sales (Note 1i) 23,555 194,121,991
---------------
Accrued expenses and other liabilities 5,397,874
---------------
Total liabilities 240,575,458
---------------
Net Assets: Net assets $10,078,328,796
===============
Net Assets Class A Shares of Common Stock,
Consist of: $0.10 par value, 450,000,000 shares authorized $ 11,423,345
Class B Shares of Common Stock,
$0.10 par value, 2,000,000,000 shares authorized 51,815,904
Class C Shares of Common Stock,
$0.10 par value, 200,000,000 shares authorized 3,915,969
Class D Shares of Common Stock,
$0.10 par value, 900,000,000 shares authorized 9,954,228
Paid-in capital in excess of par 9,979,635,131
Undistributed realized capital gains on investments
and foreign currency transactions--net 737,248,509
Unrealized depreciation on investments and foreign
currency transactions--net (715,664,290)
---------------
Net assets $10,078,328,796
===============
Net Asset Class A--Based on net assets of $1,513,999,059 and
Value: 114,233,454 shares outstanding $ 13.25
===============
Class B--Based on net assets of $6,743,779,776 and
518,159,044 shares outstanding $ 13.01
===============
Class C--Based on net assets of $503,555,680 and
39,159,690 shares outstanding $ 12.86
===============
Class D--Based on net assets of $1,316,994,281 and
99,542,276 shares outstanding $ 13.23
===============
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENT OF OPERATIONS
<CAPTION>
For the Year Ended October 31, 1998
<S> <S> <C> <C>
Investment Interest and discount earned (net of $148,076
Income foreign withholding tax) $ 571,947,283
(Notes 1e & 1f): Dividends (net of $6,045,454 foreign withholding tax) 131,713,971
Other 9,043,288
---------------
Total income 712,704,542
---------------
Expenses: Investment advisory fees (Note 2) $ 97,510,560
Account maintenance and distribution fees--Class B (Note 2) 89,390,716
Transfer agent fees--Class B (Note 2) 13,590,132
Account maintenance and distribution fees--Class C (Note 2) 6,499,610
Account maintenance fees--Class D (Note 2) 3,693,889
Custodian fees 3,278,107
Transfer agent fees--Class A (Note 2) 2,591,531
Transfer agent fees--Class D (Note 2) 1,994,490
Printing and shareholder reports 1,057,016
Transfer agent fees--Class C (Note 2) 1,052,658
Accounting services (Note 2) 1,033,325
Registration fees (Note 1g) 419,766
Dividends on short sales (Note 1i) 311,402
Directors' fees and expenses 32,104
Pricing fees 29,717
---------------
Total expenses before reimbursement 222,485,023
Reimbursement of expenses (Note 2) (11,390,534)
---------------
Total expenses after reimbursement 211,094,489
---------------
Investment income--net 501,610,053
---------------
Realized & Realized gain (loss) from:
Unrealized Gain Investments--net $ 766,494,281
(Loss) on Foreign currency transactions--net (117,482,500) 649,011,781
Investments & ---------------
Foreign Currency Change in unrealized appreciation/depreciation on:
Transactions--Net Investments--net (1,756,403,252)
(Notes 1c, 1d, Foreign currency transactions--net 1,588,936 (1,754,814,316)
1f & 3): --------------- ---------------
Net realized and unrealized loss on investments
and foreign currency transactions (1,105,802,535)
---------------
Net Decrease in Net Assets Resulting from Operations $ (604,192,482)
===============
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Global Allocation Fund, Inc., October 31, 1998
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
For the Year Ended
October 31,
Increase (Decrease) in Net Assets: 1998 1997
<S> <S> <C> <C>
Operations: Investment income--net $ 501,610,053 $ 512,330,919
Realized gain on investments and foreign currency
transactions--net 649,011,781 1,254,936,241
Change in unrealized appreciation/depreciation on
investments and foreign currency transactions--net (1,754,814,316) 79,910,089
--------------- ---------------
Net increase (decrease) in net assets resulting
from operations (604,192,482) 1,847,177,249
--------------- ---------------
Dividends & Investment income--net:
Distributions to Class A (113,534,042) (111,208,977)
Shareholders Class B (435,917,299) (435,557,200)
(Note 1h): Class C (31,817,454) (23,496,200)
Class D (80,421,353) (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 (1,732,789,345) (1,156,552,715)
--------------- ---------------
Capital Share Net increase (decrease) in net assets derived from
Transactions capital share transactions (1,747,724,489) 1,540,268,692
(Note 4): --------------- ---------------
Net Assets: Total increase (decrease) in net assets (4,084,706,316) 2,230,893,226
Beginning of year 14,163,035,112 11,932,141,886
--------------- ---------------
End of year* $10,078,328,796 $14,163,035,112
=============== ===============
<FN>
*Undistributed investment income--net (Note 1j) $ -- $ 260,070,062
=============== ===============
See Notes to Financial Statements.
</TABLE>
<TABLE>
FINANCIAL HIGHLIGHTS
<CAPTION>
The following per share data and ratios have been derived
from information provided in the financial statements. Class A
For the Year Ended October 31,
Increase (Decrease) in Net Asset Value: 1998++ 1997++ 1996++ 1995++ 1994
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value,
Operating beginning of year $ 15.92 $ 15.17 $ 14.21 $ 13.07 $ 13.52
Performance: ----------- ----------- ----------- ----------- -----------
Investment income--net .67 .71 .78 .79 .60
Realized and unrealized gain
(loss) on investments and
foreign currency
transactions--net (1.28) 1.57 1.59 1.04 (.31)
----------- ----------- ----------- ----------- -----------
Total from investment operations (.61) 2.28 2.37 1.83 .29
----------- ----------- ----------- ----------- -----------
Less dividends and distributions:
Investment income--net (.86) (.88) (.98) (.39) (.51)
Realized gain on
investments--net (1.20) (.65) (.43) (.30) (.23)
----------- ----------- ----------- ----------- -----------
Total dividends and distributions (2.06) (1.53) (1.41) (.69) (.74)
----------- ----------- ----------- ----------- -----------
Net asset value, end of year $ 13.25 $ 15.92 $ 15.17 $ 14.21 $ 13.07
=========== =========== =========== =========== ===========
Total Investment Based on net asset value per
Return:* share (4.43%) 16.08% 17.81% 14.81% 2.14%
=========== =========== =========== =========== ===========
Ratios to Average Expenses, net of reimbursement .84% .83% .86% .90% .89%
Net Assets: =========== =========== =========== =========== ===========
Expenses .93% .91% .93% .90% .89%
=========== =========== =========== =========== ===========
Investment income--net 4.62% 4.64% 5.31% 5.98% 4.60%
=========== =========== =========== =========== ===========
Supplemental Net assets, end of year
Data: (in thousands) $ 1,513,999 $ 2,132,254 $ 1,841,974 $ 1,487,805 $ 1,357,906
=========== =========== =========== =========== ===========
Portfolio turnover 49.67% 55.42% 51.26% 36.78% 57.04%
=========== =========== =========== =========== ===========
<CAPTION>
The following per share data and ratios have been derived
from information provided in the financial statements. Class B
For the Year Ended October 31,
Increase (Decrease) in Net Asset Value: 1998++ 1997++ 1996++ 1995++ 1994
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value,
Operating beginning of year $ 15.65 $ 14.95 $ 14.01 $ 12.91 $ 13.38
Performance: ----------- ----------- ----------- ----------- -----------
Investment income--net .52 .55 .62 .65 .46
Realized and unrealized gain
(loss) on investments and
foreign currency
transactions--net (1.26) 1.52 1.59 1.01 (.31)
----------- ----------- ----------- ----------- -----------
Total from investment operations (.74) 2.07 2.21 1.66 .15
----------- ----------- ----------- ----------- -----------
Less dividends and distributions:
Investment income--net (.70) (.72) (.84) (.26) (.39)
Realized gain on
investments--net (1.20) (.65) (.43) (.30) (.23)
----------- ----------- ----------- ----------- -----------
Total dividends and distributions (1.90) (1.37) (1.27) (.56) (.62)
----------- ----------- ----------- ----------- -----------
Net asset value, end of year $ 13.01 $ 15.65 $ 14.95 $ 14.01 $ 12.91
=========== =========== =========== =========== ===========
Total Investment Based on net asset value
Return:* per share (5.37%) 14.82% 16.71% 13.54% 1.13%
=========== =========== =========== =========== ===========
Ratios to Average Expenses, net of reimbursement 1.86% 1.85% 1.87% 1.93% 1.91%
Net Assets: =========== =========== =========== =========== ===========
Expenses 1.95% 1.93% 1.95% 1.93% 1.91%
=========== =========== =========== =========== ===========
Investment income--net 3.60% 3.62% 4.29% 4.96% 3.58%
=========== =========== =========== =========== ===========
Supplemental Net assets, end of year
Data: (in thousands) $ 6,743,780 $ 9,879,603 $ 8,660,279 $ 6,668,499 $ 6,457,130
=========== =========== =========== =========== ===========
Portfolio turnover 49.67% 55.42% 51.26% 36.78% 57.04%
=========== =========== =========== =========== ===========
<FN>
*Total investment returns exclude the effects of sales loads.
++Based on average shares outstanding.
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Global Allocation Fund, Inc., October 31, 1998
<TABLE>
FINANCIAL HIGHLIGHTS (concluded)
<CAPTION>
Class C
For the
The following per share data and ratios have been derived Period
from information provided in the financial statements. Oct. 21, 1994++
For the Year Ended October 31, to Oct. 31,
Increase (Decrease) in Net Asset Value: 1998++++ 1997++++ 1996++++ 1995++++ 1994
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value,
Operating beginning of period $ 15.50 $ 14.83 $ 13.94 $ 12.91 $ 12.91
Performance: ----------- ----------- ----------- ----------- -----------
Investment income--net .51 .54 .61 .64 .01
Realized and unrealized gain
(loss) on investments and
foreign currency
transactions--net (1.24) 1.52 1.58 1.02 (.01)
----------- ----------- ----------- ----------- -----------
Total from investment operations (.73) 2.06 2.19 1.66 --
----------- ----------- ----------- ----------- -----------
Less dividends and distributions:
Investment income--net (.71) (.74) (.87) (.33) --
Realized gain on
investments--net (1.20) (.65) (.43) (.30) --
----------- ----------- ----------- ----------- -----------
Total dividends and
distributions (1.91) (1.39) (1.30) (.63) --
----------- ----------- ----------- ----------- -----------
Net asset value,
end of period $ 12.86 $ 15.50 $ 14.83 $ 13.94 $ 12.91
=========== =========== =========== =========== ===========
Total Investment Based on net asset value
Return:** per share (5.38%) 14.84% 16.68% 13.58% .00%+++
=========== =========== =========== =========== ===========
Ratios to Average Expenses, net of reimbursement 1.88% 1.86% 1.88% 1.95% 2.44%*
Net Assets: =========== =========== =========== =========== ===========
Expenses 1.96% 1.94% 1.95% 1.95% 2.44%*
=========== =========== =========== =========== ===========
Investment income--net 3.61% 3.60% 4.24% 4.80% 3.71%*
=========== =========== =========== =========== ===========
Supplemental Net assets, end of period
Data: (in thousands) $ 503,556 $ 671,467 $ 385,753 $ 102,361 $ 7,347
=========== =========== =========== =========== ===========
Portfolio turnover 49.67% 55.42% 51.26% 36.78% 57.04%
=========== =========== =========== =========== ===========
<CAPTION>
Class D
For the
The following per share data and ratios have been derived Period
from information provided in the financial statements. Oct. 21, 1994++
For the Year Ended October 31, to Oct. 31,
Increase (Decrease) in Net Asset Value: 1998++++ 1997++++ 1996++++ 1995++++ 1994
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value,
Operating beginning of period $ 15.89 $ 15.15 $ 14.19 $ 13.08 $ 13.07
Performance: ----------- ----------- ----------- ----------- -----------
Investment income--net .64 .68 .77 .77 .01
Realized and unrealized gain
(loss) on investments and
foreign currency
transactions--net (1.28) 1.55 1.57 1.01 --
----------- ----------- ----------- ----------- -----------
Total from investment operations (.64) 2.23 2.34 1.78 .01
----------- ----------- ----------- ----------- -----------
Less dividends and
distributions:
Investment income--net (.82) (.84) (.95) (.37) --
Realized gain on
investments--net (1.20) (.65) (.43) (.30) --
----------- ----------- ----------- ----------- -----------
Total dividends and
distributions (2.02) (1.49) (1.38) (.67) --
----------- ----------- ----------- ----------- -----------
Net asset value,
end of period $ 13.23 $ 15.89 $ 15.15 $ 14.19 $ 13.08
=========== =========== =========== =========== ===========
Total Investment Based on net asset
Return:** value per share (4.63%) 15.76% 17.59% 14.43% .08%+++
=========== =========== =========== =========== ===========
Ratios to Average Expenses, net of reimbursement 1.10% 1.08% 1.10% 1.16% 1.69%*
Net Assets: =========== =========== =========== =========== ===========
Expenses 1.18% 1.16% 1.18% 1.16% 1.69%*
=========== =========== =========== =========== ===========
Investment income--net 4.40% 4.38% 5.04% 5.63% 4.46%*
=========== =========== =========== =========== ===========
Supplemental Net assets, end of period
Data: (in thousands) $ 1,316,994 $ 1,479,711 $ 1,044,136 $ 256,525 $ 4,968
=========== =========== =========== =========== ===========
Portfolio turnover 49.67% 55.42% 51.26% 36.78% 57.04%
=========== =========== =========== =========== ===========
<FN>
*Annualized.
**Total investment returns exclude the effects of sales loads.
+++Aggregate total investment return.
++Commencement of operations.
++++Based on average shares outstanding.
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Global Allocation Fund, Inc., October 31, 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. 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 or
purchased are valued at the last sale price in the case of exchange-
traded options. In the case of options traded in the over-the-
counter market, valuation is the last asked price (options written)
or the last bid price (options purchased). Short-term securities are
valued at amortized cost, which approximates market value. Other
investments, including financial 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 securities pursuant
to repurchase agreements. Under such agreements, the counterparty
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 additional
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.
(j) Reclassification--Generally accepted accounting principles
require that certain components of net assets be adjusted to reflect
permanent differences between financial and tax reporting.
Accordingly, current year's permanent book/tax differences of
$99,989,967 have been reclassified between undistributed net
realized capital gains and undistributed net investment income.
These reclassifications have no effect on net assets and net asset
values per share.
2. Investment Advisory Agreement and Transactions
with Affiliates:
The Fund has entered into an Investment Advisory Agreement with
Merrill Lynch Asset Management, L.P. ("MLAM"). The general partner
of MLAM is Princeton Services, Inc. ("PSI"), an indirect wholly-
owned subsidiary of Merrill Lynch & Co., Inc. ("ML & Co."), which is
the limited partner. The Fund has also entered into a Distribution
Agreement and Distribution Plans with Merrill Lynch Funds
Distributor ("MLFD" or "Distributor"), a division of Princeton Funds
Distributor, Inc. ("PFD"), which is 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 year ended October 31, 1998, MLAM
earned fees of $97,510,560, of which $11,390,534 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 year ended October 31, 1998, MLAM paid MLAM U.K. a fee
of $11,436,228 pursuant to such agreement.
Merrill Lynch Global Allocation Fund, Inc., October 31, 1998
NOTES TO FINANCIAL STATEMENTS (concluded)
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:
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 year ended October 31, 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 $20,456 $265,515
Class D $66,131 $897,148
For the year ended October 31, 1998, MLPF&S received contingent
deferred sales charges of $13,042,745 and $242,453 relating to
transactions in Class B and Class C Shares, respectively.
Furthermore, MLPF&S received contingent deferred sales charges of
$70,285 relating to transactions subject to front-end sales charge
waivers in Class A Shares.
In addition, MLPF&S received $655,667 in commissions on the
execution of portfolio security transactions for the Fund for the
year ended October 31, 1998.
For the year ended October 31, 1998, the Fund paid Merrill Lynch
Security Pricing Service, an affiliate of MLPF&S, $595 for security
price quotations to compute the net asset value of the Fund.
Financial Data Services, Inc. ("FDS"), a wholly-owned subsidiary of
ML & Co., is the Fund's transfer agent.
Accounting services are provided to the Fund by MLAM at cost.
Certain officers and/or directors of the Fund are officers and/or
directors of MLAM, PSI, FDS, PFD, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the year ended October 31, 1998 were $5,733,466,772 and
$7,176,834,730, respectively.
Net realized gains (losses) for the year ended October 31, 1998 and
net unrealized gains (losses) as of October 31, 1998 were as
follows:
Realized Unrealized
Gains (Losses) Gains (Losses)
Long-term investments $ 855,205,243 $ (662,627,373)
Short-term investments (5,443) 2,957,511
Short sales investments (3,989,446) --
Options purchased (21,156) --
Options written 18,098,025 8,758,151
Financial futures contracts (102,792,942) (38,784,225)
Forward foreign exchange contracts (45,040,212) (25,709,028)
Foreign currency transactions (72,442,288) (259,326)
-------------- --------------
Total $ 649,011,781 $ (715,664,290)
============== ==============
As of October 31, 1998, net unrealized depreciation for Federal
income tax purposes aggregated $679,531,440, of which $943,726,398
related to appreciated securities and $1,623,257,838 related to
depreciated securities. At October 31, 1998, the aggregate cost of
investments, net of premiums received for options written, for
Federal income tax purposes was $10,548,311,318.
Transactions in call options written for the year ended October 31,
1998 were as follows:
Nominal Value Premiums
Covered Received
Outstanding call options written,
beginning of year 2,050,000 $ 8,091,353
Options written 26,797,636 44,669,930
Options exercised (1,240,000) (4,137,661)
Options expired (17,900,709) (17,530,365)
Options closed (1,390,000) (6,988,541)
------------ -------------
Outstanding call options written,
end of year 8,316,927 $ 24,104,716
============ =============
4. Capital Share Transactions:
Net increase (decrease) in net assets derived from capital share
transactions was $(1,747,724,489) and $1,540,268,692 for the years
ended October 31, 1998 and October 31, 1997, respectively.
Transactions in capital shares for each class were as follows:
Class A Shares for the Year Dollar
Ended October 31, 1998 Shares Amount
Shares sold 18,655,199 $ 271,738,900
Shares issued to shareholders in
reinvestment of dividends and
distributions 17,209,249 244,114,543
--------------- ---------------
Total issued 35,864,448 515,853,443
Shares redeemed (55,587,214) (789,412,837)
--------------- ---------------
Net decrease (19,722,766) $ (273,559,394)
=============== ===============
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 Year Dollar
Ended October 31, 1998 Shares Amount
Shares sold 60,460,630 $ 875,915,458
Shares issued to shareholders in
reinvestment of dividends and
distributions 73,891,197 1,032,137,910
--------------- ---------------
Total issued 134,351,827 1,908,053,368
Shares redeemed (231,873,525) (3,216,714,130)
Automatic conversion of shares (15,413,728) (214,503,471)
--------------- ---------------
Net decrease (112,935,426) $(1,523,164,233)
=============== ===============
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 Year Dollar
Ended October 31, 1998 Shares Amount
Shares sold 9,924,944 $ 142,791,337
Shares issued to shareholders in
reinvestment of dividends and
distributions 5,395,282 74,521,891
--------------- ---------------
Total issued 15,320,226 217,313,228
Shares redeemed (19,487,655) (266,727,805)
--------------- ---------------
Net decrease (4,167,429) $ (49,414,577)
=============== ===============
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 Year Dollar
Ended October 31, 1998 Shares Amount
Shares sold 14,494,815 $ 213,305,917
Automatic conversion of shares 15,180,911 214,503,471
Shares issued to shareholders in
reinvestment of dividends and
distributions 11,776,663 167,004,527
--------------- ---------------
Total issued 41,452,389 594,813,915
Shares redeemed (35,025,559) (496,400,200)
--------------- ---------------
Net increase 6,426,830 $ 98,413,715
=============== ===============
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 October 31, 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 $144,000 and
$14,023,000, respectively.
Merrill Lynch Global Allocation Fund, Inc., October 31, 1998
<AUDIT-REPORT>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders,
Merrill Lynch Global Allocation Fund, Inc.:
We have audited the accompanying statement of assets and
liabilities, including the schedule of investments, of Merrill Lynch
Global Allocation Fund, Inc. as of October 31, 1998, the related
statements of operations for the year then ended and changes in net
assets for each of the years in the two-year period then ended, and
the financial highlights for each of the years in the five-year
period then ended. These financial statements and the financial
highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial
statements and the financial highlights based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements and the financial highlights are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.
Our procedures included confirmation of securities owned at October
31, 1998 by correspondence with the custodian and brokers; where
replies were not received from brokers, we performed other auditing
procedures. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights
present fairly, in all material respects, the financial position of
Merrill Lynch Global Allocation Fund, Inc. as of October 31, 1998,
the results of its operations, the changes in its net assets, and
the financial highlights for the respective stated periods in
conformity with generally accepted accounting principles.
Deloitte & Touche LLP
Princeton, New Jersey
December 17, 1998
</AUDIT-REPORT>
PORTFOLIO INFORMATION (unaudited)
Worldwide
Investments
As of 10/31/98
Breakdown of Stocks &
Fixed-Income Securities by Percent of
Country Net Assets
United States* 48.0%
Japan 8.1
Argentina 5.9
South Korea 4.0
United Kingdom 3.1
Germany 3.0
France 2.6
Australia 2.2
Malaysia 2.2
Hong Kong 1.9
Brazil 1.8
Canada 1.5
Russia 1.4
Netherlands 1.3
Mexico 1.2
Italy 1.1
Singapore 1.0
Indonesia* 0.8
Philippines 0.8
Switzerland 0.8
China 0.8
Sweden 0.7
Cayman Islands 0.5
Finland 0.5
Portugal 0.5
Norway 0.4
South Africa 0.3
Venezuela 0.3
Turkey 0.3
Chile 0.3
Thailand 0.2
Austria 0.2
New Zealand 0.1
Ireland 0.1
Spain 0.1
Hungary 0.1
[FN]
*Includes investments in short-term securities.
Ten Largest Holdings Percent of
(Equity Investments) Net Assets
Broken Hill Proprietary Co., Ltd. 0.8%
QUALCOMM, Inc. 0.6
Republic New York Corp. 0.6
Telecom Italia S.p.A.--RISP 0.6
Security Capital Group Inc.
(Class B) 0.6
Houston Industries, Inc. 0.5
Golden State Bancorp Inc. 0.5
Mellon Bank Corp. 0.5
Banc One Corp. 0.5
Hutchison Whampoa Ltd. 0.5
Ten Largest Industries Percent of
(Equity Investments) Net Assets
Banking++ 6.5%
Insurance 4.0
Utilities--Electric & Gas 3.5
Telecommunications 3.2
Electronics 1.9
Multi-Industry 1.8
Metals & Mining 1.4
Healthcare Services 1.3
Real Estate Investment Trusts 1.3
Chemicals 1.2
[FN]
++Includes savings banks.
