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MERRILL LYNCH
GLOBAL
ALLOCATION
FUND, INC.
FUND LOGO
Quarterly Report
January 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.
Merrill Lynch
Global Allocation
Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
<PAGE>
Printed on post-consumer recycled paper
MERRILL LYNCH GLOBAL ALLOCATION FUND, INC.
<TABLE>
Summary of
Fund's Overall
Asset Mix
As of 1/31/98
<CAPTION>
Percent of Fund's Net Assets Reference Portfolio
1/31/98 10/31/97 Percentages
<S> <C> <C> <C>
North & South American Equities 19.5%* 19.1%* 36.0%
European Equities 10.8 11.2 11.0
Pacific Basin Equities 7.4 6.9 13.0
Total Equities 37.7 37.2 60.0
US Dollar Denominated Fixed-Income Securities 38.8 37.9 24.0
US Issuers 27.0 25.9 --
Non-US Issuers 11.8 12.0 --
Non-US Dollar Denominated Fixed-Income Securities 9.8 9.2 16.0
Total Fixed-Income Securities 48.6++ 47.1++ 40.0
Cash & Cash Equivalents 13.7 15.7 --
<FN>
*Includes value of Stock Index Futures.
++Includes Preferred Stock.
</TABLE>
Merrill Lynch Global Allocation Fund, Inc., January 31, 1998
DEAR SHAREHOLDER
For the quarter ended January 31, 1998, Merrill Lynch Global
Allocation Fund, Inc.'s Class A, Class B, Class C and Class D Shares
had total investment returns of +1.20%, +1.00%, +0.90% and +1.13%,
respectively. (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--5 of this report to shareholders.)
<PAGE>
On December 18, 1997, Merrill Lynch Global Allocation Fund paid a
significant income and capital gains distribution to its
shareholders. For example, for Class A shareholders, the December
income distribution amounted to $0.4977 per share and the realized
capital gains distribution (realized long-term plus short-term
gains) amounted to $1.1984 per share. (See the "Recent Performance
Results" table on page 5 of this report to shareholders for
distributions for all classes of shares.)
The Fund, like other mutual funds, is not obligated to pay income
taxes on its income as ordinary corporations are. However, in return
for not being taxable, mutual funds are obligated to distribute
virtually all of their income and realized capital gains to
shareholders annually. Merrill Lynch Global Allocation Fund
typically pays an income distribution to shareholders at mid-year,
and then pays income and capital gains distributions in December.
Distributions can only be made to the extent that there is income
after expenses and realized gains (net of any losses).
Over time, income and capital gains distributions can be a
significant part of the return to shareholders. For example, a
shareholder who purchased Class A Shares at the time of the Fund's
inception in February 1989 would have paid $10.00 per share, plus
the applicable front-end sales charge. If the investor held these
shares through January 31, 1998, he or she would have received
cumulative distributions of $10.48 per share (somewhat more than the
original investment before sales charges), and would still have an
investment worth $14.38 per share as of January 31, 1998.
Equity Markets
Equities in general, and US equities in particular, outperformed
Merrill Lynch Global Allocation Fund during the quarter ended
January 31, 1998. Equity markets were rebounding during the January
quarter following a significant sell-off in late October 1997. This
sell-off culminated on October 27, 1997, when both the Dow Jones
Industrial Average and the Standard & Poor's 500 Composite Index
sustained their largest one-day point declines. At that time,
investor concerns regarding the Asian financial crisis were at their
highest level. The world's major stock markets experienced sharp
declines during this period, but steadily recovered over the course
of the January quarter. Shares of Merrill Lynch Global Allocation
Fund did not decline as much as global stock markets during October,
but subsequently did not rebound as readily. Nevertheless, shortly
after the January quarter's close, the net asset values of the
Fund's shares went on to reach new highs, adjusted for the December
distribution to shareholders.
The market turbulence generated by the Asian financial crisis
created some attractive long-term investment opportunities for the
Fund. During the quarter, we modestly increased investments in Asian
equities, primarily by expanding existing holdings in Australia, New
Zealand, South Korea and Hong Kong. As of January 31, our Asian
equity exposure was 5.9% of net assets, compared to 5.5% at the end
of the prior quarter. We do believe that while there are good
investment opportunities in Asia, they come with significant risks,
and high levels of volatility are likely to continue.
<PAGE>
Bond Markets
Global bond markets showed mixed returns during the January quarter.
While five-year US Treasury issues had positive returns, bond
markets outside of the United States experienced losses when their
returns were translated into US dollars. During the January quarter,
we reduced the Fund's cash reserves slightly from 15.7% of net
assets to 13.7%, primarily through the purchase of US dollar-
denominated bonds of South Korean issuers. For example, we purchased
bonds of Korea Export Import Bank, which we regard as essentially a
sovereign credit. We also purchased bonds of Korea Electric Power,
the monopoly electric utility in South Korea, which is partially
government-owned, and Pohang Iron & Steel, which is widely regarded
as one of the best and lowest-cost steel producers in the world. As
is the case with our equity investments, these positions in South
Korean bonds represent a relatively small portion of the portfolio.
We believe that these bonds have the potential to appreciate over
the longer term; in the meantime, they provide an attractive yield.
In Latin America, we sold some of the US dollar-denominated bonds
that we had purchased in the prior quarter, since they had
appreciated strongly in a relatively short period of time. Even
though we were reducing positions during the period because of price
appreciation, the Fund's Latin American bond exposure ended the
January quarter slightly higher than had been the case at the end of
the prior quarter.
In Conclusion
We thank you for your investment in Merrill Lynch Global Allocation
Fund, Inc., and we look forward to reviewing our outlook and
strategy with you again in our next report to shareholders.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Bryan N. Ison)
Bryan N. Ison
Senior Vice President and
Portfolio Manager
March 13, 1998
<PAGE>
Officers and
Directors
Arthur Zeikel, President and Director
Donald Cecil, Director
Edward H. Meyer, Director
Charles C. Reilly, Director
Richard R. West, Director
Edward D. Zinbarg, Director
Terry K. Glenn, Executive Vice President
Norman R. Harvey, Senior Vice President
Bryan N. Ison, Senior Vice President and Portfolio Manager
Donald C. Burke, Vice President
Dennis W. Stattman, Vice President
Gerald M. Richard, Treasurer
James W. Harshaw, Secretary
Custodian
Brown Brothers Harriman & Co.
40 Water Street
Boston, MA 02109
Transfer Agent
Merrill Lynch Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 637-3863
Merrill Lynch Global Allocation Fund, Inc., January 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.
<PAGE>
* Class B Shares are subject to a maximum contingent deferred sales
charge of 4% if redeemed during the first year, decreasing 1% each
year thereafter to 0% after the fourth year. In addition, Class B
Shares are subject to a distribution fee of 0.75% and an account
maintenance fee of 0.25%. These shares automatically convert to
Class D Shares after approximately 8 years. (There is no initial
sales charge for automatic share conversions.)
* Class C Shares are subject to a distribution fee of 0.75% and an
account maintenance fee of 0.25%. In addition, Class C Shares are
subject to a 1% contingent deferred sales charge if redeemed within
one year of purchase.
* Class D Shares incur a maximum initial sales charge of 5.25% and
an account maintenance fee of 0.25% (but no distribution fee).
None of the past results shown should be considered a representation
of future performance. Figures shown in the "Average Annual Total
Return" tables assume reinvestment of all dividends and capital
gains distributions at net asset value on the ex-dividend date.
Investment return and principal value of shares will fluctuate so
that shares, when redeemed, may be worth more or less than their
original cost. Dividends paid to each class of shares will vary
because of the different levels of account maintenance,
distribution and transfer agency fees applicable to each class,
which are deducted from the income available to be paid to
shareholders.
Average Annual
Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 12/31/97 +11.37% + 5.52%
Five Years Ended 12/31/97 +13.68 +12.46
Inception (2/3/89) through 12/31/97 +13.96 +13.27
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
<PAGE>
Class B Shares*
Year Ended 12/31/97 +10.34% + 6.47%
Five Years Ended 12/31/97 +12.53 +12.53
Inception (2/3/89) through 12/31/97 +12.81 +12.81
[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 12/31/97 +10.31% + 9.34%
Inception (10/21/94) through 12/31/97 +13.83 +13.83
[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 12/31/97 +11.12% + 5.28%
Inception (10/21/94) through 12/31/97 +14.73 +12.81
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
<TABLE>
Recent
Performance
Results
<CAPTION>
Net Asset Value Total Return
1/31/98 10/31/97 1/31/97 12-Month 3-Month
<S> <C> <C> <C> <C> <C>
ML Global Allocation Fund, Inc. Class A Shares* $14.38 $15.92 $14.81 +11.27%(1) +1.20%(2)
ML Global Allocation Fund, Inc. Class B Shares* 14.16 15.65 14.61 +10.17(3) +1.00(4)
ML Global Allocation Fund, Inc. Class C Shares* 13.99 15.50 14.47 +10.13(5) +0.90(6)
ML Global Allocation Fund, Inc. Class D Shares* 14.36 15.89 14.79 +11.02(7) +1.13(8)
US Stocks: Standard & Poor's 500 Index** +26.89 +7.62
Non-US Stocks: Financial Times/Standard & Poor's--
Actuaries World Index (Ex-US)*** + 8.37 +3.18
US Bonds: ML Government Index GA05**** + 9.68 +2.72
Non-US Bonds: Salomon Brothers World Government
Bond Index (Ex-US)***** + 0.47 -2.90
<PAGE>
<FN>
*Investment results shown do not reflect sales charges; results
shown would be lower if a sales charge was included.
**An unmanaged broad-based index comprised of common stocks. Total
investment returns for unmanaged indexes are based on estimates.
***An unmanaged capitalization-weighted index comprised of over
1,800 companies in 24 countries, excluding the United States.
****An unmanaged index designed to track the total return of the
current coupon five-year US Treasury bond.
*****An unmanaged market capitalization-weighted index tracking 10
government bond indexes, excluding the United States.
(1)Percent change includes reinvestment of $1.118 per share ordinary
income dividends and $0.937 per share capital gains distributions.
(2)Percent change includes reinvestment of $0.760 per share ordinary
income dividends and $0.937 per share capital gains distributions.
(3)Percent change includes reinvestment of $0.961 per share ordinary
income dividends and $0.937 per share capital gains distributions.
(4)Percent change includes reinvestment of $0.678 per share ordinary
income dividends and $0.937 per share capital gains distributions.
(5)Percent change includes reinvestment of $0.972 per share ordinary
income dividends and $0.937 per share capital gains distributions.
(6)Percent change includes reinvestment of $0.682 per share ordinary
income dividends and $0.937 per share capital gains distributions.
(7)Percent change includes reinvestment of $1.080 per share ordinary
income dividends and $0.937 per share capital gains distributions.
(8)Percent change includes reinvestment of $0.740 per share ordinary
income dividends and $0.937 per share capital gains distributions.
</TABLE>
Portfolio
Abbreviations
To simplify the currency denominations of Merrill Lynch Global
Allocation Fund, Inc.'s portfolio holdings in the Schedule of
Investments, we have abbreviated the currencies according to the
list at right.
BRE Brazilian Cruzeiro
CAD Canadian Dollar
CHF Swiss Franc
DEM German Deutschemark
ECU European Currency Unit
ESP Spanish Peseta
FRF French Franc
GBP Great Britain Pound
IDR Indonesian Rupiah
JPY Japanese Yen
NLG Netherlands Guilder
NOK Norwegian Krone
NZD New Zealand Dollar
PHP Philippine Peso
SEK Swedish Kroner
USD United States Dollar
ZAL South African Rand
<PAGE>
Merrill Lynch Global Allocation Fund, Inc., January 31, 1998
<TABLE>
SCHEDULE OF INVESTMENTS (in US dollars)
<CAPTION>
Shares Percent of
COUNTRY Industries Held Common Stocks Cost Value 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 $ 12,487,081 0.1%
2,133,900 Banco Rio de La Plata
S.A. (ADR)++ (USD) 22,946,904 26,273,644 0.2
--------------- --------------- ------
34,201,893 38,760,725 0.3
Oil--Related 480,000 Yacimientos Petroliferos
Fiscales S.A. (ADR)++ (USD) 10,296,490 14,610,000 0.1
Total Common Stocks in
Argentina 44,498,383 53,370,725 0.4
Australia Beverages 1,999,379 Foster's Brewing Group
Limited 3,509,519 4,254,978 0.0
Building & 1,636,577 Lend Lease Corporation
Construction Limited 27,280,912 38,404,946 0.3
Building Materials 718,547 Pioneer International
Limited 1,814,681 1,810,347 0.0
Foods 6,166,000 Goodman Fielder Wattie Ltd. 6,493,301 9,740,039 0.1
Insurance 2,333,135 GIO Australia Holdings, Ltd. 4,452,692 6,278,653 0.0
Metals & Mining 8,102,904 M.I.M. Holdings Ltd. 6,735,707 5,062,006 0.1
5,000,000 Normandy Mining Limited 4,368,274 5,869,575 0.0
11,990,927 Pasminco Limited 13,221,329 13,417,787 0.1
8,700,000 WMC Limited 29,191,616 30,770,578 0.2
--------------- --------------- ------
53,516,926 55,119,946 0.4
Multi-Industry 8,965,582 Broken Hill Proprietary
Co., Ltd. 98,474,864 88,833,268 0.7
2,300,000 Pacific Dunlop, Ltd. 5,753,464 4,894,745 0.0
--------------- --------------- ------
104,228,328 93,728,013 0.7
<PAGE>
Tobacco 525,620 Rothmans Holdings, Ltd. 1,982,927 3,175,376 0.0
1,242,300 WD & HO Wills Holdings, Ltd. 1,389,502 1,790,962 0.0
--------------- --------------- ------
3,372,429 4,966,338 0.0
Total Common Stocks in
Australia 204,668,788 214,303,260 1.5
Canada Beverages 1,900,000 Cott Corp. (USD) 15,484,918 15,912,500 0.1
Metals--Non-Ferrous 1,427,400 Inco Ltd. (USD) 29,691,234 25,336,350 0.2
Multi-Industry 280,000 Semi-Tech Corporation (Class A) 4,108,297 136,053 0.0
Paper 3,250,000 Repap Enterprises Inc. (USD) 12,879,320 552,500 0.0
Telecommunications 200,000 BCE Telecommunications, Inc.
(USD) 3,375,484 6,250,000 0.1
1,165,200 Rogers Cantel Mobile
Communications Inc. (Class B)
(CAD) 22,391,633 8,253,367 0.0
1,260,900 Rogers Cantel Mobile
Communications Inc.
(Class B)(USD) 20,941,379 9,062,719 0.1
4,543,700 Rogers Communications Inc.
(Class B) 39,359,870 17,413,578 0.1
--------------- --------------- ------
86,068,366 40,979,664 0.3
Total Common Stocks in
Canada 148,232,135 82,917,067 0.6
Finland Metals 645,093 Outokumpu OY 9,461,428 7,603,851 0.1
Paper & Forest 964,985 Enso OY 8,072,452 7,838,467 0.1
Products 2,909,250 Metsa Serla OY 'B' 23,657,400 21,793,512 0.1
639,478 UPM-Kymmene OY 12,090,735 14,082,622 0.1
--------------- --------------- ------
43,820,587 43,714,601 0.3
Telecommunication 150,000 Nokia Corp. (ADR)++ (USD) 7,647,345 11,400,000 0.1
Equipment 186,360 Nokia OY 8,998,615 14,700,504 0.1
--------------- --------------- ------
16,645,960 26,100,504 0.2
Total Common Stocks in
Finland 69,927,975 77,418,956 0.6
<PAGE>
France Automobiles 123,745 Peugeot S.A. 14,457,328 16,219,592 0.1
Banking 216,620 Banque Nationale de
Paris S.A. 9,576,811 11,180,615 0.1
173,900 Compagnie Financiere de
Paribas S.A. 9,343,179 15,535,898 0.1
540,386 Societe Generale de
France S.A. 56,680,843 70,125,082 0.5
--------------- --------------- ------
75,600,833 96,841,595 0.7
Electronics 75,299 SGS-Thomson
Microelectronics N.V. 3,487,840 5,154,557 0.0
Energy & Petroleum 206,064 Elf Aquitaine (Elf) S.A. 21,767,337 23,246,868 0.2
Engineering & 212,968 Bouygues S.A. 20,353,497 27,081,030 0.2
Construction
Foods/Food Processing 61,600 Groupe Danone S.A. 9,786,153 12,060,906 0.1
Hotel/Leisure 47,466 Accor S.A. 6,649,847 9,332,246 0.1
Industrial 195,846 Alcatel Alsthom Cie
Generale d'Electricite S.A. 18,263,077 25,957,417 0.2
Insurance 449,703 Assurances Generales de
France S.A. (AGF) 14,251,335 23,511,534 0.2
314,456 Axa S.A.--UAP 19,659,982 26,093,594 0.2
--------------- --------------- ------
33,911,317 49,605,128 0.4
Metals/Steel 1,477,394 Usinor-Sacilor S.A. 22,060,574 20,279,846 0.1
Multi-Industry 57,253 EuraFrance S.A. 18,792,553 23,054,273 0.1
Total Common Stocks in
France 245,130,356 308,833,458 2.2
Germany Automotive 199,256 Daimler-Benz AG 13,553,254 13,958,808 0.1
61,108 Volkswagen AG 32,290,879 35,262,321 0.2
--------------- --------------- ------
45,844,133 49,221,129 0.3
Banking 55,680 Bayerische Vereinsbank AG 1,339,965 3,590,295 0.0
Capital Goods 369,636 Kloeckner-Werke AG 17,229,762 23,773,856 0.2
Chemicals 224,385 BASF AG 7,802,958 7,595,984 0.1
419,934 Bayer AG 15,484,588 15,764,735 0.1
101,451 Henkel KGaA 4,390,556 5,266,582 0.0
241,131 Hoechst AG 7,984,916 8,472,526 0.1
--------------- --------------- ------
35,663,018 37,099,827 0.3
<PAGE>
Engineering & 32,565 Philipp Holzmann AG 12,268,030 7,118,033 0.1
Construction
Metals/Steel 169,415 Thyssen AG 36,439,456 35,484,574 0.2
Retail 29,472 Karstadt AG 10,289,552 9,936,734 0.1
Telecommunications 197,100 Deutsche Telekom AG 3,748,649 3,446,557 0.0
Total Common Stocks in
Germany 162,822,565 169,671,005 1.2
</TABLE>
Merrill Lynch Global Allocation Fund, Inc., January 31, 1998
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Shares Percent of
COUNTRY Industries Held Common Stocks Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
Hong Kong Agriculture 31,924,000 C.P. Pokphand Co. Ltd.
(Ordinary) $ 11,031,647 $ 5,487,066 0.0%
Banking 900,737 HSBC Holdings PLC 14,386,653 19,963,349 0.2
Multi-Industry 6,554,500 Hutchison Whampoa Ltd. 42,966,372 38,540,934 0.3
Total Common Stocks in
Hong Kong 68,384,672 63,991,349 0.5
Indonesia Paper & Pulp 4,671,800 Asia Pacific Resources
International Holdings Ltd.
(NY Registered Shares)(USD) 25,834,218 4,671,800 0.0
1,070,000 Asia Pulp & Paper Company
Ltd. (ADR)++ (USD) 12,305,000 11,301,875 0.1
--------------- --------------- ------
38,139,218 15,973,675 0.1
Tobacco 19,327,000 P.T. Hanjaya Mandala
Sampoerna (Foreign) 28,087,780 8,734,317 0.1
Total Common Stocks in
Indonesia 66,226,998 24,707,992 0.2
Ireland Building & 631,423 CRH PLC (GBP) 6,857,511 7,450,112 0.1
Construction
Total Common Stocks in
Ireland 6,857,511 7,450,112 0.1
<PAGE>
Italy Banking 3,130,440 Istituto Bancario San Paolo
di Torino S.p.A. 19,845,879 34,127,553 0.2
1,813,400 Istituto Mobiliare Italiano
S.p.A. (Ordinary) 13,339,979 25,013,107 0.2
--------------- --------------- ------
33,185,858 59,140,660 0.4
Multi-Industry 56,018,454 MontEdison S.p.A. 42,935,994 53,498,679 0.4
Telecommunications 3,958,000 Telecom Italia Mobile S.p.A. 1,395,818 18,866,934 0.1
3,751,300 Telecom Italia Mobile
S.p.A.--RISP 3,831,835 11,107,190 0.1
5,198,888 Telecom Italia S.p.A. 12,145,121 35,999,391 0.3
8,322,588 Telecom Italia S.p.A.--RISP 15,895,748 41,170,347 0.3
--------------- --------------- ------
33,268,522 107,143,862 0.8
Total Common Stocks in
Italy 109,390,374 219,783,201 1.6
Japan Automobiles & 3,282,000 Suzuki Motor Corp. 30,510,247 30,285,827 0.2
Equipment
Beverages 1,570,000 Chukyo Coca-Cola Bottling
Co., Ltd. 16,445,371 11,268,239 0.1
663,000 Hokkaido Coca-Cola Bottling
Co., Ltd. 8,836,164 5,229,119 0.0
790,000 Kinki Coca-Cola Bottling
Co., Ltd. 11,999,955 9,159,240 0.1
1,243,000 Mikuni Coca-Cola Bottling
Co., Ltd. 17,391,669 15,195,599 0.1
1,426,480 Sanyo Coca-Cola Bottling
Co., Ltd. 17,533,066 12,600,817 0.1
--------------- --------------- ------
72,206,225 53,453,014 0.4
Capital Goods 2,736,000 Fuji Heavy Industries, Ltd. 11,273,188 10,142,125 0.1
12,900,000 Kawasaki Heavy
Industries, Ltd. 35,297,925 34,490,890 0.3
7,875,000 Mitsubishi Heavy
Industries, Inc. 44,268,610 33,726,043 0.2
--------------- --------------- ------
90,839,723 78,359,058 0.6
Chemicals 34,000 Shin-Etsu Chemical Co., Ltd. 657,132 756,211 0.0
Consumer Products 50,000 Amway Japan Limited
(Premium Exchangeable
Participating Shares)(USD) 721,750 640,625 0.0
<PAGE>
Electrical 1,124,000 Chudenko Corp. 30,032,358 27,127,060 0.2
Construction 1,386,000 Kinden Corporation 21,348,708 17,381,024 0.1
34,000 Taihei Dengyo Kaisha, Ltd. 637,020 137,298 0.0
--------------- --------------- ------
52,018,086 44,645,382 0.3
Electrical Equipment 788,000 Murata Manufacturing
Co., Ltd. 25,168,052 22,871,204 0.1
Electronics 1,299,000 Hitachi Ltd. 9,381,584 10,245,287 0.1
Financial Services 9,387,000 Daiwa Securities Co., Ltd. 46,956,803 43,162,876 0.3
928,000 Kokusai Securities Co., Ltd. 6,296,169 7,392,381 0.1
879,000 Nomura Securities Co., Ltd. 11,893,928 11,785,630 0.1
1,720,000 Wako Securities Co., Ltd. 4,377,152 3,472,829 0.0
--------------- --------------- ------
69,524,052 65,813,716 0.5
Industrial 28,000 Miura Kogyo Co., Ltd. 466,635 293,714 0.0
14,500 Nitto Kohki Co., Ltd. 488,740 186,411 0.0
--------------- --------------- ------
955,375 480,125 0.0
Insurance 743,000 Chiyoda Fire & Marine
Insurance Co., Ltd. 2,796,009 2,754,239 0.0
2,897,000 Dai-Tokyo Fire & Marine
Insurance Co., Ltd. 17,990,037 11,607,193 0.1
125,000 Dowa Fire & Marine
Insurance Co., Ltd. 441,340 462,379 0.0
3,743,000 Fuji Fire & Marine
Insurance Co., Ltd. 13,980,452 9,564,887 0.1
4,865,000 Koa Fire & Marine
Insurance Co., Ltd. 24,748,402 22,830,468 0.2
765,000 Mitsui Marine & Fire
Insurance Co., Ltd. 5,730,161 4,320,057 0.0
3,508,000 Nichido Fire & Marine
Insurance Co., Ltd. 20,622,267 22,659,926 0.2
4,816,000 Nippon Fire & Marine
Insurance Co., Ltd. 20,479,413 20,511,397 0.2
999,000 Nisshin Fire & Marine
Insurance Co., Ltd. 2,688,731 2,647,401 0.0
7,315,000 Sumitomo Marine & Fire
Insurance Co., Ltd. 46,067,731 47,135,855 0.3
2,713,000 Tokio Marine & Fire
Insurance Co., Ltd. 28,580,732 30,170,597 0.2
5,000,000 Yasuda Fire & Marine
Insurance Co., Ltd. 25,976,040 28,038,489 0.2
--------------- --------------- ------
210,101,315 202,702,888 1.5
<PAGE>
Office Equipment 1,612,000 Canon, Inc. 23,455,745 39,158,924 0.3
Packaging & 1,103,000 Toyo Seikan Kaisha, Ltd. 25,118,395 18,268,791 0.1
Containers
Pharmaceuticals 1,261,000 Sankyo Pharmaceuticals
Co., Ltd. 28,124,373 32,919,868 0.2
384,000 Taisho Pharmaceuticals Co. 7,984,458 9,631,043 0.1
--------------- --------------- ------
36,108,831 42,550,911 0.3
Restaurants 647,000 Mos Food Services, Inc. 12,121,005 8,164,682 0.1
618,000 Ohsho Food Service Corp. 10,180,663 5,946,526 0.0
--------------- --------------- ------
22,301,668 14,111,208 0.1
Retail Stores 460,000 Ito Yokado Co., Ltd. 21,319,319 24,162,789 0.2
100,000 Sangetsu Co., Ltd. 3,160,832 1,332,913 0.0
--------------- --------------- ------
24,480,151 25,495,702 0.2
Total Common Stocks
in Japan 693,548,331 649,838,873 4.7
Mexico Finance 6,054 Grupo Financiero Inbursa,
S.A. de C.V. (ADR)++ (USD) 121,464 93,837 0.0
Foods 700,000 Grupo Industrial Maseca
(ADR)++ (USD) 7,969,925 7,962,500 0.1
Multi-Industry 433,800 Grupo Carso, S.A. de C.V.
(ADR)++ (USD) 3,832,850 4,771,800 0.0
Telecommunications 433,800 Global Telecommunications
Solutions, Inc.
(ADR)++ (USD) 2,060,550 2,765,475 0.0
Total Common Stocks in Mexico 13,984,789 15,593,612 0.1
</TABLE>
Merrill Lynch Global Allocation Fund, Inc., January 31, 1998
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Shares Percent of
COUNTRY Industries Held Common Stocks Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
Netherlands Building Products 500,000 Chicago Bridge & Iron
Company N.V. (NY Registered
Shares)(USD) $ 8,322,525 $ 7,312,500 0.1%
Chemicals 143,576 Akzo N.V. 17,876,528 25,992,027 0.2
288,070 European Vinyls Corp.
International N.V. 11,384,340 5,170,308 0.0
--------------- --------------- ------
29,260,868 31,162,335 0.2
Electronics 557,765 Philips Electronics N.V. 26,702,807 37,662,327 0.3
Distribution
Forest Products 1,824,457 Koninklijke KNP N.V. 40,980,634 45,843,741 0.3
Insurance 958,493 Internationale Nederlanden
Groep N.V. 15,908,091 43,891,215 0.3
Miscellaneous-- 10,000 Koninklijke Ten Cate N.V. 501,699 405,045 0.0
Manufacturing
Steel 161,800 Ispat International N.V. 4,382,262 3,500,500 0.0
332,509 Ispat International N.V.
(NY Registered Shares)(USD) 7,856,989 7,190,507 0.1
--------------- --------------- ------
12,239,251 10,691,007 0.1
Telecommunications 548,341 Royal PTT Nederland N.V. 19,445,388 23,699,822 0.2
Transportation 111,846 Koninklijke Pakhoed N.V. 4,339,539 3,445,171 0.0
Total Common Stocks in the
Netherlands 157,700,802 204,113,163 1.5
New Zealand Natural Gas 1,477,104 Natural Gas Corporation
Suppliers Holdings Limited 1,043,960 1,864,179 0.0
Total Common Stocks in
New Zealand 1,043,960 1,864,179 0.0
Norway Banking 4,785,400 Christiania Bank Og
Kreditkasse 10,697,335 17,484,545 0.1
2,434,000 Den Norske Bank ASA 7,189,721 10,658,964 0.1
--------------- --------------- ------
17,887,056 28,143,509 0.2
<PAGE>
Oil & Gas Producers 781,330 Saga Petroleum ASA 11,845,630 12,212,629 0.1
Total Common Stocks
in Norway 29,732,686 40,356,138 0.3
Philippines Multi-Industry 5,279,600 Ayala Corporation 1,948,253 2,230,817 0.0
Total Common Stocks in
the Philippines 1,948,253 2,230,817 0.0
Portugal Telecommunications 41,000 Telecel-Comunicacaoes
Pessoais, S.A. 2,073,605 5,254,103 0.0
Total Common Stocks in Portugal 2,073,605 5,254,103 0.0
South Korea Steel 524,760 Pohang Iron & Steel Co.,
Ltd. (ADR)++ (USD) 22,205,189 28,640,848 0.2
Telecommunications 2,893 SK Telecom Co., Ltd. 1,016,559 1,517,455 0.0
1,006,587 SK Telecom Co., Ltd.
(ADR)++ (USD) 5,226,630 8,807,636 0.1
--------------- --------------- ------
6,243,189 10,325,091 0.1
Utilities--Electric 200,000 Korea Electric Power
Corporation (ADR)++ (USD) 2,429,353 2,907,895 0.0
Total Common Stocks in
South Korea 30,877,731 41,873,834 0.3
Spain Insurance 66,778 Mapfre S.A. 1,272,758 1,775,231 0.0
Manufacturing 173,000 Grupo Fosforera Espanola S.A. 1,501,871 279,068 0.0
Utilities--Electric 1,235,325 Endesa S.A. 20,999,424 23,832,893 0.2
Total Common Stocks in Spain 23,774,053 25,887,192 0.2
Sweden Appliances 222,953 Electrolux AB 'B' Free 9,775,237 16,250,058 0.1
Automotive & 43,916 Scania AB (Warrants)(a) 60,444 33,308 0.0
Equipment
Industrial 119,420 SKF AB 'A' 2,217,257 2,326,957 0.0
Insurance 310,815 Skandia Forsakring AB Free 8,514,650 16,214,235 0.1
Metals/Steel 1,227,828 Avesta Sheffield AB 10,687,487 7,646,858 0.1
Multi-Industry 192,784 Svedala Industri AB Free 2,531,671 3,185,884 0.0
Paper & Forest 411,853 Mo och Domsjo AB (Class B) 10,072,522 10,742,534 0.1
Products 885,017 Stora Kopparbergs
Bergslags AB 9,945,034 11,187,411 0.1
--------------- --------------- ------
20,017,556 21,929,945 0.2
<PAGE>
Total Common Stocks
in Sweden 53,804,302 67,587,245 0.5
Switzerland Electronic Components 69,850 Societe Suisse pour la
Microelectronique et
l'Horlogerie AG (Registered) 9,809,595 8,978,149 0.1
Financial Services 34,954 CS Holdings AG (Registered) 3,513,437 5,562,798 0.0
Machinery 10,866 Saurer AG (Registered) 5,396,777 8,982,717 0.1
Multi-Industry 113,649 Oerlikon-Buehrle Holding Ltd. 11,749,979 17,452,525 0.1
Photographic Services 2,340 Fotolabo S.A. 974,087 660,114 0.0
Total Common Stocks in
Switzerland 31,443,875 41,636,303 0.3
Thailand Holding Company 1,373,300 BEC World Public Co.,
Ltd. (Foreign) 8,876,272 6,827,412 0.1
Total Common Stocks in
Thailand 8,876,272 6,827,412 0.1
United Kingdom Airlines 952,687 British Airways PLC 8,050,483 8,017,938 0.1
Banking 899,577 HSBC Holdings PLC (GBP) 27,212,308 23,521,420 0.2
1,567,126 National Westminster
Bank PLC 19,619,793 28,042,921 0.2
--------------- --------------- ------
46,832,101 51,564,341 0.4
Chemicals 931,433 Imperial Chemical
Industries PLC 14,227,006 14,285,357 0.1
1,470,000 Inspec Group PLC 4,431,923 5,092,821 0.0
--------------- --------------- ------
18,658,929 19,378,178 0.1
Computers 194,026 Misys PLC 2,613,715 7,403,755 0.0
Energy & Related 724,323 Energy Group PLC 7,684,595 8,895,420 0.1
6,250 Energy Group PLC
(ADR)++ (USD) 226,417 307,031 0.0
--------------- --------------- ------
7,911,012 9,202,451 0.1
Environmental 1,240,000 Waste Management
International PLC
(ADR)++ (USD) 11,399,133 7,595,000 0.0
Food & Beverage 1,756,839 Allied Domecq PLC 12,616,881 15,704,514 0.1
650,505 Bass PLC 8,302,679 10,311,636 0.1
631,110 Matthew Clark PLC 6,157,510 1,681,117 0.0
--------------- --------------- ------
27,077,070 27,697,267 0.2
<PAGE>
Holding Company 10,579,223 BTR PLC 35,874,337 28,353,249 0.2
Manufacturing-- 4,731,768 LucasVarity PLC 15,226,664 16,006,596 0.1
Automotive Supplies
Merchandising 1,023,673 Smith (W.H.) Group PLC
(Class A) 6,255,529 7,452,709 0.0
Metals & Mining 858,223 Rio Tinto PLC 12,434,329 10,967,613 0.1
Multi-Industry 6,250 Hanson PLC (ADR)++ (USD) 353,583 139,063 0.0
</TABLE>
Merrill Lynch Global Allocation Fund, Inc., January 31, 1998
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Shares Percent of
COUNTRY Industries Held Common Stocks Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
United Kingdom Retail/Food 1,413,909 Safeway PLC $ 7,880,903 $ 8,872,743 0.1%
(concluded) 1,087,750 Sainsbury (J.) PLC 6,746,292 8,834,677 0.1
--------------- --------------- ------
14,627,195 17,707,420 0.2
Retail Stores 691,675 Signet Group PLC
(ADR)++ (USD) 2,194,907 11,326,178 0.1
Steel 3,766,219 British Steel PLC 8,745,693 8,124,277 0.1
Telecommunications 1,598,955 Cable & Wireless PLC 10,985,936 15,207,731 0.1
917,333 Ionica PLC 4,556,654 1,424,150 0.0
2,290,000 Ionica PLC 10,286,966 3,461,644 0.0
1,526,667 Ionica PLC (Warrants)(a) -- 24,949 0.0
3,793,680 Unilever PLC 18,775,014 29,866,726 0.2
--------------- --------------- ------
44,604,570 49,985,200 0.3
Tobacco 2,787,884 B.A.T. Industries PLC 23,744,589 25,422,257 0.2
12,500 Imperial Tobacco Group
PLC (ADR)++ (USD) 238,391 178,906 0.0
--------------- --------------- ------
23,982,980 25,601,163 0.2
Total Common Stocks in
the United Kingdom 286,842,230 306,522,398 2.2
<PAGE>
United States Aerospace & Defense 9,565 Raytheon Company (Class A) 307,416 489,011 0.0
Apparel 700,000 Fruit of the Loom, Inc.
(Class A) 18,572,062 16,800,000 0.1
100,000 Liz Claiborne, Inc. 2,016,276 4,050,000 0.1
--------------- --------------- ------
20,588,338 20,850,000 0.2
Automobiles 165,308 Ford Motor Company 4,906,268 8,430,708 0.0
150,000 General Motors Corp. 5,384,509 8,690,625 0.1
--------------- --------------- ------
10,290,777 17,121,333 0.1
Automotive 400,000 Collins & Aikman Group Inc. 2,792,538 3,325,000 0.0
Banking 129,500 Banknorth Group, Inc. 1,865,422 8,061,375 0.1
407,100 CoreStates Financial Corp. 14,288,085 31,143,150 0.2
100,000 First Chicago NBD Corporation 3,109,530 7,462,500 0.1
856,300 First Commerce Corp. 21,587,648 59,619,888 0.4
950,000 Golden State Bancorp Inc. 13,232,157 31,409,375 0.2
770,194 Golden State Bancorp Inc.
(Warrants)(a) -- 16,655,445 0.1
700,000 KeyCorp 20,571,401 45,500,000 0.3
865,800 Mellon Bank Corp. 17,209,199 52,272,675 0.4
350,825 Oriental Financial Group 6,174,520 10,349,338 0.1
760,000 Republic New York Corp. 33,998,213 82,745,000 0.6
--------------- --------------- ------
132,036,175 345,218,746 2.5
Broadcasting/Cable 49,450 People's Choice TV Corp.
(Warrants)(a) 226,458 495 0.0
Building Products 567,892 Flowserve Corporation 14,089,137 15,191,111 0.1
Business Data Systems 1,400,000 Information Resources, Inc. 16,553,312 19,250,000 0.1
Computer Software 1,300,000 Oracle Corporation 26,933,360 30,225,000 0.2
Chemicals 300,000 Geon Company (The) 5,955,557 6,375,000 0.1
Communication Equipment 532,000 ADC Telecommunications, Inc. 9,154,259 10,141,250 0.1
Computer Services 240,000 Electronic Data Systems Corp. 9,927,011 9,990,000 0.1
Computer Software 225,000 Boole & Babbage, Inc. 1,329,492 7,200,000 0.1
2,400,000 Borland International Corp. 33,535,053 18,150,000 0.1
2,300,000 Cabletron Systems, Inc. 34,233,860 33,206,250 0.2
--------------- --------------- ------
69,098,405 58,556,250 0.4
<PAGE>
Computers & 346,600 FileNet Corporation 3,895,371 11,091,200 0.1
Technology 1,092,300 Komag, Inc. 18,786,335 14,472,975 0.1
500,000 Stratus Computer, Inc. 9,130,512 21,093,750 0.1
--------------- --------------- ------
31,812,218 46,657,925 0.3
Construction & 300,000 Hovnanian Enterprises,
Housing Inc. (Class A) 2,795,933 2,681,250 0.0
Construction 617,000 TJ International, Inc. 10,970,379 15,039,375 0.1
Products
Consumer-- 90,770 Ascent Entertainment
Miscellaneous Group, Inc. 631,090 941,739 0.0
376,800 Department 56, Inc. 8,423,214 10,715,250 0.1
--------------- --------------- ------
9,054,304 11,656,989 0.1
Containers 1,008,000 Stone Container Corporation 12,596,036 12,852,000 0.1
Electronics 500,000 3Com Corporation 14,968,750 16,531,250 0.1
1,632,800 Checkpoint Systems, Inc. 18,248,762 28,063,750 0.2
1,189,600 MEMC Electronic
Materials, Inc. 23,152,380 20,074,500 0.1
1,000,300 Silicon Graphics, Inc. 15,253,605 15,504,650 0.1
1,000,000 Silicon Valley Group, Inc. 18,066,194 22,125,000 0.2
--------------- --------------- ------
89,689,691 102,299,150 0.7
Energy & Petroleum 929,400 Arch Coal, Inc. 25,080,244 23,932,050 0.2
300,000 Input/Output, Inc. 6,638,513 5,962,500 0.1
46,400 Mitchell Energy Development
Corp. (Class A) 675,717 1,235,400 0.0
174,350 Mitchell Energy Development
Corp. (Class B) 2,755,451 4,707,450 0.0
50,000 Murphy Oil Corp. 1,688,446 2,496,875 0.0
1,500,000 Occidental Petroleum Corp. 28,058,743 38,250,000 0.3
235,828 Plains Resources, Inc. 1,381,815 3,655,334 0.0
1,402,978 Santa Fe Energy Resources, Inc. 7,579,573 14,731,269 0.1
2,000,000 TransTexas Gas Corp. 30,359,821 34,125,000 0.3
500,000 USX-Marathon Group 8,761,976 16,781,250 0.1
--------------- --------------- ------
112,980,299 145,877,128 1.1
Fertilizers 164,700 IMC Global Inc. 5,248,656 5,311,575 0.0
Financial Services 163,600 American Capital
Strategies, Ltd. 2,454,000 2,924,350 0.0
<PAGE>
Forest Products 394,200 Deltic Timber Corporation 11,221,223 11,283,975 0.1
Gaming 1,235,000 Scientific Games Holdings
Corp. (c) 27,568,304 24,391,250 0.2
Health Care 2,200,000 Oxford Health Plans, Inc. 46,828,521 38,637,500 0.3
Cost
Containment
Healthcare Services 360,000 Advocat, Inc. 3,422,500 2,992,500 0.0
450,000 Baxter International, Inc. 9,088,023 25,059,375 0.2
1,400,000 Beverly Enterprises, Inc. 11,260,008 19,425,000 0.1
700,000 Humana, Inc. 13,206,455 14,043,750 0.1
728,160 PharMerica, Inc. 5,343,052 8,191,800 0.1
1,225,740 US Surgical Corp. 27,641,430 35,010,199 0.2
185,600 United Healthcare
Corporation 6,009,630 9,512,000 0.1
--------------- --------------- ------
75,971,098 114,234,624 0.8
</TABLE>
Merrill Lynch Global Allocation Fund, Inc., January 31, 1998
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Shares Percent of
COUNTRY Industries Held Common Stocks Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
United States Industrial 100,000 American Standard, Inc. $ 2,986,000 $ 4,006,250 0.0%
(continued) 15,000 Bar Technologies Ltd.
(Warrants)(a) 838,256 825,000 0.0
179,802 Cooper Industries, Inc. 6,534,892 9,540,744 0.1
2,827,500 Crown Packaging Holdings Ltd. 1,433,657 28,275 0.0
150,000 UNOVA, Inc. 1,930,066 2,437,500 0.0
--------------- --------------- ------
13,722,871 16,837,769 0.1
Insurance 350,000 Aetna Inc. 28,167,500 25,725,000 0.2
510,000 American General Corp. 13,187,448 28,751,250 0.2
114,000 Hartford Financial
Services Group Inc. 4,188,594 10,260,000 0.1
486,300 Horace Mann Educators, Inc. 5,742,770 15,622,388 0.1
200,200 Lincoln National Corp. 7,212,416 15,152,638 0.1
1,947,500 Risk Capital Holdings Inc. 34,313,406 43,331,875 0.3
--------------- --------------- ------
92,812,134 138,843,151 1.0
<PAGE>
Manufacturing 200,000 ITT Industries Inc. 4,175,065 6,200,000 0.0
Metals & Mining 349,765 Alumax, Inc. 7,240,312 12,176,194 0.1
305,000 Aluminum Co. of America 13,814,815 23,294,375 0.2
1,400,000 Battle Mountain Gold Company 8,838,297 7,875,000 0.1
624,500 Commonwealth Industries Inc. 11,725,173 8,743,000 0.1
600,000 Lukens Inc. 9,944,824 17,737,500 0.1
600,000 National Steel Corp. 5,445,549 7,725,000 0.0
850,000 Newmont Mining Corporation 31,553,907 24,225,000 0.2
400,000 Nucor Corporation 18,363,133 19,050,000 0.1
132,800 Reynolds Metals Co. 5,801,771 8,374,700 0.1
--------------- --------------- ------
112,727,781 129,200,769 1.0
Multi-Industry 90,000 Loews Corp. 3,984,675 8,983,125 0.1
Multimedia & 312,800 U S West Media Group 4,725,974 9,286,250 0.1
Telecommunications 20,000 Unifi Communications Inc.
(Warrants)(a) 1,166,800 400,000 0.0
--------------- --------------- ------
5,892,774 9,686,250 0.1
Natural Resources 210,519 Freeport-McMoRan Copper &
Gold Inc. (Class B) 3,665,657 3,091,998 0.0
Oil & Gas Producers 300,000 Rowan Companies Inc. 7,299,870 7,912,500 0.1
245,410 Texaco Inc. 6,627,069 12,776,658 0.1
400,000 Tom Brown, Inc. 7,009,985 7,000,000 0.0
100,000 Transocean Offshore Inc. 3,863,220 3,975,000 0.0
--------------- --------------- ------
24,800,144 31,664,158 0.2
Oil Services 200,000 Diamond Offshore
Drilling Inc. 5,150,000 8,937,500 0.1
2,500,000 Noble Drilling Corp. 16,505,558 66,875,000 0.5
200,000 Tidewater Inc. 9,007,960 8,175,000 0.0
150,000 Western Atlas, Inc. 7,083,342 9,346,875 0.1
--------------- --------------- ------
37,746,860 93,334,375 0.7
Paper 160,200 Boise Cascade Corporation 4,225,000 5,126,400 0.1
265,316 Fort James Corporation 4,971,450 11,392,006 0.1
240,000 Louisiana-Pacific Corp. 5,273,733 4,815,000 0.0
--------------- --------------- ------
14,470,183 21,333,406 0.2
Pharmaceuticals/ 125,000 Alteon, Inc. 983,321 1,093,750 0.0
Biotechnology
<PAGE>
Pharmaceuticals/ 500,000 Roberts Pharmaceutical
Prescription Corporation 4,876,176 5,781,250 0.0
Photography 160,000 Eastman Kodak Company 8,746,145 10,440,000 0.1
Pollution Control 1,246,900 Waste Management Inc. 31,997,538 29,302,150 0.2
Publishing 100,000 Gannett Co., Inc. 2,359,153 6,050,000 0.0
350,000 Reader's Digest Association,
Inc. (Class A) 8,229,300 8,378,125 0.1
--------------- --------------- ------
10,588,453 14,428,125 0.1
Real Estate 2,574,465 Catellus Development Corp. 22,351,219 48,753,931 0.4
Real Estate 872,900 Ambassador Apartments Inc. 14,168,183 18,003,563 0.1
Investment 446,800 Imperial Credit Commercial
Trusts Mortgage Investment Corp. 6,702,000 6,590,300 0.1
661,300 Mid-America Realty
Investments 6,444,676 6,819,656 0.1
1,839,825 Prime Retail, Inc. 21,062,587 27,252,408 0.2
400,000 Taubman Centers, Inc. 3,641,641 5,200,000 0.0
50,000 Walden Residential
Properties, Inc. 1,418,750 1,525,000 0.0
920,000 Walden Residential
Properties, Inc.
(Warrants)(a) 1,125,068 1,035,000 0.0
--------------- --------------- ------
54,562,905 66,425,927 0.5
Restaurants 1,500,000 Brinker International, Inc. 16,515,025 25,125,000 0.2
500,000 Buffets, Inc. 5,071,633 4,531,250 0.0
2,100,000 Darden Restaurants Inc. 15,622,713 26,512,500 0.2
--------------- --------------- ------
37,209,371 56,168,750 0.4
Retail 206,500 Coinstar Inc. 311,636 1,755,250 0.0
850,000 Heilig-Meyers Company 11,224,247 11,050,000 0.1
--------------- --------------- ------
11,535,883 12,805,250 0.1
Retail/Automotive 1,530,000 Ugly Duckling Corporation 20,563,125 9,562,500 0.1
Retail Stores 608,500 Baker (J.), Inc. 10,187,765 2,738,250 0.0
416,900 Buttrey Food & Drug
Stores Co. 3,241,636 6,383,781 0.1
1,110,000 Filene's Basement Corp. 10,092,619 4,821,562 0.0
700,000 Limited, Inc. (The) 12,951,591 18,550,000 0.1
400,000 Sotheby's Holdings, Inc.
(Class A) 4,879,559 7,775,000 0.1
600,000 Toys 'R' Us, Inc. 13,456,814 16,087,500 0.1
--------------- --------------- ------
54,809,984 56,356,093 0.4
<PAGE>
Savings Banks 75,000 Downey Savings & Loan
Association 796,372 2,109,375 0.0
477,405 Sovereign Bancorp, Inc. 1,552,137 8,861,830 0.1
--------------- --------------- ------
2,348,509 10,971,205 0.1
Semiconductors 1,500,000 Cypress Semiconductor
Corporation 11,242,350 14,812,500 0.1
Telecommunications 642,800 360 Communications Company 9,933,360 14,101,425 0.1
300,000 AirTouch Communications, Inc. 6,812,219 13,162,500 0.1
27,750 American Telecasting
Inc. (Warrants)(a) 0 277 0.0
32,037 CS Wireless Systems, Inc. 123,681 320 0.0
1,375,800 CellNet Data Systems, Inc. 12,252,498 13,156,087 0.1
120,363 CellNet Data Systems,
Inc. (Warrants)(a) 13,716,570 2,407,260 0.0
185,700 Comsat Corp. 3,677,677 4,630,894 0.0
800,000 DSC Communications Corp. 12,249,518 16,000,000 0.1
500,000 Frontier Corporation 8,023,581 13,031,250 0.1
2,004,800 General Communication,
Inc. (Class A) 14,264,925 13,908,300 0.1
1,094,100 Geotek Communications, Inc. 5,883,636 683,812 0.0
3,000,000 Geotek Communications,
Inc. (Warrants)(a) 14,200,634 30,000 0.0
</TABLE>
Merrill Lynch Global Allocation Fund, Inc., January 31, 1998
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Shares Percent of
COUNTRY Industries Held Common Stocks Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
United States Telecommunications 1,600,000 Glenayre Technologies,
(concluded) (concluded) Inc. $ 21,915,406 $ 21,000,000 0.2%
1,611,800 PLD Telekom Inc. 10,028,238 8,864,900 0.1
830,000 QUALCOMM, Inc. 42,390,777 42,952,500 0.3
225,000 Telegroup Inc. 2,250,000 3,543,750 0.0
47,000 United USN Inc.
(Class A)(Warrants)(a) 5,840,131 5,734,000 0.1
14,113 United USN Inc.
(Warrants)(a) 1,084,937 1,072,588 0.0
1,255,000 Western Wireless
Corporation 15,610,218 25,100,000 0.2
18,315 Wireless One, Inc.
(Warrants)(a) 18,315 4,579 0.0
--------------- --------------- ------
200,276,321 199,384,442 1.5
<PAGE>
Textiles 2,825,200 Burlington Industries, Inc. 37,451,653 40,259,100 0.3
Transportation 753,200 J.B. Hunt Transport
Services, Inc. 10,544,852 16,570,400 0.1
Utilities 4,044,727 Citizens Utilities
Company (Class B) 35,740,884 38,424,905 0.3
1,486,200 Potomac Electric Power
Company 33,198,884 36,969,225 0.2
--------------- --------------- ------
68,939,768 75,394,130 0.5
Utilities-- 1,250,000 Allegheny Power System, Inc. 27,315,551 38,281,250 0.3
Electric & Gas 115,650 Atmos Energy Corp. 1,445,257 3,296,025 0.0
47,570 BayCorp Holdings, Ltd. 2,549,753 312,178 0.0
603,100 Central and South West
Corporation 11,630,764 16,321,394 0.1
100,000 Consolidated Edison
Company, Inc. 2,923,495 4,131,250 0.0
4,512,285 El Paso Electric Company 23,689,496 32,714,066 0.2
1,780,000 Entergy Corp. 47,516,856 50,952,500 0.4
400,000 FPL Group, Inc. 12,109,102 22,950,000 0.2
2,177,900 Houston Industries, Inc. 43,848,083 56,897,637 0.4
1,500,000 Niagara Mohawk Power Corp. 23,789,306 16,218,750 0.1
1,257,100 Texas Utilities Co. 40,643,415 51,698,237 0.4
1,148,800 Unicom Corporation 27,549,620 35,612,800 0.3
--------------- --------------- ------
265,010,698 329,386,087 2.4
Total Common Stocks in
the United States 1,925,179,820 2,527,650,878 18.4
Total Investments in
Common Stocks 4,386,970,466 5,159,683,272 37.5
Equity Closed-End Funds
Austria Financial Services 320,000 Austria Fund (USD) 2,642,432 3,380,000 0.1
Total Equity Closed-End
Funds in Austria 2,642,432 3,380,000 0.1
Indonesia Financial Services 25,600 Jakarta Growth Fund (USD) 158,080 99,200 0.0
Total Equity Closed-End
Funds in Indonesia 158,080 99,200 0.0
Ireland Financial Services 150,000 Irish Investment Fund,
Inc. (USD) 1,086,041 2,718,750 0.0
Total Equity Closed-End
Funds in Ireland 1,086,041 2,718,750 0.0
<PAGE>
Italy Financial Services 150,000 Italy Fund (USD) 1,198,520 1,818,750 0.0
Total Equity Closed-End
Funds in Italy 1,198,520 1,818,750 0.0
South Korea Financial Services 125,000 The Fidelity Advisor Korea
Fund (USD) 1,088,750 687,500 0.0
200,000 Korea Equity Fund (USD) 1,369,598 825,000 0.0
1,400,528 Korea Fund, Inc. (USD) 19,847,163 12,692,285 0.1
200,000 Korean Investment Fund,
Inc. (USD) 1,561,000 1,012,500 0.0
Total Equity Closed-End
Funds in South Korea 23,866,511 15,217,285 0.1
Total Investments in Equity
Closed-End Funds 28,951,584 23,233,985 0.2
Preferred Stocks
Australia Publishing 600,000 News Corporation Limited
(The) (ADR)++ (USD) 10,451,056 12,637,500 0.1
Total Preferred Stocks
in Australia 10,451,056 12,637,500 0.1
Austria Banking 203,400 Bank Austria Finance Inc. 6,298,337 10,907,438 0.1
Total Preferred Stocks
in Austria 6,298,337 10,907,438 0.1
Germany Chemicals 494,411 Henkel KGaA 20,929,927 29,448,524 0.2
Multi-Industry 450,000 RWE AG 8,725,424 21,024,590 0.2
Total Preferred Stocks
in Germany 29,655,351 50,473,114 0.4
New Zealand Financial Services 3,085,700 Brierly Investments, Ltd.
(9% Convertible) 1,988,414 1,974,323 0.0
Total Preferred Stocks in
New Zealand 1,988,414 1,974,323 0.0
Norway Financial Services 175,000 A/S Eksportfinans
(8.70% Convertible)(USD) 4,377,500 4,790,625 0.0
Total Preferred Stocks
in Norway 4,377,500 4,790,625 0.0
Portugal Banking 906,528 BCP International Bank
(8% Convertible)(USD) 55,597,712 74,788,560 0.6
Total Preferred Stocks
in Portugal 55,597,712 74,788,560 0.6
<PAGE>
Spain Banking 225,000 Santander Overseas Bank
(8% Convertible, Series D)
(USD) 5,463,250 5,793,750 0.0
Total Preferred Stocks
in Spain 5,463,250 5,793,750 0.0
United States Banking 870,000 California Federal Bank
(9.125%, Series A) 21,735,500 23,163,750 0.2
55,000 California Federal Bank
(10.625%, Series B) 5,500,000 6,012,187 0.0
--------------- --------------- ------
27,235,500 29,175,937 0.2
Cable Television 1,000,000 Diva Systems Corp.
(Convertible, Series C) 8,410,000 11,500,000 0.1
1,000,000 Diva Systems Corp.
(Convertible, Series D) 11,440,000 11,500,000 0.1
--------------- --------------- ------
19,850,000 23,000,000 0.2
Financial Services 619,900 Golden State Bancorp Inc.
(8.75% Convertible, Series E) 15,070,337 49,282,050 0.4
Natural Resources 150,000 Cyprus Amax Minerals Co.
(Convertible, Series A) 9,188,313 5,137,500 0.0
348,700 Freeport-McMoRan Copper &
Gold, Inc. (Convertible) 7,918,834 7,344,494 0.1
219,000 Freeport-McMoRan Inc.
(Convertible--Gold) 7,703,330 5,037,000 0.0
--------------- --------------- ------
24,810,477 17,518,994 0.1
</TABLE>
Merrill Lynch Global Allocation Fund, Inc., January 31, 1998
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Shares Percent of
COUNTRY Industries Held Preferred Stocks Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
United States Real Estate 400,000 Crown American Realty
(concluded) Investment Trust (11%, Series A) $ 20,000,000 $ 21,475,000 0.2%
Trusts 139,200 First Union Real Estate
Investments (8.40%
Convertible, Series A) 3,480,000 5,533,200 0.0
350,000 National Health Investors,
Inc. (8.50% Convertible) 8,750,000 13,037,500 0.1
717,500 Prime Retail, Inc. (10.50%) 16,366,161 19,372,500 0.1
1,078,000 Walden Residential
Properties, Inc. (9.20%,
Series S) 26,269,636 28,432,250 0.2
--------------- --------------- ------
74,865,797 87,850,450 0.6
<PAGE>
Steel 2,442,500 Rouge/Worthington
Industries, Inc.
(Convertible, Series DECS) 38,015,300 32,973,750 0.3
Utilities 77,600 Citizens Utilities Company
(5% Convertible) 3,398,931 3,734,500 0.0
Total Preferred Stocks
in the United States 203,246,342 243,535,681 1.8
Total Investments in
Preferred Stocks 317,077,962 404,900,991 3.0
<CAPTION>
Currency Face
Denomination Amount Fixed-Income Securities
<S> <S> <S> <C> <S> <C> <C> <C>
Argentina Banking Banco Rio de la Plata S.A.:
USD 45,000,000 8.75% due 12/15/2003 36,900,950 45,675,000 0.3
USD 30,000,000 (Class 3), 8.50% due
7/15/1998 30,225,000 30,150,000 0.2
--------------- --------------- ------
67,125,950 75,825,000 0.5
Government City of Buenos Aires:
Obligations USD 38,000,000 11.25% due 4/11/2007 37,715,000 39,710,000 0.3
USD 5,179,000 11.25% due 4/11/2007 5,099,529 5,412,055 0.0
Republic of Argentina (p):
USD 146,500,000 9.75% due 9/19/2027 117,455,000 145,401,250 1.1
USD 98,400,000 Floating Rate Bonds,
Series L, 6.678%
due 3/31/2005 (d) 72,934,800 88,068,000 0.6
USD 80,000,000 Floating Rate Discount
Notes, 6.875% due
3/31/2023 54,824,556 67,104,000 0.5
USD 85,000,000 Global Bonds, 11.375%
due 1/30/2017 82,988,125 94,987,500 0.7
USD 30,000,000 Par 'L' Bonds, 5.50%
due 3/31/2023 18,718,027 22,612,500 0.2
--------------- --------------- ------
389,735,037 463,295,305 3.4
Total Fixed-Income
Securities in Argentina 456,860,987 539,120,305 3.9
Australia Mining USD 2,500,000 Murrin Murrin Holdings
Property, 9.375% due 8/31/2007 2,500,000 2,400,000 0.0
Total Fixed-Income Securities
in Australia 2,500,000 2,400,000 0.0
<PAGE>
Brazil Banking USD 16,500,000 Banco National de
Desevolvimento Economico e
Social, 9% due 9/24/2007 14,685,000 14,685,000 0.1
Broad- BRE 5,000,000 Abril S.A., 12% due 10/25/2003 5,006,250 5,075,000 0.0
casting/
Media
Government USD 35,000,000 Brazil Exit Bonds, 6% due
Obligations 9/15/2013 (p) 19,963,270 28,567,000 0.2
Republic of Brazil:
USD 3,094,000 Floating Rate Bonds,
6.687% due 1/01/2001 (d) 2,111,589 2,939,300 0.0
USD 15,000,000 Global Bonds, 10.125%
due 5/15/2027 (p) 10,840,000 14,137,500 0.1
USD 10,000,000 Par 'L' Bonds, 5% due
4/15/2024 (p) 6,100,000 7,331,250 0.1
--------------- --------------- ------
39,014,859 52,975,050 0.4
Industrial USD 11,000,000 Global Communication
Participitoes, 10.625% due
6/21/2004 10,596,250 10,972,500 0.1
Metals USD 35,000,000 CSN Panama Iron S.A.,
9.125% due 6/01/2007 32,850,000 29,575,000 0.2
Natural Companhia Vale Do Rio Doce:
Resources USD 5,000,000 10% due 4/02/2004 4,993,860 5,012,500 0.1
USD 4,500,000 10% due 4/02/2004 4,207,500 4,511,250 0.0
--------------- --------------- ------
9,201,360 9,523,750 0.1
Utilities USD 32,250,000 Espirito Santo--Escelsa,
10% due 7/15/2007 31,726,875 28,299,375 0.2
Total Fixed-Income
Securities in Brazil 143,080,594 151,105,675 1.1
Canada Cable/ CAD 7,545,000 Rogers Cablesystem Inc.,
Telecom- 9.65% due 1/15/2014 4,397,424 5,576,649 0.1
munications CAD 5,000,000 Rogers Communications Inc.,
Convertible Bonds,
7.50% due 9/01/1999 3,394,000 3,242,198 0.0
--------------- --------------- ------
7,791,424 8,818,847 0.1
Industrial USD 28,000,000 Ainsworth Lumber Company,
--Services 12.50% due 7/15/2007 27,226,640 27,930,000 0.2
<PAGE>
Paper & CAD 2,000,000 MacMillan Bloedel Limited,
Forest Convertible Bonds,
Products 5% due 5/01/2007 1,024,416 1,177,115 0.0
Real Estate CAD 16,501,370 First Place Tower, Inc.,
Convertible Bonds, 10.64%
due 12/15/2015 (e) 26,453,947 42,913,500 0.3
Total Fixed-Income Securities
in Canada 62,496,427 80,839,462 0.6
China Multi- USD 20,250,000 Guangdong Investment Finance
Industry Inc., Convertible Bonds,
1% due 7/07/2002 18,306,875 15,440,625 0.1
USD 23,500,000 Shanghai Investment Holding
Co., Convertible Bonds,
1% due 6/12/2002 21,441,250 20,210,000 0.2
--------------- --------------- ------
39,748,125 35,650,625 0.3
Utilities USD 2,750,000 Huaneng Power International
--Electric PLC, Convertible Bonds,
1.75% due 5/21/2004 2,512,500 2,543,750 0.0
Total Fixed-Income
Securities in China 42,260,625 38,194,375 0.3
France Automobiles FRF 5,500 Peugeot S.A., Convertible
Bonds, 2% due 1/01/2001 992,341 1,072,383 0.0
Banking ECU 2,000,000 Credit Local de France,
0% due 10/16/2001 (b) 2,028,494 1,812,139 0.0
FRF 58,000 Societe Generale de
France S.A., Convertible Bonds,
3.50% due 1/01/2000 (g) 7,499,838 7,432,018 0.1
--------------- --------------- ------
9,528,332 9,244,157 0.1
Industrial FRF 30,000 Alcatel Alsthom,
Convertible Bonds, 2.50%
due 1/01/2004 3,926,887 4,832,083 0.0
Insurance FRF 35,500 Finaxa, Convertible Bonds,
3% due 1/01/2001 9,060,172 11,285,458 0.1
Real Estate FRF 230,000 Societe Fonciere Lyonnaise
S.A., Convertible Bonds,
4% due 10/31/2004 31,087,057 32,358,983 0.2
Total Fixed-Income Securities
in France 54,594,789 58,793,064 0.4
<PAGE>
Germany Banking DEM 2,310,000 Commerzbank AG, Floating
Rate Convertible Bonds,
0% due 6/15/2001 (b) 1,556,456 3,913,115 0.0
USD 5,000,000 Landes Kredit Bank, 7.875%
due 4/15/2004 4,972,068 5,513,050 0.0
USD 15,500,000 Nordeutsche Landesbank
Girozentrale, Convertible
Bonds, 3% due 2/11/2003 14,205,625 14,415,000 0.1
--------------- --------------- ------
20,734,149 23,841,165 0.1
</TABLE>
Merrill Lynch Global Allocation Fund, Inc., January 31, 1998
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Currency Face Percent of
COUNTRY Industries Denomination Amount Fixed-Income Securities Cost Value Net Assets
<S> <S> <S> <C> <S> <C> <C> <C>
Germany Building USD 41,100,000 Tarkett AG, 9% due
(concluded) Materials 3/01/2002 $ 39,413,750 $ 41,973,375 0.3%
Financial USD 5,875,000 Veba International
Services Finance (with Warrants),
6% due 4/06/2000 (a) 2,965,841 5,801,562 0.0
Government Bundesrepublik Deutscheland:
Obligations DEM 31,000,000 5.75% due 8/20/1998 22,444,131 17,143,169 0.1
DEM 215,500,000 7.375% due 1/03/2005 140,126,980 134,834,699 1.0
--------------- --------------- ------
162,571,111 151,977,868 1.1
Government DEM 55,000,000 Freie Hansestadt Hamburg,
Obligations 6.08% due 11/29/2018 31,730,765 31,331,967 0.2
--Regional DEM 64,000,000 Land Baden-Weurttemberg,
6.20% due 11/22/2013 37,148,769 36,973,115 0.3
DEM 170,500,000 Land Hessen, 6% due
11/29/2013 (c) 98,586,862 96,896,175 0.7
DEM 110,000,000 Mecklenberg-Vorpommern,
6.15% due 6/16/2023 (c) 61,012,437 62,032,787 0.5
DEM 134,950,000 Nordrhein-Westfalen, 6.125%
due 12/21/2018 (c) 77,420,913 76,102,951 0.6
Rheinland-Pfalz:
DEM 33,000,000 5.75% due 2/24/2014 18,324,663 18,483,607 0.1
DEM 64,000,000 6.08% due 11/29/2018 36,935,547 36,126,776 0.3
DEM 47,000,000 Sachsen-Anhalt, 6% due
1/10/2014 26,915,615 26,402,186 0.2
--------------- --------------- ------
388,075,571 384,349,564 2.9
<PAGE>
Industrial USD 1,000,000 Siemens Capital Corp.
(with Warrants),
8% due 6/24/2002 (a) 1,318,750 1,912,500 0.0
Total Fixed-Income
Securities in Germany 615,079,172 609,856,034 4.4
Hong Kong Banking USD 9,000,000 Bank of East Asia,
Convertible Bonds, 2% due
7/19/2003 (n) 10,886,150 8,145,000 0.1
Multi- USD 22,000,000 First Pacific Company Ltd.,
Industry Convertible Bonds, 2% due
3/27/2002 20,608,663 14,630,000 0.1
Real Estate USD 24,980,000 Hysan Development Company
Limited, Convertible
Bonds, 6.75% due
6/01/2000 (n) 29,762,300 23,606,100 0.2
USD 18,000,000 Sino Land Company Ltd.,
Convertible Bonds, 5% due
2/26/2001 (n) 17,321,875 6,840,000 0.0
--------------- --------------- ------
47,084,175 30,446,100 0.2
Total Fixed-Income
Securities in Hong Kong 78,578,988 53,221,100 0.4
India Chemicals Indian Petrochemicals Ltd.,
Convertible Bonds:
USD 23,500,000 2.50% due 3/11/2002 23,996,563 22,560,000 0.2
USD 35,850,000 2.50% due 3/11/2002
(Regulation S) 35,960,030 34,416,000 0.2
Total Fixed-Income
Securities in India 59,956,593 56,976,000 0.4
Indonesia Paper & USD 37,000,000 APP Global Finance (V)
Forest Ltd., Convertible Bonds,
Products 2% due 7/25/2000 37,406,500 30,895,000 0.2
USD 19,500,000 APP International Finance,
11.75% due 10/01/2005 19,500,000 17,062,500 0.2
USD 3,965,000 PT Indah Kiat Pulp & Paper,
8.875% due 11/01/2000 3,300,862 3,290,950 0.0
Total Fixed-Income
Securities in Indonesia 60,207,362 51,248,450 0.4
Italy Government USD 5,000,000 Republic of Italy, 8.75%
Obligations due 2/08/2001 5,373,050 5,457,500 0.0
Total Fixed-Income
Securities in Italy 5,373,050 5,457,500 0.0
<PAGE>
Japan Banking JPY 1,990,000,000 Asahi Bank, Ltd., Convertible
Bonds, 0.50% due
8/01/2007 11,572,219 12,830,862 0.1
USD 9,000,000 Bank of Tokyo--Mitsubishi,
Convertible Bonds, 3%
due 11/30/2002 9,033,125 9,675,000 0.1
JPY 9,111,000,000 Fuji International Finance
Trust, Convertible Bonds,
0.25% due 2/01/2002 57,881,008 41,318,913 0.3
JPY 5,820,000,000 Sumitomo Bank International
Finance NV, Convertible
Bonds, 0.75% due 5/31/2001 48,151,086 50,263,428 0.4
--------------- --------------- ------
126,637,438 114,088,203 0.9
Beverages JPY 1,268,000,000 Kinki Coca-Cola Bottling
Co., Ltd., 0.85% due
12/30/2003 11,282,608 10,500,828 0.1
JPY 1,536,000,000 Sanyo Coca-Cola Bottling
Inc., #1 Convertible Bonds,
0.90% due 6/30/2003 13,820,349 10,721,350 0.1
JPY 479,000,000 Shikoku Coca-Cola Bottling
Co., Ltd., #1 Convertible
Bonds, 2.40% due 3/29/2002 4,558,416 3,985,685 0.0
--------------- --------------- ------
29,661,373 25,207,863 0.2
Capital JPY 500,000,000 Kawasaki Heavy Industries,
Goods Convertible Bonds, 0.50%
due 9/30/1998 4,566,161 3,933,670 0.0
Chemicals USD 4,700,000 Shin-Etsu Chemical Co.,
Ltd., Convertible Bonds
(with Warrants), 3.375%
due 8/08/2000 (a) 3,274,060 4,394,500 0.1
Shin-Etsu Chemical Co., Ltd.,
Convertible Bonds:
JPY 148,000,000 #5, 1.30% due 3/31/1999 1,577,446 1,936,525 0.0
JPY 301,000,000 #6, 0.40% due 9/30/2005 2,987,802 3,561,006 0.0
--------------- --------------- ------
7,839,308 9,892,031 0.1
Electrical JPY 1,204,000,000 Matsushita Electric Works,
Equipment Ltd., #9 Convertible Bonds,
1% due 11/30/2005 12,091,160 10,986,892 0.1
Electronics JPY 650,000,000 Matsushita Electric Industrial
Co., Ltd., #5 Convertible
Bonds, 1.30% due 3/29/2002 6,133,347 6,469,753 0.0
<PAGE>
Government JPY 9,145,000,000 Japanese Government Bond,
Obligations #112 (10-Year Issue),
5% due 9/21/1998 78,634,451 74,110,636 0.5
Insurance JPY 456,000,000 Mitsui Marine & Fire
Insurance Co., Ltd.,
#3 Convertible Bonds,
0.70% due 3/31/2003 3,786,983 3,769,130 0.0
JPY 117,000,000 Nichido Fire & Marine
Insurance Co., Ltd., #5
Convertible Bonds, 1%
due 3/31/2003 1,109,381 969,848 0.0
Nisshin Fire & Marine
Insurance Co., Ltd.,
Convertible Bonds:
JPY 900,000,000 #1, 0.65% due 3/31/2004 7,132,646 6,054,894 0.1
JPY 1,572,000,000 #2, 0.75% due 3/31/2006 12,292,248 10,538,686 0.1
Sumitomo Marine & Fire
Insurance Co., Ltd.,
Convertible Bonds:
JPY 300,000,000 #3, 1.10% due 3/29/2002 2,522,005 2,839,341 0.0
JPY 1,527,000,000 #4, 1.20% due 3/31/2004 13,104,977 14,452,244 0.1
JPY 588,000,000 Yasuda Fire & Marine
Insurance Co., Ltd., #3
Convertible Bonds, 0.60%
due 3/30/2001 4,903,719 4,776,717 0.0
--------------- --------------- ------
44,851,959 43,400,860 0.3
Pharma- JPY 4,000,000,000 Yamanouchi Pharmaceutical
ceuticals Co., Ltd., Convertible
Bonds, 1.625% due
3/31/2000 (n)** 41,915,632 39,119,804 0.3
Total Fixed-Income
Securities in Japan 352,330,829 327,209,712 2.4
</TABLE>
Merrill Lynch Global Allocation Fund, Inc., January 31, 1998
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Currency Face Percent of
COUNTRY Industries Denomination Amount Fixed-Income Securities Cost Value Net Assets
<S> <S> <S> <C> <S> <C> <C> <C>
Malaysia Telecommuni- Telekom Malaysia BHD,
Convertible Bonds:
cations USD 3,000,000 4% due 10/03/2004 $ 2,523,750 $ 2,137,500 0.0%
USD 55,600,000 4% due 10/03/2004
(Regulation S) 48,467,588 39,615,000 0.3
Total Fixed-Income
Securities in Malaysia 50,991,338 41,752,500 0.3
Mexico Government USD 4,000,000 United Mexican States,
Obligations 11.50% due 5/15/2026 (p) 4,240,000 4,850,000 0.1
Oil & Related Petroleos Mexicanos:
USD 45,150,000 8.625% due 12/01/2023 25,007,000 42,102,375 0.3
USD 15,000,000 9.50% due 9/15/2027 14,449,470 15,075,000 0.1
--------------- --------------- ------
39,456,470 57,177,375 0.4
Total Fixed-Income
Securities in Mexico 43,696,470 62,027,375 0.5
New Zealand Government NZD 40,000,000 New Zealand Government
Obligations Bond, 6.50% due 2/15/2000 23,718,195 23,110,894 0.1
NZD 90,000,000 New Zealand Index Linked
Notes, 4.50% due 2/15/2016 54,320,246 51,033,780 0.4
Total Fixed-Income
Securities in New Zealand 78,038,441 74,144,674 0.5
Philippines Multi- AC International Finance:
Industry PHP 19,500,000 0% due 12/08/2000 (b) 15,076,710 14,332,500 0.1
PHP 16,500,000 0.50% due 7/30/2002 14,744,375 14,190,000 0.1
Total Fixed-Income
Securities in the Philippines 29,821,085 28,522,500 0.2
Russia Telecommuni- PLD Telekom, Inc.,
cations Convertible Bonds (j):
USD 74,500,000 0/14% due 6/01/2004 (b) 66,800,370 74,313,750 0.6
USD 18,700,000 9% due 6/01/2006 18,756,250 18,419,500 0.1
Total Fixed-Income Securities
in Russia 85,556,620 92,733,250 0.7
<PAGE>
Singapore Multi- Keppel Corporation Limited,
Industry Convertible Bonds:
USD 3,470,000 1.50% due 5/02/2001 2,859,038 2,741,300 0.0
USD 48,500,000 2% due 8/12/2002 48,492,500 40,740,000 0.3
USD 7,500,000 2% due 8/12/2002
(Regulation S) 6,797,500 6,300,000 0.0
--------------- --------------- ------
58,149,038 49,781,300 0.3
Retail USD 12,000,000 Dairy Farm International
Holdings Ltd. (Convertible
Preferred), 6.50% due
5/10/2049 9,525,875 9,360,000 0.1
Total Fixed-Income
Securities in Singapore 67,674,913 59,141,300 0.4
South Africa Metals ZAL 22,685,000 Samancor Ltd., Convertible
Bonds, 7% due 6/30/2004 21,854,094 21,153,762 0.2
Total Fixed-Income
Securities in South Africa 21,854,094 21,153,762 0.2
South Korea Banking Export Import Bank Korea:
USD 4,000,000 6.50% due 2/10/2002 2,780,000 3,320,000 0.0
USD 21,000,000 Series D, 6.50% due
11/15/2006 16,459,400 17,640,000 0.2
Koram Bank Ltd., Convertible
Bonds:
USD 1,500,000 0.25% due 8/26/2007 1,447,500 1,155,000 0.0
USD 3,600,000 0.25% due 8/26/2007
(Regulation S) 3,393,875 2,772,000 0.0
--------------- --------------- ------
24,080,775 24,887,000 0.2
Electronics Samsung Electronics Co.,
Convertible Bonds (b):
USD 6,000,000 0% due 12/31/2007 5,786,250 5,265,000 0.0
USD 50,500,000 0% due 12/31/2007
(Regulation S) 47,119,532 43,430,000 0.3
--------------- --------------- ------
52,905,782 48,695,000 0.3
Energy Ssangyong Oil Refining,
Related Convertible Bonds:
USD 10,685,000 3% due 12/31/2004 7,887,437 3,793,175 0.0
USD 16,535,000 3.75% due 12/31/2008 17,448,950 9,424,950 0.1
--------------- --------------- ------
25,336,387 13,218,125 0.1
<PAGE>
Multi- CHF 5,250,000 Daewoo Corporation,
Industry Convertible Bonds,
0.125% due 12/31/2001 3,434,100 3,072,149 0.0
Steel Pohang Iron & Steel
Industries Co., Ltd.:
USD 6,485,000 7.375% due 5/15/2005 4,474,650 5,674,375 0.0
USD 10,000,000 7.125% due 11/01/2006 7,612,500 8,500,000 0.1
--------------- --------------- ------
12,087,150 14,174,375 0.1
Utilities-- Korea Electric Power Corp.,
Electric Global Bonds:
USD 34,315,000 5% due 8/01/2001 33,069,731 30,368,775 0.2
USD 10,000,000 6.375% due 12/01/2003 6,700,000 8,450,000 0.1
--------------- --------------- ------
39,769,731 38,818,775 0.3
Total Fixed-Income
Securities in South Korea 157,613,925 142,865,424 1.0
Switzerland Chemicals USD 24,945,000 Ciba-Geigy Corp.,
Convertible Bonds,
6.25% due 3/15/2016 25,632,050 25,942,800 0.2
Total Fixed-Income
Securities in Switzerland 25,632,050 25,942,800 0.2
Taiwan Industrial USD 13,800,000 GVC Corporation, Convertible
Bonds, 0% due 5/21/2002 (b) 13,794,000 14,628,000 0.1
Total Fixed-Income Securities
in Taiwan 13,794,000 14,628,000 0.1
United Cable/ USD 14,000,000 Comcast UK Cable Partners
Kingdom Telecom- Ltd., 0/11.20% due
munications 11/15/2007 (b) 9,693,344 11,515,000 0.1
Financial GBP 11,600,000 Liberty International
Services Holdings PLC, Convertible
Bonds, 5.50% due 4/30/2009 14,179,895 19,714,989 0.2
Food & GBP 13,500,000 Allied-Lyons PLC,
Beverage Convertible Bonds,
6.75% due 7/07/2008 21,002,665 22,900,045 0.2
Government United Kingdom Treasury
Obligations Gilt:
GBP 60,000,000 9.75% due 8/27/2002 112,868,044 111,190,968 0.8
GBP 20,000,000 9.50% due 10/25/2004 37,627,645 38,526,265 0.3
--------------- --------------- ------
150,495,689 149,717,233 1.1
<PAGE>
Industrial USD 4,655,000 HIH Capital Ltd.,
Convertible Bonds (Bearer),
7.50% due 9/25/2006 3,031,037 3,584,350 0.0
Multi- GBP 10,375,000 English China Clays PLC,
Industry Convertible Bonds,
6.50% due 9/30/2003 16,480,047 16,446,180 0.1
Telecom- USD 39,000,000 Ionica PLC, 0/15% due
munications 5/01/2007 (b)(m) 21,054,003 15,600,000 0.1
USD 20,250,000 Millicom International
Cellular S.A., 0/13.50%
due 6/01/2006 (b) 13,039,208 15,491,250 0.1
USD 6,000,000 TeleWest Communications
PLC, 0% due 10/01/2007 (b) 4,618,401 4,770,000 0.0
--------------- --------------- ------
38,711,612 35,861,250 0.2
Textiles GBP 2,500,000 Coats Viyella PLC,
Convertible Bonds, Series B,
6.25% due 8/09/2003 3,535,704 3,789,301 0.0
Total Fixed-Income
Securities in the
United Kingdom 257,129,993 263,528,348 1.9
</TABLE>
Merrill Lynch Global Allocation Fund, Inc., January 31, 1998
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Currency Face Percent of
COUNTRY Industries Denomination Amount Fixed-Income Securities Cost Value Net Assets
<S> <S> <S> <C> <S> <C> <C> <C>
United Agricultural USD 12,000,000 Sun World International,
States Inc., 11.25% due 4/15/2004 $ 12,000,000 $ 13,110,000 0.1%
Banking USD 14,250,000 Ocwen Federal Bank, 12%
due 6/15/2005 14,250,000 15,746,250 0.1
Bio- USD 7,200,000 Cetus Corporation (Euro),
technology Convertible Bonds,
5.25% due 5/21/2002 5,220,250 6,912,000 0.1
Consumer--- USD 14,000,000 Zeta Consumer Products,
Products 11.25% due 11/30/2007 14,000,000 14,420,000 0.1
Finance USD 8,500,000 Constellation Finance,
9.80% due 1/01/2001 8,500,000 8,542,500 0.1
USD 4,500,000 Hawthorne Financial Corp.,
12.50% due 12/31/2004 4,500,000 4,511,250 0.0
--------------- --------------- ------
13,000,000 13,053,750 0.1
<PAGE>
Financial USD 9,000,000 Emergent Group Inc., Series
Services B, 10.75% due 9/15/2004 8,934,375 8,550,000 0.1
Food & USD 15,000,000 Tom's Food Inc., 10.50%
Beverage due 11/01/2004 15,000,000 15,037,500 0.1
Healthcare USD 17,500,000 American Retirement Corp.,
Convertible Bonds,
5.75% due 10/01/2002 17,500,000 18,725,000 0.1
USD 1,000,000 Novacare, Inc., Convertible
Bonds, 5.50% due 1/15/2000 857,500 960,000 0.0
--------------- --------------- ------
18,357,500 19,685,000 0.1
Holding USD 10,000,000 American Banknote Corp.,
Company 11.25% due 12/01/2007 10,000,000 9,975,000 0.1
Home- USD 32,500,000 Beazer Homes USA, Inc.,
building & 9% due 3/01/2004 30,597,000 32,987,500 0.2
Construction
Industrial USD 8,000,000 Bar Technologies Ltd.,
13.50% due 4/01/2001 7,412,450 8,760,000 0.1
USD 21,750,000 Crown Packaging Enterprises,
0/14% due 8/01/2006 (b) 8,906,337 1,087,500 0.0
USD 68,500,000 International Semi-Tech
Microelectronics, Inc.,
0/11.50% due 8/15/2003 (b) 50,392,858 23,290,000 0.2
USD 4,000,000 WMX Technologies, Inc.,
Convertible Bonds, 2% due
1/24/2005 3,497,545 3,340,000 0.0
--------------- --------------- ------
70,209,190 36,477,500 0.3
Mining USD 10,500,000 AEI Holding Co., 10% due
11/15/2007 10,570,000 10,946,250 0.1
Paper USD 9,000,000 Bear Island Paper Co. LLC,
Products 10% due 12/01/2007 9,000,000 9,090,000 0.1
Oil & Related PDV America, Inc.:
USD 35,000,000 7.25% due 8/01/1998 34,856,150 35,000,000 0.3
USD 10,000,000 7.75% due 8/01/2000 10,062,500 10,100,000 0.1
--------------- --------------- ------
44,918,650 45,100,000 0.4
Real Estate USD 23,080,719 RTC Commercial Mortgage,
Class C, 8.25%
due 12/25/2020 (d) 22,727,177 23,080,719 0.2
<PAGE>
Real Estate USD 25,500,000 Alexander Haagen Properties,
Investment Inc., Exchangeable
Trusts Debentures, 7.25% due
12/27/2003 25,291,250 25,340,625 0.2
USD 4,500,000 Capstone Capital Corp.,
Convertible Bonds, 6.55% due
3/14/2002 4,127,172 4,455,000 0.0
USD 7,000,000 Centerpoint Properties Corp.,
Convertible Bonds,
8.22% due 1/15/2004 7,000,000 12,906,250 0.1
USD 30,000,000 First Union Real Estate,
8.875% due 10/01/2003 29,756,100 30,675,000 0.2
USD 25,000,000 First Washington Realty
Exchangeable Debentures,
8.25% due 6/27/1999 25,000,000 28,000,000 0.2
Health & Retirement
Properties Trust,
Convertible Bonds:
USD 40,000,000 7.25% due 10/01/2001 40,000,000 44,200,000 0.3
USD 15,000,000 7.50% due 10/01/2003 15,000,000 16,575,000 0.1
LTC Properties, Inc.,
Convertible Bonds:
USD 10,000,000 8.25% due 1/01/1999 10,000,000 13,012,500 0.1
USD 9,000,000 8.50% due 1/01/2001 9,000,000 11,711,250 0.1
USD 25,000,000 Leperq Corporate Income
Fund, Exchangeable
Secured Notes, 8% due
3/17/2004 25,000,000 29,500,000 0.2
USD 12,500,000 Liberty Property Trust,
Convertible Bonds, 8.20% due
7/01/2001 12,500,000 17,125,000 0.1
Malan Realty Investors, Inc.,
Convertible Bonds:
USD 27,000,000 8.50% due 7/01/2003 27,000,000 28,316,250 0.2
USD 4,750,000 9.50% due 7/15/2004 3,859,375 4,981,562 0.0
USD 9,415,000 Meditrust, Convertible Bonds,
8.54% due 7/01/2000 9,602,637 11,168,544 0.1
USD 5,000,000 Mid-Atlantic Realty Trust,
Convertible Bonds,
7.625% due 9/15/2003 4,875,000 6,537,500 0.0
USD 22,000,000 National Health Investors,
Convertible Bonds,
7.75% due 1/01/2001 22,000,000 28,600,000 0.2
USD 17,000,000 Nationwide Health Properties
Inc., Convertible Bonds,
6.25% due 1/01/1999 16,800,000 19,507,500 0.1
USD 31,500,000 Omega Healthcare Investors
Inc., Convertible Bonds,
8.50% due 2/01/2001 31,552,500 43,666,875 0.3
USD 5,500,000 Sizeler Property Investors,
Inc., Convertible Bonds,
8% due 7/15/2003 5,505,000 5,431,250 0.0
--------------- --------------- ------
323,869,034 381,710,106 2.5
<PAGE>
Retail-- USD 9,000,000 Krystal Co. (The), 10.25%
Food due 10/01/2007 9,082,500 9,405,000 0.1
Retail-- USD 25,000,000 Coinstar Inc., 0/13% due
Miscellaneous 10/01/2006 (b)(k) 20,030,068 20,125,000 0.1
Savings USD 21,400,000 First Federal Financial
Bank Corporation, 11.75%
due 10/01/2004 21,401,250 23,968,000 0.2
Semi- USD 5,500,000 Cypress Semiconductor Corp.,
conductors Convertible Bonds, 6%
due 10/01/2002 4,727,500 4,846,875 0.0
Telecommuni- USD 15,500,000 Call Net Enterprises Inc.,
cations 0/13.25% due 12/01/2004 (b) 12,304,578 14,376,250 0.1
USD 120,363,000 CellNet Data Systems, Inc.,
0/14% due 10/01/2007 (b)(h) 50,300,618 57,774,240 0.4
Centennial Communications
Corp. (b):
USD 11,925,186 0% due 7/01/2000 10,027,713 9,897,904 0.1
USD 40,000,000 0% due 1/01/2003 20,556,190 20,400,000 0.2
Geotek Communications, Inc.:
USD 24,650,000 Convertible Bonds, 12%
due 2/15/2001 23,973,875 17,501,500 0.1
USD 104,000,000 Series B, 0/15% due
7/15/2005 (b) 59,959,181 54,080,000 0.4
USD 43,750,000 International Cabletel, Inc.,
Series B, 0/11.50% due
2/01/2006 (b) 31,643,648 35,109,375 0.3
Telegroup Inc.:
USD 5,000,000 0/10.50% due 11/01/2004 (b) 3,971,867 4,112,500 0.0
USD 22,000,000 8% due 4/15/2005 22,000,000 27,720,000 0.2
USD 12,697,035 USN Communications Inc.,
Series B, 0% due
1/13/2004 (b) 9,790,444 9,840,202 0.1
USD 20,000,000 Unifi Communications, Inc.,
14% due 3/01/2004 (g) 18,928,348 17,700,000 0.1
United International
Holdings, Inc. (b)(f):
USD 41,650,000 0% due 11/15/1999 31,678,829 36,756,125 0.3
USD 55,000,000 0/10.75% due 2/15/2008 32,487,950 32,487,950 0.2
</TABLE>
Merrill Lynch Global Allocation Fund, Inc., January 31, 1998
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Currency Face Percent of
COUNTRY Industries Denomination Amount Fixed-Income Securities Cost Value Net Assets
<S> <S> <S> <C> <S> <C> <C> <C>
United States Telecommuni- United USN, Inc. (b):
(concluded) cations USD 47,000,000 0/14% due 9/15/2003 (i) $ 29,233,822 $ 34,780,000 0.2%
(concluded) USD 35,000,000 Convertible Bonds,
0/9% due 9/30/2004 30,233,556 28,962,500 0.2
USD 15,500,000 Winstar Communications
Inc., 0/14% due
10/15/2005 (b) 10,051,208 12,942,500 0.1
--------------- --------------- ------
397,141,827 414,441,046 3.0
Trans- USD 10,625,000 Eletson Holdings Inc.,
portation-- 9.25% due 11/15/2003 10,558,437 10,996,875 0.1
Shipping USD 19,250,000 Teekay Shipping Corporation,
8.32% due 2/01/2008 18,252,500 19,875,625 0.1
--------------- --------------- ------
28,810,937 30,872,500 0.2
Trucking USD 23,000,000 Ameritruck Distribution,
12.25% due 11/15/2005 22,678,075 22,540,000 0.2
US Government Federal National Mortgage
& Agency Association (d):
Obligations USD 6,436,841 8% due 10/01/2024 6,146,178 6,690,260 0.1
USD 12,762,691 8% due 12/01/2024 12,537,350 13,265,158 0.1
US Treasury Inflation
Indexed Notes:
USD 120,000,000 3.625% due 7/15/2002 119,354,400 120,520,278 0.9
USD 125,000,000 3.375% due 1/15/2007 123,217,917 124,733,885 0.9
US Treasury Notes & Bonds:
USD 341,100,000 6% due 5/31/1998 339,137,636 341,724,213 2.5
USD 150,000,000 6.125% due 8/31/1998 (c) 149,890,625 150,586,500 1.1
USD 200,000,000 5.75% due 12/31/1998 198,992,025 200,670,000 1.5
USD 750,000,000 5.875% due 2/28/1999 747,746,094 753,750,000 5.5
USD 300,000,000 5.875% due 2/15/2000 294,964,844 302,976,000 2.2
USD 100,000,000 6% due 8/15/2000 100,078,125 101,516,000 0.7
USD 55,000,000 7.875% due 8/15/2001 53,943,600 59,305,400 0.4
--------------- --------------- ------
2,146,008,794 2,175,737,694 15.9
<PAGE>
Video CAI Wireless Systems, Inc.:
Services/ USD 2,000,000 13% due 2/20/1998 2,000,000 2,000,000 0.0
Telecommuni- USD 25,000,000 13% due 2/20/1998 25,000,000 25,000,000 0.2
cations USD 94,025,000 12.25% due 9/15/2002 63,879,250 23,976,375 0.2
USD 122,500,000 CS Wireless Systems, Inc.,
0/11.375% due 3/01/2006
(b)(l) 63,814,422 27,562,500 0.2
USD 17,000,000 Heartland Wireless
Communications Inc., 14%
due 10/15/2004 12,885,000 5,100,000 0.0
USD 53,000,000 People's Choice T.V.
Corporation, 0/13.125%
due 6/01/2004 (b)(o) 27,103,388 15,370,000 0.1
Wireless One Inc.:
USD 27,750,000 13% due 10/15/2003 18,688,125 9,157,500 0.1
USD 16,250,000 0/13.50% due
8/01/2006 (b) 3,795,130 2,275,000 0.0
--------------- --------------- ------
217,165,315 110,441,375 0.8
Total Fixed-Income
Securities in the
United States 3,489,699,442 3,468,259,065 25.2
Venezuela Finance USD 8,443,000 CANTV Finance Ltd., 9.25%
due 2/01/2004 8,231,925 8,443,000 0.1
Total Fixed-Income Securities
in Venezuela 8,231,925 8,443,000 0.1
Total Investments in
Fixed-Income Securities 6,263,053,712 6,277,563,675 45.6
Short-Term Securities
Indonesia Certificates UBS Singapore:
of IDR 90,000,000,000 11.50% due 2/12/1998 12,000,000 8,645,192 0.2
Deposit IDR 45,000,000,000 14% due 2/13/1998 5,769,231 4,326,923 0.0
IDR 50,000,000,000 12% due 2/27/1998 8,928,571 4,802,885 0.0
IDR 45,000,000,000 11% due 3/03/1998 3,488,372 4,320,433 0.0
IDR 45,000,000,000 13% due 3/03/1998 2,960,526 4,320,433 0.0
IDR 50,000,000,000 17% due 3/06/1998 3,571,429 4,807,693 0.0
Total Short-Term Securities
in Indonesia 36,718,129 31,223,559 0.2
<PAGE>
United States Commercial USD 15,247,000 AlliedSignal Inc., 5.46%
Paper* due 2/11/1998 15,221,563 15,221,563 0.1
USD 25,000,000 Ameritech Capital Funding
Corp., 5.45% due 3/04/1998 24,878,889 24,878,889 0.2
USD 84,000,000 Associates Corp. of North
America, 5.72% due 2/13/1998 83,826,493 83,826,493 0.6
USD 50,000,000 BBV Finance (Delaware), Inc.,
5.48% due 2/06/1998 49,954,333 49,954,333 0.4
USD 50,000,000 Bank of Montreal, 5.45% due
2/18/1998 49,863,750 49,863,750 0.4
USD 50,000,000 CIT Group Holdings, Inc.
(The), 5.75% due 2/06/1998 49,952,083 49,952,083 0.4
Caisse des Depots et
Consignations:
USD 40,000,000 5.48% due 2/24/1998 39,853,867 39,853,867 0.3
USD 50,000,000 5.48% due 2/27/1998 49,794,500 49,794,500 0.4
Ciesco, L.P.:
USD 35,000,000 5.42% due 3/06/1998 34,820,839 34,820,839 0.2
USD 65,000,000 5.45% due 3/10/1998 64,626,069 64,626,069 0.5
USD 25,000,000 Daimler-Benz AG, 5.44% due
3/17/1998 24,830,000 24,830,000 0.2
USD 100,000,000 Delaware Funding Corp., 5.48%
due 2/17/1998 99,741,222 99,741,222 0.7
USD 50,000,000 Deutsche Bank Financial, Inc.,
5.48% due 2/09/1998 49,931,500 49,931,500 0.4
Eiger Capital Corp.:
USD 32,000,000 5.78% due 2/03/1998 31,984,587 31,984,587 0.2
USD 23,000,000 5.50% due 2/17/1998 22,940,264 22,940,264 0.2
USD 45,000,000 5.47% due 2/26/1998 44,822,225 44,822,225 0.3
USD 100,000,000 Ford Motor Credit Co., 5.53%
due 2/05/1998 99,923,194 99,923,194 0.7
USD 19,000,000 France Telecom S.A., 5.75%
due 2/10/1998 18,969,653 18,969,653 0.1
USD 100,000,000 General Electric Capital PLC,
5.75% due 2/02/1998 99,968,056 99,968,056 0.7
USD 26,422,000 General Motors Acceptance
Corp., 5.63% due 2/02/1998 26,413,736 26,413,736 0.2
USD 21,500,000 KFW International Finance
Inc., 5.45% due 2/13/1998 21,457,687 21,457,687 0.1
Merck & Co., Inc.:
USD 40,000,000 5.44% due 2/17/1998 39,897,244 39,897,244 0.3
USD 49,350,000 5.44% due 2/25/1998 49,163,567 49,163,567 0.3
USD 50,000,000 MetLife Funding Corp., 5.47%
due 2/11/1998 49,916,431 49,916,431 0.4
USD 50,000,000 Morgan Stanley Group Inc.,
5.47% due 2/24/1998 49,817,667 49,817,667 0.4
National Australia Funding
(Delaware) Inc.:
USD 50,000,000 5.46% due 2/05/1998 49,962,083 49,962,083 0.4
USD 50,000,000 5.41% due 3/05/1998 49,752,042 49,752,042 0.3
Preferred Receivable
Funding Corp.:
USD 71,900,000 5.48% due 2/11/1998 71,779,607 71,779,607 0.5
USD 29,400,000 5.45% due 3/20/1998 29,186,360 29,186,360 0.2
USD 50,000,000 UBS Finance (Delaware) Inc.,
5.47% due 2/06/1998 49,954,417 49,954,417 0.4
--------------- --------------- ------
1,443,203,928 1,443,203,928 10.5
</TABLE>
<PAGE>
Merrill Lynch Global Allocation Fund, Inc., January 31, 1998
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<CAPTION>
Currency Face Percent of
COUNTRY Denomination Amount Short-Term Securities Cost Value Net Assets
<S> <S> <S> <C> <S> <C> <C> <C>
United States US Government Federal Home Loan
(concluded) Agency Mortgage Corp.:
Obligations* USD 22,000,000 5.37% due 2/12/1998 $ 21,960,620 $ 21,960,620 0.1%
USD 70,000,000 5.35% due 2/17/1998 69,823,153 69,823,153 0.5
USD 50,000,000 5.41% due 3/04/1998 49,759,556 49,759,556 0.4
USD 55,000,000 5.37% due 3/20/1998 54,606,200 54,606,200 0.4
--------------- --------------- ------
196,149,529 196,149,529 1.4
Total Short-Term
Investments in the
United States 1,639,353,457 1,639,353,457 11.9
Total Investments in
Short-Term Securities 1,676,071,586 1,670,577,016 12.1
Total Investments 12,672,125,310 13,535,958,939 98.4
<CAPTION>
OPTIONS Nominal Value Premiums
WRITTEN Covered by Options Issue Received
<S> <C> <S> <C> <C> <C>
Call Options 500,000 3Com Corporation, expiring
Written January 1999 at USD 35 (2,453,668) (3,125,000) (0.1)
532,000 ADC Telecommunications, Inc.,
expiring August 1998 at USD 20 (1,253,748) (1,729,000) (0.0)
150,000 Aetna, Inc., expiring April
1998 at USD 75 (914,219) (581,250) (0.0)
100,000 Aetna, Inc., expiring July
1998 at USD 80 (409,486) (450,000) (0.0)
50,000 J.B. Hunt Transport Corp.,
expiring August 1998 at USD 25 (104,747) (87,500) (0.0)
50,000 Nokia Corp., expiring July
1998 at USD 85 (348,488) (281,250) (0.0)
600,000 Oracle Corporation, expiring
June 1998 at USD 20 (1,763,191) (2,850,000) (0.0)
200,000 Oracle Corporation, expiring
January 1999 at USD 30 (493,983) (487,500) (0.0)
200,000 Oxford Healthcare Corp.,
expiring August 1998 at USD 15 (618,979) (925,000) (0.0)
50,000 QUALCOMM Inc., expiring April
1998 at USD 55 (310,990) (200,000) (0.0)
150,000 QUALCOMM Inc., expiring July
1998 at USD 60 (745,475) (787,500) (0.0)
50,000 QUALCOMM Inc., expiring July
1998 at USD 70 (167,244) (125,000) (0.0)
50,000 QUALCOMM Inc., expiring January
1999 at USD 80 (242,242) (187,500) (0.0)
250,000 Silicon Graphics, Inc.,
<PAGE> expiring August 1998 at USD 12.5 (554,981) (1,156,250) (0.0)
Total Options Written (10,381,441) (12,972,750) (0.1)
Total Investments, Net of Options Written $12,661,743,869 13,522,986,189 98.3
===============
Short Sales (Proceeds--$25,236,484)** (30,316,587) (0.2)
Unrealized Appreciation on Forward Foreign Exchange Contracts*** 5,534,480 0.1
Variation Margin on Financial Futures Contracts**** (9,180,379) (0.1)
Other Assets Less Liabilities 270,253,664 1.9
--------------- ------
Net Assets $13,759,277,367 100.0%
=============== ======
Net Asset Value: Class A--Based on net assets of $2,048,354,389 and
142,483,856 shares outstanding $ 14.38
===============
Class B--Based on net assets of $9,536,138,067 and
673,681,980 shares outstanding $ 14.16
===============
Class C--Based on net assets of $676,331,323 and
48,336,249 shares outstanding $ 13.99
===============
Class D--Based on net assets of $1,498,453,588 and
104,348,229 shares outstanding $ 14.36
===============
<FN>
++American Depositary Receipts (ADR).
*Commercial Paper and certain US Government Agency Obligations are
traded on a discount basis. The interest rates shown are the
interest rates in effect at January 31, 1998.
**Covered Short Sales entered into as of January 31, 1998 were as
follows:
Common
Shares Issue Value
1,248,000 Yamanouchi Pharmaceutical Co., Ltd. $ (30,316,587)
--------------
Total (Proceeds--$25,236,484) $ (30,316,587)
==============
***Forward Foreign Exchange Contracts sold as of January 31, 1998
were as follows:
<PAGE>
Unrealized
Foreign Expiration Appreciation
Currency Sold Date (Depreciation)
CHF 15,000,000 February 1998 $ 647,814
CHF 27,000,000 March 1998 50,966
ESP 2,500,000,000 February 1998 660,257
FRF 781,000,000 February 1998 1,090,816
FRF 215,000,000 March 1998 349,545
FRF 210,000,000 April 1998 330,856
GBP 39,000,000 February 1998 (155,064)
GBP 132,000,000 March 1998 (938,524)
JPY 18,000,000,000 February 1998 1,435,479
JPY 6,000,000,000 March 1998 782,181
NLG 100,500,000 February 1998 494,487
NLG 108,000,000 March 1998 573,318
NOK 85,000,000 March 1998 201,674
SEK 310,000,000 March 1998 10,675
------------
Total Unrealized Appreciation on Forward
Foreign Exchange Contracts--Net
(USD Commitment--$866,760,022) $ 5,534,480
============
****Financial Futures Contracts purchased as of January 31, 1998
were as follows:
Number of Expiration
Contracts Issue Exchange Date Value
375 Hang Seng Index Hang Seng February 1998 $ 22,631,817
2,983 Nikkei 225 OSAKA March 1998 391,961,353
------------
Total Financial Futures Contracts Purchased
(Total Contract Price--$410,361,363) $414,593,170
============
Financial Futures Contracts sold as of January 31, 1998 were as
follows:
Number of Expiration
Contracts Issue Exchange Date Value
280 Japanese Govern-
ment Bond Tokyo March 1998 $284,438,836
200 Standard & Poor's
500 Index NYSE March 1998 49,390,000
200 US Treasury Bond NYSE March 1998 22,743,750
------------
Total Financial Futures Contracts Sold
(Total Contract Price--$356,986,794) $356,572,586
============
<PAGE>
(a)Warrants entitle the Fund to purchase a predetermined number of
shares of stock/face amount of bonds at a predetermined price until
the expiration date.
(b)Represents a zero coupon or step bond. The interest rate on a
step bond represents the fixed rate of interest that will commence
its accrual on a predetermined date until maturity.
(c)All or a portion of security held as collateral in connection
with open financial futures contracts.
(d)Subject to principal paydowns as a result of prepayments or
refinancings of the underlying mortgage instruments. As a result,
the average life may be less than the original maturity.
(e)Each $10 face amount contains 40 shares of First Place Tower,
Inc.
(f)Each $1,000 face amount contains one warrant of United
International Holdings, Inc.
(g)Each $1,000 face amount contains one warrant of Unifi
Communications, Inc.
(h)Each $1,000 face amount contains four warrants of CellNet Data
Systems, Inc.
(i)Each $1,000 face amount countains one warrant of United USN, Inc.
(j)Each $1,000 face amount contains one warrant of PLD Telekom, Inc.
(k)Each $1,000 face amount contains one warrant of Coinstar, Inc.
(l)Each $1,000 face amount contains 1.1 shares of common stock of CS
Wireless Systems, Inc.
(m)Each $1,000 face amount contains one warrant of Ionica PLC.
(n)Securities held as collateral in connection with covered short
sales.
(o)Each $1,000 face amount contains one warrant of People's Choice
T.V. Corp.
(p)Represents a Brady Bond. Brady Bonds are securities which have
been issued to refinance commercial bank loans and other debt. The
risk associated with these instruments is the amount of any
uncollateralized principal or interest payments since there is a
high default rate of commercial bank loans by countries issuing
these securities.
</TABLE>
Merrill Lynch Global Allocation Fund, Inc., January 31, 1998
COMMON STOCK PORTFOLIO CHANGES
For the Quarter Ended January 31, 1998
<PAGE>
Additions
3Com Corporation
ADC Telecommunications, Inc.
Banco Frances del Rio de La Plata S.A.
(ADR)
British Airways PLC
Cabletron Systems, Inc.
Chicago Bridge & Iron Company N.V.
(NY Registered Shares)
Cypress Semiconductor Corporation
*FirstEnergy Corp.
Heilig-Meyers Company
Hitachi Ltd.
Hoechst AG
IMC Global Inc.
Input/Output, Inc.
Ispat International N.V.
*Lloyds TSB Group PLC
Normandy Mining Limited
Oracle Corporation
P.T. Hanjaya Mandala Sampoerna (Foreign)
PharMerica, Inc.
Raytheon Company (Class A)
*Rio Tinto Limited
Roberts Pharmaceutical Corporation
Rowan Companies Inc.
SK Telecom Co., Ltd.
Safeway PLC
Saga Petroleum ASA
*Telecomunicaoes Brasileiras S.A.--
Telebras (ADR)
Texaco Inc.
Tom Brown, Inc.
Transocean Offshore Inc.
UNOVA, Inc.
<PAGE>
Deletions
ABN AMRO Holding N.V.
ACE, Ltd.
AT&T Corp.
Allegiance Corporation
Asda Group PLC
Assicurazioni Generali S.p.A.
BB&T Corporation
British Telecommunications PLC (Ordinary)
CBI Industries, Inc.
CMS Energy Corp.
Cadbury Schweppes PLC
Castorama Dubois Investissements S.C.A.
Centerior Energy Corp.
Christian Dior S.A.
Columbia/HCA Healthcare Corp.
Compagnie Generale des Eaux S.A.
Compagnie Industriali Riunite S.p.A. (CIR)
Corporacion Bancaria de Espana S.A.
(Argentaria)
*FirstEnergy Corp.
France Telecom S.A.
GTE Corp.
Gallaher Group PLC
Iberdrola I S.A.
Istituto Nazional delle Assicurazioni
(INA) S.p.A.
*Lloyds TSB Group PLC
Monterey Resources, Inc.
Muenchener Rueckversicherungs-
Gesellschaft AG
New York Times Co. (Class A)
Nextel Communications Inc.
Novartis AG (Registered)
PartnerRe Holdings, Ltd.
Payless Cashways, Inc.
Pilkington PLC
Repsol S.A.
Repsol S.A. (ADR)
*Rio Tinto Limited
Sampoerna International Finance Company B.V.
Seat S.p.A.
Seat S.p.A.--RISP
Southwest Water PLC
*Telecomunicaoes Brasileiras S.A.--
Telebras (ADR)
Tesco PLC
Unisys Corp.
Veba AG
Westpac Banking Corp.
[FN]
*Added and deleted in the same quarter.
<PAGE>
PORTFOLIO INFORMATION
Worldwide
Investments
As of 1/31/98
Percent Breakdown of Stocks &
Fixed-Income Securities by Percent of
Country Net Assets
United States* 57.3%
Japan 7.1
Germany 6.0
Argentina 4.3
United Kingdom 4.1
France 2.6
Australia 1.6
Italy 1.6
Netherlands 1.5
South Korea 1.4
Canada 1.2
Brazil 1.1
Hong Kong 0.9
Indonesia* 0.8
Russia 0.7
Portugal 0.6
Mexico 0.6
Finland 0.6
New Zealand 0.5
Sweden 0.5
Switzerland 0.5
Singapore 0.4
India 0.4
China 0.3
Norway 0.3
Malaysia 0.3
Spain 0.2
Philippines 0.2
South Africa 0.2
Austria 0.2
Taiwan 0.1
Ireland 0.1
Venezuela 0.1
Thailand 0.1
[FN]
*Includes investments in short-term securities.
<PAGE>
Ten Largest Holdings Percent of
(Equity Investments) Net Assets
Broken Hill Proprietary Co., Ltd. 0.7%
Republic New York Corp. 0.6
BCP International Bank
(8% Convertible) 0.6
Societe Generale de France S.A. 0.5
Noble Drilling Corp. 0.5
First Commerce Corp. 0.4
Houston Industries, Inc. 0.4
MontEdison S.p.A. 0.4
Mellon Bank Corp. 0.4
Texas Utilities Co. 0.4
Ten Largest Industries Percent of
(Equity Investments) Net Assets
Banking++ 5.7%
Insurance 3.3
Telecommunications 3.2
Utilities--Electric & Gas 2.4
Multi-Industry 1.9
Metals & Mining 1.5
Energy & Petroleum 1.3
Real Estate Investment Trusts 1.1
Financial Services 1.1
Chemicals 0.9
[FN]
++Includes savings banks.
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