MERRILL LYNCH
GLOBAL
ALLOCATION
FUND, INC.
FUND LOGO
Quarterly Report
July 31, 1999
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 7/31/99
<CAPTION>
Percent of Fund's Net Assets Reference Portfolio
7/31/99 4/30/99 Percentages
<S> <C> <C> <C>
North & South American Equities 25.0%* 27.3%* 36.0%
European Equities 8.5 10.9 11.0
Pacific Basin Equities 16.6 14.9 13.0
Total Equities 50.1 53.1 60.0
US Dollar Denominated Fixed-Income Securities 33.1 35.3 24.0
US Issuers 12.1 12.9 --
Non-US Issuers 21.0 22.4 --
Non-US Dollar Denominated Fixed-Income Securities 5.3 5.5 16.0
Total Fixed-Income Securities 38.4++ 40.8++ 40.0
Cash & Cash Equivalents 11.5 6.1 --
<FN>
*Includes value of Financial Futures Contracts.
++Includes Preferred Stock.
Merrill Lynch Global Allocation Fund, Inc., July 31, 1999
DEAR SHAREHOLDER
For the three months ended July 31, 1999, Merrill Lynch Global
Allocation Fund, Inc.'s Class A, Class B, Class C and Class D Shares
had total returns of +4.03%, +3.76%, +3.74% and +3.91%,
respectively. (Complete performance information can be found on
pages 6 and 7 of this report to shareholders.)
The Fund's strong results in the July quarter are a continuation of
the trend of strong relative and absolute performance this year
after a difficult 1998. For the year to date as of July 31, 1999,
the Fund's Class A, Class B, Class C and Class D Shares had total
returns of +20.37%, +19.71%, +19.64% and +20.16%, respectively. This
compares to a +3.92% total return for an unmanaged benchmark index.*
However, even when taking into account August and September of 1998
- --two particularly weak months in that difficult year for the Fund--
the Fund's Class A, Class B, Class C and Class D Shares returned
+16.30%, +15.24%, +15.19% and +16.02%, respectively, for the 12
months ended July 31, 1999, compared to a +12.89% return for the
unmanaged benchmark index.
We remind our shareholders that as we discussed in our January 31,
1999 report, the nature of value investing is such that periods of
sharp underperformance are often followed by periods of strong
performance. Accordingly, part of the Fund's appreciation in 1999
resulted from a price resurgence for investments that were generally
unpopular last year.
<FN>
*The unmanaged benchmark index is a weighted index comprised of 36%
of the unmanaged Standard & Poor's 500 Index, 24% Financial
Times/Standard & Poor's--Actuaries World Index (Ex-US), 24% Merrill
Lynch Government Index GA05, and 16% Salomon Brothers World
Government Bond Index (Ex-US). Descriptions of these indexes can be
found on page 7 of this report to shareholders.
In addition, we are pleased to report that as of August 31, 1999,
the Fund's Class B Shares again achieved a Morningstar Rating TM of
five stars, as shown below. (Fund results do not reflect sales
charges, and would be lower if sales charges were included.)
Modest Changes to Asset Allocation
As of July 31, 1999, approximately 54% of the Fund's net assets was
invested outside of the United States. Given the dominance of the US
stock market over the past decade, many investors have lost sight of
the potential benefits of global investing, which include:
* Greater diversification.
* The opportunity to invest in economies that may experience faster
economic growth than the United States.
* A much broader range of investment opportunities.
Although the United States has clearly been the most attractive
major country in which to invest over the past 16 years, there is no
reason for us to believe that the United States will have a monopoly
on good investment returns. With large-capitalization US stock
prices expensive, the US savings rate negative, the trade deficit
rising to new record levels, and interest rates increasing, we
believe that this is an auspicious time for investors to consider
international diversification. Accordingly, the Fund has, and will
continue, to search the world for the best investment opportunities
and pursue investments.
We made modest changes to the Fund's asset allocation during the
July quarter. As 1999 has progressed, we have steadily taken profits
in holdings that have appreciated substantially. During the quarter,
we continued this strategy, increasing cash reserves from 6.1% to
11.5%. As of July 31, 1999, the Fund's equity exposure was 50.1% of
net assets, with the remaining 38.4% allocated to fixed income.
Shareholders should note that as of July 31, 1999, 12.7% of the Fund
was invested in convertible securities, which are categorized as
fixed-income investments but tend to correlate more closely with
their equity counterparts. Therefore, the Fund's equity exposure is
somewhat higher than the actual asset class percentage allocations
would indicate.
As of July 31, 1999, the Fund's US dollar exposure was 33.1%,
adjusting for currency hedges, which is virtually unchanged from the
prior quarter. This exposure to the US currency is lower than has
been the case for the Fund over the past several years, but is still
overweighted compared to our benchmark index.
With stronger-than-expected economic growth, higher commodity prices
(especially oil), a high demand for credit, and a persistently low
savings rate, the US Federal Reserve Board has continued to tighten
monetary policy. Against this backdrop, the Fund's bond investments
continue to focus on convertible bonds and higher-yielding issues,
many of which are issued by foreign governments, most notably in
Latin America. We believe that these issues may continue to
outperform US Treasury securities in a rising interest rate
environment. At the same time, we continue to have a modest
investment in US Treasury Inflation Protected Securities, which are
expected to outperform conventional Treasury securities when
interest rates rise.
Strong Stock Market Performance in Japan
In our last report to shareholders, we outlined our reasons for
increasing investments in Japanese stocks. The Japanese stock market
has surprised many investors thus far this year by outperforming the
US stock market. However, from a long-term perspective, Japanese
equity prices remain depressed. The Japanese stock market, while
very significant in size, is nonetheless much smaller relative to
the US stock market than was the case ten years ago. We believe that
there is continued potential for higher profitability for Japanese
companies, higher share prices, and greater interest in Japanese
stocks on the part of global investors. Although we took some
profits in our Japanese holdings during the July quarter, price
appreciation nevertheless increased the Fund's equity allocation
there from 8.9% of net assets to 10.2%.
Five-Star Morningstar Overall Rating TM--
International Equity Funds as of 8/31/99
Merrill Lynch Global Allocation Fund, Inc.
Class B Shares
Five-star overall rating in the Morningstar International Equity
Fund class is out of 1,001 funds. Morningstar proprietary ratings
reflect historical risk-adjusted performance as of August 31, 1999.
The ratings are subject to change every month. Past performance is
not a guarantee of future results. Morningstar ratings are
calculated from the Fund's three-, five- and ten-year average annual
returns (if applicable) in excess of 90-day Treasury bill returns
with appropriate fee adjustments, and a risk factor that reflects
Fund performance below 90-day Treasury bill returns. Merrill Lynch
Global Allocation Fund, Inc.'s Class B Shares received 4 stars, 4
stars and 5 stars for the three-, five-, and ten-year periods,
respectively, ended August 31, 1999. The top 10% of the funds in a
broad asset class receive five stars, the next 22.5% receive four
stars, the next 35% receive three stars, the next 22.5% receive two
stars, and the bottom 10% receive one star. The Fund's Class B
Shares were rated against 1,001, 535 and 117 funds in the
Morningstar International Equity Fund class for the three-, five-,
and ten-year periods, respectively.
Ratings are only for the share class cited; ratings for other share
classes may vary.
Merrill Lynch Global Allocation Fund, Inc., July 31, 1999
In addition to Japanese equities, we have approximately 3.3% of net
assets invested in Japanese convertible securities, which we own
because we believe they will appreciate along with the Japanese
equity market. However, we are not bullish on the prospects for
Japanese bonds. Interest rates in Japan are already very low, and
the government is pursuing a very easy monetary policy. Accordingly,
we believe that improved economic activity in Japan is likely to
result in higher interest rates.
In Conclusion
We thank you for your investment in Merrill Lynch Global Allocation
Fund, Inc., and we look forward to reviewing our outlook and
strategy with you again in our upcoming annual report to
shareholders.
Sincerely,
(Terry K. Glenn)
Terry K. Glenn
President and Director
(Bryan N. Ison)
Bryan N. Ison
Senior Vice President and
Portfolio Manager
September 14, 1999
OFFICERS AND DIRECTORS
Terry K. Glenn, President and Director
Donald Cecil, Director
Edward H. Meyer, Director
Charles C. Reilly, Director
Richard R. West, Director
Arthur Zeikel, Director
Edward D. Zinbarg, Director
Bryan N. Ison, Senior Vice President and Portfolio Manager
Dennis W. Stattman, Vice President
Donald C. Burke, Vice President and 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., July 31, 1999
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.
</TABLE>
<TABLE>
Recent
Performance
Results
<CAPTION>
Ten Years/
12-Month 3-Month Since Inception
Total Return Total Return Total Return
<S> <C> <C> <C>
ML Global Allocation Fund, Inc.--Class A Shares* +16.30% +4.03% +259.49%
ML Global Allocation Fund, Inc.--Class B Shares* +15.24 +3.76 +224.79
ML Global Allocation Fund, Inc.--Class C Shares* +15.19 +3.74 + 80.21
ML Global Allocation Fund, Inc.--Class D Shares* +16.02 +3.91 + 87.09
US Stocks: Standard & Poor's 500 Index** +20.20 -0.16 +396.63/+213.97
Non-US Stocks: Financial Times/Standard & Poor's--
Actuaries World Index (Ex-US)*** +11.79 +2.05 + 72.54/+45.42
US Bonds: ML Government Index GA05**** + 3.26 -1.12 + 94.75/+38.26
Non-US Bonds: Salomon Brothers World Government
Bond Index (Ex-US)***** + 8.42 -0.99 +127.40/+28.95
<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 ten year/since inception periods are for ten years for Class
A & Class B Shares and from 10/21/94 for Class C & Class D Shares.
**An unmanaged broad-based index comprised of common stocks. Ten
years/since inception total returns are for ten years and from
10/21/94, respectively.
***An unmanaged capitalization-weighted index comprised of 1,631
companies in 28 countries, excluding the United States. Ten
years/since inception total returns are for ten years and from
10/21/94, respectively.
****An unmanaged index designed to track the total return of the
current coupon five-year US Treasury bond. Ten years/since inception
total returns are for ten years and from 10/21/94, respectively.
*****An unmanaged market capitalization-weighted index tracking ten
government bond indexes, excluding the United States. Ten
years/since inception total returns are for ten years and from
10/21/94, respectively.
</TABLE>
Average Annual
Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 6/30/99 +14.28% + 8.28%
Five Years Ended 6/30/99 +13.60 +12.38
Ten Years Ended 6/30/99 +14.13 +13.52
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 6/30/99 +13.14% + 9.14%
Five Years Ended 6/30/99 +12.45 +12.45
Ten Years Ended 6/30/99 +12.98 +12.98
[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 6/30/99 +13.17% +12.17%
Inception (10/21/94) through 6/30/99 +13.30 +13.30
[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 6/30/99 +14.00% + 8.01%
Inception (10/21/94) through 6/30/99 +14.19 +12.89
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
Merrill Lynch Global Allocation Fund, Inc., July 31, 1999
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
EUR Euro Dollar
GBP Great Britain Pound
JPY Japanese Yen
NOK Norwegian Krone
NZD New Zealand Dollar
SEK Swedish Kroner
USD United States Dollar
<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 SA (ADR)++(USD) $ 11,254,989 $ 7,837,325 0.1%
2,433,900 Banco Rio de la Plata SA
(ADR)++(USD) 25,177,689 21,905,100 0.3
-------------- -------------- ------
36,432,678 29,742,425 0.4
Government 11,000 Republic of Argentina (Warrants)(a) 300,300 8,800 0.0
Obligations
Total Common Stocks in Argentina 36,732,978 29,751,225 0.4
Australia Building 718,547 Pioneer International Limited 1,814,681 1,922,293 0.0
Materials
Foods 5,566,000 Goodman Fielder Limited 5,875,419 5,447,723 0.1
Insurance 15,827,044 HIH Insurance Limited 25,327,074 18,588,863 0.2
Metals & Mining 10,000,000 Normandy Mining Limited 8,030,489 7,242,750 0.1
25,900,927 Pasminco Limited 25,771,262 28,899,607 0.4
8,700,000 WMC Limited 29,191,616 37,977,458 0.5
-------------- -------------- ------
62,993,367 74,119,815 1.0
Multi-Industry 2,160,000 Lend Lease Corporation Limited 17,989,574 26,977,325 0.4
2,300,000 Pacific Dunlop Limited 5,753,464 3,316,658 0.0
-------------- -------------- ------
23,743,038 30,293,983 0.4
Resources 8,012,290 Broken Hill Proprietary Company
Limited 85,230,525 88,614,926 1.2
Total Common Stocks in Australia 204,984,104 218,987,603 2.9
Austria Banking 203,400 Bank Austria AG 6,298,337 10,829,361 0.1
Total Common Stocks in Austria 6,298,337 10,829,361 0.1
Bermuda Insurance 71,900 Ace Limited 1,593,802 1,671,675 0.0
Total Common Stocks in Bermuda 1,593,802 1,671,675 0.0
Brazil Telecommunications 460,000 Telecomunicacoes Brasileiras SA--
Telebras (ADR)++(USD) 32,419 28,750 0.0
440,000 Telecomunicacoes Brasileiras SA--
Telebras (Preferred Block)
(ADR)++(USD) 29,358,340 33,605,000 0.4
Total Common Stocks in Brazil 29,390,759 33,633,750 0.4
Canada Beverages 1,900,000 Cott Corporation (USD) 15,484,918 6,650,000 0.1
Insurance 180,500 Clarica Life Insurance Co. 2,498,481 2,822,193 0.0
Metals--Non-Ferrous 1,050,000 Inco Limited (USD) 20,921,949 18,637,500 0.3
Retail Stores 700,000 Hudson's Bay Company 7,271,362 8,401,120 0.1
Telecommunications 1,165,200 Rogers Cantel Mobile Communi-
cations Inc. 'B' 22,391,634 24,666,689 0.3
1,260,900 Rogers Cantel Mobile Communi-
cations Inc. 'B' (USD) 20,941,379 26,872,931 0.4
150,000 Rogers Communications, Inc. 'B' 984,749 2,850,380 0.0
-------------- -------------- ------
44,317,762 54,390,000 0.7
Total Common Stocks in Canada 90,494,472 90,900,813 1.2
Finland Metals 343,705 Outokumpu Oyj 5,113,967 3,936,550 0.1
Paper & 1,811,920 Metsa-Serla Oyj 'B' 14,537,527 16,446,783 0.2
Forest Products 449,845 Stora Enso Oyj 'A' 3,506,504 5,585,563 0.1
117,480 Stora Enso Oyj 'R' 903,581 1,477,569 0.0
203,868 UPM-Kymmene Oyj 4,035,251 6,873,940 0.1
-------------- -------------- ------
22,982,863 30,383,855 0.4
Total Common Stocks in Finland 28,096,830 34,320,405 0.5
France Automobiles 46,568 PSA Peugeot Citroen 5,610,594 8,025,268 0.1
Banking 107,555 Banque Nationale de Paris (BNP) 4,755,027 8,864,769 0.1
60,410 Compagnie Financiere de Paribas (CFP) 3,198,316 6,854,264 0.1
38,674 Societe Generale 'A' 4,031,727 7,269,252 0.1
-------------- -------------- ------
11,985,070 22,988,285 0.3
Energy & Petroleum 32,240 Elf Aquitaine SA 4,106,354 5,521,551 0.1
Industrial 244,500 Alcatel (ADR)++(USD) 4,208,043 7,548,938 0.1
Insurance 277,598 CNP Assurances 7,729,298 7,473,094 0.1
Metals--Steel 1,025,585 Usinor SA 15,027,164 15,369,007 0.2
Multi-Industry 30,680 Societe Eurafrance SA 12,025,892 18,554,528 0.2
Total Common Stocks in France 60,692,415 85,480,671 1.1
Germany Automotive 9,447 Bayerische Motoren Werke (BMW) AG 6,499,510 7,482,931 0.1
101,383 Volkswagen AG 6,551,153 6,055,436 0.1
-------------- -------------- ------
13,050,663 13,538,367 0.2
Banking 161,850 Deutsche Bank AG 13,557,707 10,256,059 0.1
132,450 Dresdner Bank AG 7,678,657 5,685,157 0.1
164,480 HypoVereinsbank 8,617,726 9,366,360 0.1
-------------- -------------- ------
29,854,090 25,307,576 0.3
Capital Goods 369,636 Kloeckner-Werke AG 17,229,762 26,429,979 0.3
Chemicals 255,800 Bayer AG 10,394,948 10,968,761 0.1
101,451 Henkel KGaA 4,390,556 6,363,559 0.1
234,993 Hoechst AG 9,059,784 9,910,538 0.1
-------------- -------------- ------
23,845,288 27,242,858 0.3
Electrical Equipment 61,450 Siemens AG 4,010,300 5,084,491 0.1
Engineering & 32,565 Philipp Holzmann AG 12,268,030 6,622,939 0.1
Construction
Metals--Steel 480,042 Thyssen Krupp AG 11,397,099 11,201,646 0.2
Utilities 221,920 Veba AG 14,736,289 13,634,978 0.2
Total Common Stocks in Germany 126,391,521 129,062,834 1.7
</TABLE>
Merrill Lynch Global Allocation Fund, Inc., July 31, 1999
<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 Banking 2,098,611 HSBC Holdings PLC $ 13,265,383 $ 24,740,119 0.3%
Multi-Industry 6,959,500 Hutchison Whampoa Limited 44,392,295 66,128,521 0.9
Total Common Stocks in Hong Kong 57,657,678 90,868,640 1.2
Hungary Oil & Gas Producers 232,571 MOL Magyar Olaj-es Gazipari Rt.
(GDR)++++(USD) 6,283,087 6,221,274 0.1
Total Common Stocks in Hungary 6,283,087 6,221,274 0.1
Indonesia Paper & Pulp 1,461,600 Asia Pacific Resources International
Holdings Ltd. 'A' 5,254,010 1,370,250 0.0
553,765 Asia Pulp & Paper Company Ltd.
(ADR)++(USD) 6,368,298 4,222,458 0.1
110,753 Asia Pulp & Paper Company Ltd.
(Warrants)(a) 0 173,052 0.0
-------------- -------------- ------
11,622,308 5,765,760 0.1
Tobacco 19,327,000 PT Hanjaya Mandala Sampoerna Tbk 28,087,780 47,290,974 0.6
Total Common Stocks in Indonesia 39,710,088 53,056,734 0.7
Italy Multi-Industry 16,105,435 MontEdison SpA 23,376,406 25,427,905 0.3
Telecommunications 5,261,641 Telecom Italia SpA 24,672,484 28,723,509 0.4
Total Common Stocks in Italy 48,048,890 54,151,414 0.7
Japan Automobiles & 3,282,000 Suzuki Motor Corporation 30,510,247 56,845,659 0.7
Equipment
Beverages 1,500,000 Chukyo Coca-Cola Bottling Co., Ltd. 15,603,941 21,182,008 0.3
539,104 Coca-Cola West Japan Company Limited 12,209,675 24,201,409 0.3
603,000 Hokkaido Coca-Cola Bottling Co., Ltd. 8,131,905 8,988,232 0.1
691,000 Kinki Coca-Cola Bottling Co., Ltd. 10,472,103 11,161,288 0.1
1,143,000 Mikuni Coca-Cola Bottling 15,815,229 22,168,541 0.3
-------------- -------------- ------
62,232,853 87,701,478 1.1
Capital Goods 12,900,000 Kawasaki Heavy Industries Ltd. 35,297,925 33,959,205 0.4
7,875,000 Mitsubishi Heavy Industries, Ltd. 44,268,610 34,803,217 0.5
-------------- -------------- ------
79,566,535 68,762,422 0.9
Chemicals 34,000 Shin-Etsu Chemical Co., Ltd. 657,132 1,232,915 0.0
Consumer Products 31,200 Amway Japan Limited 723,715 329,079 0.0
Electrical 1,157,000 Chudenko Corporation 30,014,026 20,675,122 0.3
Construction 1,386,000 Kinden Corporation 21,348,708 14,618,724 0.2
-------------- -------------- ------
51,362,734 35,293,846 0.5
Electrical 788,000 Murata Manufacturing Co., Ltd. 25,168,052 58,316,946 0.8
Equipment
Electronics 1,299,000 Hitachi Ltd. 9,381,584 13,078,321 0.2
Financial 8,837,000 Daiwa Securities Group Inc. 43,679,800 76,645,877 1.0
Services 879,000 The Nomura Securities Co., Ltd. 11,893,928 12,320,711 0.1
1,720,000 Wako Securities Co., Ltd. 4,377,152 5,442,469 0.1
-------------- -------------- ------
59,950,880 94,409,057 1.2
Industrial 28,000 Miura Co., Ltd. 466,635 396,374 0.0
Insurance 743,000 The Chiyoda Fire & Marine Insurance
Company, Limited 2,796,009 2,687,805 0.0
2,897,000 The Dai-Tokyo Fire and Marine
Insurance Co., Ltd. 17,990,037 12,676,900 0.2
125,000 The Dowa Fire & Marine Insurance
Co., Ltd. 441,340 434,754 0.0
3,743,000 The Fuji Fire and Marine Insurance
Company, Limited 13,980,452 7,667,408 0.1
4,865,000 The Koa Fire & Marine Insurance
Co., Ltd. 24,748,402 15,902,850 0.2
765,000 Mitsui Marine and Fire Insurance
Company, Ltd. 5,730,161 4,087,735 0.1
3,508,000 The Nichido Fire & Marine Insurance
Co., Ltd. 20,622,267 18,775,384 0.2
4,816,000 The Nippon Fire & Marine Insurance
Co., Ltd. 20,479,413 17,086,053 0.2
999,000 The Nisshin Fire and Marine
Insurance Company, Limited 2,688,731 2,725,654 0.0
7,315,000 The Sumitomo Marine & Fire Insurance
Co., Ltd. 46,067,731 47,057,793 0.6
2,713,000 The Tokio Marine & Fire Insurance
Co. Ltd. 28,580,732 31,429,367 0.5
5,000,000 The Yasuda Fire & Marine Insurance
Co. Ltd. 25,976,040 30,509,066 0.4
-------------- -------------- ------
210,101,315 191,040,769 2.5
Office 1,612,000 Canon, Inc. 23,455,745 51,007,322 0.7
Equipment
Packaging & 1,103,000 Toyo Seikan Kaisha, Ltd. 25,118,395 23,507,976 0.3
Containers
Pharmaceuticals 1,261,000 Sankyo Company, Ltd. 28,124,373 33,305,701 0.4
384,000 Taisho Pharmaceutical Company, Ltd. 7,984,458 14,895,397 0.2
-------------- -------------- ------
36,108,831 48,201,098 0.6
Restaurants 647,000 Mos Food Service, Inc. 12,121,005 9,875,323 0.1
618,000 Ohsho Food Service 10,180,663 10,504,707 0.2
-------------- -------------- ------
22,301,668 20,380,030 0.3
Retail Stores 460,000 Ito-Yokado Co., Ltd. 21,319,319 31,276,151 0.4
100,000 Sangetsu Co., Ltd. 3,160,832 2,397,141 0.0
-------------- -------------- ------
24,480,151 33,673,292 0.4
Total Common Stocks in Japan 661,586,472 784,176,584 10.2
Mexico Foods 700,000 Grupo Industrial Maseca, SA de
CV (ADR)++(USD) 7,969,925 7,043,750 0.1
Multi-Industry 433,800 Grupo Carso, SA de CV (ADR)++(USD) 3,832,850 3,392,316 0.0
Telecommunications 433,800 Carso Global Telecom (ADR)++(USD) 2,060,550 4,984,362 0.1
Total Common Stocks in Mexico 13,863,325 15,420,428 0.2
Netherlands Chemicals 351,904 Akzo Nobel NV 11,004,420 15,048,288 0.2
225,570 European Vinyls Corporation
International NV 8,625,195 1,690,151 0.0
-------------- -------------- ------
19,629,615 16,738,439 0.2
Insurance 321,530 ING Groep NV 5,483,987 16,451,121 0.2
Packaging 1,509,895 Buhrmann NV 31,558,302 30,707,641 0.4
Real Estate 1,867,760 Security Capital U.S. Realty (USD) 33,172,380 35,020,500 0.5
Steel 161,800 Ispat International NV 4,382,262 1,844,481 0.0
799,183 Ispat International NV (NY Registered
Shares)(USD) 13,831,820 9,290,502 0.1
-------------- -------------- ------
18,214,082 11,134,983 0.1
Total Common Stocks in the
Netherlands 108,058,366 110,052,684 1.4
New Natural Gas 227,104 Natural Gas Corporation Holdings
Zealand Suppliers Limited 160,508 241,094 0.0
Total Common Stocks in New Zealand 160,508 241,094 0.0
</TABLE>
Merrill Lynch Global Allocation Fund, Inc., July 31, 1999
<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>
Norway Banking 4,335,400 Christiania Bank Og Kreditkasse $ 9,691,400 $ 17,003,755 0.2%
2,434,000 Den Norske Bank ASA 7,189,721 8,450,845 0.1
-------------- -------------- ------
16,881,121 25,454,600 0.3
Computer Software 668,518 Merkantildata ASA 8,071,807 6,361,516 0.1
Total Common Stocks in Norway 24,952,928 31,816,116 0.4
Philippines Multi-Industry 7,602,624 Ayala Corporation 1,948,253 2,378,918 0.0
Total Common Stocks in the Philippines 1,948,253 2,378,918 0.0
Portugal Banking 584,372 Banco Comercial Portugues, SA
(BCP) (Registered Shares) 8,794,706 15,575,244 0.2
Banking--International 50 Banco Portugues do Atlantico (BPA) 1,244 752 0.0
Total Common Stocks in Portugal 8,795,950 15,575,996 0.2
Russia Telecommunications 1,611,800 PLD Telekom Inc. (USD) 10,028,238 5,439,825 0.1
74,500 PLD Telekom Inc. (Warrants)(a)(USD) 0 3,725 0.0
93,200 PLD Telekom Inc. (Warrants)(a)(USD) 142,605 4,660 0.0
Total Common Stocks in Russia 10,170,843 5,448,210 0.1
South Metals--Steel 501,660 Pohang Iron & Steel Company Ltd. 18,920,185 61,717,107 0.8
Korea
Telecommunications 3,768 SK Telecom Co. Ltd. 805,980 2,349,128 0.0
1,434,584 SK Telecom Co. Ltd. (ADR)++(USD) 8,354,885 20,353,160 0.3
-------------- -------------- ------
9,160,865 22,702,288 0.3
Total Common Stocks in South Korea 28,081,050 84,419,395 1.1
Spain Insurance 66,778 Corporacion Mapfre 1,272,758 1,225,868 0.0
Utilities-- 169,142 Endesa SA 3,546,176 3,327,692 0.1
Electric
Total Common Stocks in Spain 4,818,934 4,553,560 0.1
Sweden Appliances 370,529 Electrolux AB 'B' 5,257,612 7,716,526 0.1
Automobiles & 391,430 Volvo AB 'B' 12,386,419 12,263,564 0.2
Equipment
Insurance 275,692 Skandia Forsakrings AB 3,466,640 5,169,015 0.1
Metals--Steel 901,522 Avesta Sheffield AB 7,672,265 4,019,244 0.0
Multi-Industry 192,784 Svedala Industri AB 2,531,671 3,343,756 0.0
Paper & Forest 411,853 Mo och Domsjo AB (MoDo) 'B' 10,072,522 11,570,318 0.2
Products
Total Common Stocks in Sweden 41,387,129 44,082,423 0.6
Switzerland Banking 20,222 Banque Cantonale de Geneve (BCG) 6,737,471 3,830,952 0.0
Banking & 23,179 UBS AG (Registered Shares) 4,732,668 7,064,683 0.1
Financial
Pharmaceuticals 3,751 Novartis AG (Registered Shares) 5,535,436 5,418,223 0.1
Total Common Stocks in Switzerland 17,005,575 16,313,858 0.2
Thailand Holding 1,373,300 BEC World Public Company Limited
Companies 'Foreign' 8,876,272 8,052,162 0.1
Total Common Stocks in Thailand 8,876,272 8,052,162 0.1
United Banking 226,531 Barclays PLC 3,483,493 6,690,049 0.1
Kingdom 400,115 National Westminster Bank PLC 7,365,876 7,901,391 0.1
-------------- -------------- ------
10,849,369 14,591,440 0.2
Building & 325,351 Jarvis PLC 3,797,606 1,507,416 0.0
Construction
Diversified 1,018,229 Rentokil Initial PLC 3,689,184 3,958,874 0.1
Companies
Food & Beverage 756,839 Allied Domecq PLC 5,698,776 6,804,739 0.1
672,142 Bass PLC 9,822,359 9,750,831 0.1
-------------- -------------- ------
15,521,135 16,555,570 0.2
Food & Household 293,204 Cadbury Schweppes PLC 1,880,921 1,866,713 0.0
Products
Holding Companies 1,349,209 Invensys PLC 8,243,369 7,300,300 0.1
Insurance 620,845 CGU PLC 8,676,880 8,644,584 0.1
1,723,230 Royal & Sun Alliance Insurance
Group PLC 18,609,690 14,153,577 0.2
-------------- -------------- ------
27,286,570 22,798,161 0.3
Mortgages 489,278 Northern Rock PLC 3,512,022 3,503,426 0.0
Pharmaceuticals 254,807 Glaxo Wellcome PLC 7,025,876 6,571,574 0.1
Retail--Food 1,610,493 Safeway PLC 9,038,358 6,000,697 0.1
Retail Stores 301,675 Signet Group PLC (ADR)++(USD) 461,861 7,541,875 0.1
Steel 681,118 British Steel PLC 1,415,859 1,826,145 0.0
Telecommunications 568,677 Cable & Wireless PLC 4,292,301 6,937,063 0.1
Total Common Stocks in the
United Kingdom 97,014,431 100,959,254 1.3
United Apparel 700,000 Fruit of the Loom, Inc. (Class A) 18,572,062 5,556,250 0.1
States
Banking 393,700 Banco Santander Puerto Rico 7,767,639 7,332,662 0.1
130,000 Bank One Corporation 2,201,120 7,093,125 0.1
259,000 Banknorth Group, Inc. 1,865,422 8,385,125 0.1
1,962,600 East West Bancorp, Inc. 19,626,000 19,380,675 0.3
2,310,939 Golden State Bancorp Inc. 23,302,590 51,129,525 0.7
2,940,239 Golden State Bancorp Inc.
"Litigation Tracking" (Warrants)(a) 5,633,533 4,686,006 0.0
770,194 Golden State Bancorp Inc.
(Warrants)(a) 0 9,290,465 0.1
1,170,000 KeyCorp 17,184,961 36,855,000 0.5
1,150,000 Mellon Bank Corporation 11,889,517 38,812,500 0.5
800,000 Republic New York Corporation 17,828,225 55,800,000 0.7
-------------- -------------- ------
107,299,007 238,765,083 3.1
Building Products 500,000 Chicago Bridge & Iron Company NV
(NY Registered Shares) 8,322,525 7,187,500 0.1
530,000 Flowserve Corporation 13,144,284 9,308,125 0.1
-------------- -------------- ------
21,466,809 16,495,625 0.2
Business Data 543,700 Imation Corp. 8,619,998 15,053,694 0.2
Processing
Business Data 1,800,000 Information Resources, Inc. 17,211,940 15,637,500 0.2
Systems
</TABLE>
Merrill Lynch Global Allocation Fund, Inc., July 31, 1999
<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 Coal 1,165,000 CONSOL Energy Inc. $ 17,902,540 $ 12,960,625 0.2%
States
(continued) Commercial 598,581 Cendant Corporation 7,789,786 12,046,443 0.2
Services
Computer 1,000,000 FileNET Corporation 4,606,916 10,000,000 0.1
Software 300,000 Hyperion Solutions Corporation 5,400,575 5,737,500 0.1
2,400,000 Inprise Corporation 33,535,053 10,350,000 0.2
-------------- -------------- ------
43,542,544 26,087,500 0.4
Computers & 300,000 Compaq Computer Corporation 9,902,490 7,200,000 0.1
Technology 2,000,000 Iomega Corporation 10,010,893 8,000,000 0.1
750,000 Komag, Incorporated 12,619,584 2,812,500 0.0
1,100,000 Silicon Graphics, Inc. 16,560,378 19,456,250 0.3
-------------- -------------- ------
49,093,345 37,468,750 0.5
Construction 200,000 Hovnanian Enterprises, Inc. (Class A) 1,750,602 1,700,000 0.0
& Housing
Construction 365,000 TJ International, Inc. 6,457,574 11,246,562 0.2
Products
Electronics 1,500,000 CHS Electronics, Inc. 9,217,891 5,718,750 0.1
2,200,000 Cabletron Systems, Inc. 32,727,110 26,537,500 0.3
1,800,000 Checkpoint Systems, Inc. 19,987,737 16,537,500 0.2
1,000,000 MEMC Electronic Materials, Inc. 18,838,743 12,937,500 0.2
705,000 Millipore Corporation 18,074,743 28,728,750 0.4
1,588,700 Silicon Valley Group, Inc. 25,891,303 20,255,925 0.3
180,000 Tektronix, Inc. 2,798,647 5,703,750 0.0
-------------- -------------- ------
127,536,174 116,419,675 1.5
Energy & 1,079,400 Arch Coal, Inc. 28,887,320 14,436,975 0.2
Petroleum 4,000,000 Key Energy Services, Inc. 12,000,000 15,250,000 0.2
46,400 Mitchell Energy & Development
Corp. (Class A) 675,717 841,000 0.0
174,350 Mitchell Energy & Development
Corp. (Class B) 2,755,451 3,051,125 0.0
50,000 Murphy Oil Corporation 1,688,446 2,475,000 0.0
1,400,000 Occidental Petroleum Corporation 26,123,703 27,387,500 0.4
1,402,978 Santa Fe Snyder Corporation 7,579,573 12,977,546 0.2
530,000 USX-Marathon Group 10,037,117 16,098,750 0.2
-------------- -------------- ------
89,747,327 92,517,896 1.2
Financial 1,972,900 Anthracite Capital, Inc. 29,662,250 14,056,912 0.2
Services 900,000 Ugly Duckling Corporation 11,585,625 6,750,000 0.1
-------------- -------------- ------
41,247,875 20,806,912 0.3
Forest Products 330,000 Deltic Timber Corporation 9,371,593 8,043,750 0.1
Funeral Services 100,000 Service Corporation International 1,355,000 1,587,500 0.0
Gaming 1,235,000 Scientific Games Holdings Corp. 27,568,304 25,394,687 0.3
Healthcare 207,500 Advocat, Inc. 1,973,750 389,062 0.0
Services 2,110,400 Beverly Enterprises, Inc. 15,824,755 12,134,800 0.2
2,100,000 Humana Inc. 32,795,915 22,837,500 0.3
137,577 LTC Healthcare Inc. 619,051 283,753 0.0
1,600,000 Oxford Health Plans, Inc. 30,398,931 28,500,000 0.3
1,091,600 Sierra Health Services, Inc. 15,709,764 14,122,575 0.2
-------------- -------------- ------
97,322,166 78,267,690 1.0
Industrial 15,000 Bar Technologies Ltd. (Warrants)(a) 838,256 300,000 0.0
Information 380,000 Billing Concepts Corp. 3,610,000 2,707,500 0.0
Processing
Insurance 186,300 Horace Mann Educators Corporation 2,143,167 4,692,431 0.1
1,947,500 Risk Capital Holdings, Inc. 34,313,406 27,143,281 0.4
-------------- -------------- ------
36,456,573 31,835,712 0.5
Machinery 1,584,000 AGCO Corporation 10,186,541 14,850,000 0.2
390,000 Weatherford International, Inc. 7,044,264 15,283,125 0.2
-------------- -------------- ------
17,230,805 30,133,125 0.4
Metals & 180,000 Alcoa Inc. 5,176,249 10,777,500 0.2
Mining 1,400,000 Battle Mountain Gold Company 8,838,297 2,712,500 0.0
637,000 Commonwealth Industries, Inc. 9,051,856 9,953,125 0.1
850,000 Newmont Mining Corporation 31,553,907 15,725,000 0.2
340,000 Nucor Corporation 15,648,817 16,490,000 0.2
800,000 The Timken Company 13,791,134 13,200,000 0.2
-------------- -------------- ------
84,060,260 68,858,125 0.9
Metals--Steel 678,700 Worthington Industries, Inc. 8,025,202 9,841,150 0.1
Multi-Industry 90,000 Loews Corporation 3,984,675 6,311,250 0.1
Natural Resources 210,519 Freeport-McMoRan Copper & Gold, Inc.
(Class B) 3,665,657 3,552,508 0.0
Oil & Gas Producers 800,000 Rowan Companies. Inc. 9,961,925 15,050,000 0.2
600,000 Tom Brown, Inc. 10,596,357 9,075,000 0.1
300,000 Transocean Offshore Inc. 9,669,913 9,206,250 0.2
-------------- -------------- ------
30,228,195 33,331,250 0.5
Oil Field 201,900 Veritas DGC Inc. 2,715,091 3,608,962 0.0
Equipment
Oil Services 200,000 Diamond Offshore Drilling, Inc. 5,150,000 6,400,000 0.1
1,568,000 Input/Output, Inc. 13,351,000 11,662,000 0.1
2,630,000 Noble Drilling Corporation 19,721,749 59,668,125 0.8
230,000 Schlumberger Limited 12,731,500 13,929,375 0.2
300,000 Tidewater Inc. 13,101,460 9,918,750 0.1
-------------- -------------- ------
64,055,709 101,578,250 1.3
Paper 80,000 Boise Cascade Corporation 2,109,863 3,085,000 0.0
220,000 Louisiana-Pacific Corporation 4,820,569 4,826,250 0.1
-------------- -------------- ------
6,930,432 7,911,250 0.1
Pollution Control 500,000 Safety-Kleen Corp. 5,574,398 5,968,750 0.1
Real Estate 2,394,465 Catellus Development Corporation 20,587,205 38,012,132 0.5
3,633,600 Security Capital Group
Incorporated (Class B) 78,475,062 54,731,100 0.7
700,000 United Dominion Realty Trust, Inc. 8,011,873 8,006,250 0.1
-------------- -------------- ------
107,074,140 100,749,482 1.3
Real Estate 1,598,300 AMB Property Corporation 34,744,536 35,961,750 0.5
Investment Trusts 27,500 Apartment Investment & Management
Company (Class A) 963,895 1,122,344 0.0
300,000 Avalonbay Communities, Inc. 9,440,618 10,181,250 0.1
100,000 CarrAmerica Realty Corporation 2,260,999 2,412,500 0.0
500,800 Equity Office Properties Trust 12,692,998 12,582,600 0.2
250,000 Equity Residential Properties Trust 10,093,750 10,328,125 0.1
500,000 Federal Realty Investment Trust 10,135,000 11,312,500 0.2
</TABLE>
Merrill Lynch Global Allocation Fund, Inc., July 31, 1999
<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>
United Real Estate 89,591 Horizon Group Properties, Inc. $ 537,546 $ 302,370 0.0%
States Investment 3,042,500 Imperial Credit Commercial Mortgage
(concluded) Trusts Investment Corp. 42,303,825 33,277,344 0.4
(concluded) 3,500,000 Meditrust Companies 68,742,755 38,062,500 0.5
63,400 National Health Investors, Inc. 1,621,138 1,418,575 0.0
1,524,400 Nationwide Health Properties, Inc. 30,413,253 26,105,350 0.4
2,039,825 Prime Retail, Inc. 17,735,914 17,083,534 0.2
400,000 Simon Property Group, Inc. 10,004,000 10,625,000 0.2
920,000 Walden Residential Properties, Inc.
(Warrants)(a) 1,125,068 345,000 0.0
-------------- -------------- ------
252,815,295 211,120,742 2.8
Retail 800,000 Heilig-Meyers Company 10,547,099 5,800,000 0.1
Retail Stores 1,110,000 Filene's Basement Corporation 10,092,619 1,318,125 0.0
300,000 J. Baker, Inc. 5,134,145 2,250,000 0.0
700,000 Toys 'R' Us, Inc. 15,851,134 11,375,000 0.2
-------------- -------------- ------
31,077,898 14,943,125 0.2
Savings Banks 256,500 Capitol Federal Financial 2,360,355 2,645,156 0.0
Telecommunications 300,000 Allen Telecom Inc. 3,338,218 2,700,000 0.0
120,363 CellNet Data Systems, Inc.
(Warrants)(a) 13,716,570 842,541 0.0
2,770,200 General Communication, Inc. (Class A) 18,631,175 16,621,200 0.2
2,000,000 Glenayre Technologies, Inc. 18,349,484 7,000,000 0.1
621,000 QUALCOMM Incorporated 14,771,309 96,876,000 1.3
47,000 United USN Inc. (Class A) (Warrants)
(a) 5,840,131 47 0.0
14,113 United USN Inc. (Warrants)(a) 1,084,937 14 0.0
18,315 Wireless One, Inc. (Warrants)(a) 18,315 183 0.0
-------------- -------------- ------
75,750,139 124,039,985 1.6
Textiles 2,600,000 Burlington Industries, Inc. 34,175,185 18,037,500 0.2
Tobacco 1,875,700 DIMON Incorporated 29,253,130 10,550,812 0.1
Transportation 304,800 J.B. Hunt Transport Services, Inc. 5,728,020 4,552,950 0.0
380,000 Union Pacific Corporation 16,221,323 20,638,750 0.3
-------------- -------------- ------
21,949,343 25,191,700 0.3
Utilities-- 47,000 BayCorp Holdings, Ltd. 2,466,772 323,125 0.0
Electric & Gas 2,725,000 Citizens Utilities Company (Class B) 23,233,721 32,359,375 0.4
3,937,285 El Paso Electric Company 20,670,746 35,681,645 0.5
1,460,000 Entergy Corporation 38,646,650 44,256,250 0.5
1,410,000 Niagara Mohawk Holdings Inc. 22,129,837 22,207,500 0.3
400,000 Potomac Electric Power Company 9,551,624 11,475,000 0.2
1,057,900 Reliant Energy, Inc. 21,518,567 29,026,131 0.4
458,800 Unicom Corporation 10,593,917 18,007,900 0.2
-------------- -------------- ------
148,811,834 193,336,926 2.5
Total Common Stocks in the
United States 1,675,044,317 1,748,409,402 22.8
Total Investments in Common
Stocks 3,438,139,314 3,810,836,483 49.7
Equity Closed-End Funds
Austria Financial Services 320,000 The Austria Fund (USD) 2,642,432 3,100,000 0.1
Total Equity Closed-End Funds in
Austria 2,642,432 3,100,000 0.1
Indonesia Financial Services 25,600 Jakarta Growth Fund (USD) 158,080 88,000 0.0
Total Equity Closed-End Funds in
Indonesia 158,080 88,000 0.0
Ireland Financial Services 150,000 Irish Investment Fund (USD) 1,086,041 2,512,500 0.0
Total Equity Closed-End Funds in
Ireland 1,086,041 2,512,500 0.0
Italy Financial Services 150,000 Italy Fund (USD) 1,198,520 2,156,250 0.0
Total Equity Closed-End Funds in Italy 1,198,520 2,156,250 0.0
South Financial 81,262 Fidelity Advisor Korea Fund (USD) 708,885 787,226 0.0
Korea Services 200,000 Korea Equity Fund (USD) 1,369,598 1,000,000 0.0
1,400,528 Korea Fund (USD) 19,847,163 19,694,925 0.3
200,000 Korean Investment Fund (USD) 1,561,000 1,487,500 0.0
Total Equity Closed-End Funds in
South Korea 23,486,646 22,969,651 0.3
Total Investments in Equity Closed-End
Funds 28,571,719 30,826,401 0.4
Preferred Stocks
Germany Chemicals 138,305 Henkel KGaA 5,886,677 9,696,730 0.1
Machinery & 96,465 Jungheinrich AG 1,956,463 1,373,307 0.0
Equipment
Medical Equipment 23,235 Fresenius AG 4,591,809 4,451,863 0.1
Multi-Industry 450,000 RWE AG 8,725,424 14,450,400 0.2
Total Preferred Stocks in Germany 21,160,373 29,972,300 0.4
Portugal Banking 181,400 BCP International Bank (8%
Convertible) (USD) 13,480,528 18,049,300 0.2
Total Preferred Stocks in Portugal 13,480,528 18,049,300 0.2
United Cable Television 1,000,000 Diva Systems Corp. (Convertible,
States Series C) 8,410,000 3,000,000 0.0
1,000,000 Diva Systems Corp. (Convertible,
Series D) 11,440,000 3,000,000 0.0
-------------- -------------- ------
19,850,000 6,000,000 0.0
Natural Resources 150,000 Cyprus Amax Minerals Co. (Convertible,
Series A) 9,188,313 5,793,750 0.1
Freeport-McMoRan Copper & Gold Inc.:
219,000 (3.50% Convertible--Gold, Series B) 7,703,330 3,764,062 0.1
348,700 (5% Convertible, Series A) 7,918,834 6,494,537 0.1
-------------- -------------- ------
24,810,477 16,052,349 0.3
Railroads 40,000 Union Pacific Capital Trust (6.25%
Convertible) 1,793,600 1,970,000 0.0
</TABLE>
Merrill Lynch Global Allocation Fund, Inc., July 31, 1999
<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 Real Estate 476,800 Apartment Investment & Management
States Investment Trusts Co. (9.375%, Series G) $ 11,751,900 $ 11,443,200 0.2%
(concluded) 298,746 Bradley Real Estate Inc. (8.40%
Convertible, Series A) 6,471,276 6,908,501 0.1
97,300 CarrAmerica Realty Corporation (8.55%,
Series C) 2,398,445 2,262,225 0.0
400,000 Crown American Realty Trust (11%,
Series A) 17,800,000 18,200,000 0.2
139,200 First Union Real Estate (8.40%
Convertible, Series A) 3,480,000 3,132,000 0.0
1,000,000 First Washington Realty Trust,
Inc. (9.75%, Series A) 25,000,000 29,062,500 0.4
350,000 National Health Investors, Inc.
(8.50% Convertible) 8,750,000 8,137,500 0.1
717,500 Prime Retail, Inc. (10.50%) 16,366,161 14,439,687 0.2
Walden Residential Properties, Inc.:
50,000 (9.16% Convertible, Series B) 1,418,750 1,162,500 0.0
1,078,000 (9.20%, Series S) 26,269,636 22,233,750 0.3
-------------- -------------- ------
119,706,168 116,981,863 1.5
Utilities 77,600 Citizens Utilities Trust (5%
Convertible) 3,398,931 3,938,200 0.1
Total Preferred Stocks in the
United States 169,559,176 144,942,412 1.9
Total Investments in Preferred
Stocks 204,200,077 192,964,012 2.5
Currency Face
Denomination Amount Fixed-Income Securities
Argentina Banking USD 45,000,000 Banco Rio de la Plata, 8.75%
due 12/15/2003 36,900,950 40,275,000 0.5
Food/Dairy USD 23,500,000 Mastellone Hermanos SA, 11.75% due
Products 4/01/2008 23,687,500 16,567,500 0.2
Government City of Buenos Aires:
Obligations ARS 36,550,000 10.50% due 5/28/2004 31,996,453 24,497,319 0.3
USD 38,000,000 11.25% due 4/11/2007 37,715,000 36,480,000 0.5
USD 14,229,000 11.25% due 4/11/2007 (Regulation S) 13,888,779 13,659,840 0.2
Republic of Argentina:
USD 112,204,500 5.938% due 3/31/2005 (d)(g)(k) 83,648,861 92,905,326 1.2
USD 85,000,000 11.375% due 1/30/2017 82,988,125 71,400,000 0.9
USD 80,000,000 6% due 3/31/2023 (d)(k) 55,269,966 52,500,000 0.7
USD 162,150,000 9.75% due 9/19/2027 121,322,855 120,882,825 1.6
-------------- -------------- ------
426,830,039 412,325,310 5.4
Total Fixed-Income Securities in
Argentina 487,418,489 469,167,810 6.1
Brazil Banking Banco Nacional de Desenvolvimiento
Economico e Social:
USD 7,500,000 9% due 9/24/2007 6,675,000 6,000,000 0.1
USD 68,500,000 13.64% due 6/16/2008 (d) 45,061,563 56,855,000 0.7
-------------- -------------- ------
51,736,563 62,855,000 0.8
Government Republic of Brazil (k):
Obligations USD 33,833,380 Exit Bonds, 6% due 9/15/2013 19,684,768 20,300,028 0.3
USD 10,000,000 Par 'L' Bonds, 5.75% due
4/15/2024 (d) 6,100,000 5,525,000 0.1
-------------- -------------- ------
25,784,768 25,825,028 0.4
Industrial USD 13,700,000 Camargo Correa, 8.75% due 7/22/2005 11,841,750 11,028,500 0.1
USD 13,000,000 Globo Comunicacoes e Participacoes,
Ltd., 10.625% due 12/05/2008 12,954,500 9,100,000 0.1
-------------- -------------- ------
24,796,250 20,128,500 0.2
Utilities USD 32,250,000 Espirito Santo-Escelsa, 10% due
7/15/2007 31,726,875 22,736,250 0.3
Total Fixed-Income Securities
in Brazil 134,044,456 131,544,778 1.7
Canada Real CAD 16,501,370 First Place Tower, Inc., 10.92%
Estate due 12/15/2015 (Convertible Bonds)(e) 26,874,771 42,964,295 0.6
Total Fixed-Income Securities in
Canada 26,874,771 42,964,295 0.6
Cayman Multi- USD 50,000,000 Beta Finance Corp., 0.20% due
Islands Industry 5/27/2000 52,859,955 48,900,000 0.6
Total Fixed-Income Securities in
the Cayman Islands 52,859,955 48,900,000 0.6
Chile Utilities-- Empresa Electricidad del Norte:
Electric USD 28,500,000 10.50% due 6/15/2005 28,625,000 19,237,500 0.3
USD 15,800,000 10.50% due 6/15/2005 (Regulation S) 11,354,750 10,665,000 0.1
USD 10,000,000 7.75% due 3/15/2006 5,500,000 5,700,000 0.1
Total Fixed-Income Securities in Chile 45,479,750 35,602,500 0.5
China Multi- USD 8,300,000 Shanghai Industrial Investment
Industry Treasury Co., 1% due 2/24/2003
(Convertible Bonds) 5,320,300 7,864,250 0.1
Utilities-- USD 53,000,000 Huaneng Power International PLC,
Electric 1.75% due 5/21/2004 (Convertible
Bonds) 43,745,126 51,145,000 0.7
Total Fixed-Income Securities
in China 49,065,426 59,009,250 0.8
France Real Estate EUR 20,489,148 Societe Fonciere Lyonnaise SA, 4%
due 10/31/2004 (Convertible Bonds) 23,070,680 24,816,157 0.3
Total Fixed-Income Securities in
France 23,070,680 24,816,157 0.3
Hong Kong Multi- USD 17,250,000 First Pacific Capital Ltd., 2%
Industry due 3/27/2002 (Convertible Bonds) 16,927,221 17,422,500 0.2
USD 16,000,000 Hutchison Delta Finance, 7% due
11/08/2001 (Convertible Bonds) 16,640,000 18,080,000 0.2
Hutchison Whampoa Limited:
USD 49,250,000 7.45% due 8/01/2017 41,025,000 40,261,875 0.5
USD 24,400,000 7.50% due 8/01/2027 19,671,062 19,520,000 0.3
Total Fixed-Income Securities
in Hong Kong 94,263,283 95,284,375 1.2
Indonesia Paper & USD 7,650,000 APP Finance VII Mauritius, 3.50%
Forest due 4/30/2003 (Convertible Bonds) 6,196,500 4,915,125 0.1
Products USD 34,000,000 APP Global Finance V Ltd., 2% due
7/25/2000 (Convertible Bonds) 34,000,000 32,980,000 0.4
USD 3,965,000 PT Indah Kiat Pulp & Paper, 8.875%
due 11/01/2000 3,300,863 3,528,850 0.0
Total Fixed-Income Securities in
Indonesia 43,497,363 41,423,975 0.5
</TABLE>
Merrill Lynch Global Allocation Fund, Inc., July 31, 1999
<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>
Japan Banking JPY 100,000,000 AB International Cayman Trust,
0.50% due 8/01/2007 (Convertible
Bonds) $ 581,630 $ 1,026,412 0.0%
JPY 8,361,000,000 Fuji International Finance Trust,
0.25% due 2/01/2002 (Convertible
Preference Shares) 52,428,058 51,746,077 0.7
USD 21,500,000 MBL International Finance (Bermuda),
3% due 11/30/2002 (Convertible Bonds) 20,533,750 24,940,000 0.3
JPY 3,780,000,000 Sumitomo Bank International
Finance NV, 0.75% due 5/31/2001
(Convertible Bonds) 30,459,074 41,269,613 0.6
-------------- -------------- ------
104,002,512 118,982,102 1.6
Beverages JPY 1,711,000,000 Kinki Coca-Cola Bottling Co.,
Ltd., #1, 0.85% due 12/30/2003
(Convertible Bonds) 14,984,971 18,494,073 0.2
JPY 582,000,000 Shikoku Coca-Cola Bottling Co.,
Ltd., #1, 2.40% due 3/29/2002
(Convertible Bonds) 5,406,026 7,102,510 0.1
-------------- -------------- ------
20,390,997 25,596,583 0.3
Chemicals JPY 301,000,000 Shin-Etsu Chemical Co., Ltd., #6,
0.40% due 9/30/2005 (Convertible
Bonds) 2,987,802 5,837,910 0.1
Electrical JPY 1,339,000,000 Matsushita Electric Works, Ltd.,
Equipment #9, 1% due 11/30/2005
(Convertible Bonds) 13,252,580 12,488,930 0.2
Electronics JPY 650,000,000 Matsushita Electric Industrial
Company, Ltd., #5, 1.30% due 3/29/2002
(Convertible Bonds) 6,133,347 9,620,816 0.1
Financial JPY 862,000,000 Kokusai Securities Co., Ltd., 1.25%
Services due 9/30/2013 (Convertible Bonds) 7,747,314 12,698,570 0.2
Industrial JPY 730,000,000 Fuji Heavy Industries, #4, 0.90% due
9/30/2003 (Convertible Bonds) 6,667,972 12,408,473 0.2
CHF 1,400,000 Nissin Kogyo Co. Ltd., 0.125% due
3/31/2003 (Convertible Bonds) 1,080,777 1,464,592 0.0
JPY 1,200,000,000 Toyoda Automatic Loom Works, #2,
0.35% due 9/30/2003 (Convertible
Bonds) 11,309,650 11,684,100 0.1
-------------- -------------- ------
19,058,399 25,557,165 0.3
Insurance JPY 456,000,000 Mitsui Marine & Fire Insurance Co.,
Ltd., #3, 0.70% due 3/31/2003
(Convertible Bonds) 3,786,983 4,114,017 0.1
JPY 117,000,000 Nichido Fire & Marine Insurance Co.,
Ltd., #5, 1% due 3/31/2003 (Convertible
Bonds) 1,109,381 1,060,669 0.0
Nisshin Fire & Marine Insurance Co.,
Ltd. (Convertible Bonds):
JPY 900,000,000 #1, 0.65% due 3/31/2004 7,132,646 7,390,167 0.1
JPY 1,251,000,000 #2, 0.75% due 3/31/2006 9,639,927 10,097,856 0.1
Sumitomo Marine & Fire Insurance Co.,
Ltd. (Convertible Bonds):
JPY 300,000,000 #3, 1.10% due 3/29/2002 2,522,005 3,028,243 0.0
JPY 1,527,000,000 #4, 1.20% due 3/31/2004 13,104,977 15,773,143 0.2
-------------- -------------- ------
37,295,919 41,464,095 0.5
Total Fixed-Income Securities
in Japan 210,868,870 252,246,171 3.3
Malaysia Oil-- Petroliam Nasional Berhad:
Related USD 69,725,000 7.75% due 8/15/2015 37,589,875 55,431,375 0.7
USD 98,314,000 7.625% due 10/15/2026 61,147,377 73,735,500 1.0
-------------- -------------- ------
98,737,252 129,166,875 1.7
Telecommuni- Telekom Malaysia Berhad:
cations USD 45,750,000 4% due 10/03/2004 (Convertible
Bonds) 37,124,375 38,658,750 0.5
USD 25,825,000 7.875% due 8/01/2025 14,208,485 20,272,625 0.3
-------------- -------------- ------
51,332,860 58,931,375 0.8
Total Fixed-Income Securities
in Malaysia 150,070,112 188,098,250 2.5
Mexico Government USD 27,000,000 United Mexican States, 6.25% due
Obligations 12/31/2019 (k) 20,351,250 19,089,000 0.3
Oil-- Petroleos Mexicanos:
Related USD 57,000,000 9.25% due 3/30/2018 (Regulation S) 50,820,000 47,025,000 0.6
USD 45,150,000 8.625% due 12/01/2023 25,007,000 34,314,000 0.4
-------------- -------------- ------
75,827,000 81,339,000 1.0
Total Fixed-Income Securities
in Mexico 96,178,250 100,428,000 1.3
New Zealand Government NZD 15,000,000 New Zealand Index Linked Notes,
Obligations Series 216, 4.50% due 2/14/2016 8,418,821 8,227,135 0.1
Total Fixed-Income Securities in
New Zealand 8,418,821 8,227,135 0.1
Russia Government USD 44,800,000 City of St. Petersburg, 9.50% due
Obligations 6/18/2002 8,604,062 24,640,000 0.3
Russian Federation Bonds:
USD 92,100,000 8.75% due 7/24/2005 20,153,919 45,819,750 0.6
USD 132,750,000 12.75% due 6/24/2028 121,509,538 74,340,000 1.0
USD 5,150,000 12.75% due 6/24/2028 (Regulation S) 1,572,037 2,884,000 0.0
-------------- -------------- ------
151,839,556 147,683,750 1.9
Oil & Gas USD 13,250,000 Lukinter Finance, 3.50% due
Producers 5/06/2002 (Convertible Bonds) 11,016,688 8,877,500 0.1
Telecommuni- PLD Telekom Inc. (i):
cations USD 74,500,000 14% due 6/01/2004 74,500,000 51,405,000 0.7
USD 18,700,000 9% due 6/01/2006 (Convertible
Bonds) 18,756,250 10,659,000 0.1
-------------- -------------- ------
93,256,250 62,064,000 0.8
Utilities USD 37,050,000 Mosenergo Finance BV, 8.375% due
10/09/2002 11,303,563 21,118,500 0.3
Total Fixed-Income Securities
in Russia 267,416,057 239,743,750 3.1
Singapore Multi- USD 7,250,000 Far East Livingston Shipyards, 1.50%
Industry due 5/02/2001 (Convertible Bonds) 5,945,450 6,380,000 0.1
Keppel Corporation Limited (Redeemable
Cumulative Convertible Preference
Shares):
USD 15,200,000 2% due 8/12/2002 15,192,500 15,656,000 0.2
USD 1,300,000 2% due 8/12/2002 (Regulation S) 1,198,299 1,339,000 0.0
-------------- -------------- ------
22,336,249 23,375,000 0.3
Telecommuni- USD 18,400,000 Fullerton Global Corp., 0% due
cations 4/02/2003 (Convertible Bonds)(b) 16,964,327 18,308,000 0.2
Total Fixed-Income Securities
in Singapore 39,300,576 41,683,000 0.5
South Insurance USD 36,300,000 LibLife International, 6.50% due
Africa 9/30/2004 (Convertible Bonds) 37,208,125 34,528,560 0.5
Total Fixed-Income Securities in
South Africa 37,208,125 34,528,560 0.5
</TABLE>
Merrill Lynch Global Allocation Fund, Inc., July 31, 1999
<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>
South Banking Koram Bank Ltd. (Convertible Bonds):
Korea USD 1,500,000 0.25% due 8/26/2007 $ 1,447,500 $ 1,590,000 0.0%
USD 5,750,000 0.25% due 8/26/2007 (Regulation S) 5,291,426 6,095,000 0.1
-------------- -------------- ------
6,738,926 7,685,000 0.1
Electronics USD 21,700,000 Samsung Electronics Co., 0% due
Energy 12/31/2007 (Regulation S)
Related (Convertible Bonds)(b) 19,722,938 28,427,000 0.4
Ssangyong Oil Refining Co.:
USD 9,755,000 3% due 12/31/2004 (Convertible
Bonds) 7,206,838 7,316,250 0.1
USD 13,190,000 3.75% due 12/31/2008 13,873,562 14,904,700 0.2
-------------- -------------- ------
21,080,400 22,220,950 0.3
Machinery CHF 10,000,000 Medison Co., 0.25% due 3/06/2002
& Equipment (Convertible Bonds) 6,433,041 7,711,910 0.1
Utilities-- USD 17,750,000 Korea Electric Power Corp., 5%
Electric due 8/01/2001 (Convertible Bonds) 15,968,050 17,439,375 0.2
Total Fixed-Income Securities in
South Korea 69,943,355 83,484,235 1.1
Thailand Metals USD 44,000,000 NSM Steel Inc., 12% due 2/01/2006 40,311,012 11,000,000 0.1
--Steel
Total Fixed-Income Securities
in Thailand 40,311,012 11,000,000 0.1
United Financial GBP 12,250,000 Liberty International PLC, 5.50%
Kingdom Services due 4/30/2009 (Convertible Bonds) 15,274,103 20,489,962 0.3
Telecommuni- USD 26,200,000 International Cabletel, Inc.,
cations 0/11.50% due 2/01/2006 (b) 22,313,468 22,728,500 0.3
GBP 14,250,000 NTL Incorporated, 0/10.75% due
4/01/2008 (b) 13,958,244 15,697,800 0.2
-------------- -------------- ------
36,271,712 38,426,300 0.5
Total Fixed-Income Securities in
the United Kingdom 51,545,815 58,916,262 0.8
United Airlines USD 14,000,000 Trans World Airlines, 11.375% due
States 3/01/2006 14,000,000 8,540,000 0.1
Financial USD 3,445,000 Ugly Duckling Corporation, 12% due
Services 10/15/2003 3,093,610 3,272,750 0.0
Food & USD 15,000,000 Tom's Foods Inc., 10.50% due
Beverage 11/01/2004 15,000,000 13,350,000 0.2
Healthcare USD 17,450,000 American Retirement Corp., 5.75%
due 10/01/2002 (Convertible Bonds) 17,174,000 13,960,000 0.2
Industrial USD 8,000,000 Bar Technologies Ltd., 13.50% due
4/01/2001 7,412,450 7,920,000 0.1
USD 25,000,000 CTI Holdings SA, 0/11.50% due
4/15/2008 (b) 16,328,297 11,875,000 0.2
-------------- -------------- ------
23,740,747 19,795,000 0.3
Metals USD 2,442,500 Worthington Industries, Inc.
--Steel (Convertible, Series DECS), 7.25% 38,015,300 19,845,312 0.3
Real Estate Security Capital U.S. Realty
(Convertible Bonds):
USD 53,100,000 2% due 5/22/2003 44,519,732 39,294,000 0.5
USD 3,650,000 2.50% due 5/22/2003 (Regulation S) 2,729,174 2,701,000 0.1
-------------- -------------- ------
47,248,906 41,995,000 0.6
Real Estate USD 25,500,000 Alexander Haagen Properties, Inc.,
Investment 7.25% due 12/27/2003 (Exchangeable
Trusts Debentures) 25,291,250 24,017,813 0.3
USD 6,165,000 Centerpoint Properties Trust, 8.22%
due 1/15/2004 (Convertible Bonds) 6,165,000 12,106,519 0.2
HRPT Properties Trust (Convertible
Bonds):
USD 40,000,000 7.25% due 10/01/2001 40,000,000 37,500,000 0.5
USD 15,000,000 7.50% due 10/01/2003 15,000,000 13,650,000 0.2
USD 4,500,000 Healthcare Realty Trust, Inc., 6.55%
due 3/14/2002 (Convertible Bonds) 4,247,059 4,061,250 0.1
LTC Properties, Inc. (Convertible
Bonds):
USD 10,000,000 8.25% due 9/30/1999 10,000,000 9,950,000 0.1
USD 8,000,000 8.50% due 1/01/2001 8,000,000 7,510,000 0.1
USD 3,700,000 8.25% due 7/01/2001 3,644,500 3,390,125 0.0
USD 25,000,000 Leperq Corporate Income Fund, 8% due
3/17/2004 (Exchangeable Secured Notes) 25,000,000 23,906,250 0.3
USD 5,675,000 Liberty Property LP, 9% due 7/01/2001
(Convertible Bonds)(d) 5,675,000 6,866,750 0.1
USD 27,000,000 Malan Realty Investors, Inc., 8.50%
due 7/15/2003 (Convertible Bonds) 27,000,000 25,042,500 0.3
USD 9,415,000 Meditrust Corporation, 8.54% due
7/01/2000 (Convertible Bonds) 9,602,638 9,003,094 0.1
USD 5,000,000 Mid-Atlantic Realty Trust, 7.625% due
9/15/2003 (Convertible Bonds) 4,875,000 5,025,000 0.1
National Health Investors, Inc.
(Convertible Bonds):
USD 22,000,000 7.75% due 1/01/2001 22,000,000 20,047,500 0.3
USD 4,500,000 7% due 2/01/2004 3,351,130 3,386,250 0.0
USD 27,800,000 Omega Healthcare Investors, Inc.,
8.50% due 2/01/2001 (Convertible
Bonds) 27,846,000 27,661,000 0.3
USD 5,500,000 Sizeler Property Investors, Inc.,
8% due 7/15/2003 (Convertible
Bonds) 5,505,000 5,197,500 0.1
-------------- -------------- ------
243,202,577 238,321,551 3.1
Retail USD 12,500,000 Coinstar, Inc., 0/13% due 10/01/2006
Savings (b)(j) 12,213,168 12,906,250 0.1
Banks USD 21,400,000 FirstFed Financial Corp., 11.75% due
10/01/2004 21,401,250 22,630,500 0.3
Telecommuni- USD 120,363,000 CellNet Data Systems, Inc., 0/14%
cations due 10/01/2007 (b) 64,952,000 49,950,645 0.7
Centennial Communications Corp. (b):
USD 40,000,000 0/14% due 1/01/2005 25,177,523 14,800,000 0.2
USD 11,925,186 0/9% due 7/01/2006 11,163,854 5,485,586 0.1
USD 118,922,000 Geotek Communications, Inc., 0/15%
due 7/15/2005 (b) 64,294,958 49,947,240 0.7
Telegroup Inc.:
USD 21,750,000 0/10.50% due 11/01/2004 (b) 19,233,387 8,265,000 0.1
USD 22,000,000 8% due 4/15/2005 (Convertible Bonds) 22,000,000 2,200 0.0
USN Communications, Inc. (b):
USD 32,032,000 0/14.625% due 8/15/2004 20,906,768 2,082,080 0.0
USD 12,697,035 0/9% due 1/13/2006 11,171,685 1,270 0.0
USD 30,000,000 United International Holdings,
0/10.75% due 2/15/2008 (b)(f) 20,697,977 17,850,000 0.2
United USN Inc. (b):
USD 17,000,000 0/14% due 9/15/2003 (h) 13,417,349 1,105,000 0.0
USD 35,000,000 0/9% due 9/30/2004 (Convertible
Bonds) 34,484,729 3,500 0.0
-------------- -------------- ------
307,500,230 149,492,521 2.0
</TABLE>
Merrill Lynch Global Allocation Fund, Inc., July 31, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (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 Trucking USD 28,250,000 AmeriTruck Distribution Corp.,
States 12.25% due 11/15/2005 $ 26,444,325 $ 1,412,500 0.0%
(concluded)
US USD 135,000,000 US Treasury Inflation Indexed
Government Notes, 3.375% due 1/15/2007 133,163,156 135,641,981 1.8
Obligations USD 95,000,000 US Treasury Notes, 5.875% due
2/15/2000 (c) 93,926,953 95,341,050 1.2
-------------- -------------- ------
227,090,109 230,983,031 3.0
Total Fixed-Income Securities
in the United States 996,124,222 776,504,415 10.2
Venezuela Finance USD 8,443,000 CANTV Finance Ltd., 9.25% due
2/01/2004 8,231,925 7,007,690 0.1
Total Fixed-Income Securities in
Venezuela 8,231,925 7,007,690 0.1
Total Investments in Fixed-Income
Securities 2,932,191,313 2,750,580,608 35.9
Short-Term Securities
United Commercial USD 30,000,000 CSW Credit Inc., 5.07% due 8/16/1999 29,932,400 29,932,400 0.4
States Paper* USD 150,991,000 General Electric Capital Corp.,
5.13% due 8/02/1999 150,947,968 150,947,968 1.9
USD 25,000,000 Newell Rubbermaid Inc., 5.07% due
8/20/1999 24,929,583 24,929,583 0.3
USD 30,000,000 Paccar Financial, 5.07% due 8/19/1999 29,919,725 29,919,725 0.4
USD 25,000,000 The Times Mirror Company, 5% due
8/10/1999 24,965,278 24,965,278 0.3
USD 20,000,000 Vodafone Airtouch PLC, 5.07% due
8/19/1999 19,946,483 19,946,483 0.3
USD 20,000,000 Wal-Mart Stores, Inc., 5.10% due
8/11/1999 19,968,833 19,968,833 0.3
USD 20,000,000 Xerox Capital (Europe) PLC, 5.08%
due 9/17/1999 19,864,534 19,864,534 0.3
-------------- -------------- ------
320,474,804 320,474,804 4.2
US USD 30,369,000 Federal Home Loan Mortgage
Government Corporation, 4.94% due 8/16/1999 30,302,323 30,302,323 0.4
Agency
Obligations*
Total Investments in Short-Term
Securities 350,777,127 350,777,127 4.6
Total Investments 6,953,879,550 7,135,984,631 93.1
OPTIONS Nominal Value Premiums
WRITTEN Covered by Options Issue Received
Call Options 300,000 Compaq Computer Corporation, expiring
Written October 1999 at USD 35 (1,565,948) (56,250) 0.0
Total Options Written (1,565,948) (56,250) 0.0
Total Investments, Net of Options Written $6,952,313,602 7,135,928,381 93.1
==============
Variation Margin on Financial Futures Contracts** 5,457,785 0.1
Unrealized Depreciation on Forward Foreign Exchange Contracts--Net*** (31,364,082) (0.4)
Other Assets Less Liabilities 553,641,470 7.2
-------------- ------
Net Assets $7,663,663,554 100.0%
============== ======
Net Asset Value: Class A--Based on net assets of $1,348,630,099 and
91,291,600 shares outstanding $ 14.77
==============
Class B--Based on net assets of $4,753,076,229 and
326,991,028 shares outstanding $ 14.54
==============
Class C--Based on net assets of $333,190,604 and
23,232,438 shares outstanding $ 14.34
==============
Class D--Based on net assets of $1,228,766,622
and 83,288,364 shares outstanding $ 14.75
==============
<FN>
(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 are subject 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)Floating rate note.
(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.
(g)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.
(h)Each $1,000 face amount contains one warrant of United USN Inc.
(i)Each $1,000 face amount contains one warrant of PLD Telekom Inc.
(j)Each $1,000 face amount contains one warrant of Coinstar, Inc.
(k)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.
++American Depositary Receipts (ADR).
++++Global Depositary Receipts (GDR).
*Commercial Paper and certain USGovernment Agency Obligations are
traded on a discount basis. The interest rates shown reflect the
discount rates paid at July 31, 1999.
**Financial futures contracts purchased as of July 31, 1999 were as
follows:
Number of Expiration
Contracts Issue Exchange Date Value
662 Nikkei 225 OSAKA September 1999 $ 102,081,416
-------------
Total Financial Futures Contracts Purchased
(Total Contract Price--$92,675,384) $ 102,081,416
=============
Financial futures contracts sold as of July 31, 1999 were as
follows:
Number of Expiration
Contracts Issue Exchange Date Value
170 Japanese
Government
Bond Tokyo September 1999 $ 194,080,370
375 Standard &
Poor's 500
Index NYSE September 1999 124,856,250
-------------
Total Financial Futures Contracts Sold
(Total Contract Price--$321,985,578) $ 318,936,620
=============
***Forward foreign exchange contracts as of July 31, 1999 were as follows:
Foreign Expiration Unrealized
Currency Sold Date Depreciation
CHF 40,000,000 August 1999 $ (852,804)
CHF 4,500,000 September 1999 (64,183)
GBP 20,000,000 August 1999 (1,275,200)
GBP 61,000,000 September 1999 (3,299,055)
JPY 35,000,000,000 August 1999 (14,375,711)
JPY 31,000,000,000 September 1999 (9,741,708)
NOK 172,000,000 September 1999 (378,834)
SEK 375,000,000 September 1999 (1,376,587)
--------------
Total Unrealized Depreciation on Forward
Foreign Exchange Contracts--Net
(USD Commitment--$774,937,749) $ (31,364,082)
==============
</TABLE>
Merrill Lynch Global Allocation Fund, Inc., July 31, 1999
COMMON STOCK PORTFOLIO CHANGES
For the Quarter Ended July 31, 1999
Additions
Ace Limited
*Amway Japan Limited (ADR)
Cadbury Schweppes PLC
Clarica Life Insurance Co.
Coca-Cola West Japan Company Limited
Endesa SA
Glaxo Wellcome PLC
Key Energy Services, Inc.
Northern Rock PLC
Rentokil Initial PLC
Deletions
American Capital Strategies, Ltd.
*Amway Japan Limited (ADR)
CellNet Data Systems, Inc.
Credit Suisse Group (Registered Shares)
Cypress Semiconductor Corporation
Fort James Corporation
Koninklijke (Royal) Philips Electronics NV
Leap Wireless International, Inc.
PLATINUM technology International, inc.
Saga Petroleum ASA
Sanyo Coca-Cola Bottling Co., Ltd.
Taubman Centers, Inc.
United HealthCare Corporation
YPF Sociedad Anonima (ADR)
[FN]
*Added and deleted in the same quarter.
PORTFOLIO INFORMATION
Worldwide
Investments
As of 7/31/99
Breakdown of Stocks &
Fixed-Income Securities by Percent of
Country Net Assets
United States* 39.5%
Japan 13.5
Argentina 6.5
Russia 3.2
Australia 2.9
South Korea 2.5
Malaysia 2.5
Hong Kong 2.4
Brazil 2.1
United Kingdom 2.1
Germany 2.1
Canada 1.8
Mexico 1.5
France 1.4
Netherlands 1.4
Indonesia 1.2
China 0.8
Italy 0.7
Cayman Islands 0.6
Sweden 0.6
Singapore 0.5
Chile 0.5
South Africa 0.5
Finland 0.5
Portugal 0.4
Norway 0.4
Thailand 0.2
Switzerland 0.2
Austria 0.2
New Zealand 0.1
Venezuela 0.1
Hungary 0.1
Spain 0.1
Ireland** 0.0
Philippines** 0.0
Bermuda** 0.0
[FN]
*Includes investments in short-term securities.
**Holdings are less than 0.1%.
Ten Largest Holdings Percent of
(Equity Investments) Net Assets
QUALCOMM Incorporated 1.3%
Broken Hill Proprietary Company
Limited 1.2
Daiwa Securities Group Inc. 1.0
Hutchison Whampoa Limited 0.9
Pohang Iron & Steel Company Ltd. 0.8
Noble Drilling Corporation 0.8
Murata Manufacturing Co., Ltd. 0.8
Suzuki Motor Corporation 0.7
Republic New York Corporation 0.7
Security Capital Group Incorporated
(Class B) 0.7
Ten Largest Industries Percent of
(Equity Investments) Net Assets
Banking 5.2%
Insurance 3.9
Telecommunications 3.7
Real Estate Investment Trusts 2.8
Utilities--Electric & Gas 2.5
Multi-Industry 1.9
Financial Services 1.9
Metals & Mining 1.9
Real Estate 1.8
Electronics 1.7
