MERRILL
LYNCH
WORLD
INCOME
FUND, INC.
FUND LOGO
Quarterly Report March 31, 1994
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.
Merrill Lynch
World Income Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
MERRILL LYNCH WORLD INCOME FUND, INC.
Officers and
Directors
Arthur Zeikel, President and Director
Kenneth S. Axelson, Director
Herbert I. London, Director
Robert R. Martin, Director
Joseph L. May, Director
Andre F. Perold, Director
Terry K. Glenn, Executive Vice President
N. John Hewitt, Senior Vice President
Donald C. Burke, Vice President
Vincent T. Lathbury III, Vice President
Robert J. Parish, Vice President
Aldona Schwartz, Vice President
Gerald M. Richard, Treasurer
Mark B. Goldfus, Secretary
<PAGE>
Custodian
State Street Bank & Trust Company
225 Franklin Street
Boston, Massachusetts 02110
Transfer Agent
Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, Florida 32246-6484
(800) 637-3863
DEAR SHAREHOLDERS
Beginning with Chairman Alan Greenspan's semi-annual Humphrey-
Hawkins Senate testimony in late January, the US Federal Reserve
Board has raised concerns of heightened inflationary pressures
among global bond markets. Ironically, however, recent infla-
tionary reports among the Group of Seven industrialized nations
(G-7) suggest stable or declining price pressures. Now, follow-
ing three hikes in the Federal Funds rate since early February,
the bull market for US bonds, which began in the second quarter
of 1990, has effectively ended. During the March quarter, Euro-
pean bond markets generally sold off in sympathy with develop-
ments within the US bond market. European markets also have been
negatively affected by domestic political events and the Bundes-
bank's failure to ease monetary policy rapidly enough to satisfy
investor expectations and to match current depressed economic
fundamentals. In Japan, while economic prospects remain depressed,
bond market developments have been dominated recently by turbulent
domestic politics and foreign trade relations.
During the March quarter, the US dollar remained strong versus
the major currencies (especially the Deutschemark), buoyed by the
state of European and Japanese economic conditions, declining
short-term interest rate differentials, and continuing evidence
of the US economic recovery. However, it is believed that height-
ened pressures surrounding the Clinton Administration's involve-
ment in the Whitewater affair and investors' displeasure over
the Federal Reserve Board's new monetary policy tactics have
restrained the US dollar's appreciation, despite the tense situ-
ations brewing in Russia, Bosnia and Herzegovina, and North
Korea.
<PAGE>
While the Federal Reserve Board has launched an attack against
inflationary pressures, the recent report placing domestic an-
nual inflation at 2.5% suggests such pressures remain constrained.
With investor perception that the Federal Reserve Board's new
neutral target for the Federal Funds rate is 4% (now at 3.75%),
another increase to that level, or possibly higher, is expected
either before or during its mid-May meeting. It is believed that
the recent dramatic upward shift in the US yield curve to similar
year-ago levels may have already begun to hamper the economy's
prospects for continued recovery. Moreover, evidence that first
quarter growth was not as robust as fourth quarter 1993's 7.0%
level has begun to surface, as the majority of 1993's gains were
registered in non-recurring inputs such as housing and vehicle
purchases. Additionally, higher tax burdens also may have a
dampening effect on the recovery's prospects.
While the German bond market has been frustrated for the majority
of the March quarter by the Bundesbank's earlier failure to ease
monetary policy rapidly enough to satisfy investors' wishes, re-
cent reports of lower inflation, combined with moderate labor
union wage agreements, have caused the Bundesbank to cut both
the Lombard and discount rates in an effort to match monetary
policy with chronically depressed economic conditions. However,
because the origin of many of Germany's economic ills are em-
bedded in intricate structural issues, the recession is expected
to persist until later this year.
Thus far in 1994, the Japanese bond market has been dominated by
both domestic politics and foreign trade relations. The yen's
strong value versus the principal traded currencies has contri-
buted to declining economic growth, as the erosion of indus-
trial competitiveness and corporate profits have caused unfore-
seen record rises in unemployment. The recently approved eco-
nomic stimulus package, designed to cure many of the economy's
ills, has heightened investors' fears about a significant bond
supply that will be necessary to finance future economic pro-
grams. Following Prime Minister Hosokawa's recent resignation
and the heightened prospects of a trade war against the United
States, the yen and Japanese bond market are expected to remain
volatile over the near term.
<PAGE>
Since the beginning of 1994, the Canadian dollar and bond market
have been unduly pressured, following improving economic reports,
the 1994-1995 federal budget plan and in sympathy with the ad-
verse developments in the US bond market. Canada's annual rate
of inflation was recently reported at 0.2%, the lowest level
among the G-7 nations. Although the Bank of Canada has repeat-
edly increased the short-term bank rate to defend the currency,
the Canadian dollar has continued to weaken versus the US dollar
as investors remain anxious about the government's plan to cor-
rect the nation's fiscal position.
Global Outlook & Strategy
Given current international market conditions, we have main-
tained the Fund's overweighted US-dollar concentration, fav-
oring high-yield bonds. Such conditions continue to dictate a
defensive strategy to seek to reduce the Fund's exposure to
currency volatility and to allow for higher potential returns.
Over the past several months, we have maintained the Fund's
exposures in Australia, Spain, Sweden and the United Kingdom.
However, with the prospect of further currency volatility in
these markets, we have maintained hedges against these invest-
ments. Persistent economic and political pressures affecting
both the Belgian and French markets have caused us to reduce
the Fund's exposure to investments in these markets. Addition-
ally, because of current undue weakness of the Canadian dollar
and bond market in relation to their fundamental prospects, we
have overweighted the Fund's exposure to Canadian investments.
Given the significant sell-off among global markets during the
quarter, bonds in general now represent excellent investment
value. However, factors that may jeopordize a recovery include
a further unwinding of highly leveraged positions by major in-
vestors, the maintenance of very strong growth in the US eco-
nomy, and the continuation of the bear market investor psycho-
logy.
<PAGE>
Should growth prospects in the United States remain stable at
around a 3% level in a moderate inflationary environment (2.5%--
3.0% range), US bonds at current levels offer attractive value.
At present, the US dollar is influenced by a broad mix of in-
ternational economic and political issues within a broad trad-
ing range. While Australian and Canadian bond markets outper-
formed US investments during fourth quarter 1993, this year's
significant sell-off in those markets year has retraced last
year's gains. However, based on rather low inflation rates,
real interest rate levels now available in the Australian and
Canadian markets offer tremendous value. As depressed European
economic conditions have heightened the prospects for addition-
al central bank monetary policy easings, the eventual decoupling
of European bonds from the US bond market would permit substan-
tial outperformance over US investments.
High-Yield Market
The March quarter proved to be a difficult one for a broad cross
section of investment markets. While the high-yield corporate
bond market fared better than most, the total return of the un-
managed Merrill Lynch High Yield Master Index was -0.86%. While
the quarter commenced with strong demand and an upward bias in
high-yield bond prices, in late February the market succumbed
to the pressure of rising interest rates in competing bond sec-
tors, and prices retreated. The price decline was moderated by
the postponement of a large amount of new-issue supply. Price
declines were relatively even across quality sectors, with some
modest market outperformance by securities rated BB compared to
B-rated bonds. At March quarter-end, the yield on average B-
rated industrials maturing in seven-years--ten years was 10.5%--
11.5%, and the yield on BB-rated securities was 9.0%--10.0%. The
yield spread between high-yield bonds and US Treasury bonds and
notes narrowed over the course of the quarter by 50 basis points
(0.50%), providing yield premiums in the 45%--50% range.
The impact of a 50 basis point rise in short-term interest rates
on the long-term market surprised most forecasters. With an ex-
traordinarily wide spread between short-term and long-term in-
terest rates, the yield curve was historically quite steep prior
to the Federal Reserve Board's tightening of monetary policy.
It appeared that the long-term bond market investors were an-
ticipating a rise in short-term interest rates. However, long-
term interest rates rose about twice as much as short-term in-
terest rates in the wake of the increases in the Federal Funds
rates. The violent movement of the long-term markets seems to
reflect the unwinding of speculative leveraging. When investors
begin to assume a more rational view, we believe that yields
in the long-term US Treasury market will settle in the 7% area,
and the yield curve will remain extraordinarily steep. We also
believe that likely further rises in short-term interest rates
in 1994 will have a minimal impact on the long-term market.
<PAGE>
In a relatively robust economic environment, credit sensitivity
of investors is likely to remain low. Last year's default rates
in the high-yield universe were about 1%, the lowest since 1984.
We believe that results will be similar this year as strong cor-
porate profits and reequitization continue to benefit the high-
yield market. For these reasons, it seems likely that yield
spreads between high-yield bonds and US Treasury securities will
remain stable or perhaps narrow a bit more over the remainder
of the year.
Cash flows into high-yield mutual funds reversed sharply in late
February and have been erratic ever since. We believe that the
investment case for high-yield securities remains compelling and
that cash flows will reestablish themselves. In the near term,
however, the pressure of new-issue supply seems likely to create
erratic price fluctuations. We expect this period to be conducive
to accumulating very attractively priced new issues.
Major industries represented in the portfolio included: energy,
4.54%; conglomerates, 3.18%; food & beverage, 5.50%; broadcasting
& publishing, 3.21%; and health services, 2.78%.
We thank you for your continued investment in Merrill Lynch World
Income Fund, Inc., and we look forward to reviewing our outlook
and strategy with you again in our upcoming semi-annual report to
shareholders.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
Vice President
(Vincent T. Lathbury)
Vincent T. Lathbury III
Vice President and Portfolio Manager
(Robert J. Parish)
Robert J. Parish
Vice President and Portfolio Manager
May 3, 1994
<PAGE>
PERFORMANCE DATA
None of the past results shown should be considered a representation
of future performance. Investment return and principal value of Class
A and Class B Shares will fluctuate so that shares, when redeemed,
may be worth more or less than their original cost.
<TABLE>
Performance
Summary--
Class A Shares++
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<C> <C> <C> <C> <C> <C>
9/29/88--12/31/88 $9.35 $9.68 -- $0.280 + 6.53%
1989 9.68 9.13 $0.002 1.159 + 6.32
1990 9.13 8.53 -- 1.463 + 9.46
1991 8.53 9.30 -- 1.106 +21.99
1992 9.30 8.85 0.019 0.990 + 6.15
1993 8.85 9.28 0.028 0.750 +14.12
1/1/94--3/31/94 9.28 8.86 -- 0.147 - 2.77
------ ------
Total $0.049 Total $5.895
Cumulative total return as of 3/31/94: +81.51%**
<FN>
++Performance results for per share net asset value of Class A
Shares prior to November 18, 1991 are for the period when the
Fund was closed-end.
*Figures may include short-term capital gains distributions.
**Figures assume reinvestment of all dividends and capital gains
distributions at net asset value on the payable date, and do
not include sales charge; results would be lower if sales
charge was included.
</TABLE>
<PAGE>
<TABLE>
Performance
Summary--
Class B Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<C> <C> <C> <C> <C> <C>
11/18/91--12/31/91 $9.26 $9.30 -- $0.112 + 1.64%
1992 9.30 8.85 $0.019 0.919 + 5.34
1993 8.85 9.28 0.028 0.681 +13.27
1/1/94--3/31/94 9.28 8.86 -- 0.132 - 2.93
------ ------
Total $0.047 Total $1.844
Cumulative total return as of 3/31/94: +17.72%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures assume reinvestment of all dividends and capital gains
distributions at net asset value on the payable date, and do not
reflect deduction of any sales charge; results would be lower
if sales charge was deducted.
</TABLE>
<TABLE>
Recent
Performance
Results*
<CAPTION>
12 Month 3 Month
3/31/94 12/31/93 3/31/93 % Change % Change
<S> <C> <C> <C> <C> <C>
Class A Shares $8.86 $9.28 $9.11 -2.45%(1) -4.53%
Class B Shares 8.86 9.28 9.10 -2.34(1) -4.53
Class A Shares--Total Return +5.58(2) -2.77(3)
Class B Shares--Total Return +4.91(4) -2.93(5)
Class A Shares--Standardized 30-day Yield 7.21%
Class B Shares--Standardized 30-day Yield 6.72%
<PAGE>
<FN>
*Investment results shown for the 3-month and 12-month periods
are before the deduction of any sales charges.
(1) Percent change includes reinvestment of $0.028 per share capital
gains distributions.
(2) Percent change includes reinvestment of $0.730 per share ordinary
income dividends and $0.028 per share capital gains distributions.
(3) Percent change includes reinvestment of $0.147 per share ordinary
income dividends.
(4) Percent change includes reinvestment of $0.660 per share ordinary
income dividends and $0.028 per share capital gains distributions.
(5) Percent change includes reinvestment of $0.132 per share ordinary
income dividends.
</TABLE>
Average Annual
Total Return++
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 3/31/94 + 5.58% + 1.36%
Five Years Ended 3/31/94 +11.38 +10.47
Inception (9/29/88) through 3/31/94 +11.44 +10.62
[FN]
++Performance results for per share net asset value of Class A Shares prior to
November 18, 1991 are for the period when the Fund was closed-end.
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 3/31/94 + 4.91% + 1.02%
Inception (11/18/91) through 3/31/94 + 7.14 + 6.40
[FN]
*Maximum contingent deferred sales charge is 4% and is reduced to 0% after
4 years.
**Assuming payment of applicable contingent deferred sales charge.
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (in US dollars)
<CAPTION>
LATIN AMERICA
AND THE
CARIBBEAN Face Percent of
Industries Amount Fixed-Income Investments Cost Value Net Assets
<S> <S> <S> <C> <S> <C> <C> <C>
Argentina Banking US$ 2,000,000 Banco de Galicia y Buenos Aires, S.A.,
9.75% due 10/08/1997 $ 2,097,500 $ 2,030,000 0.08%
6,750,000 Banco Rio de la Plata, S.A., 8.75%
due 12/15/2003 6,882,000 6,049,688 0.25
------------ ------------ -------
8,979,500 8,079,688 0.33
Energy 4,000,000 Transportadora de Gas del Sur, 7.75%
due 12/23/1998 4,072,500 3,772,500 0.16
7,500,000 YPF S.A., 8.00% due 2/15/2004 7,525,500 6,684,375 0.28
------------ ------------ -------
11,598,000 10,456,875 0.44
Foreign Republic of Argentina:
Government 7,000,000 8.25% due 8/02/2000 7,038,405 6,593,125 0.28
Obligations 10,000,000 8.375% due 12/20/2003 9,936,800 8,950,000 0.37
------------ ------------ -------
16,975,205 15,543,125 0.65
Industrial 7,000,000 Compania Naviera Perez Companc
Services S.A.C.F.I.M.F.A. S.A., 8.375% due
7/30/1998 7,120,334 6,790,000 0.28
Telecommuni- 7,500,000 Telecom Argentina Stet--France Telecom,
cations S.A., 8.375% due 10/18/2000 7,471,125 7,012,500 0.29
7,000,000 Telefonica de Argentina, S.A., 8.375% due
10/01/2000 7,025,800 6,580,000 0.27
------------ ------------ -------
14,496,925 13,592,500 0.56
Total Fixed-Income Investments in
Argentina 59,169,964 54,462,188 2.26
Colombia Foreign 3,000,000 Financiera Energetica Nacional, S.A.,
Government 6.625% due 12/13/1996 2,977,500 2,917,500 0.12
Obligations-- 7,800,000 Republic of Colombia, 7.25% due
Agency 2/23/2004 7,746,238 7,156,500 0.30
------------ ------------ -------
10,723,738 10,074,000 0.42
Total Fixed-Income Investments in
Colombia 10,723,738 10,074,000 0.42
<PAGE>
Mexico Banking 3,000,000 Grupo Financiero Bancomer, S.A. de C.V.,
Food & 8.00% due 7/07/1998 3,063,750 2,955,000 0.12
Food & 4,000,000 Fomento Economico Mexico, S.A. (Femsa),
Beverage 9.50% due 7/22/1997 4,141,875 4,110,000 0.17
3,500,000 Grupo Embotellador de Mexico, S.A. de C.V.
(GGEMEX), 10.75% due 11/19/1997 3,752,500 3,731,875 0.16
------------ ------------ -------
7,894,375 7,841,875 0.33
Foreign 6,000,000 Banco Nacional de Commerce Exterior, 8.00%
Government & due 8/05/2003 5,947,500 5,362,500 0.22
Agency 4,000,000 Nacional Financiera, 10.625% due
Obligations Pound 11/22/2001 4,420,000 4,200,000 0.18
Sterling 10,000,000 United Mexican States, Government Bond,
12.25% due 12/03/1998 17,422,207 16,419,792 0.68
------------ ------------ -------
27,789,707 25,982,292 1.08
Industrial Cemex, S.A.:
Services US$ 2,500,000 10.00% due 11/05/1999 2,570,375 2,587,500 0.11
4,000,000 8.50% due 8/31/2000 4,049,800 3,890,000 0.16
2,000,000 Grupo Situr, S.A. de C.V., 8.75%
due 9/14/1998 2,050,000 1,920,000 0.08
2,000,000 Grupo Tribasa, S.A. de C.V., 7.75%
due 12/22/2000 2,002,500 1,802,500 0.07
------------ ------------ -------
10,672,675 10,200,000 0.42
Retail Stores 2,210,000 Controladora Comercial Mexicana, S.A. de
C.V. (COMERCI), 8.75% due 4/21/1998 2,236,615 2,196,188 0.09
Total Fixed-Income Investments in
Mexico 51,657,122 49,175,355 2.04
Trinidad Foreign Republic of Trinidad and Tobago:
& Tobago Government 2,000,000 11.50% due 11/20/1997 2,100,000 2,065,000 0.09
Obligations 4,000,000 9.75% due 11/03/2000 3,991,600 3,835,000 0.16
------------ ------------ -------
6,091,600 5,900,000 0.25
Total Fixed-Income Investments in
Trinidad & Tobago 6,091,600 5,900,000 0.25
<PAGE>
Uruguay Foreign 5,000,000 Republica Orient de Uruguay, 7.25%
Government due 3/07/2001 4,983,750 4,806,250 0.20
Obligations
Total Fixed-Income Investments in
Uruguay 4,983,750 4,806,250 0.20
Total Fixed-Income Investments in
Latin American and Caribbean Securities 132,626,174 124,417,793 5.17
NORTH
AMERICA
Canada Food & US$ 10,000,000 Canandaigua Wine, 8.75% due 12/15/2003 10,000,000 9,400,000 0.39
Beverage
Foreign Canadian Government Bonds:
Government C$ 55,000,000 6.50% due 9/01/1998 42,281,930 38,172,353 1.59
Obligations 99,500,000 6.50% due 6/01/2004 74,110,302 64,561,343 2.68
------------ ------------ -------
116,392,232 102,733,696 4.27
Total Fixed-Income Investments in
Canada 126,392,232 112,133,696 4.66
United Air Transport Delta Air Lines, Inc.:
States US$ 16,585,948 9.375% due 9/11/2007 (b) 16,869,236 16,728,687 0.70
10,000,000 10.50% due 4/30/2016 10,287,500 10,504,980 0.44
7,100,000 United Air Pass-Through, 10.125%
due 3/22/2015 7,684,046 7,546,789 0.31
15,000,000 USAir, 10.375% due 3/01/2013 15,000,000 14,268,375 0.59
------------ ------------ -------
49,840,782 49,048,831 2.04
Broadcasting 12,000,000 Cablevision Systems Corp., 14.00%
& Publishing due 11/15/2003 12,971,250 12,180,000 0.51
10,190,000 Century Communications Corp., 11.875%
due 10/15/2003 10,701,550 11,005,200 0.45
10,000,000 Continental Cablevision, 9.50%
due 8/01/2013 10,000,000 9,700,000 0.40
13,000,000 Heritage Media, 11.00% due 6/15/2002 13,295,625 13,390,000 0.56
15,000,000 K-III Communications Corp., 10.625%
due 5/01/2002 15,125,000 15,712,500 0.65
5,000,000 Storer Communications, Inc., 10.00%
due 5/15/2003 4,587,500 4,975,000 0.21
10,000,000 Videotron Group, Ltd. Co., 10.25%
due 10/15/2002 10,043,750 10,300,000 0.43
------------ ------------ -------
76,724,675 77,262,700 3.21
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
NORTH AMERICA Face Percent of
(continued)Industries Amount Fixed-Income Investments Cost Value Net Assets
<S> <S> <S> <C> <S> <C> <C> <C>
United Building US$ 15,300,000 Pacific Lumber Co., 10.50% due
States Materials 3/01/2003 $ 15,462,750 $ 14,994,000 0.62%
(con- USG Corp.:
tinued) 10,000,000 10.25% due 12/15/2002 9,968,750 10,050,000 0.42
11,035,000 8.75% due 3/01/2017 9,717,469 10,593,600 0.44
------------ ------------ -------
35,148,969 35,637,600 1.48
Business 20,000,000 ADT Operations, 9.25% due 8/01/2003 20,073,187 19,100,000 0.79
Services 10,000,000 Bell & Howell Co., Series B, 10.75%
due 10/01/2002 10,000,000 10,400,000 0.43
------------ ------------ -------
30,073,187 29,500,000 1.22
Cellular 5,000,000 Paging Network, Inc., 11.75% due
Telephones 5/15/2002 5,000,000 5,375,000 0.22
& Paging 7,775,000 Rogers Communication, Inc., 10.875%
due 4/15/2004 7,809,875 8,008,250 0.33
------------ ------------ -------
12,809,875 13,383,250 0.55
Chemicals 33,860,000 G-I Holdings, Inc., 11.196%* due
10/01/1998 20,593,927 20,739,250 0.86
12,000,000 Uniroyal Chemical, 9.00% due 9/01/2000 12,000,000 11,400,000 0.48
------------ ------------ -------
32,593,927 32,139,250 1.34
Conglomerates 20,000,000 Coltec Industries, 10.25% due 4/01/2002 20,387,500 20,700,000 0.86
9,500,000 Gillette Holdings, 12.25% due 6/30/2002 9,737,500 10,355,000 0.43
15,000,000 Jordan Industries, 10.375% due 8/01/2003 14,850,000 15,000,000 0.62
Sequa Corp.:
2,006,000 10.50% due 5/01/1998 2,071,195 2,063,672 0.09
9,000,000 9.375% due 12/15/2003 9,000,000 8,640,000 0.36
10,100,000 Sherritt Gordon, Ltd., 9.75% due
4/01/2003 10,148,750 9,872,750 0.41
10,000,000 Southern Pacific Rail Co., 9.375%
due 8/15/2005 10,000,000 9,925,000 0.41
------------ ------------ -------
76,194,945 76,556,422 3.18
<PAGE>
Consumer Goods Liggett Group, Inc.:
8,000,000 11.50% due 2/01/1999 7,724,541 5,840,000 0.24
4,200,000 16.50% due 2/01/1999 4,200,000 3,780,000 0.16
30,350,000 Revlon Worldwide, 20.932%* due 3/15/1998 19,156,724 13,809,250 0.57
------------ ------------ -------
31,081,265 23,429,250 0.97
Containers Owens Illinois:
5,000,000 10.00% due 8/01/2002 5,006,250 5,000,000 0.21
20,000,000 11.00% due 12/01/2003 21,906,562 21,900,000 0.91
6,100,000 Silgan Holdings Corp., 11.75% due
6/15/2002 6,194,875 6,435,500 0.26
------------ ------------ -------
33,107,687 33,335,500 1.38
Energy Clark Oil Co.:
8,360,000 10.50% due 12/01/2001 8,827,300 8,757,100 0.36
4,000,000 9.50% due 9/15/2004 4,000,000 4,070,000 0.17
7,000,000 Clark R & M Holdings, Inc., 11.109%*
due 2/15/2000 3,816,152 3,710,000 0.15
13,550,000 Ferrell Gas Co., Inc., 11.625%
due 12/15/2003 13,942,353 14,227,500 0.59
Gulf Canada Resources, Ltd.:
10,000,000 9.00% due 8/15/1999 9,158,438 9,910,700 0.41
6,500,000 9.25% due 1/15/2004 6,458,855 5,980,000 0.25
Maxus Energy Corp.:
6,500,000 9.875% due 10/15/2002 6,485,050 6,175,000 0.26
1,000,000 11.50% due 11/15/2015 1,051,250 1,040,000 0.04
6,050,000 Oryx Energy Co., 10.375% due 9/15/2018 6,098,058 6,519,141 0.27
15,000,000 Rowan Companies, Inc., 11.875%
due 12/01/2001 15,590,000 15,600,000 0.65
15,000,000 Seagull Energy Corp., 8.625%
due 8/01/2005 15,000,000 14,400,000 0.60
10,000,000 Trans Texas Gas Corp., 10.50%
due 9/01/2000 10,000,000 10,075,000 0.42
9,100,000 Tucson Electric, 10.732% due 1/01/2013 8,713,250 8,827,000 0.37
------------ ------------ -------
109,140,706 109,291,441 4.54
Entertainment 28,465,000 Marvel Holdings, Inc., 12.299%*
due 4/15/1998 18,063,606 17,577,138 0.73
5,000,000 SPI Holding Step Up, 12.079%*
due 10/01/2001 3,890,538 3,650,000 0.15
------------ ------------ -------
21,954,144 21,227,138 0.88
Financial 17,375,000 Lomas Mortgage USA, 10.25%
Services due 10/01/2002 17,387,500 17,548,750 0.73
10,000,000 Penn Financial Corp., 9.25%
due 12/15/2003 10,000,000 9,350,000 0.39
10,000,000 Reliance Group Holdings, 9.00%
due 11/15/2000 10,000,000 9,300,000 0.38
------------ ------------ -------
37,387,500 36,198,750 1.50
<PAGE>
Food & 10,000,000 Coca-Cola Bottling Co., 9.00% due
Beverage 11/15/2003 10,005,000 9,362,500 0.39
20,000,000 Del Monte Corp., 10.00% due 5/01/2003 20,025,313 18,800,000 0.78
25,000,000 Grand Union Co., 11.25% due 7/15/2000 25,524,063 24,812,500 1.03
20,000,000 Heileman Acquisition, 9.625% due
1/31/2004 20,000,000 18,600,000 0.77
18,000,000 Penn Traffic Co., 9.625% due 4/15/2005 18,308,350 17,730,000 0.74
20,000,000 Pueblo Xtra, 9.50% due 8/01/2003 20,111,875 18,700,000 0.78
10,000,000 Seven-Up Bottling Co., 11.50% due
8/01/1999 10,096,250 9,900,000 0.41
15,000,000 Specialty Foods, 10.25% due 8/15/2001 15,000,000 14,400,000 0.60
------------ ------------ -------
139,070,851 132,305,000 5.50
Health American Medical International:
Services 2,502,500 6.50% due 5/30/1997 2,029,634 2,515,013 0.11
11,000,000 11.25% due 6/01/2015 11,535,625 11,660,000 0.49
15,000,000 Continental Medical Systems, 10.875%
due 8/15/2002 15,029,063 14,700,000 0.61
Epic Properties, Inc.:
5,000,000 Series B-1, 11.375% due 7/15/2001 5,287,500 6,075,000 0.25
4,443,412 Series B-2, 11.50% due 7/15/2001 (b) 4,710,017 5,420,963 0.23
Healthtrust--The Hospital Co.:
14,000,000 10.75% due 5/01/2002 14,516,500 14,735,000 0.61
7,000,000 8.75% due 3/15/2005 6,938,750 6,615,000 0.27
5,000,000 MEDIQ, Inc., 11.125% due 7/01/1999 5,000,000 5,112,500 0.21
------------ ------------ -------
65,047,089 66,833,476 2.78
High 2,500,000 Anacomp, Inc., 15.00% due 11/01/2000 2,856,250 2,812,500 0.12
Technology 15,000,000 Computervision Corp., 10.875% due
8/15/1997 15,025,000 14,400,000 0.60
------------ ------------ -------
17,881,250 17,212,500 0.72
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
NORTH AMERICA Face Percent of
(continued)Industries Amount Fixed-Income Investments Cost Value Net Assets
<S> <S> <S> <C> <S> <C> <C> <C>
United Home Building Del Webb:
States US$ 9,250,000 10.875% due 3/31/2000 $ 9,376,875 $ 9,550,625 0.40%
(con- 3,500,000 9.75% due 3/01/2003 3,472,455 3,500,000 0.15
cluded) Kaufman & Broad Home, Inc.:
5,000,000 10.375% due 9/01/1999 5,050,000 5,137,500 0.21
5,250,000 9.375% due 5/01/2003 5,217,188 5,145,000 0.21
Ryland Group, Inc.:
8,250,000 10.50% due 7/15/2002 8,166,530 8,332,500 0.35
7,750,000 9.625% due 6/01/2004 7,750,000 7,517,500 0.31
------------- ------------- -------
39,033,048 39,183,125 1.63
Hotels 1,906,000 Gold River Hotel & Casino Corp., 11.375%
& Casinos due 8/31/1999 2,645,548 1,772,580 0.07
10,000,000 Greate Bay Prop., 10.875% due 1/15/2004 9,996,250 9,150,000 0.38
4,260,000 MGM Grand Hotel Financial Corp., 12.00%
due 5/01/2002 4,526,100 4,749,900 0.20
14,000,000 Showboat, Inc., 9.25% due 5/01/2008 13,866,250 13,160,000 0.55
2,885,000 Trump Taj Mahal Funding, Inc., 11.35%
due 11/15/1999 (a) (c) 2,294,282 2,690,762 0.11
------------- ------------- -------
33,328,430 31,523,242 1.31
Industrial 100,000,000 Matsushi Electric, 2.70% due 5/31/2002 1,215,582 1,199,805 0.05
Services
Leisure Time AMC Entertainment, Inc.:
8,000,000 11.875% due 8/01/2000 8,050,500 8,600,000 0.36
5,925,000 12.625% due 8/01/2002 6,017,020 6,517,500 0.27
------------- ------------- -------
14,067,520 15,117,500 0.63
Paper 10,000,000 Container Corp. of America, 9.75%
due 4/01/2003 10,200,000 9,850,000 0.41
15,000,000 Fort Howard Corp., 9.00% due 2/01/2006 15,007,500 13,500,000 0.56
10,000,000 Riverwood International, 11.25%
due 6/15/2002 10,385,750 10,650,000 0.44
Stone Container Group:
10,000,000 10.75% due 6/15/1997 9,615,000 9,800,000 0.41
7,000,000 11.875% due 12/01/1998 7,122,750 7,192,500 0.30
6,000,000 9.875% due 2/01/2001 6,000,000 5,490,000 0.23
------------- ------------- -------
58,331,000 56,482,500 2.35
<PAGE>
Restaurants & 10,000,000 Family Restaurant Inc., 9.75% due
Food Services 2/01/2002 10,000,000 9,250,000 0.39
Flagstar Corp.:
3,000,000 10.75% due 9/15/2001 3,172,500 2,962,500 0.12
2,000,000 10.875% due 12/01/2002 2,000,000 1,980,000 0.08
14,000,000 11.375% due 9/15/2003 14,000,000 13,720,000 0.57
20,000,000 Foodmaker, Inc., 9.75% due 6/01/2002 19,554,250 19,000,000 0.79
------------- ------------- -------
48,726,750 46,912,500 1.95
Retail Stores 13,000,000 Specialty Retailers, 10.00% due
8/15/2000 13,112,500 13,000,000 0.54
Textiles 15,000,000 WestPoint Stevens Inc., 8.75% due
12/15/2001 15,093,750 14,137,500 0.59
Transport Services 9,750,000 Viking Star Shipping, 9.625% due
7/15/2003 9,786,562 9,664,687 0.40
US Government United States Treasury Notes:
Obligations 45,000,000 5.75% due 8/15/2003 44,648,438 41,744,520 1.73
62,000,000 6.25% due 8/15/2023 60,803,594 55,490,000 2.31
------------- ------------- -------
105,452,032 97,234,520 4.04
Utilities 8,000,000 Texas--New Mexico Power Co., 9.25%
due 9/15/2000 8,000,000 8,440,000 0.35
Utilities--Electric 4,000,000 CTC Mansfield, 11.125% due 9/30/2016 4,301,250 4,239,184 0.17
5,000,000 Hydroelectrica Alicura, 8.375% due
3/15/1999 4,978,900 4,796,875 0.20
------------- ------------- -------
9,280,150 9,036,059 0.37
Utilities--Gas Midland Cogeneration:
9,129,565 10.33% due 7/23/2002 (b) 9,392,385 9,076,796 0.37
10,000,000 13.25% due 7/23/2006 11,183,750 11,260,060 0.47
------------- ------------- -------
20,576,135 20,336,856 0.84
Total Fixed--Income Investments in the
United States 1,144,060,311 1,115,629,402 46.34
<CAPTION>
Convertible Bonds
<S> <S> <C> <S> <C> <C> <C>
United Aerospace 1,775,000 Orbital Sciences Corp., 6.75% due
States 3/01/2003** 2,567,330 2,791,187 0.12
Automobile Parts 1,500,000 Arvin Industries Inc., 7.50% due
9/30/2014** 1,608,750 1,627,500 0.07
<PAGE>
Biotechnology 4,000,000 Genzyme Corp., 6.75% due 10/01/2001 3,798,750 3,735,000 0.16
Building & 650,000 Kumagai Gumi Ltd., 4.875% due
Construction 12/08/1998 623,675 609,375 0.02
1,500,000 Toll Brothers Inc., 4.75% due
1/15/2004 1,500,000 1,440,000 0.06
1,750,000 US Home Corp., 4.875% due 11/01/2005 1,741,000 1,575,000 0.07
------------- ------------- -------
3,864,675 3,624,375 0.15
Computers 2,500,000 Data General Corp., 7.75% due
6/01/2001 2,479,375 2,256,250 0.09
Electronics 1,500,000 Comptronix Corp., 6.75% due 3/01/2002 1,015,500 1,252,500 0.05
1,900,000 Media Vision, 4.875% due 10/01/2003 1,101,202 926,250 0.04
2,000,000 Wilcox & Gibbs, 7.00% due 8/01/2014** 2,040,000 1,872,500 0.08
Zenith Electric Corp.:**
2,000,000 8.50% due 11/19/2000 2,358,750 2,400,000 0.10
2,000,000 8.50% due 1/18/2001 2,000,000 2,397,500 0.10
------------- ------------- -------
8,515,452 8,848,750 0.37
Entertainment 1,819,000 Savoy Pictures Entertainment, 7.00%
due 7/01/2003 2,070,447 1,814,452 0.08
Food & Beverage 3,000,000 Boston Chicken, 4.50% due 2/01/2004 3,000,000 2,595,000 0.10
3,000,000 Farm Fresh, Inc., 7.50% due 3/01/2010 1,562,500 2,145,000 0.09
------------- ------------- -------
4,562,500 4,740,000 0.19
Food--Retail 2,610,000 Giant Group, 7.00% due 4/15/2006** 2,700,960 2,675,250 0.11
Healthcare 1,000,000 IVAX Corp., 6.50% due 11/15/2001 987,500 1,045,000 0.04
Home Building 2,300,000 Engle Homes, Inc., 7.00% due
3/01/2003 2,369,000 2,599,000 0.11
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
NORTH AMERICA Face Percent of
(concluded)Industries Amount Convertible Bonds Cost Value Net Assets
<S> <S> <S> <C> <S> <C> <C> <C>
United Industrial Coeur D'Alene Mines Corp.:**
States Services US$ 2,000,000 7.00% due 11/30/2002 $ 2,112,500 $ 3,060,000 0.13%
(con- 1,500,000 6.375% due 1/31/2004 1,500,000 1,548,750 0.06
cluded) 1,583,000 Manpower, Inc., 6.25% due 10/01/2002** 1,638,005 1,860,025 0.08
500,000 Mascotech, 4.50% due 12/15/2003 500,000 448,750 0.02
3,500,000 Mediplex Group, 6.50% due 8/01/2003 4,045,625 4,007,500 0.16
1,015,000 Sanifill Inc., 7.50% due 6/01/2006** 1,073,068 1,002,312 0.04
1,000,000 United Engineers Malaysia, 2.00%
due 3/01/2004 1,031,250 895,000 0.04
3,755,000 Wainoco Oil Corp., 7.75% due 6/01/2014 3,324,115 3,510,925 0.15
------------- ------------- -------
15,224,563 16,333,262 0.68
Oil & Gas 2,165,000 Western Company of North America,
Diversified 7.25% due 1/15/2015** 1,847,080 1,991,800 0.08
Paper 2,000,000 Albany International Corp., 5.25%
due 3/15/2002 1,809,249 1,930,000 0.08
Pharma- 2,600,000 Bindley Western Industries, Inc., 6.50%
ceuticals due 10/01/2002 2,563,000 2,453,750 0.10
Restaurants 1,920,000 Daka International, Inc., 7.00%
due 3/15/2003** 2,037,421 2,160,000 0.09
Retail Stores 2,795,000 Big B Inc., 6.50% due 3/15/2003** 3,235,437 3,102,450 0.13
Semiconductors 2,318,000 LTX Corp., 13.50% due 4/15/2011 2,359,360 2,309,307 0.10
Software 500,000 Sterling Software, Inc., 5.75% due
2/01/2003** 489,000 587,500 0.02
Technology 2,000,000 Conner Peripherals Inc., 6.50% due
3/01/2002** 1,795,600 1,775,000 0.07
Telecommun- 3,000,000 Intelcom Group Inc., 7.00% due
ications 10/30/1998** 3,000,000 3,109,907 0.13
Transportation 961,000 Builders Transport & Trucking Co., 8.00%
due 8/15/2005** 968,208 948,988 0.04
<PAGE>
Waste 1,000,000 Phillips Environmental, 6.00% due
Management 10/15/2000 1,000,000 1,027,500 0.04
2,000,000 USA Waste Services Inc., 8.50% due
10/15/2002 2,331,250 2,205,000 0.09
------------- ------------- -------
3,331,250 3,232,500 0.13
Total Investments in Convertible Bonds 74,184,907 75,691,228 3.14
<CAPTION>
Shares Convertible Preferred Stocks,
Held Common Stocks & Warrants
<S> <S> <C> <S> <C> <C> <C>
United Airlines 60,000 AMR Corp., $3.00 (Series A), Conv. Pfd. 3,000,000 2,580,000 0.11
States 52,500 Delta Air Lines Inc., $3.50 (Series C),
Conv. Pfd. 2,756,900 2,493,750 0.10
25,000 United Airlines Corp., $3.50 (Series A),
Conv. Pfd. 2,482,500 2,200,000 0.09
------------- ------------- -------
8,239,400 7,273,750 0.30
Banking & Finance 40,000 Olympic Financial Ltd., $2.00, Conv.
Pfd. 1,000,000 1,040,000 0.05
48,300 Rochester Community Savings Bank
(Series B) 1,387,224 1,436,925 0.06
30,200 Union Planters Corp. 1,065,030 1,034,350 0.04
------------- ------------- -------
3,452,254 3,511,275 0.15
Computers 42,500 Storage Technology Corp., $3.50,
Conv. Pfd.** 2,355,988 3,272,500 0.14
Electronics 60,000 Cooper Industries, $1.00 1,536,750 1,432,500 0.06
Entertainment 9,100 Savoy Pictures Entertainment** 145,718 129,675 0.01
Environmental 3,500,000 Allied Waste, Conv. Pfd. 3,500,000 4,206,475 0.17
High Technology 91,053 Anacomp, Inc. (Warrants) (d) 120,000 216,250 0.01
Hotels & Casinos 16,432 Buckhead of America Corp. 41,080 94,484 0.00
75,000 Gold River Hotel & Casino Corp.
Liquidating Trust 75,000 53,437 0.00
30,000 Gold River Hotel & Casino Corp.
(Series B) (e) 219,738 120,000 0.00
6,000 Trump Taj Mahal Funding, Inc. (Class A) 3,000 138,000 0.01
------------- ------------- -------
338,818 405,921 0.01
Industrial 58,800 Petrolane, Inc. 683,550 661,500 0.03
10,000 UGI Corp. (Warrants) (d) 43,750 12,500 0.00
------------- ------------- -------
727,300 674,000 0.03
<PAGE>
Oil & Gas 20,000 Western Gas Resource 1,000,000 930,000 0.04
Diversified
Paper Products 40,000 Boise Cascade (Series E) 1,025,520 915,000 0.04
Software 120,000 Network Imaging Corp., $8.00 3,000,000 3,000,000 0.12
Total Investments in United States
Convertible Preferred Stocks, Common
Stocks & Warrants 25,441,748 25,967,346 1.08
Total Investments in
North American Securities 1,385,344,198 1,343,449,922 55.81
<CAPTION>
PACIFIC Face
BASIN Amount Fixed-Income Investments
<S> <S> <S> <C> <S> <C> <C> <C>
Australia Foreign A$ Australia Government Bonds:
Government 46,000,000 7.00% due 8/15/1998 33,910,610 31,742,665 1.32
Obligations-- 52,600,000 9.50% due 8/15/2003 45,394,682 40,571,432 1.69
Regional 34,000,000 7.50% due 7/15/2005 24,439,244 22,922,452 0.95
& Agency 41,500,000 Queensland Treasury Corp., Global
Notes, 8.00% due 5/14/2003 31,269,513 28,709,572 1.19
16,000,000 Victoria Finance, 10.25% due 9/15/1999 13,083,725 12,262,025 0.51
------------- ------------- -------
148,097,774 136,208,146 5.66
Total Fixed-Income Investments in
Australia 148,097,774 136,208,146 5.66
Japan Foreign Yen 100,000,000 Bank of Tokyo, 4.25% due 3/31/2049 1,156,028 1,113,548 0.05
Government 85,000,000 Makita Corp., 3.60% due 3/31/1999 938,421 973,441 0.04
Obligations 150,000,000 No. 5 Matsushi, 3.30% due 5/20/1994 1,459,543 1,469,298 0.06
50,000,000 No. 8 Nippon, 2.80% due 3/31/2000 594,095 582,359 0.02
50,000,000 Sagami Rail, 3.80% due 9/30/1999 593,777 591,618 0.03
25,000,000 Yamato Trans, 3.90% due 3/30/2001 304,151 302,144 0.01
------------- ------------- -------
5,046,015 5,032,408 0.21
Total Fixed-Income Investments in
Japan 5,046,015 5,032,408 0.21
<PAGE>
Philip- Utilities-- 5,000,000 National Power Corp., 7.625% due
pines Electric 11/15/2000 5,000,000 4,522,000 0.19
Total Fixed-Income Investments in
the Philippines 5,000,000 4,522,000 0.19
Total Fixed-Income Investments in
Pacific Basin Securities 158,143,789 145,762,554 6.06
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
WESTERN Face Percent of
EUROPE Industries Amount Fixed-Income Investments Cost Value Net Assets
<S> <S> <S> <C> <S> <C> <C> <C>
Belgium Foreign Government of Belgium:
Government Bf 750,000,000 7.25% due 4/29/2004 $ 21,167,986 $ 21,945,794 0.91%
Obligations 500,000,000 8.00% due 12/24/2012 15,118,056 15,103,091 0.63
Total Fixed-Income Investments in
Belgium 36,286,042 37,048,885 1.54
Denmark Foreign Dkr 426,500,000 Denmark Government Bonds, 7.00%
Government due 12/15/2004 67,067,232 65,295,529 2.71
Obligations
Total Fixed-Income Investments in
Denmark 67,067,232 65,295,529 2.71
Germany Consumer US$ 10,000,000 Tarkett International, 9.00% due
Products 3/01/2002 10,000,000 9,350,000 0.39
Total Fixed-Income Investments in
Germany 10,000,000 9,350,000 0.39
Hungary Federal 5,000,000 National Bank of Hungary, 8.80%
Agencies due 10/01/2002 5,281,250 4,700,000 0.20
Total Fixed-Income Investments in
Hungary 5,281,250 4,700,000 0.20
Italy Financial Lit 30,000,000,000 The Goldman Sachs Group, L.P., 15.00%
Services due 8/16/1994 (1) 18,748,125 19,012,453 0.79
Foreign 148,400,000,000 Buoni Poliennali del Tesoro (Italian
Government Government Bonds), 9.00% due
Obligations 10/01/1998 89,786,487 92,726,899 3.85
<PAGE>
Total Fixed-Income Investments in
Italy 108,534,612 111,739,352 4.64
Portugal Supranational Esc 750,000,000 European Investment Bank, 15.50%
Entities due 7/12/1995 6,389,454 4,640,981 0.19
Total Fixed-Income Investments in
Portugal 6,389,454 4,640,981 0.19
Spain Foreign Government of Spain:
Government Pta 10,000,000,000 9.00%* due 2/28/1997 73,392,716 74,954,027 3.11
Obligations 5,900,000,000 8.30% due 12/15/1998 42,367,579 43,029,423 1.79
-------------- -------------- -------
115,760,295 117,983,450 4.90
Total Fixed-Income Investments in
Spain 15,760,295 117,983,450 4.90
Sweden Foreign Government of Sweden:
Government Skr 345,000,000 11.00% due 1/21/1999 50,362,597 50,005,117 2.08
Obligations-- 173,000,000 10.25% due 5/05/2003 24,907,877 25,252,082 1.05
Regional 100,000,000 SBAB, 12.50% due 1/23/1997 14,062,736 14,200,003 0.59
& Agency -------------- -------------- -------
89,333,210 89,457,202 3.72
Total Fixed-Income Investments in
Sweden 89,333,210 89,457,202 3.72
United Foreign Pound 2,000,000 Hanson Trust PLC, 9.50% due 1/31/2006 3,559,598 3,502,591 0.15
Kingdom Government Sterl- United Kingdom Gilt:
Obligations ing 46,000,000 7.00% due 11/06/2001 71,171,278 66,705,405 2.77
62,000,000 8.50% due 7/16/2007 108,675,423 98,696,299 4.10
-------------- -------------- -------
183,406,299 168,904,295 7.02
Total Fixed-Income Investments in the
United Kingdom 183,406,299 168,904,295 7.02
Total Investments in Western European
Securities 622,058,394 609,119,694 25.31
<PAGE>
<CAPTION>
SHORT-TERM
SECURITIES Issue
<S> <S> <S> <C> <S> <C> <C> <C>
United Commercial US$ 40,000,000 Daimler-Benz North America Corp.,
States Paper++ 3.50% due 4/20/1994 39,937,778 39,937,778 1.66
56,371,000 General Electric Capital Corp., 3.53%
due 4/04/1994 56,371,000 56,371,000 2.34
30,000,000 Penney (JC) Funding Corp., 3.52%
due 4/21/1994 29,950,133 29,950,133 1.25
30,000,000 Sheffield Receivables Corp., 3.65%
due 4/26/1994 29,933,083 29,933,083 1.24
-------------- -------------- -------
156,191,994 156,191,994 6.49
Total Short-Term Investments in the
United States 156,191,994 156,191,994 6.49
Total Investments in Short-Term
Securities 156,191,994 156,191,994 6.49
Total Investments $2,439,099,549 $2,364,913,707 98.25
==============
Short Sales (Proceeds--$20,277,000)** (19,275,498) (0.80)
Unrealized Depreciation on Forward Foreign Exchange Contracts*** (1,004,976) (0.04)
Other Assets Less Liabilities 62,294,821 2.59
-------------- -------
Net Assets $2,406,928,054 100.00%
============== =======
Net Asset
Value: Class A--Based on net assets of $424,680,414 and
47,909,760 shares outstanding $ 8.86
==============
Class B--Based on net assets of $1,982,247,640 and
223,770,752 shares outstanding $ 8.86
==============
<PAGE>
<FN>
(a) Represents a pay-in-kind security which may
pay interest/dividends in additional face/
shares.
(b) Subject to principal paydowns as a result of
prepayments or refinancings of the underlying
mortgage instruments. As a result, the average
life may be substantially less than the original
maturity.
(c) Each $1,000 face amount contains one non-
detachable share of Taj Mahal Holding Corp.'s
Class B redeemable Common Stock.
(d) Warrants entitle the Fund to purchase a
predetermined number of shares of Common
Stock. The purchase price and number of
shares are subject to adjustment under certain
conditions until the expiration date.
(e) Each share of Series B stock contains a right
which entitles the holder to purchase a pre-
determined number of shares of Preferred
Stock.
++Commercial Paper is traded on a discount
basis; the interest rates shown are the dis-
count rates paid at the time of purchase by the
Fund.
(1) Indexed instrument for which the yield-to-
maturity, if any, will be determined by the
relative value of the foreign currency indicated.
*Represents the yield to maturity.
**Covered Short Sales entered into as of March 31,
1994 are as follows:
Shares Issue Value
30,900 Arvin Industries Inc. $ (865,200)
160,100 Big B Inc. (1,761,100)
13,800 Builders Transport &
Trucking Co. (205,275)
78,500 Coeur D'Alene Mines Corp. (1,776,063)
40,000 Conner Peripherals Inc. (605,000)
110,300 Daka International, Inc. (1,309,812)
20,300 Giant Group (266,438)
95,500 Intelcom Group Inc. (1,599,625)
53,290 Manpower, Inc. (1,012,510)
108,200 Orbital Sciences Corp. (2,353,350)
12,500 Sanifill Inc. (268,750)
76,300 Savoy Pictures Entertainment (1,125,425)
13,300 Sterling Software, Inc. (384,037)
63,200 Storage Technology Corp. (2,054,000)
43,500 Western Co. of North America (451,313)
18,000 Wilcox & Gibbs (121,500)
319,600 Zenith Electric Corp. (3,116,100)
Total (proceeds--$20,277,000) $(19,275,498)
============
<PAGE>
***Forward foreign exchange contracts as of
March 31, 1994 are as follows:
Unrealized
Expiration Appreciation
Date (Depreciation)
Foreign Currency Purchased
A$ 24,831,026 April 1994 $ (291,096)
C$ 37,918,795 April 1994 (441,805)
DM 154,180,481 April 1994 727,008
Pound Sterling 20,000,000 April 1994 44,900
Total (US$ Commitment--
$166,829,045) $ 39,007
------------
Foreign Currency Sold
A$ 117,429,522 April 1994 $ 1,856,710
Bf 1,226,704,400 April 1994 (466,191)
DM 141,960,400 April 1994 (790,129)
Pta 8,970,530,684 April 1994 (1,208,980)
Pound Sterling 32,642,091 April 1994 117,228
Yen 670,450,000 May 1994 (209,641)
Skr 491,184,417 April 1994 (342,980)
Total (US$ Commitment--
$385,645,202) $ (1,043,983)
------------
Total Unrealized Depreciation
on Forward Foreign Exchange
Contracts--Net $ (1,004,976)
============
</TABLE>
