MERRILL LYNCH
WORLD INCOME
FUND, INC.
FUND LOGO
Quarterly Report
March 31, 1995
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
<PAGE>
MERRILL LYNCH WORLD INCOME FUND, INC.
Officers and
Directors
Arthur Zeikel, President and 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
Gerald M. Richard, Treasurer
Mark B. Goldfus, Secretary
Custodian
State Street Bank & Trust Company
P.O. Box 351
Boston, Massachusetts 02101
Transfer Agent
Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, Florida 32246-6484
(800) 637-3863
DEAR SHAREHOLDERS
Following a difficult 1994--one of the
worst years in history for global bond
markets--the first three months of 1995
were marked by bond market rallies.
However, another trend of 1994, the
declining value of the US dollar relative
to the Deutschemark and the yen, has
not been reversed. Nominal and real
short-term interest rates continue to
favor the Deutschemark and the yen.
So far, in 1995 the US dollar has
plunged to new historical lows versus
both currencies. Despite evidence a
"soft landing" may be possible (a devel-
opment that would be positive for the
US dollar), fears that the Federal
Reserve Board has not acted quickly or
forcefully enough to prevent a cyclical
rise in inflation helped undermine the
dollar.
<PAGE>
Additional factors in 1995 that placed
tremendous pressure on the US dollar
include the continued painful economic
repercussions from the Mexican crisis
and peso devaluation, investor anxiety
over political uncertainty in several
European nations, which boosted the
Deutschemark's "safe haven" appeal,
further reductions of foreign reserves
held in dollars, and significant repatri-
ation of yen by Japanese investors.
The US economy slowed from its torrid
fourth quarter 1994 pace as real gross
domestic product rose 5.1%. However,
this appears to be only temporary. The
negative impact from Mexico's recession
is apparently being concentrated in the
first half of 1995, while household
spending is slowing, reflecting payback
from the past quarter's strength and
delayed income tax refunds. Given solid
employment and income growth and
the substantial decline in interest rates
and the US dollar during the March
quarter, growth is likely to pick up
again during the second half of the
year. Stronger growth along with build-
ing inflationary pressures should pres-
sure the Federal Reserve Board to
resume its monetary tightening.
Outside of the United States, in Canada,
economic activity should surpass the
United States', as it did last year.
However, inflation should be broadly
similar as 1994's tax-related drop falls
out of yearly comparisons. In Australia,
growth is cooling and could move
slightly below potential while inflation
is set to rise above 3%. The critical
issue near term is the May 9, 1995
budget, which is set against a mildly
slowing economy and a deteriorating
current account deficit.
<PAGE>
European activity looks set to remain
fairly strong this year although some
payback early in the year is expected
after the fourth quarter surge. The
continent embarked on a capital spend-
ing boom, which should support growth
throughout the year. Although con-
sumers remain hesitant, the positive
effects from the corporate sector's
increased hiring should boost house-
hold spending. Meanwhile, rapidly
rising prices at the production level,
which is most pronounced in the
countries with high-yielding bond mar-
kets, and a surprisingly generous wage
settlement in Germany brought infla-
tion concerns quickly to the forefront.
The unexpected reduction in Germany's
interest rates on March 30, 1995 greatly
reduced the anxiety level associated
with the high-debtor countries, possibly
allowing some breathing room in their
attempt to improve their fiscal posi-
tions. This window of opportunity may
prove to be short-lived.
In the aftermath of 1994's turbulent
domestic, international, financial and
political events, emerging market asset
performance continued to languish
during the first quarter of 1995. How-
ever, by the end of the March quarter,
renewed investor confidence in the
viability of both the Mexican and
Argentine economic adjustment pro-
grams combined with a sustained rally
in the US market, led to noticeable
improvements from record lows experi-
enced in early March 1995.
The unmanaged JP Morgan Latin
American Eurobond Index declined by
10.8% during the quarter ended March
31, 1995. We maintained our prudent
management of the Fund's emerging
market portfolio by concentrating on
strong credit quality issuers. However,
the Fund's performance was affected by
the noticeable downturn in the market.
Therefore, the emerging market portion
of the portfolio declined approximately
8.5%. We utilized the quarter-end price
improvement to reduce the Fund's
exposure by 10%.
<PAGE>
Global Outlook & Strategy
During the March quarter, all major
markets recorded positive total returns
led by Japan, the Dollar bloc countries
(the United States, Canada, Australia
and New Zealand) and Europe. The US
dollar set new historical lows versus
the Japanese yen and Deutschemark.
The rally in the Dollar bloc countries
was initially led by the United States
following January data suggesting a
cooling in the economic activity pace.
The main catalyst was the December
retail sales report which showed broad-
based weakness, followed by Federal
Reserve Board Chairman Greenspan's
comments at his Humphrey-Hawkins
testimony, which suggested strongly
that the Federal Reserve Board may be
"on hold," instead of raising interest
rates, during the next few months. The
Canadian market slightly outperformed
(in local currency terms) the US market
because of a credible budget presented
in late February and a stable currency.
Australia was hindered by a sharp drop
in its currency and some concern that
the upcoming budget may not be suf-
ficiently restrictive. European markets
were fairly quiet up until mid-February
when a surging Deutschemark along
with a much worse-than-expected
inflation figure in Italy caused havoc in
the high-yield markets of Italy, Spain
and Sweden. As Italian 10-year interest
rates rose 100 basis points, the lira
weakened sharply and the peseta
devalued 7%.
<PAGE>
During the March quarter, we main-
tained our exposure to the US high yield
market (including convertible securi-
ties) at 50% of net assets, while reduc-
ing our European exposure by 2% and
establishing positions in Australia. We
eliminated the Swedish position and
reduced the United Kingdom exposure.
Given the value in the Italian market
and the relatively short average matu-
rity of our holdings we have not
reduced our position, although our
confidence decreased. Looking ahead,
the Deutschemark strength and the
recent German interest rate reductions
are likely to keep the Bundesbank's
monetary policy on hold well into the
third quarter, which should allow some
relief to the higher-yielding bond mar-
kets, as well as some respite from
recent interest rate hikes.
From a currency perspective, we raised
the Fund's exposure to European
currency movements because of the
US dollar's reversal during the March
quarter. Given the Fund's objective of
high current income, we have a bias
toward the higher-yielding European
markets. The Fund did fully benefit
from the US dollar's decline since
year-end 1994 as these currencies
severely underperformed the Deutsche-
mark. We believe the US dollar remains
at risk during the next few months
given the likelihood of no further
Federal Reserve Board monetary
tightening.
High-Yield Market
We continued to allocate approximately
45% of net assets to the US high-yield
market because we believe that the
positive fundamentals relating to credit
risk make high-yield likely to outper-
form US Treasury and high-grade corpo-
rate securities. In addition we allocated
5% of assets to fixed-income securities
convertible into common stocks. Many
attractive values emerged in 1994 as
the equity investors struggled with
rising interest rates. We feel that this
relatively moderate allocation to con-
vertibles will contribute to total return
while providing more overall portfolio
stability. Convertibles are less highly
correlated with interest rates than the
other asset categories within the
portfolio.
<PAGE>
The high-yield portion of the portfolio
was well-positioned for the improved
market conditions. During the quarter
ended March 31, 1995, BB-rated issues
outperformed B-rated issues as the
Fund was overweighted in BB-rated
issues. Various mergers and acquisi-
tions, and positive events relating to
specific issues, had a positive impact
on investment results. For example,
USAir Inc.'s agreement with its pilot
union on wage and work rule conces-
sions contributed to a sharp rise in that
company's bonds. Del Monte Corp.
bond prices surged on news that the
company would receive new equity
investments. Continental Medical
Systems, Inc. bonds rallied in response
to the news that it would merge with
the more conservatively capitalized
Horizon Healthcare. A number of initial
public offerings also occurred in
the first quarter. Fort Howard Corp. and
Uniroyal Chemical Co. issued stock and
used the proceeds to retire debt and
improve credit quality.
The high-yield market outlook appears
positive over the next six months. We
expect stable short-term interest rates.
In addition, we look for continued
reequitization of balance sheets through
equity issuance and merger and a
downward rift in long-term interest
rates and acquisition activity. Good
corporate profits should continue to
support credit quality fundamentals.
Certain industries such as paper and
airlines should continue to benefit
from strong earnings.
We anticipate that there will be contin-
ued strong cash flows into high-yield
funds. In the first quarter of 1995, net
inflows were reported to be $2.7 billion,
and the trend may accelerate. We also
expect adequate valuations since high-
yield bonds are not cheap by historic
standards. However, given the strong
positive fundamentals, yield spreads
should remain relatively stable. In the
March quarter, valuations improved as
Treasury yields declined more than
high-yield bonds, causing the yield
premium of the Merrill Lynch Master
Index II to widen to 51.7% compared to
45% at December 31, 1994.
<PAGE>
Convertible securities performed well
during the first quarter of 1995, benefit-
ing from both lower interest rates and
higher stock prices. The airline indus-
try was heavily weighted in the con-
vertible sector of the Fund and did
particularly well. Airline holdings in-
cluded AMR Corp., Delta Air Lines, Inc.
and UAL Corp. The Fund also benefited
from exposure to industrial and cyclical
companies such as Albany Interna-
tional Corp., Cooper Industries, Inc.,
Interface Inc., James River Corp., and
Wilcox & Gibbs Inc. Pollution control
companies such as Allied Waste Indus-
tries, Inc., Sanifill Inc. and USA Waste
Services Inc. also did well during the
March quarter because of fundamental
improvement in this sector. Prices
improved somewhat in the regional
banks and homebuilder convertible
securities.
Late last year the convertible sector
of the Fund contained about 50% defen-
sive positions such as high-premium
convertibles and convertible arbitrage
positions, and 50% was offensively posi-
tioned using higher yielding low pre-
mium convertibles. At March 31, 1995,
the Fund's convertible portion was
90% offensively positioned and 10%
defensively positioned. This allows
the Fund to benefit should current
interest rate and stock market trends
continue.
In Conclusion
We appreciate your ongoing 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
President
<PAGE>
(Vincent T. Lathbury III)
Vincent T. Lathbury III
Vice President and Portfolio Manager
(Robert J. Parish)
Robert J. Parish
Vice President and Portfolio Manager
April 26, 1995
PERFORMANCE DATA
About Fund
Performance
Since October 21, 1994, investors have been 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 4% and bear no ongoing distribution or account mainte-
nance 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 0.50% and an
account maintenance fee of 0.25%. These shares automatically
convert to Class D Shares after 10 years.
*Class C Shares are subject to a distribution fee of 0.55% 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 4% and
an account maintenance fee of 0.25% (but no distribution fee).
Performance data for the Fund's Class A and Class B Shares are
presented in the "Performance Summary" and "Average Annual
Total Return" tables on pages 5 and 6. "Aggregate Total Return"
tables for Class C and Class D Shares are also presented on page
5. Data for all of the Fund's shares, including Class C and
Class D Shares, are presented in the "Recent Performance
Results" table on page 6.
<PAGE>
The "Recent Performance Results" table shows investment
results before the deduction of any sales charges for Class A and
Class B Shares for the 12-month and 3-month periods ended
March 31, 1995 and for Class C and Class D Shares for the since
inception and 3-month periods ended March 31, 1995. All data
in this table assume imposition of the actual total expenses
incurred by each class of shares during the relevant period.
None of the past results shown should be considered a represen-
tation 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. Dividends
paid to each class of shares will vary because of the different
levels of account maintenance, distribution and transfer agency
fees applicable to each class, which are deducted from the
income available to be paid to shareholders.
Average Annual % Return Without % Return With
Total Return++ Sales Charge Sales Charge**
Class A Shares*
Year Ended 3/31/95 +1.16% -2.89%
Five Years Ended 3/31/95 +9.88 +8.98
Inception (9/29/88) through 3/31/95 +9.79 +9.11
[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 3/31/95 +0.38% -3.33%
Inception (11/18/91) through 3/31/95 +5.08 +4.82
[FN]
*Maximum contingent deferred sales charge is 4% and is reduced to 0% after
4 years.
**Assuming payment of applicable contingent deferred sales charge.
Aggregate % Return % Return
Total Return Without CDSC With CDSC**
Class C Shares*
Inception (10/21/94) through 3/31/95 +1.08% +0.10%
<PAGE>
[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*
Inception (10/21/94) through 3/31/95 +1.34% -2.71%
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
<TABLE>
<CAPTION>
Performance
Summary-- Net Asset Value Capital Gains
Class A Shares++ 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
1994 9.28 8.20 -- 0.711 - 4.05
1/1/95--3/31/95 8.20 8.23 -- 0.164 + 2.51
------ ------
Total $0.049 Total $6.623
Cumulative total return as of 3/31/95: +83.61%**
<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 and return of capital distribution,
if any.
**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>
PERFORMANCE DATA (concluded)
<TABLE>
<CAPTION>
Performance
Summary-- Net Asset Value Capital Gains
Class B Shares 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
1994 9.28 8.19 -- 0.645 - 4.90
1/1/95--3/31/95 8.19 8.23 -- 0.149 + 2.46
------ ------
Total $0.047 Total $2.506
Cumulative total return as of 3/31/95: +18.17%**
<FN>
*Figures may include short-term capital gains distributions and return of capital distribution,
if any.
**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>
<CAPTION>
Recent
Performance 12 Month 3 Month
Results 3/31/95 12/31/94 3/31/94++ % Change++ % Change
<S> <C> <C> <C> <C> <C>
Class A Shares* $8.23 $8.20 $8.86 -7.11% +0.37%
Class B Shares* 8.23 8.19 8.86 -7.11 +0.49
Class C Shares* 8.22 8.19 8.42 -2.38 +0.37
Class D Shares* 8.23 8.20 8.43 -2.37 +0.37
Class A Shares--Total Return* +1.16(1) +2.51(2)
Class B Shares--Total Return* +0.38(3) +2.46(4)
Class C Shares--Total Return* +1.08(5) +2.31(6)
Class D Shares--Total Return* +1.34(7) +2.46(8)
Class A Shares--Standardized 30-day Yield 9.40%
Class B Shares--Standardized 30-day Yield 9.01%
Class C Shares--Standardized 30-day Yield 8.91%
Class D Shares--Standardized 30-day Yield 9.16%
<PAGE>
<FN>
*Investment results shown do not reflect sales charges; results shown would be lower if a sales charge was included.
++Investment results shown for Class C and Class D Shares are since inception (10/21/94).
(1)Percent change includes reinvestment of $0.728 per share ordinary income dividends.
(2)Percent change includes reinvestment of $0.164 per share ordinary income dividends.
(3)Percent change includes reinvestment of $0.662 per share ordinary income dividends.
(4)Percent change includes reinvestment of $0.149 per share ordinary income dividends.
(5)Percent change includes reinvestment of $0.276 per share ordinary income dividends.
(6)Percent change includes reinvestment of $0.148 per share ordinary income dividends.
(7)Percent change includes reinvestment of $0.298 per share ordinary income dividends.
(8)Percent change includes reinvestment of $0.159 per share ordinary income dividends.
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (in US dollars)
<CAPTION>
Percent of
AFRICA Industries Face Amount Fixed-Income Investments Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
South Africa Foreign Government US$ 10,000,000 Republic of South Africa, 9.625%
Obligations due 12/15/1999 $ 9,968,500 $ 9,631,100 0.6%
Total Investments in South Africa 9,968,500 9,631,100 0.6
Total Investments in
African Securities 9,968,500 9,631,100 0.6
LATIN AMERICA &
THE CARIBBEAN
Argentina Energy Transportadora de Gas del Sur:
2,000,000 7.75% due 12/23/1998 2,042,500 1,400,000 0.1
2,000,000 7.75% due 12/23/1998 1,837,500 1,400,000 0.1
-------------- -------------- ------
3,880,000 2,800,000 0.2
Foreign Government Lit 5,000,000,000 Republic of Argentina, 13.45% due
Obligations 10/21/1997 3,089,063 2,692,760 0.2
Telecommunications Telecom Argentina Stet--France
Telecom S.A.:
US$ 500,000 8.375% due 10/18/2000 460,000 395,000 0.0
2,500,000 8.375% due 10/18/2000 2,490,625 1,975,000 0.1
Telefonica de Argentina S.A.:
3,000,000 8.375% due 10/01/2000 3,033,750 2,370,000 0.1
10,000,000 11.875% due 11/01/2004 9,800,800 8,950,000 0.5
-------------- -------------- ------
15,785,175 13,690,000 0.7
Total Fixed-Income Investments in
Argentina 22,754,238 19,182,760 1.1
<PAGE>
Brazil Construction 5,000,000 Compania Brasileira de Projetos e
Obras, 12.50% due 12/22/1997 4,975,000 4,287,500 0.3
Total Fixed-Income Investments in
Brazil 4,975,000 4,287,500 0.3
Colombia Banking 3,000,000 Banco Ganadero S.A., 9.75% due
8/26/1999 2,987,340 2,820,000 0.2
Total Fixed-Income Investments in
Colombia 2,987,340 2,820,000 0.2
Mexico Food & Beverage 5,000,000 Fomento Economico Mexico, S.A. de
C.V. (Femsa), 9.50% due 7/22/1997 4,926,875 4,162,500 0.2
4,000,000 Gruma S.A. de C.V., 9.75% due
3/09/1998 3,449,750 3,065,000 0.2
-------------- -------------- ------
8,376,625 7,227,500 0.4
Foreign Government &
Agency Obligations 3,000,000 Banco Nacional de Commerce Exterior,
8.00% due 8/05/2003 2,636,250 1,425,000 0.1
5,500,000 Nafinsa, 10.625% due 11/22/2001 5,929,375 3,492,500 0.2
Pound Sterling 10,000,000 United Mexican States, Government
Bond, 12.25% due 12/03/1998 17,422,208 13,518,650 0.8
-------------- -------------- ------
25,987,833 18,436,150 1.1
Industrial Services US$ 5,000,000 Cemex, S.A., 10.00% due 11/05/1999 4,637,500 3,550,000 0.2
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
LATIN AMERICA &
THE CARIBBEAN Percent of
(concluded) Industries Face Amount Fixed-Income Investments Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
Mexico
(concluded) Insurance US$ 7,000,000 El Puerto de Liverpool, S.A. de
C.V., 7.25% due 10/19/1996 $ 5,975,000 $ 5,250,000 0.3%
Retail Stores 3,000,000 Controladora Comercial Mexicana,
S.A. de C.V., 8.75% due 4/21/1998 2,970,000 1,725,000 0.1
Total Fixed-Income Investments
in Mexico 47,946,958 36,188,650 2.1
<PAGE>
Trinidad & Foreign Government Republic of Trinidad and Tobago:
Tobago Obligations 3,000,000 11.50% due 11/20/1997 3,123,750 3,037,500 0.2
4,000,000 9.75% due 11/03/2000 3,991,600 3,750,000 0.2
-------------- -------------- ------
7,115,350 6,787,500 0.4
Total Fixed-Income Investments in
Trinidad & Tobago 7,115,350 6,787,500 0.4
Convertible Bonds
Mexico Industrial Services 2,000,000 Cemex, S.A., 4.25% due 11/01/1997 2,000,000 1,215,000 0.1
Total Investments in Mexican
Convertible Bonds 2,000,000 1,215,000 0.1
Total Investments in Latin
American & Caribbean Securities 87,778,886 70,481,410 4.2
NORTH
AMERICA Fixed-Income Investments
Canada Foreign Government C$ 21,800,000 Canadian Government Bonds, 10.75%
Obligations due 3/15/1998 16,269,363 16,660,315 1.0
Total Fixed-Income Investments
in Canada 16,269,363 16,660,315 1.0
United States Air Transport Delta Air Lines, Inc.:
US$ 16,182,112 9.375% due 9/11/2007 (b) 16,458,503 16,413,193 1.0
10,000,000 10.50% due 4/30/2016 10,287,500 10,636,700 0.6
7,100,000 United Air Pass-Through, 10.125%
due 3/22/2015 7,684,046 7,124,353 0.4
15,000,000 USAir Inc., 10.375% due 3/01/2013 15,000,000 12,900,000 0.8
-------------- -------------- ------
49,430,049 47,074,246 2.8
Broadcasting & 10,000,000 Continental Cablevision, 9.50%
Publishing due 8/01/2013 10,000,000 9,550,000 0.6
5,000,000 Heritage Media Corp., 11.00%
due 6/15/2002 5,247,188 5,225,000 0.3
10,000,000 Videotron Group, Ltd. Co., 10.25%
due 10/15/2002 10,043,750 10,100,000 0.6
-------------- -------------- ------
25,290,938 24,875,000 1.5
<PAGE>
Building Materials 15,300,000 Pacific Lumber Co., 10.50%
due 3/01/2003 15,462,750 14,382,000 0.9
11,035,000 USG Corp., 8.75% due 3/01/2017 9,717,469 9,931,500 0.6
-------------- -------------- ------
25,180,219 24,313,500 1.5
Capital Goods 10,000,000 Sequa Corp., 9.375% due 12/15/2003 9,915,000 9,100,000 0.5
Chemicals 33,860,000 GI Holdings, Inc., 12.65%*
due 10/01/1998 22,996,123 21,924,350 1.3
10,000,000 Uniroyal Chemical Co., 9.00%
due 9/01/2000 10,000,000 9,650,000 0.6
-------------- -------------- ------
32,996,123 31,574,350 1.9
Conglomerates 20,000,000 Coltec Industries Inc., 10.25%
due 4/01/2002 20,387,500 20,200,000 1.2
10,000,000 Sherritt Gordon, Ltd., 9.75%
due 4/01/2003 10,048,250 9,787,500 0.6
-------------- -------------- ------
30,435,750 29,987,500 1.8
Consumer Products Liggett Group, Inc.:
8,000,000 11.50% due 2/01/1999 7,724,541 5,760,000 0.3
4,199,000 19.75% due 2/01/1999 4,199,000 3,926,065 0.2
20,000,000 Revlon Consumer Products Corp.,
9.375% due 4/01/2001 17,617,619 18,600,000 1.1
-------------- -------------- ------
29,541,160 28,286,065 1.6
Containers 20,000,000 Owens Illinois, 11.00% due 12/01/2003 21,906,563 21,350,000 1.3
Energy 500,000 Clark Oil Co., 9.50% due 9/15/2004 500,000 490,000 0.0
7,000,000 Clark R & M Holdings, Inc., 11.96%*
due 2/15/2000 4,226,236 3,955,000 0.2
Gulf Canada Resources, Ltd.:
10,000,000 9.00% due 8/15/1999 9,158,438 9,850,000 0.6
6,000,000 9.25% due 1/15/2004 5,962,020 5,685,000 0.3
Maxus Energy Corp.:
6,500,000 9.875% due 10/15/2002 6,485,050 5,655,000 0.3
1,000,000 11.50% due 11/15/2015 1,051,250 880,000 0.1
15,000,000 Rowan Companies, Inc., 11.875%
due 12/01/2001 15,590,000 15,675,000 0.9
15,000,000 Seagull Energy Corp., 8.625%
due 8/01/2005 15,000,000 13,650,000 0.8
10,000,000 Trans Texas Gas Corp., 10.50%
due 9/01/2000 10,000,000 10,062,500 0.6
-------------- -------------- ------
67,972,994 65,902,500 3.8
<PAGE>
Entertainment Marvel Holdings, Inc.:
1,125,000 9.125% due 2/15/1998 995,625 998,438 0.1
26,780,000 15.28%* due 4/15/1998 18,962,644 17,005,300 1.0
5,000,000 Spectravision Inc., 24.28%*
due 10/01/1996 4,313,165 2,250,000 0.1
-------------- -------------- ------
24,271,434 20,253,738 1.2
Financial Services 17,375,000 Lomas Mortgage USA, 10.25%
due 10/01/2002 17,387,500 13,031,250 0.8
10,000,000 Penn Financial Corp., 9.25%
due 12/15/2003 10,000,000 9,200,000 0.6
10,000,000 Reliance Group Holdings, 9.00%
due 11/15/2000 10,000,000 9,375,000 0.6
-------------- -------------- ------
37,387,500 31,606,250 2.0
Food & Beverage 10,000,000 Canandaigua Wine Inc., 8.75%
due 12/15/2003 10,000,000 9,625,000 0.6
10,000,000 Coca-Cola Bottling Co., 9.00%
due 11/15/2003 10,005,000 9,425,000 0.6
20,000,000 Del Monte Corp., 10.00%
due 5/01/2003 20,025,313 14,000,000 0.8
25,000,000 Grand Union Co., 11.25%
due 7/15/2000 25,524,063 25,937,500 1.5
18,000,000 Penn Traffic Co., 9.625%
due 4/15/2005 18,308,350 16,627,500 1.0
20,000,000 Pueblo Xtra International Inc.,
9.50% due 8/01/2003 20,111,875 17,400,000 1.0
10,000,000 Specialty Foods Corp., 10.25%
due 8/15/2001 10,000,000 9,750,000 0.6
-------------- -------------- ------
113,974,601 102,765,000 6.1
Health Services 2,800,000 Continental Medical Systems, Inc.,
10.875% due 8/15/2002 2,846,625 2,632,000 0.2
2,500,000 MEDIQ, Inc., 11.125% due 7/01/1999 2,500,000 2,300,000 0.1
-------------- -------------- ------
5,346,625 4,932,000 0.3
High Technology 15,000,000 Computervision Corp., 10.875%
due 8/15/1997 15,025,000 14,550,000 0.9
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
NORTH AMERICA Percent of
(continued) Industries Face Amount Fixed-Income Investments Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
United States Home Building Del E. Webb Corp.:
(concluded) US$ 9,250,000 10.875% due 3/31/2000 $ 9,376,875 $ 9,342,500 0.6%
3,500,000 9.75% due 3/01/2003 3,472,455 3,150,000 0.2
Kaufman & Broad Home, Inc.:
2,000,000 10.375% due 9/01/1999 2,020,000 2,000,000 0.1
5,250,000 9.375% due 5/01/2003 5,217,188 4,646,250 0.3
Ryland Group, Inc.:
3,750,000 10.50% due 7/15/2002 3,733,850 3,487,500 0.2
12,250,000 9.625% due 6/01/2004 11,991,250 10,780,000 0.6
-------------- -------------- ------
35,811,618 33,406,250 2.0
Hotels & Casinos 1,906,000 Goldriver Hotel & Casino Corp.,
13.375% due 8/31/1999 2,645,548 1,448,560 0.1
10,000,000 Greate Bay Properties, Inc.,
10.875% due 1/15/2004 9,996,250 8,425,000 0.5
15,000,000 Showboat, Inc., 9.25%
due 5/01/2008 14,698,750 13,087,500 0.8
10,000,000 Trump Plaza Funding, Inc.,
10.875% due 6/15/2001 7,536,875 8,100,000 0.5
-------------- -------------- ------
34,877,423 31,061,060 1.9
Industrial Services 18,500,000 ADT Operations, 9.25%
due 8/01/2003 18,573,188 18,060,625 1.1
8,000,000 Bell & Howell Co., Series B,
10.75% due 10/01/2002 8,000,000 8,160,000 0.5
-------------- -------------- ------
26,573,188 26,220,625 1.6
Paper 10,000,000 Container Corp. of America, 9.75%
due 4/01/2003 10,200,000 9,800,000 0.6
15,000,000 Fort Howard Corp., 9.00%
due 2/01/2006 15,007,500 13,125,000 0.8
10,000,000 Riverwood International Corp.,
11.25% due 6/15/2002 10,385,750 10,550,000 0.6
Stone Container Corp.:
12,500,000 9.875% due 2/01/2001 11,667,085 12,125,000 0.7
7,500,000 10.75% due 10/01/2002 7,425,000 7,725,000 0.5
-------------- -------------- ------
54,685,335 53,325,000 3.2
<PAGE> Restaurants & 10,000,000 Family Restaurant Inc., 9.75%
Food Services due 2/01/2002 10,000,000 6,950,000 0.4
Flagstar Corp.:
2,000,000 10.875% due 12/01/2002 2,000,000 1,905,000 0.1
17,000,000 11.375% due 9/15/2003 16,640,000 14,322,500 0.9
20,000,000 Foodmaker, Inc., 9.75%
due 6/01/2002 19,554,250 14,600,000 0.9
-------------- -------------- ------
48,194,250 37,777,500 2.3
Retail Stores 10,000,000 Specialty Retailers, Inc., 10.00%
due 8/15/2000 10,112,500 9,200,000 0.5
Textiles 10,000,000 WestPoint Stevens Inc., 8.75%
due 12/15/2001 10,093,750 9,425,000 0.6
Transport Services 10,000,000 Viking Star Shipping Co., 9.625%
due 7/15/2003 10,028,438 9,400,000 0.6
US Government & Agency 9,000,000 Federal National Mortgage
Obligations Association, 8.55% due
12/10/2004 8,992,969 9,202,500 0.6
Utilities 9,848,000 Beaver Valley II Funding, 9.00%
due 6/01/2017 7,262,900 7,533,720 0.4
4,000,000 CTC Mansfield Funding Corp.,
11.125% due 9/30/2016 4,301,250 3,959,960 0.2
Midland Cogeneration:
9,070,566 10.33% due 7/23/2002 (b) 8,889,155 9,002,537 0.5
10,000,000 13.25% due 7/23/2006 11,183,750 10,275,100 0.6
9,100,000 Tucson Electric Power Co.,
10.732% due 1/01/2013 8,713,250 8,417,500 0.5
-------------- -------------- ------
40,350,305 39,188,817 2.2
Total Fixed-Income Investments in
the United States 768,393,732 714,776,901 42.7
Convertible Bonds
United States Airlines 3,000,000 AMR Corp., 6.125% due 11/01/2024** 2,443,103 2,842,500 0.2
Computers 2,500,000 Data General Corp., 7.75% due
6/01/2001 2,479,375 2,025,000 0.1
1,000,000 Storage Technology Corp., 8.00%
due 5/31/2015 1,132,500 842,500 0.1
-------------- -------------- ------
3,611,875 2,867,500 0.2
<PAGE>
Conglomerate 2,000,000 Polyphase Corp., 12.00% due
7/01/1999 2,000,000 1,550,000 0.1
1,500,000 Varlen Corporation, 6.50%
due 6/01/2003 1,480,000 1,436,250 0.1
-------------- -------------- ------
3,480,000 2,986,250 0.2
Electronics 3,125,000 Wilcox & Gibbs Inc., 7.00%
due 8/01/2014** 3,065,625 2,750,000 0.2
1,000,000 Zenith Electronics Corp., 8.50%
due 1/18/2001** 1,303,590 1,022,500 0.1
-------------- -------------- ------
4,369,215 3,772,500 0.3
Entertainment 4,500,000 Time Warner Inc., 7.99%* due
12/17/2012 1,433,411 1,428,750 0.1
Financial Services 700,000 Michigan National Corporation,
8.00% due 11/10/1998 707,000 707,000 0.0
Food & Beverage 3,000,000 Boston Chicken Inc., 4.50%
due 2/01/2004 3,000,000 2,227,500 0.1
3,000,000 Farm Fresh, Inc., 7.50%
due 3/01/2010 1,562,500 1,695,000 0.1
-------------- -------------- ------
4,562,500 3,922,500 0.2
Health Services 1,225,000 Regency Health Services, Inc.,
6.50% due 7/15/2003** 1,556,387 1,428,656 0.1
Healthcare Pharmaceutical Marketing
Services, Inc.:
605,000 6.25% due 2/01/2003 467,263 379,637 0.0
700,000 6.25% due 2/01/2003-EURO** 536,700 441,000 0.0
-------------- -------------- ------
1,003,963 820,637 0.0
Home Building 1,000,000 Engle Homes, Inc., 7.00%
due 3/01/2003 885,380 760,000 0.0
1,500,000 Toll Brothers Inc., 4.75%
due 1/15/2004 1,500,000 1,155,000 0.1
1,750,000 US Home Corp., 4.875%
due 11/01/2005 1,741,000 1,181,250 0.1
-------------- -------------- ------
4,126,380 3,096,250 0.2
Industrial Services 500,000 Mascotech, Inc., 4.50%
due 12/15/2003 500,000 343,750 0.0
<PAGE>
Insurance 500,000 Alexander & Alexander Services
Inc., 11.00% due 4/15/2007 508,750 510,000 0.0
3,320,000 Statesman Group, Inc., 6.25%
due 5/01/2003 3,368,957 3,353,200 0.2
-------------- -------------- ------
3,877,707 3,863,200 0.2
Machine--Diversified 1,500,000 Cooper Industries, Inc., 7.05%
due 1/01/2015 1,474,999 1,522,500 0.1
Machinery--Paper 2,000,000 Albany International Corp., 5.25%
due 3/15/2002 1,827,863 1,750,000 0.1
Mining 2,000,000 Coeur D'Alene Mines Corp., 6.375%
due 11/31/2004 1,916,550 1,775,000 0.1
Oil--Domestic 4,000,000 USX Corp., 7.00% due 6/15/2017 3,346,875 3,390,000 0.2
2,080,000 Wainoco Oil Corp., 7.75%
due 6/01/2014 1,880,352 1,861,600 0.1
-------------- -------------- ------
5,227,227 5,251,600 0.3
Pharmaceuticals 2,600,000 Bindley Western Industries, Inc.,
6.50% due 10/01/2002 2,563,000 2,561,000 0.2
2,000,000 IVAX Corp., 6.50% due 11/15/2001 1,897,500 1,940,000 0.1
-------------- -------------- ------
4,460,500 4,501,000 0.3
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
NORTH AMERICA Percent of
(concluded) Industries Face Amount Convertible Bonds Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
United States Pollution Control US$ 1,100,000 Roy F. Weston, Inc., 7.00%
(concluded) due 4/15/2002 $ 917,150 $ 902,000 0.1%
1,015,000 Sanifill Inc., 7.50%
due 6/01/2006** 1,073,068 1,015,000 0.1
1,950,000 USA Waste Services Inc.,
8.50% due 10/15/2002 2,273,000 1,930,500 0.1
-------------- -------------- ------
4,263,218 3,847,500 0.3
Real Estate 2,390,000 Pacific Gulf Properties, Inc.,
Investment Trust 8.375% due 2/15/2001 2,102,863 2,103,200 0.1
<PAGE>
Retail 1,250,000 Baker (J.) Inc., 7.00%
due 6/01/2002 1,249,085 1,250,000 0.1
2,623,000 Ingles Markets, Inc., 10.00%
due 10/15/2008 2,755,461 2,741,035 0.2
1,000,000 Michaels Stores, Inc.,
4.75% due 1/15/2003 1,016,000 995,000 0.1
500,000 Sports & Recreation Inc., 4.25%
due 11/01/2000 371,250 365,000 0.0
-------------- -------------- ------
5,391,796 5,351,035 0.4
Telecommunication 285,000 M/A Communications Inc., 9.25%
Equipment due 5/15/2006 285,000 285,712 0.0
Telecommunications 3,210,000 Intelcom Group Inc., 7.00%
due 10/30/1998 (a) 3,199,631 2,504,417 0.1
Textiles 875,000 Fieldcrest Cannon, Inc., 6.00%
due 3/15/2012 661,250 678,125 0.0
2,150,000 Guilford Mills, Inc., 6.00%
due 9/15/2012 1,905,040 1,924,250 0.1
3,000,000 Interface, Inc., 8.00%
due 9/15/2013** 2,925,462 2,970,000 0.2
-------------- -------------- ------
5,491,752 5,572,375 0.3
Transportation 511,000 Builders Transport & Trucking Co.,
8.00% due 8/15/2005** 514,832 459,900 0.0
Total Investments in United States
Convertible Bonds 67,827,772 63,003,732 3.8
Shares Convertible Preferred Stocks,
Held Common Stocks & Warrants
United States Airlines 52,500 Delta Air Lines Inc., $3.50
(Series C), Conv. Pfd.** 2,756,900 2,782,500 0.2
25,000 United Airlines Corp., $6.25
(Series A), Conv. Pfd. 2,482,500 2,225,000 0.1
-------------- -------------- ------
5,239,400 5,007,500 0.3
Banking & Finance 156,250 Citicorp, Pfd. "P" $1.22 3,069,375 3,027,344 0.2
48,300 Rochester Community Savings Bank
$1.75 (Series B) 1,387,224 1,328,250 0.1
36,300 Southern National Corp., Pfd.
$1.6875 1,158,678 1,102,612 0.1
55,200 Union Planters Corp., Pfd. $2.00 1,949,405 1,669,800 0.1
-------------- -------------- ------
7,564,682 7,128,006 0.5
<PAGE>
Building Materials 38,800 Owens-Corning Fiberglass Corp. 1,296,007 1,396,800 0.1
Cement 180,000 Southdown, Inc., Pfd. $.70 1,804,575 1,710,000 0.1
5,400 Southdown, Inc., $3.75 Conv. Pfd. 240,300 250,425 0.0
-------------- -------------- ------
2,044,875 1,960,425 0.1
Environmental 3,520,000 Allied Waste Industries, Inc.,
$90 Conv. Pfd. 3,520,401 3,865,312 0.2
Food & Beverage 316,500 RJR Nabisco, Inc., Pfd. $.60
(Series C) 2,060,207 2,017,687 0.1
High Technology 91,053 Anacomp, Inc. (Warrants)(c) 120,000 68,290 0.0
Hotels & Casinos 75,000 Goldriver Hotel & Casino Corp.
Liquidating Trust 75,000 53,437 0.0
30,000 Goldriver Hotel & Casino Corp.
(Series B)(d) 219,738 84,375 0.0
6,000 Trump Taj Mahal Funding, Inc.
(Class A) 3,000 48,000 0.0
-------------- -------------- ------
297,738 185,812 0.0
Industrial 20,000 Mascotech, Inc., Pfd. $1.20 312,460 257,500 0.0
58,800 Petrolane, Inc. 683,550 882,000 0.1
10,000 UGI Corp. (Warrants)(c) 43,750 2,000 0.0
-------------- -------------- ------
1,039,760 1,141,500 0.1
Insurance 1,500 Westbridge Capital Corp., Pfd. 1,500,000 1,417,500 0.1
Oil & Gas 113,600 Gerrity Oil & Gas Corp., Pfd.
$1.50 1,882,785 1,349,000 0.1
26,500 Snyder Oil Corp., Pfd. $1.50
(Series A) 542,841 569,750 0.0
20,000 Western Gas Resources, Inc.,
Pfd. $2.62 1,000,000 740,000 0.0
10,000 Williams Companies, Inc., Pfd.
$3.50 518,440 547,500 0.0
-------------- -------------- ------
3,944,066 3,206,250 0.1
Total Investments in United States
Convertible Preferred Stocks,
Common Stocks & Warrants 28,627,136 27,395,082 1.6
<PAGE>
Total Investments in
North American Securities 881,118,003 821,836,030 49.1
PACIFIC
BASIN Fixed-Income Investments
Australia Foreign Government Australian Government Bonds:
Obligations-- A$ 30,000,000 12.00% due 7/15/1999 23,812,996 23,904,469 1.4
Regional & Agency 84,600,000 12.00% due 11/15/2001 69,728,012 68,766,125 4.1
15,000,000 9.50% due 8/15/2003 10,915,668 10,802,926 0.7
21,500,000 Queensland Treasury Corp.,
Global Notes, 8.00% due 5/14/2003 16,111,077 14,001,382 0.8
18,000,000 Western Australia Treasury Corp.,
10.00% due 7/15/2005 12,553,645 12,934,249 0.8
-------------- -------------- ------
133,121,398 130,409,151 7.8
Total Fixed-Income Investments
in Australia 133,121,398 130,409,151 7.8
New Zealand Foreign Government NZ$ 39,400,000 New Zealand Government Bonds, 8.00%
Obligations due 7/15/1998 24,551,311 25,619,558 1.5
Total Fixed-Income Investments in
New Zealand 24,551,311 25,619,558 1.5
Philippines Industrial US$ 3,000,000 San Miguel Corp., 9.00% due 4/27/2000 2,981,000 2,940,000 0.2
Total Fixed-Income Investments
in the Philippines 2,981,000 2,940,000 0.2
Total Investments in Pacific
Basin Securities 160,653,709 158,968,709 9.5
WESTERN
EUROPE
Denmark Foreign Government Dkr 208,500,000 Denmark Kingdom, 9.00% due 11/15/2000 37,315,108 38,990,583 2.3
Obligations
Total Fixed-Income Investments
in Denmark 37,315,108 38,990,583 2.3
Germany Consumer Products US$ 10,000,000 Tarkett International, 9.00%
due 3/01/2002 10,000,000 9,400,000 0.6
Total Fixed-Income Investments
in Germany 10,000,000 9,400,000 0.6
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<CAPTION>
WESTERN EUROPE Percent of
(concluded) Industries Face Amount Fixed-Income Investments Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
Italy Foreign Government Buoni Poliennali del Tesoro
Obligations (Italian Government Bonds):
Lit 49,000,000,000 8.50% due 8/01/1997 $ 27,943,709 $ 26,533,255 1.6%
55,000,000,000 12.00% due 9/18/1998 36,600,703 31,983,520 1.9
70,400,000,000 9.00% due 10/01/1998 42,566,872 37,578,434 2.3
118,000,000,000 8.50% due 1/01/1999 68,257,247 60,993,290 3.6
-------------- -------------- ------
175,368,531 157,088,499 9.4
Total Fixed-Income Investments
in Italy 175,368,531 157,088,499 9.4
Portugal Supranational Esc 750,000,000 European Investment Bank, 15.50%
Entities due 7/12/1995 6,389,454 5,288,462 0.3
Total Fixed-Income Investments
in Portugal 6,389,454 5,288,462 0.3
Spain Foreign Government Government of Spain:
Obligations Pta 16,992,000,000 10.25% due 11/30/1998 129,017,572 127,554,176 7.6
1,524,000,000 12.25% due 3/25/2000 12,076,223 12,111,282 0.7
-------------- -------------- ------
141,093,795 139,665,458 8.3
Total Fixed-Income Investments
in Spain 141,093,795 139,665,458 8.3
United Foreign Government United Kingdom Gilt:
Kingdom Obligations Pound 63,700,000 9.00% due 3/03/2000 101,744,036 105,450,732 6.3
Sterling 10,250,000 9.50% due 4/18/2005 17,203,187 17,595,621 1.1
-------------- -------------- ------
118,947,223 123,046,353 7.4
Total Fixed-Income Investments
in the United Kingdom 118,947,223 123,046,353 7.4
Convertible Bonds
<PAGE>
United Foreign Government 1,250,000 Hanson Trust PLC, 9.50% due 1/31/2006 2,074,884 2,064,225 0.1
Kingdom Obligations
Total Investments in United Kingdom
Convertible Bonds 2,074,884 2,064,225 0.1
Total Investments in
Western European Securities 491,188,995 475,543,580 28.4
SHORT-TERM
SECURITIES Issue
United States Commercial US$ 27,000,000 Ciesco L.P., 6.00% due 4/05/1995 26,991,000 26,991,000 1.6
Paper*** 64,408,000 General Electric Capital Corp., 6.25%
due 4/03/1995 64,408,000 64,408,000 3.8
-------------- -------------- ------
91,399,000 91,399,000 5.4
US Government US Treasury Bills:
Obligations*** 400,000 5.71% due 6/01/1995 396,257 396,180 0.0
500,000 5.719% due 6/01/1995 495,313 495,225 0.0
100,000 5.739% due 6/01/1995 99,059 99,045 0.0
1,400,000 5.74% due 6/01/1995 1,386,830 1,386,630 0.1
-------------- -------------- ------
2,377,459 2,377,080 0.1
Total Investments in Short-
Term Securities 93,776,459 93,776,080 5.5
Total Investments $1,724,484,552 1,630,236,909 97.3
==============
Variation Margin on Financial Futures Contracts+++ (69,738) 0.0
Short Sales (Proceeds--$5,051,803)** (4,790,500) (0.3)
Unrealized Depreciation on Forward Foreign Exchange Contracts+++++ (1,531,426) (0.1)
Other Assets Less Liabilities 51,716,584 3.1
-------------- ------
Net Assets $1,675,561,829 100.0%
============== ======
<PAGE>
Net Asset Class A--Based on net assets of $289,812,386 and 35,196,580
Value: shares outstanding $ 8.23
==============
Class B--Based on net assets of $1,381,225,917 and 167,855,685
shares outstanding $ 8.23
==============
Class C--Based on net assets of $2,686,564 and 326,680
shares outstanding $ 8.22
==============
Class D--Based on net assets of $1,836,962 and 223,083
shares outstanding $ 8.23
==============
<FN>
*Represents the yield to maturity on this zero coupon issue.
**Covered Short Sales entered into as of March 31, 1995 are as follows:
<CAPTION>
Shares Issue Value
<C> <S> <C>
10,000 AMR Corp. $ (647,500)
6,800 Builders Transport & Trucking Co. (81,600)
9,000 Delta Airlines, Inc. (564,750)
71,600 Interface, Inc. (1,029,250)
57,000 Pharmaceutical Marketing Services, Inc. (527,250)
69,900 Regency Health Services, Inc. (926,175)
13,800 Sanifill Inc. (339,825)
7,600 Wilcox & Gibbs Inc. (54,150)
80,000 Zenith Electronics Corp. (620,000)
Total (Proceeds--$5,051,803) $(4,790,500)
===========
***Commercial Paper and certain US Government Obligations are
traded on a discount basis; the interest rates shown are the
discount rates paid at the time of purchase by the Fund.
(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) 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.
(d) Each share of Series B stock contains a right which entitles
the holder to purchase a predetermined number of shares of
Preferred Stock.
<PAGE>
+++Financial futures contracts sold as of March 31, 1995 were as follows:
<CAPTION>
Number of Expiration
Contracts Issue Exchange Date Value
<C> <S> <S> <S> <C>
100 US Treasury Bond OTC June 1995 $ (10,390,625)
457 Italian BTP LIFFE June 1995 (50,283,449)
150 Australian
Government Bond SFE June 1995 (12,424,227)
Total Futures Contracts Sold
(Total Contract Price--$72,914,186) $ (73,098,301)
==============
The market value of pledged securities is $2,377,080.
+++++Forward foreign exchange contracts as of March 31, 1995 are as follows:
<CAPTION>
Unrealized
Expiration Appreciation
Date (Depreciation)
<S> <C> <S> <C>
Foreign Currency Purchased
DM 424,083,229 April 1995 $ 704,161
DM 187,478,053 May 1995 981,452
Fim 51,377,346 May 1995 (24,814)
Total (US$ Commitment--$448,854,380) $ 1,660,799
-----------
Foreign Currency Sold
DM 241,661,570 April 1995 $ 175,037
Dkr 41,226,000 April 1995 (234,337)
Fim 55,303,420 May 1995 (151,787)
Lit 185,599,980,000 May 1995 (1,286,570)
Pta 16,520,919,944 April 1995 (1,694,568)
Total (US$ Commitment--$429,689,399) $(3,192,225)
-----------
Total Unrealized Depreciation on Forward
Foreign Exchange Contracts--Net $(1,531,426)
===========
</TABLE>
<PAGE>
