MERRILL LYNCH
SHORT-TERM
GLOBAL INCOME
FUND, INC.
FUND LOGO
Semi-Annual Report
April 30, 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.
<PAGE>
Merrill Lynch
Short-Term Global
Income Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
MERRILL LYNCH SHORT-TERM GLOBAL INCOME FUND, INC.
Officers and
Directors
Arthur Zeikel, President and Director
Donald Cecil, Director
Edward H. Meyer, Director
Charles C. Reilly, Director
Richard R. West, Director
Edward D. Zinbarg, Director
Terry K. Glenn, Executive Vice President
Joseph T. Monagle, Jr., Senior Vice President
Alex V. Bouzakis, Vice President
Donald C. Burke, Vice President
Edward F. Gobora, Vice President
David B. Walter, Vice President
Stephen Yardley, Vice President
Gerald M. Richard, Treasurer
Mark B. Goldfus, Secretary
Custodian
The Chase Manhattan Bank, N.A.
Global Securities Services
4 Chase MetroTech Center, 18th Floor
Brooklyn, New York 11245
Transfer Agent
Merrill Lynch Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, Florida 32246-6484
(800) 637-3863
<PAGE>
DEAR SHAREHOLDER
During the April quarter, as global fixed-
income prices firmed, we remained con-
servatively positioned in the higher-
yielding dollar-bloc markets. For the
dollar-bloc countries, the Fund pur-
chased government securities with
maturities of two years or less as
positive yield curves proved attractive.
Of special note, the Fund's exposure
was increased in Canada and Australia
as yield spreads widened to over 200
basis points (2.00%) versus comparable
maturity Treasury securities in the
United States. In addition, non-dollar
currency exposure for the most part was
hedged into US dollars to take advantage
of attractive interest rate differentials.
In the European bloc, we slightly reduced
the Fund's bond exposure following the
Bundesbank's latest reduction in the
discount rate to 4.00%. Looking ahead,
we expect positive economic growth
fundamentals to keep European central
banks "on hold" with regard to additional
monetary policy easings for the near term.
Market Review
On February 1, 1995, the Federal Open
Market Committee approved an increase
in the Federal Funds rate target to
6.00% from 5.50%. The US central bank
also approved an increase in the discount
rate to 5.25% from 4.75%. These actions
were considered necessary to keep infla-
tion contained and thereby foster sus-
tainable economic growth. In response
to the US interest rate hike, in February
the Bank of Canada raised its money
market rates 100 basis points to 7.75%
and the Bank of England raised the
UK-base rate to 6.75% on February 7, 1995.
<PAGE>
At the end of February, the Canadian
budget was released in line with market
expectations. Spending cuts and revenue
gains are expected to reduce the deficit
to $21 billion US dollars, or 3% of gross
domestic product (GDP), by 1997. This
creditable budget should bring confi-
dence back to the Canadian currency
and bond market going forward.
On March 2, 1995, the US Senate re-
jected a Balanced Budget Amendment
to the US Constitution, with Senate pro-
ponents falling just short of the votes
needed to pass the bill. The timing of
the next attempt at a Balanced Budget
Amendment is uncertain, but Senate
Majority Leader Robert Dole, realizing
most polls indicate a large majority of
voters are in favor of the amendment,
has threatened to revisit the issue in the
heat of the 1996 Presidential and
Congressional campaigns.
In Europe, the Spanish peseta was de-
valued by 7% within the exchange rate
mechanism (ERM) and the Portuguese
escudo was devalued by 3.5% on March
5, 1995. The official communique noted
that Spain had "confirmed its commit-
ment to a stable exchange rate" and
would use "necessary measures" to
defend the peseta. Portuguese authori-
ties stressed that they had not requested
the escudo devaluation, but a technical
adjustment was needed to stay in line
with the peseta. In addition, on March 8
several European central banks raised
their key interest rates. The central bank
of Denmark raised the discount rate
100 basis points to 6.00%; the Belgium
National Bank raised the central rate by
100 basis points to 5.85%; and the Bank
of France raised short-term interest rates
120 basis points to 8.00%. In general, the
central banks increased rates in defense
of their respective currencies. In Italy,
the Italian government led by Prime
Minister Lamberto Dini won a vote of
confidence which allowed the proposed
<PAGE>
budget to pass through parliament and
become law. The 21 trillion Lira mini-
budget aims to contain the 1995 deficit
within its official 138.6 trillion Lira
target, equivalent to 7.8% of GDP. While
the prime minister criticized those
parties that opposed the mini-budgets,
he also suggested that the lack of con-
fidence in parliament's commitment to
implementing an effective deficit reduc-
tion measure could have created tension
in the financial markets. We anticipate
that the Italian bond market and cur-
rency will begin to stabilize as much of
the negative publicity of governmental
"stagnation" proves exaggerated.
The Bundesbank surprised investors and
submitted to foreign exchange pressures
on March 30, 1995 by reducing the dis-
count rate by 50 basis points to 4.00% and
the repurchase agreement rate by 0.35%
to 4.50%. The Bundesbank justified its
decision to lower rates on the basis of
favorable developments in money sup-
ply and the change in policy environ-
ment resulting from the strength in the
Deutschemark. Belgium, Holland,
Austria and Switzerland also cut rates
in a coordinated move with Germany.
In Latin America, the Mexican govern-
ment announced a fiscal austerity pack-
age which called for large tax increases
and extensive cuts in government spend-
ing. The package should help to restore
confidence in the country and the peso.
The US dollar finally entered a period of
consolidation in April after sharp moves
lower against the Deutschemark and
the yen in the first quarter of 1995.
Ongoing trade tensions and the failure
of the latest Japanese economic
package helped to push the US dollar/
yen ratio to a record level of 79.75.
Deutschemark strength within Europe
was attributable to political uncertainty
in several countries including Spain,
<PAGE>
Italy and France which in turn caused
instability in the ERM. Decreased expec-
tations of higher interest rates in the
United States, the limited progress on
the US/Japan trade negotiations, the
growing lack of confidence in the effec-
tiveness of central bank intervention
and an unclear commitment by the US
administration to a strong US exchange
rate continued to exert pressure on the
US dollar throughout the period.
Several European central banks lowered
interest rates in the first two weeks of
April. The Banque de France cut its
24-hour repurchase agreement rate 25
basis points to 7.75%. Denmark's
Nationalbank also lowered its repurchase
agreement rate by 0.25% to 6.75%. In
addition, The National Bank of Belgium
cut the central rate twice during April
for a total of 50 basis points to the 4.75%
level. In general, central banks stated
that stability in the financial markets
and the strength of their respective
currencies against the Deutschemark
justified the latest monetary policy
adjustments.
Moody's Investors Service, Inc. lowered
its long-term rating on Canada's domes-
tic currency debt from Aaa to Aa1 and
its rating on Canada's foreign currency
debt from Aa1 to Aa2. Moody's expressed
concern over the country's deficit prob-
lems, the feasibility of the new budget
reforms and the volatility in financial
markets heightened by the crisis in
Mexico. Canadian currency and bonds
weakened following the announcement
but quickly retraced to higher prices
as the downgrades were factored into
the markets.
<PAGE>
In Asia, the Japanese government's
emergency yen package, which was
announced on April 14, included a
75 basis point cut in the official discount
rate. The package was implemented in
an effort to reduce Japan's current
account surplus, increase imports,
stimulate the economy and revitalize
financial markets. The major focus
of the newly initiated economic meas-
ures was to halt the trend of yen appre-
ciation and mitigate the damage it has
inflicted on Japan's economy.
As the reporting period concluded,
the Group of Seven leading industrial-
ized nations (G-7) exchanged views on
the current state of global economic and
financial conditions on April 25 in Wash-
ington, DC. The countries pledged to
adjust imbalances in their economies in
an attempt to reverse the dollar's weak-
ness and restore stability to the currency
markets. Although the G-7 agreed to
continue to cooperate closely in ex-
change markets, there were no explicit
solutions expressed to stabilize the
downtrending US dollar.
In Conclusion
Going forward, we anticipate interest
rates to trend higher in the second half
of 1995 as global economic growth and
inflation criteria may force central banks
to become cautious over the near term.
We also believe the US dollar is in a
bottoming process as budget deficit
reduction and other economic funda-
mentals are likely to be moving in favor
of the US dollar.
We thank you for your continued invest-
ment in Merrill Lynch Short-Term Global
Income Fund, Inc., and we look forward
to reviewing our outlook with you again
in our next report to shareholders.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
<PAGE>
(Alex V. Bouzakis)
Alex V. Bouzakis
Vice President and Senior
Portfolio Manager
(Edward F. Gobora)
Edward F. Gobora
Vice President and Portfolio Manager
(David B. Walter)
David B. Walter
Vice President and Portfolio Manager
(Stephen Yardley)
Stephen Yardley
Vice President and Portfolio Manager
June 8, 1995
PROXY RESULTS
During the six-month period ended April 30, 1995, Merrill Lynch Short-Term
Global Income Fund, Inc. shareholders voted on the following proposals.
Proposals 1, 2 and 4 were approved at a special shareholders' meeting
on September 28, 1994. Proposal 3 was passed at a special shareholders'
meeting on January 31, 1995. The description of each proposal and number
of shares voted are as follows:
<PAGE>
<TABLE>
<CAPTION>
Shares Voted Shares Voted
For Without Authority
<S> <S> <C> <C>
1. To elect the Fund's Board of Directors: Donald Cecil 111,928,141 3,642,892
Edward H. Meyer 111,924,348 3,646,685
Charles C. Reilly 111,984,474 3,586,559
Richard R. West 111,917,489 3,653,544
Arthur Zeikel 111,918,203 3,652,830
<CAPTION>
Shares Voted Shares Voted Shares Voted
For Against Abstain
<S> <C> <C> <C>
2. To select Deloitte & Touche LLP as the Fund's independent auditors. 111,101,494 1,268,567 3,200,972
3. To approve certain changes to the Fund's fundamental investment restrictions. 56,283,485 2,808,984 4,169,032
4. To amend the Fund's articles of incorporation to implement the Merrill Lynch
Select Pricing SM System. 102,874,348 4,973,483 7,723,202
</TABLE>
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 maintenance fees. Class A Shares are available only
to eligible investors, as detailed in the Fund's prospectus. If
you were a Class A shareholder prior to October 21, 1994,
your Class A Shares were redesignated to Class D Shares on
October 21, 1994, which, in the case of certain eligible
investors, were simultaneously exchanged for Class A Shares.
*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.
<PAGE>
*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 B and Class D Shares
are presented in the "Performance Summary," "Recent
Performance Results" and "Average Annual Total Return"
tables on pages 5, 6 and 7. Data for Class A and Class C Shares
are also presented in the "Recent Performance Results" and
"Aggregate Total Return" tables on pages 5, 6 and 7.
The "Recent Performance Results" table shows investment
results before the deduction of any sales charges for Class B
and Class D Shares for the 12-month and 3-month periods
ended April 30, 1995 and for Class A and Class C Shares for
the since inception and 3-month periods ended April 30,
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 repre-
sentation 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
Total Return
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 3/31/95 -0.97% -4.70%
Inception (8/3/90) through 3/31/95 +2.17 +2.17
[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>
% Return Without % Return With
Sales Charge Sales Charge**
Class D Shares*
Year Ended 3/31/95 -0.44% -4.43%
Inception (8/3/90) through 3/31/95 +2.73 +1.83
[FN]
*Maximum sales charge is 4%. On 10/21/94, Class A Shares were redesig-
nated to Class D Shares.
**Assuming maximum sales charge.
Aggregate
Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Inception (10/21/94) through 3/31/95 -0.21% -4.20%
[FN]
*Maximum sales charge is 4%. On 10/21/94, Class A Shares were redesig-
nated to Class D Shares.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class C Shares*
Inception (10/21/94) through 3/31/95 -2.70% -3.65%
[FN]
*Maximum contingent deferred sales charge is 1% and is reduced to 0%
after 1 year.
**Assuming payment of applicable contingent deferred sales charge.
<PAGE>
PERFORMANCE DATA (concluded)
<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>
8/3/90-12/31/90 $10.00 $9.93 -- $0.404 +3.40%
1991 9.93 9.68 -- 0.885 +6.63
1992 9.68 8.69 -- 0.687 -3.39
1993 8.69 8.63 -- 0.581 +6.15
1994 8.63 7.89 -- 0.463 -3.30
1/1/95-4/30/95 7.89 7.88 -- 0.141 +1.80
------
Total $3.161
Cumulative total return as of 4/30/95: +11.31%
<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>
Performance
Summary-
Class D Shares***
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<C> <C> <C> <C> <C> <C>
8/3/90-12/31/90 $10.00 $9.93 -- $0.436 +3.73%
1991 9.93 9.68 -- 0.941 +7.23
1992 9.68 8.70 -- 0.735 -2.79
1993 8.70 8.64 -- 0.625 +6.69
1994 8.64 7.89 -- 0.506 -2.91
1/1/95-4/30/95 7.89 7.88 -- 0.153 +1.96
------
Total $3.396
Cumulative total return as of 4/30/95: +14.19%**
<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 include sales charge;
results would be lower if sales charge was included.
***As a result of the implementation of the Merrill Lynch Select Pricing SM
System, Class A Shares of the Fund outstanding prior to October 21, 1994
have been redesignated to Class D Shares.
</TABLE>
<PAGE>
<TABLE>
Recent
Performance
Results
<CAPTION>
12 Month 3 Month
4/30/95 1/31/95 4/30/94++ % Change++ % Change
<S> <C> <C> <C> <C> <C>
Class A Shares* $7.89 $7.92 $8.11 -2.71% -0.38%
Class B Shares* 7.88 7.91 8.36 -5.74 -0.38
Class C Shares* 7.76 7.91 8.11 -4.32 -1.90
Class D Shares* 7.88 7.91 8.37 -5.85 -0.38
Class A Shares--Total Return* +0.67(1) +1.19(2)
Class B Shares--Total Return* -0.22(3) +1.00(4)
Class C Shares--Total Return* -1.66(5) -0.66(6)
Class D Shares--Total Return* +0.18(7) +1.13(8)
Class A Shares--Standardized 30-day Yield 5.82%
Class B Shares--Standardized 30-day Yield 5.24%
Class C Shares--Standardized 30-day Yield 5.03%
Class D Shares--Standardized 30-day Yield 5.55%
<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 A and Class C Shares are since inception
(10/21/94).
(1)Percent change includes reinvestment of $0.262 per share ordinary income dividends.
(2)Percent change includes reinvestment of $0.134 per share ordinary income dividends.
(3)Percent change includes reinvestment of $0.459 per share ordinary income dividends.
(4)Percent change includes reinvestment of $0.118 per share ordinary income dividends.
(5)Percent change includes reinvestment of $0.206 per share ordinary income dividends.
(6)Percent change includes reinvestment of $0.108 per share ordinary income dividends.
(7)Percent change includes reinvestment of $0.501 per share ordinary income dividends.
(8)Percent change includes reinvestment of $0.129 per share ordinary income dividends.
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS
<CAPTION>
Maturity Interest Value Percent of
COUNTRIES Face Amount Date Issue Rate++ (Note 1a) Net Assets
<S> <S> <C> <C> <S> <C> <C> <C>
Australia A$ 42,830,000 3/01/96 New South Wales Treasury Corp. (3) 8.50 % $ 31,120,828 5.67%
63,200,000 1/15/97 Treasury Western Australia (1) 10.00 46,709,561 8.51
Total Investments in Australia
(Cost--$78,156,558) 77,830,389 14.18
Canada C$ 124,260,000 2/08/96 Canadian Treasury Bill (1) 9.07 86,133,007 15.69
65,050,000 3/07/96 Canadian Treasury Bill (1) 7.85 44,814,986 8.17
Total Investments in Canada
(Cost--$128,167,474) 130,947,993 23.86
European ECU 7,800,000 1/21/97 United Kingdom Government Bonds (1) 5.25 10,040,160 1.83
Currency
Units
Total Investments in European Currency
Units (Cost--$9,242,433) 10,040,160 1.83
France Ffr 64,200,000 10/12/96 French Treasury Bill (1) 6.50 12,980,049 2.36
Total Investments in France
(Cost--$13,233,389) 12,980,049 2.36
Ireland Iep 13,700,000 7/30/96 Irish Gilt (1) 9.00 22,660,359 4.13
Total Investments in Ireland
(Cost--$22,412,463) 22,660,359 4.13
Italy Lit 28,700,000,000 10/01/96 Buoni Poliennali del Tesoro (Italian
Government Bonds)(1) 9.00 16,588,121 3.02
Total Investments in Italy
(Cost--$17,394,979) 16,588,121 3.02
New NZ$ 76,485,000 11/15/95 New Zealand Government Bonds (1) 8.00 51,154,094 9.32
Zealand
Total Investments in New Zealand
(Cost--$44,692,900) 51,154,094 9.32
<PAGE>
Spain Pta 4,628,000,000 11/30/96 Bonos del Estado (Spanish Government
Bonds)(1) 10.55 37,596,614 6.85
Total Investments in Spain
(Cost--$35,871,935) 37,596,614 6.85
United Pound 16,900,000 9/01/97 United Kingdom Gilt (1) 8.75 27,642,644 5.04
Kingdom Sterling
Total Investments in the United Kingdom
(Cost--$26,859,911) 27,642,644 5.04
United US$ 22,381,000 5/23/95 Caisse des Depots et Consignations (2) 6.00 22,298,936 4.06
States 22,927,000 5/05/95 Goldman Sachs, Ltd. (2) 6.05 22,911,588 4.17
26,907,878 5/01/95 Lehman Brothers, Repurchase Agreement*
purchased on 4/28/95 (2) 5.875 26,907,878 4.90
22,630,000 5/15/95 Miles, Inc. (2) 6.02 22,577,021 4.11
25,000,000 5/01/95 Morgan Stanley Group Inc., Repurchase
Agreement* purchased on 4/28/95 (2) 5.875 25,000,000 4.56
23,254,000 5/11/95 Nomura Holding America Inc. (2) 6.049 23,245,294 4.24
25,000,000 5/01/95 Schweizerischer Bankverein SBC (Swiss
Bank), Repurchase Agreement* purchased
on 4/28/95 (2) 5.90 25,000,000 4.56
Total Investments in the United States
(Cost--$167,910,343) 167,940,717 30.60
Total Investments (Cost--$543,942,385) 555,381,140 101.19
<CAPTION>
Expiration Strike
Par Value Date Price
<S> <S> <C> <S> <S> <S> <C> <C> <C>
Currency US$ 22,940,000 May 1995 Japanese Yen YEN 85.00 (16,058) 0.00
Put
Options
Written
Total Options Written
(Premiums Received--$38,998) (16,058) 0.00
Total Investments, Net of Options Written (Cost--$543,903,387) 555,365,082 101.19
Unrealized Depreciation on Forward Foreign Exchange Contracts++++ (7,618,709) (1.39)
Other Assets Less Liabilities 1,109,820 0.20
------------ -------
Net Assets $548,856,193 100.00%
============ =======
<PAGE>
<FN>
*Repurchase Agreements are fully collateralized by US Government &
Agency Obligations.
++Certain Commercial Paper, US Treasury and Foreign Treasury Obligations
are traded on a discount basis; the interest rates shown represent the yield-
to-maturity at the time of purchase by the Fund. Other securities bear
interest at the rates shown, payable at fixed dates or upon maturity.
Interest rates on floating rate securities are adjusted periodically based
on appropriate indexes. The interest rates shown are those in effect at
April 30, 1995.
Corresponding industry groups for securities (percent of net assets):
(1)Sovereign Government Obligations--64.92%
(2)Financial Services--30.60%
(3)Sovereign//Regional Government Obligations-Agency--5.67%
++++Forward Foreign Exchange Contracts as of April 30, 1995 are as follows:
<CAPTION>
Unrealized
Appreciation
Expiration (Depreciation)
Date (Note 1d)
Foreign Currency Purchased
<S> <C> <S> <C>
A$ 68,260,076 May 1995 $ (599,865)
DM 386,280,619 May 1995 1,839,663
DM 3,700,000 June 1995 43,917
Pound Sterling 14,685,874 May 1995 (55,613)
Lit 1,130,062,500 May 1995 13,787
YEN 8,377,565,833 May 1995 (1,287,622)
Total (US$ Commitment--$455,862,545) $ (45,733)
-----------
Foreign Currency Sold
A$ 108,399,189 May 1995 $ 1,603,990
C$ 145,521,104 May 1995 (3,136,936)
DM 324,609,162 May 1995 (1,525,501)
DM 74,968,305 June 1995 287,947
DM 31,498,941 July 1995 26,170
ECU 7,521,898 June 1995 36,256
Frf 65,848,928 June 1995 12,878
Iep 13,660,964 June 1995 (295,077)
Pound Sterling 15,324,445 May 1995 5,478
Lit 24,165,507,328 May 1995 (355,003)
Lit 4,581,895,000 June 1995 (85,615)
NZ$ 76,245,648 May 1995 (372,994)
Pta 4,699,086,678 May 1995 (322,283)
YEN 11,768,214,550 May 1995 (3,452,286)
<PAGE>
Total (US$ Commitment-$807,167,653) $(7,572,976)
-----------
Total Unrealized Depreciation--Net, on
Forward Foreign Exchange Contracts $(7,618,709)
===========
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENT OF ASSETS AND LIABILITIES
<CAPTION>
As of April 30, 1995
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$543,942,385) (Note 1a) $ 555,381,140
Foreign demand deposits (Note 1c) 4,198
Receivables:
Interest $ 6,982,017
Forward foreign exchange contracts (Note 1d) 2,152,345
Securities sold 1,068,237
Capital shares sold 47,486 10,250,085
--------------
Deferred organization expenses (Note 1h) 13,344
Prepaid registration fees and other assets (Note 1h) 159,771
--------------
Total assets 565,808,538
--------------
Liabilities: Options written, at value (premiums received--$38,998) (Notes 1a & 1d) 16,058
Unrealized depreciation on forward foreign exchange contracts (Note 1d) 7,618,709
Payables:
Capital shares redeemed 5,447,113
Securities purchased 1,500,418
Dividends to shareholders (Note 1i) 932,735
Forward foreign exchange contracts (Note 1d) 479,521
Distributor (Note 2) 311,266
Investment adviser (Note 2) 237,844
Options purchased 67,645 8,976,542
--------------
Accrued expenses and other liabilities 341,036
--------------
Total liabilities 16,952,345
--------------
<PAGE>
Net Assets: Net assets $ 548,856,193
==============
Net Assets Class A Shares of Common Stock, $0.10 par value, 1,000,000,000 shares
Consist of: authorized $ 479
Class B Shares of Common Stock, $0.10 par value, 1,000,000,000 shares
authorized 6,541,923
Class C Shares of Common Stock, $0.10 par value, 300,000,000 shares
authorized 124
Class D Shares of Common Stock, $0.10 par value, 300,000,000 shares
authorized 425,324
Paid-in capital in excess of par 605,004,184
Accumulated realized capital losses on investments and foreign currency
transactions--net (Note 6) (67,105,398)
Unrealized appreciation on investments and foreign currency
transactions--net 3,989,557
--------------
Net assets $ 548,856,193
==============
Net Asset Class A--Based on net assets of $37,768 and 4,789 shares outstanding $ 7.89
Value: ==============
Class B--Based on net assets of $515,296,010 and 65,419,227 shares
outstanding $ 7.88
==============
Class C--Based on net assets of $9,625 and 1,240 shares outstanding $ 7.76
==============
Class D--Based on net assets of $33,512,790 and 4,253,234 shares
outstanding $ 7.88
==============
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF OPERATIONS
<CAPTION>
For the Six Months Ended April 30, 1995
<S> <S> <C> <C>
Investment Interest and discount earned (net of $194,473 foreign withholding tax) $ 25,132,004
Income
(Notes 1f & 1g):
Expenses: Distribution fees--Class B (Note 2) 2,307,769
Investment advisory fees (Note 2) 1,802,512
Transfer agent fees--Class B (Note 2) 808,710
Custodian fees 151,874
Printing and shareholder reports 127,269
Accounting services (Note 2) 121,471
Professional fees 65,473
Account maintenance fees--Class D (Note 2) 49,995
Registration fees (Note 1h) 49,635
Transfer agent fees--Class D (Note 2) 45,897
Directors' fees and expenses 22,484
Amortization of organization expenses (Note 1h) 7,636
Distribution fees--Class C (Note 2) 94
Transfer agent fees--Class A (Note 2) 43
Transfer agent fees--Class C (Note 2) 33
Other 13,575
--------------
Total expenses 5,574,470
--------------
Investment income--net 19,557,534
--------------
Realized & Realized loss from:
Unrealized Investments--net $ (2,766,235)
Gain (Loss) on Foreign currency transactions--net (18,251,290) (21,017,525)
Investments & --------------
Foreign Currency Change in unrealized appreciation/depreciation on:
Transactions--Net Investments--net 3,556,897
(Notes 1c, 1d, 1g Foreign currency transactions--net (2,462,034) 1,094,863
& 3): -------------- --------------
Net Decrease in Net Assets Resulting from Operations $ (365,128)
==============
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
For the Six For the
Months Ended Year Ended
April 30, October 31,
Increase (Decrease) in Net Assets: 1995 1994
<S> <S> <C> <C>
Operations: Investment income--net $ 19,557,534 $ 72,659,344
Realized loss on investments and foreign currency transactions--net (21,017,525) (92,924,618)
Change in unrealized appreciation/depreciation on investments and
foreign currency transactions--net 1,094,863 10,030,665
-------------- --------------
Net decrease in net assets resulting from operations (365,128) (10,234,609)
-------------- --------------
Dividends to Investment income--net:
Shareholders Class A (1,238) --
(Note 1i): Class B (18,262,069) --
Class C (703) --
Class D (1,293,524) --
Return of capital--net:
Class A -- (58)
Class B -- (68,086,994)
Class C -- (1)
Class D -- (4,572,291)
-------------- --------------
Net decrease in net assets resulting from dividends to shareholders (19,557,534) (72,659,344)
-------------- --------------
Capital Share Net decrease in net assets derived from capital share transactions (230,910,206) (881,055,998)
Transactions -------------- --------------
(Note 4):
Net Assets: Total decrease in net assets (250,832,868) (963,949,951)
Beginning of period 799,689,061 1,763,639,012
-------------- --------------
End of period $ 548,856,193 $ 799,689,061
============== ==============
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
<CAPTION>
Class A
For the For the
The following per share data and ratios have been derived Six Months Period
from information provided in the financial statements. Ended Oct. 21, 1994++
April 30, to Oct. 31,
Increase (Decrease) in Net Asset Value: 1995++++ 1994++++
<S> <S> <C> <C>
Per Share Net asset value, beginning of period $ 8.11 $ 8.11
Operating -------------- --------------
Performance: Investment income--net .23 .01
Realized and unrealized loss on investments and foreign
currency transactions--net (.22) --
-------------- --------------
Total from investment operations .04 .01
-------------- --------------
Less dividends and distributions:
Investment income--net (.23) --
Return of capital--net -- (.01)
-------------- --------------
Total dividends and distributions (.23) (.01)
-------------- --------------
Net asset value, end of period $ 7.89 $ 8.11
============== ==============
Total Investment Based on net asset value per share 0.55%+++ 0.12%+++
Return:** ============== ==============
Ratios to Average Expenses .96%* .97%*
Net Assets: ============== ==============
Investment income--net 6.69%* 6.28%*
============== ==============
Supplemental Net assets, end of period (in thousands) $ 38 $ 59
Data: ============== ==============
Portfolio turnover 177.75% 259.50%
============== ==============
<FN>
*Annualized.
**Total investment returns exclude the effects of sales loads.
++Commencement of Operations.
++++Based on average shares outstanding during the period.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS (concluded)
<CAPTION>
Class B
The following per share data and ratios For the Six For the For the
have been derived from information Months Period Period
provided in the financial statements. Ended Dec. 28, 1990 Aug. 3, 1990++
April 30, For the Year Ended October 31, to Oct. 31, to Dec. 27,
Increase (Decrease) in Net Asset Value: 1995++++ 1994++++ 1993 1992 1991 1990
<S> <S> <C> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 8.10 $ 8.65 $ 8.85 $ 9.84 $ 9.92 $ 10.00
Operating -------- --------- ---------- ---------- ---------- ----------
Performance: Investment income--net .24 .50 .57 .72 .77 .39
Realized and unrealized loss on
investments and foreign currency
transactions--net (.22) (.58) (.20) (.99) (.08) (.08)
-------- --------- ---------- ---------- ---------- ----------
Total from investment operations .01 (.08) .37 (.27) .69 .31
-------- --------- ---------- ---------- ---------- ----------
Less dividends and distributions:
Investment income--net (.24) -- -- -- (.77) (.39)
Return of capital--net -- (.47) (.57) (.72) -- --
-------- --------- ---------- ---------- ---------- ----------
Total dividends and distributions (.24) (.47) (.57) (.72) (.77) (.39)
-------- --------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 7.88 $ 8.10 $ 8.65 $ 8.85 $ 9.84 $ 9.92
======== ========= ========== ========== ========== ==========
Total Investment Based on net asset value per share 0.21%+++ (1.02%) 4.63% (3.00%) 6.93%+++ 3.40%+++
Return:** ======== ========= ========== ========== ========== ==========
Ratios to Average Expenses, excluding account maintenance
Net Assets: and distribution fees .98%* .77% .79% .75% .77%* .76%*
======== ========= ========== ========== ========== ==========
Expenses 1.73%* 1.52% 1.60% 1.50% 1.52%* 1.51%*
======== ========= ========== ========== ========== ==========
Investment income--net 5.93%* 5.68% 7.26% 7.60% 9.11%* 9.75%*
======== ========= ========== ========== ========== ==========
Supplemental Net assets, end of period (in thousands) $515,296 $ 750,750 $1,664,602 $3,182,520 $5,918,769 $2,796,301
Data: ======== ========= ========== ========== ========== ==========
Portfolio turnover 177.75% 259.50% 284.62% 120.77% 153.72% 19.40%
======== ========= ========== ========== ========== ==========
<PAGE>
<CAPTION> Class C
For the For the
The following per share data and ratios have been derived Six Months Period
from information provided in the financial statements. Ended Oct. 21, 1994++
April 30, to Oct. 31,
Increase (Decrease) in Net Asset Value: 1994++++ 1994++++
<S> <S> <C> <C>
Per Share Net asset value, beginning of period $ 8.10 $ 8.11
Operating -------------- --------------
Performance: Investment income--net .14 .01
Realized and unrealized loss on investments and foreign
currency transactions--net (.34) (.01)
-------------- --------------
Total from investment operations (.20) --
-------------- --------------
Less dividends and distributions:
Investment income--net (.14) --
Return of capital--net -- (.01)
-------------- --------------
Total dividends and distributions (.14) (.01)
-------------- --------------
Net asset value, end of period $ 7.76 $ 8.10
============== ==============
Total Investment Based on net asset value per share (1.66%)+++ 0.00%+++
Return:** ============== ==============
Ratios to Average Expenses, excluding account maintenance and distribution fees 100%* 1.34%*
Net Assets: ============== ==============
Expenses 1.80%* 2.14%*
============== ==============
Investment income--net 5.98%* 5.63%*
============== ==============
Supplemental Net assets, end of period (in thousands) $ 10 $ 1
Data: ============== ==============
Portfolio turnover 177.75% 259.50%
============== ==============
<PAGE>
<CAPTION>
Class D
The following per share data and ratios For the Six For the For the
have been derived from information Months Period Period
provided in the financial statements. Ended Dec. 28, 1990 Aug. 3, 1990++
April 30, For the Year Ended October 31, to Oct. 31, to Dec. 27,
Increase (Decrease) in Net Asset Value: 1995++++ 1994++++ 1993 1992 1991 1990
<S> <S> <C> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 8.11 $ 8.66 $ 8.85 $ 9.85 $ 9.92 $ 10.00
Operating -------- -------- ---------- ---------- ---------- ---------
Performance: Investment income--net .26 .54 .61 .77 .82 .42
Realized and unrealized loss on
investments and foreign currency
transactions--net (.23) (.58) (.19) (1.00) (.07) (.08)
-------- -------- ---------- ---------- ---------- ---------
Total from investment operations .03 (.04) .42 (.23) .75 .34
-------- -------- ---------- ---------- ---------- ---------
Less dividends and distributions:
Investment income--net (.26) -- -- -- (.82) (.42)
Return of capital--net -- (.51) (.61) (.77) -- --
-------- -------- ---------- ---------- ---------- ---------
Total dividends and distributions (.26) (.51) (.61) (.77) (.82) (.42)
-------- -------- ---------- ---------- ---------- ---------
Net asset value, end of period $ 7.88 $ 8.11 $ 8.66 $ 8.85 $ 9.85 $ 9.92
======== ======== ========== ========== ========== =========
Total Investment Based on net asset value per share 0.35%+++ (0.51%) 5.28% (2.60%) 7.53%+++ 3.73%+++
Return:** ======== ======== ========== ========== ========== =========
Ratios to Average Expenses, excluding account maintenance
Net Assets: fees .95%* .76% .73% .75% .76%* .75%*
======== ======== ========== ========== ========== =========
Expenses 1.20%* 1.01% .98% 1.00% .96%* .75%*
======== ======== ========== ========== ========== =========
Investment income--net 6.47%* 6.19% 7.24% 8.11% 9.70%* 10.51%*
======== ======== ========== ========== ========== =========
Supplemental Net assets, end of period (in thousands) $ 33,513 $ 48,879 $ 99,037 $ 188,623 $ 399,416 $ 211,006
Data: ======== ======== ========== ========== ========== =========
Portfolio turnover 177.75% 259.50% 284.62% 120.77% 153.72% 19.40%
======== ======== ========== ========== ========== =========
<FN>
*Annualized.
**Total investment returns exclude the effects of sales loads.
++Commencement of Operations.
++++Based on average shares outstanding during the period.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
Merrill Lynch Short-Term Global Income Fund, Inc. (the "Fund") is
registered under the Investment Company Act of 1940 as a non-
diversified, open-end management investment company. These
unaudited financial statements reflect all adjustments which are,
in the opinion of management, necessary to a fair statement of
the results for the interim period presented. All such adjustments
are of a normal recurring nature. The Fund offers four classes of
shares under the Merrill Lynch Select Pricing SM System. Shares of
Class A and Class D are sold with a front-end sales charge. Shares of
Class B and Class C may be subject to a contingent deferred sales
charge. All classes of shares have identical voting, dividend, liquida-
tion and other rights and the same terms and conditions, except
that Class B, Class C and Class D Shares bear certain expenses
related to the account maintenance of such shares, and Class B and
Class C Shares also bear certain expenses related to the distribution
of such shares. Each class has exclusive voting rights with respect
to matters relating to its account maintenance and distribution
expenditures. The following is a summary of significant accounting
policies followed by the Fund.
(a) Valuation of securities--Securities traded in the over-the-counter
market are valued at the last available bid price or yield equivalents
obtained from one of more dealers in the over-the-counter market
prior to the time of valuation. Portfolio securities which are traded
on stock exchanges are valued at the last sale price on the principal
market on which such securities are traded, as of the close of
business on the day the securities are being valued or, lacking any
sales, at the last available bid price. Options written are valued at
the last sale price in the case of exchange-traded options or, in the
case of options traded in the over-the-counter market, the last asked
price. Options purchased are valued at the last sale price in the case
of exchange-traded options or, in the case of options traded in the
over-the-counter market, the last bid price. Other investments,
including futures contracts and related options, are stated at market
value or otherwise at the fair value at which it is expected they
may be resold, as determined in good faith by or under the direction
of the Board of Directors. Securities and assets for which market
quotations are not readily available are valued at fair value as
determined in good faith by or under the direction of the Fund's
Board of Directors.
<PAGE>
(b) Repurchase agreements--The Fund invests in US Government
securities pursuant to repurchase agreements with a member bank
of the Federal Reserve System or a primary dealer in US Government
securities. Under such agreements, the bank or primary dealer
agrees to repurchase the security at a mutually agreed upon time
and price. The Fund takes possession of the underlying securities,
marks to market such securities and, if necessary, receives additions
to such securities daily to ensure that the contract is fully
collateralized.
(c) Foreign currency transactions--Transactions denominated in
foreign currencies are recorded at the exchange rate prevailing
when recognized. Assets and liabilities denominated in foreign
currencies are valued at the exchange rate at the end of the period.
Foreign currency transactions are the result of settling (realized)
or valuing (unrealized) receivables or payables expressed in foreign
currencies into US dollars. Realized and unrealized gains or losses
from investments include the effects of foreign exchange rates on
investments.
(d) Derivative financial instruments--The Fund may engage in vari-
ous portfolio strategies to seek to increase its return by hedging
its portfolio against adverse movements in the equity, debt, and cur-
rency markets. Losses may arise due to changes in the value of the
contract or if the counterparty does not perform under the contract.
* Forward foreign exchange contracts--The Fund is authorized to
enter into forward foreign exchange contracts as a hedge against
either specific transactions or portfolio positions. Such contracts
are not entered on the Fund's records. However, the effect on net
operations is recorded from the date the Fund enters into such
contracts. Premium or discount is amortized over the life of the
contracts.
* Foreign currency options and futures--The Fund may also pur-
chase or sell listed or over-the-counter foreign currency options,
foreign currency futures and related options on foreign currency
futures as a short or long hedge against possible variations in
foreign exchange rates. Such transactions may be effected with
respect to hedges on non-US dollar denominated securities owned
by the Fund, sold by the Fund but not yet delivered, or committed
or anticipated to be purchased by the Fund.
* Options--The Fund is authorized to purchase and write call
options and put options. When the Fund writes an option, an amount
equal to the premium received by the Fund is reflected as an asset
and an equivalent liability. The amount of the liability is sub-
sequently marked to market to reflect the current market value of
the option written.
<PAGE>
When a security is purchased or sold through an exercise of an
option, the related premium paid (or received) is added to (or
deducted from) the proceeds of the security sold. When an option
expires (or the Fund enters into a closing transaction), the Fund
realizes a gain or loss on the option to the extent of the premiums
paid or received (or loss or gain to the extent the cost of the closing
transaction is less than or greater than the premium paid or
received).
Written and purchased options are non-income producing
investments.
(e) Financial futures contracts--The Fund may purchase or
sell financial futures contracts and options on such futures con-
tracts as a hedge against adverse changes in the interest rate. A
futures contract is an agreement between two parties to buy and
sell a security, respectively, for a set price on a future date.
Upon entering into a contract, the Fund deposits and maintains as
collateral such initial margin as required by the exchange on which
the transaction is effected. Pursuant to the contract, the Fund agrees
to receive from or pay to the broker an amount of cash equal to the
daily fluctuation in value of the contract. Such receipts or payment
are known as variation margin and are recorded by the Fund as
unrealized gains or losses. When the contract is closed, the Fund
records a realized gain or loss equal to the difference between the
value of the contract at the time it was opened and the value at
the time it was closed.
(f) Income taxes--It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute all of its taxable income to
its shareholders. Therefore, no Federal income tax provision is
required. Under the applicable foreign tax law, a withholding tax
may be imposed on interest and capital gains at various rates.
(g) Security transactions and investment income--Security trans-
actions are recorded on the dates the transactions are entered into
(the trade dates). Interest income (including amortization of dis-
count) is recognized on the accrual basis. Realized gains and losses
on security transactions are determined on the identified cost basis.
(h) Deferred organization expenses and prepaid registration fees--
Deferred organization expenses are charged to expense over a five-
year period. Prepaid registration fees are charged to expense as
the related shares are issued.
(i) Dividends and distributions--Dividends from net investment
income, excluding transaction gains/losses, are declared daily and
paid monthly. Distributions of capital gains are recorded on the
ex-dividend dates.
<PAGE>
2. Investment Advisory Agreement and Transactions
with Affiliates:
The Fund has entered into an Investment Advisory Agreement with
Merrill Lynch Asset Management, L.P. ("MLAM"). The general
partner of MLAM is Princeton Services, Inc. ("PSI"), an indirect
wholly-owned subsidiary of Merrill Lynch & Co., Inc. ("ML & Co."),
which is the limited partner. The Fund has also entered into a
Distribution Agreement and Distribution Plans with Merrill Lynch
Funds Distributor, Inc. ("MLFD" or "Distributor"), a wholly-
owned subsidiary of Merrill Lynch Group, Inc.
MLAM is responsible for the management of the Fund's portfolio
and provides the necessary personnel, facilities, equipment and
certain other services necessary to the operations of the Fund. For
such services, the Fund pays a monthly fee based upon the average
daily value of the Fund's net assets, at the following annual rates:
0.55% of the Fund's average daily net assets not exceeding $2
billion; 0.525% of average daily net assets in excess of $2 billion
but not exceeding $4 billion; 0.50% of average daily net assets in excess
of $4 billion but not exceeding $6 billion; 0.475% of average daily net
assets in excess of $6 billion but not exceeding $10 billion; 0.45%
of average daily net assets in excess of $10 billion but not exceeding
$15 billion; and 0.425% of average daily net assets in excess of $15 billion.
MLAM has entered into a Sub-Advisory Agreement (the "Agreement") with
Merrill Lynch Asset Management U.K., Ltd. ("MLAM U.K."), an affiliate
of MLAM, pursuant to which MLAM pays MLAM U.K. a fee for providing
investment advisory services to the Investment Adviser with respect
to the Fund in an amount to be determined from time to time by the
Investment Adviser and MLAM U.K. but in no event in excess of the
amount that the Investment Adviser actually receives for providing
services to the Fund. For the six months ended April 30, 1995,
MLAM paid MLAM U.K. a fee of $181,626 pursuant to such Agreement.
The most restrictive annual expense limitation requires that the
Investment Adviser reimburse the Fund to the the extent the Fund's
expenses (excluding interest, taxes, distribution fees, brokerage
fees and commissions, and extraordinary items) exceed 2.5% of the
Fund's first $30 million of average daily net assets, 2.0% of the
next $70 million of average daily net assets, and 1.5% of the average
daily net assets in excess thereof. The Investment Adviser's
obligation to reimburse the Fund is limited to the amount of the
investment advisory fee. No fee payment will be made to the Investment
Adviser during any fiscal year which will cause such expenses to
exceed expense limitations at the time of such payment.
Pursuant to the distribution plans ("the Distribution Plans")
adopted by the Fund in accordance with Rule 12b-1 under the
Investment Company Act of 1940, the Fund pays the Distributor
ongoing account maintenance and distribution fees. The fees are
accrued daily and paid monthly at annual rates based upon the
average daily net assets of the shares as follows:
<PAGE>
Account Distribution
Maintenance Fee Fee
Class B 0.25% 0.50%
Class C 0.25% 0.55%
Class D 0.25% --
NOTES TO FINANCIAL STATEMENTS (concluded)
Pursuant to a sub-agreement with the Distributor, Merrill Lynch,
Pierce, Fenner & Smith Inc. ("MLPF&S"), a subsidiary of ML & Co.,
also provides account maintenance and distribution services to the
Fund. The ongoing account maintenance fee compensates the
Distributor and MLPF&S for providing account maintenance services
to Class B, Class C and Class D shareholders. The ongoing distribu-
tion fee compensates the Distributor and MLPF&S for providing
shareholder and distribution-related services to Class B and
Class C shareholders.
For the six months ended April 30, 1995, MLFD earned under-
writing discounts, and MLPF&S earned dealer concessions on sales
of the Fund's Class D Shares as follows:
MLFD MLPF&S
Class D $51 $442
For the six months ended April 30, 1995, MLPF&S received contin-
gent deferred sales charges of $358,535 relating to transactions in
Class B Shares.
Merrill Lynch Financial Data Services, Inc. ("MLFDS"), a wholly-owned
subsidiary of ML & Co., is the Fund's transfer agent.
Accounting services are provided to the Fund by MLAM at cost.
Certain officers and/or directors of the Fund are officers and/or
directors of MLAM, PSI, MLPF&S, MLFDS, MLFD and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the six months ended April 30, 1995 were $936,892,335 and
$1,258,788,875, respectively.
Net realized and unrealized gains (losses) as of April 30, 1995 were
as follows:
<PAGE>
Realized Unrealized
Gains Gains
(Losses) (Losses)
Investments:
Long-term $ (2,605,222) $ 8,627,861
Short-term (240,997) 2,810,894
Options written 79,984 --
-------------- -------------
Total investments (2,766,235) 11,438,755
Currency transactions:
Options written 4,006,261 22,940
Options purchased (1,547,937) --
Forward foreign exchange contracts (5,518,358) (7,618,709)
Foreign currency transactions (15,191,256) 146,571
-------------- -------------
Total currency transactions (18,251,290) (7,449,198)
-------------- -------------
Total $ (21,017,525) $ 3,989,557
============== =============
Transactions in call options written for the six months ended
April 30, 1995 were as follows:
Premiums
Par Value Received
Outstanding call options written at
beginning of period -- --
Options written $ 2,483,511,837 $ 2,549,216
Options exercised (414,205,000) (348,117)
Options expired (2,069,306,837) (2,201,099)
--------------- -------------
Outstanding call options at
end of period $ -- $ --
=============== =============
Transactions in put options written for the six months ended
April 30, 1995 were as follows:
Premiums
Par Value Received
Outstanding call options written at
beginning of period $ 45,500,000 $ 37,510
Options written 3,307,326,991 4,879,310
Options exercised (489,740,000) (491,974)
Options expired (2,840,146,991) (4,385,848)
-------------- -------------
Outstanding put options written
at end of period $ 22,940,000 $ 38,998
============== =============
<PAGE>
As of April 30, 1995, net unrealized appreciation for Federal income
tax purposes aggregated $11,438,755, of which $13,093,844 related
to appreciated securities and $1,655,089 related to depreciated
securities. At April 30, 1995, the aggregate cost of investments,
less premiums received for options written, for Federal income tax
purposes was $543,942,385.
4. Capital Share Transactions:
Net decrease in net assets from capital share transactions
was $230,910,206 and $881,055,998 for the six months ended April 30,
1995 and the year ended October 31, 1994, respectively.
Transactions in capital shares for each class were as follows:
Class A Shares for the Six Months Dollar
Ended April 30, 1995 Shares Amount
Shares sold 13,704 $ 109,231
Shares issued to shareholders in
reinvestment of dividends 115 910
-------------- -------------
Total issued 13,819 110,141
Shares redeemed (16,275) (129,629)
-------------- -------------
Net decrease (2,456) $ (19,488)
============== =============
Class A Shares for the Period Dollar
October 21, 1994++ to October 31, 1994 Shares Amount
Shares sold 14,261 $ 115,671
Shares redeemed (7,015) (56,902)
-------------- -------------
Net increase 7,246 $ 58,769
============== =============
[FN]
++Commencement of Operations.
Class B Shares for the Six Months Dollar
Ended April 30, 1995 Shares Amount
Shares sold 776,885 $ 6,217,085
Shares issued to shareholders in
reinvestment of dividends 1,218,952 9,654,152
-------------- -------------
Total issued 1,995,837 15,871,237
Automatic conversion of shares (13,197) (106,142)
Shares redeemed (29,212,520) (232,509,428)
-------------- -------------
Net decrease (27,229,880) $(216,744,333)
============== =============
<PAGE>
Class B Shares for the Year Ended Dollar
October 31, 1994 Shares Amount
Shares sold 3,848,634 $ 32,411,047
Shares issued to shareholders in
reinvestment of dividends and
distributions 4,300,343 36,195,588
-------------- -------------
Total issued 8,148,977 68,606,635
Shares redeemed (107,865,898) (904,426,466)
-------------- -------------
Net decrease (99,716,921) $(835,819,831)
============== =============
Class C Shares for the Six Months Dollar
Ended April 30, 1995 Shares Amount
Shares sold 50,648 $ 398,772
Shares issued to shareholders in
reinvestment of dividends 3 22
-------------- -------------
Total issued 50,651 398,794
Shares redeemed (49,521) (389,980)
-------------- -------------
Net increase 1,130 $ 8,814
============= =============
Class C Shares for the Period
October 21, 1994++ to Dollar
October 31, 1994 Shares Amount
Shares sold 111 $ 900
Shares redeemed (1) (8)
-------------- -------------
Net increase 110 $ 892
============= =============
[FN]
++Commencement of Operations.
Class D Shares for the Six Months Dollar
Ended April 30, 1995 Shares Amount
Shares sold 56,569 $ 348,743
Shares issued to shareholders in
reinvestment of dividends 75,933 703,916
Automatic conversion of shares 13,194 106,142
-------------- -------------
Total issued 145,696 1,158,801
Shares redeemed (1,922,899) (15,314,000)
-------------- -------------
Net decrease (1,777,203) $ (14,155,199)
============= =============
<PAGE>
Class D Shares for the Year Ended Dollar
October 31, 1994 Shares Amount
Shares sold 377,878 $ 3,322,360
Shares issued to shareholders in
reinvestment of dividends and
distributions 303,155 2,425,102
-------------- -------------
Total issued 681,033 5,747,462
Shares redeemed (6,093,190) (51,043,291)
-------------- -------------
Net decrease (5,412,157) $ (45,295,829)
============== =============
5. Commitments:
At April 30, 1995, the Fund had entered into foreign exchange
contracts under which it had agreed to purchase various foreign
currency with an approximate value of $1,496,000.
6. Capital Loss Carryforward:
At October 31, 1994, the Fund had a capital loss carryforward of
approximately $43,048,000, of which $32,232,000 expires in 2000
and $10,816,000 expires in 2002. This amount will be available to
offset like amounts of any future taxable gains.
