MERRILL LYNCH
GLOBAL UTILITY
FUND, INC.
FUND LOGO
Annual Report
November 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.
Statements and other information herein are as dated and are subject
to change.
<PAGE>
Merrill Lynch
Global Utility Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
MERRILL LYNCH GLOBAL UTILITY FUND, INC.
Officers and
Directors
Arthur Zeikel, President and Director
Ronald W. Forbes, Director
Cynthia A. Montgomery, Director
Charles C. Reilly, Director
Kevin A. Ryan, Director
Richard R. West, Director
Terry K. Glenn, Executive Vice President
Norman R. Harvey, Senior Vice President
Donald C. Burke, Vice President
Walter D. Rogers, Vice President and Portfolio Manager
Gerald M. Richard, Treasurer
Patrick D. Sweeney, Secretary
<PAGE>
Custodian
The Chase Manhattan Bank, N. A.
4 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
DEAR SHAREHOLDER
The pace of US economic activity apparently changed once again
during the quarter ended November 30, 1995. During the summer
months, there was strong evidence of a slowing economy, a trend that
was reversed during the third calendar quarter of 1995, when gross
domestic product growth rebounded to a 4.2% pace. However, recent
economic releases suggest that this rate of expansion has not been
sustained.
A number of key measures of economic growth indicate that the
economy is losing momentum. Retail sales for November were soft,
reflecting continued caution on the part of debt-burdened consumers.
Home sales and housing starts both declined in October, despite
lower mortgage rates. At the same time, there has been an increase
in initial unemployment claims, along with weak job and income
growth. In response to this slowing in the economy, inflationary
pressures continue to be subdued. As a result of these trends, long-
term interest rates have fallen, bond prices have risen, and the US
stock market reached a new all-time high.
<PAGE>
The strong stock and bond market rallies suggest that investors are
not only anticipating that a lackluster economy will lead the
Federal Reserve Board to resume its easing of monetary policy, but
also that the Clinton Administration and Congress will reach an
agreement in their current Federal budget deliberations. While the
probable direction of economic activity will continue to be the
primary focus of investors in the weeks ahead, a credible plan for
reducing the Federal budget deficit will also be an important factor
in the investment outlook.
<PAGE>
Portfolio Matters
For the quarter ended November 30, 1995, Merrill Lynch Global
Utility Fund, Inc.'s Class A, Class B, Class C and Class D Shares
had total returns of +4.19%, +3.92%, +3.92% and +4.10%,
respectively. Fund performance was enhanced by the portfolio's
overweighting in US-based utility stocks. World utilities'
performance, as measured by the unmanaged Financial Times/Standard &
Poor's--Actuaries World Utility Index, shows that for the three-
month period ended November 30, 1995, utility stocks worldwide
gained 5.16% as compared to a 0.20% decline for utility stocks
outside of the United States and an increase of 10.79% for US
utility stocks.
Several factors contributed to the strong performance of the
domestic US utility sector. First, declining long-term interest
rates enhanced the attractiveness of the dividend yields available
from the domestic utility sector, in particular electric utility
issues. Second, an acceleration in the estimates for the earnings
growth rates of the telephone stocks, together with AT&T Corp.'s
restructuring announcement, resulted in higher values for the
domestic telephone group. Third, the onset of colder weather, along
with the realization that gas inventory levels were below normal,
resulted in investors taking greater interest in gas utility stocks
late in the quarter.
In the Fund's US holdings, we made two new purchases, added to one
existing holding, eliminated two holdings and reduced weightings in
six other companies during the November quarter. We purchased AT&T
Corp. when we believed the stock became undervalued relative to the
seven "Baby Bells." AT&T's fundamental outlook improved when the
company announced its plans to increase cost-cutting and re-evaluate
its poor-performing computer division. We invested in Pacific Gas &
Electric Co. as the stock came under pressure related to upcoming
regulatory developments. While the California regulatory environment
is always difficult to predict, we have found that most investors
tend to overreact to negative regulatory news as we have discussed
in past shareholder reports. In the heavily regulated utility group,
favorable buying opportunities are often found during periods of
increased regulatory uncertainty.
We reduced our positions in six domestic utility stocks, including
Duke Power Co., BellSouth Corp., Houston Industries, Inc. and
Ameritech Corp., as a result of price appreciation. We reduced our
holding in PECO Energy Co. since we believed that the company will
continue to seek out a merger candidate following rejection of its
proposal to acquire Pennsylvania Power & Light. While we have
confidence that the management team at PECO will not put shareholder
money at risk in its quest for an acquisition, we do believe that
this uncertainty will overhang the price performance of the stock
over the near term. We reduced our position in NICOR Inc., an
Illinois-based gas distribution company, as a result of a large
capital spending program which we expect to hurt earnings growth in
the near term. The two positions eliminated during the quarter were
the Texas-based electric utility company, Central & SouthWest Corp.,
and US West Media Group, Inc. whose shares were issued to holders of
US West Communications Inc. We no longer found the fundamental
outlook for either company to be favorable.
<PAGE>
In the international portion of the portfolio, which accounts for
approximately 47% of the Fund's net assets, we reduced our weighting
in Canada, eliminated our holding in Brazil, purchased two new
securities, and modestly reduced our holdings in four other
securities. The two new additions to the Fund's portfolio
during the November quarter were London Electricity PLC and PT
Telekomunikasi Indonesia. London Electricity's core businesses are
the distribution and supply of electricity to commercial, domestic
and industrial customers primarily within the London area. PT
Telekom provides local and domestic long distance services through
2.76 million telephone lines in Indonesia. We purchased the stock on
the initial public offering, with the selling shareholder being the
Indonesian government. We also increased our investment in
Telefonica de Espana S.A. on a stock offering by the Spanish
government.
Concerns over the Canadian economy and political environment
resulted in the reduction of our two Canadian gas holdings,
Transcanada Pipeline Co. Ltd. and Westcoast Energy Inc., as well as
a Canadian telephone company, BC Telecom, Inc. The elimination of
the Brazilian electric utility company, Companhia Energetica de
Minas Gerais (CEMIG), resulted from the company's need for rate
relief and the sensitive political questions that surrounded its
likelihood. Since the time of our sale, CEMIG was granted a tariff
increase, but the company's stock price has dropped below our
selling price. Finally, we reduced our holdings in Tele Danmark A/S,
Compagnie Generale des Eaux, Telecom Italia S.p.A. and Telefonos de
Mexico, S.A. de C.V. to adjust portfolio weightings as a result of
price movements.
Fiscal Year in Review
The primary investment objective of Merrill Lynch Global Utility
Fund, Inc. is to seek both capital appreciation and current income
through investment of at least 65% of its total assets in equity and
debt securities issued by both domestic and foreign companies that
are primarily engaged in the utility industry. To benchmark its
performance, we use the Financial Times/Standard & Poor's--Actuaries
World Utility Index. For the 12-month period ended November 30,
1995, the best-performing region in the world was North America. The
World Index, excluding the performance of the US utility market,
rose only 4.19% compared to a gain of 17.24% when the US utility
market was included. Merrill Lynch Global Utility Fund, Inc.'s Class
A, Class B, Class C and Class D Shares' total returns of +16.34%,
+15.38%, +15.38% and +16.21%, respectively, for the year ended
November 30, 1995, underperformed the Financial Times/Standard &
Poor's--Actuaries World Utility Index. The primary reason for the
modest underperformance was the almost 7% of net assets invested in
three Latin American emerging markets that are currently not
included in the Index. The crisis in the Mexican equity market early
in the Fund's fiscal year continued to put pressure on other
emerging stock markets in the region. (Fund results shown do not
reflect sales charges and would be lower if sales charges were
included. For complete performance information, see pages 4--8 of
this report to shareholders.)
<PAGE>
During the Fund's fiscal year, we continued to seek new utility
investments that offer sound fundamentals and attractive valuations.
With domestic long-term interest rates declining throughout the
fiscal year, the United States was one of the most attractive
utility markets for investment in spite of continued momentum toward
greater competition in the sector.
In Conclusion
Forecasters are looking for interest rates to decline in most Group
of Seven countries and other countries in 1996. Furthermore, long-
term interest rates in the United States are also expected to
decline further over the near term, which would clearly help the
overall performance of the utility sector. In addition, as new
issues are brought to the market in this sector, new opportunities
may also develop. These above-noted developments, should they occur,
may also provide further improvement in performance of foreign
utilities in the coming fiscal year.
We thank you for your investment in Merrill Lynch Global Utility
Fund, Inc., and we look forward to discussing our investment
strategy and outlook with you in future shareholder reports.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Walter D. Rogers)
Walter D. Rogers
Vice President and Portfolio Manager
<PAGE>
January 2, 1996
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.
* 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 approximately 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 all of the Fund's shares are presented in the
"Total Return Based on a $10,000 Investment" graphs and the
"Performance Summary" and "Recent Performance Results" tables on
pages 5--8. Data for Class A and Class B Shares are presented in the
"Average Annual Total Return" table on pages 6 and 7. Data for Class
C and Class D Shares are also presented in the "Aggregate Total
Return" tables on page 7.
The "Recent Performance Results" table shows investment results
before the deduction of any sales charges for all of the Fund's
shares for the 12-month and 3-month periods ended November 30, 1995.
All data in this table assume imposition of the actual total
expenses incurred by each class of shares during the relevant
period.
<PAGE>
None of the past results shown should 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. Dividends paid to each class
of shares will vary because of the different levels of account
maintenance, distribution and transfer agency fees applicable to
each class, which are deducted from the income available to be paid
to shareholders.
<TABLE>
Recent
Performance
Results*
<CAPTION>
12 Month 3 Month
11/30/95 8/31/95 11/30/94 % Change % Change
<S> <C> <C> <C> <C> <C>
Class A Shares $13.52 $13.10 $12.08 +11.92% +3.21%
Class B Shares 13.47 13.06 12.04 +11.88 +3.14
Class C Shares 13.46 13.05 12.05 +11.70 +3.14
Class D Shares 13.55 13.13 12.09 +12.08 +3.20
Class A Shares--Total Return +16.34(1) +4.19(2)
Class B Shares--Total Return +15.38(3) +3.92(4)
Class C Shares--Total Return +15.38(5) +3.92(4)
Class D Shares--Total Return +16.21(6) +4.10(7)
<FN>
*Investment results shown do not reflect sales charges; results
shown would be lower if a sales charge was included.
(1)Percent change includes reinvestment of $0.491 per share ordinary
income dividends.
(2)Percent change includes reinvestment of $0.128 per share ordinary
income dividends.
(3)Percent change includes reinvestment of $0.391 per share ordinary
income dividends.
(4)Percent change includes reinvestment of $0.101 per share ordinary
income dividends.
(5)Percent change includes reinvestment of $0.409 per share ordinary
income dividends.
(6)Percent change includes reinvestment of $0.460 per share ordinary
income dividends.
(7)Percent change includes reinvestment of $0.117 per share ordinary
income dividends.
</TABLE>
<PAGE>
PERFORMANCE DATA (continued)
Total Return
Based on a
$10,000
Investment
A line graph depicting the growth of an investment in the Fund's
Class A Shares and Class B Shares compared to growth of an
investment in the Fianncial Times/Standard & Poor's--Actuaries World
Index and Financial times/Standard & Poor's--Actuaries World Utility
Index. Beginning and ending values are:
12/28/90** 11/95
ML Global Utiltiy Fund, Inc.++
- --Class A Shares* $ 9,600 $15,780
ML Global Utiltiy Fund, Inc.++
- --Class B Shares* $10,000 $15,820
Financial Times/Standard &
Poor's--Actuaries World Index++++ $10,000 $16,967
Financial Times/Standard &
Poor's--Actuaries World Utiltiy
Index++++++ $10,000 $16,967
A line graph depicting growth of an investment in the Fund's Class C
shares and Class D Shares compared to growth of an investment in the
Financial Times/Standard & Poor's--Actuaries World Index and
Financial Times/Standard & Poor's--Actuaries World Utility Index.
Beginning and ending values are:
10/21/94** 11/95
ML Global Utiltiy Fund, Inc.++
- --Class C Shares* $10,000 $11,257
ML Global Utiltiy Fund, Inc.++
- --Class D Shares* $ 9,600 $10,904
Financial Times/Standard &
Poor's--Actuaries World Index++++ $10,000 $11,195
<PAGE>
Financial Times/Standard &
Poor's--Actuaries World Utiltiy
Index++++++ $10,000 $11,247
[FN]
*Assuming maximum sales charge, transaction costs and other
operating expenses, including advisory fees.
**Commencement of Operations.
++ML Global Utility Fund, Inc. invests at least 65% of its total
assets in common stocks (including preferred debt securities
convertible into common stocks), preferred stocks and debt
securities issued by domestic and foreign companies in the utilities
industries.
++++This unmanaged market capitalization-weighted Index is comprised
of nearly 2,200 equities from 24 countries in 12 regions, including
the United States.
++++++This unmanaged market capitalization-weighted Index is
comprised of utility stocks from any of the 24 countries that make
up the Financial Times/Standard & Poor's Actuaries World Index.
Past performance is not predictive of future performance.
Average Annual
Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 9/30/95 +12.10% +7.61%
Inception (12/28/90)
through 9/30/95 +10.72 +9.77
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 9/30/95 +11.16% +7.16%
Inception (12/28/90)
through 9/30/95 + 9.86 +9.86
<PAGE>
[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
Total Return
% Return % Return
Without CDSC With CDSC**
Class C Shares*
Inception (10/21/94)
through 9/30/95 +11.41% +10.41%
[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 9/30/95 +12.18% +7.69%
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
<PAGE>
<TABLE>
Performance
Summary--
Class A Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<S> <C> <C> <C> <C> <C>
12/28/90--12/31/90 $10.00 $10.01 -- -- + 0.10%
1991 10.01 10.93 -- $0.508 +14.74
1992 10.93 11.40 $0.012 0.469 + 8.97
1993 11.40 13.67 0.027 0.424 +24.13
1994 13.67 11.83 -- 0.480 -10.00
1/1/95--11/30/95 11.83 13.52 -- 0.366 +17.56
------ ------
Total $0.039 Total $2.247
Cumulative total return as of 11/30/95: +64.38%**
<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 ex-dividend date, and do not
include sales charge; results would be lower if sales charge was
included.
</TABLE>
<TABLE>
Performance
Summary--
Class B Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<S> <C> <C> <C> <C> <C>
12/28/90--12/31/90 $10.00 $10.01 -- -- + 0.10%
1991 10.01 10.92 -- $0.435 +13.84
1992 10.92 11.38 $0.012 0.391 + 8.12
1993 11.38 13.63 0.027 0.337 +23.17
1994 13.63 11.81 -- 0.379 -10.62
1/1/95--11/30/95 11.81 13.47 -- 0.290 +16.64
------ ------
Total $0.039 Total $1.832
Cumulative total return as of 11/30/95: +58.20%**
<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 ex-dividend date, and do not
reflect deduction of any sales charge; results would be lower if
sales charge was deducted.
</TABLE>
<PAGE>
PERFORMANCE DATA (concluded)
<TABLE>
Performance
Summary--
Class C Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<S> <C> <C> <C> <C> <C>
10/21/94--12/31/94 $12.34 $11.81 -- $0.117 - 3.35%
1/1/95--11/30/95 11.81 13.46 -- 0.292 +16.58
------
Total $0.409
Cumulative total return as of 11/30/95: +12.67%**
<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 ex-dividend 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**
<S> <C> <C> <C> <C> <C>
10/21/94--12/31/94 $12.37 $11.84 -- $0.124 - 3.29%
1/1/95--11/30/95 11.84 13.55 -- 0.336 +17.44
------
Total $0.460
Cumulative total return as of 11/30/95: +13.58%**
<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 ex-dividend date, and do not
include sales charge; results would be lower if sales charge was
included.
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (in US dollars)
<CAPTION>
Shares Value Percent of
COUNTRY Industries Held Common Stocks Cost (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C>
Argentina Telecommunications 100,000 Telecom Argentina STET S.A.
(ADR) (c) $ 3,770,294 $ 4,375,000 1.0%
200,000 Telefonica de Argentina S.A.
(ADR) (c) 4,140,594 4,900,000 1.1
------------ ------------ ------
7,910,888 9,275,000 2.1
Utilities--Electric 6,600 ++Central Costanera S.A. (ADR) (c) 158,400 196,763 0.1
Total Common Stocks in Argentina 8,069,288 9,471,763 2.2
Australia Utilities--Gas 2,000,000 The Australian Gas & Light Co., Ltd. 5,280,752 7,017,428 1.6
Total Common Stocks in Australia 5,280,752 7,017,428 1.6
Austria Utilities--Gas 34,850 Energie--Versorgung Niederoesterreich
AG (EVN) 3,050,015 4,757,410 1.1
Total Common Stocks in Austria 3,050,015 4,757,410 1.1
Canada Telecommunications 140,000 BC Telecom, Inc. 2,593,297 2,462,065 0.6
Utilities--Electric 458,600 Nova Scotia Power Co. 4,322,473 4,095,849 1.0
Utilities--Gas 254,400 Transcanada Pipeline Co. Ltd.
(ADR) (c) 3,941,562 3,434,400 0.8
200,000 Westcoast Energy Inc. 3,470,767 2,950,000 0.7
------------ ------------ ------
7,412,329 6,384,400 1.5
Total Common Stocks in Canada 14,328,099 12,942,314 3.1
Chile Telecommunications 63,000 Compania de Telefonos de Chile
S.A. (ADR) (c) 4,489,995 4,543,875 1.1
<PAGE>
Utilities--Electric 65,000 Chilgener S.A. (ADR) (c) 1,495,000 1,527,500 0.4
156,000 ++Distribuidora Chilectra
Metropolitana S.A. (ADR) (c) 4,249,463 6,786,000 1.6
28,000 Enersis S.A. (ADR) (c) 544,224 717,500 0.2
------------ ------------ ------
6,288,687 9,031,000 2.2
Total Common Stocks in Chile 10,778,682 13,574,875 3.3
Denmark Telecommunications 281,000 Tele Danmark A/S (ADR) (c) 6,610,806 7,832,875 1.8
Total Common Stocks in Denmark 6,610,806 7,832,875 1.8
France Utilities--Water 87,988 Compagnie Generale des Eaux S.A. 9,481,908 8,573,516 2.0
40,000 Lyonnaise des Eaux S.A. 3,989,365 3,836,584 0.9
Total Common Stocks in France 13,471,273 12,410,100 2.9
Germany Utilities--Electric 200,000 VEBA AG 6,526,985 8,155,930 1.9
Total Common Stocks in Germany 6,526,985 8,155,930 1.9
Hong Kong Utilities--Electric 902,700 China Light & Power Co., Ltd. 6,285,801 4,248,330 1.0
1,552,000 Hong Kong Electric Holdings, Ltd. 3,897,526 5,207,178 1.2
------------ ------------ ------
10,183,327 9,455,508 2.2
Utilities--Gas 1,000,000 The Hong Kong & China Gas Co., Ltd. 1,627,410 1,635,550 0.4
218,900 The Hong Kong & China Gas Co., Ltd.
(Warrants) (a) 0 6,396 0.0
------------ ------------ ------
1,627,410 1,641,946 0.4
Total Common Stocks in Hong Kong 11,810,737 11,097,454 2.6
India Utilities--Electric 49,500 CESC Ltd. (Units) (b)(d) 2,640,330 594,000 0.1
Total Common Stocks in India 2,640,330 594,000 0.1
Indonesia Telecommunications 5,500 PT Indonesian Satellite Corp.
(Indosat) (ADR) (c) 176,275 188,375 0.0
29,600 PT Telekomunikasi Indonesia
(Persero) (b) 532,800 621,600 0.1
Total Common Stocks in Indonesia 709,075 809,975 0.1
<PAGE>
Italy Telecommunications 3,091,700 Societa Finanziara Telefonica S.p.A.
(STET) 5,780,442 6,078,262 1.4
5,000,000 Telecom Italia Mobile S.p.A. (b) 3,090,118 8,064,012 1.9
3,900,000 Telecom Italia S.p.A 3,619,691 5,302,557 1.2
------------ ------------ ------
12,490,251 19,444,831 4.5
Utilities--Gas 1,786,300 Societa Italiana il Gas (Italgas)
P.A. 5,169,953 4,578,252 1.1
Total Common Stocks in Italy 17,660,204 24,023,083 5.6
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Shares Value Percent of
COUNTRY Industries Held Common Stocks Cost (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C>
Korea Utilities--Electric 199,200 Korea Electric Power Corp. (KEPCO)
(ADR) (c) $ 4,008,900 $ 4,855,500 1.1%
Total Common Stocks in Korea 4,008,900 4,855,500 1.1
Malaysia Telecommunications 1,035,000 Telekom Malaysia BHD 7,499,205 7,712,005 1.8
Total Common Stocks in Malaysia 7,499,205 7,712,005 1.8
Mexico Telecommunications 105,000 Telefonos de Mexico, S.A. de C.V.
(ADR) (c) 5,594,445 3,465,000 0.8
Total Common Stocks in Mexico 5,594,445 3,465,000 0.8
New Telecommunications 100,000 Telecom Corporation of New Zealand
Zealand Ltd. (ADR) (c) 3,935,303 6,700,000 1.6
Total Common Stocks in New Zealand 3,935,303 6,700,000 1.6
Philippines Telecommunications 100,000 Philippine Long Distance Telephone
Co. (ADR) (c) 4,311,241 5,600,000 1.3
Utilities--Electric 57,000 Manila Electric Co. (MERALCO) 'B' 497,246 440,054 0.1
Total Common Stocks in the Philippines 4,808,487 6,040,054 1.4
<PAGE>
Portugal Telecommunications 30,900 Portugal Telecom, S.A. (ADR) (b) (c) 578,602 579,375 0.1
Total Common Stocks in Portugal 578,602 579,375 0.1
Spain Telecommunications 537,300 Telefonica de Espana S.A. 6,164,064 7,417,052 1.7
32,000 Telefonica de Espana S.A. (ADR) (c) 1,275,584 1,328,000 0.3
------------ ------------ ------
7,439,648 8,745,052 2.0
Utilities--Electric 154,800 Empresa Nacional de Electricidad
S.A. (ADR) (c) 5,123,952 8,359,200 1.9
92,000 HidroElectrica Del Cantabrico S.A. 3,107,921 2,958,343 0.7
808,500 Iberdrola I S.A. 4,998,321 6,827,771 1.6
------------ ------------ ------
13,230,194 18,145,314 4.2
Total Common Stocks in Spain 20,669,842 26,890,366 6.2
Thailand Telecommunications 15,000 ++TelecomAsia Corporation Public Co.,
Ltd. PLC (ADR) (b) (c) 328,050 435,000 0.1
Utilities--Electric 332,000 Electricity Generating Company of
Thailand (EGCOMP) (b) 296,433 1,135,268 0.3
Total Common Stocks in Thailand 624,483 1,570,268 0.4
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Face Value Percent of
COUNTRY Industries Amount Fixed-income Securities Cost (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C>
United Telecommunications 771,000 British Telecommunications PLC 5,385,185 4,442,468 1.0
Kingdom 180,000 Vodafone Group PLC (ADR) (c) 5,355,931 6,502,500 1.5
------------ ------------ ------
10,741,116 10,944,968 2.5
Utilities--Electric 90,000 London Electricity PLC 1,201,329 1,270,615 0.3
445,000 PowerGen PLC 3,253,482 3,643,500 0.9
------------ ------------ ------
4,454,811 4,914,115 1.2
Total Common Stocks in the
United Kingdom 15,195,927 15,859,083 3.7
<PAGE>
United Telecommunications 31,000 AT&T Corp. 1,749,485 2,046,000 0.5
States 146,800 Ameritech Corp. 5,940,672 8,074,000 1.9
138,700 Bell Atlantic Corp. 7,358,558 8,738,100 2.0
236,800 BellSouth Corp. 6,828,233 9,205,600 2.1
120,000 Frontier Corp. 2,437,200 3,105,000 0.7
235,700 GTE Corp. 8,322,438 10,046,713 2.3
147,700 NYNEX Corp. 6,204,823 7,329,613 1.7
129,900 SBC Communications, Inc. 4,873,568 7,014,600 1.6
217,900 U S West, Inc. 6,024,567 6,809,375 1.6
------------ ------------ ------
49,739,544 62,369,001 14.4
Utilities--Electric 289,500 Allegheny Power System, Inc. 7,707,195 8,033,625 1.9
207,200 Boston Edison Co. 5,530,724 5,775,700 1.3
321,962 CINergy Corp. 7,622,146 9,497,879 2.2
218,200 Consolidated Edison Co. of New York 6,893,524 6,300,525 1.5
138,900 Detroit Edison Co. 4,670,083 4,531,613 1.1
110,250 Dominion Resources, Inc. 4,427,302 4,368,656 1.0
193,000 Duke Power Co. 7,776,207 8,660,875 2.0
282,300 General Public Utilities Corp. 8,552,046 8,927,738 2.1
145,100 Houston Industries, Inc. 7,082,367 6,638,325 1.5
244,800 NIPSCO Industries, Inc. 6,616,371 9,057,600 2.1
221,000 New York State Electric & Gas Corp. 7,952,312 5,746,000 1.3
185,700 Northeast Utilities Co. 4,974,996 4,433,588 1.0
180,500 PECO Energy Co. 5,532,539 5,234,500 1.2
150,000 Pacific Gas and Electric Company 4,135,500 4,125,000 1.0
323,000 PacifiCorp 6,465,176 6,338,875 1.5
192,000 Public Service Co. of Colorado 5,832,890 6,624,000 1.5
283,000 SCEcorp 6,379,546 4,421,875 1.0
381,200 Southern Co. 6,665,086 8,719,950 2.0
177,300 Western Resources Co. 5,664,717 5,873,062 1.4
------------ ------------ ------
120,480,727 123,309,386 28.6
Utilities--Gas 130,000 The Brooklyn Union Gas Co. 3,371,550 3,672,500 0.9
226,000 The Coastal Corp. 6,038,593 7,514,500 1.8
77,400 NICOR Inc. 2,066,760 1,964,025 0.5
236,000 Questar Corp. 6,554,436 7,640,500 1.8
127,300 Sonat, Inc. 3,309,934 4,105,425 1.0
------------ ------------ ------
21,341,273 24,896,950 6.0
Total Common Stocks in the
United States 191,561,544 210,575,337 49.0
<PAGE>
Total Investments in Common
Stocks 355,412,984 396,934,195 92.4
Face
Amount Fixed-Income Securities
Australia Telecommunications US$ 7,960,000 ++Telstra Corp., Ltd., 6.50% due
7/31/2003 8,115,578 8,059,500 1.9
Total Fixed-Income Securities in
Australia 8,115,578 8,059,500 1.9
Korea Telecommunications 2,500,000 Korea Telecom, 7.40% due 12/01/1999 2,499,500 2,567,875 0.6
Total Fixed-Income Securities
in Korea 2,499,500 2,567,875 0.6
United Telecommunications US$ 3,500,000 Bell Cablemedia PLC, 11.95%* due
Kingdom 7/15/2004 $ 2,298,052 $ 2,388,750 0.6%
Total Fixed-Income Securities in
the United Kingdom 2,298,052 2,388,750 0.6
United Telecommunications 4,000,000 Rochester Telephone Corp., 9.25%
States due 6/01/2000 4,111,200 4,496,360 1.0
Utilities--Electric 4,000,000 Consumer Power Co., 8.875% due
11/15/1999 4,190,000 4,307,880 1.0
Total Fixed-Income Securities in
the United States 8,301,200 8,804,240 2.0
Total Investments in Fixed-Income
Securities 21,214,330 21,820,365 5.1
Short-Term Securities
Repurchase 5,870,000 SBC Capital Markets, Inc., purchased
Agreements** on 11/30/1995 to yield 5.875% to
12/01/1995 5,870,000 5,870,000 1.4
Total Investments in Short-Term
Securities 5,870,000 5,870,000 1.4
Total Investments $382,497,314 424,624,560 98.9
============
Other Assets Less Liabilities 4,836,204 1.1
------------ ------
Net Assets $429,460,764 100.0%
============ ======
<PAGE>
<FN>
*Represents a zero coupon bond; the interest rate shown is the
effective yield at the time of purchase by the Fund.
**Repurchase Agreements are fully collateralized by US Government &
Agency Obligations.
(a)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.
(b)Non-income producing security.
(c)American Depositary Receipts (ADR).
(d)Each unit consists of 5 Global Depositary Receipts and 2 warrants
of CESC Ltd.
++Restricted securities as to resale. The value of the Fund's
investment in restricted securities was approximately $15,477,000,
representing 3.6% of net assets.
<CAPTION>
Acquisition Value
Issue Date(s) Cost (Note 1a)
<S> <C> <C> <C>
Central Costanera S.A. (ADR) 12/17/1993 $ 158,400 $ 196,763
Distribuidora Chilectra
Metropolitana S.A. (ADR) 2/12/1992--12/21/1993 4,249,463 6,786,000
TelecomAsia Corporation Public Co.,
Ltd. PLC (ADR) 11/15/1993 328,050 435,000
Telstra Corp., Ltd., 6.50% due
7/31/2003 7/26/1993--9/29/1993 8,115,578 8,059,500
Total $12,851,491 $15,477,263
=========== ===========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF ASSETS AND LIABILITIES
<CAPTION>
As of November 30, 1995
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$382,497,314) (Note 1a) $424,624,560
Cash 166,993
Receivables:
Securities sold $ 7,926,367
Dividends 1,840,579
Capital shares sold 536,596
Interest 176,905 10,480,447
------------
Deferred organization expenses (Note 1f) 1,741
Prepaid registration fees and other assets (Note 1f) 34,060
------------
Total assets 435,307,801
------------
Liabilities: Payables:
Securities purchased 4,135,500
Capital shares redeemed 936,326
Distributor (Note 2) 236,057
Investment adviser (Note 2) 211,379 5,519,262
------------
Accrued expenses and other liabilities 327,775
------------
Total liabilities 5,847,037
------------
Net Assets: Net assets $429,460,764
============
Net Assets Class A Shares of Common Stock, $0.10 par value,
Consist of: 100,000,000 shares authorized $ 331,251
Class B Shares of Common Stock, $0.10 par value,
100,000,000 shares authorized 2,829,130
Class C Shares of Common Stock, $0.10 par value,
100,000,000 shares authorized 15,391
Class D Shares of Common Stock, $0.10 par value,
100,000,000 shares authorized 11,189
Paid-in capital in excess of par 374,374,685
Undistributed investment income--net 2,009,685
Undistributed realized capital gains on investments and
foreign currency transactions--net 7,750,475
Unrealized appreciation on investments and foreign currency
transactions--net 42,138,958
------------
Net assets . $429,460,764
============
Net Asset Class A--Based on net assets of $44,775,143 and 3,312,507
Value: shares outstanding $ 13.52
============
Class B--Based on net assets of $381,097,732 and 28,291,298
shares outstanding $ 13.47
============
Class C--Based on net assets of $2,071,696 and 153,914 shares
outstanding $ 13.46
============
Class D--Based on net assets of $1,516,193 and 111,895 shares
outstanding $ 13.55
============
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENT OF OPERATIONS
<CAPTION>
For the Year Ended November 30, 1995
<S> <S> <C> <C>
Investment Dividends (net of $901,006 foreign withholding tax) $ 18,994,083
Income Interest and discount earned 2,708,306
(Notes 1d & 1e): ------------
Total income 21,702,389
------------
Expenses: Account maintenance and distribution fees--Class B (Note 2) $ 3,117,918
Investment advisory fees (Note 2) 2,811,414
Transfer agent fees--Class B (Note 2) 759,831
Printing and shareholder reports 210,735
Custodian fees 148,269
Professional fees 119,939
Accounting services (Note 2) 101,177
Transfer agent fees--Class A (Note 2) 77,387
Registration fees (Note 1f) 67,325
Directors' fees and expenses 21,380
Amortization of organization expenses (Note 1f) 20,893
Account maintenance and distribution fees--Class C (Note 2) 12,735
Account maintenance fees--Class D (Note 2) 3,514
Transfer agent fees--Class C (Note 2) 2,910
Transfer agent fees--Class D (Note 2) 2,147
Pricing fees 863
Other 18,775
------------
Total expenses 7,497,212
------------
Investment income--net 14,205,177
------------
<PAGE>
Realized & Realized gain (loss) from:
Unrealized Gain Investments--net 9,070,206
(Loss) on Foreign currency transactions--net (30,993) 9,039,213
Investments & ------------
Foreign Currency Change in unrealized appreciation/depreciation on:
Transactions--Net Investments--net 43,810,996
(Notes 1b, 1c, Foreign currency transactions--net 8,387 43,819,383
1e & 3): ------------ ------------
Net realized and unrealized gain on investments and
foreign currency transactions 52,858,596
------------
Net Increase in Net Assets Resulting from Operations $ 67,063,773
============
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
For the Year Ended
November 30,
Increase (Decrease) in Net Assets: 1995 1994
<S> <S> <C> <C>
Operations: Investment income-- net $ 14,205,177 $ 18,547,757
Realized gain (loss) on investments and foreign currency
transactions--net 9,039,213 (1,270,044)
Change in unrealized appreciation/depreciation on investments
and foreign currency transactions--net 43,819,383 (52,883,601)
------------ ------------
Net increase (decrease) in net assets resulting from operations 67,063,773 (35,605,888)
------------ ------------
Dividends & Investment income--net:
Distributions to Class A (1,952,696) (2,661,239)
Shareholders Class B (12,961,394) (16,205,857)
(Note 1g): Class C (47,650) --
Class D (39,117) --
Realized gain on investments--net:
Class A -- (219,759)
Class B -- (1,627,301)
------------ ------------
Net decrease in net assets resulting from dividends and
distributions to shareholders (15,000,857) (20,714,156)
------------ ------------
<PAGE>
Capital Share Net decrease in net assets derived from capital share
Transactions transactions (139,129,318) (105,325,044)
(Note 4): ------------ ------------
Net Assets: Total decrease in net assets (87,066,402) (161,645,088)
Beginning of year 516,527,166 678,172,254
------------ ------------
End of year* $429,460,764 $516,527,166
============ ============
<FN>
*Undistributed investment income--net (Note 1h) $ 2,009,685 $ 2,733,344
============ ============
See Notes to Financial Statements.
</TABLE>
<TABLE>
FINANCIAL HIGHLIGHTS
<CAPTION>
Class A
For the
The following per share data and ratios have Period
been derived from information provided in Dec. 28,
the financial statements. For the Year 1990++ to
Ended November 30, Nov. 30,
Increase (Decrease) in Net Asset Value: 1995 1994 1993 1992 1991
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 12.08 $ 13.22 $ 11.23 $ 10.67 $ 10.00
Operating -------- -------- -------- -------- --------
Performance: Investment income--net .51 .94 .40 .47 .49
Realized and unrealized gain (loss) on
investments and foreign currency
transactions--net 1.42 (1.57) 2.01 .57 .56
-------- -------- -------- -------- --------
Total from investment operations 1.93 (.63) 2.41 1.04 1.05
-------- -------- -------- -------- --------
Less dividends and distributions:
Investment income--net (.49) (.47) (.41) (.48) (.38)
Realized gain on investments--net -- (.04) (.01) -- --
-------- -------- -------- -------- --------
Total dividends and distributions (.49) (.51) (.42) (.48) (.38)
-------- -------- -------- -------- --------
Net asset value, end of period $ 13.52 $ 12.08 $ 13.22 $ 11.23 $ 10.67
======== ======== ======== ======== ========
<PAGE>
Total Investment Based on net asset value per share 16.34% (4.89%) 21.80% 10.05% 10.83%+++
Return:** ======== ======== ======== ======== ========
Ratios to Average Expenses .91% .86% .82% 1.01% 1.28%*
Net Assets: ======== ======== ======== ======== ========
Investment income--net 3.73% 3.58% 3.57% 4.47% 5.57%*
======== ======== ======== ======== ========
Supplemental Net assets, end of period (in thousands) $ 44,775 $ 56,659 $ 81,718 $ 29,772 $ 20,579
Data: ======== ======== ======== ======== ========
Portfolio turnover 2.92% 17.02% 8.92% 30.91% 20.51%
======== ======== ======== ======== ========
<CAPTION>
Class B
For the
The following per share data and ratios have Period
been derived from information provided in Dec. 28,
the financial statements. For the Year 1990++ to
Ended November 30, Nov. 30,
Increase (Decrease) in Net Asset Value: 1995 1994 1993 1992 1991
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 12.04 $ 13.17 $ 11.20 $ 10.65 $ 10.00
Operating -------- -------- -------- -------- --------
Performance: Investment income--net .38 .74 .33 .39 .40
Realized and unrealized gain (loss) on
investments and foreign currency
transactions--net 1.44 (1.46) 1.98 .57 .58
-------- -------- -------- -------- --------
Total from investment operations 1.82 (.72) 2.31 .96 .98
-------- -------- -------- -------- --------
Less dividends and distributions:
Investment income--net (.39) (.37) (.33) (.41) (.33)
Realized gain on investments--net -- (.04) (.01) -- --
-------- -------- -------- -------- --------
Total dividends and distributions (.39) (.41) (.34) (.41) (.33)
-------- -------- -------- -------- --------
Net asset value, end of period $ 13.47 $ 12.04 $ 13.17 $ 11.20 $ 10.65
======== ======== ======== ======== ========
<PAGE>
Total Investment Based on net asset value per share 15.38% (5.60%) 20.86% 9.20% 10.05%+++
Return:** ======== ======== ======== ======== ========
Ratios to Average Expenses, excluding account maintenance and
Net Assets: distribution fees .93% .88% .84% 1.02% 1.29%*
======== ======== ======== ======== ========
Expenses 1.68% 1.63% 1.59% 1.77% 2.04%*
======== ======== ======== ======== ========
Investment income--net 2.95% 2.82% 2.81% 3.65% 4.78%*
======== ======== ======== ======== ========
Supplemental Net assets, end of period (in thousands) $381,098 $459,185 $596,455 $200,396 $ 90,966
Data: ======== ======== ======== ======== ========
Portfolio turnover 2.92% 17.02% 8.92% 30.91% 20.51%
======== ======== ======== ======== ========
<CAPTIONS>
Class C Class D
For the For the
The following per share data and ratios have For the Period For the Period
been derived from information provided in Year Oct. 21, Year Oct. 21,
the financial statements. Ended 1994++ to Ended 1994++ to
Nov. 30, Nov. 30, Nov. 30, Nov. 30,
Increase (Decrease) in Net Asset Value: 1995 1994 1995 1994
<S> <S> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 12.05 $ 12.34 $ 12.09 $ 12.37
Operating -------- -------- -------- --------
Performance: Investment income--net .39 .01 .52 .02
Realized and unrealized gain (loss) on
investments and foreign currency transactions--net 1.43 (.30) 1.40 (.30)
-------- -------- -------- --------
Total from investment operations 1.82 (.29) 1.92 (.28)
-------- -------- -------- --------
Less dividends from investment income (.41) -- (.46) --
-------- -------- -------- --------
Net asset value, end of period $ 13.46 $ 12.05 $ 13.55 $ 12.09
======== ======== ======== ========
Total Investment Based on net asset value per share 15.38% (2.35%)+++ 16.21% (2.26%)+++
Return:** ======== ======== ======== ========
<PAGE>
Ratios to Average Expenses, excluding account maintenance
Net Assets: and distribution fees .93% .80%* .90% .83%*
======== ======== ======== ========
Expenses 1.73% 1.60%* 1.15% 1.08%*
======== ======== ======== ========
Investment income--net 2.85% 3.01%* 3.36% 3.25%*
======== ======== ======== ========
Supplemental Net assets, end of period (in thousands) $ 2,072 $ 445 $ 1,516 $ 239
Data: ======== ======== ======== ========
Portfolio turnover 2.92% 17.02% 2.92% 17.02%
======== ======== ======== ========
<FN>
*Annualized.
**Total investment returns exclude the effects of sales loads.
+++Aggregate total investment return.
++Commencement of Operations.
See Notes to Financial Statements.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
Merrill Lynch Global Utility Fund, Inc. (the "Fund") is registered
under the Investment Company Act of 1940 as a diversified, open-end
management investment company. 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,
liquidation 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.
<PAGE>
(a) Valuation of securities--Portfolio securities which are traded
on stock exchanges are valued at the last sale price on the exchange
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. Securities traded in the over-the-
counter market are valued at the last available bid price prior to
the time of valuation. In cases where securities are traded on more
than one exchange, the securities are valued on the exchange
designated by or under the authority of the Board of Directors as
the primary market. Securities which are traded both in the over-the-
counter market and on a stock exchange are valued according to the
broadest and most representative market. 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. Short-
term securities are valued at amortized cost, which approximates
market value. Other investments, including futures contracts and
related options, are stated at market value. Securities and assets
for which market value quotations are not available are valued at
their fair value as determined in good faith by or under the
direction of the Fund's Board of Directors.
(b) 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) assets or liabilities expressed in foreign
currencies into US dollars. Realized and unrealized gains or losses
from investments include the effects of foreign exchange rates on
investments.
(c) Derivative financial instruments--The Fund may engage in various
portfolio strategies to seek to increase its return by hedging its
portfolio against adverse movements in the equity, debt and currency
markets. Losses may arise due to changes in the value of the
contract or if the counterparty does not perform under the contract.
* Options--The Fund is authorized to write and purchase 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 subsequently
marked to market to reflect the current market value of the option
written. 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 basis of the security acquired or deducted from
(or added to) 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
received or paid (or gain or loss to the extent the cost of the
closing transaction exceeds the premium paid or received).
<PAGE>
Written and purchased options are non-income producing investments.
* 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
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 purchase
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.
(d) 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, dividends and capital gains at various
rates.
(e) Security transactions and investment income--Security
transactions are recorded on the dates the transactions are entered
into (the trade dates). Interest income (including amortization of
discount) is recognized on the accrual basis. Dividend income is
recorded on the ex-dividend date, except that if the
ex-dividend date has passed, certain dividends from foreign
securities are recorded as soon as the Fund is informed of the
ex-dividend date. Realized gains and losses on security transactions
are determined on the identified cost basis.
(f) 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.
(g) Dividends and distributions--Dividends and distributions paid by
the Fund are recorded on the ex-dividend dates.
<PAGE>
(h) Reclassification--Generally accepted accounting principles
require that certain components of net assets be reclassified to
reflect permanent differences between financial reporting and tax
purposes. Accordingly, current year's permanent book/tax differences
of $72,021 have been reclassified from undistributed net realized
capital gains to undistributed net investment income. These
reclassifications have no effect on net assets or net asset values
per share.
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 operation of the Fund. For such
services, the Fund pays a monthly fee of 0.60%, on an annual basis,
of the average daily value of the Fund's net assets. The most
restrictive annual expense limitation requires that MLAM reimburse
the Fund to 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. MLAM's obligation to reimburse the Fund is limited to the
amount of the advisory fee. No fee payment will be made to MLAM
during any fiscal year which will cause such expenses to exceed the
most restrictive expense limitation applicable 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:
Account
Maintenance Distribution
Fee Fee
Class B 0.25% 0.50%
Class C 0.25% 0.55%
Class D 0.25% --
<PAGE>
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 distribution
fee compensates the Distributor and MLPF&S for providing shareholder
and distribution-related services to Class B and Class C
shareholders.
NOTES TO FINANCIAL STATEMENTS (concluded)
For the year ended November 30, 1995, MLFD earned underwriting
discounts and MLPF&S earned dealer concessions on sales of the
Fund's Class A and Class D Shares as follows:
MLFD MLPF&S
Class A $ 689 $ 8,294
Class D $1,975 $16,258
For the year ended November 30, 1995, MLPF&S received contingent
deferred sales charges of $1,378,994 and $1,926, relating to
transactions in Class B Shares and Class C Shares, respectively.
In addition, MLPF&S received $8,312 in commissions on the execution
of portfolio security transactions for the Fund for the year ended
November 30, 1995.
For the year ended November 30, 1995, the Fund paid Merrill Lynch
Security Pricing Service, an affiliate of MLPF&S, $853 for security
price quotations to compute the net asset value of the Fund.
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 year ended November 30, 1995 were $13,412,525 and $148,578,586,
respectively.
<PAGE>
Net realized and unrealized gains (losses) as of November 30, 1995
were as follows:
Realized Unrealized
Gains (Losses) Gains
Long-term investments $9,070,206 $42,127,246
Foreign currency transactions (30,993) 11,712
---------- -----------
Total $9,039,213 $42,138,958
========== ===========
As of November 30, 1995 net unrealized appreciation for Federal
income tax purposes aggregated $42,126,488, of which $59,061,081
related to appreciated securities and $16,934,593 related to
depreciated securities. The aggregate cost of investments at
November 30, 1995 for Federal income tax purposes was $382,498,072.
4. Capital Share Transactions:
Net decrease in net assets derived from capital share transactions
was $139,129,318 and $105,325,044 for the years ended November 30,
1995 and November 30, 1994, respectively.
Transactions in capital shares for each class were as follows:
Class A Shares for the Year Dollar
Ended November 30, 1995 Shares Amount
Shares sold 165,580 $ 2,080,607
Shares issued to shareholders in
reinvestment of dividends 116,128 1,460,439
----------- ------------
Total issued 281,708 3,541,046
Shares redeemed (1,658,669) (20,944,113)
----------- ------------
Net decrease (1,376,961) $ (17,403,067)
=========== =============
<PAGE>
Class A Shares for the Year Dollar
Ended November 30, 1994 Shares Amount
Shares sold 1,418,075 $ 18,617,407
Shares issued to shareholders in
reinvestment of dividends and
distributions 175,820 2,216,368
----------- ------------
Total issued 1,593,895 20,833,775
Shares redeemed (3,085,387) (39,503,880)
----------- ------------
Net decrease (1,491,492) $ (18,670,105)
=========== =============
Class B Shares for the Year Dollar
Ended November 30, 1995 Shares Amount
Shares sold 1,655,159 $ 20,831,069
Shares issued to shareholders in
reinvestment of dividends 796,753 9,996,426
----------- -------------
Total issued 2,451,912 30,827,495
Automatic conversion of shares (10,704) (138,527)
Shares redeemed (12,290,113) (154,903,079)
----------- -------------
Net decrease (9,848,905) $(124,214,111)
=========== =============
Class B Shares for the Year Dollar
Ended November 30, 1994 Shares Amount
Shares sold 8,594,406 $ 112,616,998
Shares issued to shareholders in
reinvestment of dividends and
distributions 1,125,104 14,149,052
----------- -------------
Total issued 9,719,510 126,766,050
Shares redeemed (16,864,631) (214,110,349)
----------- -------------
Net decrease (7,145,121) $ (87,344,299)
=========== =============
<PAGE>
Class C Shares for the Year Dollar
Ended November 30, 1995 Shares Amount
Shares sold 259,375 $ 3,186,034
Shares issued to shareholders in
reinvestment of dividends 3,375 43,016
----------- -------------
Total issued 262,750 3,229,050
Shares redeemed (145,762) (1,797,850)
----------- -------------
Net increase 116,988 $ 1,431,200
=========== =============
Class C Shares for the Period
October 21, 1994++ to Dollar
November 30, 1994 Shares Amount
Shares sold 36,927 $ 446,777
Shares redeemed (1) (13)
----------- -------------
Net increase 36,926 $ 446,764
=========== =============
[FN]
++Commencement of Operations.
Class D Shares for the Year Dollar
Ended November 30, 1995 Shares Amount
Shares sold 2,762,874 $ 34,867,068
Automatic conversion of shares 9,840 138,527
Shares issued to shareholders in
reinvestment of dividends 1,912 24,419
----------- -------------
Total issued 2,774,626 35,030,014
Shares redeemed (2,682,472) (33,973,354)
----------- -------------
Net increase 92,154 $ 1,056,660
=========== =============
Class D Shares for the Period
October 21, 1994++ to Dollar
November 30, 1994 Shares Amount
Shares sold 35,477 $ 437,644
Shares redeemed (15,736) (195,048)
----------- -------------
Net increase 19,741 $ 242,596
=========== =============
[FN]
++Commencement of Operations.
<PAGE>
5. Subsequent Event:
On December 15, 1995, the Fund's Board of Directors declared an
ordinary income dividend in the amount of $0.117234 per Class A
Share, $0.090243 per Class B Share, $0.090524 per Class C Share,
$0.109174 per Class D Share, and a long-term capital gains
distribution of $0.244739 per share for each of the four classes,
payable on December 22, 1995 to shareholders on record as of
December 14, 1995.
<AUDIT-REPORT>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders,
Merrill Lynch Global Utility Fund, Inc.:
We have audited the accompanying statement of assets and
liabilities, including the schedule of investments, of Merrill Lynch
Global Utility Fund, Inc. as of November 30, 1995, the related
statements of operations for the year then ended and changes in net
assets for each of the years in the two-year period then ended, and
the financial highlights for each of the years in the four-year
period then ended and the period December 28, 1990 (commencement
of operations) to November 30, 1991. These financial statements and
the financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these
financial statements and the financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements and the financial highlights are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.
Our procedures included confirmation of securities owned at November
30, 1995 by correspondence with the custodian and broker. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
<PAGE>
In our opinion, such financial statements and financial highlights
present fairly, in all material respects, the financial position of
Merrill Lynch Global Utility Fund, Inc. as of November 30, 1995, the
results of its operations, the changes in its net assets, and the
financial highlights for the respective stated periods in conformity
with generally accepted accounting principles.
Deloitte & Touche LLP
Princeton, New Jersey
January 5, 1996
</AUDIT-REPORT>
IMPORTANT TAX INFORMATION (unaudited)
Of the ordinary income distributions paid quarterly by Merrill Lynch
Global Utility Fund, Inc. during its taxable year ended November 30,
1995, 85.15% qualifies for the dividends received deduction for
corporations. Additionally, there were no long-term capital gains
distributed by the Fund during the year.
Please retain this information for your records.
PORTFOLIO INFORMATION (unaudited)
Worldwide
Investments as of
11/30/95
Top Ten Holdings Percent of
(Equity Investments) Net Assets
GTE Corp. 2.3%
CINergy Corp. 2.2
BellSouth Corp. 2.1
NIPSCO Industries, Inc. 2.1
General Public Utilities Corp. 2.1
Bell Atlantic Corp. 2.0
Southern Co. 2.0
Duke Power Co. 2.0
Compagnie Generale des Eaux 2.0
Empresa Nacional de Electricidad S.A. (ADR) (b) 1.9
<PAGE>
Additions
AT&T Corp.
London Electricity PLC
PT Telekomunikasi Indonesia (Persero)
Pacific Gas and Electric Company
Telefonica de Espana S.A. (ADR)
*US West Media Group, Inc.
Deletions
Central & SouthWest Corp.
Companhia Energetica de Minas Gerais (CEMIG) (ADR)
Electricity Generating Company of Thailand
(EGCOMP) (Rights)
*US West Media Group, Inc.
[FN]
*Added and deleted in the same quarter.
