MERRILL LYNCH
GLOBAL UTILITY
FUND, INC.
FUND LOGO
Quarterly Report
August 31, 1996
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
Custodian
The Chase Manhattan Bank, N. A.
4 MetroTech Center, 18th Floor
Brooklyn, NY 11245
<PAGE>
Transfer Agent
Merrill Lynch Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 637-3863
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.
Merrill Lynch
Global Utility Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
Printed on post-consumer recycled paper
MERRILL LYNCH GLOBAL UTILITY FUND, INC.
<PAGE>
Sector
Diversification
As a Percentage of
Equities as of
August 31, 1996
Pie graph depicting the following percentages:
Utilities--Electric 42.0%
Telecommunications 38.0%
Utilities--Gas 16.1%
Utilities--Water 3.9%
Geographical
Diversification
As a Percentage of
Equities as of
August 31, 1996
Pie graph depicting the following percentages:
United States 42.7%
Europe 33.4%
Americas (Ex-US) 14.6%
Asia/Pacific 9.3%
DEAR SHAREHOLDER
During the quarter ended August 31, 1996, economic crosscurrents led
to continued stock and bond market volatility. The US economy has
demonstrated surprising resilience thus far this year. As a result,
when economic data releases during the August quarter appeared to
indicate that the US economy was expanding at a stronger-than-
expected (and potentially inflationary) rate, investors focused on
the increasing possibility of monetary policy tightening by the
Federal Reserve Board. During these periods, stock prices declined
and long-term interest rates moved higher. However, when economic
results were at or below expectations, investors' concerns about an
overheating economy and monetary policy tightening subsided, and
stock and bond prices improved.
<PAGE>
The shifts in perceptions were exemplified by investors' reactions
to the release of recent employment reports. Inflationary concerns
were heightened further with the stronger-than-expected employment
report for June. Unemployment fell to a six-year low, and hourly
wages rose sharply. This mounting evidence of a tighter labor market
and rising labor costs suggested to many investors that the Federal
Reserve Board would be forced to raise short-term interest rates in
the coming months. However, more subdued job growth and deceler-
ating hourly wage gains were subsequently reported for the month of
July. Although the employment report for August (released in early
September) showed that unemployment had dropped to its lowest level
since 1989, these results were generally in line with expectations,
and were received favorably by investors.
Investors will continue to monitor economic data releases to
determine the potential for monetary policy tightening by the
Federal Reserve Board. The potential outcome of the upcoming
November election will also increasingly influence investor
psychology in the weeks ahead.
Portfolio Matters
During the quarter ended August 31, 1996, Merrill Lynch Global
Utility Fund, Inc.'s Class A, Class B, Class C and Class D Shares
had total returns of -0.48%, -0.68%, -0.68% and -0.54%,
respectively. During the August quarter, Merrill Lynch Global
Utility Fund, Inc. outperformed the global index of utility stocks
as measured by the unmanaged Financial Times/Standard & Poor's (S&P)--
Actuaries World Utility Index which provided a total return of
- -3.60%. (Complete performance information, including average annual
total returns, can be found on pages 4-6 of this report to
shareholders.)
The Fund's outperformance relative to the Index was primarily the
result of having an overweighted position in Europe and an
underweighting in the major Asian utility markets such as Japan and
Hong Kong. Moreover, the Fund had an overweighted position in the
two best-performing individual markets measured by the Index, New
Zealand and Australia. The Fund's domestic utility holdings,
adjusted for sales, outperformed the Index as a result of having
more domestic US electric utility and natural gas stocks than
telecommunications stocks, which was the worst-performing sector
during the period. Furthermore, comparing the Fund's US utility
portfolio to the S&P Utility Index also shows the Fund's lower
exposure to the worst-performing telecommunications sector. While
the Index had a 65% weighting in telecommunications on August 31,
1996, the Fund had only 16% of its domestic utility assets invested
in domestic US telephones.
<PAGE>
We added one new position to the Fund's portfolio during the August
quarter, Telefonica del Peru S.A. The company is a full-service
telecommunications provider, offering fixed local, domestic and
international long distance services, on an exclusive basis,
throughout Peru. The company also offers cellular telephone service
as well as paging and cable television. Line penetration is low, and
the prospects for growth are promising. With the addition of this
investment to the portfolio, the Fund's net assets are now
geographically diversified across 25 countries, including the United
States.
During the August quarter, we continued to reduce the Fund's
domestic telephone and electric utility holdings. More specifically,
our focus was primarily on reducing the portfolio's weighting in the
large local telephone companies. A great degree of uncertainty
remains surrounding the transition and interpretation of the final
rule settings which are still to come. Despite passage of the
Telecommunications Act of 1996, resulting in the opening of the
local market to competition and the entry of the seven regional
holding companies into the long distance telephone market, it is
clearly too early to tell what the outcome will be. As a result,
lackluster performance from this sector may continue as investors
sort out the issues. While the current valuation of the regional
telephone sector is near the bottom of its historical range, we are
maintaining an underweighted investment position in this sector.
Lastly, we eliminated our small position in the long distance
carrier, MCI Communications Corp.
We also modestly reduced the Fund's sizable position (nearly 26% of
net assets) in the domestic electric sector to raise capital for new
investments and further diversification of assets. This sector
continued to be influenced by long-term interest rates as measured
by the 30-year Treasury bond, which remained in the 7% range during
the August quarter but experienced quite a bit of volatility.
<PAGE>
Major mergers and acquisitions were announced during the August
quarter. There were two announcements of an electric utility company
merging with a natural gas company. Moreover, Enron Corp., a natural
gas pipeline company, announced its intention to purchase the
electric utility company Portland General Corp., and the electric
utility company Houston Industries, Inc. announced its intention to
purchase the natural gas company NorAm Energy. These proposed
transactions appear to be the start of a trend of companies wanting
to provide 'one-stop shopping' for consumers. So-called combination
electric and gas companies are not new to the industry, but
companies that currently provide only one service are seeking to
provide other services within their existing territories to obtain
greater efficiencies. This corporate activity in the sector (which
is expected to continue), coupled with a still-positive fundamental
outlook, resulted in the natural gas sector outperforming both the
electric and telephone sectors as measured by the S&P Utility Index.
The Fund benefited during the August quarter as a result of its
significant overweighting in the domestic natural gas sector versus
the sector's weighting in the S&P Utility Index (19% of the Fund's
US assets as compared to 4% of the S&P Utility Index).
In terms of the Fund's non-US investment activity during the three-
month period ended August 31, 1996, we reduced our holdings in four
stocks: Korea Electric Power Corp., Nova Scotia Power Co., Transcanada
Pipeline Co. Ltd. and Tele Danmark A/S. Furthermore, we eliminated two
holdings: London Electricity PLC and National Grid Group PLC, both
in the United Kingdom. We took these actions based on valuation
levels and fundamental outlooks. Overall, the investment actions
taken in the August quarter continued to emphasize foreign utility
stocks as opposed to US-based utility stocks, and the
domestic/foreign split in Fund net assets at the end of the August
quarter was 40%--60%.
Investment Outlook
It now appears that the long-awaited approximately $10 billion
privatization of Deutsche Telekom will take place in the upcoming
November quarter. The size and timing of this transaction have
already put some pressure on the share prices of other European
telecom stocks, particularly in northern Europe. Once this
transaction is done, we may see other governments reduce their
ownership of their telephone companies as well as further initial
public offerings from new privatizations. What happens in this
particular region and sector will depend significantly on the
success of this massive transaction. On the foreign electric utility
side, given the postponement of the also long-awaited offering of
Entel of Italy, the area in which we are most likely to see huge
potential investment activity is from the further privatization of
the Brazilian electric utility sector. Overall, the pipeline of new
investments appears to be large, and offers the opportunity to
provide interesting investment opportunities for the Fund.
<PAGE>
On the domestic utility side, we expect to continue to see further
consolidations as companies focus on getting access to customers.
Economies of scale in terms of maintenance and operating expense
reduction, coupled with a new awareness of the need for new
marketing and advertising expenditures as the result of deregulation
and greater competition, should continue to drive this trend. The
friendly environment that once existed in the domestic utility
sector appears to be coming to an end as managements increase their
aggressiveness. Thus, we also expect to see interesting investment
opportunities arise from this trend.
In Conclusion
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
September 25, 1996
PERFORMANCE DATA
About Fund
Performance
<PAGE>
Investors are able to purchase shares of the Fund through the
Merrill Lynch Select Pricing SM System, which offers four pricing
alternatives:
* Class A Shares incur a maximum initial sales charge (front-end
load) of 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. (There is no initial
sales charge for automatic sales conversions.)
* 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).
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
8/31/96 5/31/96 8/31/95 % Change % Change
<S> <C> <C> <C> <C> <C>
Class A Shares $13.92 $14.15 $13.10 + 8.18%(1) -1.63%
Class B Shares 13.88 14.11 13.06 + 8.21(1) -1.63
Class C Shares 13.86 14.09 13.05 + 8.14(1) -1.63
Class D Shares 13.93 14.16 13.13 + 8.01(1) -1.62
Class A Shares--Total Return +12.34(2) -0.48(3)
Class B Shares--Total Return +11.42(4) -0.68(5)
Class C Shares--Total Return +11.37(6) -0.68(7)
Class D Shares--Total Return +11.84(8) -0.54(9)
<PAGE>
<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 $0.245 per share capital
gains distributions.
(2)Percent change includes reinvestment of $0.525 per share ordinary
income dividends and $0.245 per share capital gains distributions.
(3)Percent change includes reinvestment of $0.168 per share ordinary
income dividends.
(4)Percent change includes reinvestment of $0.407 per share ordinary
income dividends and $0.245 per share capital gains distributions.
(5)Percent change includes reinvestment of $0.140 per share ordinary
income dividends.
(6)Percent change includes reinvestment of $0.410 per share ordinary
income dividends and $0.245 per share capital gains distributions.
(7)Percent change includes reinvestment of $0.139 per share ordinary
income dividends.
(8)Percent change includes reinvestment of $0.487 per share ordinary
income dividends and $0.245 per share capital gains distributions.
(9)Percent change includes reinvestment of $0.159 per share ordinary
income dividends.
</TABLE>
Average Annual
Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 6/30/96 +18.34% +13.61%
Five Years Ended 6/30/96 +13.00 +12.08
Inception (12/28/90)
through 6/30/96 +11.65 +10.83
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 6/30/96 +17.49% +13.49%
Five Years Ended 6/30/96 +12.12 +12.12
Inception (12/28/90)
through 6/30/96 +10.79 +10.79
<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.
% Return % Return
Without CDSC With CDSC**
Class C Shares*
Year Ended 6/30/96 +17.38% +16.38%
Inception (10/21/94)
through 6/30/96 +14.19 +14.19
[FN]
*Maximum contingent deferred sales charge is 1% and is reduced to 0%
after 1 year.
**Assuming payment of applicable contingent deferred sales charge.
% Return Without % Return With
Sales Charge Sales Charge**
Class D Shares*
Year Ended 6/30/96 +17.89% +13.18%
Inception (10/21/94)
through 6/30/96 +14.85 +12.11
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
<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
1995 11.83 13.86 0.245 0.483 +23.74
1/1/96--8/31/96 13.86 13.92 -- 0.280 + 2.43
------ ------
Total $0.284 Total $2.644
<PAGE>
Cumulative total return as of 8/31/96: +77.23%**
<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>
PERFORMANCE DATA (concluded)
<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
1995 11.81 13.83 0.245 0.380 +22.73
1/1/96--8/31/96 13.83 13.88 -- 0.215 + 1.89
------ ------
Total $0.284 Total $2.137
Cumulative total return as of 8/31/96: +69.61%**
<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 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%
1995 11.81 13.82 $0.245 0.383 +22.67
1/1/96--8/31/96 13.82 13.86 -- 0.218 + 1.84
------ ------
Total $0.245 Total $0.718
<PAGE>
Cumulative total return as of 8/31/96: +20.75%**
<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%
1995 11.84 13.90 $0.245 0.445 +23.62
1/1/96--8/31/96 13.90 13.93 -- 0.261 + 2.07
------ ------
Total $0.245 Total $0.830
Cumulative total return as of 8/31/96: +22.02%**
<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>
SCHEDULE OF INVESTMENTS (in US dollars)
<CAPTION>
Shares Percent of
COUNTRY Industries Held Common Stocks & Warrants Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
Argentina Telecommunications 100,000 Telecom Argentina STET S.A.
(ADR)(b) $ 3,770,294 $ 3,887,500 1.0%
200,000 Telefonica de Argentina S.A.
(ADR)(b) 4,140,594 4,775,000 1.2
------------ ------------ -------
7,910,888 8,662,500 2.2
<PAGE>
Utilities--Electric 6,600 Central Costanera S.A. (ADR)(b) 158,400 198,000 0.1
Total Common Stocks in Argentina 8,069,288 8,860,500 2.3
Australia Utilities--Gas 2,000,000 The Australian Gas Light Co., Ltd. 5,280,752 9,655,080 2.5
Total Common Stocks in Australia 5,280,752 9,655,080 2.5
Austria Utilities--Gas 41,820 Energie-Versorgung Niederoesterreich
AG (EVN) 3,050,015 5,680,738 1.5
Total Common Stocks in Austria 3,050,015 5,680,738 1.5
Brazil Telecommunications 45,000 Telecomunicacoes Brasileiras S.A.
--Telebras (ADR)(b) 2,176,897 3,346,875 0.9
Total Common Stocks in Brazil 2,176,897 3,346,875 0.9
Canada Telecommunications 140,000 BC Telecom, Inc. 2,593,297 2,865,916 0.8
Utilities--Electric 369,100 Nova Scotia Power Co. 3,476,309 3,440,580 0.9
Utilities--Gas 200,000 Transcanada Pipeline Co. Ltd. 3,147,485 3,225,000 0.8
Total Common Stocks in Canada 9,217,091 9,531,496 2.5
Chile Telecommunications 51,000 Compania de Telecommunicaciones
de Chile S.A. (Sponsored) (ADR)(b) 3,711,460 4,985,250 1.3
Utilities--Electric 65,000 Chilgener S.A. (ADR)(b) 1,495,000 1,511,250 0.4
156,000 Distribuidora Chilectra Metropolitana
S.A. (ADR)(b) 4,249,463 8,658,000 2.3
28,000 Enersis S.A. (ADR)(b) 544,224 871,500 0.2
------------ ------------ -------
6,288,687 11,040,750 2.9
Total Common Stocks in Chile 10,000,147 16,026,000 4.2
Denmark Telecommunications 240,000 Tele Danmark A/S (ADR)(b) 5,646,240 5,940,000 1.5
Total Common Stocks in Denmark 5,646,240 5,940,000 1.5
France Utilities--Water 89,715 Compagnie Generale des Eaux S.A. 9,668,083 8,656,026 2.3
40,000 Lyonnaise des Eaux S.A. (f) 3,989,365 3,506,914 0.9
Total Common Stocks in France 13,657,448 12,162,940 3.2
<PAGE>
Germany Utilities--Electric 200,000 Veba AG 6,526,985 10,496,789 2.8
Total Common Stocks in Germany 6,526,985 10,496,789 2.8
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Shares Percent of
COUNTRY Industries Held Common Stocks & Warrants Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
Hong Kong Utilities--Gas 1,200,000 The Hong Kong & China Gas Co.,
Ltd. $ 1,627,410 $ 1,939,990 0.5%
100,000 The Hong Kong & China Gas Co.,
Ltd. (Warrants)(a) 0 26,837 0.0
Total Common Stocks & Warrants in
Hong Kong 1,627,410 1,966,827 0.5
India Utilities--Electric 247,500 CESC Ltd. (GDR)(e) 2,640,330 495,000 0.1
Total Common Stocks in India 2,640,330 495,000 0.1
Indonesia Telecommunications 29,600 PT Indonesian Satellite Corp.
(Indosat) (ADR)(b) 176,275 171,875 0.0
5,500 PT Telekomunikasi Indonesia (Persero)
(ADR)(b) 532,800 825,100 0.2
Total Common Stocks in Indonesia 709,075 996,975 0.2
Italy Telecommunications 3,091,700 Societa Finanziara Telefonica
S.p.A. (STET) 5,780,442 7,463,077 2.0
5,000,000 Telecom Italia Mobile S.p.A. 3,090,118 10,298,013 2.7
3,900,000 Telecom Italia S.p.A 3,619,691 7,657,947 2.0
------------ ------------ -------
12,490,251 25,419,037 6.7
Utilities--Gas 1,786,300 Italgas Torino 5,169,953 6,104,177 1.6
Total Common Stocks in Italy 17,660,204 31,523,214 8.3
Korea Utilities--Gas 114,200 Korea Electric Power Corp.
(KEPCO) (ADR)(b) 2,298,275 2,426,750 0.6
Total Common Stocks in Korea 2,298,275 2,426,750 0.6
Malaysia Telecommunications 1,035,000 Telekom Malaysia BHD 7,499,205 9,134,307 2.4
Total Common Stocks in Malaysia 7,499,205 9,134,307 2.4
<PAGE>
Mexico Telecommunications 105,000 Telefonos de Mexico, S.A. de C.V.
(ADR)(b) 5,594,445 3,451,875 0.9
Total Common Stocks in Mexico 5,594,445 3,451,875 0.9
New Zealand Telecommunications 100,000 Telecom Corporation of New Zealand
Ltd. (ADR)(b) 3,935,303 7,650,000 2.0
Total Common Stocks in New Zealand 3,935,303 7,650,000 2.0
Peru Telecommunications 195,000 Telefonica del Peru S.A. (ADR)(b) 3,997,500 4,558,125 1.2
Total Common Stocks in Peru 3,997,500 4,558,125 1.2
Philippines Telecommunications 100,000 Philippine Long Distance Telephone
Co. (ADR)(b) 4,311,241 5,987,500 1.6
Utilities--Electric 74,100 Manila Electric Co. (MERALCO) 'B' 497,246 569,346 0.2
Total Common Stocks in the
Philippines 4,808,487 6,556,846 1.8
Portugal Telecommunications 205,740 Portugal Telecom, S.A. (ADR)(b) 4,576,844 5,477,828 1.4
Total Common Stocks in Portugal 4,576,844 5,477,828 1.4
Spain Telecommunications 537,300 Telefonica de Espana S.A. 6,164,064 9,992,181 2.6
32,000 Telefonica de Espana S.A. (ADR)(b) 1,275,584 1,772,000 0.5
------------ ------------ -------
7,439,648 11,764,181 3.1
Utilities--Electric 154,800 Empresa Nacional de Electricidad
S.A. (ADR)(b) 5,123,952 9,094,500 2.4
92,000 HidroElectrica Del Cantabrico S.A. 3,107,921 2,958,247 0.8
808,500 Iberdrola I S.A. 4,998,321 7,307,671 1.9
------------ ------------ -------
13,230,194 19,360,418 5.1
Total Common Stocks in Spain 20,669,842 31,124,599 8.2
Switzerland Utilities--Electric 4,300 Elektrowatt AG 1,687,158 1,718,421 0.5
Total Common Stocks in Switzerland 1,687,158 1,718,421 0.5
Thailand Telecommunications 15,000 TelecomAsia Corporation Public Co.,
Ltd. PLC (ADR)(b) 328,050 255,000 0.1
Utilities--Electric 332,000 Electricity Generating Company of
Thailand (EGCOMP) 296,433 984,190 0.3
Total Common Stocks in Thailand 624,483 1,239,190 0.4
<PAGE>
United Telecommunications 671,000 British Telecommunications PLC 4,688,465 3,935,623 1.0
Kingdom 180,000 Vodafone Group PLC (ADR)(b) 5,355,931 6,817,500 1.8
------------ ------------ -------
10,044,396 10,753,123 2.8
Utilities--Electric 208,000 National Power PLC 1,723,671 1,307,706 0.3
445,000 PowerGen PLC 3,253,482 3,517,155 0.9
------------ ------------ -------
4,977,153 4,824,861 1.2
Total Common Stocks in the
United Kingdom 15,021,549 15,577,984 4.0
United Telecommunications 31,000 AT&T Corp. 1,749,485 1,627,500 0.4
States 70,000 Ameritech Corp. 2,996,450 3,613,750 1.0
101,800 BellSouth Corp. 2,995,024 3,690,250 1.0
120,000 Frontier Corp. 2,437,200 3,540,000 0.9
100,000 GTE Corp. 3,697,750 3,937,500 1.0
70,000 NYNEX Corp. 3,180,278 3,018,750 0.8
77,900 SBC Communications, Inc. 3,203,951 3,632,088 1.0
68,000 U S West Communications Group (c) 1,895,186 2,006,000 0.5
------------ ------------ -------
22,155,324 25,065,838 6.6
Utilities--Electric 260,000 Allegheny Power System, Inc. 6,942,850 7,702,500 2.0
207,200 Boston Edison Co. 5,530,724 4,791,500 1.3
232,962 CINergy Corp. 5,597,382 6,988,860 1.8
144,200 Consolidated Edison Co. of New York 4,802,844 3,767,225 1.0
138,900 DTE Energy Co. (d) 4,670,083 3,958,650 1.1
110,250 Dominion Resources, Inc. 4,427,302 4,120,594 1.1
156,000 Duke Power Co. 6,191,941 7,293,000 1.9
283,000 Edison International 6,379,546 4,917,125 1.3
223,300 General Public Utilities Corp. 6,908,294 7,033,950 1.9
265,200 Houston Industries, Inc. 6,491,433 5,768,100 1.5
220,800 NIPSCO Industries, Inc. 6,152,931 8,169,600 2.2
176,000 New York State Electric & Gas Corp. 6,321,697 3,784,000 1.0
180,500 PECO Energy Co. 5,532,539 4,241,750 1.1
323,000 PacifiCorp 6,465,176 6,500,375 1.7
192,000 Public Service Co. of Colorado 5,832,890 6,840,000 1.8
324,200 Southern Co. 5,858,779 7,335,025 1.9
147,300 Western Resources Co. 4,763,322 4,326,938 1.1
------------ ------------ -------
98,869,733 97,539,192 25.5
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<CAPTION>
Shares Percent of
COUNTRY Industries Held Common Stocks & Warrants Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
United Utilities--Gas 95,100 AGL Resources Inc. 1,781,042 1,925,775 0.5
States 130,000 The Brooklyn Union Gas Co. 3,371,550 3,526,250 0.9
(concluded) 226,000 The Coastal Corp. 6,038,593 8,955,250 2.3
236,000 Questar Corp. 6,554,436 8,555,000 2.2
127,300 Sonat, Inc. 3,309,934 5,617,112 1.5
------------ ------------ -------
21,055,555 28,579,387 7.4
Utilities--Water 86,000 American Water Works Co., Inc. 1,617,875 1,838,250 0.5
Total Common Stocks in the
United States 143,698,487 153,022,667 39.8
Total Investments in Common
Stocks & Warrants 300,673,460 358,621,026 93.9
Face
Amount Fixed Income Securities
Australia Telecommunications US$ 7,960,000 Telstra Corp., Ltd., 6.50% due
7/31/2003 8,115,578 7,552,050 2.0
Total Fixed-Income Securities in
Australia 8,115,578 7,552,050 2.0
Korea Telecommunications 2,500,000 Korea Telecom, 7.40% due 12/01/1999 2,499,500 2,522,250 0.7
Total Fixed-Income Securities
in Korea 2,499,500 2,522,250 0.7
United Telecommunications 3,500,000 Bell Cablemedia PLC, 11.95%*
Kingdom due 7/15/2004 2,507,041 2,616,250 0.7
Total Fixed-Income Securities in
the United Kingdom 2,507,041 2,616,250 0.7
United Telecommunications 4,000,000 Rochester Telephone Corp., 9.25%
States due 6/01/2000 4,111,200 4,272,480 1.1
Utilities-- US$4,000,000 Consumer Power Co., 8.875% due
Electric 11/15/1999 4,190,000 4,133,840 1.1
Total Fixed-Income Securities in
the United States 8,301,200 8,406,320 2.2
<PAGE>
Total Investments in Fixed-Income
Securities 21,423,319 21,096,870 5.6
Short-Term Securities
US Government 1,639,000 Federal Home Loan Mortgage Corp.,
& Agency 5.16% due 9/03/1996 1,638,295 1,638,295 0.4
Obligations** Total Investments in Short-Term
Securities 1,638,295 1,638,295 0.4
Total Investments $323,735,074 381,356,191 99.9
============
Other Assets Less Liabilities 330,205 0.1
------------ ------
Net Assets $381,686,396 100.0%
============ ======
Net Asset Class A--Based on net assets of $ 40,974,933 and 2,942,966
Value: shares outstanding $ 13.92
============
Class B--Based on net assets of $333,994,183 and 24,055,529
shares outstanding $ 13.88
============
Class C--Based on net assets of $3,071,864 and 221,567
shares outstanding $ 13.86
============
Class D--Based on net assets of $3,645,415 and 261,644
shares outstanding $ 13.93
============
<FN>
*Represents a zero coupon or step-up bond; the interest rate shown
is the effective yield at the time of the purchase by the Fund.
**Commercial Paper and certain US Government & Agency Obligations
and Foreign Government Obligations are traded on a discount basis;
the interest rates shown are the discount rates paid at the time of
purchase by the Fund.
(a)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)American Depositary Receipts (ADR).
(c)US West Inc. spun off U S West Media Group and changed its name
to US West Communications Group.
(d)Formerly Detroit Edison Co.
(e)Global Depository Receipts (GDR)
(f)Formerly Lyonnnaise des Eaux-Dumez S.A.
</TABLE>
<PAGE>
PORTFOLIO INFORMATION
Worldwide
Investments as of
8/31/96
Ten Largest Holdings Percent of
(Equity Investments) Net Assets
Veba AG 2.8%
Telecom Italia Mobile S.p.A. 2.7
Telefonica de Espana S.A. 2.6
The Australian Gas Light Co., Ltd. 2.5
Telekom Malaysia BHD 2.4
Empresa Nacional de Electricidad S.A. (ADR) 2.4
The Coastal Corp. 2.3
Distribuidora Chilectra Metropolitana S.A. (ADR) 2.3
Compagnie Generale des Eaux S.A. 2.3
Questar Corp. 2.2
Addition
Telefonica del Peru S.A. (ADR)
Deletions
London Electricity PLC
National Grid Group PLC
MCI Communications Corp.
Pacific Gas and Electric Company
