MERRILL LYNCH
GLOBAL UTILITY
FUND, INC.
FUND LOGO
Quarterly Report
February 28, 1997
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
4 MetroTech Center, 18th Floor
Brooklyn, NY 11245
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.
Sector
Diversification
As a Percentage of
Equities as of
February 28, 1997
<PAGE>
A pie chart depicting the following industries:
Utilities--Electric 35.7%
Telecommunications 42.2%
Utilities--Gas 16.8%
Utilities--Water 5.3%
Geographical
Diversification
As a Percentage of
Equities as of
February 28, 1997
A pie chart depicting the following countries:
United States 36.3%
Europe 37.8%
Americas (Ex-US) 15.1%
Asia/Pacific Basin 10.8%
DEAR SHAREHOLDER
There was a relatively benign economic environment as 1996 drew to a
close, a trend which continued into the first months of 1997.
Inflation remains low, the pace of economic activity is moderate,
and trends in corporate earnings generally still appear to be
favorable, although the rate of increase in profits will probably be
slower in 1997 than in previous years.
On balance, US economic fundamentals appear to be the most positive
they have been for many years. However, the dilemma facing investors
is how long the economic expansion can continue at a steady,
noninflationary pace. At this late stage of the current economic
recovery, investor expectations can quickly change from positive to
negative with the release of surprising economic results. This
tendency was illustrated in the stock and bond market volatility
sparked by Federal Reserve Board Chairman Alan Greenspan's Humphrey-
Hawkins testimony before Congress in late February. Investors
interpreted Chairman Greenspan's comments as indicative of a
tightening in monetary policy, although stock and bond prices did
stabilize subsequently. Continued steady, noninflationary economic
growth would be very positive for the stock and bond markets in the
new year, provided that it is not accompanied by successive
preemptive moves by the Federal Reserve Board to raise interest
rates to quell potential inflationary forces.
<PAGE>
On the international front, the US dollar continued its strong
advance relative to the yen and the Deutschemark, raising concerns
about the outlook for US trade. In early February, the leading
industrialized nations expressed apparent agreement that it was time
to seek a lower dollar and less volatility in the foreign exchange
markets. It remains to be seen whether these stated intentions will
be acted upon, or if the US dollar continues to rise relative to
other major currencies.
Portfolio Matters
For the three months ended February 28, 1997, Merrill Lynch Global
Utility Fund, Inc.'s Class A, Class B, Class C and Class D Shares
provided total returns of +3.86%, +3.66%, +3.65% and +3.79%,
respectively. The Fund's returns exceeded the +2.84% total return
of Lipper Analytical Services, Inc.'s Utility Funds average for the
February quarter, as well as the +3.60% total return for the
unmanaged Financial Times/Standard & Poor's (FT/S&P)--Actuaries
World Utility Index. (Results shown do not reflect sales charges and
would be lower if sales charges were included. For complete
performance information, including average annual total returns, see
pages 4--6 of this report to shareholders.)
There were three primary factors that affected the Fund's returns
during the February quarter. First, Europe remained the second-
largest region in the Fund's portfolio holdings. Italy, Spain, the
United Kingdom and France were the four largest non-US markets in
the Fund's portfolio as of February 28, 1997. The markets with the
strongest performance in the region, according to the FT/S&P--
Actuaries World Utility Index, included the United Kingdom, Italy
and Denmark. Italy, the United States and the United Kingdom, which
accounted for approximately 49% of the Fund's net assets as of
February 28, 1997, were three of the five best-performing utility
markets for the quarter. Spain, which performed well during previous
quarters, was weak in the February quarter. This weakness was
attributed to the overhang of stock which resulted when the
government reduced its stake in Telefonica de Espana S.A. with
another public stock offering. Furthermore, concerns over rising
interest rates and tariff changes negatively affected the Spanish
electric utility sector. As the companies begin to address their
handling of the tariff cut with cost-cutting that could offset part
of the earnings impact, valuation levels may improve.
The second factor that impacted the Fund's performance was our
underweighted position in the Pacific Basin region. Japan, which is
currently at a zero weighting in the Fund, again had negative
returns. The Japanese government continued to pressure the electric
utility sector to cut costs and lower prices, but companies
continued to ward off this pressure and raised prices further.
Fundamental concerns, as well as overall market weakness, resulted
in the Japanese utility sector performing poorly. Of the nine
individual Pacific Basin markets tracked by the FT/S&P--Actuaries
World Utility Index, all had total returns less than that of the
United States.
The third factor impacting the Fund's returns for the February
quarter was the strength in the US-based utility stocks. The
strongest performance came from the telecommunications sector
followed by the electric sector. The natural gas sector, which was a
strong performer in 1996, showed signs of weakness in the February
quarter. While there was no further news during the quarter to
warrant such strong performance from the domestic telecommunications
sector, the group's current yield remained relatively attractive
compared to the current yield of the overall stock market. This
factor, coupled with double-digit reported earnings gains for
calendar year 1996 for several of the larger companies, resulted in
investors bidding up the stock prices in the sector. On a relative
basis, the Fund went to an underweighted position in the domestic
telecommunications sector last year. Our position reflected our
concern about the implementation of the 1996 Telecommunications Act
and increasing competition, two factors that are still overhanging
the group. Moreover, while the earnings trend was quite positive for
several of the larger telephone companies, there were signs of
slowing in the core business and rising expenditures during the
fourth quarter of 1996. Valuation levels are at neither historical
lows or highs for the telephone sector. The stock price performance
of the group also continues to be influenced by the change in the
yield on the 30-year US Treasury bond. As a result of these factors,
the domestic telecommunications sector may remain volatile during
the upcoming quarters.
The domestic electric sector, in which the Fund has a relative
overweighted position, had modestly negative price performance but
positive results on a total return basis. Regulators around the
country continued to review plans for opening up markets for
competition and the handling of electric plants that may no longer
be cost effective in a competitive environment. The Nuclear
Regulatory Commission (NRC) showed signs of becoming tougher on
companies in the enforcement of policy during the quarter. While it
is too early to gauge the long-term implications of recent NRC
actions, or if they are only company-specific, investors may be
facing a more proactive regulatory body with the potential to
influence stock price performance in the sector. The Fund was not
invested in Unicom Corp., which came under attack from the NRC
during the February quarter, nor do we hold Northeast Utilities Co.
which also has come under NRC scrutiny.
The domestic natural gas sector, where the Fund has an above-average
weighting, was the weakest domestic utility sector in the February
quarter. The weakness was attributed to profit-taking by investors
following strong performance in previous quarters, warmer weather
and pricing concerns. Stock price performance from this sector may
remain somewhat flat until investors again focus on industry
consolidation and valuation levels. Furthermore, as we move into
summer, the focus will once again be on storage levels and demand
expectations for the upcoming winter.
<PAGE>
Investment Activities
During the three months ended February 28, 1997, we eliminated two
holdings, reduced our positions in nine companies, and added one new
position. The reductions were primarily made in our domestic
electric utility holdings and one gas company. The two eliminations
were Western Resources Co. and NCR Corp. which we received as a spin-
off from AT&T Corp. The new position initiated during the quarter
was KN Energy, Inc., a natural gas services provider primarily in
the Rocky Mountain, mid-continent and Texas areas. The estimated
annual earnings per share growth rate for the company is 15%,
current valuation levels are attractive, and the company increases
its dividend on a regular basis.
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 upcoming shareholder reports.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Walter D. Rogers)
Walter D. Rogers
Vice President and Portfolio Manager
April 1, 1997
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
2/28/97 11/30/96 2/29/96 % Change % Change
<S> <C> <C> <C> <C> <C>
Class A Shares $15.08 $15.09 $13.97 +11.32%(1) +3.05%(1)
Class B Shares 15.04 15.05 13.92 +11.42(1) +3.06(1)
Class C Shares 15.02 15.03 13.91 +11.36(1) +3.06(1)
Class D Shares 15.09 15.10 13.98 +11.31(1) +3.05(1)
Class A Shares--Total Return +15.46(2) +3.86(3)
Class B Shares--Total Return +14.59(4) +3.66(5)
Class C Shares--Total Return +14.53(6) +3.65(7)
Class D Shares--Total Return +15.14(8) +3.79(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 $0.446 per share capital
gains distributions.
(2)Percent change includes reinvestment of $0.525 per share ordinary
income dividends and $0.446 per share capital gains distributions.
(3)Percent change includes reinvestment of $0.115 per share ordinary
income dividends and $0.446 per share capital gains distributions.
(4)Percent change includes reinvestment of $0.402 per share ordinary
income dividends and $0.446 per share capital gains distributions.
(5)Percent change includes reinvestment of $0.086 per share ordinary
income dividends and $0.446 per share capital gains distributions.
(6)Percent change includes reinvestment of $0.403 per share ordinary
income dividends and $0.446 per share capital gains distributions.
(7)Percent change includes reinvestment of $0.084 per share ordinary
income dividends and $0.446 per share capital gains distributions.
(8)Percent change includes reinvestment of $0.488 per share ordinary
income dividends and $0.446 per share capital gains distributions.
(9)Percent change includes reinvestment of $0.106 per share ordinary
income dividends and $0.446 per share capital gains distributions.
</TABLE>
Average Annual
Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 12/31/96 +14.22% + 9.65%
Five Years Ended 12/31/96 +11.46 +10.56
Inception (12/28/90)
through 12/31/96 +12.00 +11.25
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 12/31/96 +13.34% + 9.34%
Five Years Ended 12/31/96 +10.61 +10.61
Inception (12/28/90)
through 12/31/96 +11.14 +11.14
[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 % Return
Without CDSC With CDSC**
Class C Shares*
Year Ended 12/31/96 +13.21% +12.21%
Inception (10/21/94)
through 12/31/96 +14.35 +14.35
[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 12/31/96 +13.66% + 9.11%
Inception (10/21/94)
through 12/31/96 +14.99 +12.88
[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
1996 13.86 14.80 0.446 0.525 +14.22
1/1/97--2/28/97 14.80 15.08 -- -- + 1.89
------ ------
Total $0.730 Total $2.889
Cumulative total return as of 2/28/97:+101.36%**
<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>
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
1996 13.83 14.78 0.446 0.402 +13.34
1/1/97--2/28/97 14.78 15.04 -- -- + 1.76
------ ------
Total $0.730 Total $2.324
Cumulative total return as of 2/28/97:+91.99%**
<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
1996 13.82 14.75 0.446 0.403 +13.21
1/1/97--2/28/97 14.75 15.02 -- -- + 1.83
------ ------
Total $0.691 Total $0.903
Cumulative total return as of 2/28/97:+36.68%**
<PAGE>
<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
1996 13.90 14.81 0.446 0.488 +13.66
1/1/97--2/28/97 14.81 15.09 -- -- + 1.89
------ ------
Total $0.691 Total $1.057
Cumulative total return as of 2/28/97:+38.45%**
<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 $ 4,812,500 1.3%
200,000 Telefonica de Argentina S.A. (ADR)(b) 4,140,594 6,325,000 1.7
------------ ------------ ------
7,910,888 11,137,500 3.0
Utilities--Electric 6,600 Central Costanera S.A. (ADR)(b) 158,400 217,800 0.1
Total Common Stocks in Argentina 8,069,288 11,355,300 3.1
<PAGE>
Australia Utilities--Gas 2,000,000 Australian Gas & Light Co., Ltd. 5,280,752 11,436,766 3.1
Total Common Stocks in Australia 5,280,752 11,436,766 3.1
Austria Utilities--Gas 41,820 Energie-Versorgung Niederoesterreich
AG (EVN) 3,050,015 6,156,315 1.6
Total Common Stocks in Austria 3,050,015 6,156,315 1.6
Brazil Telecommunications 45,000 Telecomunicacoes Brasileiras
S.A.--Telebras (ADR)(b) 2,176,897 4,365,000 1.2
Total Common Stocks in Brazil 2,176,897 4,365,000 1.2
Canada Telecommunications 140,000 BC Telecom, Inc. 2,593,297 3,063,525 0.8
Utilities--Electric 369,100 Nova Scotia Power Co. 3,476,309 3,822,281 1.0
Utilities--Gas 200,000 Transcanada Pipeline Co. Ltd. (ADR) (b) 3,147,485 3,675,000 1.0
Total Common Stocks in Canada 9,217,091 10,560,806 2.8
Chile Telecommunications 216,750 Compania de Telecomunicaciones de
Chile S.A. (ADR)(b) 3,711,460 6,339,938 1.7
Utilities--Electric 65,000 Chilgener S.A. (ADR)(b) 1,495,000 1,641,250 0.5
156,000 Distribuidora Chilectra Metropolitana
S.A. (ADR)(b) 4,249,463 10,140,000 2.7
------------ ------------ ------
5,744,463 11,781,250 3.2
Total Common Stocks in Chile 9,455,923 18,121,188 4.9
Denmark Telecommunications 160,000 Tele Danmark A/S (ADR)(b) 3,764,160 4,240,000 1.1
Total Common Stocks in Denmark 3,764,160 4,240,000 1.1
France Utilities--Water 89,715 Generale des Eaux S.A. 9,668,083 12,484,688 3.4
40,000 Lyonnaise des Eaux S.A. 3,989,365 4,085,286 1.1
Total Common Stocks in France 13,657,448 16,569,974 4.5
<PAGE>
Germany Telecommunications 24,300 Deutsche Telekom AG 462,162 467,584 0.1
Utilities--Electric 140,000 Veba AG 4,568,890 8,007,105 2.2
Total Common Stocks in Germany 5,031,052 8,474,689 2.3
</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 and China Gas Co. Ltd. $ 1,627,410 $ 2,278,128 0.6%
100,000 The Hong Kong and China Gas Co. Ltd.
(Warrants)(a) 0 49,721 0.0
Total Common Stocks & Warrants in
Hong Kong 1,627,410 2,327,849 0.6
Indonesia Telecommunications 5,500 PT Indonesian Satellite Corp.
(Indosat) (ADR)(b) 176,275 158,125 0.0
29,600 PT Telekomunikasi Indonesia
(Persero) (ADR)(b) 532,800 1,017,500 0.3
Total Common Stocks in Indonesia 709,075 1,175,625 0.3
Italy Telecommunications 2,891,700 Seat S.p.A.++ 804,760 669,070 0.2
2,891,700 Societa Finanziara Telefonica
S.p.A. (STET) 5,447,174 10,113,053 2.7
3,900,000 Telecom Italia Mobile S.p.A. 2,605,057 10,212,203 2.8
3,700,000 Telecom Italia S.p.A 3,497,148 8,692,282 2.3
------------ ------------ ------
12,354,139 29,686,608 8.0
Utilities--Gas 1,786,300 Italgas Torino S.p.A. 5,169,953 6,368,733 1.7
Total Common Stocks in Italy 17,524,092 36,055,341 9.7
Korea Utilities--Electric 114,200 Korea Electric Power Corp.
(KEPCO) (ADR)(b) 2,298,275 2,055,600 0.6
Total Common Stocks in Korea 2,298,275 2,055,600 0.6
Malaysia Telecommunications 860,000 Telekom Malaysia BHD 6,389,867 6,963,142 1.9
<PAGE>
Total Common Stocks in Malaysia 6,389,867 6,963,142 1.9
Mexico Telecommunications 105,000 Telefonos de Mexico, S.A. de
C.V. (ADR)(b) 5,594,445 4,081,875 1.1
Total Common Stocks in Mexico 5,594,445 4,081,875 1.1
New Telecommunications 89,000 Telecom Corporation of New Zealand
Zealand Ltd. (ADR)(b) 3,564,658 6,430,250 1.7
Total Common Stocks in New Zealand 3,564,658 6,430,250 1.7
Peru Telecommunications 195,000 Telefonica del Peru S.A. (ADR)(b) 3,997,500 4,290,000 1.2
Total Common Stocks in Peru 3,997,500 4,290,000 1.2
Philippines Telecommunications 94,000 Philippine Long Distance Telephone
Co. (ADR)(b) 4,077,062 5,452,000 1.5
Utilities--Electric 74,100 Manila Electric Co. (MERALCO) 'B' 497,246 588,856 0.1
Total Common Stocks in the Philippines 4,574,308 6,040,856 1.6
Portugal Telecommunications 205,740 Portugal Telecom, S.A. (ADR)(b) 4,576,844 7,175,182 1.9
Total Common Stocks in Portugal 4,576,844 7,175,182 1.9
Spain Telecommunications 537,300 Telefonica de Espana S.A. 6,164,064 12,373,273 3.3
Utilities--Electric 129,800 Empresa Nacional de Electricidad,
S.A. (ADR)(b) 4,566,202 7,966,475 2.1
92,000 HidroElectrica Del Cantabrico, S.A. 3,107,921 3,139,428 0.9
808,500 Iberdrola I S.A. 4,998,321 8,829,745 2.4
------------ ------------ ------
12,672,444 19,935,648 5.4
Total Common Stocks in Spain 18,836,508 32,308,921 8.7
Switzerland Utilities-- Electric 4,300 Elektrowatt AG 1,687,158 1,547,790 0.4
Total Common Stocks in Switzerland 1,687,158 1,547,790 0.4
<PAGE>
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) 296,433 839,938 0.2
Total Common Stocks in Thailand 624,483 1,094,938 0.3
United Telecommunications 671,000 British Telecommunications PLC 4,688,465 4,646,683 1.2
Kingdom 180,000 Vodafone Group PLC (ADR)(b) 5,355,931 8,550,000 2.3
------------ ------------ ------
10,044,396 13,196,683 3.5
Utilities-- Electric 208,000 National Power PLC 1,723,671 1,672,289 0.5
445,000 PowerGen PLC 3,253,482 4,504,757 1.2
------------ ------------ ------
4,977,153 6,177,046 1.7
Total Common Stocks in the
United Kingdom 15,021,549 19,373,729 5.2
United Telecommunications 31,000 AT&T Corp. 1,196,806 1,236,125 0.3
States 70,000 Ameritech Corp. 2,996,450 4,462,500 1.2
91,800 BellSouth Corp. 2,702,773 4,303,125 1.2
108,000 Frontier Corp. 2,193,480 2,389,500 0.6
85,000 GTE Corp. 3,145,450 3,973,750 1.1
10,046 Lucent Technologies, Inc. 493,515 541,228 0.1
62,000 NYNEX Corp. 2,819,654 3,193,000 0.9
69,900 SBC Communications, Inc. 2,939,711 4,019,250 1.1
68,000 U S West Communications Group 1,895,186 2,448,000 0.7
------------ ------------ ------
20,383,025 26,566,478 7.2
Utilities--Electric 156,000 Allegheny Power System, Inc. 4,213,210 4,777,500 1.3
87,200 Boston Edison Co. 2,722,264 2,332,600 0.6
166,962 CINergy Corp. 4,045,124 5,760,189 1.6
84,200 Consolidated Edison Co. of New York 2,991,744 2,599,675 0.7
118,900 DTE Energy Co. 4,092,463 3,596,725 1.0
95,250 Dominion Resources, Inc. 3,965,452 3,833,812 1.0
85,000 Duke Power Co. 3,180,276 3,761,250 1.0
283,000 Edison International 6,379,546 6,084,500 1.6
188,300 GPU, Inc. 5,864,594 6,590,500 1.8
231,200 Houston Industries, Inc. 5,659,198 5,375,400 1.4
184,800 NIPSCO Industries, Inc. 5,394,297 7,368,900 2.0
159,000 New York State Electric & Gas Corp. 5,705,686 3,696,750 1.0
140,500 PECO Energy Co. 4,344,731 3,161,250 0.9
183,000 PacifiCorp 3,657,980 3,774,375 1.0
124,000 Public Service Co. of Colorado 3,798,642 4,836,000 1.3
91,200 Southern Co. 2,022,770 1,983,600 0.5
------------ ------------ ------
68,037,977 69,533,026 18.7
</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 $ 1,854,450 0.5%
States 130,000 The Brooklyn Union Gas Co. 3,371,550 3,705,000 1.0
(concluded) 185,500 The Coastal Corp. 4,952,363 8,440,250 2.3
4,500 KN Energy, Inc. 175,770 177,750 0.0
236,000 Questar Corp. 6,554,436 8,555,000 2.3
127,300 Sonat, Inc. 3,309,934 5,855,800 1.6
------------ ------------ ------
20,145,095 28,588,250 7.7
Utilities--Water 86,000 American Water Works Co., Inc. 1,617,875 2,010,250 0.5
Total Common Stocks in the
United States 110,183,972 126,698,004 34.1
Total Investments in Common
Stocks & Warrants 256,912,770 348,899,140 93.9
Face
Amount Fixed-Income Securities
Australia Telecommu- US$ 7,960,000 Telstra Corp., Ltd., 6.50% due
nications 7/31/2003 8,115,578 7,812,820 2.1
Total Fixed-Income Securities
in Australia 8,115,578 7,812,820 2.1
Korea Telecommu- 2,500,000 Korea Telecom, 7.40% due 12/01/1999 2,499,500 2,540,925 0.7
nications
Total Fixed-Income Securities in
Korea 2,499,500 2,540,925 0.7
United Telecommu- 4,000,000 Rochester Telephone Corp., 9.25% due
States nications 6/01/2000 4,111,200 4,285,200 1.1
Utilities-- 4,000,000 Consumer Power Co., 8.875% due
Electric 11/15/1999 4,190,000 4,152,680 1.1
<PAGE>
Total Fixed-Income Securities in the
United States 8,301,200 8,437,880 2.2
Total Investments in Fixed-Income
Securities 18,916,278 18,791,625 5.0
Short-Term Securities
US Government 3,990,000 Federal Home Loan Mortgage Corp., 5.30%
Agency Obligations* due 3/03/1997 3,988,825 3,988,825 1.1
Total Investments in Short-Term
Securities 3,988,825 3,988,825 1.1
Total Investments $279,817,873 371,679,590 100.0
============
Liabilities in Excess of Other Assets (8,435) (0.0)
------------ ------
Net Assets $371,671,155 100.0%
============ ======
Net Asset Class A--Based on net assets of $39,309,152 and
Value: 2,606,079 shares outstanding $ 15.08
============
Class B--Based on net assets of $323,562,893 and
21,508,846 shares outstanding $ 15.04
============
Class C--Based on net assets of $3,671,444 and
244,461 shares outstanding $ 15.02
============
Class D--Based on net assets of $5,127,666 and
339,700 shares outstanding $ 15.09
============
<FN>
*Certain US Government Agency Obligations are traded on a discount
basis; the interest rate shown is the discount rate 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).
++Acquired through a spin-off of Societa Finanziara Telefonica
S.p.A. (STET) in the February quarter.
</TABLE>
<PAGE>
PORTFOLIO INFORMATION
Worldwide
Investments as of
2/28/97
Ten Largest Holdings Percent of
(Equity Investments) Net Assets
Generale des Eaux S.A. 3.4%
Telefonica de Espana S.A. 3.3
Australian Gas & Light Co., Ltd. 3.1
Telecom Italia Mobile S.p.A. 2.8
Distribuidora Chilectra Metropolitana S.A. (ADR) 2.7
Societa Finanziara Telefonica S.p.A. (STET) 2.7
Iberdrola I S.A. 2.4
Telecom Italia S.p.A 2.3
Questar Corp. 2.3
Vodafone Group PLC (ADR) 2.3
Addition (Equity Investments)
KN Energy, Inc.
Deletions (Equity Investments)
NCR Corp.++
Western Resources Co.
[FN]
++Acquired through a spin-off of AT&T Corp. in the February quarter.
