MERRILL LYNCH
GLOBAL UTILITY
FUND, INC.
[FUND LOGO]
STRATEGIC
Performance
Quarterly Report
August 31, 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
Thomas D. Jones, III, Secretary
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 #11693 -- 8/97
[RECYCLE LOGO]
Printed on post-consumer recycled paper
MERRILL LYNCH GLOBAL UTILITY FUND, INC.
[GRAPHIC PIE CHART OMITTED: SECTOR DIVERSIFICATION]
Sector
Diversification
As a Percentage of
Equities as of
August 31, 1997
Telecommunications -- 43.6%
Utilities -- Electric -- 39.1%
Utilities -- Gas -- 14.2%
Utilities -- Water -- 3.1%
[GRAPHIC PIE CHART OMITTED: GEOGRAPHICAL DIVERSIFICATION]
Geographical
Diversification
As a Percentage of
Equities as of
August 31, 1997
Europe -- 38.4%
United States -- 35.8%
Americas (Ex-US) -- 18.5%
Asia/Pacific Basin -- 7.3%
Merrill Lynch Global Utility Fund, Inc., August 31, 1997
DEAR SHAREHOLDER
During the quarter ended August 31, 1997, investor perceptions regarding
the prospects for the US economy shifted, creating greater volatility in
the stock and bond markets. As the period began, increasing evidence of
noninflationary economic growth boosted investor confidence when, as
widely expected, the Federal Reserve Board chose to leave monetary
policy unchanged at its July and August meetings. This increased
confidence was reinforced further in late July by the passage of tax-cut
and five-year balanced budget bills.
However, by late August, the consensus outlook had changed, with
forecasts of overheating growth and inflationary expectations. These
concerns were reinforced by a large upward revision in second-quarter
real gross domestic product growth from an original estimate of 2.2% to
3.6%. In contrast, employment data reported for August were weaker than
expected as the United Parcel Service strike dampened job growth.
Although there are few inflationary pressures at present, it remains to
be seen whether economic activity will continue moderate enough to rule
out future Federal Reserve Board monetary policy tightenings later this
year.
Outside of the United States, the most dramatic developments took place
in Southeast Asia. The investment boom in many developing Asian
economies came to an abrupt halt as the devaluation of the Thai baht
sparked a series of currency devaluations and financial market
volatility throughout the region. Countries have been forced to raise
interest rates to support their currencies, and this trend may continue
for some time. With higher debt-service costs, corporate profitability
is likely to erode, and lower economic growth is expected.
Portfolio Matters
For the three-month period ended August 31, 1997, Merrill Lynch Global
Utility Fund, Inc.'s Class A, Class B, Class C and Class D Shares had
total returns of -0.11%, -0.31%, -0.35% and -0.25%, respectively. The
Fund underperformed the +0.94% total return of the unmanaged Financial
Times/Standard & Poor's (FT/S&P)--Actuaries World Utility Index for the
August 31, 1997 quarter. (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.) Diverging performance continued across
various countries and regions during the August quarter as Fund
performance was principally driven by overall market movements rather
than utility industry fundamentals.
During the month of August, the economic environment was particularly
volatile both in the United States and abroad as currency problems
plagued several Asian countries. A strong US dollar, combined with
weakening exports, real estate speculation and financial leverage,
resulted in Thailand devaluing its currency. Other countries in Asia
also addressed similar issues, and their currencies and markets also
were in a state of flux as speculators dominated the stock and bond
markets. Fund performance was positively impacted by its 7% weighting in
the Asia/Pacific Basin region as compared to 15.7% for the unmanaged
FT/S&P--Actuaries World Utilities Index. The highest concentration of
Fund assets in the region was in Australia, with 3.7% of net assets,
followed by 1.5% in the Philippines. The Fund's positions in Thailand
and Indonesia remained small. In addition, at August quarter-end the
Fund had no significant holdings in Hong Kong, Singapore, Malaysia or
Japan. Aside from a potential increase in bad debt accounts, currency
devaluations may make it more expensive for companies to acquire goods
and materials abroad. This, in turn, may result in lower revenues and
profits. Thus, although valuation levels are becoming more attractive,
the assumptions behind the estimates of economic growth in Asia may
become more suspect.
The currency crisis in Asia has had a spillover effect in South America.
Brazil has been the hardest hit, in part because its market has done so
well year-to-date, coupled with concerns over its current account
position. Many economists and regional market experts continue to be
positive about the financial health of the South American countries,
particularly Brazil. The factors that resulted in the Asian currency
turmoil, with the exception of the effects of the strong US dollar, are
not evident in South American markets. Brazil has very sizable foreign
reserves, and its government is strongly committed to its currency. As
of August 31, 1997, 13.2% of the Fund's net assets was invested in South
America (excluding the 1% of net assets invested in Mexico). During the
August quarter, our largest country position in South America was Chile,
which accounted for 5.4% of net assets, followed by Brazil with 2.8% of
net assets. The relative valuations of these markets remain attractive,
and the prospects for growth and profits improvement for utilities are
better in this region than for many of the Asian markets.
European stock markets also were volatile during the three months ended
August 31, 1997, and followed the lead of the US market. However, Europe
was the best-performing region for utility investments during the
quarter. Strong performance by utility stocks in the United Kingdom and
Italy helped the Fund's overall performance. Not including the United
States, the Fund's largest country concentration was Italy, accounting
for 12% of net assets at August quarter-end. The United Kingdom was the
fourth-largest country concentration, with 4.6% of net assets. As of
August 31, 1997, approximately 38% of the Fund's net assets was invested
in Europe and 36% was invested in the United States. The performance of
these markets was a significant benefit to overall Fund performance. In
terms of the Fund's US-based utility holdings, the best-performing
sectors, according to the unmanaged Standard & Poor's Utility Index,
were natural gas and electrics, with telecommunications providing the
weakest performance. Relative to this Index, the Fund had overweighted
positions in both natural gas and electrics and was underweighted in the
telecommunications sector.
Investment Activities
During the August quarter, we eliminated six holdings, reduced our
positions in several companies and added seven new positions. We added
Companhia Paranaense de Energia (Copel), a vertically integrated
Brazilian electric utility whose concession area includes the state of
Parana. With almost all of its installed capacity being hydroelectric
and its service territory strategically located at the crossroads for
gas pipelines from Argentina, estimated earnings per share growth in the
30% area seems achievable. We purchased EDP--Electricidade de Portugal,
S.A. on the initial public offering, with the Portuguese government
selling part of its stake in the company to the public. The company is a
vertically integrated electric utility, and is the sole transmitter and
largest producer and distributor of electricity in Portugal.
During the August quarter, we also initiated small positions in two
German electric utility companies, VIAG AG and RWE AG. These companies
are positioned to benefit from upcoming changes in the German
electricity laws. In the United States, we added Texas Utilities Holding
Co. to the Fund's portfolio during the August quarter. The stock price
came under pressure as a result of the failure of the Texas Legislature
to pass a ruling on stranded costs (the difference between what a
company paid for a generating plant and the current market value of the
production from that plant). However, the company has been working
closely with the Texas Public Utility Commission and the outcome is
likely to be favorable. In the interim, the stock offers a safe and
competitive current yield, in our view. We also added two US-based
telecommunications stocks, AT&T Corporation and WorldCom, Inc. Following
a meeting with AT&T's new chief financial officer who emphasized the
company's commitment to its stated targets, coupled with the relative
underperformance of the stock, we reinstated a small position. WorldCom
is the fourth-largest facilities-based US long distance carrier. In
addition, following the acquisition of MFS Communications, the
company is also one of the largest competitive local exchange carriers.
WorldCom also owns one of the leading global Internet service providers,
UUNet. We believe that the company is well positioned to take advantage
of changes in the telecommunications sector.
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 our upcoming annual shareholder report.
Sincerely,
/S/ARTHUR ZEIKEL
Arthur Zeikel
President
/S/WALTER D. ROGERS
Walter D. Rogers
Vice President and Portfolio Manager
September 24, 1997
PERFORMANCE DATA
About Fund Performance
Investors are able to purchase shares of the Fund through the Merrill
Lynch Select PricingSM System, which offers four pricing alternatives:
[bullet] 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.
[bullet] 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.)
[bullet] 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.
[bullet] 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. Figures shown in the "Average Annual Total Return"
tables as well as the total returns and cumulative total returns in the
"Performance Summary" tables assume reinvestment of all dividends and
capital gains distributions at net asset value on the ex-dividend date.
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>
<CAPTION>
Recent
Performance
Results*
12 Month 3 Month
8/31/97 5/31/97 8/31/96 % Change % Change
<S> <C> <C> <C> <C> <C>
Class A Shares $15.58 $15.75 $13.92 +15.42%(1) -1.08%
Class B Shares 15.55 15.71 13.88 +15.54(1) -1.02
Class C Shares 15.51 15.68 13.86 +15.41(1) -1.08
Class D Shares 15.59 15.77 13.93 +15.41(1) -1.14
Class A Shares -- Total Return +19.38(2) -0.11(3)
Class B Shares -- Total Return +18.48(4) -0.31(5)
Class C Shares -- Total Return +18.37(6) -0.35(7)
Class D Shares -- Total Return +19.05(8) -0.25(9)
* 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 $0.510 per share ordinary income dividends and $0.446 per share
capital gains distributions.
(3) Percent change includes reinvestment of $0.159 per share ordinary income dividends.
(4) Percent change includes reinvestment of $0.380 per share ordinary income dividends and $0.446 per share
capital gains distributions.
(5) Percent change includes reinvestment of $0.117 per share ordinary income dividends.
(6) Percent change includes reinvestment of $0.382 per share ordinary income dividends and $0.446 per share
capital gains distributions.
(7) Percent change includes reinvestment of $0.121 per share ordinary income dividends.
(8) Percent change includes reinvestment of $0.471 per share ordinary income dividends and $0.446 per share
capital gains distributions.
(9) Percent change includes reinvestment of $0.147 per share ordinary income dividends.
</TABLE>
Average Annual
Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 6/30/97 +18.95% +14.19%
Five Years Ended 6/30/97 +13.10 +12.18
Inception (12/28/90)
through 6/30/97 +12.75 +12.05
* Maximum sales charge is 4%.
** Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 6/30/97 +18.06% +14.06%
Five Years Ended 6/30/97 +12.23 +12.23
Inception (12/28/90)
through 6/30/97 +11.89 +11.89
* 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 6/30/97 +17.99% +16.99%
Inception (10/21/94)
through 6/30/97 +15.61 +15.61
* 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 6/30/97 +18.64% +13.90%
Inception (10/21/94)
through 6/30/97 +16.26 +14.51
* Maximum sales charge is 4%.
** Assuming maximum sales charge.
<TABLE>
<CAPTION>
Performance
Summary --
Class A Shares
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 --8/31/97 14.80 15.58 -- 0.265 + 7.06
Total $0.730 Total $3.154
Cumulative total return as of 8/31/97: +111.58%**
* Figures may include short-term capital gains distributions.
** Figures do not include sales charge; results would be lower if sales charge was included.
</TABLE>
<TABLE>
<CAPTION>
Performance
Summary --
Class B Shares
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 -- 8/31/97 14.78 15.55 -- 0.193 + 6.51
Total $0.730 Total $2.517
Cumulative total return as of 8/31/97: +100.96%**
* Figures may include short-term capital gains distributions.
** Figures do not reflect deduction of any sales charge; results would be lower if sales charge was deducted.
</TABLE>
<TABLE>
<CAPTION>
Performance
Summary --
Class C Shares
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 -- 8/31/97 14.75 15.51 -- 0.198 + 6.49
Total $0.691 Total $1.101
Cumulative total return as of 8/31/97: +42.93%**
* Figures may include short-term capital gains distributions.
** Figures do not reflect deduction of any sales charge; results would be lower if sales charge was deducted.
</TABLE>
<TABLE>
<CAPTION>
Performance
Summary --
Class D Shares
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 -- 8/31/97 14.81 15.59 -- 0.244 + 6.91
Total $0.691 Total $1.301
Cumulative total return as of 8/31/97: +45.27%**
* Figures may include short-term capital gains distributions.
** Figures do not include sales charge; results would be lower if sales charge was included.
</TABLE>
<TABLE>
<CAPTION>
Merrill Lynch Global Utility Fund, Inc., August 31, 1997
SCHEDULE OF INVESTMENTS (in US dollars)
Shares Percent of
COUNTRY Industries Held Common Stocks & Warrants Cost Value Net Assets
<S> <C> <C> <C> <C> <C> <C>
Argentina Telecommunications 200,000 Telecom Argentina STET S.A.
(ADR)(b) $3,770,294 $5,525,000 1.6%
200,000 Telefonica de Argentina S.A.
(ADR)(b) 4,140,594 6,937,500 2.0
----------- ------------ -----
7,910,888 12,462,500 3.6
Utilities -- Electric 6,600 Central Costanera S.A.
(ADR)(b) 158,400 224,441 0.1
----------- ------------ -----
Total Common Stocks in Argentina 8,069,288 12,686,941 3.7
=========== ============ =====
Australia Utilities -- Gas 2,000,000 Australian Gas & Light Co., Ltd. 5,280,752 12,592,758 3.7
----------- ------------ -----
Total Common Stocks in Australia 5,280,752 12,592,758 3.7
=========== ============ =====
Austria Utilities -- Gas 41,820 Energie-Versorgung
Niederoesterreich AG (EVN) 3,050,014 5,007,295 1.5
----------- ------------ -----
Total Common Stocks in Austria 3,050,014 5,007,295 1.5
=========== ============ =====
Brazil Telecommunications 45,000 Telecomunicacoes Brasileiras
S.A. -- Telebras (ADR)(b) 2,176,897 5,310,000 1.5
Utilities -- Electric 300,000 Companhia Paranaense de Energia
(Copel) (ADR)(b) 5,400,000 4,312,500 1.3
----------- ------------ -----
Total Common Stocks in Brazil 7,576,897 9,622,500 2.8
=========== ============ =====
Canada Telecommunications 140,000 BC Telecom, Inc. 2,593,297 3,368,876 1.0
Utilities -- Electric 369,100 Nova Scotia Power Co. 3,476,309 3,829,280 1.1
Utilities -- Gas 200,000 Transcanada Pipeline Co. Ltd.
(ADR)(b) 3,147,485 3,750,000 1.1
----------- ------------ -----
Total Common Stocks in Canada 9,217,091 10,948,156 3.2
=========== ============ =====
Chile Telecommunications 162,150 Compania de Telecomunicaciones
de Chile S.A. (ADR)(b) 2,877,833 4,874,634 1.4
Utilities -- Electric 86,444 Chilgener S.A. (ADR)(b) 2,023,851 2,355,599 0.7
368,600 Distribuidora Chilectra
Metropolitana S.A. (ADR)(b) 4,011,718 11,364,749 3.3
----------- ------------ -----
6,035,569 13,720,348 4.0
----------- ------------ -----
Total Common Stocks in Chile 8,913,402 18,594,982 5.4
=========== ============ =====
Denmark Telecommunications 160,000 Tele Danmark A/S (ADR)(b) 3,764,160 4,270,000 1.2
----------- ------------ -----
Total Common Stocks in Denmark 3,764,160 4,270,000 1.2
=========== ============ =====
France Utilities -- Water 91,075 Generale des Eaux S.A. 9,841,922 10,203,017 3.0
89,715 Generale des Eaux S.A.
(Warrants)(a) 0 50,402 0.0
----------- ------------ -----
Total Common Stocks & Warrants
in France 9,841,922 10,253,419 3.0
=========== ============ =====
Germany Telecommunications 24,300 Deutsche Telekom AG 462,162 486,486 0.2
Utilities -- Electric 40,000 RWE AG 1,799,334 1,812,924 0.5
4,000 VIAG AG 1,764,306 1,667,223 0.5
70,000 Veba AG 2,284,445 3,814,926 1.1
----------- ------------ -----
5,848,085 7,295,073 2.1
----------- ------------ -----
Total Common Stocks in Germany 6,310,247 7,781,559 2.3
=========== ============ =====
Hong Kong Utilities -- Gas 100,000 The Hong Kong and China Gas Co.
Ltd. (Warrants)(a) 0 105,820 0.0
----------- ------------ -----
Total Warrants in Hong Kong 0 105,820 0.0
=========== ============ =====
Indonesia Telecommunications 5,500 P.T. Indonesian Satellite
Corp. (Indosat) (ADR)(b) 176,275 119,281 0.0
29,600 P.T. Telekomunikasi Indonesia
(Persero) (ADR)(b) 532,800 580,900 0.2
----------- ------------ -----
Total Common Stocks in Indonesia 709,075 700,181 0.2
=========== ============ =====
Italy Telecommunications 3,900,000 Telecom Italia Mobile S.p.A. 2,605,057 13,214,326 3.8
2,055,555 Telecom Italia S.p.A. 3,497,148 12,246,854 3.6
2,891,700 Telecom Italia S.p.A.
(Registered Non-Convertible) 5,447,174 10,241,780 3.0
----------- ------------ -----
11,549,379 35,702,960 10.4
Utilities -- Gas 1,786,300 Italgas Torino S.p.A. 5,169,953 5,488,887 1.6
----------- ------------ -----
Total Common Stocks in Italy 16,719,332 41,191,847 12.0
=========== ============ =====
Korea Utilities -- Electric 178,300 Korea Electric Power Corp.
(KEPCO) (ADR)(b) 3,500,925 2,908,519 0.8
----------- ------------ -----
Total Common Stocks in Korea 3,500,925 2,908,519 0.8
=========== ============ =====
Mexico Telecommunications 105,000 Telefonos de Mexico, S.A. de
C.V. (ADR)(b) 5,594,445 4,816,875 1.4
----------- ------------ -----
Total Common Stocks in Mexico 5,594,445 4,816,875 1.4
=========== ============ =====
New Zealand Telecommunications 56,000 Telecom Corporation of New
Zealand Ltd. (ADR)(b) 1,230,138 2,198,000 0.6
----------- ------------ -----
Total Common Stocks in New
Zealand 1,230,138 2,198,000 0.6
=========== ============ =====
Peru Telecommunications 195,000 Telefonica del Peru S.A. (ADR)(b) 3,997,500 4,558,125 1.3
----------- ------------ -----
Total Common Stocks in Peru 3,997,500 4,558,125 1.3
=========== ============ =====
Philippines Telecommunications 188,000 Philippine Long Distance
Telephone Co. (ADR)(b) 4,077,062 4,747,000 1.4
Utilities -- Electric 96,330 Manila Electric Co. (MERALCO) 'B' 497,246 329,634 0.1
----------- ------------ -----
Total Common Stocks in the
Philippines 4,574,308 5,076,634 1.5
=========== ============ =====
Portugal Telecommunications 205,740 Portugal Telecom, S.A. (ADR)(b) 4,576,844 7,560,945 2.2
Utilities -- Electric 10,820 EDP -- Electricidade de Portugal,
S.A. (ADR)(b) 279,589 331,363 0.1
----------- ------------ -----
Total Common Stocks in Portugal 4,856,433 7,892,308 2.3
=========== ============ =====
Spain Telecommunications 537,300 Telefonica de Espana, S.A. 6,164,064 13,967,325 4.1
Utilities -- Electric 519,200 Empresa Nacional de Electricidad,
S.A. (Endesa) (ADR)(b) 4,566,202 10,254,200 3.0
46,000 HidroElectrica Del Cantabrico,
S.A. 1,553,961 1,737,677 0.5
808,500 Iberdrola I, S.A. 4,998,321 9,098,618 2.6
----------- ------------ -----
11,118,484 21,090,495 6.1
----------- ------------ -----
Total Common Stocks in Spain 17,282,548 35,057,820 10.2
=========== ============ =====
Thailand Telecommunications 15,000 TelecomAsia Corporation Public
Co., Ltd. PLC (ADR)(b) 328,050 142,500 0.0
Utilities -- Electric 332,000 Electricity Generating Company
of Thailand (EGCOMP) 296,433 582,456 0.2
----------- ------------ -----
Total Common Stocks in Thailand 624,483 724,956 0.2
=========== ============ =====
United Kingdom Telecommunications 671,000 British Telecommunications PLC 4,688,465 4,331,681 1.2
100,000 Vodafone Group PLC (ADR)(b) 2,962,040 5,093,750 1.5
----------- ------------ -----
7,650,505 9,425,431 2.7
Utilities -- Electric 208,000 National Power PLC 1,723,671 1,902,126 0.5
370,000 PowerGen PLC 2,705,142 4,681,092 1.4
----------- ------------ -----
4,428,813 6,583,218 1.9
----------- ------------ -----
Total Common Stocks in the
United Kingdom 12,079,318 16,008,649 4.6
=========== ============ =====
United States Telecommunications 46,000 AT&T Corporation 1,848,510 1,794,000 0.5
70,000 Ameritech Corp. 2,996,450 4,388,125 1.3
47,616 Bell Atlantic Corporation+ 2,819,654 3,446,208 1.0
91,800 BellSouth Corp. 2,702,773 4,039,200 1.2
108,000 Frontier Corp. 2,193,480 2,382,750 0.7
85,000 GTE Corp. 3,145,450 3,787,813 1.1
10,046 Lucent Technologies, Inc. 493,515 782,332 0.2
69,900 SBC Communications, Inc. 2,939,711 3,800,813 1.1
68,000 U S West Communications Group 1,895,186 2,435,250 0.7
108,000 WorldCom, Inc. 3,572,937 3,233,250 0.9
----------- ------------ -----
24,607,666 30,089,741 8.7
Utilities -- Electric 156,000 Allegheny Power System, Inc. 4,213,210 4,533,750 1.3
87,200 Boston Edison Co. 2,722,264 2,463,400 0.7
166,962 CINergy Corp. 4,045,124 5,520,181 1.6
84,200 Consolidated Edison Co. of
New York 2,991,744 2,578,625 0.8
118,900 DTE Energy Co. 4,092,463 3,522,412 1.0
95,250 Dominion Resources, Inc. 3,965,452 3,429,000 1.0
85,000 Duke Energy Co. 3,180,276 4,117,187 1.2
283,000 Edison International 6,379,546 6,827,375 2.0
188,300 GPU, Inc. 5,864,594 6,331,587 1.8
75,200 Houston Industries, Inc. 1,840,708 1,522,800 0.4
184,800 NIPSCO Industries, Inc. 5,394,297 7,542,150 2.2
124,000 New Century Energies, Inc. (c) 3,798,642 5,006,500 1.5
106,000 New York State Electric & Gas Corp. 3,787,564 2,583,750 0.7
140,500 PECO Energy Co. 4,344,731 3,345,656 1.0
183,000 PacifiCorp 3,657,980 3,797,250 1.1
91,200 Southern Co. 2,022,770 1,920,900 0.6
100,000 Texas Utilities Holding Co. 3,506,000 3,487,500 1.0
----------- ------------ -----
65,807,365 68,530,023 19.9
Utilities -- Gas 130,000 The Brooklyn Union Gas Co. 3,371,550 3,924,375 1.1
102,500 The Coastal Corp. 2,726,261 5,919,375 1.7
30,000 KN Energy, Inc. 1,214,183 1,245,000 0.4
136,000 Questar Corp. 3,729,821 5,440,000 1.6
74,300 Sonat, Inc. 2,229,714 3,701,069 1.1
----------- ------------ -----
13,271,529 20,229,819 5.9
----------- ------------ -----
Total Common Stocks in the
United States 103,686,560 118,849,583 34.5
=========== ============ =====
Total Investments in Common
Stocks & Warrants 236,878,838 331,846,927 96.4
=========== ============ =====
<CAPTION>
Face
Amount Short-Term Securities
<S> <C> <C> <C> <C> <C> <C>
Commercial Paper* $9,519,000 General Motors Acceptance Corp.,
5.69% due 9/02/1997 9,514,486 9,514,486 2.8
----------- ------------ -----
Total Investments in Short-Term
Securities 9,514,486 9,514,486 2.8
============ ============ =====
Total Investments $246,393,324 341,361,413 99.2
============
Other Assets Less Liabilities 2,752,838 0.8
------------ -----
Net Assets $344,114,251 100.0%
============ =====
Net Asset Class A -- Based on net assets of $37,407,444
Value: and 2,401,106 shares outstanding $15.58
============
Class B -- Based on net assets of $295,810,801
and 19,024,779 shares outstanding $15.55
============
Class C -- Based on net assets of $5,029,154
and 324,169 shares outstanding $15.51
============
Class D -- Based on net assets of $5,866,852
and 376,260 shares outstanding $15.59
============
* Commercial Paper is traded on a discount basis; the interest rate shown is the discount rate at the
time of purchase by the Fund.
+ Reflects shares acquired in merger with NYNEX Corp.
(a) Warrants entitle the Fund to purchase a predetermined number of shares of common stocks. The purchase
price and number of shares are subject to adjustment under certain conditions until the expiration date.
(b) American Depositary Receipts (ADR).
(c) Public Service Company of Colorado merged with South Western Public Service Co. to form New Century
Energies, Inc.
</TABLE>
PORTFOLIO INFORMATION
Worldwide
Investments as of 8/31/97
Ten Largest Holdings Percent of
(Equity Investments) Net Assets
Telefonica de Espana, S.A. 4.1%
Telecom Italia Mobile S.p.A. 3.8
Australian Gas & Light Co., Ltd. 3.7
Telecom Italia S.p.A. 3.6
Distribuidora Chilectra Metropolitana
S.A. (ADR) 3.3
Empresa Nacional de Electricidad, S.A.
(Endesa) (ADR) 3.0
Telecom Italia S.p.A.
(Registered Non-Convertible) 3.0
Generale des Eaux S.A. 3.0
Iberdrola I, S.A. 2.6
Portugal Telecom, S.A. (ADR) 2.2
Additions (Equity Investments)
AT&T Corporation
Companhia Paranaense de Energia (Copel) (ADR)
EDP -- Electricidade de Portugal, S.A. (ADR)
RWE AG
Texas Utilities Holding Co.
VIAG AG
WorldCom, Inc.
Deletions (Equity Investments)
AGL Resources Inc.
American Water Works Co., Inc.
Elektrowatt AG
The Hong Kong and China Gas Co. Ltd.
Seat S.p.A.
Telecom Malaysia BHD
