MERRILL LYNCH
GLOBAL UTILITY
FUND, INC.
[GRAPHIC OMITTED]
STRATEGIC
Performance
Quarterly Report
August 31, 1999
<PAGE>
MERRILL LYNCH GLOBAL UTILITY FUND, INC.
Sector Diversification As a Percentage of Equities as of August 31, 1999
[The following table was depicted as a pie chart in the printed material.]
Pie graph depicting the following percentages:
Telecommunications 54.8%
Utilities--Electric 30.3%
Utilities--Gas 10.4%
Utilities--Water 4.5%
Geographical Diversification As a Percentage of Equities as of August 31, 1999
[The following table was depicted as a pie chart in the printed material.]
Pie graph depicting the following percentages:
Europe 48.3%
United States 43.7%
Asia/Pacific Basin 5.9%
Americas (Ex-US) 2.1%
<PAGE>
Merrill Lynch Global Utility Fund, Inc., August 31, 1999
DEAR SHAREHOLDER
The ongoing robust US economy continued to fuel stock market optimism during the
quarter ended August 31, 1999. As a result, investors continued to focus on
non-defensive sectors. The most anticipated event during the August quarter
surrounded the August 24, 1999 meeting of the Federal Open Market Committee
(FOMC), when it was widely expected that the Federal Reserve Board would raise
interest rates by 0.25%. The FOMC did make the anticipated interest rate
increase, and the possibility of a further increase at the October FOMC meeting
still exists. The yield on the 30-year US Treasury bond rose from 5.94% three
months ago to 6.07% as of August 31, 1999, causing investors to move away from
perceived interest rate-sensitive industries. The developments were not
favorable for US utility share prices in the United States.
Investment Environment
Global utility investors fared a bit better in the August quarter as a result of
currency movements in the major markets. In terms of the value of European
utility investments, the weakening of the US dollar compared to the euro was
positive. The closing value of the euro on May 31, 1999 was US$1.0420, compared
to US$1.0566, a 1.4% increase, at the end of the August quarter. The Japanese
yen, which started the period at a rate of (Y)121.79 to the US dollar, closed
on August 31, 1999 at (Y)109.72, for a difference in value of -9.9%. There was
little change in the value of the British pound sterling for the measured
period.
The volatility in the universe of global utility equities increased during the
August quarter as the large US-based long distance telecommunications sector
came under significant pressure. Concerns resurfaced over increased competition,
commoditization of the business, and the end result of lower prices. Estimated
total returns for the three main US long distance carriers for the three-month
period ended August 31, 1999 were -21.1% for Sprint Corp., -17.9% for AT&T Corp.
and -10.1% for MCI WorldCom Inc. Merrill Lynch Global Utility Fund Inc.'s
portfolio was underweighted in this sector relative to benchmarks because of
these concerns. As of August 31, 1999, the Fund did not own Sprint, had less
than 1% of net assets invested in AT&T and held a 2.2% position in MCI WorldCom.
It appears to us that MCI WorldCom is in the lead position, with its strong
global asset base and its ability to generate growth and returns on new business
applications, using owned facilities to both existing and new customers.
The domestic electric utility sector also saw a lot of activity during the
August quarter. Seven merger/acquisition announcements came in the month of
June, with six involving combining electric and natural gas assets. Many of the
recent announcements involved smaller companies that represent a good strategic
fit. The regulatory approval process remains relatively slow for
electric-to-electric company mergers. Convergence mergers between natural gas
and electric companies tend to get completed faster as the issue of market power
becomes less significant. In fact, of the 18 mergers completed since early 1997,
10 were electric and gas acquisitions.
Currently, there are more than 20 transactions pending in the electric and
natural gas utility sector. More are expected to come, as companies need to
increase their scale to capture more of the energy market. Overall, the Fund's
holdings in the domestic electric utility sector represent a diverse group of
assets. For example, Duke Energy Corporation along with Edison International,
The Southern Company and Reliant Energy, Inc. appear to be asset gatherers in
the electric utility sector. Some of the smaller market capitalization companies
such as BEC Energy, Cinergy Corp., Allegheny Energy, Inc. and Energy East
Corporation are all takeover possibilities. The remainder of the Fund's domestic
electric portfolio may be either merger/acquisition candidates, sellers of
assets to maximize value or asset gatherers.
The Fund's investments in non US-based assets faced a challenging investment
climate filled with merger and acquisition activity. For example, Olivetti SpA
acquired Telecom Italia SpA during the August quarter. The company is expected
to announce its investment plan to become a more efficient entity sometime in
September or October. Telefonica SA has announced that it will spin-off assets
into the public market to gain great recognition for the value of the assets.
The convergence of Vodafone PLC and AirTouch Communications continues as
operations merge following the finalization of the agreement and the new name of
the company, Vodafone AirTouch PLC. British Telecommunications PLC, which has
benefited from the increased usage of mobile as well as the increased usage of
data versus voice, has seen the same phenomenon happen at other large incumbent
telephone companies across the globe. All of these companies were among the
Fund's top holdings at August 31, 1999.
Overall, the European utility sector has been an underperformer as a result of
rising interest rates. However, we believe that economic growth will accelerate
in Europe and this, in turn, should direct investor flow of funds toward this
region. We believe that in addition to positive money flows, the worldwide
consolidation trend will emerge as markets in Europe continue to liberalize.
The Fund has continued to underweight holdings in both South America and Asia as
a result of potential Year 2000 problems as well as little sign of fundamental
improvement. It is not clear if these utilities, either telecommunications or
electrics, will be ready to handle the change-off in computer systems. A
significant part of the problem is the financial crisis that occurred last year
in Asia, which may have limited funds directed to solving this issue. This
factor, coupled with the fact that in several regions uncollectibles have
increased as a result of the fundamental decline in economic growth, has
resulted in our underweighted stance in these two regions.
Portfolio Matters
During the August quarter, we made several portfolio transactions. We eliminated
four relatively small positions and reduced some overweighted holdings. One new
position was added during the quarter: shares of the initial public offering of
the Irish telecom company Bord Telecom Eirann PLC. The company, a principal
provider of fixed line and mobile telecommunications services in Ireland, offers
a wide range of advanced voice, data and multimedia services. Projections
anticipate that the Irish teledensity of only 44.5% should allow for line growth
of 7%-8% per year. We believe there is also significant room for the company to
increase efficiency.
We purchased and sold shares of Azurix Corporation during the August quarter. We
bought the shares of this global water company in an initial public offering at
a price of $19 a share and sold at an average price of $22.63 per share. We sold
the stock because of increased concern over the outcome of an upcoming
regulatory water review in the United Kingdom. The majority of Azurix's current
earnings comes from its ownership of Wessex Water, which is located in the
United Kingdom. While this news was not reflected in the company's outlook or
Wall Street earnings estimates, we believe it posed possible downside risk in
Azurix's share price.
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 next report to shareholders.
Sincerely,
/s/ Terry K. Glenn
Terry K. Glenn
President and Director
/s/ Walter D. Rogers
Walter D. Rogers
Senior Vice President and Portfolio Manager
October 1, 1999
2 & 3
<PAGE>
Merrill Lynch Global Utility Fund, Inc., August 31, 1999
PERFORMANCE DATA
About Fund Performance
Investors are able to purchase shares of the Fund through the Merrill Lynch
Select Pricing(SM) System, which offers four pricing alternatives:
o 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.
o 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
share conversions.)
o 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.
o 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 "Recent Performance Results" and
"Average Annual Total Return" 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.
Recent Performance Results*
<TABLE>
<CAPTION>
12 Month 3 Month Since Inception
As of August 31, 1999 Total Return Total Return Total Return
===================================================================================================
<S> <C> <C> <C>
ML Global Utility Fund, Inc. Class A Shares +15.28% -2.06% +197.31%
- ---------------------------------------------------------------------------------------------------
ML Global Utility Fund, Inc. Class B Shares +14.37 -2.26 +178.09
- ---------------------------------------------------------------------------------------------------
ML Global Utility Fund, Inc. Class C Shares +14.27 -2.29 + 97.58
- ---------------------------------------------------------------------------------------------------
ML Global Utility Fund, Inc. Class D Shares +14.94 -2.18 +103.07
===================================================================================================
</TABLE>
* Investment results shown do not reflect sales charges; results shown would
be lower if a sales charge was included. Total investment returns are
based on changes in net asset values for the periods shown, and assume
reinvestment of all dividends and capital gains distributions at net asset
value on the ex-dividend date. The Fund's since inception dates are from
12/28/90 for Class A & Class B Shares and from 10/21/94 for Class C &
Class D Shares.
Average Annual Total Return
% Return Without % Return With
Sales Charge Sales Charge**
================================================================================
Class A Shares*
================================================================================
Year Ended 6/30/99 +11.87% + 7.39%
- --------------------------------------------------------------------------------
Five Years Ended 6/30/99 +16.86 +15.91
- --------------------------------------------------------------------------------
Inception (12/28/90)
through 6/30/99 +14.06 +13.52
- --------------------------------------------------------------------------------
* Maximum sales charge is 4%.
** Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
================================================================================
Class B Shares*
================================================================================
Year Ended 6/30/99 +10.99% + 6.99%
- --------------------------------------------------------------------------------
Five Years Ended 6/30/99 +15.94 +15.94
- --------------------------------------------------------------------------------
Inception (12/28/90)
through 6/30/99 +13.18 +13.18
- --------------------------------------------------------------------------------
* 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 6/30/99 +10.90% + 9.90%
- --------------------------------------------------------------------------------
Inception (10/21/94)
through 6/30/99 +16.39 +16.39
================================================================================
* 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 6/30/99 +11.55% + 7.09%
- --------------------------------------------------------------------------------
Inception (10/21/94)
through 6/30/99 +17.05 +16.04
- --------------------------------------------------------------------------------
* Maximum sales charge is 4%.
** Assuming maximum sales charge.
4 & 5
<PAGE>
Merrill Lynch Global Utility Fund, Inc., August 31, 1999
SCHEDULE OF INVESTMENTS (in US dollars)
<TABLE>
<CAPTION>
Percent
Shares of Net
COUNTRY Industries Held Common Stocks & Warrants Cost Value Assets
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Australia Telecommunications 721,400 Cable & Wireless Optus Limited $ 982,720 $ 1,574,066 0.4%
--------------------------------------------------------------------------------------------------------------------
Utilities--Gas 1,239,621 Australian Gas Light Company Limited 3,540,897 8,051,140 2.2
--------------------------------------------------------------------------------------------------------------------
Total Common Stocks in Australia 4,523,617 9,625,206 2.6
====================================================================================================================================
Brazil Telecommunications 28,000 Embratel Participacoes SA (ADR) (b) 593,704 299,250 0.1
2,800 Tele Celular Sul Participacoes SA (ADR) (b) 45,069 53,200 0.0
9,333 Tele Centro Oeste Celular Participacoes SA
(ADR) (b) 28,168 31,499 0.0
5,600 Tele Centro Sul Participacoes SA (ADR) (b) 327,620 306,250 0.1
560 Tele Leste Celular Participacoes SA (ADR) (b) 15,081 14,420 0.0
1,400 Tele Nordeste Celular Participacoes SA (ADR)
(b) 20,801 34,825 0.0
560 Tele Norte Celular Participacoes SA (ADR) (b) 8,711 12,005 0.0
28,000 Tele Norte Leste Participacoes SA (ADR) (b) 431,194 448,000 0.1
5,600 Tele Sudeste Celular Participacoes SA (ADR) (b) 178,544 131,250 0.0
28,000 Telecomunicacoes Brasileiras SA--Telebras
(ADR) (b) 2,167 1,313 0.0
1,400 Telemig Celular Participacoes SA (ADR) (b) 40,736 42,000 0.0
11,200 Telesp Celular Participacoes SA (ADR) (b) 360,556 259,000 0.1
28,000 Telesp Participacoes SA (ADR) (b) 1,057,399 456,750 0.1
------------ ------------ -----
3,109,750 2,089,762 0.5
--------------------------------------------------------------------------------------------------------------------
Utilities--Electric 300,000 Companhia Paranaense de Energia--Copel (ADR)
(b) 5,400,000 2,062,500 0.6
--------------------------------------------------------------------------------------------------------------------
Total Common Stocks in Brazil 8,509,750 4,152,262 1.1
====================================================================================================================================
Denmark Telecommunications 165,900 Tele Danmark A/S (ADR) (b) 1,951,482 4,665,938 1.3
--------------------------------------------------------------------------------------------------------------------
Total Common Stocks in Denmark 1,951,482 4,665,938 1.3
====================================================================================================================================
Finland Telecommunications 18,218 Sonera Group Oyj 160,197 441,391 0.1
--------------------------------------------------------------------------------------------------------------------
Total Common Stocks in Finland 160,197 441,391 0.1
====================================================================================================================================
France Utilities--Water 165,522 Vivendi 6,147,867 12,773,609 3.5
--------------------------------------------------------------------------------------------------------------------
Total Common Stocks in France 6,147,867 12,773,609 3.5
====================================================================================================================================
Germany Telecommunications 26,779 Deutsche Telekom AG 558,513 1,184,538 0.3
6,843 Mannesmann AG 610,301 1,048,947 0.3
------------ ------------ -----
1,168,814 2,233,485 0.6
--------------------------------------------------------------------------------------------------------------------
Utilities--Electric 40,000 RWE AG 1,799,334 1,725,014 0.5
70,000 Veba AG 2,284,445 4,456,110 1.2
104,000 Viag AG 1,764,306 2,212,325 0.6
------------ ------------ -----
5,848,085 8,393,449 2.3
--------------------------------------------------------------------------------------------------------------------
Total Common Stocks in Germany 7,016,899 10,626,934 2.9
====================================================================================================================================
Hong Kong Utilities--Gas 174,300 Hong Kong and China Gas Company Ltd. 178,364 248,044 0.1
7,202 Hong Kong and China Gas Company Ltd.
(Warrants) (a) 0 315 0.0
--------------------------------------------------------------------------------------------------------------------
Total Common Stocks & Warrants in Hong Kong 178,364 248,359 0.1
====================================================================================================================================
Ireland Telecommunications 15,175 Bord Telecom Eireann PLC (ADR) (b) 242,648 274,098 0.1
--------------------------------------------------------------------------------------------------------------------
Total Common Stocks in Ireland 242,648 274,098 0.1
====================================================================================================================================
Italy Telecommunications 2,775,000 Telecom Italia Mobile (TIM) SpA 2,012,515 16,141,917 4.4
1,505,555 Telecom Italia SpA 2,746,349 15,147,119 4.2
2,891,700 Telecom Italia SpA (Registered Non-Convertible) 5,447,174 16,546,001 4.5
------------ ------------ -----
10,206,038 47,835,037 13.1
--------------------------------------------------------------------------------------------------------------------
Utilities--Electric 462,000 AEM SpA 437,927 1,004,731 0.3
--------------------------------------------------------------------------------------------------------------------
Utilities--Gas 1,786,300 Italgas SpA 5,169,953 7,411,182 2.0
--------------------------------------------------------------------------------------------------------------------
Total Common Stocks in Italy 15,813,918 56,250,950 15.4
====================================================================================================================================
Japan Telecommunications 290 Nippon Telegraph & Telephone Corporation (NTT) 2,475,448 3,258,129 0.9
--------------------------------------------------------------------------------------------------------------------
Total Common Stocks in Japan 2,475,448 3,258,129 0.9
====================================================================================================================================
Mexico Telecommunications 35,000 Telefonos de Mexico SA (ADR) (b) 1,924,311 2,603,125 0.7
--------------------------------------------------------------------------------------------------------------------
Total Common Stocks in Mexico 1,924,311 2,603,125 0.7
====================================================================================================================================
New Zealand Telecommunications 56,000 Telecom Corporation of New Zealand Limited
(ADR) (b) 1,230,138 1,995,000 0.5
--------------------------------------------------------------------------------------------------------------------
Total Common Stocks in New Zealand 1,230,138 1,995,000 0.5
====================================================================================================================================
Philippines Telecommunications 188,000 Philippine Long Distance Telephone Company
(ADR) (b) 4,077,062 4,453,250 1.2
--------------------------------------------------------------------------------------------------------------------
Total Common Stocks in the Philippines 4,077,062 4,453,250 1.2
====================================================================================================================================
Portugal Telecommunications 99,840 Portugal Telecom SA (ADR) (b) 2,283,141 4,149,600 1.1
--------------------------------------------------------------------------------------------------------------------
Utilities--Electric 80,820 EDP--Electricidade de Portugal, SA (ADR) (b) 3,540,889 2,712,521 0.8
--------------------------------------------------------------------------------------------------------------------
Total Common Stocks in Portugal 5,824,030 6,862,121 1.9
====================================================================================================================================
Spain Telecommunications 1,219,149 Telefonica SA 4,483,090 19,434,540 5.3
--------------------------------------------------------------------------------------------------------------------
Utilities--Electric 259,200 Endesa SA (ADR) (b) 2,556,672 5,216,400 1.4
138,000 Hidroelectrica del Cantabrico, SA 1,553,961 1,950,744 0.5
323,500 Iberdrola SA 2,035,162 4,644,658 1.3
------------ ------------ -----
6,145,795 11,811,802 3.2
--------------------------------------------------------------------------------------------------------------------
Total Common Stocks in Spain 10,628,885 31,246,342 8.5
====================================================================================================================================
</TABLE>
6 & 7
<PAGE>
Merrill Lynch Global Utility Fund, Inc., August 31, 1999
SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<TABLE>
<CAPTION>
Percent
Shares of Net
COUNTRY Industries Held Common Stocks & Warrants Cost Value Assets
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
United Kingdom Telecommunications 671,000 British Telecommunications PLC $ 4,688,465 $ 10,274,252 2.8%
226,062 Cable & Wireless PLC 2,882,398 2,593,347 0.7
88,000 Vodafone AirTouch PLC (ADR) (b) 2,605,300 17,649,500 4.8
------------ ------------ -----
10,176,163 30,517,099 8.3
--------------------------------------------------------------------------------------------------------------------
Utilities--Electric 208,000 National Power PLC 1,723,671 1,478,807 0.4
370,000 PowerGen PLC 2,705,142 3,694,687 1.0
------------ ------------ -----
4,428,813 5,173,494 1.4
--------------------------------------------------------------------------------------------------------------------
Total Common Stocks in the United Kingdom 14,604,976 35,690,593 9.7
====================================================================================================================================
United States Telecommunications 69,000 AT&T Corp. 1,848,510 3,105,000 0.9
140,000 Ameritech Corporation 2,996,450 8,837,500 2.4
95,232 Bell Atlantic Corporation 2,819,654 5,832,960 1.6
183,600 BellSouth Corporation 2,702,773 8,307,900 2.3
108,000 Frontier Corporation 2,193,480 4,529,250 1.2
85,000 GTE Corporation 3,145,450 5,833,125 1.6
108,000 MCI WorldCom Inc. 3,572,937 8,174,250 2.2
139,800 SBC Communications Inc. 2,939,711 6,710,400 1.8
68,000 U S WEST, Inc. 1,895,186 3,553,000 1.0
------------ ------------ -----
24,114,151 54,883,385 15.0
--------------------------------------------------------------------------------------------------------------------
Utilities--Electric 156,000 Allegheny Energy, Inc. 4,213,210 5,265,000 1.4
87,200 BEC Energy 2,722,264 3,695,100 1.0
166,962 Cinergy Corp. 4,045,124 5,071,471 1.4
84,200 Consolidated Edison, Inc. 2,991,744 3,704,800 1.0
118,900 DTE Energy Company 4,092,463 4,689,119 1.3
85,000 Duke Energy Corporation 3,180,276 4,887,500 1.3
86,000 Edison International 1,925,397 2,182,250 0.6
212,000 Energy East Corporation 3,787,564 5,300,000 1.5
90,000 FPL Group, Inc. 5,071,746 4,860,000 1.3
127,300 GPU, Inc. 4,047,821 4,344,112 1.2
124,000 New Century Energies, Inc. 3,798,642 4,479,500 1.2
239,500 NiSource Inc. 3,715,746 5,688,125 1.6
183,000 PacifiCorp. 3,657,980 3,740,062 1.0
144,200 Reliant Energy, Inc. 3,802,144 3,992,537 1.1
91,200 The Southern Company 2,022,770 2,468,100 0.7
100,000 TXU Corp. 3,506,000 4,043,750 1.1
------------ ------------ -----
56,580,891 68,411,426 18.7
--------------------------------------------------------------------------------------------------------------------
Utilities--Gas 95,000 The Coastal Corporation 1,262,602 4,114,688 1.1
80,000 Enron Corp. 1,842,108 3,350,000 0.9
130,000 KeySpan Corporation 3,371,550 3,835,000 1.0
168,000 Questar Corporation 2,475,460 3,171,000 0.9
46,300 Sonat Inc. 1,537,769 1,672,587 0.5
60,000 The Williams Companies, Inc. 1,978,230 2,475,000 0.7
------------ ------------ -----
12,467,719 18,618,275 5.1
--------------------------------------------------------------------------------------------------------------------
Utilities--Water 86,200 Philadelphia Suburban Corporation 1,869,462 1,998,762 0.5
--------------------------------------------------------------------------------------------------------------------
Total Common Stocks in the United States 95,032,223 143,911,848 39.3
====================================================================================================================================
Total Investments in Common Stocks & Warrants 180,341,815 329,079,155 89.8
====================================================================================================================================
<CAPTION>
Face
Amount Short-Term Securities
====================================================================================================================================
<S> <C> <C> <C> <C> <C>
Commercial Paper* $15,000,000 CSW Credit Inc., 5.10% due 9/08/1999 14,985,125 14,985,125 4.1
7,015,000 General Electric Capital Corp., 5.53% due
9/01/1999 7,015,000 7,015,000 1.9
15,625,000 Procter & Gamble Corporation, 5.10% due
9/01/1999 15,625,000 15,625,000 4.3
--------------------------------------------------------------------------------------------------------------------
Total Investments in Short-Term Securities 37,625,125 37,625,125 10.3
====================================================================================================================================
Total Investments $217,966,940 366,704,280 100.1
============
Liabilities in Excess of Other Assets (355,314) (0.1)
------------ -----
Net Assets $366,348,966 100.0%
============ =====
====================================================================================================================================
Net Asset Class A--Based on net assets of $38,095,957 and 2,109,670 shares outstanding $ 18.06
Value: ============
Class B--Based on net assets of $304,996,734 and 16,948,166 shares outstanding $ 18.00
============
Class C--Based on net assets of $8,913,967 and 496,901 shares outstanding $ 17.94
============
Class D--Based on net assets of $14,342,308 and 794,063 shares outstanding $ 18.06
============
====================================================================================================================================
</TABLE>
(a) Warrants entitle the Fund to purchase a predetermined number of
shares of common stock and are non-income producing. The purchase
price and number of shares are subject to adjustment under certain
conditions until the expiration date.
(b) American Depositary Receipts (ADR).
* Commercial Paper is traded on a discount basis; the interest rates
shown reflect the discount rates paid at the time of purchase by the
Fund.
8 & 9
<PAGE>
Merrill Lynch Global Utility Fund, Inc., August 31, 1999
PORTFOLIO INFORMATION
Worldwide Investments as of August 31, 1999
Ten Largest Holdings Percent of
(Equity Investments) Net Assets
Telefonica SA ...................................................... 5.3%
Vodafone AirTouch PLC (ADR) ........................................ 4.8
Telecom Italia SpA
(Registered Non-Convertible) ..................................... 4.5
Telecom Italia Mobile (TIM) SpA .................................... 4.4
Telecom Italia SpA ................................................. 4.2
Vivendi ............................................................ 3.5
British Telecommunications PLC ..................................... 2.8
Ameritech Corporation .............................................. 2.4
BellSouth Corporation .............................................. 2.3
MCI WorldCom Inc. .................................................. 2.2
Additions
* Azurix Corporation
Bord Telecom Eireann PLC (ADR)
Deletions
* Azurix Corporation
EVN AG
Fortum Corporation, the IVO-Neste Group
TECO Energy, Inc.
Telefonica SA (New Shares)
* Added and deleted in the same quarter.
OFFICERS AND DIRECTORS
Terry K. Glenn, President and Director
Ronald W. Forbes, Director
Cynthia A. Montgomery, Director
Charles C. Reilly, Director
Kevin A. Ryan, Director
Richard R. West, Director
Arthur Zeikel, Director
Robert C. Doll, Senior Vice President
Walter D. Rogers, Senior Vice President and Portfolio Manager
Donald C. Burke, Vice President and Treasurer
Ira P. Shapiro, Secretary
Custodian
The Chase Manhattan Bank, N.A.
4 MetroTech Center, 18th Floor
Brooklyn, NY 11245
Transfer Agent
Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 637-3863
10 & 11
<PAGE>
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--8/99
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