MERRILL LYNCH
GLOBAL UTILITY
FUND, INC.
[GRAPHIC OMITTED]
STRATEGIC
Performance
Semi-Annual Report
May 31, 2000
<PAGE>
MERRILL LYNCH GLOBAL UTILITY FUND, INC.
[GRAPHIC OMITTED]
A pie graph depicting Sector Diversification As a percentage of Equities as of
May 31, 2000.
Sector Telecommunications 41.1%
Diversification Utilities--Electric 41.4%
As a Percentage of Utilities--Gas 16.7%
Equities as of Utilities--Water 0.8%
May 31, 2000
[GRAPHIC OMITTED]
A pie graph depicting Geographical Diversification As a Percentage of Equities
as of May 31, 2000.
Geographical Europe 22.0%
Diversification Asia/Pacific Basin 5.6%
As a Percentage of Americas (Ex-US) 5.5%
Equities as of United States 66.9%
May 31, 2000
<PAGE>
DEAR SHAREHOLDER
For the six-month period ended May 31, 2000, Merrill Lynch Global Utility Fund,
Inc.'s Class A, Class B, Class C and Class D Shares had total returns of +5.99%,
+5.59%, +5.59% and +5.85%, respectively. (Investment results shown do not
reflect sales charges and would be lower if sales charges were included. For
complete performance information, see pages 4 and 5 of this report to
shareholders.) These results compared favorably to the total return for the
Lipper Utility Fund average of +5.58%.
During the past six months, we changed the composition of the Fund's equity
holdings. At the end of the Fund's fiscal year, November 30, 1999, approximately
35% of the Fund's net assets were invested in US-based utilities and 62% in non
US-based utility stocks. However, as of May 31, 2000, nearly 56% of the Fund's
net assets were invested in US-based utilities compared to 27.5% in foreign
utility stocks. More specifically, we reduced our exposure to European
utilities, particularly large incumbent vertically integrated telecommunications
companies. We have also added to our domestic utility holdings, primarily in the
electric and natural gas sectors.
Several factors led to this shift in the Fund's portfolio. Strength in the
European telecommunications sector resulted in a large disparity in valuation
levels between US and non US-based telecommunication stocks. The bidding for
spectrum in Europe for the next generation in cellular technology is ongoing and
proving to be initially very expensive. There is more than $50 billion in stock
value coming to the market as a result of continued privatizations and the
spinning off of assets from some of the incumbent telephone companies in the
hope of realizing higher valuations. Lastly, the consolidation theme appears to
have slowed as several announcements have resulted in no transactions.
Further additions to our holdings in the domestic electric and natural gas
sectors resulted in part from taking a more defensive investment position in a
period of stock market volatility. Moreover, valuation and fundamentals were
also attractive. The domestic electric sector, which significantly
underperformed in calendar 1999, was trading at historic low valuation levels.
With the focus shifting to the growth potential and asset valuation of
non-regulated assets, there was a catalyst for possible upside in stock prices.
Second, we have begun to see new interest in the sector from investors such as
Warren Buffet and Kohlberg, Kravis and Roberts & Co.
The domestic natural gas sector is a beneficiary of high demand for natural gas
and low storage levels. The net result is that the price of natural gas has
risen sharply. The demand by electric companies for natural gas has also risen
as a result of environmental concerns as well as the increased usage of
generation plants that are used solely for peaking periods.
The Fund has retained a significant position in the cellular/wireless
telecommunications sector both overseas and in the United States. The continuing
improvement in quality, longer battery life, one distance pricing and high
consumer demand bodes well for the future of this industry. Furthermore, access
to the Internet via the cellular phone should result in higher usage and more
revenues for the companies.
Lastly, we added new positions in the independent power producer market and
emerging telecommunications. Independent power producers are beneficiaries of a
more competitive electric generating market as their plants tend to be newer and
therefore more efficient. The emerging telecom sector, which was strong in the
beginning of 2000, was negatively affected with the sell-off in the National
Association of Securities Dealers Automated Quotations. Consequently, it became
an attractive investment opportunity. The sector benefits from the continued
upward demand for communications services driven by the Internet and customers'
need to interact. The equipment that they use is usually more technologically
advanced than some of the larger incumbent telephone companies and this provides
a service and cost advantage for the sector.
In Conclusion
On March 31, 2000, the Fund's Board of Directors approved a plan of
reorganization, subject to shareholder approval and certain other conditions,
whereby the Fund would acquire substantially all of the assets and liabilities
of Merrill Lynch Utility Income Fund, Inc. in exchange for newly issued shares
of the Fund. These Funds are registered, diversified, open-end management
investment companies. Both entities are managed by Merrill Lynch Asset
Management, L.P. Upon completion of the reorganization plan, the Fund will
change its name to Merrill Lynch Utilities and Telecommunications Fund, Inc.
We appreciate your investment in Merrill Lynch Global Utility Fund, Inc., and we
look forward to serving your investment needs in the months and years ahead.
Sincerely,
/s/ Terry K. Glenn
Terry K. Glenn
President and Director
/s/ Walter D. Rogers
Walter D. Rogers
Senior Vice President and
Portfolio Manager
June 23, 2000
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, Jr., 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
2 & 3
<PAGE>
Merrill Lynch Global Utility Fund, Inc., May 31, 2000
PERFORMANCE DATA
About Fund Investors are able to purchase shares of the Fund through the
Performance Merrill Lynch Select PricingSM 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.
Average Annual
Total Return
% Return Without % Return With
Sales Charge Sales Charge**
================================================================================
Class A Shares*
================================================================================
Year Ended 3/31/00 +22.96% +18.05%
--------------------------------------------------------------------------------
Five Years Ended 3/31/00 +20.22 +19.24
--------------------------------------------------------------------------------
Inception (12/28/90)
through 3/31/00 +14.89 +14.39
--------------------------------------------------------------------------------
* Maximum sales charge is 4%.
** Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
================================================================================
Class B Shares*
================================================================================
Year Ended 3/31/00 +21.99% +17.99%
--------------------------------------------------------------------------------
Five Years Ended 3/31/00 +19.28 +19.28
--------------------------------------------------------------------------------
Inception (12/28/90)
through 3/31/00 +14.01 +14.01
--------------------------------------------------------------------------------
* 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 3/31/00 +21.88% +20.88%
--------------------------------------------------------------------------------
Five Years Ended 3/31/00 +19.23 +19.23
--------------------------------------------------------------------------------
Inception (10/21/94)
through 3/31/00 +17.37 +17.37
--------------------------------------------------------------------------------
* 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 3/31/00 +22.66% +17.75%
--------------------------------------------------------------------------------
Five Years Ended 3/31/00 +19.87 +18.90
--------------------------------------------------------------------------------
Inception (10/21/94)
through 3/31/00 +18.04 +17.16
--------------------------------------------------------------------------------
* Maximum sales charge is 4%.
** Assuming maximum sales charge.
Recent
Performance
Results*
<TABLE>
<CAPTION>
6 Month 12 Month Since Inception
As of May 31, 2000 Total Return Total Return Total Return
=========================================================================================
<S> <C> <C> <C>
ML Global Utility Fund, Inc. Class A Shares +5.99% +10.80% +236.36%
-----------------------------------------------------------------------------------------
ML Global Utility Fund, Inc. Class B Shares +5.59 + 9.95 +212.84
-----------------------------------------------------------------------------------------
ML Global Utility Fund, Inc. Class C Shares +5.59 + 9.91 +122.27
-----------------------------------------------------------------------------------------
ML Global Utility Fund, Inc. Class D Shares +5.85 +10.51 +129.41
=========================================================================================
</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.
PORTFOLIO INFORMATION
As of May 31, 2000
Ten Largest Holdings Percent of
(Equity Investments) Net Assets
Telecom Italia SpA* .......................................... 3.2%
SBC Communications Inc. ...................................... 3.0
FPL Group, Inc. .............................................. 2.6
BellSouth Corporation ........................................ 2.5
El Paso Energy Corporation ................................... 2.4
Edison International ......................................... 2.3
The Williams Companies, Inc. ................................. 2.3
Vodafone AirTouch PLC (ADR) .................................. 2.2
The Southern Company ......................................... 2.0
British Telecommunications PLC ............................... 1.8
* Includes combined holdings.
4 & 5
<PAGE>
Merrill Lynch Global Utility Fund, Inc., May 31, 2000
SCHEDULE OF INVESTMENTS (in US dollars)
<TABLE>
<CAPTION>
Shares Percent of
COUNTRY Industries Held Common Stocks Value Net Assets
====================================================================================================================================
<S> <C> <C> <C> <C> <C>
Australia Telecommunications 721,400 + Cable & Wireless Optus Limited $ 1,971,366 0.6%
-------------------------------------------------------------------------------------------------------------------
Utilities--Gas 848,724 Australian Gas Light Company Limited 4,420,719 1.3
-------------------------------------------------------------------------------------------------------------------
Total Common Stocks in Australia 6,392,085 1.9
====================================================================================================================================
Bermuda Telecommunications 221,400 + Global Crossing Ltd. 5,548,837 1.6
-------------------------------------------------------------------------------------------------------------------
Total Common Stocks in Bermuda 5,548,837 1.6
====================================================================================================================================
Brazil Telecommunications 28,000 Embratel Participacoes SA (ADR) (a) 586,250 0.2
2,800 Tele Celular Sul Participacoes SA (ADR) (a) 94,850 0.0
9,333 Tele Centro Oeste Celular Participacoes SA
(ADR) (a) 95,080 0.0
5,600 Tele Centro Sul Participacoes SA (ADR) (a) 336,000 0.1
560 Tele Leste Celular Participacoes SA (ADR) (a) 22,470 0.0
1,400 Tele Nordeste Celular Participacoes SA (ADR) (a) 74,200 0.0
560 Tele Norte Celular Participacoes SA (ADR) (a) 25,760 0.0
31,278 Tele Norte Leste Participacoes SA (ADR) (a) 613,831 0.2
5,600 Tele Sudeste Celular Participacoes SA (ADR) (a) 240,800 0.1
28,000 + Telecomunicacoes Brasileiras SA--Telebras
(ADR) (a) 438 0.0
1,400 Telemig Celular Participacoes SA (ADR) (a) 81,288 0.0
11,200 Telesp Celular Participacoes SA (ADR) (a) 424,200 0.2
28,000 Telesp Telecomunicacoes de Sao Paulo SA 710,500 0.2
-------------------------------------------------------------------------------------------------------------------
Total Common Stocks in Brazil 3,305,667 1.0
====================================================================================================================================
Canada Telecommunications 30,000 BCE Inc. 690,000 0.2
47,112 Nortel Networks Corporation 2,558,748 0.8
-------------------------------------------------------------------------------------------------------------------
Total Common Stocks in Canada 3,248,748 1.0
====================================================================================================================================
Denmark Telecommunications 135,900 Tele Danmark A/S (ADR) (a) 4,781,981 1.4
-------------------------------------------------------------------------------------------------------------------
Total Common Stocks in Denmark 4,781,981 1.4
====================================================================================================================================
Finland Telecommunications 33,000 Nokia Oyj `A' (ADR) (a) 1,716,000 0.5
118,218 Sonera Oyj 5,953,201 1.8
-------------------------------------------------------------------------------------------------------------------
Total Common Stocks in Finland 7,669,201 2.3
====================================================================================================================================
Germany Telecommunications 20,000 Mannesmann AG 5,174,892 1.5
-------------------------------------------------------------------------------------------------------------------
Utilities--Electric 104,000 Viag AG 2,117,069 0.6
-------------------------------------------------------------------------------------------------------------------
Total Common Stocks in Germany 7,291,961 2.1
====================================================================================================================================
Hong Kong Telecommunications 20,900 + China Telecom (Hong Kong) Limited (ADR) (a) 3,072,300 0.9
-------------------------------------------------------------------------------------------------------------------
Utilities--Electric 232,000 CLP Holdings Limited 1,077,823 0.3
-------------------------------------------------------------------------------------------------------------------
Utilities--Gas 201,320 Hong Kong and China Gas Company Ltd. 218,321 0.1
-------------------------------------------------------------------------------------------------------------------
Total Common Stocks in Hong Kong 4,368,444 1.3
====================================================================================================================================
Italy Telecommunications 243,000 Telecom Italia SpA 3,335,301 1.0
1,191,700 Telecom Italia SpA (Registered Non-Convertible) 7,349,464 2.2
-------------------------------------------------------------------------------------------------------------------
Total Common Stocks in Italy 10,684,765 3.2
====================================================================================================================================
Japan Telecommunications 290 Nippon Telegraph & Telephone Corporation (NTT) 3,447,411 1.0
-------------------------------------------------------------------------------------------------------------------
Total Common Stocks in Japan 3,447,411 1.0
====================================================================================================================================
Mexico Telecommunications 70,000 Telefonos de Mexico SA (ADR) (a) 3,408,125 1.0
-------------------------------------------------------------------------------------------------------------------
Total Common Stocks in Mexico 3,408,125 1.0
====================================================================================================================================
New Zealand Telecommunications 56,000 Telecom Corporation of New Zealand Limited
(ADR) (a) 1,561,000 0.5
-------------------------------------------------------------------------------------------------------------------
Total Common Stocks in New Zealand 1,561,000 0.5
====================================================================================================================================
Portugal Telecommunications 349,000 Portugal Telecom SA (ADR) (a) 3,795,375 1.1
-------------------------------------------------------------------------------------------------------------------
Utilities--Electric 80,820 EDP-Eletricidade de Portugal, SA (ADR) (a) 2,773,136 0.8
-------------------------------------------------------------------------------------------------------------------
Total Common Stocks in Portugal 6,568,511 1.9
====================================================================================================================================
Spain Utilities--Electric 234,500 Endesa SA (ADR) (a) 4,939,156 1.5
323,500 Iberdrola SA 4,110,190 1.2
-------------------------------------------------------------------------------------------------------------------
Total Common Stocks in Spain 9,049,346 2.7
====================================================================================================================================
United Kingdom Telecommunications 429,423 British Telecommunications PLC 6,219,609 1.8
158,900 Vodafone AirTouch PLC (ADR) (a) 7,279,606 2.2
------------- -----
13,499,215 4.0
-------------------------------------------------------------------------------------------------------------------
Utilities--Electric 370,000 PowerGen PLC 2,433,372 0.7
-------------------------------------------------------------------------------------------------------------------
Total Common Stocks in the United Kingdom 15,932,587 4.7
====================================================================================================================================
United States Telecommunications 155,000 AT&T Corp. 5,376,562 1.6
24,000 + Allegiance Telecom, Inc. 1,254,000 0.4
95,232 Bell Atlantic Corporation 5,035,392 1.5
183,600 BellSouth Corporation 8,571,825 2.5
129,000 Broadwing Inc. 3,071,812 0.9
33,500 GTE Corporation 2,118,875 0.6
31,000 Lucent Technologies Inc. 1,778,625 0.5
234,040 SBC Communications Inc. 10,224,623 3.0
40,000 + WinStar Communications, Inc. 1,130,000 0.3
162,000 + WorldCom, Inc. 6,085,125 1.8
------------- -----
44,646,839 13.1
-------------------------------------------------------------------------------------------------------------------
</TABLE>
6 & 7
<PAGE>
Merrill Lynch Global Utility Fund, Inc., May 31, 2000
SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<TABLE>
<CAPTION>
Shares Percent of
COUNTRY Industries Held Common Stocks Value Net Assets
====================================================================================================================================
<S> <C> <C> <C> <C> <C>
United States Utilities--Electric 156,000 Allegheny Energy, Inc. $ 4,826,250 1.4%
(concluded) 52,000 + Calpine Corporation 5,508,750 1.6
166,962 Cinergy Corp. 4,445,363 1.3
84,200 Consolidated Edison, Inc. 2,747,025 0.8
105,200 Constellation Energy Group 3,609,675 1.1
153,000 DPL Inc. 3,585,937 1.1
92,000 DQE, Inc. 3,887,000 1.2
118,900 DTE Energy Company 4,109,481 1.2
85,000 Duke Energy Corporation 4,951,250 1.5
365,000 Edison International 7,801,875 2.3
212,000 Energy East Corporation 4,531,500 1.3
180,000 FPL Group, Inc. 8,910,000 2.6
127,300 GPU, Inc. 3,596,225 1.1
156,000 The Montana Power Company 5,898,750 1.7
87,200 NSTAR 3,755,050 1.1
124,000 New Century Energies, Inc. 4,169,500 1.2
239,500 NiSource Inc. 4,325,969 1.3
109,000 Pinnacle West Capital Corporation 3,896,750 1.2
144,200 Reliant Energy, Inc. 4,109,700 1.2
138,000 SCANA Corporation 3,570,750 1.1
260,200 The Southern Company 6,748,938 2.0
------------- -----
98,985,738 29.3
-------------------------------------------------------------------------------------------------------------------
Utilities--Gas 95,000 The Coastal Corporation 5,830,625 1.7
27,000 Columbia Energy Group 1,746,563 0.5
53,000 Dynegy Inc. (Class A) 4,087,625 1.2
155,300 El Paso Energy Corporation 7,997,950 2.4
80,000 Enron Corp. 5,830,000 1.7
130,000 KeySpan Corporation 3,965,000 1.2
105,000 National Fuel Gas Company 5,440,313 1.6
183,000 The Williams Companies, Inc. 7,605,938 2.3
------------- -----
42,504,014 12.6
-------------------------------------------------------------------------------------------------------------------
Utilities--Water 86,200 Philadelphia Suburban Corporation 2,133,450 0.6
-------------------------------------------------------------------------------------------------------------------
Total Common Stocks in the United States 188,270,041 55.6
====================================================================================================================================
Total Investments in Common Stocks
(Cost--$205,480,303) 281,528,710 83.2
====================================================================================================================================
<CAPTION>
SHORT-TERM Face
SECURITIES Amount Issue
====================================================================================================================================
<S> <C> <C> <C> <C>
Commercial Paper* $ 8,000,000 American Home Products, Inc., 6.50% due
6/26/2000 7,963,889 2.4
14,230,000 Associates Corporation of North America,
6.80% due 6/01/2000 14,230,000 4.2
10,000,000 CSW Credit Inc., 6.47% due 6/19/2000 9,967,650 2.9
15,000,000 Goldman Sachs Group, Inc., 6.38% due
6/15/2000 14,962,783 4.4
-------------------------------------------------------------------------------------------------------------------
US Government 10,000,000 Federal Home Loan Banks, 6.33% due 6/09/2000 9,985,933 3.0
Agency Obligation*
-------------------------------------------------------------------------------------------------------------------
Total Investments in Short-Term Securities
(Cost--$57,110,255) 57,110,255 16.9
====================================================================================================================================
Total Investments (Cost--$262,590,558) 338,638,965 100.1
Liabilities in Excess of Other Assets (260,883) (0.1)
------------- -----
Net Assets $ 338,378,082 100.0%
============= =====
====================================================================================================================================
</TABLE>
(a) American Depositary Receipts (ADR).
* Commercial Paper and certain US Government Agency Obligations are traded
on a discount basis; the interest rates shown reflect the discount rates
paid at the time of purchase by the Fund.
+ Non-income producing security.
See Notes to Financial Statements.
8 & 9
<PAGE>
Merrill Lynch Global Utility Fund, Inc., May 31, 2000
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
As of May 31, 2000
============================================================================================================================
<S> <C> <C> <C>
Assets: Investments, at value (identified cost--$262,590,558) ........................ $338,638,965
Foreign cash ................................................................. 398
Receivables:
Dividends ................................................................. $ 829,790
Capital shares sold ....................................................... 186,559 1,016,349
------------
Prepaid registration fees .................................................... 60,793
------------
Total assets ................................................................. 339,716,505
------------
============================================================================================================================
Liabilities: Payables:
Capital shares redeemed ................................................... 423,633
Distributor ............................................................... 197,806
Investment adviser ........................................................ 143,231 764,670
------------
Accrued expenses and other liabilities ....................................... 573,753
------------
Total liabilities ............................................................ 1,338,423
------------
============================================================================================================================
Net Assets: Net assets ................................................................... $338,378,082
============
============================================================================================================================
Net Assets Class A Shares of Common Stock, $.10 par value, 100,000,000 shares authorized $ 187,814
Consist of: Class B Shares of Common Stock, $.10 par value, 100,000,000 shares authorized 1,442,830
Class C Shares of Common Stock, $.10 par value, 100,000,000 shares authorized 46,572
Class D Shares of Common Stock, $.10 par value, 100,000,000 shares authorized 77,081
Paid-in capital in excess of par ............................................. 147,505,416
Undistributed investment income--net ......................................... 3,712,458
Undistributed realized capital gains on investments and foreign currency
transactions--net ............................................................ 109,369,438
Unrealized appreciation on investments and foreign currency transactions--net 76,036,473
------------
Net assets ................................................................... $338,378,082
============
============================================================================================================================
Net Asset Class A--Based on net assets of $36,331,947 and 1,878,139 shares outstanding . $ 19.34
Value: ============
Class B--Based on net assets of $278,180,536 and 14,428,301 shares outstanding $ 19.28
============
Class C--Based on net assets of $8,949,527 and 465,722 shares outstanding .... $ 19.22
============
Class D--Based on net assets of $14,916,072 and 770,814 shares outstanding ... $ 19.35
============
============================================================================================================================
</TABLE>
See Notes to Financial Statements.
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
For the Six Months Ended May 31, 2000
============================================================================================================
<S> <C> <C> <C>
Investment Income: Dividends (net of $160,208 foreign withholding tax). $ 6,196,309
Interest and discount earned ....................... 439,434
-------------
Total income ....................................... 6,635,743
-------------
============================================================================================================
Expenses: Account maintenance and distribution fees--Class B . $ 1,152,143
Investment advisory fees ........................... 1,115,530
Transfer agent fees--Class B ....................... 141,560
Custodian fees ..................................... 74,775
Professional fees .................................. 41,045
Account maintenance and distribution fees--Class C . 36,844
Registration fees .................................. 31,244
Accounting services ................................ 28,989
Printing and shareholder reports ................... 28,575
Account maintenance fees--Class D .................. 19,462
Transfer agent fees--Class A ....................... 15,218
Directors' fees and expenses ....................... 12,543
Transfer agent fees--Class D ....................... 5,959
Transfer agent fees--Class C ....................... 4,660
Pricing fees ....................................... 2,029
Other .............................................. 6,679
-------------
Total expenses ..................................... 2,717,255
-------------
Investment income--net ............................. 3,918,488
-------------
============================================================================================================
Realized & Realized gain (loss) from:
Unrealized Gain Investments--net ................................ 112,465,123
(Loss) on Foreign currency transactions--net .............. (23,695) 112,441,428
Investments & -------------
Foreign Currency Change in unrealized appreciation/depreciation on:
Transactions--Net: Investments--net ................................ (94,058,783)
Foreign currency transactions--net .............. (7,452) (94,066,235)
------------- -------------
Net Increase in Net Assets Resulting from Operations $ 22,293,681
=============
============================================================================================================
</TABLE>
See Notes to Financial Statements.
10 & 11
<PAGE>
Merrill Lynch Global Utility Fund, Inc., May 31, 2000
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the Six For the
Months Ended Year Ended
Increase (Decrease) in Net Assets: May 31, 2000 Nov. 30, 1999
=====================================================================================================================
<S> <C> <C> <C>
Operations: Investment income--net ...................................... $ 3,918,488 $ 4,494,985
Realized gain on investments and foreign currency
transactions--net ........................................... 112,441,428 13,142,000
Change in unrealized appreciation/depreciation on investments
and foreign currency transactions--net ...................... (94,066,235) 8,553,202
------------- -------------
Net increase in net assets resulting from operations ........ 22,293,681 26,190,187
------------- -------------
=====================================================================================================================
Dividends & Investment income--net:
Distributions to Class A .................................................. (185,853) (740,613)
Shareholders: Class B .................................................. (251,331) (3,451,994)
Class C .................................................. (5,717) (98,007)
Class D .................................................. (52,870) (235,257)
Realized gain on investments--net:
Class A .................................................. (1,724,416) (3,200,306)
Class B .................................................. (13,495,906) (24,711,996)
Class C .................................................. (379,134) (613,584)
Class D .................................................. (658,896) (915,061)
------------- -------------
Net decrease in net assets resulting from dividends and
distributions to shareholders ............................... (16,754,123) (33,966,818)
------------- -------------
=====================================================================================================================
Capital Share Net decrease in net assets derived from capital share
Transactions: transactions ............................................... (28,510,649) (19,934,887)
------------- -------------
=====================================================================================================================
Net Assets: Total decrease in net assets ................................ (22,971,091) (27,711,518)
Beginning of period ......................................... 361,349,173 389,060,691
------------- -------------
End of period* .............................................. $ 338,378,082 $ 361,349,173
============= =============
=====================================================================================================================
* Undistributed investment income--net ..................... $ 3,712,458 $ 289,741
============= =============
=====================================================================================================================
</TABLE>
See Notes to Financial Statements.
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Class A+
-----------------------------------------------------
For the
The following per share data and ratios have been derived Six Months
from information provided in the financial statements. Ended For the Year Ended November 30,
May 31, ----------------------------------------
Increase (Decrease) in Net Asset Value: 2000 1999 1998 1997 1996
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period .................... $ 19.16 $ 19.49 $ 16.97 $ 15.09 $ 13.52
Operating ------- ------- ------- ------- -------
Performance: Investment income--net .................................. .28 .34 .41 .47 .50
Realized and unrealized gain on investments and
foreign currency transactions--net ...................... .87 1.14 3.77 2.35 1.84
------- ------- ------- ------- -------
Total from investment operations ........................ 1.15 1.48 4.18 2.82 2.34
------- ------- ------- ------- -------
Less dividends and distributions:
Investment income--net ................................ (.10) (.34) (.42) (.49) (.53)
Realized gain on investments--net ..................... (.87) (1.47) (1.24) (.45) (.24)
------- ------- ------- ------- -------
Total dividends and distributions ....................... (.97) (1.81) (1.66) (.94) (.77)
------- ------- ------- ------- -------
Net asset value, end of period .......................... $ 19.34 $ 19.16 $ 19.49 $ 16.97 $ 15.09
======= ======= ======= ======= =======
====================================================================================================================================
Total Investment Based on net asset value per share ...................... 5.99%++ 8.17% 26.47% 19.65% 17.94%
Return:** ======= ======= ======= ======= =======
====================================================================================================================================
Ratios to Average Expenses ................................................ .80%* .82% .82% .82% .84%
Net Assets: ======= ======= ======= ======= =======
Investment income--net .................................. 2.76%* 1.82% 2.26% 2.98% 3.51%
======= ======= ======= ======= =======
====================================================================================================================================
Supplemental Net assets, end of period (in thousands) ................ $36,332 $38,309 $41,977 $38,825 $40,055
Data: ======= ======= ======= ======= =======
Portfolio turnover ...................................... 23.77% 7.43% 6.56% 6.23% 5.03%
======= ======= ======= ======= =======
====================================================================================================================================
</TABLE>
* Annualized.
** Total investment returns exclude the effects of sales charges.
+ Based on average shares outstanding.
++ Aggregate total investment return.
See Notes to Financial Statements.
12 & 13
<PAGE>
Merrill Lynch Global Utility Fund, Inc., May 31, 2000
FINANCIAL HIGHLIGHTS (concluded)
<TABLE>
<CAPTION>
Class B+
-----------------------------------------------------
For the
The following per share data and ratios have been derived Six Months
from information provided in the financial statements. Ended For the Year Ended November 30,
May 31, -----------------------------------------
Increase (Decrease) in Net Asset Value: 2000 1999 1998 1997 1996
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period .................. $ 19.10 $ 19.42 $ 16.93 $ 15.05 $ 13.47
Operating -------- -------- -------- -------- --------
Performance: Investment income--net ................................ .20 .20 .27 .35 .39
Realized and unrealized gain on investments
and foreign currency transactions--net ................ .87 1.15 3.74 2.35 1.84
-------- -------- -------- -------- --------
Total from investment operations ...................... 1.07 1.35 4.01 2.70 2.23
-------- -------- -------- -------- --------
Less dividends and distributions:
Investment income--net .............................. (.02) (.20) (.28) (.37) (.41)
Realized gain on investments--net ................... (.87) (1.47) (1.24) (.45) (.24)
-------- -------- -------- -------- --------
Total dividends and distributions ..................... (.89) (1.67) (1.52) (.82) (.65)
-------- -------- -------- -------- --------
Net asset value, end of period ........................ $ 19.28 $ 19.10 $ 19.42 $ 16.93 $ 15.05
======== ======== ======== ======== ========
====================================================================================================================================
Total Investment Based on net asset value per share .................... 5.59%++ 7.41% 25.40% 18.77% 17.07%
Return:** ======== ======== ======== ======== ========
====================================================================================================================================
Ratios to Average Expenses .............................................. 1.56%* 1.59% 1.59% 1.59% 1.61%
Net Assets: ======== ======== ======== ======== ========
Investment income--net ................................ 1.99%* 1.06% 1.48% 2.22% 2.74%
======== ======== ======== ======== ========
====================================================================================================================================
Supplemental Net assets, end of period (in thousands) .............. $278,181 $299,912 $327,589 $301,459 $335,487
Data: ======== ======== ======== ======== ========
Portfolio turnover .................................... 23.77% 7.43% 6.56% 6.23% 5.03%
======== ======== ======== ======== ========
====================================================================================================================================
<CAPTION>
Class C+
-----------------------------------------------------
For the
The following per share data and ratios have been derived Six Months
from information provided in the financial statements. Ended For the Year Ended November 30,
May 31, ----------------------------------------
Increase (Decrease) in Net Asset Value: 2000 1999 1998 1997 1996
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period .................. $19.04 $19.37 $16.89 $15.03 $13.46
Operating ------ ------ ------ ------ ------
Performance: Investment income--net ................................ .20 .19 .25 .33 .38
Realized and unrealized gain on investments
and foreign currency transactions--net .............. .86 1.14 3.73 2.35 1.84
------ ------ ------ ------ ------
Total from investment operations ...................... 1.06 1.33 3.98 2.68 2.22
------ ------ ------ ------ ------
Less dividends and distributions:
Investment income--net .............................. (.01) (.19) (.26) (.37) (.41)
Realized gain on investments--net ................... (.87) (1.47) (1.24) (.45) (.24)
------ ------ ------ ------ ------
Total dividends and distributions ..................... (.88) (1.66) (1.50) (.82) (.65)
------ ------ ------ ------ ------
Net asset value, end of period ........................ $19.22 $19.04 $19.37 $16.89 $15.03
====== ====== ====== ====== ======
====================================================================================================================================
Total Investment Based on net asset value per share .................... 5.59%++ 7.34% 25.34% 18.66% 17.03%
Return:** ====== ====== ====== ====== ======
====================================================================================================================================
Ratios to Average Expenses .............................................. 1.62%* 1.65% 1.64% 1.63% 1.66%
Net Assets: ====== ====== ====== ====== ======
Investment income--net ................................ 2.02%* 1.02% 1.38% 2.07% 2.65%
====== ====== ====== ====== ======
====================================================================================================================================
Supplemental Net assets, end of period (in thousands) .............. $8,949 $8,381 $7,954 $5,486 $3,325
Data: ====== ====== ====== ====== ======
Portfolio turnover .................................... 23.77% 7.43% 6.56% 6.23% 5.03%
====== ====== ====== ====== ======
====================================================================================================================================
<CAPTION>
Class D+
-----------------------------------------------------
For the
The following per share data and ratios have been derived Six Months
from information provided in the financial statements. Ended For the Year Ended November 30,
May 31, ----------------------------------------
Increase (Decrease) in Net Asset Value: 2000 1999 1998 1997 1996
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period .................. $ 19.17 $ 19.49 $ 16.98 $15.10 $13.55
Operating ------- ------- ------- ------ ------
Performance: Investment income--net ................................ .26 .30 .36 .43 .50
Realized and unrealized gain on investments
and foreign currency transactions--net ................ .86 1.15 3.77 2.35 1.79
------- ------- ------- ------ ------
Total from investment operations ...................... 1.12 1.45 4.13 2.78 2.29
------- ------- ------- ------ ------
Less dividends and distributions:
Investment income--net .............................. (.07) (.30) (.38) (.45) (.50)
Realized gain on investments--net ................... (.87) (1.47) (1.24) (.45) (.24)
------- ------- ------- ------ ------
Total dividends and distributions ..................... (.94) (1.77) (1.62) (.90) (.74)
------- ------- ------- ------ ------
Net asset value, end of period ........................ $ 19.35 $ 19.17 $ 19.49 $16.98 $15.10
======= ======= ======= ====== ======
====================================================================================================================================
Total Investment Based on net asset value per share .................... 5.85%++ 7.96% 26.09% 19.35% 17.45%
Return:** ======= ======= ======= ====== ======
====================================================================================================================================
Ratios to Average Expenses .............................................. 1.05%* 1.07% 1.07% 1.06% 1.07%
Net Assets: ======= ======= ======= ====== ======
Investment income--net ................................ 2.60%* 1.60% 1.97% 2.70% 3.30%
======= ======= ======= ====== ======
====================================================================================================================================
Supplemental Net assets, end of period (in thousands) .............. $14,916 $14,747 $11,541 $6,935 $4,365
Data: ======= ======= ======= ====== ======
Portfolio turnover .................................... 23.77% 7.43% 6.56% 6.23% 5.03%
======= ======= ======= ====== ======
====================================================================================================================================
</TABLE>
* Annualized.
** Total investment returns exclude the effects of sales
charges.
+ Based on average shares outstanding.
++ Aggregate total investment return.
See Notes to Financial Statements.
14 & 15
<PAGE>
Merrill Lynch Global Utility Fund, Inc., May 31, 2000
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
Merrill Lynch Global Utility Fund, Inc. (the "Fund") is registered under the
Investment Company Act of 1940 as a diversified, open-end management investment
company. The Fund's financial statements are prepared in accordance with
accounting principles generally accepted in the United States of America, which
may require the use of management accruals and estimates. These unaudited
financial statements reflect all adjustments, which are, in the opinion of
management, necessary to a fair statement of the results for the interim period
presented. All such adjustments are of a normal recurring nature. The Fund
offers four classes of shares under the Merrill Lynch Select PricingSM System.
Shares of Class A and Class D are sold with a front-end sales charge. Shares of
Class B and Class C may be subject to a contingent deferred sales charge. All
classes of shares have identical voting, dividend, liquidation and other rights
and the same terms and conditions, except that Class B, Class C and Class D
Shares bear certain expenses related to the account maintenance of such shares,
and Class B and Class C Shares also bear certain expenses related to the
distribution of such shares. Each class has exclusive voting rights with respect
to matters relating to its account maintenance and distribution expenditures.
The following is a summary of significant accounting policies followed by the
Fund.
(a) Valuation of securities--Portfolio securities that are traded on stock
exchanges are valued at the last sale price on the exchange on which such
securities are traded, as of the close of business on the day the securities are
being valued or, lacking any sales, at the last available bid price. Securities
traded in the over-the-counter market are valued at the last available bid price
prior to the time of valuation. In cases where securities are traded on more
than one exchange, the securities are valued on the exchange designated by or
under the authority of the Board of Directors as the primary market. Securities
that are traded both in the over-the-counter market and on a stock exchange are
valued according to the broadest and most representative market. Options written
or purchased are valued at the last sale price in the case of exchange-traded
options. In the case of options traded in the over-the-counter market, valuation
is the last asked price (options written) or the last bid price (options
purchased). Short-term securities are valued at amortized cost, which
approximates market value. Other investments, including futures contracts and
related options, are stated at market value. Securities and assets for which
market value quotations are not available are valued at their fair value as
determined in good faith by or under the direction of the Fund's Board of
Directors.
(b) Foreign currency transactions--Transactions denominated in foreign
currencies are recorded at the exchange rate prevailing when recognized. Assets
and liabilities denominated in foreign currencies are valued at the exchange
rate at the end of the period. Foreign currency transactions are the result of
settling (realized) or valuing (unrealized) assets or liabilities expressed in
foreign currencies into US dollars. Realized and unrealized gains or losses from
investments include the effects of foreign exchange rates on investments.
(c) Derivative financial instruments--The Fund may engage in various portfolio
investment strategies to increase or decrease the level of risk to which the
Fund is exposed more quickly and efficiently than transactions in other types of
instruments. Losses may arise due to changes in the value of the contract or if
the counterparty does not perform under the contract.
o Options--The Fund is authorized to write and purchase call options and put
options. When the Fund writes an option, an amount equal to the premium received
by the Fund is reflected as an asset and an equivalent liability. The amount of
the liability is subsequently marked to market to reflect the current market
value of the option written. When a security is purchased or sold through an
exercise of an option, the related premium paid (or received) is added to (or
deducted from) the basis of the security acquired or deducted from (or added to)
the proceeds of the security sold. When an option expires (or the Fund enters
into a closing transaction), the Fund realizes a gain or loss on the option to
the extent of the premiums received or paid (or gain or loss to the extent the
cost of the closing transaction exceeds the premium paid or received).
Written and purchased options are non-income producing investments.
o Financial futures contracts--The Fund may purchase or sell financial futures
contracts and options on such futures contracts. Upon entering into a contract,
the Fund deposits and maintains as collateral such initial margin as required by
the exchange on which the transaction is effected. Pursuant to the contract, the
Fund agrees to receive from or pay to the broker an amount of cash equal to the
daily fluctuation in value of the contract. Such receipts or payments are known
as variation margin and are recorded by the Fund as unrealized gains or losses.
When the contract is closed, the Fund records a realized gain or loss equal to
the difference between the value of the contract at the time it was opened and
the value at the time it was closed.
o Forward foreign exchange contracts--The Fund is authorized to enter into
forward foreign exchange contracts as a hedge against either specific
transactions or portfolio positions. Such contracts are not entered on the
Fund's records. However, the effect on operations is recorded from the date the
Fund enters into such contracts. Premium or discount is amortized over the life
of the contracts.
o Foreign currency options and futures--The Fund may also purchase or sell
listed or over-the-counter foreign currency options, foreign currency futures
and related options on foreign currency futures as a short or long hedge against
possible variations in foreign exchange rates. Such transactions may be effected
with respect to hedges on non-US dollar denominated securities owned by the
Fund, sold by the Fund but not yet delivered, or committed or anticipated to be
purchased by the Fund.
(d) Income taxes--It is the Fund's policy to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income to its shareholders. Therefore, no Federal
income tax provision is required. Under the applicable foreign tax law, a
withholding tax may be imposed on interest, dividends and capital gains at
various rates.
(e) Security transactions and investment income--Security transactions are
recorded on the dates the transactions are entered into (the trade dates).
Interest income (including amortization of discount) is recognized on the
accrual basis. Dividend income is recorded on the ex-dividend dates. Dividends
from foreign securities where the ex-dividend date may have passed are
subsequently recorded when the Fund has determined the ex-dividend dates.
Realized gains and losses on security transactions are determined on the
identified cost basis.
(f) Prepaid registration fees--Prepaid registration fees are charged to expense
as the related shares are issued.
(g) Dividends and distributions--Dividends and distributions paid by the Fund
are recorded on the ex-dividend dates.
2. Investment Advisory Agreement and Transactions with Affiliates:
The Fund has entered into an Investment Advisory Agreement with Merrill Lynch
Asset Management, L.P. ("MLAM"). The general partner of MLAM is Princeton
Services, Inc. ("PSI"), an indirect wholly-owned subsidiary of Merrill Lynch &
Co., Inc. ("ML & Co."), which is the limited partner. The Fund has also entered
into a Distribution Agreement and Distribution Plans with Merrill Lynch Funds
Distributor ("MLFD" or the "Distributor"), a division of Princeton Funds
Distributor, Inc. ("PFD"), which is a wholly-owned subsidiary of Merrill Lynch
Group, Inc.
MLAM is responsible for the management of the Fund's portfolio and provides the
necessary personnel, facilities, equipment and certain other services necessary
to the operation of the Fund. For such services, the Fund pays a monthly fee of
.60%, on an annual basis, of the average daily value of the Fund's net assets.
Pursuant to the Distribution Plans adopted by the Fund in accordance with Rule
12b-1 under the Investment Company Act of 1940, the Fund pays the Distributor
ongoing account maintenance and distribution fees. The fees are accrued daily
16 & 17
<PAGE>
Merrill Lynch Global Utility Fund, Inc., May 31, 2000
NOTES TO FINANCIAL STATEMENTS (concluded)
and paid monthly at annual rates based upon the average daily net assets of the
shares as follows:
--------------------------------------------------------------------------------
Account Distribution
Maintenance Fee Fee
--------------------------------------------------------------------------------
Class B .................................. .25% .50%
Class C .................................. .25% .55%
Class D .................................. .25% --
--------------------------------------------------------------------------------
Pursuant to a sub-agreement with the Distributor, Merrill Lynch, Pierce, Fenner
& Smith Incorporated ("MLPF&S"), a subsidiary of ML & Co., also provides account
maintenance and distribution services to the Fund. The ongoing account
maintenance fee compensates the Distributor and MLPF&S for providing account
maintenance services to Class B, Class C and Class D shareholders. The ongoing
distribution fee compensates the Distributor and MLPF&S for providing
shareholder and distribution-related services to Class B and Class C
shareholders.
For the six months ended May 31, 2000, MLFD earned underwriting discounts and
MLPF&S earned dealer concessions on sales of the Fund's Class A and Class D
Shares as follows:
--------------------------------------------------------------------------------
MLFD MLPF&S
--------------------------------------------------------------------------------
Class A .............................. $ 81 $ 995
Class D .............................. $ 555 $6,690
--------------------------------------------------------------------------------
For the six months ended May 31, 2000, MLPF&S received contingent deferred sales
charges of $104,987 and $311, relating to transactions in Class B Shares and
Class C Shares, respectively.
In addition, MLPF&S received $23,257 in commissions on the execution of
portfolio security transactions for the Fund for the six months ended May 31,
2000.
Financial Data Services, Inc. ("FDS"), a wholly-owned subsidiary of ML & Co., is
the Fund's transfer agent.
Accounting services are provided to the Fund by MLAM at cost.
Certain officers and/or directors of the Fund are officers and/or directors of
MLAM, PSI, FDS, PFD, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities, for the six
months ended May 31, 2000 were $82,784,770 and $171,200,381, respectively.
Net realized gains (losses) for the six months ended May 31, 2000 and net
unrealized gains (losses) as of May 31, 2000 were as follows:
--------------------------------------------------------------------------------
Realized Unrealized
Gains (Losses) Gains (Losses)
--------------------------------------------------------------------------------
Long-term investments .................. $ 112,465,123 $ 76,048,407
Foreign currency transactions .......... (23,695) (11,934)
------------- -------------
Total .................................. $ 112,441,428 $ 76,036,473
============= =============
--------------------------------------------------------------------------------
As of May 31, 2000, net unrealized appreciation for Federal income tax purposes
aggregated $76,048,407, of which $85,325,966 related to appreciated securities
and $9,277,559 related to depreciated securities. The aggregate cost of
investments at May 31, 2000 for Federal income tax purposes was $262,590,558.
4. Capital Share Transactions:
Net decrease in net assets derived from capital share transactions was
$28,510,649 and $19,934,887 for the six months ended May 31, 2000 and for the
year ended November 30, 1999, respectively.
Transactions in capital shares for each class were as follows:
--------------------------------------------------------------------------------
Class A Shares for the Six Months Dollar
Ended May 31, 2000 Shares Amount
--------------------------------------------------------------------------------
Shares sold .............................. 103,690 $ 2,141,849
Shares issued to shareholders
in reinvestment of dividends
and distributions ........................ 80,406 1,558,426
---------- ------------
Total issued ............................. 184,096 3,700,275
Shares redeemed .......................... (305,134) (6,246,781)
---------- ------------
Net decrease ............................. (121,038) $ (2,546,506)
========== ============
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class A Shares for the Year Dollar
Ended November 30, 1999 Shares Amount
--------------------------------------------------------------------------------
Shares sold .............................. 495,258 $ 9,307,178
Shares issued to shareholders
in reinvestment of dividends
and distributions ........................ 171,563 3,145,784
---------- ------------
Total issued ............................. 666,821 12,452,962
Shares redeemed .......................... (821,807) (15,270,384)
---------- ------------
Net decrease ............................. (154,986) $ (2,817,422)
========== ============
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class B Shares for the Six Months Dollar
Ended May 31, 2000 Shares Amount
--------------------------------------------------------------------------------
Shares sold .............................. 335,349 $ 6,780,971
Shares issued to shareholders
in reinvestment of dividends
and distributions ........................ 546,020 10,534,303
---------- ------------
Total issued ............................. 881,369 17,315,274
Automatic conversion of shares ........... (42,239) (862,306)
Shares redeemed .......................... (2,113,763) (42,907,026)
---------- ------------
Net decrease ............................. (1,274,633) $(26,454,058)
========== ============
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class B Shares for the Year Dollar
Ended November 30, 1999 Shares Amount
--------------------------------------------------------------------------------
Shares sold .............................. 2,192,359 $ 40,896,557
Shares issued to shareholders
in reinvestment of dividends
and distributions ........................ 1,193,461 21,827,524
---------- ------------
Total issued ............................. 3,385,820 62,724,081
Automatic conversion of shares ........... (57,842) (1,073,457)
Shares redeemed .......................... (4,489,430) (82,728,308)
---------- ------------
Net decrease ............................. (1,161,452) $(21,077,684)
========== ============
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class C Shares for the Six Months Dollar
Ended May 31, 2000 Shares Amount
--------------------------------------------------------------------------------
Shares sold .............................. 67,936 $ 1,379,048
Shares issued to shareholders
in reinvestment of dividends
and distributions ........................ 17,202 330,820
---------- ------------
Total issued ............................. 85,138 1,709,868
Shares redeemed .......................... (59,575) (1,206,658)
---------- ------------
Net increase ............................. 25,563 $ 503,210
========== ============
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class C Shares for the Year Dollar
Ended November 30, 1999 Shares Amount
--------------------------------------------------------------------------------
Shares sold .............................. 216,881 $ 4,042,518
Shares issued to shareholders
in reinvestment of dividends
and distributions ........................ 34,001 620,183
---------- ------------
Total issued ............................. 250,882 4,662,701
Shares redeemed .......................... (221,267) (4,058,280)
---------- ------------
Net increase ............................. 29,615 $ 604,421
========== ============
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class D Shares for the Six Months Dollar
Ended May 31, 2000 Shares Amount
--------------------------------------------------------------------------------
Shares sold .............................. 55,069 $ 1,104,495
Automatic conversion of shares ........... 42,089 862,306
Shares issued to shareholders
in reinvestment of dividends
and distributions ........................ 30,511 591,619
---------- ------------
Total issued ............................. 127,669 2,558,420
Shares redeemed .......................... (126,237) (2,571,715)
---------- ------------
Net increase (decrease) .................. 1,432 $ (13,295)
========== ============
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class D Shares for the Year Dollar
Ended November 30, 1999 Shares Amount
--------------------------------------------------------------------------------
Shares sold .............................. 328,342 $ 6,144,143
Automatic conversion of shares ........... 57,639 1,073,457
Shares issued to shareholders
in reinvestment of dividends
and distributions ........................ 53,368 979,083
---------- ------------
Total issued ............................. 439,349 8,196,683
Shares redeemed .......................... (262,039) (4,840,885)
---------- ------------
Net increase ............................. 177,310 $ 3,355,798
========== ============
--------------------------------------------------------------------------------
5. Organizational Change and Reorganization Plan:
On March 31, 2000, the Fund's Board of Directors approved a plan of
reorganization, subject to shareholder approval and certain other conditions,
whereby the Fund would acquire substantially all of the assets and liabilities
of Merrill Lynch Utility Income Fund, Inc. in exchange for newly issued shares
of the Fund. These Funds are registered, diversified, open-end management
investment companies. Both entities are managed by MLAM. The Fund will change
its name to Merrill Lynch Utilities and Telecommunications Fund, Inc. upon
completion of the reorganization plan.
18 & 19
<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--5/00
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