MERRILL LYNCH
TECHNOLOGY
FUND, INC.
FUND LOGO
Quarterly Report
June 30, 1995
This report is not authorized for use as an offer of sale or
solicitation of an offer to buy shares of the Company unless
accompanied or preceded by the Company'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.
<PAGE>
Merrill Lynch
Technology Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
MERRILL LYNCH TECHNOLOGY FUND, INC.
Worldwide
Investments
As of 6/30/95
Ten Largest Holdings Percent of
Represented in the Portfolio Net Assets
Informix Corp. 17.1%
LSI Logic Corp. 14.9
Integrated Device Technology, Inc. 13.9
3Com Corporation 13.1
Acclaim Entertainment, Inc. 11.9
Creative Technology Ltd.* 8.4
Ushio Inc. 3.9
Electronic Arts, Inc. 1.8
Hewlett-Packard Company 1.7
Peoplesoft Inc. 0.8
[FN]
*Includes holdings in Singapore and the United States.
<PAGE>
Industries Represented Percent of
in the Portfolio Net Assets
Application Development Software 17.7%
Application Specific Integrated Circuits 14.9
Semiconductors-Memory 13.9
Educational/Entertainment Software 13.7
Internetworking 13.1
Microcomputer Software 8.4
Machinery 3.9
Computer Peripherals 1.7
Communications 0.8
Components 0.8
Photography 0.4
Liquid Crystal Display Capital Equipment 0.1
DEAR SHAREHOLDER
Merrill Lynch Technology Fund, Inc. made money in the June quarter.
The Fund's total investment returns for Class A, Class B, Class C
and Class D Shares were +9.82%, +9.62%, +9.66% and +9.82%,
respectively. Although year-to-date performance is not to our
satisfaction yet, recent performance represents a step in the right
direction.
We made several changes to the portfolio during the June quarter in
an effort to improve short-term results. First, the percentage of
assets invested in US technology stocks increased to 84.0% as of
June 30, 1995 from 52.9% at the end of March. Although there has
been a broad-based advance in US technology stocks over the last
nine months, we believe there are still opportunities based on
company-specific issues. Second, the percentage of assets invested
in Japanese technology stocks decreased to 4.7% as of June 30, 1995
from 23.6% at the end of March. The opportunity cost of owning
Japanese stocks prompted us to sell most of the Fund's Japanese
positions, which have been a drag on the Fund's performance since
the Kobe earthquake. Third, we decreased the cash position, which
has been high since the December quarter.
<PAGE>
Portfolio Matters
Here is an update on four of the Fund's largest holdings. (See page
1 of this report to shareholders for a listing of the Fund's top ten
investments.)
Informix Corp. (17.1% of net assets) is a leading supplier of
relational database management systems and tools for the development
of client-server applications by corporations and value-added
resellers. The success of the company's products was soundly
demonstrated during the three-month period ended March 31, 1995, as
database licenses grew 57% over the prior year. More importantly,
management has recently indicated that growth in the June quarter
would meet or exceed March quarter performance. We believe new
product announcements, as well as fewer new hires, should further
bolster revenue and earnings growth this year.
LSI Logic Corp. (14.9% of net assets) is a leading developer of
semiconductors for the computer, communications and consumer
electronics industries. The company's Coreware product library
allows customers to design system-level solutions on a single piece
of silicon, thereby shortening product development cycles and
improving the performance and reliability of new products. Sony
Corporation's recent entry into the video game business with their
Playstation demonstrates the value of Coreware. Playstation, which
is expected to begin shipping in the United States this September,
has been hugely successful in Japan and received rave reviews at the
E3 consumer electronics show in May. This high-performance product
with an aggressive price is possible because of Coreware. Overall,
we anticipate that LSI could show accelerating revenue growth and
operating profit margin expansion. Integrated Device Technology,
Inc. (IDTI), which represents 13.9% of net assets, is a leading
supplier of fast static random access memories (SRAMs) and specialty
memories. IDTI has seen extraordinary growth in its fiscal year
ended March 31, 1995 (revenues up 28%; earnings per share up 73%).
The amount of time it takes IDTI to process a single wafer (the
cycle time) has been nearly twice the industry standard of 9 weeks--
11 weeks. During the next four quarters, IDTI expects to cut its
cycle time in half and conservatively expects output to increase 50%
from current levels. We anticipate that profits could increase
greater than consensus expectations.
Acclaim Entertainment, Inc. (11.9% of net assets) is the largest
independent developer of video games and has positioned itself to
become one of the leading publishers for next-generation game
platforms as well as personal computer (PC) CD-ROMs. Acclaim's
results for the recently reported May quarter exceeded analysts'
expectations. More importantly, management was very upbeat about its
short-term and long-term outlook, citing improved visibility and a
very aggressive publication schedule for Sega's Saturn, Sony's
Playstation and Windows 95-based PCs. By November, Acclaim plans to
unveil in detail its business plan with cable giant Telecommuni-
cations, Inc. for a competitive gaming network.
<PAGE>
In Conclusion
We thank you for your continued investment in Merrill Lynch
Technology Fund, Inc., and we look forward to reporting to you again
after the close of the September quarter.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(James K. Renck)
James K. Renck
Vice President and
Portfolio Manager
July 17, 1995
Officers and
Directors
Arthur Zeikel, President and Director
Donald Cecil, Director
Edward H. Meyer, Director
Charles C. Reilly, Director
Richard R. West, Director
Edward D. Zinbarg, Director
Terry K. Glenn, Executive Vice President
Norman R. Harvey, Senior Vice President
James K. Renck, Vice President and Portfolio Manager
Donald C. Burke, Vice President
Gerald M. Richard, Treasurer
Robert Harris, Secretary
Custodian
The Chase Manhattan Bank, N.A.
Global Securities Services
4 Chase MetroTech Center, 18th Floor
Brooklyn, New York 11245
<PAGE>
Transfer Agent
Merrill Lynch Financial Data Services, Inc.
Transfer Agency Mutual Fund Operations
4800 Deer Lake Drive East
Jacksonville, Florida 32246-6484
(800) 637-3863
PERFORMANCE DATA
About Fund
Performance
Since October 21, 1994, investors have been able to purchase shares
of the Fund through the Merrill Lynch Select Pricing SM System,
which offers four pricing alternatives:
* Class A Shares incur a maximum initial sales charge (front-end
load) of 5.25% and bear no ongoing distribution or account
maintenance fees. Class A Shares are available only to eligible
investors.
* Class B Shares are subject to a maximum contingent deferred sales
charge of 4% if redeemed during the first year, decreasing 1% each
year thereafter to 0% after the fourth year. In addition, Class B
Shares are subject to a distribution fee of 0.75% and an account
maintenance fee of 0.25%. These shares automatically convert to
Class D Shares after 8 years.
* Class C Shares are subject to a distribution fee of 0.75% and an
account maintenance fee of 0.25%. In addition, Class C Shares are
subject to a 1% contingent deferred sales charge if redeemed within
one year of purchase.
* Class D Shares incur a maximum initial sales charge of 5.25% and
an account maintenance fee of 0.25% (but no distribution fee).
Performance data for the Fund's Class A and Class B Shares are
presented in the "Performance Summary" and "Average Annual Total
Return" tables below and on page 5. "Aggregate Total Return" tables
for Class C and Class D Shares are also presented on page 5. Data
for all of the Fund's shares are presented in the "Recent
Performance Results" table on page 5.
<PAGE>
The "Recent Performance Results" table shows investment results
before the deduction of any sales charges for Class A and Class B
Shares for the 12-month and 3-month periods ended June 30, 1995 and
for Class C and Class D Shares for the since inception and 3-month
periods ended June 30, 1995. All data in this table assume
imposition of the actual total expenses incurred by each class of
shares during the relevant period.
None of the past results shown should be considered a representation
of future performance. Investment return and principal value of
shares will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost. Dividends paid to each class
of shares will vary because of the different levels of account
maintenance, distribution and transfer agency fees applicable to
each class, which are deducted from the income available to be paid
to shareholders.
<TABLE>
Performance
Summary--
Class A Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<C> <C> <C> <C> <C> <C>
4/27/92--12/31/92 $3.83 $4.90 -- $0.337 +37.05%
1993 4.90 4.50 $0.002 1.411 +22.44
1994 4.50 5.24 -- 0.442 +26.63
1/1/95--6/30/95 5.24 5.37 -- -- + 2.48
------ ------
Total $0.002 Total $2.190
Cumulative total return as of 6/30/95: +117.76%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures assume reinvestment of all dividends and capital gains
distributions at net asset value on the ex-dividend date, and do not
include sales charge; results would be lower if sales charge was
included.
</TABLE>
<PAGE>
<TABLE>
Performance
Summary--
Class B Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<C> <C> <C> <C> <C> <C>
4/27/92--12/31/92 $3.83 $4.87 -- $0.337 +36.29%
1993 4.87 4.43 $0.002 1.374 +20.89
1994 4.43 5.14 -- 0.405 +25.50
1/1/95--6/30/95 5.14 5.24 -- -- + 1.95
------ ------
Total $0.002 Total $2.116
Cumulative total return as of 6/30/95: +110.81%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures assume reinvestment of all dividends and capital gains
distributions at net asset value on the ex-dividend date, and do not
reflect deduction of any sales charge; results would be lower if
sales charge was deducted.
</TABLE>
Average Annual
Total Return
% Return Without % Return With
Class A Shares* Sales Charge Sales Charge**
Year Ended 6/30/95 + 6.37% + 0.79%
Inception (4/27/92) through 6/30/95 +27.77 +25.62
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
% Return % Return
Class B Shares* Without CDSC With CDSC**
Year Ended 6/30/95 + 5.35% + 1.44%
Inception (4/27/92) through 6/30/95 +26.47 +26.28
[FN]
*Maximum contingent deferred sales charge is 4% and is reduced to 0%
after 4 years.
**Assuming payment of applicable contingent deferred sales charge.
<PAGE>
Aggregate
Total Return
% Return % Return
Class C Shares* Without CDSC With CDSC**
Inception (10/21/94) through 6/30/95 -2.52% -3.43%
[FN]
*Maximum contingent deferred sales charge is 1% and reduced to 0%
after 1 year.
**Assuming payment of applicable contingent deferred sales charge.
% Return Without % Return With
Class D Shares* Sales Charge Sales Charge**
Inception (10/21/94) through 6/30/95 -2.00% -7.14%
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
<TABLE>
Recent
Performance
Results*
<CAPTION>
12 Month 3 Month
6/30/95 3/31/95 6/30/94++ % Change++ % Change
<S> <C> <C> <C> <C> <C>
Class A Shares $5.37 $4.89 $5.49 -2.19% +9.82%
Class B Shares 5.24 4.78 5.38 -2.60 +9.62
Class C Shares 5.22 4.76 5.75 -9.22 +9.66
Class D Shares 5.37 4.89 5.88 -8.67 +9.82
Class A Shares--Total Return +6.37(1) +9.82
Class B Shares--Total Return +5.35(2) +9.62
Class C Shares--Total Return -2.52(3) +9.66
Class D Shares--Total Return -2.00(4) +9.82
<PAGE>
<FN>
*Investment results shown do not reflect sales charges; results
shown would be lower if a sales charge was included.
++Investment results shown for Class C and Class D Shares are since
inception (10/21/94).
(1)Percent change includes reinvestment of $0.442 per share ordinary
income dividends.
(2)Percent change includes reinvestment of $0.405 per share ordinary
income dividends.
(3)Percent change includes reinvestment of $0.364 per share ordinary
income dividends.
(4)Percent change includes reinvestment of $0.370 per share ordinary
income dividends.
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (in US dollars)
<CAPTION>
Percent of
COUNTRY Industries Shares Held Stocks Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
Japan Components 143,000 Koyo Seiko Co., Ltd. $ 1,405,847 $ 1,063,510 0.1%
200,000 SMK Corp. 1,432,563 1,147,444 0.1
489,000 Tamura Corp. 3,759,507 2,915,181 0.3
200,000 Tokin Corp. 2,834,543 2,667,926 0.3
-------------- -------------- ------
9,432,460 7,794,061 0.8
Machinery 3,419,000 Ushio Inc. 37,465,178 38,988,951 3.9
Total Investments in
Japanese Stocks 46,897,638 46,783,012 4.7
Singapore Microcomputer 727,150 Creative Technology Ltd. 9,807,063 6,818,658 0.7
Software
Total Investments in
Singaporean Stocks 9,807,063 6,818,658 0.7
United States Application 6,700,000 Informix Corp. 122,906,778 169,175,000 17.1
Development 191,000 Tivoli Systems, Inc. 6,963,600 6,064,250 0.6
Software -------------- -------------- ------
129,870,378 175,239,250 17.7
Application 3,764,400 LSI Logic Corp. 114,916,405 147,282,150 14.9
Specific
Integrated Circuits
<PAGE>
Communications 155,600 Peoplesoft Inc. 6,052,916 8,363,500 0.8
Computer Peripherals 226,000 Hewlett-Packard Company 17,059,810 16,837,000 1.7
Educational/ 6,480,000 Acclaim Entertainment, Inc. 103,211,387 118,260,000 11.9
Entertainment 658,000 Electronic Arts, Inc. 12,847,912 17,848,250 1.8
Software -------------- -------------- ------
116,059,299 136,108,250 13.7
Internetworking 1,936,300 3Com Corporation 104,800,469 129,490,062 13.1
Liquid Crystal 85,000 MRS Technology Inc. 1,126,251 446,250 0.1
Display Capital
Equipment
Microcomputer 8,106,700 Creative Technology Ltd. 113,149,604 76,000,312 7.7
Software
Photography 107,200 Polaroid Corporation 4,522,547 4,368,400 0.4
Semiconductors- 2,974,600 Integrated Device
Memory Technology, Inc. 135,504,281 137,203,425 13.9
Total Investments in
United States Stocks 743,061,960 831,338,599 84.0
Total Investments in Stocks 799,766,661 884,940,269 89.4
SHORT-TERM
SECURITIES Face Amount Commercial Paper*
$32,125,000 Creditanstalt Finance, Inc.,
5.94% due 7/20/1995 32,024,288 32,024,288 3.3
25,000,000 Pfizer, Inc., 5.92% due
7/28/1995 24,889,000 24,889,000 2.5
Total Investments in
Short-Term Securities 56,913,288 56,913,288 5.8
Total Investments $ 856,679,949 941,853,557 95.2
--------------
Unrealized Appreciation on Forward Foreign Exchange Contracts** 392,911 0.0
Other Assets Less Liabilities 47,772,556 4.8
<PAGE> -------------- ------
Net Assets $ 990,019,024 100.0%
============== ======
Net Asset Value: Class A--Based on net assets of $269,153,142
and 50,103,731 shares outstanding $ 5.37
==============
Class B--Based on net assets of $652,655,970
and 124,527,860 shares outstanding $ 5.24
==============
Class C--Based on net assets of $28,427,067
and 5,448,810 shares outstanding $ 5.22
==============
Class D--Based on net assets of $39,782,845 and
7,411,834 shares outstanding $ 5.37
==============
<FN>
*Commercial Paper is traded on a discount basis; the interest
rates shown are the discount rates paid at the time of purchase by
the Company.
**Forward foreign exchange contracts as of June 30, 1995 were as
follows:
<CAPTION>
Unrealized
Expiration Appreciation
Foreign Currency Purchased Date (Depreciation)
<S> <S> <C>
YEN 7,102,953,580 July 1995 $ (174,325)
Total (US$ Commitment--$84,238,381) $ (174,325)
Foreign Currency Sold
YEN 14,899,500,000 July 1995 $ 567,236
Total (US$ Commitment--$176,830,728) $ 567,236
Total Unrealized Appreciation on Forward
Foreign Exchange Contracts--Net $ 392,911
==========
</TABLE>
PORTFOLIO CHANGES
<PAGE>
For the Quarter Ended June 30, 1995
Additions
Hewlett-Packard Company
Integrated Device Technology, Inc.
Polaroid Corporation
Deletions
Adobe Systems Inc.
Daifuku Co., Ltd.
Intel Corporation
Kenwood Corp.
NSK Ltd.
NTN Corp.
Nippondenso Co., Ltd.
Omron Corp.
QUALCOMM, Inc.
Ricoh Co., Ltd.
