MERRILL LYNCH
TECHNOLOGY
FUND, INC.
STRATEGIC
Performance
[GRAPHIC OMITTED]
Semi-Annual Report
September 30, 1997
<PAGE>
MERRILL LYNCH TECHNOLOGY FUND, INC.
Portfolio
Information
As of 9/30/97
Percent of
Ten Largest Holdings Net Assets
Creative Technology Ltd. .................... 24.3%
National Semiconductor Corporation .......... 9.5
Bay Networks, Inc. .......................... 7.9
Applied Materials, Inc. ..................... 4.6
Teradyne, Inc. .............................. 4.5
Texas Instruments, Inc. ..................... 4.5
Cypress Semiconductor Corporation ........... 4.4
KLA-Tencor Corporation ...................... 4.4
Integrated Device Technology, Inc. .......... 4.3
Kulicke and Soffa Industries, Inc. .......... 4.2
Industries Represented Percent of
in the Portfolio Net Assets
Microcomputer Peripherals ................... 24.3%
Semiconductor Capital Equipment ............. 18.1
Semiconductors--Memory ...................... 13.2
Internetworking ............................. 10.7
Semiconductors--Analog ...................... 10.1
Educational/Entertainment Software .......... 3.9
Application Specific Integrated Circuits .... 3.7
Internet Software ........................... 2.9
Communications Equipment .................... 1.6
Computer Software ........................... 0.3
<PAGE>
Merrill Lynch Technology Fund, Inc., September 30, 1997
DEAR SHAREHOLDER
Merrill Lynch Technology Fund, Inc. made money in the September quarter. For the
three months ended September 30, 1997, the Fund's total returns for Class A,
Class B, Class C and Class D Shares were +24.07%, +23.72%, +23.86% and +23.88%,
respectively. For the nine months ended September 30, 1997, total returns for
Class A, Class B, Class C and Class D Shares were +45.00%, +43.74%, +43.73% and
+44.57%, respectively. (Complete performance results, including average annual
total returns, can be found on pages 4-6 of this report to shareholders.)
October lived up to its reputation as being the cruelest month for equities.
Given the steep declines in global stock markets, particularly technology
stocks, it almost seems irrelevant to discuss the September quarter. Reasons for
the decline changed from day to day. One day it was "irrational exuberance" and
the prospect of rising interest rates to cool off a strong domestic economy.
Then it was the fear of an economic slowdown starting in Asia and impacting the
rest of the world. If we look back to earnings announcements by technology
companies last July, many companies lowered expectations for the September
quarter but raised expectations for the December quarter. However, during
October many technology companies reported disappointing earnings for the
September quarter and lowered expectations for the December quarter. Finally,
perhaps investors simply took an opportunity to lock in exceptional
(historically high) investment returns.
The Fund, which ended the September quarter with an 11% cash position, became
fully invested at the end of October. We have increased our investments in
semiconductor capital equipment stocks because the anticipated order slowdown
(originating with the three major South Korean semiconductor companies) may be
discounted by 30%-50% stock price declines. Some order delays, not
cancellations, have occurred. Some equipment companies, such as Applied
Materials, Inc., KLA-Tencor Corporation and Kulicke and Soffa Industries, Inc.,
are actually seeing improved order visibility (excluding companies in South
Korea). All the equipment companies, and most of the semiconductor companies,
expect spending to increase for advanced geometry manufacturing lines. Moreover,
a slowdown in capital spending by South Korean companies could actually have a
positive impact on semiconductor memory prices in mid-1998 (and on memory stocks
sooner). Returns on equity for capital equipment companies could still increase
significantly in 1998-1999, in our opinion.
In Conclusion
Controversy creates opportunity. It appears to us that many investors now are
searching for reasons to be negative. We think most of the bad news is already
discounted, and therefore viewed the recent stock market declines as a buying
opportunity. We thank you for your continued investment in Merrill Lynch
Technology Fund, Inc., and we look forward to reporting to you again in our
upcoming quarterly report to shareholders.
Sincerely,
/s/ Arthur Zeikel
Arthur Zeikel
President
/s/ James K. Renck
James K. Renck
Senior Vice President and
Portfolio Manager
November 14, 1997
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, Senior Vice President and
Portfolio Manager
Donald C. Burke, Vice President
Gerald M. Richard, Treasurer
Philip M. Mandel, Secretary
Custodian
The Chase Manhattan Bank
Global Securities Services
4 Chase MetroTech Center, 18th Floor
Brooklyn, NY 11245
Transfer Agent
Merrill Lynch Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 637-3863
PORTFOLIO CHANGES
For the Quarter Ended September 30, 1997
Additions
3Com Corporation
Advanced Fibre Communications
*Altera Corporation
Applied Materials, Inc.
C-Cube Microsystems, Inc.
*Cisco Systems, Inc.
E* TRADE Group, Inc.
Globalstar Telecommunications Ltd.
J.D. Edwards & Company
Kulicke and Soffa Industries, Inc.
Linear Technology Corporation
Maxim Integrated Products, Inc.
*Micron Technology, Inc.
National Semiconductor Corporation
*Syntel, Inc.
Teradyne, Inc.
Texas Instruments, Inc.
Deletions
*Altera Corporation
*Cisco Systems, Inc.
*Micron Technology, Inc.
Microsoft Corporation
Oracle Corporation
PMC-Sierra, Inc.
*Syntel, Inc.
*Added and deleted in the same quarter.
2 & 3
<PAGE>
Merrill Lynch Technology Fund, Inc., September 30, 1997
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
5.25% 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 0.75% and an account maintenance fee of
0.25%. These shares automatically convert to Class D Shares after
approximately 8 years. (There is no initial sales charge for automatic
share conversions.)
o 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.
o Class D Shares incur a maximum initial sales charge of 5.25% and an
account maintenance fee of 0.25% (but no distribution fee).
None of the past results shown should be considered a representation of
future performance. Figures shown in the "Average Annual Total Return"
tables as well as the total returns and cumulative total returns in the
"Performance Summary" tables assume reinvestment of all dividends and
capital gains distributions at net asset value on the ex-dividend date.
Investment return and principal value of shares will fluctuate so that
shares, when redeemed, may be worth more or less than their original cost.
Dividends paid to each class of shares will vary because of the different
levels of account maintenance, distribution and transfer agency fees
applicable to each class, which are deducted from the income available to
be paid to shareholders.
Performance
Summary--
Class A Shares
<TABLE>
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
================================================================================
<S> <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
- --------------------------------------------------------------------------------
1995 5.24 5.20 -- 0.320 + 5.86
- --------------------------------------------------------------------------------
1996 5.20 4.98 0.197 0.246 + 4.34
- --------------------------------------------------------------------------------
1/1/97--9/30/97 4.98 5.85 -- 1.216 +45.00
- --------------------------------------------------------------------------------
Total $0.199 Total $3.972
================================================================================
Cumulative total return as of 9/30/97: +240.32%**
================================================================================
</TABLE>
* Figures may include short-term capital gains distributions.
** Figures do not include sales charge; results would be lower if sales
charge was included.
Performance
Summary--
Class B Shares
<TABLE>
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
================================================================================
<S> <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
- --------------------------------------------------------------------------------
1995 5.14 5.04 -- 0.320 + 4.81
- --------------------------------------------------------------------------------
1996 5.04 4.82 0.197 0.181 + 3.17
- --------------------------------------------------------------------------------
1/1/97--9/30/97 4.82 5.58 -- 1.201 +43.74
- --------------------------------------------------------------------------------
Total $0.199 Total $3.818
================================================================================
Cumulative total return as of 9/30/97: +221.38%**
================================================================================
</TABLE>
* Figures may include short-term capital gains distributions.
** Figures do not reflect deduction of any sales charge; results would be
lower if sales charge was deducted.
Performance
Summary--
Class C Shares
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
================================================================================
10/21/94--12/31/94 $ 5.75 $ 5.12 -- $ 0.364 - 4.39%
- --------------------------------------------------------------------------------
1995 5.12 5.02 -- 0.320 + 4.83
- --------------------------------------------------------------------------------
1996 5.02 4.80 $0.197 0.177 + 3.12
- --------------------------------------------------------------------------------
1/1/97--9/30/97 4.80 5.55 -- 1.201 + 43.73
- --------------------------------------------------------------------------------
Total $0.197 Total $2.062
================================================================================
Cumulative total return as of 9/30/97: +48.55%**
================================================================================
* Figures may include short-term capital gains distributions.
** Figures do not reflect deduction of any sales charge; results would be
lower if sales charge was deducted.
Performance
Summary--
Class D Shares
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
================================================================================
10/21/94--12/31/94 $ 5.88 $5.24 -- $ 0.370 - 4.37%
- --------------------------------------------------------------------------------
1995 5.24 5.19 -- 0.320 + 5.67
- --------------------------------------------------------------------------------
1996 5.19 4.97 $0.197 0.231 + 4.06
- --------------------------------------------------------------------------------
1/1/97--9/30/97 4.97 5.82 -- 1.213 + 44.57
- --------------------------------------------------------------------------------
Total $0.197 Total $2.134
================================================================================
Cumulative total return as of 9/30/97: +52.02%**
================================================================================
* Figures may include short-term capital gains distributions.
** Figures do not include sales charge; results would be lower if sales
charge was included.
Average Annual
Total Return
% Return Without % Return With
Class A Shares* Sales Charge Sales Charge**
================================================================================
Year Ended 9/30/97 +46.50% +38.81%
- --------------------------------------------------------------------------------
Five Years Ended 9/30/97 +24.72 +23.38
- --------------------------------------------------------------------------------
Inception (4/27/92) through 9/30/97 +25.31 +24.08
- --------------------------------------------------------------------------------
* Maximum sales charge is 5.25%.
** Assuming maximum sales charge.
% Return % Return
Class B Shares* Without CDSC With CDSC**
================================================================================
Year Ended 9/30/97 +44.84% +40.84%
- --------------------------------------------------------------------------------
Five Years Ended 9/30/97 +23.41 +23.41
- --------------------------------------------------------------------------------
Inception (4/27/92) through 9/30/97 +24.00 +24.00
- --------------------------------------------------------------------------------
* 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
Class C Shares* Without CDSC With CDSC**
================================================================================
Year Ended 9/30/97 +44.75% +43.75%
- --------------------------------------------------------------------------------
Inception (10/21/94) through 9/30/97 +14.40 +14.40
- --------------------------------------------------------------------------------
* 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
Class D Shares* Sales Charge Sales Charge**
================================================================================
Year Ended 9/30/97 +45.94% +38.28%
- --------------------------------------------------------------------------------
Inception (10/21/94) through 9/30/97 +15.30 +13.20
- --------------------------------------------------------------------------------
* Maximum sales charge is 5.25%.
** Assuming maximum sales charge.
4 & 5
<PAGE>
Merrill Lynch Technology Fund, Inc., September 30, 1997
PERFORMANCE DATA (concluded)
Recent
Performance
Results*
12 Month 3 Month
9/30/97 6/30/97 9/30/96 % Change % Change
================================================================================
Class A Shares $5.85 $5.82 $5.37 +13.28%(1) +0.52%
- --------------------------------------------------------------------------------
Class B Shares 5.58 5.60 5.16 +12.58(1) -0.36
- --------------------------------------------------------------------------------
Class C Shares 5.55 5.57 5.14 +12.44(1) -0.36
- --------------------------------------------------------------------------------
Class D Shares 5.82 5.80 5.35 +13.13(1) + 0.34
- --------------------------------------------------------------------------------
Class A Shares--Total Return +46.50(2) +24.07(3)
- --------------------------------------------------------------------------------
Class B Shares--Total Return +44.84(4) +23.72(5)
- --------------------------------------------------------------------------------
Class C Shares--Total Return +44.75(6) +23.86(7)
- --------------------------------------------------------------------------------
Class D Shares--Total Return +45.94(8) +23.88(9)
- --------------------------------------------------------------------------------
* Investment results shown do not reflect sales charges; results shown would
be lower if a sales charge was included.
(1) Percent change includes reinvestment of $0.197 per share capital gains
distributions.
(2) Percent change includes reinvestment of $1.462 per share ordinary income
dividends and $0.197 per share capital gains distributions.
(3) Percent change includes reinvestment of $1.216 per share ordinary income
dividends.
(4) Percent change includes reinvestment of $1.382 per share ordinary income
dividends and $0.197 per share capital gains distributions.
(5) Percent change includes reinvestment of $1.201 per share ordinary income
dividends.
(6) Percent change includes reinvestment of $1.378 per share ordinary income
dividends and $0.197 per share capital gains distributions.
(7) Percent change includes reinvestment of $1.201 per share ordinary income
dividends.
(8) Percent change includes reinvestment of $1.444 per share ordinary income
dividends and $0.197 per share capital gains distributions.
(9) Percent change includes reinvestment of $1.213 per share ordinary income
dividends.
SCHEDULE OF INVESTMENTS
<TABLE>
<CAPTION>
Shares Value Percent of
COUNTRY Industries Held Stocks Cost (Note 1a) Net Assets
<C> <C> <C> <S> <C> <C> <C>
United States Application Specific 900,000+ C-Cube Microsystems, Inc. $ 29,231,980 $ 30,543,750 3.7%
Integrated Circuits
-------------------------------------------------------------------------------------------------------------------
Communications Equipment 133,400+ Advanced Fibre Communications 4,402,200 5,461,063 0.7
56,000+ Globalstar Telecommunications Ltd. 1,958,000 2,912,000 0.3
93,500+ Tellabs, Inc. 5,607,083 4,815,250 0.6
------------ ------------ ------
11,967,283 13,188,313 1.6
-------------------------------------------------------------------------------------------------------------------
Computer Software 86,000+ J.D. Edwards & Company 1,978,000 2,881,000 0.3
-------------------------------------------------------------------------------------------------------------------
Educational/Entertainment 6,480,000+ Acclaim Entertainment, Inc.++ 103,211,387 32,197,500 3.9
Software
-------------------------------------------------------------------------------------------------------------------
Internet Software 498,100+ Cybercash, Inc. 26,824,333 9,962,000 1.2
300,000+ E* TRADE Group, Inc. 8,250,000 14,062,500 1.7
------------ ------------ ------
35,074,333 24,024,500 2.9
-------------------------------------------------------------------------------------------------------------------
Internetworking 450,000+ 3Com Corporation 25,049,190 23,062,500 2.8
1,702,200+ Bay Networks, Inc. 39,789,430 65,747,475 7.9
------------ ------------ ------
64,838,620 88,809,975 10.7
-------------------------------------------------------------------------------------------------------------------
Microcomputer Peripherals 7,858,150+ Creative Technology Ltd.++ 109,938,488 200,873,959 24.3
-------------------------------------------------------------------------------------------------------------------
Semiconductor Capital 400,000+ Applied Materials, Inc. 32,986,035 38,100,000 4.6
Equipment 535,000+ KLA-Tencor Corporation 31,527,947 36,112,500 4.4
751,600+ Kulicke and Soffa Industries, Inc. 35,506,859 34,761,500 4.2
50,000+ Maxim Integrated Products, Inc. 3,181,250 3,556,250 0.4
693,300+ Teradyne, Inc. 32,801,630 37,308,206 4.5
------------ ------------ ------
136,003,721 149,838,456 18.1
-------------------------------------------------------------------------------------------------------------------
Semiconductors--Analog 74,600 Linear Technology Corporation 4,265,762 5,147,400 0.6
1,915,800+ National Semiconductor Corporation 67,165,974 78,547,800 9.5
------------ ------------ ------
71,431,736 83,695,200 10.1
-------------------------------------------------------------------------------------------------------------------
Semiconductors--Memory 2,361,900+ Cypress Semiconductor Corporation 33,416,613 36,609,450 4.4
2,978,500+ Integrated Device Technology, Inc. 34,935,556 35,742,000 4.3
275,000 Texas Instruments, Inc. 25,852,245 37,159,375 4.5
------------ ------------ ------
94,204,414 109,510,825 13.2
-------------------------------------------------------------------------------------------------------------------
Total Investments in Stocks 657,879,962 735,563,478 88.8
SHORT-TERM Face
SECURITIES Amount Issue
Commercial Paper* $34,632,000 General Electric Capital Corp., 6.50%
due 10/01/1997 34,632,000 34,632,000 4.2
-------------------------------------------------------------------------------------------------------------------
US Government Agency 35,000,000 Federal National Mortgage Association,
Obligations* 5.50% due 10/14/1997 34,930,486 34,930,486 4.2
-------------------------------------------------------------------------------------------------------------------
Total Investments in Short-Term Securities 69,562,486 69,562,486 8.4
Total Investments $727,442,448 805,125,964 97.2
============
Other Assets Less Liabilities 22,804,271 2.8
------------ ------
Net Assets $827,930,235 100.0%
============ ======
</TABLE>
* Commercial Paper and certain US Government Agency Obligations are traded
on a discount basis; the interest rates shown are the discount rates paid
at the time of purchase by the Company.
+ Non-income producing security.
++ Investments in companies 5% or more of whose outstanding securities are
held by the Company (such companies are defined as 'Affiliated Companies'
in Section 2 (a)(3) of the Investment Company Act of 1940) are as follows:
Net Share Net Dividend
Industry Affiliate Activity Cost Income
- --------------------------------------------------------------------------------
Educational/ Acclaim
Entertainment Entertainment,
Software Inc. -- -- ++
Microcomputer Creative
Peripherals Technology Ltd. (975,700) $(13,018,178) ++
- --------------------------------------------------------------------------------
See Notes to Financial Statements
6 & 7
<PAGE>
Merrill Lynch Technology Fund, Inc., September 30, 1997
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
As of September 30, 1997
<S> <C> <C>
Assets:
Investments, at value (identified cost--$727,442,448) (Note 1a) ............................. $ 805,125,964
Cash ........................................................................................ 3,743
Receivables:
Securities sold ........................................................................... $ 54,440,423
Capital shares sold ....................................................................... 819,114
Dividends ................................................................................. 51,000 55,310,537
-------------
Prepaid registration fees and other assets (Note 1f) ........................................ 23,180
-------------
Total assets ................................................................................ 860,463,424
-------------
Liabilities:
Payables:
Securities purchased ...................................................................... 29,231,980
Capital shares redeemed ................................................................... 1,616,514
Investment adviser (Note 2) ............................................................... 700,366
Distributor (Note 2) ...................................................................... 420,294 31,969,154
-------------
Accrued expenses and other liabilities ...................................................... 564,035
-------------
Total liabilities ........................................................................... 32,533,189
-------------
Net Assets:
Net assets ................................................................................. $ 827,930,235
=============
Net Assets
Consist of:
Class A Shares of Common Stock, $0.10 par value, 100,000,000 shares authorized .............. $ 5,017,672
Class B Shares of Common Stock, $0.10 par value, 300,000,000 shares authorized .............. 8,230,587
Class C Shares of Common Stock, $0.10 par value, 100,000,000 shares authorized .............. 433,074
Class D Shares of Common Stock, $0.10 par value, 300,000,000 shares authorized .............. 877,446
Paid-in capital in excess of par ............................................................ 721,656,709
Accumulated investment loss--net ............................................................ (4,697,451)
Undistributed realized capital gains on investments and foreign currency transactions--net... 18,728,682
Unrealized appreciation on investments--net ................................................. 77,683,516
-------------
Net assets .................................................................................. $ 827,930,235
=============
Net Asset
Value:
Class A--Based on net assets of $293,305,140 and 50,176,716 shares outstanding .............. $ 5.85
=============
Class B--Based on net assets of $459,528,025 and 82,305,867 shares outstanding .............. $ 5.58
=============
Class C--Based on net assets of $24,019,345 and 4,330,739 shares outstanding ................ $ 5.55
=============
Class D--Based on net assets of $51,077,725 and 8,774,459 shares outstanding ................ $ 5.82
=============
</TABLE>
See Notes to Financial Statements.
STATEMENT OF OPERATIONS
For the Six Months Ended September 30, 1997
<TABLE>
<CAPTION>
Investment
Income
(Notes 1d & 1e):
<S> <C> <C>
Interest and discount earned .............................. $ 2,308,617
Dividends ................................................. 93,426
-------------
Total income .............................................. 2,402,043
-------------
Expenses:
Investment advisory fees (Note 2) ......................... 3,700,552
Account maintenance and distribution fees--Class B (Note 2) 2,087,809
Transfer agent fees--Class B (Note 2) ..................... 538,197
Transfer agent fees--Class A (Note 2) ..................... 287,930
Account maintenance and distribution fees--Class C (Note 2) 107,563
Accounting services (Note 2) .............................. 57,932
Printing and shareholder reports .......................... 57,091
Account maintenance fees--Class D (Note 2) ................ 52,900
Registration fees (Note 1f) ............................... 48,119
Transfer agent fees--Class D (Note 2) ..................... 46,984
Professional fees ......................................... 32,157
Transfer agent fees--Class C (Note 2) ..................... 29,993
Custodian fees ............................................ 24,565
Directors' fees and expenses .............................. 20,346
Other ..................................................... 7,356
-------------
Total expenses ............................................ 7,099,494
-------------
Investment loss--net ...................................... (4,697,451)
-------------
Realized &
Unrealized Gain
(Loss) on
Investments &
Foreign Currency
Transactions--Net
(Notes 1b, 1c,
1e & 3):
Realized gain (loss) from:
Investments--net ........................................ $ 37,748,578
Foreign currency transactions--net ...................... (5) 37,748,573
-------------
Change in unrealized depreciation on:
Investments--net ........................................ 224,684,821
Foreign currency transactions--net ...................... 5 224,684,826
------------- -------------
Net Increase in Net Assets Resulting from Operations $ 257,735,948
=============
</TABLE>
See Notes to Financial Statements.
8 & 9
<PAGE>
Merrill Lynch Technology Fund, Inc., September 30, 1997
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the Six For the
Months Ended Year Ended
Increase (Decrease) in Net Assets: Sept. 30, 1997 March 31, 1997
Operations:
<S> <C> <C>
Investment loss--net .............................................. $ (4,697,451) $ (10,367,268)
Realized gain on investments and foreign currency transactions--net 37,748,573 235,762,290
Change in unrealized depreciation on investments
and foreign currency transactions--net .......................... 224,684,826 (118,985,280)
------------- -------------
Net increase in net assets resulting from operations .............. 257,735,948 106,409,742
------------- -------------
Distributions to
Shareholders
(Note 1g):
Realized gain on investments--net:
Class A ......................................................... (50,987,879) (19,050,400)
Class B ......................................................... (83,715,666) (32,293,067)
Class C ......................................................... (4,377,775) (1,699,433)
Class D ......................................................... (8,287,389) (3,052,919)
------------- -------------
Net decrease in net assets resulting from distributions
to shareholders ................................................. (147,368,709) (56,095,819)
------------- -------------
Capital Share
Transactions (Note 4):
Net increase (decrease) in net assets derived from
capital share transactions ...................................... 65,427,786 (273,854,666)
------------- -------------
Net Assets:
Total increase (decrease) in net assets ........................... 175,795,025 (223,540,743)
Beginning of period ............................................... 652,135,210 875,675,953
------------- -------------
End of period ..................................................... $ 827,930,235 $ 652,135,210
============= =============
</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 March 31,
Sept. 30, ----------------------------------------------
Increase (Decrease) in Net Asset Value: 1997 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
Per Share
Operating
Performance:
Net asset value, beginning of period ........................... $ 5.07 $ 4.82 $ 4.89 $ 5.17 $ 5.08
-------- -------- -------- ---------- ---------
Investment income (loss)--net .................................. (.02) (.03) (.03) .05 (.01)
Realized and unrealized gain on investments and foreign currency
transactions--net .............................................. 2.02 .72 .28 .11 1.51
-------- -------- -------- ---------- ---------
Total from investment operations ............................... 2.00 .69 .25 .16 1.50
-------- -------- -------- ---------- ---------
Less dividends and distributions:
Investment income--net ....................................... -- -- -- (.02) --
In excess of investment income--net .......................... -- -- -- (.01) --
Realized gain on investments--net ............................ (1.22) (.44) (.17) (.05) (1.41)
In excess of realized gain on investments--net ............... -- -- (.15) (.36) --
-------- -------- -------- ---------- ---------
Total dividends and distributions .............................. (1.22) (.44) (.32) (.44) (1.41)
-------- -------- -------- ---------- ---------
Net asset value, end of period ................................. $ 5.85 $ 5.07 $ 4.82 $ 4.89 $ 5.17
======== ======== ======== ========== =========
Total Investment
Return:***
Based on net asset value per share ............................. 42.42%++ 14.60% 5.15% 2.86% 35.68%
======== ======== ======== ========== =========
Ratios to Average
Net Assets:
Expenses ....................................................... 1.29%* 1.30% 1.31% 1.33% 1.35%
======== ======== ======== ========== =========
Investment income (loss)--net .................................. (.64%)* (.63%) (.62%) .87% (.11%)
======== ======== ======== ========== =========
Supplemental
Data:
Net assets, end of period (in thousands) ....................... $293,305 $222,118 $246,909 $ 254,188 $ 174,809
======== ======== ======== ========== =========
Portfolio turnover ............................................. 120.82% 176.51% 108.36% 175.57% 350.64%
======== ======== ======== ========== =========
Average commission rate paid++ ................................. $ .0573 $ .0604 $ .0366 -- --
======== ======== ======== ========== =========
<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 March 31,
Sept. 30, ------------------------------------------------
Increase (Decrease) in Net Asset Value: 1997 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
Per Share
Operating
Performance:
Net asset value, beginning of period ........................... $ 4.89 $ 4.66 $ 4.78 $ 5.08 $ 5.03
-------- -------- -------- -------- --------
Investment loss--net ........................................... (.05) (.08) (.09) (.01) (.05)
Realized and unrealized gain on investments and foreign currency
transactions--net .............................................. 1.94 .69 .29 .11 1.48
-------- -------- -------- -------- --------
Total from investment operations .............................. 1.89 .61 .20 .10 1.43
-------- -------- -------- -------- --------
Less dividends and distributions:
Investment income--net ...................................... -- -- -- --+ --
In excess of investment income--net ......................... -- -- -- --+ --
Realized gain on investments--net ........................... (1.20) (.38) (.17) (.05) (1.38)
In excess of realized gain on investments--net .............. -- -- (.15) (.35) --
-------- -------- -------- -------- --------
Total dividends and distributions ............................. (1.20) (.38) (.32) (.40) (1.38)
-------- -------- -------- -------- --------
Net asset value, end of period ................................ $ 5.58 $ 4.89 $ 4.66 $ 4.78 $ 5.08
======== ======== ======== ======== ========
Total Investment
Return:***
Based on net asset value per share ............................. 41.68%++ 13.20% 4.21% 1.78% 34.22%
======== ======== ======== ======== ========
Ratios to Average
Net Assets:
Expenses ....................................................... 2.32%* 2.35% 2.34% 2.38% 2.36%
======== ======== ======== ======== ========
Investment loss--net ........................................... (1.68%)* (1.66%) (1.65%) (.10%) (1.08%)
======== ======== ======== ======== ========
Supplemental
Data:
Net assets, end of period (in thousands) ....................... $459,528 $375,630 $553,819 $614,935 $224,330
======== ======== ======== ======== ========
Portfolio turnover ............................................. 120.82% 176.51% 108.36% 175.57% 350.64%
======== ======== ======== ======== ========
Average commission rate paid++ $ .0573 $ .0604 $ .0366 -- --
======== ======== ======== ======== ========
</TABLE>
* Annualized.
** Based on average shares outstanding during the period.
*** Total investment returns exclude the effects of sales loads.
+ Amount is less than $.01 per share.
++ For the fiscal years beginning on or after September 1, 1995, the Fund is
required to disclose its average commission rate per share for purchases
and sales of equity securities. The "Average Commission Rate Paid"
includes commissions paid in foreign currencies, which have been converted
into US dollars using the prevailing exchange rate on the date of the
transaction. Such conversions may significantly affect the rate shown.
++ Aggregate total investment return.
See Notes to Financial Statements.
10 & 11
<PAGE>
Merrill Lynch Technology Fund, Inc., September 30, 1997
FINANCIAL HIGHLIGHTS (concluded)
<TABLE>
<CAPTION>
Class C** Class D**
------------------------------------------ ----------------------------------------------
For the For the
For the Period For the Period
The following share data and ratios Six Months Oct. 21, Six Months Oct. 21,
have been derived from information Ended For the Year 994+ to Ended For the Year 1994+ to
provided in the financial statements. Sept. 30, Ended March 31, March 31, Sept. 30, Ended March 31, March 31,
--------------- ---------------
Increase (Decrease) in Net Asset Value: 1997 1997 1996 1995 1997 1997 1996 1995
===================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Per Share
Operating
Performance:
Net asset value, beginning of period ... $ 4.87 $ 4.64 $ 4.76 $ 5.75 $ 5.05 $ 4.81 $ 4.89 $ 5.88
------- ------- ------- ------- ------- ------- ------- -------
Investment loss--net ................... (.05) (.08) (.09) -- (.02) (.04) (.05) (.02)
Realized and unrealized gain (loss) on
investments and foreign currency
transactions--net ..................... 1.93 .68 .29 (.62) 2.00 .71 .29 (.60)
------- ------- ------- ------- ------- ------- ------- -------
Total from investment operations ...... 1.88 .60 .20 (.62) 1.98 .67 .24 (.62)
------- ------- ------- ------- ------- ------- ------- -------
Less dividends and distributions:
Investment income--net .............. -- -- -- (.02) -- -- -- (.02)
In excess of investment income--net . -- -- -- (.01) -- -- -- (.01)
Realized gain on investments--net ... (1.20) (.37) (.17) (.04) (1.21) (.43) (.17) (.04)
In excess of realized gain on
investments--net .................... -- -- (.15) (.30) -- -- (.15) (.30)
------- ------- ------- ------- ------- ------- ------- -------
Total dividends and distributions ..... (1.20) (.37) (.32) (.37) (1.21) (.43) (.32) (.37)
------- ------- ------- ------- ------- ------- ------- -------
Net asset value, end of period ........ $ 5.55 $ 4.87 $ 4.64 $ 4.76 $ 5.82 $ 5.05 $ 4.81 $ 4.89
======= ======= ======= ======= ======= ======= ======= =======
Total Investment
Return:***
Based on net asset value per share ..... 41.66%+++ 13.19% 4.22% (11.11%)+++ 42.28%+++ 14.09% 4.94% (10.76%)+++
======= ======= ======= ======= ======= ======= ======= =======
Ratios to Average
Net Assets:
Expenses ............................... 2.35%* 2.37% 2.36% 2.59%* 1.54%* 1.55% 1.56% 1.80%*
======= ======= ======= ======= ======= ======= ======= =======
Investment loss--net ................... (1.70%)* (1.68%) (1.69%) (.02%)* (.89%)* (.88%) (.89%) (.81%)*
======= ======= ======= ======= ======= ======= ======= =======
Supplemental
Data:
Net assets, end of period (in thousands) $24,019 $19,015 $31,090 $23,259 $51,078 $35,372 $43,858 $32,646
======= ======= ======= ======= ======= ======= ======= =======
Portfolio turnover ..................... 120.82% 176.51% 108.36% 175.57% 120.82% 176.51% 108.36% 175.57%
======= ======= ======= ======= ======= ======= ======= =======
Average commission rate paid++ ......... $ .0573 $ .0604 $ .0366 -- $ .0573 $ .0604 $ .0366 --
======= ======= ======= ======= ======= ======= ======= =======
</TABLE>
* Annualized.
** Based on average shares outstanding during the period.
*** Total investment returns exclude the effects of sales loads.
+ Commencement of operations.
++ For the fiscal years beginning on or after September 1, 1995, the Fund is
required to disclose its average commission rate per share for purchases
and sales of equity securities. The "Average Commission Rate Paid"
includes commissions paid in foreign currencies, which have been converted
into US dollars using the prevailing exchange rate on the date of the
transaction. Such conversions may significantly affect the rate shown.
+++ Aggregate total investment return.
See Notes to Financial Statements.
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
Merrill Lynch Technology Fund, Inc. (the "Company") is registered under the
Investment Company Act of 1940 as a non-diversified, open-end management
investment company. 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 Company offers four classes of shares under the Merrill
Lynch Select Pricing(SM) 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 Company.
(a) Valuation of securities--Portfolio securities which 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
which 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
are valued at the last sale price in the case of exchange-traded options or, in
the case of options traded in the over-the-counter market, the last asked price.
Options purchased are valued at the last sale price in the case of
exchange-traded options or, in the case of options traded in the
over-the-counter market, the last bid price. 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 quotations are not readily available are valued at
their fair value as determined in good faith by or under the direction of the
Company's Board of Directors.
(b) Derivative financial instruments--The Company may engage in various
portfolio strategies to seek to increase its return by hedging its portfolio
against adverse movements in the equity, debt and currency markets. Losses may
arise due to changes in the value of the contract or if the counterparty does
not perform under the contract.
o Financial futures contracts--The Company may purchase or sell futures
contracts and options on such futures contracts for the purpose of hedging the
market risk on existing securities or the intended purchase of securities.
Futures contracts are contracts for delayed delivery of securities at a specific
future date and at a specific price or yield. Upon entering into a contract, the
Company deposits and maintains as collateral such initial margin as required by
the exchange on which the transaction is effected. Pursuant to the contract, the
Company 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 Company as unrealized gains or
losses. When the contract is closed, the Company 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 Options--The Company is authorized to write and purchase call and put options.
When the Company writes an option, an amount equal to the premium received by
the Company 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 Company enters into a closing
transaction), the Company 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 Forward foreign exchange contracts--The Company 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
Company's records. However, the effect on operations is recorded from the date
the Company enters into such contracts. Premium or discount is amortized over
the life of the contracts.
o Foreign currency options and futures--The Company 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
Company, sold by the Company but not yet delivered, or committed or anticipated
to be purchased by the Company.
(c) 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
12 & 13
<PAGE>
Merrill Lynch Technology Fund, Inc., September 30, 1997
NOTES TO FINANCIAL STATEMENTS (concluded)
(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.
(d) Income taxes--It is the Company's policy to comply with the requirements of
the Internal Revenue Code applicable to regulated investment companies and to
distribute substantially 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).
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 Company has determined the ex-dividend date. Interest income (including
amortization of discount) is recognized on the accrual basis. 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 to shareholders--Dividends and distributions
paid by the Company are recorded on the ex-dividend dates. Distributions in
excess of realized capital gains are due primarily to differing tax treatments
for futures transactions and post-October losses.
2. Investment Advisory Agreement and Transactions with Affiliates:
The Company 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 Company has also
entered into a Distribution Agreement and Distribution Plans with Merrill Lynch
Funds Distributor, Inc. ("MLFD" or "Distributor"), a wholly-owned subsidiary of
Merrill Lynch Group, Inc.
MLAM is responsible for the management of the Company's portfolio and provides
the administrative services necessary for the operation of the Company. As
compensation for its services to the Company, MLAM receives monthly compensation
at the annual rate of 1.0% of the average daily net assets of the Company.
Pursuant to the Distribution Plans adopted by the Company, pursuant to Rule
12b-1 under the Investment Company Act of 1940, the Company pays the Distributor
an ongoing account maintenance fee and distribution fee. The fees are accrued
daily 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 ........................ 0.25% 0.75%
Class C ........................ 0.25% 0.75%
Class D ........................ 0.25% --
- --------------------------------------------------------------------------------
Pursuant to a sub-agreement with the Distributor, Merrill Lynch, Pierce, Fenner
& Smith Inc. ("MLPF&S"), a subsidiary of ML & Co., also provides account
maintenance and distribution services to the Company. 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 September 30, 1997, MLFD earned underwriting discounts
and direct commissions and MLPF&S earned dealer concessions on sales of the
Company's Class A and Class D Shares as follows:
- --------------------------------------------------------------------------------
MLFD MLPF&S
- --------------------------------------------------------------------------------
Class A ....................... $1,359 $10,814
Class D ....................... $3,213 $38,067
- --------------------------------------------------------------------------------
For the six months ended September 30, 1997, MLPF&S received contingent deferred
sales charges of $79,012 and $280 relating to transactions in Class B and Class
C Shares, respectively.
Merrill Lynch Financial Data Services, Inc. ("MLFDS"), a wholly-owned subsidiary
of ML & Co., is the Company's transfer agent.
Accounting services are provided to the Company by MLAM at cost.
Certain officers and/or directors of the Company are officers and/or directors
of MLAM, PSI, MLFDS, MLFD, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities, for the six
months ended September 30, 1997 were $799,573,752 and $976,760,957,
respectively.
Net realized and unrealized gains (losses) as of September 30, 1997 were as
follows:
- --------------------------------------------------------------------------------
Realized Unrealized
Gains (Losses) Gains
- --------------------------------------------------------------------------------
Long-term investments .................... $37,752,989 $77,683,516
Short-term investments ................... (4,411) --
Foreign currency transactions ............ (5) --
----------- -----------
Total .................................... $37,748,573 $77,683,516
=========== ===========
- --------------------------------------------------------------------------------
As of September 30, 1997, net unrealized appreciation for Federal income tax
purposes aggregated $77,683,516, of which $169,083,618 related to appreciated
securities and $91,400,102 related to depreciated securities. The aggregate cost
of investments at September 30, 1997 for Federal income tax purposes was
$727,442,448.
4. Capital Share Transactions: Net increase (decrease) in net assets derived
from capital share transactions was $65,427,786 and $(273,854,666) for the six
months ended September 30, 1997 and for the year ended March 31, 1997,
respectively.
Transactions in capital shares for each class were as follows:
- --------------------------------------------------------------------------------
Class A Shares for the Six Months Dollar
Ended September 30, 1997 Shares Amount
- --------------------------------------------------------------------------------
Shares sold .............................. 5,451,903 $ 30,345,649
Shares issued to shareholders
in reinvestment of distributions ......... 8,838,083 45,869,650
----------- -------------
Total issued ............................. 14,289,986 76,215,299
Shares redeemed .......................... (7,946,228) (44,854,557)
----------- -------------
Net increase ............................. 6,343,758 $ 31,360,742
=========== =============
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class A Shares for the Year Dollar
Ended March 31, 1997 Shares Amount
- --------------------------------------------------------------------------------
Shares sold .............................. 12,264,759 $ 62,702,121
Shares issued to shareholders
in reinvestment of distributions ......... 3,468,111 17,167,147
----------- -------------
Total issued ............................. 15,732,870 79,869,268
Shares redeemed .......................... (23,090,217) (118,937,167)
----------- -------------
Net decrease ............................. (7,357,347) $ (39,067,899)
=========== =============
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class B Shares for the Six Months Dollar
Ended September 30, 1997 Shares Amount
- --------------------------------------------------------------------------------
Shares sold .............................. 8,453,493 $ 45,345,265
Shares issued to shareholders
in reinvestment of distributions ......... 14,953,197 74,317,386
----------- -------------
Total issued ............................. 23,406,690 119,662,651
Automatic conversion of shares ........... (303,223) (1,652,867)
Shares redeemed .......................... (17,552,871) (95,083,211)
----------- -------------
Net increase ............................. 5,550,596 $ 22,926,573
=========== =============
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class B Shares for the Year Dollar
Ended March 31, 1997 Shares Amount
- --------------------------------------------------------------------------------
Shares sold .............................. 18,468,222 $ 90,190,537
Shares issued to shareholders
in reinvestment of distributions ......... 6,005,201 28,824,967
----------- -------------
Total issued ............................. 24,473,423 119,015,504
Automatic conversion of shares ........... (505,918) (2,524,115)
Shares redeemed .......................... (66,039,743) (326,159,610)
----------- -------------
Net decrease ............................. (42,072,238) $(209,668,221)
=========== =============
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class C Shares for the Six Months Dollar
Ended September 30, 1997 Shares Amount
- --------------------------------------------------------------------------------
Shares sold ............................ 1,391,485 $ 7,471,816
Shares issued to shareholders
in reinvestment of distributions ....... 764,384 3,776,060
----------- -------------
Total issued ........................... 2,155,869 11,247,876
Shares redeemed ........................ (1,731,307) (9,312,970)
----------- -------------
Net increase ........................... 424,562 $ 1,934,906
=========== =============
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class C Shares for the Year Dollar
Ended March 31, 1997 Shares Amount
- --------------------------------------------------------------------------------
Shares sold ............................ 1,668,621 $ 8,095,294
Shares issued to shareholders
in reinvestment of distributions ....... 310,392 1,480,569
----------- -------------
Total issued ........................... 1,979,013 9,575,863
Shares redeemed ........................ (4,779,670) (23,555,658)
----------- -------------
Net decrease ........................... (2,800,657) $ (13,979,795)
=========== =============
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class D Shares for the Six Months Dollar
Ended September 30, 1997 Shares Amount
- --------------------------------------------------------------------------------
Shares sold ............................ 1,724,842 $ 9,593,146
Automatic conversion of shares ......... 292,083 1,652,867
Shares issued to shareholders
in reinvestment of distributions ....... 1,452,639 7,510,141
----------- -------------
Total issued ........................... 3,469,564 18,756,154
Shares redeemed ........................ (1,694,466) (9,550,589)
----------- -------------
Net increase ........................... 1,775,098 $ 9,205,565
=========== =============
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class D Shares for the Year Dollar
Ended March 31, 1997 Shares Amount
- --------------------------------------------------------------------------------
Shares sold ............................ 3,867,166 $ 19,608,228
Automatic conversion of shares ......... 491,920 2,524,115
Shares issued to shareholders
in reinvestment of distributions ....... 548,896 2,711,548
----------- -------------
Total issued ........................... 4,907,982 24,843,891
Shares redeemed ........................ (7,026,818) (35,982,642)
----------- -------------
Net decrease ........................... (2,118,836) $ (11,138,751)
=========== =============
- --------------------------------------------------------------------------------
14 & 15
<PAGE>
This report is not authorized for use as an offer of sale or a 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. Statements and
other information herein are as dated and are subject to change.
Merrill Lynch
Technology Fund, Inc.
Box 9011
Princeton, NJ
08543-9011 #16091--9/97
[Recycling Logo] Printed on post-consumer recycled paper
