MERRILL LYNCH
TECHNOLOGY
FUND, INC.
[GRAPHIC OMITTED]
STRATEGIC
Performance
Annual Report
March 31, 1998
<PAGE>
MERRILL LYNCH TECHNOLOGY FUND, INC.
Portfolio
Information
As of 3/31/98
Ten Largest Holdings Represented Percent of
in the Portfolio Net Assets
Creative Technology Ltd. ..................... 27.2%
Micron Technology, Inc. ...................... 13.8
Integrated Device Technology, Inc. ........... 5.1
Cisco Systems, Inc. .......................... 4.9
Lucent Technologies Inc. ..................... 4.9
Texas Instruments, Inc. ...................... 4.6
Linear Technology Corporation ................ 4.5
Maxim Integrated Products, Inc. .............. 4.5
C-Cube Microsystems, Inc. .................... 4.5
Altera Corporation ........................... 4.2
Ten Largest Industries Represented Percent of
in the Portfolio Net Assets
Microcomputer Peripherals .................... 27.2%
Semiconductors--Memory ....................... 18.4
Semiconductors--Analog ....................... 9.0
Semiconductors--Microprocessors .............. 8.5
Semiconductors--Logic ........................ 8.2
Communications Equipment ..................... 6.8
Communications--Integrated Circuits .......... 5.7
Internetworking .............................. 4.9
Application Specific Integrated Circuits ..... 4.5
Enterprise Software .......................... 4.0
<PAGE>
Merrill Lynch Technology Fund, Inc., March 31, 1998
DEAR SHAREHOLDER
Merrill Lynch Technology Fund, Inc. made money in the March quarter. For the
three months ended March 31, 1998, the Fund's total returns for Class A, Class
B, Class C and Class D Shares were +9.77%, +9.43%, +9.51% and +9.82%,
respectively. (Complete performance results, including average annual total
returns, can be found on pages 3-5 of this report to shareholders.)
Technology stocks generally bottomed in mid-December then rallied sharply
through February. However, early in March two bellwether technology companies,
Intel Corporation and COMPAQ Computer Corporation (Intel's largest customer),
pre-announced earnings shortfalls for the first quarter. As a result, technology
stocks--particularly semiconductor stocks--came under selling pressure. Many
semiconductor companies guided earnings estimates lower for the March quarter.
Analysts and investors then started questioning the secular outlook for personal
computer (PC) demand, the prospect of price wars among PC vendors and the
negative implications of sub-$1,000 PCs. Once again, disk drive companies
pre-announced that excess capacity and aggressive pricing to move inventory
would hurt March quarter results, although several suggested the worst results
would actually occur in the March quarter. Semiconductor capital equipment
companies, which initially expected capital spending reductions to be confined
to South Korea, acknowledged planned reductions in the United States, Europe and
the rest of Asia. Contract manufacturers also reduced expectations.
Despite near-term uncertainties, technology stocks performed well during the
March quarter and resumed their advance in April. Internet stocks have enjoyed
significant gains recently; however, we sold the Fund's modest position in these
stocks because we believe that investor interest in them may prove to be
short-lived. Within the technology universe, expectations appear lowest for
semiconductor and computer peripheral markets (for example, disk drives). Within
the semiconductor sector, we believe Micron Technology, Inc. is the clear
beneficiary of capital spending cuts for memory devices. Memory has been in
excess capacity for three years, and we expect supply to tighten as the year
progresses. Micron's incremental profitability is likely to improve, but we are
uncertain whether the February or May quarter will be the trough for earnings.
In either case, a more positive outlook for memory devices could set a more
positive tone for semiconductor and related stocks. Operating leverage is high
for most semiconductor companies, creating the opportunity for upside earnings
surprises and improving returns on equity. Some of the disk drive companies also
may be at or near an inflection point in their businesses given the reported
reductions in inventory.
During the March quarter, we increased the Fund's investment in communications
stocks by purchasing shares of companies such as Ascend Communications, Inc.,
Cisco Systems, Inc. and Lucent Technologies Inc. We also increased the Fund's
position in semiconductor stocks serving the communications markets by
purchasing shares of Applied Micro Circuits Corporation, Level One
Communications, Inc., PMC-Sierra, Inc. and Vitesse Semiconductor Corporation.
At March 31, 1998, the Fund held 21 stocks and was fully invested. Although we
see opportunities based on company-specific issues, we are concerned that
investors have high expectations for stock returns in general. On a positive
note, the technology industry has become increasingly important to global and
domestic economic growth, and the returns on equity are far superior to most
industries. As a result, we believe more capital will be invested in the
technology industry.
Fiscal Year in Review
For the 12 months ended March 31, 1998, the Fund's total returns for Class A,
Class B, Class C and Class D Shares were +3.96, +3.09%, +2.87% and +3.90%,
respectively. By comparison, the average total return for Lipper Analytical
Services, Inc. Science and Technology Funds was +40.37% for the same 12-month
period. For the first six months of the Fund's fiscal year, the Fund
outperformed the average of the Science and Technology Funds group, with Class A
Shares returning +42.42% as compared to a +40.93% total return for the Lipper
category average. However, the Fund underperformed the average by a wide margin
during the December quarter, with Class A Shares returning -33.50% as compared
to a decline of 13.37% for the average. The Fund's Class A Shares also
underperformed the average for the March quarter, returning +9.77% as compared
to +17.00% for the average.
As discussed in our December letter to shareholders, the crisis in Asia
negatively impacted the outlook for the semiconductor and semiconductor capital
equipment stocks. These stocks, which collectively represented a large
percentage of the Fund's investments, were among the hardest hit within the
technology sector. The relative performance advantage for the Fund disappeared
quickly in mid-October, and most importantly, the Fund lost all of the gains it
had experienced during the first nine months of calendar 1997.
In Conclusion
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
May 5, 1998
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 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.
2 & 3
<PAGE>
Merrill Lynch Technology Fund, Inc., March 31, 1998
PERFORMANCE DATA (concluded)
Total Return Based on a $10,000 Investment
Class A & Class B Shares
A line graph depicting the growth of an investment in the Fund's Class A and
Class B Shares compared to growth of an investment in the S&P 500 Index.
Beginning and ending values are:
4/27/92** 3/98
ML Technology Fund, Inc.+--
Class A Shares* $ 9,475 $23,538
MLTechnology Fund, Inc.+-- $10,000 $23,384
Class B Shares*
S&P 500 Index++ $10,000 $30,697
Class C & Class D Shares
A line graph depicting the growth of an investment in the Fund's Class C and
Class D Shares compared to growth of an investment in the S&P 500 Index.
Beginning and ending values are:
10/21/94** 3/98
ML Technology Fund, Inc.+--
Class C Shares* $10,000 $10,786
ML Technology Fund, Inc.+--
Class D Shares* $ 9,475 $10,518
S&P 500 Index++ $10,000 $25,528
* Assuming maximum sales charge, transaction costs and other operating
expenses, including advisory fees.
** Commencement of operations.
+ ML Technology Fund, Inc. invests primarily in companies offering products
and services in such areas as computers (including software and hardware),
communications, electronics, factory automation, office automation and
other companies substantially involved in the field of technology.
++ This unmanaged broad-based Index is comprised of common stocks. Past
performance is not predictive of future performance.
Average Annual Total Return
% Return Without % Return With
Class A Shares* Sales Charge Sales Charge**
=====================================================================
Year Ended 3/31/98 + 3.96% - 1.50%
- ---------------------------------------------------------------------
Five Years Ended 3/31/98 +11.82 +10.62
- ---------------------------------------------------------------------
Inception (4/27/92) through 3/31/98 +16.60 +15.54
- ---------------------------------------------------------------------
* Maximum sales charge is 5.25%.
** Assuming maximum sales charge.
% Return % Return
Class B Shares* Without CDSC With CDSC**
=====================================================================
Year Ended 3/31/98 + 3.09% - 0.06%
- ---------------------------------------------------------------------
Five Years Ended 3/31/98 +10.68 +10.68
- ---------------------------------------------------------------------
Inception (4/27/92) through 3/31/98 +15.41 +15.41
- ---------------------------------------------------------------------
* 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 3/31/98 +2.87% +2.08%
- ---------------------------------------------------------------------
Inception (10/21/94) through 3/31/98 +2.22 +2.22
- ---------------------------------------------------------------------
* 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 3/31/98 +3.90% -1.55%
- ---------------------------------------------------------------------
Inception (10/21/94) through 3/31/98 +3.08 +1.48
- ---------------------------------------------------------------------
* Maximum sales charge is 5.25%.
** Assuming maximum sales charge.
Recent Performance Results*
<TABLE>
<CAPTION>
12 Month 3 Month Since Inception
Total Return Total Return Total Return
============================================================================================
<S> <C> <C> <C>
ML Technology Fund, Inc. Class A Shares +3.96% +9.77% +148.40%
- --------------------------------------------------------------------------------------------
ML Technology Fund, Inc. Class B Shares +3.09 +9.43 +133.84
- --------------------------------------------------------------------------------------------
ML Technology Fund, Inc. Class C Shares +2.87 +9.51 + 7.86
- --------------------------------------------------------------------------------------------
ML Technology Fund, Inc. Class D Shares +3.90 +9.82 + 11.01
============================================================================================
</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 inception dates are: Class A and
Class B Shares, 4/27/92; and Class C and Class D Shares, 10/21/94.
4 & 5
<PAGE>
Merrill Lynch Technology Fund, Inc., March 31, 1998
SCHEDULE OF INVESTMENTS
<TABLE>
<CAPTION>
Shares Value Percent of
COUNTRY Industries Held Stocks Cost (Note 1a) Net Assets
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Singapore Microcomputer Peripherals 6,654,650 +Creative Technology Ltd.++ $ 90,407,914 $148,897,794 27.2%
---------------------------------------------------------------------------------------------------------------------
Total Investments in Singapore 90,407,914 148,897,794 27.2
====================================================================================================================================
United States Application Specific 1,315,000 +C-Cube Microsystems, Inc. 42,748,640 24,409,688 4.5
Integrated Circuits
---------------------------------------------------------------------------------------------------------------------
Communications 280,000 +Ascend Communications, Inc. 9,837,500 10,605,000 1.9
Equipment 209,600 Lucent Technologies Inc. 18,844,925 26,802,600 4.9
------------ ------------ -----
28,682,425 37,407,600 6.8
---------------------------------------------------------------------------------------------------------------------
Communications-- 30,000 +Applied Micro Circuits Corporation 575,625 675,000 0.1
Integrated Circuits 210,000 +Level One Communications, Inc. 5,596,880 4,908,750 0.9
409,200 +PMC-Sierra, Inc. 14,062,576 15,549,600 2.9
207,500 +Vitesse Semiconductor Corporation 9,395,187 9,752,500 1.8
------------ ------------ -----
29,630,268 30,885,850 5.7
---------------------------------------------------------------------------------------------------------------------
Enterprise Software 375,000 Computer Associates International, Inc. 19,991,330 21,656,250 4.0
---------------------------------------------------------------------------------------------------------------------
Internet Services 33,300 +At Home Corporation (Series A) 874,125 1,119,713 0.2
---------------------------------------------------------------------------------------------------------------------
Internetworking 392,000 +Cisco Systems, Inc. 22,467,136 26,803,000 4.9
---------------------------------------------------------------------------------------------------------------------
Semiconductor Capital 150,000 +Ade Corporation 4,633,000 2,531,250 0.5
Equipment
---------------------------------------------------------------------------------------------------------------------
Semiconductors--Analog 357,100 Linear Technology Corporation 21,445,185 24,617,581 4.5
675,000 +Maxim Integrated Products, Inc. 23,776,250 24,553,125 4.5
------------ ------------ -----
45,221,435 49,170,706 9.0
---------------------------------------------------------------------------------------------------------------------
Semiconductors--Logic 50,000 +3Dfx Interactive, Inc. 1,187,500 1,406,250 0.2
610,000 +Altera Corporation 25,315,003 22,989,375 4.2
550,000 +Xilinx, Inc. 23,272,620 20,590,625 3.8
------------ ------------ -----
49,775,123 44,986,250 8.2
---------------------------------------------------------------------------------------------------------------------
Semiconductors--Memory 2,595,000 +Micron Technology, Inc. 82,658,345 75,417,187 13.8
465,000 Texas Instruments, Inc. 21,735,359 25,168,125 4.6
------------ ------------ -----
104,393,704 100,585,312 18.4
--------------------------------------------------------------------------------------------------------------------
Semiconductors-- 2,008,500 +Integrated Device Technology, Inc. 22,738,166 28,244,531 5.1
Microprocessors 240,000 Intel Corporation 19,015,892 18,720,000 3.4
------------ ------------ -----
41,754,058 46,964,531 8.5
---------------------------------------------------------------------------------------------------------------------
Total Investments in the United States 390,171,244 386,520,150 70.7
====================================================================================================================================
Total Investments $480,579,158 535,417,944 97.9
============
Other Assets Less Liabilities 11,354,175 2.1
------------ -----
Net Assets $546,772,119 100.0%
============ =====
====================================================================================================================================
</TABLE>
+ 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 1940) are as follows:
- -------------------------------------------------------------------------------
Net Share Net Dividend
Industry Affiliate Activity Cost Income
- -------------------------------------------------------------------------------
Microcomputer Creative
Peripherals Technology Ltd. (2,179,200) $(32,548,752) +++
- -------------------------------------------------------------------------------
+++ Non-income producing security.
See Notes to Financial Statements.
PORTFOLIO CHANGES
For the Quarter Ended March 31, 1998
Additions
3Dfx Interactive, Inc.
Altera Corporation
Applied Micro Circuits Corporation
Ascend Communications, Inc.
At Home Corporation (Series A)
Cisco Systems, Inc.
Computer Associates International, Inc.
Level One Communications, Inc.
Lucent Technologies Inc.
PMC-Sierra, Inc.
Vitesse Semiconductor Corporation
Xilinx, Inc.
Deletions
ASM Lithography Holding N.V. (ADR)
Applied Materials, Inc.
COMPAQ Computer Corporation
Cypress Semiconductor Corporation
Cybercash, Inc.
E* TRADE Group, Inc.
KLA-Tencor Corporation
Kulicke and Soffa Industries, Inc.
National Semiconductor Corporation
Novellus Systems, Inc.
Quantum Corporation
Teradyne, Inc.
6 & 7
<PAGE>
Merrill Lynch Technology Fund, Inc., March 31, 1998
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
As of March 31, 1998
===============================================================================================================
<S> <C> <C> <C>
Assets: Investments, at value (identified cost--$480,579,158)(Note 1a) $535,417,944
Receivables:
Securities sold ............................................. $ 16,733,543
Capital shares sold ......................................... 678,581 17,412,124
------------
Prepaid registration fees and other assets (Note 1f) .......... 17,757
------------
Total assets .................................................. 552,847,825
------------
===============================================================================================================
Liabilities: Payables:
Capital shares redeemed ..................................... 3,547,727
Investment adviser (Note 2) ................................. 500,268
Distributor (Note 2) ........................................ 284,548 4,332,543
------------
Accrued expenses and other liabilities ........................ 1,743,163
------------
Total liabilities ............................................. 6,075,706
------------
===============================================================================================================
Net Assets: Net assets .................................................... $546,772,119
============
===============================================================================================================
Net Assets Class A Shares of Common Stock, $0.10 par value,
Consist of: 100,000,000 shares authorized ................................ $ 4,951,397
Class B Shares of Common Stock, $0.10 par value,
300,000,000 shares authorized ................................ 7,028,817
Class C Shares of Common Stock, $0.10 par value,
100,000,000 shares authorized ................................ 382,758
Class D Shares of Common Stock, $0.10 par value,
300,000,000 shares authorized ................................ 817,261
Paid-in capital in excess of par .............................. 655,692,127
Accumulated realized capital losses on investments
and foreign currency transactions--net (Note 5) .............. (157,919,136)
Accumulated distributions in excess of realized capital
gains on investments--net (Note 1g) .......................... (19,019,891)
Unrealized appreciation on investments--net ................... 54,838,786
------------
Net assets .................................................... $546,772,119
============
===============================================================================================================
Net Asset Class A--Based on net assets of $211,443,249 and
Value: 49,513,970 shares outstanding ................................ $ 4.27
============
Class B--Based on net assets of $285,193,129 and
70,288,173 shares outstanding ................................ $ 4.06
============
Class C--Based on net assets of $15,423,918 and
3,827,577 shares outstanding ................................. $ 4.03
============
Class D--Based on net assets of $34,711,823 and
8,172,613 shares outstanding ................................. $ 4.25
============
===============================================================================================================
</TABLE>
See Notes to Financial Statements.
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
For the Year Ended March 31, 1998
===============================================================================================================
<S> <C> <C> <C>
Investment Interest and discount earned ............................ $ 2,891,038
Income Dividends ............................................... 205,703
------------
(Notes 1d & 1e): Total income ............................................ 3,096,741
------------
===============================================================================================================
Expenses: Investment advisory fees (Note 2) ....................... 6,780,768
Account maintenance and distribution fees--Class B (Note 2) 3,750,829
Transfer agent fees--Class B (Note 2) ................... 927,183
Transfer agent fees--Class A (Note 2) ................... 508,214
Account maintenance and distribution fees--Class C (Note 2) 196,363
Account maintenance fees--Class D (Note 2) .............. 101,081
Printing and shareholder reports ........................ 92,858
Registration fees (Note 1f) ............................. 85,447
Transfer agent fees--Class D (Note 2) ................... 84,415
Accounting services (Note 2) ............................ 83,246
Professional fees ....................................... 54,553
Transfer agent fees--Class C (Note 2) ................... 52,975
Custodian fees .......................................... 39,846
Directors' fees and expenses ............................ 38,000
Other ................................................... 12,383
------------
Total expenses .......................................... 12,808,161
------------
Investment loss--net .................................... (9,711,420)
------------
===============================================================================================================
Realized & Realized loss from:
Unrealized Gain Investments--net ...................................... $(157,919,261)
(Loss) on Foreign currency transactions--net .................... (5) (157,919,266)
Investments & -------------
Foreign Currency Change in unrealized appreciation/depreciation on:
Transactions -- Net Investments--net ...................................... 201,840,091
(Notes 1b, 1c, Foreign currency transactions--net .................... 5 201,840,096
1e & 3): ------------- ------------
Net Increase in Net Assets Resulting from Operations .... $ 34,209,410
============
===============================================================================================================
</TABLE>
See Notes to Financial Statements.
8 & 9
<PAGE>
Merrill Lynch Technology Fund, Inc., March 31, 1998
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the Year Ended March 31,
---------------------------------
Increase (Decrease) in Net Assets: 1998 1997
=======================================================================================================================
<S> <C> <C> <C>
Operations: Investment loss--net .................................... $ (9,711,420) $ (10,367,268)
Realized gain (loss) on investments and foreign
currency transactions--net ............................. (157,919,266) 235,762,290
Change in unrealized appreciation/depreciation on
investments and foreign currency transactions--net ..... 201,840,096 (118,985,280)
------------- -------------
Net increase in net assets resulting from operations .... 34,209,410 106,409,742
------------- -------------
=======================================================================================================================
Distributions to Realized gain on investments--net:
Shareholders Class A ............................................... (44,407,215) (19,050,400)
(Note 1g): Class B ............................................... (72,911,047) (32,293,067)
Class C ............................................... (3,812,765) (1,699,433)
Class D ............................................... (7,217,791) (3,052,919)
In excess of realized gain on investments--net:
Class A ............................................... (6,580,664) --
Class B ............................................... (10,804,619) --
Class C ............................................... (565,010) --
Class D ............................................... (1,069,598) --
------------- -------------
Net decrease in net assets resulting from distributions
to shareholders ........................................ (147,368,709) (56,095,819)
------------- -------------
=======================================================================================================================
Capital Share Net increase (decrease) in net assets derived from
Transactions capital share transactions ............................. 7,796,208 (273,854,666)
(Note 4): ------------- -------------
=======================================================================================================================
Net Assets: Total decrease in net assets ............................ (105,363,091) (223,540,743)
Beginning of year ....................................... 652,135,210 875,675,953
------------- -------------
End of year ............................................. $ 546,772,119 $ 652,135,210
============= =============
=======================================================================================================================
</TABLE>
See Notes to Financial Statements.
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
The following per share data and ratios have been derived Class A*
from information provided in the financial statements. -------------------------------------------------------------
For the Year Ended March 31,
-------------------------------------------------------------
Increase (Decrease) in Net Asset Value: 1998 1997 1996 1995 1994
===================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of year ............. $ 5.07 $ 4.82 $ 4.89 $ 5.17 $ 5.08
Operating --------- --------- --------- --------- ---------
Performance: Investment income (loss)--net .................. (.04) (.03) (.03) .05 (.01)
Realized and unrealized gain on investments
and foreign currency transactions--net ........ .46 .72 .28 .11 1.51
--------- --------- --------- --------- ---------
Total from investment operations ............... .42 .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 ............ (1.06) (.44) (.17) (.05) (1.41)
In excess of realized gain on investments--net (.16) -- (.15) (.36) --
--------- --------- --------- --------- ---------
Total dividends and distributions .............. (1.22) (.44) (.32) (.44) (1.41)
--------- --------- --------- --------- ---------
Net asset value, end of year ................... $ 4.27 $ 5.07 $ 4.82 $ 4.89 $ 5.17
========= ========= ========= ========= =========
===================================================================================================================================
Total Investment Based on net asset value per share ............. 3.96% 14.60% 5.15% 2.86% 35.68%
Return:** ========= ========= ========= ========= =========
===================================================================================================================================
Ratios to Average Expenses ....................................... 1.27% 1.30% 1.31% 1.33% 1.35%
Net Assets: ========= ========= ========= ========= =========
Investment income (loss)--net .................. (.82%) (.63%) (.62%) .87% (.11%)
========= ========= ========= ========= =========
===================================================================================================================================
Supplemental Net assets, end of year (in thousands) ......... $ 211,443 $ 222,118 $ 246,909 $ 254,188 $ 174,809
Data: ========= ========= ========= ========= =========
Portfolio turnover ............................. 206.40% 176.51% 108.36% 175.57% 350.64%
========= ========= ========= ========= =========
Average commission rate paid++ ................. $ .0538 $ .0604 $ .0366 -- --
========= ========= ========= ========= =========
===================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
The following per share data and ratios have been derived Class B*
from information provided in the financial statements. ------------------------------------------------------------
For the Year Ended March 31,
------------------------------------------------------------
Increase (Decrease) in Net Asset Value: 1998 1997 1996 1995 1994
==================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of year ............. $ 4.89 $ 4.66 $ 4.78 $ 5.08 $ 5.03
Operating --------- --------- --------- --------- ---------
Performance: Investment loss--net ........................... (.09) (.08) (.09) (.01) (.05)
Realized and unrealized gain on investments
and foreign currency transactions--net ........ .46 .69 .29 .11 1.48
--------- --------- --------- --------- ---------
Total from investment operations ............... .37 .61 .20 .10 1.43
--------- --------- --------- --------- ---------
Less dividends and distributions:
Investment income--net ....................... -- -- -- --+ --
In excess of investment income--net .......... -- -- -- --+ --
Realized gain on investments--net ............ (1.05) (.38) (.17) (.05) (1.38)
In excess of realized gain on investments--net (.15) -- (.15) (.35) --
--------- --------- --------- --------- ---------
Total dividends and distributions .............. (1.20) (.38) (.32) (.40) (1.38)
--------- --------- --------- --------- ---------
Net asset value, end of year ................... $ 4.06 $ 4.89 $ 4.66 $ 4.78 $ 5.08
========= ========= ========= ========= =========
==================================================================================================================================
Total Investment Based on net asset value per share ............. 3.09% 13.20% 4.21% 1.78% 34.22%
Return:** ========= ========= ========= ========= =========
==================================================================================================================================
Ratios to Average Expenses ....................................... 2.31% 2.35% 2.34% 2.38% 2.36%
Net Assets: ========= ========= ========= ========= =========
Investment loss--net ........................... (1.85%) (1.66%) (1.65%) (.10%) (1.08%)
========= ========= ========= ========= =========
==================================================================================================================================
Supplemental Net assets, end of year (in thousands) ......... $ 285,193 $ 375,630 $ 553,819 $ 614,935 $ 224,330
Data: ========= ========= ========= ========= =========
Portfolio turnover ............................. 206.40% 176.51% 108.36% 175.57% 350.64%
========= ========= ========= ========= =========
Average commission rate paid++ ................. $ .0538 $ .0604 $ .0366 -- --
========= ========= ========= ========= =========
==================================================================================================================================
</TABLE>
* Based on average shares outstanding.
** Total investment returns exclude the effects of sales loads.
+ Amount is less than $.01 per share.
++ For 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.
See Notes to Financial Statements.
10 & 11
<PAGE>
Merrill Lynch Technology Fund, Inc., March 31, 1998
FINANCIAL HIGHLIGHTS (concluded)
<TABLE>
<CAPTION>
The following per share data and ratios Class C** Class D**
have been derived from information provided ----------------------------------------- ----------------------------------------
in the financial statements. For the For the
Period Period
For the Year Oct. 21, For the Year Oct. 21,
Ended March 31, 1994+ to Ended March 31, 1994+ to
----------------------------- March 31, ---------------------------- March 31,
Increase (Decrease) in Net Asset Value: 1998 1997 1996 1995 1998 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 ................... (.09) (.08) (.09) -- (.05) (.04) (.05) (.02)
Realized and unrealized gain (loss) on
investments and foreign currency
transactions--net ...................... .45 .68 .29 (.62) .46 .71 .29 (.60)
------- ------- ------- ------- ------- ------- ------- -------
Total from investment operations ....... .36 .60 .20 (.62) .41 .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 .... (1.05) (.37) (.17) (.04) (1.05) (.43) (.17) (.04)
In excess of realized gain on
investments--net ..................... (.15) -- (.15) (.30) (.16) -- (.15) (.30)
------- ------- ------- ------- ------- ------- ------- -------
Total dividends and distributions ...... (1.20) (.37) (.32) (.37) (1.21) (.43) (.32) (.37)
------- ------- ------- ------- ------- ------- ------- -------
Net asset value, end of period ......... $ 4.03 $ 4.87 $ 4.64 $ 4.76 $ 4.25 $ 5.05 $ 4.81 $ 4.89
======= ======= ======= ======= ======= ======= ======= =======
===================================================================================================================================
Total Investment Return:***
Based on net asset value per share ..... 2.87% 13.19% 4.22% (11.11%)++ 3.90% 14.09% 4.94% (10.76%)++
======= ======= ======= ======= ======= ======= ======= =======
===================================================================================================================================
Ratios to Average Net Assets:
Expenses ............................... 2.33% 2.37% 2.36% 2.59%* 1.52% 1.55% 1.56% 1.80%*
======= ======= ======= ======= ======= ======= ======= =======
Investment loss--net ................... (1.87%) (1.68%) (1.69%) (.02%)* (1.07%) (.88%) (.89%) (.81%)*
======= ======= ======= ======= ======= ======= ======= =======
===================================================================================================================================
Supplemental Data:
Net assets, end of period (in thousands) $15,424 $19,015 $31,090 $23,259 $34,712 $35,372 $43,858 $32,646
======= ======= ======= ======= ======= ======= ======= =======
Portfolio turnover ..................... 206.40% 176.51% 108.36% 175.57% 206.40% 176.51% 108.36% 175.57%
======= ======= ======= ======= ======= ======= ======= =======
Average commission rate paid++ ......... $ .0538 $ .0604 $ .0366 -- $ .0538 $ .0604 $ .0366 --
======= ======= ======= ======= ======= ======= ======= =======
===================================================================================================================================
</TABLE>
* Annualized.
** Based on average shares outstanding.
*** Total investment returns exclude the effects of sales loads.
+ Commencement of operations.
++ For 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. The Company 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 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 financial
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 covered call options
and purchase put options. When the Company writes an option, an amount equal to
the premium received by the Com pany 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
12 & 13
<PAGE>
Merrill Lynch Technology Fund, Inc., March 31, 1998
NOTES TO FINANCIAL STATEMENTS (continued)
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 (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 post-October losses.
(h) Reclassification--Generally accepted accounting principles require that
certain components of net assets be adjusted to reflect permanent differences
between financial and tax reporting. Accordingly, current year's permanent
book/tax differences of $5 have been reclassified between accumulated net
realized capital losses and accumulated net investment loss, differences of $125
have been reclassified between paid-in capital in excess of par and accumulated
net realized capital losses and differences of $9,711,425 have been reclassified
between paid-in capital in excess of par and accumulated net investment loss.
These reclassifications have no effect on net assets or net asset values per
share.
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 in accordance with
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 year ended March 31, 1998, 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 ...................... $2,414 $22,624
Class D ...................... $5,656 $72,230
- ----------------------------------------------------------
For the year ended March 31, 1998, MLPF&S received contingent deferred sales
charges of $1,101,032 and $9,956 relating to transactions in Class B and Class C
Shares, respectively. Furthermore, MLPF&S received contingent deferred sales
charges of $34,938 relating to transactions subject to front-end sales charge
waivers in Class A Shares.
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
year ended March 31, 1998 were $1,294,882,244 and $1,453,703,449, respectively.
Net realized losses for the year ended March 31, 1998 and net unrealized gains
as of March 31, 1998 were as follows:
- ----------------------------------------------------------------
Realized Unrealized
Losses Gains
- ----------------------------------------------------------------
Long-term investments ......... $(157,913,815) $54,838,786
Short-term investments ........ (5,446) --
Foreign currency transactions . (5) --
------------- -----------
Total ......................... $(157,919,266) $54,838,786
============= ===========
- ----------------------------------------------------------------
As of March 31, 1998, net unrealized appreciation for Federal income tax
purposes aggregated $54,260,837, of which $87,934,342 related to appreciated
securities and $33,673,505 related to depreciated securities. The aggregate cost
of investments at March 31, 1998 for Federal income tax purposes was
$481,157,107.
4. Capital Share Transactions:
Net increase (decrease) in net assets derived from capital share transactions
was $7,796,208 and $(273,854,666) for the years ended March 31, 1998 and March
31, 1997, respectively.
Transactions in capital shares for each class were as follows:
- --------------------------------------------------------------------------------
Class A Shares for the Year Dollar
Ended March 31, 1998 Shares Amount
- --------------------------------------------------------------------------------
Shares sold .............................. 14,964,900 $ 71,410,844
Shares issued to shareholders
in reinvestment of distributions ......... 8,838,083 45,869,650
----------- -------------
Total issued ............................. 23,802,983 117,280,494
Shares redeemed .......................... (18,121,971) (89,086,567)
----------- -------------
Net increase ............................. 5,681,012 $ 28,193,927
=========== =============
- --------------------------------------------------------------------------------
14 & 15
<PAGE>
Merrill Lynch Technology Fund, Inc., March 31, 1998
NOTES TO FINANCIAL STATEMENTS (concluded)
- --------------------------------------------------------------------------------
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 Year Dollar
Ended March 31, 1998 Shares Amount
- --------------------------------------------------------------------------------
Shares sold .............................. 19,604,583 $ 91,957,240
Shares issued to shareholders
in reinvestment of distributions ......... 14,953,197 74,317,386
----------- -------------
Total issued ............................. 34,557,780 166,274,626
Shares redeemed .......................... (40,126,849) (188,834,322)
Automatic conversion of shares ........... (898,029) (4,025,429)
----------- -------------
Net decrease ............................. (6,467,098) $ (26,585,125)
=========== =============
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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 Year Dollar
Ended March 31, 1998 Shares Amount
- --------------------------------------------------------------------------------
Shares sold .............................. 2,933,295 $ 13,806,155
Shares issued to shareholders
in reinvestment of distributions ......... 764,385 3,776,060
----------- -------------
Total issued ............................. 3,697,680 17,582,215
Shares redeemed .......................... (3,776,280) (17,726,568)
----------- -------------
Net decrease ............................. (78,600) $ (144,353)
=========== =============
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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 Year Dollar
Ended March 31, 1998 Shares Amount
- --------------------------------------------------------------------------------
Shares sold .............................. 4,505,104 $ 21,202,799
Automatic conversion of shares ........... 861,473 4,025,429
Shares issued to shareholders
in reinvestment of distributions ......... 1,452,639 7,510,141
----------- -------------
Total issued ............................. 6,819,216 32,738,369
Shares redeemed .......................... (5,645,964) (26,406,610)
----------- -------------
Net increase ............................. 1,173,252 $ 6,331,759
=========== =============
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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)
=========== =============
- --------------------------------------------------------------------------------
5. Capital Loss Carryforward:
At March 31, 1998, the Fund had a net capital loss carryforward of approximately
$60,435,000, all of which expires in 2006. This amount will be available to
offset like amounts of any future taxable gains.
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders,
Merrill Lynch Technology Fund, Inc.:
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of Merrill Lynch Technology Fund, Inc. as of March
31, 1998, the related statements of operations for the year then ended and
changes in net assets for each of the years in the two-year period then ended,
and the financial highlights for each of the years in the five-year period then
ended. These financial statements and the financial highlights are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements and the financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned at March
31, 1998 by correspondence with the custodian. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Merrill Lynch
Technology Fund, Inc. as of March 31, 1998, the results of its operations, the
changes in its net assets, and the financial highlights for the respective
stated periods in conformity with generally accepted accounting principles.
Deloitte & Touche LLP
Princeton, New Jersey
May 6, 1998
16 & 17
<PAGE>
Merrill Lynch Technology Fund, Inc., March 31, 1998
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
18
<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--3/98
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