MERRILL LYNCH
FUNDAMENTAL
GROWTH
FUND, INC.
FUND LOGO
Quarterly Report
May 31, 1995
Officers and Directors
Arthur Zeikel, President and Director
Joe Grills, Director
Walter Mintz, Director
Melvin R. Seiden, Director
Steven B. Swensrud, Director
Harry Woolf, Director
Terry K. Glenn, Executive Vice President
Norman R. Harvey, Senior Vice President
Donald C. Burke, Vice President
Lawrence R. Fuller, Vice President and
Portfolio Manager
Gerald M. Richard, Treasurer
Michael J. Hennewinkel, Secretary
<PAGE>
Custodian
The Chase Manhattan Bank, N.A.
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
This report is not authorized for use as an offer of sale or a
solicitation of an offer to buy shares of the Fund unless
accompanied or preceded by the Fund's current prospectus. Past
performance results shown in this report should not be considered a
representation of future performance. Investment return and
principal value of shares will fluctuate so that shares, when
redeemed, may be worth more or less than their original cost.
Merrill Lynch
Fundamental
Growth Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
<PAGE>
MERRILL LYNCH FUNDAMENTAL GROWTH FUND, INC.
DEAR SHAREHOLDER
For the quarter ended May 31, 1995, total returns for Merrill Lynch
Fundamental Growth Fund, Inc.'s Class A, Class B, Class C and Class
D Shares were +6.62%, +6.22%, +6.22% and +6.42%, respectively,
compared to a total return of +10.12% for the unmanaged Standard &
Poor's 500 Index (S&P 500). (Results shown do not reflect sales
charges; results would be lower if sales charges were included.
Complete performance information, including average annual total
returns, can be found on pages 3 and 4 of this report to
shareholders.) One reason for the Fund's comparative under-
performance to the S&P 500 was its underweighting of the
financial services sector as compared to the S&P 500. We reduced
financial services holdings significantly near the end of the
February quarter in response to concerns about relatively high stock
valuations. However, the valuations continued to rise to even higher
relative levels for many major banks, insurance companies and
mortgage finance organizations.
Another element reflected in the comparative performance was that a
number of the large-capitalization global consumer growth companies
in the Fund underperformed the S&P 500 during the May quarter. These
companies include Procter & Gamble Co., Duracell International Inc.,
The Gillette Co., International Flavors & Fragrances Inc. and The
William Wrigley Jr. Co. As the foreign exchange value of the US
dollar rose during the quarter ended May 31, 1995, it appeared that
some investors became concerned about the sustainability of the
relatively rapid earnings growth of these global companies and
reduced investment positions.
Among the Fund's top ten holdings, which represented 32.4% of net
assets at the end of the May quarter, only three had total
investment returns that were less than the S&P 500 during the
quarter. (See page 7 of this report for the listing of top ten
holdings.) These companies were Pfizer Inc., our largest holding,
Procter & Gamble Co. and Amgen, Inc. The Fund's second-largest
holding, Compaq Computer Corp. saw its share price decline during
the February quarter after management announced the likelihood of
unchanged earnings results for the first quarter of 1995 resulting
from higher expenses from major new product introductions. The stock
price recovered substantially after management reported first-
quarter 1995 results in-line with its projections.
<PAGE>
The Environment
During the May 31, 1995 quarter, the outlook for growth of consumer
spending on general merchandise was scaled back from prior
expectations. This deterioration was probably a result of the
substantial rise in Federal income tax payments in April, a deferral
of a large percentage of Federal tax refunds and a weakening of the
growth rate in employment. The declines in payroll employment in the
months of April and May reflect, among other factors, the recent
sharp drop in durable goods orders for transportation equipment.
Long-term US Treasury bond interest rates have declined
substantially and quickly in response to the surprising weakness in
consumer spending on general merchandise, including durable goods
for transportation and housing appliances. The related decline in
residential mortgage finance rates caused a rise in mortgage
refinancing and homebuilder orders for new housing, although new
home sales have been in a downtrend since the fourth quarter of
1993. We think there may be a rebound in the rate of growth of
consumer spending. Also, capital investment in new
telecommunications and computer systems in the United States and in
major overseas markets continues at a rapid pace. The decline in the
value of the US dollar over the last year relative to currencies of
some of our major trading partners is resulting in imported
inflation. The prices of non-petroleum imports in April were 4.7%
above year-ago levels, and the prices of imported industrial
supplies were up 17.1% from year-ago levels, whereas the overall
Consumer Price Index is up 3.1% from one year ago. The economic
outlook for 1995 compared to 1994 appears to be a continuation of
slower real growth and higher inflation, with capital spending by
business on technology the leading growth sector.
Investment Strategy
There were some minor changes in the Fund's ten largest company
holdings and industry positions during the May quarter. We increased
the Fund's position in computers from 3.7% of net assets at the end
of the February quarter to 6.4%, at the end of the May quarter,
primarily through our investment in Hewlett-Packard Co. The top ten
industries accounted for 52.3% of net assets on May 31, 1995,
compared to 46.2% on February 28, 1995. We rebuilt the Fund's
technology sector weighting from 9.2% of net assets on February 28,
1995 to 17.3% as of May 31, 1995. The operating results released by
the major technology companies for the first quarter of 1995, as
well as reports of capital spending intentions by corporations for
technology, favor relatively high rates of real growth and
sustainable profitability during the remainder of 1995. Investment
holdings in the consumer nondurables and service industry sectors
comprised 59.2% of net assets on May 31, 1995, compared to 45.0% at
the end of the February quarter. These companies are predominantly
large-capitalization, high-quality, global growth companies.
<PAGE>
The Fund's cash reserves were 3.9% of net assets at the end of the
May quarter compared to 25.3% on February 28, 1995. The reduction in
the Fund's cash reserve position was based on increased confidence
in a positive economic and stock market outlook after the first
quarter 1995 corporate results were reported.
Portfolio Matters
We held common stock and convertible debt securities of 49 companies
at the end of the May quarter compared to 50 at the end of the
February quarter.
During the May 31, 1995 quarter, we eliminated six companies from
the Fund, introduced five new companies and added a company as a
result of a distribution of stock from an existing investment
holding. Capital losses were realized on the eliminations of
investments in Bed, Bath & Beyond, Inc., The Olsten Corp., Shaw
Industries, Inc. and Sybase, Inc. Capital gains were realized on the
elimination of holdings in QUALCOMM Inc. and Texas Instruments, Inc.
The deterioration in consumer spending and the general retailing
environment during the May quarter prompted the elimination of the
Bed, Bath & Beyond, Inc. and Shaw Industries, Inc. holdings. We
eliminated The Olsten Corp. stock and convertible debt holdings
because of a rapid month-to-month decline in the national employment
data for temporary personnel as well as potential changes in the
Federal reimbursement formula for temporary and home healthcare
personnel. We sold Sybase, Inc. stock at a significant capital loss
because of an unanticipated change in the growth outlook for this
relational database software company. We removed QUALCOMM Inc. at a
capital gain because of our concerns about a potential shortfall in
future growth. We think that there could be a slower-than-
anticipated pace of capital investment in the company's proprietary
digital communication technology. Finally, we sold Texas
Instruments, Inc. at a capital gain as a result of a relatively high
valuation.
We introduced five new companies to the Fund in the May quarter. Bay
Networks Inc., which was added to the communications industry
sector, is the second-largest network communications systems company
after cisco Systems, Inc. We think that Bay Networks Inc. has an
attractive valuation and strong business fundamentals in a rapidly
growing industry. We added Hewlett-Packard Co. to the portfolio
because of its positive outlook based on backlogs for new computer
equipment and on high rates of growth of new service businesses. We
added Microsoft Corp. to the Fund because we expect an acceleration
in growth of revenue and earnings from new product introductions
during the second half of 1995. We purchased shares of Toys "R" Us,
Inc. because we expect the growth rate of revenues and earnings to
recover to higher rates. We believe this recovery can be derived
from the ongoing restructuring of the company's store format as well
as a possible recovery in its merchandising sales during the second
half of 1995. Finally, we added Darden Restaurants Inc. to the
portfolio as a result of a stock distribution to shareholders of
General Mills, Inc.
<PAGE>
In Conclusion
The significant decline in US interest rates during the May quarter
should improve the valuation ratios of the large-capitalization
growth companies in the Fund during the remainder of 1995, in our
view. It appears that the initial reaction of investors to the
decline in US interest rates was to shift investments into the
housing and consumer durable goods-related sectors of the stock
market. Although approximately 80% of the companies in the Fund had
positive total returns during the May quarter, many of the largest
global consumer nondurable goods and service companies in the Fund
had total returns less than the return on the S&P 500. For those
companies where managements continue to produce above-average
earnings growth, we expect the stock appreciation to be above-
average over the long run.
We thank you for your continued investment in Merrill Lynch
Fundamental Growth Fund, Inc., and we look forward to discussing our
investment strategy and activities in our upcoming annual
shareholder report.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Lawrence R. Fuller)
Lawrence R. Fuller
Vice President and Portfolio Manager
June 22, 1995
PERFORMANCE DATA
About Fund Performance
Since October 21, 1994, investors have been able to purchase shares
of the Fund through the Merrill Lynch Select Pricing SM System, which
offers four pricing alternatives:
<PAGE>
* 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, as detailed in the Fund's prospectus. If you were a Class
A shareholder prior to October 21, 1994, your Class A Shares were
redesignated to Class D Shares on October 21, 1994, which, in the
case of certain eligible investors, were simultaneously exchanged
for Class A Shares.
* Class B Shares are subject to a maximum contingent deferred sales
charge of 4% if redeemed during the first year, decreasing 1% each
year thereafter to 0% after the fourth year. In addition, Class B
Shares are subject to a distribution fee of 0.75% and an account
maintenance fee of 0.25%. These shares automatically convert to
Class D Shares after 8 years. If you were a Class B shareholder
prior to October 21, 1994, your Class B Shares were redesignated to
Class C Shares on October 21, 1994.
* Class C Shares are subject to a distribution fee of 0.75% and an
account maintenance fee of 0.25%. In addition, Class C Shares are
subject to a 1% contingent deferred sales charge if redeemed within
one year of purchase.
* Class D Shares incur a maximum initial sales charge of 5.25% and
an account maintenance fee of 0.25% (but no distribution fee).
Performance data for the Fund's Class C and Class D Shares are
presented in the "Performance Summary," "Recent Performance Results"
and the "Average Annual Total Return" tables below and on page 4.
Data for Class A Shares and Class B Shares are also presented in the
"Recent Performance Results" and "Aggregate Total Return" tables
below and on page 4.
The "Recent Performance Results" table shows investment results
before the deduction of any sales charges for Class C and Class D
Shares for the 12-month and 3-month periods ended May 31, 1995 and
for Class A and Class B Shares for the since inception and 3-month
periods ended May 31, 1995. All data in this table assume imposition
of the actual total expenses incurred by each class of shares during
the relevant period.
None of the past results shown should be considered a representation
of future performance. Investment return and principal value of
shares will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost. Dividends paid to each class
of shares will vary because of the different levels of account
maintenance, distribution and transfer agency fees applicable to
each class, which are deducted from the income available to be paid
to shareholders.
<PAGE>
Average Annual Total Return
% Return % Return
Without CDSC With CDSC**
Class C Shares*
Year Ended 3/31/95 +7.96% +6.96%
Inception (12/24/92)
through 3/31/95 +1.59 +1.59
[FN]
*Maximum contingent deferred sales charge is 1% and is reduced to 0%
after 1 year. On 10/21/94, Class B Shares were redesignated to Class
C Shares.
**Assuming payment of applicable contingent deferred sales charge.
% Return Without % Return With
Sales Charge Sales Charge**
Class D Shares*
Year Ended 3/31/95 +8.83% +3.11%
Inception (12/24/92)
through 3/31/95 +2.37 -0.04
[FN]
*Maximum sales charge is 5.25%. On 10/21/94, Class A Shares were
redesignated to Class D Shares.
**Assuming maximum sales charge.
Aggregate Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Inception (10/21/94)
through 3/31/95 +5.66% +0.11%
[FN]
*Maximum sales charge is 5.25%. On 10/21/94, Class A Shares were
redesignated to Class D Shares.
**Assuming maximum sales charge.
<PAGE>
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Inception (10/21/94)
through 3/31/95 +5.22% +1.22%
[FN]
*Maximum contingent deferred sales charge is 4% and is reduced to 0%
after 4 years. On 10/21/94, Class B Shares were redesignated to
Class C Shares.
**Assuming payment of applicable contingent deferred sales charge.
PERFORMANCE DATA (concluded)
<TABLE>
Performance Summary--Class C Shares***
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<C> <C> <C> <C> <C> <C>
12/24/92--12/31/92 $10.00 $ 9.92 -- -- - 0.80%
1993 9.92 10.43 -- -- + 5.14
1994 10.43 9.46 $0.255 $0.051 - 6.28
1/1/95--5/31/95 9.46 10.41 -- -- +10.04
------ ------
Total $0.255 Total $0.051
Cumulative total return as of 5/31/95: + 7.57%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures assume reinvestment of all dividends and capital gains
distributions at net asset value on the ex-dividend date, and do not
include sales charge; results would be lower if sales charge was
included.
***As a result of the implementation of the Merrill Lynch Select
Pricing SM System, Class B Shares of the Fund outstanding prior to
October 21, 1994 were redesignated Class C Shares.
</TABLE>
<PAGE>
<TABLE>
Performance Summary--Class D Shares***
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<C> <C> <C> <C> <C> <C>
12/24/92--12/31/92 $10.00 $ 9.92 -- -- - 0.80%
1993 9.92 10.51 -- -- + 5.95
1994 10.51 9.61 $0.255 $0.051 - 5.56
1/1/95--5/31/95 9.61 10.61 -- -- +10.41
------ ------
Total $0.255 Total $0.051
Cumulative total return as of 5/31/95: + 9.59%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures assume reinvestment of all dividends and capital gains
distributions at net asset value on the ex-dividend date, and do not
reflect deduction of any sales charge; results would be lower if
sales charge was deducted.
***As a result of the implementation of the Merrill Lynch Select
Pricing SM System, Class A Shares of the Fund outstanding prior to
October 21, 1994 were redesignated Class D Shares.
</TABLE>
<TABLE>
Recent Performance Results
<CAPTION>
12 Month 3 Month
5/31/95 2/28/95 5/31/94++ % Change++ % Change
<S> <C> <C> <C> <C> <C>
ML Fundamental Growth Fund, Inc. Class A Shares* $10.63 $9.97 $9.99 + 9.32%(1) + 6.62%
ML Fundamental Growth Fund, Inc. Class B Shares* 10.41 9.80 9.85 + 8.63(1) + 6.22
ML Fundamental Growth Fund, Inc. Class C Shares* 10.41 9.80 9.49 +12.75(1) + 6.22
ML Fundamental Growth Fund, Inc. Class D Shares* 10.61 9.97 9.59 +18.84(1) + 6.42
Standard & Poor's 500 Index** 533.41 487.39 456.50 +16.85 + 9.44
ML Fundamental Growth Fund, Inc. Class A Shares--Total Return* + 9.90(2) + 6.62
ML Fundamental Growth Fund, Inc. Class B Shares--Total Return* + 9.21(2) + 6.22
ML Fundamental Growth Fund, Inc. Class C Shares--Total Return* +13.35(2) + 6.22
ML Fundamental Growth Fund, Inc. Class D Shares--Total Return* +14.27(2) + 6.42
Standard & Poor's 500 Index--Total Return** +20.09 +10.12
<FN>
*Investment results shown do not reflect sales charges; results
shown would be lower if a sales charge was included.
**An unmanaged broad-based Index comprised of common stocks. Total
investment returns for unmanaged indexes are based on estimates.
++Investment results shown for Class A and Class B Shares are since
inception (10/21/94).
(1)Percent change includes reinvestment of $0.255 per share capital
gains distributions.
(2)Percent change includes reinvestment of $0.051 per share income
dividends and $0.255 per share capital gains distributions.
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS
<CAPTION>
Percent of
Industries Shares Held Stocks & Bonds Cost Value Net Assets
<S> <C> <S> <C> <C> <C>
Advertising 45,000 Interpublic Group of Companies, Inc. $ 1,610,850 $ 1,659,375 1.5%
Automotive & Truck 20,000 Ek Chor China Motorcycle Co. Ltd. 734,300 342,500 0.3
Banking & Financial 10,000 State Street Boston Corp. 352,275 336,250 0.3
Beverages 60,000 The Coca-Cola Co. 3,211,100 3,712,500 3.5
40,000 PepsiCo, Inc. 1,511,350 1,960,000 1.8
------------ ------------ ------
4,722,450 5,672,500 5.3
Broadcast--Cable 100,000 TCI Communications, Inc. (Class A) 2,312,273 2,100,000 2.0
60,000 Time Warner Inc. 2,295,756 2,377,500 2.2
------------ ------------ ------
4,608,029 4,477,500 4.2
Broadcast--Media 30,000 Turner Broadcasting System, Inc. 787,265 596,250 0.6
Chemical Producers 60,000 Duracell International Inc. 2,588,206 2,595,000 2.4
30,000 Great Lakes Chemical Corp. 1,962,268 1,830,000 1.7
------------ ------------ ------
4,550,474 4,425,000 4.1
Communications 60,000 Bay Networks Inc. 2,202,625 2,182,500 2.0
50,000 3Com Corp. 2,677,588 3,187,500 3.0
------------ ------------ ------
4,880,213 5,370,000 5.0
<PAGE>
Computers 100,000 Compaq Computer Corp. 3,762,873 3,912,500 3.6
45,000 Hewlett-Packard Co. 2,907,252 2,975,625 2.8
------------ ------------ ------
6,670,125 6,888,125 6.4
Consumer Products & 55,000 CUC International, Inc. 1,621,089 2,021,250 1.9
Services
Cosmetics 35,000 The Gillette Co. 2,614,600 2,953,125 2.7
40,000 International Flavors & Fragrances Inc. 1,814,597 1,970,000 1.8
------------ ------------ ------
4,429,197 4,923,125 4.5
Electrical Equipment 20,000 Emerson Electric Co. 1,293,340 1,375,000 1.3
Electronics 30,000 Intel Corp. 2,613,750 3,363,750 3.1
Entertainment 100,000 Electronic Arts Inc. 2,645,904 2,575,000 2.4
Finance 5,000 Countrywide Credit Industries, Inc. 88,117 93,125 0.1
Financial Services 50,000 The Travelers Group Inc. 2,077,852 2,112,500 2.0
Food 20,000 General Mills, Inc. 1,057,553 1,037,500 1.0
5,000 Kellogg Co. 302,175 335,625 0.3
20,000 Wrigley (Wm.) Jr. Co. (Class B) 850,948 905,000 0.8
------------ ------------ ------
2,210,676 2,278,125 2.1
Food Merchandising 75,000 Albertson's, Inc. 2,150,222 2,100,000 2.0
Hotel 60,000 Marriott International, Inc. 1,914,188 2,032,500 1.9
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued)
<CAPTION>
Shares Held/ Percent of
Industries Face Amount Stocks & Bonds Cost Value Net Assets
<S> <C> <S> <C> <C> <C>
Household Products 35,000 Colgate-Palmolive Co. $ 2,181,775 $ 2,695,000 2.5%
50,000 Procter & Gamble Co. 3,218,163 3,593,750 3.3
------------ ------------ ------
5,399,938 6,288,750 5.8
Information Processing 35,000 First Financial Management Corp. 2,156,956 2,485,000 2.3
40,000 General Motors Corp. (Class E) 1,475,250 1,700,000 1.6
------------ ------------ ------
3,632,206 4,185,000 3.9
Insurance 20,000 American International Group, Inc. 2,007,593 2,275,000 2.1
Leisure 45,000 PolyGram N.V. (ADR)(a) 1,844,483 2,626,875 2.4
Medical--Technology 30,000 Haemonetics Corp. 751,330 540,000 0.5
Oil Services 40,000 Schlumberger Ltd. 2,438,770 2,600,000 2.4
Pharmaceuticals 45,000 Amgen, Inc. 2,891,706 3,256,875 3.0
45,000 Pfizer Inc. 3,401,238 3,965,625 3.7
------------ ------------ ------
6,292,944 7,222,500 6.7
Photography 50,000 Eastman Kodak Co. 2,589,125 3,018,750 2.8
Pollution Control 50,000 WMX Technologies Inc. 1,435,225 1,362,500 1.3
Publishing 10,000 Scholastic Corp. 455,625 547,500 0.5
Restaurant 20,000 Darden Restaurants Inc. 228,523 220,000 0.2
100,000 McDonald's Corp. 3,224,410 3,787,500 3.5
------------ ------------ ------
3,452,933 4,007,500 3.7
Retail Specialty 35,000 The Pep Boys--Manny, Moe & Jack 1,166,513 975,625 0.9
$ 350,000 The Pep Boys--Manny, Moe & Jack,
Convertible Bond, 4% due 9/01/1999 350,000 330,750 0.3
110,000 Staples Inc. 2,450,364 3,080,000 2.9
100,000 Toys "R" Us, Inc. 2,626,260 2,525,000 2.3
------------ ------------ ------
6,593,137 6,911,375 6.4
<PAGE>
Software--Computer 35,000 Microsoft Corp. 2,829,076 2,961,875 2.8
Telecommunications 150,000 MCI Communications Corp. 3,388,896 3,018,750 2.8
Toys 100,000 Mattel, Inc. 2,251,755 2,500,000 2.3
Travel & Lodging 100,000 Carnival Corporation (Class A) 2,290,068 2,325,000 2.2
Total Stocks & Bonds 97,613,420 105,033,250 97.6
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded)
<CAPTION>
Percent of
Face Amount Stocks & Bonds Cost Value Net Assets
<S> <C> <S> <C> <C> <C>
Commercial Paper* $ 509,000 General Electric Capital Corp., 6.13%
due 6/01/1995 $ 509,000 $ 509,000 0.5%
US Government 1,635,000 Federal Home Loan Bank, 5.88% due
& Agency 6/16/1995 1,630,994 1,630,994 1.5
Obligations* 2,000,000 Federal National Mortgage Association,
5.86% due 6/12/1995 1,996,419 1,996,419 1.9
------------ ------------ ------
3,627,413 3,627,413 3.4
Total Short-Term Securities 4,136,413 4,136,413 3.9
Total Investments $101,749,833 109,169,663 101.5
============
Liabilities in Excess of Other Assets (1,627,741) (1.5)
------------ ------
Net Assets $107,541,922 100.0%
============ ======
<PAGE>
Net Asset Class A--Based on net assets of $10,016,468
Value: and 942,691 shares of capital stock
outstanding $ 10.63
============
Class B--Based on net assets of $46,106,085
and 4,428,517 shares of capital stock
outstanding $ 10.41
============
Class C--Based on net assets of $40,266,047 and
3,867,578 shares of capital stock
outstanding $ 10.41
============
Class D--Based on net assets of $11,153,322 and
1,050,846 shares of capital stock
outstanding $ 10.61
============
<FN>
*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 Fund.
(a)American Depositary Receipt (ADR).
</TABLE>
PORTFOLIO INFORMATION
As of May 31, 1995
Ten Largest Holdings Percent of
(Equity Investments) Net Assets
Pfizer Inc. 3.7%
Compaq Computer Corp. 3.6
McDonald's Corp. 3.5
The Coca-Cola Co. 3.5
Procter & Gamble Co. 3.3
Intel Corp. 3.1
Amgen, Inc. 3.0
3Com Corp. 3.0
Staples Inc. 2.9
Eastman Kodak Co. 2.8
<PAGE>
Percent of
Ten Largest Industries Net Assets
Pharmaceuticals 6.7%
Retail Specialty 6.4
Computers 6.4
Household Products 5.8
Beverages 5.3
Communications 5.0
Cosmetics 4.5
Broadcast--Cable 4.2
Chemical Producers 4.1
Information Processing 3.9
Portfolio Changes for the Quarter Ended
May 31, 1995
Additions
Bay Networks Inc.
Darden Restaurants Inc.
Hewlett-Packard Co.
Microsoft Corp.
Toys "R" Us, Inc.
Deletions
Bed, Bath & Beyond, Inc.
The Olsten Corp.
The Olsten Corp., Convertible Bond, 4.875% due 5/15/2003
QUALCOMM Inc.
Shaw Industries, Inc.
Sybase, Inc.
Texas Instruments, Inc.
<PAGE>
