MERRILL LYNCH
FUNDAMENTAL
GROWTH
FUND, INC.
FUND LOGO
Semi-Annual Report
February 28, 1997
Officers and Directors
Arthur Zeikel, President and Director
Joe Grills, Director
Walter Mintz, Director
Robert S. Salomon Jr., Director
Melvin R. Seiden, Director
Steven B. Swensrud, 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
Ira P. Shapiro, Secretary
<PAGE>
Custodian
The Chase Manhattan Bank
Global Securities Services
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.
Statements and other information herein are as dated and are subject
to change.
Merrill Lynch
Fundamental
Growth Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
Printed on post-consumer recycled paper
MERRILL LYNCH FUNDAMENTAL GROWTH FUND, INC.
DEAR SHAREHOLDER
<PAGE>
For the quarter ended February 28, 1997, total returns for Merrill
Lynch Fundamental Growth Fund, Inc.'s Class A, Class B, Class C and
Class D Shares were +1.95%, +1.73%, +1.73% and +1.88%, respectively;
which underperformed the Lipper Analytical Services' Growth Funds
Average and the unmanaged Standard & Poor's 500 Index (S&P 500). The
Fund's cash reserve remained relatively modest at 5.8% of net assets
at the end of the February quarter compared to 5.2% at the end of
the November quarter. (Results shown do not reflect sales charges
and would be lower if sales charges were included. Complete
performance information, including average annual total returns, can
be found on pages 3--5 of this report to shareholders.)
The Environment
In our opinion, the US economy will continue to experience positive,
but moderate, real growth rates with modest levels of price
inflation. Real wage rates are rising, but productivity improvements
in both the services and manufacturing sectors contain the rate of
overall price inflation. In addition, the rise in the foreign
exchange value of the US dollar helped keep US consumer price
inflation at a relatively low level. Real growth is being led by
capital investment in the US economy. Recent surveys of investment
plans by corporations show a focus of increased spending during 1997
on network computer systems, advanced digital wireless communication
infrastructure and energy exploration activities. The Fund's modest
investment exposure to companies in these sectors was a significant
factor in providing total returns less than the unmanaged S&P 500
Index during the February quarter. During late January 1997, we
restructured the Fund in response to the latest survey data on
corporate capital spending plans.
Investment Strategy
We followed a strategy of being relatively fully invested in stocks
with a focus on large-capitalization, high-quality growth companies.
We slightly shifted the industry focus during the quarter ended
February 28, 1997, in order to gain more exposure to the apparently
strengthening cyclical growth industries of computers, computer
software, communications equipment and oil exploration services.
Investment holdings in the pharmaceutical and food industries were
reduced in the February quarter. The pharmaceutical sector remained
the largest industry weighting at 11.1% of net assets at February
28, 1997, compared to 16.8% at the end of the November quarter.
Pfizer Inc. is the largest equity holding at 3.9% of net assets; the
ten largest equity holdings are equal to 32.9% of net assets. The
Fund's top ten industries represented 58.2% of net assets. (See page
8 of this report to shareholders for the listings.) The majority of
the Fund's investments are represented by global growth companies
serving consumer non-durable goods and services markets or
commercial service markets. The global diversification of these
growth companies tends to assist the managements in producing
relatively stable and above-average growth rates in earnings and
returns on equity.
<PAGE>
Portfolio Review
We added ten companies and eliminated six companies from the
portfolio during the February quarter, with 59 companies represented
in the portfolio at quarter-end. H.F. Ahmanson & Co. was sold at a
significant capital gain after the management announced an
unfriendly takeover bid of Great Western Financial Corporation. We
sold Computer Associates International, Inc. at about a 10% capital
loss after management announced the unanticipated decline in its
European business. MCI Communications Corp. was sold at a
significant capital gain because of the relatively high valuation.
Other investment holdings eliminated with meaningful capital gains
caused by relatively high valuations were Nabisco Holdings Corp.
(Class A), Pharmacia & Upjohn, Inc. and SmithKline Beecham PLC
(ADR).
We added cisco Systems, Inc., the global leader in network equipment
and software for the internet market and private intranets of
computer systems, because of the likelihood of a continuation of a
relatively high rate of growth in earnings as corporations increase
the pace of spending on network computer systems. Recent surveys
reflect that Hewlett-Packard Co. should be a major beneficiary of
corporate spending on network computers along with COMPAQ Computer
Corp., so we added it to our portfolio.
In the communications equipment sector, new holdings included Lucent
Technologies, Inc., Telefonaktiebolaget LM Ericsson, Newbridge
Networks Corp., and FORE Systems, Inc. In recent months, capital
spending contracts were announced for the installation of major new
digital wireless communication systems in the US market. In
addition, both the long distance and local exchange telephone
companies are in the process of increasing capital investment
outlays for the latest communication switches and related software
which can efficiently carry both voice and data, and video
communications. These investments are needed to compete on a cost-
effective basis for the telecommunications business of corporations
with expanding networks of desktop computers.
Baan Company, N.V., one of the leading and fastest-growing
organizations in the client/server software applications business,
is another new investment. Honeywell, Inc. was added because of the
attractive valuation relative to an anticipated rise in the rate of
growth in earnings from a multi-year upturn in capital investment in
new commercial aircraft and the upgrading of the avionics in older
airplanes. We added Diamond Offshore Drilling, Inc. because of its
attractive valuation relative to an anticipated multi-year rise in
earnings, cash flow and rate of return as anticipated spending on
exploration for energy resources rises sharply. Banc One Corp. is a
leading Midwest bank holding company. We included it in the
portfolio because of the company's attractive valuation relative to
an anticipated rise in rates of return from a recently announced
acquisition and the benefits of a major operational restructuring
over the past two years.
<PAGE>
In Conclusion
We thank you for your continued investment in Merrill Lynch
Fundamental Growth Fund, Inc., and we look forward to reviewing our
outlook and strategies in our next report to shareholders.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Lawrence R. Fuller)
Lawrence R. Fuller
Vice President and Portfolio Manager
March 31, 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:
<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. (There is no initial sales charge for
automatic share conversions.) 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).
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.
Average Annual Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 12/31/96 +19.05% +12.80%
Inception (10/21/94)
through 12/31/96 +23.31 +20.31
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
<PAGE>
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 12/31/96 +17.71% +13.71%
Inception (10/21/94)
through 12/31/96 +22.04 +21.32
[FN]
*Maximum contingent deferred sales charge is 4% and is reduced to 0%
after 4 years.
**Assuming payment of applicable contingent deferred sales charge.
% Return % Return
Without CDSC With CDSC**
Class C Shares*
Year Ended 12/31/96 +17.73% +16.73%
Inception (12/24/92)
through 12/31/96 +11.07 +11.07
[FN]
*Maximum contingent deferred sales charge is 1% and is reduced to 0%
after 1 year.
**Assuming payment of applicable contingent deferred sales charge.
% Return Without % Return With
Sales Charge Sales Charge**
Class D Shares*
Year Ended 12/31/96 +18.69% +12.46%
Inception (12/24/92)
through 12/31/96 +11.94 +10.45
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
PERFORMANCE DATA (continued)
<PAGE>
<TABLE>
Performance Summary--Class A Shares++
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<S> <C> <C> <C> <C> <C>
10/21/94--12/31/94 $ 9.99 $ 9.62 $0.255 $0.051 - 0.54%
1995 9.62 12.61 -- 0.259 +33.75
1996 12.61 13.77 0.628 0.620 +19.05
1/1/97--2/28/97 13.77 14.56 -- -- + 5.74
------ ------
Total $0.883 Total $0.930
Cumulative total return as of 2/28/97: +67.45%**
<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 A Shares of the Fund outstanding prior to
October 21, 1994 were redesignated to Class D Shares.
</TABLE>
<TABLE>
Performance Summary--Class B Shares++
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<S> <C> <C> <C> <C> <C>
10/21/94--12/31/94 $ 9.85 $ 9.46 $0.255 $0.051 - 0.76%
1995 9.46 12.28 -- 0.259 +32.53
1996 12.28 13.31 0.628 0.523 +17.71
1/1/97--2/28/97 13.31 14.06 -- -- + 5.63
------ ------
Total $0.883 Total $0.833
Cumulative total return as of 2/28/97: +63.55%**
<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 B Shares of the Fund outstanding prior to
October 21, 1994 were redesignated to Class C Shares.
</TABLE>
<PAGE>
<TABLE>
Performance Summary--Class C Shares++
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<S> <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
1995 9.46 12.28 -- 0.259 +32.53
1996 12.28 13.34 0.628 0.495 +17.73
1/1/97--2/28/97 13.34 14.09 -- -- + 5.62
------ ------
Total $0.883 Total $0.805
Cumulative total return as of 2/28/97: +61.09%**
<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 B Shares of the Fund outstanding prior to
October 21, 1994 were redesignated to Class C Shares.
</TABLE>
PERFORMANCE DATA (concluded)
<TABLE>
Performance Summary--Class D Shares++
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<S> <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
1995 9.61 12.58 -- 0.259 +33.58
1996 12.58 13.71 0.628 0.598 +18.69
1/1/97--2/28/97 13.71 14.50 -- -- + 5.76
------ ------
Total $0.883 Total $0.908
Cumulative total return as of 2/28/97: +66.43%**
<PAGE>
<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 A Shares of the Fund outstanding prior to
October 21, 1994 were redesignated to Class D Shares.
</TABLE>
<TABLE>
Recent Performance Results
<CAPTION>
12 Month 3 Month
2/28/97 11/30/96 2/29/96 % Change % Change
<S> <C> <C> <C> <C> <C>
ML Fundamental Growth Fund, Inc. Class A Shares* $14.56 $15.57 $13.22 +15.14%(1) -2.24%(1)
ML Fundamental Growth Fund, Inc. Class B Shares* 14.06 15.01 12.84 +14.64(1) -1.93(1)
ML Fundamental Growth Fund, Inc. Class C Shares* 14.09 15.01 12.84 +14.87(1) -1.73(1)
ML Fundamental Growth Fund, Inc. Class D Shares* 14.50 15.50 13.18 +15.03(1) -2.19(1)
Standard & Poor's 500 Index** 790.82 757.20 640.43 +23.48 +4.46
ML Fundamental Growth Fund, Inc. Class A Shares--Total Return* +20.07(2) +1.95(2)
ML Fundamental Growth Fund, Inc. Class B Shares--Total Return* +18.92(3) +1.73(3)
ML Fundamental Growth Fund, Inc. Class C Shares--Total Return* +18.92(4) +1.73(4)
ML Fundamental Growth Fund, Inc. Class D Shares--Total Return* +19.81(5) +1.88(5)
Standard & Poor's 500 Index--Total Return** +26.20 +4.97
<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.
(1)Percent change includes reinvestment of $0.628 per share capital
gains distributions.
(2)Percent change includes reinvestment of $0.620 per share ordinary
income dividends and $0.628 per share capital gains distributions.
(3)Percent change includes reinvestment of $0.523 per share ordinary
income dividends and $0.628 per share capital gains distributions.
(4)Percent change includes reinvestment of $0.495 per share ordinary
income dividends and $0.628 per share capital gains distributions.
(5)Percent change includes reinvestment of $0.598 per share ordinary
income dividends and $0.628 per share capital gains distributions.
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS
<CAPTION>
Value Percent of
Industries Shares Held Stocks Cost (Note 1a) Net Assets
<S> <C> <S> <C> <C> <C>
Advertising 50,000 Interpublic Group of Companies, Inc. $ 2,084,537 $ 2,506,250 0.8%
Banking & Financial 200,000 Banc One Corp. 9,369,505 8,825,000 3.0
50,000 State Street Boston Corp. 2,618,548 4,018,750 1.4
60,000 US Bancorp 2,596,331 2,962,500 1.0
27,000 Wells Fargo & Company 6,658,277 8,214,750 2.8
------------ ------------ ------
21,242,661 24,021,000 8.2
Beverages 165,000 The Coca-Cola Co. 6,427,205 10,065,000 3.4
Computers 70,000 ++COMPAQ Computer Corp. 5,763,725 5,547,500 1.9
165,000 Hewlett-Packard Co. 8,994,629 9,240,000 3.1
------------ ------------ ------
14,758,354 14,787,500 5.0
Computer Services 45,000 ++cisco Systems, Inc. 3,220,625 2,491,875 0.9
100,000 ++FORE Systems, Inc. 3,118,550 3,325,000 1.1
------------ ------------ ------
6,339,175 5,816,875 2.0
Cosmetics 130,000 The Gillette Co. 5,708,764 10,286,250 3.5
20,000 International Flavors & Fragrances Inc. 973,375 927,500 0.3
------------ ------------ ------
6,682,139 11,213,750 3.8
Electrical Equipment 10,000 Emerson Electric Co. 658,040 990,000 0.3
80,000 General Electric Co. 6,354,263 8,230,000 2.8
20,000 Honeywell, Inc. 1,444,774 1,422,500 0.5
------------ ------------ ------
8,457,077 10,642,500 3.6
Electronics 60,000 Intel Corp. 8,440,393 8,512,500 2.9
Energy 150,000 El Paso Natural Gas Co. 6,910,825 8,043,750 2.8
200,000 Enron Corp. 8,433,697 7,975,000 2.7
------------ ------------ ------
15,344,522 16,018,750 5.5
Entertainment 130,000 ++Viacom, Inc. (Class A) 6,082,341 4,533,750 1.5
50,000 The Walt Disney Co. 2,990,094 3,712,500 1.3
------------ ------------ ------
9,072,435 8,246,250 2.8
<PAGE>
Financial Services 270,000 Federal National Mortgage Association 8,756,633 10,800,000 3.7
100,000 Travelers Group Inc. 4,350,898 5,362,500 1.8
------------ ------------ ------
13,107,531 16,162,500 5.5
Food 30,000 ConAgra Inc. 1,334,300 1,590,000 0.6
40,000 Sara Lee Corporation 1,292,182 1,550,000 0.5
5,000 Wrigley (Wm.) Jr. Co. (Class B) 222,850 299,375 0.1
------------ ------------ ------
2,849,332 3,439,375 1.2
Food Merchandising 110,000 Albertson's, Inc. 4,309,983 3,877,500 1.3
80,000 ++Meyer (Fred), Inc. 2,738,011 3,170,000 1.1
------------ ------------ ------
7,047,994 7,047,500 2.4
Hotel 20,000 Marriott International, Inc. 994,115 1,060,000 0.4
Household Products 5,000 Colgate-Palmolive Co. 374,261 517,500 0.2
35,000 Kimberly-Clark Corporation 3,276,155 3,710,000 1.3
40,000 Procter & Gamble Co. 3,811,715 4,805,000 1.6
------------ ------------ ------
7,462,131 9,032,500 3.1
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued)
<CAPTION>
Value Percent of
Industries Shares Held Stocks Cost (Note 1a) Net Assets
<S> <C> <S> <C> <C> <C>
Information 20,000 Electronic Data Systems Corp. $ 1,062,550 $ 902,500 0.3%
Processing 210,000 First Data Corp. 7,619,302 7,691,250 2.6
------------ ------------ ------
8,681,852 8,593,750 2.9
Insurance 100,000 Aetna Inc. 7,113,336 8,287,500 2.8
65,000 American International Group, Inc. 6,271,335 7,865,000 2.7
100,000 Travelers/Aetna Property Casualty Corp. 2,858,838 3,687,500 1.3
------------ ------------ ------
16,243,509 19,840,000 6.8
Leisure 115,000 Polygram N.V. (NY Registered Shares) 5,983,544 5,218,125 1.8
Medical-- 45,000 ++Boston Scientific Corp. 2,731,408 2,981,250 1.0
Technology 110,000 Johnson & Johnson 4,344,330 6,338,750 2.2
------------ ------------ ------
7,075,738 9,320,000 3.2
<PAGE>
Oil Services 100,000 ++Diamond Offshore Drilling, Inc. 6,897,042 5,900,000 2.0
75,000 Schlumberger Ltd. 8,231,003 7,546,875 2.6
------------ ------------ ------
15,128,045 13,446,875 4.6
Pharmaceuticals 140,000 ++Amgen, Inc. 5,561,049 8,540,000 2.9
25,000 Bristol-Myers Squibb Co. 2,397,314 3,262,500 1.1
100,000 Merck & Co., Inc. 5,824,754 9,200,000 3.2
125,000 Pfizer, Inc. 5,746,463 11,453,125 3.9
------------ ------------ ------
19,529,580 32,455,625 11.1
Photography 15,000 Eastman Kodak Co. 953,578 1,344,375 0.5
Pollution Control 20,000 WMX Technologies Inc. 591,174 632,500 0.2
Restaurant 25,000 McDonald's Corp. 1,141,245 1,081,250 0.4
Retail Specialty 129,000 Rite Aid Corp. 4,616,362 5,434,125 1.9
5,000 ++Staples Inc. 79,583 108,125 0.0
------------ ------------ ------
4,695,945 5,542,250 1.9
Retail Stores 120,000 Wal-Mart Stores, Inc. 2,901,419 3,165,000 1.1
Software--Computer 13,900 ++Baan Company, N.V. 618,550 616,813 0.2
100,000 ++Microsoft Corp. 8,547,136 9,737,500 3.3
10,000 ++Oracle Corp. 378,750 392,500 0.1
------------ ------------ ------
9,544,436 10,746,813 3.6
Telecommunications 150,000 Lucent Technologies, Inc. 7,893,886 8,081,250 2.7
Equipment 25,800 ++Newbridge Networks Corp. 820,956 822,375 0.3
100,000 Telefonaktiebolaget LM Ericsson
(ADR) (a) 3,379,803 3,150,000 1.1
------------ ------------ ------
12,094,645 12,053,625 4.1
Toys 170,000 Hasbro, Inc. 6,485,209 7,267,500 2.5
Travel & Lodging 25,000 Carnival Corporation (Class A) 588,075 881,250 0.3
Total Stocks 241,947,595 280,161,188 95.6
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded)
<CAPTION>
Value Percent of
Face Amount Short-Term Securities Cost (Note 1a) Net Assets
<S> <C> <S> <C> <C> <C>
Commercial Paper* $12,000,000 General Electric Capital Corp.,
5.38% due 3/03/1997 $ 11,996,413 $ 11,996,413 4.1%
5,031,000 General Motors Acceptance Corp.,
5.43% due 3/03/1997 5,029,482 5,029,482 1.7
Total Short-Term Securities 17,025,895 17,025,895 5.8
Total Investments $258,973,490 297,187,083 101.4
============
Liabilities in Excess of Other Assets (4,103,942) (1.4)
------------ ------
Net Assets $293,083,141 100.0%
============ ======
<FN>
*Commercial Paper is traded on a discount basis; the interest rates
shown are the discount rates paid at the time of purchase by the
Fund.
(a)American Depositary Receipts (ADR).
++Non-income producing security.
See Notes to Financial Statements.
</TABLE>
PORTFOLIO INFORMATION
Ten Largest Holdings Percent of
(Equity Investments) Net Assets
Pfizer, Inc. 3.9%
Federal National Mortgage Association 3.7
The Gillette Co. 3.5
The Coca-Cola Co. 3.4
Microsoft Corp. 3.3
Merck & Co., Inc. 3.2
Hewlett-Packard Co. 3.1
Banc One Corp. 3.0
Amgen, Inc. 2.9
Intel Corp. 2.9
Ten Largest Industries Percent of
(Equity Investments) Net Assets
<PAGE>
Pharmaceuticals 11.1%
Banking & Financial 8.2
Insurance 6.8
Financial Services 5.5
Energy 5.5
Computers 5.0
Oil Services 4.6
Telecommunications Equipment 4.1
Cosmetics 3.8
Software--Computer 3.6
Equity Portfolio Changes for the
Quarter Ended February 28, 1997
Additions
Baan Company, N.V.
Banc One Corp.
cisco Systems, Inc.
Diamond Offshore Drilling, Inc.
FORE Systems, Inc.
Hewlett-Packard Co.
Honeywell, Inc.
Lucent Technologies, Inc.
Newbridge Networks Corp.
Telefonaktiebolaget LM Ericsson (ADR)
Deletions
Ahmanson (H.F.) & Co.
Computer Associates International, Inc.
MCI Communications Corp.
Nabisco Holdings Corp. (Class A)
Pharmacia & Upjohn, Inc.
SmithKline Beecham PLC (ADR)
FINANCIAL INFORMATION
<TABLE>
Statement of Assets and Liabilities as of February 28, 1997
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$258,973,490) (Note 1a) $297,187,083
Cash 2,359,418
Receivables:
Capital shares sold $ 996,111
Securities sold 958,738
Dividends 281,245 2,236,094
------------
Deferred organization expenses (Note 1f) 25,385
Prepaid registration fees and other assets (Note 1f) 35,140
------------
Total assets 301,843,120
------------
<PAGE>
Liabilities: Payables:
Securities purchased 5,968,475
Capital shares redeemed 2,261,382
Distributor (Note 2) 171,681
Investment adviser (Note 2) 149,373 8,550,911
------------
Accrued expenses and other liabilities 209,068
------------
Total liabilities 8,759,979
------------
Net Assets: Net assets $293,083,141
============
Net Assets Class A Shares of capital stock, $0.10 par value, 100,000,000
Consist of: shares authorized $ 316,303
Class B Shares of capital stock, $0.10 par value, 100,000,000
shares authorized 1,069,565
Class C Shares of capital stock, $0.10 par value, 100,000,000
shares authorized 431,544
Class D Shares of capital stock, $0.10 par value, 100,000,000
shares authorized 247,083
Paid-in capital in excess of par 231,976,264
Accumulated investment loss--net (744,609)
Undistributed realized capital gains on investments--net 21,573,398
Unrealized appreciation on investments--net 38,213,593
------------
Net assets $293,083,141
============
Net Asset Value: Class A--Based on net assets of $46,069,363 and 3,163,029
shares outstanding $ 14.56
============
Class B--Based on net assets of $150,382,850 and 10,695,649
shares outstanding $ 14.06
============
Class C--Based on net assets of $60,804,824 and 4,315,444
shares outstanding $ 14.09
============
Class D--Based on net assets of $35,826,104 and 2,470,831
shares outstanding $ 14.50
============
<PAGE>
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (continued)
<TABLE>
Statement of Operations for the Six Months Ended February 28, 1997
<S> <S> <C>
Investment Income Dividends $ 1,676,860
(Notes 1d & 1e): Interest and discount earned 638,035
-----------
Total income 2,314,895
-----------
Expenses: Investment advisory fees (Note 2) 914,363
Account maintenance and distribution fees--Class B (Note 2) 698,622
Account maintenance and distribution fees--Class C (Note 2) 297,618
Transfer agent fees--Class B (Note 2) 170,494
Transfer agent fees--Class C (Note 2) 71,816
Printing and shareholder reports 63,521
Transfer agent fees--Class A (Note 2) 53,698
Registration fees (Note 1f) 37,807
Account maintenance fees--Class D (Note 2) 37,118
Accounting services (Note 2) 33,591
Professional fees 30,664
Transfer agent fees--Class D (Note 2) 30,562
Directors' fees and expenses 18,728
Amortization of organization expenses (Note 1f) 9,481
Custodian fees 8,921
Other 7,721
-----------
Total expenses 2,484,725
-----------
Investment loss--net (169,830)
-----------
Realized & Realized gain from investments--net 21,008,973
Unrealized Gain on Change in unrealized appreciation on investments--net 20,251,138
Investments--Net -----------
(Notes 1b, 1c, Net Increase in Net Assets Resulting from Operations $41,090,281
1e & 3): ===========
</TABLE>
<PAGE>
<TABLE>
Statements of Changes in Net Assets
<CAPTION>
For the Six For the
Months Ended Year Ended
Increase (Decrease) in Net Assets: Feb. 28, 1997 Aug. 31, 1996
<S> <S> <C> <C>
Operations: Investment loss--net $ (169,830) $ (574,728)
Realized gain on investments--net 21,008,973 25,808,365
Change in unrealized appreciation on investments--net 20,251,138 3,022,827
------------ ------------
Net increase in net assets resulting from operations 41,090,281 28,256,464
------------ ------------
Distributions to Realized gain on investments--net:
Shareholders Class A (4,708,644) (541,580)
(Note 1g): Class B (11,489,976) (1,655,483)
Class C (4,699,934) (1,010,551)
Class D (2,535,797) (323,823)
------------ ------------
Net decrease in net assets resulting from distributions to
shareholders (23,434,351) (3,531,437)
------------ ------------
Capital Share Net increase in net assets derived from capital share
Transactions transactions 34,794,310 73,421,174
(Note 4): ------------ ------------
Net Assets: Total increase in net assets 52,450,240 98,146,201
Beginning of period 240,632,901 142,486,700
------------ ------------
End of period $293,083,141 $240,632,901
============ ============
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (continued)
<TABLE>
Financial Highlights
<CAPTION>
Class A++++ Class B++++
<PAGE>
For the For the For the For the
The following per share data and ratios have been Six For the Period Six For the Period
derived from information provided in the financial Months Year Oct. 21, Months Year Oct. 21,
statements. Ended Ended 1994++ to Ended Ended 1994++ to
Feb. 28, Aug. 31, Aug. 31, Feb. 28, Aug. 31, Aug. 31,
Increase (Decrease) in Net Asset Value: 1997 1996 1995 1997 1996 1995
<S> <S> <C> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 13.60 $ 11.66 $ 9.99 $ 13.14 $ 11.40 $ 9.85
Operating -------- -------- -------- -------- -------- --------
Performance: Investment income (loss)--net .05 .07 -- (.03) (.07) (.09)
Realized and unrealized gain on
investments--net 2.16 2.13 1.98 2.10 2.07 1.95
-------- -------- -------- -------- -------- --------
Total from investment operations 2.21 2.20 1.98 2.07 2.00 1.86
-------- -------- -------- -------- -------- --------
Less distributions from realized
gain on investments--net (1.25) (.26) (.31) (1.15) (.26) (.31)
-------- -------- -------- -------- -------- --------
Net asset value, end of period $ 14.56 $ 13.60 $ 11.66 $ 14.06 $ 13.14 $ 11.40
======== ======== ======== ======== ======== ========
Total Investment Based on net asset value per share 16.72%+++ 19.02% 20.55%+++ 16.21%+++ 17.68% 19.60%+++
Return:** ======== ======== ======== ======== ======== ========
Ratios to Average Expenses 1.00%* 1.12% 1.46%* 2.04%* 2.16% 2.48%*
Net Assets: ======== ======== ======== ======== ======== ========
Investment income (loss)--net .65%* .51% .02%* (.40%)* (.54%) (.95%)*
======== ======== ======== ======== ======== ========
Supplemental Net assets, end of period
Data: (in thousands) $ 46,069 $ 47,048 $ 21,288 $150,383 $116,641 $ 63,748
======== ======== ======== ======== ======== ========
Portfolio turnover 50.00% 82.10% 80.41% 50.00% 82.10% 80.41%
======== ======== ======== ======== ======== ========
Average commission rate paid++++++ $ .0620 $ .0623 -- $ .0620 $ .0623 --
======== ======== ======== ======== ======== ========
<CAPTION>
Class C++++
<PAGE>
For the Six For the Period
The following per share data and ratios have been derived Months Dec. 24,
from information provided in the financial statements. Ended 1992++ to
Feb. 28, For the Year Ended August 31, Aug. 31,
Increase (Decrease) in Net Asset Value: 1997 1996 1995 1994 1993
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 13.14 $ 11.40 $ 9.96 $ 9.86 $ 10.00
Operating -------- -------- -------- -------- --------
Performance: Investment loss--net (.03) (.07) (.09) (.05) (.05)
Realized and unrealized gain (loss) on
investments--net 2.10 2.07 1.84 .15 (.09)
-------- -------- -------- -------- --------
Total from investment operations 2.07 2.00 1.75 .10 (.14)
-------- -------- -------- -------- --------
Less distributions from realized gain on
investments--net (1.12) (.26) (.31) -- --
-------- -------- -------- -------- --------
Net asset value, end of period $ 14.09 $ 13.14 $ 11.40 $ 9.96 $ 9.86
======== ======== ======== ======== ========
Total Investment Based on net asset value per share 16.21%+++ 17.68% 18.28% 1.01% (1.40%)+++
Return:** ======== ======== ======== ======== ========
Ratios to Average Expenses 2.04%* 2.15% 2.44% 2.35% 2.79%*
Net Assets: ======== ======== ======== ======== ========
Investment loss--net (.39%)* (.57%) (.88%) (.52%) (.83%)*
======== ======== ======== ======== ========
Supplemental Net assets, end of period (in thousands) $ 60,805 $ 54,052 $ 44,220 $ 47,263 $ 45,736
Data: ======== ======== ======== ======== ========
Portfolio turnover 50.00% 82.10% 80.41% 112.68% 64.09%
======== ======== ======== ======== ========
Average commission rate paid++++++ $ .0620 $ .0623 -- -- --
======== ======== ======== ======== ========
<FN>
*Annualized.
**Total investment returns exclude the effect of sales loads.
+++Aggregate total investment return.
++Commencement of Operations.
++++Based on average shares outstanding during the period.
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (concluded)
<TABLE>
Financial Highlights (concluded)
<CAPTION>
Class D++++
<PAGE>
For the For the
Six Period
The following per share data and ratios have been derived Months Dec. 24,
from information provided in the financial statements. Ended 1992++ to
Feb. 28, For the Year Ended August 31, Aug. 31,
Increase (Decrease) in Net Asset Value: 1997 1996 1995 1994 1993
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 13.54 $ 11.64 $ 10.09 $ 9.91 $ 10.00
Operating -------- -------- -------- -------- --------
Performance: Investment income (loss)--net .03 .03 (.01) .03 --
Realized and unrealized gain (loss) on
investments--net 2.16 2.13 1.87 .15 (.09)
-------- -------- -------- -------- --------
Total from investment operations 2.19 2.16 1.86 .18 (.09)
-------- -------- -------- -------- --------
Less distributions from realized gain on
investments--net (1.23) (.26) (.31) -- --
-------- -------- -------- -------- --------
Net asset value, end of period $ 14.50 $ 13.54 $ 11.64 $ 10.09 $ 9.91
======== ======== ======== ======== ========
Total Investment Based on net asset value per share 16.63%+++ 18.70% 19.15% 1.82% (.90%)+++
Return:** ======== ======== ======== ======== ========
Ratios to Average Expenses 1.26%* 1.37% 1.65% 1.58% 2.03%*
Net Assets: ======== ======== ======== ======== ========
Investment income (loss)--net .37%* .24% (.10%) .31% (.04%)*
======== ======== ======== ======== ========
Supplemental Net assets, end of period (in thousands) $ 35,826 $ 22,892 $ 13,231 $ 8,623 $ 6,930
Data: ======== ======== ======== ======== ========
Portfolio turnover 50.00% 82.10% 80.41% 112.68% 64.09%
======== ======== ======== ======== ========
Average commission rate paid++++++ $ .0620 $ .0623 -- -- --
======== ======== ======== ======== ========
<FN>
*Annualized.
**Total investment returns exclude the effect of sales loads.
+++Aggregate total investment return.
++Commencement of Operations.
++++Based on average shares outstanding during the period.
++++++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.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
Merrill Lynch Fundamental Growth Fund, Inc. (the "Fund") is
registered under the Investment Company Act of 1940 as a
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 Fund 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 Fund.
(a) Valuation of investments--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 value quotations are not available are valued at
their fair value as determined in good faith by or under the
direction of the Fund's Board of Directors.
<PAGE>
(b) Derivative financial instruments--The Fund 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.
* Financial futures contracts--The Fund may purchase or sell
interest rate 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 Fund deposits and maintains as collateral such initial
margin as required by the exchange on which the transaction is
effected. Pursuant to the contract, the Fund agrees to receive from
or pay to the broker an amount of cash equal to the daily
fluctuation in value of the contract. Such receipts or payments are
known as variation margin and are recorded by the Fund as unrealized
gains or losses. When the contract is closed, the Fund records a
realized gain or loss equal to the difference between the value of
the contract at the time it was opened and the value at the time it
was closed.
* Options--The Fund is authorized to write and purchase call and put
options. When the Fund writes an option, an amount equal to the
premium received by the Fund is reflected as an asset and an
equivalent liability. The amount of the liability is subsequently
marked to market to reflect the current value of the option written.
When a security is purchased or sold through an exercise of an
option, the related premium paid (or received) is added to (or
deducted from) the basis of the security acquired or deducted from
(or added to) the proceeds of the security sold. When an option
expires (or the Fund enters into a closing transaction), the Fund
realizes a gain or loss on the option to the extent of the premiums
received or paid (or gain or loss to the extent the cost of the
closing transaction exceeds the premium paid or received).
Written and purchased options are non-income producing investments.
NOTES TO FINANCIAL STATEMENTS (concluded)
(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.
<PAGE>
(d) Income taxes--It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute 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
Fund 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) Deferred organization expenses and prepaid registration fees--
Deferred organization expenses are charged to expense on a straight-
line basis over a five-year period. Prepaid registration fees are
charged to expense as the related shares are issued.
(g) Dividends and distributions--Dividends and distributions paid by
the Fund are recorded on the ex-dividend dates.
2. Investment Advisory Agreement and
Transactions with Affiliates:
The Fund has entered into an Investment Advisory Agreement with
Merrill Lynch Asset Management, L.P. ("MLAM"). The general partner
of MLAM is Princeton Services, Inc. ("PSI"), an indirect wholly-
owned subsidiary of Merrill Lynch & Co., Inc. ("ML & Co."), which is
the limited partner. The Fund has also entered into a Distribution
Agreement and Distribution Plans with Merrill Lynch Funds
Distributor, Inc. ("MLFD" or "Distributor"), a wholly-owned
subsidiary of Merrill Lynch Group, Inc.
MLAM is responsible for the management of the Fund's portfolio and
provides the necessary personnel, facilities, equipment and certain
other services necessary to the operations of the Fund. For such
services, the Fund pays a monthly fee at the annual rate of 0.65% of
the average daily value of the Fund's net assets.
Pursuant to the distribution plans (the "Distribution Plans")
adopted by the Fund in accordance with Rule 12b-1 under the
Investment Company Act of 1940, the Fund pays the Distributor
ongoing account maintenance and distribution fees. The fees are
accrued daily 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% --
<PAGE>
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
Fund. The ongoing account maintenance fee compensates the
Distributor and MLPF&S for providing account maintenance services to
Class B, Class C and Class D shareholders. The ongoing distribution
fee compensates the Distributor and MLPF&S for providing shareholder
and distribution-related services to Class B and Class C
shareholders.
For the six months ended February 28, 1997, MLFD earned underwriting
discounts and direct commissions and MLPF&S earned dealer
concessions on sales of the Fund's Class A and Class D Shares as
follows:
MLFD MLPF&S
Class A $ 277 $ 2,794
Class D $7,443 $97,224
For the six months ended February 28, 1997, MLPF&S received
contingent deferred sales charges of $421,154 and $1,039 relating to
transactions in Class B and Class C Shares, respectively.
In addition, MLPF&S received $3,900 in commissions on the execution
of portfolio security transactions for the Fund for the six months
ended February 28, 1997.
Merrill Lynch Financial Data Services, Inc. ("MLFDS"), a wholly-
owned subsidiary of ML & Co., is the Fund's transfer agent.
Accounting services are provided to the Fund by MLAM at cost.
Certain officers and/or directors of the Fund are officers and/or
directors of MLAM, MLFDS, PSI, MLFD, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the six months ended February 28, 1997 were $173,901,553 and
$128,299,921, respectively.
Net realized and unrealized gains as of February 28, 1997 were as
follows:
Realized Unrealized
Gains Gains
<PAGE>
Long-term investments $21,008,210 $38,213,593
Short-term investments 763 --
----------- -----------
Total $21,008,973 $38,213,593
=========== ===========
As of February 28, 1997, net unrealized appreciation for Federal
income tax purposes aggregated $38,213,593, of which $45,109,168
related to appreciated securities and $6,895,575 related to
depreciated securities. At February 28, 1997, the aggregate cost of
investments for Federal income tax purposes was $258,973,490.
4. Capital Share Transactions:
Net increase in net assets derived from capital share transactions
were $34,794,310 and $73,421,174 for the six months ended February
28, 1997 and for the year ended August 31, 1996, respectively.
Transactions in capital shares for each class were as follows:
Class A Shares for the Six Months Dollar
Ended February 28, 1997 Shares Amount
Shares sold 2,482,810 $ 35,382,887
Shares issued to shareholders in
reinvestment of distributions 318,999 4,411,762
------------ ------------
Total issued 2,801,809 39,794,649
Shares redeemed (3,098,951) (44,056,621)
------------ ------------
Net decrease (297,142) $ (4,261,972)
============ ============
Class A Shares for the Year Dollar
Ended August 31, 1996 Shares Amount
Shares sold 2,291,835 $ 29,954,753
Shares issued to shareholders in
reinvestment of distributions 41,134 522,810
------------ ------------
Total issued 2,332,969 30,477,563
Shares redeemed (698,358) (8,998,807)
------------ ------------
Net increase 1,634,611 $ 21,478,756
============ ============
Class B Shares for the Six Months Dollar
Ended February 28, 1997 Shares Amount
<PAGE>
Shares sold 3,306,408 $ 46,092,821
Shares issued to shareholders in
reinvestment of distributions 782,595 10,471,101
------------ ------------
Total issued 4,089,003 56,563,922
Shares redeemed (2,259,133) (31,304,638)
Automatic conversion of shares (8,617) (124,433)
------------ ------------
Net increase 1,821,253 $ 25,134,851
============ ============
Class B Shares for the Year Dollar
Ended August 31, 1996 Shares Amount
Shares sold 5,820,916 $ 73,664,245
Shares issued to shareholders
in reinvestment of distributions 121,775 1,507,570
------------ ------------
Total issued 5,942,691 75,171,815
Shares redeemed (2,647,233) (33,330,378)
Automatic conversion of shares (14,867) (185,102)
------------ ------------
Net increase 3,280,591 $ 41,656,335
============ ============
Class C Shares for the Six Months Dollar
Ended February 28, 1997 Shares Amount
Shares sold 480,103 $ 7,161,084
Shares issued to shareholders in
reinvestment of distributions 310,634 3,692,231
------------ ------------
Total issued 790,737 10,853,315
Shares redeemed (587,911) (8,158,972)
------------ ------------
Net increase 202,826 $ 2,694,343
============ ============
Class C Shares for the Year Dollar
Ended August 31, 1996 Shares Amount
Shares sold 1,167,623 $ 14,787,083
Shares issued to shareholders
in reinvestment of distributions 71,863 889,667
------------ ------------
Total issued 1,239,486 15,676,750
Shares redeemed (1,007,151) (12,689,514)
------------ ------------
Net increase 232,335 $ 2,987,236
============ ============
<PAGE>
Class D Shares for the Six Months Dollar
Ended February 28, 1997 Shares Amount
Shares sold 1,026,722 $ 14,850,258
Automatic conversion of shares 8,357 124,433
Shares issued to shareholders
in reinvestment of distributions 164,753 2,268,645
------------ ------------
Total issued 1,199,832 17,243,336
Shares redeemed (419,917) (6,016,248)
------------ ------------
Net increase 779,915 $ 11,227,088
============ ============
Class D Shares for the Year Dollar
Ended August 31, 1996 Shares Amount
Shares sold 953,782 $ 12,474,082
Automatic conversion of shares 14,515 185,102
Shares issued to shareholders
in reinvestment of distributions 20,994 266,204
------------ ------------
Total issued 989,291 12,925,388
Shares redeemed (434,952) (5,626,541)
------------ ------------
Net increase 554,339 $ 7,298,847
============ ============
