MERRILL LYNCH
FUNDAMENTAL
GROWTH
FUND, INC.
[FUND LOGO]
STRATEGIC
Performance
Semi-Annual Report
February 28, 1998
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 #16465 -- 2/98
[RECYCLE LOGO]
Printed on post-consumer recycled paper
MERRILL LYNCH FUNDAMENTAL GROWTH FUND, INC.
DEAR SHAREHOLDER
For the quarter ended February 28, 1998, total returns for Merrill
Lynch Fundamental Growth Fund, Inc.'s Class A, Class B, Class C and
Class D Shares were +9.73%, +9.44%, +9.39% and +9.64%, respectively.
The Fund outperformed the Lipper Analytical Services' Growth Fund
Average, which had a total return of +9.10%, but slightly
underperformed the unmanaged Standard & Poor's 500 Index (S&P 500),
which had a total return of +10.25% for the same three-month period.
(Investment 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 4 and 5 of this report to shareholders.)
During January 1998, the common stock prices of many of the Fund's
investments in the computer software, communications equipment and
electronics industries recovered from the low share price levels
experienced in December 1997, when investors were very apprehensive
about the potential negative effects of the emerging recessions in
major Asian countries on these companies. The actual reports of
fourth quarter 1997 earnings showed that the negative effects
overall were relatively modest and in some instances, were
insignificant. During the February quarter, seven of the Fund's top
ten equity holdings had total returns significantly greater than any
of the Fund's competitive benchmarks. Several of these companies,
such as Northern Telecom Ltd., Intel Corp., SAP AG (Systeme,
Anwendungen, Produkte in der Datenverarbeitung) and Baan Company,
N.V. (US Registered Shares) were considered to be at considerable
risk of earnings being adversely affected as a result of the
emerging recessions in Asia. So far, the negative effects have been
relatively modest compared to the apparent expectations of many
investors. We continue to research the potential for negative
effects of the unfolding economic declines in the major Asian
countries on individual corporations. (See page 5 of this report to
shareholders for a complete listing of the Fund's Ten Largest
Holdings.)
Based on fiscal year-to-date and the latest 12-month comparisons as
of February 28, 1998, the Fund's total returns exceeded the total
returns of both the Lipper Analytical Services' Growth Funds Average
and the unmanaged S&P 500. We continue to believe that there are
positive investment opportunities in the US equity market, and at
February 28, 1998, the Fund remained relatively fully invested in
common stocks.
The Environment
Real economic growth in the United States appears to be
strengthening. Real wage rates and personal incomes are rising at
faster rates than during the same period of 1997. Record residential
mortgage refinancings have introduced new liquidity to the consumer
sector. Federal personal income tax refunds are significantly larger
than a year ago. Also, Federal tax reductions enacted in 1997 to
assist low-income and middle-income households have started to boost
after-tax incomes at an estimated $13 billion annual rate. Consumer
price inflation is relatively low, and price discounts and rebates
are being offered on new motor vehicles. Consequently, consumer
confidence surveys are increasingly positive, and real consumer
spending is rising on many items from computers and software to
television sets and consumer electronics, furniture, recorded music,
apparel and motor vehicles. The benefits of Federal tax reduction
and residential mortgage refinancing to after-tax real personal
incomes could provide some sustainability to this improvement in
consumer spending.
The reduced rate of real growth in US corporations' exports to Asian
markets is likely to cause a slowdown in the overall rate of growth
of corporate profits in 1998, in our view. We continue to focus on
identifying individual companies that are likely to experience the
greatest reductions in exports of manufactured goods. The declines
in the currency values of the major Asian economies relative to the
US dollar during the second half of 1997 have improved the price
competitiveness of foreign manufactured goods, ranging from motor
vehicles and computer memory devices to finished steel products.
The recent reports of most technology companies in the
communications equipment, computer and computer software industries
show a continued relatively rapid rate of growth in demand globally
for advanced wireline and wireless communication infrastructure and
communication handsets, personal computers and servers and network
application software. Order cancellations or delivery delays in some
of the most severely depressed Asian economies appear to be offset
by new orders from North America and Europe. Consequently, we
anticipate a more favorable real economic growth environment in the
United States in 1998, and improved business conditions in Europe
during the second half of 1998 as we move closer to the official
start-up of the European Monetary Union in 1999.
Investment Strategy
During the February quarter, we shifted the industry weightings of
the Fund toward the technology and retailing sectors, while reducing
exposures in banking and financial services, oil services and
energy. The stock prices of many of the leading technology companies
in computers, computer software, electronics and communications
equipment declined substantially from about mid-year 1997 to year-
end, apparently from investor concerns about business dislocations
and lower profits that may follow from the business downturns in
major Asian economies. In our opinion, the leading companies in the
technology sector are likely to gain market share and grow at above-
average rates during any slowdown in overall growth of spending on
semiconductor equipment, personal computers and networks servers,
communication equipment and computer software.
We increased the Fund's weighting in consumer goods retailers in
response to company reports which support our perspective that
consumer spending could be rising at a faster rate in 1998. We
reduced the Fund's weighting in energy and energy service companies
in response to the United Nations' agreement with the government of
Iraq, which over a relatively short period of time may increase
substantially the supply of oil coming from Iraq. We reduced the
weightings in the banking and financial services industries because
the valuations are relatively high and because there may be an
increase in long-term interest rates in the United States if
household spending continues to grow at a faster pace during the
remainder of 1998.
We added ten companies to the portfolio during the February quarter
and eliminated one holding. We added Applied Materials, Inc. because
the valuation appeared reasonable relative to the above-average
long-run growth potential. In the global arena, the company is the
leading and most broad-based independent developer, manufacturer,
marketer and servicer of semiconductor capital equipment, in our
view. We purchased Clear Channel Communications, Inc. in response to
the enhanced growth potential for this primarily middle-market radio
broadcaster as the radio and television industry continues to
consolidate, and Dell Computer Corporation in response to the
continued surprisingly rapid rate of growth of this personal
computer and server company and our rising confidence level in the
outlook for industry growth for 1998. We added a position in Ethan
Allen Interiors, Inc., a leading home furnishings retailer, because
it appeared to have a reasonable valuation given recent rates of
growth in earnings and the possibility of a rapid pace of consumer
spending on household furnishings in 1998. We added The Gap Inc., a
leading apparel retailer with a private brand, because we
anticipated that earnings growth would be above-average in what
appears to be a stronger consumer spending environment on apparel.
We added Morgan Stanley, Dean Witter, Discover & Co. to the
portfolio as a result of the attractive valuation and the potential
for above-average earnings growth and rates of return as the
productivity of the Dean Witter retail brokerage system improves
with the enhanced financial product offerings from Morgan Stanley &
Co. We purchased shares of PeopleSoft, Inc. because of the
reasonable valuation and the potential for above-average earnings
growth from an organization which is one of the leading developers
and marketers of enterprise business applications for networked
operating systems. We also purchased shares of SGS -- Thomson
Microelectronics N.V. (NY Registered Shares), one of the leading
European developers and manufacturers of electronic devices for
systems ranging from computers and telecommunications equipment to
industrial equipment, because we believed that the valuation was
reasonable and that earnings would grow at an above-average rate
with improved returns as soon as there are better business
conditions in Europe. We added Sprint Corporation to the portfolio
in response to the attractive valuation relative to the above-
average growth of revenues and new customers in the Internet
communication business as well as the growth of the new digital
wireless communications business. Finally, we added Texas
Instruments Inc. in response to the attractive valuation relative to
long-run earnings growth prospects, especially in the
telecommunications area where the organization has the largest
global market share for digital signal processors as well as leading
edge technological developments.
The only investment eliminated from the portfolio was Oracle Corp.,
after management reported unsatisfactory operational results. Oracle
appears to be losing business and market share to Microsoft
Corporation at the low end of the relational database market. Also,
Oracle appears to be growing at a substantially slower rate than the
leading companies in business applications software for networked
operational systems.
In Conclusion
We thank you for your investment in Merrill Lynch Fundamental Growth
Fund, Inc., and we look forward to discussing our investment
strategy and outlook with you in our upcoming quarterly report to
shareholders.
Sincerely,
/S/ARTHUR ZEIKEL
Arthur Zeikel
President
/S/LAWRENCE R. FULLER
Lawrence R. Fuller
Senior Vice President and Portfolio Manager
March 31, 1998
PERFORMANCE DATA
About Fund Performance
Investors are able to purchase shares of the Fund through the
Merrill Lynch Select PricingSM System, which offers four pricing
alternatives:
[bullet] 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. However, in the
case of certain eligible investors, the shares were simultaneously
exchanged for Class A Shares.
[bullet] 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.
[bullet] 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.
[bullet] 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.
<TABLE>
<CAPTION>
Recent Performance Results*
12 Month 3 Month Since Inception
Total Return Total Return Total Return
<S> <C> <C> <C>
ML Fundamental Growth Fund, Inc. Class A Shares +36.78% + 9.73% +129.04%
ML Fundamental Growth Fund, Inc. Class B Shares +35.28 + 9.44 +121.25
ML Fundamental Growth Fund, Inc. Class C Shares +35.24 + 9.39 +117.87
ML Fundamental Growth Fund, Inc. Class D Shares +36.33 + 9.64 +126.90
Standard & Poor's 500 Index** +34.99 +10.25 +143.12/+170.29
* 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, 10/21/94; and Class C and
Class D Shares, 12/24/92.
** An unmanaged broad-based Index comprised of common stocks. Since inception total returns are for the
periods from 10/21/94 to 2/28/98 and from 12/24/92 to 2/28/98, respectively.
</TABLE>
Average Annual Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 12/31/97 +32.03% +25.10%
Inception (10/21/94)
through 12/31/97 +25.97 +23.86
* Maximum sales charge is 5.25%.
** Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 12/31/97 +30.65% +26.65%
Inception (10/21/94)
through 12/31/97 +24.67 +24.48
* 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 12/31/97 +30.65% +29.65%
Five Years Ended 12/31/97 +14.97 +14.97
Inception (12/24/92)
through 12/31/97 +14.72 +14.72
* 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 12/31/97 +31.63% +24.72%
Five Years Ended 12/31/97 +15.86 +14.62
Inception (12/24/92)
through 12/31/97 +15.61 +14.38
* Maximum sales charge is 5.25%.
** Assuming maximum sales charge.
PORTFOLIO INFORMATION
Ten Largest Holdings Percent of
(Equity Investments) Net Assets
COMPAQ Computer Corp. 3.5%
Northern Telecom Ltd. 3.2
Intel Corp. 3.0
SAP AG (Systeme, Anwendungen, Produkte
in der Datenverarbeitung) (ADR) 3.0
Travelers Group, Inc. 3.0
Merck & Co., Inc. 2.8
The Walt Disney Co. 2.8
Baan Company, N.V. (US Registered Shares) 2.7
General Electric Co. 2.5
Wal-Mart Stores, Inc. 2.4
Ten Largest Industries Percent of
(Equity Investments) Net Assets
Communications Equipment 10.2%
Banking & Financial 8.6
Software -- Computer 7.9
Pharmaceuticals 7.1
Financial Services 5.9
Electronics 5.2
Retail Specialty 4.6
Computers 4.4
Entertainment 3.5
Electrical Equipment 2.9
Equity Portfolio Changes for the
Quarter Ended February 28, 1998
Additions
Applied Materials, Inc.
Clear Channel Communications, Inc.
Dell Computer Corporation
Ethan Allen Interiors, Inc.
Gap, Inc. (The)
Morgan Stanley, Dean Witter, Discover & Co.
PeopleSoft, Inc.
SGS - Thomson Microelectronics N.V.
(NY Registered Shares)
Sprint Corporation
Texas Instruments Inc.
Deletion
Oracle Corp.
<TABLE>
<CAPTION>
Merrill Lynch Fundamental Growth Fund, Inc. February 28, 1998
SCHEDULE OF INVESTMENTS
Shares Value Percent of
Industries Held Stocks Cost (Note 1a) Net Assets
<S> <C> <C> <C> <C> <C>
Advertising 75,000 Interpublic Group of Companies, Inc. $2,084,537 $4,087,500 0.6%
Banking & Financial 275,000 Banc One Corp. 12,748,106 15,537,500 2.3
75,000 BankAmerica Corp. 5,404,138 5,812,500 0.9
110,000 Citicorp 14,427,164 14,575,000 2.2
200,000 Mellon Bank Corp. 11,074,562 12,462,500 1.8
155,000 State Street Boston Corp. 7,301,335 9,580,938 1.4
------------ ------------ -------
50,955,305 57,968,438 8.6
Beverages 70,000 The Coca-Cola Co. 3,760,705 4,808,125 0.7
Broadcasting -- Radio 100,000 +Clear Channel Communications, Inc. 8,510,355 9,062,500 1.3
& Television
Communications 200,000 Cisco Systems, Inc. 10,842,120 13,175,000 2.0
Equipment 375,000 +FORE Systems, Inc. 8,522,573 6,000,000 0.9
75,000 Lucent Technologies, Inc. 5,552,065 8,128,125 1.2
200,000 +Newbridge Networks Corporation 8,383,528 4,700,000 0.7
400,000 Northern Telecom Ltd. 17,789,260 21,325,000 3.2
320,000 Telefonaktiebolaget LM Ericsson (ADR)(a) 12,753,213 14,500,000 2.2
------------ ------------ -------
63,842,759 67,828,125 10.2
Computers 740,000 COMPAQ Computer Corp. 16,217,189 23,726,250 3.5
35,000 +Dell Computer Corporation 4,403,375 4,893,438 0.7
20,000 Hewlett-Packard Co. 1,096,400 1,340,000 0.2
------------ ------------ -------
21,716,964 29,959,688 4.4
Cosmetics 100,000 The Gillette Co. 7,495,792 10,787,500 1.6
20,000 International Flavors & Fragrances Inc. 973,375 920,000 0.1
------------ ------------ -------
8,469,167 11,707,500 1.7
Electrical Equipment 30,000 Emerson Electric Co. 1,226,140 1,914,375 0.3
220,000 General Electric Co. 10,464,488 17,105,000 2.5
10,000 Honeywell, Inc. 748,156 792,500 0.1
------------ ------------ -------
12,438,784 19,811,875 2.9
Electronics 230,000 Intel Corp. 17,013,642 20,613,750 3.0
25,000 +SGS - Thomson Microelectronics N.V.
(NY Registered Shares) 1,743,352 1,903,125 0.3
220,000 Texas Instruments Inc. 12,827,918 12,732,500 1.9
------------ ------------ -------
31,584,912 35,249,375 5.2
Energy 120,000 El Paso Natural Gas Co. 5,749,547 7,965,000 1.2
130,000 Enron Corp. 5,701,185 6,110,000 0.9
------------ ------------ -------
11,450,732 14,075,000 2.1
Entertainment 100,000 +Viacom, Inc. (Class A) 4,607,042 4,725,000 0.7
170,000 The Walt Disney Co. 15,771,304 19,029,375 2.8
------------ ------------ -------
20,378,346 23,754,375 3.5
Financial Services 35,000 American Express Company 3,103,537 3,152,188 0.5
95,000 Federal National Mortgage Association 4,954,567 6,062,188 0.9
150,000 Morgan Stanley, Dean Witter, Discover
& Co. 9,143,822 10,453,125 1.5
365,000 Travelers Group, Inc. 14,617,869 20,348,750 3.0
------------ ------------ -------
31,819,795 40,016,251 5.9
Food 30,000 ConAgra Inc. 649,650 900,000 0.1
30,000 Wrigley (Wm.) Jr. Co. (Class B) 1,890,550 2,291,250 0.4
------------ ------------ -------
2,540,200 3,191,250 0.5
Food Merchandising 75,000 Albertson's, Inc. 2,849,355 3,510,938 0.5
150,000 +Meyer (Fred), Inc. 2,851,086 6,665,625 1.0
------------ ------------ -------
5,700,441 10,176,563 1.5
Home Furnishings 180,000 Ethan Allen Interiors, Inc. 9,425,905 10,035,000 1.5
Hotel 20,000 Marriott International, Inc. 994,115 1,515,000 0.2
Household Products 20,000 Colgate-Palmolive Co. 1,401,400 1,623,750 0.2
20,000 Kimberly-Clark Corporation 1,078,644 1,113,750 0.2
100,000 Procter & Gamble Co. 5,346,649 8,493,750 1.3
45,000 Unilever N.V. (NY Registered Shares) 2,568,609 2,894,063 0.4
------------ ------------ -------
10,395,302 14,125,313 2.1
Information Processing 250,000 First Data Corp. 9,431,215 8,500,000 1.3
Insurance 10,000 Aetna Inc. 822,491 873,750 0.1
95,000 American International Group, Inc. 8,617,671 11,417,812 1.7
------------ ------------ -------
9,440,162 12,291,562 1.8
Leisure 185,000 Polygram N.V. (NY Registered Shares) 9,645,436 9,620,000 1.4
Medical -- Technology 125,000 +Boston Scientifc Corp. 7,080,271 7,468,750 1.1
75,000 Guidant Corp. 4,862,965 5,470,312 0.8
20,000 Johnson & Johnson 947,465 1,510,000 0.2
------------ ------------ -------
12,890,701 14,449,062 2.1
Oil Services 135,000 Baker Hughes, Inc. 5,593,791 5,526,562 0.8
125,000 Diamond Offshore Drilling, Inc. 4,876,889 5,664,062 0.8
80,000 Schlumberger Ltd. 4,851,262 6,030,000 0.9
------------ ------------ -------
15,321,942 17,220,624 2.5
Pharmaceuticals 30,000 Amgen, Inc. 1,598,927 1,593,750 0.2
140,000 Bristol-Myers Squibb Co. 12,364,747 14,026,250 2.1
150,000 Merck & Co., Inc. 14,481,819 19,134,375 2.8
150,000 Pfizer, Inc. 9,449,770 13,275,000 2.0
------------ ------------ -------
37,895,263 48,029,375 7.1
Photography 25,000 Eastman Kodak Co. 1,602,338 1,640,625 0.2
Pollution Control 20,000 Waste Management Inc. 591,174 500,000 0.1
Restaurant 25,000 McDonald's Corp. 1,141,245 1,368,750 0.2
Retail Specialty 70,000 CVS Corporation 4,085,892 5,184,375 0.8
135,000 Gap Inc. (The) 5,452,669 6,032,812 0.9
700,000 +Staples Inc. 13,028,523 14,787,500 2.2
140,000 Walgreen Co. 3,955,723 5,136,250 0.7
------------ ------------ -------
26,522,807 31,140,937 4.6
Retail Stores 350,000 Wal-Mart Stores, Inc. 11,504,809 16,209,375 2.4
Semiconductor 260,000 +Applied Materials, Inc. 9,514,476 9,571,250 1.4
Capital Equipment
Software -- Computer 400,000 +Baan Company, N.V. (US Registered Shares) 11,975,073 17,975,000 2.7
60,000 +Microsoft Corp. 3,328,750 5,085,000 0.8
220,000 +PeopleSoft, Inc. 8,907,272 9,817,500 1.4
150,000 SAP AG (Systeme, Anwendungen, Produkte
in der Datenverarbeitung) (ADR)(a) 10,425,846 20,512,500 3.0
------------ ------------ -------
34,636,941 53,390,000 7.9
Telecommunications 240,000 Sprint Corporation 14,564,609 15,840,000 2.3
Toys 175,000 Mattel, Inc. 6,563,982 7,404,687 1.1
Travel & Lodging 115,000 Carnival Corporation (Class A) 5,499,260 6,770,625 1.0
------------ ------------ -------
Total Stocks 502,834,684 611,318,750 90.3
============ ============ =======
<CAPTION>
Face
Amount Short-Term Securities
<S> <C> <C> <C> <C> <C>
Commercial $10,000,000 Atlantic Asset Securitization Corporation,
Paper* 5.52% due 3/12/1998 9,981,600 9,981,600 1.5
5,000,000 Delaware Funding Corp., 5.52% due
3/16/1998 4,987,733 4,987,733 0.7
10,000,000 Finova Capital Corp., 5.50% due 3/04/1998 9,993,889 9,993,889 1.5
4,662,000 General Motors Acceptance Corp., 5.69%
due 3/02/1998 4,660,526 4,660,526 0.7
15,000,000 Lexington Parker Capital Co. LLC, 5.50%
due 3/06/1998 14,986,250 14,986,250 2.2
22,000,000 Riverwoods Funding Corp., 5.48% due
3/06/1998 21,979,907 21,979,907 3.2
------------ ------------ -------
Total Short-Term Securities 66,589,905 66,589,905 9.8
============ ============ =======
Total Investments $569,424,589 677,908,655 100.1
============
Liabilities in Excess of Other Assets (672,219) (0.1)
------------ -------
Net Assets $677,236,436 100.0%
============ =======
* 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.
+ Non-income producing security.
(a) American Depositary Receipts (ADR).
See Notes to Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL INFORMATION
Statement of Assets and Liabilities as of February 28, 1998
<S> <C> <C> <C>
Assets: Investments, at value (identified cost -- $569,424,589) (Note 1a) $677,908,655
Cash 78,047
Receivables:
Capital shares sold $5,394,600
Dividends 283,595 5,678,195
------------
Deferred organization expenses (Note 1f) 5,077
Prepaid registration fees and other assets (Note 1f) 58,750
------------
Total assets 683,728,724
------------
Liabilities: Payables:
Securities purchased 4,061,271
Capital shares redeemed 1,525,805
Distributor (Note 2) 362,804
Investment adviser (Note 2) 312,051 6,261,931
------------
Accrued expenses and other liabilities 230,357
------------
Total liabilities 6,492,288
------------
Net Assets: Net assets $677,236,436
============
Net Assets Class A Shares of capital stock, $0.10 par value, 100,000,000 shares
Consist of: authorized $566,838
Class B Shares of capital stock, $0.10 par value, 100,000,000 shares
authorized 2,317,225
Class C Shares of capital stock, $0.10 par value, 100,000,000 shares
authorized 620,442
Class D Shares of capital stock, $0.10 par value, 100,000,000 shares
authorized 509,070
Paid-in capital in excess of par 552,267,471
Accumulated investment loss -- net (717,621)
Undistributed realized capital gains on investments -- net 13,188,945
Unrealized appreciation on investments -- net 108,484,066
------------
Net assets $677,236,436
============
Net Asset Value: Class A -- Based on net assets of $98,908,012 and 5,668,378 shares
outstanding $17.45
============
Class B -- Based on net assets of $386,247,656 and 23,172,252 shares
outstanding $16.67
============
Class C -- Based on net assets of $103,879,295 and 6,204,417 shares
outstanding $16.74
============
Class D -- Based on net assets of $88,201,473 and 5,090,704 shares
outstanding $17.33
============
See Notes to Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of Operations for the Six Months Ended February 28, 1998
<S> <C> <C>
Investment Income Dividends (net of $7,782 foreign withholding tax) $1,982,604
(Notes 1d & 1e): Interest and discount earned 1,350,439
------------
Total income 3,333,043
------------
Expenses: Investment advisory fees (Note 2) 1,613,898
Account maintenance and distribution fees -- Class B (Note 2) 1,378,910
Account maintenance and distribution fees -- Class C (Note 2) 418,865
Transfer agent fees -- Class B (Note 2) 192,581
Account maintenance fees -- Class D (Note 2) 85,271
Registration fees (Note 1f) 69,271
Transfer agent fees -- Class C (Note 2) 59,897
Printing and shareholder reports 48,408
Transfer agent fees -- Class A (Note 2) 40,338
Transfer agent fees -- Class D (Note 2) 40,000
Professional fees 35,797
Accounting services (Note 2) 24,610
Directors' fees and expenses 18,368
Custodian fees 14,665
Amortization of organization expenses (Note 1f) 2,310
Other 7,475
------------
Total expenses 4,050,664
------------
Investment loss -- net (717,621)
------------
Realized & Realized gain from investments -- net 13,737,091
Unrealized Gain on Change in unrealized appreciation on investments -- net 58,961,406
Investments -- Net ------------
(Notes 1b, 1c, Net Increase in Net Assets Resulting from Operations $71,980,876
1e & 3): ============
See Notes to Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
Statements of Changes in Net Assets
For the Six For the Year
Months Ended Year Ended
Increase (Decrease) in Net Assets: Feb. 28, 1998 Aug. 31, 1997
<S> <C> <C> <C>
Operations: Investment loss -- net $(717,621) $(986,327)
Realized gain on investments -- net 13,737,091 63,286,586
Change in unrealized appreciation on investments -- net 58,961,406 31,560,205
------------ ------------
Net increase in net assets resulting from operations 71,980,876 93,860,464
------------ ------------
Distributions to Realized gain on investments -- net:
Shareholders Class A (8,425,794) (4,708,644)
(Note 1g): Class B (34,969,855) (11,489,976)
Class C (10,532,443) (4,699,934)
Class D (8,909,959) (2,535,797)
------------ ------------
Net decrease in net assets resulting from distributions to
shareholders (62,838,051) (23,434,351)
------------ ------------
Capital Share Net increase in net assets derived from capital share transactions 261,575,322 95,459,275
Transactions ------------ ------------
(Note 4):
Net Assets: Total increase in net assets 270,718,147 165,885,388
Beginning of period 406,518,289 240,632,901
------------ ------------
End of period $677,236,436 $406,518,289
============ ============
See Notes to Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
Financial Highlights
Class A++
For the For the
Six Period
The following per share data and ratios have been derived Months Oct. 21,
from information provided in the financial statements. Ended For the Year Ended 1994+ to
Feb. 28, August 31, Aug. 31,
1998 1997 1996 1995
Increase (Decrease) in Net Asset Value:
<S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $17.37 $13.60 $11.66 $9.99
Operating --------- --------- --------- ---------
Performance: Investment income -- net .04 .07 .07 --+++++
Realized and unrealized gain on investments
-- net 2.38 4.95 2.13 1.98
--------- --------- --------- ---------
Total from investment operations 2.42 5.02 2.20 1.98
--------- --------- --------- ---------
Less distributions from realized gain on
investments -- net (2.34) (1.25) (.26) (.31)
--------- --------- --------- ---------
Net asset value, end of period $17.45 $17.37 $13.60 $11.66
========= ========= ========= =========
Total Investment Based on net asset value per share 14.65%++++ 39.24% 19.02% 20.55%++++
Return:** ========= ========= ========= =========
Ratios to Average Expenses .86%* .99% 1.12% 1.46%*
Net Assets: ========= ========= ========= =========
Investment income -- net .49%* .47% .51% .02%*
========= ========= ========= =========
Supplemental Net assets, end of period (in thousands) $98,908 $62,049 $47,048 $21,288
Data: ========= ========= ========= =========
Portfolio turnover 23.53% 94.38% 82.10% 80.41%
========= ========= ========= =========
Average commission rate paid+++ $.0630 $.0628 $.0623 --
========= ========= ========= =========
* Annualized.
** Total investment returns exclude the effects of sales loads.
+ Commencement of operations.
++ Based on average shares outstanding.
+++ 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.
++++ Aggregate total investment return.
+++++ Amount is less than $.01 per share.
See Notes to Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
Class B++
For the For the
Six Period
The following per share data and ratios have been derived Months Oct. 21,
from information provided in the financial statements. Ended For the Year Ended 1994+ to
Feb. 28, August 31, Aug. 31,
1998 1997 1996 1995
Increase (Decrease) in Net Asset Value:
<S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $16.69 $13.14 $11.40 $9.85
Operating --------- --------- --------- ---------
Performance: Investment loss -- net (.04) (.09) (.07) (.09)
Realized and unrealized gain on investments
-- net 2.26 4.79 2.07 1.95
--------- --------- --------- ---------
Total from investment operations 2.22 4.70 2.00 1.86
--------- --------- --------- ---------
Less distributions from realized gain on
investments -- net (2.24) (1.15) (.26) (.31)
--------- --------- --------- ---------
Net asset value, end of period $16.67 $16.69 $13.14 $11.40
========= ========= ========= =========
Total Investment Based on net asset value per share 13.97%++++ 37.95% 17.68% 19.60%++++
Return:** ========= ========= ========= =========
Ratios to Average Expenses 1.88%* 2.02% 2.16% 2.48%*
Net Assets: ========= ========= ========= =========
Investment loss -- net (.54%)* (.59%) (.54%) (.95%)*
========= ========= ========= =========
Supplemental Net assets, end of period (in thousands) $386,248 $216,636 $116,641 $63,748
Data: ========= ========= ========= =========
Portfolio turnover 23.53% 94.38% 82.10% 80.41%
========= ========= ========= =========
Average commission rate paid+++ $.0630 $.0628 $.0623 --
========= ========= ========= =========
* Annualized.
** Total investment returns exclude the effects of sales loads.
+ Commencement of operations.
++ Based on average shares outstanding.
+++ 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.
++++ Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
Class C+
For the
Six
The following per share data and ratios have been derived Months
from information provided in the financial statements. Ended
Feb. 28, For the Year Ended August 31,
1998 1997 1996 1995 1994
Increase (Decrease) in Net Asset Value:
<S> <C> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $16.72 $13.14 $11.40 $9.96 $9.86
Operating --------- --------- --------- --------- ---------
Performance: Investment loss -- net (.04) (.09) (.07) (.09) (.05)
Realized and unrealized gain on
investments -- net 2.27 4.79 2.07 1.84 .15
--------- --------- --------- --------- ---------
Total from investment operations 2.23 4.70 2.00 1.75 .10
--------- --------- --------- --------- ---------
Less distributions from realized gain
on investments -- net (2.21) (1.12) (.26) (.31) --
--------- --------- --------- --------- ---------
Net asset value, end of period $16.74 $16.72 $13.14 $11.40 $9.96
========= ========= ========= ========= =========
Total Investment Based on net asset value per share 13.97%++++ 37.90% 17.68% 18.28% 1.01%
Return:** ========= ========= ========= ========= =========
Ratios to Average Expenses 1.88%* 2.02% 2.15% 2.44% 2.35%
Net Assets: ========= ========= ========= ========= =========
Investment loss -- net (.54%)* (.58%) (.57%) (.88%) (.52%)
========= ========= ========= ========= =========
Supplemental Net assets, end of period (in thousands) $103,879 $74,732 $54,052 $44,220 $47,263
Data: ========= ========= ========= ========= =========
Portfolio turnover 23.53% 94.38% 82.10% 80.41% 112.68%
========= ========= ========= ========= =========
Average commission rate paid++ $.0630 $.0628 $.0623 -- --
========= ========= ========= ========= =========
* Annualized.
** Total investment returns exclude the effects of sales loads.
+ Based on average shares outstanding.
++ 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.
++++ Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
Class D+
For the
Six
The following per share data and ratios have been derived Months
from information provided in the financial statements. Ended
Feb. 28, For the Year Ended August 31,
1998 1997 1996 1995 1994
Increase (Decrease) in Net Asset Value:
<S> <C> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $17.27 $13.54 $11.64 $10.09 $9.91
Operating --------- --------- --------- --------- ---------
Performance: Investment income (loss) -- net .02 .03 .03 (.01) .03
Realized and unrealized gain on
investments -- net 2.36 4.93 2.13 1.87 .15
--------- --------- --------- --------- ---------
Total from investment operations 2.38 4.96 2.16 1.86 .18
--------- --------- --------- --------- ---------
Less distributions from realized gain
on investments -- net (2.32) (1.23) (.26) (.31) --
--------- --------- --------- --------- ---------
Net asset value, end of period $17.33 $17.27 $13.54 $11.64 $10.09
========= ========= ========= ========= =========
Total Investment Based on net asset value per share 14.47%++++ 38.90% 18.70% 19.15% 1.82%
Return:** ========= ========= ========= ========= =========
Ratios to Average Expenses 1.11%* 1.24% 1.37% 1.65% 1.58%
Net Assets: ========= ========= ========= ========= =========
Investment income (loss) -- net .23%* .17% .24% (.10%) .31%
========= ========= ========= ========= =========
Supplemental Net assets, end of period (in thousands) $88,201 $53,101 $22,892 $13,231 $8,623
Data: ========= ========= ========= ========= =========
Portfolio turnover 23.53% 94.38% 82.10% 80.41% 112.68%
========= ========= ========= ========= =========
Average commission rate paid++ $.0630 $.0628 $.0623 -- --
========= ========= ========= ========= =========
* Annualized.
** Total investment returns exclude the effects of sales loads.
+ Based on average shares outstanding.
++ 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.
++++ Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Fundamental Growth Fund, Inc. February 28, 1998
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 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 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.
(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.
[bullet] Financial futures contracts -- The Fund 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 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.
[bullet] 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.
(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 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 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
Maintenance Distribution
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
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, 1998, 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 $794 $10,891
Class D $22,068 $303,733
For the six months ended February 28, 1998, MLPF&S received
contingent deferred sales charges of $249,548 and $5,801 relating to
transactions in Class B and Class C Shares, respectively.
In addition, MLPF&S received $13,878 in commissions on the execution
of portfolio security transactions for the Fund for the six months
ended February 28, 1998.
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, 1998 were $284,854,984 and
$107,916,480, respectively.
Net realized gains (losses) for the six months ended February 28,
1998 and net unrealized gains as of February 28, 1998 were as
follows:
Realized Unrealized
Gains (Losses) Gains
Long-term investments $13,737,591 $108,484,066
Short-term investments (500) --
------------ ------------
Total $13,737,091 $108,484,066
============ ============
As of February 28, 1998, net unrealized appreciation for Federal
income tax purposes aggregated $108,484,066, of which $115,959,190
related to appreciated securities and $7,475,124 related to
depreciated securities. At February 28, 1998, the aggregate cost of
investments for Federal income tax purposes was $569,424,589.
4. Capital Share Transactions:
Net increase in net assets derived from capital share transactions
were $261,575,322 and $95,459,275 for the six months ended February
28, 1998 and for the year ended August 31, 1997, respectively.
Transactions in capital shares for each class were
as follows:
Class A Shares for the
Six Months Ended Dollar
February 28, 1998 Shares Amount
Shares sold 2,943,553 $49,638,632
Shares issued to share-
holders in reinvestment
of distributions 492,245 8,166,345
------------ ------------
Total issued 3,435,798 57,804,977
Shares redeemed (1,339,016) (23,297,123)
------------ ------------
Net increase 2,096,782 $34,507,854
============ ============
Class A Shares for the Year Dollar
Ended August 31, 1997 Shares Amount
Shares sold 5,300,860 $80,749,430
Shares issued to share-
holders in reinvestment
of distributions 318,999 4,411,762
------------ ------------
Total issued 5,619,859 85,161,192
Shares redeemed (5,508,434) (81,532,077)
------------ ------------
Net increase 111,425 $3,629,115
============ ============
Class B Shares for the
Six Months Ended Dollar
February 28, 1998 Shares Amount
Shares sold 10,261,713 $166,923,162
Shares issued to share-
holders in reinvestment
of distributions 2,042,041 32,448,035
------------ ------------
Total issued 12,303,754 199,371,197
Automatic conversion
of shares (25,356) (415,785)
Shares redeemed (2,089,927) (34,374,393)
------------ ------------
Net increase 10,188,471 $164,581,019
============ ============
Class B Shares for the Year Dollar
Ended August 31, 1997 Shares Amount
Shares sold 8,146,257 $124,318,206
Shares issued to share-
holders in reinvestment
of distributions 782,595 10,471,125
------------ ------------
Total issued 8,928,852 134,789,331
Automatic conversion
of shares (23,111) (352,449)
Shares redeemed (4,796,356) (69,880,135)
------------ ------------
Net increase 4,109,385 $64,556,747
============ ============
Class C Shares for the
Six Months Ended Dollar
February 28, 1998 Shares Amount
Shares sold 1,817,170 $29,652,844
Shares issued to share-
holders in reinvestment
of distributions 592,390 9,454,545
------------ ------------
Total issued 2,409,560 39,107,389
Shares redeemed (674,631) (11,193,408)
------------ ------------
Net increase 1,734,929 $27,913,981
============ ============
Class C Shares for the Year Dollar
Ended August 31, 1997 Shares Amount
Shares sold 1,343,912 $20,658,965
Shares issued to share-
holders in reinvestment
of distributions 310,633 4,165,597
------------ ------------
Total issued 1,654,545 24,824,562
Shares redeemed (1,297,675) (19,022,602)
------------ ------------
Net increase 356,870 $5,801,960
============ ============
Class D Shares for the
Six Months Ended Dollar
February 28, 1998 Shares Amount
Shares sold 2,276,042 $38,715,211
Automatic conversion
of shares 24,432 415,785
Shares issued to share-
holders in reinvestment
of distributions 485,816 8,011,111
------------ ------------
Total issued 2,786,290 47,142,107
Shares redeemed (769,773) (12,569,639)
------------ ------------
Net increase 2,016,517 $34,572,468
============ ============
Class D Shares for the Year Dollar
Ended August 31, 1997 Shares Amount
Shares sold 2,051,457 $31,598,761
Automatic conversion
of shares 22,419 352,449
Shares issued to share-
holders in reinvestment
of distributions 164,753 2,268,645
------------ ------------
Total issued 2,238,629 34,219,855
Shares redeemed (855,358) (12,748,402)
------------ ------------
Net increase 1,383,271 $21,471,453
============ ============
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
Lawrence R. Fuller, Senior Vice President and
Portfolio Manager
Norman R. Harvey, Senior Vice President
Donald C. Burke, Vice President
Gerald M. Richard, Treasurer
Barbara G. Fraser, Secretary
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
