MERRILL
LYNCH
CONSULTS
INTERNATIONAL
PORTFOLIO
Semi-Annual Report April 30, 1994
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 con-
sidered a representation of future performance. Investment re-
turn and principal value of shares will fluctuate so that shares,
when redeemed, may be worth more or less than their original
cost.
Merrill Lynch Consults
International Portfolio
Box 9011
Princeton, NJ
08543-9011
<PAGE>
MERRILL LYNCH CONSULTS INTERNATIONAL PORTFOLIO
Worldwide
Investments as of
April 30, 1994
Ten Largest Industries Percent of
(Equity Investments) Net Assets
Automobile & Equipment 8.3%
Building & Construction 7.5
Machinery 6.7
Conglomerates 6.3
Pharmaceuticals 5.4
Percent of
Net Assets
Utilities 4.3%
Telecommunications 3.9
Leisure 3.8
Printing 3.5
Banking 3.5
Officers and
Trustees
Arthur Zeikel, President and Trustee
Kenneth S. Axelson, Trustee
Herbert I. London, Trustee
Joseph L. May, Trustee
Andre F. Perold, Trustee
Bernard J. Durnin, Senior Vice President
Donald C. Burke, Vice President
Gerald M. Richard, Treasurer
Mark B. Goldfus, Secretary
Custodian
Brown Brothers Harriman & Co.
40 Water Street
Boston, Massachusetts 02109
Transfer Agent
Financial Data Services, Inc.
Transfer Agency Operations Department
4800 Deer Lake Drive East
Jacksonville, Florida 32246-6484
(800) 637-3863
<PAGE>
DEAR SHAREHOLDER
The six-month period ended April 30, 1994 saw dramatic shifts in
investor sentiment and market performance, led by changes in liqui-
dity flows, shifting investor perceptions on interest rate expec-
tations and relative market valuations, and internal political
issues. Equity markets were at new highs at the end of 1993, but
the first four months of 1994 have been characterized by high vol-
atility and widespread profit taking. The European, Asian and Far
East (EAFE) stock index advanced 5.7% over the past six months.
November was a difficult month for most equity markets around the
world. Corrections were triggered primarily by a backup in US
interest rates as well as by the general perception that certain
markets had moved too far too fast. However, the markets rebounded
in December with dramatic rallies driven by renewed optimism follow-
ing the successful conclusion of the General Agreement on Tariffs
and Trade negotiations. January was a good month, although a major
shift was evident as investors shunned the Southeast Asian markets
and took a more positive view on Japan. By February, the euphoria
of the liquidity and interest rate-inspired market rallies of last
year gave way to widespread profit taking. Global equity markets
were most heavily influenced by the sharp sell-off in the US bond
market, triggered by the first rise in US interest rates in several
years. Corrections were most severe in the Southeast Asian markets,
the top performers of last year. Japan and Italy were the notable
exceptions to the global trend this year, as they were driven ahead
by internal political and economic dynamics.
Japan's markets experienced a great change in investor sentiment
during the six-month period ended April 30, 1994. Market activity
was dominated by the perception of the government's willingness and
ability to take definitive action to stimulate the lagging economy.
The market had fallen by about 16% during November in US dollar
terms (giving up most of its gains for the year), as investors took
the view that the government still was concerned largely with poli-
tical reforms to the exclusion of economic policy. However, the
approval of political reforms in January led to a significant rally
in the equity market, making Japan one of the best-performing major
equity markets in the world for the first four months of 1994 (up
over 21% in US dollar terms). This strong performance has been
somewhat surprising in light of the uncertain political situation
which has existed since the ending of 40 years of Liberal Democratic
Party control with the fall of the Miyazawa government in 1993.
<PAGE>
The performance of the Southeast Asian markets also experienced a
major shift during the April period. By the end of 1993, the Hong
Kong and Malaysian markets had both advanced by 116% in US dollar
terms, with a 27% rise in both markets in December alone. It is not
surprising that corrections followed in January, as investors took
profits and looked for better value in other markets, including
Japan. The rise in US interest rates also took a toll as these
economies still have sizeable links to the US economy. While the
Hong Kong market is still down substantially this year (22.8%), an
improvement in share prices was seen in April, particularly in
Singapore and Malaysia. These markets have been less vulnerable to
negative news on China, such as the deteriorating trade talks with
the United States and the health of Deng Xiao Ping.
Despite the continued poor economic environment in Europe, most
markets in the region continued to benefit in December and January
from strong liquidity flows, optimism on interest rates and eventual
economic recovery, resulting in strong equity market gains. Never-
theless, most European markets succumbed to the turmoil in the
global bond markets, and thus were characterized by high volatility
and corrections throughout February and March. The notable exception
to the widespread pessimism in Europe was Italy, whose market
reacted favorably to election results and announcements of major
privatizations. Italy's market is up 39.5% in US dollar terms since
the beginning of 1994. The German equity market also has shown a
surprising resilience in recent months, probably in response to
signs that the economy is emerging from recession and could expand
by as much as 1%--1.5% this year. The Bundesbank also has maintained
its policy of gradual interest rate reductions, which has in recent
weeks allayed concerns that European interest rates would move in
sympathy with those in the United States.
The Latin American markets provided strong returns during the first
half of the April period. In particular, the Mexican stock market,
which advanced 46% in US dollar terms for the year 1993, defied the
November corrections in the global equity markets with a rally
driven by the passage of the North American Free Trade Agreement by
the US Congress. However, a major correction was triggered in March
and April by the political uncertainties resulting from the assass-
ination of presidential candidate Luis Colosio. This decline was
exacerbated by the rise in US interest rates.
<PAGE>
Investment Strategy
We continued increasing our exposure to the Japanese stock market
throughout the first few months of 1994, since it is not expensive
on a price/book value or price/cash flow basis. Japanese equities
represented 41% of the Fund's net assets at the end of the April
period, the highest weighting since the Fund's inception. We
slightly reduced our exposure in Europe, where we see more limited
potential in the near term. Nevertheless, we still remain positive
on Europe as a whole as we look for further interest rate declines
there. Finally, we maintained our exposure in Latin America and are
at the lower end of our allocation range for Southeast Asia.
Looking forward, we believe that while the international market
environment will remain difficult over the intermediate term,
international equities should still provide positive returns over
the coming year. We believe that the international equity markets
will focus less on the course of US interest rates and increasingly
on the underlying fundamentals and corporate earnings. The Japanese
market may undergo a period of consolidation until political uncer-
tainties are resolved. Nevertheless, further gains are possible
as the economy climbs out of recession.
With respect to emerging markets, we retain our positive long-term
view. In Asia, the strength of the regional trade that has developed
there cannot be disregarded. Furthermore, the liberalized economic
structure of the region should provide sustained growth for some
time to come. In Mexico, we anticipate that political problems will
be resolved without disruption to the economy. Investors will focus
increasingly on the fundamentals of the Mexican economy where real
growth should be the fastest in North America in the coming years.
We appreciate your continued interest in Merrill Lynch Consults
International Portfolio, and we look forward to reviewing our
strategy with you again in our upcoming annual report to share-
holders.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Jurg Boller)
Jurg Boller
Portfolio Manager
June 6, 1994
<PAGE>
PERFORMANCE DATA
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.
<TABLE>
Performance
Summary
<CAPTION>
Net Asset Value Capital Gains Dividends
Period Covered Beginning Ending Distributed Paid* % Change
<C> <C> <C> <C> <C> <C>
9/14/92--12/31/92 $10.00 $ 9.79 -- -- - 2.10%
1993 9.79 11.93 -- $0.050 +22.37
1/1/94--4/30/94 11.93 12.82 -- -- + 7.46
------
Total $0.050
Cumulative total return as of 4/30/94: +28.73%
<FN>
* Figures may include short-term capital gains distributions.
</TABLE>
Average Annual
Total Return
% Return Without
Period Covered Sales Charge
Year Ended 3/31/94 +20.19%
Inception (9/14/92) through 3/31/94 +15.64
<TABLE>
Recent
Performance
Results
<CAPTION>
12 Month 3 Month
4/30/94 1/31/94 4/30/93 % Change % Change
<S> <C> <C> <C> <C> <C>
ML Consults International Portfolio $12.82 $12.92 $10.95 +17.08% -0.77%
ML Consults International Portfolio--Total Return +17.57(1) -0.77
<FN>
(1) Percent change includes reinvestment of $0.050 per
share ordinary income dividends.
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS
<CAPTION>
LATIN Shares Value Percent of
AMERICA Industries Held Stocks Cost (Note 1a)Net Assets
<S> <S> <C> <S> <C> <C> <C>
Argentina Banking 77,850 Banco de Galicia y Buenos Aires S.A.
(ADR)* $ 1,783,164 $ 2,335,500 1.0%
Oil & Related 75,000 YPF S.A. (ADR)* 1,658,555 1,856,250 0.7
Total Investments in Argentinean Stocks 3,441,719 4,191,750 1.7
Mexico Banking 54,500 Grupo Financiero Bancomer, S.A. de C.V.
(ADR)* 1,785,441 1,335,250 0.5
Beverage 417,000 Fomento Economico Mexicano, S.A. de C.V.
'B' (Femsa) 1,802,298 1,936,868 0.8
Building & 120,000 Empresas ICA Sociedad Controladora, S.A.
Construction de C.V.(ADR)* 2,383,762 2,850,000 1.2
Telecommunications 55,000 Telefonos de Mexico, S.A. de C.V. (ADR)* 2,896,991 3,238,125 1.3
Total Investments in Mexican Stocks 8,868,492 9,360,243 3.8
Total Investments in Latin America 12,310,211 13,551,993 5.5
NORTH
AMERICA
Canada Metals 132,700 Noranda, Inc. 2,176,720 2,318,166 1.0
Natural Gas 145,000 Westcoast Energy, Inc. (ADR)* 2,366,385 2,501,250 1.0
Utilities
Total Investments in North America 4,543,105 4,819,416 2.0
<PAGE>
PACIFIC
BASIN
Australia Banking 285,419 National Australia Bank, Ltd. 2,080,379 2,418,303 1.0
Metals 190,000 Broken Hill Proprietary, Ltd. 1,903,565 2,303,636 0.9
Publishing 381,000 News Corporation, Ltd. 2,425,810 2,630,339 1.1
Total Investments in Australian Stocks 6,409,754 7,352,278 3.0
Hong Kong Foods 1,270,000 Dairy Farms International Holdings, Ltd. 2,159,486 1,857,975 0.8
Machinery 870,000 Johnson Electric Holdings, Ltd. 2,084,667 2,230,192 0.9
Multi-Industry 507,000 Hutchison Whampoa, Ltd. 1,441,529 2,084,056 0.8
Total Investments in Hong Kong Stocks 5,685,682 6,172,223 2.5
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued)
<CAPTION>
PACIFIC BASIN Shares Value Percent of
(concluded) Industries Held Stocks Cost (Note 1a)Net Assets
<S> <S> <C> <S> <C> <C> <C>
Japan Apparel 209,000 Tokyo Style $ 3,547,287 $ 3,799,253 1.6%
Automobile & 240,000 Honda Motor Co., Ltd. 3,143,878 3,961,875 1.6
Equipment 225,000 Nippon Denso Co., Ltd. 3,509,953 4,266,974 1.7
407,000 Yamaha Motors Co., Ltd. 3,449,377 3,599,292 1.5
------------ ------------ ------
10,103,208 11,828,141 4.8
Building & 239,000 Daiwa House Industry Co., Ltd. 3,580,881 3,593,102 1.6
Construction 416,000 Okumura Corp. 3,353,804 3,805,601 1.6
------------ ------------ ------
6,934,685 7,398,703 3.2
Chemicals 576,000 Mitsui Petrochemical Industries 3,687,068 4,612,754 1.9
390,000 Sekisui Chemical Co., Ltd. 3,637,262 3,985,457 1.6
------------ ------------ ------
7,324,330 8,598,211 3.5
<PAGE>
Electrical Equipment 408,000 Hitachi, Ltd. 3,166,130 3,848,678 1.6
Electric Utilities 125,000 Kansai Electric Power 3,455,059 3,242,606 1.3
Electronic 465,000 Hitachi Cable, Ltd. 3,556,196 3,742,115 1.4
Components 37,400 Keyence Corp. 2,864,834 3,968,950 1.6
------------ ------------ ------
6,421,030 7,711,065 3.0
Electronics 227,000 Matsushita Electric Industrial Co., Ltd. 2,995,704 3,724,968 1.5
Household Products 324,000 Kao Corp. 3,604,725 3,915,889 1.6
Insurance 522,000 Nippon Fire & Marine Insurance Co., Ltd. 3,753,858 3,846,910 1.6
International Trade 417,000 Sumitomo Corp. 3,665,673 4,044,207 1.7
Leisure 53,800 Nintendo Co., Ltd. 4,231,571 3,452,039 1.4
Machinery 575,000 Mitsubishi Heavy Industries, Ltd. 3,518,428 3,813,747 1.6
Merchandising 177,000 Fuji Photo Film Co., Ltd. 4,158,708 3,808,883 1.6
73,000 Ito-Yokado Co., Ltd. 3,324,377 3,837,575 1.5
------------ ------------ ------
7,483,085 7,646,458 3.1
Office Equipment 226,000 Canon, Inc. 2,999,779 3,664,145 1.4
Pharmaceuticals 188,000 Yamanouchi Pharmaceutical Co., Ltd. 3,984,713 3,565,294 1.4
Printing 216,000 Dai Nippon Printing, Ltd. 3,521,981 3,714,258 1.6
177,000 Komori Corp. 3,462,424 4,765,451 1.9
------------ ------------ ------
6,984,405 8,479,709 3.5
Steel 945,000 Nisshin Steel Company, Ltd. 3,712,594 3,834,971 1.6
Transportation 300,000 Kamigumi Co., Ltd. 3,460,500 3,596,345 1.6
Total Investments in Japanese Stocks 91,346,764 100,011,339 41.0
Malaysia Conglomerates 853,000 Sime Darby BHD 1,707,991 2,213,723 0.9
Total Investments in Malaysian Stocks 1,707,991 2,213,723 0.9
<PAGE>
Singapore Shipbuilding 336,000 Jurong Shipyard, Ltd. 2,462,064 3,220,585 1.3
Total Investments in Singaporean Stocks 2,462,064 3,220,585 1.3
Thailand Agriculture 298,100 Charoen Pokphand Feedmill 1,351,770 1,894,954 0.8
Real Estate 217,300 MDX Co., Ltd.--Foreign 1,490,929 1,312,261 0.5
Total Investments in Thai Stocks 2,842,699 3,207,215 1.3
Total Investments in Pacific Basin 110,454,954 122,177,363 50.0
WESTERN
EUROPE
France Automobile & 95,000 Michelin (C.G.D.E.) (Class B) 2,924,515 4,207,346 1.7
Equipment
Leisure 23,000 Accor S.A. 2,673,302 2,982,119 1.2
Oil & Related 28,400 Societe Nationale Elf Aquitaine (Ordinary) 2,068,116 2,074,278 0.8
Utilities 6,700 Compagnie Generale des Eaux (Ordinary) 2,819,604 3,049,908 1.3
Total Investments in French Stocks 10,485,537 12,313,651 5.0
Germany Conglomerates 11,750 Preussag AG 2,887,509 3,388,537 1.4
Pharmaceuticals 4,600 Schering AG 2,771,273 3,072,217 1.3
Utility 10,700 Veba AG 2,702,336 3,317,484 1.4
Total Investments in German Stocks 8,361,118 9,778,238 4.1
Italy Building & 505,000 Italcementi Fabbriche Riunit 3,159,699 5,602,294 2.3
Construction
Machinery 320,000 Danieli & Co. (Savings) RISP 1,176,409 1,405,908 0.6
Telecommunications 1,150,000 Societa Finanziara Telefonica S.p.A. (STET) 2,671,257 4,445,317 1.8
Total Investments in Italian Stocks 7,007,365 11,453,519 4.7
<PAGE>
Netherlands Airlines 20,000 KLM 473,207 574,651 0.2
Conglomerates 27,000 Unilever 2,920,835 2,987,111 1.2
Food Chains 150,000 Koninklijke Ahold N.V. 3,742,846 3,826,531 1.6
Total Investments in Netherlands Stocks 7,136,888 7,388,293 3.0
Norway Pharmaceuticals 140,000 Hafslund Nycomed 'B' Fria 2,573,922 2,317,462 1.0
Shipbuilding 50,000 Kvaerner A.S. 'B' Shares 2,631,182 2,489,950 1.0
Total Investments in Norwegian Stocks 5,205,104 4,807,412 2.0
Spain Oil & Related 120,000 Repsol S.A. 3,380,039 3,988,157 1.6
Utility 70,000 Empresa Nacional de Electricidad S.A. 2,724,152 3,461,140 1.4
Total Investments in Spanish Stocks 6,104,191 7,449,297 3.0
Switzerland Machinery 4,000 Sulzer Gebruder AG (Registered) 2,922,103 2,839,883 1.1
Pharmaceuticals 7,000 Ciba-Geigy AG (Registered) 3,457,472 4,163,883 1.7
Restaurants 9,200++Moevenpick Holdings (Bearer) 2,372,851 2,863,762 1.2
Total Investments in Swiss Stocks 8,752,426 9,867,528 4.0
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded)
<CAPTION>
WESTERN EUROPE Shares Value Percent of
(concluded) Industries Held Stocks Cost (Note 1a)Net Assets
<S> <S> <C> <S> <C> <C> <C>
United Kingdom Automobile & 69,200 GKN PLC Convertible Loan Units $ 490,866 $ 391,046 0.2%
Equipment 390,000 GKN PLC 2,979,942 3,672,133 1.5
------------ ------------ ------
3,470,808 4,063,179 1.7
Beverage 435,000 Grand Metropolitan PLC (Ordinary) 2,854,831 3,133,664 1.3
Buildings & 355,000 Hepworth PLC 2,113,370 1,995,331 0.8
Construction
Conglomerates 740,000 BTR PLC 4,169,128 4,450,767 1.8
14,181 ++BTR PLC (Warrants)(a) 0 15,683 0.0
600,000 Hanson PLC (Ordinary) 2,261,242 2,481,570 1.0
------------ ------------ ------
6,430,370 6,948,020 2.8
Electrical Equipment 550,000 General Electric Co., Ltd. (Ordinary) 2,722,709 2,524,748 1.0
Leisure 173,600 Thorn EMI PLC (Ordinary) 2,552,714 2,979,835 1.2
Machinery 380,000 Siebe PLC (Ordinary) 3,076,015 3,566,462 1.5
Metals 1,149,000 British Steel PLC (Ordinary) 1,816,332 2,663,325 1.1
Natural Gas 390,000 British Gas PLC 1,848,274 1,683,923 0.7
Utilities
Publishing 175,000 Reed International PLC (Ordinary) 1,773,302 2,237,655 0.9
Telecommunications 343,000 British Telecommunications PLC 2,224,660 1,917,490 0.8
Total Investments in United Kingdom Stocks 30,883,385 33,713,632 13.8
Total Investments in Western Europe 83,936,014 96,771,570 39.6
<CAPTION>
Face Amount Fixed-Income Securities
<S> <S> <S> <C> <S> <C> <C> <C>
France Automobile & Ffr 1,615,170 Michelin Bonds, 2.50% due 1/01/2001 273,386 284,535 0.1
Equipment
Total Investments in Fixed-Income
Securities 273,386 284,535 0.1
<CAPTION>
Short-Term Securities
<S> <S> <C> <S> <C> <C> <C>
United States Commercial Paper** $7,079,000 Associates Corp. of North America, 3.55%
due 5/02/1994 7,078,302 7,078,302 2.9
Total Investments in Short-Term Securities 7,078,302 7,078,302 2.9
Total Investments $218,595,972 244,683,179 100.1
============
Liabilities in Excess of Other Assets (144,603) (0.1)
------------ ------
Net Assets $244,538,576 100.0%
============ ======
<FN>
++Non-income producing security.
(a)Warrants entitle the fund to purchase a predetermined
number of shares of stock/face amount of bonds at a pre-
determined price until the expiration date.
*American Depositary Receipts (ADR).
**Commercial Paper is traded on a discount basis; the interest
rate shown is the discount rate paid at the time of purchase
by the fund.
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENT OF ASSETS AND LIABILITIES
<CAPTION>
As of April 30, 1994
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$218,595,972) (Note 1a) $244,683,179
Cash 97
Receivables:
Beneficial interest sold $ 1,545,377
Securities sold 1,420,654
Dividends 853,737 3,819,768
------------
Deferred organization expenses (Note 1e) 89,314
Prepaid expenses (Note 1e) 28,214
------------
Total assets 248,620,572
------------
<PAGE>
Liabilities: Payables:
Securities purchased 2,792,242
Beneficial interest purchased 570,300
Distributor (Note 2) 195,014
Investment adviser (Note 2) 146,260
Administration fee (Note 2) 48,754 3,752,570
------------
Accrued expenses and other liabilities 329,426
------------
Total liabilities 4,081,996
------------
Net Assets: Net assets $244,538,576
============
Net Assets Common shares of beneficial interest, $0.10 par value, unlimited number
Consist of: of shares authorized 1,907,242
Paid-in capital in excess of par 213,909,608
Accumulated investment loss--net (817,779)
Accumulated dividends in excess of investment income--net (834,656)
Undistributed realized capital gains and foreign currency trans-
actions--net 4,270,002
Unrealized appreciation on investments and foreign currency trans-
actions--net 26,104,159
------------
Net assets--Equivalent to $12.82 per share based on 19,072,414 shares of
beneficial interest outstanding $244,538,576
============
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENT OF OPERATIONS
<CAPTION>
For the Six Months Ended
April 30, 1994
<S> <S> <C> <C>
Investment Income Dividends (net of $231,183 foreign withholding tax) $ 1,498,599
(Notes 1c & 1d): Interest and discount earned 75,941
------------
Total income 1,574,540
------------
Expenses: Distribution fees (Note 2) 792,014
Investment advisory fees (Note 2) 792,014
Account maintenance fees (Note 2) 264,005
Administration fees (Note 2) 264,005
Custodian fees 133,842
Professional fees 32,280
Registration fees (Note 1e) 27,031
Printing and shareholder reports 23,619
Transfer agent fees (Note 2) 22,045
Amortization of organization expenses (Note 1e) 17,846
Trustees' fees 11,547
Other 12,071
------------
Total expenses 2,392,319
------------
Investment loss--net (817,779)
------------
Realized & Realized gain from:
Unrealized Gain on Investments--net $ 3,446,172
Investments & Foreign currency transactions 31,114 3,477,286
Foreign Currency ------------
Transactions--Net Change in unrealized appreciation:
(Notes 1b, 1d & 3): Investments--net 17,163,312
Foreign currency transactions 11,099 17,174,411
------------ ------------
Net realized and unrealized gain on investments and foreign
currency transactions 20,651,697
------------
Net Increase in Net Assets Resulting from Operations $ 19,833,918
============
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
For the Six For the Year
Months Ended Ended
Increase (Decrease) in Net Assets: April 30, 1994 Oct. 31, 1993
<S> <S> <C> <C>
Operations: Investment loss--net $ (817,779) $ (440,958)
Realized gain on investments and foreign currency transactions--net 3,477,286 1,225,028
Change in unrealized appreciation on investments and foreign currency
transactions--net 17,174,411 9,543,086
------------ ------------
Net increase in net assets resulting from operations 19,833,918 10,327,156
------------ ------------
<PAGE>
Dividends to In excess of investment income--net (834,656) --
Shareholders ------------ ------------
(Note 1f): Net decrease in net assets resulting from dividends to shareholders (834,656) --
------------ ------------
Beneficial Interest Net increase in net assets derived from beneficial interest transactions 49,783,357 148,792,595
Transactions ------------ ------------
(Note 4):
Net Assets: Total increase in net assets 68,782,619 159,119,751
Beginning of period 175,755,957 16,636,206
------------ ------------
End of period $244,538,576 $175,755,957
============ ============
See Notes to Financial Statements.
</TABLE>
<TABLE>
FINANCIAL HIGHLIGHTS
<CAPTION>
For the Period
The following per share data and ratios have been derived from For the Six For the Year September 14,
information provided in the financial statements. Months Ended Ended 1992++++ to
April 30, October 31, October 31,
Increase (Decrease) in Net Asset Value: 1994++ 1993++ 1992++
<S> <S> <C> <C> <C>
Per Share Net asset value, beginning of period $ 11.74 $ 9.60 $ 10.00
Operating ---------- ---------- ----------
Performance: Investment loss--net (.05) (.08) (.04)
Realized and unrealized gain (loss) on investments--net 1.18 2.22 (.36)
---------- ---------- ----------
Total from investment operations 1.13 2.14 (.40)
---------- ---------- ----------
Dividends to shareholders:
In excess of investment income--net (.05) -- --
---------- ---------- ----------
Net asset value, end of period $ 12.82 $ 11.74 $ 9.60
========== ========== ==========
<PAGE>
Total Investment Based on net asset value per share 9.65%+++ 22.29% (4.00%)+++
Return: ========== ========== ==========
Ratios to Expenses, net of reimbursement and excluding account maintenance
Average and distribution fees 1.52%* 1.76% 2.50%*
Net Assets: ========== ========== ==========
Expenses, net of reimbursement 2.27%* 2.76% 3.50%*
========== ========== ==========
Expenses 2.27%* 2.76% 4.45%*
========== ========== ==========
Investment loss--net (.77%)* (.86%) (2.77%)*
========== ========== ==========
Supplemental Net assets, end of period (in thousands) $ 244,539 $ 175,756 $ 16,636
Data: ========== ========== ==========
Portfolio turnover 13.92% 32.54% 0.00%
========== ========== ==========
<FN>
*Annualized.
+++Aggregate total investment return.
++Based on average number of shares outstanding during the period.
++++Commencement of Operations.
See Notes to Financial Statements.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
Merrill Lynch Consults International Portfolio (the "Fund") is
registered under the Investment Company Act of 1940 as a diver-
sified, open-end investment company. The following is a summary
of significant accounting policies followed by the Fund.
<PAGE>
(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. 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 Trustees as the
primary market. Securities traded in the over-the-counter market are
valued at the last available bid price in the over-the-counter mar-
ket prior to the time of valuation. Short-term investments are val-
ued at amortized cost, which approximates market. Securities and
assets for which market quotations are not readily available are
valued at fair market value as determined in good faith by or under
the direction of the Board of Trustees of the Fund.
(b) 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. Realized
and unrealized gains/losses on foreign currency transactions are the
result of settling (realized) or valuing (unrealized) receivables or
payables expressed in foreign currencies into US dollars. Realized
and unrealized gains or losses from investments include the effects
of foreign exchange rates on investments.
The Fund is authorized to enter into forward foreign exchange con-
tracts as a hedge against either specific transactions or portfolio
positions. Such contracts are not entered on the Fund's records.
However, the effect on operations is recorded from the date the Fund
enters into such contracts. Premium or discount is amortized over
the life of the contract.
(c) Income taxes--It is the Fund's policy to comply with the re-
quirements 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.
(d) Security transactions and investment income--Security trans-
actions are recorded on the dates the transactions are entered
into (the trade dates). Dividend income is recorded on the ex-
dividend dates, except that if the ex-dividend date has passed,
certain dividends from foreign securities are recorded as soon as
the Fund is informed of 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.
<PAGE>
(e) Deferred organization expenses and prepaid registration fees--
Costs related to the organization of the Fund are charged to expense
over a five-year period. Prepaid registration fees are charged to
expense as the related shares are issued.
(f) Dividends and distributions--Dividends and distributions paid by
the Fund are recorded on the ex-dividend date. Dividends in excess
of investment income--net, at end of period for financial statement
purposes result from tax treatment differing from book treatment.
NOTES TO FINANCIAL STATEMENTS (concluded)
2. Investment Advisory Agreement and Transactions with Affiliates:
The Fund has entered into an Investment Advisory Agreement with
Merrill Lynch (Suisse) Investment Management S.A. (the "Investment
Adviser"). The Investment Adviser is a subsidiary of Merrill Lynch
Bank (Suisse) S.A. which is, in turn, an indirect subsidiary of
Merrill Lynch & Co., Inc. Fund Asset Management, L.P. ("FAM") and
Merrill Lynch Asset Management U.K. Limited ("MLAM U.K.") have been
retained as sub-advisers (the "Sub-Advisers") to the Fund. Pursuant
to the sub-advisory agreements, the sub-advisers will provide
investment adviser services with respect to the management of the
Fund's cash position.
As compensation for its services to the Fund, the Investment Adviser
receives monthly compensation at the annual rate of 0.75% of the
average daily net assets of the Fund. The Fund will not pay any
incremental fee to the Sub-Advisers for their services.
Certain states in which shares of the Fund are qualified for sale
impose limitations on the expenses of the Fund. The most restric-
tive annual expense limitation requires that the Investment Adviser
reimburse the Fund to the extent that expenses (excluding interest,
taxes, distribution fees, brokerage fees and commissions, and extra-
ordinary items) exceed 2.5% of the Fund's first $30 million of
average daily net assets, 2.0% of the Fund's next $70 million of
average daily net assets, and 1.5% of the average daily net assets
in excess thereof. The Investment Adviser's obligation to reimburse
the Fund is limited to the amount of the investment advisory fee. No
fee payment will be made to the Investment Adviser during any fiscal
year which will cause such expenses to exceed the most restrictive
expense limitation applicable at the time of such payment.
<PAGE>
The Fund has an Administrative Agreement with Princeton Admini-
strators, Inc. (the "Administrator"), an indirect subsidiary of
Merrill Lynch & Co., Inc. The Administrator performs or arranges for
the performance of certain administrative services (i.e., services
other than investment advice and related portfolio activities)
necessary for the operation of the Fund, including maintaining the
books and records of the Fund, preparing reports and other documents
required by United States Federal, state and other applicable laws
and regulations to maintain the registration of the Fund and its
shares and providing the Fund with administrative office facilities.
For the services rendered to the Fund and the facilities furnished,
the Fund pays the Administrator a monthly fee equal to 0.25% of the
Fund's average daily net assets. Also, accounting services are
provided to the Fund by the Administrator, and the Fund reimburses
the Administrator for its costs in connection with such services on
a semi-annual basis.
The Fund has adopted a Plan of Distribution (the "Plan") in accor-
dance with Rule 12b-1 under the Investment Company Act of 1940
pursuant to which Merrill Lynch Funds Distributor, Inc. ("MLFD" or
"Distributor"), which is an indirect subsidiary of Merrill Lynch &
Co., Inc. (ML & Co.), receives an ongoing distribution and account
maintenance fee, which is accrued daily and paid monthly, at the
annual rates of 0.75% and 0.25%, respectively, of the average daily
net assets of the Fund. Pursuant to a sub-agreement with the Dis-
tributor, Merrill Lynch also provides account maintenance activ-
ities and distribution services to the Fund. The ongoing account
maintenance fee compensates the Distributor and Merrill Lynch for
providing account maintenance activities to the Fund's shareholders.
The ongoing distribution fee compensates the Distributor and
Merrill Lynch for providing shareholder and distribution services
and bearing distribution-related expenses ofthe Fund, including
payments to financial consultants for selling shares of the Fund.
As authorized by the Plan, the Distributor has entered into an
agreement with Merrill Lynch, Pierce, Fenner & Smith Inc. ("MLPF&S"),
an affiliate of the Investment Adviser, which provides for the com-
pensation of MLPF&S for providing distribution-related services to
the Fund. For the six months ended April 30, 1994, MLFD earned
$792,014 under the Plan, all of which was paid to MLPF&S pursuant
to the agreement.
<PAGE>
MLPF&S received $18,125 in commissions on the execution of portfolio
security transactions for the Fund during the period.
Financial Data Services, Inc. ("FDS"), a wholly-owned subsidiary of
ML & Co., acts as the Fund's transfer agent.
Certain officers and/or trustees of the Fund are officers and/or
trustees of FAM, the Investment Adviser (including their affiliated
companies), MLPF&S, FDS, MLFD, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the six months ended April 30, 1994 were $74,677,284 and
$28,941,846, respectively.
Net realized and unrealized gains as of April 30, 1994, were as
follows:
Realized Unrealized
Gains Gains
Long-term investments $ 3,446,172 $ 26,087,207
Foreign currency transactions 31,114 7,938
Foreign exchange contracts -- 9,014
------------- ------------
Total $ 3,477,286 $ 26,104,159
============= ============
As of April 30, 1994, net unrealized appreciation for Federal income tax
purposes aggregated $26,087,207, of which $30,146,059 related to appre-
ciated securities and $4,058,852 related to depreciated securities. The
aggregate cost of investments at April 30, 1994 for Federal income tax
purposes was $218,595,972.
4. Beneficial Interest Transactions:
Transactions in shares of beneficial interest were as follows:
For the Six Months Ended Dollar
April 30, 1994 Shares Amount
Shares sold 6,355,831 $ 77,511,925
Shares redeemed (2,315,304) (28,408,691)
Reinvestments 56,819 680,123
------------- ------------
Net increase 4,097,346 $ 49,783,357
============= ============
For the Year Ended Dollar
October 31, 1993 Shares Amount
Shares sold 13,877,188 $155,757,887
Shares redeemed (635,871) (6,965,292)
------------- ------------
Net increase 13,241,317 $148,792,595
============= ============
5. Commitments:
At April 30, 1994, the Fund had forward foreign exchange contracts
under which it had agreed to purchase and sell various foreign
currencies with values of approximately $1,525,000 and $443,000,
respectively.
