MERRILL LYNCH
AMERICAS INCOME
FUND, INC.
FUND LOGO
Semi-Annual Report
June 30, 1996
<PAGE>
The Fund has the ability to leverage to seek to provide shareholders
with a potentially higher rate of return. However, leveraging may
exaggerate changes in the net asset value of the Fund's shares and
in the yield on the Fund's portfolio.
Investing in emerging market securities involves a number of risk
factors and special considerations, including restrictions on
foreign investments and on repatriation of capital invested in
emerging markets, currency fluctuations, and potential price
volatility and less liquidity of securities traded in emerging
markets. In addition, there may be less publicly available
information about the issuers of securities, and such issuers may
not be subject to accounting, auditing and financial reporting
standards and requirements comparable to those to which US companies
are subject. Therefore, the Fund is designed as a long-term
investment for investors capable of assuming the risks of investing
in emerging markets. The Fund should be considered as a vehicle for
diversification and not as a complete investment program. Please
refer to the prospectus for details.
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.
<PAGE>
Merrill Lynch
Americas Income Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
MERRILL LYNCH AMERICAS INCOME FUND, INC.
The Benefits and
Risks of
Leveraging
The Fund is authorized to borrow money from banks in an amount up to
33 1/3% of the Fund's total assets (including the amount borrowed),
less all liabilities and indebtedness other than the bank borrowing.
The Fund is also authorized to borrow an additional 5% of its total
assets without regard to this limitation for temporary purposes.
Borrowings by the Fund create an opportunity for greater total
return but, at the same time, increase exposure to capital risk. For
example, leveraging may exaggerate changes in the net asset value of
Fund shares and in the yield on the Fund's portfolio. Although the
principal of such borrowings will be fixed, the Fund's assets may
change in value during the time the borrowings are outstanding.
Borrowing will create interest expenses for the Fund that can exceed
the income from the assets retained. To the extent the income
derived from securities purchased with borrowed funds exceeds the
interest the Fund will have to pay, the Fund's net income will be
greater than if borrowing were not used. Conversely, if the income
from the assets retained with borrowed funds is not sufficient to
cover the cost of borrowing, the net income of the Fund will be less
than if borrowing were not used, and therefore the amount available
for distribution to shareholders as dividends will be reduced.
<PAGE>
DEAR SHAREHOLDER
By the end of the quarter ended June 30, 1996, clear evidence
existed that the US economy was growing above trend. Investors,
afraid of a resurgence of inflation, began to speculate about the
size of the next Federal Reserve Board interest rate increase, and
the US bond market experienced a sharp sell-off. However, during the
June period, emerging markets debt outperformed the US Treasury
market. The primary reasons are the Latin American region is
experiencing an improving trend in economic and political
fundamentals. In addition, the higher yields and spreads of emerging
markets debt over US Treasury securities are historically wide and
provide a comfortable cushion for higher US interest rates. Another
factor is that the market technicals are in reasonable good terms.
Speculators are presently less involved than during past periods of
volatility in the US bond market. There are also less leveraged and
structured products. Investors and traders are exposed in a wiser
manner to emerging markets. Finally, the countries of the region
have liability management plans in progress or are in the process of
implementing them. The various governments' debt buy-back programs
will provide support to the prices of Brady Bonds.
In the absence of a resurgence in inflation, we believe that any
Federal Reserve Board interest rate increase will be a fine-tuning,
given the level of the real Federal Funds rate. A growth environment
in the United States without inflation is ideal for the export-
oriented economies of the Latin American region. As long as the
improving trend of fundamentals continue, the region will make
progress attracting capital.
Investment Environment
Mexico
In Mexico, the peso and local interest rates remained stable during
the past month. Most economic indicators point to a strengthening
economy. Data released for May indicated that exports registered a
record high of $8 billion. Recent data on wholesale sales and
consumer spending were very encouraging. The unemployment rate is
showing a consistent downward trend this year. Additionally, Mexico
announced that it would prepay US$4.7 billion to the US Treasury by
raising longer-term debt in the global market place.
<PAGE>
Argentina
Argentina remained stable as investors waited for more signs of
economic growth. We are in the early stages of a production-led
economic cycle. Record levels of deposits in the banking system
indicated confidence in government policy. Liquidity was abundant as
indicated by very low yields on treasury bills (letes). The economic
climate remained conducive to growth. If robust growth does not
materialize in the coming months, Argentina will need to finance a
larger-than-expected fiscal deficit, and this will involve
renegotiating targets with the International Monetary Fund (IMF).
Given Argentina's access to global capital markets and a good track
record of economic reform, dealing with the financial aspects of
delayed economic growth is unlikely to be problematic. However, the
political impact of delayed economic recovery could be a more
serious issue.
Brazil
In Brazil, the reform process continues at a standstill. The Cardoso
administration is considered to be rethinking its strategy regarding
constitutional reform and may opt to pursue many aspects of the
current reform package as provisional measures, which are a means of
implementing legislation by executive decree prior to subsequent
approval by congress. On the positive side, the national
privatization program gained new impetus. The new planning minister,
Kandir, is proposing an aggressive schedule of privatization of
companies including Companhia Vale do Rio Doce S.A. in February
1997, Centrais Eletricas Brasileiras S.A. and Electrobras by
December 1998. The administration is also targeting increased
economic growth for the second half.
Venezuela
Venezuela is performing well in the early stages of economic reform.
Contrary to market expectations, the Venezuelan bolivar was fairly
stable at the 470 level and there was no need for major intervention
in the currency markets. Inflation for June is expected at 8%, which
is well below the original expectation of 10%--12%. While inflation
for the year is expected at 100%, most of it is now behind us.
Venezuela has now endured the initial months of the year--generally
considered as the most vulnerable--without any significant political
or social backlash. Negotiations with the IMF concluded with
expectations of a signing in the second week of July and the
administration is managing the program better than expected. Since
the implementation of the new economic program, international
reserves grew approximately US$1 billion to nearly US$10.7 billion.
In Conclusion
We thank you for your investment in Merrill Lynch Americas Income
Fund, Inc., and we look forward to reviewing our outlook and
strategy with you again in our next report to shareholders.
<PAGE>
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Paolo Valle)
Paolo Valle
Vice President and
Senior Portfolio Manager
July 31, 1996
Officers and
Directors
Arthur Zeikel, President and Director
Donald Cecil, Director
Edward H. Meyer, Director
Charles C. Reilly, Director
Richard R. West, Director
Edward D. Zinbarg, Director
Terry K. Glenn, Executive Vice President
Joseph T. Monagle Jr., Senior Vice President
Alex V. Bouzakis, Vice President
Donald C. Burke, Vice President
Paolo H. Valle, Vice President
Gerald M. Richard, Treasurer
Mark B. Goldfus, Secretary
Custodian
Brown Brothers Harriman & Co.
40 Water Street
Boston, Massachusetts 02109
Transfer Agent
Merrill Lynch Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, Florida 32246-6484
(800) 637-3863
<PAGE>
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:
* Class A Shares incur a maximum initial sales charge (front-end
load) of 4% 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 0.50% and an account
maintenance fee of 0.25%. These shares automatically convert to
Class D Shares after approximately 10 years.
* Class C Shares are subject to a distribution fee of 0.55% 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 4% 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.
<PAGE>
<TABLE>
Performance
Summary--
Class A Shares***
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<S> <C> <C> <S> <C> <C>
10/21/94--12/31/94 $ 9.08 $ 8.51 -- $0.168 - 4.45%
1995 8.51 9.70 -- 0.944 +27.27
1/1/96--6/30/96 9.70 10.23 -- 0.453 +10.49
------
Total $1.565
Cumulative total return as of 6/30/96: +34.37%**
<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 payable date, and do not
include sales charges;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> <S> <C> <C>
8/27/93--12/31/93 $10.00 $10.84 -- $0.281 +11.30%
1994 10.84 8.48 -- 0.754 -15.08
1995 8.48 9.65 -- 0.875 +26.10
1/1/96--6/30/96 9.65 10.19 -- 0.414 +10.21
------
Total $2.324
Cumulative total return as of 6/30/96: +31.35%**
<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 payable date, and do not
reflect deduction of any sales charge; results would be lower if
sales charge was deducted.
</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> <S> <C> <C>
10/21/94--12/31/94 $ 9.08 $ 8.47 -- $0.152 - 5.06%
1995 8.47 9.65 -- 0.870 +26.18
1/1/96--6/30/96 9.65 10.18 -- 0.411 +10.07
------
Total $1.433
Cumulative total return as of 6/30/96: +31.86%**
<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 payable date, and do not
reflect deduction of any sales charge; results would be lower if
sales charge was deducted.
</TABLE>
<TABLE>
Performance
Summary--
Class D Shares***
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<S> <C> <C> <S> <C> <C>
8/27/93--12/31/93 $10.00 $10.84 -- $0.300 +11.49%
1994 10.84 8.48 -- 0.802 -14.65
1995 8.48 9.65 -- 0.919 +26.75
1/1/96--6/30/96 9.65 10.18 -- 0.439 +10.39
------
Total $2.460
Cumulative total return as of 6/30/96: +33.14%**
<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 payable date, and do not
include sales charges;results would be lower if sales charge was
included.
***As a result of the implementation of the Merrill Lynch Select
Pricingsm System, Class A Shares of the Fund outstanding prior to
October 21, 1994 were redesignated to Class D Shares.
</TABLE>
<PAGE>
Average Annual
Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 6/30/96 +31.58% +26.32%
Inception (10/21/94)
through 6/30/96 +19.06 +16.22
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 6/30/96 +30.67% +26.67%
Inception (8/27/93)
through 6/30/96 +10.06 + 9.47
[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 6/30/96 +30.77% +29.77%
Inception (10/21/94)
through 6/30/96 +17.75 +17.75
[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 6/30/96 +31.22% +25.98%
Inception (8/27/93)
through 6/30/96 +10.59 + 9.01
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
<PAGE>
PERFORMANCE DATA (concluded)
<TABLE>
Recent
Performance
Results
<CAPTION>
12 Month 3 Month
6/30/96 3/31/96 6/30/95 % Change % Change
<S> <C> <C> <C> <C> <C>
ML Americas Income Fund Class A Shares* $10.23 $9.82 $8.59 +19.09% +4.18%
ML Americas Income Fund Class B Shares* 10.19 9.78 8.55 +19.18 +4.19
ML Americas Income Fund Class C Shares* 10.18 9.78 8.55 +19.06 +4.09
ML Americas Income Fund Class D Shares* 10.18 9.78 8.55 +19.06 +4.09
ML Americas Income Fund Class A Shares--Total Return* +31.58(1) +6.54(2)
ML Americas Income Fund Class B Shares--Total Return* +30.67(3) +6.36(4)
ML Americas Income Fund Class C Shares--Total Return* +30.77(5) +6.23(6)
ML Americas Income Fund Class D Shares--Total Return* +31.22(7) +6.39(8)
ML Americas Income Fund Class A Shares--Standardized 30-day Yield 9.05%
ML Americas Income Fund Class B Shares--Standardized 30-day Yield 8.73%
ML Americas Income Fund Class C Shares--Standardized 30-day Yield 8.68%
ML Americas Income Fund Class D Shares--Standardized 30-day Yield 8.87%
<FN>
*Investment results shown do not reflect sales charges; results
shown would be lower if a sales charge was included.
(1)Percent change includes reinvestment of $0.969 per share ordinary
income dividends.
(2)Percent change includes reinvestment of $0.232 per share ordinary
income dividends.
(3)Percent change includes reinvestment of $0.892 per share ordinary
income dividends.
(4)Percent change includes reinvestment of $0.212 per share ordinary
income dividends.
(5)Percent change includes reinvestment of $0.887 per share ordinary
income dividends.
(6)Percent change includes reinvestment of $0.210 per share ordinary
income dividends.
(7)Percent change includes reinvestment of $0.941 per share ordinary
income dividends.
(8)Percent change includes reinvestment of $0.225 per share ordinary
income dividends.
<PAGE>
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (in US dollars)
<CAPTION>
Interest Maturity Value Percent of
COUNTRY Industry Face Amount Bonds Rate Date (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C> <C>
Argentina Banking US$ 6,000,000 Banco de Galicia y Buenos Aires
S.A.--Yankee 9.00 % 11/01/2003 $ 5,370,000 3.1%
7,000,000 Banco Rio de la Plata S.A.--Yankee 8.75 12/15/2003 6,265,000 3.6
----------- ------
11,635,000 6.7
Conglomerate 2,000,000 Sociedad Commercial del Plata 8.75 12/14/1998 1,945,000 1.1
Energy
Utilities 1,000,000 Telecom Argentina Stet--France
Telecom S.A. 12.00 11/15/2002 1,070,000 0.6
Total Bonds in Argentina
(Cost--$15,902,391) 14,650,000 8.4
Brazil Banking 1,000,000 ++Banco Bozano, Simonsen S.A. 10.375 5/23/2004 986,250 0.6
Energy 1,000,000 Celulose Nipo--Brasileira S.A.
(CENIBRA) 9.375 12/21/2003 972,500 0.5
Industrial 3,000,000 ++Metalurgica Gerdau S.A. 11.125 5/24/2004 2,985,000 1.7
Oil Service 1,000,000 ++Compania Brazileira de Petroleo
Ipiranga 8.625 2/25/2002 995,000 0.6
Paper 1,000,000 Klabine Fabricadora Papel 10.00 12/20/2001 987,500 0.6
Total Bonds in Brazil
(Cost--$6,996,927) 6,926,250 4.0
Colombia Banking 2,000,000 Banco de Colombia 7.50 10/21/1998 1,955,000 1.1
Total Bonds in Colombia
(Cost--$1,952,500) 1,955,000 1.1
Mexico Banking 1,500,000 Banamex Eurobond S.A. 9.125 4/06/2000 1,475,625 0.8
1,000,000 ++Banco de Atlantico S.A. 7.875 11/05/1998 932,500 0.5
5,450,000 Banco Nacional Comercio Exterior 7.25 2/02/2004 4,448,562 2.5
----------- ------
6,856,687 3.8
<PAGE>
Broadcasting 5,000,000 ++Grupo Televisa S.A. 11.375 5/15/2003 5,050,000 2.9
& Publishing
Chemicals 3,000,000 Grupo Desc--IRSA 8.375 7/15/1998 2,925,000 1.7
Total Bonds in Mexico
(Cost--$14,788,875) 14,831,687 8.4
Venezuela Oil 1,000,000 Bariven S.A. 10.625 3/17/2002 1,046,250 0.6
Total Bonds in Venezuela
(Cost--$1,075,000) 1,046,250 0.6
Total Investments in Bonds
(Cost--$40,715,693) 39,409,187 22.5
Brady Bonds*
Argentina Sovereign 37,620,000 Republic of Argentina, Floating Rate
Government Bond 6.812 3/31/2005 29,390,625 16.7
Obligations
Total Brady Bonds in Argentina
(Cost--$29,399,287) 29,390,625 16.7
Brazil Sovereign 3,000,000 Republic of Brazil, Exit Bonds 6.00 9/15/2013 1,860,000 1.0
Government 500,000 Republic of Brazil, Floating Rate
Obligations Bond, Debenture 6.875 4/15/2012 339,375 0.2
23,272,292 Republic of Brazil, Floating Rate
C Bonds 8.00 4/15/2014 14,312,460 8.2
Total Brady Bonds in Brazil
(Cost--$16,050,698) 16,511,835 9.4
Ecuador Sovereign 10,000,000 Republic of Ecuador--Discount 6.0625 2/28/2025 5,625,000 3.2
Government 18,534,606 Republic of Ecuador--PDI 6.062 2/27/2015 8,247,900 4.7
Obligations
Total Brady Bonds in Ecuador
(Cost--$13,825,340) 13,872,900 7.9
Mexico Sovereign 1,476,000 United Mexican States, Global Bond 11.50 5/15/2026 1,348,695 0.8
Government 1,000 United Mexican States, Value
Obligations Recovery Rights (a) 0.00 0 0.0
Total Brady Bonds in Mexico
(Cost--$1,371,647) 1,348,695 0.8
<PAGE>
Venezuela Sovereign 61,250,000 Republic of Venezuela, DCB 6.562 12/18/2007 43,104,687 24.6
Government 2,000,000 Republic of Venezuela, Floating
Obligations Rate Bond 6.812 3/31/2007 1,440,000 0.8
Total Brady Bonds in Venezuela
(Cost--$39,661,435) 44,544,687 25.4
Total Investments in Brady Bonds
(Cost--$100,308,407) 105,668,742 60.2
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<CAPTION>
Interest Maturity Value Percent of
Face Amount Short-Term Securities Rate Date (Note 1a) Net Assets
<S> <C> <S> <C> <C> <C> <C>
Commercial US$ 9,000,000 International Securitization
Paper** Corporation 5.42% 7/22/1996 $ 8,971,545 5.1%
Total Investments in Commercial
Paper (Cost--$8,971,545) 8,971,545 5.1
Foreign MXP 8,512,500 Mexican Cetes 36.20 9/05/1996 1,066,867 0.6
Government 32,074,480 Mexican Cetes 39.25 3/06/1997 3,455,435 2.0
Obligations**
Total Foreign Government Obligations
(Cost--$4,680,548) 4,522,302 2.6
US US$20,655,000 Federal Home Loan Mortgage Corp. 5.52 7/01/1996 20,655,000 11.8
Government
& Agency
Obligations**
Total US Government & Agency
Obligations (Cost--$20,655,000) 20,655,000 11.8
Total Short-Term Investments
(Cost--$34,307,093) 34,148,847 19.5
Total Investments (Cost--$175,331,193) 179,226,776 102.2
Liabilities in Excess of Other Assets (3,889,587) (2.2)
------------ ------
Net Assets $175,337,189 100.0%
============ ======
<FN>
(a)The rights may be exercised until 2/31/2019.
*Brady Bonds are securities which have been issued to refinance
commercial bank loans and other debt. They are created when
creditors tender eligible debt in exchange for new bonds.
**Commercial Paper and certain US Government & Agency Obligations
and Foreign Government Obligations are traded on a discount basis;
the interest rates shown are the discount rates paid at the time of
purchase by the Fund.
++Restricted security as to resale. The value of the Fund's
investment in restricted securities was approximately $10,949,000,
representing 6.2% of net assets.
<PAGE>
<CAPTION>
Acquisition Value
Issue Date Cost (Note 1a)
<S> <C> <C> <C>
Banco Bozano, Simonsen S.A.,
10.375% due 5/23/2004 5/23/1996 $ 998,200 $ 986,250
Banco de Atlantico S.A., 7.875%
due 11/05/1998 11/23/1993 980,000 932,500
Compania Brazileira de Petroleo
Ipiranga, 8.625% due 2/25/2002 2/15/1994 999,227 995,000
Grupo Televisa S.A., 11.375%
due 5/15/2003 5/13/1996 5,000,000 5,050,000
Metalurgica Gerdau S.A., 11.125%
due 5/24/2004 5/24/1996 2,997,000 2,985,000
Total $10,974,427 $10,948,750
=========== ===========
See notes to Financial Statements
</TABLE>
<TABLE>
STATEMENT OF ASSETS AND LIABILITIES
As of June 30, 1996
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$175,331,193) (Note 1a) $179,226,776
Cash 368
Receivables:
Securities sold $ 31,769,038
Interest 2,711,451
Capital shares sold 353,457
Principal paydowns 200,000 35,033,946
------------
Deferred organization expenses (Note 1f) 55,277
Prepaid registration fees and other assets (Note 1f) 65,018
------------
Total assets 214,381,385
------------
<PAGE>
Liabilities: Payables:
Securities purchased 35,454,388
Capital shares redeemed 2,893,556
Dividends to shareholders (Note 1g) 366,439
Distributor (Note 2) 85,760
Investment adviser (Note 2) 80,325 38,880,468
------------
Accrued expenses and other liabilities 163,728
------------
Total liabilities 39,044,196
------------
Net Assets: Net assets $175,337,189
============
Net Assets Class A Common Stock, $0.10 par value, 100,000,000 shares authorized $ 145,057
Consist of: Class B Common Stock, $0.10 par value, 100,000,000 shares authorized 1,357,780
Class C Common Stock, $0.10 par value, 100,000,000 shares authorized 67,084
Class D Common Stock, $0.10 par value, 100,000,000 shares authorized 150,978
Paid-in capital in excess of par 176,743,841
Undistributed investment income--net 950,271
Accumulated realized capital losses on investments and foreign
currency transactions--net (Note 6) (7,973,405)
Unrealized appreciation on investments and foreign currency
transactions--net 3,895,583
------------
Net assets $175,337,189
============
Net Asset Class A--Based on net assets of $14,837,164 and 1,450,569 shares outstanding $ 10.23
Value: ============
Class B--Based on net assets of $138,296,988 and 13,577,800 shares outstanding $ 10.19
============
Class C--Based on net assets of $6,831,988 and 670,845 shares outstanding $ 10.18
============
Class D--Based on net assets of $15,371,049 and 1,509,782 shares outstanding $ 10.18
============
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENTS OF OPERATIONS
<PAGE>
For the Six Months Ended June 30, 1996
<S> <S> <C> <C>
Investment Income Interest and amortization of premium and discount earned $ 8,331,750
(Note 1e):
Expenses: Distribution fees--Class B (Note 2) $ 469,445
Investment advisory fees (Note 2) 481,757
Interest expense (Note 5) 130,270
Transfer agent fees--Class B (Note 2) 79,958
Printing and shareholder reports 61,657
Registration fees (Note 1f) 44,110
Accounting services (Note 2) 40,987
Custodian fees 33,227
Professional fees 30,043
Account maintenance fees--Class D (Note 2) 19,800
Account maintenance and distribution fees--Class C (Note 2) 19,472
Trustees' fees and expenses 17,596
Amortization of organization expenses (Note 1f) 9,532
Transfer agent fees--Class D (Note 2) 8,281
Transfer agent fees--Class A (Note 2) 4,004
Transfer agent fees--Class C (Note 2) 3,313
Pricing fees 357
Other 3,172
------------
Total expenses 1,456,981
------------
Investment income--net 6,874,769
------------
Realized & Realized gain (loss) from:
Unrealized Gain Investments--net $ 5,052,866
(Loss) on Foreign currency transactions--net (316,845) 4,736,021
Investments & ------------
Foreign Currency Change in unrealized appreciation/depreciation on:
Transactions--Net Investments--net 2,274,410
(Notes 1b, Foreign currency transactions--net 9,630 2,284,040
1c, 1e & 3): ------------ ------------
Net realized and unrealized gain on investments
and foreign currency transactions 7,020,061
------------
Net Increase in Net Assets Resulting from Operations $ 13,894,830
============
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
For the Six For the
Months Ended Year Ended
Increase (Decrease) in Net Assets: June 30, 1996 Dec. 31, 1995
<S> <S> <C> <C>
Operations: Investment income--net $ 6,874,769 $ 11,613,604
Realized gain (loss) on investments and foreign
currency transactions--net 4,736,021 (4,707,448)
Change in unrealized appreciation on investments and
foreign currency transactions--net 2,284,040 18,061,845
------------ ------------
Net increase in net assets resulting from operations 13,894,830 24,968,001
------------ ------------
Dividends to Investment income--net:
Shareholders Class A (479,266) (119,581)
(Note 1g): Class B (5,455,997) (9,482,996)
Class C (206,575) (58,666)
Class D (733,593) (1,952,361)
------------ ------------
Net decrease in net assets resulting from dividends
to shareholders (6,875,431) (11,613,604)
------------ ------------
Capital Share Net increase (decrease) in net assets derived from capital
Transactions share transactions 48,122,896 (10,358,969)
(Note 4): ------------ ------------
Net Assets: Total increase in net assets 55,142,295 2,995,428
Beginning of period 120,194,894 117,199,466
------------ ------------
End of period* $175,337,189 $120,194,894
============ ============
<FN>
*Undistributed net investment income--net $ 950,271 $ 950,933
============ ============
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENTS OF CASH FLOWS
<CAPTION>
For the Six Months Ended June 30, 1996
<S> <S> <C>
Cash Provided by Net increase in net assets resulting from operations $ 13,894,830
Operating Adjustments to reconcile net increase in net assets resulting
Activities: from operations to net cash provided by operating activities:
Increase in receivables (8,507)
Decrease in other assets 1,535,409
Increase in other liabilities 69,780
Realized and unrealized gain on investments and foreign
currency transactions--net (7,020,061)
Amortization of discount (1,091,727)
--------------
Net cash provided by operating activities 7,379,724
--------------
<PAGE>
Cash Used for Proceeds from sales of long-term securities 284,191,456
Investing Purchases of long-term securities (295,303,620)
Activities: Purchases of short-term investments (1,441,196,628)
Proceeds from sales and maturities of short-term investments 1,411,990,433
--------------
Net cash used for investing activities (40,318,359)
--------------
Cash Provided by Cash receipts from issuance of common stock 89,512,089
Financing Cash receipts from borrowings 43,140,788
Activities: Cash payments on borrowings (53,406,264)
Cash payments on shares of beneficial interest redeemed (41,934,724)
Dividends paid to shareholders (4,372,886)
--------------
Net cash provided by financing activities 32,939,003
--------------
Cash: Net increase in cash 368
Cash at beginning of period 0
--------------
Cash at end of period $ 368
==============
Cash Flow Cash paid for interest $ 137,898
Information: ==============
Non-Cash Capital shares issued on reinvestment of dividends paid to shareholders $ 3,074,346
Financing ==============
Activities:
See Notes to Financial Statements.
</TABLE>
<TABLE>
FINANCIAL HIGHLIGHTS
<CAPTION>
<PAGE>
Class A Class B
----------------------------- --------------------------------------------
The following per share data For the For the For the For the
and ratios have been derived Six For the Period Six Period
from information provided in Months Year Oct. 21, Months For the Aug. 27,
the financial statements. Ended Ended 1994++ to Ended Year Ended 1993++ to
June 30, Dec. 31, Dec. 31, June 30, December 31, Dec. 31,
Increase (Decrease) in Net Asset Value: 1996+++++ 1995 1994 1996+++++ 1995 1994 1993
<S> <S> <C> <C> <C> <C> <C> <C> <C>
Per Share Net asset value,
Operating beginning of
Performance: period $ 9.70 $ 8.51 $ 9.08 $ 9.65 $ 8.48 $ 10.84 $ 10.00
-------- -------- -------- -------- -------- -------- --------
Investment income
--net .46 .94 .17 .43 .88 .75 .24
Realized and
unrealized gain
(loss) on invest-
ments and foreign
currency transac-
tions --net .55 1.19 (.57) .55 1.17 (2.36) .88
-------- -------- -------- -------- -------- -------- --------
Total from invest-
ment operations 1.01 2.13 (.40) .98 2.05 (1.61) 1.12
-------- -------- -------- -------- -------- -------- --------
Less dividends and
distributions:
Investment income
--net (.48) (.94) (.14) (.44) (.88) (.64) (.24)
Realized gain on
investments--net -- -- (.03) -- -- (.11) (.04)
-------- -------- -------- -------- -------- -------- --------
Total dividends
and distributions (.48) (.94) (.17) (.44) (.88) (.75) (.28)
-------- -------- -------- -------- -------- -------- --------
Net asset value,
end of period $ 10.23 $ 9.70 $ 8.51 $ 10.19 $ 9.65 $ 8.48 $ 10.84
======== ======== ======== ======== ======== ======== ========
Total Investment Based on net asset
Return:** value per share 10.49%+++ 27.27% (4.45%)+++ 10.21%+++ 26.10% (15.08%) 11.30%+++
======== ======== ======== ======== ======== ======== ========
Ratios to Average Expenses, excluding
Net Assets: interest expense and
net of reimbursement .92%* 1.20% 1.22%* 1.80%* 1.97% 1.79% 1.03%*
======== ======== ======== ======== ======== ======== ========
Expenses, excluding
interest expense .92%* 1.20% 1.22%* 1.80%* 1.97% 2.00% 2.45%*
======== ======== ======== ======== ======== ======== ========
Expenses 1.05%* 1.36% 1.91%* 1.97%* 2.13% 2.70% 2.53%*
======== ======== ======== ======== ======== ======== ========
Investment income
--net 9.25%* 11.25% 8.63%* 8.69%* 10.40% 8.14% 6.76%*
======== ======== ======== ======== ======== ======== ========
<PAGE>
Supplemental Net assets,
Data: end of period
(in thousands) $ 14,837 $ 1,165 $ 253 $138,297 $103,465 $101,933 $ 98,848
======== ======== ======== ======== ======== ======== ========
Portfolio turnover 218.48% 127.17% 353.33% 218.48% 127.17% 353.33% 75.18%
======== ======== ======== ======== ======== ======== ========
Leverage: Amount of reverse
repurchase agree-
ments outstanding,
end of period
(in thousands) -- $ 10,265 $ 17,058 -- $ 10,265 $ 7,058 $ 21,546
======== ======== ======== ======== ======== ======== ========
Average amount of
reverse repurchase
agreements outstand-
ing during
the period
(in thousands) $ 4,378 $ 2,640 $ 17,315 $ 4,378 $ 2,640 $ 17,315 $ 18,977
======== ======== ======== ======== ======== ======== ========
Average amount of
reverse repurchase
agreements per share
during the period $ .28 $ .20 $ 1.19 $ .28 $ .20 $ 1.19 $ 1.81
======== ======== ======== ======== ======== ======== ========
<FN>
*Annualized.
**Total investment returns exclude the effect of sales loads.
++Commencement of Operations.
+++Aggregate total investment return.
+++++Based on average shares outstanding during the period.
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS (concluded)
Class C Class D
----------------------------- --------------------------------------------
The following per share data For the For the For the For the
and ratios have been derived Six For the Period Six Period
from information provided in Months Year Oct. 21, Months For the Aug. 27,
the financial statements. Ended Ended 1994++ to Ended Year Ended 1993++ to
June 30, Dec. 31, Dec. 31, June 30, December 31, Dec. 31,
Increase (Decrease) in Net Asset Value: 1996+++++ 1995 1994 1996+++++ 1995 1994 1993
<S> <S> <C> <C> <C> <C> <C> <C> <C>
Per Share Net asset value,
Operating beginning of
Performance: period $ 9.65 $ 8.47 $ 9.08 $ 9.65 $ 8.48 $ 10.84 $ 10.00
-------- -------- -------- -------- -------- -------- --------
Investment income
--net .42 .87 .15 .47 .92 .80 .26
Realized and
unrealized gain
(loss) on
investments and
foreign currency
transactions--net .54 1.18 (.61) .52 1.17 (2.36) .88
-------- -------- -------- -------- -------- -------- --------
Total from invest-
ment operations .96 2.05 (.46) .99 2.09 (1.56) 1.14
-------- -------- -------- -------- -------- -------- --------
Less dividends
and distributions:
Investment income
--net (.43) (.87) (.13) (.46) (.92) (.68) (.26)
Realized gain on
investments--net -- -- (.02) -- -- (.12) (.04)
-------- -------- -------- -------- -------- -------- --------
Total dividends and
distributions (.43) (.87) (.15) (.46) (.92) (.80) (.30)
-------- -------- -------- -------- -------- -------- --------
Net asset value,
end of period $ 10.18 $ 9.65 $ 8.47 $ 10.18 $ 9.65 $ 8.48 $ 10.84
======== ======== ======== ======== ======== ======== ========
Total Investment Based on net asset
Return:** value per share 10.07%+++ 26.18% (5.06%)+++ 10.39%+++ 26.75% (14.65%) 11.49%+++
======== ======== ======== ======== ======== ======== ========
Ratios to Average Expenses, excluding
Net Assets: interest expense and
net of reimbursement 1.81%* 2.05% 2.24%* 1.29%* 1.44% 1.28% .50%*
======== ======== ======== ======== ======== ======== ========
Expenses, excluding
interest expense 1.81%* 2.05% 2.24%* 1.29%* 1.44% 1.48% 1.93%*
======== ======== ======== ======== ======== ======== ========
Expenses 1.95%* 2.19% 3.05%* 1.47%* 1.60% 2.17% 2.03%*
======== ======== ======== ======== ======== ======== ========
Investment income
--net 8.46%* 10.23% 8.87%* 9.24%* 10.85% 8.65% 7.14%*
======== ======== ======== ======== ======== ======== ========
<PAGE>
Supplemental Net assets,
Data: end of period
(in thousands) $ 6,832 $ 1,396 $ 75 $ 15,371 $ 14,169 $ 14,938 $ 15,076
======== ======== ======== ======== ======== ======== ========
Portfolio turnover 218.48% 127.17% 353.33% 218.48% 127.17% 353.33% 75.18%
======== ======== ======== ======== ======== ======== ========
<PAGE>
Leverage: Amount of reverse
repurchase agree-
ments outstanding,
end of period
(in thousands) -- $ 10,265 $ 17,058 -- $ 10,265 $ 17,058 $ 21,546
======== ======== ======== ======== ======== ======== ========
Average amount of
reverse repurchase
agreements out-
standing during
the period
(in thousands) $ 4,378 $ 2,640 $ 17,315 $ 4,378 $ 2,640 $ 17,315 $ 18,977
======== ======== ======== ======== ======== ======== ========
Average amount of
reverse repurchase
agreements per share
during the period $ .28 $ .20 $ 1.19 $ .28 $ .20 $ 1.19 $ 1.81
======== ======== ======== ======== ======== ======== ========
<FN>
*Annualized.
**Total investment returns exclude the effect of sales loads.
++Commencement of Operations.
+++Aggregate total investment return.
+++++Based on average shares outstanding during the period.
See Notes to Financial Statements.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
Merrill Lynch Americas Income Fund, Inc. (the "Fund") is registered
under the Investment Company Act of 1940 as a non-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.
<PAGE>
(a) Valuation of securities--Portfolio securities which are traded
on stock exchanges are valued at the last sale price on the exchange
on which such securities are traded, as of the close of business on
the day the securities are being valued or, lacking any sales, at
the last available bid price. Securities traded in the over-the-
counter market are valued at the last available bid price prior to
the time of valuation. In cases where securities are traded on more
than one exchange, the securities are valued on the exchange
designated by or under the authority of the Board of Directors as
the primary market. Securities which are traded both in the over-the-
counter market and on a stock exchange are valued according to the
broadest and most representative market. Options written are valued
at the last sale price in the case of exchange-traded options or, in
the case of options traded in the over-the-counter market, the last
asked price. Options purchased are valued at the last sale price in
the case of exchange-traded options or, in the case of options
traded in the over-the-counter market, the last bid price. Short-
term securities are valued at amortized cost, which approximates
market value. Other investments, including futures contracts and
related options, are stated at market value. Securities and assets
for which market 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 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.
* Forward foreign exchange contracts--The Fund is authorized to
enter into forward foreign exchange contracts as a hedge against
either specific transactions or portfolio positions. Such contracts
are not entered on the 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
contracts.
* 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 market value of the option
written.
When a security is purchased or sold through an exercise of an
option, the related premium paid (or received) is added to (or
deducted from) the basis of the security acquired or deducted from
(or added to) the proceeds of the security sold. When an option
expires (or the 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).
<PAGE>
Written and purchased options are non-income producing investments.
* Financial futures contracts--The Fund may purchase or sell
financial futures contracts and options on such futures contracts as
a hedge against adverse changes in interest rates. A futures
contract is an agreement between two parties to buy and sell a
security, respectively, for a set price on a future date. 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.
NOTES TO FINANCIAL STATEMENTS (continued)
(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 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 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). 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>
(f) Deferred organization expenses and prepaid registration fees--
Deferred organization expenses are charged to expense over a five-
year period. Prepaid registration fees are charged to expense as the
related shares are issued.
(g) Dividends and distributions--Dividends from net investment
income are declared daily and paid monthly. Distribution of capital
gains are recorded on the ex-dividend date.
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 operation of the Fund. For such
services, the Fund pays a monthly fee of 0.60%, on an annual basis,
of the average daily value of the Fund's net assets plus the
principal amount of borrowings incurred by the Fund for leverage
purposes. The most restrictive annual expense limitation requires
that MLAM reimburse the Fund to the extent the Fund's expenses
(excluding interest, taxes, distribution fees, brokerage fees and
commissions, and extraordinary items) exceed 2.5% of the Fund's
first $30 million of average daily net assets, 2.0% of the next $70
million of average daily net assets, and 1.5% of the average daily
net assets in excess thereof. MLAM's obligation to reimburse the
Fund is limited to the amount of the investment advisory fee. No fee
payment will be made to MLAM during any fiscal year which will cause
such expenses to exceed the most restrictive expense limitation at
the time of such payment.
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% 0.50%
Class C 0.25% 0.55%
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 June 30, 1996, 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 $ 75 $ 688
Class D $2,413 $24,668
For the six months ended June 30, 1996, MLPF&S received contingent
deferred sales charges of $181,149 and $1,887 relating to
transactions in Class B and Class C Shares, respectively.
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, PSI, MLPF&S, MLFD, MLFDS, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the six months ended June 30, 1996 were $330,758,008 and
$302,561,538, respectively.
Realized and unrealized gains (losses) as of June 30, 1996 were as
follows:
<PAGE>
Realized Unrealized
Gains Gains
(Losses) (Losses)
Long-term investments $ 4,874,191 $ 4,053,829
Short-term investments -- (158,246)
Options written 85,000 --
Financial futures contracts 93,675 --
Foreign currency transactions (316,845) --
------------ ------------
Total $ 4,736,021 $ 3,895,583
============ ============
Transactions in call options written for the six months ended June
30, 1996 were as follows:
Premiums
Call Options Written Par Value Received
Outstanding call options written,
beginning of period -- --
Options written 14,000,000 $ 205,000
Options exercised (10,000,000) (120,000)
Options expired (4,000,000) (85,000)
------------ ------------
Outstanding put options written,
end of period -- $ --
============ ============
As of June 30, 1996, net unrealized appreciation for Federal income
tax purposes aggregated $3,895,583, of which $5,750,390 related to
appreciated securities and $1,854,807 related to depreciated
securities. At June 30, 1996, the aggregate cost of investments for
Federal income tax purposes was $175,331,193.
4. Beneficial Interest Transactions:
Net increase (decrease) in net assets derived from capital share
transactions was $48,122,896 and $(10,358,969) for the six months
ended June 30, 1996 and for the year ended December 31, 1995,
respectively.
Transactions in shares of capital were as follows:
<PAGE>
Class A Shares for the
Six Months Ended Dollar
June 30, 1996 Shares Amount
Shares sold 1,551,454 $ 15,779,006
Shares issued to shareholders
in reinvestment of dividends 40,029 404,424
------------ ------------
Total issued 1,591,483 16,183,430
Shares redeemed (261,038) (2,618,826)
------------ ------------
Net increase 1,330,445 $ 13,564,604
============ ============
Class A Shares for the
Year Ended Dollar
December 31, 1995 Shares Amount
Shares sold 424,389 $ 3,709,129
Shares issued to shareholders
in reinvestment of dividends 31,496 58,341
------------ ------------
Total issued 455,885 3,767,470
Shares redeemed (365,478) (3,126,616)
------------ ------------
Net increase 90,407 $ 640,854
============ ============
Class B Shares for the
Six Months Ended Dollar
June 30, 1996 Shares Amount
Shares sold 5,707,320 $ 57,535,850
Shares issued to shareholders
in reinvestment of dividends 227,502 2,300,269
------------ ------------
Total issued 5,934,822 59,836,119
Automatic conversion of shares (26,072) (261,407)
Shares redeemed (3,052,090) (30,694,253)
------------ ------------
Net increase 2,856,660 $ 28,880,459
============ ============
<PAGE>
NOTES TO FINANCIAL STATEMENTS (concluded)
Class B Shares for the Year Dollar
Ended December 31, 1995 Shares Amount
Shares sold 2,917,112 $ 25,020,930
Shares issued to shareholders
in reinvestment of dividends 466,431 3,936,697
------------ ------------
Total issued 3,383,543 28,957,627
Shares redeemed (4,688,387) (38,740,392)
------------ ------------
Net decrease (1,304,844) $ (9,782,765)
============ ============
Class C Shares for the Six Months Dollar
Ended June 30, 1996 Shares Amount
Shares sold 618,809 $ 6,257,784
Shares issued to shareholders
in reinvestment of dividends 12,763 128,643
------------ ------------
Total issued 631,572 6,386,427
Shares redeemed (105,431) (1,056,884)
------------ ------------
Net increase 526,141 $ 5,329,543
============ ============
Class C Shares for the Year Dollar
Ended December 31, 1995 Shares Amount
Shares sold 201,258 $ 1,740,118
Shares issued to shareholders
in reinvestment of dividends 3,112 27,775
------------ ------------
Total issued 204,370 1,767,893
Shares redeemed (68,570) (583,898)
------------ ------------
Net increase 135,800 $ 1,183,995
============ ============
<PAGE>
Class D Shares for the Six Months Dollar
Ended June 30, 1996 Shares Amount
Shares sold 980,366 $ 9,967,194
Automatic conversion of shares 26,072 261,407
Shares issued to shareholders
in reinvestment of dividends 23,828 241,010
------------ ------------
Total issued 1,030,266 10,469,611
Shares redeemed (989,375) (10,121,321)
------------ ------------
Net increase 40,891 $ 348,290
============ ============
Class D Shares for the Year Dollar
Ended December 31, 1995 Shares Amount
Shares sold 2,439,964 $ 21,030,210
Shares issued to shareholders
in reinvestment of dividends 108,946 935,152
------------ ------------
Total issued 2,548,910 21,965,362
Shares redeemed (2,842,527) (24,366,415)
------------ ------------
Net decrease (293,617) $ (2,401,053)
============ ============
5. Reverse Repurchase Agreements:
Under a reverse repurchase agreement, the Fund sells securities and
agrees to repurchase them at a mutually agreed upon date and price.
At the time the Fund enters into a reverse repurchase agreement, it
may establish a segregated account with the custodian containing
cash, cash equivalents or liquid high grade debt securities having a
value at least equal to the repurchase price.
As of June 30, 1996, the Fund had no outstanding reverse repurchase
agreements. For the six months ended June 30, 1996, the maximum
amount entered into was $19,875,666, the average amount outstanding
was approximately $4,402,000 and the daily weighted average interest
rate was 5.97%.
6. Capital Loss Carryforward:
At December 31, 1995, the Fund had a net capital loss carryforward
of approximately $9,400,000, of which $3,796,000 expires in 2002 and
$5,604,000 expires in 2003. This amount is available to offset like
amounts of any future taxable gains.
