MERRILL LYNCH
AMERICAS INCOME
FUND, INC.
FUND LOGO
Semi-Annual Report
June 30, 1997
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.
<PAGE>
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
Americas Income Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
Printed on post-consumer recycled paper
MERRILL LYNCH AMERICAS INCOME FUND, INC.
The Benefits and
Risks of
Leveraging
<PAGE>
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.
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
Barbara G. Fraser, Secretary
Custodian
Brown Brothers Harriman & Co.
40 Water Street
Boston, MA 02109
Transfer Agent
Merrill Lynch Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 637-3863
<PAGE>
DEAR SHAREHOLDER
With the unmanaged J.P. Morgan Emerging Markets Sovereign Index at
an all-time high, we believe that the emerging bond markets are
fully valued. While there was substantial progress on the reform
front, the major Latin American countries had to increase their
borrowings during the past two years to help them deal with the
economic slowdown which resulted from the Mexican peso crisis. While
economic growth was re-established in the region, debt service and
other credit ratios are less favorable today than during the
previous Index high established in January 1994. While we believe
that continued economic growth coupled with reforms may improve debt
service and other credit ratios in the medium term, current price
levels more than adequately reflect our optimism. Emerging market
assets of similar duration are trading at spread parity with the US
high-yield market. We believe that this is an indication of a bull
market excess and as such we do not find value in these assets at
this time.
Our concern in the near term is the liquidity-driven exuberance of
global markets and the complacency of investors toward a US economy
which is growing above historical trends in a tight labor market. We
are also in the midst of a currency crisis which resulted in
devaluations in Thailand, the Philippines and the Czech Republic. We
believe that these external risks will dominate investor sentiment
in the emerging markets.
Very low interest rates in Japan led to a liquidity boom as money
flowed from Japan to global markets and resulted in the inflation of
financial assets. This inflation is evidenced by record highs in
most global equity markets and historically tight spreads in credit
markets. This scenario prompted Federal Reserve Board (FRB) Chairman
Alan Greenspan to make his "irrational exuberance" speech in
December 1996. Investors reacted negatively to his speech initially
but soon shrugged off his warning and markets proceeded to rally.
This complacency has been a characteristic of our markets for the
past six months.
The euphoria and complacency of 1997 is very similar to our
experience in 1994, when there was abundant liquidity financed by
very low interest rates in the United States. At that time,
investors were sanguine about the US interest rate outlook until
after a second FRB tightening. The major sell off took place when it
became evident that the economy was not responding to the higher
interest rates and that the FRB would have to continue in a
tightening mode. In our view, this scenario could repeat itself in
1997.
<PAGE>
Portfolio Matters
Based on our defensive view on the US bond market and the lack of
value in emerging market securities, we raised cash levels
substantially during the six months ended June 30, 1997, with a view
to shift out of long-term exposure into a mixture of short-term
exposure in emerging markets where we see relative value and short-
term US Treasury issues for safety. Our effort in adding short-term
emerging market exposure was slow and deliberate for two reasons.
First, short-term credit product is in short supply as is usually
the case at the top of bull markets. Second, we redoubled our credit
effort to ensure the credit quality of these short-term assets.
Despite our near-term concerns, our longer-term view on emerging
markets remains very constructive. Fundamentals will continue to
improve as fiscal and structural reforms continue to be implemented.
Although periods of volatility are inevitable in emerging markets,
over the long term we believe they will provide attractive return
potential relative to more established markets. Therefore, we will
wait for the appropriate time to extend the portfolio's duration.
While our cautious approach during the June period had a negative
impact on the performance of the Fund for the quarter, we believe
that our investment strategy should enhance performance over the
long term.
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.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
<PAGE>
(Paolo Valle)
Paolo Valle
Vice President and
Senior Portfolio Manager
August 6, 1997
PERFORMANCE DATA
About Fund
Performance
Investors are able to purchase shares of the Fund through the
Merrill Lynch Select Pricing SM System, which offers four pricing
alternatives:
* 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. However, in the case of certain
eligible investors, the shares 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. (There is no initial
sales charge for automatic share conversions.)
* 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. Figures shown in the "Average Annual Total
Return" tables as well as the total returns and cumulative total
returns in the "Performance Summary" tables assume reinvestment of
all dividends and capital gains distributions at net asset value on
the payable 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.
<PAGE>
<TABLE>
Performance
Summary--
Class A Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<S> <C> <C> <C> <C> <C>
10/21/94--12/31/94 $ 9.08 $ 8.51 -- $0.168 - 4.45%
1995 8.51 9.70 -- 0.944 +27.27
1996 9.70 11.36 -- 1.450 +33.64
1/1/97--6/30/97 11.36 10.90 -- 0.326 - 1.00
------
Total $2.888
Cumulative total return as of 6/30/97: +60.89%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures do not reflect deduction of any sales charges; results
would be lower if sales charge was included.
</TABLE>
PERFORMANCE DATA (concluded)
<TABLE>
Performance
Summary--
Class B Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<S> <C> <C> <C> <C> <C>
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
1996 9.65 11.31 -- 1.365 +32.75
1/1/97--6/30/97 11.31 10.85 -- 0.285 - 1.39
------
Total $3.560
<PAGE>
Cumulative total return as of 6/30/97: +56.00%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures do not reflect deduction of any sales charge; results
would be lower if sales charge was deducted.
</TABLE>
<TABLE>
Performance
Summary--
Class C Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<S> <C> <C> <C> <C> <C>
10/21/94--12/31/94 $9.08 $ 8.47 -- $0.152 - 5.06%
1995 8.47 9.65 -- 0.870 +26.18
1996 9.65 11.31 -- 1.358 +32.66
1/1/97--6/30/97 11.31 10.85 -- 0.282 - 1.43
------
Total $2.662
Cumulative total return as of 6/30/97: +56.66%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures 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> <C> <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
1996 9.65 11.31 -- 1.420 +33.44
1/1/97--6/30/97 11.31 10.84 -- 0.312 - 1.23
------
Total $3.753
<PAGE>
Cumulative total return as of 6/30/97: +58.96%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures do not include sales charges; results would be lower if
sales charge was included.
</TABLE>
Average Annual
Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 6/30/97 +19.74% +14.95%
Inception (10/21/94) through 6/30/97 +19.33 +17.54
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 6/30/97 +18.77% +14.77%
Inception (8/27/93) through 6/30/97 +12.27 +12.09
[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 6/30/97 +18.81% +17.81%
Inception (10/21/94) through 6/30/97 +18.16 +18.16
<PAGE>
[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 6/30/97 +19.39% +14.62%
Inception (8/27/93) through 6/30/97 +12.83 +11.63
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
<TABLE>
Recent
Performance
Results
<CAPTION>
12 Month 3 Month
6/30/97 3/31/97 6/30/96 % Change % Change
<S> <C> <C> <C> <C> <C>
ML Americas Income Fund Class A Shares* $10.90 $10.66 $10.23 + 6.55% +2.25%
ML Americas Income Fund Class B Shares* 10.85 10.62 10.19 + 6.48 +2.17
ML Americas Income Fund Class C Shares* 10.85 10.62 10.18 + 6.58 +2.17
ML Americas Income Fund Class D Shares* 10.84 10.61 10.18 + 6.48 +2.17
ML Americas Income Fund Class A Shares--Total Return* +19.74(1) +3.66(2)
ML Americas Income Fund Class B Shares--Total Return* +18.77(3) +3.38(4)
ML Americas Income Fund Class C Shares--Total Return* +18.81(5) +3.36(6)
ML Americas Income Fund Class D Shares--Total Return* +19.39(7) +3.51(8)
ML Americas Income Fund Class A Shares--Standardized 30-day Yield 6.22%
ML Americas Income Fund Class B Shares--Standardized 30-day Yield 5.75%
ML Americas Income Fund Class C Shares--Standardized 30-day Yield 5.69%
ML Americas Income Fund Class D Shares--Standardized 30-day Yield 6.01%
<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 $1.324 per share ordinary
income dividends.
(2)Percent change includes reinvestment of $0.155 per share ordinary
income dividends.
(3)Percent change includes reinvestment of $1.236 per share ordinary
income dividends.
(4)Percent change includes reinvestment of $0.134 per share ordinary
income dividends.
(5)Percent change includes reinvestment of $1.228 per share ordinary
income dividends.
(6)Percent change includes reinvestment of $0.132 per share ordinary
income dividends.
(7)Percent change includes reinvestment of $1.293 per share ordinary
income dividends.
(8)Percent change includes reinvestment of $0.148 per share ordinary
income dividends.
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (in US dollars)
<CAPTION>
Interest Maturity Value Percent of
COUNTRY Industry Face Amount Bonds Rate Date (Note 1a) Net Assets
<S> <S> <C> <S> <C> <S> <C> <C>
Argentina Banking US$ 5,000,000 Banco de Credito Argentina 8.50 % 12/18/1998 $ 5,056,250 2.6%
Industrials 3,000,000 Banco Hipotecario Nacional 8.00 6/04/1999 3,003,750 1.5
2,250,000 Transport de Gas del Sur S.A. 7.75 12/23/1998 2,264,062 1.2
------------ ------
5,267,812 2.7
Total Bonds in Argentina
(Cost--$10,277,750) 10,324,062 5.3
Mexico Banking 1,000,000 Grupo Financiero Bancomer S.A. 8.00 7/07/1998 1,006,250 0.5
Oil 2,500,000 Petroleos Mexicanos S.A. 8.00 7/01/1998 2,525,000 1.3
Paper 3,000,000 Grupo Industrial Durango,
S.A. de C.V. (b) 12.625 8/01/2003 3,378,750 1.7
Total Bonds in Mexico
(Cost--$6,910,250) 6,910,000 3.5
Total Investments in Bonds
(Cost--$17,188,000) 17,234,062 8.8
Brady Bonds*
Argentina Sovereign 2,500,000 Republic of Argentina,
Government Global Bonds 11.00 10/09/2006 2,784,375 1.4
Obligations
Total Brady Bonds in
Argentina (Cost--$2,540,625) 2,784,375 1.4
<PAGE>
Brazil Sovereign 18,000,000 Republic of Brazil, DCB,
Government Floating Rate Bond 6.937 4/15/2012 14,850,000 7.6
Obligations 560,325 Republic of Brazil, Floating
Rate 'C' Bond 8.00 4/15/2014 450,014 0.2
Total Brady Bonds in Brazil
(Cost--$15,383,648) 15,300,014 7.8
Mexico Sovereign 1,000 United Mexican States, Value
Government Recovery Rights (a) 0.00 0 0.0
Obligations
Total Brady Bonds in Mexico
(Cost--$0) 0 0.0
Philippines Sovereign 3,000,000 Republic of the Philippines
Government (Registered) (b) 8.75 10/07/2016 3,022,500 1.6
Obligations
Total Brady Bonds in the
Philippines (Cost--$3,036,750) 3,022,500 1.6
Venezuela Sovereign 51,250,000 Republic of Venezuela, DCB,
Government Floating Rate Bond 6.75 12/18/2007 47,502,600 24.4
Obligations
Total Brady Bonds in
Venezuela (Cost--$46,543,750) 47,502,600 24.4
Total Investments in Brady
Bonds (Cost--$67,504,773) 68,609,489 35.2
Short-Term Securities
Argentina Commercial 3,900,000 Banco de Credito Argentina 8.00 4/22/1998 3,670,618 1.9
Paper**
Total Short-Term Investments
in Argentina (Cost--$3,662,834) 3,670,618 1.9
Brazil Commercial 4,490,000 Globo Communicacoes
Paper** Participitos 7.50 2/09/1998 4,292,368 2.2
Total Short-Term Investments
in Brazil (Cost--$4,290,981) 4,292,368 2.2
Russia Foreign 10,000,000 Russian Treasury Bill 14.50 7/16/1997 10,000,000 5.1
Government 10,000,000 Russian Treasury Bill 12.00 11/17/1997 9,568,751 4.9
Obligations**
Total Short-Term Investments
in Russia (Cost--$19,567,741) 19,568,751 10.0
<PAGE>
United States Commercial 9,614,000 Associates First Capital Corp. 6.30 7/01/1997 9,614,000 4.9
Paper**
US Government 9,600,000 Federal Home Loan Banks 6.00 7/01/1997 9,600,000 4.9
Agency 50,000,000 Federal Home Loan Banks 5.45 7/25/1997 49,818,333 25.5
Obligations** 3,226,000 Federal Home Loan Mortgage
Corp. 6.00 7/01/1997 3,226,000 1.7
------------ ------
62,644,333 32.1
Total Short-Term Investments
in the United States
(Cost--$72,258,333) 72,258,333 37.0
Total Investments in Short-Term
Securities (Cost--$99,779,889) 99,790,070 51.1
Total Investments (Cost--$184,472,662) 185,633,621 95.1
Short Sales (Proceeds--$13,075,000)*** (13,850,000) (7.1)
Other Assets Less Liabilities 23,423,741 12.0
------------ ------
Net Assets $195,207,362 100.0%
============ ======
<FN>
(a)The rights may be exercised until 3/31/2020.
(b)The security may be offered and sold to "qualified
institutional buyers" under Rule 144A of the Securities Act
of 1933.
*Brady Bonds are securities which have been issued to
refinance commercial bank loans and other debt. The risk
associated with these instruments is the amount of any un-
collateralized principal or interest payments since there
is a high default rate of commercial bank loans by
countries issuing these securities.
**Commercial Paper and certain Foreign Government and US
Government Agency Obligations are traded on a discount
basis; the interest rates shown are the discount rates paid
at the time of purchase by the Fund.
***Short sales entered into as of June 30, 1997 were as
follows:
<CAPTION>
Face Value
Amount Issue (Note 1h)
<C> <S> <C>
$20,000,000 Republic Argentina, par L due 3/21/2023 $(13,850,000)
============
Total (Proceeds--$13,075,000) $(13,850,000)
============
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF ASSETS AND LIABILITIES
<CAPTION>
As of June 30, 1997
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$184,472,662) (Note 1a) $185,633,621
Cash 644
Deposits on short sales (Note 1h) 15,434,619
Receivables:
Securities sold $ 8,596,986
Interest 1,656,733
Capital shares sold 223,839 10,477,558
------------
Deferred organization expenses (Note 1f) 34,369
Prepaid registration fees and other assets (Note 1f) 59,704
------------
Total assets 211,640,515
------------
Liabilities: Securities sold short, at market value (proceeds--$13,075,000)
(Note 1h) 13,850,000
Payables:
Capital shares redeemed 1,087,633
Interest on short sales (Note 1h) 606,357
Distributions to shareholders (Note 1g) 354,136
Interest expense (Note 5) 149,722
Investment adviser (Note 2) 98,635
Distributor (Note 2) 91,260 2,387,743
------------
Accrued expenses and other liabilities 195,410
------------
Total liabilities 16,433,153
------------
Net Assets: Net assets $195,207,362
============
Net Assets Class A Common Stock, $0.10 par value, 100,000,000
Consist of: shares authorized $ 334,381
Class B Common Stock, $0.10 par value, 100,000,000
shares authorized 1,219,215
Class C Common Stock, $0.10 par value, 100,000,000
shares authorized 94,661
Class D Common Stock, $0.10 par value, 100,000,000
shares authorized 149,470
Paid-in capital in excess of par 183,869,374
Undistributed realized capital gains on investments--net 9,154,302
Unrealized appreciation on investments--net 385,959
------------
Net assets $195,207,362
============
<PAGE>
Net Asset Class A--Based on net assets of $36,437,446 and 3,343,807
Value: shares outstanding $ 10.90
============
Class B--Based on net assets of $132,289,807 and 12,192,146
shares outstanding $ 10.85
============
Class C--Based on net assets of $10,270,338 and 946,615
shares outstanding $ 10.85
============
Class D--Based on net assets of $16,209,771 and 1,494,703
shares outstanding $ 10.84
============
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENT OF OPERATIONS
<CAPTION>
For the Six Months Ended June 30, 1997
<S> <S> <C> <C>
Investment Income Interest and discount earned $ 7,926,581
(Note 1e):
Expenses: Investment advisory fees (Note 2) $ 620,044
Account maintenance and distribution fees--Class B (Note 2) 537,845
Interest on short sales (Note 1h) 343,198
Interest expense (Note 5) 161,977
Transfer agent fees--Class B (Note 2) 134,377
Printing and shareholder reports 65,834
Registration fees (Note 1f) 51,229
Account maintenance and distribution fees--Class C (Note 2) 42,486
Accounting services (Note 2) 39,118
Custodian fees 31,507
Professional fees 30,037
Transfer agent fees--Class A (Note 2) 24,317
Account maintenance fees--Class D (Note 2) 23,045
Directors' fees and expenses 19,055
Transfer agent fees--Class D (Note 2) 15,017
Transfer agent fees--Class C (Note 2) 10,780
Amortization of organization expenses (Note 1f) 10,512
Other 5,350
------------
Total expenses 2,165,728
------------
Investment income--net 5,760,853
------------
<PAGE>
Realized & Realized gain on investments--net 7,974,802
Unrealized Gain Change in unrealized appreciation on investments--net (16,184,966)
(Loss) on ------------
Investments--Net Net Decrease in Net Assets Resulting from Operations $ (2,449,311)
(Notes 1b, 1c, ============
1e & 3):
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
For the Six For the
Months Ended Year Ended
June 30, December 31,
Increase (Decrease) in Net Assets: 1997 1996
<S> <S> <C> <C>
Operations: Investment income--net $ 5,760,853 $ 15,396,353
Realized gain on investments and foreign currency transactions
--net 7,974,802 22,082,753
Change in unrealized appreciation/depreciation on investments
and foreign currency transactions--net (16,184,966) 14,959,382
------------ ------------
Net increase (decrease) in net assets resulting from operations (2,449,311) 52,438,488
------------ ------------
Dividends & Investment income--net:
Distributions to Class A (883,026) (1,756,766)
Shareholders Class B (4,020,222) (12,358,235)
(Note 1g): Class C (293,813) (678,129)
Class D (563,792) (1,554,156)
In excess of investment income--net:
Class A -- (236,371)
Class B -- (1,662,785)
Class C -- (91,241)
Class D -- (209,110)
Realized gain on investments--net:
Class A -- (801,439)
Class B -- (4,369,170)
Class C -- (310,794)
Class D -- (512,917)
------------ ------------
Net decrease in net assets resulting from dividends and
distributions to shareholders (5,760,853) (24,541,113)
------------ ------------
<PAGE>
Capital Share Net increase (decrease) in net assets derived from capital
Transactions share transactions (14,760,936) 70,086,193
(Note 4): ------------ ------------
Net Assets: Total increase (decrease) in net assets (22,971,100) 97,983,568
Beginning of period 218,178,462 120,194,894
------------ ------------
End of period $195,207,362 $218,178,462
============ ============
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENT OF CASH FLOWS
<CAPTION>
For the Six Months Ended June 30, 1997
<S> <S> <C>
Cash Used for Net decrease in net assets resulting from operations $ (2,449,311)
Operating Adjustments to reconcile net increase in net assets resulting from
Activities: operations to net cash used for operating activities:
Increase in other assets (15,434,619)
Decrease in receivables 3,350,914
Increase in other liabilities 57,586
Realized and unrealized loss on investments--net 8,210,164
Amortization of discount (1,978,161)
--------------
Net cash used for operating activities (8,243,427)
--------------
Cash Provided Proceeds from sales of long-term securities 786,116,579
by Investing Purchases of long-term securities (636,503,957)
Activities: Purchases of short-term investments (4,026,467,963)
Proceeds from sales and maturities of short-term investments 3,931,925,351
--------------
Net cash provided by investing activities 55,070,010
--------------
Cash Used for Cash receipts from issuance of common stock 93,982,599
Financing Cash receipts from borrowings 58,300,700
Activities: Cash payments on borrowings (80,651,000)
Cash payments on shares of beneficial interest redeemed (110,503,705)
Dividends paid to shareholders (7,954,533)
--------------
Net cash used for financing activities (46,825,939)
--------------
<PAGE>
Cash: Net increase in cash 644
Cash at beginning of period --
--------------
Cash at end of period $ 644
==============
Cash Flow Cash paid for interest $ 367,559
Information: ==============
Non-Cash Capital shares issued on reinvestment of dividends paid to shareholders $ 1,675,025
Financing ==============
Activities:
See Notes to Financial Statements.
</TABLE>
<TABLE>
FINANCIAL HIGHLIGHTS
<CAPTION>
Class A
For the For the
The following per share data and ratios have been Six Period
derived from information provided in the financial Months For the Oct. 21,
statements. Ended Year Ended 1994++ to
June 30, December 31, Dec. 31,
Increase (Decrease) in Net Asset Value: 1997+++++ 1996+++++ 1995 1994
<S> <S> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 11.36 $ 9.70 $ 8.51 $ 9.08
Operating -------- -------- -------- --------
Performance: Investment income--net .32 .97 .94 .17
Realized and unrealized gain (loss) on investments
and foreign currency transactions--net (.43) 2.14 1.19 (.57)
-------- -------- -------- --------
Total from investment operations (.11) 3.11 2.13 (.40)
-------- -------- -------- --------
Less dividends and distributions:
Investment income--net (.35) (1.00) (.94) (.14)
In excess of investment income--net -- (.13) -- --
Realized gain on investments--net -- (.32) -- (.03)
-------- -------- -------- --------
Total dividends and distributions (.35) (1.45) (.94) (.17)
-------- -------- -------- --------
Net asset value, end of period $ 10.90 $ 11.36 $ 9.70 $ 8.51
======== ======== ======== ========
Total Investment Based on net asset value per share (1.00%)+++ 33.64% 27.27% (4.45%)+++
Return:** ======== ======== ======== ========
<PAGE>
Ratios to Average Expenses, excluding interest expense 1.02%* 1.05% 1.20% 1.22%*
Net Assets: ======== ======== ======== ========
Expenses 1.53%* 1.32% 1.36% 1.91%*
======== ======== ======== ========
Investment income--net 6.23%* 8.97% 11.25% 8.63%*
======== ======== ======== ========
Supplemental Net assets, end of period (in thousands) $ 36,437 $ 28,136 $ 1,165 $ 253
Data: ======== ======== ======== ========
Portfolio turnover 401.71% 420.35% 127.17% 353.33%
======== ======== ======== ========
Leverage: Amount of reverse repurchase agreements outstanding,
end of period (in thousands) $ 0 $ 22,350 $ 10,265 $ 17,058
======== ======== ======== ========
Average amount of reverse repurchase agreements
outstanding during the period (in thousands) $ 5,926 $ 8,277 $ 2,640 $ 17,315
======== ======== ======== ========
Average amount of reverse repurchase agreements per
share during the period $ .32 $ .48 $ .20 $ 1.19
======== ======== ======== ========
<CAPTION>
Class B
For the For the
The following per share data and ratios have Six Period
been derived from information provided in the Months For the Aug. 27,
financial statements. Ended Year Ended 1993++ to
June 30, December 31, Dec. 31,
Increase (Decrease) in Net Asset Value: 1997+++++ 1996+++++ 1995 1994 1993
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 11.31 $ 9.65 $ 8.48 $ 10.84 $ 10.00
Operating -------- -------- -------- -------- --------
Performance: Investment income--net .30 .88 .88 .75 .24
Realized and unrealized gain (loss) on
investments and foreign currency transactions
--net (.46) 2.15 1.17 (2.36) .88
-------- -------- -------- -------- --------
Total from investment operations (.16) 3.03 2.05 (1.61) 1.12
-------- -------- -------- -------- --------
Less dividends and distributions:
Investment income--net (.30) (.93) (.88) (.64) (.24)
In excess of investment income--net -- (.12) -- -- --
Realized gain on investments--net -- (.32) -- (.11) (.04)
-------- -------- -------- -------- --------
Total dividends and distributions (.30) (1.37) (.88) (.75) (.28)
-------- -------- -------- -------- --------
Net asset value, end of period $ 10.85 $ 11.31 $ 9.65 $ 8.48 $ 10.84
======== ======== ======== ======== ========
<PAGE>
Total Investment Based on net asset value per share (1.39%)+++ 32.75% 26.10% (15.08%) 11.30%+++
Return:** ======== ======== ======== ======== ========
Ratios to Average Expenses, excluding interest expense and net
Net Assets: of reimbursement 1.81%* 1.83% 1.97% 1.79% 1.03%*
======== ======== ======== ======== ========
Expenses, excluding interest expense 1.81%* 1.83% 1.97% 2.00% 2.45%*
======== ======== ======== ======== ========
Expenses 2.31%* 2.10% 2.13% 2.70% 2.53%*
======== ======== ======== ======== ========
Investment income--net 5.61%* 8.36% 10.40% 8.14% 6.76%*
======== ======== ======== ======== ========
Supplemental Net assets, end of period (in thousands) $132,290 $160,204 $103,465 $101,933 $ 98,848
Data: ======== ======== ======== ======== ========
Portfolio turnover 401.71% 420.35% 127.17% 353.33% 75.18%
======== ======== ======== ======== ========
Leverage: Amount of reverse repurchase agreements
outstanding, end of period (in thousands) $ 0 $ 22,350 $ 10,265 $ 17,058 $ 21,546
======== ======== ======== ======== ========
Average amount of reverse repurchase
agreements outstanding during the period
(in thousands) $ 5,926 $ 8,277 $ 2,640 $ 17,315 $ 18,977
======== ======== ======== ======== ========
Average amount of reverse repurchase
agreements per share during the period $ .32 $ .48 $ .20 $ 1.19 $ 1.81
======== ======== ======== ======== ========
<FN>
*Annualized.
**Total investment returns exclude the effects of sales loads.
See Notes to Financial Statements.
</TABLE>
<TABLE>
FINANCIAL HIGHLIGHTS (concluded)
<CAPTION>
Class C
<PAGE>
For the For the
The following per share data and ratios have been Six Period
derived from information provided in the financial Months For the Oct. 21,
statements. Ended Year Ended 1994++ to
June 30, December 31, Dec. 31,
Increase (Decrease) in Net Asset Value: 1997+++++ 1996+++++ 1995 1994
<S> <S> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 11.31 $ 9.65 $ 8.47 $ 9.08
Operating -------- -------- -------- --------
Performance: Investment income--net .30 .87 .87 .15
Realized and unrealized gain (loss) on investments
and foreign currency transactions--net (.46) 2.15 1.18 (.61)
-------- -------- -------- --------
Total from investment operations (.16) 3.02 2.05 (.46)
-------- -------- -------- --------
Less dividends and distributions:
Investment income--net (.30) (.92) (.87) (.13)
In excess of investment income--net -- (.12) -- --
Realized gain on investments--net -- (.32) -- (.02)
-------- -------- -------- --------
Total dividends and distributions (.30) (1.36) (.87) (.15)
-------- -------- -------- --------
Net asset value, end of period $ 10.85 $ 11.31 $ 9.65 $ 8.47
======== ======== ======== ========
Total Investment Based on net asset value per share (1.43%)+++ 32.66% 26.18% (5.06%)+++
Return:** ======== ======== ======== ========
Ratios to Average Expenses, excluding interest expense 1.88%* 1.90% 2.05% 2.24%*
Net Assets: ======== ======== ======== ========
Expenses 2.38%* 2.17% 2.19% 3.05%*
======== ======== ======== ========
Investment income--net 5.53%* 8.17% 10.23% 8.87%*
======== ======== ======== ========
Supplemental Net assets, end of period (in thousands) $ 10,270 $ 11,436 $ 1,396 $ 75
Data: ======== ======== ======== ========
Portfolio turnover 401.71% 420.35% 127.17% 353.33%
======== ======== ======== ========
Leverage: Amount of reverse repurchase agreements outstanding,
end of period (in thousands) $ 0 $ 22,350 $ 10,265 $ 17,058
======== ======== ======== ========
Average amount of reverse repurchase agreements
outstanding during the period (in thousands) $ 5,926 $ 8,277 $ 2,640 $ 17,315
======== ======== ======== ========
Average amount of reverse repurchase agreements per
share during the period $ .32 $ .48 $ .20 $ 1.19
======== ======== ======== ========
<CAPTION>
Class D
<PAGE>
For the For the
The following per share data and ratios have Six Period
been derived from information provided in the Months For the Aug. 27,
financial statements. Ended Year Ended 1993++ to
June 30, December 31, Dec. 31,
Increase (Decrease) in Net Asset Value: 1997+++++ 1996+++++ 1995 1994 1993
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 11.31 $ 9.65 $ 8.48 $ 10.84 $ 10.00
Operating -------- -------- -------- -------- --------
Performance: Investment income--net .34 .95 .92 .80 .26
Realized and unrealized gain (loss) on
investments and foreign currency transactions
--net (.48) 2.13 1.17 (2.36) .88
-------- -------- -------- -------- --------
Total from investment operations (.14) 3.08 2.09 (1.56) 1.14
-------- -------- -------- -------- --------
Less dividends and distributions:
Investment income--net (.33) (.97) (.92) (.68) (.26)
In excess of investment income--net -- (.13) -- -- --
Realized gain on investments--net -- (.32) -- (.12) (.04)
-------- -------- -------- -------- --------
Total dividends and distributions (.33) (1.42) (.92) (.80) (.30)
-------- -------- -------- -------- --------
Net asset value, end of period $ 10.84 $ 11.31 $ 9.65 $ 8.48 $ 10.84
======== ======== ======== ======== ========
Total Investment Based on net asset value per share (1.23%)+++ 33.44% 26.75% (14.65%) 11.49%+++
Return:** ======== ======== ======== ======== ========
Ratios to Average Expenses, excluding interest expense and net
Net Assets: of reimbursement 1.28%* 1.31% 1.44% 1.28% .50%*
======== ======== ======== ======== ========
Expenses, excluding interest expense 1.28%* 1.31% 1.44% 1.48% 1.93%*
======== ======== ======== ======== ========
Expenses 1.79%* 1.58% 1.60% 2.17% 2.03%*
======== ======== ======== ======== ========
Investment income--net 6.12%* 8.92% 10.85% 8.65% 7.14%*
======== ======== ======== ======== ========
Supplemental Net assets, end of period (in thousands) $ 16,210 $ 18,402 $ 14,169 $ 14,938 $ 15,076
Data: ======== ======== ======== ======== ========
Portfolio turnover 401.71% 420.35% 127.17% 353.33% 75.18%
======== ======== ======== ======== ========
Leverage: Amount of reverse repurchase agreements
outstanding, end of period (in thousands) $ 0 $ 22,350 $ 10,265 $ 17,058 $ 21,546
======== ======== ======== ======== ========
Average amount of reverse repurchase
agreements outstanding during the period
(in thousands) $ 5,926 $ 8,277 $ 2,640 $ 17,315 $ 18,977
======== ======== ======== ======== ========
Average amount of reverse repurchase
agreements per share during the period $ .32 $ .48 $ .20 $ 1.19 $ 1.81
======== ======== ======== ======== ========
<PAGE>
<FN>
*Annualized.
**Total investment returns exclude the effects 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.
(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.
(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 from net investment
income are declared daily and paid monthly. Distribution of capital
gains are recorded on the ex-dividend date.
(h) Short sales--When the Fund engages in a short sale, an amount
equal to the proceeds 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 market value of the
short sale. The Fund maintains a segregated account of securities as
collateral for the short sales. The Fund is exposed to market risk
based on the amount, if any, that the market value of the stock
exceeds the market value of the securities in the segregated
account.
<PAGE>
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.
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
Maintenance Distribution
Fee Fee
Class B 0.25% 0.50%
Class C 0.25% 0.55%
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.
<PAGE>
For the six months ended June 30, 1997, MLFD earned underwriting
discounts and direct commissions and MLPF&S earned dealer
concessions on sales of the Fund's Class A and Class D Shares as
follows:
MLFD MLPF&S
Class A $ 45 $ 384
Class D $2,558 $24,261
NOTES TO FINANCIAL STATEMENTS (concluded)
For the six months ended June 30, 1997, MLPF&S received contingent
deferred sales charges of $351,581 and $3,669 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, MLFD, MLFDS, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the six months ended June 30, 1997 were $571,237,247 and
$716,740,617, respectively.
Realized and unrealized gains (losses) as of June 30, 1997 were as
follows:
Realized Unrealized
Gains (Losses) Gains (Losses)
Long-term investments $ 8,904,826 $ 1,150,778
Short-term investments 1,621 10,181
Short sales (975,120) (775,000)
Financial futures contracts 43,475 --
------------ -----------
Total $ 7,974,802 $ 385,959
============ ===========
As of June 30, 1997, net unrealized appreciation for Federal income
tax purposes aggregated $1,160,959, of which $1,282,380 related to
appreciated securities and $121,421 related to depreciated
securities. At June 30, 1997, the aggregate cost of investments for
Federal income tax purposes was $184,472,662.
<PAGE>
4. Capital Share Transactions:
Net increase (decrease) in net assets derived from capital share
transactions was $(14,760,936) and $70,086,193 for the six months
ended June 30, 1997 and the year ended December 31, 1996,
respectively.
Transactions in shares of capital were as follows:
Class A Shares for the Six Months Dollar
Ended June 30, 1997 Shares Amount
Shares sold 4,583,427 $ 50,241,848
Shares issued to shareholders
in reinvestment of dividends (51,641) (603,031)
------------ ------------
Total issued 4,531,786 49,638,817
Shares redeemed (3,664,811) (40,687,314)
------------ ------------
Net increase 866,975 $ 8,951,503
============ ============
Class A Shares for the Year Ended Dollar
December 31, 1996 Shares Amount
Shares sold 3,188,362 $ 33,640,007
Shares issued to shareholders
in reinvestment of dividends
and distributions 223,634 2,467,894
------------ ------------
Total issued 3,411,996 36,107,901
Shares redeemed (1,055,288) (11,591,124)
------------ ------------
Net increase 2,356,708 $ 24,516,777
============ ============
Class B Shares for the Six Months Dollar
Ended June 30, 1997 Shares Amount
Shares sold 2,573,580 $ 28,529,693
Shares issued to shareholders
in reinvestment of dividends 167,632 1,855,044
------------ ------------
Total issued 2,741,212 30,384,737
Automatic conversion of shares (31,510) (349,243)
Shares redeemed (4,680,205) (51,705,676)
------------ ------------
Net decrease (1,970,503) $(21,670,182)
============ ============
<PAGE>
Class B Shares for the Year Ended Dollar
December 31, 1996 Shares Amount
Shares sold 9,423,373 $ 97,739,290
Shares issued to shareholders
in reinvestment of dividends
and distributions 874,443 9,531,248
------------ ------------
Total issued 10,297,816 107,270,538
Automatic conversion of shares (481,977) (1,098,316)
Shares redeemed (6,374,330) (71,172,295)
------------ ------------
Net increase 3,441,509 $ 34,999,927
============ ============
Class C Shares for the Six Months Dollar
Ended June 30, 1997 Shares Amount
Shares sold 333,178 $ 3,697,525
Shares issued to shareholders
in reinvestment of dividends 15,305 169,283
------------ ------------
Total issued 348,483 3,866,808
Shares redeemed (412,935) (4,573,159)
------------ ------------
Net decrease (64,452) $ (706,351)
============ ============
Class C Shares for the Year Ended Dollar
December 31, 1996 Shares Amount
Shares sold 1,097,995 $ 11,420,812
Shares issued to shareholders
in reinvestment of dividends
and distributions 67,079 736,136
------------ ------------
Total issued 1,165,074 12,156,948
Shares redeemed (298,711) (3,200,889)
------------ ------------
Net increase 866,363 $ 8,956,059
============ ============
<PAGE>
Class D Shares for the Six Months Dollar
Ended June 30, 1997 Shares Amount
Shares sold 957,775 $ 10,657,338
Automatic conversion of shares 31,521 349,243
Shares issued to shareholders
in reinvestment of dividends 21,624 253,729
------------ ------------
Total issued 1,010,920 11,260,310
Shares redeemed (1,143,781) (12,596,216)
------------ ------------
Net decrease (132,861) $ (1,335,906)
============ ============
Class D Shares for the
Year Ended Dollar
December 31, 1996 Shares Amount
Shares sold 1,242,352 $ 12,804,879
Automatic conversion of shares 95,879 1,045,958
Shares issued to shareholders
in reinvestment of dividends
and distributions 104,699 1,098,316
------------ ------------
Total issued 1,442,930 14,949,153
Shares redeemed (1,284,258) (13,335,723)
------------ ------------
Net increase 158,672 $ 1,613,430
============ ============
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.
<PAGE>
As of June 30, 1997, the Fund had no outstanding reverse repurchase
agreements. For the six months ended June 30, 1997, the maximum
amount entered into was $55,151,000, the average amount outstanding
was approximately $5,926,000, and the daily weighted average
interest rate was 5.54%.
