MERRILL LYNCH
ASSET BUILDER
PROGRAM, INC.
FUND LOGO
Quarterly Report
April 30, 1998
This report is not authorized for use as an offer of sale or a
solicitation of an offer to buy shares of the Program unless
accompanied or preceded by the Program'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
Asset Builder Program, Inc.
Box 9011
Princeton, NJ
08543-9011
Printed on post-consumer recycled paper
Merrill Lynch Asset Builder Program, Inc.
Officers and
Directors
Arthur Zeikel, President and Director
Joe Grills, Director
Walter Mintz, Director
Robert S. Salomon Jr., Director
Melvin R. Seiden, Director
Stephen B. Swensrud, Director
Terry K. Glenn, Executive Vice President
Christopher G. Ayoub, Senior Vice President
Lawrence R. Fuller, Senior Vice President
Geraldine C. Gunn, Senior Vice President
Jay C. Harbeck, Senior Vice President
Norman R. Harvey, Senior Vice President
Robert J. Martorelli, Senior Vice President
Gregory Mark Maunz, Senior Vice President
Joseph T. Monagle Jr., Senior Vice President
Thomas R. Robinson, Senior Vice President
Donald C. Burke, Vice President
Gerald M. Richard, Treasurer
Barbara G. Fraser, Secretary
Custodian
The Bank of New York
90 Washington Street, 12th Floor
New York, NY 10286
Transfer Agent
Merrill Lynch Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 637-3863
Merrill Lynch Asset Builder Program, Inc., April 30, 1998
DEAR SHAREHOLDER
We are pleased to provide you with this quarterly report for Merrill
Lynch Asset Builder Program, Inc. The Program consists of five
separate diversified portfolios, each with its own investment
objectives.
Complete performance information, including average annual total
returns, for all five portfolios can be found on pages 7-10 of this
report to shareholders.
Fundamental Value Portfolio
The US stock market soared to record highs during the quarter ended
April 30, 1998, overcoming investor skittishness early in the period
regarding the potential for an economic slowdown induced by the
Asian currency crisis. Concerns were calmed with the release of
statistics supporting continued robust economic growth with benign
inflation. Gross domestic product (GDP) gained a solid 4.8% in the
first quarter of 1998, with strong consumer spending and higher-than-
expected inventory accumulation offsetting a weak trade sector.
Lower import prices and modest labor cost increases kept inflation
in check so that the Federal Reserve Board did not need to tighten
monetary policy.
Fundamental Value Portfolio's Class A, Class B, Class C and Class D
Shares had total returns of +14.38%, +14.11%, +14.04% and +14.35%,
respectively, for the quarter ended April 30, 1998, exceeding the
total return of +13.84% for the unmanaged Standard & Poor's 500 (S&P
500) Index. (Results shown do not reflect sales charges and would be
lower if sales charges were included.) The Portfolio's heavy
weightings in the basic industry, consumer cyclical and technology
sectors proved beneficial to its performance because these areas
enjoyed solid gains. Basic industry and consumer cyclical issues
benefited from continued strong economic growth and modest
valuations, while many technology equities recovered from oversold
fourth quarter of 1997 levels. Leading individual gainers for the
Portfolio included: Exabyte Corp., Kmart Corporation, Pharmaceutical
Product Development, Inc. and Dresser Industries, Inc., each of
which gained in excess of 35% during the three-month period ended
April 30, 1998.
During the April quarter, we initiated positions in two out-of-favor
sectors--energy and gold--that we believed offered attractive
risk/reward prospects. In the energy industry, we initiated
positions in two lagging equities, Royal Dutch Petroleum Company and
Diamond Offshore Drilling, Inc., and increased our existing position
in Occidental Petroleum Corp. Petroleum equities have been poor
market performers, reflecting the weak commodity price environment
and resultant lackluster earnings progress. We viewed the weakness
as a buying opportunity in these reasonably valued defensive shares.
We believe the fundamental outlook for energy markets will
strengthen going forward, reflecting the Organization of Petroleum
Exporting Countries' production restraint and an improved demand
outlook as Asia stabilizes and as El Nino's adverse weather
influence begins to moderate. We viewed Royal Dutch Petroleum as a
quality integrated international energy company, while Diamond
Offshore afforded exposure to the attractive deepwater drilling
market. Fundamentals for the undersupplied deepwater market are
strong and are expected to remain so through at least the end of the
decade. We purchased shares of Diamond Offshore at 12 times 1999
estimated earnings, a sharp discount to its forecasted earnings per
share growth rate.
In the gold sector, we initiated a position in Newmont Mining
Corporation. Gold equities have been out of favor for some time,
reflecting numerous factors including a proposal by the Swiss to
sell one-half of their gold reserves; central bank gold sales as
nations prepare for entry into the European Monetary Union (EMU);
the Asian currency crisis, which dampened demand as the dollar cost
of gold jewelry rose; and the lack of inflation, since gold has
traditionally held appeal as a store of value during inflationary
times. We believe the gold market may be nearing an inflection
point. The establishment of the EMU in 1999 is likely to relieve
some of the selling pressure, as the amount of gold backing the Euro
(the currency of the EMU) will be more clearly defined. The supply
of gold is expected to be further constrained by production and
exploration cutbacks, since about one-half of the gold mines in the
world are unprofitable at current prices. We viewed Newmont Mining
as the quality leader in this out-of-favor industry. Newmont has a
solid asset base, is the lowest cost producer and is benefiting from
a synergistic acquisition.
We purchased two equities that faced company-specific adversities
that we believed were nearing resolution, Columbia/HCA Healthcare
Corporation and Union Pacific Corporation. Columbia/HCA, the largest
investor-owned hospital company, has been mired in a Justice
Department investigation of its Medicare billing practices. The
investigation has caused significant upheaval within the company,
including a management shakeup, sizable legal expenditures and
adverse operating trends. We believe the company may be nearing a
resolution of this protracted and damaging process. Accordingly,
Columbia/HCA offered attractive turnaround potential, in our view.
New management has undertaken significant steps to improve the
company's operations, including proposed asset sales and spin-offs
and cost reductions. To brighten the company's tarnished image, a
highly regarded ethics executive has been named as well as an
impressive slate of new board of directors. We believe these steps,
complemented by recently improved admission trends and an eventual
share buyback program, could lead to an enhanced valuation for these
downtrodden shares.
We purchased shares of Union Pacific Corporation, the nation's
largest railroad company, on weakness related to integration
problems associated with its merger with Southern Pacific Corp. The
company's management has taken significant actions to resolve the
resultant congestion problems. These actions include traffic
rerouting, train consolidation and service cancellations.
Ultimately, we expect the company to realize significant synergies
from the acquisition, and to benefit from the sizable demand for
rail capacity being experienced in the Western region of the United
States. The company's financial position could be fortified by the
sale/initial public offering of the company's Overnight
Transportation unit and/or by the sale of real estate holdings.
Two positions initiated during the April quarter, Motorola, Inc. and
Kimberly-Clark Corporation, offered attractive earnings recovery
prospects, in our view. Motorola has reported disappointing earnings
over the last several quarters reflecting the adverse influence of
the Asian crisis on its cellular and semiconductor businesses;
weakness in the handset segment as the company transitions from
analog to digital products; and market share losses in the cellular
infrastructure segment. Although the near-term outlook for the
company remains cloudy, we believed the current valuation to be
attractive. During the quarter, Motorola was trading 39% below its
1997 high and at 1.1 times revenues, a sharp discount to comparable
companies. We forecasted improved 1999 prospects, based on an
expected turnaround in the semiconductor business, an improved
product flow in the cellular segment and a potential corporate
restructuring.
Kimberly-Clark Corporation, a global manufacturer of consumer and
personal care products, has significantly underperformed the stock
market for two years, reflecting disappointing earnings progress.
The problems stemmed principally from the company's European
operations, where Kimberly-Clark faces intense competitive pressures
as well as sizable start-up costs related to new product
introductions. We believed the drag from these operating impediments
would moder-ate going forward, and that earnings would be further
enhanced by product price increases, asset sales and a share buyback
program. Accordingly, we viewed the share price weakness as
providing a buying opportunity. During the quarter, Kimberly-Clark
was trading at a sharp 30% discount to the stock market multiple
based on 1999 estimated earnings per share and at a sizable discount
to comparable companies' valuations.
Completed sales in the period included U S West Media Group, which
reached our price target, and Dillard's Inc., which continued to
report disappointing earnings progress. Partial sales included Ford
Motor Co. and Kmart Corporation, which neared our price targets, and
Digital Equipment Corporation, which was the subject of a takeover.
With the stock market trading at record valuation levels,
Fundamental Value Portfolio continues to present reasonable
valuation characteristics, in our view. The Portfolio trades at an
attractive 70% of the stock market price/earnings multiple on 1999
estimated earnings per share and at 40% of the market's price/book
value ratio.
Global Opportunity Portfolio
As of April 30, 1998, the asset allocation for Global Opportunity
Portfolio was: foreign stocks, 41% of net assets; US stocks, 35%;
foreign bonds, 12%; US bonds, 9%; and cash reserves, 3%.
During the three months ended April 30, 1998, we shifted assets into
US and foreign stocks, thereby reducing our position in US and
foreign bonds and cash. While we decreased US bonds from 15% of net
assets as of January 31,1998 to 9% as of April 30, 1998, we modestly
extended the Portfolio's duration from 5.9 years to 6.1 years. We
took advantage of a backup in US interest rates to extend the
duration in late April. At that time, yields on 30-year US Treasury
obligations approached 6%, a level that appeared attractive given
expectations of a modest reduction in US economic activity in coming
months. The slowdown is likely to reflect the increasing impact of
the weakness in Asian economies on US exports. Less robust export
growth is likely to increasingly offset strong domestic companies'
demand.
Merrill Lynch Asset Builder Program, Inc., April 30, 1998
In the foreign bond sector, we took advantage of price strength to
liquidate our commitments in Italian, Spanish and French bonds. We
also sold our Canadian bond position. The residual foreign bond
weighting is allocated to Europe, including Germany, Denmark, the
United Kingdom and Sweden. We continued to hedge the equivalent of
the full weighting in European stocks and bonds and Japanese
equities back into US dollars.
We raised our foreign equity representation from 28% of net assets
as of January 31, 1998 to 41% as of April 30, 1998. We continued to
place emphasis on European equities, given the favorable economic
fundamentals and prospects for corporate restructuring. New
positions in Europe included UBS, Daimler-Benz AG, Axa-UAP, Elf
Aquitaine S.A. and British Aerospace PLC. On the other hand,
concerns about prospects in the Japanese economy have led us to
remain underweighted in Japanese equities relative to the benchmark
unmanaged Morgan Stanley Europe, Australasia, Far East Index. In
emerging markets, we continued to prefer Latin America, and in
particular, Mexico, over the shares of Asian companies.
We also increased the US equity sector from 28% of net assets to 35%
during the three months ended April 30, 1998. Among the US equity
commitments in the Portfolio, our changed interest rate outlook has
led us to reduce the weighting in the financial services sector in
favor of areas that are more sensitive to US economic growth. The
most notable sectors that we increased included capital goods,
communications and technology. We continued to maintain a balance
between the largest-capitalization companies, including recently
established positions in Walt Disney Company, The Gillette Company
and Intel Corporation, and smaller-capitalization companies that we
believe are attractively valued. Examples of new positions of the
latter included Premier Parks Inc. and COMSAT Corporation.
Growth Opportunity Portfolio
For the quarter ended April 30, 1998, total returns for Growth
Opportunity Portfolio's Class A, Class B, Class C and Class D Shares
were +14.90%, +14.54%, +14.56% and +14.75%, respectively, exceeding
the total returns for both the unmanaged Standard & Poor's 500 and
the Lipper Analytical Services' Growth Funds Average of +13.84% and
+13.75%, respectively. (Fund performance does not reflect sales
charges and would be lower if sales charges were included.) The
major reason for the favorable relative performance was that five of
the Portfolio's top ten equity holdings had total returns in excess
of the competitive benchmarks. These companies were Pfizer,
Incorporated, Wal-Mart Stores, Inc., Walt Disney Company, Microsoft
Corporation and Cisco Systems, Inc. Other holdings which contributed
significantly to the Portfolio's returns for the April quarter were
Texas Instruments Inc., Northern Telecom Limited, Boston Scientific
Corp., Morgan Stanley, Dean Witter , Discover and Co.,
Telefonaktiebolaget LM Ericsson (ADR), State Street Corp., Mellon
Bank Corp., American International Group, Sprint Corp. and The
Gillette Co. Also, 45 of the 77 companies in the Portfolio at the
end of the April quarter had quarterly total returns in excess of
the total return of the S&P 500 Index for the same period.
During the April quarter, we reduced the Portfolio's weighting in
those communications equipment companies whose primary focus was in
wired and wireless voice communication. These companies were Lucent
Technologies Inc., Northern Telecom Limited and Telefonaktiebolaget
LM Ericsson (ADR). However, despite these reductions, at the end of
the quarter, the communications equipment sector was 6.4% of net
assets, the third-largest industry weighting after software--
computer at 9.9% and pharmaceuticals at 8.2%. The top ten industry
sectors in the Portfolio represented 59.3% of net assets. The top
ten company investments made up 29.7% of net assets.
We continued to have a positive outlook for the growth of consumer
spending on general merchandise including computers and computer
software, consumer entertainment and entertainment electronic goods,
recorded music, and furniture and household furnishings. The
depreciation of Asian currencies continued to have a positive effect
on keeping consumer price inflation relatively low. Consumer
confidence remained relatively high, and labor markets in the most
important service sector continued to be relatively tight.
Therefore, real wages have been increasing at a faster rate of
growth. The improved competitive position of Asian-based
manufacturers showed up in market share gains by these companies,
which is likely to assist in keeping inflation rates low in the
United States. Capital spending on globally networked operational
systems by private corporations appeared to continue at a relatively
rapid pace with very positive effects on the revenues and net income
of companies that supply data communications equipment, computers
and computer software. More than 25% of the Portfolio was invested
in companies in these industry sectors at April 30, 1998. We
continue to have a positive outlook for investment returns in the US
stock market, and had a relatively modest cash reserve position of
less than 8% of net assets at the end of the April quarter.
Quality Bond Portfolio
During February, the bond market traded within a narrow range as
investors sought to assess the impact of the Asian financial crisis
on US economic growth. From a low of 5.80%, the yield on the long-
term Treasury bond backed up to 6.00%, despite some favorable news.
Most significantly, the Federal Government ran a $17 billion budget
surplus for the 12 months ended January 1998. Commodity prices
trended down, and there was no change in the growth of the Consumer
Price Index. However, investors were concerned with rapid money
supply growth fueling a continuing record-high stock market against
a background of full employment. These pressures led investors to
conclude that the Federal Reserve Board would not lower short-term
interest rates in the near future. The long-term Treasury bond ended
February at 5.92%, exactly where it had started the year but higher
than the low of 5.69% that it had reached in mid-January. In March,
long-term Treasury bonds traded within a very narrow range, starting
the month at 6.01% and finishing at 5.93%. This was the result of
mounting evidence of a continuing strong domestic economy. Consumer
spending, employment and production data remained in a growth trend.
The Federal Reserve Board reported in its March "beige book" that
many US firms were desperate to find workers and were being forced
to offer large wage increases. Nevertheless, the stock market, as
measured by the Dow Jones Industrial Average (DJIA), soared over 400
points during March, and the bond market's reaction to these
concerns was clearly muted. In April, the bond market continued to
trade within a narrow range as concerns about an overheating economy
were offset by low inflation figures. The DJIA closed near a record
9,200 several times, but fixed-income investors remained more
cautious. The yield on the long-term Treasury bond rose over 6.00%,
but remained within the narrow range that characterized the market
for the past three months.
During the April quarter, we moderately extended the average
maturity of the Portfolio from 10.7 years to 11.4 years, swapping
out of Treasury issues into corporate bonds at favorable yield
spreads. This reduced the percentage of Treasury issues held from
17% of net assets to 11% during the quarter. We also added US
industrial and finance bonds, as well as utilities. While our
largest single sector consists of industrial issues, we remained
underweighted in the utility sector because we believed that many of
these issues are fully priced relative to industrial and financial
services bonds. In addition, the Portfolio had no exposure to
Canadian or Yankee bond issues whose values were being impacted by
the deteriorating Asian situation. The average coupon of the
Portfolio was 7.17% as of April 30, 1998. We added floating rate
securities to the Portfolio. The average quality of the Portfolio
was AA-, as rated by Standard & Poor's Corp., which matched the
Merrill Lynch Corporate Master Index average of A.
US Government Securities Portfolio
The financial data released during the April quarter revealed more
of the same: growth that was strong, inflation that was low, and
employment that was high. In a preliminary report gross domestic
product (GDP), the nation's total output of goods and services rose
at a 4.8% annual rate during the first quarter of 1998. This is up
from the 3.7% level for the fourth quarter of 1997 and was driven by
the biggest surge in consumer spending in six years. Furthermore, if
not for the largest drop ever in exports (a result of Asia's
financial crisis), the economy would have expanded even faster. Even
as growth continues, inflation remains tame. Both the Consumer Price
Index and Producer Price Index are at or near historical low rates
of growth. Additionally, the Employment Cost Index, an index watched
closely by the Federal Reserve Board as the broadest measure of
wage, salary and benefit costs, rose a smaller-than-expected 0.7%.
This represents the smallest increase since the first quarter of
1997. Labor costs account for two-thirds of consumer prices. Federal
Reserve Board officials have often cited the strength of the labor
market as a concern, since it could lead to higher wages, which in
turn might stimulate inflation. US average hourly earnings rose an
expected 0.3%. The unemployment rates for February, March and April
were 4.6%, 4.7% and 4.3%, respectively, and have held below 5% for
nearly a year. Federal Reserve Board policy makers have left the
overnight bank lending rate (the Federal Funds rate) unchanged at
5.5% for more than a year because inflation has remained low even in
the face of high employment and GDP growth numbers that are
surpassing expectations. Low inflation coupled with problems in the
Asian economies are likely the main variables keeping the Federal
Reserve Board from raising interest rates. If these variables
change, the Federal Reserve Board will probably move to raise
interest rates.
Merrill Lynch Asset Builder Program, Inc., April 30, 1998
During the April quarter, the US Treasury yield curve continued to
flatten. Yields on intermediate-term securities, in particular two-
year, three-year and five-year Treasury note yields, all moved
higher in excess of 25 basis points. The one-year Treasury bill rose
by 16 basis points, and the ten-year and 30-year Treasury yields
rose by approximately 15 basis points each. The two-year--ten-year
Treasury yield spread flattened dramatically from 21 basis points to
11 basis points.
Although interest rates ended the April quarter higher than they
started, prepayments continued to be a concern for mortgage-backed
securities (MBS) investors. Refinancing a residential mortgage has
become more efficient during the past six months. This can be
readily seen through the MBA Refi Application Index. Though
dramatically off the historical peak seen very early in the year,
the Index was consistently high throughout the April quarter. (The
Index was created in 1990 and covers all applications to refinance
existing mortgages regardless of coupon.)
One of our strategies has been to avoid those securities that would
be hurt the most by heavy prepayments. In the 30-year MBS sector,
the Portfolio's investments are solely in Government National
Mortgage Association (GNMA) securities. In addition to having slower
prepayments than conventional MBS, GNMA MBS had better performance.
GNMA 6.50%, 7% and 7.50% MBS outperformed their conventional
counterparts by 9 basis points, 10 basis points and 15 basis points,
respectively. More than 30% of the Portfolio was invested in these
30-year GNMA MBS during the April quarter. Another 23% of the
Portfolio was invested in 15-year conventional 6.50% MBS which had a
three-month return of 125 basis points. This compares favorably to
five-year Treasury notes, which have a similar average life and
returned only 26 basis points for the three-month period. The
Federal Home Loan Mortgage Corporation 11.50% position, which made
up 10% of the Portfolio, continued to add current income through its
higher coupon without suffering from prepayments. The prepayments on
this bond have consistently been slower than those MBS with as much
as 4-point lower mortgage rates.
Additionally, almost one-third of the Portfolio was invested in US
Treasury securities. Though underperforming MBS for the April
quarter, US Treasury securities helped to maintain the Portfolio's
duration during periods of increased volatility. If interest rates
continue to move up without a dramatic increase in volatility, we
will most likely reduce the Portfolio's Treasury allocation in favor
of MBS.
In Conclusion
We thank you for your investment in Merrill Lynch Asset Builder
Program, Inc., and we look forward to reviewing our outlook and
strategy with you again in our upcoming semi-annual report to
shareholders.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Geraldine C. Gunn)
Geraldine C. Gunn
Senior Vice President and
Portfolio Manager
Fundamental Value Portfolio
(Thomas R. Robinson)
Thomas R. Robinson
Senior Vice President and
Portfolio Manager
Global Opportunity Portfolio
(Lawrence R. Fuller)
Lawrence R. Fuller
Senior Vice President and
Portfolio Manager
Growth Opportunity Portfolio
(Jay C. Harbeck)
Jay C. Harbeck
Senior Vice President and
Portfolio Manager
Quality Bond Portfolio
(Gregory Mark Maunz)
Gregory Mark Maunz
Senior Vice President and
Portfolio Manager
US Government Securities Portfolio
June 2, 1998
PERFORMANCE DATA
About Fund
Performance
Investors are able to purchase shares of the Program 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 5.25% and bear no ongoing distribution or account
maintenance fees for Fundamental Value, Global Opportunity and
Growth Opportunity Portfolios. Quality Bond and US Government
Securities Portfolios 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.
* 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 for Fundamental Value,
Global Opportunity, Growth Opportunity, Quality Bond and US
Government Securities Portfolios. In addition, Quality Bond and US
Government Securities Portfolios are subject to a distribution fee
of 0.50% and an account maintenance fee of 0.25%. Fundamental Value,
Global Opportunity and Growth Opportunity Portfolios are subject to
a 0.75% distribution fee and a 0.25% account maintenance fee.
Fundamental Value, Global Opportunity and Growth Opportunity
Portfolios automatically convert to Class D Shares after
approximately 8 years. Quality Bond and US Government Securities
Portfolios 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% for Quality Bond and US Government
Securities Portfolios. Fundamental Value, Global Opportunity and
Growth Opportunity Portfolios are subject to a distribution fee of
0.75% and an account maintenance fee of 0.25%. In addition, Class C
Shares are subject to a 1% contingent deferred sales charge if
redeemed within one year of purchase.
* Class D Shares incur a maximum initial sales charge of 5.25% and
an account maintenance fee of 0.25% (but no distribution fee) for
Fundamental Value, Global Opportunity and Growth Opportunity
Portfolios. Quality Bond and US Government Securities Portfolios
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 represen-
tation of future performance. Figures shown in the "Average Annual
Total Return" tables assume reinvestment of all dividends and
capital gains distributions at net asset value on the ex-dividend or
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.
Merrill Lynch Asset Builder Program, Inc., April 30, 1998
PERFORMANCE DATA (continued)
Fundamental
Value Portfolio
Average Annual
Total Returns
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 3/31/98 +35.37% +28.26%
Inception (2/01/95) to 3/31/98 +23.54 +21.45
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 3/31/98 +33.86% +29.86%
Inception (2/01/95) to 3/31/98 +22.22 +22.01
[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 3/31/98 +33.88% +32.88%
Inception (2/01/95) to 3/31/98 +22.23 +22.23
[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 3/31/98 +35.07% +27.98%
Inception (2/01/95) to 3/31/98 +23.26 +21.18
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
Global
Opportunity
Portfolio
Average Annual
Total Returns
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 3/31/98 +16.73% +10.60%
Inception (2/01/95) to 3/31/98 +12.32 +10.42
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 3/31/98 +15.51% +11.51%
Inception (2/01/95) to 3/31/98 +11.13 +10.88
[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 3/31/98 +15.45% +14.45%
Inception (2/01/95) to 3/31/98 +11.10 +11.10
[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 3/31/98 +16.37% +10.26%
Inception (2/01/95) to 3/31/98 +12.07 +10.17
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
Growth
Opportunity
Portfolio
Average Annual
Total Returns
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 3/31/98 +44.47% +36.88%
Inception (2/02/96) to 3/31/98 +25.59 +22.49
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 3/31/98 +42.85% +38.85%
Inception (2/02/96) to 3/31/98 +24.32 +23.60
[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 3/31/98 +42.79% +41.79%
Inception (2/02/96) to 3/31/98 +24.24 +24.24
[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 3/31/98 +44.12% +36.55%
Inception (2/02/96) to 3/31/98 +25.39 +22.30
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
Quality Bond
Portfolio
Average Annual
Total Returns
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 3/31/98 +11.49% +7.03%
Inception (2/01/95) to 3/31/98 + 7.06 +5.69
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 3/31/98 +10.67% +6.67%
Inception (2/01/95) to 3/31/98 + 6.16 +5.88
[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 3/31/98 +10.59% +9.59%
Inception (2/01/95) to 3/31/98 + 6.08 +6.08
[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 3/31/98 +11.33% +6.87%
Inception (2/01/95) to 3/31/98 + 6.80 +5.43
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
US Government
Securities
Portfolio
Average Annual
Total Returns
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 3/31/98 +11.69% +7.22%
Inception (2/01/95) to 3/31/98 + 9.80 +8.39
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 3/31/98 +10.80% +6.80%
Inception (2/01/95) to 3/31/98 + 8.91 +8.64
[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 3/31/98 +10.72% +9.72%
Inception (2/01/95) to 3/31/98 + 8.84 +8.84
[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 3/31/98 +11.52% +7.06%
Inception (2/01/95) to 3/31/98 + 9.54 +8.14
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
Merrill Lynch Asset Builder Program, Inc., April 30, 1998
PERFORMANCE DATA (concluded)
<TABLE>
Recent
Performance
Results*
<CAPTION>
12 Month 3 Month Since Standardized
Total Total Inception 30-day Yield
Return Return Total Return As of 4/30/98
<S> <C> <C> <C> <C>
Fundamental Value Portfolio Class A Shares +37.92% +14.38% +98.20% --
Fundamental Value Portfolio Class B Shares +36.45 +14.11 +91.53 --
Fundamental Value Portfolio Class C Shares +36.38 +14.04 +91.48 --
Fundamental Value Portfolio Class D Shares +37.62 +14.35 +96.83 --
Global Opportunity Portfolio Class A Shares +14.85 + 8.60 +45.89 --
Global Opportunity Portfolio Class B Shares +13.54 + 8.32 +40.85 --
Global Opportunity Portfolio Class C Shares +13.48 + 8.33 +40.73 --
Global Opportunity Portfolio Class D Shares +14.59 + 8.52 +44.84 --
Growth Opportunity Portfolio Class A Shares +39.10 +14.90 +67.34 --
Growth Opportunity Portfolio Class B Shares +37.57 +14.54 +63.43 --
Growth Opportunity Portfolio Class C Shares +37.48 +14.56 +63.33 --
Growth Opportunity Portfolio Class D Shares +38.78 +14.75 +66.67 --
Quality Bond Portfolio Class A Shares +10.74 + 0.80 +24.86 6.13%
Quality Bond Portfolio Class B Shares + 9.72 + 0.62 +21.37 5.63
Quality Bond Portfolio Class C Shares + 9.76 + 0.61 +21.09 5.58
Quality Bond Portfolio Class D Shares +10.36 + 0.74 +23.74 5.88
US Government Securities Portfolio Class A Shares +10.83 + 1.02 +35.22 6.33
US Government Securities Portfolio Class B Shares + 9.95 + 0.84 +31.70 5.83
US Government Securities Portfolio Class C Shares + 9.87 + 0.83 +31.43 5.78
US Government Securities Portfolio Class D Shares +10.66 + 1.06 +34.20 6.08
<FN>
*Investment results shown do not reflect sales charges; results
shown would be lower if a sales charge was included. Total
investment returns are based on changes in net asset values for the
periods shown, and assume reinvestment of all dividends and capital
gains distributions at net asset value on the ex-dividend or payable
date. The Program's inception dates are: Fundamental Value
Portfolio, Global Opportunity Portfolio, Quality Bond Portfolio and
US Government Securities Portfolio, 2/01/95; and Growth Opportunity
Portfolio, 2/02/96.
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (in US dollars)
<CAPTION>
Fundamental Value Portfolio
MIDDLE Shares Percent of
EAST Industries Held Investments Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
Israel Computer Services 150,000 Scitex Corp. Ltd. $ 1,496,111 $ 1,996,875 2.0%
Total Investments in the
Middle East 1,496,111 1,996,875 2.0
NORTH
AMERICA
United States Automotive 20,000 Ford Motor Co. 429,535 916,250 1.0
25,000 General Motors Corp. 1,286,517 1,684,375 1.7
----------- ----------- ------
1,716,052 2,600,625 2.7
Banking 15,000 Bankers Trust New York Corp. 1,157,132 1,936,875 2.0
80,000 Hibernia Corp. (Class A) 948,558 1,635,000 1.7
5,000 Wells Fargo & Company 1,274,628 1,842,500 1.9
----------- ----------- ------
3,380,318 5,414,375 5.6
Beverage & 55,000 Seagram Company Ltd. (The) 1,981,064 2,347,813 2.4
Entertainment
Chemicals 28,000 duPont (E.I.) de
Nemours & Co. 1,580,055 2,038,750 2.1
30,000 Great Lakes Chemical
Corporation 1,289,188 1,507,500 1.5
----------- ----------- ------
2,869,243 3,546,250 3.6
Computer Software 100,000 Mentor Graphics Corporation 983,068 1,043,750 1.1
160,000 Novell, Inc. 1,245,994 1,595,000 1.6
----------- ----------- ------
2,229,062 2,638,750 2.7
Conglomerates 47,000 Tenneco, Inc. 2,030,095 2,023,938 2.1
Electric Utilities 35,000 Cinergy Corp. 1,213,803 1,220,625 1.3
Electrical 30,000 General Signal Corporation 1,229,451 1,320,000 1.4
Equipment
Fertilizer 40,000 IMC Global, Inc. 1,408,459 1,440,000 1.5
Financial Services 6,552 Associates First Capital
Corporation 273,778 489,771 0.5
Gaming 40,000 Circus Circus
Enterprises, Inc. 963,565 722,500 0.7
40,000 Harrah's Entertainment, Inc. 765,713 1,042,500 1.1
----------- ----------- ------
1,729,278 1,765,000 1.8
Health Care 17,500 Aetna Inc. 1,315,639 1,414,219 1.4
Services 45,000 Columbia/HCA Healthcare
Corporation 1,398,834 1,482,188 1.5
60,000 Humana, Inc. 1,171,635 1,620,000 1.7
----------- ----------- ------
3,886,108 4,516,407 4.6
Household Products 30,000 Black & Decker Corp. 1,004,613 1,548,750 1.6
20,000 Whirlpool Corporation 1,085,682 1,440,000 1.5
----------- ----------- ------
2,090,295 2,988,750 3.1
Information 25,000 Digital Equipment
Processing Corporation 877,863 1,390,625 1.4
22,000 International Business
Machines Corp. 1,309,275 2,549,250 2.6
----------- ----------- ------
2,187,138 3,939,875 4.0
</TABLE>
Merrill Lynch Asset Builder Program, Inc., April 30, 1998
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<CAPTION>
Fundamental Value Portfolio (concluded)
NORTH AMERICA Shares Percent of
(concluded) Industries Held Investments Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
United States Insurance 65,000 TIG Holdings, Inc. $ 1,861,887 $ 1,564,063 1.6%
(concluded)
Machinery 50,000 ITT Industries Inc. 1,177,983 1,821,875 1.9
Medical Services 85,000 Pharmaceutical Product
Development, Inc. 1,388,032 2,130,313 2.2
Metals--Non-Ferrous 45,000 ASARCO Inc. 1,240,590 1,122,188 1.2
Metals--Precious 50,000 Newmont Mining Corporation 1,531,457 1,609,375 1.6
Natural Gas 25,000 Enron Corp. 946,834 1,229,688 1.3
Oil--Domestic 72,000 Occidental Petroleum Corp. 1,664,031 2,119,500 2.2
20,000 Sun Company, Inc. 623,938 808,750 0.8
----------- ----------- ------
2,287,969 2,928,250 3.0
Oil--International 25,000 Exxon Corporation 1,524,560 1,823,437 1.9
Oil Services 20,000 Diamond Offshore
Drilling, Inc. 971,400 1,012,500 1.0
30,000 Dresser Industries, Inc. 927,909 1,586,250 1.6
----------- ----------- ------
1,899,309 2,598,750 2.6
Packaging 25,000 Crown Cork & Seal
Company, Inc. 1,184,042 1,301,562 1.3
Paper & Forest 25,000 International Paper Co. 989,942 1,304,687 1.3
Products 30,000 Kimberly-Clark Corporation 1,481,123 1,522,500 1.6
70,000 Louisiana-Pacific Corp. 1,551,112 1,531,250 1.6
----------- ----------- ------
4,022,177 4,358,437 4.5
Pharmaceuticals 11,000 Bristol-Myers Squibb Co. 421,102 1,164,625 1.2
40,000 Pharmacia & Upjohn, Inc. 1,326,355 1,682,500 1.7
----------- ----------- ------
1,747,457 2,847,125 2.9
Photography 25,000 Eastman Kodak Co. 1,765,546 1,804,687 1.8
Publishing/ 27,500 Dow Jones & Company, Inc. 1,021,761 1,338,906 1.4
Newspapers
Railroads 40,000 Union Pacific Corporation 2,306,781 2,190,000 2.2
Real Estate 12,100 Pennsylvania Real
Investment Trusts Estate Investment Trust 271,253 287,375 0.3
Retail 120,000 Kmart Corporation 1,328,180 2,092,500 2.2
25,000 Sears, Roebuck & Co. 1,121,527 1,482,812 1.5
45,000 Toys 'R' Us, Inc. 1,178,997 1,240,312 1.3
40,000 Woolworth Corp. 560,713 920,000 0.9
----------- ----------- ------
4,189,417 5,735,624 5.9
Semiconductors 23,000 Motorola, Inc. 1,264,744 1,279,375 1.3
20,000 Texas Instruments Inc. 877,717 1,281,250 1.3
----------- ----------- ------
2,142,461 2,560,625 2.6
Steel 40,000 USX-US Steel Group, Inc. 1,147,077 1,565,000 1.6
100,000 WHX Corp. 902,908 1,568,750 1.6
----------- ----------- ------
2,049,985 3,133,750 3.2
Technology 70,000 Exabyte Corp. 889,435 800,625 0.8
Telecommunications 30,000 AT&T Corp. 1,067,987 1,801,875 1.8
35,000 GTE Corp. 1,555,539 2,045,312 2.1
----------- ----------- ------
2,623,526 3,847,187 3.9
Total Investments in
North America 66,296,606 83,286,021 85.4
WESTERN
EUROPE
Netherlands Oil--International 25,000 Royal Dutch Petroleum
Company (NY Registered
Shares) 1,378,731 1,414,062 1.5
Total Investments in
Western Europe 1,378,731 1,414,062 1.5
SHORT-TERM Face
SECURITIES Amount Issue
Commercial US$ 2,000,000 Countrywide Home Loans, Inc.,
Paper* 5.54% due 5/08/1998 1,997,846 1,997,846 2.0
2,120,000 General Electric Capital Corp.,
5.56% due 5/01/1998 2,120,000 2,120,000 2.2
3,000,000 Park Avenue Receivables Corp.,
5.53% due 5/05/1998 2,998,157 2,998,157 3.1
US Government 4,000,000 Federal Home Loan Mortgage
Agency Corp., 5.42% due 5/13/1998 3,992,773 3,992,773 4.1
Obligations*
Total Investments in
Short-Term Securities 11,108,776 11,108,776 11.4
Total Investments $80,280,224 97,805,734 100.3
===========
Liabilities in Excess of Other Assets (277,415) (0.3)
----------- ------
Net Assets $97,528,319 100.0%
=========== ======
Net Asset Value: Class A--Based on net assets of $395,747
and 24,744 shares outstanding $ 15.99
===========
Class B--Based on net assets of $61,097,316
and 3,894,680 shares outstanding $ 15.69
===========
Class C--Based on net assets of $29,531,248
and 1,883,132 shares outstanding $ 15.68
===========
Class D--Based on net assets of $6,504,008
and 408,063 shares outstanding $ 15.94
===========
<FN>
*Commercial Paper and certain US Government Agency Obligations are
traded on a discount basis; the interest rates shown are the rates
paid at the time of purchase by the Portfolio.
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (in US dollars)
<CAPTION>
Global Opportunity Portfolio
Face Percent of
COUNTRY Amount Foreign Government Obligations Cost Value Net Assets
<S> <C> <S> <C> <C> <C>
Denmark Dkr 5,100,000 Danish Government Bonds, 7%
due 11/15/2007 $ 814,777 $ 841,229 1.2%
Germany Bundesrepublik Deutschland:
DM 850,000 6.50% due 10/14/2005 547,951 520,234 0.8
1,150,000 6% due 7/04/2007 672,594 687,628 1.0
850,000 6% due 6/20/2016 472,899 512,274 0.8
800,000 5.625% due 1/04/2028 442,422 451,148 0.7
800,000 Treuhandanstalt, 6.875% due
6/11/2003 532,016 489,365 0.7
----------- ----------- ------
2,667,882 2,660,649 4.0
</TABLE>
Merrill Lynch Asset Builder Program, Inc., April 30, 1998
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Global Opportunity Portfolio (continued)
Face Percent of
COUNTRY Amount Foreign Government Obligations Cost Value Net Assets
<S> <C> <S> <C> <C> <C>
Sweden Government of Sweden:
Skr 15,400,000 5.50% due 4/12/2002 $ 1,956,294 $ 2,021,689 3.0%
5,800,000 8% due 8/15/2007 879,521 892,952 1.3
----------- ----------- ------
2,835,815 2,914,641 4.3
United Kingdom Pound 750,000 UK Treasury Gilt, 7.25%
Sterling due 12/07/2007 1,241,406 1,382,326 2.1
Total Investments in
Foreign Government Obligations 7,559,880 7,798,845 11.6
US Government Obligations
United States US Treasury Notes and Bonds:
US$ 2,150,000 6% due 8/15/1999 2,153,820 2,161,094 3.2
800,000 6.50% due 5/31/2002 805,375 823,624 1.2
425,000 6.25% due 2/15/2007 428,387 439,276 0.7
635,000 6.625% due 5/15/2007 642,934 673,297 1.0
1,980,000 6.625% due 2/15/2027 2,116,409 2,143,033 3.2
Total Investments in US
Government Obligations 6,146,925 6,240,324 9.3
Total Investments in Foreign
& US Government Obligations 13,706,805 14,039,169 20.9
Shares
Industries Held US Stocks
United States Aerospace & Defense 6,600 AlliedSignal, Inc. 265,008 289,163 0.4
6,000 GenCorp, Inc. 169,941 182,625 0.3
1,700 Orbital Sciences Corporation 43,804 75,438 0.1
----------- ----------- ------
478,753 547,226 0.8
Airlines 4,320 US Airways Group Inc. 193,108 307,260 0.5
Auto--Related 5,400 Hertz Corporation (Class A) 204,171 221,400 0.3
Automobile Parts 7,900 Federal-Mogul Corporation 314,568 511,031 0.8
Automotive & 8,400 Avis Rent A Car, Inc. 199,607 219,975 0.3
Equipment
Banking 7,000 Bank of New York Company,
Inc. (The) 225,778 413,438 0.6
3,540 BankAmerica Corp. 220,662 300,900 0.5
----------- ----------- ------
446,440 714,338 1.1
Banking & Financial 7,200 First Union Corporation 355,784 434,700 0.6
Broadcasting/Cable 10,500 Tele-Communications, Inc.
(Class A) 216,332 338,625 0.5
17,550 Tele-Communications TCI
Ventures Group (Class A) 180,083 286,284 0.4
----------- ----------- ------
396,415 624,909 0.9
Broadcasting/Radio 7,500 Chancellor Media Corp. 243,688 355,313 0.5
Chemicals 11,000 Great Lakes Chemical
Corporation 542,678 552,750 0.8
Commercial Services 16,450 Gartner Group, Inc. (Class A) 554,856 543,878 0.8
Communication 12,100 WorldCom, Inc. 346,092 517,275 0.8
Equipment
Computer Products 6,580 Cisco Systems, Inc. 425,240 481,985 0.7
Computer Sales 9,400 International Business
Machines Corp. 974,545 1,089,225 1.6
Computer Software 7,000 BMC Software, Inc. 465,190 654,500 1.0
3,900 Microsoft Corporation 257,223 351,488 0.5
----------- ----------- ------
722,413 1,005,988 1.5
Computers 26,500 COMPAQ Computer Corp. 789,818 743,656 1.1
Conglomerates 14,400 Dial Corporation (The) 288,578 351,000 0.5
Containers 11,000 Owens-Illinois, Inc. 337,376 435,188 0.7
Cosmetics 2,700 Gillette Company (The) 308,900 311,681 0.5
Electrical Equipment 5,500 General Electric Company 399,678 468,188 0.7
3,400 Public Service Enterprise
Group, Inc. 107,444 114,113 0.2
----------- ----------- ------
507,122 582,301 0.9
Electronics 1,500 Intel Corporation 121,875 121,219 0.2
1,900 Texas Instruments Inc. 121,239 121,719 0.2
----------- ----------- ------
243,114 242,938 0.4
Entertainment 10,400 Premier Parks Inc. 587,868 578,500 0.9
5,400 Royal Caribbean Cruises Ltd. 251,400 369,225 0.6
2,400 Walt Disney Company 264,293 298,350 0.4
----------- ----------- ------
1,103,561 1,246,075 1.9
Financial Services 5,900 Providian Financial
Corporation 376,331 355,106 0.5
Food 5,600 Keebler Foods Company 158,217 159,600 0.2
Hardware Products 5,400 Black & Decker Corp. 189,784 278,775 0.4
Health Care 18,701 HEALTHSOUTH Corporation 496,934 564,536 0.8
Healthcare--Products 8,400 Columbia/HCA Healthcare
& Services Corporation 265,587 276,675 0.4
Industrials 21,000 COMSAT Corporation 728,686 847,875 1.3
Information 10,370 Computer Associates
Processing International, Inc. 505,745 607,293 0.9
Insurance 9,400 Allmerica Financial
Corporation 578,254 588,675 0.9
7,700 Equitable Companies Inc. (The) 403,524 472,588 0.7
6,087 Travelers Group Inc. 269,107 372,448 0.5
2,200 UNUM Corporation 82,080 118,250 0.2
----------- ----------- ------
1,332,965 1,551,961 2.3
Leisure & Tourism 6,800 Carnival Corporation
(Class A) 232,011 473,025 0.7
Machinery 8,000 Ingersoll-Rand Company 265,166 368,500 0.6
Machinery & 1,400 SPX Corporation 82,060 101,325 0.2
Machine Tools
Manufacturing 5,200 Tyco International Ltd. 268,961 283,400 0.4
Medical Specialties 2,200 Warner-Lambert Company 303,132 416,213 0.6
Natural Gas 12,200 El Paso Natural Gas Co. 320,972 450,638 0.7
3,500 Enron Corp. 135,477 172,156 0.2
----------- ----------- ------
456,449 622,794 0.9
Office Equipment 3,200 Danka Business Systems
PLC (ADR)*++ 157,610 64,000 0.1
Oil & Gas Producers 1,800 Smith International, Inc. 103,160 105,750 0.2
</TABLE>
Merrill Lynch Asset Builder Program, Inc., April 30, 1998
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Global Opportunity Portfolio (continued)
Shares Percent of
COUNTRY Industries Held US Stocks Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
United States Oil Service 2,500 Schlumberger Ltd. $ 168,095 $ 207,188 0.3%
(concluded)
Pharmaceutical-- 3,250 Bristol-Myers Squibb Co. 309,159 344,094 0.5
Diversified
Petroleum 7,500 Unocal Corp. 270,534 307,031 0.5
Railroads 3,250 Burlington Northern
Santa Fe Corp. 282,557 321,750 0.5
Real Estate 3,500 Starwood Hotels & Resorts 161,591 175,656 0.3
Investment Trusts
Retail 8,700 Safeway, Inc. 255,835 332,775 0.5
Retail--Drug Stores 13,110 Rite Aid Corporation 277,637 421,159 0.6
Retail--Specialty 3,100 Lowe's Companies, Inc. 222,255 216,806 0.3
Retail Stores 7,900 Wal-Mart Stores, Inc. 325,700 399,444 0.6
Retail Trade 9,140 Sears, Roebuck & Co. 456,909 542,116 0.8
Telecommunications 2,500 Globalstar Telecommuni-
cations Ltd. 148,260 173,125 0.2
5,400 SmarTalk Teleservices, Inc. 148,769 107,325 0.2
------------ ------------ ------
297,029 280,450 0.4
Waste Management 9,450 USA Waste Services, Inc. 394,339 463,641 0.7
Total Investments in
US Stocks 19,321,265 23,129,030 34.5
Foreign Stocks
Argentina Petroleum 21,700 Yacimientos Petroliferos
Fiscales S.A. (ADR)* 656,399 756,788 1.1
Total Stocks in Argentina 656,399 756,788 1.1
Australia Diversified 50,200 Broken Hill Proprietary
Resources Co., Ltd. 660,237 490,580 0.7
Total Stocks in Australia 660,237 490,580 0.7
Bahamas Hotels & Casinos 10,100 Sun International Hotels Ltd. 413,120 463,969 0.7
Total Stocks in the Bahamas 413,120 463,969 0.7
Canada Automotive Parts 10,600 Magna International, Inc.
(Class A) 584,766 790,362 1.2
Beverages 3,600 Seagram Co., Ltd. (The) 154,603 153,675 0.2
Entertainment 13,200 Imax Corp. 210,684 354,750 0.5
Total Stocks in Canada 950,053 1,298,787 1.9
Finland Holding Company 17,000 Amer Group Ltd. 306,406 348,118 0.5
Insurance 5,700 Sampo Insurance Co. Ltd. 263,633 257,521 0.4
Paper & Forest 24,000 UPM-Kymmene Corp. 500,294 720,661 1.1
Products
Pharmaceuticals 13,720 Orion-yhtyma OY (Class B) 372,233 425,837 0.6
Transportation 10,800 Finnlines OY 211,570 575,207 0.9
Total Stocks in Finland 1,654,136 2,327,344 3.5
France Electronics 16,900 Thomson-CSF S.A. 578,105 668,928 1.0
Insurance 4,800 Axa-UAP (New) 546,390 563,588 0.8
10,300 Scor S.A. 404,903 635,174 1.0
------------ ------------ ------
951,293 1,198,762 1.8
Oil & Related 5,600 Elf Aquitaine S.A. 663,726 734,820 1.1
Semiconductor 8,000 SGS-Thomson Microelectronics
Capital Equipment N.V. (NY Registered Shares) 438,486 676,000 1.0
Total Stocks in France 2,631,610 3,278,510 4.9
Germany Auto & Truck 6,600 Daimler-Benz AG 647,906 644,548 0.9
Banking 8,600 Bayerische Vereinsbank AG 554,936 654,348 1.0
Chemicals 600 Henkel KGaA 26,670 41,973 0.1
6,900 Henkel KGaA (Preferred) 340,999 538,462 0.8
------------ ------------ ------
367,669 580,435 0.9
Machinery & 1,050 Mannesmann AG 385,889 833,445 1.2
Equipment
Total Stocks in Germany 1,956,400 2,712,776 4.0
Indonesia Telecommunications 24,500 P.T. Indonesian Satellite
Corp. (ADR)* 603,664 346,062 0.5
Total Stocks in Indonesia 603,664 346,062 0.5
Italy Machinery 71,000 Danieli & Co. 266,366 376,902 0.6
71,000 Danieli & Co. (Rights)(a) 29,061 18,965 0.0
------------ ------------ ------
295,427 395,867 0.6
Publishing 57,000 Mondadori (Arnoldo)
Editore S.p.A. 431,458 643,956 1.0
Total Stocks in Italy 726,885 1,039,823 1.6
Japan Banking & Financial 28,000 Bank of Tokyo--Mitsubishi,
Ltd. 425,197 347,561 0.5
Building Products 39,000 Matsushita Electric
Works, Ltd. 427,436 351,484 0.5
Computers 4,000 Tokyo Electron Limited 158,438 157,528 0.3
Consumer-- 4,000 Rohm Company Ltd. 262,940 452,590 0.7
Electronics
Consumer-- 5,300 Amway Japan Ltd. 139,392 74,258 0.1
Miscellaneous
Electrical Equipment 5,000 Sony Corporation 367,054 416,919 0.6
Electronics 26,000 Matsushita Electric
Industrial Co., Ltd. 421,498 417,449 0.6
Insurance 47,000 Tokio Marine & Fire
Insurance Co., Ltd. 500,861 512,572 0.8
Machinery 61,000 Makino Milling Machine
Co., Ltd. 435,284 419,941 0.6
Retail Stores 8,000 Ito--Yokado Co., Ltd. 439,407 415,026 0.6
Total Stocks in Japan 3,577,507 3,565,328 5.3
Mexico Beverages 11,750 Panamerican Beverages,
Inc. (Class A) 365,477 468,531 0.7
Conglomerates 36,400 Grupo Carso, S.A. de
C.V. (ADR)* 433,900 444,444 0.7
Financial Services 37,000 Grupo Financiero Bancomer,
S.A. de C.V. (Class B)(ADR)* 476,906 510,792 0.8
Utilities-- 10,100 Telefonos de Mexico, S.A.
Communications de C.V. (Telmex)(ADR)* 499,035 571,912 0.8
Total Stocks in Mexico 1,775,318 1,995,679 3.0
</TABLE>
Merrill Lynch Asset Builder Program, Inc., April 30, 1998
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<CAPTION>
Global Opportunity Portfolio (concluded)
Shares Percent of
COUNTRY Industries Held US Stocks Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
Netherlands Oil--International 9,700 Royal Dutch Petroleum
Company (NY Registered
Shares) $ 537,314 $ 548,656 0.8%
Total Stocks in the
Netherlands 537,314 548,656 0.8
Norway Transportation 57,089 Color Line ASA 221,108 199,055 0.3
Services
Total Stocks in Norway 221,108 199,055 0.3
Singapore Banking 21,000 Oversea-Chinese Banking
Corp. Ltd. 'Foreign' 111,968 110,701 0.2
Total Stocks in Singapore 111,968 110,701 0.2
South Africa Diversified 49,700 Sasol Limited 561,460 501,424 0.8
Total Stocks in South Africa 561,460 501,424 0.8
South Korea Engineering & 3,874 Hyundai Engineering &
Construction Construction Co., Ltd. (GDR)** 49,727 2,034 0.0
871 Hyundai Engineering &
Construction Co., Ltd. (Rights)
(GDR)**(b) 0 0 0.0
Total Stocks in South Korea 49,727 2,034 0.0
Spain Diversified 12,200 Dinamia S.A. 229,278 208,150 0.3
Petroleum 10,600 Repsol S.A. (ADR)* 401,272 579,687 0.9
Total Stocks in Spain 630,550 787,837 1.2
Sweden Auto & Truck 8,800 Autoliv AB 285,516 267,311 0.4
Banking 105,500 Nordbanken Holding AB 639,448 777,310 1.1
16,200 Sparbanken Sverige AB
(Class A) 207,538 512,512 0.8
------------ ------------ ------
846,986 1,289,822 1.9
Chemicals 17,000 Perstorp AB (Class B) 318,484 325,220 0.5
Diversified 4,600 Custos AB (A Shares) 118,477 120,109 0.2
Companies 4,600 Custos AB (B Shares) 121,232 118,920 0.1
------------ ------------ ------
239,709 239,029 0.3
Electronics 9,000 Spectra-Physics AB (Class A) 274,607 173,339 0.3
Investment 20,300 Bure Investment AB 192,973 318,815 0.5
Management
Real Estate 24,200 Castellum AB 211,107 287,786 0.4
Total Stocks in Sweden 2,369,382 2,901,322 4.3
Switzerland Banking & Financial 180 UBS 288,158 290,017 0.4
Pharmaceuticals 64 Roche Holding AG 565,734 648,963 1.0
Total Stocks in Switzerland 853,892 938,980 1.4
United Kingdom Aerospace & 20,900 British Aerospace PLC 638,019 697,696 1.0
Defense
Automobile Parts 154,400 LucasVarity PLC 520,566 689,429 1.0
Beverages 41,904 Diageo PLC 354,594 498,494 0.7
Chemicals 1,700 Imperial Chemical
Industries PLC 19,556 30,846 0.1
7,500 Imperial Chemical
Industries PLC (ADR)* 389,042 545,156 0.8
------------ ------------ ------
408,598 576,002 0.9
Foods 40,200 Devro PLC 289,780 364,712 0.6
Retail Trade 49,000 Dixons Group PLC 474,763 467,473 0.7
Total Stocks in the
United Kingdom 2,686,320 3,293,806 4.9
Total Investments in
Foreign Stocks 23,627,050 27,559,461 41.1
Total Investments in
US & Foreign Stocks 42,948,315 50,688,491 75.6
SHORT-TERM Face
SECURITIES Amount Issue
Commercial US$ 1,573,000 General Motors Acceptance
Paper*** Corp., 5.56% due 5/01/1998 1,573,000 1,573,000 2.3
Total Investments in
Short-Term Securities 1,573,000 1,573,000 2.3
Total Investments $58,228,120 66,300,660 98.8
===========
Unrealized Depreciation on Forward Foreign Exchange Contracts++++ (41,975) (0.1)
Other Assets Less Liabilities 840,719 1.3
----------- ------
Net Assets $67,099,404 100.0%
=========== ======
Net Asset Value: Class A--Based on net assets of $193,408
and 15,624 shares outstanding $ 12.38
===========
Class B--Based on net assets of $45,532,496
and 3,718,969 shares outstanding $ 12.24
===========
Class C--Based on net assets of $17,954,513
and 1,469,320 shares outstanding $ 12.22
===========
Class D--Based on net assets of $3,418,987
and 276,681 shares outstanding $ 12.36
===========
<FN>
(a)The rights may be exercised until 5/11/1998.
(b)The rights may be exercised until 5/01/1998.
*American Depositary Receipts (ADR).
**Global Depositary Receipts (GDR).
***Commercial Paper is traded on a discount basis; the interest rate
shown is the discount rate paid at the time of purchase by the
Portfolio.
++Consistent with the general policy of the Securities and Exchange
Commission, the nationality or domicile of an issuer for
determination of foreign issuer status may be (i) the country under
whose laws the issuer is organized, (ii) the country in which the
issuer's securities are principally traded, or (iii) the country in
which the issuer derives a significant proportion (at least 50%) of
its revenue or profits from goods produced and sold, investments
made, or services performed in the country, or in which at least 50%
of the assets of the issuer are situated.
++++Forward foreign exchange contracts sold as of April 30, 1998
were as follows:
Unrealized
Foreign Expiration Appreciation
Currency Sold Date (Depreciation)
A$ 770,000 May 1998 $ (1,987)
C$ 1,413,000 May 1998 12,359
Chf 970,000 July 1998 3,691
Dkr 5,900,000 May 1998 (3,887)
DM 1,350,000 May 1998 (7,923)
DM 9,350,000 July 1998 (22,881)
Fmk 12,100,000 May 1998 (12,016)
Frf 17,275,000 July 1998 (16,094)
Pound Sterling 2,800,000 May 1998 20,250
Lit 3,050,000,000 May 1998 (5,999)
Pta 121,500,000 May 1998 (2,083)
Skr 43,850,000 May 1998 (22,449)
YEN 460,000,000 May 1998 17,044
----------
Total Unrealized Depreciation on Forward
Foreign Exchange Contracts Sold--Net
(US$ Commitment--$30,417,832) $ (41,975)
==========
</TABLE>
Merrill Lynch Asset Builder Program, Inc., April 30, 1998
<TABLE>
SCHEDULE OF INVESTMENTS (in US dollars)
<CAPTION>
Growth Opportunity Portfolio
Shares Percent of
Industries Held Common Stocks Cost Value Net Assets
<S> <C> <S> <C> <C> <C>
Advertising 10,000 Interpublic Group of
Companies, Inc. $ 455,324 $ 638,750 1.0%
Banking & Financial 19,800 Banc One Corp. 921,491 1,164,488 1.8
5,000 BankAmerica Corp. 355,782 425,000 0.7
3,000 Citicorp 390,860 451,500 0.7
15,000 Mellon Bank Corporation 833,523 1,080,000 1.7
12,000 State Street Corp. 594,654 858,000 1.3
----------- ----------- ------
3,096,310 3,978,988 6.2
Beverages 4,000 Coca-Cola Company (The) 242,115 303,500 0.5
Broadcasting--Radio 12,000 Chancellor Media Corp. 568,088 568,500 0.9
& Television 7,000 Clear Channel
Communications, Inc. 588,900 659,750 1.0
----------- ----------- ------
1,156,988 1,228,250 1.9
Communication 24,000 Cisco Systems, Inc. 1,488,667 1,758,000 2.7
Equipment 32,000 FORE Systems, Inc. 708,777 730,000 1.1
8,000 Lucent Technologies, Inc. 284,483 609,000 0.9
14,500 Newbridge Networks Corp. 614,672 425,031 0.7
5,000 Northern Telecom Limited 246,980 304,375 0.5
6,000 Telefonaktiebolaget LM
Ericsson (ADR)* 245,869 307,875 0.5
----------- ----------- ------
3,589,448 4,134,281 6.4
Computers 53,000 COMPAQ Computer Corp. 1,198,549 1,487,313 2.3
8,000 Dell Computer Corporation 517,431 645,500 1.0
10,000 Hewlett-Packard Co. 677,888 753,125 1.2
----------- ----------- ------
2,393,868 2,885,938 4.5
Cosmetics 7,000 Gillette Company (The) 601,649 808,063 1.3
1,500 International Flavors &
Fragrances, Inc. 66,303 73,406 0.1
----------- ----------- ------
667,952 881,469 1.4
Electrical 2,000 Emerson Electric Company 108,040 127,250 0.2
Equipment 26,000 General Electric Company 1,673,626 2,213,250 3.4
1,000 Honeywell, Inc. 74,816 93,125 0.2
----------- ----------- ------
1,856,482 2,433,625 3.8
Electronics 20,000 Intel Corporation 1,553,956 1,616,250 2.5
3,500 SGS-Thomson Microelectronics
N.V. (NY Registered Shares) 248,832 295,750 0.5
16,000 Texas Instruments Inc. 933,960 1,025,000 1.6
----------- ----------- ------
2,736,748 2,937,000 4.6
Energy 10,000 El Paso Natural Gas Co. 268,430 369,375 0.5
5,000 Enron Corp. 208,459 245,938 0.4
----------- ----------- ------
476,889 615,313 0.9
Entertainment 7,000 Viacom, Inc. (Class A) 260,391 404,250 0.6
15,000 Walt Disney Company 1,477,489 1,864,688 2.9
----------- ----------- ------
1,737,880 2,268,938 3.5
Financial Services 2,500 American Express Company 221,681 255,000 0.4
5,000 Federal National Mortgage
Association 279,616 299,375 0.5
10,000 Franklin Resources, Inc. 546,808 535,000 0.8
14,000 Morgan Stanley, Dean Witter,
Discover and Co. 885,329 1,104,250 1.7
9,000 Travelers Group, Inc. (The) 447,747 550,687 0.9
----------- ----------- ------
2,381,181 2,744,312 4.3
Food 2,000 ConAgra, Inc. 47,060 58,375 0.1
4,000 Wrigley (Wm.) Jr. Co. 288,597 356,000 0.5
----------- ----------- ------
335,657 414,375 0.6
Food Merchandising 6,000 Albertsons, Inc. 224,912 300,000 0.4
11,000 Meyer (Fred), Inc. 242,328 493,625 0.8
----------- ----------- ------
467,240 793,625 1.2
Home Furnishings 18,000 Ethan Allen Interiors, Inc. 971,837 916,875 1.4
Hotels 8,000 Marriott International, Inc. 294,415 264,000 0.4
1,000 Marriott International,
Inc. (Class A) 11,213 32,000 0.1
----------- ----------- ------
305,628 296,000 0.5
Household Products 7,000 Colgate-Palmolive Co. 565,005 627,812 1.0
6,000 Kimberly-Clark Corporation 280,503 304,500 0.5
20,000 Procter & Gamble Company 1,485,044 1,643,750 2.5
8,000 Unilever N.V. (NY Registered
Shares) 519,051 597,000 0.9
----------- ----------- ------
2,849,603 3,173,062 4.9
Information 27,000 First Data Corp. 961,514 914,625 1.4
Processing
Insurance 1,000 Aetna Inc. 82,249 80,812 0.1
9,000 American International
Group, Inc. 928,860 1,184,062 1.9
----------- ----------- ------
1,011,109 1,264,874 2.0
Leisure 14,000 Polygram N.V. (NY
Registered Shares) 734,358 606,375 0.9
Medical Technology 8,300 Boston Scientific Corp. 470,698 600,194 0.9
9,000 Guidant Corporation 594,452 601,875 1.0
1,000 Johnson & Johnson 66,560 71,375 0.1
----------- ----------- ------
1,131,710 1,273,444 2.0
Oil Services 10,000 Baker Hughes, Inc. 399,621 405,000 0.6
9,000 Diamond Offshore
Drilling, Inc. 462,790 455,625 0.7
5,000 Schlumberger Ltd. 292,524 414,375 0.7
----------- ----------- ------
1,154,935 1,275,000 2.0
Pharmaceuticals 2,000 Amgen, Inc. 131,750 119,125 0.2
10,000 Bristol-Myers Squibb Co. 881,987 1,058,750 1.7
15,000 Merck & Co., Inc. 1,569,445 1,807,500 2.8
20,000 Pfizer, Incorporated 1,623,087 2,276,250 3.5
----------- ----------- ------
4,206,269 5,261,625 8.2
Photography 2,000 Eastman Kodak Co. 141,535 144,375 0.2
Pollution Control 500 Waste Management, Inc. 14,160 16,750 0.0
Restaurants 3,000 McDonald's Corp. 142,703 185,625 0.3
</TABLE>
Merrill Lynch Asset Builder Program, Inc., April 30, 1998
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<CAPTION>
Growth Opportunity Portfolio (concluded)
Shares Percent of
Industries Held Common Stocks Cost Value Net Assets
<S> <C> <S> <C> <C> <C>
Retail--Specialty 11,000 CVS Corporation $ 722,362 $ 811,250 1.3%
11,000 Gap Inc. 444,363 565,813 0.9
50,000 Staples, Inc. 929,565 1,234,375 1.9
30,000 Walgreen Co. 971,102 1,035,000 1.6
----------- ----------- ------
3,067,392 3,646,438 5.7
Retail Stores 14,000 Federated Department
Stores, Inc. 694,979 688,625 1.1
44,000 Wal-Mart Stores, Inc. 1,783,197 2,224,750 3.4
----------- ----------- ------
2,478,176 2,913,375 4.5
Semiconductors 18,000 Applied Materials, Inc. 664,030 650,250 1.0
Software--Computer 33,000 Baan Company, N.V. 1,051,762 1,460,250 2.3
20,000 Microsoft Corporation 1,681,562 1,802,500 2.8
27,000 PeopleSoft, Inc. 1,239,063 1,253,812 2.0
11,000 SAP AG (Systeme,
Anwendungen, Produkte in der
Datenverarbeitung) (ADR)* 783,324 1,826,910 2.8
----------- ----------- ------
4,755,711 6,343,472 9.9
Telecommunications 22,000 AT&T Corp. 1,435,871 1,321,375 2.1
22,000 Sprint Corporation 1,377,364 1,502,875 2.3
----------- ----------- ------
2,813,235 2,824,250 4.4
Toys 13,000 Mattel, Inc. 487,161 498,062 0.8
Travel & Lodging 12,000 Carnival Corporation
(Class A) 672,036 834,750 1.3
Total Investments in
Common Stocks 50,157,184 59,297,591 92.2
Face
Amount Short-Term Securities
Commercial $2,074,000 General Motors Acceptance
Paper** Corp., 5.56% due 5/01/1998 2,074,000 2,074,000 3.2
2,500,000 Lexington Parker Capital
Company, LLC, 5.53% due
5/29/1998 2,489,247 2,489,247 3.9
Total Investments in
Short-Term Securities 4,563,247 4,563,247 7.1
Total Investments $54,720,431 63,860,838 99.3
===========
Other Assets Less Liabilities 468,234 0.7
----------- ------
Net Assets $64,329,072 100.0%
=========== ======
Net Asset Value: Class A--Based on net assets of $347,143
and 22,514 shares outstanding $ 15.42
===========
Class B--Based on net assets of $40,110,448
and 2,638,240 shares outstanding $ 15.20
===========
Class C--Based on net assets of $21,606,841
and 1,422,520 shares outstanding $ 15.19
===========
Class D--Based on net assets of $2,264,640
and 147,035 shares outstanding $ 15.40
===========
<FN>
*American Depositary Receipts (ADR).
**Commercial Paper is traded on a discount basis; the interest rates
shown are the discount rates paid at the time of purchase by the
Fund.
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (in US dollars)
<CAPTION>
Quality Bond Portfolio
S&P Moody's Face
INDUSTRIES Ratings Ratings Amount Bonds & Notes Cost Value
<S> <S> <S> <C> <S> <C> <C>
Asset-Backed AAA Aaa $ 90,270 Arcadia Automobile Receivables Trust,
Securities--0.8% 6.10% due 6/15/2000 (a) $ 90,253 $ 90,419
Banking--17.7% A A2 250,000 Bank of New York Company, Inc. (The),
7.875% due 11/15/2002 276,675 266,548
A+ Aa3 250,000 BankAmerica Corp., 6.65% due 5/01/2001 249,863 253,795
A- aa3 300,000 Chase Capital II, 6.152% due 2/01/2027 289,575 293,721
BBB+ Baa1 250,000 MBNA American Bank N.A., 5.987% due 6/10/2004 246,142 245,398
A- A3 250,000 Mellon Financial Co., 6.375% due 2/15/2010 251,010 246,223
A A1 300,000 NationsBank Corp., 6.50% due 8/15/2003 308,325 302,547
AA- Aa3 250,000 Norwest Corporation, 6.75% due 5/12/2000 249,628 253,680
A- A2 200,000 Wells Fargo & Company, 8.375% due 5/15/2002 213,120 214,308
----------- -----------
2,084,338 2,076,220
Financial A A2 200,000 Bear Stearns Companies, Inc., 6.75%
Services-- due 8/15/2000 198,730 202,718
12.8% BBB- Baa2 100,000 Commercial Net Lease Realty, 7.125%
due 3/15/2008 99,729 98,987
A- A3 38,000 Donaldson, Lufkin & Jenrette Inc.,
6.875% due 11/01/2005 37,694 38,695
BBB- Baa3 150,000 Hospitality Properties Trust, 7%
due 3/01/2008 149,730 148,100
AA Aa2 200,000 MBIA, Inc., 7.15% due 7/15/2027 199,510 207,886
A+ A1 300,000 Morgan Stanley Group Inc., 6.875%
due 3/01/2007 298,923 308,247
A A2 150,000 Salomon Smith Barney Holdings, Inc.,
7.375% due 5/15/2007 149,867 159,069
A+ aa3 100,000 Travelers Capital II, 7.75% due 12/01/2036 100,170 104,073
AA- Aa3 200,000 Travelers Group, Inc. (The), 7.875%
due 5/15/2025 205,616 225,980
----------- -----------
1,439,969 1,493,755
Financial A A2 250,000 Beneficial Corporation, 6.80% due 9/16/2003 250,000 254,834
Services-- A aa3 150,000 CIT Capital Trust I, 7.70% due 2/15/2027 149,316 153,493
Consumer--3.5% ----------- -----------
399,316 408,327
Industrial-- A+ A1 100,000 Anheuser-Busch Cos., Inc., 8.75%
Consumer Goods-- due 12/01/1999 107,905 104,083
9.0% AA- Aa3 250,000 Archer-Daniels-Midland Co., 8.375% due
4/15/2017 303,008 295,963
A A1 100,000 Bass America, Inc., 8.125% due 3/31/2002 105,928 106,453
BBB- Baa3 250,000 Flowers Industries, Inc., 7.15% due 4/15/2028 248,675 248,298
A A1 80,000 PepsiCo, Inc., 5.75% due 1/02/2003 79,595 79,127
AA Aa2 200,000 Wal-Mart Stores, Inc., 8.50% due 9/15/2024 207,350 220,182
----------- -----------
1,052,461 1,054,106
Industrial-- AA Aa2 175,000 BP America Inc., 9.375% due 11/01/2000 200,263 188,379
Energy--6.3% AA- A1 300,000 Consolidated Natural Gas Company,
6.80% due 12/15/2027 297,570 304,776
BBB Baa2 250,000 Occidental Petroleum Corp., 6.50%
due 4/01/2005 248,575 248,777
----------- -----------
746,408 741,932
</TABLE>
Merrill Lynch Asset Builder Program, Inc., April 30, 1998
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<CAPTION>
Quality Bond Portfolio (concluded)
S&P Moody's Face
INDUSTRIES Ratings Ratings Amount Bonds & Notes Cost Value
<S> <S> <S> <C> <S> <C> <C>
Industrial-- A A2 $ 200,000 AlliedSignal Inc., 6.20% due 2/01/2008 $ 199,732 $ 198,688
Manufacturing-- BBB+ A3 200,000 Applied Materials Inc., 6.75% due
10.6% 10/15/2007 199,870 200,994
AA- Aa3 200,000 duPont (E.I.) de Nemours & Co., 6.75%
due 9/01/2007 207,154 208,144
A A1 200,000 Ford Motor Credit Company, 7% due 9/25/2001 199,204 205,206
General Motors Acceptance Corp.:
A A2 100,000 8.50% due 1/01/2003 108,510 108,805
A A2 200,000 8.75% due 7/15/2005 226,232 226,982
A A1 90,000 PPG Industries, Inc., 6.50% due 11/01/2007 89,725 91,116
----------- -----------
1,230,427 1,239,935
Industrial-- A A2 150,000 Carnival Cruise Lines, Inc., 7.70%
Services--8.5% due 7/15/2004 156,745 160,068
A- Baa1 150,000 Computer Associates International,
Inc., 6.375% due 4/15/2005 149,206 149,144
A A2 231,986 Disney Enterprises, Inc., 6.85% due
1/10/2007(a) 231,828 236,832
A A2 200,000 First Data Corp., 6.375% due 12/15/2007 199,486 200,202
BBB- Baa3 120,000 TCI Communication Inc., 8.75% due 8/01/2015 140,767 139,390
BBB- Baa3 100,000 Time Warner Entertainment Co., 8.375%
due 3/15/2023 107,029 114,463
----------- -----------
985,061 1,000,099
Transportation-- BBB Baa2 250,000 CSX Corp., 7.90% due 5/01/2017 279,712 278,040
2.4%
US Government AAA Aaa 200,000 US Treasury Bond, 6.375% due 8/15/2027 211,750 210,438
Obligations--14.6% US Treasury Notes:
AAA Aaa 350,000 5.625% due 2/28/2001 352,598 349,891
AAA Aaa 25,000 5.875% due 9/30/2002 25,289 25,183
AAA Aaa 250,000 5.50% due 2/28/2003 250,105 248,242
AAA Aaa 475,000 7.50% due 2/15/2005 522,573 521,460
AAA Aaa 275,000 7% due 7/15/2006 297,150 296,741
AAA Aaa 50,000 6.125% due 8/15/2007 52,836 51,351
----------- -----------
1,712,301 1,703,306
Utilities-- A+ A2 300,000 ALLTEL Corporation, 6.75% due 9/15/2005 295,380 305,967
Communications-- AAA Aaa 125,000 Indiana Bell Telephone Co., Inc.,
8.4% 7.30% due 8/15/2026 133,639 136,854
BBB- Baa2 200,000 MCI Communications Corp., 6.125% due
4/15/2012 199,466 198,912
AA Aa3 125,000 Southwestern Bell Capital Corp., 6.50%
due 3/12/2003 126,222 127,146
BBB- Baa2 200,000 WorldCom, Inc., 7.75% due 4/01/2007 217,758 215,710
----------- -----------
972,465 984,589
Utilities-- A+ A1 100,000 Consolidated Edison, Inc., 6.25%
Electric--2.3% due 2/01/2008 100,000 98,940
A A2 150,000 Virginia Electric & Power Co., 8.625%
due 10/01/2024 166,200 166,348
----------- -----------
266,200 265,288
Total Investments in
Bonds & Notes--96.9% 11,258,911 11,336,016
SHORT-TERM
SECURITIES Issue
Commercial Paper*-- 208,000 General Electric Capital Corp.,
1.8% 5.56% due 5/01/1998 208,000 208,000
Total Investments in
Short-Term Securities--1.8% 208,000 208,000
Total Investments--98.7% $11,466,911 11,544,016
===========
Other Assets Less Liabilities--1.3% 146,640
-----------
Net Assets--100.0% $11,690,656
===========
Net Asset Value: Class A--Based on net assets of $920,359 and
91,898 shares outstanding $ 10.02
===========
Class B--Based on net assets of $7,089,545 and
708,308 shares outstanding $ 10.01
===========
Class C--Based on net assets of $3,075,178 and
307,252 shares outstanding $ 10.01
===========
Class D--Based on net assets of $605,574 and
60,503 shares outstanding $ 10.01
===========
<FN>
*Commercial Paper is traded on a discount basis; the interest rate
shown is the discount rate paid at the time of purchase by the
Portfolio.
(a)Subject to principal paydowns.
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (in US dollars)
US Government Securities Portfolio
Face Interest Maturity
Issue Amount Rate Date(s) Value
<S> <S> <C> <C> <C> <C>
US Government Federal Home Loan Mortgage Corporation $ 998,270 11.50 % 6/01/2019 $ 1,131,908
Agency Federal National Mortgage
Mortgage-Backed Association--Dwarf 2,600,000 6.50 TBA(1) 2,608,918
Obligations*-- Government National Mortgage Association 492,596 6.50 1/15/2028 488,128
64.3% Government National Mortgage Association 990,484 7.00 11/15/2027 1,002,707
Government National Mortgage Association 1,834,643 7.50 10/15/2025-12/15/2027 1,884,951
Total US Government Agency Mortgage-Backed
Obligations (Cost--$7,014,958) 7,116,612
US Government US Treasury Notes 1,300,000 5.375 2/15/2001 1,292,083
Obligations--33.0% US Treasury Notes 1,700,000 5.875 11/15/2005 1,711,679
US Treasury STRIPS** 850,000 6.065++ 5/15/2005 569,355
US Treasury STRIPS** 300,000 6.09++ 8/15/2019 82,857
Total US Government Obligations (Cost--$3,581,511) 3,655,974
</TABLE>
Merrill Lynch Asset Builder Program, Inc., April 30, 1998
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<CAPTION>
US Government Securities Portfolio (concluded)
SHORT-TERM Face
SECURITIES Amount Issue Value
<S> <S> <C> <C>
Repurchase 3,960,000 Nikko Securities Company, purchased
Agreements***-- 4/30/1998 to yield 5.52% to 5/01/1998 $ 3,960,000
35.8%
Total Investments in Short-Term Securities (Cost--$3,960,000) 3,960,000
Total Investments (Cost--$14,556,469)--133.1% 14,732,586
Liabilities in Excess of Other Assets--(33.1%) (3,659,900)
-----------
Net Assets--100.0% $11,072,686
===========
Net Asset Value: Class A--Based on net assets of $2,815,293 and
270,146 shares outstanding $ 10.42
===========
Class B--Based on net assets of $5,918,810 and
568,047 shares outstanding $ 10.42
===========
Class C--Based on net assets of $2,039,787 and
195,790 shares outstanding $ 10.42
===========
Class D--Based on net assets of $298,796 and
28,660 shares outstanding $ 10.43
===========
<FN>
(1)Represents a "to-be-announced" (TBA) transaction. The Portfolio
has committed to purchasing securities for which all specific
information is not available at this time.
++Represents the yield-to-maturity on this zero coupon issue at the
time of purchase by the Portfolio.
*Mortgage-Backed Obligations are subject to principal paydowns as a
result of prepayments or refinancing of the underlying mortgage
instruments. As a result, the average life may be substantially less
than the original maturity.
**STRIPS--Separate Trading of Registered Interest and Principal of
Securities.
***Repurchase Agreements are fully collateralized by US Government &
Agency Obligations.
</TABLE>
EQUITY PORTFOLIO CHANGES
For the Quarter Ended April 30, 1998
FUNDAMENTAL
VALUE PORTFOLIO
Additions
Associates First Capital Corporation
Cinergy Corp.
Columbia/HCA Healthcare Corporation
Diamond Offshore Drilling, Inc.
Kimberly-Clark Corporation
Motorola, Inc.
Newmont Mining Corporation
Royal Dutch Petroleum Company
(NY Registered Shares)
Deletions
Union Pacific Corporation
Dillard's Inc. (Class A)
U S West Media Group
GLOBAL
OPPORTUNITY
PORTFOLIO
Additions
Allmerica Financial Corporation
Autoliv AB
Axa-UAP (New)
British Aerospace PLC
COMSAT Corporation
Columbia/HCA Healthcare Corporation
Custos AB (A Shares)
Custos AB (B Shares)
Daimler-Benz AG
*Diageo PLC (Class B)
Dinamia S.A.
Elf Aquitaine S.A.
Equitable Companies Inc. (The)
Gillette Company (The)
Great Lakes Chemical Corporation
Intel Corporation
Lowe's Companies, Inc.
Oversea-Chinese Banking Corp. Ltd.
'Foreign'
Premier Parks Inc.
Providian Financial Corporation
Sampo Insurance Co. Ltd.
Seagram Co., Ltd. (The)
Texas Instruments Inc.
Tokyo Electron Limited
Tyco International Ltd.
UBS
USA Waste Services, Inc.
Walt Disney Company
Deletions
AT&T Corp.
American Express Company
Bridgestone Corp.
Brunswick Corporation
DENTSPLY International Inc.
*Diageo PLC (Class B)
Edison International, Inc.
Glenborough Realty Trust, Inc.
Gucci Group N.V. (NY Registered)
Harnischfeger Industries, Inc.
Hartford Life, Inc. (Class A)
Illinova Corporation
Lilly (Eli) and Company
Lockheed Martin Corporation
MGIC Investment Corporation
Maeda Corp.
National Semiconductor Corporation
Novartis AG (ADR)
OMI Corp.
Okumura Corp.
Pfizer, Incorporated
Philip Morris Companies, Inc.
Prentiss Properties Trust
Provident Companies, Inc.
Rio Tinto PLC
San Miguel Corp. (Class B)
Texas Utilities Company
Travelers Property Casualty Corp.
(Class A)
GROWTH
OPPORTUNITY
PORTFOLIO
Additions
AT&T Corp.
Applied Materials, Inc.
Chancellor Media Corp.
Clear Channel Communications, Inc.
Dell Computer Corporation
Federated Department Stores, Inc.
Franklin Resources, Inc.
Marriott International, Inc. (Class A)
PeopleSoft, Inc.
*Sodexho Marriott Service, Inc.
Texas Instruments Inc.
Deletions
*Sodexho Marriott Service, Inc.
[FN]
*Added and deleted in the same quarter.
