MERRILL LYNCH
ASSET BUILDER
PROGRAM, INC.
FUND LOGO
Quarterly Report
April 30, 1999
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
Terry K. Glenn, President and Director
Joe Grills, Director
Walter Mintz, Director
Robert S. Salomon Jr., Director
Melvin R. Seiden, Director
Stephen B. Swensrud, Director
Arthur Zeikel, Director
Christopher G. Ayoub, Senior Vice President
Lawrence R. Fuller, Senior Vice President
Geraldine C. Gunn Hertig, 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 and Treasurer
Barbara G. Fraser, Secretary
Custodian
The Bank of New York
90 Washington Street, 12th Floor
New York, NY 10286
Transfer Agent
Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 637-3863
Merrill Lynch Asset Builder Program, Inc., April 30, 1999
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 for all five portfolios can be
found on pages 7-10 of this report to shareholders.
Fundamental Value Portfolio
The quarter ended April 30, 1999 was a favorable one for Fundamental
Value Portfolio as many out-of-favor value equities enjoyed a solid
resurgence. A number of positive developments propelled value stocks
higher. These factors included improved earnings from many
economically sensitive companies, signs of a bottoming of the
turmoil in the important Asian and Latin American economies, and
indications of a rebound in the depressed industrial sector of the
US economy. Positive economic indicators included the purchasing
managers' index, which expanded in February after eight months of
contraction and which continued to show progress in the ensuing two
months. In addition, US gross domestic product (GDP) reflected solid
growth (+6.1% in the fourth quarter of 1998 and +4.5% in the first
quarter of 1999). Another catalyst for value equities was the
improved outlook for the out-of-favor energy sector following the
accord reached by the Organization of Petroleum Exporting Countries
(OPEC) in March.
Reflecting this favorable investment backdrop, Fundamental Value
Portfolio's Class A, Class B, Class C and Class D Shares had total
returns of +9.87%, +9.55%, +9.56% and +9.84%, respectively, for the
quarter ended April 30, 1999, surpassing the total return of +4.67%
for the Standard & Poor's 500 Index (S&P 500). Favorably impacting
our performance were our overweighted positions in the basic
materials, capital goods, and energy sectors. During the April
quarter, individual standouts in the Portfolio included Venator
Group, Inc. (+89%), Royal Dutch Petroleum Company (+46.5%), Atlantic
Richfield Company (+46.1%), Toys 'R' Us, Inc. (+45.8%), Diamond
Offshore Drilling, Inc. (+43.8%) and Halliburton Company (+43.6%).
Laggards in the Portfolio included communications and utility
equities as well as select technology and financial holdings.
During the April quarter, we initiated five new positions and
eliminated two. The new commitments included Dana Corporation, Eaton
Corporation, Hercules Incorporated and Honeywell Inc. These cyclical
stocks had dramatically underperformed the market over the past 12
months, pressured by the economic troubles in the emerging
economies. Since we judged this negative influence to be
dissipating, we viewed the reasonable share price valuations as
buying opportunities. Further bolstering the positive case for these
four issues are the bright 1999 earnings prospects forecast for each
company.
In addition, we initiated a position in Philip Morris Companies,
Inc., a contrarian investment opportunity. The shares have
dramatically underperformed the market this year, reflecting several
factors: two sizable adverse jury awards, the President's proposed
lawsuit against the tobacco industry and the potential for a steep
increase in Federal excise taxes on tobacco products. Although the
political and legal obstacles remain formidable, we believed the
risks were adequately reflected in the share price. Philip Morris
was available at a compelling 60% discount to the market multiple
and provided a well-above average dividend yield of 4.6%. Providing
support to the stock should be the company's sizable cash flow,
which should enable the company to continue its share buyback
program as well as to steadily increase its dividend.
On the sell side, we eliminated two pharmaceutical holdings at
sizable profits, Pharmacia & Upjohn, Inc. and Bristol-Myers Squibb
Company. We purchased shares in these companies several years ago
when drug stocks were significantly out-of-favor and very reasonably
valued. Since then, both companies have made significant strides in
improving their fundamental outlooks, propelling their stock prices
to record levels. With the shares now commanding premiums to the
market multiple, they appeared fairly valued and thus, were
eliminated.
We believe the prospect of continued outperformance by value
equities remains bright. A continuation of current trends--a global
economic rebound, a vibrant US economy and S&P 500 earnings progress
- --provides a solid backdrop for value outperformance. Further
bolstering the case for value equities is the compelling investment
attributes accorded many shares. Fundamental Value Portfolio is
indicative of this opportunity with the Portfolio's price/earnings
multiple 40% below that of the S&P 500 and the price/book ratio at a
65% discount to the market benchmark.
Global Opportunity Portfolio
As of April 30, 1999, the asset allocation for Global Opportunity
Portfolio was: foreign stocks, 41% of net assets; US stocks, 38%;
foreign bonds, 15%; US bonds, 6%; and cash reserves, less than 1%.
We enlarged our foreign equity representation from 30% of net assets
at January 31, 1999 to 41% of net assets by April 30, 1999. We
achieved this increase through the expansion of our positions in
Japan, the United Kingdom and emerging markets. In recent months, we
became increasingly optimistic over the upside potential in the
Japanese stock market, given evidence of increasingly accommodative
monetary policy, some progress in dealing with the financial crisis
and evidence that a growing number of corporations are undertaking
corporate restructuring. In adding to Japanese equities, we are
maintaining a balance between export-oriented companies, as
exemplified by Toyota Motor Corporation, and companies more
dependent on the domestic economy, including commitments in banking.
Our commitment to Japanese equities remains hedged back to US
dollars, given expectations of a weakening of the yen in coming
months.
We enlarged our commitment to the United Kingdom, reflecting an
increasingly positive assessment of prospects for the UK economy
over the next year. Since we expect economic recovery in the United
Kingdom to be accompanied by a strong British pound relative to the
euro, we concentrated our new positions in companies that we
believed would benefit from recovering domestic demand. Examples of
new commitments include Ladbroke Group PLC and The British Land
Company PLC. An improving post-devaluation outlook led us to
initiate a commitment in Brazilian equities. We have also
reestablished a small position in emerging Asian markets through a
position in Samsung Electronics. Although we reduced our position,
European equities outside of the United Kingdom remain the largest
regional commitment among the Portfolio's foreign equity holdings.
Significant positions remained in the telecommunications,
telecommunications equipment, food, healthcare and financial
sectors.
We slightly reduced our allocation to US equities from 40% of net
assets to 38% during the three months ended April 30, 1999.
Technology remained the largest sector represented among US
equities, reflecting the continuing high degree of earnings
visibility for the group. New commitments in this area included
Hewlett-Packard Company. Other areas with significant representation
were financials, with a new position in American International
Group, Inc., and consumer staples, including a new commitment in
Philip Morris Companies, Inc. We also added to basic industries
through positions in International Paper Company and Rohm and Haas
Company.
Within the foreign bond commitment, we established a position in New
Zealand. This commitment reflects the attractive yield of these
obligations relative to US fixed-income securities. We maintained
positions in German and UK bonds. We eliminated the hedge of UK
stocks and bonds since we believed the pound would recover versus
the US dollar as a result of a more optimistic outlook for the UK
economy.
During the three months ended April 30, 1999, we reduced the
Portfolio's US bond representation from 14% of net assets to 6%.
However, we extended the average duration of the residual US bond
position from 5.3 years to 7.0 years, following a rise in US
interest rates. In coming months, we expect US interest rates to
fall back, reflecting evidence of some slowing in the pace of US
economic activity.
Growth Opportunity Portfolio
For the quarter ended April 30, 1999, the relative investment
performance of Growth Opportunity Portfolio trailed in comparison to
the S&P 500 as a result of the apparent shift by investors of assets
into the energy and energy services industries as well as the basic
and manufacturing industries, such as aluminum, steel, paper,
chemicals, motor vehicles and construction equipment. Our
perspective was that it is too early to shift investments into the
cyclical or value-investing industries because we appear to be in
the late stages of one of the longest periods of continuous positive
growth in real business activity in US economic history. Also, in
the United States, manufacturing employment in these industries
continues to decline in absolute terms as lower-cost foreign-based
producers in Asia, Latin America and Eastern Europe continue to take
business away from US producers. Consequently, manufacturing
capacity utilization, even in the technology sector, continues at
recessionary levels of activity. The US merchandise trade deficit
continues to increase to surprisingly high levels because US
consumers prefer less expensive foreign-made products. Therefore, it
seems difficult to rationalize a near-term upturn in business
activity or profits for US companies in the basic industries or
manufacturing sectors.
From our viewpoint, it will take a prolonged period of decline in
the value of the US dollar, relative to the currencies of the
countries in which our corporate competitors are domiciled, before
there will be significant sustained increases in production volumes,
pricing in US dollars and upside profitability leverage from
increased capacity utilization. The US dollar has not yet started to
decline in value in a sustained manner relative to the South Korean
won or Japanese yen. Therefore, we continue to focus on investments
in companies that we believe will do well in terms of relatively
consistent profitability during a period of modest real growth in
business activity with low levels of price inflation.
Merrill Lynch Asset Builder Program, Inc., April 30, 1999
The slowdown in real consumer spending around the world during the
first quarter of 1999 resulted in The Coca-Cola Company experiencing
an absolute decline in unit volume sales outside of the US market.
In fact, beverage sales declined in every major regional economy.
Also, the declines in consumer spending and business activity around
the world appear to have caused a major slowdown in the rate of
growth of corporate investment in new computer systems and related
software products. In late January and early February 1999, we
significantly reduced the Portfolio's investment weighting in
technology companies on the basis of statements by the chief
executives of several of the leading computer equipment companies
that the pace of business sales had slowed down. Also, we reduced
the investment weighting in several of the Portfolio's largest
investments in the retail industry in response to our anticipation
that there would be a meaningful slowdown in the rate of growth
during the second quarter of 1999 and possibly into the second half
of 1999.
Our investment strategy is focused on large companies in
telecommunications, banking and financial, pharmaceuticals,
financial services and specialty retailing industries. The ten
largest equity investments in the Portfolio are Cisco Systems, Inc.,
General Electric Company, Bristol-Myers Squibb Company, Mellon Bank
Corporation, Citigroup Inc., America Online, Inc., Merck & Co.,
Inc., AT&T Corp., Sprint Corp. (FON Group) and Minnesota Mining and
Manufacturing Company (3M). During the April quarter, half of the
companies among the top ten equity holdings had total investment
returns that exceeded the total investment return of the unmanaged
S&P 500 (with daily reinvestment of the dividends).
We continue to have a positive outlook for overall real economic
growth and for growth in corporate profits in the United States. It
appears that corporate operating profits reached a bottom in the
third quarter of 1998 and continued to grow faster on a year-to-year
comparison in the first quarter of 1999 than in the fourth quarter
of 1998. Also, we anticipate a continuation of wide percentage
changes in stock prices of individual stocks as investors attempt to
determine where the growth in corporate earnings will be the
strongest with the best rates of return on equity. As an example,
the integrated oil companies continue to have negative earnings
growth comparisons relative to a year ago even though oil prices
went up substantially in the first quarter of 1999 in response to
reductions in production by the major OPEC countries. During
upcoming quarters, the earnings will have to recover to support the
substantial increase in energy company stock prices during March and
April. We continue to focus on companies that we do not believe are
dependent on a cyclical upturn in commodity prices or a global
upturn in real economic growth for maintenance of earnings levels
and rates of return on equity. At April 30, 1999, the Portfolio's
cash and cash equivalent position was approximately 8.7% of net
assets.
Quality Bond Portfolio
For the three-month period ended April 30, 1999, the US Treasury
market continued to exhibit a considerable degree of price
volatility as investors' attitudes shifted to a more bearish
posture. The release of November's Federal Open Market Committee
meeting minutes heightened concerns, since the Committee shifted
monetary policy from an easing bias to a neutral posture. As
expected, the front end of the yield curve reacted immediately, with
the greatest initial impact in the one-year--five-year sector. In
his Humphrey-Hawkins testimony, Chairman Greenspan's remarks were
consistent with past speeches since he gave little indication of
future Federal Reserve Board policy. Unfortunately, investors chose
to focus in on those portions of his presentation that painted a
cautionary picture. Additionally, the Treasury market was being
negatively impacted by the recent spike in long-term Japanese bond
yields and the concern that some Japanese investors would seek to
reduce their US dollar exposure.
By early March, investor sentiment became more positive as economic
releases indicated that the domestic economy was not growing at a
pace that would create resource shortages or inflationary pressures.
Accordingly, interest rates retraced a portion of their February
increase as investors sought to reinvest at the higher prevailing
yields. However, the rally was short-lived as investors once again
pushed interest rates higher in reaction to evidence that the
domestic economy was re-accelerating. Furthermore, inflationary
concerns heightened following the recent run-up in the price of oil
as OPEC members appeared to reach a preliminary agreement on
production levels. By the end of March, the yield curve had
steepened dramatically.
The month of April brought continued pressure to the Treasury market
as investors reacted to further evidence that the domestic economy
did not slow as expected. Preliminary releases indicated that first
quarter GDP grew at a strong 4.5% rate, led by consumer spending
which increased 6.7% for the first quarter, an 11-year high.
Furthermore, imports were up dramatically while exports remained
negatively impacted by the slower international economy. With many
foreign economies exhibiting renewed vigor, concern will be focused
on the impact this will have on GDP going forward. Recently,
inflation has begun to show some signs of rising as witnessed by the
higher oil prices and the increase in the GDP deflator to 1.4%,
situations that we do not expect to be long term. By April month-
end, the long-term bond was approaching 5.7%, nearly 100 basis
points above the low yields of 1998.
Throughout the quarter ended April 30, 1999, we maintained the
duration of Quality Bond Portfolio in the range of 5.8 years--6.0
years, within close proximity of the benchmark unmanaged Merrill
Lynch Corporate Master Bond Index's duration. We concentrated on
increasing the average coupon in the Portfolio, not only to help
enhance current income, but also to provide greater stability to net
asset values during periods of stable interest rates. We focused on
issues with an attractive yield relative to Treasury securities
given our belief that spread relationships would continue to
compress toward Treasury yields. We earmarked high-quality corporate
bonds with particular emphasis on BBB-rated issues, securities
backed by home equity loans and commercial mortgage-backed
securities. Although we are not able to invest in securities of
foreign companies, a sector that has produced the best returns
during 1999, BBB-rated domestic issues have produced favorable
returns as yield spreads narrowed. Additionally, we limited our
corporate bond investment to only the larger, more liquid issues and
continued to avoid those industries where we believed bid/offer
relationships were too wide.
Relative to the unmanaged benchmark Merrill Lynch Corporate Master
Bond Index, the Portfolio was overweighted in the
telecommunications, finance, oil and gas, electric and gas
utilities, property and casualty, airlines, cable/media, gaming and
lodging, information technology, real estate investment trusts,
chemicals and pulp/paper sectors. Underweighted sectors included
Yankee and Canadian sovereign bonds, corporate bonds, tobacco
companies, service firms, pharmaceuticals, metals/mining companies
and consumer products firms. From a ratings perspective, corporate
debt that is rated BBB accounts for approximately 36% of holdings, a
sector we will continue to overweight relative to the index given
our expectation that this sector will continue to outperform over
the coming months as spread relationships further compress.
Going forward, we expect to continue to emphasize those strategies
implemented during the April quarter. While we are not completely
convinced the Federal Reserve Board will tighten monetary policy, we
would not eliminate the chance for interest rates to drift higher
from current levels. If interest rates were to rise and the long-
term bond approach 6%, we would view this as an opportunity to
extend the Portfolio's duration since we are not expecting interest
rates to trend higher over the long term. With respect to sector
allocation, we will continue to look at the cyclicals for good
relative value and mortgage and asset-backed securities for
continued diversification and attractive income attributes.
US Government Securities Portfolio
The US economy continues to grow at a faster-than-expected pace
fueled by the largest rise in consumer spending in over a decade.
GDP, the nation's total output of goods and services, grew at a 4.5%
annual rate in the first quarter of 1999. Meanwhile, inflation
remains low. The GDP price deflator, which measures inflation across
the economy, rose at a 1.4% annual rate. Though this number is still
low by historical standards, it was higher than expected and the
fastest gain in over two years. The unemployment rate remains at a
29-year low. However, even with extremely tight labor markets, the
Employment Cost Index (ECI) continues to be surprisingly weak.
Overall compensation rose a mere 0.4%, the smallest quarterly
increase on record. The low ECI data continues to disprove the
perceived historical relationship between growth, unemployment and
inflation. Compensation costs have not accelerated despite the tight
labor markets. Until the Federal Reserve Board sees tangible signs
of higher inflation, it will most likely keep monetary policy on
hold, even with domestic activity in the first quarter of 1999
exceeding expectations.
Merrill Lynch Asset Builder Program, Inc., April 30, 1999
Although there was no change to short-term interest rates during the
April quarter, investors shifted their bias on monetary policy to
one of tightening. Intermediate-term and long-term interest rates
all rose dramatically. Two-year and five-year Treasury note yields
rose 49 basis points and 67 basis points, respectively, while the
ten-year and 30-year Treasury yields rose 69 basis points and 57
basis points, respectively. The two-year--ten-year portion of the US
Treasury yield curve steepened by 20 basis points during the April
quarter to 29 basis points at the end of April.
Mortgage-backed securities (MBS) significantly outperformed their
Treasury counterparts for the April quarter and thus far this year
for several reasons. First, higher interest rates have diminished
prepayment fears. The Mortgage Bankers Association Refi Index, a
measure of refinancing activity, is significantly lower than its
peak in October 1998 and has been decreasing thus far this quarter.
The US Treasury yield curve has steepened during the quarter, which
is favorable to MBS and increases demand for collateralized mortgage
obligations. This in turn enhances MBS collateral. These factors
caused MBS yield spreads to tighten relative to Treasury issues with
similar average lives during the April quarter. As a result, a
number of the Portfolio's holdings outperformed US Treasury issues
during the period. To illustrate an example of what the MBS spread
represents in price movement, Government National Mortgage
Association 7% returned +0.76% for the April quarter as compared to
the ten-year Treasury note which had a similar average life and
returned -3.99% for the quarter.
If interest rates continue to move higher, the focus may shift from
prepayment risk to extension risk. As interest rates rise,
prepayment expectations are reduced causing the average life of MBS
to extend. During the April quarter, we made several trades to
reduce the Portfolio's extension risk. These trades, which reduced
duration, included moving higher in coupon and purchasing short-term
Treasury notes. As interest rates stabilize, we will look to reverse
these trades and increase duration. Over the past several quarters,
when prepayment rates were higher, moving up in coupon sometimes
meant giving up yield. Currently, with lower prepayment rates, we
are able to purchase higher coupon and pick up yield. The Portfolio
ended the quarter with a 54% 30-year MBS allocation, a 21% 15-year
MBS allocation, a 9% multi-family prepayment protected FNMA pool, a
US Treasury allocation of 11% and a cash position of 5%. We remain
heavily weighted in MBS and continue to find them a very attractive
fixed-income investment.
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,
(Terry K. Glenn)
Terry K. Glenn
President
(Geraldine Gunn Hertig)
Geraldine Gunn Hertig
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
(Christopher G. Ayoub)
Christopher G. Ayoub
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 16, 1999
After more than 20 years of service, Arthur Zeikel recently retired
as Chairman of Merrill Lynch Asset Management, L.P. (MLAM). Mr.
Zeikel served as President of MLAM from 1977 to 1997 and as Chairman
since December 1997. Mr. Zeikel is one of the country's most
respected leaders in asset management and presided over the growth
of Merrill Lynch's asset management business. During his tenure,
client assets under management grew from $300 million to over $500
billion. Mr. Zeikel will remain on Merrill Lynch Asset Builder
Program's Board of Trustees. We are pleased to announce that Terry
K. Glenn has been elected President and Trustee of the Fund. Mr.
Glenn has held the position of Executive Vice President of MLAM
since 1983.
Mr. Zeikel's colleagues at MLAM join the Fund's Board of Trustees in
wishing him well in his retirement from Merrill Lynch and are
pleased that he will continue as a member of the Fund's Board of
Directors.
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 distri-bution 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 representation
of future performance. Figures shown in the "Recent Performance
Results" and "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, 1999
PERFORMANCE DATA (continued)
Fundamental
Value Portfolio
Average Annual
Total Returns
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 3/31/99 - 4.04% - 9.08%
Inception (2/01/95) to 3/31/99 +16.26 +14.76
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 3/31/99 - 5.12% - 8.70%
Inception (2/01/95) to 3/31/99 +15.00 +15.00
[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 3/31/99 - 5.19% - 6.09%
Inception (2/01/95) to 3/31/99 +14.99 +14.99
[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 3/31/99 - 4.29% - 9.31%
Inception (2/01/95) to 3/31/99 +15.99 +14.50
[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 3/31/99 +0.38% -4.89%
Inception (2/01/95) to 3/31/99 +9.33 +7.92
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 3/31/99 -0.68% -4.64%
Inception (2/01/95) to 3/31/99 +8.17 +8.17
[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 3/31/99 -0.77% -1.76%
Inception (2/01/95) to 3/31/99 +8.13 +8.13
[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 3/31/99 +0.20% -5.06%
Inception (2/01/95) to 3/31/99 +9.09 +7.69
[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 3/31/99 +27.36% +20.67%
Inception (2/02/96) to 3/31/99 +26.15 +24.01
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 3/31/99 +25.90% +21.90%
Inception (2/02/96) to 3/31/99 +24.82 +24.62
[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 3/31/99 +25.89% +24.89%
Inception (2/02/96) to 3/31/99 +24.76 +24.76
[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 3/31/99 +26.99% +20.32%
Inception (2/02/96) to 3/31/99 +25.90 +23.77
[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 3/31/99 +6.68% +2.41%
Inception (2/01/95) to 3/31/99 +6.97 +5.92
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 3/31/99 +5.99% +2.02%
Inception (2/01/95) to 3/31/99 +6.12 +6.12
[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 3/31/99 +5.94% +4.95%
Inception (2/01/95) to 3/31/99 +6.05 +6.05
[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 3/31/99 +6.41% +2.16%
Inception (2/01/95) to 3/31/99 +6.71 +5.66
[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 3/31/99 +7.60% +3.30%
Inception (2/01/95) to 3/31/99 +9.27 +8.20
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 3/31/99 +6.80% +2.81%
Inception (2/01/95) to 3/31/99 +8.40 +8.40
[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 3/31/99 +6.74% +5.75%
Inception (2/01/95) to 3/31/99 +8.33 +8.33
[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 3/31/99 +7.33% +3.04%
Inception (2/01/95) to 3/31/99 +9.01 +7.94
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
Merrill Lynch Asset Builder Program, Inc., April 30, 1999
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 4/30/99
<S> <C> <C> <C> <C>
Fundamental Value Portfolio Class A Shares + 4.24% +9.87% +106.59% --
Fundamental Value Portfolio Class B Shares + 3.03 +9.55 + 97.34 --
Fundamental Value Portfolio Class C Shares + 3.02 +9.56 + 97.27 --
Fundamental Value Portfolio Class D Shares + 3.93 +9.84 +104.56 --
Global Opportunity Portfolio Class A Shares + 2.16 +1.20 + 49.05 --
Global Opportunity Portfolio Class B Shares + 1.05 +0.90 + 42.32 --
Global Opportunity Portfolio Class C Shares + 0.97 +0.90 + 42.09 --
Global Opportunity Portfolio Class D Shares + 1.91 +1.13 + 47.60 --
Growth Opportunity Portfolio Class A Shares +25.87 +1.83 +110.62 --
Growth Opportunity Portfolio Class B Shares +24.52 +1.59 +103.51 --
Growth Opportunity Portfolio Class C Shares +24.43 +1.54 +103.23 --
Growth Opportunity Portfolio Class D Shares +25.59 +1.78 +109.32 --
Quality Bond Portfolio Class A Shares + 6.31 -1.30 + 32.73 6.30%
Quality Bond Portfolio Class B Shares + 5.73 -1.39 + 28.33 5.80
Quality Bond Portfolio Class C Shares + 5.68 -1.40 + 27.96 5.75
Quality Bond Portfolio Class D Shares + 6.26 -1.26 + 31.48 6.06
US Government Securities Portfolio Class A Shares + 7.39 +0.09 + 45.21 6.13
US Government Securities Portfolio Class B Shares + 6.48 -0.10 + 40.24 5.63
US Government Securities Portfolio Class C Shares + 6.43 -0.11 + 39.88 5.58
US Government Securities Portfolio Class D Shares + 7.01 +0.02 + 43.62 5.89
<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 since inception periods are Fundamental Value
Portfolio, Global Opportunity Portfolio, Quality Bond Portfolio & US
Government Securities Portfolio, from 2/01/95 to 4/30/99 and Growth
Opportunity Portfolio, from 2/02/96 to 4/30/99.
</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 120,000 Scitex Corporation Ltd. (Ordinary) $ 1,136,092 $ 1,155,000 1.1%
Total Investments in the Middle East 1,136,092 1,155,000 1.1
NORTH
AMERICA
United Aerospace & Defenses 40,000 The Boeing Company 1,345,984 1,625,000 1.5
States
Automotive 20,000 Ford Motor Company 429,535 1,278,750 1.2
18,000 General Motors Corporation 968,147 1,600,875 1.5
------------ ------------ ------
1,397,682 2,879,625 2.7
Banking & 26,000 Associates First Capital
Financial Corporation (Class A) 751,607 1,152,125 1.1
35,000 Citigroup Inc. 2,002,413 2,633,750 2.4
105,000 Hibernia Corp. (Class A) 1,309,566 1,397,813 1.3
22,000 National City Corporation 1,521,910 1,578,500 1.5
50,000 Wells Fargo Company 1,274,628 2,159,375 2.0
------------ ------------ ------
6,860,124 8,921,563 8.3
Beverage & 30,000 The Seagram Company Ltd. 1,068,434 1,721,250 1.6
Entertainment
Capital Equipment 25,000 Dana Corporation 1,021,460 1,178,125 1.1
20,000 Eaton Corporation 1,422,412 1,833,750 1.7
------------ ------------ ------
2,443,872 3,011,875 2.8
Chemicals 30,000 E.I. du Pont de Nemours and Company 1,704,050 2,118,750 2.0
20,000 Great Lakes Chemical Corporation 796,423 956,250 0.9
26,000 Hercules Incorporated 728,972 983,125 0.9
------------ ------------ ------
3,229,445 4,058,125 3.8
Computer Equipment 28,000 Hewlett-Packard Company 1,485,362 2,208,500 2.0
Computer Software 55,000 Novell, Inc. 418,750 1,220,312 1.1
Cosmetics & 45,000 Kimberly-Clark Corporation 2,133,971 2,759,062 2.6
Toiletries
Electric Utilities 70,000 CINergy Corp. 2,305,917 2,086,875 1.9
Electronic Components 40,000 Thomas & Betts Corporation 1,643,006 1,680,000 1.6
Fertilizer 65,000 IMC Global Inc. 1,928,484 1,625,000 1.5
Foods 35,000 General Mills, Inc. 2,365,671 2,559,375 2.4
Health Care Services 56,000 Columbia/HCA Healthcare Corporation 1,671,831 1,382,500 1.3
Information Processing 8,000 Honeywell Inc. 658,980 758,000 0.7
13,000 International Business Machines
Corporation 888,582 2,719,437 2.5
------------ ------------ ------
1,547,562 3,477,437 3.2
Insurance 12,500 Aetna Inc. 933,096 1,096,094 1.0
55,000 The Allstate Corporation 2,332,050 2,000,625 1.9
35,000 The Chubb Corporation 2,194,262 2,073,750 1.9
25,000 PartnerRe Ltd. 1,195,488 1,031,250 1.0
------------ ------------ ------
6,654,896 6,201,719 5.8
Machinery 30,000 Deere & Company 929,241 1,290,000 1.2
30,000 ITT Industries, Inc. 716,231 1,080,000 1.0
20,931 SPX Corporation 1,229,451 1,367,056 1.3
------------ ------------ ------
2,874,923 3,737,056 3.5
Metals--Non-Ferrous 45,000 ASARCO Incorporated 1,240,590 826,875 0.8
Natural Gas 24,000 Enron Corporation 936,185 1,806,000 1.7
55,000 Sonat Inc. 2,188,180 1,966,250 1.8
------------ ------------ ------
3,124,365 3,772,250 3.5
</TABLE>
Merrill Lynch Asset Builder Program, Inc. April 30, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<CAPTION>
Fundamental Value Portfolio (concluded)
MIDDLE Shares Percent of
EAST Industries Held Investments Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
United Oil--Domestic 30,000 Atlantic Richfield Company (ARCO) $ 2,046,738 $ 2,518,125 2.3%
States 70,000 Occidental Petroleum Corporation 1,619,411 1,413,125 1.3
(concluded) 20,000 Sunoco, Inc. 623,938 715,000 0.7
------------ ------------ ------
4,290,087 4,646,250 4.3
Oil--International 25,000 Exxon Corporation 1,524,560 2,076,563 1.9
Oil Services 30,000 Diamond Offshore Drilling, Inc. 1,407,557 991,875 0.9
30,000 Halliburton Company 927,909 1,278,750 1.2
------------ ------------ ------
2,335,466 2,270,625 2.1
Packaging 50,000 Crown Cork & Seal Company, Inc. 2,106,275 1,625,000 1.5
Paper & Forest 20,000 International Paper Company 805,487 1,066,250 1.0
Products 70,000 Louisiana-Pacific Corporation 1,551,112 1,456,875 1.4
------------ ------------ ------
2,356,599 2,523,125 2.4
Photography 22,000 Eastman Kodak Company 1,556,016 1,641,750 1.5
Railroads 55,000 Union Pacific Corporation 2,978,576 3,300,000 3.1
Retail 60,000 Dillard's, Inc. (Class A) 1,633,174 1,661,250 1.5
65,000 Kmart Corporation 750,037 966,875 0.9
35,000 Sears, Roebuck & Co. 1,560,564 1,610,000 1.5
45,000 Toys 'R' Us, Inc. 1,178,997 978,750 0.9
40,500 Venator Group, Inc. 570,707 392,344 0.4
------------ ------------ ------
5,693,479 5,609,219 5.2
Semiconductors 5,400 Texas Instruments Incorporated 236,494 551,475 0.5
Steel 40,000 USX-U.S. Steel Group 1,147,077 1,210,000 1.1
100,000 WHX Corporation 902,908 843,750 0.8
------------ ------------ ------
2,049,985 2,053,750 1.9
Telecommunications 50,000 3Com Corporation 1,264,976 1,300,000 1.2
37,500 AT&T Corp. 885,188 1,893,750 1.8
15,000 Bell Atlantic Corporation 686,661 864,375 0.8
30,000 GTE Corporation 1,334,458 2,008,125 1.9
30,000 Motorola, Inc. 1,604,506 2,403,750 2.2
------------ ------------ ------
5,775,789 8,470,000 7.9
Tobacco 35,000 Philip Morris Companies, Inc. 1,373,038 1,227,187 1.1
Total Investments in North America 78,017,233 91,749,343 85.3
WESTERN
EUROPE
Nether- Oil-- 40,000 Royal Dutch Petroleum Company (NY
lands International Registered Shares) 2,093,068 2,347,500 2.2
Total Investments in the Netherlands 2,093,068 2,347,500 2.2
United Petroleum 12,202 BP Amoco PLC (ADR)(a) 941,412 1,381,114 1.3
Kingdom
Total Investments in the United
Kingdom 941,412 1,381,114 1.3
Total Investments in Western Europe 3,034,480 3,728,614 3.5
SHORT-TERM Face
SECURITIES Amount Issue
<S> <C> <S> <C> <C> <C>
Commercial Paper* $3,000,000 CSW Credit Inc., 4.77% due 5/26/1999 2,990,063 2,990,063 2.8
2,531,000 General Electric Capital Corp.,
4.94% due 5/03/1999 2,530,305 2,530,305 2.4
5,000,000 Morgan Stanley, Dean Witter,
Discover & Co., 4.81% due 5/07/1999 4,995,992 4,995,992 4.6
Total Investments in Short-Term
Securities 10,516,360 10,516,360 9.8
Total Investments $ 92,704,165 107,149,317 99.7
============
Other Assets Less Liabilities 352,883 0.3
------------ ------
Net Assets $107,502,200 100.0%
============ ======
Net Asset Value: Class A--Based on net assets of $411,909 and 26,442
shares outstanding $ 15.58
============
Class B--Based on net assets of $66,759,870 and
4,377,637 shares outstanding $ 15.25
============
Class C--Based on net assets of $33,750,947 and 2,214,588
shares outstanding $ 15.24
============
Class D--Based on net assets of $6,579,474 and 423,953
shares outstanding $ 15.52
============
<FN>
(a)American Depositary Receipts (ADR).
*Commercial Paper is traded on a discount basis; the interest rates
shown reflect the discount 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> <S> <C> <S> <C> <C> <C>
Germany Euro 1,800,000 BundesObligation, 4.75% due
11/20/2001 $ 2,183,617 $ 1,994,489 3.2%
Bundesrepublik Deutschland:
2,700,000 4.75% due 7/04/2008 3,219,869 3,055,431 4.9
1,060,000 4.75% due 7/04/2028 1,250,708 1,101,553 1.8
------------ ------------ ------
6,654,194 6,151,473 9.9
New Zealand NZ$ 1,150,000 Inter-American Development Bank, 5.75%
due 4/15/2004 618,084 632,865 1.0
United Pound 1,424,000 United Kingdom Treasury Gilt, 7.25%
Kingdom Sterling due 12/07/2007 2,706,702 2,686,898 4.3
Total Investments in Foreign
Government Obligations 9,978,980 9,471,236 15.2
</TABLE>
Merrill Lynch Asset Builder Program, Inc., April 30, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Global Opportunity Portfolio (continued)
Face Percent of
COUNTRY Amount US Government & Agency Obligations Cost Value Net Assets
<S> <S> <S> <C> <S> <C> <C> <C>
United States Federal National Mortgage
Association:
US$ 300,000 5.625% due 3/15/2001 $ 301,290 $ 301,923 0.5%
840,000 5.125% due 2/13/2004 823,931 821,100 1.3
1,000,000 5.75% due 2/15/2008 996,094 994,060 1.6
US Treasury Notes & Bonds:
300,000 6.50% due 5/31/2002 309,422 310,875 0.5
900,000 6.625% due 2/15/2027 1,019,214 989,856 1.6
Total Investments in US Government
& Agency Obligations 3,449,951 3,417,814 5.5
Total Investments in Foreign & US
Government & Agency Obligations 13,428,931 12,889,050 20.7
Shares
Industries Held US Stocks
United Aerospace & Defense 1,200 United Technologies Corporation 94,462 173,850 0.3
States
Application 3,100 Siebel Systems, Inc. 114,458 119,156 0.2
Development
Software
Automobile Rental 5,350 Avis Rent A Car, Inc. 141,873 167,856 0.3
2,810 The Hertz Corporation (Class A) 112,434 167,722 0.3
------------ ------------ ------
254,307 335,578 0.6
Automobiles 7,200 Delphi Automotive Systems Corporation 122,400 139,950 0.2
1,900 Ford Motor Company 121,192 121,481 0.2
------------ ------------ ------
243,592 261,431 0.4
Banking 3,847 Bank of America Corporation 223,414 276,984 0.4
8,940 The Bank of New York Company, Inc. 194,993 357,600 0.6
6,580 Mellon Bank Corporation 416,764 488,976 0.8
------------ ------------ ------
835,171 1,123,560 1.8
Beverages 11,700 PepsiCo, Inc. 426,036 432,169 0.7
Broadcasting/Cable 10,400 AT&T Corp.--Liberty Media Group
(Class A) 262,170 664,300 1.1
18,250 Capstar Broadcasting Corporation
(Class A) 332,445 483,625 0.8
------------ ------------ ------
594,615 1,147,925 1.9
Building Products 4,300 American Tower Corporation (Class A) 107,500 91,106 0.1
Business Services 3,300 Oracle Corporation 129,081 89,306 0.1
Capital Equipment 1,000 Eaton Corporation 67,368 91,687 0.1
1,600 Hewlett-Packard Company 114,566 126,200 0.2
------------ ------------ ------
181,934 217,887 0.3
Chemicals 2,850 E.I. du Pont de Nemours and Company 179,058 201,281 0.3
3,400 Rohm and Haas Company 124,664 152,362 0.3
------------ ------------ ------
303,722 353,643 0.6
Communications 8,400 MCI WorldCom Inc. 287,338 690,375 1.1
Equipment
Computer Products 5,100 Cisco Systems, Inc. 251,562 581,719 0.9
Computer Services 2,120 America Online, Inc. 183,815 302,630 0.5
Computer Software 10,100 Microsoft Corporation 758,175 820,625 1.3
Computers 4,850 Dell Computer Corporation 154,613 199,456 0.3
1,800 EMC Corporation 129,005 196,087 0.3
2,115 International Business Machines
Corporation 247,274 442,432 0.7
------------ ------------ ------
530,892 837,975 1.3
Conglomerates 12,450 The Dial Corporation 262,140 423,300 0.7
Consumer--Electronics 4,200 Tandy Corporation 185,086 304,238 0.5
Data Processing 4,100 Keane, Inc. 159,584 101,731 0.2
Drugs 3,200 Centocor, Inc. 126,582 141,400 0.2
Electrical Equipment 2,800 General Electric Company 234,372 295,400 0.5
Entertainment 8,400 Premier Parks Inc. 191,497 290,325 0.4
3,100 Royal Caribbean Cruises Ltd. 78,117 114,506 0.2
1,800 The Walt Disney Company 62,953 57,150 0.1
------------ ------------ ------
332,567 461,981 0.7
Financial Services 9,600 Associates First Capital Corporation
(Class A) 354,356 425,400 0.7
13,300 GreenPoint Financial Corp. 511,595 465,500 0.7
2,250 Morgan Stanley Dean Witter & Co. 200,110 223,172 0.4
5,250 Providian Financial Corporation 247,121 677,578 1.1
3,200 Wells Fargo Company 124,576 138,200 0.2
------------ ------------ ------
1,437,758 1,929,850 3.1
Financial Services 7,500 Household International, Inc. 324,064 377,344 0.6
--Consumer
Foods 9,100 Keebler Foods Company 252,152 292,337 0.5
Hardware Products 2,750 The Black & Decker Corporation 150,688 156,062 0.3
Household Products 1,600 Colgate-Palmolive Company 142,326 163,900 0.3
Information Processing 2,100 Unisys Corporation 63,286 66,019 0.1
Instruments 2,400 Millipore Corporation 50,006 73,650 0.1
Insurance 1,200 American International Group, Inc. 140,512 140,925 0.2
6,600 The Equitable Companies Incorporated 344,495 444,262 0.7
------------ ------------ ------
485,007 585,187 0.9
Laser Systems & 1,330 Uniphase Corporation 127,186 160,930 0.3
Components
Machinery 5,400 Case Corporation 138,467 186,975 0.3
9,350 Ingersoll-Rand Company 333,084 646,903 1.0
------------ ------------ ------
471,551 833,878 1.3
Machinery & 1,100 Caterpillar Inc. 61,044 70,812 0.1
Equipment 1,300 Sundstrand Corporation 66,885 93,275 0.2
------------ ------------ ------
127,929 164,087 0.3
Manufacturing 4,900 Tyco International Ltd. 267,121 398,125 0.7
Medical Technology 5,950 Johnson & Johnson 484,453 580,125 0.9
</TABLE>
Merrill Lynch Asset Builder Program, Inc., April 30, 1999
<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 Metals 3,600 Alcoa Inc. $ 135,715 $ 224,100 0.4%
States
(concluded) Natural Gas 6,100 Enron Corp. 282,639 459,025 0.8
Oil--Integrated 3,000 Mobil Corporation 239,265 314,250 0.5
Oil Services 3,300 Schlumberger Limited 207,737 210,788 0.3
Paper & Forest 2,600 International Paper Company 126,189 138,612 0.2
Products
Petroleum 7,040 Unocal Corporation 255,533 292,600 0.5
Pharmaceutical-- 7,150 American Home Products Corporation 418,740 436,150 0.7
Diversified 9,600 Bristol-Myers Squibb Company 470,369 610,200 1.0
------------ ------------ ------
889,109 1,046,350 1.7
Pharmaceutical-- 1,900 Pharmacia & Upjohn, Inc. 120,081 106,400 0.2
Prescription
Pharmaceuticals 5,400 Cardinal Health, Inc. 373,979 322,987 0.5
3,300 Pfizer Inc. 429,721 379,706 0.6
------------ ------------ ------
803,700 702,693 1.1
Printing/Publishing 3,600 World Color Press, Inc. 104,428 92,025 0.1
Retail 1,200 Best Buy Co., Inc. 56,436 57,300 0.1
4,000 Dayton Hudson Corporation 277,603 269,250 0.4
6,000 Safeway Inc. 209,605 323,625 0.5
7,900 Wal-Mart Stores, Inc. 182,773 363,400 0.6
------------ ------------ ------
726,417 1,013,575 1.6
Retail--Drug Stores 5,100 Rite Aid Corporation 169,274 118,894 0.2
Retail--Specialty 4,450 Lowe's Companies, Inc. 158,891 234,737 0.4
Semiconductors 2,000 Applied Materials, Inc. 127,983 107,125 0.2
7,290 Intel Corporation 429,302 445,601 0.7
4,950 Motorola, Inc. 299,241 396,619 0.6
------------ ------------ ------
856,526 949,345 1.5
Services 5,620 Quintiles Transnational Corp. 261,367 227,961 0.4
Telecommunications 11,636 AT&T Corp. 245,848 587,593 0.9
6,500 GTE Corporation 332,714 435,094 0.7
4,300 Lucent Technologies Inc. 237,122 258,538 0.4
------------ ------------ ------
815,684 1,281,225 2.0
Tobacco 3,250 Philip Morris Companies, Inc. 148,619 113,953 0.2
Utilities-- 5,300 Ameritech Corporation 259,718 362,719 0.6
Communication
Utilities--Electric 2,800 PECO Energy Company 95,432 132,825 0.2
5,900 Public Service Enterprise Group
Incorporated 229,216 236,000 0.4
------------ ------------ ------
324,648 368,825 0.6
Waste Management 6,000 Waste Management, Inc. 262,702 339,000 0.5
Total Investments in US Stocks 18,128,760 23,685,556 38.1
Foreign Stocks
Australia Broadcasting/Cable 3,400 The News Corporation Limited
(Convertible Preferred) (ADR)* 114,108 103,913 0.2
Diversified 22,300 Broken Hill Proprietary Company Limited 245,477 252,357 0.4
Total Stocks in Australia 359,585 356,270 0.6
Austria Paper Products 3,400 Mayr-Melnhof Karton AG 169,017 165,462 0.3
Total Stocks in Austria 169,017 165,462 0.3
Brazil Forest Products 7,800 Aracruz Celulose SA (ADR)* 109,419 156,000 0.2
Metals & Mining 7,200 Companhia Vale do Rio Doce 'A'
(Preferred) 102,963 135,923 0.2
Telecommunications 6,000 Embratel Participacoes SA (ADR)* 99,204 97,500 0.2
1,320 Telecomunicacoes Brasileiras SA--
Telebras (ADR)* 206 103 0.0
1,320 Telecomunicacoes Brasileiras SA--
Telebras (Preferred Block) (ADR)* 104,059 120,368 0.2
203,469 217,971 0.4
Total Stocks in Brazil 415,851 509,894 0.8
Canada Communications 1,800 Nortel Networks Corporation 98,208 122,737 0.2
Equipment
Computer Services 6,400 ATI Technologies Inc. 100,250 95,824 0.2
Paper Products 17,400 Domtar, Inc. 140,534 152,370 0.2
Telecommunications 10,100 Teleglobe Inc. 279,130 297,319 0.5
Total Stocks in Canada 618,122 668,250 1.1
Denmark Services 800 ISS International Service System
A/S 'B' 52,616 47,106 0.1
Total Stocks in Denmark 52,616 47,106 0.1
Finland Communications Equipment 5,150 Nokia Oyj 261,294 397,633 0.6
Holding Company 11,200 Amer Group Ltd. 206,426 138,693 0.2
Insurance 5,700 Sampo Insurance Company PLC 'A' 263,633 179,840 0.3
Paper & Forest Products 7,700 UPM-Kymmene Oyj 185,449 233,488 0.4
Real Estate 40,710 Sponda Oyj 287,017 217,592 0.4
Total Stocks in Finland 1,203,819 1,167,246 1.9
France Banking 502 Societe Generale 'A' 93,179 90,005 0.1
Electronics 5,300 Thomson CSF 197,662 173,895 0.3
Foods 811 Danone 214,836 217,166 0.3
Information Processing 515 Cap Gemini SA 83,786 78,873 0.1
Insurance 3,300 Axa 397,138 426,810 0.7
4,900 Scor 193,779 244,787 0.4
------------ ------------ ------
590,917 671,597 1.1
Merchandising 202 Carrefour SA 152,958 160,348 0.3
</TABLE>
Merrill Lynch Asset Builder Program, Inc., April 30, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Global Opportunity Portfolio (continued)
Shares Percent of
COUNTRY Industries Held Foreign Stocks Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
France Oil & Related 3,100 Elf Aquitaine SA $ 375,559 $ 482,313 0.8%
(concluded)
Semiconductor 4,300 STMicroelectronics NV (NY
Capital Registered Shares) 307,234 438,600 0.7
Equipment
Telecommunications 4,400 France Telecom SA 336,051 356,025 0.6
Utilities--Water 1,265 Vivendi 261,173 296,025 0.5
Total Stocks in France 2,613,355 2,964,847 4.8
Germany Automobile 3,950 DaimlerChrysler AG 359,011 390,685 0.6
Chemicals 1,300 BASF AG 58,335 57,032 0.1
4,000 Henkel KGaA (Preferred) 275,763 317,097 0.5
------------ ------------ ------
334,098 374,129 0.6
Diversified 3,145 RWE AG 169,576 144,131 0.2
Electronics 2,000 Siemens AG 138,334 148,176 0.2
Multi-Industry 2,768 Veba AG 170,677 152,049 0.3
Total Stocks in Germany 1,171,696 1,209,170 1.9
Ireland Banking 14,100 Bank of Ireland 298,205 282,173 0.5
Pharmaceuticals 3,000 Elan Corporation PLC (ADR)* 253,429 154,500 0.2
Total Stocks in Ireland 551,634 436,673 0.7
Italy Publishing 18,000 Mondadori (Arnoldo) Editore SpA 107,168 320,060 0.5
Total Stocks in Italy 107,168 320,060 0.5
Japan Appliances 3,600 Sony Corporation (ADR)* 298,652 333,000 0.5
Automobiles 7,000 Honda Motor Co., Ltd. 272,756 308,763 0.5
10,000 Toyota Motor Corporation 271,563 284,277 0.5
------------ ------------ ------
544,319 593,040 1.0
Banking & Financial 19,000 The Bank of Tokyo-Mitsubishi, Ltd. 239,617 280,738 0.5
25,000 The Sanwa Bank, Ltd. 254,140 280,922 0.5
------------ ------------ ------
493,757 561,660 1.0
Banking-- 19,000 The Sumitomo Bank, Ltd. 242,696 257,476 0.4
International
Computer Products 2,000 TDK Corporation 155,137 151,447 0.2
Computers 24,000 NEC Corporation 237,917 286,994 0.5
Consumer--Electronics 2,000 Rohm Company Ltd. 134,774 241,509 0.4
Cosmetics & 12,000 Kao Corporation 244,754 304,906 0.5
Toiletries
Distribution 800 Softbank Corporation 126,733 106,600 0.2
Diversified 10,000 Olympus Optical Co., Ltd. 112,425 123,103 0.2
Electrical Equipment 22,000 Fujikura Ltd. 123,474 114,751 0.2
Electronics 32,000 Fujitsu Limited 426,697 548,763 0.9
400 Keyence Corporation 51,480 60,176 0.1
12,000 Matsushita Electric Industrial
Company, Ltd. 208,379 228,428 0.4
43,000 Toshiba Corporation 284,999 288,470 0.5
------------ ------------ ------
971,555 1,125,837 1.9
Finance 2,000 Orix Corporation 143,258 161,174 0.3
Glass 72,000 Nippon Sheet Glass Company, Ltd. 225,142 275,321 0.4
Insurance 18,000 The Tokio Marine & Fire
Insurance Co. Ltd. 207,737 209,962 0.3
Machine Tools & 9,000 Minebea Company Ltd. 92,972 87,170 0.1
Machinery
Merchandising 13,000 Marui Co., Ltd. 231,712 215,958 0.3
Pharmaceuticals 5,000 Takeda Chemical Industries 180,706 217,610 0.3
Photography 7,000 Fuji Photo Film 263,964 264,738 0.4
Retail Stores 11,000 The Daimaru, Inc. 50,752 48,520 0.1
3,000 Ito-Yokado Co., Ltd. 162,191 184,403 0.3
------------ ------------ ------
212,943 232,923 0.4
Telecommunications 5 NTT Mobile Communication Network, Inc. 164,989 293,501 0.5
24 Nippon Telegraph & Telephone
Corporation (NTT) 202,179 261,635 0.4
------------ ------------ ------
367,168 555,136 0.9
Tires & Rubber 8,000 Bridgestone Corp. 195,799 214,675 0.3
Total Stocks in Japan 5,807,594 6,634,990 10.7
Netherlands Banking 7,300 ABN AMRO Holding NV 159,770 174,229 0.3
Broadcast & 6,400 Wolters Kluwer NV 'A' 244,567 279,079 0.4
Publishing
Chemicals 1,300 Akzo Nobel NV 59,423 58,821 0.1
Electronic 1,200 ASM Lithography Holding NV 48,220 50,676 0.1
Components
Foods 3,933 Koninklijke Ahold NV 152,555 146,318 0.2
Multi-Industry 2,900 Unilever NV 'A' 211,099 198,895 0.3
Total Stocks in the Netherlands 875,634 908,018 1.4
Norway Computer Software 8,300 Merkantildata ASA 63,459 83,139 0.1
Transport Services 4,600 Bergesen d.y. ASA 'B' 64,154 68,524 0.1
Total Stocks in Norway 127,613 151,663 0.2
Singapore Electronics Components 4,800 Flextronics International Ltd. 164,731 222,000 0.4
Total Stocks in Singapore 164,731 222,000 0.4
South Korea Electronics 700 Samsung Electronics 50,652 53,855 0.1
Total Stocks in South Korea 50,652 53,855 0.1
</TABLE>
Merrill Lynch Asset Builder Program, Inc., April 30, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<CAPTION>
Global Opportunity Portfolio (concluded)
Shares Percent of
COUNTRY Industries Held Foreign Stocks Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
Spain Building Materials 21,000 Uralita, SA $ 288,636 $ 196,704 0.3%
Diversified 17,200 Dinamia Capital Privado. Sociedad de
Capital Riesgo, SA 320,292 190,601 0.3
Real Estate 9,300 Metrovacesa, SA 290,232 203,260 0.3
Telecommunications 6,400 Telefonica SA 275,582 300,416 0.5
Utilities--Electric 10,800 Endesa SA 283,013 240,502 0.4
Total Stocks in Spain 1,457,755 1,131,483 1.8
Sweden Auto & Truck 4,600 Autoliv, Inc. 153,809 160,157 0.3
Automobile Parts 16,700 Haldex AB 295,290 240,116 0.4
Automobiles 5,900 Volvo AB 'B' 159,854 155,992 0.2
Banking 5,500 ForeningsSparbanken AB 69,546 120,908 0.2
25,700 Nordbanken Holding AB 180,684 161,856 0.2
------------ ------------ ------
250,230 282,764 0.4
Diversified 1,800 Custos AB 'A' 46,361 38,500 0.1
4,600 Custos AB 'B' 121,232 98,390 0.2
------------ ------------ ------
167,593 136,890 0.3
Investment Management 20,400 Investment AB Bure 104,571 124,841 0.2
Paper Products 17,000 Stora Enso Oyj 'R' 169,400 194,938 0.3
Real Estate 13,100 Castellum AB 136,644 119,862 0.2
9,800 Fastighets AB Tornet 161,306 128,097 0.2
------------ ------------ ------
297,950 247,959 0.4
Telecommunications 14,600 Telefonaktiebolaget LM Ericsson (ADR)* 371,207 393,288 0.6
Total Stocks in Sweden 1,969,904 1,936,945 3.1
Switzerland Banking 840 Credit Suisse Group (Registered Shares) 148,438 166,929 0.3
Banking & 447 UBS AG 148,673 152,113 0.2
Financial
Systems Integration 614 Swisscom AG (Registered Shares) 169,742 225,884 0.4
Total Stocks in Switzerland 466,853 544,926 0.9
United Banking 24,000 Bank of Scotland 265,851 359,352 0.6
Kingdom 10,200 HSBC Holdings PLC 270,059 389,037 0.6
17,400 Lloyds TSB Group PLC 224,420 280,280 0.4
14,600 National Westminster Bank PLC 265,203 351,885 0.6
------------ ------------ ------
1,025,533 1,380,554 2.2
Beverages 30,804 Diageo PLC 315,810 355,840 0.6
Cable Television 25,100 TeleWest Communications PLC 108,809 115,980 0.2
Services
Diversified 85,500 Billiton PLC 214,060 290,452 0.4
Drugs 7,200 AstraZeneca Group PLC 289,405 282,033 0.5
Entertainment 11,800 The Peninsular and Oriental Steam
Navigation Company 181,855 171,647 0.3
Foods 70,100 Devro PLC 358,238 154,620 0.2
Leisure 47,400 Ladbroke Group PLC 249,566 231,041 0.4
Metals & Mining 18,500 Rio Tinto PLC (Registered Shares) 225,235 323,316 0.5
Oil--Integrated 6,650 Shell Transport & Trading Company (ADR)* 242,205 302,159 0.5
Oil & Related 24,900 BP Amoco PLC 392,836 472,649 0.8
Pharmaceuticals 8,800 Glaxo Wellcome PLC 281,197 260,408 0.4
Publishing 18,400 Reed International PLC 154,309 167,524 0.3
Real Estate 26,100 The British Land Company PLC 236,610 238,469 0.4
Retail 76,400 Tesco PLC 227,294 227,250 0.3
Retail Stores 10,900 Dixons Group PLC 249,184 232,875 0.4
Telecommunications 11,900 British Telecommunications PLC 193,441 200,020 0.3
13,600 Cable & Wireless PLC 202,960 195,312 0.3
5,800 Energis PLC 157,030 155,478 0.2
10,100 Vodafone Group PLC 190,460 186,188 0.3
------------ ------------ ------
743,891 736,998 1.1
Total Stocks in the United Kingdom 5,496,037 5,943,815 9.5
Total Investments in Foreign Stocks 23,679,636 25,372,673 40.8
Total Investments in US &
Foreign Stocks 41,808,396 49,058,229 78.9
Total Investments $ 55,237,327 61,947,279 99.6
============
Unrealized Depreciation on Forward Foreign Exchange Contracts--Net** (114,215) (0.2)
Other Assets Less Liabilities 385,998 0.6
------------ ------
Net Assets $ 62,219,062 100.0%
============ ======
Net Asset Value: Class A--Based on net assets of $198,229 and 15,721
shares outstanding $ 12.61
============
Class B--Based on net assets of $41,533,211 and
3,364,802 shares outstanding $ 12.34
============
Class C--Based on net assets of $17,390,935 and
1,412,317 shares outstanding $ 12.31
============
Class D--Based on net assets of $3,096,687 and
246,594 shares outstanding $ 12.56
============
<FN>
*American Depositary Receipts (ADR).
**Forward foreign exchange contracts as of April 30, 1999
were as follows:
Foreign Expiration Unrealized
Currency Sold Date Depreciation
C$ 850,000 May 1999 $ (13,066)
NZ$ 1,100,000 June 1999 (20,652)
YEN 441,000,000 June 1999 (46,434)
YEN 341,000,000 July 1999 (34,063)
Total Unrealized Depreciation on Forward
Foreign Exchange Contracts--Net
(US$ Commitment--$7,687,249) $ (114,215)
===========
</TABLE>
Merrill Lynch Asset Builder Program, Inc., April 30, 1999
<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 13,000 The Interpublic Group of Companies,
Inc. $ 680,695 $ 1,008,313 0.7%
Banking & Financial 48,000 Bank of America Corporation 3,145,410 3,456,000 2.4
52,000 Bank One Corporation 2,539,394 3,068,000 2.1
58,000 Citigroup Inc. 3,487,132 4,364,500 3.1
62,000 Mellon Bank Corporation 3,995,900 4,607,375 3.2
10,500 State Street Corporation 582,114 918,750 0.7
------------ ------------ ------
13,749,950 16,414,625 11.5
Beverages 5,000 The Coca-Cola Company 417,140 340,000 0.2
Broadcasting--Radio 20,000 CBS Corporation 562,423 911,250 0.6
& Television 20,000 Chancellor Media Corporation 879,402 1,096,250 0.8
34,000 Clear Channel Communications, Inc. 1,529,620 2,363,000 1.7
26,000 Infinity Broadcasting Corp.
(Class A) 575,092 719,875 0.5
------------ ------------ ------
3,546,537 5,090,375 3.6
Chemicals 40,000 E.I. du Pont de Nemours and Company 2,609,487 2,825,000 2.0
Communications 55,000 Cisco Systems, Inc. 3,110,303 6,273,437 4.4
Equipment 4,000 Lucent Technologies Inc. 144,995 240,500 0.2
1,000 Nortel Networks Corporation 48,537 68,188 0.0
------------ ------------ ------
3,303,835 6,582,125 4.6
Computers 15,000 Compaq Computer Corporation 538,762 334,687 0.2
7,000 Dell Computer Corporation 143,852 287,875 0.2
15,000 International Business Machines
Corporation 2,899,362 3,137,813 2.2
------------ ------------ ------
3,581,976 3,760,375 2.6
Cosmetics 6,000 The Gillette Company 333,245 313,125 0.2
1,500 International Flavors & Fragrances
Inc. 66,304 59,250 0.1
------------ ------------ ------
399,549 372,375 0.3
Diversified 37,000 Minnesota Mining and Manufacturing
Company (3M) 2,903,201 3,293,000 2.3
Electrical Equipment 2,000 Emerson Electric Co. 108,040 129,000 0.1
55,000 General Electric Company 4,633,622 5,802,500 4.0
1,000 Honeywell Inc. 74,816 94,750 0.1
------------ ------------ ------
4,816,478 6,026,250 4.2
Electronics 8,000 Intel Corporation 363,125 489,000 0.3
1,000 Texas Instruments Incorporated 59,944 102,125 0.1
------------ ------------ ------
423,069 591,125 0.4
Energy 50,000 El Paso Energy Corporation 1,806,738 1,837,500 1.3
7,000 Enron Corporation 441,269 526,750 0.3
------------ ------------ ------
2,248,007 2,364,250 1.6
Entertainment 8,000 AT&T Corp.--Liberty Media Group
(Class A) 558,626 511,000 0.4
50,000 The Walt Disney Company 1,629,106 1,587,500 1.1
------------ ------------ ------
2,187,732 2,098,500 1.5
Financial Services 4,000 American Express Company 390,615 522,750 0.4
13,000 Federal Home Loan Mortgage Association 793,120 815,750 0.6
25,000 Federal National Mortgage Association 1,665,071 1,773,438 1.2
10,000 Franklin Resources, Inc. 546,808 400,000 0.3
40,000 The Hartford Financial Services
Group, Inc. 2,387,123 2,357,500 1.6
25,000 Morgan Stanley Dean Witter & Co. 1,941,791 2,479,688 1.7
17,000 T. Rowe Price Associates, Inc. 631,251 640,687 0.5
------------ ------------ ------
8,355,779 8,989,813 6.3
Food Merchandising 3,000 Albertson's, Inc. 107,884 154,500 0.1
6,000 Fred Meyer, Inc. 141,180 324,750 0.2
7,000 Safeway Inc. 335,473 377,562 0.3
------------ ------------ ------
584,537 856,812 0.6
Foods 5,000 ConAgra, Inc. 124,865 124,375 0.1
4,000 Wm. Wrigley Jr. Company 288,597 354,750 0.2
------------ ------------ ------
413,462 479,125 0.3
Home Furnishings 22,700 Ethan Allen Interiors, Inc. 1,190,938 1,150,606 0.8
Hotels 9,000 Marriott International, Inc. (Class A) 305,627 376,875 0.3
Household Products 1,000 Colgate-Palmolive Company 71,320 102,437 0.1
24,000 Kimberly-Clark Corporation 1,202,891 1,471,500 1.0
22,000 The Procter & Gamble Company 1,876,444 2,063,875 1.4
17,000 Unilever NV (NY Registered Shares) 1,221,062 1,103,937 0.8
------------ ------------ ------
4,371,717 4,741,749 3.3
Information 30,000 America Online, Inc. 1,007,468 4,282,500 3.0
Processing 42,000 First Data Corporation 1,587,399 1,782,375 1.2
------------ ------------ ------
2,594,867 6,064,875 4.2
Insurance 10,000 Aetna Inc. 833,053 876,875 0.6
24,500 American International Group, Inc. 2,201,819 2,877,219 2.0
------------ ------------ ------
3,034,872 3,754,094 2.6
Medical Technology 42,000 Abbott Laboratories 2,080,632 2,034,375 1.4
49,000 Boston Scientific Corporation 1,487,465 2,085,562 1.5
4,000 Guidant Corporation 136,943 214,750 0.1
1,000 Johnson & Johnson 66,560 97,500 0.1
------------ ------------ ------
3,771,600 4,432,187 3.1
Oil Services 3,000 Baker Hughes Incorporated 114,960 89,625 0.1
2,000 Diamond Offshore Drilling, Inc. 90,370 66,125 0.0
1,500 Schlumberger Limited 88,170 95,812 0.1
------------ ------------ ------
293,500 251,562 0.2
Pharmaceuticals 8,000 Amgen Inc. 385,965 491,000 0.3
74,000 Bristol-Myers Squibb Company 4,152,225 4,703,625 3.3
57,000 Merck & Co., Inc. 3,823,507 4,004,250 2.8
23,000 Pfizer Inc. 1,939,566 2,646,438 1.9
------------ ------------ ------
10,301,263 11,845,313 8.3
Photography 1,000 Eastman Kodak Company 66,840 74,625 0.1
Pollution Control 8,000 Waste Management, Inc. 396,560 452,000 0.3
Publishing 11,000 Gannett Co., Inc. 780,104 778,938 0.5
Restaurants 12,000 McDonald's Corporation 343,189 508,500 0.4
</TABLE>
Merrill Lynch Asset Builder Program, Inc., April 30, 1999
<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 7,000 Abercrombie & Fitch Co. (Class A) $ 302,245 $ 665,875 0.5%
40,000 CVS Corporation 1,485,888 1,905,000 1.3
4,000 The Gap, Inc. 108,520 266,250 0.2
27,120 Lowe's Companies, Inc. 1,275,270 1,430,580 1.0
40,000 Staples, Inc. 650,898 1,200,000 0.8
10,000 Tommy Hilfiger Corporation 633,313 698,750 0.5
80,000 Walgreen Co. 1,601,319 2,150,000 1.5
------------ ------------ ------
6,057,453 8,316,455 5.8
Retail--Stores 20,000 The TJX Companies, Inc. 621,445 666,250 0.4
46,000 Wal-Mart Stores, Inc. 1,206,862 2,116,000 1.5
------------ ------------ ------
1,828,307 2,782,250 1.9
Semiconductors 4,000 Applied Materials, Inc. 146,000 214,250 0.1
Software--Computer 12,000 Microsoft Corporation 569,030 975,000 0.7
61,000 SAP AG (Systeme, Anwendungen,
Produkte in der Datenverarbeitung)
(ADR)* 1,517,571 1,913,875 1.3
------------ ------------ ------
2,086,601 2,888,875 2.0
Telecommunications 76,000 AT&T Corp. 3,903,034 3,838,000 2.7
13,000 Ameritech Corporation 742,470 889,687 0.6
4,000 Cable & Wireless PLC (ADR)* 159,326 168,000 0.1
28,000 Equant (NY Registered Shares) 2,128,841 2,499,000 1.7
42,000 GTE Corporation 2,342,888 2,811,375 2.0
30,000 MCI WorldCom, Inc. 1,592,520 2,465,625 1.7
37,300 Sprint Corp. (FON Group) 2,303,293 3,825,581 2.7
35,000 Sprint Corp. (PCS Group) 750,417 1,483,125 1.0
8,000 Vodafone Group PLC (ADR)* 1,449,526 1,435,000 1.0
------------ ------------ ------
15,372,315 19,415,393 13.5
Toys 19,000 Mattel, Inc. 716,164 491,625 0.3
Travel & Lodging 31,000 Carnival Corporation 1,007,133 1,278,750 0.9
Total Common Stocks 104,886,484 130,910,985 91.3
Face
Amount Short-Term Securities
Commercial $ 5,000,000 CSW Credit Inc., 4.77% due 5/26/1999 4,983,438 4,983,438 3.5
Paper** 669,000 General Motors Acceptance Corp.,
4.94% due 5/03/1999 668,816 668,816 0.5
5,088,000 Metropolitan Life Insurance Company,
4.80% due 5/04/1999 5,085,965 5,085,965 3.5
5,000,000 Xerox Credit Corp., 4.79% due
5/10/1999 4,994,013 4,994,013 3.5
Total Short-Term Securities 15,732,232 15,732,232 11.0
Total Investments $120,618,716 146,643,217 102.3
============
Liabilities in Excess of Other Assets (3,320,896) (2.3)
------------ ------
Net Assets $143,322,321 100.0%
============ ======
Net Asset Value: Class A--Based on net assets of $719,497 and 38,122
shares outstanding $ 18.87
============
Class B--Based on net assets of $86,092,583 and
4,640,507 shares outstanding $ 18.55
============
Class C--Based on net assets of $51,052,701 and
2,756,077 shares outstanding $ 18.52
============
Class D--Based on net assets of $5,457,540 and
289,672 shares outstanding $ 18.84
============
<FN>
*American Depositary Receipts (ADR).
**Commercial Paper is traded on a discount basis; the interest rates
shown reflect the discount rates paid at the time of purchase by the
Portfolio.
</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 $ 150,000 The Money Store Home Equity Trust, 6.225% due
Securities* 9/15/2023 $ 149,978 $ 150,600
- --0.8%
Banking A A2 250,000 Bank of New York Co., Inc., 7.875% due 11/15/2002 276,675 265,372
- --10.9% A A1 350,000 Chase Manhattan Corporation, 7.25% due 6/01/2007 378,689 370,478
A A1 300,000 First Chicago Bank, 8.25% due 6/15/2002 321,138 320,100
BBB+ A3 300,000 Great Western Bank, 9.875% due 6/15/2001 332,535 323,760
BBB a1 300,000 KeyCorp Capital I, 5.74% due 7/01/2028 (a) 296,982 294,120
BBB+ Baa1 250,000 MBNA America Bank NA, 5.30% due 6/10/2004 (a) 246,142 239,870
A A1 200,000 Wells Fargo & Co., 8.375% due 5/15/2002 213,120 214,456
----------- -----------
2,065,281 2,028,156
Finance--3.8% A+ Aa3 120,000 Commercial Credit Co., 6.75% due 7/01/2007 122,693 122,748
A A2 250,000 Household Finance Corp., 6% due 5/01/2004 249,945 249,945
BBB Baa3 320,000 Newcourt Credit Group, 6.875% due 2/16/2005 318,915 327,930
----------- -----------
691,553 700,623
Finance-- A A2 225,000 Bear Stearns Companies, Inc., 6.875% due 10/01/2005 231,237 229,941
Other--4.1% AAA Aaa 240,000 Florida Windstorm Under, 7.125% due 2/25/2019 238,682 242,433
BBB+ Baa1 275,000 Paine Webber Group Inc., 9.25% due 12/15/2001 294,982 294,737
----------- -----------
764,901 767,111
Financial A+ aa3 100,000 Citigroup Capital II, 7.75% due 12/01/2036 100,170 104,164
Services BBB- Baa2 100,000 Commercial Net Lease Realty, 7.125% due 3/15/2008 99,729 94,507
- --5.8% A- A3 38,000 Donaldson Lufkin & Jenrette Inc., 6.875% due 11/01/2005 37,694 38,765
BBB- Baa3 150,000 Hospitality Properties Trust, 7% due 3/01/2008 149,730 138,905
A+ Aa3 100,000 Morgan Stanley, Dean Witter, Discover & Co., 5.625%
due 1/20/2004 99,545 98,530
A+ A2 200,000 Prudential Insurance Co., 6.375% due 7/23/2006 199,116 198,636
Salomon Smith Barney Holdings, Inc.:
A Aa3 100,000 7.125% due 10/01/2006 104,029 104,275
A Aa3 150,000 7.375% due 5/15/2007 149,867 158,646
BBB Baa2 150,000 Spieker Properties LP, 7.35% due 12/01/2017 151,550 143,687
----------- -----------
1,091,430 1,080,115
</TABLE>
Merrill Lynch Asset Builder Program, Inc. April 30, 1999
<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>
Financial Associates Corp. NA:
Services-- AA- Aa3 $ 100,000 7.40% due 5/15/2006 $ 108,969 $ 105,706
Consumer AA- Aa3 250,000 6.95% due 11/01/2018 248,530 251,115
- --3.5% A aa3 150,000 CIT Capital Trust I, 7.70% due 2/15/2027 149,316 146,140
A- Baa1 150,000 Finova Capital Corp., 6.25% due 11/01/2002 149,425 150,651
----------- -----------
656,240 653,612
Industrial-- A+ A1 100,000 Anheuser-Busch Companies Inc., 8.75% due 12/01/1999 107,905 101,983
Consumer A A2 100,000 Bass North America, Inc., 8.125% due 3/31/2002 105,928 105,145
Goods--6.7% BBB- Baa3 250,000 Flowers Industries Inc., 7.15% due 4/15/2028 248,675 233,342
A A1 80,000 PepsiCo, Inc., 5.75% due 1/02/2003 79,595 79,747
A A2 500,000 Philip Morris Companies, Inc., 7% due 7/15/2005 520,315 512,965
AA Aa2 200,000 Wal-Mart Stores, Inc., 8.50% due 9/15/2024 207,350 223,616
----------- -----------
1,269,768 1,256,798
Industrial-- AA+ Aa1 175,000 BP America Inc., 9.375% due 11/01/2000 200,263 184,555
Energy--9.7% A- A3 460,000 Burlington Resources, 7.375% due 3/01/2029 469,226 475,181
BBB Baa1 250,000 Noram Energy Corp., 6.375% due 11/01/2013 (a) 250,393 246,360
Occidental Petroleum Corp.:
BBB Baa3 250,000 6.50% due 4/01/2005 248,575 244,418
BBB Baa3 250,000 7.65% due 2/15/2006 249,568 257,863
BBB+ Baa1 400,000 Sonat Inc., 7% due 2/01/2018 412,068 394,364
----------- -----------
1,830,093 1,802,741
Industrial-- A A2 200,000 AlliedSignal Inc., 6.20% due 2/01/2008 199,732 196,532
Manufacturing BBB+ A3 200,000 Applied Materials Inc., 6.75% due 10/15/2007 199,870 199,850
- --18.7% BBB+ Baa2 250,000 Borg-Warner Automotive, 7.125% due 2/15/2029 246,505 242,495
Bowater Inc.:
BBB Baa2 150,000 9% due 8/01/2009 168,450 168,663
BBB Baa2 100,000 9.375% due 12/15/2021 120,924 119,704
A+ A2 200,000 Danaher Corp., 6% due 10/15/2008 198,926 193,044
Ford Motor Credit Co.:
A A1 200,000 8.20% due 2/15/2002 213,154 212,126
A A1 300,000 5.788% due 8/27/2006 (a) 299,792 299,331
AAA Aaa 245,000 General Electric Capital Corp., 8.50% due 7/24/2008 297,577 286,608
General Motors Acceptance Corp.:
A A2 100,000 8.50% due 1/01/2003 108,510 108,289
A A2 100,000 7.125% due 5/01/2003 105,785 103,976
A A2 200,000 8.75% due 7/15/2005 226,232 225,798
BBB- Baa2 200,000 Georgia-Pacific Group, 7.25% due 6/01/2028 202,752 197,684
BBB+ Baa1 300,000 Lockheed Martin Corporation, 7.75% due 5/01/2026 332,997 323,862
A A2 100,000 Lucent Technologies Inc., 6.50% due 1/15/2028 103,618 97,068
BBB Baa2 125,000 Meritor Automotive Inc., 6.80% due 2/15/2009 124,441 123,294
A A1 90,000 PPG Industries Inc., 6.50% due 11/01/2007 89,725 89,171
BBB Baa2 300,000 Union Carbide Corp., 6.25% due 6/15/2003 295,506 297,453
----------- -----------
3,534,496 3,484,948
Industrial BBB- Baa3 100,000 CBS Corporation, 7.15% due 5/20/2005 104,172 102,587
- --Services A A2 150,000 Carnival Corp., 7.70% due 7/15/2004 156,745 159,352
- --11.6% A A2 200,000 Computer Sciences Corp., 6.25% due 3/15/2009 198,968 199,207
A A2 213,377 Disney Custom Repackaged Asset Vehicle-403,
6.85% due 1/10/2007* 213,232 218,135
A A2 200,000 First Data Corporation, 6.375% due 12/15/2007 199,486 200,452
BBB- Baa3 200,000 The Kroger Co., 8.15% due 7/15/2006 223,870 217,102
May Department Stores Co.:
A A1 125,000 9.875% due 12/01/2002 142,167 141,499
A A1 150,000 6.70% due 9/15/2028 157,788 146,603
BBB- Baa3 200,000 News America Holdings, Inc., 8.50% due 2/15/2005 223,550 218,946
A- A2 250,000 Sears Roebuck & Company, 9.375% due 11/01/2011 311,083 302,565
AA- A2 120,000 TCI Communications Inc., 8.75% due 8/01/2015 140,767 143,936
BBB Baa2 100,000 Time Warner Entertainment Co., 8.375% due 3/15/2023 107,029 116,052
----------- -----------
2,178,857 2,166,436
Transpor- BBB+ Baa2 50,000 Burlington North Santa Fe, 6.75% due 3/15/2029 49,681 48,169
tation--3.4% BBB Baa2 250,000 CSX Corp., 7.90% due 5/01/2017 279,712 271,510
BBB- Baa3 250,000 Delta Airlines, 10.125% due 5/15/2010 312,802 312,270
----------- -----------
642,195 631,949
US Government AAA Aaa 300,000 US Treasury Notes, 4.75% due 11/15/2008 288,797 286,545
Obligations
- --1.5%
Utilities-- A- A2 300,000 ALLTEL Corporation, 6.75% due 9/15/2005 295,380 310,317
Communi- AA+ Aa3 100,000 Ameritech Capital Funding, 6.45% due 1/15/2018 105,010 97,437
cations-- A A3 250,000 Frontier Corp., 6% due 10/15/2013 (a) 249,660 244,702
- -9.7% A Baa1 150,000 GTE Corp., 6.84% due 4/15/2018 154,197 149,852
AAA Aa1 125,000 Indiana Bell Telephone Co., Inc., 7.30% due 8/15/2026 133,639 132,869
MCI WorldCom Inc.:
BBB+ Baa2 200,000 7.75% due 4/01/2007 217,758 216,228
BBB+ Baa2 200,000 6.125% due 4/15/2012 (a) 199,466 201,392
BBB+ Baa1 100,000 Sprint Capital Corporation, 6.375% due 5/01/2009 99,412 99,412
A- A3 365,000 US West Capital Funding Inc., 6.50% due 11/15/2018 362,905 350,502
----------- -----------
1,817,427 1,802,711
Utilities-- BBB Baa2 200,000 Arizona Public Service, 5.875% due 2/15/2004 199,902 198,924
Electric--5.5% A+ A1 100,000 Consolidated Edison, Inc., 6.25% due 2/01/2008 100,000 100,429
AA- Aa3 300,000 Florida Power Corp., 6.875% due 2/01/2008 327,957 310,620
A A1 250,000 Mississippi Power, 6.05% due 5/01/2003 255,620 250,820
A A2 150,000 Virginia Electric & Power Co., 8.625% due
10/01/2024 166,200 165,642
----------- -----------
1,049,679 1,026,435
Total Investments in Bonds & Notes--95.7% 18,030,695 17,838,780
</TABLE>
Merrill Lynch Asset Builder Program, Inc.
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<CAPTION>
Quality Bond Portfolio (concluded)
Face
INDUSTRIES Amount Bonds & Notes Cost Value
<S> <C> <S> <C> <C>
Commercial $ 440,000 Associates First Capital Corp., 4.95% due 5/03/1999 $ 440,000 $ 440,000
Paper**--2.3%
Total Investments in Short-Term Securities--2.3% 440,000 440,000
Total Investments--98.0% $18,470,695 18,278,780
===========
Other Assets Less Liabilities--2.0% 364,105
-----------
Net Assets--100.0% $18,642,885
===========
Net Asset Value: Class A--Based on net assets of $56,733 and 5,722 shares
outstanding $ 9.91
===========
Class B--Based on net assets of $12,208,073 and 1,230,806
shares outstanding $ 9.92
===========
Class C--Based on net assets of $4,840,536 and 488,028
shares outstanding $ 9.92
===========
Class D--Based on net assets of $1,537,543 and 155,039
shares outstanding $ 9.92
===========
<FN>
*Subject to principal paydowns.
**Commercial Paper is traded on a discount basis; the interest rate
shown reflects the discount rate paid at the time of purchase by the
Portfolio.
(a)Floating Rate Note.
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (in US dollars)
<CAPTION>
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 $ 697,745 11.50 % 6/01/2019 $ 774,469
Agency Federal Home Loan Mortgage Corporation
Mortgage-Backed --Gold Program 500,000 5.50 TBA (1) 485,625
Obligations*-- Federal Home Loan Mortgage Corporation
86.5% --Gold Program 2,843,245 5.50 3/01/2013-12/01/2013 2,762,942
Federal National Mortgage Association 2,973,243 6.00 10/01/2028 2,881,251
Federal National Mortgage Association-
-Dwarf 1,960,119 6.50 2/01/2012-2/01/2014 1,976,035
Federal National Mortgage Association
--Multi-Family #0073313++++ 2,004,118 6.18 1/01/2006 2,006,616
Government National Mortgage Association 1,000,000 5.50 3/15/2029-4/15/2029 946,870
Government National Mortgage Association 445,362 6.50 1/15/2028 442,436
Government National Mortgage Association 3,137,114 7.00 11/15/2027-8/15/2028 3,184,032
Government National Mortgage Association 3,417,610 7.50 10/15/2025-3/15/2028 3,523,337
Total US Government Agency Mortgage-Backed
Obligations (Cost--$19,069,536) 18,983,613
US Government US Treasury Notes 2,000,000 7.75 2/15/2001 2,089,380
Obligations--11.5% US Treasury STRIPS** 1,500,000 5.635++ 8/15/2019 441,540
Total US Government Obligations
(Cost--$2,581,129) 2,530,920
SHORT-TERM Face
SECURITIES Amount Issue
Repurchase $1,000,000 Morgan Stanley & Company, purchased on 4/30/1999 to
Agreements***-- yield 4.83% on 5/03/1999 1,000,000
4.6%
Total Investments in Short-Term Securities (Cost--$1,000,000) 1,000,000
Total Investments (Cost--$22,650,665)--102.6% 22,514,533
Liabilities in Excess of Other Assets--(2.6%) (564,152)
-----------
Net Assets--100.0% $21,950,381
===========
Net Asset Value: Class A--Based on net assets of $636,522 and 61,400
shares outstanding $ 10.37
===========
Class B--Based on net assets of $15,132,521 and
1,460,143 shares outstanding $ 10.36
===========
Class C--Based on net assets of $4,648,904 and
448,613 shares outstanding $ 10.36
===========
Class D--Based on net assets of $1,532,434 and
147,777 shares outstanding $ 10.37
===========
<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.
*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.
++Represents the yield-to-maturity on this zero coupon issue at the
time of purchase by the Portfolio.
++++Underlying multi-family loans have prepayment protection by
means of lockout periods and/or yield maintenance premiums.
</TABLE>
Merrill Lynch Asset Builder Program, Inc., April 30, 1999
EQUITY PORTFOLIO CHANGES
For the Quarter Ended April 30, 1999
FUNDAMENTAL
VALUE PORTFOLIO
Additions
Dana Corporation
Eaton Corporation
Hercules Incorporated
Honeywell Inc.
Philip Morris Companies, Inc.
Deletions
Bristol-Myers Squibb Company
Pharmacia & Upjohn, Inc.
GLOBAL
OPPORTUNITY
PORTFOLIO
Additions
AT&T Corp.
AT&T Corp.--Liberty Media Group
(Class A)
Akzo Nobel NV
American International Group, Inc.
American Tower Corporation (Class A)
Applied Materials, Inc.
Aracruz Celulose SA (ADR)
BASF AG
*Banca di Roma
The Bank of Tokyo-Mitsubishi, Ltd.
Bergesen d.y. ASA 'B'
Best Buy Co., Inc.
Bridgestone Corp.
The British Land Company PLC
Broken Hill Proprietary Company Limited
Caterpillar Inc.
Centocor, Inc.
Colgate-Palmolive Company
Companhia Vale do Rio Doce 'A' (Preferred)
The Daimaru, Inc.
Dayton Hudson Corporation
Delphi Automotive Systems Corporation
Dixons Group PLC
Domtar, Inc.
Eaton Corporation
Elan Corporation PLC (ADR)
Embratel Participacoes SA (ADR)
*First Union Corporation
Ford Motor Company
Hewlett-Packard Company
Honda Motor Co., Ltd.
Household International, Inc.
International Paper Company
Keyence Corporation
Ladbroke Group PLC
NEC Corporation
The News Corporation Limited
(Convertible Preferred) (ADR)
Nippon Sheet Glass Company, Ltd.
Oracle Corporation
The Peninsular and Oriental Steam
Navigation Company
Pharmacia & Upjohn, Inc.
Philip Morris Companies, Inc.
Rohm and Haas Company
Samsung Electronics
The Sanwa Bank, Ltd.
Siebel Systems, Inc.
Softbank Corporation
Sony Corporation (ADR)
The Sumitomo Bank, Ltd.
Sundstrand Corporation
TDK Corporation
Takeda Chemical Industries
Telecomunicacoes Brasileiras SA--
Telebras (ADR)
Telecomunicacoes Brasileiras SA--
Telebras (Preferred Block) (ADR)
Tesco PLC
Toshiba Corporation
Toyota Motor Corporation
Uniphase Corporation
Unisys Corporation
The Walt Disney Company
Wells Fargo Company
Deletions
3Com Corporation
Allmerica Financial Corporation
BMC Software, Inc.
*Banca di Roma
Beckman Coulter Inc.
Bethlehem Steel Corporation
Burlington Northern Santa Fe Corp.
Compaq Computer Corporation
El Paso Energy Corporation
Federal-Mogul Corporation
*First Union Corporation
Fox Entertainment Group, Inc. (Class A)
GenCorp Inc.
General Motors Corporation
HEALTHSOUTH Corporation
Heller Financial, Inc.
LucasVarity PLC
Magna International, Inc. 'A'
Mattel, Inc.
Micron Technology, Inc.
Morton International, Inc.
Nabisco Holdings Corp. (Class A)
Nestle SA (Registered Shares)
Novartis AG (Registered Shares)
Orion-Yhtyma OY 'B'
Spectra-Physics AB 'A'
Tele-Communications, Inc. (Class A)
Tele-Communications TCI Ventures Group (Class A)
Telecom Italia SpA
Texas Utilities Company
Thomson Travel Group PLC
UNUM Corporation
USX-U.S. Steel Group
Valora Holding AG
GROWTH
OPPORTUNITY
PORTFOLIO
Additions
AT&T Corp.--Liberty Media Group
(Class A)
Abbott Laboratories
Equant (NY Registered Shares)
The Hartford Financial Services Group, Inc.
Nortel Networks Corporation
Deletions
Baan Company NV
FORE Systems, Inc.
Federated Department Stores, Inc.
Network Appliance, Inc.
Newbridge Networks Corporation
Nextel Communications, Inc. (Class A)
Northern Telecom Limited (Nortel)
PeopleSoft, Inc.
STMicroelectronics NV (NY Registered
Shares)
Telefonaktiebolaget LM Ericsson (ADR)
Viacom, Inc. (Class A)
[FN]
*Added and deleted in the same quarter.
