MERRILL LYNCH
ASSET BUILDER
PROGRAM, INC.
FUND LOGO
Annual Report
January 31, 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.
Important
Tax Information
Fundamental Value Portfolio*
Of the ordinary income distributions paid by the Fundamental Value
Portfolio to shareholders of record on July 9, 1998 and December 15,
1998, 17.49% and 100%, respectively, qualify for the dividends
received deduction for corporations. Additionally, the Portfolio
paid long-term capital gains distributions of $.047674 and $.563331
per share to shareholders of record on July 9, 1998 and December 15,
1998, respectively.
Global Opportunity Portfolio
Of the ordinary income distributions paid by the Global Opportunity
Portfolio to shareholders of record on July 9, 1998, 7.64% qualifies
for the dividends recevied deduction for corporations. Additionally,
there were no long-term capital gains distributions paid by the
Portfolio during the fiscal year.
US Government Securities Portfolio*
Of the net investment income distributions paid monthly by the US
Government Securities Portfolio during the fiscal year ended January
31, 1999, 15.62% is attributable to income from Federal obligations.
None of these monthly distributions qualify for the dividends
received deduction for corporations. Additionally, the Portfolio
paid a short-term capital gains distribution of $.120644 per share
and a long-term capital gains distribution of $.052656 per share to
shareholders of record on December 22, 1998.
Quality Bond Portfolio*
Of the net investment income distributions paid monthly by the
Quality Bond Portfolio during the fiscal year ended January 31,
1999, 10.91% is attributable to income from Federal obligations.
None of the monthly distributions qualify for the dividends received
deduction for corporations. Additionally, the Portfolio paid a short-
term capital gains distribution of $.055244 per share and a long-
term capital gains distribution of $.013743 per share to
shareholders of record on December 22, 1998.
Growth Opportunity Portfolio*
Of the ordinary income distributions paid by the Growth Opportunity
Portfolio to shareholders of record on July 9, 1998 and December 15,
1998, 17.42% and 53.86%, respectively, qualify for the dividends
received deduction for corporations. Additionally, the Portfolio
paid long-term capital gains distributions of $.011744 and $.277660
per share to shareholders of record on July 9, 1998 and December 15,
1998, respectively.
[FN]
*All long-term capital gain distributions paid by the Portfolios are
subject to the 20% tax rate.
Merrill Lynch Asset Builder Program, Inc., January 31, 1999
DEAR SHAREHOLDER
We are pleased to provide you with this annual 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--16 of
this report to shareholders.
Fundamental Value Portfolio
Fiscal Year in Review
The year ended January 31, 1999 was characterized by significant
stock market volatility. Early in the period, investors' lingering
concerns regarding the potential fallout from the Asian crisis
constrained share price performance. These fears subsided at mid-
year as reassuring economic statistics were released, causing the
equity market to soar to record highs. The market subsequently
entered a turbulent period in August and September, reflecting a
confluence of adversities: mounting economic strains in Russia and
Brazil; the near collapse of a high-profile hedge fund; and a
softening of economic conditions in the United States. Gross
domestic product (GDP) growth slowed to a +1.8% pace in the second
quarter compared to the robust first-quarter rate of +5.5%, with the
bulk of the weakness on the industrial side of the economy as
consumer spending remained vibrant. These adverse developments
generated considerable investor anxiety, ultimately causing the
stock market to plummet 19.4% from its intra-period high. The market
eventually bottomed in early October and then staged a sharp rally.
Spurring the advance was a bevy of favorable developments, most
significantly central bank easings in the United States and abroad.
Also comforting investors was the solid snapback in GDP growth
(+3.7% and +5.6% in the third and fourth quarters of 1998,
respectively) and a resurgence of merger and acquisition activity.
For the year ended January 31, 1999, the unmanaged Standard & Poor's
(S&P) 500 Index total return was +32.5%.
The solid gains achieved by the S&P 500 Index during the year masked
the considerable weakness experienced by many component issues.
Indeed, the 50-largest issues constituted the bulk of the Index's
gain, with 45% of the component issues down for the year. A broader
indication of the market's performance is revealed by the unmanaged
Value Line Composite Index--comprised of 1500 stocks--which
declined 3.62% in the year. Small-capitalization issues delivered
disappointing returns in the year, with the unmanaged Russell 2000
Index declining 0.66%.
During the 12-month period ended January 31, 1999, our value style
of investing faced a challenging environment. With emerging market
concerns still at the forefront, investors shunned economically
sensitive issues and instead gravitated toward richly valued, safe-
haven growth stocks. Equities such as Intel Corp., Dell Computer
Corp., America Online Inc. and General Electric Co. proved to be
investor favorites, while issues such as The Boeing Company, Sears,
Roebuck and Co. and Exxon Corporation were ignored. Evidence of this
was the unmanaged S&P Barra Growth Index, which soared 43.7% during
the 12-month period while the S&P Barra Value Index gained only a
modest 15.5%. Similarly, the unmanaged Morgan Stanley Consumer Index
rose 22.1% during the period while the unmanaged Morgan Stanley
Cyclical Index declined 2.5%. We believe this performance dichotomy
has created compelling opportunities in the value investment
universe. Indeed, the valuation disparity between "growth" and
"value" stands at a 20-year high. The S&P Barra Growth Index
commands a multiple of 10 times book value per share and 4.5 times
sales per share, compared to the S&P Barra Value Index at a modest
2.7 times book value and 1.6 times sales. We believe this valuation
gap will likely narrow as 1999 progresses.
With the difficult value investment backdrop, Fundamental Value
Portfolio's Class A, Class B, Class C and Class D Shares generated
total returns of +8.51%, +7.32%, +7.23% and +8.19%, respectively,
for the year ended January 31, 1999. Examining the Portfolio's
performance by sector reveals the adverse influence of our heavy
exposure to the energy, basic industry and financial sectors, as
these areas lagged the solid gains of the S&P 500 Index during the
year. All three areas reported a general deterioration in operating
results in the period. We believe a continued solid commitment to
these sectors is warranted based on attractive valuations and
turnaround potentials. For example, we continue to believe that the
dramatic production cutbacks announced in the energy industry,
coupled with an improved demand outlook, should lead to better
fortunes for this very depressed sector. Likewise, a curtailment of
capacity expansion in the paper industry should lead to enhanced
pricing and improved results for this out-of-favor sector. Lastly,
we believe the financial industry, which was plagued by emerging
markets troubles in 1998, should benefit from a more controlled
exposure to these volatile areas. Another impediment to our perfor-
mance was our exposure to small-to-mid capitalization equities,
where we had committed one-quarter of the Portfolio's assets. We
continue to believe our holdings in this area offer bright long-term
prospects at very modest valuation levels.
On the positive side, our enhanced commitment to the technology and
consumer staple segments favorably impacted the Portfolio's
performance during the 12-month period ended January 31, 1999. In
the technology area, we initiated positions in Motorola, Inc., Texas
Instruments Incorporated, 3Com Corporation and Hewlett-Packard
Company, when these shares encountered selling pressure because of
earnings concerns. This strategy proved fortuitous as technology
issues rebounded sharply late in the period, coinciding with
impressive earnings turnarounds. In the consumer area, we initiated
positions in General Mills, Inc. and Kimberly-Clark Corporation, two
reasonably valued issues in the richly valued consumer segment of
the market. Both companies reported solid progress in operating
results toward the end of the year, generating favorable share price
performance.
Other issues that contributed positively to the Portfolio's
performance in 1998 included Ford Motor Company, General Motors
Corporation, Kmart Corporation, AT&T Corp., Pharmacia & Upjohn,
Inc., Novell, Inc., International Business Machines Corporation and
Enron Corporation, each of which rose more than 40% during the
period. Positions eliminated during the period at sizable gains
included Humana Inc., Dow Jones & Co., Inc., Pharmaceutical Product
Development, Inc., US West Media Group Inc., and Black & Decker
Corp.
Although the year ended January 31, 1999 proved to be a challenging
one for us, we believe the Portfolio is favorably positioned for the
year ahead. We have exposure to many attractively valued equities
that offer favorable turnaround potentials and bright appreciation
prospects. The Portfolio's potential is further evidenced by its
modest valuation: a price/earnings ratio of 17.0 times 1999
estimated earnings per share and a price/book value per share ratio
of 2.2 times represent sizable discounts to the valuations accorded
the S&P 500 Index. We look forward to a rewarding 1999, and remain
confident that our bottom-up, value approach to stock selection will
continue to benefit shareholders with a long-term investment
horizon.
Global Opportunity Portfolio
Fiscal Year in Review
For the fiscal year ended January 31, 1999, Global Opportunity
Portfolio's Class A, Class B, Class C and Class D Shares had total
returns of +9.63%, +8.48%, +8.40% and +9.35%, respectively.
As of January 31, 1999, the asset allocation for Global Opportunity
Portfolio was: US stocks, 40% of net assets; foreign stocks, 30%; US
bonds, 14%; foreign bonds, 15%; and cash reserves, 1%.
During the fourth quarter of 1998 and the month of January, 1999, a
strong rebound in the US and foreign equity markets more than offset
the significant corrections that took place in the previous three
months. Throughout the fiscal year ended January 31, 1999, US
equities again provided the highest total returns relative to
foreign equities and US fixed-income securities. Consequently, our
decision to increase US equity representation during the January 31,
1999 fiscal year at the expense of cash reserves had a positive
impact on overall performance.
In the foreign equity sector, the overweighting of Europe relative
to Japan and emerging markets had a favorable effect on performance
as European equity markets outperformed Japan and the majority of
emerging markets during the year. However, both the US and European
stock markets were characterized by significant outperformance for a
narrow group of large-capitalization equities. During the fourth
quarter of 1998, we increased our representation in equities of this
type, although the Portfolio was underweighted for much of 1998 in
those equities that dominated the performance of the unmanaged
benchmark Standard & Poors 500 Index and the unmanaged Morgan
Stanley Capital International Europe, Australia Far East Index for
the fiscal year. Our US and foreign bond commitments positively
contributed to overall performance, particularly in the third
quarter of 1998 when there was significant US and foreign equity
markets weakness.
Growth Opportunity Portfolio
Fiscal Year in Review
For the fiscal year ended January 31, 1999, Growth Opportunity
Portfolio's Class A, Class B, Class C and Class D Shares had total
returns of +42.02%, +40.41%, +40.39% and +41.59%, respectively. The
Portfolio outperformed the Lipper Analytical Services Growth Funds
Average total return of +27.17% and the unmanaged Standard & Poor's
500 (S&P 500) Index total return of +32.49%.
Merrill Lynch Asset Builder Program, Inc., January 31, 1999
A number of factors contributed to the strong absolute and relative
investment returns of Growth Opportunity Portfolio for the fiscal
year ended January 31, 1999. During the 12-month period, we
continued to have a positive outlook for the real and nominal growth
of consumer spending and emphasized discount and specialty retail
store companies. Wal-Mart Stores, Inc. was one of the top ten
holdings and a meaningful contributor to total investment returns
during the fiscal year. Other meaningful contributors to the
positive performance in the retailing industry were Staples, Inc.,
CVS Corporation, The Gap, Inc. and Walgreen Co. Another significant
industry sector was telecommunications, where equity investments in
AT&T Corp., MCI WorldCom, Inc. and Sprint Corporation were major
contributors to the overall positive returns. The deregulation of
telecommunications services around the world, as well as the rapid
growth in demand for sophisticated data communications by commercial
customers created relatively profitable and rapidly growing
businesses for the largest global communications service companies.
Also, selective investments in the technology sector contributed to
the positive investment returns. Cisco Systems, Inc. was the largest
equity holding at the end of the fiscal year and a major contributor
to investment returns. Other technology companies with meaningful
contributions to returns were Microsoft Corporation, Compaq Computer
Corporation, Dell Computer Corporation, Intel Corporation and Texas
Instruments Incorporated. Other individual equity holdings that
contributed to performance were Pfizer Inc., Bristol-Myers Squibb
Company, General Electric Company and Unilever NV. Seven of the top
ten equity holdings had total returns during the year which exceeded
the total return of the S&P 500.
During the first fiscal quarter, we significantly reduced the
Portfolio weightings in the communications equipment industry and
the oil services industry. Consequently, Portfolio returns were
improved by the underweighting of the oil services sector during the
remainder of the fiscal year as earning expectations and stock
prices declined. During the declines in the US equity markets
between mid-July and early October, 1998, we maintained a
perspective of positive real growth for the US economy and increased
corporate profits in 1999, which we believed would produce positive
equity returns for the upcoming year. Keeping shareholders' assets
invested during that turbulent period was a contributor to the
positive returns in fiscal 1999.
Portfolio Matters
For the quarter ended January 31, 1999, total returns for Growth
Opportunity Portfolio's Class A, Class B, Class C and Class D Shares
were +25.79%, +25.34%, +25.40% and +25.67%, respectively. These
returns outperformed the Lipper Growth Funds Average of +19.41% and
the unmanaged S&P 500 of +16.86%. Since the recent bottom of the US
stock market on October 8, 1998 until January 31, 1999, the total
returns of the Portfolio were significantly above the total returns
of all of our unmanaged benchmarks. The Portfolio's returns came
from equity holdings in the retailing, telecommunications and
technology industries.
The Portfolio's top five industry weightings are telecommunications,
banking & financial, pharmaceuticals, specialty retailing and
computers. The top five individual stock holdings are Cisco Systems,
Inc., General Electric Company, Microsoft Corporation, Compaq
Computer Corporation and Merck & Co., Inc. Cash and cash equivalents
in the Portfolio at the end of the January quarter were
approximately 6.8% of net assets.
We continue to have a positive outlook for overall real growth in
the US economy in 1999 and remain fully invested in common stocks
and have added new companies in the retailing, telecommunications,
financial services, computer, radio broadcasting and diversified
manufacturing industries.
Quality Bond Portfolio
Fiscal Year in Review
For the 12-month period ended January 31, 1999, Quality Bond
Portfolio's Class A, Class B, Class C and Class D Shares had total
returns of +8.57%, +7.88%, +7.83% and +8.41%, respectively, compared
to the total return of +8.40% for the unmanaged Merrill Lynch
Corporate Master Bond Index. The Portfolio's overall performance was
enhanced throughout much of this period given the Portfolio's
exposure to the US Treasury market, a sector that significantly
outperformed other domestic fixed-income sectors. In response to
heightened investor nervousness and increased market volatility, we
believed it was appropriate to maintain a 5%--15% position in US
Treasury securities. Portfolio performance also benefited from an
underweighted position in cyclical industries such as paper
producers, chemical manufacturers and metals and mining entities, as
well as an underweighted position in the money centers banks
compared to an overweighted position in regional banks.
Portfolio Matters
For the three month period ended January 31, 1999, the US fixed-
income market continued to exhibit significant levels of volatility
as market psychology shifted to account for a number of financial
and economic factors. These factors included year-end funding
pressures, continued strength in domestic consumer spending, a
rebound from the recent slowdown in the manufacturing sector,
continued strength in the service sector, the devaluation of the
Brazilian real and the weakening of the US dollar relative to the
Japanese yen. Furthermore, the Federal Reserve Board indicated a
shift away from their accommodative bias toward a more neutral
monetary policy. During the period, yields in the two-year--30-year
sector of the US Treasury yield curve rose, with the five-year
sector affected the most, although the positive inflationary outlook
should contain US Treasury securities to a reasonably narrow range.
On the other hand, yield spread relationships for investment-grade
corporate bonds rallied sharply from the wide levels of 1998,
although Brazil's economic difficulties and the subsequent
devaluation of the real negated some of the gains during the final
days of the period. Within the investment-grade sector, yield
spreads are better by 50%--60% from the widest levels incurred
during the Russian crisis in 1998. However, current yield spread
relationships now contain a more realistic liquidity component.
Specifically, investors are now demanding wider yield spreads to
satisfy individual risk parameters, which in the end, should make
the market more orderly and less volatile for investment-grade debt.
The US Treasury market, which had rallied into the final quarter of
1998 given the Federal Reserve Board's accommodative posture, lost
some steam after the release of the minutes from the November
Federal Open Market Committee meeting, which indicated that a shift
from an easing mode to neutral posture was implemented. Clearly the
Federal Reserve Board wants to monitor the effects that the recent
moves have had on the state of the domestic economy. Consequently,
the US Treasury market sold off during the third week of December,
although the backup was short-lived as investors quickly found value
in the higher yields that developed. Throughout this period, we
maintained duration within close proximity of the unmanaged
benchmark Merrill Lynch Corporate Master Bond Index.
As we entered 1999, the expected issuance of new corporate debt
underwritings rose and included such benchmark issuers as Ford Motor
Company, General Motors Corporation, Morgan Stanley Dean Witter,
Anheuser-Busch Cos. and AT&T Capital Corp. Despite the frequency of
new issues, investor demand far outpaced supply with orders
typically exceeding issue size by at least 200%. Market volatility
and credit risk concerns continue to encourage fixed-income
investors into the investment-grade market. Therefore, we expect new-
issue offerings to remain well subscribed as we proceed into this
year.
During the January quarter, capital market nervousness heightened
following the announcement that Brazil would allow its currency to
trade outside of the existing range. Consequently, corporate yield
spreads trended slightly wider during the second week of January,
although the impact on the investment-grade market was minimal and
contained to those sectors directly impacted by the Brazil
situation. By January 1999, strong investor demand for new corporate
issuance compressed yield spreads even further. However, the US
Treasury market continued to come under the weight of a strong
domestic economy and investor concern that the Federal Reserve Board
may well find itself in the position of having to respond to a
economy that is moving forward at too great a speed.
US Government Securities Portfolio
Fiscal Year in Review
For the 12-month period ended January 31, 1999, US Government
Securities Portfolio's Class A, Class B, Class C and Class D Shares
had total returns of +8.39%, +7.48%, +7.43% and +8.12%,
respectively. During the fiscal year ended January 31, 1999, US
Government Securities Portfolio performed very well because of our
strategy to avoid prepayment-sensitive mortgage-backed securities
(MBS) and concentration in MBS investments in discount priced MBS as
interest rates declined in the first three quarters. Additionally,
we used long US Treasury Strips to maintain duration during the
period, greatly contributing to the Portfolio's performance as the
credit markets suffered severe liquidity problems and investors
sought the safety of US Treasury bonds. Although we significantly
reduced our US Treasury position when interest rates hit their
historical lows, we were still invested in discount MBS and
therefore had longer duration than the MBS Index for the fiscal
year. This greatly enhanced the performance of the Portfolio for the
12-month period, with the greatest performance coming during the
first three quarters of the fiscal year. During the final quarter,
Portfolio returns were dampened by its longer duration in a rising
interest rate environment.
Merrill Lynch Asset Builder Program, Inc., January 31, 1999
Portfolio Matters
During the quarter ended January 31, 1999, the MBS market performed
extremely well. Liquidity returned to the fixed-income markets and
prepayment fears diminished in the MBS market, causing yield spreads
on almost all MBS to significantly narrow relative to their US
Treasury counterparts. Higher-coupon MBS, which lagged the most
during the previous quarter, made a dramatic comeback late in the
period. Consequently, investors now appear to be less concerned with
prepayment risk than in the past, even with only a 5 basis point
(0.05%) increase to the ten-year US Treasury note yield. We will
continue our ongoing strategy of avoiding prepayment-sensitive MBS,
and we are conscious of the fact that moving up in coupon sometimes
also means sacrificing yield at current prepayment assumptions.
During the January quarter, we sold our position in US Treasury
notes, 5.375% due 2/15/2001 in favor of Government National Mortgage
Association (GNMA) 7.50% MBS for forward settlement. Although GNMA
7.50% MBS are marginally refinancable, mortgage rates are well off
their lows reached in October, and purchasing these securities for
forward settlement should further reduce their refinancing risk.
GNMA 7.50% MBS make up 17% of the 50% allocation to 30-year MBS and
tightened over 40 basis points for the quarter relative to the five-
year US Treasury note, whose average life is similar. Also included
in the 30-year MBS allocation are a 20% Federal National Mortgage
Association (FNMA) 6% MBS position and 2%, 5% and 4% of GNMA 6.5%
MBS, GNMA 7% MBS and Federal Home Loan Mortgage Corporation (FHLMC)
11.5% MBS positions, respectively. Though not receiving as dramatic
a tightening of yield spreads as the GNMA 7.5% MBS, all of these MBS
tightened relative to their US Treasury benchmarks.
Additionally, the Portfolio had a 30% 15-year MBS allocation. We
favored 15-year MBS because we believed they would perform well in a
steepening yield-curve environment. The yield curve did not steepen
during the quarter, in fact it flattened. However during the
quarter, our positions in FHLMC-Gold Program 5.5% and 6.5%, which
comprised the 15-year MBS allocation, tightened 32 basis points and
35 basis points, respectively, relative to the five-year US Treasury
note. The Portfolio also ended the period with positions in multi-
family prepayment protected pools at 9% of net assets and US
Treasury STRIPS at 2%, and a cash position of 8%.
In our opinion, the tightening of MBS yield spreads relative to
their US Treasury counterparts should continue throughout 1999,
barring another flight to quality. We remain heavily weighted in MBS
because we believe they are very attractive fixed-income
investments. Looking ahead, we will continue our strategy of
avoiding prepayment-sensitive MBS. However, should interest rates
move higher and our current prepayment assumptions change, we could
move up in coupon if it allows us to pick up yield.
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 report to shareholders.
Sincerely,
(Terry K. Glenn)
Terry K. Glenn
Executive Vice 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
March 15, 1999
As of January 29, 1999, Jay C. Harbeck retired as Senior Vice
President and Portfolio Manager of Quality Bond Portfolio of Merrill
Lynch Asset Builder Program, Inc. His colleagues at Merrill Lynch
Asset Management, L.P. join the Program's Board of Directors in
wishing Mr. Harbeck well in his retirement.
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 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., January 31, 1999
PERFORMANCE DATA (continued)
Fundamental
Value Portfolio
Total Return
Based on a
$10,000
Investment
A line graph depicting the growth of an investment in the
Portfolio's Class A Shares and Class B Shares compared to
growth of an investment in the Lipper Growth and Income
Fund Index and the S&P 500 Index. Beginning and ending
values are:
2/01/95** 1/99
Fundamental Value Portfolio++--
Class A Shares* $ 9,475 $17,817
Fundamental Value Portfolio++--
Class B Shares* $10,000 $17,913
Lipper Growth and Income Fund
Index++++ $10,000 $23,433
S&P 500 Index++++++ $10,000 $29,458
A line graph depicting the growth of an investment in the
Portfolio's Class C Shares and Class D Shares compared to
growth of an investment in the Lipper Growth and Income
Fund Index and the S&P 500 Index. Beginning and ending
values are:
2/01/95** 1/99
Fundamental Value Portfolio++--
Class C Shares* $10,000 $18,006
Fundamental Value Portfolio++--
Class D Shares* $ 9,475 $17,645
Lipper Growth and Income Fund
Index++++ $10,000 $23,433
S&P 500 Index++++++ $10,000 $29,458
[FN]
*Assuming maximum sales charge, transaction costs and other
operating expenses, including advisory fees.
**Commencement of operations.
++Fundamental Value Portfolio invests in equities, primarily common
stocks and, to a lesser extent, securities convertible into common
stock, as well as preferred stocks and non-convertible debt
securities.
++++Lipper Growth & Income Fund Index is an equally weighted Index
of the largest growth and income mutual funds. The starting date for
the Index in each graph is from January 31, 1995.
++++++This unmanaged broad-based Index is comprised of common
stocks.
Past performance is not predictive of future performance.
Fundamental
Value Portfolio
Average Annual
Total Returns
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 12/31/98 + 7.98% + 2.31%
Inception (2/01/95) to 12/31/98 +17.07 +15.46
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 12/31/98 + 6.78% + 2.78%
Inception (2/01/95) to 12/31/98 +15.83 +15.66
[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 12/31/98 + 6.78% + 5.78%
Inception (2/01/95) to 12/31/98 +15.81 +15.81
[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 12/31/98 + 7.67% + 2.01%
Inception (2/01/95) to 12/31/98 +16.80 +15.20
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
Merrill Lynch Asset Builder Program, Inc., January 31, 1999
PERFORMANCE DATA (continued)
Global
Opportunity
Portfolio
Total Return
Based on a
$10,000
Investment
A line graph depicting the growth of an investment in the
Portfolio's Class A Shares and Class B Shares compared to
growth of an investment in the Morgan Stanley Capital
International World Index and the Salomon Brothers World
Government Bond Index. Beginning and ending values are:
2/01/95** 1/99
Global Opportunity Portfolio++--
Class A Shares* $ 9,475 $13,955
Global Opportunity Portfolio++--
Class B Shares* $10,000 $14,005
Morgan Stanley Capital International
World Index++++ $10,000 $20,459
Salomon Brothers World Government
Bond Index++++++ $10,000 $13,874
A line graph depicting the growth of an investment in the
Portfolio's Class C Shares and Class D Shares compared to
growth of an investment in the Morgan Stanley Capital
International World Index and the Salomon Brothers World
Government Bond Index. Beginning and ending values are:
2/01/95** 1/99
Global Opportunity Portfolio++--
Class C Shares* $10,000 $14,082
Global Opportunity Portfolio++--
Class D Shares* $ 9,475 $13,829
Morgan Stanley Capital International
World Index++++ $10,000 $20,459
Salomon Brothers World Government
Bond Index++++++ $10,000 $13,874
[FN]
*Assuming maximum sales charge, transaction costs and other
operating expenses, including advisory fees.
**Commencement of operations.
++Global Opportunity Portfolio invests in a portfolio of US and
foreign equity, debt and money market securities.
++++This unmanaged market capitalization-weighted Index is comprised
of a representative sampling of stocks of large-, medium- and small-
capitalization companies in various countries, including the United
States. The starting date for the Index in each graph is from
1/31/95.
++++++This unmanaged market capitalization-weighted Index tracks the
performance of the government bond markets of Australia, Austria,
Belgium, Canada, Denmark, France, Germany, Italy, Japan, the
Netherlands, Spain, Sweden, the United Kingdom and the United
States.
Past performance is not predictive of future performance.
Global
Opportunity
Portfolio
Average Annual
Total Returns
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 12/31/98 +7.83% +2.16%
Inception (2/01/95) to 12/31/98 +9.76 +8.26
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 12/31/98 +6.64% +2.64%
Inception (2/01/95) to 12/31/98 +8.59 +8.39
[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 12/31/98 +6.56% +5.56%
Inception (2/01/95) to 12/31/98 +8.54 +8.54
[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 12/31/98 +7.55% +1.90%
Inception (2/01/95) to 12/31/98 +9.51 +8.01
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
Merrill Lynch Asset Builder Program, Inc., January 31, 1999
PERFORMANCE DATA (continued)
Growth
Opportunity
Portfolio
Total Return
Based on a
$10,000
Investment
A line graph depicting the growth of an investment in the
Portfolio's Class A Shares and Class B Shares compared to
growth of an investment in the Lipper Growth Fund Index.
Beginning and ending values are:
2/02/96** 1/99
Growth Opportunity Portfolio++--
Class A Shares* $ 9,475 $19,597
Growth Opportunity Portfolio++--
Class B Shares* $10,000 $19,833
Lipper Growth Fund Index++++ $10,000 $18,716
A line graph depicting the growth of an investment in the
Portfolio's Class C Shares and Class D Shares compared to
growth of an investment in the Lipper Growth Fund Index.
Beginning and ending values are:
2/02/96** 1/99
Growth Opportunity Portfolio++--
Class C Shares* $10,000 $20,016
Growth Opportunity Portfolio++--
Class D Shares* $ 9,475 $19,486
Lipper Growth Fund Index++++ $10,000 $18,716
[FN]
*Assuming maximum sales charge, transaction costs and other
operating expenses, including advisory fees.
**Commencement of operations.
++Growth Opportunity Portfolio invests in a portfolio of equity
securities, placing particular emphasis on large-capitalization
companies that are anticipated to exhibit above-average growth rates
in earnings.
++++Lipper Growth Fund Index is an equally weighted index of the
largest mutual funds which normally invest in companies whose long-
term earnings are expected to grow significantly faster than the
earnings of the stocks represented in the major unmanaged stock
indexes. The index is adjusted for reinvestment of capital gains
distributions and income dividends. The starting date for the Index
in each graph is from 2/01/96.
Past performance is not predictive of future performance.
Growth
Opportunity
Portfolio
Average Annual
Total Returns
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 12/31/98 +33.49% +26.48%
Inception (2/02/96) to 12/31/98 +25.35 +23.05
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 12/31/98 +32.05% +28.05%
Inception (2/02/96) to 12/31/98 +24.04 +23.58
[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 12/31/98 +31.95% +30.95%
Inception (2/02/96) to 12/31/98 +23.97 +23.97
[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 12/31/98 +33.08% +26.09%
Inception (2/02/96) to 12/31/98 +25.10 +22.81
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
Merrill Lynch Asset Builder Program, Inc., January 31, 1999
PERFORMANCE DATA (continued)
Quality Bond
Portfolio
Total Return
Based on a
$10,000
Investment
A line graph depicting the growth of an investment in the
Portfolio's Class A Shares and Class B Shares compared to
growth of an investment in the ML Corporate Master Bond Index.
Beginning and ending values are:
2/01/95** 1/99
Quality Bond Portfolio++--
Class A Shares* $ 9,600 $12,910
Quality Bond Portfolio++--
Class B Shares* $10,000 $12,913
ML Corporate Master
Bond Index++++ $10,000 $14,984
A line graph depicting the growth of an investment in the
Portfolio's Class C Shares and Class D Shares compared to
growth of an investment in the ML Corporate Master Bond Index.
Beginning and ending values are:
2/01/95** 1/99
Quality Bond Portfolio++--
Class C Shares* $10,000 $12,977
Quality Bond Portfolio++--
Class D Shares* $ 9,600 $12,782
ML Corporate Master
Bond Index++++ $10,000 $14,984
[FN]
*Assuming maximum sales charge, transaction costs and other
operating expenses, including advisory fees.
**Commencement of operations.
++Quality Bond Portfolio invests in a diversified portfolio of debt
obligations, including corporate bonds and notes, convertible
securities, preferred stocks and government obligations. The
Portfolio will invest primarily in securities rated in the top three
rating categories (A or better) of a nationally recognized rating
agency or in securities with similar credit characteristics.
++++This unmanaged Index is comprised of all investment-grade
corporate bonds rated BB3 or higher, of all maturities.
Past performance is not predictive of future performance.
Quality Bond
Portfolio
Average Annual
Total Returns
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 12/31/98 +9.31% +4.94%
Inception (2/01/95) to 12/31/98 +7.68 +6.56
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 12/31/98 +8.39% +4.39%
Inception (2/01/95) to 12/31/98 +6.77 +6.55
[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 12/31/98 +8.33% +7.33%
Inception (2/01/95) to 12/31/98 +6.69 +6.69
[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 12/31/98 +8.93% +4.58%
Inception (2/01/95) to 12/31/98 +7.39 +6.27
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
US Government
Securities
Portfolio
Total Return
Based on a
$10,000
Investment
A line graph depicting the growth of an investment in the
Portfolio's Class A Shares and Class B Shares compared to
growth of an investment in the Salomon Brothers Mortgage Index.
Beginning and ending values are:
2/01/95** 1/99
US Government Securities Portfolio++--
Class A Shares* $ 9,600 $13,929
US Government Securities Portfolio++--
Class B Shares* $10,000 $13,938
Salomon Brothers Mortgage Index++++ $10,000 $14,220
A line graph depicting the growth of an investment in the
Portfolio's Class C Shares and Class D Shares compared to
growth of an investment in the Salomon Brothers Mortgage Index.
Beginning and ending values are:
2/01/95** 1/99
US Government Securities Portfolio++--
Class C Shares* $10,000 $14,004
US Government Securities Portfolio++--
Class D Shares* $ 9,600 $13,783
Salomon Brothers Mortgage Index++++ $10,000 $14,220
[FN]
*Assuming maximum sales charge, transaction costs and other
operating expenses, including advisory fees.
**Commencement of operations.
++US Government Securities Portfolio invests in marketable securities
issued or guaranteed by the US Government, by various agencies of the
US Government and by various instrumentalities which have been
established or sponsored by the US Government.
++++This unmanaged Index reflects the performance of a capital
market weighting of the outstanding agency issued mortgage-backed
securities.
Past performance is not predictive of future performance.
US Government
Securities
Portfolio
Average Annual
Total Returns
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 12/31/98 +9.24% +4.87%
Inception (2/01/95) to 12/31/98 +9.80 +8.67
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 12/31/98 +8.42% +4.42%
Inception (2/01/95) to 12/31/98 +8.93 +8.73
[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 12/31/98 +8.46% +7.46%
Inception (2/01/95) to 12/31/98 +8.86 +8.86
[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 12/31/98 +8.96% +4.60%
Inception (2/01/95) to 12/31/98 +9.52 +8.38
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
Merrill Lynch Asset Builder Program, Inc., January 31, 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 1/31/99
<S> <C> <C> <C> <C>
Fundamental Value Portfolio Class A Shares + 8.51% + 6.10% + 88.03% --
Fundamental Value Portfolio Class B Shares + 7.32 + 5.80 + 80.13 --
Fundamental Value Portfolio Class C Shares + 7.23 + 5.79 + 80.06 --
Fundamental Value Portfolio Class D Shares + 8.19 + 5.95 + 86.24 --
Global Opportunity Portfolio Class A Shares + 9.63 +11.05 + 47.27 --
Global Opportunity Portfolio Class B Shares + 8.48 +10.68 + 41.05 --
Global Opportunity Portfolio Class C Shares + 8.40 +10.71 + 40.82 --
Global Opportunity Portfolio Class D Shares + 9.35 +10.99 + 45.95 --
Growth Opportunity Portfolio Class A Shares +42.02 +25.79 +106.83 --
Growth Opportunity Portfolio Class B Shares +40.41 +25.34 +100.33 --
Growth Opportunity Portfolio Class C Shares +40.39 +25.40 +100.16 --
Growth Opportunity Portfolio Class D Shares +41.59 +25.67 +105.66 --
Quality Bond Portfolio Class A Shares + 8.57 + 2.49 + 34.48 5.70%
Quality Bond Portfolio Class B Shares + 7.88 + 2.40 + 30.13 5.18
Quality Bond Portfolio Class C Shares + 7.83 + 2.39 + 29.77 5.13
Quality Bond Portfolio Class D Shares + 8.41 + 2.53 + 33.16 5.45
US Government Securities Portfolio Class A Shares + 8.39 + 1.58 + 45.09 5.56
US Government Securities Portfolio Class B Shares + 7.48 + 1.39 + 40.38 5.05
US Government Securities Portfolio Class C Shares + 7.43 + 1.37 + 40.04 4.99
US Government Securities Portfolio Class D Shares + 8.12 + 1.51 + 43.58 5.32
<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 1/31/99 and Growth
Opportunity Portfolio, from 2/02/96 to 1/31/99.
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (in US dollars)
<CAPTION>
Fundamental Value Portfolio
MIDDLE Shares Value Percent of
EAST Industries Held Investments Cost (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C>
Israel Computer Services 120,000 ++Scitex Corporation Ltd. (Ordinary) $ 1,136,092 $ 1,230,000 1.2%
Total Investments in the Middle East 1,136,092 1,230,000 1.2
NORTH
AMERICA
United Aerospace & Defenses 40,000 The Boeing Company 1,345,983 1,382,500 1.4
States
Automotive 20,000 Ford Motor Company 429,535 1,228,750 1.2
20,000 General Motors Corporation 1,069,245 1,795,000 1.8
----------- ------------ ------
1,498,780 3,023,750 3.0
Banking & Financial 26,000 Associates First Capital Corporation
(Class A) 751,607 1,054,625 1.1
35,000 Citigroup Inc. 2,002,412 1,962,188 2.0
80,000 Hibernia Corp. (Class A) 948,558 1,340,000 1.3
22,000 National City Corporation 1,521,910 1,563,375 1.6
50,000 Wells Fargo Company 1,274,628 1,746,875 1.8
----------- ------------ ------
6,499,115 7,667,063 7.8
Beverage & 58,000 The Seagram Company Ltd. 2,076,026 2,747,750 2.7
Entertainment
Chemicals 30,000 du Pont (E.I.) de Nemours and Company 1,704,050 1,535,625 1.5
20,000 Great Lakes Chemical Corporation 796,423 757,500 0.8
----------- ------------ ------
2,500,473 2,293,125 2.3
Computer Equipment 28,000 Hewlett-Packard Company 1,485,362 2,194,500 2.2
Computer Software 105,000 ++Novell, Inc. 813,325 2,139,375 2.1
Cosmetics & 45,000 Kimberly-Clark Corporation 2,133,972 2,241,562 2.2
Toiletries
Electric Utilities 45,000 Cinergy Corp. 1,534,555 1,409,063 1.4
Electronic Components 25,000 Thomas & Betts Corporation 1,036,823 1,104,687 1.1
Fertilizer 40,000 IMC Global Inc. 1,408,459 727,500 0.7
Foods 35,000 General Mills, Inc. 2,365,671 2,937,812 2.9
Health Care 56,000 Columbia/HCA Healthcare Corporation 1,671,831 1,015,000 1.0
Services
Information 13,000 International Business Machines
Processing Corporation 888,582 2,382,250 2.4
Insurance 17,500 Aetna Inc. 1,315,639 1,577,188 1.6
30,000 The Allstate Corporation 1,396,800 1,126,875 1.1
30,000 The Chubb Corporation 1,892,087 1,762,500 1.8
25,000 PartnerRe Ltd. 1,195,488 1,132,813 1.1
----------- ------------ ------
5,800,014 5,599,376 5.6
</TABLE>
Merrill Lynch Asset Builder Program, Inc., January 31, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<CAPTION>
Fundamental Value Portfolio (concluded)
NORTH AMERICA Shares Value Percent of
(concluded) Industries Held Investments Cost (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C>
United Machinery 30,000 Deere & Company $ 929,241 $ 976,875 1.0%
States 30,000 ITT Industries, Inc. 716,231 1,201,875 1.2
(concluded) 20,931 SPX Corporation 1,229,451 1,480,868 1.5
----------- ------------ ------
2,874,923 3,659,618 3.7
Metals--Non-Ferrous 45,000 ASARCO Incorporated 1,240,590 627,188 0.6
Natural Gas 24,000 Enron Corporation 936,185 1,584,000 1.6
55,000 Sonat Inc. 2,188,180 1,416,250 1.4
----------- ------------ ------
3,124,365 3,000,250 3.0
Oil--Domestic 30,000 Atlantic Richfield Company (ARCO) 2,046,738 1,721,250 1.7
72,000 Occidental Petroleum Corporation 1,664,031 1,084,500 1.1
20,000 Sunoco, Inc. 623,938 702,500 0.7
----------- ------------ ------
4,334,707 3,508,250 3.5
Oil--International 25,000 Exxon Corporation 1,524,560 1,760,938 1.8
Oil Services 30,000 Diamond Offshore Drilling, Inc. 1,407,556 690,000 0.7
30,000 Halliburton Company 927,909 890,625 0.9
----------- ------------ ------
2,335,465 1,580,625 1.6
Packaging 50,000 Crown Cork & Seal Company, Inc. 2,106,275 1,584,375 1.6
Paper & Forest 20,000 International Paper Company 805,487 791,250 0.8
Products 70,000 Louisiana-Pacific Corporation 1,551,112 1,404,375 1.4
----------- ------------ ------
2,356,599 2,195,625 2.2
Pharmaceuticals 8,000 Bristol-Myers Squibb Company 327,444 1,025,500 1.0
16,000 Pharmacia & Upjohn, Inc. 463,460 920,000 0.9
----------- ------------ ------
790,904 1,945,500 1.9
Photography 22,000 Eastman Kodak Company 1,556,016 1,438,250 1.4
Railroads 55,000 Union Pacific Corporation 2,978,576 2,829,062 2.8
Retail 40,000 Dillard's, Inc. (Class A) 1,141,974 992,500 1.0
65,000 ++Kmart Corporation 750,037 1,141,562 1.1
30,000 Sears, Roebuck and Co. 1,360,890 1,203,750 1.2
45,000 ++Toys "R" Us, Inc. 1,178,997 675,000 0.7
40,500 ++Venator Group, Inc. 570,707 207,562 0.2
----------- ------------ ------
5,002,605 4,220,374 4.2
Semiconductors 15,000 Texas Instruments Incorporated 658,067 1,483,125 1.5
Steel 40,000 USX-U.S. Steel Group 1,147,077 1,042,500 1.0
100,000 ++WHX Corporation 902,908 1,006,250 1.0
----------- ------------ ------
2,049,985 2,048,750 2.0
Telecommunications 40,000 ++3Com Corporation 1,044,351 1,880,000 1.9
28,000 AT&T Corp. 994,868 2,541,000 2.5
15,000 Bell Atlantic Corporation 686,661 900,000 0.9
30,000 GTE Corporation 1,334,457 2,025,000 2.0
35,000 Motorola, Inc. 1,880,194 2,528,750 2.5
----------- ------------ ------
5,940,531 9,874,750 9.8
Total Investments in North America 71,933,139 80,621,993 80.4
WESTERN
EUROPE
Netherlands Oil--International 40,000 Royal Dutch Petroleum Company (NY
Registered Shares) 2,093,069 1,602,500 1.6
Total Investments in the Netherlands 2,093,069 1,602,500 1.6
United Oil--International 12,210 BP Amoco PLC (ADR)(a) 942,116 990,543 1.0
Kingdom
Total Investments in the
United Kingdom 942,116 990,543 1.0
Total Investments in Western Europe 3,035,185 2,593,043 2.6
<CAPTION>
SHORT-TERM Face
SECURITIES Amount Issue
<S> <C> <S> <C> <C> <C>
US Government $15,581,000 Federal Home Loan Mortgage Corporation,
Agency 4.62% due 2/01/1999 15,577,001 15,577,001 15.6
Obligations*
Total Investments in Short-Term
Securities 15,577,001 15,577,001 15.6
Total Investments $91,681,417 100,022,037 99.8
===========
Other Assets Less Liabilities 180,100 0.2
------------ ------
Net Assets $100,202,137 100.0%
============ ======
<FN>
(a)American Depositary Receipts (ADR).
*US Government Agency Obligations are traded on a discount basis;
the interest rate shown reflects the discount rate paid at the time
of purchase by the Portfolio.
++Non-income producing security.
See Notes to Financial Statements.
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (in US dollars)
<CAPTION>
Global Opportunity Portfolio
Face Value Percent of
COUNTRY Amount Foreign Government Obligations Cost (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C>
Germany DM 5,270,010 BundesObligation, 4.75% due 11/20/2001 $ 6,395,357 $ 6,266,868 9.4%
Bundesrepublik Deutschland:
800,000 4.75% due 7/04/2008 990,303 985,097 1.5
1,060,000 4.75% due 7/04/2028 1,250,708 1,235,486 1.9
----------- ----------- ------
8,636,368 8,487,451 12.8
</TABLE>
Merrill Lynch Asset Builder Program, Inc., January 31, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Global Opportunity Portfolio (continued)
Face Value Percent of
COUNTRY Amount Foreign Government Obligations Cost (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C>
United Kingdom UK Treasury Gilt:
Pound 310,000 8% due 12/07/2000 $ 523,871 $ 537,387 0.8%
Sterling 350,000 7.25% due 12/07/2007 665,912 702,426 1.1
----------- ----------- ------
1,189,783 1,239,813 1.9
Total Investments in Foreign Government
Obligations 9,826,151 9,727,264 14.7
<CAPTION>
US Government & Agency Obligations
<S> <S> <C> <S> <C> <C> <C>
United Federal National Mortgage Association:
States US$ 1,140,000 5.625% due 3/15/2001 1,143,993 1,157,100 1.7
1,340,000 5.75% due 4/15/2003 1,348,657 1,378,311 2.1
1,980,000 5.75% due 2/15/2008 1,973,853 2,053,933 3.1
US Treasury Notes & Bonds:
300,000 6.125% due 9/30/2000 307,453 306,891 0.5
2,480,000 6.50% due 5/31/2002 2,557,888 2,621,434 4.0
1,420,000 6.625% due 2/15/2027 1,610,528 1,690,680 2.5
Total Investments in US Government
& Agency Obligations 8,942,372 9,208,349 13.9
Total Investments in Foreign &
US Government & Agency Obligations 18,768,523 18,935,613 28.6
<CAPTION>
Shares
Industries Held US Stocks
<S> <S> <C> <S> <C> <C> <C>
United Aerospace & 8,300 GenCorp Inc. 220,331 194,012 0.3
States Defense 1,200 United Technologies Corporation 94,462 143,325 0.2
----------- ----------- ------
314,793 337,337 0.5
Auto--Related 3,460 The Hertz Corporation (Class A) 137,481 150,294 0.2
Automobile Parts 7,200 Federal-Mogul Corporation 328,036 426,600 0.6
Automotive 5,700 General Motors Corporation 438,096 511,575 0.8
Automotive & Equipment 7,550 ++Avis Rent A Car, Inc. 191,742 201,962 0.3
Banking 3,847 BankAmerica Corporation 223,414 257,268 0.4
8,940 The Bank of New York Company, Inc. 194,993 317,370 0.5
----------- ----------- ------
418,407 574,638 0.9
Banking & Financial 6,580 Mellon Bank Corporation 416,764 440,860 0.7
Beverages 11,700 PepsiCo, Inc. 426,036 457,031 0.7
Broadcasting/Cable 18,250 ++Capstar Broadcasting Corporation
(Class A) 332,446 488,187 0.7
10,000 ++Tele-Communications, Inc. (Class A) 245,848 685,625 1.0
23,500 ++Tele-Communications TCI Ventures
Group (Class A) 287,373 640,375 1.0
----------- ----------- ------
865,667 1,814,187 2.7
Broadcasting/Media 2,900 ++Fox Entertainment Group, Inc. (Class A) 65,250 80,838 0.1
Chemicals 2,350 du Pont (E.I.) de Nemours and Company 146,528 120,291 0.2
7,400 Morton International, Inc. 213,412 191,475 0.3
----------- ----------- ------
359,940 311,766 0.5
Communication 8,400 ++MCI WorldCom, Inc. 287,338 669,375 1.0
Equipment
Computer Products 5,700 ++Cisco Systems, Inc. 279,563 636,619 1.0
Computer Sales 2,350 International Business Machines
Corporation 274,460 430,638 0.7
Computer Services 800 America Online, Inc. 133,512 140,550 0.2
Computer Software 5,450 ++BMC Software, Inc. 248,722 254,106 0.4
1,550 ++Microsoft Corporation 181,849 271,153 0.4
----------- ----------- ------
430,571 525,259 0.8
Computers 13,500 Compaq Computer Corporation 393,976 642,937 1.0
1,800 ++EMC Corporation 129,005 195,975 0.3
3,200 Tandy Corporation 127,324 172,800 0.3
----------- ----------- ------
650,305 1,011,712 1.6
Conglomerates 16,600 The Dial Corporation 339,659 453,387 0.7
Consumer--Electronics 4,500 ++Dell Computer Corporation 286,952 450,000 0.7
Data Processing 4,400 ++Keane, Inc. 170,126 141,900 0.2
Electrical Equipment 2,400 General Electric Company 192,423 251,700 0.4
Electronics 4,500 Intel Corporation 519,949 633,656 1.0
3,750 ++Micron Technology, Inc. 143,494 292,969 0.4
----------- ----------- ------
663,443 926,625 1.4
Entertainment 24,800 ++Premier Parks Inc. 652,230 785,850 1.2
6,240 Royal Caribbean Cruises Ltd. 154,971 248,040 0.4
----------- ----------- ------
807,201 1,033,890 1.6
Financial Services 9,600 Associates First Capital Corporation
(Class A) 354,356 389,400 0.6
13,300 GreenPoint Financial Corp. 511,595 435,575 0.7
11,400 Heller Financial, Inc. 309,063 312,075 0.5
1,500 Morgan Stanley Dean Witter & Co. 128,811 130,219 0.2
5,850 Providian Financial Corporation 273,789 589,753 0.9
----------- ----------- ------
1,577,614 1,857,022 2.9
Foods 9,100 ++Keebler Foods Company 252,152 329,875 0.5
5,250 Nabisco Holdings Corp. (Class A) 193,185 220,828 0.3
----------- ----------- ------
445,337 550,703 0.8
Hardware Products 5,850 The Black & Decker Corporation 288,845 310,050 0.5
Health Care 14,251 ++HEALTHSOUTH Corporation 212,866 193,279 0.3
Instruments 3,500 Millipore Corporation 74,570 106,969 0.2
Insurance 4,200 Allmerica Financial Corporation 259,427 226,537 0.3
6,600 The Equitable Companies Incorporated 344,495 460,350 0.7
6,500 UNUM Corporation 281,371 392,844 0.6
----------- ----------- ------
885,293 1,079,731 1.6
Machinery 2,000 Case Corporation 53,506 37,875 0.1
9,350 Ingersoll-Rand Company 333,084 444,125 0.7
----------- ----------- ------
386,590 482,000 0.8
</TABLE>
Merrill Lynch Asset Builder Program, Inc., January 31, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Global Opportunity Portfolio (continued)
Shares Value Percent of
COUNTRY Industries Held US Stocks Cost (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C>
United Manufacturing 7,400 Tyco International Ltd. $ 393,970 $ 570,263 0.9%
States
(concluded) Medical Instruments 4,600 Beckman Coulter Inc. 275,479 229,425 0.3
Medical Technology 5,950 Johnson & Johnson 484,453 505,750 0.8
Metals 1,800 Alcoa Inc. 135,715 150,525 0.2
Natural Gas 13,350 El Paso Energy Corporation 365,609 440,550 0.7
6,100 Enron Corporation 282,639 402,600 0.6
----------- ----------- ------
648,248 843,150 1.3
Oil--Integrated 2,400 Mobil Corporation 187,937 210,450 0.3
Oil Service 3,300 Schlumberger Limited 207,737 157,163 0.2
Petroleum 7,040 Unocal Corporation 255,533 200,640 0.3
Pharmaceutical-- 4,800 American Home Products Corporation 267,148 281,700 0.4
Diversified 4,800 Bristol-Myers Squibb Company 470,369 615,300 0.9
----------- ----------- ------
737,517 897,000 1.3
Pharmaceuticals 3,600 Cardinal Health, Inc. 264,971 266,175 0.4
1,100 Pfizer Inc. 135,773 141,488 0.2
----------- ----------- ------
400,744 407,663 0.6
Printing/Publishing 11,600 ++World Color Press, Inc. 344,983 285,650 0.4
Railroads 12,800 Burlington Northern Santa Fe Corp. 375,929 443,200 0.7
Retail 6,000 ++Safeway Inc. 209,605 336,750 0.5
Retail--Drug Stores 11,200 Rite Aid Corporation 290,385 550,200 0.8
Retail--Specialty 7,100 Lowe's Companies, Inc. 254,344 414,019 0.6
Retail Stores 4,700 Wal-Mart Stores, Inc. 214,053 404,200 0.6
Semiconductors 7,450 Motorola, Inc. 419,476 538,263 0.8
Services 5,620 ++Quintiles Transnational Corp. 261,368 291,538 0.4
Steel 9,700 ++Bethlehem Steel Corporation 92,744 83,662 0.1
1,900 USX-U.S. Steel Group 51,960 49,519 0.1
----------- ----------- ------
144,704 133,181 0.2
Telecommunications 9,600 ++3Com Corporation 412,231 451,200 0.7
7,300 GTE Corporation 372,011 492,750 0.7
2,400 Lucent Technologies Inc. 264,513 270,150 0.4
----------- ----------- ------
1,048,755 1,214,100 1.8
Toys 2,700 Mattel, Inc. 62,521 61,256 0.1
Utilities-- 5,900 Ameritech Corporation 287,585 384,237 0.6
Communication
Utilities--Electric 5,600 PECO Energy Company 191,301 213,850 0.3
5,900 Public Service Enterprise Group
Incorporated 229,216 234,156 0.4
6,300 Texas Utilities Company 286,479 276,806 0.4
----------- ----------- ------
706,996 724,812 1.1
Waste Management 6,000 Waste Management, Inc. 262,702 299,625 0.5
Total Investments in US Stocks 20,959,619 26,811,557 40.7
Foreign Stocks
Austria Paper Products 3,400 Mayr-Melnhof Karton AG 169,017 158,153 0.2
Total Stocks in Austria 169,017 158,153 0.2
Canada Automobile Parts 1,400 Magna International, Inc. 'A' 102,528 83,125 0.1
Communication Equipment 1,800 Northern Telecom Limited 98,208 113,625 0.2
Computer Services 6,400 ++ATI Technologies Inc. 100,250 114,861 0.2
Telecommunications 17,500 Teleglobe Inc. 473,533 682,500 1.0
Total Stocks in Canada 774,519 994,111 1.5
Denmark Services 800 ISS International Service System A/S 'B' 52,616 56,808 0.1
Total Stocks in Denmark 52,616 56,808 0.1
Finland Communication 3,000 Nokia Oyj 'A' 300,313 428,954 0.6
Equipment
Holding Company 11,200 Amer Group Ltd. 206,426 130,911 0.2
Insurance 5,700 Sampro Insurance Company PLC 'A' 263,633 241,270 0.4
Paper & Forest 7,700 UPM-Kymmene Oyj 185,449 200,973 0.3
Products
Pharmaceuticals 5,820 Orion-Yhtyma OY 'B' 150,642 131,100 0.2
Real Estate 40,710 ++Sponda Oyj 287,017 247,158 0.4
Total Stocks in Finland 1,393,480 1,380,366 2.1
France Banking 502 Societe Generale 'A' 93,179 90,008 0.1
Electronics 5,300 Thomson CSF 197,662 213,513 0.3
Foods 811 Danone 214,836 227,320 0.3
Information Processing 515 Cap Gemini SA 83,786 101,573 0.2
Insurance 4,200 Axa 499,586 609,115 0.9
6,000 Scor 234,494 340,440 0.5
----------- ----------- ------
734,080 949,555 1.4
Merchandising 174 Carrefour SA 133,017 116,202 0.2
Oil & Related 3,100 Elf Aquitaine SA 375,559 335,606 0.5
Semiconductor 6,000 ++STMicroelectronics NV (NY Registered
Capital Shares) 412,300 627,000 0.9
Equipment
Telecommunications 4,400 France Telecom SA 336,051 413,930 0.6
Utilities--Water 1,265 Vivendi 261,173 369,503 0.6
Total Stocks in France 2,841,643 3,444,210 5.1
Germany Automobile 3,950 ++DaimlerChrysler AG 359,011 411,042 0.6
Chemicals 4,000 Henkel KGaA (Preferred) 275,763 274,622 0.4
Diversified 1,500 RWE AG 88,446 71,322 0.1
Electronics 2,000 Siemens AG 138,334 141,963 0.2
Multi-Industry 1,400 VEBA AG 90,117 83,249 0.1
Total Stocks in Germany 951,671 982,198 1.4
</TABLE>
Merrill Lynch Asset Builder Program, Inc., January 31, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Global Opportunity Portfolio (continued)
Shares Value Percent of
COUNTRY Industries Held Foreign Stocks Cost (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C>
Ireland Banking 14,100 Bank of Ireland $ 298,205 $ 323,436 0.5%
Total Stocks in Ireland 298,205 323,436 0.5
Italy Publishing 35,800 Mondadori (Arnoldo) Editore SpA 252,228 593,137 0.9
Telecommunications 35,200 Telecom Italia SpA 266,973 329,146 0.5
Total Stocks in Italy 519,201 922,283 1.4
Japan Consumer-- 2,000 Rohm Company Ltd. 134,774 188,338 0.3
Electronics
Cosmetics & 5,000 Kao Corporation 99,507 101,049 0.2
Toiletries
Diversified 10,000 Olympus Optical Co., Ltd. 112,425 110,423 0.2
Companies
Electrical Equipment 20,000 Fujikura Ltd. 115,788 120,399 0.2
Electronics 10,000 ++Fujitsu Limited 113,694 130,977 0.2
12,000 ++Matsushita Electric Industrial
Company, Ltd. 187,392 203,922 0.3
----------- ----------- ------
301,086 334,899 0.5
Finance 2,000 Orix Corporation 143,258 136,395 0.2
Insurance 18,000 The Tokio Marine & Fire Insurance
Co. Ltd. 208,039 204,334 0.3
Machine Tools & 18,000 Minebea Co., Ltd. 188,149 199,536 0.3
Machinery
Merchandising 6,000 Marui Co., Ltd. 115,134 107,585 0.2
Photography 3,000 Fuji Photo Film 111,582 110,681 0.2
Retail Stores 3,000 Ito-Yokado Co., Ltd. 154,861 188,596 0.3
Telecommunications 5 ++NTT Mobile Communication
Network, Inc.** 164,989 210,698 0.3
24 Nippon Telegraph & Telephone
Corporation 202,178 193,602 0.2
----------- ----------- ------
367,167 404,300 0.5
Total Stocks in Japan 2,051,770 2,206,535 3.4
Netherlands Banking 4,000 ABN AMRO Holding NV 89,625 77,620 0.1
Broadcast & 2,100 Wolters Kluwer NV 'A' 321,109 414,537 0.6
Publishing
Electronic 1,200 ++Asm Lithography Holding NV 48,220 53,177 0.1
Components
Foods 3,400 Koninklijke Ahold NV 132,524 131,955 0.2
Multi-Industry 2,900 Unilever NV 211,099 221,479 0.3
Total Stocks in the Netherlands 802,577 898,768 1.3
Norway Computer Software 8,300 Merkantildata ASA 63,459 100,246 0.2
Total Stocks in Norway 63,459 100,246 0.2
Singapore Electronics Components 2,400 ++Flextronics International Ltd. 83,912 100,800 0.2
Total Stocks in Singapore 83,912 100,800 0.2
Spain Building Materials 21,000 Uralita, SA 294,295 223,771 0.3
Diversified 17,200 ++Dinamia Capital Privado-Sociedad
de Capital Riesgo, SA 320,292 190,696 0.3
Real Estate 9,300 Metrovacesa, SA 290,232 240,623 0.4
Telecommunications 6,400 Telefonica, SA 275,582 292,324 0.4
Utilities--Electric 10,800 Endesa, SA 283,013 299,410 0.5
Total Stocks in Spain 1,463,414 1,246,824 1.9
Sweden Auto & Truck 4,600 Autoliv, Inc. 153,809 190,344 0.3
Automobile & Equipment 3,600 Volvo AB 'B' 100,377 98,155 0.1
Automobile Parts 16,700 Haldex AB 295,290 230,343 0.3
Banking 5,500 ForeningsSparbanken AB 69,546 146,078 0.2
25,700 Nordbanken Holding AB 180,684 178,065 0.3
----------- ----------- ------
250,230 324,143 0.5
Diversified 1,800 Custos AB 'A' 46,361 34,412 0.1
1,800 Custos AB 'A' (Rights) -- 2,818 0.0
4,600 Custos AB 'B' 121,232 87,351 0.1
4,600 Custos AB 'B' (Rights) -- 7,319 0.0
----------- ----------- ------
167,593 131,900 0.2
Electronics 4,500 Spectra-Physics AB 'A' 136,354 91,226 0.1
Investment Management 10,200 Bure Investment AB 104,571 137,417 0.2
Paper Products 10,000 Stora Enso Oyj 'R' 90,662 91,098 0.1
Real Estate 13,100 Castellum AB 136,644 122,700 0.2
9,800 Fastighets AB Tornet 161,306 145,860 0.2
----------- ----------- ------
297,950 268,560 0.4
Telecommunications 16,800 Telefonaktiebolaget LM Ericsson (ADR)* 429,870 468,300 0.7
Total Stocks in Sweden 2,026,706 2,031,486 2.9
Switzerland Banking 518 Credit Suisse Group (Registered Shares) 88,586 82,471 0.1
Banking & Financial 277 ++UBS AG 92,134 89,569 0.1
Drugs 156 Novartis AG (Registered Shares) 288,038 291,889 0.4
Foods/Food Processing 115 Nestle SA (Registered Shares) 235,791 210,232 0.3
Merchandising 500 Valora Holding AG 135,344 119,760 0.2
Systems Integration 950 Swisscom AG (Registered Shares) 254,660 414,266 0.6
Total Stocks in Switzerland 1,094,553 1,208,187 1.7
United Automobile Parts 44,900 LucasVarity PLC 164,364 213,831 0.3
Kingdom Banking 24,000 Bank of Scotland 265,851 302,099 0.5
10,200 HSBC Holdings PLC 270,059 277,387 0.4
17,400 Lloyds TSB Group PLC 224,420 225,308 0.3
14,600 National Westminster Bank PLC 265,203 267,574 0.4
----------- ----------- ------
1,025,533 1,072,368 1.6
Beverages 36,104 Diageo PLC 358,414 398,429 0.6
Cable Television 12,500 ++TeleWest Communications PLC 48,406 57,169 0.1
Services
Diversified 74,200 Billiton PLC 179,558 141,347 0.2
Drugs 7,200 Zeneca Group PLC 289,405 329,885 0.5
Foods 40,200 Devro PLC 289,780 107,607 0.2
</TABLE>
Merrill Lynch Asset Builder Program, Inc., January 31, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<CAPTION>
Global Opportunity Portfolio (concluded)
Shares Value Percent of
COUNTRY Industries Held Foreign Stocks Cost (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C>
United Metals & Mining 18,500 Rio Tinto PLC (Registered Shares) $ 225,235 $ 222,387 0.3%
Kingdom
(concluded) Oil--Integrated 5,300 Shell Transport & Trading Company (ADR)* 194,738 161,650 0.2
Oil & Related 13,000 BP Amoco PLC 189,595 175,485 0.3
Pharmaceuticals 8,800 Glaxo Wellcome PLC 281,197 293,941 0.4
Publishing 11,300 Reed International PLC 93,118 104,800 0.2
Telecommunications 8,400 British Telecommunications PLC 133,369 128,358 0.2
9,400 Cable & Wireless PLC 142,672 135,766 0.2
3,600 ++Energis PLC 98,265 95,891 0.1
6,900 Vodafone Group PLC 131,146 134,105 0.2
----------- ----------- ------
505,452 494,120 0.7
Travel Services 114,000 Thomson Travel Group PLC 363,654 278,944 0.4
Total Stocks in the United Kingdom 4,208,449 4,051,963 6.0
Total Investments in Foreign Stocks 18,795,192 20,106,374 29.9
Total Investments in US & Foreign
Stocks 39,754,811 46,917,931 70.6
Total Investments $58,523,334 65,853,544 99.2
===========
Unrealized Appreciation on Forward Foreign Exchange Contracts--Net++++ 214,453 0.3
Other Assets Less Liabilities 296,832 0.5
----------- ------
Net Assets $66,364,829 100.0%
=========== ======
<FN>
*American Depositary Receipts (ADR).
**The security may be offered and sold to "qualified institutional
buyers" under Rule 144A of the Securities Act of 1933.
++Non-income producing security.
++++Forward foreign exchange contracts as of January 31, 1999 were
as follows:
<CAPTION>
Unrealized
Appreciation
Foreign Expiration (Depreciation)
Currency Sold Date (Note 1b)
C$ 1,500,000 February 1999 $ (19,269)
Pound 3,025,000 February 1999 80,005
Sterling
YEN 240,000,000 April 1999 153,717
---------
Total Unrealized Appreciation on Forward
Foreign Exchange Contracts--Net
(US$ Commitment--$8,256,874) $ 214,453
=========
See Notes to Financial Statements.
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (in US dollars)
<CAPTION>
Growth Opportunity Portfolio
Shares Value Percent of
Industries Held Common Stocks Cost (Note 1a) Net Assets
<S> <C> <S> <C> <C> <C>
Advertising 10,000 The Interpublic Group of Companies,
Inc. $ 455,324 $ 791,250 0.7%
Banking & Financial 35,600 Bank One Corporation 1,719,905 1,864,550 1.6
42,000 BankAmerica Corporation 2,767,360 2,808,750 2.5
44,000 Citigroup Inc. 2,481,536 2,466,750 2.2
31,000 Mellon Bank Corporation 1,792,098 2,077,000 1.8
10,500 State Street Corporation 582,114 750,750 0.7
----------- ------------ ------
9,343,013 9,967,800 8.8
Beverages 24,000 The Coca-Cola Company 1,932,193 1,570,500 1.4
Broadcasting-- 15,000 CBS Corporation 378,301 510,000 0.4
Radio & Television 18,500 ++Chancellor Media Corporation 805,666 1,061,437 0.9
34,000 ++Clear Channel Communications, Inc. 1,529,620 2,103,750 1.8
25,000 ++Infinity Broadcasting Corp. (Class A) 546,782 692,188 0.6
----------- ------------ ------
3,260,369 4,367,375 3.7
Chemicals 40,000 du Pont (E.I.) de Nemours and Company 2,609,487 2,047,500 1.8
Communications 45,000 ++Cisco Systems, Inc. 2,065,506 5,025,937 4.4
Equipment 4,000 ++FORE Systems, Inc. 78,000 67,250 0.1
2,000 Lucent Technologies Inc. 144,995 225,125 0.2
1,500 ++Newbridge Networks Corporation 90,090 53,906 0.0
5,000 Northern Telecom Limited 246,980 315,625 0.3
2,000 Telefonaktiebolaget LM Ericsson (ADR)* 40,978 55,750 0.1
----------- ------------ ------
2,666,549 5,743,593 5.1
Computers 78,943 ++Compaq Computer Corporation 2,075,886 3,759,660 3.3
6,000 ++Dell Computer Corporation 233,587 600,000 0.5
11,000 International Business Machines
Corporation 2,060,437 2,015,750 1.8
8,000 ++Network Appliance, Inc. 219,710 421,000 0.4
----------- ------------ ------
4,589,620 6,796,410 6.0
Cosmetics 20,000 Gillette Company 934,894 1,175,000 1.0
1,500 ++International Flavors & Fragrances Inc. 66,303 65,438 0.1
----------- ------------ ------
1,001,197 1,240,438 1.1
Diversified 2,000 Minnesota Mining and Manufacturing
Company (3M) 154,323 155,250 0.1
Electrical Equipment 2,000 Emerson Electric Co. 108,040 116,375 0.1
43,000 General Electric Company 3,301,800 4,509,625 3.9
1,000 Honeywell Inc. 74,816 65,187 0.1
----------- ------------ ------
3,484,656 4,691,187 4.1
Electronics 17,000 Intel Corporation 1,384,730 2,393,813 2.1
1,000 ++STMicroelectronics NV (NY Registered
Shares) 65,810 104,500 0.1
5,000 Texas Instruments Incorporated 284,283 494,375 0.4
----------- ------------ ------
1,734,823 2,992,688 2.6
</TABLE>
Merrill Lynch Asset Builder Program, Inc., January 31, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Growth Opportunity Portfolio (continued)
Shares Value Percent of
Industries Held Common Stocks Cost (Note 1a) Net Assets
<S> <C> <S> <C> <C> <C>
Energy 22,000 El Paso Energy Corporation $ 734,316 $ 726,000 0.6%
2,000 Enron Corporation 80,390 132,000 0.1
814,706 858,000 0.7
Entertainment 7,000 ++Viacom, Inc. (Class A) 260,391 587,125 0.5
50,000 The Walt Disney Company 1,629,106 1,650,000 1.4
----------- ------------ ------
1,889,497 2,237,125 1.9
Financial Services 4,000 American Express Company 390,615 411,500 0.4
7,000 Federal Home Loan Mortgage Association 410,429 434,000 0.4
11,000 Federal National Mortgage Association 671,039 801,625 0.7
10,000 Franklin Resources, Inc. 546,808 335,000 0.3
14,000 Morgan Stanley Dean Witter & Co. 885,329 1,215,375 1.1
3,000 T. Rowe Price Associates, Inc. 112,945 109,688 0.1
----------- ------------ ------
3,017,165 3,307,188 3.0
Food Merchandising 3,000 Albertson's, Inc. 107,884 183,000 0.2
6,000 ++Fred Meyer, Inc. 141,180 375,000 0.3
6,000 ++Safeway Inc. 282,855 336,750 0.3
----------- ------------ ------
531,919 894,750 0.8
Foods 5,000 ConAgra, Inc. 124,865 162,500 0.1
4,000 Wm. Wrigley Jr. Company 288,597 374,500 0.3
----------- ------------ ------
413,462 537,000 0.4
Home Furnishings 22,700 Ethan Allen Interiors, Inc. 1,190,938 1,083,925 0.9
Hotels 9,000 Marriott International, Inc. (Class A) 305,627 316,125 0.3
Household Products 1,000 Colgate-Palmolive Company 71,320 80,437 0.1
22,000 Kimberly-Clark Corporation 1,083,271 1,095,875 1.0
30,000 The Procter & Gamble Company 2,336,641 2,726,250 2.4
17,000 Unilever NV (NY Registered Shares) 1,221,062 1,300,500 1.1
----------- ------------ ------
4,712,294 5,203,062 4.6
Information 13,000 ++America Online, Inc. 686,972 2,283,937 2.0
Processing 27,000 First Data Corporation 961,514 1,034,437 0.9
----------- ------------ ------
1,648,486 3,318,374 2.9
Insurance 10,000 Aetna Inc. 833,053 901,250 0.8
14,200 American International Group, Inc. 991,902 1,461,712 1.3
----------- ------------ ------
1,824,955 2,362,962 2.1
Medical Technology 2,000 ++Boston Scientific Corporation 65,654 48,875 0.0
4,000 Guidant Corporation 136,943 235,750 0.2
1,000 Johnson & Johnson 66,560 85,000 0.1
----------- ------------ ------
269,157 369,625 0.3
Oil Services 3,000 Baker Hughes Incorporated 114,960 50,625 0.0
2,000 Diamond Offshore Drilling, Inc. 90,370 46,000 0.0
1,500 Schlumberger Limited 88,170 71,438 0.1
----------- ------------ ------
293,500 168,063 0.1
Pharmaceuticals 2,000 ++Amgen Inc. 131,750 255,500 0.2
22,000 Bristol-Myers Squibb Company 2,156,465 2,820,125 2.5
25,000 Merck & Co., Inc. 3,305,070 3,668,750 3.2
23,000 Pfizer Inc. 1,939,566 2,958,375 2.6
----------- ------------ ------
7,532,851 9,702,750 8.5
Photography 1,000 Eastman Kodak Company 66,840 65,375 0.1
Pollution Control 362 Waste Management, Inc. 14,160 18,077 0.0
Publishing 11,000 Gannett Co., Inc. 780,104 723,937 0.6
Restaurants 6,000 McDonald's Corporation 343,189 472,875 0.4
Retail--Specialty 13,000 ++Abercrombie & Fitch Co. (Class A) 578,698 994,500 0.9
36,000 CVS Corporation 1,277,008 1,971,000 1.7
8,500 The Gap, Inc. 230,605 545,594 0.5
15,000 Lowe's Companies, Inc. 601,807 874,688 0.8
70,000 ++Staples, Inc. 1,021,083 2,003,750 1.7
5,000 ++Tommy Hilfiger Corporation 270,074 352,500 0.3
30,000 Walgreen Co. 971,102 1,875,000 1.6
----------- ------------ ------
4,950,377 8,617,032 7.5
Retail--Stores 17,000 ++Federated Department Stores, Inc. 847,205 710,812 0.6
5,000 The TJX Companies, Inc. 144,676 147,813 0.1
23,000 Wal-Mart Stores, Inc. 1,206,862 1,978,000 1.7
----------- ------------ ------
2,198,743 2,836,625 2.4
Semiconductors 12,000 ++Applied Materials, Inc. 443,730 757,500 0.7
Software--Computer 4,800 ++Baan Company NV (NY Registered Shares) 216,266 48,600 0.0
25,000 ++Microsoft Corporation 2,157,218 4,373,438 3.8
7,000 ++PeopleSoft, Inc. 273,673 138,688 0.1
54,000 SAP AG (Systeme, Anwendungen, Produkte
in der Datenverarbeitung)(ADR)* 1,293,324 1,832,625 1.6
----------- ------------ ------
3,940,481 6,393,351 5.5
Telecommunications 37,000 AT&T Corp. 2,709,863 3,357,750 2.9
13,000 Ameritech Corporation 742,470 846,625 0.7
10,000 ++Cable & Wireless PLC (ADR)* 402,841 432,500 0.4
42,000 GTE Corporation 2,342,888 2,835,000 2.5
25,000 ++MCI WorldCom, Inc. 1,146,454 1,992,188 1.7
5,000 ++Nextel Communications, Inc. (Class A) 113,225 160,000 0.1
31,000 Sprint Corporation (FON Group) 1,788,563 2,600,125 2.3
33,000 ++Sprint Corporation (PCS Group) 525,219 1,051,875 0.9
5,000 Vodafone Group PLC (ADR)* 893,474 976,250 0.9
----------- ------------ ------
10,664,997 14,252,313 12.4
Toys 19,000 Mattel, Inc. 716,164 431,063 0.4
Travel & Lodging 31,000 Carnival Corporation (Class A) 1,007,133 1,520,937 1.3
Total Common Stocks 80,802,029 106,812,025 93.2
</TABLE>
Merrill Lynch Asset Builder Program, Inc., January 31, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<CAPTION>
Growth Opportunity Portfolio (concluded)
SHORT-TERM Face Value Percent of
SECURITIES Amount Short-Term Securities Cost (Note 1a) Net Assets
<S> <C> <S> <C> <C> <C>
Commercial $5,114,000 General Motors Acceptance Corp.,
Paper** 4.81% due 2/01/1999 $ 5,112,633 $ 5,112,633 4.5%
3,000,000 Knight-Ridder, Inc., 4.83% due
2/22/1999 2,990,743 2,990,743 2.6
Total Short-Term Securities 8,103,376 8,103,376 7.1
Total Investments $88,905,405 114,915,401 100.3
===========
Liabilities in Excess of Other Assets (322,452) (0.3)
------------ ------
Net Assets $114,592,949 100.0%
============ ======
<FN>
*American Depositary Receipts (ADR).
**Commercial Paper is traded on a discount basis; the interest rates
shown reflect the discount rate paid at the time of purchase by the
Portfolio.
++Non-income producing security.
See Notes to Financial Statements.
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (in US dollars)
<CAPTION>
Quality Bond Portfolio
S&P Moody's Face Value
INDUSTRIES Ratings Ratings Amount Bonds & Notes Cost (Note 1a)
<S> <S> <S> <C> <S> <C> <C>
Asset-Backed AAA Aaa $150,000 The Money Store, Series 1998-B, 6.225% due
Securities*-- 9/15/2023 $ 149,978 $ 151,029
0.8%
Banking--11.7% A A2 250,000 Bank of New York Company, Inc., 7.875% due
11/15/2002 276,675 269,280
A+ Aa2 250,000 BankAmerica Corp., 6.65% due 5/01/2001 249,863 256,290
BBB+ A3 300,000 Great Western Bank, 9.875% due 6/15/2001 332,535 326,706
BBB A1 300,000 KeyCorp Capital I, 5.816% due 7/01/2028 296,982 290,430
BBB+ Baa1 250,000 MBNA America Bank NA, 5.543% due 6/10/2004 246,142 237,467
A A3 250,000 Mellon Financial Co., 6.375% due 2/15/2010 251,010 261,695
A+ Aa3 250,000 Norwest Corp., Series F, 6.75% due 5/12/2000 249,627 254,740
A A1 200,000 Wells Fargo Company, 8.375% due 5/15/2002 213,120 217,590
----------- -----------
2,115,954 2,114,198
Financial A+ aa3 100,000 Citigroup Capital II, 7.75% due 12/01/2036 100,170 109,448
Services--7.6% BBB- Baa2 100,000 Commercial Net Lease Realty, 7.125% due
3/15/2008 99,729 93,440
Donaldson Lufkin & Jenrette Inc.:
A- A3 150,000 6% due 12/01/2001 149,820 150,188
A- A3 38,000 6.875% due 11/01/2005 37,694 39,475
BBB- Baa3 150,000 Hospitality Properties Trust, 7% due 3/01/2008 149,730 141,847
AA Aa2 200,000 MBIA, Inc., 7.15% due 7/15/2027 199,510 218,716
A+ Aa3 100,000 Morgan Stanley, Dean Witter, Discover & Co.,
5.625% due 1/20/2004 99,545 99,537
A+ A2 200,000 Prudential Insurance Co., 6.375% due
7/23/2006 (a) 199,116 206,193
A Aa3 150,000 Salomon Smith Barney Holdings, Inc., 7.375%
due 5/15/2007 149,866 165,729
BBB Baa2 150,000 Spieker Properties LP, 7.35% due 12/01/2017 151,549 145,287
----------- -----------
1,336,729 1,369,860
Financial Associates Corp. N.A.:
Services-- AA- Aa3 250,000 6.95% due 11/01/2018 248,530 269,245
Consumer--5.9% AA- Aa3 100,000 (Series H), 7.40% due 5/15/2006 108,969 109,166
A A2 250,000 Beneficial Corporation, Series I, 6.80%
due 9/16/2003 250,000 259,963
A aa3 150,000 CIT Capital Trust I, 7.70% due 2/15/2027 149,316 156,706
A+ Aa3 120,000 Commercial Credit Co., 6.25% due 1/01/2008 122,456 124,204
A- Baa1 150,000 Finova Capital Corp., 6.25% due 11/01/2002 149,426 152,587
----------- -----------
1,028,697 1,071,871
Industrial-- Anheuser-Busch Cos., Inc.:
Consumer Goods-- A+ A1 100,000 8.75% due 12/01/1999 107,905 103,067
13.6% A+ A1 200,000 5.65% due 9/15/2008 199,322 203,904
A+ A1 300,000 6.50% due 1/01/2028 300,903 318,801
A A2 100,000 Bass America, Inc., 8.125% due 3/31/2002 105,928 106,846
A+ A3 250,000 Coca-Cola Enterprises, 5.75% due 11/01/2008 248,333 251,703
BBB- Baa3 250,000 Flowers Industries Inc., 7.15% due 4/15/2028 248,675 240,140
A+ A1 300,000 Hershey Foods Corp, 6.95% due 8/15/2012 331,608 333,564
AA Aa2 375,000 Kimberly-Clark Corp., 6.375% due 1/01/2028 371,910 391,054
AA Aa2 200,000 McDonald's Corp., Series F, 5.35% due 9/15/2008 198,422 199,724
A A1 80,000 Pepsico, Inc., 5.75% due 1/02/2003 79,595 81,038
AA Aa2 200,000 Wal-Mart Stores, Inc., 8.50% due 9/15/2024 207,350 231,040
----------- -----------
2,399,951 2,460,881
Industrial-- AA+ Aa1 175,000 BP America Inc., 9.375% due 11/01/2000 200,263 187,315
Energy--6.0% BBB Baa1 250,000 Noram Energy Corp., 6.375% due 11/01/2013 250,392 252,907
BBB Baa3 250,000 Occidental Petroleum Corp., 6.50% due 4/01/2005 248,575 246,105
BBB+ Baa1 400,000 Sonat Inc., 7% due 2/01/2018 412,068 409,408
----------- -----------
1,111,298 1,095,735
Industrial-- A A2 200,000 AlliedSignal Inc., 6.20% due 2/01/2008 199,732 204,718
Manufacturing-- BBB+ A3 200,000 Applied Materials Inc., 6.75% due 10/15/2007 199,870 202,452
15.6% A+ A2 200,000 Danaher Corp., 6% due 10/15/2008 198,926 199,246
AA+ Aa1 300,000 Emerson Electric Co., 5.50% due 9/15/2008 299,223 300,984
Ford Motor Credit Co.:
A A1 200,000 8.20% due 2/15/2002 213,154 215,692
A A1 300,000 5.787% due 8/27/2006 299,792 299,277
AAA Aaa 245,000 General Electric Capital Corp., 8.50% due
7/24/2008 297,577 299,091
General Motors Acceptance Corp.:
A A2 100,000 8.50% due 1/01/2003 108,510 110,587
A A2 100,000 7.125% due 5/01/2003 105,785 106,143
A A2 200,000 8.75% due 7/15/2005 226,232 233,244
A- Baa1 250,000 LaFarge Corp., 6.375% due 7/15/2005 249,708 256,150
A A2 100,000 Lucent Technologies Inc., 6.50% due 1/15/2028 103,618 106,510
A A1 90,000 PPG Industries Inc., 6.50% due 11/01/2007 89,725 93,919
BBB Baa1 200,000 Raytheon Co., 6.15% due 11/01/2008 199,472 205,152
----------- -----------
2,791,324 2,833,165
</TABLE>
Merrill Lynch Asset Builder Program, Inc., January 31, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<CAPTION>
Quality Bond Portfolio (concluded)
S&P Moody's Face Value
INDUSTRIES Ratings Ratings Amount Bonds & Notes Cost (Note 1a)
<S> <S> <S> <C> <S> <C> <C>
Industrial-- AAA Aa1 $ 300,000 Abbott Laboratiories, 5.40% due 9/15/2008 $ 299,403 $ 302,694
Services--7.3% A A2 150,000 Carnival Corp., 7.70% due 7/15/2004 156,746 164,463
A A2 213,377 Disney Custom Repackaged Asset Vehicle-403,
6.85% due 1/10/2007*(a) 213,232 222,104
A A2 200,000 First Data Corporation, Series D, 6.375% due
12/15/2007 199,486 207,828
A A1 150,000 The May Department Stores Company, 6.70% due
9/15/2028 157,788 157,393
AA- A2 120,000 TCI Communications Inc., 8.75% due 8/01/2015 140,767 152,374
BBB Baa2 100,000 Time Warner Entertainment Co., 8.375% due
3/15/2023 107,029 122,894
----------- -----------
1,274,451 1,329,750
Transportation BBB Baa2 250,000 CSX Corp., 7.90% due 5/01/2017 279,713 287,703
- --1.6%
US Government US Treasury Notes:
Obligations--6.8% AAA Aaa 25,000 5.875% due 9/30/2002 25,289 26,027
AAA Aaa 500,000 4.25% due 11/15/2003 493,578 493,985
AAA Aaa 135,000 7.25% due 8/15/2004 152,392 151,748
AAA Aaa 150,000 6.50% due 5/15/2005 159,047 164,649
AAA Aaa 300,000 7% due 7/15/2006 345,234 341,625
AAA Aaa 50,000 6.125% due 8/15/2007 52,836 54,696
----------- -----------
1,228,376 1,232,730
Utilities-- A- A2 300,000 ALLTEL Corporation, 6.75% due 9/15/2005 295,380 317,691
Communications-- AA+ Aa3 100,000 Ameritech Capital Funding, 6.45% due 1/15/2018 105,010 102,941
11.1% A A3 250,000 Frontier Corp., 6% due 10/15/2013 249,660 253,038
A Baa1 150,000 GTE Corp., 6.84% due 4/15/2018 154,197 159,225
AAA Aa1 125,000 Indiana Bell Telephone Co., Inc., 7.30%
due 8/15/2026 133,639 146,139
MCI WorldCom Inc.:
BBB+ Baa2 200,000 7.75% due 4/01/2007 217,758 227,068
BBB+ Baa2 200,000 6.125% due 4/15/2012 199,466 202,966
AA Aa3 125,000 SBC Communications Capital Corp., Series B,
6.50% due 3/12/2003 126,222 131,076
A- Baa1 100,000 Sprint Capital Corp., 6.125% due 11/15/2008 99,926 102,354
A- A3 365,000 US West Capital Funding Inc., 6.50% due
11/15/2018 362,905 369,679
----------- -----------
1,944,163 2,012,177
Utilities-- A+ A1 100,000 Consolidated Edison, Inc., Series 98-A, 6.25%
Electric--4.8% due 2/01/2008 100,000 105,824
AA- Aa3 300,000 Florida Power Corp., 6.875% due 2/01/2008 327,957 325,575
A A1 250,000 Mississippi Power Co., Series B, 6.05% due
5/01/2003 255,620 257,182
A A2 150,000 Virginia Electric & Power Co., Series B, 8.625%
due 10/01/2024 166,200 175,245
----------- -----------
849,777 863,826
Total Investments in Bonds & Notes--92.8% 16,510,411 16,822,925
SHORT-TERM
SECURITIES Issue
<S> <S> <C> <C> <C> <C>
US Government 980,000 Federal Home Loan Mortgage Corporation, 4.62%
Agency due 2/01/1999 980,000 980,000
Obligations**
- --5.4%
Total Investments in Short-Term
Securities--5.4% 980,000 980,000
Total Investments--98.2% $17,490,411 17,802,925
===========
Other Assets Less Liabilities--1.8% 325,549
-----------
Net Assets--100.0% $18,128,474
===========
<FN>
(a)The security may be offered and sold to "qualified institutional
buyers" under Rule 144A of the Securities Act of 1933.
*Subject to principal paydowns.
**US Government Agency Obligations are traded on a discount basis;
the interest rate shown reflects the discount rate paid at the time
of purchase by the Portfolio.
Ratings of issues shown have not been audited by Deloitte & Touche LLP.
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Asset Builder Program, Inc., January 31, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (in US dollars)
<CAPTION>
US Government Securities Portfolio
Face Interest Maturity Value
Issue Amount Rate Date(s) (Note 1a)
<S> <S> <C> <C> <C> <C>
US Government Federal Home Loan Mortgage Corporation $ 753,272 11.50% 6/01/2019 $ 846,128
Agency Mortgage- Federal Home Loan Mortgage Corporation--
Backed Gold Program 4,951,562 5.50 3/01/2013--12/01/2013 4,892,903
Obligations*-- Federal Home Loan Mortgage Corporation--
89.1% Gold Program 1,836,020 6.50 8/01/2010--9/01/2013 1,867,827
Federal National Mortgage Association 4,991,991 6.00 3/01/2028--11/01/2028 4,937,379
Federal National Mortgage Association--
Multi-Family #0073313++++ 2,010,182 6.18 1/01/2006 2,068,420
Government National Mortgage Association 473,334 6.50 1/15/2028 478,659
Government National Mortgage Association 1,181,474 7.00 11/15/2027--7/15/2028 1,210,997
Government National Mortgage Association 1,300,000 7.50 TBA(1) 1,342,653
Government National Mortgage Association 2,311,452 7.50 10/15/2025--3/15/2028 2,388,203
Total US Government Agency Mortgage-Backed Obligations (Cost--$19,849,651) 20,033,169
US Government US Treasury STRIPS** 1,500,000 5.635++ 8/15/2019 485,355
Obligations--2.2%
Total US Government Obligations (Cost--$478,214) 485,355
</TABLE>
Merrill Lynch Asset Builder Program, Inc., January 31, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<CAPTION>
US Government Securities Portfolio (concluded)
SHORT-TERM Face Value
SECURITIES Amount Issue (Note 1a)
<S> <S> <S> <C>
Repurchase $ 745,000 Morgan Stanley & Company, purchased on 1/29/1999
Agreements*** to yield 4.70% to 2/01/1999 $ 745,000
- --3.3%
US Government 2,500,000 Federal Home Loan Mortgage Corporation, 4.68% due 2/22/1999 2,493,175
Agency
Obligations****
- --11.1%
Total Investments in Short-Term Securities (Cost--$3,238,175) 3,238,175
Total Investments (Cost--$23,566,040)--105.7% 23,756,699
Liabilities in Excess of Other Assets--(5.7%) (1,281,377)
-----------
Net Assets--100.0% $22,475,322
===========
<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.
****US Government Agency Obligations are traded on a discount basis;
the interest rate shown reflects the discount rate paid at the time
of purchase by the Portfolio.
++Represents the yield-to-maturity on this zero coupon issue at the
time of purchase by the Portfolio.
++++Underlying multi-family loans have prepayments protection by
means of lockout periods and/or yield maintenance premiums.
See Notes to Financial Statements.
</TABLE>
EQUITY PORTFOLIO CHANGES
FUNDAMENTAL
VALUE PORTFOLIO
For the Quarter Ended January 31, 1999
Additions
Atlantic Richfield Company (ARCO)
The Boeing Company
The Chubb Corporation
Deletions
Mentor Graphics Corporation
Newmont Mining Corporation
TIG Holdings, Inc.
Tenneco, Inc.
GLOBAL
OPPORTUNITY
PORTFOLIO
For the Quarter Ended January 31, 1999
Additions
3Com Corporation
ABN AMRO Holding NV
ATI Technologies
America Online, Inc.
American Home Products Corporation
Asm Lithography Holding NV
Associates First Capital Corporation
(Class A)
Bank of Scotland
Bethlehem Steel Corporation
British Telecommunications PLC
Cable & Wireless PLC
Cap Gemini SA
Cardinal Health Inc.
Carrefour SA
Case Corporation
Credit Suisse Group (Registered Shares)
DaimlerChrysler AG
Dell Computer Corporation
EMC Corporation
Endesa SA
Energis PLC
Flextronics International Ltd.
Fox Entertainment Group, Inc. (Class A)
France Telecom SA
Fuji Photo Film
Fujikura Ltd.
Fujitsu Limited
General Motors Corporation
Glaxo Wellcome PLC
HSBC Holdings PLC
Intel Corporation
Kao Corporation
Keane, Inc.
Koninklijke Ahold NV
Lucent Technologies Inc.
Marui Co., Ltd.
Mattel, Inc.
Mellon Bank Corporation
Microsoft Corporation
Morgan Stanley Dean Witter & Co.
Morton International, Inc.
National Westminster Bank PLC
Nokia Oyj 'A'
Northern Telecom Limited
Novartis AG (Registered Shares)
Olympus Optical Co., Ltd.
Orix Corporation
Pfizer, Inc.
*REED
RWE AG
Reed International PLC
Siemens AG
Societe Generale 'A'
Stora Enso Oyj 'R'
Tandy Corporation
TeleWest Communications PLC
UBS AG
USX-U.S. Steel Group
VEBA AG
Vodafone Group PLC
Volvo AB 'B'
Zeneca Group PLC
Deletions
Alstom SA
Banca di Roma
British Aerospace PLC
Computer Associates International, Inc.
ConAgra, Inc.
First Union Corporation
Great Lakes Chemical Corporation
Kimberly-Clark Corporation
Owens-Illinois, Inc.
*REED
US Airways Group, Inc.
Warner-Lambert Company
GROWTH
OPPORTUNITY
PORTFOLIO
For the Quarter Ended January 31, 1999
Additions
Ameritech Corporation
Federal Home Loan Mortgage Association
Infinity Broadcasting Corp. (Class A)
International Business Machines
Corporation
Minnesota Mining and Manufacturing
Company (3M)
*Momentum Business Applications Inc.
Nextel Communications, Inc. (Class A)
Sprint Corporation (PCS Group)
T. Rowe Price Associates, Inc.
The TJX Companies, Inc.
Tommy Hilfiger Corporation
Vodafone Group PLC (ADR)
Deletions
Ascend Communications, Inc.
*Momentum Business Applications Inc.
The Seagram Company Ltd.
[FN]
*Added and deleted in the same quarter.
Merrill Lynch Asset Builder Program, Inc., January 31, 1999
<TABLE>
STATEMENTS OF ASSETS AND LIABILITIES
<CAPTION>
Fundamental Global Growth Quality US Government
Value Opportunity Opportunity Bond Securities
As of January 31, 1999 Portfolio Portfolio Portfolio Portfolio Portfolio
<S> <S> <C> <C> <C> <C> <C>
Assets: Investments, at value* (Note 1a) $100,022,037 $ 65,853,544 $114,915,401 $ 17,802,925 $ 23,756,699
Unrealized appreciation on forward
foreign exchange
contracts (Note 1b) -- 214,453 -- -- --
Foreign cash (Note 1c) -- 606,146 -- -- --
Cash 190 -- 109 637 --
Receivables:
Securities sold 485,309 1,425,668 4,490,049 -- --
Capital shares sold 156,161 83,450 951,917 50,998 70,420
Interest -- 300,015 -- 276,093 112,666
Dividends 121,587 59,389 58,297 -- --
Investment adviser (Note 2) -- -- -- 53,980 44,117
Principal paydowns -- -- -- -- 50,271
Deferred organization expenses
(Note 1f) 7,414 17,297 32,254 4,237 9,275
Prepaid registration fees and other
assets (Note 1f) 57,544 43,747 26,157 41,083 32,206
------------ ------------ ------------ ------------ ------------
Total assets 100,850,242 68,603,709 120,474,184 18,229,953 24,075,654
------------ ------------ ------------ ------------ ------------
Liabilities: Payables:
Securities purchased 9,267 1,012,683 5,354,616 -- 1,347,125
Capital shares redeemed. 334,904 225,973 216,222 24,413 163,583
Custodian bank (Note 1i) -- 758,479 -- -- --
Distributor (Note 2) 76,057 50,399 81,404 9,678 11,686
Investment adviser (Note 2) 52,059 39,432 54,532 -- --
Dividends to shareholders (Note 1g) -- -- -- 27,481 28,906
Accrued expenses and other
liabilities 175,818 151,914 174,461 39,907 49,032
------------ ------------ ------------ ------------ ------------
Total liabilities 648,105 2,238,880 5,881,235 101,479 1,600,332
------------ ------------ ------------ ------------ ------------
Net Assets: Net assets $100,202,137 $ 66,364,829 $114,592,949 $ 18,128,474 $ 22,475,322
============ ============ ============ ============ ============
Net Assets Class A Common Stock, $0.10 par
Consist of: value++ $ 2,532 $ 1,551 $ 3,139 $ 828 $ 12,156
Class B Common Stock, $0.10 par
value++++ 448,496 363,513 381,096 116,327 140,936
Class C Common Stock, $0.10 par
value++++++ 224,217 150,332 223,232 44,943 44,507
Class D Common Stock, $0.10 par
value++++++++ 44,121 27,182 19,988 15,509 16,168
Paid-in capital in excess of par 90,115,466 58,276,832 85,222,401 17,635,154 22,080,414
Undistributed realized capital gains
on investments and foreign currency
transactions--net 1,026,685 8,651 2,733,097 3,199 --
Accumulated distributions in excess of
realized capital gains on investments
and foreign currency transactions--net
(Note 1g) -- -- -- -- (9,518)
Unrealized appreciation on
investments and foreign currency
transactions--net 8,340,620 7,536,768 26,009,996 312,514 190,659
------------ ------------ ------------ ------------ ------------
Net assets $100,202,137 $ 66,364,829 $114,592,949 $ 18,128,474 $ 22,475,322
============ ============ ============ ============ ============
Net Asset Class A:
Value: Net assets $ 358,938 $ 193,188 $ 581,647 $ 84,478 $ 1,278,251
============ ============ ============ ============ ============
Shares outstanding 25,317 15,507 31,391 8,276 121,561
============ ============ ============ ============ ============
Net asset value and redemption
price per share $ 14.18 $ 12.46 $ 18.53 $ 10.21 $ 10.52
============ ============ ============ ============ ============
Class B:
Net assets $ 62,419,416 $ 44,454,526 $ 69,601,335 $ 11,873,880 $ 14,817,401
============ ============ ============ ============ ============
Shares outstanding 4,484,962 3,635,126 3,810,955 1,163,268 1,409,358
============ ============ ============ ============ ============
Net asset value and redemption
price per share $ 13.92 $ 12.23 $ 18.26 $ 10.21 $ 10.51
============ ============ ============ ============ ============
Class C:
Net assets $ 31,188,015 $ 18,342,501 $ 40,710,321 $ 4,587,376 $ 4,678,802
============ ============ ============ ============ ============
Shares outstanding 2,242,175 1,503,324 2,232,323 449,426 445,066
============ ============ ============ ============ ============
Net asset value and redemption
price per share $ 13.91 $ 12.20 $ 18.24 $ 10.21 $ 10.51
============ ============ ============ ============ ============
Class D:
Net assets $ 6,235,768 $ 3,374,614 $ 3,699,646 $ 1,582,740 $ 1,700,868
============ ============ ============ ============ ============
Shares outstanding 441,210 271,815 199,883 155,087 161,684
============ ============ ============ ============ ============
Net asset value and redemption
price per share $ 14.13 $ 12.42 $ 18.51 $ 10.21 $ 10.52
============ ============ ============ ============ ============
<FN>
*Identified cost $ 91,681,417 $ 58,523,334 $ 88,905,405 $ 17,490,411 $ 23,566,040
============ ============ ============ ============ ============
++Authorized shares--Class A 6,250,000 6,250,000 6,250,000 6,250,000 26,250,000
============ ============ ============ ============ ============
++++Authorized shares--Class B 10,000,000 10,000,000 10,000,000 6,250,000 26,250,000
============ ============ ============ ============ ============
++++++Authorized shares--Class C 6,250,000 6,250,000 6,250,000 6,250,000 6,250,000
============ ============ ============ ============ ============
++++++++Authorized shares--Class D 6,250,000 6,250,000 6,250,000 6,250,000 6,250,000
============ ============ ============ ============ ============
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Asset Builder Program, Inc., January 31, 1999
<TABLE>
STATEMENTS OF OPERATIONS
<CAPTION>
Fundamental Global Growth Quality US Government
Value Opportunity Opportunity Bond Securities
For the Year Ended January 31, 1999 Portfolio Portfolio Portfolio Portfolio Portfolio
<S> <S> <C> <C> <C> <C> <C>
Investment Interest and discount earned $ 570,164 $ 1,251,098 $ 276,705 $ 893,336 $ 900,923
Income Dividends* 1,483,070 730,440 573,325 -- --
(Notes Loaned securities -- -- -- -- 247
1d & 1e): Other -- -- -- -- 6,959
------------ ------------ ------------ ------------ ------------
Total income 2,053,234 1,981,538 850,030 893,336 908,129
------------ ------------ ------------ ------------ ------------
Expenses: Investment advisory fees (Note 2) 606,626 482,964 475,238 68,809 75,332
Account maintenance and distribution
fees--Class B (Note 2) 583,572 434,442 451,189 63,798 67,024
Account maintenance and distribution
fees--Class C (Note 2) 285,221 174,741 250,864 28,835 23,373
Transfer agent fees--Class B
(Note 2) 327,826 261,942 295,861 45,789 26,007
Transfer agent fees--Class C
(Note 2) 170,430 113,766 174,834 21,414 10,212
Registration fees (Note 1f) 61,415 39,379 42,708 62,027 57,172
Accounting services (Note 2) 97,773 52,604 76,370 13,853 15,907
Printing and shareholder reports 62,000 77,554 61,320 12,985 8,658
Professional fees 46,930 39,120 32,452 11,583 13,106
Custodian fees 22,225 56,346 22,501 14,669 14,738
Transfer agent fees--Class D
(Note 2) 28,439 16,706 13,859 4,124 1,640
Amortization of organization expenses
(Note 1f) 7,413 17,297 16,128 4,249 9,274
Account maintenance fees--Class D
(Note 2) 15,220 8,251 6,331 2,390 1,931
Directors' fees and expenses 9,438 7,217 5,572 1,370 1,447
Transfer agent fees--Class A
(Note 2) 1,680 894 2,059 3,399 6,922
Pricing fees (Note 2) 186 5,766 32 4,533 1,272
Other 7,014 5,109 4,713 2,092 2,155
------------ ------------ ------------ ------------ ------------
Total expenses before reimbursement 2,333,408 1,794,098 1,932,031 365,919 336,170
Reimbursement of expenses (Note 2) -- -- -- (270,895) (243,842)
------------ ------------ ------------ ------------ ------------
Total expenses after reimbursement 2,333,408 1,794,098 1,932,031 95,024 92,328
------------ ------------ ------------ ------------ ------------
Investment income (loss)--net. (280,174) 187,440 (1,082,001) 798,312 815,801
------------ ------------ ------------ ------------ ------------
Realized & Realized gain (loss) from:
Unrealized Investments--net 5,442,771 1,256,612 5,518,909 141,775 330,960
Gain Foreign currency transactions--net -- (869,098) -- -- --
(Loss) on Change in unrealized appreciation/
Investments depreciation on:
& Foreign Investments--net 162,925 4,213,679 21,955,016 139,750 (89,917)
Currency Foreign currency transactions
Transactions --net -- 232,516 -- -- --
- --Net (Notes ------------ ------------ ------------ ------------ ------------
1b, 1c, Net realized and unrealized gain
1e & 3): on investments and foreign
currency transactions 5,605,696 4,833,709 27,473,925 281,525 241,043
------------ ------------ ------------ ------------ ------------
Net Increase in Net Assets Resulting
from Operations $ 5,325,522 $ 5,021,149 $ 26,391,924 $ 1,079,837 $ 1,056,844
============ ============ ============ ============ ============
<FN>
*Net of foreign withholding tax
on dividends $ 13,093 $ 59,782 $ 6,402 -- --
============ ============ ============ ============ ============
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
Fundamental Global Opportunity
Value Portfolio Portfolio
For the Year Ended For the Year Ended
January 31, January 31,
Increase (Decrease) in Net Assets: 1999 1998 1999 1998
<S> <S> <C> <C> <C> <C>
Operations: Investment income (loss)--net $ (280,174) $ (358,548) $ 187,440 $ 117,575
Realized gain on investments and foreign currency
transactions--net 5,442,771 7,145,873 387,514 4,186,568
Change in unrealized appreciation/depreciation
on investments and foreign currency transactions
--net 162,925 2,970,461 4,446,195 (1,526,403)
------------ ------------ ------------ ------------
Net increase in net assets resulting from
operations 5,325,522 9,757,786 5,021,149 2,777,740
------------ ------------ ------------ ------------
Dividends & Investment income--net:
Distributions Class A -- -- -- (611)
to Class B -- -- -- (76,651)
Shareholders Class C -- -- -- (30,314)
(Note 1g): Class D -- -- -- (9,999)
In excess of investment income--net:
Class A -- -- -- (2,673)
Class B -- -- -- (335,476)
Class C -- -- -- (132,675)
Class D -- -- -- (43,763)
Realized gain on investments--net:
Class A (24,547) (35,250) -- (12,818)
Class B (3,462,399) (5,200,268) -- (3,181,736)
Class C (1,712,089) (2,463,175) -- (1,245,621)
Class D (393,697) (604,991) -- (238,373)
In excess of realized gain on investments
--net:
Class A -- -- (561) (1,779)
Class B -- -- (107,053) (441,592)
Class C -- -- (43,148) (172,879)
Class D -- -- (9,798) (33,084)
------------ ------------ ------------ ------------
Net decrease in net assets resulting from
dividends and distributions to shareholders (5,592,732) (8,303,684) (160,560) (5,960,044)
------------ ------------ ------------ ------------
Capital Net increase in net assets derived from capital
Share share transactions 23,869,513 20,907,035 1,550,635 19,283,250
Transactions ------------ ------------ ------------ ------------
(Note 4):
Net Assets: Total increase in net assets 23,602,303 22,361,137 6,411,224 16,100,946
Beginning of year 76,599,834 54,238,697 59,953,605 43,852,659
------------ ------------ ------------ ------------
End of year $100,202,137 $ 76,599,834 $ 66,364,829 $ 59,953,605
============ ============ ============ ============
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Asset Builder Program, Inc., January 31, 1999
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS (concluded)
<CAPTION>
Growth Opportunity Quality Bond US Government
Portfolio Portfolio Securities Portfolio
For the Year Ended For the Year Ended For the Year Ended
January 31, January 31, January 31,
Increase (Decrease) in Net Assets: 1999 1998 1999 1998 1999 1998
<S> <S> <C> <C> <C> <C> <C> <C>
Operations: Investment income
(loss)--net $ (1,082,001) $ (443,121) $ 798,312 $ 612,919 $ 815,801 $ 692,750
Realized gain on
investments and
foreign currency
transactions--net 5,518,909 2,875,420 141,775 34,086 330,960 100,678
Change in unrealized
appreciation/depreciation
on investments and
foreign currency
transactions--net 21,955,016 2,511,620 139,750 267,178 (89,917) 269,148
------------ ------------ ------------ ------------ ------------ ------------
Net increase in net
assets resulting from
operations 26,391,924 4,943,919 1,079,837 914,183 1,056,844 1,062,576
------------ ------------ ------------ ------------ ------------ ------------
Dividends & Investment income--net:
Distributions Class A -- -- (45,570) (123,527) (149,920) (266,916)
to Class B -- -- (488,136) (317,057) (469,886) (294,485)
Shareholders Class C -- -- (205,201) (137,274) (151,711) (110,661)
(Note 1g): Class D -- -- (59,405) (35,061) (44,284) (20,688)
Realized gain on
investments--net:
Class A (12,483) (13,310) (1,890) -- (26,863) (23,691)
Class B (1,099,540) (1,603,433) (76,535) -- (230,879) (37,250)
Class C (645,712) (796,299) (30,006) -- (73,379) (13,982)
Class D (78,747) (111,328) (9,735) -- (26,101) (2,134)
In excess of realized
gain on investments
--net:
Class A -- -- -- -- (716) --
Class B -- -- -- -- (6,152) --
Class C -- -- -- -- (1,955) --
Class D -- -- -- -- (695) --
------------ ------------ ------------ ------------ ------------ ------------
Net decrease in net assets
resulting from dividends
and distributions to
shareholders (1,836,482) (2,524,370) (916,478) (612,919) (1,182,541) (769,807)
------------ ------------ ------------ ------------ ------------ ------------
Capital Share Net increase in net
Transactions assets derived from
(Note 4): capital share
transactions 49,407,790 22,868,370 7,232,908 1,015,801 10,369,240 868,656
------------ ------------ ------------ ------------ ------------ ------------
Net Assets: Total increase in
net assets 73,963,232 25,287,919 7,396,267 1,317,065 10,243,543 1,161,425
Beginning of year 40,629,717 15,341,798 10,732,207 9,415,142 12,231,779 11,070,354
------------ ------------ ------------ ------------ ------------ ------------
End of year $114,592,949 $ 40,629,717 $ 18,128,474 $ 10,732,207 $ 22,475,322 $ 12,231,779
============ ============ ============ ============ ============ ============
See Notes to Financial Statements.
</TABLE>
<TABLE>
FINANCIAL HIGHLIGHTS
<CAPTION>
Fundamental Value Portfolio++++
Class A Class B
The following per share data and ratios
have been derived from information For the Year Ended For the Year Ended
provided in the financial statements. January 31, January 31,
Increase (Decrease) in Net Asset Value: 1999 1998 1997 1996++ 1999 1998 1997 1996++
<S> <S> <C> <C> <C> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning
Operating of year $ 13.98 $ 13.58 $ 11.67 $ 10.00 $ 13.75 $ 13.39 $ 11.55 $ 10.00
Performance: ------- ------- ------- ------- ------- ------- ------- -------
Investment income (loss)
--net .11 .07 (.01) .25 (.05) (.09) (.15) (.07)
Realized and unrealized
gain on investments--net 1.05 2.22 2.70 1.76 1.03 2.19 2.65 1.96
------- ------- ------- ------- ------- ------- ------- -------
Total from investment
operations 1.16 2.29 2.69 2.01 .98 2.10 2.50 1.89
------- ------- ------- ------- ------- ------- ------- -------
Less distributions:
Realized gain on
investments--net (.96) (1.89) (.78) (.20) (.81) (1.74) (.66) (.20)
In excess of realized
gain on investments--net -- -- -- (.11) -- -- -- (.11)
Return of capital--net -- -- -- (.03) -- -- -- (.03)
------- ------- ------- ------- ------- ------- ------- -------
Total distributions (.96) (1.89) (.78) (.34) (.81) (1.74) (.66) (.34)
------- ------- ------- ------- ------- ------- ------- -------
Net asset value, end
of year $ 14.18 $ 13.98 $ 13.58 $ 11.67 $ 13.92 $ 13.75 $ 13.39 $ 11.55
======= ======= ======= ======= ======= ======= ======= =======
Total Based on net asset
Investment value per share 8.51% 17.12% 23.20% 20.10%+++ 7.32% 15.91% 21.79% 18.89%+++
Return:* ======= ======= ======= ======= ======= ======= ======= =======
Ratio to Expenses, net of
Average Net reimbursement 1.45% 1.63% 2.03% 1.54% 2.55% 2.72% 3.11% 3.29%
Assets: ======= ======= ======= ======= ======= ======= ======= =======
Expenses 1.45% 1.63% 2.03% 2.00% 2.55% 2.72% 3.11% 3.39%
======= ======= ======= ======= ======= ======= ======= =======
Investment income (loss)
--net .75% .48% (.07%) 1.99% (.35%) (.60%) (1.15%) (.61%)
======= ======= ======= ======= ======= ======= ======= =======
Supplemental Net assets, end of year
Data: (in thousands) $ 359 $ 317 $ 209 $ 121 $62,419 $48,073 $34,828 $20,989
======= ======= ======= ======= ======= ======= ======= =======
Portfolio turnover 40.10% 68.75% 80.60% 51.37% 40.10% 68.75% 80.60% 51.37%
======= ======= ======= ======= ======= ======= ======= =======
<FN>
*Total investment returns exclude the effects of sales loads.
++The Program commenced operations on February 1, 1995.
++++Based on average shares outstanding.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Asset Builder Program, Inc., January 31, 1999
<TABLE>
FINANCIAL HIGHLIGHTS (continued)
<CAPTION>
Fundamental Value Portfolio++++
Class C Class D
The following per share data and ratios have
been derived from information provided in For the Year Ended For the Year Ended
the financial statements. January 31, January 31,
Increase (Decrease) in Net Asset Value: 1999 1998 1997 1996++ 1999 1998 1997 1996++
<S> <S> <C> <C> <C> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning
Operating of year $ 13.75 $ 13.39 $ 11.55 $ 10.00 $ 13.94 $ 13.54 $ 11.65 $ 10.00
Performance: ------- ------- ------- ------- ------- ------- ------- -------
Investment income (loss)
--net (.06) (.09) (.15) (.09) .07 .03 (.04) .03
Realized and unrealized
gain on investments--net 1.03 2.19 2.66 1.98 1.04 2.22 2.68 1.96
------- ------- ------- ------- ------- ------- ------- -------
Total from investment
operations .97 2.10 2.51 1.89 1.11 2.25 2.64 1.99
------- ------- ------- ------- ------- ------- ------- -------
Less distributions:
Realized gain on
investments--net (.81) (1.74) (.67) (.20) (.92) (1.85) (.75) (.20)
In excess of realized
gain on investments--net -- -- -- (.11) -- -- -- (.11)
Return of capital--net -- -- -- (.03) -- -- -- (.03)
------- ------- ------- ------- ------- ------- ------- -------
Total distributions (.81) (1.74) (.67) (.34) (.92) (1.85) (.75) (.34)
------- ------- ------- ------- ------- ------- ------- -------
Net asset value, end
of year $ 13.91 $ 13.75 $ 13.39 $ 11.55 $ 14.13 $ 13.94 $ 13.54 $ 11.65
======= ======= ======= ======= ======= ======= ======= =======
Total Based on net asset value
Investment per share 7.23% 15.93% 21.82% 18.89%+++ 8.19% 16.89% 22.82% 19.90%+++
Return:* ======= ======= ======= ======= ======= ======= ======= =======
Ratio to Expenses, net of
Average Net reimbursement 2.58% 2.75% 3.15% 3.38% 1.70% 1.89% 2.27% 2.45%
Assets: ======= ======= ======= ======= ======= ======= ======= =======
Expenses 2.58% 2.75% 3.15% 3.46% 1.70% 1.89% 2.27% 2.56%
======= ======= ======= ======= ======= ======= ======= =======
Investment income
(loss)--net (.39%) (.63%) (1.19%) (.75%) .50% .23% (.31%) .24%
======= ======= ======= ======= ======= ======= ======= =======
Supplemental Net assets, end of
Data: year (in thousands) $31,188 $22,896 $15,022 $ 7,990 $ 6,236 $ 5,314 $ 4,180 $ 2,471
======= ======= ======= ======= ======= ======= ======= =======
Portfolio turnover 40.10% 68.75% 80.60% 51.37% 40.10% 68.75% 80.60% 51.37%
======= ======= ======= ======= ======= ======= ======= =======
<FN>
*Total investment returns exclude the effects of sales loads.
++The Program commenced operations on February 1, 1995.
++++Based on average shares outstanding.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
<TABLE>
FINANCIAL HIGHLIGHTS (continued)
<CAPTION>
Global Opportunity Portfolio++++
Class A Class B
The following per share data and ratios
have been derived from information For the Year For the Year
provided in the financial statements. Ended January 31, Ended January 31,
Increase (Decrease) in Net Asset Value: 1999 1998 1997 1996++ 1999 1998 1997 1996++
<S> <S> <C> <C> <C> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning
Operating of year $ 11.40 $ 11.93 $ 10.82 $ 10.00 $ 11.30 $ 11.86 $ 10.76 $ 10.00
Performance: ------- ------- ------- ------- ------- ------- ------- -------
Investment income (loss)
--net .16 .16 .15 .34 .03 .02 (.04) .13
Realized and unrealized
gain on investments and
foreign currency trans-
actions--net .94 .69 1.21 .77 .93 .68 1.29 .85
------- ------- ------- ------- ------- ------- ------- -------
Total from investment
operations 1.10 .85 1.36 1.11 .96 .70 1.25 .98
------- ------- ------- ------- ------- ------- ------- -------
Less dividends and distri-
butions:
Investment income--net -- (.05) -- (.20) -- (.02) -- (.15)
In excess of investment
income on investments
--net -- (.20) (.13) (.06) -- (.11) (.03) (.04)
Realized gain on
investments--net -- (.99) (.12) -- -- (.99) (.12) --
In excess of realized
gain on investments--net (.04) (.14) -- (.03) (.03) (.14) -- (.03)
------- ------- ------- ------- ------- ------- ------- -------
Total dividends and
distributions (.04) (1.38) (.25) (.29) (.03) (1.26) (.15) (.22)
------- ------- ------- ------- ------- ------- ------- -------
Net asset value, end
of year $ 12.46 $ 11.40 $ 11.93 $ 10.82 $ 12.23 $ 11.30 $ 11.86 $ 10.76
======= ======= ======= ======= ======= ======= ======= =======
Total Based on net asset value
Investment per share. 9.63% 7.27% 12.68% 11.15%+++ 8.48% 5.97% 11.67% 9.89%+++
Return:* ======= ======= ======= ======= ======= ======= ======= =======
Ratio to Expenses, net of
Average Net reimbursement 1.72% 1.87% 2.47% 2.01% 2.82% 2.96% 3.76% 3.50%
Assets: ======= ======= ======= ======= ======= ======= ======= =======
Expenses 1.72% 1.87% 2.90% 2.32% 2.82% 2.96% 4.01% 3.61%
======= ======= ======= ======= ======= ======= ======= =======
Investment income (loss)
--net 1.37% 1.28% 1.83% 2.92% .26% .18% (.39%) 1.20%
======= ======= ======= ======= ======= ======= ======= =======
Supplemental Net assets, end of year
Data: (in thousands) $ 193 $ 167 $ 129 $ 3,025 $44,455 $40,687 $30,469 $16,117
======= ======= ======= ======= ======= ======= ======= =======
Portfolio turnover 134.89% 99.11% 125.68% 83.14% 134.89% 99.11% 125.68% 83.14%
======= ======= ======= ======= ======= ======= ======= =======
<FN>
*Total investment returns exclude the effects of sales loads.
++The Program commenced operations on February 1, 1995.
++++Based on average shares outstanding.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Asset Builder Program, Inc., January 31, 1999
<TABLE>
FINANCIAL HIGHLIGHTS (continued)
<CAPTION>
Global Opportunity Portfolio++++
Class C Class D
The following per share data and
ratios have been derived from information For the Year For the Year
provided in the financial statements. Ended January 31, Ended January 31,
Increase (Decrease) in Net Asset Value: 1999 1998 1997 1996++ 1999 1998 1997 1996++
<S> <S> <C> <C> <C> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning
Operating of year $ 11.28 $ 11.84 $ 10.75 $ 10.00 $ 11.39 $ 11.92 $ 10.80 $ 10.00
Performance: ------- ------- ------- ------- ------- ------- ------- -------
Investment income (loss)
--net .02 .02 (.05) .12 .13 .13 .05 .22
Realized and unrealized
gain on investments and
foreign currency trans-
actions--net .93 .68 1.29 .85 .94 .70 1.29 .85
------- ------- ------- ------- ------- ------- ------- -------
Total from investment
operations .95 .70 1.24 .97 1.07 .83 1.34 1.07
------- ------- ------- ------- ------- ------- ------- -------
Less dividends and
distributions:
Investment income--net -- (.02) -- (.15) -- (.04) -- (.18)
In excess of investment
income on investments
--net -- (.11) (.03) (.04) -- (.19) (.10) (.06)
Realized gain on inves-
tments--net -- (.99) (.12) -- -- (.99) (.12) --
In excess of realized
gain on investments--net (.03) (.14) -- (.03) (.04) (.14) -- (.03)
------- ------- ------- ------- ------- ------- ------- -------
Total dividends and
distributions (.03) (1.26) (.15) (.22) (.04) (1.36) (.22) (.27)
------- ------- ------- ------- ------- ------- ------- -------
Net asset value, end of
year $ 12.20 $ 11.28 $ 11.84 $ 10.75 $ 12.42 $ 11.39 $ 11.92 $ 10.80
======= ======= ======= ======= ======= ======= ======= =======
Total Based on net asset value
Investment per share. 8.40% 5.99% 11.61% 9.81%+++ 9.35% 7.02% 12.56% 10.80%+++
Return:* ======= ======= ======= ======= ======= ======= ======= =======
Ratio to Expenses, net of
Average Net reimbursement 2.87% 3.00% 3.81% 3.58% 1.97% 2.12% 2.91% 2.67%
Assets: ======= ======= ======= ======= ======= ======= ======= =======
Expenses 2.87% 3.00% 4.06% 3.65% 1.97% 2.12% 3.17% 2.77%
======= ======= ======= ======= ======= ======= ======= =======
Investment income (loss)
--net .20% .13% (.46%) 1.07% 1.11% 1.03% .48% 2.00%
======= ======= ======= ======= ======= ======= ======= =======
Supplemental Net assets, end of year
Data: (in thousands) $18,342 $15,951 $10,659 $ 4,770 $ 3,375 $ 3,149 $ 2,596 $ 1,513
======= ======= ======= ======= ======= ======= ======= =======
Portfolio turnover 134.89% 99.11% 125.68% 83.14% 134.89% 99.11% 125.68% 83.14%
======= ======= ======= ======= ======= ======= ======= =======
<FN>
*Total investment returns exclude the effects of sales loads.
++The Program commenced operations on February 1, 1995.
++++Based on average shares outstanding.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
<TABLE>
FINANCIAL HIGHLIGHTS (continued)
<CAPTION>
Growth Opportunity Portfolio++++
Class A Class B
For the For the
Period Period
The following per share data and ratios have been derived Feb. 2, Feb. 2,
from information provided in the financial statements. For the Year Ended 1996++ to For the Year Ended 1996++ to
January 31, Jan. 31, January 31, Jan. 31,
Increase (Decrease) in Net Asset Value: 1999 1998 1997 1999 1998 1997
<S> <S> <C> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 13.42 $ 11.79 $ 10.00 $ 13.27 $ 11.68 $ 10.00
Operating ------- ------- ------- ------- ------- -------
Performance: Investment income (loss)--net (.06) (.07) .03 (.23) (.22) (.21)
Realized and unrealized gain on
investments--net 5.63 2.83 1.76 5.54 2.80 1.89
------- ------- ------- ------- ------- -------
Total from investment operations 5.57 2.76 1.79 5.31 2.58 1.68
------- ------- ------- ------- ------- -------
Less distributions from realized gain on
investments--net (.46) (1.13) -- (.32) (.99) --
------- ------- ------- ------- ------- -------
Net asset value, end of period $ 18.53 $ 13.42 $ 11.79 $ 18.26 $ 13.27 $ 11.68
======= ======= ======= ======= ======= =======
Total Based on net asset value per share 42.02% 23.52% 17.90%+++ 40.41% 22.16% 16.80%+++
Investment ======= ======= ======= ======= ======= =======
Return:**
Ratios to Expenses, net of reimbursement 1.56% 1.98% 2.44%* 2.66% 3.09% 3.84%*
Average Net ======= ======= ======= ======= ======= =======
Assets: Expenses 1.56% 1.98% 3.08%* 2.66% 3.09% 4.00%*
======= ======= ======= ======= ======= =======
Investment income (loss)--net (.39%) (.55%) .23%* (1.50%) (1.66%) (1.93%)*
======= ======= ======= ======= ======= =======
Supplemental Net assets, end of period (in thousands) $ 582 $ 207 $ 58 $69,601 $25,752 $ 9,816
Data: ======= ======= ======= ======= ======= =======
Portfolio turnover 40.59% 60.24% 51.63% 40.59% 60.24% 51.63%
======= ======= ======= ======= ======= =======
<FN>
*Annualized.
**Total investment returns exclude the effects of sales loads.
++Commencement of operations.
++++Based on average shares outstanding.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Asset Builder Program, Inc., January 31, 1999
<TABLE>
FINANCIAL HIGHLIGHTS (continued)
<CAPTION>
Growth Opportunity Portfolio++++
Class C Class D
For the For the
Period Period
The following per share data and ratios have been derived Feb. 2, Feb. 2,
from information provided in the financial statements. For the Year Ended 1996++ to For the Year Ended 1996++ to
January 31, Jan. 31, January 31, Jan. 31,
Increase (Decrease) in Net Asset Value: 1999 1998 1997 1999 1998 1997
<S> <S> <C> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 13.26 $ 11.67 $ 10.00 $ 13.42 $ 11.78 $ 10.00
Operating ------- ------- ------- ------- ------- -------
Performance: Investment loss--net (.24) (.23) (.22) (.10) (.11) (.11)
Realized and unrealized gain on
investments--net 5.55 2.81 1.89 5.62 2.84 1.89
------- ------- ------- ------- ------- -------
Total from investment operations 5.31 2.58 1.67 5.52 2.73 1.78
------- ------- ------- ------- ------- -------
Less distributions from realized gain
on investments--net (.33) (.99) -- (.43) (1.09) --
------- ------- ------- ------- ------- -------
Net asset value, end of period $ 18.24 $ 13.26 $ 11.67 $ 18.51 $ 13.42 $ 11.78
======= ======= ======= ======= ======= =======
Total Based on net asset value per share 40.39% 22.17% 16.70%+++ 41.59% 23.30% 17.80%+++
Investment ======= ======= ======= ======= ======= =======
Return:**
Ratios to Expenses, net of reimbursement 2.71% 3.14% 3.88%* 1.80% 2.23% 2.94%*
Average Net ======= ======= ======= ======= ======= =======
Assets: Expenses 2.71% 3.14% 4.05%* 1.80% 2.23% 3.13%*
======= ======= ======= ======= ======= =======
Investment loss--net (1.55%) (1.71%) (1.98%)* (.64%) (.80%) (1.00%)*
======= ======= ======= ======= ======= =======
Supplemental Net assets, end of period (in thousands) $40,710 $13,059 $ 4,649 $ 3,700 $ 1,612 $ 819
Data: ======= ======= ======= ======= ======= =======
Portfolio turnover 40.59% 60.24% 51.63% 40.59% 60.24% 51.63%
======= ======= ======= ======= ======= =======
<CAPTION>
Quality Bond Portfolio
The following per share data and ratios Class A Class B
have been derived from information provided
in the financial statements. For the Year Ended For the Year Ended
January 31, January 31,
Increase (Decrease) in Net Asset Value: 1999 1998 1997 1996+++++ 1999 1998 1997 1996+++++
<S> <S> <C> <C> <C> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning
Operating of year $ 10.10 $ 9.79 $ 10.27 $ 10.00 $ 10.09 $ 9.79 $ 10.27 $ 10.00
Performance: ------- ------- ------- ------- ------- ------- ------- -------
Investment income--net .66 .69 .68 .62 .58 .60 .59 .54
Realized and unrealized
gain (loss) on investments
--net .18 .31 (.44) .27 .19 .30 (.44) .27
------- ------- ------- ------- ------- ------- ------- -------
Total from investment
operations .84 1.00 .24 .89 .77 .90 .15 .81
------- ------- ------- ------- ------- ------- ------- -------
Less dividends and distri-
butions:
Investment income--net (.66) (.69) (.68) (.62) (.58) (.60) (.59) (.54)
Realized gain on invest-
ments--net (.07) -- (.04) -- (.07) -- (.04) --
------- ------- ------- ------- ------- ------- ------- -------
Total dividends and
distributions (.73) (.69) (.72) (.62) (.65) (.60) (.63) (.54)
------- ------- ------- ------- ------- ------- ------- -------
Net asset value, end
of year $ 10.21 $ 10.10 $ 9.79 $ 10.27 $ 10.21 $ 10.09 $ 9.79 $ 10.27
======= ======= ======= ======= ======= ======= ======= =======
Total Based on net asset value
Investment per share. 8.57% 10.59% 2.51% 9.26%+++ 7.88% 9.55% 1.62% 8.35%+++
Return:** ======= ======= ======= ======= ======= ======= ======= =======
Ratio to Expenses, net of
Average Net reimbursement .00% .00% .00% .00% .75% .75% .78% .79%
Assets: ======= ======= ======= ======= ======= ======= ======= =======
Expenses 2.00% 2.62% 3.23% 2.60% 2.71% 3.51% 4.08% 3.31%
======= ======= ======= ======= ======= ======= ======= =======
Investment income--net 6.56% 7.01% 6.85% 6.22% 5.74% 6.14% 6.00% 5.52%
======= ======= ======= ======= ======= ======= ======= =======
Supplemental Net assets, end of year
Data: (in thousands) $ 84 $ 1,214 $ 2,254 $ 2,196 $11,874 $ 6,095 $ 4,824 $ 3,049
======= ======= ======= ======= ======= ======= ======= =======
Portfolio turnover 123.80% 114.61% 91.10% 86.68% 123.80% 114.61% 91.10% 86.68%
======= ======= ======= ======= ======= ======= ======= =======
<CAPTION>
Quality Bond Portfolio
Class C Class D
The following per share data and ratios
have been derived from information For the Year Ended For the Year Ended
provided in the financial statements. January 31, January 31,
Increase (Decrease) in Net Asset Value: 1999 1998 1997 1996+++++ 1999 1998 1997 1996+++++
<S> <S> <C> <C> <C> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning
Operating of year $ 10.09 $ 9.79 $ 10.27 $ 10.00 $ 10.09 $ 9.79 $ 10.27 $ 10.00
Performance: ------- ------- ------- ------- ------- ------- ------- -------
Investment income--net .58 .60 .58 .53 .63 .66 .65 .60
Realized and unrealized
gain (loss) on investments
--net .19 .30 (.44) .27 .19 .30 (.44) .27
------- ------- ------- ------- ------- ------- ------- -------
Total from investment
operations .77 .90 .14 .80 .82 .96 .21 .87
------- ------- ------- ------- ------- ------- ------- -------
Less dividends and distri-
butions:
Investment income--net (.58) (.60) (.58) (.53) (.63) (.66) (.65) (.60)
Realized gain on invest-
ments--net (.07) -- (.04) -- (.07) -- (.04) --
------- ------- ------- ------- ------- ------- ------- -------
Total dividends and
distributions (.65) (.60) (.62) (.53) (.70) (.66) (.69) (.60)
------- ------- ------- ------- ------- ------- ------- -------
Net asset value, end of
year $ 10.21 $ 10.09 $ 9.79 $ 10.27 $ 10.21 $ 10.09 $ 9.79 $ 10.27
======= ======= ======= ======= ======= ======= ======= =======
Total Based on net asset value
Investment per share 7.83% 9.46% 1.55% 8.27%+++ 8.41% 10.21% 2.25% 8.99%+++
Return:** ======= ======= ======= ======= ======= ======= ======= =======
Ratio to Expenses, net of
Average Net reimbursement .80% .80% .85% .87% .25% .25% .16% .19%
Assets: ======= ======= ======= ======= ======= ======= ======= =======
Expenses 2.82% 3.60% 4.15% 3.44% 2.08% 2.90% 3.47% 2.70%
======= ======= ======= ======= ======= ======= ======= =======
Investment income--net 5.69% 6.05% 5.93% 5.46% 6.21% 6.75% 6.62% 6.11%
======= ======= ======= ======= ======= ======= ======= =======
Supplemental Net assets, end of year
Data: (in thousands) $ 4,587 $ 2,814 $ 1,885 $ 1,123 $ 1,583 $ 609 $ 452 $ 221
======= ======= ======= ======= ======= ======= ======= =======
Portfolio turnover 123.80% 114.61% 91.10% 86.68% 123.80% 114.61% 91.10% 86.68%
======= ======= ======= ======= ======= ======= ======= =======
<FN>
*Annualized.
**Total investment returns exclude the effects of sales loads.
++Commencement of operations.
++++Based on average shares outstanding.
+++Aggregate total investment return.
+++++The Program commenced operations on February 1, 1995.
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Asset Builder Program, Inc., January 31, 1999
<TABLE>
FINANCIAL HIGHLIGHTS (continued)
<CAPTION>
US Government Securities Portfolio
Class A Class B
The following per share data and ratios
have been derived from information provided For the Year Ended For the Year Ended
in the financial statements. January 31, January 31,
Increase (Decrease) in Net Asset Value: 1999 1998 1997 1996++ 1999 1998 1997 1996++
<S> <S> <C> <C> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning
Operating of year $ 10.48 $ 10.20 $ 10.48 $ 10.00 $ 10.48 $ 10.20 $ 10.48 $ 10.00
Performance: ------- ------- ------- ------- ------- ------- ------- -------
Investment income--net .64 .69 .69 .76 .56 .61 .60 .68
Realized and unrealized
gain (loss) on investments
--net .21 .35 (.21) .74 .20 .35 (.21) .74
------- ------- ------- ------- ------- ------- ------- -------
Total from investment
operations .85 1.04 .48 1.50 .76 .96 .39 1.42
------- ------- ------- ------- ------- ------- ------- -------
Less dividends and
distributions:
Investment income--net (.64) (.69) (.69) (.76) (.56) (.61) (.60) (.68)
Realized gain on invest-
ments--net (.17) (.07) (.07) (.26) (.17) (.07) (.07) (.26)
In excess of realized gain
on investments--net --++++ -- -- -- --++++ -- -- --
------- ------- ------- ------- ------- ------- ------- -------
Total dividends and distri-
butions (.81) (.76) (.76) (1.02) (.73) (.68) (.67) (.94)
------- ------- ------- ------- ------- ------- ------- -------
Net asset value, end
of year $ 10.52 $ 10.48 $ 10.20 $ 10.48 $ 10.51 $ 10.48 $ 10.20 $ 10.48
======= ======= ======= ======= ======= ======= ======= =======
Total Based on net asset value
Investment per share 8.39% 10.66% 4.76% 15.47%+++ 7.48% 9.76% 3.90% 14.53%+++
Return:* ======= ======= ======= ======= ======= ======= ======= =======
Ratio to Expenses, net of
Average Net reimbursement .00% .00% .00% .00% .75% .75% .78% .81%
Assets: ======= ======= ======= ======= ======= ======= ======= =======
Expenses 1.73% 2.00% 2.92% 2.54% 2.34% 2.82% 3.72% 3.35%
======= ======= ======= ======= ======= ======= ======= =======
Investment income--net 6.13% 6.80% 6.69% 7.30% 5.26% 5.94% 5.85% 6.28%
======= ======= ======= ======= ======= ======= ======= =======
Supplemental Net assets, end of year
Data: (in thousands) $ 1,278 $ 3,233 $ 4,486 $ 5,463 $14,817 $ 6,627 $ 4,514 $ 3,043
======= ======= ======= ======= ======= ======= ======= =======
Portfolio turnover 310.91% 361.31% 27.32% 113.05% 310.91% 361.31% 27.32% 113.05%
======= ======= ======= ======= ======= ======= ======= =======
<FN>
*Total investment returns exclude the effects of sales loads.
++The Program commenced operations on February 1, 1995.
++++Amount is less than $.01 per share.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
<TABLE>
FINANCIAL HIGHLIGHTS (concluded)
<CAPTION>
US Government Securities Portfolio
Class C Class D
The following per share data and ratios
have been derived from information provided For the Year Ended For the Year Ended
in the financial statements. January 31, January 31,
Increase (Decrease) in Net Asset Value: 1999 1998 1997 1996++ 1999 1998 1997 1996++
<S> <S> <C> <C> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning
Operating of year $ 10.48 $ 10.19 $ 10.47 $ 10.00 $ 10.48 $ 10.20 $ 10.48 $ 10.00
Performance: ------- ------- ------- ------- ------- ------- ------- -------
Investment income--net .55 .60 .59 .67 .61 .67 .66 .74
Realized and unrealized
gain (loss) on investments
--net .20 .36 (.21) .73 .21 .35 (.21) .74
------- ------- ------- ------- ------- ------- ------- -------
Total from investment
operations .75 .96 .38 1.40 .82 1.02 .45 1.48
------- ------- ------- ------- ------- ------- ------- -------
Less dividends and
distributions:
Investment income--net (.55) (.60) (.59) (.67) (.61) (.67) (.66) (.74)
Realized gain on
investments--net (.17) (.07) (.07) (.26) (.17) (.07) (.07) (.26)
In excess of realized gain
on investments--net --++++ -- -- -- --++++ -- -- --
------- ------- ------- ------- ------- ------- ------- -------
Total dividends and distri-
butions (.72) (.67) (.66) (.93) (.78) (.74) (.73) (1.00)
------- ------- ------- ------- ------- ------- ------- -------
Net asset value, end of
year $ 10.51 $ 10.48 $ 10.19 $ 10.47 $ 10.52 $ 10.48 $ 10.20 $ 10.48
======= ======= ======= ======= ======= ======= ======= =======
Total Based on net asset value
Investment per share 7.43% 9.79% 3.83% 14.36%+++ 8.12% 10.38% 4.49% 15.13%+++
Return:* ======= ======= ======= ======= ======= ======= ======= =======
Ratio to Expenses, net of
Average Net reimbursement .80% .80% .85% .86% .25% .25% .21% .22%
Assets: ======= ======= ======= ======= ======= ======= ======= =======
Expenses 2.47% 2.90% 3.78% 3.41% 1.67% 2.25% 3.14% 2.77%
======= ======= ======= ======= ======= ======= ======= =======
Investment income--net 5.21% 5.88% 5.78% 6.21% 5.73% 6.53% 6.42% 6.90%
======= ======= ======= ======= ======= ======= ======= =======
Supplemental Net assets, end of year
Data: (in thousands) $ 4,679 $ 2,057 $ 1,757 $ 1,089 $ 1,701 $ 315 $ 313 $ 182
======= ======= ======= ======= ======= ======= ======= =======
Portfolio turnover 310.91% 361.31% 27.32% 113.05% 310.91% 361.31% 27.32% 113.05%
======= ======= ======= ======= ======= ======= ======= =======
<FN>
*Total investment returns exclude the effects of sales loads.
++The Program commenced operations on February 1, 1995.
++++Amount is less than $.01 per share.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Asset Builder Program, Inc., January 31, 1999
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
Merrill Lynch Asset Builder Program, Inc. (the "Program") is
registered under the Investment Company Act of 1940 as an open-end
management investment company consisting of five diversified
separate portfolios: Fundamental Value Portfolio, Global Opportunity
Portfolio, Growth Opportunity Portfolio, Quality Bond Portfolio and
US Government Securities Portfolio (the "Portfolios"), except for
Growth Opportunity Portfolio which is classified as a non-
diversified portfolio. The Program's financial statements are
prepared in accordance with generally accepted accounting principles
which may require the use of management accruals and estimates. The
Program's Portfolios offer four classes of shares under the Merrill
Lynch Select Pricing SM System. Shares of Class A and Class D are
sold with a front-end sales charge. Shares of Class B and Class C
may be subject to a contingent deferred sales charge. All classes of
shares have identical voting, dividend, liquidation and other rights
and the same terms and conditions, except that Class B, Class C and
Class D Shares bear certain expenses related to the account
maintenance of such shares, and Class B and Class C Shares also bear
certain expenses related to the distribution of such shares. Each
class has exclusive voting rights with respect to matters relating
to its account maintenance and distribution expenditures. The
following is a summary of significant accounting policies followed
by the Program.
(a) Valuation of investments--Portfolio securities which are traded
on stock exchanges are valued at the last sale price on the exchange
on which such securities are traded, as of the close of business on
the day the securities are being valued or, lacking any sales, at
the last available bid price. Securities traded in the over-the-
counter market are valued at the last available bid price in the
over-the-counter market prior to the time of valuation. In cases
where securities are traded on more than one exchange, the
securities are valued on the exchange designated by or under the
authority of the Board of Directors as the primary market.
Securities which are traded both in the over-the-counter market and
on a stock exchange are valued according to the broadest and most
representative market. Options written or purchased are valued at
the last sale price in the case of exchange-traded options. In the
case of options traded in the over-the-counter market, valuation is
the last asked price (options written) or the last bid price
(options purchased). Short-term securities are valued at amortized
cost, which approximates market value. Other investments, including
futures contracts and related options, are stated at market value.
Securities and assets for which market quotations are not readily
available are valued at fair market value as determined in good
faith by or under the direction of the Board of Directors of the
Program.
(b) Derivative financial instruments--Each Portfolio may engage in
various portfolio strategies to seek to increase its return by
hedging its portfolio against adverse movements in the equity, debt
or currency markets. Losses may arise due to changes in the value of
the contract or if the counterparty does not perform under the
contract.
* Financial futures contracts--The Portfolios may purchase or sell
financial futures contracts and options on such futures contracts
for the purpose of hedging the market risk on existing securities or
the intended purchase of securities. Futures contracts are contracts
for delayed delivery of securities at a specific future date and at
a specific price or yield. Upon entering into a contract, the
Portfolios deposit and maintain as collateral such initial margin as
required by the exchange on which the transaction is effected.
Pursuant to the contract, the Portfolios agree to receive from or
pay to the broker an amount of cash equal to the daily fluctuation
in value of the contract. Such receipts or payments are known as
variation margin and are recorded by the Portfolios as unrealized
gains or losses. When the contract is closed, the Portfolios record
a realized gain or loss equal to the difference between the value of
the contract at the time it was opened and the value at the time it
was closed.
* Options--The Portfolios are authorized to purchase and write call
and put options. When the Portfolios write an option, an amount
equal to the premium received by the Portfolios is reflected as an
asset and an equivalent liability. The amount of the liability is
subsequently marked to market to reflect the current market value of
the option written. When a security is purchased or sold through an
exercise of an option, the related premium paid (or received) is
added to (or deducted from) the basis of the security acquired or
deducted from (or added to) the proceeds of the security sold. When
an option expires (or the Portfolios enter into a closing
transaction), the Portfolios realize a gain or loss on the option to
the extent of the premiums received or paid (or gain or loss to the
extent the cost of the closing transaction exceeds the premium paid
or received).
Written and purchased options are non-income producing investments.
* Forward foreign exchange contracts--Fundamental Value, Global
Opportunity and Growth Opportunity Portfolios are authorized to
enter into forward foreign exchange contracts as a hedge against
either specific transactions or portfolio positions. Such contracts
are not entered on the Portfolios' records. However, the effect on
operations is recorded from the date the Portfolios enter into such
contracts.
* Foreign currency options and futures--Fundamental Value, Global
Opportunity and Growth Opportunity Portfolios may also purchase or
sell listed or over-the-counter foreign currency options, foreign
currency futures and related options on foreign currency futures as
a short or long hedge against possible variations in foreign
exchange rates. Such transactions may be effected with respect to
hedges on non-US dollar denominated securities owned by the
Portfolios, sold by the Portfolios but not yet delivered, or
committed or anticipated to be purchased by the Portfolios.
(c) Foreign currency transactions--Transactions denominated in
foreign currencies are recorded at the exchange rate prevailing when
recognized. Assets and liabilities denominated in foreign currencies
are valued at the exchange rate at the end of the period. Foreign
currency transactions are the result of settling (realized) or
valuing (unrealized) assets or liabilities expressed in foreign
currencies into US dollars. Realized and unrealized gains or losses
from investments include the effects of foreign exchange rates on
investments.
(d) Income taxes--It is each Portfolio's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute substantially all of its
taxable income to its shareholders. Therefore, no Federal income tax
provision is required. Under the applicable foreign tax law, a
withholding tax may be imposed on interest, dividends and capital
gains at various rates.
(e) Security transactions and investment income--Security
transactions are recorded on the dates the transactions are entered
into (the trade dates). Dividend income is recorded on the ex-
dividend dates. Dividends from foreign securities where the ex-
dividend date may have passed are subsequently recorded when the
Portfolios have determined the ex-dividend date. Interest income
(including amortization of discount) is recognized on the accrual
basis. Realized gains and losses on security transactions are
determined on the identified cost basis.
(f) Deferred organization expenses and prepaid registration
fees--Deferred organization expenses are charged to expense on a
straight-line basis over a period not exceeding five years. Prepaid
registration fees are charged to expense as the related shares are
issued.
(g) Dividends and distributions--Dividends from net investment
income of Quality Bond and US Government Securities Portfolios are
declared daily and paid monthly. Dividends from net investment
income of Fundamental Value, Global Opportunity and Growth
Opportunity Portfolios are recorded on the ex-dividend dates.
Distributions of capital gains for all Portfolios are recorded on
the ex-dividend dates. Distributions in excess of investment income
and realized gains are due primarily to differing tax treatments for
futures transactions and post-October losses.
(h) Dollar rolls--The US Government Securities Portfolio sells
mortgage-backed securities for delivery in the current month and
simultaneously contracts to repurchase substantially similar (same
type, coupon and maturity) securities on a specific future date.
(i) Custodian Bank--The Global Opportunity Portfolio recorded an
amount payable to the Custodian Bank reflecting an overnight
overdraft which resulted from a timing difference of a security
transaction settlement.
(j) Reclassification--Generally accepted accounting principles
require that certain components of net assets be adjusted to reflect
permanent differences between financial and tax reporting.
Accordingly, current year's permanent book/tax differences are:
$280,174 in the Fundamental Value Portfolio have been reclassified
between undistributed net realized capital gains and undistributed
net investment income; $869,098 in the Global Opportunity Portfolio
have been reclassified between undistributed net investment income
and undistributed net realized capital gains and $769,006 has been
reclassified between paid-in capital in excess of par and
undistributed net investment income; and $1,082,001 in the Growth
Opportunity Portfolio have been reclassified between undistributed
net realized capital gains and undistributed net investment income.
These reclassifications have no effect on net assets or net asset
values per share.
2. Investment Advisory Agreement and Transactions
with Affiliates:
The Program has entered into an Investment Advisory Agreement with
Merrill Lynch Asset Management, L.P. ("MLAM"). The general partner
of MLAM is Princeton Services, Inc. ("PSI"), an indirect wholly-
owned subsidiary of Merrill Lynch & Co., Inc. ("ML & Co."), which is
the limited partner. The Program has also entered into a
Distribution Agreement and Distribution Plans with Merrill Lynch
Funds Distributor ("MLFD" or "Distributor"), a division of Princeton
Funds Distributor, Inc. ("PFD"), which is a wholly-owned subsidiary
of Merrill Lynch Group, Inc.
MLAM is responsible for the management of the Program's portfolios
and provides the necessary personnel, facilities, equipment and
certain other services necessary to the operations of the Program.
For such services, each Portfolio pays a monthly fee based on the
average daily value of that Portfolio's net assets at the following
annual rates; 0.65% for Fundamental Value and Growth Opportunity
Portfolios, 0.50% for Quality Bond and US Government Securities
Portfolios and 0.75% for Global Opportunity Portfolio.
Merrill Lynch Asset Builder Program, Inc., January 31, 1999
NOTES TO FINANCIAL STATEMENTS (continued)
For the year ended January 31, 1999, MLAM had voluntarily waived
management fees and reimbursed each Portfolio for additional
expenses as follows:
Management Additional
Fee Expenses
Quality Bond Portfolio $68,809 $202,086
US Government Securities Portfolio 75,332 168,510
Pursuant to the Distribution Plans adopted by the Program in
accordance with Rule 12b-1 under the Investment Company Act of 1940,
each Portfolio pays the Distributor ongoing account maintenance and
distribution fees. The fees are accrued daily and paid monthly at
annual rates based upon the average daily net assets of the shares
as follows:
Account Maintenance Fees
Class B Class C Class D
Fundamental Value Portfolio 0.25% 0.25% 0.25%
Global Opportunity Portfolio 0.25 0.25 0.25
Growth Opportunity Portfolio 0.25 0.25 0.25
Quality Bond Portfolio 0.25 0.25 0.25
US Government Securities Portfolio 0.25 0.25 0.25
Distribution Fees
Class B Class C
Fundamental Value Portfolio 0.75% 0.75%
Global Opportunity Portfolio 0.75 0.75
Growth Opportunity Portfolio 0.75 0.75
Quality Bond Portfolio 0.50 0.55
US Government Securities Portfolio 0.50 0.55
Pursuant to a sub-agreement with the Distributor, Merrill Lynch,
Pierce, Fenner & Smith Incorporated ("MLPF&S"), a subsidiary of ML &
Co., also provides account maintenance and distribution services to
the Program. The ongoing account maintenance fee compensates the
Distributor and MLPF&S for providing account maintenance services to
Class B, Class C and Class D shareholders. The ongoing distribution
fee compensates the Distributor and MLPF&S for providing shareholder
and distribution-related services to Class B and Class C
shareholders.
For the year ended January 31, 1999, MLFD earned underwriting
discounts and MLPF&S earned dealer concessions on sales of each
Portfolio's Class A and Class D Shares as follows:
MLFD MLPF&S
Class A Class D Class A Class D
Fundamental Value Portfolio $16 $2,085 $310 $38,963
Global Opportunity Portfolio 5 724 112 14,421
Growth Opportunity Portfolio 8 2,177 163 41,443
Quality Bond Portfolio -- 264 -- 3,526
US Government Securities
Portfolio -- 207 -- 2,258
For the year ended January 31, 1999, MLPF&S received contingent
deferred sales charges relating to transactions in Class B and Class
C Shares as follows:
Class B Shares Class C Shares
Fundamental Value Portfolio $110,098 $8,806
Global Opportunity Portfolio 99,708 5,723
Growth Opportunity Portfolio 76,992 8,019
Quality Bond Portfolio 33,724 1,360
US Government Securities Portfolio 25,219 1,694
In addition, MLPF&S received $4,822, $13,322, and $7,398 in
commissions on the execution of portfolio security transactions for
the Fundamental Value, Global Opportunity and Growth Opportunity
Portfolios, respectively, for the year ended January 31, 1999.
Financial Data Services, Inc. ("FDS"), a wholly-owned subsidiary of
ML & Co., is the Program's transfer agent.
During the year ended January 31, 1999, Global Opportunity, Quality
Bond and US Government Securities Portfolios paid Merrill Lynch
Security Pricing Service, an affiliate of MLPF&S, $446, $3,452 and
$626, respectively, for security price quotations to compute the net
asset value of the Portfolios.
Accounting services are provided to each Portfolio by MLAM at cost.
Certain officers and/or directors of the Program are officers and/or
directors of MLAM, PSI, PFD, FDS, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the year ended January 31, 1999 were as follows:
Purchases Sales
Fundamental Value Portfolio $44,440,010 $32,868,148
Global Opportunity Portfolio 90,881,882 81,331,992
Growth Opportunity Portfolio 70,753,723 27,765,867
Quality Bond Portfolio 22,919,711 16,091,351
US Government Securities Portfolio 52,796,579 44,518,485
Net realized gains (losses) for the year ended January 31, 1999 and
net unrealized gains (losses) as of January 31, 1999 were as
follows:
Realized Unrealized
Fundamental Value Portfolio Gains Gains
Long-term investments $5,442,771 $8,340,620
---------- ----------
Total $5,442,771 $8,340,620
========== ==========
Realized Unrealized
Gains Gains
Global Opportunity Portfolio (Losses) (Losses)
Long-term investments $1,256,933 $7,330,210
Short-term investments (321) --
Forward foreign exchange contracts (940,654) 214,453
Foreign currency transactions 71,556 (7,895)
---------- ----------
Total $ 387,514 $7,536,768
========== ==========
Realized Unrealized
Growth Opportunity Portfolio Gains Gains
Long-term investments $5,518,909 $26,009,996
---------- -----------
Total $5,518,909 $26,009,996
========== ===========
Realized
Gains Unrealized
Quality Bond Portfolio (Losses) Gains
Long-term investments $ 141,781 $ 312,514
Short-term investments (6) --
---------- ----------
Total $ 141,775 $ 312,514
========== ==========
Realized Unrealized
US Government Securities Portfolio Gains Gains
Long-term investments $ 330,960 $ 190,659
---------- ----------
Total $ 330,960 $ 190,659
========== ==========
As of January 31, 1999, net unrealized appreciation for Federal
income tax purposes was as follows:
Gross Gross
Unrealized Unrealized Net Unrealized
Appreciation Depreciation Appreciation
Fundamental Value
Portfolio $16,277,908 $(7,940,480) $ 8,337,428
Global Opportunity
Portfolio 9,087,933 (1,806,949) 7,280,984
Growth Opportunity
Portfolio 28,304,963 (2,298,846) 26,006,117
Quality Bond Portfolio 402,472 (89,958) 312,514
US Government Securities
Portfolio 194,067 (26,837) 167,230
The aggregate cost of investments at January 31, 1999 for Federal
income tax purposes was $91,684,609 for the Fundamental Value
Portfolio, $58,572,560 for the Global Opportunity Portfolio,
$88,909,284 for the Growth Opportunity Portfolio, $17,490,411 for
the Quality Bond Portfolio, and $23,589,469 for the US Government
Securities Portfolio.
4. Capital Share Transactions:
Net increase in net assets derived from capital share transactions
for the years ended January 31, 1999 and January 31, 1998,
respectively, were as follows:
For the For the
Year Ended Year Ended
Jan. 31, 1999 Jan. 31, 1998
Fundamental Value Portfolio $23,869,513 $20,907,035
Global Opportunity Portfolio 1,550,635 19,283,250
Growth Opportunity Portfolio 49,407,790 22,868,370
Quality Bond Portfolio 7,232,908 1,015,801
US Government Securities Portfolio 10,369,240 868,656
Transactions in capital shares for each class were as follows:
Fundamental Value Portfolio
Class A Shares for the Year Dollar
Ended January 31, 1999 Shares Amount
Shares sold 10,754 $ 161,658
Shares issued to shareholders in
reinvestment of distributions 1,225 17,038
---------- ------------
Total issued 11,979 178,696
Shares redeemed (9,325) (134,621)
---------- ------------
Net increase 2,654 $ 44,075
========== ============
Fundamental Value Portfolio
Class A Shares for the Year Dollar
Ended January 31, 1998 Shares Amount
Shares sold 9,220 $ 132,100
Shares issued to shareholders in
reinvestment of distributions 2,200 30,166
---------- ------------
Total issued 11,420 162,266
Shares redeemed (4,168) (58,954)
---------- ------------
Net increase 7,252 $ 103,312
========== ============
Merrill Lynch Asset Builder Program, Inc., January 31, 1999
NOTES TO FINANCIAL STATEMENTS (continued)
Fundamental Value Portfolio
Class B Shares for the Year Dollar
Ended January 31, 1999 Shares Amount
Shares sold 1,426,995 $ 20,878,799
Shares issued to shareholders in
reinvestment of distributions 225,258 3,081,461
---------- ------------
Total issued 1,652,253 23,960,260
Shares redeemed (639,677) (9,108,251)
Automatic conversion of shares (23,354) (336,901)
---------- ------------
Net increase 989,222 $ 14,515,108
========== ============
Fundamental Value Portfolio
Class B Shares for the Year Dollar
Ended January 31, 1998 Shares Amount
Shares sold 1,066,388 $ 15,104,878
Shares issued to shareholders in
reinvestment of distributions 364,846 4,925,423
---------- ------------
Total issued 1,431,234 20,030,301
Automatic conversion of shares (18,069) (264,298)
Shares redeemed (518,101) (7,502,100)
---------- ------------
Net increase 895,064 $ 12,263,903
========== ============
Fundamental Value Portfolio
Class C Shares for the Year Dollar
Ended January 31, 1999 Shares Amount
Shares sold 877,348 $ 12,795,646
Shares issued to shareholders in
reinvestment of distributions 108,450 1,482,107
---------- ------------
Total issued 985,798 14,277,753
Shares redeemed (409,005) (5,866,086)
---------- ------------
Net increase 576,793 $ 8,411,667
========== ============
Fundamental Value Portfolio
Class C Shares for the Year Dollar
Ended January 31, 1998 Shares Amount
Shares sold 601,444 $ 8,526,327
Shares issued to shareholders in
reinvestment of distributions 170,139 2,296,877
---------- ------------
Total issued 771,583 10,823,204
Shares redeemed (227,728) (3,289,347)
---------- ------------
Net increase 543,855 $ 7,533,857
========== ============
Fundamental Value Portfolio
Class D Shares for the Year Dollar
Ended January 31, 1999 Shares Amount
Shares sold 77,319 $ 1,160,248
Automatic conversion of shares 22,951 336,901
Shares issued to shareholders in
reinvestment of distributions 24,832 344,361
---------- ------------
Total issued 125,102 1,841,510
Shares redeemed (64,966) (942,847)
---------- ------------
Net increase 60,136 $ 898,663
========== ============
Fundamental Value Portfolio
Class D Shares for the Year Dollar
Ended January 31, 1998 Shares Amount
Shares sold 56,654 $ 867,530
Automatic conversion of shares 22,297 264,298
Shares issued to shareholders in
reinvestment of distributions 41,085 562,040
---------- ------------
Total issued 120,036 1,693,868
Shares redeemed (47,582) (687,905)
---------- ------------
Net increase 72,454 $ 1,005,963
========== ============
Global Opportunity Portfolio
Class A Shares for the Year Dollar
Ended January 31, 1999 Shares Amount
Shares sold 6,091 $ 72,429
Shares issued to shareholders in
reinvestment of distributions 37 472
---------- ------------
Total issued 6,128 72,901
Shares redeemed (5,305) (64,461)
---------- ------------
Net increase 823 $ 8,440
========== ============
Global Opportunity Portfolio
Class A Shares for the Year Dollar
Ended January 31, 1998 Shares Amount
Shares sold 6,103 $ 76,288
Shares issued to shareholders in
reinvestment of dividends and
distributions 1,486 16,699
---------- ------------
Total issued 7,589 92,987
Shares redeemed (3,720) (45,571)
---------- ------------
Net increase 3,869 $ 47,416
========== ============
Global Opportunity Portfolio
Class B Shares for the Year Dollar
Ended January 31, 1999 Shares Amount
Shares sold 780,412 $ 9,256,376
Shares issued to shareholders in
reinvestment of distributions 7,851 97,584
---------- ------------
Total issued 788,263 9,353,960
Automatic conversion of shares (27,640) (322,415)
Shares redeemed (724,680) (8,517,247)
---------- ------------
Net increase 35,943 $ 514,298
========== ============
Global Opportunity Portfolio
Class B Shares for the Year Dollar
Ended January 31, 1998 Shares Amount
Shares sold 1,157,893 $ 14,316,582
Shares issued to shareholders in
reinvestment of dividends and
distributions 341,688 3,813,239
---------- ------------
Total issued 1,499,581 18,129,821
Automatic conversion of shares (21,068) (255,000)
Shares redeemed (449,247) (5,533,115)
---------- ------------
Net increase 1,029,266 $ 12,341,706
========== ============
Global Opportunity Portfolio
Class C Shares for the Year Dollar
Ended January 31, 1999 Shares Amount
Shares sold 463,398 $ 5,459,304
Shares issued to shareholders in
reinvestment of distributions 3,028 37,573
---------- ------------
Total issued 466,426 5,496,877
Shares redeemed (376,709) (4,407,768)
---------- ------------
Net increase 89,717 $ 1,089,109
========== ============
Global Opportunity Portfolio
Class C Shares for the Year Dollar
Ended January 31, 1998 Shares Amount
Shares sold 597,712 $ 7,395,862
Shares issued to shareholders
in reinvestment of dividends and
distributions 130,118 1,449,520
---------- ------------
Total issued 727,830 8,845,382
Shares redeemed (214,300) (2,642,190)
---------- ------------
Net increase 513,530 $ 6,203,192
========== ============
Global Opportunity Portfolio
Class D Shares for the Year Dollar
Ended January 31, 1999 Shares Amount
Shares sold 37,028 $ 440,001
Automatic conversion of shares 27,344 322,415
Shares issued to shareholders in
reinvestment of distributions 712 8,947
---------- ------------
Total issued 65,084 771,363
Shares redeemed (69,853) (832,575)
---------- ------------
Net decrease (4,769) $ (61,212)
========== ============
Global Opportunity Portfolio
Class D Shares for the Year Dollar
Ended January 31, 1998 Shares Amount
Shares sold 57,335 $ 713,616
Automatic conversion of shares 20,888 255,000
Shares issued to shareholders in
reinvestment of dividends and
distributions 26,790 300,854
---------- ------------
Total issued 105,013 1,269,470
Shares redeemed (46,165) (578,534)
---------- ------------
Net increase 58,848 $ 690,936
========== ============
Growth Opportunity Portfolio
Class A Shares for the Year Dollar
Ended January 31, 1999 Shares Amount
Shares sold 19,308 $ 302,071
Shares issued to shareholders in
reinvestment of distributions 597 9,622
---------- ------------
Total issued 19,905 311,693
Shares redeemed (3,917) (62,317)
---------- ------------
Net increase 15,988 $ 249,376
========== ============
Growth Opportunity Portfolio
Class A Shares for the Year Dollar
Ended January 31, 1998 Shares Amount
Shares sold 11,373 $ 148,959
Shares issued to shareholders in
reinvestment of distributions 959 12,711
---------- ------------
Total issued 12,332 161,670
Shares redeemed (1,802) (24,112)
---------- ------------
Net increase 10,530 $ 137,558
========== ============
Growth Opportunity Portfolio
Class B Shares for the Year Dollar
Ended January 31, 1999 Shares Amount
Shares sold 2,139,948 $ 32,864,645
Shares issued to shareholders in
reinvestment of distributions 60,229 957,801
---------- ------------
Total issued 2,200,177 33,822,446
Automatic conversion of shares (6,136) (95,275)
Shares redeemed (323,318) (4,941,105)
---------- ------------
Net increase 1,870,723 $ 28,786,066
========== ============
Growth Opportunity Portfolio
Class B Shares for the Year Dollar
Ended January 31, 1998 Shares Amount
Shares sold 1,121,578 $ 14,651,783
Shares issued to shareholders in
reinvestment of distributions 113,008 1,483,802
---------- ------------
Total issued 1,234,586 16,135,585
Automatic conversion of shares (614) (7,993)
Shares redeemed (134,463) (1,761,065)
---------- ------------
Net increase 1,099,509 $ 14,366,527
========== ============
Merrill Lynch Asset Builder Program, Inc., January 31, 1999
NOTES TO FINANCIAL STATEMENTS (continued)
Growth Opportunity Portfolio
Class C Shares for the Year Dollar
Ended January 31, 1999 Shares Amount
Shares sold 1,420,650 $ 21,800,313
Shares issued to shareholders in
reinvestment of distributions 34,631 549,966
---------- ------------
Total issued 1,455,281 22,350,279
Shares redeemed (207,727) (3,224,985)
---------- ------------
Net increase 1,247,554 $ 19,125,294
========== ============
Growth Opportunity Portfolio
Class C Shares for the Year Dollar
Ended January 31, 1998 Shares Amount
Shares sold 619,880 $ 8,145,982
Shares issued to shareholders in
reinvestment of distributions 55,973 734,362
---------- ------------
Total issued 675,853 8,880,344
Shares redeemed (89,393) (1,181,122)
---------- ------------
Net increase 586,460 $ 7,699,222
========== ============
Growth Opportunity Portfolio
Class D Shares for the Year Dollar
Ended January 31, 1999 Shares Amount
Shares sold 92,179 $ 1,434,470
Automatic conversion of shares 6,050 95,275
Shares issued to shareholders in
reinvestment of distributions 4,195 67,549
---------- ------------
Total issued 102,424 1,597,294
Shares redeemed (22,687) (350,240)
---------- ------------
Net increase 79,737 $ 1,247,054
========== ============
Growth Opportunity Portfolio
Class D Shares for the Year Dollar
Ended January 31, 1998 Shares Amount
Shares sold 50,926 $ 667,879
Automatic conversion of shares 607 7,993
Shares issued to shareholders in
reinvestment of distributions 7,535 99,917
---------- ------------
Total issued 59,068 775,789
Shares redeemed (8,444) (110,726)
---------- ------------
Net increase 50,624 $ 665,063
========== ============
Quality Bond Portfolio
Class A Shares for the Year Dollar
Ended January 31, 1999 Shares Amount
Shares sold 4,657 $ 47,345
Shares issued to shareholders in
reinvestment of dividends and
distributions 4,895 49,450
---------- ------------
Total issued 9,552 96,795
Shares redeemed (121,469) (1,230,280)
---------- ------------
Net decrease (111,917) $ (1,133,485)
========== ============
Quality Bond Portfolio
Class A Shares for the Year Dollar
Ended January 31, 1998 Shares Amount
Shares sold 10,350 $ 102,471
Shares issued to shareholders in
reinvestment of dividends 12,748 125,532
---------- ------------
Total issued 23,098 228,003
Shares redeemed (133,027) (1,309,569)
---------- ------------
Net decrease (109,929) $ (1,081,566)
========== ============
Quality Bond Portfolio
Class B Shares for the Year Dollar
Ended January 31, 1999 Shares Amount
Shares sold 714,191 $ 7,238,685
Shares issued to shareholders in
reinvestment of dividends and
distributions 44,980 455,388
---------- ------------
Total issued 759,171 7,694,073
Automatic conversion of shares (1,217) (12,248)
Shares redeemed (198,670) (2,010,792)
---------- ------------
Net increase 559,284 $ 5,671,033
========== ============
Quality Bond Portfolio
Class B Shares for the Year Dollar
Ended January 31, 1998 Shares Amount
Shares sold 238,564 $ 2,356,757
Shares issued to shareholders in
reinvestment of dividends 28,335 279,605
---------- ------------
Total issued 266,899 2,636,362
Automatic conversion of shares (3,080) (30,343)
Shares redeemed (152,591) (1,500,368)
---------- ------------
Net increase 111,228 $ 1,105,651
========== ============
Quality Bond Portfolio
Class C Shares for the Year Dollar
Ended January 31, 1999 Shares Amount
Shares sold 263,076 $ 2,667,835
Shares issued to shareholders in
reinvestment of dividends and
distributions 19,472 197,100
---------- ------------
Total issued 282,548 2,864,935
Shares redeemed (112,038) (1,132,914)
---------- ------------
Net increase 170,510 $ 1,732,021
========== ============
Quality Bond Portfolio
Class C Shares for the Year Dollar
Ended January 31, 1998 Shares Amount
Shares sold 123,241 $ 1,215,099
Shares issued to shareholders in
reinvestment of dividends 12,781 126,179
---------- ------------
Total issued 136,022 1,341,278
Shares redeemed (49,669) (489,795)
---------- ------------
Net increase 86,353 $ 851,483
========== ============
Quality Bond Portfolio
Class D Shares for the Year Dollar
Ended January 31, 1999 Shares Amount
Shares sold. 120,258 $ 1,221,715
Automatic conversion of shares 1,217 12,248
Shares issued to shareholders in
reinvestment of dividends and
distributions 6,072 61,552
---------- ------------
Total issued 127,547 1,295,515
Shares redeemed (32,858) (332,176)
---------- ------------
Net increase 94,689 $ 963,339
========== ============
Quality Bond Portfolio
Class D Shares for the Year Dollar
Ended January 31, 1998 Shares Amount
Shares sold 18,271 $ 179,315
Automatic conversion of shares 3,079 30,343
Shares issued to shareholders in
reinvestment of dividends 3,192 31,498
---------- ------------
Total issued 24,542 241,156
Shares redeemed (10,326) (100,923)
---------- ------------
Net increase 14,216 $ 140,233
========== ============
US Government Securities Portfolio
Class A Shares for the Year Dollar
Ended January 31, 1999 Shares Amount
Shares sold 17,540 $ 185,778
Shares issued to shareholders in
reinvestment of dividends and
distributions 14,639 153,751
---------- ------------
Total issued 32,179 339,529
Shares redeemed (219,139) (2,309,136)
---------- ------------
Net decrease (186,960) $ (1,969,607)
========== ============
US Government Securities Portfolio
Class A Shares for the Year Dollar
Ended January 31, 1998 Shares Amount
Shares sold 15,526 $ 160,174
Shares issued to shareholders in
reinvestment of dividends and
distributions 28,552 293,404
---------- ------------
Total issued 44,078 453,578
Shares redeemed (175,447) (1,802,826)
---------- ------------
Net decrease (131,369) $ (1,349,248)
========== ============
US Government Securities Portfolio
Class B Shares for the Year Dollar
Ended January 31, 1999 Shares Amount
Shares sold 1,193,298 $ 12,670,482
Shares issued to shareholders in
reinvestment of dividends and
distributions 33,286 350,497
---------- ------------
Total issued 1,226,584 13,020,979
Automatic conversion of shares (878) (9,217)
Shares redeemed (448,830) (4,731,353)
---------- ------------
Net increase 776,876 $ 8,280,409
========== ============
US Government Securities Portfolio
Class B Shares for the Year Dollar
Ended January 31, 1998 Shares Amount
Shares sold 276,296 $ 2,869,324
Shares issued to shareholders in
reinvestment of dividends and
distributions 24,351 250,752
---------- ------------
Total issued 300,647 3,120,076
Automatic conversion of shares (2,614) (26,842)
Shares redeemed (108,297) (1,114,491)
---------- ------------
Net increase 189,736 $ 1,978,743
========== ============
Merrill Lynch Asset Builder Program, Inc., January 31, 1999
NOTES TO FINANCIAL STATEMENTS (concluded)
US Government Securities Portfolio
Class C Shares for the Year Dollar
Ended January 31, 1999 Shares Amount
Shares sold 368,279 $ 3,907,650
Shares issued to shareholders in
reinvestment of dividends and
distributions 12,091 127,255
---------- ------------
Total issued 380,370 4,034,905
Shares redeemed (131,614) (1,386,966)
---------- ------------
Net increase 248,756 $ 2,647,939
========== ============
US Government Securities Portfolio
Class C Shares for the Year Dollar
Ended January 31, 1998 Shares Amount
Shares sold 63,483 $ 652,334
Shares issued to shareholders in
reinvestment of dividends and
distributions 11,384 117,111
---------- ------------
Total issued 74,867 769,445
Shares redeemed (50,945) (524,818)
---------- ------------
Net increase 23,922 $ 244,627
========== ============
US Government Securities Portfolio
Class D Shares for the Year Dollar
Ended January 31, 1999 Shares Amount
Shares sold. 144,907 $ 1,551,180
Automatic conversion of shares 878 9,217
Shares issued to shareholders in
reinvestment of dividends and
distributions 3,471 36,636
---------- ------------
Total issued 149,256 1,597,033
Shares redeemed (17,654) (186,534)
---------- ------------
Net increase 131,602 $ 1,410,499
========== ============
US Government Securities Portfolio
Class D Shares for the Year Dollar
Ended January 31, 1998 Shares Amount
Shares sold 9,830 $ 100,818
Automatic conversion of shares 2,611 26,842
Shares issued to shareholders in
reinvestment of dividends and
distributions 1,742 17,916
---------- ------------
Total issued 14,183 145,576
Shares redeemed (14,749) (151,042)
---------- ------------
Net decrease (566) $ (5,466)
========== ============
5. Commitments:
At January 31, 1999, the Global Opportunity Portfolio had entered
into foreign exchange contracts, in addition to the contracts listed
in the Schedule of Investments, under which it had agreed to
purchase and sell foreign currency with approximate values of
$89,000 and $389,000, respectively.
<AUDIT-REPORT>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders,
Merrill Lynch Asset Builder Program, Inc.:
We have audited the accompanying statements of assets and
liabilities, including the schedules of investments, of Fundamental
Value, Global Opportunity, Growth Opportunity, Quality Bond and US
Government Securities Portfolios of Merrill Lynch Asset Builder
Program, Inc. (the "Program") as of January 31, 1999, the related
statements of operations for the year then ended and changes in net
assets for each of the periods in the two-year period then ended,
and the financial highlights for the periods presented. These
financial statements and the financial highlights are the
responsibility of the Program's management. Our responsibility is to
express an opinion on these financial statements and financial
highlights based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements and the financial highlights are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.
Our procedures included confirmation of securities owned at January
31, 1999 by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights
present fairly, in all material respects, the financial positions of
Fundamental Value, Global Opportunity, Growth Opportunity, Quality
Bond and US Government Securities Portfolios of Merrill Lynch Asset
Builder Program, Inc. as of January 31, 1999, the results of their
operations, the changes in their net assets, and the financial
highlights for the respective stated periods in conformity with
generally accepted accounting principles.
Deloitte & Touche LLP
Princeton, New Jersey
March 19, 1999
</AUDIT-REPORT>
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 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
Gerald M. Richard, Treasurer and Norman R. Harvey, Senior Vice
President of Merrill Lynch Asset Builder Program, Inc. have recently
retired. Their colleagues at Merrill Lynch Asset Management, L.P.
join the Fund's Board of Directors in wishing Mr. Richard and Mr.
Harvey well in their retirements.
