MERRILL LYNCH
ASSET BUILDER
PROGRAM, INC.
FUND LOGO
Semi-Annual Report
July 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.
Officers and
Directors
Terry K. Glenn, President and Director
Joe Grills, Director
Walter Mintz, Director
Robert S. Salomon Jr., Director
Melvin R. Seiden, Director
Stephen B. Swensrud, Director
Arthur Zeikel, Director
Christopher G. Ayoub, Senior Vice President
Robert C. Doll, Senior Vice President
Lawrence R. Fuller, Senior Vice President
Geraldine C. Gunn Hertig, Senior Vice President
Gregory Mark Maunz, Senior Vice President
Joseph T. Monagle Jr., Senior Vice President
Thomas R. Robinson, Senior Vice President
Donald C. Burke, Vice President and Treasurer
Barbara G. Fraser, Secretary
Custodian
The Bank of New York
90 Washington Street, 12th Floor
New York, NY 10286
Transfer Agent
Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 637-3863
Merrill Lynch Asset Builder Program, Inc., July 31, 1999
DEAR SHAREHOLDER
We are pleased to provide you with this semi-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 for all five portfolios can be
found on pages 7--10 of this report to shareholders.
Fundamental Value Portfolio
For the quarter ended July 31, 1999, Fundamental Value Portfolio's
Class A, Class B, Class C and Class D Shares gained 0.64%, 0.39%,
0.39% and 0.58%, respectively, slightly exceeding the -0.16% total
return for the unmanaged Standard & Poor's 500 (S&P 500) Index. In
contrast to the April quarter, when value equities sharply
outperformed growth issues, the two investment styles performed
comparably during the July quarter.
Leading sectors in the Portfolio included technology, capital goods
and telecommunications, with standout individual gainers including
Hewlett-Packard Company, SPX Corporation, Honeywell Inc.,
International Business Machines Corporation and Novell, Inc. All
five issues enjoyed improved fundamental trends during the July
quarter, while Honeywell Inc. also benefited from a takeover by
Allied Signal, Inc. Lagging areas in the July quarter included
automotive, insurance and financial equities. Performance in these
sectors was constrained by the prospect of a less favorable interest
rate backdrop.
During the July quarter, we initiated three new positions and
eliminated five. The additions to the Portfolio included Compaq
Computer Corporation, First Union Corporation and Lockheed Martin
Corporation, issues that were trading at least 30% below their 52-
week highs. Compaq Computer Corporation, the world's largest
supplier of computing systems, develops and markets hardware,
software and services, including enterprise computing solutions,
fault-tolerant business critical solutions, networking and
communication products, and desktop and portable computers. The
company's shares have been pressured by poor operating results
reflecting a highly competitive personal computer environment,
sluggish revenue from services and high-end servers and a bloated
cost structure. The problems culminated in the removal of the former
chief executive officer (CEO) and chief financial officer and the
resignation of other senior management. A newly installed CEO has
announced a sizable restructuring program entailing headcount
reductions, plant closings and the potential for $2 billion in
annual cost savings. Although Compaq faces formidable challenges, we
believe the shares adequately reflect the adversities. Compaq was
available at a modest one times sales per share, a sharp discount to
comparable companies. We believe the initiatives announced by the
new management eventually will lead to a turnaround in the company's
performance.
First Union Corporation, the nation's sixth-largest bank, has
reported a series of earnings shortfalls related to obstacles in the
integration of several acquisitions and higher-than-expected
spending on new initiatives. We believe these problems are being
resolved and that the company is positioned for renewed earnings
growth. First Union was available at a modest 12.5 times 2000
estimated earnings per share and offered an above-average dividend
yield of 4.2%. Bolstering the case for these shares is insider
buying and a sizable share buyback program.
Lockheed Martin Corporation, the world's largest defense company,
has been plagued by a number of adversities such as satellite launch
failures, cost overruns on key programs and dilution from a recent
acquisition. These problems have caused earnings estimates to be
sharply reduced. We believe the recovery outlook for Lockheed Martin
Corp. in 2000 and beyond is bright. We expect the company to benefit
from a resolution of the problems that had pressured results,
aggressive cost-reduction efforts and expected asset sales.
Additionally, the company is likely to profit from an increase in
the US defense spending budget, the first increase in 13 years.
Lockheed was available at 16.3 times 2000 estimated earnings per
share.
On the sell side, we eliminated Texas Instruments Incorporated and
Aetna Inc. since these shares appeared fairly valued. We sold Great
Lakes Chemical Corporation, WHX Corporation and Occidental Petroleum
Corporation in order to reduce our overweighted positions in the
outperforming basic industry and energy sectors. Following these and
other investment activities, the Fund's top sector representations
included energy (13.6% of net assets), basic industry (12.6%),
technology (11.5%) and banking (8.2%).
Although value equity outperformance relative to growth stalled in
the July quarter, we believe the prospect for value equities remains
favorable. A continuation of current trends--a global economic
rebound, a vibrant US economy and S&P earnings progress - provides a
solid backdrop for value outperformance, in our view. Further
bolstering the case for value equities is the compelling investment
attributes accorded many shares. Fundamental Value Portfolio is
indicative of this opportunity with the Portfolio's price/earnings
multiple 40% below that of the S&P 500 Index and the price/book
ratio at a 65% discount to the market benchmark.
Global Opportunity Portfolio
As of July 31, 1999, the asset allocation for Global Opportunity
Portfolio was: foreign stocks, 41% of net assets; US stocks, 30%;
foreign bonds, 14%; US bonds, 12%; and cash reserves, 3%.
An increasingly cautious near-term outlook led us to reduce our
allocation to US equities from 39% of net assets to 30% during the
three months ended July 31, 1999. This cutback in US common stocks
reflected our belief that a desire to preempt inflationary pressures
in the US economy could lead the Federal Reserve Board to continue
to gradually tighten monetary policy in coming months. In reducing
the US equity weighting, we did not significantly alter the
Portfolio's asset allocation within the sector. The technology group
continued to account for the largest portion of US equity assets.
Other relatively large sector commitments included financials,
consumer staples and health care.
We increased the Portfolio's foreign equity representation slightly
from 40% of net assets to 41% during the July quarter. We maintained
an overweighted commitment in Japanese equities relative to the
benchmark unmanaged Morgan Stanley Capital International Europe,
Australia, Far East Index. Within the sector, we reduced
representation in export-related equities through partial profit-
taking in major commitments, such as Fujitsu Limited, in favor of
increased representation in companies more dependent on the domestic
Japanese economy. New positions with a domestic orientation included
East Japan Railway Company and Mitsukoshi, Ltd. We eliminated the
hedge of Japanese stocks back to the US dollar, given our belief
that potential for a weak yen has been reduced by evidence of a
bottoming in the Japanese economy.
We also expanded our commitment to Asia (excluding Japan) through
positions in Pohang Iron and Steel Company, Ltd., Development Bank
of Singapore Limited and Hutchison Whampoa Limited. We continue to
maintain representation in Latin America through selected Brazilian
commitments. Europe, including the United Kingdom, remains the
largest regional commitment in the portfolio. We have not
significantly changed the allocation within Europe, and have
significant commitments in telecommunications service and equipment,
financials, food and healthcare.
Merrill Lynch Asset Builder Program, Inc., July 31, 1999
During the three months ended July 31, 1999, we increased our
commitment to US bonds from 6% of net assets to 12%. Our cautious
outlook led us to reduce the Portfolio's average duration from 7.0
years to 4.7 years. However, over the longer term, we are optimistic
that US intermediate and longer-term interest rates will decline, as
the tightening in monetary policy now being undertaken is likely to
prevent a resurgence of inflation in the United States. We modestly
reduced our foreign bond representation from 15% of net assets to
14% during the July quarter. We took advantage of appreciation to
liquidate our position in New Zealand bonds. We retain positions in
German and UK bonds, where the risk/reward relationship remains
favorable, in our view.
Growth Opportunity Portfolio
For the quarter ended July 31, 1999, Growth Opportunity Portfolio's
Class A, Class B, Class C and Class D Shares had total returns of--
0.85%, -1.13%, -1.13% and -0.96%, respectively, compared to the--
0.16% total return for the unmanaged Standard & Poor's 500 (S&P 500)
Index. The reasons for the Portfolio's underperformance included the
apparent shift of investors to value investing types of stocks and
the broadening of investor focus from the largest market
capitalization companies to small- and medium-sized capitalization
companies. During the July quarter, companies in the energy, energy
services, aluminum, steel, paper, chemicals, motor vehicles,
construction and agricultural equipment industries had substantial
stock price increases, in both absolute and relative terms. The
Portfolio has relatively insignificant investment weightings in
companies in these industry sectors. The best-performing industry
sectors in the portfolio during the July quarter were
telecommunications (representing 13.6% of net assets at July 31),
specialty retailing (5.2%) and communications equipment (5.1%).
During the July quarter, six of the top ten equity holdings in the
Portfolio had stock price appreciation greater than the total
investment return of the unmanaged S&P 500 Index.
We added five new companies to the Portfolio during the July
quarter. In the communications equipment industry, we added 3Com
Corporation in response to the attractive valuation and the
prospects for an acceleration in the growth of earnings as new
Internet products are released and marketed. We added Copper
Mountain Networks, Inc. to the Portfolio because of the likelihood
of very rapid growth in revenues and earnings of this newer supplier
of Internet telecommunications equipment. In the energy sector, we
added Duke Energy Corporation and Utilicorp United Inc., which are
two of the leading marketers of unregulated wholesale electric power
in the United States. The leading company in this sector is Enron
Corp., which is one of the Portfolio's holdings. We purchased Class
H shares of General Motors as General Motors Hughes develops and
introduces, in a joint venture with America Online, Inc., a new and
enhanced level of television and Internet access services. We
believed this was a good investment because of the potential for
rapid growth in the satellite communications subscriber base from
over seven million households to a much larger customer base.
We eliminated one holding from the Portfolio during the July
quarter. For valuation reasons, we sold our position in Ameritech
Corporation.
Quality Bond Portfolio
Our investment strategy for the Quality Bond Portfolio can best be
characterized as cautiously optimistic. From a duration perspective,
we have maintained a slightly lower (0.05 year--0.15 year) profile
than the benchmark Merrill Lynch Corporate Master Index, considering
the bias toward higher interest rates. Given the negative prevailing
investor psychology, we raised our expectations relative to the
trading band for the 30-year bond to 5.75%--6.25%. If the yield of
the bond reached the high end of our range, we expected to go
slightly long relative to the Index since we were not looking for
interest rates to trend higher over the long term. In essence, we
believed that the foundation for a slowdown in the economy had
already been laid given the higher prevailing interest rates and the
impact exacted by recent stock market activity on the relationship
of wealth to spending.
Consistent with recent strategy, we continued to seek higher coupon
issues with an attractive spread to US Treasury bonds given our
outlook for the near-term direction of interest rates. We also
remained committed to bigger, more liquid issues. Our Treasury
holdings have been kept to an absolute minimum as we have focused on
the need to build current income, although recent strategy
incorporated a shift toward Treasury issues given our expectations
for corporate spreads to widen during the third quarter.
Furthermore, productivity and the correlation to corporate
profitability, as well as a sharp drop-off in new issuance, should
be sufficient enough to initiate a trend toward tighter yield
spreads as we enter the final quarter of 1999. Corporate issuance
remained very active, with investor demand fairly enthusiastic. In
fact, the majority of the new transactions prior to mid-July had
been significantly oversubscribed and well bid.
With respect to security-specific issues, we began to add to several
sectors including paper and pulp producers and forest product
companies. We also added to our positions in defense-related
companies as well as apparel manufacturers. These sectors
experienced improved economics yet still retained very attractive
yield advantages relative to Treasury securities. During the later
part of the period, we slightly reduced the Portfolio's position in
real estate investment trusts given the strong performance this
group experienced during early 1999. However, we still have an
overweighted position relative to the Index since we believe this
sector will continue to perform well, although we expect to bring
this position closer to a neutral posture as spreads compress. We
also overweighted the information and technology group given the
strong economic fundamentals characterizing that industry.
Currently, we have a 10% overweighted position in corporate bonds
rated BBB, a situation we expect to maintain considering the
attractive spread relationship and the favorable relative value
attributes of that group.
US Government Securities
Portfolio
During the July quarter, US interest rates rose across the board.
Federal Reserve Board Chairman Alan Greenspan elected to tighten
monetary policy and raise the Federal Funds rate 25 basis points.
Because of a continued strong economy and increased fears of
inflation, the financial markets were quick to price in an
additional 25 basis point increase, which occurred at August month-
end. In addition, the two-year, five-year and ten-year Treasury note
yields all rose in excess of 55 basis points during the July
quarter. Additionally, the 30-year bond yield rose 44 basis points.
These rate increases resulted in negative price returns for most
fixed-income investments.
Mortgage-backed securities (MBS) typically outperform their Treasury
benchmarks in a rising interest rate environment and have done so on
a year-to-date basis. However, because interest rates and volatility
have risen so dramatically, MBS have underperformed their Treasury
benchmarks for the July quarter. As interest rates rise, and
refinancing opportunities diminish, prepayments dramatically slow
and cause the average life of MBS to extend. Just as the fear of
much lower interest rates causes prepayment risk in MBS, much higher
interest rates create extension risk in MBS. Just as increased cash
flows were not favorable in a falling interest rate environment,
decreased cash flows are unfavorable in a rising interest rate
environment. To illustrate the effect rising interest rates had on
MBS, the unmanaged Salomon Mortgage Index started the July quarter
with a 3.07 year duration and ended the period at 4.37 years.
We have made several trades in the Portfolio to seek to reduce
extension risk. These trades included moving up in coupon, raising
the cash allocation and selling longer-term MBS in favor of short-
term Treasury notes. The Portfolio ended the period with 7% of net
assets in cash, 12% in US Treasury notes and 10% in a Federal
National Mortgage Association multi-family pool, which have no
extension risk. Additionally, the Portfolio has a 25% 15-year MBS
allocation whose shorter average life is likely to be beneficial
should long-term interest rates continue to rise. At July 31, 1999,
our position in 30-year MBS stood at 46% of net assets.
Merrill Lynch Asset Builder Program, Inc., July 31, 1999
With the Federal Funds rate at 5.00% and the yield on the two-year
Treasury bond ending the quarter at 5.60%, the financial markets
were strongly anticipating at least a 25 basis point increase to the
Federal Funds rate (which occurred in August). Going forward, we
expect the Federal Reserve Board to continue to closely monitor
economic data as it is released. As interest rates stabilize and
volatility subsides, we believe MBS will once again outperform their
Treasury counterparts, and yield spreads will tighten, making MBS a
very attractive fixed-income investment.
In Conclusion
We thank you for your investment in Merrill Lynch Asset Builder
Program, Inc., and we look forward to reviewing our outlook and
strategy with you again in our upcoming quarterly report to
shareholders.
Sincerely,
(Terry K. Glenn)
Terry K. Glenn
President
(Geraldine Gunn Hertig)
Geraldine Gunn Hertig
Senior Vice President and
Portfolio Manager
Fundamental Value Portfolio
(Thomas R. Robinson)
Thomas R. Robinson
Senior Vice President and
Portfolio Manager
Global Opportunity Portfolio
(Lawrence R. Fuller)
Lawrence R. Fuller
Senior Vice President and
Portfolio Manager
Growth Opportunity Portfolio
(Christopher G. Ayoub)
Christopher G. Ayoub
Senior Vice President and
Portfolio Manager
Quality Bond Portfolio
(Gregory Mark Maunz)
Gregory Mark Maunz
Senior Vice President and
Portfolio Manager
US Government Securities Portfolio
September 13, 1999
Merrill Lynch Asset Builder Program, Inc., July 31, 1999
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., July 31, 1999
PERFORMANCE DATA (continued)
Fundamental
Value Portfolio
Average Annual
Total Returns
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 6/30/99 +11.00% + 5.17%
Inception (2/01/95) to 6/30/99 +18.62 +17.18
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 6/30/99 + 9.72% + 5.72%
Inception (2/01/95) to 6/30/99 +17.34 +17.34
[FN]
*Maximum contingent deferred sales charge is 4% and is reduced to 0%
after 4 years.
**Assuming payment of applicable contingent deferred sales charge.
% Return % Return
Without CDSC With CDSC**
Class C Shares*
Year Ended 6/30/99 + 9.72% + 8.72%
Inception (2/01/95) to 6/30/99 +17.33 +17.33
[FN]
*Maximum contingent deferred sales charge is 1% and is reduced to 0%
after 1 year.
**Assuming payment of applicable contingent deferred sales charge.
% Return Without % Return With
Sales Charge Sales Charge**
Class D Shares*
Year Ended 6/30/99 +10.70% + 4.88%
Inception (2/01/95) to 6/30/99 +18.34 +16.90
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
Global
Opportunity
Portfolio
Average Annual
Total Returns
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 6/30/99 +2.56% -2.82%
Inception (2/01/95) to 6/30/99 +9.67 +8.34
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 6/30/99 +1.45% -2.55%
Inception (2/01/95) to 6/30/99 +8.49 +8.49
[FN]
*Maximum contingent deferred sales charge is 4% and is reduced to 0%
after 4 years.
**Assuming payment of applicable contingent deferred sales charge.
% Return % Return
Without CDSC With CDSC**
Class C Shares*
Year Ended 6/30/99 +1.46% +0.46%
Inception (2/01/95) to 6/30/99 +8.45 +8.45
[FN]
*Maximum contingent deferred sales charge is 1% and is reduced to 0%
after 1 year.
**Assuming payment of applicable contingent deferred sales charge.
% Return Without % Return With
Sales Charge Sales Charge**
Class D Shares*
Year Ended 6/30/99 +2.39% -2.99%
Inception (2/01/95) to 6/30/99 +9.43 +8.10
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
Growth
Opportunity
Portfolio
Average Annual
Total Returns
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 6/30/99 +24.13% +17.61%
Inception (2/02/96) to 6/30/99 +25.50 +23.53
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 6/30/99 +22.70% +18.70%
Inception (2/02/96) to 6/30/99 +24.16 +23.99
[FN]
*Maximum contingent deferred sales charge is 4% and is reduced to 0%
after 4 years.
**Assuming payment of applicable contingent deferred sales charge.
% Return % Return
Without CDSC With CDSC**
Class C Shares*
Year Ended 6/30/99 +22.69% +21.69%
Inception (2/02/96) to 6/30/99 +24.12 +24.12
[FN]
*Maximum contingent deferred sales charge is 1% and is reduced to 0%
after 1 year.
**Assuming payment of applicable contingent deferred sales charge.
% Return Without % Return With
Sales Charge Sales Charge**
Class D Shares*
Year Ended 6/30/99 +23.79% +17.29%
Inception (2/02/96) to 6/30/99 +25.26 +23.29
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
Quality Bond
Portfolio
Average Annual
Total Returns
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 6/30/99 +2.11% -1.98%
Inception (2/01/95) to 6/30/99 +6.17 +5.19
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 6/30/99 +1.45 -2.34
Inception (2/01/95) to 6/30/99 +5.30 +5.30
[FN]
*Maximum contingent deferred sales charge is 4% and is reduced to 0%
after 4 years.
**Assuming payment of applicable contingent deferred sales charge.
% Return % Return
Without CDSC With CDSC**
Class C Shares*
Year Ended 6/30/99 +1.40% +0.45%
Inception (2/01/95) to 6/30/99 +5.23 +5.23
[FN]
*Maximum contingent deferred sales charge is 1% and is reduced to 0%
after 1 year.
**Assuming payment of applicable contingent deferred sales charge.
% Return Without % Return With
Sales Charge Sales Charge**
Class D Shares*
Year Ended 6/30/99 +1.95% -2.12%
Inception (2/01/95) to 6/30/99 +5.91 +4.93
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
US Government
Securities
Portfolio
Average Annual
Total Returns
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 6/30/99 +4.70% +0.52%
Inception (2/01/95) to 6/30/99 +8.55 +7.55
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 6/30/99 +3.93% +0.05%
Inception (2/01/95) to 6/30/99 +7.69 +7.69
[FN]
*Maximum contingent deferred sales charge is 4% and is reduced to 0%
after 4 years.
**Assuming payment of applicable contingent deferred sales charge.
% Return % Return
Without CDSC With CDSC**
Class C Shares*
Year Ended 6/30/99 +3.87% +2.90%
Inception (2/01/95) to 6/30/99 +7.63 +7.63
[FN]
*Maximum contingent deferred sales charge is 1% and is reduced to 0%
after 1 year.
**Assuming payment of applicable contingent deferred sales charge.
% Return Without % Return With
Sales Charge Sales Charge**
Class D Shares*
Year Ended 6/30/99 +4.55% +0.37%
Inception (2/01/95) to 6/30/99 +8.30 +7.30
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
Merrill Lynch Asset Builder Program, Inc., July 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 7/31/99
<S> <C> <C> <C> <C>
Fundamental Value Portfolio Class A Shares +14.32% +0.64% +107.92% --
Fundamental Value Portfolio Class B Shares +13.07 +0.39 + 98.12 --
Fundamental Value Portfolio Class C Shares +13.07 +0.39 + 98.05 --
Fundamental Value Portfolio Class D Shares +14.04 +0.58 +105.74 --
Global Opportunity Portfolio Class A Shares + 4.32 +1.59 + 51.41 --
Global Opportunity Portfolio Class B Shares + 3.14 +1.30 + 44.17 --
Global Opportunity Portfolio Class C Shares + 3.06 +1.30 + 43.93 --
Global Opportunity Portfolio Class D Shares + 4.00 +1.51 + 49.83 --
Growth Opportunity Portfolio Class A Shares +19.88 -0.85 +108.84 --
Growth Opportunity Portfolio Class B Shares +18.54 -1.13 +101.21 --
Growth Opportunity Portfolio Class C Shares +18.52 -1.13 +100.93 --
Growth Opportunity Portfolio Class D Shares +19.56 -0.96 +107.32 --
Quality Bond Portfolio Class A Shares + 1.58 -2.43 + 29.51 6.94%
Quality Bond Portfolio Class B Shares + 0.92 -2.71 + 24.84 6.46
Quality Bond Portfolio Class C Shares + 0.87 -2.72 + 24.47 6.41
Quality Bond Portfolio Class D Shares + 1.43 -2.59 + 28.07 6.69
US Government Securities Portfolio Class A Shares + 3.78 -1.56 + 42.94 6.14
US Government Securities Portfolio Class B Shares + 3.02 -1.65 + 37.92 5.63
US Government Securities Portfolio Class C Shares + 2.96 -1.67 + 37.55 5.58
US Government Securities Portfolio Class D Shares + 3.53 -1.53 + 41.42 5.89
<FN>
*Investment results shown do not reflect sales charges; results
shown would be lower if a sales charge was included. Total
investment returns are based on changes in net asset values for the
periods shown, and assume reinvestment of all dividends and capital
gains distributions at net asset value on the ex-dividend or payable
date. The Program's since inception dates are from 2/01/95 for
Fundamental Value Portfolio, Global Opportunity Portfolio, Quality
Bond Portfolio & US Government Securities Portfolio and from 2/02/96
for Growth Opportunity Portfolio.
</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 $ 1,147,500 1.1%
Total Investments in the Middle East 1,136,092 1,147,500 1.1
NORTH
AMERICA
United Aerospace & Defense 40,000 The Boeing Company 1,345,983 1,815,000 1.7
States 45,000 Lockheed Martin Corporation 1,623,950 1,566,563 1.4
------------ ------------ ------
2,969,933 3,381,563 3.1
Automotive 20,000 Dana Corporation 821,070 835,000 0.8
60,000 Delphi Automotive Systems Corporation 1,036,562 1,080,000 1.0
20,000 Ford Motor Company 429,535 972,500 0.9
18,000 General Motors Corporation 807,645 1,096,875 1.0
------------ ------------ ------
3,094,812 3,984,375 3.7
Banking & Financial 26,000 Associates First Capital
Corporation (Class A) 751,607 996,125 0.9
40,000 Citigroup Inc. 1,473,267 1,782,500 1.6
35,000 First Union Corporation 1,591,790 1,610,000 1.5
105,000 Hibernia Corporation (Class A) 1,309,566 1,496,250 1.3
44,000 National City Corporation 1,521,910 1,309,000 1.2
50,000 Wells Fargo Company 1,274,628 1,950,000 1.8
------------ ------------ ------
7,922,768 9,143,875 8.3
Beverage & 30,000 The Seagram Company Ltd. 1,068,434 1,539,375 1.4
Entertainment
Capital Equipment 20,000 Eaton Corporation 1,422,412 1,978,750 1.8
Chemicals 30,000 E.I. du Pont de Nemours and Company 1,704,050 2,161,875 1.9
40,000 Hercules Incorporated 1,235,382 1,395,000 1.3
------------ ------------ ------
2,939,432 3,556,875 3.2
Computer Equipment 70,000 Compaq Computer Corporation 1,710,780 1,680,000 1.5
25,000 Hewlett-Packard Company 1,326,500 2,617,187 2.4
------------ ------------ ------
3,037,280 4,297,187 3.9
Computer Software 55,000 ++Novell, Inc. 418,750 1,412,813 1.3
Cosmetics & 45,000 Kimberly-Clark Corporation 2,133,972 2,745,000 2.5
Toiletries
Electric Utilities 70,000 Cinergy Corp. 2,305,917 2,095,625 1.9
Electronic 45,000 Thomas & Betts Corporation 1,856,316 2,036,250 1.8
Components
Fertilizer 65,000 IMC Global Inc. 1,928,484 1,186,250 1.1
Foods 35,000 General Mills, Inc. 2,365,671 2,898,437 2.6
</TABLE>
Merrill Lynch Asset Builder Program, Inc., July 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 Health Care 56,000 Columbia/HCA Healthcare Corporation $ 1,587,396 $ 1,246,000 1.1%
States Services
(concluded)
Information 8,000 Honeywell Inc. 658,980 958,500 0.9
Processing 26,000 International Business Machines
Corporation 888,582 3,267,875 2.9
------------ ------------ ------
1,547,562 4,226,375 3.8
Insurance 60,000 The Allstate Corporation 2,509,537 2,130,000 1.9
40,000 The Chubb Corporation 2,494,249 2,392,500 2.2
40,000 PartnerRe Ltd. 1,759,419 1,520,000 1.4
------------ ------------ ------
6,763,205 6,042,500 5.5
Machinery 30,000 Deere & Company 929,241 1,147,500 1.0
30,000 ITT Industries, Inc. 716,232 1,121,250 1.0
20,000 ++SPX Corporation 1,175,162 1,700,000 1.6
------------ ------------ ------
2,820,635 3,968,750 3.6
Metals--Non-Ferrous 45,000 ASARCO Incorporated 1,240,590 798,750 0.7
Natural Gas 24,000 Enron Corp. 936,185 2,044,500 1.8
55,000 Sonat Inc. 2,188,180 1,935,313 1.8
------------ ------------ ------
3,124,365 3,979,813 3.6
Oil--Domestic 20,000 Atlantic Richfield Company (ARCO) 1,362,162 1,801,250 1.6
40,000 Sunoco, Inc. 1,256,544 1,220,000 1.1
------------ ------------ ------
2,618,706 3,021,250 2.7
Oil--International 25,000 Exxon Corporation 1,524,560 1,984,375 1.8
Oil Services 30,000 Diamond Offshore Drilling, Inc. 1,407,557 960,000 0.9
30,000 Halliburton Company 927,909 1,383,750 1.2
------------ ------------ ------
2,335,466 2,343,750 2.1
Packaging 50,000 Crown Cork & Seal Company, Inc. 2,106,275 1,465,625 1.3
Paper & Forest 20,000 International Paper Company 805,487 1,022,500 0.9
Products 70,000 Louisiana-Pacific Corporation 1,551,112 1,535,625 1.4
------------ ------------ ------
2,356,599 2,558,125 2.3
Photography 22,000 Eastman Kodak Company 1,556,016 1,520,750 1.4
Railroads 55,000 Union Pacific Corporation 2,978,576 2,987,188 2.7
Retail 15,000 Dillard's, Inc. (Class A) 368,400 462,187 0.4
65,000 ++Kmart Corporation 750,038 942,500 0.8
35,000 Sears, Roebuck & Co. 1,560,565 1,417,500 1.3
45,000 ++Toys 'R' Us, Inc. 1,178,997 731,250 0.7
40,500 ++Venator Group, Inc. 570,707 425,250 0.4
------------ ------------ ------
4,428,707 3,978,687 3.6
Steel 40,000 USX-U.S. Steel Group 1,147,077 1,037,500 0.9
Telecommunications 50,000 ++3Com Corporation 1,264,976 1,206,250 1.1
37,500 AT&T Corp. 885,187 1,947,656 1.8
15,000 Bell Atlantic Corporation 686,660 956,250 0.9
25,000 GTE Corporation 1,113,376 1,842,187 1.7
20,000 Motorola, Inc. 1,053,130 1,825,000 1.6
------------ ------------ ------
5,003,329 7,777,343 7.1
Tobacco 40,000 Philip Morris Companies Inc. 1,579,770 1,490,000 1.3
Total Investments in North America 78,183,015 90,683,156 82.1
WESTERN
EUROPE
Netherlands Oil--International 40,000 Royal Dutch Petroleum Company (NY
Registered Shares) 2,093,069 2,440,000 2.2
Total Investments in the Netherlands 2,093,069 2,440,000 2.2
United Petroleum 12,202 ++BP Amoco PLC (ADR)* 941,412 1,413,907 1.3
Kingdom
Total Investments in the United
Kingdom 941,412 1,413,907 1.3
Total Investments in Western Europe 3,034,481 3,853,907 3.5
SHORT-TERM Face
SECURITIES Amount Issue
Commercial US$ 4,422,000 General Electric Capital Corp.,
Paper** 5.13% due 8/02/1999 4,420,740 4,420,740 4.0
US Government 6,000,000 Federal Home Loan Mortgage Corporation
Agency Participation Certificates, 4.96%
Obligations** due 8/03/1999 5,997,520 5,997,520 5.4
5,000,000 Federal National Mortgage Association,
4.98% due 9/08/1999 4,973,025 4,973,025 4.5
Total Investments in Short-Term
Securities 15,391,285 15,391,285 13.9
Total Investments $ 97,744,873 111,075,848 100.6
============
Liabilities in Excess of Other Assets (611,990) (0.6)
------------ ------
Net Assets $110,463,858 100.0%
============ ======
<FN>
*American Depositary Receipts (ADR).
**Commercial Paper and certain US Government Agency Obligations are
traded on a discount basis; the interest rates shown reflect the
discount rates paid at the time of purchase by the Portfolio.
++Non-income producing security.
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Asset Builder Program, Inc., July 31, 1999
<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> <S> <C> <S> <C> <C> <C>
Germany E 1,800,000 BundesObligation, 4.75% due
11/20/2001 $ 2,183,617 $ 1,973,104 3.3%
Bundesrepublik Deutschland:
2,700,000 4.75% due 7/04/2008 3,219,869 2,880,609 4.7
1,060,000 4.75% due 7/04/2028 1,250,708 995,670 1.6
------------ ------------ ------
6,654,194 5,849,383 9.6
United Pound 1,424,000 United Kingdom Treasury Gilt, 7.25%
Kingdom Sterling due 12/07/2007 2,706,702 2,552,115 4.2
Total Investments in Foreign
Government Obligations 9,360,896 8,401,498 13.8
US Government & Agency Obligations
United States Federal National Mortgage Association:
US$ 840,000 5.125% due 2/13/2004 823,931 797,866 1.3
1,000,000 5.75% due 2/15/2008 996,094 939,530 1.6
625,000 6.375% due 6/15/2009 624,024 609,569 1.0
US Treasury Notes & Bonds:
3,100,000 5.75% due 6/30/2001 3,118,374 3,104,845 5.1
650,000 4.25% due 11/15/2003 615,418 610,695 1.0
900,000 6.625% due 2/15/2027 1,019,214 938,394 1.5
Total Investments in US Government
& Agency Obligations 7,197,055 7,000,899 11.5
Total Investments in Foreign &
US Government & Agency Obligations 16,557,951 15,402,397 25.3
Shares
Industries Held US Stocks
United Aerospace & Defense 2,725 United Technologies Corporation 100,027 181,723 0.3
States
Application 2,500 ++Siebel Systems, Inc. 92,305 147,344 0.2
Development
Software
Automobiles 6,940 Delphi Automotive Systems Corporation 119,510 124,920 0.2
Banking 3,357 Bank of America Corporation 200,716 222,821 0.4
7,830 The Bank of New York Company, Inc. 181,819 289,221 0.5
600 The Chase Manhattan Corporation 50,079 46,125 0.1
11,510 Mellon Bank Corporation 366,558 388,462 0.6
------------ ------------ ------
799,172 946,629 1.6
Beverages 8,640 PepsiCo, Inc. 303,316 338,040 0.6
Broadcasting/Cable 11,130 ++AT&T Corp.--Liberty Media
Group (Class A) 170,253 411,810 0.7
Building Products 3,770 ++American Tower Corporation (Class A) 94,250 87,417 0.1
Capital Equipment 880 Eaton Corporation 59,284 87,065 0.1
1,600 Hewlett-Packard Company 114,566 167,500 0.3
------------ ------------ ------
173,850 254,565 0.4
Chemicals 2,220 E.I. du Pont de Nemours and Company 140,862 159,979 0.2
2,500 Rohm and Haas Company 92,251 106,562 0.2
------------ ------------ ------
233,113 266,541 0.4
Communications 5,520 ++MCI WorldCom Inc. 211,462 455,400 0.7
Equipment
Computer Products 8,910 ++Cisco Systems, Inc. 221,463 553,534 0.9
Computer Services 1,500 ++America Online, Inc. 131,808 142,687 0.2
Computer Software 12,000 ++Microsoft Corporation 952,459 1,029,000 1.7
2,430 ++Transaction Systems Architects,
Inc. (Class A) 95,386 74,267 0.1
------------ ------------ ------
1,047,845 1,103,267 1.8
Computers 2,300 Compaq Computer Corporation 56,893 55,200 0.1
3,580 ++Dell Computer Corporation 115,663 146,332 0.2
3,160 ++EMC Corporation 114,183 191,377 0.3
3,700 International Business Machines
Corporation 216,617 465,044 0.8
780 ++Sun Microsystems, Inc. 47,780 52,894 0.1
------------ ------------ ------
551,136 910,847 1.5
Conglomerates 8,250 The Dial Corporation 179,228 255,234 0.4
Consumer--Electronics 6,460 Tandy Corporation 146,629 331,479 0.5
Electrical Equipment 4,310 General Electric Company 406,587 469,790 0.8
2,120 W. W. Grainger, Inc. 117,435 100,170 0.1
------------ ------------ ------
524,022 569,960 0.9
Entertainment 5,730 ++Premier Parks Inc. 114,098 221,679 0.4
Finance 1,580 The Goldman Sachs Group, Inc. 83,740 101,614 0.2
4,590 ++TD Waterhouse Group, Inc. 110,160 79,751 0.1
------------ ------------ ------
193,900 181,365 0.3
Financial Services 7,620 Associates First Capital Corporation
(Class A) 286,419 291,941 0.5
3,600 Citigroup Inc. 168,301 160,425 0.2
5,600 GreenPoint Financial Corp. 202,496 181,300 0.3
2,800 Wells Fargo Company 109,004 109,200 0.2
------------ ------------ ------
766,220 742,866 1.2
Financial Services-- 5,850 Household International, Inc. 254,916 251,184 0.4
Consumer
Foods 7,960 ++Keebler Foods Company 220,363 232,830 0.4
Hardware Products 1,880 The Black & Decker Corporation 103,308 108,570 0.2
Household Products 4,180 Colgate-Palmolive Company 192,949 206,387 0.3
Information Processing 3,650 ++Unisys Corporation 120,689 148,966 0.2
870 Xerox Corporation 48,711 42,413 0.1
------------ ------------ ------
169,400 191,379 0.3
Instruments 2,100 Millipore Corporation 43,388 85,575 0.1
Insurance 1,150 American International Group, Inc. 135,661 133,544 0.2
1,490 ++Clear Channel Communications, Inc. 105,239 103,648 0.2
1,440 The Equitable Companies Incorporated 73,419 92,520 0.1
------------ ------------ ------
314,319 329,712 0.5
</TABLE>
Merrill Lynch Asset Builder Program, Inc., July 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 Laser Systems & 2,600 ++JDS Uniphase Corporation $ 131,391 $ 234,975 0.4%
States Components
(concluded)
Machinery & Equipment 962 Caterpillar Inc. 53,385 56,397 0.1
Manufacturing 4,300 Tyco International Ltd. 235,797 420,056 0.8
Medical Technology 5,200 Johnson & Johnson 426,568 479,050 0.8
Metals 3,139 Alcoa Inc. 117,530 187,948 0.3
Natural Gas 5,350 Enron Corp. 253,149 455,753 0.7
Oil--Integrated 2,700 Mobil Corporation 215,404 276,075 0.5
Oil Services 3,300 Schlumberger Limited 207,737 199,856 0.3
Paper & Forest 2,264 International Paper Company 110,128 115,747 0.2
Products
Petroleum 7,040 Unocal Corporation 255,533 279,400 0.5
Pharmaceutical-- 6,250 American Home Products Corporation 369,345 318,750 0.5
Diversified 7,590 Bristol-Myers Squibb Company 375,447 504,735 0.9
------------ ------------ ------
744,792 823,485 1.4
Pharmaceutical-- 1,660 Pharmacia & Upjohn, Inc. 104,913 89,329 0.1
Prescription
Pharmaceuticals 3,850 Cardinal Health, Inc. 260,924 262,762 0.4
1,400 Merck & Co., Inc. 98,084 94,762 0.2
8,640 Pfizer Inc. 377,880 293,220 0.5
------------ ------------ ------
736,888 650,744 1.1
Radio and Television 7,112 ++AMFM Inc. 258,434 373,380 0.6
Restaurants 5,600 McDonald's Corporation 241,936 233,450 0.4
Retail 1,050 ++Best Buy Co., Inc. 49,382 78,356 0.1
3,500 Dayton Hudson Corporation 245,351 226,406 0.4
2,000 ++Federated Department Stores, Inc. 109,745 102,625 0.1
5,260 ++Safeway Inc. 188,417 283,382 0.5
6,920 Wal-Mart Stores, Inc. 162,336 292,370 0.5
------------ ------------ ------
755,231 983,139 1.6
Retail--Specialty 3,900 Lowe's Companies, Inc. 139,010 205,725 0.3
Semiconductors 790 ++Applied Materials, Inc. 50,553 56,781 0.1
5,390 Intel Corporation 327,900 371,910 0.6
4,320 Motorola, Inc. 265,733 394,200 0.7
------------ ------------ ------
644,186 822,891 1.4
Services 4,890 ++Quintiles Transnational Corp. 227,783 185,820 0.3
Telecommunications 7,605 AT&T Corp. 182,582 394,985 0.7
5,070 GTE Corporation 263,649 373,596 0.6
2,960 Lucent Technologies Inc. 161,586 192,585 0.3
------------ ------------ ------
607,817 961,166 1.6
Tobacco 2,840 Philip Morris Companies Inc. 129,413 105,790 0.2
Utilities-- 4,090 Ameritech Corporation 204,351 299,592 0.5
Communication
Total Investments in US Stocks 14,273,626 18,072,712 29.6
Foreign Stocks
Australia Broadcasting/Cable 3,400 The News Corporation Limited
(Convertible Preferred) (ADR)* 114,108 107,525 0.2
Diversified 22,300 Broken Hill Proprietary Company
Limited 245,477 246,635 0.4
Total Stocks in Australia 359,585 354,160 0.6
Austria Paper Products 3,400 Mayr-Melnhof Karton AG 169,017 159,877 0.3
Total Stocks in Austria 169,017 159,877 0.3
Brazil Forest Products 7,800 Aracruz Celulose SA (ADR)* 109,419 148,200 0.3
Metals & Mining 7,200 Companhia Vale do Rio Doce 'A'
(Preferred) 102,963 142,710 0.2
Telecommunications 6,000 Embratel Participacoes SA (ADR)* 99,204 64,875 0.1
1,320 Telecomunicacoes Brasileiras
SA-Telebras (Preferred Block) (ADR)* 104,059 100,815 0.2
------------ ------------ ------
203,263 165,690 0.3
Total Stocks in Brazil 415,645 456,600 0.8
Canada Communications 1,800 Nortel Networks Corporation 98,208 159,525 0.3
Equipment
Computer Services 6,400 ++ATI Technologies Inc. 100,250 88,759 0.1
Paper Products 17,400 Domtar, Inc. 140,534 178,084 0.3
Telecommunications 9,400 Teleglobe Inc. 260,770 207,387 0.3
Total Stocks in Canada 599,762 633,755 1.0
Denmark Services 800 ++ISS International Service
System A/S 'B' 52,616 44,709 0.1
Total Stocks in Denmark 52,616 44,709 0.1
Finland Communications 2,950 Nokia Oyj 160,304 255,772 0.4
Equipment
Holding Company 11,200 Amer Group Ltd. 206,426 185,821 0.3
Insurance 5,700 Sampo Insurance Company Ltd. 'A' 263,633 165,650 0.3
Paper & Forest Products 7,700 UPM-Kymmene Oyj 185,449 259,626 0.4
Real Estate 21,710 Sponda Oyj 156,186 104,573 0.2
Total Stocks in Finland 971,998 971,442 1.6
France Banking 502 Societe Generale 'A' 93,179 94,357 0.2
Electronics 5,300 Thomson CSF 197,662 175,583 0.3
Foods 811 Danone 214,836 205,912 0.3
Information 515 Cap Gemini SA 83,786 87,650 0.2
Processing
Insurance 2,800 Axa 340,222 328,185 0.5
4,900 Scor 193,779 241,006 0.4
------------ ------------ ------
534,001 569,191 0.9
</TABLE>
Merrill Lynch Asset Builder Program, Inc., July 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>
France Merchandising 1,212 Carrefour SA $ 152,958 $ 166,706 0.3%
(concluded)
Metals 5,500 Pechiney SA 'A' 255,952 259,920 0.4
Oil & Related 1,815 Elf Aquitaine SA 227,442 310,844 0.5
1,000 Total Fina SA 'B' 131,466 127,378 0.2
------------ ------------ ------
358,908 438,222 0.7
Semiconductor 5,100 STMicroelectronics NV (NY Registered
Capital Shares) 182,723 359,550 0.6
Equipment
Telecommunications 3,600 France Telecom SA 279,612 259,337 0.4
Utilities--Water 3,795 Vivendi 261,173 298,366 0.5
Total Stocks in France 2,614,790 2,914,794 4.8
Germany Automobiles 3,950 DaimlerChrysler AG 359,011 300,616 0.5
Chemicals 1,300 BASF AG 58,335 58,861 0.1
4,000 Henkel KGaA (Preferred) 275,763 280,445 0.4
------------ ------------ ------
334,098 339,306 0.5
Diversified 3,145 RWE AG 169,576 133,310 0.2
Electronics 2,000 Siemens AG 138,334 165,484 0.3
Machinery & 1,800 Mannesmann AG 270,689 273,787 0.5
Equipment
Multi-Industry 2,768 Veba AG 170,677 170,069 0.3
Total Stocks in Germany 1,442,385 1,382,572 2.3
Hong Kong Multi-Industry 7,000 Hutchison Whampoa Limited 64,640 66,513 0.1
Total Stocks in Hong Kong 64,640 66,513 0.1
Ireland Banking 28,200 Bank of Ireland 298,205 265,630 0.4
Total Stocks in Ireland 298,205 265,630 0.4
Italy Publishing 18,000 Mondadori (Arnoldo) Editore SpA 107,168 311,936 0.5
Total Stocks in Italy 107,168 311,936 0.5
Japan Appliances 2,900 Sony Corporation (ADR)* 241,318 363,044 0.6
Automobiles 6,000 Honda Motor Co., Ltd. 235,090 259,937 0.4
8,000 Toyota Motor Corporation 218,679 281,729 0.5
------------ ------------ ------
453,769 541,666 0.9
Banking & 15,000 The Bank of Tokyo-Mitsubishi, Ltd. 191,862 228,818 0.4
Financial 25,000 The Sanwa Bank, Ltd. 254,140 273,710 0.4
------------ ------------ ------
446,002 502,528 0.8
Banking-- 19,000 The Sumitomo Bank, Ltd. 242,696 256,712 0.4
International
Chemicals 4,000 Shin-Etsu Chemical Co., Ltd. 141,713 145,049 0.2
Computer Products 2,000 TDK Corporation 155,137 200,139 0.3
Computers 17,000 NEC Corporation 165,328 266,736 0.4
Consumer--Electronics 2,000 Rohm Company Ltd. 134,774 374,303 0.6
Cosmetics & Toiletries 12,000 Kao Corporation 244,754 333,682 0.5
Distribution 1,000 Softbank Corporation 153,311 270,223 0.4
Diversified 10,000 Olympus Optical Co., Ltd. 112,425 152,109 0.3
Electronics 13,000 Fujitsu Limited 194,977 389,819 0.6
400 Keyence Corporation 51,480 77,755 0.1
12,000 Matsushita Electric Industrial
Company, Ltd. 208,379 285,042 0.5
30,000 Toshiba Corporation 199,568 240,586 0.4
------------ ------------ ------
654,404 993,202 1.6
Finance 2,000 Orix Corporation 143,258 206,067 0.3
Glass 72,000 Nippon Sheet Glass Company, Ltd. 225,142 252,301 0.4
Insurance 18,000 The Tokio Marine & Fire Insurance
Co. Ltd. 207,737 208,525 0.4
Machine Tools & 9,000 Minebea Company Ltd. 92,972 109,048 0.2
Machinery
Merchandising 13,000 Marui Co., Ltd. 231,712 200,349 0.3
Pharmaceuticals 5,000 Takeda Chemical Industries 180,706 271,095 0.5
Retail Stores 11,000 The Daimaru, Inc. 50,752 52,737 0.1
3,000 Ito-Yokado Co., Ltd. 162,191 203,975 0.4
16,000 ++Mitsukoshi, Ltd. 69,629 79,637 0.1
------------ ------------ ------
282,572 336,349 0.6
Steel 59,000 Nippon Steel Corporation 145,600 150,689 0.3
Telecommunications 20 ++NTT Mobile Communications Network, Inc. 0 308,577 0.5
19 Nippon Telegraph & Telephone
Corporation (NTT) 163,069 241,806 0.4
------------ ------------ ------
163,069 550,383 0.9
Tires & Rubber 8,000 Bridgestone Corp. 195,799 246,165 0.4
Transport Services 44 East Japan Railway Company 246,970 277,301 0.5
Total Stocks in Japan 5,261,168 7,207,665 11.8
Netherlands Banking 7,300 ABN AMRO Holding NV 159,770 164,092 0.3
Broadcast & 6,400 Wolters Kluwer NV 'A' 244,567 233,604 0.4
Publishing
Chemicals 1,300 Akzo Nobel NV 59,423 55,591 0.1
Computer Software 4,500 ++Baan Company, NV 70,698 60,210 0.1
Electronic Components 1,200 ++ASM Lithography Holding NV 48,220 72,124 0.1
Foods 4,700 CSM NV 246,856 245,004 0.4
3,932 Koninklijke Ahold NV 152,555 137,219 0.2
------------ ------------ ------
399,411 382,223 0.6
Multi-Industry 2,589 Unilever NV 'A' 211,099 183,458 0.3
Total Stocks in the Netherlands 1,193,188 1,151,302 1.9
Norway Computer Software 17,500 Merkantildata ASA 149,925 166,527 0.3
Transport Services 7,200 Bergesen d.y. ASA 'B' 103,689 99,531 0.1
Total Stocks in Norway 253,614 266,058 0.4
</TABLE>
Merrill Lynch Asset Builder Program, Inc., July 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>
Singapore Banking & 6,000 Development Bank of Singapore
Financial Limited 'Foreign' $ 62,068 $ 78,075 0.1%
Electronics 3,200 ++Flextronics International Ltd. 109,819 143,600 0.2
Components
Total Stocks in Singapore 171,887 221,675 0.3
South Korea Electronics 700 Samsung Electronics 50,652 109,975 0.2
Steel 4,200 Pohang Iron & Steel Company,
Ltd. (ADR)* 116,470 149,100 0.2
Total Stocks in South Korea 167,122 259,075 0.4
Spain Building Materials 21,000 Uralita, SA 288,636 176,905 0.3
Construction 2,370 ++Grupo Ferrovial, SA 57,682 50,458 0.1
Diversified 17,200 Dinamia Capital Privado. Sociedad de
Capital Riesgo, SA 320,292 188,159 0.3
Petroleum--Domestic 6,500 Repsol-YPF, SA 126,163 133,586 0.2
Real Estate 9,300 Metrovacesa, SA 290,232 209,049 0.3
Telecommunications 14,400 ++Telefonica, SA 213,916 230,898 0.4
Utilities--Electric 10,800 Endesa, SA 283,013 212,479 0.4
Total Stocks in Spain 1,579,934 1,201,534 2.0
Sweden Auto & Truck 4,600 Autoliv, Inc. 153,809 159,008 0.3
Automobile Parts 16,700 Haldex AB 295,290 206,022 0.3
Automobiles 5,900 Volvo AB 'B' 159,854 184,848 0.3
Banking 8,250 ForeningsSparbanken AB 69,546 131,504 0.2
25,700 Nordbanken Holding AB 180,684 151,620 0.3
------------ ------------ ------
250,230 283,124 0.5
Diversified 1,800 Custos AB 'A' 46,361 40,015 0.0
4,600 Custos AB 'B' 121,232 101,417 0.2
------------ ------------ ------
167,593 141,432 0.2
Investment Management 20,400 Investment AB Bure 104,571 109,388 0.2
Paper Products 17,000 Stora Enso Oyj 'R' 169,400 213,876 0.4
Real Estate 13,100 Castellum AB 136,644 118,407 0.2
17,800 Fastighets AB Tornet 271,414 247,856 0.4
------------ ------------ ------
408,058 366,263 0.6
Telecommunications 9,900 Telefonaktiebolaget LM Ericsson (ADR)* 245,383 316,800 0.5
Total Stocks in Sweden 1,954,188 1,980,761 3.3
Switzerland Banking 840 Credit Suisse Group (Registered
Shares) 148,438 158,852 0.3
Banking & Financial 447 UBS AG (Registered Shares) 148,673 136,240 0.2
Pharmaceuticals 24 Roche Holding AG 265,418 265,397 0.4
Total Stocks in Switzerland 562,529 560,489 0.9
United Banking 30,600 HSBC Holdings PLC 270,059 366,089 0.6
Kingdom 29,500 Lloyds TSB Group PLC 398,021 383,276 0.6
------------ ------------ ------
668,080 749,365 1.2
Beverages 24,904 Diageo PLC 263,764 253,162 0.4
Cable Television 25,100 ++TeleWest Communications PLC 108,810 108,161 0.2
Services
Diversified 68,500 Billiton PLC 172,614 287,135 0.5
Drugs 7,200 AstraZeneca Group PLC 289,405 267,805 0.4
Entertainment 11,800 The Peninsular and Oriental Steam
Navigation Company 181,855 190,969 0.3
Foods 70,100 Devro PLC 358,238 142,804 0.2
Hardware Products 19,500 Reckitt & Colman PLC 268,782 276,413 0.5
Leisure 47,400 Hilton Group PLC 249,566 188,323 0.3
Oil--Integrated 6,650 Shell Transport & Trading
Company (ADR)* 242,205 321,278 0.5
Oil & Related 21,100 BP Amoco PLC 364,589 412,577 0.7
Pharmaceuticals 8,800 Glaxo Wellcome PLC 281,197 226,956 0.4
Publishing 18,400 Reed International PLC 154,309 140,247 0.2
Real Estate 26,100 The British Land Company PLC 236,610 215,638 0.4
Retail Stores 10,900 Dixons Group PLC 249,184 225,140 0.4
Telecommunications 11,900 British Telecommunications PLC 193,442 207,239 0.3
13,600 Cable & Wireless PLC 202,960 165,901 0.3
5,800 ++Energis PLC 157,030 154,846 0.2
10,100 Vodafone AirTouch PLC 190,460 215,324 0.4
------------ ------------ ------
743,892 743,310 1.2
Total Stocks in the United
Kingdom 4,833,100 4,749,283 7.8
Total Investments in Foreign
Stocks 23,072,541 25,159,830 41.3
Total Investments in US &
Foreign Stocks 37,346,167 43,232,542 70.9
SHORT-TERM Face
SECURITIES Amount Issue
Commercial US$ 2,904,000 General Motors Acceptance Corp.,
Paper** 5.13% due 8/02/1999 2,903,172 2,903,172 4.7
Total Investments in Short-Term
Securities 2,903,172 2,903,172 4.7
Total Investments $ 56,807,290 61,538,111 100.9
============
Unrealized Depreciation on Forward Foreign Exchange Contracts--Net*** (3,370) 0.0
Liabilities in Excess of Other Assets (570,860) (0.9)
------------ ------
Net Assets $ 60,963,881 100.0%
============ ======
<FN>
++Non-income producing security.
*American Depositary Receipts (ADR).
**Commercial Paper is traded on a discount basis; the interest rate
shown reflects the discount rates paid at the time of purchase by
the Portfolio.
***Forward foreign exchange contracts as of July 31, 1999 were as
follows:
Unrealized
Foreign Expiration Depreciation
Currency Sold Date (Note 1b)
C$ 1,000,000 August 1999 $ (3,370)
Total Unrealized Depreciation on Forward
Foreign Exchange Contracts--Net
(US$ Commitment--$663,583) $ (3,370)
==========
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Asset Builder Program, Inc., July 31, 1999
<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 26,000 The Interpublic Group of
Companies, Inc. $ 680,695 $ 1,092,000 0.7%
Banking & Financial 51,000 Bank of America Corporation 3,343,004 3,385,125 2.3
52,000 Bank One Corporation 2,539,394 2,837,250 1.9
87,000 Citigroup Inc. 3,487,132 3,876,938 2.6
124,000 Mellon Bank Corporation 3,995,900 4,185,000 2.8
10,500 State Street Corporation 582,114 744,187 0.5
------------ ------------ ------
13,947,544 15,028,500 10.1
Beverages 5,000 The Coca-Cola Company 417,140 301,563 0.2
Broadcasting--Radio & 20,000 ++AMFM Inc. 879,402 1,050,000 0.7
Television 20,000 ++CBS Corporation 562,423 878,750 0.6
34,000 ++Clear Channel Communications, Inc. 1,529,620 2,365,125 1.6
26,000 ++Infinity Broadcasting Corp. (Class A) 575,092 716,625 0.5
------------ ------------ ------
3,546,537 5,010,500 3.4
Chemicals 40,000 E.I. du Pont de Nemours and Company 2,609,487 2,882,500 1.9
Communications 27,000 ++3Com Corporation 757,781 651,375 0.4
Equipment 95,000 ++Cisco Systems, Inc. 2,893,555 5,901,875 4.0
5,000 ++Copper Mountain Networks, Inc. 385,513 603,750 0.4
4,000 Lucent Technologies Inc. 144,995 260,250 0.2
1,000 Nortel Networks Corporation 48,537 88,625 0.1
------------ ------------ ------
4,230,381 7,505,875 5.1
Computers 15,000 Compaq Computer Corporation 538,763 360,000 0.3
7,000 ++Dell Computer Corporation 143,852 286,125 0.2
30,000 International Business Machines
Corporation 2,899,362 3,770,625 2.5
------------ ------------ ------
3,581,977 4,416,750 3.0
Cosmetics 6,000 The Gillette Company 333,245 262,875 0.2
1,500 International Flavors & Fragrances
Inc. 66,303 67,969 0.0
------------ ------------ ------
399,548 330,844 0.2
Diversified 37,000 Minnesota Mining and Manufacturing
Company (3M) 2,903,201 3,253,687 2.2
Electrical Equipment 2,000 Emerson Electric Co. 108,040 119,375 0.1
55,000 General Electric Company 4,633,622 5,995,000 4.0
1,000 Honeywell Inc. 74,816 119,812 0.1
------------ ------------ ------
4,816,478 6,234,187 4.2
Electronics 3,000 Intel Corporation 167,344 207,000 0.1
1,000 Texas Instruments Incorporated 59,943 144,000 0.1
------------ ------------ ------
227,287 351,000 0.2
Energy 6,000 Duke Energy Corporation 361,024 317,625 0.2
50,000 El Paso Energy Corporation 1,806,738 1,790,625 1.2
7,000 Enron Corp. 441,269 596,312 0.4
12,000 UtiliCorp United Inc. 309,598 285,750 0.2
------------ ------------ ------
2,918,629 2,990,312 2.0
Entertainment 16,000 ++AT&T Corp.--Liberty Media Group
(Class A) 558,626 592,000 0.4
50,000 The Walt Disney Company 1,629,106 1,381,250 0.9
------------ ------------ ------
2,187,732 1,973,250 1.3
Financial 4,000 American Express Company 390,615 527,000 0.3
Services 13,000 Federal Home Loan Mortgage
Association 793,120 745,875 0.5
25,000 Federal National Mortgage
Association 1,665,071 1,725,000 1.2
10,000 Franklin Resources, Inc. 546,808 381,250 0.3
40,000 The Hartford Financial Services
Group, Inc. 2,387,123 2,160,000 1.4
25,000 Morgan Stanley Dean Witter & Co. 1,941,791 2,253,125 1.5
17,000 T. Rowe Price Associates, Inc. 631,251 592,875 0.4
------------ ------------ ------
8,355,779 8,385,125 5.6
Food 5,000 Albertson's, Inc. 209,157 248,438 0.2
Merchandising 18,000 ++The Kroger Co. 294,800 473,625 0.3
7,000 ++Safeway Inc. 335,473 377,125 0.2
------------ ------------ ------
839,430 1,099,188 0.7
Foods 5,000 ConAgra, Inc. 124,865 127,812 0.1
4,000 Wm. Wrigley Jr. Company 288,598 318,750 0.2
------------ ------------ ------
413,463 446,562 0.3
Home Furnishings 34,050 Ethan Allen Interiors, Inc. 1,190,938 1,081,087 0.7
Hotels 9,000 Marriott International, Inc. (Class A) 305,627 315,562 0.2
Household Products 2,000 Colgate-Palmolive Company 71,320 98,750 0.1
24,000 Kimberly-Clark Corporation 1,202,891 1,464,000 1.0
4,000 The Procter & Gamble Company 340,639 362,000 0.2
15,178 Unilever NV (NY Registered Shares) 1,221,062 1,060,563 0.7
------------ ------------ ------
2,835,912 2,985,313 2.0
Information 30,000 ++America Online, Inc. 1,007,468 2,853,750 1.9
Processing 42,000 First Data Corporation 1,587,399 2,081,625 1.4
13,000 ++General Motors Corporation (Class H) 786,841 722,312 0.5
------------ ------------ ------
3,381,708 5,657,687 3.8
Insurance 15,000 Aetna Inc. 1,322,468 1,230,000 0.9
24,500 American International Group, Inc. 2,201,819 2,845,063 1.9
------------ ------------ ------
3,524,287 4,075,063 2.8
Medical Technology 42,000 Abbott Laboratories 2,080,632 1,803,375 1.2
9,000 ++Boston Scientific Corporation 362,174 365,063 0.2
4,000 ++Guidant Corporation 136,943 234,250 0.2
1,000 Johnson & Johnson 66,560 92,125 0.1
------------ ------------ ------
2,646,309 2,494,813 1.7
Oil Services 3,000 Baker Hughes Incorporated 114,960 104,438 0.1
2,000 Diamond Offshore Drilling, Inc. 90,370 64,000 0.0
1,500 Schlumberger Limited 88,170 90,844 0.1
------------ ------------ ------
293,500 259,282 0.2
</TABLE>
Merrill Lynch Asset Builder Program, Inc., July 31, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<CAPTION>
Growth Opportunity Portfolio (concluded)
Shares Value Percent of
Industries Held Common Stocks Cost (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C>
Pharmaceuticals 8,000 ++Amgen Inc. $ 385,965 $ 615,000 0.4%
74,000 Bristol-Myers Squibb Company 4,152,225 4,921,000 3.3
57,000 Merck & Co., Inc. 3,823,507 3,858,187 2.6
69,000 Pfizer Inc. 1,939,566 2,341,687 1.6
------------ ------------ ------
10,301,263 11,735,874 7.9
Photography 1,000 Eastman Kodak Company 66,840 69,125 0.1
Pollution Control 8,000 Waste Management, Inc. 396,560 204,500 0.1
Publishing 11,000 Gannett Co., Inc. 780,104 794,750 0.5
Restaurants 12,000 McDonald's Corporation 343,189 500,250 0.3
Retail--Specialty 3,500 ++Abercrombie & Fitch Co. (Class A) 155,533 145,250 0.1
40,000 CVS Corporation 1,485,888 1,990,000 1.3
6,000 The Gap, Inc. 108,520 280,500 0.2
27,120 Lowe's Companies, Inc. 1,275,270 1,430,580 1.0
40,000 ++Staples, Inc. 650,898 1,152,500 0.8
12,000 ++Tommy Hilfiger Corporation 417,254 443,250 0.3
80,000 Walgreen Co. 1,601,319 2,265,000 1.5
------------ ------------ ------
5,694,682 7,707,080 5.2
Retail--Stores 24,000 The TJX Companies, Inc. 744,457 793,500 0.6
46,000 Wal-Mart Stores, Inc. 1,206,862 1,943,500 1.3
------------ ------------ ------
1,951,319 2,737,000 1.9
Semiconductors 4,000 ++Applied Materials, Inc. 146,000 287,500 0.2
Software--Computer 2,000 ++Microsoft Corporation 106,634 171,500 0.1
76,000 SAP AG (Systeme, Anwendungen,
Produkte in der Datenverarbeitung)
(ADR)* 2,068,560 2,408,250 1.6
------------ ------------ ------
2,175,194 2,579,750 1.7
Telecommunications 76,000 AT&T Corp. 3,903,034 3,947,250 2.7
4,000 Cable & Wireless PLC (ADR)* 159,326 144,000 0.1
32,000 ++Equant (NY Registered Shares) 2,465,988 2,846,000 1.9
42,000 GTE Corporation 2,342,888 3,094,875 2.1
30,000 ++MCI WorldCom Inc. 1,592,520 2,475,000 1.7
74,600 Sprint Corp. (FON Group) 2,303,293 3,855,888 2.6
35,000 ++Sprint Corp. (PCS Group) 750,417 2,121,875 1.4
8,000 Vodafone Group PLC (ADR)* 1,449,526 1,684,000 1.1
------------ ------------ ------
14,966,992 20,168,888 13.6
Toys 19,000 Mattel, Inc. 716,164 446,500 0.3
Travel & Lodging 31,000 Carnival Corporation 1,007,133 1,439,563 1.0
Total Common Stocks 104,799,029 126,841,430 85.3
Face
Amount Short-Term Securities
Commercial $ 5,000,000 CSW Credit Inc., 5.07% due
Paper** 8/02/1999 4,998,592 4,998,592 3.4
7,354,000 General Motors Acceptance Corp.,
5.13% due 8/02/1999 7,351,904 7,351,904 5.0
US Government 10,000,000 Federal Home Loan Mortgage
Agency Obligations** Corporation, 5% due 8/02/1999 9,997,222 9,997,222 6.7
Total Short-Term Securities 22,347,718 22,347,718 15.1
Total Investments $127,146,747 149,189,148 100.4
=============
Liabilities in Excess of Other Assets (553,155) (0.4)
------------ ------
Net Assets $148,635,993 100.0%
============ ======
<FN>
*American Depositary Receipts (ADR).
**Commercial Paper and certain US Government Agency Obligations are
traded on a discount basis; the interest rates shown reflect the
discount rates 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 Home Equity Trust, 6.225%
Securities* due 9/15/2023 $ 149,978 $ 148,404
- --0.8%
Banking--11.0% A A2 250,000 Bank of New York Co., Inc., 7.875% due
11/15/2002 276,675 259,620
A A1 350,000 Chase Manahattan Corporation, 7.25% due
6/01/2007 378,690 350,973
A A1 300,000 First Chicago Bank, 8.25% due 6/15/2002 321,138 312,378
BBB+ A3 300,000 Great Western Bank, 9.875% due 6/15/2001 332,535 317,238
BBB a1 300,000 KeyCorp Capital I, 6.089% due 7/01/2028 (a) 296,982 289,650
BBB+ Baa1 250,000 MBNA America Bank NA, 5.396% due
6/10/2004 (a) 246,142 247,677
A A1 200,000 Wells Fargo & Co., 8.375% due 5/15/2002 213,120 208,754
------------ ------------
2,065,282 1,986,290
Finance--3.7% A+ Aa3 120,000 Commercial Credit Co., 6.75% due 7/01/2007 122,693 117,251
A A2 250,000 Household Finance Corp., 6% due 5/01/2004 249,945 239,497
BBB Baa3 320,000 Newcourt Credit Group, 6.875% due 2/16/2005 (b) 318,915 304,470
------------ ------------
691,553 661,218
</TABLE>
Merrill Lynch Asset Builder Program, Inc., July 31, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Quality Bond Portfolio (continued)
S&P Moody's Face Value
INDUSTRIES Ratings Ratings Amount Bonds & Notes Cost (Note 1a)
<S> <S> <S> <C> <S> <C> <C>
Finance-- A A2 $225,000 Bear Stearns Companies, Inc., 6.875% due
Other--9.8% 10/01/2005 $ 231,237 $ 219,922
A aa3 100,000 Citigroup Capital II, 7.75% due 12/01/2036 100,170 95,907
BBB- Baa2 100,000 Commercial Net Lease Realty, 7.125% due
3/15/2008 99,729 88,864
A- A3 38,000 Donaldson, Lufkin & Jenrette Inc., 6.875%
due 11/01/2005 37,694 37,062
AAA Aaa 240,000 Florida Windstorm Under, 7.125% due
2/25/2019 (b) 238,682 226,208
BBB- Baa3 150,000 Hospitality Properties Trust, 7% due
3/01/2008 149,730 133,084
A+ Aa3 100,000 Morgan Stanley, Dean Witter, Discover &
Co., 5.625% due 1/20/2004 99,545 95,898
BBB+ Baa1 275,000 Paine Webber Group Inc., 9.25% due
12/15/2001 294,981 289,751
A+ A2 200,000 Prudential Insurance Co., 6.375% due
7/23/2006 (b) 199,116 188,986
Salomon Smith Barney Holdings, Inc.:
A Aa3 100,000 7.125% due 10/01/2006 104,029 99,284
A Aa3 150,000 7.375% due 5/15/2007 149,866 150,594
BBB Baa2 150,000 Spieker Properties LP, 7.35% due 12/01/2017 151,549 136,700
------------ ------------
1,856,328 1,762,260
Financial Associates Corporation of North America:
Services-- AA- Aa3 100,000 7.40% due 5/15/2006 108,969 101,585
Consumer--4.9% AA- Aa3 250,000 6.95% due 11/01/2018 248,530 229,033
A- aa3 150,000 CIT Capital Trust I, 7.70% due 2/15/2027 149,316 140,031
A- Baa1 150,000 Finova Capital Corp., 6.25% due 11/01/2002 149,426 148,029
AAA Aaa 245,000 General Electric Capital Corp., 8.50% due
7/24/2008 297,577 269,743
------------ ------------
953,818 888,421
Industrial-- A+ A1 100,000 Anheuser-Busch Companies Inc., 8.75% due
Consumer 12/01/1999 107,905 101,026
Goods--6.2% BBB- Baa3 250,000 Flowers Industries Inc., 7.15% due 4/15/2028 248,675 213,930
A A1 80,000 PepsiCo, Inc., 5.75% due 1/02/2003 79,595 78,366
A A2 500,000 Philip Morris Companies, Inc., 7% due
7/15/2005 520,315 494,985
AA Aa2 200,000 Wal-Mart Stores, Inc., 8.50% due 9/15/2024 207,350 217,354
------------ ------------
1,163,840 1,105,661
Industrial-- AA+ Aa1 175,000 BP America Inc., 9.375% due 11/01/2000 200,263 181,564
Energy--8.1% A- A3 460,000 Burlington Resources, 7.375% due 3/01/2029 469,226 438,060
BBB Baa1 250,000 Noram Energy Corp., 6.375% due 11/01/2013 (a) 250,392 243,730
BBB Baa3 250,000 Occidental Petroleum Corp., 6.50% due
4/01/2005 248,575 238,767
BBB+ Baa1 400,000 Sonat Inc., 7% due 2/01/2018 412,068 357,148
------------ ------------
1,580,524 1,459,269
Industrial-- A A2 200,000 AlliedSignal Inc., 6.20% due 2/01/2008 199,732 188,530
Manufacturing-- BBB+ A3 200,000 Applied Materials Inc., 6.75% due 10/15/2007 199,870 191,982
19.8% BBB+ Baa2 250,000 Borg-Warner Automotive, 7.125% due 2/15/2029 246,505 226,423
Bowater Inc.:
BBB Baa2 150,000 9% due 8/01/2009 168,450 167,225
BBB Baa2 100,000 9.375% due 12/15/2021 120,924 114,790
A+ A2 200,000 Danaher Corp., 6% due 10/15/2008 198,926 183,292
BBB- Baa3 300,000 Equistar Chemicals LP, 8.75% due 2/15/2009 (b) 309,045 300,269
Ford Motor Credit Company:
A A1 200,000 8.20% due 2/15/2002 213,154 207,102
A A1 300,000 5.147% due 8/27/2006 (a) 299,792 299,409
General Motors Acceptance Corp.:
A A2 100,000 8.50% due 1/01/2003 108,510 105,046
A A2 100,000 7.125% due 5/01/2003 105,785 100,836
A A2 200,000 8.75% due 7/15/2005 226,232 215,578
A A2 300,000 7.40% due 9/01/2025 294,216 292,044
BBB- Baa2 200,000 Georgia-Pacific Group, 7.25% due 6/01/2028 202,752 183,948
BBB- Baa2 300,000 Jones Apparel Group, 7.875% due 6/15/2006 (b) 298,968 298,694
BBB+ Baa1 300,000 Lockheed Martin Corporation, 7.75% due
5/01/2026 332,997 293,304
BBB Baa2 125,000 Meritor Automotive Inc., 6.80% due 2/15/2009 124,441 116,645
A+ A1 100,000 Motorola Inc., 6.50% due 11/15/2028 89,482 87,080
------------ ------------
3,739,781 3,572,197
Industrial-- A A2 150,000 Carnival Corp., 7.70% due 7/15/2004 156,746 154,086
Services--11.4% A A2 200,000 Computer Sciences Corp., 6.25% due 3/15/2009 198,968 188,405
A A2 203,569 Disney Custom Repackaged Asset Vehicle-403,
6.85% due 1/10/2007 (b)* 203,431 203,040
A A2 200,000 First Data Corporation, 6.375% due 12/15/2007 199,486 193,334
A- A3 100,000 Hertz Corporation, 6.50% due 5/15/2006 99,829 95,489
BBB- Baa3 200,000 The Kroger Co., 8.15% due 7/15/2006 223,870 206,712
May Department Stores Co.:
A+ A1 125,000 9.875% due 12/01/2002 142,167 137,842
A+ A1 150,000 6.70% due 9/15/2028 157,788 135,870
BBB- Baa3 200,000 News America Holdings, Inc., 8.50% due
2/15/2005 223,550 208,596
A- A2 250,000 Sears Roebuck & Company, 9.375% due 11/01/2011 311,083 282,665
AA- A2 120,000 TCI Communications Inc., 8.75% due 8/01/2015 140,767 135,046
BBB Baa2 100,000 Time Warner Entertainment Co., 8.375% due
3/15/2023 107,029 106,729
------------ ------------
2,164,714 2,047,814
Transportation BBB+ Baa2 50,000 Burlington North Santa Fe, 6.75% due 3/15/2029 49,681 44,492
- --4.9% BBB Baa2 250,000 CSX Corp., 7.90% due 5/01/2017 279,713 252,742
AA+ Aa3 300,000 Continental Airlines, 7.056% due 9/15/2009 300,000 296,640
BBB- Baa3 250,000 Delta Airlines, 10.125% due 5/15/2010 312,803 292,167
------------ ------------
942,197 886,041
US Government US Treasury Notes:
Obligations AAA Aaa 590,000 5.25% due 5/15/2004 583,363 576,725
- --3.8% AAA Aaa 100,000 6.50% due 5/15/2005 102,945 102,375
------------ ------------
686,308 679,100
</TABLE>
Merrill Lynch Asset Builder Program, Inc., July 31, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
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>
Utilities-- A- A2 $300,000 ALLTEL Corporation, 6.75% due 9/15/2005 $ 295,380 $ 299,583
Communications AA+ Aa3 100,000 Ameritech Capital Funding, 6.45% due 1/15/2018 105,010 91,489
- --7.7% BB Ba2 250,000 Frontier Corp., 6% due 10/15/2013 (a) 249,660 233,102
A Baa1 150,000 GTE Corp., 6.84% due 4/15/2018 154,197 140,131
AAA Aa1 125,000 Indiana Bell Telephone Co., Inc., 7.30% due
8/15/2026 133,639 122,689
MCI WorldCom Inc.:
A- A3 200,000 7.75% due 4/01/2007 217,758 208,094
A- A3 200,000 6.125% due 4/15/2012 (a) 199,466 198,312
BBB+ Baa1 100,000 Sprint Capital Corporation, 6.125% due
11/15/2008 96,270 91,947
------------ ------------
1,451,380 1,385,347
Utilities-- A+ A1 100,000 Consolidated Edison, Inc., 6.25% due 2/01/2008 100,000 95,102
Electric--4.4% AA- Aa3 300,000 Florida Power Corp., 6.875% due 2/01/2008 327,957 299,436
A A1 250,000 Mississippi Power, 6.05% due 5/01/2003 255,620 245,715
A A2 150,000 Virginia Electric & Power Co., 8.625% due
10/01/2024 166,200 155,889
------------ ------------
849,777 796,142
Total Investments in Bonds & Notes--96.5% 18,295,480 17,378,164
SHORT-TERM
SECURITIES Issue
US Government 309,000 Federal Home Loan Bank, 4.97% due 8/02/1999 309,000 309,000
Agency
Obligations**--1.7%
Total Investments in Short-Term
Securities--1.7% 309,000 309,000
Total Investments--98.2% $ 18,604,480 17,687,164
============
Other Assets Less Liabilities--1.8% 317,101
------------
Net Assets--100.0% $ 18,004,265
============
<FN>
*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.
(a)Floating rate note.
(b)The security may be offered and sold to "qualified institutional
buyers" under Rule 144A of the Securities Act of 1933.
See Notes to Financial Statements.
</TABLE>
<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 $ 617,644 11.50% 6/01/2019 $ 678,314
Agency Mortgage- Federal Home Loan Mortgage Corporation--
Backed Gold Program 3,261,467 5.50 3/01/2013-5/01/2014 3,060,134
Obligations*--80.7% Federal National Mortgage Association 942,437 6.00 10/01/2028 873,282
Federal National Mortgage Association 1,889,782 6.50 2/01/2012-2/01/2014 1,846,261
Federal National Mortgage Association--
Multi-Family #0073313++++ 1,997,944 6.18 1/01/2006 1,934,041
Government National Mortgage Association 996,116 5.50 3/15/2029-4/15/2029 890,392
Government National Mortgage Association 419,907 6.50 1/15/2028 398,767
Government National Mortgage Association 3,096,117 7.00 11/15/2027-8/15/2028 3,019,607
Government National Mortgage Association 3,195,797 7.50 10/15/2025-3/15/2028 3,196,355
Total US Government Agency Mortgage-Backed
Obligations (Cost--$16,525,711) 15,897,153
US Government US Treasury Notes 2,000,000 5.75 6/30/2001 2,003,126
Obligations--12.3% US Treasury STRIPS** 1,500,000 5.635++ 8/15/2019 413,970
Total US Government Obligations (Cost--$2,491,902) 2,417,096
SHORT-TERM Face
SECURITIES Amount Issue
Repurchase $1,250,000 Morgan Stanley & Company, purchased on 7/30/1999
Agreements*** to yield 5% on 8/02/1999 1,250,000
- --6.3%
Total Investments in Short-Term Securities (Cost--$1,250,000) 1,250,000
Total Investments (Cost--$20,267,613)--99.3% 19,564,249
Other Assets Less Liabilities--0.7% 131,073
-----------
Net Assets--100.0% $19,695,322
===========
<FN>
*Mortgage-Backed Obligations are subject to principal paydowns as a
result of prepayments or refinancing of the underlying mortgage
instruments. As a result, the average life may be substantially less
than the original maturity.
**STRIPS--Separate Trading of Registered Interest and Principal of
Securities.
***Repurchase Agreements are fully collateralized by US Government &
Agency Obligations.
++Represents the yield-to-maturity on this zero coupon issue at the
time of purchase by the Portfolio.
++++Underlying multi-family loans have prepayment protection by
means of lockout periods and/or yield maintenance premiums.
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Asset Builder Program, Inc., July 31, 1999
EQUITY PORTFOLIO CHANGES
For the Quarter Ended July 31, 1999
FUNDAMENTAL
VALUE PORTFOLIO
Additions
Compaq Computer Corporation
Delphi Automotive Systems Corporation
First Union Corporation
*LifePoint Hospitals, Inc.
Lockheed Martin Corporation
*Triad Hospitals, Inc.
Deletions
Aetna Inc.
Great Lakes Chemical Corporation
*LifePoint Hospitals, Inc.
Occidental Petroleum Corporation
Texas Instruments Incorporated
*Triad Hospitals, Inc.
WHX Corporation
GLOBAL
OPPORTUNITY
PORTFOLIO
Additions
AMFM Inc.
Baan Company, NV
CSM NV
The Chase Manhattan Corporation
Citigroup Inc.
Clear Channel Communications, Inc.
Compaq Computer Corporation
Development Bank of Singapore Limited 'Foreign'
East Japan Railway Company
Federated Department Stores, Inc.
The Goldman Sachs Group, Inc.
Grupo Ferrovial, SA
Hutchison Whampoa Limited
*Lattice Semiconductor Corporation
Mannesmann AG
McDonald's Corporation
Merck & Co., Inc.
Mitsukoshi, Ltd.
Nippon Steel Corporation
Pechiney SA 'A'
Pohang Iron & Steel Company, Ltd. (ADR)
Reckitt & Colman PLC
Repsol-YPF, SA
Roche Holding AG
Shin-Etsu Chemical Co., Ltd.
Sun Microsystems, Inc.
TD Waterhouse Group, Inc.
*Telefonica Publicidad e Informacion, SA
Total Fina SA 'B'
Transaction Systems Architects, Inc.
(Class A)
*Unilever NV
W. W. Grainger, Inc.
Xerox Corporation
Deletions
Avis Rent A Car, Inc.
Bank of Scotland
Capstar Broadcasting Corporation (Class A)
Case Corporation
Centocor, Inc.
Elan Corporation PLC (ADR)
Ford Motor Company
Fuji Photo Film
Fujikura Ltd.
The Hertz Corporation (Class A)
Ingersoll-Rand Company
Keane, Inc.
*Lattice Semiconductor Corporation
Morgan Stanley Dean Witter & Co.
National Westminster Bank PLC
Oracle Corporation
PECO Energy Company
Providian Financial Corporation
Public Service Enterprise Group Incorporated
Rio Tinto PLC (Registered Shares)
Rite Aid Corporation
Royal Caribbean Cruises Ltd.
Sundstrand Corporation
Swisscom AG (Registered Shares)
Telecomunicacoes Brasileiras SA--Telebras (ADR)
*Telefonica Publicidad e Informacion, SA
Tesco PLC
*Unilever NV
The Walt Disney Company
Waste Management, Inc.
World Color Press, Inc.
GROWTH
OPPORTUNITY
PORTFOLIO
Additions
3Com Corporation
AMFM Inc.
Copper Mountain Networks, Inc.
Duke Energy Corporation
General Motors Corporation (Class H)
The Kroger Co.
UtiliCorp United Inc.
Deletions
Ameritech Corporation
Chancellor Media Corporation
Fred Meyer, Inc.
[FN]
*Added and deleted in the same quarter.
Merrill Lynch Asset Builder Program, Inc., July 31, 1999
<TABLE>
STATEMENTS OF ASSETS AND LIABILITIES
<CAPTION>
Fundamental Global Growth Quality US Government
Value Opportunity Opportunity Bond Securities
As of July 31, 1999 Portfolio Portfolio Portfolio Portfolio Portfolio
<S> <S> <C> <C> <C> <C> <C>
Assets: Investments, at value* (Note 1a) $111,075,848 $ 61,538,111 $149,189,148 $ 17,687,164 $ 19,564,249
Foreign cash (Note 1c) -- 49,964 -- -- --
Cash 2,558 540 27,845 40,804 --
Receivables:
Interest -- 203,149 -- 334,398 110,991
Securities sold 307,772 80,248 -- 100,623 --
Capital shares sold 139,847 38,382 263,977 19,973 25,188
Dividends 117,280 67,858 108,876 -- --
Investment adviser (Note 2) -- -- -- 57,356 98,424
Principal paydowns -- -- -- -- 33,854
Deferred organization expenses
(Note 1f) 7,414 17,297 32,254 4,237 9,275
Prepaid registration fees and
other assets (Note 1f) 57,926 43,763 26,157 41,083 32,206
------------ ------------ ------------ ------------ ------------
Total assets 111,708,645 62,039,312 149,648,257 18,285,638 19,874,187
------------ ------------ ------------ ------------ ------------
Liabilities: Unrealized depreciation on forward
foreign exchange contracts (Note 1b) -- 3,370 -- -- --
Payables:
Securities purchased 711,213 519,205 337,147 104,341 --
Capital shares redeemed 148,846 245,578 232,936 65,393 32,010
Distributor (Note 2) 88,960 48,890 122,340 11,542 12,565
Investment adviser (Note 2) 60,905 38,201 82,228 -- --
Dividends to shareholders (Note 1g) -- -- -- 32,096 28,743
Accrued expenses and other liabilities 234,863 220,187 237,613 68,001 105,547
------------ ------------ ------------ ------------ ------------
Total liabilities 1,244,787 1,075,431 1,012,264 281,373 178,865
------------ ------------ ------------ ------------ ------------
Net Assets: Net assets $110,463,858 $ 60,963,881 $148,635,993 $ 18,004,265 $ 19,695,322
============ ============ ============ ============ ============
Net Assets Class A Common Stock, $.10 par
Consist of: value++ $ 2,711 $ 1,477 $ 3,908 $ 1,201 $ 2,677
Class B Common Stock, $.10 par
value++++ 441,859 321,162 481,004 124,098 142,777
Class C Common Stock, $.10 par
value++++++ 231,885 141,069 295,546 49,627 40,094
Class D Common Stock, $.10 par
value++++++++ 44,207 23,811 29,989 14,566 10,420
Paid-in capital in excess of par 90,544,530 51,638,278 118,614,839 18,817,793 20,280,133
Accumulated investment loss--net (60,894) (66,542) (580,200) -- --
Undistributed (accumulated) realized
capital gains (losses) on investments
and foreign currency transactions--net 5,928,585 4,179,325 7,748,506 (85,704) (67,897)
Accumulated distributions in excess
of realized capital gains on invest-
ments and foreign currency
transactions--net (Note 1g) -- -- -- -- (9,518)
Unrealized appreciation (depreciation)
on investments and foreign currency
transactions--net 13,330,975 4,725,301 22,042,401 (917,316) (703,364)
------------ ------------ ------------ ------------ ------------
Net assets $110,463,858 $ 60,963,881 $148,635,993 $ 18,004,265 $ 19,695,322
============ ============ ============ ============ ============
Net Asset Class A:
Value: Net assets $ 425,135 $ 189,143 $ 731,024 $ 114,013 $ 269,057
============ ============ ============ ============ ============
Shares outstanding 27,108 14,771 39,081 12,005 26,770
============ ============ ============ ============ ============
Net asset value and redemption
price per share $ 15.68 $ 12.81 $ 18.71 $ 9.50 $ 10.05
============ ============ ============ ============ ============
Class B:
Net assets $ 67,656,273 $ 40,149,106 $ 88,202,358 $ 11,791,235 $ 14,349,183
============ ============ ============ ============ ============
Shares outstanding 4,418,591 3,211,621 4,810,039 1,240,978 1,427,770
============ ============ ============ ============ ============
Net asset value and redemption
price per share $ 15.31 $ 12.50 $ 18.34 $ 9.50 $ 10.05
============ ============ ============ ============ ============
Class C:
Net assets $ 35,479,688 $ 17,590,883 $ 54,106,546 $ 4,715,249 $ 4,029,155
============ ============ ============ ============ ============
Shares outstanding. 2,318,848 1,410,694 2,955,459 496,273 400,941
============ ============ ============ ============ ============
Net asset value and redemption
price per share $ 15.30 $ 12.47 $ 18.31 $ 9.50 $ 10.05
============ ============ ============ ============ ============
Class D:
Net assets $ 6,902,762 $ 3,034,749 $ 5,596,065 $ 1,383,768 $ 1,047,927
============ ============ ============ ============ ============
Shares outstanding 442,071 238,110 299,888 145,661 104,205
============ ============ ============ ============ ============
Net asset value and redemption
price per share $ 15.61 $ 12.75 $ 18.66 $ 9.50 $ 10.06
============ ============ ============ ============ ============
<FN>
*Identified cost $ 97,744,873 $ 56,807,290 $127,146,747 $ 18,604,480 $ 20,267,613
============ ============ ============ ============ ============
++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 10,250,000 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., July 31, 1999
<TABLE>
STATEMENTS OF OPERATIONS
<CAPTION>
Fundamental Global Growth Quality US Government
Value Opportunity Opportunity Bond Securities
For the Six Months Ended July 31, 1999 Portfolio Portfolio Portfolio Portfolio Portfolio
<S> <S> <C> <C> <C> <C> <C>
Investment Interest and discount earned $ 329,199 $ 393,040 $ 309,740 $ 632,576 $ 664,632
Income Dividends* 887,958 402,195 712,202 -- --
(Notes ------------ ------------ ------------ ------------ ------------
1d & 1e): Total income 1,217,157 795,235 1,021,942 632,576 664,632
------------ ------------ ------------ ------------ ------------
Expenses: Investment advisory fees (Note 2) 342,696 232,817 444,846 45,915 53,799
Account maintenance and distribution
fees--Class B (Note 2) 326,497 206,522 410,379 45,098 56,136
Transfer agent fees--Class B (Note 2) 172,720 127,444 191,808 28,539 20,622
Account maintenance and distribution
fees--Class C (Note 2) 166,200 87,446 245,878 18,954 17,652
Transfer agent fees--Class C (Note 2) 93,507 58,138 122,706 12,838 7,347
Accounting services (Note 2) 48,255 29,197 58,756 8,927 10,426
Registration fees (Note 1f) 29,998 25,599 24,117 35,008 27,656
Printing and shareholder reports 32,370 20,043 36,540 5,650 5,782
Custodian fees 12,330 34,966 14,079 7,663 11,036
Professional fees 19,328 10,690 22,134 4,957 5,259
Transfer agent fees--Class D (Note 2) 14,196 8,063 9,377 3,019 1,620
Amortization of organization expenses
(Note 1f) 3,631 8,809 7,126 2,077 4,693
Account maintenance fees--Class D
(Note 2) 8,136 3,877 6,166 1,913 1,748
Directors' fees and expenses 3,949 2,698 4,456 802 1,383
Pricing fees (Note 2) 212 2,679 -- 2,645 317
Transfer agent fees--Class A (Note 2) 864 491 1,313 142 832
Other 3,162 2,298 2,461 994 1,140
------------ ------------ ------------ ------------ ------------
Total expenses before reimbursement 1,278,051 861,777 1,602,142 225,141 227,448
Reimbursement of expenses (Note 2) -- -- -- (159,177) (151,912)
------------ ------------ ------------ ------------ ------------
Total expenses after reimbursement 1,278,051 861,777 1,602,142 65,964 75,536
------------ ------------ ------------ ------------ ------------
Investment income (loss)--net (60,894) (66,542) (580,200) 566,612 589,096
------------ ------------ ------------ ------------ ------------
Realized & Realized gain (loss) from:
Unrealized Investments--net 4,901,900 3,923,452 5,015,409 (88,903) (67,897)
Gain Foreign currency transactions--net -- 247,222 -- -- --
(Loss) on Change in unrealized appreciation/
Invest- depreciation on:
ments & Investments--net 4,990,355 (2,599,389) (3,967,595) (1,229,830) (894,023)
Foreign Foreign currency transactions--net -- (212,078) -- -- --
Currency ------------ ------------ ------------ ------------ ------------
Transactions Net realized and unrealized gain
- --Net (Notes (loss) on investments and foreign
1b, 1c, currency transactions 9,892,255 1,359,207 1,047,814 (1,318,733) (961,920)
1e & 3): ------------ ------------ ------------ ------------ ------------
Net Increase (Decrease) in Net Assets
Resulting from Operations $ 9,831,361 $ 1,292,665 $ 467,614 $ (752,121) $ (372,824)
============ ============ ============ ============ ============
<FN>
*Net of foreign withholding tax on
dividends $ 8,987 $ 41,527 $ 31,423 -- --
============ ============ ============ ============ ============
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
Fundamental Global Opportunity
Value Portfolio Portfolio
For the Six For the For the Six For the
Months Ended Year Ended Months Ended Year Ended
July 31, January 31, July 31, January 31,
Increase (Decrease) in Net Assets: 1999 1999 1999 1999
<S> <S> <C> <C> <C> <C>
Operations: Investment income (loss)--net $ (60,894) $ (280,174) $ (66,542) $ 187,440
Realized gain on investments and foreign
currency transactions--net 4,901,900 5,442,771 4,170,674 387,514
Change in unrealized appreciation/depreciation
on investments and foreign currency
transactions--net 4,990,355 162,925 (2,811,467) 4,446,195
------------ ------------ ------------ ------------
Net increase in net assets resulting from
operations 9,831,361 5,325,522 1,292,665 5,021,149
------------ ------------ ------------ ------------
Distri- Realized gain on investments--net:
butions to Class A -- (24,547) -- --
Shareholders Class B -- (3,462,399) -- --
(Note 1g): Class C -- (1,712,089) -- --
Class D -- (393,697) -- --
In excess of realized gain on investments--net:
Class A -- -- -- (561)
Class B -- -- -- (107,053)
Class C -- -- -- (43,148)
Class D -- -- -- (9,798)
------------ ------------ ------------ ------------
Net decrease in net assets resulting from
distributions to shareholders -- (5,592,732) -- (160,560)
------------ ------------ ------------ ------------
Capital Net increase (decrease) in net assets derived
Share from capital share transactions 430,360 23,869,513 (6,693,613) 1,550,635
Transactions ------------ ------------ ------------ ------------
(Note 4):
Net Assets: Total increase (decrease) in net assets 10,261,721 23,602,303 (5,400,948) 6,411,224
Beginning of period 100,202,137 76,599,834 66,364,829 59,953,605
------------ ------------ ------------ ------------
End of period $110,463,858 $100,202,137 $ 60,963,881 $ 66,364,829
============ ============ ============ ============
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Asset Builder Program, Inc., July 31, 1999
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS (concluded)
<CAPTION>
Growth Quality US Government
Opportunity Bond Securities
Portfolio Portfolio Portfolio
For the Six For the For the Six For the For the Six For the
Months Ended Year Ended Months Ended Year Ended Months Ended Year Ended
July 31, January 31, July 31, January 31, July 31, January 31,
Increase (Decrease) in Net Assets: 1999 1999 1999 1999 1999 1999
<S> <S> <C> <C> <C> <C> <C> <C>
Operations: Investment income
(loss)--net $ (580,200) $ (1,082,001) $ 566,612 $ 798,312 $ 589,096 $ 815,801
Realized gain (loss)
on investments--net 5,015,409 5,518,909 (88,903) 141,775 (67,897) 330,960
Change in unrealized
appreciation/depreciation
on investments--net (3,967,595) 21,955,016 (1,229,830) 139,750 (894,023) (89,917)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease)
in net assets resulting
from operations 467,614 26,391,924 (752,121) 1,079,837 (372,824) 1,056,844
------------ ------------ ------------ ------------ ------------ ------------
Dividends & Investment income--net:
Distribu- Class A -- -- (2,477) (45,570) (22,739) (149,920)
tions to Class B -- -- (369,108) (488,136) (406,340) (469,886)
Shareholders Class C -- -- (144,301) (205,201) (118,618) (151,711)
(Note 1g): Class D -- -- (50,726) (59,405) (41,399) (44,284)
Realized gain on
investments--net:
Class A -- (12,483) -- (1,890) -- (26,863)
Class B -- (1,099,540) -- (76,535) -- (230,879)
Class C -- (645,712) -- (30,006) -- (73,379)
Class D -- (78,747) -- (9,735) -- (26,101)
In excess of realized
gain on invest-
ments--net:
Class A -- -- -- -- -- (716)
Class B -- -- -- -- -- (6,152)
Class C -- -- -- -- -- (1,955)
Class D -- -- -- -- -- (695)
------------ ------------ ------------ ------------ ------------ ------------
Net decrease in net
assets resulting from
dividends and distri-
butions to share-
holders -- (1,836,482) (566,612) (916,478) (589,096) (1,182,541)
------------ ------------ ------------ ------------ ------------ ------------
Capital Net increase (decrease)
Share in net assets derived
Transactions from capital share
(Note 4): transactions 33,575,430 49,407,790 1,194,524 7,232,908 (1,818,080) 10,369,240
------------ ------------ ------------ ------------ ------------ ------------
Net Assets: Total increase (decrease)
in net assets 34,043,044 73,963,232 (124,209) 7,396,267 (2,780,000) 10,243,543
Beginning of period 114,592,949 40,629,717 18,128,474 10,732,207 22,475,322 12,231,779
------------ ------------ ------------ ------------ ------------ ------------
End of period $148,635,993 $114,592,949 $ 18,004,265 $ 18,128,474 $ 19,695,322 $ 22,475,322
============ ============ ============ ============ ============ ============
See Notes to Financial Statements.
</TABLE>
<TABLE>
FINANCIAL HIGHLIGHTS
<CAPTION>
Fundamental Value Portfolio++++
Class A
The following per share data and ratios have been derived For the Six
from information provided in the financial statements. Months Ended
July 31, For the Year Ended January 31,
Increase (Decrease) in Net Asset Value: 1999 1999 1998 1997 1996++
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 14.18 $ 13.98 $ 13.58 $ 11.67 $ 10.00
Operating ------------ ------------ ------------ ------------ ------------
Performance: Investment income (loss)--net .07 .11 .07 (.01) .25
Realized and unrealized gain on
investments--net 1.43 1.05 2.22 2.70 1.76
------------ ------------ ------------ ------------ ------------
Total from investment operations 1.50 1.16 2.29 2.69 2.01
------------ ------------ ------------ ------------ ------------
Less distributions:
Realized gain on investments--net -- (.96) (1.89) (.78) (.20)
In excess of realized gain on
investments--net -- -- -- -- (.11)
Return of capital--net -- -- -- -- (.03)
------------ ------------ ------------ ------------ ------------
Total distributions -- (.96) (1.89) (.78) (.34)
------------ ------------ ------------ ------------ ------------
Net asset value, end of period $ 15.68 $ 14.18 $ 13.98 $ 13.58 $ 11.67
============ ============ ============ ============ ============
Total Based on net asset value per share 10.58%+++ 8.51% 17.12% 23.20% 20.10%+++
Investment ============ ============ ============ ============ ============
Return:**
Ratios to Expenses, net of reimbursement 1.38%* 1.45% 1.63% 2.03% 1.54%
Average Net ============ ============ ============ ============ ============
Assets: Expenses 1.38%* 1.45% 1.63% 2.03% 2.00%
============ ============ ============ ============ ============
Investment income (loss)--net .92%* .75% .48% (.07%) 1.99%
============ ============ ============ ============ ============
Supplemental Net assets, end of period (in
Data: thousands) $ 425 $ 359 $ 317 $ 209 $ 121
============ ============ ============ ============ ============
Portfolio turnover 18.28% 40.10% 68.75% 80.60% 51.37%
============ ============ ============ ============ ============
<FN>
*Annualized.
**Total investment returns exclude the effects of sales charges.
++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., July 31, 1999
<TABLE>
FINANCIAL HIGHLIGHTS (continued)
<CAPTION>
Fundamental Value Portfolio++++
Class B
The following per share data and ratios have been derived For the Six
from information provided in the financial statements. Months Ended
July 31, For the Year Ended January 31,
Increase (Decrease) in Net Asset Value: 1999 1999 1998 1997 1996++
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 13.92 $ 13.75 $ 13.39 $ 11.55 $ 10.00
Operating ------------ ------------ ------------ ------------ ------------
Performance: Investment loss--net (.01) (.05) (.09) (.15) (.07)
Realized and unrealized gain on
investments--net 1.40 1.03 2.19 2.65 1.96
------------ ------------ ------------ ------------ ------------
Total from investment operations 1.39 .98 2.10 2.50 1.89
------------ ------------ ------------ ------------ ------------
Less distributions:
Realized gain on investments--net -- (.81) (1.74) (.66) (.20)
In excess of realized gain on
investments--net -- -- -- -- (.11)
Return of capital--net -- -- -- -- (.03)
------------ ------------ ------------ ------------ ------------
Total distributions -- (.81) (1.74) (.66) (.34)
------------ ------------ ------------ ------------ ------------
Net asset value, end of period $ 15.31 $ 13.92 $ 13.75 $ 13.39 $ 11.55
============ ============ ============ ============ ============
Total Based on net asset value per share 9.99%+++ 7.32% 15.91% 21.79% 18.89%+++
Investment ============ ============ ============ ============ ============
Return:**
Ratios to Expenses, net of reimbursement 2.47%* 2.55% 2.72% 3.11% 3.29%
Average Net ============ ============ ============ ============ ============
Assets: Expenses 2.47%* 2.55% 2.72% 3.11% 3.39%
============ ============ ============ ============ ============
Investment loss--net (.16%)* (.35%) (.60%) (1.15%) (.61%)
============ ============ ============ ============ ============
Supplemental Net assets, end of period (in
Data: thousands) $ 67,656 $ 62,419 $ 48,073 $ 34,828 $ 20,989
============ ============ ============ ============ ============
Portfolio turnover 18.28% 40.10% 68.75% 80.60% 51.37%
============ ============ ============ ============ ============
<CAPTION>
Fundamental Value Portfolio++++
Class C
The following per share data and ratios have been derived For the Six
from information provided in the financial statements. Months Ended
July 31, For the Year Ended January 31,
Increase (Decrease) in Net Asset Value: 1999 1999 1998 1997 1996++
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 13.91 $ 13.75 $ 13.39 $ 11.55 $ 10.00
Operating ------------ ------------ ------------ ------------ ------------
Performance: Investment loss--net (.01) (.06) (.09) (.15) (.09)
Realized and unrealized gain on
investments--net 1.40 1.03 2.19 2.66 1.98
------------ ------------ ------------ ------------ ------------
Total from investment operations 1.39 .97 2.10 2.51 1.89
------------ ------------ ------------ ------------ ------------
Less distributions:
Realized gain on investments--net -- (.81) (1.74) (.67) (.20)
In excess of realized gain on
investments--net -- -- -- -- (.11)
Return of capital--net -- -- -- -- (.03)
------------ ------------ ------------ ------------ ------------
Total distributions -- (.81) (1.74) (.67) (.34)
------------ ------------ ------------ ------------ ------------
Net asset value, end of period $ 15.30 $ 13.91 $ 13.75 $ 13.39 $ 11.55
============ ============ ============ ============ ============
Total Based on net asset value per share 9.99%+++ 7.23% 15.93% 21.82% 18.89%+++
Investment ============ ============ ============ ============ ============
Return:**
Ratios to Expenses, net of reimbursement 2.50%* 2.58% 2.75% 3.15% 3.38%
Average Net ============ ============ ============ ============ ============
Assets: Expenses 2.50%* 2.58% 2.75% 3.15% 3.46%
============ ============ ============ ============ ============
Investment loss--net (.20%)* (.39%) (.63%) (1.19%) (.75%)
============ ============ ============ ============ ============
Supplemental Net assets, end of period (in
Data: thousands) $ 35,480 $ 31,188 $ 22,896 $ 15,022 $ 7,990
============ ============ ============ ============ ============
Portfolio turnover 18.28% 40.10% 68.75% 80.60% 51.37%
============ ============ ============ ============ ============
<CAPTION>
Fundamental Value Portfolio++++
Class D
The following per share data and ratios have been derived For the Six
from information provided in the financial statements. Months Ended
July 31, For the Year Ended January 31,
Increase (Decrease) in Net Asset Value: 1999 1999 1998 1997 1996++
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 14.13 $ 13.94 $ 13.54 $ 11.65 $ 10.00
Operating ------------ ------------ ------------ ------------ ------------
Performance: Investment income (loss)--net .05 .07 .03 (.04) .03
Realized and unrealized gain on
investments--net 1.43 1.04 2.22 2.68 1.96
------------ ------------ ------------ ------------ ------------
Total from investment operations 1.48 1.11 2.25 2.64 1.99
------------ ------------ ------------ ------------ ------------
Less distributions:
Realized gain on investments--net -- (.92) (1.85) (.75) (.20)
In excess of realized gain on
investments--net -- -- -- -- (.11)
Return of capital--net -- -- -- -- (.03)
------------ ------------ ------------ ------------ ------------
Total distributions -- (.92) (1.85) (.75) (.34)
------------ ------------ ------------ ------------ ------------
Net asset value, end of period $ 15.61 $ 14.13 $ 13.94 $ 13.54 $ 11.65
============ ============ ============ ============ ============
Total Based on net asset value per share 10.47%+++ 8.19% 16.89% 22.82% 19.90%+++
Investment ============ ============ ============ ============ ============
Return:**
Ratios to Expenses, net of reimbursement 1.63%* 1.70% 1.89% 2.27% 2.45%
Average Net ============ ============ ============ ============ ============
Assets: Expenses 1.63%* 1.70% 1.89% 2.27% 2.56%
============ ============ ============ ============ ============
Investment income (loss)--net .68%* .50% .23% (.31%) .24%
============ ============ ============ ============ ============
Supplemental Net assets, end of period (in
Data: thousands) $ 6,903 $ 6,236 $ 5,314 $ 4,180 $ 2,471
============ ============ ============ ============ ============
Portfolio turnover 18.28% 40.10% 68.75% 80.60% 51.37%
============ ============ ============ ============ ============
<FN>
*Annualized.
**Total investment returns exclude the effects of sales charges.
++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., July 31, 1999
<TABLE>
FINANCIAL HIGHLIGHTS (continued)
<CAPTION>
Global Opportunity Portfolio++++
Class A
The following per share data and ratios have been derived For the Six
from information provided in the financial statements. Months Ended
July 31, For the Year Ended January 31,
Increase (Decrease) in Net Asset Value: 1999 1999 1998 1997 1996++
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 12.46 $ 11.40 $ 11.93 $ 10.82 $ 10.00
Operating ------------ ------------ ------------ ------------ ------------
Performance: Investment income--net .05 .16 .16 .15 .34
Realized and unrealized gain on
investments and foreign
currency transactions--net .30 .94 .69 1.21 .77
------------ ------------ ------------ ------------ ------------
Total from investment operations .35 1.10 .85 1.36 1.11
------------ ------------ ------------ ------------ ------------
Less dividends and distributions:
Investment income--net -- -- (.05) -- (.20)
In excess of investment income--net -- -- (.20) (.13) (.06)
Realized gain on investments--net -- -- (.99) (.12) --
In excess of realized gain on
investments--net -- (.04) (.14) -- (.03)
------------ ------------ ------------ ------------ ------------
Total dividends and distributions -- (.04) (1.38) (.25) (.29)
------------ ------------ ------------ ------------ ------------
Net asset value, end of period $ 12.81 $ 12.46 $ 11.40 $ 11.93 $ 10.82
============ ============ ============ ============ ============
Total Based on net asset value per share 2.81%+++ 9.63% 7.27% 12.68% 11.15%+++
Investment ============ ============ ============ ============ ============
Return:**
Ratios to Expenses, net of reimbursement 1.71%* 1.72% 1.87% 2.47% 2.01%
Average Net ============ ============ ============ ============ ============
Assets: Expenses 1.71%* 1.72% 1.87% 2.90% 2.32%
============ ============ ============ ============ ============
Investment income--net .85%* 1.37% 1.28% 1.83% 2.92%
============ ============ ============ ============ ============
Supplemental Net assets, end of period (in thousands) $ 189 $ 193 $ 167 $ 129 $ 3,025
Data: ============ ============ ============ ============ ============
Portfolio turnover 55.21% 134.89% 99.11% 125.68% 83.14%
============ ============ ============ ============ ============
<CAPTION>
Global Opportunity Portfolio++++
Class B
The following per share data and ratios have been derived For the Six
from information provided in the financial statements. Months Ended
July 31, For the Year Ended January 31,
Increase (Decrease) in Net Asset Value: 1999 1999 1998 1997 1996++
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 12.23 $ 11.30 $ 11.86 $ 10.76 $ 10.00
Operating ------------ ------------ ------------ ------------ ------------
Performance: Investment income (loss)--net (.01) .03 .02 (.04) .13
Realized and unrealized gain on
investments and foreign currency
transactions--net .28 .93 .68 1.29 .85
------------ ------------ ------------ ------------ ------------
Total from investment operations .27 .96 .70 1.25 .98
------------ ------------ ------------ ------------ ------------
Less dividends and distributions:
Investment income--net -- -- (.02) -- (.15)
In excess of investment income--net -- -- (.11) (.03) (.04)
Realized gain on investments--net -- -- (.99) (.12) --
In excess of realized gain on
investments--net -- (.03) (.14) -- (.03)
------------ ------------ ------------ ------------ ------------
Total dividends and distributions -- (.03) (1.26) (.15) (.22)
------------ ------------ ------------ ------------ ------------
Net asset value, end of period $ 12.50 $ 12.23 $ 11.30 $ 11.86 $ 10.76
============ ============ ============ ============ ============
Total Based on net asset value per share 2.21%+++ 8.48% 5.97% 11.67% 9.89%+++
Investment ============ ============ ============ ============ ============
Return:**
Ratios to Expenses, net of reimbursement 2.81%* 2.82% 2.96% 3.76% 3.50%
Average Net ============ ============ ============ ============ ============
Assets: Expenses 2.81%* 2.82% 2.96% 4.01% 3.61%
============ ============ ============ ============ ============
Investment income (loss)--net (.25%)* .26% .18% (.39%) 1.20%
============ ============ ============ ============ ============
Supplemental Net assets, end of period (in
Data: thousands) $ 40,149 $ 44,455 $ 40,687 $ 30,469 $ 16,117
============ ============ ============ ============ ============
Portfolio turnover 55.21% 134.89% 99.11% 125.68% 83.14%
============ ============ ============ ============ ============
<CAPTION>
Global Opportunity Portfolio++++
Class C
The following per share data and ratios have been derived For the Six
from information provided in the financial statements. Months Ended
July 31, For the Year Ended January 31,
Increase (Decrease) in Net Asset Value: 1999 1999 1998 1997 1996++
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 12.20 $ 11.28 $ 11.84 $ 10.75 $ 10.00
Operating ------------ ------------ ------------ ------------ ------------
Performance: Investment income (loss)--net (.02) .02 .02 (.05) .12
Realized and unrealized gain on
investments and foreign currency
transactions--net .29 .93 .68 1.29 .85
------------ ------------ ------------ ------------ ------------
Total from investment operations .27 .95 .70 1.24 .97
------------ ------------ ------------ ------------ ------------
Less dividends and distributions:
Investment income--net -- -- (.02) -- (.15)
In excess of investment income--net -- -- (.11) (.03) (.04)
Realized gain on investments--net -- -- (.99) (.12) --
In excess of realized gain on
investments--net -- (.03) (.14) -- (.03)
------------ ------------ ------------ ------------ ------------
Total dividends and distributions -- (.03) (1.26) (.15) (.22)
------------ ------------ ------------ ------------ ------------
Net asset value, end of period $ 12.47 $ 12.20 $ 11.28 $ 11.84 $ 10.75
============ ============ ============ ============ ============
Total Based on net asset value per share 2.21%+++ 8.40% 5.99% 11.61% 9.81%+++
Investment ============ ============ ============ ============ ============
Return:**
Ratios to Expenses, net of reimbursement 2.86%* 2.87% 3.00% 3.81% 3.58%
Average Net ============ ============ ============ ============ ============
Assets: Expenses 2.86%* 2.87% 3.00% 4.06% 3.65%
============ ============ ============ ============ ============
Investment income (loss)--net (.30%)* .20% .13% (.46%) 1.07%
============ ============ ============ ============ ============
Supplemental Net assets, end of period (in
Data: thousands) $ 17,591 $ 18,342 $ 15,951 $ 10,659 $ 4,770
============ ============ ============ ============ ============
Portfolio turnover 55.21% 134.89% 99.11% 125.68% 83.14%
============ ============ ============ ============ ============
<FN>
*Annualized.
**Total investment returns exclude the effects of sales charges.
++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., July 31, 1999
<TABLE>
FINANCIAL HIGHLIGHTS (continued)
<CAPTION>
Global Opportunity Portfolio++++
Class D
The following per share data and ratios have been derived For the Six
from information provided in the financial statements. Months Ended
July 31, For the Year Ended January 31,
Increase (Decrease) in Net Asset Value: 1999 1999 1998 1997 1996+++++
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 12.42 $ 11.39 $ 11.92 $ 10.80 $ 10.00
Operating ------------ ------------ ------------ ------------ ------------
Performance: Investment income--net .04 .13 .13 .05 .22
Realized and unrealized gain on
investments and foreign
currency transactions--net .29 .94 .70 1.29 .85
------------ ------------ ------------ ------------ ------------
Total from investment operations .33 1.07 .83 1.34 1.07
------------ ------------ ------------ ------------ ------------
Less dividends and distributions:
Investment income--net -- -- (.04) -- (.18)
In excess of investment income--net -- -- (.19) (.10) (.06)
Realized gain on investments--net -- -- (.99) (.12) --
In excess of realized gain on
investments--net -- (.04) (.14) -- (.03)
------------ ------------ ------------ ------------ ------------
Total dividends and distributions -- (.04) (1.36) (.22) (.27)
------------ ------------ ------------ ------------ ------------
Net asset value, end of period $ 12.75 $ 12.42 $ 11.39 $ 11.92 $ 10.80
============ ============ ============ ============ ============
Total Based on net asset value per share 2.66%+++ 9.35% 7.02% 12.56% 10.80%+++
Investment ============ ============ ============ ============ ============
Return:**
Ratios to Expenses, net of reimbursement 1.96%* 1.97% 2.12% 2.91% 2.67%
Average Net ============ ============ ============ ============ ============
Assets: Expenses 1.96%* 1.97% 2.12% 3.17% 2.77%
============ ============ ============ ============ ============
Investment income--net .60%* 1.11% 1.03% .48% 2.00%
============ ============ ============ ============ ============
Supplemental Net assets, end of period (in thousands) $ 3,035 $ 3,375 $ 3,149 $ 2,596 $ 1,513
Data: ============ ============ ============ ============ ============
Portfolio turnover 55.21% 134.89% 99.11% 125.68% 83.14%
============ ============ ============ ============ ============
<CAPTION>
Growth Opportunity Portfolio++++
Class A
The following per share data and ratios have been derived For the Six For the Period
from information provided in the financial statements. Months Ended For the Year Feb. 2, 1996++
July 31, Ended January 31, to Jan. 31,
Increase (Decrease) in Net Asset Value: 1999 1999 1998 1997
<S> <S> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 18.53 $ 13.42 $ 11.79 $ 10.00
Operating ------------ ------------ ------------ ------------
Performance: Investment income (loss)--net .02 (.06) (.07) .03
Realized and unrealized gain on
investments--net .16 5.63 2.83 1.76
------------ ------------ ------------ ------------
Total from investment operations .18 5.57 2.76 1.79
------------ ------------ ------------ ------------
Less distributions from realized gain on
investments--net -- (.46) (1.13) --
------------ ------------ ------------ ------------
Net asset value, end of period $ 18.71 $ 18.53 $ 13.42 $ 11.79
============ ============ ============ ============
Total Based on net asset value per share .97%+++ 42.02% 23.52% 17.90%+++
Investment ============ ============ ============ ============
Return:**
Ratios to Expenses, net of reimbursement 1.28%* 1.56% 1.98% 2.44%*
Average Net ============ ============ ============ ============
Assets: Expenses 1.28%* 1.56% 1.98% 3.08%*
============ ============ ============ ============
Investment income (loss)--net .21%* (.39%) (.55%) .23%*
============ ============ ============ ============
Supplemental Net assets, end of period (in thousands) $ 731 $ 582 $ 207 $ 58
Data: ============ ============ ============ ============
Portfolio turnover 19.40% 40.59% 60.24% 51.63%
============ ============ ============ ============
<CAPTION>
Growth Opportunity Portfolio++++
Class B
The following per share data and ratios have been derived For the Six For the Period
from information provided in the financial statements. Months Ended For the Year Feb. 2, 1996++
July 31, Ended January 31, to Jan. 31,
Increase (Decrease) in Net Asset Value: 1999 1999 1998 1997
<S> <S> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 18.26 $ 13.27 $ 11.68 $ 10.00
Operating ------------ ------------ ------------ ------------
Performance: Investment loss--net (.08) (.23) (.22) (.21)
Realized and unrealized gain on
investments--net .16 5.54 2.80 1.89
------------ ------------ ------------ ------------
Total from investment operations .08 5.31 2.58 1.68
------------ ------------ ------------ ------------
Less distributions from realized gain on
investments--net -- (.32) (.99) --
------------ ------------ ------------ ------------
Net asset value, end of period $ 18.34 $ 18.26 $ 13.27 $ 11.68
============ ============ ============ ============
Total Based on net asset value per share .44%+++ 40.41% 22.16% 16.80%+++
Investment ============ ============ ============ ============
Return:**
Ratios to Expenses, net of reimbursement 2.37%* 2.66% 3.09% 3.84%*
Average Net ============ ============ ============ ============
Assets: Expenses 2.37%* 2.66% 3.09% 4.00%*
============ ============ ============ ============
Investment loss--net (.87%)* (1.50%) (1.66%) (1.93%)*
============ ============ ============ ============
Supplemental Net assets, end of period (in thousands) $ 88,202 $ 69,601 $ 25,752 $ 9,816
Data: ============ ============ ============ ============
Portfolio turnover 19.40% 40.59% 60.24% 51.63%
============ ============ ============ ============
<FN>
*Annualized.
**Total investment returns exclude the effects of sales charges.
++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., July 31, 1999
<TABLE>
FINANCIAL HIGHLIGHTS (continued)
<CAPTION>
Growth Opportunity Portfolio++++
Class C
The following per share data and ratios have been derived For the Six For the Period
from information provided in the financial statements. Months Ended For the Year Feb. 2, 1996++
July 31, Ended January 31, to Jan. 31,
Increase (Decrease) in Net Asset Value: 1999 1999 1998 1997
<S> <S> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 18.24 $ 13.26 $ 11.67 $ 10.00
Operating ------------ ------------ ------------ ------------
Performance: Investment loss--net (.08) (.24) (.23) (.22)
Realized and unrealized gain on investments
and foreign currency transactions--net .15 5.55 2.81 1.89
------------ ------------ ------------ ------------
Total from investment operations .07 5.31 2.58 1.67
------------ ------------ ------------ ------------
Less distributions from realized gain on
investments--net -- (.33) (.99) --
------------ ------------ ------------ ------------
Net asset value, end of period $ 18.31 $ 18.24 $ 13.26 $ 11.67
============ ============ ============ ============
Total Based on net asset value per share .38%+++ 40.39% 22.17% 16.70%+++
Investment ============ ============ ============ ============
Return:**
Ratios to Expenses, net of reimbursement 2.40%* 2.71% 3.14% 3.88%*
Average Net ============ ============ ============ ============
Assets: Expenses 2.40%* 2.71% 3.14% 4.05%*
============ ============ ============ ============
Investment loss--net (.90%)* (1.55%) (1.71%) (1.98%)*
============ ============ ============ ============
Supplemental Net assets, end of period (in thousands) $ 54,107 $ 40,710 $ 13,059 $ 4,649
Data: ============ ============ ============ ============
Portfolio turnover 19.40% 40.59% 60.24% 51.63%
============ ============ ============ ============
<CAPTION>
Growth Opportunity Portfolio++++
Class D
The following per share data and ratios have been derived For the Six For the Period
from information provided in the financial statements. Months Ended For the Year Feb. 2, 1996++
July 31, Ended January 31, to Jan. 31,
Increase (Decrease) in Net Asset Value: 1999 1999 1998 1997
<S> <S> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 18.51 $ 13.42 $ 11.78 $ 10.00
Operating ------------ ------------ ------------ ------------
Performance: Investment loss--net --++++++++ (.10) (.11) (.11)
Realized and unrealized gain on investments--net .15 5.62 2.84 1.89
------------ ------------ ------------ ------------
Total from investment operations .15 5.52 2.73 1.78
------------ ------------ ------------ ------------
Less distributions from realized gain on
investments--net -- (.43) (1.09) --
------------ ------------ ------------ ------------
Net asset value, end of period $ 18.66 $ 18.51 $ 13.42 $ 11.78
============ ============ ============ ============
Total Based on net asset value per share .81%+++ 41.59% 23.30% 17.80%+++
Investment ============ ============ ============ ============
Return:**
Ratios to Expenses, net of reimbursement 1.53%* 1.80% 2.23% 2.94%*
Average Net ============ ============ ============ ============
Assets: Expenses 1.53%* 1.80% 2.23% 3.13%*
============ ============ ============ ============
Investment loss--net (.02%)* (.64%) (.80%) (1.00%)*
============ ============ ============ ============
Supplemental Net assets, end of period (in thousands) $ 5,596 $ 3,700 $ 1,612 $ 819
Data: ============ ============ ============ ============
Portfolio turnover 19.40% 40.59% 60.24% 51.63%
============ ============ ============ ============
<CAPTION>
Quality Bond Portfolio
Class A
The following per share data and ratios have been derived For the Six
from information provided in the financial statements. Months Ended
July 31, For the Year Ended January 31,
Increase (Decrease) in Net Asset Value: 1999 1999 1998 1997 1996+++++
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 10.21 $ 10.10 $ 9.79 $ 10.27 $ 10.00
Operating ------------ ------------ ------------ ------------ ------------
Performance: Investment income--net .34 .66 .69 .68 .62
Realized and unrealized gain (loss)
on investments--net (.71) .18 .31 (.44) .27
------------ ------------ ------------ ------------ ------------
Total from investment operations (.37) .84 1.00 .24 .89
------------ ------------ ------------ ------------ ------------
Less dividends and distributions:
Investment income--net (.34) (.66) (.69) (.68) (.62)
Realized gain on investments--net -- (.07) -- (.04) --
------------ ------------ ------------ ------------ ------------
Total dividends and distributions (.34) (.73) (.69) (.72) (.62)
------------ ------------ ------------ ------------ ------------
Net asset value, end of period $ 9.50 $ 10.21 $ 10.10 $ 9.79 $ 10.27
============ ============ ============ ============ ============
Total Based on net asset value per share (3.70%)+++ 8.57% 10.59% 2.51% 9.26%+++
Investment ============ ============ ============ ============ ============
Return:**
Ratios to Expenses, net of reimbursement 0.00%* 0.00% 0.00% 0.00% 0.00%
Average Net ============ ============ ============ ============ ============
Assets: Expenses 1.65%* 2.00% 2.62% 3.23% 2.60%
============ ============ ============ ============ ============
Investment income--net 6.92%* 6.56% 7.01% 6.85% 6.22%
============ ============ ============ ============ ============
Supplemental Net assets, end of period (in
Data: thousands) $ 114 $ 84 $ 1,214 $ 2,254 $ 2,196
============ ============ ============ ============ ============
Portfolio turnover 61.81% 123.80% 114.61% 91.10% 86.68%
============ ============ ============ ============ ============
<FN>
*Annualized.
**Total investment returns exclude the effects of sales charges.
++Commencement of operations.
++++Based on average shares outstanding.
+++Aggregate total investment return.
+++++The Program commenced operations on February 1, 1995.
++++++++Amount is less than $.01 per share.
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Asset Builder Program, Inc., July 31, 1999
<TABLE>
FINANCIAL HIGHLIGHTS (continued)
<CAPTION>
Quality Bond Portfolio
Class B
The following per share data and ratios have been derived For the Six
from information provided in the financial statements. Months Ended
July 31, For the Year Ended January 31,
Increase (Decrease) in Net Asset Value: 1999 1999 1998 1997 1996++
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 10.21 $ 10.09 $ 9.79 $ 10.27 $ 10.00
Operating ------------ ------------ ------------ ------------ ------------
Performance: Investment income--net .30 .58 .60 .59 .54
Realized and unrealized gain (loss)
on investments--net (.71) .19 .30 (.44) .27
------------ ------------ ------------ ------------ ------------
Total from investment operations (.41) .77 .90 .15 .81
------------ ------------ ------------ ------------ ------------
Less dividends and distributions:
Investment income--net (.30) (.58) (.60) (.59) (.54)
Realized gain on investments--net -- (.07) -- (.04) --
------------ ------------ ------------ ------------ ------------
Total dividends and distributions (.30) (.65) (.60) (.63) (.54)
------------ ------------ ------------ ------------ ------------
Net asset value, end of period $ 9.50 $ 10.21 $ 10.09 $ 9.79 $ 10.27
------------ ------------ ------------ ------------ ------------
Total Based on net asset value per share (4.06%)+++ 7.88% 9.55% 1.62% 8.35%+++
Investment ============ ============ ============ ============ ============
Return:**
Ratios to Expenses, net of reimbursement .75%* .75% .75% .78% .79%
Average Net ============ ============ ============ ============ ============
Assets: Expenses 2.47%* 2.71% 3.51% 4.08% 3.31%
============ ============ ============ ============ ============
Investment income--net 6.14%* 5.74% 6.14% 6.00% 5.52%
============ ============ ============ ============ ============
Supplemental Net assets, end of period
Data: (in thousands) $ 11,791 $ 11,874 $ 6,095 $ 4,824 $ 3,049
============ ============ ============ ============ ============
Portfolio turnover 61.81% 123.80% 114.61% 91.10% 86.68%
============ ============ ============ ============ ============
<CAPTION>
Quality Bond Portfolio
Class C
The following per share data and ratios have been derived For the Six
from information provided in the financial statements. Months Ended
July 31, For the Year Ended January 31,
Increase (Decrease) in Net Asset Value: 1999 1999 1998 1997 1996++
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 10.21 $ 10.09 $ 9.79 $ 10.27 $ 10.00
Operating ------------ ------------ ------------ ------------ ------------
Performance: Investment income--net .30 .58 .60 .58 .53
Realized and unrealized gain (loss)
on investments--net (.71) .19 .30 (.44) .27
------------ ------------ ------------ ------------ ------------
Total from investment operations (.41) .77 .90 .14 .80
------------ ------------ ------------ ------------ ------------
Less dividends and distributions:
Investment income--net (.30) (.58) (.60) (.58) (.53)
Realized gain on investments--net -- (.07) -- (.04) --
------------ ------------ ------------ ------------ ------------
Total dividends and distributions (.30) (.65) (.60) (.62) (.53)
------------ ------------ ------------ ------------ ------------
Net asset value, end of period $ 9.50 $ 10.21 $ 10.09 $ 9.79 $ 10.27
============ ============ ============ ============ ============
Total Based on net asset value per share (4.08%)+++ 7.83% 9.46% 1.55% 8.27%+++
Investment ============ ============ ============ ============ ============
Return:**
Ratios to Expenses, net of reimbursement .80%* .80% .80% .85% .87%
Average Net ============ ============ ============ ============ ============
Assets: Expenses 2.59%* 2.82% 3.60% 4.15% 3.44%
============ ============ ============ ============ ============
Investment income--net 6.09%* 5.69% 6.05% 5.93% 5.46%
============ ============ ============ ============ ============
Supplemental Net assets, end of period (in
Data: thousands) $ 4,715 $ 4,587 $ 2,814 $ 1,885 $ 1,123
============ ============ ============ ============ ============
Portfolio turnover 61.81% 123.80% 114.61% 91.10% 86.68%
============ ============ ============ ============ ============
<CAPTION>
Quality Bond Portfolio
Class D
The following per share data and ratios have been derived For the Six
from information provided in the financial statements. Months Ended
July 31, For the Year Ended January 31,
Increase (Decrease) in Net Asset Value: 1999 1999 1998 1997 1996++
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 10.21 $ 10.09 $ 9.79 $ 10.27 $ 10.00
Operating ------------ ------------ ------------ ------------ ------------
Performance: Investment income--net .32 .63 .66 .65 .60
Realized and unrealized gain (loss)
on investments--net (.71) .19 .30 (.44) .27
------------ ------------ ------------ ------------ ------------
Total from investment operations (.39) .82 .96 .21 .87
------------ ------------ ------------ ------------ ------------
Less dividends and distributions:
Investment income--net (.32) (.63) (.66) (.65) (.60)
Realized gain on investments--net -- (.07) -- (.04) --
------------ ------------ ------------ ------------ ------------
Total dividends and distributions (.32) (.70) (.66) (.69) (.60)
------------ ------------ ------------ ------------ ------------
Net asset value, end of period $ 9.50 $ 10.21 $ 10.09 $ 9.79 $ 10.27
============ ============ ============ ============ ============
Total Based on net asset value per share (3.82%)+++ 8.41% 10.21% 2.25% 8.99%+++
Investment ============ ============ ============ ============ ============
Return:**
Ratios to Expenses, net of reimbursement .25%* .25% .25% .16% .19%
Average Net ============ ============ ============ ============ ============
Assets: Expenses 1.89%* 2.08% 2.90% 3.47% 2.70%
============ ============ ============ ============ ============
Investment income--net 6.63%* 6.21% 6.75% 6.62% 6.11%
============ ============ ============ ============ ============
Supplemental Net assets, end of period (in
Data: thousands) $ 1,384 $ 1,583 $ 609 $ 452 $ 221
============ ============ ============ ============ ============
Portfolio turnover 61.81% 123.80% 114.61% 91.10% 86.68%
============ ============ ============ ============ ============
<FN>
*Annualized.
**Total investment returns exclude the effects of sales charges.
++The Program commenced operations on February 1, 1995.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Asset Builder Program, Inc., July 31, 1999
<TABLE>
FINANCIAL HIGHLIGHTS (continued)
<CAPTION>
US Government Securities Portfolio
Class A
The following per share data and ratios have been derived For the Six
from information provided in the financial statements. Months Ended
July 31, For the Year Ended January 31,
Increase (Decrease) in Net Asset Value: 1999 1999 1998 1997 1996++
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 10.52 $ 10.48 $ 10.20 $ 10.48 $ 10.00
Operating ------------ ------------ ------------ ------------ ------------
Performance: Investment income--net .32 .64 .69 .69 .76
Realized and unrealized gain (loss)
on investments--net (.47) .21 .35 (.21) .74
------------ ------------ ------------ ------------ ------------
Total from investment operations (.15) .85 1.04 .48 1.50
------------ ------------ ------------ ------------ ------------
Less dividends and distributions:
Investment income--net (.32) (.64) (.69) (.69) (.76)
Realized gain on investments--net -- (.17) (.07) (.07) (.26)
In excess of realized gain on
investments--net -- --++++ -- -- --
------------ ------------ ------------ ------------ ------------
Total dividends and distributions (.32) (.81) (.76) (.76) (1.02)
------------ ------------ ------------ ------------ ------------
Net asset value, end of period $ 10.05 $ 10.52 $ 10.48 $ 10.20 $ 10.48
============ ============ ============ ============ ============
Total Based on net asset value per share (1.48%)+++ 8.39% 10.66% 4.76% 15.47%+++
Investment ============ ============ ============ ============ ============
Return:**
Ratios to Expenses, net of reimbursement .00%* .00% .00% .00% .00%
Average Net ============ ============ ============ ============ ============
Assets: Expenses 1.33%* 1.73% 2.00% 2.92% 2.54%
============ ============ ============ ============ ============
Investment income--net 6.16%* 6.13% 6.80% 6.69% 7.30%
============ ============ ============ ============ ============
Supplemental Net assets, end of period (in
Data: thousands) $ 269 $ 1,278 $ 3,233 $ 4,486 $ 5,463
============ ============ ============ ============ ============
Portfolio turnover 78.46% 310.91% 361.31% 27.32% 113.05%
============ ============ ============ ============ ============
<CAPTION>
US Government Securities Portfolio
Class B
The following per share data and ratios have been derived For the Six
from information provided in the financial statements. Months Ended
July 31, For the Year Ended January 31,
Increase (Decrease) in Net Asset Value: 1999 1999 1998 1997 1996++
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 10.51 $ 10.48 $ 10.20 $ 10.48 $ 10.00
Operating ------------ ------------ ------------ ------------ ------------
Performance: Investment income--net .28 .56 .61 .60 .68
Realized and unrealized gain (loss)
on investments--net (.46) .20 .35 (.21) .74
------------ ------------ ------------ ------------ ------------
Total from investment operations (.18) .76 .96 .39 1.42
------------ ------------ ------------ ------------ ------------
Less dividends and distributions:
Investment income--net (.28) (.56) (.61) (.60) (.68)
Realized gain on investments--net -- (.17) (.07) (.07) (.26)
In excess of realized gain on
investments--net -- --++++ -- -- --
------------ ------------ ------------ ------------ ------------
Total dividends and distributions (.28) (.73) (.68) (.67) (.94)
------------ ------------ ------------ ------------ ------------
Net asset value, end of period $ 10.05 $ 10.51 $ 10.48 $ 10.20 $ 10.48
============ ============ ============ ============ ============
Total Based on net asset value per share (1.75%)+++ 7.48% 9.76% 3.90% 14.53%+++
Investment ============ ============ ============ ============ ============
Return:**
Ratios to Expenses, net of reimbursement .75%* .75% .75% .78% .81%
Average Net ============ ============ ============ ============ ============
Assets: Expenses 2.16%* 2.34% 2.82% 3.72% 3.35%
============ ============ ============ ============ ============
Investment income--net 5.43%* 5.26% 5.94% 5.85% 6.28%
============ ============ ============ ============ ============
Supplemental Net assets, end of period (in
Data: thousands) $ 14,349 $ 14,817 $ 6,627 $ 4,514 $ 3,043
============ ============ ============ ============ ============
Portfolio turnover 78.46% 310.91% 361.31% 27.32% 113.05%
============ ============ ============ ============ ============
<FN>
*Annualized.
**Total investment returns exclude the effects of sales charges.
++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., July 31, 1999
<TABLE>
FINANCIAL HIGHLIGHTS (concluded)
<CAPTION>
US Government Securities Portfolio
Class C
The following per share data and ratios have been derived For the Six
from information provided in the financial statements. Months Ended
July 31, For the Year Ended January 31,
Increase (Decrease) in Net Asset Value: 1999 1999 1998 1997 1996++
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 10.51 $ 10.48 $ 10.19 $ 10.47 $ 10.00
Operating ------------ ------------ ------------ ------------ ------------
Performance: Investment income--net .28 .55 .60 .59 .67
Realized and unrealized gain (loss) on
investments--net (.46) .20 .36 (.21) .73
------------ ------------ ------------ ------------ ------------
Total from investment operations (.18) .75 .96 .38 1.40
------------ ------------ ------------ ------------ ------------
Less dividends and distributions:
Investment income--net (.28) (.55) (.60) (.59) (.67)
Realized gain on investments--net -- (.17) (.07) (.07) (.26)
In excess of realized gain on
investments--net -- --++++ -- -- --
------------ ------------ ------------ ------------ ------------
Total dividends and distributions (.28) (.72) (.67) (.66) (.93)
------------ ------------ ------------ ------------ ------------
Net asset value, end of period $ 10.05 $ 10.51 $ 10.48 $ 10.19 $ 10.47
============ ============ ============ ============ ============
Total Based on net asset value per share (1.78%)+++ 7.43% 9.79% 3.83% 14.36%+++
Investment ============ ============ ============ ============ ============
Return:**
Ratios to Expenses, net of reimbursement .80%* .80% .80% .85% .86%
Average Net ============ ============ ============ ============ ============
Assets: Expenses 2.26%* 2.47% 2.90% 3.78% 3.41%
============ ============ ============ ============ ============
Investment income--net 5.38%* 5.21% 5.88% 5.78% 6.21%
============ ============ ============ ============ ============
Supplemental Net assets, end of period (in
Data: thousands) $ 4,029 $ 4,679 $ 2,057 $ 1,757 $ 1,089
============ ============ ============ ============ ============
Portfolio turnover 78.46% 310.91% 361.31% 27.32% 113.05%
============ ============ ============ ============ ============
<CAPTION>
US Government Securities Portfolio
Class D
The following per share data and ratios have been derived For the Six
from information provided in the financial statements. Months Ended
July 31, For the Year Ended January 31,
Increase (Decrease) in Net Asset Value: 1999 1999 1998 1997 1996++
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 10.52 $ 10.48 $ 10.20 $ 10.48 $ 10.00
Operating ------------ ------------ ------------ ------------ ------------
Performance: Investment income--net .30 .61 .67 .66 .74
Realized and unrealized gain (loss)
on investments--net (.46) .21 .35 (.21) .74
------------ ------------ ------------ ------------ ------------
Total from investment operations (.16) .82 1.02 .45 1.48
------------ ------------ ------------ ------------ ------------
Less dividends and distributions:
Investment income--net (.30) (.61) (.67) (.66) (.74)
Realized gain on investments--net -- (.17) (.07) (.07) (.26)
In excess of realized gain on
investments--net -- --++++ -- -- --
------------ ------------ ------------ ------------ ------------
Total dividends and distributions (.30) (.78) (.74) (.73) (1.00)
------------ ------------ ------------ ------------ ------------
Net asset value, end of period $ 10.06 $ 10.52 $ 10.48 $ 10.20 $ 10.48
============ ============ ============ ============ ============
Total Based on net asset value per share (1.50%)+++ 8.12% 10.38% 4.49% 15.13%+++
Investment ============ ============ ============ ============ ============
Return:**
Ratios to Expenses, net of reimbursement .25%* .25% .25% .21% .22%
Average Net ============ ============ ============ ============ ============
Assets: Expenses 1.60%* 1.67% 2.25% 3.14% 2.77%
============ ============ ============ ============ ============
Investment income--net 5.92%* 5.73% 6.53% 6.42% 6.90%
============ ============ ============ ============ ============
Supplemental Net assets, end of period (in
Data: thousands) $ 1,048 $ 1,071 $ 315 $ 313 $ 182
============ ============ ============ ============ ============
Portfolio turnover 78.46% 310.91% 361.31% 27.32% 113.05%
============ ============ ============ ============ ============
<FN>
*Annualized.
**Total investment returns exclude the effects of sales charges.
++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., July 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 separate
portfolios: Fundamental Value Portfolio, Global Opportunity
Portfolio, Growth Opportunity Portfolio, Quality Bond Portfolio and
US Government Securities Portfolio (the "Portfolios"). All of the
Portfolios are classified as diversified 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. These
unaudited financial statements reflect all adjustments which are, in
the opinion of management, necessary to a fair statement of the
results for the interim period presented. All such adjustments are
of a normal recurring nature. The 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 that 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 that 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
financial 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
witholding 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.
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 the "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; .65% for Fundamental Value and Growth Opportunity
Portfolios, .50% for Quality Bond and US Government Securities
Portfolios and .75% for Global Opportunity Portfolio.
For the six months ended July 31, 1999, MLAM had voluntarily waived
management fees and reimbursed each Portfolio for additional
expenses as follows:
Management Additional
Fee Expenses
Quality Bond Portfolio $45,915 $113,262
US Government Securities Portfolio 53,799 98,113
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 .25% .25% .25%
Global Opportunity Portfolio .25 .25 .25
Growth Opportunity Portfolio .25 .25 .25
Quality Bond Portfolio .25 .25 .25
US Government Securities Portfolio .25 .25 .25
Merrill Lynch Asset Builder Program, Inc., July 31, 1999
NOTES TO FINANCIAL STATEMENTS (continued)
Distribution Fees
Class B Class C
Fundamental Value Portfolio .75% .75%
Global Opportunity Portfolio .75 .75
Growth Opportunity Portfolio .75 .75
Quality Bond Portfolio .50 .55
US Government Securities Portfolio .50 .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 six months ended July 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 $ 8 $ 760 $166 $14,110
Global Opportunity Portfolio -- 176 -- 3,659
Growth Opportunity Portfolio 23 1,324 461 25,357
Quality Bond Portfolio -- 97 -- 1,432
US Government Securities
Portfolio -- 57 -- 873
For the six months ended July 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 $84,226 $ 7,400
Global Opportunity Portfolio 66,395 3,829
Growth Opportunity Portfolio 84,273 12,449
Quality Bond Portfolio 13,325 1,593
US Government Securities Portfolio 25,052 4,243
In addition, MLPF&S received $4,620 and $1,884 in commissions on the
execution of portfolio security transactions for the Fundamental
Value and Growth Opportunity Portfolios, respectively, for the six
months ended July 31, 1999.
Financial Data Services, Inc. ("FDS"), a wholly-owned subsidiary of
ML & Co., is the Program's transfer agent.
During the six months ended July 31, 1999, Global Opportunity,
Quality Bond and US Government Securities Portfolios paid Merrill
Lynch Security Pricing Service, an affiliate of MLPF&S, $253, $3,917
and $294, 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 six months ended July 31, 1999 were as follows:
Purchases Sales
Fundamental Value Portfolio $18,014,712 $16,667,441
Global Opportunity Portfolio 33,791,165 42,014,329
Growth Opportunity Portfolio 42,848,876 23,867,355
Quality Bond Portfolio 12,661,562 10,787,620
US Government Securities Portfolio 15,763,795 16,993,373
Net realized gains (losses) for the six months ended July 31, 1999
and net unrealized gains (losses) as of July 31, 1999 were as
follows:
Realized Unrealized
Fundamental Value Portfolio Gains Gains
Long-term investments $4,901,900 $13,330,975
---------- -----------
Total $4,901,900 $13,330,975
========== ===========
Realized Unrealized
Gains Gains
Global Opportunity Portfolio (Losses) (Losses)
Long-term investments $3,923,452 $ 4,730,821
Foreign currency transactions (336,403) (2,150)
Forward foreign exchange contracts 583,625 (3,370)
---------- -----------
Total $4,170,674 $ 4,725,301
========== ===========
Realized Unrealized
Growth Opportunity Portfolio Gains (Losses) Gains
Long-term investments $5,015,479 $22,042,401
Short-term investments (70) --
---------- -----------
Total $5,015,409 $22,042,401
========== ===========
Realized Unrealized
Quality Bond Portfolio Losses Losses
Long-term investments $ (88,903) $ (917,316)
---------- -----------
Total $ (88,903) $ (917,316)
========== ===========
Realized Unrealized
US Government Securities Portfolio Losses Losses
Long-term investments $ (67,897) $ (703,364)
---------- -----------
Total $ (67,897) $ (703,364)
========== ===========
As of July 31, 1999, net unrealized appreciation (depreciation) for
Federal income tax purposes was as follows:
Net
Gross Gross Unrealized
Unrealized Unrealized Appreciation
Appreciation Depreciation (Depreciation)
Fundamental Value
Portfolio $18,511,233 $(5,180,258) $13,330,975
Global Opportunity
Portfolio 7,948,176 (3,217,355) 4,730,821
Growth Opportunity
Portfolio 24,551,861 (2,509,460) 22,042,401
Quality Bond Portfolio 16,469 (933,785) (917,316)
US Government Securities
Portfolio 10,100 (713,464) (703,364)
The aggregate cost of investments at July 31, 1999 for Federal
income tax purposes was $97,744,873 for the Fundamental Value
Portfolio, $56,807,290 for the Global Opportunity Portfolio,
$127,146,747 for the Growth Opportunity Portfolio, $18,604,480 for
the Quality Bond Portfolio, and $20,267,613 for the US Government
Securities Portfolio.
4. Capital Share Transactions:
Net increase (decrease) in net assets derived from capital share
transactions for the six months ended July 31, 1999 and the year
ended January 31, 1999, respectively, were as follows:
For the Six For the
Months Ended Year Ended
July 31, 1999 Jan. 31, 1999
Fundamental Value Portfolio $ 430,360 $23,869,513
Global Opportunity Portfolio (6,693,613) 1,550,635
Growth Opportunity Portfolio 33,575,430 49,407,790
Quality Bond Portfolio 1,194,524 7,232,908
US Government Securities Portfolio (1,818,080) 10,369,240
Transactions in capital shares for each class were as follows:
Fundamental Value Portfolio
Class A Shares for the Six Months Dollar
Ended July 31, 1999 Shares Amount
Shares sold 4,017 $ 60,525
Shares redeemed (2,226) (33,886)
---------- -----------
Net increase 1,791 $ 26,639
========== ===========
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 B Shares for the Six Months Dollar
Ended July 31, 1999 Shares Amount
Shares sold 547,966 $ 8,069,222
Shares redeemed (588,823) (8,561,050)
Automatic conversion of shares (25,514) (384,707)
---------- -----------
Net decrease (66,371) $ (876,535)
========== ===========
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 C Shares for the Six Months Dollar
Ended July 31, 1999 Shares Amount
Shares sold 417,834 $ 6,204,492
Shares redeemed (341,161) (4,970,221)
---------- -----------
Net increase 76,673 $ 1,234,271
========== ===========
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
========== ===========
Merrill Lynch Asset Builder Program, Inc., July 31, 1999
NOTES TO FINANCIAL STATEMENTS (continued)
Fundamental Value Portfolio
Class D Shares for the Six Months Dollar
Ended July 31, 1999 Shares Amount
Shares sold 35,370 $ 536,886
Automatic conversion of shares 25,068 384,707
---------- -----------
Total issued 60,438 921,593
Shares redeemed (59,577) (875,608)
---------- -----------
Net increase 861 $ 45,985
========== ===========
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
========== ===========
Global Opportunity Portfolio
Class A Shares for the Six Months Dollar
Ended July 31, 1999 Shares Amount
Shares sold 1,049 $ 12,970
Shares redeemed (1,785) (22,248)
---------- -----------
Net decrease (736) $ (9,278)
========== ===========
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 B Shares for the Six Months Dollar
Ended July 31, 1999 Shares Amount
Shares sold 224,830 $ 2,732,260
Automatic conversion of shares (13,316) (162,705)
Shares redeemed (635,019) (7,716,748)
---------- -----------
Net decrease (423,505) $ (5,147,193)
========== ===========
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 C Shares for the Six Months Dollar
Ended July 31, 1999 Shares Amount
Shares sold 167,105 $ 2,030,544
Shares redeemed (259,735) (3,152,510)
---------- -----------
Net decrease (92,630) $(1,121,966)
========== ===========
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 D Shares for the Six Months Dollar
Ended July 31, 1999 Shares Amount
Shares sold 10,241 $ 126,558
Automatic conversion of shares 13,093 162,705
---------- -----------
Total issued 23,334 289,263
Shares redeemed (57,039) (704,439)
---------- -----------
Net decrease (33,705) $ (415,176)
========== ===========
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)
========== ===========
Growth Opportunity Portfolio
Class A Shares for the Six Months Dollar
Ended July 31, 1999 Shares Amount
Shares sold 13,262 $ 245,752
Shares redeemed (5,572) (103,625)
---------- -----------
Net increase 7,690 $ 142,127
========== ===========
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 B Shares for the Six Months Dollar
Ended July 31, 1999 Shares Amount
Shares sold 1,348,606 $24,755,182
Automatic conversion of shares (22,898) (422,244)
Shares redeemed (326,624) (6,026,368)
---------- -----------
Net increase 999,084 $18,306,570
========== ===========
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 C Shares for the Six Months Dollar
Ended July 31, 1999 Shares Amount
Shares sold 964,141 $17,695,464
Shares redeemed (241,005) (4,442,608)
---------- -----------
Net increase 723,136 $13,252,856
========== ===========
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 D Shares for the Six Months Dollar
Ended July 31, 1999 Shares Amount
Shares sold 110,166 $ 2,061,723
Automatic conversion of shares 22,542 422,244
---------- -----------
Total issued 132,708 2,483,967
Shares redeemed (32,703) (610,090)
---------- -----------
Net increase 100,005 $ 1,873,877
---------- -----------
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
========== ===========
Quality Bond Portfolio
Class A Shares for the Six Months Dollar
Ended July 31, 1999 Shares Amount
Shares sold 9,960 $ 97,978
Shares issued to shareholders in
reinvestment of dividends 228 2,228
---------- -----------
Total issued 10,188 100,206
Shares redeemed (6,459) (63,916)
---------- -----------
Net increase 3,729 $ 36,290
========== ===========
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)
========== ===========
Merrill Lynch Asset Builder Program, Inc., July 31, 1999
NOTES TO FINANCIAL STATEMENTS (concluded)
Quality Bond Portfolio
Class B Shares for the Six Months Dollar
Ended July 31, 1999 Shares Amount
Shares sold 217,527 $ 2,150,630
Shares issued to shareholders in
reinvestment of dividends 29,811 292,987
---------- -----------
Total issued 247,338 2,443,617
Automatic conversion of shares (226) (2,273)
Shares redeemed (169,402) (1,658,262)
---------- -----------
Net increase 77,710 $ 783,082
========== ===========
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 C Shares for the Six Months Dollar
Ended July 31, 1999 Shares Amount
Shares sold 100,334 $ 992,056
Shares issued to shareholders in
reinvestment of dividends 11,729 115,234
---------- -----------
Total issued 112,063 1,107,290
Shares redeemed (65,216) (640,850)
---------- -----------
Net increase 46,847 $ 466,440
========== ===========
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 D Shares for the Six Months Dollar
Ended July 31, 1999 Shares Amount
Shares sold. 25,753 $ 255,382
Automatic conversion of shares 226 2,273
Shares issued to shareholders in
reinvestment of dividends 4,208 41,475
---------- -----------
Total issued 30,187 299,130
Shares redeemed (39,613) (390,418)
---------- -----------
Net decrease (9,426) $ (91,288)
========== ===========
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
========== ===========
US Government Securities Portfolio
Class A Shares for the Six Months Dollar
Ended July 31, 1999 Shares Amount
Shares sold 13,756 $ 142,440
Shares issued to shareholders in
reinvestment of dividends 2,324 24,051
---------- -----------
Total issued 16,080 166,491
Shares redeemed (110,871) (1,144,829)
---------- -----------
Net decrease (94,791) $ (978,338)
========== ===========
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 B Shares for the Six Months Dollar
Ended July 31, 1999 Shares Amount
Shares sold 378,779 $ 3,914,968
Shares issued to shareholders in
reinvestment of dividends 28,979 298,288
---------- -----------
Total issued 407,758 4,213,256
Automatic conversion of shares (444) (4,633)
Shares redeemed (388,902) (4,006,460)
---------- -----------
Net increase 18,412 $ 202,163
========== ===========
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 C Shares for the Six Months Dollar
Ended July 31, 1999 Shares Amount
Shares sold 111,458 $ 1,152,238
Shares issued to shareholders in
reinvestment of dividends 9,444 97,245
---------- -----------
Total issued 120,902 1,249,483
Shares redeemed (165,027) (1,702,331)
---------- -----------
Net decrease (44,125) $ (452,848)
========== ===========
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 D Shares for the Six Months Dollar
Ended July 31, 1999 Shares Amount
Shares sold 11,501 $ 119,077
Automatic conversion of shares 444 4,633
Shares issued to shareholders in
reinvestment of dividends 3,080 31,841
---------- -----------
Total issued 15,025 155,551
Shares redeemed (72,504) (744,608)
---------- -----------
Net decrease (57,479) $ (589,057)
========== ===========
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
========== ===========
5. Commitments:
At July 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 various foreign currencies with approximate values of
$521,000 and $15,000, respectively.
