MERRILL LYNCH
ASSET BUILDER
PROGRAM, INC.
FUND LOGO
Quarterly Report
October 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., October 31, 1999
DEAR SHAREHOLDER
We are pleased to provide you with this quarterly report for Merrill
Lynch Asset Builder Program, Inc. The Program consists of five
separate diversified portfolios, each with its own investment
objectives.
Complete performance information for all five portfolios can be
found on pages 7-10 of this report to shareholders.
Fundamental Value Portfolio
The quarter ended October 31, 1999 was marked by considerable
volatility. Early in the quarter the market rose as economic
indicators remained bright and inflation quiescent. Third quarter
gross domestic product (GDP) expanded at an above-expectations rate
of 3.8% and the widely watched employment cost index increased a
below-feared rate of 0.8%. Late in the period, the Federal Reserve
Board's adoption of a bias toward tightening monetary policy
generated considerable investor anxiety. Numerous high-profile
earnings shortfalls in the technology, aerospace and defense, retail
and insurance sectors also pressured shares.
Fundamental Value Portfolio's Class A, Class B, Class C and Class D
Shares had total returns of -5.29%, -5.55%, -5.56% and -5.32%,
respectively, for the quarter ended October 31, 1999,
underperforming the total return of +2.90% for the unmanaged
Standard & Poor's (S&P) 500 Index. The Portfolio's lagging returns
reflected the difficult climate for value investing. Indeed, the
unmanaged S&P 500 Barra Value Index declined 1.5% in the October
quarter compared to the unmanaged S&P Barra Growth Index gain of
6.3%. Similarly, the unmanaged Morgan Stanley Cyclical Index
declined 5.7%, while the unmanaged Morgan Stanley Consumer Index
declined a more modest 0.4% for the same three-month period.
Investors generally shunned economically sensitive value equities
and gravitated toward stable growth issues because of the
uncertainty generated by the prospect of rising interest rates.
Looking more specifically at the Portfolio's returns, lagging
sectors included: retail, insurance, aerospace and defense, and
select technology equities, as these sectors encountered earnings
pressures. Pockets of strength for the Portfolio included: copper,
auto, consumer staples and banks. The leading individual gainers
included Asarco Inc. (+66%), Wells Fargo Company (+22.8%), Citigroup
Inc. (+21.7%), 3Com Corporation (+20.2%) and General Motors
Corporation (+15.2%).
During the three-month period ended October 31, 1999, we initiated
five new positions and eliminated nine. New positions included: Ace
Limited, Emerson Electric Co., Sara Lee Corporation, Potash
Corporation of Saskatchewan Inc. and Federated Department Stores,
Inc. Shares of Ace, a global insurance company, have sharply
underperformed the market this year reflecting the difficult
competitive conditions in the property and casualty (p/c) insurance
market. Also pressuring the shares have been concerns regarding two
acquisitions, the recently completed acquisition of CIGNA Corp.'s
p/c operations and the pending acquisition of Capital Re. Although
competitive conditions in the p/c market are likely to remain
difficult in the near term, we believe we are nearing a bottoming
process. The acquisitions are expected to benefit Ace's long-term
results. We purchased Ace 52% below its 52-week high and at a very
modest 6.5 times 2000 estimated earnings per share and at a 17%
discount to book value per share.
Emerson Electric, a manufacturer of a broad range of electronics,
electrical and other products for consumer, commercial and
industrial markets, has been a lackluster stock market performer for
several years. Contributing factors to the poor performance have
been concerns regarding the global economic environment, competitive
pressures for many products, sluggish organic revenue growth and
decelerating earnings-per-share growth. However, we believe trends
are poised to improve for Emerson Electric, and will be led by
increased order activity, a share repurchase program and cost
savings initiatives. Emerson Electric was available at the lowest
relative multiple to the S&P 500 Index in more than 10 years.
Shares of Sara Lee, a diversified non-durable consumer company, were
pressured in 1999 by a packaged meat recall. This negative influence
is expected to diminish as the year progresses, enabling Sara Lee to
report significantly improved results in 2000. The shares were
available 26% below their 1998 high and at a sizable discount
relative to the peer group multiple. We believe this valuation gap
will narrow in the year ahead, coinciding with the improved results.
During the October period, we swapped our position in IMC Global
Inc. for Potash. Both issues were deeply out of favor, but we
believed that Potash was more favorably positioned for an eventual
industry upturn. In our opinion, Potash has a better resource base,
a stronger balance sheet and a more solid management team.
We made significant changes within our retail group holdings. We
eliminated positions in five retailers whose prospects appeared
uninspiring; selling Kmart Corporation, Sears Roebuck & Co., Venator
Group, Inc., Dillard's, Inc. and Toys 'R' Us Co. As a replacement,
we invested in Federated, a retailer that we believe has a promising
future. Federated has a strong core department store business and a
solid e-commerce opportunity. Federated was available 28% below its
1999 high and at a very reasonable 11.7 times 2000 estimated
earnings per share. Other Portfolio eliminations in the period
included: Asarco Inc., the subject of a takeover; and Dana Corp.,
PartnerRe Ltd. and Louisiana Pacific, whose outlooks appeared
uninspiring.
Although the environment for value equities has once again proven
challenging, we believe the outlook remains bright. We continue to
seek attractive out-of-favor opportunities with favorable long-term
appreciation potentials. At some point, the market will revisit
these reasonably valued equities. In the meantime, Fundamental Value
Portfolio continued to have attractive valuation characteristics--a
price/earnings multiple 40% below that of the S&P 500 Index and a
price/book ratio 60% under the market benchmark.
Global Opportunity Portfolio
For the quarter ended October 31, 1999, Global Opportunity
Portfolio's Class A, Class B, Class C and Class D Shares had total
returns of +2.81%, +2.64%, +2.57% and +2.75%, respectively. (Fund
results do not reflect sales charges and would be lower if sales
charges were included.) As of October 31, 1999, the asset allocation
for Global Opportunity Portfolio was: foreign stocks, 48% of net
assets; US stocks, 24%; foreign bonds, 18%; US bonds, 6%; and cash
reserves, 4%.
We continued to shift the equity mix in favor of foreign stocks,
which increased from 41% of net assets to 48% during the three
months ended October 31, 1999. However, the regional and sector
allocation among foreign common stocks was not materially altered.
We maintained our overweight commitment to Japanese equities, which
we had established earlier in the year. Within Japan, a balance
continues between export-oriented companies, such as Toyota Motor
Corporation and Fujitsu Limited, and companies dependent on the
domestic economy, as exemplified by Nippon Telegraph & Telephone
Corporation. Europe remains the largest regional commitment.
During the quarter ended October 31, 1999, we continued to emphasize
sectors where above-average earnings growth is projected during the
next several years and valuations appear reasonable. Areas that
fulfill these criteria included: healthcare, telecommunications
service and equipment, and financial services. We also maintained
positions in Canada, in Asian markets outside Japan and in Latin
America through Brazilian equities.
US common stock commitments were further reduced during the October
quarter from 30% of net assets to 24%. Technology remained the
largest single group represented among US equity holdings. Other
areas with significant representation included consumer staples,
healthcare and financial services.
Concern over the possibility of a further short-term interest rate
hike by the Federal Reserve Board led us to reduce the size of our
US bond commitment from 12% of net assets to 6% during the three
months ended October 31, 1999. We also slightly reduced the average
duration of our US fixed-income holdings from 4.7 years to 4.5
years. However, we increased our foreign bond commitment from 14% of
net assets to 18% over the October quarter. We maintained our
positions in German and UK fixed-income securities.
Growth Opportunity Portfolio
For the quarter ended October 31, 1999, Growth Opportunity
Portfolio's Class A, Class B, Class C and Class D Shares had total
returns of +5.13%, +4.85%, +4.86% and +5.09%, respectively, compared
to the +2.90% total return for the unmanaged Standard & Poor's 500
(S&P 500) Index. (Fund results do not reflect sales charges and
would be lower if sales charges were included.) During the October
quarter, we had stock price appreciation for nine of the top ten
equity holdings that significantly exceeded the S&P 500 Index's
return. Also, more than 60% of the individual stock holdings in the
Portfolio at the end of the October quarter experienced stock price
appreciation in excess of the total return for the S&P 500 Index for
the same period. In our opinion, the main reason for the Portfolio's
outperformance in the October quarter has been our continued
strategic shift in the industry structure from banking and financial
services companies to the technology area with a focus on
communications equipment and semiconductor companies.
Merrill Lynch Asset Builder Program, Inc., October 31, 1999
The top five industries in the Portfolio at the end of the October
quarter were communications equipment (13.0% of net assets),
telecommunications (11.7%), computers (7.2%), energy (7.1%), and
electronics (6.5%). The top ten industries represented 68.2% of net
assets at quarter-end. It appeared to us from our research early in
the October quarter that capital spending plans on the part of both
wireline and cellular telecommunications service companies was
starting to accelerate. Consequently, we increased our investment
exposure anticipating an acceleration of earnings growth and
potentially higher rate-of-return on equity for companies ranging
from those specialized in producing the semiconductor chips (such as
Texas Instruments Incorporated and STMicroelectonics) to the major
supplier of large scale communications systems, such as Lucent
Technologies Inc. and Nokia Oyj.
We added several stocks to the Portfolio during the October quarter:
Amazon.com, Inc., ASM Lithography Holding NV, BP Amoco PLC, Covad
Communications Group, Inc., Nokia Oyj, Immunex Corporation, LSI
Logic Corporation, National Semiconductor Corporation, Royal Dutch
Petroleum Company, Toyota Motor Corporation and Xilinx, Inc. Stock
holdings that were eliminated during the quarter included: Abbott
Laboratories, Boston Scientific Corporation, Guidant Corporation,
Aetna Inc., American International Group, Inc., The Hartford
Financial Services Group, Inc., Abercrombie & Fitch Co., Lowe's
Companies, Inc., Staples, Inc., Tommy Hilfiger Corporation, The TJX
Companies, Inc., Albertson's, Inc., The Kroger Co., Safeway Inc.,
ConAgra, Inc., The Gillette Company, International Flavors &
Fragrances Inc., Mattel, Inc., GTE Corporation, Cable & Wireless PLC
(ADR), Banc One Corporation, Kimberly-Clark Corporation, Compaq
Computer Corporation, Dell Computer Corporation, Copper Mountain
Networks, Inc., Unilever NV and Waste Management Inc. The net effect
of these transactions has been to shift the focus of the industry
structure of the Portfolio from banking and financial services,
insurance, household products, specialty retailing and the personal
computer industry toward communications equipment, semiconductors
and energy.
Quality Bond Portfolio
For the three-month period ended October 31, 1999, the fixed-income
markets remained very volatile as interest rates continued to trend
higher. The yield on the US Treasury's 30-year bond, which during
the July quarter had ranged from a low of 5.65% to a high of 6.16%,
varied from 5.85% to 6.38%. The rise in US Treasury yields reflected
investor concerns that the Federal Reserve Board would move to
tighten monetary policy in the face of strong economic growth around
the globe.
The US economy, despite second quarter GDP growth of 1.8%, continues
to move forward at a strong pace, as highlighted by the rebound in
preliminary third quarter GDP to 4.8%. Consumer spending continues
to lead the way, although recent reports such as new house sales,
are beginning to show the effect of higher interest rates. Consumers
continue to benefit from low unemployment rates and the wealth
effect generated from a strong stock market, although lately the
domestic markets have been trading sideways and therefore some gains
have recently been surrendered. Overseas, Asian countries at the
heart of the crises in 1998 continue to recover.
Corporate credit spreads expanded steadily since early May, as a
result of the large increase in corporate debt issuance during this
period. We believe that the rising credit spreads offer investors a
unique opportunity to benefit on a long-term investment horizon from
the current market inefficiencies that have been priced into current
yields. However, during September and October, corporate credit
spreads tightened following a sooner-than-expected drop in new
underwriting activity. Furthermore, some investors began purchasing
investment-grade corporate bonds because of its strong relative
value attributes. We believe that this trend toward tighter
corporate credit spreads will continue throughout the remainder of
the year.
For the three-month period ended October 31, 1999, the Quality Bond
Portfolio had total net returns of +0.95%, +0.87%, +0.86% and
+0.89%, for Class A, Class B, Class C and Class D Shares,
respectively, compared to returns of +1.19% for the unmanaged
benchmark Merrill Lynch Corporate Master Index and +0.75% for the
Lipper A Rated Bond Group Average. For the year-to-date period ended
October 31, 1999, the Portfolio had total net returns of -2.12%,
- -2.52%, -2.56% and -2.23% for Class A, Class B, Class C and Class D
Shares, respectively, compared to returns of -1.67% for the Index
and -2.10% for the Lipper Corporate A Rated Bond Group Average.
Our investment strategy for the Portfolio relative to the benchmark
remained somewhat conservative given the outlook for higher interest
rates and wider credit spreads. Our investment strategy is based
upon our belief that the long-term trend will be toward lower rates
and a flatter yield curve as the economy slows. From a duration
perspective, we continued to maintain a duration that was modestly
short (0.15 years--0.20 years) relative to the Portfolio's
benchmark. In the second quarter of 1999, we raised our expectations
relative to the trading band for the 30-year bond to 5.75%-6.25%.
Initially, our strategy was to bring duration closer to the
benchmark when the yields would climb closer to the high end of the
expected range. By early August, we began to reallocate a portion of
the Portfolio's assets into cash and US Treasury issues, in
preparation for year-end liquidity needs. By September 30, 1999, we
had shifted approximately 10% of the Portfolio's assets into this
sector. Subsequently, we shifted a portion of the Portfolio's cash
position back into high-quality corporate bonds because of our
favorable outlook for this sector. We expect interest rates and
credit spreads to begin a positive trend by late in the fourth
quarter of 1999, with the possibility of significant price
appreciation occurring in the first quarter of 2000.
We remained committed to corporate bond investments with the larger,
more liquid issues. We also emphasized issues with higher coupons.
As part of our liquidity strategy, we have attempted to consolidate
industry holdings into the benchmark issues. Although this comes at
modest yield concessions, we believe this is the prudent course of
action in front of the uncertainties regarding the Year 2000.
Corporate issuance remained very active during the October quarter,
with early investor demand fairly enthusiastic. In fact, the
majority of the new transactions prior to mid-July had been
significantly oversubscribed and well bid for, although the sharp
spike in interest rates caused some of these to be postponed until
later this past summer. During August and September, many of the new
corporate transactions were done at larger-than-anticipated spread
concessions in order to attract investors. At that point, we
believed corporate bonds possessed some very attractive long-term
relative value attributes. As we proceed through the fourth quarter,
we will be in a better position to assess our likely liquidity needs
and redirect additional proceeds back to corporate bonds.
Relative to the benchmark, we continued to maintain an overweighted
position in electric utilities, finance companies, cable and media
entities, retailers, energy-related issuers, airlines and defense
contractors and information technology entities. During the latter
part of the October period, we slightly reduced the Portfolio's
position in real estate investment trusts because of the sector's
strong performance during early 1999. However, the Portfolio still
has an overweighted position relative to the benchmark since we
believe this sector will continue to perform well. We continued to
underweight money center banks and cyclicals. We also had a modest
overweighted position relative to the benchmark in corporate bonds
rated BBB/Baa. We expect to maintain our overweighting in this
sector given the attractive yield spread relationship and the
favorable relative value attributes of that group.
US Government Securities Portfolio
During the October quarter, the Federal Reserve Board had two
opportunities to change monetary policy. At the first meeting in
August, the Federal Funds rate as well as the discount rate were
raised 25 basis points. This widely anticipated tightening of
monetary policy had been previously reflected in intermediate-term
and long-term interest rates. The combination of the built-in
tightening along with the Federal Reserve Board's announcement of
its neutral stance on monetary policy, allowed the financial markets
to initially respond in somewhat of a relief rally. However, it did
not take long for inflationary concerns to unnerve investors and
drive interest rates up again. At the second Federal Open Market
Committee meeting held in early October, the Federal Reserve Board
elected not to raise interest rates again but to adopt a tightening
bias. This news was not well received by the financial markets, and
interest rates rose to two-year highs during the October quarter.
Merrill Lynch Asset Builder Program, Inc., October 31, 1999
The two-year Treasury note, though reaching a high of almost 6%
during the October quarter, ended the period at 5.78%, 17 basis
points higher from where it began. The US Treasury ten-year note
yield, a benchmark for mortgage-backed securities (MBS), reached a
high of almost 6.25% during the quarter before ending at 6.02%, 12
basis points higher from where it began the quarter. The US Treasury
yield curve, as measured by the two-year--ten-year Treasury yield
curve spread, ended flatter for the period. Yet, even with a flatter
Treasury yield curve and increased volatility of interest rates, MBS
significantly outperformed their US Treasury benchmarks for the
quarter and thus far this year.
The US Government Securities Portfolio benefited from being heavily
weighted in MBS. During the October quarter, the Portfolio held 47%
of its assets in 30-year MBS with its two largest investments in
Government National Mortgage Association (GNMA) 7.0% and GNMA 7.5%.
These two securities, which each make up 16% of the Portfolio's net
assets, had returns of 238 basis points and 221 basis points,
respectively, for the quarter. This compares favorably to the ten-
year Treasury note, which returned only 27 basis points for the same
period and has a similar average life. Our 15-year MBS allocation
was another 25% of the Portfolio's net assets and is comprised of
Federal National Mortgage Association 6.5% and Federal Home Loan
Mortgage Corporation Gold 5.5%. These securities returned 212 basis
points and 194 basis points, respectively, for the quarter. This
compared favorably to the five-year Treasury note, which returned
only 74 basis points and had a similar average life. The Portfolio
also held a 10% multi-family pool that is protected from prepayments
by means of yield maintenance. While the current interest rate
environment may not warrant the benefit of prepayment protection
this security offers, its defined maturity should help the Portfolio
in the event interest rates continue to rise. The US Treasury
allocation, which was 12% of the Portfolio's net assets, also helped
to keep duration stable in a volatile interest rate environment, as
did our 6% investment in cash. While the future of monetary policy
is uncertain, we believe interest rates near term are likely to stay
in a range. We believe the significant yield advantage of MBS, along
with its superior liquidity and credit quality, make 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 next report to shareholders.
Sincerely,
(Terry K. Glenn)
Terry K. Glenn
President and Trustee
(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
(Gergory Mark Maunz)
Gergory Mark Maunz
Senior Vice President and
Portfolio Manager
US Government Securities Portfolio
November 29, 1999
To reduce shareholders' expenses, Merrill Lynch Asset Builder
Program, Inc. will no longer be printing and mailing quarterly
reports to shareholders. We will continue to provide you with
reports on a semi-annual and annual basis.
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., October 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 9/30/99 +17.12% +10.97%
Inception (2/01/95) to 9/30/99 +15.62 +14.29
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 9/30/99 +15.81% +11.81%
Inception (2/01/95) to 9/30/99 +14.37 +14.37
[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 9/30/99 +15.81% +14.81%
Inception (2/01/95) to 9/30/99 +14.36 +14.36
[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 9/30/99 +16.84% +10.71%
Inception (2/01/95) to 9/30/99 +15.35 +14.02
[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 9/30/99 +16.51% +10.40%
Inception (2/01/95) to 9/30/99 + 9.24 + 7.98
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 9/30/99 +15.28% +11.28%
Inception (2/01/95) to 9/30/99 + 8.07 + 8.07
[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 9/30/99 +15.32% +14.32%
Inception (2/01/95) to 9/30/99 + 8.04 + 8.04
[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 9/30/99 +16.29% +10.18%
Inception (2/01/95) to 9/30/99 + 8.99 + 7.74
[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 9/30/99 +34.82% +27.74%
Inception (2/02/96) to 9/30/99 +21.64 +19.86
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 9/30/99 +33.27% +29.27%
Inception (2/02/96) to 9/30/99 +20.34 +20.17
[FN]
*Maximum contingent deferred sales charge is 4% and is reduced to 0%
after 4 years.
**Assuming payment of applicable contingent deferred sales charge.
% Return % Return
Without CDSC With CDSC**
Class C Shares*
Year Ended 9/30/99 +33.27% +32.27%
Inception (2/02/96) to 9/30/99 +20.29 +20.29
[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 9/30/99 +34.50% +27.44%
Inception (2/02/96) to 9/30/99 +21.39 +19.62
[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 9/30/99 - 1.53% - 5.47%
Inception (2/01/95) to 9/30/99 + 5.90 + 4.98
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 9/30/99 - 2.16% - 5.81%
Inception (2/01/95) to 9/30/99 + 5.07 + 5.07
[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 9/30/99 - 2.21% - 3.12%
Inception (2/01/95) to 9/30/99 + 5.00 + 5.00
[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 9/30/99 - 1.58% - 5.52%
Inception (2/01/95) to 9/30/99 + 5.66 + 4.74
[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 9/30/99 + 1.15% - 2.90%
Inception (2/01/95) to 9/30/99 + 8.32 + 7.38
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 9/30/99 + 0.30% - 3.44%
Inception (2/01/95) to 9/30/99 + 7.44 + 7.44
[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 9/30/99 + 0.24% - 0.69%
Inception (2/01/95) to 9/30/99 + 7.38 + 7.38
[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 9/30/99 + 0.90% - 3.14%
Inception (2/01/95) to 9/30/99 + 8.04 + 7.10
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
Merrill Lynch Asset Builder Program, Inc., October 31, 1999
PERFORMANCE DATA (concluded)
<TABLE>
Recent
Performance
Results*
<CAPTION>
3 Month 12 Month Since
Total Total Inception Standardized
As of October 31, 1999 Return Return Total Return 30-day Yield
<S> <C> <C> <C> <C>
Fundamental Value Portfolio Class A Shares -5.29% +11.12% + 96.91% --
Fundamental Value Portfolio Class B Shares -5.55 + 9.90 + 87.12 --
Fundamental Value Portfolio Class C Shares -5.56 + 9.90 + 87.05 --
Fundamental Value Portfolio Class D Shares -5.32 +10.83 + 94.80 --
Global Opportunity Portfolio Class A Shares +2.81 +17.38 + 55.66 --
Global Opportunity Portfolio Class B Shares +2.64 +16.11 + 47.97 --
Global Opportunity Portfolio Class C Shares +2.57 +16.06 + 47.63 --
Global Opportunity Portfolio Class D Shares +2.75 +17.07 + 53.94 --
Growth Opportunity Portfolio Class A Shares +5.13 +33.53 +119.55 --
Growth Opportunity Portfolio Class B Shares +4.85 +32.00 +110.97 --
Growth Opportunity Portfolio Class C Shares +4.86 +32.00 +110.69 --
Growth Opportunity Portfolio Class D Shares +5.09 +33.14 +117.88 --
Quality Bond Portfolio Class A Shares +0.95 - 0.37 + 30.74 7.00%
Quality Bond Portfolio Class B Shares +0.87 - 0.90 + 25.93 6.53
Quality Bond Portfolio Class C Shares +0.86 - 0.95 + 25.54 6.48
Quality Bond Portfolio Class D Shares +0.89 - 0.51 + 29.21 6.76
US Government Securities Portfolio Class A Shares +1.89 + 1.96 + 45.64 6.22
US Government Securities Portfolio Class B Shares +1.70 + 1.30 + 40.26 5.73
US Government Securities Portfolio Class C Shares +1.69 + 1.25 + 39.87 5.68
US Government Securities Portfolio Class D Shares +1.82 + 1.81 + 44.00 5.98
<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 Percent of
EAST Industries Held Investments Value Net Assets
<S> <S> <C> <S> <C> <C>
Israel Computer Services 120,000 Scitex Corporation Ltd. (Ordinary) $ 1,522,500 1.5%
Total Investments in the Middle East 1,522,500 1.5
NORTH
AMERICA
Canada Natural Gas 25,000 Potash Corporation of Saskatchewan Inc. 1,104,688 1.0
Total Investments in Canada 1,104,688 1.0
United States Aerospace & Defense 40,000 The Boeing Company 1,842,500 1.8
60,000 Lockheed Martin Corporation 1,200,000 1.1
------------ ------
3,042,500 2.9
Automotive 60,000 Delphi Automotive Systems Corporation 986,250 0.9
20,000 Ford Motor Company 1,097,500 1.1
18,000 General Motors Corporation 1,264,500 1.2
------------ ------
3,348,250 3.2
Banking & Financial 26,000 Associates First Capital Corporation (Class A) 949,000 0.9
40,000 Citigroup Inc. 2,165,000 2.0
50,000 First Union Corporation 2,134,375 2.0
105,000 Hibernia Corporation (Class A) 1,489,688 1.4
50,000 National City Corporation 1,475,000 1.4
50,000 Wells Fargo Company 2,393,750 2.3
------------ ------
10,606,813 10.0
Beverage & 40,000 The Seagram Company Ltd. 1,975,000 1.9
Entertainment
Capital Equipment 20,000 Eaton Corporation 1,505,000 1.4
Chemicals 25,000 E.I. du Pont de Nemours and Company 1,610,937 1.5
50,000 Hercules Incorporated 1,203,125 1.2
------------ ------
2,814,062 2.7
Computer Equipment 80,000 Compaq Computer Corporation 1,520,000 1.4
20,000 Hewlett-Packard Company 1,481,250 1.4
------------ ------
3,001,250 2.8
Computer Software 55,000 Novell, Inc. 1,100,000 1.0
Cosmetics & Toiletries 45,000 Kimberly-Clark Corporation 2,840,625 2.7
Electric Utilities 75,000 Cinergy Corp. 2,118,750 2.0
Electronic Components 25,000 Emerson Electric Co. 1,501,562 1.4
50,000 Thomas & Betts Corporation 2,243,750 2.1
------------ ------
3,745,312 3.5
</TABLE>
Merrill Lynch Asset Builder Program, Inc., October 31, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<CAPTION>
Fundamental Value Portfolio (concluded)
NORTH AMERICA Shares Percent of
(concluded) Industries Held Investments Value Net Assets
<S> <S> <C> <S> <C> <C>
United States Foods 35,000 General Mills, Inc. $ 3,051,563 2.9%
(concluded) 55,000 Sara Lee Corporation 1,488,438 1.4
------------ ------
4,540,001 4.3
Health Care Services 56,000 Columbia/HCA Healthcare Corporation 1,351,000 1.3
Information Processing 8,000 Honeywell Inc. 843,500 0.8
26,000 International Business Machines Corporation 2,557,750 2.4
------------ ------
3,401,250 3.2
Insurance 60,000 Ace Limited 1,166,250 1.1
65,000 The Allstate Corporation 1,868,750 1.8
45,000 The Chubb Corporation 2,469,375 2.3
------------ ------
5,504,375 5.2
Machinery 30,000 Deere & Company 1,087,500 1.0
30,000 ITT Industries, Inc. 1,025,625 1.0
20,000 SPX Corporation 1,695,000 1.6
------------ ------
3,808,125 3.6
Natural Gas 55,000 El Paso Energy Corporation 2,255,000 2.1
45,000 Enron Corp. 1,797,187 1.7
------------ ------
4,052,187 3.8
Oil--Domestic 20,000 Atlantic Richfield Company (ARCO) 1,863,750 1.7
60,000 Sunoco, Inc. 1,447,500 1.4
------------ ------
3,311,250 3.1
Oil--International 25,000 Exxon Corporation 1,851,562 1.8
Oil Services 30,000 Diamond Offshore Drilling, Inc. 952,500 0.9
40,000 Halliburton Company 1,507,500 1.4
------------ ------
2,460,000 2.3
Packaging 75,000 Crown Cork & Seal Company, Inc. 1,795,312 1.7
Paper & Forest Products 20,000 International Paper Company 1,052,500 1.0
Photography 22,000 Eastman Kodak Company 1,516,625 1.4
Railroads 55,000 Union Pacific Corporation 3,066,250 2.9
Retail 25,000 Federated Department Stores, Inc. 1,067,187 1.0
Steel 40,000 USX-U.S. Steel Group 1,022,500 1.0
Telecommunications 40,000 3Com Corporation 1,157,500 1.1
50,000 AT&T Corp. 2,337,500 2.2
15,000 Bell Atlantic Corporation 974,062 0.9
25,000 GTE Corporation 1,875,000 1.8
15,000 Motorola, Inc. 1,461,563 1.4
------------ ------
7,805,625 7.4
Tobacco 65,000 Philip Morris Companies Inc. 1,637,188 1.6
Total Investments in the United States 85,340,499 80.7
Total Investments in North America 86,445,187 81.7
WESTERN
EUROPE
Netherlands Oil--International 40,000 Royal Dutch Petroleum Company
(NY Registered Shares) 2,397,500 2.3
Total Investments in the Netherlands 2,397,500 2.3
United Kingdom Petroleum 24,404 BP Amoco PLC (ADR)* 1,409,331 1.3
Total Investments in the United Kingdom 1,409,331 1.3
Total Investments in Western Europe 3,806,831 3.6
Total Investments (Cost--$81,631,621) 91,774,518 86.8
SHORT-TERM Face
SECURITIES Amount Issue
Commercial US$ 1,930,000 A-1 Credit Corp., 5.30% due 11/03/1999 1,928,864 1.8
Paper** 4,036,000 General Electric Capital Corp., 5.31%
due 11/01/1999 4,034,809 3.8
4,000,000 J.P. Morgan Securities Inc., 5.30% due
11/15/1999 3,990,578 3.8
2,000,000 Metropolitan Life Insurance Company,
5.28% due 11/17/1999 1,994,720 1.9
2,000,000 Xerox Capital (Europe) PLC, 5.30%
due 11/05/1999 1,998,233 1.9
Total Investments in
Short-Term Securities (Cost--$13,947,204) 13,947,204 13.2
Total Investments (Cost--$95,578,825) 105,721,722 100.0
Other Assets Less Liabilities 41,441 0.0
------------ ------
Net Assets $105,763,163 100.0%
============ ======
Net Asset Value: Class A--Based on net assets of $398,029 and 26,797
shares outstanding $ 14.85
============
Class B--Based on net assets of $64,239,365 and
4,441,789 shares outstanding $ 14.46
============
Class C--Based on net assets of $34,595,191 and
2,394,016 shares outstanding $ 14.45
============
Class D--Based on net assets of $6,530,578 and
441,862 shares outstanding $ 14.78
============
<FN>
*American Depositary Receipts (ADR).
**Commercial Paper is traded on a discount basis; the interest rates
shown reflect the discount rates paid at the time of purchase by the
Portfolio.
</TABLE>
Merrill Lynch Asset Builder Program, Inc., October 31, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (in US dollars)
<CAPTION>
Global Opportunity Portfolio
Face Percent of
COUNTRY Amount Foreign Government Obligations Value Net Assets
<S> <S> <C> <S> <C> <C>
Germany Euro 7,000,000 BundesObligation, 4.75% due 11/20/2001 $ 7,460,836 12.2%
2,750,000 Deutschland Republic, 4.75% due 7/04/2028 2,487,558 4.0
------------ ------
9,948,394 16.2
United Kingdom Pound Sterling 500,000 United Kingdom Treasury Gilt,
7.25% due 12/07/2007 896,970 1.5
Total Investments in Foreign
Government Obligations 10,845,364 17.7
US Government & Agency Obligations
United States Federal National Mortgage Association:
US$ 840,000 5.125% due 2/13/2004 798,521 1.3
1,000,000 5.75% due 2/15/2008 939,690 1.5
830,000 5.25% due 1/15/2009 746,867 1.2
250,000 6.375% due 6/15/2009 243,868 0.4
US Treasury Notes:
600,000 5% due 4/30/2001 593,622 1.0
350,000 5.75% due 6/30/2001 349,672 0.6
Total Investments in US Government
& Agency Obligations 3,672,240 6.0
Total Investments in Foreign & US Government
& Agency Obligations (Cost--$15,312,418) 14,517,604 23.7
Shares
Industries Held US Stocks
United States Aerospace & Defense 2,725 United Technologies Corporation 164,862 0.3
Application 2,000 Siebel Systems, Inc. 219,500 0.4
Development Software
Automobiles 6,940 Delphi Automotive Systems Corporation 114,076 0.2
Banking 3,357 Bank of America Corporation 216,107 0.3
8,610 The Bank of New York Company, Inc. 360,544 0.6
1,200 The Chase Manhattan Corporation 104,850 0.2
------------ ------
681,501 1.1
Beverages 8,640 PepsiCo, Inc. 299,700 0.5
Broadcasting/Cable 10,000 AT&T Corp.--Liberty Media Group (Class A) 396,875 0.6
Building Products 3,770 American Tower Corporation (Class A) 71,866 0.1
Capital Equipment 480 Eaton Corporation 36,120 0.1
Chemicals 1,520 E.I. du Pont de Nemours and Company 97,945 0.2
2,500 Rohm and Haas Company 95,625 0.1
------------ ------
193,570 0.3
Communications 4,320 MCI WorldCom Inc. 370,440 0.6
Equipment
Computer Products 7,110 Cisco Systems, Inc. 526,140 0.9
Computer Services 400 America Online, Inc. 51,875 0.1
Computer Software 6,480 Microsoft Corporation 599,805 1.0
Computers 2,300 Compaq Computer Corporation 43,700 0.0
2,650 Dell Computer Corporation 106,166 0.2
3,160 EMC Corporation 230,680 0.4
1,900 International Business Machines Corporation 186,912 0.3
1,700 Sun Microsystems, Inc. 179,775 0.3
------------ ------
747,233 1.2
Conglomerates 1,200 AlliedSignal Inc. 68,325 0.1
8,250 The Dial Corporation 192,844 0.3
------------ ------
261,169 0.4
Consumer--Electronics 4,550 Tandy Corporation 286,366 0.5
Electric & Gas 2,400 Calpine Corporation 138,300 0.2
Electrical & Electronics 700 The AES Corporation 39,506 0.1
Electrical Equipment 4,310 General Electric Company 584,274 1.0
Financial Services 5,220 Associates First Capital Corporation (Class A) 190,530 0.3
3,600 Citigroup Inc. 194,850 0.3
2,800 Wells Fargo Company 134,050 0.2
------------ ------
519,430 0.8
Financial Services-- 2,800 Household International, Inc. 124,950 0.2
Consumer
Foods 7,960 Keebler Foods Company 254,222 0.4
Healthcare--Products 2,800 Columbia/HCA Healthcare Corporation 67,550 0.1
& Services
Household Products 2,280 Colgate-Palmolive Company 137,940 0.2
1,500 The Procter & Gamble Company 157,313 0.3
------------ ------
295,253 0.5
Information Processing 550 Apple Computer, Inc. 44,069 0.1
2,650 Unisys Corporation 64,262 0.1
------------ ------
108,331 0.2
Instruments 1,200 Millipore Corporation 38,250 0.0
Insurance 2,880 AXA Financial, Inc. 92,340 0.2
1,437 American International Group, Inc. 147,921 0.2
1,500 The Chubb Corporation 82,313 0.1
1,490 Clear Channel Communications, Inc. 119,759 0.2
------------ ------
442,333 0.7
Laser Systems & 1,900 JDS Uniphase Corporation 316,944 0.5
Components 600 Symbol Technologies, Inc. 23,850 0.0
------------ ------
340,794 0.5
</TABLE>
Merrill Lynch Asset Builder Program, Inc., October 31, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Global Opportunity Portfolio (continued)
Shares Percent of
COUNTRY Industries Held US Stocks Value Net Assets
<S> <S> <C> <S> <C> <C>
United States Machinery & Equipment 962 Caterpillar Inc. $ 53,150 0.1%
(concluded)
Manufacturing 4,250 Tyco International Ltd. 169,734 0.3
Medical Technology 4,400 Johnson & Johnson 460,900 0.8
Metals 3,139 Alcoa Inc. 190,694 0.3
Natural Gas 7,450 Enron Corp. 297,534 0.5
Natural Resources 4,850 Burlington Resources Inc. 169,144 0.3
Oil & Gas Producers 2,300 Union Pacific Resources Group Inc. 33,350 0.1
Oil--Integrated 2,700 Mobil Corporation 260,550 0.4
Oil Services 3,300 Schlumberger Limited 199,856 0.3
Paper & Forest Products 2,264 International Paper Company 119,143 0.2
Petroleum 4,540 Unocal Corporation 156,630 0.3
Pharmaceutical-- 1,775 American Home Products Corporation 92,744 0.1
Diversified 5,450 Bristol-Myers Squibb Company 418,628 0.7
------------ ------
511,372 0.8
Pharmaceutical-- 1,660 Pharmacia & Upjohn, Inc. 89,536 0.1
Prescription
Pharmaceuticals 2,950 Cardinal Health, Inc. 127,219 0.2
500 Eli Lilly and Company 34,437 0.0
2,100 Merck & Co., Inc. 167,081 0.3
6,640 Pfizer Inc. 262,280 0.4
500 Warner-Lambert Company 39,906 0.1
------------ ------
630,923 1.0
Radio and Television 4,800 AMFM Inc. 336,000 0.5
Restaurants 5,600 McDonald's Corporation 231,000 0.4
Retail 950 Best Buy Co., Inc. 52,784 0.1
2,200 Dayton Hudson Corporation 142,175 0.2
2,000 Federated Department Stores, Inc. 85,375 0.2
5,260 Safeway Inc. 185,744 0.3
5,470 Wal-Mart Stores, Inc. 310,081 0.5
------------ ------
776,159 1.3
Retail--Specialty 3,900 Lowe's Companies, Inc. 214,500 0.4
Semiconductors 5,190 Intel Corporation 401,576 0.7
2,820 Motorola, Inc. 274,774 0.4
------------ ------
676,350 1.1
Telecommunications 7,605 AT&T Corp. 355,534 0.6
5,070 GTE Corporation 380,250 0.6
1,460 Lucent Technologies Inc. 93,805 0.2
------------ ------
829,589 1.4
Utilities-- 4,198 SBC Communications Inc. 213,836 0.3
Communication
Total Investments in US Stocks 14,594,241 23.9
Foreign Stocks
Australia Broadcasting/Cable 3,400 The News Corporation Limited
(Convertible Preferred) (ADR)* 93,713 0.2
Diversified 19,400 Broken Hill Proprietary Company Limited 200,220 0.3
Total Stocks in Australia 293,933 0.5
Austria Paper Products 3,400 Mayr-Melnhof Karton AG 151,276 0.2
Total Stocks in Austria 151,276 0.2
Bermuda Insurance 2,000 Ace Limited 38,875 0.0
Telecommunications & 1,500 Global Crossing Ltd. 51,937 0.1
Equipment
Total Stocks in Bermuda 90,812 0.1
Brazil Forest Products 7,800 Aracruz Celulose SA (ADR)* 159,900 0.3
Metals & Mining 7,200 Companhia Vale do Rio Doce 'A' (Preferred) 143,151 0.2
Telecommunications 6,000 Embratel Participacoes SA (ADR)* 77,250 0.1
1,320 Telecomunicacoes Brasileiras SA--Telebras
(Preferred Block) (ADR)* 102,795 0.2
------------ ------
180,045 0.3
Total Stocks in Brazil 483,096 0.8
Canada Communications 3,600 Nortel Networks Corporation 222,975 0.4
Equipment
Oil & Gas Producers 4,100 Alberta Energy Company Ltd. 126,801 0.2
Paper Products 17,400 Domtar, Inc. 209,931 0.3
Telecommunications 9,400 Teleglobe Inc. 222,662 0.4
Total Stocks in Canada 782,369 1.3
Denmark Services 1,200 ISS International Service System A/S 'B' 64,281 0.1
Total Stocks in Denmark 64,281 0.1
Finland Communications Equipment 3,550 Nokia Oyj 405,821 0.7
Holding Company 11,200 Amer Group Ltd. 212,978 0.3
Insurance 5,700 Sampo Insurance Company Ltd. 'A' 197,618 0.3
Paper & Forest Products 7,700 UPM-Kymmene Oyj 242,689 0.4
Total Stocks in Finland 1,059,106 1.7
France Banking 2,350 Banque Nationale de Paris (BNP) 206,154 0.4
896 Societe Generale 'A' 194,857 0.3
------------ ------
401,011 0.7
Chemicals 6,522 Rhone-Poulenc SA 364,527 0.6
Computers & Computer 500 Atos SA 63,982 0.1
Services
</TABLE>
Merrill Lynch Asset Builder Program, Inc., October 31, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Global Opportunity Portfolio (continued)
Shares Percent of
COUNTRY Industries Held Foreign Stocks Value Net Assets
<S> <S> <C> <S> <C> <C>
France Electronics 5,300 Thomson CSF $ 179,852 0.3%
(concluded)
Foods 811 Groupe Danone 206,619 0.3
Information Processing 515 Cap Gemini SA 77,912 0.1
Insurance 2,800 Axa 394,479 0.6
4,900 Scor 244,527 0.4
------------ ------
639,006 1.0
Merchandising 1,212 Carrefour SA 224,106 0.4
Metals 5,700 Pechiney SA 'A' 318,584 0.5
Oil & Related 1,815 Elf Aquitaine SA 358,119 0.6
1,000 Total Fina SA 'B' 135,002 0.2
------------ ------
493,121 0.8
Semiconductor Capital 4,360 STMicroelectronics NV (NY Registered Shares) 396,215 0.6
Equipment
Telecommunications 3,600 France Telecom SA 347,391 0.6
Utilities--Water 3,795 Vivendi 287,265 0.5
Total Stocks in France 3,999,591 6.5
Germany Banking 3,800 Dresdner Bank AG (Registered) 194,624 0.3
2,780 Deutsche Bank AG (Registered) 199,190 0.3
------------ ------
393,814 0.6
Chemicals 1,300 BASF AG 58,387 0.1
3,100 Henkel KGaA (Preferred) 210,067 0.3
------------ ------
268,454 0.4
Diversified 3,145 RWE AG 126,548 0.2
Electronics 2,000 Siemens AG 179,337 0.3
Electronics Components 8,000 Epcos AG 327,619 0.5
Machinery & Equipment 1,800 Mannesmann AG 282,716 0.5
Multi-Industry 3,968 Veba AG 214,275 0.4
Total Stocks in Germany 1,792,763 2.9
Hong Kong Multi-Industry 13,000 Hutchison Whampoa Limited 130,519 0.2
Total Stocks in Hong Kong 130,519 0.2
Ireland Banking 28,200 Bank of Ireland 219,832 0.3
Total Stocks in Ireland 219,832 0.3
Italy Oil & Gas Producers 55,500 ENI SpA 324,194 0.5
Publishing 18,000 Mondadori (Arnoldo) Editore SpA 336,801 0.6
Total Stocks in Italy 660,995 1.1
Japan Appliances 2,400 Sony Corporation (ADR)* 383,400 0.6
Automobiles 6,000 Honda Motor Co., Ltd. 253,213 0.4
8,000 Toyota Motor Corporation 277,000 0.5
2,000 Toyota Motor Corporation (ADR)* 138,000 0.2
------------ ------
668,213 1.1
Banking & Financial 21,000 The Bank of Tokyo-Mitsubishi, Ltd. 348,053 0.6
26,000 The Sanwa Bank, Ltd. 386,783 0.6
------------ ------
734,836 1.2
Banking--International 23,000 The Sumitomo Bank, Ltd. 370,171 0.6
Chemicals 4,000 Shin-Etsu Chemical Co., Ltd. 164,972 0.3
Computer Products 2,000 TDK Corporation 195,857 0.3
Computers 17,000 NEC Corporation 344,044 0.6
Consumer--Electronics 2,000 Rohm Company Ltd. 448,878 0.7
Cosmetics & Toiletries 10,000 Kao Corporation 305,007 0.5
Distribution 700 Softbank Corporation 290,716 0.5
Diversified 10,000 Olympus Optical Co., Ltd. 135,239 0.2
Electronics 12,000 Fujitsu Limited 361,404 0.6
400 Keyence Corporation 107,232 0.2
12,000 Matsushita Electric Industrial Company, Ltd. 252,638 0.4
30,000 Toshiba Corporation 188,759 0.3
------------ ------
910,033 1.5
Finance 2,000 Orix Corporation 268,559 0.4
Glass 72,000 Nippon Sheet Glass Company, Ltd. 447,497 0.7
Insurance 25,000 The Tokio Marine & Fire Insurance Co. Ltd. 327,307 0.5
Internet 1,100 Internet Initiative Japan Inc. (ADR)* 58,850 0.1
Machine Tools & 9,000 Minebea Company Ltd. 121,283 0.2
Machinery
Merchandising 13,000 Marui Co., Ltd. 245,636 0.4
Pharmaceuticals 5,000 Takeda Chemical Industries, Ltd. 287,263 0.5
Retail Stores 11,000 The Daimaru, Inc. 54,230 0.1
3,000 Ito-Yokado Co., Ltd. 239,977 0.4
16,000 Mitsukoshi, Ltd. 89,162 0.1
------------ ------
383,369 0.6
Steel 91,000 Nippon Steel Corporation 231,297 0.4
Telecommunications 20 NTT Mobile Communications Network, Inc. 531,364 0.9
19 Nippon Telegraph & Telephone Corporation (NTT) 291,579 0.5
------------ ------
822,943 1.4
Tires & Rubber 8,000 Bridgestone Corp. 220,219 0.4
Transport Services 58 East Japan Railway Company 355,477 0.6
Total Stocks in Japan 8,721,066 14.3
</TABLE>
Merrill Lynch Asset Builder Program, Inc., October 31, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Global Opportunity Portfolio (continued)
Shares Percent of
COUNTRY Industries Held Foreign Stocks Value Net Assets
<S> <S> <C> <S> <C> <C>
Netherlands Banking 7,300 ABN AMRO Holding NV $ 176,319 0.3%
Broadcast & Publishing 6,400 Wolters Kluwer NV 'A' 213,616 0.3
Chemicals 1,300 Akzo Nobel NV 55,915 0.1
Computer Software 4,500 Baan Company, NV 55,881 0.1
1,235 Getronics NV 61,501 0.1
------------ ------
117,382 0.2
Electronic Components 1,200 ASM Lithography Holding NV 84,594 0.1
Foods 4,700 CSM NV 216,523 0.4
3,933 Koninklijke Ahold NV 120,655 0.2
------------ ------
337,178 0.6
Human Resources 3,500 Vedior NV 'A' 58,834 0.1
Multi-Industry 2,589 Unilever NV 'A' 171,360 0.3
Retail 4,300 Vendex KBB NV 125,363 0.2
Total Stocks in the Netherlands 1,340,561 2.2
Norway Computer Software 17,500 Merkantildata ASA 148,233 0.3
Telecommunications 11,800 Tandberg Television ASA 139,782 0.2
Transport Services 7,200 Bergesen d.y. ASA 'B' 110,970 0.2
Total Stocks in Norway 398,985 0.7
Singapore Banking & Financial 6,978 DBS Group Holdings Limited 78,871 0.1
Electronics Components 3,200 Flextronics International Ltd. 227,000 0.4
Total Stocks in Singapore 305,871 0.5
South Korea Electronics 500 Samsung Electronics 83,403 0.2
Steel 4,200 Pohang Iron & Steel Company Ltd. (ADR)* 140,175 0.2
Total Stocks in South Korea 223,578 0.4
Spain Building Materials 21,000 Uralita, SA 158,409 0.2
Construction 2,370 Grupo Ferrovial, SA 42,204 0.1
Diversified 17,200 Dinamia Capital Privado. Sociedad de
Capital Riesgo, SA 163,536 0.3
Petroleum--Domestic 13,000 Repsol-YPF, SA 267,693 0.4
Real Estate 9,300 Metrovacesa, SA 197,659 0.3
Telecommunications 14,400 Telefonica, SA 236,612 0.4
Utilities--Electric 10,800 Endesa, SA 215,924 0.4
Total Stocks in Spain 1,282,037 2.1
Sweden Auto & Truck 4,600 Autoliv, Inc. 146,244 0.2
Automobile Parts 16,700 Haldex AB 196,566 0.3
Automobiles 5,900 Volvo AB 'B' 152,136 0.3
Banking 8,250 ForeningsSparbanken AB 131,143 0.2
25,700 Nordbanken Holding AB 149,691 0.2
------------ ------
280,834 0.4
Diversified 1,800 Custos AB 'A' 39,316 0.0
4,600 Custos AB 'B' 98,240 0.2
------------ ------
137,556 0.2
Investment Management 20,400 Investment AB Bure 110,157 0.2
Paper Products 17,000 Stora Enso Oyj 'R' 225,883 0.4
Real Estate 13,100 Castellum AB 112,863 0.2
17,800 Fastighets AB Tornet 231,113 0.4
------------ ------
343,976 0.6
Telecommunications 5,400 Telefonaktiebolaget LM Ericsson 'B' 224,099 0.4
Total Stocks in Sweden 1,817,451 3.0
Switzerland Banking 840 Credit Suisse Group (Registered Shares) 161,348 0.3
Banking & Financial 447 UBS AG (Registered Shares) 129,962 0.2
Drugs 89 Novartis AG (Registered Shares) 133,027 0.2
Human Resources 116 Adecco SA (Registered Shares) 70,266 0.1
Pharmaceuticals 24 Roche Holding AG 287,924 0.5
Total Stocks in Switzerland 782,527 1.3
United Kingdom Banking 23,800 HSBC Holdings PLC 292,830 0.5
37,000 Lloyds TSB Group PLC 511,120 0.8
------------ ------
803,950 1.3
Beverages 24,904 Diageo PLC 251,427 0.4
Cable Television 25,100 TeleWest Communications PLC 107,234 0.2
Services 2,282 TeleWest Communications PLC (Rights) (a) 2,060 0.0
------------ ------
109,294 0.2
Diversified 47,800 Billiton PLC 206,372 0.3
Drugs 7,200 AstraZeneca Group PLC 325,273 0.5
Entertainment 11,800 The Peninsular and Oriental Steam
Navigation Company 166,977 0.3
Foods 70,100 Devro PLC 107,021 0.2
Hardware Products 19,500 Reckitt & Colman PLC 236,403 0.4
Leisure 47,400 Hilton Group PLC 144,341 0.2
Oil--Integrated 7,350 Shell Transport & Trading Company (ADR)* 337,181 0.6
Oil & Related 31,200 BP Amoco PLC 302,442 0.5
Pharmaceuticals 11,600 Glaxo Wellcome PLC 342,004 0.6
10,800 SmithKline Beecham PLC 138,998 0.2
------------ ------
481,002 0.8
Publishing 18,400 Reed International PLC 107,229 0.2
Railroads 6,800 Railtrack Group PLC 137,527 0.2
Real Estate 26,100 The British Land Company PLC 187,450 0.3
Retail Stores 10,900 Dixons Group PLC 192,891 0.3
</TABLE>
Merrill Lynch Asset Builder Program, Inc., October 31, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<CAPTION>
Global Opportunity Portfolio (concluded)
Shares Percent of
COUNTRY Industries Held Foreign Stocks Value Net Assets
<S> <S> <C> <S> <C> <C>
United Kingdom Telecommunications 11,900 British Telecommunications PLC $ 215,569 0.3%
(concluded) 13,600 Cable & Wireless PLC 158,736 0.3
5,800 Energis PLC 184,808 0.3
63,000 Vodafone AirTouch PLC 292,681 0.5
------------ ------
851,794 1.4
Total Stocks in the United Kingdom 4,948,574 8.1
Total Investments in Foreign Stocks 29,549,223 48.3
Total Investments in US & Foreign Stocks
(Cost--$36,989,070) 44,143,464 72.2
SHORT-TERM Face
SECURITIES Amount Issue
Commercial US$ 1,000,000 J.P. Morgan Securities Inc., 5.30% due
Paper** 11/15/1999 997,644 1.6
Repurchase 958,000 General Motors Acceptance Corp., purchased on
Agreements*** 10/29/1999 to yield 5.38% on 11/01/1999 957,714 1.6
Total Investments in Short-Term Securities
(Cost--$1,955,358) 1,955,358 3.2
Total Investments (Cost--$54,256,846) 60,616,426 99.1
Other Assets Less Liabilities 545,870 0.9
------------ ------
Net Assets $ 61,162,296 100.0%
============ ======
Net Asset Value: Class A--Based on net assets of $184,406 and 13,998
shares outstanding $ 13.17
============
Class B--Based on net assets of $40,159,946 and
3,131,174 shares outstanding $ 12.83
============
Class C--Based on net assets of $17,803,872 and
1,391,796 shares outstanding $ 12.79
============
Class D--Based on net assets of $3,014,072 and
230,016 shares outstanding $ 13.10
============
<FN>
*American Depositary Receipts (ADR).
**Commercial Paper is traded on a discount basis; the interest rate
shown reflects the discount rate paid at the time of purchase by the
Portfolio.
***Repurchase Agreements are fully collateralized by US Government &
Agency Obligations.
(a)The rights may be exercised until November 17, 1999.
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (in US dollars)
<CAPTION>
Growth Opportunity Portfolio
Shares Percent of
Industries Held Common Stocks Value Net Assets
<S> <C> <S> <C> <C>
Advertising 26,000 The Interpublic Group of Companies, Inc. $ 1,056,250 0.7%
Automobile 70,000 Toyota Motor Corporation 2,423,748 1.5
Banking & Financial 26,000 Bank of America Corporation 1,673,750 1.0
43,000 Citigroup Inc. 2,327,375 1.5
7,000 Mellon Financial Corporation 258,562 0.2
2,500 State Street Corporation 190,312 0.1
------------ ------
4,449,999 2.8
Beverages 5,000 The Coca-Cola Company 295,000 0.2
Broadcasting--Radio 20,000 AMFM Inc. 1,400,000 0.9
& Television 20,000 CBS Corporation 976,250 0.6
34,000 Clear Channel Communications, Inc. 2,732,750 1.7
26,000 Infinity Broadcasting Corp. (Class A) 898,625 0.5
------------ ------
6,007,625 3.7
Chemicals 40,000 E.I. du Pont de Nemours and Company 2,577,500 1.6
Communications 50,000 3Com Corporation 1,446,875 0.9
Equipment 95,000 Cisco Systems, Inc. 7,030,000 4.4
5,000 JDS Uniphase Corporation 834,062 0.5
73,000 Lucent Technologies Inc. 4,690,250 2.9
34,000 Nokia Oyj 3,886,737 2.4
19,000 Nortel Networks Corporation 1,176,812 0.8
46,000 Telefonaktiebolaget LM Ericsson (ADR)* 1,963,625 1.2
------------ ------
21,028,361 13.1
Computers 63,000 EMC Corporation 4,599,000 2.9
27,000 International Business Machines Corporation 2,656,125 1.6
41,000 Sun Microsystems, Inc. 4,335,750 2.7
------------ ------
11,590,875 7.2
Diversified 16,000 Mannesmann AG 2,513,035 1.5
37,000 Minnesota Mining and Manufacturing
Company (3M) 3,517,313 2.2
------------ ------
6,030,348 3.7
Electrical Equipment 2,000 Emerson Electric Co. 120,125 0.1
55,000 General Electric Company 7,455,938 4.6
1,000 Honeywell Inc. 105,438 0.1
------------ ------
7,681,501 4.8
Electronics 11,000 ASM Lithography Holding NV 775,448 0.5
3,000 Intel Corporation 232,125 0.1
28,000 LSI Logic Corporation 1,489,250 0.9
20,000 National Semiconductor Corporation 598,750 0.4
37,000 STMicroelectronics 3,245,829 2.0
41,000 Texas Instruments Incorporated 3,679,750 2.3
6,000 Xilinx, Inc. 471,375 0.3
------------ ------
10,492,527 6.5
</TABLE>
Merrill Lynch Asset Builder Program, Inc., October 31, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<CAPTION>
Growth Opportunity Portfolio (concluded)
<S> <C> <S> <C> <C>
Energy 38,300 BP Amoco PLC (ADR)* $ 2,211,825 1.4%
12,000 Duke Energy Corporation 678,000 0.4
50,000 El Paso Energy Corporation 2,050,000 1.3
79,000 Enron Corp. 3,155,063 1.9
51,000 Royal Dutch Petroleum Company
(NY Registered Shares) 3,056,812 1.9
12,000 UtiliCorp United Inc. 259,500 0.2
------------ ------
11,411,200 7.1
Entertainment 16,000 AT&T Corp.--Liberty Media Group (Class A) 635,000 0.4
50,000 The Walt Disney Company 1,318,750 0.8
------------ ------
1,953,750 1.2
Financial Services 4,000 American Express Company 616,000 0.4
5,000 Federal Home Loan Mortgage Association 270,313 0.2
7,000 Federal National Mortgage Association 495,250 0.3
10,000 Franklin Resources, Inc. 350,000 0.2
8,000 Morgan Stanley Dean Witter & Co. 882,500 0.5
17,000 T. Rowe Price Associates, Inc. 601,375 0.4
------------ ------
3,215,438 2.0
Foods 4,000 Wm. Wrigley Jr. Company 319,750 0.2
Home Furnishings 34,050 Ethan Allen Interiors Inc. 1,210,903 0.8
Hotels 9,000 Marriott International, Inc. (Class A) 303,188 0.2
Household Products 2,000 Colgate-Palmolive Company 121,000 0.1
4,000 The Procter & Gamble Company 419,500 0.2
------------ ------
540,500 0.3
Information 35,000 America Online, Inc. 4,539,063 2.8
Processing 15,000 First Data Corporation 685,313 0.4
28,000 General Motors Corporation (Class H) 2,038,750 1.3
------------ ------
7,263,126 4.5
Medical Technology 1,000 Johnson & Johnson 104,750 0.1
Oil Services 57,000 Baker Hughes Incorporated 1,592,438 1.0
7,500 Diamond Offshore Drilling, Inc. 238,125 0.1
47,000 Schlumberger Limited 2,846,437 1.8
------------ ------
4,677,000 2.9
Pharmaceuticals 16,000 Amgen Inc. 1,275,000 0.8
30,000 Bristol-Myers Squibb Company 2,304,375 1.4
5,000 Immunex Corporation 314,062 0.2
36,000 Merck & Co., Inc. 2,864,250 1.8
67,000 Pfizer Inc. 2,646,500 1.6
------------ ------
9,404,187 5.8
Photography 21,000 Eastman Kodak Company 1,447,688 0.9
Publishing 4,000 Gannett Co., Inc. 308,500 0.2
Restaurants 26,000 McDonald's Corporation 1,072,500 0.7
Retail--Specialty 11,000 Best Buy Co., Inc. 611,188 0.4
4,000 CVS Corporation 173,750 0.1
3,000 The Gap, Inc. 111,375 0.1
15,000 Walgreen Co. 377,812 0.2
------------ ------
1,274,125 0.8
Retailing 10,000 Amazon.com, Inc. 705,625 0.4
16,000 Wal-Mart Stores, Inc. 907,000 0.6
------------ ------
1,612,625 1.0
Semiconductors 31,000 Applied Materials, Inc. 2,784,188 1.7
Software--Computer 2,000 Microsoft Corporation 185,125 0.1
10,000 SAP AG (Systeme, Anwendungen, Produkte in der
Datenverarbeitung)(ADR)* 365,625 0.2
------------ ------
550,750 0.3
Telecommunications 63,000 AT&T Corp. 2,945,250 1.8
20,000 Covad Communications Group, Inc. 960,000 0.6
36,200 Equant (NY Registered Shares) 3,511,400 2.2
36,000 MCI WorldCom Inc. 3,087,000 1.9
8,500 NorthPoint Communications Group, Inc. 227,906 0.1
74,600 Sprint Corp. (FON Group) 5,543,712 3.5
5,000 Sprint Corp. (PCS Group) 414,687 0.3
47,000 Vodafone AirTouch PLC (ADR)* 2,253,062 1.4
------------ ------
18,943,017 11.8
Travel & Lodging 15,000 Carnival Corporation 667,500 0.4
Total Common Stocks (Cost--$114,134,942) 142,698,419 88.7
Face
Amount Short-Term Securities
Commercial Paper** $ 5,027,000 The CIT Group Holdings, Inc., 5.31%
due 11/01/1999 5,025,517 3.1
2,000,000 Metropolitan Life Insurance Company,
5.29% due 11/10/1999 1,996,767 1.2
3,000,000 Newell Company, 5.30% due 11/24/1999 2,988,958 1.9
5,000,000 Xerox Capital (Europe) PLC, 5.27%
due 11/29/1999 4,978,042 3.1
Total Short-Term Securities
(Cost--$14,989,284) 14,989,284 9.3
Total Investments (Cost--$129,124,226) 157,687,703 98.0
Other Assets Less Liabilities 3,264,286 2.0
------------ ------
Net Assets $160,951,989 100.0%
============ ======
Net Asset Value: Class A--Based on net assets of $746,895 and
37,965 shares outstanding $ 19.67
============
Class B--Based on net assets of $94,754,008 and
4,926,394 shares outstanding $ 19.23
============
Class C--Based on net assets of $59,294,572 and
3,088,069 shares outstanding $ 19.20
============
Class D--Based on net assets of $6,156,514 and
313,882 shares outstanding $ 19.61
============
<FN>
*American Depositary Receipts (ADR).
**Commercial Paper is traded on a discount basis; the interest rates
shown reflect the discount rates paid at the time of purchase by the
Portfolio.
</TABLE>
Merrill Lynch Asset Builder Program, Inc., October 31, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (in US dollars)
<CAPTION>
Quality Bond Portfolio
S&P Moody's Face
INDUSTRIES Ratings Ratings Amount Bonds & Notes Value
<S> <S> <S> <C> <S> <C>
Asset-Backed AA+ Aa3 $300,000 Continental Airlines, 7.056% due 9/15/2009 $ 297,024
Securities*--2.6% AAA Aaa 150,000 The Money Store Home Equity Trust, 6.225% due 9/15/2023 147,738
------------
444,762
Banking--11.4% A A2 250,000 Bank of New York Co., Inc., 7.875% due 11/15/2002 257,992
A A1 350,000 Chase Manhattan Corporation, 7.25% due 6/01/2007 352,905
A A1 300,000 First Chicago Bank, 8.25% due 6/15/2002 311,148
BBB+ A3 300,000 Great Western Bank, 9.875% due 6/15/2001 314,271
BBB a1 300,000 KeyCorp Capital I, 6.819% due 7/01/2028 (a) 280,020
BBB+ Baa1 250,000 MBNA America Bank NA, 5.819% due 6/10/2004 (a) 247,528
A A1 200,000 Wells Fargo Company, 8.375% due 5/15/2002 207,766
------------
1,971,630
Finance--4.1% BBB+ Baa1 150,000 Comdisco Inc., 6% due 1/30/2002 145,882
A A2 250,000 Household Finance Corporation, 6% due 5/01/2004 240,512
BBB A1 320,000 Newcourt Credit Group, 6.875% due 2/16/2005 316,654
------------
703,048
Finance-- A A2 225,000 Bear Stearns Companies, Inc., 6.875% due 10/01/2005 219,841
Other--9.3% A aa3 100,000 Citigroup Capital II, 7.75% due 12/01/2036 93,569
A- A3 38,000 Donaldson, Lufkin & Jenrette Inc., 6.875% due 11/01/2005 37,235
AAA Aaa 240,000 Florida Windstorm Under, 7.125% due 2/25/2019 224,498
A A3 250,000 Lehman Brothers Holdings, Inc., 6.625% due 2/05/2006 239,093
A+ Aa3 100,000 Morgan Stanley, Dean Witter, 5.625% due 1/20/2004 95,100
BBB+ Baa1 275,000 Paine Webber Group Inc., 9.25% due 12/15/2001 287,378
A+ A2 200,000 Prudential Insurance Co., 6.375% due 7/23/2006 189,993
A Aa3 100,000 Salomon Smith Barney Holdings, Inc., 7.125% due 10/01/2006 98,857
BBB Baa2 150,000 Spieker Properties LP, 7.35% due 12/01/2017 134,536
------------
1,620,100
Financial Services Associates Corporation of North America:
- --Consumer--4.3% AA- Aa3 100,000 7.40% due 5/15/2006 101,391
AA- Aa3 250,000 6.95% due 11/01/2018 237,397
A- a1 150,000 CIT Capital Trust I, 7.70% due 2/15/2027 137,738
AAA Aaa 245,000 General Electric Capital Corp., 8.50% due 7/24/2008 268,775
------------
745,301
Industrial-- A+ A1 100,000 Anheuser-Busch Companies Inc., 8.75% due 12/01/1999 100,254
Consumer Goods-- BBB- Baa3 250,000 Flowers Industries Inc., 7.15% due 4/15/2028 162,702
3.2% A A1 80,000 PepsiCo, Inc., 5.75% due 1/02/2003 78,518
AA Aa2 200,000 Wal-Mart Stores, Inc., 8.50% due 9/15/2024 216,082
------------
557,556
Industrial-- AA+ Aa1 175,000 BP America Inc., 9.375% due 11/01/2000 180,215
Energy--6.4% A- A3 460,000 Burlington Resources, 7.375% due 3/01/2029 440,728
BBB Baa1 250,000 Noram Energy Corp., 6.375% due 11/01/2013 (a) 243,230
BBB Baa3 250,000 Occidental Petroleum Corp., 6.50% due 4/01/2005 241,270
------------
1,105,443
Industrial-- A A2 200,000 AlliedSignal Inc., 6.20% due 2/01/2008 186,900
Manufacturing-- BBB+ A3 200,000 Applied Materials Inc., 6.75% due 10/15/2007 189,212
21.6% BBB+ Baa2 250,000 Borg-Warner Automotive, 7.125% due 2/15/2029 221,877
Bowater Inc.:
BBB Baa2 150,000 9% due 8/01/2009 162,997
BBB Baa2 100,000 9.375% due 12/15/2021 111,814
A+ A2 200,000 Danaher Corp., 6% due 10/15/2008 180,420
BBB- Baa3 300,000 Equistar Chemicals LP, 8.75% due 2/15/2009 295,200
Ford Motor Credit Co.:
A A1 200,000 8.20% due 2/15/2002 206,316
A A1 300,000 5.596% due 8/27/2006 (a) 299,460
A A1 100,000 5.80% due 1/12/2009 90,267
General Motors Acceptance Corp.:
A A2 100,000 8.50% due 1/01/2003 104,731
A A2 100,000 7.125% due 5/01/2003 100,872
A A2 200,000 8.75% due 7/15/2005 215,884
A A2 200,000 General Motors Corp., 7.40% due 9/01/2025 195,916
A+ A1 320,000 International Business Machines Corp., 6.50% due 1/15/2028 292,998
BBB- Baa2 300,000 Jones Apparel Group, 7.875% due 6/15/2006 298,149
BBB Baa2 300,000 Lockheed Martin Corporation, 7.75% due 5/01/2026 291,285
BBB Baa2 125,000 Meritor Automotive Inc., 6.80% due 2/15/2009 115,761
A+ A1 100,000 Motorola Inc., 6.50% due 11/15/2028 88,048
A A1 100,000 PPG Industries Inc., 7.05% due 8/15/2009 99,457
------------
3,747,564
Industrial-- A A2 150,000 Carnival Corp., 7.70% due 7/15/2004 153,838
Services--9.5% A A2 200,000 Computer Sciences Corp., 6.25% due 3/15/2009 188,333
A A2 203,569 Disney Custom Repackaged Asset Vehicle-403,
6.85% due 1/10/2007* 200,495
A- A3 100,000 Hertz Corporation, 7.625% due 8/15/2007 101,757
May Department Stores Co.:
A+ A1 125,000 9.875% due 12/01/2002 135,750
A+ A1 150,000 6.70% due 9/15/2028 134,898
BBB- Baa3 200,000 News America Holdings, Inc., 8.50% due 2/15/2005 207,676
A- A2 250,000 Sears Roebuck & Company, 9.375% due 11/01/2011 273,723
AA- A2 120,000 TCI Communications Inc., 8.75% due 8/01/2015 134,059
BBB Baa2 100,000 Time Warner Entertainment Co., 8.375% due 3/15/2023 107,282
------------
1,637,811
</TABLE>
Merrill Lynch Asset Builder Program, Inc., October 31, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<CAPTION>
Quality Bond Portfolio (concluded)
S&P Moody's Face
INDUSTRIES Ratings Ratings Amount Bonds & Notes Value
<S> <S> <S> <C> <S> <C>
Transportation-- BBB+ Baa2 $ 50,000 Burlington North Santa Fe, 6.75% due 3/15/2029 $ 44,185
3.4% BBB Baa2 250,000 CSX Corp., 7.90% due 5/01/2017 251,650
BBB- Baa3 250,000 Delta Airlines, 10.125% due 5/15/2010 287,095
------------
582,930
US Government US Treasury Notes:
Obligations--6.5% AAA Aaa 590,000 6% due 8/15/2004 591,381
AAA Aaa 100,000 6.50% due 5/15/2005 101,828
AAA Aaa 225,000 6.50% due 8/15/2005 229,183
AAA Aaa 210,000 6% due 8/15/2009 209,704
------------
1,132,096
Utilities-- A- A2 300,000 ALLTEL Corporation, 6.75% due 9/15/2005 295,626
Communications-- AA- A1 200,000 AT&T Corporation, 6.50% due 3/15/2029 176,920
8.3% AA+ Aa3 100,000 Ameritech Capital Funding, 6.45% due 1/15/2018 90,474
BB Ba2 250,000 Frontier Corp., 6% due 10/15/2013 233,205
A Baa1 150,000 GTE Corp., 6.84% due 4/15/2018 141,401
AAA Aa2 125,000 Indiana Bell Telephone Co., Inc., 7.30% due 8/15/2026 121,885
A- A3 200,000 MCI WorldCom Inc., 6.125% due 4/15/2012 (a) 197,956
BBB+ Baa1 200,000 Sprint Capital Corporation, 6.125% due 11/15/2008 184,940
------------
1,442,407
Utilities-- A+ A1 100,000 Consolidated Edison, Inc., 6.25% due 2/01/2008 93,222
Electric--5.1% AA- Aa3 300,000 Florida Power Corp., 6.875% due 2/01/2008 297,309
A A1 250,000 Mississippi Power, 6.05% due 5/01/2003 245,265
BBB- Baa3 100,000 Niagara Mohawk Power Corp., 7.75% due 10/01/2008 101,128
A A2 150,000 Virginia Electric & Power Co., 8.625% due 10/01/2024 152,900
------------
889,824
Total Investments in Bonds & Notes
(Cost--$17,425,135)--95.7% 16,580,472
SHORT-TERM
SECURITIES Issue
Commercial 362,000 CIT Group Holdings, Inc. (The), 5.31% due 11/01/1999 362,000
Paper**--2.1%
Total Investments in Short-Term Securities
(Cost--$362,000)--2.1% 362,000
Total Investments (Cost--$17,787,135)--97.8% 16,942,472
Other Assets Less Liabilities--2.2% 373,162
------------
Net Assets--100.0% $ 17,315,634
============
Net Asset Value: Class A--Based on net assets of $113,661 and
12,065 shares outstanding $ 9.42
============
Class B--Based on net assets of $11,490,345 and
1,219,034 shares outstanding $ 9.43
============
Class C--Based on net assets of $4,507,058 and
478,176 shares outstanding $ 9.43
============
Class D--Based on net assets of $1,204,570 and
127,818 shares outstanding $ 9.42
============
<FN>
*Subject to principal paydowns.
**Commercial Paper is traded on a discount basis; the interest rate
shown reflects the discount rate paid at the time of purchase by the
Portfolio.
(a)Floating rate note.
</TABLE>
Merrill Lynch Asset Builder Program, Inc., October 31, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (in US dollars)
<CAPTION>
US Government Securities Portfolio
Face Interest Maturity
Issue Amount Rate Date(s) Value
<S> <S> <C> <C> <C> <C>
US Government Federal Home Loan Mortgage Corporation $ 573,172 11.50% 6/01/2019 $ 625,711
Agency Mortgage- Federal Home Loan Mortgage Corporation--
Backed Gold Program 3,173,785 5.50 3/01/2013-5/01/2014 2,993,526
Obligations*--80.2% Federal National Mortgage Association 928,381 6.00 10/01/2028 865,828
Federal National Mortgage Association 1,819,480 6.50 2/01/2012-2/01/2014 1,786,779
Federal National Mortgage Association--
Multi-Family #0073313++++ 1,991,657 6.18 1/01/2006 1,917,156
Government National Mortgage Association 992,111 5.50 3/15/2029-4/15/2029 893,320
Government National Mortgage Association 414,690 6.50 1/15/2028 396,601
Government National Mortgage Association 3,012,187 7.00 11/15/2027-8/15/2028 2,955,874
Government National Mortgage Association 3,103,449 7.50 10/15/2025-3/15/2028 3,113,274
Total US Government Agency Mortgage-Backed
Obligations (Cost--$16,110,147) 15,548,069
US Government US Treasury Notes 2,000,000 5.75 6/30/2001 1,998,126
Obligations--12.4% US Treasury STRIPS** 1,500,000 5.635++ 8/15/2019 411,840
Total US Government Obligations (Cost--$2,496,993) 2,409,966
SHORT-TERM Face
SECURITIES Amount Issue
Repurchase $1,280,000 Donaldson, Lufkin & Jenrette Securities Corp., purchased on
Agreements***-- 10/29/1999 to yield 5.22% on 11/01/1999 1,280,000
6.6%
Total Investments in Short-Term Securities (Cost--$1,280,000) 1,280,000
Total Investments (Cost--$19,887,140)--99.2% 19,238,035
Other Assets Less Liabilities--0.8% 148,504
------------
Net Assets--100.0% $ 19,386,539
============
Net Asset Value: Class A--Based on net assets of $308,821 and 30,637
shares outstanding $ 10.08
============
Class B--Based on net assets of $14,171,052 and 1,406,051
shares outstanding $ 10.08
============
Class C--Based on net assets of $3,816,607 and 378,714
shares outstanding $ 10.08
============
Class D--Based on net assets of $1,090,059 and 108,086
shares outstanding $ 10.09
============
<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.
</TABLE>
