MERRILL LYNCH
ASSET BUILDER
PROGRAM, INC.
FUND LOGO
Annual Report
January 31, 2000
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., January 31, 2000
DEAR SHAREHOLDER
We are pleased to provide you with this annual report for Merrill
Lynch Asset Builder Program, Inc. The Program consists of five
separate diversified portfolios, each with its own investment
objectives. Complete performance information for all five portfolios
can be found on pages 7--16 of this report to shareholders.
Fundamental Value Portfolio
Fiscal Year in Review
The fiscal year ended January 31, 2000 started out on a promising
note, with value equities enjoying a solid resurgence from depressed
year-earlier levels. Driving value issues higher were a number of
positive developments: signs of a bottoming of the economic turmoil
in Asia and Latin America, a rebound in the industrial sector of the
US economy and improved prospects for the energy sector following
the March Organization of Petroleum Exporting Countries (OPEC)
accord.
Unfortunately, this period of value outperformance was short-
circuited by the prospect of rising interest rates. Responding to
unabated economic progress (gross domestic product growth expanding
at a rapid rate, unemployment at a 30-year low and industrial
activity expanding for 12 consecutive months), the Federal Reserve
Board chose to raise interest rates three times during the fiscal
year. Driving the Federal Reserve Board's decisions were incipient
signs of inflationary pressures, particularly from labor costs and
raw materials. These interest rate increases pressured the value-
laden financial and cyclical sectors. Also pressuring value equities
was a string of earnings disappointments in the aerospace and
defense, financial and retail areas. Reflecting the adverse
environment, the unmanaged Standard & Poor's (S&P) Barra Value Index
gained 5.1% during the 12 months ended January 31, 2000,
underperforming both the Barra Growth Index and the unmanaged S&P
500 Index, which advanced 11.9% and 9%, respectively, for the same
period.
Reflecting the unfavorable value backdrop, Fundamental Value
Portfolio's Class A, Class B, Class C and Class D Shares had total
returns of +2.57%, +1.45%, +1.38% and +2.35%, respectively, for the
fiscal year ended January 31, 2000. (Results shown do not reflect
sales charges and would be lower if sales charges were included.) In
addition to the adverse value environment, the Portfolio's
performance was pressured by our overweighted positions in the
financial and capital goods sectors and by our underweighted
position in the technology sector. Favorably impacting the
Portfolio's performance was our overweighted position in the energy
industry.
Financial issues were constrained by the prospect of rising interest
rates and by tough competitive market conditions. Capital goods
issues were hindered by earnings disappointments as well as by
concerns over a Federal Reserve Board-induced slowing in the pace of
economic growth. We added to many positions in these two downtrodden
areas as we viewed the valuations and turnaround potentials as
compelling. For example, First Union Corporation and The Allstate
Corporation were available at very modest multiples of 9.0 times and
8.1 times 2000 estimated earnings per share, respectively, and
Northrop Grumman Corporation was trading at an inexpensive 7.4 times
2000 estimated earnings per share. With these valuation attributes
and with improving year-ahead prospects, we believe the risk/reward
ratios appeared to be favorable.
Our underweighted position in the technology area reflected the lack
of basic value opportunities in this market-leading sector. The
technology-laden NASDAQ Index soared +57.2% in the year, bolstered
by the frenzied pace of initial public offering activity in the
Internet arena. Issues in the high-growth technology sector
generally do not possess the strict valuation characteristics
required of new commitments to the Fundamental Value Portfolio. Our
overweighted position in the energy area proved a beneficial
influence as the sector was bolstered by the March OPEC accord, by
an improved supply/demand equation and by consolidation activity.
Looking more closely at the Portfolio's performance, leading
individual investments included our energy holdings in Enron Corp.
(+103.4%), BP Amoco PLC (+32.5%), Halliburton Company (+21.3%),
Diamond Offshore Drilling, Inc. (+20.9%) and Exxon Mobil Corporation
(+18.8%) and technology positions in Motorola, Inc. (+88.4%),
Novell, Inc. (+63.8%), Hewlett-Packard Company (+37.8%) and
International Business Machines Corporation (+22.4%). Positions
eliminated in the period at sizable profits included Bristol-Myers
Squibb Co., Pharmacia & Upjohn, Inc., Texas Instruments, Inc.,
Aetna, Inc., Atlantic Richfield Co. and Kimberly-Clark Corp.
Individual issues adversely impacting the Portfolio's performance
were the financial equities of Associates First Capital Corporation
(-50.8%), National City Corporation (-39.3%) and The Allstate
Corporation (-38.5%). Other detractors included Lockheed Martin
Corporation, Hercules, Inc. and Crown Cork & Seal Company, Inc.
Portfolio Matters
In the last quarter of the period, we initiated positions in the out-
of-favor pharmaceutical, financial and real estate investment trust
sectors with key new commitments including American Home Products
Corporation, Becton Dickinson, & Company, The CIT Group, Inc. and
Simon Property Group, Inc. All were trading at depressed levels and
appeared to us to offer bright appreciation prospects. As of January
31, 2000, the Portfolio's top sectors included financials (20.4% of
Portfolio net assets), energy (14.2%), technology (13.8%) and
capital goods (12.7%).
Although the prospects for value equities deteriorated as the fiscal
year progressed, we believe the outlook going forward remains
bright. We continue to seek attractive, out-of-favor opportunities
with favorable long-term appreciation potential. We believe that
eventually investors will migrate from the high-flying technology
and growth areas to more reasonably valued equities. Fundamental
Value Portfolio would be a clear beneficiary of this development,
with a price/earnings multiple 60% of the S&P 500 Index and a
price/book ratio 45% of the market benchmark.
Global Opportunity Portfolio
Fiscal Year in Review
For the year ended January 31, 2000, Global Opportunity Portfolio's
Class A, Class B, Class C and Class D Shares had total returns of
+12.32%, +11.10%, +11.05% and +12.02%, respectively. (Results shown
do not reflect sales charges and would be lower if sales charges
were included.) During the fiscal year, foreign equities provided
the highest return among asset classes. Portfolio returns were
enhanced by our decision to expand the foreign equity representation
beginning early in the fiscal year, with a focus on enlarging the
commitment to Japan and expanding representation in emerging
markets. This increase included the establishment of positions in
Brazil in Latin America and in South Korea and Singapore in Asia.
The allocation of significant assets to new economy sectors in all
markets, including technology, business services, telecommunications
services and telecommunications equipment, also had a positive
effect on Portfolio returns. In the United States, technology was
the largest sector represented in the Portfolio throughout the
fiscal year, and this allocation proved rewarding. In contrast to
fiscal year 1999, the return on fixed-income securities lagged that
of equities by a substantial margin, but the negative impact was
limited by a significant reduction in our US bond representation
during the fiscal year.
Portfolio Matters
As of January 31, 2000, the asset allocation for Global Opportunity
Portfolio was: foreign stocks, 48% of net assets; US stocks, 25%;
foreign bonds, 12%; US bonds, 1%; and cash reserves, 14%.
During the three months ended January 31, 2000, equity
representation remained at 73% of net assets with the mix between
foreign and international equities unchanged. Among the equities
outside the United States, representation in European technology and
business services was enlarged through new positions in Equant and
Ericsson. Overall, Europe remains the largest regional commitment,
while Japan continued to be overweighted relative to the unmanaged
benchmark Morgan Stanley Capital International Europe, Australasia
Far East Index. We reestablished a hedge of the yen into US dollars
as we looked for renewed yen weakness. Our commitment to Asia
(excluding Japan) was increased through positions in City
Development and Singapore Airlines in Singapore. In Latin America,
we continued to focus on Brazil as offering the most favorable
reward/risk potential.
In the US equity sector, technology remained the largest single
group represented, accounting for nearly one-third of the US equity
assets. This commitment reflects our continuing emphasis on the
shares of companies where a consistent and above-average rate of
earnings growth should be extended over the next several years and
where valuations appear to us to be reasonable relative to earnings
growth potential. Consistent with this focus are our meaningful
investments in consumer staples, communication services, financials
and healthcare.
In the fixed-income sector, US bonds were reduced from 6% of net
assets to 1% during the three months ended January 31, 2000. We took
advantage of an interest rate increase to extend the average
duration from 4.5 years to 5.2 years, after reducing the duration
earlier. We believe the Federal Reserve Board will continue to
tighten monetary policy in 2000 until the US economy slows down.
Such a slowdown may ease fears of a resurgence of inflation and is
likely to enable intermediate-term--long-term US interest rates to
decline.
In the foreign bond sector, representation was reduced from 18% of
net assets to 12% during the three months ended January 31, 2000. We
reduced our position in German bonds in January because of concern
over a weakening euro, although we maintained our position in UK
bonds. We established positions in New Zealand and Australian bonds,
taking advantage of a widening yield differential between these
securities and US bonds of similar maturities.
Merrill Lynch Asset Builder Program, Inc., January 31, 2000
Growth Opportunity Portfolio
Fiscal Year in Review
For the fiscal year ended January 31, 2000, Growth Opportunity
Portfolio's Class A, Class B, Class C and Class D Shares had total
returns of +25.11%, +23.76%, +23.68% and +24.80%, respectively,
compared to the +10.35% total return for the unmanaged Standard &
Poor's 500 Index. (Fund results shown do not reflect sales charges
and would be lower if sales charges were included.) For the fiscal
year ended January 31, 2000, the total return for the Lipper
Analytical Services Large Capitalization Growth Funds Average was
+24.01%. The primary reason for the Portfolio's positive absolute
and comparative performance was our shift in portfolio strategy
during July and August when we focused more on the communication
equipment sector of the technology industries.
At January 31, 2000, the top ten industries (in declining order of
holdings) included communications equipment, energy, electronics,
wireline communication, computers, pharmaceuticals, banking &
financial, information processing, electrical equipment and
semiconductors. Some of the company stock investments, which were
substantial contributors to the positive investment returns,
included STMicroelectronics, Nortel Networks Corporation, Sun
Microsystems, Inc., Texas Instruments Incorporated, Cisco Systems,
Inc., CBS Corporation and Vodafone AirTouch PLC.
Quality Bond Portfolio
Investment Environment
During the year ended January 31, 2000, the fixed-income markets
were very volatile as interest rates developed a trend toward
significantly higher levels. For example, the 30-year US Treasury
bond, which began the period at 5.10%, was approximately 6.50% by
year-end. Investor expectations that the Federal Reserve Board would
move to tighten monetary policy in the face of inflationary fears
and strong economic growth worldwide led to the rise in Treasury
yields. Although inflationary pressures have been relatively well
contained because of significant improvements in productivity, gross
domestic product (GDP) growth and the correlating effect it has had
on the labor market prompted the Federal Reserve Board to raise
interest rates by 0.75 % during the period. For all intent, this
shift in monetary policy served to reverse the accommodative policy
that was implemented during the financial crises of 1998.
Despite the second quarter slowdown in GDP growth to 1.8%, economic
activity remained extremely robust throughout most of 1999, as
highlighted by the strong rebound in third quarter GDP to 5.7%,
which was followed by a 6.9% increase in fourth quarter GDP.
Consumer spending continued to lead the way, although recent reports
related to housing and auto purchases are beginning to show the
effect of higher interest rates. Consumers continued to benefit from
low unemployment rates and the wealth effect generated from a strong
stock market, although most of the gains were limited to only a few
sectors with performance in many of the established industries
lagging. Overseas, Asian countries at the heart of the crises in
1998 continued to recover.
This global recovery has, at times, led to fears of a rekindling of
inflation. Commodities, such as copper, aluminum, plywood and other
building materials, and chemicals, gained in price. More
importantly, oil prices surged, spurred on mainly by an agreement by
the Organization of Petroleum Exporting Countries to limit
production, but also on expectations of increased demand by
recovering economies. Wage inflation continued to be of concern
given the level of unemployment that the economy has achieved.
However, inflation as measured by both the price producer index and
consumer price index remains well within acceptable levels for the
most part, with productivity measurements still extremely favorable.
On the corporate bond front, by mid-year underwriting activity
increased significantly as issuers sought to get their funding
programs in before the final quarter of the fiscal year. Corporate
yield spreads relative to US Treasury securities, which began 1999
on a positive trend, widened across all sectors during the period
from May through September. However, since late September, corporate
bond yield spreads tightened following a sooner-than-expected drop
in new underwriting activity. Furthermore, investors began to pump
new money into the investment-grade sector given the higher yields
and strong relative value attributes. With respect to sector
performance, Yankee or foreign issues outperformed the domestic
issues and bonds rated BBB outperformed those rated A or better on
both a price and total return basis.
Fiscal Year in Review
Our investment strategy for the Portfolio, relative to the unmanaged
benchmark Merrill Lynch Corporate Master Bond Index, remained
somewhat conservative given the outlook for higher interest rates
and wider yield spreads. From a duration perspective, we maintained
a duration that was modestly short (0.15 years--0.25 years) relative
to the Index. Initially, it was our strategy to bring duration
closer to the Index when the yields would climb closer to the high
end of the expected range. By early August, we began to reallocate a
portion of assets away from corporate bonds and into cash and
Treasury issues, in preparation for year-end liquidity needs.
Initially, we shifted approximately 10% of the Portfolio's holdings
into this sector, although improved fundamentals within the
investment-grade market prompted a partial reallocation back into
high-grade, large benchmark issues. By January 31, 2000, the
allocation to cash and Treasury issues were brought down to about
5%.
With respect to the Portfolio's corporate bond holdings, we remained
committed to the bigger, more liquid issues as well as an emphasis
on issues that provided higher coupons. As part of our liquidity
strategy, we have attempted to consolidate industry holdings into
the benchmark issues. Although this came at modest yield
concessions, we believed this was the prudent course of action as a
result of Year 2000 uncertainties. Given the increased supply and
higher interest rate environment, many of the new corporate
transactions were done at larger-than-anticipated yield spread
concessions in order to attract investors. In light of the temporary
supply factor and wider yield spreads, we believed corporate bonds
possessed some very attractive long-term relative value attributes.
Accordingly, during the final quarter of the fiscal year, we
continued to redirect excess assets back to corporate bonds in an
effort to enhance income.
The Portfolio held overweighted positions in electric utilities,
finance companies, cable and media entities, retailers, energy-
related issuers, airlines and defense contractors and information
technology entities for most of the period. During the latter part
of the period, we began to reduce our holdings in defense issues,
high-end retailers, airlines and real estate investment trusts.
However, we concentrated on adding to positions in domestic banks,
supermarkets, railroads and metals/mining companies. The Portfolio
continues to be underweighted in property and casualty insurers and
health care companies.
For the 12 months ended January 31, 2000, the Portfolio's Class A,
Class B, Class C and Class D Shares had total returns of -3.39%,
- -4.01%, -4.06% and -3.53%, respectively, compared to a -3.20% total
return for the unmanaged benchmark Merrill Lynch Corporate Master
Bond Index and a -3.62% total return for the Lipper Corporate Debt
Funds A Rated Group Average. (Fund results shown do not reflect
sales charges and would be lower if sales charges were included.)
Relative to the Merrill Lynch Corporate Master Bond Index, the
Portfolio's performance was favorably impacted by a 10%
overweighting to corporate bonds rated BBB/Baa. During 1999, the
Merrill Lynch Corporate BBB Rated Index outperformed the Merrill
Lynch Corporate A-AAA Rated Index by 1.56%.
Looking ahead, we have formulated an investment strategy based upon
our belief that the long-term trend will be toward lower interest
rates and a flatter yield curve as the economy slows. With respect
to corporate bonds, we are looking for yield spread relationships to
exhibit further improvement as we proceed into the second quarter of
2000. However, in the near term, it is likely that the US Treasury
market will remain under pressure with the Federal Reserve Board
likely moving short-term interest rates higher in the coming months.
US Government Securities Portfolio
Fiscal Year in Review
During the fiscal year ended January 31, 2000, interest rates rose
across the board. In an effort to slow the ever-growing US economy
and reduce the threat of inflation, the Federal Reserve Board
elected to tighten monetary policy three times during the period.
This brought the Federal Funds rate 75 basis points (0.75%) higher
to 5.50% from 4.75% where it began the period. Two-year, five-year
and ten-year Treasury note yields rose 2.02%, 2.14% and 2.01%,
respectively, while the 30-year Treasury yield rose 1.40%. This
caused the two-year--30-year sector of the Treasury yield curve to
be inverted for the first time in over ten years.
Mortgage-backed securities (MBS) significantly outperformed their
Treasury benchmarks for the fiscal year. This can be seen in a very
broad sense by the returns of the Salomon Smith Barney Mortgage and
Treasury Indexes, as the mortgage index outperformed the Treasury
index by more than 300 basis points on a total rate-of-return basis.
More specifically, Government National Mortgage Association (GNMA)
securities 30-year 7.50%, the Portfolio's largest 30-year MBS
position, had a return of +1.51% for the period. This compared
favorably to the ten-year Treasury note, which had a similar average
life, and returned -9.69% for the same period, representing over 100
basis points in yield spread tightening. Even with yield spreads
narrower from where they began the period, MBS were an exceptional
value.
At the beginning of the fiscal year, 30-year 6% MBS represented the
current coupon. However, by the end of the period the current coupon
MBS was two full points higher at 8%. With mortgage rates rising
above 8% late in the period, 90% of the passthrough market was
comprised of discount and current coupon MBS. As a result,
prepayment fears no longer exist. In fact, prepayments on discount
MBS have been welcomed as prepayments are made to the MBS investor
at par.
As interest rates rose, concerns in the MBS market shifted from
having MBS mature too early in a falling interest rate environment
to having them mature too late in a rising interest rate
environment. As prepayment concerns shifted to extension fears,
several trades were done in an effort to seek to protect the
Portfolio from extension risk. These moves included increasing the
15-year MBS allocation, moving higher in coupon and purchasing short-
term Treasury notes. These shifts worked out well as 15-year MBS
outperformed 30-year MBS. This can be illustrated by the performance
of the 15-year Federal National Mortgage Association (FNMA) 6.50%,
which returned +0.98% for the period compared to the 30-year FNMA
6.50%, which returned -0.99%, almost 200 basis points less for the
same period.
For the year ended January 31, 2000, the Portfolio's Class A, Class
B, Class C and Class D Shares had total returns of -0.28%, -1.13%,
- -1.18% and -0.63%, respectively. (Fund results shown do not reflect
sales charges and would be lower if sales charges were included.)
The Portfolio significantly outperformed the Salomon Smith Barney
Treasury and Aggregate Indexes for the fiscal year. However, since
our portfolio strategy has been to avoid prepayment-sensitive MBS,
we did underperform the mortgage index. Though we were heavily
invested in MBS, which benefited the Portfolio, we refrained from
investing in prepayment-sensitive MBS. These securities, which have
relatively shorter durations and higher coupons, underperform most
MBS in a falling interest rate environment and outperform in a
rising rate environment--such as the one we experienced during the
fiscal year.
We purchased a short-term Treasury note that helped maintain the
duration of the Portfolio in a rising interest rate environment.
Although interest rates rose significantly for all benchmarks,
shorter-term securities did not suffer the significant price
declines that longer-term securities did. Further helping the
performance of the Portfolio were our purchases of relatively higher-
coupon MBS. As interest rates rose and prices fell, the only source
of income came from coupons. Very late in the period as the yield
curve inverted, we also sold our Treasury STRIP position.
The Portfolio greatly benefited from being heavily weighted in MBS
for the period as MBS outperformed all other sectors of the Salomon
Broad Investment-Grade Bond Index. In January, the Federal Reserve
Board announced its buy back program of long-term debt, which aided
the inversion of the US Treasury yield curve. Although the yield
curve inversion is a purely technically driven event, when coupled
with the increased volatility experienced very late in the period it
caused MBS yields to widen compared to their benchmarks. This should
be looked at as a buying opportunity for fixed-income investors. For
example, 30-year FNMA 8% at the end of the period offered a yield
spread of 140 basis points more than the ten-year Treasury note--a
benchmark for MBS. Because these securities are priced around par,
they have very little prepayment risk. FNMA 30-year 6% offered a
yield advantage of 110 basis points more than the ten-year Treasury
note and its ten-point discounted price gave it an additional
enhancement.
Going forward, the Federal Reserve Board will continue to monitor
the growth of the economy and the threat of inflation, and changes
in monetary policy will occur accordingly. We believe that MBS will
continue to perform well as the superior credit quality, reduced
supply and excellent prepayment fundamentals, coupled with their
additional yield advantage, make MBS a very attractive fixed-income
investment.
In Conclusion
Effective on or about April 3, 2000, Merrill Lynch Asset Builder
Program, Inc. will change its name to The Asset Program, Inc. For
more information, please see Note 7 in the Notes to the Financial
Statements on page 62 of this report to shareholders.
We thank you for your investment in Merrill Lynch Asset Builder
Program, Inc.
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
(Lawrence R. Fuller)
Lawrence R. Fuller
Senior Vice President and
Portfolio Manager
Growth Opportunity Portfolio
(Thomas R. Robinson)
Thomas R. Robinson
Senior Vice President and
Portfolio Manager
Global Opportunity Portfolio
(Christopher G. Ayoub)
Christopher G. Ayoub
Senior Vice President and
Portfolio Manager
Quality Bond Portfolio
(Gregory Mark Maunz)
Gregory Mark Maunz
Senior Vice President and
Portfolio Manager
US Government Securities Portfolio
March 9, 2000
Merrill Lynch Asset Builder Program, Inc., January 31, 2000
PERFORMANCE DATA
About Fund
Performance
Investors are able to purchase shares of the Program through the
Merrill Lynch Select Pricing SM System, which offers four pricing
alternatives:
* Class A Shares incur a maximum initial sales charge (front-end
load) of 5.25% and bear no ongoing distribution or account
maintenance fees for Fundamental Value, Global Opportunity and
Growth Opportunity Portfolios. Quality Bond and US Government
Securities Portfolios incur a maximum initial sales charge (front-
end load) of 4% and bear no ongoing distribution or account
maintenance fees. Class A Shares are available only to eligible
investors.
* Class B Shares are subject to a maximum contingent deferred sales
charge of 4% if redeemed during the first year, decreasing 1% each
year thereafter to 0% after the fourth year for Fundamental Value,
Global Opportunity, Growth Opportunity, Quality Bond and US
Government Securities Portfolios. In addition, Quality Bond and US
Government Securities Portfolios are subject to a distri-bution fee
of 0.50% and an account maintenance fee of 0.25%. Fundamental Value,
Global Opportunity and Growth Opportunity Portfolios are subject to
a 0.75% distribution fee and a 0.25% account maintenance fee.
Fundamental Value, Global Opportunity and Growth Opportunity
Portfolios automatically convert to Class D Shares after
approximately 8 years. Quality Bond and US Government Securities
Portfolios automatically convert to Class D Shares after
approximately 10 years. (There is no initial sales charge for
automatic share conversions.)
* Class C Shares are subject to a distribution fee of 0.55% and an
account maintenance fee of 0.25% for Quality Bond and US Government
Securities Portfolios. Fundamental Value, Global Opportunity and
Growth Opportunity Portfolios are subject to a distribution fee of
0.75% and an account maintenance fee of 0.25%. In addition, Class C
Shares are subject to a 1% contingent deferred sales charge if
redeemed within one year of purchase.
* Class D Shares incur a maximum initial sales charge of 5.25% and
an account maintenance fee of 0.25% (but no distribution fee) for
Fundamental Value, Global Opportunity and Growth Opportunity
Portfolios. Quality Bond and US Government Securities Portfolios
incur a maximum initial sales charge of 4% and an account
maintenance fee of 0.25% (but no distribution fee).
None of the past results shown should be considered a representation
of future performance. Figures shown in the "Recent Performance
Results" and "Average Annual Total Return" tables assume
reinvestment of all dividends and capital gains distributions at net
asset value on the ex-dividend or payable date. Investment return
and principal value of shares will fluctuate so that shares, when
redeemed, may be worth more or less than their original cost.
Dividends paid to each class of shares will vary because of the
different levels of account maintenance, distribution and transfer
agency fees applicable to each class, which are deducted from the
income available to be paid to shareholders. The Program's
Investment Adviser voluntarily waived a portion of its management
fee for the Portfolios. Without such waiver, the performance would
have been lower for these Portfolios.
Merrill Lynch Asset Builder Program, Inc., January 31, 2000
PERFORMANCE DATA (continued)
Fundamental Value Portfolio
Total Return Based on a $10,000 Investment
A line graph depicting the growth of an investment in the
Fundamental Value Portfolio Class A and Class B Shares
compared to growth of an investment in the Lipper Growth &
Income Fund Index++++ and the S&P 500 Index++++++.
Beginning and ending values are:
2/01/95** 1/00
Fundamental Value Portfolio++--
Class A Shares* $10,000 $18,275
Fundamental Value Portfolio++--
Class B Shares* $10,000 $18,274
Lipper Growth & Income Fund Index++++ $10,000 $25,154
S & P 500 Index++++++ $10,000 $32,505
A line graph depicting the growth of an investment in the
Fundamental Value Portfolio Class C and Class D Shares
compared to growth of an investment in the Lipper Growth &
Income Fund Index++++ and the S&P 500 Index++++++.
Beginning and ending values are:
2/01/95** 1/00
Fundamental Value Portfolio++--
Class C Shares* $10,000 $18,254
Fundamental Value Portfolio++--
Class D Shares* $10,000 $18,060
Lipper Growth & Income Fund Index++++ $10,000 $25,154
S & P 500 Index++++++ $10,000 $32,505
*Assuming maximum sales charge, transaction costs and other
operating expenses, including advisory fees.
**Commencement of operations.
++Fundamental Value Portfolio invests in equities, primarily common
stocks and, to a lesser extent, securities convertible into common
stock, as well as preferred stocks and non-convertible debt
securities.
++++Lipper Growth & Income Fund Index is an equally weighted Index
of the largest growth and income mutual funds. The starting date for
the Index in each graph is from January 31, 1995.
++++++This unmanaged broad-based Index is comprised of common
stocks.
Past performance is not predictive of future performance.
Fundamental
Value Portfolio
Average Annual
Total Returns
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 12/31/99 + 7.94% + 2.28%
Inception (2/01/95) to 12/31/99 +15.15 +13.89
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 12/31/99 + 6.75% + 2.75%
Inception (2/01/95) to 12/31/99 +13.92 +13.92
*Maximum contingent deferred sales charge is 4% and is reduced to 0%
after 4 years.
**Assuming payment of applicable contingent deferred sales charge.
% Return % Return
Without CDSC With CDSC**
Class C Shares*
Year Ended 12/31/99 + 6.68% + 5.68%
Inception (2/01/95) to 12/31/99 +13.89 +13.89
*Maximum contingent deferred sales charge is 1% and is reduced to 0%
after 1 year.
**Assuming payment of applicable contingent deferred sales charge.
% Return Without % Return With
Sales Charge Sales Charge**
Class D Shares*
Year Ended 12/31/99 + 7.66% + 2.00%
Inception (2/01/95) to 12/31/99 +14.88 +13.62
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
Merrill Lynch Asset Builder Program, Inc., January 31, 2000
PERFORMANCE DATA (continued)
Global Opportunity Portfolio
Total Return Based on a $10,000 Investment
A line graph depicting the growth of an investment in the
Global Opportunity Portfolio Class A and Class B Shares
compared to growth of an investment in the Morgan Stanley
Capital International World Index++++, the Salomon Brothers
World Government Bond Index+++++++ and the S&P 500
Index++++++++. Beginning and ending values are:
2/01/95** 1/00
Global Opportunity Portfolio++--
Class A Shares* $10,000 $15,675
Global Opportunity Portfolio++--
Class B Shares* $10,000 $15,671
Morgan Stanley Capital
International World Index++++ $10,000 $23,581
Salomon Brothers World Government
Bond Index+++++++ $10,000 $13,120
S & P 500 Index++++++ $10,000 $32,505
A line graph depicting the growth of an investment in the
Global Opportunity Portfolio Class C and Class D Shares
compared to growth of an investment in the Morgan Stanley
Capital International World Index++++, the Salomon Brothers
World Government Bond Index+++++++ and the S&P 500
Index++++++++. Beginning and ending values are:
2/01/95** 1/00
Global Opportunity Portfolio++--
Class C Shares* $10,000 $15,637
Global Opportunity Portfolio++--
Class D Shares* $10,000 $15,491
Morgan Stanley Capital
International World Index++++ $10,000 $23,561
Salomon Brothers World Government
Bond Index+++++++ $10,000 $13,120
S & P 500 Index++++++ $10,000 $32,505
*Assuming maximum sales charge, transaction costs and other
operating expenses, including advisory fees.
**Commencement of operations.
++Global Opportunity Portfolio invests in a portfolio of US and
foreign equity, debt and money market securities.
++++This unmanaged market capitalization-weighted Index is comprised
of a representative sampling of stocks of large-, medium- and small-
capitalization companies in various countries, including the United
States. The starting date for the Index in each graph is from
1/31/95.
++++++This unmanaged market capitalization-weighted Index tracks the
performance of the government bond markets of Australia, Austria,
Belgium, Canada, Denmark, France, Germany, Italy, Japan, the
Netherlands, Spain, Sweden, the United Kingdom and the United
States.
++++++++This unmanaged broad-based Index is comprised of common
stocks.
Past performance is not predictive of future performance.
Global
Opportunity
Portfolio
Average Annual
Total Returns
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 12/31/99 +20.54% +14.21%
Inception (2/01/95) to 12/31/99 +11.87 +10.65
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 12/31/99 +19.20% +15.20%
Inception (2/01/95) to 12/31/99 +10.67 +10.67
*Maximum contingent deferred sales charge is 4% and is reduced to 0%
after 4 years.
**Assuming payment of applicable contingent deferred sales charge.
% Return % Return
Without CDSC With CDSC**
Class C Shares*
Year Ended 12/31/99 +19.17% +18.17%
Inception (2/01/95) to 12/31/99 +10.63 +10.63
*Maximum contingent deferred sales charge is 1% and is reduced to 0%
after 1 year.
**Assuming payment of applicable contingent deferred sales charge.
% Return Without % Return With
Sales Charge Sales Charge**
Class D Shares*
Year Ended 12/31/99 +20.25% +13.94%
Inception (2/01/95) to 12/31/99 +11.61 +10.39
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
Merrill Lynch Asset Builder Program, Inc., January 31, 2000
PERFORMANCE DATA (continued)
Growth Opportunity Portfolio
Total Return Based on a $10,000 Investment
A line graph depicting the growth of an investment in the
Growth Opportunity Portfolio Class A and Class B Shares
compared to growth of an investment in the Lipper Growth &
Income Fund Index++++. Beginning and ending values are:
2/02/96** 1/00
Growth Opportunity Portfolio++--
Class A Shares* $10,000 $24,517
Growth Opportunity Portfolio++--
Class B Shares* $10,000 $24,692
Lipper Growth & Income Fund Index++++ $10,000 $22,434
A line graph depicting the growth of an investment in the
Growth Opportunity Portfolio Class A and Class B Shares
compared to growth of an investment in the Lipper Growth &
Income Fund Index++++. Beginning and ending values are:
2/02/96** 1/00
Growth Opportunity Portfolio++--
Class C Shares* $10,000 $24,755
Growth Opportunity Portfolio++--
Class D Shares* $10,000 $24,318
Lipper Growth & Income Fund Index++++ $10,000 $22,434
*Assuming maximum sales charge, transaction costs and other
operating expenses, including advisory fees.
**Commencement of operations.
++Growth Opportunity Portfolio invests in a portfolio of equity
securities, placing particular emphasis on large-capitalization
companies that are anticipated to exhibit above-average growth rates
in earnings.
++++Lipper Growth Fund Index is an equally weighted index of the
largest mutual funds which normally invest in companies whose long-
term earnings are expected to grow significantly faster than the
earnings of the stocks represented in the major unmanaged stock
indexes. The index is adjusted for reinvestment of capital gains
distributions and income dividends. The starting date for the Index
in each graph is from 2/01/96.
Past performance is not predictive of future performance.
Growth
Opportunity
Portfolio
Average Annual
Total Returns
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 12/31/99 +33.88% +26.85%
Inception (2/02/96) to 12/31/99 +27.48 +25.73
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 12/31/99 +32.45% +28.45%
Inception (2/02/96) to 12/31/99 +26.14 +26.01
*Maximum contingent deferred sales charge is 4% and is reduced to 0%
after 4 years.
**Assuming payment of applicable contingent deferred sales charge.
% Return % Return
Without CDSC With CDSC**
Class C Shares*
Year Ended 12/31/99 +32.45% +31.45%
Inception (2/02/96) to 12/31/99 +26.09 +26.09
*Maximum contingent deferred sales charge is 1% and is reduced to 0%
after 1 year.
**Assuming payment of applicable contingent deferred sales charge.
% Return Without % Return With
Sales Charge Sales Charge**
Class D Shares*
Year Ended 12/31/99 +33.62% +26.60%
Inception (2/02/96) to 12/31/99 +27.23 +25.49
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
Merrill Lynch Asset Builder Program, Inc., January 31, 2000
PERFORMANCE DATA (continued)
Quality Bond Portfolio
Total Return Based on a $10,000 Investment
A line graph depicting the growth of an investment in the
Quality Bond Portfolio Class A and Class B Shares compared
to growth of an investment in the ML Corporate Master Bond
Index++++. Beginning and ending values are:
2/01/95** 1/00
Quality Bond Portfolio++--
Class A Shares* $10,000 $15,675
Quality Bond Portfolio++--
Class B Shares* $10,000 $15,671
ML Corporate Master
Bond Index++++++++ $10,000 $23,581
A line graph depicting the growth of an investment in the
Quality Bond Portfolio Class C and Class D Shares compared
to growth of an investment in the ML Corporate Master Bond
Index++++. Beginning and ending values are:
2/01/95** 1/00
Quality Bond Portfolio++--
Class C Shares* $10,000 $12,451
Quality Bond Portfolio++--
Class D Shares* $10,000 $12,331
ML Corporate Master
Bond Index++++++++ $10,000 $14,505
*Assuming maximum sales charge, transaction costs and other
operating expenses, including advisory fees.
**Commencement of operations.
++Quality Bond Portfolio invests in a diversified portfolio of debt
obligations, including corporate bonds and notes, convertible
securities, preferred stocks and government obligations. The
Portfolio will invest primarily in securities rated in the top three
rating categories (A or better) of a nationally recognized rating
agency or in securities with similar credit characteristics.
++++This unmanaged Index is comprised of all investment-grade
corporate bonds rated BB3 or higher, of all maturities.
Past performance is not predictive of future performance.
Quality Bond
Portfolio
Average Annual
Total Returns
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 12/31/99 -2.46% -6.37%
Inception (2/01/95) to 12/31/99 +5.53 +4.66
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 12/31/99 -2.99% -6.63%
Inception (2/01/95) to 12/31/99 +4.70 +4.70
*Maximum contingent deferred sales charge is 4% and is reduced to 0%
after 4 years.
**Assuming payment of applicable contingent deferred sales charge.
% Return % Return
Without CDSC With CDSC**
Class C Shares*
Year Ended 12/31/99 -3.04% -3.95%
Inception (2/01/95) to 12/31/99 +4.64 +4.64
*Maximum contingent deferred sales charge is 1% and is reduced to 0%
after 1 year.
**Assuming payment of applicable contingent deferred sales charge.
% Return Without % Return With
Sales Charge Sales Charge**
Class D Shares*
Year Ended 12/31/99 -2.51% -6.41%
Inception (2/01/95) to 12/31/99 +5.29 +4.42
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
US Government Securities Portfolio
Total Return Based on a $10,000 Investment
A line graph depicting the growth of an investment in the
US Government Securities Portfolio Class A and Class B Shares
compared to growth of an investment in the Salomon Brothers
Mortgage Index++++. Beginning and ending values are:
2/01/95** 1/00
US Government Securities Portfolio++--
Class A Shares* $10,000 $13,890
US Government Securities Portfolio++--
Class B Shares* $10,000 $13,879
ML Corporate Master
Bond Index++++++++ $10,000 $14,272
A line graph depicting the growth of an investment in the
US Government Securities Portfolio Class A and Class B Shares
compared to growth of an investment in the Salomon Brothers
Mortgage Index++++. Beginning and ending values are:
2/01/95** 1/00
US Government Securities Portfolio++--
Class A Shares* $10,000 $13,838
US Government Securities Portfolio++--
Class B Shares* $10,000 $13,696
ML Corporate Master
Bond Index++++++++ $10,000 $14,272
*Assuming maximum sales charge, transaction costs and other
operating expenses, including advisory fees.
**Commencement of operations.
++US Government Securities Portfolio invests in marketable securities
issued or guaranteed by the USGovernment, by various agencies of the
US Government and by various instrumentalities which have been
established or sponsored by the US Government.
++++This unmanaged Index reflects the performance of a capital
market weighting of the outstanding agency issued mortgage-backed
securities.
Past performance is not predictive of future performance.
US Government
Securities
Portfolio
Average Annual
Total Returns
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 12/31/99 +0.83% -3.20%
Inception (2/01/95) to 12/31/99 +7.92 +7.02
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 12/31/99 +0.08% -3.70%
Inception (2/01/95) to 12/31/99 +7.06 +7.06
*Maximum contingent deferred sales charge is 4% and is reduced to 0%
after 4 years.
**Assuming payment of applicable contingent deferred sales charge.
% Return % Return
Without CDSC With CDSC**
Class C Shares*
Year Ended 12/31/99 +0.03% -0.92%
Inception (2/01/95) to 12/31/99 +7.00 +7.00
*Maximum contingent deferred sales charge is 1% and is reduced to 0%
after 1 year.
**Assuming payment of applicable contingent deferred sales charge.
% Return Without % Return With
Sales Charge Sales Charge**
Class D Shares*
Year Ended 12/31/99 +0.68% -3.35%
Inception (2/01/95) to 12/31/99 +7.66 +6.77
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
Merrill Lynch Asset Builder Program, Inc., January 31, 2000
PERFORMANCE DATA (concluded)
<TABLE>
Recent
Performance
Results*
<CAPTION>
3 Month 12 Month Since
Total Total Inception Standardized
As of January 31, 2000 Return Return Total Return 30-Day Yield
<S> <C> <C> <C> <C>
Fundamental Value Portfolio Class A Shares - 2.06% + 2.57% + 92.86% --
Fundamental Value Portfolio Class B Shares - 2.34 + 1.45 + 82.74 --
Fundamental Value Portfolio Class C Shares - 2.41 + 1.38 + 82.54 --
Fundamental Value Portfolio Class D Shares - 2.16 + 2.35 + 90.61 --
Global Opportunity Portfolio Class A Shares + 6.27 +12.32 + 65.42 --
Global Opportunity Portfolio Class B Shares + 5.91 +11.10 + 56.71 --
Global Opportunity Portfolio Class C Shares + 5.92 +11.05 + 56.37 --
Global Opportunity Portfolio Class D Shares + 6.21 +12.02 + 63.50 --
Growth Opportunity Portfolio Class A Shares +17.86 +25.11 +158.76 --
Growth Opportunity Portfolio Class B Shares +17.52 +23.76 +147.92 --
Growth Opportunity Portfolio Class C Shares +17.50 +23.68 +147.55 --
Growth Opportunity Portfolio Class D Shares +17.80 +24.80 +156.65 --
Quality Bond Portfolio Class A Shares - 0.63 - 3.39 + 29.92 7.25%
Quality Bond Portfolio Class B Shares - 0.81 - 4.01 + 24.91 6.80
Quality Bond Portfolio Class C Shares - 0.82 - 4.06 + 24.51 6.75
Quality Bond Portfolio Class D Shares - 0.58 - 3.53 + 28.46 7.02
US Government Securities Portfolio Class A Shares - 0.66 - 0.28 + 44.67 6.53
US Government Securities Portfolio Class B Shares - 1.05 - 1.13 + 38.79 6.06
US Government Securities Portfolio Class C Shares - 1.06 - 1.18 + 38.38 6.02
US Government Securities Portfolio Class D Shares - 0.92 - 0.63 + 42.67 6.31
<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 68,500 ++Scitex Corporation Ltd. (Ordinary) $ 1,078,875 1.1%
Total Investments in the Middle East
(Cost--$602,558) 1,078,875 1.1
NORTH
AMERICA
Canada Fertilizer 25,000 Potash Corporation of Saskatchewan Inc. 1,307,812 1.3
Total Investments in Canada 1,307,812 1.3
United Aerospace & Defenses 40,000 The Boeing Company 1,772,500 1.8
States 60,000 Lockheed Martin Corporation 1,125,000 1.1
20,000 Northrop Grumman Corporation 1,005,000 1.0
------------ ------
3,902,500 3.9
Automotive 120,000 Delphi Automotive Systems Corporation 2,077,500 2.1
18,000 General Motors Corporation 1,447,875 1.5
------------ ------
3,525,375 3.6
Banking & Financial 31,200 Associates First Capital Corporation (Class A) 624,000 0.6
75,000 The CIT Group, Inc. (Class A) 1,434,375 1.5
17,500 The Chase Manhattan Corporation 1,407,656 1.4
40,000 Citigroup Inc. 2,297,500 2.3
50,000 First Union Corporation 1,678,125 1.7
80,000 National City Corporation 1,730,000 1.8
50,000 Wells Fargo Company 2,000,000 2.0
------------ ------
11,171,656 11.3
Beverage & 25,000 The Seagram Company Ltd. 1,451,562 1.5
Entertainment
Capital Equipment 10,000 Eaton Corporation 714,375 0.7
Chemicals 25,000 E.I. du Pont de Nemours and Company 1,475,000 1.5
85,000 Hercules Incorporated 1,455,625 1.5
30,000 Monsanto Company 1,059,375 1.1
------------ ------
3,990,000 4.1
Communications 20,000 SBC Communications Inc. 862,500 0.9
Computer Equipment 80,000 Compaq Computer Corporation 2,190,000 2.2
20,000 Hewlett-Packard Company 2,165,000 2.2
------------ ------
4,355,000 4.4
Computer Software 55,000 ++Novell, Inc. 1,835,625 1.9
Electric Utilities 75,000 Cinergy Corp. 1,865,625 1.9
</TABLE>
Merrill Lynch Asset Builder Program, Inc., January 31, 2000
<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 Electrical Equipment 25,000 Emerson Electric Co. $ 1,376,563 1.4%
States 75,000 Thomas & Betts Corporation 2,282,812 2.3
(concluded) ------------ ------
3,659,375 3.7
Foods 70,000 General Mills, Inc. 2,183,125 2.2
70,000 Sara Lee Corporation 1,290,625 1.3
------------ ------
3,473,750 3.5
Hospital Management 70,000 Columbia/HCA Healthcare Corporation 1,911,875 1.9
44,150 ++Tenet Healthcare Corporation 1,004,412 1.0
------------ ------
2,916,287 2.9
Hospital Supplies 140,000 Becton, Dickinson and Company 3,666,250 3.7
Information Processing 26,000 International Business Machines Corporation 2,916,875 3.0
Insurance 170,000 Ace Limited 3,006,875 3.1
65,000 The Allstate Corporation 1,507,188 1.5
45,000 The Chubb Corporation 2,531,250 2.6
31,000 UnumProvident Corporation 829,250 0.8
------------ ------
7,874,563 8.0
Machinery 30,000 Deere & Company 1,310,625 1.3
30,000 ITT Industries, Inc. 948,750 1.0
------------ ------
2,259,375 2.3
Metals 50,000 Newmont Mining Corporation 1,018,750 1.0
Natural Gas 55,000 Burlington Resources Inc. 1,763,438 1.8
55,000 El Paso Energy Corporation 1,773,750 1.8
------------ ------
3,537,188 3.6
Oil--Domestic 60,000 Sunoco, Inc. 1,383,750 1.4
Oil--International 25,000 Exxon Mobil Corporation 2,087,500 2.1
Oil Services 60,000 Diamond Offshore Drilling, Inc. 1,661,250 1.7
40,000 Halliburton Company 1,440,000 1.5
------------ ------
3,101,250 3.2
Packaging 100,000 Crown Cork & Seal Company, Inc. 2,031,250 2.1
Paper & Forest 20,000 Champion International Corporation 1,170,000 1.2
Products
Petroleum 90,000 Unocal Corporation 2,576,250 2.6
Pharmaceutical-- 8,100 American Home Products Corporation 381,206 0.4
Diversified
Publishing 35,000 Knight Ridder, Inc. 1,865,938 1.9
Railroads 55,000 Union Pacific Corporation 2,200,000 2.2
Real Estate 45,000 Simon Property Group, Inc. 1,110,938 1.1
Investment Trust
Retail 25,000 ++Federated Department Stores, Inc. 1,040,625 1.1
Telecommunications 27,900 ++3Com Corporation 1,414,181 1.4
50,000 AT&T Corp. 2,637,500 2.7
15,000 Bell Atlantic Corporation 929,063 0.9
25,000 GTE Corporation 1,832,813 1.9
15,000 Motorola, Inc. 2,051,250 2.1
------------ ------
8,864,807 9.0
Tobacco 65,000 Philip Morris Companies Inc. 1,360,937 1.4
Total Investments in the United States 94,171,082 95.6
Total Investments in North America (Cost--
$94,111,648) 95,478,894 96.9
WESTERN
EUROPE
United Petroleum 24,404 BP Amoco PLC (ADR)* 1,311,715 1.3
Kingdom
Total Investments in Western Europe
(Cost--$941,412) 1,311,715 1.3
SHORT-TERM Face
SECURITIES Amount Issue
Commercial Paper** $ 2,098,000 General Electric Capital Corp., 5.78% due 2/01/2000 2,098,000 2.1
Total Investments in Short-Term Securities
(Cost--$2,098,000) 2,098,000 2.1
Total Investments (Cost--$97,753,618) 99,967,484 101.4
Liabilities in Excess of Other Assets (1,406,414) (1.4)
------------ ------
Net Assets $ 98,561,070 100.0%
============ ======
*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.
++Non-income producing security.
See Notes to Financial Statements.
</TABLE>
<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 6,000,000 BundesObligation, 4.75% due 11/20/2001 $ 5,902,154 9.4%
New Zealand NZ$ 1,240,000 New Zealand Government Bond, 8% due 4/15/2004 627,187 1.0
United Pound 500,000 United Kingdom Treasury Gilt, 7.25% due 12/07/2007 866,874 1.4
Kingdom Sterling
Total Investments in Foreign Government Obligations 7,396,215 11.8
</TABLE>
Merrill Lynch Asset Builder Program, Inc., January 31, 2000
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Global Opportunity Portfolio (continued)
Face Percent of
COUNTRY Amount US Government & Agency Obligations Value Net Assets
<S> <S> <S> <C> <S> <C> <C>
United States US$ 500,000 Federal National Mortgage Association, 5.25% due
1/15/2009 $ 432,030 0.7%
US Treasury Notes:
340,000 5% due 4/30/2001 333,890 0.5
120,000 5.75% due 6/30/2001 118,688 0.2
Total Investments in US Government & Agency
Obligations 884,608 1.4
Total Investments in Foreign &US Government &
Agency Obligations (Cost--$9,074,280) 8,280,823 13.2
Shares
Industries Held US Stocks
United Aerospace 900 The Boeing Company 39,881 0.1
States
Aerospace & Defense 2,725 United Technologies Corporation 144,255 0.2
Application Development 2,600 ++Siebel Systems, Inc. 238,388 0.4
Software
Banking 3,357 Bank of America Corporation 162,605 0.3
8,610 The Bank of New York Company, Inc. 349,781 0.6
1,200 The Chase Manhattan Corporation 96,525 0.1
------------ ------
608,911 1.0
Beverages 1,200 The Coca-Cola Company 68,925 0.1
5,940 PepsiCo, Inc. 202,703 0.3
------------ ------
271,628 0.4
Broadcast 1,400 ++UnitedGlobalCom Inc. (Class A) 97,213 0.1
Broadcasting & 1,100 ++TV Guide, Inc. (Class A) 40,700 0.1
Publishing
Broadcasting/Cable 10,000 ++AT&T Corp.--Liberty Media Group (Class A) 511,250 0.8
Building Products 2,470 ++American Tower Corporation (Class A) 87,994 0.1
Business Services 1,200 ++Oracle Corporation 59,925 0.1
Cable 11,700 ++Charter Communications, Inc. (Class A) 206,944 0.3
Chemicals 1,520 E.I. du Pont de Nemours and Company 89,680 0.1
2,500 Rohm and Haas Company 105,625 0.2
------------ ------
195,305 0.3
Commercial Services 2,200 ++Convergys Corporation 64,625 0.1
Communications 6,480 ++MCI WorldCom Inc. 297,270 0.5
Equipment
Computer Products 7,110 ++Cisco Systems, Inc. 778,101 1.2
Computer Services 800 ++America Online, Inc. 45,550 0.1
200 ++Safeguard Scientifics, Inc. 28,400 0.0
------------ ------
73,950 0.1
Computer Software 300 ++i2 Technologies, Inc. 57,600 0.1
5,780 ++Microsoft Corporation 565,356 0.9
1,500 ++Symantec Corporation 75,000 0.1
200 ++Yahoo! Inc. 64,400 0.1
------------ ------
762,356 1.2
Computers 2,300 Compaq Computer Corporation 62,962 0.1
3,160 ++EMC Corporation 336,540 0.5
1,900 International Business Machines Corporation 213,156 0.4
3,400 ++Sun Microsystems, Inc. 266,900 0.4
------------ ------
879,558 1.4
Conglomerates 2,200 Honeywell International Inc. 105,600 0.2
Consumer--Electronics 1,650 Tandy Corporation 80,644 0.1
Cosmetics 1,000 The Gillette Company 37,625 0.1
Electric & Gas 2,700 ++Calpine Corporation 197,437 0.3
Electrical & Electronics 700 ++The AES Corporation 56,087 0.1
Electrical Equipment 4,310 General Electric Company 574,846 0.9
Electronics 200 ++Broadcom Corporation (Class A) 57,862 0.1
900 Texas Instruments Incorporated 97,088 0.1
------------ ------
154,950 0.2
Finance 1,600 Federal Home Loan Mortgage Association 80,300 0.1
Financial Services 3,220 Associates First Capital Corporation (Class A) 64,400 0.1
4,150 Citigroup Inc. 238,366 0.4
2,800 Wells Fargo Company 112,000 0.2
------------ ------
414,766 0.7
Financial Services-- 2,800 Household International, Inc. 98,700 0.2
Consumer
Foods 4,900 ++Keebler Foods Company 111,781 0.2
Healthcare--Products 2,800 Columbia/HCA Healthcare Corporation 76,475 0.1
& Services
Household Products 2,280 Colgate-Palmolive Company 135,090 0.2
1,500 The Procter & Gamble Company 151,313 0.3
------------ ------
286,403 0.5
Information Processing 2,650 ++Unisys Corporation 84,469 0.1
Instruments 1,200 Millipore Corporation 51,375 0.1
Insurance 2,880 AXA Financial, Inc. 93,780 0.2
1,437 American International Group, Inc. 149,628 0.2
1,490 ++Clear Channel Communications, Inc. 128,699 0.2
------------ ------
372,107 0.6
Internet Software 200 ++Verio Inc. 12,800 0.0
Internetworking 400 ++InfoSpace.com, Inc. 56,050 0.1
600 ++Inktomi Corporation 59,662 0.1
400 ++Internet Capital Group, Inc. 47,600 0.1
------------ ------
163,312 0.3
Laser Systems & 3,800 ++JDS Uniphase Corporation 774,725 1.2
Components
Machinery & Equipment 962 Caterpillar Inc. 40,825 0.1
Medical Technology 4,400 Johnson & Johnson 378,675 0.6
</TABLE>
Merrill Lynch Asset Builder Program, Inc., January 31, 2000
<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 Metals 3,139 Alcoa Inc. $ 218,749 0.3%
States
(concluded) Natural Gas 5,950 Enron Corp. 401,253 0.6
Natural Resources 3,550 Burlington Resources Inc. 113,822 0.2
Oil--Integrated 3,564 Exxon Mobil Corporation 297,594 0.5
Oil Services 3,300 Schlumberger Limited 201,506 0.3
Paper & Forest Products 2,264 International Paper Company 107,823 0.2
Petroleum 3,840 Unocal Corporation 109,920 0.2
Pharmaceutical-- 1,775 American Home Products Corporation 83,536 0.1
Diversified 3,250 Bristol-Myers Squibb Company 214,500 0.4
------------ ------
298,036 0.5
Pharmaceutical-- 1,660 Pharmacia & Upjohn, Inc. 78,020 0.1
Prescription
Pharmaceuticals 2,950 Cardinal Health, Inc. 141,047 0.2
500 Eli Lilly and Company 33,438 0.1
4,650 Merck & Co., Inc. 366,478 0.6
5,140 Pfizer Inc. 186,968 0.3
------------ ------
727,931 1.2
Radio & Television 4,800 ++AMFM Inc. 374,400 0.6
Retail 2,000 ++Federated Department Stores, Inc. 83,250 0.2
5,260 ++Safeway Inc. 200,866 0.3
4,920 Wal-Mart Stores, Inc. 269,370 0.4
------------ ------
553,486 0.9
Retail--Specialty 3,900 Lowe's Companies, Inc. 174,038 0.3
Semiconductors 2,390 Intel Corporation 236,311 0.4
2,820 Motorola, Inc. 385,635 0.6
------------ ------
621,946 1.0
Software 2,000 ++Network Associates, Inc. 51,750 0.1
Telecommunications 1,900 ++3Com Corporation 96,306 0.2
8,405 AT&T Corp. 443,364 0.7
1,100 ++Adelphia Business Solutions, Inc. 56,237 0.1
2,400 ++Amdocs Limited 127,650 0.2
5,070 GTE Corporation 371,694 0.6
1,200 ++Global TeleSystems Group, Inc. 29,925 0.0
1,800 ++Latitude Communications, Inc. 49,275 0.1
2,760 Lucent Technologies Inc. 152,490 0.2
------------ ------
1,326,941 2.1
Transportation--Services 900 United Parcel Service, Inc. (Class B) 53,550 0.1
Utilities-- 4,198 SBC Communications Inc. 181,039 0.3
Communication
Wireless Communication-- 800 ++Nextel Communications, Inc. (Class A) 85,050 0.1
Domestic Paging 1,200 ++Sprint Corp. (PCS Group) 132,075 0.2
& Cellular ------------ ------
217,125 0.3
Total Investments in US Stocks 15,621,085 24.9
Foreign Stocks
Australia Broadcasting/Cable 3,400 The News Corporation Limited (Convertible
Diversified Preferred) (ADR)* 138,975 0.2
19,400 Broken Hill Proprietary Company Limited 231,865 0.4
Total Stocks in Australia 370,840 0.6
Austria Paper Products 3,400 Mayr-Melnhof Karton AG 182,431 0.3
Total Stocks in Austria 182,431 0.3
Bermuda Telecommunications & 1,500 ++Global Crossing Ltd. 76,031 0.1
Equipment
Total Stocks in Bermuda 76,031 0.1
Brazil Forest Products 7,800 Aracruz Celulose SA (ADR)* 175,013 0.3
Metals & Mining 7,200 Companhia Vale do Rio Doce 'A' (Preferred) 199,225 0.3
Oil--Integrated 480,000 Petroleo Brasileiro SA 90,318 0.1
Telecommunications 6,000 Embratel Participacoes SA (ADR)* 129,000 0.2
1,320 Telecomunicacoes Brasileiras SA-Telebras
(Preferred Block) (ADR)* 171,600 0.3
------------ ------
300,600 0.5
Total Stocks in Brazil 765,156 1.2
Canada Communications 3,600 Nortel Networks Corporation 344,250 0.6
Equipment
Oil & Gas Producers 4,100 Alberta Energy Company Ltd. 120,305 0.2
Paper Products 17,400 Domtar, Inc. 211,433 0.3
Telecommunications 3,800 BCE Inc. 388,312 0.6
7,100 Teleglobe Inc. 185,488 0.3
------------ ------
573,800 0.9
Total Stocks in Canada 1,249,788 2.0
Denmark Services 1,200 ++ISS International Service System A/S 'B' 85,962 0.1
Total Stocks in Denmark 85,962 0.1
Finland Communications Equipment 2,550 Nokia Oyj 462,227 0.7
Holding Company 11,200 Amer Group Ltd. 262,806 0.4
Insurance 5,700 Sampo Insurance Company Ltd. 'A' 197,838 0.3
Paper & Forest 17,000 Stora Enso Oyj 'R' 244,433 0.4
Products 7,700 UPM-Kymmene Oyj 288,334 0.5
------------ ------
532,767 0.9
Total Stocks in Finland 1,455,638 2.3
France Chemicals 6,522 Aventis SA 344,972 0.6
Computers & Computer 500 ++Atos SA 67,950 0.1
Services
</TABLE>
Merrill Lynch Asset Builder Program, Inc., January 31, 2000
<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 $ 196,909 0.3%
(concluded)
Foods 811 Groupe Danone 174,441 0.3
Information Processing 785 Cap Gemini SA 166,700 0.3
Insurance 2,800 Axa 352,871 0.6
4,900 Scor 244,327 0.4
------------ ------
597,198 1.0
Merchandising 1,212 Carrefour SA 193,032 0.3
Metals 5,700 Pechiney SA 'A' 384,529 0.6
Multimedia 4,040 ++Thomson Multimedia 302,958 0.5
Oil & Related 8 Elf Aquitaine SA 1,181 0.0
2,641 Total Fina SA 'B' 328,444 0.5
------------ ------
329,625 0.5
Semiconductor Capital 3,260 STMicroelectronics NV (NY Registered Shares) 548,903 0.9
Equipment
Telecommunications 3,600 France Telecom SA 466,363 0.7
Utilities--Water 3,795 Vivendi 389,589 0.6
Total Stocks in France 4,163,169 6.7
Germany Banking 2,780 Deutsche Bank AG (Registered Shares) 208,471 0.3
3,800 Dresdner Bank AG (Registered Shares) 183,162 0.3
------------ ------
391,633 0.6
Chemicals 3,100 Henkel KGaA (Preferred) 173,669 0.3
Diversified 3,145 RWE AG 100,702 0.2
Electronics 2,000 Siemens AG 275,516 0.4
Electronics Components 3,678 ++Epcos AG 330,830 0.5
Machinery & Equipment 1,800 Mannesmann AG 488,361 0.8
Multi-Industry 3,968 Veba AG 166,819 0.3
Total Stocks in Germany 1,927,530 3.1
Hong Kong Multi-Industry 13,000 Hutchison Whampoa Limited 187,147 0.3
Total Stocks in Hong Kong 187,147 0.3
Ireland Banking 28,200 Bank of Ireland 182,383 0.3
Total Stocks in Ireland 182,383 0.3
Italy Oil & Gas Producers 55,500 ENI SpA 262,630 0.4
Publishing 8,700 Mondadori (Arnoldo) Editore SpA 216,903 0.4
Total Stocks in Italy 479,533 0.8
Japan Appliances 1,050 Sony Corporation (ADR)* 266,634 0.4
Automobiles 6,000 Honda Motor Co., Ltd. 192,049 0.3
8,000 Toyota Motor Corporation 350,131 0.6
2,000 Toyota Motor Corporation (ADR)* 174,500 0.3
------------ ------
716,680 1.2
Banking & Financial 21,000 The Bank of Tokyo-Mitsubishi, Ltd. 268,869 0.4
26,000 The Sanwa Bank, Ltd. 274,169 0.5
------------ ------
543,038 0.9
Banking-- 23,000 The Sumitomo Bank, Ltd. 312,290 0.5
International
Chemicals 4,000 Shin-Etsu Chemical Co., Ltd. 214,259 0.4
Computer Products 2,000 TDK Corporation 212,206 0.3
Computers 17,000 NEC Corporation 364,875 0.6
Consumer-- 1,000 Rohm Company Ltd. 330,347 0.5
Electronics
Cosmetics & 10,000 Kao Corporation 273,423 0.4
Toiletries
Distribution 300 Softbank Corporation 293,953 0.5
Diversified 10,000 Olympus Optical Co., Ltd. 133,912 0.2
Electronics 7,000 Fujitsu Limited 259,332 0.4
11,000 Hitachi Ltd. 156,131 0.3
400 Keyence Corporation 136,245 0.2
2,000 Kyocera Corporation 337,999 0.5
12,000 Matsushita Electric Industrial Company, Ltd. 318,589 0.5
30,000 Toshiba Corporation 234,882 0.4
------------ ------
1,443,178 2.3
Electronics 1,000 Fanuc Ltd. 105,450 0.2
Components
Finance 2,000 Orix Corporation 373,274 0.6
Glass 46,000 Nippon Sheet Glass Company, Ltd. 379,899 0.6
Insurance 25,000 The Tokio Marine & Fire Insurance Co. Ltd. 259,425 0.4
Internet 1,100 ++Internet Initiative Japan Inc. (ADR)* 88,688 0.1
Machine Tools & 9,000 Minebea Company Ltd. 124,720 0.2
Machinery
Merchandising 13,000 Marui Co., Ltd. 181,971 0.3
Pharmaceuticals 5,000 Takeda Chemical Industries, Ltd. 270,623 0.4
Retail Stores 11,000 The Daimaru, Inc. 42,292 0.1
3,000 Ito-Yokado Co., Ltd. 273,796 0.4
16,000 ++Mitsukoshi, Ltd. 59,574 0.1
------------ ------
375,662 0.6
Steel 91,000 Nippon Steel Corporation 216,545 0.3
Telecommunications 12 NTT Mobile Communications Network, Inc. 407,615 0.7
22 Nippon Telegraph & Telephone Corporation (NTT) 332,587 0.5
------------ ------
740,202 1.2
Tires & Rubber 8,000 Bridgestone Corp. 169,093 0.3
Transport Services 58 East Japan Railway Company 274,412 0.4
Total Stocks in Japan 8,664,759 13.8
</TABLE>
Merrill Lynch Asset Builder Program, Inc., January 31, 2000
<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 Broadcasting & 6,400 Wolters Kluwer NV 'A' $ 231,269 0.4%
Publishing
Computer Software 1,235 Getronics NV 79,994 0.1
Computers 800 ++Equant 81,736 0.1
Electronic Components 1,200 ++ASM Lithography Holding NV 143,135 0.2
Electronics 2,600 Koninklijke (Royal) Philips Electronics NV
(NY Registered Shares) 384,150 0.6
Foods 17,000 CSM NV 352,363 0.6
3,933 Koninklijke Ahold NV 93,671 0.2
------------ ------
446,034 0.8
Human Resources 3,500 Vedior NV 'A' 30,284 0.1
Publishing 8,600 VNU NV 456,146 0.7
Retail 4,300 Vendex KBB NV 82,401 0.1
Total Stocks in the Netherlands 1,935,149 3.1
Norway Chemicals 3,800 Norsk Hydro ASA 150,668 0.2
Computer Software 17,500 Merkantildata ASA 200,967 0.3
Telecommunications 16,900 ++Tandberg Television ASA 149,133 0.3
Transport 7,200 Bergesen d.y. ASA 'B' 114,887 0.2
Services
Total Stocks in Norway 615,655 1.0
Singapore Airlines 14,000 Singapore Airlines Limited 146,502 0.2
Banking & Financial 6,978 DBS Group Holdings Limited 93,532 0.2
Construction & 27,000 City Developments Limited 134,921 0.2
Housing
Electronics 6,400 ++Flextronics International Ltd. 318,000 0.5
Components
Total Stocks in Singapore 692,955 1.1
South Korea Electronics 500 Samsung Electronics 124,221 0.2
Steel 4,200 Pohang Iron & Steel Company Ltd. (ADR)* 148,050 0.2
Total Stocks in South Korea 272,271 0.4
Spain Diversified 11,300 Dinamia Capital Privado. Sociedad de
Capital Riesgo, SA 87,832 0.1
Petroleum--Domestic 13,000 Repsol-YPF, SA 245,940 0.4
Telecommunications 14,400 ++Telefonica SA 364,643 0.6
Utilities--Electric 10,800 Endesa SA 199,674 0.3
Total Stocks in Spain 898,089 1.4
Sweden Appliances 13,800 Electrolux AB 'B' 294,104 0.5
Auto & Truck 4,600 Autoliv, Inc. 124,700 0.2
Automobile Parts 16,700 Haldex AB 189,818 0.3
Banking 8,250 ForeningsSparbanken AB 110,183 0.2
25,700 Nordbanken Holding AB 143,136 0.2
------------ ------
253,319 0.4
Diversified 1,800 Custos AB 'A' 44,602 0.1
4,600 Custos AB 'B' 112,936 0.2
------------ ------
157,538 0.3
Investment 20,400 Investment AB Bure 126,371 0.2
Management
Real Estate 13,100 Castellum AB 110,930 0.2
17,800 Fastighets AB Tornet 220,530 0.3
------------ ------
331,460 0.5
Telecommunications 5,400 Telefonaktiebolaget LM Ericsson 'B' 381,773 0.6
Total Stocks in Sweden 1,859,083 3.0
Switzerland Drugs 89 Novartis AG (Registered Shares) 109,889 0.2
Human Resources 116 Adecco SA (Registered Shares) 87,602 0.1
Pharmaceuticals 24 Roche Holding AG (Genuss) 259,965 0.4
Total Stocks in Switzerland 457,456 0.7
United Banking 23,800 HSBC Holdings PLC 279,090 0.4
Kingdom 21,900 Lloyds TSB Group PLC 220,960 0.4
------------ ------
500,050 0.8
Beverages 24,904 Diageo PLC 184,667 0.3
Cable Television 25,100 ++Telewest Communications PLC 153,066 0.2
Services
Diversified 47,800 Billiton PLC 248,111 0.4
Drugs 5,500 AstraZeneca Group PLC 202,535 0.3
Entertainment 11,800 The Peninsular and Oriental Steam Navigation Company 167,730 0.3
Foods 13,700 Devro PLC 15,543 0.0
Hardware Products 19,500 Reckitt Benckiser PLC 192,794 0.3
Leisure 47,400 Hilton Group PLC 130,412 0.2
Oil--Integrated 7,350 Shell Transport & Trading Company (ADR)* 322,481 0.5
Pharmaceuticals 9,100 Glaxo Wellcome PLC 233,924 0.4
16,000 SmithKline Beecham PLC 191,643 0.3
------------ ------
425,567 0.7
Telecommunications 8,900 British Telecommunications PLC 170,505 0.3
13,600 Cable & Wireless PLC 276,969 0.4
3,800 ++Energis PLC 177,319 0.3
63,000 Vodafone AirTouch PLC 345,644 0.6
------------ ------
970,437 1.6
Total Stocks in the United Kingdom 3,513,393 5.6
Total Investments in Foreign Stocks 30,034,418 47.9
Total Investments in US& Foreign Stocks
(Cost--$34,946,489) 45,655,503 72.8
</TABLE>
Merrill Lynch Asset Builder Program, Inc., January 31, 2000
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<CAPTION>
Global Opportunity Portfolio (concluded)
SHORT-TERM Face Percent of
SECURITIES Amount Issue Value Net Assets
<S> <S> <C> <S> <C> <C>
Commercial US$ 2,945,000 General Motors Acceptance Corp., 5.81% due
Paper** 2/01/2000 $ 2,945,000 4.7%
1,000,000 Honeywell International Inc., 5.65% due 2/23/2000 996,547 1.6
1,500,000 Morgan Stanley, Dean Witter & Co., 5.66%
due 2/18/2000 1,495,991 2.3
------------ ------
5,437,538 8.6
US Government 2,000,000 Federal Home Loan Mortgage Corporation, 5.55%
Agency due 2/22/2000 1,993,525 3.2
Obligations**
Total Investments in Short-Term Securities
(Cost--$7,431,063) 7,431,063 11.8
Total Investments (Cost--$51,451,832) 61,367,389 97.8
Unrealized Appreciation on Forward Foreign Exchange Contracts*** 113,560 0.2
Other Assets Less Liabilities 1,273,462 2.0
------------ ------
Net Assets $ 62,754,411 100.0%
============ ======
++Non-income producing security.
*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 Fund.
***Forward foreign exchange contracts as of January 31, 2000 were as
follows:
Foreign Expiration Unrealized
Currency Sold Date Appreciation
YEN 870,000,000 April 2000 $ 113,560
Total Unrealized Appreciation on Forward
Foreign Exchange Contracts
(US$ Commitment--$8,327,112) $ 113,560
=========
See Notes to Financial Statements.
</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. $ 1,196,000 0.6%
Banking & Financial 52,000 Bank of America Corporation 2,518,750 1.3
103,000 Citigroup Inc. 5,916,063 3.0
2,500 State Street Corporation 200,469 0.1
------------ ------
8,635,282 4.4
Beverages 58,000 The Coca-Cola Company 3,331,375 1.7
Broadcasting--Media 26,000 ++Infinity Broadcasting Corporation (Class A) 845,000 0.4
Broadcasting--Radio & 20,000 ++AMFM Inc. 1,560,000 0.8
Television 20,000 ++CBS Corporation 1,166,250 0.6
34,000 ++Clear Channel Communications, Inc. 2,936,750 1.5
------------ ------
5,663,000 2.9
Communications 61,000 ++3Com Corporation 3,091,938 1.6
Equipment 90,000 ++Cisco Systems, Inc. 9,849,375 5.0
19,000 ++E-Tek Dynamics, Inc. 3,458,000 1.8
30,000 ++JDS Uniphase Corporation 6,116,250 3.1
50,000 Lucent Technologies Inc. 2,762,500 1.4
34,000 Motorola, Inc. 4,649,500 2.3
52,000 Nortel Networks Corporation 4,972,500 2.5
46,000 Telefonaktiebolaget LM Ericsson (ADR)* 3,427,000 1.7
------------ ------
38,327,063 19.4
Computers 63,000 ++EMC Corporation 6,709,500 3.4
27,000 International Business Machines Corporation 3,029,062 1.5
82,000 ++Sun Microsystems, Inc. 6,437,000 3.3
------------ ------
16,175,562 8.2
Electrical Equipment 2,000 Emerson Electric Co. 110,125 0.1
55,000 General Electric Company 7,335,625 3.7
------------ ------
7,445,750 3.8
Electronics 11,000 ++ASM Lithography Holding NV 1,312,073 0.7
5,000 ++Broadcom Corporation (Class A) 1,446,563 0.7
28,000 ++LSI Logic Corporation 2,289,000 1.1
37,000 STMicroelectronics 6,059,296 3.1
56,000 Texas Instruments Incorporated 6,041,000 3.1
12,000 ++Xilinx, Inc. 549,000 0.3
------------ ------
17,696,932 9.0
Energy 57,800 BP Amoco PLC (ADR)* 3,106,750 1.6
12,000 Duke Energy Corporation 693,000 0.4
50,000 El Paso Energy Corporation 1,612,500 0.8
79,000 Enron Corp. 5,327,563 2.7
65,000 Exxon Mobil Corporation 5,427,500 2.8
51,000 Royal Dutch Petroleum Company (NY Registered Shares) 2,808,187 1.4
12,000 UtiliCorp United Inc. 234,750 0.1
------------ ------
19,210,250 9.8
Entertainment 16,000 ++AT&T Corp.--Liberty Media Group (Class A) 818,000 0.4
5,000 Sony Corporation (ADR)* 1,269,687 0.7
80,000 The Walt Disney Company 2,905,000 1.5
------------ ------
4,992,687 2.6
</TABLE>
Merrill Lynch Asset Builder Program, Inc., January 31, 2000
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Growth Opportunity Portfolio (concluded)
Shares Percent of
Industries Held Common Stocks Value Net Assets
<S> <C> <S> <C> <C>
Financial Services 17,000 T. Rowe Price Associates, Inc. $ 657,687 0.3%
Household Products 30,000 Colgate-Palmolive Company 1,777,500 0.9
29,000 The Procter & Gamble Company 2,925,375 1.5
------------ ------
4,702,875 2.4
Information Processing 80,000 ++America Online, Inc. 4,555,000 2.3
31,000 ++At Home Corporation (Class A) 1,116,000 0.6
7,000 ++China.Com Corporation 'A' 563,500 0.3
50,000 ++Infonet Services Corporation (Class B) 1,412,500 0.7
------------ ------
7,647,000 3.9
Insurance 34,000 American International Group, Inc. 3,540,250 1.8
Medical Technology 1,000 Johnson & Johnson 86,062 0.0
25,000 Medtronic, Inc. 1,143,750 0.6
------------ ------
1,229,812 0.6
Oil Services 57,000 Baker Hughes Incorporated 1,403,625 0.7
7,500 Diamond Offshore Drilling, Inc. 207,656 0.1
47,000 Schlumberger Limited 2,869,937 1.5
------------ ------
4,481,218 2.3
Pharmaceuticals 32,000 ++Amgen Inc. 2,038,000 1.0
30,000 Bristol-Myers Squibb Company 1,980,000 1.0
11,000 ++Immunex Corporation 1,438,250 0.7
36,000 Merck & Co., Inc. 2,837,250 1.5
67,000 Pfizer Inc. 2,437,125 1.3
------------ ------
10,730,625 5.5
Photography 21,000 Eastman Kodak Company 1,299,375 0.7
Restaurants 16,000 McDonald's Corporation 595,000 0.3
Retail--Specialty 11,000 ++Best Buy Co., Inc. 525,250 0.3
4,000 CVS Corporation 139,750 0.1
15,000 Walgreen Co. 414,375 0.2
------------ ------
1,079,375 0.6
Retailing 16,000 ++Amazon.com, Inc. 1,033,000 0.5
Semiconductors 34,000 ++Applied Materials, Inc. 4,664,375 2.4
40,000 ++KLA-Tencor Corporation 2,345,000 1.2
------------ ------
7,009,375 3.6
Software--Computer 10,000 SAP AG (Systeme, Anwendungen, Produkte in der
Datenverarbeitung)(ADR)* 651,875 0.3
Wireless Communication 3,600 ++Sonera Oyj (ADR)* 249,300 0.1
10,000 ++Sprint Corp. (PCS Group) 1,100,625 0.6
57,000 Vodafone AirTouch PLC (ADR)* 3,192,000 1.6
4,541,925 2.3
Wireline Communication 63,000 AT&T Corp. 3,323,250 1.7
50,000 ++Covad Communications Group, Inc. 3,531,250 1.8
37,000 ++Equant (NY Registered Shares) 3,827,188 2.0
54,000 ++MCI WorldCom, Inc. 2,477,250 1.3
40,000 ++NorthPoint Communications Group, Inc. 1,245,000 0.6
80,000 ++Qwest Communications International Inc. 3,150,000 1.6
------------ ------
17,553,938 9.0
Travel & Lodging 15,000 Carnival Corporation 675,938 0.3
Total Common Stocks (Cost--$141,430,390) 190,948,169 97.2
Face
Amount Short-Term Securities
Commercial Paper** $4,832,000 General Motors Acceptance Corp., 5.81% due 2/01/2000 4,832,000 2.5
US Government 4,000,000 Federal Home Loan Mortgage Corporation, 5.58% due
Agency 2/24/2000 3,985,740 2.0
Obligations**
Total Short-Term Securities (Cost--$8,817,740) 8,817,740 4.5
Total Investments (Cost--$150,248,130) 199,765,909 101.7
Liabilities in Excess of Other Assets (3,302,007) (1.7)
------------ ------
Net Assets $196,463,902 100.0%
============ ======
*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>
Geographic
Allocation as of
January 31, 2000
Percent of
Country Net Assets
United States 83.2%
United Kingdom 3.2
France 3.1
Canada 2.5
Netherlands 2.1
Sweden 1.7
Japan 0.7
Germany 0.3
China 0.3
Finland 0.1
Merrill Lynch Asset Builder Program, Inc., January 31, 2000
<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> <S> <C> <S> <C>
Asset-Backed AAA Aaa $150,000 The Money Store Home Equity Trust, 6.225% due 9/15/2023 $ 146,367
Securities*--1.0%
Banking--16.9% A A2 250,000 Bank of New York Co., Inc., 7.875% due 11/15/2002 252,610
A A1 350,000 Chase Manhattan Corporation, 7.25% due 6/01/2007 341,407
A- A1 300,000 First Chicago Bank, 8.25% due 6/15/2002 305,325
A A2 250,000 First National Bank of Boston, 7.375% due 9/15/2006 245,085
A- A2 200,000 Firstar Bank NA, 7.125% due 12/01/2009 190,396
BBB+ A3 300,000 Great Western Bank, 9.875% due 6/15/2001 309,789
BBB a1 300,000 KeyCorp Capital I, 6.744% due 7/01/2028 (a) 290,430
BBB+ Baa1 250,000 MBNA America Bank NA, 6.42% due 6/10/2004 (a) 247,760
A- A2 250,000 National City Corp., 5.75% due 2/01/2009 216,113
A A1 200,000 Wells Fargo Company, 8.375% due 5/15/2002 203,936
-----------
2,602,851
Finance--5.8% BBB+ Baa1 150,000 Comdisco Inc., 6% due 1/30/2002 144,439
A- A3 210,000 Heller Financial Inc., 7.375% due 11/01/2009 (b) 200,636
A A2 250,000 Household Finance Corporation, 6% due 5/01/2004 235,283
A+ A1 320,000 Newcourt Credit Group, 6.875% due 2/16/2005 308,022
-----------
888,380
Finance-- A A2 225,000 Bear Stearns Companies, Inc., 7.625% due 2/01/2005 223,245
Other--13.2% A aa3 100,000 Citigroup Capital II, 7.75% due 12/01/2036 92,164
BBB+ Baa3 125,000 Conseco Inc., 9% due 10/15/2006 125,651
A- A3 38,000 Donaldson, Lufkin & Jenrette Inc., 6.875% due 11/01/2005 36,243
BBB+ Baa1 150,000 Duke-Weeks Realty LP, 7.75% due 11/15/2009 144,093
BBB+ A3 150,000 ERP Operating LP, 7.125% due 10/15/2017 131,976
AAA Aaa 240,000 Florida Windstorm Underwriters, 7.125% due 2/25/2019 (b) 221,803
A+ A1 100,000 Goldman Sachs Group Inc., 7.50% due 1/28/2005 99,000
A A3 250,000 Lehman Brothers Holdings, Inc., 6.625% due 2/05/2006 234,913
BBB Baa3 100,000 Mack-Cali Realty L.P., 7.25% due 3/15/2009 92,451
A+ Aa3 200,000 Morgan Stanley, Dean Witter, 7.125% due 1/15/2003 197,496
BBB+ Baa1 275,000 Paine Webber Group Inc., 9.25% due 12/15/2001 282,323
A+ A2 200,000 Prudential Insurance Co., 6.375% due 7/23/2006 (b) 184,752
A Aa3 100,000 Salomon Smith Barney Holdings, Inc., 7.125% due 10/01/2006 97,093
-----------
2,163,203
Financial Services-- Associates Corporation of North America:
Consumer--4.7% AA- Aa3 100,000 7.40% due 5/15/2006 98,851
AA- Aa3 250,000 6.95% due 11/01/2018 226,927
A- a1 150,000 CIT Capital Trust I, 7.70% due 2/15/2027 138,204
AAA Aaa 245,000 General Electric Capital Corp., 8.50% due 7/24/2008 260,964
-----------
724,946
Industrial-- BBB- Ba1 250,000 Flowers Industries Inc., 7.15% due 4/15/2028 158,812
Consumer Goods-- BBB- Baa3 100,000 Fred Meyer Inc., 7.45% due 3/01/2008 95,781
3.0% AA Aa2 200,000 Wal-Mart Stores, Inc., 8.50% due 9/15/2024 207,506
-----------
462,099
Industrial-- AA+ Aa1 175,000 BP America Inc., 9.375% due 11/01/2000 178,283
Energy--3.9% A- A3 460,000 Burlington Resources, 7.375% due 3/01/2029 428,518
-----------
606,801
Industrial-- A A2 200,000 AlliedSignal Inc., 6.20% due 2/01/2008 181,536
Manufacturing-- BBB- Baa3 300,000 Equistar Chemicals LP, 8.75% due 2/15/2009 294,651
14.2% Ford Motor Credit Company:
A+ A1 200,000 8.20% due 2/15/2002 202,910
A+ A1 300,000 6.206% due 8/27/2006 (a) 299,541
A+ A1 100,000 7.375% due 10/28/2009 96,646
A A2 200,000 General Motors Acceptance Corp., 8.75% due 7/15/2005 209,198
A A2 200,000 General Motors Corp., 7.40% due 9/01/2025 190,682
A+ A1 320,000 International Business Machines Corp., 6.50% due 1/15/2028 276,896
A+ A1 100,000 Motorola Inc., 7.50% due 5/15/2025 98,376
A A1 100,000 PPG Industries Inc., 7.05% due 8/15/2009 95,844
A+ A2 250,000 United Technologies Corporation, 6.625% due 11/15/2004 241,605
-----------
2,187,885
Industrial-- A A2 200,000 Computer Sciences Corp., 6.25% due 3/15/2009 179,154
Services--8.4% A A2 193,260 Disney Custom Repackaged Asset Vehicle-403, 6.85% due
1/10/2007(b)* 187,559
May Department Stores Co.:
A+ A1 125,000 9.875% due 12/01/2002 132,495
A+ A1 150,000 6.70% due 9/15/2028 129,974
BBB- Baa3 200,000 News America Holdings, Inc., 8.50% due 2/15/2005 205,518
AA- A2 120,000 TCI Communications Inc., 8.75% due 8/01/2015 131,712
BBB Baa2 100,000 Time Warner Entertainment Co., 8.375% due 3/15/2023 102,384
BBB Baa3 100,000 Time Warner Inc., 7.75% due 6/15/2005 99,960
-----------
1,168,756
Transportation-- BBB+ Baa2 50,000 Burlington Northern Santa Fe, 6.75% due 3/15/2029 43,012
5.5% BBB Baa2 250,000 CSX Corp., 7.90% due 5/01/2017 247,205
AA+ Aa3 300,000 Continental Airlines, 7.056% due 9/15/2009 279,843
BBB- Baa3 250,000 Delta Airlines, 10.125% due 5/15/2010 277,307
-----------
847,367
US Government AAA Aaa 320,000 US Treasury Bonds, 5.25% due 2/15/2029 266,550
Obligations--7.4% US Treasury Notes:
AAA Aaa 250,000 4.25% due 11/15/2003 230,000
AAA Aaa 150,000 5.875% due 11/15/2004 145,008
AAA Aaa 275,000 6.875% due 5/15/2006 276,545
AAA Aaa 100,000 6.125% due 8/15/2007 96,344
AAA Aaa 125,000 6% due 8/15/2009 119,140
-----------
1,133,587
</TABLE>
Merrill Lynch Asset Builder Program, Inc., January 31, 2000
<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> <S> <C> <S> <C>
Utilities-- AA- A1 $200,000 AT&T Corporation, 6.50% due 3/15/2029 $ 168,386
Communications-- AA Aa3 100,000 Ameritech Capital Funding, 6.45% due 1/15/2018 87,364
6.4% BB Ba2 250,000 Frontier Corp., 6% due 10/15/2013 (a) 228,963
A Baa1 150,000 GTE Corp., 6.84% due 4/15/2018 135,524
A- A3 200,000 MCI WorldCom Inc., 6.125% due 4/15/2012 (a) 194,874
BBB+ Baa1 200,000 Sprint Capital Corporation, 6.125% due 11/15/2008 178,696
-----------
993,807
Utilities-- BBB+ Baa1 100,000 Commonwealth Edison, 7% due 7/01/2005 96,777
Electric--5.5% A+ A1 100,000 Consolidated Edison, Inc., 6.25% due 2/01/2008 91,085
A A3 175,000 Duke Capital Corp., 7.50% due 10/01/2009 171,199
A A1 250,000 Mississippi Power, 6.05% due 5/01/2003 240,395
BBB- Baa3 100,000 Niagara Mohawk Power Corp., 7.75% due 10/01/2008 98,614
A A2 150,000 Virginia Electric & Power Co., 8.625% due 10/01/2024 149,106
-----------
847,176
Total Investments in Bonds &Notes (Cost--$15,672,679)
--95.9% 14,773,225
SHORT-TERM
SECURITIES Issue
Commercial Paper**-- 649,000 Gillette Company, 5.78% due 2/01/2000 649,000
4.2%
Total Investments in Short-Term Securities
(Cost--$649,000)--4.2% 649,000
Total Investments (Cost--$16,321,679)--100.1% 15,422,225
Liabilities in Excess of Other Assets--(0.1%) (10,026)
-----------
Net Assets--100.0% $15,412,199
===========
(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.
*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.
Ratings of issues shown have not been audited by Deloitte & Touche
LLP.
See Notes to Financial Statements.
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (in US dollars)
<CAPTION>
US Government Securities Portfolio
Face Interest Maturity
Issue Amount Rate Date(s) Value
<S> <S> <S> <C> <C> <C> <C>
US Government Federal Home Loan Mortgage Corporation--
Agency Mortgage- Gold Program $3,105,794 5.50% 3/01/2013--5/01/2014 $ 2,840,827
Backed Federal Home Loan Mortgage Corporation--
Obligations*-- Gold Program 1,500,000 7.00 1/01/2015 1,463,895
82.9% Federal National Mortgage Association 1,773,900 6.50 2/01/2012--2/01/2014 1,696,833
Federal National Mortgage Association--
Multi-Family #0073313++ (1) 1,985,256 6.18 1/01/2006 1,869,739
Government National Mortgage Association 988,083 5.50 3/15/2029--4/15/2029 856,923
Government National Mortgage Association 1,946,736 7.00 6/15/2028--8/15/2028 1,856,610
Government National Mortgage Association 2,984,666 7.50 10/15/2025--3/15/2028 2,920,290
Total US Government Agency Mortgage-Backed
Obligations (Cost--$14,332,566) 13,505,117
US Government US Treasury Notes 2,000,000 5.75 6/30/2001 1,978,126
Obligations--12.2%
Total US Government Obligations (Cost--$2,003,682) 1,978,126
SHORT-TERM Face
SECURITIES Amount Issue
Repurchase $ 885,000 Donaldson, Lufkin & Jenrette Securities Corp., purchased on
Agreements**--5.4% 1/31/2000 to yield 5.75% on 2/01/2000 885,000
Total Investments in Short-Term Securities (Cost--$885,000) 885,000
Total Investments (Cost--$17,221,248)--100.5% 16,368,243
Liabilities in Excess of Other Assets--(0.5%) (74,753)
-----------
Net Assets--100.0% $16,293,490
===========
*Mortgage-Backed Obligations are subject to principal paydowns as a
result of prepayments or refinancing of the underlying mortgage
instrument. As a result, the average life may be substantially less
than the original maturity.
**Repurchase Agreements are fully collateralized by US Government &
Agency Obligations.
++Underlying multi-family loans have prepayments protection by means
of lockout periods and/or yield maintenance premiums.
(1)Represents balloon mortgages that amortize on a 25- or 30-year
schedule and have 10-year original maturities.
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Asset Builder Program, Inc., January 31, 2000
<TABLE>
STATEMENTS OF ASSETS AND LIABILITIES
<CAPTION>
Fundamental Global Growth Quality US Government
Value Opportunity Opportunity Bond Securities
As of January 31, 2000 Portfolio Portfolio Portfolio Portfolio Portfolio
<S> <S> <C> <C> <C> <C> <C>
Assets: Investments, at value* $ 99,967,484 $ 61,367,389 $199,765,909 $ 15,422,225 $ 16,368,243
Foreign cash -- 50,000 -- -- --
Cash 46 147 50,618 -- 522
Unrealized appreciation on forward
foreign exchange contracts -- 113,560 -- -- --
Receivables:
Securities sold -- 1,382,237 -- 221,434 --
Capital shares sold 136,877 90,401 817,750 6,160 457
Interest -- 85,379 -- 297,312 92,933
Dividends 167,000 52,699 40,745 -- --
Investment adviser -- -- -- 123,785 48,156
Principal paydowns -- -- -- -- 3,470
Forward foreign exchange contracts -- 412 -- -- --
Deferred organization expenses -- -- 16,127 -- --
Prepaid registration fees and
other assets 38,547 29,089 14,578 29,748 26,665
------------ ------------ ------------ ------------ ------------
Total assets 100,309,954 63,171,313 200,705,727 16,100,664 16,540,446
------------ ------------ ------------ ------------ ------------
Liabilities: Payables:
Securities purchased 1,051,826 -- 3,343,268 224,383 --
Capital shares redeemed 345,308 133,049 344,265 89,559 156,079
Distributor 83,133 52,492 159,074 9,255 9,804
Custodian bank -- -- -- 281,037 --
Investment adviser 57,873 40,996 107,018 -- --
Dividends to shareholders -- -- -- 31,174 28,848
Forward foreign exchange
contracts -- 12,978 -- -- --
Accrued expenses and other
liabilities 210,744 177,387 288,200 53,057 52,225
------------ ------------ ------------ ------------ ------------
Total liabilities 1,748,884 416,902 4,241,825 688,465 246,956
------------ ------------ ------------ ------------ ------------
Net Assets: Net assets $ 98,561,070 $ 62,754,411 $196,463,902 $ 15,412,199 $ 16,293,490
============ ============ ============ ============ ============
Net Assets Class A Common Stock, $.10
Consist of: par value++ $ 2,614 $ 1,535 $ 4,265 $ 903 $ 1,426
Class B Common Stock, $.10
par value++++ 435,523 320,168 537,319 115,037 122,545
Class C Common Stock, $.10
par value++++++ 237,497 146,180 339,456 45,240 34,589
Class D Common Stock, $.10
par value++++++++ 42,095 23,441 34,929 6,420 7,194
Paid-in capital in excess
of par 90,150,981 52,324,425 139,571,518 16,790,288 17,292,245
Undistributed (accumulated)
realized capital gains
(losses) on investments
and foreign currency
transactions--net 5,478,494 (85,940) 6,458,636 (646,235) (301,986)
Accumulated distributions in
excess of realized capital
gains on investments--net -- -- -- -- (9,518)
Unrealized appreciation
(depreciation) on investments
and foreign currency
transactions--net 2,213,866 10,024,602 49,517,779 (899,454) (853,005)
------------ ------------ ------------ ------------ ------------
Net assets $ 98,561,070 $ 62,754,411 $196,463,902 $ 15,412,199 $ 16,293,490
============ ============ ============ ============ ============
Net Asset Value: Class A:
Net assets $ 369,264 $ 200,229 $ 938,601 $ 83,036 $ 140,396
============ ============ ============ ============ ============
Shares outstanding 26,141 15,352 42,647 9,033 14,257
============ ============ ============ ============ ============
Net asset value and
redemption price per
share $ 14.13 $ 13.04 $ 22.01 $ 9.19 $ 9.85
============ ============ ============ ============ ============
Class B:
Net assets $ 59,736,084 $ 40,892,847 $115,215,881 $ 10,578,693 $ 12,045,581
============ ============ ============ ============ ============
Shares outstanding 4,355,234 3,201,679 5,373,187 1,150,369 1,225,451
============ ============ ============ ============ ============
Net asset value and
redemption price per share $ 13.72 $ 12.77 $ 21.44 $ 9.20 $ 9.83
============ ============ ============ ============ ============
Class C:
Net assets $ 32,542,644 $ 18,615,973 $ 72,650,473 $ 4,160,130 $ 3,399,746
============ ============ ============ ============ ============
Shares outstanding. 2,374,973 1,461,802 3,394,563 452,396 345,894
============ ============ ============ ============ ============
Net asset value and
redemption price per share $ 13.70 $ 12.73 $ 21.40 $ 9.20 $ 9.83
============ ============ ============ ============ ============
Class D:
Net assets $ 5,913,078 $ 3,045,362 $ 7,658,947 $ 590,340 $ 707,767
============ ============ ============ ============ ============
Shares outstanding 420,946 234,413 349,290 64,200 71,943
============ ============ ============ ============ ============
Net asset value and
redemption price per share $ 14.05 $ 12.99 $ 21.93 $ 9.20 $ 9.84
============ ============ ============ ============ ============
*Identified cost $ 97,753,618 $ 51,451,832 $150,248,130 $ 16,321,679 $ 17,221,248
============ ============ ============ ============ ============
++Authorized shares--Class A 6,250,000 6,250,000 6,250,000 6,250,000 26,250,000
============ ============ ============ ============ ============
++++Authorized shares--Class B 10,000,000 10,000,000 10,000,000 6,250,000 26,250,000
============ ============ ============ ============ ============
++++++Authorized shares--Class C 6,250,000 6,250,000 6,250,000 6,250,000 6,250,000
============ ============ ============ ============ ============
++++++++Authorized shares--Class D 6,250,000 6,250,000 6,250,000 6,250,000 6,250,000
============ ============ ============ ============ ============
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Asset Builder Program, Inc., January 31, 2000
<TABLE>
STATEMENTS OF OPERATIONS
<CAPTION>
Fundamental Global Growth Quality US Government
Value Opportunity Opportunity Bond Securities
For the Year Ended January 31, 2000 Portfolio Portfolio Portfolio Portfolio Portfolio
<S> <S> <C> <C> <C> <C> <C>
Investment Interest and discount earned $ 642,027 $ 826,582 $ 744,491 $ 1,252,669 $ 1,269,439
Income: Dividends* 1,905,480 560,763 1,209,743 -- --
Loaned securities -- -- -- 89 --
------------ ------------ ------------ ------------ ------------
Total income 2,547,507 1,387,345 1,954,234 1,252,758 1,269,439
------------ ------------ ------------ ------------ ------------
Expenses: Investment advisory fees 691,824 468,106 992,233 88,746 100,949
Account maintenance and
distribution fees--Class B 653,173 412,213 906,628 88,297 107,898
Transfer agent fees--Class B 358,362 251,738 466,770 62,569 43,509
Account maintenance and
distribution fees--Class C 342,337 179,001 555,404 36,916 32,974
Transfer agent fees--Class C 199,145 117,457 303,240 27,780 15,032
Registration fees 78,626 65,086 94,685 67,025 64,625
Accounting services 83,333 51,236 113,160 19,455 13,556
Printing and shareholder
reports 77,877 32,546 102,191 11,975 11,460
Professional fees 45,492 35,924 59,047 14,636 16,440
Custodian fees 22,652 68,868 28,996 12,643 12,999
Transfer agent fees--Class D 29,913 16,005 24,685 5,592 3,034
Amortization of organization
expenses 7,414 17,297 16,127 4,237 9,275
Account maintenance fees--Class D 16,440 7,753 14,271 3,177 2,963
Directors' fees and expenses 8,074 5,157 9,211 1,563 1,859
Pricing fees -- 979 464 7,005 2,407
Transfer agent fees--Class A 1,821 989 3,174 417 1,214
Other 6,899 5,130 6,438 2,149 2,357
------------ ------------ ------------ ------------ ------------
Total expenses before
reimbursement 2,623,382 1,735,485 3,696,724 454,182 442,551
Reimbursement of expenses -- -- -- (325,792) (298,716)
------------ ------------ ------------ ------------ ------------
Total expenses after
reimbursement 2,623,382 1,735,485 3,696,724 128,390 143,835
------------ ------------ ------------ ------------ ------------
Investment income (loss)--net (75,875) (348,140) (1,742,490) 1,124,368 1,125,604
------------ ------------ ------------ ------------ ------------
Realized & Realized gain (loss) from:
Unrealized Investments--net 7,447,403 4,737,833 14,708,445 (649,434) (301,986)
Gain (Loss) on Foreign currency
Investments & transactions--net -- (412,866) (36,320) -- --
Foreign Change in unrealized
Currency appreciation/depreciation on:
Transactions Investments--net (6,126,754) 2,585,347 23,507,783 (1,211,968) (1,043,664)
- --Net: Foreign currency
transactions--net -- (97,513) -- -- --
------------ ------------ ------------ ------------ ------------
Net Increase (Decrease)in
Net Assets Resulting from
Operations $ 1,244,774 $ 6,464,661 $ 36,437,418 $ (737,034) $ (220,046)
============ ============ ============ ============ ============
*Net of foreign withholding tax
on dividends $ 16,529 $ 53,688 $ 33,701 -- --
============ ============ ============ ============ ============
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
Fundamental Global Opportunity
Value Portfolio Portfolio
For the Year Ended For the Year Ended
January 31, January 31,
Increase (Decrease) in Net Assets: 2000 1999 2000 1999
<S> <S> <C> <C> <C> <C>
Operations: Investment income (loss)--net $ (75,875) $ (280,174) $ (348,140) $ 187,440
Realized gain on investments and
foreign currency transactions--net 7,447,403 5,442,771 4,324,967 387,514
Change in unrealized appreciation/
depreciation on investments and
foreign currency transactions--net (6,126,754) 162,925 2,487,834 4,446,195
------------ ------------ ------------ ------------
Net increase in net assets resulting from
operations 1,244,774 5,325,522 6,464,661 5,021,149
------------ ------------ ------------ ------------
Distributions to Realized gain on investments--net:
Shareholders: Class A (10,920) (24,547) (13,319) --
Class B (1,768,098) (3,462,399) (2,477,195) --
Class C (958,596) (1,712,089) (1,120,940) --
Class D (182,105) (393,697) (208,512) --
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 (2,919,719) (5,592,732) (3,819,966) (160,560)
------------ ------------ ------------ ------------
Capital Share Net increase (decrease) in net assets derived
Transactions: from capital share transactions 33,878 23,869,513 (6,255,113) 1,550,635
------------ ------------ ------------ ------------
Net Assets: Total increase (decrease) in net assets (1,641,067) 23,602,303 (3,610,418) 6,411,224
Beginning of year 100,202,137 76,599,834 66,364,829 59,953,605
------------ ------------ ------------ ------------
End of year $ 98,561,070 $100,202,137 $ 62,754,411 $ 66,364,829
------------ ------------ ------------ ------------
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Asset Builder Program, Inc., January 31, 2000
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS (concluded)
<CAPTION>
Growth Opportunity Quality Bond US Government
Portfolio Portfolio Securities Portfolio
For the Year Ended For the Year Ended For the Year Ended
January 31, January 31, January 31,
Increase (Decrease) in Net Assets: 2000 1999 2000 1999 2000 1999
<S> <S> <C> <C> <C> <C> <C> <C>
Operations: Investment income
(loss)--net $ (1,742,490) $ (1,082,001) $ 1,124,368 $ 798,312 $ 1,125,604 $ 815,801
Realized gain (loss)
on investments and
foreign currency
transactions
--net 14,672,125 5,518,909 (649,434) 141,775 (301,986) 330,960
Change in unrealized
appreciation/
depreciation on in-
vestments--net 23,507,783 21,955,016 (1,211,968) 139,750 (1,043,664) (89,917)
------------ ------------ ------------ ------------ ------------ ------------
Net increase
(decrease)in net
assets resulting
from operations 36,437,418 26,391,924 (737,034) 1,079,837 (220,046) 1,056,844
------------ ------------ ------------ ------------ ------------ ------------
Dividends & Investment
Distributions to income--net:
Shareholders: Class A -- -- (6,456) (45,570) (30,860) (149,920)
Class B -- -- (742,992) (488,136) (797,265) (469,886)
Class C -- -- (288,913) (205,201) (226,140) (151,711)
Class D -- -- (86,007) (59,405) (71,339) (44,284)
Realized gain on
investments--net:
Class A (42,617) (12,483) -- (1,890) -- (26,863)
Class B (5,412,879) (1,099,540) -- (76,535) -- (230,879)
Class C (3,397,098) (645,712) -- (30,006) -- (73,379)
Class D (351,501) (78,747) -- (9,735) -- (26,101)
In excess of
realized gain on
investments--net:
Class A -- -- -- -- -- (716)
Class B -- -- -- -- -- (6,152)
Class C -- -- -- -- -- (1,955)
Class D -- -- -- -- -- (695)
------------ ------------ ------------ ------------ ------------ ------------
Net decrease in
net assets
resulting from
dividends and
distributions to
shareholders (9,204,095) (1,836,482) (1,124,368) (916,478) (1,125,604) (1,182,541)
------------ ------------ ------------ ------------ ------------ ------------
Capital Share Net increase
Transactions: (decrease) in net
assets derived
from capital
share trans-
actions 54,637,630 49,407,790 (854,873) 7,232,908 (4,836,182) 10,369,240
------------ ------------ ------------ ------------ ------------ ------------
Net Assets: Total increase
(decrease) in
net assets 81,870,953 73,963,232 (2,716,275) 7,396,267 (6,181,832) 10,243,543
Beginning of year 114,592,949 40,629,717 18,128,474 10,732,207 22,475,322 12,231,779
------------ ------------ ------------ ------------ ------------ ------------
End of year $196,463,902 $114,592,949 $ 15,412,199 $ 18,128,474 $ 16,293,490 $ 22,475,322
============ ============ ============ ============ ============ ============
See Notes to Financial Statements.
</TABLE>
<TABLE>
FINANCIAL HIGHLIGHTS
<CAPTION>
The following per share data and ratios have been derived Fundamental Value Portfolio++++
from information provided in the financial statements. Class A
For the Year Ended January 31,
Increase (Decrease) in Net Asset Value: 2000 1999 1998 1997 1996++
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning
Operating of year $ 14.18 $ 13.98 $ 13.58 $ 11.67 $ 10.00
Performance: ------------ ------------ ------------ ------------ ------------
Investment income (loss)
--net .15 .11 .07 (.01) .25
Realized and unrealized
gain on investments--net .22 1.05 2.22 2.70 1.76
------------ ------------ ------------ ------------ ------------
Total from investment
operations .37 1.16 2.29 2.69 2.01
------------ ------------ ------------ ------------ ------------
Less distributions:
Realized gain on
investments--net (.42) (.96) (1.89) (.78) (.20)
In excess of realized
gain on investments--net -- -- -- -- (.11)
Return of capital--net -- -- -- -- (.03)
------------ ------------ ------------ ------------ ------------
Total distributions (.42) (.96) (1.89) (.78) (.34)
------------ ------------ ------------ ------------ ------------
Net asset value, end of
year $ 14.13 $ 14.18 $ 13.98 $ 13.58 $ 11.67
============ ============ ============ ============ ============
Total Investment Based on net asset value
Return:* per share 2.57% 8.51% 17.12% 23.20% 20.10%+++++
============ ============ ============ ============ ============
Ratio to Expenses, net of reimbursement 1.41% 1.45% 1.63% 2.03% 1.54%
Average Net ============ ============ ============ ============ ============
Assets: Expenses 1.41% 1.45% 1.63% 2.03% 2.00%
============ ============ ============ ============ ============
Investment income (loss)--net .98% .75% .48% (.07%) 1.99%
============ ============ ============ ============ ============
Supplemental Net assets, end of year
Data: (in thousands) $ 369 $ 359 $ 317 $ 209 $ 121
============ ============ ============ ============ ============
Portfolio turnover 52.89% 40.10% 68.75% 80.60% 51.37%
============ ============ ============ ============ ============
*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., January 31, 2000
<TABLE>
FINANCIAL HIGHLIGHTS (continued)
<CAPTION>
The following per share data and ratios have been derived Fundamental Value Portfolio++++
from information provided in the financial statements. Class B
For the Year Ended January 31,
Increase (Decrease) in Net Asset Value: 2000 1999 1998 1997 1996++
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning
Operating of year $ 13.92 $ 13.75 $ 13.39 $ 11.55 $ 10.00
Performance: ------------ ------------ ------------ ------------ ------------
Investment loss--net (.02) (.05) (.09) (.15) (.07)
Realized and unrealized gain on
investments--net .22 1.03 2.19 2.65 1.96
------------ ------------ ------------ ------------ ------------
Total from investment
operations .20 .98 2.10 2.50 1.89
------------ ------------ ------------ ------------ ------------
Less distributions:
Realized gain on investments
--net (.40) (.81) (1.74) (.66) (.20)
In excess of realized gain on
investments--net -- -- -- -- (.11)
Return of capital--net -- -- -- -- (.03)
------------ ------------ ------------ ------------ ------------
Total distributions (.40) (.81) (1.74) (.66) (.34)
------------ ------------ ------------ ------------ ------------
Net asset value, end of year $ 13.72 $ 13.92 $ 13.75 $ 13.39 $ 11.55
============ ============ ============ ============ ============
Total Investment Based on net asset value
Return:* per share 1.45% 7.32% 15.91% 21.79% 18.89%+++++
============ ============ ============ ============ ============
Ratio to Expenses, net of reimbursement 2.51% 2.55% 2.72% 3.11% 3.29%
Average Net ============ ============ ============ ============ ============
Assets: Expenses 2.51% 2.55% 2.72% 3.11% 3.39%
============ ============ ============ ============ ============
Investment loss--net (.11%) (.35%) (.60%) (1.15%) (.61%)
============ ============ ============ ============ ============
Supplemental Net assets, end of year (in
Data: thousands) $ 59,736 $ 62,419 $ 48,073 $ 34,828 $ 20,989
============ ============ ============ ============ ============
Portfolio turnover 52.89% 40.10% 68.75% 80.60% 51.37%
============ ============ ============ ============ ============
<CAPTION>
The following per share data and ratios have been derived Fundamental Value Portfolio++++
from information provided in the financial statements. Class C
For the Year Ended January 31,
Increase (Decrease) in Net Asset Value: 2000 1999 1998 1997 1996++
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning
Operating of year $ 13.91 $ 13.75 $ 13.39 $ 11.55 $ 10.00
Performance: ------------ ------------ ------------ ------------ ------------
Investment loss--net (.02) (.06) (.09) (.15) (.09)
Realized and unrealized gain
on investments--net .21 1.03 2.19 2.66 1.98
------------ ------------ ------------ ------------ ------------
Total from investment
operations .19 .97 2.10 2.51 1.89
------------ ------------ ------------ ------------ ------------
Less distributions:
Realized gain on
investments--net (.40) (.81) (1.74) (.67) (.20)
In excess of realized gain
on investments--net -- -- -- -- (.11)
Return of capital--net -- -- -- -- (.03)
------------ ------------ ------------ ------------ ------------
Total distributions (.40) (.81) (1.74) (.67) (.34)
------------ ------------ ------------ ------------ ------------
Net asset value, end of year $ 13.70 $ 13.91 $ 13.75 $ 13.39 $ 11.55
============ ============ ============ ============ ============
Total Investment Based on net asset value per
Return:* share 1.38% 7.23% 15.93% 21.82% 18.89%+++++
============ ============ ============ ============ ============
Ratio to Expenses, net of reimbursement 2.55% 2.58% 2.75% 3.15% 3.38%
Average Net ============ ============ ============ ============ ============
Assets: Expenses 2.55% 2.58% 2.75% 3.15% 3.46%
============ ============ ============ ============ ============
Investment loss--net (.15%) (.39%) (.63%) (1.19%) (.75%)
============ ============ ============ ============ ============
Supplemental Net assets, end of year (in
Data: thousands) $ 32,543 $ 31,188 $ 22,896 $ 15,022 $ 7,990
============ ============ ============ ============ ============
Portfolio turnover 52.89% 40.10% 68.75% 80.60% 51.37%
============ ============ ============ ============ ============
<CAPTION>
The following per share data and ratios have been derived Fundamental Value Portfolio++++
from information provided in the financial statements. Class D
For the Year Ended January 31,
Increase (Decrease) in Net Asset Value: 2000 1999 1998 1997 1996++
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of
Operating year $ 14.13 $ 13.94 $ 13.54 $ 11.65 $ 10.00
Performance: ------------ ------------ ------------ ------------ ------------
Investment income (loss)--net .11 .07 .03 (.04) .03
Realized and unrealized gain on
investments--net .22 1.04 2.22 2.68 1.96
------------ ------------ ------------ ------------ ------------
Total from investment
operations .33 1.11 2.25 2.64 1.99
------------ ------------ ------------ ------------ ------------
Less distributions:
Realized gain on
investments--net (.41) (.92) (1.85) (.75) (.20)
In excess of realized
gain on investments--net -- -- -- -- (.11)
Return of capital--net -- -- -- -- (.03)
------------ ------------ ------------ ------------ ------------
Total distributions (.41) (.92) (1.85) (.75) (.34)
------------ ------------ ------------ ------------ ------------
Net asset value, end of year $ 14.05 $ 14.13 $ 13.94 $ 13.54 $ 11.65
============ ============ ============ ============ ============
Total Investment Based on net asset value
Return:* per share 2.35% 8.19% 16.89% 22.82% 19.90%+++++
============ ============ ============ ============ ============
Ratio to Expenses, net of reimbursement 1.67% 1.70% 1.89% 2.27% 2.45%
Average Net ============ ============ ============ ============ ============
Assets: Expenses 1.67% 1.70% 1.89% 2.27% 2.56%
============ ============ ============ ============ ============
Investment income (loss)--net .73% .50% .23% (.31%) .24%
============ ============ ============ ============ ============
Supplemental Net assets, end of year
Data: (in thousands) $ 5,913 $ 6,236 $ 5,314 $ 4,180 $ 2,471
============ ============ ============ ============ ============
Portfolio turnover 52.89% 40.10% 68.75% 80.60% 51.37%
============ ============ ============ ============ ============
*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., January 31, 2000
<TABLE>
FINANCIAL HIGHLIGHTS (continued)
<CAPTION>
The following per share data and ratios have been derived Global Opportunity Portfolio++++
from information provided in the financial statements. Class A
For the Year Ended January 31,
Increase (Decrease) in Net Asset Value: 2000 1999 1998 1997 1996++
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning
Operating of year $ 12.46 $ 11.40 $ 11.93 $ 10.82 $ 10.00
Performance: ------------ ------------ ------------ ------------ ------------
Investment income--net .06 .16 .16 .15 .34
Realized and unrealized gain on
investments and foreign
currency transactions--net 1.46 .94 .69 1.21 .77
------------ ------------ ------------ ------------ ------------
Total from investment
operations 1.52 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 (.94) -- (.99) (.12) --
In excess of realized gain on
investments--net -- (.04) (.14) -- (.03)
------------ ------------ ------------ ------------ ------------
Total dividends and distributions (.94) (.04) (1.38) (.25) (.29)
------------ ------------ ------------ ------------ ------------
Net asset value, end of year $ 13.04 $ 12.46 $ 11.40 $ 11.93 $ 10.82
============ ============ ============ ============ ============
Total Investment Based on net asset value per
Return:* share 12.32% 9.63% 7.27% 12.68% 11.15%+++++
============ ============ ============ ============ ============
Ratio to Expenses, net of reimbursement 1.72% 1.72% 1.87% 2.47% 2.01%
Average Net ============ ============ ============ ============ ============
Assets: Expenses 1.72% 1.72% 1.87% 2.90% 2.32%
============ ============ ============ ============ ============
Investment income--net .50% 1.37% 1.28% 1.83% 2.92%
============ ============ ============ ============ ============
Supplemental Net assets, end of year (in
Data: thousands) $ 200 $ 193 $ 167 $ 129 $ 3,025
============ ============ ============ ============ ============
Portfolio turnover 95.70% 134.89% 99.11% 125.68% 83.14%
============ ============ ============ ============ ============
<CAPTION>
The following per share data and ratios have been derived Global Opportunity Portfolio++++
from information provided in the financial statements. Class B
For the Year Ended January 31,
Increase (Decrease) in Net Asset Value: 2000 1999 1998 1997 1996++
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning
Operating of year $ 12.23 $ 11.30 $ 11.86 $ 10.76 $ 10.00
Performance: ------------ ------------ ------------ ------------ ------------
Investment income (loss)--net (.07) .03 .02 (.04) .13
Realized and unrealized gain on
investments and foreign
currency transactions--net 1.42 .93 .68 1.29 .85
------------ ------------ ------------ ------------ ------------
Total from investment
operations 1.35 .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 (.81) -- (.99) (.12) --
In excess of realized gain on
investments--net -- (.03) (.14) -- (.03)
------------ ------------ ------------ ------------ ------------
Total dividends and distri-
butions (.81) (.03) (1.26) (.15) (.22)
------------ ------------ ------------ ------------ ------------
Net asset value, end of year $ 12.77 $ 12.23 $ 11.30 $ 11.86 $ 10.76
============ ============ ============ ============ ============
Total Investment Based on net asset value
Return:* per share 11.10% 8.48% 5.97% 11.67% 9.89%+++++
============ ============ ============ ============ ============
Ratio to Expenses, net of
Average Net reimbursement 2.81% 2.82% 2.96% 3.76% 3.50%
Assets: ============ ============ ============ ============ ============
Expenses 2.81% 2.82% 2.96% 4.01% 3.61%
============ ============ ============ ============ ============
Investment income (loss)--net (.59%) .26% .18% (.39%) 1.20%
============ ============ ============ ============ ============
Supplemental Net assets, end of year (in
Data: thousands) $ 40,893 $ 44,455 $ 40,687 $ 30,469 $ 16,117
============ ============ ============ ============ ============
Portfolio turnover 95.70% 134.89% 99.11% 125.68% 83.14%
============ ============ ============ ============ ============
<CAPTION>
The following per share data and ratios have been derived Global Opportunity Portfolio++++
from information provided in the financial statements. Class C
For the Year Ended January 31,
Increase (Decrease) in Net Asset Value: 2000 1999 1998 1997 1996++
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning
Operating of year $ 12.20 $ 11.28 $ 11.84 $ 10.75 $ 10.00
Performance: ------------ ------------ ------------ ------------ ------------
Investment income (loss)--net (.08) .02 .02 (.05) .12
Realized and unrealized gain
on investments and foreign
currency transactions--net 1.42 .93 .68 1.29 .85
------------ ------------ ------------ ------------ ------------
Total from investment
operations 1.34 .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 (.81) -- (.99) (.12) --
In excess of realized
gain on investments--net -- (.03) (.14) -- (.03)
------------ ------------ ------------ ------------ ------------
Total dividends and
distributions (.81) (.03) (1.26) (.15) (.22)
------------ ------------ ------------ ------------ ------------
Net asset value, end of year $ 12.73 $ 12.20 $ 11.28 $ 11.84 $ 10.75
============ ============ ============ ============ ============
Total Investment Based on net asset value
Return:* per share 11.05% 8.40% 5.99% 11.61% 9.81%+++++
============ ============ ============ ============ ============
Ratio to Expenses, net of
Average Net reimbursement 2.86% 2.87% 3.00% 3.81% 3.58%
Assets: ============ ============ ============ ============ ============
Expenses 2.86% 2.87% 3.00% 4.06% 3.65%
============ ============ ============ ============ ============
Investment income
(loss)--net (.64%) .20% .13% (.46%) 1.07%
============ ============ ============ ============ ============
Supplemental Net assets, end of year
Data: (in thousands) $ 18,616 $ 18,342 $ 15,951 $ 10,659 $ 4,770
============ ============ ============ ============ ============
Portfolio turnover 95.70% 134.89% 99.11% 125.68% 83.14%
============ ============ ============ ============ ============
*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., January 31, 2000
<TABLE>
FINANCIAL HIGHLIGHTS (continued)
<CAPTION>
The following per share data and ratios have been derived Global Opportunity Portfolio++++
from information provided in the financial statements. Class D
For the Year Ended January 31,
Increase (Decrease) in Net Asset Value: 2000 1999 1998 1997 1996++++++++
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning
Operating of year $ 12.42 $ 11.39 $ 11.92 $ 10.80 $ 10.00
Performance: ------------ ------------ ------------ ------------ ------------
Investment income--net .03 .13 .13 .05 .22
Realized and unrealized gain on
investments and foreign
currency transactions--net 1.45 .94 .70 1.29 .85
------------ ------------ ------------ ------------ ------------
Total from investment
operations 1.48 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 (.91) -- (.99) (.12) --
In excess of realized gain on
investments--net -- (.04) (.14) -- (.03)
------------ ------------ ------------ ------------ ------------
Total dividends and
distributions (.91) (.04) (1.36) (.22) (.27)
------------ ------------ ------------ ------------ ------------
Net asset value, end of year $ 12.99 $ 12.42 $ 11.39 $ 11.92 $ 10.80
============ ============ ============ ============ ============
Total Investment Based on net asset value
Return:** per share 12.02% 9.35% 7.02% 12.56% 10.80%+++++
============ ============ ============ ============ ============
Ratio to Expenses, net of reimbursement 1.97% 1.97% 2.12% 2.91% 2.67%
Average Net ============ ============ ============ ============ ============
Assets: Expenses 1.97% 1.97% 2.12% 3.17% 2.77%
============ ============ ============ ============ ============
Investment income--net .26% 1.11% 1.03% .48% 2.00%
============ ============ ============ ============ ============
Supplemental Net assets, end of year
Data: (in thousands) $ 3,045 $ 3,375 $ 3,149 $ 2,596 $ 1,513
============ ============ ============ ============ ============
Portfolio turnover 95.70% 134.89% 99.11% 125.68% 83.14%
============ ============ ============ ============ ============
<CAPTION>
Growth Opportunity Portfolio++++
Class A Class B
For the For the
The following per share data and ratios Period Period
have been derived from information Feb. 2, Feb. 2,
provided in the financial statements. For the Year Ended 1996++ to For the Year Ended 1996++ to
January 31, Jan. 31, January 31, Jan. 31,
Increase (Decrease) in Net Asset Value: 2000 1999 1998 1997 2000 1999 1998 1997
<S> <S> <C> <C> <C> <C> <C> <C> <C> <C>
Per Share Net asset value,
Operating beginning of period $ 18.53 $ 13.42 $ 11.79 $ 10.00 $ 18.26 $ 13.27 $ 11.68 $ 10.00
Performance: -------- -------- -------- -------- -------- -------- -------- -------
Investment income
(loss)--net (.01) (.06) (.07) .03 (.22) (.23) (.22) (.21)
Realized and unrealized
gain on investments--net 4.58 5.63 2.83 1.76 4.48 5.54 2.80 1.89
-------- -------- -------- -------- -------- -------- -------- -------
Total from investment
operations 4.57 5.57 2.76 1.79 4.26 5.31 2.58 1.68
-------- -------- -------- -------- -------- -------- -------- -------
Less distributions
from realized gain on
investments--net (1.09) (.46) (1.13) -- (1.08) (.32) (.99) --
-------- -------- -------- -------- -------- -------- -------- -------
Net asset value, end
of period $ 22.01 $ 18.53 $ 13.42 $ 11.79 $ 21.44 $ 18.26 $ 13.27 $ 11.68
======== ======== ======== ======== ======== ======== ======== =======
Total Investment Based on net asset
Return:** value per share 25.11% 42.02% 23.52% 17.90%+++++ 23.76% 40.41% 22.16% 16.80%+++++
======== ======== ======== ======== ======== ======== ======== =======
Ratio to Expenses, net of
Average Net reimbursement 1.36% 1.56% 1.98% 2.44%* 2.45% 2.66% 3.09% 3.84%*
Assets: ======== ======== ======== ======== ======== ======== ======== =======
Expenses 1.36% 1.56% 1.98% 3.08%* 2.45% 2.66% 3.09% 4.00%*
======== ======== ======== ======== ======== ======== ======== =======
Investment income
(loss)--net (.07%) (.39%) (.55%) .23%* (1.16%) (1.50%) (1.66%) (1.93%)*
======== ======== ======== ======== ======== ======== ======== =======
Supplemental Net assets, end of
Data: period (in thousands) $ 939 $ 582 $ 207 $ 58 $115,216 $ 69,601 $ 25,752 $ 9,816
======== ======== ======== ======== ======== ======== ======== =======
Portfolio turnover 81.27% 40.59% 60.24% 51.63% 81.27% 40.59% 60.24% 51.63%
======== ======== ======== ======== ======== ======== ======== =======
<CAPTION>
Growth Opportunity Portfolio++++
Class C Class D
For the For the
The following per share data and ratios Period Period
have been derived from information provided Feb. 2, Feb. 2,
in the financial statements. For the Year Ended 1996++ to For the Year Ended 1996++ to
January 31, Jan. 31, January 31, Jan. 31,
Increase (Decrease) in Net Asset Value: 2000 1999 1998 1997 2000 1999 1998 1997
<S> <S> <C> <C> <C> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning
Operating of period $ 18.24 $ 13.26 $ 11.67 $ 10.00 $ 18.51 $ 13.42 $ 11.78 $ 10.00
Performance: -------- -------- -------- -------- -------- -------- -------- -------
Investment loss--net (.23) (.24) (.23) (.22) (.07) (.10) (.11) (.11)
Realized and unrealized
gain on investments--net 4.47 5.55 2.81 1.89 4.58 5.62 2.84 1.89
-------- -------- -------- -------- -------- -------- -------- -------
Total from investment
operations 4.24 5.31 2.58 1.67 4.51 5.52 2.73 1.78
-------- -------- -------- -------- -------- -------- -------- -------
Less distributions from
realized gain on
investments--net (1.08) (.33) (.99) -- (1.09) (.43) (1.09) --
-------- -------- -------- -------- -------- -------- -------- -------
Net asset value, end
of period $ 21.40 $ 18.24 $ 13.26 $ 11.67 $ 21.93 $ 18.51 $ 13.42 $ 11.78
======== ======== ======== ======== ======== ======== ======== =======
Total Investment Based on net asset
Return:** value per share 23.68% 40.39% 22.17% 16.70%+++++ 24.80% 41.59% 23.30% 17.80%+++++
======== ======== ======== ======== ======== ======== ======== =======
Ratio to Expenses, net of
Average Net reimbursement 2.48% 2.71% 3.14% 3.88%* 1.62% 1.80% 2.23% 2.94%*
Assets: ======== ======== ======== ======== ======== ======== ======== =======
Expenses 2.48% 2.71% 3.14% 4.05%* 1.62% 1.80% 2.23% 3.13%*
======== ======== ======== ======== ======== ======== ======== =======
Investment loss--net (1.20%) (1.55%) (1.71%) (1.98%)* (.34%) (.64%) (.80%) (1.00%)*
======== ======== ======== ======== ======== ======== ======== =======
Supplemental Net assets, end of
Data: period (in thousands) $ 72,650 $ 40,710 $ 13,059 $ 4,649 $ 7,659 $ 3,700 $ 1,612 $ 819
======== ======== ======== ======== ======== ======== ======== =======
Portfolio turnover 81.27% 40.59% 60.24% 51.63% 81.27% 40.59% 60.24% 51.63%
======== ======== ======== ======== ======== ======== ======== =======
*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., January 31, 2000
<TABLE>
FINANCIAL HIGHLIGHTS (continued)
<CAPTION>
The following per share data and ratios have been derived Quality Bond Portfolio
from information provided in the financial statements. Class A
For the Year Ended January 31,
Increase (Decrease) in Net Asset Value: 2000 1999 1998 1997 1996++
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning
Operating of year $ 10.21 $ 10.10 $ 9.79 $ 10.27 $ 10.00
Performance: ------------ ------------ ------------ ------------ ------------
Investment income--net .68 .66 .69 .68 .62
Realized and unrealized gain
(loss) on investments--net (1.02) .18 .31 (.44) .27
------------ ------------ ------------ ------------ ------------
Total from investment
operations (.34) .84 1.00 .24 .89
------------ ------------ ------------ ------------ ------------
Less dividends and distributions:
Investment income--net (.68) (.66) (.69) (.68) (.62)
Realized gain on
investments--net -- (.07) -- (.04) --
------------ ------------ ------------ ------------ ------------
Total dividends and
distributions (.68) (.73) (.69) (.72) (.62)
------------ ------------ ------------ ------------ ------------
Net asset value, end of year $ 9.19 $ 10.21 $ 10.10 $ 9.79 $ 10.27
============ ============ ============ ============ ============
Total Investment Based on net asset value
Return:* per share (3.39%) 8.57% 10.59% 2.51% 9.26%+++++
============ ============ ============ ============ ============
Ratio to Expenses, net of reimbursement .00% .00% .00% .00% .00%
Average Net ============ ============ ============ ============ ============
Assets: Expenses 1.77% 2.00% 2.62% 3.23% 2.60%
============ ============ ============ ============ ============
Investment income--net 7.12% 6.56% 7.01% 6.85% 6.22%
============ ============ ============ ============ ============
Supplemental Net assets, end of year (in
Data: thousands) $ 83 $ 84 $ 1,214 $ 2,254 $ 2,196
============ ============ ============ ============ ============
Portfolio turnover 137.15% 123.80% 114.61% 91.10% 86.68%
============ ============ ============ ============ ============
<CAPTION>
The following per share data and ratios have been derived Quality Bond Portfolio
from information provided in the financial statements. Class B
For the Year Ended January 31,
Increase (Decrease) in Net Asset Value: 2000 1999 1998 1997 1996++
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning
Operating of year $ 10.21 $ 10.09 $ 9.79 $ 10.27 $ 10.00
Performance: ------------ ------------ ------------ ------------ ------------
Investment income--net .60 .58 .60 .59 .54
Realized and unrealized gain
(loss) on investments--net (1.01) .19 .30 (.44) .27
------------ ------------ ------------ ------------ ------------
Total from investment
operations (.41) .77 .90 .15 .81
------------ ------------ ------------ ------------ ------------
Less dividends and distributions:
Investment income--net (.60) (.58) (.60) (.59) (.54)
Realized gain on investments
--net -- (.07) -- (.04) --
------------ ------------ ------------ ------------ ------------
Total dividends and
distributions (.60) (.65) (.60) (.63) (.54)
------------ ------------ ------------ ------------ ------------
Net asset value, end of year $ 9.20 $ 10.21 $ 10.09 $ 9.79 $ 10.27
============ ============ ============ ============ ============
Total Investment Based on net asset value
Return:* per share (4.01%) 7.88% 9.55% 1.62% 8.35%+++++
============ ============ ============ ============ ============
Ratio to Expenses, net of reimbursement .75% .75% .75% .78% .79%
Average Net ============ ============ ============ ============ ============
Assets: Expenses 2.58% 2.71% 3.51% 4.08% 3.31%
============ ============ ============ ============ ============
Investment income--net 6.31% 5.74% 6.14% 6.00% 5.52%
============ ============ ============ ============ ============
Supplemental Net assets, end of year
Data: (in thousands) $ 10,579 $ 11,874 $ 6,095 $ 4,824 $ 3,049
============ ============ ============ ============ ============
Portfolio turnover 137.15% 123.80% 114.61% 91.10% 86.68%
============ ============ ============ ============ ============
<CAPTION>
The following per share data and ratios have been derived Quality Bond Portfolio
from information provided in the financial statements. Class C
For the Year Ended January 31,
Increase (Decrease) in Net Asset Value: 2000 1999 1998 1997 1996++
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning
Operating of year $ 10.21 $ 10.09 $ 9.79 $ 10.27 $ 10.00
Performance: ------------ ------------ ------------ ------------ ------------
Investment income--net .60 .58 .60 .58 .53
Realized and unrealized gain
(loss)on investments--net (1.01) .19 .30 (.44) .27
------------ ------------ ------------ ------------ ------------
Total from investment
operations (.41) .77 .90 .14 .80
------------ ------------ ------------ ------------ ------------
Less dividends and
distributions:
Investment income--net (.60) (.58) (.60) (.58) (.53)
Realized gain on
investments--net -- (.07) -- (.04) --
------------ ------------ ------------ ------------ ------------
Total dividends and
distributions (.60) (.65) (.60) (.62) (.53)
------------ ------------ ------------ ------------ ------------
Net asset value, end of year $ 9.20 $ 10.21 $ 10.09 $ 9.79 $ 10.27
============ ============ ============ ============ ============
Total Investment Based on net asset value
Return:* per share (4.06%) 7.83% 9.46% 1.55% 8.27%+++++
============ ============ ============ ============ ============
Ratio to Expenses, net of reimbursement .80% .80% .80% .85% .87%
Average Net ============ ============ ============ ============ ============
Assets: Expenses 2.70% 2.82% 3.60% 4.15% 3.44%
============ ============ ============ ============ ============
Investment income--net 6.26% 5.69% 6.05% 5.93% 5.46%
============ ============ ============ ============ ============
Supplemental Net assets, end of year (in
Data: thousands) $ 4,160 $ 4,587 $ 2,814 $ 1,885 $ 1,123
============ ============ ============ ============ ============
Portfolio turnover 137.15% 123.80% 114.61% 91.10% 86.68%
============ ============ ============ ============ ============
*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., January 31, 2000
<TABLE>
FINANCIAL HIGHLIGHTS (continued)
<CAPTION>
The following per share data and ratios have been derived Quality Bond Portfolio
from information provided in the financial statements. Class D
For the Year Ended January 31,
Increase (Decrease) in Net Asset Value: 2000 1999 1998 1997 1996++
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of
Operating year $ 10.21 $ 10.09 $ 9.79 $ 10.27 $ 10.00
Performance: ------------ ------------ ------------ ------------ ------------
Investment income--net .65 .63 .66 .65 .60
Realized and unrealized gain
(loss)on investments--net (1.01) .19 .30 (.44) .27
------------ ------------ ------------ ------------ ------------
Total from investment
operations (.36) .82 .96 .21 .87
------------ ------------ ------------ ------------ ------------
Less dividends and distributions:
Investment income--net (.65) (.63) (.66) (.65) (.60)
Realized gain on investments
--net -- (.07) -- (.04) --
------------ ------------ ------------ ------------ ------------
Total dividends and
distributions (.65) (.70) (.66) (.69) (.60)
------------ ------------ ------------ ------------ ------------
Net asset value, end of year $ 9.20 $ 10.21 $ 10.09 $ 9.79 $ 10.27
============ ============ ============ ============ ============
Total Investment Based on net asset value
Return:* per share (3.53%) 8.41% 10.21% 2.25% 8.99%+++++
============ ============ ============ ============ ============
Ratio to Expenses, net of
Average Net reimbursement .25% .25% .25% .16% .19%
Assets: ============ ============ ============ ============ ============
Expenses 1.97% 2.08% 2.90% 3.47% 2.70%
============ ============ ============ ============ ============
Investment income--net 6.77% 6.21% 6.75% 6.62% 6.11%
============ ============ ============ ============ ============
Supplemental Net assets, end of year
Data: (in thousands) $ 590 $ 1,583 $ 609 $ 452 $ 221
============ ============ ============ ============ ============
Portfolio turnover 137.15% 123.80% 114.61% 91.10% 86.68%
============ ============ ============ ============ ============
<CAPTION>
The following per share data and ratios have been derived US Government Securities Portfolio
from information provided in the financial statements. Class A
For the Year Ended January 31,
Increase (Decrease) in Net Asset Value: 2000 1999 1998 1997 1996++
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning
Operating of year $ 10.52 $ 10.48 $ 10.20 $ 10.48 $ 10.00
Performance: ------------ ------------ ------------ ------------ ------------
Investment income--net .64 .64 .69 .69 .76
Realized and unrealized gain
(loss) on investments--net (.67) .21 .35 (.21) .74
------------ ------------ ------------ ------------ ------------
Total from investment operations (.03) .85 1.04 .48 1.50
------------ ------------ ------------ ------------ ------------
Less dividends and distributions:
Investment income--net (.64) (.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 (.64) (.81) (.76) (.76) (1.02)
------------ ------------ ------------ ------------ ------------
Net asset value, end of year $ 9.85 $ 10.52 $ 10.48 $ 10.20 $ 10.48
============ ============ ============ ============ ============
Total Investment Based on net asset value
Return:* per share (.28%) 8.39% 10.66% 4.76% 15.47%+++++
============ ============ ============ ============ ============
Ratio to Expenses, net of reimbursement .00% .00% .00% .00% .00%
Average Net ============ ============ ============ ============ ============
Assets: Expenses 1.38% 1.73% 2.00% 2.92% 2.54%
============ ============ ============ ============ ============
Investment income--net 6.22% 6.13% 6.80% 6.69% 7.30%
============ ============ ============ ============ ============
Supplemental Net assets, end of year
Data: (in thousands) $ 140 $ 1,278 $ 3,233 $ 4,486 $ 5,463
============ ============ ============ ============ ============
Portfolio turnover 91.75% 310.91% 361.31% 27.32% 113.05%
============ ============ ============ ============ ============
<CAPTION>
The following per share data and ratios have been derived US Government Securities Portfolio
from information provided in the financial statements. Class B
For the Year Ended January 31,
Increase (Decrease) in Net Asset Value: 2000 1999 1998 1997 1996++
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning
Operating of year $ 10.51 $ 10.48 $ 10.20 $ 10.48 $ 10.00
Performance: ------------ ------------ ------------ ------------ ------------
Investment income--net .56 .56 .61 .60 .68
Realized and unrealized gain
(loss) on investments--net (.68) .20 .35 (.21) .74
------------ ------------ ------------ ------------ ------------
Total from investment
operations (.12) .76 .96 .39 1.42
------------ ------------ ------------ ------------ ------------
Less dividends and
distributions:
Investment income--net (.56) (.56) (.61) (.60) (.68)
Realized gain on invest-
ments--net -- (.17) (.07) (.07) (.26)
In excess of realized gain
on investments--net -- --++++ -- -- --
------------ ------------ ------------ ------------ ------------
Total dividends and dis-
tributions (.56) (.73) (.68) (.67) (.94)
------------ ------------ ------------ ------------ ------------
Net asset value, end
of year $ 9.83 $ 10.51 $ 10.48 $ 10.20 $ 10.48
============ ============ ============ ============ ============
Total Investment Based on net asset value
Return:* per share (1.13%) 7.48% 9.76% 3.90% 14.53%+++++
============ ============ ============ ============ ============
Ratio to Expenses, net of reimbursement .75% .75% .75% .78% .81%
Average Net ============ ============ ============ ============ ============
Assets: Expenses 2.22% 2.34% 2.82% 3.72% 3.35%
============ ============ ============ ============ ============
Investment income--net 5.54% 5.26% 5.94% 5.85% 6.28%
============ ============ ============ ============ ============
Supplemental Net assets, end of year
Data: (in thousands) $ 12,045 $ 14,817 $ 6,627 $ 4,514 $ 3,043
============ ============ ============ ============ ============
Portfolio turnover 91.75% 310.91% 361.31% 27.32% 113.05%
============ ============ ============ ============ ============
*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., January 31, 2000
<TABLE>
FINANCIAL HIGHLIGHTS (concluded)
<CAPTION>
The following per share data and ratios have been derived US Government Securities Portfolio
from information provided in the financial statements. Class C
For the Year Ended January 31,
Increase (Decrease) in Net Asset Value: 2000 1999 1998 1997 1996++
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning
Operating of year $ 10.51 $ 10.48 $ 10.19 $ 10.47 $ 10.00
Performance: ------------ ------------ ------------ ------------ ------------
Investment income--net .56 .55 .60 .59 .67
Realized and unrealized gain
(loss) on investments--net (.68) .20 .36 (.21) .73
------------ ------------ ------------ ------------ ------------
Total from investment
operations (.12) .75 .96 .38 1.40
------------ ------------ ------------ ------------ ------------
Less dividends and distributions:
Investment income--net (.56) (.55) (.60) (.59) (.67)
Realized gain on investments
--net -- (.17) (.07) (.07) (.26)
In excess of realized gain on
investments--net -- --++++ -- -- --
------------ ------------ ------------ ------------ ------------
Total dividends and distri-
butions (.56) (.72) (.67) (.66) (.93)
------------ ------------ ------------ ------------ ------------
Net asset value, end of year $ 9.83 $ 10.51 $ 10.48 $ 10.19 $ 10.47
============ ============ ============ ============ ============
Total Investment Based on net asset value per
Return:* share (1.18%) 7.43% 9.79% 3.83% 14.36%+++++
============ ============ ============ ============ ============
Ratio to Expenses, net of reimbursement .80% .80% .80% .85% .86%
Average Net ============ ============ ============ ============ ============
Assets: Expenses 2.33% 2.47% 2.90% 3.78% 3.41%
============ ============ ============ ============ ============
Investment income--net 5.49% 5.21% 5.88% 5.78% 6.21%
============ ============ ============ ============ ============
Supplemental Net assets, end of year
Data: (in thousands) $ 3,400 $ 4,679 $ 2,057 $ 1,757 $ 1,089
============ ============ ============ ============ ============
Portfolio turnover 91.75% 310.91% 361.31% 27.32% 113.05%
============ ============ ============ ============ ============
<CAPTION>
The following per share data and ratios have been derived US Government Securities Portfolio
from information provided in the financial statements. Class D
For the Year Ended January 31,
Increase (Decrease) in Net Asset Value: 2000 1999 1998 1997 1996++
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning
Operating of year $ 10.52 $ 10.48 $ 10.20 $ 10.48 $ 10.00
Performance: ------------ ------------ ------------ ------------ ------------
Investment income--net .61 .61 .67 .66 .74
Realized and unrealized gain
(loss) on investments--net (.68) .21 .35 (.21) .74
------------ ------------ ------------ ------------ ------------
Total from investment
operations (.07) .82 1.02 .45 1.48
------------ ------------ ------------ ------------ ------------
Less dividends and
distributions:
Investment income--net (.61) (.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 (.61) (.78) (.74) (.73) (1.00)
------------ ------------ ------------ ------------ ------------
Net asset value, end
of year $ 9.84 $ 10.52 $ 10.48 $ 10.20 $ 10.48
============ ============ ============ ============ ============
Total Investment Based on net asset value
Return:* per share (.63%) 8.12% 10.38% 4.49% 15.13%+++++
============ ============ ============ ============ ============
Ratio to Expenses, net of reimbursement .25% .25% .25% .21% .22%
Average Net ============ ============ ============ ============ ============
Assets: Expenses 1.67% 1.67% 2.25% 3.14% 2.77%
============ ============ ============ ============ ============
Investment income--net 6.02% 5.73% 6.53% 6.42% 6.90%
============ ============ ============ ============ ============
Supplemental Net assets, end of year (in
Data: thousands) $ 708 $ 1,701 $ 315 $ 313 $ 182
============ ============ ============ ============ ============
Portfolio turnover 91.75% 310.91% 361.31% 27.32% 113.05%
============ ============ ============ ============ ============
*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>
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. The Program's
Portfolios offer four classes of shares under the Merrill Lynch
Select Pricingsm 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.
Merrill Lynch Asset Builder Program, Inc., January 31, 2000
NOTES TO FINANCIAL STATEMENTS (continued)
(b) Repurchase agreements--The US Government Securities Portfolio
invests in money market securities pursuant to repurchase
agreements. Under such agreements, the counterparty agrees to
repurchase the security at a mutually agreed upon time and price.
The Portfolio takes possession of the underlying securities, marks
to market such securities and, if necessary, receives additional
securities daily to ensure that the contract is fully
collateralized. If the counterparty defaults and the fair value of
the collateral declines, liquidation of the collateral by the
Portfolio may be delayed or limited.
(c) 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.
(d) 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.
(e) 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.
(f) 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.
(g) 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.
(h) 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 realized gains for
all Portfolios are due primarily to differing tax treatments for
futures transactions and post-October losses.
(i) 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.
(j) Custodian bank--The Quality Bond Portfolio recorded an amount
payable to the custodian bank reflecting an overnight overdraft,
which resulted from a failed trade that settled the next day.
(k) Reclassification--Generally accepted accounting principles
require that certain components of net assets be adjusted to reflect
permanent differences between financial and tax reporting.
Accordingly, current year's permanent book/tax differences were as
follows: $75,875 in the Fundamental Value Portfolio has been
reclassified between undistributed net realized capital gains and
accumulated net investment loss; $251,452 in the Global Opportunity
Portfolio has been reclassified between accumulated net realized
capital losses and paid-in capital in excess of par and $348,140 has
been reclassified between accumulated net realized capital losses
and accumulated net investment loss; and $1,742,490 in the Growth
Opportunity Portfolio has been reclassified between accumulated net
realized capital losses and accumulated net investment loss. These
reclassifications have no effect on net assets or net asset values
per share.
2. Investment Advisory Agreement and Transactions
with Affiliates:
The Program has entered into an Investment Advisory Agreement with
Merrill Lynch Asset Management, L.P. ("MLAM"). The general partner
of MLAM is Princeton Services, Inc. ("PSI"), an indirect wholly-
owned subsidiary of Merrill Lynch & Co., Inc. ("ML & Co."), which is
the limited partner. The Program has also entered into a
Distribution Agreement and Distribution Plans with Merrill Lynch
Funds Distributor ("MLFD" or 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 year ended January 31, 2000, MLAM had voluntarily waived
management fees and reimbursed each Portfolio for additional
expenses as follows:
Management Additional
Fee Expenses
Quality Bond Portfolio $ 88,746 $237,046
US Government Securities Portfolio $100,949 $197,767
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%
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.
Merrill Lynch Asset Builder Program, Inc., January 31, 2000
NOTES TO FINANCIAL STATEMENTS (continued)
For the year ended January 31, 2000, 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 $13 $1,195 $269 $22,372
Global Opportunity Portfolio -- $ 49 -- $ 935
Growth Opportunity Portfolio $26 $2,192 $524 $42,219
Quality Bond Portfolio -- $ 111 -- $ 1,647
US Government Securities
Portfolio -- $ 73 -- $ 1,106
For the year ended January 31, 2000, 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 $146,713 $12,115
Global Opportunity Portfolio $113,441 $ 5,618
Growth Opportunity Portfolio $171,574 $22,178
Quality Bond Portfolio $ 35,740 $ 2,956
US Government Securities Portfolio $ 40,140 $ 5,082
In addition, MLPF&S received $9,432, $13,586 and $20,491 in
commissions on the execution of portfolio security transactions for
the Fundamental Value, Global Opporturnity and Growth Opportunity
Portfolios, respectively, for the year ended January 31, 2000.
Financial Data Services, Inc. ("FDS"), a wholly-owned subsidiary of
ML & Co., is the Program's transfer agent.
During the year ended January 31, 2000, Global Opportunity, Quality
Bond and US Government Securities Portfolios paid Merrill Lynch
Security Pricing Service, an affiliate of MLPF&S, $208, $4,642 and
$420, respectively, for security price quotations to compute the net
asset value of the Portfolios.
Accounting services are provided to each Portfolio by MLAM at cost.
Certain officers and/or directors of the Program are officers and/or
directors of MLAM, PSI, PFD, FDS, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the year ended January 31, 2000 were as follows:
Purchases Sales
Fundamental Value Portfolio $ 61,088,708 $ 48,984,588
Global Opportunity Portfolio $ 57,461,487 $ 75,769,874
Growth Opportunity Portfolio $157,949,634 $112,030,133
Quality Bond Portfolio $ 23,169,964 $ 23,358,406
US Government Securities Portfolio $ 17,241,998 $ 20,917,312
Net realized gains (losses) for the year ended January 31, 2000 and
net unrealized gains (losses) as of January 31, 2000 were as
follows:
Realized Unrealized
Fundamental Value Portfolio Gains Gains
Long-term investments $ 7,447,081 $2,213,866
Short-term investments 322 --
----------- -----------
Total $ 7,447,403 $ 2,213,866
=========== ===========
Realized Unrealized
Gains Gains
Global Opportunity Portfolio (Losses) (Losses)
Long-term investments $4,737,843 $ 9,915,557
Short-term investments (10) --
Foreign currency transactions (967,289) (4,515)
Forward foreign exchange
contracts 554,423 113,560
----------- -----------
Total $ 4,324,967 $10,024,602
=========== ===========
Realized
Gains Unrealized
Growth Opportunity Portfolio (Losses) Gains
Long-term investments $14,708,861 $49,517,779
Short-term investments (416) --
Foreign currency transactions (36,320) --
----------- -----------
Total $14,672,125 $49,517,779
=========== ===========
Realized Unrealized
Quality Bond Portfolio Losses Losses
Long-term investments $ (649,434) $ (899,454)
----------- -----------
Total $ (649,434) $ (899,454)
=========== ===========
Realized Unrealized
US Government Securities Portfolio Losses Losses
Long-term investments $ (301,986) $ (853,005)
----------- -----------
Total $ (301,986) $ (853,005)
=========== ===========
As of January 31, 2000, net unrealized appreciation (depreciation)
for Federal income tax purposes was as follows:
Gross Gross Net Unrealized
Unrealized Unrealized Appreciation
Appreciation Depreciation (Depreciation)
Fundamental Value Portfolio $15,055,059 $12,841,193 $ 2,213,866
Global Opportunity Portfolio $13,130,416 $ 3,468,561 $ 9,661,855
Growth Opportunity Portfolio $53,293,612 $ 3,779,712 $49,513,900
Quality Bond Portfolio $ 9,359 $ 914,326 $ (904,967)
US Government Securities
Portfolio -- $ 853,005 $ (853,005)
The aggregate cost of investments at January 31, 2000 for Federal
income tax purposes was $97,753,618 for the Fundamental Value
Portfolio, $51,705,534 for the Global Opportunity Portfolio,
$150,252,009 for the Growth Opportunity Portfolio, $16,327,192 for
the Quality Bond Portfolio and $17,221,248 for the US Government
Securities Portfolio.
4. Capital Share Transactions:
Net increase (decrease) in net assets derived from capital share
transactions for the years ended January 31, 2000 and January 31,
1999, respectively, were as follows:
For the Year Ended January 31,
2000 1999
Fundamental Value Portfolio $ 33,878 $23,869,513
Global Opportunity Portfolio $(6,255,113) $ 1,550,635
Growth Opportunity Portfolio $54,637,630 $49,407,790
Quality Bond Portfolio $ (854,873) $ 7,232,908
US Government Securities Portfolio $(4,836,182) $10,369,240
Transactions in capital shares for each class were as follows:
Fundamental Value Portfolio
Class A Shares for the Year Dollar
Ended January 31, 2000 Shares Amount
Shares sold 7,078 $ 106,246
Shares issued to shareholders in
reinvestment of distributions 562 7,965
----------- -----------
Total issued 7,640 114,211
Shares redeemed (6,816) (102,302)
----------- -----------
Net increase 824 $ 11,909
=========== ===========
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 Year Dollar
Ended January 31, 2000 Shares Amount
Shares sold 903,654 $13,258,587
Shares issued to shareholders
in reinvestment of dividends
and distributions 111,133 1,532,514
----------- -----------
Total issued 1,014,787 14,791,101
Shares redeemed (1,102,702) (15,955,798)
Automatic conversion of shares (41,813) (620,093)
----------- -----------
Net decrease (129,728) $(1,784,790)
=========== ===========
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 Year Dollar
Ended January 31, 2000 Shares Amount
Shares sold 721,120 $10,625,675
Shares issued to shareholders
in reinvestment of dividends
and distributions 58,269 802,949
----------- -----------
Total issued 779,389 11,428,624
Shares redeemed (646,591) (9,362,136)
----------- -----------
Net increase 132,798 $ 2,066,488
=========== ===========
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., January 31, 2000
NOTES TO FINANCIAL STATEMENTS (continued)
Fundamental Value Portfolio
Class D Shares for the Year Dollar
Ended January 31, 2000 Shares Amount
Shares sold 55,222 $ 831,504
Automatic conversion of shares 41,015 620,093
Shares issued to shareholders in
reinvestment of distributions 11,062 156,096
----------- -----------
Total issued 107,299 1,607,693
Shares redeemed (127,563) (1,867,422)
----------- -----------
Net decrease (20,264) $ (259,729)
----------- -----------
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 Year Dollar
Ended January 31, 2000 Shares Amount
Shares sold 2,154 $ 27,739
Shares issued to shareholders in
reinvestment of distributions 892 11,453
----------- -----------
Total issued 3,046 39,192
Shares redeemed (3,201) (40,841)
----------- -----------
Net decrease (155) $ (1,649)
=========== ===========
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 Year Dollar
Ended January 31, 2000 Shares Amount
Shares sold 405,088 $ 5,055,009
Shares issued to shareholders in
reinvestment of distributions 167,271 2,105,942
----------- -----------
Total issued 572,359 7,160,951
Automatic conversion of shares (23,047) (289,681)
Shares redeemed (982,759) (12,181,696)
----------- -----------
Net decrease (433,447) $(5,310,426)
=========== ===========
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 Year Dollar
Ended January 31, 2000 Shares Amount
Shares sold 311,994 $ 3,892,981
Shares issued to shareholders in
reinvestment of distributions 72,933 916,033
----------- -----------
Total issued 384,927 4,809,014
Shares redeemed (426,449) (5,286,460)
----------- -----------
Net decrease (41,522) $ (477,446)
=========== ===========
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 Year Dollar
Ended January 31, 2000 Shares Amount
Shares sold 20,494 $ 261,578
Automatic conversion of shares 22,640 289,681
Shares issued to shareholders in
reinvestment of distributions 14,315 183,239
----------- -----------
Total issued 57,449 734,498
Shares redeemed (94,851) (1,200,090)
----------- -----------
Net decrease (37,402) $ (465,592)
=========== ===========
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 Year Dollar
Ended January 31, 2000 Shares Amount
Shares sold 21,772 $ 420,701
Shares issued to shareholders in
reinvestment of distributions 1,619 33,261
----------- -----------
Total issued 23,391 453,962
Shares redeemed (12,135) (232,123)
----------- -----------
Net increase 11,256 $ 221,839
=========== ===========
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 Year Dollar
Ended January 31, 2000 Shares Amount
Shares sold 2,065,639 $38,992,818
Shares issued to shareholders in
reinvestment of distributions 235,171 4,712,817
----------- -----------
Total issued 2,300,810 43,705,635
Automatic conversion of shares (34,459) (640,621)
Shares redeemed (704,119) (13,477,819)
----------- -----------
Net increase 1,562,232 $29,587,195
=========== ===========
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 Year Dollar
Ended January 31, 2000 Shares Amount
Shares sold 1,517,492 $28,612,023
Shares issued to shareholders in
reinvestment of distributions 144,686 2,893,704
----------- -----------
Total issued 1,662,178 31,505,727
Shares redeemed (499,938) (9,553,047)
----------- -----------
Net increase 1,162,240 $21,952,680
=========== ===========
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 Year Dollar
Ended January 31, 2000 Shares Amount
Shares sold 154,235 $ 2,954,775
Automatic conversion of shares 33,885 640,621
Shares issued to shareholders in
reinvestment of distributions 15,224 311,638
----------- -----------
Total issued 203,344 3,907,034
Shares redeemed (53,937) (1,031,118)
----------- -----------
Net increase 149,407 $ 2,875,916
=========== ===========
Merrill Lynch Asset Builder Program, Inc., January 31, 2000
NOTES TO FINANCIAL STATEMENTS (continued)
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 Year Dollar
Ended January 31, 2000 Shares Amount
Shares sold 10,008 $ 98,429
Shares issued to shareholders in
reinvestment of dividends 586 5,576
----------- -----------
Total issued 10,594 104,005
Shares redeemed (9,837) (95,116)
----------- -----------
Net increase 757 $ 8,889
=========== ===========
Quality Bond Portfolio
Class A Shares for the Year Dollar
Ended January 31, 1999 Shares Amount
Shares sold 4,657 $ 47,345
Shares issued to shareholders
in reinvestment of dividends
and distributions 4,895 49,450
----------- -----------
Total issued 9,552 96,795
Shares redeemed (121,469) (1,230,280)
----------- -----------
Net decrease (111,917) $(1,133,485)
=========== ===========
Quality Bond Portfolio
Class B Shares for the Year Dollar
Ended January 31, 2000 Shares Amount
Shares sold 332,118 $ 3,228,519
Shares issued to shareholders
in reinvestment of dividends
and distributions 60,842 583,546
----------- -----------
Total issued 392,960 3,812,065
Automatic conversion of shares (381) (3,723)
Shares redeemed (405,478) (3,864,990)
----------- -----------
Net decrease (12,899) $ (56,648)
=========== ===========
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 Year Dollar
Ended January 31, 2000 Shares Amount
Shares sold 150,059 $ 1,459,675
Shares issued to shareholders
in reinvestment of dividends
and distributions 23,797 228,238
----------- -----------
Total issued 173,856 1,687,913
Shares redeemed (170,886) (1,633,535)
----------- -----------
Net increase 2,970 $ 54,378
=========== ===========
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 Year Dollar
Ended January 31, 2000 Shares Amount
Shares sold 29,752 $ 293,364
Automatic conversion of shares 381 3,723
Shares issued to shareholders
in reinvestment of dividends
and distributions 6,207 60,210
----------- -----------
Total issued 36,340 357,297
Shares redeemed (127,227) (1,218,789)
----------- -----------
Net decrease (90,887) $ (861,492)
=========== ===========
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 Year Dollar
Ended January 31, 2000 Shares Amount
Shares sold 17,324 $ 178,161
Shares issued to shareholders in
reinvestment of dividends 3,127 32,093
----------- -----------
Total issued 20,451 210,254
Shares redeemed (127,755) (1,313,322)
----------- -----------
Net decrease (107,304) $(1,103,068)
=========== ===========
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 Year Dollar
Ended January 31, 2000 Shares Amount
Shares sold 565,860 $ 5,779,648
Shares issued to shareholders in
reinvestment of dividends 56,455 573,274
----------- -----------
Total issued 622,315 6,352,922
Automatic conversion of shares (2,161) (21,885)
Shares redeemed (804,061) (8,148,209)
----------- -----------
Net decrease (183,907) $(1,817,172)
=========== ===========
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 Year Dollar
Ended January 31, 2000 Shares Amount
Shares sold 142,652 $ 1,464,961
Shares issued to shareholders in
reinvestment of dividends 18,021 183,060
----------- -----------
Total issued 160,673 1,648,021
Shares redeemed (259,845) (2,650,177)
----------- -----------
Net decrease (99,172) $(1,002,156)
=========== ===========
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 Year Dollar
Ended January 31, 2000 Shares Amount
Shares sold 16,527 $ 169,760
Automatic conversion of shares 2,160 21,885
Shares issued to shareholders in
reinvestment of dividends 4,832 49,378
----------- -----------
Total issued 23,519 241,023
Shares redeemed (113,260) (1,154,809)
----------- -----------
Net decrease (89,741) $ (913,786)
=========== ===========
Merrill Lynch Asset Builder Program, Inc., January 31, 2000
NOTES TO FINANCIAL STATEMENTS (concluded)
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 January 31, 2000, 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 sell
various foreign currencies with an approximate value of $1,570,000.
6. Capital Loss Carryforward:
At January 31, 2000, the Quality Bond and US Government Securities
Portfolios had a net capital loss carryforward of approximately
$305,000 and $70,000, respectively, all of which expires in 2008.
This amount will be available to offset like amounts of any future
taxable gains.
7. Organizational Restructuring and Reorganization Plan:
Effective on or about April 3, 2000, the Program will change its
name to The Asset Program, Inc. and will undergo the following
additional changes:
The Fundamental Value Portfolio will change its name to the Merrill
Lynch Mid Cap Value Fund.
The Growth Opportunity Portfolio will change its name to Mercury
Growth Opportunity Fund and will change its investment adviser to
Fund Asset Management, L.P. ("FAM"), an affiliate of MLAM.
The USGovernment Securities Portfolio will change its name to the
Mercury USGovernment Securities Fund. Its investment adviser will
also change to FAM.
On January 11, 2000, the Program's Board of Directors approved a
plan of reorganization, subject to shareholder approval and certain
other conditions, whereby Merrill Lynch Global Allocation Fund, Inc.
would acquire substantially all of the assets and liabilities of the
Global Opportunity Portfolio, Merrill Lynch Asset Growth Fund, Inc.
and Merrill Lynch Asset Income Fund, Inc. in exchange for newly
issued shares of Merrill Lynch Global Allocation Fund, Inc. These
Funds are registered, diversified, open-end management investment
companies. All four entities have a similar investment objective and
are managed by MLAM.
<AUDIT-REPORT>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders,
Merrill Lynch Asset Builder Program, Inc.:
We have audited the accompanying statements of assets and
liabilities, including the schedules of investments, of the Merrill
Lynch Asset Builder Program, Inc. (the "Program") (comprising the
Fundamental Value, Global Opportunity, Growth Opportunity,
Quality Bond and US Government Securities Portfolios) as of January
31, 2000, the related statements of operations for the year then
ended and changes in net assets for each of the years in the two-
year period then ended, and the financial highlights for the periods
presented. These financial statements and the financial highlights
are the responsibility of the Program's management. Our
responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements and the financial highlights are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.
Our procedures included confirmation of securities owned at January
31, 2000 by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights
present fairly, in all material respects, the financial positions of
the respective Portfolios of Merrill Lynch Asset Builder Program,
Inc. as of January 31, 2000, the results of their operations, the
changes in their net assets, and the financial highlights for the
respective stated periods in conformity with generally accepted
accounting principles.
Deloitte & Touche LLP
Princeton, New Jersey
March 15, 2000
</AUDIT-REPORT>
IMPORTANT TAXINFORMATION (unaudited)
Fundamental Value Portfolio*
Of the ordinary income distribution paid by the Fundamental Value
Portfolio to shareholders of record on December 14, 1999, 100%
qualifies for the dividends received deduction for corporations.
Additionally, the Portfolio paid a long-term capital gain
distribution of $.400024 per share to shareholders of record on
December 14, 1999.
Global Opportunity Portfolio*
Of the ordinary income distributions paid by the Global Opportunity
Portfolio to shareholders of record on December 14, 1999, 3.81% is
attributable to income from Federal obligations. Additionally, 9.42%
of the ordinary income distribution qualifies for the dividends
received deduction for corporations. Finally, the Portfolio paid a
long-term capital gain distribution of $.609715 per share to
shareholders of record on December 14, 1999.
Growth Opportunity Portfolio*
Of the ordinary income distributions paid by the Growth Opportunity
Portfolio to shareholders of record on December 14, 1999, 53.86%
qualifies for the dividends received deduction for corporations.
Additionally, the Portfolio paid long-term capital gains
distributions of $.982548 per share to shareholders of record on
December 14, 1999.
Quality Bond Portfolio
Of the net investment income distributions paid monthly by the
Quality Bond Portfolio during the fiscal year ended January 31,
2000, 3.14% is attributable to income from Federal obligations. None
of the monthly distributions qualify for the dividends received
deduction for corporations. Additionally, there were no long-term
capital gains distributions paid by the Portfolio during the fiscal
year.
US Government Securities Portfolio
Of the net investment income distributions paid monthly by the US
Government Securities Portfolio during the fiscal year ended January
31, 2000, 8.41% is attributable to income from Federal obligations.
None of these monthly distributions qualify for the dividends
received deduction for corporations. Additionally, there were no
long-term capital gains distributions paid by the Portfolio during
the fiscal year.
*All long-term capital gains distributions paid by the Portfolio are
subject to the 20% tax rate.
