MERRILL LYNCH
GLOBAL SMALLCAP
FUND, INC.
FUND LOGO
Quarterly Report
September 30, 1996
Officers and Directors
Arthur Zeikel, President and Director
Donald Cecil, Director
Edward H. Meyer, Director
Charles C. Reilly, Director
Richard R. West, Director
Edward D. Zinbarg, Director
Terry K. Glenn, Executive Vice President
Norman R. Harvey, Senior Vice President
Andrew John Bascand, Vice President
Donald C. Burke, Vice President
Kenneth Chiang, Vice President
Adrian Holmes, Vice President
Grace Pineda, Vice President
James Russell, Vice President
Daniel V. Szemis, Vice President
Gerald M. Richard, Treasurer
Robert Harris, Secretary
<PAGE>
Custodian
Brown Brothers Harriman & Co.
40 Water Street
Boston, MA 02109
Transfer Agent
Merrill Lynch Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 637-3863
This report is not authorized for use as an offer of sale or
solicitation of an offer to buy shares of the Fund unless
accompanied or preceded by the Fund's current prospectus. Past
performance results shown in this re-port 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
Global SmallCap
Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
Printed on post-consumer recycled paper
MERRILL LYNCH GLOBAL SMALLCAP FUND, INC.
<PAGE>
Merrill Lynch
Global SmallCap
Fund, Inc.
Management
Team
Andrew John Bascand--Senior Portfolio Manager/Asset Allocator. As
the Fund's Asset Allocator, Mr. Bascand is primarily responsible for
determining the allocation of the Fund's assets among equity markets
in the United States, Europe, the emerging markets and the Pacific
Basin.
Kenneth Chiang--Co-Portfolio Manager--Emerging Markets Investments.
Mr. Chiang is primarily responsible for the Fund's investments in
emerging markets in Asia.
Adrian Holmes--Co-Portfolio Manager--European Investments. Mr.
Holmes is primarily responsible for the Fund's European investments.
Grace Pineda--Co-Portfolio Manager--Emerging Markets Investments.
Ms. Pineda is primarily responsible for investments in emerging
markets in Europe and Latin America.
James Russell--Co-Portfolio Manager--Japanese Investments. Mr.
Russell is primarily responsible for the Fund's Japanese
investments.
Daniel Szemis--Co-Portfolio Manager--US Investments. Mr. Szemis is
primarily responsible for the Fund's investments in the United
States.
Worldwide
Investments
As of 9/30/96
Country of Percent of
Ten Largest Equity Holdings Origin Net Assets
Misys PLC United Kingdom 1.1%
Sinocan Holdings Ltd. Hong Kong 1.1
ADO Electric Industrial Co., Ltd. Japan 1.1
Burswood Property Trust Australia 1.1
Organo Corp. Japan 1.0
PT Great River Industries Indonesia 1.0
Japan Foundation Engineering
Co., Ltd. Japan 1.0
Ohsho Food Service Corp. Japan 1.0
Grossman's Inc. United States 1.0
Yondenko Corp. Japan 0.9
<PAGE>
Percent of
Ten Largest Industries Net Assets
Retail Specialty 3.3%
Engineering & Construction 2.9
Construction 2.8
Automobile Parts 2.7
Holding Company 2.5
Restaurants 2.5
Beverages 2.5
Textiles 2.4
Manufacturing 2.2
Iron & Steel 2.1
DEAR SHAREHOLDER
Global small cap issues generally underperformed large cap issues in
the third quarter of 1996. As measured by the unmanaged Salomon
Brothers Extended Market Index (SEMI), a specialist global small
capitalization stock index, global small caps returned -0.02% in US
dollar terms for the three months ended September 30, 1996. The
unmanaged Financial Times/S&P--Actuaries World Index, a measure of
large cap stock performance, returned +1.40% during the same period.
For the three-month period ended September 30, 1996, total returns
for Merrill Lynch Global SmallCap Fund, Inc.'s Class A, Class B,
Class C and Class D Shares were -1.84%, -2.15%, -2.15% and -2.03%,
respectively. (Results shown do not reflect sales charges, and would
be lower if sales charges were included. Complete performance
information, including average annual returns, can be found on pages
3--5 of this report to shareholders.) The underperformance of
Merrill Lynch Global SmallCap Fund, Inc. as compared to the SEMI
during the September quarter reflected our underweighted positions
in the United States and the United Kingdom, relative to Continental
Europe and Japan.
Within the small cap universe, the best-performing regions/markets
in US dollar terms were in the United States, the United Kingdom and
the Pacific Basin. Small cap issues in both Continental Europe and
Japan significantly underperformed large cap issues.
<PAGE>
The September quarter was marked by significant rallies in bond
markets, especially in Europe and Japan, with bond markets generally
outperforming equity markets. Another feature of the September
quarter was the appreciation of the US dollar against both the yen
and the Deutschemark.
Portfolio Changes
Regional emphasis remained relatively unchanged during the September
quarter. The diversified portfolio of small cap issues included an
effective 27% weighting in Europe, down slightly from the 29%
weighting of three months earlier. The weighting in Japan increased
to 29% of net assets compared to 25% at the end of June, while the
weightings in Pacific markets (ex-Japan) and the United States
increased to 13% and 17%, respectively, from 10% and 14%,
respectively. Overall, the Fund's effective equity exposure was 89%
of net assets compared to 86% three months earlier.
Economic and Investment
Environment
Economic indicators generally remained robust. Business indicators
in Europe rose significantly over the September quarter, and in the
United States, Canada and many Latin American economies, consensus
estimates of real gross domestic product growth continued to be
revised upward. Global inflationary pressures generally remained
subdued, and investors do not generally anticipate a rise in
official interest rates in the near term despite the pick up in
economic activity. We are becoming cautious regarding investor
expectations of interest rates and hence see potential short-term
risks to bond and equity markets.
Additionally, as of the end of September, our analysis of profits
forecasts remained below the consensus of analysts, especially in
the United States. Overall, we expect that profits announcements
could disappoint investors over the next 12 months--18 months.
As for the Fund's strategy, we maintain the view that small cap
issues should begin to outperform large cap issues, particularly in
Europe, Japan and the Pacific Basin. The main reason for this view
is that we expect a cyclical up-swing in these economies, and small
cap issues tend to perform well in these countries. We retain a
strategic exposure to emerging markets small caps reflecting
diversification opportunities.
In Conclusion
Global small cap issues performed well in the first half of 1996,
but paused in the September quarter. We perceive near-term risks to
financial markets stemming from the profits outlook in the United
States and the potentially overbought nature of some bond markets,
although small cap issues in Europe may benefit from improving
economic conditions. Looking ahead, we believe that the best
opportunities may lie in both the Pacific Basin and Europe.
<PAGE>
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Andrew Bascand)
Andrew Bascand
Senior Portfolio Manager/Asset
Allocator
(Kenneth Chiang)
Kenneth Chiang
Co-Portfolio Manager
Emerging Markets Investments--Asia
(Adrian C. Holmes)
Adrian C. Holmes
Co-Portfolio Manager
European Investments
<PAGE>
(Grace Pineda)
Grace Pineda
Co-Portfolio Manager
Emerging Markets Investments--
Europe and Latin America
(James Russell)
James Russell
Co-Portfolio Manager
Japanese Investments
(Daniel V. Szemis)
Daniel V. Szemis
Co-Portfolio Manager
US Investments
November 4, 1996
PERFORMANCE DATA
About Fund
Performance
Investors are able to purchase shares of the Fund 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. Class A Shares are available only to eligible
investors, as detailed in the Fund's prospectus. If you were a Class
A shareholder prior to October 21, 1994, your Class A Shares were
redesignated to Class D Shares on October 21, 1994, which, in the
case of certain eligible investors, were simultaneously exchanged
for Class A Shares.
<PAGE>
* 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. In addition, Class B
Shares are subject to a distribution fee of 0.75% and an account
maintenance fee of 0.25%. These shares automatically convert to
Class D Shares after approximately 8 years. (There is no initial
sales charge for automatic share conversions.)
* Class C Shares 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).
None of the past results shown should 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. 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.
<TABLE>
Performance
Summary--
Class A Shares++
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<S> <C> <C> <C> <C> <C>
10/21/94--12/31/94 $9.82 $ 9.37 $0.005 -- - 4.53%
1995 9.37 9.27 0.053 $0.105 + 0.66
1/1/96--9/30/96 9.27 10.66 -- -- +14.99
------ ------
Total $0.058 Total $0.105
Cumulative total return as of 9/30/96: +10.51%**
<PAGE>
<FN>
*Figures may include short-term capital gains distributions.
**Figures assume reinvestment of all dividends and capital gains
distributions at net asset value on the ex-dividend date, and do not
include sales charge; results would be lower if sales charge was
included.
++As a result of the implementation of the Merrill Lynch Select
Pricing SM System, Class A Shares of the Fund outstanding prior to
October 21, 1994 were redesignated to Class D Shares.
</TABLE>
PERFORMANCE DATA (concluded)
<TABLE>
Performance
Summary--
Class B Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change***
<S> <C> <C> <C> <C> <C>
8/5/94--12/31/94 $10.00 $ 9.34 $0.005 -- - 6.55%
1995 9.34 9.19 0.053 $0.052 - 0.45
1/1/96--9/30/96 9.19 10.48 -- -- +14.04
------ ------
Total $0.058 Total $0.052
Cumulative total return as of 9/30/96: +6.09%***
</TABLE>
<TABLE>
Performance
Summary--
Class C Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change***
<S> <C> <C> <C> <C> <C>
10/21/94--12/31/94 $9.80 $ 9.34 $0.005 -- - 4.64%
1995 9.34 9.19 0.053 $0.052 - 0.46
1/1/96--9/30/96 9.19 10.48 -- -- +14.04
------ ------
Total $0.058 Total $0.052
Cumulative total return as of 9/30/96: +8.24%***
</TABLE>
<PAGE>
<TABLE>
Performance
Summary--
Class D Shares++
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<S> <C> <C> <C> <C> <C>
8/5/94--12/31/94 $10.00 $ 9.37 $0.005 -- - 6.25%
1995 9.37 9.25 0.053 $0.093 + 0.31
1/1/96--9/30/96 9.25 10.61 -- -- +14.70
------ ------
Total $0.058 Total $0.093
Cumulative total return as of 9/30/96: +7.87%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures assume reinvestment of all dividends and capital gains
distributions at net asset value on the ex-dividend date, and do not
include sales charge; results would be lower if sales charge was
included.
***Figures assume reinvestment of all dividends and capital gains
distributions at net asset value on the ex-dividend date, and do not
reflect deduction of any sales charge; results would be lower if
sales charge was deducted.
++As a result of the implementation of the Merrill Lynch Select
Pricing SM System, Class A Shares of the Fund outstanding prior to
October 21, 1994 were redesignated to Class D Shares.
</TABLE>
<TABLE>
Recent
Performance
Results*
12 Month 3 Month
9/30/96 6/30/96 9/30/95 % Change % Change
<S> <C> <C> <C> <C> <C>
Class A Shares $10.66 $10.86 $9.48 +13.11%(1) -1.84%
Class B Shares 10.48 10.71 9.37 +12.51(1) -2.15
Class C Shares 10.48 10.71 9.37 +12.51(1) -2.15
Class D Shares 10.61 10.83 9.46 +12.81(1) -2.03
Class A Shares--Total Return +14.41(2) -1.84
Class B Shares--Total Return +13.16(3) -2.15
Class C Shares--Total Return +13.15(4) -2.15
Class D Shares--Total Return +13.96(5) -2.03
<PAGE>
<FN>
*Investment results shown do not reflect sales charges; results
shown would be lower if a sales charge was included.
(1)Percent change includes reinvestment of $0.053 per share capital
gains distributions.
(2)Percent change includes reinvestment of $0.105 per share ordinary
income dividends and $0.053 per share capital gains distributions.
(3)Percent change includes reinvestment of $0.052 per share ordinary
income dividends and $0.053 per share capital gains distributions.
(4)Percent change includes reinvestment of $0.052 per share ordinary
income dividends and $0.053 per share capital gains distributions.
(5)Percent change includes reinvestment of $0.093 per share ordinary
income dividends and $0.053 per share capital gains distributions.
</TABLE>
Average Annual
Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 9/30/96 +14.41% +8.40%
Inception (10/21/94) through 9/30/96 + 5.27 +2.39
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 9/30/96 +13.16% +9.16%
Inception (8/5/94) through 9/30/96 + 2.78 +1.88
<PAGE>
[FN]
*Maximum contingent deferred sales charge is 4% and is reduced to 0%
after 4 years.
**Assuming payment of applicable contingent deferred sales charge.
% Return % Return
Without CDSC With CDSC**
Class C Shares*
Year Ended 9/30/96 +13.15% +12.15%
Inception (10/21/94) through 9/30/96 + 4.16 + 4.16
[FN]
*Maximum contingent deferred sales charge is 1% and is reduced to 0%
after 1 year.
**Assuming payment of applicable contingent deferred sales charge.
% Return Without % Return With
Sales Charge Sales Charge**
Class D Shares*
Year Ended 9/30/96 +13.96% +7.98%
Inception (8/5/94) through 9/30/96 + 3.58 +1.02
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
<TABLE>
SCHEDULE OF INVESTMENTS (in US dollars)
<CAPTION>
Percent of
EUROPE Industries Shares Held Investments Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
Denmark Security Services 3,600 Falck A/S $ 904,370 $ 975,348 0.6%
Textiles 22,324 Carli Grey International A/S 633,294 964,213 0.6
Total Investments in Denmark 1,537,664 1,939,561 1.2
Finland Holding Company 38,000 America Group Ltd. 683,652 857,037 0.5
13,700 Fiskars OY AB 709,143 1,046,947 0.7
Total Investments in Finland 1,392,795 1,903,984 1.2
France Advertising 10,440 Havas Advertising S.A. 946,224 1,100,438 0.7
Computer Software 2,157 Altran Technologies S.A. 561,773 602,673 0.4
Holding Company 2,978 Societe EuraFrance S.A. 901,134 1,184,045 0.7
Insurance 2,868 Cardif S.A. 282,878 404,554 0.3
Manufacturing 35,000 Sommer Allibert S.A. 1,037,025 929,084 0.6
Total Investments in France 3,729,034 4,220,794 2.7
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
EUROPE Percent of
(concluded) Industries Shares Held Investments Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
Germany Machine Tools & 3,850 Walter AG $ 977,454 $ 1,095,098 0.7%
Machinery
Machinery & Engineering 39,100 Kloeckner Werke AG 3,734,471 1,370,986 0.9
Retail Specialty 18,000 Moebel Walther AG 770,212 1,014,550 0.6
Total Investments in Germany 5,482,137 3,480,634 2.2
Greece Building & Construction 7,990 Titan Cement Co. S.A. 302,811 440,979 0.3
Total Investments in Greece 302,811 440,979 0.3
Ireland Transportation 79,000 Irish Continental Group PLC 629,034 605,812 0.4
Total Investments in Ireland 629,034 605,812 0.4
Italy Building & 299,176 Fochi Filippo S.p.A. (Ordinary) 910,887 23,597 0.0
Construction
Diversified 1,850,000 Compagnie Industriali Riunite
S.p.A. (CIR) 2,071,370 902,261 0.6
Total Investments in Italy 2,982,257 925,858 0.6
Netherlands Electrical Equipment 25,109 Twentsche Kabel Holding NV 988,513 1,174,141 0.7
Electronics 23,200 Otra NV 491,675 413,608 0.3
Engineering & 20,806 Kondor Wessels Group NV 780,063 744,288 0.5
Construction
Holding Company 38,855 Internatio-Muller NV 775,019 944,802 0.6
Total Investments in the Netherlands 3,035,270 3,276,839 2.1
Poland Engineering & 131,800 Elektrim Towarzystwo Handlowe S.A. 462,537 1,291,558 0.8
Construction
Tire & Rubber 30,000 T.C. Debica S.A. 399,679 641,414 0.4
Total Investments in Poland 862,216 1,932,972 1.2
<PAGE>
Portugal Retail Sales 12,600 Establecimentos Jeronimo Martins
& Filho S.A. 644,835 1,146,710 0.7
Total Investments in Portugal 644,835 1,146,710 0.7
Spain Glass 15,835 Cristaleria Espanola S.A. 697,591 980,820 0.6
Real Estate 47,946 Vallehermoso S.A. 815,741 928,288 0.6
Textiles 115,000 Algodonera de San Antonio 1,269,666 891,508 0.6
Total Investments in Spain 2,782,998 2,800,616 1.8
Sweden Automobile Parts 76,800 Garphyttan Industrier AB 988,225 1,043,793 0.7
Engineering 30,000 Kalmar Industries AB 511,003 466,626 0.3
Engineering & 38,878 Svedala Industri AB 510,552 675,169 0.4
Construction
Forest Products/ 1,153,500 Rottneros Bruks AB Free 1,779,027 1,376,117 0.9
Paper & Packaging
Investment Management 133,620 Bure Investment AB 1,139,371 1,281,315 0.8
Manufacturing 70,853 Getinge Industrier AB (B Shares) 945,243 1,358,854 0.9
Medical Supplies 28,460 Nobel Biocare AB 515,269 537,224 0.3
Total Investments in Sweden 6,388,690 6,739,098 4.3
Switzerland Engineering & 400 Daetwyler Holdings AG 679,000 647,735 0.4
Construction
Industrials 9,175 Oerlikon-Buehrle Holdings AG 989,278 924,014 0.6
Medical Supplies 417 Disetronic Holdings AG 775,311 879,838 0.6
Photography 3,082 Fotolabo S.A. 1,034,207 1,005,534 0.6
Retailing 1,560 Grands Magasins Jelmoli S.A. 959,600 746,650 0.5
Total Investments in Switzerland 4,437,396 4,203,771 2.7
Turkey Beverages 871,475 Erciyas Biracilik Ve Malt Sanayii A.S. 566,377 450,927 0.3
Metal Fabricating 5,100,000 Eregli Demir Ve Celik Fabrikalari A.S. 570,786 550,000 0.4
Total Investments in Turkey 1,137,163 1,000,927 0.7
<PAGE>
United Beverages 95,000 Matthew Clark PLC 1,000,663 501,778 0.3
Kingdom
Broadcasting 78,000 Flextech PLC 630,757 660,399 0.4
Chemicals 260,000 Inspec Group PLC 1,478,306 925,698 0.6
130,000 Inspec Group PLC (New Shares) 366,397 465,901 0.3
------------ ------------ ------
1,844,703 1,391,599 0.9
Computer Services 124,500 Misys PLC 1,248,027 1,694,156 1.1
Computers 349,600 Acorn Computer Group PLC 499,614 1,083,306 0.7
Diversified 889,000 Howden Group PLC 1,262,630 987,812 0.6
Food & Beverage 667,000 Hazlewood Foods PLC 1,271,988 1,007,320 0.7
Hotels 188,000 Jurys Hotel Group PLC 830,317 841,469 0.5
Manufacturing 120,500 Low & Bonar PLC (Ordinary) 792,075 1,054,176 0.7
Media/Publishing 300,000 International Business Communications
PLC (Ordinary) 1,043,116 1,471,883 0.9
Pharmaceuticals 55,300 Celltech Group PLC 549,111 443,541 0.3
144,300 Oxford Molecular Group PLC 756,094 718,138 0.5
------------ ------------ ------
1,305,205 1,161,679 0.8
Textiles 310,500 Dewhirst Group PLC 865,987 928,131 0.6
Total Investments in the United Kingdom 12,595,082 12,783,708 8.2
Total Investments in Europe 47,939,382 47,402,263 30.3
LATIN AMERICA
Argentina Iron & Steel 36,000 Siderar S.A. (ADR) (a) 612,000 828,000 0.5
Retailing 24,889 Grimoldi S.A. 95,150 121,974 0.1
Total Investments in Argentina 707,150 949,974 0.6
Brazil Textiles 2,054,000 Companhia de Tecidos Norte de Minas
S.A. (Preferred) 652,560 748,372 0.5
Utilities--Electric 715,000 Centrais Electricas da Santa Catarina
S.A. (CELESC) 'B' (Preferred) 648,753 616,259 0.4
164,478 Centrais Electricas da Santa Catarina
S.A. (CELESC) (Receipts) 132,227 141,764 0.1
------------ ------------ ------
780,980 758,023 0.5
<PAGE>
Total Investments in Brazil 1,433,540 1,506,395 1.0
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
LATIN AMERICA Percent of
(concluded) Industries Shares Held Investments Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
Colombia Banking 41,300 Banco Ganadero S.A. (ADR) (a) $ 811,698 $ 836,325 0.5%
Total Investments in Colombia 811,698 836,325 0.5
Mexico Building Materials 47,890 Internacional de Ceramica S.A.
de C.V. (ADR)(a) 355,919 293,326 0.2
Transportation 350,850 Grupo Financiero Banorte S.A.
de C.V. (Class B) 387,614 376,359 0.2
Total Investments in Mexico 743,533 669,685 0.4
Peru Foods 250,947 Consorcio Alimentos Fabril
Pacifico S.A. 268,537 370,365 0.3
Total Investments in Peru 268,537 370,365 0.3
Total Investments in Latin America 3,964,458 4,332,744 2.8
MIDDLE EAST/
AFRICA
South Entertainment 625,800 Sun International (South Africa) Ltd. 815,854 662,587 0.4
Africa
Mining 124,500 Elandsrand Gold Mining Company Ltd. 741,459 659,093 0.4
38,000 Kinross Mines Ltd. 407,226 312,650 0.2
------------ ------------ ------
1,148,685 971,743 0.6
Total Investments in South Africa 1,964,539 1,634,330 1.0
Zimbabwe Beverages 253,512 Delta Corporation Ltd. 407,960 773,052 0.5
Total Investments in Zimbabwe 407,960 773,052 0.5
Total Investments in the
Middle East/Africa 2,372,499 2,407,382 1.5
<PAGE>
NORTH
AMERICA
Canada Insurance 6,500 Arbatax International Inc. 40,311 45,825 0.0
Leisure 42,384 Four Seasons Hotels Ltd. 495,789 749,967 0.5
Mining 32,925 Cambior Inc. 457,703 456,834 0.3
Natural Resources 30,000 Total Petroleum of North America Ltd. 295,925 311,250 0.2
Total Investments in Canada 1,289,728 1,563,876 1.0
United Aerospace 8,300 BE Aerospace Inc. 109,274 170,150 0.1
States 110,000 UNC, Inc. 637,625 976,250 0.6
------------ ------------ ------
746,899 1,146,400 0.7
Apparel 115,000 Farah, Inc. 1,148,408 848,125 0.5
70,100 Norton McNaughton, Inc. 850,711 569,563 0.4
------------ ------------ ------
1,999,119 1,417,688 0.9
Automobile Parts 3,800 Walbro Corp. 71,116 70,300 0.0
Automotive 8,500 Smith (A.O.) Corporation 175,823 211,438 0.1
Banking & Finance 15,650 Charter One Financial, Inc. 285,221 626,000 0.4
15,000 Roosevelt Financial Group, Inc. 242,463 256,875 0.2
------------ ------------ ------
527,684 882,875 0.6
Biotechnology 15,000 COR Therapeutics, Inc. 168,375 150,000 0.1
12,400 Ostex International Inc. 133,600 99,200 0.1
13,900 Scios, Inc. 68,663 86,006 0.1
------------ ------------ ------
370,638 335,206 0.3
Building & Building 22,000 Giant Cement Holding, Inc. 293,938 327,250 0.2
Materials 1,024,400 Grossman's Inc. 1,835,464 1,504,588 1.0
15,300 Ryland Group, Inc. 206,581 227,588 0.1
------------ ------------ ------
2,335,983 2,059,426 1.3
Chemicals 8,800 Arcadian Corp. 173,361 218,900 0.1
Computer Software 54,900 Hyperion Software Corp. 599,419 830,363 0.5
11,000 MathSoft, Inc. 57,906 57,750 0.0
16,600 Software Spectrum Inc. 337,768 485,550 0.3
19,800 Structural Dynamics Research Corp. 400,609 472,725 0.3
28,000 VMARK Software, Inc. 439,368 185,500 0.1
------------ ------------ ------
1,835,070 2,031,888 1.2
<PAGE>
Computer Technology 7,700 Voice Control Systems, Inc. 40,425 46,200 0.0
Computers 20,700 Storage Technology Corporation 565,734 784,013 0.5
13,800 Stratus Computer, Inc. 388,732 272,550 0.2
24,700 Telxon Corporation 274,366 339,625 0.2
------------ ------------ ------
1,228,832 1,396,188 0.9
Data Processing 8,000 Compuware Corp. 265,941 362,000 0.2
34,600 Platinum Technology Inc. 484,317 436,825 0.3
5,000 Sterling Software, Inc. 177,175 381,875 0.3
34,400 Symantec Corp. 403,103 374,100 0.2
------------ ------------ ------
1,330,536 1,554,800 1.0
Electronics 16,300 Allen Group, Inc. 281,830 301,550 0.2
11,800 Alpha Industries, Inc. 107,782 89,975 0.1
20,800 BI, Inc. 216,454 166,400 0.1
29,500 CHS Electronics Inc. 410,911 379,813 0.2
3,300 ITI Technologies Inc. 90,113 116,325 0.1
2,700 Marshall Industries 79,096 81,338 0.1
28,600 VLSI Technology, Inc. 363,594 464,750 0.3
2,500 Wyle Electronics 78,925 80,313 0.1
------------ ------------ ------
1,628,705 1,680,464 1.2
Engineering & 19,200 Insituform Technologies, Inc.
Construction (Class A) 135,525 153,600 0.1
Environmental Control 25,740 BHA Group Inc. (Class A) 346,317 373,230 0.2
78,000 Envirosource Inc. 304,028 292,500 0.2
------------ ------------ ------
650,345 665,730 0.4
Fertilizer 12,000 Mississippi Chemical Corp. 256,967 276,000 0.2
Healthcare--Products/ 25,000 Beverly Enterprises, Inc. 339,391 271,875 0.2
Services 49,000 Magellan Health Services, Inc. 884,348 1,016,750 0.6
53,800 Ramsay Health Care, Inc. 330,777 114,325 0.1
------------ ------------ ------
1,554,516 1,402,950 0.9
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
NORTH AMERICA Shares Held/ Percent of
(concluded) Industries Face Amount Investments Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
United Home Furnishing 20,400 Crown Crafts, Inc. $ 303,212 $ 193,800 0.1%
States
(concluded) Insurance 3,800 Midland Financial Group, Inc. 30,163 36,100 0.0
60,000 PXRE Corp. 1,375,075 1,372,500 0.9
17,700 Security-Connecticut Corp. 400,500 555,337 0.4
------------ ------------ ------
1,805,738 1,963,937 1.3
Iron & Steel 15,800 Gibraltar Steel Corp. 284,998 355,500 0.2
11,700 Olympic Steel, Inc. 247,472 314,437 0.2
34,800 Quanex Corp. 751,867 935,250 0.6
------------ ------------ ------
1,284,337 1,605,187 1.0
Machinery 12,000 AGCO Corp. 266,610 306,000 0.2
16,200 Bearings, Inc. 466,837 457,650 0.3
19,800 Cincinnati Milacron, Inc. 483,025 373,725 0.2
------------ ------------ ------
1,216,472 1,137,375 0.7
Medical 10,000 Analogic Corporation 171,250 277,500 0.2
10,600 Biomatrix, Inc. 161,208 177,550 0.1
5,000 Healthdyne Technologies, Inc. 60,100 41,875 0.0
19,200 Medex, Inc. 206,272 280,800 0.2
9,000 Sierra Health Services Inc. 294,063 309,375 0.2
9,000 Sofamor Danek Group, Inc. 206,981 277,875 0.2
------------ ------------ ------
1,099,874 1,364,975 0.9
Medical Services 5,392 Pharmaceutical Product
Development, Inc. 83,339 145,579 0.1
Metals 13,700 Castle (A.M) & Company 230,160 275,712 0.2
15,600 Commonwealth Aluminum Corp. 261,040 259,350 0.2
33,200 Shiloh Industries, Inc. 450,582 531,200 0.3
------------ ------------ ------
941,782 1,066,262 0.7
Natural Resources 20,300 Brown (Tom), Inc. 236,050 383,162 0.2
28,700 Newpark Resources Inc. 628,262 1,043,962 0.7
35,000 Plains Resources, Inc. 218,750 485,625 0.3
55,000 TransTexas Gas Corp. 605,000 618,750 0.4
38,700 Zemex Corporation 344,674 299,925 0.2
------------ ------------ ------
2,032,736 2,831,424 1.8
Office--Related 1,800 Wang Laboratories, Inc. 35,388 35,100 0.0
<PAGE>
Paper & Forest 24,800 Mercer International, Inc. 422,910 331,700 0.2
Products 19,000 Pope & Talbot, Inc. 305,092 292,125 0.2
------------ ------------ ------
728,002 623,825 0.4
Pharmaceuticals 48,300 NeoRx Corp. 324,962 259,612 0.2
Restaurants 26,900 Au Bon Pain Company, Inc. (Class A) 180,475 188,300 0.1
67,500 TPI Enterprises, Inc. 377,458 198,281 0.1
------------ ------------ ------
557,933 386,581 0.2
Retailing 85,000 Baker (J.), Inc. 1,231,429 499,375 0.3
27,300 CML Group, Inc. 83,265 133,087 0.1
25,000 Catherines Stores Corp. 202,020 181,250 0.1
34,500 Chico's Fashions Inc. 248,069 258,750 0.2
20,300 Department 56, Inc. 460,150 504,962 0.3
67,100 Levitz Furniture Inc. 338,698 260,012 0.2
7,500 Rex Stores Corp. 97,950 82,500 0.1
------------ ------------ ------
2,661,581 1,919,936 1.3
Technology 18,100 Rofin-Sinar Technologies, Inc. 171,950 192,312 0.1
13,500 VISX, Inc. 323,407 361,125 0.2
------------ ------------ ------
495,357 553,437 0.3
Telecommunication 500 Advanced Fibre Communications, Inc. 12,500 12,500 0.0
Equipment 40,000 Comdial Corp. 245,000 270,000 0.2
15,000 InterVoice, Inc. 228,490 221,250 0.1
33,400 Network Equipment Technologies, Inc. 640,817 455,075 0.3
------------ ------------ ------
1,126,807 958,825 0.6
Transportation 10,300 Air Express International Corp. 278,291 290,975 0.2
2,400 Expeditors International of
Washington, Inc. 69,219 84,600 0.1
10,000 Kirby Corp. 154,306 176,250 0.1
------------ ------------ ------
501,816 551,825 0.4
Total Investments in the United States 30,260,880 31,147,733 19.9
Total Investments in North America 31,550,608 32,711,609 20.9
PACIFIC
BASIN
<PAGE>
Australia Entertainment 1,188,000 Burswood Property Trust 1,567,077 1,616,298 1.1
Mining 559,351 QCT Resources Ltd. 650,305 787,555 0.5
Publishing 283,000 West Australian Newspaper Holdings Ltd. 1,034,360 1,108,072 0.7
Total Investments in Australia 3,251,742 3,511,925 2.3
Hong Kong Banking 1,432,333 JCG Holdings, Ltd. 1,085,879 1,287,336 0.8
Financial US$ 420,000 Goldlion Capital Corp., 4.875% due
Services 2/01/1999 318,914 571,200 0.3
Foods/Food 5,653,000 Tingyi (Cayman Islands) Holdings Co. 1,309,939 1,191,598 0.8
Processing
Packaging 3,772,600 Sinocan Holdings Ltd. 1,254,878 1,683,151 1.1
Total Investments in Hong Kong 3,969,610 4,733,285 3.0
Indonesia Banking--International 303,000 PT Bank Bali (Foreign) 634,023 626,087 0.4
Consumer--Goods 260,000 PT Wicaksana Overseas International 336,176 313,388 0.2
Textiles & Apparel 3,142,000 PT Great River Industries 1,013,657 1,555,446 1.0
Total Investments in Indonesia 1,983,856 2,494,921 1.6
Japan Automobile Parts 30,000 Exedy Corporation 511,228 481,614 0.3
58,000 Murakami Corp. 1,148,025 832,287 0.5
36,000 Sanoh Industrial Co. 472,700 272,825 0.2
110,000 Showa Corp. 1,098,685 1,016,143 0.6
85,000 Yamakawa Industrial Co. 1,040,181 595,381 0.4
------------ ------------ ------
4,270,819 3,198,250 2.0
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
PACIFIC BASIN Percent of
(concluded) Industries Shares Held Investments Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
Japan Banking 17,000 Bank of the Ryukyus, Ltd. $ 988,951 $ 629,686 0.4%
(concluded)
Beverages 79,000 Hokkaido Coca-Cola Bottling
Co., Ltd. 1,298,058 1,020,269 0.7
74,000 Sanyo Coca-Cola Bottling Co., Ltd. 1,118,168 1,055,247 0.7
------------ ------------ ------
2,416,226 2,075,516 1.4
<PAGE>
Chemicals 42,000 Canon Chemicals, Inc. 941,249 892,735 0.6
25,000 Katakura Chikkarin Co., Ltd. 278,421 182,735 0.1
------------ ------------ ------
1,219,670 1,075,470 0.7
Computer Services 51,700 TKC Corp. 1,374,367 1,414,215 0.9
Construction 89,600 Japan Foundation Engineering
Co., Ltd. 1,735,016 1,534,852 1.0
80,000 Tsuchiya Home Co. 1,737,127 1,470,852 0.9
157,000 Yondenko Corp. 1,518,456 1,478,475 0.9
------------ ------------ ------
4,990,599 4,484,179 2.8
Consumer Electricals 59,000 Roland Corp. 1,429,975 1,031,839 0.7
Electrical Equipment 24,000 Energy Support Corp. 182,225 117,309 0.1
26,000 Shinmei Electric Co. 1,340,491 550,314 0.4
52,000 Sukegawa Electric Co. 682,344 401,543 0.3
------------ ------------ ------
2,205,060 1,069,166 0.8
Foods/Food Processing 43,000 Ariake Japan Co., Ltd. 1,525,975 1,384,484 0.9
Health Services 25,000 Kanto Biomedical Laboratory Co. 528,125 502,242 0.3
26,000 SRL Inc. 557,018 459,372 0.3
------------ ------------ ------
1,085,143 961,614 0.6
Industrials 13,200 Nitto Kohki Company Ltd. 489,424 526,816 0.3
31,000 Roki Techno Co., Ltd. 868,533 614,439 0.4
------------ ------------ ------
1,357,957 1,141,255 0.7
Iron & Steel 218,000 Nippon Chutesukan K.K. 1,367,147 1,008,861 0.6
Machinery 48,400 Giken Seisakusho Co. Inc. 1,182,453 768,323 0.5
27,000 Miura Co., Ltd. 449,645 435,874 0.3
------------ ------------ ------
1,632,098 1,204,197 0.8
Metal Fabrication 124,000 Toyo Kohan Co., Ltd. 1,057,406 889,686 0.6
Packaging 45,000 Chuo Kagaku Co. Ltd. 1,894,958 948,430 0.6
Pharmaceuticals 12,000 Towa Pharmaceutical Co. 709,641 253,991 0.2
Pollution Control 168,000 Organo Corp. 1,844,463 1,597,130 1.0
<PAGE>
Real Estate 53,000 Keihanshin Real Estate Co. Ltd. 525,507 423,049 0.3
56,000 TOC Corp. 596,958 667,982 0.4
------------ ------------ ------
1,122,465 1,091,031 0.7
Restaurants 47,000 Aim Services Co., Ltd. 1,405,610 1,074,888 0.7
45,000 Mos Food Services, Inc. 1,446,914 968,610 0.6
83,000 Ohsho Food Service Corp. 2,244,318 1,511,121 1.0
------------ ------------ ------
5,096,842 3,554,619 2.3
Retail Specialty 60,000 ADO Electric Industrial Co., Ltd. 1,956,905 1,678,924 1.1
60,000 Arcland Sakamoto Co., Ltd. 964,197 887,892 0.5
71,000 Daika Corporation 1,109,857 529,157 0.3
48,000 Home Wide Corp. 847,706 572,556 0.4
30,000 Nitori Co. 906,611 632,287 0.4
------------ ------------ ------
5,785,276 4,300,816 2.7
Retail Stores 106,000 Sotetsu Rosen Co., Ltd. 992,634 812,825 0.5
Services 66,150 Ichinen Co., Ltd. 1,667,714 1,067,892 0.7
Trading 31,000 Japan CBM Corp. 1,200,936 973,094 0.6
Trucking 108,000 Nippon Konpo Unyu Soko Co. 1,045,185 894,996 0.6
70,000 Tonami Transportation Co., Ltd. 548,070 433,184 0.2
------------ ------------ ------
1,593,255 1,328,180 0.8
Total Investments in Japan 48,829,577 37,496,426 24.0
Malaysia Advertising 201,000 Seni Jaya Corporation BHD 623,215 673,824 0.4
Broadcasting 135,000 Sistem Televisyen Malaysia BHD 207,258 280,161 0.2
135,000 Sistem Televisyen Malaysia BHD
(Class A) 201,389 246,757 0.2
------------ ------------ ------
408,647 526,918 0.4
Chemicals 16,000 Chemical Company of Malaysia BHD 49,599 49,806 0.0
Engineering & 304,000 Asas Dunia BHD 1,084,560 1,170,771 0.7
Construction
Newspaper/Publishing 132,000 New Straits Times Press BHD 541,189 695,375 0.5
Total Investments in Malaysia 2,707,210 3,116,694 2.0
<PAGE>
New Zealand Agriculture 1,090,500 Wrightson Ltd. 808,404 883,842 0.5
Chemicals 146,000 Fernz Corporation Ltd. 439,021 436,604 0.3
Food Merchandising 1,170,000 Affco Holdings Ltd. 474,738 400,565 0.2
Real Estate 135,000 Kiwi Income Property Trust 94,514 94,324 0.1
Textiles 88,500 Lane Walker Rudkin Industries, Ltd. 101,374 102,646 0.1
Total Investments in New Zealand 1,918,051 1,917,981 1.2
Philippines Banking 65,400 Security Bank Corporation 114,553 162,252 0.1
Financial Services 256,250 Far East Bank & Trust Company 718,294 899,809 0.6
Total Investments in the Philippines 832,847 1,062,061 0.7
South Korea Utilities--Electric 22,700 Korea Electric Power Corp. (ADR) (a) 500,762 428,462 0.3
Wireless Communications 72,800 Korea Mobile Telecommunications Corp.
(GDR) (b) 885,433 1,110,200 0.7
Total Investments in South Korea 1,386,195 1,538,662 1.0
Thailand Transportation 62,000 Thoresen Thai Agency PLC 'Express'
(Warrants)(d) 0 73,194 0.0
310,000 Thoresen Thai Agency PLC 'Foreign' 795,493 731,938 0.5
56,000 Thoresen Thai Agency PLC 'Local' 122,172 132,221 0.1
Total Investments in Thailand 917,665 937,353 0.6
Total Investments in the Pacific Basin 65,796,753 56,809,308 36.4
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<CAPTION>
SOUTHEAST Shares Held/ Percent of
ASIA Industries Face Amount Investments Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
India Hotels 39,600 East India Hotels Ltd. (GDR)(b) $ 576,350 $ 778,140 0.5%
Recreation & Consumer 250,000 Su-Raj Diamonds Ltd. 346,583 193,935 0.1
Goods
Total Investments in Southeast Asia 922,933 972,075 0.6
<PAGE>
SHORT-TERM
SECURITIES Issue
Commercial US$ 5,166,000 General Electric Capital Corp.,
Paper* 5.80% due 10/01/1996 5,166,000 5,166,000 3.3
Total Investments in Commercial Paper 5,166,000 5,166,000 3.3
Foreign Government 1,060,000 UK Treasury Bill, 5.592% due 12/17/1996 1,628,923 1,639,657 1.1
Obligations*
Total Investments in Foreign Government
Obligations 1,628,923 1,639,657 1.1
US Government & 3,000,000 Federal Home Loan Bank, 5.16% due
Agency Obligations* 10/03/1996 2,999,140 2,999,140 1.9
United States Treasury Bills (c):
80,000 4.87% due 10/24/1996 79,751 79,755 0.1
40,000 4.96% due 10/24/1996 39,873 39,877 0.0
50,000 5.06% due 10/24/1996 49,838 49,847 0.0
40,000 5.13% due 10/24/1996 39,869 39,877 0.0
110,000 5.14% due 10/24/1996 109,639 109,662 0.1
800,000 5.155% due 10/24/1996 797,365 797,544 0.5
Total Investments in US Government
& Agency Obligations 4,115,475 4,115,702 2.6
Total Investments in Short-Term
Securities 10,910,398 10,921,359 7.0
Total Investments $163,457,031 155,556,740 99.5
============
Unrealized Appreciation on Forward Foreign Exchange Contracts** 667,754 0.4
Variation Margin on Stock Index Futures Contracts*** (204) 0.0
Other Assets Less Liabilities 84,172 0.1
------------ ------
Net Assets $156,308,462 100.0%
============ ======
Net Asset Value: Class A--Based on net assets of $3,331,285
and 312,605 shares outstanding $ 10.66
============
Class B--Based on net assets of $125,662,576
and 11,990,345 shares outstanding $ 10.48
============
Class C--Based on net assets of $5,692,074 and
543,300 shares outstanding $ 10.48
============
Class D--Based on net assets of $21,622,527 and
2,037,057 shares outstanding $ 10.61
============
<PAGE>
<FN>
*Commercial Paper and certain Foreign Government Obligations and US
Government & Agency Obligations are traded on a discount basis; the
interest rates shown are the discount rates paid at the time of
purchase by the Fund.
**Forward foreign exchange contracts as of September 30, 1996 were
as follows:
Unrealized
Foreign Currency Expiration Appreciation
Purchased Date (Depreciation)
YEN 268,643,750 November 1996 $(96,425)
Total (US$ Commitment--$2,522,476) $(96,425)
--------
Foreign
Currency Sold
DM 2,439,415 November 1996 $ 47,795
FMK 6,954,200 November 1996 32,620
Frf 5,932,684 November 1996 20,315
Nlg 1,650,180 November 1996 28,509
NZ$ 2,392,079 November 1996 (25,064)
YEN 1,859,343,510 November 1996 660,004
Total (US$ Commitment--$24,469,845) $764,179
--------
Total Unrealized Appreciation--Net on
ForwardForeign Exchange Contracts $667,754
========
***Stock index contracts sold as of September 30, 1996 were as follows:
Number of Expiration
Contracts Issue Exchange Date Value
100 DAX Index DTB December 1996 $ 350,177
25 FTSE 100 LIFFE December 1996 935,948
12 S&P Index CME December 1996 4,148,400
Total Stock Index Contracts Sold
(Total Contract Price--$5,392,435) $5,434,525
==========
<PAGE>
(a)American Depositary Receipts (ADR).
(b)Global Depositary Receipts (GDR).
(c)Securities held as collateral in connection with open stock index
futures contracts.
(d)Warrants entitle the Fund to purchase a predetermined number of
shares of stock/face amount of bonds at a a predetermined price
until the expiration date.
</TABLE>
EQUITY PORTFOLIO CHANGES
For the Quarter Ended September 30, 1996
Additions
Advanced Fibre
Communications, Inc.
Allen Group, Inc.
Au Bon Pain Company, Inc.
(Class A)
Burswood Property Trust
Castle (A.M.) & Company
Centrais Electricas da Santa
Catarina S.A. (CELESC) 'B'
(Preferred)
Centrais Electricas da Santa
Catarina S.A. (CELESC)
(Receipts)
Chemical Company of Malaysia
BHD
Comdial Corp.
*Control Data Systems, Inc.
*Cypress SemiConductor Corp.
Exedy Corporation
Falck A/S
Grossman's Inc.
Grupo Financiero Banorte S.A.
de C.V. (Class B)
Insituform Technologies, Inc.
(Class A)
Inspec Group PLC (New Shares)
InterVoice, Inc.
*Makro Atacadista S.A.
Marshall Industries
MathSoft, Inc.
Midland Financial Group, Inc.
Pharmaceutical Product
Development, Inc.
Rofin-Sinar Technologies, Inc.
Sofamor Danek Group, Inc.
Structural Dynamics Research
Corp.
Thoresen Thai Agency PLC
'Express' (Warrants)
Thoresen Thai Agency PLC
'Foreign'
Thoresen Thai Agency PLC
'Local'
VISX, Inc.
Voice Control Systems, Inc.
Walbro Corp.
Wang Laboratories, Inc.
Wyle Electronics
<PAGE>
Deletions
Acerinox S.A.
Applied Bioscience
International, Inc.
CasTech Aluminum Group, Inc.
Cognos, Inc.
*Control Data Systems, Inc.
*Cypress SemiConductor Corp.
Ecco S.A.
First Colony Corp.
Goldwin Inc.
Grupo Financiero Banorte, S.A.
de C.V.
Landmark Graphics Corp.
*Makro Atacadista S.A.
Players International Inc.
QBE Insurance Group
Redman Industries, Inc.
Telecomunicacoes de Minas
Gerais S.A.--TELEMIG
(Class B) (Preferred)
USK Corp.
Walden Bancorp Inc.
[FN]
*Added and deleted in the same quarter.
