MERRILL LYNCH
GLOBAL SMALLCAP
FUND, INC.
FUND LOGO
Quarterly Report
March 31, 1996
<PAGE>
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
Gerald M. Richard, Treasurer
Robert Harris, Secretary
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
<PAGE>
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 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
Global SmallCap
Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
MERRILL LYNCH GLOBAL SMALLCAP FUND, INC.
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.
<PAGE>
Worldwide
Investments
As of 3/31/96
Country of Percent of
Ten Largest Equity Holdings Origin Net Assets
Organo Corp. Japan 1.2%
Fotolabo S.A. Switzerland 1.2
Misys PLC United Kingdom 1.2
Japan Foundation Engineering Japan 1.2
Getinge Industrier AB (B Shares) Sweden 1.1
PXRE Corp. United States 1.1
Ohsho Food Service Corp. Japan 1.0
Tsuchiya Home Co. Japan 1.0
Kloeckner Werke AG Germany 1.0
Sinocan Holdings Ltd. Hong Kong 1.0
Percent of
Ten Largest Industries Net Assets
Retail Specialty 4.0%
Insurance 4.0
Construction 3.3
Holding Company 2.9
Automotive Parts 2.8
Retailing 2.7
Beverages 2.5
Restaurants 2.4
Textiles 2.4
Engineering & Construction 2.3
DEAR SHAREHOLDER
The first quarter of 1996 saw a strong performance by global equity
markets. According to the unmanaged Salomon Brothers Extended Market
Index (SEMI), a small capitalization index, global small caps
returned +5.4% in US dollar terms during the March quarter. The
unmanaged Financial Times/S&P--Actuaries World Equity Index, a
measure of global large cap performance, returned +4.0% during the
March quarter. For the three-month period ended March 31, 1996,
total returns for Merrill Lynch Global SmallCap Fund, Inc.'s Class
A, Class B, Class C and Class D Shares were +9.06%, +8.81%, +8.71%
and +8.97%, respectively. (Results shown do not reflect sales
charges, and would be lower if sales charges were included. Complete
performance information, including average annual total returns, can
be found on pages 3--5 of this report to shareholders.)
<PAGE>
Within the small cap universe, the best-performing small cap markets
in US dollar terms during the first quarter were the Pacific Basin
(excluding Japan), up 12.3%; the United Kingdom, up 7.1%; and
Continental Europe, up 6.7%. The weakest markets during the first
quarter were the United States, up 4.7%, and Japan, up 1.5%. The US
dollar continued its recovery in the first quarter of 1996. While
the US dollar's appreciation compared to the yen helped the Japanese
stock market advance during the March quarter, the weaker yen
depressed the return of Japanese equities expressed in US dollars.
For example, Japanese small caps rose 5.0% in yen terms but just
1.5% in US dollar terms. The outperformance of Merrill Lynch Global
SmallCap Fund, Inc. compared to the SEMI during the March quarter
largely reflected our positions in the Pacific Basin and Continental
Europe, which were overweighted relative to the index. In addition,
the Fund's decision to hedge a substantial amount of its foreign
currency exposure benefited performance.
Portfolio Strategy
The Fund's overall strategy was unchanged during the March quarter.
We maintained a well-diversified portfolio of small cap issues, with
our largest effective overweighted positions, as compared to the
SEMI benchmark, being in Japan (27.7% of net assets), Europe (32.2%)
and the Pacific Basin area, excluding Japan, (12.2%). The Fund's
19.3% exposure to US small caps represented a significant
underweighted position relative to the US component of the SEMI
benchmark.
Economic and Investment Environment
In the developed economies, economic indicators remained mixed.
There were clear signs of economic improvement in the United States
and Japan as the monetary policy easing undertaken by US and
Japanese central banks in the second half of 1995 fed through into
stronger demand in the first two months of 1996. Together with the
improved economic signals in the United States and Japan, interest
rates held steady in both countries during the first quarter. On the
other hand, economic indicators were generally weak in Europe,
particularly in Continental Europe. Rising unemployment, falling
output and diminishing inflationary pressures prompted further cuts
in European interest rates, led by the Bundesbank.
The emerging economies of Asia continued to post strong growth
rates, while recent economic indicators from Mexico and Brazil
pointed to stronger growth in those countries over the course of
1996. We maintain a strategic exposure to emerging market small caps
in recognition of the excellent growth and diversification
opportunities these markets provide.
<PAGE>
We believe that a synchronized pick-up in global economic activity,
led by the United States and Japan and followed by Europe, will be
positive for global small cap stocks. Historically, small cap stocks
have tended to outperform large cap stocks during periods of rising
economic activity. We maintain our view that those economies that
are relatively early in the economic cycle provide a better
financial environment for small caps than do those economies that
are relatively well advanced in the business cycle. This leads us to
favor Japan and Continental Europe over the United States and, to a
lesser extent, the United Kingdom.
In Conclusion
Global small cap issues performed well during the last three months,
but the outlook for the remainder of 1996 is mixed. Rising growth
expectations in the developed economies will probably limit the
scope for further interest rate cuts in coming months, taking away
one of the key supports for equity markets during the last year or
so. On the other hand, stronger economic growth could be relatively
beneficial for small cap stocks relative to larger cap stocks.
Again, we continue to favor Japanese, Continental European and
emerging market small cap issues over US and UK small cap issues. We
also anticipate the possibility of further appreciation of the US
dollar compared to other major currency blocs, and will therefore
continue to hedge a substantial portion of the Fund's foreign
currency exposure back into US dollars.
We appreciate your interest in Merrill Lynch Global SmallCap Fund,
Inc., and we look forward to assisting you with your financial needs
in the months and years ahead.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Andrew Bascand)
Andrew Bascand
Senior Portfolio Manager/Asset Allocator
<PAGE>
(Ken Chiang)
Ken Chiang
Co-Portfolio Manager
Emerging Markets Investments--Asia
(Adrian Holmes)
Adrian Holmes
Co-Portfolio Manager
European Investments
(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
May 1, 1996
<PAGE>
Effective February 29, 1996, Daniel V. Szemis joined Merrill Lynch
Global SmallCap Fund, Inc. as Portfolio Manager. Mr. Szemis is
primarily responsible for the Fund's investments in North America.
Mr. Szemis also joined the Investment Adviser in 1996. Prior
thereto, Mr. Szemis was employed by Prudential Mutual Fund
Investment Management Advisors as Portfolio Manager from 1990 to
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.
* 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 8 years.
* 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).
<PAGE>
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.
PERFORMANCE DATA (concluded)
Average Annual
Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 3/31/96 +18.23% +12.03%
Inception (10/21/94) through 3/31/96 + 3.31 - 0.48
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 3/31/96 +17.10% +13.10%
Inception (8/5/94) through 3/31/96 + 0.74 - 1.07
[FN]
*Maximum contingent deferred sales charge is 4% and is reduced to 0%
after 4 years.
**Assuming payment of applicable contingent deferred sales charge.
% Return % Return
Without CDSC With CDSC**
Class C Shares*
<PAGE>
Year Ended 3/31/96 +16.97% +15.97%
Inception (10/21/94) through 3/31/96 + 2.19 + 2.19
[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 3/31/96 +17.86% +11.67%
Inception (8/5/94) through 3/31/96 + 1.49 - 1.76
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
<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--3/31/96 9.27 10.11 -- -- + 9.06
------ ------
Total $0.058 Total $0.105
Cumulative total return as of 3/31/96: +4.81%**
</TABLE>
<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--3/31/96 9.19 10.00 -- -- + 8.81
------ ------
Total $0.058 Total $0.052
<PAGE>
Cumulative total return as of 3/31/96: +1.23%***
</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--3/31/96 9.19 9.99 -- -- + 8.71
------ ------
Total $0.058 Total $0.052
Cumulative total return as of 3/31/96: +3.18%***
</TABLE>
<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--3/31/96 9.25 10.08 -- -- + 8.97
------ ------
Total $0.058 Total $0.093
Cumulative total return as of 3/31/96: +2.48%**
<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.
***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.
</TABLE>
<TABLE>
Recent
Performance
Results*
<CAPTION>
12 Month 3 Month
3/31/96 12/31/95 3/31/95 % Change % Change
<S> <C> <C> <C> <C> <C>
Class A Shares $10.11 $9.27 $8.70 +16.89%(1) +9.06%
Class B Shares 10.00 9.19 8.64 +16.42(1) +8.81
Class C Shares 9.99 9.19 8.64 +16.31(1) +8.71
Class D Shares 10.08 9.25 8.69 +16.68(1) +8.97
Class A Shares--Total Return +18.23(2) +9.06
Class B Shares--Total Return +17.10(3) +8.81
Class C Shares--Total Return +16.97(3) +8.71
Class D Shares--Total Return +17.86(4) +8.97
<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 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 $0.093 per share ordinary
income dividends and $0.053 per share capital gains distributions.
</TABLE>
<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>
Finland Airlines 94,000 Finnair OY $ 645,907 $ 763,732 0.5%
Holding Company 60,000 America Group Ltd. 1,079,450 959,419 0.7
19,300 Fiskars OY AB 989,408 1,021,760 0.7
------------ ------------ ------
2,068,858 1,981,179 1.4
<PAGE>
Total Investments in Finland 2,714,765 2,744,911 1.9
France Advertising 12,000 Euro RSCG Worldwide, S.A. 1,087,613 1,376,678 1.0
Holding Company 2,978 Societe EuraFrance S.A. 901,134 1,181,845 0.8
Industrials 4,575 Ecco S.A. 884,235 1,056,084 0.7
Insurance 2,390 Cardif S.A. 282,878 389,661 0.3
Leisure Time Equipment 3,439 Zodiac S.A. 467,219 758,980 0.5
Total Investments in France 3,623,079 4,763,248 3.3
Germany Machinery & 39,100 Kloeckner Werke AG 3,734,471 1,444,516 1.0
Engineering
Retail Specialty 27,000 Moebel Walther AG 1,155,318 1,134,761 0.8
Total Investments in Germany 4,889,789 2,579,277 1.8
Greece Building & 7,990 Titan Cement Co. S.A. 302,811 382,959 0.3
Construction
Foods 16,439 Delta Dairy S.A. (Ordinary) 380,614 239,861 0.2
Total Investments in Greece 683,425 622,820 0.5
Ireland Transportation 130,000 Irish Continental Group PLC 1,035,119 1,057,573 0.7
Total Investments in Ireland 1,035,119 1,057,573 0.7
Italy Building & 434,600 Fochi Filippo S.p.A. (Ordinary) 1,346,030 85,977 0.1
Construction
Consumer Goods 205,000 Merloni Elettrodomestici S.p.A 337,062 208,009 0.1
Diversified 1,850,000 Compagnie Industriali Riunite
S.p.A. (CIR) 2,071,370 1,033,025 0.7
Total Investments in Italy 3,754,462 1,327,011 0.9
<PAGE>
Netherlands Capital Goods 24,100 Ahrend Groep NV 497,042 1,027,706 0.7
Electrical Equipment 25,109 Twentsche Kabel Holding NV 988,513 1,108,757 0.8
Electronics 46,200 Otra NV 979,112 993,458 0.7
Holding Company 12,870 Internatio-Muller NV 1,026,843 1,047,749 0.7
Total Investments in the
Netherlands 3,491,510 4,177,670 2.9
Poland Engineering & 131,800 Elektrim Towarzystwo Handlowe S.A. 462,537 780,999 0.5
Construction
Tire & Rubber 30,000 T.C. Debica S.A. 399,679 731,991 0.5
Total Investments in Poland 862,216 1,512,990 1.0
Portugal Retail Sales 12,600 Estabelecimentos Jeronimo
Martins & Filho S.A. 644,835 935,743 0.7
Total Investments in Portugal 644,835 935,743 0.7
Spain Glass 15,835 Cristaleria Espanola S.A. 697,591 1,046,816 0.7
Real Estate 51,746 Vallehermoso S.A. 875,515 930,293 0.7
Steel 7,800 Acerinox S.A. 802,944 880,361 0.6
Textiles 115,000 Algodonera de San Antonio 1,269,666 856,659 0.6
Total Investments in Spain 3,645,716 3,714,129 2.6
Sweden Automotive Parts 76,800 Garphyttan Industrier AB 988,225 1,010,738 0.7
Engineering 60,000 Kalmar Industries AB 1,022,006 1,139,593 0.8
Engineering & 41,500 Svedala Industri AB 1,039,120 1,353,005 0.9
Construction
Forest Products/ 1,153,500 Rottneros Bruks AB Free 1,779,027 1,129,935 0.8
Paper & Packaging
Manufacturing 31,000 Getinge Industrier AB (B Shares) 1,240,704 1,585,559 1.1
Total Investments in Sweden 6,069,082 6,218,830 4.3
<PAGE>
Switzerland Engineering & 400 Daetwyler Holdings AG 679,000 861,445 0.6
Construction
Industrials 9,175 Oerlikon-Buehrle Holdings AG 989,278 972,533 0.7
Photography 3,455 Fotolabo S.A. 1,159,372 1,746,828 1.2
Retailing 1,560 Grands Magasins Jelmoli S.A. 959,600 955,397 0.7
Total Investments in Switzerland 3,787,250 4,536,203 3.2
Turkey Beverages 62,475 Erge Biracilik Ve Malt Sanayii A.S. 24,973 37,917 0.0
Building & 726,882 Alarko Holdings A.S. 280,927 266,746 0.2
Construction
Insurance 596,250 Aksigorta A.S. 119,250 159,898 0.1
Total Investments in Turkey 425,150 464,561 0.3
United Beverages 95,000 Matthew Clark PLC 1,000,663 1,049,789 0.7
Kingdom
Broadcasting 78,000 Flextech PLC 630,757 592,876 0.4
Chemicals 260,000 Inspec Group PLC 1,478,306 1,369,091 1.0
Computer Services 150,000 Misys PLC 1,505,297 1,652,983 1.2
Computers 400,000 Acorn Computer Group PLC 569,441 1,282,092 0.9
Diversified 889,000 Howden Group PLC 1,262,630 990,523 0.7
Food & Beverage 667,000 Hazlewood Foods PLC 1,271,988 1,038,403 0.7
Health/Personal 570,000 London International Group
Care (Ordinary) 910,747 1,078,789 0.8
Manufacturing 120,500 Low & Bonar PLC (Ordinary) 792,075 1,033,626 0.7
Media/Publishing 300,000 International Business Communications
(Ordinary) 1,043,116 1,385,117 1.0
Total Investments in the
United Kingdom 10,465,020 11,473,289 8.1
Total Investments in Europe 46,091,418 46,128,255 32.2
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
LATIN Percent of
AMERICA Industries Shares Held Investments Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
Argentina Retail 24,889 Grimoldi S.A. $ 95,150 $ 99,566 0.1%
Total Investments in Argentina 95,150 99,566 0.1
Brazil Appliances 3,200,000 Brasmotor Group S.A. (Preferred) 641,325 826,245 0.6
363,400,000 Refrigeracao Parana S.A. (Preferred) 734,319 960,383 0.7
------------ ------------ ------
1,375,644 1,786,628 1.3
Telecommunications 4,900,000 Telecomunicacoes de Minas
Gerais S.A.- TELEMIG (Class B)
(Preferred) 332,325 386,949 0.3
Textiles 2,054,000 Companhia de Tecidos Norte de Minas
S.A. (Preferred) 652,560 852,714 0.6
Total Investments in Brazil 2,360,529 3,026,291 2.2
Mexico Building Materials 22,700 Internacional de Ceramica S.A de
C.V. (ADR) (a) 164,751 153,225 0.1
Total Investments in Mexico 164,751 153,225 0.1
Peru Foods 356,300 Compania Industrial Peru Pacifico
S.A. 383,299 486,484 0.3
Total Investments in Peru 383,299 486,484 0.3
Total Investments in Latin America 3,003,729 3,765,566 2.7
MIDDLE EAST/
AFRICA
<PAGE>
Israel Financial Services 60,000 Ampal-American Israel Corp. 418,839 345,000 0.2
Total Investments in Israel 418,839 345,000 0.2
South Entertainment 310,000 Sun International (South Africa) Ltd. 422,716 421,238 0.3
Africa
Mining 76,300 Elandsrand Gold Mining Company Ltd. 456,101 460,795 0.3
38,000 Kinross Mines Ltd. 407,226 458,983 0.3
------------ ------------ ------
863,327 919,778 0.6
Total Investments in South Africa 1,286,043 1,341,016 0.9
Zimbabwe Beverages 249,000 Delta Corporation 396,017 552,477 0.4
Total Investments in Zimbabwe 396,017 552,477 0.4
Total Investments in the
Middle East/Africa 2,100,899 2,238,493 1.5
NORTH
AMERICA
Canada Leisure 42,384 Four Seasons Hotels Ltd. 495,789 653,258 0.5
Mining 32,925 Cambior Inc. 457,703 444,488 0.3
Total Investments in Canada 953,492 1,097,746 0.8
United Aerospace 110,000 UNC, Inc. 637,625 825,000 0.6
States
Apparel 115,000 Farah, Inc. 1,148,408 632,500 0.4
15,000 Marisa Christina, Inc. 168,950 294,375 0.2
70,100 Norton McNaughton, Inc. 850,711 753,575 0.5
2,168,069 1,680,450 1.1
Banking & 17,000 Charter One Financial, Inc. 327,995 573,750 0.4
Finance 15,000 Roosevelt Financial Group, Inc. 242,463 277,500 0.2
9,200 Walden Bancorp Inc. (c) 132,250 177,100 0.1
------------ ------------ ------
702,708 1,028,350 0.7
Biotechnology 15,000 COR Therapeutics, Inc. 168,375 170,625 0.1
7,500 Ostex International Inc. 105,100 118,125 0.1
6,700 Pharmacopeia, Inc. 107,200 163,313 0.1
15,000 Scios, Inc. (d) 74,025 66,563 0.1
------------ ------------ ------
454,700 518,626 0.4
<PAGE>
Building & 18,000 Oakwood Homes Corporation 475,817 893,250 0.6
Building 67,200 Redman Industries, Inc. 602,850 1,360,800 1.0
Materials 15,300 Ryland Group, Inc. 206,581 246,713 0.2
39,800 Washington Homes, Inc. 199,396 194,025 0.1
------------ ------------ ------
1,484,644 2,694,788 1.9
Business 110,000 Applied Bioscience International,
Services Inc. 634,001 976,250 0.7
Commercial 1,300 Duff & Phelps Credit Rating Company 20,444 20,800 0.0
Services
Computer 21,000 Information Resources, Inc. 296,625 299,250 0.2
Software 16,000 Progress Software Corporation 469,730 238,000 0.2
10,300 Software Spectrum Inc. 214,205 208,575 0.1
2,000 Sterling Commerce, Inc. 48,000 61,500 0.0
28,000 VMARK Software, Inc. 439,368 196,000 0.1
------------ ------------ ------
1,467,928 1,003,325 0.6
Computers 20,000 Storage Technology Corporation 473,697 522,500 0.4
25,000 Stratus Computer, Inc. 787,870 693,750 0.5
------------ ------------ ------
1,261,567 1,216,250 0.9
Consumer--Goods 50,000 Charming Shoppes, Inc. 128,125 256,250 0.2
Data Processing 10,000 Cognos, Inc. 121,250 562,500 0.4
40,000 Landmark Graphics Corp. 838,665 655,000 0.5
5,000 Sterling Software, Inc. 177,175 352,500 0.3
------------ ------------ ------
1,137,090 1,570,000 1.2
Electrical 20,000 Comptek Research, Inc. 238,700 102,500 0.1
Equipment
Electronics 10,000 Analogic Corporation 171,250 187,500 0.1
3,900 BI, Inc. 32,039 32,663 0.0
------------ ------------ ------
203,289 220,163 0.1
Electronics/ 6,800 Alpha Industries, Inc. 53,356 59,075 0.0
Semiconductors
Environmental 9,000 BHA Group Inc. (Class A) 116,766 114,750 0.1
Control 31,000 Envirosource Inc. 126,357 120,125 0.1
21,000 Newpark Resources, Inc. 342,500 624,750 0.4
------------ ------------ ------
585,623 859,625 0.6
</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 Healthcare-- 60,000 Beverly Enterprises, Inc. $ 810,553 $ 660,000 0.5%
States Products/Services 53,800 Ramsay Health Care, Inc. 330,777 168,125 0.1
(concluded) 14,038 Ramsay Managed Care, Inc. 31,586 34,218 0.0
------------ ------------ ------
1,172,916 862,343 0.6
Home Furnishing 20,400 Crown Crafts, Inc. 303,212 193,800 0.1
Hospital Management 50,000 Magellan Health Services, Inc. 874,658 1,125,000 0.8
Insurance 25,000 Ace, Ltd. 553,100 1,115,625 0.8
40,000 First Colony Corp. 841,338 955,000 0.7
3,900 Harleysville Group, Inc. 79,463 104,325 0.1
60,000 PXRE Corp. 1,375,075 1,500,000 1.1
22,200 Security-Connecticut Corp. 493,582 579,975 0.4
------------ ------------ ------
3,342,558 4,254,925 3.1
Machinery 12,000 AGCO Corp. 266,610 289,500 0.2
Manufacturing 8,500 Smith (A.O.) Corporation 175,823 200,812 0.1
Medical Equipment 20,000 Medex, Inc. 214,677 232,500 0.2
Metal Fabricating 10,000 Quanex Corp. 200,566 218,750 0.2
Natural Resources 42,300 Brown (Tom), Inc. 500,076 586,912 0.4
35,000 Plains Resources, Inc. 218,750 317,187 0.2
75,000 Total Petroleum of North America 848,625 731,250 0.5
55,000 TransTexas Gas Corp. 605,000 550,000 0.4
------------ ------------ ------
2,172,451 2,185,349 1.5
Pharmaceuticals 48,000 NeoRx Corp. 323,331 384,000 0.3
<PAGE>
Restaurants 67,500 TPI Enterprises, Inc. 377,458 181,406 0.1
Retailing 60,300 Baker (J.), Inc. 1,006,850 452,250 0.3
27,300 CML Group, Inc. 83,265 85,312 0.1
70,000 Catherines Stores Corp. 596,740 682,500 0.5
12,000 Department 56, Inc. 266,760 262,500 0.2
40,000 Hancock Fabrics, Inc. 371,281 395,000 0.3
4,500 Movie Gallery, Inc. 114,251 113,625 0.1
13,300 Pier 1 Imports, Inc. 105,133 167,912 0.1
15,000 Rex Stores Corp. 195,900 208,125 0.1
80,000 Service Merchandise Co., Inc. 437,638 420,000 0.3
------------ ------------ ------
3,177,818 2,787,224 2.0
Steel 6,400 Olympic Steel, Inc. 65,262 65,600 0.1
Textiles 75,000 Burlington Industries, Inc. 873,330 946,875 0.7
Transportation 10,000 Kirby Corp. 154,306 171,250 0.1
Utilities--Water 3,500 American Water Works Company, Inc. 96,897 134,750 0.1
Total Investments in the
United States 24,969,742 27,265,536 19.3
Total Investments in North America 25,923,234 28,363,282 20.1
PACIFIC
BASIN
Australia Insurance 152,054 QBE Insurance Group 587,506 759,714 0.5
Mining 559,351 QCT Resources Ltd. 650,305 730,385 0.5
Publishing 158,000 West Australian Newspaper
Holdings Ltd. 557,621 544,812 0.4
Total Investments in Australia 1,795,432 2,034,911 1.4
Hong Kong Banking 1,432,333 JCG Holdings, Ltd. 1,085,879 1,305,657 0.9
Financial US$ 420,000 Goldlion Capital Corp., 4.875%
Services due 2/01/1999 318,914 526,050 0.4
652,000 Manhattan Card Co. Ltd. 320,924 345,643 0.2
------------ ------------ ------
639,838 871,693 0.6
<PAGE>
Food Chain 1,136,000 Cafe de Coral Holdings Ltd. 289,104 341,505 0.2
Packaging 3,772,600 Sinocan Holdings Ltd. 1,254,878 1,426,798 1.0
Retail 1,666,000 Wo Kee Hong Holdings Ltd. 325,441 297,269 0.2
Transportation 450,000 Orient Overseas International Ltd. 315,503 354,926 0.3
Total Investments in Hong Kong 3,910,643 4,597,848 3.2
Indonesia Banking-- 163,000 PT Bank Bali (Foreign) 337,016 348,738 0.2
International
Consumer--Goods 130,000 PT Wicaksana Overseas International 336,176 378,263 0.3
Mining 10,400 PT Tambang Timah (GDR) (b) 132,392 175,760 0.1
Telecommunications 204,000 PT Kabelmetal Indonesia 287,351 161,489 0.1
& Equipment
Textiles 1,212,000 PT Great River Industries 622,307 739,024 0.5
Total Investments in Indonesia 1,715,242 1,803,274 1.2
Japan Apparel 100,000 Goldwin Inc. 1,289,360 749,344 0.5
Automotive Parts 58,000 Murakami Corp. 1,148,025 760,584 0.5
61,000 Sanoh Industrial 824,290 471,956 0.3
110,000 Showa Corp. 1,098,685 937,617 0.7
89,000 Yamakawa Industrial Co. 1,085,484 858,655 0.6
------------ ------------ ------
4,156,484 3,028,812 2.1
Banks 17,000 Bank of the Ryukyus, Ltd. 988,951 571,656 0.4
Beverages 79,000 Hokkaido Coca-Cola Bottling
Co., Ltd. 1,298,058 1,013,769 0.7
74,000 Sanyo Coca-Cola Bottling Co., Ltd 1,118,168 1,060,510 0.7
------------ ------------ ------
2,416,226 2,074,279 1.4
Chemicals 70,000 Katakura Chikkarin Co., Ltd. 830,212 617,647 0.4
Computer Services 47,000 TKC Corp. 1,374,367 1,311,915 0.9
Construction 89,650 Japan Foundation Engineering 1,736,044 1,645,879 1.2
80,000 Tsuchiya Home Co. 1,737,127 1,461,221 1.0
20,000 USK Corp. 337,371 303,484 0.2
157,000 Yondenko Corp. 1,518,456 1,345,588 0.9
------------ ------------ ------
5,328,998 4,756,172 3.3
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
PACIFIC BASIN Shares Held/ Percent of
(concluded) Industries Face Amount Investments Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
Japan Consumer 59,000 Roland Corp. $ 1,429,975 $ 939,490 0.7%
(concluded) Electricals
Electrical 24,000 Energy Support Corp. 182,225 305,732 0.2
Equipment 30,000 Maspro Denkoh Corp. 832,812 539,528 0.4
26,000 Shinmei Electric Co. 1,340,491 482,203 0.3
52,000 Sukegawa Electric Co. 682,343 448,108 0.3
------------ ------------ ------
3,037,871 1,775,571 1.2
Foods/Food 43,200 Ariake Japan Co., Ltd. 1,533,040 1,391,982 1.0
Processing
Health Services 40,000 Kanto Biomedical Laboratory 845,365 610,716 0.4
26,000 SRL Inc. 557,018 423,754 0.3
------------ ------------ ------
1,402,383 1,034,470 0.7
Industrials 13,200 Nitto Kohki Company Limited 489,424 476,021 0.3
31,050 Roki Techno Co., Ltd. 870,024 741,640 0.5
------------ ------------ ------
1,359,448 1,217,661 0.8
Iron & Steel 218,000 Nippon Chutesukan 1,367,147 1,153,709 0.8
Leasing 28,000 Marufuji Sheet Piling Co., Ltd. 301,153 177,033 0.1
51,000 Nissho Iwai Steel Leasing Co. 615,912 272,293 0.2
------------ ------------ ------
917,065 449,326 0.3
Machinery 54,000 Giken Seisakusho Co. Inc. 1,451,378 1,041,963 0.7
27,000 Miura Co., Ltd. 449,645 477,988 0.3
------------ ------------ ------
1,901,023 1,519,951 1.0
Metal Fabrication 124,000 Toyo Kohan Co., Ltd 1,057,406 907,119 0.6
<PAGE>
Packaging 45,000 Chuo Kagaku Co. Ltd. 1,894,958 1,011,615 0.7
Paper 79,000 Tomoku Co., Ltd. 623,965 462,486 0.3
Pharmaceuticals 12,100 Towa Pharmaceutical Co. 716,527 323,014 0.2
Pollution Control 168,000 Organo Corp. 1,844,463 1,762,458 1.2
Real Estate 53,000 Keihanshin Real Estate Co. Ltd. 525,507 440,343 0.3
56,000 TOC Corp. 596,958 613,713 0.4
------------ ------------ ------
1,122,465 1,054,056 0.7
Restaurants 47,000 Aim Services Co., Ltd. 1,405,610 840,858 0.6
45,100 Mos Food Services, Inc. 1,450,252 1,001,190 0.7
83,000 Ohsho Food Service Corp. 2,244,318 1,477,145 1.0
------------ ------------ ------
5,100,180 3,319,193 2.3
Retail Specialty 60,000 ADO Electric Industrial Co., Ltd. 1,956,905 1,376,920 1.0
60,000 Arcland Sakamoto 964,197 736,231 0.5
91,000 Daika Corporation 1,444,684 697,246 0.5
53,000 Home Wide Corp. 1,058,507 605,658 0.4
40,800 Nitori Co. 1,229,269 997,452 0.7
------------ ------------ ------
6,653,562 4,413,507 3.1
Retail Stores 119,000 Sotetsu Rosen Co., Ltd. 1,112,252 958,599 0.7
Services 63,000 Ichinen Co., Ltd. 1,667,714 1,115,305 0.8
Trading 31,000 Japan CBM Corp. 1,200,936 824,653 0.6
Trucking 108,000 Nippon Konpo Unyu Soko 1,045,185 919,558 0.6
95,000 Tonami Transportation Co., Ltd. 743,587 609,545 0.4
------------ ------------ ------
1,788,772 1,529,103 1.0
Total Investments in Japan 54,115,750 40,273,093 27.7
Malaysia Advertising 122,000 Seni Jaya Corporation BHD 328,696 417,362 0.3
Broadcasting 158,000 Sistem Televisyen Malaysia BHD 477,231 637,374 0.4
Engineering & 130,000 Asas Dunia BHD 401,214 480,720 0.3
Construction
Newspaper/ 132,000 New Straits Times Press BHD 541,189 678,663 0.5
Publishing
Total Investments in Malaysia 1,748,330 2,214,119 1.5
<PAGE>
New Agriculture 296,500 Wrightson Ltd. 232,533 218,134 0.2
Zealand
Banking 224,000 Trust Bank New Zealand Ltd. 302,301 376,894 0.3
Broadcasting 229,000 Independent News Ltd. 711,948 845,492 0.6
& Publishing
Chemicals 146,000 Fernz Corporation Limited 439,021 462,467 0.3
Electronics 12,650 PDL Industries Ltd. 62,145 68,937 0.1
Food 1,170,000 Affco Holdings Limited 474,738 541,963 0.4
Merchandising
Foreign NZ$ 2,000,000 New Zealand Government Bonds, 8%
Government due 7/15/1998 1,327,537 1,351,038 0.9
Bonds
Investment Company 23,900 Hellaby Holdings Ltd. 22,974 30,445 0.0
Real Estate 135,000 Kiwi Income Property Trust 94,514 105,756 0.1
Textiles 31,000 Lane Walker Rudkin Industries, Ltd. 37,482 38,644 0.0
Transportation 102,933 Ports of Auckland Ltd. 236,826 347,084 0.2
--Marine
Total Investments in New Zealand 3,942,019 4,386,854 3.1
Philippines Banking 327,000 Security Bank Corporation 706,166 650,746 0.5
Total Investments in the Philippines 706,166 650,746 0.5
South Korea Electronics 133 Samsung Electronics Co. (GDR) (b) 12,624 7,880 0.0
40 Samsung Electronics Co. (New
Shares) (GDR) (b) 0 2,100 0.0
------------ ------------ ------
12,624 9,980 0.0
Telecommunications 29,000 Korea Mobile Telecommunications
Corp. (GDR) (b) 1,004,125 1,341,250 0.9
<PAGE>
Utilities--Electric 22,700 Korea Electric Power Corp. (ADR) (a) 500,762 522,100 0.4
Total Investments in South Korea 1,517,511 1,873,330 1.3
Total Investments in the
Pacific Basin 69,451,093 57,834,175 39.9
SOUTHEAST ASIA
India Hotels 49,000 East India Hotels Ltd. 713,000 1,102,500 0.8
Recreation & 250,000 Su-Raj Diamonds Ltd. 346,583 412,371 0.3
Consumer Goods
Total Investments in India 1,059,583 1,514,871 1.1
Total Investments in Southeast Asia 1,059,583 1,514,871 1.1
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<CAPTION>
SHORT-TERM Percent of
SECURITIES Face Amount Issue Cost Value Net Assets
<S> <S> <S> <C> <S> <C> <C> <C>
Commercial US$ 732,000 Ford Motor Credit Co., 5.45% due
Paper* 4/01/1996 $ 731,778 $ 731,778 0.5%
Total Investments in Commercial
Paper 731,778 731,778 0.5
US Government 420,000 United States Treasury Bills,
Obligations* 4.65% due 4/25/1996 418,590 418,566 0.3
Total Investments in US Government
Obligations 418,590 418,566 0.3
Total Investments in Short-Term
Securities 1,150,368 1,150,344 0.8
OPTIONS Premiums
PURCHASED Paid
<PAGE>
Currency Put Frf 1,500,000 French Franc, expiring April 1996
Options at Frf 5.02 18,225 14,400 0.0
Purchased YEN 7,000,000 Japanese Yen, expiring June 1996
at YEN 108 61,950 87,500 0.1
YEN 5,000,000 Japanese Yen, expiring September
1996 at YEN 105 117,500 140,000 0.1
Total Investments in Currency
Put Options Purchased 197,675 241,900 0.2
Put Options US$ 10,000 S&P 500 Index Option, expiring
Purchased June 1996 at US$650.50 188,645 192,000 0.1
Total Investments in Put Options
Purchased 188,645 192,000 0.1
Total Investments in Options
Purchased 386,320 433,900 0.3
Total Investments $149,166,644 141,428,886 98.6
============
Unrealized Appreciation on Forward Foreign Exchange Contracts** 2,524,763 1.7
Liabilities in Excess of Other Assets (473,025) (0.3)
------------ ------
Net Assets $143,480,624 100.0%
============ ======
Net Asset Value: Class A--Based on net assets of $2,306,711 and
228,164 shares outstanding $ 10.11
============
Class B--Based on net assets of $116,168,420 and
11,622,653 shares outstanding $ 10.00
============
Class C--Based on net assets of $4,499,364 and 450,251
shares outstanding $ 9.99
============
Class D--Based on net assets of $20,506,129 and
2,033,661 shares outstanding $ 10.08
============
<PAGE>
<FN>
(a)American Depositary Receipts (ADR).
(b)Global Depositary Receipts (GDR).
(c)Formerly The Co-Operative Bank of Concord.
(d)Formerly Scios Nova, Inc.
*Commercial Paper and certain US Government 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 March 31, 1996 were as
follows:
Unrealized
Foreign Currency Expiration Appreciation
Purchased Date (Depreciation)
Fmk 4,623,300 April 1996 $ 9
Frf 9,482,055 April 1996 (5,423)
YEN 1,462,189,530 April 1996 (297,244)
Total (US$ Commitment--$16,930,426) $ (302,658)
----------
Foreign Currency Sold
Chf 3,972,042 April 1996 $ 177,174
DM 2,439,415 April 1996 105,601
Fmk 16,044,000 April 1996 313,683
Frf 15,414,738 April 1996 80,411
Nlg 1,650,180 April 1996 (982)
NZ$ 4,586,056 April 1996 (96,598)
YEN 3,469,143,090 April 1996 2,248,132
Total (US$ Commitment--$51,089,526) $2,827,421
----------
Total Unrealized Appreciation--Net on
Forward Foreign Exchange Contracts $2,524,763
==========
</TABLE>
EQUITY PORTFOLIO CHANGES
For the Quarter Ended March 31, 1996
<PAGE>
Additions
Acerinox S.A.
Affco Holdings Limited
Alpha Industries, Inc.
BHA Group Inc. (Class A)
BI, Inc.
CML Group, Inc.
Cardif S.A.
*Cytyc Corp.
*Data Processing Resource
Corp.
Department 56, Inc.
*Documentum Inc.
*Driefontein Consolidated Ltd.
Duff & Phelps Credit Rating Company
*ESC Medical Systems Ltd.
Ecco S.A.
Elandsrand Gold Mining
Company Ltd.
Envirosource Inc.
*Expro International Group PLC
Flextech PLC
Garphyttan Industrier AB
Grands Magasins Jelmoli S.A.
Grimoldi S.A.
Internatio-Muller NV
International de Ceramica S.A. de C.V. (ADR)
Irish Continental Group PLC
Kalmar Industries AB
Manhattan Card Co. Ltd.
Miura Co., Ltd.
*NABI Inc.
Nitto Kohki Company Limited
Oerlikon-Buehrle Holdings AG
Olympic Steel, Inc.
*Open Text Corp.
Orient Overseas International Ltd.
Ostex International Inc.
Otra NV
PT Great River Industries
*Party City Corp.
*Prism Solutions, Inc.
*Raptor Systems Inc.
*Red Brick Systems Inc.
Samsung Electronics Co. (New Shares) (GDR)
Security Bank Corporation
Seni Jaya Corporation BHD
Software Spectrum Inc.
Sterling Commerce, Inc.
Sun International (South Africa) Ltd.
Telecommuincacoes de
Minas Gerais S.A.-TELEMIG (Class B) (Preferred)
Total Petroleum of North
America
Trust Bank New Zealand Ltd.
Twentsche Kabel Holding NV
West Australian Newspaper Holdings Ltd.
*Western Area Gold Mining
Co., Ltd.
Wo Kee Hong Holdings Ltd.
*Workgroup Technology Corp.
*Xylan Corp.
<PAGE>
Deletions
Amway Asia Pacific Ltd.
Coho Resources, Inc.
Core Laboratories N.V.
Corimon C.A. S.A.C.A. (ADR)
Corporacion Geo, S.A. de C.V. 'B' (ADR)
Crown American Realty Trust
Cytel Corp.
*Cytyc Corp.
*Data Processing Resource Corp.
Deboer Winkelbedrijven
*Documentum Inc.
*Driefontein Consolidated Ltd.
*ESC Medical Systems Ltd.
Efacec Fabril de Maquinas
Electricas S.A.
Ergo Bank S.A. (Registered)
*Expro International Group PLC
Gran Cadena de Almacenes Colombianos S.A.
(CADENALCO) (ADR)
Kemira OY
Lundbergforetagen AB
(B Shares)
Morgan Stanley Africa
Investment Fund
*NABI Inc.
New South Africa Fund, Inc.
North American Biologicals Inc.
*Open Text Corp.
*Party City Corp.
*Prism Solutions, Inc.
*Raptor Systems Inc.
*Red Brick Systems Inc.
Sears Roebuck de Mexico, S.A. de C.V. 'B' (ADR)
Sequus Pharmaceuticals, Inc.
Skellerup Group Ltd.
Southern Africa Fund, Inc.
Swheizerische Industrie-Gasellschaft Holdings AG (SIG)
Terca Brick Industries
Total Petroleum of North
America
Vical, Inc.
*Western Area Gold Mining
Co., Ltd.
*Workgroup Technology Corp.
*Xylan Corp.
<PAGE>
[FN]
*Added and deleted in the same quarter.
