MERRILL LYNCH
GLOBAL SMALLCAP
FUND, INC.
FUND LOGO
Semi-Annual Report
December 31, 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 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
Printed on post-consumer recycled paper
MERRILL LYNCH GLOBAL SMALLCAP FUND, INC.
Merrill Lynch
Global SmallCap
Fund, Inc.
Management Team
<PAGE>
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 12/31/96
Country of Percent of
Ten Largest Equity Holdings Origin Net Assets
PT Great River Industries Indonesia 1.5%
Sinocan Holdings Ltd. Hong Kong 1.3
Kloeckner Werke AG Germany 1.2
Tingyi (Cayman Islands)
Holdings, Co. Hong Kong 1.2
Burswood Property Trust Australia 1.1
PXRE Corp. United States 1.0
Rottneros Bruks AB Free Sweden 1.0
ADO Electric Industrial Co., Ltd. Japan 1.0
Inspec Group PLC United Kingdom 1.0
JCG Holdings, Ltd. Hong Kong 1.0
Percent of
Ten Largest Industries Net Assets
<PAGE>
Retail Specialty 3.1%
Engineering & Construction 3.0
Computer Software 2.8
Beverages 2.7
Holding Company 2.7
Construction 2.5
Restaurants 2.3
Manufacturing 2.2
Iron & Steel 2.2
Banking 2.1
DEAR SHAREHOLDER
The second half of 1996 was characterized by a significant rally in
large cap equities in both Europe and the Americas, while equities
in many Pacific Basin markets underperformed. Large cap equities
sharply outperformed small cap equities in most markets. The
unmanaged Salomon Brothers Extended Market Index (SEMI) posted a
small gain for the six-month period ended December 31, 1996 rising
by 2.53%, in US dollar terms, while the unmanaged predominantly
large cap Financial Times/S&P--Actuaries World Index rose by 5.82%.
The US dollar continued to appreciate over the three-month period
ended December 31, 1996, rising to 115.90 against the yen from
109.65 six months earlier. Against the Deutschemark, the US dollar
appreciation was less marked, firming to 1.510 at the end of
December, up from 1.5230 at June 30, 1996.
In US dollar terms, the best-performing small cap market during the
past six months was New Zealand (up by 28%), closely followed by
Finland, Spain and Hong Kong. Among the major markets, the
performance ranking was: the United Kingdom (up 14.5%); the United
States (up 8.3%); Germany (up 2.0%); France (up 3.0%); and Japan
(down 25.0%).
Emerging markets issues underperformed developed issues, although
performance in Latin America was generally strong led by Brazil (up
8.5%, according to the IFC Investibles Index) during the six-month
period.
For the six-month period ended December 31, 1996, total returns for
Merrill Lynch Global SmallCap Fund, Inc.'s Class A, Class B, Class C
and Class D Shares were -1.32%, -1.81%, -1.81% and -1.48%,
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 4--6 of this report to shareholders.) Key factors contributing
to the Fund's under-performance included our strategic overweighting
of emerging markets issues and the underweighting of US issues in
favor of Europe.
<PAGE>
Portfolio Matters
The Fund's main regional investment weightings largely remained
unaltered. During the quarter ended December 31, 1996, the
diversified spread of assets included 21% in the United States, 32%
in Europe, 21% in Japan, 12% in developed Pacific Basin markets
(excluding Japan), 2% in Canada and South Africa, and 3% in emerging
markets. Effective cash positions accounted for 9% of the Fund's net
assets at 1996 year-end.
Economic and Investment
Environment
Global economic activity remained relatively robust. The
Organization for Economic Cooperation and Development (OECD) leading
indicator of production continued to rise, and monetary policies
generally remained supportive of improving economic growth.
Specifically, in Germany, gross domestic product growth picked up,
supported by a significant easing in the Deutschemark and the impact
of lower German interest rates. However, European indicators
remained mixed. Consumer spending is weak, reflecting in part a
continued rise in unemployment. Throughout continental Europe,
unemployment trends remained a significant impediment to an
improvement in demand conditions.
In contrast, economic activity data and business and consumer
confidence reports in the United Kingdom continued to strengthen,
and now suggest the strong likelihood of above-trend growth being
sustained well into 1997. In response to the further strengthening
and early signs of wage and price inflation, the UK Chancellor of
the Exchequer increased interest rates during the December period by
0.25% to 6.00%. The rise in interest rates was associated with a
sharp appreciation of the British pound against both the US dollar
and the Deutschemark.
In the United States and Japan, economic growth appeared firm.
Leading business confidence surveys, such as the monthly National
Association of Purchasing Managers reports for the United States and
the quarterly Bank of Japan Tankan report, show improving activity
levels. The outlook for Japanese economic growth remained
encouraging. Industrial production data now show a 4% gain year-on-
year, and low inventory levels. Private capital expenditures appear
to have recovered, while export orders and output continue to rise,
especially in the auto sector.
In non-Japan Asia, eight of the ten major countries in the region
experienced further export growth in the December quarter and, with
inventory reduction nearing an end, a turning point in Asian
industrial production seems likely. Equity markets in Asia have
already begun to respond positively to this development.
<PAGE>
Against this improving cyclical demand backdrop, global interest
rates and bond yields declined further. Much of the impetus for
lower interest rates came from three sources. First, the December
period was marked by a surge in investor confidence regarding the
prospects for a successful introduction of a common currency in
Europe by 1999. This resulted in interest rate and bond yield
spreads in peripheral countries such as Spain, Italy and Sweden
declining sharply against Germany. Second, German interest rates
declined as investors expect the Bundesbank to maintain a looser
monetary policy in the face of continued high unemployment and the
prospect of a significant further tightening in fiscal policies
across Europe. Third, although Japanese economic growth is
improving, the Japanese financial system remains weak, and Japanese
interest rates are likely to remain lower for longer than investors
previously anticipated. As a result, Japanese institutions continue
to diversify their bond holdings by purchasing higher-yielding
foreign securities, and foreigners continue to borrow in yen to fund
long-term positions in other currencies.
At some stage, the combined effect of these factors on global bond
markets will end. We believe that evidence of stronger economic
activity, such as the overall improvement in the OECD leading
indicators, shortly will encourage investors to become more cautious
as real global bond yields could approach 3%, in our opinion.
Overall, however, we remain cautious on many major markets. We
believe smaller-capitalization stocks are likely to begin a period
of outperformance versus large cap companies.
In Conclusion
The outlook for international equity markets may be constrained near
term by downgrades to profits expectations and the potential for a
rise in bond yields. Our near-term strategy remains defensive,
although small cap stocks could outperform, in our opinion. We
expect to invest the Fund's cash reserves in equities should a
correction occur. Looking ahead, we believe that the Fund is well-
positioned with a focus on emerging markets and Pacific Basin
markets, combined with smaller companies in Europe.
We thank you for your continued interest in Merrill Lynch Global
SmallCap Fund, and we look forward to reviewing our outlook and
strategy with you again in our next report to shareholders.
Sincerely,
<PAGE>
(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
(Grace Pineda)
Grace Pineda
Co-Portfolio Manager
Emerging Markets Investments--
Europe and Latin America
<PAGE>
(James Russell)
James Russell
Co-Portfolio Manager
Japanese Investments
(Daniel V. Szemis)
Daniel V. Szemis
Co-Portfolio Manager
US Investments
January 30, 1997
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
1996 9.27 9.81 0.185 0.710 +15.61
------ ------
Total $0.243 Total $0.815
Cumulative total return as of 12/31/96: +11.10%**
<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>
<PAGE>
<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
1996 9.19 9.72 0.185 0.601 +14.43
------ ------
Total $0.243 Total $0.653
Cumulative total return as of 12/31/96: +6.45%**
<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
reflect deduction of any sales charge; results would be lower if
sales charge was deducted.
</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
1996 9.19 9.71 0.185 0.611 +14.43
------ ------
Total $0.243 Total $0.663
Cumulative total return as of 12/31/96: +8.62%**
<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
reflect deduction of any sales charge; results would be lower if
sales charge was deducted.
</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
1996 9.25 9.79 0.185 0.683 +15.34
------ ------
Total $0.243 Total $0.776
Cumulative total return as of 12/31/96: +8.47%**
<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>
Recent
Performance
Results*
<CAPTION>
12 Month 3 Month
12/31/96 9/30/96 12/31/95 % Change % Change
<S> <C> <C> <C> <C> <C>
Class A Shares $9.81 $10.66 $9.27 + 7.85% (1) -6.21% (1)
Class B Shares 9.72 10.48 9.19 + 7.81(1) -5.46 (1)
Class C Shares 9.71 10.48 9.19 + 7.70(1) -5.56 (1)
Class D Shares 9.79 10.61 9.25 + 7.87(1) -5.96 (1)
Class A Shares--Total Return +15.61(2) +0.53(2)
Class B Shares--Total Return +14.43(3) +0.34(3)
Class C Shares--Total Return +14.43(4) +0.34(4)
Class D Shares--Total Return +15.34(5) +0.56(5)
<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 $0.185 per share capital
gains distributions.
(2)Percent change includes reinvestment of $0.710 per share ordinary
income dividends and $0.185 per share capital gains distributions.
(3)Percent change includes reinvestment of $0.601 per share ordinary
income dividends and $0.185 per share capital gains distributions.
(4)Percent change includes reinvestment of $0.611 per share ordinary
income dividends and $0.185 per share capital gains distributions.
(5)Percent change includes reinvestment of $0.683 per share ordinary
income dividends and $0.185 per share capital gains distributions.
</TABLE>
Average Annual
Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 12/31/96 +15.61% +9.54%
Inception (10/21/94) through 12/31/96 + 4.91 +2.37
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 12/31/96 +14.43% +10.43%
Inception (8/5/94) through
12/31/96 + 2.63 + 1.85
[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 12/31/96 +14.43% +13.43%
Inception (10/21/94) through 12/31/96 + 3.84 + 3.84
[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 12/31/96 +15.34% +9.29%
Inception (8/5/94) through
12/31/96 + 3.44 +1.14
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
<TABLE>
SCHEDULE OF INVESTMENTS (in US dollars)
<CAPTION>
Value Percent of
EUROPE Industries Shares Held Investments Cost (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C>
Czech Broadcasting 7,500 ++Central European Media Enterprises
Republic Ltd. (Class A ) $ 206,250 $ 234,375 0.2%
Total Investments in the Czech
Republic 206,250 234,375 0.2
Denmark Security Services 3,600 Falck A/S 904,370 1,075,996 0.7
Textiles 13,718 ++Carli Grey International A/S 402,266 656,954 0.5
Total Investments in Denmark 1,306,636 1,732,950 1.2
<PAGE>
Finland Computer Software 4,560 TT Tieto OY 298,105 377,515 0.3
Holding Company 38,000 America Group Ltd. 683,652 784,425 0.5
11,416 Fiskars OY AB 590,868 855,809 0.6
------------ ------------ ------
1,274,520 1,640,234 1.1
Total Investments in Finland 1,572,625 2,017,749 1.4
France Advertising 5,452 Havas Advertising S.A. 494,139 604,260 0.4
Automobile Parts 2,800 Sylea 304,415 307,093 0.2
Computer Software 2,157 Altran Technologies S.A. 561,773 693,084 0.5
Holding Company 2,978 Societe EuraFrance S.A. 901,134 1,286,946 0.9
Insurance 2,868 Cardif S.A. 282,878 395,262 0.3
Manufacturing 21,500 Sommer Allibert S.A. 639,257 642,348 0.4
Total Investments in France 3,183,596 3,928,993 2.7
Germany Machine Tools & 1,200 GEA AG (Preferred) 419,044 377,901 0.3
Machinery 3,850 ++Walter AG 977,454 1,061,033 0.7
------------ ------------ ------
1,396,498 1,438,934 1.0
Machinery & 39,100 ++Kloeckner Werke AG 3,734,471 1,817,127 1.2
Engineering
Manufacturing 3,200 KSB AG (Preferred) 407,615 495,028 0.3
Retail Specialty 18,000 Moebel Walther AG 770,212 971,076 0.7
Total Investments in Germany 6,308,796 4,722,165 3.2
Greece Building & 7,990 Titan Cement Co. S.A. 302,811 434,902 0.3
Construction
Total Investments in Greece 302,811 434,902 0.3
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
EUROPE Shares Held/ Value Percent of
(concluded) Industries Face Amount Investments Cost (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C>
Ireland Hotels 188,000 Jurys Hotel Group PLC $ 830,317 $ 868,402 0.6%
Transportation 79,000 Irish Continental Group PLC 629,034 587,916 0.4
Total Investments in Ireland 1,459,351 1,456,318 1.0
Italy Diversified 1,850,000 ++Compagnie Industriali Riunite
S.p.A. (CIR) 2,071,370 1,139,305 0.8
Total Investments in Italy 2,071,370 1,139,305 0.8
Netherlands Electrical 19,022 Twentsche Kabel Holding NV 748,829 991,877 0.7
Equipment
Electronics 8,800 ++ASM Lithography Holding NV 350,595 440,000 0.3
Engineering & 20,806 Kondor Wessels Groep NV 780,063 842,607 0.6
Construction
Holding Company 38,855 Internatio-Muller NV 775,019 977,003 0.7
Instruments/Photo 10,000 ++Elsag Bailey Process
--Optical Automation NV 160,600 187,500 0.1
Total Investments in the
Netherlands 2,815,106 3,438,987 2.4
Poland Engineering & 131,800 Elektrim Towarzystwo Handlowe
Construction S.A. 462,537 1,195,840 0.8
Tire & Rubber 30,000 T.C. Debica S.A. 399,679 670,017 0.5
Total Investments in Poland 862,216 1,865,857 1.3
Portugal Retail Sales 12,600 Establecimentos Jeronimo Martins
& Filho S.A. 336,824 650,079 0.4
US$17,220,000 Establecimentos Jeronimo Martins &
Filho S.A., 5.03125% due 9/15/2003 109,647 111,097 0.1
12,600 Establecimentos Jeronimo Martins &
Filho S.A. (New) 361,798 561,797 0.4
Total Investments in Portugal 808,269 1,322,973 0.9
<PAGE>
Spain Manufacturing 8,802 Azkoyen S.A. 631,484 1,083,052 0.7
Paper & Pulp 20,000 ++Miquel y Costas & Miquel, S.A. 543,369 659,121 0.5
Total Investments in Spain 1,174,853 1,742,173 1.2
Sweden Automobile Parts 16,252 Garphyttan Industrier AB 209,123 212,242 0.1
Engineering 55,000 Kalmar Industries AB 898,761 915,994 0.6
Engineering & 38,878 Svedala Industri AB 510,552 658,901 0.5
Construction
Forest Products/ 1,153,500 Rottneros Bruks AB Free 1,779,027 1,464,090 1.0
Paper &
Packaging
Investment 73,822 Bure Investment AB 628,825 877,415 0.6
Management
Manufacturing 23,351 Getinge Industrier AB (B Shares) 311,523 460,852 0.3
Total Investments in Sweden 4,337,811 4,589,494 3.1
Switzerland Distribution 4,000 TEGE S.A. 330,008 313,714 0.2
Industrials 9,175 Oerlikon-Buehrle Holdings AG 989,278 904,616 0.6
Machinery 1,701 ++Saurer AG (Registered) 745,372 736,914 0.5
Medical Supplies 297 ++Disetronic Holdings AG 552,200 656,648 0.4
Paper & Forest 24,800 Mercer International, Inc. 422,910 248,000 0.2
Products
Photography 2,694 Fotolabo S.A. 904,008 1,046,370 0.7
Retailing 1,860 ++Grands Magasins Jelmoli S.A. 1,102,969 1,028,085 0.7
Total Investments in Switzerland 5,046,745 4,934,347 3.3
Turkey Beverages 3,485,900 Erciyas Biracilik Ve Malt Sanayii 566,377 378,202 0.3
Metal 5,100,000 Eregli Demir Ve Celik Fabrikalari
Fabricating T.A.S. 570,786 612,188 0.4
Total Investments in Turkey 1,137,163 990,390 0.7
<PAGE>
United Beverages 131,500 Matthew Clark PLC 1,188,993 584,923 0.4
Kingdom
Broadcasting 78,000 ++Flextech PLC 630,757 907,408 0.6
Chemicals 390,000 Inspec Group PLC 1,844,704 1,414,489 1.0
Commercial Services 40,000 Serco Group PLC (Ordinary) 417,691 460,547 0.3
Computer Services 70,770 Misys PLC 705,945 1,345,125 0.9
Computers 318,600 Acorn Computer Group PLC 456,176 1,062,869 0.7
Diversified 889,000 Howden Group PLC 1,262,630 1,171,094 0.8
Employee Services 200,000 Corporate Services Group PLC 594,020 590,226 0.4
Home Furnishings 220,000 ++Limelight Group PLC 654,727 685,004 0.5
Manufacturing 96,100 Low & Bonar PLC (Ordinary) 634,340 669,140 0.5
Media/Publishing 180,000 International Business
Communications PLC (Ordinary) 648,181 917,673 0.6
Pharmaceuticals 55,300 ++Celltech Group PLC 549,111 458,845 0.3
144,300 Oxford Molecular Group PLC 756,094 881,320 0.6
------------ ------------ ------
1,305,205 1,340,165 0.9
Textiles 215,220 Dewhirst Group PLC 601,484 666,439 0.5
Total Investments in the United
Kingdom 10,944,853 11,815,102 8.1
Total Investments in Europe 43,538,451 46,366,080 31.8
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
LATIN Value Percent of
AMERICA Industries Shares Held Investments Cost (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C>
Argentina Iron & Steel 36,000 Siderar S.A. (ADR) (a)++++ $ 612,000 $ 828,000 0.6%
Retailing 24,889 ++Grimoldi S.A. 95,150 124,470 0.1
Total Investments in Argentina 707,150 952,470 0.7
<PAGE>
Brazil Textiles 2,054,000 Companhia de Tecidos Norte de
Minas S.A. (Preferred) 652,560 655,623 0.4
Utilities-- 879,478 Centrais Eletricas da Santa
Electric Catarina S.A. (CELESC) 'B'
(Preferred) 780,981 821,151 0.6
Total Investments in Brazil 1,433,541 1,476,774 1.0
Colombia Banking 41,300 Banco Ganadero S.A. (Class A)
(ADR) (a) 811,698 887,950 0.6
Total Investments in Colombia 811,698 887,950 0.6
Mexico Banking 350,850 Grupo Financiero Banorte S.A.
de C.V. 387,614 347,685 0.2
Building Materials 47,890 ++Internacional de Ceramica S.A de
C.V. (ADR) (a) 355,919 257,409 0.2
Engineering & 59,200 Grupo Profesional Planeacion y
Construction Proyectos, S.A. de C.V. (Class B) 263,989 255,724 0.2
Total Investments in Mexico 1,007,522 860,818 0.6
Peru Foods 250,947 Consorcio Alimentos Fabril
Pacifico S.A. 268,537 347,198 0.2
Total Investments in Peru 268,537 347,198 0.2
Total Investments in Latin America 4,228,448 4,525,210 3.1
MIDDLE EAST/
AFRICA
South Entertainment 434,400 Sun International (South Africa)
Africa Ltd. 554,192 348,375 0.2
Mining 77,100 Elandsrand Gold Mining Company
Ltd. 459,981 379,234 0.3
Total Investments in South Africa 1,014,173 727,609 0.5
<PAGE>
Zimbabwe Beverages 253,512 Delta Corporation Ltd. 407,960 891,574 0.6
Total Investments in Zimbabwe 407,960 891,574 0.6
Total Investments in the Middle
East/Africa 1,422,133 1,619,183 1.1
NORTH
AMERICA
Canada Leisure 42,384 Four Seasons Hotels Ltd. 495,789 858,508 0.6
Mining 32,925 Cambior Inc. 457,703 481,528 0.3
Natural Resources 20,000 Total Petroleum of North America
Ltd. 188,500 207,500 0.1
Total Investments in Canada 1,141,992 1,547,536 1.0
United Aerospace 110,000 ++UNC, Inc. 637,625 1,320,000 0.9
States
Apparel 92,800 ++Farah, Inc. 863,458 719,200 0.5
70,100 ++Norton McNaughton, Inc. 850,711 578,325 0.4
------------ ------------ ------
1,714,169 1,297,525 0.9
Automobile Parts 8,200 Walbro Corp. 158,986 149,650 0.1
Automotive 2,900 Smith (A.O.) Corp. 59,987 86,638 0.1
Banking & Finance 6,750 Charter One Financial, Inc. 117,321 283,500 0.2
Biotechnology 24,000 ++COR Therapeutics Inc. 257,250 237,000 0.2
12,400 ++Ostex International Inc. 133,600 68,200 0.0
13,900 Scios, Inc. 68,663 85,138 0.1
------------ ------------ ------
459,513 390,338 0.3
Building & 22,000 ++Giant Cement Holding, Inc. 293,938 346,500 0.2
Building 668,400 ++Grossman's Inc. 1,190,621 522,188 0.4
Materials 15,300 Ryland Group, Inc. 206,581 210,375 0.1
------------ ------------ ------
1,691,140 1,079,063 0.7
Communications 17,500 ++TALX Corp. 147,402 137,813 0.1
<PAGE>
Computer Software 15,000 ++Hyperion Software Corp. 174,991 316,875 0.2
43,500 ++Metromail Corporation 810,071 793,875 0.5
17,900 ++Software Spectrum Inc. 372,300 514,625 0.4
7,963 ++Sterling Commerce, Inc. 112,808 280,696 0.2
30,800 ++Structural Dynamics Research
Corp. 616,343 604,450 0.4
56,300 ++VMARK Software, Inc. 681,664 415,213 0.3
------------ ------------ ------
2,768,177 2,925,734 2.0
Computer Technology 2,700 ++Voice Control Systems, Inc. 14,175 21,263 0.0
Computers 13,700 ++Storage Technology Corporation 415,322 652,463 0.4
13,800 ++Stratus Computer, Inc. 388,732 376,050 0.3
32,700 ++Sybase, Inc. 613,965 543,638 0.4
------------ ------------ ------
1,418,019 1,572,151 1.1
Data Processing 6,200 ++Compuware Corp. 212,841 310,000 0.2
42,100 ++Platinum Technology Inc. 592,189 568,350 0.4
7,000 Sterling Software, Inc. 124,987 221,375 0.2
34,400 ++Symantec Corp. 403,103 498,800 0.3
------------ ------------ ------
1,333,120 1,598,525 1.1
Distribution 13,100 ++The Peak Technologies Group Inc. 160,955 150,650 0.1
Electronic 25,000 ++C.P. Clare Corp. 213,369 243,750 0.2
Components 6,900 ++Triumph Group, Inc. 149,340 164,738 0.1
------------ ------------ ------
362,709 408,488 0.3
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
NORTH AMERICA Value Percent of
(concluded) Industries Shares Held Investments Cost (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C>
United Electronics 14,500 ++Allen Group, Inc. $ 248,627 $ 322,625 0.2%
States 20,100 ++Alpha Industries, Inc. 164,676 158,288 0.1
(concluded) 20,800 ++BI, Inc. 216,454 145,600 0.1
33,300 ++CHS Electronics Inc. 453,068 566,100 0.4
8,000 ++DII Group, Inc. 158,975 181,000 0.1
4,600 ++Marshall Industries 132,410 140,875 0.1
2,500 Wyle Electronics 78,925 98,750 0.1
------------ ------------ ------
1,453,135 1,613,238 1.1
Electronics 22,100 ++Nu Horizons Electronics Corp. 202,757 174,038 0.1
Distribution
<PAGE>
Environmental 37,740 BHA Group Inc. (Class A) 532,342 603,840 0.4
Control 79,200 ++Envirosource Inc. 307,178 202,950 0.1
------------ ------------ ------
839,520 806,790 0.5
Healthcare-- 49,000 Magellan Health Services, Inc. 884,348 1,096,375 0.8
Products/Services 53,800 ++Ramsay Health Care, Inc. 330,777 134,500 0.1
------------ ------------ ------
1,215,125 1,230,875 0.9
Insurance 2,500 Greater New York Savings Bank 31,950 33,438 0.0
25,000 ++Gryphon Holdings, Inc. 346,789 346,875 0.2
3,800 Midland Financial Group, Inc. 30,163 31,825 0.0
60,000 PXRE Corp. 1,375,075 1,485,000 1.0
17,700 Security-Connecticut Corp. 400,500 621,713 0.4
------------ ------------ ------
2,184,477 2,518,851 1.6
Iron & Steel 10,900 ++Gibraltar Steel Corp. 196,200 280,675 0.2
9,600 ++Olympic Steel, Inc. 213,985 241,200 0.2
34,800 Quanex Corp. 751,867 952,650 0.7
------------ ------------ ------
1,162,052 1,474,525 1.1
Machinery 12,000 AGCO Corp. 266,610 343,500 0.2
9,500 Bearings, Inc. 273,132 264,813 0.2
20,800 Cincinnati Milacron, Inc. 502,497 455,000 0.3
9,000 Stewart & Stevenson Services, Inc. 235,488 261,000 0.2
------------ ------------ ------
1,277,727 1,324,313 0.9
Medical 10,000 Analogic Corporation 171,250 327,500 0.2
17,600 ++Biomatrix, Inc. 263,971 277,200 0.2
11,100 ++Healthdyne Technologies, Inc. 115,200 98,513 0.1
9,000 ++Sierra Health Services Inc. 294,063 221,625 0.2
12,900 ++Sofamor Danek Group, Inc. 331,703 393,450 0.3
------------ ------------ ------
1,176,187 1,318,288 1.0
Medical Services 5,391 ++Pharmaceutical Product
Development, Inc. 83,339 134,775 0.1
Metals 13,700 Castle (A.M.) & Company 230,160 263,725 0.2
11,800 Commonwealth Aluminum Corp. 199,910 181,425 0.1
25,700 ++Shiloh Industries, Inc. 344,419 404,775 0.3
------------ ------------ ------
774,489 849,925 0.6
<PAGE>
Natural Resources 20,300 ++Brown (Tom), Inc. 236,050 418,687 0.3
18,000 ++Newpark Resources Inc. 478,979 670,500 0.5
35,000 ++Plains Resources, Inc. 218,750 546,875 0.4
55,000 ++TransTexas Gas Corp. 605,000 770,000 0.5
39,474 Zemex Corporation 344,674 276,318 0.2
------------ ------------ ------
1,883,453 2,682,380 1.9
Office--Related 21,000 ++Wang Laboratories, Inc. 460,637 425,250 0.3
Oil--Domestic 13,100 ++Titan Exploration, Inc. 144,100 157,200 0.1
Pharmaceuticals 48,300 ++NeoRx Corp. 324,962 196,219 0.1
Restaurants 26,500 ++Au Bon Pain Company, Inc.
(Class A) 172,691 165,625 0.1
22,160 ++Shoney's, Inc. 369,642 155,120 0.1
67,500 TPI Enterprises, Inc. 7,815 6,328 0.0
------------ ------------ ------
550,148 327,073 0.2
Retailing 85,000 Baker (J.), Inc. 1,231,429 446,250 0.3
27,300 CML Group, Inc. 83,265 92,137 0.1
25,000 ++Catherines Stores Corp. 202,020 131,250 0.1
34,500 ++Chico's Fashions Inc. 248,069 142,312 0.1
20,300 ++Department 56, Inc. 460,150 502,425 0.3
37,100 ++Levitz Furniture Inc. 184,730 115,937 0.1
------------ ------------ ------
2,409,663 1,430,311 1.0
Savings & Loan 5,500 Haven Bancorp Inc. 156,063 157,437 0.1
Associations
Technology 18,100 ++Rofin-Sinar Technologies, Inc. 171,950 208,150 0.1
22,100 ++VISX, Inc. 562,135 488,962 0.3
------------ ------------ ------
734,085 697,112 0.4
Telecommunication 43,600 ++Comdial Corp. 268,400 267,050 0.2
Equipment 53,400 ++Network Equipment Technologies,
Inc. 946,158 881,100 0.6
------------ ------------ ------
1,214,558 1,148,150 0.8
Telecommunications 10,600 ++Brite Voice Systems, Inc. 134,891 156,350 0.1
Transportation 10,300 Air Express International Corp. 278,291 329,600 0.2
400 ++Landair Services, Inc. 3,853 4,000 0.0
------------ ------------ ------
282,144 333,600 0.2
Total Investments in the
United States 29,706,810 30,578,038 21.0
<PAGE>
Total Investments in North
America 30,848,802 32,125,574 22.0
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
PACIFIC Shares Held/ Value Percent of
BASIN Industries Face Amount Investments Cost (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C>
Australia Entertainment 1,188,000 Burswood Property Trust $ 1,567,077 $ 1,519,050 1.1%
Publishing 283,000 West Australian Newspaper
Holdings Ltd. 1,034,360 1,213,696 0.8
Total Investments in Australia 2,601,437 2,732,746 1.9
Hong Kong Banking 1,432,333 JCG Holdings, Ltd. 1,085,879 1,398,256 0.9
Financial US$ 420,000 Goldlion Capital Corp., 4.875%
Services due 2/01/1999 318,914 543,900 0.4
Foods/Food 6,892,000 Tingyi (Cayman Islands)
Processing Holdings, Co. 1,575,707 1,804,538 1.2
Packaging 3,772,600 Sinocan Holdings Ltd. 1,254,878 1,853,618 1.3
Total Investments in Hong Kong 4,235,378 5,600,312 3.8
Indonesia Banking-- 303,000 PT Bank Bali (Foreign) 634,023 757,179 0.5
International
Consumer--Goods 260,000 PT Wicaksana Overseas
International 336,176 297,332 0.2
Textiles & 3,142,000 ++PT Great River Industries 1,013,657 2,129,267 1.5
Apparel
Total Investments in Indonesia 1,983,856 3,183,778 2.2
Japan Automobile Parts 30,000 Exedy Corporation 511,228 373,057 0.3
58,000 Murakami Corp. 1,148,025 686,183 0.5
50,000 Showa Corp. 502,169 428,756 0.3
85,000 Yamakawa Industrial Co. 1,040,181 440,415 0.3
------------ ------------ ------
3,201,603 1,928,411 1.4
<PAGE>
Banking 17,000 Bank of the Ryukyus, Ltd. 988,951 572,539 0.4
Beverages 79,000 Hokkaido Coca-Cola Bottling
Co., Ltd. 1,298,058 975,561 0.7
74,000 Sanyo Coca-Cola Bottling Co.,
Ltd 1,118,168 990,501 0.7
------------ ------------ ------
2,416,226 1,966,062 1.4
Chemicals 50,400 Canon Chemicals, Inc. 941,249 848,705 0.6
Computer Services 51,700 TKC Corp. 1,374,367 1,227,763 0.8
Construction 89,600 Japan Foundation Engineering
Co., Ltd. 1,735,016 1,168,359 0.8
88,000 Tsuchiya Home Co. 1,737,127 1,238,687 0.8
157,000 Yondenko Corp. 1,518,456 1,336,805 0.9
------------ ------------ ------
4,990,599 3,743,851 2.5
Consumer 59,000 Roland Corp. 1,429,975 1,003,713 0.7
Electricals
Electrical 26,000 Shinmei Electric Co. 1,340,491 406,390 0.3
Equipment 48,000 Sukegawa Electric Co. 630,495 269,430 0.2
------------ ------------ ------
1,970,986 675,820 0.5
Electronic 35,000 Chiyoda Integre Co., Ltd. 220,393 181,649 0.1
Components
Foods/Food 43,000 Ariake Japan Co., Ltd. 1,525,975 1,381,347 0.9
Processing
Health Services 25,000 Kanto Biomedical Laboratory Co. 528,125 367,012 0.3
26,000 SRL Inc. 557,018 395,164 0.3
------------ ------------ ------
1,085,143 762,176 0.6
Industrials 13,200 Nitto Kohki Company Ltd. 489,424 473,057 0.3
31,000 Roki Techno Co., Ltd. 868,533 562,176 0.4
------------ ------------ ------
1,357,957 1,035,233 0.7
Iron & Steel 218,000 Nippon Chutesukan K.K. 1,367,147 785,026 0.5
<PAGE>
Machinery 28,000 Giken Seisakusho Co. Inc. 683,834 377,202 0.3
27,000 Miura Co., Ltd. 449,645 342,746 0.2
------------ ------------ ------
1,133,479 719,948 0.5
Metal Fabrication 124,000 Toyo Kohan Co., Ltd. 1,057,406 963,731 0.7
Packaging 30,000 Chuo Kagaku Co. Ltd. 1,206,134 525,907 0.4
Pollution Control 168,000 Organo Corp. 1,844,463 1,233,161 0.8
Real Estate 53,000 Keihanshin Real Estate Co. Ltd. 525,507 313,515 0.2
56,000 TOC Corp. 596,958 498,100 0.3
------------ ------------ ------
1,122,465 811,615 0.5
Restaurants 47,000 Aim Services Co., Ltd. 1,405,610 896,978 0.6
45,000 Mos Food Services, Inc. 1,446,914 893,782 0.6
83,000 Ohsho Food Service Corp. 2,244,318 1,383,333 0.9
------------ ------------ ------
5,096,842 3,174,093 2.1
Retail Specialty 60,000 ADO Electric Industrial Co., Ltd. 1,956,905 1,435,233 1.0
60,000 Arcland Sakamoto Co., Ltd. 964,197 777,202 0.5
51,000 Daika Corporation 767,191 295,518 0.2
48,000 Home Wide Corp. 847,706 431,088 0.3
30,000 Nitori Co. 906,611 520,725 0.4
------------ ------------ ------
5,442,610 3,459,766 2.4
Retail Stores 64,000 Sotetsu Rosen Co., Ltd. 601,871 447,668 0.3
Services 66,000 Ichinen Co., Ltd. 1,663,714 923,316 0.6
Trading 31,000 Japan CBM Corp. 1,200,936 950,345 0.6
Trucking 108,000 Nippon Konpo Unyu Soko Co. 1,045,185 680,829 0.5
70,000 Tonami Transportation Co., Ltd. 548,070 380,829 0.3
------------ ------------ ------
1,593,255 1,061,658 0.8
Total Investments in Japan 44,833,746 30,383,503 20.8
Malaysia Advertising 221,000 Seni Jaya Corporation BHD 708,918 818,356 0.6
Broadcasting 103,000 Sistem Televisyen Malaysia BHD
(Class A) (New) 153,652 190,907 0.1
Chemicals 109,000 Chemical Company of Malaysia BHD 340,194 315,129 0.2
<PAGE>
Consumer Products 24,000 ++Amway (Malaysia) Holdings BHD 145,366 135,921 0.1
& Services
Engineering & 378,000 Asas Dunia BHD 1,355,969 1,354,812 0.9
Construction
Newspaper/ 143,000 New Straits Times Press BHD 602,724 826,851 0.6
Publishing
Total Investments in Malaysia 3,306,823 3,641,976 2.5
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<CAPTION>
PACIFIC BASIN Value Percent of
(concluded) Industries Shares Held Investments Cost (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C>
New Zealand Agriculture 1,090,500 Wrightson Ltd. $ 808,404 $ 949,114 0.7%
Chemicals 146,000 Fernz Corporation Ltd. 439,021 501,052 0.3
Real Estate 135,000 ++Kiwi Income Property Trust 94,514 104,123 0.1
27,000 ++Kiwi Income Property Trust 'B' 11,421 14,711 0.0
------------ ------------ ------
105,935 118,834 0.1
Textiles 106,650 Lane Walker Rudkin Industries,
Ltd. 121,891 128,291 0.1
Total Investments in New Zealand 1,475,251 1,697,291 1.2
Philippines Banking 26,160 Security Bank Corporation 24,933 45,327 0.0
Financial Services 38,440 Far East Bank & Trust Company 83,473 153,701 0.1
Total Investments in the
Philippines 108,406 199,028 0.1
Thailand Transportation 62,000 Thoresen Thai Agency PLC 'Express'
(Warrants) (d) 0 63 0.0
322,800 Thoresen Thai Agency PLC 'Foreign' 783,253 160,475 0.1
Total Investments in Thailand 783,253 160,538 0.1
Total Investments in the
Pacific Basin 59,328,150 47,599,172 32.6
<PAGE>
SOUTHEAST
ASIA
India Hotels 39,600 EIH Limited (GDR) (b)++++ 576,350 930,600 0.6
Recreation & 250,000 Su-Raj Diamonds Ltd. 346,583 169,580 0.1
Consumer Goods
Total Investments in India 922,933 1,100,180 0.7
Total Investments in Southeast
Asia 922,933 1,100,180 0.7
<CAPTION>
SHORT-TERM Face
SECURITIES Amount Issue
Commercial US$ 3,947,000 CSW Credit, Inc., 5.35% due
Paper* 1/17/1997 3,937,615 3,937,615 2.7
2,525,000 General Motors Acceptance Corp.,
7.50% due 1/02/1997 2,524,474 2,524,474 1.7
3,000,000 International Securitization
Corporation, 5.37% due 1/21/1997 2,991,050 2,991,050 2.0
Total Investments in Commercial
Paper 9,453,139 9,453,139 6.4
US Government 3,000,000 Federal Home Loan Mortgage Corp.,
& Agency 5.38% due 1/17/1997 2,992,827 2,992,827 2.1
Obligations* United States Treasury Bills (c):
40,000 4.94% due 1/30/1997 39,841 39,849 0.0
170,000 4.98% due 1/30/1997 169,318 169,359 0.1
20,000 4.99% due 1/30/1997 19,920 19,925 0.0
100,000 4.81% due 2/27/1997 99,238 99,228 0.1
Total Investments in US Government
& Agency Obligations 3,321,144 3,321,188 2.3
Total Investments in Short-Term
Securities 12,774,283 12,774,327 8.7
OPTIONS Nominal Value Covered by Premiums
PURCHASED Options Purchased Paid
Currency Put 780,000 Japanese Yen, expiring February
Options Purchased 1997 at YEN 115 4,407 11,211 0.0
Total Investments in Options
Purchased 4,407 11,211 0.0
<PAGE>
Total Investments $153,067,607 146,120,937 100.0
============
Variation Margin on Stock Index Futures Contracts** 83,184 0.0
Unrealized Appreciation on Forward Foreign Exchange Contracts*** 430,994 0.3
Liabilities in Excess of Other Assets (436,180) (0.3)
------------ ------
Net Assets $146,198,935 100.0%
============ ======
<FN>
(a)American Depositary Receipts (ADR).
(b)Global Depositary Receipts (GDR).
(c)Security held as collateral in connection with open futures
contracts.
(d)Warrants entitle the Fund to purchase a predetermined number of
shares of stock/face amount of bonds at a predetermined price
until the expiration date.
++Non-income producing security.
++++Restricted security as to resale. The value of the Fund's
investments in restricted securities was approximately $1,759,000,
representing 1.2% of net assets.
Acquisition Value
Issue Date(s) Cost (Note 1a)
EIH Limited (GDR) 3/13/1995-
3/17/1995 $ 576,350 $ 930,600
Siderar S.A. (ADR) 4/30/1996 612,000 828,000
Total $1,188,350 $1,758,600
========== ==========
*Commercial Paper and certain 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.
**Stock index futures contracts sold as of December 31, 1996 were as
follows:
Number of Expiration Value
Contracts Issue Exchange Date (Notes 1a & 1c)
12 S&P Index CME March 1997 $ 4,467,000
2 Dax Index DTB March 1997 377,576
15 Nikkei 225 SMX March 1997 1,252,915
<PAGE>
Total Stock Index Futures Contracts Sold
(Total Contract Price--$6,279,891) $ 6,097,491
===========
***Forward foreign exchange contracts as of December 31, 1996 were
as follows:
Unrealized
Foreign Currency Expiration Appreciation
Sold Date (Notes 1a & 1c)
NLG 1,650,180 February 1997 $ 28,715
NZ$ 1,554,000 February 1997 3,209
YEN 1,305,317,260 January 1997 399,070
Total Unrealized Appreciation--Net on
Forward Foreign Exchange Contracts
(US$ Commitment--$11,448,502) $ 430,994
==========
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENT OF ASSETS AND LIABILITIES
<CAPTION>
As of December 31, 1996
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$153,063,200) (Note 1a) $146,109,726
Unrealized appreciation on forward foreign exchange contracts
(Note 1c) 430,994
Options purchased, at value (premiums paid--$4,407)
(Notes 1a & 1c) 11,211
Foreign cash (Note 1d) 256,248
Cash 18,757
Receivables:
Securities sold $ 467,074
Capital shares sold 205,729
Dividends 181,078
Variation margin on stock index futures contracts
(Notes 1a & 1c) 83,184
Options written 13,143
Interest 8,513
Forward foreign exchange contracts (Note 1c) 6,981 965,702
------------
Deferred organization expenses (Note 1g) 113,039
Prepaid registration fees and other assets (Note 1g) 48,310
------------
Total assets 147,953,987
============
<PAGE>
Liabilities: Payables:
Securities purchased 656,810
Capital shares redeemed 595,732
Distributor (Note 2) 113,017
Investment adviser (Note 2) 109,837 1,475,396
------------
Accrued expenses and other liabilities 279,656
------------
Total liabilities 1,755,052
============
Net Assets: Net assets $146,198,935
============
Net Assets Class A Common Stock, $0.10 par value, 100,000,000
Consist of: shares authorized $ 31,610
Class B Common Stock, $0.10 par value, 100,000,000
shares authorized 1,206,398
Class C Common Stock, $0.10 par value, 100,000,000
shares authorized 58,292
Class D Common Stock, $0.10 par value, 100,000,000
shares authorized 205,928
Paid-in capital in excess of par 151,561,044
Accumulated investment loss on investments--net (1,663,438)
Undistributed realized capital gains on investments and
foreign currency transactions--net 1,134,854
Unrealized depreciation on investments and foreign currency
transactions--net (6,335,753)
------------
Net assets $146,198,935
============
Net Asset Class A--Based on net assets of $3,102,228 and 316,100 shares
Value: outstanding $ 9.81
============
Class B--Based on net assets of $117,271,630 and 12,063,979
shares outstanding $ 9.72
============
Class C--Based on net assets of $5,658,348 and 582,919 shares
outstanding $ 9.71
============
Class D--Based on net assets of $20,166,729 and 2,059,281
shares outstanding $ 9.79
============
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF OPERATIONS
<CAPTION>
For the Six Months Ended December 31, 1996
<S> <S> <C> <C>
Investment Dividends (net of $96,598 foreign withholding tax) $ 816,169
Income Interest and discount earned 356,545
(Notes 1e & 1f): ------------
Total income 1,172,714
------------
Expenses: Investment advisory fees (Note 2) $ 670,045
Account maintenance and distribution fees--Class B (Note 2) 634,184
Transfer agent fees--Class B (Note 2) 148,749
Custodian fees 88,797
Printing and shareholder reports 87,830
Accounting services (Note 2) 67,286
Registration fees (Note 1g) 49,618
Professional fees 39,353
Account maintenance and distribution fees--Class C (Note 2) 28,982
Account maintenance fees--Class D (Note 2) 27,152
Transfer agent fees--Class D (Note 2) 21,410
Directors' fees and expenses 18,785
Amortization of organization expenses (Note 1g) 18,192
Transfer agent fees--Class C (Note 2) 7,290
Pricing fees 6,041
Transfer agent fees--Class A (Note 2) 3,262
Other 5,617
------------
Total expenses 1,922,593
------------
Investment loss--net (749,879)
------------
Realized & Realized gain from:
Unrealized Gain Investments--net 2,378,527
(Loss) on Foreign currency transactions--net 926,331 3,304,858
Investments & -------------
Foreign Currency Change in unrealized appreciation/depreciation on:
Transactions--Net Investments--net (5,530,467)
(Notes 1c, 1d, Foreign currency transactions--net (61,775) (5,592,242)
1f & 3): ------------- ------------
Net realized and unrealized loss on investments and
foreign currency transactions (2,287,384)
------------
Net Decrease in Net Assets Resulting from Operations $ (3,037,263)
============
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
For the
For the Six Year Ended
Months Ended June 30,
Increase (Decrease) in Net Assets: Dec. 31, 1996 1996
<S> <S> <C> <C>
Operations: Investment loss--net $ (749,879) $ (795,024)
Realized gain on investments and foreign currency
transactions --net 3,304,858 16,571,278
Change in unrealized appreciation/depreciation on investments
and foreign currency transactions--net (5,592,242) 15,421,162
------------ ------------
Net increase (decrease) in net assets resulting from operations (3,037,263) 31,197,416
------------ ------------
Dividends & Investment income--net:
Distributions to Class A (94,638) (19,859)
Shareholders Class B (2,323,171) (619,675)
(Note 1h): Class C (116,361) (22,117)
Class D (559,124) (214,561)
Realized gain on investments--net:
Class A (179,170) (10,675)
Class B (6,808,450) (682,938)
Class C (324,706) (24,845)
Class D (1,160,558) (131,445)
------------ ------------
Net decrease in net assets resulting from dividends and
distributions to shareholders (11,566,178) (1,726,115)
------------ ------------
Capital Share Net decrease in net assets derived from capital share
Transactions transactions (2,282,701) (33,525,896)
(Note 4): ------------ ------------
Net Assets: Total decrease in net assets (16,886,142) (4,054,595)
Beginning of period 163,085,077 167,139,672
------------ ------------
End of period* $146,198,935 $163,085,077
============ ============
<FN>
*Undistributed (accumulated) investment income (loss)--net $ (1,663,438) $ 2,179,735
============ ============
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
<CAPTION>
Class A Class B
The following per share data and For the For the For the For the
ratios have been derived from Six For the Period Six For the Period
information provided in the financial Months Year Oct. 21, Months Year Aug. 5,
statements. Ended Ended 1994++ to Ended Ended 1994++ to
Dec. 31, June 30, June 30, Dec. 31, June 30, June 30,
Increase (Decrease) in Net Asset Value: 1996++++ 1996 1995 1996++++ 1996 1995
<S> <S> <C> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of
Operating period $ 10.86 $ 8.92 $ 9.82 $ 10.71 $ 8.84 $ 10.00
Performance: -------- -------- -------- -------- -------- --------
Investment income (loss)--net --++++++ .13 .04 (.06) (.06) .01
Realized and unrealized gain
(loss) on investments and foreign
currency transactions--net (.15) 1.97 (.93) (.14) 2.04 (1.16)
-------- -------- -------- -------- -------- --------
Total from investment operations (.15) 2.10 (.89) (.20) 1.98 (1.15)
-------- -------- -------- -------- -------- --------
Less dividends and distributions:
Investment income--net (.31) (.10) -- (.20) (.05) --
Realized gain on investments--net (.59) (.06) -- (.59) (.06) --
In excess of realized gain on
investments--net -- -- (.01) -- -- (.01)
-------- -------- -------- -------- -------- --------
Total dividends and distributions (.90) (.16) (.01) (.79) (.11) (.01)
-------- -------- -------- -------- -------- --------
Net asset value, end of period $ 9.81 $ 10.86 $ 8.92 $ 9.72 $ 10.71 $ 8.84
======== ======== ======== ======== ======== ========
Total Investment Based on net asset value per share (1.32%)+++ 23.87% (9.11%)+++ (1.81%)+++ 22.57% (11.55%)+++
Return:** ======== ======== ======== ======== ======== ========
Ratios to Average Expenses 1.53%* 1.55% 1.62%* 2.57%* 2.61% .83%*
Net Assets: ======== ======== ======== ======== ======== ========
Investment income (loss)--net (.05%)* .46% 1.06%* (1.08%)* (.66%) .10%*
======== ======== ======== ======== ======== ========
Supplemental Net assets, end of period
Data: (in thousands) $ 3,102 $ 3,084 $ 5,992 $117,272 $131,656 $132,296
======== ======== ======== ======== ======== ========
Portfolio turnover 24.78% 60.33% 47.96% 24.78% 60.33% 47.96%
======== ======== ======== ======== ======== ========
Average commission rate paid+++++ $ .0089 $ .0011 -- $ .0089 $ .0011 --
======== ======== ======== ======== ======== ========
<PAGE>
<FN>
*Annualized.
**Total investment returns exclude the effects of sales
loads.
+++Aggregate total investment return.
+++++For fiscal years beginning on or after September 1, 1995,
the Fund is required to disclose its average commission
rate per share for purchases and sales of equity securities.
The "Average Commission Rate Paid" includes commissions
paid in foreign currencies, which have been converted into
US dollars using the prevailing exchange rate on the date
of the transaction. Such conversions may significantly
affect the rate shown.
++Commencement of Operations.
++++Based on average shares outstanding during the period.
++++++Amount is less than $.01 per share.
See Notes to Financial Statements.
</TABLE>
<TABLE>
FINANCIAL HIGHLIGHTS (concluded)
<CAPTION>
Class C Class D
The following per share data and For the For the For the For the
ratios have been derived from Six For the Period Six For the Period
information provided in the financial Months Year Oct. 21, Months Year Aug. 5,
statements. Ended Ended 1994++ to Ended Ended 1994++ to
Dec. 31, June 30, June 30, Dec. 31, June 30, June 30,
Increase (Decrease) in Net Asset Value: 1996++++ 1996 1995 1996++++ 1996 1995
<S> <S> <C> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of
Operating period $ 10.71 $ 8.84 $ 9.80 $ 10.83 $ 8.91 $ 10.00
Performance: -------- -------- -------- -------- -------- --------
Investment income (loss)--net (.06) (.05) .01 (02) .02 .08
Realized and unrealized gain
(loss) on investments and foreign
currency transactions--net (.14) 2.03 (.96) (.15) 2.05 (1.16)
-------- -------- -------- -------- -------- --------
Total from investment operations (.20) 1.98 (.95) (.17) 2.07 (1.08)
-------- -------- -------- -------- -------- --------
Less dividends and distributions:
Investment income--net (.21) (.05) -- (.28) (.09) --
Realized gain on investments--net (.59) (.06) -- (.59) (.06) --
In excess of realized gain on
investments--net -- -- (.01) -- -- (.01)
-------- -------- -------- -------- -------- --------
Total dividends and distributions (.80) (.11) (.01) (.87) (.15) (.01)
-------- -------- -------- -------- -------- --------
Net asset value, end of period $ 9.71 $ 10.71 $ 8.84 $ 9.79 $ 10.83 $ 8.91
======== ======== ======== ======== ======== ========
<PAGE>
Total Investment Based on net asset value per share (1.81%)+++ 22.56% (9.75%)+++ (1.48%)+++ 23.50% (10.85%)+++
Return:** ======== ======== ======== ======== ======== ========
Ratios to Average Expenses 2.59%* 2.63% 2.66%* 1.78%* 1.83% 1.77%*
Net Assets: ======== ======== ======== ======== ======== ========
Investment income (loss)--net (1.10%)* (.64%) .20%* (.29%)* .10% .90%*
======== ======== ======== ======== ======== ========
Supplemental Net assets, end of period
Data: (in thousands) $ 5,658 $ 5,753 $ 4,924 $ 20,167 $ 22,593 $ 23,928
======== ======== ======== ======== ======== ========
Portfolio turnover 24.78% 60.33% 47.96% 24.78% 60.33% 47.96%
======== ======== ======== ======== ======== ========
Average commission rate paid+++++ $ .0089 $ .0011 -- $ .0089 $ .0011 --
======== ======== ======== ======== ======== ========
<FN>
*Annualized.
**Total investment returns exclude the effects of sales
loads.
+++Aggregate total investment return.
+++++For fiscal years beginning on or after September 1, 1995,
the Fund is required to disclose its average commission
rate per share for purchases and sales of equity securities.
The "Average Commission Rate Paid" includes commissions paid
in foreign currencies, which have been converted into US
dollars using the prevailing exchange rate on the date of
the transaction. Such conversions may significantly affect
the rate shown.
++Commencement of Operations.
++++Based on average shares outstanding during the period.
See Notes to Financial Statements.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
<PAGE>
1. Significant Accounting Policies:
Merrill Lynch Global SmallCap Fund, Inc. (the "Fund") is registered
under the Investment Company Act of 1940 as a diversified, open-end
management investment company. These unaudited financial statements
reflect all adjustments which are, in the opinion of management,
necessary to a fair statement of the results for the interim period
presented. All such adjustments are of a normal recurring nature.
The Fund offers four classes of shares under the Merrill Lynch
Select Pricing SM System. Shares of Class A and Class D are sold with
a front-end sales charge. Shares of Class B and Class C may be
subject to a contingent deferred sales charge. All classes of shares
have identical voting, dividend, liquidation and other rights and
the same terms and conditions, except that Class B, Class C and
Class D Shares bear certain expenses related to the account
maintenance of such shares, and Class B and Class C Shares also bear
certain expenses related to the distribution of such shares. Each
class has exclusive voting rights with respect to matters relating
to its account maintenance and distribution expenditures. The
following is a summary of significant accounting policies followed
by the Fund.
(a) Valuation of investments--Portfolio securities which 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 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 which 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 are valued
at the last sale price in the case of exchange-traded options or, in
the case of options traded in the over-the-counter market, the last
asked price. Options purchased are valued at the last sale price in
the case of exchange-traded options or, in the case of options
traded in the over-the-counter market, the last bid price. Short-
term securities are valued at amortized cost, which approximates
market value. Other investments, including futures contracts and
related options, are stated at market value. Securities and assets
for which market value quotations are not available are valued at
their fair value as determined in good faith by or under the
direction of the Fund's Board of Directors.
(b) Repurchase agreements--The Fund invests in US Government
securities pursuant to repurchase agreements with a member bank of
the Federal Reserve System or a primary dealer in US Government
securities. Under such agreements, the bank or primary dealer agrees
to repurchase the security at a mutually agreed upon time and price.
The Fund takes possession of the underlying securities, marks to
market such securities and, if necessary, receives additions to such
securities daily to ensure that the contract is fully
collateralized.
<PAGE>
(c) Derivative financial instruments--The Fund may engage in various
portfolio strategies to seek to increase its return by hedging its
portfolio against adverse movements in the equity, debt and currency
markets. Losses may arise due to changes in the value of the
contract or if the counterparty does not perform under the contract.
* Forward foreign exchange contracts--The Fund is 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 Funds' records. However, the effect on
operations is recorded from the date the Fund enters into such
contracts. Premium or discount is amortized over the life of the
contracts.
* Foreign currency options and futures--The Fund 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 Fund,
sold by the Fund but not yet delivered, or committed or anticipated
to be purchased by the Fund.
* Options--The Fund is authorized to purchase and write call and put
options. When the Fund writes an option, an amount equal to the
premium received by the Fund is reflected as an asset and an
equivalent liability. The amount of the liability is subsequently
marked to market to reflect the current 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 Fund enters into a closing transaction), the Fund
realizes 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 transactions exceeds the premium paid or received).
NOTES TO FINANCIAL STATEMENTS (continued)
Written and purchased options are non-income producing investments.
* Financial futures contracts--The Fund may purchase or sell
interest rate 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 Fund deposits and maintains as collateral such initial
margin as required by the exchange on which the transaction is
effected. Pursuant to the contract, the Fund agrees 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 Fund as unrealized
gains or losses. When the contract is closed, the Fund records 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.
<PAGE>
(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 the Fund'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
withholding 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
Fund has 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 five-year period. Prepaid registration fees are
charged to expense as the related shares are issued.
(h) Dividends and distributions--Dividends and distributions paid by
the Fund are recorded on the ex-dividend dates.
2. Investment Advisory Agreement and Transactions
with Affiliates:
The Fund has entered into an Investment Advisory Agreement with
Merrill Lynch Asset Management, L.P. ("MLAM" or "Investment
Adviser"). 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 Fund has also
entered into a Distribution Agreement and Distribution Plans with
Merrill Lynch Funds Distributor, Inc. ("MLFD" or "Distributor"), a
wholly-owned subsidiary of Merrill Lynch Group, Inc.
<PAGE>
MLAM is responsible for the management of the Fund's portfolio and
provides the necessary personnel, facilities, equipment and certain
other services necessary to the operations of the Fund. For such
services, the Fund pays a monthly fee of 0.85%, on an annual basis,
of the average daily net assets of the Fund. MLAM has entered into a
Sub-Advisory Agreement with Merrill Lynch Asset Management U.K.,
Ltd. ("MLAM U.K."), an affiliate of MLAM, pursuant to which MLAM
pays MLAM U.K. a fee in an amount to be determined from time to time
by MLAM and MLAM U.K. but in no event in excess of the amount that
MLAM actually receives. For the six months ended December 31, 1996,
MLAM paid MLAM U.K. a fee of $656,315 pursuant to such Agreement.
Pursuant to the distribution plans (the "Distribution Plans")
adopted by the Fund in accordance with Rule 12b-1 under the
Investment Company Act of 1940, the Fund 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 Distribution
Maintenance Fee Fee
Class B 0.25% 0.75%
Class C 0.25% 0.75%
Class D 0.25% --
Pursuant to a sub-agreement with the Distributor, Merrill Lynch,
Pierce, Fenner & Smith Inc. ("MLPF&S"), a subsidiary of ML & Co.,
also provides account maintenance and distribution services to the
Fund. The ongoing account maintenance fee compensates the
Distributor and MLPF&S for providing account maintenance services to
Class B, Class C and Class D shareholders. The ongoing distribution
fee compensates the Distributor and MLPF&S for providing shareholder
and distribution-related services to Class B and Class C
shareholders.
For the six months ended December 31, 1996, MLFD earned underwriting
discounts and MLPF&S earned dealer concessions on sales of the
Fund's Class A and Class D Shares as follows:
MLFD MLPF&S
Class A $ 3 $ 87
Class D $987 $13,667
<PAGE>
For the six months ended December 31, 1996, MLPF&S received
contingent deferred sales charges of $189,029 and $1,527 relating to
transactions in Class B and Class C Shares, respectively.
In addition, MLPF&S received $17,301 in commissions on the execution
of portfolio security transactions for the six months ended December
31, 1996.
Merrill Lynch Financial Data Services, Inc. ("MLFDS"), a wholly-
owned subsidiary of ML & Co., is the Fund's transfer agent.
Accounting services are provided to the Fund by MLAM at cost.
Certain officers and/or directors of the Fund are officers and/or
directors of MLAM, PSI, MLAM U.K., MLPF&S, MLFD, MLFDS, and/or ML &
Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the six months ended December 31, 1996 were $35,117,429 and
$46,226,463, respectively.
Net realized and unrealized gains (losses) as of December 31, 1996
were as follows:
Realized Unrealized
Gains Gains
(Losses) (Losses)
Investments:
Long-term $ 2,914,140 $ (6,953,518)
Short-term 29,441 44
Stock index futures contracts (427,554) 182,400
Options written (137,500) --
------------ ------------
Total investments 2,378,527 (6,771,074)
------------ ------------
Currency transactions:
Options purchased (113,564) 6,804
Foreign currency transactions 111,943 (2,477)
Forward foreign exchange
contracts 927,952 430,994
------------ ------------
Total currency transactions 926,331 435,321
------------ ------------
Total $ 3,304,858 $ (6,335,753)
============ ============
<PAGE>
As of December 31, 1996, net unrealized depreciation for Federal
income tax purposes aggregated $6,953,474, of which $17,663,118
related to appreciated securities and $24,616,592 related to
depreciated securities. The aggregate cost of investments at
December 31, 1996 for Federal income tax purposes was $153,067,607.
4. Capital Share Transactions:
Net decrease in net assets derived from capital share transactions
was $2,282,701 and $33,525,896 for the six months ended December 31,
1996 and for the year ended June 30, 1996, respectively.
Transactions in capital shares for each class were as follows:
Class A Shares for the
Six Months Ended Dollar
December 31, 1996 Shares Amount
Shares sold 118,971 $ 1,221,896
Shares issued to shareholders in
reinvestment of dividends and
distributions 25,500 247,091
------------ ------------
Total issued 144,471 1,468,987
Shares redeemed (112,209) (1,136,818)
------------ ------------
Net increase 32,262 $ 332,169
============ ============
Class A Shares for the
Year Ended Dollar
June 30, 1996 Shares Amount
Shares sold 296,811 $ 2,900,817
Shares issued to shareholders in
reinvestment of dividends and
distributions 3,060 27,820
------------ ------------
Total issued 299,871 2,928,637
Shares redeemed (687,569) (6,547,134)
------------ ------------
Net decrease (387,698) $ (3,618,497)
============ ============
NOTES TO FINANCIAL STATEMENTS (concluded)
<PAGE>
Class B Shares for the Six Months Dollar
Ended December 31, 1996 Shares Amount
Shares sold 1,394,123 $ 14,451,748
Shares issued to shareholders
in reinvestment of dividends
and distributions 555,932 5,336,945
------------ ------------
Total issued 1,950,055 19,788,693
Automatic conversion of shares (15,962) (165,872)
Shares redeemed (2,160,494) (22,326,743)
------------ ------------
Net decrease (226,401) $ (2,703,922)
============ ============
Class B Shares for the Year Dollar
Ended June 30, 1996 Shares Amount
Shares sold 3,191,120 $ 31,771,205
Shares issued to shareholders in
reinvestment of dividends and
distributions 69,565 627,475
------------ ------------
Total issued 3,260,685 32,398,680
Automatic conversion of shares (38,752) (370,604)
Shares redeemed (5,891,101) (56,152,670)
------------ ------------
Net decrease (2,669,168) $(24,124,594)
============ ============
Class C Shares for the Six Months Dollar
Ended December 31, 1996 Shares Amount
Shares sold 107,928 $ 1,120,797
Shares issued to shareholders in
reinvestment of dividends and
distributions 41,482 397,810
------------ ------------
Total issued 149,410 1,518,607
Shares redeemed (103,685) (1,065,716)
------------ ------------
Net increase 45,725 $ 452,891
============ ============
Class C Shares for the Year Dollar
Ended June 30, 1996 Shares Amount
<PAGE>
Shares sold 368,083 $ 3,622,074
Shares issued to shareholders in
reinvestment of dividends and
distributions 4,696 42,310
------------ ------------
Total issued 372,779 3,664,384
Shares redeemed (392,451) (3,747,857)
------------ ------------
Net decrease (19,672) $ (83,473)
============ ============
Class D Shares for the Six Months Dollar
Ended December 31, 1996 Shares Amount
Shares sold 473,588 $ 4,947,061
Automatic conversion of shares 15,755 165,872
Shares issued to shareholders
in reinvestment of dividends
and distributions 99,660 963,719
------------ ------------
Total issued 589,003 6,076,652
Shares redeemed (616,287) (6,440,491)
------------ ------------
Net decrease (27,284) $ (363,839)
============ ============
Class D Shares for the Year Dollar
Ended June 30, 1996 Shares Amount
Shares sold 1,341,253 $ 13,808,237
Automatic conversion of shares 38,393 370,604
Shares issued to shareholders
in reinvestment of dividends
and distributions 17,279 156,896
------------ ------------
Total issued 1,396,925 14,335,737
Shares redeemed (1,996,494) (20,035,069)
------------ ------------
Net decrease (599,569) $ (5,699,332)
============ ============
EQUITY PORTFOLIO CHANGES
For the Quarter Ended December 31, 1996
<PAGE>
Additions
ASM Lithography Holding NV
*Amway Asia Pacific Ltd.
Amway (Malaysia) Holdings BHD
*Aurum Software, Inc.
Azkoyen S.A.
Brite Voice Systems, Inc.
C.P. Clare Corp.
Central Europea Media Enterprises
Ltd. (Class A)
Chiyoda Integre Co., Ltd.
Corporate Services Group PLC
DII Group, Inc.
Elsag Bailey Process Automation NV
Establecimentos Jeronimo
Martins & Filho S.A. (New)
*Evander Gold Mines Ltd.
GEA AG (Preferred)
Greater New York Savings Bank
Grupo Profesional Planeacion y
Proyectos, S.A. de C.V. (Class B)
Gryphon Holdings, Inc.
Haven Bancorp Inc.
*InWear Group A.S.
KSB AG (Preferred)
Kiwi Income Property Trust (Rights)
Landair Services, Inc.
Limelight Group PLC
Metromail Corporation
Miquel y Costas & Miquel, S.A.
Nu Horizons Electronics Corp.
The Peak Technologies Group Inc.
*Rural Cellular Corporation (Class A)
*SELECT Software Tools (ADR)
Saurer AG (Registered)
Serco Group PLC (Ordinary)
Shoney's, Inc.
*Simulation Sciences Inc.
*Star Publications Inc.
Sterling Commerce, Inc.
Stewart & Stevenson Services, Inc.
Sybase, Inc.
Sylea
TALX Corp.
TEGE S.A.
TT Tieto OY
Titan Exploration, Inc.
Triumph Group, Inc.
*Xomed Surgical Products Inc.
<PAGE>
Deletions
Advanced Fibre Communications, Inc.
Affco Holdings Ltd.
Algodonera de San Antonio
*Amway Asia Pacific Ltd.
Arbatax International Inc.
Arcadian Corp.
*Aurum Software, Inc.
BE Aerospace Inc.
Beverly Enterprises, Inc.
Centrais Electricas da Santa Catarina
S.A. (CELESC) (Receipts)
Cristaleria Espanola S.A.
Crown Crafts, Inc.
Daetwyler Holdings AG
Energy Support Corp.
*Evander Gold Mines Ltd.
Expeditors International of
Washington, Inc.
Fochi Filippo S.p.A. (Ordinary)
Hazlewood Foods PLC
ITI Technologies Inc.
Insituform Technologies, Inc.
(Class A)
Inspec Group PLC (New Shares)
InterVoice, Inc.
*InWear Group A.S.
Katakura Chikkarin Co., Ltd.
Kinross Mines Ltd.
Kirby Corp.
Korea Electric Power Corp. (ADR)
Korea Mobile Telecommunications
Corp. (GDR)
MathSoft, Inc.
Medex, Inc.
Mississippi Chemical Corp.
Nobel Biocare AB
Otra NV
Pope & Talbot, Inc.
QCT Resources Ltd.
Rex Stores Corp.
Roosevelt Financial Group, Inc.
*Rural Cellular Corporation (Class A)
*SELECT Software Tools (ADR)
Sanoh Industrial Co.
*Simulation Sciences Inc.
Sistem Televisyen Malaysia BHD
*Star Publications Inc.
Telxon Corporation
Thoresen Thai Agency PLC `Local'
Towa Pharmaceutical Co.
VLSI Technology Inc.
Vallehermoso S.A.
*Xomed Surgical Products Inc.
<PAGE>
[FN]
*Added and deleted in the same quarter.
