MERRILL LYNCH
ASSET GROWTH
FUND, INC.
FUND LOGO
Quarterly Report
November 30, 1995
This report is not authorized for use as an offer of sale or a
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.
<PAGE>
Merrill Lynch Asset
Growth Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
MERRILL LYNCH ASSET GROWTH FUND, INC.
Percent Breakdown of
Stocks & Fixed-Income Percent of
Securities by Country Net Assets++
United States 48.2%
Japan 17.0
Germany 3.9
United Kingdom 3.4
Canada 2.7
Argentina 2.2
Italy 1.7
Netherlands 1.4
France 1.3
Switzerland 1.3
Spain 1.1
Hong Kong 1.1
Indonesia 1.0
Mexico 1.0
Philippines 0.8
Thailand 0.6
[FN]
++Percent of net assets may not total 100%.
Worldwide
Investments as of
November 30, 1995
Ten Largest Industries Percent of
(Equity Investments) Net Assets
Telecommunications 9.1%
Electronics 5.5
Petroleum 5.3
Insurance 4.3
Banking 4.2
Electrical Equipment 3.9
Retail Stores 3.2
Chemicals 3.0
Capital Goods 2.6
Photography 2.5
<PAGE>
Country Percent
Ten Largest Holdings of of Net
(Equity Investments) Origin Assets
Merck & Co., Inc. United States 1.6%
Aetna Life & Casualty Company United States 1.6
Eastman Kodak Co. United States 1.5
Siemens AG Germany 1.5
Northern Telecommunications Ltd. Canada 1.5
Humana, Inc. United States 1.4
Mannesmann AG Germany 1.4
Royal Dutch Petroleum N.V. (ADR) Netherlands 1.4
AT&T Corp. United States 1.4
Bell Atlantic Corp. United States 1.4
<PAGE>
DEAR SHAREHOLDER
The pace of US economic activity apparently changed once again
during the quarter ended November 30, 1995. During the summer
months, there was strong evidence of a slowing economy, a trend that
was reversed during the third calendar quarter of 1995, when gross
domestic product growth rebounded to a 4.2% pace. However, recent
economic releases suggest that this rate of expansion has not been
sustained.
A number of key measures of economic growth indicate that the
economy is losing momentum. Retail sales for November were soft,
reflecting continued caution on the part of debt-burdened consumers.
Home sales and housing starts both declined in October, despite
lower mortgage rates. At the same time, there has been an increase
in initial unemployment claims, along with weak job and income
growth. In response to this slowing in the economy, inflationary
pressures continue to be subdued. As a result of these trends,
long-term interest rates have fallen, bond prices have risen, and
the US stock market reached a new all-time high.
The strong stock and bond market rallies suggest that investors are
not only anticipating that a lackluster economy will lead the
Federal Reserve Board to resume its easing of monetary policy, but
also that the Clinton Administration and Congress will reach an
agreement in their current Federal budget deliberations. While the
probable direction of economic activity will continue to be the
primary focus of investors in the weeks ahead, a credible plan for
reducing the Federal budget deficit will also be an important factor
in the investment outlook.
Portfolio Matters
As of November 30, 1995, the Fund's asset allocation was: foreign
stocks, 40.5% of net assets; US stocks, 30.3%; US bonds, 17.9%; and
cash and cash equivalents, 11.3%. During the three-month period
ended November 30, 1995, we implemented a more cautious posture
toward foreign markets by reducing the Fund's allocation to foreign
equities. Evidence of slowing economic growth in Europe and the
emerging economies, particularly those of Asia, resulted in a less
optimistic assessment of the reward/risk relationships for these
markets. At the same time, we retained a significant commitment to
Japanese equities since we remain optimistic about the outlook for
the Japanese stock market. An aggressively accommodative stance by
the Bank of Japan, and indications that the Japanese government is
beginning to seriously address the problems in the financial system,
led us to remain favorably disposed toward Japan. At the same time,
the Japanese economy is showing signs of beginning a recovery as a
result of both a reflationary monetary policy and a weaker yen.
Since we believe that the yen could continue to weaken relative to
the US dollar, over 60% of the value of the Fund's Japanese equity
position is hedged back into US dollars.
<PAGE>
In Europe, we retained significant weightings in the United Kingdom,
Germany, the Netherlands and Italy, but we significantly reduced the
Fund's investments in other countries. During the quarter ended
November 30, 1995, we concentrated our Latin American investments in
Argentina, because we believe that investors will be rewarded for
the country's decision not to devalue its currency. In Asia, our
investments were concentrated in telecommunications companies,
including Hong Kong Telecommunications, Ltd., P.T. Indonesian
Satellite Corp. and Philippine Long Distance Telephone Co.
We divided the proceeds derived from reducing some of the Fund's
foreign equity investments between cash and US equities. In the
United States, expectations of a further slowdown in economic
activity and an accompanying additional decline in interest rates
led us to increase our allocation to the credit-sensitive area
through commitments in the insurance and banking industries. We also
maintain a significant commitment in the consumer staples area, in
particular, health care equities, while a substantial position has
been retained in energy-related equities. At the same time, we took
advantage of price weakness to initiate selected commitments in
technology equities, including Texas Instruments Inc., Corning Inc.
and General Motors Corp. (Class E). We also invested in The Boeing
Co.
We believe that the Federal Reserve Board will eventually adopt a
more accommodative monetary policy. Therefore, we kept investments
in consumer cyclical equities which would benefit from monetary
easing, while initiating a position in Aluminum Co. of America.
We also retained our commitments in high-yield US bonds. Even with
the appreciation that occurred during the quarter ended November 30,
1995, the average yield on these issues continued to exceed 10%.
At the same time, we believe these bonds will exhibit further
appreciation in the coming months if US interest rates continue to
decline, as we expect they will.
In Conclusion
We thank you for your investment in Merrill Lynch Asset Growth Fund,
Inc., and we look forward to reviewing our outlook and strategy with
you in our upcoming semi-annual report to shareholders.
<PAGE>
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Joel Heymsfeld)
Joel Heymsfeld
Vice President and
Co-Portfolio Manager
(Thomas R. Robinson)
Thomas R. Robinson
Vice President and
Co-Portfolio Manager
Effective November 1, 1995, Thomas R. Robinson is responsible for
the day-to-day co-management of Merrill Lynch Asset Growth Fund,
Inc. Mr. Robinson had been employed by Merrill Lynch & Co. since 1981
before joining Merrill Lynch Asset Management, L.P. in November
1995. Since 1989 he was Manager--International Equity Strategy with
the Global Securities Research & Economics Group.
December 28, 1995
PERFORMANCE DATA
<PAGE>
About Fund Performance
Since October 21, 1994, investors have been 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.
* 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.
* 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).
Performance data for all of the Fund's shares are presented in the
"Recent Performance Results" and "Performance Summary" tables on
pages 5 and 6. Data for Class A and Class B Shares are presented in
the "Average Annual Total Return" table below. Data for Class C and
Class D Shares are also presented in the "Aggregate Total Return"
table below.
The "Recent Performance Results" table shows investment results
before the deduction of any sales charges for all of the Fund's
shares for the 12-month and 3-month periods ended November 30, 1995.
All data in this table assume imposition of the actual total
expenses incurred by each class of shares during the relevant
period.
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.
<PAGE>
Average Annual
Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 9/30/95 +1.95% -3.40%
Inception (9/02/94)
through 9/30/95 +0.01 -4.87
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 9/30/95 +0.91% -3.09%
Inception (9/02/94)
through 9/30/95 -1.03 -3.78
[FN]
*Maximum contingent deferred sales charge is 4% and is reduced to 0%
after 4 years.
**Assuming payment of applicable contingent deferred sales charge.
Aggregate
Total Return
% Return % Return
Without CDSC With CDSC**
Class C Shares*
Inception (10/21/94)
through 9/30/95 +0.56% -0.44%
[FN]
*Maximum contingent deferred sales charge is 1% and is reduced to 0%
after 1 year.
**Assuming payment of applicable contingent deferred sales charge.
<PAGE>
% Return Without % Return With
Sales Charge Sales Charge**
Class D Shares*
Inception (10/21/94)
through 9/30/95 +1.30% -4.02%
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
<TABLE>
Recent
Performance
Results*
<CAPTION>
12 Month 3 Month
11/30/95 8/31/95 11/30/94 % Change % Change
<S> <C> <C> <C> <C> <C>
Class A Shares $9.82 $9.90 $9.48 +3.59% - 0.81%
Class B Shares 9.73 9.83 9.46 +2.85 - 1.02
Class C Shares 9.72 9.82 9.47 +2.64 - 1.02
Class D Shares 9.80 9.88 9.48 +3.38 - 0.81
Class A Shares--Total Return +4.01(1) - 0.81
Class B Shares--Total Return +2.95(2) - 1.02
Class C Shares--Total Return +2.90(3) - 1.02
Class D Shares--Total Return +3.77(4) - 0.81
<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 $0.038 per share ordinary
income dividends.
(2)Percent change includes reinvestment of $0.009 per share ordinary
income dividends.
(3)Percent change includes reinvestment of $0.023 per share ordinary
income dividends.
(4)Percent change includes reinvestment of $0.036 per share ordinary
income dividends.
</TABLE>
<PAGE>
<TABLE>
Performance
Summary--
Class A Shares
<CAPTION>
Net Asset Value Capital Gains Dividends
Period Covered Beginning Ending Distributed Paid* % Change**
<C> <C> <C> <C> <C> <C>
9/02/94--12/31/94 $10.00 $9.33 -- $0.038 -6.31%
1/01/95--11/30/95 9.33 9.82 -- -- +5.25
------
Total $0.038
Cumulative total return as of 11/30/95: -1.39%**
<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.
</TABLE>
<TABLE>
Performance
Summary--
Class B Shares
<CAPTION>
Net Asset Value Capital Gains Dividends
Period Covered Beginning Ending Distributed Paid* % Change**
<C> <C> <C> <C> <C> <C>
9/02/94--12/31/94 $10.00 $9.33 -- $0.009 -6.61%
1/01/95--11/30/95 9.33 9.73 -- -- +4.29
------
Total $0.009
Cumulative total return as of 11/30/95: -2.61%**
<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>
PERFORMANCE DATA (concluded)
<TABLE>
Performance
Summary--
Class C Shares
<CAPTION>
Net Asset Value Capital Gains Dividends
Period Covered Beginning Ending Distributed Paid* % Change**
<C> <C> <C> <C> <C> <C>
10/21/94--12/31/94 $9.85 $9.32 -- $0.023 -5.14%
1/01/95--11/30/95 9.32 9.72 -- -- +4.29
------
Total $0.023
Cumulative total return as of 11/30/95: -1.07%**
<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 D Shares
<CAPTION>
Net Asset Value Capital Gains Dividends
Period Covered Beginning Ending Distributed Paid* % Change**
<C> <C> <C> <C> <C> <C>
10/21/94--12/31/94 $9.86 $9.33 -- $0.036 -5.01%
1/01/95--11/30/95 9.33 9.80 -- -- +5.04
------
Total $0.036
Cumulative total return as of 11/30/95: -0.23%**
<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.
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (in US dollars)
<CAPTION>
Shares Percent of
COUNTRY Industries Held Common Stocks Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
Argentina Banking 5,500 Banco Frances del Rio de la Plata
S.A. (ADR) (a) $ 170,444 $ 143,688 1.1%
Petroleum 8,000 Yacimientos Petroliferos Fiscales
S.A. (Sponsored) (ADR) (a) 186,139 156,000 1.1
Total Common Stocks in Argentina 356,583 299,688 2.2
Canada Multi-Industry 9,500 Canadian Pacific Ltd. 169,195 173,375 1.2
Telecommunications 5,000 Northern Telecommunications Ltd. 174,050 201,875 1.5
Total Common Stocks in Canada 343,245 375,250 2.7
France Petroleum 3,000 TOTAL S.A. (Class B) 178,190 184,806 1.3
Total Common Stocks in France 178,190 184,806 1.3
Germany Electronics 400 Siemens AG 177,405 208,875 1.5
Machinery & Equipment 600 Mannesmann AG 167,773 193,130 1.4
Multi-Industry 500 Preussag AG 146,953 143,835 1.0
Total Common Stocks in Germany 492,131 545,840 3.9
Hong Kong Telecommunications 9,000 Hong Kong Telecommunications Ltd.
(ADR) (a) 149,040 154,125 1.1
Total Common Stocks in Hong Kong 149,040 154,125 1.1
Indonesia Telecommunications 4,190 P.T. Indonesian Satellite Corp. (ADR) (a) 162,969 143,508 1.0
Total Common Stocks in Indonesia 162,969 143,508 1.0
<PAGE>
Italy Machinery 50,000 Danieli & C. Officine Meccaniche S.p.A. 129,513 129,399 0.9
Telecommunications 40,000 Societa Finanziara Telefonica S.p.A.
(STET) 121,375 108,645 0.8
Total Common Stocks in Italy 250,888 238,044 1.7
Japan Banking 10,000 Mitsubishi Trust & Banking Corp. 164,507 153,543 1.1
7,000 Sanwa Bank, Ltd. 141,979 135,728 1.0
----------- ----------- ------
306,486 289,271 2.1
Building & 15,000 Maeda Corp. 167,593 153,543 1.1
Construction 20,000 Okumura Corp. 171,072 182,087 1.3
----------- ----------- ------
338,665 335,630 2.4
Capital Goods 20,000 Hitachi Cable Ltd. 172,962 142,323 1.0
20,000 Mitsubishi Heavy Industries, Ltd. 161,560 159,646 1.2
----------- ----------- ------
334,522 301,969 2.2
Consumer--Electronics 10,000 Matsushita Electric Industrial
Co., Ltd. 168,023 148,622 1.1
Electrical Equipment 24,000 Mitsubishi Electric Co. 165,781 178,583 1.3
Electronics 3,000 Rohm Co. 128,833 183,366 1.3
Insurance 14,000 Tokio Marine & Fire Insurance Co., Ltd. 168,933 159,843 1.1
Photography 8,000 Canon, Inc. 140,603 140,945 1.0
Printing & Publishing 9,000 Dai Nippon Printing Co., Ltd. 167,255 157,677 1.1
Retail Stores 3,000 Ito-Yokado Co., Ltd. 160,796 165,945 1.2
Trading 15,000 Kamigumi Co., Ltd. 174,860 136,860 1.0
17,000 Sumitomo Corp. 171,167 168,996 1.2
----------- ----------- ------
346,027 305,856 2.2
Total Common Stocks in Japan 2,425,924 2,367,707 17.0
Mexico Retail Stores 130,000 Cifra, S.A. de C.V. 'C' 229,365 134,674 1.0
Total Common Stocks in Mexico 229,365 134,674 1.0
<PAGE>
Netherlands Petroleum 1,500 Royal Dutch Petroleum N.V. (ADR) (a) 162,683 192,563 1.4
Total Common Stocks in the Netherlands 162,683 192,563 1.4
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Shares Percent of
COUNTRY Industries Held Common Stocks Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
Philippines Telecommunications 2,000 Philippine Long Distance Telephone
Co. (ADR) (a) $ 139,932 $ 112,000 0.8%
Total Common Stocks in the Philippines 139,932 112,000 0.8
Spain Petroleum 5,000 Repsol S.A. (ADR) (a) 160,925 158,125 1.1
Total Common Stocks in Spain 160,925 158,125 1.1
Switzerland Electrical Equipment 150 BBC Brown Boveri & Cie (Bearer) 136,074 172,340 1.3
Total Common Stocks in Switzerland 136,074 172,340 1.3
Thailand Real Estate 60,000 MDX Company Ltd. 246,175 77,535 0.6
Total Common Stocks in Thailand 246,175 77,535 0.6
United Electrical Equipment 37,000 General Electric Co. PLC (Ordinary) 167,508 179,501 1.3
Kingdom
Telecommunications 2,700 British Telecommunications PLC
(ADR) (a) 151,700 156,262 1.1
Utilities--Gas 3,600 British Gas PLC (ADR) (a) 165,852 134,100 1.0
Total Common Stocks in the United
Kingdom 485,060 469,863 3.4
<PAGE>
United Aerospace & Defense 2,000 Boeing Co. (The) 146,689 145,750 1.1
States 1,500 United Technologies Corp. 132,653 140,625 1.0
----------- ----------- ------
279,342 286,375 2.1
Automobiles 6,500 Ford Motor Co. 174,625 183,625 1.3
Banking 3,000 Bank of New York Company, Inc. (The) 128,430 141,375 1.0
Capital Goods 2,900 Keystone International, Inc. 51,799 59,450 0.4
Chemicals 2,500 Eastman Chemical Co. 129,988 164,062 1.2
Electronics 3,200 Corning, Inc. 88,300 96,400 0.7
3,000 General Motors Corp. (Class E) 153,218 151,500 1.1
2,200 Texas Instruments Inc. 126,918 127,325 0.9
----------- ----------- ------
368,436 375,225 2.7
Furniture/Home 2,500 Whirlpool Corporation 144,731 138,750 1.0
Appliances
Hardware Products 3,000 The Stanley Works Co. 118,299 151,875 1.1
Healthcare 7,000 Humana, Inc. 157,045 196,000 1.4
Hospital Supplies 4,500 Abbott Laboratories 142,020 182,812 1.3
Insurance 3,000 Aetna Life & Casualty Company 222,041 220,125 1.6
4,000 Allstate Corp. 163,729 164,000 1.2
1,700 National Re Corp. 55,135 55,887 0.4
----------- ----------- ------
440,905 440,012 3.2
Metals 1,300 Aluminum Company of America 74,804 76,050 0.5
Oil Services 7,000 Dresser Industries, Inc. 140,902 165,375 1.2
2,000 Schlumberger Ltd. 128,620 127,000 0.9
----------- ----------- ------
269,522 292,375 2.1
Petroleum 1,400 Pennzoil Company 55,291 55,475 0.4
Pharmaceuticals 3,700 Merck & Co., Inc. 126,485 228,937 1.6
Photography 3,100 Eastman Kodak Co. 160,989 210,800 1.5
Pollution Control 11,000 Wheelabrator Technologies Inc. 176,940 165,000 1.2
Retail Stores 3,400 Sears, Roebuck & Co. 135,257 133,875 1.0
<PAGE>
Scientific 5,000 Fisher Scientific International, Inc. 154,457 163,125 1.2
Equipment
Telecommunications 2,900 AT&T Corp. 153,994 191,400 1.4
3,000 Bell Atlantic Corp. 147,930 189,000 1.4
----------- ----------- ------
301,924 380,400 2.8
Utilities--Gas 4,000 Consolidated Natural Gas Co. 169,240 177,500 1.3
Total Common Stocks in the United
States 3,760,529 4,203,098 30.3
Total Investments in Common Stocks 9,679,713 9,829,166 70.8
<CAPTION>
Face
Amount Fixed-Income Securities
United Airlines US$ 200,000 USAir Inc., 10.375% due 3/01/2013 178,000 186,000 1.3
States
Broadcast & 200,000 Sinclair Broadcast Group, Inc., 10%
Publishing due 12/15/2003 187,000 205,000 1.5
Chemicals 325,000 G-I Holdings Inc., 12.876%* due
10/01/1998 230,889 247,000 1.8
Communications 225,000 Panamsat L.P., 12.1347%* due 8/01/2003 161,091 181,125 1.3
100,000 Videotron Holdings PLC, 10.625% due
2/15/2005 99,375 105,750 0.8
----------- ----------- ------
260,466 286,875 2.1
Cosmetics 200,000 Revlon Consumer Products Corp.,
9.375% due 4/01/2001 180,437 200,250 1.4
Energy 200,000 TransTexas Gas Corp., 11.50% due
6/15/2002 200,000 206,500 1.5
Financial Services 200,000 Reliance Group Holdings, Inc., 9.75%
due 11/15/2003 180,000 204,750 1.5
Hotels & 200,000 Bally's Park Place Funding Corp.,
Casinos 9.25% due 3/15/2004 171,750 199,500 1.4
Paper 200,000 Stone Container Corp., 11.50% due
10/01/2004 198,564 202,000 1.4
<PAGE>
Restaurants 200,000 Flagstar Corp., 11.375% due 9/15/2003 176,000 148,000 1.1
Textiles 200,000 WestPoint Stevens, Inc., 9.375% due
12/15/2005 182,000 201,000 1.4
Utilities-- 200,000 CTC Mansfield Funding Corp., 10.25%
Electric due 3/30/2003 185,500 202,750 1.5
Total Investments in Fixed-Income
Securities 2,330,606 2,489,625 17.9
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<CAPTION>
Face Percent of
COUNTRY Amount Short-Term Securities Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
United Commercial US$ 334,000 General Electric Capital Corp., 5.90%
States Paper** due 12/01/1995 $ 334,000 $ 334,000 2.4%
US Government 1,100,000 Federal Home Loan Bank, 5.66% due
& Agency 12/04/1995 1,099,481 1,099,481 7.9
Obligations**
Total Investments in Short-Term
Securities 1,433,481 1,433,481 10.3
Total Investments $13,443,800 13,752,272 99.0
===========
Unrealized Appreciation on Forward Foreign Exchange Contracts++ 276,418 2.0
Liabilities in Excess of Other Assets (136,962) (1.0)
----------- ------
Net Assets $13,891,728 100.0%
=========== ======
<PAGE>
Net Asset Class A--Based on net assets of $1,549,899 and 157,841
Value: shares outstanding $ 9.82
===========
Class B--Based on net assets of $10,033,757 and 1,031,559
shares outstanding $ 9.73
===========
Class C--Based on net assets of $652,782 and 67,180
shares outstanding $ 9.72
===========
Class D--Based on net assets of $1,655,290 and 168,931
shares outstanding $ 9.80
===========
<FN>
*Represents a zero coupon or step bond; the interest rate shown is
the effective yield at the time of purchase by the Fund.
**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.
(a)American Depositary Receipts (ADR).
++Forward foreign exchange contracts as of November 30, 1995 were as
follows:
<CAPTION>
Foreign Currency Sold Expiration Date Unrealized Appreciation
<S> <S> <C>
YEN 151,225,200 January 1996 $276,418
Total Unrealized Appreciation--Net on
Forward Foreign Exchange Contracts
(US$ Commitment--$1,775,308) $276,418
========
</TABLE>
EQUITY PORTFOLIO CHANGES
Additions
For the Quarter Ended November 30, 1995
Aetna Life & Casualty Company
Allstate Corp.
Aluminum Company of America
Bank of New York Company, Inc. (The)
Boeing Co. (The)
British Telecommunications PLC (ADR)
Consolidated Natural Gas Co.
Corning, Inc.
Danieli & C. Officine Meccaniche S.p.A.
General Motors Corp. (Class E)
Hong Kong Telecommunications Ltd. (ADR)
Humana, Inc.
National Re Corp.
Pennzoil Company
Preussag AG
Schlumberger Ltd.
Sears, Roebuck & Co.
Texas Instruments Inc.
United Technologies Corp.
<PAGE>
Deletions
Asahi Glass Co., Ltd.
Banco O'Higgins S.A. (ADR)
CSR Ltd.
Cementos Mexicanos, S.A. de C.V.
(Class B) (Cemex)
China Light & Power Co., Ltd.
Compagnie de Saint Gobain
Comsat Corp.
Empresas ICA Sociedad Controladora,
S.A. de C.V. (ADR)
General Signal Corp.
Grand Metropolitan PLC (ADR)
Holderbank Financiere Glarus AG (Bearer)
Holderbank Financiere Glarus AG (Warrants)
Hong Leong Industries BHD
Italcementi S.p.A.
Jurong Shipyard Ltd.
Kelly Services, Inc. (Class A)
Komatsu Ltd.
Kvaerner A.S. (Class B)
Kyocera Corp.
Lucas Industries PLC (Ordinary)
Makino Milling Machine Co.
Makita Corp.
Nalco Chemical Co.
Neptune Orient Lines Ltd.
Nippon Fire & Marine Insurance Co., Ltd.
Nippon Oil Co., Ltd.
Pacific Dunlop Ltd.
Phillips Petroleum Company
Pitney Bowes, Inc.
SKF AB 'B' Free
Sekisui Chemical Co., Ltd.
Shanghai Petrochemical Co., Ltd.
Stewart & Stevenson Services, Inc.
Sun Hung Kai Properties, Ltd.
Swire Pacific Ltd. 'A'
UMW Holdings BHD
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OFFICERS AND DIRECTORS
Arthur Zeikel, President and Director
Joe Grills, Director
Walter Mintz, Director
Melvin R. Seiden, Director
Stephen B. Swensrud, Director
Harry Woolf, Director
Terry K. Glenn, Executive Vice President
Donald C. Burke, Vice President
Joel Heymsfeld, Vice President
Gerald M. Richard, Treasurer
Mark B. Goldfus, Secretary
Custodian
The Chase Manhattan Bank, N.A.
4 MetroTech Center, 18th Floor
Brooklyn, New York 11245
Transfer Agent
Merrill Lynch Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, Florida 32246-6484
(800) 637-3863
