MERRILL LYNCH
ASSET GROWTH
FUND, INC.
FUND LOGO
Quarterly Report
November 30, 1996
<PAGE>
Officers and Directors
Arthur Zeikel, President and Director
Joe Grills, Director
Walter Mintz, Director
Robert S. Salomon Jr., Director
Melvin R. Seiden, Director
Stephen B. Swensrud, Director
Terry K. Glenn, Executive Vice President
Norman R. Harvey, Senior Vice President
Donald C. Burke, Vice President
Thomas R. Robinson, Vice President
and Senior Portfolio Manager
Gerald M. Richard, Treasurer
Mark B. Goldfus, Secretary
Custodian
The Chase Manhattan Bank, N.A.
4 MetroTech Center, 18th Floor
Brooklyn, NY 11245
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 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
Printed on post-consumer recycled paper
MERRILL LYNCH ASSET GROWTH FUND, INC.
Worldwide
Investments as of
November 30, 1996
Percent Breakdown of
Stocks & Fixed-Income Percent of
Securities by Country Net Assets++
United States 47.9%
Japan 9.0
United Kingdom 6.7
Canada 5.6
Sweden 4.0
Italy 4.0
Germany 3.1
France 2.6
Brazil 2.1
Argentina 2.1
Mexico 2.0
Finland 1.8
Hong Kong 1.5
Denmark 1.3
Switzerland 1.3
Philippines 0.8
Spain 0.8
Indonesia 0.7
Netherlands 0.6
Norway 0.4
South Korea 0.2
[FN]
++Percent of net assets may not total 100%.
<PAGE>
Ten Largest Industries Percent of
(Equity Investments) Net Assets
Telecommunications 6.5%
Banking 5.6
Computer Services & Software 3.7
Insurance 3.6
Petroleum 3.6
Pharmaceuticals 3.0
Aerospace & Defense 3.0
Beverages 2.9
Electrical Equipment 2.9
Retail Stores 2.8
Ten Largest Holdings Percent of
(Equity Investments) Net Assets
Kimberly-Clark Corp.* 1.7%
Unum Corporation 1.3
H.J. Heinz Company 1.2
Deere & Company 1.2
Northrop Grumman Corp. 1.2
PPG Industries, Inc. 1.2
General Motors Corp. 1.1
Merck & Co., Inc. 1.1
Sears, Roebuck & Co. 1.1
Toys 'R' Us, Inc. 1.1
[FN]
*Includes combined holdings.
DEAR SHAREHOLDER
As of November 30, 1996, the asset allocation for Merrill Lynch
Asset Growth Fund, Inc. was: US stocks, 45% of net assets; foreign
stocks, 38%; US bonds, 3%; foreign bonds, 13%; and cash reserves,
1%.
<PAGE>
During the quarter ended November 30, 1996, we restored a long
duration position within the North American bond markets of the
United States and Canada. The Fund's positioning in long-duration
bonds reflects evidence that the US economy, contrary to
strengthening as we expected previously, is showing signs of growing
at a more moderate, noninflationary pace. The slowdown is reflected
in slowing consumer demand and weaker-than-expected exports.
Consequently, the increase in the US Federal Funds rate, which we
had earlier anticipated, now seems likely to be postponed. We are
capitalizing upon this view by establishing positions in both US
bonds and longer-dated Canadian obligations. Long-term Canadian
bonds offer a yield pickup relative to US obligations of comparable
maturities. The Canadian securities are also benefiting from the
accommodative monetary policy stance by the Bank of Canada, as it
attempts to stimulate domestic economic growth and offset disin-
flationary pressures associated with the fiscal retrenchment of the
Canadian federal and provincial governments.
In Europe, we restored a position in Italian bonds because of
expectations of a strengthening lira relative to the Deutschemark.
These expectations were borne out as Italy re-entered the Exchange
Rate Mechanism. We maintained our investments in Sweden, the United
Kingdom, Germany, and Denmark, although the Fund's Danish bond
position was reduced as we reestablished the commitment to Italian
obligations. At the same time, increased confidence that the
European Monetary Union would proceed on schedule led us to expect
renewed weakness in the Deutschemark. This trend caused us to hedge
our Danish and German bond commitments back to the US dollar. A
similar currency view resulted in our decision to hedge our German,
French and Swiss equity positions back to the US dollar. We also
restored our hedge of Japanese equities back to the US dollar, given
our expectations of renewed weakness in the yen.
The major change in the Fund's equity sector was to shift assets
from the United States into foreign markets. We became more cautious
toward the US market after the strong advance that began in early
November. Our concern was that a continuing sluggish pace of
economic growth could leave US equities vulnerable to earnings
disappointments. In reducing US equities, we accepted profits in a
number of positions which had performed exceptionally well and no
longer seemed to offer above-average appreciation potential.
Equities which were liquidated on this basis included Microsoft
Corp., The Procter & Gamble Company and The Coca-Cola Company. We
also partially liquidated positions in a number of other US
equities.
In an effort to reduce risk, we established positions in several
areas which appeared unexploited. These sectors included electric
utilities through Edison International and real estate through
Prentiss Properties Trust. After the cutback in the Fund's US equity
position, the largest proportion of US equity assets remained
allocated to areas that will benefit from strength in capital
spending in the United States and abroad. These commitments included
companies involved in technology, such as International Business
Machines Corp., and companies in defense and aerospace sectors, as
exemplified by Northrop Grumman Corp.
<PAGE>
In the foreign equity sector, our investment representation was
enlarged through the expansion of existing commitments. New
positions were concentrated in Europe and included Vodafone Group
PLC in the United Kingdom, and Color Line ASA in Norway. Our country
allocations did not materially change during the three months ended
November 30, 1996. Overall, Europe remained well-represented, given
the relatively large number of attractively valued companies in the
European markets. Similarly, we maintained significant positions in
Latin America and in Canada, given comparatively favorable outlooks
for the Canadian and Latin American economies and markets. The
Fund's representation in Latin America remained allocated to
Argentina, Brazil and Mexico, which we believe continues to offer
the best potentials in the region. Finally, we continue to limit our
investments in the emerging markets of Asia.
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.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Thomas R. Robinson)
Thomas R. Robinson
Vice President and
Senior Portfolio Manager
(Joel Heymsfeld)
Joel Heymsfeld
Portfolio Manager
January 2, 1997
<PAGE>
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.
* 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.
PERFORMANCE DATA (concluded)
<PAGE>
Average Annual
Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 9/30/96 +8.29% +2.61%
Inception (9/02/94)
through 9/30/96 +3.92 +1.25
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 9/30/96 +7.22% +3.22%
Inception (9/02/94)
through 9/30/96 +2.86 +1.92
[FN]
*Maximum contingent deferred sales charge is 4% and is reduced to 0%
after 4 years.
**Assuming payment of applicable contingent deferred sales charge.
% Return % Return
Without CDSC With CDSC**
Class C Shares*
Year Ended 9/30/96 +7.08% +6.08%
Inception (10/21/94)
through 9/30/96 +3.87 +3.87
[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*
Year Ended 9/30/96 +7.98% +2.31%
Inception (10/21/94)
through 9/30/96 +4.72 +1.86
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
<TABLE>
Recent
Performance
Results*
<CAPTION>
12 Month 3 Month
11/30/96 8/31/96 11/30/95 % Change % Change
<S> <C> <C> <C> <C> <C>
Class A Shares $11.26 $10.13 $9.82 +14.66% +11.15%
Class B Shares 11.19 10.09 9.73 +15.01 +10.90
Class C Shares 11.14 10.05 9.72 +14.61 +10.85
Class D Shares 11.23 10.11 9.80 +14.59 +11.08
Class A Shares-Total Return +17.34(1) +11.15
Class B Shares-Total Return +16.14(2) +10.90
Class C Shares-Total Return +16.03(3) +10.85
Class D Shares-Total Return +17.04(4) +11.08
<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 $0.226 per share ordinary
income dividends.
(2)Percent change includes reinvestment of $0.096 per share ordinary
income dividends.
(3)Percent change includes reinvestment of $0.120 per share ordinary
income dividends.
(4)Percent change includes reinvestment of $0.207 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**
<S> <C> <C> <C> <C> <C>
9/02/94--12/31/94 $10.00 $ 9.33 -- $0.038 - 6.31%
1995 9.33 9.80 -- 0.226 + 7.49
1/1/96--11/30/96 9.80 11.26 -- -- +14.90
------
Total $0.264
Cumulative total return as of 11/30/96: +15.70%**
<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**
<S> <C> <C> <C> <C> <C>
9/02/94--12/31/94 $10.00 $ 9.33 -- $0.009 - 6.61%
1995 9.33 9.83 -- 0.096 + 6.40
1/1/96--11/30/96 9.83 11.19 -- -- +13.84
------
Total $0.105
Cumulative total return as of 11/30/96: +13.11%**
<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 C Shares
<CAPTION>
Net Asset Value Capital Gains Dividends
Period Covered Beginning Ending Distributed Paid* % Change**
<S> <C> <C> <C> <C> <C>
10/21/94--12/31/94 $9.85 $ 9.32 -- $0.023 - 5.14%
1995 9.32 9.79 -- 0.120 + 6.34
1/1/96--11/30/96 9.79 11.14 -- -- +13.79
------
Total $0.143
Cumulative total return as of 11/30/96: +14.78%**
<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**
<S> <C> <C> <C> <C> <C>
10/21/94--12/31/94 $9.86 $ 9.33 -- $0.036 - 5.01%
1995 9.33 9.80 -- 0.207 + 7.28
1/1/96--11/30/96 9.80 11.23 -- -- +14.59
------
Total $0.243
Cumulative total return as of 11/30/96: +16.77%**
<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>
Percent of
COUNTRY Industries Shares Held Common Stocks Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
Argentina Banking 3,570 Banco de Galicia y Buenos Aires
S.A. (ADR)(a) $ 73,342 $ 78,986 0.7%
2,325 Banco Frances del Rio de la Plata
S.A. (ADR)(a) 62,653 70,331 0.6
----------- ----------- ------
135,995 149,317 1.3
Petroleum 3,600 Yacimientos Petroliferos Fiscales
S.A. (ADR)(a) 81,316 83,700 0.8
Total Common Stocks in Argentina 217,311 233,017 2.1
Brazil Beverages 150,000 Companhia Cervejaria Brahma S.A.
PN (Preferred) 87,058 88,513 0.8
Oil & Related 480,000 Petroleo Brasileiro S.A. (Petrobras)
(Preferred) 56,568 65,752 0.6
Telecommunications 1,100 Telecomunicacoes Brasileiras S.A.-
Telebras (ADR)(a) 65,244 83,325 0.7
Total Common Stocks in Brazil 208,870 237,590 2.1
Canada Automobile Parts 1,200 Magna International, Inc. 52,649 65,850 0.6
Mining 1,100 Potash Corp. of Saskatchewan, Inc. 80,048 82,913 0.7
Multi-Industry 2,400 Canadian Pacific, Ltd. 42,744 66,000 0.6
Telecommunications 1,000 Northern Telecommunications Ltd. 34,810 65,750 0.6
Total Common Stocks in Canada 210,251 280,513 2.5
Finland Paper & Forest 3,200 UPM-Kymmene OY 64,665 64,107 0.6
Products
Telecommunications 1,300 Nokia Corp. (ADR)(a) 47,799 72,963 0.6
Equipment
Transportation 2,600 Finnlines OY 48,128 63,136 0.6
Total Common Stocks in Finland 160,592 200,206 1.8
<PAGE>
France Iron & Steel 4,100 Usinor-Sacilor S.A. 68,506 61,308 0.5
Reinsurance 2,400 Scor S.A. 89,982 84,725 0.8
Semiconductor 1,100 SGS-Thompson Microelectronics N.V. (NY
Capital Equipment Registered Shares) 41,340 73,288 0.7
Tires & Rubber 1,300 Michelin (C.G.D.E.)(Class B) 54,168 66,638 0.6
Total Common Stocks in France 253,996 285,959 2.6
Germany Chemicals 200 Henkel KGaA 8,891 9,756 0.1
1,600 Henkel KGaA (Preferred) 68,038 79,714 0.7
----------- ----------- ------
76,929 89,470 0.8
Electrical 1,900 Siemens AG 86,269 91,571 0.8
Equipment
Footwear 200 Puma AG 6,628 6,634 0.1
Machinery & 160 Mannesmann AG 44,739 66,758 0.6
Equipment
Total Common Stocks in Germany 214,565 254,433 2.3
Hong Kong Banking 3,200 HSBC Holdings PLC 51,510 66,636 0.6
Telecommunications 5,500 Hong Kong Telecommunications Ltd. (ADR)(a) 92,580 96,250 0.9
Total Common Stocks in Hong Kong 144,090 162,886 1.5
Indonesia Telecommunications 2,890 P.T. Indonesian Satellite Corp. (ADR)(a) 105,524 79,836 0.7
Total Common Stocks in Indonesia 105,524 79,836 0.7
Italy Machinery 23,000 Danieli & C. Officine Meccaniche S.p.A. 67,768 78,001 0.7
Telecommunications 18,300 Societa Finanziara Telefonica S.p.A.
(STET) 55,529 77,758 0.7
Total Common Stocks in Italy 123,297 155,759 1.4
Japan Building & 10,000 Maeda Corp. 102,085 77,849 0.7
Construction 12,000 Okumura Corp. 96,740 78,236 0.7
----------- ----------- ------
198,825 156,085 1.4
Capital Goods 10,000 Mitsubishi Heavy Industries, Ltd. 80,780 81,715 0.7
<PAGE>
Consumer-- 4,000 Matsushita Electric Industrial Co., Ltd. 67,209 69,238 0.6
Electronics
Electrical 14,000 Mitsubishi Electric Co. 93,847 80,573 0.7
Equipment
Electronics 1,000 Rohm Co., Ltd. 42,944 61,506 0.6
Financial Services 4,000 Nomura Securities Co., Ltd. 81,427 67,481 0.6
Insurance 8,000 Tokio Marine & Fire Insurance Co., Ltd. 94,559 88,569 0.8
Pharmaceuticals 4,000 Eisai Co., Ltd. 70,601 78,728 0.7
Photography 4,000 Canon, Inc. 75,063 84,351 0.8
Textiles 11,000 Toray Industries, Inc. 71,494 70,943 0.7
Tires & Rubber 5,000 Bridgestone Corporation 86,184 92,259 0.8
Warehouse & 9,000 Mitsui-Soko Co., Ltd. 73,996 70,776 0.6
Storage
Total Common Stocks in Japan 1,036,929 1,002,224 9.0
Mexico Beverages 1,400 Panamerican Beverages, Inc. (Class A) 56,898 65,450 0.6
Financial Services 86 Grupo Financiero Inbursa, S.A. de
C.V. (ADR)(a) 1,736 1,333 0.0
Multi-Industry 6,200 Grupo Carso, S.A. de C.V. (ADR)(a) 98,670 62,000 0.6
Paper Products 3,700 Kimberly-Clark de Mexico, S.A. de C.V. 62,881 71,806 0.6
Telecommunications 6,200 Carso Global Telecom (ADR)(a) 29,450 27,125 0.2
Total Common Stocks in Mexico 249,635 227,714 2.0
Netherlands Banking 1,100 ABN AMRO Holding N.V. 61,651 71,270 0.6
Total Common Stocks in the Netherlands 61,651 71,270 0.6
Norway Cruise Lines 10,000 Color Line ASA 37,601 45,944 0.4
Total Common Stocks in Norway 37,601 45,944 0.4
Philippines Beverages 21,200 San Miguel Corp. (Class B) 74,672 84,690 0.8
Total Common Stocks in the Philippines 74,672 84,690 0.8
<PAGE>
South Korea Engineering & 3,500 Hyundai Engineering & Construction
Construction Co., Ltd. (GDR)(b) 45,605 22,750 0.2
Total Common Stocks in South Korea 45,605 22,750 0.2
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Percent of
COUNTRY Industries Shares Held Common Stocks Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
Spain Petroleum 2,200 Repsol S.A. (ADR) (a) $ 70,920 $ 80,575 0.8%
Total Common Stocks in Spain 70,920 80,575 0.8
Sweden Banking 3,200 Sparbanken Sverige AB (Class A) 40,252 52,924 0.5
Investment 6,500 Bure Investment AB 54,697 71,668 0.6
Management
Total Common Stocks in Sweden 94,949 124,592 1.1
Switzerland Electrical 65 BBC Brown Boveri & Cie (Bearer) 63,940 81,431 0.7
Equipment
Pharmaceuticals 1,100 Sandoz AG (ADR)(a) 47,575 64,075 0.6
Total Common Stocks in Switzerland 111,515 145,506 1.3
United Banking 5,800 National Westminster Bank PLC 61,230 67,119 0.6
Kingdom
Beverages 9,500 Grand Metropolitan PLC 64,774 74,170 0.7
Electrical 11,500 General Electric Co. PLC (Ordinary) 58,357 72,001 0.7
Equipment
Merchandising 6,400 Boots Company PLC 60,430 68,308 0.6
Pharmaceuticals 3,900 Glaxo Wellcome PLC 52,668 64,555 0.6
Steel 25,000 British Steel PLC 65,679 69,753 0.6
Telecommunications 21,000 Vodafone Group PLC 73,076 90,889 0.8
Total Common Stocks in the
United Kingdom 436,214 506,795 4.6
<PAGE>
United Aerospace & 700 AlliedSignal, Inc. 51,507 51,275 0.5
States Defense 2,200 Gulfstream Aerospace Corporation 54,238 52,800 0.5
1,600 Northrop Grumman Corp. 105,808 133,000 1.2
600 United Technologies Corp. 53,061 84,150 0.8
----------- ----------- ------
264,614 321,225 3.0
Automobile 2,200 General Motors Corp. 121,853 126,775 1.1
Automobile Parts 3,100 Lear Corporation 103,850 111,213 1.0
Banking 3,100 Bank of New York Company, Inc. (The) 66,356 111,213 1.0
1,000 Citicorp 72,955 109,250 1.0
----------- ----------- ------
139,311 220,463 2.0
Broadcasting-- 2,393 Viacom, Inc. (Class B) 88,434 90,336 0.8
Media
Building Products 600 Oakwood Homes Corporation 13,356 13,275 0.1
3,800 Spieker Properties, Inc. 107,357 116,375 1.1
----------- ----------- ------
120,713 129,650 1.2
Chemicals 2,100 PPG Industries, Inc. 104,120 128,625 1.2
Computer Services 1,500 cisco Systems, Inc. 67,442 101,812 0.9
& Software 2,550 First Data Corp. 90,095 101,681 0.9
650 International Business Machines Corp. 71,432 103,594 1.0
2,112 Oracle Corp. 70,091 103,488 0.9
----------- ----------- ------
299,060 410,575 3.7
Computers 1,000 COMPAQ Computer Corp. 74,153 79,250 0.7
Diversified 600 FMC Corporation 42,106 46,350 0.4
Companies
Electronics 2,600 Corning, Inc. 73,147 105,300 0.9
1,100 General Electric Company 83,485 114,400 1.0
----------- ----------- ------
156,632 219,700 1.9
Engineering & 1,700 Foster Wheeler Corporation 69,512 61,412 0.6
Construction
Financial Services 2,100 American Express Company 98,034 109,725 1.0
Foods 3,600 H.J. Heinz Company 118,103 136,350 1.2
<PAGE>
Hospital Supplies 1,900 Abbott Laboratories 59,964 105,925 1.0
Insurance 800 Aetna Inc. 59,537 57,700 0.5
1,800 Allstate Corp. 73,678 108,450 1.0
2,000 Unum Corporation 127,661 142,250 1.3
----------- ----------- ------
260,876 308,400 2.8
Leisure/Tourism 3,200 Brunswick Corporation 79,060 81,600 0.7
914 TCI Pacific Communications
(Convertible Preferred) 86,556 79,518 0.7
----------- ----------- ------
165,616 161,118 1.4
Machine Tools & 3,000 Deere & Company 124,668 133,875 1.2
Machinery
Machinery 2,000 American Standard Companies, Inc. 65,274 76,250 0.7
Medical 3,400 Health Management Associates, Inc.
(Class A) 77,244 75,225 0.7
Natural Gas 2,300 Enron Corp. 88,840 105,225 0.9
Oil Services 3,100 Dresser Industries, Inc. 61,206 101,525 0.9
1,000 Schlumberger Ltd. 64,310 104,000 0.9
----------- ----------- ------
125,516 205,525 1.8
Paper 1,300 Kimberly-Clark Corp. 99,934 127,075 1.1
Petroleum 1,900 Pennzoil Company 76,947 106,875 1.0
2,700 Unocal Corp. 90,873 110,025 1.0
----------- ----------- ------
167,820 216,900 2.0
Pharmaceuticals 1,500 Merck & Co., Inc. 51,278 124,500 1.1
Railroads 1,000 Burlington Northern, Inc. 81,076 89,875 0.8
Real Estate 2,300 Prentiss Properties Trust 47,045 51,462 0.5
Investment Trusts
Retail Stores 2,500 Sears, Roebuck & Co. 99,379 124,375 1.1
2,700 Thrifty Payless Holdings, Inc. (Class B) 52,358 69,187 0.6
3,500 Toys 'R' Us, Inc. 109,143 120,750 1.1
----------- ----------- ------
260,880 314,312 2.8
Scientific 1,500 Fisher Scientific International, Inc. 47,028 68,625 0.6
Equipment
<PAGE>
Software--Computer 2,400 BMC Software, Inc. 89,601 104,400 0.9
Steel 2,800 AK Steel Holding Corp. 115,713 106,750 1.0
Telecommunications 4,000 Airtouch Communications, Inc. 114,486 102,500 0.9
1,700 Bell Atlantic Corp. 83,827 106,887 1.0
----------- ----------- ------
198,313 209,387 1.9
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<CAPTION>
Percent of
COUNTRY Industries Shares Held Common Stocks Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
United States Tobacco 750 Philip Morris Companies, Inc. $ 74,532 $ 77,344 0.7%
(concluded)
Travel & Lodging 3,200 Carnival Corporation (Class A) 90,487 101,200 0.9
Utilities-- 4,700 Edison International 87,739 93,412 0.8
Electric
Total Common Stocks in the
United States 4,179,939 5,048,434 45.4
Total Investments in Common Stocks 8,038,126 9,250,693 83.2
Face Amount Fixed-Income Securities
Canada Foreign C$ 400,000 Canadian Government Bonds, 8% due 326,779 344,935 3.1
Government 6/01/2027
Obligations
Total Fixed-Income Securities in Canada 326,779 344,935 3.1
Denmark Foreign Dkr 800,000 Danish Government Bonds, 8% due 3/15/2006 146,515 148,804 1.3
Government
Obligations
Total Fixed-Income Securities in Denmark 146,515 148,804 1.3
Germany Foreign DM 120,000 Bundesrepublik Deutschland, 7.125% 83,338 86,267 0.8
Government due 12/20/2002
Obligations
Total Fixed-Income Securities in Germany 83,338 86,267 0.8
<PAGE>
Italy Foreign Lit 410,000,000 Buoni Poliennali del Tesoro, 8.50% 290,468 288,098 2.6
Government due 1/01/2004
Obligations
Total Fixed-Income Securities in Italy 290,468 288,098 2.6
Sweden Foreign Government of Sweden:
Government Skr 600,000 10.25% due 5/05/2000 101,118 102,017 0.9
Obligations 1,400,000 8% due 8/15/2007 219,773 223,658 2.0
Total Fixed-Income Securities in Sweden 320,891 325,675 2.9
United Foreign Pound 135,000 United Kingdom Treasury Gilt, 7.50% 214,806 229,248 2.1
Kingdom Government Sterling due 12/07/2006
Obligations
Total Fixed-Income Securities in the
United Kingdom 214,806 229,248 2.1
United US Government US Treasury Notes:
States & Agency US$ 175,000 5% due 1/31/1998 173,455 174,015 1.6
Obligations 100,000 7% due 7/15/2006 103,389 106,594 0.9
Total Fixed-Income Securities in the
United States 276,844 280,609 2.5
Total Investments in Fixed-Income
Securities 1,659,641 1,703,636 15.3
Short-Term Securities
United Commercial Paper* 400,000 General Electric Capital Corp., 5.70%
States due 12/02/1996 399,873 399,873 3.6
Total Investments in Short-Term
Securities 399,873 399,873 3.6
Total Investments $10,097,640 11,354,202 102.1
===========
Unrealized Appreciation on Forward Foreign Exchange Contracts** 41,722 0.4
Liabilities in Excess of Other Assets (273,371) (2.5)
----------- ------
Net Assets $11,122,553 100.0%
=========== ======
Net Asset Value: Class A--Based on net assets of $1,469,203 and 130,428 shares
outstanding $ 11.26
===========
Class B--Based on net assets of $8,489,852 and 758,628 shares
outstanding $ 11.19
===========
Class C--Based on net assets of $586,807 and 52,656 shares
outstanding $ 11.14
===========
Class D--Based on net assets of $576,691 and 51,336 shares
outstanding $ 11.23
===========
<PAGE>
<FN>
(a)American Depositary Receipts (ADR).
(b)Global Depositary Receipts (GDR).
*Commercial Paper is traded on a discount basis; the interest rates
shown are the discount rates paid at the time of purchase by the
Fund.
**Forward foreign exchange contracts as of November 30, 1996 were as
follows:
Foreign Currency Sold Expiration Date Unrealized Appreciation
Chf 85,000 December 1996 $ 2,384
DM 294,719 December 1996 2,688
DM 525,000 February 1997 7,481
Frf 1,000,000 December 1996 3,702
YEN 100,940,000 January 1997 25,467
Total Unrealized Appreciation--Net on Forward Foreign
Exchange Contracts (US$Commitment--$1,724,771) $41,722
=======
</TABLE>
EQUITY PORTFOLIO CHANGES
For the Quarter Ended November 30, 1996
Additions
Airtouch Communications, Inc.
*Allegiance Corp.
AlliedSignal, Inc.
Bridgestone Corporation
Brunswick Corporation
COMPAQ Computer Corp.
Color Line ASA
Edison International
FMC Corporation
Grupo Financiero Inbursa, S.A. de C.V. (ADR)
Gulfstream Aerospace Corporation
Health Management Associates, Inc. (Class A)
Oakwood Homes Corporation
Prentiss Properties Trust
Puma AG
*Sabre Group
Scor S.A.
Thrifty Payless Holdings, Inc. (Class B)
Toys 'R' Us, Inc.
Vodafone Group PLC
<PAGE>
Deletions
AT&T Corp.
*Allegiance Corp.
AutoZone, Inc.
Baxter International, Inc.
Boeing Co. (The)
Cincinnati Milacron, Inc.
The Coca-Cola Company
Conrail, Inc.
Delta Air Lines, Inc.
Electronic Data Systems Corp.
Intel Corp.
Invercorporacion S.A. 'A-1' (ADR)
Lexmark International Group, Inc. (Class A)
The Limited, Inc.
Lucent Technologies, Inc.
Microsoft Corp.
National Processing, Inc.
Procter & Gamble Company (The)
*Sabre Group
Sun Microsystems, Inc.
[FN]
*Added and deleted in the same quarter.
