MERRILL LYNCH
ASSET GROWTH
FUND, INC.
FUND LOGO
Quarterly Report
November 30, 1998
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
Thomas R. Robinson, Senior Vice President and
Portfolio Manager
Donald C. Burke, Vice President
Gerald M. Richard, Treasurer
Barbara G. Fraser, Secretary
Custodian
The Chase Manhattan Bank
4 MetroTech Center, 18th Floor
Brooklyn, NY 11245
Transfer Agent
Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800)637-3863
Investing in emerging market securities involves a number of risk
factors and special considerations, including restrictions on
foreign investments and on repatriation of capital invested in
emerging markets, currency fluctuations, and potential price
volatility and less liquidity of securities traded in emerging
markets. In addition, there may be less publicly available
information about the issuers of securities, and such issuers may
not be subject to accounting, auditing and financial reporting
standards and requirements comparable to those to which US companies
are subject. Therefore, the Fund is designed as a long-term
investment for investors capable of assuming the risks of investing
in emerging markets. The Fund should be considered as a vehicle for
diversification and not as a complete investment program. Please
refer to the propectus for details.
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.
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, 1998
Breakdown of
Stocks & Fixed-Income Percent of
Securities by Country Net Assets++
United States 55.0%
Germany 7.9
United Kingdom 7.8
France 4.4
Sweden 3.4
Japan 3.1
Spain 2.6
Finland 1.8
Italy 1.7
Switzerland 1.7
Netherlands 1.2
Canada 1.1
Ireland 0.5
Norway 0.2
Austria 0.1
Denmark 0.1
Singapore 0.1
------
Total 92.7%
======
[FN]
++Total may not equal 100%.
Ten Largest Industries Percent of
(Equity Investments) Net Assets
Telecommunications 6.0%
Banking 5.2
Insurance 4.6
Pharmaceuticals 3.1
Retail--Stores 2.8
Broadcasting/Cable 2.1
Beverages 2.0
Computer Services/Software 2.0
Electronics 2.0
Automobile Parts 1.8
Country Percent
Ten Largest Holdings of of Net
(Equity Investments) Origin Assets
Bristol-Myers Squibb
Company US 1.3%
Premier Parks, Inc. US 1.3
Rite Aid Corporation US 1.2
MCI WorldCom, Inc. US 1.2
GreenPoint
Financial Corp. US 1.2
COMPAQ Computer
Corporation US 1.1
Tele-Communications
TCI Ventures Group
(Class A) US 1.1
Cisco Systems, Inc. US 1.1
Diageo PLC UK 1.0
Tele-Communications,
Inc. (Class A) US 1.0
Merrill Lynch Asset Growth Fund, Inc., November 30, 1998
DEAR SHAREHOLDER
During the quarter ended November 30, 1998, stock and bond market
volatility reflected shifting investor perceptions regarding global
economic prospects. Early in the period, the deteriorating outlook
for corporate profits amid signs of a weakening economy led to lower
share prices in world stock markets. At the same time, the uncertain
economic picture and the resulting flight to quality by investors
pushed the 30-year US Treasury bond to record low yields. Yields
also declined in sovereign bond markets of other major
industrialized countries. In contrast, corporate bonds, mortgage-
backed securities and emerging markets debt underperformed US
Treasury securities by a wide margin. Although a one-quarter point
cut in the Federal Funds rate in late September did not restore
investor confidence, an unexpected one-quarter point cut in October
sparked a rally in stock and bond prices. The rally was fueled
further by another easing of monetary policy in mid-November.
However, by November quarter-end, share prices had resumed their
decline amidst renewed investor uncertainties regarding global
economic prospects.
As long as worldwide economic conditions appear fragile, it is
likely that stock and bond market volatility will continue. For the
overall global economy, the deepening recession in Japan is of great
concern as well as the difficulties in emerging economies such as
Russia and Brazil. The announcements of banking system reform and
fiscal stimulus packages in Japan provided some encouragement to
investors, but the effectiveness of these programs remains to be
seen. A multilateral aid package to Brazil initially bolstered
investor confidence regarding the prospects for this country and
other emerging markets. Further progress in easing strains within
the global financial system, combined with continued monetary easing
on the part of the Federal Reserve Board, would likely provide an
important element of stability to the volatile investment
environment.
Portfolio Matters
As of November 30, 1998, the asset allocation for Merrill Lynch
Asset Growth Fund, Inc. was: US stocks, 49% of net assets; foreign
stocks, 29%; US bonds, 6%; foreign bonds, 9%; and cash and cash
reserves, 7%.
During the quarter ended November 30, 1998, a shift toward an
increasingly accommodative monetary policy by the Federal Reserve
Board led us to become more positive regarding US equities.
Consequently, we increased the Fund's allocation to US common stocks
from 28% of net assets to 49% of net assets during the three months
ended November 30, 1998. In increasing our US equity exposure, we
emphasized the shares of companies that we believed offered a high
degree of earnings visibility through 1999 despite an expected
slowdown in economic activity. New positions in the Fund included
commitments in the technology sector, such as Microsoft Corporation,
Motorola, Inc. and Micron Technology, Inc.; in utilities, as
exemplified by Texas Utilities Company and Public Service Enterprise
Group Incorporated; and in healthcare through Johnson & Johnson. As
of November 30, 1998, consumer staples, technology and financials
represented the largest sector weightings among our US equity
commitments, while we reduced the Fund's weighting in consumer
cyclicals.
During the three-month period ended November 30, 1998, we further
reduced the Fund's foreign equity weighting from 32% of net assets
to 29% while continuing to add to European equity investments. As is
the case with our US strategy, our focus remains on companies with
predictable earnings streams, where the risk of earnings dis-
appointments seems low despite slower economic growth. In recent
months, we increased our representation in such industries as
telecommunications, telecommunications equipment, food and
healthcare. Our commitment to Japanese equities remains under-
weighted relative to the Morgan Stanley EAFE Index. At present,
we continue to be cautious toward emerging markets, which led us to
eliminate our remaining positions in Latin America and Asia
(excluding Japan) prior to August 31, 1998.
During the three months ended November 30, 1998, we significantly
reduced the Fund's bond representation. We cut back our foreign bond
weighting from 22% of net assets to 9%, and our US bond commitment
was reduced from 15% of net assets to 6% during the quarter. In the
United States, we took advantage of a rally in fixed-income markets
to reduce the average duration of our bond holdings from 8.0 years
to 6.3 years during the three months ended November 30, 1998. Among
the Fund's foreign bond holdings, we eliminated our commitment to
Swedish bonds, limiting our foreign bond commitments to Germany and
the United Kingdom. We continued to hedge our UK stock and bond
positions back into US dollars as we look for weakness in the
British pound in the coming months. However, we have eliminated our
hedges on Continental European equities and bonds as well as
Japanese equities because we believe an easier monetary policy by
the Federal Reserve Board could lead to near-term weakness in the US
dollar compared to these currencies.
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
Senior Vice President and
Portfolio Manager
January 5, 1999
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. Figures shown in the "Recent Performance
Results" and "Average Annual Total Return" tables assume
reinvestment of all dividends and capital gains distributions at net
asset value on the ex-dividend date. 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.
Merrill Lynch Asset Growth Fund, Inc., November 30, 1998
PERFORMANCE DATA (concluded)
Average Annual
Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 9/30/98 -10.87% -15.55%
Inception (9/02/94)
through 9/30/98 + 4.20 + 2.83
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 9/30/98 -11.68% -14.66%
Inception (9/02/94)
through 9/30/98 + 3.15 + 3.15
[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 9/30/98 -11.79% -12.54%
Inception (10/21/94)
through 9/30/98 + 3.63 + 3.63
[FN]
*Maximum contingent deferred sales charge is 1% and is reduced to 0%
after 1 year.
**Assuming payment of applicable contingent deferred sales charge.
% Return Without % Return With
Sales Charge Sales Charge**
Class D Shares*
Year Ended 9/30/98 -11.04% -15.71%
Inception (10/21/94)
through 9/30/98 + 4.47 + 3.05
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
<TABLE>
Recent
Performance
Results*
<CAPTION>
12 Month 3 Month Since Inception
Total Return Total Return Total Return
<S> <C> <C> <C>
ML Asset Growth Fund, Inc. Class A Shares +1.92% +5.96% +25.56%
ML Asset Growth Fund, Inc. Class B Shares +0.89 +5.68 +20.20
ML Asset Growth Fund, Inc. Class C Shares +0.83 +5.71 +21.94
ML Asset Growth Fund, Inc. Class D Shares +1.61 +5.83 +26.00
<FN>
*Investment results shown do not reflect sales charges; results
would be lower if a sales charge was included. Total investment
returns are based on changes in net asset values for the periods
shown, and assume reinvestment of all dividends and capital gains
distributions at net asset value on the ex-dividend date. The Fund's
since inception periods are Class A & Class B Shares, from 9/02/94
to 11/30/98 and Class C & Class D Shares, from 10/21/94 to 11/30/98.
</TABLE>
<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>
Austria Paper Products 200 Mayr-Melnhof Karton AG $ 10,117 $ 9,199 0.1%
Total Common Stocks in Austria 10,117 9,199 0.1
Canada Automobile Parts 400 Magna International, Inc. (Class A) 27,077 26,625 0.3
Telecommunications 2,700 Teleglobe Inc. 73,086 73,406 0.8
Total Common Stocks in Canada 100,163 100,031 1.1
Denmark Commercial Services 100 ISS International Service
System A/S (Class B) 6,525 6,615 0.1
Total Common Stocks in Denmark 6,525 6,615 0.1
Finland Communications Equipment 300 Nokia Oyj (Class A) 27,543 29,361 0.3
Diversified 1,900 Amer Group Ltd. 33,365 20,702 0.2
Insurance 900 Sampro Insurance Company PLC (Class A) 41,729 31,135 0.4
Paper & Forest Products 400 UPM-Kymmene Oyj 8,931 10,507 0.1
Pharmaceuticals 920 Orion-Yhtymae OY (Class B) 23,989 21,212 0.3
Real Estate 5,990 Sponda Oyj 42,205 39,626 0.5
Investment Trusts
Total Common Stocks in Finland 177,762 152,543 1.8
France Electronics 700 Thomson-CSF S.A. 26,480 26,421 0.3
Foods 117 Groupe Danone 30,717 34,255 0.4
Insurance 600 AXA-UAP 67,781 77,781 0.9
Oil--Related 500 Elf Aquitaine S.A. 60,672 62,524 0.7
Reinsurance 900 SCOR S.A. 35,728 57,700 0.7
Semiconductor Capital 1,100 STMicroelectronics N.V.
Equipment (NY Registered Shares) 78,379 73,838 0.8
Telecommunications 300 France Telecom S.A. 21,058 20,900 0.2
Utilities--Water 150 Vivendi S.A. 30,103 34,022 0.4
Total Common Stocks in France 350,918 387,441 4.4
Germany Automobile 270 DaimlerChrysler AG 21,121 25,443 0.3
Chemicals 600 Henkel KGaA (Preferred) 25,574 50,932 0.6
Total Common Stocks in Germany 46,695 76,375 0.9
Ireland Banking 2,100 Bank of Ireland 44,433 43,610 0.5
Total Common Stocks in Ireland 44,433 43,610 0.5
Italy Banking 41,000 Banca di Roma S.p.A. 89,648 71,158 0.8
Publishing 2,800 Mondadori (Arnoldo) Editore S.p.A. 23,578 35,297 0.4
Telecommunications 5,600 Telecom Italia S.p.A. 42,473 45,518 0.5
Total Common Stocks in Italy 155,699 151,973 1.7
Japan Consumer--Electronics 2,000 Matsushita Electric Industrial
Company, Ltd. 31,700 32,185 0.4
Cosmetics/Toiletries 1,000 KAO Corp. 19,901 18,937 0.2
Diversified Companies 1,000 Olympus Optical Co. Ltd. 11,041 10,956 0.1
Electrical Equipment 2,000 Fujikura Ltd. 11,583 11,167 0.1
Electronics 1,000 Fujitsu Ltd. 11,369 11,557 0.1
Insurance 3,000 Tokio Marine & Fire Insurance
Co., Ltd. 30,838 33,891 0.4
Machine Tools & 3,000 Minebea Co., Ltd. 31,399 32,258 0.4
Machinery
Merchandising 1,000 Marui Co. Ltd. 19,189 17,840 0.2
Photography 1,000 Fuji Photo Film Co., Ltd. 37,194 37,386 0.4
</TABLE>
Merrill Lynch Asset Growth Fund, Inc., November 30, 1998
<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>
Japan Telecommunications 10 NTT Mobile Communication
(concluded) Network, Inc. $ 32,998 $ 38,199 0.4%
4 Nippon Telegraph & Telephone
Corporation (NTT) 34,178 29,908 0.4
----------- ----------- ------
67,176 68,107 0.8
Total Common Stocks in Japan 271,390 274,284 3.1
Netherlands Broadcasting & Publishing 300 Wolters Kluwer N.V. 45,852 57,359 0.7
Multi-Industry 600 Unilever N.V. 43,041 47,052 0.5
Total Common Stocks in the Netherlands 88,893 104,411 1.2
Norway Computer Software 1,300 Merkantildata ASA 9,939 14,199 0.2
Total Common Stocks in Norway 9,939 14,199 0.2
Singapore Electronics Components 90 Flextronics International Ltd. 6,062 5,985 0.1
Total Common Stocks in Singapore 6,062 5,985 0.1
Spain Building Materials 3,100 Uralita, S.A. 43,535 34,377 0.4
Real Estate 1,400 Metrovacesa, S.A. 43,683 38,643 0.4
Telecommunications 1,200 Telefonica, S.A. 52,293 56,567 0.7
Utilities--Electric 1,800 Endesa, S.A. 47,169 47,118 0.5
Venture Capital 3,900 Dinamia Capital Privado-Sociedad
de Capital Riesgo, S.A. 71,130 48,808 0.6
Total Common Stocks in Spain 257,810 225,513 2.6
Sweden Auto & Truck 800 Autoliv, Inc. 26,701 28,950 0.3
Automobile Parts 2,500 Haldex AB 44,179 30,054 0.3
Banking 900 ForeningsSparbanken AB 11,192 25,301 0.3
4,100 Nordbanken Holding AB 27,195 26,034 0.3
----------- ----------- ------
38,387 51,335 0.6
Diversified Companies 700 Custos AB (Class B) 18,434 13,809 0.2
Investment Management 1,700 Bure Investment AB 14,475 23,685 0.3
Laser Components 1,600 Spectra-Physics AB (Class A) 48,844 19,530 0.2
Real Estate 2,200 Castellum AB 22,897 20,615 0.2
Investment Trusts 3,000 Fastighets AB Tornet 48,453 39,208 0.5
----------- ----------- ------
71,350 59,823 0.7
Telecommunications 2,600 Telefonaktiebolaget LM
Ericsson (ADR)(a) 66,549 71,663 0.8
Total Common Stocks in Sweden 328,919 298,849 3.4
Switzerland Drugs 24 Novartis AG (Registered Shares) 44,314 45,211 0.5
Foods/Food Processing 15 Nestle S.A. (Registered Shares) 30,864 31,277 0.4
Merchandising 75 Valora Holding AG 20,531 19,683 0.2
Telephone Service 160 Swisscom AG (Registered) 42,379 54,070 0.6
Total Common Stocks in Switzerland 138,088 150,241 1.7
United Aerospace & Defense 4,300 British Aerospace PLC 34,926 36,969 0.4
Kingdom
Automobile Parts 7,100 LucasVarity PLC 22,298 24,370 0.3
Banking 2,200 Bank of Scotland 23,500 24,324 0.3
800 HSBC Holdings PLC 20,723 21,651 0.3
1,600 Lloyds TSB Group PLC 19,882 22,245 0.3
1,400 National Westminster Bank PLC
(Ordinary) 24,272 25,552 0.3
----------- ----------- ------
88,377 93,772 1.2
Beverages 8,208 Diageo PLC 92,620 91,969 1.0
Diversified 8,000 Billiton PLC 19,324 17,492 0.2
Drugs 1,200 Zeneca Group PLC 48,235 49,902 0.6
Foods 4,900 Devro PLC 32,782 13,180 0.1
Metal & Mining 1,600 Rio Tinto PLC (Registered) 19,739 18,746 0.2
Oil--Integrated 1,200 Shell Transport & Trading
Company (ADR)(a) 44,090 43,575 0.5
Oil--Related 1,400 British Petroleum Company PLC 20,028 21,832 0.2
Pharmaceuticals 1,400 Glaxo Wellcome PLC 44,736 44,288 0.5
Travel & Lodging 32,000 Thomson Travel Group PLC 96,643 77,097 0.9
Total Common Stocks in the
United Kingdom 563,798 533,192 6.1
United Aerospace & Defense 1,800 GenCorp, Inc. 47,060 44,325 0.5
States 400 United Technologies Corporation 33,836 42,875 0.5
----------- ----------- ------
80,896 87,200 1.0
Airlines 415 US Airways Group, Inc. 20,275 21,580 0.2
Automobiles 500 General Motors Corporation 35,263 35,000 0.4
Automobile Parts 1,450 Federal-Mogul Corporation 68,819 82,288 0.9
Automobile Rental 1,700 Avis Rent A Car, Inc. 40,763 35,806 0.4
& Leasing 650 The Hertz Corporation (Class A) 25,751 23,888 0.3
----------- ----------- ------
66,514 59,694 0.7
Banking 1,550 The Bank of New York Company, Inc. 34,617 53,088 0.6
615 BankAmerica Corporation 34,298 40,090 0.5
1,450 First Union Corporation 76,058 88,088 1.0
----------- ----------- ------
144,973 181,266 2.1
Banking & Financial 1,060 Mellon Bank Corporation 66,458 66,714 0.8
Beverages 2,150 PepsiCo, Inc. 77,925 83,178 1.0
Broadcast--Media 400 Fox Entertainment Group, Inc. (Class A) 9,000 9,450 0.1
Broadcasting/Cable 2,150 Tele-Communications, Inc. (Class A) 59,593 90,703 1.0
4,900 Tele-Communications TCI Ventures
Group (Class A) 60,407 96,775 1.1
----------- ----------- ------
120,000 187,478 2.1
Chemicals 500 DuPont (E.I.) de Nemours and Company 31,094 29,375 0.3
1,400 Morton International, Inc. 40,315 41,213 0.5
----------- ----------- ------
71,409 70,588 0.8
Computer Services/ 1,250 Cisco Systems, Inc. 61,939 94,219 1.1
Software 500 International Business
Machines Corporation 59,324 82,500 0.9
----------- ----------- ------
121,263 176,719 2.0
</TABLE>
Merrill Lynch Asset Growth Fund, Inc., November 30, 1998
<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>
United Computers 3,000 COMPAQ Computer Corporation $ 103,778 $ 97,500 1.1%
States 300 EMC Corporation 21,273 21,750 0.3
(concluded) ----------- ----------- ------
125,051 119,250 1.4
Consumer--Electronics 1,150 Dell Computer Corporation 72,321 69,862 0.8
Consumer--Products 1,100 The Black & Decker Corporation 45,983 59,606 0.7
3,250 The Dial Corporation 71,003 85,313 1.0
----------- ----------- ------
116,986 144,919 1.7
Containers 1,200 Owens-Illinois, Inc. 39,902 38,550 0.4
Cruise Lines 1,410 Royal Caribbean Cruises Ltd. 35,747 42,829 0.5
Electrical Equipment 1,200 PECO Energy Company 42,344 48,150 0.6
Electronics 500 General Electric Company 40,701 45,250 0.5
550 Intel Corporation 59,910 59,159 0.7
750 Micron Technology, Inc. 29,330 30,984 0.4
----------- ----------- ------
129,941 135,393 1.6
Entertainment 4,150 Premier Parks, Inc. 108,025 112,569 1.3
Financial Services 250 Associates First Capital
Corporation (Class A) 17,522 19,469 0.2
2,400 Heller Financial, Inc. 64,304 62,850 0.7
----------- ----------- ------
81,826 82,319 0.9
Food Distribution 850 Nabisco Holdings Corp. (Class A) 31,144 33,894 0.4
Foods 1,100 ConAgra, Inc. 34,085 34,581 0.4
1,510 Keebler Foods Company 42,826 50,868 0.6
----------- ----------- ------
76,911 85,449 1.0
Hotels 400 3Com Corp. 15,830 15,475 0.2
Insurance 850 Allmerica Financial Corporation 51,155 46,909 0.5
1,350 The Equitable Companies Incorporated 70,865 74,588 0.9
840 Providian Financial Corporation 57,358 77,123 0.9
1,050 UNUM Corporation 42,837 56,569 0.6
----------- ----------- ------
222,215 255,189 2.9
Machinery 400 Case Corporation 10,399 9,700 0.1
1,700 Ingersoll-Rand Company 63,386 79,581 0.9
----------- ----------- ------
73,785 89,281 1.0
Manufacturing 1,300 Tyco International Ltd. 70,558 85,556 1.0
Medical 950 Beckman Coulter, Inc. 54,941 45,837 0.5
Medical Services 2,250 HEALTHSOUTH Corporation 41,618 30,234 0.3
Medical Technology 550 Johnson & Johnson 44,104 44,688 0.5
Metals 300 Aluminum Co. of America 23,406 22,237 0.3
Natural Gas 1,450 Enron Corporation 64,808 76,216 0.9
Oil--Integrated 600 Mobil Corporation 46,627 51,713 0.6
Oil Services 660 Schlumberger Ltd. 40,923 29,494 0.3
Paper & Forest Products 520 Kimberly-Clark Corporation 24,307 27,365 0.3
Petroleum 1,350 Unocal Corporation 47,807 45,731 0.5
Pharmaceuticals 950 Bristol-Myers Squibb Company 96,481 116,434 1.3
1,200 Warner-Lambert Company 65,387 90,600 1.0
----------- ----------- ------
161,868 207,034 2.3
Printing & Publishing 2,100 World Color Press, Inc. 62,467 62,475 0.7
Radio & Television 2,750 Capstar Broadcasting
Corporation (Class A) 52,043 49,156 0.6
Railroads 2,300 Burlington Northern Santa Fe Corp. 66,527 78,200 0.9
Retail--Specialty 1,800 Lowe's Companies, Inc. 65,096 76,050 0.9
Retail--Stores 2,300 Rite Aid Corporation 61,554 106,663 1.2
1,250 Safeway, Inc. 51,573 66,016 0.8
950 Wal-Mart Stores, Inc. 47,602 71,547 0.8
----------- ----------- ------
160,729 244,226 2.8
Savings & Loan 2,650 GreenPoint Financial Corp. 99,492 100,866 1.2
Associations
Scientific Equipment 750 Millipore Corporation 17,134 21,094 0.2
Semiconductors 600 Motorola, Inc. 28,777 37,200 0.4
Services 740 Quintiles Transnational Corp. 34,942 36,908 0.4
Software--Computer 1,100 BMC Software, Inc. 38,708 56,100 0.6
150 Microsoft Corporation 16,505 18,300 0.2
----------- ----------- ------
55,213 74,400 0.8
Steel 950 Bethlehem Steel Corporation 9,795 7,837 0.1
300 USX-U.S. Steel Group 8,204 7,331 0.1
----------- ----------- ------
17,999 15,168 0.2
Telecommunications 1,450 GTE Corporation 77,066 89,900 1.0
1,800 MCI WorldCom, Inc. 70,097 106,088 1.2
----------- ----------- ------
147,163 195,988 2.2
Utilities-- 1,550 Ameritech Corporation 76,886 83,894 1.0
Communication
Utilities--Electric 950 Public Service Enterprise
Group Incorporated 36,904 37,050 0.4
850 Texas Utilities Company 38,021 37,878 0.4
----------- ----------- ------
74,925 74,928 0.8
Utilities--Gas 1,950 El Paso Energy Corporation 56,236 66,544 0.8
Waste Management 1,200 Waste Management, Inc. 53,711 51,450 0.6
Total Common Stocks in the
United States 3,745,130 4,268,936 48.8
Total Investments in
Common Stocks 6,302,341 6,803,397 77.8
Face
Amount Fixed-Income Securities
Germany Foreign Bundesrepublik Deutschland:
Government DM 165,000 6% due 7/04/2007 96,503 111,698 1.3
Obligations 800,000 4.75% due 7/04/2008 525,347 502,242 5.7
Total Fixed-Income Securities in
Germany 621,850 613,940 7.0
</TABLE>
Merrill Lynch Asset Growth Fund, Inc., November 30, 1998
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<CAPTION>
Face Percent of
COUNTRY Amount Fixed-Income Securities Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
United Foreign Pound 75,000 UK Treasury Gilt, 7.25% due
Kingdom Government Sterling 12/07/2007 $ 124,141 $ 147,243 1.7%
Obligations
Total Fixed-Income Securities
in the United Kingdom 124,141 147,243 1.7
United US Government & Federal National Mortgage Association:
States Agency US$ 180,000 5.625% due 3/15/2001 180,639 182,869 2.1
Obligations 80,000 5.75% due 4/15/2003 80,594 82,413 0.9
150,000 5.75% due 2/15/2008 149,414 154,476 1.8
100,000 US Treasury Notes, 6.625% due
2/15/2027 113,609 119,000 1.4
Total Fixed-Income Securities
in the United States 524,256 538,758 6.2
Total Investments in
Fixed-Income Securities 1,270,247 1,299,941 14.9
Short-Term Securities
United US Government US$ 466,000 Federal Home Loan Bank, 5.15%
States Agency due 12/01/1998 466,000 466,000 5.3
Obligations*
Total Investments in
Short-Term Securities 466,000 466,000 5.3
Total Investments $ 8,038,588 8,569,338 98.0
===========
Unrealized Appreciation on Forward Foreign Exchange Contracts** 11,626 0.1
Other Assets Less Liabilities 162,407 1.9
----------- ------
Net Assets $ 8,743,371 100.0%
=========== ======
Net Asset Value: Class A--Based on net assets of $2,136,508 and
210,719 shares outstanding $ 10.14
===========
Class B--Based on net assets of $5,868,310 and
583,898 shares outstanding $ 10.05
===========
Class C--Based on net assets of $476,066 and
47,646 shares outstanding $ 9.99
===========
Class D--Based on net assets of $262,487 and
25,802 shares outstanding $ 10.17
===========
<FN>
(a)American Depositary Receipts (ADR).
*Certain USGovernment Agency Obligations are traded on a discount
basis; the interest rates shown reflect the discount rate paid at
the time of purchase by the Fund.
**Forward foreign exchange contracts as of November 30, 1998 were as
follows:
Unrealized
Foreign Expiration Appreciation
Currency Sold Date (Depreciation)
C$ 150,000 December 1998 $(1,525)
Pound Sterling 240,000 December 1998 11,599
Pound Sterling 150,000 January 1999 1,552
-------
Total Unrealized Appreciation on Forward
Foreign Exchange Contracts--Net
(US$Commitment--$752,443) $11,626
=======
EQUITY PORTFOLIO CHANGES
For the Quarter Ended November 30, 1998
Additions
3Com Corp.
Aluminum Co. of America
Ameritech Corporation
Associates First Capital Corporation
(Class A)
Bank of Scotland
Bethlehem Steel Corporation
Billiton PLC
British Petroleum Company PLC
Case Corporation
ConAgra, Inc.
DaimlerChrysler AG
Dell Computer Corporation
DuPont (E.I.) de Nemours and Company
EMC Corporation
Endesa, S.A.
Flextronics International Ltd.
Fox Entertainment Group, Inc. (Class A)
France Telecom S.A.
Fuji Photo Film Co., Ltd.
Fujikura Ltd.
Fujitsu Ltd.
GTE Corporation
General Motors Corporation
Glaxo Wellcome PLC
Groupe Danone
HSBC Holdings PLC
ISS International Service System A/S
(Class B)
Intel Corporation
Johnson & Johnson
KAO Corp.
Kimberly-Clark Corporation
Lloyds TSB Group PLC
Marui Co. Ltd.
Mayr-Melnhof Karton AG
Mellon Bank Corporation
Merkantildata ASA
Micron Technology, Inc.
Microsoft Corporation
Mobil Corporation
Morton International, Inc.
Motorola, Inc.
NTT Mobile Communication Network, Inc.
Nabisco Holdings Corp. (Class A)
National Westminster Bank PLC (Ordinary)
Nestle S.A. (Registered Shares)
Nippon Telegraph & Telephone Corporation
(NTT)
Nokia Oyj (Class A)
Novartis AG (Registered Shares)
Olympus Optical Co. Ltd.
PECO Energy Company
Public Service Enterprise Group
Incorporated
Quintiles Transnational Corp.
Rio Tinto PLC (Registered)
Shell Transport & Trading Company (ADR)
Swisscom AG (Registered)
Telecom Italia S.p.A.
Telefonica, S.A.
Texas Utilities Company
UPM-Kymmene Oyj
USX-U.S. Steel Group
Unilever N.V.
United Technologies Corporation
Waste Management, Inc.
Zeneca Group PLC
Deletions
Alstom
Bank of Tokyo-Mitsubishi, Ltd. (The)
Bayerische Vereinsbank AG
Carnival Corporation (Class A)
Chancellor Media Corp.
Columbia/HCA Healthcare Corp.
Computer Associates International, Inc.
Consolidated Stores Corporation
Custos AB (Class A)
Danieli & C. Officine Meccaniche S.p.A.
Finnlines OY
The Gillette Company
Great Lakes Chemical Corporation
Ito-Yokado Co., Ltd.
Makino Milling Machine Co., Ltd.
Oversea-Chinese Banking Corp. Ltd.
Perstorp AB (Class B)
Schindler Holding AG
Sears, Roebuck and Co.
Sony Corporation
Starwood Hotels & Resorts
Texas Instruments Inc.
Tokyo Electron Limited.
Travelers Group, Inc.
Union Bank of Switzerland
USA Waste Services, Inc.
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