-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, FS0hjP/RNzVSJWzFO6f3vKhT7bdBGngCWoaV7RVfHGq9uV5hcti753vwrSHmJaPp Sx6ICwCeF8jeKXb1Nf9OIQ== 0000900092-95-000040.txt : 19950518 0000900092-95-000040.hdr.sgml : 19950518 ACCESSION NUMBER: 0000900092-95-000040 CONFORMED SUBMISSION TYPE: N-30B-2 PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19941231 FILED AS OF DATE: 19950217 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MERRILL LYNCH BALANCED FD FOR INV & RET CENTRAL INDEX KEY: 0000746637 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: MD FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: N-30B-2 SEC ACT: 1940 Act SEC FILE NUMBER: 811-04035 FILM NUMBER: 95513660 BUSINESS ADDRESS: STREET 1: P O BOX 9011 CITY: PRINCETON STATE: NJ ZIP: 08543 BUSINESS PHONE: 6092823319 FORMER COMPANY: FORMER CONFORMED NAME: MERRILL LYNCH RETIREMENT BENEFIT INVESTMENT PROG INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: MERRILL LYNCH BALANCED FUND FOR INVESTMENT & RETIREMENT DATE OF NAME CHANGE: 19910529 FORMER COMPANY: FORMER CONFORMED NAME: MERRILL LYNCH RETIREMENT BENEFIT INVESTMENT PROGRAM INC DATE OF NAME CHANGE: 19910501 N-30B-2 1 QUARTERLY REPORT MERRILL LYNCH BALANCED FUND For Investment and Retirement FUND LOGO Quarterly Report December 31, 1994 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. Merrill Lynch Retirement Benefit Investment Program, Inc. Full Investment Portfolio d/b/a Merrill Lynch Balanced Fund for Investment and Retirement Box 9011 Princeton, NJ 08543-9011 Merrill Lynch Balanced Fund for Investment and Retirement PORTFOLIO SUMMARY Security Diversification As of December 31, 1994 A pie chart illustrating the following percentages: US Stocks 49.0% International Stocks 9.6% US Bonds 29.0% International Bonds 8.4% Cash 4.0% Sector Allocation As of December 31, 1994 A pie chart illustrating the following percentages: Capital Spending 32.6% Energy 8.3% Transports 1.7% Basic Industry 9.9% Credit Sensitive & Financial Services 7.4% Utilities 11.4% Consumer Cylcicals 11.1% Consumer Staples 17.6% US Domiciled Common Stock S&P Investments Fund 500* After Tax Profit Margin 8.7% 7.1% Yield 1.9% 2.7% Price/Earnings Ratio** 18.0 17.0 Return on Equity 14.9% 15.4% Average Capitalization (in billions) $9.4 $6.6 Earnings Growth Rate (5 yr. average) 23.0% 8.0% [FN] *An unmanaged broad-based index comprised of common stocks. **Based on 1994 earnings estimates. Merrill Lynch Fixed-Income Investments Fund BOAO Index* Duration 5.3 Years 5.1 Years Average Maturity 9.8 Years 9.1 Years Asset Breakdown: US Treasuries/Agencies 67.6% 76.6% Corporates 9.9% 23.4% International Governments 22.5% -- [FN] *An unmanaged market-weighted corporate and Government master bond index reflecting approximately 97% of total outstanding US bonds. Percent of Currency Diversification Net Assets US Dollar 81.9% Australian Dollar 4.0 German Mark 3.6 UK Sterling 2.3 Hong Kong Dollar 1.4 Japanese Yen 1.1 Mexican Peso 1.1 Chilean Peso 1.0 Italian Lira 0.9 Swedish Krona 0.7 Canadian Dollar 0.6 French Franc 0.4 Norwegian Krone 0.4 Danish Krone 0.3 Netherlands Guilder 0.3 Indonesian Rupiah 0.0 Percent of US Equities vs. S&P S&P 500 Index Fund vs. 500* Basic Industry 9.9% 7.6% Capital Spending 32.6 19.7 Conglomerates 0.0 1.3 Consumer Cyclicals 11.1 9.6 Consumer Staples 17.6 26.8 Credit-Sensitive & Financial Services 7.4 10.9 Energy 8.3 10.6 Transports 1.7 1.6 Utilities 11.4 11.8 [FN] *An unmanaged broad-based index comprised of common stocks. DEAR SHAREHOLDER During the December quarter, the Fund's asset mix shifted to favor bonds which increased to 37.5% of net assets from 32.4%, at the expense of cash equivalents which declined from 8.5% to 4.0%. Equities remained little changed at 58.9% of net assets compared with 59.0% at the beginning of the quarter. During the three-month period ended December 31, 1994, two major news items influenced US securities prices. First there was the loud message voters sent to incumbent Congressmen regarding their priorities. The second development was the devaluation and subsequent float of the Mexican peso, which weakened all Latin American equity and bond markets. As the 104th Congress convenes, Congressmen on both sides of the aisle are scrambling to prepare legislation to introduce in early 1995 which will mandate a balanced budget, institute a line item veto for the President on spending bills, overhaul the tax system to include a reduction in the capital gains tax rate, systematically reduce or in some cases eliminate portions of the "entitlements" programs, and "one up" the President who proposed cutting the budget deficit by $60 billion. During the past few months, the Federal Reserve Board raised the Federal Funds rate for a sixth time during 1994 to slow the gross domestic product (GDP) growth rate to less than 3% (which it seems to believe would eliminate the risk of inflation), while the GDP growth rate for the third quarter was 4% and estimates of fourth quarter GDP range upward toward 5%. Rising interest rates in the United States and elsewhere are creating stress in equity markets around the world and forcing the economies whose currencies are tied to the US dollar to pay higher interest rates. This attempt to slow our economy has resulted in a few reductions in estimated profit gains for late 1994 and 1995 despite consumer confidence which suggest continued growth. Disagreement among Federal Open Market Committee members regarding the need to push short-term interest rates still higher, and the unsettling impact the Orange County, California bankruptcy filing had on the bond market kept the Federal Reserve Board from raising short-term interest rates a seventh time in December and recently enabled bond investments to achieve the first solid performance since October 1993. The Mexican currency turmoil could discourage the Federal Reserve Board from aggressively raising short-term interest rates in the short run. It seems possible the bond market rally during the fourth quarter was in part because of a belief that reduced bond market speculation in the future will cut bond price volatility. In addition, the premium built into yield levels would compensate for that volatility. If so, bond yields could seek lower levels without an improved inflation outlook, if only temporarily. Longer term, we expect the simultaneous expansion of developed and developing economies around the world to raise the global demand for capital and keep interest rates higher than normal while major population centers including China, India and Indonesia assimilate their more than two billion inhabitants into the global economy. Investment Strategy The numerous prospective battles looming for Congress, many of which importantly influence the outlook for the securities markets, suggest this is a good time to exercise caution since it is widely recognized that investors do not like uncertainty. Accordingly, we reduced participation in some economically sensitive areas, particularly those which are unlikely to benefit greatly from accelerating growth outside the United States. Investment groups with more defensive properties, including consumer nondurables, energy and communications utilities, now have a greater impact on the portfolio. In the fixed-income sector, we added to our position in an effort to participate more fully in the expected near-term strength. The average duration was extended beyond the unmanaged Merrill Lynch BOAO Index by purchasing zero coupon agencies. After November 30, 1994, we redirected assets away from Mexico prior to the devaluation and subsequent float of the new peso. We used the proceeds to add to our Australian dollar and German Deutschemark positions. Among non-US equities, we closed our positions in Argentina, and reduced the Mexican holdings slightly prior to the Mexican currency devaluation and float in favor of slightly greater participation in Japan and the Netherlands. Investment Outlook It seems likely the Federal Reserve Board will successfully slow the domestic economy this year, probably following further Federal Funds rate increases. Higher short-term interest rates would likely truncate any further bond market strength. Since we are late in the US economic cycle and world growth is accelerating, we will probably view strength in bond prices as an opportunity to reduce the allocation to bonds. Since we expect the US dollar to regain some of the ground lost during 1994 in the foreign exchange market, assets are likely to shift back toward US obligations. In the short run, we may reduce equities as a percent of the total portfolio. Assuming more favorable legislation regarding capital gains and corporate taxes, we may seek an opportunity to assume a slightly less defensive posture later in the year. Since higher worldwide interest rates will probably slow economic growth globally over time, we are likely to become more selective in our non-US equity purchases and may further reduce emerging market participation. In Conclusion We thank you for your continued investment in Merrill Lynch Balanced Fund for Investment and Retirement, and we look forward to continuing to serve your financial needs in 1995 and beyond. Sincerely, (Arthur Zeikel) Arthur Zeikel President (Denis B. Cummings) Denis B. Cummings Vice President and Portfolio Manager January 31, 1995 OFFICERS AND DIRECTORS Arthur Zeikel, President and Director Kenneth S. Axelson, Director Herbert I. London, Director Robert R. Martin, Director Joseph L. May, Director Andre F. Perold, Director Terry K. Glenn, Executive Vice President Bernard J. Durnin, Senior Vice President Donald C. Burke, Vice President Denis B. Cummings, Vice President and Portfolio Manager Gerald M. Richard, Treasurer Jerry Weiss, Secretary Custodian The Chase Manhattan Bank, N.A. 4 Chase MetroTech Center, 18th Floor Brooklyn, New York 11245 Transfer Agent Financial Data Services, Inc. 4800 Deer Lake Drive East Jacksonville, Florida 32246-6484 (800) 637-3863 PERFORMANCE DATA 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 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 the Fund's Class A and Class B Shares are presented in the "Performance Summary" and "Average Annual Total Return" tables on page 5. "Aggregate Total Return" tables for Class C and Class D Shares are also presented on page 5. Data for all of the Fund's shares, including Class C and Class D Shares, are presented in the "Recent Performance Results" table. The "Recent Performance Results" table below shows investment results before the deduction of any sales charges for Class A and Class B Shares for the 12-month and 3-month periods ended December 31, 1994 and for Class C and Class D Shares for the period since inception through December 31, 1994. 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. Recent Performance Results
12 Month 3 Month 12/31/94 9/30/94++ 12/31/93 % Change % Change++ ML Balanced Fund Class A Shares* $10.19 $11.67 $12.33 -10.15%(1) -5.07%(1) ML Balanced Fund Class B Shares* 10.37 11.75 12.44 - 9.50(1) -4.19(1) ML Balanced Fund Class C Shares* 10.27 11.74 -- -- -4.96(1) ML Balanced Fund Class D Shares* 10.18 11.66 -- -- -5.07(1) ML Balanced Fund Class A Shares--Total Return* - 6.55(2) -2.79(3) ML Balanced Fund Class B Shares--Total Return* - 7.38(4) -2.91(5) ML Balanced Fund Class C Shares--Total Return* -- -2.86(6) ML Balanced Fund Class D Shares--Total Return* -- -2.82(7) S&P 500/ML BOAO Blended Index--Total Return** - 0.99 +0.21 *Investment results shown do not reflect sales charges; results shown would be lower if a sales charge was included. **An unmanaged broad-based index comprised of corporate bonds, government bonds and common stocks. Total investment returns for unmanaged indexes are based on estimates. ++Investment results for Class C and Class D Shares are since inception (10/21/94). (1)Percent change includes reinvestment of $0.885 per share capital gains distributions. (2)Percent change includes reinvestment of $0.441 per share ordinary income dividends and $0.885 per share capital gains distributions. (3)Percent change includes reinvestment of $0.265 per share ordinary income dividends and $0.885 per share capital gains distributions. (4)Percent change includes reinvestment of $0.262 per share ordinary income dividends and $0.885 per share capital gains distributions. (5)Percent change includes reinvestment of $0.149 per share ordinary income dividends and $0.885 per share capital gains distributions. (6)Percent change includes reinvestment of $0.246 per share ordinary income dividends and $0.885 per share capital gains distributions. (7)Percent change includes reinvestment of $0.262 per share ordinary income dividends and $0.885 per share capital gains distributions.
PERFORMANCE DATA (concluded) Performance Summary--Class A Shares
Net Asset Value Capital Gains Period Covered Beginning Ending Distributed Dividends Paid* % Change** 10/27/88--12/31/88 $11.18 $10.78 $0.008 $0.364 + 0.23% 1989 10.78 11.93 -- 0.767 +18.12 1990 11.93 10.57 0.377 0.719 - 2.31 1991 10.57 12.85 -- 0.457 +26.40 1992 12.85 12.08 0.745 0.546 + 4.16 1993 12.08 12.33 1.013 0.604 +15.93 1994 12.33 10.19 0.885 0.441 - 6.55 ------ ------ Total $3.028 Total $3.898 Cumulative total return as of 12/31/94: +64.21%** *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.
Performance Summary--Class B Shares
Net Asset Value Capital Gains Period Covered Beginning Ending Distributed Dividends Paid* % Change** 11/29/85--12/31/85 $10.00 $10.19 -- -- + 1.90% 1986 10.19 11.03 $0.280 $0.250 +13.53 1987 11.03 10.52 0.222 0.496 + 1.75 1988 10.52 10.78 0.008 0.582 + 8.14 1989 10.78 11.95 -- 0.634 +17.01 1990 11.95 10.64 0.377 0.547 - 3.30 1991 10.64 12.93 -- 0.329 +24.96 1992 12.93 12.18 0.745 0.409 + 3.19 1993 12.18 12.44 1.013 0.467 +14.67 1994 12.44 10.37 0.885 0.262 - 7.38 ------ ------ Total $3.530 Total $3.976 Cumulative total return as of 12/31/94: +97.25%** *Figures may include short-term capital gains distributions. **Figures assume reinvestment of all 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.
Average Annual Total Return % Return Without % Return With Sales Charge Sales Charge** Class A Shares* Year Ended 12/31/94 -6.55% -11.46% Five Years Ended 12/31/94 +6.86 +5.71 Inception (10/27/88) through 12/31/94 +8.36 +7.41 [FN] *Maximum sales charge is 5.25%. **Assuming maximum sales charge. % Return % Return Without CDSC With CDSC** Class B Shares* Year Ended 12/31/94 -7.38% -10.72% Five Years Ended 12/31/94 +5.78 +5.78 Inception (11/29/85) through 12/31/94 +7.76 +7.76 [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 12/31/94 -2.86% -3.73% [FN] *Maximum contingent deferred sales charge is 1% and is reduced to 0% after one year. **Assuming payment of applicable contingent deferred sales charge. % Return Without % Return With Sales Charge Sales Charge** Class D Shares* Inception (10/21/94) through 12/31/94 -2.82% -7.92% [FN] *Maximum sales charge is 5.25%. **Assuming maximum sales charge. SCHEDULE OF INVESTMENTS
Shares Percent of Industries Held Corporate Bonds Cost Value Net Assets Financial $ 10,000,000 Ford Capital BV, 9.375% due 1/01/1998 $ 10,037,900 $ 10,271,300 1.5% Services 5,000,000 Landeskreditbank, N.V., 7.875% due 4/15/2004 4,972,068 4,884,100 0.7 Financial Services-- 10,000,000 American General Financial Corp., Consumer 7.38% due 5/13/1997 9,993,200 9,816,700 1.5 Total Investments in Corporate Bonds 25,003,168 24,972,100 3.7 Country Foreign Government & Agency Obligations Italy 5,000,000 Republic of Italy, 8.75% due 2/08/2001 5,373,050 5,021,880 0.7 Total Investments in Foreign Government & Agency Obligations 5,373,050 5,021,880 0.7 US Government & Agency Obligations United States 4,910,000 Federal Home Loan Mortgage Corp., REMIC (a), 1243-HP, 5.625% due 11/25/2015 4,788,017 4,400,588 0.6 Federal National Mortgage Association: 10,000,000 8.00% due 1/01/2020 9,548,438 9,548,438 1.4 10,230,724 7.00% due 5/01/2024 9,434,646 9,284,382 1.4 Government National Mortgage Association: 12,691,418 7.50% due 6/15/2024 12,124,270 11,775,262 1.7 6,853,462 7.50% due 7/15/2024 6,547,198 6,358,732 0.9 US Treasury Notes: 55,000,000 7.875% due 8/15/2001 53,943,600 55,111,650 8.1 25,000,000 6.25% due 2/15/2003 25,710,938 22,609,250 3.3 35,000,000 5.75% due 8/15/2003 36,432,813 30,417,100 4.4 US Treasury STRIPS++ (b): 22,000,000 4.79% due 5/15/2000 16,276,649 14,608,220 2.1 20,000,000 4.79% due 11/15/2004 9,323,447 9,282,200 1.4 Total Investments in US Government & Agency Obligations 184,130,016 173,395,822 25.3 Foreign Obligations Australia A$ 23,000,000 Queensland Treasury Corp., 8.00% due 5/14/1997 16,903,799 17,029,586 2.5 3,100,000 Queensland Treasury Corp., Global, 8.00% due 7/14/1999 2,328,332 2,208,660 0.3 Germany DM 22,000,000 Bundes, 6.375% due 5/20/1998 13,923,234 13,914,346 2.1 17,000,000 Deutschland Republic, 8.00% due 7/22/2002 11,145,767 11,180,685 1.6 United UK Treasury Gilt: Kingdom Pound 1,350,000 8.75% due 9/01/1997 2,267,919 2,131,277 0.3 Sterling 4,000,000 8.00% due 6/10/2003 6,698,788 5,972,336 0.9 Total Investments in Foreign Obligations 53,267,839 52,436,890 7.7 Total Investments in Corporate Bonds, Foreign Government & Agency Obligations, US Government & Agency Obligations & Foreign Obligations 267,774,073 255,826,692 37.4
SCHEDULE OF INVESTMENTS (continued)
Shares Percent of Industries Held US Stocks Cost Value Net Assets Basic Industry Aluminum 35,000 Aluminum Co. of America (ALCOA) $ 2,973,991 $ 3,031,875 0.4% Chemicals 110,000 du Pont (E.I.) de Nemours & Co. 6,362,863 6,187,500 0.9 180,000 Eastman Chemical Co. 9,257,123 9,090,000 1.3 120,000 IMC Fertilizer Group, Inc. 4,987,939 5,190,000 0.8 90,000 Rohm & Haas Co. 4,872,761 5,141,250 0.8 Packaging 125,000 Crown Cork & Seal Co., Inc. 3,731,987 4,718,750 0.7 Total Basic Industry 32,186,664 33,359,375 4.9 Capital Spending Auto & Truck 145,000 Consorcio G Grupo Dina, S.A. de C.V. (ADR) (c)(1) 2,313,515 1,377,500 0.3 Communication 255,000 ADC Telecommunications, Inc. 8,983,466 12,622,500 1.8 Equipment 200,000 DSC Communications Corp. 5,130,692 7,200,000 1.1 60,000 Motorola, Inc. 2,956,553 3,472,500 0.5 90,000 Tellabs, Inc. 1,946,804 4,995,000 0.7 Computer Services 435,000 Computer Sciences Corp. 12,921,698 22,185,000 3.2 60,000 General Motors Corp. (Class E) 2,355,744 2,310,000 0.3 Electrical Equipment 150,000 Siebe PLC (1) 1,309,386 1,306,044 0.2 180,000 W.W. Grainger 10,931,138 10,395,000 1.5 Electronics 210,000 Solectron Corp. 5,168,718 5,775,000 0.8 Engineering & 230,000 Empresas ICA Sociedad Controladora, Construction S.A. de C.V. (ADR) (c) (1) 4,526,225 3,565,000 0.5 410,000 Huntington International Holdings PLC (ADR)(c)(1) 9,996,548 1,076,250 0.2 Environmental Control 1,100,000 Wheelabrator Technologies, Inc. 12,362,975 16,225,000 2.4 Multi--Industry 60,000 Allied-Signal Inc. 2,184,115 2,040,000 0.3 Office Equipment 610,000 Danka Business Systems PLC (ADR) (c) (1) 9,489,019 13,038,750 1.9 25,000 International Business Machines Corp. 1,775,905 1,837,500 0.3 Total Capital Spending 94,352,501 109,421,044 16.0 Consumer Cyclicals Appliances 675,000 Singer Co. N.V. (ADR) (c) (1) 17,730,688 20,165,625 2.9 474,500 Sunbeam-Oster Inc. 9,420,127 12,218,375 1.8 Retail 75,000 Phillips-Van Heusen Corp. 1,721,463 1,143,750 0.2 Tires & Rubber 150,000 Cooper Tire & Rubber Co. 3,628,791 3,543,750 0.5 Total Consumer Cyclicals 32,501,069 37,071,500 5.4
SCHEDULE OF INVESTMENTS (continued)
Shares Percent of Industries Held US Stocks Cost Value Net Assets Consumer Staples Beverages 20,000 PanAmerican Beverage Inc. (ADR) (c) (1) $ 635,958 $ 632,500 0.1% Consumer-- 90,000 Duracell International Inc. 3,713,033 3,903,750 0.6 Miscellaneous Consumer--Services 180,000 Block (H & R), Inc. 7,774,923 6,682,500 1.0 Drug Stores 40,000 Revco D.S., Inc. 926,552 945,000 0.1 Drug/Pharmaceuticals 55,000 American Home Products Corp. 3,429,902 3,451,250 0.5 Drugs & Hospital Supply 255,000 Merck & Co., Inc. 9,276,506 9,721,875 1.4 Healthcare 450,000 Humana Inc. 8,419,745 10,181,250 1.5 210,000 Physician Corp. of America 4,417,467 4,252,500 0.6 Household Products 240,000 Procter & Gamble Co. 13,503,704 14,880,000 2.2 Photography 90,000 Eastman Kodak Co. 4,461,293 4,297,500 0.6 Total Consumer Staples 56,559,083 58,948,125 8.6 Credit-Sensitive & Financial Services Banking 165,000 BankAmerica Corp. 7,440,617 6,517,500 1.0 200,000 Bank of New York Co. 5,581,161 5,800,000 0.9 270,000 Espirito Santo Financial Holdings S.A. (ADR) (c) (1) 3,798,181 3,611,250 0.5 130,000 Grupo Financiero Serfin S.A. (ADR) (c) (1) 3,204,369 975,000 0.1 Insurance 87,500 International Telephone & Telegraph Corp. 7,493,013 7,754,687 1.1 Total Credit-Sensitive & Financial Services 27,517,341 24,658,437 3.6 Energy Energy--Related 350,000 California Energy Co., Inc. 6,244,403 5,468,750 0.8 Oil--Integrated 125,000 Mobil Oil Corp. 9,757,153 10,531,250 1.5 120,000 Phillips Petroleum Co. 4,082,924 3,930,000 0.6 75,000 Royal Dutch Petroleum Co. N.V. (ADR) (c) (1) 6,692,188 8,062,500 1.2 Total Energy 26,776,668 27,992,500 4.1 Transports Railroads 310,000 Southern Pacific Rail Co. 6,386,644 5,618,750 0.8 Total Transports 6,386,644 5,618,750 0.8 Utilities Utilities-- 49,100 ALC Communications Corp. 1,456,673 1,528,237 0.2 Communications 180,000 GTE Corp. 5,790,102 5,467,500 0.8 515,750 LDDS Communications Inc. (Class A) 11,447,075 9,992,656 1.5 330,000 MCI Communications Corp. 9,481,959 6,063,750 0.9 170,000 Southwestern Bell Corp. 7,282,605 6,863,750 1.0 200,000 Telefonos de Mexico, S.A. de C.V. (ADR) (c) (1) 9,342,788 8,200,000 1.2 Total Utilities 44,801,202 38,115,893 5.6 Total Investments in US Stocks 321,081,172 335,185,624 49.0
SCHEDULE OF INVESTMENTS (continued)
Shares Percent of Industries Held Foreign Stocks Cost Value Net Assets Australia Banking 347,492 National Australia Bank Ltd. $ 2,199,488 $ 2,779,958 0.4% Media/Publishing 160,000 News Corp. Ltd. (New) (ADR) (c) 2,193,768 2,500,000 0.4 80,000 News Corp. Ltd. (Ordinary) (ADR) (c) 1,885,269 1,110,000 0.2 Multi--Industry 9,399 Pacific Dunlop, Ltd. 27,135 24,991 0.0 Retail 425,250 Coles Myer Ltd. 1,813,741 1,443,884 0.2 Canada Appliances 280,000 Semi-Tech Corp. (d) 2,947,648 1,097,961 0.2 Chemicals 135,000 NOVA Corp. (Class A) 1,418,715 1,248,750 0.2 Retail Stores 75,000 Hudson's Bay Company (Ordinary) 2,011,842 1,336,803 0.2 Chile Banking 57,000 Banco O'Higgins (ADR) (c) 837,114 976,125 0.1 Packaging 40,000 Christalerias de Chile S.A. (ADR) (c) 761,587 630,000 0.1 Utilities-- 33,800 Empresas Telex-Chile S.A. 666,017 359,125 0.1 Communications Utilities--Electric 96,600 Distribuidora Chilectra Metropolitana S.A. (ADR) (c) 2,696,793 4,733,400 0.7 Denmark Utilities-- 80,000 Tele Danmark A/S (ADR) (c) 1,882,080 2,040,000 0.3 Communications France Metals--Non-Ferrous 21,100 Eramet 1,385,457 1,365,248 0.2 Utilities--Water 15,413 Compagnie Generale des Eaux 1,445,264 1,500,253 0.2 Hong Kong Banking 286,378 HSBC Holdings PLC 1,750,973 3,091,076 0.4 Electrical Equipment 1,300,000 Johnson Electric Co. 2,603,189 2,982,808 0.4 Multi--Industry 660,000 Hutchison Whampoa, Ltd. 1,685,630 2,670,372 0.4 Oil/Gas 2,000,000 Shanghai Petrochemical Co., Ltd. 668,375 568,769 0.1 Indonesia Telecommunications 3,160 P.T. Indonesia Satellite (ADR) (c) 101,278 112,970 0.0
SCHEDULE OF INVESTMENTS (continued)
Shares Percent of Industries Held Foreign Stocks Cost Value Net Assets Italy Banking 90,000 Istituto Mobilare (ADR) (c) $ 1,976,579 $ 1,653,750 0.2% Japan Electronics 45,000 Fujitsu, Ltd. 495,657 456,784 0.1 100,000 Hitachi, Ltd. 995,078 993,970 0.2 15,000 Kyocera Corp. 1,111,721 1,114,070 0.2 270,000 Mitsubishi Electric Corp. 1,854,078 1,918,492 0.3 25,000 TDK Corp. 1,179,445 1,213,568 0.2 Semiconductors 40,000 NEC Corp. 513,178 458,291 0.1 Mexico Multi--Industry 433,800 Grupo Carso, S.A. de C.V. (ADR) (c) 3,832,850 6,561,225 0.9 Retail Stores 430,000 CIFRA, S.A. de C.V. 'C' 1,129,713 831,918 0.1 Netherlands Foods/Food 18,000 Unilever Capital Corp. (ADR) (c) 2,088,261 2,097,000 0.3 Processing Norway Energy Related 75,000 Norsk Hydro A.S. (ADR) (c) 2,884,119 2,934,375 0.4 Sweden Appliances 12,000 Electrolux AB 'B' Free 610,647 610,049 0.1 Telecommunications 80,000 Ericsson (LM) Telephone Co. 4,590,490 4,410,000 0.6 United Kingdom Financial Services 100,000 Reuters Holding PLC (ADR) (c) 2,571,186 4,387,500 0.6 Multi--Industry 50,000 Hanson PLC Sponsored (ADR) (c) 1,106,687 900,000 0.l Oil--Integrated 35,000 British Petroleum Co. PLC (ADR) (c) 2,578,349 2,795,625 0.4 Total Investments in Foreign Stocks 60,499,401 65,909,110 9.6 Total Investments in US & Foreign Stocks 381,580,573 401,094,734 58.6 Face Amount* Short-Term Securities Commercial Paper** $20,000,000 Ciesco L.P., 5.95% due 1/10/1995 19,966,945 19,966,945 2.9 4,603,000 General Electric Capital Corp., 5.80% due 1/03/1995 4,600,775 4,600,775 0.6 Total Investments in Short-Term Securities 24,567,720 24,567,720 3.5 Total Investments 673,922,366 681,489,146 99.5
SCHEDULE OF INVESTMENTS (concluded)
Number of Premiums Percent of Shares Issue Received Value Net Assets Options Written Call Options Written 6,300 ADC Telecommunications Inc., expiring January 1995 at US $50 $ (7,949) $ (7,088) 0.0% 15,500 ITT Corp., expiring January 1995 at US $90 (18,748) (17,437) 0.0 Total Options Written (26,697) (24,525) 0.0 Total Investments, Net of Options Written $673,895,669 681,464,621 99.5 ============ Other Assets Less Liabilities 3,355,691 0.5 ------------ ------ Net Assets $684,820,312 100.0% ============ ====== Net Asset Value: Class A--Based on net assets of $37,041,579 and 3,633,601 shares outstanding $ 10.19 ============ Class B--Based on net assets of $299,637,972 and 28,902,672 shares outstanding $ 10.37 ============ Class C--Based on net assets of $209,734 and 20,420 shares outstanding $ 10.27 ============ Class D--Based on net assets of $347,931,027 and 34,162,431 shares outstanding $ 10.18 ============ (a)Real Estate Mortgage Investment Conduits (REMIC). (b)Represents the yield-to-maturity on this zero coupon issue. These securities are purchased at a deep discount and amortized to maturity. (c)American Depositary Receipt (ADR). (d)Formerly named International Semi-Tech Corp. *Denominated in US dollars unless otherwise indicated. **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. (1)Consistent with the general policy of the Securities and Exchange Commission, the nationality or domicile of an issuer for determination of foreign issuer status may be (i) the country under whose laws the issuer is organized, (ii) the country in which the issuer's securities are principally traded, or (iii) the country in which the issuer derives a significant proportion (at least 50%) of its revenue or profits from goods produced or sold, investments made, or services performed in the country, or in which at least 50% of the assets of the issuer are situated. ++Separate Trading of Registered Interest and Principal of Securities (STRIPS).
PORTFOLIO INFORMATION Ten Largest Equity Holdings Percent of As of December 31, 1994 Net Assets Computer Sciences Corp. 3.2% Singer Co. N.V. (ADR) 2.9 Wheelabrator Technologies, Inc. 2.4 Procter & Gamble Co. 2.2 Danka Business Systems PLC (ADR) 1.9 ADC Telecommunications, Inc. 1.8 Sunbeam-Oster Inc. 1.8 Mobil Oil Corp. 1.5 W.W. Grainger 1.5 Humana Inc. 1.5 -----END PRIVACY-ENHANCED MESSAGE-----