-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DoOKfcUSpT6MuxQw2MuUJrqEcLV9c8VqyVg5Ar+b/wDE1YDjmWDZdFPr+n+4R4Ej to2qcXG33MPN+cxphQ8RRA== 0000900092-04-000297.txt : 20041004 0000900092-04-000297.hdr.sgml : 20041004 20041004151132 ACCESSION NUMBER: 0000900092-04-000297 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040731 FILED AS OF DATE: 20041004 DATE AS OF CHANGE: 20041004 EFFECTIVENESS DATE: 20041004 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ASSET PROGRAM INC CENTRAL INDEX KEY: 0000918848 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-07177 FILM NUMBER: 041062171 BUSINESS ADDRESS: STREET 1: MERRILL LYNCH ASSET MGMT STREET 2: 800 SCUDDERS MILL RD CITY: PLAINSBORO STATE: NJ ZIP: 08536 BUSINESS PHONE: 6092822116 MAIL ADDRESS: STREET 1: 800 SCUDDERS MILL RD STREET 2: MERRILL LYNCH ASSET MGMT CITY: PLAINSBORO STATE: NJ ZIP: 08536 FORMER COMPANY: FORMER CONFORMED NAME: MERRILL LYNCH ASSET BUILDER PROGRAM INC DATE OF NAME CHANGE: 19990331 FORMER COMPANY: FORMER CONFORMED NAME: MERRILL LYNCH RETIREMENT ASSET BUILDER PROGRAM INC DATE OF NAME CHANGE: 19940531 FORMER COMPANY: FORMER CONFORMED NAME: MERRILL LYNCH RETIREMENT INVESTMENT PROGRAM INC DATE OF NAME CHANGE: 19940209 N-CSRS 1 ml7172.txt MID CAP VALUE UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSRS CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-7177 Name of Fund: Merrill Lynch Mid Cap Value Opportunities Fund of The Asset Program, Inc. Fund Address: P.O. Box 9011 Princeton, NJ 08543-9011 Name and address of agent for service: Terry K. Glenn, President, Merrill Lynch Mid Cap Value Opportunities Fund of The Asset Program, Inc., 800 Scudders Mill Road, Plainsboro, NJ, 08536. Mailing address: P.O. Box 9011, Princeton, NJ, 08543-9011 Registrant's telephone number, including area code: (609) 282-2800 Date of fiscal year end: 01/31/04 Date of reporting period: 02/01/04 - 07/31/04 Item 1 - Report to Stockholders (BULL LOGO) Merrill Lynch Investment Managers www.mlim.ml.com Merrill Lynch Mid Cap Value Opportunities Fund Semi-Annual Report July 31, 2004 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. A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available (1) without charge, upon request, by calling toll-free 1-800-MER-FUND (1-800-637-3863); (2) at www.mutualfunds.ml.com; and (3) on the Securities and Exchange Commission's Web site at http://www.sec.gov. Information about how the Fund voted proxies relating to securities held in the Fund's portfolio during the most recent 12-month period ended June 30 is available (1) at www.mutualfunds.ml.com; and (2) on the Securities and Exchange Commission's Web site at http://www.sec.gov. Merrill Lynch Mid Cap Value Opportunities Fund Box 9011 Princeton, NJ 08543-9011 (GO PAPERLESS LOGO) It's Fast, Convenient, & Timely! To sign up today, go to www.icsdelivery.com/live. Merrill Lynch Mid Cap Value Opportunities Fund Portfolio Information as of July 31, 2004 Percent of Ten Largest Equity Holdings Net Assets Parametric Technology Corporation 2.4% Raytheon Company 2.4 Noble Energy, Inc. 2.2 CommScope, Inc. 2.2 WebMD Corporation 2.1 Tellabs, Inc. 2.1 Conseco, Inc. 2.0 Valassis Communications, Inc. 2.0 Convergys Corporation 1.9 Banknorth Group, Inc. 1.8 Sector Representation Percent of of Equity Holdings++ Net Assets Information Technology 20.1% Financials 18.4 Industrials 16.9 Consumer Discretionary 10.1 Health Care 9.9 Energy 8.9 Materials 4.9 Consumer Staples 3.8 Utilities 1.0 ++Total may not equal 100%. Percent of Five Largest Industries* Net Assets Electronic Equipment & Instruments 5.6% Diversified Financial Services 5.4 Media 5.3 Commercial Banks 5.0 IT Services 4.9 *For Fund compliance purposes, "Industries" means any one or more of the industry sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Fund management. This definition may not apply for purposes of this report, which may combine such industry sub-classifications for reporting ease. MERRILL LYNCH MID CAP VALUE OPPORTUNITIES FUND, JULY 31, 2004 A Letter From the President Dear Shareholder The year is more than half behind us, and it seems appropriate to take a step back and put 2004 into context. In recent months, the Federal Reserve Board (the Fed) has taken center stage as it shifts away from its long-accommodative monetary stance. In a much- anticipated move, the Fed raised the Federal Funds rate 25 basis points (.25%) on June 30, representing the first interest rate increase in four years. Shortly after period-end, the Fed announced an additional 25 basis point interest rate hike, bringing the target short-term interest rate to 1.50% - still low by historical standards. The Fed has been very deliberate in telegraphing its intention to take a "measured" approach to interest rate increases in order to avoid upsetting the economy or the financial markets. Still, the Fed has stated that it may move more aggressively if inflation and economic growth accelerate more than anticipated. While inflation has moved up on a cyclical basis, this is an indication that the Fed has been successful in avoiding deflation - just as it set out to do a year ago. The challenge now is to normalize interest rates in order to keep inflation within acceptable limits. The futures curve currently projects further increases in short-term interest rates before year-end. In addition to the Fed policy change, the financial markets recently have had to grapple with a tense geopolitical environment, higher oil prices and the worry and anticipation that accompanies a presidential election. Notwithstanding these concerns, equities were due for a pause given that the Standard & Poor's 500 (S&P 500) Index rose nearly 50% between its March 2003 low and the highs of early 2004. Under the circumstances, the market decline in recent months has been minor. For the six-month and 12-month periods ended July 31, 2004, the Standard & Poor's 500 Index returned -1.78% and +13.17%, respectively. Supporting the stock market, despite the aforementioned uncertainties, was continued strong corporate earnings growth. Company reports have continued to surprise investors, in many cases still exceeding consensus earnings forecasts. As always, our investment professionals are closely monitoring the markets, the economy and the overall environment in an effort to make well-informed decisions for the portfolios they manage. Our goal is to provide shareholders with competitive returns, while always keeping one eye on managing the unavoidable risk inherent in investing. We thank you for trusting Merrill Lynch Investment Managers with your investment assets, and we look forward to serving you in the months and years ahead. Sincerely, (Terry K. Glenn) Terry K. Glenn President and Director MERRILL LYNCH MID CAP VALUE OPPORTUNITIES FUND, JULY 31, 2004 A Discussion With Your Fund's Portfolio Manager Merrill Lynch Mid Cap Value Opportunities Fund delivered strong relative performance for the period, benefiting from favorable stock selection across various industry sectors. How did the Fund perform during the period in light of the existing market conditions? For the six-month period ended July 31, 2004, Merrill Lynch Mid Cap Value Opportunities Fund's Class A, Class B, Class C, Class I and Class R Shares had total returns of +1.27%, +.84%, +.84%, +1.42% and +1.13%, respectively. (Fund results shown do not reflect sales charges and would be lower if sales charges were included. Complete performance information can be found on pages 6 and 7 of this report to shareholders.) The Fund significantly outperformed the -1.01% total return of the benchmark Standard & Poor's (S&P) MidCap 400 Index and the +.63% average return of the Lipper Mid Cap Value Funds category. (Funds in this Lipper category invest primarily in stocks of mid-capitalization companies that are considered to be undervalued relative to a major unmanaged stock index.) The six-month period may be best understood as two separate environments. The first two months were characterized by equity market strength, with small cap stocks extending their lead over large cap stocks. The next four months were characterized by sharply declining equity markets pressured by interest rate concerns, weak employment data, and higher energy prices. The second environment favored defensive issues and more-established companies. We have gradually repositioned the Fund to benefit from such a "quality trade," or rotation toward higher-quality companies with modest price-to-earnings ratios. Leading contributors to the Fund's strong relative performance included CNF Inc., a provider of transportation and logistics services. CNF shares rallied on strong operating results at the company's trucking division. Corrections Corporation of America, a provider of correctional facilities, also contributed favorably to results as the company absorbed excess capacity, and announced new contract wins. Shares of Noble Energy, Inc., an exploration and production company, further benefited Fund results on production gains and higher energy prices. In terms of sector positioning, exposure to technology stocks had a negative effect on Fund results during the period. However, our specific technology holdings performed much better than technology stocks in the S&P 400 Index. The favorable stock selection offset much of the negative impact associated with the overweighting in an underperforming sector. Good stock picking in the industrials and healthcare sectors also contributed to the positive performance relative to the benchmark index and competitor funds. What changes were made to the portfolio during the period? Most importantly, we trimmed exposure to the consumer discretionary sector. We believe that rapid growth in consumer spending has largely run its course and is likely to moderate with the slowdown in mortgage-refinancing activity and higher energy prices. We eliminated several retail stocks, including American Eagle Outfitters, Inc., Abercrombie & Fitch Co., Toys 'R' Us, Inc. and J.C. Penney Company, Inc. We also reduced exposure to restaurant stocks with the sale of Outback Steakhouse, Inc. and Darden Restaurants, Inc. In addition, we trimmed exposure to gaming stocks by eliminating our positions in MGM Mirage Inc. and Mandalay Resort Group. In the healthcare sector, we have been active buyers of specialty pharmaceutical stocks. Market concern about generic competition in the years ahead has pressured current valuations. We think the competitive concerns are valid but, in certain circumstances, underestimate the ability of specialty pharmaceutical companies to respond with licensing agreements and market consolidation. There are specific steps that specialty pharmaceutical companies can take to strengthen their competitive position. Recently, we have seen some merger-and-acquisition activity, as in the case of King Pharmaceuticals, Inc., a significant Fund investment. Mylan Laboratories, a generic company, offered to acquire King, creating a generic ownership of a branded products company. MERRILL LYNCH MID CAP VALUE OPPORTUNITIES FUND, JULY 31, 2004 Other healthcare stocks added to the portfolio in the past six months include Shire Pharmaceuticals Group, a specialty pharmaceuticals company; AmerisourceBergen Corporation, a drug distributor; and Cephalon Inc., a biopharmaceutical company. Offsetting these purchases, we trimmed some of our best-performing healthcare stocks, including Beckton Dickinson and Company and C.R. Bard, Inc. We selectively added financial services stocks to the portfolio, including Conseco Inc., a provider of life and long-term care insurance; Colonial BancGroup Inc., a regional bank holding company; and E*TRADE Financial Corp., a retail brokerage and banking institution. Overall, we remain underweighted in the financial services sector. Recently, we rebuilt exposure to information technology stocks given extreme share price weakness and, in our view, compelling low valuation levels. We anticipate a shift away from consumer spending toward an environment where business spending leads the economy. Corporate balance sheets are strong and cash generation is high by historical standards. We believe businesses will emphasize spending on information technology, particularly with tax incentives that permit accelerated depreciation on investments this year. One recent addition to the portfolio is shares of CommScope, Inc., a manufacturer of coaxial, fiber-optic and other high-performance cable products for data, voice and video transmission. How was the Fund positioned at the close of the period? As of July 31, 2004, the Fund was underweight in the financial services, consumer discretionary and utilities sectors. The Fund was overweight in the information technology and industrials sectors. Given our expectation for a slowdown in consumer spending and an increase in business spending, the portfolio is positioned to benefit from what we consider business-centric rather than consumer- centric investments. We maintain a positive outlook for mid-cap stocks. While small, speculative stocks performed well in 2003, we anticipate that larger companies with more predictable earnings prospects will perform best in the months ahead. In our opinion, mid-cap valuation levels currently are more attractive than valuations on small- and micro- cap issues. Thus, the Fund is positioned to benefit from the "quality trade" discussed earlier. We have positioned Merrill Lynch Mid Cap Value Opportunities Fund higher up the capitalization scale to target companies in the $2.5 billion - $5 billion market cap range. R. Elise Baum Vice President and Portfolio Manager August 12, 2004 Effective July 26, 2004, Merrill Lynch Mid Cap Value Fund, a series of The Asset Program, Inc., changed its name to Merrill Lynch Mid Cap Value Opportunities Fund. This change does not affect your holding in the Fund, the management team or the Fund's investment objective. The Fund continues to seek capital appreciation and, secondarily, income, by investing in securities, primarily equities, that Fund management believes are undervalued and, therefore, represent investment value. MERRILL LYNCH MID CAP VALUE OPPORTUNITIES FUND, JULY 31, 2004 Performance Data About Fund Performance Investors are able to purchase shares of the Fund through multiple pricing alternatives: * Class A Shares incur a maximum initial sales charge of 5.25% and an account maintenance fee of 0.25% (but no distribution fee). * Class B Shares are subject to a maximum contingent deferred sales charge of 4% declining to 0% after 6 years. All Class B Shares purchased prior to June 1, 2001 will maintain the four-year schedule. 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 A Shares after approximately eight 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 I Shares incur a maximum initial sales charge (front-end load) of 5.25% and bear no ongoing distribution or account maintenance fees. Class I Shares are available only to eligible investors. * Class R Shares do not incur a maximum sales charge (front-end load) or deferred sales charge. These shares are subject to a distribution fee of 0.25% and an account maintenance fee of 0.25%. Class R Shares are available only to certain retirement plans. None of the past results shown should be considered a representation of future performance. Current performance may be lower or higher than the performance data quoted. Refer to www.mlim.ml.com to obtain more current performance information. Performance results do not include the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Figures shown in each of the following tables assume reinvestment of all dividends and capital gain distributions, if any, 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. Recent Performance Results
6-Month 12-Month Since Inception As of July 31, 2004 Total Return Total Return Total Return ML Mid Cap Value Opportunities Fund--Class A Shares* +1.27% +17.24% +197.51% ML Mid Cap Value Opportunities Fund--Class B Shares* +0.84 +16.36 +175.01 ML Mid Cap Value Opportunities Fund--Class C Shares* +0.84 +16.32 +174.54 ML Mid Cap Value Opportunities Fund--Class I Shares* +1.42 +17.56 +204.53 ML Mid Cap Value Opportunities Fund--Class R Shares* +1.13 +16.93 + 44.45 S&P MidCap 400 Index** -1.01 +17.83 +280.70/+42.68 *Investment results shown do not reflect sales charges; results shown 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 from 2/01/95 for Class A, Class B, Class C & Class I Shares and from 2/04/03 for Class R Shares. **This unmanaged Index is a market value-weighted index that consists of 400 domestic stocks and measures the performance of the mid-size company segment of the U.S. market. Since inception total returns are from 2/01/95 and from 2/04/03.
MERRILL LYNCH MID CAP VALUE OPPORTUNITIES FUND, JULY 31, 2004 Performance Data (concluded) Average Annual Total Return Return Without Return With Sales Charge Sales Charge** Class A Shares* One Year Ended 7/31/04 +17.24% +11.09% Five Years Ended 7/31/04 + 7.65 + 6.50 Inception (2/01/95) through 7/31/04 +12.17 +11.53 *Maximum sales charge is 5.25%. **Assuming maximum sales charge. Return Return Without CDSC With CDSC** Class B Shares* One Year Ended 7/31/04 +16.36% +12.36% Five Years Ended 7/31/04 + 6.78 + 6.47 Inception (2/01/95) through 7/31/04 +11.25 +11.25 *Maximum contingent deferred sales charge is 4% and is reduced to 0% after six years. **Assuming payment of applicable contingent deferred sales charge. Return Return Without CDSC With CDSC** Class C Shares* One Year Ended 7/31/04 +16.32% +15.32% Five Years Ended 7/31/04 + 6.75 + 6.75 Inception (2/01/95) through 7/31/04 +11.22 +11.22 *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 I Shares* One Year Ended 7/31/04 +17.56% +11.39% Five Years Ended 7/31/04 + 7.93 + 6.77 Inception (2/01/95) through 7/31/04 +12.45 +11.81 *Maximum sales charge is 5.25%. **Assuming maximum sales charge. Class R Shares Return One Year Ended 7/31/04 +16.93% Inception (2/04/03) through 7/31/04 +28.11 MERRILL LYNCH MID CAP VALUE OPPORTUNITIES FUND, JULY 31, 2004 Disclosure of Expenses Shareholders of this Fund may incur the following charges: (a) expenses related to transactions, including sales charges, redemption fees, and exchange fees; and (b) operating expenses including advisory fees, distribution fees including 12(b)-1 fees, and other Fund expenses. The following example (which is based on a hypothetical investment of $1,000 invested on February 1, 2004 and held through July 31, 2004) is intended to assist shareholders both in calculating expenses based on an investment in the Fund and in comparing these expenses with similar costs of investing in other mutual funds. The first table below provides information about actual account values and actual expenses. In order to estimate the expenses a shareholder paid during the period covered by this report, shareholders can divide their account value by $1,000 and then multiply the result by the number in the first line under the heading entitled "Expenses Paid During the Period." The second table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses. In order to assist shareholders in comparing the ongoing expenses of investing in this Fund and other funds, compare the 5% hypothetical example with the 5% hypothetical examples that appear in other funds' shareholder reports. The expenses shown in the table are intended to highlight shareholders ongoing costs only and do not reflect any transactional expenses, such as sales charges, redemption fees, or exchange fees. Therefore, the second table is useful in comparing ongoing expenses only, and will not help shareholders determine the relative total expenses of owning different funds. If these transactional expenses were included, shareholder expenses would have been higher.
Expenses Paid Beginning Ending During the Period* Account Value Account Value February 1, 2004 February 1, 2004 July 31, 2004 to July 31, 2004 Actual Class A $1,000 $1,012.70 $ 6.36 Class B $1,000 $1,008.40 $10.24 Class C $1,000 $1,008.40 $10.29 Class I $1,000 $1,014.20 $ 5.11 Class R $1,000 $1,011.30 $ 7.55 Hypothetical (5% annual return before expenses)** Class A $1,000 $1,018.55 $ 6.37 Class B $1,000 $1,014.67 $10.27 Class C $1,000 $1,014.62 $10.32 Class I $1,000 $1,019.79 $ 5.12 Class R $1,000 $1,017.35 $ 7.57 *For each class of the Fund, expenses are equal to the annualized expense ratio for the class (1.27% for Class A, 2.05% for Class B, 2.06% for Class C, 1.02% for Class I and 1.51% for Class R), multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period shown). **Hypothetical 5% annual return before expenses is calculated by multiplying the number of days in the most recent fiscal half year divided by 366.
MERRILL LYNCH MID CAP VALUE OPPORTUNITIES FUND, JULY 31, 2004 Schedule of Investments
North Value America Industry* Shares Held Common Stocks (in U.S. dollars) United States-- Aerospace & 124,700 Northrop Grumman Corporation (j) $ 6,559,220 91.9% Defense--4.1% 278,600 Raytheon Company 9,347,030 -------------- 15,906,250 Air Freight & 115,400 CNF Transportation Inc. 4,761,404 Logistics--1.2% Auto Components-- 125,500 American Axle & Manufacturing Holdings, Inc. 4,310,925 1.1% Beverages--0.8% 87,200 ++Constellation Brands, Inc. (Class A) 3,303,136 Biotechnology-- 33,700 ++Cephalon, Inc. 1,702,524 2.0% 206,400 ++Human Genome Sciences, Inc. 2,069,160 195,700 ++Maxygen Inc. 1,939,387 100,300 ++MedImmune, Inc. (j) 2,310,912 -------------- 8,021,983 Building Products-- 95,500 Masco Corporation 2,887,920 0.7% Capital Markets-- 159,400 ++E*TRADE Financial Corp. 1,764,558 2.0% 373,100 Janus Capital Group Inc. (j) 4,947,306 141,500 ++Knight Trading Group, Inc. (Class A) 1,204,165 -------------- 7,916,029 Commercial Banks-- 229,200 Banknorth Group, Inc. 7,313,772 5.0% 71,500 The Colonial BancGroup, Inc. 1,379,235 109,300 Compass Bancshares, Inc. 4,819,037 184,375 First Midwest Bancorp, Inc. 6,226,344 -------------- 19,738,388 Commercial 598,300 ++Allied Waste Industries, Inc. 5,528,292 Services & 55,400 Avery Dennison Corporation 3,355,578 Supplies--5.2% 231,500 Cendant Corporation 5,296,720 169,500 ++Corrections Corporation of America 6,390,150 -------------- 20,570,740 Communications 416,800 ++CommScope, Inc. 8,586,080 Equipment--4.3% 923,800 ++Tellabs, Inc. (j) 8,231,058 -------------- 16,817,138 Construction & 58,100 Fluor Corporation 2,646,455 Engineering--0.7% Construction 71,400 Martin Marietta Materials, Inc. 3,123,750 Materials--0.8% Containers & 441,000 ++Crown Holdings, Inc. 4,471,740 Packaging--2.3% 237,000 ++Smurfit-Stone Container Corporation (j) 4,410,570 -------------- 8,882,310 Diversified 43,700 Financial Select Sector SPDR Fund (f)(j) 1,222,289 Financial 44,700 iShares Russell 2000 Index Fund (j)(k) 4,917,000 Services--5.4% 36,200 iShares S&P SmallCap 600 Index Fund (d)(j) 5,035,058 28,500 S&P 500 Depositary Receipts (e)(j) 3,158,370 66,500 S&P Mid-Cap 400 Depositary Receipts (b)(j) 7,049,000 -------------- 21,381,717
MERRILL LYNCH MID CAP VALUE OPPORTUNITIES FUND, JULY 31, 2004 Schedule of Investments (continued)
North America Value (continued) Industry* Shares Held Common Stocks (in U.S. dollars) United States Electric 102,900 Cinergy Corp. $ 3,935,925 (continued) Utilities--1.0% Electronic 180,300 Anixter International Inc. 6,036,444 Equipment & 331,000 ++Ingram Micro Inc. (Class A) 4,716,750 Instruments--5.6% 422,200 Symbol Technologies, Inc. 5,526,598 154,300 ++Tech Data Corporation 5,780,078 -------------- 22,059,870 Energy Equipment & 109,900 BJ Services Company (j) 5,457,634 Service--4.6% 264,900 Diamond Offshore Drilling, Inc. 6,474,156 91,600 Energy Select Sector SPDR Fund (g)(j) 2,972,420 45,100 Oil Service HOLDRs Trust (c)(j) 3,372,578 -------------- 18,276,788 Food Products-- 161,795 Archer-Daniels-Midland Company 2,496,497 2.9% 130,100 ConAgra Foods, Inc. 3,382,600 546,100 ++Del Monte Foods Company 5,755,894 -------------- 11,634,991 Health Care 71,900 C.R. Bard, Inc. 3,968,880 Equipment & 15,100 ++Cutera, Inc. 211,400 Supplies--1.1% -------------- 4,180,280 Health Care 37,200 AmerisourceBergen Corporation 2,011,032 Providers & 1,025,100 ++WebMD Corporation (j) 8,344,314 Services--2.6% -------------- 10,355,346 IT Services--4.9% 580,100 ++Convergys Corporation 7,680,524 251,700 Sabre Holdings Corporation (Class A) 6,425,901 225,900 ++Sungard Data Systems Inc. 5,265,729 -------------- 19,372,154 Insurance--4.3% 87,500 ACE Limited 3,551,625 439,100 ++Conseco, Inc. 7,895,018 156,700 Protective Life Corporation 5,680,375 -------------- 17,127,018 Internet 2,597,000 ++Vignette Corporation 3,713,710 Software & Services--0.9% Machinery--2.3% 81,200 Eaton Corporation 5,248,768 47,300 ITT Industries, Inc. 3,781,635 -------------- 9,030,403 Media--5.3% 119,400 Harte-Hanks, Inc. 2,884,704 55,500 Knight Ridder, Inc. (j) 3,651,345 597,200 ++Paxson Communications Corporation 1,815,488 330,500 The Reader's Digest Association, Inc. (Class A) 4,719,540 267,500 ++Valassis Communications, Inc. 7,821,700 -------------- 20,892,777
MERRILL LYNCH MID CAP VALUE OPPORTUNITIES FUND, JULY 31, 2004 Schedule of Investments (continued)
North America Value (concluded) Industry* Shares Held Common Stocks (in U.S. dollars) United States Metals & 332,400 ++GrafTech International Ltd. $ 3,666,372 (concluded) Mining--1.8% 108,300 Steel Dynamics, Inc. (j) 3,546,825 -------------- 7,213,197 Oil & Gas--4.3% 160,300 Noble Energy, Inc. 8,866,193 47,400 Sunoco, Inc. 3,231,258 125,200 Unocal Corporation 4,852,752 -------------- 16,950,203 Pharmaceuticals-- 436,600 ++King Pharmaceuticals, Inc. 4,929,214 2.1% 51,200 Medicis Pharmaceutical (Class A) 1,831,424 106,400 Mylan Laboratories, Inc. 1,576,848 -------------- 8,337,486 Real Estate--0.4% 59,800 Equity Office Properties Trust 1,551,810 Road & Rail--1.8% 231,200 CSX Corporation 7,236,560 Semiconductors & 578,600 ++Applied Micro Circuits Corporation 2,082,960 Semiconductor 80,200 ++DSP Group, Inc. 1,580,742 Equipment--0.9% -------------- 3,663,702 Software--3.5% 305,000 ++BEA Systems, Inc. (j) 1,979,450 119,200 ++McAfee Inc. 2,143,216 2,129,200 ++Parametric Technology Corporation 9,666,568 -------------- 13,789,234 Specialty Retail-- 219,900 Foot Locker, Inc. 4,947,750 3.7% 275,180 Limited Brands, Inc. 5,624,679 68,100 ++Linens 'n Things, Inc. 1,812,822 74,600 The Talbots, Inc. 2,297,680 -------------- 14,682,931 Thrifts & Mortgage 253,600 Sovereign Bancorp, Inc. (j) 5,520,872 Finance--1.4% Trading 70,500 W. W. Grainger, Inc. 3,732,975 Companies & Distributors--0.9% Total Common Stocks in North America--91.9% 363,526,377 Western Europe Switzerland-- Biotechnology-- 159,900 Serono SA (ADR) (a) 2,448,069 0.6% 0.6% Total Common Stocks in Switzerland 2,448,069 United Pharmaceuticals-- 221,400 Shire Pharmaceuticals Group PLC (ADR) (a) 5,884,812 Kingdom--1.5% 1.5% Total Common Stocks in the United Kingdom 5,884,812 Total Common Stocks in Western Europe--2.1% 8,332,881 Total Common Stocks (Cost--$338,969,102)--94.0% 371,859,258
MERRILL LYNCH MID CAP VALUE OPPORTUNITIES FUND, JULY 31, 2004 Schedule of Investments (concluded)
Value Beneficial Interest Short-Term Securities (in U.S. dollars) $17,574,552 Merrill Lynch Liquidity Series, LLC Cash Sweep Series I (h) $ 17,574,552 65,585,100 Merrill Lynch Liquidity Series, LLC Money Market Series (h)(i) 65,585,100 Total Short-Term Securities (Cost--$83,159,652)--21.0% 83,159,652 Total Investments (Cost--$422,128,754**)--115.0% 455,018,910 Liabilities in Excess of Other Assets--(15.0%) (59,197,307) -------------- Net Assets--100.0% $ 395,821,603 ============== ++ Non-income producing security. * For Fund compliance purposes, "Industry" means any one or more of the industry sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Fund management. This definition may not apply for purposes of this report, which may combine such industry sub- classifications for reporting ease. ** The cost and unrealized appreciation/depreciation of investments as of July 31, 2004, as computed for federal income tax purposes were as follows: Aggregate cost $ 425,634,435 ============= Gross unrealized appreciation 54,137,490 Gross unrealized depreciation (24,753,015) ------------- Net unrealized appreciation $ 29,384,475 ============= (a) American Depositary Receipts (ADR). (b) Represents ownership in S&P Mid Cap 400 SPDR Trust, a registered unit investment trust. The investment objective of the S&P Mid Cap 400 SPDR Trust is to provide investment results that generally correspond to the price performance and dividend yield of the component stocks of the S&P MidCap 400 Index. (c) Represents ownership in Oil Services HOLDRs Trust. The Oil Services HOLDRs Trust holds shares of common stock issued by 20 specified companies generally considered to be involved in various segments of the oil service industry. (d) iShares S&P SmallCap 600 Index Fund is an exchange traded Fund. The Fund seeks investment results that correspond to the performance of the S&P SmallCap 600 Index. (e) Represents ownership in S&P 500 SPDR Trust, a registered unit investment trust. The investment objective of the S&P 500 SPDR Trust is to provide investment results that generally correspond to the price and yield performance of the component stocks of the S&P 500 Index. (f) Represents ownership in Financial Select Sector SPDR Fund, registered in the United States. The investment objective of the Financial Select Sector SPDR Fund is to provide investment results that correspond to the performance of The Financial Select Sector Index. (g) Represents ownership in Energy Select Sector SPDR Fund, registered in the United States. The investment objective of the Energy Select Sector SPDR Fund is to provide investment results that before expenses corresponds to the performance of The Energy Select Sector Index. (h) Investments in companies considered to be an affiliate of the Fund (such companies are defined as "Affiliated Companies" in Section 2(a)(3) of the Investment Company Act of 1940) were as follows: Interest/ Net Dividend Affiliate Activity Income Merrill Lynch Liquidity Series, LLC Cash Sweep Series I $ 11,368,066 $102,497 Merrill Lynch Liquidity Series, LLC Money Market Series $ 17,401,950 $ 25,742 Merrill Lynch Premier Institutional Fund (16,061,050) $ 5,414 (i) Security was purchased with the cash proceeds from securities loans. (j) Security, or a portion of security, is on loan. (k) iShares Russell 2000 Index Fund is an exchange-traded Fund. The Fund seeks investment results that correspond to the performance of Russell 2000 Index. See Notes to Financial Statements.
MERRILL LYNCH MID CAP VALUE OPPORTUNITIES FUND, JULY 31, 2004 Statement of Assets and Liabilities
As of July 31, 2004 Assets Investments, in unaffiliated securities, at value (including securities loaned of $63,405,410) (identified cost--$338,969,102) $ 371,859,258 Investments, in affiliated securities, at value (identified cost--$83,159,652) 83,159,652 Receivables: Securities sold $ 8,197,674 Capital shares sold 954,012 Dividends 252,861 Interest from affiliates 17,697 Securities lending--net 4,502 9,426,746 --------------- Prepaid expenses 28,817 --------------- Total assets 464,474,473 --------------- Liabilities Collateral on securities loaned, at value 65,585,100 Payables: Securities purchased 1,891,114 Capital shares redeemed 441,607 Investment adviser 249,291 Distributor 193,949 Other affiliates 181,530 Custodian bank 69,595 3,027,086 --------------- Accrued expenses and other liabilities 40,684 --------------- Total liabilities 68,652,870 --------------- Net Assets Net assets $ 395,821,603 =============== Net Assets Consist of Class A Shares of Capital Stock, $.10 par value, 40,000,000 shares authorized $ 392,574 Class B Shares of Capital Stock, $.10 par value, 40,000,000 shares authorized 766,983 Class C Shares of Capital Stock, $.10 par value, 40,000,000 shares authorized 508,572 Class I Shares of Capital Stock, $.10 par value, 20,000,000 shares authorized 610,356 Class R Shares of Capital Stock, $.10 par value, 40,000,000 shares authorized 18,383 Paid-in capital in excess of par 352,906,386 Accumulated investment loss--net $ (1,209,203) Undistributed realized capital gains on investments--net 8,937,396 Unrealized appreciation on investments--net 32,890,156 --------------- Total accumulated earnings--net 40,618,349 --------------- Net Assets $ 395,821,603 =============== Net Asset Value Class A--Based on net assets of $69,136,509 and 3,925,744 shares outstanding $ 17.61 =============== Class B--Based on net assets of $129,306,572 and 7,669,832 shares outstanding $ 16.86 =============== Class C--Based on net assets of $85,557,457 and 5,085,723 shares outstanding $ 16.82 =============== Class I--Based on net assets of $108,684,219 and 6,103,563 shares outstanding $ 17.81 =============== Class R--Based on net assets of $3,136,846 and 183,827 shares outstanding $ 17.06 =============== See Notes to Financial Statements.
MERRILL LYNCH MID CAP VALUE OPPORTUNITIES FUND, JULY 31, 2004 Statement of Operations
For the Six Months Ended July 31, 2004 Investment Income Dividends (net of $3,785 foreign withholding tax) $ 1,927,464 Interest from affiliates 102,497 Securities lending--net 31,156 --------------- Total income 2,061,117 --------------- Expenses Investment advisory fees $ 1,286,270 Account maintenance and distribution fees--Class B 681,995 Account maintenance and distribution fees--Class C 433,073 Transfer agent fees--Class B 195,734 Transfer agent fees--Class C 128,828 Transfer agent fees--Class I 126,650 Account maintenance fees--Class A 85,569 Transfer agent fees--Class A 84,878 Accounting services 82,920 Registration fees 33,844 Printing and shareholder reports 33,053 Custodian fees 31,288 Professional fees 28,196 Directors' fees and expenses 10,780 Account maintenance and distribution fees--Class R 5,343 Transfer agent fees--Class R 2,635 Pricing fees 584 Other 18,680 --------------- Total expenses 3,270,320 --------------- Investment loss--net (1,209,203) --------------- Realized & Unrealized Gain (Loss) on Investments Realized gain from investments--net 31,542,520 Change in unrealized appreciation from investments--net (26,598,490) --------------- Total realized and unrealized gain--net 4,944,030 --------------- Net Increase in Net Assets Resulting from Operations $ 3,734,827 =============== See Notes to Financial Statements.
MERRILL LYNCH MID CAP VALUE OPPORTUNITIES FUND, JULY 31, 2004 Statements of Changes in Net Assets
For the Six For the Months Ended Year Ended July 31, January 31, Increase (Decrease) in Net Assets: 2004 2004 Operations Investment loss--net $ (1,209,203) $ (2,505,111) Realized gain (loss) on investments--net 31,542,520 (2,979,434) Change in unrealized appreciation/depreciation on investments--net (26,598,490) 113,884,149 --------------- --------------- Net increase in net assets resulting from operations 3,734,827 108,399,604 --------------- --------------- Capital Share Transactions Net increase (decrease) in net assets derived from capital share transactions 13,348,306 (3,271,592) --------------- --------------- Net Assets Total increase in net assets 17,083,133 105,128,012 Beginning of period 378,738,470 273,610,458 --------------- --------------- End of period* $ 395,821,603 $ 378,738,470 =============== =============== *Accumulated investment loss--net $ (1,209,203) -- =============== =============== See Notes to Financial Statements.
MERRILL LYNCH MID CAP VALUE OPPORTUNITIES FUND, JULY 31, 2004 Financial Highlights
Class A The following per share data and ratios have been derived For the Six from information provided in the financial statements. Months Ended July 31, For the Year Ended January 31,+++++ Increase (Decrease) in Net Asset Value: 2004 2004 2003 2002 2001 Per Share Operating Performance Net asset value, beginning of period $ 17.39 $ 12.29 $ 17.04 $ 16.14 $ 14.05 ---------- ---------- ---------- ---------- ---------- Investment income (loss)--net*** (.02) (.05) (.04) --++ --++++ Realized and unrealized gain (loss) on investments--net .24 5.15 (4.40) 1.60 4.27 ---------- ---------- ---------- ---------- ---------- Total from investment operations .22 5.10 (4.44) 1.60 4.27 ---------- ---------- ---------- ---------- ---------- Less distributions from realized gain on investments--net -- -- (.31) (.70) (2.18) ---------- ---------- ---------- ---------- ---------- Net asset value, end of period $ 17.61 $ 17.39 $ 12.29 $ 17.04 $ 16.14 ========== ========== ========== ========== ========== Total Investment Return** Based on net asset value per share 1.27%+++ 41.50% (26.12%) 10.31% 33.66% ========== ========== ========== ========== ========== Ratios to Average Net Assets Expenses 1.27%* 1.34% 1.37% 1.36% 1.78% ========== ========== ========== ========== ========== Investment income (loss)--net (.23%)* (.34%) (.26%) (.02%) .02% ========== ========== ========== ========== ========== Supplemental Data Net assets, end of period (in thousands) $ 69,137 $ 62,061 $ 31,504 $ 36,225 $ 7,757 ========== ========== ========== ========== ========== Portfolio turnover 41.55% 86.16% 73.90% 98.94% 153.48% ========== ========== ========== ========== ========== * Annualized. ** Total investment returns exclude the effects of sales charges. *** Based on average shares outstanding. ++ Amount is less than $(.01) per share. ++++ Amount is less than $.01 per share. +++ Aggregate total investment return. +++++ Effective April 14, 2003, Class D Shares were redesignated Class A Shares. See Notes to Financial Statements.
MERRILL LYNCH MID CAP VALUE OPPORTUNITIES FUND, JULY 31, 2004 Financial Highlights (continued)
Class B The following per share data and ratios have been derived For the Six from information provided in the financial statements. Months Ended July 31, For the Year Ended January 31, Increase (Decrease) in Net Asset Value: 2004 2004 2003 2002 2001 Per Share Operating Performance Net asset value, beginning of period $ 16.72 $ 11.90 $ 16.64 $ 15.86 $ 13.72 ---------- ---------- ---------- ---------- ---------- Investment loss--net*** (.09) (.16) (.15) (.12) (.11) Realized and unrealized gain (loss) on investments--net .23 4.98 (4.29) 1.56 4.17 ---------- ---------- ---------- ---------- ---------- Total from investment operations .14 4.82 (4.44) 1.44 4.06 ---------- ---------- ---------- ---------- ---------- Less distributions from realized gain on investments--net -- -- (.30) (.66) (1.92) ---------- ---------- ---------- ---------- ---------- Net asset value, end of period $ 16.86 $ 16.72 $ 11.90 $ 16.64 $ 15.86 ========== ========== ========== ========== ========== Total Investment Return** Based on net asset value per share .84%++ 40.50% (26.75%) 9.45% 32.50% ========== ========== ========== ========== ========== Ratios to Average Net Assets Expenses 2.05%* 2.15% 2.17% 2.17% 2.62% ========== ========== ========== ========== ========== Investment loss--net (1.01%)* (1.14%) (1.05%) (.78%) (.80%) ========== ========== ========== ========== ========== Supplemental Data Net assets, end of period (in thousands) $ 129,307 $ 139,610 $ 115,748 $ 162,316 $ 67,062 ========== ========== ========== ========== ========== Portfolio turnover 41.55% 86.16% 73.90% 98.94% 153.48% ========== ========== ========== ========== ========== * Annualized. ** Total investment returns exclude the effects of sales charges. *** Based on average shares outstanding. ++ Aggregate total investment return. See Notes to Financial Statements.
MERRILL LYNCH MID CAP VALUE OPPORTUNITIES FUND, JULY 31, 2004 Financial Highlights (continued)
Class C The following per share data and ratios have been derived For the Six from information provided in the financial statements. Months Ended July 31, For the Year Ended January 31, Increase (Decrease) in Net Asset Value: 2004 2004 2003 2002 2001 Per Share Operating Performance Net asset value, beginning of period $ 16.68 $ 11.88 $ 16.61 $ 15.84 $ 13.70 ---------- ---------- ---------- ---------- ---------- Investment loss--net*** (.09) (.16) (.15) (.12) (.12) Realized and unrealized gain (loss) on investments--net .23 4.96 (4.27) 1.55 4.18 ---------- ---------- ---------- ---------- ---------- Total from investment operations .14 4.80 (4.42) 1.43 4.06 ---------- ---------- ---------- ---------- ---------- Less distributions from realized gain on investments--net -- -- (.31) (.66) (1.92) ---------- ---------- ---------- ---------- ---------- Net asset value, end of period $ 16.82 $ 16.68 $ 11.88 $ 16.61 $ 15.84 ========== ========== ========== ========== ========== Total Investment Return** Based on net asset value per share .84%++ 40.40% (26.73%) 9.38% 32.55% ========== ========== ========== ========== ========== Ratios to Average Net Assets Expenses 2.06%* 2.16% 2.19% 2.19% 2.65% ========== ========== ========== ========== ========== Investment loss--net (1.02%)* (1.15%) (1.07%) (.79%) (.84%) ========== ========== ========== ========== ========== Supplemental Data Net assets, end of period (in thousands) $ 85,557 $ 84,755 $ 67,233 $ 80,227 $ 37,475 ========== ========== ========== ========== ========== Portfolio turnover 41.55% 86.16% 73.90% 98.94% 153.48% ========== ========== ========== ========== ========== * Annualized. ** Total investment returns exclude the effects of sales charges. *** Based on average shares outstanding. ++ Aggregate total investment return. See Notes to Financial Statements.
MERRILL LYNCH MID CAP VALUE OPPORTUNITIES FUND, JULY 31, 2004 Financial Highlights (continued)
Class I The following per share data and ratios have been derived For the Six from information provided in the financial statements. Months Ended July 31, For the Year Ended January 31,+++++ Increase (Decrease) in Net Asset Value: 2004 2004 2003 2002 2001 Per Share Operating Performance Net asset value, beginning of period $ 17.56 $ 12.38 $ 17.12 $ 16.20 $ 14.13 ---------- ---------- ---------- ---------- ---------- Investment income (loss)--net*** --++++ (.01) --++ .03 --++ Realized and unrealized gain (loss) on investments--net .25 5.19 (4.42) 1.62 4.33 ---------- ---------- ---------- ---------- ---------- Total from investment operations .25 5.18 (4.42) 1.65 4.33 ---------- ---------- ---------- ---------- ---------- Less distributions from realized gain on investments--net -- -- (.32) (.73) (2.26) ---------- ---------- ---------- ---------- ---------- Net asset value, end of period $ 17.81 $ 17.56 $ 12.38 $ 17.12 $ 16.20 ========== ========== ========== ========== ========== Total Investment Return** Based on net asset value per share 1.42%+++ 41.84% (25.92%) 10.56% 34.01% ========== ========== ========== ========== ========== Ratios to Average Net Assets Expenses 1.02%* 1.09% 1.12% 1.10% 1.47% ========== ========== ========== ========== ========== Investment income (loss)--net .02%* (.09%) (.01%) .19% (.01%) ========== ========== ========== ========== ========== Supplemental Data Net assets, end of period (in thousands) $ 108,684 $ 91,845 $ 59,125 $ 72,570 $ 3,770 ========== ========== ========== ========== ========== Portfolio turnover 41.55% 86.16% 73.90% 98.94% 153.48% ========== ========== ========== ========== ========== * Annualized. ** Total investment returns exclude the effects of sales charges. *** Based on average shares outstanding. ++ Amount is less than $(.01) per share. ++++ Amount is less than $.01 per share. +++ Aggregate total investment return. +++++ Effective April 14, 2003, Class A Shares were redesignated Class I Shares. See Notes to Financial Statements.
MERRILL LYNCH MID CAP VALUE OPPORTUNITIES FUND, JULY 31, 2004 Financial Highlights (concluded)
Class R For the The following per share data and ratios have been derived Six Months For the Period from information provided in the financial statements. Ended February 4, 2003++ July 31, to January 31, Increase (Decrease) in Net Asset Value: 2004 2004 Per Share Operating Performance Net asset value, beginning of period $ 16.87 $ 11.81 ------------ ------------ Investment loss--net*** (.05) (.09) Realized and unrealized gain on investments--net .24 5.15 ------------ ------------ Total from investment operations .19 5.06 ------------ ------------ Net asset value, end of period $ 17.06 $ 16.87 ============ ============ Total Investment Return** Based on net asset value per share 1.13%+++ 42.85%+++ ============ ============ Ratios to Average Net Assets Expenses 1.51%* 1.53%* ============ ============ Investment loss--net (.51%)* (.58%)* ============ ============ Supplemental Data Net assets, end of period (in thousands) $ 3,137 $ 467 ============ ============ Portfolio turnover 41.55% 86.16% ============ ============ * Annualized. ** Total investment returns exclude the effects of sales charges. *** Based on average shares outstanding. ++ Commencement of operations. +++ Aggregate total investment return. See Notes to Financial Statements.
MERRILL LYNCH MID CAP VALUE OPPORTUNITIES FUND, JULY 31, 2004 Notes to Financial Statements 1. Significant Accounting Policies: Merrill Lynch Mid Cap Value Opportunities Fund (the "Fund") (formerly Merrill Lynch MidCap Value Fund) is a series of The Asset Program, Inc. (the "Program"), which is registered under the Investment Company Act of 1940, as amended, as a diversified, open- end management investment company. The Fund's financial statements are prepared in conformity with U.S. generally accepted accounting principles, which may require the use of management accruals and estimates. Actual results may differ from these estimates. These unaudited financial statements reflect all adjustments, which are, in the opinion of management, necessary to present a fair statement of the results for the interim period. All such adjustments are of a normal, recurring nature. The Fund offers multiple classes of shares. Shares of Class A and Class I are sold with a front-end sales charge. Shares of Class B and Class C may be subject to a contingent deferred sales charge. Class R Shares are sold only to certain retirement plans. All classes of shares have identical voting, dividend, liquidation and other rights and the same terms and conditions, except that Class A, Class B, Class C and Class R Shares bear certain expenses related to the account maintenance of such shares, and Class B, Class C and Class R Shares also bear certain expenses related to the distribution of such shares. Each class has exclusive voting rights with respect to matters relating to its account maintenance and distribution expenditures. Income, expenses (other than expenses attributable to a specific class) and realized and unrealized gains and losses on investments and foreign currency transactions are allocated daily to each class based on its relative net assets. The following is a summary of significant accounting policies followed by the Fund. (a) Valuation of investments--Equity securities that are held by the Fund that are traded on stock exchanges or the Nasdaq National Market are valued at the last sale price or official close price on the exchange, as of the close of business on the day the securities are being valued or, lacking any sales, at the last available bid price for long positions, and at the last available ask price for short positions. In cases where equity securities are traded on more than one exchange, the securities are valued on the exchange designated as the primary market by or under the authority of the Board of Directors of the Fund. Long positions traded in the over- the-counter ("OTC") market, Nasdaq Small Cap or Bulletin Board are valued at the last available bid price or yield equivalent obtained from one or more dealers or pricing services approved by the Board of Directors of the Fund. Short positions traded in the OTC market are valued at the last available ask price. Portfolio securities that are traded both in the OTC market and on a stock exchange are valued according to the broadest and most representative market. Options written are valued at the last sale price in the case of exchange-traded options or, in the case of options traded in the OTC market, the last ask price. Options purchased are valued at their last sale price in the case of exchange-traded options or, in the case of options traded in the OTC market, the last bid price. Swap agreements are valued daily based upon quotations from market makers. Financial futures contracts and options thereon, which are traded on exchanges, are valued at their last sale price as of the close of such exchanges. Obligations with remaining maturities of 60 days or less are valued at amortized cost unless the Investment Adviser believes that this method no longer produces fair valuations. Repurchase agreements are valued at cost plus accrued interest. The Fund employs pricing services to provide certain securities prices for the Fund. Securities and assets for which market quotations are not readily available are valued at fair value as determined in good faith by or under the direction of the Board of Directors of the Fund, including valuations furnished by the pricing services retained by the Fund, which may use a matrix system for valuations. The procedures of a pricing service and its valuations are reviewed by the officers of the Fund under the general supervision of the Fund's Board of Directors. Such valuations and procedures will be reviewed periodically by the Board of Directors of the Fund. Generally, trading in foreign securities, as well as U.S. government securities and money market instruments, is substantially completed each day at various times prior to the close of business on the New York Stock Exchange ("NYSE"). The values of such securities used in computing the net asset value of the Fund's shares are determined as of such times. Foreign currency exchange rates also are generally determined prior to the close of business on the NYSE. Occasionally, events affecting the values of such securities and such exchange rates may occur between the times at which they are determined and the close of business on the NYSE that may not be reflected in the computation of the Fund's net asset value. If events (for example, a company announcement, market volatility or a natural disaster) occur during such periods that are expected to materially affect the value of such securities, those securities may be valued at their fair value as determined in good faith by the Fund's Board of Directors or by the Investment Adviser using a pricing service and/or procedures approved by the Fund's Board of Directors. MERRILL LYNCH MID CAP VALUE OPPORTUNITIES FUND, JULY 31, 2004 Notes to Financial Statements (continued) (b) Derivative financial instruments--The Fund may engage in various portfolio strategies both to increase the return of the Fund and to hedge, or protect, its exposure to interest rate movements and movements in the securities markets. Losses may arise due to changes in the value of the contract or if the counterparty does not perform under the contract. * Financial futures contracts--The Fund may purchase or sell financial futures contracts and options on such futures contracts. Futures contracts are contracts for delayed delivery of securities at a specific future date and at a specific price or yield. Upon entering into a contract, the Fund deposits and maintains as collateral such initial margin as required by the exchange on which the transaction is effected. Pursuant to the contract, the Fund agrees to receive from or pay to the broker an amount of cash equal to the daily fluctuation in value of the contract. Such receipts or payments are known as variation margin and are recorded by the Fund as unrealized gains or losses. When the contract is closed, the Fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. * Options--The Fund may write and purchase call and put options. When the Fund writes an option, an amount equal to the premium received by the Fund is reflected as an asset and an equivalent liability. The amount of the liability is subsequently marked-to- market to reflect the current value of the option written. When a security is purchased or sold through an exercise of an option, the related premium paid (or received) is added to (or deducted from) the basis of the security acquired or deducted from (or added to) the proceeds of the security sold. When an option expires (or the Fund enters into a closing transaction), the Fund realizes a gain or loss on the option to the extent of the premiums received or paid (or gain or loss to the extent the cost of the closing transaction exceeds the premium paid or received). Written and purchased options are non-income producing investments. * Foreign currency options and futures--The Fund may also purchase or sell listed or over-the-counter foreign currency options, foreign currency futures and related options on foreign currency futures as a short or long hedge against possible variations in foreign exchange rates. Such transactions may be effected with respect to hedges on non-U.S. dollar-denominated securities owned by the Fund, sold by the Fund but not yet delivered, or committed or anticipated to be purchased by the Fund. * Forward foreign exchange contracts--The Fund may enter into forward foreign exchange contracts as a hedge against either specific transactions or portfolio positions. The contract is marked- to-market daily and the change in market value is recorded by the Fund as an unrealized gain or loss. When the contract is closed, the Fund records a realized gain or loss equal to the difference between the value at the time it was opened and the value at the time it was closed. (c) Foreign currency transactions--Transactions denominated in foreign currencies are recorded at the exchange rate prevailing when recognized. Assets and liabilities denominated in foreign currencies are valued at the exchange rate at the end of the period. Foreign currency transactions are the result of settling (realized) or valuing (unrealized) assets or liabilities expressed in foreign currencies into U.S. dollars. Realized and unrealized gains or losses from investments include the effects of foreign exchange rates on investments. (d) Income taxes--It is the Fund's policy to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its taxable income to its shareholders. Therefore, no federal income tax provision is required. Under the applicable foreign tax law, a withholding tax may be imposed on interest, dividends and capital gains at various rates. MERRILL LYNCH MID CAP VALUE OPPORTUNITIES FUND, JULY 31, 2004 Notes to Financial Statements (continued) (e) Security transactions and investment income--Security transactions are recorded on the dates the transactions are entered into (the trade dates). Realized gains and losses on security transactions are determined on the identified cost basis. Dividend income is recorded on the ex-dividend dates. Dividends from foreign securities where the ex-dividend date may have passed are subsequently recorded when the Fund has determined the ex-dividend date. Interest income is recognized on the accrual basis. (f) Prepaid registration fees--Prepaid registration fees are charged to expense as the related shares are issued. (g) Dividends and distributions--Dividends and distributions paid by the Fund are recorded on the ex-dividend dates. (h) Securities lending--The Fund may lend securities to financial institutions that provide cash or securities issued or guaranteed by the U.S. government as collateral, which will be maintained at all times in an amount equal to at least 100% of the current market value of the loaned securities. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. Where the Fund receives securities as collateral for the loaned securities, it collects a fee from the borrower. The Fund typically receives the income on the loaned securities but does not receive the income on the collateral. Where the Fund receives cash collateral, it may invest such collateral and retain the amount earned on such investment, net of any amount rebated to the borrower. Loans of securities are terminable at any time and the borrower, after notice, is required to return borrowed securities within five business days. The Fund may pay reasonable finder's, lending agent, administrative and custodial fees in connection with its loans. In the event that the borrower defaults on its obligation to return borrowed securities because of insolvency or for any other reason, the Fund could experience delays and costs in gaining access to the collateral. The Fund also could suffer a loss where the value of the collateral falls below the market value of the borrowed securities, in the event of borrower default or in the event of losses on investments made with cash collateral. (i) Expenses--Certain expenses have been allocated to the individual funds in the Program on a pro rata basis based upon the respective aggregate net asset value of each fund included in the Program. (j) Custodian bank--The Fund recorded an amount payable to the custodian bank which resulted from management estimates of available cash. 2. Investment Advisory Agreement and Transactions with Affiliates: The Fund has entered into an Investment Advisory Agreement with Merrill Lynch Investment Managers, L.P. ("MLIM"). The general partner of MLIM is Princeton Services, Inc. ("PSI"), an indirect, wholly-owned subsidiary of Merrill Lynch & Co., Inc. ("ML & Co."), which is the limited partner. The Program has also entered into a Distribution Agreement and Distribution Plans with FAM Distributors, Inc. ("FAMD" or the "Distributor"), which is a wholly-owned subsidiary of Merrill Lynch Group, Inc. MLIM is responsible for the management of the Fund's portfolio and provides the necessary personnel, facilities, equipment and certain other services necessary to the operations of the Fund. For such services, the Fund pays a monthly fee at the annual rate of .65% of the average net assets of the Fund. MLIM has entered into a Sub- Advisory Agreement with Merrill Lynch Asset Management U.K. Limited ("MLAM U.K."), an affiliate of MLIM, pursuant to which MLAM U.K. provides investment advisory services to MLIM with respect to the Fund. There is no increase in the aggregate fees paid by the Fund for these services. Pursuant to the Distribution Plans adopted by the Program in accordance with Rule 12b-1 under the Investment Company Act of 1940, the Fund pays the Distributor ongoing account maintenance and distribution fees. The fees are accrued daily and paid monthly at annual rates based upon the average daily net assets of the shares as follows: Account Maintenance Distribution Fee Fee Class A .25% -- Class B .25% .75% Class C .25% .75% Class R .25% .25% MERRILL LYNCH MID CAP VALUE OPPORTUNITIES FUND, JULY 31, 2004 Notes to Financial Statements (continued) Pursuant to a sub-agreement with the Distributor, Merrill Lynch, Pierce, Fenner & Smith Incorporated ("MLPF&S"), a subsidiary of ML & Co., also provides account maintenance and distribution services to the Fund. The ongoing account maintenance fee compensates the Distributor and MLPF&S for providing account maintenance services to Class A, Class B, Class C and Class R shareholders. The ongoing distribution fee compensates the Distributor and MLPF&S for providing shareholder and distribution- related services to Class B, Class C and Class R shareholders. For the six months ended July 31, 2004, FAMD earned underwriting discounts and MLPF&S earned dealer concessions on sales of the Fund's Class A and Class I Shares as follows: FAMD MLPF&S Class A $2,065 $ 30,636 Class I $ 82 $ 1,420 For the six months ended July 31, 2004, MLPF&S received contingent deferred sales charges of $111,123 and $4,419 relating to transactions in Class B and Class C Shares, respectively. The Fund has received an exemptive order from the Securities and Exchange Commission permitting it to lend portfolio securities to MLPF&S or its affiliates. As of July 31, 2004, the Fund lent securities with a value of $2,770,500 to MLPF&S or its affiliates. Pursuant to that order, the Fund also has retained Merrill Lynch Investment Managers, LLC ("MLIM, LLC"), an affiliate of MLIM, as the securities lending agent for a fee based on a share of the returns on investment of cash collateral. MLIM, LLC may, on behalf of the Fund, invest cash collateral received by the Fund for such loans, among other things, in a private investment company managed by MLIM, LLC or in registered money market funds advised by MLIM or its affiliates. For the six months ended July 31, 2004, MLIM, LLC received $13,547 in securities lending agent fees. In addition, MLPF&S received $96,190 in commissions on the execution of portfolio security transactions for the Fund for the six months ended July 31, 2004. Financial Data Services, Inc. ("FDS"), a wholly-owned subsidiary of ML & Co., is the Program's transfer agent. For the six months ended July 31, 2004, the Fund reimbursed MLIM $4,221 for certain accounting services. Certain officers and/or directors of the Program are officers and/or directors of MLIM, FDS, PSI, FAMD, and/or ML & Co. 3. Investments: Purchases and sales of investments, excluding short-term securities, for the six months ended July 31, 2004 were $157,317,986 and $159,954,532, respectively. 4. Capital Share Transactions: Net increase (decrease) in net assets derived from capital share transactions were $13,348,306 and $(3,271,592) for the six months ended July 31, 2004 and the year ended January 31, 2004, respectively. Transactions in capital shares for each class were as follows: Class A Shares for the Six Months Ended Dollar July 31, 2004 Shares Amount Shares sold 674,764 $ 12,104,921 Automatic conversion of shares 328,617 5,889,502 ---------------- ---------------- Total issued 1,003,381 17,994,423 Shares redeemed (645,697) (11,684,868) ---------------- ---------------- Net increase 357,684 $ 6,309,555 ================ ================ Class A Shares for the Year Dollar Ended January 31, 2004 Shares Amount Shares sold 1,033,155 $ 14,869,599 Automatic conversion of shares 714,328 10,389,781 ---------------- ---------------- Total issued 1,747,483 25,259,380 Shares redeemed (743,365) (10,882,870) ---------------- ---------------- Net increase 1,004,118 $ 14,376,510 ================ ================ MERRILL LYNCH MID CAP VALUE OPPORTUNITIES FUND, JULY 31, 2004 Notes to Financial Statements (concluded) Class B Shares for the Six Months Ended Dollar July 31, 2004 Shares Amount Shares sold 523,502 $ 9,004,967 Automatic conversion of shares (342,485) (5,889,502) Shares redeemed (862,860) (14,806,733) ---------------- ---------------- Net decrease (681,843) $ (11,691,268) ================ ================ Class B Shares for the Year Dollar Ended January 31, 2004 Shares Amount Shares sold 1,163,630 $ 16,729,114 Automatic conversion of shares (740,282) (10,389,781) Shares redeemed (1,795,149) (24,689,495) ---------------- ---------------- Net decrease (1,371,801) $ (18,350,162) ================ ================ Class C Shares for the Six Months Ended Dollar July 31, 2004 Shares Amount Shares sold 493,160 $ 8,484,543 Shares redeemed (488,197) (8,383,672) ---------------- ---------------- Net increase 4,963 $ 100,871 ================ ================ Class C Shares for the Year Dollar Ended January 31, 2004 Shares Amount Shares sold 712,972 $ 10,434,756 Shares redeemed (1,291,213) (18,090,030) ---------------- ---------------- Net decrease (578,241) $ (7,655,274) ================ ================ Class I Shares for the Six Months Ended Dollar July 31, 2004 Shares Amount Shares sold 1,450,496 $ 26,314,811 Shares redeemed (575,821) (10,420,113) ---------------- ---------------- Net increase 874,675 $ 15,894,698 ================ ================ Class I Shares for the Year Dollar Ended January 31, 2004 Shares Amount Shares sold 2,010,787 $ 31,127,233 Shares redeemed (1,558,315) (23,178,188) ---------------- ---------------- Net increase 452,472 $ 7,949,045 ================ ================ Class R Shares for the Six Months Ended Dollar July 31, 2004 Shares Amount Shares sold 202,447 $ 3,537,225 Shares redeemed (46,304) (802,775) ---------------- ---------------- Net increase 156,143 $ 2,734,450 ================ ================ Class R Shares for the Period February 4, 2003++ to Dollar January 31, 2004 Shares Amount Shares sold 56,790 $ 901,164 Shares redeemed (29,106) (492,875) ---------------- ---------------- Net increase 27,684 $ 408,289 ================ ================ ++Commencement of operations. 5. Short-Term Borrowings: The Fund, along with certain other funds managed by MLIM and its affiliates, is a party to a $500,000,000 credit agreement with Bank One, N.A. and certain other lenders. The Fund may borrow under the credit agreement to fund shareholder redemptions and for other lawful purposes other than for leverage. The Fund may borrow up to the maximum amount allowable under the Fund's current prospectus and statement of additional information, subject to various other legal, regulatory or contractual limits. The Fund pays a commitment fee of .09% per annum based on the Fund's pro rata share of the unused portion of the credit agreement. Amounts borrowed under the credit agreement bear interest at a rate equal to, at each fund's election, the Federal Funds rate plus .50% or a base rate as determined by Bank One, N.A. On November 28, 2003, the credit agreement was renewed for one year under the same terms. The Fund did not borrow under the credit agreement during the six months ended July 31, 2004. 6. Capital Loss Carryforward: On January 31, 2004, the Fund had a net capital loss carryforward of $19,099,443, of which $3,136,600 expires in 2011 and $15,962,843 expires in 2012. This amount will be available to offset like amounts of any future taxable gains. MERRILL LYNCH MID CAP VALUE OPPORTUNITIES FUND, JULY 31, 2004 Officers and Directors Terry K. Glenn, President and Director James H. Bodurtha, Director Joe Grills, Director Herbert I. London, Director Andre F. Perold, Director Roberta Cooper Ramo, Director Robert S. Salomon, Jr., Director Stephen B. Swensrud, Director Robert C. Doll, Jr., Senior Vice President R. Elise Baum, Vice President and Portfolio Manager Donald C. Burke, Vice President and Treasurer Phillip S. Gillespie, Secretary Custodian The Bank of New York 100 Church Street New York, NY 10286 Transfer Agent Financial Data Services, Inc. 4800 Deer Lake Drive East Jacksonville, FL 32246-6484 800-637-3863 MERRILL LYNCH MID CAP VALUE OPPORTUNITIES FUND, JULY 31, 2004 Availability of Quarterly Schedule of Investments The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission ("SEC") for the first and third quarters of each fiscal year on Form N-Q. The Fund's Forms N-Q are available on the SEC's Web site at http://www.sec.gov. The Fund's Forms N-Q may also be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Electronic Delivery The Fund offers electronic delivery of communications to its shareholders. In order to receive this service, you must register your account and provide us with e-mail information. To sign up for this service, simply access this Web site http://www.icsdelivery.com/live and follow the instructions. When you visit this site, you will obtain a personal identification number (PIN). You will need this PIN should you wish to update your e-mail address, choose to discontinue this service and/or make any other changes to the service. This service is not available for certain retirement accounts at this time. MERRILL LYNCH MID CAP VALUE OPPORTUNITIES FUND, JULY 31, 2004 Item 2 - Code of Ethics - Not Applicable to this semi-annual report Item 3 - Audit Committee Financial Expert - Not Applicable to this semi-annual report Item 4 - Principal Accountant Fees and Services - Not Applicable to this semi-annual report Item 5 - Audit Committee of Listed Registrants - Not Applicable Item 6 - Schedule of Investments - Not Applicable Item 7 - Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies - Not Applicable Item 8 - Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers - Not Applicable Item 9 - Submission of Matters to a Vote of Security Holders - Not Applicable Item 10 - Controls and Procedures 10(a) - The registrant's certifying officers have reasonably designed such disclosure controls and procedures to ensure material information relating to the registrant is made known to us by others particularly during the period in which this report is being prepared. The registrant's certifying officers have determined that the registrant's disclosure controls and procedures are effective based on our evaluation of these controls and procedures as of a date within 90 days prior to the filing date of this report. 10(b) - There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Act (17 CFR 270.30a-3(d)) that occurred during the last fiscal half-year of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. Item 11 - Exhibits attached hereto 11(a)(1) - Code of Ethics - Not Applicable to this semi-annual report 11(a)(2) - Certifications - Attached hereto 11(a)(3) - Not Applicable 11(b) - Certifications - Attached hereto Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Merrill Lynch Mid Cap Value Opportunities Fund of The Asset Program, Inc. By: _/s/ Terry K. Glenn_______ Terry K. Glenn, President of Merrill Lynch Mid Cap Value Opportunities Fund of The Asset Program, Inc. Date: September 17, 2004 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By: _/s/ Terry K. Glenn________ Terry K. Glenn, President of Merrill Lynch Mid Cap Value Opportunities Fund of The Asset Program, Inc. Date: September 17, 2004 By: _/s/ Donald C. Burke________ Donald C. Burke, Chief Financial Officer of Merrill Lynch Mid Cap Value Opportunities Fund of The Asset Program, Inc. Date: September 17, 2004 EX-99.CERT 2 ex-99.txt EX-99 CERT EX-99. CERT CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Terry K. Glenn, President of Merrill Lynch Mid Cap Value Opportunities Fund of The Asset Program, Inc., certify that: 1. I have reviewed this report on Form N-CSR of Merrill Lynch Mid Cap Value Opportunities Fund of The Asset Program, Inc. (the "Fund"); 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the Fund as of, and for, the periods presented in this report; 4. The Fund's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the Fund and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Fund, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) evaluated the effectiveness of the Fund's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and c) disclosed in this report any change in the Fund's internal control over financial reporting that occurred during the Fund's most recent fiscal half-year (the Fund's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Fund's internal control over financial reporting; and 5. The Fund's other certifying officer(s) and I have disclosed to the Fund's auditors and the audit committee of the Fund's board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Fund's ability to record, process, summarize, and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Fund's internal control over financial reporting. Date: September 17, 2004 /s/ Terry K. Glenn Terry K. Glenn, President of Merrill Lynch Mid Cap Value Opportunities Fund of The Asset Program, Inc. EX-99. CERT CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Donald C. Burke, Chief Financial Officer of Merrill Lynch Mid Cap Value Opportunities Fund of The Asset Program, Inc., certify that: 1. I have reviewed this report on Form N-CSR of Merrill Lynch Mid Cap Value Opportunities Fund of The Asset Program, Inc. (the "Fund"); 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the Fund as of, and for, the periods presented in this report; 4. The Fund's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the Fund and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Fund, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) evaluated the effectiveness of the Fund's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and c) disclosed in this report any change in the Fund's internal control over financial reporting that occurred during the Fund's most recent fiscal half-year (the Fund's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Fund's internal control over financial reporting; and 5. The Fund's other certifying officer(s) and I have disclosed to the Fund's auditors and the audit committee of the Fund's board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Fund's ability to record, process, summarize, and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Fund's internal control over financial reporting. Date: September 17, 2004 /s/ Donald C. Burke Donald C. Burke, Chief Financial Officer of Merrill Lynch Mid Cap Value Opportunities Fund of The Asset Program, Inc. Exhibit 99.1350CERT Certification Pursuant to Section 906 of the Sarbanes Oxley Act I, Terry K. Glenn, President of Merrill Lynch Mid Cap Value Opportunities Fund of The Asset Program, Inc. (the "Fund"), certify that: 1. The N-CSR of the Fund (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Fund. Dated: September 17, 2004 /s/ Terry K. Glenn Terry K. Glenn, President of Merrill Lynch Mid Cap Value Opportunities Fund of The Asset Program, Inc. A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Merrill Lynch Mid Cap Value Opportunities Fund of The Asset Program, Inc. and will be retained by Merrill Lynch Mid Cap Value Opportunities Fund of The Asset Program, Inc. and furnished to the Securities and Exchange Commission or its staff upon request. Exhibit 99.1350CERT Certification Pursuant to Section 906 of the Sarbanes Oxley Act I, Donald C. Burke, Chief Financial Officer of Merrill Lynch Mid Cap Value Opportunities Fund of The Asset Program, Inc. (the "Fund"), certify that: 1. The N-CSR of the Fund (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Fund. Dated: September 17, 2004 /s/ Donald C. Burke Donald C. Burke, Chief Financial Officer of Merrill Lynch Mid Cap Value Opportunities Fund of The Asset Program, Inc. A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Merrill Lynch Mid Cap Value Opportunities Fund of The Asset Program, Inc. and will be retained by Merrill Lynch Mid Cap Value Opportunities Fund of The Asset Program, Inc. and furnished to the Securities and Exchange Commission or its staff upon request. -----END PRIVACY-ENHANCED MESSAGE-----